82
1 Year Ended 3 October 2010 25 November 2010 DRAFT SLIDES : PLEASE NOTE THAT THE SLIDES ARE STILL TO BE DESIGNED
1
Year Ended 3 October 2010
25 November 2010
DRAFT SLIDES : PLEASE NOTE THAT THE SLIDES ARE STILL TO BE DESIGNED
Important notice
• 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.
2
Agenda
• Introduction
Martin Morgan, Chief Executive
• Financial Performance and Outlook
Peter Williams, Finance Director
• Business Developments
Martin Morgan, Chief Executive
• Questions
3
2010 – Summary
• Organic growth and focus on execution
• B2B – pleasing profit growth
• Consumer – sharp rebound in profitability
• Continued investment across the Group
• Further portfolio refinement
• Operating margin improvement from 13% to 16%
• Net debt:EBITDA 2.3x, better than target
• EPS up 34% to 50.0p
• Dividend increased by 9%44
Adjusted Profit before Tax
100
130
160
190
220
250
280
310
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
£m
55
6
Financial Performance and Outlook
Peter Williams
Finance Director
2010 – Financial Summary £ million 2010 2009 Change
restated+
Revenue 1,984 2,118 -6%
Operating Profit* 320 273 17%
Operating Margin* 16% 13%
Pre-tax profit* 247 201 23%
Earnings per share* 50.0p 37.2p 34%
Dividend per share 16.00p 14.70p 9%
7
*Adjusted results are stated before amortisation and impairment of intangible assets and exceptional items
+ restated for the change of presentation of the IAS 19 financIng item from operating profit to net finance costs
• Revenues – rebound in organic growth; underlying revenues up 2%
• Strong margin performance, particularly in Consumer
8
• Revenues increased by 12%, new sales balanced across business units
• Record operating profit* up 12% with consistent margins
• Investment programme maintained to generate future growth
Outlook
• Good start to the year: number of contracts booked with solid sales pipeline
• Low double digit growth expected this year
£ million 2010 2009 Change
Revenue 153 137 12%
Operating Profit* 47 42 12%
Operating Margin* 31% 31%
9
• Underlying revenues +4% - property, financial, energy & education +8%• Record operating profit, underlying +16%
Property: revenues +10%>, operating profit +28%> - strong product performance• Financial: Trepp & Lewtan strong growth, successful CMBS & ABS product launches • Education: Hobsons revenues +7%> – market share gains• Energy: Genscape revenues +8% – product expansion• Geospatial: Sanborn revenues -23% minimal profit impact
Outlook• Continued investment in core growth initiatives• Modest acceleration of revenue growth expected
£ million 2010 2009 Change
Revenue 231 230 -
Operating Profit* 53 46 14%
Operating Margin* 23% 20%
> underlying performance
10
• Restructured division - now focused on B2B • Improving performance of reshaped group:
- Revenues : underlying# -9%, with improving trend - Margins improved by 6% to 27%
• NYGF, Big 5 & GPS – good performance
Outlook• Recent attendance and booking trends encouraging and expected to improve• Biennial events: Adipec (November) and Gastech (March) benefit 2010/11
dmg :: events
£ million 2010 2009 Change
Revenue 110 175 -37%
Operating Profit* 30 37 -19%
Operating Margin* 27% 21%
# Adjusted for non-annual events and for disposals made in the current and prior year and at constant exchange rates.
• Record results driven by faster than expected revenue recovery
• Operating margin up 5% to 29%
• Further investment in new products and online migration
Outlook
• Positive trading outlook for a strong Q1
• Limited visibility for Q2 onwards and tougher comparatives
• FY11 further increase in investment – impact on margins 1-2%
£ million 2010 2009 Change
Revenue 330 318 4%
Operating profit* 96 77 25%
Operating margin* 29% 24% -
11
£ million 2010 2009 Change
Revenue 850 876 -3%
Newspaper Operations 124 97 28%
Digital only businesses 6 1 500%
Discontinued business and other costs (35) (36) 3%
Operating Profit* 95 62 54%
Operating margin* 11% 7%
12
• Daily Mail and Metro record highest ever operating profit*
• Strong growth in digital audiences, revenues and profits across digital businesses
• Continued cost control and increased operating efficiency – much improved operating margin
• Active portfolio management continues - acquisition of Globrix, disposal of DMR, Allegran and Loot and closure of London Lite and Teletext Information Services.
-
Revenue
13
£ million 2010 2009 Change
Circulation 351 357 -2%
Advertising - display 283 264 7%
Advertising - classified 52 52 -1%
Advertising - digital 12 8 54%
Other revenues 23 9 174%
Discontinued 12 64 -82%
Week 53 - 13 -
Newspaper operations 733 767 -4%
Digital only businesses 95 94 1%
3rd party contract printing 22 16 40%
Total Revenue 850 876 -3%
-
• Circulation – increased market share to new highs at Daily Mail and Mail on Sunday• Advertising – underlying growth +6% - strong growth from Metro (+20%) and Retail (+14%)
Total Newspaper Display Advertising Revenue Quarterly y-o-y %
-
14
-15%
-10%
-5%
0%
5%
10%
15%
20%
SEPT DEC MAR JUN SEP
15
-
Outlook
15
• Circulation – encouraging trends, benefit from cost effective promotional strategy
• Advertising – Oct/Nov +9%, no visibility beyond Christmas
• Continued investment to leverage Mail brand across print and digital formats
• Profit growth from digital only businesses
• Significant cost savings sustainable
• Pressure on newsprint prices
16
• Underlying decline in revenues of 6%
- Property revenues +5%, Recruitment -19%, Motors -3%, Retail -4%, Other -8%
- Digital revenues +13%
- Circulation -6%: limited cover price increases
• Restructuring activities delivered underlying y-o-y cost savings of £26 million
Outlook
• Another tough year expected, Oct/Nov advertising -7%
• Cost management focus alongside building digital strengths and sales
-
16
£ million 2010 2009 Change
Revenue 294 328 -10%
Costs 264 304 13%
Operating Profit* 30 24 24%
Operating margin* 10% 7%
Total Advertising Revenue Quarterly y-o-y
(total advertising revenue excluding week 53 in September 2009)
-
17
-40
-36
-32
-28
-24
-20
-16
-12
-8
-4
0Q
1-0
9
Q2
--0
9
Q3
-09
Q4
-09
Q1
-10
Q2
-10
Q3
-10
Q4
-10
%
- UK
Adjusted Operating Profit by Division£ million 2010 2009 Change
restated+
B2B
Risk Management Solutions 47 42 12%
dmg information 53 46 14%
dmg events 30 37 -19%
Euromoney 96 77 25%
226 202 11%
Consumer
Associated Newspapers 95 62 54%
Northcliffe Media 30 24 24%
DMG Radio^ 3 4 -29%
128 90 42%
Unallocated central costs (34) (19)
Operating profit* 320 273 17%
18
• Strong rebound in profitability
• Investment levels maintained
• Margin improvements from all divisions
18^ Operating profit until December 2009 after which DMG Radio accounted for as a Joint Venture+ restated for the change of presentation of the IAS 19 financIng item from operating profit to net finance costs
Net Finance Costs£ million 2010 2009 Change
restated+
Net interest payable (73) (76) -4%
Pensions financing item (2) 5
Total (75) (71) 5%
1919
• Net interest payable £3m lower due to lower average debt level
• IAS Pension net financing charge - increased due to movement in pension fund deficit and discount rate used
+ restated for the change of presentation of the IAS 19 financIng item from operating profit to net finance costs
Adjusted Profit
£ million 2010 2009 Change
Adjusted operating profit 320 273 17%
Joint ventures & associates 2 (1)
Net finance costs (75) (71) 5%
Adjusted profit before tax 247 201 23%
Taxation (34) (44) 23%
Minorities (22) (16) 35%
Group Profit 191 141 36%
Adjusted EPS 50.0p 37.2p 34%
Adjusted tax rate 13.7% 22.1%
2020
Exceptional Items and Write Offs
£ million 2010 2009
Reorganisation and redundancy (39) (99)Profits / (Loss) on disposal of businesses, properties etc. 33 (15)Foreign exchange losses on tax hedging - (28)Write down of investments - (11)Amortisation and impairment (57) (443)Other (2) (6)Pre-tax exceptionals (65) (602)
Tax exceptional credit 72 138
2121
Cashflow and Movement in Net Debt
£ million 2010 2009
Trading Cashflow 365 350
Reorganisation Costs (26) (50)
Capital Expenditure (52) (57)
Debt servicing (68) (67)
Taxation (9) (14)
FX Settlements - (50)
Free Cashflow 210 112
Dividends (64) (65)
Disposals 81 28
Acquisitions (40) (53)
Net cashflow 187 22
Debt revaluation - (50)
Movement in Net Debt 187 (28)
2222
Software amortisationRestatement of Adjusted Profits in 2011
£ million 2010 2009
Adjusted profit 247 201
Less : software amortisation costs (17) (12)
Revised Adjusted profit before tax 230 189
Pence
Adjusted EPS 50.0 37.2
Change (3.7) (2.8)
Revised adjusted EPS 46.3 34.4
2323
• 2010 Split between divisions of £17m: RMS £2m, dmgi £6m, A&N £9m
24
• Year end net debt: £862m• Net debt:EBITDA: 2.3x, within targeted levels • £853m bonds – no financial covenants
– Partly swapped into US$– First maturity 2013 (£157m)
• £420m bank facilities– £3m loans outstanding at year end– £62m letters of credit mainly to Pension Fund– £180m to Sept 2011 – don’t expect to have to renew– £240m to Sept 2013
• Dollar denominated debt : c. US$740m
24
Funding
25
Pensions
• IAS19 deficit at 3 October 2010 = £271m
- Increase in asset market value coupled with decrease in liabilities
• Actuarial triennial valuation as at 31 March 2010
– New funding agreement to be in place by 30 June 2011
– Deficit contributions 2010/11 c £15m
25
26
Summary
• Strong financial performance
• Investment levels maintained
• Margin growth throughout Group
• Good cashflow and debt reduction
• Dividend growth resumed
26
27
Business Developments
Martin Morgan
Chief Executive
27
DMGT: 2010/11
• Strong momentum– Focus and execution
– Best in class businesses and people
– Cash generative
• Caution about volatile external factors
• But with improved financial flexibility
2828
Investment criteria
• Operate in growth markets• Highly valued innovative products• Market leaders• Entrepreneurial management• Benefit from DMGT’s long-term perspective• Financial criteria
– Cash generative– High margin– High return on capital
2929
INSERT £ VALUE OF ACQUISITIONS AND DISPOSALS
ADD DISPOSAL LOGOS DURING THE YEAR
ADD ARGYLL LOGO, DMG RADIO, ARETE
CHECK THAT THEY WERE ALL DURING THIS FINANCIAL YEAR
REMOVE BROADBEAN AND LOCAL PEOPLE
TITLE : ACQUISITIONS AND DISPOSALS
TO BE DESIGNED TO MATCH OTHER SLIDES
30
FY 2010 FIGURE 31%
FILL SLIDE WIT DIGITAL IMAGERY BEHIND STATISTIC
31
Daily Mail market share and circulation
3232
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
15.0%
16.0%
17.0%
18.0%
19.0%
20.0%
21.0%
22.0%
Circu
lation
Mar
ket
shar
e
Daily Mail Market Share Daily Mail circulation
DAILY MAIL LOGO
ABC audited figures
JUST MAILONLINE SCREENSHOT THAT FILLS THE SCREEN HERE
33
3434
0
0.2
0.4
0.6
0.8
1
1.2
1.4
0
2
4
6
8
10
12
14
16
18
20Ja
n-0
6
Ap
r-0
6
Jul-
06
Oct
-06
Jan
-07
Ap
r-0
7
Jul-
07
Oct
-07
Jan
-08
Ap
r-0
8
Jul-
08
Oct
-08
Jan
-09
Ap
r-0
9
Jul-
09
Oct
-09
Jan
-10
Ap
r-1
0
Jul-
10
Oct
-10
Avg
Dai
ly U
Vs
Mill
ion
s
Mo
nth
ly U
Vs
Mill
ion
s
Mail Online Growth in UK Audiences
Monthly UVs - UK Average Daily UVs - UK
Source : ABCe
3535
36
3737
RECENT METRO FRONT COVER TO BE SHOWN HERE
38
39
UPDATE FOR FY 2010 AS FOLLOWS :
EDITORIAL PRODUCTION HUBS (NOW 6)CIRCULATION HOME DELIVERY HUBS (NOW 2)CIRCULATION RETAIL CALL CENTRES (NOW 1)
TO BE DESIGNED TO MATCH OTHER SLIDES
40
UPDATE SCREEN SHOTS
REMOVE TITLE
FILL SLIDE WITH IMAGES
TO BE DESIGNED TO MATCH OTHER SLIDES
41
UPDATE SCREEN SHOTS
REMOVE TITLE
FILL SLIDE WITH IMAGES
TO BE DESIGNED TO MATCH OTHER SLIDES
42
TO BE DESIGNED TO MATCH OTHER SLIDES
UPDATE SCREEN SHOTS
43
44
1
46
46
46
47
GLM Energy Middle East Leadership
Conferences
Digital
Marketing
CFO Events
HR Events
dmg :: events
47
O/S LOGOS FROM SARAH
OutlookDMGT Summary
4848
• B2B – good momentum for continued growth• Consumer – national advertising growth continues but visibility limited• Continued focus on operational efficiency• Investment to drive organic growth and innovation• Cash generation and debt reduction to continue• Well positioned for 2011 and beyond
49
Dividend History
02468
10121416
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Pe
nce
49
50
Questions
50
51
Appendices
51
Notes
*Adjusted results are stated before amortisation and impairment of intangible assets and exceptional items. For a reconciliation of Group profit to adjusted Group profit. These adjusted results are for total operations, including those treated as discontinued.
#Underlying revenue or profit* is revenue or profit* on a like for like basis, adjusted for acquisitions and disposals made in the current and prior year and at constant exchange rates. For A& N Media, the underlying percentage movements compare 52 weeks with 52 weeks and exclude the Evening Standard, London Lite, the discontinued television activities of Teletext, the digital dating and data businesses and the Slovakian print publishing companies.
Operating profit* and net finance costs for the prior period have been restated for the transfer of an IAS 19 pension financing credit of £5 million from corporate costs into net finance costs.
Percentages are calculated on actual numbers to one decimal place.
52
Group Revenue
0
500
1,000
1,500
2,000
2,500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
£m
5353
% Operating Profits* From B2B Businesses
0
10
20
30
40
50
60
70
80
2002 2003 2004 2005 2006 2007 2008 2009 2010
%
5454
Revenue by Division
£ million 2010 2009 Change
B2B
Risk Management Solutions 153 137 12%
dmg information 231 230 0%
dmg events 110 175 -37%
Euromoney 330 318 4%
824 860 -4%
Consumer
Associated Newspapers 850 876 -3%
Northcliffe Media 294 328 -10%
DMG Radio 16 55 -
1,160 1,259 -8%
Total Revenue 1,984 2,118 -6%
5555
P&L2010 2009 Change
£ million
Revenue
As reported 153 137 12%
Foreign Exchange - - -
Underlying 153 137 12%
Operating Profit*
As reported 47 42 12%
Foreign Exchange - - -
Underlying 47 42 12%
Operating profit margin* 31% 31%
5656At constant 2010 exchange rates
P&L 2010 Underlying
£ million Growth
Revenue
Property 83 10%
Non property 148 1%
Continuing businesses 231 4%
Operating Profit*
Property 20 28%
Non property 36 9%
Central costs (3) -3%Continuing businesses 53 16%
Profit Margin* 23%
5757
£ million Revenue Profit* Margin* Revenue Profit* Margin*
Property 83 20 24% 75 16 21%
Non-property 148 36 24% 147 33 23%
Central Costs - (3) - (4) -
Discontinued - - - 9 1 13%
Foreign Exchange (1) - -
231 53 23% 230 46 20%
Growth 0% 14%
Underlying growth 4% 16%
2010 2009
58
P&L
58At constant 2010 exchange rates
0.0M
0.2M
0.4M
0.6M
0.8M
1.0M
1.2M
1.4M
1.6M
1.8M
2.0M
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Long Term Average
Forecast 2010*
UK Housing Transactions Volumes
59
Trend of UK Housing transactions for England and Wales 1980-2010
59* Internal estimate
P&L
60At constant 2010 exchange rates 60
£ million 2010 2009 Change
Revenue
Existing 108 126 -14%
Disposals 2 50
Foreign Exchange (1)
110 175 -37%
Operating profit*
Existing 30 35 -16%
Disposals 0 2
Foreign Exchange (1)
30 37 -19%
Margin* 27% 21%
Underlying revenue growth -9%
Underlying profit growth -7%
dmg :: events
FY 2010 REVENUE MIX
61
Publishing40%
Events33%
Data27%
2010
Publishing43%
Events48%
Data9%
2005
FY 2010 PROFIT MIX
Before corporate costs62
Publishing43%
Events26%
Data31%
2010
Publishing36%
Events56%
Data8%
2005
60
70
80
90
100
110
120
130
140
63Source: ABC October-September
Circulation Performance v Market Trend 1994/95 – 2009/10
Daily Mail+18.4%
The Mail on Sunday+1.9%
Other Daily Nationals-34.7%
Other Sunday Nationals-38.3%
Index (1994/5 =100)
-
63
0.5
1.0
1.5
2.0
2.5
mill
ion
Daily Mail Daily Express Daily Telegraph
Daily Mail Circulation Comparison
64ABC audited figures
Cover price rise to 50pSaturday cover price rise to 80p
-
64
The Mail On Sunday Circulation Comparison
65
0.5
1.0
1.5
2.0
2.5
mil
lio
n
The Mail on Sunday Sunday Express The Sunday Times
ABC audited figures
Cover price rise to £1.50
-
65
66
Daily Mail Display by Category y-on-y change
-
66
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Retail Finance Motors Travel IT Other Total
Classified Advertising Revenue Quarterly y-o-y Total %
67Daily Mail, The Mail on Sunday and Metro only
-
67
-15%
-10%
-5%
0%
5%
10%
15%
SEPT DEC MAR JUN SEP
- Digital Only Businesses
Revenue analysis Y-on-Y quarterly change
-30%
-20%
-10%
0%
10%
20%
30%
Q1 Q2 Q3 Q4
Jobs Property (exc Globrix)
68
P&L
£ million 2010 2009 Change
Revenue
UK 262 285 -8%
International 33 43 -24%
294 328 -10%
Operating Profit*
UK 27 20 34%
International 3 4 -48%
30 24 24%
Profit Margin* 10% 7%
6969
A&N International Media
Revenue analysis
£million% of total
revenue 2010 2009
%
variance
UK
Advertising - in print 64% 169 184 -9%
Circulation 25% 65 69 -6%
Digital 7% 19 17 11%
Others 3% 9 7 38%
Disposals 2
Week 53 (2009) 5 -
100% 262 285 -8%
International
Advertising - in print 21% 7 10 -30%
Circulation 30% 10 10 1%
Digital 18% 6 7 -12%
Others 20% 7 5 30%
Disposals 12% 4 12 -67%
100% 33 43 -24%
Total 294 328 -10%
290 308 -6%Exc 53rd week, disposals
-
70
A&N International Media
4,259
4,173
4,107 4,043 3,989
3,863
3,708
3,582
3,487 3,454 3,422
3,343
3,326 3,337 3,301
3,274 3,241 3,200 3,167
3,147 3,139 3,117 3,110 3,101
2,800
3,000
3,200
3,400
3,600
3,800
4,000
4,200
4,400
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
(reduction of 242 or 7% this financial year: reduction of 1,242 or 29% in past two years)
2009 actual 2010 actual
Northcliffe UK Headcount Reductions
7171
Comparison of Annualised Recruitment Revenue Growth to inverted Employment Claimant Change
-
72
Monthly Property Revenues vs Annualised Mortgage Advances
(y-o-y movement)
73
-
73
DMGT Share Price and FTSE Movements Relative 1988 Base
8282
0
5
10
15
20 DMGT A
FT All-Share Index
