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Independent News & Media PLC 1999 Full Year Results

Highlights of Independent News & Media's strong performance in Ireland, Australia, and New Zealand, as well as expansion internationally and successful restructuring plan.

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Independent News & Media PLC 1999 Full Year Results

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  1. INDEPENDENT NEWS & MEDIA PLC. 1999 Full Year Results 29th March, 2000

  2. INTRODUCTION Liam P Healy Group Chief Executive

  3. HIGHLIGHTS FOR THE YEAR • Strong performances in Ireland, Australia and New Zealand • iTouch expands internationally • Unison launches “internet on TV” initiative in Ireland • UK Independent makes circulation gains - losses reduced • South African economy set for recovery • E 200 million 10 year bond issued at coupon of 5.75% • Group restructuring plan substantially completed • Successful bid for Belfast Telegraph since year end

  4. GROUP PROFILE James J Parkinson Group Finance Director

  5. GROUP PROFILE • Listing Information: PLC listed on the Irish, London and New Zealand Stock Exchanges • Current Shareholder Profile: • Dr AJF O’Reilly 28% Irish Institutions 27% • UK Institutions 18% • US Institutions 12% • European Institutions 6% • Private 5% • Board 4% • Market Capitalisation: • E 2.7bn IR£2.1bn STG£1.6bn

  6. LEADING MEDIA BRANDS • Ireland • No. 1 National Publisher • No. 1 Regional Publisher • No. 1 Newspaper/ Magazine Distributor • No. 2 Cable/ MDS Operator • United Kingdom • The Independent, Independent on Sunday • No. 1 Recruitment Magazine Publisher • No. 2 Rugby/ No. 1 U.S. Football Publisher • No. 1 Paid-For Regional Publisher in London • Portugal • No. 1 National Publisher • Hong Kong • No. 2 Transport Adv. • Australia • No. 1 Regional Publisher • No. 2 Radio Operator • No. 1 Outdoor/ Transport Adv • No. 1 Pay-TV Movies • South Africa • No. 1 National Publisher • No. 1 Regional Publisher • No. 1 Commercial Printer • New Zealand • No. 1 National Publisher • No. 1 Regional Publisher • No. 1 Radio Operator • No. 1 Commercial/ Magazine Printer • No. 1 Security Printer

  7. LEADING MEDIA BRANDS • Ireland • No. 1 National Publisher • No. 1 Regional Publisher • No. 1 Newspaper/ Magazine Distributor • No. 2 Cable/ MDS Operator • United Kingdom • The Independent, Independent on Sunday • No. 1 Recruitment Magazine Publisher • No. 2 Rugby/ No. 1 U.S. Football Publisher • No. 1 Paid-For Regional Publisher in London • Dominant media company in 4 of 5 markets • Market share > 50% • 160 newspaper titles/ 45m readers per week • Largest radio/outdoor operator in Australasia • Fast-growing new media operator • Portugal • No. 1 National Publisher • Hong Kong • No. 2 Transport Adv. • Australia • No. 1 Regional Publisher • No. 1 Radio Operator • No. 1 Outdoor/ Transport Adv • No. 1 Pay-TV Movies • South Africa • No. 1 National Publisher • No. 1 Regional Publisher • No. 1 Commercial Printer • New Zealand • No. 1 National Publisher • No. 1 Regional Publisher • No. 1 Radio Operator • No. 1 Commercial/ Magazine Printer • No. 1 Security Printer

  8. GROUP STRATEGY • Geographically diversified • Tight focus on CORE competencies Publishing Outdoor New Media / Electronic • Brand market-leadership positions • Operating margin enhancements • Target + 20%

  9. GROUP STRATEGY • Primary content provider across diverse media platforms • Migrate into revenue enhancing new media platforms • Growth orientated through organic growth & earnings enhancing investments • Deliver double-digit earnings growth & enhanced shareholder value

  10. 1999 RESULTS

  11. HEADLINE NUMBERS 1999 1998 Change E m E m % Turnover 1,168.2 798.8 + 46.2 Operating Profit * 192.4 138.7 + 38.7 Profit Before Tax 142.7 85.4 + 67.1 Net Profit 70.1 58.7 + 19.4 EPS ** 30.72c 24.56c + 25.1 DPS 13.33c 11.43c + 16.7 * Continuing activities before exceptionals ** Before exceptional items and amortisation

  12. SUMMARY BALANCE SHEET 1999 1998 E m E m Fixed Assets * 2,100 1,466 Other Net Liabilities (15) (54) Net Debt (868) (568) Total Shareholders’ Funds * 1,217 844 Interest Cover (EBITDA/Interest) 4.8x 3.3x Net Debt to EBITDA 3.8x 3.6x * Including the revalued elements of mastheads

  13. SUMMARY CASH FLOW 1999 1998 E m E m Operating Profit 190.6 86.9 Restructuring Costs - 54.1 190.6141.0 Share of Associates & JV’s Results (5.8) (15.3) Depreciation & Amortisation 43.2 32.5 EBITDA 228.0158.2 Working Capital Movements (41.5) (28.8) Operating cash flow 186.5129.4 Operating cash flow conversion (%) 81.8% 81.8%

  14. TEN YEAR PERFORMANCE Earnings per Share (E) (Fully diluted before exceptionals & goodwill amortisation) • 10 Year C.A.G.R. • Turnover +22% • Operating Profit +27% • Pre-Tax Profit +31% • Earnings Per Share +14% • Dividends Per Share +15%

  15. KEY OPERATIONAL DRIVERS: 1999 • Recovery in key currencies • Strong performance from Australian operations • Strong second half performance from New Zealand operations • Return to double-digit growth in Irish operations • UK turnaround of Independent titles • Efficient treasury and tax management • Successful implementation of E 50m Group-wide restructuring • > 80% of total planned headcount reductions achieved

  16. CORPORATE ACTIVITY: 1999 • Acquired 100% of South African business • Increased stake in Australia (APN) to 41% • Issued 10 year E 200m Eurobond at 5.75% • New media activities • i-Touch stake >70% • Internet Ireland acquired • Post year end • Successful bid for Belfast Telegraph • Significant expansion of i-Touch activity

  17. GROUP TURNOVER BY MARKET Turnover by Market -- 1999 Total: E 1,168.2m Ireland 27% South Africa 15% UK 13% New Zealand 22% Australia 23%

  18. GROUP PROFITS BY MARKET Operating Profit by Market -- 1999 Total: E 190.6m Ireland 32% South Africa 12% Australia 31% New Zealand 25%

  19. DIVISIONAL PERFORMANCE Brendan M. A. Hopkins Chief Executive - Independent News & Media (UK)

  20. NEW ZEALAND 1999 1998 Change Em Em % Turnover 253.2 208.4 + 21.5 EBITDA 66.7 58.2 + 14.6 Operating Profit 50.0 42.9 + 16.6 Margin (%) 19.7% 20.5%

  21. PROSPECTS • GDP growth of + 3% forecast in 2000 • Significant benefits from restructuring • Growth in New Zealand Herald circulations • Strong start to 2000 NEW ZEALAND • Largest publisher - The New Zealand Herald with 71% national market share and 83% recruitment market share • Largest regional publisher with 58% market share • Largest commercial/ magazine printer • Largest radio operator with 50% + market share

  22. AUSTRALIA 1999 1998 * Change E m E m % Turnover 275.7 243.5 + 13.2 EBITDA 72.1 56.7 + 27.1 Operating Profit 60.8 49.6 + 22.5 Margin (%) 22.1% 20.3% * including 100% of ARN

  23. PROSPECTS • GDP growth of + 3% forecast in 2000 • Organic growth across all divisions • Exciting developments in APN Digital • Syndey Olympics • Strong start to 2000 AUSTRALIA • APN News & Media consolidated from 1999 • Strongest performing media stock (EPS) • Largest regional publisher with 60% + paid penetration • 2nd largest radio operator with 25% + market share • Largest outdoor operator with 70% + market share

  24. SOUTH AFRICA 1999 1998 Change E m E m % Turnover 177.3 175.3 + 1.2 EBITDA 28.2 31.1 - 9.3 Operating Profit 23.3 27.0 - 13.7 Margin (%) 13.1% 15.4%

  25. PROSPECTS • GDP growth of + 3% forecast in 2000 • Interest rates down to 14% - Rand stable • Significant benefits from restructuring • Positive readership/ circulations • Positive start to 2000 SOUTH AFRICA • Largest publisher with 14 metropolitan titles achieving 54% readership market share and 58% of total classified market • Ongoing circulation gains in Gauteng and Cape • New media R&D centre in CapeTown • www.iol.co.za busiest newspaper site • Successful magazine launches with Condé Nast

  26. UNITED KINGDOM 1999 1998 * Change E m E m % Turnover 151.5 142.9 + 6.0 EBITDA (3.3) (3.5) Operating Profit (4.8) (4.9) Margin (%) (3.1%) (3.4%) * based on 100% of UK operation

  27. PROSPECTS • Strong advertising/ circulations • Rapid growth in new media - www.independent.co.uk in top 20 content web sites • Belfast Telegraph integration • Overall strong start to 2000 UNITED KINGDOM • Significant publisher in national, regional press and magazines • Regionals: operating margins at top end of UK peer group • Independent turnaround: • YOY volumes +4% and Circulation share up to 9.5% • Second-time Winner of “Editor of the Year” • Losses significantly reduced • Group synergies achieved • Breakeven on track for 2001

  28. BELFAST TELEGRAPH ACQUISITION • The Belfast Telegraph • Northern Ireland’s leading daily newspaper • Circulates 117,000 Monday-Saturday • More than 50% home delivered • The Sunday Life • Northern Ireland's leading Sunday newspaper • Circulates 95,000 every Sunday • Other Titles • Community Titles, Farm Trader • Thriving new media business • Significant printing facilities and freehold

  29. BELFAST TELEGRAPH ACQUISITION • Earnings enhancing in first year • Unique metropolitan franchise with strong growth prospects • Excellent track record with proven management/ editorial team • Dynamic new media resource • Automatic referral to UK Competition’s Commission • Likely timing 4-6 months • Legal advice positive • Trinity Mirror joint approach • Acquisition price: £300m (less £5m debt)

  30. IRELAND 1999 1998 * Change E m E m % Turnover 310.5 278.8 + 11.4 EBITDA 69.4 59.4 + 16.8 Operating Profit 63.3 53.9 + 17.4 Margin (%) 20.4% 19.3%

  31. PROSPECTS • Continued strong economic growth forecast • Significant benefits from restructuring • New “Citywest” production plant (Q42000) • PHL - broadband network build • Strong start to 2000 IRELAND • Largest publisher with 50% market share and 72% readership penetration • No. 1 title in all 5 newspaper categories • Readership/ circulations up and Advertising market share up • Largest regional publisher with 39% market share • 2nd largest cable/ MDS business (co-owned with TCI Liberty) • Managing >250,000 subscribers

  32. INDEPENDENT DIGITAL Gavin K. O’Reilly Chief Executive - Independent News & Media (Ireland)

  33. GROUP STRATEGY TO OWN THE ONLINE MEDIASPACE CHANNEL MARKETING CONTENT BUILD NEW REVENUE STREAMS ENHANCE EXISTING REVENUE STREAMS

  34. EDUCATION INTERNET TELEPHONY B2B WAP/ SMS CELLULAR • Content Aggregation/ Packaging • Software Development • Proprietorial Software • Premium Database • Distance Learning • Software Development • PrePaid Cards • Residential • SME • Network Provision Worldwide Australasia Ireland • Web “Back Office” Solutions • E-Commerce Engines, Web Enabling, Web Design • B2B Content Solutions • Software Development • Proprietorial Software Ireland Ireland U.S.A. Ireland Australia Israel Ireland New Zealand South Africa United Kingdom Australia Ireland New Zealand South Africa United Kingdom SOPRANO SOPRANO • ISP - Commercial/ Consumer Worldwide Worldwide Ireland Worldwide INDEPENDENT DIGITAL

  35. DIGITAL BRANDING • Ireland’s largest consumer ISP • Set Top Box = market USP and market first. • ISP offering broadband multi-media • PHL’s exclusive “home page” portal for their 250,000 existing subscribers • Building substantial phone/ data traffic for PHL fixed and wireless broadband (2MB) network

  36. DIGITAL BRANDING … CONTENT Independent content Yellow page directory Ireland’s largest classified Shopping mall 27 non-group regional newspaper titles Horoscopes/ weather/ lifestyle/ entertainment/ chat... … CHANNEL / MARKETING Initial 10,000 STB give-away Annualised +£35m equivalent media spend in participating titles Channel promotion to 250,000 subscribers

  37. Enhanced Revenues • New Revenue Streams • New Markets • Leading Brands • Core Expertise • Content • Channel • Marketing … powered by Independent Digital • Delivering • Earnings Growth • Capital Values

  38. SUMMARY: INVESTMENT CASE • Geographically diversified - with tight focus on core competencies • Brand leadership positions - dominant in 4 out of 5 markets • Turnaround of UK Independent • Belfast Telegraph - EPS enhancing • Increasing value of Irish cable/ telephony business

  39. SUMMARY: INVESTMENT CASE • Economic recovery in New Zealand and South Africa • Continuing strong growth in Australia, Ireland and United Kingdom • Returns enhanced through aggressive restructuring • Revenue and profit enhancing new media strategy Strong Double-Digit Earnings Growth

  40. WE ARE COMMITTED TO... • TO DELIVERING DOUBLE-DIGIT EARNINGS GROWTH... • CORE operational strengths • Unrivalled BRAND dominance • COST Restructuring • Expansionist • CREATING REAL SHAREHOLDER VALUE... • PHL cable/ telephony network • Prudent new media strategy • iTouch

  41. Independent News & Media PLC 1999 Preliminary Results 29th March, 2000

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