UBS 36 th Annual Global Media & 1 Communications Conference - - PDF document

ubs 36 th annual global media
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UBS 36 th Annual Global Media & 1 Communications Conference - - PDF document

UBS 36 th Annual Global Media & 1 Communications Conference Dec. 8-10, 2008 Safe Harbor This presentation and managements public commentary contain certain forward-looking statements that are subject to risks and uncertainties. These


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UBS 36th Annual Global Media & Communications Conference

  • Dec. 8-10, 2008
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2 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

  • perations. Statements in this presentation that are forward-looking include, but are not limited

to, the statements regarding broadcast pacings, publishing advertising revenues, as well as any guidance related to the Company’s financial performance. Actual results may differ materially from those currently anticipated. Factors that could adversely affect future results include, but are not limited to, downturns in national and/or local economies; a softening of the domestic advertising market; world, national, or local events that could disrupt broadcast television; increased consolidation among major advertisers or other events depressing the level of advertising spending; the unexpected loss or insolvency of one

  • r 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.

Safe Harbor

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  • Strategic Overview
  • How we will Grow
  • Financial Overview

Agenda

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  • 40+ Web sites
  • Broadband Video
  • I ntegrated Marketing
  • Brand Licensing

National Brands

Revenues: $1 billion

Local Brands

Revenues: $300 million

  • 25 subscription titles
  • 150 Newsstand titles
  • 12 television stations
  • 10% of U.S. households

Online & Diversified

Revenues: $300 million

Strategic Overview

Broad Media and Marketing Footprint

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Non-advertising Revenues: 40% Advertising Revenues: 60%

Strategic Overview

Balanced Revenue Mix

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35% 34% 30% Television 2.1% 1.0% 2.0% Other 18% 24% 29% Newspapers 100% 4.8% 14% 5.7% 6.0% 6.6% 8.0%

2010 Forecast

100% 100% TOTAL 3.7% 2.8% Out of Home 8.6% 3.6% Pure-Play Internet 5.3% 5.9% Trade Magazines 6.7% 6.8% Consumer Magazines 7.5% 8.8% Yellow Pages 9.4% 11% Radio

2007 2000

Source: Veronis Suhler Stevenson –September 2008

Strategic Overview

Industry Advertising Mix

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2 NA More 52 46 Subtotal 91 82 Subtotal 40 34 Better Homes and Gardens 6 6 Fitness 21 18 Special Interest Media 143 128 TOTAL 7 6 American Baby 16 12 Parents 21 22 Family Circle 9 6 Other 8 8 Country Home 13 16 Ladies’ Home Journal

2008 1998 Strategic Overview

+12%

Source: Fall 1998 & 2008 MRI Reports

Readership in Millions

Powerful National Consumer Connection

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Strategic Overview

Strong Subscription-Focused Circulation Model

85% 1.2M More 94% 3.8M Ladies’ Home Journal 80% 3.8M Family Circle 98% 2.2M Parents 950,000 1.5M 7.6M

Rate Base

97% Better Homes and Gardens 88% Traditional Home 87% Fitness

% of circulation from subscriptions

  • Direct Mail response rates strong

– Both for renewals and new offers

  • Progress on direct-to-publisher

– Acquired titles now at 60%

  • Growing online subscriptions

– 3.3 million annually

  • Strong profit contribution
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Growing Local Consumer Connection

380 240 News hours 420,000 330,000 Morning news viewership 1 Million 900,000 Late news viewership 11M HH 10M HH Market growth

CY08 CY03

Strategic Overview

Source: Nielsen

Meredith Television Stations

Growing Local Consumer Connection

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Broadcasting: Increase Market Share

+30% +40% +150% +64% +17%

Source: Nielsen November 2008

#1 across all time periods #1 in afternoon and evening news #1 in morning and late news #2 in late news (best performance ever) Other highlights

Morning news Late news Strategic Overview

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  • 25 websites
  • 12 million unique visitors
  • 150 million page views
  • 3.3 million online

subscriptions

National Brands Local Brands Broadband

  • 18 websites
  • 8 million unique visitors
  • 35 million page views
  • Mobile platforms
  • 2 Broadband channels
  • 2.3 million video clips
  • Video on demand
  • Custom production

Strategic Overview

Growing Online and Video Portfolio

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  • Strategic Overview
  • How we will Grow

– Increase market share – Grow new revenue streams

  • Financial Overview

Agenda

Agenda

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  • 23%

11% 17% Direct Response +1% 11% 7% Cosmetics

  • 28%

9% 24% Home +13% 5% 4% Retail 4% 5% 11% 22% Calendar 2008*

  • 12%

+23% +24% +13%

7-Year Cumulative Industry Growth**

5% 3% 7% 12% Calendar 2001* Non-DTC Travel Pharmaceutical Food

Publishing: Increase Market Share

How we will Grow

** TNS Media Intelligence, Jan.-Sept. 2001 & 2008 * Meredith data

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Commodity Sales Strategies

– Maximize salesforce efficiency – Stress efficiency of portfolio:

  • Broad reach
  • Value

– Emphasize bundled programs

Sales strategy

Publishing: Increase Market Share

How we will Grow

Corporate Sales

12

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Strategic Sales Strategies

– Access more clients directly – Forge deeper senior-level ties – Sell solutions, not only ad space – Emphasize consumer insights

Sales strategy

Publishing: Increase Market Share

How we will Grow

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  • Grow core advertising revenues

– Special sales initiatives – Contests and incentives

  • Emphasize proprietary and new programs

– Cornerstones – Job Connections – Product Integration and Sponsorships – Better Health – Cool Schools

How we will Grow

Broadcasting: Increase Market Share

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  • Strategic Overview
  • How we will Grow

– Increase market share – Grow new revenue streams

  • Financial Overview

Agenda

Agenda

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  • Boost online presence and revenues
  • Grow Meredith Integrated Marketing
  • Expand brand licensing activities
  • Build Hispanic Business
  • Increase retransmission revenues
  • Grow Meredith Video Solutions

Grow New Revenue Streams

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  • Strengthen position in core categories
  • Expand into growth areas

– Social Networking

  • Increase traffic and loyalty

– Unique visitors up 13% YTD Calendar ‘08

  • Aggressively grow revenue and profit

Grow New Revenue Streams

Boost Online Presence and Grow Revenues

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  • Social network for women
  • Focus on meals, meal planning
  • On Mixing Bowl, she can:

– Share and find recipes – Browse ratings and reviews – Join or start a group – Contribute to discussions – Find answers to her questions – Connect with other users

Growing Online and Video Portfolio

Grow New Revenue Streams

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Growing Online and Video Portfolio

Grow New Revenue Streams

  • Online social community
  • 3 million monthly unique visitors

– 90% of users are women ages 25-48

  • Allows Meredith to combine content,

traffic and sales activities

  • Minority investment

– Option to buy company

  • Meredith now in Top 5 of online

women’s networks

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Meredith I ntegrated Marketing O’Grady Meyers Genex New Media Strategies Directive Big Communications

Growing Meredith Integrated Marketing Capabilities

Grow New Revenue Streams

FY05 FY06 FY07 FY08

Custom Publishing Online CRM Strategy, Branding & Promotions Web Site Design and Marketing Viral and Word of Mouth Marketing Database Marketing Healthcare Marketing

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2004 2006 2008 Fiscal Year 2004 2006 2008 Fiscal Year

$155

25% CAGR

$ in millions

$83 $60

Grow New Revenue Streams

$30

40% CAGR

$15 $8

Revenues Operating Profit

Growing Meredith Integrated Marketing Capabilities

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Grow New Revenue Streams Grow New Revenue Streams

Expand Brand Licensing Activities

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  • Walmart

– Full line of Better Homes and Gardens home products – Currently over 550 SKUs per store – Planned expansion of home and gardening/outdoor living product lines in 2009 Grow New Revenue Streams

Expand Brand Licensing Activities

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  • Multi-year licensing agreement
  • Meredith receives royalties with

minimum guarantees

  • Products designed with input from

Meredith creative team

  • Promotion

Walmart marketing support

  • In-store campaign
  • Media campaign (print and TV)

Meredith marketing support

  • In magazines and online
  • Cover wraps

Grow New Revenue Streams

Expand Brand Licensing Activities

Better Homes and Gardens at Walmart

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Mahaka Russia (Wood) Indonesia (Fitness, Parents) Canada (MORE, SIP) Aust ralia (BHG, DL) Brazil (Parent s) Thailand (Parent s, MORE) China (Parent s, BHG, MORE) India (BHG, Child) Korea (BHG) MENA (BHG, Parent s, DL) Spain (DL, HHL) Mexico (DL) It aly (DL)

Grow New Revenue Streams

Expand Brand Licensing Activities

Meredith International Editions

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28 Magazines Out-of-Home

Sampling, Doctor’s office wallboard advertising

Custom Publishing Consulting Creative Services Consumer Insights

Ethnography

Database 300K+

Direct Mail

EVENTS

Siempre Inspiran Awards, retail

Blogs

Grow New Revenue Streams

Build Hispanic Business

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FY06 FY08 FY10

$4 $8 $15

(Actual) (Actual) (Estimate) Grow New Revenue Streams

Increase TV Retransmission Revenues

$ in millions

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Grow New Revenue Streams

Grow Meredith Video Solutions

  • Broadcast television

– Local advertising – Sponsorships – Syndication

  • Broadband video

– Advertising spots – Sponsorships – Product placement

  • Custom video production
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Kansas City Phoenix Saginaw Hartford Nashville Las Vegas Greenville Portland Springfield

10 Meredith markets 30 Non-Meredith markets

Bakersfield San Francisco

3 New markets (early 2009)

Norfolk Philadelphia Indianapolis Cleveland Denver San Diego Chattanooga Green Bay Milwaukee

  • Ft. Myers

Salt Lake City Grand Rapids Harrisburg Scranton Albuquerque Providence Buffalo Toledo Rochester Portland Spokane Champaign Jackson Tri-Cities Colorado Springs Yakima Medford Elmira Dothan Charlottesville

Grow New Revenue Streams

Grow Meredith Video Solutions

Binghamton

“Better” syndicated show markets

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  • Strategic overview
  • How we will grow
  • Financial overview

Agenda

Agenda

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Financial Overview

2004 2005 2006 2007 2008

$163 $171 $194 $211 $256

12% CAGR

$ in millions

Strong Operating Cash Flow

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200 Stock Option Exercises $2,200 Utilization of Cash 200 Dividends 700 Share Repurchases $1,000 Acquisitions, Net of Dispositions $2,200 Available Cash 300 Net Debt $1,700 Operating Cash Flow

$ in millions

Financial Overview

300 Capital Expenditures

Cash Flow Fiscal 1999 through 2008

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$0.28 $0.30 $0.32 $0.34 $0.36 $0.38 $0.48 $0.56 $0.64 $0.74 $0.86

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Calendar Year Dividends Per Share

12% CAGR

Financial Overview

Calendar Year Dividends Per Share

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  • $455 million total debt
  • 4.5% cost of debt
  • 1.6x debt to EBITDA

As of Nov. 30, 2008

Financial Overview

Conservative Capital Structure

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REAFIRM GUIDANCE

  • Current dividend yield:

5.2%

  • EPS multiple:

5.8x

  • EBITDA multiple

to market capitalization: 2.6x

  • EBITDA multiple

to total capitalization: 4.1x

Financial Overview

Calculated using Meredith closing price on Dec. 5 and trailing 4 quarters actual results, excluding special items

Current Valuation Metrics

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  • Vibrant and profitable media assets and brands
  • Growing online and video presence
  • Comprehensive Integrated Marketing capabilities
  • Growing brand licensing revenues
  • Strong financial foundation

Summary