Steve Lacy, Chairman & CEO Jefferies 2012 Global TMT ... 2012 Global TMT Conference May 7, 2012...

1

Jefferies 2012 Global TMT Conference

May 7, 2012

Steve Lacy, Chairman & CEO

Joe Ceryanec, Chief Financial Officer

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 advertising revenues and investment

spending, along with the Company’s revenue and earnings per share outlook.

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 theresults 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.

2

Meredith Today

National Media: $1.1 Billion Local Media: $350 Million

WORKING YOUWSM V -TV WSM V-DT NASHVILL E

+ local media brands + marketing solutions+ national media brands

3

• 12 TV stations reaching 10% of U.S. households

• Top 25 markets of Atlanta, Phoenix, Portland

• Daily nationally syndicated show

• 100 million audience

• 40 million web visitors

• Growing licensing business

• Leading business-to-business marketer

� Leader in food, parenthood and home categories

� Reach 80%+ of American women

� Vibrant digital properties with 40 million unique visitors

� Powerful brand platforms, 3,000+ products at Walmart

Growing Consumer Audience & Capabilities

National Media Group

� Leading stations in fast-growing markets:

Atlanta Las Vegas Phoenix Portland

� Strong mix of network affiliations

� Expanding original news and syndicated programming

� Leading full service global digital agency


4

Local Media Group

Monetizing Audience Scale Across Platforms

Online: Meredith Women’s

Network & Allrecipes.com

Magazines: Home, Family,

Health & Well-being Meredith Xcelerated Marketing

Consumer Events Database Marketing

Video StudiosBrand Licensing

Local Media


5

Tablet/Mobile

� Doubled market share to 11.1% of total magazine advertising

� Added younger women brands – American Baby, Parents, Fitness

� Developed brand licensing business – BHG at Walmart

� Enhanced digital platforms – websites, tablets, mobile

� Created leading B2B marketing agency with digital, social, mobile,

Past Success: Meredith 2001-2011



� Hired industry-leading management team

� Doubled news programming to 420 hours per week

� Significantly grew political advertising, retransmission fees

� Launched Meredith Video Studios

� Created leading B2B marketing agency with digital, social, mobile, database, healthcare and international marketing capabilities

6

Local Media Group

� Investing in these growing audiences

across media platforms

Aggressively expanding digital,

Key market trends Meredith response

Meredith Prepared to Capitalize on Key Trends

� Young adults and upscale Baby

Boomers are fastest growing

demographics

Younger audiences consume media

7

� Aggressively expanding digital,

video, tablet and mobile platforms

� Investing in leading capabilities in

both the U.S. and abroad


� Younger audiences consume media

on the move and more visually

� Global clients looking for multi-

platform marketing solutions

� Leadership in branded multi-platform content

� Aggressively executing broad digital strategy

� Expanding brand licensing program

� Leader in providing digital marketing solutions

� Roster of high-growth global clients

Strategic Vision for Meredith in 2015



� Ratings leadership in local markets

� Digital and mobile platforms of scale

� Growing non-traditional revenues

� Roster of high-growth global clients

� New marketing capabilities in fast-growing disciplines

8

Local Media Group

� Acquired Allrecipes.com

� Purchased EveryDay with Rachael Ray and FamilyFun

� Launched Meredith Engagement Dividend

� Extended licensing agreement with Walmart through 2016

� Invested in Iris Worldwide


Strong Progress in FY12 Toward 2015 Vision


� 10 quarters of year-over-year non-political revenue growth

� Launched Digs Channel on YouTube

� Renewed The Better Show for 6th season

9

Local Media Group

Corporate

� Increased dividend 50% to $1.53, producing 5% yield

� Authorized $100 million for share repurchases

Meredith Key Initiatives

� National Media Group

— Implementing expanded food strategy

— Growing brand licensing

— Maximize Meredith Xcelerated Marketing

— Executing digital strategy

+ local media brands + marketing solutions+ national media brands + local media brands + marketing solutions+ national media brands

10


— Executing digital strategy

� Local Media Group

— Growing advertising revenues

— Growing retransmission revenues

— Expanding digital and mobile platforms

Allrecipes.com: Key Statistics

� General

− #1 recipe site in the U.S. and world

− 25m monthly unique visitors

− #1 food recipe channel on YouTube

− #1 downloaded Android, iPhone and iPad recipe applications


11

11+ local media brands + marketing solutions+ national media brands

iPad recipe applications

� Community

− 44m pieces of content created in 2010

− 4.6 million email subscribers

� Historical Growth Rates

− Revenue 20%+

− Operating Profit 30%+

Meredith + Allrecipes.com

1 Meredith Food Sites 27,960 1 Glam Media 86,616

2 Food Network 19,711 2 Meredith Women’s Network 39,586

3 About.com Food 12,396 3 iVillage.com: The Women’s Network 36,410

4 COOKS.COM 11,286 4 Shine 30,993

5 FOOD.COM 10,099 5 AOL Lifestyle 27,256

6 BlogHer Food 9,067 6 eHow Lifestyle 25,692

7 PlateFull 8,370 7 Conde Nast Digital 24,367

8 URBANSPOON.COM 7,070 8 Sheknows 24,072

Food Lifestyle


12

8 URBANSPOON.COM 7,070 8 Sheknows 24,072

9 MyRecipes Network 6,777 9 About.com Lifestyle Network 21,399

10 Delish 6,487 10 Disney Lifestyle 20,717

11 FoodBuzz 6,413 11 Hearst Digital Media 19,356

12 Sheknows Food 5,741 12 Sugar, Inc - PopSugar Network 10,741

13 eHow Food and Drink 5,549 13 MSN Lifestyle 8,705

14 Taste of Home 5,064 14 Martha Stewart Sites 6,918

15 EPICURIOUS.COM 4,809 15 New York Media 6,033

16 Chow 4,714 16 CNN Living 5,319

17 KitchenDaily Food Group 4,673 17 XO Group Inc. 5,008

18 Gourmandia.com 4,214 18 AARP Sites 4,842

19 KRAFTRECIPES.COM 3,320 19 Real Simple Home and Lifestyle 4,835

20 iFOOD.TV 3,264 20 Lifetime Digital 3,783

Unique visitors; Source: ComScore Dec. 2011


Increasing Website Audience

2226

304045

50

60CAGR 38%


In millions. Numbers from comScore.

12 1420 22 25 30

2022

FY10 FY11

Existing Meredith Sites Allrecipes.com


FY12Target

13

FY13Target

FY14Target

FY15Target

Growing Online Consumer Transactions

4.0

5.0

CAGR 44%

+ local media brands + marketing solutions+ national media brands + local media brands + marketing solutions+ national media brands + local media brands + marketing solutions+ national media brands

0.81.4

2.0

3.0

4.0

FY10 FY11 FY12 FY13 FY14 FY15

14

Incremental profit $10 $25 million

Tablet Growth Strategies

� Opportunity to improve magazine economic model

� Aggressively promote via:

— Meredith’s 85-million name database

— Advertising across Meredith portfolio

Growing Base of Tablet Users


— Email campaigns to subscribers

— Social media marketing


15

Deliver 10% of circulation on tablet platform by FY15

� Strengthen our core businesses

— Expand in fast-growing advertising categories

� Scale our digital and video capabilities

Our Focus: Drive Growth and Return Cash


� Expand diversified sources of revenue

� Execute acquisitions and investments

� Return more cash to shareholders


16

TSR (%)

15 13-14%

S&P 500 TSR Benchmarks – expected returns

Meredith’s Goal: Approach Top Quartile TSR

5

10

0

7-8%

S&P 500 Median TSR S&P 500 top quartile TSR

Multiple sources including BCG Investor Survey and Value Line


17

3 Steps to Delivering Strong TSR

Earnings Growth• Revenue growth• Margin improvement

• Investments in business

1.


Free Cash Flow Yield

Change in Valuation

• Investments in business• Dividends• Share repurchases

2.

3.• Growth expectations• Performance consistency• Financial policies• Portfolio changes

18

FY2015Estimated

Revenue Growth

$ 130-210

Putting Growth Strategies into Investor Context

� National Media Group— Implementing expanded food strategy


— Execute digital strategy


$ 150-250

20-40

2-4%

1919


TOTALCAGR

Compared to fiscal 2011 results; $ in millions


� Local Media Group— Growing advertising revenues



FY2015Estimated Operating

Profit Growth

$ 30-65

Putting Growth Strategies into Investor Context

� National Media Group— Implementing expanded food strategy


— Execute digital strategy


$ 40-85

10-20

2020


4-8%

TOTALCAGR

Compared to fiscal 2011 results; $ in millionsBefore Corporate Expenses


� Local Media Group— Growing advertising revenues



Earnings Growth• Revenue growth• Margin improvement

• Investments in business

1.

Step 2 to Delivering Strong TSR: FCF Yield



Change in Valuation

• Investments in business• Dividends• Share repurchases

2.

3.• Growth expectations• Performance consistency• Financial policies• Portfolio changes

21

2.

Strong Free Cash Flow Generation: 2002-2011

$165 $168

$226

$157 $167

$185

5.6% CAGR

Strong Free Cash Flow Generation: 2002-2011

$113 $134 $138 $147

$165 $157

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

$ in millions 22


History of Returning Capital to Shareholders

$551 $604

New $100 million

authorization

$0.97

$1.53

50% increase

5% yield

23


$30

$197

FY02 FY05 FY08 FY11 FY12

$0.35

$0.52

$0.80

FY02 FY05 FY08 FY11 FY12

Annual Dividends Stock Buybacks (cumulative)

$ in millions

Cash Flow and Strategic Uses

FY 2009 FY 2010 FY 2011 FY 2011

Operating cash flow $ 181 $ 192 $ 215 $ 215

Capital expenditures (24) (25) (30) (30)

Free cash flow $ 157 $ 167 $ 185 $ 185

Pro Forma


Free cash flow $ 157 $ 167 $ 185 $ 185

Dividends (40) (41) (44) (63)

Debt change (105) (80) (105) 180

Acquisitions (6) (8) (40) (250)

Cash available for: $ 6 $ 38 $ (4) $ 52

• Additional acquisitions• Share repurchases• Additional debt service

24$ in millions

Revenue growth 2 – 4%Net margin expansion 2 – 4%Net income Growth 4 – 8%

1.

2.

Earnings Growth

Free Cash Flow YieldDividend yield 4 – 5%Buyback yield 2%1

Meredith’s View of Total Shareholder Return

1.Based on timing of share repurchase plan and actual share price.Note: There is a strong commitment to maintaining this dividend payout level. The range in dividend yield results from the expected variance in share price.


2.

3.


Change in ValuationOther potential TSR contributors• Acquisition accretion TBD• PE Multiple Change TBD

Buyback yield 2%Net debt change (0)%FCF contribution 6 – 7%

Annual TSR (%) 10 – 15%

25

Fiscal 2012 Earnings Per Share Outlook

$0.63 to $0.661Fourth quarter


26

$0.63 to $0.66

$2.47 to $2.502Full year

1. Includes dilution related to Allrecipes.com

2. Includes dilution related to Allrecipes.com and excludes special charges

� Powerful media and marketing company with trusted national brands and an unrivaled female reach

� Portfolio of highly-rated television stations in fast-growing markets

� Leading full-service digital marketing agency

Strong Investment Thesis

� Experienced management team with a proven record of operational excellence and value creation through strategic acquisitions

� Strong stewards of capital committed to balancing growth and returning cash to shareholders

� Current dividend yield at approximately 5 percent


27

Targeting 10-15 percent annual Total Shareholder Return

28

Jefferies 2012 Global TMT Conference

May 7, 2012

Steve Lacy, Chairman & CEO Jefferies 2012 Global TMT ... 2012 Global TMT Conference May 7, 2012...

Documents

Transcript of Steve Lacy, Chairman & CEO Jefferies 2012 Global TMT ... 2012 Global TMT Conference May 7, 2012...