Forrester Research, Inc. · NASDAQ:FORR
Forrester Research — Investor Day (February 2005)
91 slides from Forrester Research's investor day presentation, Feb 11, 2005
Slide 1: Slide 1
Slide 2: Forrester Safe Harbor
Forrester Safe Harbor This presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. These projections or statements are only predictions. Actual events or results may differ materially from those in the proje
Slide 3: Forrester Investor Day: George F. Colony, CEO
Forrester Investor Day George F. Colony CEO
Slide 4: Forrester's History
Forrester's History Founded in 1983 IPO in 1996 Acquired Fletcher in the UK in 1999 Acquired Forit GmbH in Germany in 2000 2:1 Stock Split in February, 2000 Secondary Offering in February, 2000 Acquired Giga Information Group in March, 2003 Acquired Giga Group in France in December, 2003
Slide 5: Our values/culture
Our values/culture: 4C2Q1S + MC Client Communication Creativity Consistency Quality Quickness Service Multiplicative Collaboration
Slide 6: Vision, Purpose, Mission
Vision, Purpose, Mission FORRESTER
Slide 7: Vision
Vision (Our view of the outside world) Technology changes everything
Slide 8: Purpose
Purpose (Why we exist) Forrester provides powerful ideas and objective guidance to help clients thrive on technology change
Slide 9: Mission
Mission (Our goals) More $1B+ companies More technology suppliers ...driven by our efforts to... Improve client service Develop Forrester people Engage the whole client Innovate and create bold ideas Globalize profitably
Slide 10: The Forrester product portfolio
The Forrester product portfolio Research WholeView 2(tm) Inquiry Data Custom Consumer Research Ultimate Consumer Panel Technographics(r) Data & Services Omnibus Consulting TEI Project Consulting Advisory Community Forrester Oval Program(tm) Events ForrTels(tm) Boot Camps, Workshops
Slide 11: Globalization
Globalization Forrester Americas Forrester EMEA Forrester Asia Pacific
Slide 12: RDCC + Globalization will enable the company to accelerate growth
RDCC + Globalization will enable the company to accelerate growth... More companies More countries More (bigger) budgets More client engagement
Slide 13: The portfolio approach expands our opportunity
The portfolio approach expands our opportunity... $1.2 B Boards: $1 B Events: $8.4 B $140 B $18.5 B
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Slide 15: Research & Consulting: Neil Bradford
Research & Consulting Neil Bradford President, Americas
Slide 16: Forrester Americas
Forrester Americas is ... 73% of Forrester revenues USA (94%), Canada (5%), Latin America (1%) 400 employees Robust IT spending growth in 2005: 7%
Slide 17: Our target markets and sales strategy
Our target markets and sales strategy User Vendor <$500 M $500 M To $1B+ $1B+
Slide 18: Client-focused products & services
Client-focused products & services Research WholeView 2(tm) Inquiry Consulting TEI Project Consulting Advisory
Slide 19: Research drives everything
Research drives everything Forrester's intellectual capital, aka "molten core" Research methodologies Inquiry TechRankings Interviews Surveys Events Oval & Councils Consulting WholeView2 Data
Slide 20: Research: 2005 plans
Research: 2005 plans Add expertise New Government focus area 14 new analysts in the past 6 months 10+ more in the next 6 months Enhance our flagship WholeView 2 offering More primary demand-side surveys New vendor evaluation platform Relaunch of Forrester Wave 150 Client Choice reports
Slide 21: Research report examples
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Slide 22: Retailer Spending Aligns With Key Industry Trends
Retailer Spending Aligns With Key Industry Trends
Slide 23: Leading Managed IP VPN Services, Q3:04
Leading Managed IP VPN Services, Q3:04 From Evaluating Managed IP VPN Services, September 2004
Slide 24: Client Choice report example
0-0 HAG LKeCO B- Questions or Comments? Submit an Analyst inquiry > Give Feedback » Request Reprint » Printer-friendly HTML > eriefease » Bookmark This Page » Email Document a-oe a indesoorch a TECH CHOICES Client Choice You Vote, We Wee January 18, 2005 The Enterprise Content Management Dilemma: Po
Slide 25: Prospects for Research
Prospects for Research Bedrock of all our client relationships 10% Market Share Long term growth rate: 5-10% Key future initiatives Enterprise-wide subscriptions More industries, more buyers
Slide 26: Consulting: 2005 plans
Consulting: 2005 plans Custom research work for clients Done by analysts No implementation, no on-site Forrester team $5K-$500K projects Builds significant relationships with key clients
Slide 27: Prospects for Consulting
Prospects for Consulting Key element of large client relationships <1% Market Share Long term growth rate: 10-15% Key future initiatives Fund more analysts Larger, repeatable projects (sub $1M)
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Slide 29: Data: Michael Gazala
Data Michael Gazala Senior Vice President, Forrester Data
Slide 30: Data
Data Data represents 6% of 2004 revenues Three consumer Data products Technographics Data & Services (TD&S) Custom Consumer Research (CCR) Forrester's Ultimate Consumer Panel Our market share is still small and our opportunity is very large
Slide 31: Consumer Technographics
Consumer Technographics The largest and longest-running research effort to study consumers' use of technology More than 1 million US Households surveyed since 1997 Approximately 150,000 surveys to be completed in 2005 Gives consumer-focused companies access to a rich and deep reservoir of data to ma
Slide 32: Custom Consumer Research
Custom Consumer Research Techno is syndicated consumer insight, CCR is customized Custom research means fielding surveys designed and executed on behalf of clients who want data analyzed by Forrester experts Survey expertise Technology and Industry Strategy Custom Consumer
Slide 33: How does CCR help clients?
How does CCR help clients? CCR works on a variety of projects including segmentation, customer retention/acquisition, brand loyalty, product development, benchmarking, and market sizing Case study: Marketing High-End Televisions Client wanted us to help them plan their introduction of Plasma televis
Slide 34: What is the Ultimate Consumer Panel?
What is the Ultimate Consumer Panel? A nationally representative panel of US households from which we capture three streams of data: Regular surveys across a range of topics Web site use and online purchasing behavior Monthly credit card and bank statements
Slide 35: Ultimate is a nationally-representative panel
Ultimate is a nationally-representative panel Closely mirrors US Census distribution on household income Tend to under- represent older, less- educated households (before demographic weighting) Panelists' attitudes are not substantially different from non- panelists Under $30,000 < $45,000 < $55,000
Slide 36: What is the Ultimate Consumer Panel?
What is the Ultimate Consumer Panel? A nationally representative panel of US households from which we capture three streams of data: Regular surveys across a range of topics Web site use and online purchasing behavior Monthly credit card and bank statements A faster, more cost effective way of analy
Slide 37: Discover's 2004 dining out promotion
Discover's 2004 "dining out" promotion Cardholders were offered "up to 10%" in cash back bonus awards for purchases made at restaurants in September-October 2004 Promotion followed a similar campaign promoting grocery store purchases conducted in Q2 2004 To qualify cardholders had to register with D
Slide 38: A slight lift in Discover use at restaurants
A slight lift in Discover use at restaurants Jul Aug Sep Oct Nov Dec 0.108349676 0.120247361 0.144087915 0.117304491 0.113770053 0.113770053 Percent of Discover accounts with any restaurant purchases
Slide 39: But spending increase is modest and short-term
But spending increase is modest and short-term Jul Aug Sep Oct Nov Dec 46 50 58 56 41 41 Average monthly restaurant spending with Discover cards * * Among accounts with any restaurant purchases
Slide 40: Data
Data Data currently represents 9% of Revenues. Three consumer Data products Technographics Data & Services (TD&S) Custom Consumer Research (CCR) Forrester's Ultimate Consumer Panel Our market share is still small and our opportunity is very large
Slide 41: Data - Market Share & Opportunity
Data - Market Share & Opportunity Our target market: Consumer market research According to Outsell, a $18.5 billion market We have plenty of headroom to grow Competition comes in three categories: Consumer panel organizations like TNS/NFO and Harris Interactive Full-service market research firms lik
Slide 42: Data - Market Share & Opportunity
Data - Market Share & Opportunity 2005 plan calls for 50% growth Technographics: Enhance offering and increase price CCR: Add advisors and create defined tool sets Ultimate: Grow panel, add credit card firms, launch banking offering and plan for brokerage offering in 2006
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Slide 44: Community: Charles Rutstein
Community Charles Rutstein Vice President, Forrester Community
Slide 45: Community
Community Community consists of the Forrester Oval Program and Forrester Events An important, growing (and leveraged!) part of Forrester's business 9% of revenue in 2004 10-12% of revenue in 2005
Slide 46: Oval Program overview
Oval Program overview Oval memberships are available to select senior IT and Marketing executives at $1B+ companies worldwide Ovals are aimed at specific cross-industry job functions Membership includes three key elements: Exclusive member-driven research Peer network and meetings Dedicated advisors
Slide 47: Our current Oval footprint
Our current Oval footprint Currently 8 Ovals for 3 key cohorts (IT, Mkt., Vendors)
Slide 48: Oval go to market strategy
Oval go to market strategy Sold through direct sales force 39% of reps sold an Oval in 2003 57% of reps sold an Oval in 2004 Model drives sales productivity and portfolio sales Offers a targeted approach for new business sales reps Client reps use Oval to drive internal referrals for additional Oval
Slide 49: Oval differentiation and competition
Oval differentiation and competition Differentiation: Ovals are built around hard-to-replicate assets like business/consumer Technographics and Inquiry Advantage In addition, we differentiate with a high level of service and intimacy. Competition includes: Gartner's EXP program - clients tell us we
Slide 50: Oval market opportunity
Oval market opportunity Market opportunity 6-8+ titles per target company today 12-16,000 potential members (before launching any new Ovals) Current market share estimates suggest huge upside Approx. 4-5% of target CIOs and IT Executives Approx. 12-15% of target Analyst Relations Executives Approx.
Slide 51: 2005 Oval Plan
2005 Oval Plan Very significant year over year revenue growth 650+ Oval members by the end of 2005, up from 443 at year-end 2004 10-12 Ovals by the end of 2005, up from eight Leverage Research, Data & Consulting assets
Slide 52: Events overview
Events overview Exclusive meetings for senior executives featuring key research themes, expert speakers and peer networking opportunities In 2005 - six events in North America and three in Europe
Slide 53: Why events?
Why events? Proven marketing tool for prospects, cost effective value-add for existing clients Drive profit through alignment of Oval member meetings and key events Gives Sales opportunity to fast-track new client acquisition and enrichment High correlation to renewal
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Slide 55: EMEA Operating Group: Robert Davidson
EMEA Operating Group Robert Davidson President, EMEA
Slide 56: Forrester EMEA
Forrester EMEA
Slide 57: 2004 Market Share & Retention
2004 Market Share & Retention 45% of our 400+ clients are $1B+ companies Overall share of 1B+ in EU is 9.4% But varies by country Client retention increased to 73%
Slide 58: The key EMEA drivers for 2005
The key EMEA drivers for 2005 Growth Differentiation Platform
Slide 59: Expanding throughout EMEA region
Expanding throughout EMEA region Continued focus on UK, France and Germany as major markets Expanding Sales in Benelux, Nordics and Italy Investing in new geographic markets in Central and Eastern Europe, like: Poland, Hungary, Czech Middle East and Africa: Israel, SAF and UAE
Slide 60: Progress on building out the portfolio
Progress on building out the portfolio Continued focus on growing Research Data - continued expansion in 2005 Consulting grows Strong push into Oval in 2005 Events remain stable and profitable
Slide 61: The key EMEA drivers for 2005
The key EMEA drivers for 2005 Growth Differentiation Platform
Slide 62: The key EMEA drivers for 2005
The key EMEA drivers for 2005 Growth Differentiation Platform
Slide 63: The EMEA structure is built for growth
The EMEA structure is built for growth Full service organization Research - adding 12 analysts in 2005 Sales - stable and distributed
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Slide 65: Asia Pacific Operating Group: Charlie Chang
Asia Pacific Operating Group Charlie Chang President, Forrester Asia Pacific
Slide 66: Territory
Territory Australia & New Zealand ASEAN Greater China India Japan Korea
Slide 67: Market Opportunity
Market Opportunity Region Japan India Australia Korea Greater China ASEAN GDP (2003) $4.3 T $600 B $520 B $605 B $1.85 T $670 B Economic Growth +2.6% +6.6% +3% +4.6% +9.5% +6% Population 127 M 1.1 B 20 M 48 M 1.3 B > 500 M $500M+ Enterprises > 1,000 > 60 > 130 > 170 > 230 > 100 Key Industry Vertical
Slide 68: Plans for 2005 & Beyond
Plans for 2005 & Beyond 2005 Focus sales on $500M+ enterprises Bolster key markets (Japan, Australia, India) Deploy marketing (Japan, Australia, India) Initiate local survey-based research Develop partnerships & alliances Beyond Continued execution of above initiatives Additional focus on Greater Ch
Slide 69: Summary
Summary Super-Sized Market Aggregate GDP: $8.5 trillion Population: 3 billion, with rapidly growing incomes, and emerging middle class $500 M+ enterprises: Over 1,800 Business Opportunities IT spending increasing by more than 10% yearly - double the global average. Only a small fraction of the large
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Slide 71: Balance Sheet
Balance Sheet All financial data in these slides are in millions unless otherwise indicated
Slide 72: GAAP to Pro forma reconciliation
GAAP to Pro forma reconciliation Forrester believes that pro forma financial results provide investors with consistent and comparable information to aid in the understanding of Forrester's ongoing business. Our pro forma results exclude items listed above as well as their related tax effects. Pro fo
Slide 73: Pro forma Income Statement
Pro forma Income Statement 2005 Pro forma Guidance: Revenue $148 - $153M Operating Margin 12% - 14% EPS $.62 - $.67
Slide 74: Revenue
Revenue Total revenues 2002 96.9 2003 126 2004 138.5 2005(P) 151 2005 Revenue guidance: $148M - $153M $148.0 - $153.0
Slide 75: Revenue % by Product
Revenue % by Product FoRReSTER
Slide 76: Revenue by Geography
Revenue by Geography Americas 73% EMEA 23% AP 4%
Slide 77: Pro forma Operating Income and Margin
Pro forma Operating Income and Margin Operating Income 1999 14.6 2000 27.1 2001 23.7 2002 11 2003 14 2004 16.9 2005(P) 19 12% 11% 12% 12-14% 2005 Pro forma margin guidance: 12% - 14% $18.0 - $21.0
Slide 78: Pro forma Net Income & EPS
Pro forma Net Income & EPS $MM 1999 11.6 2000 21.6 2001 21.3 2002 11.6 2003 11.7 2004 12.8 2005(P) 14 $0.50 $0.51 $0.57 $0.62-0.67 Net Income 2005 Pro forma EPS guidance: $0.62 - $0.67 $14.0 - $15.0
Slide 79: Cash flows from operations
Cash flows from operations $MM 1999 31.9 2000 70 2001 28.7 2002 5.6 2003 4.1 2004 18 2005 (P) 22.5 $20.0 - $25.0
Slide 80: Client Companies and Retention
Client Cos 12 Mo. Client Ret. 12/31/2000 2378 0.74 3/31/2001 55.2 86 6/30/2001 39.9 68 9/30/2001 22.5 91 12/31/2001 1542 0.51 3/31/2002 28.7 79 6/30/2002 20.456 62 9/30/2002 17.229 77 12/31/2002 1125 0.57 3/31/2003 1788 0.59 6/30/2003 1777 0.6 9/30/2003 1763 0.62 12/31/2003 1812 0.66 3/31/2004 1806
Slide 81: AV and $ Retention
AV 12 Mo. $ Ret. 12/31/2000 187.8 0.81 3/31/2001 55.2 86 6/30/2001 39.9 68 9/30/2001 22.5 91 12/31/2001 116.2 0.63 3/31/2002 28.7 79 6/30/2002 20.456 62 9/30/2002 17.229 77 12/31/2002 78.1 0.71 3/31/2003 124.1 0.73 6/30/2003 116 0.74 9/30/2003 118 0.73 12/31/2003 126.3 0.78 3/31/2004 120.747 0.83 6/
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Slide 83: IT Spending Patterns and Forrester's Research Agenda
IT Spending Patterns and Forrester's Research Agenda Christopher Mines Senior Vice President North American Research
Slide 84: Theme
Theme The Tech economy shows modest improvement into 2008 with plenty of investment and uncertainty to capitalize on.
Slide 85: The tech economy is in a period of refinement and digestion
The tech economy is in a period of refinement and digestion 0% 1% 2% 3% 4% 5% 6% Innovation & Growth Refinement & Digestion Mainframe computers Innovation & Growth Refinement & Digestion Personal computers Networked computing - enterprise applications and Internet Innovation & Growth Refinement & Di
Slide 86: But IT spending and confidence are on the rise
But IT spending and confidence are on the rise We forecast 7% growth in U.S. IT budgets this year, up from 5% in 2004 From surveying 6,000+ IT executives, we found: CIO confidence has steadily risen over 4 quarters The average expected budget increase doubled from a year ago 40% will allocate more o
Slide 87: IT budget growth will double in 2005
IT budget growth will double in 2005 "How will your company's 2005 IT budget compare with its actual IT spend in 2004?" * S ou r c e: F o r r es t e r ' s Business T echno g r aphics(r) N o v ember 2003 No r th Ame r ican B enchma r k Study 39% 38% 42% 39% 42% 38% 40% 27% U tilities & t ele c ommuni
Slide 88: Slight shifts in IT execs' spending priorities
Slight shifts in IT execs' spending priorities "Which of the following initiatives are likely to be one of your IT organization's major themes for 2005?" 30% 35% 27% 36% 29% 23% 28% 23% 23% 22% 12% 6% 6% 29% 20% 27% 18% 16% 19% 9% 10% 7% 6% 7% 3% 2% C r itical p r io r i t y P r io r i t y M o v e m
Slide 89: Heat-seeking for the near term
Heat-seeking for the near term Sarbanes-Oxley was hot ... it's now hotter Apps like Finance and SCM are number 1 on the CIO agenda ... Wave analyses help buyers create their shortlist Significant pops in demand for ECM, BI, and analytics. ... we have an entire team dedicated to this space! Interest
Slide 90: Agenda-setting for the longer term
Agenda-setting for the longer term Next-generation architecture A new IT architecture stack is emerging as the successor to client-server computing. It includes cheap, virtualized hardware resources (Organic IT) at the bottom, shared software and services (SOA) in the middle, and business intelligen
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