EY TMT CFO Forum. 14 March 2018 EY Momentum, London

Transcription

1 EY TMT CFO Forum 14 March 2018 EY Momentum, London

2 Immersion As attendees arrived, they were given the opportunity to explore material relating to the session and answer the question: What are your top strategic priorities at the moment?

3 Introduction and keynote address Rahul Gautam, EY, welcomed participants and presented the morning s agenda. Coram Williams, Chief Financial Officer at Pearson, delivered the keynote address on Pearson s finance function transformation and the part EY has played in making it happen. Rahul Gautam EY UK TMT Market Segment Leader and TMT Advisory Lead Coram Williams Chief Financial Officer, Pearson

4 Panel Accelerating growth through acquisitions EY s Will Fisher facilitated a panel discussion exploring the following themes: Facilitator Assessing and responding to the competition for acquisitions and the continued return/rise of PEs Closing the deal: strong deal narratives and advanced integration analysis Will Fisher EY Global Media & Entertainment Transaction Advisory Services Leader Christian Jennings Group Finance Director, ZPG Kate Lyndon Financial Controller, Broadcast and Online, ITV plc Jamie O Sullivan Chief Operating and Chief Financial Officer, Reed Business Information Guillaume de Pommereau Chief Financial Officer, Hitachi Europe Ltd. Active portfolio management

5 Panel Accelerating growth through acquisitions TMT is a hot sector and M&A is on the up This has increased valuations Deal discipline is needed to control what you pay and make sure you get the value after the deal With creative companies, talent lock-in is key With so many potential targets/technologies it is vital to have a clear acquisition strategy keep to it and communicate it Integration of the acquisition don t just go for the quick win, look at how integration can give you more But be careful on incentives if these pay out on the ongoing performance of the acquired company, this may create resistance to integration

6 Hot topics Participants were given the opportunity to visit two hot topic presentations of their choice. Digitally integrated customer experience Martyn Whistler & Philip Goad, EY Improving customer experience is the number one strategic priority for TMT leaders, but rising expectations, rapidly changing technologies and market disruption make it difficult to achieve. Our approach enables TMT companies to meet this challenge head on by rethinking, redesigning and then delivering new levels of customer experience. We call it a digitally integrated customer experience (DICE). DICE takes TMT companies from doing digital to being digital, enabling you to deliver continuous, compelling experiences for customers. Decoding the digital home How can you adapt to your customers changing digital needs? Adrian Baschnonga, EY The EY UK&I TMT sector team recently commissioned a research piece of 2,500 UK households into their purchase habits, perceptions and attitudes towards tech, media and telecoms products and services within the home. Building upon our Bundle Jungle research studies from previous years, this has enabled a year-on-year comparison of the changing state of the digital home. During this session, Adrian Baschnonga, Lead Analyst, Global Telecommunications at EY, provided a deep-dive into some of the most significant findings and the implications for TMT companies. Blockchain Advanced Tech Group (ATG) Stuart Barrass, EY EY Advanced Technology Group works with clients to help solve their biggest problems by utilizing the latest emerging technologies including blockchain, AR, AI and the cloud. At the TMT CFO Forum, the ATG covered blockchain and how it relates to the finance function with a look at payments and information across the supply chain.

7 US tax reform The session, presented by EY s Ian Beer, Craig Hillier and Marc Middleton, explored the broader consequences and implications of US tax reform in the sector, focusing on the impact on business trends, markets and competitors.

8 Panel Accelerating growth through digital platforms EY s Michael Von der Geest facilitated a panel discussion exploring the following themes: Facilitator How you decide when and how to deploy capital into digital platforms How CFO s support the creation of digital ecosystems of suppliers How do you change governance and accountability frameworks to suit the world of digital and agile? Michael Von der Geest Partner, EY UK&I Technology, Media & Entertainment and Telecommunications, Ernst & Young LLP Carl Barnes Chief Financial Officer, Knowledge & Networking Division, Informa Stephanie Mills Group Financial Controller, Channel 4 Chris Lowe Founder of NOTWICS, Boxarr

9 Panel Accelerating growth through digital platforms The trend is moving away from the monolithic providers, toward a model where services are provided through modular digital platforms More flexible, easier to get to market Better customer experience No built-in obsolescence; easier to review and change Supports PaaS-type delivery model, constant revenue stream, constant improvement Started as B2C, but now very much B2B Requires/benefits from latest tech and this means looking beyond in-house solutions whether acquiring widgets by M&A or building an ecosystem of suppliers Businesses are often biased toward spending money on content/product development not platforms that needs to change Keep talking throughout the development phase to reinforce what you are trying to do, make sure your KPI outcomes are being met and don t let the process overtake the outcome

10 Panel Accelerating growth through new channels and partners EY s Pippa Dussuyer facilitated a panel discussion exploring the following themes: Facilitator The importance of partnerships in driving growth The evolving role of partners (content, resellers, alliances) in platform business models The convergence of customer, partner and competitor relationships The role of finance in establishing winning commercial arrangements with partners Pippa Dussuyer Director, EY UK&I Technology, Media & Entertainment and Telecommunications, Ernst & Young LLP Clare Barclay Chief Operating Officer, Microsoft UK Andrew Hodgson Regional Head of Finance Northern Europe, Uber Noel Hurley Vice President of Strategy for the IP Products Group, Arm Holdings

11 Panel Accelerating growth through new channels and partners A great example is Uber, which already has a very high level of penetration in London, and is looking at offering access to third-party partners via their platform (e.g., public transport) as a more viable route to growth Partners can also be customers, especially B2B2C; this has always been a part of selling working with your customers to produce something that is attractive to their customers An example is Arm making chips for mobile phone makers, either to their specification or giving them the license to design their own A partnership, in terms of creating an ecosystem, is a good way to respond to disruption, finding new ways to do things Partnerships can be good for company culture Challenges include: governance, conflicts of interest and ensuring partnerships are tied to strategic goals

12 Closing speaker EY s Rahul Gautam and Jacqueline de Rojas, President, techuk, closed the event with a fireside chat. Topics of conversation included automation, data, AI, pace and speed, and integration of technology and skills.

13 Closing speaker The best CFOs hire with the future in mind. Hire future talent, and focus on freak time data and leading indicators versus trailing indicators. We are simply creating more jobs than we can fill and the competition for talent is fierce. Employers will have to do more to boost their internal pipeline of talent and retention strategies are critical for competitive advantage. Data is the new currency. Importantly data privacy is both a company issue and also our personal responsibility. We must be more aware of the balance between tailored customer experience and how much personal data we choose to share. AI and machine robotics are here. By 2020 Gartner predicts that more than 80% of consumer interactions will be with a machine. Of course we want AI to do the heavy-lifting but we must program it ethically to reflect the society it serves. The cavalry is not coming and the government will not solve all problems around education, inequality and gender. So ask yourself what you can personally do to make a difference? Jacqueline is working to inspire 400,000 young girls to be interested in science, technology, engineering and mathematics (STEM). Diversity is key. The future of hiring tech must embrace inclusion and diversity in all its forms. The role of the CFO? A good CFO can connect with their customers through great storytelling. A spreadsheet is a lazy way to transmit a story. #StorytellingMatters.

14 For further discussion on the content of the forum, please contact the TMT team: ey.com/uk/tmt Rahul Gautam EY UK TMT Market Segment Leader and TMT Advisory Lead EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com EYGM Limited. All Rights Reserved. EYG no GBL ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com/uk