Sky completes acquisition of Discovery NZ Limited

Sky New Zealand
PO Box 9059
Newmarket
Auckland 1149
New Zealand

10 Panorama Road
Mt Wellington
Auckland 1060
New Zealand

T. +64 9 579 9999

s k y.c o. n z







1 August 2025
Sky completes acquisition of Discovery NZ Limited
Sky is pleased to confirm the completion of its acquisition of 100% of the shares in Discovery NZ
Limited (Discovery NZ) for $1 on a cash-free, debt-free basis.
Sky Chief Executive, Sophie Moloney commented: “The acquisition of Discovery NZ positions us to
scale faster, accelerates our growth, and further diversifies our revenue streams, particularly in
advertising and digital. We have acquired a business with complementary operations that is a strong
strategic fit for Sky, in a manner which is value accretive for our shareholders.”
Sky notes the recent filing of Discovery NZ’s financial statements for the 12 months to 31 December
2024 in which Discovery NZ reported an after-tax loss of $77.6 million. These 2024 accounts reflect a
period in which Discovery NZ completed a significant restructure of its business, including the closure
of Newshub, that has substantially reduced the ongoing cost base .
When assessing Discovery NZ’s 2024 accounts, it is important to consider the underlying
performance of the continuing operations. For this reason, Sky has provided a presentation which
reconciles Sky’s due diligence analysis of Discovery NZ’s reported result for 2024 with the expected
financial performance of the continuing operations immediately following the acquisition by Sky.
This reconciliation narrows the reported EBITDA loss to a proforma $9.0 million EBITDA loss
1
. In
addition , the presentation shows a pathway to delivering at least $10 million of incremental EBITDA
by FY28 as a result of assumed synergies across both Sky and Discovery NZ of at least $19 million p.a.
Importantly, content rights acquired at completion clear of payables reduces net working capital
requirements in the first 12-18 months, giving Sky a cash flow benefit and runway to deliver on these
synergies over the next 2-3 years .
Sophie Moloney added: “Sky is uniquely placed to capitalise on this opportunity and to give New
Zealanders even more content they love. The transaction structure enables a pathway to deliver
positive underlying free cash flow from year one. While there may be short term (FY26) bottom line
noise resulting from non-cash accounting impacts, longer term, significant cost synergies are
available across the highly complementary operations of both businesses - particularly in
programming and broadcast infrastructure. As a result, we expect to deliver sustainable incremental
EBITDA of at least $10 million by FY28.”
ENDS

1
Subject to fair value accounting of the acquisition (e.g. items such as content and the platform), to be completed
within 12 months).

Authorised by: Kirstin Jones, Company Secretary
Investor queries to: Media queries to:
Amanda West Maree Wilson
Head of Investor Relations & Corporate Sustainability Corporate Communications
Amanda.West@sky.co.nz Maree.Wilson@sky.co.nz

---

© SKY 2021
Reconciliation of accounts
Following the acquisition of
Discovery NZ Limited by Sky
1 August 2025

Page 2
Disclaimer
This presentation has been prepared by Sky Network Television Limited and its group of companies (“the Company”) for informational purposes. This disclaimer applies to this
document and the verbal or written comments of any person presenting it.
Information in this presentation has been prepared by the Company with due care and attention. However, neither the Company nor any of its directors, employees,
shareholders nor any other person give any warranties or representation (express or implied) as the accuracy or completeness of this information. To the maximum extent
permitted by law, none of the Company, its directors, employees, shareholders or any other person shall have any liability whatsoever to any person for any loss (including,
without limitation, arising from any fault or negligence) arising from this presentation or any information supplied in connection with it.
This presentation contains projections or forward-looking statements regarding a variety of items. Such projections or forward-looking statements are based on current
expectations, estimates and assumptions and are subject to a number of risks, and uncertainties, including material adverse events, significant one-off expenses and other
unforeseeable circumstances. There is no assurance that results contemplated in any of these projections and forward-looking statements will be realised, nor is there any
assurance that the expectations, estimates and assumptions underpinning those projections or forward-looking statements are reasonable. Actual results may differ materially
from those projected in this presentation. No person is under any obligation to update this presentation at any time after its release or to provide you with further information
about the Company.
The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. The presentation does
not constitute an offer to sell, or a solicitation of an offer to buy, any security and may not be relied upon in connection with the purchase or sale of any security. Nothing in this
presentation constitutes legal, financial, tax or other advice.
Page 2

© SKY 2021
Page 3
Sky has provided the following information to assist investors in
understanding the underlying financial performance of Discovery NZ (DNZ)
Reconciliations
1
:Page:
•DNZ 2024 reported financial result at a reported EBITDA level
3
•DNZ 2024 reported EBITDA level result to proforma EBITDA for
continuing operations
4
•DNZ proforma EBITDA for continuing operations to Sky’s assessment of
incremental Sky Group EBITDA by FY28
5
•FY26 proforma underlying free cash flow impact from the acquisition of
DNZ
6
1. Sky has prepared the reconciliations based on its review of DNZ’s FY24 financial statements and FY25
budget, and modelled potential synergies, as part of its due diligence prior to completing the transaction.

© SKY 2021
Page 4
Discovery NZ’s 2024 result at a reported EBITDA level
$36.6m of reported costs in 2024 were either one-off or non-cash in nature
•One-off termination benefits regarding
the closure of Newshub
•Share-based compensation is a non-
cash accounting entry related to the
WBD Group (and will not continue)
•Debt-free transaction and exit of
property leases removes finance costs
•Depreciation, amortisation, and
impairment charges are non-cash in
nature and reported below EBITDA
•Loss on disposal of assets relates to the
write-off of certain Newshub assets and
the surrender of leases
•Equity investment impairment reflects
the dissolution of a joint venture for
Bravo TV with NBC Universal in
December 2024
(77.5)
14.9
9.1
5.7
(40.9)
1.3
1.1
4.6
Dec-24
Net loss
before tax
Termination
benefits
Share-based
compensation
Finance
cost
Depreciation,
amortisation
and impairment
of assets
Loss on
disposal
of assets
Loss and
Impairment of
Equity
accounted
investments
Dec-24
EBITDA-level
operations loss
2024 STATUTORY LOSS TO 2024 EBITDA
1
($m)
1. Source: Discovery NZ Ltd financial statements for the year ended 31 December 2024 and Sky
analysis following due diligence.

© SKY 2021
Page 5
Continuing operations EBITDA in 2025
Further improvement observed in 2025 reflecting ongoing operations post
Newshub closure, exit of property leases, and impact of revised content
agreements as part of the transaction with Sky
•2024 employee costs are normalised to
reflect the current run-rate post
Newshub closure
•2025 Budget normalisation reflects the
downsizing of DNZ’s operations post
Newshub closure
•Exit of property leases reduces costs vs
2024, primarily due to surrendering the
Flower Street lease in June 2025
•Agreed content and revenue share
arrangements reduce ongoing
operating costs
(40.9)
17.9
3.1
(9.0)
5.4
5.5
Dec-24
EBITDA-level
operations loss
Employee cost
normalisation
Budget
normalisation
Exit of
properties
normalisation
Transaction
structuring
normalisation
Proforma
EBITDA-level
continuing
operations loss
FY24 EBITDA TO EBITDA OF CONTINUING OPERATIONS
IMMEDIATELY POST COMPLETION
1
($m)
1. Source: Discovery NZ Ltd financial statements for the year ended 31 December 2024 and Sky
analysis following due diligence. Note, purchase price allocation and fair valuation of
identifiable net assets (e.g. content and platform) is yet to be completed.

© SKY 2021
Page 6
(9.0)
19.0
10.0
Proforma
EBITDA-level
continuing
operations loss
Group
Synergies
Incremental
Group
EBITDA
ASSUMED ONGOING INCREMENTAL GROUP EBITDA POST SYNERGIES
1
($m)
At least $10m of potential incremental EBITDA by FY28
Synergies across content, broadcast infrastructure and a number of
overheads – to come from the combined Sky + DNZ cost base
•Incremental Group EBITDA reflects
synergies across the combined cost
base
•Cost synergies will be extracted
across combined content, broadcast
infrastructure, and overhead costs,
with most to be delivered in year 2
and 3
•Revenue synergies from wider
audience reach are unquantified
(as modelled)
(at least)
1. Source: Discovery NZ Ltd financial statements for the year ended 31 December 2024 and
Sky analysis following due diligence. Note, purchase price allocation and fair valuation of
identifiable net assets (e.g. content and platform) is yet to be completed.

© SKY 2021
Page 7
(9.0)
12.2
4.9
(2.8)
5.3
Proforma
EBITDA-level
continuing
operations loss
FY26
Group
Synergies
Net working
capital
requirements
Capex
Proforma
FY26
Free cashflow
Impact
FY26 PROFORMA UNDERLYING FREE CASH
FLOW IMPACT
1
($m)
30 cent dividend target for FY26 not impacted
Debt-free balance sheet and content rights clear of payables at completion
provides free-cash flow benefit over the first 12-18 months
•Planned synergies in FY26 are highly targeted as we prioritise integration
and technology separation
•Content rights on acquisition clear of payables reduces working capital
requirements in the first 12-18 months
•Ongoing capex requirements, largely to maintain the ThreeNow platform,
are below Sky’s target level of 7% to 9% of revenue
•No drag on underlying free cash flow from the acquisition, meaning 30 cps
dividend target for FY26 not impacted
~3 - 5
~10 - 12
~(3) - (4)
~1 - 4
CompletionFY26FY27FY28
NET WORKING CAPITAL CASH FLOW BENEFIT IN
FIRST 12-18 MONTHS
1
Content rights clear of
payables means a
portion of amortisation
expense has no cash
outlay over first 12-18
months
Synergies are
unlocked over
time
1. Source: Discovery NZ Ltd financial statements for the year ended 31 December 2024 and Sky
analysis following due diligence. Note, purchase price allocation and fair valuation of
identifiable net assets (e.g. content and platform) is yet to be completed.