Future PLC Capital Markets Day
6 t h F e b r u a r y 2 0 2 0 Today’s Speakers
Zillah Byng-Thorne Penny Ladkin-Brand Kevin Li Ying Aaron Asadi Marcus Adolfsson Chief Executive Officer Chief Financial Officer Chief Technology Officer Managing Director of Senior Vice President, eCommerce Future Labs
Chris Convey Matthew Pierce Sam Barcroft Kevin Michaluk Senior Vice President, Brand Director Barcroft Studios CEO Strategy & Execution, B2B Future Labs 2 Agenda
Execution of 3:00pm Acquisition 4:30pm strategy Playbook Chris Convey Zillah Byng-Thorne New Video Revenue 4:50pm Importance of 3:15pm Sam Barcroft diversification Marcus Adolfsson
Organic growth 3:25pm Global operating 5:00pm through audience model Kevin Michaluk & Aaron Asadi Penny Ladkin-Brand
Today’s growth 3:55pm Conclusion & 5:10pm from past initiatives questions Matthew Pierce & Kevin Li Ying Zillah Byng-Thorne
Coffee Break 4:15pm Drinks
3 Execution of strategy Zillah Byng-Thorne Chief Executive Officer
4 Executive Summary Delivering sustainable growth
A tried and tested four-step process to deliver sustainable organic growth over the long term.
The Future Horizon Focussed Annual Playbook Planning Execution Planning & Organisational Ensuring the Once aligned and Review alignment around optimal mix of clear the focus is common short, medium on executing well Cycle framework and long term To enable delivery planning to and course deliver correction as sustainable events unfold
growth Business Strategy Overview Growth &
5 The Future Playbook
6 The Future Playbook
Why do we exist? How will we succeed? 1 Our Purpose 4 Our Strategy
How do we behave? What’s important 2 Our Values 5 right now? Our Current Plan
What we do? Who must do what?
3 Our Business Model 6 Our Responsibilities Business Strategy Overview Growth &
7 Why we exist Our Purpose
We change people’s lives through sharing our knowledge and expertise with others, making it easy and fun for them to
do what they want. The Future Playbook Future The
8 How we behave Our Values
We are part of the audience and their community.
We are proud of our past and excited about our future.
We all row the boat.
It’s the people in the boat that matter.
Results matter; success feels good.
The Future Playbook Future The Let’s do this!
9 What we do Our Business Model
We entertain, inform and engage our audiences with content that connects in specialist verticals via magazines, websites, email, video and events; we monetise this via paid-for content, media advertising sales, ticket sales
and eCommerce. The Future Playbook Future The
10 How we will succeed Our strategy
Future is a global platform for specialist media driven by technology with diversified revenue streams.
We create loyal communities and fans of our brands by giving them a place they want to spend their time and meet their needs.
We diversify our monetisation models to create significant revenue streams.
We leverage our data and analytics to drive our strategy
We expand our global reach through organic
The Future Playbook Future The growth, acquisitions and strategic partnerships. 11 What’s important right now Our 2020 Plan
We execute our strategy through a series of intentional steps, we call this ‘what's important right now’.
Be #1 Become the global leader in our specialist markets, growing our audience through content and platform. Horizon 1
Unlock new brand potential Deliver on our promise to grow audience, advertising, and eCommerce effectively and efficiently across acquired and new brand launches. Horizon 1 & 2 Supercharge the support Transform Future’s back office operations to improve scalability and deliver enhanced, sustainable partnership to the core. Horizon 2 & 3
Evolve the Future Wheel Grow our expertise and develop new ways to monetise
The Future Playbook Future The our audience, from new verticals to new products. Horizon 2 & 3
12 Who must do what Our Responsibilities
A core part of the strategy is alignment of objectives and performance management.
We focus on helping everyone be their best self at Future, while aligning our rewards such that success is based on Future performance rather than the individual. This creates alignment, through shared goals and success.
As I get better, Future gets better. The Future Playbook Future The
13 Horizon Planning
14 Mckinsey Planning Horizons
CREATE OPTIONS FOR FUTURE BUSINESS
NURTURE EMERGING BUSINESS FOR TOMORROW’S By determining CASH FLOW “what's important GENERATE HORIZON 3 TODAY’S CASH 24 TO 36 MOs. right now” we FLOW, DEFEND AND EXTEND CURRENT ensure we focus on BUSINESS HORIZON 2 growth for today 12 TO 24 MOs. and tomorrow. YOU NEED TO INVEST IN HORIZON 1 INNOVATION ACROSS ALL
0 TO 12 MOs. THREE TIME HORIZONS GROWING PROFITS
Horizon Horizon Planning EXPECTED TIME HORIZONS 15 Focused Execution
16 Same principles, greater ambition
The principles which underpin our strategy have not changed since 2016: be a market leader, grow revenue streams organically, and accelerate growth with value add acquisitions. Only
our ambition is greater. Focused Focused execution
17 A series of intentional steps What’s important right now
Our strategy is broken into a series of intentional steps each year, this is what’s Important right now.
Ongoing execution demands that today’s activities are aligned with
tomorrow’s ambition. Focused Focused execution
18 Execution of 2020 strategy Underpinned by four core pillars
Grow our existing Launch new brands Continued Ongoing brands and & verticals diversification Investment audiences
Extension into new categories on Scalable, lean and robust platform, Acquisition of SmartBrief Acquisition of Cycling, MoNa and legacy brands driving double digit with eight sites migrated to introduces a material new SmartBrief all enabled Future to growth Vanilla in the last six months. revenue stream in email scale opportunity Overall 24 websites on platform marketing Launched new mainstream Continued investment in our cycling site to broaden audience Continued improvements in 54% of revenue now delivered technology, development of reach eCommerce and digital from the US Hybrid & Flexi during the year, in advertising, including addition to increased investment Launched new 5G Radar brand to development of video & image-led Investment in headcount to scale in internationalisation of grow B2B business and play to solutions our Canadian opportunities technology stack Future expertise Standardising the model - Ongoing trials with, TechRadar Launch of three new websites in Relaunch of Purch forums, in Playbooks rolled out across Purch, Hispanic, Language formats, last six months addition to three new forums, Cycling and MoNa Marketing intent, Podcasting, embracing the community Video commerce Continued investment in our SmartBrief adds significant off- people, headcount increased 22%
platform expertise and client base YoY Focused Focused execution
19 Fast scaling Alignment of culture
A fast-scaling business means we need people to hit the ground running, identifying quickly who will fit from a culture and capability perspective. We might not be right for everyone, and that’s okay
We use a number of tools to identify Future Pirates, from personality profiling and behavior-based interviews to in- network referrals and peer reviews.
We onboard people well and provide support around development, induction and ongoing team engagement around
the things that matter most. Focused Focused execution
20 Executing our current plan Be #1
No.1 Already No.1 Organic growth UK UK & US 2m 3m underpins our 3m 3m leadership positions, while acquisitions 900k
accelerate the 100k
strategy FY17 FY18 FY19 FY17 FY18 FY19 Photography Global Online Users Creative Global Online Users
No.1 US 130m No.1 US 32m Space 30m Already No.1 in 26m 89m PC Gaming 21m 18m Already No.1 UK 26m
200k
FY17 FY18 FY19 FY17 FY18 FY19 FY17 FY18 FY19 Technology Global Online Users Games & Entertainment
Focused Focused execution Global Online Users Knowledge Global Online Users
21 Executing our current plan Unlock new brand potential
We take existing brands and
unlock their full potential. Focused Focused execution
22 Executing our current plan Supercharge the support
Our operating model delivers efficiencies which enable us to optimise our core business and acquisitions.
?? Focused Focused execution
23 Executing our current plan Evolve the future wheel
We have 9 meaningful revenue streams.
Service & Service Others & Others 6% Events 16% 7% Digital Ads Membership We grow new revenue Indirect & Subs streams both organically 8% Print and by acquisition, at a 20% Advertising 20% Content constant rate. eCommerce Data & Lead Gen 11% Newstrade
17% 12% Digital Ads Digital Ads
Direct Off Platform Focused Focused execution At constant rate, Proforma includes full year revenue for SmartBrief 24 Executing our current plan Acceleration of our strategy via M&A
The right acquisition for Future is one we believe can uniquely create additional value while accelerating our strategy
Ability to add value Clear criteria Speedy integration
Use data and analytics to identify Clear investment criteria Integrate rapidly and efficiently assets where we can add value. focussing on financial and non- financial metrics Have a clear plan, involve the Opportunity to increase right people early (but only operating leverage Focus on people & IP them) Free up resource from BAU to Digitizing and growing brands Look at longer term NPV/Value focus on delivering integration through our platforms multiples Identify opportunities for further Hurdle rates vs where we want additional value creation
to be, not our current valuation Focused Focused execution
25 Constant review to ensure timely course correction
26 Established business planning cycle and review
Annual Strategy Quarterly Business Refresh Reviews Review of performance vs What’s Strategy check-in Important for year Investment review Update of strategy based on market factors What's important right now update
Agree new year What’s Important New news right now
Ongoing cycle balances short and long term goals Weekly Trading Monthly Business Updates & Reviews & Steering Meetings Steering Meetings Immediate trading focus Progress on execution of strategy
Opportunity to lean in where winning Update on financial performance
Course correct where problems Update of people and resource needs
Ensure strategic initiatives get focus Ensure tactical and strategic are
being delivered Constant review to ensure timely course timely course ensure to correction review Constant
27 Summary
Clear strategy, aligned with organisation, with a focus on execution and results.
Strategy Alignment Execution
Scalable platform Blend of people Go to market fast + technology + processes Focus on short and Ability and agility to pivot as medium term Delivering operating market requires margin/efficiency Delivering more spokes & more Organic growth accelerated via
wheels Efficient, faster, accurate, precise acquisition Constant review to ensure timely course timely course ensure to correction review Constant
28 Importance of Diversification Marcus Adolfsson Senior Vice President, Future Labs
29 Delivering more spokes & more wheels is core to Future’s strategy
Diversified Diversified Diversified Footprint Verticals Revenue
Streams Importance of Diversification Importanceof
30 Diversification allows us to better approach any challenge.
Strong Strong Defence Offense
Against the impact of Seeding Horizon 3 detrimental changes opportunities that to any one revenue enable continued
stream organic revenue growth Importance of Diversification Importanceof
31 Importance of Diversification Diversified Footprint
32 We run our operations across two geographies
Revenue from the US is now at 54%, up from 31% in 2018, demonstrating our ability to materially diversify geographically. 46% 54% UK US Reduces risk from political or economic instability in any particular region
US organic growth higher than any
other region Diversified Diversified Footprint
33 Partners extend audience to non-English markets
Unlike other media publishers Asia Europe who only license their brands, India Danmark we provide our partners with complete systems, similar to a UAE Suomi franchise model. Singapore Norge Bahrain Sverige Three new partners in India, Benelux Kuwait Italia and Italy Oman Nederland Launched multi-language site in Nordics Qatar België (Nederlands)
Franchise like model protects Saudi Arabia Deutschland margin as local partners assume the
expansion risk Diversified Diversified Footprint
34 Importance of Diversification Diversified Verticals
35 Creating content across many verticals
12% Through diversification, 64% Other of revenue now comes from outside of Technology 15% 36% vertical. B2B Technology
4% Launching multiple brands within a Photography vertical enables “Search 1-2-3” strategy 5% Home Interest Diversification across multiple content verticals and brands reduces risk of search 7% 12% engine algorithm updates affecting overall Music Hobbies traffic materially 10% Games & Entertainment Diversified verticals allows for faster
audience growth Diversified Diversified Verticals FY19 Revenue by Vertical
36 Our scale
An average month at Future in 2019
10,000 9,000 14,000 8,000 Published pieces Updated existing Posted pieces of Published of new written pieces of written content to social newsletters content content platforms
600 78 4 Published Published magazine Hosted major videos and bookazine issues industry events
across 185 Diversified Diversified Verticals Brands
37 Hobbies & Knowledge +10% 12% Organic Online of FY19 Revenue Audience FY19
Vertical lead by Live Hobby brands such as Science and Space.com. BikePerfect offer Space is exciting again! significant eCommerce
growth opportunities Diversified Diversified Verticals
38 Photography +331% 4% Organic Online of FY19 Revenue Audience FY19
DigitalCameraWorld.co The Photography Show m is the number one remains the largest photography website in photography exhibition the UK and number two in the UK and attracted in the US over 32,000 visitors last
year Diversified Diversified Verticals
39 Home Interest +41% 5% Organic Online of FY19 Revenue Audience FY19
Delivered significant The Homebuilding & audience and Renovating Show is the ecommerce growth on number 1 homebuilding Realhomes.com! show in the UK with
over 100,000 attendees Diversified Diversified Verticals
40 Games & Entertainment +31% 10% Organic Online of FY19 Revenue Audience FY19
GamesRadar+ last year PC Gamer is the grew its audience by number 1 global PC
72% gaming website Diversified Diversified Verticals
41 Technology +28% 36% Organic Online of FY19 Revenue Audience FY19 56% w/ acquisitions
Number 1 consumer Continuous stream of technology publisher in new content UK and US online opportunities, 5G,
streaming Diversified Diversified Verticals
42 Music +42% 7% Organic Online of FY19 Revenue Audience FY19
The music vertical caters Guitarworld and to the needs of both MusicRadar holds 2 and music fans and 3 positions in Music musicians themselves Making websites in the
UK and US Diversified Diversified Verticals
43 B2B Technology | Media | Entertainment | Prosumer | Education +20% 15% Online Audience of FY19 Revenue FY19 9% Organic ~25% on pro forma basis Connects advertisers Audience smaller but with decision makers by more valuable on per delivering exclusive user basis
industry insight Diversified Diversified Verticals
44 Importance of Diversification Diversified Revenue Streams
45 Nine significant revenue streams at different stages of maturity
We continue to invest in higher Service & Service margin Horizon 1 revenue Others & streams such as eCommerce, Others 6% Events which grew organically at 73%. 16% 7% Digital Ads Membership Over 70% of revenue now outside of print Indirect & Subs
+73% eCommerce organic growth* 8% Print 20% Advertising +25% digital advertising organic growth* 20% Content eCommerce Data Strategy calls for continued diversification via & Lead Gen 11% new revenue streams either through Newstrade acquisitions (such as email marketing via SmartBrief and video via Barcroft) or internally 17% 12% Digital Ads Digital Ads Direct Off Platform
*At constant rate, Proforma includes full year revenue for
Diversified Diversified Streams Revenue SmartBrief
46 Formalize the internal development of new revenue streams
FUTR Labs has built a playbook that industrializes Horizon 3, by identifying opportunities and then cost effectively innovate the idea into a minimum viable product. Rapidly try a lot of things
Ideas come from Graduate! everywhere Becoming a proper product
Identify Innovate Incubate Integrate Opportunities and Cost effectively Support projects Transition successful spark change innovate into a until validated projects into minimum viable broader Future
product organization Diversified Diversified Streams Revenue
47 Future Labs
Off Platform eCommerce Syndicating our recommendation content to partners, such as retailers.
Launch partner of Amazon’s Additive revenue as the syndication program, where users’ search journey our recommendations lives started on Amazon. inside Amazon’s search
results. Diversified Diversified Streams Revenue
48 Future Labs Scaling Lead Generation Capturing in-market customer information and monetizing it multiple times at high cost-per-lead.
Future’s advantages: Targeting our growing B2B vertical as a priority. High Authority Brands Scale lead gen business Content Expertise from a position of strength.
Strong Commercial
Relationships Diversified Diversified Streams Revenue
49 Summary
Diversified Diversified Diversified Footprint Verticals Revenue Streams
By running our operations 64% of revenue comes outside Nine significant revenue across the UK and US, we of the technology vertical, streams at different stages of reduce the risk from political such as hobbies, home maturity or economic instability in any interest, and B2B.
particular region. Diversified Diversified Streams Revenue
50 Data-Driven Content Strategy Kevin Michaluk Strategy & Execution, Future Labs
51 We are not like other publishers, where editors exclusively determine what to write about and what to skip. Our data-led audience strategy helps us work out what our readers truly want to read and then our editors and creators work their craft to bring it to life with
authority, opinion and passion.
Driven Content Strategy Content Driven
- Data
52 Our Target Audience Samsung Galaxy Watch vs Apple Watch? What are the best MicroSD cards for the Nintendo Switch? What’s the battery life on Beats Solo headphones?
Our most valuable audiences have intent behind the content they are viewing. We’re not just holding their attention, but helping them accomplish an
objective.
Driven Content Strategy Content Driven
- Data
53 How we reach them
Intent-based Feed-based
Quality Catchiness
Our results prove it is less Rewards volatile to scale quality content than it is to fight ‘Service me’ ‘Entertain me’ for attention. The best Need source for non-volatile and sustainable content is Search brand Mega brand or or bust bust Google search. Reqs.
Driven Content Strategy Content Driven Analytical Volatile
-
Character Data
54 Continued Growth in Search Google’s search algorithm aims to 90m surface the highest authority, highest quality content and sends the user to our websites.
40m
Legacy Future site sessions driven from search engines
Driven Content Strategy Content Driven -
Data Oct 15 Algorithm update Sep 19
55 Data Leads Content Planning
We triangulate data from Retail Interest several sources to generate high potential SEO content ideas. Data SEO data shows us the lay of the land we are entering into.
Consumer Retail interest data shows us the Insight volume of interest around topics. Tools Insight tools shows us consumer
data and trends.
Driven Content Strategy Content Driven
- Data
56 Content Architecture
Evergreen Content 19% Help & Troubleshooting 38% Not all content we Buyer’s Guide & Shopping $$ publish has the same Content revenue potential, $$$ however all content is designed to maximize $ the effectiveness of our top earners. 43%
News & Editorial Driven Content Strategy Content Driven
- Content Publishing Mix 2019
Data Sample: Android Central, iMore, Windows Central Data
57 Today’s Most Valuable Content
Revenue from shopping content compounds over time. Content paid for in 2017 still drove revenue in 2019.
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
Q3 2018
Q2 2018
Q1 2018
2010-2017
Driven Content Strategy Content Driven -
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Data Data Sample: Android Central, iMore, Windows Central
58 The Consumer Journey
Regardless of where a user starts their consumer journey, at some point during their research they’re likely going to pass through Google.
Today’s consumer journey is non- linear and the user, not the marketer, is in control of it.
87% of shoppers now begin product searches online.
As product purchases become
more expensive and considered, a Driven Content Strategy Content Driven
- consumer will do more research. Data
59 Planning Content for the Consumer Journey
Awareness I want to How can I do?
How does it work? When we focus on the Can I do? Interest needs of the consumer,
What is the best? we win. Is it worth it? Consideration Users move through the consumer journey by making decisions. Does it work with? Decisions get made through research and answering questions. What colors? Preference
What is the best price? Driven Content Strategy Content Driven
- Purchase Data
60 Addressable Audience / Consumer Pool
Awareness Best Tech to Lose Weight, Get Fit in 2020!
Interest Best Fitness Trackers with We want to be the last Heart Rate Monitors
port of call for your Consideration purchase decision. Fitbit Versa vs. Fitbit Ionic - Which Should You Buy? This type of user need’s thinking allows us to conceive of literally hundreds of content Preference ideas for almost any product or service. Fitbit Versa Review: What a Difference a New Design Makes
Purchase How to Measure Your Wrist
Driven Content Strategy Content Driven Before Buying a Fitbit -
Data Post-purchase Best Replacement Bands for Fitbit Charge 3 in 2020 61 Insights Drive Growth
With the launch of Disney Plus we ranked #1 in Google for what became the most searched keyword in the US in 2019.
A data insight in 2018 that streaming service content was trending prompted us to start covering this content in earnest.
Building on this insight, in 2019 we applied our audience development strategy to Disney+ to build and fortify rank in Google
for the upcoming launch of Disney Plus.
Driven Content Strategy Content Driven
- Data
62 What We Learned
A Data-Driven Content Strategy and Workflow Yields Many Paths to Continued to Growth.
Our Target Audience How We Reach Them Data Leads Planning Our most valuable readers Google is the most reliable We triangulate data from many have intent. source from which to grow this sources to come up with high audience. potential content ideas.
Content Architecture Consumer Journey Insights Drive Growth Optimizing our content mix Putting ourselves in the shoe’s of Following data trends and allows us to fully leverage the the consumer and answering anomalies allows us to spot authority we have built in each their questions drives high value opportunities early and take vertical and brand. Shopping intent traffic. action on them to continuously content offers incredible grow the business. opportunities for continued
revenue growth.
Driven Content Strategy Content Driven
- Data
63 Adjacent Markets Aaron Asadi Managing Director of eCommerce
64 Moving into New Markets is what we do
Unlike many other media 2020 businesses, we have never been restricted to certain categories or markets.
Moving into new areas is what Future has always been about
Started in just one market now in multiple markets across multiple platforms and territories
This has been achieved through: Solid market research Product testing Scaling fast
1985 Adjacent Markets Adjacent
65 Adjacent Markets How we assess
66 Acceleration of our strategy via M&A
We know a lot about our audience because we are the audience – our games writers are gamers, our music editors are musicians, homes teams are homebuilders. We don’t just look outward for insight, we can look within.
Our compass is our Making the most of audience data
Who are they? Are we sure we We learn a great deal about the How do our know? How are they changing? audience and then we use that What do they now want? information to profile personas customers match and design content and what’s happening We have many ways to find out, products around those. right now? from our own panel, Illuminate, to our ad data, online analytics, We combine this with wider social engagements and surveys. insights – such as retail reports
from Hitwise. How we assess How we
67 What we gather
Using our data and research, we are able to learn about our audience.
Age Gender Territory
Interests Opinions Travel Plans
Preferred Propensity to Profession companies and spend retailers
Credit card Eating and spend drinking habits
Scale protects us against evolving advertising standards. How we assess How we
68 How we gain insights
We gain insight into products that might not otherwise be considered high on the list of a specialist consumer.
Specialist sites a gateway for We see how products consumers to do more than perform on Google… before. …and how they convert on Gain insight into retailer-driven platform... purchases rather than interest- driven. ...fundamentally we learn, away from our established Learn about interest in newly core: do we have the ability to
popular products eg Instapot. engage? How we assess How we
69 Adjacent Markets How we use our insight
70 The advantage of our domain authority
After 15+ years of answering questions well, our sites are trusted.
This is an important part in our Proven ability to extend into recipe for success. You can’t new areas… cheat this – it takes time and expertise to achieve what we ...Tom’s Guide had zero have. laptop content – was ranking in top spots in US Domain performance gives us within a month confidence that we can rank in new markets.
And right now, with our biggest ever audiences across our sites, we’re confident about our
ability to do more. How we use our our use insightHow we
71 We win where others didn’t
Tom’s Guide reaches millions of tech enthusiasts a month, but its previous owner never saw the opportunity in laptops.
As part of the brand strategy, Future quickly:
Identified key terms
Tested in-category content
Rapid expansion through freelance
Embedded category as part of core team’s plan
Laptops was ranking in US top spots within weeks
How we use our our use insightHow we Now a fast-growth revenue stream for the brand
72 Does it make sense for our brands?
T3 was Tech focussed but it has now steadily grown into a Lifestyle brand – with reach and engagement higher than ever.
T3 launched as a Tech brand in From 100% Tech content to nearly 1996 half of its audience engaging with new categories such as Travel and Was a hugely popular Automotive magazine in the sector T3 now an innovator Spawned a website and brand – testing awards event and scaling new areas at pace Print sales declined and online content was second-place to Strategy also sees TechRadar global audience growth for the Relaunched the brand in 2017 brand
and pivoted into Men’s Lifestyle How we use our our use insightHow we
73 Adjacent Markets Where next
74 Where can we go next?
Identify the Research commercial spend & opportunity competitors Once we have a sense for where Insight, sales and ecommerce We believe there are we can go, we then identify the teams will research spend and many, many more commercial opportunity. competitors new opportunities for our brands. New areas of TI Media adds opportunity even more Home appliances Outdoors
Pet care Sports
Finance and insurance Travel Where next Where
75 Unlocking the TI Media potential
All these fantastic brands await us… Where next Where
76 We are in new markets right now
We are effectively targeting new adjacent markets to grow into.
Launch of Streaming – Fitness – huge Increasingly Disney+ led to big audience global interest. involved with that massive driver on tech eg Apple interest brands. Watch, converting to Peloton.
real success. Where next Where
77 5G is a New Next Big Thing
5G is already becoming a high value category – and has yet to penetrate the mainstream.
Future enjoys a Collaborative consumer leadership position in content strategy across tech phone coverage. brands.
Surveyed thousands of Launched B2B-focussed 5G consumers and site, 5GRadar.com. businesses across UK and US in our biggest ever Started major campaign to market research effort win US and UK 5G spend.
Recently booked seven- figure deal with major US Where next Where carrier
78 New Markets, Same Process
We are proud of our past, of everything we’ve done, but we know there is even more to come. Our established process ensures we are ready.
Credibility
Quality content
Expertise
Domain strength
Proven platform
Great SEO
Cross-company support Where next Where
79 Living in Horizon 3 : Today’s growth from past initiatives Matthew Pierce Kevin Li Ying Brand Director Chief Technology Officer
80 Mckinsey Planning Horizons
CREATE OPTIONS FOR FUTURE Horizon 3 is where BUSINESS we make strategic
bets which ensure NURTURE EMERGING BUSINESS FOR we focus on long- TOMORROW’S CASH FLOW term growth beyond
GENERATE HORIZON 3 today. TODAY’S CASH 24 TO 36 MOs. FLOW, DEFEND AND EXTEND CURRENT BUSINESS HORIZON 2 12 TO 24 MOs.
YOU NEED TO INVEST IN HORIZON 1 INNOVATION ACROSS ALL
0 TO 12 MOs. THREE TIME HORIZONS GROWING PROFITS
Living in Horizon 3 EXPECTED TIME HORIZONS 81 Living in Horizon 3 Today’s growth from past initiatives Technology Innovation
82 Our tech stack
Assets Websites Monetisation
Freelance Staff Tech Services
Ecom Tech: Hawk Content Ad Tech: Hybrid Commissioning Web Platform Portal Source Vanilla New Content Reuse Email Monetisation Smartbrief Asset Content Scraping Asset Storage 26 sites now on & Curation System Vanilla Ad Placement &
Recording Technology Innovation
83
83 Technology Innovation: Our Operating framework to deliver organic growth
STEERING OPERATIONAL
Vision & Strategy Execution & Output
STEERING ELT MONTHLY HBR OPERATIONAL HYPOTHESES EXECUTION (Audience / Ads Waterfall / Inform, discuss and alignment (Audience / Ads Waterfall / (Audience / Ads Waterfall / Platform / etc) Platform + UX) Platform + UX) Every month TECHNOLOGY QBR Quarterly Weekly Monday to Thursday Define and Review the Define and Review Technology H1/H2/H3 Strategy roadmap Prioritise, Report and Review Development Review of top objectives
HYPOTHESES OUTPUT & RESULTS TECH REVIEW MONTHLY Measured, Reviewed Technical legacy and and Analysed optimisation: Prioritise, Report and Review
ENGINEERING REVIEW MONTHLY PASS FAIL Legacy infrastructure, core Add to Do not add services and optimisation: rolling to rolling Prioritise, Report and roadmap roadmap
Review Technology Innovation
84 Technology Innovation: Lean value tree for agile development
What is our VISION purpose?
Does this Platform Tech + UX strategy Adtech Strategy Ecom Tech Strategy ...... Strategy support our
vision?
Steering Vision & & Vision Roadmap
How can we HORIZON 1 HORIZON 2 HORIZON 3 HORIZON 1 HORIZON 2 HORIZON 3 HORIZON 1 HORIZON 2 HORIZON 3 High Level High Level High Level High Level High Level High Level High Level High Level High Level ...... deliver this Tasks Tasks Tasks Tasks Tasks Tasks Tasks Tasks Tasks strategy?
H1 H2 H3 H1 H2 H3 H1 H2 H3 ...... What is the Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis quickest way to test H1 H2 H3 H1 H2 H3 H1 H2 H3 ...... HBR Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis this? : : : : : : : : :
Operational : : : : : : : : : Technology Innovation
85 Past H3 Initiatives Delivering Today’s Organic Growth Internal Systems Source Editorial content and asset management software allowing content commissioning, reuse with asset rights management capabilities. 2700 7.3m commissioned asset library size content per month
Increases editorial Delivers operational productivity for online and efficiency.
print. Technology Innovation
86 Past H3 Initiatives Delivering Today’s Organic Growth Web Platform Vanilla Proven tech web platform supporting the growth of 26 core websites.
In calendar 2019, In calendar 2019, 7 sites migrated 9 non-English + 2 Avg 12 weeks turn around per migrated site English internationalisation 4 new sites launched Avg 2 weeks turn around per migrated Avg 6 weeks turn around per new site site
Allows for global audience Flexible site generation with reach through English and automated content analysis
Technology Innovation non English language and tagging websites
87 Past H3 Initiatives Delivering Today’s Organic Growth Adtech Hybrid Scalable, flexible technology to deliver ad impressions volume. +19% +11% Increase in Tom’s Guide Increase in programmatic viewability % with Hybrid yields on Hybrid vs. Bordeaux (Future) or vs. RAMP (Purch)* Improves viewability by intelligent placement of ad slots. 13.8bn Provides a marketplace for Total open auction advertising auction. programmatic ad impressions served in 2019
Technology Innovation on Vanilla sites
88
* Sample of key sites: GamesRadar, Tom’s Guide, Space.com, Tom’s Hardware and CreativeBloq Past H3 Initiatives Delivering Today’s Organic Growth Ecomtech Hawk Dynamic, robust technology to deliver best, cheapest product offer recommendation. 2,100+ 25 Active affiliate merchants Territories covered Up to 1,500 ~2,000 Product updates per API or asset requests per second second Successful high quality Using algorithms that learn
Technology Innovation match rate. reducing manual product curation. 89 Future H3 Initiatives Delivering Tomorrow’s Organic Growth
Building the assets of tomorrow
Intent Marketing tech Source 2.0 Diversifying our monetisation Expanding out rights option management capabilities
A new lead generation tech Further boost productivity asset More efficient content reuse Build using technical expertise and knowhow Capabilities to manage video rights Fulfilling new audience needs Enhancing our assets’ search Further diversification of revenue functionality to filter against streams more granular metadata
Delivering competitive sales- ready leads auction
90 Living in Horizon 3 Today’s growth from past initiatives Brand Development
91 Our vertical targets help deliver our overall goals
2016’s strategic goal was to become the #1 or #2 content provider globally in Technology & Gaming (digitally).
2016 2019 TechRadar became the UK’s biggest consumer technology site hitting 48m users in November.
Along with MusicRadar, we now have the 2nd and 3rd biggest music sites globally.
Creative and design website Creativebloq.com is now #1 in both the UK and US by some margin.
DigitalCameraWorld.com grew within 2 years to become the #1 photography site in the UK.
Kicked off a major project to overhaul our games
and film group - details on next slide Brand Development Brand
92 No.1 In Games
Supercharging decade-old legacy brands and reaching number 1 in PC Games.
+216%* +232%* 22m 33.7m GamesRadar Online Sessions 2019 Online Users 2019
Aim: transform our scale Common content and profitability in management system Games, in turn materially empowered wider team to growing our wider all contribute to digital technology audience. growth.
Well primed to capitalise Internationalisation of site on 2020 key next- helped fuel growth in the generation console year US.
Video and social
monetisation the next step. Brand Development Brand
*Growth rate from Dec 2017 - Dec 2019 93 Building the #1 photography site
Building the #1 photography site with Digital Camera World. 2.7m No 1 Online Users 2019 UK ComScore 2019 Launched Strong affiliate revenues - Digitalcameraworld.com made possible with our July 2017 Hawk tech, editorial processes, ways of working, and efficient #2 in the US ComScore, content management with strong momentum system
Generated +£1m revenue Highly profitable and in FY19 diversified digital
revenue mix Brand Development Brand
94 Optimising acquisitions
Long-term brand development also applies to acquisitions. Optimisation is key to maximising returns.
Optimisation enables Measurable across Loudersound.com us to make the most several key areas: demonstrates this out of our acquisitions model at work -Platform It means we realise -Processes They show how the content and platform -Brand and content optimisation plan efficiencies, and -CMS needs to be bespoke to maximise revenues -Advertising the acquisition and ebitda -eCommerce
-Training Brand Development Brand
95 Louder
The fourth fastest growing website in the UK from SEO. 110% No 4 Organic online user Fastest growing UK growth year 1 website 2019
Acquired Team Rock Replatformed and brands in 2017. migrated to Vanilla.
Rebranded as Louder Optimisation meant in March 2018. brand change, replatforming, team
restructure, training. Brand Development Brand
96 Summary
A consistent focus on our future goals, ensures sustained, ongoing growth today.
Relentless focus on our Platform and content Approach is flexible: as strategy, underpinned work hand in hand. applicable to acquisitions with vertical objectives Efficiency and profitability and relaunches as legacy that fuel overall growth. through optimisation. brands.
Brand Development can Training print content One agile, lean, robust have a transformative teams in website tools and scalable technology impact on our audiences further fuels digital ecosystem.
and revenues growth Brand Development Brand
97 Coffee Coffee Coffee
98 Acquisition Playbook Chris Convey SVP B2B
99 How we realise our strategy
Organic Acquisitions Our acquisitions Growth complement and accelerate our organic growth, rather than
replacing it. More Wheels & Spokes Acquisition Playbook
100 Key principles
We are an operating business that wants to find complementary acquisition targets to fast track growth. Selective Review Use the Robust playbook pipeline Very selective in what We hold ourselves to Playbook has been Robust pipeline & we go after & exec account, via learnings developed and management team responsible for and review after each enhanced over last 4 process developed to delivery, highly acquisition years & 14 support in-market
engaged in process. acquisitions. and off-market deals. Acquisition Playbook
101 Investment Targets
As part of our 3 year planning, we identify gaps in our Home Interest
portfolio or plans Operationally Transformationally that could be solved Strategic Strategic by acquisitions. Tactical Operationally Strategic These acquisitions are either operationally strategic or Consumer Portfolio transformational.
Additionally, we have looked at tactical acquisitions along the way but still within the overall strategic
framework EBITDA
Acquisition Playbook MULTIPLE
102 Building out our verticals
Our acquisitions complement and accelerate our organic growth.
Tech Home Interest Hobbies
Organic Acquisition Acquisition Strong organic legacy business Centaur Media acquisition 2017 - Blaze Publishing (2016) establish supported by leading brands. leading brands in Home Interest strong base for hobbies initially vertical. in field sports
Acquisition Purch acquisition 2018 - to Organic Acquisition strengthen consumer tech Reposition / relaunch Haymarket consumer titles in Realhomes.com 2018 & Cycling from Immediate in 2019
Organic Roll out Future operating model Organic and grow acquired brands Launched Bike Perfect to extend in to adjacent cycling markets in
Q3 2019 Acquisition Playbook
103 Potential targets are increasing 142 Deals we have reviewed since Oct 2018. Of which:
Consolidation into 76 Strengthen current markets opened up by verticals or are acquisition or organic adjacencies: growth, offers further opportunity. 54 Were in new verticals/wheels 9 Would build out our platform/give us
more spokes Acquisition Playbook
104 We are picky
Reviews in process / Over FY19 and FY20 Q1 yet to be reviewed we have reviewed around 15 opportunities Reviewed & Held to complete on one - we
Initial Reviews only execute on the most attractive deals.
Detailed Reviews Expert knowledge in the business means we self-generate c 40% of Offer Submitted leads.
Strong gating process in place at Acquisitions each stage for effective
Completed management. Acquisition Playbook
105 We are operators who add value
It is a core part of our strategy to buy and build where we identify assets which can add value.
Phase 0: Pre-purchase Phase 1: First 4 months Phase 2: 4-12 months Phase 3: 1-2 years Identification Integration Transformation Optimisation
Systemised Diligence validation Implementation of Yield management identification of long new revenue streams review list internally Meet-and-greet all based on Future developed staff platform model New product launches Desktop review to Management Global audience understand value assessment and new focus eCommerce growth against strategic structure in place, from digital focus filters cost savings delivered Website refreshes Review and lessons Relationships with Back office systems Best practice sharing learnt key staff developed migration (Finance, (often CEO to CEO) IT, HR, Production, Incentives review Rights Mgt) Thorough due diligence undertaken Review with financial Acquisition Playbook screening
106 Review: Purch Close Out
We delivered on the Purch investment case
Delivered Operational Success What did we learn for Investment Thesis next time
Double digit earnings enhancing Key sites migrated to vanilla within Combing finance migration with 14 months systems upgrade is challenging Significant growth in pro-forma ebitda to reduce effective price Rapid disposal of non-core / loss Not all companies use the same multiple making brands ‘language’ - need to really listen
ROIC > WACC in year 1 Best of both worlds ‘Hybrid’ programmatic solution built
Successfully handled significant employee growth and
consolidation in US staff in NY hub Acquisition Playbook
107 A Successful Track Record From April 2016 to September 2018, Future completed 9 acquisitions with a total consideration of £171m
Deal Transaction Date Purchase Price Multiple1 Rating – 3 max
Noble House April 2016 £0.1m 1.6x A mix of different Media acquisitions with different Blaze Publishing May 2016 £0.4m 2.7x multiples but, with the exception of Newbay, all in Next Commerce* August 2016 $1.7m AUD 5.2x line with our investment rationale and forecasts.
Imagine October 2016 £15.5m 4.7x Publishing Newbay was intended as a low cost route into B2B so Team Rock January 2017 £0.8m N/A delivers on a strategic aim for horizon 3 initiative Centaur Home August 2017 £32.8m 8.4x Interest* Two additional deals of Newbay April 2018 £9.9m 3.3x Barcroft (completed Nov ‘19) and TI Media (to Haymarket May 2018 £10.7m 3.1x complete following CMA review later this year)
Purch* Sept 2018 £99.8m 13.1x acquisitions in FY20 are
too new to grade. Acquisition Playbook Total £171m
1. Multiples based a range of P&L contribution and profit measures. 108 Case Study Acquisition of NewBay Media A US based information and events company with a substantial B2B portfolio - April 2018 Historically declining print Complementary B2B brands assets bought for EBITDA facilitating further revenue multiple of c.3.3x. diversification.
Acquisition creating a Divestment of a number of leadership position in non-core brands that had no consumer Music in the US. content overlap with Future verticals. Investment case planned revenue to decrease & Exciting potential recapitalisation required as transforming a traditionally materially under invested. print-heavy business to a more
digital focused one. Acquisition Playbook
109 Case Study SmartBrief Acquisition A US-based digital media publisher of targeted business news and information - July 2019
Opportunity for us to Stable revenue stream of significantly expand our $35.1m pa, which delivers B2B audience with 5.8m $5.0m EBITDA on a TTM pro- new subscribers. forma basis.
Contingent liability for Diversifies us into new verticals approximately 75% of the including healthcare/finance earn-out payment reflecting and improves our email
expected growth marketing capabilities. Acquisition Playbook
110 Case Study Mobile Nations acquisition High-growth consumer technology media company based in US - February 2019 MoNa Existing Incremental $m Pro-Forma Purch Impact Total consideration of Purch publisher services sold $115m - 2018 Revenue of advertising on behalf of Mobile $16.4m and EBITDA of Nations - all advertising Revenue 16.4 -7.2 9.2 $8.2m revenue recognised gross in Purch P&L with cost of sales of Costs 8.7 +7.2 1.6 Strong existing commercial approximately 80% of the relationship through long revenue. Operating 7.6 - 7.6 standing partnership with Profit Purch.
Source: Audited financial statements as disclosed in the Premium Listing Acquisition Playbook MONA earnout accelerated owing to strong Announcement dated 1st March 2019 performance 111 Case Study Barcroft acquisition Social media driven video production with key TV & streaming relationships
Significant diversification Lean product development through expanded social & process leveraging 60+Million video monetisation social followers to test & lean on prototypes Evergreen video content accelerates Future content Off platform algorithm strategy expertise
Efficient operating model
allowing production at scale Acquisition Playbook
112 Acquisition Summary
Acquisition strategy Acquisitions to date There is no one deal complements organic have been successful we have to do so can growth strategy to addition to growth. remain disciplined on enter new market or price and have a wide
add new capability. pool of opportunity. Acquisition Playbook
113 New Video Revenue Sam Barcroft CEO Barcroft Studios
114 New Video Video Revenue New
115 How we work
Our mission is to inspire the world through amazing true stories.
We make, publish and distribute our own We also make shows for others to publish
original shows across social media New Video Video Revenue New
116
Business approach Original Original We are both a video Content producer AND a publisher - creating value and income on both sides of
the aisle.
Audience
Mass Digital Digital Mass New Video Video Revenue New
117 Business model
Compelling Content Premium original Consistent flow Grows audience and maintains Of original content and new engagement digital content series
12 original series brands 2 returning linear series New content daily The Barcroft studios Library of 2.5k wholly owned films built over business approach 12 years is based on the Mass online Successful long- audiences form shows Hollywood movie
500m monthly views Netflix studio business across platforms Channel 4 69m followers A&E model, but adapted Discovery for the digital first age. Multiple monetisation outcomes
Content monetised multiple times - across digital, social, linear, brand
New Video Video Revenue New and licensing
118 Number 1
MOST LARGEST YOUTUBE WATCHED PROVIDER OF AWARD UNSCRIPTED SHOWS IN WINNERS SHOW DISCOVER At Future, we focus on being HIGHEST HIGHEST number one. FACTUAL RANKED AVERAGE CHANNEL OF CHANNEL IN VIDEO VIEWS THE YEAR THE NEWS IN FIRST 30 Over the last 12 years of making VERTICAL DAYS video at Barcroft, we’ve hit top spot multiple times. It’s what motivates our brilliant team of producers.
ORIGINAL WEB LONGEST CHANNEL OF RUNNING THE YEAR COMMISSIONED
SERIES New Video Video Revenue New
119 How we make money in video
Barcroft Studios has developed a multi- faceted financial approach to original video production and distribution.
Production Advertising-based Original Digital Revenue Video On Demand Commissions Long-form content for linear Short form video content Creation of video content hubs and digital customers and monetised via online for broadcasters, including the SVOD platforms. Self digital platforms - production of original videos. commissioned long-form YouTube, Facebook, content offered in partnership Snapchat with distributor (IP retained)
Licensed Brand Content Partnerships Licensing our library of pictures Sponsorship on existing shows, and videos and distribution of integration into new episodes our long-form content. and original bespoke branded
series New Video Video Revenue New
120 The Barcroft Incubator
One of the benefits of having 60m+ followers on social is that you get a huge amount of feedback on your shows.
Original Content Mass Audience Monetization Making Mad is an original video series brand by barcroft. 68m views Amazing Interiors 73 videos 12 x 30 episodes
64m views Most Incredible Homes
675k followers 5 x 12 episodes New Video Video Revenue New
121
We make evergreen content New Video Video Revenue New
122 Off Site Video
$35bn $47bn $25bn
$24bn $19bn $15bn $11bn $12bn
Advertisers Broadcasters We are highly successful in an expanding global ...and the rapidly growing commissioning market
marketplace New Video Video Revenue New
123 Off Site Video: Broadcasters
Currently In paid
producing for development for New Video Video Revenue New
124 Off Site Video: Advertisers
The amount of VoD traffic by 2022 will be equivalent to 10 400 12 4 billion DVDs per New episodes Show brands New OTT partnerships
month. New Video Video Revenue New
125 Off Site Video: Advertisers
We are launching truly, our first scheduled OTT TV channel.
truly already has over 2.7 million followers on facebook.
The home of popular documentaries.
Available across mobile and connected televisions.
Featuring Barcroft, Future and third party television shows.
Test and learn environment for
expansion into television. New Video Video Revenue New
126 Video: Moving to scale
Adding Barcroft’s video playbook to Future’s audience at scale, which grows commercial expertise and brand power.
We are taking the best Barcroft is a trusted TV supplier Future adds access to audiences, practises and show distribution with 69m+ social followers and a sales and new revenue streams network which we’ve bespoke, efficient show at significant scale. developed at Barcroft, and we production approach. are rolling it out at Future.
We’re extending video across As 5G rolls out globally, and social, online and into to TV people consume more video, broadcasting. we’ll be perfectly positioned to
deliver stand out shows. New Video Video Revenue New
127 Global Operating Model Penny Ladkin-Brand Chief Financial Officer
128 Acceleration of our strategy via M&A
Global operating model is a key element of the platforms which drives Future as facilitates both growth and margin expansion.
Future operates a global Focus on organic growth by Playbook methodology allows operating model with a global leveraging the platform for for swift integrations and ensures functional team serving content expansion into adjacent consistency in operations audiences in all geographies - markets. we monetise those audiences Model allows benefit of operating through mix of centralised and Platform allows for accelerated leverage to flow through to local resource. growth through acquisition to margin and cash generation. unlock audiences outside of core Global operating model allows geography. us to take content from any geography and monetise in
other geographies. Global Operating Model Operating Global
129 Global Thinking Teams
Leadership team is focused on where the biggest opportunities are rather than the opportunities in United Kingdom ELT: the local market. Zillah - CEO Penny - CFO Aaron - CCO All teams are set up to service audiences in Kevin - CTO Sophie - SVP Marketing our core markets of US, UK and Australia. Australia Chris - SVP B2B ELT: Neville - MD, Australia
United States ELT: Mike - CRO Claire - COO Marcus - Future Labs
Jason - SVP IT Global Operating Model Operating Global
130 Scale in our markets
31% 40% Our reach of Our reach of people online in males online in the the US. US. Our content reaches 1 in 3 people in the US. 35% 32% Our reach of tech Our reach of enthusiasts in the people online in
US. the UK. Global Operating Model Operating Global
131 Source: comScore Media Metrix Demographic Profile, November 2019, unique visitors age 18+ Scale in our markets
43% $70bn of US online Value of US Wine audience use market*** home & We see TI Media as a global architecture sites* opportunity to leverage our platform to target huge addressable markets 71% $37bn of US female Value of global *comScore, no. of US unique visitors to sites in the Lifestyles - Home/Architecture online audience streaming market**** category as a % of all US population online, desktop visitors age 2+ and mobile visitors age 18+, Dec-19. use fashion & **comScore, no. of US unique visitors to sites in the Lifestyles - Beauty/Fashion category as a % of all US females online, desktop visitors age 2+ and mobile visitors beauty sites** age 18+, Dec-19. ***Wine Analytics Report, Jan 2019
***Grand View Research, Feb 2019 Global Operating Model Operating Global
132 Our World
We go where our audiences are, which enables us to recruit talent around team hubs. Only those skills that need to be in market are local with centralised centres of excellence.
Centralised services are located in the lowest cost location with the UK United Kingdom Central services: France the centre for many shared services Front office: Technology Central services: Ecommerce and technology split across the UK Audience Technology and France. Sales & Marketing development Editorial Finance Events People & Culture
Australia United States Front office: Front office: Sales & Marketing Sales & Marketing Editorial Editorial Local ecommerce Events Local People & culture
Smartbrief Global Operating Model Operating Global
133 Strategy is all about execution
Execution of the strategy is facilitated through playbooks to ensure consistency and to
onboard new staff. Global Operating Model Operating Global
134 Measurement provides early warnings
Operational dashboard provides diagnostic on organisational health; monitors operations pre and post acquisition to make sure we don’t take on
too much. Global Operating Model Operating Global
135 Platform facilitates multiple content uses
LICENSED Future’s article types EDITION
are often evergreen so ANNUAL a single article can be published multiple APP times with multiple INVESTMENT MAGAZINE BOOKAZINE
monetisation RETURN LICENSED EDITION opportunities. ARTICLE ONLINE APP ARTICLE
MAINTENANCE Global Operating Model Operating Global
136 More Than One Audience User Needs Content
Community and Journalism A specialist brand can serve the needs of many audiences. 74% 2% 24% Different audiences Fanatics Regulars Mainstreams Live on our Sites Visits Often New Visitors engage with our content in >30 visits per month 2-29 visits per month 1 visit in the moment different ways, with 3.5% of site visits 37.5% of site visits 59% of site visits monetisation appropriate Direct Visitors Direct/Follow/ Search Traffic to user need. Search
Community Timely Content Evergreen Content
News, Editorial, News, Editorial, Buying Advice
Community Reviews, Events & Help Global Operating Model Operating Global
137 Data Sample: Android Central, iMore, Windows Central Operating leverage - lifecycle of an article
Initial editorial Editorial monitoring Ongoing editorial monitoring + (Investment) (Payback period) Translation optionality (Incremental Evergreen and revenue) global content leads to increasing margins.
US EDITION
Cumulative article page views and
revenue £ Global Operating Model Operating Global
138 Drivers of organic growth
73%+ (10)% +31% (10)% Media organic £121m audience growth 25%+ FY19 £109m +32% Media organic revenue growth FY19
+11% Organic growth FY19 Chart shows the reconciliation of organic growth in FY19 and the key drivers; principally ecommerce and digital advertising
Global Operating Model Operating Global Media other declined due to the shift on an event into FY20 and magazines declined organically by 10% in line with our expectations
139 How we report organic growth
Organic growth is defined as year-on-year growth for the like-for-like portfolio of brands and excludes all acquisitions made in the prior two year period, but includes any closed titles. Definition of We classify revenue classified as “organic” once we have organic growth owned an acquisition and its titles for a full financial year, so we have comparative numbers that are under our ownership. This means that the components of organic in each year are not the same in each year.
E.g. SmartBrief acquired July 2019 (i.e. FY19); owned for full financial year end of FY20; enters organic FY21.
A new launch is regarded as organic. Global Operating Model Operating Global
140 How they feed into overall growth: Revenue
£m 2019 2018
Total Revenue 221.5 130.1
2018 acquisitions 82.5 21.0
+11% 2019 acquisitions 11.7 - In organic growth FX 5.9 -
Total inorganic revenue (100.1) (21.0)
Total organic revenue 121.4 109.1
Organic growth +11% Global Operating Model Operating Global
141 Share of total revenue FY17-FY19
60%+ Revenue quality is increasing over time: our fastest growing revenues are our highest margin. 40%
eCom and digital advertising revenues operates at a margin 33% premium to other revenue lines.
The super-charged growth of eCom revenues drives increasing operating leverage
across the Group. Global Operating Model Operating Global
142 Operating leverage
2019 2018 YoY Var Total Revenue: 221.5 130.1 +70% Change in revenue Media Revenue 154.9 66.3 +134% mix brings Media GC% 82% 82% - improvement in operating margins. Magazine Revenue 66.6 63.8 +4% Magazine GC % 62% 62% -
9% Total Gross Contribution 168.6 93.9 +80% Improvement in Total GC margin % 76% 72% +4ppts EBITDA margin Media % GC 75% 58% +18ppts
EBITDA 54.5 20.7 +163%
EBITDA margin % 25% 16% +9ppts Global Operating Model Operating Global
143 Operating leverage
Scale brings natural operating leverage 221.5 from cost base. 52% 56%
130.1 4% 45.0 Improvement 29.1 in admin and 69.1 direct costs as 44.1 percentage of revenue FY18 FY19
Revenue Admin costs & other overheads Direct costs
Admin costs and direct costs as a % of revenue Global Operating Model Operating Global
144 How they feed into overall growth: EBITDA
54.5 4.3 1.0 12.4
Focus on quality of 10.2 revenues in organic and inorganic 5.9 portfolio provides 20.7 focus on EBITDA
growth.
£m Global Operating Model Operating Global
145 Cash tracks EBITDA
We focus on delivering sustainable growth in EBITDA, profitable revenues rather than top-line growth to drive margin expansion and converting profits to cash.
Global Operating Model Operating Global * Free cash flow is defined as statutory operating cash inflow less capital expenditure. ** Net cash is defined as free cash flow less interest and tax
146 Multiple growth levers
Revenue mix Geographical expansion Central costs Our operating model
delivers efficiencies Digital revenue which enable us to streams growth
optimise our core Core improves business through revenue mix Using our organic growth and diversified base Continue to to leverage leverage well- acquisitions. content usage invested central across functions Using our geographies playbooks to accelerate Media growth in our
acquisitions
Acquisitions Global Operating Model Operating Global
147 Conclusions and questions Zillah Byng-Thorne Chief Executive Officer
148 APPENDIX ----REFERENCE SLIDES FROM HERE----
149 Sources & Definitions
Organic ● Organic growth is defined as year-on-year growth for the like-for-like portfolio of brands and excludes all acquisitions made during FY18 and FY19, but includes any closed titles. ● Acquisitions included in organic are: FY17 acquisitions Home Interest, Imagine and Team Rock, and FY16 acquisitions Blaze, , Next Commerce and Noble House ● Definition is the same for both revenue and audience
Total audience reach ● Magazine and bookazine print circulation per issue + monthly online users + event attendees + social reach (Twitter followers, Facebook unique impressions, YouTube subscribers) + newsletter subscribers
Market positions ● Technology no. 1 online in UK and US: comScore technology news category, desktop visitors age 2+ and mobile visitors age 18+, UK position Oct-19; US position Dec-19 ● No. 1 in PC gaming: based on websites in the Gaming Information comScore category that are PC gaming focused, desktop visitors age 2+ and mobile visitors age 18+, UK position Oct-19; US position Dec-19. ● No. 1 online in Space in US: based on internally produced competitive set of all websites about space in the US, ranked by comScore desktop visitors age 2+ and mobile visitors age 18+, Oct-19 ● No. 1 in creative online in UK & US: based on internally produced competitive set of all websites about digital design in the UK and US, ranked by comScore desktop visitors age 2+ and mobile visitors age 18+, UK position Oct-19; US position Dec-19 ● No. 1 in print music making in UK & US: based on magazine copy sales in music making sector on UK newsstand (source: distributor data, 2019) and magazine copy sales in music sector on US Barnes & Noble newsstand (source: Barnes & Noble sales rankings, Jun 19) ● No. 1 in print home renovations in the UK: magazine copy sales in home improvement – DIY sector on UK newsstand (source: distributor data), 2019 ● No. 1 in print AV tech in US: based on internally produced competitive set of all B2B AV technology magazines in the US, ranked by advertising pages, MediaRadar Jul 18-Jun 19 ● No. 1 hi-fi mag in UK: magazine copy sales in Hi-Fi sector on UK newsstand (source: distributor data), 2019. ● No. 1 games mag publisher in UK: magazine copy sales in Gaming sector on UK newsstand (source: distributor data), 2019. 150 ● No. 1 creative & design mag publisher in UK: magazine copy sales in Design sector on UK newsstand (source: distributor data), 2019 ● No. 1 UK consumer photo exhibition: based on floor space compared to other consumer photo exhibitions ● No. 1 UK home building show: based on number of events and attendees compared to other UK home building shows Audience Growth comScore shows our growth
Global Online Visits Oct 19 YoY
TechRadar +75% Livescience +120% PC Gamer +61% GamesRadar +159% Android Central +51% Space +90% iMore +24% T3 +296% Windows Central +75% Loudersound +159% Top Ten Reviews +51% What Hifi +208% Creativebloq +35% Cyclingnews +337% Gizmodo UK +133% Real Homes +650% Newsarama +120% MusicRadar +118% Digitalcameraworld +414% Kotaku UK +5% Crackberry +166%
151 Note: comScore uses a slightly different methodology for measuring online audience than Google Analytics (which is Future’s internal audience reporting tool and is used for all our audience figures). The primary differences lies with calculating online users/unique visitors and refers to how cross-website and cross-device users are counted. comScore’s methodology for calculating online visits (reported above) is similar to Google Analytics’ methodology, therefore visits are shown here instead of online users.