Next 15 Group Plc · LSE:NFG
Next 15 — H1 FY2019 Earnings Presentation
21 slides from Next 15's earnings presentation, Sep 25, 2018
Slide 1: Interim Results – September 25th, 2018
INTERIM RESULTS – SEPTEMBER 25TH, 2018
Slide 2: Financial Summary
FINANCIAL SUMMARY • Net revenue up 14% to £106.8m (2017: £93.5m), up 19% on a constant currency basis • Organic* revenue growth of 8.7% (UK organic growth of 14.9%) • Adjusted** EBITDA up 22% to £17.7m (2017: £14.5m) • Adjusted operating profit up 25% to £15.4m (2017: £12.3m) • Adjusted operating pr
Slide 3: Corporate Progress
CORPORATE PROGRESS • UK investments include the acquisitions of Brandwidth and Technical • UK revenues grew 56.4% to £40.0m with margin up to 23.7% thanks to acquisitions and operational improvements • EMEA revenues grew 11.4% to £4.2m with margins improving to 14.9% • US delivered organic revenue g
Slide 4: Data-Driven, Technology Enabled
DATA-DRIVEN, TECHNOLOGY ENABLED • Our customers are asking different things of us; anticipation of customer behaviour, measurement and alignment to business goals, multiple optimisation of spend, technology as a (Creative) service • We are operating in a disrupted industry – advertising no longer ki
Slide 5: Our Strategies
OUR STRATEGIES • Work with and partner with, the companies disrupting our industry FB, Google, MSFT, Amazon • Build and buy technology-enabled content and data businesses • Develop higher level consulting organization able to deliver end-to-end solutions • Leverage US assets and partnerships 5 www.n
Slide 6: Merger of Text 100 and Bite
MERGER OF TEXT 100 AND BITE • Recently announced the merger of Text 100 and Bite businesses in the US and the UK, having previously merged the two businesses in APAC and the rest of Europe • New agency will be created under a new brand and will be headed by Bite CEO, Helena Maus • Following these ac
Slide 7: Brandwidth
BRANDWIDTH • UK based digital innovation agency acquired in February 2018 • Clients include Toyota, Royal Caribbean, Citroen, Kia and Vodafone • Brings significant digital skills to the Group and exciting voice technology capabilities • Initial consideration of £6.2m based on a multiple of 5.5 on th
Slide 8: Technical
TECHNICAL • A specialist technical content and digital marketing business focused on the industrial engineering sector acquired in July 2018 which now trades as Publitek • Clients include National Instruments, HIMA and Atlas Copco and services them from offices in the UK, Germany and Singapore • Ini
Slide 9: Our Agencies
OUR AGENCIES • Corporate & political: • Creative: • Design: • Consumer: • B2B Marketing: • Technology: Comms & digital content – Data and research – 8% Technology – 36% 56% 9 www.next15.com
Slide 10: Income Statement – Adj. Results
INCOME STATEMENT – ADJ. RESULTS £M H1 2019 H1 2018 GROWTH % Net revenue 106.8 93.5 14% EBITDA 17.7 14.5 22% Operating profit 15.4 12.3 25% Operating margin 14.4% 13.2% PBT 15.1 12.0 26% Tax (3.0) (2.4) Minorities (0.3) (0.3) Retained profit 11.8 9.3 27% Diluted EPS 14.2 11.4 25% Dividend 2.16 1.8 20
Slide 11: Adjustments Breakdown
ADJUSTMENTS BREAKDOWN £M H1 2019 H1 2018 Adjusted pre tax profits 15.1 12.0 Restructuring (0.2) (0.4) Deal costs (0.3) (0.1) Share based payments (0.6) (1.5) Unwinding of discount and change in estimate 0.1 (1.6) of earnout liabilities Amortisation of acquired intangibles (3.8) (3.2) Reported profit
Slide 12: Regional Breakdown
REGIONAL BREAKDOWN Regions Revenue Organic Operating Margin Margin Comments H1 2019 growth Profit H1 2019 H1 2018 £M £M US 55.8 7.0% 9.4 16.9% 18.1% Beyond onboarding signature client and client losses at Text 100 UK 40.0 14.9% 9.5 23.7% 20.2% Strong performance and acquisitions APAC 6.8 0.2% 0.5 7.
Slide 13: Cash Flow Statement
CASH FLOW STATEMENT £M H1 2019 H1 2018 Inflow from op activities 17.9 14.5 Working capital (7.0) (8.4) Net inflow from operations 10.9 6.1 Tax (3.1) (1.9) Net capex (4.6) (2.0) Acquisitions (15.5) (10.0) Net interest and dividends paid (1.3) (1.3) Exchange gain on net debt (0.4) (0.3) (Increase) / D
Slide 14: Cash Commitments
CASH COMMITMENTS 31 July 18 £M H2 2019 1.7 FY 2020 3.2 FY 2021 8.8 FY 2022 0.7 FY 2023 2.7 Total 17.1 14 www.next15.com
Slide 15: Conclusion
CONCLUSION Summary of the results: • Encouraging recent trading and prospects for the second half • Net revenue up 14% to £106.8m remain good • Organic revenue growth of 8.7% • Group is confident it will meet its • Adjusted EBITDA up 22% at expectations for the full year £17.7m • Adjusted pre tax pr
Slide 16: Appendices
APPENDICES www.next15.com
Slide 17: Management Team
MANAGEMENT TEAM Richard Eyre CBE Tim Dyson Peter Harris (Chairman) (CEO) (CFO) Richard joined in 2011, he is Tim joined the group in 1984 Peter was appointed CFO in also Chairman of the Internet and became the global CEO in 2013. He is also a NED at Advertising Bureau. Prior to 1992. An early advoca
Slide 18: Top Customers
TOP 20 CUSTOMERS JUST HARMAN "EAT AIVIERICAN) SAMSUNG fc 18 amazon.com —7 WD TOYOTA Fae INTUIT WZ SUNTRUST y BE Microsoft it MACALLAN NEXT15
Slide 19: H1 2019 Revenue Bridge
H1 2019 REVENUE BRIDGE H1 FY19 Revenue Bridge (£m) 115 + 9.7 - 4.4 +10.4% -4.9% 110 + 14.2% 106.8 105 + 8.0 +8.7% 100 95 93.5 90 Six month period to Organic growth Acquisitions Foreign exchange Six month period to 31 July 2017 31 July 2018 19 www.next15.com
Slide 20: Client Analysis H1 FY19
CLIENT ANALYSIS H1 FY19 £54,000 47 35% CLIENTS GENERATING OVER SHARE OF GROUP REVENUES REVENUE PER EMPLOYEE FROM TOP 20 CLIENTS $0.5M IN REVENUES H1 2019 21% INCREASE IN 14 90% REVENUES TOP 20 CLIENTS IN H1 2019 CLIENT NUMBERS GENERATED IN US IN TOP 20 CLIENTS H1 2018 (INCL ACQ) AND UK 20 www.next15
Slide 21: Balance Sheet Summary
BALANCE SHEET SUMMARY £M 31 July 2018 31 January 2018 Intangible assets 102.2 94.8 Non-current assets 28.0 25.3 Current assets 87.3 74.6 Non-current liabilities (62.7) (58.8) Current liabilities (69.3) (59.6) Net assets 85.5 76.3 Share capital 2.0 1.9 Reserves 85.1 75.0 Minorities (1.6) (0.6) Total