jefferies 5th annual internet & media conference feb....
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Jefferies 5th Annual Internet &Media ConferenceFeb. 25-26, 2009
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Safe HarborThis 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
Safe Harbor
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
j li t th i t ti f i d b i h i dior 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
t d th f i iti d/ di iti Th Crates; 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.
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Broad Media and Marketing FootprintMeredith Corporation
National BrandsR $1 billi
Local Brands R $300 illi
Digital & Diversified R $300 illi
g p
Revenues: $1 billion Revenues: $300 million Revenues: $300 million
• Integrated Marketing
• Consumer Web sites
• 25 subscription titles
• 150 Newsstand titles
• 12 television stations
• 10% of U.S. households
33
• Broadband Video
• Brand Licensing
Meredith Digitalg
Business-to-ConsumerBusiness-to-Business
• Website design • 40+ Web sites
• Online CRM strategy
• Viral and word of mouth
• Branding and promotions
• 20 million unique visitors
• 185 million page views
• 2 3 million video plays• Branding and promotions • 2.3 million video plays
4Meredith Interactive MediaMeredith Integrated Marketing
Business-to-Business Digital
Meredith Integrated Marketingg g
Transforming from a vendor to strategic partner
CUSTOM PUBLISHER RELATIONSHIP MARKETER
g g p
CUSTOM PUBLISHER RELATIONSHIP MARKETER
• Brand Messaging• Awareness/intent to purchase
• Brand Marketing• Calls to action
• Responsive/executional• Ink-on-paper/magazine• Turn-key/flat-fee solutions
• Proactive & Strategic• Robust online & offline capabilities• Fees based on blended rates
VENDOR PARTNER
5
Meredith Integrated Marketing
Execution of Digital Strategyg gy
• April 2006
• January 2007
• January 2007
• June 2008
6
Kraft Food & FamilyMeredith Integrated Marketing
Kraft Food & Family
y
Our Contracted Assignment:• Food and Family Magazines
Expanded Assignments:
• Food and Family Emails
• Circulation consulting • Database list rental• Campaign management• Campaign management• Brand insert development• Custom video production• Mobile iPhone application
Kraft Food & FamilyMeredith Integrated Marketing
y
• GPS-based store locaterS b di i• Step-by-step directions
• Instructional videos• Shopping list tool
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Meredith Integrated Marketing
Nestlé
9
Meredith Integrated Marketing
Tropicana
Our Contracted Assignment:
p
Our Contracted Assignment:• Integrate brand with Web 2.0• Engage social media
Res lts
• Create “Twitterverse”
Results:• Attracted 1.2 million uniques • Generated hundreds of blogsg• Postings on Blogher,
AdRants, TheAtlantic
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Meredith Integrated Marketing
Takeda Pharmaceutical
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Strong Revenue Growth Meredith Integrated Marketing
g
25% CAGR
$155
$83$60
2004 2006 2008
12
Fiscal Year
$ in millions
Growth StrategiesMeredith Integrated Marketing
g
• Enhance print-based programs with interactive features
• Integrate and optimize recent acquisitions
• Expand capabilities to meet market needs– Search engine optimization and marketing
M bil– Mobile– Database marketing
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Meredith Digitalg
Business-to-ConsumerBusiness-to-Business
• Website design • 40+ Web sites
• Online CRM strategy
• Viral and word of mouth
• Branding and promotions
• 20 million unique visitors
• 185 million page views
• 2 3 million video plays• Branding and promotions • 2.3 million video plays
14Meredith Interactive MediaMeredith Integrated Marketing
Business-to-Consumer Digital
Execution of Digital Strategy
2006 Aggressive expansion of Better
g gy
• 2006 Aggressive expansion of Better Homes and Gardens Network
• 2007 Launch of Parents Network
• 2008 Development and investment in social networking sites
• 2009 Creation of Meredith Women’s Network
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Meredith Women’s Network Strategy
• ConsumerS h i i ti l di t ti i t i G l– Search is new navigational paradigm; starting point is Google
– Social media explodes
• ContentContent– Unified content development across multiple platforms
including print, online, video, mobile
E h i i l d d– Emphasis on social engagement and user‐generated content
• Marketers– Networks offer greater scale and targetingNetworks offer greater scale and targeting
– Sponsors value programs that integrate with editorial
– Cross‐platform ideas increase impact
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The Meredith Women’s NetworkThe First Network of Exclusively High Quality Branded Sites
The Better Homes and Gardens NetworkBetter Homes and GardensBetter RecipesMixing Bowl
Th R l Gi l N t kThe Real Girls NetworkDivine CarolineFitnessMoreLadies’ Home Journal
The Parents NetworkParentsAmerican BabyFamily Circle
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18
Competitive Landscape
21iVill
Millions of Unique Visitors
21
20AOL Living
iVillage
17Scripps
12
11Hearst Women's
Meredith Women's
7CondeNet
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2Martha Stewart
Source: ComScore, December 2008
Growing ScaleAverage Unique Visitors per Month
2004 2006 2008
Better Homes and 3 9 4 7 6 5Gardens Network 3.9 4.7 6.5
Parents Network N/A 1.8 3.5
Real Girls Network N/A N/A 5.0
TOTAL 3.9 6.5 15.0
20In millionsSource: Omniture
The Meredith Women’s NetworkHigh Engagement at Great ScaleHigh Engagement at Great Scale
• Coverageg
• Composition
• Passion
• Engagement
• Impact
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Th B tt H d G d N t kThe Better Homes and Gardens NetworkEverything for a Better Life
Better Homes and Gardens B tt R i Mi i B lBetter Homes and Gardens Better Recipes Mixing Bowl
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BHG Network Competitive Position
15Reader's Digest Network
Millions of Unique Visitors
5
11
15
BHG N t k
Food Network.com
Reader s Digest Network
3
5
HGTV.com
BHG Network
2
3
Martha Stewart.com
Oprah.com
1
1
Good Housekeeping.com
Real Simple.com
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1Fine Living.com
Source: ComScore, December 2008
MixingBowl.comThe Ultimate Social Cookbook
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BetterRecipes.comEverything for Foodies
25
The Parents NetworkKeeping Moms Connected, Crib to College
ParentsAmerican Baby Family Circle
26
Parents Network Competitive Position
4 1BabyCenter Network
Millions of Unique Visitors
4.1
2.8
2 7Parents Network
CafeMom
BabyCenter Network
2.7
2.6
2.5About.com
FamilyFun
Parents Network
0.6
2.5
1.5
iVillage
Kaboose Baby
About.com
0.1
0.05Pregnancy
Parenting
270.04Cookie
Source: ComScore, December 2008
The Parents NetworkEverything a Mom Needs ‐When and Where She Needs It
Toddler thru Elementary School Tweens & TeensPreconception/Prenatal thru First 12 months
28
Th R l Gi l N kThe Real Girls NetworkCreated by Women for Women
Divine Caroline
More Ladies’ Home Journal
Fitness
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DivineCarolineLife In Your Words
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Strong Revenue Growth Meredith Interactive Media
g
$42 0
27% CAGR
42$42.0
$25 4
12.4
25.4$25.4
$12.4
2004 2006 2008
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2004 2006 2008Fiscal Year
$ in millions
Growth StrategiesMeredith Interactive Media
g
• Increase scale of Meredith Women’s Network
– The Better Homes and Gardens Network
– The Parents Network
– The Real Girls Network
• Enhance and monetize video capabilities
• Grow online subscription orders• Grow online subscription orders
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Strong Operating Cash FlowFinancial Overview
12% CAGR
g p g
$211
$256
12% CAGR
$163$171
$194$211
2004 2005 2006 2007 2008
3333
2004 2005 2006 2007 2008
$ in millions
Cash Flow Fiscal 1999 through 2008Financial Overview
g
200Stock Option Exercises300 Net Debt
$1,700Operating Cash Flow
200Stock Option Exercises
$
$2,200Available Cash
700 Share Repurchases$1,000 Acquisitions, Net of Dispositions
300 Capital Expenditures
$2,200Utilization of Cash200 Dividends
p p
3434$ in millions
Calendar Year Dividends Per ShareCalendar Year Dividends Per ShareFinancial Overview
12% CAGR
$0 74
$0.86 $0.90
$0.48$0.56
$0.64$0.74
$0.30 $0.32 $0.34 $0.36 $0.38
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
3535
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Conservative Capital StructureFinancial Overview
p
• $455 million total debt
• 4.4% cost of debt
• 1.7x debt to EBITDA
3636As of Dec. 31, 2008
REAFIRM GUIDANCECurrent Valuation MetricsFinancial Overview
• Current dividend yield: 7.1%
• EPS multiple: 4.8x
• EBITDA multipleEBITDA multiple to market capitalization: 2.7x
• EBITDA multiple• EBITDA multiple to total capitalization: 4.4x
3737As of Feb. 23, 2009, using trailing 4 quarters actual results, excluding special items
Summaryy
Meredith possesses:
• Vibrant and profitable media assets and brands
Meredith possesses:
• Leading business-to-business marketing capabilities
• Growing business-to-consumer digital assets
• Strong financial foundation
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Jefferies 5th Annual Internet &Media ConferenceFeb. 25-26, 2009
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