Next 15 Group Plc · LSE:NFG
Next 15 — FY2023 Earnings Presentation
31 slides from Next 15's earnings presentation, April 2023
Slide 1: Preliminary Results: April 2023
NEXT15 PRELIMINARY RESULTS : APRIL 2023 NEXT15 NEXT15
Slide 2: Agenda
AGENDA Results summary and introduction Business progress and review Strategy update ESG update Numbers in detail NEXT15 2
Slide 3: Vision & Mission
VISION & MISSION NEXT15 NEXT15 3
Slide 4: Our Vision
OUR VISION TRADITIONAL GROWTH MARCOM CONSULTING CONSULTING CONSULTING NEXT15 4
Slide 5: What is Next 15?
WHAT IS NEXT 15? Next 15 operates across four divisions and has offices across the world. Our divisions are: 1. We deliver business insights through data analytics and online research 2. We optimize digital brand assets to drive long term customer engagement 3. We optimize customer delivery (aka sales
Slide 6: Results, Insights & Progress
RESULTS, INSIGHTS & PROGRESS NEXT15 NEXT15 6
Slide 7: Results Highlights
RESULTS HIGHLIGHTS Net revenue up 56% Adjusted operating profit up Margin performance Adjusted diluted EPS up (20.7% organically) to 44% to £114.2m (2022: £79.3m) of 20.2% (2022: 21.9%) 35% to 80.4p (2022: 59.7p) £564m (2022: £362m) Strong performances across Net cash as at 31 Jan 2023 £26.1m Final d
Slide 8: Resilience of Next 15
RESILIENCE OF NEXT 15 CUSTOMERS PEOPLE ● 131 customers spent more than $1m in FY23 ● Revenue per head (£141.7k) ● 68% of our top 50 clients have been with us for more than 5 years ● 93.2% of Senior Brand Leadership ● Progression in diversifying revenue sources have been in their roles for 5+ years ●
Slide 9: Resilience of Next 15: Products / Innovation
RESILIENCE OF NEXT 15 PRODUCTS / INNOVATION ~75% of revenues are not based on time and materials Key products: ● BrandVue ● PlanApps ● Unilyse ● Prism ● Seer ● Trustec ● 2401 ● Partnermarketing.com NEXT15 9
Slide 10: Segmental Performance
SEGMENTAL PERFORMANCE Net Revenue £52.0m £274.9m £102.1m £134.8m % of Total Net Revenue 9.2% + 48.8% + 18.1% + 23.9% INSIGHT ENGAGE DELIVERY TRANSFORM Margin : 21.3% Margin : 20.2% Margin : 29.6% Margin : 32.5% Organic growth : 10.2% Organic growth : 9.3% Organic growth : 12.0% Organic growth : 83.3
Slide 11: Insight Segment Summary
INSIGHT SEGMENT SUMMARY Savanta has shown consistent organic and inorganic growth from £1m on acquisition in FY15 to projected revenue of approx £50m in FY24 at a 20% margin Diversified mix of clients and products across sectors and UK / US Opportunity to scale US from 30% of Group revenue to 50% in
Slide 12: Engage Segment Summary
ENGAGE SEGMENT SUMMARY Segment of the Group most impacted by the economic and big Tech uncertainty although ~80% of revenue committed for FY24 Focus on the operating models; in times of revenue uncertainty have cost levers to maintain margin at 20% Expect to be ~45% of Group’s revenue by end of FY24
Slide 13: Delivery Segment Summary
DELIVERY SEGMENT SUMMARY Has seen very strong organic growth due to highly measurable ROI, particularly during Covid Good growth has continued in FY23 as traditional routes to market have reopened Margin consistently 30% and above as heavy users of tech and data Expecting another positive year due t
Slide 14: Transform Segment Summary
TRANSFORM SEGMENT SUMMARY M49 continues to show exceptional growth on back of strong performance from the core ~$40m revenue with a much more retainer based model as well as previously announced material ($450m) 5 year contract win Material contract grows by $30m in FY24 Margin for whole of M49 expe
Slide 15: Engine Progress
ENGINE PROGRESS Acquired Engine for £67.3m cash on completion in March 2022 funded by £50m cash placing Separated out the three business, MHP (Comms), Transform (Business Transformation) and merged Creative with ODD to form House 337 (Creative) MHP and House 337 in Engage segment whilst Transform in
Slide 16: Business Progress
BUSINESS PROGRESS NEW CAPABILITIES NEW CLIENTS NEW EXPERTISE Bought Engine UK with 3 Wins 3 new Board members major businesses: MHP Group, House 337 & Paul Butler (NED) Transform President & Chief Transformation Officer at New America Previously COO at WPP data and strategy agency: sparks & honey Made
Slide 17: Strategy Progress Update
STRATEGY PROGRESS UPDATE Full review of strategy (including data strategy) carried out Result: ● Accelerating bolt-on acquisition strategy for brands and redesigning Next 15 team to support more activity. Focus on data, specialist skills and scaling ● Continuing to look for strategic group-level acq
Slide 18: AI Update
AI UPDATE A new Industrial Revolution with far-reaching consequences for the world What we’re doing: ● Exploring the new AI tools in all our businesses to see how they can improve efficiency, and offer new products and creative ideas for our clients ● Using our collective intelligence to learn from ea
Slide 19: ESG Update
ESG UPDATE Progressing B Corp brand by brand following discussions with B Lab Board ESG Committee established elvis became a certified B Corp. Refined the role of our EDI Council and allocated a board member (Paul Butler) to it Completed a materiality assessment to establish the most material ESG topi
Slide 20: Numbers in Detail
NUMBERS IN DETAIL PRELIM RESULTS : APRIL 2023 NEXT15 NEXT15 20
Slide 21: Adjusted P&L
ADJUSTED P&L £M 2023 2022 GROWTH % Data here Net revenue 563.8 362.1 56% Organic revenue growth 20.7% 26.1% Operating profit 114.2 79.3 44% Operating margin 20.2% 21.9% Profit before tax 112.5 79.3 42% Tax (26.3) (17.2) Minorities (1.4) (3.6) Profit after tax 84.8 58.5 45% Diluted EPS (p) 80.4 59.7 35%
Slide 22: Revenue Bridge
REVENUE BRIDGE 69.7 9.1% 39.8 25.8% 20.7% Revenues £m 22 NEXT15
Slide 23: Segmental
SEGMENTAL Net revenue Operating Organic Margin Margin Operation 2023 Profit growth 2023 2022 £M £M Customer Insight 52.0 10.2% 11.1 21.3% 21.4% Customer Engage 274.9 9.3% 55.4 20.2% 21.6% Customer Delivery 102.1 12.0% 30.2 29.6% 35.6% Business Transformation 134.8 83.3% 43.9 32.5% 29.0% Head Office - -
Slide 24: Cash Flow
CASH FLOW £M 2023 2022 Inflow from op activities 119.6 88.6 Working capital (24.4) 0.2 Net inflow from operations 95.2 88.8 Tax (20.3) (14.1) Net capex (7.0) (5.9) Acquisitions (97.5) (24.1) Net interest and dividends paid (14.8) (11.0) Net proceeds from share placing 48.6 - Repayment of lease liabili
Slide 25: Adjustments
ADJUSTMENTS £M 2023 2022 Adjusted profit before tax 112.5 79.3 Engine restructuring (2.3) - Property impairment (4.7) (0.2) Deal costs (5.5) (0.5) Charge for one-off employee incentive schemes (0.6) (5.9) Acquisition accounting related costs (89.3)* (151.9)* Gains on investment activities - 0.5 Furlo
Slide 26: Forecast Commitments
FORECAST COMMITMENTS 31 Jan 2023 31 Jan 2022 £M £M FY 2023 - 36.0 FY 2024 45.4 30.8 FY 2025 62.8 45.8 FY 2026 48.5 39.7 FY 2027 47.7 31.5 FY 2028 39.4 31.3 Total 243.8 215.1 26 NEXT15
Slide 27: Outlook
OUTLOOK BUSINESS: Performance continues to be robust across all four business segments Significant contract held by Mach49, other new clients wins such as Morrisons for SMG, and acquisition of Engine underpin our confidence for further growth in FY24 Mindful of the current economic backdrop, given the
Slide 28: Appendices
APPENDICES NEXT15 NEXT15 28
Slide 29: Next 15 Board
NEXT15 BOARD Penny Robyn Perriss Helen Hunter Dianna Jones Paul Butler Ladkin-Brand (Audit) (Rem) (ESG) (ESG) (Chair) Governance Data Insight B Corp Business Pricing Transformation Tim Dyson Peter Harris Jonathan Peachey (CEO) (CFO) (COO) 29 NEXT15
Slide 30: Regional
REGIONAL Operation Net revenue Organic Operating Margin Margin 2023 growth Profit 2023 2022 £M £M US 293.2 28.2% 93.5 31.9% 29.3% UK 241.0 11.3% 42.5 17.6% 22.5% APAC 18.0 11.0% 1.8 9.9% 9.3% EMEA 11.6 16.3% 2.8 24.3% 24.9% HEAD OFFICE - - (26.4) - - Total 563.8 20.7% 114.2 20.2% 21.9% 30 NEXT15
Slide 31: Balance Sheet Summary
BALANCE SHEET SUMMARY £M 31 January 2023 31 January 2022 Intangible assets 274.1 183.1 Non-current assets 108.0 83.1 Current assets 212.3 178.6 Non-current liabilities (241.0) (203.0) Current liabilities (239.0) (180.3) Net assets 114.4 61.5 Share capital 2.5 2.3 Reserves 111.4 57.6 Minorities 0.5 1