Public Policy Holding Co., Inc. · LSE:PPHC
Public Policy — H1 2024 Earnings Presentation
39 slides from Public Policy's earnings presentation, 2024
Slide 1: PPHC Results H1 2024
PPHC Results H1 2024
Slide 2: Disclaimer
2 Disclaimer THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR RELEASE, REPRODUCTION, PUBLICATION OR DISTRIBUTIO N, IN WH OLE OR IN PART, DIRECTLY OR INDIRECTLY , TO ANY O THER PERSON OR IN O R INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOU
Slide 3: Table of Contents
Table of Contents 3 Table of Contents Presentation Team PPHC Summary Financial Results Growth Strategy Conclusion Appendix
Slide 4: Presentation Team
4 Presentation Team Stewart Hall Roel Smits Thomas Gensemer Chief Executive Officer Chief Financial Officer Chief Strategy Officer
Slide 5: PPHC Summary
5 PPHCto Click Summary edit Master Texts Style
Slide 6: Key highlights from the reporting period
6 Key highlights from the reporting period Total Revenues: $71.1m, Two strategic acquisitions in H1 Broad industry coverage Retained top federal up 8% (organic 1.2%) deepening footprint in CA and advocacy ranking for the establishing presence in London Blue chip client base, now 16th consecutive qua
Slide 7: PPHC overview
7 PPHC overview Expertise in navigating government risk & opportunities Key capabilities Public Policy Holding Company (“PPHC”) operates a complementary portfolio of ten leading bipartisan firms PPHC firms offer integrated government relations and Federal Public Affairs Research & Digital Grassroots
Slide 8: Industry overview
8 Industry overview Thematic end-market tailwinds… PPHC has an attractive and defensible position in the ~$17bn US federal & state US public affairs and US federal and state lobbying markets are expected to grow at ~4.5% lobbying and public affairs markets, and is actively pursuing the international
Slide 9: PPHC overview
9 PPHC overview Our firms are leaders in US federal, US state and UK lobbying and public affairs markets Highly diversified customer base with high retention and low industry concentration Separately-branded operating companies Conflict management via holding company model $95.5m $32.3m $7.2m Govern
Slide 10: Entrenched relationships with blue chip client base, including c. 48% of Fortune 100
10 Entrenched relationships with blue chip client base, including c. 48% of Fortune 100 Long-tenured, sticky client base gives high Unmatched relationships with diversified clients quality earnings prospects 85% Dollar-Based Client Retention (in 2023FY) c. 1200 Low client revenue concentration Clien
Slide 11: PPHC serves clients across all industries with bi-partisan policy expertise
PPHC serves clients across all industries with bi-partisan policy expertise and communications 11 strategy <2% includes Media / Comms, Retail, Environment, Automotive, Agriculture, Food & Beverage, Labour ◼ Technology ◼ Finance ◼ Healthcare <4% includes Manufacturing, Construction, Recreation / Tour
Slide 12: PPHC employees
12 PPHC employees Employee metrics 360+ Employees 75%+ of PPHC shares owned by employees 85+ Employee shareholders
Slide 13: PPHC outranks other lobbying firms; competes with leading communications firms
PPHC outranks other lobbying firms; competes with leading communications firms 13 Government Relations & Policy Advocacy Corporate Communications & Public Affairs Lobbying Firm 2023 Revenue (in $m) PPHC agencies combined (pro forma) 68.2 Brownstei n Hy att Farber Schrek 62.7 Akin Gump Strauss Hauer
Slide 14: Financial Results
14 Financial Click to edit Results Master Texts Style
Slide 15: Continuing a strong track record of growth
Continuing a strong track record of growth 15 Historical growth PPHC has typically delivered growth and excellent profitability throughout political and economic cycles Medium Term outlook Revenues organically growing 5 to 10% each year Incremental growth from future M&A EBITDA margin between 25% an
Slide 16: Highlights H1 2024 (and variances from H1 2023)
16 Highlights H1 2024 (and variances from H1 2023) Revenue EBITDA Margin Net Income Margin $71.1m $17.4m 24.5% $13.2m 18.5% Up 8% from $65.7m Up 3% from $16.9m Down 1.3pt from 25.8% Up 4% from $12.7m Down 0.8pt from 19.3% Organic growth +1%, with GR Strong profit conversion. EBITDA Close to target r
Slide 17: By segment
By segment 17 GR and DS showing strong sustainable growth, while partially offset by decline in project-based Public Affairs work H1 2024 Government Diversified Services Public Affairs Total Relations Revenue $50.3m $5.3m $15.5m $71.1m % of total 71% 7% 22% 100% Growth +8% +97% -6% +8% Growth organi
Slide 18: P&L results
18 P&L results Track record of profitable growth Commentary 2024H1 2023H1 change change ($) P&L growing at top and bottom line P&L Underlying EBITDA margin strong at 24.5% just below traditional band 25-30%. All in $'000, unless otherwise noted Impacted 2.5 pts by $1.8m incremental one-offs of Conco
Slide 19: Cash flow
Cash flow 19 Track record of strong operational cash flow Commentary Non-GAAP Cash Flow Statement 2024H1 2023H1 change change ($) (non-GAAP) Operational Cash Flow increasing by 210% to $6.0m, and Free Cash Cash Flow Flow increasing by 228% to $6.0m, both in line with EBITDA growth and working All in
Slide 20: Acquisitions
Acquisitions 20 Acquisitions structured to drive EPS growth in risk-controlled way Typical acquisition structure: Impact on EPS: Upfront Payment in combination with multiple earnout payments over longer Both material acquisitions post-IPO (KP, MultiState) have contributed more to period EPS than exp
Slide 21: Our M&A track record since IPO
Ongoing value driving initiatives, including accelerating revenue growth and expanding 21 Our M&A track record since IPO profit margins, resulting in further EPS contribution, despite remaining earnout payments. October 2022 March 2023 May 2024 June 2024 Gov’t Relations & Public Gov’t Relations and
Slide 22: Growth Strategy
22 Growth Click to edit Strategy Master Texts Style
Slide 23: Multiple avenues for sustained & profitable growth; organic and inorganic
23 Multiple avenues for sustained & profitable growth; organic and inorganic Go-To-Market Expansion Opportunities M&A Opportunities Increase Complementarity Systematic Increase in Key Hires and Continue to Establish Expansion of Core Services Expand Through Active and Collaboration Between Retainer
Slide 24: Active M&A pipeline, expanding geographies and capabilities
24 Active M&A pipeline, expanding geographies and capabilities Ample scope for growth through M&A Geography Issue Specialisation Multiple M&A opportunities under consideration/review, which would expand geographies and capabilities Typically, earnout transactions, whereby future payments are con
Slide 25: Our short-term goal is to establish a Group presence in key global markets
Our short-term goal is to establish a Group presence in key global markets to 25 unlock referral nexus into global corporate budgets While still less regulated than in the US, UK & EU governments have increased lobbying transparency requirements over the last decade UK The Transparency of Lobbying,
Slide 26: Conclusion
26 Conclusion Click to edit Master Texts Style
Slide 27: High government spending + risky political climate = strong, global demand
High government spending + risky political climate = strong, global demand 27 Tailwinds driving growth Strategic communications with financial, healthcare and tech specialisation(s) among the fastest growing sectors, each with unique demands for policy and regulatory expertise PR holding companies a
Slide 28: Outlook
28 Outlook The Board retains its confidence in the ongoing prospects for the Group and reiterates its medium-term guidance to achieve: Revenues organically growing 5 to 10% each year Incremental growth from future M&A EBITDA margin between 25% and 30%
Slide 29: Summary: why invest in PPHC?
29 Summary: why invest in PPHC? Strong, proven Attractive financial Attractive Strong growth prospects business profile dividend Large and growing industry with Premium profit margins History of payout ratio of Market continues to grow low correlation with economic underlying net profit >60% Low cap
Slide 30: Appendix
30 Click to edit Appendix Master Texts Style
Slide 31: Why public? Why on AIM?
31 Why public? Why on AIM? Why are we a listed company? Why In London? Implement an M&A currency to seize strategic acquisition The UK and AIM has a strong track record of supporting opportunities and maintain a competitive edge high-growth, mid-sized professional services businesses Have structural
Slide 32: Proven Track of Focused Acquisitions of Complementary Services and Geographies
32 Proven Track of Focused Acquisitions of Complementary Services and Geographies 2014 2015-2018 2019 2020 2021 2022 2023 2024 Founding firms CRS and Acquisitions/merger of Acquisition of O’Neill & Acquisition of IPO on LSE AIM Acquisition of KP Public Acquisition of Multistate & Acquisition of Luca
Slide 33: How does the PPHC platform add value?
33 How does the PPHC platform add value? PPHC maintains separately branded and managed PPHC’s platform for operation operating companies PPHC offers conflict mitigation, access to growth capital, operational efficiencies and cross referral opportunities Integrated Business Services PPHC supports eac
Slide 34: Elevating corporate water stewardship in California
34 Elevating corporate water stewardship in California Challenge Recognizing growing enthusiasm for greater coordination among California’s largest corporations, Lucas Public Affairs (LPA), in collaboration with the Pacific Institute, the World Environment Center and Ecolab, launched the California
Slide 35: Ensuring representation of the UK's professional freeholders
35 Ensuring representation of the UK’s professional freeholders Challenge Amidst a UK-wide building safety crisis and an increased focus on leasehold reform in Whitehall, three of the UK’s largest professional freeholders worked with Pagefield to ensure their voices were heard by the Government. Sol
Slide 36: Securing protections for restaurant pricing models
36 Securing protections for restaurant pricing models Challenge California passed a new law to stop surprise charges in various industries, specifically in the hotel and travel industries. In May 2024, it was clarified that restaurant service fees, such as automatic charges for large groups, would b
Slide 37: Ensuring accuracy in lobbying disclosures
Ensuring accuracy in lobbying disclosures: how MultiState resolved compliance challenges 37 for a multinational corporation Challenge A Multinational corporation was concerned that their prior compliance vendor did not file accurate lobbying disclosure statements in several states. Given the jurisdi
Slide 38: Advancing industrial decarbonization: CRS helps secure up to $25m
Advancing industrial decarbonization: CRS helps secure up to $25m for domestic 38 manufacturing client through IRA Challenge A large domestic manufacturer had not been active in pursuing federal grants or engaging with federal opportunities to advance its sustainability goals, and they needed fundin
Slide 39: PPHC
PPHC:
Public Policy Holding Company — H1 2024 Earnings Presentation on 6ix