Transcript Document

FINAL RESULTS FOR THE YEAR ENDING
31 DECEMBER 2012
MARCH 2013
INTRODUCTION
CELLO – AN INTRODUCTION
• We supply market research, consulting, and marketing
support services to a blue chip client list in the
pharmaceutical and other high margin client sectors
• Global infrastructure in Europe, USA and Asia
• High quality senior management team across Health and
Consumer divisions
• Positioned at the advisory, value added end of the supply
spectrum
• Best in class services and digital products (e.g. Pulsar, eVillage)
RESULTS
HIGHLIGHTS
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Gross profit up 5.3% to £65.1m (2011: £61.8m)
Headline profit before tax flat at £7.0m (2011: £7.1m)
Headline operating margin 12.1% (2011: 12.6%)
Gross profit in Cello Health up 7.2% to £31.3m (2011: £29.2m)
Like-for-like gross profit in Cello Health up 2.6%
Headline operating margins in Cello Health 20.8% (2011:
20.9%)
Second half profit recovery in Cello Consumer
Full year dividend per share up 16.3% to 2.00p (2011: 1.72p)
Net debt £8.7m (2011: £7.7m)
Acquisition of Mash in January 2013
SEGMENTAL ANALYSIS
2012
2011
Headline
Gross
Profit
£m
Headline
Operating
Profit
£m
Margin
%
Headline
Gross
Profit
£m
Headline
Operating
Profit
£m
Margin
%
Cello Health
31.3
6.5
20.8%
29.2
6.1
20.9%
Cello
Consumer
32.8
3.0
9.1%
32.6
3.4
10.4%
Sub total
64.1
9.5
14.8%
61.8
9.5
15.3%
-
(1.8)
-
-
(1.7)
-
64.1
7.7
12.1%
61.8
7.8
12.6%
Central cost
Group
Like-for-like gross profit growth - Health 2.6%; Consumer 0.6%
INCOME STATEMENT
Gross profit
Headline operating profit
Interest
Headline profit before tax
Start-up investment
Restructuring costs
Acquisition costs
Amortisation
Employee remuneration
Impairment of goodwill
Facility fees written off
Notional interest/fair value adj
Reported profit before tax
2012
£m
65.1
7.7
(0.7)
7.0
(0.8)
(1.3)
(0.9)
(0.2)
(2.5)
0.1
1.4
2011
£m
61.8
7.8
(0.7)
7.1
(0.2)
(0.9)
(0.2)
(1.2)
(0.8)
(2.5)
(0.1)
1.2
INVESTMENT ITEMS
Cello Health
£m
Cello Consumer
£m
Total
£m
New offices
0.2
0.3
0.5
New products
0.2
-
0.2
New business
0.1
-
0.1
Total
0.5
0.3
0.8
RESTRUCTURING ITEMS
Cello Health
£m
Cello Consumer
£m
Total
£m
Property
-
0.6
0.6
People
-
0.7
0.7
Total
-
1.3
1.3
BALANCE SHEET
31 December 2012
£m
31 December 2011
£m
71.0
1.8
2.3
0.5
73.8
2.4
2.2
0.6
Current non cash assets
Cash
Creditors < 1 year
Net current assets/(liabilities)
Creditors > 1 year
Net assets
29.9
4.1
(30.9)
3.2
(13.1)
65.6
29.1
4.2
(34.5)
(1.2)
(11.6)
66.1
Acquisition related liabilities
(0.4)
(3.8)
Fixed assets Goodwill
Intangible assets
Fixed assets
Deferred tax asset
NET DEBT RECONCILIATION AND CASH FLOW
2012
£m
2011
£m
6.8
7.0
Interest
(0.9)
(0.7)
Facility fee paid in January 2012
Tax
(1.8)
(1.3)
Higher US tax payable
Capex
(1.7)
(1.0)
Capex, office refurbishment and
capitalised development costs
Acquisitions/cash/loan
note issuance
(2.0)
(4.7)
MedErgy deal in 2011
-
2.5
MedErgy deal in 2011
Dividends
(1.4)
(0.7)
Net debt movement
(1.0)
1.1
Opening net debt
(7.7)
(8.8)
Closing net debt
(8.7)
(7.7)
Net cash inflow from
operating activities
Share Issuance
Comment
Strong cash conversion
Timing movements
£29.0m facility until March 2016
175 - 280 bps over LIBOR
7 YEAR RECORD – DEGEARING AND DIVIDEND
GROWTH
40
2.00
35
1.80
30
25
£m
1.60
Pence per share
20
1.40
15
10
1.20
5
0
1.00
2006
2007
2008
2009
Net debt plus earn outs (£m)
2010
2011
Div/share (p)
2012
OPERATIONAL REVIEW
CELLO HEALTH
• 305 professionals
• Nine of top ten global pharmaceutical
companies are clients
• Significant international reach (London, New
York, Philadelphia)
• Strong habitual spending patterns from global
clients
• Acquisition of Mash Health in January 2013
% of Group Revenues from Cello Health
CELLO HEALTH GROWTH
60
2012
50
2011
40
2010
2009
2008
30
20
10
0
0
10
20
30
% of Group revenue outside the UK
40
50
CELLO HEALTH CLIENT BASE
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49% of gross profit, 68% of operating profit
9 of top 10 pharma
22 of top 25 pharma
31 of top 50 pharma
Excellent client continuity
CELLO HEALTH CAPABILITIES
Consumer
The Value Engineers + Mash in 2013
Insight + RS Consulting
Medical Marketing
MSI + CBS
Strategic Consulting
and Analytics
Market Research:
Quantitative and
Qualitative
MedErgy
Full Year 2012 Gross Profits
CELLO HEALTH – DEVELOPMENTS IN 2012
• Formation of Cello Health Board
• Establishment of centrally funded new
business team
• Significant investment in new geographies and
new offerings
ORGANIC GROWTH INITIATIVES FOR 2012/13
IQ
Enlarge global
quantitative research
capability
 MD in place
 Core team in place
Cello Consumer Health
Enlarge global
capability to service
OTC needs of clients
 MD in Place
 Hiring core team
 Mash acquisition
Cello Market Access
Enlarge global
capability to service
market access needs
 SVP in place
 Hiring MD
Cello Business Sciences
Invest in web-enabled
analytical product suite
 MD in place
 Core product programmed
(award winning)
eVillage
Extend social media
product suite in US
 MD in place
 Team in place
US Health
Enlarge US servicing
capability
 New office opened in NYC in
August
CELLO HEALTH PLANNED DEVELOPMENTS IN
2013
• Integrated client facing brand structure
• First full year of centralised new business
activity
• Continued support of investment initiatives
• Additional US expansion
• Expansion in Consumer Health with
acquisition of Mash
CONTINUED CONSOLIDATION IN HEALTHCARE
MARKETING SERVICES
(backed by TPG Capital)
(backed by Thomas H Lee Partners)
(backed by Symphony Technology Group)
CELLO CONSUMER
• 51% of gross profit; 32% of operating profit
• 450 Professionals
• Blue chip multinational client base in FMCG, mobile
telephony, gaming, retail, financial services and
charities
• Largest client = 4% of gross profit
• Presence in UK, San Francisco, Los Angeles, New
York, Hong Kong and Singapore
• Cutting edge social media tools
• Cutting edge web marketing capability
CELLO CONSUMER CAPABILITIES
Direct and
Database
Marketing,
Communications
Planning and
Execution
Market Research
2CV
Face
Blonde
Bright Group
Direct Media Planning
and Buying
Social Media
Strategy
and Analysis
Leith Group
Web Strategy
and Execution
Full Year 2012 Gross Profits
CELLO CONSUMER – DEVELOPMENTS IN 2012
• Formation of integrated board structure
• Consolidation of sub-brands into four primary
‘engines’ – Leith Group, Bright Group, Face and 2CV
• Ongoing reduction in surplus headcount and excess
space
• Investment in digital social media and software
capabilities – Pulsar and Communities tools
• Overseas push – USA and Asia
CELLO CONSUMER PLANNED DEVELOPMENTS
IN 2013
• Rebranding of Cello Consumer as client facing brand
• Focus on digital and social media front end
• Continued investment in existing and new overseas
offices
• Continued focus on margin improvement
SUMMARY
SUMMARY AND OUTLOOK FOR 2013
Strong focus on pharmaceutical sector
Solid growth in fee income
Long standing client relationships remain strong and growing
Increasing international exposure
Strong digital product offering
Confident outlook for 2013
THANK YOU