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| 8-K - PRESENTATION AT CITI EMT CONFERENCE - MEREDITH CORP | form8kciti.htm |
1
Citi 21st Annual Global
Entertainment, Media &
Telecommunications Conference
Entertainment, Media &
Telecommunications Conference
January 5, 2011
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 and
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 and
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
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
Mobile
E-Reader
Broad Capabilities Across Media Platforms
1. Advertising Update
2. Vision 2013 Growth Strategies
• Optimize our core businesses
• Expand our digital businesses
• Enhance and extend key brands
• Significantly grow Meredith Integrated Marketing
• Building shareholder value over time
4
Agenda
Improved Advertising Revenue Performance
Change from prior year period
Source: Meredith, calendar year quarters
E = Estimate
5
Calendar 2009
Calendar 2010
Q4
Q1
Q2
Q3
Q4
Q3
Q2
Q1
Full
year
2009
year
2009
Full
year
2010
year
2010
E
E
Calendar 2010 Advertising Revenue Growth
9%E
Total Company
advertising
revenue growth
advertising
revenue growth
• National Media
• Local Media
non-political
• Local Media political
Growth from:
E = Estimate
7
Delivered Record Political Advertising Revenues
$16
$22
$24
$36
$26
$39
Calendar years
$ in millions
E = Estimate
E
National Media Advertising Share Gains
9.1%
9.4%
11.1%
Quarterly market share as of 12/31
Source: Publishers Information Bureau
*Based on most current PIB data (November 2010)
8
11.8%
*
Advertising Spending Forecasts
|
|
Forecast
|
|
Estimates
|
CAGR
|
||
|
2010
|
2011
|
2012
|
2013
|
2014
|
2010-2014
|
|
|
Total
Advertising |
$183
|
$187
|
$201
|
$215
|
$235
|
6.4%
|
|
|
|
|
|
|
|
|
|
Consumer
Magazines |
$10.4
|
$10.4
|
$10.5
|
$10.9
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$11.4
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2.3%
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Broadcast
Television |
$45
|
$44
|
$48
|
$48
|
$52
|
3.7%
|
Calendar years; $ in billions
Source: Veronis Suhler Stevenson, September 2010
10
Advertising Environment Summary
National Media:
• Volatile by issue and quarter-to-quarter
• Achieving higher rates per advertising page
• Online advertising up strongly
Local Media:
• Delivering strong top-line growth
• Political advertising season set record
• Automotive rebounding strongly; other categories also up
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Agenda
1. Advertising Update
2. Vision 2013 Growth Strategies
• Optimize our core businesses
• Expand our digital businesses
• Enhance and extend key brands
• Significantly grow Meredith Integrated Marketing
• Building shareholder value over time
12
Building the National Media Business of the Future
Brand Strength
Revenue Growth
Cost and Expense
Containment
Containment
Next Generation
Operating Model
Operating Model
• Magazine readership up
• Digital audience growing
• Delivering higher net revenues per page
• Integrated marketing, brand licensing growing
• Q1 FY11 costs down 2 percent year over year
• Q1 FY11 costs down 14 percent over two years
• Optimized Special Interest Media business
• Moving consumer marketing activities online
13
Building the Local Media Business of the Future
Brand Strength
Revenue Growth
Cost and Expense
Containment
Containment
Next Generation
Operating Model
Operating Model
• Delivering strong TV news ratings
• Better daily show in 80 markets (4 of Top 5)
• Q1 FY11 spot ad revenue up 27 percent
• Increasing online and mobile activities
• Automated newsrooms
• Q1 FY11 costs down 1 percent over 2 years
• Centralized master control, traffic & research
• Creating 24-hour continuous news platform
14
Agenda
1. Advertising Update
2. Vision 2013 Growth Strategies
• Optimize our core businesses
• Expand our digital businesses
• Enhance and extend key brands
• Significantly grow Meredith Integrated Marketing
• Building shareholder value over time
Meredith Interactive Overview
National Media Group
Local Media Group
Total: 25 websites
Total: 30 websites + apps
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16
Growing Audience Online
20
Average Monthly Unique Visitors to all Meredith websites
27% CAGR
18
11
7
3
Fiscal years ended June 30
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Growing Presence in Mobile
• Completed Hyperfactory acquisition:
– Mobile content and marketing specialist
– Working on additional B2B and B2C initiatives
• Business to Business:
– Developing mobile apps, web sites and
marketing campaigns for corporate clients
marketing campaigns for corporate clients
• Business to Consumer:
− Launched mobile versions of our key brands
− TV stations offer multiple apps
− Multiple eTablet initiatives
18
Interactive Tablet Editions to Launch in Spring 2011
19
Agenda
1. Advertising Update
2. Vision 2013 Growth Strategies
• Optimize our core businesses
• Expand our digital businesses
• Enhance and extend key brands
• Significantly grow Meredith Integrated Marketing
• Building shareholder value over time
Better Homes and Gardens I It’s Where Life Happens
Better Homes and Gardens 360º Approach
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Better Homes and Gardens I It’s Where Life Happens
Better Homes and Gardens Products at Retail
21
22
Growing Revenues from Brand Licensing
$ in millions
Fiscal years ended June 30
28% CAGR
23
1
3
3
Parents & American Baby: The Next Megabrand
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24
Agenda
1. Advertising Update
2. Vision 2013 Growth Strategies
• Optimize our core businesses
• Expand our digital businesses
• Enhance and extend key brands
• Significantly grow Meredith Integrated Marketing
• Building shareholder value over time
25
Growing Integrated Marketing Capabilities
Digital
marketing
marketing
Online, social
media, database
marketing
media, database
marketing
Healthcare
marketing
marketing
Mobile
Marketing
Marketing
Custom
Publishing
& CRM
Publishing
& CRM
2006
2007
2008
2009
Pre-2006
Custom Publishing
100%
Custom Publishing
49%
CRM/
Digital
Digital
51%
Strong Revenue Growth and Diversification
26
Fiscal 2005
Fiscal 2010
iFood Assistant
Database
Digital Magazine
Video
Magazines
Emails
Social Marketing
Online
Kraft Case Study
27
28
Agenda
1. Advertising Update
2. Vision 2013 Growth Strategies
• Optimize our core businesses
• Expand our digital businesses
• Enhance and extend key brands
• Significantly grow Meredith Integrated Marketing
• Building shareholder value over time
29
Track Record of Dividend Increases
12% CAGR
Calendar years
30
200
Stock Option Exercises
$2,000
Utilization of Cash
200
Net Debt
300
Capital Expenditures
600
Acquisitions, Net of Dispositions
$2,000
Available Cash
$1,800
Operating Cash Flow
300
Dividends
$600
Share Repurchases
$900
SUBTOTAL
Returned to Shareholders
Reinvested in Business
$900
SUBTOTAL
Use of Cash: Fiscal 2001 through 2010
31
Fiscal 2011 Second Quarter and Full Year Outlook
|
Oct. 2010
|
Jan. 2011
|
|
$0.75 to $0.80
|
$0.85 to $0.88
|
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$2.50 to $2.75
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$2.60 to $2.80
|
• National Media ad revenue up low-to-mid single digits
• Local Media non-political ad revenue flat-to-up low single digits
• Local Media political ad revenue $22 million
Second Quarter:
• Second quarter
• Full year
Earnings per share
1. Optimize our core businesses
2. Expand our digital businesses
3. Enhance and extend key brands
4. Significantly grow Meredith Integrated Marketing
5. Build shareholder value over time
32
Vision 2013 Growth Strategies
33