Next 15 Group Plc · LSE:NFG
Next 15 — Next Fifteen Communications Group — FY2011 Earnings Presentation
33 slides from Next 15's earnings presentation, Oct 18, 2011
Slide 1: Preliminary results 2011
Preliminary results 2011 October 18th 2011 1
Slide 2: Agenda
Agenda Highlights Client review Strategic update Financials Summary Appendices
Slide 3: 2011 highlights
2011 highlights • Organic* revenue growth of 11% despite volatile financial markets • New clients GE, Nokia, Disney Consumer Products, Broadcom, OpenTable, Zynga, Informatica, Solazyme, Lytro • US remains strong with revenue up 21%, representing 52% of group revenue • Over 75% of new business includ
Slide 4: Financial headlines
Financial headlines Another strong year of record revenue and adjusted profit • Revenue up 19% to £86.0m (2010: £72.3m) • Adjusted PBT up 27% to £8.4m (2010: £6.6m) • EBITDA up 27% to £10.7m (2010: £8.4m) • Diluted adjusted EPS up 16% to 8.74p (2010: 7.53p) • Dividend up 11% to 2.05p (2010: 1.85p) •
Slide 5: Well-managed growth
Well-managed growth Item / £m FY 2011 FY 2006 Compared with 2006 : - • Revenues have grown by Revenues 86.0 56.0 over 50% Adjusted PBT 8.4 4.4 • Adjusted PBT has almost doubled EBITDA 10.7 5.3 • EBITDA has doubled Diluted adj EPS (p) 8.7 5.0 • Diluted adjusted EPS increased by 75% Dividend (p) 2.05
Slide 6: Agenda
Agenda Highlights Client review Strategic update Financials Summary Appendices
Slide 7: Sector focus
Sector focus Quoted PR Largest client % of group Organic • Organic growth now group group revenues growth includes key digital Next Fifteen Technology 69% 11.0% (1) business, Beyond Next Fifteen Technology 69% 11.0% (2) • Relative to its peers, Next Fifteen has Huntsworth Pharma and 36% 1.6% (3) ben
Slide 8: Key clients, material relationships
Key clients, material relationships • Next Fifteen’s top 10 clients represented 30% of group revenue in FY 2011 (2010: 32%) • 2 are non-tech clients • Half of top 10 clients held for more than 5 years • 17 clients generated revenues over £1m per annum in FY 2011 (was 13 in 2010) 8 18/10/2011
Slide 9: Positioned for growth
Positioned for growth Revenue contribution by geography 2011 Organic growth* rate by geography 2011 APAC, 16% UK, 21% APAC 20% US and Canada 11% Europe and Africa, 11% Europe and Africa -1% UK 9% US and Canada, -5% 0% 5% 10% 15% 20% 25% 52% • North America and APAC now *Organic growth excludes the i
Slide 10: Agenda
Agenda Highlights Client review Strategic update Financials Summary Appendices
Slide 11: Strategy
Strategy Growth in revenue and diluted adjusted EPS between 2006 and 2011 • To lead and capitalise on the change from analogue persuasion to digital 100 10 influence 95 9 • To apply this expertise in fast growth 90 8 sectors and geographies 85 7 80 6 • To continuously evolve higher value £m p Revenu
Slide 12: New board members
New board members • Richard Eyre (Ch) - Internet Advertising Bureau, ex-RDF, Pearson Television, ITV, Capital Radio and Bartle Bogle Hegarty • Alicia Lesniak (NED) – Channel 4, ex-Aegis, WPP, BBDO • Margit Wennmachers (NED) – Andreesen Horowitz (Silicon Valley VC), ex- Outcast Agency and Blanc & Otu
Slide 13: Business development
Business development Fast growth Digital products and regions services • Key acquisitions since Aug 2009 categorised into 3 types, driven by strategy Beyond • Names in bold were Upstream Asia Type 3 acquired over the last 12 Trademark months • £6.1m* spend in FY2011 Bourne • £11.6m* spend in the las
Slide 14: Digital impact now
Digital impact now • Digital now included in 75% of new business initiatives • Digital competence is key pitch criteria • Recent work includes multi platform content for Fair Trade client 14
Slide 15: New Next 15 agency helping businesses use mobile as a marketing channel
• New Next 15 agency helping businesses use mobile as a marketing channel • Mobile now a primary platform for marketing to customers and communities, changing consumer brand preference and behaviour: • Smartphone + tablet sales now exceed PC sales for first time • 50% of new internet connections now
Slide 16: Targets for 2013
Targets for 2013 Item By 2013 FY 2011 • We have made good progress against the Revenues from APAC 20% 15% growth targets set out at the end of FY 2010 Revenues from outside 40% 31% technology PR base New healthcare business To be acquired n/a • Further work to do on or created margin improvement Ope
Slide 17: Agenda
Agenda Highlights Client review Strategic update Financials Summary Appendices
Slide 18: Income statement
Income statement £m FY 2011 FY 2010 Growth/ % Billings 105.2 91.2 15 Revenue 86.0 72.3 19 Operating profit 8.0 6.5 23 Adjusted PBT 8.4 6.6 27 Tax (2.3) (1.6) Retained profit 5.3 3.7 Basic EPS 9.1p 6.8p 35 Diluted adj EPS 8.7p 7.5p 16 Dividend 2.05p 1.85p 11 18
Slide 19: Cash flow
Cash flow £m FY 2011 FY 2010 Inflow from op activities 11.1 8.9 Working capital 0.3 (2.3) Net inflow from ops 11.4 6.6 Tax (2.6) (1.5) Net capex (2.0) (1.5) Acquisitions (6.0) (4.0) Own shares 0.1 0.1 Interest (0.4) (0.4) Dividends (1.0) (0.9) Minorities (0.1) (0.3) Financing 1.7 1.9 Increase in cas
Slide 20: Balance sheet
Balance sheet £m FY 2011 FY 2010 Intangible assets 37.9 27.1 Non-current assets 6.4 4.8 Current assets 34.8 29.5 Non-current liabilities (20.7) (8.6) Includes present Current liabilities (26.1) (25.2) value of estimated future earnout Net assets 32.3 27.6 commitments (equity Share capital 1.4 1.4 an
Slide 21: Segmental Revenue and Adj Operating Profit
Segmental Revenue and Adj Operating Profit £m Revenue % Operating Profit % Technology PR 59.3 68.9 8.0 63.1 Consumer PR 16.1 18.7 2.9 22.6 Digital/Research 5.6 6.5 0.7 5.3 Corporate 5.0 5.8 1.1 9.0 Communications Head Office (3.9) 86.0 100 8.8 100 21
Slide 22: Geographic Revenue and Adj Operating Profit
Geographic Revenue and Adj Operating Profit £m Revenue % Operating Profit % US and Canada 45.1 52.5 8.7 68.3 UK 18.0 20.9 2.9 23.1 EMEA 9.7 11.3 0.9 6.7 APAC 13.2 15.3 0.2 1.9 Head Office (3.9) 86.0 100 8.8 100 22
Slide 23: M&A example – creating value
M&A example – creating value • Beyond created by combining existing Next 15 consulting resources and an analytics business owned by Text 100 • In FY 2010 these businesses had revenue of £1m. In August 1010, 2011 – revenue Type 3 was acquired with a revenue contribution of £4.5m run rate of £1.4m 201
Slide 24: Agenda
Agenda Highlights Client review Strategic update Financials Summary Appendices
Slide 25: Summary
Summary Summary FY 2011 in review Outlook • Results in line with expectations in a • H2/ H1 encouraging in terms of sluggish global economy organic growth, good start to FY 2012 • Another year of strong organic • Tech sector remains relatively revenue growth at 11% for the full resilient but tech cl
Slide 26: Appendix
APPENDIX
Slide 27: Next Fifteen – investor snapshot
Next Fifteen – investor snapshot • Digital communications group – more than just PR • Current revenue split: Technology PR 69%, Consumer PR 19%, Digital & Research consultancy 6% and Corporate Communications 6% • Strong base in San Francisco but global with 48 offices in 18 countries • More than 50%
Slide 28: Recent trading history
Recent trading history 2008 2009 2010 2011 Revenue £63.1m £65.4m £72.3m £86.0m Adjusted profit before tax £6.58m £5.25m £6.61m £8.39m Adjusted profit before tax margin % 10.4% 8.0% 9.1% 9.8% EBITDA £7.4m £5.5m £8.4m £10.7m Net cash from operating activities £8.5m £4.8m £5.1m £8.8m Adjusted diluted E
Slide 29: Group Structure
Group Structure Technology Consumer Corporate Digital/ PR PR Comms Research Text 100 Bite OutCast Lexis M Booth 463 (76%) Blueshirt Beyond Redshift Bourne (85%) (51%) (80%) 29
Slide 30: Next Fifteen’s digital advantage
Next Fifteen’s digital advantage • California is home to more internet businesses of scale than anywhere else in the world California base • Next Fifteen’s tech client base have been early adopters of the internet and social media from a marketing perspective…. • …and digital is already boosting cli
Slide 31: Performance indicators
Performance indicators FY 11 FY 10 • Staff cost to revenue (%) 69.4 68.8 • Adjusted profit before tax margin (%) 9.8 9.1 • Net cash from operating activities (£m) 8.8 5.1 • EBITDA(£m) 10.7 8.4 • Operating profit by segment (£m) – Technology PR 8.0 8.1 – Consumer PR 2.9 2.4 – Corporate Communications
Slide 32: Office locations
Office locations US EMEA APAC San Francisco London Tokyo New York Paris Hong Kong Washington Munich Beijing Boston Milan Shanghai Rochester Madrid Kuala Lumpur Los Angeles Amsterdam Singapore Stockholm New Delhi Copenhagen Mumbai Helsinki* Bangalore Oslo Chennai Johannesburg Sydney Seoul* Tapei* Auc
Slide 33: END
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Next Fifteen Communications Group — FY2011 Earnings Presentation on 6ix