Ebiquity Plc Annual Report and Accounts for the Year Ended 30 April 2013
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EBIQUITY PLC ANNUAL REPORT AND ACCOUNTS AND ACCOUNTS REPORT ANNUAL EBIQUITY PLC EBIQUITY PLC ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 APRIL 2013 Stock code: EBQ FOR THE YEAR ENDED 30 APRIL 2013 YEAR THE FOR Ebiquity Plc, The Registry, Royal Mint Court, London, EC3N 4QN +44 (0) 20 7650 9600 www.ebiquity.com ebiquityopinion.com @ebiquityglobal Enabling clients across the world to improve their brand and business performance Ebiquity is an independent marketing performance specialist. We help brands optimise the efficiency and effectiveness of their paid, earned and owned marketing communications worldwide. We collect, aggregate and analyse vast amounts of online and offline marketing data to provide brands with a better understanding of what is going on in their market, how they are performing, and what they can do to improve. Our consultancy and software services are built upon this data, our industry expertise, and our independence from the media transaction process. For over 1,100 clients we enhance capabilities, instil greater accountability and assist their pursuit of transparency with their agency partners. 91 of the world’s top 100 advertisers are amongst our clients. We answer client questions such as: • What’s driving our business performance and how can I demonstrate a greater ROI? • What result is our digital activity really achieving? • How can we best evaluate agency performance? • What effect is our paid and earned activity having on our reputation? • What can we learn from our competitors’ communication strategies? Ebiquity employs over 750 people across the world with wide-ranging skills and experience from their agency, client and consultancy backgrounds. We have offices in 10 countries and work with carefully selected partners elsewhere to create a truly global network. Our head office is in London where we are listed on the London Stock Exchange’s AIM Market. This annual report is printed on material, comprising fibres sourced from sustainable forest reserves and bleached without the use of chlorine. The production mill for this paper operates to EMAS, ISO 14001 environmental and ISO 9001 quality standards. www.ebiquity.com Stock Code: EBQ Contents Our performance Highlights 2 Chairman’s Statement 3 Chief Executive’s Review 4 A Year of Insights 8 Financial Review 14 Our Governance 1 Directors and Advisers 20 Directors’ Report 22 Corporate Governance 28 Statement of Directors’ Responsibilities 30 Our Financials 1 Independent Auditor’s Report on Consolidated Financial Statements 31 Consolidated Income Statement 33 Consolidated Statement of Comprehensive Income 34 Consolidated Statement of Financial Position 35 Consolidated Statement of Changes in Equity 36 Consolidated Cash Flow Statement 37 Notes to the Consolidated Financial Statements 38 Independent Auditor’s Report on Company Financial Statements 76 Company Balance Sheet 78 Notes to the Company Financial Statements 79 Notice of Meeting 86 Form of Proxy 91 1 Ebiquity plc Annual Report and Accounts for the year ended 30 April 2013 Highlights Ebiquity plc, a leading international • Record renewals rate of 93%3 (2012: 92%) provider of independent, data- • Cash generated from operations increased from driven media and marketing £2.5m to £7.5m insights, announces final results • All acquisitions positively contributing to earnings for the year ended 30 April 2013. Ebiquity provides services to over A year of operational focus 1,100 clients across 40 countries, • Successful integration of recent acquisitions including over 90%1 of major global including Echo and Fairbrother Lenz Eley providing a more integrated service across all key advertisers. territories • Effectiveness Practice growing strongly (+29% An excellent performance delivers strong results on prior year) demonstrating growing demand for and steady growth services in business performance measurement • Total revenue up 21% to £64.0m (2012: On track to be the leading player in a growing £52.9m) market • Reported profit before tax up 148% to £6.6m • Continued investment and key product launches (2012: £2.6m) to support future growth • Total underlying2 operating profit up 27% to • New initiatives planned in new territories to further £10.4m (2012: £8.2m) strengthen international presence, mirroring growing demand from clients • Underlying2 operating profit margins increased from 15.5% to 16.3% • Strong pipeline of significant new business contract opportunities • Underlying2 diluted EPS increased by 22% to 9.0p (2012: 7.4p) Revenue Operating Profit2 Diluted EPS2 £64.0m £10.4m 9.0pence 2012: £52.9m 2012: £8.2m 2012: 7.4pence +21% +27% +22% 64.0 10.4 9.0 52.9 8.2 7.4 44.2 6.0 5.3 5.6 5.3 21.2 18.4 2.4 2.6 1 Of the top 100 advertisers by global advertising spend (source: Advertising Age 2012) 2 Underlying results are stated before highlighted items (see note 3) 3 By value for the twelve months ended 30 April 2013 2 www.ebiquity.com Stock Code: EBQ Chairman’s Statement Our mission is to help our clients turn data into profit by providing them with a better understanding of how to improve their Our Performance marketing and media performance. Our company has once again delivered Our mission remains to help our clients Highlights a set of extremely strong results. This turn data into profit by providing demonstrates continued progress in them with a better understanding of n Continued international our journey to building a world class how to improve marketing and media expansion business with global reach. performance. n Operations in 17 offices across 10 countries As a leading international provider of Once again, I must record my thanks to independent, data driven media and the management and all our employees n Strong financial performance marketing insights, Ebiquity is uniquely who are core to our ability to deliver n New product initiatives to placed to become a world leader in our services to our clients throughout the provide greater actionable this growing market. The heart of our world. Their commitment, enthusiasm intelligence future strategy is to have our tools and and undoubted professionalism are why services embedded into our clients’ a growing number of companies use key workflows and methodologies. Ebiquity’s services. To achieve this, a number of our new product initiatives have been designed Ebiquity’s ability to exploit existing to help our clients consolidate their opportunities whilst evolving and various, and ever expanding, sources of investing to address the challenges of the data analysis into an easily accessible changing commercial and technological insight platform. environment means we can look forward to the future with great confidence. According to findings of the CMO Council’s “State of Marketing 2012” report, a significant proportion of marketers recognise the importance of future investment in the platforms and processes necessary to accelerate and Michael Higgins improve customer insights. Marketers Chairman admit that they lack the skills and 23 July 2013 resources required to provide them with the real time access to customer intelligence and insights they need. Our new product initiatives are aimed at meeting the marketers’ need to have actionable intelligence delivered at or near real time in a focused and easily digestable form. This will help drive our underlying growth. 3 Ebiquity plc Annual Report and Accounts for the year ended 30 April 2013 Chief Executive’s Review Michael Greenlees Chief Executive Officer 4 www.ebiquity.com Stock Code: EBQ Ebiquity will continue to champion initiatives that help advertisers achieve both better value and greater accountability. Our Performance OVERVIEW INTEGRATING OUR OPERATIONS May 2011 and specialises in market research and media analysis including Our significant headline growth once In August 2012, we completed the social media, has recently been fully again underlines the success of our acquisition of FirmDecisions ASJP Group integrated into the Ebiquity offices acquisition strategy as we continue Limited (the holding company of the in the UK, France and the US. This to build our global market leading FirmDecisions Group, “FD”). This audit enables us to provide our clients with a capabilities in paid, earned and owned business, staffed by experienced finance better understanding of the relationship media analytics. professionals from the media industry, between paid, earned and owned media brings a new and increasingly requested We have delivered our sixth year of and the combined impact they have on capability to Ebiquity. These skills consistent growth in both revenue and their brand and business objectives. have enabled us to provide financial earnings, and once again performed in transparency to the media buying market Following this successfully completed line with market expectations: place and a higher level of advertiser integration, Sandra Macleod left Ebiquity • Total revenue up 21% to £64.0m confidence in contractual compliance. at the end of June. Sandra plans to FD has seen strong growth in the year, continue to independently advise clients • Total underlying operating profit up demonstrating the value of the service. on reputation management, drawing 27% to £10.4m upon Ebiquity’s range of services. I We have also completed the successful • Underlying operating profit margins know she will continue to be a respected integration of Fairbrother Lenz Eley increased from 15.5% to 16.3% thought-leader in reputation research (“FLE”) into Ebiquity’s international and I am delighted that she will continue • Underlying diluted EPS increased by structure. The London operations of to contribute to Ebiquity’s growth in this 22% to 9.0p FLE and Ebiquity have now been fully way. merged under the leadership of Morag • Strong cash generation – net cash Blazey who has assumed the position We have continued to demonstrate a inflow up from £2.5m to £7.5m of CEO UK. Dietmar Kruse, CEO track record of successful acquisitions, • Contract renewals at an all-time high Germany, has taken responsibility for each delivering strong earnings of 93% the combined German business and in accretion.