Slide 1: Building Momentum: FY23 Preliminary Results
Building Momentum FY23 Preliminary Results 1 August 2023
Slide 2: James Gregory, Chief Executive Officer
James Gregory Chief Executive Officer
Slide 3: FY23 Highlights
FY 23 | Highlights H2 Platform Revenue £9.8m, 29% up on H1 £7.6m Full-year platform Revenue £17.4m, up 40% Gross profit margin improved to 84.2% Operating Costs 1% lower than in FY22 £4m cash investment in platform, products and IP TYX platform fully automated across all 3 product groups US IP Litig
Slide 4: 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 5: 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 5
Slide 6: 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 7: Results provided on a self-serve platform
… with results provided to customers on a self-serve platform © System1 Group PLC 7
Slide 8: Platform revenue continues to grow
Platform revenue continues to grow Platform Revenue (£m) 10 Data-Led Consultancy 9 8 +23% 7 FY23 YoY 6 5 Data 4 3 +44% 2 FY23 YoY 1 - FY22 H1 FY22 H2 FY23 H1 FY23 H2 Data Data-led Consultancy © System1 Group PLC 8
Slide 9: In FY23 H2 we arrested the decline in bespoke consultancy
In FY23 H2 we arrested the decline in bespoke consultancy Bespoke Consultancy Revenue (£m) 7 6 5 4 3 HoH Growth 2 +8.5% FY23 1 - FY22 H1 FY22 H2 FY23 H1 FY23 H2 Bespoke Consultancy © System1 Group PLC 9
Slide 10: We are back on track for total revenue growth
We are back on track for total revenue growth Total Revenue (£m) 12 10 8 6 4 2 0 FY22 H1 FY22 H2 FY23 H1 FY23 H2 Total Revenue © System1 Group PLC 10
Slide 11: Test Your Ad remains the key growth driver
Test Your Ad remains the key growth driver, with Test Your Brand growing in FY23 Revenue by product (£m) 8 7 6 5 4 3 2 1 0 FY22 H1 FY22 H2 FY23 H1 FY23 H2 TYA TYB TYI © System1 Group PLC 11
Slide 12: We continue to grow the TYA Premium database
We continue to grow the TYA Premium database … Test Your Ad Premium Database 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 FY18 FY19 FY20 FY21 FY22 FY23 UK Ads US Ads © System1 Group PLC 12
Slide 13: Commercialising the Premium database
… and continue to commercialise the Premium database TYA Premium Subscription Revenue (£m) 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 FY21 FY22 FY23 TYA Premium © System1 Group PLC 13
Slide 14: New customers are driving revenue performance
New customers are driving revenue performance Number of Customers 600 500 400 300 200 100 0 FY21 FY22 FY23 Retained New © System1 Group PLC 14
Slide 15: Strategic review implementation
Strategic review implementation USP Predictiveness offered at market beating speed and value Increased product coverage across the marketing funnel including digital Target the world’s largest advertisers Scale through partnerships Win in the US Customer led without bespoke customisation © System1 G
Slide 16: Our USP is predictiveness
Our USP is predictiveness, translating emotion into business results … Most Predictive CMO C-Suite Speed Price © System1 Group PLC 16
Slide 17: Based on world leading IP, methodologies and technologies
… based on world leading IP, methodologies and technologies Ads | Brands Survey Emotions measured Markets Ideas tested Responses through FaceTrace™ © System1 Group PLC 17
Slide 18: We've completed TYA full suite
We’ve completed TYA full suite Q1 FY24 Q1 FY24 new addition new addition © System1 Group PLC 18
Slide 19: Partners for the full TYA suite
We have partners for the full TYA suite to amplify fame and access new customers More to come … © System1 Group PLC 19
Slide 20: Customer testimonial: LinkedIn B2B Institute
Poor branding, alongside creative that is unlikely to be remembered, is perhaps the single biggest source of waste in marketing. Working with our partner at System1 helps LinkedIn ensure our clients produce ads that are not only well branded but also emotionally engaging, maximising the chances that
Slide 21: Targeting the world's biggest advertisers
We are targeting the world’s biggest advertisers and we already work with many of them © System1 Group PLC 21
Slide 22: Customers buy both 'Predict your' and 'Improve your' offer
Customers buy both our ‘Predict your’ and ‘Improve your’ offer FY23 Revenue by Offering 100% 80% 60% 40% 20% 0% Data Only Data + Consultancy Consultancy Only Sales Revenue (%) © System1 Group PLC 22
Slide 23: Many world class customers but can only name a few
We already have many world class customers but can only name a few © System1 Group PLC 23
Slide 24: Customer Success Stories
Customer Success Stories Sam Adams 4.9 ‘Your Cousin from ©Boston’ System1 Group PLC 24
Slide 25: Customer Success Stories
Customer Success Stories © System1 Group PLC 25
Slide 26: We are continuing our focus on the US
We are continuing our focus on the US … US fame investment including ANA US Advisory Team (Jon Bond, Noah Brier) Increase New Biz Team © System1 Group PLC 26
Slide 27: Exciting US Pipeline
… and we are seeing new US wins already Recent US Wins A top 3 2 major A top 3 global US division of Top 10 global FMCG US grocery online a top 3 global fortune 500 company retailers recruitment spirits company company platform Exciting US Pipeline A top 3 Pilot with a top 3 Top 10 Pilot with 2 Top
Slide 28: Financial Performance
Financial Performance
Slide 29: Chris Willford, Chief Financial Officer
Chris Willford Chief Financial Officer
Slide 30: Profit & Loss
Profit & Loss 2023 2022 Change £m Change % Platform Revenue 17.4 12.4 +5.0 +40% Non-platform Revenue 6.0 11.7 -5.7 -48% Revenue 23.4 24.1 -0.7 -3% Gross Profit 19.7 20.2 -0.5 -2% Adjusted Operating Costs (18.9) (19.2) -0.2 -1% Adjusted Profit Before Tax 0.8 1.0 -0.2 -24% Statutory Profit Before Tax
Slide 31: Key Performance Indicators
Key Performance Indicators 2023 2022 Platform Revenue % total Revenue 74 52 Platform Revenue growth % 40 - Gross Profit % Revenue 84.2 83.8 Adjusted EBITDA £m1 1.8 2.1 Adjusted EBITDA % Revenue 8 9 “Rule of 40”2 48 - Free cashflow £m3 (3.1) 2.5 Net cash £m 5.7 8.7 1 Statutory profit before taxation
Slide 32: Operational gearing from Platform
Operational gearing from Platform | Cost base is mainly fixed, mainly people Expenditure by Type | Statutory Staff Overhead Admin 3.7 16% Sales & Marketing 39% £22.9m 12.9 £12.9m Operations 6.3 23% IT 22% Direct Costs Staff Overhead Non-staff overhead © System1 Group PLC 32
Slide 33: Focused investment in Sales & Marketing team
Focused investment| Growth as planned in Sales & Marketing team in FY23 Staff Overhead by business area £m 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Sales & Marketing IT Operations Central FY22 FY23 © System1 Group PLC 33
Slide 34: Non-staff overhead
Non-staff overhead| Predominantly Data/IT/Property infrastructure and Group centre Expenditure by Type | Statutory Non-staff overhead excl. £1.2m capitalisation & FX credits Corporate IT inc. R&D 19% 20% 12.9 £22.9m 6.3 £7.5m Property Ops 16% inc.TYA Db Sales & 33% Marketing 3.7 12% Direct Costs Sta
Slide 35: Free Cash Flow
Free Cash Flow | affected by low-start high-end year and more investment in platform FY23 Working Capital Squeeze Receivables hit by trough to peak FCF outflow concentrated in H1 7.0 year end sales 0 8.0 5.0 -0.4 -1 3.0 4.0 6.2 4.5 -2 1.0 0.0 -1.0 FY20 FY21 FY22 FY23 Receivables -3 -2.7 Payables Con
Slide 36: Summary: platform ready, we are ready to scale up
Summary Growing platform sales momentum Relentless focus on execution of strategic plan Customer focus, targeting world's largest businesses New product channels, amplified by partnerships Continued focus on growing the US Gross profit margins strong, profitable again, cash neutral in near term Plat
Slide 37: Q&A
Q&A Microsoft | We All Win 5.9