Slide 1: Next 15: technology driven marketing
Next 15 : technology driven marketing Final Results – April 12th, 2016 Next Fifteen Prelims 2016 – 12.4.16
Slide 2: Destination
destination In a world where technology is driving marketing, Next 15 aims, in the next five years, to establish three lines of businesses: 2021 2016 2011 2% 20% 3% 1% 17% 40% 96% 81% 40% Content Tech Data Slide 2 Next Fifteen Prelims 2016 – 12.4.16
Slide 3: Financial summary
financial summary • Revenue up 18.9% to £129.8m (2015: £109.2m) • Organic growth up 7.8% (H2 organic growth of 10.9%) • Headline EBITDA up 31.5% to £19.2m (2015: £14.6m) • Headline Op profit up 29.9% to £16.5m (2015: £12.7m) • Headline Op profit margin up to 12.7% from 11.7% • Headline Pre tax profi
Slide 4: Corporate progress
corporate progress • US continues to drive growth with organic growth of 14.1% and total growth of 30% to £83.5m • UK flat on organic basis, up 17% due to acquired businesses • APAC delivered organic growth of 3.8% in H2 and saw margins improve to 11.5% (8% in 2015) • UK portfolio activity in last 6
Slide 5: Growth drivers
growth drivers breakdown of 18.9% revenue growth 2016 Acquisitions contributed 11.1% to total revenue growth in 2016 Organic • Working with high growth revenue growth clients contributed 7.8% to total • Expanded and modernised growth service offering Net client and • Focus on key geographies revenue
Slide 6: Acquisition activity
acquisition activity • Specialist digital agency • Specialists digital content • Specialist B2B digital agency with focus on fashion agency focused on with software as a service and lifestyle semiconductor and offering which manages • Growth opportunities are electronics industry reseller/ partner e
Slide 7: Financial review
financial review financial review Slide 7 Next Fifteen Prelims 2016 – 12.4.16
Slide 8: Income statement - headline results
income statement - headline results £M 2016 2015 GROWTH % Revenue 129.8 109.2 18.9% EBITDA 19.2 14.6 31.5% Operating profit 16.5 12.7 29.9% Operating margin 12.7% 11.7% PBT 16.1 12.5 28.8% Tax (3.5) (3.0) Minorities (0.5) (0.6) Retained Profit 12.1 8.9 36.0% Diluted EPS 16.9 13.2 28.0% Pro forma div
Slide 9: 2016 adjustments breakdown
2016 adjustments breakdown £M 2016 2015 Adjusted pre tax profits 16.1 12.5 Business impairments - (7.0) Restructuring (1.5) (1.6) Office moves (1.4) (1.0) Deal costs (0.2) - Share based payments (1.5) (1.9) Unwinding of discount and change in estimate of (2.4) (2.2) earn-out liabilities Amortisation
Slide 10: Regional breakdown
regional breakdown Regions Revenue Organic Operating Margin Margin Comments 2016 growth Profit 2016 2015 £M £M US 83.5 14% 17.5 21.0% 22.0% Exceptional performance from Beyond & M Booth UK 27.9 - 3.8 13.6% 10.6% Growth in revenue and margin driven by Morar & Encore APAC 12.0 (2)% 1.4 11.5% 8.0% Econ
Slide 11: Cash flow statement
cash flow statement £M 2016 2015 Inflow from op activities 16.1 12.4 Working capital 0.2 5.6 Net inflow from operations 16.3 18.0 Tax (3.0) (2.3) Net capex (6.8) (3.9) Acquisitions (13.4) (11.0) Share placings 12.1 (0.1) Outflow from interest and dividend (3.4) (4.2) Exchange gain on cash held 0.2 0
Slide 12: Cash commitments
cash commitments Period 31 Jan 16 Morar Publitek & 12 April 16 £M £M Twogether £M £M FY 2017 3.4 (1.6) 1.8 FY 2018 3.5 3.5 FY 2019 3.3 3.3 FY 2020 - 3.2 3.2 FY 2021 2.3 2.3 FY 2022 - 4.3 4.3 FY 2023 0.9 0.9 Total 13.4 (1.6) 7.5 19.3 Slide 12 Next Fifteen Prelims 2016 – 12.4.16
Slide 13: Financial impact of recent acquisitions
financial impact of recent acquisitions Acquisitions Initial Annualised Annualised Consideration Revenues PBIT £m £m £m ODD 3.0 3.4 0.8 Factoring anticipated earnout considerations, the average multiple of historic PBIT paid Publitek 6.2 6.0 2.0 for these 3 acquisitions is 6x Twogether 6.6 5.0 1.2 T
Slide 14: Financial review conclusion
financial review conclusion Slide 14 Next Fifteen Prelims 2016 – 12.4.16
Slide 15: Growth going forward
growth going forward 3 key drivers for above market organic revenue growth 7.8 % • Yield as well as volume – continuing to grow by doing more for our existing clients Organic revenue growth 2016 • Smarter not bigger – especially in digital, familiarity with new advertising ecosystems (eg Google, FB)
Slide 16: Summary: current trading and strategies
summary current trading strategies • Good start to new financial year • Building technology and data helped by recent investments science into every business • Activity levels trending in line with • Investment activity going H2 2016 forward to favour technology and data science • Selective investme
Slide 17: Appendices
appendices Slide 17 Next Fifteen Prelims 2016 – 12.4.16
Slide 18: Management team
management team Richard Eyre CBE Tim Dyson Peter Harris (Chairman) (CEO) (CFO) Richard joined in 2011, he is also Tim joined the group in 1984 and Peter was appointed CFO in Chairman of the Internet became the global CEO in 1992. An 2013. He is also a NED at Advertising Bureau. Prior to this he earl
Slide 19: Our growth 2011 - 2016
our growth 2011 - 2016 GOOGLE/ 64 103 REVENUE GROWTH % INCREASE IN EBITDA % ALPHABET LARGEST CLIENT 2016, NOT A MATERIAL CLIENT IN 2011 93 DILUTED EPS GROWTH % 2011/16 2011/2016 2011/16 11 62 % % 122 11.6 % % MINIMUM ANNUAL ORGANIC INCREASE IN EBITDA INCREASE IN DIViDENDS ADJ ROCE POST GROWTH IN US
Slide 20: Our portfolio
our portfolio Technology Data Content 17 brands Agent 3 Morar Bite Beyond Blueshirt bDA M Booth Connections Media Lexis Encore ODD Publitek OutCast Story Text 100 Twogether Vrge Slide 20 Next Fifteen Prelims 2016 – 12.4.16
Slide 21: Our top customers
our top 20 customers Data as at Jan 2016 Slide 21 Next Fifteen Prelims 2016 – 12.4.16
Slide 22: Client analysis 2016
client analysis 2016 11 % 33 43 % 8 % INCREASE IN AVG CLIENT SHARE OF GROUP INCREASE IN AVG STAFF YIELD CLIENTS GENERATING OVER REVENUES FROM $1M PLUS NUMBERS $1M IN REVENUES 2016 (was CLIENTS 28) 7 % INCREASE IN CLIENT 8 TOP 10 CLIENTS IN 2016 IN TOP 82 % INCREASE REVENUES FROM 67 % INTERNET COMPAN
Slide 23: Our comparative advantages
our comparative advantages • California presence gives us preferred insight into digital innovation CALIFORNIA PRESENCE • tech client base has brought key relationships with digital thought- leaders • our entrepreneurial culture has helped to incubate new brands successfully CORPORATE TECH CLIENT Ou
Slide 24: Organic growth track record
organic growth track record Growth 6m to Jul 6m to Jan 6m to Jul 6m to Jan 6m to Jul 6m to Jan 2013 2014 2014 2015 2015 2016 Next 15 organic 2.3% 4.2% 6.7% 5.8% 4.1% 10.9% revenue growth US region organic 13.3% 13.1% 11.1% 11.4% 10.3% 17.7% revenue growth Slide 24 Next Fifteen Prelims 2016 – 12.4.16
Slide 25: Net debt position
net debt position £M FY 2016 FY 2015 Total loans and borrowings 20.6 17.8 Obligations under finance leases 0.1 0.1 Less: Cash and cash equivalents (14.1) (9.3) Net Debt 6.6 8.6 Share purchase obligation 3.7 5.8 Deferred consideration - 0.1 Contingent consideration 8.4 7.2 18.7 21.7 Slide 25 Next Fif
Slide 26: Balance sheet summary
balance sheet summary £M FY 2016 FY 2015 Intangible assets 53.6 44.9 Non-current assets 17.8 12.6 Current assets 56.2 41.3 Non-current liabilities (34.8) (29.1) Current liabilities (40.0) (32.5) Net assets 52.8 37.2 Share capital 1.8 1.5 Reserves 50.3 36.5 Minorities 0.7 (0.8) Total equity 52.8 37.2
Slide 27: Notes
Notes Organic revenue growth excludes the impact of currency changes and acquisitions, Headline results represent the audited results for the 12 month period to 31 January 2016, compared with the unaudited results to the 12 month to 31 January 2015, adjusted to exclude amortisation, impairments, res