16 The Investment Research Division (IRD) has two distinct brands Tagline Positioning ■ Fiery, collaborative process Shape Your ■ Confidence-inspiring fact base Conviction™ ■ Macro experts who challenge you ■ 360⁰, data -driven approach See the signals. ■ Weight of the evidence Avoid mistakes.™ ■ No client is too big or too small
17 IRD fast facts Book of business Total Total (Mar 19) clients employees Office locations $71.0m 2,017 142 ■ Montreal (HQ) ■ Hong Kong ■ London ■ Sydney ■ NYC ■ CapeTown ■ Sao Paolo ■ San Francisco $28.6m 897 89 ■ Venice, FL (HQ) ■ Chicago ■ London ■ Hong Kong ■ NYC ■ Boston ■ Atlanta ■ San Francisco
18 BCA Research and NDR – Products at-a-glance Macro Research Platforms and Analytics Training and Conferences ■ Multi-Asset: Global (5) ■ Equity Trading Strategy ■ BCA Research Academy ■ Multi-Asset: Regional (4) ■ Global ETF Strategy ■ Annual Investment Conference ■ Single Asset (5) ■ BCA Research Analytics ■ BCA Research Indicators Insights Tools Solutions Conferences ■ Institutional ■ ETF Selection ■ Model Portfolios ■ Annual Investors Investment ■ Stock Selection ■ Data Conference ■ Wealth Managers ■ Custom Research ■ White Label Marketing
19 BCA Research – Book of Business and Clients Book of Business ($m, by region) Clients (no. clients by revenue generated) 2,017 $80 2,100 $71.1 6% 1,800 15% $60 1,500 36% 60 % Millions 1,200 $40 900 600 $20 49% 34% 300 $0 0 As of Mar 2019 As of Mar 2019 APAC EMEA Americas >$100,000 $15,000-100,000 <$15,000 Types of clients: Institutional Investors (Asset Owners and Asset Managers), Financial Advisors
20 NDR – Book of Business and Clients Book of Business ($m, by region) Clients (no. of clients by revenue generated) 897 $28.6 900 $30 3% 2% 16% $25 600 $20 45% of the 60% of clients 62% Millions BoB is in the are in the $15 growing growing 82% $10 300 Wealth Mgmt. Wealth Mgmt. Segment Segment $5 35% $0 0 As of Mar 2019 As of Mar 2019 APAC EMEA Americas >$100,000 $15,000-100,000 <$15,000 Types of clients: Institutional Investors (Asset Owners and Asset Managers), Financial Advisors
21 A smarter structure: two brands, one infrastructure CEO, IRD and CEO, BCA Research Managing Sales Research HR Director BCA only Marketing Finance Sales Ops Technology Ops and Sales Research HR Compliance IRD (BCA and NDR) NDR only
22 Outline for Discussion Create a smarter Map the market Professionalise Innovate and organisation marketing and develop 3.0 structure sales products
23 Overall research market pace of decline is slowing; sell-side and Vote taking the hit 2013-2019F Investment Research Market, by Region ($m) Includes $8,000 sell-side ■ 2019 weakness indicative and Vote of asset managers cutting $7,000 duplicate coverage $6,000 ■ Cuts will affect $5,000 sell-side firms $4,000 ■ Opportunity exists for quality Independent $3,000 Research Providers (IRPs) $2,000 to fill any gaps left by cuts $1,000 ■ Doesn’t split apart V ote $0 and Subscription, which 2013 2014 2015 2016 2017 2018 2019F doesn’t give the full North America Europe Asia picture Source: Integrity Research (Jan 2019)
24 Subscription books are >93% of our business and are performing better than Vote IRD Books of Business ($m) $90 $9 BCA Subs-only Subscription book of business $m $80 $8 Vote book of business $m $70 $7 $60 $6 Less than 7% of the combined BCA Vote $50 $5 BoBs are Vote $40 $4 NDR Vote NDR Subs-only $30 $3 $20 $2 Jul-16 Jul-17 Jul-18 Mar-16 May-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Source: IRD Finance
25 Diagnosis of the market Pace of decline is slowing ■ ■ Drivers of decline are sell-side and Vote Opportunity to take share from sell-side research in a post-MiFID II world ■ Requirement to differentiate and highlight competitive advantage vs. other ■ independent research providers Opportunity to leverage BCA Research leader status to capture more than “fair ■ share” in growing Asia market
26 76% of the market believes sell-side macro is not a substitute for independent macro Is sell-side macro a substitute for independent macro? Is independent macro a complement to sell-side macro? (n = 1,050) Blue Slices: 99% No/No Yes/Yes 11.2% of the market 23.1% Non-substitutability is a is addressable key competitive advantage for independent research Yes/No, 1.1% providers vs. sell-side No/Yes 64.5% Source: BCA Market Research (Dec 2018) & Internal Data
27 There is room for BCA Research and NDR to steal share from competitors Market Share: Independent Research (%, 100% = $500m) 100% All others, with key competitors’ logos ■ BCA Research is the largest 90% IRP by market share 80% ■ Market is fairly fragmented 70% 78% 60% ■ Opportunity exists to steal share from competitors who are: 50% □ Less valued due to 40% lower quality research 30% □ Not differentiated 20% NDR 6% from each other 10% 16% BCA Research 0% End of 2017 Source: Roland Berger, Q3 2018
28 Relative to other IRPs, BCA Research and NDR score well on key reasons to buy Ranked importance to BCA Research NDR buying decision performance performance Buying Decision-making Criteria 1 Content quality 2 Depth of analysis Coverage of markets 3 and interest 4 Actionability 5 Timeliness Source: EY Survey and Interviews for EII (Feb 2019)
29 Opportunity: the IR market is predicted to grow 2-3% annually through 2023 Expectations for spend/usage on Independent Macro Research (n=104) Annual growth Avg. 2-3% 2019-2023 Decrease between ■ 52% of buyers will increase 6-10% their budgets over the next 5 years No Increase Increase Increase ■ 16% of buyers will decrease change between between by their budgets over the same (+/- 2%) 3-5% 6-10% 10%+ time period ■ Risks of market growth for Decrease Decrease IRPs remain if buyers choose by between 10%+ 3-5% on price before quality 0% 20% 40% 60% 80% 100% Source: EY Survey for EII (Feb 2019)
30 The majority of buyers believe ind. research is critical and 76% of buyers consume 3+ sources Criticality of independent research to investment decision making (proportion of respondents) Not at all critical Neutral Critical Extremely critical 56% view as extremely critical or critical Number of IRPs buyers purchase (% of the market) 76% purchase from 3 or more sources 1 2 3 4 5 to 7 8 to 11 0% 20% 40% 60% 80% 100% Source: EY Survey for EII (Feb 2019)
31 Outline for Discussion Create a smarter Map the market Professionalise Innovate and organisation marketing and develop 3.0 structure sales products
32 Subscription renewal rates have remained reasonably firm BCA and NDR subscription renewal rate (%, 12-month moving average) 100% MiFID II in force NDR 95% 91.1% 89.3% 90% BCA 85% 80% 83.9% 83.2% 75% Source: IRD Finance
33 BCA Research didn’t gain from recent market volatility, implying internal issue VIX 6MA vs BCA Research New Sales 6MA VIX 6MA vs NDR New Sales 6MA (VIX = units) (VIX = units) 22 300,000 22 1,200,000 20 270,000 20 1,050,000 18 240,000 18 900,000 BCA New Sales ($) BCA New Sales ($) 16 210,000 16 750,000 VIX VIX 14 180,000 14 600,000 12 450,000 12 150,000 10 300,000 10 120,000 8 150,000 8 90,000 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 VIX 6MA BCA New Sales 6MA BCA Research VIX 6MA NDR New Sales 6MA (Lagged 3 months) New Sales 6MA (Lagged 3 months) Break in correlation is an indicator of internal issues at BCA Research Correlation holds at NDR Source: IRD Finance MA = moving-average
34 BCA’s problem is the number of new sales, not the average price per sale Count of deals and average price per deal, by months (no. in units and $ in thousands) 120 $45 $40 100 Count of deals (#) $35 80 $30 $000s $25 60 $20 Average = $20k Average = 45 40 $15 $10 20 $5 0 $0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 Count of deals Average deal size Recent data on count of deals well below long-term average Source: BCA Finance & Sales Operations
35 BCA Research is professionalising sales and marketing processes and systems Before By the Now June end of 2018 2019 No tactics Public Relations (PR) Expand PR ■ ■ ■ ‘Conviction’ strategy ■ Undefined brand strategy ‘Conviction’ strategy2 ‘Conviction’ messaging in -market Awareness ■ ■ ■ Public Relations (PR) ■ and rebranded visuals 1 ■ Out-of-home (OOH) pilot E-blasts = marketing Multi-tactic marketing Add more lead gen tactics ■ ■ ■ ■ Multi-tactic marketing No lead tracking New sales or structure (NA) Lead tracking and analytics ■ ■ ■ ■ New sales or structure (NA) Consideration Scattered commercial policy New website New sales structure in RoW ■ ■ New website ■ ■ Commercial policy pilot ■ Clients High-touch renewals Contractual auto-renewal Add: Programmatic ad retargeting ■ ■ ■ Retargeting and Webcasts Webcasts, Social Media Upsell lead tracking in CRM ■ ■ Webcasts, Social Media ■ ■ Reconsideration No upsell lead tracking Gifting program ■ ■ “Signals/Mistakes” messaging also defined for NDR and will be in market by EOY 2019 1.
36 Defining brand strategy and rebranding in market to highlight differentiation Defining Strategy Defining bottom slice D complete Dec 2018 of Brand Pyramid Launch A B C Framework: P&G Brand Pyramid Taglines BCA Research NDR BCA Research Shape Your See the signals. EOY 2019 Brand Equity A Statement Conviction™ Avoid mistakes.™ NDR B Visuals (including new logos and colours) EOY 2019 Brand Character BCA Research and NDR: In progress C Visuals – competitive landscape: Plenty of room for differentiation Brand Building Blocks D Brand Equities Consumers Experience
37 BCA Research’s old website was outdated in terms of tech and look/feel
38 BCA Research’s new website is contemporary and has advanced tech
39 Awareness and lead generation at BCA Research and NDR leverage PR and advertising Awareness through Public Relations (PR) Marketing-generated leads (no. leads) Over 100 placements per quarter in FY 2019 5,000 4,754 FY18 TV FY19 4,000 3,126 3,000 2,000 Digital and Print 1,000 116 118 0 Q1 Q2 Source: PR placements from Google News and Cision; leads from IRD internal data
40 BCA Research Americas subscription new sales improving BCA Research Americas new sales – recent history ($ thousands) $400 $350 New sales leader starts $300 New marketing leader starts $250 $200 $150 $100 $50 $- Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Americas new sales 3-month moving average Source: IRD Finance
41 Outline for Discussion Create a smarter Map the market Professionalise Innovate and organisation marketing and develop 3.0 structure sales products
42 Back to Growth: we are working on stage 3 and have started work on stage 4 Where we are today Stage Stage 4 Achieving 3 3.0 Stage 2 Transformation Stage Professionalise Innovate 1 Marketing and develop Create a Map the and Sales 3.0 products Smarter Org Market Addressing Positioning for Addressing Positioning for costs short- and short- and long-term mid-term growth mid-term growth growth
43 NDR has already made its way into the growing US financial advisor market NDR wealth market subscription book of business ($m) New Global Head of Sales joined in Apr 2019 $13.00 $12.80 Dip here is due to seasonality $12.60 $12.40 $12.20 $12.00 $11.80 $11.60 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Source: IRD Finance
44 NDR is moving into providing indices for investment vehicles, such as ETFs NDR Assets under Advisement and revenue from AuA Note: Only ½ of this fiscal year is represented AuA Revenue $600 $350 $310 $294 $300 $500 $250 $400 Thousands Millions $200 $300 $150 $508 $108 $421 $200 $100 $100 $201 $50 $0 $0 FY17 FY18 H1 FY19
45 Key takeaways We have created a smarter organisation structure and invested in talent ■ Our overall market’s pace of decline is slowing, and our specific part of the market – independent ■ macro research sold via subscriptions – is growing ■ Buyers in our market DO NOT believe sell-side macro is a substitute for independent macro and believe independent macro is critical to their work ■ Buyers in our market value content quality above all else, and they see BCA Research and NDR as having high content quality versus our competitors We are seeing positive early indicators at BCA Research that our work in marketing and sales is ■ paying off – new sales are up versus this time last year ■ We are actively innovating to create 3.0 products ; NDR already has a strong foothold in the growing US Wealth Management market and is pushing into the fast-growing index-provider space
46 Q&A
47 Agenda Section 2.00pm Introduction and Strategy Recap | Andrew Rashbass , Chief Executive Officer 1 2.15pm Investment Research Division | Bashar AL-Rehany , CEO, Investment Research Division & BCA Research 2 | Chris Ciompi , Chief Marketing Officer, Investment Research Division 3.00pm BoardEx | Jeff Davis , CEO, Specialist Information Division 3 3.30pm Break 3.45pm Fastmarkets and Platform Demo | Raju Daswani , CEO, Fastmarkets 4 5.00pm Summary and Investment Proposition | Wendy Pallot , Chief Financial Officer 5 5.15pm Drinks and BoardEx demo
O V E R V I E W // 2 0 1 9
49 Evolution of Relationship Management You know who you know… but do you know who your colleagues know? CRM BoardEx More importantly, how do you get to people you don’t know? ■ BoardEx identifies decision makers and the path to get there BoardEx is the next evolution in relationship management ■ Database management systems are now outpaced by CRM 1 ■ Most relationship management systems are dependent upon ■ internal adoption and only as accurate as the last update Client Firm Relationships are the single most important asset ■ 1. Gartner
50 What is Relationship Mapping? Vice Chair Investment Bank X ASSET MANAGEMENT Sydney INSURANCE/REINSURANCE EXECUTIVE BOARD NOT FOR PROFIT MEMBERS AVIATION FINANCE PHILANTHROPIES CAPITAL FINANCING SENIOR MANAGEMENT CONNECTIONS ORGANIZATION YOUR COLLEAGUES OR CONNECTIONS NON-EXECUTIVE BOARD INDIVIDUAL COMMITTEE MEMBERS Federal Reserve Bank YOUR ALUMNI’S EMPLOYEES New York CONNECTIONS COMPANY ALUMNI MILITARY OR YOU GOVERNMENT CONTACTS Mid West MEMBERSHIPS TRANSACTIONS SCHOOL BOARD-TO-BOARD ALUMNI ALUMNI Chemical Group Banker at Board Member TELECOMS INFRASTRUCTURE FINANCE CONNECTIONS Investment Strategic YOUR COMPANY’S PROFESSIONAL ASSOCIATIONS Bank X Alternatives Committee CONNECTIONS THE DEAL TRANSACTIONS New York Mid West Chemical Group
51 BoardEx: Leader in Relationship Management Proprietary algorithms, data depth and accuracy create competitive advantage ■ Proprietary algorithms rank 1.2m Director and Senior relationships to highlight the Management Profiles most actionable connections 1b ■ Quality Sources: press releases, 1.8m announcements, public filings, First-Degree Organisation Profiles Connections IR websites, etc. ■ Unparalleled Accuracy: 300+ in-house researchers based in Chennai, India 19+ years 137 ■ Technology-enabled change of Historical Data Countries detection applications ■ Profiles continuously updated: PE 1,600 1.4m updates in last 12 months Firms
52 Relationship Mapping Landscape BoardEx Competitors Competitors Data ✔ Human verified, ✖ Reliant on data scraping Collection augmented by change or UGC detection software Accuracy ✔ Profiles fact-checked by ✖ Indeterminate validation dedicated 300+ person process, profiles subject team to errors Coverage ✔ Focused on most ✖ Volume vs. Quality Universe influential business compromises data leaders/decision- integrity makers globally ✖ Cluttered by inclusion of lower-level executives and non-decision makers Relationship ✔ Sophisticated mapping ✖ Limited ranking ability Mapping algorithms that Algorithms determine best connectivity
53 Addressable Market of ~$280m - 85% Opportunity Financial Professional Private Academic and Services Services Legal Equity Corporate Non-Profit Investment Banks Executive Search Am Law 250 PE Firms Corporate Global Research Governance Universities Wealth Management Business Portfolio Management Consulting Development Companies Talent Alumni/ Target Management Endowment Markets Asset Accounting Transactions Fundraising Management Commercial Banks $110m $82m $19m $50m $21m $2m Size Small portion of relationship Growth driven primarily through Focus on expanding sales mapping market (15%) penetrated increased adoption and channels, industry specialisation, by market participants penetration in addressable market and geographical expansion Source: EY-Parthenon
54 BoardEx: How we will win Embedded in Gold Standard Collection Proprietary Customers The Euromoney of Data Process Algorithms Workflow Advantage Highly accurate, Proprietary Intricate Flexible solutions A 3.0 business that comprehensive and collection process calculations that that can be will leverage ERM timely individual combining weight individual integrated into a data and content; and organisation automated and factors and rank customers CRM or catalyse 2.0 profiles which are manual validations the overall strength workflow businesses into 3.0 continuously fact and target path of application taking advantage of checked by highly a relationship our geographic trained individuals footprint and scale and automated processes
55 BoardEx Client Journey BoardEx Cloud Business Data Integration Workflow Web and Mobile Data Feed Integration Intelligence Application APIs ■ Predictive Analysis ■ Concordance ■ Data Integration ■ Business Development ■ Client Thought ■ Flexible Data CRM and In-House ■ ■ KYC Leadership Framework Applications ■ Market Analysis Search Intelligence ■ ■ Competitor Analysis ■ Union of Client and BoardEx Data
56 BoardEx Pricing Structure: Enterprise License Sectors Solution The Cloud Data Feed Predictive Analysis Banking + and Buyside Scope Department Division Enterprise-wide Executive Search + 1 2 Professional 3 Client Tier 4 Services = License $7.5k pa Legal ■ Rate card pricing determinants: sector + solution + scope + client tier + term Academic ■ Sold on an ‘enterprise - wide’ basis with focus on multiple -year terms and NFP ■ Multiple-year contracts represent approximately 46% of all agreements
57 BoardEx at a Glance $13.5m Revenue 1 18% Revenue CAGR YE 16-18 1 $11.8m $9.8m 29% Operating margin 2 96.5% Net renewal rate 360 Clients 2 46% Multiple-year contracts 3 2016 2017 2018 Based on calendar year-end with fixed FX rate 1. For the year-ended 31.12.18 2. As at 30.06.18 3.
58 How Euromoney Helps Drive BoardEx Growth Increased penetration New ■ Expand into new sectors and footprint Sectors & Footprint ■ Investment in Sales and Marketing Thought Acquisition Leadership Growth Increased relevance through coverage ■ Leverage ERM Editorial content and data assets Leverage Efficiency ■ Extend relationship types using new data sets Data Improve- Assets ments ■ Drive thought leadership Workflow integration Investment Workflow in Sales & ■ Continue evolution of our Salesforce application Integration Marketing ■ Next generation of APIs and integration tools Expand ■ Efficiency improvements Specialisation Relationship Types
PRIVATE AND CONFIDENTIAL 59 Summary Strong Financial BoardEx is a Leader Performance with Euromoney in Relationship Consistent Double-Digit Drives Growth Management Revenue Growth Strategic Product Highly Robust Organic and Initiatives as a Underpenetrated Inorganic Opportunities 3.0 Business Market
60 Q&A
61 Agenda Section 2.00pm Introduction and Strategy Recap | Andrew Rashbass , Chief Executive Officer 1 2.15pm Investment Research Division | Bashar AL-Rehany , CEO, Investment Research Division & BCA Research 2 | Chris Ciompi , Chief Marketing Officer, Investment Research Division 3.00pm BoardEx | Jeff Davis , CEO, Specialist Information Division 3 3.30pm Break 3.45pm Fastmarkets and Platform Demo | Raju Daswani , CEO, Fastmarkets 4 5.00pm Summary and Investment Proposition | Wendy Pallot , Chief Financial Officer 5 5.15pm Drinks and BoardEx demo
62 Agenda Section 2.00pm Introduction and Strategy Recap | Andrew Rashbass , Chief Executive Officer 1 2.15pm Investment Research Division | Bashar AL-Rehany , CEO, Investment Research Division & BCA Research 2 | Chris Ciompi , Chief Marketing Officer, Investment Research Division 3.00pm BoardEx | Jeff Davis , CEO, Specialist Information Division 3 3.30pm Break 3.45pm Fastmarkets and Platform Demo | Raju Daswani , CEO, Fastmarkets 4 5.00pm Summary and Investment Proposition | Wendy Pallot , Chief Financial Officer 5 5.15pm Drinks and BoardEx demo
A world-leading price reporting business
About Fastmarkets (video) 64
Fastmarkets have invested in its senior management team New CMO to be in place by year-end Toby Burton David Monaghan Dan Klein Louise Noone Kevin Smith MD, Events CFO/COO CEO, Forest Global Head of HR CTO Toby joined Products Louise joined Kevin joined David joined Fastmarkets in Dan joined Fastmarkets in Fastmarkets in 2016. Fastmarkets in 2018. Prior to this, November 2017. Fastmarkets in October 2018. She Kevin previously Toby spent 11 years David has over 18 2017. Previously has worked in HR worked for RBC years’ experience in at The Economist Dan was a Senior for over 20 years, Capital Markets and Group as CFO of the Executive at recently focussing for Microsoft for events at IIR and Publisher Team. Forrester Research. Argus Media. on transformation. over 8 years. 65
Our markets 66 66
We serve our markets through four channels Price reporting Market intelligence, & Analytics Events forecasts Market Market data commentary >5,500 prices assessed by Fastmarkets 67
Fastmarkets pricing process (video) 68
How our information is Price used benchmarks for contracts Internal sales/ Inventory purchasing valuation performance evaluation Market trend Exchange analysis and contracts forecasts 69
Metals and Mining Manufacturing Raw material Steel Our prices are extraction production Pre-consumer scrap used across the Post-consumer life cycle of the scrap industries we serve Paper/packaging Paper/packaging Use phase End of producer buyer life/Recycling Pulp & Paper Pulp mill ~$2tn Sawmill Wood product Wood product Wood producer buyer of global trade in the forest Products Forest Products products and steel markets 70
The customers we serve… Financial Services Producer/Supplier Buyer: heavy Buyer: light Recycler and Trading Services • Mining and forest • Companies that • Companies that • Companies that take • Companies that • Companies that Scope companies who extract and consume metal and consume metal to end of life goods to trade physical provide a range of process raw materials paper products to produce finished produce raw commodities or buy professional produce finished B2B B2B and B2C materials for metal and sell financial services for our • Manufacturing companies and B2C goods goods where: and paper instruments markets including who: where: producers insurance, • Metals/paper • Companies that use • smelt ore or scrap warehousing, • Metals/paper are a are a small our data for • convert pulp to paper logistics, credit large proportion of proportion of forecasting earnings products rating, risk the good the good and performance • Companies that sell goods management or • Metal and paper • Metal/paper • Enabling M&A or and services into the metal management prices/forecasts prices are not corporate finance and forest products supply consulting services are business business chain critical critical Examples of companies in the segment 15,000 global companies served by Fastmarkets 71
Clients can be split into three clusters to reflect various use cases for our prices Primary uses Secondary uses 50,000 Inform sales Internal sales/ Support Support negotiations Price purchasing physical financial Build Analyse Track book and set benchmark Inventory performance transactions transactions market market exposure to Firm type: prices for contracts valuation evaluation decisions decisions forecast trends metal prices users of our services Physical Trader Prices are used very CORE DATA frequently for core LICENCE SALES business decisions OPPORTUNITIES Producer Mostly Mostly large firms large firms Buyer Heavy Recycler SECONDARY Prices are used LICENCE SALES regularly for non- OPPORTUNITIES core business decisions Financial Trader Only big banks Only big banks Only big banks Prices are used ad SUBSCRIPTION Prof. hoc (e.g. as input for SALES Services analysis rather than OPPORTUNITIES for decision-taking) Buyer Light 72
Revenue by region 46% Americas 33% EMEA 21% Asia and Oceania 73
Growth will continue to be driven through penetration of data sales across our demographics in terms of segment and size In particular, the biggest Volume renewal rates A significant proportion Just below 5% of our success so far is that on for our Top 150 global of large sales are multi- clients have moved into key accounts in metals year deals with key accounts, 25% licenses across all of escalation rates built in are close to 100% Fastmarkets – so huge have already migrated in giving strong forward opportunity metals visibility of revenue Forest products has only In 2018 we commissioned a major research project with a leading global recently started its pricing consultant which gave us clear pricing strategy based on the customer license strategy which segmentation and the value of the product – this will help drive the value presents an opportunity from our licensing strategy 74
Our strategy… To be a world-leading PRA 75
Fastmarkets – in numbers 5,500 14 Prices Offices 415 50 Employees Events £79m FY18 Revenue 200 Forecasts 27% 9% FY18 Reported FY18 Underlying revenue growth revenue growth 34% FY18 Operating profit margin 76
Fastmarkets aligns with Euromoney’s core 3.0 strategy: It took 100 years to get from B2B 1.0 to 2.0 but only five years from 2.0 to 3.0 Development of world-leading Commodities PRA business B2B 1.0 business B2B 2.0 business B2B 3.0 business • Print • Digital • Embedded in contracts and workflow • Monologue • Dialogue • Benchmark for the industry • Advertising • Subscriptions • Data sales 1874 1882 1913 1999 2003 2012 2015 2017 2018 Lockwood Quinn’s Metal Metal Bulletin CME launch a futures Euromoney buys Fastmarkets Post Letter launches first contract referencing RISI to be part of Brand launch founded (MB) founded website MB prices Fastmarkets AMM AMM converts PRA strategy launched IOSCO Type 1 founded daily print paper with new operating accreditation to digital service and sales model achieved 77
Why PRAs are attractive 78
We report the price of commodities Reference Physical Financial price benchmark benchmark Industry accepts a PRA’s price Customer Markets use price Transactions using exchange as the standard for physical use-case for trends and analysis contracts based on PRA’s price contracts Market Illiquid, opaque and Increasingly Liquid structure undeveloped PRA market sophisticated market markets Compliance No compliance requirements, Transparent methodology, Rigorous process externally requirements specifications or methodology internally validated audited and IOSCO compliant 79
The business has strong financials and high barriers to entry 1 2 Process and compliance Embedded within our markets 3 IOSCO $73.5bn external assurance audits of our of trade is indexed to Fastmarkets Barriers prices successfully undertaken Forest Products suite of prices since 2017 to Entry 3 4 At the core of their markets Scalable infrastructure 17 MiND financial benchmark agreements successfully on boarded all our in place with global exchanges Forest Products prices into MiND post acquisition 80
The building blocks to achieve success Customer Benefits as a PRA Delivery Transparency Engagement Financial and Controls Benchmarks The world’s leading and most trusted price reporting and intelligence service for the markets that we serve 81
Building sustainable and long-term growth 82 82
We are building strong capabilities across key areas to underpin growth Capabilities 7% of our revenue spent on technology investment (capex and opex) 83
Key business growth drivers • Extension of data licencing strategy • Greater penetration towards the buyer 1 2 Existing Products segment of the supply chain • Better cross-sell opportunities via the • Increased sales of existing content via new Fastmarkets Platform third-party channel partners • New CRM to drive sales growth • World class live exchange data product to rival Bloomberg/Refinitiv • Launch of new Fastmarkets platform • Buyer segment and procurement- 3 4 and workflow tools focussed products New Products • Development of new benchmarks • Organic and M&A investment in to within existing verticals new commodity market verticals • Analytic and insight products • Royalties from exchange contracts referencing Fastmarkets prices • Bolt-on acquisitions to drive cross sale opportunities Existing Customers New Customers 84
1 A best-in-class, integrated, sales and marketing CRM system to drive revenue 85
Fastmarkets Platform 2 3 Enhance client value through the launch of Fastmarkets Fastmarkets platform platform – Exchange Research Physical API’s News a best-in-class Market data data Price technology across Metals & Mining the PRA industry Forest Products Q1 20 Q1 21 86
New CRM investment now live and will drive revenue 1 through an enhanced sales process • Delivery of a new sales and marketing stack to drive our Marketo: Salesforce: Lead Opportunity commercial activities • Single, closed-loop CRM across Salesforce: Salesforce: Fastmarkets Order CPQ • Many benefits across Sales, Marketing, Finance and Operations • Cleansed and enriched customer data Fusion: Salesforce: • Platform Integration with Group Finance DocuSign Access NetSuite • Delivered iteratively, phase one NetSuite now live 87
3 The growth Reference Physical Exchange Contracts/ Value of Data Sales, Licensing & Exchange Fees Pricing Benchmarks Financial Benchmarks opportunities for PRAs focussed in Wood products Pulp metals, mining and Ferrous Steel forestry remain Alumina Scrap Iron Copper Container Ore Concentrates significant board Aluminium premiums All other MB Reference Metallurgical Prices Coal Market Maturity Subscription Revenues Data Licencing Revenues Exchange Fees Size illustrates market volume and fill estimates our share of the market Source: Fastmarkets Internal estimates 88
Fastmarkets at the heart of developing financial markets 4 14 exchange futures contracts referenced on our price, plus plans to launch three further contracts including lithium 89
Our Brand 90
Our expanding portfolio of cross-commodity businesses needed a new global identity… 91
Fastmarkets structure and constituent original products Leader in pricing, news, Pulp, paper, packaging, Global prices, news, The online resource for forecasts and industry data for recovered paper, biomass analysis, research and metals industry pricing, the forestry products supply indices for European forecasts for non-ferrous news and information in chain (pulp, paper and wood) markets and ferrous metals North America Covering the domestic pulp Provides the wood products The leading authority on Real-time exchange data and paper sector in China industry with market and global non-metallic minerals platform and physical price price trends pricing and intelligence information 92
93
Enabling Trading 94
In summary the drivers of our future growth will be… Fastmarkets will Increased A new sales Only 5% of target sales into sales through the and marketing Fastmarkets clients have Fastmarkets Platform technology stack the buyer segment moved into licenses ...so growth will continue …driven by deeper …will facilitate our sales …which is our largest from continuing penetration of our data process and deliver untapped addressable data sales revenue growth market More New prices and Developing Fastmarkets has invested acquisitions products will continue a portfolio of financial to be developed benchmarks for exchanges in strong management ...will enable us to scale …to drive growth within …will provide exciting …as well as its global quickly in new and existing markets we future new revenue workforce to reinforce its existing verticals serve, e.g. lithium opportunities position as a world leading PRA 95
Technology and the Fastmarkets platform
Biographies of presenters Kevin Smith CTO • Kevin joined Fastmarkets in 2016 as CTO • Responsible for defining and driving digital transformation to support the PRA strategy • Kevin previously worked for RBC Capital Markets’ Structured Rates and Counterparty Risk businesses and Barclays Capital • Kevin worked for Microsoft for eight years and was awarded six software patents for his inventions and the Circle of Excellence, Chairman’s Award Emma Goddard Head of Product, Fastmarkets Platform • Emma joined Fastmarkets in 2011 as its first dedicated Product Manager • Responsible for the delivery of our digital product to customers • She is the lead product manager on the Fastmarkets Dashboard • Primary responsibility for the Fastmarkets Platform customer experience • Prior to joining Fastmarkets, Emma spent 15 years honing her product management skills across a range of B2B and B2C news and data products 98
Our journey from B2B 2.0 to B2B 3.0 Discrete websites serving islands of data Inability to segment data Limited systems integration Opportunities to improve user experience 99
Best-in-class price reporting platform for the dissemination of all our commodity data, to all our customers, to surface deep and engaging market intelligence for the markets that we serve 100
Fastmarkets platform and business alignment Solutions Excel Add-in Desktop Web Mobile Physical News Exchange Research API’s Price Market Data Data FASTMARKETS PLATFORM Category Physical Exchange Economic Data Data News Prices Market Data and Analytics Commodity Metals Minerals Forest Products Other commodities … FASTMARKETS BUSINESS 101
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