System1 Group Plc · LSE:SYS1
System1 — Canaccord 44th Annual Growth Conference (August 2024)
36 slides from System1's conference presentation, Aug 13, 2024
Slide 1: Canaccord 44th Annual Growth Conference
Canaccord 44th Annual Growth Conference 13 August 2024
Slide 2: Disclaimer and Forward-Looking Statements
DISCLAIMER AND FORWARD-LOOKING STATEMENTS Disclaimer: The information provided in this presentation is for the sole use of those attending the presentation This presentation has been prepared by System1 Group PLC (the “Company”). “Presentation” means this document, any oral presentation, any questio
Slide 3: James Gregory, Chief Executive Officer
James Gregory Chief Executive Officer
Slide 4: We help the world's largest advertisers make confident creative decisions
fi ' — , ¢ ys i : q ‘ \ / 2 T 4 UY ame hon We help the world’s largest advertisers make confident creative decisions that lead to transformational business results
Slide 5: Source | Clayton Christensen, Harvard Business School
Source | Clayton Christensen, Harvard Business School © System1 Group PLC 5
Slide 6: We are a marketing decision-making platform
predicts and improves marketing effectiveness … We are a marketing We predict and improve decision-making platform marketing effectiveness
Slide 7: Through our 'predict your' and 'improve your' offering
… through our ‘predict your’ and ‘improve your’ offering … Data Data-Led Bespoke Consultancy Consultancy (Predict Your) (Improve Your) © System1 Group PLC 7
Slide 8: Predictions delivered through an automated platform
… our predictions (and some improvements) are delivered through an automated platform … Predict Your… Improve Your… Project Management Set up Programming Panel Data processing Reports Data Led respondents Consultancy Forward translation Back translation Key: Automated Process Consultancy © System1 G
Slide 9: Results provided on a self-serve platform
… with results provided to customers on a self-serve platform … © System1 Group PLC 9
Slide 10: Massive headroom in the pre-testing market
There is massive headroom in the pre-testing market and we are playing in growth areas Total Addressable Market $20.43bn Ad Pre Testing Innovation Testing Brand Tracking $2.46bn $12.02bn $5.95bn Source | Global Market Research 2023 | ESOMAR © System1 Group PLC 10
Slide 11: 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 12: What makes our metrics so accurate?
What makes our metrics so accurate? System 1 and System 2: Kahneman | ‘Thinking, fast and slow’ Percentages: Zaltman | ‘How Customers think; Essential insights into the Mind of the Market’
Slide 13: Platform and Products based on world leading IP
Platform and Products based on world leading IP, methodologies and technologies Ads | Brands Survey Emotions measured Markets Ideas tested Responses through FaceTrace © System1 Group PLC 13
Slide 14: Mike Perlman, Chief Commercial Officer
Mike Perlman Chief Commercial Officer
Slide 15: Offices around the globe, tests in 81 markets
With 13 offices around the globe, we understand locality & can run tests in 81 markets London Hamburg Chicago Paris Rotterdam New York Lausanne Los Angeles Singapore São Paulo Sydney © System1 Group PLC 15
Slide 16: We are focussed on Winning in America
We are focussed on Winning in America $11bn 9% +43% $71bn 55% +22% $129bn Global Insights Industry Key Industry FY24 Growth YoY Source | Global Market Research 2023 | ESOMAR © System1 Group PLC 16
Slide 17: Gaining Traction in the USA
| Gaining Traction in the USA GBP £m 9 8 Q1 Q2-4 FY24 7 6 Sales Revenue £9m 5 4 Clients 83 3 2 Employees 24 1 0 FY23 FY24 FY25 © System1 Group PLC 17
Slide 18: We are growing in the USA & UK
We are growing in the USA & UK We work with 5 of the top 10 USA advertisers & 7 of the top 10 UK advertisers Rank Parent Company Rank Parent Company Sources : USA: Visual Capitalist | UK: Statista Note: System1 are not permitted to name the advertisers we work with © System1 Group PLC 18
Slide 19: Five Steps to 5-Star Ads
Five Steps to 5-Star Ads System! offer a solution to help you Create with Confidence at each stage of the advertising development process System1 Create with Confidence Your Test Your Ad Distinctive Audit Assets+ Test Your Ad Premium Test Your Ad Guidance
Slide 20: Test early. Test often.
Test early. Test often. titat Boardomatic / Rough Cut Final Creative Animatic Concept System! Create with Confidence
Slide 21: Slide 21
Slide 22: Five Steps to 5-Star Innovation
ay be * & Five Steps to 5-Star Innovation Test Your Distinctive Assets+ System! offer a solution to help you . oa ~~ ey . database Innovation Create with Confidence at each stage of the innovation development process Test Your Test Your Innovation Innovation Guidance System1 Create with Confidence
Slide 23: Test Your Innovation
+) Test Your Innovation 0G@d0 Brand Concepts Product Product Packs Logos Positionings Claims Names System Create with Confidence
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Slide 25: Consumer Strategy
nsumer Strategy Create with Confi
Slide 26: We leaned on System1's Guidance
&@ ‘Weleaned on System1’s Guidance to uncover which creative elements were essential and where our ad Create with Confid
Slide 27: Chris Willford, Chief Financial Officer
Chris Willford Chief Financial Officer
Slide 28: FY24 Performance Highlights
FY24 Performance Highlights Momentum maintained. Platform revenue up 43% on last year; total revenue up 28% Significant double-digit revenue growth in US, UK and Europe 260 new client wins Net Revenue Retention Rate of 100% on platform revenue Gross profit margin increased to 87% Adjuste
Slide 29: Profit turnaround FY24 versus FY23 shows benefit of scalable model
Profit turnaround FY24 versus FY23 shows benefit of our scalable business model FY24 Change % £m Platform Revenue 24.8 +43% Total Revenue 30.0 +28% Cost of Sales (3.9) +6% Gross Profit 26.1 +32% Statutory Profit Before Tax 3.1 +333% Profit after Taxation 2.0 +403% Earnings per share (p) 16.0 +404% ©
Slide 30: Platform revenue grew year on year driving top line growth
Platform revenue grew year on year driving top line growth Platform Bespoke Consultancy 30 5.2 25 20 6.0 £m 15 24.8 10 17.4 5 0 FY23 FY24 © System1 Group PLC 30
Slide 31: Platform Revenue growing Quarter on Quarter
Platform Revenue growing Quarter on Quarter 10 Data Data-led consultancy 9 8 7 Revenue £m 6 5 4 3 2 1 0 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 © System1 Group PLC 31
Slide 32: Our Key Performance Indicators are moving in the right direction
Our Key Performance Indicators are moving in the right direction KPIs FY24 FY232 Platform Revenue % total Revenue 82 74 Platform Revenue growth % +43 +40 Gross Profit % Revenue 87 84 Adjusted EBITDA % Revenue 15 7 “Rule of 40”1 57 47 Net cash £m 9.6 5.7 1 Platform Revenue growth % + Adjusted Group E
Slide 33: On track to meet our medium-term goals
…and we believe we are on track to meet our medium-term goals KPIs FY24 Goal at Scale Platform Revenue % total Revenue 82 95% Platform Revenue growth % 43 10-20% Gross Profit % Revenue 87 >85% Adjusted EBITDA % Revenue 15 >30% “Rule of 40” 57 >40% © System1 Group PLC 33
Slide 34: We anticipate low impact on overhead costs as we grow
We anticipate low impact on overhead costs as we grow Area Impact of volume growth Comment Increases with new clients and partnerships and Sales & Marketing Low-medium account management on major clients. Highly automated. Volume increases minus productivity Operations Low result in only minor cost
Slide 35: The scaling effect to come | Illustrative
The scaling effect to come | Illustrative Revenue £m Adj EBITDA £m restated 70 35% Adj EBITDA % (Right Scale) 60 30% 30% 60 £ EBITDA 4.1 x Revenue and EBITDA £m 50 25% EBITDA Margin 40 20% 15% 30 15% 30 18.0 £ Revenue EBITDA % 20 10% 2.0x 2.05 x 10 5% 4.4 0 0% FY24 At Scale (2x) Note: This chart is
Slide 36: Questions?
Questions? © System1 Group PLC 36
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