An Ebiquity company Final Results Presentation Year ended 30 April 2011 July 2011.

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Presentation transcript:

an Ebiquity company Final Results Presentation Year ended 30 April 2011 July 2011

2 Review of the year Year 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) 3 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 4 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 5 Business continues to evolve to capitalise on global demand

6 New data processing centre

7 Key Business Drivers 7

New business structure to reflect new capabilities Advertising Intelligence Media Effectiveness Digital Reputation & PR Media Technology Practice 8

9 Greater geographic reach 9

10 Echo New skills for a new world

11 New Product Development Seasonality Economy Competitor Advertising Reputation In-house Media Price Promotions Retail Environment Regulatory Environment Business Performance Offline Media Organisational Changes Digital/Social Media Sponsorship Managing and measuring business performance

12 Business Performance “Paid Media” “Unpaid Media” Outbound Messaging Customer Empowerment Brand reputation and performance measurement Ebiquity’s unique capabilities

13 Redefining the media landscape

50 staff 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:

15 Monitoring Social Media

16 Identifying source and trends

17

Ebiquity / Echo Suite of Services 18 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 Research Improve Media ROI Media/PR Monitoring Customer Segmentation Brand / 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 5.This simple fact is the basis of our continuing confidence 6.We expect to see continued margin improvement and earnings growth 19

20 Financial Summary Year ended 30 April 2011

21 Revenue £’000 Var Analytics17,90015,19718% Platform26,2656,021336% Total44,16521,218108% Revenue increase of 108%...Comfortably in line with expectation

22 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

23 Revenue A more balanced offering

24 Gross margins 56%55% Total 57%51% Platform 54% 56% Analytics Total gross profit £24,799k (2010: £11,598k) Positive impact of acquisitions and synergies implemented earlier than planned

25 Underlying operating profit £’000 Var Analytics7,1237,603(6)% Platform7,7391,284503% Central(9,564)(6,244)(53)% Total5,2982,643100% Positive impact of acquisitions and early synergy release

26 Underlying operating margin 12.0%12.5% Operating profit (EBIT) EBITDA 14.6%15.0% Lower than last year as forecast, but ahead of expectation

27 Highlighted items CashNon cashTotal Recurring: Share based expenses1, Amortisation of purchased intangibles1, , Non recurring: Integration costs1, Severance costs1,405 1,132 Property costs Acquisition costs , ,9591,466 Total3,6582,8886,5462,186 High planned non-recurring integration costs to release significant cost synergies

28 Profit before tax and EPS £’000 Var Underlying operating result5,2982,643100% 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 tax4,7702,286109% Underlying diluted EPS6.02p5.55p8% Impact of significant planned restructuring costs on reported result…strong EPS growth

29 Financing analysis As at 1 May 2010 Year ended 30 April 2011 As at 30 April 2011 DrawnRepaid Term loan7,975(2,040)5,935 Revolving credit facility1,750 Acquisition fund- Gross debt7,9751,750(2,040)7,685 Cash5,2433,158 Loans to associates²285- Net debt2,4474,527 Gross debt/EBITDA³ Net debt/EBITDA³ 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

30 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

31 Financial Appendices

Appendix: Summary of results 32 Year ended 30 April 2011 Market ExpectationYear ended 30 April 2010 Revised published 19/1/11 Original published 23/7/10 Revenue44,16543,10041,90021,218 Underlying operating profit5,2984,9004,6002,643 Underlying operating profit mgn12.0%11.3%10.9%12.5% Underlying profit before tax4,7704,4004,2002,286 Underlying diluted EPS6.0p5.4p 5.6p Net debt4,5274,6003,2002,447 Significant increases on prior year, and ahead of all market expectations

33 Appendix: Acquisitions during the year Billetts Germany Media Advisor Italy Buro CP Germany Total Acquisition date1 May May November 2010 Acquisition detailIncreased stake from 10% to 51% 51% acquisitionTrade and assets purchase SegmentAnalytics Platform Cash up front£20k£170k£70k£260k Investment already held£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

34 Appendix: Transactions post year end Acquisition of Echo Research Group Acquisition of Joined Up Media Company Disposal of Newslive Nature of businessGlobal reputation analysis, media measurement, stakeholder research Media auditing in Russia and CEE Editorial monitoring in the UK OperationsLondon, New York, Paris, Singapore London, MoscowLondon SegmentAnalytics Platform Transaction date20 May May July 2011 Transaction detail100% acquisition50.1% acquisitionTrade/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 basis2 years based on revenue targets 2 years based on revenue/profit mgns n/a Key financialsMar 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

35 Appendix: Statement of financial position Non current assets Goodwill31,457 30,235 Purchased intangibles8,350 9,291 Other4,247 3,418 44,054 42,944 Current assets Trade debtors10,143 8,300 Accrued income2, Cash3,158 5,243 Loans to associates- 285 Bank security deposits Prepayments1,573 1,566 Other ,842 17,201 Current liabilities Trade creditors3,861 2,993 Loans3,721 1,994 Deferred income8,707 8,567 Accruals4,028 3,248 Other3,766 3,087 24,083 19,889 Non current liabilities Loans3,643 5,575 Deferred tax2,171 2,608 Other ,762 9,090 Net assets 31,051 31,166

36 Appendix: Cash flow statement 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 activities Acq’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 activities Issue of new shares 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

37 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%)