[PPT] - Interim Results Presentation 6 months ended 31 October 2012 January PowerPoint Presentation

SLIDE 1 an Ebiquity company

Interim Results Presentation 6 months ended 31 October 2012

January 2013

SLIDE 2

Interim review

6 months ended 31 October 2012

SLIDE 3

Strong year on year performance Revenue growth

Total revenue of £30.5m up 27%

Operating profit growth

Total operating profit of £3.2m up 29%

Margin and earnings growth

Operating margin up from 10.5% to 10.6% Underlying diluted EPS up 11% to 2.6p

All profit and margin numbers are underlying (before highlighted items)

3

SLIDE 4

2012/13 first half highlights

1. Integration of Fairbrother Lenz Eley
2. Acquisition of FirmDecisions
3. Continuing growth in international business with increased scope and size
f client contracts – 77% of revenue is international*
4. Very strong renewals – Analytics 98%, Platform 96%
5. Development of online measurement tools to help drive organic growth

from cross selling (attribution measurement, Vital Signs)

6. Improved cross-selling – 14% of clients now take two or more services
7. Strong pipeline of new business opportunities…however, economic climate

causing slower contract closure

* International sources defined as multi-territory or non-UK domestic

4

SLIDE 5

Our vision

To become the largest and most respected global provider of data- driven actionable insights to the marketing and media community

5

SLIDE 6

Leading an evolving sector

Media fragmentation and

complexity

Convergence of paid and

earned media (social media)

Growth in available data

around the effectiveness of marketing programmes

Consolidation and

globalisation of the marketing and advertising industry

Demand for the measurement
f marketing performance ROI
Measurement, benchmarking,

validation and ROI analysis of media buying performance

Consumer insight, validation,

strategic insights, competitive positioning, analysis of price and competitive claims

Paid and earned data

aggregation, tagging and insight

Real-time and predictive

performance measurement and KPI insight and analytics

Independent advice on media

planning Increasing worldwide demand for independent marketing performance measurement

6

SLIDE 7

What we do

Provide independent data-driven insights to the global media and marketing community

to continuously improve clients' business performance

Help clients continuously improve their efficiency and effectiveness
Help the marketing communications community make better decisions
Help brand-owners get the best returns from their media and marketing investments
Provide independent data-led insight and recommendations to continuously improve ROI
Measure, monitor, benchmark and advise

7

SLIDE 8

Transformational acquisitions

1 March 2010 – Acquisition of 82.5% of Excellence Media, a French media consultancy
13 April 2010 – Acquisition of Xtreme Information (global) and Thomson Media Control (Germany)
1 May 2010 – Took control of Billetts Germany, our minority interest in a German media consultancy
28 May 2010 – Acquisition of 51% stake in Media Advisor, an Italian media consultancy
20 May 2011 – Acquisition of Echo Research, a global reputation management business
27 May 2011 – Acquisition of 50.1% of The Joined Up Media Company, a Russian media consultancy
14 October 2011 - Acquisition of Faulkner Media Management, the leading media analytics

consultancy business in Australia

12 March 2012 - Acquisition of FLE, a leading international media consultancy
3 August 2012 – Acquisition of FirmDecisions, a media and production cost auditing business

8

SLIDE 9

International presence

UK&IR France Ebiquity offices USA Italy G’many Russia Australia/

17 Offices in 9 Countries 3 Flagships: UK, US and Germany

9 S’pore Spain

SLIDE 10

Ebiquity today

800 people worldwide
Operate from 17 global offices plus an extensive partner and ‘franchise’

network

Working with over 1,100 clients across multiple sectors including 87 of the

Top 100 advertisers globally

4 data centres: Newcastle (UK), Chicago (US), Baden-Baden (Germany),

Sydney (Australia)

Products and services are delivered by two operating divisions:

Data-driven insights

10

Analytics

Media buying measurement and performance measurement

Platform

Media monitoring

SLIDE 11

Analytics Division

Improving media and marketing performance

How can I better plan my media? How much should I invest in digital? Am I getting the best media buy? Am I getting good value? What’s my real return on media investment? How effective is my promotional activity? How do I optimise my global investment? Deliver measurement, benchmarking, validation and ROI analysis of media buying performance in over 25 markets worldwide Accurately attribute the impact

f

marketing and advertising activity Media buying measurement and management Performance measurement

11

SLIDE 12

Platform Division

Providing business sensitive insights to our clients

Market leader in collecting data on advertising media and providing related information and insight through subscription based platform products used by brand owners Media Monitoring Where are my ads being seen? What product claims are my competition using? What new products have been launched? How can I be sure my advertising appeared? How much are my competitors spending? Who’s saying what about my brand in social media? What’s happening in developing markets? What’s my share of spend? Am I price competitive?

12

SLIDE 13

Uniquely placed to help our clients

Proprietary media data

pool, likely market leading wherever we operate

International footprint
Sophisticated online

delivery platform

On-demand insight and

analysis

Ability to link marketing

data to key business drivers Media data pool Unique media data pool… …directly linked to key business KPIs

13

SLIDE 14

New Initiatives: Vital Signs

The window on key business drivers Historic, real-time, predictive Key business drivers Paid media spend Earned media Performances KPI’s

Vital Signs will aggregate data points provided by every segment of Ebiquity’s business to enable clients to clearly understand how their marketing activities impact their business KPIs and facilitate simple communication of these insights

14

SLIDE 15

Ebiquity’s business model

International business with global client base High recurring revenues Growing scope and contract sizes Online platform business is highly scalable Experienced management team Strong and increasing margins ‘Must have’ for some of the largest global advertisers Large and growing addressable market – estimated at c. $30 billion

15

SLIDE 16 16

Financial Summary

6 months ended 31 October 2012

SLIDE 17 17

Six months ended 31 October 2012

Revenue

2011

£24.0m

2012

£30.5m

Total revenue up 27%
£6.6m positive impact of acquisitions
2% organic revenue increase*
59% of revenue from Analytics (2011: 48%)

* on a constant currency basis

SLIDE 18

Year on year acquisitions analysis

18

Impact of current and prior year acquisitions

£k

Echo: 20 May 2011 Echo: 20 May 2011 Echo: 20 May 2011 Russia (JUMC): 28 May 2011 Russia (JUMC): 28 May 2011 Russia (JUMC): 28 May 2011 Australia (FMM): 14 Oct 2011 Australia (FMM): 14 Oct 2011 Australia (FMM): 14 Oct 2011 FLE: 14 Mar 2012 FLE: 14 Mar 2012 FD: 3 Aug 2012 FD: 3 Aug 2012

SLIDE 19 19

As at 31 October 2012

Revenue analysis

85%

Percentage of revenue from renewable contracts

77%

Percentage of revenue from international sources*

37%

Percentage of clients taking multi-territory services

14%

Percentage of clients taking 2+ services

Revenue

* International sources defined as multi-territory or non-UK domestic

SLIDE 20 20

As at 31 October 2012

Client analysis

£29k

Average revenue from clients taking 1 service

£185k

Average revenue from clients taking 2 services

<4%

Percentage of total revenue from our single largest client

17%

Percentage of total revenue from our 10 largest clients

1,100 clients

SLIDE 21 21

Six months ended 31 October 2012

Renewals analysis

Analytics Platform Total

% renewable revenue

82% 90% 85%

% renewal rate*

98% 96% 97%

* by value

SLIDE 22 22

Short term negative impact of recent acquisitions on Analytics Division

Gross Margins

Analytics Platform

2011

50% 61%

2012

47% 61%

Total gross margin of 53% based on gross profit of £16,049k (2011: £13,404k)

SLIDE 23 23

Six months ended 31 October 2012

Underlying operating profit

Op profit Margin

2011

£2.5m 10.5%

2012

£3.2m 10.6%

Total operating profit up 29%
£1.0m positive impact of acquisitions
£0.3m increase in central costs to service larger group

SLIDE 24

Highlighted items – administration expenses

24

No integration costs in the period and reduced acquisition costs £1,545k £2,014k

£k

SLIDE 25

Profit before tax and EPS

25

Strong growth in underlying profit and EPS 6m ended 31 October 2011 6m ended 31 October 2012

Underlying operating result

2,513 3,243

Highlighted items

(2,014) (1,545)

Reported operating result

499 1,698

Net finance costs/associates

(300) (528)

Reported result before tax

199 1,170

Underlying result before tax

2,213 2,715

Underlying diluted EPS

2.35p 2.60p

+29% +23% +11%

+240%

SLIDE 26

Financing analysis

£18,353k £1,750k £1,133k 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 1 May 2012 Drawings Repayments 31 October 2012 £18,970k

26

Comfortable level of debt funding

Gross debt 18,353 18,970 Cash 6,190 4,335 Net debt 12,163 14,635 Gross debt/EBITDA¹ 1.7 1.7 Net debt/EBITDA¹ 1.1 1.3 ¹EBITDA based on 12m historic pro forma

Gross debt £k

SLIDE 27 27

Strong year on year growth

Financial highlights

Total revenue up 27% to £30.5m

Revenue

Total operating profit up 29% to £3.2m

Operating profit

Operating margin up to 10.6%

Margins

All profit and margin numbers are underlying (before highlighted items)

Diluted EPS up 11% to 2.6p

Earnings

SLIDE 28 28

Change sub heading - via *View* / HEADER & FOOTER

Outlook

Remainder of 2012/13 and beyond

SLIDE 29

Outlook

29

Subscription based business model
High renewal rates
Exciting new product launches
Strong and visible contracted pipeline
Expansive geographic coverage in developed and emerging markets

Ebiquity is well positioned for growth despite the wider economic problems

SLIDE 30 30

Appendices

6 months ended 31 October 2012

SLIDE 31

Appendix: Acquisitions during the period

31

Previous financial year (11/12) Current period Echo Research Group Joined Up Media Company Faulkner Media Management Fairbrother Lenz Eley Firm Decisions

Nature of business Reputation management & social media Media analytics in Russia/CEE Media analytics in Australia/NZ Media analytics worldwide Media cost Auditing Operations Surrey, NY, Paris, S’pore Moscow, Ldn Sydney Ldn, H’burg, Paris Ldn, NY, Sydney Transaction date 20 May 2011 27 May 2011 14 October 2011 12 March 2012 3 August 2012 Transaction detail 100% acquisition 50.1% acquisition 100% acquisition 100% acquisition 100% acquisition Cash up front £3,500k £318k A$4,000k (£2,500k) £5,000k £1,000K Deferred consideration max Deferred consideration paid £6,500k £300k £882k £nil A$1,900k (£1,226k) A$1,000k (£600k) £6,000k £nil £6,000K £nil Estimated remaining deferred consideration*: H2 2012/13 H1 2013/14 H1 2014/15 £400k:

£400k
£280k:
£280k
A$900k (£581k):
A$900k (£581k)
£5,905k:

£5,905k

£4,436k:

£500k £2,097k £1,839k Total potential consideration £10,000k £1,200k A$5,900k (£3,726k) £11,000k £7,000k Total estimated consideration £4,200k £598k A$5,900k (£3,681k) £10,905k £5,436k Earn out end date April 2013 April 2013 April 2013 December 2012 April 2014 Earn out basis 2 years based on revenue targets 2 years based on rev/profit mgns 2 years based on rev/profit mgns 1 year based on profit multiple 2 year based on profit multiple Key financials Mar 11: Rev £5m, u/l op profit £0.5m, 45 staff Apr 11: Rev £0.8m, u/l op profit £0.1m, 7 staff Apr 11: Rev £3.5m, u/l op profit £0.4m, 24 staff Dec 11: Rev £8.6m u/l op profit £1.0m, 70 staff Jun 12: Rev £2.0m u/l op profit £0.3m 14 staff

Appendix: Acquisitions summary as at 31 October 2012

*Estimated total remaining deferred consideration: 12/13 £6,445k, 13/14 £3,358k, 14/15 £1,855k = total £11,659k (incl 2 small additional acquisitions not noted above)

SLIDE 32 32

October 2012 October 2011 April 2012

Non current assets Goodwill 47,589 37,710 43,291 Purchased intangibles 12,759 10,104 11,864 Other 4,549 4,375 4,520 64,897 52,189 59,675 Current assets Trade debtors 13,773 8,107 13,818 Accrued income 4,773 3,510 4,447 Cash 4,335 2,796 6,190 Bank security deposits

200
Prepayments

1,359 1,316 1,696 Other 839 719 795 25,079 16,648 26,946 Current liabilities Trade creditors 3,907 3,973 5,391 Loans 2,243 5,042 2,245 Deferred income 5,720 6,284 7,984 Accruals 3,455 3,007 3,194 Other 15,318 4,577 10,598 30,643 22,883 29,412 Non current liabilities Loans 16,471 6,589 15,814 Deferred tax 3,062 2,627 2,847 Other 2,823 3,002 2,786 22,356 12,218 21,447 Net assets 36,977 33,736 35,762

Appendix: Statement of financial position

SLIDE 33 33

6m to 31 October 2012 6m to 31 October 2011 12m to 30 April 2012 Cash generated from operations

412 15 2,493 Finance expense (295) (293) (527) Income taxes paid (322) (228) (792)

Net cash from operating activities

(205) (506) 1,174

Investing activities

Acq’n of subsidiaries, net of cash acquired (1,941) (5,809) (9,934) Purchase of PPE (382) (503) (892) Capitalised development costs

(180)

Finance income 7 2 6 (2,316) (6,310) (11,000)

Financing activities

Issue of new shares 257 2,283 2,302 New borrowings 1,750 5,480 25,780 Loan repayments (1,125) (1,165) (15,034) Bank loan fee/securities

(100)

(200) Repayment of finance leases (146) (10) (19) Dividends paid to non-controlling interests (65) (10) (10) 671 6,478 12,819

Net (decrease)/increase in cash

(1,850) (338) 2,993

Appendix: Cash flow statement

SLIDE 34

Appendix: Summary of banking facility

£30m multi-currency facility
Approx £21m drawn (£19m outstanding)
Approx £9m available
Interest rate of 2.75% plus LIBOR (can be lowered from March 2013 depending on covenants)
Analysis of repayment plan on outstanding balance set out below:

34

In place from March 2012 on 4 year term

Currency GBP Repayments Bullet GBP £15,548k £15,548k £6,670k £8,878k Dollar $2,266k £1,407k £609k £798k Euro €2,500k £2,015k

£2,015k

£18,970k £7,279k £11,691k Repayment quarters /13 Repayment/quarter £560k

All numbers are approximate due to foreign exchange fluctuations

SLIDE 35

Experienced management team

Michael was one of the original-founding partners of Gold Greenlees Trott which, from its launch in 1980, grew to become one of the great names in British advertising. Under Michael's guidance GGT grew into an international advertising and marketing group providing services in advertising, sales promotion, direct marketing and media buying and

planning. GGT plc was listed on the London Stock Exchange in 1986 at

which time Michael became Chairman and Chief Executive Officer, a role he occupied for over 10 years until the sale to Omnicom in 1998 when he joined the Board of Omnicom and served as President & Chief Executive of TBWA Worldwide. In 2001 he was made Executive Vice-President of Omnicom Inc. Before joining the group in 2007, Nick spent 27 years in the media agency

world. In 1990 he co-founded Manning Gottlieb Media, which became one
f the most highly respected and fastest growing media specialist agencies.

It became part of Omnicom in 1997. Nick's most recent position was CEO

f OMD's UK operation. He also co-founded OPera, the media negotiation

arm for OMD and PHD. Andrew qualified at PwC, and worked within their Assurance business for 9 years until 2007. For the last 6 years he specialised in Entertainment and Media clients and headed up the firm's Publishing knowledge network. He joined Ebiquity as Group Financial Controller in March 2007 and was promoted to Chief Financial Officer in April 2008. Andrew was shortlisted in the Young FD of the Year (Quoted Sector) category at the 2012 FD's Excellence Awards in association with ICAEW. A graduate in Computation from the University of Manchester Institute of Science and Technology Paul joined the Wellcome Foundation in 1989 as a systems analyst and programmer. During 1995 and 1997 he provided systems development services for Mintel International Group Limited in the capacity of Chief Systems Developer building their then ground breaking CD ROM database

ffering. Working with Ebiquity from inception and becoming IT Director in 1999,

Paul developed the Group's technology platforms including all data capture and website systems. Now Managing Director Operations with responsibility for software development, infrastructure, data capture and QA, he oversees much of Ebiquity's operations. 35

Michael Greenlees

CEO

Paul Adams Managing Director, Operations Nick Manning President, International Andrew Beach CFO

SLIDE 36

Shareholders

Name Amount % Holding VSS 15,109,549 25.31 Sarah Jane Thomson (Director) 7,603,787 12.74 Kabouter Management 5,983,072 10.02 Artemis Investment Management 5,444,900 9.12 BlackRock 4,311,729 7.22 Herald Investment Management 3,916,125 6.56 Other directors Paul Adams 1,308,804 2.19 Nick Manning 230,000 0.39 Michael Greenlees 230,000 0.39 Richard Nichols 100,000 0.17 Michael Higgins 64,500 0.11 Andrew Beach 20,000 0.03 Steve Thomson 1,000 0.01 VSS also hold convertible loan notes convertible into a further 13,802,861 shares. VSS may convert any number of loan notes at any time, but their total holding is not permitted to exceed 29.9% of the total issued share capital at anytime. 36