Southern Cross Media : Annual Report 2023

ANNUAL REPORT

Year In Review

SCA's Audio audiences continued to grow, while Audio revenue was flat in challenging market conditions. Digital revenue outpaced the market, increasing by 36.2%. Group revenue declined 3.7%, weighed down by a 14.5% decline in Television revenue. Despite inflationary pressures, non-revenue-related expenses reduced by 1.3% and total expenses reduced by 2.0%.

FY23	FY22	Variance
Revenue	$505.6M	$524.9M	(3.7%)
Expenses	$(428.4M)	$(436.9M)	2.0%
EBITDA	$77.2M	$87.9M	(12.2%)
NPAT	$21.9M	$27.4M	(20.1%)
Reported NPAT	$19.1M	$(153.7M)	n.m.
Net debt	$105.0M	$78.5M	33.8%
Free cash conversion	75.8%	67.2%	860 bps
Full year dividends (cps)	6.80 cps	9.25 cps	(2.45 cps)
SCA is all about Audio.

Nationally, the combination of SCA's Triple M and Hit Networks have nearly nine million weekly listeners and the largest metro Radio audiences for the key People 10+, 25-54 Men and 25-54 Women. Highlights included The Fox having Melbourne's biggest audience, 2Day FM continuing to grow its audience, Triple M and SAFM Breakfast shows rating first and second in Adelaide, and B105 reclaiming the number one Breakfast position in Brisbane.

LiSTNR achieved positive milestones during the year, with more than 1.5 million signed-in users and a monetisable audience network of over eight million monthly listeners, the largest in the Australian Podcast Ranker. This is increasing consideration by media buyers, as demonstrated by growth of 36.2% in Digital Audio revenues. Our strategic sales representation and distribution partnerships with leading global and local publishers such as Wondery, SiriusXM, Stitcher, Schwartz Media and Diamantina Media position LiSTNR to take a leading share of the $235.6 million Australian Digital Audio market.

Source: IAB Australia's FY23 Online Advertising Expenditure Report (OAER) prepared by PwC.

Contents

We were proud that LiSTNR's production of The Children in the Pictures podcast won Gold at the New York Radio Festival Awards for best narrative documentary.

Our Television sales teams did well to achieve a parity sales-to-ratings power ratio in our Network 10 markets, mitigating the impacts of declining advertising markets, a comparatively softer ratings performance by Network 10 programming, and our regional Television competitors having more unified sales processes.

In the year ahead, we are targeting further gains in our Broadcast and Digital Audiences and commercial shares, while optimising the structure of our regional television operations to improve our national sales proposition and returns. Our strategic cost review will remove $12 to $15 million in annualised operating costs, with $5 to $7 million targeted for the current financial year. Our reduced capital expenditure (capex) program focuses on innovation to increase the size of and returns from our monetisable audiences.

Year In Review	IFC	Governance	13
Chairman's Statement	02	SCA Embrace and Community	14
CEO's Report	04	The Board and Leadership Team	20
Operational Review	06	Financial Report	25
Television	11	Additional Stock Exchange Information	97
Boomtown	12	Corporate Directory	99
Year In Review

8.89M*

6.65M*

4.57M*

Total FM, AM and DAB+ audience

Total Hit FM and DAB+ audience

Total Triple M FM and

DAB+ audience

3.36M**

1.94M***

9.15M***

Total TV reach

Average monthly unique radio streamersAverage monthly streaming total listening hours

4.48M^

1.52M^^

10M^^^

Average monthly unique podcast listeners

Total LiSTNR signed-up users

Total digital audio network audience

* Source: GFK Radio 360 Ratings, Total Radio. Survey #5 2023 - Metro (FM & DAB+). Canberra, Gold Coast, Newcastle Survey #2 2023. Mon-Sun 5:30-12mn Cume. Geraldton Survey, Port Macquarie, Roma, Albany, Wheatbelt, Bundaberg, Esperance, Toowoomba, Kalgoorlie, Bendigo #1 2021. Karratha, Mt Gambier, Coffs Harbour, Griffith, Port Hedland Broome, Wagga Wagga, Central Qld,

Central Coast, Townsville, Orange, Bunbury, Cairns, Atherton, Albury, Warragul #1 12022 (FM/AM) Mon-Sun ROS Cume. Xtra Insights Survey #1 2023 Mon-Sun ROS, Cume Reach, Mt Isa, Kingaroy, Shepparton, Emerald, Mildura, Hobart, Maryborough, Bendigo, Mackay, Bundaberg. ** Source: Regional TAM Data. Total People. 4AGGS (Network 10 + SKY NEWS Regional), WA (Network 10) & TAS (Seven Network & Network 10). Average weekly reach (1 Min Cume). 0200-2600. Consolidated 7. Sun-Sat. (03/07/22-01/07/23) WK 28 2021 - WK 26 2022 (Excl. Summer & Easter). Diary Markets - Last available survey. 0600-2400. CEN - 2007. DAR - 2011. SGT - 2015. *** Source: Triton Streaming Metrics. ^ Source: Triton Podcast Metrics. ^^ Source: Firebase Authenticated User Counts. ^^^

Source: LiSTNR Digital Audio Network: 10M Australians per month, including LiSTNR streaming, podcasts, Soundcloud and Sonos.

Year In Review | 1

Chairman's Statement

Southern Cross Austereo performed solidly during the year, increasing audience for our core Radio and Digital Audio assets, and growing our commercial share of metro and regional Radio and Digital Audio markets. Nationally, the combination of SCA's Triple M and Hit Networks have nearly nine million weekly listeners and the largest metro Radio audiences for People 10+ and in the key buying demographics of People 25-54, Women 25-54 and Men 25-54. Signed-in users to LiSTNR surged past 1.5 million and our LiSTNR podcast audience network reached eight million.

Group revenue of $505.6 million ended 3.7% down on the prior year, and EBITDA of $77.2 million was down 12%. Metro Radio revenue grew 0.6% in a flat market, while regional Radio revenues declined by 4.6%. Promising growth in broadcast media markets in the first four months of FY23 changed to a sharp contraction over the remainder of the year.

2 | Chairman's Statement

Our regional Television business dragged on our results, with the impact of declining advertising markets exacerbated by a comparatively softer ratings performance by Network 10 programming and our regional Television competitors having more unified sales processes. Our Television sales teams did well to achieve a parity sales-to-ratings power ratio in our Network 10 markets, and steps are underway this year to provide a one-stop shop to media agencies and national advertisers and more reliable returns to SCA and our shareholders.

Our ongoing development of LiSTNR positions SCA to take a leading share of the growing Australian Digital Audio market, currently estimated by the Internet Advertising Bureau at $235.6 million. SCA's digital audio revenue increased by 36% to $21.3 million, bringing forward our expected earnings breakeven point for LiSTNR to the last quarter of FY24.

Source: IAB Australia's FY23 Online Advertising Expenditure Report (OAER) prepared by PwC.

During the year, we made further improvements in the user experience on LiSTNR, enhanced our data analytics capability, and significantly expanded the content on LiSTNR both through our own podcasts and streaming music stations and through strategic sales representation and distribution partnerships with leading global and local publishers such as Wondery, SiriusXM, Stitcher, Schwartz Media and Diamantina Media. SCA represents six of the top 20 podcasts in the Australian Podcast Ranker for July 2023: Hamish and Andy, 7am (Schwartz Media), Crime Junkie (SiriusXM), Morbid (Wondery), It's A Lot with Abbie Chatfield, and Triple M Footy (AFL).

Following the retirement of Melanie Willis in August 2022, the Board revised its skills matrix to update relevant descriptions and to emphasise the importance of skills in people leadership, innovation, digital transformation, risk management, and specific aspects of SCA's core media business. Being satisfied the Board's reduced size and itsmix of skills and experience are appropriate for SCA's needs, we did not seek a replacement for Melanie but adjusted the compositions of committees to balance responsibilities and plan for future succession. This included Heith Mackay-Cruise taking over as Chair of the People and Culture Committee and Carole Campbell joining the Digital Transformation Committee.

The Board oversaw several changes in SCA's senior executive ranks during FY23. SCA's Chief Executive Officer, Chief Financial Officer and Chief Sales Officer resigned during the year.

After eight years, Grant Blackley stepped down as Managing Director. Grant made a significant contribution in transforming SCA to a truly national media business and navigating SCA through the challenges presented by the lockdowns and uneven recovery from the COVID-19 pandemic. It is to Grant's credit that he embraced and led a robust succession planning process throughout his tenure which gave the Board confidence in appointing John Kelly as Grant's successor. John brings extensive strategic, operational and financial leadership experience from 25 years working for Australian media and sporting organisations, including the last seven as SCA's Chief Operating Officer.

An external candidate, Tim Young, was appointed as Chief Financial Officer in February 2023 and Seb Rennie, who had joined SCA in a different role in March 2023, was appointed as Chief Commercial Officer in May 2023.

As outlined in John's CEO's report, our refreshed and streamlined leadership team has clear goals to drive improvements in financial performance and returns for shareholders in the year ahead.

On behalf of the Board, I thank our shareholders and all our people and partners around Australia for your ongoing support of SCA.

I trust you will enjoy reading our Annual Report.

Rob Murray Chair

Chairman's Statement | 3