Reach plc (RCH) Earnings Call Transcript

Good morning, everyone, and welcome to the Reach plc Interim Results Presentation for 2023. I'll assume you've already read our disclaimer. Joining me this morning is our CFO, Darren Fisher, who will guide you through the financials after I've taken you through our strategic update. The Customer Value Strategy is continuing to create a strong foundation for sustainable, long-term growth. Our data-led approach and invest in digital capabilities continues to bring us closer every day to a more engaged online audience. We are focused on getting to know our customers better. Using data-led insights to create more relevant content and a more engaging customer experience. And we are delivering. We continue to operate in an uncertain macroeconomic environment, with rising costs for businesses and consumers alike. And since our last update at the start of May, we've seen a continuation of the page view slowdown affecting publishers across the sector. More of which shortly. Now, these external factors are impacting growth in the near term. However, our focus on direct customer relationships and more diverse revenues is supporting higher quality digital earnings. This gives us more control and makes us more adaptable to change. And this is clearly reflected in our mix of digital revenues, with a consistently growing percentage generated by data-driven, higher value, better performing advertising. Since the start of the strategy in 2019, we have registered almost 30% of our U.K. audience and grown digital revenue by around 40%. Just over 40% of that revenue is now data-driven with a declining proportion driven by the open market where we are the price taker. And we fully expect this to grow further as advertisers continue to seek alternatives to third-party cookie-based targeting. Circulation revenue, up over 2% in the period, has now grown over 4 consecutive quarters. And the habitual nature of newspaper consumption and our expertise at evolving production to manage volume decline, means that print remains a resilient and predictable business generating significant cash flows. From a cost perspective, last year's headwind from rising newsprint prices is beginning to subside, and we're firmly on plan to deliver a 5% to 6% reduction in full year operating costs. The bulk of those savings land during H2, supporting a much stronger second half performance and unchanged profit expectations for the year. The single biggest issue impacting our digital performance has been the loss of page view traffic from platforms. Referrals from tech and social platforms are an important source of page view traffic for news publishers. The growing popularity of digital audio and video has brought newer platforms like TikTok into play with incumbents moving to respond. For example, over the period, Facebook has made significant changes to its feed. Firstly, removing the instant articles platform, but also deprioritizing news more broadly and instead seeks to promote its reels content. The impact of this has been widespread, and industry data shows that many in the sector are seeing a decline in page views. Over the first half of the year, we have seen a decline of 16%, which, as you can see from this chart, has overwhelmingly been driven by the changes, excluding which, page views are down only 2%. Facebook-driven page views declined by around 60% in Q2, roughly double the rate of decline we saw for the first 3 months of the year. Our forecasts for the year to go are broadly based on our current run rate, making no assumption for any material recovery in page views. However, the performance of our digital business is increasingly driven by areas which are less volume dependent, as we continue to diversify our revenues and focus on connecting directly with our audience to drive the level of engagement and average revenue per user. And that audience means we are the U.K. and Ireland's largest commercial news publisher. The U.K.'s sixth largest digital asset by audience and customer base. It means we're plugged into roughly 75% of the U.K.'s online population, with a little under 30% of them registered with one of our digital products. We now have over 13 million registered customers, with our 28-day actives and registered page views up between 10% and 15% despite the overall page view decline during the half. With our brands already reaching a large majority of the U.K.'s digital audience, encouraging existing customers to consume more represents our biggest opportunity to grow. Increasing engagement has, therefore, always been central to our strategy, and we're continually exploring new ways to build stronger relationships in addition to growing new ones. As well as using data to grow engagement and differentiate our ad supply, we're continuing to focus on revenues that are less dependent on direct customer volumes. The development of e-commerce, partnerships and affiliates, in particular, are all supporting our growing proportion of data-driven revenues. Being a regular part of our customers' lives means the interactions and insights they generate are more recent, more relevant, and more valuable to advertisers. Our focus remains on acquiring quality, engaged customers that keep coming back to our brands. Interactive content is a part of that, and I spoke in March about the ways in which we're using polls and surveys to gather insights and enrich customer profiles. We're also broadening the touchpoints we have, providing more ways for customers to access our content. Our newsletter portfolio continues to go from strength to strength, with 1.2 million customers now opening 1 of 600 titles every single day. The switch to a more sophisticated e-mail service provider during H2 will give us the capability to step this up further with a more automated and dynamic approach. As well as contacting our registered audience via e-mail, we've also begun building relationships via their phones, the first publisher to use the WhatsApp communities feature to message customers directly. Although we only started in April, growth has been rapid. We already have 40,000 subscribers who are on track to generate 1 million page views this month. WhatsApp is already generating the level of loyalty seen in e-mail newsletters, but with higher open rates, at around 90%, and with a click through rate, that's 4 to 5x higher. It's an exciting opportunity for growth, which in addition to the development of direct web push notifications, gives us more ways to interact. We continue to develop our use of recommender tools to encourage greater dwell time. We're using machine learning tools to make personalized article suggestions based on reader and article data. Recommenders are now driving over 10% of our page views by recirculating users on our sites. We are an unashamedly commercial news organization, and as such, we adopt an ad-funded model at scale, which funds our brilliant journalism whilst delivering on our financial obligations. We need to, therefore, balance our commercial ad distribution at scale with an engaging reader and customer experience. Our product and engineering team have been working on our systems architecture to improve the on-site experience, ensuring great content, but also in a format which makes customers want to stay and to come back. A cleaner feel and faster load speeds will support our search rankings, meaning our brands are easier to find. The Liverpool Echo will be the first of our titles to relaunch on this new platform during the second half, while enhancing the experience for our existing audience, we're also reaching out to create new ones. The expansion of our U.S. business, although also partly reliant on referred traffic, is progressing well. We now have U.S.-based journalists writing U.S. content for U.S. customers, with an editorial team of around 30 now up and running in our New York office. The expressus.com website launched in the past few weeks with the Mirror going live in August. I mentioned earlier the important role that social platforms are now playing in bringing news content to a younger generation. Our new youth-oriented brand, Curiously, is up and running, with posts on celebrity news, wellness trends and hoodie bans, all clocking over 1 million views on TikTok. Video is a key development area and a big growth opportunity for us. Across our total network during the first half, with 175 million monetized views of video content across Facebook, Twitter and YouTube. We now have over 70 production heads working full time on video creation, and in June, we posted 4,343 Facebook videos. As well as using data to grow engagement and differentiate our ad supply, we've continued to focus on areas less dependent on direct customer volumes and, obviously, open market pricing, which we do not control. The development of e-commerce and affiliates are supporting the performance of data-driven revenue, and we're excited by the growing opportunities in data partnerships from direct customer revenues. I've spoken before about growing expertise in ad tech, and the growth potential from leveraging and licensing our data. Over the period, we've made good progress, signing new data partnerships with Google, Amazon and Xandr, which is Microsoft's curated platform. The details of these 3 agreements vary, but in different ways they allow us to plug our data into an open market, enriching our inventory with contextual targeting. We are also exploring opportunities for direct customer revenues, last month launching an M.E.N. premium app with a metered paywall, which allowed customers to read a limited number of articles per week for free, with a charge applied after that unlimited access. The M.E.N. app will be the first in a series of tests into direct reader revenues, which will include the trial of a paywall on The Liverpool Echo and the Express, as well as a series of paid for newsletters. We've continued developing our e-commerce capabilities. Our OK! magazine Beauty Box subscriptions business has grown rapidly, with 80,000 subscribers, very low churn and sales of over 300,000 limited edition Beauty Boxes, which currently includes a limited edition from the high-profile makeup artist, Hannah Martin. Although coming from a relatively low base, our affiliate business is also expanding at pace. The introduction of a clever piece of auto linking tech is allowing more of our journalists to write affiliate content and we're expanding our team. As a scale news publisher with over 150 brands, we have a lot of editorial content which can be monetized and we're making great strides. Over the recent Amazon Prime Day, we increased affiliate articles, page views on those articles and affiliate revenue, all between 300% and 400%. So we are confident of building strongly on this success moving forward. Before moving on to print, it would be remiss of me not to say something about the topic the whole industry, along with the rest of the world, has been busy discussing, AI. We were early to begin exploring the opportunities and risks and continue to explore the ways in which AI can benefit our business. While it's undeniably a complex area, we're clear about what we want from this emerging technology. Our carefully monitored trials have, therefore, had a very practical focus. Our teams ask themselves if the output serves the audience and supports our journalists in their working lives. We're focusing on the ways that tools could improve efficiency, for example, interrogating data and information gathering, potentially freeing up time to produce more content. On Derbyshire Live, we ran an article exploring heir hunters and unclaimed estates. For this, we used AI to extract and compile a list of relevant properties, saving our journalist valuable time that would have been spent wading through dense spreadsheets. Similarly, an article exploring Croydon's cheapest 3-bedroom houses used a plug-in to the Land Registry, which returned the information in seconds. We're continuing to explore the possibilities, but are taking our time here, generating around 100 to 150 articles a week, with the focus on enhancing the kind of storytelling we already do best. Our print business continues to be resilient, underpinning our investment in digital growth. One in 5 U.K. adults read a Reach print title last month, with close to 1 million copies still sold daily. With over 70% of print revenue generated by circulation, revenue and cash flow are supported by a largely predictable consumption trajectory, which remains pretty inelastic. Circulation revenue grew during the period by just over 2%, and while price increases played a large part in this, they're not the whole story. Active revenue management is supported by detailed footfall and frequency modelling, which means we're able to closely match volume supplied and availability by outlet type. Since 2019, we have increased availability from 80% to 90% across key national and regional titles ensuring that we maximize copies sold, while, of course, minimizing returns. As part of maximizing the value from our print assets, we've increased the use of themed specials: souvenir or one-off publications which have included Rising Dragons, a celebration of Wrexham's promotion to league 2, Treble Winners commemorating Man City's recent success and Love TV, a celebration of the best of British telly. The Reach Sport business continues to grow revenue from program production and sales for Premier League clubs, with the Rugby World Cup to come during H2. We're also consolidating our archives with over 200 million original photographs helping to grow revenue through syndication and licensing. And, of course, we have a long history of actively managing volume decline through the process of continuous improvement, as we optimize distribution, lower the cost of ink and reduce the cost of energy with the installation of solar panels across our print sites during H2. We've also worked hard over the past 12 months to diversify our newsprint sourcing and ensure more flexible supply, with prices now coming off the highs we saw in 2022 and set to fall further during the second half. Our expertise in evolving the print business, ensuring editorial integrity at the lowest cost, means it remains a reliable business, with multiple years of strong cash generation to come.

Thank you, Jim. Good morning, and thank you all for joining us for this morning's presentation. I'm going to take you through the financial results for the 6-month period ended 25th of June, before sharing our thoughts on the outlook for the rest of the year ahead. At a headline level, our results clearly reflect the continued economic uncertainty faced by business and consumers alike, and the impact of a decline in referral traffic across the sector. From a revenue perspective, we moved back in the period by GBP 18 million, or 6.1%, driven predominantly by external pressures in digital, with the overall decline partially offset by growth in print circulation. Operating costs of GBP 245 million were just under 3% lower than last year. This has been driven by a much-reduced inflation headwind and our plan to reduce group operating costs by between 5% and 6% being firmly on track. Operating cash flow for the period reduced to GBP 18.9 million, reflecting the lower operating profits. It also reflects higher restructuring charges associated with operating cost reduction and the legal costs from the recently concluded HLI trial. We ended the period with a small net debt balance, which is after pension payments, the payment of last year's final dividend, and the last remaining payment for the Express & Star acquisition. Finally, we have maintained our dividend at 2.88p per share, reflecting the Board's continued confidence in the resilience of our business model and in recognition of the importance of dividends to our shareholders. Now, turning to the main drivers of the 6.1% decline in revenue year-on-year. I will start with total print revenue, which was 2.7% lower, print, which comprises circulation, print advertising and other print revenues, remains resilient and predictable. Performance in the period is slightly ahead of the rate of decline we've seen over the past couple of years. Circulation, which is now around 70% of total print revenues overall, grew by 2.4%, continuing to benefit from the additional cover price increases we put in place during the second half of last year. Circulation volumes for the period were down 20%, continuing the trend we saw during half 2 last year and in line with our expectations. Advertising revenue has performed better than our initial expectations, down at 18.3%, slightly better than the movement in newspaper volumes and ahead of the decline we saw in half 2 last year. Elsewhere within the print business, third-party printing revenues, which are largely contracted on a cost-plus basis, were slightly lower reflecting the fact that newsprint prices are declining from last year's highs. Other print revenue was flat for the period. Digital revenue declined by 16.1% with the decline in page views, which accelerated during the second quarter, adding to general macro softness in the market. Total revenue of GBP 279 million was down by just over 6%. Moving on to the profit bridge. I have already covered the revenue movements, so the first thing to note on this slide is that, we have seen a significant easing in the level of year-on-year inflation, which as a reminder was just under GBP 40 million for 2022. We continue to invest in the strategy, expanding our footprint in the U.S., reaching new audiences with Curiously and expansion of our video and affiliates teams, whilst also continuing to invest in our product. Regarding efficiency, our guidance at the start of the year was for the majority of the savings from our cost reduction plan to land in half 2. That is still the case, though we have made good progress already, reducing the number of third-party contracts, optimizing head count, limiting discretionary spend and continuing to flex our print cost base. We're well on track with our target of a 5% to 6% reduction in total operating costs by the end of the year, which will support profits during half 2. Adjusted operating profit for the period of GBP 36 million was down 24%. As I mentioned earlier, total print revenues remain resilient and predictable, which I now want to demonstrate with a bit more detail on circulation performance. Circulation revenue for the period was up by GBP 4 million, having now grown by just over 2% across the last 4 quarters. This has clearly benefited from cover price increases, which over the past 6 to 9 months have been greater than they've been in recent years. In spite of that, with our production expertise and the habitual nature of newspaper consumption, we continue to sell around 1 million copies per day across the portfolio. As you can see from the chart, the trajectory for volume has changed very little, in fact, slightly improved during Q2. Jim spoke earlier about the impact of page view decline on digital revenue for the period. The chart on the left shows the average monthly page views from 2019, along with the year-on-year percentage movement shown on the right-hand axis. Page views for the period were down by 16% from a little over 10 billion in the first half of 2022 to 8.6 billion in the period just gone, which is equivalent to 1.4 billion per month. Our forecast for the remainder of the year assumes no significant recovery, with page views continuing broadly in line with the current run rate, where we've seen Facebook-driven page views declining by around 60% in Q2. In regards to yield, the chart on the right is the graph of open market yield, which I talked to in March. Using open market yield as a proxy for advertising demand in general, it is clear that we are still seeing the effect of weak macro conditions. You can see here that the price per thousand ads continues to decline, following a small seasonal uptick in the fourth quarter of 2022. Breaking down our digital revenue performance into strategic revenues, or data-driven versus the rest, it's easy to see the extent to which page view decline and open programmatic yields have impacted on overall growth. Data-driven revenues have proven far more resilient, remaining broadly flat for the period, despite still being partly affected by the generally tough trading environment. As we continue to differentiate the value of our ad supply through access to data, and further grow sales from areas such as affiliates, partnerships, and e-commerce, we are bringing more of our digital revenue under our control. This will make us more adaptable to external headwinds and create a sustainable basis for long-term growth. Data-driven revenue is now over 40% of the total, and we expect it to increase further as we focus on the areas within our control. Before moving on, let me briefly mention the fact that we've made some small changes to how we define data-driven. CVS is an evolving strategy, and as new revenues grow and become significant, we will look to ensure all strategically managed revenues are in there. All previously disclosed prior year comparatives have been restated for consistency with all the detail shown in the appendices to our slide presentation. Operating costs were 3% lower during the period at GBP 245 million. This is in sharp contrast to the 5% increase we experienced last year. That's in part due to a reduction in newsprint costs overall, which has largely been volume-driven. Although prices for the period as a whole were still higher on average versus last year, they are now starting to fall, with the market price in Q2 around 10% lower than the previous quarter. As I mentioned earlier, we've also made good progress towards our full year target of a 5% to 6% reduction in operating costs, net of inflation and the investment. The bulk of P&L savings land during the second half, supporting stronger half 2 profits and continuing to benefit us in 2024. A small increase in other costs came predominantly from a year-on-year increase in utilities and office costs, partially offset by a decline in IT-related expenses. Looking a little more closely at newsprint pricing, which was obviously the biggest driver of inflation headwinds for the business last year. The chart shows quarterly year-over-year movements in the price we've paid for newsprint back to 2021. It is very clear when things started to change, with the war in Ukraine, and subsequent increase in global energy costs, resulting in around a 70% increase in newsprint prices, which persisted throughout last year. Since the final quarter of 2022, we've seen a significant deceleration in inflation, though as you can see, we're still paying more in Q1 than we were in the first few months of last year. Prices in the market have now started to fall, and with a much-reduced level of hedging in place for half 2, we expect a considerably higher year-over-year benefit. Looking further forward, we remain cautious. A prolonged period of inflated prices in the market has caused industry demand to fall. Along with a relative decline in the demand for packaging, which peaked during COVID lockdowns, this means that many of the mills are working at sub-optimal levels of production. We will need to wait and see where this shakes out, but if supply reduces, in response to lower demand, it could well mean that further price reductions are limited. We have done a lot over the past 18 months to improve the flexibility of our supply chain and manage inventories closely to ensure we get the best prices in the market and will obviously continue to do this going forward. From a cash perspective, we've seen an outflow of GBP 29 million over the period. Stepping through the chart, cash tax was limited due to utilization on an overpayment in previous years and credits related to R&D schemes. Restructuring charges of GBP 12 million related mainly to the cost reduction measures we've taken during the first half. CapEx is in line with our normal level of spend, while a small working capital outflow is largely timing-related. Also, of note is the GBP 7 million outflow for the Express & Star acquisition, which is the final payment in respect of these assets. There was no movement on our RCF drawings which were GBP 15 million at both the start and end of the period, which closed with a small net debt balance of GBP 4 million. Our approach to capital allocation remains unchanged. While external factors have held back business performance, our fundamental principles remain the same. As we've seen, revenues remain resilient and are the foundation of strong and sustainable cash generation. This is supported by our enviable track record in driving business efficiencies and we're confident of adding to this further over the course of the year and beyond, as we continue to evolve towards an increasingly digital operating model. The success of the Customer Value Strategy gives us confidence to invest, while also continuing to recognize the importance of dividends for shareholders and meeting the funding obligations of our pension schemes. As regards to 2019 triennial review, we have now agreed funding for all but one of the schemes with discussions around the remaining scheme and the 2022 valuation now all progressing. We're also actively engaged with the pensions regulator as part of this process. Before handing back to Jim, a few words on the outlook for the remainder of the year. We remain on track with expectations for the full year which are in line with the current market consensus. In print, we have now annualized the uplift from last year's cover price changes, so we expect a reduced benefit during half 2. Volumes, however, remain resilient and predictable, with lower newsprint prices supporting print profitability. In digital, as I mentioned earlier, we are not forecasting any improvement in the rate of year-over-year decline in page views. However, we do expect to benefit from less demanding second half comparatives and we'll continue building our mix of data-driven revenues. Plans to reduce full year operating costs by 5% to 6% are on track, with the weighting of savings supporting stronger profit expectations for half 2. From a cash perspective, the balance sheet remains strong with full year cash conversion benefiting from an improved year-over-year position on working capital. We expect a small net debt position at the year-end. Thank you very much for listening. I will now hand back to Jim.

Thank you, Darren. Our editorial teams continue to produce content that enlightens, empowers and entertains our readers. Sometimes our titles change the political landscape, notably this year the Sunday Mail in Scotland which first broke the SNP membership scandal story or, of course, the Mirror which only last month broke yet another Partygate exclusive with a bombshell video. Sometimes they change the laws. For example, the Manchester Evening News for their Awaab's Law investigation. Their campaigning efforts led to the Social Housing Regulation Bill which just last month was passed by the House of Lords. And sometimes they just celebrate the fun stuff. In May, the Liverpool Echo made themselves the trusted guide to all things Eurovision. Meanwhile the world-famous Lizzy Lettuce continued her winning streak well into 2023, with the Daily Star team taking home a Bronze from the prestigious Cannes Lions International Festival of Creativity. Our trophy cabinet is already well stocked this year, with well-earned recognition for many of our journalists. It's certainly not all about the awards, but I know the teams are rightly proud of these wins. I'd like to thank them and everyone across the entire business for their hard work, commitment and professionalism as we continue to navigate external challenges and deliver a more sustainable business for the future. Reach is a very different business to the one we were before launching our digital strategy 4 years ago. We are more data savvy, more digitally-driven and more focused on growth. The way in which our digital mix is evolving is proof of this, with a growing proportion less dependent on direct customer volumes and open market pricing. The resilience of print and our long track record of delivering efficiencies supports reliable cash flows and a strong balance sheet, which continues to provide the foundation for investment, our pension obligations and the payment of dividends to shareholders. The second half of this year will see us deliver the lion's share of our cost savings plan, which, together with the declining price of newsprint, supports stronger H2 profits. We also expect a judgement on HLI trial, the primary intention of which was to bring some clarity to time limitation. The foundation of growing customer engagement and the diversification of our revenues is data and our growing capability as a developer and owner of innovative data technology gives us a competitive advantage. The value of this is demonstrated by the relationships we're developing with the likes of Amazon and Google in developing alternative targeting solutions to third-party cookies. So while publishing and the way news is consumed continues to change and external factors may constrain revenue in the near term, we remain undeterred and we'll continue to focus on the delivery of our strategy, which is driving a more predictable, more sustainable and ultimately higher rate of profit growth. Thank you all for listening and for your continued interest in our business, we don't take it for granted. I'd now like to hand you over to our operator, who will be coordinating your questions. Thank you.

[Operator Instructions] Now, we'll go and take our first question. And the first question comes from the line of Gareth Davies from Numis.

A couple of questions from me to kick off. Really useful yield chart that you provided in terms of open market yields. Can you confirm what you've seen through July? Has it been a continuation of the downward trend through June? Or are there any sort of tentative signs of stabilization? And then a second kind of related question. The yield movement in that chart appears to sort of almost contradict the improvement you've seen in print advertising. Is that purely a function of the glut of inventory that's coming into the open market? And on the print side, is there anything specific that has driven that sort of minus 15% in Q2? So just a little more color around that. And then second question really on cost savings. You flagged the 5% to 6% cost saving target. Can you remind us, is there anything in there for newsprint savings? And then the broader question in terms of how you're thinking about your confidence in the guidance for the year? Are you assuming newsprint sits at what we've seen in Q2? Or do you assume there's a further improvement in -- to get you to that kind of confirmation and comfort for the year?

Gareth, it's Jim here. I'll take the first 2, and Darren will take the third cost question. Just on the yield, it's been consistent over July. So it's been a 30% reduction year-on-year, which is basically just demonstrative of the macroeconomic environment. So that hasn't really changed. There's been a slight improvement in the last 7 days, but it's nothing that you would stick a model on, Gareth. So I would say that it's probably just flat over the last 8 weeks. On the print advertising, with regard to print and yield, I wouldn't draw any comps there. Obviously, even though we're seeing circulation go up, print advertising is usually a function of volume. So we're seeing volume decline in newspapers as per our plan and as per our expectations in our model. There's nothing to get alarmed or surprising there. But it doesn't actually cut across to the yield element, which is a completely different market. And the volume decline in newspaper and, therefore, print advertising is anchored on general costs, basically centimeters per newspaper, newsprint, and the yield market is far more influenced by a number of other factors. So I wouldn't draw any comparisons between those 2. And if I haven't answered any of those questions, come back after Darren speaks of the cost.

Gareth, yes. So on the cost savings program, as we've talked about, the program is on track. It is half 2 weighted. We have done a lot in the first half of the year in terms of delivering savings, which will give us that runway into half 2. So we're confident on the program that we have and we still need that 5% to 6%. Newsprint, so we are seeing prices decrease as we go into the second half of the year. We've just been through our Q3 negotiations. We've got dividends that actually newsprint prices are coming down. Obviously, we'll see where we get to as we move into Q4. The thing that we just do need to make sure a bit more aware of is that, while we're seeing pricing coming down now as we sort of move into the medium-term in the market, there is an underutilization of capacity at the mills, and we just need to be thought and cautious about whether we continue to see that pricing evolution going forward as that capacity utilization starts to unwind in the mills.

And Gareth, just one other point just to add on the yield, which I think is important. What we're seeing in the yields are sort of consistent over the last 8 weeks. It's not out of line with other publishers in our sector. We've always seen a sort of [ suppress ] yield over the last 6 months. So there is a decent color there.

And just one follow-up on the print minus 15%. From a category perspective, was there anything stand out that help that? Or is it -- was it just kind of broader market stabilizing a little?

So, it was -- what we're seeing, Gareth is, we continue to see support from the categories that we have traditionally seen support from and really has been softness across the board. There has been nothing really specific to call out. Sorry, one point. Holidays and travel, we actually have seen an improvement. So we had -- we are seeing a return in that category this year.

Yes. But that's before the fire in Rhodes, Gareth. I say that in all seriousness. It's obviously [indiscernible] customers there.

And the next question comes from the line of Nick Dempsey from Barclays.

I've got 3. So we can see the impact of losing traffic from Facebook has had on your page views. Can you just give us an indication of any other social media or other sources that drive an important part of your traffic where a similar decision to change could impact your page views going forward? I'm thinking TikTok, et cetera. The second question, just on print circulation revenue, you're clear that you've pushed price a bit harder than usual in the last 6 months or so. So when we do see digital revenues start to improve against these tough comps, will there be a balancing factor where print circulation volumes continue to fall in the teens, but you won't be able to put up prices anywhere near as much as we're seeing right now? And then third question, just maybe give us a little bit more color on the newsprint costs and the timing here. So if you're currently fixed on prices that don't reflect the improvements that you're talking about, when do we see you roll on to the new lower pricing practically during the second half?

Okay. Nick, I'll take the first 2 from you. Just on the page views, it is overwhelmingly the Facebook impact, particularly in the articles. And we've seen that coming through -- just to give you some color. We've seen that coming through back in October, which we're updating the market as it was starting. And then we've seen it, obviously, in our plans for the full year. But as you go into Q1 and to Q2, we've seen that accelerating significantly. So it went from low-single digits to double digits. So it's overwhelming Facebook articles traffic. However, there are other social platform, [indiscernible] still a large provider, but it was not the same format as Facebook. So we allow our Google Discovery for a lot of our traffic. We have a lot of traffic via Discovery. We are in line with the market there. So that's -- there are no [ piece of troughs ]. With regards to social platforms, we actually do see a growth in the likes of TikTok and Instagram and some of the video-based traffic. The challenge is, though, Nick, for the moment, not in the future, but for the moment is, you don't see the same yield in the video reels, which is why the likes of meta and Facebook have moved across to reels traffic. But it's not easily monetizable, but it will be in the future. Now, [indiscernible], as part of the data-driven strategy was primarily 4 years ago was basically to deal with a [ tricky less ] world. Our data-driven traffic has actually increased its yield in revenue. So we're broadly flat, down about 1% to 2%. However, if you look at the rest of the traffic, which is driven by page views, that's down roughly about, I would say, 24%. With regarding the data-driven and the [ bounce ], we're really preparing for that type when we don't have to be price takers. And again, we thought, well, that would be when we did the strategy when we the cookies disappear. What's actually happened is a collapse in open market page views. Now, I wouldn't say fortunately because our strategy is fairly strong because of our data-driven traffic, we can maintain a certain yield because we know the customers better, that I'm thinking ahead because we're in a macro environment, but that has only 1% to 2%. When we also get to an environment where what matter and, obviously, Darren nodding as well, is that, video becomes the main format for the distribution of news and content and it'll be able to be monetizable. That's why we've invested in 70 heads in video production. We're already looking 12 to 18 months down the road. So when that bounce does come back, we are hoping that we'll be in a position to deal with that. Darren, do you like to take it further?