2016 Preliminary Results. 16 th March 2017

Transcription

1 2016 Preliminary Results 16 th March 2017

2 Overview Record results in terms of both revenue and earnings Actual revenues up 26%, constant currency revenues up 19% and like-for-like revenues up 9% Profit before tax increased 18% and EPS ahead 13% Rise in full year dividend of 15% 2017 has started well 2

3 Headline results 12 months to December Movement m's m's m's % Revenue % Profit before tax % Taxation % Profit after tax % Minority Interest (4.2) (3.0) (1.2) 40% Profit for period % Basic EPS 21.07p 18.57p 2.50p 13% Dividend 8.29p 7.21p 1.08p 15% 3

4 Key Ratios 12 months to December Headline revenue growth 26.0% 5.6% Revenue growth in constant currency terms 19.1% 10.0% Like-for-like revenue growth 9.3% 5.6% Operating margin 10.2% 10.4% Effective tax rate 17.3% 19.2% Minority interest: PAT 21.4% 18.5% Dividend growth 15.0% 15.0% Basic EPS 21.07p 18.57p Diluted EPS 20.55p 18.49p 4

5 The Headline P&L 12 months to December Movement m's m's m's % Revenue (gross profit) % Operating Expenses % Operating profit % Share of Associates (0.5) -25% Net Interest (0.8) (0.5) (0.3) 60% Profit Before Tax % Tax Rate 17.3% 19.2% Profit After Tax % Minority Interest (4.2) (3.0) (1.2) 40% Profit for Period % Headline EPS 21.07p 18.57p 2.50p 13% 5

6 Revenue 12 months to December v's 15 m's m's Reported Constant Rates Rates % % UK % 5.1% Europe % 4.8% Africa % 32.8% Asia & Australia % 12.6% Americas % 97.0% Group Total % 19.1% 6

7 The Headline Regional P&L 12 months to December 2016 m's UK Europe Middle East & Africa Asia & Australia Americas Central Costs Group Total Revenue v's % 18% 38% 25% 115% - 26% Operating profit (5.3) 23.0 v's % 10% 4% 37% 119% -2% 24% Operating Margin 11.7% 15.1% 9.3% 11.0% 15.5% % % 16.1% 12.3% 9.9% 15.2% % Share of Associates (0.1) Net Interest (0.6) (0.4) (0.8) Central Costs (0.4) (0.1) - (0.3) Profit Before Tax (4.9) 23.7 Tax Rate 13.2% 35.9% 36.4% 25.4% 1.6% 16.3% 17.3% Profit After Tax (4.1) 19.6 Minority Interest Profit for Period (4.1)

8 Top 10 Clients Commonwealth Bank Ferrero IAG IKEA O₂ Optus Pernod Ricard RBS Royal Mail Woolworths Top 10 = 28% of Revenue ( %) 8

9 New Businesses added in 2016 Opened in Dubai Developed digital offer in South Africa; acquiring 51% of Creative Spark in Johannesburg and 51% of Dalmatian in Cape Town Opened Mobile in New Delhi and Bangalore Started Tricky Jigsaw, an innovation operation in Sydney Acquired 51% of MCD Partners in New York and Chicago, who specialise in customer digital experience 9

10 New Businesses planned for 2017 Launching Re (our successful Sydney brand identity unit) in the UK Starting sponsorship operation in Madrid Opening Clear in Berlin and LA 51% acquisition of S&E company Levergy in Johannesburg 51% acquisition of media buying operation, Bohemia in Sydney Starting The Source in Melbourne S&E launching in LA Looking to open an office in Mexico 10

11 UK 5% revenue growth, with CRM, S&E and Mobile continuing to perform particularly positively. S&E was Agency of the Year (again) and Mobile was awarded Digital Agency of the Year and Most Effective Media Agency New business wins include: Virgin Red, Home Office, NN Investment Partners, E.ON, PHE, Rail Delivery Group, CAA and DWP Margin slippage (14.0% to 11.7%) with 1.6m of previously announced advertising agency restructuring costs (when excluded UK overall margin is 13.6%) Restructure complete and new management team in place and making progress 11

12 Europe Like-for-like revenues up 5% Stockholm maintains strong new business performance, winning Com Hem (TV and broadband) Germany and Italy continue to shine. Italy won E.ON In France, advertising still slow but won some YouTube/Google projects and growing through diversification Spain much improved. Won Codorniu and Huawei and consequently we are increasing our shareholding to 51% 12

13 Middle East and Africa Like-for-like revenues increased 23% SA finished strongly; lost Edgars but won Sun International and Strongbow Abu Dhabi in rebuild post Etihad loss Dubai growing steadily Tel Aviv making progress Beirut (Associate) remains challenging 13

14 Asia and Australia Like-for-like revenues ahead 13% Australia had another very good year. Won Woolworths (without a pitch), BBQ Galore, ebay and Tabcorp Awarded most Innovative Communications Company in Australia Associate in China aeiou had a good second half Malaysia still excelling and converted KLIA and Pr1ma Singapore developing positively and won Shell and Bridgestone 14

15 Americas Constant currency revenues were up 97%, with like-for-like revenues up 18% SS+K relationship in New York thriving and in the light of this good growth we increased our shareholding from 33% to 67% MCD acquisition making good progress Los Angeles lost UGG in Q1 but subsequently picked up some projects from Reebok and Fox Brazil macros and trading remain tough 15

16 Balance Sheet, Cash and Dividend Balance sheet still strong Net cash of 3.6m (30 th June net borrowing of 8.5m) after 13.9m spend on equity investments, predominantly NY Minority put option liability up with new NY subsidiaries Final dividend increased 15% from 5.60p to 6.44p, which takes full year dividend up 15% from 7.21p to 8.29p 16

17 Balance sheet st Dec. 31st Dec. m's m's Non Current Assets Net Debtors Net Creditors (118.5) (98.8) Net Tax (0.1) (0.3) Net Cash Net Current Assets Provision for minority put options (33.2) (24.4) Non Current liabilities (3.8) (1.9) Net assets

18 Cash Opening balance as at 1st January Operating profit 23.0 Net Interest paid (0.8) Tax paid in period (4.1) Depreciation 2.7 Capital expenditure (3.9) m's Free cash flow before working capital 16.9 Impact of working capital movements 0.6 Dividends paid (ordinary & MI) (8.6) Net cash flow before acquisitions 8.9 Acquisitions (13.9) Closing Balance as at 31st December

19 Outlook 2016 was an outstanding year for M&C Saatchi We continue to roll out our proven strategy of winning new business and starting new businesses We see positive momentum continuing across our network and business channels The year has started well and we are confident that we will continue to make good progress in 2017 and beyond 19

20 Additional Financial Information Regional Profit and Loss Accounts 20

21 UK Summary Profit & Loss 12 months to December v's 's 000's 000's % Revenue 88,504 84,159 4, % Underlying operating profit 10,397 11,781 (1,384) -11.7% Group costs (5,347) (5,361) % Recharged % Reported operating profit 5,520 6,813 (1,293) -19.0% Associates 1, Net interest (343) (528) Profit before tax 6,500 7,094 (594) -8.4% Underlying margin 11.7% 14.0% -2.3 PTS Reported margin 6.2% 8.1% -1.9 PTS 21

22 Europe Summary Profit & Loss 12 months to December v's 's 000's 000's % Revenue 26,685 22,745 3, % Underlying operating profit 4,028 3, % Group recharge (88) (83) (5) 6.0% Reported operating profit 3,940 3, % Associates (3) 24 (27) - Net interest (43) (61) 18 - Profit before tax 3,894 3, % Underlying margin 15.1% 16.1% -1.0 PTS Reported margin 14.8% 15.8% -1.0 PTS 22

23 Middle East & Africa Summary Profit & Loss 12 months to December v's 's 000's 000's % Revenue 11,673 8,549 3, % Underlying operating profit 1,086 1, % Group recharge Reported operating profit 1,086 1, % Associates Net interest 43 (16) 59 - Profit before tax 1,129 1, % Underlying margin 9.3% 12.3% -3.0 PTS Reported margin 9.3% 12.3% -3.0 PTS 23

24 Asia & Australia Summary Profit & Loss 12 months to December v's 's 000's 000's % Revenue 52,531 42,103 10, % Underlying operating profit 5,753 4,188 1, % Group recharge (343) (309) (34) 11.0% Reported operating profit 5,410 3,879 1, % Associates (37) - Net interest % Profit before tax 5,824 4,275 1, % Underlying margin 11.0% 9.9% 1.1 PTS Reported margin 10.3% 9.2% 1.1 PTS 24

25 Americas Summary Profit & Loss 12 months to December v's 's 000's 000's % Revenue 45,994 21,372 24, % Underlying operating profit 7,119 3,253 3, % Group recharge (38) - (38) - Reported operating profit 7,081 3,253 3, % Associates (80) 858 (938) - Net interest (571) 63 (634) - Profit before tax 6,430 4,174 2, % Underlying margin 15.5% 15.2% 0.3 PTS Reported margin 15.4% 15.2% 0.2 PTS 25