Sky Network Television (SKT) Trading Update summary

Strategic rationale and growth acceleration

• Acquisition of Discovery NZ accelerates growth strategy, delivering immediate scale in advertising and digital segments.

• Creates significant audience presence, aligning with ambitions to be a leading media company in New Zealand.

• Expands reach to younger, more diverse audiences and strengthens multi-platform approach, especially through ThreeNow BVOD.

• Leverages established brands and content genres, enhancing cross-platform marketing opportunities.

• Revenue diversification with an uplift of ~$95m annually, ~25% from digital, and combined advertising revenue share reaching ~35% linear and ~24% digital.

Financial impact and deal structure

• Acquisition completed for $1 on a cash-free, debt-free basis, with immediate revenue uplift of approximately $95m per annum.

• Underlying free cash flow positive in year one, with pathway to incremental free cash flow from FY26 and sustainable EBITDA uplift of at least $10m from FY28.

• Significant cost synergies identified, mainly in content and broadcast infrastructure.

• Transaction does not affect confidence in achieving the 30cps dividend target in FY26.

• Transaction fees estimated at $3m and net integration costs at $6.5m, with completion expected by 1 August 2025.

Operational and integration highlights

• Discovery NZ's transformation, including Newshub closure, has reduced costs and stabilized revenue.

• Acquisition includes Three and ThreeNow brands, BVOD platform, and a portfolio of content rights.

• Pre-structuring actions provide a clean balance sheet and cost certainty through content supply agreements.

• Transitional services agreement in place for 12 months to ensure smooth integration.

• Discovery NZ team to join, with leadership continuity under Juliet Peterson.