General Investor Presentation August 2017 SAFE HARBOR This - - PowerPoint PPT Presentation

General Investor Presentation

August 2017

SAFE HARBOR

This presentation and management’s commentary relating thereto may 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 and its operations. Statements in this presentation that are forward- looking include, but are not limited to, the Company’s estimates of future revenues, profits and earnings per share. 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 or vendors; the integration of acquired businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in paper, postage, printing, syndicated programming or other costs; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in government regulations affecting the Company’s industries; increases in interest rates; and the consequences of 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. 2

MEREDITH’S INVESTMENT THESIS

❖ Portfolio of highly rated television stations in large and fast-growing markets ❖ Trusted national brands with an unrivaled female reach ❖ Profitable and growing digital business ❖ Growing consumer-generated revenue

Experienced management team with a proven record of

• perational excellence and shareholder value creation over time

Strong and consistent cash flow generation, driven by: Commitment to delivering Top-Third Total Shareholder Return:

1. 2. 3.

❖ Balanced capital allocation strategy ❖ Dividend payer for 70 years; increases for 24 consecutive years ❖ Share buyback program ❖ Accretive strategic acquisitions

3

MEREDITH AT A GLANCE

Local Media

Revenue: $630M

• Op. Profit: $215M

EBITDA: $250M

WORKING YOU

National Media

Revenue: $1.1B

• Op. Profit: $147M

EBITDA: $164M

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Results for fiscal 2017 ended June 30

SUCCESSFUL EXECUTION OF STRATEGIC PLAN OVER TIME

National Media Group Local Media Group

Corporate ❖ Built fast-growing and profitable digital business with a scale audience ❖ Added leading digital ad technology companies Selectable, Qponix & ShopNation ❖ Achieved inflection in advertising revenues with digital driving overall growth ❖ Added Allrecipes, Shape and Martha Stewart brands targeting younger women ❖ Grew brand licensing business at Walmart to 3,000+ SKUs at 5,000 stores ❖ Acquired and integrated 5 strong stations, achieving 3 additional duopolies ❖ Grew news programming by 50% across portfolio ❖ Significantly grew retransmission revenues and contribution ❖ Expanded digital and mobile platforms ❖ Implemented and aggressively pursuing Total Shareholder Return program ❖ Grew dividend at 10% average annual rate to $2.08; currently yielding 4% ❖ 2.8% weighted-average interest rate and 1.9x debt-to-EBITDA leverage

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❖ Record Local Media advertising revenue, led by political dollars ❖ Retransmission contribution continues to grow ❖ Achieved network affiliation renewal in important markets ❖ Strong digital driving overall National Media advertising growth ❖ Renewed highly profitable licensing agreement with Walmart ❖ Rapid growth in consumer connection across media platforms ❖ Strong cash flow fueling 24th-straight dividend increase

Highest earnings per share in Company’s 115-year history

STRONG ACHIEVEMENTS IN FISCAL 2017 TOWARD VISION

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TODAY’S AGENDA

7

❖ Meredith Overview ❖ National Media Group Growth Strategies ❖ Local Media Group Growth Strategies ❖ Total Shareholder Return Strategies ❖ Q&A

NATIONAL BRANDS POSSESSES STRONG CONSUMER REACH

80

MILLION UNIQUE VISITORS

31%

FY-17 DIGITAL AD REVENUES

110

MILLION UNDUPLICATED WOMEN

70%

REACH TO MILLENNIAL WOMEN

CROSS-CHANNEL GROWTH STRATEGY

Growth & Diversification in Advertising Revenue Growth & Diversification in Consumer Revenue

Audience & Engagement Growth

Best-In-Class Branded Experiences

Proprietary Technology Platforms Proprietary First- Party Data, Insights & Analytics

1. 2. 3. 4.

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PILLAR 1: BRANDED EXPERIENCES

10 Notification Email

Saved recipe Follow streams and brands User Comments (To Come)

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PILLAR 1: NEW BRAND LAUNCHES

❖ Launched in fall 2016 as a newsstand title ❖ Strongest-selling launch in recent history ❖ Transitioned to quarterly subscription title with one million ratebase (May 2017) ❖ On track to be most profitable title in first year of operation in Meredith history

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PILLAR 2: CROSS-PLATFORM AUDIENCE GROWTH

Digital is adding to Meredith’s total audience, and is not cannibalizing print

50 75 100 125 150 175 200 2010 2011 2012 2013 2014 2015 2016

Total Audience (in millions)

Print Digital

40% of audience 60% of audience

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PILLAR 2: STRONG MILLENNIAL REACH

13

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Understand Her Interests Understand Her Intent Understand When She’s In-market

Driven by ‘Visit’ data

• Visits/ Content
• Emails
• Subscriptions

Driven by ‘Action’ data

• ‘I Made it’
• Add to Shopping List
• Share

Driven by ‘Real-time’ data

• Mobile – in-store recipes
• Shopper Marketing
• ShopNation Commerce

50% of Allrecipes visitors are in store w/in 24 hrs. Meredith Differentiates (in food)

interest + intent

We understand her

PILLAR 3: FIRST-PARTY DATA & ANALYTICS

PILLAR 4: TECHNOLOGY PLATFORMS

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Recent platform-centric acquisitions

• Social platform for food
• Native and engagement-based video
• Shopper marketing
• eCommerce and affiliate marketing
• Lead generation / performance

marketing Existing / Home-Grown Technology Platforms (Consumer Revenue, etc.)

+

PLATFORMS DRIVING PREMIUM MONETIZATION GROWTH & REVENUE DIVERSIFICATION

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PREMIUM MONETIZATION UNITS

NATIVE VIDEO SPONSORSHIPS INFLUENCER SHOPPER MARKETING SOCIAL

Traditional Display vs. Premium Monetization

eCPM Ranges: $10 – $30+ eCPM Ranges: < $10

82% 18% 52% 48%

100 200 300 400 500 600

2012 2017

RESULTS: TOTAL AD REVENUE GROWTH, FUELED BY DIGITAL CHANNELS

$ in millions Fiscal years ended June 30

Print Digital

$492 $520 10% 30%

$ $

91% 70% 5-YEAR CAGR Digital: 30%

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RESULTS: CONSUMER REVENUE DIVERSIFICATION

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❖ Magazine subscriptions: stable revenue source ❖ Auto-renewal has large upside (2x profit) ❖ Launch promising new products ❖ World’s No. 2 licensor behind Disney ❖ Renewed Walmart relationship ❖ Several new programs launched

Circulation & New Paid Products Brand licensing eCommerce

❖ Newer, fast-growing revenue source ❖ Turning inspiration to action

TODAY’S AGENDA

19

❖ Meredith Overview ❖ National Media Group Growth Strategies ❖ Local Media Group Growth Strategies ❖ Total Shareholder Return Strategies ❖ Q&A

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LOCAL BRANDS IN LARGE AND GROWING MARKETS

#1 or 2

SIGN-ON to SIGN-OFF RANK IN 6 MARKETS

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STATIONS IN PORTFOLIO

13

STATIONS IN TOP 50 MARKETS

5

EAST & SOUTHEAST: ATLANTA, MKT 10 NASHVILLE, MKT 29 HARTFORD, MKT 30 GREENVILLE, MKT 37 MOBILE, MKT 60 SPRINGFIELD, MKT 114 WEST & SOUTHWEST: PHOENIX, MKT 12 PORTLAND, MKT 25 LAS VEGAS, MKT 40 MIDWEST:

• ST. LOUIS, MKT 21

KANSAS CITY, MKT 33 SAGINAW, MKT 72

DUOPOLY MARKETS

LOCAL MEDIA GROUP GROWTH STRATEGIES

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❖ Increase Viewership ❖ Grow Revenue and Profit ❖ Scale Digital Businesses ❖ Increase Net Retransmission Contribution ❖ Expand our Television Station Portfolio

CY06 CY11 CY16 300 400

9% CAGR

ADDING LOCAL NEWS PROGRAMMING STRENGTHENS MARGINS

700

22

$124 $113 $163 $158 $215 FY13 FY14 FY15 FY16 FY17 $376 $403 $534 $548 $630 FY13 FY14 FY15 FY16 FY17

GROWING REVENUES AND PROFIT

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$ in millions

Revenues Operating Profit 14% CAGR 15% CAGR

$63

FY2013 FY2015 FY2011 FY2017

RECORD POLITICAL ADVERTISING REVENUES

$35 $44 $39

Presidential Election Year Mid-term Election Year

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$ in millions

10% CAGR

FISCAL 2019 POLITICAL ADVERTISING OUTLOOK

Senate Races

Jeff Flake (R-AZ) Dean Heller (R-NV) Bob Corker (R-TN) Chris Murphy (D-CT) Bill Nelson (D-FL) Elizabeth Warren (D-MA) Debbie Stabenow (D-MI) Claire McCaskill (D-MO) Maria Cantwell (D-WA)

Governor Races

Doug Ducey (R-AZ) Bruce Ranner (R-IL) Charlie Baker (R-MA) Dan Malloy (D-CT) Kate Brown (D-OR) Alabama (Open) Florida (Open) Georgia (Open) Kansas (Open) Michigan (Open) Nevada (Open) South Carolina (Open) Tennessee (Open) 25

40%

Las Vegas Portland Greenville Mobile Springfield (FOX)

Fiscal 2021

MVPD Renewal Schedule Affiliation Renewal Schedule

Nashville (NBC)

RETRANSMISSION RENEWALS SCHEDULE

Fiscal 2018 Fiscal 2019 Fiscal 2017

10%

Fiscal 2020

25%

• St. Louis

Hartford Springfield (CBS) Springfield (ABC)

50% of Meredith Subscriber Households Will be Renewed in FY2017 and 2018

Atlanta Phoenix Kansas City Saginaw (CBS)

35%

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TODAY’S AGENDA

27

❖ Meredith Overview ❖ National Media Group Growth Strategies ❖ Local Media Group Growth Strategies ❖ Total Shareholder Return Strategies ❖ Q&A

USE OF CASH PRIORITIES

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Strong commitment to returning cash and maintaining dividend growth Tuck-in acquisitions to strengthen existing portfolio Larger acquisitions only if extremely strategic at attractive valuation with strong synergies Selective share repurchases enabling shareholders to benefit from dips in price – current authorization of $100 million with $68 million remaining Target maintaining current conservative net debt levels Priority

This strategy seeks to optimize free cash flow driving Total Shareholder Return while pursuing organic growth in its core businesses

ACQUISITION AND INVESTMENT PRIORITIES

❖ Local media brands in large faster-growing markets that add network and geographic diversity ❖ Multi-platform national media brands that provide access to new audiences and advertising categories ❖ Digital businesses that support growth strategy

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TOP-THIRD TSR EXPECTATIONS

❖ Organic revenue growth ❖ Margin expansion ❖ Dividend yield ❖ Buybacks TSR Drivers through FY19: +3-4% +3-4% +3-4% +0-1%

Organic TSR 9-13%

❖ Acquisitions and/or multiple expansion +++

Robust digital strategy with range of monetization options fueled by leading brands, content and scale Stronger broadcasting revenue upside from political year, retransmission uplift, and non-political advertising Planned annual dividend increases to deliver peer-leading, stable yield, and floor on stock Aggressive buyback program that capitalizes on current undervaluation and returns excess cash

Total TSR At Least Top Third

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MEREDITH’S INVESTMENT THESIS

❖ Portfolio of highly rated television stations in large and fast-growing markets ❖ Trusted national brands with an unrivaled female reach ❖ Profitable and growing digital business ❖ Growing consumer-generated revenue

Experienced management team with a proven record of

• perational excellence and shareholder value creation over time

Strong and consistent cash flow generation, driven by: Commitment to delivering Top-Third Total Shareholder Return:

1. 2. 3.

❖ Balanced capital allocation strategy ❖ Dividend payer for 70 years; increases for 24 consecutive years ❖ Share buyback program ❖ Accretive strategic acquisitions

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General Investor Presentation

August 2017