Reach Plc · LSE:RCH
Reach — H1 2024 Earnings Presentation
33 slides from Reach's earnings presentation, July 2024
Slide 1: Interim Results 2024
INTERIM RESULTS 2024. Reach
Slide 2: Disclaimer
Disclaimer. This presentation has been prepared by Reach plc (the Company") and its subsidiaries or associated companies or its or their affiliates (the “Group’) in connection with the publication of the Company's preliminary results for the six months ended 30 June 2024, Certain statements in this
Slide 3: Jim Mullen, Chief Executive Officer
Jim Mullen Chief Executive Officer HY Results | 3] July 2024
Slide 4: First half performance - in summary
summary First half performance - in summary. Solid overall performance. » Operational expertise optimising digital and print assets » Strong trading of digital inventory with yield increase >30% YOY and digital back in growth in Q2 +7% «Print circulation (3.6%) and print advertising (11.5%) both out
Slide 5: HY Results | July 2024
HY Results | 31 July 2024
Slide 6: Summary - financial performance
@ 2 S on 2 c= o 2 £ Summary - financial performance. Revenue HY23: £279m Digital revenue £60m HY23: £61m Adj. operating profit 45% YOY operating cost reduction HY23: (2.8)% Adj. operatin oan flow a £58m HY23: £38m Cash conversion HY23: 106% Adj. Earnings per share 10.1p HY23: 8.7p Interim dividend p
Slide 7: HY24 Financial summary
HY24 Financial summary. Adjusted results Digital Print Other Revenue Operating profit Operating margin EPS DPS Adj operating cash flow Net debt HY24£m HY23 £m 60.8 217.3 13 279.4 36.1 12.9% 8.7p 2.88p 38.2 (3.5) Var% (1.3) (6.1) (22.7) (5.2) 23.3 16.0 0.0 Financial Strategic eae beset Revenue down 5
Slide 8: Revenue
Revenue. Print circulation resilient and print advertising continues to outperform volumes 1.3)% 12 Ge)% (1.5)% * Strong trading of digital (14.0)% — (a97)% — (5.2)% assets driven by Customer Value Strategy, increasing yield >30% (revenue per thousand pages) £279m Ld * Print circulation resilient, T
Slide 9: Digital revenue
ehmmea Financial trateg| > " review ipdate Digital revenue. Data-driven revenues continue to grow Data-driven revenues * Data-driven revenues grew 9%, with the improving yield more than £60m compensating the volume decline * Strong year-on-year growth in direct advertising, partnerships, ecommerce a
Slide 10: Decisive action on operating costs
Financial Strategic SEMIS WipelN© Decisive action on operating costs. Adapted quickly to changing environment £245m £222m * Operating costs declined 9% + Labour costs declined 8%, due to the restructuring implemented at the end £115m £106m of 2023 + Newsprint costs have reduced materially from lower
Slide 11: Profit bridge
imme Financial tratec - review J Profit bridge. HY23 Revenue Inflation Efficiencies Investment Other HY24 mix & volume Reach pic | HY24 1!
Slide 12: Half year 2024 use of cash
Summary Ts Me Half year 2024 use of cash. Per agreed schedule , of payments Settlement of _ claims 2023 Restructurin: os g Includes £4.4m lease payments, £1.8m. income tax & net — £(5.2)m interest £1.5m Dec 23 Adj cash Dividend Pension Historical Restructuring Capex Other Property June 24 Net debt g
Slide 13: Capital allocation
Financial review Capital allocation. Profitability and cash remain priorities as we continue to reduce our financial obligations Resilient print profits, sustainable cash generation i © and strong balance sheet Organic Pension Dividends for M&A investment funding shareholders Reach pic | HY24 13
Slide 14: Financial guidance
Simmel Financial ~~ bans review Financial guidance. Costs: Trending slightly ahead of 5-6% reduction in operating costs Profit: Profit phasing to be more equally weighted between HI and H2 Depreciation: Expect similar charge to 2023 (£21m) Cash: Working capital expected to be broadly neutral (exclud
Slide 15: Jim Mullen, Chief Executive Officer
Jim Mullen Chief Executive Officer HY Results | 3] July 2024
Slide 16: Solid performance against macro backdrop
Financial Strategic Summary TaviGW update Solid performance against macro backdrop. Ongoing delivery driven by strategy and expertise Proven track record in Print circulation 45% i outperforming data-driven } structural eyrelelie| \ revenues decline (4%) Feduction in operating costs Reach pic |HY24
Slide 17: Circulation supporting print revenues
Saran inancia Strategic - Y review updal Circulation supporting print revenues. Industry-leading operational expertise maximising value * Cover price increases supported with strong promotional activity and special one-off products * Astute use of evergreen content * Historical trends demonstrate pr
Slide 18: Track record in driving efficiencies
Track record in driving efficiencies. Meeting our financial obligations and delivering returns to our shareholders Operating profit margin (%) HY21 Driving efficiencies HY22 HY23 HY24 Industry backdrop Revenue CAGR HY21-24 (4)% Industry shock - estimated inflationary impact on operating costs for FY
Slide 19: Our digital asset
Interim results | Strategic update Our digital ; Using data to secure and grow sizeable online asset 34m monthly average largest digital asset digital audience in UK +28% additional page sign-ups to receive views driven by content directly to personalised content their devices recommender Financial
Slide 20: Driving secure audience and engagement
Financial Strategic summesy Revit Driving secure audience and engagement. Data and in-house tech enabling scale Content recommender Personalised article recommendations based on article and reader data *source: IPSOS Iris June 24 Reach has grown page views per visit by +7.0% YOY * Personalisation dr
Slide 21: Using data to add value for our partners
Using data to add value for our partners. More effective direct ad campaigns HI total food ad revenue grown >30% e Extended product offering including app takeovers e Driving additional value from our in-house ad tech - Mantis 3X levels of contextual targeting v FY23 Additional value with curated ma
Slide 22: Further revenue diversification
ia Strategic N update Further revenue diversification. Data and in-house tech driving yield Ecommerce and affiliates Ecommerce and affiliates continue to drive growth Over double the number of affiliate partners generating more than £100k in shipped orders (HY23 - HY24) Affiliate pages drive 3X valu
Slide 23: Improving yield performance
Improving yield performance. Material improvement in yield (RPM) +32% YOY +11% YOY : — — — a 2 a 4 HY23 FY23 HY24 HB avrevenues video ff Datarevenues J Ecomm & affiliates [lJ other revenues Financial suramacty, review Customer Value Strategy CVS Data driving more valuable advertising Over the LTM to
Slide 24: Adapting the digital newsroom
Financial suramacty, review Adapting the digital newsroom. Setting our teams up to deliver for our audiences Content Hub © 250 journalists in central team © Using data and insight to support all brands with content relevant to our audiences o Fully implemented in June e Reach Studio © Integrated edi
Slide 25: Serving our audiences wherever they are
Brilliant, multiplatform Serving our audiences wherever they are. Paerenrre cere certo DAILY LEXPRESS DAILY;EXPRES oes) "ods ay caning. Te £ 3 i - 9S 2 c Lu z o S re) 2 £ ui < 9S 2 = dey c Lu Reach pic | HY24 Preliminary results | Strategic update
Slide 26: Outlook
Outlook. » Customer Value Strategy working, driving resilience and diversification » Increased mix of higher quality data-driven digital earnings e Growing digital business » Responsible cost management e Underpinned by reliable print business Reach pic | HY24 26
Slide 27: Appendix
Appendix esentation | 3] July 2024 Re ach
Slide 28: Definitions
Definitions. Metric Description Adjusted operating profit: Adjusting Items: Adjusted operating cash flow: RPM: Reporting periods: Market expectations: CAGR: Operating profit before adjusting items Items are adjusted on the basis that they distort the underlying performance of the business where they
Slide 29: Pensions
Pensions. HY24 FY23 £m Fair value of scheme assets 1,733.0 Present value of scheme liabilities (1,835.6) Impact of IFRIC 14 (0.2) Net scheme deficit (102.8) Net scheme deficit after deferred tax (77.1) 2025-27 Estimated committed pension payments 61 182 Inge £m (96.2) 152.9 2028 15 The estimated com
Slide 30: Profit to cash measure
Profit to cash measure. Profit to cash Adj. operating profit Depreciation & amortisation Adj. EBITDA Working capital movement Lease payments Other Capex Associates Adj. operating cash flow Profit to cash ratio Depreciation & amortisation in line with prior year HY24 benefitted from working capital i
Slide 31: Group income statement
Group income statement. HY24 Revenue Operating profit Profit before tax Profit after tax Basic earnings per share (p) HY23 Revenue Operating profit Profit before tax Profit after tax Basic earnings per share (p) Statutory results £ 279.4 Ml 67 46 15 Pension inance charge £ Adjust results £m 279.4 36
Slide 32: Operating adjusted items
Operating adjusted items. Provision for historical legal issues Restructuring charges (10.2) Property-related items 0.3 Pension administration expenses (2.6) Other items (5.9) Operating adjusted items included in administrative expenses (24.3) Operated adjusted items included in the share of results
Slide 33: Provisions
Provisions. Share-based ; Historical Restructuring payments c legal issues ‘m £m As at 31 December 2023 Charged to income statement Utilisation of provision As at 30 June 2024 Reach pic |HY24 33