An Introduction to Hyve Group plc - May 2020
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An Introduction
to Hyve Group plc
May 2020
We are Hyve 2019 financial and operational highlights
£220.7m £50.4m 7% +14 +28
We are a next generation global events business creating unmissable events, where like-for-like Top 10 exhibitor Top 10 visitor
customers from all corners of the globe share extraordinary moments and shape industry revenue headline profit NPS (vs. industry NPS (vs. industry
revenue
before tax average -17)* average +7)**
innovation. growth
Our vision is to create the world’s leading portfolio of content-driven, must-attend events * Source: UFI & Explori, Global Exhibitor Insights, November 2017 edition ** Source: UFI & Explori, Global Visitor Insights, 2018/19 edition
delivering an outstanding experience and ROI for our customers.
Revenue by division
Where business is personal, where meetings move markets and where today’s leaders
inspire tomorrow’s. Global Brands 31%
Russia 25%
130+ in 14 1,200+ in 13 FY UK 20%
events countries colleagues countries
19 Asia
Central Asia
9%
8%
Eastern & Southern Europe 8%
This is based on the enlarged group pro-forma FY19 revenue by region including Shoptalk and Groceryshop (acquired December2019)
100+ 50 - 100 1 - 50 Our leadership team
India China Azerbaijan
Russia Kazahkstan Brazil
UK Turkey Indonesia
Ukraine UAE
USA
Uzbekistan
Mark Shashoua Andrew Beach
Chief ExecutiveOfficer Chief Financial Officer / 2
Recent acquisitions Revenue by sector Advanced Technologies 3%
Beauty & Healthcare 4%
Shoptalk Build & Interiors 15%
▪ 8,000+ attendees Grocery shop 6%
Connect
▪ Becomes our #1 ▪ 2,200+ attendees
event by revenue ▪ Becomes our #9 E-Commerce 11%
▪ +50 attendee NPS event by revenue FY 4%
Energy
▪ +42 attendee NPS
19 Education
Fashion
7%
7%
Food & Packaging 12%
Our top 10 events (based on FY19 pro-forma revenue)
Manufacturing Industrial Tech 7%
Retail 13%
Transport & Logistics 7%
1. 2. 3. 4.
Travel & Tourism 4%
This is based on the enlarged group pro-forma FY19 revenue by region including Shoptalk and Groceryshop (acquired December2019)
5. 6. 7.
8. 9. 10.
Talk to us
LinkedIn: Hyve Group plc
Instagram: @hyve_group
Twitter: @hyve_group / 3
Facebook: HyveEvents
YouTube: Hyve Group plc
Contents
› Our Senior Executive team p3
› Our business model p4
› Market overview p7
› 2017 strategic review p10
› Transformation delivered p18
› TAG financials p30
› FY19 results p39
› Appendices p46
Introduction to Hyve Group plc – May 2020 / 4
Our Senior Executive Team
Mark Shashoua – Chief Executive Officer Andrew Beach – Chief Financial Officer
› Appointed CEO in September 2016 › Appointed CFO in October 2016 and is Chairman of
› Previously CEO of i2i Events Group, (events arm of Hyve’s Risk Committee
Ascential) from 2011, led the professionalisation › Previously the Chief Financial and Operating
and diversification of the business, turning it from Officer of Ebiquity plc, spent nine years overseeing
double-digit CAGR decline to one of consistent the rapid expansion of the business to 20 offices in
organic CAGR growth 14 markets, employing over 900 staff
› Second-generation and prominent figure in the international events › Prior to joining Ebiquity, he spent nine years at PwC as part of the
industry Entertainment and Media assurance practice where he qualified as a
› From 2001, he was a co-founder and Chief Executive Officer of Chartered Accountant (ICAEW) in 2000
Expomedia Group Plc and from 2009-2011, Mark was the operating › Andrew headed up the PwC UK Publishing sector knowledge network
partner of Advent International, a leading private equity fund and managed a portfolio of large media clients
› One of the founding members of the Hyve group (then ITE) which
grew organically from 3 people to over 800 and 80 shows. He led the
floatation of the business in 1998 as CEO, and was a board director
until 1999.
Introduction to Hyve Group plc – May 2020 / 5
Our business model
Introduction to Hyve Group plc – May 2020 / 6
Our business model
Connecting people
EXHIBITORS VISITORS
use our events to satisfy all come to our events to
of their marketing needs: learn, experience, develop
to transact, market their their skills,
brand, launch a product, find inspiration, meet new
educate the sector, deploy contacts or buy products.
thought leadership or
steer their industry.
Hyve Group provides market-leading , face-to-
face platforms where communities can come
together to achieve all of this within a high-
quality exhibition experience.
Introduction to Hyve Group plc – May 2020 / 7
Our business model
Revenue streams managed the Hyve way
Our revenue is generated through multiple streams We do things the Hyve way so exhibitors, visitors and
sponsors choose us
83% of our revenue is generated from exhibitors, with each exhibitor
paying for floor space at an event, and many taking technical services
(such as stand construction and furniture).
Usually, visitors attend for free (with a few exceptions). Some events
benefit from sponsorship revenue. MARKET- CONTENT- MUST- OUTSTANDING RETURN ON
LEADING: DRIVEN: ATTEND: CUSTOMER INVESTMENT:
We focus on We supply We offer the EXPERIENCE: Our customer
market-leading thought- best of We have a success team
events, so that provoking everything to relentless focus makes sure
12% Exhibitor space we have the content that ensure we are on improving exhibitors
5% highest value attracts high the one event every part of achieve their
7% Technical services proposition quality visitors that our the customer event goals so
for exhibitors and raises the customers experience and that they come
and visitors profile of our choose to put tailoring our back next time
Sponsorship events in their communication
76% calendars with them
Other (incl delegates & hosted meetings)
Introduction to Hyve Group plc – May 2020 / 8
Market overview
Introduction to Hyve Group plc – May 2020 / 9
Market overview
Overview of the events industry
Competition Top 10 international organisers by
organising revenues, 2018, million USD1
› M&A consolidation in traditional event Informa 1976
organisers
Reed Exhibitions 1625
› New market entrants focussing on sectors Messe Frankfurt 678
which are being disrupted
Clarion 456
› Online business communities and DIY meet-up Comexposium 424
platforms challenging the traditional model
Messe Munich 369
› Impact of new technologies - augmented Messe Dusseldorf 307
reality, facial recognition, improved analytics
Hyve 234 2
tools provide opportunities to increase
Deutsche Messe 229
engagement, create better products and drive
better ROI and ROT for customers GL Events 184
1 Source: Organiser’s financial reports; AMR International, Globex 2019
2 Pre acquisition of Ascential, Mining Indaba and Shoptalk/Groceryshop. Introduction to Hyve Group plc – May 2020 / 10
FY19 result approx. $285mMarket overview
Global exhibition market forecast
› Steady growth is forecast (4% CAGR to Overall market forecast 2018-2023, $b1
2023), driven by stable underlying
economies and consistent demand for face- 4%
CAGR
to-face business interactions
› AMR International predict that face-to-face
interactions enabled by exhibitions will
remain a critical channel for buyers and 32.2 34.0 35.3
29.6 31.0
sellers 28.5
› They further predict that alternative online
channels will remain complementary, and
may become sources of enhanced visitor 2018 2019 2020 2021 2022 2023
and exhibitor experience.
1 Market size represents the size of the 14 main geographic markets analysed by AMR International and the six SEA countries added in 2017
Excludes ‘Rest of the World’
Introduction to Hyve Group plc – May 2020 / 11
Source: AMR International, Globex 20192017 strategic review
Introduction to Hyve Group plc – May 2020 / 122017 strategic review
Historical context prior to TAG programme
Revenue decline and unsustainable margins Changing customer expectations
-11%
CAGR › Exhibitors demand Return on Investment
£192m
£175m
£136m £134m › Visitors demand Return on Time
› Greater emphasis on learning and
networking within a business community
31% 35% 36% 29%
FY13 FY14 FY15 FY16
Headline operating profit Costs
Introduction to Hyve Group plc – May 2020 / 132017 strategic review
Portfolio challenges prior to TAG programme
Event performance vs underlying market
Hyve Event Space Growth (%), 2014-16 CAGR
› The portfolio had additional 100%
90%
Outperforming
Underlying Market Growth (%), 2014-15
challenges beyond market conditions the market
80%
70%
60%
50%
40%
› A number of events had 30%
20%
underperformed the market 10%
0%
-50.0 -40.0 -30.0 -20.0 -10.0 -10% 0.0 10.0 20.0 30.0 40.0 50.0
-20%
› There were some obvious stars -30%
-40%
to offset these challenges -50%
-60%
Underperforming
-70%
-80%
the market
-90%
-100%
Introduction to Hyve Group plc – May 2020 / 142017 strategic review
The May 2017 Portfolio: Events Ranked by Revenue
85%
Core Events Revenue
Introduction to Hyve Group plc – May 2020 / 152017 strategic review
Philosophies
Market leading Customer insight
events – ROI / ROT and data
Content-led –
Customer service
high on relevance
Strong sales and
Retention-led
marketing
business enabled
performance
by technology
based culture
Introduction to Hyve Group plc – May 2020 / 162017 strategic review
Hyve view of the exhibitions industry
Product-led
Global Portfolio
Regional
Players
Emerging Markets Specialists
Developed Market Regional Specialists
Disrupters of Existing Shows
(show formats or industry niches)
Introduction to Hyve Group plc – May 2020 / 172017 strategic review
Our vision
“To create the world’s leading portfolio of
content-driven, must-attend events
delivering an outstanding experience
and ROI for our customers.”
Introduction to Hyve Group plc – May 2020 / 182017 strategic review
Transformation and Growth programme
TAG Programme
Create a Manage Product-led
Scalable Platform the Portfolio Acquisitions
Underpinned by a performance-led culture
Introduction to Hyve Group plc – May 2020 / 19Transformation delivered
Introduction to Hyve Group plc – May 2020 / 20Transformation delivered
Scalable operating model created
Created best practice functions & teams
Invested in show operations
Built capability & talent
Drove a performance culture
Built fit-for-purpose IT infrastructure & systems
Introduction to Hyve Group plc – May 2020 / 21Transformation delivered
Strengthened KPIs from our Top 10 TAG events
New customer service New high quality Systematic lead
team helps exhibitors content attracts generation drives
maximise success key visitors growth
Exhibitor NPS (FY16-19) Visitor NPS (FY16-19) New business (FY18-19)
increased from +3 to +14; increased from +14 to +28; increased by >25%
industry average is -17* industry average is +7**
* UFI & Explori, Global Exhibitor Insights, November 2017 Edition
Introduction to Hyve Group plc – May 2020 / 22
**UFI & Explori, Global Visitor Insights, 2018/19 EditionTransformation delivered
Managing the portfolio
Higher Event Quality & Potential Lower
Growth Mature Challenged 89 less profitable
Market tailwind Stable, mature market Facing market or
shows discontinued
competitive threat
since start of TAG
Large
>£1.0m revenue Use full suite of Pricing, show value Manage pro-actively,
Top
transformational and content to drive solve issues across priority Successful disposal of
levers yield and retention commercial, content TradeLink, ECMI and
and operations ITE Expo (Russian non-
Enable sales & core)
Core
Scale
Medium
marketing to drive priority
Medium volume growth
£0.5m-£1.0m revenue Continue to review all
Invest in content and options for less
Non-Core Low
shows to drive great priority
profitable shows
Small customer experience Onsite re-booking, sales commissionsTransformation delivered
Integration of FY18/19 acquisitions now complete
Reinvesting half of the synergies to drive future growth
Re-edit events to improve customer experience
Focus on key accounts
Integration Grow international events to scale
Launch hosted buyers programme
Investigate new markets over the longer term
Synergies
Sector expansion in Germany
Grow international events to scale in China
Launch hosted buyers programme
Investigate new markets over the longer term
Investment
plans Re-edit events and add new sectors
Visitor acquisition teams to target online and major chains
1
Focus on customer proposition between events
Operational integration with Africa Oil Week
1 Moda was an existing Hyve event Introduction to Hyve Group plc – May 2020 / 24Transformation delivered
Targeted trajectory for FY18/19 acquisitions
Investment
plans
Division Acquired events FY19 FY20 FY21
UK Ascential events Inherited trajectory Stabilise Grow
Global Brands Ascential events Inherited trajectory Grow Grow
Global Brands Mining Indaba Inherited trajectory Grow Grow
Introduction to Hyve Group plc – May 2020 / 25Transformation delivered
FY20 acquisitions
› Acquisition of Shoptalk and Groceryshop: market leading events focused on e-commerce and food / grocery segments
Acquisition of › Both shows in the US (Las Vegas), with opportunities for geo-cloned shows in Europe
two leading, › Established and run by the founders of Money 20/20 and the management team is well known to Hyve
high growth › 2019E Revenue: $35.8m, CAGR 2016-2019E of 90%; EBITDA $12.2m(1)
events › Strong visibility of revenues for FY20, with bookings for both Shoptalk and Groceryshop ahead of FY19 (2)
› Key sponsors include Google, Facebook and Microsoft
› Product-led acquisition, consistent with the Transformation and Growth (“TAG”) programme
Compelling
› Capitalising on high growth end markets
strategic and › Market leading products with strong customer satisfaction, shown through strong NPS of +50 (Shoptalk) and +42 (Groceryshop)
financial › Opportunity for Hyve to use best of breed model in hosted buyer and content creation
rationale › Expected to be materially earnings enhancing in Hyve’s FY21(3) and ROIC(4) in excess of WACC within 3 years
› Consideration and enterprise value of c. $145m (c. £108.8m(5)), equating to 11.9x 2019 adjusted EBITDA(1)
Transaction › Funded through the refinanced debt facility and the placing of Hyve shares (10% of existing share capital)
overview › Founders – Anil and Simran Aggarwal and certain vendors subscribed for $15m of Hyve shares
› Leverage(6) expected to be below 2x by FY20 financial year end
(1) Estimated for year to 31 December 2019, although both events have been held and therefore revenue is an actual figure; unaudited based on diligenced management
account information. EBITDA has been prepared by the company on the basis of Shoptalk/Groceryshop management account information and validated by PwC. EBITDA
has been calculated to reflect a corporate rather than partnership structure
(2) Company-provided sales data as at December 2019 Introduction to Hyve Group plc – May 2020 / 26
(3) Analysis has assumed an exchange rate of £1 : $1. 33
(4) ROIC defined as net operating profit after tax divided by total deal costs (being consideration paid, integration costs, fees, placing commissions and refinancing fees)
(5) Exchange rate of £1 : $1.33 as at 13 December 2019Transformation delivered
Have delivered a strong portfolio of market-leading events
Manage the portfolio
May 2017 May 2020
No. of events 269 133 51%
Revenue £134m3 £256m4 91%
89
Revenue per event £0.5m £1.9m 280%
Product-led acquisitions
269 65
events 18
133
events
May 2017 1 Closed Divested Acquired 2 May 2020
1 Launch of TAG, May 2017
2 Includes one new launch
3 FY16 reported revenue
Introduction to Hyve Group plc – May 2020 / 27
4 FY20 market consensus pre COVID-19 impactTransformation delivered
A more balanced geographical footprint
FY17 Revenue Global
FY19 Proforma Revenue1
Brands
12%
UK 20%
Global
31% Brands
16% Asia
Russia 47% (incl. 12% US)
Russia 25%
14% 9%
Central
Asia 8%
Asia
11% 7%
ESE ESE Central Asia
1 Including Shoptalk and Groceryshop Introduction to Hyve Group plc – May 2020 / 28Transformation delivered
Returned the business to sustainable growth
Revenue and headline operating profit
TAG
-11% +18% £221m
CAGR CAGR
£192m
£175m £176m
£153m
£136m £134m
31% 35% 36% 29% 23% 22% 25%
FY13 FY14 FY15 FY16 FY17 FY18 FY19
Headline operating profit Costs
Introduction to Hyve Group plc – May 2020 / 29Transformation delivered FY19
MosBuild
TAG improvements since FY16
› MosBuild moved to Crocus Expo,
Russia’s largest venue, from 2019
› Much improved content
programme with Perfect Home, VR FY19
design lab and MosBuild TV
› Volume up >50%
› Exhibitor NPS up from -7.0 to +8.3
› Visitor NPS up from +7.0 to +26.0
Introduction to Hyve Group plc – May 2020 / 30Transformation delivered
Breakbulk Europe
TAG improvements since FY16
› 37% more space sold FY16
› Visitor NPS improved from +8 to +28
› Revenue per exhibitor up 55%
› Overall revenue up 67%
Introduction
Introduction to Group
to Hyve Hyve Group plc – May 2019
plc – December 2020 / 31
FY19Transformation delivered FY16*
Africa Oil Week
TAG improvements since FY17*
› Delegate NPS (FY18-19)** improved
from +18 to +32
FY20
› Paid delegates (FY17-19) up 33%
› Overall revenue (FY17-19) up 40%
*Hyve took full ownership of AOW in May 2017, i.e. FY17
Introduction to Hyve Group plc – May 2020 / 32
**Delegate NPS figures first recorded in FY18TAG financials
Introduction to Hyve Group plc – May 2020 / 33TAG financials
One-off TAG programme investment
Plan FY17 £6-7m FY18 £8-10m FY19 £4-6m
£20m
FY20
Actual FY17 £5.0m FY18 £7.0m FY19 £4.2m forecast
£3.8m
One-off Costs Mix Investment by Transformation Lever
Best Practice Infrastructure & Invest in Show Performance Culture Capability & Talent
Capex Opex - Exceptional Systems Operations
Introduction to Hyve Group plc – May 2020 / 34TAG financials
Ahead of plan on all TAG investment targets
Target Original plan Revised Status
Positive ROI FY20 FY19 Delivered early
ROI > WACC FY21 FY20 Ahead
Cash payback FY21 FY21 Ahead1
1 Original plan delivery expected H2 FY21; revised to H1 FY21 Introduction to Hyve Group plc – May 2020 / 35TAG financials
“Create a scalable platform” targets ahead of plan
1 Plan Within 3 years (FY20)
In-year net operating profit after tax (“NOPAT”) Positive ROI
Update Within 2 years (FY19)
Positive ROI
in FY 2019
2 Plan Within 4 years (FY21)
ROI > WACC1
Update Within 3 years (FY20)
3 Plan Within 4 years (FY21)
FY17 FY18 FY19 FY20 FY21 FY22
Cash Payback
TAG plan Update
Update Within 3.5 years (FY21)
1 Based on May 2017 WACC Introduction to Hyve Group plc – May 2020 / 36TAG financials
Industry-leading growth after years of decline
£240m
£221m
£220m
£200m £192m
£175m £176m
Revenue £180m
£160m £153m
£140m
£136m £134m
£120m
FY13 FY14 FY15 FY16 FY17 FY18 FY19
LFL growth / (decline) -10% -12% -8% +5% +11% +7%
Introduction to Hyve Group plc – May 2020 / 37TAG financials
Sustainable margins
40%
TAG investment period
36%
35%
35%
City consensus 1
31%
30% 29%
Reinvestment
Operating 27%
profit 26%
margin
25%
25%
23%
22%
20%
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
1 Pre COVID-19 impact Introduction to Hyve Group plc – May 2020 / 38TAG Financials
Net debt within guidance Average cash
2.5
conversion
TAG corridor 1.5x – 2.0x FY17-19
> 100%
2.0
2.0 City consensus1
1.9
1.5
Net debt : 1.4 1.4
EBITDA 1.3
1.0
1.0
0.5
FY16 FY17 FY18 FY19 FY20 FY21
1 Pre Shoptalk/Groceryshop acquisitions and pre COVID-19 impact Introduction to Hyve Group plc – May 2020 / 39TAG financials
Operational delivery of TAG
FY19 FY16 Variance
1
Average yield (per SQM) – TAG £252 £187 +35%
1
Yield Average yield (per SQM) – Total £225 £183 +23%
Yield growth versus inflation +3% -13% +16pp
Revenue Onsite rebook 47% 0% >100%
visibility Forward bookings 62%2 53%3 +9pp
Sales Revenue per employee £177k £95k +86%
performance Revenue per exhibitor
4
£7.4k £6.0k +23%
1 LFL event revenue / LFL sqm (excluding AOW conference)
2 For FY20 at 1 Oct 2019
3 For FY17 at 1 Oct 2016 Introduction to Hyve Group plc – May 2020 / 40
4 TAG events excluding AOW conferenceTAG financials
On track to deliver our 3-year guidance pre COVID-19
FY18 FY19 FY201
Revenue growth
Margin growth
EPS growth
1 Pre COVID-19 impact Introduction to Hyve Group plc – May 2020 / 41FY19 results
(12 months to 30 September 2019)
Introduction to Hyve Group plc – May 2020 / 42FY19 results
FY19 highlights
FY19 FY18
Revenue £220.7m £175.7m LFL growth 7%
Headline PBT £50.4m £35.4m LFL growth 16%
Operating profit margin 25.3% 22.0% Increase of 3.3pp
one-off £4.2m £7.0m
TAG costs Within guidance
ongoing £8.0m £7.5m
Net debt £111.7m £82.7mFY19 results
Revenue bridge
(£5.3m)
(£2.3m)
£10.7m
£47.9m
(£6.0m)
£220.7m
£m £m £m
£175.7m TRY (1.4) Russia 6.6
Ascential/
62.5
Mining Indaba RUB (0.8) AOW 1.2
ITE Expo (Russia)/ INR (0.5) Breakbulk 0.6
(14.6)
Central Asia/Other Other 0.4 Other 2.3
FY18 Net Biennial Acquisitions Launches & FX Impact Underlying FY19
& Timing & Disposals Cancellations Trading
Introduction to Hyve Group plc – May 2020 / 44FY19 results
Top 10 TAG events drove higher revenue growth
25%
Top 10 TAG
Rest of portfolio
LFL growth LFL growth Average yield Average yield
Top 10 TAG TOTAL Top 10 TAG TOTAL
13% 7% £309/sqm1 £266/sqm1
1 Total group revenue / total group sqm (excluding AOW and Mining Indaba conferences) Introduction to Hyve Group plc – May 2020 / 45FY19 results
Headline PBT bridge
(£0.5m)
(£4.2m) £4.7m
£15.4m
(£0.4m)
£50.4m
£m
£35.4m £m
Revenue Translational (2.3)
Ascential/
17.6 Cost Translational 1.5
Mining Indaba
Translational (0.8)
ITE Expo (Russia) /
(2.2)
Central Asia / Other Transactional (B/S) (3.4)
FY18 Net Biennial Acquisitions Launches & FX Impact Underlying FY19
& Timing & Disposals Cancellations Trading
Introduction to Hyve Group plc – May 2020 / 46FY19 results
Financial summary
Strong LFL revenue
Step change towards
growth; Top 10 TAG
sustainable operating
events double-digit
margins
growth
Profit growth
significantly above Excellent FY20
revenue growth revenue visibility
Introduction to Hyve Group plc – May 2020 / 47Appendices
Introduction to Hyve Group plc – May 2020 / 48Appendices
Revenue by sector
Build & Interiors
Retail FY19 proforma1 FY17
Food & Packaging
4% 3% 6%
E-commerce 4% 15% 6%
Education Technology
4% 28%
8%
Fashion 6%
13%
Manufacturing Industrial Technology
7% 10%
Transport & Logistics
Connect 7% 3%
12%
Energy 7% 16%
7%
Travel & Tourism
7% 11% 9% 7%
Beauty & Healthcare
Advanced Technologies
1 Including Shoptalk and Groceryshop Introduction to Hyve Group plc – May 2020 / 49Appendices
Top 10 events by revenue
December 2019 May 2017 (launch of TAG)
Event name Region Event name Region
Shoptalk US MosBuild Russia
Spring Fair UK WorldFood Moscow Russia
MosBuild Russia MITT Russia 35%
45%
BETT (London) Global Brands Aquatherm Moscow Russia
WorldFood Moscow Russia TurkeyBuild E/S Europe
Autumn Fair UK Acetech Mumbai Asia
CWIEME Berlin Global Brands MIOGE Russia
Mining Indaba Global Brands RosUpack Russia
Top 10 Rest of portfolio Top 10 Rest of portfolio
Groceryshop US YugAgro Russia
MITT Russia Breakbulk Europe Global Brands
Introduction to Hyve Group plc – May 2020 / 50Appendices
Cost analysis Total costs in FY19
(excluding interest and tax, including depreciation)
£174m
Total cost base Cost base by flexibility Cost by type
20% 30% 25%
overheads variable costs fixed costs 40% 35%
other costs staff
80%
cost of
running 45%
events semi-
variable
costs*
25%
venue
*Semi-variable costs include costs that over time could be flexed to changes in revenue but wouldn’t in the short term
Introduction to Hyve Group plc – May 2020 / 51
(e.g. venues with minimum contractual commitment)Appendices
Current debt profile
Refinance – December 2019
Facility
Committed Drawn Repayments Interest Existing Financial Covenants
£m
£17.5 November 20
£17.5 November 21
Term 100 100 £20.0 November 22 › Leverage Ratio of net debt to adjusted EBITDA ≤3x
£22.5 November 23 LIBOR + Margin (1.90-2.90%) › Interest Cover Ratio of EBITDA to net finance charges ≥4x
£22.5 December 23 determined by the Leverage Ratio › Tested every quarter from 30 June 2020
Amounts can be repaid, redrawn or
Revolver 150 150 rolled for periods of 1, 3, or 6 months
up to maturity
Total 250 250 Maturity : December 2023
Waiver – May 2020
Waiver detail
› Suspends the existing financial covenant tests for all periods up to and including March 2022
› Defers the November 2020 and November 2021 repayments to maturity (December 2023)
Waiver conditions
› Replaces existing financial covenants with a minimum liquidity covenant: combined cash and undrawn facilities must be at least £30m or £40m (depending on the month), tested monthly
› Existing financial covenants will still be reported every quarter but not tested
› Interest margin increased to 3.40% but original ratchet levels still apply based on above financial covenant reporting every quarter
› Insurance and disposal proceeds to be applied to any deferred repayments providing such deferred repayments are overdue from the original repayment date (maximum £35m)
› Certain acquisition, disposal and dividend restrictions
Normalisation
› The Group may at any time in its sole discretion nominate to revert to the original terms by reinstating the existing financial covenant testing and repayment dates, and immediately settling any deferred repayments that are overdue from
the original repayment date
› All waiver conditions will be cancelled once normalisation occurs
Introduction to Hyve Group plc – May 2020 / 52Appendices
Consensus forecast pre COVID-191
Consensus Minimum Maximum
2020
Turnover (£m) 256.2 255.1 257.2
Headline profit before tax (£m) 61.6 61.3 62.1
Headline diluted EPS (pence) 5.5 5.4 5.5
Net debt (£m) 144.3 142.6 147.0
2021
Turnover (£m) 272.4 271.0 274.9
Headline profit before tax (£m) 69.7 68.8 71.3
Headline diluted EPS (pence) 6.1 6.0 6.3
Net debt (£m) 120.4 115.8 124.2
1 Based on analyst forecast reports to 9 March 2020 Introduction to Hyve Group plc – May 2020 / 53Appendices
Shareholder structure as at 24 April 2020
Country of Shareholder % of Total Shares No. of Shares (millions)
RWC Partners UK 12.5 102.3
BlackRock UK, USA 7.9 64.7
Brandes Investment Partners USA 7.9 64.5
Fidelity Management & Research UK, USA 7.0 56.9
Amiral Gestion France 5.6 45.8
Bestinver Asset Management Spain 5.0 40.6
Legal & General Investment Management UK 4.2 34.3
Invesco Canada 4.1 33.5
JO Hambro Capital Management UK 3.6 28.8
Franklin Templeton USA 3.2 26.1
Directors 0.3 2.8
Other institutions and individuals 38.7 315.5
Total Shares in Issue 100 815.8
Introduction to Hyve Group plc – May 2020 / 54Appendices
TAG milestones
FY 2017 FY 2018 FY 2019
Create ‘best
practice’ functions Design of the ‘Hyve way’ Implementation of the ‘Hyve way’
& teams
Setup of Customer Success team Implementation of value-based pricing methods
Invest Roll out of event ‘blueprint’
in event
operations Setup of dedicated Content team
New event content deployed
1st new hardware roll out Launch of ‘one view’ back office systems
Build a ‘fit for purpose’
IT infrastructure Launch of integrated sales and marketing systems
& systems Systems design & development Systems deployed in phased waves
Review of performance structure
Drive a
performance Development of Sales leadership
culture
Standardisation of Performance Management
Build capability Recruitment of key organisational roles
& talent Roll out of dedicated specific training programmes
Introduction to Hyve Group plc – May 2020 / 55Appendices
Product-led acquisitions
Example Screening Criteria
Size M&A
Distinct Customer funnel
Value Proposition
Structurally Attractive Market
for Exhibitions
Phase 1 Phase 2 Phase 3 Phase 4
High Growth Underlying Quick screening Thorough analysis Due diligence Transaction
Market
Objective “be effective” “identify pearls” “don’t miss risk” “fair deal”
Organic Revenue Growth
and Profit Margin Activity Screen maximum # Assessment of Strategic / market Final price
International Roll Out of shows... concrete potential DD negotiation
Potential ... employing set of for Hyve Financial DD Deal structuring
clear criteria Synergy estimate (e.g. earnout)
ROIC
Integration planning
EPS Accretion
Introduction to Hyve Group plc – May 2020 / 56Appendices
Source of acquisitions
Acquisitions likely to come from the following sources:
Bolt-on market-
Owner-operated
leading events which
founders looking for
Non-core assets will accelerate our geo-
someone to take the
(e.g. Mining Indaba clone strategy
business to the next level
acquisition by Hyve) (e.g. Bett Brazil
£143m1 (e.g. Shoptalk acquisition
acquisition by
(of £158.6m2) by Hyve)
= 90% of Ascential Events1)
total revenue
1 Now owned by Hyve Introduction to Hyve Group plc – May 2020 / 57Appendices
Ascential deal strategic rationale
Product-led Strong financial
Further value
portfolio with global and rationale; earnings
through synergies
market leading brands enhancing in 2019
£147m1 £143m1
Significant potential
(of £220.7m2)
A more balanced
(of £230.7m)
under our management
= 67% of £200m3 portfolio for
= 62% the
of consensus
£143m 1 total revenue (of £213.6m)
as Core2 events = 94% of
enlarged group
(of £158.6m )
= 90% of consensus
total revenue
Introduction to Hyve Group plc – May 2020 / 58Appendices
Mining Indaba acquisition
› Met the TAG acquisition criteria as the
must-attend event in the African mining
industry
› Strong strategic rationale and
complementary to Africa Oil Week
› AOW and MI teams now merged to drive
synergies
› Implementation of Hyve best practice will
drive growth from FY20 onwards
Introduction to Hyve Group plc – May 2020 / 59Appendices
Shoptalk and Groceryshop acquisitions
Shoptalk has become the leading US e-commerce event and fast growing Groceryshop is already the leading grocery e-commerce event.
Established and managed by Anil and Simran Aggarwal, founders of Money 20/20.
Shoptalk revenue, 2016-2019E ($m) (Dec-YE)(1) Shoptalk profile
Shoptalk
CAGR
Shoptalk (2016-2019) › Launched in May 2016 in the US
Groceryshop $35.8m › Focus on the growing e-commerce segment that is disrupting the $4
trillion(3) US retail industry – creating a need for content-rich, change-
Shoptalk Europe +90% 80% focussed events
$8.3m
(2018-19) › Proven scope for geo-clones following successful proof of concept through
$26.3m Shoptalk Europe in 2017
$4.6m Groceryshop
$27.5m › Launched in October 2018 in the US
$15.6m › Aimed at the $1tn(3) US food and grocery segment and its specific
$21.7m 74% characteristics (fresh supply chain, regulatory, etc.)
$4.1m
Shoptalk focuses on developing innovative, content-led products supported by
bespoke technology and workflows developed to support its Hosted Meetings.
$5.2m $11.5m
$5.2m Selected key sponsors/delegates: Selected hosted retailers and brands:
2016 2017 2018 2019E
Adj. EBITDA: $12.2m(2)
(1) Estimated for year to 31 December 2019, although both events have been held and therefore revenue is an actual figure; unaudited based
on diligenced management account information
(2) EBITDA has been prepared by the company on the basis of Shoptalk management account information and validated by PwC. EBITDA has Introduction to Hyve Group plc – May 2020 / 60
been calculated to reflect a corporate rather than partnership structure
(3) Source: Globaldata, estimated figures for 2019Appendices
Spotlight on Shoptalk US
Shoptalk US has grown to its current scale based on three revenue streams: attendee revenue, sponsorship/exhibiting and hosted meetings
$27.5m › c. 8,500 people attended Shoptalk 2019, of which 47% are paying attendees
› 64% were Director-level or above (mostly split across retailers, brands and tech companies)
› Attendees attracted by the strength of the content programme and networking opportunities
Attendee
revenue › Attendee NPS has increased from +30 in 2018 to +50 in 2019
› Shoptalk has developed an industry-leading hosted meetings offering, underpinned by highly automated
technology
Hosted
meetings › In 2019 c. 450 companies executed c. 8,000 meetings with c. 1,500 individuals from 500 hosted retailers and brands
› Management consider hosted meetings to be an area for development at the wider Hyve group providing the
potential for further revenue opportunities across the group
Sponsorship / › c. 615 companies sponsor / exhibit(1) at Shoptalk – main objectives are to network, generate sales & leads and
exhibiting showcase products
› Shoptalk takes a consultative approach to selling in order to best meet sponsors’ objectives – it is not just selling
exhibition space
› Many also pay for hosted meetings and buy additional tickets for their teams to attend
2019E(2)
(1) Note: many companies do not exhibit but take a combination of hosted meetings and other sponsorship opportunities
(2) Estimated for year to 31 December 2019, although both events have been held and therefore revenue is an actual figure; unaudited based on Introduction to Hyve Group plc – May 2020 / 61
diligenced management account information. EBITDA has been prepared by the company on the basis of Shoptalk management account
information and validated by PwC. EBITDA has been calculated to reflect a corporate rather than partnership structureAppendices
Addition of industry-leading capabilities from Shoptalk,
building on the TAG programme
Opportunity for Hyve to use the best of Shoptalk’s model
Hosted meetings technology Content Community Development
› Bespoke technology and workflows developed
for Shoptalk to support Hosted Meetings › Content team, with deep retail industry › Community Development team engages the
› Opportunity to use technology across other knowledge and contacts, and original content Retailers & Brands community to support the
Hyve events capabilities overall proposition and feed the Hosted
› Hyve acquired a licence as part of the › Opportunity for Hyve to use best of breed model Meetings programme
consideration, in perpetuity for the software in hosted buyer and content creation › Opportunity for Hyve to learn to improve its
with the right to use on other events key buyer acquisition capabilities
Introduction to Hyve Group plc – May 2020 / 62Appendices
Shoptalk hosted meetings
Shoptalk has developed an industry-leading hosted meetings offering, underpinned by highly automated technology
Hosted Retailers and Brands Shoptalk Hosted Meetings Programme Sponsors
› >1,500 people from c. 500 retailer and › >450 companies purchase meetings
brand companies (Shoptalk) (typically in blocks of 10)
› Each person receives a free ticket and a › Sponsors are usually technology vendors
$750 travel stipend, in return for agreeing to looking for lead generation
up to 8 x 15 minute meetings with sponsors › Sponsors select Retailers and Brands they
› c. 8,000 15-minute hosted meetings at Shoptalk 2019, in 4 x 1
› Retailers and Brands select sponsors they are interested in, to prevent mismatches
hour slots
are interested in, to prevent mismatches (double opt-in)
› Sponsors and retailers and Brands are matched using Shoptalk
(double opt-in) proprietary technology & workflows – this automates many
challenging and labour intensive tasks
› Shoptalk provides meeting space, support & guidance, onsite
logistics
Introduction to Hyve Group plc – May 2020 / 63Appendices
Shoptalk & Groceryshop help accelerate an
omni-channel strategy
› Omni-channel combines face-to-face events with online content, networking and buying to provide
customers with multiple touch points throughout the year
› Shoptalk Virtual launched last month with three formats: Virtual TableTalks, Conferences and Meetings
Launched April 2020
› Shoptalk TableTalk
Held over 50 events with over 200 participants from leading global consumer businesses
Very positive feedback:
o “It was a great networking experience, and nice to talk to others while going through all this”
Launch late spring
o “It was great to have real conversation instead of looking at a deck with data for an hour”
o “It gave great insights into how others are handling the situation”
› Shoptalk Virtual – over 10,000 people expressed interest from companies including Amazon, Best Buy,
Facebook, Google, IBM, Infosys, Microsoft, Pinterest and Visa
Launch later in 2020
Introduction to Hyve Group plc – May 2020 / 64You can also read
