Final Results Presentation Thursday 29 November 2018 Full Year ended 30 September 2018 Paul Zwillenberg, CEO Tim Collier, CFO
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Final Results Presentation
Thursday 29 November 2018
Full Year ended 30 September 2018
Paul Zwillenberg, CEO
Tim Collier, CFO
© 2018 DMGT
Disclaimer
2
Certain statements in this presentation are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward looking statements. These risks, uncertainties or assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward looking statements contained in this presentation regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. You should not place undue reliance on forward looking statements, which apply only as of the date of this presentation.
This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares of the Company. Past performance cannot be relied upon as a guide to future performance.
© 2018 DMGT 3
Good progress with strategic priorities and Full Year results in line with expectations
Successful execution against DMGT’s strategic priorities
Strong financial position: £233m net cash post ZPG disposal; pension surplus
Performance in line with expectations:- Some challenging market conditions- Broad-based B2B growth and resilient Consumer revenues- Group underlying revenues +0%; underlying operating profit –17%
Continued real dividend growth
© 2018 DMGT
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Dividend Inflation1998 2018
Real dividend growth continues
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20 year CAGR: 7%
FY 2018 Full Year dividend of 23.3 pence, up +3%
23.3p
9.7p
6.5p
© 2018 DMGT 5
Financial PerformanceTim Collier, CFO
© 2018 DMGT
Financial Summary: Performance in line with expectations
6
Adjusted numbers
Revenue underlying dynamics: growth in B2B (+3%) and decline in Consumer Media (-4%)
Operating profit dynamics: adverse impact of Consumer Media, Corporate costs; B2B stable
EPS pro forma reduction of 23%: reduced pro forma profits from JVs and associates and increased tax rate
Note: * FY 2017 Pro forma treats Euromoney as a c.49% associate for the full year, consistent with FY 2018. Change is relative to pro forma.
£ millionFY 2017
Reported
FY 2017
Pro forma*FY 2018 Change* Underlying
Revenue 1,660 1,564 1,426 (9%) +0%
Operating profit 198 179 145 (19%) (17%)
Profit before tax 226 216 182 (16%)
Profit after tax 197 194 149 (23%)
Earnings per share 55.6 p 54.8 p 42.2 p (23%)
Dividend per share 22.7 p 22.7 p 23.3 p +3%
© 2018 DMGT
Financial Summary: Statutory numbers
7
Reduced exceptional costs and impairments: improved statutory operating profit
Significant impact from profit on sale of assets: - ZPG Plc and EDR FY 2018; included in profit before tax (PBT) - Euromoney FY 2017; discontinued operation excluded from PBT, included in profit for the year and EPS
Note: * FY 2017 profit on sale of assets included £509m in respect of discontinued operations (Euromoney) which was excluded from profit before tax.
£ million FY 2017 FY 2018 Change
Revenue 1,564 1,426 (9%)
Operating profit (129) 169 N/A
Profit on sale of assets* 530 658 +24%
Profit before tax (112) 692 N/A
Profit for the year 342 688 +101%
Earnings per share 97.8 p 194.7 p +99%
© 2018 DMGT
The shape of DMGT FY 2018
8
Clear roles across a diverse portfolio
Revenue £881m
Profit £156m
Underlying revenuegrowth rate (3)%
Cash OI margin 18%
Figures exclude disposals and closures that occurred during the year. Profit refers to adjusted operating profit pre Corporate costs. Cash OI is cash operating income, which is EBITDA less capital expenditure.
Operating at scalePredictable performers
Focused growthGrowing and delivering
Early betsBusinesses for the future
Revenue £492m
Profit £38m
Underlying revenuegrowth rate +6%
Cash OI margin 11%
Revenue £5m
Profit £0m
Underlying revenuegrowth rate +28%
Cash OI margin (8)%
Note: Figures do not include joint ventures, associates or minority investments. DailyMailTV became an Early bet after year end, in October 2018, and is excluded.
© 2018 DMGT
B2B Revenue
9
Performance in line with expectations and guidance
Note: * Pro forma excludes Euromoney, consistent with FY 2018 and the percentage change figures are relative to pro forma. Including Euromoney, FY 2017 B2B revenues were £976m.
Revenue: broad-based underlying growth; Property Information marginally down
Impact on reported revenues from weaker US dollar and increasing portfolio focus:- US Property Information (Xceligent, EDR, SiteCompli)
- EdTech (Hobsons Admissions and Solutions)
- Energy Information (Locus Energy)
FY 2017
Pro forma*
Insurance Risk 233 229 (2%) +5%
Property Information 328 272 (17%) (2%)
EdTech 115 68 (41%) +9%
Energy Information 88 86 (3%) +7%
Events & Exhibitions 117 118 +1% +5%
B2B Revenue 881 773 (12%) +3%
£ million UnderlyingChange*FY 2018
© 2018 DMGT
B2B Operating profit and margin
10
Performance in line with expectations and guidance
Note: * Pro forma excludes Euromoney, consistent with FY 2018 and the percentage change is relative to pro forma. Including Euromoney, FY 2017 B2B operating profit was £153m and the operating margin was 16%.
Cash operating income: Grew £11m pro forma, benefitting from PIP initiatives and despite £5m operating profit ↓
FY 2017
Pro forma*
B2B Operating profit 133 128 (4%) (1%)
Operating margin:
B2B 15% 17%
Insurance Risk 14% 15%
Property Information 16% 21%
EdTech 14% 11%
Energy Information 2% 0%
Events & Exhibitions 26% 24% ↑Costs for major shows
Revenue flow-through
Xceligent closure
Admissions disposal
↓ Capitalisation
Underlying£ million FY 2018 Change*
© 2018 DMGT
B2B Summary
11
Performance in line with expectations and guidance
Outlook Full Year 2019: - More focused portfolio than in FY 2018- Continued underlying revenue growth in the low-single digits ²- Investment in products to drive long-term growth, notably RMS- Operating margin in the mid-teens
Notes: 1. Pro forma FY 2017 figures exclude Euromoney, consistent with FY 2018. The percentage change figures are relative to pro forma2. FY 2018 revenues, restated for the current portfolio of businesses, were £725m
Revenue 976 881 773 (12%) +3%
Operating profit 153 133 128 (4%) (1%)
Operating margin 16% 15% 17%
Underlying£ million
FY 2017
Pro
forma¹Reported
FY 2018 Change¹
© 2018 DMGT
Consumer Media: dmg media
12
Resilient performance in challenging markets, in line with expectations and guidance
Revenue: declining circulation (-5%) and lower advertising (-1%)
MailOnline continued to grow advertising (+5%) and direct audience; indirect traffic impacted by social media and search platform dynamics
Operating margin in line with expectations: benefit from disposals and reduced newspaper cost base
Outlook Full Year 2019: - Continuation of existing revenue dynamics: digital advertising ↑, print advertising ↓ and circulation volume ↓- Inclusion of DailyMailTV as an Early bet subsidiary- Mid-single digit underlying revenue decrease*; continued challenging advertising market- Operating margin in the high-single digits
£ million FY 2017 FY 2018 Change Underlying
Revenue 683 654 (4%) (4%)
Operating profit 77 64 (17%) (22%)
Operating margin 11% 10%
Note: * FY 2018 revenues, restated for the current portfolio of businesses, were £663m
© 2018 DMGT
Consumer Media: dmg media
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Revenue
£ million FY 2017 FY 2018 Change Underlying
Daily Mail / The Mail on Sunday 455 424 (7%) (7%)
circulation 308 291 (5%) (5%)
advertising 131 119 (9%) (9%)
other 17 14 (18%) (18%)
MailOnline 119 122 +3% +5%
Mail Businesses 574 546 (5%) (5%)
Metro 68 71 +4% +4%
Newsprint & other 36 37 +3% +0%
Total Continuing 678 654 (4%) (4%)
Elite Daily & 7 Days 5 - (100%)
Total Revenue 683 654 (4%) (4%)
© 2018 DMGT
Corporate costs
14
Growth in FY 2018 Corporate costs: inclusion of US dmg information costs; strengthened technology and strategy functions; inclusion of advisory fees
Outlook:- Reduction in central headcount in October 2018- FY 2019 guidance of <£45m, including restructuring costs- Further cost reductions in FY 2020
Supporting a performance management culture
£ million FY 2017 FY 2018 Change Underlying
Corporate costs 32 47 +50% +25%
© 2018 DMGT
Group revenue and operating profit
15Note: * Percentage change figures are relative to Pro forma FY 2017, excluding Euromoney.
£ millionFY 2017
Reported
FY 2017
Pro forma*FY 2018 Change* Underlying
Revenue:
B2B 976 881 773 (12%) +3%
Consumer Media 683 683 654 (4%) (4%)
DMGT 1,660 1,564 1,426 (9%) +0%
Operating profit:
B2B 153 133 128 (4%) (1%)
Consumer Media 77 77 64 (17%) (22%)
Corporate costs (32) (32) (47) (50%) (25%)
DMGT 198 179 145 (19%) (17%)
DMGT operating margin 12% 11% 10% +0%
© 2018 DMGT
Joint ventures & Associates
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Euromoney: underlying revenues +3%, adjusted PBT +3%; sold Global Markets Intelligence Division in Apr’18
ZPG: only included for 8.5 months prior to disposal
Other JVs & Associates: increased investment in early stage businesses, e.g. DailyMailTV
Outlook Full Year 2019:- Absence of ZPG, full year impact of Euromoney’s disposals and inclusion of Yopa (-); absence of DailyMailTV (+) - ≥£40m share of operating profits
DMGT’s share of operating profits
Note: * Pro forma FY 2017 figures treat Euromoney as a c.49% associate for the full year, consistent with FY 2018.
£ millionFY 2017
Reported
FY 2017
Pro forma*FY 2018
Euromoney 47 56 56
ZPG 25 25 23
Other (2) (2) (5)
Total JVs & Associates 69 79 74
© 2018 DMGT
Net finance costs
17
Benefit from moving into net cash position during the year
Outlook Full Year 2019: net finance costs c.£15m
Note: * Pro forma FY 2017 figures treat Euromoney as a c.49% associate for the full year, consistent with FY 2018.
£ millionFY 2017
Pro forma*FY 2018
Net interest payable pre JVs and Associates 36 33
Share of JVs' and Associates' finance costs 5 4
Net interest payable 41 37
Items excluded from adjusted results:
IAS19(Revised) finance costs / (credit) 5 (2)
© 2018 DMGT
Adjusted results
18Note: * Percentage change figures are relative to Pro forma FY 2017, which treats Euromoney as a c.49% associate for the full year,consistent with FY 2018.
£ millionFY 2017
Reported
FY 2017
Pro forma*FY 2018 Change*
Adjusted operating profit 198 179 145 (19%)
Joint ventures and associates 69 79 74
Net finance costs (42) (41) (37)
Adjusted profit before tax 226 216 182 (16%)
Taxation (29) (27) (33)
Minorities (1) 4 -
Adjusted earnings 196 194 149 (23%)
Adjusted EPS 55.6 p 54.8 p 42.2 p (23%)
Adjusted tax rate 12.8% 12.6% 18.2%
© 2018 DMGT
Exceptional items and amortisation
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Significantly reduced exceptional costs
Note: Figures include JVs and Associates and discontinued operations.
Reduced exceptional cash costs: significant progress made
Non-cash exceptional item: £17m past service charge re pension schemes
Impairment of RMS(one) asset: £58m non-cash item relating to pre August 2016 development costs
Profit on sale: includes £508m from ZPG Plc and £52m from EDR
£ million FY 2017 FY 2018
Exceptional cash costs (43) (3)
Other non-cash exceptional costs - (17)
Share of JVs' & associates' exceptional operating costs (7) (5)
Total exceptional operating costs (50) (25)
Impairment of intangible assets & goodwill (231) (63)
Amortisation, impairment of plant & other (59) (62)
Profit on sale of assets 530 658
Pre-tax exceptional credit 190 508
© 2018 DMGT
Net cash position
20
(464)
233
117
2213
37
81 4
(475)
(375)
(275)
(175)
(75)
25
125
225
325
425
£m
EDR Proceeds
Opening net debt M&A Operating cash flow Taxation Pensions Interest Dividends FX adjustment Closing net cash
738
Operating cash flow is stated after capex of £50m and exceptional operating items of c.£10m
Operating cash conversion 80% (vs. 87% FY 2017 pro forma)
Cash operating income of £155m: (vs. £181m FY 2017 pro forma, despite £34m reduction in operating profit)
Note: Operating cash conversion % = operating cash flow / adjusted operating profit
© 2018 DMGT 21
Significantly stronger balance sheet
Increased net pension surplus on an accounting basis IAS19 (Revised)
Funding payments based on actuarial valuation; £13m funding payments in FY 2019
Net cash £233m: £424m bond debt, including £219m maturing Dec’18; £675m cash and short-term deposits
Significantly enhanced financial flexibility from active balance sheet management
Net cash and pension surplus
£ million 30 Sep'16 30 Sep'17 30 Sep'18
Net (debt) / cash (679) (464) 233
Pension (deficit) / surplus (246) 62 244
Total (liabilities) / assets (925) (402) 476
© 2018 DMGT
Revenue and profit outlook FY 2019
22
Corporate costs <£45m
JVs & Associates (pre-tax) ≥£40m
Net finance costs c.£15m
Effective tax rate: c.20%
Note: * FY 2018 revenues, restated based on the current portfolio of businesses, were £725m for B2B and £663m for Consumer Media.
Underlying revenue
Revenue* Margin growth Margin
B2B £773 m 17% Low-single digit % Mid-teens %
Consumer Media £654 m 10% Mid-single digit % decline High-single digit %
FY 2018 Outlook FY 2019
© 2018 DMGT 23
Clear financial strategy underpinned by a strong balance sheet
Improved visibility: closer to businesses, performance management culture
Increased transparency: fewer exceptional items
Cash focus: less capitalisation and Cash OI prioritised
Discipline: capital allocation, ROI mind-set
© 2018 DMGT 24
Strategy and business updatePaul Zwillenberg, CEO
© 2018 DMGT 25
Satisfying the need to
know
PerformanceImprovement Programme (PIP) delivering results
DMGT Strategy
ZPG Plc disposal
EDR disposal
Xceligent closure
Locus Energy → associate
Hobsons’ Solutions disposal
SiteCompli → associate
Net cash £233m
Good progress made
© 2018 DMGT
Product
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PIP delivery: H2 FY 2018 initiatives
Commercial
Operations
Operating at scale Early bets *
People
Technology
Improved programmatic and video
Focused growth
Developed Naviance multi-year and customer bundles
Built CLO sales and marketing capabilities for Sep’18 ‘MVP’ launch
Annualised Gastech
Tailored pricing and commercial bundles for Landmark Legal
Built proof of concept for advanced machine learning
Rationalised andcentralised functions
Accelerated data delivery
Merged into AlsoEnergy
Seconded CFO from Mail Brands
Note: * The Early bets show businesses that became associates during the year: AlsoEnergy (Sep’18) and Yopa (Aug’18).
Appointed new EVP, Sales & Client Development
Beta launchedGenscape data API
Established new commercial leadership following successful merger of Mail and Metro teams
© 2018 DMGT
RMS: Shaping the business for the future
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New CEO and leadership team in place: extensive enterprise software experience
Building on market-leading position: core business includes catastrophe models, data, analytical services and software
Enhanced strategy to deliver long-term growth: - Market acceptance of cloud computing and technology have both evolved- Customer demand for broader set of solutions across more areas of risk- Re-architecting platform: ↓running costs / ↑performance / modular delivery / new products - Incorporating innovative technologies: artificial intelligence and machine learning- Scalable, secure, flexible and extensible
Increasing investment: software, data, data analytics and applications
© 2018 DMGT
MailOnline: Growing an engaged, direct audience
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Consistent focus on direct traffic: 77% of audience time
A large and very engaged audience: 145m minutes daily average on MailOnline site and apps, up 2% - direct traffic minutes up 7%
Growing distribution channels: Snapchat, Facebook video, Apple News, YouTube and DailyMailTV - over 60m daily unique visitors
Continued growth: - £122m Revenue (> Mail print advertising)- Delivering a growing positive contribution
© 2018 DMGT
Increased portfolio focus and enhanced financial flexibilityTwo years of progress: September 2016
InsuranceRisk
EnergyInformation
Property Information
EdTech Events & Exhibitions
Consumer Media JVs & Associates
Power
Oil
Gas
Maritime
Alternatives
Net debt: £(679)m
29 A
© 2018 DMGT
Increased portfolio focus and enhanced financial flexibilityTwo years of progress: September 2018
InsuranceRisk
EnergyInformation
Property Information
EdTech Events & Exhibitions
Consumer Media JVs & Associates
Power
Oil
Gas
Maritime
* DailyMailTV became a subsidiary in October 2018
*
Net debt: £(679)mNet debt: £(679)m Net cash: £233m
29 B
© 2018 DMGT
Clear capital allocation framework
Prioritise organic opportunities
Investing through the cycle
Focus on growth opportunities and disruptive technologies
Initiatives aligned with portfolio roles
Dividend Commitment to dividend policy: real dividend growth
Balanced and flexible approach to uses of capital
Acquisitions approach: structured & disciplined – no ‘deal fever’
Maintaining financial flexibility
Shareholder returns
Underpinned by strong balance sheet, maintaining financial flexibility
30
© 2018 DMGT
Delivering sustainable returns over the long-term
Market leading positions
Sustained EPS and dividend
growth
Strong balance sheet
Growing, digitising
sectors
Satisfying the need to
know
Revenue, profit and cash growth
Clear portfolio roles
Enabling balanced and flexible capital allocation
PerformanceImprovement Programme (PIP)
31
© 2018 DMGT
Questions
32
© 2018 DMGT
Appendix
33
© 2018 DMGT
Insurance Risk: RMSGood performance, in line with expectations
Revenue: continued underlying growth; mainly benefiting from one-off project revenues as well as subscriptions
Operating profit: underlying growth driven by flow-through from underlying revenue growth
Model releases: incl. North American Hurricane-Storm Surge, Asia Pacific earthquake and typhoon models and Cyber v.3
RMS(one): - Re-architecting the platform to deliver improved performance at lower cost- Delivering a platform that will be scalable, secure, flexible and extensible, for the evolving and future risk market - £58m impairment of asset; historic development costs (pre Aug’16)
Priorities in the year ahead: - Increased investment in software, data, data analytics and applications- Continued development of risk models- Continued underlying revenue growth; margin will reflect absence of RMS(one) amortisation charges offset by
increased platform investment
£ million FY 2017 FY 2018 Change Underlying
Revenue 233 229 (2%) +5%
Operating profit 33 35 +5% +16%
Operating margin 14% 15%
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© 2018 DMGT
Property InformationUS growth but challenging UK market conditions
Revenue: US underlying growth offset by continued challenging UK market conditions
Operating profit: underlying reduction due to Trepp investment and UK market; margin benefited from closure of loss-making Xceligent
Portfolio activity: closure of Xceligent in Dec’17, sale of EDR and partial sale of SiteCompli to 49% holding
Priorities in the year ahead: - Product development at Trepp and Landmark to support future growth (e.g. Trepp CLO analytics)- Growth from BuildFax- Anticipate continued challenging market conditions in the UK
£ million FY 2017 FY 2018 Change Underlying
Revenue 328 272 (17%) (2%)
Operating profit 52 58 +12% (8%)
Operating margin 16% 21%
35
© 2018 DMGT
EdTech: Hobsons
Strong underlying growth
Revenue: continued underlying growth across all three businesses - Naviance, Intersect and Starfish
Operating profit: underlying improvement due to benefits of Performance Improvement Programme
Impact of disposal of Hobsons’ Admissions and Solutions businesses: reduced absolute revenue and margin
Priorities in the year ahead: - Investment to modernise core EdTech product platforms and add new client-facing features and functionality- Focus on continued underlying revenue growth and improving cash generation
£ million FY 2017 FY 2018 Change
Revenue 115 68 (41%) +9%
Operating profit 16 7 (55%) +205%
Operating margin 14% 11%
Underlying
36
© 2018 DMGT
Energy Information: Genscape
Continued revenue growth and improving cash generation
Revenue: continued underlying growth from power, oil and gas
Reduced operating profit and margin:- Reduced capitalisation of overheads- Restructuring to drive efficiency improvements: costs of change included, not exceptional
Locus Energy merged into AlsoEnergy in Sep’18, driving consolidation in the solar and renewables sector
Improved cash generation: reduced capitalisation; Cash OI up £7m
Priorities in the year ahead: - Investment in product, sales and service to support continued growth in core businesses- Deliver the benefits from restructuring and focus- Expected to deliver underlying revenue growth and is well-positioned to grow profits
Note: * The underlying operating profit performance has deteriorated by £3m including the adverse effects of reduced capitalisation and restructuring charges.
£ million FY 2017 FY 2018 Change
Revenue 88 86 (3%) +7%
Operating profit 2 - (83%) (64%) *
Operating margin 2% 0%
Underlying
37
© 2018 DMGT
Events and Exhibitions: dmg events
Underlying revenue growth continues
Revenue: continued underlying growth- Solid performances from ADIPEC and Big 5 Dubai- Smaller Gastech event, as expected (Tokyo Apr’17, Barcelona Sep’18)- Five new events launched
Operating profit: reduction reflects investment in major shows, notably ADIPEC
Priorities in the year ahead: - Gastech to change to an annual event: Houston Sep’19*- Six new events planned- Big 5 Dubai and ADIPEC Nov’18: stable performance, slower UAE construction market
Note: * The change from an 18 month to an annual frequency for Gastech is expected to result in a smaller event and a lower operating margin. The underlying growth rates in FY 2019 will be calculated by comparing revenues and operating profits to two-thirds of the Sep’18 Barcelona event, reflecting the reduced interval.
£ million FY 2017 FY 2018 Change Underlying
Revenue 117 118 +1% +5%
Operating profit 31 28 (9%) (8%)
Operating margin 26% 24%
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© 2018 DMGT
Event H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
Gastech 18M 18M 18M 18M A A
Big 5 Dubai A A A A A A A
ADIPEC A A A A A A A
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Gastech in September 2019
A Annual
18M c.18 Months
Key
FY14 FY15 FY16 FY17 FY18
Revenues £m £m £m £m £m
Total for major events 42 36 61 70 68
Other events 58 59 44 47 50
100 95 105 117 118
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© 2018 DMGT
DMGT’s long-term approach to value creation
Acquired early-stage businesses:- Find a Property, 2004; PrimeLocation, 2006- Total acquisition cost of £62m
Incubated businesses and grew to #2 in the market
Merged with #3 to form Zoopla Property Group in 2012: - Significantly more properties listed; improved user experience- 55% stake retained, JV status
Successful IPO in 2014:- c. £180m of proceeds- Independent balance sheet and access to capital to pursue M&A
ZPG Plc acquired in June 2018: £642m of gross proceeds
- Total return for DMGT of 14x initial investment
Property portals
40
© 2018 DMGT
High quality, diverse revenue streams
28%
20%
8%
10%
13%
21%
Circulation
Subscriptions
Events
Digital Advertising
Print Advertising
Transactions & Other
Note: Percentages in the slices represent share of revenues in FY 2018. The +X% and (X)% percentages represent underlying growth rates for the year compared to the prior year.
Revenues by type and underlying growth rates
+4%
(5)%
+5%
+6%
+0%
(5)%
41
© 2018 DMGT
Our businesses fit into the three portfolio roles
Operating at scalePredictable performers
Focused growthGrowing and delivering
Early betsBusiness for the future
Predictable cash generation
&Growth initiatives to
reinforce core
Continued revenuegrowth
&Improving Cash OI
margin
Accelerated revenue growth
&Path to profitability
Note: * As well as Early bets that are fully controlled subsidiaries, DMGT holds minority stakes in growth businesses, such as Yopa. These are excluded from the financials disclosed for Early bets. DailyMailTV became a full subsidiary Early bet in October 2018.
*
*
42
© 2018 DMGT
Geographical diversity
FY 2018 Revenues FY 2018 Profits
54%UK
29%North America
17%Rest of World
45%UK
38%North America
17%Rest of World
Revenues by destination and profits by source Rest of World revenues, 17%: 10% Rest of Europe, 7% Middle East, Asia, Caribbean, Africa and Latin America
43
© 2018 DMGT
Revenue dynamicsContinued subscription growth
Notes: * FY 2017 Pro Forma excludes Euromoney, consistent with FY 2018. Change is relative to pro forma.Share of revenues shown to nearest whole percentage.
£ million % of total FY 2017FY 2017
Pro forma*FY 2018 Change* Underlying
Advertising - print 13% 204 197 187 (5%) (5%)
- digital 10% 143 141 136 (3%) +6%
Circulation 20% 308 308 291 (5%) (5%)
Subscriptions 28% 517 454 399 (12%) +4%
Events, conferences and training 8% 141 116 116 +0% +5%
Transactions & other 21% 347 349 297 (15%) +0%
Total Revenue 100% 1,660 1,564 1,426 (9%) +0%
(1%)
44
© 2018 DMGT
Category analysisRevenues by type: FY 2018
£ millionInsurance
Risk
Property
InformationEdTech
Energy
Information
Events and
Exhibitions
Consumer
MediaTotal
Advertising - print - - - - 1 186 187
- digital - - 13 1 - 122 136
Circulation - - - - - 291 291
Subscriptions 213 67 46 73 - - 399
Events - - - - 116 - 116
Transactions & other 16 205 9 11 - 55 297
229 272 68 86 118 654 1,426
45
© 2018 DMGT
Geographical analysisRevenues by destination: FY 2018
This table shows the revenues based on the location of the client receiving the goods or services
£ millionInsurance
Risk
Property
InformationEdTech
Energy
Information
Events and
Exhibitions
Consumer
MediaTotal
Revenue
UK 61 147 0 4 4 557 772
North America 120 91 67 71 13 49 411
Rest of World 49 34 1 10 101 48 243
229 272 68 86 118 654 1,426
46
© 2018 DMGT
Underlying analysisRevenues
Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures, the inclusion of the year-on-year organic growth from acquisitions and for the consistent timing of revenue recognition.
For events, the comparisons are between events held in the year and the same events held the previous time. For Consumer Media, underlying revenues exclude low margin newsprint resale activities.
Amounts are stated rounded to the nearest £1m, consequently totals may not equal the sum of the component integers.
£ million % Underlying M&A Exchange Other Actual Underlying M&A Other Actual
B2B
Insurance Risk +5% 219 - (14) - 233 229 - - 229
Property Information (2%) 242 (83) (3) - 328 237 (34) - 272
EdTech +9% 63 (45) (4) (4) 115 68 - - 68
Energy Information +7% 68 (17) (3) - 88 72 (13) - 86
Events and Exhibitions +5% 112 1 (5) - 117 118 - - 118
Euromoney N/A - (95) - - 95 - - - -
+3% 704 (239) (30) (4) 976 725 (48) - 773
Consumer Media (4%) 642 (5) (3) (34) 683 619 - (35) 654
Total +0% 1,346 (244) (32) (38) 1,660 1,344 (48) (35) 1,426
FY 2017 FY 2018
47
© 2018 DMGT
Underlying analysisAdjusted operating profit
‘Other’ includes adjustments for the timing of shows at dmg events. For FY 2017, central dmg information costs allocated to Property Information, EdTechand Energy Information are reclassified to Corporate costs, consistent with all US central costs being included in Corporate costs in FY 2018.
Amounts are stated rounded to the nearest £1m, consequently totals may not equal the sum of the component integers.
£ million % Underlying M&A Exchange Other Actual Underlying M&A Other Actual
B2B
RMS +16% 30 - (3) - 33 35 - - 35
Property Information (8%) 63 7 (1) 5 52 57 (1) - 58
EdTech +205% 2 (11) - (3) 16 7 - - 7
Energy Information (64%) 5 3 - 1 2 2 2 - -
dmg events (8%) 30 - (2) - 31 27 - - 28
Euromoney N/A - (19) - - 19 - - - -
(1%) 130 (20) (6) 3 153 129 1 - 128
Consumer Media (22%) 82 5 - - 77 64 - - 64
Corporate costs (25%) (38) - - (6) (32) (47) - - (47)
Operating profit (17%) 174 (15) (6) (3) 198 146 1 - 145
FY 2018FY 2017
48
© 2018 DMGT
FY 2017 Pro forma Adjusted earnings
This slide reclassifies Euromoney from being a c.67% owned subsidiary during Q1 FY 2017, to being a c.49% owned associate, consistent with FY 2018.
£ million Reported Revisions Pro forma
Adjusted operating profit 198 (19) 179
Joint ventures and associates 69 9 79
Net finance costs (42) 0 (41)
Adjusted profit before tax 226 (10) 216
Taxation (29) 2 (27)
Minorities (1) 5 4
Adjusted earnings 196 (3) 194
Adjusted EPS 55.6 p (0.8) p 54.8 p
Adjusted tax rate 12.8% 12.6%
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© 2018 DMGT
Exceptional items and amortisation
£ million FY 2017 FY 2018
Reorganisation, redundancy and consultancy (30) (5)
Legal fees (14) 2
Exceptional cash (costs) (43) (3)
Other non-cash exceptional costs - (17)
Share of JVs' & associates' exceptional operating costs (7) (5)
Total exceptional operating costs (50) (25)
Accelerated depreciation and impairment of plant (42) -
Impairment of intangible assets & goodwill (231) (63)
Amortisation of intangible assets (50) (32)
Profit on sale of assets 530 658
Other non-operating items 34 (30)
Pre-tax exceptional credit 190 508 50
© 2018 DMGT
Adjusting itemsReconciliation from statutory PBT to adjusted PBT
¹ The £530m profit on disposals in FY 2017 shown on slide 19 includes the profit on disposal of discontinued operations, which is excluded from statutory PBT as well as from adjusted PBT (since statutory results exclude discontinued operations). The profit on disposal of discontinued operations is effectively added in and then reversed back out in this reconciliation.
£ million FY 2017 FY 2018
Statutory Profit Before Tax - continuing operations (112) 692
Add: Statutory PBT - discontinued operations 14 -
Add: Profit on disposal of discontinued operations ¹ 509 -
Statutory PBT including discontinued operations 411 692
Reverse: Pre-tax exceptional credit (slide 19) ¹ (190) (508)
Remove: IAS19(Revised) finance costs/(credit) (slide 17) 5 (2)
Adjusted Profit Before Tax 226 182
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© 2018 DMGT
Balance Sheet
£ million 30 Sep'17 30 Sep'18 Movement
Goodwill & Intangible assets 576 464 (112)
Other non-current assets 986 995 9
Current assets (excl. cash) 398 302 (96)
Net (debt) / cash (464) 233 697
Pension surplus 62 244 181
Other liabilities (639) (562) 77
Net assets 919 1,675 756
Equity attributable to owners of DMGT 908 1,662 754
Non-controlling interests 11 14 3
Shareholders' equity 919 1,675 756
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© 2018 DMGT
Net cashStrong funding position
Bonds Coupon £m
December 2018 5.75% (219)
April 2021 10.0% (9)
June 2027 6.375% (197)
(424)
Other debt & derivatives (18)
Cash and short-term deposits 675
Net Cash 233
Bank facilities Facility Drawings Undrawn
Expiring March 2023 431 - 431
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© 2018 DMGT
Pension deficit funding plan
• Funding plan agreed in Sep’16: c.£13m p.a. to FY 2019 and c.£16m p.a. from FY 2020 to FY 2027.• Additional £15-30m payable in FY 2022, dependent upon DMGT’s cash generation performance in FY 2020-22, less any contributions related to any
future share buy-backs.• Contributions cease once actuary agrees schemes are not in deficit.• IAS19 surplus at 30 September 2018 = £244m (£62m surplus at 30 September 2017)• Future payments in excess of £13m / £16m p.a. of minimum recovery plan payments are dependent on share buy-backs plus other minor contributions. • Agreed to contribute 20% of any future share buy-backs.• Next triennial actuarial valuation is scheduled for 31 March 2019.
0
10
20
30
40
50
60
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Northcliffe disposal
Share buy-back /Other
Minimum recoverypayments
£ m
illi
on
s
£13m
£Xm
£5m
£Xm
TotalActual Payments
Total RecoveryPlan
Amounts
£29m £29m £29m
£19m
£8m
£13m
£50m £48m
£19m £34m
£5m
£13m £13m
£13m
£13m
£13m
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© 2018 DMGT
FX RateThe weaker US dollar
1.15
1.20
1.25
1.30
1.35
1.40
1.45
US $ / GBP £
FY 2017: $1.27
FY 2018: $1.35
Weaker US dollar in FY 2018- c.£37m revenue impact- c.£5m operating profit
impact
Notes: The revenue and operating profit impact is based on restating FY 2018 results using the FY 2017 exchange rates.55
© 2018 DMGT
Share price performanceThe 25 year view – excluding dividend reinvestment
Se
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3
Ma
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4
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FTSE 'All Share'
DMGT 'A' Shares
56
© 2018 DMGT
Reporting calendarReporting dates for FY 2019
Release Provisional Date
Q1 Trading update 24 January 2019
Half year results 30 May 2019
Q3 Trading update 25 July 2019
Full year results 5 December 2019
57
© 2018 DMGT
Notes
Unless otherwise stated, all profit and profit margin figures refer to adjusted results and not statutory results. The Board and management team use adjusted results, rather than statutory results, to give greater insight to the financial performance of the Group and the way that it is managed. Adjusted results are stated before exceptional items, other gains and losses, impairment of goodwill and intangible assets, amortisation of intangible assets arising on business combinations, pension finance charges or credits and fair value adjustments. Adjusted results include results from discontinued operations, specifically the Euromoneysubsidiary during the first three months of FY 2017.
FY 2017 Pro forma results treat Euromoney as a c.49% associate for the full year, consistent with FY 2018.
Percentages are calculated on actual numbers to one decimal place.
Amounts are stated rounded to the nearest million pounds, consequently totals may not equal the sum of the component integers.
Underlying revenue or profit is revenue or operating profit on a like-for-like basis. Underlying results are adjusted for constant exchange rates, the exclusion of disposals and closures, the inclusion of the year-on-year organic growth from acquisitions and for the consistent timing of revenue recognition. For events, the comparisons are between events held in the year and the same events held the previous time. For Consumer Media, underlying revenues exclude low margin newsprint resale activities. For FY 2017, central dmg information costs allocated to Property Information, EdTech and Energy Information are reclassified to Corporate costs, consistent with all US central costs being included in Corporate costs in FY 2018.
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