Next 15 Group Plc · LSE:NFG
Next 15 — H1 FY2020 Earnings Presentation
24 slides from Next 15's earnings presentation, Oct 1, 2019
Slide 1: Interim Results – October 1st, 2019
INTERIM RESULTS – October 1st, 2019
Slide 2: Financial Summary
FINANCIAL SUMMARY • Net revenue up 11% to £118.7m (2018: £106.8m) • Adjusted* operating profit up 14% to £17.5m (2018: £15.4m) • Adjusted operating profit margin up to 14.7% from 14.4% • Adjusted pre tax profits up 14% to £17.2m (2018: £15.1m) • Diluted earnings per share increased by 7% to 15.2p (2
Slide 3: Corporate Progress
CORPORATE PROGRESS • Data and analytics net revenues grew organically by 21.4% to £20.9m with a margin up to 27.5% thanks to operational improvements • UK net revenues grew organically by 4.6% to £48m with a continued strong margin of 19.4% • Savanta relaunched as a single brand in February • Key cl
Slide 4: Archetype and Beyond Progress
ARCHETYPE AND BEYOND PROGRESS Excluding Archetype and Beyond, Group organic revenue growth of 11.6% BEYOND • Loss of significant isolated clients, Samsung and Just Eat • Adjusted cost base and refocus on winning new clients • Recent wins include SNAP, RCA and Purplebricks ARCHETYPE • Ongoing costs r
Slide 5: Recent Acquisitions
RECENT ACQUISITIONS Overall revenue growth of the new acquisitions is 25% ACTIVATE • A US based B2B demand generation specialist focused on technology clients acquired in November 2018 • Revenue growth of 38% in the first half year PLANNING-INC • A UK based predictive analytics and data marketing bu
Slide 6: Health Unlimited Acquisition
HEALTH UNLIMITED ACQUISITION • Announced today the acquisition of Health Unlimited LLC • New York based global health consultancy and communications agency • Will trade as M Booth Health following acquisition to broaden customer range into healthcare • Clients include Gilead Sciences Inc., Global Bl
Slide 7: Our Agencies
OUR AGENCIES Brand Marketing Data and Analytics Creative Technology Net revenue: £63.9m Net revenue: £20.9m Net revenue: £34.0m Organic growth: (4.9)% Organic growth: 21.4% Organic growth: (1.1)% Operating profit: £13.1m Operating profit: £5.7m Operating profit: £3.3m Excluding Archetype Excluding B
Slide 8: Our Business
OUR BUSINESS Brand Strategy Market Research App Development Content Marketing Brand Tracking Software Platforms Public Relations Data Science Community Management Financial Comms Campaign Analysis Digital Strategy Corporate Comms Behavioral Analytics Brand Marketing Data and Analytics Creative Techn
Slide 9: Our Five Year Ambitions
OUR FIVE YEAR AMBITIONS • In the last five years we have grown the net revenues from £109.2m to £224.1m. We anticipate similar growth over the next five years • Make all our companies best in class • Create new $100m innovation business Innovation Brand Marketing Data and Analytics Creative Technolo
Slide 10: Financials
FINANCIALS www.next15.com
Slide 11: Income Statement – Adj. Results
INCOME STATEMENT – ADJ. RESULTS £M H1 2020 H1 2019 GROWTH % Net revenue 118.7 106.8 11% Operating profit 17.5 15.4 14% Operating margin 14.7% 14.4% PBT 17.2 15.1 14% Tax (3.4) (3.0) Minorities (0.3) (0.3) Retained profit 13.5 11.8 14% Diluted EPS (p) 15.2 14.2 7% Dividend 2.5 2.16 16% 11 www.next15.
Slide 12: Adjustments Breakdown
ADJUSTMENTS BREAKDOWN £M H1 2020 H1 2019 Adjusted pre tax profits 17.2 15.1 Restructuring (2.1) (0.2) Deal costs (0.3) (0.3) Share based payments - (0.4) Employment related acquisition payments (2.8) (0.2) Unwinding of discount and change in estimate (3.7) 0.1 of earnout liabilities Amortisation of
Slide 13: Operational Breakdown
OPERATIONAL BREAKDOWN Operation Net Organic Operating Margin Margin Comments revenue growth/ Profit H1 2020 H1 2019 H1 2020 (decline) £M £M BRAND 63.9 (4.9)% 13.1 20.5% 19.6% Excluding Archetype MARKETING organic growth is 4.8% DATA AND 20.9 21.4% 5.7 27.5% 27.5% ANALYTICS CREATIVE 33.9 (1.1)% 3.3 9
Slide 14: Cash Flow Statement
CASH FLOW STATEMENT £M H1 2020 H1 2019 Inflow from op activities 20.7 17.9 Working capital 1.6 (7.0) Net inflow from operations 22.3 10.9 Tax (3.0) (3.1) Net capex (2.7) (4.6) Acquisitions (4.2) (15.5) Net interest and dividends paid (5.6) (1.3) Repayment of lease liabilities (5.3) - Exchange gain o
Slide 15: Cash Commitments
CASH COMMITMENTS 31 July 2019 £M FY 2020 3.0 FY 2021 11.2 FY 2022 5.5 FY 2023 5.6 FY 2024 4.3 FY 2025 4.3 Total 33.9 15 www.next15.com
Slide 16: Outlook
OUTLOOK • The Group continues to focus on building its data, analytics and technology capabilities and ensuring these are embedded throughout the Group • Current trading of data and analytics segment is encouraging and following the acquisition of Health Unlimited, the Group remains confident of mee
Slide 17: Conclusion
CONCLUSION Summary of the results: • Net revenue up 11% to £118.7m • Adjusted operating profit up 14% at £17.5m • Adjusted pre tax profits up 14% to £17.2m • Dividend up 16% to 2.5p • Adjusted EPS increase of 7% to 15.2p 17 www.next15.com
Slide 18: Appendices
APPENDICES www.next15.com
Slide 19: Management Team
MANAGEMENT TEAM Richard Eyre CBE Tim Dyson Peter Harris (Chairman) (CEO) (CFO) Richard was appointed in 2011 and has Tim joined the Group in 1984 and Peter joined the Group as its CFO in 43 years’ experience across the media became CEO in 1992. As an early pioneer 2013. Peter’s financial experience
Slide 20: Top 20 Customers
TOP 20 CUSTOMERS Google iad === = wy) Lenovo. IEP TOYOTA vmware solarwinds ” Ee Ibias ME ARMAN. salesforce ue WZ SuNTRUST INTUIT amazoncom ~~ RCI Ett) MACALLAN NEXT15
Slide 21: H1 2020 Revenue Bridge
H1 2020 REVENUE BRIDGE 125 118.7 +3.4 120 3.3% +11.2% +10.8 +10.2% 115 110 (1.0) (0.9%) 106.8 (1.3) (1.3%) 105 100 Year to 31 July 2018 Discontinued Organic growth Acquisitions Foreign exchange Year to 31 July 2019 21 www.next15.com
Slide 22: Client Analysis H1 FY20
CLIENT ANALYSIS H1 FY20 £60,000 58 31% CLIENTS GENERATING OVER SHARE OF GROUP NET REVENUE PER EMPLOYEE $0.5M IN NET REVENUES H1 2020 REVENUES FROM TOP 20 CLIENTS 20% INCREASE IN 12 90% NET REVENUES TOP 20 CLIENTS IN H1 2020 CLIENT NUMBERS GENERATED IN US IN TOP 20 CLIENTS H1 2019 (INCL ACQ) AND UK 2
Slide 23: Regional Breakdown
REGIONAL BREAKDOWN Regions Net Organic Operating Margin Margin Comments revenue growth/ Profit H1 2020 H1 2019 H1 2020 (decline) £M £M US 59.4 (6.0%) 11.2 18.8% 16.9% Excluding Archetype and Beyond organic growth is 11% UK 48.0 4.6% 9.3 19.4% 23.7% Excluding Archetype and Beyond organic growth is 12
Slide 24: Balance Sheet Summary
BALANCE SHEET SUMMARY £M 31 July 2019 31 July 2018 Intangible assets 132.3 102.2 Non-current assets 72.1 28.0 Current assets 99.1 87.3 Non-current liabilities (92.6) (62.7) Current liabilities (100.0) (69.3) Net assets 110.9 85.5 Share capital 2.1 2.0 Reserves 109.5 85.1 Minorities (0.7) (1.6) Total