aining aid image removed L v 4 jenuu FUTURE 7 r 11oday pue oy ANNUAL Sıuno> A3 REPORT 0207 FY 2020 image removed > bef o 4 > iINN ra I < Y A04 20/02/2021 #192 COMPANIES HOUSE Contents Strategic image removed Report 6 GROUP OVERVIEW 8 CHAIRMAN'S STATEMENT 12 OUR VISION AND STRATEGY 14 HOW WEEXECUTE OUR STRATEGY + Protect the core, grow existing brands & audiences e Ongoing diversification e Operating leverage e The Future Playbook 22 LENS ONE - GLOBALLY 24 LENS TWO - DIVISIONALLY 26 LENS THREE- VERTICALLY e Future Passions e Future Living « Future B2B 34 CHIEF EXECUTIVE’S REVIEW 38 RISKS AND UNCERTAINTIES 40 SUMMARY OF PRINCIPAL RISKS HOW WE ENGAGE WITH OUR STAKEHOLDERS 49 COVID-19 RESPONSE image removed 50 CORPORATE RESPONSIBILITY Financial Review 56 FINANCIAL REVIEW 2 / FUTURE PLC ANNUAL REPORT FY 2020 image removed Corporate Governance 62 CHAIRMAN'S INTRODUCTION 64 GOVERNANCE FRAMEWORK 66 BOARD OF DIRECTORS 70 NOMINATION COMMITTEE 74 AUDIT AND RISK COMMITTEE 80 DIRECTORS’ REMUNERATION REPORT 84 DIRECTORS’ REMUNERATION POLICY 94 ANNUAL REPORT ON REMUNERATION 104 DIRECTORS’ REPORT image removed Financial Statements 112 INDEPENDENT AUDITORS’ REPORT 120 CONSOLIDATED INCOME STATEMENT 120 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 121 CONSOLIDATED STATEMENT OF CHANGESIN EQUITY 121 COMPANYSTATEMENT OF CHANGESIN EQUITY 122 CONSOLIDATED BALANCE SHEET 123 COMPANY BALANCE SHEET 124 CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS 125 NOTES TO THE CONSOLIDATED image removed AND COMPANY CASH FLOW STATEMENTS 127 ACCOUNTING POLICIES 134 NOTES TO THE FINANCIAL STATEMENTS 164 NOTICE OF ANNUAL GENERAL MEETING 174 SHAREHOLDER INFORMATION ANNUAL REPORT AND ACCOUNTSFY 2020 / 3 Strategic Report 6 GROUP OVERVIEW 8 CHAIRMAN'S STATEMENT 12 OUR VISION AND STRATEGY 14 HOW WEEXECUTE OUR STRATEGY - Protect the core, grow existing brands & audiences - Ongoing diversification - Operating leverage - The Future Playbook 22 LENS ONE -GLOBALLY 24 LENS TWO DIVISIONALLY 26 LENS THREE - VERTICALLY - Future Passions - Future Living + Future B2B 34 CHIEF EXECUTIVE'S REVIEW 38 RISKS AND UNCERTAINTIES 40 SUMMARY OF PRINCIPAL RISKS 44 HOW WE ENGAGE WITH OUR STAKEHOLDERS 49 COVID-19 RESPONSE 50 CORPORATE RESPONSIBILITY 4 / FUTURE PLC - 4 FourFouriwo Image removed Marcus Rashford photographed for FourFourTwo magazine image removed Eagle Nick Photographer: ANNUAL REPORT AND ACCOUNTS FY 2020 / 5 „3 a Group Overview > Lh >@ o Future plc is a global platform for specialist media, listed on the London Q. 3 a) Stock Exchange (symbol: FUTR). These highlights refer to the Group's he 0 annual results for the year ended 30 September 2020. Media division KPIs Online users! (million) Event attendees (thousand) a 21.8 FY 2020 ME 100 FY 2019 181.0 FY 2019 eee 151 FY 2018 118.0 FY 2018 IA 155 FY 2017 REIN 49.0 FY 2017 76 Total global monthly online users to Future websites. Source: Google Analytics Numberofvisitors to Future events includes 32 in-person events held virtually ‘All figures are excluding forumsas they are non-commercial websites for in FY 2020 due to COVID-19. which Future does not write content or actively manage or monetise. Previously reported figures have been restated to exclude forums. FY 2020 forums only online users are ¥7.1m (FY 2019: 25.3m). Online users figures from FY 2019 have also been restated to exclude SmartBrief newsletter subscribers which have beenreclassified to email newsletters. eCommercetransactions(million) Email newsletter subscribers (million) FY 2020 MEN 13.6 FY 2020 MEN 9.4 FY 2019 EEE 9.8 FY 2019 ME 7.0 FY 2018 En 3.2 FY 2017 = 2.0 Numberof transactions made via affiliate links on Future websites. Total subscribers to Future email newsletters. Data available from FY 2019. Magazine division KPIs Total circulation (million) Total subscribers (million) FY 2020 5.6 FY 2020 ee 1.5 FY 2019 as 1.5 FY 2019 BE 0.9 gn 1.3 FY 2018 EEE 0.9 FY 2017 HERE 1.0 FY 2017 En 0.5 Total of each magazine and bookazinecirculation perIssue. Numberof subscribers to Future magazines perissue. 6 / FUTURE PLC Strategic Report Corporate KPis Revenue(£million) Global audience (million) FV2020 339.6 FY 2020 393.6 FY 2019 | 221.5 FY 2019 269.2 FY 2018? EN 130.1 FY 2018 | 193.4 FY 2017 MN 84.4 FY 2017 an 85.6 Consolidated Group revenue. Includ gazines and bookazinescirculation, online users (excluding forums), eventattendees,social media followers (Twitter, Facebook and YouTube) and newsletter subscribers. Adjusted operating profit (£million) FY 2020 SEs 93.4 FY 2019 52.2 FY 2018 En 18.5 FY 2017 EB 8.9 Adjusted operating profit represents earnings before share-based payments (relating to equity-settled awards with vesting periods longer than 12 months) and related social security costs, interest, tax, amortisation of acquired intangible assets, fair value movements on contingent consideration (and unwinding of associated discount) and currency option, and exceptionalitems, and any related tax effects. Adjusted operating profit margin Reported operating profit (E£million) FV 2020 Os =—23% FY 2020 eee 50.7 N09 eee 24% FY 2019 MN 26.7 FY 20187? IE 14% FY2018 MN 5.3 FY 2017 nn 11% FY 2017 1 0.8 Adjusted operating profit margin is adjusted operating profit asa Consolidated statutory operating profit. percentage of revenue. Adjusted free cash flow (£million) Free cash flow (£million) FY 2020 EEE 96.0 FY 2020 EEE 87.9 FY 2019 III 53.7 FY 2019 EEEMEREE 49.7 FY2018 mm 17.4 FY2018 MN 12.3 FY 2017 MM 15.3 FY 2017 MN 10.2 Adjusted free cash flow is defined as adjusted operating cash inflow less Free cash flow is defined as a statutory operating cash inflow less capital expenditure. Adjusted operating cash inflow represents operating capital expenditure. cash inflow adjusted to exclude cash flows relating to exceptionaliterns and settlement of employer's social security costs on share-based payments, and to include lease repayments following adoption of IFRS 16 Leases. Adjusted diluted EPS (p) Leverage FY 2020 74.7 FY 2020 EEE : -60x FY 2019 47.5 FY 2019 ME -74X FY 2018 = 24.3 FY 2018 EEE -86x FY 20177 a 18.4 FY 2017 MIN lx Adjusted dituted EPS represents adjusted profit after tax divided by the For FY 2020 leverage is defined as debt as a proportion of EBITDA adjusted for weighted averagedilutive numberof sharesat the year end date. the impact of IFRS 16 and including the 12-monthtrailing impact of acquired businesses(in line with the Group's bank covenantsdefinition). For previous years leverageis defined as total net debt divided by adjusted EBITDA. Notes 2. FY 2018 r d for IFRS 15 from s with 3.R d for FY 2018 rights issue. ANNUAL REPORT AND ACCOUNTS FY 2020 / 7 +4 c Vv Chairman’s = v u. 6 Pe) u a Statement c © a E © Ral Richard Huntingford Vv Chairman ear Shareholders, eCommerce and events. Our innovative and scalable In this highly unusual and challenging technology stack is critical in our ability to respond to the year, it is my pleasure to report that Future changing media landscape; our eCommerce capability has continuedto thrive, with Future's gives our intent audience what they need to be guided content now read by one in three people in the UK and US. through online purchases, and our advertising tech stack Global audiencesincreased rapidly during FY 2020 froma provides advertising clients with high-value targeted mix of underlying growth in audience engagement, audiences. through new launches and acquisitions, and the increased consumptionofdigital content during the pandemic. Value-led business This growth in audience has helped tead to another As a value-led business, we are driven by our purpose and exceptional year of results. Revenuefor the year increased defined by our values. We have continued this year to focus by 53% to £339.6m,with organic revenue growth of 6% on embedding our value-based culture. Our values support driven by strong organic Media revenue growth of 23% our strategy and the way we execute it, so we rely on our which offset the impact of COVID-19 on Magazines Future Playbook to bring alignment in the way we behave revenue, which declined organically by 29%. Adjusted and work. Despite the social, economic and environmental operating profit increased 79% to £93.4m. These results challenges ofthis year beyond just the pandemic, we have weredelivered despite the unprecedented challenges seen the positive effects of our staff living our values. These arising from the pandemic. challenges have brought out the best in our staff; from innovative solutions to continuing to deliver high-quality Clear strategy content and experiences to our communities and our The Group continues to successfully execute on the clients, to support and engagement of cultural change, strategy of being a global platform for specialist media, inclusion and diversity. We recognise thatto continue the with scalable, diversified brands, and this has resulted in success of the business we must continue to facilitate a strong financial performance and total shareholder value-led culture, encouraging and enabling our return. employees to operate in this way. Wemaintain our focus on our purpose, which is to change people's lives through Y1 Stakeholder engagement sharing knowledge and expertise with pages 44 to 48 others, making it easy and fun for them to do what they want. The proven success of As you will read later in this Annual Report, our strategy makesit enduring. Our our value-led culture was very much to the fore commitment to producing high-quality in the boardroom, when the pandemic unfolded, content, delivered across multiple platforms, fi as we soughtto understand, respond to and helps us expand the loyal communities and balance the needsandpriorities of our different audiences we've built up over many years.