2009 interim results - system1 group

23
1 2009 Interim Results September 2009 London S Brighton S Rotterdam S Lausanne S Hamburg S New York S Chicago S Los Angeles S Toronto S Melbourne A Leading International Online research agency

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Page 1: 2009 Interim Results - System1 Group

1

2009 Interim Results

September 2009

London S Brighton S Rotterdam S Lausanne S Hamburg S New York S Chicago S Los Angeles S Toronto S Melbourne

A Leading International Online research agency

Page 2: 2009 Interim Results - System1 Group

3

BrainJuicer®

BrainJuicer® seeks to generate profitable growth

and attractive returns on investment by improving

the ways in which our clients undertake Market

Research.

We aim to design Market Research tools and

techniques which provide better ways to

understand and predict consumer behaviour, and

which transform our clients' innovation processes.

Page 3: 2009 Interim Results - System1 Group

4

Market Research

S A global market worth $32bn*

S 9% pa growth 2000 – 2008

S Small decline expected over 2009, although online still growing

S Major shift from offline to online spending

S Online research

Process Output

Faster More value add

Cheaper More insightful

More honest More creative

* 2008 data; source: ESOMAR Global Market Research Report 2009

Page 4: 2009 Interim Results - System1 Group

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Online Market Research

S 45% pa growth in online market

research 2000-2008*

S BrainJuicer currently operating in 6

of the largest 10 online markets

S 40% online share in all major

markets by 2014 would seem likely

21%

22%

24%

25%

27%

28%

29%

32%

33%

35%

0% 10% 20% 30% 40%

US

Finland

Sweden

UK

New Zealand

Netherlands

Germany

Australia

Japan

Canada

Top 10 countries with highest online research %*

* 2008 data; source: ESOMAR Global Market Research Report 2009

Page 5: 2009 Interim Results - System1 Group

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BrainJuicer®

S A fast growing, ambitious market research agency

S Punches above its weight in terms of blue chip clients

S Operates solely in online sector

S Acknowledged as innovative, leading edge player

S Attracts talented market research professionals

S Profitable, scalable, cash generative business model

Page 6: 2009 Interim Results - System1 Group

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BrainJuicer® Focus

S BrainJuicer® operates in the strategic research segment, and overwhelmingly for

consumer goods companies

S Near global research capability

S Clients include 10 of the world's largest 20 buyers of market research*

% by Type % by Spend

Consumer B2B Other Public SectorStrategic research Omnibus Continuous Ad hoc

Total MR Market

* Source: BrainJuicer® estimate based on data from WPP on advertising spend

Page 7: 2009 Interim Results - System1 Group

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Consistent Strong Growth

9,322

2,6142,936

4,608

6,566

1.6

2.8

5.0

7.4

-0.6

0

1500

3000

4500

6000

7500

9000

10500

2004 2005 2006 2007 2008

Reven

ue £

000's

-1

1

3

5

7

9

11

13

Fu

lly d

ilute

d e

arn

ing

s p

er s

hare

p

2004 – 2008:

S Revenue growth 37%* pa

S Operating margin up from 7% to 14%

S Operating profit growth 62%* pa

S Diluted EPS growth 46%* pa to 7.4p

* Compound annual growth rate (2004 to 2008)

Page 8: 2009 Interim Results - System1 Group

9

2009 First Half

Key Financials

S 22% revenue growth to £4.9m (H1 2008: £4.0m)

S 18% operating profit growth to £231,000 (H1 2008: £196,000)

S 6% pre-tax profit growth to £243,000 (H1 2008: £229,000)

S 8% fully diluted eps growth to 1.3p (H1 2008: 1.2p)

S 20% increase in interim dividend to 0.6p (2008 interim: 0.5p)

S Period end cash £1.2m (December 2008: £1.7m) and no debt

S Period end non-current assets £1,090,000 (December 2008 : £933,000)

Page 9: 2009 Interim Results - System1 Group

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2009 First Half

S UK shortfall more than offset by growth elsewhere

S US market position continues to build

S New offices in Switzerland, Germany already profitable

Revenue Operating Profit

£'000 Change % v 2008 £'000 Change % v 2008

UK 2,422 -5% 1,031 -10%

Netherlands 1,078 +12% 442 +25%

US 837 +85% 85 Loss in H1 08

Switzerland 313 NA 151 NA

Germany 199 NA 56 NA

Page 10: 2009 Interim Results - System1 Group

11

2009 First Half

Key Operating Features

S Revenue growth picked up after slow start

S Slight decline in operating margin

S Substantial investment in people and systems to support future growth

S H1 2009 FTE average headcount 63 (H1 2008: 51)

S Higher margin, more differentiated 'Juicy' products generated 54% of revenue

(FY 2008: 46% and 2007: 44%)

Page 11: 2009 Interim Results - System1 Group

12

247

248

293

252

196

15

19

17

0

100

200

300

400

500

600

2007 2008 H1 2009

# o

f p

roje

cts

0

5

10

15

20

Reven

ue p

er p

roje

ct £

000

Jul - Dec

Jan - Jun

Revenue per project £000

Projects

Page 12: 2009 Interim Results - System1 Group

13

3,970

4,849

1,5481,568

2,759

3,665

5,352

1,0661,368

1,849

2,901

0

1,500

3,000

4,500

6,000

7,500

9,000

10,500

2004 2005 2006 2007 2008 2009

Reven

ue £

000's

H1 H2

Outlook

S Economic backdrop remains unhelpful

S Commentators expect market decline in 2009

- but client spend opening up

S BrainJuicer® profits normally H2 weighted

Page 14: 2009 Interim Results - System1 Group

15

Juicy Products and Plenty of Twist

Final Mix

Front-End Innovation

Launch Track

I n

n

o

v a

t i v e

M

e

t h

o

d

s

S Juicy: unique, challenging traditional approaches

S Twist: standard approach + unique diagnostics

BrainJuicer®

focus

Page 15: 2009 Interim Results - System1 Group

16

CommScan®

A unique, award winning measure of the emotional, rather than rational response to advertising, more predictive than current measures e.g. Cadbury Gorilla, HSBC

JuicyBrains Community®

A unique, online community attracting creative consumers

to work on innovation briefs for multinational companies

e.g. Kraft, Nestle, Sainsbury’s

Six Juicy Products

Insight Validator®

Brand leading method to assess the commercial potential of a company’s consumer insights used to drive innovation/marketing [Mandated method at Philips]

Creative 6ers®

Unique method for identifying gifted creative consumers (6%

of pop.) Over 6,000 globally, used to generate solutions to

clients’ innovation briefs e.g. Lynx, GAP, General Mills

Concept Creator™

A unique method which facilitates large numbers of

consumers building high potential new product

concepts. e.g. Unilever, GSK

Predictive Markets

Unconventional, award winning method to better identify potent new product concepts. More discriminating than current methods, far cheaper sample and used by 10 of the world’s top 20 consumer companies

Page 16: 2009 Interim Results - System1 Group

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From Me-to-We Research

Challenges a central dogma of MR and utilizes the potential of

respondents as researchers; mass ethnographers, mass semioticians & co-creators

++Juicing™

Application of our award winning emotional measurement tool, FaceTrace® to customer and employee satisfaction

BrainJuicer Labs Commitment to Innovation

FamilyCam®

Wires up homes for long-term online ethnography & product testing, as an inspirational & insightful research resource

Mobile Moments of Truth™

Real-time research, capturing in the moment feedback and feelings, using mobile telephones

• Small team + external and internal consultants

S Dedicated team + external and internal consultants

S Ideas stimulated by non-market research sources (academics, authors)

S Solutions proven through large-scale validations, and acknowledgement from industry organisations and some of the world’s largest clients

Page 17: 2009 Interim Results - System1 Group

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Geographic Coverage

█ Offices in 5 countries

█ Licence partners in Canada, Australia

█ Research conducted in 54 countries

█ Priority target markets

57% global research market

90% global research market

Page 18: 2009 Interim Results - System1 Group

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Outstanding Client Service

“Not only did BrainJuicer deliver top quality analysis and consulting (using your Predictive Markets) – your professionalism and proactive customer orientation

were outstanding.”

Uta Formeseyn – Senior Manager, Business Insights – Coca-Cola

"I was really impressed with the insight and accuracy of

their Predictive Markets, delivered unbelievably fast

against some very urgent timings."

“BrainJuicer’s CommScan® provided an excellent measure of emotional engagement with rich diagnostics

on all the options and produced an insightful, action- focused debrief with clear direction for next steps”

Sion Agami – Senior Scientist – P&G

Sheela Smale – Consumer & Market Insight Director, Foods

Page 19: 2009 Interim Results - System1 Group

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Key Drivers of Sustained Growth

S Focus on 'fragile front end' of innovation process

S Invest in developing and validating 'Juicy' products

S Extend geographic footprint

S Maintain reputation for outstanding client service

S Strengthen the team – attract creative market research talent

Move to preferred supplier status with biggest consumer companies

Page 20: 2009 Interim Results - System1 Group

21 London S Brighton S Rotterdam S Lausanne S Hamburg S New York S Chicago S Los Angeles S Toronto S Melbourne

A Leading International Online research agency

Page 21: 2009 Interim Results - System1 Group

22

Appendix

Page 22: 2009 Interim Results - System1 Group

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BrainJuicer® Board

S Previously Chief Executive of Teather & Greenwood

S Previous directorships include Aberdeen Asset

Management, Morgan Grenfell and Wedd Durlacher

S 36 years City experience

Ken Ford Chairman

Simon Godfrey Non-Executive

Director S Previously a director of RBL (now Research International)

S Founded SGA Market Research

S 30 years of industry experience

S Led Unilever Ventures’ investment in BrainJuicer

in January 2003

S 20 years of experience in banking and venture

capital

Mark Muth Non-Executive

Director

CEO John Kearon

S 22 years experience

S Unilever Research/Mktg

S Publicis Planning Director

S Founder Brand Genetics

S E&Y Emerging Entrepreneur of Year

S 22 years financial management experience

S CFO of IOBox - sold to Telefonica

S Assistant Treasurer of Fosters Brewing Group

CFO James Geddes

Page 23: 2009 Interim Results - System1 Group

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S 12 years’ marketing and research experience

S VP Millward Brown USA

US MD Ari Popper

DE MD Jonathan Gable

S 20 years’ experience in marketing & research

S Colgate, General Mills & Dunkin Brands

S 22 years’ market research experience

S General Manager at SGA Research

International

UK MD Jim Rimmer

NL MD Evert Bos

S 14 years’ marketing & research experience

S Head of Market Research at Bestfood

S Unilever Marketing

S 10 years’ experience in consumer insight and market

research

S Strong track record of innovation

CH MD Mark Johnson

Country Managing Directors