an ebiquity company final results presentation year ended 30 april 2011 july 2011
TRANSCRIPT
an Ebiquity company
Final Results PresentationYear ended 30 April 2011
July 2011
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Review of the yearYear ended 30 April 2011
• 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)
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Strong financial performance delivering total revenue up 108% with operating profit doubling to £5.3m
• 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
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Further acquisitions build international growth
• 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
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Business continues to evolve to capitalise on global demand
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New data processing centre
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Key Business Drivers
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New business structure to reflect new capabilities
Advertising Intelligence
Media
Effectiveness
Digital
Reputation & PR
Media Technology
Practice
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Greater geographic reach
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EchoNew skills for a new world
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New Product Development
Seasonality
Economy
Competitor Advertising
Reputation
In-house Media
Price Promotions
Retail Environment
Regulatory Environment
Business Performance
Offline MediaOrganisational ChangesDigital/Social Media
Sponsorship
Managing and measuring business performance
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Business Performance
“Paid Media” “Unpaid Media”
Outbound Messaging
Customer Empowerment
Brand reputation and performance measurementEbiquity’s unique capabilities
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Redefining the media landscape
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
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Monitoring Social Media
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Identifying source and trends
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Ebiquity / Echo Suite of Services
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Identify best customers
Target advertising
Are these conversations aligned with the image I want?
Monitor what’s being said about the competition
Developing the optimum message strategy
Allows you to track movement in brand / ad awareness as a result of media efforts
Who are my customers and what motivates them?
What are their media consumption habits and shopping behaviours?
Position your brand based on market needs and wants
Create buzz around a new product or service
Advertising Testing
ResearchImprove
Media ROIMedia/PR
MonitoringCustomer
SegmentationBrand /
Advertising Tracking
Thought Leadership and
PR Research
Is my brand recognition increasing in the marketplace?
Is my target market aware of our advertising?
Is it changing their image of us?
Improve media agency’s \appearance
How do I take ownership of important issues in my industry?
Am I getting the most out of my media spend?
Can I spend less and get the same return?
Can my plan be improved before I commit budget?
What’s being said about my brand, both offline and online?
What is the right message for our target audience?
Impact analysis
Understand if your reputation is at risk
Understand and refine competitive positioning
What is the impact of my media spend on the perceptions, sentiment and behavior of our stakeholders ?
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
1. This simple fact is the basis of our continuing confidence
• We expect to see continued margin improvement and earnings growth
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Financial SummaryYear ended 30 April 2011
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Revenue
2011 2010
£’000 £’000 Var
Analytics 17,900 15,197 18%
Platform 26,265 6,021 336%
Total 44,165 21,218 108%
Revenue increase of 108%...Comfortably in line with expectation
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Revenue
International revenue: non UK sourced revenue, or UK sourced revenue where marketing activity is analysed in more than one country
A more international service
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RevenueA more balanced offering
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Gross margins
56% 55%Total
57% 51%Platform
54% 56%Analytics
Total gross profit £24,799k (2010: £11,598k)
2011 2010
Positive impact of acquisitions and synergies implemented earlier than planned
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Underlying operating profit
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%
Positive impact of acquisitions and early synergy release
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Underlying operating margin
12.0% 12.5%Operating profit (EBIT)
EBITDA 14.6% 15.0%
2011 2010
Lower than last year as forecast, but ahead of expectation
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Highlighted items
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
High planned non-recurring integration costs to release significant cost synergies
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Profit before tax and EPS
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%
Impact of significant planned restructuring costs on reported result…strong EPS growth
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Financing analysis
As at 1 May 2010
Year ended 30 April 2011
As at 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/EBITDA³ 1.3 1.2
Net debt/EBITDA³ 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
£2.25m of available facility¹
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Financial summary
• 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
Significant increases on prior year, and ahead of all market expectations
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Financial Appendices
Appendix: Summary of results
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Year ended 30 April 2011
Market Expectation Year ended 30 April 2010Revised
published 19/1/11
Originalpublished 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
Significant increases on prior year, and ahead of all market expectations
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Appendix: Acquisitions during the year
Billetts Germany
Media Advisor
Italy
Buro CP Germany
Total
Acquisition date 1 May 2010 28 May 2010 1 November 2010
Acquisition detail Increased stake from 10% to 51%
51% acquisition Trade and assets purchase
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
Continued global expansion
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Appendix: Transactions post year end
Acquisition of Echo Research Group
Acquisition of Joined Up Media
Company
Disposal of Newslive
Nature of business Global reputation analysis, media measurement, stakeholder research
Media auditing in Russia and CEE
Editorial monitoring in the UK
Operations London, New York, Paris, Singapore
London, Moscow London
Segment Analytics Analytics Platform
Transaction date 20 May 2011 27 May 2011 1 July 2011
Transaction detail 100% acquisition 50.1% acquisition Trade/assets disposal
Cash up front £3,500k £356k £167k
Deferred consideration maximum £6,500k £844k -
Total potential consideration/proceeds £10,000k £1,200k £167k
Earn out basis 2 years based on revenue targets
2 years based on revenue/profit mgns
n/a
Key financials Mar 11: Rev £5m, u/l op profit £0.5m, 45 staff
Mar 11: Rev £0.8m, u/l op profit £0.1m, 7
staff
n/a
Improved client offering
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Appendix: Statement of financial position2011 2010
Non current assets Goodwill 31,457 30,235
Purchased intangibles 8,350 9,291
Other 4,247 3,418
44,054 42,944
Current assets Trade debtors 10,143 8,300
Accrued income 2,130 923
Cash 3,158 5,243
Loans to associates - 285
Bank security deposits 200 300
Prepayments 1,573 1,566
Other 638 584
17,842 17,201
Current liabilities Trade creditors 3,861 2,993
Loans 3,721 1,994
Deferred income 8,707 8,567
Accruals 4,028 3,248
Other 3,766 3,087
24,083 19,889
Non current liabilities Loans 3,643 5,575
Deferred tax 2,171 2,608
Other 948 907
6,762 9,090
Net assets 31,051 31,166
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Appendix: Cash flow statement
2011 2010
Cash generated from operations 1,430 3,243
Finance expense (365) (271)
Income taxes paid (757) (551)
Net cash from operating activities 308 2,421
Investing activitiesAcq’n of subsidiaries, net of cash acquired (898) (326)
Purchase of PPE (1,260) (164)
Capitalised development costs (77) (135)
Repayment of loan from associates - 66
Finance income 2 14
(2,233) (545)
Financing activitiesIssue of new shares 38 750
New borrowings 1,750 8,000
Loan repayments (1,982) (5,884)
Bank loan fee/securities 100 (506)
Loan note issue costs - (217)
Repayment of finance leases (21) -
(115) 2,143
Net (decrease)/increase in cash (2,040) 4,019
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Appendix: International revenue
¹ International revenue: non UK sourced revenue, or UK sourced revenue where marketing activity is analysed in more than one country
US domestic 15% (2010: 11%)
38% multi territory contracts (2010: 27%)
Mainland Europe domestic
14% (2010: nil)
AsiaPac domestic 4% (2010: nil)
International revenue¹ doubled to 71% of group revenue (2010: 38%)