System1 Group Plc · LSE:SYS1
System1 — H1 FY2024 Earnings Presentation
26 slides from System1's earnings presentation, December 2023
Slide 1: Interims Roadshow 2023
Interims Roadshow 2023 Helping the world’s largest advertisers make confident creative decisions © System1 Group PLC 1
Slide 2: James Gregory, Chief Executive Officer
James Gregory Chief Executive Officer
Slide 3: H1 Highlights
H1 Highlights Platform revenue up 44% on H1 last year 136 new platform clients in H1 and improved retention New partnerships launched with Pinterest, Finecast, JC Decaux and Teads with more to come Increased focus on non-TV formats with the launches of TYA Digital, TYA Audio and upcoming Inn
Slide 4: We are back on track … with a winning formula
We are back on track … with a winning formula Total Revenue (£m) 14 12 10 8 6 4 2 0 FY22 H1 FY22 H2 FY23 H1 FY23 H2 FY24 H1 © System1 Group PLC 4
Slide 5: Platform revenue continues to grow
Platform revenue continues to grow Platform Revenue (£m) 12 Data-Led Consultancy 10 +46% 8 H1FY24 YoY 6 Data 4 +31% H1FY24 YoY 2 0 FY22 H1 FY22 H2 FY23 H1 FY23 H2 FY24 H1 Data Data Led Consultancy © System1 Group PLC 5
Slide 6: Bespoke Consultancy has small decline and while managed, remains volatile
Bespoke Consultancy has small decline and while managed, remains volatile Bespoke Consultancy Revenue (£m) 7 6 5 4 3 YoY Decline 2 -18% 1 H1FY24 0 FY22 H1 FY22 H2 FY23 H1 FY23 H2 FY24 H1 © System1 Group PLC 6
Slide 7: We help the world’s largest advertisers make confident creative decisions
ff a. # ee |i rv\ AY ot (\ yar We help the world’s largest advertisers make confident creative decisions that lead to transformational business results
Slide 8: Our USP is predictiveness, translating emotion into business results
Our USP is predictiveness, translating emotion into business results Most Predictive CMO C-Suite Speed Price
Slide 9: Record levels of Platform clients in H1, both winning new and retaining more
Record levels of Platform clients in H1, both winning new and retaining more Platform Clients (H1 only) 300 250 New Clients Existing New 200 +97% H1FY24 YoY 150 100 Existing Clients 50 +29% H1FY24 YoY 0 H1 FY21 H1 FY22 H1 FY23 H1 FY24 © System1 Group PLC 9
Slide 10: Record levels of Platform revenue in H1, from new and retained clients
Record levels of Platform revenue in H1, from new and retained clients Platform Revenue £m (H1 only) 12 New Client Revenue Existing New 10 +109% H1FY24 YoY 8 6 Existing Client Revenue 4 +32% 2 H1FY24 YoY 0 H1 FY21 H1 FY22 H1 FY23 H1 FY24 © System1 Group PLC 10
Slide 11: In FY24 we’ve added RadioCentre to H1 partnerships
In FY24 we’ve added RadioCentre to H1 partnerships with Pinterest, Teads, Finecast and JCDecaux New Partnerships FY24 © System1 Group PLC 11
Slide 12: We are leading with Test Your Ad, supported by Test Your Idea & Test Your Brand
We are leading with Test Your Ad, supported by Test Your Idea & Test Your Brand
Slide 13: We are seeing strong growth in Platform Comms
We are seeing strong growth in Platform Comms Comms Revenue (£m) 12 10 8 6 4 2 0 H1 H2 H1 H2 H1 FY22 FY23 FY24 Platform Non-Platform © System1 Group PLC 13
Slide 14: New formats allow testing of advertising outside of TV
New formats allow testing of advertising outside of TV Out of Home Digital © System1 Group PLC 14
Slide 15: We are working to relaunch our Innovation Offer in 2024
We are working to relaunch our Innovation Offer in 2024 with the aim to bring similar levels of growth seen in TYA © System1 Group PLC 15
Slide 16: We are working to relaunch our Innovation Offer in 2024
We are working to relaunch our Innovation Offer in 2024 with the aim to bring similar levels of growth seen in TYA © System1 Group PLC 16
Slide 17: Strong revenue growth in UK, Americas and Europe alongside stabilisation of APAC
Strong revenue growth in UK, Americas and Europe alongside stabilisation of business in APAC +45.9% +17.1% +17.2% +3.7% © System1 Group PLC 17
Slide 18: Our Mission
Our Mission To help the world’s largest advertisers to make confident creative decisions How?
Slide 19: Chris Willford, Chief Financial Officer
Chris Willford Chief Financial Officer
Slide 20: Profit turnaround versus H1 FY23 shows benefit of our scalable business model
Profit turnaround versus H1 FY23 shows benefit of our scalable business model H1 FY24 Change £m Change % Revenue 13.3 +2.8 +27% Cost of Sales (1.6) -0.3 -17% Gross Profit 11.7 +3.1 +37% Adjusted Operating Costs (9.8) +0.9 +10% Adjusted Profit Before Tax 1.9 +2.3 nm Statutory Profit Before Tax 0.9 +0
Slide 21: Our Key Performance Indicators are moving in the right direction
Our Key Performance Indicators are moving in the right direction KPIs H1 FY24 H1 FY23 Platform Revenue % total Revenue 82 73 Platform Revenue growth % 44 33 Gross Profit % Revenue 87.8 81.5 Adjusted EBITDA £m 1 1.7 0.8 Adjusted EBITDA % Revenue 13 8 “Rule of 40” 2 57 42 Free cash flow 3 0.6 (2.7) Ne
Slide 22: Medium Term Goals
Medium Term Goals KPIs H1 FY24 Goal at Scale Platform Revenue % total Revenue 82 95% Platform Revenue growth % 44 10-20% Gross Profit % Revenue 87.8 >85% Adjusted EBITDA % Revenue 13 >30% “Rule of 40” 57 >40% © System1 Group PLC 22
Slide 23: H1 overhead cost growth v last year driven by performance-related pay
H1 overhead cost growth v last year driven by performance-related pay © System1 Group PLC 23
Slide 24: Free Cash Flow | in line with our plan
Free Cash Flow | in line with our plan © System1 Group PLC 24
Slide 25: Summary
Summary We are back on track with a winning formula Platform revenue growing strongly on new business wins Record number of new client wins in H1 Revitalised Innovation proposition coming in 2024 Direct costs reduced through platform & supply chain efficiencies Improved profitability and cash genera
Slide 26: Thank you. Questions & Answers
Thank you. Questions & Answers © System1 Group PLC 26