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| 8-K - JEFFERIES 2010 PRESENTATION - MEREDITH CORP | form8kjefferies2010.htm |
Jefferies
6th Annual Global
Internet,
Media and Telecom Conference
Media and Telecom Conference
New
York City
May
2010
Stephen
Lacy: Chairman and Chief Executive Officer
Joe
Ceryanec, Chief Financial Officer
2
Safe
Harbor
This
presentation and management’s public commentary contain certain forward-looking
statements
that are subject to risks and uncertainties. These statements are based on management’s current
knowledge and estimates of factors affecting the Company’s operations. Statements in this presentation
that are forward-looking include, but are not limited to, the statements regarding broadcast pacings,
publishing advertising revenues, as well as any guidance related to the Company’s financial
performance.
that are subject to risks and uncertainties. These statements are based on management’s current
knowledge and estimates of factors affecting the Company’s operations. Statements in this presentation
that are forward-looking include, but are not limited to, the statements regarding broadcast pacings,
publishing advertising revenues, as well as any guidance related to the Company’s financial
performance.
Actual
results may differ materially from those currently anticipated. Factors that
could adversely affect
future results include, but are not limited to, downturns in national and/or local economies; a softening of
the domestic advertising market; world, national, or local events that could disrupt broadcast television;
increased consolidation among major advertisers or other events depressing the level of advertising
spending; the unexpected loss or insolvency of one or more major clients; the integration of acquired
businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in
paper, postage, printing, or syndicated programming costs; changes in television network affiliation
agreements; technological developments affecting products or the methods of distribution; changes in
government regulations affecting the Company’s industries; unexpected changes in interest rates; and
the consequences of any acquisitions and/or dispositions. The Company undertakes no obligation to
update any forward-looking statement, whether as a result of new information, future events, or
otherwise.
future results include, but are not limited to, downturns in national and/or local economies; a softening of
the domestic advertising market; world, national, or local events that could disrupt broadcast television;
increased consolidation among major advertisers or other events depressing the level of advertising
spending; the unexpected loss or insolvency of one or more major clients; the integration of acquired
businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in
paper, postage, printing, or syndicated programming costs; changes in television network affiliation
agreements; technological developments affecting products or the methods of distribution; changes in
government regulations affecting the Company’s industries; unexpected changes in interest rates; and
the consequences of any acquisitions and/or dispositions. The Company undertakes no obligation to
update any forward-looking statement, whether as a result of new information, future events, or
otherwise.
3
Broad
Media and Marketing Footprint
National
Media Brands
Media Brands
Meredith
Integrated
Marketing
Integrated
Marketing
Local Media
Brands
Brands
Revenues:
$960
million
Revenues:
$175
million
Revenues:
$275
million
Five
Things to Know About Meredith
1. The largest media
company serving U.S. women
• Reach 75 million
women who make the majority of household
purchasing decisions, regardless of economic climate
purchasing decisions, regardless of economic climate
4
Agenda
5
Her
Family
Her
Home
Her
Self
Delivering The
Largest Adult Female Audience
Largest
Media Company Serving Women
2005
2006
2007
2008
2009
Strengthening Reach
to Young Adults and Families
|
|
2004
|
2009
|
|
Advertising
Market Share
|
10%
|
28%
|
|
Online Unique
Visitors
|
<1M
|
5M
|
6
Largest
Media Company Serving Women
mobile
Five
Things to Know About Meredith
1. The largest media
company serving U.S. women
2. Strong consumer
connection across multiple platforms
• Magazines, Internet,
Television, Retail, Mobile
7
Agenda
8
Growing
Readership
Source:
Fall 1999 & 2009 MRI Reports
*
Traditional Home and Midwest Living
|
|
1999
|
2009
|
|
Better Homes
and Gardens
|
33
|
39
|
|
Family
Circle
|
22
|
20
|
|
Parents
|
12
|
15
|
|
Ladies’ Home
Journal
|
15
|
12
|
|
Fitness
|
6
|
6
|
|
American
Baby
|
5
|
7
|
|
More
|
NA
|
2
|
|
Other*
|
4
|
8
|
|
TOTAL
|
97
|
109
|
+12%
Readership
in Millions
Strong
Consumer Connection
9
Growing
Online Consumer Connection
Source:
Meredith, in millions
20
National Media Group
Average Monthly Unique Visitors
33%
CAGR
12
9
7
2
Strong
Consumer Connection
10
220
260
270
380
400
Strong
Consumer Connection
Increased Hours of
Locally Produced News Programming
Morning
news hours up 40% over 5 years
Adding
4 p.m. news across group
Building 24-hour
multi-platform news culture
11
Growing
Presence in Brand Licensing
– Sales meeting
expectations
– SKUs doubled to
2,000 from prior year
– Introduced line of
paint
– Expanded to
Canada
Garden
Interior
decor
Canada
Strong
Consumer Connection
Paint
12
Meredith’s Approach
to Mobile for Consumers
• Smart device
adoption rate growing
• Early-adopter
advertisers showing interest
Strong
Consumer Connection
Trends
we see:
• Launching mobile
versions of our brands
• Next Issue Media
initiative among publishers
• Pearl initiative
among broadcasters
What
we’re doing:
Mobile
Consumer Demand Growing
|
Unique
Visitors |
Page
Views |
|
40
|
150
|
|
115
|
430
|
|
35
|
115
|
#’s in
thousands
|
Unique
Visitors |
Page
Views |
|
80
|
320
|
|
325
|
1,250
|
|
95
|
415
|
September
2009
March
2010
Strong
Consumer Connection
13
14
• Create best-in-class
consumer mobile experience
• Develop audience
scale for mobile advertisers/marketers
• Leverage platform
for other initiatives (e-commerce, etc.)
Mobilizing Sites for
Large and Enthusiast Brands
Strong
Consumer Connection
15
• Largest magazine
companies
• Creating digital
standards to:
Ensure consistent
consumer experience
Create open
standards for advertising
Develop business
model
Be available across
different device types
Meredith and Next
Issue Media
Strong
Consumer Connection
16
• JV to develop
national mobile service
• 12 leading broadcast
groups
• Uses existing
broadcast spectrum
• Content
includes:
– Live and on-demand
video
– Local and national
news
– Sports and
entertainment
Meredith and Pearl
Mobile DTV Initiative
Strong
Consumer Connection
Five
Things to Know About Meredith
1. The largest media
company serving U.S. women
• Gaining share on
improving advertising revenue performance
17
Agenda
18
Source:
Publishers Information Bureau (April - March issues)
Magazine Advertising
Revenue Performance
Meredith
Outperforming Industry
Trailing
12 Months
Meredith
7%
Time,
Inc.
Martha
Stewart
Readers
Digest
Hachette
Rodale
Hearst
Industry
Conde
Nast
(4)%
(5)%
(6)%
(9)%
(10)%
(11)%
(15)%
(21)%
19
Online:
Meredith
Women’s Network
Women’s Network
Magazines:
Home, Family,
Health & Well-being
Health & Well-being
Consumer
Events
Custom
Marketing
Database
Marketing
Video
Studios
Brand
Licensing
Emphasize
360° Marketing
Approach
Meredith
Outperforming Industry
Mobile
E-Reader
|
Fiscal
|
Meredith
Internal
|
Industry
TvB
|
|
Q409
|
(25)%
|
(25)%
|
|
Q110
|
(13)%
|
(19)%
|
|
Q210
|
5%
|
4%
|
|
Q310
|
17%
|
16%
|
Source:
Meredith and Television Bureau of Advertising
Spot
only revenue
20
Television
Advertising Revenue Performance
Meredith
Outperforming Industry
21
Production
initiatives
-
Multi-media journalists
- 24
hour content creation
Sales
initiatives
-
Local, mobile and online opportunities
- One
Service
Content
initiatives
-
Better, Video on Demand
- Pearl
Mobile DTV
Creating New
Opportunities in Local Media
Meredith
Outperforming Industry
22
Election Year
Outlook Bright
Governor
races:
• Open seats
in CT, GA, KS, MI, OR, SC, TN,
• Incumbents facing
tough races in AZ, MA, NV
Senate
races:
• Open seats
in CT, KS, MO
• Incumbents facing
tough races in AZ, NC, NV
House
races:
• Open seats
in AZ, KS, TN, WA
• Incumbents facing
tough races in CT, KS, MO, NV
Political
Advertising
Five
Things to Know About Meredith
1. The largest media
company serving U.S. women
• Revenues more than
doubled in five years
23
Agenda
24
Meredith Integrated
Marketing
Marketing Services
Industry Spending Growing
Forecast
$ in
billions; Source: VSS September 2009
Database
Mobile
Digital
Word
of
mouth
mouth
Healthcare
Assembling Array of
Custom Marketing Capabilities
25
Meredith Integrated
Marketing
26
24%
CAGR
$ in
millions
Meredith Integrated
Marketing
Delivering Strong
Revenue Growth Over Time
iFood
Assistant
Database
Digital
Magazine
Video
Magazines
Emails
Social
Marketing
Online
Case
Study: Evolution of the Kraft CRM
Meredith Integrated
Marketing
27
• GPS-based store
locater
• Step-by-step
directions
• Instructional
videos
• Shopping list tool
The
Kraft CRM iFood Assistant
Meredith Integrated
Marketing
28
Five
Things to Know About Meredith
1. The largest media
company serving U.S. women
5. Strong balance sheet
and financial position
• Strong cash flow,
low debt and consistent dividend growth
29
Agenda
30
Fiscal
Third Quarter Highlights
|
|
Q310
|
Q309
|
%
var
|
|
Total Company
revenue
|
$353
|
$338
|
+5%
|
|
Operating
Profit
|
$56
|
$43
|
+30%
|
|
Operating
Profit Margin
|
16%
|
13%
|
+300
bps
|
|
Earnings per
share
|
$0.73*
|
$0.56
|
+30%
|
In
millions except per share data and profit margin
*
Includes a benefit of $0.04 from special items, primarily the
resolution of an income tax contingency
resolution of an income tax contingency
Strong
Financial Management
31
Improving
Advertising Performance
|
Fiscal
|
Total
Company
Advertising |
|
Q409
|
(14.9%)
|
|
Q110
|
(9.5%)
|
|
Q210
|
(6.9%)
|
|
Q310
|
+8.1%
|
|
Q410*
|
+7 to
8%
|
* =
Forecast
Strong
Financial Management
32
Consistently
Generate Strong Cash Flow
12%
CAGR
5%
CAGR
$ in
millions; fiscal years
Strong
Financial Management
$131
$160
$163
$171
$194
$211
$256
$181
$ in
millions; fiscal years
Assumes revolving facilities are renewed upon expiration.
Assumes revolving facilities are renewed upon expiration.
Consistent Debt
Reduction
$130
Illustration of
Meredith’s debt balance
assuming current maturity schedule
assuming current maturity schedule
Strong
Financial Management
33
$305
$205
$485
$155
$255
$380
34
Track
Record of Dividend Increases
12%
CAGR
Strong
Financial Management
Calendar
years
35
|
|
Q410
|
|
Total Company
advertising revenue
|
+7 to
8%
|
|
National Media
advertising revenue
|
Flat to
up
Slightly |
|
Local Media
advertising revenue
|
Up high
teens
|
|
Earnings per
share*
|
$0.61 to
$0.66
|
Fiscal
Fourth Quarter and Full Year Outlook
*
Excludes special items
|
Fiscal 2010
earnings per share*
|
$2.13 to
$2.18
|
Five
Things to Know About Meredith
1. The largest media
company serving U.S. women
2. Strong consumer
connection across multiple platforms
3. Outperforming
Peers
4. Growing marketing
solutions business
5. Strong balance sheet
and financial position
36
37