Slide 1: Final Results – April 2nd, 2019
FINAL RESULTS – APRIL 2ND, 2019
Slide 2: Financial Summary
FINANCIAL SUMMARY • Revenue up 14% to £224.1m (2018: £196.8m) • Organic* revenue growth of 6.4% (UK organic growth of 15.5%) • Adjusted** EBITDA up 21% to £41.7m (2018: £34.4m) • Adjusted operating profit margin up to 16.5% from 15.3% • Adjusted pre tax profits up 23% to £36.0m (2018: £29.3m) • Divi
Slide 3: Corporate Progress
CORPORATE PROGRESS • Investments include the acquisitions of Brandwidth, Technical, Activate and Planning-inc • UK net revenues grew organically by 15.5% to £83.5m with margin up to 24.5% thanks to acquisitions and operational improvements • US net revenues grew organically by 2.8% to £117.9m with m
Slide 4: Our Agencies
OUR AGENCIES • To aid shareholder’s understanding of the Group’s performance, we have enhanced our disclosure to include reporting by operational segment 4 www.next15.com
Slide 5: Our Business
OUR BUSINESS Brand Strategy Market Research App Development Content Marketing Brand Tracking Software Platforms Public Relations Data Science Community Management Financial Comms Campaign Analysis Digital Strategy Corporate Comms Behavioral Analytics 5 www.next15.com
Slide 6: Our Five Year Ambitions
OUR FIVE YEAR AMBITIONS • In the last five years we have grown the net revenues from £109.2m to £224.1m. We anticipate similar growth over the next five years • Make all our companies best in class • Create new $100m innovation business 6 www.next15.com
Slide 7: Financials
FINANCIALS www.next15.com
Slide 8: Income Statement – Adj. Results
INCOME STATEMENT – ADJ. RESULTS £M 2019 2018 GROWTH % Net revenue 224.1 196.8 14% EBITDA 41.7 34.4 21% Operating profit 37.0 30.0 23% Operating margin 16.5% 15.3% PBT 36.0 29.3 23% Tax (7.2) (5.9) Minorities (0.6) (0.6) Retained profit 28.2 22.8 24% Diluted EPS (p) 33.1 27.8 19% Dividend 7.56 6.30 2
Slide 9: Operational Breakdown
OPERATIONAL BREAKDOWN Operation Net Organic Operating Margin Margin Comments revenue growth Profit 2019 2018 2019 £M £M BRAND 133.2 0.1% 29.6 22.2% 20.4% Excluding Text 100 MARKETING organic growth is 3.9% and margin is 26.2% DATA AND 23.2 30.6% 7.2 30.9% 25.3% ANALYTICS CREATIVE 67.7 17.0% 9.5 14.0
Slide 10: Cash Flow Statement
CASH FLOW STATEMENT £M 2019 2018 Inflow from op activities 37.2 33.1 Working capital 1.2 (4.2) Net inflow from operations 38.4 28.9 Tax (6.2) (4.3) Net capex (8.0) (4.2) Acquisitions (29.6) (15.4) Net interest and dividends paid (7.5) (6.4) Net proceeds from share placing 19.5 - Exchange gain on net
Slide 11: Cash Commitments
CASH COMMITMENTS 31 Jan 2019 £M FY 2020 6.3 FY 2021 8.9 FY 2022 4.5 FY 2023 4.3 FY 2024 2.6 FY 2025 4.2 Total 30.8 11 www.next15.com
Slide 12: Outlook
OUTLOOK • The Group continues to focus on building its data, analytics and technology capabilities and ensuring these are embedded throughout the Group • Current trading is in line with management’s expectations and the Group is confident of another significant increase in profitability 12 www.next1
Slide 13: Conclusion
CONCLUSION Summary of the results: • Net revenue up 14% to £224.1m • Organic revenue growth of 6.4% • Adjusted EBITDA up 21% at £41.7m • Adjusted pre tax profits up 23% to £36.0m • Dividend up 20% to 7.56p • Adjusted EPS increase of 19% to 33.1p 13 www.next15.com
Slide 14: Appendices
APPENDICES www.next15.com
Slide 15: Management Team
MANAGEMENT TEAM 15 www.next15.com
Slide 16: Top Customers
TOP 20 CUSTOMERS Google | amazoncom Ea _ Schneider TESCO ABInBev @eElectric -_ a a oo JUST INTUIT RCI Sige AIVIERICAN WZ Uf SAMSUNG ne St ain UST MACALLAN " NEXT15
Slide 17: FY19 Revenue Bridge
FY19 REVENUE BRIDGE 230 225 220 215 £m 210 205 200 195 190 Year to 31 January Discontinued Organic growth Acquisitions Foreign exchange Year to 31 January 2018 2019 17 www.next15.com
Slide 18: Client Analysis FY19
CLIENT ANALYSIS FY19 £112k 57 32% CLIENTS GENERATING OVER SHARE OF GROUP NET REVENUE PER EMPLOYEE $1M IN NET REVENUES 2019 REVENUES FROM TOP 20 CLIENTS 22% INCREASE IN 14 90% NET REVENUES TOP 20 CLIENTS IN 2019 IN CLIENT NUMBERS GENERATED IN US TOP 20 CLIENTS 2018 (INCL ACQ) AND UK 12 MONTHS TO JAN
Slide 19: Client Analysis FY18
CLIENT ANALYSIS FY18 £111k 44 32% REVENUE PER EMPLOYEE CLIENTS GENERATING OVER SHARE OF GROUP NET $1M IN NET REVENUES 2018 REVENUES FROM TOP 20 CLIENTS 5% INCREASE IN 16 89% NET REVENUES TOP 20 CLIENTS IN 2018 IN CLIENT NUMBERS GENERATED IN US TOP 20 CLIENTS 2017 (INCL ACQ) AND UK 12 MONTHS TO JAN 2
Slide 20: Adjustments Breakdown
ADJUSTMENTS BREAKDOWN £M 2019 2018 Adjusted pre tax profits 36.0 29.3 Restructuring (4.4) (1.7) Office moves (0.2) (0.5) Deal costs (0.6) (0.5) Share based payments (2.1) (3.1) Unwinding of discount and change in estimate (0.9) (3.2) of earnout liabilities Amortisation of acquired intangibles (9.0)
Slide 21: Regional Breakdown
REGIONAL BREAKDOWN Regions Net Organic Operating Margin Margin Comments revenue growth Profit 2019 2018 2019 £M £M US 117.9 2.8% 22.1 18.7% 20.0% Excluding Text 100 organic growth is 6.2% and margin is 19.9% UK 83.5 15.5% 20.5 24.5% 22.3% APAC 13.9 (2.1%) 2.2 15.9% 13.6% EMEA 8.8 7.3% 1.5 17.2% 9.6%
Slide 22: Balance Sheet Summary
BALANCE SHEET SUMMARY £M 31 January 2019 31 January 2018 Intangible assets 126.1 94.8 Non-current assets 29.0 25.3 Current assets 87.4 74.6 Non-current liabilities (54.4) (58.8) Current liabilities (76.6) (59.6) Net assets 111.5 76.3 Share capital 2.1 1.9 Reserves 110.5 75.0 Minorities (1.1) (0.6) T
Slide 23: Operational Breakdown (2018)
OPERATIONAL BREAKDOWN (2018) Operation Net Organic Operating Margin Comments revenue growth Profit 2018 2018 £M £M BRAND 134.7 1.0% 27.5 20.4% MARKETING DATA AND 13.9 48.5% 3.5 25.3% ANALYTICS CREATIVE 48.2 12.2% 7.9 16.5% TECHNOLOGY HEAD OFFICE - - (8.9) - Total 196.8 5.2% 30.0 15.3% 23 www.next15.
Slide 24: Example of Organic Growth Post Acquisition
EXAMPLE OF ORGANIC GROWTH POST ACQUISITION • Publitek acquired in March 2016 • Since this date organic net revenue growth has been on average 8% 10 9 McBru acquired 8 January 2018 Technical acquired 7 Pinnacle July 2018 acquired 6 September 2016 £m 5 4 3 2 1 0 FY17 FY18 FY19 Net revenue Operating pr
Slide 25: Brandwidth
BRANDWIDTH • UK based digital innovation agency acquired in February 2018 • Clients include Toyota, Royal Caribbean, Citroen, Kia and Vodafone • Brings significant digital skills to the Group and exciting voice technology capabilities • Initial consideration of £6.2m based on a multiple of 5.5 on th
Slide 26: Technical
TECHNICAL • A specialist technical content and digital marketing business focused on the industrial engineering sector acquired in July 2018 which now trades as Publitek • Clients include National Instruments, HIMA and Atlas Copco and services them from offices in the UK, Germany and Singapore • Ini
Slide 27: Activate
ACTIVATE • A US based B2B demand generation specialist focused on technology clients acquired in November 2018 • Clients include IBM, Dell and VMWare • Initial consideration of $9m with a top-up payment due in 2019 of up to $2.25m dependent on performance in the 9 months post acquisition • There is
Slide 28: Planning-inc
PLANNING-INC • A UK based predictive analytics and data marketing business acquired in January 2019 • Clients include Argos, M&S, Halfords and Sony • Initial consideration of £6.3m with a top-up payment due based on 2018 performance • Further consideration is due in April 2021 and April 2023 based o