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Management
Presentation
November 2017
Caution Concerning Forward Looking Statements and
Non-GAAP Financial Measures
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995;
particularly statements regarding future financial and operating results of Time Inc. (the “Company”) and its business. These statements
are based on management’s current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results
may vary materially from those expressed or implied in this presentation due to changes in economic, business, competitive, technological,
strategic, regulatory and/or other factors. More detailed information about these factors may be found in the Company’s filings with the
Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form
10-Q. The Company is under no obligation, and expressly disclaims any such obligation, to update or alter its forward-looking statements,
whether as a result of new information, future events or otherwise.
Management’s outlook does not include the impact of potential divestitures.
Non-GAAP financial measures such as Operating income (loss) excluding Depreciation and Amortization of intangible assets (“OIBDA”),
Adjusted OIBDA, Adjusted Diluted Earnings Per Share (EPS) and Free cash flow, as included in this presentation, are supplemental
measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Definitions of these
measures and reconciliations to the most directly-comparable U.S. GAAP measures are included at the end of this presentation deck. Our
non-GAAP financial measures have limitations as analytical and comparative tools and you should consider OIBDA, Adjusted OIBDA,
Adjusted Diluted EPS and Free cash flow in addition to, and not as a substitute for, the Company’s Operating income (loss), Net income
(loss) attributable to Time Inc., Diluted EPS and various cash flow measures (e.g., Cash provided by (used in) operations), as well as other
measures of financial performance and liquidity reported in accordance with U.S. GAAP.
Note: Throughout the presentation, certain numbers may not sum to the total due to rounding.
All trademarks and service marks referenced herein are owned by the respective trademark or service mark owners. ©2017 Time Inc. Published
2017.
2
Sue D’Emic
EVP and Chief Financial Officer
With over 30 years’ experience in finance and accounting, Sue has served in a variety of senior
accounting and finance positions, including at Trusted Media Brands
Sue also oversees Technology, Production and Time Inc. India
Today’s Participants
3
Rich Battista
President and Chief Executive Officer
25-year veteran in entertainment with an impressive background of leading diverse media organizations,
including Fox and Gemstar-TV Guide
Proven experience in launching, building and managing large-scale businesses across media platforms, both
traditional and digital, and at various stages of development
Jen Wong
Chief Operating Officer and President, Digital
Leading industry expert with significant digital experience from her time at POPSUGAR, where Jen was
Chief Business Officer, and at AOL, where she held several top executive management positions
Jen has accelerated Time Inc.’s digital growth since joining the company
Overview
120MM+
monthly
global print 3
230MM+
global print and
digital 6
Hundred
s
of events
annually
274MM+
via global social
media
250MM+
U.S. consumer
registrations
3x
Video production
growth since 2014
~30MM
Subscribers4
4.6B
(2016) video
starts
Top U.S. Digital Media Property1
U.S. Multi-Platform Monthly Uniques (MM)
~40MM
Moms 5
~7 out
of 10
Millennials 5
Up from 81MM in June
2014
2
Sources: 1) comScore Multi-Platform September 2017; 2) comScore Multi-Platform for Time Inc. custom entity June 2014; ; 3) MRI Spring 2017, A.I.R. NRS
(Jan.-Dec. 2015), TGI (2Q 2016), ABC (Jan.-Dec. 2015); 4) AAM 1H 2017; 5) comScore Multi-Platform//GfK/MRI Fusion (7-17/Spring 2017; 6) 2017 comScore
Multi-Platform, custom entity August 2017
Massive Audience and Scale
5
245
205
196 196
182
165 164
149 145
142 139
100,000
105,000
110,000
115,000
120,000
125,000
130,000
135,000
140,000
145,000
-
50
100
150
200
250
300
M
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M
ill
io
n
s
Snapchat Flipboard LinkedIn Youtube Pinterest
Instagram Google Plus Twitter Facebook
365
446 490
605
826
1,003
1,251
1,507
2,622
2,989
3,628
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 6
SOCIAL REACH (MM)
Experiencing Significant Growth
274MM+
TOTAL
GLOBAL
FOLLOWERS
11/2017
TOTAL U.S. UNIQUE VISITORS (MM)
139MM
TOTAL
UVs1
9/2017
QUARTERLY U.S. VIDEO STARTS (MM)
3B+
TOTAL
STARTS
3Q 2017
6 Sources: 1) comScore Multi-Platform September 2017
Diverse Set of Influential Iconic Brands
Covering virtually every interest and passion
CELEBRITY &
ENTERTAINMENT
NEWS & BUSINESS SPORTS LIFESTYLE
Source:
1) comScore Multi-Platform//GfK/MRI Fusion (7-17/Spring 2017) ; 2) comScore Multi-Platform September 2017
Time Inc. Brands Over-Index with Millennials (18-34)2 for Digital Consumption - More Millennials than Vice and Vox
91MM
CONSUMERS 1
84MM
CONSUMERS 1
66MM
CONSUMERS 1
65MM
CONSUMERS 1
7
Sustaining the strength of
our print products
Growing our large digital
revenues
Extending our brands
through high-margin and
high-value areas, such as
events, licensing, TV and
international
Expanding the ARPU of
our ~30 million total
subscribers with other
products and services
Building our programmatic
and people-based
targeting capabilities
through unique first-party
data
Growth Strategy
Aggressive cost
reengineering program
Portfolio rationalization Enhanced financial
flexibility
8
Recent Strategic Initiatives
Strategic
Transformation
Program
CONFIDENTIAL
Strategic Transformation Program
10
In August 2017, after engaging in a thorough review of the business, management
announced the following:
1. Management has already targeted more than $400 million of run-rate cost savings, with the majority
of initiatives expected to be implemented by the end of 2018
2. Program utilizes a portion of proceeds to invest in our future in key growth areas including native and
branded content, video, data and targeting, paid products and services, and brand extensions
3. Management projects a minimum range of $500 million to $600 million of Adjusted OIBDA within 3 to
4 years
Program to accelerate the optimization of cost and revenue growth drivers
10
Management’s outlook does not include the impact of any potential divestitures.
See Cautionary Statement and reconciliations of non-GAAP financial measures in this presentation.
11
Reimagination of Print
Reimagining how we create, produce, distribute and monetize print
• Cost initiatives – including editorial delayering and hubbing, web content in books, editorial cost
innovation
• Format changes – including frequency and rate base, eventizing of covers
• Ad Sales innovation – new high impact cover integrations and experiences
• Better use of data – aligning print audience with digital in one audience sell and guarantee with
downstream point of sale information; enhancing CRM capabilities in subscription marketing
• Joint marketing activations with Time Inc. Retail
• Bookazines – increasing volume of product and growing the business through more extensions and
topical content
See Cautionary Statement and reconciliations of non-GAAP financial measures in this presentation.
Key
Growth
Areas
The Foundry has established a strong reputation for native,
and it is organized for category expertise and to build content
across print and digital.
Time Inc. native revenues grew almost 2x from 2015 to 2016.
Our sales team is experienced in selling content creation and
distribution, our most credible asset, built upon 100 years of
editorial know-how.
We are investing behind our Foundry Enterprise product,
which makes content and operates sites and social accounts
for marketers.
We are also investing in a proprietary native ad platform to
enable Time Inc. to scale fast-growing native operations.
Native /Branded Content
Our immersive content
experiences help brands tell their
stories so they resonate with the
right audiences at the right time
DIGITAL ADVERTISING
>2x1
$9B1
Market will grow
From 2015-18 to
13
Source:
1) Socintel 360
~600
Native & Branded Programs in 2016
14
Time Inc. Video is attracting fans at a record
rate, including an entirely new generation of
viewers.
In 2017, we plan to produce more than 50,000
videos - including 150 new and returning
franchises and series, and over 1,500 live
programming hours.
In 3Q 2017, we achieved over 3 billion video
views across our network and are on pace to
exceed 10 billion views this year, nearly
doubling versus the previous year.
This year, we are launching social-only video
brands to feed the insatiable demand for social
video and drive the native revenue opportunity
in key ad verticals:
• Food: Well Done (launched March
2017)
• Beauty: The Pretty (launched May
2017)
• Exploring launches in other verticals
Video
Time Inc. has built major video capabilities and video has
quickly become the new way we tell stories.
VIDEO STARTS (MM)
Sources:
1) Internal, Omniture, Facebook, Google, Snapchat, Twitter
DIGITAL ADVERTISING
Record
quarterly
level
Time Inc.
3B+ video
views
365 446
490
605
826
1,003
1,251
1,507
2,622
2,989
3,628
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
S O C I A L V I D E O L O N G F O R M T V V I R T U A L R E A L I T Y
O T T D I G I T A L V I D E O 3 R D P A R T Y P L A T F O R M S
Leading the Way Across the Video Ecosystem
2
BRANDS
LAUNCHED
YTD 2017
360o
INTERACTIVE
EXPERIENCES
2MM+
DOWNLOADS
9/2017
50hrs+
ON THE AIR
1B+
STREAMS PER
MONTH
3
SNAP
CHANNELS
6/2017
15
Content Capabilities Across All Platforms and Formats
IG-Exclusive Elevator Videos
16
The average U.S. household owns 7.8 Internet-connected devices1, but
marketers typically can identify only one of them during Web visits, making it
challenging to optimize frequency and measure ROI.
Leveraging the shift to programmatic buying, Time Inc. + Viant offers both
premium brands and first-party data which enables us to generate content,
connect with audiences and efficiently message and re-target.
Multiple market approaches:
1. Time Inc. Audience Amplify: Ability to target and extend Time Inc.’s
premium audiences with Viant people-based targeting (on and off
owned sites)
2. Viant + Adelphic: Adelphic’s self-service media planning and execution
tools, including its ability to reach consumers across all screens and
formats, bolsters Viant’s people-based data and analytics offerings.
250 MM
Programmatic &
People-Based Targeting
Time Inc. and Viant help advertisers reach specific
targeted people and audiences, maximizing ROI
Registered U.S.
Profiles
4B
Ad Requests / Day
Time Inc. + Viant: Advertisers can find and
measure ROI against people-based targets
across owned and third-party sites
Open platform with self-serve,
programmatic integrations
SCALABLE
Time Inc. Sites
PREMIUM
17
Source:
1) March 2016 NPD report
DIGITAL ADVERTISING
BRAND LICENSING TV & LONG FORM EVENTS
Extending Time Inc.’s brands to products
worldwide, and monetizing against our
existing editorial
Time Inc. Productions is a full-service
production company leveraging Time
Inc.’s iconic brands to create and
monetize original programming
Time Inc. has the power to convene
consumers and industry leaders across
the globe
ONLINE PROGRAMS
Brand Extensions
18
Financial
Highlights
Solid Quarter for Adjusted OIBDA Despite Challenging Print Environment
Total revenues of $679 million, declined 9% year-over-year.
Operating income of $51 million versus Operating loss of $167 million in the prior year.
Adjusted OIBDA of $115 million versus $100 million in the prior year.
In October 2017, Leverage-Neutral Refinancing Transaction Extended Debt
Maturities and Balanced Capital Structure
Strategic Transformation Program – Developed Detailed Bottom-Up Plans; Affirming
Target of More Than $400 Million of Run-Rate Cost Savings
Portfolio Rationalization – Sold INVNT in July; Processes Underway for Sunset,
Golf, Time Inc. UK, TCS, and majority stake in Essence
3Q17 Financial Highlights
20 See Cautionary Statement and reconciliations of non-GAAP financial measures in this presentation.
3Q17 Sources of Revenues
Sources of Revenues
In millions Three Months Ended
September 30,
Nine Months Ended
September 30,
2017 2016 % Change 2017 2016 % Change
Magazines $ 433
$ 506
(14 )% $ 1,300
$ 1,560
(17 )%
Digital 165 160 3 % 480 429 12 %
Brand Extensions & Other 81 84 (4 )% 229 220 4 %
Total revenues $ 679 $ 750 (9 )% $ 2,009 $ 2,209 (9 )%
Enhanced Revenue Disclosure to Better Convey Time Inc.’s Diversifying Revenues – Added 3Q17
Magazines consists of revenues generated from the sale of printed magazines, bundled print and digital offers and magazine distribution, fulfillment and
marketing services provided to third-party publishers.
Digital consists of revenues generated on digital platforms, such as Digital advertising (including programmatic, native and branded content and video), content
licensing and syndication, digital-only subscriptions and digitally-transacted paid products and services.
Brand Extensions & Other represents revenues generated by leveraging our brands and other intellectual property. Brand Extensions & Other consists of
branded book publishing, including bookazines, events, brand licensing, and television licensing, as well as revenues from custom publishing, INVNT (our event
production subsidiary sold in July 2017), and other revenues.
See Cautionary Statement and reconciliations of non-GAAP financial measures in this presentation. 21
Diversifying Sources of Revenues
Magazines consists of revenues generated from the sale of printed magazines, bundled print and digital offers and magazine distribution, fulfillment and marketing services provided to
third-party publishers.
Digital consists of revenues generated on digital platforms, such as Digital advertising (including programmatic, native and branded content and video), content licensing and syndication,
digital-only subscriptions and digitally-transacted paid products and services.
Brand Extensions & Other represents revenues generated by leveraging our brands and other intellectual property. Brand Extensions & Other consists of branded book publishing,
including bookazines, events, brand licensing, and television licensing, as well as revenues from custom publishing, INVNT (our event production subsidiary sold in July 2017), and other
revenues.
See Cautionary Statement and reconciliations of non-GAAP financial measures in this presentation. 22
78%
13%
9%
2015
22%
Non-Magazines
70%
20%
10%
2016
30%
Non-Magazines
65%
24%
11%
9ME 9/30/17
Magazines
Digital
Brand Extensions &
Other
35%
Non-Magazines
Appendix
(1) OIBDA is defined as Operating income (loss) excluding Depreciation and Amortization of intangible assets.
(2) (Gain) loss on operating assets, net reflects primarily the recognition of a gain on sale of certain of our titles and of the deferred gain from the sale-
leaseback of the Blue Fin Building that was completed in the fourth quarter of 2015.
(3) Other costs related to mergers, acquisitions, investments and dispositions, and integration and transformation costs during the periods presented are
included within Selling, general and administrative expenses within the Statements of Operations.
(4) Adjusted OIBDA is defined as OIBDA adjusted for impairments of Goodwill, intangible assets, fixed assets and investments; Restructuring and severance
costs; (Gain) loss on operating assets, net; Pension settlements/curtailments; and Other costs related to mergers, acquisitions, investments and
dispositions, and integration and transformation costs.
TIME INC.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OIBDA
(Unaudited; in millions)
Schedule I
Three Months Ended
September 30,
Nine Months Ended
September 30,
2017 2016 2017 2016
Operating income (loss) $ 51 $ (167 ) $ (13 ) $ (120 )
Depreciation 14 14 42 41
Amortization of intangible assets 20 22 59 63
OIBDA(1) 85 (131 ) 88 (16 )
Asset impairments — 188 5 189
Goodwill impairment — — 50 —
Restructuring and severance costs 26 43 73 54
(Gain) loss on operating assets, net(2) (4 ) (2 ) (8 ) (18 )
Other costs(3) 8 2 18 23
Adjusted OIBDA(4) $ 115 $ 100 $ 226 $ 232
24
Schedule II TIME INC.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OIBDA –
2017 & 2021 OUTLOOK
(Unaudited; in millions)
(1) Adjusted OIBDA is defined as OIBDA adjusted for impairments of Goodwill, intangible assets, fixed assets and investments; Restructuring and severance costs;
(Gain) loss on operating assets, net; Pension settlements/curtailments; and Other costs related to mergers, acquisitions, investments and dispositions, and
integration and transformation costs. Management's Outlook does not include the impact of potential divestitures.
(2) OIBDA is defined as Operating income (loss) excluding Depreciation and Amortization of intangible assets.
Full Year 2017 Outlook Range Full Year 2021 Outlook Range
Adjusted OIBDA(1) $400 to $414 $500 to $600
Asset impairments, Goodwill impairment,
Restructuring and severance costs, (Gains) losses on
operating assets, net; Pension
settlements/curtailments; and Other costs related to
mergers, acquisitions, investments and dispositions,
and integration and transformation costs
Unable to estimate beyond the $138
recognized from
January 1, 2017 through
September 30, 2017
Unable to estimate
OIBDA(2) Unable to estimate Unable to estimate
Amortization of intangible assets ~$75 Unable to estimate
Depreciation ~$60 Unable to estimate
Operating income (loss) Unable to estimate Unable to estimate
25
Management
Presentation
November 2017