Aegis Group plc - Dentsu Aegis /media/Files/A/Aegis-Group-Plc/pdf/2010prelim...Aegis Group overview Jerry Buhlmann, CEO Divisional review Aegis Media - Jerry Buhlmann, CEO Synovate

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  • Aegis Group plc

    2010 Full Year Results2010 Full Year Results

    17 March 2011

  • Agenda

    IntroductionJohn Napier, Chairman

    Aegis Group overview

    Jerry Buhlmann, CEO

    Divisional review Divisional reviewAegis Media - Jerry Buhlmann, CEOSynovate Robert Philpott, CEO Synovate

    Financial Review Nick Priday, CFO

    Strategic update, summary & outlookJerry Buhlmann, CEO

    Questions & Answers

    Aegis Group plc | Page 2

  • Aegis Group Overview

    Jerry BuhlmannJerry Buhlmann

    CEO

  • Aegis Group 2010 financial highlights

    Revenue of 1,459.4m - up 6.4%

    Organic revenue growth of 5.8%

    Operating profit of 192.2m - up 12.3%

    Operating margin to 13.2% - up 70 bps Operating margin to 13.2% - up 70 bps

    Underlying diluted earnings per share 10.1p up 4.1%

    Total dividend per share of 2.75p up 10%

    Aegis Group plc| Page 4

  • Aegis Group 2010 overview

    Re-focused strategic approach & strengthened management teams at both businesses:

    Aegis Media outperformed the advertising market

    Synovate performance towards the top of its peer group

    Excellent performances in North America and faster-growing regions

    Strengthened financial position enabled re-focus on acquisitions

    Continued strong momentum at both businesses going into 2011

    Aegis Group plc| Page 5

  • Aegis Group Good performances from both businesses

    m 2010 2009 Change, %Constant currency

    change, %

    Revenue 886.8 825.2 7.5 6.8

    Organic revenue change 5.7% (9.7)%

    Operating profit 164.7 150.4 9.5 9.9

    Aegis Group plc| Page 6

    Operating margin 18.6% 18.2% 40bps 60bps

    m 2010 2009 Change, %Constant currency

    change, %

    Gross revenue 572.6 521.3 9.8 5.7

    Organic gross revenue change 5.9% (9.6)%

    Net revenue 350.7 321.8 9.0 5.3

    Operating profit 45.6 36.9 23.6 19.4

    Operating margin 8.0% 7.1% 90bps 90bps

  • Divisional ReviewAegis Media

    Jerry BuhlmannJerry Buhlmann

    CEO

  • m 2010 2009 Change, %

    Constant currency

    change, %

    Revenue 886.8 825.2 7.5 6.8

    Organic revenue change 5.7% (9.7)%

    Operating profit 164.7 150.4 9.5 9.9

    Aegis Media2010 results summary

    Strong global new business performance of $2.0 billion in billings (2009: $2.7 billion) -momentum carried into 2011

    Excellent performances from businesses in North America and faster-growing regions

    Power Brand strategy implemented across the global network - further strengthened through Mitchell acquisition and Charm partnership

    32% of revenue from digital (2009: 31%)

    Operating margin 18.6% 18.2% 40bps 60bps

    Aegis Group plc| Page 8

  • Aegis MediaQuarterly performance

    Change % Q110 Q210 Q310 Q410

    Organic revenue 3.0 3.6 8.5 7.4

    H110 H210 FY10

    3.4 7.8 5.7

    As anticipated, continuing trend of improvement in H2 supported strong organic growth performance in 2010

    Organic growth rate doubled in H2 from H1

    Strong organic growth performance in both Q3 and Q4

    Aegis Group plc| Page 9

    3.4 7.8 5.7

  • 2010

    Aegis Media2010 new business review: $2.0 billion in billings

    2007 - 2009

    Geographic contribution to new business: 2007 2010

    Aegis Group plc| Page 10

    Europe Americas APAC

  • Revenue (m) 2010 2009 Change, %

    Constant currency

    change, %

    EMEA 579.7 585.3 (1.0) 0.4

    Americas 189.4 158.6 19.4 14.5

    Asia Pacific 117.7 81.3 44.8 34.4

    Aegis Media2010 geographic performance review

    Some strong performances across Europe, but Western European markets remain patchy

    Good performances across the Middle East and Africa

    Steady progress made in the Americas

    Significant operational momentum achieved in Asia Pacific

    Mitchell acquisition and Charm partnership strengthens position in Asia Pacific

    Asia Pacific 117.7 81.3 44.8 34.4

    Aegis Group plc| Page 11

  • Aegis MediaSummary

    Strong results, supported by excellent new business performance

    Strengthened management team and new strategic focus

    Excellent performances from North America and faster-growing regions

    Geographic profile strengthened through acquisitions in Asia Pacific Geographic profile strengthened through acquisitions in Asia Pacific

    Outperformed advertising sector growth in 2010

    Increasingly optimistic about the outlook for Aegis Media

    Aegis Group plc| Page 12

  • Divisional ReviewSynovate

    Robert PhilpottRobert Philpott

    CEO, Synovate

  • m 2010 2009 Change, %Constant

    currency change, %

    Gross revenue 572.6 521.3 9.8 5.7

    Organic gross revenue change 5.9% (9.6)%

    Net revenue 350.7 321.8 9.0 5.3

    Operating profit 45.6 36.9 23.6 19.4

    Operating margin 8.0% 7.1% 90bps 90bps

    Synovate2010 results summary

    Excellent performance in 2010 with substantial growth in revenue and profitability

    Sales increased 6.7%, gross organic revenue growth up 5.9%

    Continued management discipline on overheads underpinning the growth

    Strong profit performance - up 19.4%

    Contribution to performance from vast majority of business units across the Synovate global network

    Operating margin 8.0% 7.1% 90bps 90bps

    Aegis Group plc| Page 14

  • SynovateRevenue performance

    H1 10 H2 10 FY10

    Change % Q110 Q210 Q310 Q410

    Organic gross revenue (1.9) 6.5 11.5 6.3

    Excellent organic growth performance in H2, well ahead of industry growth

    Healthy orders on hand position increased 8.8% at end of 2010

    Aegis Group plc| Page 15

    H1 10 H2 10 FY10

    2.8 8.4 5.9

  • SynovateGeographic performance review

    Gross revenue (m) 2010 2009 Change, %Constant

    currency change, %

    EMEA 239.2 234.4 2.0 0.6

    Americas 175.4 151.1 16.1 13.1

    Asia Pacific 158.0 135.8 16.3 6.1

    North America delivered an exceptional performance, driven forward by global clients reinstating major programmes

    Growth in Western Europe remained inconsistent but profitability improved significantly

    Solid performances across faster-growing regions, particularly in Asia Pacific

    FMCG was the strongest performing sector

    Aegis Group plc| Page 16

  • SynovateSummary

    Excellent 2010 results reinforced by a focus on driving profitable sales and improving efficiencies

    Synovate out-performed industry growth in 2010

    Management confidence to re-invest in the business through acquisitions, including COMCON which transforms our position in Russiaincluding COMCON which transforms our position in Russia

    Re-focused strategy being implemented in 2011

    Expected 4% industry growth in 2011 but increasingly optimistic about the outlook for Synovate to again outpace the market

    Aegis Group plc | Page 17

  • Financial Review

    Nick PridayNick Priday

    CFO

  • Income StatementUnderlying

    m 2010 2009 Change, %Constant currency

    change, %

    Revenue 1,459.4 1,346.5 8.4 6.4

    Gross profit 1,237.5 1,147.0 7.9 6.4

    Aegis Group plc| Page 19

    Overheads (1,045.3) (976.7) (7.0) (5.3)

    Operating profit 192.2 170.3 12.9 12.3

    Associates 4.0 (0.3)

    Profit before interest and tax 196.2 170.0 15.4 14.5

    Net interest (33.8) (19.6)

    Profit before tax 162.4 150.4 8.0 7.0

    Operating margin 13.2% 12.6% 60bps 70bps

  • Net interest

    Aegis Group plc | Page 20

    33.8m4.4m 4.7m 1.2m

    2.6m 1.3m19.6m

    2009 Private placement Convertible bond Increase in avg net debt

    Other interest rate effects

    Other items 2010

  • Eps and dividend

    2010 2009

    Underlying diluted earnings per share 10.1p 9.6p

    Total dividend per share 2.75p 2.50p

    Dividend payout ratio 27.2% 26.0%

    Dividend cover (underlying) 3.7x 3.8x

    Aegis Group plc | Page 21

    Dividend cover (underlying) 3.7x 3.8x

  • Operating profit

    Reconciliation to statutory

    m 2010 2009 Change %

    Underlying operating profit 192.2 170.3 12.9

    Adjusting items:

    Restructuring costs - (30.5)

    Amortisation of(26.5) (24.2)

    Aegis Group plc| Page 22

    Amortisation ofpurchased intangible assets

    (26.5) (24.2)

    Disposals of subsidiaries (13.9) (1.0)

    Acquisition costs (4.5) -

    Exceptional debtor impairment (37.0) -

    UK property move costs (8.8) -

    Statutory operating profit 101.5 114.6 (11.4)

  • m 2010 2009 Change %

    Goodwill 1,331.1 1,010.9 31.7

    Intangible assets 112.5 85.5 31.6

    Property, plant and equipment 61.9 59.9 3.3

    Investments in associates & joint ventures 48.5 3.3 1,469.7

    Balance Sheet

    Investments in associates & joint ventures 48.5 3.3 1,469.7

    Other non-current assets 74.1 41.1 80.3

    Net payables (441.0) (309.3) (42.6)

    Net debt (331.3) (257.2) (28.8)

    Earn-out liabilities (63.7) (70.2) 9.3

    Liabilities in respect of put options (34.5) (31.4) 9.9

    Other (89.2) (88.1) 1.2

    Net assets 668.4 444.5 50.4

    Aegis Group plc | Page 23

  • Cash flow statementUnderlying

    m 2010 2009

    Operating profit 192.2 170.3

    Depreciation and amortisation 31.6 32.1

    Net interest paid (26.6) (18.7)

    Aegis Group plc | Page 24

    Net interest paid (26.6) (18.7)

    Tax paid (47.6) (34.2)

    Share-based incentives and other non-cash movements 8.2 8.2

    Net cash generated 157.8 157.7

  • Cash flow statementUses of cash flow

    m 201