In Investor Presentation H1 1 Results to o Jun June 20 2018 18 - PowerPoint PPT Presentation

In Investor Presentation H1 1 Results to o Jun June 20 2018 18

Exec Summary: Towards the Next Phase of Growth • New management team recruited in Q4 2017, led by Marc Boyan, defined a strategy to focus on both stabilising the traditional business and developing a pipeline of new opportunities • £5.5 MM raised from an equity placing in December 2017 to support growth • Strategic imperatives under the new management team to: − Stabilise existing operations and improve underlying profitability − Expand activities in and beyond theatrical production, both organically and via acquisition − Focus on new geographic markets 2

Index 1. Growth Strategy Update 2. Performance Overview 3. Summary Financials 4. Appendix 3

Growth Strategy Update: Stabilise Existing Operations and Improve Underlying Profitability • Streamlining of existing operations across Dewynters and SpotCo starting to bear fruit • Adjusted EBITDA from existing operations is up both in absolute and margin terms on prior year • Focus on resource-sharing between UK and US operations • New management team installed into SpotCo in Q1 2018 • SpotCo awarded 15 shows so far this year, due to go live at various times between Q4 2018 and 2020 4

Growth Strategy Update: Expand Activities Into and Beyond Theatre • Investments made in new operations, placing emphasis on non- live theatre clients to broaden client offering • First non-live-entertainment client serviced in Esme Loans • Marketing and communications agency Wake the Bear launched in H1 2018 and has successfully secured its first clients • PR agency Story House launched since period-end with significant cornerstone clients being supported by the existing business • Mark Cox recruited as Head of Corporate Development to spearhead Group’s M&A strategy • Management continues to assess various M&A opportunities to complement the Group’s existing offering 5

Growth Strategy Update: Focus on New Geographic Markets • Dewynters Amsterdam launched in April 2018 as a joint venture − Secured a multi-billion-dollar European media and entertainment group as its first client at launch − Performing in line with expectations and expected to make a positive contribution to the bottom line next year • New markets currently being assessed 6

Growth Strategy Update: How We See the Media Landscape Media Services: Live Entertainment Media Services: Other Clients Brand Marketing Life Cycle Reach & Research & Data & Reach & Research & Data & Ideation Creative Ideation Creative Consultancy Distribution Insights Consultancy Distribution Insights ✓ ✓ ✓✓✓ ✓✓✓ ✓✓ ✓ ✓ ✓ UK Other ✓ ✓ ✓ ✓ Geographies EU North ✓ ✓ ✓✓✓ ✓✓✓ ✓✓ America APAC ✓ Key areas in which r4e currently operates 7

Index 1. Growth Strategy Update 2. Performance Overview 3. Summary Financials 4. Appendix 8

H1 2018 Performance Overview • Adjusted EBITDA from existing operations up 25% to £0.5 MM • Streamlining of existing operations across Dewynters and SpotCo starting to bear fruit • Profits margins remained steady as a result of early and effective rightsizing actions • Strong Balance Sheet with net cash of £2.5 MM • As expected, Revenue for the period reduced to £36.0 MM − Reflects the residual effect of the closure and loss of shows at SpotCo in 2017, pre-restructuring • Moving forward, the Group has secured a promising pipeline of new shows with SpotCo currently working on half of the Broadway shows announced for the 2018/19 launch season 9

Index 1. Performance Overview 2. Growth Strategy Update 3. Summary Financials 4. Appendix 10

Consolidated Income Statement 6 months ended 6 months ended % Change £’000s 30 June 2018 30 June 2017 Y-o-Y Revenue 35,984 41,880 (14.1%) Gross Profit 8,841 10,452 (15.4%) Adjusted EBITDA* from 557 429 +29.8% Existing Operations Adjusted EBITDA* (Group) 325 429 (24.2%) Loss for the period (446) (328) (36.0%) Loss per share (p) 0.04 0.05 +17.4% *Before exceptional items and share-based payment charges, adjusted to exclude the launch costs of new operations which impacted results by £0.23 MM 11

Consolidated Balance Sheet As at As at £’000s 30 June 2018 30 June 2017 Total Non-Current Assets 10,924 13,128 Cash and Cash Equivalents 5,696 2,073 Trade and Other Receivables 10,904 9,340 Inventories 140 140 Other Current Assets 653 570 Total Current Assets 17,393 12,123 Total Assets 28,317 25,251 Total Current Liabilities (17,515) (17,145) Total Non-Current Liabilities (1,898) (2,926) Total Liabilities (19,413) (20,071) Net Assets 8,904 5,180 12

Index 1. Performance Overview 2. Growth Strategy Update 3. Summary Financials 4. Appendix 13

A Solid Platform for Future Growth "The Group is now in a much stronger position following a difficult 2017. The new management team has been successful in stabilising the traditional business during the first half of the year, and the recent spate of new Broadway musicals won by SpotCo is highly encouraging. Importantly, we have also made good progress with the strategy of utilising the Group’s skill set and deploying them into new segments, evidenced by work across the Group with non- live entertainment clients.” Marc Boyan, CEO “The launch of Dewynters Amsterdam, Wake the Bear and Story House has further broadened the Group’s client offering, creating new and more diversified revenue streams. With r4e’s existing operations continuing to demonstrate solid progress, combined with the Group’s strategy to expand into further sectors and territories, the Board is confident that the Group will make additional progress through the remainder of 2018 to establish a solid platform for future growth.” Lord Michael Grade, Non-Executive Chair 14

New York Operations: SpotCo • SpotCo notably remained profitable despite a Revenues (£MM) £5.8 MM decline in revenues (on a constant 65.2 exchange rate basis) 54.8 51.8 48.5 40.8 • Outlook for the remainder of 2018 has improved with the agency awarded 15 shows so far this year, due to go live at various times between Q4 2014 2015 2016 2017 LTM 2018 and 2020 Jun-18 • Currently working on half of the Broadway Adjusted EBITDA (£MM) shows announced for the 2018/19 launch season 2.3 1.5 1.2 0.4 0.4 2014 2015 2016 2017 LTM Jun-18 15

London Operations: Dewynters • Dewynters enjoyed a strong trading period with Revenues (£MM) revenues up £1.4 MM (+11%) 27.6 27.5 27.5 27.6 26.2 • Also saw proportionally stronger profits, with Adj. EBITDA up +109% to £0.6MM • Benefited from moderate streamlining at the 2014 2015 2016 2017 LTM end of 2017 and the continuation of efforts to Jun-18 change the way in which theatre and live entertainment events are marketed Adjusted EBITDA (£MM) • In H1 2018, worked on the market roll-out of 1.1 Esme Loans, the recently launched innovative 1.0 0.9 0.8 UK-based digital lending platform for SMEs 0.5 2014 2015 2016 2017 LTM Jun-18 16

London Operations: Newman Displays • Newman Displays had a solid performance in the Revenues (£MM) first half, with revenues steady at c.£1.5MM and Adj. EBITDA up +24% 4.1 4.1 3.9 3.6 3.5 • Continues to benefit from bringing printing and cutting in-house – and enjoys a good mix of business from live events, theatre production 2014 2015 2016 2017 LTM and film premiers Jun-18 • Recently strengthened business development Adjusted EBITDA (£MM) team with a view to protecting and enhancing the top line 0.35 0.30 0.22 0.22 0.16 2014 2015 2016 2017 LTM Jun-18 17