June 6, 2017 · 2017-06-06 · Local Media Group Growth Strategies o ... HH in the DMA (M) DMA #1-60. Average Revenue / Station: $51M. ATTRACTIVE STATIONS IN LARGE & GROWING MARKETS

Investor Day PresentationJune 6, 2017

SAFE HARBOR

This presentation and management’s commentary relating thereto may contain certain forward-looking statementsthat are subject to risks and uncertainties. These statements are based on management’s current knowledge andestimates of factors affecting the Company and its operations. Statements in this presentation that are forward-looking include, but are not limited to, the Company’s estimates of future revenues, profits and earnings per share.

Actual results may differ materially from those currently anticipated. Factors that could adversely affect futureresults include, but are not limited to, downturns in national and/or local economies; a softening of the domesticadvertising market; world, national or local events that could disrupt broadcast television; increased consolidationamong major advertisers or other events depressing the level of advertising spending; the unexpected loss orinsolvency of one or more major clients or vendors; the integration of acquired businesses; changes in consumerreading, purchasing and/or television viewing patterns; increases in paper, postage, printing, syndicatedprogramming or other costs; changes in television network affiliation agreements; technological developmentsaffecting products or methods of distribution; changes in government regulations affecting the Company’sindustries; increases in interest rates; and the consequences of acquisitions and/or dispositions. The Companyundertakes no obligation to update any forward-looking statement, whether as a result of new information, futureevents or otherwise.

2

MEREDITH’S INVESTMENT THESIS

Portfolio of highly rated television stations in large and fast-growing markets

Trusted national brands with an unrivaled female reach

Profitable and growing digital business

Growing consumer-generated revenue

Experienced management team with a proven record of operational excellence and shareholder value creation over time

Strong and consistent cash flow generation, driven by:

Commitment to delivering Top-Third Total Shareholder Return:

1.

2.

3.

Balanced capital allocation strategy

Dividend payer for 70 years; increases for 24 consecutive years

Share buyback program

Accretive strategic acquisitions

3

TODAY’S AGENDA

Balanced Portfolio Delivers Strong Cash Flowo Tom Harty, President and Chief Operating Officer

Local Media Group Growth Strategieso Paul Karpowicz, President

National Media Growth Strategieso Jon Werther, President

Total Shareholder Return Strategies o Joe Ceryanec, Chief Financial Officer

Q&Ao Steve Lacy, Chairman and CEO

4

National MediaRevenue: $1.1BOp. Profit: $140MEBITDA: $160M

MEREDITH AT A GLANCE

Local MediaRevenue: $625MOp. Profit: $210MEBITDA: $250M WORKING YOU

WSM V -TV WSM V-DT NASHVILL E

Wall Street Consensus for Fiscal 2017 ending June 30

Delivering Record Revenue and Profit in Fiscal 2017

5

LOCAL BRANDS IN LARGE AND GROWING MARKETS

#1 or 2SIGN-ON to SIGN-OFF RANK IN 7 MARKETS

17STATIONS IN PORTFOLIO

13STATIONS IN TOP 50 MARKETS

5DUOPOLY MARKETS

EAST & SOUTHEAST:ATLANTA, MKT 10NASHVILLE, MKT 29HARTFORD, MKT 30GREENVILLE, MKT 37MOBILE, MKT 60SPRINGFIELD, MKT 114

WEST & SOUTHWEST:PHOENIX, MKT 12PORTLAND, MKT 25LAS VEGAS, MKT 40

MIDWEST:ST. LOUIS, MKT 21KANSAS CITY, MKT 33SAGINAW, MKT 72

6

NATIONAL BRANDS POSSESSES STRONG CONSUMER REACH

80MILLION UNIQUE

VISITORS

33%FY-17 EST DIGITAL

AD REVENUES

7

110MILLION

UNDUPLICATED WOMEN

70%REACH TO

MILLENNIAL WOMEN

7

SUCCESSFUL EXECUTION OF STRATEGIC PLAN OVER TIME

National Media Group

Local Media Group

Corporate

Built fast-growing and profitable digital business with a scale audience

Added leading digital ad technology companies Selectable, Qponix & ShopNation

Achieved inflection in advertising revenues with digital driving overall growth

Added Allrecipes, Shape and Martha Stewart brands targeting younger women

Grew brand licensing business at Walmart to 5,000+ SKUs at 5,000 stores

Acquired and integrated 5 strong stations, achieving 3 additional duopolies

Grew news programming by 50% across portfolio

Significantly grew retransmission revenues and contribution

Expanded digital and mobile platforms

Implemented and aggressively pursuing Total Shareholder Return program

Grew dividend at 10% average annual rate to $2.08; currently yielding 4%

2.9% weighted-average interest rate and 1.7x debt-to-EBITDA leverage

8

MEREDITH GENERATES STRONG AND GROWING EBITDA

FY2011 FY2013 FY2015 FY2017E

7% CAGR

$ in millionsAdjusted EBITDA before special itemsConsensus for Fiscal 2017 ending June 30

$265$268

$359

$319

$217

FY2009

9

Net Income (Loss)

$(107) $127 $124 $137 $186

Record Local Media advertising revenue, led by political dollars

Retransmission contribution continues to grow

Achieved network affiliation renewal in important markets

Strong digital driving overall National Media advertising growth

Renewed highly profitable licensing agreement with Walmart

Rapid growth in consumer connection across media platforms

Strong cash flow fueling 24th-straight dividend increase

Highest earnings per share in Company’s 115-year history

STRONG ACHIEVEMENTS IN FISCAL 2017 TOWARD VISION

10

TODAY’S AGENDA






11

HH in the DMA (M)

DMA #1-60

Average Revenue / Station: $51M

ATTRACTIVE STATIONS IN LARGE & GROWING MARKETS

Most Stations are Big 4 Affiliates and Ranked #1 or #2

12

2.4

0.5

0

1

2

3

LOCAL MEDIA GROUP GROWTH STRATEGIES

13

Increase Viewership

Grow Revenue and Profit

Scale Digital Businesses

Increase Net Retransmission Contribution

Expand our Television Station Portfolio

9% CAGR

ADDING LOCAL NEWS PROGRAMMING STRENGTHENS MARGINS

700

14

CY06 CY11 CY16

300

400

$124 $113

$163 $158

$214

FY13 FY14 FY15 FY16 FY17E

$376 $403

$534 $548

$625

FY13 FY14 FY15 FY16 FY17E

GROWING REVENUES AND PROFIT

15

$ in millionsConsensus for Fiscal 2017 ending June 30, 2017

Revenues Operating Profit

14%CAGR

15%CAGR

$60

FY2013 FY2015FY2011 FY2017E

RECORD POLITICAL ADVERTISING REVENUES

$35

$44$39

Presidential Election Year

Mid-term Election Year

16$ in millionsConsensus for Fiscal 2017 ending June 30

9% CAGR

FISCAL 2019 POLITICAL ADVERTISING OUTLOOK

Senate Races Jeff Flake (R-AZ)Dean Heller (R-NV)Bob Corker (R-TN)Chris Murphy (D-CT)Bill Nelson (D-FL) Elizabeth Warren (D-MA)Debbie Stabenow (D-MI)Claire McCaskill (D-MO)Maria Cantwell (D-WA)

Governor Races Doug Ducey (R-AZ)Bruce Ranner (R-IL)Charlie Baker (R-MA)Dan Malloy (D-CT)Kate Brown (D-OR)Alabama (Open)Florida (Open)Georgia (Open)Kansas (Open)Michigan (Open)Nevada (Open)South Carolina (Open)Tennessee (Open)

17

DIGITAL & MOBILE GROWTH STRATEGIES

18

Grow total LOCAL audience on all platforms – Local is our business and what our advertisers expect

– Sustained growth is reliant on improved local content– Meredith Content Hub generating increased page views

Increase digital engagement– App users are our most loyal and fastest-growing audience

– Social media, specifically Facebook, is our biggest referrer– Creating deep content to keep users engaged

Drive continued double-digit revenue growth– Creating local digital agencies– Increasing margins– Generate 10 percent of ad revenues from digital and mobile platforms

STATIONS RANK HIGH IN DIGITAL USER ENGAGEMENT

19

Market Station comScore RankingPhoenix, AZ KPHO, KTVK 1

St. Louis, MO KMOV 1

Nashville, TN WSMV 1

Hartford, CT WFSB 1

Kansas City, MO KCTV, KSMO 1

Las Vegas, NV KVVU 1

Mobile, AL WALA 1

Flint, MI WNEM 1

Greenville, SC WHNS 2

Portland, OR KPTV, KPDX 3

Atlanta, GA WGCL, WPCH 4

comScore User Engagement rank within each TV market

40%

Las VegasPortland

GreenvilleMobile

Springfield(FOX)

Fiscal2021

MVPD Renewal Schedule

Affiliation Renewal Schedule

Nashville(NBC)

RETRANSMISSION RENEWAL SCHEDULE

Fiscal2018

Fiscal2019

Fiscal2017

10%

Fiscal2020

25%

St. LouisHartford

Springfield(CBS)

Springfield(ABC)

50% of Meredith Subscriber Households Will be Renewed in FY2017 and 2018

AtlantaPhoenix

Kansas CitySaginaw

(CBS)

35%

20

EXPANDING OUR LOCAL MEDIA PORTFOLIO

Acquisition Criteria Mid-to-large-size markets

• Market # 10-60

Big 4 Affiliation• ABC, CBS, FOX, NBC

Leader in market• Rank # 1 or #2 in news

Fast-growing markets

21

Regulatory Environment

Certain duopolies allowed using qualified third party arrangements

Reinstated UHF discount

Review of media regulations

• 39% national cap

• Duopoly restrictions

• Cross-media ownership

• Rollout of ATSC 3.0

TODAY’S AGENDA






22

MEREDITH NATIONAL MEDIA GROUP MISSIONDigital is adding to Meredith’s total audience, and is not cannibalizing print

23

meredithmissioncreate realopportunities for women to

achieve daily and dream big

CROSS-CHANNEL GROWTH STRATEGY

Growth & Diversification in Advertising Revenue

Growth & Diversification in Consumer Revenue

Audience & Engagement Growth

Best-In-Class Branded Experiences

Proprietary Technology Platforms

Proprietary First-Party Data, Insights & Analytics

1. 2. 3. 4.

24

PILLAR 1: BRANDED EXPERIENCES

25

Notification Email

Saved recipeFollow streams

and brands

User Comments (To Come)

25

MAGAZINE BRANDS: MAGNOLIA JOURNAL

Launched in fall 2016 as a newsstand title

Strongest-selling launch ever

Transitioned to quarterly subscription title with one million ratebase (May 2017)

On track to be most profitable title in first year of operation in Meredith history

26

CROSS-PLATFORM FOCUS

2727

PILLAR 2: CROSS-PLATFORM AUDIENCE GROWTH

Digital is adding to Meredith’s total audience, and is not cannibalizing print

50

75

100

125

150

175

200

2010 2011 2012 2013 2014 2015 2016

Tota

l Aud

ienc

e (i

n m

illio

ns)

Print Digital40% of audience 60% of audience

28

HIGHLY ENGAGED LOYAL AUDIENCE...

29

capturehearts +minds

#brandsthatinnovate

millionloyalists110

65 + millionfollowers

80 + millionunique visitors

154 milliontotal audience

32 millionsubscribers

Source: 2016 ComScore Multi-platform/GfK MRI Fusion (12-16/S16); Publisher’s Estimate for non-measured titles (including estimate for SIMs based on FY16circulation); Google Analytics, Brightcove; average monthly cross-platform views

…ACROSS ALL KEY LIFE STAGES

30

…WITH A STRONG MILLENNIAL REACH

31Source: comScore Multi-platform, Dec. 2016

… AND CROSS-CHANNEL ENGAGEMENT

32

Live streaming

Augmented & virtual reality

Cross-platformprogramming

designed around

4 initiatives | 4 change

Content on emerging platforms

ArtificialIntelligence|

BOTS

wherever they areInspiring, engaging and activating consumers ...

Traditional channels

PILLAR 3: FIRST-PARTY DATA & ANALYTICS

125 MillionConsumer Database

80 MillionDigital Consumers

PROPRIETARY DATA>25,000

Attributesvisit register email follow subscribe

share search list watch buy

3 billion >6 million new >6 billion 25 million

'I made it''I did it' profiles

Add to Shopping ListPrint/Save/Build CollectionsVideo Views

7 'Shops'Local Offers

INTEREST

INTENT200 Million Monthly Actions

66 million

enter

50 million

33

interest + intent We understand her

DIFFERENTIATION: FULL-FUNNEL TARGETING

34

Understand Her Interests

Understand Her Intent

Understand When She’s In-market

Driven by ‘Visit’ data- Visits/ Content- Emails- Subscriptions

Driven by Action data- ‘I Made it’- Add to Shopping List- Share

Driven by Real-time data- Mobile – in-store recipes- Shopper Marketing- ShopNation Commerce

50% of Allrecipes visitors are in

store w/in 24 hrs.

Meredith Differentiates

(in food)

DATA ENABLES PERSONALIZED EXPERIENCES

35

PROPRIETARY INSIGHTS & ANALYTICS ANCHOR LARGE PARTNERSHIPS

36

PROGRAMMATIC& BRANDED MEDIA VIDEO

Major Food Client

PILLAR 4: TECHNOLOGY PLATFORMS

37

Recent platform-centric acquisitions

• Social platform for food

• Native and engagement-based video

• Shopper marketing

• eCommerce and affiliate marketing

• Lead generation / performance marketing

Existing / Home-Grown Technology Platforms

+

DRIVING PREMIUM MONETIZATION GROWTH & REVENUE DIVERSIFICATION

38

PREMIUM MONETIZATION

UNITS

NATIVE VIDEO SPONSORSHIPS INFLUENCER SHOPPER MARKETING

SOCIAL

Traditional Display vs. Premium Monetization

Traditional Display Premium Monetization

eCPM Ranges: $10 – $30+

eCPM Ranges: < $10

82%

18%

52%48%

INNOVATION FUELING ENGAGEMENT AND MONETIZATION

Native Shopper Meal Cards

OWNED CHANNELS

OWNED EXPERIENCES

EXTERNAL PLATFORMS ANALYTICS

Food Brand’promotions within “Breakfast Foods” category…

Native Shopper

Shoppable Pin

Real-Time Dashboards

Shoppable Email

Facebook Live

Product Card

Beacon Technology

39

0

100

200

300

400

500

600

2012 2017E

RESULTS: TOTAL AD REVENUE GROWTH FUELED BY DIGITAL CHANNELS...

$ in millionsFiscal years ended June 30

PrintDigital

$492$520

10% 30%

$

$

91% 70%

5-YEAR CAGRDigital: 30%

40

...AND SHARE GAINS IN PRINT ADVERTISING

Meredith Share vs. Competitive SetMeredith Share vs. Industry

Source: Company management and Publishers Information Bureau.

35.8%

38.1%

40.3% 40.8%

2011 2013 2015 2016

41

11.1% 11.1%11.8%

13.0%

2011 2013 2015 2016

RESULTS: CONSUMER REVENUE DIVERSIFICATION

42

Magazine subscriptions: stable revenue source

Auto-renewal has large upside (2x profit)

Launch promising new products

World’s No. 2 licensor behind Disney

Renewed Walmart relationship

Several new programs launched

Circulation & New Paid Products

Brand licensing

e-Commerce Newer, fast-growing revenue source

Turning inspiration to action

43

CREATING CONTENT WITH COMMERCE IN MIND

= content that leads to commerce

Scale + engagement

$23 billion beauty

$28 billion prescription drugs

$517 billion automotive

$868 billion food

$552 billion home

Meredith consumers account for $1 out of every $2 spent across categories

$134 billion travel

Brand Licensing, e-CommerceCirculation

$ in millionsConsensus for Fiscal 2017 ending June 30 44

GROWING CONSUMER-GENERATED REVENUE

2011 2013 2015 2017

86% 88% 85% 83%

$308

$365 $367$388

ACQUISITIONS IN LINE WITH STRATEGY

45

Branded Experiences

Audience Development

First-Party Data, Insights & Analytics

Technology Platforms

Ad Revenue Diversification & Growth

Consumer Revenue Diversification & Growth

• Allrecipes.com• Shape• Martha Stewart

• Allrecipes.com• Shape• Martha Stewart• Shop Nation

• Allrecipes.com• Shape• Martha Stewart• Selectable Media• Qponix• Shop Nation• Yawkey

• Allrecipes.com• Selectable Media• Qponix• Shop Nation• Yawkey

Our strategy will continue to guide our acquisition and partnership activities – as well as our organic investments

TODAY’S AGENDA






46

COMMITMENT TO DELIVERING TOP 3RD TSR


Consistent and growing dividend

Opportunistic share buyback program


47

USE OF CASH PRIORITIES

48

Strong commitment to returning cash and maintaining dividend growth

Tuck-in acquisitions to strengthen existing portfolio

Larger acquisitions only if extremely strategic at attractive valuation with strong synergies

Selective share repurchases enabling shareholders to benefit from dips in price – current authorization of $100 million with $70 million remaining

Target maintaining current conservative net debt levels

Prio

rity

This strategy seeks to optimize free cash flow driving Total Shareholder Return while pursuing organic growth in its core businesses

ACQUISITION AND INVESTMENT PRIORITIES

Local media brands in large faster-growing markets that add network and geographic diversity

Multi-platform national media brands that provide access to new audiences and advertising categories

Digital businesses that support growth strategy

49

OUR CRITERIA FOR ACQUISITIONS AND INVESTMENTS

Strategic Benefit– Will target drive growth faster than we can achieve organically?

– Does it meaningfully move the business forward?

Financial Attractiveness– Does it meet our IRR hurdle rate of >15%?– Are there revenue and/or cost synergies?– Prefer quickly TSR accretive deals

Leadership expertise and fit– Proven management teams and good cultural match

Opportunistic and selective– Significant in-bound and out-bound activities ensure

we are well-positioned to view potential deals

50

MEREDITH’S GOAL: TOP-THIRD TSR

TSR (%)

5

15

10

0S&P 500 Median TSR S&P 500 top 3rd TSR

S&P 500 TSR Benchmarks – expected returns

51

6-7%

10-11%

Multiple sources including BCG Investor Survey and Value Line

TOP-THIRD TSR EXPECTATIONS

Organic revenue growth

Margin expansion

Dividend yield

Buybacks

TSR Drivers through FY19:

+3-4%

+3-4%

+3-4%

+0-1%

Organic TSR 9-13%

Acquisitions and/or multiple expansion +++

Robust digital strategy with range of monetization options fueled by leading brands, content and scale

Stronger broadcasting revenue upside from political year, retransmission uplift, and non-political advertising

Planned annual dividend increases to deliver peer-leading, stable yield, and floor on stock

Aggressive buyback program that capitalizes on current undervaluation and returns excess cash

Total TSR At Least Top Third 52

MEREDITH’S INVESTMENT THESIS

Portfolio of highly rated television stations in large and fast-growing markets

Trusted national brands with an unrivaled female reach

Profitable and growing digital business

Growing consumer-generated revenue

Experienced management team with a proven record of operational excellence and shareholder value creation over time

Strong and consistent cash flow generation, driven by:

Commitment to delivering Top-Third Total Shareholder Return:

1.

2.

3.


Dividend payer for 70 years; increases for 24 consecutive years

Share buyback program


53

TODAY’S AGENDA




Total Shareholder Return Strategies o Joe Ceryanec, CFO


54

APPENDIX I: SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES

55

Year Ending June 30, 2017E1

Local Media Group

National Media Group

Operating profit 213$ 154$ Depreciation and amortization 35 18 EBITDA 248 172 Fiscal 2017 special items

Write-down of contingent consideration payable - (20) Severance and related benefit costs - 8 Write-down of impaired assets 2 - Total special items 2 (12)

Adjusted EBITDA 250$ 160$ 1 Wall Street Consensus for Fiscal 2017 ending June 30

APPENDIX II: SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES

56

Years ended June 30, 2009 2011 2013 2015 2017E1

(In millions)

Net earnings (loss) (107)$ 127$ 124$ 137$ 186$ Net interest expense 20 13 13 19 19 Income taxes (53) 81 74 86 110 Discontinued operations 5 4 - - - Operating profit (loss) (135) 225 211 242 315 Depreciation and amortization 43 40 45 58 54 EBITDA (92) 265 256 300 369 Special items 309 - 12 19 (10) Adjusted EBITDA 217$ 265$ 268$ 319$ 359$ 1 Wall Street Consensus for Fiscal 2017 ending June 30

Investor Day PresentationJune 6, 2017

Documents

June 6, 2017 · 2017-06-06 · Local Media Group Growth Strategies o ... HH in the DMA (M) DMA #1-60. Average Revenue / Station: $51M. ATTRACTIVE STATIONS IN LARGE & GROWING MARKETS