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FINAL RESULTS FOR THE YEAR ENDING 31 DECEMBER 2012 MARCH 2013.

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Presentation on theme: "FINAL RESULTS FOR THE YEAR ENDING 31 DECEMBER 2012 MARCH 2013."— Presentation transcript:

1 FINAL RESULTS FOR THE YEAR ENDING 31 DECEMBER 2012 MARCH 2013

2 INTRODUCTION

3 CELLO – AN INTRODUCTION We supply market research, consulting, and marketing support services to a blue chip client list in the pharmaceutical and other high margin client sectors Global infrastructure in Europe, USA and Asia High quality senior management team across Health and Consumer divisions Positioned at the advisory, value added end of the supply spectrum Best in class services and digital products (e.g. Pulsar, eVillage)

4 RESULTS

5 HIGHLIGHTS Gross profit up 5.3% to £65.1m (2011: £61.8m) Headline profit before tax flat at £7.0m (2011: £7.1m) Headline operating margin 12.1% (2011: 12.6%) Gross profit in Cello Health up 7.2% to £31.3m (2011: £29.2m) Like-for-like gross profit in Cello Health up 2.6% Headline operating margins in Cello Health 20.8% (2011: 20.9%) Second half profit recovery in Cello Consumer Full year dividend per share up 16.3% to 2.00p (2011: 1.72p) Net debt £8.7m (2011: £7.7m) Acquisition of Mash in January 2013

6 SEGMENTAL ANALYSIS Headline Gross Profit £m Headline Operating Profit £m Margin % Headline Gross Profit £m Headline Operating Profit £m Margin % Cello Health % % Cello Consumer % % Sub total % % Central cost-(1.8)--(1.7)- Group % % Like-for-like gross profit growth - Health 2.6%; Consumer 0.6%

7 INCOME STATEMENT 2012 £m 2011 £m Gross profit Headline operating profit Interest (0.7) Headline profit before tax Start-up investment (0.8)(0.2) Restructuring costs (1.3)(0.9) Acquisition costs -(0.2) Amortisation (0.9)(1.2) Employee remuneration (0.2)(0.8) Impairment of goodwill (2.5) Facility fees written off -(0.1) Notional interest/fair value adj 0.1- Reported profit before tax

8 INVESTMENT ITEMS Cello Health £m Cello Consumer £m Total £m New offices New products 0.2- New business 0.1- Total

9 RESTRUCTURING ITEMS Cello Health £m Cello Consumer £m Total £m Property-0.6 People-0.7 Total-1.3

10 BALANCE SHEET 31 December 2012 £m 31 December 2011 £m Fixed assetsGoodwill Intangible assets Fixed assets Deferred tax asset Current non cash assets Cash Creditors < 1 year(30.9)(34.5) Net current assets/(liabilities)3.2(1.2) Creditors > 1 year(13.1)(11.6) Net assets Acquisition related liabilities(0.4)(3.8)

11 NET DEBT RECONCILIATION AND CASH FLOW 2012 £m 2011 £m Comment Net cash inflow from operating activities Strong cash conversion Interest(0.9)(0.7)Facility fee paid in January 2012 Tax(1.8)(1.3)Higher US tax payable Capex(1.7)(1.0) Capex, office refurbishment and capitalised development costs Acquisitions/cash/loan note issuance (2.0)(4.7)MedErgy deal in 2011 Share Issuance-2.5MedErgy deal in 2011 Dividends(1.4)(0.7)Timing movements Net debt movement(1.0)1.1 Opening net debt(7.7)(8.8) £29.0m facility until March bps over LIBOR Closing net debt(8.7)(7.7)

12 7 YEAR RECORD – DEGEARING AND DIVIDEND GROWTH

13 OPERATIONAL REVIEW

14 CELLO HEALTH 305 professionals Nine of top ten global pharmaceutical companies are clients Significant international reach (London, New York, Philadelphia) Strong habitual spending patterns from global clients Acquisition of Mash Health in January 2013

15 CELLO HEALTH GROWTH % of Group Revenues from Cello Health % of Group revenue outside the UK

16 CELLO HEALTH CLIENT BASE 49% of gross profit, 68% of operating profit 9 of top 10 pharma 22 of top 25 pharma 31 of top 50 pharma Excellent client continuity

17 CELLO HEALTH CAPABILITIES Full Year 2012 Gross Profits

18 CELLO HEALTH – DEVELOPMENTS IN 2012 Formation of Cello Health Board Establishment of centrally funded new business team Significant investment in new geographies and new offerings

19 ORGANIC GROWTH INITIATIVES FOR 2012/13 IQEnlarge global quantitative research capability  MD in place  Core team in place Cello Consumer HealthEnlarge global capability to service OTC needs of clients  MD in Place  Hiring core team  Mash acquisition Cello Market AccessEnlarge global capability to service market access needs  SVP in place  Hiring MD Cello Business SciencesInvest in web-enabled analytical product suite  MD in place  Core product programmed (award winning) eVillageExtend social media product suite in US  MD in place  Team in place US HealthEnlarge US servicing capability  New office opened in NYC in August

20 CELLO HEALTH PLANNED DEVELOPMENTS IN 2013 Integrated client facing brand structure First full year of centralised new business activity Continued support of investment initiatives Additional US expansion Expansion in Consumer Health with acquisition of Mash

21 CONTINUED CONSOLIDATION IN HEALTHCARE MARKETING SERVICES (backed by Symphony Technology Group) (backed by TPG Capital) (backed by Thomas H Lee Partners)

22 CELLO CONSUMER 51% of gross profit; 32% of operating profit 450 Professionals Blue chip multinational client base in FMCG, mobile telephony, gaming, retail, financial services and charities Largest client = 4% of gross profit Presence in UK, San Francisco, Los Angeles, New York, Hong Kong and Singapore Cutting edge social media tools Cutting edge web marketing capability

23 CELLO CONSUMER CAPABILITIES Full Year 2012 Gross Profits

24 CELLO CONSUMER – DEVELOPMENTS IN 2012 Formation of integrated board structure Consolidation of sub-brands into four primary ‘engines’ – Leith Group, Bright Group, Face and 2CV Ongoing reduction in surplus headcount and excess space Investment in digital social media and software capabilities – Pulsar and Communities tools Overseas push – USA and Asia

25 CELLO CONSUMER PLANNED DEVELOPMENTS IN 2013 Rebranding of Cello Consumer as client facing brand Focus on digital and social media front end Continued investment in existing and new overseas offices Continued focus on margin improvement

26 SUMMARY

27 SUMMARY AND OUTLOOK FOR 2013 Solid growth in fee incomeLong standing client relationships remain strong and growingIncreasing international exposureStrong focus on pharmaceutical sectorStrong digital product offeringConfident outlook for 2013

28 THANK YOU


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