2016 Annual General Meeting Chairman and CEO Addresses and Trading Update

Transcription

1 FOR IMMEDIATE RELEASE 17 November Annual General Meeting Chairman and CEO Addresses and Trading Update In accordance with ASX Listing Rule 3.13 attached are the Chairman s and CEO s addresses together with presentation slides (including a trading update) which will be delivered at the Annual General Meeting commencing at 11.00am today. Jacquie Shanahan Company Secretary For more information contact: Investors Media Jolanta Masojada Patrick Baume Investor Relations Consultant Group Communications Manager investorrelations@isentia.com patrick.baume@isentia.com About Isentia Isentia is Asia-Pacific s leading media intelligence company, providing over 5,000 clients with information, analysis, content and advice 24/7/365. Isentia has over 1,300 employees across 14 countries filtering information from over 250 million online conversations, 5,500 print, radio and television media outlets per month, along with creative content makers providing best practice digital marketing solutions. Our talented people, innovative search technology, comprehensive coverage, expert research and creative content provides the tools and insight to allow our clients to manage media relationships effectively, track and analyse issues of interest across all media, discover and share valuable insights that drive smarter decisions and build content and social strategies that add real brand value. Isentia Group Limited ACN Level 3, Cleveland, Strawberry Hills NSW 2012, Australia T , isentia.com

2 Isentia Group Limited Annual General Meeting 17 November 2016 Chairman s Address Slide 2 Before moving to the formal part of the meeting and the business update from your CEO and Managing Director, John Croll, I would like to warmly welcome you to this, the third AGM of Isentia since listing on the ASX. Slide 3 In FY16 Isentia continued its outstanding financial performance since listing on the ASX in 2014, with a 23% year on year revenue increase to $156m and growth in underlying NPATA of 16% to $33m. This result was built on growth across all regions and sectors, with our newer geographical markets and the content marketing business and contributing a 51% increase in revenue to $37m outside Australia and New Zealand. Our Asia and Rest of World markets (US and UK) now account for more than 24% of group revenue, well on the way to our 2020 target of 40%. The diversification of our services have also contributed strongly to our impressive profit compound annual growth rate of 37% since FY2013. Our diversified portfolio continues to deliver particularly strong growth in value-added services with organic growth of 19% led by our Insights services, with good contribution from social media and database products. This continuing increase in profit has been maintained through a period of technology investment and acquisition in both content marketing and Asia. Isentia expanded into the key North Asian market of South Korea in FY16, along with bolt-on acquisitions in three other Asian markets, which combined are expected to contribute an increase to Isentia s FY2017 Asian revenue. In Australia and New Zealand, 78% of Software as a Service revenue was fixed fee as at 30 June 2016, well ahead of our timetable, and we expect our technology investments in FY2016 to consolidate our already impressive churn rate in Australia and New Zealand of less than 5% of client numbers and less than 1% of client revenue. FY2016 has also been an important year of systems innovation and product development for Isentia, which is driving proprietary systems that continue to be world s best practice, while maintaining solid cost control and continuing strong revenue growth. The technology and product advances made in FY2016 and excellent growth in new revenue streams have placed Isentia in a very strong position to take full advantage of growth Isentia Group Limited ACN Level 3, Cleveland, Strawberry Hills NSW 2012, Australia T , isentia.com

3 opportunities across our core region of Asia-Pacific and through our value added services across the world. On behalf of the Board I would like to congratulate the Isentia executive team and all of our 1,300 team members across 14 countries for their continued dedication, expertise and client focus, which has been displayed through numerous industry awards as well as these strong results. We are all looking forward to an exciting Financial Year 2017, as we work towards our 2020 Vision, which will be further outlined by CEO John Croll. Your directors continue to be excited to work with company as it embarks on this next phase of growth and expansion. Thank you for taking the time to attend this meeting and I look forward to your continued support. CEO Address Slide 4 Good morning ladies and gentlemen. I would like to add my welcome, to that of the Chairman s, to all shareholders and employees at Isentia s third Annual General Meeting. The 2016 financial year was another landmark year of growth and diversification for Isentia, with exciting developments across the Asian, Australian and New Zealand markets. Today, I would like to take you through the progress we have made in the past year, and the 2020 Strategy we have developed to underpin the longer term growth of the Company. Slide 5 The Chairman has already taken you through the strong growth we achieved in revenue, EBITDA and NPATA in FY16. This is a trend that Isentia has achieved over the past four years. The Compound Annual Growth Rate, or CAGR, in revenue of 15% reflects; the strong annuity revenue achieved through the Software-as-a-Service business, with 73% of revenue from recurring sources in FY16; the continued increase in Average Revenue Per Client through product innovation and cross selling; and the large addressable markets available to Isentia in SaaS, value added services and content marketing. The CAGR growth in EBITDA of 31% reflects Isentia s scalable business model with margin expansion achieved across all of our markets. Our continued investment in research and development delivers operational efficiencies, and the development of our SaaS platforms delivers higher average revenue per client which supports the margin expansion. This strong EBITDA performance has underpinned Isentia s CAGR NPATA growth of 37%

4 Slide 6 Isentia s 2020 strategy provides a clear roadmap for our company s development beyond FY17. At the core of this strategy is our goal to deliver our clients a fully integrated service across our three business units of Media Intelligence, Insights and Content Marketing. Isentia s 2020 strategy has at its core three focus areas: Optimise our data platforms for growth Enhance and integrate the product offering Invest in high growth markets I will now provide more detail on a few of the current initiatives. Slide 7 Our data intelligence platform project is a cloud based, single data warehouse that merges all existing databases and API connections from 3rd party data. The platform increases the speed, scalability and content sources for Isentia clients, and is expected to deliver revenue growth and margin improvement. The technology for Phase 1 has already been delivered with improvements to the multilingual web crawler technology, the speed to capture new content sources, and improvements to the search technology and relevance matching used across the business. Slide 8 More than 40,000 users login to Mediaportal on average 3 times per work day, making it the most widely used media intelligence platform across Asia Pacific. We have been completely redesigning the platform to leverage new technologies hosted in the cloud. The new platform is faster, scalable and has a number of new features that will provide a superior experience for our clients. The new platform will be released in Q3 FY16. Slide 9 Isentia s media intelligence app for android and IOS devices will be released on Monday. The app has been designed for our clients to receive notifications and access relevant and influential news. The tools and functionality are designed for sharing and reporting to senior executives. The media intelligence app is available for all Mediaportal clients and is included in their Isentia service. Slide 10 The growth in social platforms and content is a key driver for the media intelligence industry globally. We are developing a unique and integrated all media product on Mediaportal, to create a consolidated story view across mainstream and social media. Storyview, V.1, will be released in Q4 FY17. Slide 11 I would now like to provide some highlights of the FY16 year and an FY17 update

5 ANZ delivered very pleasing growth in VAS revenues of 20%, underpinned by the strong performance of Insights revenue which benefited from continued cross selling and product enhancements, such as Facebook Topic data. During the year we transitioned clients to fixed price contracts. Fixed price comprised 78% of ANZ SaaS revenue by year end, well ahead of expectations, and in FY17 this has now reached 83% of ANZ SaaS revenue. Client churn was maintained at less than 5% of client numbers which equates to less than 1% of client revenue. In FY17, the ANZ SaaS and VAS businesses are performing in line with expected full year growth rates. Slide 12 In Asia total SaaS and VAS revenue increased 17% supported by a 6% increase in new client numbers. The rollout of Mediaportal saw a significant reduction in client churn from a historic 10% to 6%. Average revenue per client of $15,700 was underpinned by the increase in VAS average revenue per client to almost $35,000. Acquisitions completed late in FY16 expand the footprint and capabilities of the Asia business. We acquired a partner to expand our geographic footprint into the South Korean market with an experienced local management team. Bolt-on acquisitions in Hong Kong, Vietnam and Thailand deliver in-market social media and media database capability, and increase the barriers to entry in those markets. We continue to identify promising acquisition targets in Asia that will further increase our market leadership and deliver improved margins once integrated into the Isentia business. In FY17 the Asia SaaS and VAS businesses are performing in line with expected full year growth rates. Slide 13 During the FY16 year, we acquired King Content, extending Isentia s services into communications strategy and content marketing. The business delivered a strong performance in FY16, benefiting from strong market growth, client wins and increased Average Revenue per Client. We remain very confident in the strategic rationale that underpinned the acquisition and the value it can deliver to Isentia s existing client base. Slide 14 The global recognition we received in FY16 across our Insights and Content marketing businesses shows our industry leadership position and the unrivalled expertise we bring to our clients

6 Isentia was awarded the global AMEC award for Communications Research and Measurement Company of the year in both 2015 and 2016, with an additional 8 awards for our Insights team. King Content was awarded by the Content Marketing Institute for its excellence in strategy and execution. And just two weeks ago King Content was recognised with the inaugural REA Excellence Award for Media Brand Campaign of the Year. These awards are a very pleasing recognition of the talent and dedication of our people. I would like to join the Chairman in thanking the entire Isentia team for their professionalism, and commitment to our business. Slide 15 Turning to our outlook for the FY17 year: Core SaaS and VAS businesses in ANZ and Asia are performing in line with expected growth rates for FY17 full year Content Marketing, (representing approximately 7% of FY16 EBITDA), lost revenue momentum due to decisions made in regards to strategy, new business development and client retention in FY17. o These decisions will see Content Marketing report an EBITDA loss in the range of $2m in FY17 H1 with a positive contribution expected for the full year. o Management initiatives in the content marketing business sees it regaining its revenue pipeline with: the implementation of a new organisational structure the integration of the King Content sales team with Isentia; o A new Chief Executive for King Content will be appointed Isentia expects: o FY17 H1 EBITDA to be below the prior corresponding period, however o FY17 full year revenue and EBITDA growth in the high single digit range For the three years beyond FY17, Isentia s 2020 strategy is expected to deliver strong revenue and earnings per share growth Thank you and I ll now hand back to the Chairman

7 2016 Isentia Annual General Meeting 17 November 2016

8 2016 AGM Chairman s Address Doug Flynn - Chairman 17 November ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER 2016

9 FY16 Financial Highlights Strong growth in revenue and profitability $156M 23% $51M 20% $32.6M 19% Revenue EBITDA NPATA $127.3m $156m $42.5m $51m $27.4m $32.6m FY2015 FY2016 FY2015 FY2016 FY2015 FY ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

10 2016 AGM CEO Address John Croll - Chief Executive Officer & Managing Director 17 November ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER 2016

11 Significant Growth Achieved Since FY13 Revenue $m EBITDA $m NPATA $m % CAGR 31% CAGR % CAGR FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Strong annuity revenue 73% of revenue from recurring sources in FY16 Increasing Average Revenue per Client Large addressable markets for SaaS, VAS and content marketing Scalable business model R&D driving operational efficiencies Margin expansion across all markets NPATA growth driven by organic growth and acquisitions 2016 ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

12 2020 Strategy - A Focus on Strong Growth Optimise platform for growth Enhance product offering Invest in high growth markets Data intelligence platform Cross-selling Operational efficiencies Storyview Social Media Integration Mid-tier offering expand the market Media database with influencers Content Marketing Integrated with Isentia Insights Leverage data and clients Asia market and client growth 2016 ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

13 Optimise Platform For Growth Data Intelligence Platform 135,000 > 220 million 500,000 Increase in online news sources to more than 135,000 from 50,000 available to Isentia s clients Increased content retention with more than 220 million media items stored on AWS Massive expansion in Isentia search technology managing 500,000 Boolean search queries at a rate of 300 documents per second 2016 ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

14 Enhance Product Offering Recent Product Enhancements New Mediaportal interface 2016 ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

15 Enhance Product Offering Recent Product Enhancements Media Intelligence App 2016 ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

16 Storyview - Social Media Integration 2016 ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

17 Australia/New Zealand SaaS/VAS FY16 Highlights Higher penetration in media database and Insights delivered VAS revenue growth of 20% Total SaaS/VAS revenue growth of 4% ANZ fixed fee increased to 78% of total ANZ SaaS revenue, well ahead of schedule 8% increase in ARPC to $33.9K driven by cross-sell of higher margin Insights products Low churn maintained at less than 5% of client numbers and less than 1% of client revenue FY17 Update ANZ fixed fee has increased to 83% of total ANZ SaaS revenue ANZ SaaS/VAS business is performing in line with expected growth rates for the FY17 full year ANZ Annualised Average SaaS/VAS Revenue Per Client ARPC ($) VAS Penetration of ANZ Unique Customers (%) ,231 FY14 H1 27,482 FY14 H2 29,094 FY15 H1 31,395 FY15 H2 32,742 FY16 H1 33,910 12% 3 YEAR CAGR FY16 H % 5.5% 4.2% FY14 H1 Data Base Social Insights 14.4% 7.0% 4.9% FY14 H2 16.7% 10.0% 7.1% FY15 H1 17.3% 13.2% 8.0% FY15 H2 18.2% 13.5% 9.3% FY16 H1 21.0% 13.5% 10.7% FY16 H ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

18 Asia SaaS/VAS FY16 Highlights 17% increase in SaaS/VAS revenue 6% increase in client numbers supported by Mediaportal platform Significant decrease in client churn from 10% to 6% 11% increase in Average Revenue per Client to $15.7K supported by VAS ARPC increase to $34.9K FY17 Update Acquisitions undertaken late in FY16 expand the footprint and capabilities of the business A number of promising acquisition opportunities are being pursued Asia SaaS/VAS business is performing in line with expected growth rates for the FY17 full year Asia Annualised Average SaaS/VAS Revenue Per Client ARPC ($) Asia VAS - Annualised Average Revenue Per Client ARPC ($) , , , ,649 11,553 18% 3 YEAR CAGR , , FY13 FY14 FY15 FY FY14 FY15 FY ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

19 Content Marketing FY16 Highlights Acquisition of King Content in August 2015 Revenue performance underpinned by strong market growth, client wins and increases in ARPC FY17 Update Content Marketing, (representing approximately 7% of FY16 EBITDA), lost revenue momentum due to decisions made in regards to strategy, new business development and client retention in FY17 These decisions will see Content Marketing report an EBITDA loss in the range of $2m in FY17 H1 with a positive contribution expected for the full year Management initiatives in the content marketing business sees it regaining its revenue pipeline with: - the implementation of a new organisational structure - the integration of the King Content sales team with Isentia A new Chief Executive for King Content will be appointed 2016 ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

20 Year in Review - Awards Isentia was recognised by the international Association for Measurement and Evaluation of Communication (AMEC) as the global Communications Research and Measurement Company of the Year for the second year running 8 AMEC awards for our Insights team including three gold medals and a Lifetime Fellowship for CEO John Croll King Content won a Content Marketing Institute Award for Content Marketing ROI/Measurement Programme for 2016 King Content was recognised with the inaugural REA Excellence Award for Media Brand Campaign of the Year 2016 ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

21 FY17 Full Year Outlook Core SaaS and VAS businesses in ANZ and Asia are performing in line with expected growth rates for FY17 full year Content Marketing, (representing approximately 7% of FY16 EBITDA), lost revenue momentum due to decisions made in regards to strategy, new business development and client retention in FY17 - These decisions will see Content Marketing report an EBITDA loss in the range of $2m in FY17 H1 with a positive contribution expected for the full year - Management initiatives in the content marketing business sees it regaining its revenue pipeline with: the implementation of a new organisational structure the integration of the King Content sales team with Isentia - A new Chief Executive for King Content will be appointed Isentia expects: - FY17 H1 EBITDA to be below the prior corresponding period, however - FY17 full year revenue and EBITDA growth in the high single digit range For the three years beyond FY17, Isentia s 2020 strategy is expected to deliver strong revenue and earnings per share growth 2016 ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER

22 DISCLAIMER This presentation contains general information about the activities of Isentia s Holdings Pty Limited (ACN ) (Isentia or Company) which is current as at 17 November 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 Full Year Results for the period to 30 June These are also available at 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 FY refer to the financial period ended 30 June. For example, FY 16 refers to the period ended 30 June ISENTIA ANNUAL GENERAL MEETING - 17 NOVEMBER