Slide 1: Company Presentation: Year Ended 31 December 2015
COMPANY PRESENTATION YEAR ENDED 31 DECEMBER 2015 March/April 2016
Slide 2: Contents
COMPANY PRESENTATION Contents 1 2015 review 4 Outlook 2 Service offering 5 Appendices 3 Financials 2
Slide 3: 1. 2015 Review
1. 2015 REVIEW
Slide 4: Growing demand for our services
2015 REVIEW Growing demand for our services Continued strong demand for Marketing Performance Optimization (MPO) services Active in a large number of media agency pitches (MVM) Encouraging response to first phase of new Advertising Intelligence product roll out (MI) Appointment of Michael Karg as ne
Slide 5: Another strong year of growth driven by MVM and MPO
2015 REVIEW Another strong year of growth driven by MVM and MPO 8% revenue growth Combined revenue growth from MVM and MPO of 16% Improvement in underlying operating profit margin to 16.2% Growth in underlying diluted EPS to 10.8p Increase in proposed dividend on annualised basis 5 All growth figure
Slide 6: 2. Service Offering
2. SERVICE OFFERING
Slide 7: Ebiquity is a global, independent marketing performance specialist
SERVICE OFFERING Ebiquity is a global, independent marketing performance specialist – organized into three core Practices Marketing Performance Media Value Market Optimization Measurement Intelligence MPO MVM MI A set of processes and A set of proprietary tools and A technology platform that methodo
Slide 8: Marketing Performance Optimization (MPO)
SERVICE OFFERING Marketing Performance Optimization (MPO) Our Methodologies/ Client Questions Our Core Services Tools • How should we allocate our • Marketing ROI and effectiveness • Econometric modelling marketing budget to maximize • Test design and implementation • Regression techniques, business
Slide 9: Media Value Measurement (MVM)
SERVICE OFFERING Media Value Measurement (MVM) Our Methodologies/ Client Questions Our Core Services Processes • How well does our media • Media benchmarking • The Rack® agency’s performance compare, • Strategic media consulting • ValueTrack and where can they improve? • Cost saving and guarantee •
Slide 10: Market Intelligence (MI)
SERVICE OFFERING Market Intelligence (MI) Client Questions Our Core Services Our Products • What are our competitors • Advertising monitoring • Portfolio International saying in their spanning creative, messaging • Portfolio Plus advertising…where are they and spend • Portfolio UK/DE/AU saying it… a
Slide 11: We work with most of the world's leading brands
SERVICE OFFERING We work with most of the world’s leading brands 11
Slide 12: Why Ebiquity?
SERVICE OFFERING Why Ebiquity? Independent, transparent advice Deep subject matter expertise in marketing and media analytics Proven track records, working with over 80 of the worlds top 100 advertisers Fast growing multi-country MPO business Number 1 player in Media benchmarking and auditing worldw
Slide 13: 3. Financials
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Slide 14: Change in year end from April to December
FINANCIALS Change in year end from April to December Year ended 31 December 2014 (pro forma) Year ended 30 April 2015 (reported) 8m ended 31 December 2015 (reported) Year ended 31 December 2015 (pro forma) Dec April Dec April Dec 2013 2014 2014 2015 2015 Our statutory reporting presents the 8m to De
Slide 15: Continued growth since last reported results
FINANCIALS Continued growth since last reported results 12m to 12m to 12m to December 2015 April 2015 December 2014 Revenue £76.6m £73.9m £69.1m Op profit £12.4m £11.7m £8.0m Op mgn 16.2% 15.9% 11.5% PBT £11.2m £10.6m £6.8m EPS (u/l dil) 10.8p 10.7p 6.6p 15
Slide 16: Combined revenue growth from MVM and MPO of 16%
FINANCIALS Combined revenue growth from MVM and MPO of 16% MVM £42.0m 55% LFL growth vs Dec 2014 +11% Total growth vs April 2015 +5% MI £24.7m £76.6m 32% LFL growth vs Dec 2014 -5% Total growth vs April 2015 -4% MPO £9.9m 13% LFL growth vs Dec 2014 +43% Total growth vs April 2015 +23% 16 Total LFL g
Slide 17: Group operating margin increased to 16.2%
FINANCIALS Group operating margin increased to 16.2% MVM £12.0m 65% 28.7% margin (April 2015: 28.0%) MI £3.7m £18.5m¹ 20% 14.9% margin (April 2015: 13.4%) MPO £2.8m 15% 28.2% margin (April 2015: 36.0%) Trading op profit¹ £18.5m Central costs (£6.1m) Total op profit £12.4m 16.2% 17 Total LFL growth v
Slide 18: Continued strong demand for MVM services
FINANCIALS Continued strong demand for MVM services Strong year on year revenue growth (11% LFL), particularly in the US Very active in media agency pitches in H2 Margin improvement due to agency pitch work requiring less third party costs Increase in renewal rate (to 95%) and more international ass
Slide 19: Accelerating MVM growth in US and Europe
FINANCIALS Accelerating MVM growth in US and Europe MVM 12m to 12m to 12m to MVM Dec Apr Dec 2015 Apr 2015 Dec 2014 15 15 Revenue 41,998 40,046 36,386 Repeatable rev¹ 97% 98% Operating profit 12,057 11,224 7,950 Renewal rate² 95% 94% Margin 28.7% 28.0% 21.8% Internat’l rev³ 83% 79% 19 ¹ % of total r
Slide 20: Stabilisation of revenues from advertising monitoring within MI
FINANCIALS Stabilisation of revenues from advertising monitoring within the MI Practice, representing 85% of the Practice Early signs of stabilisation of advertising monitoring Portfolio platforms (+0.4% on constant currency basis) Disappointing performance from research/PR project work (-22%) Margi
Slide 21: Decline in MI project revenue masks improvement in subscription business
FINANCIALS Decline in MI project revenue masks improvement in subscription business MI 12m to 12m to 12m to MI Dec Apr Dec 2015 Apr 2015 Dec 2014 15 15 Revenue 24,650 25,768 26,059 Renewable rev¹ 82% 78% Operating profit 3,668 3,447 3,452 Renewal rate² 98% 95% Margin 14.9% 13.4% 13.2% Internat’l rev
Slide 22: Strong revenue growth in MPO
FINANCIALS Strong revenue growth in MPO Exceptional year on year revenue growth (+43% LFL) Now accounts for 13% of the group (PY 10%) Planned margin adjustment to a more sustainable level (28.2%) Strong client retention rate (97% by value) 22
Slide 23: MPO continues to grow at an exceptional rate
FINANCIALS MPO continues to grow at an exceptional rate MPO 12m to 12m to 12m to MPO Dec Apr Dec 2015 Apr 2015 Dec 2014 15 15 Revenue 9,936 8,060 6,661 Retention rate¹ 97% 136% Operating profit 2,802 2,905 2,196 Internat’l rev² 59% 55% Margin 28.2% 36.0% 33.0% 23 ¹ % movement in revenue in current y
Slide 24: Improvement in working capital management
FINANCIALS Improvement in working capital management Improved operating cash Strong cash conversion Cash from operations up 45% Underlying cash conversion versus April 2015, to £11.5m up from 88% in April 2015 to 110% Improved working capital Comfortable gearing Net trade debtor/creditor outflow Net
Slide 25: Net debt reduced by £2.7m over the last 12 months
FINANCIALS Net debt reduced by £2.7m over the last 12 months despite £4.5m of acquisition payments £m 30 31.6 11.5 £2.7m reduction 2.0 0.5 0.3 28.9 25 4.5 2.1 20 15 25
Slide 26: Growth in all key underlying metrics, in line with expectations
FINANCIALS Growth in all key underlying metrics, in line with expectations Revenue Diluted EPS £76.6m 10.8p Profit before tax Operating margin £11.2m 16.2% 26
Slide 27: 4. Outlook
4. OUTLOOK
Slide 28: 2016 outlook
OUTLOOK 2016 outlook Continuing demand for our products and services Proven strategy to deliver growth in MPO and MVM Marginal increase in level of visibility over 2016 revenues compared to the same time last year Continue to position ourselves to capitalise on growth in the MPO market 28
Slide 29: Six focus areas for growth
OUTLOOK Six focus areas for growth Growth of MPO practice Building on strong position of MVM Stabilizing the performance of MI Global client management and growth Building ONE Ebiquity network Selective acquisitions to bolster service offering and geographical reach 29
Slide 30: 5. Appendices
5. APPENDICES
Slide 31: Introduction to new Group CEO Michael Karg
INTRODUCTION TO NEW GROUP CEO Michael Karg has considerable experience across our industry and in growing businesses on a global scale 15 year career with Razorfish and Digitas (digital agencies of Publicis Groupe) Over 20 years of experience in marketing, most of it digital Significant internationa
Slide 32: Segmental reporting
FINANCIAL APPENDICES Segmental reporting 12m to December 2015 MVM MI MPO Total segments Central costs Total Revenue 41,998 24,650 9,936 76,584 - 76,584 Underlying operating profit 12,057 3,668 2,802 18,527 (6,116) 12,411 Margin 28.7% 14.9% 28.2% 24.2% 16.2% 12m to April 2015 MVM MI MPO Total segment
Slide 33: 2% negative foreign exchange impact on revenue
FINANCIAL APPENDICES 2% negative foreign exchange impact on revenue Euro £2.3m negative 30% impact on revenue 2015 fx rate 1.377 2014 fx rate 1.240 US Dollar GBP Revenue £1.2m positive impact 34% by currency 26% on revenue 2015 fx rate 1.528 2014 fx rate 1.648 Aus Dollar £0.6m negative 6% impact on
Slide 34: Client metrics
FINANCIAL APPENDICES Client metrics Revenue from Renewal 84% renewable contracts 96% rate (by value) Revenue from Clients taking 79% international sources 18% 2+ services 34 International sources defined as multi-territory or non-UK domestic
Slide 35: Cross-selling analysis
FINANCIAL APPENDICES Cross-selling analysis 2012/13 2013/14 2014/15 2015 2 services 11% 11% 13% 13% 2+ services 14% 15% 17% 18% 3+ services 3% 4% 4% 5% 35
Slide 36: Highlighted items
FINANCIAL APPENDICES Highlighted items 12 months to 12 months to 31 December 2015 30 April 2015 Recurring (non-cash) – share options and IFA amortisation 2,931 3,385 Non recurring (cash) – acquisitions and restructuring 1,471 2,528 Non recurring (non cash) – impairment¹ 4,366 5,837 - Total 8,768 5,9
Slide 37: Profit before tax
FINANCIAL APPENDICES Profit before tax 12 months to 12 months to 8 months to 31 December 2015 30 April 2015 31 December 2015 Underlying operating profit/(loss) 12,411 11,729 (3) Highlighted items (8,768) (5,913) (6,656) Reporting operating profit/(loss) 3,643 5,816 (6,659) Net finance costs/associat
Slide 38: Underlying effective tax rate for the 12m to December 2015
FINANCIAL APPENDICES Underlying effective tax rate for the 12m to December 2015 12m to Effective Dec 2015 tax rate Underlying operating profit 12,411 Interest/associates (1,181) Underlying PBT 11,230 CY Corp tax (2,759) 24.6% 25.8% CY Def tax (134) 1.2% Prov’n releases 396 (3.5%) Underlying tax char
Slide 39: Increase in second dividend following maiden dividend
FINANCIAL APPENDICES Increase in second dividend following maiden dividend Intention to pay dividend of 0.4p/share for the 8 months ended 31 December (cash cost approx £0.3m) Equivalent to 0.6p/share on an annualised basis This represents a 50% increase compared to the prior year maiden dividend Mod
Slide 40: Outstanding deferred consideration
FINANCIAL APPENDICES Outstanding deferred consideration As at 31 December 2015 2013/14 2015 Stratigent CMCG Media Value Nature of business Multi-channel analytics in the US Media auditing in China Media auditing in Spain/Portugal Operations Chicago Shanghai and Beijing Madrid/Barcelona/Lisbon Transa
Slide 41: Statement of financial position
FINANCIAL APPENDICES Statement of financial position December 2015 April 2015 December 2014 Non current assets Goodwill 54,827 58,096 55,376 Purchased intangibles 10,370 12,243 13,677 Other 8,397 7,569 4,713 73,594 77,908 73,766 Current assets Trade debtors 16,283 17,390 13,473 Accrued income 5,253
Slide 42: Cash flow statement
FINANCIAL APPENDICES Cash flow statement Year ending Year ending 8 month period ending 31 December 2015 30 April 2015 31 December 2015 Cash generated from operations 11,515 7,927 5,028 Net finance expense (1,009) (1,234) (588) Income taxes paid (1,062) (1,618) (892) Net cash from operating activitie
Slide 43: Cash generated from operations
FINANCIAL APPENDICES Cash generated from operations Year ending Year ending 31 December 2015 30 April 2015 Profit before tax 2,462 4,657 Adjustments 9,924 7,053 12,386 11,710 Decrease/(increase) in trade receivables (5,434) (2,270) Increase/(decrease) in trade payables 4,650 (£871k) (1,040) (£3,783k
Slide 44: Net debt analysis
FINANCIAL APPENDICES Net debt analysis £35,000 • AMOUNT £’000s Net debt Dec 2015 of £28.9m (Apr 2015: £26.7m) £30,000 • Net debt:EBITDA of 2.04x £25,000 • Interest at 2.5% above LIBOR £20,000 • £3.2m drawn in the last 12m towards £4.5m of £15,000 acquisition payments £10,000 • £3.2m debt repayments
Slide 45: Cash and net debt analysis
FINANCIAL APPENDICES Cash and net debt analysis Cash Gross debt Net debt Opening at 1 January 2015 3,838 (35,401) (31,563) Trading cash flow 11,515 11,515 Interest and tax (2,071) (2,071) Debt repayments (3,232) 3,232 - Drawdown for acquisitions 3,224 (3,224) - Payments for acquisitions (4,530) (4,5
Slide 46: Summary of banking facility
FINANCIAL APPENDICES Summary of banking facility • £40m multi-currency facility in place, maturing in July 2018 • Approx £39.0m drawn; £35.3m outstanding • Approx £1.0m available • Accordion option to increase by a further £20m • Interest rate of 2.5% plus LIBOR (can be lowered depending on covenant
Slide 47: Cash conversion
FINANCIAL APPENDICES Cash conversion 12m to 31 December 2015 12m to 30 April 2015 Reported cash from operations 11,515 7,927 Underlying cash from operations 13,673 10,345 Underlying operating profit 12,411 11,729 Cash conversion 110.2% 88.2% 47
Slide 48: Shareholder analysis at 29 February 2016
FINANCIAL APPENDICES Shareholder analysis at 29 February 2016 Name Holding % Holding Name Holding % Holding Options Artemis 9,945,522 12.9% Nick Manning 230,000 0.30% 2,670,230 Kabouter 7,827,917 10.1% Andrew Beach 20,000 0.03% 260,000 T Rowe Price 6,776,200 8.8% Morag Blazey - - 728,169 Invesco 6,5
Slide 49: Recent performance
FINANCIAL APPENDICES Recent performance Year end April 10 April 11 April 12 April 13 April 14 April 15 Dec 15¹ Revenue 21,218 44,165 52,919 64,046 68,452 73,874 76,584 growth 15% 108% 20% 21% 7% 8% 4% Op profit 2,643 5,298 8,205 10,441 11,339 11,729 12,411 margin 12.5% 12.0% 15.5% 16.3% 16.6% 15.9%
Slide 50: 12 months to December 2015 H1/H2 split
FINANCIAL APPENDICES 12 months to December 2015 H1/H2 split £m H1 H2 Total Revenue 39.6 37.0 76.6 Operating profit 7.9 4.5 12.4 Operating profit margin 20.0% 12.2% 16.2% PBT 7.3 3.9 11.2 EPS 7.3p 3.5p 10.8p Net debt 27.6 - 28.9 Guide to future H1/H2 splits: Revenue 51.6%/48.4% Operating costs 49.3%/
Slide 51: ® ebiquity.com @ blog.ebiquity.com y @ebiquityglobal m™] enquiries@ebiquity.com
® ebiquity.com @ blog.ebiquity.com y @ebiquityglobal m™] enquiries@ebiquity.com Data-driven in “as