Next 15 Group Plc · LSE:NFG
Next 15 — H1 2023 Earnings Presentation
26 slides from Next 15's earnings presentation, Sep 26, 2022
Slide 1: Interim Results: September 2022
NEXT15 INTERIM RESULTS : SEPTEMBER 2022 NEXT15 NEXT15
Slide 2: Agenda
AGENDA Results summary and introduction Business progress Insights & observations Long-term strategy update B Corp update Numbers in detail NEXT15 2
Slide 3: Vision & Mission
VISION & MISSION NEXT15 NEXT15 3
Slide 4: Our Vision
OUR VISION TRADITIONAL GROWTH MARCOM CONSULTING CONSULTING CONSULTING NEXT15
Slide 5: What is Next15?
WHAT IS NEXT15? Next 15 operates across four divisions and has offices across the world. Our divisions are: 1. We deliver business insights through data analytics and online research 2. We optimize digital brand assets to drive long term customer engagement 3. We optimize customer delivery (aka sales)
Slide 6: Results, Insights & Progress
RESULTS, INSIGHTS & PROGRESS NEXT15 NEXT15
Slide 7: Results Highlights
RESULTS HIGHLIGHTS Net revenue up 65% Adjusted operating Margin performance Adjusted diluted EPS (31.0% organically) to profit up 75% to of 22.4% (2021: 21.1%) up 68% to 44.1p (2021: £274m (2021: £166m) £61.3m (2021: £35.0m) 26.3p) Strong performances across Net debt as at 31 July 2022 Interim divide
Slide 8: Why Are We Delivering This Level of Growth?
WHY ARE WE DELIVERING THIS LEVEL OF GROWTH? PEOPLE CUSTOMERS PRODUCTS INNOVATION INVESTMENT Loyal, talented, highly We don’t work with just Technology and Eating our own dog Well managed skilled specialists with anyone. Our customers data-driven solutions food acquisitions that have a shared set of
Slide 9: How Resilient Is Our Model?
HOW RESILIENT IS OUR MODEL? 13 54 57 60% Counter cyclical model of our top 20 customers bill of the top 100 of our customer Affordable luxury; customers have more than $1m most loved brands revenue is billed in government been with us for are customers US$ longer than 3 years NEXT15
Slide 10: Economic Impact = Opportunity
ECONOMIC IMPACT = OPPORTUNITY CLIENT ACTION IMPACT/OPPORTUNITY Customers shift funds to drive sales Increased opportunities for our customer delivery businesses as seen during Covid Customer procurement departments seek better Accelerate our shift away from hourly pricing to pricing outcome pricing
Slide 11: Segmental Performance
SEGMENTAL PERFORMANCE Net Revenue £24.7m £133.3m £48.8m £67.2m % of Total Net Revenue 9.0% + 48.7% + 17.8% + 24.5% INSIGHT ENGAGE DELIVERY TRANSFORM Margin : 21.3% Margin : 20.1% Margin : 32.3 % Margin : 39.4% Organic growth : 15.6% Organic growth : 12.6% Organic growth : 16.9% Organic growth : 157.
Slide 12: Business Progress
BUSINESS PROGRESS CLIENT WINS: ACQUISITIONS: BOARD UPDATE: Morrisons Engine UK: MHP Mischief, Additional US-based NED Creative & Transformation VMware Bolt on acquisitions for Activate, Agent3 and Verizon Savanta 12 NEXT15
Slide 13: Strategy Progress Update
STRATEGY PROGRESS UPDATE Operationalized our approach to acquisitions enabling us to manage a mix of bolt on and stand-alone opportunities. We are targeting acquisitions/investments to drive scale especially in underweight/high growth areas of the business such as: ● APAC ● DX consulting ● EMEA ● eC
Slide 14: B Corp Update
B CORP UPDATE Certification ongoing with completion likely by December Used Elvis to test the process - they are now a B Corp Strong business benefits to us in terms of client alignment, staff attraction and acquisitions Low cash costs but has required us to be more coordinated and thoughtful Certifica
Slide 15: Numbers in Detail
NUMBERS IN DETAIL PRELIM RESULTS : September 2022 NEXT15 NEXT15 NEXT 15 15
Slide 16: Adjusted P&L
ADJUSTED P&L £M H1 2023 H1 2022 GROWTH % Data here Net revenue 274.0 165.9 65% Organic revenue growth 31.0% 23.1% Operating profit 61.3 35.0 75% Operating margin 22.4% 21.1% Profit before tax 60.7 35.0 73% Tax (14.1) (7.7) Minorities (0.6) (2.0) Profit after tax 46.0 25.3 82% Diluted EPS (p) 44.1 26.3
Slide 17: Revenue Bridge
REVENUE BRIDGE 7.5% 69.7 26.6% 39.8 31.0% Revenues £m 17 NEXT15
Slide 18: Segmental
SEGMENTAL Net revenue Operating Organic Margin Margin Operation H1 2023 Profit growth H1 2023 H1 2022 £M £M Customer Insight 24.7 15.6% 5.3 21.3% 17.7% Customer Engage 133.3 12.6% 26.7 20.1% 22.3% Customer Delivery 48.8 16.9% 15.8 32.3% 36.3% Business Transformation 67.2 157.0% 26.5 39.4% 23.4% Head
Slide 19: Cash Flow
CASH FLOW £M H1 2023 H1 2022 Inflow from op activities 66.2 41.6 Working capital (42.2) (9.2) Net inflow from operations 24.0 32.4 Tax (14.0) (5.1) Net capex (3.5) (2.9) Acquisitions (102.8) (24.8) Net interest and dividends paid (2.8) (1.4) Net proceeds from share placing 48.6 - Repayment of lease li
Slide 20: Adjustments
ADJUSTMENTS £M H1 2023 H1 2022 Adjusted profit before tax 60.7 35.0 Engine restructuring (3.1) - Property (impairment)/write back (3.9) 1.0 Deal costs (2.7) (0.2) Charge for one-off employee incentive schemes (0.4) (5.8) Acquisition accounting related costs (59.1)* (25.5) Furlough - (1.4) Statutory (
Slide 21: Forecast Commitments
FORECAST COMMITMENTS 31 July 2022 31 Jan 2022 £M £M FY 2023 8.6 36.0 FY 2024 47.2 30.8 FY 2025 67.3 45.8 FY 2026 49.8 39.7 FY 2027 40.7 31.5 FY 2028 40.0 31.3 Total 253.6 215.1 21 NEXT15
Slide 22: Outlook
OUTLOOK BUSINESS: Organic growth will remain strong Good acquisition pipeline M&C Saatchi process to be resolved in fourth quarter of financial year OPERATIONAL: Engine integration successful Imminent closure of Bermondsey Street office hub Staff cost increases are being largely matched by fee increase
Slide 23: Appendices
APPENDICES NEXT15 NEXT15 NEXT 15 23
Slide 24: Next15 Board
NEXT15 Board Penny Robyn Perriss Helen Hunter Dianna Jones Paul Butler Ladkin-Brand (Audit) (Rem) (ESG) (ESG) (Chair) Governance Data Insight B Corp Business Pricing Transformation Tim Dyson Peter Harris Jonathan Peachey (CEO) (CFO) (COO) NEXT15
Slide 25: Regional
REGIONAL Operation Net revenue Organic Operating Margin Margin H1 2023 growth Profit H1 2023 H1 2022 £M £M US 144.8 43.0% 50.0 34.5% 28.2% UK 114.9 17.0% 21.9 19.0% 22.1% APAC 8.7 13.2% 0.8 9.5% 12.5% EMEA 5.6 21.8% 1.6 28.0% 22.3% HEAD OFFICE - - (13.0) - - Total 274.0 31.0% 61.3 22.4% 21.1% 25 NEXT
Slide 26: Balance Sheet Summary
BALANCE SHEET SUMMARY £M 31 July 2022 31 July 2021 Intangible assets 285.7 183.8 Non-current assets 111.6 49.8 Current assets 214.5 143.7 Non-current liabilities (259.8) (70.9) Current liabilities (248.4) (184.7) Net assets 103.6 121.7 Share capital 2.4 2.3 Reserves 100.8 118.2 Minorities 0.4 1.2 To