Slide 1: Future Plc 2020 H1 Results
Future Plc 2020 H1 Results 22nd May 2020
Slide 2: Continued strong momentum: Strategy is working
Continued strong momentum : Strategy is working Record breaking Resulting in Underpinned by Delivering online audience ongoing revenue scalable operating continued EPS growth model momentum 253m online users Double digit organic Adjusted operating Adjusted diluted EPS +26% YoY* revenue growth, with
Slide 3: Impact of Covid-19
Impact of Covid-19 Since start of pandemic focus has been based on 3 pronged approach, protecting our people, our business and our stakeholders Objective is to ensure the momentum the business had going into the crisis is maintained on exit People Business Stakeholders Moved to full working from Ada
Slide 4: Financial review
Penny Ladkin-Brand Financial review 4
Slide 5: Financial KPIs
Financial KPIs +33% Revenue growth to £144.3m +45% Adjusted free cash flows growth (2019: £108.7m) to £40.0m (2019: £27.5m) +77% Adjusted operating profit +60% Adjusted diluted EPS growth to growth to £39.9m (2019: £22.6m) 32.9p (2019: 20.5p) +7ppt Adjusted operating profit +100% Leverage improvement t
Slide 6: Group performance: Detailed P&L
Group performance: Detailed P&L ● Benefit of operating leverage shown £m 2020 2019 YoY Var with 77% growth in adjusted operating profit and margin improvement to 28% Revenue 144.3 108.7 33% ● Growth in margin due to change in Gross contribution1 117.5 80.7 46% revenue mix increasing gross GC margin 81
Slide 7: Group performance: Revenue by product
Group performance: Revenue by product Organic YoY Revenue mix by product £m 2020 2019 YoY Var Var On platform advertising 47.8 40.4 18% 14% Off platform revenue 18.3 1.1 1564% (8%) Magazines eCommerce 39.4 20.8 89% 68% 20% Media other 9.5 13.4 (29%) (28%) Media 115.0 75.7 52% 21% Media Newstrade 10.
Slide 8: Group performance: Revenue by geography
Group performance: Revenue by geography Revenue mix by geography Strong growth in revenue with the US now representing 60% of the Group’s revenues UK 40% Organic US £m 2020 2019 YoY Var YoY Var 60% Revenue US 85.9 56.2 53% 19% UK 58.4 52.5 11% 3% ● Organic growth in the US 19% as a result of strong
Slide 9: Proforma Group Revenue including TI Media
Proforma Group Revenue including TI Media Revenue mix by product Revenue mix by geography ● Proforma results relate to H1FY20 revenue for Future combined with the comparable period for TI Media. Media revenues remain above 50% and we expect Media revenues to remain above 60% for all periods to be re
Slide 10: Group performance: Organic Revenue Growth
Group performance: Organic Revenue Growth £m 2020 2019 Total Revenue 144.3 108.7 2019 acquisitions 1.1 +11% 21.9 2020 acquisitions 4.1 - Disposals - 1.1 organic growth FX 0.1 - +33% Total inorganic revenue (26.1) (2.2) Total organic revenue 118.2 106.5 Organic growth +11% total growth Media/Magazine
Slide 11: Group performance: Benefit of platform
Group performance: Benefit of platform Group Adjusted Operating Profit and Margin 14% 3.0 Benefit of the Future 24% 40% platform is in the operating 5.4 39.9 gwth (1%) 77% leverage of the business with 36.9 Growth strong growth across both (0.2) 9.1 31.5 organic and acquired assets. In the chart, growt
Slide 12: Cash flow
Cash flow £m 2020 2019 ● Strong cash generated from operations (with adjusted free cash flow of of £40m) reflecting Adjusted cash generated before highly cash-generative business and continued focus on working capital cycle which has not to changes in working capital and 43.1 23.9 date seen any signific
Slide 13: Impact of Covid-19
Impact of Covid-19 Digital revenues Shop closures Postponement & Impact on remain in growth impact magazine cancellation of working capital sales events ● Since start of March ● Magazine sales in shops (7% of ● Events (7% of FY19 full year ● Additional £1.8m bad debt audience growth has FY20 H1 reve
Slide 14: Digital revenues remain in growth
Digital revenues remain in growth ● Audience has been continuing growth trajectory for a number of years but since March we have seen audience spike to new levels ● We remain confident in outlook for digital revenue even with an expected normalisation of audience in H2 ● Digital revenue performing we
Slide 15: Financial outlook: Headroom on debt facilities
Financial outlook Headroom on debt facilities ● Significant headroom on current facilities ● Opex costs including TI of £45m per quarter of which 30% is in the US. ● Some cost reduction activities taken with ability to reduce further if required ● Ongoing review of activities and corporate overheads
Slide 16: Financial review summary
Financial review summary Adjusted diluted EPS Completion of Barcroft £30m revolving credit Highly cash generative up 60% to 32.9p per acquisition in facility agreed, to with strong free cash share (2019: 20.5p per November and TI maintain growth flows of £40.0m (2019: share) and reported Media acquis
Slide 17: Strategy & Business update
Zillah Byng-Thorne Strategy & Business update 17
Slide 18: Our strategy
Our strategy Future is a global platform for specialist media driven by technology with diversified revenue streams. We create loyal communities and fans of our brands by giving them a place they want to spend their time and meet their needs. We diversify our monetisation models to create significant
Slide 19: Execution of strategy: four core pillars
Execution of strategy: Underpinned by four core pillars, delivering sustainable growth Grow our existing Ongoing Delivering operating Continued brands and audiences diversification leverage investment Horizon One: Extension into new categories on 60% of revenue now delivered Scalable, lean and robust
Slide 20: Diversified verticals
Diversified verticals Future PASSION Future LIVING B2B Tech Specialist Women’s Lifestyle B2B Pro Photography & Design TV & Film Media & AV Technology Music Country Lifestyle Education Sports Lifestyle Tech & Travel Media Entertainment Games & Entertaining Real Life Music Homes & Gardens SmartBrief Kn
Slide 21: Diversified revenues
Diversified revenues 3% Service Success of diversification strategy: and Others 5% Events ten significant revenue streams at 6% different stages of maturity. Membership & Subs 27% eCommerce 6% & Lead Gen Print Advertising 80% of revenue now outside of print +68% eCommerce organic growth Content 7% News
Slide 22: Group performance: Content investment
Group performance: Content investment ● Continued investment in new content assets year on year to ensure growing 28% CAGR library of evergreen content ● Some cost synergies realised through integration of acquisitions, however, reinvested in editorial ● New areas of growth include the new site laun
Slide 23: Today's Most Valuable Content
Today’s Most Valuable Content Revenue content compounds over time. Content paid for in prior years continues to deliver revenue in 2020. 23
Slide 24: Ongoing growth in audience; market leading positions
Ongoing growth in audience; market leading positions 253m Online users* +26% YoY 2020 H1 79m Live Science online users* +294% YoY March 2020 7 # 1 vertical in market, with 18 no.1 brands Almost half of all male US internet users each month visit a Future brand** 24 *Source: Google Analytics **Source
Slide 25: Audience case study: Tom's Guide & GamesRadar
Audience case study : Tom’s Guide & GamesRadar 70% CAGR 28% CAGR Acquired Tom’s Guide in Sept 2018 GamesRadar 10+ years old Migrated to Vanilla platform in July 2019 Multiple specialist tribes (Playstation, Xbox, Nintendo etc) under one online brand Launched Future editorial model and best practice
Slide 26: Technology enabled
Technology enabled Our flexible and scalable tech stack supports Assets Websites Monetisation organic growth and acquisitions. Freelance Staff Tech Services 8 sites migrated to Vanilla Ecom Tech: platform in last 6 months Hawk Site speed increased 19% Content Ad Tech: Commissioning Hybrid While new m
Slide 27: B2B diversification and innovation
B2B diversification and innovation Significantly strengthened B2B operations with acquisition of SmartBrief - adding new email marketing revenue stream Diversification of audience: B2B now makes up 16% of total revenues Two new launches - Tech & Learning University and Next TV Adapting to changing mark
Slide 28: SmartBrief and Barcroft
● Our recent acquisitions had a strong start to the year, proving resilient through current crisis. ● Increasing the diversification of revenue, c.13% now off-platform ● Acquisitions now fully integrated; work on delivering added value underway SmartBrief Barcroft acquired Jul 19 acquired Nov 19 Tech
Slide 29: TI Media: Strategy
TI Media : Strategy Country Homes & Women’s Lifestyle Tech Transaction Recap Sports TV & Film Lifestyle Gardens Lifestyle & Travel Acquisition completed 20 April 2020. Market-leading brands - trust and heritage spanning over 160 years Significant scale as TI Media engages with 23% of all UK adults, 3
Slide 30: TI Media: Alignment
TI Media : Alignment draft People Processes Systems New planned leadership team Creation of Future University to Reviewed Editorial systems with aim planned to include 4 TI executives enable online sharing of best of creating best of breed approach to practice content creation Significant comms from
Slide 31: TI Media: Execution
TI Media : Execution Significant progress has been made in the integration planning, enabling a fast start Phase 1 - Integration Detailed plans developed to migrate to common back office systems, majority complete by end of Dec 2020. Draft - final details still being validated Work nearly complete to v
Slide 32: Execution of 2020 strategy
Execution of 2020 strategy Underpinned by four core pillars, delivering sustainable growth Protect the core, grow Ongoing diversification Operating leverage existing brands & audiences Horizon One: A clearly defined strategy for each Launching multiple brands within Implementation of Future Today for
Slide 33: Looking forward
Looking forward Business performed well in Diversified model proven 2020 H1 - ongoing momentum, successful during downturn while continuing to invest in longer term initiatives Working with colleagues to Expectations for full year profit maintain productivity, with remain unchanged; excited considerat
Slide 34: Appendix
Appendix 34
Slide 35: Our World
Our World Future Passions Future Living 129m 5m 33m 44m audience reach audience reach audience reach audience reach #1 publisher in #1 home T3 online users 9.8m YouTube tech online in UK renovations print up 76% YoY subs, up 79% and US publisher in UK MoM Mar-20 TechRadar online Real Homes online us
Slide 36: Audience
Audience Top 10 Future Sites - Online Users (Millions) All Future Sites - Online Users by Geography (Millions) 2019 H1 2020 H1 YoY % 2019 H1 2020 H1 YoY % (Oct 18-Mar 19 (Oct 18-Mar 19 (Oct 18-Mar 19 (Oct 18-Mar 19 Mthly Avg) Mthly Avg) Mthly Avg) Mthly Avg) TechRadar 30.9 42.3 +37% US & Canada 100.
Slide 37: Acceleration of strategy via M&A
Acceleration of strategy via M&A The right acquisition for Future is one we believe can uniquely create additional value while accelerating our strategy Ability to add value Clear criteria Speedy integration Use data and analytics to identify Clear investment criteria focussing Integrate rapidly and
Slide 38: Our World: team hubs and locations
Our World We go where our audiences are, which enables us to recruit talent around team hubs. Only those skills that need to be in market are local with centralised centres of excellence. Centralised services are located in the lowest cost location with the UK United Kingdom Central services: France
Slide 39: Adoption of IFRS 16 Leases
Adoption of IFRS 16 Leases Balance sheet impact on transition The Group has adopted IFRS 16 Leases from 1 October 2019, resulting in the recognition on balance sheet of assets and £m 2020 liabilities relating to property leases previously accounted Right-of-use assets 13.5 for as operating leases. F
Slide 40: Exceptional items and adjusted free cash flow reconciliation
Exceptional items (P&L) Exceptional P&L items relate to the following; ● Acquisitions of Barcroft Studios and TI Media £m 2020 2019 (£4.3m); Premium listing costs - 0.8 ● The integration of SmartBrief and other costs Acquisition and integration related costs 4.6 1.5 relating to historic acquisition
Slide 41: Sources & Definitions
Sources & Definitions Organic ● Organic growth is defined as year-on-year growth for the like-for-like portfolio of brands and excludes all acquisitions made during FY19 and FY20, but includes any closed titles ● Acquisitions included in organic are: FY18 acquisitions Haymarket assets, NewBay and Purc