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Interim Results For the six months Ended 30 th June 2014 16 th September 2014

Transcript of Interim Results - TLA Worldwidetlaworldwide.com/wp-content/uploads/2015/11/TLA-Interims...Interim...

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Interim ResultsFor the six months

Ended 30th June 2014

16th September 2014

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Agenda

• Highlights• Operational Review

• Financial Review

• Growth Strategy• Sales expansion

• Case studies

• Financial review

• Outlook

• Appendices

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Presenting Team

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Mike Principe - CEOA co-Founder of TLA, Mike has been CEO since its inception and IPO in December 2011. He has over 15 years of experience in sports and entertainment deal making, operations and management. Prior to TLA, Mike was Managing Director of Blue Entertainment Sports Television (BEST), where he was responsible for day to day operations, acquisitions and growth strategy. BEST engaged in talent representation, television rights and production, event production and operation and sponsorship sales, Prior to BEST's sale to Lagadere Unlimited, under his leadership, BEST was was ranked as the top media company by Inc Magazine. A leading sports executive, Mike was honored as a Sports Business Journal's prestigious "Forty Under 40”.

Bart Campbell – Executive ChairmanA co-Founder of TLA, from 2009 until June 2013, Bart was the Group COO of Chime Communications plc (“Chime”) sports division, called CSM Sport & Entertainment which has 670+ staff, in 15 offices across 13 countries. During that period he was a member of the executive board of Chime. Prior to that, Bart was the Group CEO of the sports marketing and management business, Essentially Group plc (“Essentially”) which is part of Chime today, starting this role in 2006. During his tenure as CEO of Essentially, he led the IPO of the business and grew it from 20 to 120 professionals with offices in London, Australia, South Africa, New Zealand, India and Japan. Since June 2013 Bart has been a shareholder and Chairman of the Melbourne Storm, a premiership National Rugby League team in Australia.

Don Malter - CFODon joined TLA on 17 September 2013 as CFO. He was previously CFO (North America) for BMG Chrysalis since 2010, a joint venture between private equity firm, KKR and European media conglomerate, Bertelsmann. Prior to this he was CFO (North America) for Dimensional Music Publishing, LLC, a private equity backed music publishing house for 5 years. Don is an experienced CFO, having worked in the media and entertainment industry for over 20 years.

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Financial Highlights • Headline EBITDA2 grew by 11% to $4.1 million, reflecting headline EBITDA margin3 of 40% (H1 2013: 39%)

• Headline profit before tax increased by 12% to $3.9 million (H1 2013: $3.5 million)

• Operating income1 increased by 12% to $10 million (H1 2013: $8.9 million), reflecting strong growth in sports marketing

• Statutory operating profit in sports marketing grew by 145%, all organic

• Operating profit of $1.7 million (H1 2013: loss of $0.3 million)

• Statutory profit before tax of $1.2 million (H1 2013: $1 million loss)

• Reported revenues increased by 7% to $10 million (H1 2013: $9.3 million)

• Headline fully diluted earnings per share up 20% to 2.97 cents (H1 2013: 2.47 cents)

1 Reported revenue less third party commissions, which is shown as gross profit.2 Operating profit adjusted to add back depreciation, amortisation of acquired intangible assets and any acquisition related charges, share-based payment charges and exceptional items.3 Headline EBITDA divided by Reported revenue

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Operational Highlights

• Contracted revenues increased by 27% on H1 2013 to $52 million

• Total client base rose to 461 (H1 2013: 440) representing net client wins of 21 or 5%

• Maintained top agency position in professional baseball in terms of total client roster with 260 clients (H1 2013: 228)

• Clients in Major League Baseball increased by 12% and by 15% in Minor Leagues compared with H1 2013

• Sports Marketing operating income increased 37% to $3.6 million (H1 2013: $2.6 million), driven by organic expansion of client roster

• Entered the global soccer industry by securing all commercial rights to the elite International Champions Cup in Asia Pacific for 2015-2018

• Appointed exclusive commercial agents for the USA Rugby v New Zealand All Blacks game in Chicago, 1 November 2014

• Golf clients Jim Furyk and Patrick Reed selected for the US Ryder Cup team 2014

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Baseball Representation

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• Organic client acquisition rate of 14% compared to June 2013• 260 clients (H1 2013 : 228)

• MLB 65 (H1 2013 : 58) up 12%, including 21 All Stars

• MiLB 195 (H1 2013: 170) up 15%, including 64 All Stars

• Enhanced pipeline of young players moving into the key earning period of their careers

• Three TLA clients listed in the top 12 Rookie superstars “Sports on Earth” (article in the Appendices)

2014

2014

20142013

2013

2013

0

5

10

15

20

25

30

35

Rookie (1-3 Years) Abrbitration (4-6years)

Free Agency 7+ years)

MLB player cycle as 30 June 2014

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Sports Marketing

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• Organic client acquisition growth of 17.5% compared to June 2013

• Operating income up 37%

• Statutory operating profit up 145%

• Step change in the events business:

• commercial agency to USA Rugby;

• secured the Asia Pacific rights to ICC 2015-2018; and

• healthy pipeline being converted into new business.

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Baseball: organic

• Grow the current business by organic client acquisition - up 14%

• Client retention as they move through their career into higher earning years

• Continuing to maximise our clients earnings

• Selective talent / staff and regional agency acquisitions to grow geographically

Sports Marketing: organic

• Continuing to increase client base and revenue per client: client base is up 17.5% year on year

• Build up the events revenues (new and repeatable) both in the USA and Internationally

• Further develop our recently established media and TV rights business

• Look at new service offerings

• Acquisition & key hires

Growth Strategy

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• The addition of industry veteran, Dave Bialek to TLA adds:

• Sponsorship and In-Stadia expertise

• Enhances our ability to monetise our events, such as Baseball City and the ICC and to create new properties

• Additional inventory opportunities - Liga MX perimeter signage, 3D signage and virtual advertising rights

• Strengthens our industry reach – most recently President of ANC Sports Marketing and prior to ANC, led Van Wagner’s stadia sponsorship and sales efforts

• A continuation of our investment in Sports Marketing to build out future organic growth

Sales Expansion

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Case Study – USA Rugby

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• Rugby World Cup Champions, the New Zealand All Blacks are playing the US Eagles in an international match, 1 November 2014 at Chicago’s Soldier Field

• The match will be only the third official international between New Zealand’s All Blacks and the USA Eagles and the first in the United States since 1980

• The event marks a step forward for US rugby as it continues to increase its profile domestically

• This event follows on the 2013 match between the Eagles and the second team New Zealand Maori All Blacks at PPL Park in Philadelphia

• The 2013 match sold out

• Soldier Field has capacity of 59,000 seats – nearing a sell out

• Event will be carried live on NBC

• Sell out and expected along with multi year opportunity with USA Rugby in discussion

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Case Study – International Champions Cup

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• The inaugural Guinness International Champions Cup was held the summer of 2013, featuring eight top clubs – Real Madrid, Juventus, Chelsea, Inter Milan, A.C. Milan, Valencia, Everton and the L.A. Galaxy

• 2014 was played in a total of 12 cities and 13 stadiums across the United States and Canada

• 2 August 2014 – Real Madrid vs. Manchester United: 105,000 seat sell out at Ann Arbor, Michigan

• TLA has secured the event rights for Asia Pacific for 4 years, starting in 2015

• Matches would be held in Australia and consist of 3 matches

• Event will be a 50/50 JV with the Nine Entertainment Co., a $2 billion publically listed Australian entertainment company

• Event sponsorship being provided by an Australian state government

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Financial Review

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Summary Headline Results

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Fi r st Ha l f Fi r st Ha l f % c ha nge

2 0 14 2 0 13

Operat ing Income ($m) 10.0 8.9 12%

Headline EBITDA ($m) 4.1 3.7 11%

Headline EBITDA Margin 40.5% 39.5% 2%

Headline PBT ($m) 3.9 3.5 11%

Headling f ully dilut esd EPS cent s 2.97 2.47 20%

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Segmental Analysis

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• Baseball:• Operating income showed organic growth of 1%• Headline operating profit organic growth of 2%

• Sports Marketing:• Operating income showed organic growth of 37%• Statutory operating profit organic growth of 145%, reflecting our investment in 2013

6.4 6.3

13.1

3.6

2.6

4.9

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2014 2013 2013 - FY

Operating Income ($m)

Baseball Sports Marketing

3.3 3.2

6.3

2.2

1.3

2.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2014 2013 2013 - FY

Headline operating profit ($m)

Baseball Sports Marketing

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Historic Performance

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6.4 6.3

13.1

3.62.6

4.9

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2014 2013 2013 - FY

Operating Income ($m)

Baseball Sports Marketing

3.3 3.2

6.3

2.2

1.3

2.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2014 2013 2013 - FY

Headline operating profit ($m)

Baseball Sports Marketing

40.5%39.5%

45.9%

36.0%

38.0%

40.0%

42.0%

44.0%

46.0%

48.0%

FH - 2014 FH- 2013 FH - 2012

Headline EBITDA margin

2.97

2.47 2.48

0

0.5

1

1.5

2

2.5

3

3.5

FH - 2014 FH- 2013 FH - 2012

Headline EPS

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Income Statement

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$m FH - 2 0 14

( Head line)

FH - 2 0 13

( Head line) Growt h %

FH- 2 0 13

( R eport ed)

Operat ing Income 10.0 8.9 12% 10.0

Costs (5.9) (5.2) (8.3)

EBITDA 4.1 3.7 11% 1.7

Bank Interest (0.2) (0.2) 2% (0.2)

IFRS Finance charges (0.3)

Headline Pro f it bef ore t ax 3 .9 3 .5 11% 1.2

(0.2)

Prof it af t er t ax 1.0

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Cash flow

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Six months to June 2014 2013

Headline EBITDA 4.1 3.5

Depreciation 0.0 0.0

Income tax paid (0.5) (0.1)

Other non cash movements (0.4) (1.0)

Net cash generated from trading 3.2 2.4

Six months to June 2014 2013

Net cash generated from trading 3.2 2.4

Capital expenditure 0.0 (0.1)

Movement in w orking capital (4.8) (2.9)

Deferred consideration paid (1.0) (3.8)

Interest paid (0.2) (0.2)

Debt repayment (0.5) (0.5)

Draw n dow n / (repayment) of revolver 0.0 3.4

Net Cash inflow/(outflow) (3.2) (1.7)

• Debtor days of 58 days from 49 days at the year end as we move through the working capital cycle of the business

• The working capital position is expected to unwind by the year end as the baseball season is completed

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Balance Sheet

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$m HF - 2014 HF - 2013 FY - 2013

Intangible Assets 44.1 48.9 46.4

Fixed Assets 0.2 0.2 0.2

Deferred Tax 3.2 1.4 2.8

Net Current Assets (ex cash) 7.8 4.8 3.9

Cash 1.2 2.4 4.4

Borrowings (9.7) (10.7) (10.2)

Other Liabilities (0.6) (1.0) -

Current Taxation - - -

Deferred consideration (11.7) (12.5) (12.4)

Net Assets 34.5 33.5 35.1

Net debt 8.5 8.3 5.8

Forecast earn out payments

$m

2015 1.96

2016 3.55

2017 7.34

Gross 12.85

IFRS discount (1.18)

Total 11.67

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Outlook

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Outlook

• The Group continues to enjoy good visibility for the remainder of 2014 due to its long term contracted revenues of $52 million, which are up 27% on a year ago

• On track to deliver double digit organic revenue growth for the full year 2014, together with a final dividend

• Well positioned for strong growth in 2015 following our success in securing the commercial rights to the elite International Champions Cup tournament in Asia Pacific next summer

• Strong pipeline of opportunities being advanced currently

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Appendices

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Reconciliation to Headline Results

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$m HF - 2014 HF - 2013

Headline profit before tax 3.9 3.5

amortisation of intangibles (2.3) (2.5)

Exceptional/restructuring costs - (1.4)

IFRS finance charges (0.4) (0.5)

Reported profit / (loss) before tax 1.2 (1.0)

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The Draft

Minor League Service

MLB Service

Arbitration

Free Agency

Post Career

Endorsements

3-5 years

Broadcasting

Coaching

Baseball player career path

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Sports on Earth Article - September 10, 2014

Masahiro Tanaka, Xander Bogaerts, Oscar Taveras and Gregory Polanco all have what it takes to be baseball's next stars. (Getty Images)

As this year's Hall of Fame class would attest, future stars don't always shine as rookies. In 1987, Greg Maddux was the worst starter on another last-place Cubs team, going 6-14 with a 5.61 ERA and a 1.638 WHIP that each would have ranked as the worst in baseball had he not fallen just short of qualifying.Meanwhile in Atlanta, another second-round pick from the 1984 draft spent his first summer in the big leagues getting battered. Tom Glavine went 2-4 in nine starts, with an ERA (5.54) and WHIP (1.748) not much different from Maddux's. Neither received a vote in the National League Rookie of the Year balloting --Benito Santiago was the unanimous winner -- but that didn't stop them from combining for 660 victories, six Cy Young Awards, a 1995 World Series title with the Braves and a joint induction in Cooperstown this July.With that in mind, we've decided to rank baseball's best dozen rookies based on their long-term impact. Not on how they've done this season -- just one of our top five picks is likely to garner a Rookie of the Year vote -- but on how good they'll be in the long run. We considered only players who have lost or are a lock to lose their rookie status in 2014, which is why Mariners right-hander Taijuan Walker and Cubs outfielder Jorge Soler aren't mentioned.

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1. Masahiro Tanaka, RHP, Yankees (age 25). He hasn't pitched since July 8, and he may or may not need Tommy John surgery. But even if Tanaka's elbow requires reconstruction, the track record suggests that he'll be able to reclaim the form that allowed him to go 12-4, 2.51 with a 135/19 K/BB ratio in 129 1/3 innings. The $155 million man's splitter might be the most unfair pitch in the world, and his fastball and slider aren't bad either.

2. Xander Bogaerts, SS/3B, Red Sox (age 21). After looking advanced well beyond his years while helping Boston win the 2013 World Series, he and the rest of the Red Sox have looked overmatched for much of this season. As disappointing as Bogaerts' performance has been, the most important number is 21 -- his age. He has hit much better when Boston has left him at his natural position, and he still has the bat speed and advanced approach to become a 30-homer shortstop who can provide average defense.

3. Oscar Taveras, OF, Cardinals (age 22). The consensus best pure hitter in the minor leagues before St. Louis called him up in May and again for good in July, he hasn't exactly taken the majors by storm. As with Bogaerts, it's important to remember that Taveras is young and loaded with ability. Big leaguers have used his ability to make hard contact on pitches outside the strike zone against him by getting him to chase more than he should, but once he settles down, he could develop into a future batting champion capable of providing 20-plus homers per season.

4. Gregory Polanco, OF, Pirates (age 22). He has the best all-around tools on this list and he probably should have been Pittsburgh's starting right fielder on Opening Day. Polanco only has two hits in 37 big league at-bats since Aug. 12, which has wrecked his rookie numbers, but before that he was showing glimpses of his above-average power and speed and he has done a reasonable job of controlling the strike zone. He's still a 25-25 man waiting to happen.

5. Javier Baez, 2B/SS, Cubs (age 21). His bat speed, power and aggressive approach all achieved near-legendary status in the minors, and they've all been on display since he arrived in Chicago in August. Baez has cooled off since going deep three times in his first three games, and he could finish with more homers than walks and more extra-base hits than singles while striking out in nearly half his at-bats. Though he'll have to make some adjustments at some point, he should contend for home run titles with fellow Cubs Kris Bryant, Anthony Rizzo and Soler.

6. George Springer, OF, Astros (age 24). Unlike the four position players ahead of him on this list, Springer has pretty much lived up to expectations as a rookie. Though he has been out since mid-July with a left quadriceps injury, he slugged 20 homers in half a season and showed he could be dangerous despite piling up strikeouts. His tools are quite similar to Polanco's, though the latter will be a bit more consistent at the plate because he makes more contact.

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7. Jose Abreu, 1B, White Sox (age 27). No, we're not ignoring the facts that he'll walk away with all of the Rookie of the Year awards or that numerous teams are kicking themselves for not topping Chicago's $68 million contract offer. Abreu has answered questions about whether his power would play at the major league level by producing consistently all season and 21 of his 33 homers have come away from hitter-friendly U.S. Cellular Field. The reasons he ranks only seventh on his list are that he's the oldest player and already in his prime, and that he's a first baseman and all of the other hitters mentioned are capable of playing up the middle.

8. Mookie Betts, OF/2B, Red Sox (age 21). After a lackluster pro debut in 2012, he broke out the following season and then greatly exceeded expectations again this year, reaching Boston inJune and posting the second-best OPS on the club (behind only David Ortiz). Betts doesn't have the same ceiling or thunder in his bat that the guys ahead of him on this list do, but he has a higher floor than many of them and surprising pop at 5-foot-9. He's a gifted hitter with mastery of the strike zone, plus speed and the defensive versatility to play several positions.

9. Marcus Stroman, RHP, Blue Jays (age 23). Michael Wacha wasn't the only college pitcher who fell further in the 2012 draft than he should have. Stroman, Duke's first-ever first-rounder, lasted 22 picks because too many clubs focused on his height (5-foot-9) rather than his electric stuff (headlined by a wipeout slider and a 92-96 mph fastball). He has been Toronto's best starter since he joined the rotation in late May, recording 13 quality starts in 18 tries and spinning a 93-pitch shutout against the Cubs on Monday, and that should continue going forward.

10. Yordano Ventura, RHP, Royals (age 23). In his first big league game last September, he threw a 102.8-mph fastball, the fastest pitch thrown by a starter in 2013. Ventura has continued to bring the heat this year, averaging an MLB-high 96.9 mph (according to Fangraphs) with his fastball. He has been as strong as ever in August and September, giving Kansas City a chance to end its 29-year playoff drought. If he can continue to improve his command and his secondary pitches, he'll be a frontline starter.

11. Kevin Gausman, RHP, Orioles (age 23). The first pitcher drafted in 2012 and the first starting pitcher from that class to make it to the majors, he struggled with Baltimore last season but has been critical to the team's efforts in all but locking up the American League East in 2014. Gausman has done a much better job commanding his stuff in his second year in the big leagues, pitching primarily off his mid-90s fastball and his splitter/changeup. It will be fun watching him duel Dylan Bundy for the distinction of the Orioles' No. 1 starter in coming years.

12. Billy Hamilton, OF, Reds (age 24). Though he still has a lot of work to do at the plate, the quickest player in the majors has had a solid rookie season. Hamilton has been a valuable defender in center field in only his second year playing the position, and he has stolen 55 bases -- a number that could easily double if he enhances his on-base ability and improves his reads and jumps. He already has set a career high with seven homers, but he needs to focus on making contact so he can wreak more havoc with his speed.

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Jim Callis is a contributor to Sports on Earth. He has been covering prospects and the draft since 1988, when he began the first of two long stints at Baseball America. He joined MLB.com and MLBPipeline.com in September 2013.