REG - System1 Group PLC - Capital Markets Day

System1Announcement

28/02/2023 13:00

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RNS Number : 3701R  System1 Group PLC  28 February 2023

 

                         28 February 2023

 

 

System1 Group PLC (AIM: SYS1)

 ("System1", or "the Company", or "the Group")

 

Capital Markets Day

 

US focus, partnership route to market and platform delivery

 

 

Further to the announcement of the update on the Company's strategic review on
30 November 2022, System1 today issues an update to coincide with today's
Capital Markets Day webinar, and a summary of the major areas that will be
covered in the webinar. The event will be led by James Gregory together with
members of the senior management team and will include a series of
presentations. In addition, there will be a Q&A at the end of the
presentation and a video replay of the presentation will be available via the
Group's website post-event.

 

What we do

System1 'predicts' (provides research results) and 'improves' (provides
insight and consultancy on those results) on arguably three of the most
critical marketing questions for our customers:

·    Advertising effectiveness

·    Brand effectiveness

·    Innovation effectiveness

We believe we do these three things better than anyone else at a value that
makes System1 our customers' choice. Our predictions are delivered via a
proprietary automated platform which means we can deliver predictions and
improvements back to the customer in as little as 24 hours, and offer
customers the option to self-serve, using the platform and our Express
Guidance tools. System1's USP is superior predictiveness and we believe we
deliver this at market-beating speed and price. We already boast many
world-class customers but legally are allowed to name only a few.

 

Strategic review - progress report

We announced an update on our strategic review on 30 November 2022 and
confirmed that we would provide information on implementation of the strategic
review at today's Capital Markets Day webinar. The following sets out certain
of our key findings and an update on implementation.

 

US First

By far the largest geographic market and the largest opportunity for System1
is the United States, which represents 43% of the global advertising market
(source: 2023 Global Ad Spend Forecasts - Dentsu) and 53% of global market
research spend (source: Global Market Research 2021 - ESOMAR). In the past 9
months we have refreshed the US Sales team, appointed a new General Manager
Americas and a new SVP for US Business Development. Supplementing these
investments, John Kearon, Founder and President has been in New York since
early January and is planning to spend as much of the year there as possible,
championing and supporting our fame and new business growth. We are seeing
some new customer wins and a growing pipeline which is encouraging.

 

Products

After more than two years of intensive development and financial investment,
our core suite of Data products (Test Your Ad, Test Your Idea, Test Your
Brand) and our data-rich TYA Premium database are now in place and available
for sale. New variants of Test Your Ad, including Digital, Out of Home, and
Audio have been developed to capture these large and growing advertising
formats, and are either on sale or ready to launch. Our focus as we scale the
business is on Data ("Predict") and Data-Led Consultancy ("Improve").

 

IP and methodology

System1's intellectual property and methodologies are comprehensively
validated as the most predictive available, and we are recognised
internationally as thought leaders in creative effectiveness. We have now
tested over 160,000 adverts, brands or ideas, processed over 11 million survey
responses, measured over 24 million emotional responses via our proprietary
reporting tool, FaceTrace(®), and conducted business in over 50 markets.

 

Customers

Over three quarters of our revenue (calculated for the period from April 2022
to January 2023 inclusive) comes from customers that purchase both Data and
Consultancy from System1. Over the same period, the 10 largest customers
accounted for 35% of revenue, the 20 largest, 62%. Customers that purchased
only Data products this financial year spent significantly less on average
than our 20 largest customers.  £3.6 million of the £6.2 million Data
revenue we reported in H1 of the current financial year came from customers
that did not purchase from System1 in the preceding financial year.

The strategy to develop our business via partnerships such as ITV, LinkedIn
and large platforms and agencies is progressing well, with the number of
partners trebling in the past year. We work with partners to acquire more of
the world's largest advertisers and provide a route to scale faster and to
leverage our platform to a wider audience of potential customers than could be
achieved by System1 without partnerships.

 

 

Shareholder value

The Company re-emphasises its intention to become a Rule of 40 business,
balancing growth in its standard, repeatable Predict and Improve products with
return measured by Adjusted Group EBITDA as a % of Group Revenue(1).
Supporting goals, measures and targets that support the Rule of 40 objective
will be communicated at future full-year and interim results announcements.

 

CEO James Gregory said: "In two years we have designed and delivered a
world-beating suite of standard, repeatable marketing prediction and
improvement products, that can be produced within 24 hours. My priority now is
to focus on execution to ensure we maximise the adoption of our products by
the world's leading advertisers, and particularly in the large US market".

 

 

Further information on the Company can be found at www.system1group.com
(http://www.system1group.com) .

 

(1) The standard Predict and Improve products represent just over 70% of Group
revenue in the current financial year to date. Adjusted EBITDA adds back
share-based payments.

 

 

For further information, please contact:

 System1 Group PLC                                           Tel: +44 (0)20 7043 1000
 James Gregory, Chief Executive Officer
 Chris Willford, Chief Financial Officer
 Canaccord Genuity Limited (Nominated Adviser & Broker)      Tel: +44 (0)20 7523 8000
 Simon Bridges / Andrew Potts

 

 

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