Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION 6 MONTHS ENDED 30 JUNE 2016 September 2016
Slide 2: Contents
INTERIM RESULTS PRESENTATION Contents 1 First Half review 2 Full Year outlook 3 Financial Appendices 2
Slide 3: 1. 2016 First Half Review
1. 2016 FIRST HALF REVIEW
Slide 4: We go to market with three practices
2016 FIRST HALF REVIEW We go to market with three practices Marketing Performance Media Value Market Optimization Management Intelligence Guiding clients to decide where Helping clients select and manage Providing clients with a picture of to allocate and how to optimize their media trading partners
Slide 5: Continued growth in revenue and profit
2016 FIRST HALF REVIEW Continued growth in revenue and profit Record growth from Marketing Performance Optimization (MPO) services 1 Release of ANA Media Transparency report prepared in partnership with Ebiquity and FirmDecisions Commenced rollout of our new Portfolio platform Continued development
Slide 6: Continued growth in revenue and profit
2016 FIRST HALF REVIEW Continued growth in revenue and profit 6.8% reported revenue growth to £42.3m Underlying operating profit up 8.2% to £8.6m Underlying diluted EPS at 6.9p in line with expectations Net debt/EBITDA down to 1.89 at 30 June 2016 from 2.04 at 31 December 2015 6
Slide 7: Continued growth in revenue and profit
2016 FIRST HALF REVIEW Continued growth in revenue and profit 6m to 6m to 1 June 2016 June 2015 Revenue £42.3m £39.6m Op profit £8.6m £7.9m Op mgn 20.3% 20.0% PBT £8.0m £7.3m EPS (u/l dil) 6.9p 7.3p2 1 As a result of the change in our year end to 31 December, the results for the 6 months to 30 June
Slide 8: 2.5% positive foreign exchange impact on revenue
2016 FIRST HALF REVIEW 2.5% positive foreign exchange impact on revenue with two-thirds of revenue being non-GBP Euro £0.4m positive impact 32% on revenue 2016 fx rate 1.2835 2015 fx rate 1.3643 US Dollar GBP Revenue £0.6m positive impact 34% by currency 24% on revenue 2016 fx rate 1.4329 2015 fx ra
Slide 9: Record growth from MPO, with MVM and MPO accounting for 74% of the Group
2016 FIRST HALF REVIEW Record growth from MPO, with MVM and MPO accounting for 74% of the Group MVM £24.5m 58% Total growth vs June 2015 +7% LFL growth vs June 2015 +5% MI £11.1m £42.3m 26% Total decline vs June 2015 -11% LFL decline vs June 2015 -11% MPO £6.7m 16% Total growth vs June 2015 +53% LFL
Slide 10: Group operating margin increased to 20.3%
2016 FIRST HALF REVIEW Group operating margin increased to 20.3% MVM £8.1m 67% 32.9% margin (June 2015: 34.4%) (Dec 2015: 28.7%) MI £1.5m £12.0m¹ 13% 13.6% margin (June 2015: 14.1%) (Dec 2015: 14.9%) MPO £2.4m 20% 35.8% margin (June 2015: 35.3%) (Dec 2015: 28.2%) Trading op profit¹ £12.0m Central co
Slide 11: Revenues and operating margins are first half weighted
2016 FIRST HALF REVIEW Revenues and operating margins are first half weighted following change of year end to 31 December Revenue H1 v H2 (£’M) OP % H1 v H2 H1 2015 39.6 H1 2015 20.0% H2 2015 37.0 H2 2015 12.1% FY 2015 76.6 FY 2015 16.2% H1 2016 42.3 H1 2016 20.3% 11
Slide 12: Underlying, Diluted EPS impacted by increase in effective tax rate
2016 FIRST HALF REVIEW Underlying, Diluted EPS impacted by increase in effective tax rate Underlying Diluted EPS H1 2016 H1 2015 As reported 6.9p 7.3p Adjustment to 2016 effective tax rate - (0.6)p Consistent effective tax rate 6.9p 6.7p 12
Slide 13: Working capital increased ahead of revenue
2016 FIRST HALF REVIEW Working capital increased ahead of revenue Net debt/EBITDA reduced from 31 December 2015 Net Working capital (£’M) Net debt/EBITDA Jun 15 10.4 Jun 15 2.34 Dec 15 5.4 Dec 15 2.04 Jun 16 12.5 Jun 16 1.89 13
Slide 14: £0.8m reduction in net debt
2016 FIRST HALF REVIEW £0.8m reduction in net debt £m 29 28.9 28 2.1 £0.8m reduction 0.3 0.3 28.1 1.0 27 0.4 0.1 26 25 24 23 14
Slide 15: Growth in key underlying metrics
2016 FIRST HALF REVIEW Growth in key underlying metrics 1 Revenue Diluted EPS £42.3m 6.9p Profit before tax Operating margin £8.0m 20.3% 15 ¹June 2015 diluted EPS was 6.7p at consistent effective tax rate
Slide 16: 2. 2016 Outlook
2. 2016 OUTLOOK
Slide 17: 2016 outlook
OUTLOOK 2016 outlook Continued growing demand for MVM and MPO services Positive response to new Portfolio platform Visibility over faster year on year revenue growth in H2 Full year performance anticipated to be in line with management expectations 17
Slide 18: 3. Financial Appendices
3. FINANCIAL APPENDICES
Slide 19: Segmental reporting
FINANCIAL APPENDICES Segmental reporting 6m to June 2016 MVM MI MPO Total segments Central costs Total Revenue 24,466 11,107 6,685 42,258 - 42,258 Underlying operating profit 8,045 1,516 2,394 11,955 (3,390) 8,565 Margin 32.9% 13.6% 35.8% 28.3% - 20.3% 6m to June 2015 MVM MI MPO Total segments Centr
Slide 20: Continued demand for MVM services
FINANCIAL APPENDICES Continued demand for MVM services LFL Growth of 5%, UK and Continental Europe performing well Slower H1 in US, as clients awaited findings of ANA Media Transparency reports International revenue ¹ increased to 84% of total revenue Revenue first half weighted resulting in higher
Slide 21: MVM Performance
FINANCIAL APPENDICES MVM Performance MVM 6m to 6m to 12m to Jun 2016 Jun 2015 Dec 2015 Revenue 24,466 22,780 41,998 Operating profit 8,045 7,838 12,057 Margin 32.9% 34.4% 28.7% 21
Slide 22: Decline in MI project and platform based revenue ahead of Portfolio platform rollout
FINANCIAL APPENDICES Decline in MI project and platform based revenue ahead of Portfolio platform rollout New Portfolio platform rolled out globally, with digital capability in testing Renewal rate remains high at 91% by value Platform revenues stabilised outside of the US, which experienced a slowe
Slide 23: MI Performance
FINANCIAL APPENDICES MI Performance MI 6m to 6m to 12m to Jun 2016 Jun 2015 Dec 2015 Revenue 11,107 12,418 24,650 Operating profit 1,516 1,745 3,668 Margin 13.6% 14.1% 14.9% 23
Slide 24: Record revenue growth in MPO
FINANCIAL APPENDICES Record revenue growth in MPO Record year on year revenue growth (+51% LFL) Growth from all markets, across both Effectiveness and Multi-Channel Analytics offerings MPO now accounts for 16% of the group (PY 11%) Revenue growth increases operating margin to 36%, contributing 20% o
Slide 25: Record MPO revenue growth
FINANCIAL APPENDICES Record MPO revenue growth MPO 6m to 6m to 12m to Jun 2016 Jun 2015 Dec 2015 Revenue 6,685 4,371 9,936 Operating profit 2,394 1,541 2,802 Margin 35.8% 35.3% 28.2% 25
Slide 26: Revenue and Operating Margin by Segment
FINANCIAL APPENDICES Revenue and Operating Margin by Segment Revenue H1 v H2 OP % H1 v H2 £25M 40.0% £20M 30.0% £15M 20.0% £10M 10.0% £5M £0M 0.0% MVM MI MPO MVM MI MPO H1 2015 H2 2015 H1 2016 H1 2015 H2 2015 H1 2016 26
Slide 27: Highlighted items
FINANCIAL APPENDICES Highlighted items 6 months to 6 months to 30 June 2016 30 June 2015 Recurring (non-cash) – share options 203 698 Recurring (non-cash) – IFA amortisation 907 1,053 1,110 1,751 Non recurring (cash) – deferred consideration 1,576 (256) adjustments Non recurring (cash) – acquisition
Slide 28: Profit before tax
FINANCIAL APPENDICES Profit before tax 6 months to 6 months to 12 months to 30 June 2016 30 June 2015 31 December 2015 Underlying operating profit 8,565 7,916 12,411 Highlighted items (3,354) (2,709) (8,768) Reporting operating profit 5,211 5,207 3,643 Net finance costs/associates (613) (591) (1,181
Slide 29: Underlying effective tax rate for the 6m to June 2016
FINANCIAL APPENDICES Underlying effective tax rate for the 6m to June 2016 6m to Effective June 2016 tax rate Underlying operating profit 8,565 Interest (613) Underlying PBT 7,952 CY Corp tax (2,171) 27.3% 27.4% CY Def tax (4) 0.1% Under prov’n of PY Corp tax (31) 0.4% Underlying tax charge (2,206)
Slide 30: Outstanding deferred consideration
FINANCIAL APPENDICES Outstanding deferred consideration As at 30 June 2016 2013/14 2014/15 2016 Stratigent CMCG Media Value FMC Nature of business Multi-channel analytics in the US Media auditing in China Media auditing in Media auditing in Ireland Spain/Portugal Operations Chicago Shanghai and Beij
Slide 31: Statement of financial position
FINANCIAL APPENDICES Statement of financial position June 2016 December 2015 June 2015 Non current assets Goodwill 57,095 54,827 57,633 Purchased intangibles 10,250 10,370 14,689 Other 8,271 8,397 4,473 75,616 73,594 76,795 Current assets Trade debtors 19,224 16,283 14,743 Accrued income 9,144 5,253
Slide 32: Cash flow statement
FINANCIAL APPENDICES Cash flow statement 6 months ending Year ending 30 June 2016 31 December 2015 Cash generated from operations 2,131 11,515 Net finance expense (330) (1,009) Income taxes paid (117) (1,062) Net cash from operating activities 1,684 9,444 Investing activities Net acquisition of subs
Slide 33: Cash and net debt analysis
FINANCIAL APPENDICES Cash and net debt analysis Cash Gross debt Net debt Opening at 1 January 2016 6,364 (35,250) (28,886) Trading cash flow 2,131 - 2,131 Interest and tax (447) - (447) Debt repayments (1,250) 1,250 - Drawdown for acquisitions - - - Payments for acquisitions, net of cash acq’d 44 -
Slide 34: Summary of banking facility
FINANCIAL APPENDICES Summary of banking facility • £40m multi-currency facility in place, maturing in July 2018 • Approx £39.4m drawn; £34.4m outstanding • Approx £0.6m available • Accordion option to increase by a further £20m • Interest rate of 2.5% plus LIBOR (can be lowered depending on covenant
Slide 35: Cash conversion
FINANCIAL APPENDICES Cash conversion 6m to 30 June 2016 6m to 30 June 2015 12m to 31 December 2015 Reported cash from operations 2,131 4,364 11,515 Underlying cash from operations 3,188 5,693 13,673 Underlying operating profit 8,565 7,916 12,411 Cash conversion 37.2% 71.9% 110.2% 35
Slide 36: Shareholder analysis at 31 August 2016
FINANCIAL APPENDICES Shareholder analysis at 31 August 2016 Name Holding % Holding Name Holding % Holding Options Artemis 11,792,282 15.3% Nick Manning 230,000 0.30% 2,543,490 Kabouter 8,142,430 10.6% Andrew Beach 20,000 0.03% 36,630 JO Hambro 7,300,000 9.5% Morag Blazey - - 601,429 T Rowe Price 7,1
Slide 37: 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 38: ® 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