Slide 1: Future plc 2018 Results
Future plc 2018 Results 23rd November 2018
Slide 2: Contents
Contents ● Executive summary ● Our strategy ● Financial review ● Business update and strategy 2
Slide 3: Executive summary
Executive summary Another outstanding set of results... ...underpinned ○ by our strategy ● Group revenue up 48% year-on-year to £124.6m ● Diversification of revenue streams ongoing ● Organic revenue* growth of 11% driven by ● Investment in tech platform, back office and increasing scale and yield maxi
Slide 4: Our strategy
Our strategy Future is a technology-enabled global platform for specialist media with scalable, diversified brands. We create fans of our brands by giving them a place they want to spend their time and where they go to meet their needs. We continue to create loyal communities. We are expanding our gl
Slide 5: Financial Review
Financial Review Penny Ladkin-Brand Chief Financial Officer 5
Slide 6: Adjusted financial KPIs
Adjusted financial KPIs Revenue EBITDA EBITDA margin £124.6m £20.7m 17% (2017: £84.4m) (2017: £11.0m) (2017: 13%) EPS* growth Free cash flows Leverage** 32% £17.4m 0.86x (2017: 130%) (2017: £15.3m) (2017: 0.91x) Adjusted results are adjusted for share-based payments and related social security costs,
Slide 7: Financial highlights
Financial highlights £m 2018 2017 YoY Var Revenue 124.6 84.4 48% EBITDA 20.7 11.0 88% EBITDA margin 17% 13% 4pp Adjusted operating profit 18.5 8.9 108% Diluted EPS* 24.3p 18.4p 32% ● Revenue increased by 48%, reflecting strong growth Net debt (17.8) (10.0) 78% ● Organic revenue growth of 11% Free cash
Slide 8: Group performance
Group performance 2018 Media Revenue Mix Revenue Other £m 2018 2017 YoY Var eCommerce 95% organic Media 64.2 34.1 88% growth Digital display advertising 22% organic Magazine 60.4 50.3 20% growth Events Total 124.6 84.4 48% 12% organic growth £m 2018 2017 YoY Var UK 85.5 65.7 30% ● Organic revenue gr
Slide 9: Group performance
Group performance EBITDA ● Gross contribution from Media almost doubled £m 2018 2017 YoY Var year-on-year Media Division gross contribution 54.2 27.6 96% ● Adjusted EBITDA increased 88% reflecting the change in revenue mix with the increased scale GC margin 84% 81% 3pp of the Media division driving h
Slide 10: Group performance: Growth in EBITDA
Group performance Growth in EBITDA Group EBITDA £25.0 20% EBITDA EBITDA Margin 17% £20.0 £20.7 15% 13% EBITDA £’M £15.0 9% 10% £10.0 6% £11.0 5% £5.0 £5.2 £3.7 £0.0 0% ● Rapid EBITDA growth and 2015 2016 2017 2018 margin reflects growth of Media division 10
Slide 11: Group performance: Growth in cash generation
Group performance Growth in cash generation Free Cash flows £20.0 £15.0 £17.4 £15.3 Free Cash flow £’M £10.0 £5.0 £4.6 £0.0 (£4.3) (£5.0) (£10.0) 2015 2016 2017 2018 ● Highly cash-generative business results in strong free cash flows Adjusted free cash flow defined as operating cash flows excluding except
Slide 12: Cash flow
Cash flow £m 2018 2017 Cash from operating activities 19.8 17.1 ● Strong cash generated from operations (with adjusted cash conversion of 96%) reflecting highly cash-generative business Restructuring (5.1) (5.1) and continued focus on working capital cycle Tax (4.0) (1.4) ● Operating cash flows include
Slide 13: Low capital intensive business
Low capital intensive business Capex as a % of EBITDA £m 2018 2017 2016 2015 2014 ● Capex accounts for only 12% of EBITDA, demonstrating the low capital intensive Capex 2.4 1.8 1.9 2.0 2.6 nature of the business. The reduction in this ratio reflects the scalable nature of the EBITDA 20.7 11.0 5.2 3.7
Slide 14: 2018 in summary
2018 in summary ● Very positive year with EBITDA up 88% to £20.7m ● Strong organic revenue growth of 11% and a significant EBITDA margin increase to 17% was driven by a change in mix to more profitable Media activities ● We completed three significant in-year acquisitions. NewBay and Haymarket brands a
Slide 15: Business update & Strategy
Business update & Strategy Zillah Byng-Thorne Chief Executive Officer 15
Slide 16: How we execute our strategy
How we execute our strategy 4 underlying pillars Continued diversification 1 Diversifying our audience 2 Scalable Platform 3 4 Ongoing Investment of content monetisation New verticals ● Scalable, lean and robust ● Growth in events ● Buy and build where we ● Outdoor Leisure business can add value ● Fo
Slide 17: Where we operate
Where we operate Audience diversification through scalable sectors delivering diversified revenues 25.3M 83.3M 34.9M audience reach audience reach audience reach #1 print music making 837K 294K 217k #1 online in UK #1 in PC gaming in UK & US audience reach audience reach audience reach CONSUMER Media
Slide 18: Our markets
Our markets As a result of our global audiences we operate across three continents: Europe, with offices in the UK and France; the US; and Asia Pacific with an office in Australia. Below is a summary of our locations and audience United Kingdom Australia United States ELT Members: Zillah Byng-Thorne (C
Slide 19: Scalable brands
Scalable brands ● We have successfully grown global audience organically, diversifying the audience mix through partnerships ● Overall online users have grown from 49m to 142m in 2018, as a result of acquisitions and organic growth of 12% ● Significant US online users growth of 253%, compared to UK g
Slide 20: Technology enables scalable platforms
Technology enables scalable platforms Investment in core operating model creating a scalable business model An agile, lean, robust and scalable tech stack ● We now have 15 sites in total on our proprietary platform Vanilla having migrated four in 2018 and a further two in the start of current year a
Slide 21: Fans of our brands & loyal communities
Fans of our brands & loyal communities Photography vertical case study ● Launched Oct 2017 ● Launching The ● Future Fusion ● Also Young Video Show at The creative solutions Photographer of the partnership with Digital Camera World Growth Photography Show Year, 6.8k entries in in 2019 Canon 2018; 38k
Slide 22: Organic revenues
Organic revenues ● We have successfully grown our organic business via growing audiences and developing new formats delivering overall organic growth of 11% ● Our long-standing US business continues to grow organically, with revenue growth of 36% CAGR Future US organic media revenue growth +36% CAGR
Slide 23: Expanding our global reach
Expanding our global reach Online Users 142.4 ● Growth is both organic and through acquisition; 12% organic growth YoY in online users ● Our success is driven by market leadership in many of the markets we operate in 48.4 49.0 44.7 ○ We hold the number one position in the UK and the number two posit
Slide 24: Monetising our audience
Monetising our audience UK : +20% CAGR Media Revenue Per Online User* US: +33% CAGR ● Growing our global audience represents a real opportunity for further monetisation ● Strong growth in Media Revenue Per Online User (RPU) in both in the UK and US ● US digital display advertising RPU in 2018 increa
Slide 25: Diversified revenues
Diversified revenues ● We have increased the diversification of our revenue streams significantly over the last four years ● We have grown eCommerce from £400k a year in 2013 into a material revenue stream, accounting for around 15% of revenues ● This has offset the decline in newstrade, which is now o
Slide 26: Managing the portfolio
Managing the portfolio ● While a core part of our strategy is to grow the business through acquisitions, it is vital that we continue to review the strategic fit of the legacy assets and review the brands based on fit and profitability ● We have a systematic approach to evaluating and reviewing our bra
Slide 27: Ongoing investment in people
12 Ongoing investment Office locations in across 4 countries in people ● We introduced a new induction programme 4.8 Staff average ● We introduced the Living Wage. Outside of years service London we pay almost £1 an hour more than minimum wage. Inside London it's more than £2 ● Diversity and gender:
Slide 28: Strategic partnerships
Strategic partnerships TechRadar expansion 10 Territories covered via three new partnerships worth over £300k so far 4 Local language editions Year-on-year growth in online 110% audience to India edition. Now third largest TR site 24% Year-on-year growth in online audience to GCC edition 16% Growth
Slide 29: Acquisitions
Acquisitions ● It is a core part of our strategy to buy and build where we identify assets where we can add value ● We take a systematic approach to all acquisitions, resulting in all transactions to date being originated in-house Phase 0 Phase 1 Phase 2 Phase 3 Pre-purchase First 4 months 4-12 mont
Slide 30: Buy & build: Update for Home Interest
Buy & build Update for Home Interest Business performance ● Successful launch of Realhomes.com – showing rapid growth ● Bringing the market-leading Homebuilding & Renovating Show to a new location in Farnborough in Jan 2019 ● New-look Real Homes magazine launched to tap into new audiences and demogr
Slide 31: Buy & build: NewBay Music case study
Buy & build NewBay Music case study ● Highly specialist with loyal audiences – 89k subscribers ● Music portfolio generated £8.8m revenue in 2018, sitting across both B2B and consumer audiences ● Combined with Future’s legacy brands this created the no.1 consumer leader in music making in the UK and
Slide 32: Update: Purch acquisition
Update Purch acquisition The Purch acquisition completed on September 4, 2018. We are still in the first 12 weeks (phase 1) of the integration. Key highlights include: ● All Future New York staff are now located in Manhattan; new ways of office working introduced; around 300 people impacted by moves;
Slide 33: Executive summary
Executive summary ● Another outstanding set of results ● Continual successful execution of strategy ● Acquisitions integration on track and have accelerated growth ● Trading for the year has started well and we believe the trends of last year will continue 33
Slide 34: Appendix
APPENDIX 34
Slide 35: Our Purpose
Our Purpose “ We change people’s lives through sharing our knowledge and expertise with others, making it easy and fun for them to do what they want 35
Slide 36: How we behave
How we behave ● We are part of the audience and their community ● We are proud of our past and excited about our future ● We all row the boat ● Let’s do this! ● It’s the people in the boat that matter ● Results matter, success feels good 36
Slide 37: Global, diversified and scalable business
Global, diversified and scalable business Global Brands Market-Leading Award-Winning #1 in UK and #2 in US in Future won Transformation of 170+ brands consumer technology online the Year at the prestigious PLC Awards in London 6 consumer verticals PC Gamer #1 PC gaming website globally 5 B2B vertical
Slide 38: Definition of organic revenue
Definition of organic revenue Includes the following acquisitions: ● Noble House – May 2016 ● Blaze Publishing – May 2016 ● Next Commerce – August 2016 ● Imagine Publishing – October 2016 ● Team Rock – January 2017 Excludes the following acquisitions: ● Home Interest – August 2017 ● NewBay – April 20
Slide 39: Our Tech Stack
Our Tech Stack One agile, flexible, lean, robust and scalable STAFF homogeneous ecosystem FREELANCE STAFF WEB PLATFORM: VANILLA CONTENT COMMISSIONING CMS PORTAL: TECH SERVICES MAGAZINE CONTENT SOURCE PLATFORM: LOCALISATION STUDIO AD TECH: + CONTENT RE-USE AUTOMATED CONTENT BORDEAUX MAGAZINE FLAT TAGG
Slide 40: P&L exceptional items
P&L exceptional items £m 2018 2017 Restructuring and 0.2 1.1 redundancy Acquisition and 4.3 1.4 integration-related costs Vacant property (0.1) 1.2 provision movements Total 4.4 3.7 Revenue 124.6 84.4 Exceptionals as % of 3.5% 4.4% revenue 40
Slide 41: Thank You
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