Centaur’s strategy - Investis...
Transcript of Centaur’s strategy - Investis...
STRICTLY CONFIDENTIAL
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Centaur’s strategy
Financial performance
Operational review
XEIM
Summary
Agenda
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A CLEAR AND
FOCUSED
STRATEGY
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Centaur’s transformation
Like other traditional media groups, Centaur needed to
transform a business built on advertising revenues.
Today, Centaur advises, informs and connects business
professionals by offering business intelligence and expertise,
consultancy and training, lead generation and events.
This is a more resilient and focused business with the
opportunity to grow .
In moving from readers to paying customers, we are building
recurring high quality revenue streams that will allow us to
generate growing profits at a higher margin and to expand
sales through new product development.
We are intent on simplifying the group, delivering operational
benefits and focusing attention on our leading brands. Over the
past six months we have accelerated this plan by exploring the
divestment of our non-core businesses.
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Executive summary: 2018 highlights
Strategic
• Strategic review resolved to focus on developing Centaur ’s information, intelligence and consulting services
primarily in the global marketing sector
• Creation of XEIM to help our clients accelerate their marketing performance
• Exploring divestment of non-core businesses
• Econsultancy and The Lawyer moved to new technology platforms
• Cost efficiencies create opportunity to create higher margin operating model
Financial
• Adjusted operating profits increased 18% to £5.2 million
• Marketing achieved £1.7m in a transitional year
• Professional services increased by 28% to £2.3m
• Financial services had a stronger year, reporting profits of £1.2m
• Revenues from continuing operations increased 9% to £70.5m ( -1.6% underlying)
• Recurring and repeatable revenues have grown to 48% (2017: 44%)
• Final dividend maintained at 1.5p to make 3p per share for the year
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A more focused portfolio – divestment update
• Sales process intended to create simpler, more focused group with opportunities to reduce costs and increase
margin
• Good interest in all of our non-core assets, despite Brexit -related uncertainty
• Transactions expected to complete before end of H1
FINANCIAL AND
OPERATIONAL REVIEW
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Centaur at a glance
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60%
12%
28%
Revenue by Segment
XEIM (Marketing) Financial Services Professional Services
18%
25%
37%
20%
Revenue by Type
Advertising Premium Content Live Events Marketing Services
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Financial results
2018 £m 20171 £m
Revenue 70.5 64.7
Other operating income 0.8 0.7
Net operating expenses (66.1) (61.3)
Adjusted Operating profit 5.2 4.1
Finance costs (0.2) (0.4)
Tax (1.0) (0.9)
Retained adjusted profit 4.0 2.8
Adjusted fully diluted EPS 2.6p 1.8p
• Adjusted operating profits +18% to £5.2m
• Cost discipline supported increase in operating profits
• Revenue increase reflects inclusion of MarketMakers
for full year
• MarketMakers earnout payment of £1.8m
1 2017 is on a continuing operations basis which excludes any revenue and profit generated by Home Interest
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Revenue mix continues to improve
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Centaur now has much more predictable revenues
• 91% of Top 200 customers spent money with Centaur in
each of past 3 years (excluding MarketMakers)
• Top 19 out of 20 enterprise customers spent last year
• Recurring and repeatable revenues have grown to 48%
• Non-advertising revenues at 82%
• Print advertising at 4%
15%
20%
25%
30%
35%
2014 2015 2016 2017 2018
Exposure to Advertising
Exposure to Advertising %
0%
5%
10%
15%
20%
25%
2014 2015 2016 2017 2018
Exposure to Print
Exposure to Print
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3.4
5.8
3.4
0.8
6.1
11
0.2
0.20.00.3
0.3
0.5
1.2
7.57.2
Live EventsHome
Interest
(discontinued
operations)
MarketMakers
Jan-July 2017
(pre-
acquisition)
71.6
2017
Reported
Corporate
Adviser
(disposed
December
2017)
2017
Underlying
AMS -
Biennial
Event 2017
2017
Continuing
64.7
71.9-1.6%
2018
Underlying
and
Reported
Premium
Content
Marketing
Services
(MarketMakers)
OtherAdvertising
70.5
Underlying revenue bridge
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Underlying profit bridge
5.2
4.4
0.2
0.3
4.1
6.6
0.9
0.80.90.8
2.5
Professional
Services
Marketing 2018
Underlying
and Reported
Financial
Services
2017
Underlying
MarketMakers
Jan-July 2017
(pre-
acquisition)
AMS - Biennial
Event 2017
2017
Reported
2017
Continuing
Home Interest
(discontinued
operations)
Corporate
Adviser
(disposed
December
2017)
+18%
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• The simplification of the group following
the sale of Home Interest in 2017 has
enabled further cost reductions
• Tight cost control maintained
• Divestments will provide additional
opportunities to reduce overheads and
operate more efficiently
£m
10
15
20
15.5
20.2
2016 2017
19.6
2015
17.8
-23%
2018
A simpler business with lower overheads
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Cash conversion and cash flow
(£m) 2018 2017
Adjusted operating profit 5.2 6.6
Depreciation and amortisation 3.7 3.6
Movement in working capital (1.3) 3.9
Adjusted operating cash flow 7.6 14.1
Operating cash conversion 85% 138%*
*2017 cash conversion reflects recovery from cash collection problems of 2016
£m
Cash balance at 31 December 2017 4.1
MarketMakers earnout payment (1.8)
Dividends (4.3)
Capex (2.8)
Other net cash flows 5.0
Cash balance at 31 December 2018 0.1
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A transitional year for Marketing
11%
26%
30%
33%
Marketing revenues
Advertising Premium Content
Live Events Marketing Services
• Revenues held back by:
• Delayed transition to new technology platform
• Small number of larger US contracts delayed
• Growth of MarketMakers slowed in H2
• Econsultancy subscription renewals and growth have picked up since platform
transition completed in September
• Launch of Influencer Intelligence has gone well
• Festival of Marketing had an excellent year, Marketing Week brand extensions
performing well
• Rebranded as XEIM in January to support more coordinated Client sell
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Group revenues 60%
Adjusted op profit £1.7m
Revenues £42.7m
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• Adjusted operating profits up 28% to £2.3m, reflecting robust
performance from The Lawyer
• 61% of revenue now comes from live events, 23% from advertising and
16% from premium content
The Lawyer
• 2018 revenue up 4% at £7.4m
• The Lawyer ’s move to scalable technology platform has encouraged more
digital usage and engagement
Exhibitions
• Business Travel Show delivered double-digit revenue growth thanks to
more exhibitors
• Employee Benefits Live and The Meeting Show also increased revenue
23%
16%61%
Advertising Premium Content Live Events
Professional Revenues
Group revenues 28%
Adjusted op profit £2.3m
Revenues £19.6m
Strong profit performance from Professional Services
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The Lawyer: strong and growing engagement
77%
39%
19%
25%
4%36%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2013 2018
£'0
00
Advertising Events Information
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
500
1000
1500
2000
2500
3000
3500
Jan
-15
Feb
-15
Mar
-15
Ap
r-1
5M
ay-1
5Ju
n-1
5Ju
l-1
5A
ug-
15
Sep
-15
Oct
-15
No
v-1
5D
ec-1
5Ja
n-1
6Fe
b-1
6M
ar-1
6A
pr-
16
May
-16
Jun
-16
Jul-
16
Au
g-1
6Se
p-1
6O
ct-1
6N
ov-
16
Dec
-16
Jan
-17
Feb
-17
Mar
-17
Ap
r-1
7M
ay-1
7Ju
n-1
7Ju
l-1
7A
ug-
17
Sep
-17
Oct
-17
No
v-1
7D
ec-1
7Ja
n-1
8Fe
b-1
8M
ar-1
8A
pr-
18
May
-18
Jun
-18
Jul-
18
Au
g-1
8Se
p-1
8O
ct-1
8N
ov-
18
Dec
-18
MAT Digital Performance
Digital Information Actual Revenue % Growth Digital Information MAT
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A leading media brand for the global legal services market,
positioned for growth
• Information revenues up 19%
• Digital billings up 50%
In 2018, The Lawyer received a full year of benefits
following transition from weekly to monthly magazines and
a digital platform refresh
• Digital usage up 25% yoy since launch of new
platform
• Successful launch of Litigation Tracker in January
2019
88 of the top 100 UK and US law firms are subscribers
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(60%)
(40%)
(20%)
0%
20%
40%
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
Q118
Q218
Q318
Q418
Money Marketing Ads Growth %
(60%)
(40%)
(20%)
0%
20%
40%
60%
80%
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
Q118
Q218
Q318
Q418
Mortgage Strategy Ads Growth %
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44%
38%
18%
Advertising Premium Content Live Events
Group revenues 12%
Adjusted op profit £1.2m
Revenues £8.2m
Financial Services stronger
Operating profit strengthened to £1.3m
• Performance bolstered by consolidation and focus on core brands: Money
Marketing and Mortgage Strategy
• Strong digital advertising performance and uplift in display advertising
Adjusted operating profit margin improved from 39% to 43%
As expected, Tax Briefs experienced a year of lower revenues due to a change
to a single budget announcement after two budgets in 2017
Financial Services Revenues
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XEIM was created to offer our customers excellence in marketing –
by advising, informing and connecting marketing professionals
Market dynamics
• Marketing analytics have grown by 41% over the last 3 years to
$9.4bn*
• Social media marketing and monitoring has increased by 71%
over the last 3 years to $3.6bn*
• The global B2B Media & Business Information sector has grown
by 13% over the last 3 years to $4.8bn*
• Content marketing has risen by 11% over the last 3 years to
$10.3bn*
• Audience measurement has increased by 8% over the last 3
years to $35.8bn*
*Source: Outsell
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XEIM is focused on a large, growing and global market
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• ADVISE how to improve performance and ROI
• INFORM using data, content and insight
• CONNECT to specific communities
Events &
Experiential
Email / Social
Native Content
Programmatic
Training
Strategic
Consultancy
Data & Lead
Generation
3rd Party
Optimization
LOYAL
CUSTOMERS
Research
Market reports
& data
Thought
Leadership
Briefings &
Webinars
CLIENTS
Advise, Inform, Connect
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XEIM’s growth potential
Strategy to drive profitable growth for XEIM:
• Grow digital information products globally and
domestically
• Expand e-learning and Mini MBA series
• Expand enterprise accounts
• Scale core events
• Programme of cost reduction in central overheads
• Low profit and declining assets will be discontinued
By 2022, XEIM has the potential to deliver:
• Double-digit revenue growth
• Double-digit profit growth
• Ebitda margin of >20%
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0%
10%
20%
30%
40%
50%
60%
70%
80%
H1 2017 H2 2017 H1 2018 H2 2018
Renewal rates
Volume
-40%-35%-30%-25%-20%-15%-10%
-5%0%5%
10%15%
II
II New Business % Growth 2016 – 2018
(12 month MAT)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
FY16A FY17A FY18O
e-Learning
Bespoke Research
Market Reports:Individual
Market Reports:Subscription
The Lawyer:Subscriptions
Investment in digital platforms driving growth
• The Lawyer completed a refresh to give the business a new multi -channel and scalable digital platform
• Digital usage is up 25% year-on-year
• Launch of Influencer Intelligence’s new service, now fully combining data, intelligence and global trends
• Trajectory of new business ended 2018 at +11% year -on-year, Q1 has started well
• Traffic and usage are strong
• Econsultancy moved to a new, scalable technology platform, delivering product improvements, better customer journeys
and greater sales focus – resulting in increased usage and higher renewal rates
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2016 2017 2018
£m
0%5%10%15%20%25%30%35%
- 0.50 1.00 1.50 2.00 2.50 3.00
CA
P M
arg
in %
Revenue £
m
Revenues Linear (CAP Margin)
31%
15%
15%
My ‘go to’ brand
Marketing Week’s successful innovation continues to deliver
Marketing Week
• Trusted source of industry expertise and intelligence
• 31% of customers say Marketing Week is their ‘go to’ brand
• A ‘launch pad’ for new product development
Festival of Marketing
• In 2018: 12 live stages of content and celebrated speakers
• More than 4,000 attendees
• Doubled profit contribution
Mini MBA
• Developed in 2016 with Mark Ritson
• Doubled number of delegates
• Revenues grew by +68%
• Satisfaction scores remain in excess of 90%
• Further MBA launches planned
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Building XEIM’s capability
MarketMakers
• Acquired in 2017 to enhance lead generation capability
• UK’s No.1 B2B telemarketing agency
• Includes Really, award-winning B2B agency with data
science capability
Oystercatchers
• Acquired in 2016
• New strategy drove +10% profits year-on-year
• Oystercatchers product innovation includes:
• Modern Marketing Pitch
• New content platform for Club members with MW
• New awards evening
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Enterprise clients increasingly important to XEIM
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Strong focus on the needs of our largest clients
• 75% of Top 100 customers have spent money with the business for 3 years running
• 26% increase in year-on-year spend across XEIM’s Top 100 customers
• 17.7% of XEIM clients now buy multiple brands
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In summary
• Centaur is now a more resilient and focused business with the opportunity to grow
• We will continue to simplify the Group and focus attention on our leading brands
• Creation of XEIM helps our clients accelerate their marketing performance
• Cost efficiencies create opportunity to create higher margin operating model
• Further detail on guidance at the half year
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APPENDIX
APPENDIX
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0
50
100
150
200
250
300
350
400
450
500
Advertising B2B Content CustomerExperience
Data andAnalytics
Ecommerce Email andEcrm
Innovation andTrends
Mobile SearchMarketing
Social Strategy
Topic Hub Page Traffic (page views)
Q1 2018 Q2 2018 Q3 2018 Q4 2018
Since new platform launch, traffic has increased significantly to all high value content areas
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Increases in Econsultancy product usage
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