Slide 1: Final Results – April 23rd, 2020
FINAL RESULTS – APRIL 23RD, 2020
Slide 2: Financial Summary
FINANCIAL SUMMARY • Net revenue up 11% to £248.5m (2019: £224.1m) • Adjusted* operating profit up 11% to £40.9m (2019: £37.0m) • Adjusted operating profit margin remains stable at 16.4% from 16.5% • Adjusted pre tax profits up 12% to £40.2m (2019: £36.0m) • Diluted earnings per share increased by 5%
Slide 3: Corporate Progress
CORPORATE PROGRESS • Data and analytics net revenues grew organically by 19.3% to £45.1m with a margin of 28.2% • Savanta relaunched as a single brand in February • Key client wins include DuPont, Google Cloud, O2 • Investments include the acquisitions of M Booth Health, Nectar and Palladium • Beyon
Slide 4: Our Agencies
OUR AGENCIES Brand Marketing Data and Analytics Creative Technology Net revenue: £135.0m Net revenue: £45.1m Net revenue: £68.4m Organic growth: (5.7)% Organic growth: 19.3% Organic growth: (2.1)% Operating profit: £29.9m Operating profit: £12.7m Operating profit: £7.8m Excluding Archetype Excluding
Slide 5: Covid-19 Impact & Current Outlook
COVID-19 IMPACT & CURRENT OUTLOOK • All employees transitioned to working from home by mid March in UK and US. • Large percentage of our revenues derived from business to business technology customers and only a small percentage from more business to consumer clients in the travel, hospitality and l
Slide 6: Covid-19 Impact & Current Outlook
COVID-19 IMPACT & CURRENT OUTLOOK • Group has decided to suspend the final dividend, although it fully intends to resume dividend payments once the macro environment improves. • Group has accessed, where appropriate, government programmes to help businesses deal with Covid-19 • Group currently expec
Slide 7: Revenue by Sector
REVENUE BY SECTOR Hotels, Restaurants & Hospitality Other 1% 6% Government & Government Agencies 2% Healthcare / Pharmaceuticals 2% Charities, Foundations & Trade Associations 2% Software & IT services Software & IT services Alcohol 39% 3% Electronic Equipment & Parts Transportation Telecommunicatio
Slide 8: Post Covid
POST COVID • Group is planning for the ‘Post Covid’ era • Our balance sheet strength provides opportunities for appropriate acquisition opportunities • Looking to offshore certain aspects of software development • Accelerating design and upgrades to our product portfolio • Rethinking operational mod
Slide 9: Financials
FINANCIALS www.next15.com
Slide 10: Income Statement – Adj. Results
INCOME STATEMENT – ADJ. RESULTS £M 2020 2019 GROWTH % Net revenue 248.5 224.1 11% Operating profit 40.9 37.0 11% Operating margin 16.4% 16.5% PBT 40.2 36.0 12% Tax (8.0) (7.2) Minorities (0.6) (0.6) Retained profit 31.6 28.2 12% Diluted EPS (p) 34.8 33.1 5% 10 www.next15.com
Slide 11: Adjustments Breakdown
ADJUSTMENTS BREAKDOWN £M 2020 2019 Adjusted pre tax profits 40.2 36.0 Restructuring (4.6) (4.4) Office moves - (0.2) Deal costs (0.9) (0.6) Share based payments (0.4) (1.3) Employment linked acquisition payments (5.0) (0.8) Unwinding of discount and change in estimate (11.6) (0.9) of earnout liabili
Slide 12: Operational Breakdown
OPERATIONAL BREAKDOWN Operation Net revenue Organic Operating Margin Margin Comments 2020 growth/ Profit 2020 2019 £M (decline) £M BRAND 135.0 (5.7)% 29.9 22.2% 22.2% Excluding Archetype MARKETING organic growth is 2.8% DATA AND 45.1 19.3% 12.7 28.2% 30.9% ANALYTICS CREATIVE 68.4 (2.1)% 7.8 11.4% 14
Slide 13: Cash Flow Statement
CASH FLOW STATEMENT £M 2020 2019 Inflow from op activities 47.8 37.2 Working capital 1.7 1.2 Net inflow from operations 49.5 38.4 Tax (6.0) (6.2) Net capex (5.3) (8.0) Acquisitions (23.7) (29.6) Net interest and dividends paid (7.8) (7.5) Repayment of lease liabilities (11.4) - Net proceeds from sha
Slide 14: Estimated Future Cash Payments
ESTIMATED FUTURE CASH PAYMENTS Latest estimate 31 Jan 2020 at end of April £M £M FY 2021 16.3 5.2 FY 2022 8.5 6.9 FY 2023 9.6 9.6 FY 2024 6.8 6.5 FY 2025 5.7 5.7 FY 2026 2.0 2.0 Total 48.9 35.9 14 www.next15.com
Slide 15: Outlook
OUTLOOK • The Group continues to focus on building its data, analytics and technology capabilities and ensuring these are embedded throughout the Group • Confident that Next 15 is well positioned to withstand this unprecedented period and can continue to progress with its growth strategy. 15 www.nex
Slide 16: Appendices
APPENDICES www.next15.com
Slide 17: 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 18: Top 20 Customers
TOP 20 CUSTOMERS 18 www.next15.com
Slide 19: FY20 Revenue Bridge
FY20 REVENUE BRIDGE 255 248.5 +4.8 250 2.1% +10.9% +26.2 245 +11.8% 240 235 230 (2.2) 225 224.1 (1.0%) (4.4) (2.0%) 220 215 210 Year to 31 January Discontinued Organic growth Acquisitions Foreign exchange Year to 31 January 2019 2020 19 www.next15.com
Slide 20: Client Analysis FY20
CLIENT ANALYSIS FY20 £117k 66 30% CLIENTS GENERATING OVER SHARE OF GROUP NET REVENUE PER EMPLOYEE $1M IN NET REVENUES 2020 REVENUES FROM TOP 20 CLIENTS 19% INCREASE IN 14 91% NET REVENUES TOP 20 CLIENTS IN 2020 IN CLIENT NUMBERS GENERATED IN US TOP 20 CLIENTS 2019 (INCL ACQ) AND UK 12 MONTHS TO JAN
Slide 21: Client Analysis FY19
CLIENT ANALYSIS FY19 £112k 57 32% CLIENTS GENERATING OVER SHARE OF GROUP NET REVENUE PER EMPLOYEE $1M IN NET REVENUES 2019 REVENUES FROM TOP 20 CLIENTS 22% INCREASE IN 14 90% NET REVENUES TOP 20 CLIENTS IN 2019 IN CLIENT NUMBERS GENERATED IN US TOP 20 CLIENTS 2018 (INCL ACQ) AND UK 12 MONTHS TO JAN
Slide 22: Regional Breakdown
REGIONAL BREAKDOWN Regions Net Organic Operating Margin Margin Comments revenue growth Profit 2020 2019 2020 £M £M US 127.6 (4.6)% 26.4 20.7% 18.7% Excluding Archetype and Beyond organic growth is 12.7% UK 97.4 0.3% 20.1 20.6% 24.5% Excluding Archetype and Beyond organic growth is 7.9% APAC 14.7 4.8
Slide 23: Balance Sheet Summary
BALANCE SHEET SUMMARY £M 31 January 2020 31 January 2019 Intangible assets 155.4 126.1 Non-current assets 69.0 29.0 Current assets 99.7 87.4 Non-current liabilities (113.5) (54.4) Current liabilities (97.9) (76.6) Net assets 112.7 111.5 Share capital 2.2 2.1 Reserves 111.1 110.5 Minorities (0.6) (1.
Slide 24: Health Unlimited Acquisition
HEALTH UNLIMITED ACQUISITION • New York based global health consultancy and communications agency acquired in October 2019 • Traded as M Booth Health following acquisition to broaden customer range into healthcare • Clients include Gilead Sciences Inc., Global Blood Therapeutics and Foundation for t