Corus Entertainment Inc.

Good morning. My name is Eric and I will be your conference operator today. At this time, I would like to welcome everyone to the Chorus Entertainment Q4 2024 and year-end analyst and investor conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. As a reminder, this call is being recorded. I'll now turn the call over to John Gosling, co-CEO and CFO of Chorus Entertainment. Mr. Gosling, you may begin your conference.

Thanks very much, Eric. Good morning, everyone. Welcome to Chorus' physical 2024 fourth quarter and year-end earnings call. With me today is Chief Executive Officer Troy Reeves. Now, before I read the cautionary statement, I would like to remind everyone that we have slides to accompany today's call, and you will find them on our website at www.coresent.com under the investor relations dash events and presentation section. Now, let's move to the standard cautionary statement found on slide two. We note that forward-looking statements may be made during this call. Actual results could differ materially from forecasts, projections, and conclusions in these statements. We would like to remind those on the call today, in addition to disclosing results in accordance with IFRS, of course, also provide supplementary non-IFRS or non-GAAP measures as a method of evaluating the company's performance and to provide a better understanding of how management views the company's performance. Today, we will be referring to certain non-GAAP measures in our remarks. Additional information on these non-GAAP measures and the company's financial results and factors and assumptions relating to forward-looking information can be found in the fourth quarter and year-end reports to shareholders and the 2023 Annual Report, which is filed on CEDAR Plus or in the Investor Relations-Financial Reports section of our website. We'll start on slide three. This past year, our industry experienced an accelerated pace of change with disruptions in the production and distribution of scripted content due to the U.S. writers' and actors' strikes, impacting audience behavior in advertising markets. We also saw greater competition for programming rights and the introduction of ad tiers on most streaming services, resulting in an oversupply of digital advertising inventory. We have risen to the challenge, executing our plan to capture efficiencies and reduce costs to create a sustainable future for Chorus. We continue to focus on what matters, growing assets that have ongoing potential to drive attractive returns, retaining the talented teams that support them, and delivering engaging content to our audiences, which drives results for our advertisers. In fiscal 2024, our consolidated revenues were just under $1.3 billion. We achieved a 21% reduction in direct cost of sales, a 7% reduction in employee costs, and a 15% reduction in other general and administrative costs for the year. We have more cost reductions in sight for fiscal 2025, but we expect this will be offset by increased costs tied to the return of scripted programming this year versus the U.S. strike impact period in fiscal 2024. Discontinuation of certain legacy programming, closure of three AM radio stations, and specialty television network own are examples of some difficult but necessary decisions we have made to lower our costs. We met the fiscal 2024 headcount savings targets mentioned last quarter, and we continue with similar cost reduction initiatives in fiscal 2025, given the ongoing headwinds faced by the industry. Total consolidated segment profit was $283 million for the year. We delivered a free cash flow of $114 million in fiscal 2024, and that's an increase of 7% over the prior year, reflecting the positive impact of our lower cost structure and ongoing careful management of our cash. We reduced bank debt by $39 million this year, which was more than offset by the lower segment profit, resulting in net debt to segment profit of 3.84 times at August 31st, 2024, and that's up from 3.62 times at the end of 2023. Good morning. We announced an amendment to our bank credit facilities effective October 24th, 2024, which provides us relief on certain covenants as we continue to pursue right-sizing initiatives and further reduce costs. We continue to have access to our revolving credit facility for working capital needs with excess cash used to repay outstanding balances. This represents an important step in our comprehensive plan, building on the prudent measures we are taking to strengthen our balance sheet and manage liabilities. And at this point, I'll turn it over to Troy to provide an operational update.

Thank you, John. Thank you, Eric, and good morning, everyone. I will start on slide four. Since we last connected with you, our teams have been moving at record pace, making smart investments in programming and marketing to support the upcoming launch of our two all-new lifestyle networks, adding more unscripted programming to our Slice brand, and preparing for the launch of our incredible fall schedule. Our team has acquired some of the most sought-after titles in television, and we could not be happier with their performance so far. Our new and returning shows have premiered over the last couple of weeks. Season to date, we are thrilled to say that Global's core primetime ratings are up 16% over last fall in the most important demo of Adults 2554. This is by far the biggest gain of any Canadian conventional network and demonstrates that television audiences remain robust even in the face of more competition. Further, the majority of Global's fall schedule premiered just last week with preliminary data indicating that core primetime audiences were the highest we've seen on Global since early fall 22 and a 44% increase over our spring 2024 average following the return of scripted content to our schedule. While still early in the season, Global has seen great momentum with returning hits like 9-1-1, Survivor, Saturday Night Live, and the popular new show Matlock all landing in the top 10 so far. Our top 20 performance is even more impressive on specialty, where chorus networks account for an astounding 90% of the top 20 specialty entertainment programs in Canadian English television. Over to slide five. Our longstanding expertise in understanding our Canadian audiences and delivering premium lifestyle content is evident in the bold reimagining of our specialty television portfolio. We are building fresher, younger, skewing networks with distinctively Canadian brands that will showcase the best in home and culinary content to our loyal and expanding fan bases across the country. In September, we announced two new lifestyle brands, Flavor Network and Home Network, and the reception to them and their programming lineups has been overwhelmingly positive. The networks will launch on December 30th of this year with over 460 hours of premium original content premiering. It'll be premiering every night of the week and with even more exclusive content than ever before. Our homegrown Canadian shows have always been the biggest driver of success across our lifestyle networks, and we've commissioned over 110 hours of original Canadian programming to premiere in 2526. Our beloved Canadian stars will remain an integral part of these new networks. The launch of Flavor Network will feature the premiere of Pamela's Cooking with Love with Pamela Anderson, plus new seasons of Great Chocolate Showdown, Carnival Eats, and mega-hit Top Chef Canada. Home Network will see new seasons of Renovation Resort, Scott's Vacation House Rules, and Pamela's Garden of Eden, plus new adventure Building Bomber from Brian and Sarah Bomber, and new shows specifically geared to millennial and Gen Z audiences, Rentovation, and Beer Budget Reno. Moving to slide six. The success we are seeing with Slice is proof of Chorus' expertise in lifestyle and women's television. Unbowed by the discontinuation of certain programming rights, our team embarked on a bold reimagining for Slice, pushing deeper into unscripted programming while remaining true to the DNA of our irreverent all-Canadian lifestyle and women's targeted brand. So far, the channel is exceeding all of our expectations, delivering a 5% increase in audience and joining the top 20 specialty networks in Canada. The Daily Show has been a great addition to the network and is Slice's top-rated new program, even outranking some of the other late-night talk shows on conventional television. And just as with our new lifestyle brands, more of the programs on the new Slice schedule are exclusive to Chorus in Canada. This means they will help to not just drive audiences on linear television, but the acquisition of more subscribers to our Stack TV streaming service. Over to slide 7. We know what matters to our advertisers, being alongside great exclusive content that drives audiences and engaging with a partner who takes a client-centric approach and provides audience insights they won't get anywhere else. With fall programming back on the schedule coming a bit later this year and many of our season premieres not until mid-October, we have not yet seen the advertising revenues return at the level we would like. We are certainly seeing an uptick on global and are monitoring the environment closely and adjusting our strategy accordingly. Similar to trends in the U.S., the growth of ad-supported digital video platforms has led to an oversupply of inventory, exerting pressure on digital advertising demand as advertisers now have more ways to reach consumers in the streaming and digital space. This creates challenges for our sales teams, yes, but also opportunities. For the fall season to date, monthly hours tuned to our ad-supported digital offerings is up 24%. We also saw modest growth in Stack TV subscribers over the summer, reaching a new record high for Stack TV subscribers early this fall. Rest assured, we have a plan for fighting back against the continued encroachment of U.S. tech giants into the Canadian advertising market. It is to focus on what matters, the value of our content, of our communities, and of our people. We continue to work with many content and distribution partners, including across the border, and no one in the market has the proven track record that Chorus does for connecting and integrating brands with quality content. And we continue to hear from advertisers. This is why they keep coming back to Chorus. Although we are not yet seeing the recovery we want in the ad market, we are very encouraged by the return in audiences and our share growth on global at the same time as we have effectively been reducing costs across the organization. This has positioned us well with a more efficient underlying structure and more available inventory, both on linear and digital, while we carefully monitor preliminary trends signaling return of advertiser confidence and demand. We are also encouraged to have heard the chair of the CRTC confirm this week plans to move forward with an important review of the structural relationships between broadcasters, distributors, and streamers. This is long overdue. There is already ample evidence of the power imbalance between broadcasters like Chorus and the foreign platforms that dominate streaming, as well as certain distributors who have increasingly favored their own services to the detriment of Canadian consumers. We look forward to a speedy conclusion from the CRTC and clear support for the ongoing role of independent Canadian broadcasters and programming in the larger media ecosystem. We would also note that on July 23rd, the CRTC launched a consultation on the future structure of the independent local news fund, including eligibility and allocation criteria. We hope to hear very soon on both our eligibility and the amount of this funding that would be due to Chorus, as we remain an outlier eligible for, but without access to, local expression funding. Now to turn things back to John.