Slide 1: Financial Results
Financial Results System1 Group PLC 12 Months to 31 March 2019
Slide 2: Strategic Context
Strategic Context • Our vision is to be global no 1 in Advertising Effectiveness • We play in three research markets: Advertising Testing, Brand Tracking & Innovation (our roots), • We operate in 6 of the largest advertising markets in the world (US, UK, DE, FR, BR, AU) & 3 more • We have yet to ach
Slide 3: 2018/19 Summary
2018/19 Summary • After the previous year’s Revenue decline of 18% & Underlying PBT decline of 68%, this year’s results were far from spectacular but they were significant: • Flat revenues for the year but H2 growth of 5% on the previous year • 23% growth in the number of clients • 7% growth in our
Slide 4: Financials
FINANCIALS
Slide 5: P&L: separating Consulting (existing business) from AdRatings
P&L: separating Consulting (existing business) from AdRatings £m 2018/19 2017/18 Consulting AdRatings Total (Existing Business) Revenue 26.90 - 26.90 26.94 Gross Profit 22.05 - 22.05 22.23 Underlying Overheads (18.35) (2.22) (20.57) (20.18) Underlying Profit Before Tax 3.70 (2.22) 1.48 2.05 Share Ba
Slide 6: Historic context
Historic context Gross Profit (£m) 30 25 20 15 Flat Revenue (flat in constant currency) 10 1% decline in Gross Profit (1% constant 5 0 currency) 2012 2013 2014 2015 16/1 17/1 18/1 7 8 9 80% growth in Underlying Profit Before Tax Profit Before Tax excluding AdRatings 8 (£m) (excluding AdRatings
Slide 7: Business is stabilising
Business is stabilising Gross Profit £m 10 8 Flat quarterly performance since 6 beginning 2017/18, and an uptick in H2 4 2018/19. 2 Innovation is more adhoc than Comms 0 and Brand. Easier to win … and lose. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Declined significantly in 2017/18 and 16/17 16/17 16/
Slide 8: Mixed fortunes geographically
Mixed fortunes geographically Gross Profit Operating Profit Gross Profit Americas £9.54m -6% £4.68m -3% 7% UK £5.03m 0% £2.40m -10% Continental £5.45m +19% £3.14m +20% 25% Europe 44% APAC £1.60m -21% £0.83m -15% £21.62 £11.05 Total Research -1% -1% m m 24% £(0.22) Ad Agency £0.43m +14% NM m Americas
Slide 9: Profit and Cost improvements
Profit and Cost improvements Growt £m h Cost improvements driven by 12% Operating Profit from Research & headcount reduction 10.83 +1% Ad Agency Central Costs (ex AdRatings) (7.13) -18% Operating Profit margin improving (ex AdRatings, Exceptional Credit, and Share Based Operating Profit (ex AdRa
Slide 10: Cashflow
Cashflow £m 2018/19 2017/18 Operating Cash Flow (excluding AdRatings) 2.53 1.84 AdRatings (2.95) - Cash flow Before Financing (0.42) 1.84 Finance Leases (0.04) 0.12 Ordinary Dividends (0.94) (0.94) Special Dividends - (3.25) Cash movement (1.40) (2.23) Cash balance at 30 September 4.32 5.78 Cash f
Slide 11: © System1 Group PLC
© System1 Group PLC 11
Slide 12: to No. 1
to No. 1 “Our role is to lead the business to ideas that sell Andrew Geoghegan more” Head of Consumer Planning, Diageo © System1 Group PLC 12
Slide 13: #1 Intellectually in Advertising Effectiveness
#1 Intellectually in Advertising Effectiveness 1st to champion System1, behavioural science based research 1st to champion online, self-structuring of open-ended answers (MindReader®: 52 million responses since 2000) 1st to champion predictive accuracy of emotional response (FaceTrace®: the Wo
Slide 14: From Intellectual #1 to Commercial #1
From Intellectual #1 to Commercial #1 AD Shop window to show how it’s done AGENCY Guiding CREATIVE Consultancy to improve creative outputs & GUIDANCE outcomes Predicting Predict long term profitability of Ads, Brands & PREDICTIONS Innovation Rating EFFECTIVENESS DATABASES E.G. ADRATINGS Ad effective
Slide 15: AdRatings Goal Hierarchy: sequential & progressive
AdRatings Goal Hierarchy: sequential & progressive ASS 1. BUILD the largest database of adverts evaluated on long term effectiveness. We use this AGENC ET to enhance our understanding of advertising which feeds into our consultancy business. Y 2. BRAND this database and provide topical predictive da
Slide 16: AdRatings
AdRatin gs • Following std. digital product dev process • Currently have MVP solution & iterating (blue circle) © System1 Group PLC 16
Slide 17: AdRatings Progress Report
AdRatings Progress Report ASS 1. BUILD. At 68,000 adverts & 19m emotional responses, AdRatings is already the World’s largest AGENC ET Y database of long-term advertising effectiveness & will be @ over 80,000 by the end of this year 2. BRAND. AdRatings has enabled System1’s predictive data to become
Slide 18: Summary
Summary © System1 Group PLC 18
Slide 19: 2018/19 Summary
2018/19 Summary • Aiming to turn Intellectual leadership in Advertising Effectiveness, into Commercial leadership • After the previous year’s Revenue decline of 18% & Underlying PBT decline of 68%, this year’s results were far from spectacular but they were significant: • Flat revenues for the year
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