Next 15 Group Plc · LSE:NFG
Next 15 — H1 FY2021 Earnings Presentation
24 slides from Next 15's earnings presentation, Sep 29, 2020
Slide 1: Interim Results – September 29th, 2020
INTERIM RESULTS – SEPTEMBER 29TH, 2020
Slide 2: Covid & Post Covid
COVID & POST COVID • Impact • Opportunity • Learnings – Group’s strength in – Use health of balance sheet – Being purpose-driven matters B2B tech and digitally to increase pace of native product acquisitions while – This is the time to make offerings have maintaining low gearing meaningful improveme
Slide 3: Financial Summary
FINANCIAL SUMMARY • Net revenue up 6% to £126.2m (2019: £118.7m) • Adjusted* operating profit up 21% to £21.2m (2019: £17.5m) • Adjusted operating profit margin up to 16.8% from 14.7% • Adjusted pre tax profits up 20% to £20.7m (2019: £17.2m) • Diluted earnings per share increased by 14% to 17.4p (2
Slide 4: Corporate Progress
CORPORATE PROGRESS • Data and analytics now account for 19% of net revenues • Key client wins include Mont Blanc, EY Global Consulting and Block One • Investments include the acquisitions of CRE in July and Mach49 in August • Review of property portfolio in light of significant movement to more flex
Slide 5: Mach49 Acquisition
MACH49 ACQUISITION • Silicon Valley-based growth incubator for global businesses acquired in August 2020 • Becomes cornerstone of previously announced plan to create $100m revenue innovation business • Annual net revenues of approximately $13m • Clients include Schneider Electric, Pernod Ricard, TDK
Slide 6: CRE Acquisition
CRE ACQUISITION • Web optimisation (content and asset design) agency acquired in July 2020 • Opportunity to embed them into a large percentage of agency briefs • Annual net revenues of approximately £3.6m • Current and previous clients include Facebook, Google and Jamf 6 www.next15.com
Slide 7: Covid-19 Impact
COVID-19 IMPACT Restaurants & Hospitality 1% Other 5% Cars, Taxis, Motorcycles & Cruises 2% Alcohol 2% Charities, NGOs, Foundations, Trade Associations 2% Media & Entertainment 3% Government & Government • Sectors negatively impacted: Agencies 3% Software & IT services 40% Retail, Auto, Fashion/Beau
Slide 8: Our Agencies
OUR AGENCIES Brand Marketing Data and Analytics Creative Technology Net revenue: £69.3m Net revenue: £23.9m Net revenue: £33.0m Organic growth: (7.9)% Organic growth: 3.6% Organic growth: (9.5)% Operating profit: £15.9m Operating profit: £6.0m Operating profit: £4.2m 8 www.next15.com
Slide 9: Financials
FINANCIALS www.next15.com
Slide 10: Income Statement – Adj. Results
INCOME STATEMENT – ADJ. RESULTS £M H1 2021 H1 2020 GROWTH % Net revenue 126.2 118.7 6% Operating profit 21.2 17.5 21% Operating margin 16.8% 14.7% PBT 20.7 17.2 20% Tax (4.1) (3.4) Minorities (0.3) (0.3) Retained profit 16.3 13.5 21% Diluted EPS (p) 17.4 15.2 14% 10 www.next15.com
Slide 11: Adjustments Breakdown
ADJUSTMENTS BREAKDOWN £M H1 2021 H1 2020 Adjusted pre tax profits 20.7 17.2 Restructuring (2.0) (2.1) Property impairment (10.9) - Deal costs (0.2) (0.3) Share based payments (0.2) - Employment related acquisition payments (1.7) (2.8) Unwinding of discount and change in estimate (1.8) (3.7) of earno
Slide 12: Property Impairment Detail
PROPERTY IMPAIRMENT DETAIL FY21 expected FY22 expected Impairment net saving net saving Location £M £M £M LONDON 2.1 0.4 0.6 NEW YORK 4.7 0.7 1.2 SAN FRANCISCO 4.1 0.4 1.0 Total 10.9 1.5 2.8 12 www.next15.com
Slide 13: Operational Breakdown
OPERATIONAL BREAKDOWN Operation Net revenue Organic Operating Margin Margin H1 2021 growth/(decline) Profit H1 2021 H1 2020 £M £M BRAND 69.3 (7.9%) 15.9 22.9% 20.5% MARKETING DATA AND 23.9 3.6% 6.0 25.0% 27.5% ANALYTICS CREATIVE 33.0 (9.5%) 4.1 12.6% 9.6% TECHNOLOGY HEAD OFFICE - - (4.8) - - Total 1
Slide 14: Cash Flow Statement
CASH FLOW STATEMENT £M H1 2021 H1 2020 Inflow from op activities 25.8 20.7 Working capital 8.7 1.6 Net inflow from operations 34.5 22.3 Tax (3.0) (3.0) Net capex (2.1) (2.7) Acquisitions (18.4) (4.2) Net interest and dividends paid (1.1) (5.6) Net repayment of lease liabilities (5.8) (5.3) Exchange
Slide 15: Estimated Future Cash Payments
ESTIMATED FUTURE CASH PAYMENTS 31 Jul 2020 31 Jan 2020 £M £M FY 2021 1.3 16.3 FY 2022 9.3 8.5 FY 2023 10.0 9.6 FY 2024 6.5 6.8 FY 2025 6.5 5.7 FY 2026 1.9 2.0 Total 35.5 48.9 15 www.next15.com
Slide 16: Current Trading & Outlook
CURRENT TRADING & OUTLOOK • Group remains optimistic about trading as we enter second half of the financial year • Taking into account the continued good performance across the business and the property related savings, we are confident of modestly exceeding market expectations for the year • Contin
Slide 17: Appendices
APPENDICES www.next15.com
Slide 18: Management Team
MANAGEMENT TEAM Richard Eyre CBE Tim Dyson Peter Harris (Chairman) (CEO) (CFO) Richard was appointed in 2011 and has Tim joined the Group in 1984 and Peter joined the Group as its CFO in 43 years’ experience across the media became CEO in 1992. As an early 2013. Peter’s financial experience spans an
Slide 19: Top Customers
TOP 20 CUSTOMERS 19 www.next15.com
Slide 20: Our Business
OUR BUSINESS Brand Strategy Lead Generation App Development Content Marketing Market Research Software Platforms Public Relations Brand Tracking Community Management Financial Comms Data Science Digital Strategy Corporate Comms Campaign Analysis Innovation Consulting Brand Marketing (55%) Data and A
Slide 21: H1 2021 Revenue Bridge
H1 2021 REVENUE BRIDGE 130 126.2 128 +1.8 +13.8 1.4% +6.3% 126 +11.7% 124 122 (0.3) 120 (0.2%) (7.8) 118.7 (6.6%) 118 116 114 112 110 Year to 31 July 2019 Discontinued Organic growth Acquisitions Foreign exchange Year to 31 July 2020 21 www.next15.com
Slide 22: Client Analysis H1 FY21
CLIENT ANALYSIS H1 FY21 £66k 63 33% CLIENTS GENERATING OVER SHARE OF GROUP NET REVENUE PER EMPLOYEE $0.5M IN NET REVENUES H1 2021 REVENUES FROM TOP 20 CLIENTS (H1 FY20 - £60k) (H1 FY20 – 58) (H1 FY20 – 31%) 0% 12 91% CHANGE IN NET REVENUES TOP 20 CLIENTS IN H1 2021 IN CLIENT NUMBERS GENERATED IN US
Slide 23: Regional Breakdown
REGIONAL BREAKDOWN Regions Net revenue Organic Operating Margin Margin H1 2021 (decline)/ Profit H1 2021 H1 2020 £M growth £M US 68.7 (2.6%) 15.0 21.9% 18.8% UK 46.8 (11.9%) 9.0 19.1% 19.4% APAC 6.5 (6.2%) 1.1 17.7% 11.8% EMEA 4.2 (3.3%) 0.9 20.5% 17.2% HEAD - - (4.8) - - OFFICE Total 126.2 (6.6%) 2
Slide 24: Balance Sheet Summary
BALANCE SHEET SUMMARY £M 31 July 2020 31 July 2019 Intangible assets 157.3 132.3 Non-current assets 54.7 72.1 Current assets 100.8 99.1 Non-current liabilities (97.7) (92.6) Current liabilities (99.6) (100.0) Net assets 115.5 110.9 Share capital 2.3 2.1 Reserves 113.6 109.5 Minorities (0.4) (0.7) To