Slide 1: Full Year Results 2023
2023 FULL YEAR RESULTS 7 December 2023
Slide 2: Disclaimer
Disclaimer This presentation contains certain statements that are forward-looking statements. They appear in a number of places throughout this presentation and include statements regarding the intentions, beliefs and/or current expectations of Future plc (the “Company”) and its subsidiaries (togeth
Slide 3: Opening Remarks
OPENING REMARKS Jon Steinberg, CEO 3
Slide 4: Opening Remarks
Opening Remarks ■ Media is a dynamic ecosystem ■ Future’s business model is built on strong foundations of innovation, agility ■ Launched Growth Acceleration Strategy or GAS with an acceleration of growth as we yield the benefit of investment ■ High cash generation will add optionality to accelerate
Slide 5: Financial Review
FINANCIAL REVIEW Penny Ladkin-Brand, CFSO 5
Slide 6: Overview
Overview 6
Slide 7: FY 2023 In Line With Expectations
FY 2023 In Line With Expectations AOP REVENUE Adjusted Operating Profit £788.9m £256.4m 32% margin (4)% reported (10)% organic (6)% reported (1)ppt margin decline ADJUSTED FREE CASH FLOW NET DEBT £253.2m £327.2m 99% conversion 1.25x leverage (5)% reported £96m yoy reduction +1ppt on conversion in net
Slide 8: Summary P&L
Summary P&L £m FY 2023 FY 2022 YoY Var Revenue 788.9 825.4 (4)% 1 Gross contribution 569.8 609.1 (6)% GC Margin 72% 74% (2)ppt Sales, marketing and editorial (221.5) (217.0) (2)% Gross profit after direct costs 348.3 392.1 (11)% Gross profit margin 44% 48% (4)ppt 2 Admin costs & other overheads (71.5)
Slide 9: Audience
Audience 9
Slide 10: Audience: Diversification of highly valuable audiences
Audience: Diversification of highly valuable audiences maximises growth and improves efficiency 1 Content categories website users 2 Website sessions acquisition channel 3 On and off-platform online users 28% 42% 52% 69% 50% 28% In FY 2023, 69% of website users +14ppt progression of other +22ppt progr
Slide 11: Audience Landscape
Audience Landscape Total revenue £788.9m RPU £1.63 AUDIENCE 485m Media Magazine revenue revenue £514.9m Digital online users Offline users £274.0m RPU 481m 4m RPU £1.07 £68.5 Website users Off-platform users Subscriptions Circulation 241m 240m 2m 2m Social users Event attendees Email newsletters Appl
Slide 12: Website Users
Website Users Daily average website users Daily average website users Stabilisation of website users since May creates foundation for future growth 12
Slide 13: Leadership Positions Maintained Or Improved
Leadership Positions* Maintained Or Improved UK US #1 #1 Tech Unchanged since Unchanged since March 2022 March 2022 Despite challenging online users performance, #1 #3 we have maintained or Homes Unchanged since +5 since March 2022 March 2022 +1 since March 2023 improved our leadership positions in
Slide 14: Revenue Performance
Revenue Performance 14
Slide 15: Diversification Drives Resilience - Revenue By Type
Diversification Drives Resilience - Revenue By Type % Group’s FY 2023 FY 2022 Reported Organic Revenue revenue £m £m growth growth Advertising & other 31% 246.0 262.5 (6)% (19)% Affiliates 34% 268.9 272.7 (1)% (8)% Revenue by type Media 65% 514.9 535.2 (4)% (13)% Magazines 35% 274.0 290.2 (6)% (5)% RE
Slide 16: Diversification Drives Resilience - Revenue By Geography & Type
Diversification Drives Resilience - Revenue By Geography & Type ■ UK better performance ○ More established in the market with additional market leadership % Group’s/geo FY 2023 FY 2022 Reported Organic Revenue revenue £m £m growth growth positions ○ Better mix (more Affiliate services UK 60% 476.6 499
Slide 17: Costs & Cash
Costs & Cash 17
Slide 18: Model Flexed To Protect Profitability
Model Flexed To Protect Profitability Operating Operating costs costs Group operating model supporting profitability ○ Full integration of acquisitions with removal of duplicative costs ○ Energy driving higher inflationary pressures in Magazines COS - which are now abating, and salaries ○ Profit pool bo
Slide 19: Cash Flow Demonstrating Strong Conversion Of Profits
Cash Flow Demonstrating Strong Conversion Of Profits £m FY 2023 FY 2022 Adjusted cash generated before changes 270.7 295.2 in working capital and provisions1 Adjusted free cash flow £253.2m, 99% conversion Adjusted movement in working capital and provisions (6.2) (16.4) of adjusted operating profit, de
Slide 20: Consistent strong cash generation provides balance sheet strength
Consistent strong cash generation provides balance sheet strength ■ Total facilities at 30 September 2023 of £900m, with headroom of £574.1m, inc cash-on-hand ■ Average interest rate in the period 6.8% (including the non-utilisation fee on the undrawn debt, 6.0% without). ■ 21% of external debt in U
Slide 21: Capital Allocation
Capital Allocation 21
Slide 22: Effective And Rational Capital Allocation
Effective And Rational Capital Allocation Consistent cash flow conversion of 95%+ (adjusted FCF/AOP) Rigorous assessment to maximise value creation between Organic Strategic Debt Shareholder Returns Investment M&A Repayment ● Annual progressive dividend (capex <2% of revenue) ● Additional shareholder
Slide 23: Outlook: Accelerating
Outlook: Accelerating ■ Stabilisation of trends provide foundations for growth ■ 2-year investment programme to drive short and long-term attractive growth opportunities (of which £20m investment in FY24) ■ Revenue growth in H2 FY24 ■ Continued strong cash generation Long-term opportunities are clea
Slide 24: Strategy & Priorities
STRATEGY & PRIORITIES Jon Steinberg, CEO 24
Slide 25: Context & Journey
Context & Journey ■ Media is one of the most dynamic industries ■ Pace of change has never been greater in media ○ Concentration in search ○ Audience volatility (algo, macro) ○ AI Full review of Group and strategy completed to validate and refine strategic priorities to drive growth on a successful b
Slide 26: Strong Foundations To Launch Growth Acceleration Strategy (GAS)
Strong Foundations To Launch Growth Acceleration Strategy (GAS) ■ Strong foundations, part of the Future DNA ○ Platform ○ Innovation ○ Agility of the business model GAS ○ Enhanced-capability M&A GROWTH ACCELERATION ■ Operating in attractive markets STRATEGY ■ Big untapped opportunities with the abil
Slide 27: We Operate In Attractive Markets With Further Growth Opportunities
We Operate In Attractive Markets With Further Growth Opportunities UK US eCom Digital Advertising Digital Advertising Future markets only (US+UK) Future markets Future markets +4% CAGR +7% CAGR +6% CAGR 23-26 23-26 23-26 £2bn market today £15bn market today £22bn market today assuming 4% take-rate O
Slide 28: Our Strategy
Our Strategy 28
Slide 29: The equation does not change, we create adjacent opportunities
The equation does not change, we create adjacent opportunities Growing Increasing Playbook ENGAGED Revenue applied to A proven users Per User all brands compounding (RPU) + model M&A 29
Slide 30: Our Strategy
Our Strategy 3 OBJECTIVES 4 ENABLERS 3 OUTCOME Reach valuable SUSTAINABLE audiences EXPERT & SPECIALIST REVENUE GROWTH (on and off-platform) CONTENT Diversify and grow OPERATING MODEL STRONG FCF CONVERSION revenue per user EFFECTIVE EFFICIENTAND RATIONAL & RATIONALE Optimise the portfolio PROPRIETAR
Slide 31: Growth Acceleration Strategy (GAS)
Growth Acceleration Strategy (GAS) 5 STRATEGIC PRIORITIES Operating model 1 Including portfolio segmentation and a focus on price comparison Expert content 2 With a focus on reviews and videos to drive audience and through improved user experience 3 US digital advertising Bringing the US digital adv
Slide 32: Growth Acceleration Strategy
Growth Acceleration Strategy FY24 investment FY25 investment Total investment 5 STRATEGIC PRIORITIES Operating model 1 Includes marketing for Go.Compare ~£5.5m ~£1.5m ~£7.0m 2 Expert content ~£8.0m ~£2.0m ~£10.0m 3 US digital advertising ~£3.5m ~£3.0m ~£6.5m 4 Social monetisation ~£1.5m ~£1.0m ~£2.5
Slide 33: Operating Model Through Portfolio Optimisation and Segmentation
1 Operating Model Through Portfolio Optimisation and Segmentation HERO, HALO, CASH GENERATOR BRANDS HERO BRANDS HALO BRANDS CASH GENERATORS ● Attractive vertical (strong ● Growing underlying markets ● Low to decline market growth, advertising dollars, ● Add scale to the Hero brands growth ecommerce
Slide 34: Example of Hero Brand Focus: Go.Compare & Living etc.
1 Example of Hero Brand Focus: Go.Compare & Living etc. ● Strong brand with over 3m users, Market PCW market growth in our verticals, notably car insurance which grew over 100% in FY23, 1m driven Requires marketing investment followers on Facebook, 0.4m followers on instagram ● A lighthouse for US H
Slide 35: Expert Content: On Our Websites
2 Expert Content: On Our Websites Why is it valuable? ■ Quality content drives audience which can in turn be monetised ○ Expertise, Authority & Trust are key ■ The more engaging the content is, the more time the audience will spend on the page driving improved monetisation ■ Engagement on video is h
Slide 36: Expert Content: Off-platform
2 Expert Content: Off-platform Why is it valuable? ■ Our off-platform content can help redirect to our websites as evidenced through our progress of the social acquisition channel ■ Content is a cost that does not need to be supplemented by marketing costs ■ Innovative through new platforms and new
Slide 37: Accelerate US Digital Advertising Growth
3 Accelerate US Digital Advertising Growth Opportunities are significant Actions to drive the opportunities Total US digital market is Sign partnership with agencies and 7x bigger than UK* holding companies ○ 9 signed to date Yield & mix differential Hire sales and sales support to drive UK yield is
Slide 38: Social Monetisation: Branded Content
4 Social Monetisation: Branded Content CASE STUDY - WALMART holiday branded content What is branded content? Leveraging our sales capability to cross sell a home and a tech brand Content sponsored by a brand: ○ An authentic editorial point of view ○ Led by data ○ Created by editors Why is it valuabl
Slide 39: Organisational Health
4 Organisational Health ENSURING DIVERSITY OF People investment TALENT TO CREATE AN ■ to drive priorities and ensure accountability ENGAGED WORKFORCE WHO ■ align compensation to reward HAS EFFECTIVE TOOLS TO DRIVE (over)performance THE BUSINESS FORWARD AND ACCELERATE GROWTH System investment ■ to dr
Slide 40: Summary
Summary 40
Slide 41: Summary
Summary ■ Media is a dynamic ecosystem ■ Future’s business model is built on strong foundations of innovation, agility ■ Launched Growth Acceleration Strategy or GAS with an acceleration of growth as we yield the benefit of investment ■ High cash generation will add optionality to accelerate value cr
Slide 42: Future
FUTURE
Slide 43: Appendix
APPENDIX 43
Slide 44: Technical Guidance
Technical Guidance ■ Capex ~1.6% of revenue ■ Interest £(33)m including IFRS 16 of £(2)m ■ Tax 25.5% ■ Exceptional ○ P&L £4m ○ Cash £8m ■ Foreign exchange: ○ FY 2024: USD 1.25 ○ FY 2023: USD 1.22 44 ■ Macro recovery in H2
Slide 45: Revenue Breakdown
Revenue Breakdown % Group’s FY 2023 FY 2022 Reported Revenue revenue £m £m growth Consumer B2C 72% 567.7 618.1 (8)% Price Comparison 20% 158.0 146.2 +8% (Go.Compare) B2B 8% 63.2 61.1 +3% REVENUE 100% 788.9 825.4 (4)% 45
Slide 46: Margin Resilience Supported By A Flexible Business Model
Margin Resilience Supported By A Flexible Business Model Resilient margin despite headwinds, supported by a flexible operating model ■ (1)ppt mix dilution with higher decline in higher margin Media segment ■ (2)ppt dilution from inflation on magazines cost of sales and salaries and wages ■ +2ppt impro
Slide 47: Online users by Major Verticals
Online users* by Major Verticals Q1 Q2 Q3 Q4 Group Total (241m) (15)% (24)% (28)% (19)% (23)% GETs (157) (17)% (26)% (30)% (24)% (25)% Tech (74m) (26)% (31)% (24)% (26)% (27)% Games & Ent (47m) (20)% (29)% (49)% (36)% (36)% LKN (74m) (9)% (22)% (25)% (10)% (21)% Women’s (27m) +9% (9)% (30)% (36)% (2
Slide 48: Sources & Definitions
Sources & Definitions Financial notes ● Adjusted effective tax rate is defined as the ● Net debt is defined as the aggregate of the ● Organic growth is defined as the like for like effective tax rate adjusted for the tax impact of Group's cash and cash equivalents and its portfolio in the period, includ