Audioboom Group (LSE:BOOM) — Investor Presentation

0:05 Good afternoon, ladies and gentlemen, and welcome to the AUDIOBOOM PLC Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated on the right hand corner of your screen. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard. I'd also like to remind you that this presentation is being recorded.

0:37 Before we begin, I would like to submit the following poll. I would now like to hand you over to Stuart Lard, CEO, and Brad Clark, CFO of AUDIOBOOM PLC. Good afternoon to you. Thanks, Lloyd. Hi, everyone. I'm just really glad you can join us today. Really, really excited and and happy to be able to give you a little more insight on the company to take a look today at our operations, our strategy, and what we're focused on. I really appreciate your support and and your feedback and the tough questions, make so sure you you send some of those in. We have a fantastic business, really great story, and I'm just super excited to to tell you about it. So, let's get started. We'll run through a deck, some questions at the end, and, I think to kick things off, me and Brad will will just give you a little intro intro on ourselves. I'm joining you today, from New York City.

1:33 This is, where I launched AUDIOBOOM five years ago, and it quickly became the the biggest part of of the AUDIOBOOM business. 90% of of our revenue comes out of The US today, and New York is really the home to the the the biggest and the largest podcast publishers in the world. So we're in great company in the city and we have studios in in in New York, and we drive much of the the business operations and and sales out of New York City. Before I took over as CEO, I was AUDIOBOOM COO for for three years previous to that driving global strategy, driving business development, marketing, and also sales. And before AUDIOBOOM, I was running podcast operations for an ad tech podcast ad tech company called Voxnest here in New York. Voxnest is a a company

2:24 that just sold to iHeartMedia for $50,000,000 just a couple of months ago. So I'm I'm deep in The US podcasting space. And before I came out to New York City, I was an executive at the BBC focused on digital strategy in their audio division. So, again, very heavily focused on podcasting. I've probably been involved in in podcasting since around 2008, so there may be no one in the world who who has as much time spent in in podcasting as myself. So it was a real kind of honor and pleasure to step up into the CEO role at the start of this year. It's been a a challenging year and a very successful year, and we'll talk more about that later. But first, I'll throw you over to Brad to give you a little background on himself.

3:12 Thanks, Stuart. Afternoon, everyone. Thanks for joining us. So I'm Brad, CFO. I would have been with the company for three years in in March of next year.

3:23 We've we've been a real focus in my time. I would have been to to help to help the business improve operationally, financially, in terms of its reporting, and how the business really operates. And I I think that'll come across today in in today's today's presentation. Actually, we made some great strides over the last few years. Before AUDIOBOOM, I worked at Brave Bison, another AIM Quoted company for for two years as GROUP FC and then GROUP FD. Prior to that, I worked for NEWS UK, part of NEWS Corporation for five years in in various financial roles there and trained at Grant Thornton. So, yeah, that's enough about me. So, Stuart, let's let's go through this. Thanks, Brad. Let's let's dive right in. I think the first kind of slide and the the first few slides we're gonna show you today is just an overview of the industry and the structure of the industry itself, and and we'll take a look at at where AUDIOBOOM sits and what AUDIOBOOM does within the podcast space. There was, an incredible graphic released yesterday of all the companies worldwide that operate in podcasting. There were over 200 different podcast companies on on that on that graphic. So this is a much more simple version of that, but, you know, if you wanna go a little deeper, suggest you head over to LinkedIn or on my page or my Twitter feed, and you can take a look at at that graphic because it's a real fantastic deep dive into who does what in in the podcasting space. But like I said, this is the more simple version, You know, at the top of this this this industry and the structure, we have big

4:53 consumption platforms like Spotify, Apple Podcasts, Google Podcasts, Stitcher. Those platforms where all of the the consumption and the listening and the connection with the audience is taking place. So everything that AUDIOBOOM does, whether that be on the tech side, the sales side, or or the the content and the publishing side, is delivered to the audience via those major platforms. Underneath those platforms, you have kind of two very distinct operations. You have a, you know, ad tech and a monetization operation, and then you have a a content creation and a and a publishing operation. And AUDIOBOOM very much plays in in in both of those fields. We deliver ad tech, we deliver monetization, and we are, of course, a major content publisher as well. And so we are delivering content out to to all of those consumption platforms, connecting and growing audience within those platforms, and then monetizing every single listen that takes place on on those platforms as well. So that's the structure, I think, of of of the space. As you probably know, the industry is right now is is growing pretty quickly.

6:01 The chart here on the left hand side, just highlighting the revenue growth of The US podcast industry. The US podcast industry is around 50% of of of the global industry when it comes to to revenue. You'll see there the growth for for for 2020 is at 10.4%. It stalled a little bit because of COVID, but as we'll highlight later, AUDIOBOOM is outperforming that growth and has outperformed the growth of the wider industry for the past few years. I think the exciting part is that number for 2022, this industry just in The US alone will be worth $1,300,000,000, so very strong growth. Obviously, a lot of media attention for podcasting right now, and we will be we will use those tailwinds and and and drive AUDIOBOOM forward as a a major player in this space. And that revenue growth, I think, is really being fueled by two things.

6:59 The first is shown off by the chart on the right hand side here, which is the which is podcast listening. By 2023, more than 50% of The US adult population, will be a podcast listener. We'll be listening to more than four episodes of a podcast every single week, so, very strong listener growth, obviously coming into the space. The other part that is really fueling the the growth in revenue in the industry is the transition from performance marketing and direct response advertisers that has traditionally been in the in the podcasting space to those bigger blue chip branding clients. So we're going from a place where we have smaller brands, direct to consumer brands who use promotional codes and URLs to to track their podcast advertising, to a place where companies like Ford or Land Rover Jaguar, or in The US here, Home Depot, Progressive, those big companies that spend billions of dollars on TV and radio advertising are for the first time advertising and podcasting, and and there are two reasons for that.

8:06 The first being the scale is there now. You can see that with the podcast listeners graph that that that's on here. They now have the the scale of consumption to to to kind of shift their focus to podcasting. And the second part is the industry as a whole with AUDIOBOOM included has done a great job over the last two or three years of legitimizing the measurement of, of of downloads and the measurement of advertising inventory, which means that those big brands and the the agencies that represent them now trust podcasting, as a medium and are spending more and more money in podcasting and growing that that revenue chart on the left hand side. AUDIOBOOM is a a major player, particularly here in The US, but also in Australia, also in in in The UK.

8:55 These are two rankers for podcast consumption. The first is is PodTracker, a US based company. And the second is Triton, a global measure of of audio and streaming audio and and also now podcasting. So AUDIOBOOM is is either the fifth or or sixth largest podcast publisher depending on on which rank we look at. And just to kinda draw your attention, I think, to to the competitive set here, you know, we are by far the the smallest the businesses in here with limited resource compared to our competitive set. When you look on here, you're going to see Westwood One, second biggest radio company The US, multibillion dollar company Entercom, third biggest radio company in The US.

9:43 IHeartRadio, the the biggest radio company in The US. The New York Times. ESPN, a huge sports broadcaster.

9:52 I draw your attention to Stitcher, a company that that sold recently for 300 and and $20,000,000 to SiriusXM. So the company we we we kind of keep is major, and we are, you know, podcast focused. We are podcast first, and that's allowed us to to to grow at an incredible rate and and keep this company and be part of of the kind of top echelons of this industry.

10:20 I wanna kind of give you a a view next on what AUDIOBOOM kind of actually does, what what we do, what our focus is on, what we've we've kind of grown over over recent years. So I think that the easiest way to show this off is to take a look at what AUDIOBOOM did in those kind of formative years, twenty fourteen to 2017. We effectively grew an incredibly strong and scalable platform. That platform is a technology platform for the hosting and the distribution of of podcast content. It's an ad tech platform to dynamically insert ads to integrate with programmatic and and ad exchanges to to monetize that content. And then it's a premium sales platform from our in house sales teams in in in New York and also London.

11:11 And that platform, the owned and operated platform, grew out over the those years between 2014 and and 2017, And it's extremely robust. It's extremely strong. It it's market leading. And it as I said before, it's it's incredibly scalable. So the the kind of the second part and the second phase of our of our growth strategy is to real really scale a content operation on top of of of that platform and allow that platform to, to monetize and and to distribute every single piece of of of that content. And that content operation and the scaling of that that content operation is really focused on our original content and the shows that we produce in house and the shows that we develop in house, through our AUDIOBOOM Originals brand and our production arm. It's the work that we do with publisher partners, third party producers, and the work that we do with them to distribute and to monetize their content.

12:07 And it's also a group of subscribers that that use our platform and our toolset, and they pay us to do so. And that growth and scaling of that content operation has has been pretty phenomenal to this point. We're now at 85,000,000 downloads per month, across the entire, entire platform, and we reach more than 25,000,000 unique users a month. So that's where our focus is. The platform doesn't need a a you know, too much work at this point. We've built something that that's extremely strong and and works very well for us. But all of our focus, all of our investment for the future is really on focusing that content business.

12:50 And I think I talked about the the the platform, the ad tech, and the monetization piece, and and then the content piece. And that really highlights for me the, you know, the unique selling point of of of of of AUDIOBOOM, and what we do better than anyone else out there and why we're able to be in the the top five or six podcast publishers in the world against, you know, much bigger, competitors out there. And it's because we have three key parts to our business. We have the the tech part to the business, that's the platform and the distribution and the ad tech. We have the monetization piece, which again comes from the ad tech but also our incredibly efficient in house sales teams. Then we have the content part, which is our own publishing arm and work that we do with third party creators. Right now, the consolidation that's happening in the space is happening around each three of those elements.

13:42 You know, the big three companies here, Spotify, Entercom, SiriusXM, they are paying hundreds of millions of dollars right now to create podcast businesses around those three key pillars of tech, content, and monetization. And I think it's incredibly smart of of AUDIOBOOM, to build out those three pillars, in the early days of of its business, and to be growing around those three three pillars. And it allows us to compete and allows us to excel in the podcasting space right now. Before we jump into, a view, you know, on our our content strategy because, obviously, I just told you all that that's the key focus going forward and the key part of of our investment going forward. I think we just kind of pause and and take a look at at the financial performance because, you know, our growth story is super strong.

14:31 We've had a, you know, incredible year against the backdrop of COVID, And I think, you know, these are some some numbers that might be familiar to your, you know, our q three year to date revenue at 18,300,000. Now that's up 18% year on year despite the impact of of COVID. So we've been very resilient to to COVID, and the industry has been resilient to COVID as a whole. We've rebounded very quickly from, you know, q two, which was more deeply impacted by COVID than any other part of the year. Our market expectation for for for 2020, again, as you probably know, is twenty five point five million. So I think what we've done a really good job of just in the last kind of two years and something that Brad has been particularly focused on is ensuring that they that that we go through that market expectation. We outperform that market expectation.

15:26 And right now, with just, you know, three and a half weeks of the year left, we're extremely confident that we will go through this 25,500,000 number and and outperform that that market expectation once again. Going back to the the the revenue growth, you know, I think the one thing I do wanna high highlight here is just how AUDIOBOOM is outperforming the rest of the industry. So we are outperforming that competitive set. You know, our growth of of 18% year on year this year is 93%, 92% ahead of the industry growth. So while the industry as a whole is resilient to COVID, you know, the efficiencies that AUDIOBOOM has in its business, you know, has enabled us to grow even faster than the rest of the industry. And we have outperformed the rest of the industry over the the the past three years, we will continue to do so as well.

16:19 So, you know, we're a major player, strong revenue growth, and continuing to to grow faster than the wider industry. I'll throw it over to Brad for a couple of slides here. Brad's gonna take a look at some of the other financial metrics. Yeah. Thanks, Stuart. So, yeah, just building on what what Stuart said there, just to refresh for those familiar with us and also for for those people who are new to the company. So just wanna explain a really simplistic view of the p and l just so everyone understands understands what it is. So, you know, if you look at our top line revenue, that's simplistically the advertising revenue that we that we generate through our in house sales teams. Cost of sales are our our payments to our podcast partners, so our revenue share payments.

17:05 Our gross margin, which runs at 22% this year, is the retention of the advertising revenue generated. So typically with podcast our podcast partners, we split the revenue share split the revenue that we've generated, typically eighty twenty or $70.30. But our gross margin across the business is is about 22%. In terms of OpEx within the business, again, very simplistic view is that, you know, 66% of our OpEx is is within salaries, commissions for our for our staff within the business, technology technology costs. And by that, I mean, hosting and bandwidth costs account for around 15% of of our OpEx. So it's just a very simplistic view of our of our p and l. So we've got very good top line growth above the wider industry mark and a narrowing EBITDA loss position as well.

17:58 To the end of September, there's a 32% year on year improvement. And that's you know, we've achieved that through continued good cost control, ensuring that the resources that we do have are allocated appropriately to continue to to drive growth. And this company really is very efficient in terms of what it does. The head count within the business currently is 35. If you compare that to others within within our industry, it's it's excellent. Acast, one of our biggest competitors in The UK, released their 2019 annual report recently, and their headcount is over 200. So we've got a 170 less heads. So we we you know, we're we're very, very efficient in terms of in terms of what we're doing. As well as the good top line growth, narrowing EBITDA loss position, the the cash burn within the company is decreasing as well. So on the right hand side, we can see that that's decreasing half on half. And by net cash burn, what I've done here is strip impacts on on the working capital. And by that, I mean any fundraisers or any loan drawdowns, and I'll come to that shortly, but any loan drawdowns that we've done in those periods.

19:08 And also, I've taken out the content partner advances. So to sign a new talent, a certain select number of partners we pay recoupable advances to, those are recoupable over the life of the deal, but they do impact working capital. So what I've done there is just stripped out those those impacts on the working capital just to show the net cash burn half on half. So that's improving as well. In terms of the cash cash position, so the balance sheet is strong within the company. We recently announced a three over a £3,000,000 subscription, which was a premium to the to the share price. We've also got a 3,300,000 loan facility available with SPV Investments Limited. That's fully available. We've actually repaid the the $700,000 of that 4,000,000 loan facility following the subscription that we announced in in October and the funds that we received in November. So the company has no debt currently a and very, very strong balance sheet, the strongest certainly in my time here at the company.

20:11 And to build on that, those improving metrics, there's absolutely utmost focus and importance on on the cash cash within the company. So left hand side here, can see cash collections now. Obviously, the revenue is increasing. So I would expect, obviously, as well that the cash to cash collections to increase as well. But that being said, we're averaging at the moment $2,200,000 collections, per month. That's 34% higher than than last year's, average at 1,600,000. So, yes, although the collections are increasing, it's because of revenue increasing. What the actual key point is that the data days are decreasing significantly year on year. At the half year, they were 58. 2017, they were a 139.

20:57 Now I'd expect at the year end for them to tick up slightly to around the 70 mark. But again, if we reference one of our competitors, Acast, they reported a debt a day of 110 at the end of twenty nineteen. So again, it's just highlighting the efficiency and good performance within this business currently in terms of that that key metric continuing to continuing to decrease. Now the reason why we've been able to drive that performance or one of the main reasons why we've able to we've been able to drive that performance is because of our bespoke Salesforce CRM system, which connects various different parts of the business being the content that we that we have available. The sales bookings that we have are logged on there and that flows through to our to our finance system. So that just allows us to generate really good quality data, which is accessible all through the business. We're able to put that information out to our customers and partners. And we're able to, in this in this example, to basically cash collect cash that much quicker, continuing improvement year on year, and better than better than our competitors as well.

22:01 And and that sales force point as as well is is is a final point for me here is that, you know, that the company now is in a place where we're very reliable and timely in terms of the reports that we give to the market in terms of financial performance. So first quarter, third quarter, we we typically update the market within ten working days of the period end. And for the half year and the full year, typically within by the twentieth of the month, we we give the give the update to the market. So that's just a that's really just a reflection of the the the improvement that we've made internally, the ability that we have to to report to the market. And the the benefit another benefit of the Salesforce system that we have as well, an important benefit, is that we're able to see what what revenue we've got booked in in future months and in in in future periods as well. So we can see how it how we're how we're gonna perform over the over the over the coming months and years. So that that really is a benefit for us. So okay. Back to you, Stuart.

23:01 Thanks, Brad. We'll dive right in, I think, the the content strategy. This is the the real focus for the business. This is what we're scaling. This is where we are we are investing, and and this is the bit that directly leads to the to the revenue growth for for the business. And I think the the key thing with AUDIOBOOM is that we deliver value for a podcaster of any size, and we've built a platform and an operation that delivers that value all

23:28 the way down this content pyramid. This is how we view content within the business, and I'll break it down for you. At the tip of this this pyramid, AON is AUDIOBOOM originals. This is our in house production team, shows that we develop internally that we own and operate. We have 28 AUDIOBOOM originals today. We monetize them in the most premium way within the the business. We have studios in in New York City. We're extending and expanding the studios and the the production facilities in in the coming years. And and kinda most importantly, I think that AUDIOBOOM originals have a a very strong gross margin attached to them. So a gross margin on those originals is is is more than 40%.

24:15 And as Brad mentioned earlier, the the kind of the average gross margin across the group is around 22%. So AUDIOBOOM GROUP delivers a stronger gross margin. It allows us to to control our content output more so than than any other part of the business. And it really is the the key part that we will invest in in the coming years. I'll deliver more information on that later in the presentation, but we will like, we will we will grow and expand production facilities. We'll bring more producers into the business. We will market and and and and and take to market and grow audience more efficiently for those shows through investment as we go. The second part to this this content pyramid is, what I call our our premium sales network. So this this is the work that we do with just 250 top tier podcasts.

25:07 They are premium independent, shows. We work with them to host, to distribute, and to monetize their content. And, they are monetized in a in a premium manner, high CPMs between 25 and and and $45. And these shows have audiences between, at the bottom end, 50,000 downloads per episode, and at the top end, you know, 2,000,000 downloads per per episode. And in terms of, you know, of of the the revenue performance from these shows, at the top end of, of of this tier that, you know, the top three or four shows, each deliver more than $2,000,000, in in advertising revenue, to the to the business each year. So these are real really is the, you know, the top tier of shows. These are the shows that you'll find in the, Apple Podcast Charts top 50, and, you know, it's it's the biggest and and also the the fastest growing part of our business. You know, one of the reasons why we grow this part of the business so so quickly is the work that that we have done on the business development side. So three years ago, most of our work to sign shows to the platform was done through outbound business development.

26:24 Today, all of the opportunity that's coming into this premium sales network is inbound. It's coming through the major Hollywood talent agencies and the relationships that we hold WME, at CAA, and at UTA, and various other talent management and talent businesses. They present us almost daily with opportunities to work with their biggest clients, their biggest talent. We partner with them to monetize and to help grow audience for their shows. A huge part of of AUDIOBOOM's revenue is the work that we're doing with the biggest third party podcast publishers. That third tier on the content pyramid is is is is definitely more of a volume play.

27:10 It's a network of more than 1,500 podcasts that we monetize through our advertising tech. While the the the top two tiers of this pyramid, we are selling in a very bespoke way. We're selling live reads and host endorsements that are delivered within the fabric of the show. The the third tier here is all about automated ad tech delivery. So those shows are made available in our ad tech layer. We then connect into programmatic ad exchanges, PMPs globally, and we fire in dynamically insert pre produced thirty second ads in pre roll, mid roll, and post roll positions throughout that content and wherever those podcasts are listened to. So as I said, it's a it's a lower value play.

27:59 CPMs are between 4 and $12, but we're doing this at scale, and it's the fastest of recent times, it's been a very fast growing part of our business. So we have increased the revenue that's coming out of that automated ad tech part of the business by more than seven times in the last eight or nine months. So since April 2020, you know, more than more than seven times growth on that ad network and and programmatic part of the business. And then the final part of our of our of our content are the shows that pay us to use our toolset, our hosting and distribution platform, and our analytics services.

28:44 So these are generally, enthusiast, hobbyist level content creators. There are more than 4,000 of them on our platform. They either pay us $10 a month or or $20 a month, to to use that toolset. And all the growth in in this part of the the business is is organic. We've never spent a penny on marketing this part of of AUDIOBOOM. I think there's real kind of upside here because right now, there are more than a 100,000 new podcasts launching every single month, and we are probably capturing just around a 100 of those podcasts. This will be an area that we do invest in. We will grow our subscription platform. There's a fantastic gross margin on here of around 92% because, really, the only cost to AUDIOBOOM is the bandwidth and the distribution cost.

29:37 It's a kind of a self serve platform, and the cost attached to it is is extremely low. So we will invest in in AUDIOBOOM originals at the top. We'll invest in the subscription platform at the bottom, and then the middle two parts, the business development work that we that we do there will will grow out those networks very quickly over the coming years.

30:02 This is a pretty complex slide, but, you know, just to break this down, this this slide really is a case study on how we work with a with a content partner and how we work to develop their audience and then develop their advertising revenue. Once we bring a show on board through our business development, our content team and our ad ops team kind of take over. They coach that show in best practice around how to build audiences, around how to deliver advertising, and they really kind of work hand in hand with them to to to grow that to grow that show. This is just an example of one of our our top five shows that joined us in the middle of twenty eighteen. In the first month they worked with us, they just delivered around 6,000 downloads. As of the summer of this year, they were delivering more than three and a half million downloads every single month. And next year, they will deliver more than $3,000,000 of revenue to the business. So we work very closely with our biggest podcast publishers.

31:01 We're very connected to the the talent involved in those shows, and we we kind of, we grow with them. We help them scale, and we help them, deliver a a really top quality product. One more kind of case study here, and I I think this shows how the content pyramid that that I showed you a couple of slides back really actually acts as a incredible business development funnel as as well. So this is a this is a show that joined us just around a year and a half ago on our subscription platform. When they started working with us, they were paying us $10 a month to use our toolset. Internally, through the CRM system and our dashboard that Brad mentioned earlier, we can flag any podcasts that are seeing strong audience growth. Once we see strong audience growth from that podcast, our content team will will reach out to that podcast, make that connection, and build a relationship with them. And we start to upgrade them through the various tiers of that content pyramid. So the first thing that we did is we removed them from our subscription platform, and we took them into our automated ad network.

32:12 We fired in programmatic ads, pre produced ads through our technology, and we started to make around $10,000 a month from from that show as it as it as it grew audience over time. As that audience continued to grow, we moved it up into our premium ad sales tier, began to sell advertising from our in house sales teams in New York and and also in London, and very quickly took that show to a

32:38 place where it will, next year, deliver around 3,500,000 to the company. So by having that, full stack content pyramid where we were able to deliver value to to content publishers all the way down down that pyramid, we're also able to to to grow shows, and and work organically with with shows to take this show, a true crime show, from a place where they were paying us $10 a month to use the platform to a place where they would deliver more than $3,500,000 in in revenue next year. AUDIOBOOM Originals is, you know, a key focus of mine. I talked a lot in the past about the shift in in AUDIOBOOM from a, you know, a services and a and a technology company to being a creative content driven business, and AUDIOBOOM GROUP PLC is is at the heart of that. As I said before, we have a production team in New York. We have studios in New York.

33:36 We have plans to open facilities in London and in Los Angeles to access the talent base in both of those cities. This is a group of 28 shows today that are developed and produced in house. We grow audience through marketing across the wider platform or through paid marketing in other podcasts. We have IP ownership that allows us to deliver revenue from touring, merchandise, TV, and book adaptation. The key thing about I think the smartest thing about AUDIOBOOM Originals is the way that we use data to inform our development process. So we have, you know, incredible amount of audience data coming in to the the platform from the 85,000,000 downloads, that we that we receive every single month.

34:26 We also have incredible data coming in from the advertising side and the demand side of the business, and we're able to start to to use those insights to develop new content. And I and I think just one kind of very clear example of that is a show that we launched just two months ago. It's called Because Mum Said So. It's a parenting show. And we were seeing an incredible audience growth and audience engagement around the parenting shows, the third party parenting shows that that we worked with. And then we were seeing incredible demand from our advertising partners for parenting shows and the audience connection that that comes from them. So that allowed us to to to internally develop a treatment for Because Mum Said So. We also just launched another parenting show called Raising a Pro, and already those are selling very well and growing really strong audiences. So we're very data driven in in in in how we develop those shows, and that comes from having the wider platform and the incredible scale in our content operation.

35:32 The other part of of what we do in our production strategy is to grow shows around key 10 poles. So we work very heavily with sports shows, with true crime shows. We are able to develop shows in similar genres and then use those tentpole podcasts that deliver more than, you know, a million downloads per episode to market the launch of of our originals and, and bring in audience very quickly so we can go to market from from day one, with those AUDIOBOOM originals. And this is a plan that has, has worked very well for AUDIOBOOM originals. Revenue is, around 4% of the entire AUDIOBOOM Group revenue comes from AUDIOBOOM Originals in in 2020, but we have goals to deliver more than 15% of of group revenue by 2024, with relatively kind of low risk attached, because we, we develop these shows in a very efficient way. We have a huge platform to market those shows against, and we have, you know, a very strong sales unit and sales team to to go out and to to monetize, that work. So we'll increase significantly the number of owned and operated podcasts in that network. As I said, we'll take, you know, the the revenue from those audio green rituals up to 15% of group revenue by 2024.

36:51 We'll keep that gross margin and hold that gross margin above 40% on AUDIOBOOM originals versus the the 22% across the group, so we're delivering a higher contribution there through AUDIOBOOM originals to the bottom line. I've talked about the the studios and the production teams that that that will open and and expand. And we'll also increase the the marketing and the promotional budgets to to create more impactful launches. So this is a a a key part of our investment. It's a a key focus for for for me and the the content teams in The UK and The US right now. And it's an incredible incredibly powerful branding play as well because we increasingly becomes become more well known for our content creation amongst audience as well as the industry.

37:42 So right at the top, I think I talked a little about how we created really fantastic scalable platform, in the first, few years of AUDIOBOOM that we're now building this content operational on top of. I wanna step back and and just give you a view on that platform even though we don't invest too heavily in it in it right now because it's built. It does what it it does its job. It's it's a enterprise level platform. It's robust. It's it like I said, it's it's fully scalable. But to give you an idea of what that platform is, and I'll jump forward to this slide, this is the the technology piece of of that platform, and it starts out, I think, with a a content management system that allows podcasters to upload into a dashboard to manage their content, to distribute that content out to all of the major listing destinations, and it provides them, with a very user friendly and and and very simple way to to manage that distribution.

38:41 On top of that, we have, our advertising tech. So, podcasters are able to set, advertising markers within their content that we can then fire dynamic ads into within the content of those episodes. We can also connect that content to ad networks and programmatic exchanges, so we can deliver, advertising at at huge volume. The next kind of part of that tech platform is our Salesforce CRM integration. So this is a bespoke build for AUDIOBOOM. It allows our ad operations team to efficiently deliver advertising across the hundreds and thousands of podcasts that that we work with. And as Brad said earlier, it's it's an end to end solution, so it it it runs the whole process from booking the advertising with an agency or an ad exchange, the execution of that advertising with each of the individual podcasters, and then the flow of, data back for billing purposes, and the flow of data back to the agencies to, highlight the impact of each of those advertising campaigns. That's a powerful piece of of kit for us. And then the final part of that that tech platform is really the the analytics package that we have, which enables us to to gather incredible insights. So this is a a package that's certified by the Interactive Advertising Bureau.

40:05 It's the it's the latest version two of the podcast advertising measurement standard and delivers consumption data, demographic data, and some really strong audience insights. So that tech platform and that ad tech platform is really at the heart of what we do and allows us to to build the the content operation on top. Just jumping back into the sales part of of of that platform and our monetization strategy, and I think this is, you know, a really good area of of focus for us. As I said before, we have in house sales teams in New York and London. They are delivering the real premium end, podcast sales piece. We then have external sales partners in Australia and in Canada. Australia through Australian Radio Network, Canada through Rogers Media, and these are our set our third and fourth largest consumption markets.

41:02 Our listening levels in Australia and Canada are growing fast and are the third and fourth biggest markets for us, we have sales partners in place in each of those territories. So our sales strategy is is is kind of linked to that content pyramid that I showed you earlier. The phase one monetization is really the the premium end of of things. So this is host endorsements and live reads. It's sold by our in house teams and our external partners. The CPMs are very premium, 25 to $45. The advertising is baked into the the content of the podcast. And these are performance driven campaigns, so they have optimal audience engagement. They the performance of those campaigns can be tracked by the advertiser, and it's, you know, it's delivering the you know, a really strong amount of revenues to the business and is really the premium piece of what we do.

42:00 Once we have been running that piece of advertising for ninety days, we then move to the second window or the the phase two monetization. What we do here is we remove that advertising, that baked in premium advertising from the podcast, and we replace that one or two minute ad with an ad marker that allows us to dynamically insert pre produced ads into that piece of content. So this what we're doing here really is is we're starting to monetize, the archive more effectively, and this is something we've really been focused on for for the past six months. Previously, we were really only able to monetize, that first window. Now we're more effectively monetizing a second window beyond ninety days. So if a piece of content is listened to it launches today and is listened to today, we monetize it in a in a premium way. If it's launched today but not listened to for another one hundred days, then we can still monetize it but a lower CPM between 15 and and $25, again, sold by our in house teams and and our external partners.

43:05 And then we have that third phase of monetization, which is really the the kind of the fill, the remnant inventory, anything that doesn't isn't filled in in in phase two at at that kind of mid level CPM. We then throw it into our global ad networks and our programmatic exchanges, and we see CPMs are, you know, between 5 and and $12. It's high volume again, but but much lower CPM. So this just optimizes our monetization, doesn't leave money on the table, and really drives a lot of value for our podcast partners. I think the next couple of slides are just to highlight some of our, key performance indicators. You may be familiar with these. We, we we put these out, every quarter alongside our financial updates, but our KPIs really do, you know, really are a indicator of the the health of this company and the growth of this company.

44:07 The first one is is brand count, and this is simply AUDIOBOOM's growth in active customers. How many advertisers or brands that we work directly with from our in house sales team, during a quarter? And as you can see here, growth has has been incredible. You know, it did dip in q two of twenty twenty. That's an impact of COVID, but already heading back in in the right direction, and we expect, you know, full return to normal in q four and, again, in in q one of of twenty twenty one. Another KPI is our is what we call our ECPM. This represents the the value that AUDIOBOOM is able to extract from 1,000 So we can compare are able to kind of just see to see how well we are optimizing our revenue.

45:10 And, again, you'll see the same dip here in q two of twenty twenty for COVID and then a return to to to normal in q three and and and q four should be a a a record breaking, k p eCPM KPI for for us as q four is extremely strong and is so every single year. Those KPIs directly highlight the the the health and the the growth of the company, and and and those continue to head in the right direction. And then just one kind of, I think, further slide to to, to highlight, which is really the the levers that we have within the business for for for greater upside. I've talked to to some of this already today, but, you know, geographic expansion is an area that we are beginning to focus more and more. We obviously have our presence in the in The US and The UK.

46:01 But we just launched new partnerships, as I said, with Rogers and Australian Radio Network in in Canada and Australia. And this is really our first steps into those territories, and will allow us to get a foothold in those markets in a very efficient way, and over the the longer term will allow us to to start to really model out and and create that expansion into those next two biggest territories for us. Another kind of upside area that that we haven't explored to its fullest yet, I think, is just the the IP exploitation through AUDIOBOOM GROUP PORTERS. So this ability to turn our our podcast into TV shows, adaptations, merchandise, book deals, tours.

46:47 The the the the more content that we create in house, the more opportunity there is, to exploit the the IP. I've talked a little bit just a a moment ago about how we're beginning to monetize more effectively the archive, and this vast archive content that's on the AUDIOBOOM platform. We will continue to to do that, and I think over the next, you know, one to two years, you'll really see the the results, the revenue results of of effectively monetizing that back catalog. And that's a technology play in in in the main, and we're really starting to see the value of our of our investment in technology coming through, and allowing us to to, fully exploit the archives. And then as we increase that subscriber base and as we invest in paid marketing for that subscriber base, those shows that pay us 10 or $20 a month to use the platform, we'll see more examples of shows graduating through the ranks and becoming more valuable to us as advertising funded podcasts as well. So some key areas, I think, to look out for over the the coming years as as as we grow out the business.

47:58 And then just, I think, in in summary before we jump into the the q and a, you know, it it has been a a very positive year for us. We've continued that growth story, 18% year on year on year growth, outpacing the industry growth, significantly reduced EBITDA loss. We're expanding audio green originals. We're ready to accelerate the growth of our content and our production business. We're a global leader. We are the fifth or sixth biggest US podcast publisher, the largest international podcast publisher in Australia. With the industry forecast to grow 150 between 2019 and 2022, the resilience in the industry and then, you know, the the tailwinds that that creates for AUDIOBOOM just means we're in an incredible position to to continue this growth story and to have even more success in the coming years.

48:49 So that's the that's the the presentation from us. That's a few of the areas that we wanted to to highlight, I think, today. Back to Lloyd, I think, before we jump into some q and a. Thank you, sir. Thank you, Brad. Thanks, Brad, very much. Ladies and gentlemen, please continue to submit your questions using the q and a tab situated in the top right hand corner of your screen. But just while the company takes a few moments to review those investor questions submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. I'd also like to remind you that your feedback is important to the company. Immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations.

49:39 Stuart and Brad, I know we haven't given you long to review the questions submitted today, but I wanted to hand back to you. Please respond to those questions where it's appropriate for you to do so. Could I ask please, and also ask you to read out the question before giving your response? Alright. Will do. Thank you, Lloyd. So I think it's predictably, the the most popular question, and it's, coming from Martin d and a few others, is really about the, about the sales process. So, this is please tell us more about the sales process and why it didn't end with with the sale of the company. So, yeah, I think to to answer the the second part of that question first, it didn't end with a sale because it was just way too early to to sell this business. We're we're we're just hitting our stride.

50:33 We have huge growth ahead of us, huge growth behind us. We understood that we can bring more value to shareholders by continuing this ride independently for the coming years. I mean, to tell you a little more about it, and I I can't talk too much, and I'm a little bit limited in what I can say, because we're still under the still governed by the the takeover panel here. I can tell you that we did engage with more than 20 businesses that were interested in learning more about the company. Those businesses were globally based, although many were in The US. They were major media organizations, broadcasters, music companies.

51:24 I was actually very pleased, I think, to see the the breadth and the range of businesses that were interested and are looking to place podcasting within their businesses. I think one key thing and one really good thing is that although at this point, there have been three main players consolidating at SiriusXM, Entercom, and Spotify, there are so many more out there that really want podcasting to be part of their business. Over the next few years, I'm pretty sure we'll, we'll spend money, on podcasting. So, that's, that's great to know because it just really highlights the interest in podcasting and the interest in business like AUDIOBOOM that is very much a leader in podcasting.

52:21 So, you know, we did talk to we did go deeper with several interesting parties, and we got to the the place where we were talking about valuations. But it again, it was just very clear that the publicly available stock price were was an anchor to those valuation converse conversations. I mean, you know, we talked about valuations at a premium to that stock price, but no one, you know it could not be justified internally for any of those potential acquirers to to pay to pay multiples of that publicly available stock price. So the the stock price was was an anchor and didn't get any of those valuation conversations anywhere close to where they needed to be for us to really deliver the value that we wanted to deliver.

53:21 I think the other part is, you know, through that time we emerged from COVID, we rebounded very quickly from COVID, we saw, you know, the the growth trajectory ahead of us. Again, we're very confident in where we're taking this business, and it was clearly way too early to to sell at just a small premium to to to that share price. You know, we will create a lot more value for for this business by being independent for for for the coming years for sure. I think one thing that did come out of process was feedback from some of those potential acquirers and something we heard a few times was about the need for our content business to develop further, particularly, you know, the original content and the owned and operated content piece.

54:13 That was kind of fantastic to hear, I think, because supported the the strategy that we brought in a year or two ago to focus heavily on the growth of of AUDIOBOOM originals. So that's you know, I've highlighted that today. That's where we will invest in the coming years to grow AUDIOBOOM Originals and and the owned and operated content piece around that. You know, that will make us, you know, more valuable and and a stronger business going forward. So, look, you know, I think it's obviously the question we've been asked a lot, and it's it's, to me, very clear that we went into a process way too early. It wasn't the right time to to to look to sell the business. We have an incredible amount of growth ahead of us, and and we will be a, you know, a bigger and and stronger company for it.

55:05 Let me just jump back onto the q and a section to get another question for you guys. Okay. So this I think this is another popular one today. It is when does this business breakeven, and what does breakeven look like? So, yeah, it's it's another great question. Again, to answer that second part first, breakeven is is relatively kind of simple simple to calculate for this business. We know it's on or around $35,000,000 and and and doing the math to to get there is is pretty straightforward. You know, we know that the market expectation this year is 25,500,000 revenue with a $1,900,000 EBITDA loss.

55:55 Our cost base is relatively fixed. You know, we're scaling this without adding a lot of new costs. We don't need to hire any new team members to to get to that breakeven point. So at that 22% margin, you can draw that line from those market expectation numbers to see that breakeven is is is around $35,000,000. So we know where it is. We know we're heading to it pretty quickly. We know it's kind of on the horizon, and we are focused on getting there. You know, if you look at at at this year, you know, we'll we'll because of COVID, we will be a few million down a few million down on where we would have wanted to be. So we would have been very close to to to that 35,000,000 breakeven number in in in 2020.

56:45 You know, it's in touch within touching distance now, and and it's it's what we are all very focused on getting to. Okay. Let's see what else we have. This question is how protected is the business against COVID nineteen and any further lockdowns? Like, I I think the first thing to really think about is is the industry you know, in in itself, it's continued to grow this this year, albeit a lower kind of 10% growth rate. But it's as an industry, it hasn't as an advertising supported industry, it hasn't been impacted in the same way that that that television radio has. I mean, radio here in The US, the majority of of radio businesses, were down 50% in in in q two year on year, and, around 20%, down in in q three year on year.

57:49 So huge impact on on on the radio business. But but podcasting continues to work for advertisers, and and, continues to, attract, money from advertisers. So there there should be no real kind of issue around, around the demand side through any other kind of COVID issues. I think secondly, you know, AUDIOBOOM itself is probably the most efficient podcast company in the world, and Brad talked to it early. Know, it's a we have a team of 35 whereas our competitors have teams between eighty and two hundred. We've built in an incredible level of automation within the business, fantastic processes that allow us to be that efficient.

58:35 I think, you know, for I don't know. I think that that thirty five thirty five headcount number is the lowest that has been in this business since I've worked for AUDIOBOOM in in five years, and we are carrying a lot of fat for for for a long time. But now we have a very clear strategy and each one of those heads is is attached to that strategy. Each one of those roles drives the business forward. Each one of those roles is directly linked to revenue generation for the first time in a long time. So, again, as I said before, we don't need to to to grow out the cost of staff, which is our our biggest cost any further.

59:21 So we're incredibly efficient. The industry is is growing as a whole. We're really well insulated. We've built automation into the platform. You know, I don't have too many concerns about about COVID impacting the the business any further. I think maybe we have time, just for one more quick one. Let's see what we have. Okay. So this is, I mean, this is a good one to wrap up with perhaps. I mean, it just says, how do you judge the performance of the business this year? So as as you all know, I officially started as CEO on on on the first of January of of of twenty twenty, walked straight into a premature formal sales process, which could have been a huge distraction for the business.

1:00:17 Then literally two weeks later, we were hit with a global pandemic, so it's been a challenging year, a quite challenging first year. I think, overall, it's been an incredibly pleasing year and we've proven what an exceptionally strong business we have created that has been resistant to a global pandemic and has continued to grow. You know, I'm about a lot of things within the business, pleased about how we continue growing through COVID and and how we were protected against that. I'm pleased to continue growing this company independently. It's the right way to go. As I said, the sales process was premature.

1:01:05 We're just hitting our stride. I'm pleased that we have capital within the business for the first time. While we've had similar levels of capital or fundraisers before, this really is the first time that we've had a clear strategy that the entire team is buying into so that that money will be spent in the right way and will drive significant growth for the for for the business. I'm pleased that we've we've outperformed our competitors. We've grown faster than the rest of the industry. I'm pleased with that kind of brand that we've created and the the understanding within the industry that AUDIOBOOM is is a leader in what we do. And I'm really pleased with the with with everything this team has done and how they've reacted to COVID, how they've reacted to to to working remotely to continue to drive this forward. So it's been a a, for me, a a very positive year, you know, in in in my first year in the job. I think more than anything, what we've what we've done this year is we've just set ourselves up for more success.

1:02:09 You know, next year, we're we're focused on it being a real kind of breakthrough year for the company, and we have, great growth plans, really strong strategy that I I hope we've been able to convey to you today. I'm really excited about moving this forward. Stuart, that's great. Thank thank you so much. I think you've addressed most, if not all, the questions submitted today. I know you will review all questions submitted by investors, which we may not have time to get through. However, I'm mindful of time with the fact that the investor feedback is important to you. Perhaps, Joe, I could ask you just to wrap up before we redirect investors to give you feedback. I'm sorry, Lloyd. I I missed the last part of that. Yeah. Although I I recognize in your in your final, response to the question, you you may have covered a lot of it already. But if you would like to wrap up just before I redirect our investors, to provide feedback for today's event.

1:03:06 Yeah. I think I covered a lot of it, but, look, it's an incredible company. We have all of our internal processes. We've got this together. We know where breakeven is. We're focused on on getting there. You know, we just need to to to work hard to to get that that share price up. We we feel we're incredibly undervalued as a as a business. We we know that that needs to needs needs some focus, and and we are focused on it. But the fundamentals of AUDIOBOOM are strong. The strategy is great. We have a really good business model. We're a leader in what we do. You know, it's gonna be an exciting few years, and and, you know, I I hope you guys can come with us and we do appreciate the the the support and and the interest in the business.

1:03:53 Stuart and Brad, thank you very much for your time today. Can I ask investors not to close this session as you will now be automatically redirected to the opportunity to provide your feedback? If you access the meeting from our website, the feedback page will appear. However, if you access from the link sent by email, you will be asked to log in in order to submit your feedback. On behalf of the management team of AUDIOBOOM PLC, we would like to thank you for attending today's presentation. This concludes today's session. Good afternoon to you all.