Bloomsbury Publishing Plc

1
Bloomsbury Publishing Plc
2003 Annual Results
2
Highlights

• Strong performing titles from all three divisions
• Harry Potter Biggest launch in Groups history
• Downstream benefits Film
• Increased investment in big titles
• Strategic acquisitions made
• Strong cash generation and supportive balance
  sheet into 2004

3
2003 Financial Highlights

• Turnover increased by 22.2 to 83.11m (2002,
  68.02m)
• Pre-tax profit before goodwill increased by 38.3
  to 15.38m (2002, 11.12m)
• Basic earnings per share before goodwill
  increased by 42.5 to 16.45 pence (2002, 11.54
  pence)
• Total dividend increased by 20.0 to 2.151 pence
  for the year (2002, 1.792 pence)
• Cash net of loan notes increased 52.5 to 28.33m
  (2002, 18.58m)

4
Turnover
Gross Profit
83.1m
43.5m
68.0m
28.3m
22.2
53.7
41.6
52.3
Gross Profit Margin
5
Operating Profit
Pre-tax Profit
14.6m
15.4m
11.1m
10.1m
44.6
38.7
The figures are stated before goodwill
amortisation.
6
Financial SummaryConsolidated Balance Sheet
2002
2003
m
m
10.6
Stocks
22.1
Debtors
52.2
Cash
Creditors
34.6
21.7
Shareholders funds
Cash on deposit is net of 1.147m (2002,
0.594m) loan notes.
7
Cash Flow
8
Turnover Analysis By Publishing CategoryWith
Comparison To Previous Year
2003
2002
Change
63
37.1
Childrens
56
Adult
22
25
6.7
Reference
15
19
-1.7
_____
_____
100
100
9
Turnover Analysis By Sales ChannelWith
Comparison To Previous Year
2003
2002
69
64
27
20
International
6
6
5
3
_____
_____
100
100
Change
Home 47.24m International 13.48m USA
3.81m Rights 3.49m Total 68.02m
Home 53.20m 12.6 International 22.62m
67.8 USA 4.64m 21.8 Rights
2.65m -24.1 Total 83.11m 22.2
10
Titles published by Category
Childrens 2002 2003 Frontlist titles in
print - 183 224 Backlist titles in print
- 767 918
_____ _____ Total titles in print
950 1,142
Change
22
20
20
Adult 2002 2003 Frontlist titles in
print - 272 425 Backlist titles in
print - 1,575 2,294
_____ _____ Total titles in print
1,847 2,719
56
46
47
Reference 2002 2003 Frontlist titles in print
- 274 412 Backlist titles in print -
2,171 2,376
_____ _____ Total titles in print
2,444 2,788
50
9
14
Grand total of titles
5,241 6,649
27
11
Investment In Future Years Titles
Investment increased 41.5 over 2002
41.5
26.8
43.0
12
Childrens DivisionHarry Potter - Maximising
Market Penetration

• Huge success of Harry Potter and the Order of The
  Phoenix in 2003
• Popularity of Harry Potter is growing
• Increased targeting of adult readers market

13
Childrens DivisionHarry Potter - Maximising
Market Penetration

• Re-packaging of Harry Potter titles to
  concentrate on adult market
• Fifteen new editions for 2004
• Re-launch of four adult paperbacks
• First time launch of adult hardback editions of
  first four titles

14
Childrens DivisionHarry Potter - Maximising
Market Penetration

• New boxed sets
• Celebratory edition to tie in with third film on
  June 4th 2004
• Paperback of HP5 on July 10th 2004
• Re-launch of Harrys school books (on right) by
  JK Rowling

15
Childrens Division

• Titles acquired for simultaneous publication in
  all markets
• Co-ordinate global marketing campaigns
• Pirates! by Celia Rees published successfully in
  UK, USA and Germany in 2003
• Next book by Celia Rees, due in 2005

16
Adult DivisionInvesting for the Future

• Film and TV tie-ins
• Strategy Increase publication of books with
  film and TV tie-in potential
• Creative Artists Agency relationship
• Five Films
• Two TV tie-ins

17
Adult divisionInvesting for the Future

• Strong list for 2004
• Bestsellers of 2003 now backlist revenues for
  2004
• German rights now being retained in-house for
  Berlin Verlag
• Jonathan Strange Mr Norrell
• The Ninth Life of Louis Drax
• Schotts Original Miscellany

18
Reference Division

• Encarta range of dictionaries sub-licensed to
  China
• Macmillan English Dictionary series sub-licensed
  to China
• Agreement to sell Wisden Cricketers Almanack
  from 2004
• Bloomsbury to publish new titles under the Wisden
  brand
• New edition of World English Dictionary in 2004
• Andrew Brodie acquired in January 2003

19
Reference DivisionIntegration of AC Black
Distribution Function

• AC Black has out-grown its distribution centre
• One third of stock being stored off site
• Efficiency of fulfilment operation affected
• Alternative solutions considered
• Macmillan Distribution has taken over running of
  distribution centre
• UK export fulfilment consolidated with a third
  party distributor

20
Reference Division Integration of AC Black
distribution function

• 22 personnel have been retained by Macmillan but
  33 redundancies as administration moved by MDL to
  Basingstoke
• Freehold sold to MDL for 1.355m will offset
  costs of _at_500k
• Generates cash for re-investment in the company
• Gives AC Black the warehouse space to continue
  growth
• Frees up management time for core business

21
Acquisitions and overseas developmentBloomsbury
USA

• 41 increase in childrens titles for 2004
• Performance of titles in 2003 has generated a
  strong backlist for 2004
• Strong list of authors for 2004
• Joanna Trollope
• Douglas Coupland
• Ben Schott

22
Acquisitions and overseas developmentBerlin
Verlag

• Well timed acquisition in a major book-selling
  market
• Operation now fully integrated into Bloomsburys
  management reporting
• Overhead reduction during 2003 to continue into
  2004
• Review of fulfilment operation during 2004 to
  create cost savings and increase efficiency
• New Sales Director and dedicated independent
  sales force appointed

23
Acquisitions and overseas developmentBerlin
Verlag

• Selling Bloomsbury UK books through Berlin sales
  force
• Launch of new imprint Bloomsbury Kinderb?cher in
  2003
• 6 childrens titles successfully launched in new
  list in 2003
• 18 new childrens titles to be published in 2004
• New commercial imprint - Bloomsbury Berlin in
  Autumn 2004

24
Acquisitions and overseas development Reeds
Nautical Almanac

• The absolute market leader acquired in December
  2003
• Annual turnover 0.6m
• Consideration 1.35m
• Complements existing nautical list
• Future development
• Electronic
• More effective sales representation
• AC Blacks wider customer base

25
Outlook and Future Direction

• The expansion in childrens books is a key
  objective at Bloomsbury
• Childrens publishing is an expanding global
  market
• Ability to acquire world rights in titles
• Strong publishing potential between US, UK and
  German markets
• Leveraging Bloomsburys established reputation in
  childrens publishing
• Aim to increase critical mass in both the UK the
  USA, and Germany

26
Outlook and Future Direction

• Targeting increase in proportion of childrens
  sales in the group
• Increase number of commissioning editors
• Increase title output
• Fiction for young children
• Picture books
• Organic and acquisition growth from 2005 to 2011
  UK, Germany and USA

27
Outlook and Future Direction

• Excellent list for 2004
• Fifteen new Harry Potter editions
• Biography of John Thaw
• Jonathan Strange Mr Norrell
• Schotts Sports Miscellany
• The Ninth Life of Louis Drax
• New edition of World English Dictionary
• Continuing to generate cash from operations
• Berlin Verlag is operating on a firm footing
• Reeds Nautical Almanac to be published for the
  first time by AC Black
• 2004 expected to show further growth

28
Summary

• Continuing to benefit from Harry Potter through
  2004
• Expansion programme for Childrens division
• Strategy to increase proportion of non UK
  revenues from USA and Germany
• More leverage to buy bestsellers for all three of
  the worlds major book markets
• 3 editorial units London, New York and Berlin
  now searching for new talent
• Strong balance sheet to enable continued organic
  and acquisition growth

29
Appendix
30
Turnover and gross profit growth1999 to 2003
83.11 m
22.2
53.9
43.48 m
31
Operating and pre-tax profit 1999 to 2003
15.38m
38.3
44.1
14.61m
The figures are stated before goodwill
amortisation
32
Basic earnings per share growth 1999 to 2003
42.5
The figures are stated before goodwill
amortisation