FY15 H1 RESULTS - Isentia · FY15 H1 PERFORMANCE REVENUE PERFORMANCE ° 18% YoY growth to $62.2m °...

FY15 H1 RESULTS

John Croll Chief Executive Officer

Nimesh Shah Chief Financial Officer

18 FEBRUARY 2015

OVERVIEW OF FY15 H1 RESULT JOHN CROLL GROWTH STRATEGY JOHN CROLL AND ACHIEVEMENTS

FINANCIAL PERFORMANCE NIMESH SHAH

FY15 OUTLOOK JOHN CROLL Q&A JOHN CROLL AND NIMESH SHAH

AGENDA

1FY15 H1 RESULTS PRESENTATION 18 FEBRUARY 2015

FY15 H1 RESULTS OVERVIEW

2

NPATA PERFORMANCE

° 57.8% YoY growth in reportedNPATA to $13.0m

° 48.2% growth in underlying* NPATA to $12.2m

ISENTIA IS PERFORMING TO FORECAST ACROSS REVENUE, EBITDA AND NPATA

ISENTIA DECLARES FIRST DIVIDEND OF 3.1¢ PER SHARE

FY15 H1 PERFORMANCE

REVENUE PERFORMANCE

° 18% YoY growth to $62.2m

° Organic growth of 11%

° ANZ ARPC YOY strong growth to $29.1k from $25.2k

° Strong penetration growth in ANZ VAS - Media database to 16.7%

- Social to 10.0%- Insights to 7.1%

° 18.4% YoY revenue growth in Asia

EBITDA PERFORMANCE

° 39% growth to $19.7m

° EBITDA margin expands to 31.7% from 27.0%

* Underlying NPATA excludes prior year tax adjustments


FY15 H1 RESULTS VS PRIOR YEAR

$ MILLION FY15 H1 ACTUAL FY14 H1 PRO FORMA VARIANCE $M VARIANCE %

Revenue 62.2 52.7 9.5 18.0%

SaaS 49.0 42.6 6.4 15.0%

VAS 13.1 10.1 3.0 29.7%

ANZ 50.5 42.9 7.6 17.7%

Asia 11.6 9.8 1.8 18.4%

Expenses (42.5) (38.5) (4.0) (10.3%)

EBITDA 19.7 14.2 5.5 39.1%

EBITDA margin 31.7% 27.0% – 4.7%

NPATA 13.0 8.3 4.8 57.8%

Underlying NPATA* 12.2 8.3 4.0 48.2%

*Underlying NPATA excludes prior period tax adjustment relating to IPO restructure


GROWTHSTRATEGY

5

DELIVERING ON FOUR GROWTH STRATEGIES

VALUE ADDED SALES TO ANZ

CLIENTS

✓ 31% YoY revenue growth in value added services:

- Daily Reports to high value clients - Database products continuing to perform strongly with clients looking for an integrated approach through Mediaportal

✓ Successful signing of the Paywall and Online Copyright Agreement with Australian publishers

ASIAN MEDIA INTELLIGENCE

EXPANSION

✓ 30% growth in value added services driven by social media products across Asia with strong growth from global brands in China

✓ Mediaportal delivered into the Asian market and clients being transferred from legacy products

✓ Integrated social media monitoring and media database products present new revenue opportunities in Asia

✓ Signed a number of multi–regional contracts commencing in H2 supported by Mediaportal rollout

PRODUCTDEVELOPMENT

AND INNOVATION

✓ Mediaportal Influencers: extends Mediaportal Connect, to determine ranked lists of media commentators across more than 1,000 topics

✓ Social media profile benchmarking: a new service that analyses the performance of social media profiles and channels

✓ Early warning social event detection: new technology to detect, and discover events as they emerge on social media

✓ Mediaportal fully multilingual: provides the flexibility for entry into other markets with a multilingual platform

STRATEGIC ACQUISITIONS

✓ We are working on our acquisition pipeline in Asia to;

- Strengthen our market leadership - Add clients to our Asian monitoring platforms with potential to upsell other iSentia products - Have similar scale attributes to other “bolt-on” acquisitions


FINANCIAL INFORMATION

7

FY15 H1 REVENUE

KEY POINTS

> Group revenue growth of 18% with organic growth of 11%

> 17.7% growth in ANZ revenue driven by: SaaS and content services growth of 16% Continued take-up of additional value-added services products by existing customer base delivering VAS growth of 31%

> Asian revenue growth of 18.4% supported by: Growth in social media product delivering VAS growth of 30%

Continued focus on acquisition of new clients

52.7

18.4%

17.7%

62.2

9.8

11.6

42.950.5

80.0

60.0

40.0

20.0

0.0FY14 H1 FY15 H1

ANZ

Asia

52.7

29.7%

15.0%

62.2

10.1

13.1

42.649.0

80.0

60.0

40.0

20.0

0.0 SaaS

VAS

FY14 H1 FY15 H1

52.7

18.4%

17.7%

62.2

9.8

11.6

42.950.5

80.0

60.0

40.0

20.0

0.0FY14 H1 FY15 H1

ANZ

Asia

52.7

29.7%

15.0%

62.2

10.1

13.1

42.649.0

80.0

60.0

40.0

20.0

0.0 SaaS

VAS

FY14 H1 FY15 H1

Revenue by geography $m

Revenue by product/service line $m


AUSTRALIA / NEW ZEALAND RESULTS

KEY POINTS

> Fixed fee share of revenue to 34% in FY15 H1 from 31% in FY14

> EBITDA growth of 33.7% reflects 5.4pp margin increase due to upsell of higher margin VAS products to existing customer base and scalable platforms

> Continued transition to SaaS subscription from volume-based mainstream media; 111 customers transferred to fixed fee contract during FY15 H1

> AAP client retention of 99% of revenue

ANZ Financials

$m FY14 H1 FY15 H1 FY15 H1 Variance %

Revenue 42.9 50.5 17.7%

EBITDA 16.9 22.6 33.7%

EBITDA margin 39.4% 44.8%

iSentia Group revenue mix

100%

75%

50%

25%

0%FY14 revenue mix FY15 H1 revenue mix

Volume‐based mainstream media – press

Volume‐based mainstream media – broadcast

Volume‐basedonline news andinternet monitoring

17%

15%13%

15%

20% 21%

11% 11%

Subscription(fixed fee)

VAS

Copyright(pass throughto publishers)

31% 34%

6%6%


KEY POINTS

> ARPC for FY15 H1 was $29.1K which is a 5.9% increase from FY14 H2 driven by:

Increased take-up of VAS products especially high value Insight reports

Price increases in March 2014 of effective 4.2%

Transition to fixed-fee pricing AAP clients ARPC increased by 20% in FY15 H1 through upselling of VAS products and right pricing of contracts

> Connect (media database), Social and Insights penetration targets exceeded prospectus forecasts

> Social media and analysis penetration increased to 10% in FY15 H1 from 7% in FY14 H2, demonstrating the continued focus on delivering quality social products and services to the client base

KEY REVENUE DRIVERS—ANZ

23,942

10.3%

3.9%2.9% 3.9% 4.2% 4.9%

7.1%

4.7% 5.5%7.0%

10.0%

16.7%

11.7%

14.9% 14.4%

ARPC

($)

FY13 H1

31,000

30,000

29,000

28,000

27,000

26,000

25,000

24,000

23,000FY13 H2 FY14 H1 FY14 H2 FY15 H1

FY13 H1 FY13 H2 FY14 H1 FY14 H2 FY15 H1

24,186

25,231

27,482

29,094

Pene

trat

ion

of

ANZ

uniq

ue c

usto

mer

s

Insights reports

Social Monitoring +Analysis

Connect + Newsboost

20%

15%

10%

5%

0%

Annualised ANZ Monthly Average Revenue Per Client (ARPC)

VAS penetration of ANZ unique customers

23,942

10.3%

3.9%2.9% 3.9% 4.2% 4.9%

7.1%

4.7% 5.5%7.0%

10.0%

16.7%

11.7%

14.9% 14.4%

ARPC

($)

FY13 H1

31,000

30,000

29,000

28,000

27,000

26,000

25,000

24,000

23,000FY13 H2 FY14 H1 FY14 H2 FY15 H1


24,186

25,231

27,482

29,094

Pene

trat

ion

of

ANZ

uniq

ue c

usto

mer

s

Insights reports

Social Monitoring +Analysis

Connect + Newsboost

20%

15%

10%

5%

0%


KEY REVENUE DRIVERS—ASIA

KEY POINTS

> Asian revenue growth of 18.4% driven by: VAS clients increased by 82 to 362 delivering 30% revenue growth

SaaS and content growth of 8.4% Continued focus on multi-regional deals In-country marketing campaign providing strong leads

> Launch of Mediaportal in seven Asian countries will provide ongoing revenue growth into FY16

> Asian EBITDA growth of 33.3% with EBITDA margin continuing to expand to 20.7%

500

400

300

200

100

0

Asia

n VA

S cu

stom

ers


219244

280301

362

Asia VAS – unique customers

Asia Financials

$m FY14 H1 FY15 H1 FY15 H1 Variance %

Revenue 9.8 11.6 18.4%

EBITDA 1.8 2.4 33.3%

EBITDA margin 18.4% 20.7%


1H15 RESULTS PRESENTATION 15 FEBUARY 2015

KEY OPERATING EXPENSES DRIVERS

KEY POINTS> Increased copyright expense in FY15 H1 driven by

the impact of AAP acquisition and reflective of SaaS and content revenue growth

> Excluding copyright, operating expenses for FY15 H1 increased by 8.5% mainly driven by annual salary increases in ANZ and Asia, sales incentives and other staff related costs including training

> Compared to FY14 H2, operating expenses increased by $0.9M or 2.8%

Operating expenses (excluding copyright) $m

Operating expenses

$m FY14 H1 FY15 H1 VARIANCE $M

VARIANCE %

Cost of sales (including copyright) 10.3 11.7 1.4 13.6%

Employee expenses 25.3 27.5 2.2 8.9%

Other operating expenses 2.9 3.2 0.3 10.2%

Total operating expenses 38.5 42.5 4.0 10.3%

Operating expenses excluding copyright 32.9 35.7 2.8 8.5%

Oper

atin

g Ca

sh F

low

Cash Flow Conversion

Conversion(RHS)

Operating CashFlow (LHS)

FY11 FY12 FY13 FY14 LTM DEC-14

125%

100%

75%

50%

25%

0%

40.0

0.0

10.0

20.0

30.0

85%

104% 103%96% 92%

5.7%

2.8%

32.9

34.8 35.7

36.0

34.0

32.0

30.0

28.0FY14 H1 FY15 H1FY14 H2

17.1

23.8 23.5

29.7 33.5


FY15 H1 RESULTS OVERVIEW$M FY15 H1 ACTUAL FY14 H1 PRO FORMA VARIANCE $M VARIANCE %

Revenue 62.2 52.7 9.5 18.0%

SaaS 49.0 42.6 6.4 15.0%

VAS 13.1 10.1 3.0 29.7%

ANZ 50.5 42.9 7.6 17.7%

Asia 11.6 9.8 1.8 18.4%

Expenses (42.5) (38.5) (4.0) (10.3%)

Cost of sales (including copyright fees) (11.7) (10.3) (1.4) (13.6%)

Employee costs (27.5) (25.3) (2.2) (8.9%)

Other operating expenses (3.2) (2.9) (0.3) (10.2%)

EBITDA 19.7 14.2 5.5 39.1%

EBITDA margin 31.7% 27.0% – 4.7%

Depreciation and amortisation (2.1) (2.0) (0.1) (7.7)%

EBITA 17.6 12.3 5.3 43.1%

Amortisation of acquired intangibles (4.7) (4.2) (0.5) (11.9%)

EBIT 12.9 8.1 4.8 59.3%

FX (losses)/gains - (0.5) 0.5 100.0%

Net finance costs (1.3) (1.2) (0.0) 2.2%

Profit/(loss) before tax 11.6 6.3 5.3 84.1%

Tax (expense)/benefit (2.8) (1.0) (1.8) (180.0%)

Prior year adjustment 0.8 - 0.8 n/a

NPAT 9.6 5.3 4.3 81.1%

Amortisation of acquired intangibles (after tax) 3.4 2.9 0.5 15.6%

NPATA 13.0 8.3 4.8 57.8%

Underlying NPATA* 12.2 8.3 4.0 48.2%

*Underlying NPATA excludes prior period tax adjustment relating to IPO restructure


OPERATING CASH FLOWOp

erat

ing

Cash

Flo

w

Cash Flow Conversion

Conversion(RHS)

Operating CashFlow (LHS)

FY11 FY12 FY13 FY14 LTM DEC-14

125%

100%

75%

50%

25%

0%

40.0

0.0

10.0

20.0

30.0

85%

104% 103%96% 92%

5.7%

2.8%

32.9

34.8 35.7

36.0

34.0

32.0

30.0

28.0FY14 H1 FY15 H1FY14 H2

17.1

23.8 23.5

29.7 33.5

$m FY11 FY12 FY13 FY14 LTM DEC-14

EBITDA 20.1 22.8 22.9 30.9 36.4

Net working capital (3.0) 1.0 0.6 (1.2) (2.9)

Operating cash flow 17.1 23.8 23.5 29.7 33.5

Conversion (%)1 85.1% 104.4% 102.6% 96.1% 92.0%

Operating cash flow and cash conversion

HIGHLY CASH GENERATIVE MODEL

Notes: Defined as operating cash flow/EBITDA

KEY POINTS

> Last 12 Months (LTM) Dec-14 net working capital movement impacted by increase in trade and other debtors due to underlying growth in the business

> Operating cash flow conversion of 92% in LTM Dec-14

> A dividend is declared of 3.1 cents per share (unfranked) based on 50% payout of FY15 H1 underlying NPATA

> FY 15 H1 capital expenditure of 4% of revenue is in line with prospectus


KEY POINTS

> Total facility of $65 million

$55 million three year revolving cash advance facility (Facility A), with $55 million drawn down at Completion

$10 million three year revolving multi-option facility (Facility B)

> $22.7 million cash and equivalents includes $17.0m prepaid debt

> Loan covenant 3.25x providing leverage headroom of 71%

CAPITAL STRUCTURE$M FACILITY COMMITMENT DRAWDOWN

Facility A 55.0 55.0

Facility B 10.0 –

Total debt 65.0 55.0

Cash and cash equivalents and prepayments

22.7

Net debt 32.3

Leverage ratio 0.93x


FY15 OUTLOOK

16

ISENTIA REAFFIRMS FY15 PROSPECTUS FORECAST

50

40

30

20

10

0

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%FY14A

FY14A

FY15F

FY15F

20%

125.0

100.0

75.00

50.00

28.0%

33.2%

110.6

22.2

SaaS

VAS

EBITDA

124.4

28.5

30.941.3

88.4 95.9

50

40

30

20

10

0

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%FY14A

FY14A

FY15F

FY15F

20%

125.0

100.0

75.00

50.00

28.0%

33.2%

110.6

22.2

SaaS

VAS

EBITDA

124.4

28.5

30.941.3

88.4 95.9

Revenue by product/service line $m

Group EBITDA ($m) and EBITDA margin %

KEY POINTS

> Business performed to forecast in FY15 H1 and continues in the first six weeks of FY15 H2

> FY15 Prospectus Expectations Revenue of $124.4 million, + 12.5% EBITDA of $41.3 million, + 33.6% Underlying NPATA of $27.2 million, + 43.2%

> Continued organic growth in FY15 H2 to support 12.5% revenue increase to $124.4 million (11% organic growth in H1)

> EBITDA margin improvement to 33% from 28% to deliver $41.3 million, an increase of $10.4 million

> New content from paywall agreement being delivered to clients from Q3 FY15


Q&A

18

APPENDIX

19

ABOUT ISENTIA

ASIA-PACIFIC’S LEADING MEDIA INTELLIGENCE COMPANY1, WITH OPERATIONS IN AUSTRALIA, NEW ZEALAND, SOUTH-EAST ASIA AND GREATER CHINA.

> Market leader in Australia, New Zealand (ANZ) and Asia, serving more than 5,000 clients

> Proprietary software and systems that capture, enrich and interpret real-time data

over 5,500 mainstream media outlets

over 55,000 online news sources

over 3.4 million user-generated content sources (including Facebook, Twitter and Weibo)

> Time critical and highly relevant media intelligence provided to the world’s best known brands, companies and governments via innovative Software-as-a-Service (SaaS) platforms - including Mediaportal

> Powerful and complementary suite of value-added services (VAS)

Social media monitoring

Insights and analysis

Media contacts database and hosted digital newsrooms

Notes: 1 By revenue, as per Burton-Taylor International Consulting LLC, “Asia-Pacific Media Intelligence Market”


This presentation contains general information about the activities of of iSentia Holdings Pty Limited (ACN 144 573 795) (iSentia or Company) which is current as at 18 February 2015. It is in summary form and does not purport to be complete. It presents financial information on both a statutory basis (prepared in accordance with Australian accounting standards which comply with the International Financial Reporting Standards (IFRS) as well as information provided on a non-IFRS basis. This presentation is not a recommendation or advice in relation to iSentia or any product or service offered by iSentia’s subsidiaries. It is not intended to be relied upon as advice to investors or potential investors, and does not contain all information relevant or necessary for an investment decision. It should be read in conjunction with iSentia’s other periodic and continuous disclosure announcements filed with the Australian Securities Exchange, and in particular the Half Year Results for the period to 31 December 2014. These are also available at www.isentia.com.

No representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates or opinions or other information contained in this presentation. To the maximum extent permitted by law, iSentia, its subsidiaries and their respective directors, officers, employees and agents disclaim all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through use of or reliance on anything contained in or omitted with this presentation. No recommendation is made as to how investors should make an investment decision. Investors must rely on their own examination of iSentia, including the merits and risks involved. Investors should consult with their own professional advisors in connection with any acquisition or securities.

The information in this presentation is for general information only. To the extent that certain statements contained in this presentation may constitute “forward-looking statements” or statements about “future matters”, the information reflects iSentia’s intent, belief, or expectations at the date of this presentation. Subject to any continuing obligations under applicable law or any relevant listing rules of the Australian Securities Exchange, iSentia disclaims any obligation or undertakings to disseminate any updates or revisions to this information over time. Any forward-looking statements, including projections, guidance on future revenues, earnings and estimates, are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause iSentia’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Any forward-looking statements, opinions and estimates in this presentation are

based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. For example, the factors that are likely to affect the results of iSentia include, but are not limited to, general economic conditions in Australia and Asia, exchange rates, competition in the markets in which iSentia will operate and the inherent regulatory risks in the business of iSentia. Neither iSentia, nor any other person, gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this presentation will actually occur. In addition, please note that past performance is no guarantee or indication of future performance.

This presentation does not constitute an offer to issue or sell, or solicitation of an offer to buy, any securities or other financial products in any jurisdiction. The distribution of this presentation outside Australia may be restricted by law. Any recipient of this presentation outside Australia must seek advice on and observe any such restrictions. This presentation may not be reproduced or published, in whole or in part, for any purpose without the prior written permission of iSentia.

All amounts are in Australian dollars

All references starting with 1H refer to the financial period ended 31 December. For example, FY 15 H1 refers to the period ended 31 December 2014.

DISCLAIMER


FY15 H1 RESULTS - Isentia · FY15 H1 PERFORMANCE REVENUE PERFORMANCE ° 18% YoY growth to $62.2m °...

Documents

Transcript of FY15 H1 RESULTS - Isentia · FY15 H1 PERFORMANCE REVENUE PERFORMANCE ° 18% YoY growth to $62.2m °...