Ebiquity Plc · LSE:EBQ
Ebiquity — H1 2020 Earnings Presentation
29 slides from Ebiquity's earnings presentation, Sep 24, 2020
Slide 1: Interim Results Presentation, 6 Months Ended 30 June 2020
ebiquity Interim Results Presentation 6 Months Ended 30 June 2020 24 September 2020
Slide 2: Highlights
Highlights 2 Interim Results - 6 Months ended 30 June 2020
Slide 3: 2020 - challenges and seeds of recovery
HIGHLIGHTS 2020 - challenges and seeds of recovery 3 » Maintained normal business operations & service levels during Covid-19 crisis with staff working remotely Financial position remains strong — net debt of £5.1m, down 8% from Dec 2019 However, the economic and media downturn negatively impacted c
Slide 4: Financial Overview
Financial Overview 4 Interim Results - 6 Months ended 30 June 2020
Slide 5: Headline Results
FINANCIAL OVERVIEW Headline Results 5 Headlines 2020 2019 Change £m £m £m Revenue 26.8 35.3) (8.6) Underlying Operating (Loss)/Profit (1.4) 3.4 (4.7) Underlying (Loss)/Profit before Tax (1.9) 29 (4.8) Underlying (Loss)/Earnings Per Share (p) (2.7) p 2.6p (5.4)p Statutory Loss before Tax (1.7) (4.2)
Slide 6: Group Income Statement Summary
FINANCIAL OVERVIEW Group Income Statement Summary Income Statement 2020 2019 % Revenue Operating Expenses Operating (Loss)/Profit Operating Margin Finance Costs (Loss)/Profit before Tax Underlying (Loss)/EPS (p) (2.7p) (8.6) (24)% (3.8) (12%) (4.7) 0.1 16% (4.8) (5.4)p Underlying figures shown for o
Slide 7: Balance Sheet Summary
FINANCIAL OVERVIEW Balance Sheet Summary 7 Goodwill incudes £0.5m for Digital Decisions Other non-current assets includes ‘'Right-of-use asset’ of £7.3m (2019: £8.3m) recognised under IFRS 16 Current assets includes £11m of net trade receivables (2019: £16m) Debtor days increased to 71 days from 62
Slide 8: Cash Flow Statement
FINANCIAL OVERVIEW Cash Flow Statement » Cash inflow from operations of £4.3m including highlighted items » Underlying cash inflow from operations of £5.4m » Working capital inflow of £5.1m » Investing activities include: o £0.6m on Digital Decisions o £0.2m on Italy minority buy-out o £0.6m on inte
Slide 9: Our financial position remains strong
FINANCIAL OVERVIEW Our financial position remains strong August June December Liquidity 2020 2020 2019 Gross Debt (19.8) (19.8) (14.0) Cash Balances 12.6 14.5 Net Debt (7.0) (5.1) Undrawn Facilities 5.0 5.0 2.5, Adjusted deferred consideration leverage < 3.0 Gross Debt comprises bank debt of £19.0m
Slide 10: Revenue by segment
FINANCIAL OVERVIEW Revenue by segment » Media: o Media Performance & Management fell by 19% o Contract Compliance fell Revenue 2020 2019 by 42% First period of Digital Decisi STO NOS Media 219 277 (5.8) — (21)% » Analytics & Tech: 5 Analytics and o Advanced Analytics down sabre 49 76 (2.8) (36%) by
Slide 11: Operating Profit by segment
FINANCIAL OVERVIEW Operating Profit by segment Change Operating Profit 2020 | 2019 | Operating Profit Margin % em | £m | em | em | 2020 | 2019 Media 2.4 6.7 (4.3) (65)% 1% 24% Analytics and Tech (0.7) 0.7 (1.4) (208)% (15)% 9% Unallocated costs (3.0) (4.0) 1.0 24% Total (1.4) 3.4 (4.7) (141%) (5)% 1
Slide 12: 2020 Investments
FINANCIAL OVERVIEW 2020 Investments Digital Decisions » Digital media monitoring & optimisation service » 100% acquired on 8 January 2020 » Initial payment of £0.6m in cash » Ruben Schreurs , Founder & CEO, has joined Ebiquity management team » Contingent consideration in two stages: o Based on 2020
Slide 13: Strategic Direction
Strategic Direction 13 Interim Results - 6 Months ended 30 June 2020
Slide 14: Realising Ebiquity's potential
STRATEGIC DIRECTION Realising Ebiquity's potential CEO's Initial Strategic & Organisation Review Purpose » Product » Operating Model Viewed through three lenses Simplify » Clarify » Focus Three elements Continuity » Evolutiony Change O60 ® 4 Strategy — 11% September 2020 ebiquity
Slide 15: Revenue growth and margin expansion are both strategic objectives
STRATEGIC DIRECTION Revenue growth and margin expansion are both strategic objectives Revenue growth » Improve existing products to price higher » Sell more products and services to existing clients » Win more clients (and retain existing clients) Margin expansion » Value-added products and services
Slide 16: Media market is large and complex...with a clear need for our services
STRATEGIC DIRECTION Media market is large and complex...with a clear need for our services » Large global media market — *US$500bn+ » Broadcast market — long term secular decline o Linear TV audience decline - OTT, streamers o But still very effective at moving brand metrics o Value to be found » Di
Slide 17: Covid-19 is accelerating market trends
STRATEGIC DIRECTION Covid-19 is accelerating market trends » Consumers o Shopping, working, information, entertainment o Online share of retail:- US: 25%+, UK, China:30%+ (Credit Suisse: Ad Agencies, Beyond the Pandemic) » Enterprise o Digital transformation o Re-position for the digital economy » M
Slide 18: Ebiquity's positioning and purpose match the market's needs
STRATEGIC DIRECTION Ebiquity's positioning and purpose match the market's needs Market Context} Digitization is transforming the media ecosystem Brands struggle with the complexity of the new environment Media leaders seek relevant, objective advice Our Position) World leaders in media investment an
Slide 19: Building on our market leadership position as leading global media advisers
STRATEGIC DIRECTION Building on our market leadership position as leading global media advisers » Media market complexity underpins brands’ need for independent advice » Client demand is growing: especially to navigate digital media world » We have the strongest global network: o Accenture's exit st
Slide 20: Opportunity to provide end to end solution to brands
STRATEGIC DIRECTION Opportunity to provide end to end solution to brands . Media . Key Media Media Media Performance Media Performance y M t Management Management Contract Advanced Analytics Ebiquity anagemen AdTech 9 . MarTech Services Compliance ——— Design Future ee 2 Define & Align Evaluate Optim
Slide 21: Our product strategy focusses on addressing clients' need for advice on digital media
STRATEGIC DIRECTION Our product strategy focusses on addressing clients’ need for advice on digital media » Evolve Ebiquity to a data driven solutions company o With consultancy services on top v Develop scalable, repeatable productised solutions o Programmatic, search, social, e-commerce » Build on
Slide 22: Simplified organisation structure
STRATEGIC DIRECTION : SIMPLIFIED ORGANISATION STRUCTURE Executive Leadership Team 5) as » Regions » Clients » Support Functions » Product Global Client Solutions Centre Two internal promotions: Two new roles: Simpler structure will help to CEO FirmDecisions Chief Product Officer reduce Group managem
Slide 23: Digital Decisions — new clients YTD 2020
STRATEGIC DIRECTION Digital Decisions — new clients YTD 2020 New External Clients Sales to Ebiquity's existing clients VOLKSWAGEN Ws Huawei x RedBull W nad ie IAT CHRYSLER AUTOMOBILES A felefomien comoany edee a FAN - , = %) DA PRA < ROVER VOREAL KLINI XN ONE ANONE GD SI78 SN Nestlé 23 Interim Resul
Slide 24: Transitioned from Accenture YTD 2020
STRATEGIC DIRECTION Transitioned from Accenture YTD 2020 1to 40 market scopes a DAIMLER y Voc Unilever © REPSOL © S FERRERO Pierre Fabre VCC orange 19M MUTUAMADALLENA Ban<ia dsSantander WkGreens More than 20 Accenture clients transitioned in Spain so far in 2020 ° ° 24 Interim Results - 6 Months end
Slide 25: Summary
Summary 25 Interim Results - 6 Months ended 30 June 2020
Slide 26: Summary
SUMMARY » On current trends, H2 2020 revenue will be higher than H1 » Full year trading expected to be at or close to break-even, assuming no further disruptions » New business momentum as Accenture exits » Simplified structure » Focus on digital product solutions development » And operational effic
Slide 27: Appendix
Appendix 27 Interim Results - 6 Months ended 30 June 2020
Slide 28: Highlighted Items
APPENDIX Highlighted Items £1.7m credit in share based payments due to lapse of 4.2m Executive Incentive Plan options in April 2020 £0.4m severance and reorganisation £0.1m refinancing professional costs £0.2m deferred consideration FX adjustment £0.1m post-date remuneration relating to Digital Deci
Slide 29: We work with global brands across a variety of key sectors
APPENDIX We work with global brands across a variety of key sectors AUTO FMCG FINANCE DirectLine @ ao ier HSBC <> AND - Nestlé \ = ROVER LOREAL cE dk UBS 29 Interim Results - 6 Months ended 30 June 2020 RETAIL & QSR TMT Ei facebook. BE Microsoft e vodafone SONY ebiquity