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An Ebiquity company Interim Presentation Six months ended 31 October 2010 January 2011.

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Presentation on theme: "An Ebiquity company Interim Presentation Six months ended 31 October 2010 January 2011."— Presentation transcript:

1 an Ebiquity company Interim Presentation Six months ended 31 October 2010 January 2011

2 an Ebiquity company Progress ahead of plan Largely completed planned integration of Xtreme and TMC ahead of schedule Established a new high quality data centre in Newcastle Consolidated German operations in Baden Baden with Sales and Marketing in Hamburg Cost synergies ahead of management forecast New branding and marketing structure now in place 2

3 an Ebiquity company Revenues and operating profit ahead of forecast 3 Revenues £20,513 Operating Profits £1,436 4% pro forma revenue increase 71% International Revenue

4 an Ebiquity company 4 Globalisation Accountability Effectiveness Efficiency Procurement Transparency Key business drivers

5 an Ebiquity company New business structure to reflect new capabilities Advertising Intelligence Media ROI Digital Editorial Intelligence Technology Practice

6 an Ebiquity company 6 Greater geographic reach Office Partner

7 an Ebiquity company 7 85 of top 100 in 2010 Penetration of the top 100 global advertisers

8 an Ebiquity company One brand One proposition Delivering Our message Following the Xtreme acquisition we have a confusion of brand names and services

9 an Ebiquity company

10 Our Journey We began as a small advertising monitoring business We now stand at the centre of a growing and complex market There are few, if any, other companies with the skills necessary to help brand owners navigate these complexities We have built the skills and the international credentials We face significant growth opportunities in key markets and internationally Our journey has just begun! 10

11 an Ebiquity company Financial Summary Six months ended 31 October 2010 All numbers in this presentation are in £000’s unless noted otherwise

12 an Ebiquity company Revenue increase of 122%... Pro forma* YOY increase of 4% Revenue Six months ended 31 October 2010 Reported % % Pro forma* % Analytics7,538 37% 6,660 72% 7,288 37% Platform12,975 63% 2,600 28% 12,460 63% Total20,5139,26019,749 * Based on management account information, taking all acquisitions as if they had been owned for whole of previous period, using Ebiquity policies

13 an Ebiquity company International revenue doubled to 71% of group revenue (2009: 37%) Revenue International revenue: non UK sourced revenue, or UK sourced revenue where marketing activity is analysed in more than one country US domestic 14% (2009: 12%) Plus 39% multi territory contracts (2009: 25%) Mainland Europe domestic 14% (2009: nil) AsiaPac domestic 4% (2009: nil)

14 an Ebiquity company Strong repeat business and renewal rates Revenue UK Platform renewal rate (by value) 6 months to 31 October 2010 92% UK Platform renewal rate (by value) 6 months to 31 October 2009 74% Recurring revenues 8% Renewable revenues 77% Recurring and renewable revenues 85%

15 an Ebiquity company Positive impact of acquisitions on gross margins with early synergy release Gross margins 54%52% Total Increased largely due to recognised synergies 57%54% Platform Increased largely due to recognised synergies (£215k) 49% Analytics Margins maintained on increased revenue Total gross profit £11,036k (2009 pro forma: £10,338k). Reported gross profit and margin in October 2009: £4,781k and 52% Reported 31 October 2010 Pro forma 31 October 2009

16 an Ebiquity company Synergies implemented earlier than planned Underlying operating profit 6 months ended 31 October 2010 6 months ended 31 October 2009 Reported Pro forma Analytics2,5333,0573,034 Platform3,6675953,066 Unallocated expenses(4,764)(2,892)(4,977) Underlying operating profit1,4367601,123

17 an Ebiquity company Improved margin from realised synergies Underlying operating margin 7%6% Operating profit (EBIT) EBITDA 10%9% Total (pre highlighted) operating profit £1,436k (2009: £1,123k). Reported operating profit and margin in October 2009: £760k and 8% Reported 31 October 2010 Pro forma 31 October 2009

18 an Ebiquity company EPS in line with market expectation Underlying diluted EPS 1.3p Our effective tax rate has been negatively impacted by a geographical shift in profits towards overseas territories where tax rates are higher. Were the geographical mix in line with the previous year, the strong underlying performance against market expectation (operating profit of £1,154k vs £1,000k) would have resulted in a higher EPS ReportedMarket expectation

19 an Ebiquity company High planned non-recurring integration costs to release significant cost synergies Highlighted items Six months ended 31 October 2010 Six months ended 31 October 2009 Organic Current/prior year acquisition related Total Recurring: Share based expenses640-640*151 Amortisation of purchased assets172559731*181 8125581,371332 Non recurring: Integration costs-549 - Severance costs-1,153 158 Property costs-300300*- Acquisition costs-54 - -2,056 158 Total8122,6143,427490 * Non cash £1,671k

20 an Ebiquity company Impact of significant planned restructuring costs Profit before tax 6 months ended 31 October 2010 6 months ended 31 October 2009 Reported Underlying operating profit1,436760 Highlighted items – recurring(1,371)(332) Highlighted items – non recurring(2,056)(158) Reported operating (loss)/profit(1,991)270 Net finance costs(282)(67) Reported (loss)/profit before tax(2,273)202 Underlying profit before tax1,154692

21 an Ebiquity company As at 1 May 2010 6 months to 31 October 2010 As at 31 October 2010 Total original facility Available facility 31 October 2010 DrawnRepaid Term loan8,000-(1,057)*6,9438,000- Revolving Credit Facility-1,500- 2,5001,000 Acquisition fund----1,500 Total8,0001,500(1,057)8,44312,0002,500 * includes £64k forex (non cash movement) with £993k actual cash repayments Key facility terms: Repayable in equal quarterly instalments until April 2014 Term loan denominated in GBP and USD at floating to fixed hedged rates of 2.03% and 1.86% plus 3.25% margin respectively (5.28% and 5.11% effective rates respectively) Undrawn facility liable to fee of 46.15% of the margin (currently 1.5%) Financing analysis £2.5m available facility

22 an Ebiquity company 31 October 201031 October 200930 April 2010 Cash1,7501,5215,243 Loans to associates-310285 Debt(8,443)(3,314)(7,569) Total(6,693)(1,483)(2,041) Operating cash flow and net debt Short term and non recurring impact of integration costs

23 an Ebiquity company Financial summary Company size has doubled Revenue up 122%, Gross profit up 131%, Underlying operating profit up 89% Worldwide headcount up X% Strong international renewable revenues 71% of revenue comes from International 85% of revenue is recurring First half recognised cost synergies ahead of target at £548k Increase in pro forma gross and operating profit margins Comfortably financed Sufficient headroom on debt facility Meeting banking covenants Ahead of market expectations Revenue of £20.5m vs £20.4m Underlying operating profit £1.4m vs £1.2m EPS of 1.3p vs 1.3p 23

24 an Ebiquity company Outlook Growth drivers continue to define our strategy – International/ROI International multiple geography assignments will continue to drive growth Germany and USA offer significant growth potential Continue to build organic growth via cross selling Seek to build our skills and international footprint where appropriate We are confident of another successful year 24 Confident of another successful year

25 an Ebiquity company Financial Appendices Six months ended 31 October 2010

26 an Ebiquity company International revenue doubled to 71% of group revenue Appendix: International revenue 6 months ended 31 October 2010 % of total revenue 6 months ended 31 October 2009 % of total revenue Multi territory7,95439%2,29125% US domestic2,94414%1,08112% Europe excl UK domestic2,85714%-- AsiaPac domestic8954%-- Total international revenue14,65071%3,37237% International revenue: non UK sourced revenue, or UK sourced revenue where marketing activity is analysed in more than one country

27 an Ebiquity company Appendix: Statement of financial position Oct 10Oct 09Apr 10 Non current assets Goodwill30,7008,75430,235 Purchased intangibles9,0802,6389,291 Other3,6861,4033,418 46,46612,79542,944 Current assets Trade debtors6,6482,8238,300 Accrued income3,0291,9892,081 Cash1,7501,5215,243 Loans to associates-310285 Bank security deposits300- Prepayments1,2633821,566 Other704359585 13,6947,38418,360 Current liabilities Trade creditors2,6729172,993 Loans3,4822,3002,077 Deferred income5,5102,4337,958 Accruals2,8261,6163,248 Other3,5551,3433,004 18,0458,60919,280 Non current liabilities Loans4,6061,0135,575 Deferred tax2,4525152,608 Other34045907 7,3981,5739,090 Net assets 31,7179,99732,934

28 an Ebiquity company Appendix: Cash flow statement Oct 10Oct 09Apr 10 Cash (used in) / generated from operations (2,230)8653,243 Finance expense(231)(75)(271) Income taxes (paid) / refunded(316)105(551) Net cash from operating activities (2,777)8952,421 Investing activities Acq’n of subsidiaries, net of cash acquired(829)-(326) Purchase of PPE(351)(70)(164) Capitalised development costs(46)(107)(135) Finance income-814 (1,225)(117)(545) Financing activities Issue of new shares22-750 New borrowings1,500-8,000 Loan repayments(993)(486)(5,884) Bank loan fee/securities--(506) Loan note issue costs--(217) 529(486)2,143 Net increase/(decrease) in cash (3,474)2924,019


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