Results Presentation Half Year Ended 31 March 2016 Thursday 26 May 2016 © 2016 DMGT | 1 Agenda Highlights 11 Martin Morgan, Chief Executive Financial Performance 2 Stephen Daintith, Finance Director Business Update 3 Martin Morgan, Chief Executive Q&A 4 © 2016 DMGT | 2 Highlights 1 Martin Morgan, Chief Executive © 2016 DMGT | 3 Challenging first half – weak print advertising • Resilient Group underlying revenues • Underlying operating profit down 12%, operating margin of 15% • Adjusted profit before tax down 11%, EPS down 11% • Net debt:EBITDA ratio of 2.0x • Interim dividend of 6.7p, up 3% • Active portfolio management • Outlook for Full Year unchanged, except for dmg media’s operating margin • New CEO, Paul Zwillenberg, appointed from 1 June 2016 © 2016 DMGT | 4 Financial Performance 2 Stephen Daintith, Finance Director © 2016 DMGT | 5 Financial Summary Adjusted numbers £ million HY 2016 HY 2015 Change Underlying Revenue 950 922 +3% (1%) Operating profit 138 150 (8%) (12%) Profit before tax 129 146 (11%) Operating margin 15% 16% Earnings per share 27.9 p 31.4 p (11%) Dividend per share 6.7 p 6.5 p +3% Revenue dynamics: growth in B2B (+1%), • Operating profit down 12% underlying resilient dmg media (-3%) • • Adjusted profit before tax down 11% • HY16 factors: Local World disposal; Gastech included; FX benefit from stronger US$; print • EPS down 11%, Dividend up 3% advertising declines; Euromoney challenges © 2016 DMGT | 6 B2B & Consumer diversity HY 2016 Revenues HY 2016 Profits * Consumer Consumer 38% 24% B2B B2B 62% 76% Underlying growth rates Underlying growth rates B2B +1%, Consumer –3% B2B -3%, Consumer –33% * Profits include Corporate costs, allocated on a revenue basis. © 2016 DMGT | 7 Geographical diversity HY 2016 Revenues HY 2016 Profits 48% 46% UK UK 31% 33% North America North America 21% 21% Rest of World Rest of World Underlying growth rates Underlying growth rates UK –6%, North America +7%, UK –19%, North America –8%, Rest of World +0% Rest of World -1% Revenues by destination and profits by source. © 2016 DMGT | 8 Diverse revenue streams Transactions & Other Print Advertising 18% 14% Digital Advertising 7% Events, Conferences & Training 14% 16% Circulation Subscriptions 31% Percentages represent share of revenues in HY 2016 Arrows represent underlying revenue trajectory, comparing HY 2016 to HY 2015 © 2016 DMGT | 9 Digital focus Group HY 2016 revenues Group - excluding events 56% 48% Digital Digital 44% 38% Non-digital Non-digital B2B only - excluding events 14% Events 88% Digital 12% Non-digital All figures based on HY 2016 revenues. © 2016 DMGT | 10 B2B © 2016 DMGT | 11 Performance in line with expectations £ million HY 2016 HY 2015 Change Underlying Revenue 96 91 +6% +1% Operating Profit 19 13 +51% +47% Operating Margin 20% 14% • Revenue growth despite impact of Outlook: Full Year 2016 client consolidation • Low-single digit underlying revenue • Strong product development continued growth • Margin benefit from reduced costs, • RMS(one) costs in H2 (sales & support, despite £6m reduction in capitalisation amortisation, ↓capitalisation) Full year margin in line with FY 2015 • RMS(one) on track and roll-out in • (c.14%) progress © 2016 DMGT | 12 © 2016 DMGT | 13 Continued growth £ million HY 2016 HY 2015 Change Underlying Revenue 230 201 +14% +6% Operating Profit 25 27 (6%) +1% Operating Margin 11% 13% • Underlying revenue growth across the businesses: Property +5%, Education +1% and Energy +19% Outlook: Full Year 2016 • Underlying revenue growth of c.10% • Margin adversely impacted by ongoing investment and bolt-on acquisitions, as • Continued ongoing investment to expected drive long-term growth prospects • Bolt-on acquisitions: ETSOS (Property) and • Operating margin in mid-teens PAR Framework (Education) © 2016 DMGT | 14 Continued revenue growth £ million HY 2016 HY 2015 Change Underlying Property - European 89 79 +12% +3% Property - US 58 51 +14% +7% Property 146 130 +12% +5% Education 48 46 +5% +1% Energy 35 24 +47% +19% dmg information 230 201 +14% +6% © 2016 DMGT | 15 Continued underlying growth £ million HY 2016 HY 2015 Change Underlying Revenue 72 58 +24% +5% Operating Profit 25 17 +43% (2%) Operating Margin 35% 30% • Continued underlying growth • Gastech benefit to reported figures Outlook: Full Year 2016 (Oct’15 & Mar’14) • Mid-single digit underlying and reported • Continued growth for ADIPEC and Big 5 revenue growth • Underlying profit decline; Gastech • Challenging conditions facing Canadian location and investment in attendance energy-related events (GPS) • Acquisition of Exhibition Management • Operating margin of c.25% Services © 2016 DMGT | 16 Challenging markets £ million HY 2016 HY 2015 Change Underlying Revenue 194 198 (2%) (6%) Operating Profit 47 53 (12%) (15%) Operating Margin 24% 27% • Underlying revenue decline of –6%; Outlook: Full Year 2016 events, training and advertising • Challenging market conditions continue • Reduced margin:high flow through to profits, benefit in FY15 from CAP • Strategy being implemented and early signs encouraging • New strategy presented in March 2016 • Second half profit expected to be similar to • Disposal of energy publishing second half of FY 2015 businesses © 2016 DMGT | 17 © 2016 DMGT | 18 Weak print advertising market £ million HY 2016 HY 2015 Change Underlying Revenue 358 374 (4%) (3%) Operating Profit 39 57 (30%) (29%) Operating Margin 11% 15% • Underlying revenue decline of –3%; FY 2016 Outlook weak print advertising, digital growth, Stable underlying revenues (-2% to +2%): resilient circulation volumes • digital growth, print decline, benefit from • Cover price increase: Daily Mail Mon-Fri cover price 60p → 65p • Decline in reported revenues (Wowcher) • Profit and margin decline; reduction in 53 week year print revenues and continued • investment in digital assets • Operating margin of around 10%, impacted by print advertising • Wowcher disposal; MailOnline Australia acquisition © 2016 DMGT | 19 For the 8 weeks to 22 May 2016, underlying revenues: advertising –4% and circulation –2% Revenue £ million HY 2016 HY 2015 Change Underlying Circulation 153 157 (3%) (3%) Advertising print 113 131 (13%) (13%) (4%) Advertising digital 57 56 +2% +23% Other 35 30 +16% +13% Revenue 358 374 (4%) (3%) • Cover price increase (Feb’16) helps second half Reported digital advertising growth adversely impacted by disposal of Wowcher. ‘Other’ revenues primarily relate to low margin newsprint resale activities which are excluded from underlying revenues. © 2016 DMGT | 20 £ million HY 2016 HY 2015 Change Underlying Daily Mail / The Mail on Sunday 242 260 (7%) (7%) circulation 153 157 (3%) (3%) advertising 80 95 (16%) (16%) other 10 8 +16% +16% MailOnline 44 36 +24% +20% Mail Businesses 286 296 (3%) (3%) Metro, 7 Days 36 39 (7%) (7%) Other - continuing 29 22 +55% 351 356 (1%) (3%) Wowcher 7 15 (55%) Evenbase - 3 (100%) Total 358 374 (4%) (3%) MailOnline includes Metro.co.uk website revenues but excludes Elite Daily. ‘Other – continuing’ includes newsprint resale activities and Elite Daily. © 2016 DMGT | 21 Revenue by business £ million HY 2016 HY 2015 Change Underlying B2B Risk Management Solutions 96 91 +6% +1% dmg information 230 201 +14% +6% dmg events 72 58 +24% +5% Euromoney 194 198 (2%) (6%) 592 548 +8% +1% Consumer dmg media 358 374 (4%) (3%) Total Revenue 950 922 +3% (1%) • Favourable FX impact on HY 2016 reported revenues of c.£18m (Average rate $1.48 vs. $1.55 HY 2015) © 2016 DMGT | 22 Operating profit by business £ million HY 2016 HY 2015 Change Underlying B2B Risk Management Solutions 19 13 +51% +47% dmg information 25 27 (6%) +1% dmg events 25 17 +43% (2%) Euromoney 47 53 (12%) (15%) 116 110 +6% (2%) Consumer dmg media 39 57 (30%) (29%) Corporate costs (18) (17) (6%) (6%) Total operating profit 138 150 (8%) (12%) • Favourable FX impact on HY 2016 reported operating profits of c.£4m (Average rate $1.48 vs. $1.55 HY 2015) Note: B2B and Consumer operating profits are stated before allocating Corporate costs. Including Corporate costs, the underlying growth rates for B2B and Consumer were –3% and –33%. © 2016 DMGT | 23 Joint Ventures & Associates £ million HY 2016 HY 2015 Zoopla Property Group 11 7 Local World - 8 Total JV's & Associates* 11 14 • Zoopla: • Strong performance following uSwitch Outlook: Full Year 2016 acquisition: Revenues +130%, • Zoopla seasonality (uSwitch) Adjusted PAT +83%, Adjusted EPS +82% • Acquisition of Property Software Group Apr’16 • Full Year guidance: £15-20m • Disposal of Local World * Total includes other JV’s and Associates, notably Dealogic and dmg information investments © 2016 DMGT | 24 Net finance costs £ million HY 2016 HY 2015 Net interest payable 20 19 Items excluded from adjusted results: Premium on bond redemption - 40 IAS19(R) finance costs 2 4 Outlook: Full Year 2016 • Increased share of associates’ interest • Net finance costs c.£40m payable: Zoopla’s acquisition of uSwitch © 2016 DMGT | 25 Adjusted results £ million HY 2016 HY 2015 Change Adjusted operating profit 138 150 (8%) Joint ventures and associates 11 14 Net finance costs (20) (19) Adjusted profit before tax 129 146 (11%) Taxation (19) (21) Minorities (12) (11) Adjusted earnings 99 114 (14%) Adjusted EPS 27.9 p 31.4 p (11%) Adjusted tax rate 14.8% 14.1% © 2016 DMGT | 26 Exceptional items and amortisation £ million HY 2016 HY 2015 Reorganisation, redundancy and consultancy 1 (6) (11) Supplier in voluntary administration 1 (5) - Earn-out / deferred consideration charge 1 (1) (1) Accelerated depreciation and impairment of plant (0) (2) Exceptional operating