Acquisition of SmartBrief Investor Deck · Our purpose for B2B To deliver high-quality content in a...

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Acquisition of SmartBrief Investor Deck July 2019

Transcript of Acquisition of SmartBrief Investor Deck · Our purpose for B2B To deliver high-quality content in a...

Page 1: Acquisition of SmartBrief Investor Deck · Our purpose for B2B To deliver high-quality content in a trusted voice to the vertical markets we serve through multiple platforms We engage

Acquisition of SmartBriefInvestor Deck July 2019

Page 2: Acquisition of SmartBrief Investor Deck · Our purpose for B2B To deliver high-quality content in a trusted voice to the vertical markets we serve through multiple platforms We engage

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DisclaimerThis presentation ("Presentation") has been prepared by Future plc (the "Company") and is confidential and is only directed at persons who fall within the exemptions contained in Articles 19 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”) (such as persons who are authorised or exempt persons within the meaning of the Financial Services and Markets Act 2000 (“FSMA”) and certain other investment professionals, high net worth companies, unincorporated associations or partnerships and the trustees of high value trusts) and persons who are otherwise permitted by law to receive it.

This Presentation is directed only at persons having professional experience in matters relating to investments and any investment or investment activity to which this Presentation relates is only available to such persons. Persons of any other description, including those who do not have professional experience in matters relating to investments, should not rely on this Presentation or act upon its contents. This Presentation does not constitute or form part of any offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any decision in connection with any proposed purchase of shares in the Company must be made solely on the basis of the information contained in the announcement to be published by the Company. While all reasonable care has been taken to ensure that the facts stated in this Presentation are accurate and that any forecasts, opinions and expectations contained herein are fair and reasonable, this Presentation has not been verified and no reliance whatsoever should be placed on them. Accordingly, no representation or warranty express or implied is made to the fairness, accuracy, completeness or correctness of this Presentation or the opinions contained herein and each recipient of this Presentation must make its own investigation and assessment of the matters contained herein. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given, and no responsibility or liability is accepted, as to the achievement or reasonableness of any future projections or the assumptions underlying them, or any forecasts, estimates, or statements as to prospects contained or referred to in this Presentation. Save in the case of fraud, no responsibility or liability whatsoever is accepted by any person for any loss howsoever arising from any use of, or in connection with, this Presentation or its contents or otherwise arising in connection therewith. In issuing this Presentation, the Company does not undertake any obligation to update or to correct any inaccuracies which may become apparent in this Presentation.

This Presentation is being supplied to you for your own information and may not be distributed, published, reproduced or otherwise made available to any other person, in whole or in part, for any purposes whatsoever. In particular, this Presentation should not be distributed to or otherwise made available to persons with addresses in Canada, Australia, Japan, the Republic of Ireland, South Africa or the United States, its territories or possessions or in any other country outside the United Kingdom where such distribution or availability may lead to a breach of any law or regulatory requirements.

Numis Securities Limited (“Numis”), which is authorised and regulated in the UK by the Financial Conduct Authority, is acting for the Company in respect of the matters described in this Presentation and for no one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Numis nor for providing advice in relation to the matters described in this Presentation. Numis has not authorised the contents of, or any part of, this Presentation.

This Presentation is limited to and intended for distribution in the United Kingdom only to persons who (i) are qualified investors (within the meaning of the Prospectus Directive 2003/71/EC) and (ii) who have professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the FPO and/or to high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2)(a) to (d) of the FPO or to those persons to whom it may otherwise be lawfully communicated (in each case referred to as “Relevant Persons”). This document has not been approved by Numis for the purposes of Section 21 of FSMA.

The information contained in this presentation is not intended to be viewed by, or distributed or passed on (directly or indirectly) to, and should not be acted upon by any class of persons other than Relevant Persons.

This document may contain unpublished inside information with regard to the Company and/or its securities. Recipients of this document should not deal or encourage any other any other person to deal in the securities of the Company whilst they remain in possession of such inside information and until the transaction described in this document is announced. Dealing in securities of the Company when in possession of inside information could result in liability under the insider dealing restrictions set out in the Criminal Justice Act 1993 or the Market Abuse Regulation (“MAR”). This document may contain information which is not generally available, but which, if available, would or would be likely to be regarded as relevant when deciding the terms on which transactions in the shares of the Company should be effected. Unreasonable behaviour based on such information could result in liability under the market abuse provisions of MAR.

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Our strategy

Future is a global platform media business for specialist media, driven by technology, with diversified revenue streams

We create fans of our brands by giving them a place they want to spend their time and where they go to meet their needs. We continue to create loyal communities

We are expanding our global reach through organic growth, acquisitions and strategic partnerships

We are diversifying our monetisation models to create significant revenue streams

Page 4: Acquisition of SmartBrief Investor Deck · Our purpose for B2B To deliver high-quality content in a trusted voice to the vertical markets we serve through multiple platforms We engage

● Acquisition of SmartBrief Inc. for up to $65m○ $45m payable upfront ($32.2m cash and $12.8m shares), which represents a 9x multiple of TTM

adjusted EBITDA○ Up to a further $20m (payable up to 50% in shares at our discretion) deferred payment subject to

achievement of gross profit target based on year ending 31 July 2020○ The $12.8m vendor consideration shares are subject to a lock up arrangement for six months

from completion ● Acquisition funded through debt facility and issue of consideration shares● Deal to complete on 31 July 2019

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Transaction overview

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SmartBrief overview

● Founded in 1999● Fully own a database of 5.8m+ subscribers, provided by association partners● Create and distribute 250+ digital newsletters, allowing advertisers to target and consistently engage with decision-makers

and influencers● Proprietary tech platform delivering taxonomy search and categorisation tool, content management system, ad server and

newsletter tracking system

SmartBrief is a US-based digital media publisher of targeted business news and information

Advertiser ClientsConnecting marketers with audiences that are targeted

and influential

Association PartnersHelping partners

communicate with members and key constituencies,

recruit and engage members and generate non-dues

revenue

SubscribersProviding readers with

curated, vertically focused digital newsletters that keep

them informed and help them succeed

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Transaction summaryKeystone in the B2B platform

Earnings enhancing acquisition

New B2C audience driver

Building further operating leverage

● Proprietary built technology which: ○ automates curation of content from over a

thousand different sources○ email service provider (“ESP”) to send bulk

emails with appropriate segmentation ○ automated ROI reporting

● Significant addition of 5.8m names to B2B subscriber lists

● Adds ability to monetise audience

● Adds ability to drive digital audiences through provision of value added email newsletters

● Potential to enhance engagement of current subscribers through value added services

● Access to new vertical markets

● Drives operating leverage through addition of contribution without significant back office overheads

● Opportunity to drive revenue upside through cross marketing to subscriber lists

● Leverages technology in B2B business

● Attractive acquisition with good financial returns

● Brings a stable revenue stream of $35.1m pa, which delivers $5.0m EBITDA on a TTM to March ‘19 pro-forma basis, with synergy upside

● Earnings enhancing in first year

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How We Execute Our Strategy

Continued diversification of content monetisation3

Ongoing investment4

1 Diversifying our audience

2 Scalable platform

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SmartBrief acquisition delivers on strategy

● Proprietary technology stack critical part of ability to drive operating leverage in the business

● Creates keystone for B2B platform build out

● Significant growth in B2B subscriber lists

● Adds new verticals to B2B

● Increases scale and reach of B2B business

● Ability to drive increased audience to B2C sites through use of newsletters

● Ability to leverage SmartBrief assets in Future business to drive organic growth

● Unlocks significant new advertiser budgets with highly ROI driven email marketing

● Creates additional content through curation as well as creation

● Provides access to new customers with cross marketing potential

Continued diversification of content monetisation3 Ongoing investment41

Diversifying our audience 2 Scalable platform

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1.1maudience reach

156kaudience reach

2.5maudience reach

1.2maudience reach

Diversifying our audiences - B2B

B2B ProAV/Pro Sound Tech & Music

EducationMedia Entertainment & Tech

481kaudience reach

Healthcare & Medical

495kaudience reach

NEW AUDIENCES - LARGEST SMARTBRIEF VERTICALS

Finance & Insurance

Tech & Telecoms +187k from SmartBrief

+661k from SmartBrief

Page 10: Acquisition of SmartBrief Investor Deck · Our purpose for B2B To deliver high-quality content in a trusted voice to the vertical markets we serve through multiple platforms We engage

Scalable platformSupporting organic growth - further optimisation of advertising tech stack and eCommerce functionality

WEB PLATFORM:VANILLA

MEMBERSHIP SERVICE

CONTENT COMMISSIONING

PORTAL:SOURCE CMS

AUTOMATED CONTENT TAGGING

WEBSITE BUILDER

ASSET STORAGESYSTEM

CONTENT RE-USE CONTENT LOCALISATION

FREELANCESTAFF

FLEXI

WEBSITE MONETISATION

ECOM TECH: HAWK

AD TECH:

HYBRID

18 sites now on Vanilla

Assets Websites Monetisation

EMAIL MONETISATION

CONTENT SCRAPING & CURATION

AD PLACEMENT & REPORTING

NEW SMARTBRIEF ASSETS

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We seek to own the ecosystems of our B2C and B2B verticals by:

● Diversifying our revenue streams through adding components of the monetisation wheel

● Expanding our audience into new territories

● Introducing new brands to our portfolio● We do this organically and via acquisition

Expanding our vertical ecosystem

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Expanding our B2B monetisation channels

Acquisition of SmartBrief adds to the B2B element of the platform

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Solid financials Attractive customer base● Over 200 association partners ● Covers 8 sectors including education, healthcare,

finance and retail● Multi-year partnership contracts● Diversified customer base with limited concentration

Association partners

Advertisers

Cumulative Ad-Based Brief Subscriptions (M)*

● Stable revenue stream of $35.1m pa, which delivers $5.0m EBITDA on a TTM pro-forma basis

● Management have guided business through a period of continual expansion and revenue growth over 20 years

● Subscriber acquisition provides growing list of fully consented customers

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Summary

● Key asset for the B2B element of the platform; proprietary technology providing content curation and email service provider

● Enhances scale of product capabilities of B2B division● Boosts growth in existing email revenue stream and cross marketing opportunities● Adds potential to drive consumer audiences through email newsletters ● Immediately earnings enhancing

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APPENDIX

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Page 16: Acquisition of SmartBrief Investor Deck · Our purpose for B2B To deliver high-quality content in a trusted voice to the vertical markets we serve through multiple platforms We engage

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

Our Purpose

”16

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Our purpose for B2B

To deliver high-quality content in a trusted voice to the vertical markets we serve through multiple platforms

We engage our audience by helping them to make educated decisions and find the B2B companies and products or services that help them to do their jobs better resulting in delivering qualified leads to our advertisers

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Shared lists

Technology customers

Education customers

Future B2B

Future B2CNew audience

Opportunities to leverage proprietary technology in B2B and B2C

Utilise SmartBrief

tech platform