final results for the year ending 31 december 2012
DESCRIPTION
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 - PowerPoint PPT PresentationTRANSCRIPT
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
• 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 2011Headline
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%
Central cost - (1.8) - - (1.7) -
Group 64.1 7.7 12.1% 61.8 7.8 12.6%
Like-for-like gross profit growth - Health 2.6%; Consumer 0.6%
INCOME STATEMENT2012£m
2011£m
Gross profit 65.1 61.8Headline operating profit 7.7 7.8Interest (0.7) (0.7)Headline profit before tax 7.0 7.1Start-up investment (0.8) (0.2)Restructuring costs (1.3) (0.9)Acquisition costs - (0.2)Amortisation (0.9) (1.2)Employee remuneration (0.2) (0.8)Impairment of goodwill (2.5) (2.5)Facility fees written off - (0.1)Notional interest/fair value adj 0.1 -Reported profit before tax 1.4 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 SHEET31 December 2012
£m31 December 2011
£m
Fixed assets GoodwillIntangible assets Fixed
assetsDeferred tax asset
71.0 1.82.30.5
73.82.42.20.6
Current non cash assets 29.9 29.1Cash 4.1 4.2Creditors < 1 year (30.9) (34.5)Net current assets/(liabilities) 3.2 (1.2)Creditors > 1 year (13.1) (11.6)Net assets 65.6 66.1
Acquisition related liabilities (0.4) (3.8)
NET DEBT RECONCILIATION AND CASH FLOW2012£m
2011£m Comment
Net cash inflow from operating activities 6.8 7.0 Strong cash conversion
Interest (0.9) (0.7) Facility fee paid in January 2012Tax (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
Share Issuance - 2.5 MedErgy deal in 2011Dividends (1.4) (0.7) Timing movementsNet debt movement (1.0) 1.1
Opening net debt (7.7) (8.8) £29.0m facility until March 2016 175 - 280 bps over LIBORClosing net debt (8.7) (7.7)
7 YEAR RECORD – DEGEARING AND DIVIDEND GROWTH
2006 2007 2008 2009 2010 2011 20120
5
10
15
20
25
30
35
40
1.00
1.20
1.40
1.60
1.80
2.00
Net debt plus earn outs (£m) Div/share (p)
Pence per share£m
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
CELLO HEALTH GROWTH
0
10
20
30
40
50
60
0 10 20 30 40 50
2008
2012
2011
2010
2009
% o
f Gro
up R
even
ues f
rom
Cel
lo H
ealth
% of Group revenue outside the UK
CELLO HEALTH CLIENT BASE
• 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
The Value Engineers + Mash in 2013
Insight + RS Consulting
MSI + CBS
MedErgy
Consumer
Market Research: Quantitative and Qualitative
Strategic Consulting and Analytics
Medical Marketing
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 2012/13IQ 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 Symphony Technology Group)
(backed by TPG Capital)
(backed by Thomas H Lee Partners)
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
2CV
Face
Blonde
Bright Group
Leith Group
Market Research
Social Media Strategy and Analysis
Web Strategy and Execution
Direct and Database Marketing, Communications Planning and Execution
Direct Media Planning and Buying
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
Solid growth in fee income
Long standing client relationships remain strong and growing
Increasing international exposure
Strong focus on pharmaceutical sector
Strong digital product offering
Confident outlook for 2013
THANK YOU