Next 15 Group Plc · LSE:NFG

Next 15 — H1 2022 Earnings Presentation

25 slides from Next 15's earnings presentation, September 2021

  1. Slide 1: Interim Results: September 2021

    NEXT15 INTERIM RESULTS : SEPTEMBER 2021 NEXT 15 1

  2. Slide 2: Agenda

    AGENDA Results summary and introduction Business progress Market insights Product strategy update Segmental strategy update ESG update Numbers in detail NEXT15 2

  3. Slide 3: Introduction to Next 15

    Introduction to Next 15 Next 15 is a tech and data-driven growth consultancy. It operates across four divisions and has offices across the world. The Group’s four divisions are designed to help companies achieve their growth ambitions through: 1. Delivering business insights through data analytics and

  4. Slide 4: Results Highlights

    RESULTS HIGHLIGHTS ● Net revenue up 32% (23% organically) to £165.9m (2020: £126.2m) ● Adjusted operating profit up 65% to £35m (2020: £21.2m) ● Margin performance in H1 of 21.1% (2020: 16.8%) – anticipate investments in H2 in productization and some additional costs as Covid impact recedes ● Adjuste

  5. Slide 5: Business Progress

    BUSINESS PROGRESS CLIENTS: Diageo, Disney+, Citibank, Boots ACQUISITIONS: Acquisition of MSI by the US arm of Savanta Creates $20m US customer insight business Shopper Media Group Blueshirt Capital Advisers (“BCA”) PRODUCTS: Prism - automated digital DD Audience 360 - customer activation using 1st p

  6. Slide 6: Market Insights

    MARKET INSIGHTS Every customer is on some form of digital transformation journey or is driving digital transformation of industry sectors Move towards tech-enabled subscription/fixed fee services is starting to accelerate Specialism is beating scale every time Customers are accelerating product life

  7. Slide 7: Product Strategy - Long Term

    PRODUCT STRATEGY - LONG TERM 10% 50% 30% 10% CUSTOM PACKAGED TaPaaS SaaS Customized/bespoke services Methodology-driven, repeatable Technology-enabled products and Subscription Software products/services services Billed by the hour Product pricing Product + subscription Subscription pricing pricing

  8. Slide 8: Impact on Our World

    IMPACT ON OUR WORLD Substantial growth opportunities in: - business transformation services - industrial e-commerce - D2C customer engagement Shift towards almost entirely first party data solutions Businesses that are tied solely to talent will see increased volatility in revenues Focus on product d

  9. Slide 9: Segmental Performance

    SEGMENTAL PERFORMANCE 11% 55% 22% 12% £18.8m £91.1m £36.3m £19.7m Insight Engage Delivery Transform Margin - 17.7% Margin - 22.3% Margin - 36.3% Margin - 23.4% Organic growth - 22.3% Organic growth - 14.6% Organic growth - 48.8% Organic growth - 47.4% NEXT15 9

  10. Slide 10: Segmental Strategy: Insight

    SEGMENTAL STRATEGY Accelerate growth of BrandVue product - targeting £20m in subscription revenues by 2025 11% £18.8m Introduce additional ‘self serve’ insight tools to create full suite of insight products Insight Drive US expansion - targeting $50m in revenues by Margin - 17.7% Organic growth - 22

  11. Slide 11: Segmental Strategy: Engage

    SEGMENTAL STRATEGY Leverage leadership in B2B technology sector to sell tightly integrated digital/social product set 55% £91.1m Leverage M Booth/M Booth Health success to build group’s first $100m business - target 2024 Engage Derive 90% of revenues from Packaged products and Margin - 22.3% Organic

  12. Slide 12: Segmental Strategy: Delivery

    SEGMENTAL STRATEGY Build $100m ABM business by 2026 22% £36.3m Develop eCommerce offering to support Adobe, Google and emerging composable commerce market - target $100m in revenues by 2026 Delivery Drive over 50% of revenues from TaPaaS/SaaS Margin - 36.3% Organic growth - 48.8% Expand integrated s

  13. Slide 13: Segmental Strategy: Transform

    SEGMENTAL STRATEGY Build $100m transformation/innovation business by 2025 12% £19.7m Cross sell Customer Insight products/services Transform Expand portfolio of subscription-based digital transformation products and services Margin - 23.4% Organic growth - 47.4% Leverage C level relationships develo

  14. Slide 14: ESG Update

    ESG UPDATE Working on B Corp certification - targeting 2022 Measuring our carbon footprint - assessing how we reduce our operational emissions Starting to assess the carbon impact of the work we do for our clients DE&I action plan in place across the business after major review using external consult

  15. Slide 15: Numbers in Detail

    NUMBERS IN DETAIL INTERIM RESULTS : SEPTEMBER 2021 NEXT 15 15

  16. Slide 16: P&L

    P&L £M H1 2022 H1 2021 GROWTH % Data here Net revenue 165.9 126.2 32% Organic revenue growth/(decline) 23.1% (6.6)% Operating profit 35.0 21.2 65% Operating margin 21.1% 16.8% Profit before tax 35.0 20.7 69% Tax (7.7) (4.1) Minorities (2.0) (0.3) Profit after tax 25.3 16.3 55% Diluted EPS (p) 26.3 17.4

  17. Slide 17: Revenue Bridge

    REVENUE BRIDGE 16.6% (8.2)% 23.1% NEXT15 17

  18. Slide 18: Segmental

    SEGMENTAL Operation Net revenue Organic Operating Margin Margin H1 2022 growth Profit H1 2022 H1 2021 £M £M Customer Insight 18.8 22.3% 3.3 17.7% 10.6% Customer Engage 91.1 14.6% 20.4 22.3% 19.8% Customer Delivery 36.3 48.8% 13.2 36.3% 29.7% Business 19.7 47.4% 4.6 23.4% 23.5% Transformation Head Offic

  19. Slide 19: Cash Flow

    CASH FLOW £M H1 2022 H1 2021 Inflow from op activities 41.6 27.5 Working capital (9.2) 7.0 Net inflow from operations 32.4 34.5 Tax (5.1) (3.0) Net capex (2.9) (2.1) Acquisitions (24.8) (18.4) Net interest and dividends paid (1.4) (1.1) Repayment of lease liabilities (5.2) (5.8) Exchange (loss) / gain

  20. Slide 20: Forecast Commitments

    FORECAST COMMITMENTS 31 July 2021 31 Jan 2021 £M £M FY 2022 5.2 14.0 FY 2023 22.3 18.0 FY 2024 13.7 12.3 FY 2025 11.0 6.8 FY 2026 18.8 11.3 FY 2027 2.1 - FY 2028 1.1 - Total 74.2 62.4 NEXT15 20

  21. Slide 21: Outlook

    OUTLOOK BUSINESS: Double digit growth through 2021 Performance continues to be ahead of market expectations Good acquisition pipeline PRODUCT: Progress being made on productization and client integration Using strong performance as opportunity to invest in product development OPERATIONAL: Progress o

  22. Slide 22: Appendices

    APPENDICES NEXT 15 22

  23. Slide 23: Regional

    REGIONAL Operation Net revenue Organic Operating Margin Margin H1 2022 growth Profit H1 2022 H1 2021 £M £M US 89.3 26.9% 25.2 28.2% 21.9% UK 64.6 19.7% 14.3 22.1% 19.1% APAC 7.3 13.3% 0.9 12.5% 17.7% EMEA 4.7 13.6% 1.1 22.3% 20.5% HEAD OFFICE - - (6.5) - - Total 165.9 23.1% 35.0 21.1% 16.8% NEXT15 23

  24. Slide 24: Adjustments

    ADJUSTMENTS £M H1 2022 H1 2021 Adjusted profit before tax 35.0 20.7 Restructuring - (2.0) Property write back/(impairment) 1.0 (10.9) Deal costs (0.2) (0.2) Share based payments (5.8) (0.2) Acquisition accounting related costs (25.5) (10.8) Furlough (1.4) - Statutory profit/(loss) before tax 3.1 (3.4)

  25. Slide 25: Balance Sheet Summary

    BALANCE SHEET SUMMARY £M 31 July 2021 31 July 2020 Intangible assets 183.8 157.3 Non-current assets 49.8 54.7 Current assets 143.7 100.8 Non-current liabilities (70.9) (97.7) Current liabilities (184.7) (99.6) Net assets 121.7 115.5 Share capital 2.3 2.3 Reserves 118.2 113.6 Minorities 1.2 (0.4) Tot

Next 15 Group — H1 2022 Earnings Presentation on 6ix