Next 15 Group Plc · LSE:NFG

Next 15 — Next Fifteen Communications Group — H1 2011 Earnings Presentation

29 slides from Next 15's earnings presentation, Apr 5, 2011

  1. Slide 1: Interim results 2011

    Interim results 2011 April 5th 2011 1

  2. Slide 2: Agenda

    Agenda • Highlights • Client review • Industry update • Financials • Summary • Appendices 2

  3. Slide 3: Highlights

    Highlights • Organic* growth of 7% • The US, 53% of revenues, is the engine of this growth driven by : -­‐ – an improving US economy; and, – early returns from the group’s digital investment and iniMaMves • AcquisiMons of Blueshirt and Type 3 performing well • Digital investments begin to show retur

  4. Slide 4: Financial headlines

    Financial headlines • Revenue: £40.8m up by 19% (2010: £34.2m) • Headline profit: £3.69m up by 62% (2010: £2.28m) • PBT: £2.49m up by 19% (2010: £2.08m) • EBITDA: £4.5m up by 26% (2010: £3.6m) • Diluted adjusted EPS: 3.63p up by 36% (2010: 2.66p) • Interim dividend: 0.515p up by 8.4% (2010: 0.475p)

  5. Slide 5: Client review

    • Highlights • Client review • Industry update • Financials • Summary • Appendices 5

  6. Slide 6: Sector focus

    Sector focus Quoted PR Largest client group % of group Organic • PR agencies are group revenues growth impacted by the calendar 2010 health of the Next Fi`een Technology 73% 7.0% (1) industries they serve Next Fi`een Technology 73% 3.2% (2) • Next Fi`een has Huntsworth Pharma and healthcare 36% -­‐

  7. Slide 7: Key clients, material relationships

    Key clients, material relaMonships • Next Fi`een’s top 10 clients represent 31% of group revenue in H1 2011 • 2 are non tech clients • More than half top 10 clients held for more than 5 years • 17 clients generaMng revenues over £1m per annum (was 13 in 2010 H1) 7

  8. Slide 8: Industry update

    • Highlights • Client review • Industry update • Financials • Summary • Appendices 8

  9. Slide 9: The Next Fifteen digital approach

    The Next Fi`een digital approach Analogue Digital Philosophy • Group-­‐wide digital skills in PR embedded in the agencies PR Skills • Beyond, OneXeno, Redshi` provide specialist Unchanged embedded (digital, non PR) experMse • Learn from our clients and spread best pracMce Non PR Beyond, Objec@ve One

  10. Slide 10: PR industry update

    PR industry update Search Content Community PR Data 10

  11. Slide 11: Next Fifteen digital impact now

    Next Fi`een digital impact now • Beyond designed a custom video gallery for viewing the ads on web , mobile, and GoogleTV • Consumers could vote on their favorite ad, they were then automaMcally ranked by “most votes” • There were 55.7MM Video Views within the first two days with 10% of those coming

  12. Slide 12: Next Fifteen's digital advantage

    Next Fi`een’s digital advantage • California is home to more internet businesses of scale than California anywhere else in the world base • Next Fi`een’s tech client base have been early adopters of the internet and social media from a markeMng perspecMve…. • …and digital is already boosMng Corporat

  13. Slide 13: Financials

    • Highlights • Client review • Industry update • Financials • Summary • Appendices 13

  14. Slide 14: Income statement

    Income statement FY 11 H1 FY 10 H1 Growth £m £m % Billings 50.1 42.7 17 Revenue 40.8 34.2 19 Adj OperaMng profit 3.9 2.5 58 Adj OperaMng margin 9.6% 7.2% Profit before tax 2.5 2.1 19 Adjusted Profit 3.7 2.3 62 Tax (0.7) (0.6) Retained profit 1.7 1.5 Dividend 0.515p 0.475p 8 Basic EPS 2.79p 2.58p 8 Dilut

  15. Slide 15: Balance sheet

    Balance sheet FY 11 H1 FY 10 H1 £m £m Intangible assets 34.1 27.8 Office equipment 2.6 2.0 Other non-­‐current assets 2.7 2.3 Current assets 31.8 28.3 Non-­‐current liabiliMes (9.8) (13.0) Current liabiliMes (33.8) (20.9) Net Assets 27.7 26.4 Share Capital 1.4 1.4 Reserves 25.1 25.2 Own shares (0.7) (

  16. Slide 16: Cash flow

    Cash flow FY 11 H1 FY 10 H1 £m £m Inflow from operaMng acMviMes 4.9 3.7 Working capital items 0.3 (0.8) Net inflow from operaMons 5.2 2.9 TaxaMon (1.8) (0.7) Net capital expenditure (1.0) (0.5) AcquisiMons (4.3) (4.4) Own shares 0.1 -­‐ Interest (0.2) (0.2) Minority dividends (0.1) (0.1) Financing – ba

  17. Slide 17: Acquisition finance

    AcquisiMon finance • Net debt is £2.7m at 31 January 2011 • Expected conMngent consideraMon payable in next 12m is £3.5m • Expected consideraMon payable 2012-­‐2014 is £8.8m • £5m increased bank faciliMes negoMated to 2014, taking facility to £16m 17

  18. Slide 18: M&A – adding value

    M&A – adding value M Booth key Changes in first 18m • M Booth & Associates acquired for data of NFC ownership esMmated $15.25m (incl performance Staff +22% related payments) in August 2009 Clients over From 6 to 8 • A New York-­‐ based consumer PR $0.5m agency, it is Next Fi`een’s largest Revenues +28

  19. Slide 19: Summary

    • Highlights • Client review • Industry update • Financials • Summary • Appendices 19

  20. Slide 20: Summary

    Summary H1 2011 in review • Results ahead of expectaMons in another record year • 7% organic growth boosted by digital acMviMes and US • Adding value to key acquisiMons in digital and outside tech base Outlook • US market recovery conMnues to outpace UK/ Europe • Tech sector remains resilient • Digi

  21. Slide 21: Appendix

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  22. Slide 22: Next Fifteen – investor snapshot

    Next Fi`een – investor snapshot • Tech focus with consumer pracMce • CEO based in San Francisco, 48 offices in 19 countries • 5 disMnct PR brands (Bite, Text 100, Outcast, M Booth, Lexis) • Other businesses in Investor relaMons, Policy communicaMons, Digital and Research • Top 10 clients account for 3

  23. Slide 23: Recent trading history

    Recent trading history Item 2007 2008 2009 2010 Revenue £59.3m £63.1m £65.4m £72.3m Adjusted profit before tax £5.58m £6.58m £5.25m £6.61m Adjusted profit before tax margin 9.4% 10.4% 8.0% 9.1% % EBITDA £7.2m £7.4m £5.5m £8.4m Net cash from operaMng acMviMes £5.2m £8.5m £4.8m £5.1m Diluted adjusted EP

  24. Slide 24: Group Structure

    Group Structure Next Fi`een Corporate/ Digital/ Technology Consumer Financial Research BlueShirt Beyond Text 100 Bite OutCast Lexis M Booth 463 (76%) (85%) (51%) RedShi`

  25. Slide 25: Business development

    Business development Fast growth Digital products • AcquisiMons from regions and services Q409 categorised into 3 types – Beyond common objecMve to Upstream Asia Type 3 boost growth OneXeno • Names in bold are in the last 6 months • Names in italics are new brands from Blueshirt Group internal resou

  26. Slide 26: Performance indicators

    Performance indicators FY 11 H1 FY 10 H1 • Staff cost to revenue (%) 68.9 69.5 • Adjusted profit before tax margin (%) 9.1 6.7 • Net cash from operaMng acMviMes (£m) 4.9 3.7 • EBITDA (£m) 4.5 3.6 • OperaMng profit by segment (£m) – Technology PR 3.9 3.5 – Consumer PR 1.5 1.1 – Digital/Research consulta

  27. Slide 27: EPS & dilution

    EPS & diluMon • 6.2m shares (11% of shares in issue) held as incenMve shares to employees currently expected to vest following the improved trading performance • 2.5m shares expected to be issued as conMngent consideraMon on acquisiMons • The diluMon impact is 13.8%. 27

  28. Slide 28: Office locations

    Office locaMons US and Canada EMEA APAC San Francisco London Tokyo New York Paris Hong Kong Washington Munich Beijing Boston Milan Shanghai Rochester Madrid Kuala Lumpur Los Angeles Amsterdam Singapore Toronto Stockholm New Delhi Copenhagen Mumbai Helsinki* Bangalore Oslo Chennai Johannesburg Sydney S

  29. Slide 29: End

    nexififteen 29

Next Fifteen Communications Group — H1 2011 Earnings Presentation on 6ix