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    ANNUAL REPORT FY 2020


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    Contents Strategic Report 6 GROUP OVERVIEW 8 CHAIRMAN’S STATEMENT 12 OUR VISION AND STRATEGY 14 HOW WE EXECUTE OUR STRATEGY • Protect the core, grow existing brands & audiences • Ongoing diversification • Operating leverage • The Future Playbook 22 LENS ONE - GLOBALLY 24 LENS TWO - DIVISIONALLY 26 LENS THREE - VERTICALLY • Future Passions • Future Living • Future B2B 34 CHIEF EXECUTIVE’S REVIEW 38 RISKS AND UNCERTAINTIES 40 SUMMARY OF PRINCIPAL RISKS 44 HOW WE ENGAGE WITH OUR STAKEHOLDERS 49 COVID-19 RESPONSE 50 CORPORATE RESPONSIBILITY Financial Review 56 FINANCIAL REVIEW Ranvir Singh photographed for Woman & Home magazine 2 / FUTURE PLC


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    ANNUAL REPORT FY 2020 Corporate Governance 62 CHAIRMAN’S INTRODUCTION 64 GOVERNANCE FRAMEWORK 66 BOARD OF DIRECTORS 70 NOMINATION COMMITTEE 74 AUDIT AND RISK COMMITTEE 80 DIRECTORS’ REMUNERATION REPORT 84 DIRECTORS’ REMUNERATION POLICY 94 ANNUAL REPORT ON REMUNERATION 104 DIRECTORS' REPORT Financial Statements 112 INDEPENDENT AUDITORS’ REPORT 120 CONSOLIDATED INCOME STATEMENT 120 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 121 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 121 COMPANY STATEMENT OF CHANGES IN EQUITY 122 CONSOLIDATED BALANCE SHEET 123 COMPANY BALANCE SHEET 124 CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS 125 NOTES TO THE CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS 127 ACCOUNTING POLICIES 134 NOTES TO THE FINANCIAL STATEMENTS 164 NOTICE OF ANNUAL GENERAL MEETING 174 SHAREHOLDER INFORMATION ANNUAL REPORT AND ACCOUNTS FY 2020 / 3


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    Strategic Report 6 GROUP OVERVIEW 8 CHAIRMAN’S STATEMENT 12 OUR VISION AND STRATEGY 14 HOW WE EXECUTE OUR STRATEGY • Protect the core, grow existing brands & audiences • Ongoing diversification • Operating leverage • The Future Playbook 22 LENS ONE – GLOBALLY 24 LENS TWO – DIVISIONALLY 26 LENS THREE – VERTICALLY • Future Passions • Future Living • Future B2B 34 CHIEF EXECUTIVE’S REVIEW 38 RISKS AND UNCERTAINTIES 40 SUMMARY OF PRINCIPAL RISKS 44 HOW WE ENGAGE WITH OUR STAKEHOLDERS 49 COVID-19 RESPONSE 50 CORPORATE RESPONSIBILITY 4 / FUTURE PLC


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    Marcus Rashford photographed for FourFourTwo magazine Photographer: Nick Eagle ANNUAL REPORT AND ACCOUNTS FY 2020 / 5


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    Group Overview Group Overview Future plc is a global platform for specialist media, listed on the London Stock Exchange (symbol: FUTR). These highlights refer to the Group’s annual results for the year ended 30 September 2020. Media division KPIs Online users1 (million) Event attendees (thousand) FY 2020 281.8 FY 2020 100 FY 2019 181.0 FY 2019 151 FY 2018 118.0 FY 2018 155 FY 2017 49.0 FY 2017 76 Total global monthly online users to Future websites. Source: Google Analytics Number of visitors to Future events includes 32 in-person events held virtually 1 All figures are excluding forums as they are non-commercial websites for in FY 2020 due to COVID-19. which Future does not write content or actively manage or monetise. Previously reported figures have been restated to exclude forums. FY 2020 forums only online users are 17.1m (FY 2019: 25.3m). Online users figures from FY 2019 have also been restated to exclude SmartBrief newsletter subscribers which have been reclassified to email newsletters. eCommerce transactions (million) Email newsletter subscribers (million) FY 2020 13.6 FY 2020 9.4 FY 2019 9.8 FY 2019 7.0 FY 2018 3.2 FY 2017 2.0 Number of transactions made via affiliate links on Future websites. Total subscribers to Future email newsletters. Data available from FY 2019. Magazine division KPIs Total circulation (million) Total subscribers (million) FY 2020 3.8 FY 2020 1.5 FY 2019 1.5 FY 2019 0.9 FY 2018 1.3 FY 2018 0.9 FY 2017 1.0 FY 2017 0.5 Total of each magazine and bookazine circulation per issue. Number of subscribers to Future magazines per issue. 6 / FUTURE PLC


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    Strategic Report Corporate KPIs Revenue (£million) Global audience (million) FY 2020 339.6 FY 2020 393.6 FY 2019 221.5 FY 2019 269.2 FY 20182 130.1 FY 2018 193.4 FY 2017 84.4 FY 2017 85.6 Consolidated Group revenue. Includes magazines and bookazines circulation, online users (excluding forums), event attendees, social media followers (Twitter, Facebook and YouTube) and newsletter subscribers. Adjusted operating profit (£million) FY 2020 93.4 FY 2019 52.2 FY 2018 18.5 FY 2017 8.9 Adjusted operating profit represents earnings before share-based payments (relating to equity-settled awards with vesting periods longer than 12 months) and related social security costs, interest, tax, amortisation of acquired intangible assets, fair value movements on contingent consideration (and unwinding of associated discount) and currency option, and exceptional items, and any related tax effects. Adjusted operating profit margin Reported operating profit (£million) FY 2020 28% FY 2020 50.7 FY 2019 24% FY 2019 26.7 FY 20182 14% FY 2018 5.3 FY 2017 11% FY 2017 0.8 Adjusted operating profit margin is adjusted operating profit as a Consolidated statutory operating profit. percentage of revenue. Adjusted free cash flow (£million) Free cash flow (£million) FY 2020 96.0 FY 2020 87.9 FY 2019 53.7 FY 2019 49.7 FY 2018 17.4 FY 2018 12.3 FY 2017 15.3 FY 2017 10.2 Adjusted free cash flow is defined as adjusted operating cash inflow less Free cash flow is defined as a statutory operating cash inflow less capital expenditure. Adjusted operating cash inflow represents operating capital expenditure. cash inflow adjusted to exclude cash flows relating to exceptional items and settlement of employer's social security costs on share-based payments, and to include lease repayments following adoption of IFRS 16 Leases. Adjusted diluted EPS (p) Leverage FY 2020 74.7 FY 2020 .60x FY 2019 47.5 FY 2019 .74x FY 2018 24.3 FY 2018 .86x FY 20173 18.4 FY 2017 .91x Adjusted diluted EPS represents adjusted profit after tax divided by the For FY 2020 leverage is defined as debt as a proportion of EBITDA adjusted for weighted average dilutive number of shares at the year end date. the impact of IFRS 16 and including the 12-month trailing impact of acquired businesses (in line with the Group’s bank covenants definition). For previous years leverage is defined as total net debt divided by adjusted EBITDA. Notes 2. FY 2018 restated for IFRS 15 Revenue from contracts with customers. 3. Restated for FY 2018 rights issue. ANNUAL REPORT AND ACCOUNTS FY 2020 / 7


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    Chairman’s Chairman’s Statement Statement Richard Huntingford Chairman D ear Shareholders, and scalable technology stack is critical in our ability to In this highly unusual and challenging respond to the changing media landscape; our year, it is my pleasure to report that Future eCommerce capability gives our intent audience what they has continued to thrive, with Future’s need to be guided through online purchases, and our content now read by one in three people in the UK and US. advertising tech stack provides advertising clients with Global audiences increased rapidly during FY 2020 from a high-value targeted audiences. mix of underlying growth in audience engagement, through new launches and acquisitions, and the increased Value-led business consumption of digital content during the pandemic. As a value-led business, we are driven by our purpose and This growth in audience has helped lead to another defined by our values. We have continued this year to focus exceptional year of results. Revenue for the year increased on embedding our value-based culture. Our values support by 53% to £339.6m, with organic revenue growth of 6% our strategy and the way we execute it, so we rely on our driven by strong organic Media revenue growth of 23% Future Playbook to bring alignment in the way we behave which offset the impact of COVID-19 on Magazines and work. Despite the social, economic and environmental revenue, which declined organically by 29%. Adjusted challenges of this year beyond just the pandemic, we have operating profit increased 79% to £93.4m. These results seen the positive effects of our staff living our values. These were delivered despite the unprecedented challenges challenges have brought out the best in our staff; from arising from the pandemic. innovative solutions to continuing to deliver high-quality content and experiences to our communities and our Clear strategy clients, to support and engagement of cultural change, The Group continues to successfully execute on the inclusion and diversity. We recognise that to continue the strategy of being a global platform for specialist media, success of the business we must continue to facilitate a with scalable, diversified brands, and this has resulted in value-led culture, encouraging and enabling our employees strong financial performance and total shareholder return. to operate in this way. We maintain our focus on our purpose, which is to change people’s lives through sharing Stakeholder engagement knowledge and expertise with others, making pages 44 to 48 it easy and fun for them to do what they want. The proven success of our strategy As you will read later in this Annual Report, makes it enduring. Our commitment to our value-led culture was very much to the producing high-quality content, delivered fore in the boardroom, when the pandemic across multiple platforms, helps us expand unfolded, as we sought to understand, respond the loyal communities and audiences we’ve to and balance the needs and priorities of our built up over many years. different stakeholder groups, whose interests With this content at our heart, the and well-being are dependent on our decision- Group has a diversified range of making. I firmly believe that we got the balance revenue streams from as fairly weighted as could have been consumer direct expected. purchases, advertising, eCommerce and Challenging market events. Our innovative FY 2020 has been a year of significant market challenges, from the COVID-19 8 / FUTURE PLC


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    Strategic Report pandemic to economic, social and political disruption, Investing in growth ABOVE: Barcroft and as we enter the financial year 2021 these challenges The Group has a clear acquisition strategy of buying creates content continue. Despite this uncertain backdrop, the Group has businesses in which we can add value through our for global not just been resilient; it has thrived. This is evidenced by diversified business model. Our acquisitions complement platforms such the financial and operational performance, which proves and accelerate our organic growth, and we continually as YouTube, not only that our strategy is enduring and robust, but also diversify by moving into adjacencies, new verticals, and as well as that our value-led culture is a differentiator in a by building out our platform. producing high- challenging landscape. The robustness of our business model - and ability to end television The Group initiated a three-pronged approach, grow during difficult market conditions - means that we for networks, focusing on our employees, clients and stakeholders as remain committed to our strategy to grow both broadcasters we considered how to lessen the impact of the pandemic. organically and through acquisitions. During FY 2020 the and streaming We believe that our approach has proven successful and Group has been able to continue to invest in growth, with platforms. enabled us to deliver our current results and maintain the a number of new launches into new verticals and the momentum into our new financial year. Future is a successful completion of two acquisitions: Barcroft global-first business, which congregates around a shared Studios, in November 2019; and the transformational culture and vision, not locations, and is able therefore to acquisition of TI Media in April 2020. Our proven pivot quickly to adapt to market conditions. We are used integration model enabled us to integrate these to working in a collaborative way across locations, so the businesses in line with our investment case, despite the move to homeworking had minimal impact on our ability restrictions around office working. Since the period end, to deliver to our audiences and customers. Our we acquired CinemaBlend, in early October 2020. diversified business model reduces risk and our unified Barcroft Studios is a video production company with processes and platforms allow us to serve our audience expertise in monetising audiences through social media. and clients in multiple ways. Barcroft creates content for global platforms, including “I want to thank the incredible team at Future who have worked tirelessly and adapted to a new way of working as the Group has continued to provide high quality content to our communities. Once again, Future has proven itself to be one of the most innovative and agile media companies, and that is reflected with this year’s excellent financial results. The Group’s resilience against a challenging market is testament to our strategy and our people.” ANNUAL REPORT AND ACCOUNTS FY 2020 / 9


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    Chairman’s Statement Snapchat and YouTube, as well as producing high-end ABOVE: The The Group also decided to invest in the creation of 150 original productions for networks, broadcasters and opportunities new roles across digital media and technology to support streaming platforms, including Netflix, National to grow these the growth plans; this was announced in early October, Geographic Channel, the BBC and Channel 4. portfolios through and is an investment in the region of £5-6m. This TI Media is a UK-based, print-led consumer magazine Future’s platform investment in resource will support and accelerate our and digital publisher, with deep industry heritage and a of diversified significant online audience growth potential. portfolio of popular brands, including Country Life, revenue streams, Woman & Home, Decanter and Marie Claire. This exciting as well as People acquisition has introduced to Future substantial new growing the At Future, we believe our people are our greatest asset. specialist audiences, including women’s lifestyle, TV brands globally, Their commitment, integrity, resilience and flexibility have entertainment, gardening, wine, golf and a number of is significant and enabled the Group to thrive in these more challenging additional sports verticals, as well as growing the Group’s has already borne market conditions. They bring our values to life in the way presence in home interest, cycling and country sports. fruit. they work and collaborate with each other. In addition, as The opportunities to grow these portfolios through the Group continues to expand through acquisition, which Future’s platform of diversified revenue streams, as well brings changes to the business, our employees have as growing the brands globally, is significant and has shown great resilience and adaptability throughout. already borne fruit, with new launches over the last few On behalf of the Board and our shareholders, I would months in gardening, TV viewing, outdoors, health and like to thank all our employees for their hard work, women’s lifestyle. The Group also announced that dedication and continued passion to the Future cause expected cost synergies of £20m per annum will be during FY 2020, which has been the driving force behind achieved within 24 months, an increase from the £15m the Group’s outstanding results. initially identified. The delivery of these savings is I would also like to make special mention of our Chief progressing well, with the Group already securing annual Executive Zillah Byng-Thorne, and her executive cost synergies of over £20m, of which £3m has benefited leadership team. The pandemic has highlighted the FY 2020. Both of these acquisitions bring an excellent difference between the large cohort of Chief Executives opportunity for the Group to accelerate growth, in both its deemed to be “good leaders” of the companies that they global presence and also the continual development of the run and the small pool of Chief Executives who are “truly diversified platform business model. I am excited by the outstanding leaders”: Individuals who are able to respond opportunities that these acquisitions bring to the Group. to the need for difficult, urgent and far-reaching decision- On the 25 November 2020 the Group announced that making and who, in hugely challenging times, lead with we have agreed the terms of a recommended offer to clarity, bravery, authenticity and empathy, whilst putting acquire the entire issued and to be issued share capital of the needs of others before their own. Zillah has shown GoCo Group plc. We believe that the combination will herself to be just such a leader, supported magnificently significantly strengthen the Group’s proposition of by her executive team. seeking to address the growing consumer demand for informed and value driven purchasing decisions enabled How we create value for our stakeholders by intent driven content. pages 44 to 48 10 / FUTURE PLC


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    Strategic Report syndicate, so I would like to thank them for their continued confidence in our strategy. Board composition We have a strong Board team in terms of experience, entrepreneurial and ambitious spirit and business acumen. It is important that we continue to build a Board that is aligned to the Group’s culture and values, and commensurate with the Group’s FTSE250 status and growth ambitions. The three appointments we have announced this year reflect this commitment. In February 2020 we announced the appointment of Meredith Amdur as an Independent Non-Executive Director. Meredith is currently Chief Executive Officer of Rhetorik, a leading data supplier to technology vendors. She brings knowledge, understanding and experience of the US media market, and especially digitally-led environments. As previously announced, Rachel Addison was appointed as Chief Financial Officer of the Group, Capital structure and dividends effective 1 June 2020. Rachel is a great addition to the The Group continues to be highly cash generative. Future Board as we continue to strengthen and diversify Adjusted free cash flow was 103% of adjusted operating our collective acumen and experience. Rachel, profit (FY 2019: 103%), with net debt of £62.1m at the previously Chief Financial Officer at TI Media, has end of the year. The Board’s policy is that leverage should significant experience in the media market; I am not exceed 1.5x, with an exception for acquisition spikes; delighted to welcome her to the Board. Rachel takes the our year end leverage was 0.6x. Therefore, the Board is place of Penny Ladkin-Brand, who has stepped into her delighted to propose an increased final dividend of 1.6p a new role as Chief Strategy Officer. I would like to take share (FY 2019: 1.0p), payable on 16 February 2021 to all this opportunity to extend my thanks to Penny for her shareholders on the register at the close of business on guidance to the Board over the last five years as CFO. 15 January 2021. Our goal continues to be the In September we announced the appointment of implementation of a progressive dividend policy, and at Mark Brooker as an Independent Non-Executive the same time to balance shareholder returns and Director with effect from 1 October 2020. I am delighted investment in the company to support future growth and to welcome Mark, who has a wealth of experience of optimise value for shareholders. executive and non-executive board roles; his insight and Following the end of the year, the Group agreed a understanding of platform-based businesses will hugely £215m two year term loan in order to part-fund the benefit the Group. recommended offer for GoCo Group plc. In addition the Group's £30m short dated COVID-19 facility was Corporate Governance Section cancelled. This ensures that the business has a balance pages 50 to 53 sheet and debt capacity in line with its objective of not operating with leverage of more than 1.5x (outside of exceptional circumstances). In conjunction with this, and Looking to the future as part of the viability assessment on page 43, the Board After such an exceptional year the Group faces the undertook a detailed going concern review. This included future with confidence. Our value-led culture, reviewing the Group's forecasts and projections, after outstanding team, resilient strategy and confident applying a number of severe but plausible downside investment in growth means this is an exciting time for sensitivities to those projections, and assessing the Future. I am confident that we will continue to deliver headroom on the Group’s credit facilities. Future's significant long-term value for shareholders. diversified revenue model, and strong balance sheet, which includes current headroom of over £100m on available facilities at 30 September 2020 leave the Group well positioned to continue to adapt to market conditions Richard Huntingford in these uncertain times. Chairman The continuing success of the Group and the 10 December 2020 transformative steps we have taken this year is reliant on the support of our shareholders and our banking ANNUAL REPORT AND ACCOUNTS FY 2020 / 11


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    Our Vision and Strategy At Future, our success is the product of aligning our vision and strategy within our organisation, and how we enforce the strategy. Why we exist (Our Purpose) “We change people’s lives through sharing our knowledge and expertise with others, making it easy and fun for them to do what they want.” Future is a global platform We create loyal communities and We are diversifying our for specialist media driven fans of our brands by giving them a monetisation models to by technology, with place they want to spend their time create significant revenue diversified revenue streams and meet their needs streams. We are focused on three material revenue At Future, we pride ourselves on the We succeed by delivering content that connects types: Advertising, heritage of our brands and the loyalty of with audiences, in areas in which we have expertise, Consumer Direct and Intent our communities. recognising that in today’s media landscape Offering core expertise, we are the providing the answers to our audience's needs is We look to grow profitably and generate trusted advisor, who helps enthusiasts the first requirement if you want them to spend cash returns, both organically and follow their passion through time with you. through acquisitions, and aim to do this high-quality content, innovative As we strengthen our global reach across our through diversifying our audience and technology and unique experiences. core verticals, we continue to be proud of the way developing new sources of we bring people together to enjoy shared passions monetisation. wherever they are in the world. Cultivating a highly engaged audience that through our help we are able to monetise is fundamental to everything that we do, and we now reach a global audience of 393.6m (FY 2019: 269.2m) through our websites, events, social media and magazines. 12 / FUTURE PLC


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    Strategic Report Our strategy is underpinned by a number of principles: 1 - Activators Future is our first team and content is our first thought We are aligned on our strategy and purpose. We call this the “Future Playbook” We have common goals. We call this “what’s important right now” We think about the long term as well as the short. We call this “horizon planning” We operate a matrix, which means we go slower to go faster. We use responsibility assignment matrices (RACIs) to help We are diversified globally, divisionally and vertically We take the time to operate as a lean and simple business We are ambitious. We think in terms of leaps not increments We are also brilliant at the basics and believe in marginal gains We take calculated risks in some areas, and we protect those risks through adopting a “maximum acceptable loss” approach 2 - Differentiators We offer the easiest-to-access ‘how to’ advice wherever our audiences are We leverage our data We are expanding our global We have the most relevant review and analytics to drive reach through organic content in the world innovation and execution growth, acquisitions We demonstrate the value of our strategy and strategic partnerships of original content We disrupt through platforms We are a data-rich company, which Investing in our business is a core part We anticipate our customers’ needs uses data insight to better understand of our strategy. That includes ensuring and serve our audience, as well as we invest in our core brands, technology serving our commercial partners. and people as well as looking to acquire 3 - Competitive essentials Through our data insight, we have new assets. In determining what We create meaningful relationships launched new products across our businesses we acquire we are keen to with strategic partners verticals, like the innovation of our ensure that they align with and enhance We blend human and artificial proprietary new lead generation our existing portfolio and further our intelligence product - Falcon, and into new verticals strategic vision. We look for scalable We have simple but brilliant where we see an opportunity, like the brands that have loyal and specialist proprietary software launch of our pets vertical with audiences that can be monetised in We know our customers PetsRadar.com. different ways and that will add value to We have world-class Search the Group. Engine Optimisation ANNUAL REPORT AND ACCOUNTS FY 2020 / 13


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    ECOMMERCE ADVERTISING & LEAD GEN PLATFORM AS CONTENT How we execute A SERVICE PUBLISHING & LICENSING HOW O... CONTENT EWS How we execute our strategy REVI T DATA CRM EVENTS & INTEGRATED our strategy MARKETING NEWSTRADE MEMBERSHIP & SUBS We believe that strategy is about having that by breaking our strategy down into achieving a balance of more predictable a series of intentional steps to help us intentional steps we manage risk and revenue streams, with increased achieve our goal. Future’s vision is clear: can adapt to changing landscapes in an recurring revenues online to further to be a global leader in helping people agile way. ensure stability in our business. As the achieve their goals, utilising our expert Annually we set out our key areas of way we reach our audiences and how we advice and content. focus and what we want to do in order to monetise them is experiencing We use McKinsey’s Three Horizons of ensure we achieve our overarching disruption, we have ensured that our Growth planning approach across the strategic ambitions - we call this What’s goals are focused on staying relevant for organisation as a means of ensuring Important Right Now. We have ensured newer generations and new media that each year our intentional steps that our plan for FY 2021 has enough models. To deliver operating leverage achieve our ambitions. This approach focus on the things which will continue we are focused on continuing to encourages our people to engage with the success of the last three years. optimise our centres of excellence, the strategy in a meaningful and Agreeing on the right priorities is key to streamlined operational base and relatable way and ensures that we delivering on our strategic objectives low-cost locations, while the continual deliver a mix of performance today and and we want to continue our growth transition from print to online enables investment in future performance. We momentum through both organic margin expansion. believe this is critical to underpinning growth in FY 2021 and growth plans for We have three underlying pillars that our longer-term growth. We also believe FY 2022 and beyond. We will focus on help us execute our strategy. 1. Protect the core, grow existing brands & audiences As a purpose-focused company, we concentrate on audiences buy premium products. Its content is highly growing and leveraging our ecosystem of brands, as flexible in that it can pivot to focus on premium products these are the touchpoints in which we engage with our outside of its core of technology and gadgets and cover communities, making it easier for them to do the things other verticals, such as premium men’s grooming, cars they love. We have a combination of heritage and and sports equipment. acquired brands that help us expand market share Future’s brands reach over 393.6m consumers and within our verticals as well as allowing us to enter new business decision-makers every month. By reaching 1 in verticals and access new communities while continuing 3 internet users in the US and UK, we are one of the to ensure we provide expertise in these areas. Our leading media publishers across the UK, US and brands help us deliver targeted highly qualified Australia. This level of engagement gives us market- audiences to our advertising and eCommerce partners. leading positions in many of our verticals, Future is the We continue to nurture our legacy brands by focusing go-to media partner for specialist endemic advertisers, on optimising their revenue streams and innovating while this scale opens up further monetisation. For content. For example, last financial year we expanded example, our launch of the Totally Games video series, the monetisation of our music brands by launching The sponsored by Acer, utilises the best of our gaming Guitarist of the Year competition, a new paid-entry brands (Future Games Show, GamesRadar and our awards event from GuitarWorld, GuitarPlayer and games magazines) and Barcroft’s video monetisation BassPlayer. This enabled us to leverage the model. Overall, we have seen phenomenal online relationships we had with our audiences across these audience growth of 56% year-on-year (excluding leading magazines, and websites, to create a truly forums4) to 281.8m, with 48% organic growth. Whilst unique event. Future’s deep vertical knowledge and this growth was bolstered by the pandemic lockdown, communities of special interest ensure that one of its as people increasingly went online for entertainment, unique selling points is the ability to create new brands news and online shopping, the underlying online from the relationships it has with other niche brands. audience growth (adjusting for COVID-19 impact) was For example, T3 is a lifestyle brand which helps 44%, with organic growth of 37%, as our content 4 2020 online audience to forums: 17.1m, -32% year-on-year. 14 / FUTURE PLC


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    Strategic Report continues to meet and exceed the need of our specialist previously untapped territories such as the US. The ABOVE: Live audiences. Structurally, as there is an acceleration to value of the vertical presence and expertise that came Science’s online, we are best placed to benefit from this as we with this acquisition is already evident in our launches of coverage of develop our brands to serve our communities' needs; new websites Gardening Etc, Fit & Well, What to Watch, COVID-19 Live Science’s coverage of COVID-19 information and Advnture, PetsRadar and My Imperfect Life - launched information and news helped our audience better understand the within just five months of acquisition completion. The news helped our pandemic. Our B2B education brand Tech & Learning speed with which we are able to grow in these acquired audience better produced a range of content about at-home education verticals is a testament to the Group’s operating understand the including how-tos and tips such as our evergreen article leverage built on standard practices and platforms and pandemic. “Free Online Learning Resources For Schools”. flexible operating model, given that this all happened We hold 23 market-leading positions online, in print during the Spring pandemic lockdowns. We are already and in events. We continue to focus on growing our progressing the pipeline for migrating TI Media's market share through organic means and through websites onto our standard Vanilla web platform, with acquisition. The right acquisitions for Future are ones Homes & Gardens, Livingetc and Woman & Home all where we believe we can uniquely create additional value migrated. While the modular nature of our tech stack while accelerating our strategy. Our acquired brands means that those sites that are not yet migrated have benefit from the standard processes and platforms of benefited from being plugged into our ad tech stack, our legacy brands allowing us to optimise their Hybrid, and our eCommerce technology, Hawk, to drive performance. previously untapped advertising and eCommerce The acquisition of TI Media in April 2020 has provided revenues. This is what makes the TI Media acquisition so us with an exceptional opportunity to move into new exciting, as we apply our expertise in serving high- verticals, such as women’s lifestyle, TV and wellness. quality content specific to these communities’ needs, Here we can further monetise these new communities which is highly flexible in terms of reacting to current by applying our platform business model to diversify the trends, as well as our innovative and scalable technology revenue streams and further grow the audience in stack to enable us to fully monetise these communities. ANNUAL REPORT AND ACCOUNTS FY 2020 / 15


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    How we execute our strategy 2. Ongoing diversification We continue to focus on diversifying our business, by works closely with UK content teams. expanding into new monetisation streams and new verticals, The success of this US-first strategy is evident in the which we do organically and through acquisition. Our growth of US online users to Whathifi.com. Having acquired product offering has changed materially with over 240 What Hi-Fi in May 2018, a predominately UK-focused brand, brands in the Group's portfolio, across 18 specialist audience we focused on growing the website in the US using the steps verticals, through innovative new launches, to acquisitions. detailed above, this has resulted in US online users increasing Diversification allows us to have a strong defence against the by 479% to 2.1m in September 2020 compared to 366k in impact of detrimental changes to any one revenue stream, as September 2018. evidenced by the way we pivoted to mitigate the impact of Our acquisition of Barcroft Studios in November 2019, the COVID-19 pandemic on magazines and events, and a presented us with an excellent opportunity to build a new strong offence by seeding longer term opportunities that revenue stream in social media video production, which we enable continued organic revenue growth. Diversification recognise as an important growth area. Barcroft has across verticals, revenue streams and global footprint also significant expertise in effectively monetising video. To fully accelerates our growth, making it a key driver of our strategy. utilise this expertise and embed video monetisation into our Future has operations across the UK and US but we are a diversified business model, which we call the Future Wheel, global-first company that reaches a global audience. The we launched, in September 2020, Future Studios, a growth of our US audience is a key part of our diversification highly-skilled video production centre of excellence, which strategy as we grow organically and through acquisition. focuses on producing and distributing valuable original video Revenue from the US is now at 49% of the Group's total content. revenue, following the acquisition of TI Media in April 2020. On 25 November 2020 we announced that we had made a We are focusing on launching .com brands, in particular recommended offer for GoCo Group plc - a business which utilising the strong brand equity and new verticals acquired owns Gocompare.com, a leading price comparison site, with TI Media, and growing these brand audiences in the US. LookAfterMyBills.com, an energy automated switching site The growth of Realhomes.com is one example of our ability and Myvouchercodes.co.uk, a voucher deals site. This to grow brands in this way. The Real Homes brand, when acquisition, which is subject to shareholder approval, is one acquired from Centaur in August 2017, was a UK-focused that we believe is a compelling mix of complementarity and print brand. We launched Realhomes.com a few months later growth opportunity that will create substantial value for both and since then traffic has continued to grow substantially, sets of shareholders. The full details of the recommend offer with 34% of online users now in the US and Canada. are set out in the Rule 2.7 Announcement. Similarly, we acquired Team Rock in February 2017 and Through the acquisition, we expect to create a leading subsequently launched Loudersound.com, which has seen offering for consumers to help them save money more easily significant growth globally and in the US. by bringing together our depth of audience insight and reach In order to grow online brands in the US, we take deliberate with GoCo Group’s expertise in price comparison and steps to adopt a US-first mindset. These steps include financial services, underpinned by the proprietary switching from .co.uk to .com, focusing keyword and critical technology of both groups. terms research on US traffic volumes, encouraging the use For example, with the benefit of the GoCo Group’s of US English over UK English, changing our social strategy to technology, readers of Realhomes.com making a decision on focus more on US peak hours, and where appropriate home improvements will also have access to relevant energy internationalise content. Internally, we ensure traffic targets products and switching options within the same content, are global, we conduct US relevance checks on new and minimising friction for the reader and anticipating their acquired websites, and ensure that the US audience team purchasing needs, in the same way our Hawk technology 16 / FUTURE PLC


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    Strategic Report advertising during the lockdown period, proving the resilience of our strategy. At the start of the financial year, we launched Future Labs, an agile team that acts as an innovation incubator. Future Labs has built a playbook that industrialises Horizon 3 strategic planning, by identifying opportunities that spark change and then cost-effectively innovate the concept into a minimum viable product. Projects are then incubated by Labs until validated, and once a proven revenue stream, successful projects graduate out of Labs and are integrated into Future’s normal operations. This financial year Labs has innovated a new lead generation technology, Falcon, which captures in-market customer information generated from our eCommerce sales and monetises it multiple times at high cost-per-lead. We have already implemented the Falcon widget onto 15 of our websites and continue to work on adding it to the rest of our sites. With B2B as the core also provides details on the best products and prices. ABOVE: We focus for lead generation we have focused on implementing The new verticals that have come from the TI Media are focusing Falcon on to B2B websites. acquisition provide significant eCommerce potential. For on launching We also ensure that we diversify within our revenue example, the women’s lifestyle sector covers a multitude of .com brands, in streams by reducing reliance on any one partner. In terms markets including beauty, fashion, wellness and homes. particular utilising of eCommerce partners we have a diversified retailer mix; Wellness is a prime market for eCommerce, with fitness the strong brand in FY 2020 Amazon made up 30% of eCommerce revenue, products ranging from at-home gym equipment to equity and new compared to 51% in FY 2017. Our partners cover numerous weighing scales. The launch of our new website Fit & Well verticals acquired markets, which allows us to fully utilise them across all our makes the most of this opportunity, combining the content with TI Media, verticals. Our Hawk technology means we are always able expertise acquired with TI Media and Future’s eCommerce and growing to provide the best price in the market at any given time, technology. Additionally, the TI Media acquisition has these brands and this also includes a stock availability feature. As a result significantly increased our sports portfolio, a significantly audiences in the during the peak of the global lockdowns we were able to large eCommerce market, off the back of which we have US. The growth of pivot results to where the products were available, launched website Advnture. We’ve seen a significant Realhomes.com demonstrating the power of the diversified retailer base. As increase in affiliate click throughs across all the TI Media is one example of our content is data-led we drive high-intent traffic to our sites following the rollout of Hawk. Widget clicks have more our ability to grow eCommerce pages. Our eCommerce strategy is built on than doubled from TI Media’s legacy system to our brands in this way. optimising all areas of the purchase funnel. By working to eCommerce technology Hawk, and this should only improve all metrics, rather than focusing on one, we are improve further as we execute on our eCommerce content creating a multiplayer effect, driving significant revenue plan. growth. Diversified verticals enable us to grow our overall At Future, we work closely with Google and other audience faster, since we can reach a wider group of strategic partners to constantly optimise and evolve our potential readers. Further progress this year has led to 69% Advertising Technology infrastructure. We have partnered of revenue now coming from outside of the technology with a number of leading global 'identity' organisations that vertical, up from 63% in FY 2019. allow us to maintain our ability to serve personalised We place equal importance on growing our existing advertising whilst protecting user privacy. Future operates verticals to entering new ones. This is because, by owning a across a number of highly verticalised areas generating number of brands within the same vertical, we are able to significant amounts of rich first party data of engaged and implement our successful content strategy and ensure we intent-based audience segments. This first party data, meet all our audiences’ needs from Future brands. which is completely unaffected by changes to third party Diversification across multiple content verticals and brands cookies, is already used in the delivery of advertising reduces the risk of search engine algorithm updates campaigns. This detailed understanding of our audiences affecting overall traffic materially, as those changes tend to enables superior targeting capabilities which allows for be vertical-specific rather than broad. advertisers to reach special interest audiences and their In spite of the impact of the COVID-19 pandemic on the purchase intents. global economy, Future has performed strongly; our Future is well positioned to capitalise as buying strategies diversified revenues help us to compensate for downturns evolve; buyers will look for the trusted first party rich in any one revenue stream. We had to cancel three audiences that our portfolio delivers. The advertising significant in-person exhibitions this year and magazine technology solutions we have implemented and continue to sales were affected by the closure of high street stores, but develop ensures we can transact in a multitude of ways to we saw incredible uplift in both eCommerce and digital deliver known and first party audiences at scale. ANNUAL REPORT AND ACCOUNTS FY 2020 / 17


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    How we execute our strategy 3. Operating leverage A number of core elements underpin our operating leverage, from our internal systems and processes to the diversification of our revenue streams. We continue to focus on driving our Media revenues, which are higher margin and subsequently improves our operating leverage. An important part of our strategy for TI Media brands is to grow their online presence. At Future we ensure that we have standard core processes and systems under a simplified business structure, to ensure there is no duplication of costs. These are our centres of excellence which range from back-office functions to editorial practices. We have created a number of Playbooks to ensure equal standards of excellence within all areas of the business. Our Playbooks are embedded into our People & Culture site alongside key information such as people policies and procedures our colleagues and managers need to help them manage their people and career. Additionally, we are working on rolling out Future University modules focused on embedding the Playbooks into the way we work. In September 2020 we launched Future Studios, a new meant we quickly adapted to hold a total of 32 virtual ABOVE: Some video centre of excellence, which unites expertise from events and webinars between March and September this of our biggest Future and Barcroft Studios which we acquired in year, including serving the games market with the Future events, The November last year. Future Studios focuses on producing Gaming Show, since the largest games show of the year, Photography and distributing valuable original video content for E3, could not go ahead. The PC Gaming Show was also a Show, New York internal clients across the Future family. We are investing huge success, with an 18% year-on-year increase in Week and three increasingly in original video production, distribution and advertising revenue. Our events team also reconfigured Homebuilding monetisation as 5G adoption will see average mobile the Decanter World Wine Awards tasting event (usually & Renovating speeds exceed those experienced at home and this will held over five days at ExCeL) to run in the office within all Shows, were held lead to an acceleration in video consumption. appropriate guidelines across three weeks in August to virtually this year. Our philosophy around systemising, having structures deliver £3m entry revenue. Some of our biggest events, and repeatable processes means we are not reliant on The Photography Show and New York TV Week, both being in an office and we are able to pivot quickly. We held virtually in September 2020, and three believe that habit is the key driver of activity within any Homebuilding & Renovating Shows, held virtually in July organisation and so the rhythms and rituals are critical to and September 2020, achieved over 32,300 attendees. It driving behaviour. We completed the acquisition of TI is a testament to the value of our content and our Media in April 2020, more than doubling the number of passionate communities that we continue to engage with staff in the UK. It is a testament to these centres of them whichever the platform. excellence that we have been able to onboard these staff We are a global-first company with a structure that and progress swiftly with the integration despite all staff means we can insource to the lowest cost locations. At working from home and, largely, continuing to do so. In Future, as a result of the global operating model, we are order to onboard our TI Media colleagues remotely we not pinned to local offices but are based around created the Future University, an online training portal to information sharing, virtual meetings and collaborative share best practices, and held over 1,000 one-to-one documents. Our tools, which were designed to be global virtual meet and greets within just two weeks. Despite the by their very nature, are digital and therefore can operate acquisition completing during the Government-enforced virtually. As a global-first company, we value continual lockdown relating to COVID-19, we are exactly on track in communication, particularly during the lockdown, and as terms of integration. such in addition to a number of other formats we hold Due to the pandemic, we had to cancel a number of monthly virtual “town hall” meetings with the Executive in-person events. However, the flexibility of our business Leadership Team for the entire company, utilising chat operations and the ingenuity and dedication of our staff technology for staff to ask questions directly. 18 / FUTURE PLC


  • Page 19

    Strategic Report Future is a value-based, purpose-led company and as continues to deliver revenue in FY 2020. While by such, we aim to achieve cultural alignment between all focusing on content that has the potential to drive the our staff. Our culture is more democratic than most revenue we attract intent traffic to our websites hierarchical and this empowers our staff to make which feeds our eCommerce revenue stream. Much of decisions, streamlining the process and ensuring that this content is “evergreen” in nature, which means that great ideas come to the fore and we continue to innovate. articles we paid for and published years ago are still One of the core enablers of our operating leverage is driving revenue for us today. our approach to content creation. We write content once Our flexible and scalable tech stack supports organic and then publish multiple times. Revenue content growth and acquisitions. 38 sites are now on our Vanilla compounds over time; content paid for in prior years web platform, two of which are TI Media sites (with an additional TI Media site migrated since the end of the financial year), while six new launches in the last six months have been in relation to the brands developed as Total Digital Revenue a result of TI Media acquisition - My Imperfect Life, - Stacked by Article Creation Financial Year (Excluding Mobile Nations) Gardening Etc, Fit & Well, What to Watch, Advnture and 2020 End of FY 2019 PetsRadar. We have a one platform approach with all 2019 staff operating on common systems and swift transition 2018 following integration. Implementing our tech stack onto 2017 newly acquired websites enables Future to gain scale. 2016 The successful implementation of our technology <2016 unknown year stack and centres of excellence to our acquisitions of Mobile Nations, SmartBrief, cycling brands and Barcroft Studios, has resulted in revenue growth of 12% year-on-year, on a full year FY 2019 proforma basis, despite the challenges of the pandemic. Barcroft receives a commission on advertising-based video on demand revenue for their videos on social channels, which has increased by 45% year-on-year, and additionally, advertising-based video on demand Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-19 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 revenue we sell directly for the Group has increased by Chart includes digital advertising and eCommerce revenue and excludes Mobile Nations because data is not available. 156% year-on-year. ANNUAL REPORT AND ACCOUNTS FY 2020 / 19


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    How we execute our strategy How we execute our strategy THE FUTURE PLAYBOOK We have created the Future Playbook, which is a guide for our staff on the "rules of the game" at work. We share the Playbook with every new member of staff to ensure we are aligned on our strategy and how we execute it. As a value-led business the Playbook plays a pivotal role in ensuring we have an aligned culture by including our six values on how we behave. Providing staff with a clear guide to our values and our strategy ensures we are focusing on the same goals. We move faster when we all pull in the same direction. 1 We are part of the audience and their community Our passion for our products makes us 2 Let's do this We take the best decisions we can in the face of uncertainty. It makes us think each decision through – then part of the community we engage with. we go for it. We commit to what we’ve Our audiences give us a voice and that’s agreed and have the confidence to an incredible privilege that we treat persevere through tough times. But with reverence. We embrace all the we’re able to admit mistakes ways we are able to communicate because that helps us learn and to our audiences – print, online chart a new course when we and in person – and love need to. That’s called doing so. ‘doing it right’. 3 We are proud of our past and excited about our future 4 It’s the people in the boat that matter Having the right team in the boat is mission critical. We are all successful when we are self-motivated, We are proud to work at Future, self-aware and self-disciplined. We because being part of this team support each other, challenge each feels good. We are one team, other and have fun with each other. one company with big We are determined to hire people ambitions. we can learn from and who we would have as our boss. 5 We all row the boat No matter how long you’ve worked here, or what your role is at Future, your 6 Results matter – success feels good We love being successful. We contribution counts – so grab an oar! We move faster when everyone pulls in the restlessly look to improve, be ever same direction. So what you do – and creative, and commercial in our how you do it – matters. We take ventures. Great results mean we are responsibility because that’s the able to align the needs and best way to get things done. We expectations of our audiences, collaborate because we’re communities, clients and stronger together. shareholders. 20 / FUTURE PLC


  • Page 21

    Strategic Report ECOMMERCE ADVERTISING The Future & LEAD GEN Strategy Wheel PLATFORM AS CONTENT A SERVICE PUBLISHING & LICENSING HOW O... EWS CONTENT REVI T DATA CRM EVENTS & INTEGRATED MARKETING NEWSTRADE MEMBERSHIP & SUBS Future’s Business Model The Future Strategy Wheel Monetising the wheel We have a clear purpose: to change people’s lives through sharing We continue to build on our Future Wheel, this year adding video and knowledge and expertise with others, making it easy and fun for them lead generation revenue streams. We have also made significant to do what they want. progress in monetising our brands and their content, organic and Our strategy is aligned with fulfilling this purpose by building our acquired, through the different revenue streams. The Future Wheel global communities and increasing the ways in which we serve them serves our audiences through online, events, print and video, ensuring our content, in line with their needs. One of our key differentiators is that we provide our content in the most useful way possible. that we are part of our communities, meaning we enjoy sharing our Our robust and scalable tech stack means that it is simple for us to knowledge and expertise with our audience. grow brands by adding new revenue streams. We have already To ensure that our business model is truly diversified our strategy introduced our eCommerce technology Hawk and our ad technology of diversification is focused on three distinct elements: Hybrid to the acquired TI Media websites. We also focus on making our 1. globally; content as monetisable as possible by focusing on reusable content, 2. divisionally; and such as from magazine to online content and content that can be easily 3. vertically. translated to other geographic territories. This means we maximise It is the combination of these three elements that drives the our editorial teams’ efficiency as well as increasing the evergreen success of our diversification strategy, as we are able to capitalise on nature of our content for which revenue compounds over time. all opportunities and win across all areas. Alongside this is our We acquired Real Homes in July 2017. The brand was UK-focused diversified business model, which we continue to build on in order to with little digital reach. We transformed the brand by building out its meet our audience’s needs in whichever way required. This is the revenue streams into eCommerce, a video series, and re-launched the Future Wheel. website on our Vanilla platform with our ad tech stack implemented. Additionally we significantly broadened its online reach outside the UK; US online users to the website have grown from 7.1k online users when it was re-launched in November 2017 to 456k online users in September 2020. ANNUAL REPORT AND ACCOUNTS FY 2020 / 21


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    LENS ONE – GLOBALLY Lens one - globally Future's Markets Our business model is global-first in that our content, processes and systems are not fixed to where we operate geographically. We run this global approach from our operations across two geographies. US UK We have substantial reach in the US and Canada, The UK operations include our Australia business, reaching a total of 136.2m online users (excluding which acts as a complete satellite branch. The UK forums). US operations consist of editorial, video operations monetise all of our online audience production, advertising sales and events across outside of the US and Canada. The UK is where the websites, video, newsletters and magazines. The majority of our consumer print magazines are largest part of our B2B content and operations are produced, as well as joint centres of excellence for based in the US, including SmartBrief which is based back office, including finance, HR and technology, in Washington DC. The US accounts for 49% of with facilities in Bath and Grenoble, France. The UK Group revenue, and 57% of Group organic revenue, also houses the Group’s licensing operation which driven by our US-first brand strategy. facilitates content distribution for both online and print publications into 37 countries. In Australia we FY 2020 FY 2019 have brands including Get Price, APC and PC Revenue £m5 167.7 118.8 PowerPlay which all serve the local market. Online users m6 136.2 91.0 43% of Group organic revenue came from the UK No. of events 30 31 operations in 2020, which is a result of us focusing on Circulation m 0.4 0.6 expanding our US audience. Total revenue in the UK Subscribers m 0.4 0.5 made up 51% of Group revenue, which is a reflection of 5Revenue excludes intra-group revenues the UK-based TI Media acquisition. 6 Online users exclude forums. FY 2020 US & Can online users to forums: 7.4m, -34% year-on-year. FY 2019 online users restated due to re-classification of SmartBrief online newsletter FY 2020 FY 2019 subscribers to email newsletters Revenue £m5 171.9 102.7 Online users m7 58.5 30.3 No. of events 20 25 Circulation m 3.4 0.9 Subscribers m 1.1 0.4 7Online users exclude forums and include online users from UK 46.5m and AU & NZ 12.0m. Rest of World online users 87.1m are not included 22 / FUTURE PLC


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    Strategic Report United States United Kingdom Number Number of staff: of staff: 398 1,600 Offices: Offices: New York and London, Bath, Washington DC Farnborough 8 OFFICE LOCATIONS France Australia Number Number of staff: of staff: 15 24 Office: Office: Grenoble Sydney 8 Number of staff as at September 2020 ANNUAL REPORT AND ACCOUNTS FY 2020 / 23


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    LENS TWO – DIVISIONALLY Lens two - divisionally Media Division ECOMMERCE ADVERTISING & LEAD GEN PLATFORM AS CONTENT A SERVICE PUBLISHING & LICENSING HOW O... CONTENT EWS MEDIA REVI DATA T CRM EVENTS & INTEGRATED MARKETING NEWSTRADE MEMBERSHIP & SUBS Our Media division consists of all revenue streams outside of magazines. MEDIA KPIs This includes eCommerce, digital advertising, events, lead generation, newsletters and CRM, and digital licensing. Our digital advertising revenues are generated from first party sold, programmatic and content solutions. eCommerce revenues are where we receive a commission on sales made by our retail partners. 281.8m 100k event Lead generation revenues are generated from us matching our customers with online users attendees, the right product suppliers, for which they pay per lead. Events and integrated (excluding both live forums) and virtual marketing revenue is generated from sponsorship and ticket sales to our 181.0m in FY 20199 151k in FY 2019 consumer and B2B events, as well as events we hold for our advertising partners as part of creative solutions. Our CRM revenue streams are primarily generated from SmartBrief which produces, and monetises through advertising and email newsletters for our B2B partners. 13.6m 38 digital Our Media division drives significant growth within our business as we focus on eCommerce licensing transactions partners delivering our content digitally. This is underpinned by our scalable tech stack 9.8m in FY 2019 14 in FY 2019 which allows us to accelerate online growth through eCommerce tech Hawk, ad tech Hybrid, lead generation tech Falcon, email newsletter tech, as well as our common web platform Vanilla. Additionally, the acquisition of Barcroft Studios in November 2019 added an important new element to our Media division - that of 98.7m social 9.4m email media followers newsletter video production and monetisation. 52.0m in FY 2019 subscribers Media revenues are now generated from 111 websites and 66 events (50 of 7.0m in FY 2019 which were held this year) in the UK, US and Australia. 9 2020 online users to forums: 17.1m, -32% year-on-year. FY 2019 online users restated due to 24 / FUTURE PLC re-classification of SmartBrief online newsletter subscribers to email newsletters


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    Strategic Report Magazine Division ECOMMERCE ADVERTISING & LEAD GEN PLATFORM AS CONTENT A SERVICE PUBLISHING & LICENSING HHOW O.... CONTENT IEWSS MAGAZINES RREV DATA T CRM EVENTS & INTEGRATED MARKETING NEWSTRADE MEMBERSHIP & SUBS The Magazine division is the home of our extensive range of specialist MAGAZINE KPIs magazines and bookazines both in print and digital format. Our magazines are exported to many countries in addition to being sold in the UK on the newsstand and through subscription. We have a portfolio of 115 magazines, which has increased this year due to the acquisition of TI Media in 3.8m total 1.5m April 2020. We have an extensive range of bookazines, and published 410 circulation10 subscribers throughout FY 2020. Our total global circulation of magazines and 1.5m in FY 2019 0.9m in FY 2019 bookazines is 3.8m, up from 1.5m in FY 2019. Subscriptions make up 39% of total circulation10 and we continue to focus on building engagement with our readers to increase subscription sales. We also have a strong print licensing revenue stream, where we generate revenue from our specialised content. We have a total of 96 regular frequency 115 magazines 410 bookazines print licensing agreements across 28 countries. published published 78 in FY 2019 568 in FY 2019 Future Fusion, our in-house creative services agency, also sits within the Magazine division and creates content and strategy for ambitious brands that want to power up their own channels with effective content. 10 Total of each magazine and bookazine circulation per issue. ANNUAL REPORT AND ACCOUNTS FY 2020 / 25


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    LENS THREE – VERTICALLY Lens three - vertically Loyal Communities – Our Verticals By creating content that meets the needs of our audiences and helping them do the things they love, we create strong specialist communities. At Future, we believe that loyal communities are a differentiator in media; where we create content that meets a need and as a result has a value for our partners. Our brands span three core verticals: Passions, Living, and B2B. Reaching large audiences across diversified verticals 394 m audience reach 11 11 Sum of verticals does not equal total due to rounding 26 / FUTURE PLC


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    Strategic Report Davina McCall photographed for Woman & Home magazine ANNUAL REPORT AND ACCOUNTS FY 2020 / 27


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    Future Passions Lens three - vertically Our Passions core vertical is focused on consumer hobbies and interests. The word passions reflects the high engagement of the audience in this core vertical. They are passionate about their interests and as part of our communities we are too. Tech Specialist photography brands provide photography and timely information. Live Science holds a Our tech specialist portfolio includes professionals, amateurs and enthusiasts number one position in the UK and US. This Future legacy brands like TechRadar, and advice on how to improve their images, find vertical is also the home of our new wellness acquisitions such as What Hi-Fi, Tom’s the best gear and get inspiration. website Fit & Well, helping people live a better, Hardware, Windows Central, Android Central Our extensive design portfolio provides healthier, happier and longer life. We have and iMore. Each brand focuses on a distinct insight and inspiration to professional significant total audience reach of 56.2m with niche within consumer technology and designers and illustrators, sharing peer-to- online users up 53% year-on-year (excluding includes magazines, websites and events, peer advice to help them be more successful. forums). reaching a total audience of 107.6m. Online We are market-leading both in print and online audience figures are 98.9m (excluding in the UK and online in the US. Sports forums), up 27% year-on-year. Our expert, We have seen strong growth in online Our sporting brands combine expert specialist content connects with users audience to our photography and design editorial with decades of heritage. We are across the consumer spectrum, providing portfolio, up 27% year-on-year (excluding a trusted destination for a wide range of accessible, informative technology news, forums), with Digital Camera World in sports enthusiasts, whatever their skill level, reviews, how-tos and buying guides. particular showing significant growth of 34% from football to rugby, cycling to yachting. (excluding the forum). Our acquisition of TI Media significantly Gaming & Entertainment boosted our sports portfolio and we took Our gaming & entertainment portfolio has Music the opportunity to combine editorial and been the voice of authority and source of We are the UK’s most extensive music commercial expertise to launch a new sports influence for gamers across digital, events portfolio, with websites, magazines and website Advnture in July 2020. Our sports and print for over 30 years. Our content events covering all genres, from rock to brands have a total audience reach of 17m and engages with a wide audience from hardcore acoustic, drumming to electronic music. our road cycling portfolio is market-leading in gamers to casual and social gamers. Our MusicRadar provides trusted gear reviews, the UK. Online audience is up 217% year-on- brands have a total audience reach of 62.3m alongside current gear news and expert year to 10.7m (excluding forums). and an online audience of 44.6m (excluding tuition. Our music audience is highly engaged forums), up 67% year-on-year. Brands include with 11.4m social media followers, and a total Homes & Gardens GamesRadar, Future Games Summit and PC online audience of 9.5m, up 32% year-on-year. Creating beautiful content for the home lover, Gamer, the number one PC gaming website in our home interest brands cover everything the UK, US and Australia. Knowledge & Wellness from the vintage and classic to modern With expert editorial teams across history, interiors and home-building projects. With an Photography & Design science and technology, our knowledge audience reach of 16.4m, across magazines, Our photography portfolio is market leading - portfolio provides engaging and authoritative online and events we are the market leader with our flagship photography website Digital content for all ages. During the COVID-19 in home interest in the UK. Online audience Camera World holding number one position pandemic our science brand Live Science is up 417% year-on-year to 6.8m (excluding in the UK and number three in the US. Our has been invaluable in providing accurate forums). BREAKOUT CASE STUDY Launched in July 2020 Advnture.com is the home of outdoor buying advice, providing expert guidance and inspiration for everyone taking part in outdoor sports and activities. Advnture capitalises on the eCommerce opportunity around outdoor gear and fully utilising content from our sports magazines. 28 / FUTURE PLC


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    Strategic Report Brands include: Vertical audience stats: Total Total online Total events: Total social circulation:12 users: 19 (down from media 1.3m 225.7m 26 in FY 2019); followers: (up from (up from 85.9k attendees 64.1m 1.1m in 153.6m in (down from 144k FY 2019) FY 2019)13 in FY 2019) Market-leading positions: 19 Number 1 publisher in technology online in the UK Number 1 in home interest in print and in homebuilding events in the UK Number 1 space website in the US and UK Number 1 music-making print publisher in the UK and US Number 1 photo website and event in the UK Number 1 in creative design online and in print in the UK and online in the US Number 1 road cycling website in the UK Number 1 hi-fi print publisher in the UK Number 1 equestrian print publisher in the UK Number 1 boating and yachting print publisher in the UK Number 1 games print publisher in the UK 12 Total of each magazine and bookazine circulation per issue. 13 Excludes forums. 2020 Future Passions online users to forums: 13.6m, -30% year-on-year. ANNUAL REPORT AND ACCOUNTS FY 2020 / 29


  • Page 30

    Future Living Lens three - vertically Our Future Living core vertical provides a focus on all things lifestyle and the way we live. Home to many iconic brands Living has a digital-first, global headset. Women’s Lifestyle What to Watch in July 2020 and our and inspirational events and competitions, Our women’s lifestyle vertical acquisition of website CinemaBlend in design and lifestyle magazine Wallpaper, inspires and entertains women in an October 2020, furthers our digital presence and tech lifestyle brands T3 and Tom’s approachable and lively manner by focusing and ensures that this vertical remains at the Guide for tech innovation lovers as well on the things that matter to them. This new forefront of TV and film content. as travel, fitness and style. The portfolio vertical, established with the acquisition of also encompasses new launch PetsRadar, TI Media, includes iconic brands such as Country Lifestyle a digital pets brand with a mission to help Woman & Home and Marie Claire UK, the Our heritage country lifestyle print brands the world’s pets lead happier, healthier and portfolio has an audience reach of 21.3m have a combined age of more than 400 longer lives. The portfolio has an audience globally, including 12.1m online, up 45% years. We are the UK’s leading country reach of 42.1m across print, online and year-on-year on a proforma basis. Launched lifestyle portfolio with an audience reach events. Online users are up 63% year-on- in September 2020, website My Imperfect of 2.1m, with online audience of 1.4m, up year to 38.1m (excluding forums). Life is an informative and relatable site 32% year-on-year on a proforma basis. Our helping young millennial women navigate diverse range of brands cover all countryside Real Life the realities and demands of their lives pursuits and interests from celebrating the Our real life vertical’s mission is to inspire the today. most beautiful countryside, finest houses world through our amazing real life stories. and gardens, to caravanning, and shooting. These brands position us at the forefront TV & Film of popular culture and allow us to reach With a global audience reach of 4.9m, Tech Lifestyle large and growing audiences through our our TV & film portfolio consists of iconic Tech lifestyle is our newly created vertical, focused social and digital strategies. The brands such as Total Film and SFX as well opening up new opportunities to diversify acquisition of Barcroft Studios in November as heritage brands such as TV Times. The our brands and reach larger audiences. 2019 introduced video and social strategy portfolio covers TV listings, TV and film news The portfolio includes Decanter, the UK’s which is the linchpin of the real life vertical. and reviews and exciting entertainment leading wine media brand, providing The portfolio reaches 19.8m social media features. Our new launch of website authoritative content, independent advice followers. BREAKOUT CASE STUDY Website What to Watch was launched in July 2020. The site harnesses the content, expertise and broad audience reach of Future’s TV entertainment brands, helping users to binge smarter and guides consumers through today’s confusing video programming choices, advising them on the services and gear they need. 30 / FUTURE PLC


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    Strategic Report Brands include: *acquisition post period end Vertical audience stats: Total Total online Total social media circulation14: 2.2m users: 53.9m followers: 33.8m (up from 106k (up from 25.2m in FY 2019) in FY 2019)15 Market-leading positions: 3 Number 1 Number 1 Number 1 Countryside & shooting print wine magazine county print publisher in the UK publisher in in the UK the UK 14 Total of each magazine and bookazine circulation per issue. 15 Excludes forums. 2020 Future Living online users to forums: 3.5m, -40% year-on-year. ANNUAL REPORT AND ACCOUNTS FY 2020 / 31


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    Lens three - vertically Brands include: Vertical audience stats: Future B2B Total Total email Total Total Total circulation16: newsletter online events: attendees 244k subscribers: users: 2.16m 31 14.6k Our B2B portfolio includes many leading B2B publications, (down from 6.6m (up from (up from (up from 313k in (up from 2.15m in 30 events 7.2k in websites and events. With a total audience reach of 9.6m, our B2B FY 2019) 6.0m in FY 2019) in FY 2019) FY 2019) brands connect audiences with expert content intelligently, effectively FY 2019) and efficiently. The portfolio covers a diverse range of sectors including Market-leading positions: 1 education, telecommunications, AV, media and entertainment, and technology. Our B2B vertical takes full advantage of our diversified business model, Number 1 with revenue streams from newsletters, online advertising, print and AV tech print events. The acquisition of SmartBrief in July 2019 gave Future access to publisher in the US new B2B sectors as well as expertise in newsletter monetisiation. This 16 Total of each magazine and bookazine circulation per issue. expertise combined with Future’s centres of excellence in marketing and advertising has resulted in a scalable and robust B2B business model. BREAKOUT CASE STUDY Response to COVID-19 pandemic: our B2B vertical showed its strength and flexibility during the pandemic. The B2B events team quickly adapted to the closure of live events to host a total of 24 virtual B2B events, with total attendees of 12.3k. Additionally, the B2B editorial teams were quick to adapt content to provide audiences with the most relevant and needed content, particularly in the education portfolio which offered advice on at home teaching. 32 / FUTURE PLC


  • Page 33

    Strategic Report SOURCES & DEFINITIONS Organic Organic growth defined as the portfolio at constant FX rates (i) excluding acquisitions and disposals made during FY 2019 and FY 2020 and (ii) including the impact of closures and new launches. Online audience Online audience is online users taken from Google Analytics. Unless otherwise stated, online users are the monthly average for the year. Online internet users reach Online reach of internet users is taken from comScore Media Metrix; UK is as at July 2020, desktop age 6+ and mobile age 18+ and US is as at September 2020, desktop age 2+ and mobile age 18+. Total audience reach Audience reach consists of: the sum of each magazine and bookazine circulation per issue + monthly online users (excluding forums) + event attendees + newsletter subscribers + online subscribers + social media followers (Twitter followers, Facebook fans, YouTube subscribers and Instagram followers). Market positions • Online market positions are based on comScore online unique visitors in relevant comScore categories and competitive sets - July 2020 (UK), September 2020 (US), desktop age 2+ and mobile age 18+. • Print market positions are based on newstrade copy sales (Oct 2019 - September 2020) and ABC circulation within ABC defined market sectors for the period January-June 2020. • Advertising market positions are based on competitor ad spend from MediaRadar (July 2019-June 2020). ANNUAL REPORT AND ACCOUNTS FY 2020 / 33


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    Chief Chief Executive’s Review Executive’s Review Zillah Byng-Thorne Chief Executive T he Group achieved exceptional results in to 74.7p (FY 2019: 47.5p). FY 2020. Despite the challenging market The Group continues to increase the Media division resulting from the COVID-19 pandemic, share of total revenues, and eCommerce and digital Future has thrived by taking advantage of the advertising have had a phenomenal year in terms of changing market landscape to deliver content to our revenue, up organically 58% and 15% year-on-year communities in different ways. The success has been respectively. These revenue streams have benefited from driven by Future’s value-led culture, which is aligned the significant increase in our audience scale during the throughout the business, resulting in agile and innovative lockdown period, which accelerated the growth in people staff who have adapted and thrived under challenging consuming content and shopping online. While we circumstances. benefited from the impact of the growth during lockdown, Group revenue has grown by 53% year-on-year to what was particularly pleasing to see was exit audience £339.6m (FY 2019: £221.5m), driven by a combination of growth rates of 29% in September 2020, outlining the organic growth and acquisitions, underpinned by core underlying strength of the business outside of continued online audience growth (+56%) to 281.8m17 lockdown. Media accounts for 70% of total revenue, and (48% organic growth). Group organic revenue grew by 6% proforma with full year TI Media financials it accounts for (H1: 11%; H2: 1%) as our diversified strategy more than 58% of revenue. We are committed to driving Media offset any impact of COVID-19. Organic Media growth was revenue of TI Media brands to further increase the share of strong at 23%, driven by eCommerce growth of 58% and revenue from the Media division. Organic growth in the digital advertising growth of 15% offsetting the impact of Media division was partly offset by declines in Magazines event cancellations, which declined organically by 43%. organic revenue of 29%, reflecting the impact of store Our Magazines division (21% of Group organic revenue) closures during COVID-19. was more impacted with organic revenue decline of 29% Adjusted operating profit margin increased to 28% (FY (H1: -12%; H2: -45%). Adjusted operating profit is up 79% 2019: 24%), driven by the increase in higher-margin Media year-on-year to £93.4m, with adjusted diluted EPS up 57% revenues. This growth is a reflection of our continued “Our exceptional results demonstrate the continued strength of our strategy, as well as the innovation, fortitude and agility of our business, focused on its purpose, delivered by its people. Despite continued market uncertainty, we remain well-positioned to continue our strong growth.” 17 Excluding forums. 2020 forums only online users are 17.1m (2019: 25.3m). 34 / FUTURE PLC


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    Strategic Report focus on improving operating leverage. Our efficient ABOVE: The audience growth this year, bolstered by the increase in operating model supported by a robust and scalable addition of online activity during the pandemic lockdown period. Total technology stack, as well as centres of excellence, provide CinemaBlend online users grew 56% year-on-year, with organic growth a cost advantage, enabling us to invest more in new boosts our of 48%. Additionally, 25 websites grew over 50% on a innovation. presence in proforma basis for acquisitions made in FY 2019 and Future is a highly cash-generative business with strong the TV & Film FY 2020. We were able to adapt our content to suit the adjusted free cash flow of 103% of adjusted operating and Games & needs of our audience, by producing COVID-19 related profit (FY 2019: 103%), demonstrating the Group’s Entertainment content such as Live Science’s informative articles on the continued focus on efficient working capital management verticals, pandemic, to buying guides for at-home office equipment and operating leverage. particularly in and at-home education advice through our Tech & the US. Learning brand. Our strategy and performance review As part of the development of our audience strategy we Our strategy remains clear and simple, to build a specialist launched eight new websites this financial year, six in the global media platform that drives intent, enabled by last three months of the financial year. The strength of our technology and insight with scalable, diversified brands. operating leverage means we were able to continue the Our strategy continues to deliver despite macro fast pace of our development pipeline, despite the impact uncertainty, and we have been able to keep investing in our of COVID-19. Many of these new launches are in new ongoing growth whilst ensuring that we manage costs verticals, introduced by the TI Media acquisition. For effectively during the challenging macro environment. The example, new website launches Advnture, Fit & Well, recommended offer for GoCo Group is in line with this Gardening Etc, PetsRadar, What to Watch and My strategy and will create a leading specialist media Imperfect Life utilise the content expertise of the TI Media platform, providing consumers with insights, informing team in these verticals, while our scalable advertising and them and enabling them to save money on their key eCommerce technology stack enables a strong path to purchasing decisions. revenue growth. Content is at the heart of what we do and this works We are significantly progressed with our strategy to hand in hand with our technology and business model to migrate the TI Media “.com” brands to our proprietary meet our audiences' changing needs. Over the last Vanilla website platform which allows a standardised financial year we have invested over £50m in content approach to online content creation, ensuring it can be creation, with editorial headcount now accounting for reused, published in different languages and analysed around 46% of total workforce. As a result of our focus to effectively. Woman & Home, Livingetc and Homes & grow TI Media brands in the US and digitally, coupled with Gardens websites were all migrated during the Autumn. In our ongoing investment in new content areas, we addition, as outlined above, our strategy to launch new announced in October 2020 that we would be investing in “.com” websites in pre-existing TI Media audience verticals over 150 new positions in Editorial, Video and Engineering is well progressed. We are excited about the online this year. revenue potential of these new launches. Online we reach one in three people in the US and UK, Through our Future Labs team, established earlier this generating a total of 281.8m online users18. We hold 23 financial year, we have developed a new lead generation market-leading positions across 11 of our verticals and technology, Falcon, as we seek to continue the across online, print and events. We have seen phenomenal diversification of our revenue streams and the expansion 18 Online users for forums are 17.1 million, -32% year-on-year. ANNUAL REPORT AND ACCOUNTS FY 2020 / 35


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    of our technology stack. We have significant global Chief Executive’s Review audience reach of 393.6m across all our channels and Falcon will provide the opportunity to add a further incremental revenue stream to our model. Execution underpinned by values We pride ourselves on being a values-led business that is underpinned by its purpose of helping people through sharing our knowledge and expertise. We are committed to embedding our values throughout the business, as we believe that businesses with strong cultures are the most successful, particularly in times of market uncertainty. It is a testament to the success of this approach and our employees that we have delivered strong results this year; their passion and ability to adapt and innovate during the initial lockdown has meant that rather than simply survive during these unprecedented times, we have thrived, while also ensuring that we have continued to support our wider stakeholder base. Our values encompass the way we operate as a business externally as well as internally, from our ABOVE: Three as a result of issues beyond their employment at Future, commitment to sustainability to the inclusion and diversity events which may have suffered hardship. of our workforce. We strive to create an inclusive culture would normally It has been important for us to support our that embraces the breadth of experience that a truly be held in March communities during the pandemic. In the UK we allowed diverse workforce can offer. We have launched our “I am were cancelled, all staff to take one day of leave per week to volunteer for Future” Inclusion and Diversity initiative and the Future and were instead the NHS should they wish to. We considered it equally Foundation which aims to help increase social mobility and held virtually with important for us to support our partners during these support our most vulnerable. This included making great success. A times, as a consequence we launched a number of financial donations towards the provision of free school total of 32 virtual initiatives including evolving the magazine distribution meals in the UK. In response to Black Lives Matter, we events were held model to make it easier for warehouse and shop staff to have committed to ten pledges to ensure we are equally this year, which handle our magazines safely, cancelling events swiftly to representing black people - covering advertising, editorial demonstrates the minimise costs for partners, and processing customer content & photography, to training and awareness and flexibility of not requested refunds promptly. diversity targets, including ensuring our editorial just our operating At the start of the lockdown we did not know what lay represents our communities. model, but also ahead and as a result, the business pivoted quickly to our staff. ensure it exercised financial restraint while assessing the COVID-19 update wider impact of the pandemic on the business. The Board Our main focus is to protect our staff, clients and and senior leaders, plus staff volunteers took up to 20% stakeholders and as such we have taken a three-pronged pay cuts (see Director's Remuneration Report for more approach to navigate the challenges brought by the details). Additionally, as a precaution, Future (and TI Media COVID-19 pandemic. pre-transfer) accessed £0.5m of UK Government support The health and safety of our staff is our utmost priority from the Coronavirus Job Retention Scheme. This and so from the middle of March, we moved to globally ensured that if the outcomes were more severe, we would working from home ahead of local government enforced protect jobs at a time of great uncertainty. lockdowns. Due to our global-first operating model, the It quickly became apparent that the impact of the business was already set up for remote working and pandemic would be less material to the Group than first therefore the change has been almost seamless. Our anticipated. As a consequence, all employees (with the colleagues have been outstanding and have adapted exception of the Board who took a pay reduction during quickly to the new environment. We place great March-May) were repaid their salary reductions, and full importance on good communication, and so to adapt to pay was restored. Similarly, all government support in the the reduction in contact time, we have increased UK and US was repaid in full. communication frequency including weekly Chief Overall the Group has performed very strongly during Executive letters, weekly leadership team calls, consisting the COVID-19 pandemic period. The two areas most of around 100 colleagues, and virtual town halls, as well as impacted by the pandemic were magazine sales and increasing mental health support including weekly virtual events, reflecting the closure of high-street stores and yoga and mental health first aiders. During this time we restrictions on holding in-person events. As a result, we also set up a COVID-19 Hardship Fund for colleagues who, cancelled 27 in-person events, which in FY 2019 delivered 36 / FUTURE PLC


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    Strategic Report £8.9m of revenue. For three of our larger events brands Future Wheel and presents opportunities for the Group to (The Photography Show, The National Homebuilding & further monetise through video. In addition, by utilising Renovating Franchise and New York City TV Week) we Barcroft’s expertise in monetising and engaging with pivoted to host these virtually with great success. The social audiences, we are able to drive social media Photography and Video Show was held at the end of engagement across our other Future verticals and brands. September with 16,890 attendees enjoying 175 seminars In October 2020 we acquired CinemaBlend, a and 130 exhibitors. A total of 32 virtual events were held high-growth digital brand focused on the TV, film and this year, contributing £1.4m of revenue, which entertainment market, based in the US. The addition of demonstrates the flexibility of not just our operating CinemaBlend boosts our presence in the TV & Film and model, but also our colleagues. We estimate the impact of Games & Entertainment verticals, particularly in the US. retail closures resulted in approximately £20m of lost Additionally, the acquisition also provides an opportunity magazine sales. to accelerate the development of our recently launched Despite the impact on retail, the lockdown period website What to Watch by establishing a strong market presented us with a valuable opportunity to trial new titles position from which to grow both online brands, as well as and launch into print media sectors that reflected the benefiting from collaboration, content sharing and new sudden shift in readers' interests. Market data highlighted expertise. a surge in popularity of topics such as well-being & On the 25 November 2020 we announced that we have mindfulness, hobbies, puzzles and pastimes, and we were agreed the terms of a recommended offer for GoCo Group able to respond with a number of new bookazines that plc, the price comparison business, which values the have proven to be popular with readers. The ability to entire issued and to be issued share capital of GoCo Group respond to our readers’ needs has been further reflected at £594m on a fully diluted basis. We believe that the in our bookazine sales channel, and as retail outlets Combination will significantly strengthen the Future globally have reopened these sales have recovered more Group’s proposition of seeking to address the growing quickly than magazines. consumer demand for informed and value driven purchasing decisions enabled by intent driven content. We Acquisitions believe the Combination provides a truly unique A core part of our strategy is to buy and build where we opportunity to capitalise on the combination of Future’s identify assets which, we believe combined with Future, deep audience insight with GoCo’s expertise in price present a unique opportunity to add value. We have a comparison and the proprietary technology of both the systematic approach to all acquisitions, resulting in a Future Group and the GoCo Group. number of transactions to date being originated in-house. We have made significant progress on the integration of TI Current trading and outlook Media, which is now complete. The Finance and magazine The new financial year (FY 2021) has started well, and we subscription systems have been migrated onto our benefit from ongoing momentum from the organic common platforms, and our ad stack and Hawk widgets business as well as from acquisitions. Our online audience have been integrated across all non-Vanilla websites, continues to show strong growth, which was underpinned alongside the migration of Homes & Gardens, Livingetc by our recent successful Amazon Prime Day in October. and Woman & Home websites to our web platform Vanilla. We meet the ongoing challenges of the COVID-19 Delivery on synergies continues to progress well with pandemic through our three-pronged approach focusing £20m already secured ahead of earlier forecasts of £15m on our employees, clients and stakeholders as we per annum, of which £3m benefits our FY 2020 results. consider how to lessen the impact to the business. We continue to expect the cost to deliver the synergies to The strength of our performance in FY 2020 combined be in the region of £12m, of which £9.9m (being £9.1m with the long-term fundamentals of growing global digital restructuring and £0.8m impairment of the TI Media advertising spend and eCommerce growth add to our legacy finance system) is reflected in our FY 2020 results confidence that, despite market uncertainty, we remain as a charge to profit. well-positioned to continue our strong growth. In November 2019 we acquired Barcroft Studios for a Our diversified strategy continues to offset the impacts total consideration of £23.4m, of which 40% was satisfied of the ongoing macro uncertainty, and, as a result, the by the issue of shares, with the remainder paid in cash. positive trends we have seen in FY 2020 are expected to Barcroft is an award-winning TV and digital video continue in FY 2021. production company that creates original content, which is then published on a variety of owned and operated social sites in addition to being distributed across mass media channels. Barcroft’s videos, which focus on real life stories, are watched by millions. Now fully integrated, this Zillah Byng-Thorne, Chief Executive is an exciting acquisition as it has added another 10 December 2020 significant new revenue stream in video production to the ANNUAL REPORT AND ACCOUNTS FY 2020 / 37


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    Risks and forms a part of operating in business, delivering its strategic Risks and uncertainties objectives whilst mitigating those risks is a fundamental objective for Future’s Board and its executive management teams. uncertainties Approach to risk In the current year and ongoing, in addition to its broad strategic responsibilities, the Board:- Effective risk management is essential - twice annually reviews the principal and emerging risks faced by to support the achievement of our the Group and approves the Group Risk Register. strategic and operational objectives as - twice annually understands the impact of principal and emerging risks and assesses the robustness of mitigations and internal we address the challenges and controls in place. uncertainties facing businesses today. - annually approves the Group's Risk Appetite Statement. The Board recognises that the appropriate management of risk is key The Audit and Risk Committee reinforces the process further by to the delivery of the Group’s strategic objectives and the continued conducting ‘deep dive’ reviews, either on specific risks such as cyber delivery of superior returns for all of our stakeholders (you can read security, or through discussions with Executive Leadership Team more about our key stakeholders on pages 44 to 48). As set out on members to challenge their particular risk registers. pages 12 and 21, we actively capitalise on the opportunities impacting our industry to ensure that the Group remains well positioned to deliver on the evolving needs of our audience. Prioritising and reporting risks The Board has overall responsibility for the risk management The management of risk is embedded in the day-to-day operations of framework and for ensuring that we manage risks appropriately. the management teams. Key risk indicators are monitored through Future takes its approach to the identification, evaluation and monthly trading meetings and quarterly business reviews where any mitigation of risk and uncertainty extremely seriously, and applies a areas of opportunity or risks to the business are discussed as a robust framework that embeds risk management throughout its standing agenda item. Any changes are fed back to the Executive organisation and across its operations. Whilst it is accepted that risk Leadership Team (ELT), Audit and Risk Committee and the Board. Risk management framework Defence Oversight Third line Second line First line Group Finance Responsibility Board Controls Reviews Leadership Team Function Actions • Sets the Group’s risk • Monitors the adequacy • Prioritises Principal • Maintains the risk appetite taking into and effectiveness of Risks through a formal register & conducts account its strategic internal control and bi-annual review process interviews with the objectives risk management Executive Leadership systems • Allocates resources to Team • Identifies principal manage risks according Group risks • Reports to the Audit to potential impact • Conducts ‘deep dives’ into and Risk Committee specific Principal Risks and Board on a regular • Communicates basis priorities to the business • Carries out a robust assessment of any • Reviews detailed risk emerging risks registers to agree Principal Risks • Assesses the impact of Principal Risks when • Identifies any analysing the Group’s emerging actions long-term viability and where Group-wide sustainability action is required • Considers views from • Implements risk management and the mitigation plans Audit and Risk Committee as part of its review of the effectiveness of the system of internal controls 38 / FUTURE PLC


  • Page 39

    Strategic Report Group-level risks are either derived from ‘top-down’ or ‘bottom-up’ Our Principal Risks review of a broad range of individual current strategic and operational The output from the above process is a summary of Principal Risks risks. The ELT is responsible for identifying risks and working with the that is set out in the table on pages 40 to 42 and summarised in the Group Finance Director to capture them in the Group’s risk register. heat map on page 42. The heat map sets out the relative likelihood of All risks identified by the ELT are scored out of 5 (with 5 being the the risk crystallising and the impact on the Group if the risk did highest) in respect of three areas: the likelihood of the risk crystallise – effectively the ‘gross’ risk score before considering the crystallising, the impact if the risk does crystallise, and the strength strength of any mitigation. The relative strength of the mitigation of any mitigation in place (in respect of mitigation, a score of 1 available to the Group to combat each risk is depicted in the colour of represents strong mitigation). A combined score is then calculated by the risk on the heat map (green being strong, amber being average multiplying each of these scores together (with 125 being the highest and red being low mitigation). The symbol X has been included in the possible score). Summary of Principal Risks table overleaf to indicate principal risks Each of these Group-level risks is then assessed by the Board in emerging in FY 2020. terms of its potential impact on the Group and its key stakeholders. Each Principal Risk has been analysed according to its impact on The Group prioritises risk mitigation actions by considering risk both the Group’s existing business model, as set out in the ‘Future likelihood and potential severity. Strategy Wheel’, and the core elements of the Group’s strategy as set out in the ‘Future Playbook’. More information on the Future Strategy Wheel and the Future Playbook can be found on the website. Emerging risk Considering both the existing business model together with the Whilst Future operates in an evolving environment with several clear strategic direction of the Group, the Board carried out a robust risks, it takes a pro-active and robust approach to identifying any new assessment of long term viability, which included performing risks, and evaluating and mitigating all known risks through a regular sensitivity analysis and reverse stress-testing. review process. The symbol V has been included in the Summary of Principal Risks Our internal controls seek to minimise the impact of risks, either by table overleaf to indicate those that have been taken into account reducing their likelihood or mitigating their impact, as explained when performing the viability testing. further in the Corporate Governance report on pages 74 to 77, and during the year we have continued to develop those controls. Effective risk management remains at the core of the Group’s strategy, which Changes to the Group’s risk includes a formal, six-monthly review by the ELT and the addition of assessment in the year risk management to the Audit and Risk Committee as a standard As a result of the risk reviews undertaken during the current financial agenda item for every meeting. There have been no significant year, the risk below has been identified as a prior year Principal Risk control failings or weaknesses identified during the year in respect of that is no longer considered to be as significant due to improved risk management. Climate change is not currently considered to be mitigations and is therefore not included in the Summary of Principal an emerging or a principal risk for the Group. Risks table overleaf :- FY 2019 principal Risk appetite risks not included in Reason for reduction in risk rating The Board recognises that continuing to deliver superior returns for FY 2020 assessment shareholders and other stakeholders is dependent upon accepting a level of risk. Our risk appetite sets out how we balance risk and opportunity in pursuit of our strategic objectives. The business has an established track record of acquisitions and integrations which has been further validated with Zero tolerance recent transactions. Additionally, in The Group has zero tolerance for risk which may impact: Acquisitions – the risk FY 2020 the executive leadership team • The safety of our people that any acquisition was expanded to include a dedicated • Our reputation and brand and its subsequent M&A function. • Our legal and regulatory compliance integration fail to create shareholder M&A activity will continue to be value monitored as a risk but the Group does Core business model Strategy and vision not feel that it currently meets the The Group has low tolerance The Group accepts a moderate criteria for being a principal risk. for risk in its core operations. level of risk in pursuing new opportunities, including potential new markets. In addition, the prior year risk titled ‘reliance on ‘search’’ has been incorporated into the new risk, reliance on third party distribution platforms. ANNUAL REPORT AND ACCOUNTS FY 2020 / 39


  • Page 40

    Summary of Principal Risks Summary of Principal Risks Gross Risk movement relative to prior year Residual Risk movement relative to prior year New Principal Risk Risk Risk Risk Personal data Staff – Key person risk Cyber security and IT V V Business Model link: iii, iv, vi, viii Business Model link: i-viii Business Model link: i, ii, vi, vii, viii, Strategy link: 1, 3, 4 Strategy link: 1-5 Strategy link: 1, 4 Description Description Description The collection, storage and use of personal Our future success will depend upon our Cyber security covers the protection of our data by the Group presents a risk of misuse, continued ability to identify, hire, develop, devices, services, and networks and the loss of personal data, or cyber-attack which motivate and retain highly skilled individuals information stored within them from theft or could result in high penalties from the in both the UK and US, in our senior damage. A cyber security incident could result Information Commissioner’s Office (ICO) management and technical teams. in interruption to trading, damage to reputation or claims from data subjects. Future may The Group has a long standing CEO with and financial penalties along with remediation suffer reputational risk, as well as a significant a successful track record in growing the costs and diversion of management time. financial penalty, if it is responsible for the profitability of the business and maintaining breach. its strategic direction. Mitigation Future (and the third parties it relies on) is Effective cyber security governance is in place required to comply with strict data protection Mitigation with regular Group steering meetings and a and privacy legislation, including the General The Group has recruited several new senior dedicated role responsible for overseeing risk Data Protection Regulation (GDPR). Such roles recently to provide additional strength and recommending actionable roadmaps to laws restrict Future’s ability to collect and use and depth to the leadership team, while improve information security procedures and personal information and place significant crucially transitioning to a new CFO during protections across the Group. transparency and accountability obligations the period. Future seeks to ensure all of its systems on Future. The need to comply with data The editorial and operational leadership and public owned and operated infrastructure protection legislation is a significant control, has been expanded with the TI acquisition. complies with best practice as regards to operational and reputational risk which can In addition, during FY 2020 we created a security by continually investing in and affect the Group. number of new executive leadership roles to upgrading IT systems and processes. Acquisitions increase the level of risk include, B2B MD, CSO, CMO and CPO. The Group’s core network is protected by relating to personal data due to the increased Technology has been split from a single Two-Factor authentication security and firewall volume of data being processed and the role into two separate executive leadership restrictions with a plan in place to mitigate the requirement to migrate the data from legacy roles, with one of these roles focused effects of any hack. systems and suppliers which may not be solely on our front-end website platform All workstations are protected by antivirus operating with the same standards as Future development and technology. software which is kept up-to-date and and its partners. In order to attract and retain top talent websites are subject to monthly vulnerability and ensure that Future remains an attractive assessments with any required remediation Mitigation place to work, appropriate reward packages being completed in a timely manner. The Data Protection Officer oversees all (including long term incentive plans) are in To protect against system/network outages data protection matters and works with place for key individuals. (caused by fraud or other issues), Future’s stakeholders within the Group to review, network has multiple back-up facilities held in develop and improve its data practices and Governance oversight different locations that minimises any single procedures. The Nomination Committee regularly point of failure. Servers are distributed across Controls and contract provisions are reviews Board succession planning and the two main data centre locations and several in place to ensure compliance with data Board receives updates on senior talent controlled server rooms in different buildings in protection legislation and confirmation is management programmes. You can read Bath and New York. sought from all third parties who might be more about the work of the Nomination Following completion of acquisitions, assets involved in providing or processing data to Committee on page 70. are quickly moved onto the Group’s existing ensure they are also in compliance with such infrastructure (data centres and cloud based legislation. providers) except where not possible or The Group has implemented a process practicable. Websites acquired by the Group to respond to subject access requests in a are usually transitioned to the Group’s platform proper and timely fashion and uses a Consent to ensure they meet the required security and Management Platform on its websites best practice standards. within the IAB's Consent and Transparency Framework. Governance oversight The Audit and Risk reviews Cyber Security Governance oversight assessment reports, IT network management The Audit Committee regularly reviews and security reviews, and receives external results of internal control reports and the advisory guidance on key cyber risks. You can Board receives internal corporate governance read more about the work of the Audit and Risk and compliance updates. You can read more Committee on page 74. about our governance framework on page 64. 40 / FUTURE PLC


  • Page 41

    Strategic Report Key: Link to Future's Business Model: Link to our vision and strategy: Long-term viability: i. Advertising 1. A global specialist media platform V : Risk taken into account as part of the ii. Content publishing & licensing 2. Fans of brands and loyal communities Company’s long term viability assessment (see overleaf) iii. Events and integrated marketing 3. Diversifying monetisation iv. Membership & Subs 4. Leveraging our data and analytics v. Newstrade 5. Expanding global reach vi. CRM vii. Platform as a service Mitigation: Strong mitigation Average mitigation Low mitigation viii. Ecommerce & lead Gen Risk Risk Risk Economic & Digital Advertising market Reliance on third party Geo-political uncertainty changes distribution platforms V V V Business Model link: i-viii Business Model Link: i, ii, viii Business Model Link: i, ii, viii Strategy link: 3, 5 Strategy link: 1-5 Strategy link: 1-5 Includes the prior year risk relating to reliance on 'search' Description Description Description Group performance could be adversely Continuing changes to the digital advertising We depend on our continued ability to market, impacted by factors beyond our control such landscape and changing user habits may impact distribute and monetise our content through as the economic conditions and political Future’s share of advertising market revenues and search engines and social media platforms. uncertainty in key markets. advertising yield: These platforms could decide not to market The macroeconomic climate and (i) the move to increased privacy standards or distribute some or all of our products and continued uncertainty surrounding the across the advertising ecosystem, may have services, change their terms and conditions of impact of Brexit on the UK economy and the potential effects on yield from removing ‘targeted use at any time and/or significantly increase US political landscape could lead to reduced personalised ads’; fees. consumer spending and a related downturn (ii) the changing mix of media advert Changes in algorithms and strategies of in advertising. consumption means that increasingly more users tech giants could materially impact traffic are viewing adverts on mobile devices, which also and media revenues. For instance, search Mitigation has a higher mix of video advertising formats. engines can make changes to their ranking This risk is mitigated by keeping abreast of Future needs to ensure that its advertisement algorithms, methodologies and design layouts macro-economic developments and ensuring proposition stays relevant to ensure that it can that could reduce the prominence of links to that the Group responds swiftly to any as they capitalise in these markets while maintaining a websites offering our content and negatively materialise. premium yield; impact traffic. The Group is diverse geographically and (iii) the ability to compete for a share of continues to grow the diversity of its revenue available advertising expenditures may be Mitigation segments. This mitigates the impact of more challenged as more traditional offline and Although Future has not been materially political or economic stability in any particular emerging media companies continue to enter the impacted by any algorithm changes to date, country or region. online advertising market. the Group is not complacent. The Group has demonstrated through the Future has a dedicated audience ongoing pandemic that its diversified revenue Mitigation development team who work to ensure Future streams across different media have provided Future is a premium publisher with large market embeds best practice within its editorial and a resilience to economic shocks. shares of highly endemic audiences and as a technical teams. In addition, the Group has focused on being consequence advertising partners work with The Group continues to invest in the the market leader wherever possible, which Future because of the brands and audiences creation of expert quality content that meets should result in more resilience in economic it has. Future’s sales teams are trained to sell the needs of audiences including internal downturns. the benefits associated with working with critical review of our approach to, and success Future (rather than acquiring advertising in, delivering the information and advice our Governance oversight programmatically). users are searching for. The Chief Executive and Chief Financial Future has enhanced first party audience We continue to invest in our online Officer present reviews and forecasts on the capabilities with which it is currently targeting platforms to provide a secure environment impact of the macroeconomic environment advertiser’s campaigns with rich first party with strong user experience and are at each Board meeting. You can also read audience data. This allows advertisers to hyper committed to ensure that we adhere to online more about this in the Strategic Report on target Future’s special interest user base and their advertising standards. pages 6 to 53. purchase intents. This first party data proposition The Barcroft acquisition has strengthened is completely unaffected by any third party cookie our expertise in distributing and monetising changes. content across a broader group of digital Continued investment in Future’s Hybrid platforms with which Future has strong technology ensures that Future drives the best partnerships. available audiences in the market. The Group’s recent diversification into B2B The Group’s expansion of its video offering, helps drive a direct relationship with the end facilitated further by the acquisition of Barcroft customer and the Group continues to invest (specialist digital video production and social in other direct sources to drive direct traffic. channel distribution company) enables Future to capitalise both on growing video advertising Governance oversight demand and the social channel advertising The Board discusses third party distribution market. platforms with specific focus on the investment needed. You can also read more Governance oversight about our Business Model and how our The Board receives updates on innovation and business is diversified in the Strategic Report reviews digital advertising risks as part of the on pages 6 to 53. corporate plan process. You can also read more about our Business Model and our approach to Digital Advertising in the Strategic Report on pages 6 to 53. continued overleaf: ANNUAL REPORT AND ACCOUNTS FY 2020 / 41


  • Page 42

    Summary of Principal Risks continued Summary of Principal Risks Risks Risks Risks Reliance on key third party Pandemic Media market disruption and service providers impact continues changing consumer habits V V V Business Model Link: ii, v, viii Business Model link: i-viii Business Model link: i, ii, viii Strategy link: 1, 3 Strategy link: 3, 5 Strategy link: 1-5 Description Description Description Certain third parties are critical to the operations Whilst Future’s trading results overall have proven Failure to anticipate and respond to market of our businesses. A failure of one of our critical resilient during the pandemic period of FY 2020, disruption and changing consumer habits third parties may cause disruption to business continuation of the pandemic may have longer may affect demand for our products and operations, impact our ability to deliver products term impacts on other stakeholders such as services and our ability to drive long-term and services and result in financial loss. The employees, customers, suppliers, the wider growth. reputation of our businesses may be damaged economy and consequently the success of the by poor performance or a regulatory breach by Group. Mitigation critical third parties. Future’s strategy priority is to stay relevant Key third parties include: Mitigation for newer generations and new media • Printers and paper suppliers The safety of Future’s employees has been a models. • Magazine wholesalers and hauliers priority. All staff are supported in their need to The Group continues to grow its organic work from home according to their personal audience and that of its acquired websites • Data centre and cloud service providers circumstances. through the investment in its editorial Mitigation Intra-company communication has continued content. Robust continuity arrangements are in place for at regular intervals using accessible technology The Barcroft acquisition has extended disruption to key third parties. - monthly town hall streaming of communication Future’s capability to access the high Print options and contingency plans are to all staff including real time Q&A sessions, in growth market of VOD and social channel regularly assessed. addition to listening sessions hosted by senior content distribution in addition to extending Our magazine wholesaler finances are kept business leaders. the Group’s capability to develop video under constant review. Operational contingency Effort to keep in touch and maintain contact content on owned websites. plans are in place to switch to alternative networks with customers has been a focus with credit The Group continues to develop its should a failure occur in both wholesalers. extended to regular customers when necessary partnerships with digital app stores Future operates multiple data centres in order to assist and ease pressure on their cash flows to maximise distribution of its digital to ensure resilience in key services and avoid during the recent periods of difficulty. subscription content. unplanned downtime or service disruption. Supplier payments have continued to be made Operational and financial due diligence is in accordance with supplier payment terms. Governance oversight undertaken for any new key suppliers or material The Chief Executive provides the Board with changes. Contracts, service levels and outputs are Governance oversight regular updates on market and competitor closely managed on an on-going basis for key third The Board has received regular updates on the activity. You can also read more about our party services. impact of COVID-19 on our people and on the Business Model in the Strategic Report on business and the mitigations being put in place pages 6 to 53. Governance oversight to protect them. You can read more about this on The Board regularly discusses the security of page 49. supply and receives presentations from ELT members in regard to their key suppliers where the Board deems an update is required. You can also read more about our Business Model and how our business is diversified in the Strategic Report on pages 6 to 53. High Principal Risks Heat Map 1 Strong mitigation Average mitigation Low mitigation 2 3 8 Gross Risk (before mitigation) 7 4 6 1. Personal data 5 Impact 2. Staff - Key person risk 3. Cyber security and IT 9 4. Economic & geo-political uncertainty 5. Digital advertising market changes 6. Reliance on third party distribution platforms 7. Reliance on third party service providers 8. Pandemic impact continues Low 9. Media market disruption and changing consumer habits Low Probability High 42 / FUTURE PLC


  • Page 43

    Strategic Report Longer term viability statement Assessing the Group’s longer once is considered to be remote) as well as running the impact of term prospects and viability the recommended offer for GoCo Group plc (where the acquisition The Directors have based their assessment of viability on the Group’s does not deliver the results that are expected and also where the current strategy, which is outlined in pages 12-33. The Group’s acquisition does not complete as a result of it not obtaining prospects are assessed primarily through its annual long-term shareholder approval), both separately, and with the combined detailed planning process which considers profitability, the Group’s downside scenario. cash flows, committed facilities, liquidity and forecast funding The scenarios have been modelled using the Group’s existing requirement over the next three years. This exercise is completed £135m RCF which runs to February 2023 and the £215m term loan annually and was signed off by the Board in September 2020. As part for the acquisition of GoCo Group plc which runs to November 2022 of this the Board considers the appropriateness of key assumptions, and amortises at £20m per quarter from 30 June 2021. The £30m taking into account the external environment and the Group’s COVID-19 facility that was agreed in April 2020 has been cancelled strategy. and so has not been included in the modelling. As these facilities expire within the three year time period we have assumed for the The assessment period purposes of this viability assessment that the Group will undertake a A three-year period is used for the Group’s Viability Statement as this further refinancing exercise to both ‘right-size’ and lengthen the aligns with the length of the Group’s detailed plan, and this horizon tenor on the Group’s facilities prior to their expiry. most appropriately reflects the dynamic and changing media The scenarios are hypothetical and purposefully severe with the environment in which the Group operates. aim of creating outcomes that have the ability to threaten the viability of the Group. The Group has multiple control measures in Assessing the Group’s viability place to prevent and mitigate the scenarios from taking place The viability of the Group has been assessed, taking into account the Although each of the downside (and the combined) scenarios Group’s current financial position, including external funding in place result in increased leverage they all result in headroom over the over the assessment period, and after modelling the impact of certain existing bank facilities and covenants at all testing points (even scenarios arising from the principal risks, which have the greatest where none of the various options available to the Group in order to potential impact on viability in that period. maintain liquidity, such as reducing any non-essential capital and A number of scenarios have been modelled, considered severe but operating expenditure as well as not paying dividends, are utilised). plausible, that encompass these identified risks. Whilst each of the The results of the above stress testing showed that the Group risks on pages 40 to 42 has a potential impact and has been would be able to withstand the impact of these scenarios occurring considered as part of the assessment, only those that represent over the assessment period. severe but plausible scenarios were selected for modelling. None of these scenarios individually threaten the viability of the Group. The Viability statement assessment undertaken includes the impact of the recommended Based on these severe but plausible scenarios, the Directors have offer for GoCo Group plc. a reasonable expectation that the Company will continue in The scenarios have been run both individually and with 2) and 3) operation and meet its liabilities as they fall due over the three-year combined (as the combination of all downside scenarios occurring at period considered. Scenario Associated Principal Risk(s) Description A serious data security or regulatory breach results in a significant monetary penalty of €20m and a loss of reputation among customers 1) Data security 1. Personal data resulting in a significant reduction in Media revenues and additional IT breach costs whilst the breach is rectified. Given the inherent uncertainty of total quantum, this test is purposely severe as a stress test for the Group. 2. Key person risk 5. Digital Advertising This scenario assumes a significant reduction in eCommerce and 2) Significant Media advertising revenues (net of direct cost reductions) compared to the revenue reduction 6. Third party distribution platforms three year plan of 10% per annum. The scenario also assumes no bonus 9. Media market disruption and payment in any of the next three years. changing consumer habits 4. Economic & geo-political This assumes a reduction in Events, Advertising and Magazine revenues 3) Significant uncertainty as well as a print margin decline and extended collection days and an change in external overseas third party distributor going bankrupt, resulting in bad debt 7. Third party service providers environment exposure and supply disruption. 8. Pandemic impact continues The scenario also assumes no bonus payment in any of the next three years. ANNUAL REPORT AND ACCOUNTS FY 2020 / 43


  • Page 44

    Our Investors How we engage with our stakeholders Our Suppliers Our People Our Commercial Our Audience Partners How we engage with our stakeholders Our purpose is to change people’s lives through sharing our knowledge and expertise with others, making it easy and fun for them to do what they want. Shared and enduring values are at the heart of any successful organisation, and that’s why our core values underlie everything we do. In order to create these values, it is important to first identify who our stakeholders are, understand what matters to them, and how our operations impact on them and their communities. The Board is responsible for leading stakeholder SECTION 172 STATEMENT engagement, ensuring that we fulfil our obligations to The Board of Directors of Future plc have always taken those impacted by the business. We believe that decisions for the long term, and collectively and considering our stakeholders in key business decisions is individually our aim is always to uphold the highest not only the right thing to do, but is fundamental to our standards of conduct. A broad range of stakeholders ability to drive value creation over the longer term. are important to the Group at local, regional and In this section we identify our five key stakeholder functional levels. groups and have provided an overview of their interests, Day-to-day engagement with our key stakeholders, and their concerns and the ways in which the Board acted other local stakeholder groups, is conducted at the level with regard to these groups when taking its key strategic and in a format best suited to the context. This may be decisions throughout the year and what the Board has locally, regionally or functionally, by the Board or senior learned from these interactions having regard (among management, depending on the stakeholder. Where the other matters) to the factors set out in Section 172(1)(a) Board does not engage directly with our stakeholders, it is to (f) of the Companies Act 2006. The Board will kept updated so Directors maintain an effective sometimes engage directly with certain stakeholders on understanding of what matters to our stakeholders and particular issues, but the size and distribution of our can draw on these perspectives in Board decision-making stakeholders and of Future means that stakeholder and strategy development. As the Board receives engagement often takes place at an operational level, presentations and makes decisions, we ensure that the within the context of the Board's agreed strategy. In this impact on any of these groups is considered. We section we show how the Board engaged with each of our periodically review which are our key stakeholder key stakeholder groups, summarise the specific actions relationships and examine how we engage with them. We we took for stakeholder groups in response to the also consider ways to ensure that we maintain open lines COVID-19 pandemic and set out some case studies which of communication with those stakeholder groups and give more detail of how our stakeholders are considered whether there are ways that the Board’s engagement can when making specific decisions. be improved to help us operate more effectively. 44 / FUTURE PLC


  • Page 45

    Strategic Report How the Board engaged in 2020 Our people Workforce engagement has always been a key priority for the Board. Claire MacLellan, the Chief Operating Officer who is responsible for global HR, attends Board meetings once a year Our talented to give updates and an HR dashboard, showing key statistics, is reviewed at each Board and engaged meeting. Our employee opinion survey formally captures their views and is a key part of how workforce are we track engagement. During October 2019 the Board visited the New York office, and in committed to upholding March the Bath office. In addition, in response to the challenges raised by the pandemic, we held a number of live events via Google hangouts led by the executive team. our values, enabling us Feedback, suggestions and concerns from employees across the business are also to deliver on our considered through channels such as town hall meetings and ELT listening sessions. The promises and we Board receives regular updates on these topics. recognise that listening The Board considered the impact of the TI Media acquisition on the existing Future to them and keeping people, and how the TI Media people would integrate into the Future community, including them engaged is looking at the different approaches to furlough, best practice ways of working and the impact on diversity. essential to that success continuing. What we learnt You can read more Our people are proud to work at Future and are proud of Future’s response to COVID-19. about how we invest and Managing the integration of new businesses into Future’s culture is something that we do reward our people on well (but there is always room for improvement). page 50 and how the Inclusion and Diversity is very important to our people and the education and awareness programmes in this area are very much in demand. Mental well-being has been a key focus Group engages, area during the year, with many colleagues finding the loss of physical office space isolating. including how we helped them negotiate the What we are going to do in 2021 COVID-19 pandemic, on Listening, learning and responding to our people will continue to be a priority during the next page 50. 12 months. We have, as part of this, formalised our internal communications calendar to ensure we have the opportunities to interact whilst the company works remotely. ANNUAL REPORT AND ACCOUNTS FY 2020 / 45


  • Page 46

    How the Board engaged in 2020 How we engage with our stakeholders Our audience The Board receives regular audience insight reports throughout the year and we looked at our audience needs at our Board strategy day. The impact of COVID-19 on We create fans of our our ability to meet the needs of our audience and how this was addressed was brands by giving them discussed as part of the broader COVID-19 response debate. a place where they The Board considered how we can diversify our audience when discussing want to spend their time and acquisition opportunities. The demands and resource requirements to create where they go to meet their scalable platforms were also discussed. needs. They are central to our Cyber security risk discussions included a focus around ensuring that any threats to our audience were quickly identified and mitigated. We are working business and without them we towards embedding the overriding GDPR principle of ‘data protection by design and would not exist. default’ in our organisation. You can read more about our audience and how we have What we learnt continued to delight them on Our content has been a source of help and advice for hundreds of millions of people pages 14 to 19. each month, and this need was met even more so during the early period of the pandemic and global lockdowns. Meanwhile our magazine readers have been eager to access our content and have been turning to our subscriptions to ensure that they can continue to access our content when the marketplace was disrupted. What we are going to do in 2021 Looking ahead, the challenge is to ensure that the platforms we evolve and the technology we use continues to meet the demands of our audience. 46 / FUTURE PLC


  • Page 47

    Strategic Report How the Board engaged in 2020 Our commercial The Board receives reports on how we have worked with our commercial partners throughout the year, with a focus on key commercial events, ie CES, E3 or new partners product launches. The Board considered how we can build and improve on our existing commercial Working on our behalf, partnerships when discussing acquisition opportunities. our commercial partners are a face for our What we learnt business. Ensuring they are By working with our commercial partners we can diversify our content motivated to deliver good quality monetisation, reaching a wider audience whilst staying relevant to them. Our unique relationship with many of our endemic advertisers meant that we were work helps us deliver the best able to host a number of virtual events with significant engagement in response to service to our audience. the cancellation of the physical events. You can read more about our commercial partners and how we What we are going to do in 2021 work with them on page 52. We will continue our engagement with our commercial partners, ensuring we are adapting to their needs in this changing environment. How the Board engaged in 2020 Our suppliers Engagement with suppliers is key to our values, ranging from our approach to Modern Slavery (our statement can be found on our website), to the protection of our We believe it is important other stakeholders' data, to name just a few. One of the key pillars supporting this that our suppliers are not statement is our Supplier Code and we continue to engage with suppliers on this. only price competitive but also have a strong compliance, What we learnt Compliance is key for our suppliers and visits to our key production suppliers and quality, service, sustainability and processes ensure that we carry out the right due diligence to help them comply innovation ethos. and ensure the highest standards which are vital to keep slavery and human You can read more about our trafficking out of our supply chain. suppliers and how we work with them on page 52. What we are going to do in 2021 We will continue our engagement with our suppliers, providing support and guidance to ensure adherence with our Supplier Code. How the Board engaged in 2020 Our investors We conduct extensive engagement with our institutional investors throughout the year. Our AGM and investor presentations gives the Board the opportunity to Shareholders are the engage with investors on the running of their company, and to receive feedback. owners of Future. The Board receives regular updates on investor communication activity, changes to the shareholder register, analysis of share price performance and particular The Board places investment themes such as environmental, social and corporate governance. In great importance on having addition, the feedback from shareholder / analyst interactions is shared with the positive relationships with all Board on a regular basis, via our Corporate Brokers. shareholders and seeks to ensure there is an appropriate What we learnt level of dialogue with them. Investors understand the strategy that underpins our future growth plans and are keen to see the traction from these. You can read more about the feedback we had from shareholders on the implementation of our new remuneration policy for 2019/20 on page 84. What we are going to do in 2021 We will continue to engage with our shareholders throughout 2021. We look forward to welcoming shareholders, subject to there being no COVID-19 restrictions in place, at our AGM in February where they will have an opportunity to meet the new Board members, Rachel Addison and Mark Brooker, for the first time and vote on their election and other resolutions. ANNUAL REPORT AND ACCOUNTS FY 2020 / 47


  • Page 48

    Stakeholder engagement case studies How we engage with our stakeholders COVID-19 response Acquisition of TI Media Workforce The business implications of the During the Board’s discussions on the We continue to be a responsible employer COVID-19 pandemic have been fast acquisition of TI Media the Board gave in our approach to our people, ensuring moving and, at times, uncertain. A extensive consideration to what the impact we communicate and engage with them summary of the various actions taken by of the proposed acquisition would be on regularly in a variety of ways and that the the Group are shown on page 49. The the various stakeholder groups. This voice of the workforce is heard and taken Board discussed the Group’s response involved an appraisal of the financial into account when making decisions. and the impact on stakeholders, in effects of the acquisition, the operational The Board agreed a series of particular our people, our audience and risks involved in its integration, optimal engagement initiatives to supplement the our suppliers. financing arrangements and regulatory existing initiatives including: risk relating to the Competition and • arranging an annual workforce Q&A Markets Authority. In addition, the Board with the Board considered the impact of the acquisition • the Senior Independent Director to on the employees of both Future and TI continue to take the lead in Media, particularly during the consultation engagement across the locations process with employees, the audience and including attendance at the staff suppliers, as well as the potential conference. consequences for existing shareholders. 48 / FUTURE PLC


  • Page 49

    Strategic Report OUR PEOPLE Home working stipend .................................................................................... Page 50 COVID-19 Refund of pay cuts ................................................................................................Page 80 Hardship fund created ...................................................................................... Page 50 Accelerated online training ...........................................................................Page 51 response Facilitated NHS volunteering ......................................................................Page 36 Increased staff communications .............................................................Page 51 Mental health support ...................................................................................... Page 50 This section provides a OUR AUDIENCE Created new COVID-relevant content.................................................Page 15 snapshot of how we have Created virtual events and webinars ...................................................Page 18 approached the COVID-19 crisis Trialled new titles and media ........................................................................Page 15 since mid-March 2020. It also Accelerated processing of refunds ........................................................Page 36 directs you to sections of the Annual Report where you can OUR SUPPLIERS Evolving the magazine distribution model to support find more detail on each of our supply chain and commercial partners ..................................Page 18 these matters. Extended credit where needed................................................................ Page 42 Our governance structure OUR INVESTORS (detailed on page 64) provided Continuing strong financial governance ....................................... Page 54 a stable foundation from which Maintaining our dividend................................................................................... Page 11 we could respond to the changing situation, led by our OTHER Repaid government support in full ........................................................Page 81 Executive Leadership Team. A Board pay cut ...............................................................................................................Page 80 summary of our COVID-19 response is set out opposite. ANNUAL REPORT AND ACCOUNTS FY 2020 / 49


  • Page 50

    Corporate Responsibility Corporate Responsibility We are part of the audience and the community and we take this responsibility very seriously. This section highlights what we are doing to make a positive impact through our sustainability and stakeholder engagement strategies. Day-to-day engagement with our key stakeholders, and other local stakeholder groups, is conducted at the level and in a format best suited to the context. Recycling and waste ELT Health & safety policy management Employee engagement Gender pay gap reporting review Quarterly Townhall “Ask Payment practices me anything” sessions Modern slavery statement reporting “Ask Zillah” SlackChat Whistleblowing policy Charity and outreach ELT listening sessions Anti-bribery policy Inclusion and diversity Future Board The health and safety of all employees is a key priority for the Our people Group. Future is largely an office-based environment; all locations across the Group comply with relevant legislation and we We are a people business first and foremost. communicate our health and safety policy to all employees. In the Our six company values underpin everything UK, during the year to 30 September 2020, there were no fatalities we do. and one minor injury across all sites (2019: no fatalities and nine Our colleagues are key stakeholders in the minor injuries). There were no fatalities or injuries in the US or success of our business and therefore their engagement has been a Australia during the year (2019: nil). Our response to COVID-19 was key priority in 2020. This year we have delivered a broad range of swift and due to the strong technology infrastructures in place, people initiatives, from ensuring that we are promoting a safe, Future was able to quickly pivot to enable all of our colleagues to work healthy and inspiring workplace to raising our game in creating a truly remotely. We provided all colleagues with a stipend to support home diverse and inclusive culture for all our colleagues. working set ups and have taken key steps to develop our office The measure of our success in this area is our colleague spaces to be COVID-secure. engagement. This year we have introduced a structured approach to Wellbeing at Future doesn’t stop with physical safety. In 2020 we gathering colleague feedback - our “What Matters” survey asks key have taken a number of steps to ensure the mental and emotional questions to help us understand how our colleagues are feeling and wellbeing of our colleagues is supported. put in place the relevant interventions. Engagement and This year we have recruited and trained over 50 Mental Health trust will continue to be priorities for us and in 2021 we will be First Aiders across our UK sites to provide our colleagues with building more frequent opportunities to listen and respond to our resources and confidential support focusing around mental health. colleague voice. They run weekly drop in sessions and are available at any time via a dedicated email account. We have a Colleague Assistance Programme in each of our geographies which provides colleagues Wellbeing, health and safety with access to free and confidential support services such as a At Future, prioritising health and colleague wellbeing is a critical part qualified counsellor. In the US, we arranged a wellbeing gift in of our company culture. By supporting our colleagues physically, partnership with our healthcare provider to be delivered to our mentally and emotionally they can be fulfilled in their career and give colleagues’ doors during lockdown. their best performance. Staying connected is also critical to ensuring our colleagues' 50 / FUTURE PLC

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