Final Results Presentation Year ended 30 April 2011 July 2011 an Ebiquity company
Review of the year Year ended 30 April 2011 2
Strong financial performance delivering total revenue up 108% with operating profit doubling to £5.3m • International revenues now represents 71% of total Group revenue (2010: 38%) • Underlying operating profit of £5.3m (2010: £2.6m) • Underlying profit before tax of £4.8m (2010: £2.3m) • Underlying EPS of 6.02p (2010: 5.55p) 3
Further acquisitions build international growth • Integration of Xtreme Information completed ahead of schedule and below budget • Ebiquity Germany, following acquisitions, now represents 13% of total worldwide revenue • US business grows at over 40% as media transparency becomes increasingly important • Newly established Ebiquity Italy growing at almost 25% per year • Recently acquired market leading Russia media measurement and benchmarking business 4
Business continues to evolve to capitalise on global demand • Acquisition of Echo Research Group adds “earned” and “social” media to offering • Business drivers continue to be positive despite economic uncertainty • Ebiquity restructured into clearly defined offerings • New data processing centre in Newcastle adding to international capabilities 5
New data processing centre 6
Key Business Drivers 7 7
New business structure to reflect new capabilities Practice Advertising Intelligence Media Effectiveness Digital Reputation & PR Media Technology 8
Greater geographic reach Office Partners 9 9
Echo New skills for a new world 10
Managing and measuring business performance Offline Media Organisational Changes Digital/Social Media New Product Development Sponsorship Reputation Economy Business Performance Seasonality In-house Media Retail Environment Competitor Advertising Regulatory Environment Price Promotions 11
Ebiquity’s unique capabilities Brand reputation and performance measurement “Unpaid Media” “Paid Media” Outbound Customer Business Performance Messaging Empowerment 12
Redefining the media landscape 13
50 staff + 200 analysts Offices in London, Paris, New York and Singapore Member of UN Global Compact Winner of 89 Industry Awards, including Platinum & Golds for Integrated Research all Echo research complies with the MRS Code of Conduct, ESOMAR, CASRO & ISO 9000:2001 14
Monitoring Social Media 15
Identifying source and trends 16
17
Ebiquity / Echo Suite of Services Am I getting the Is my brand most out of my recognition What is the media spend? increasing in the Who are my impact of my marketplace? Can I spend less customers and what media spend on and get the same motivates them? Is my target market the perceptions, What’s being return? aware of our sentiment and What are their media How do I take said about my advertising? behavior of our Can my plan be consumption habits ownership of What is the right brand, both stakeholders ? improved before I and shopping message for our important issues in Is it changing their offline and commit budget? behaviours? target audience? my industry? image of us? online? Thought Advertising Brand / Customer Media/PR Improve Leadership Impact Testing Advertising Segmentation Media ROI and PR analysis Monitoring Research Tracking Research Identify best Are these Understand if your Developing the Allows you to track Improve media customers optimum message conversations reputation is at movement in brand / agency’s Position your brand strategy aligned with the risk ad awareness as a \appearance Target advertising based on market image I want? result of media Understand and needs and wants efforts Monitor what’s refine competitive Create buzz around being said about positioning a new product or the competition service 18
Outlook 1. Our role as an independent provider of insights, based on the clear analysis of available data, will continue to grow in importance 2. We expect continued strong performance from our overseas offices 3. We will continue to build our business internationally in line with our clients’ needs 4. The more complex the market, the greater the supply of data and the more crucial it will be for clients to make sense of it all 5. This simple fact is the basis of our continuing confidence 6. We expect to see continued margin improvement and earnings growth 19
Financial Summary Year ended 30 April 2011 20
Revenue Revenue increase of 108%...Comfortably in line with expectation 2011 2010 £’000 £’000 Var Analytics 17,900 15,197 18% Platform 26,265 6,021 336% Total 44,165 21,218 108% 21
Revenue A more international service International revenue: non UK sourced revenue, or UK sourced revenue where marketing activity is analysed in more than one country 22
Revenue A more balanced offering 23
Gross margins Positive impact of acquisitions and synergies implemented earlier than planned 2011 2010 54% 56% Analytics 57% 51% Platform 56% 55% Total Total gross profit £24,799k (2010: £11,598k) 24
Underlying operating profit Positive impact of acquisitions and early synergy release 2011 2010 £’000 £’000 Var Analytics 7,123 7,603 (6)% Platform 7,739 1,284 503% Central (9,564) (6,244) (53)% Total 5,298 2,643 100% 25
Underlying operating margin Lower than last year as forecast, but ahead of expectation 2011 2010 14.6% 15.0% EBITDA Operating 12.0% 12.5% profit (EBIT) 26
Highlighted items High planned non-recurring integration costs to release significant cost synergies 2011 2010 Cash Non cash Total Total Recurring: Share based expenses 1,038 1,038 308 Amortisation of purchased intangibles 1,549 1,549 412 - 2,587 2,587 720 Non recurring: Integration costs 1,550 1,550 212 Severance costs 1,405 1,405 1,132 Property costs 421 301 722 122 Acquisition costs 282 282 - 3,658 301 3,959 1,466 Total 3,658 2,888 6,546 2,186 27
Profit before tax and EPS Impact of significant planned restructuring costs on reported result…strong EPS growth 2011 2010 £’000 £’000 Var Underlying operating result 5,298 2,643 100% Highlighted items (6,546) (2,186) Reported operating result (1,248) 457 (373)% Net finance costs (528) (352) Share of associates - (5) Reported result before tax (1,776) 100 (1,876)% Underlying result before tax 4,770 2,286 109% Underlying diluted EPS 6.02p 5.55p 8% 28
Financing analysis £2.25m of available facility¹ As at Year ended As at 1 May 2010 30 April 2011 30 April 2011 Drawn Repaid Term loan 7,975 (2,040) 5,935 Revolving credit facility 1,750 1,750 Acquisition fund - Gross debt 7,975 1,750 (2,040) 7,685 Cash 5,243 3,158 Loans to associates² 285 - Net debt 2,447 4,527 Gross debt/EBITDA ³ 1.3 1.2 Net debt/EBITDA ³ 0.4 0.7 ¹ £750k RCF and £1,500k acquisition fund ² Ownership changed from associate to subsidiary during the year ³ 2010 Based on pro forma 2010 results; 2011 based on actual 2011 result 29
Financial summary Significant increases on prior year, and ahead of all market expectations • Significant increase in company size • Strong international growth • A more balanced mix of global services • Cost synergies delivered early • Conservatively financed • Comfortably ahead of all market expectations 30
Financial Appendices 31
Appendix: Summary of results Significant increases on prior year, and ahead of all market expectations Year ended Market Expectation Year ended 30 April 2011 30 April 2010 Revised Original published published 19/1/11 23/7/10 Revenue 44,165 43,100 41,900 21,218 Underlying operating profit 5,298 4,900 4,600 2,643 Underlying operating profit mgn 12.0% 11.3% 10.9% 12.5% Underlying profit before tax 4,770 4,400 4,200 2,286 Underlying diluted EPS 6.0p 5.4p 5.4p 5.6p Net debt 4,527 4,600 3,200 2,447 32
Appendix: Acquisitions during the year Continued global expansion Billetts Media Buro CP Total Germany Advisor Germany Italy Acquisition date 1 May 2010 28 May 2010 1 November 2010 Acquisition detail Increased 51% acquisition Trade and assets stake from purchase 10% to 51% Segment Analytics Analytics Platform Cash up front £20k £170k £70k £260k Investment already held £13k - - £13k Deferred consideration - £309k £374k £683k Fair value of consideration £33k £479k £444k £956k Fair value of assets acquired £38k £194k - £232k Non controlling interest (£18k) (£95k) - (£113k) Goodwill arising on acquisition £13k £380k £444k £837k 33
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