Interim Management Statement
18 May 2010
Aegis Group plc today announces its Interim Management Statement for the first three months of 2010,
ending 31 March 2010.
Review of results
At our Preliminary Results Announcement on 18 March, we reported an improvement in quarterly revenue
trends in the second half of 2009 and, based upon a background of a slightly more optimistic view of the
world outlook, we stated that we were budgeting for modest growth in 2010.
The trend of improving quarterly revenues in the second half of 2009 continued in the first quarter in line
with our expectations and consequently we are able to reiterate our expectation of delivering modest
growth for the full year.
Total group revenues for the first quarter of the year were up 0.8% on 2009 on a reported basis. Taking
account of the effects of currency movements, acquisitions and disposals, group organic revenue was up
by 1.1% compared to prior year, as shown in the table below.
| Organic revenue growth (%) |
Q3 2009 |
Q4 2009 |
Q1 2010 |
| Aegis Media |
-11.8 |
-8.0 |
+3.0 |
| Synovate |
-10.1 |
-5.5 |
-1.9 |
| Group |
-11.1 |
-6.9 |
+1.1 |
This growth was driven by a solid performance from Aegis Media, which delivered organic growth of
+3.0% during the first quarter. This was supported by strong performances from our businesses in
developing markets, notably Asia Pacific, and China in particular, Russia and Latin America.
In Europe and North America, performance was mixed with modest growth in France, Italy and the UK,
whilst Spain recovered from a relatively low base. This contrasted with more challenging markets in
Germany, Netherlands and the Nordics. Our US businesses delivered a varied performance, but gained
good momentum following some important new business wins, including Beiersdorf, the skin and beauty
care group and Smuckers, the food manufacturer.
Overall, the new business performance remains healthy going into the second quarter, with total net new
business wins of $0.8 billion achieved in the first quarter including Deutsche Bank and De Agostini
internationally and China Telecom in China.
In Synovate, the trend in quarterly sales orders and revenues continued to improve, with organic revenue
falling by 1.9%, compared to a 5.5% decline in the fourth quarter of 2009. Synovate’s sales order book
going into the second quarter was 7% higher than at the same time last year. Our Synovate businesses in
Asia Pacific, Africa and both North and Latin America started the year well. However, we continued to
experience a more varied story across Western Europe and Eastern Europe.
Balance sheet and cash flow
The Group’s balance sheet has been further strengthened since the beginning of the year with the
successful launch of a Convertible Bond. The amount raised was £190.6m, including the exercise of an
over-allotment option, due in April 2015, with a coupon of 2.5%.
The Group spent £40.2m on three new acquisitions in the first quarter, the most significant of which was
the purchase of a 17.7% shareholding in Charm Communication Inc, one of China’s leading TV buying
and advertising agencies. Vizeum and Charm also established a joint venture which operates as Vizeum
China.
Outlook
Jerry Buhlmann, Chief Executive Officer, said:
“Aegis produced a solid performance in the first quarter. There were tentative signs of clients’ starting to
increase their marketing and advertising budgets for the second half of 2010.
“Despite on-going uncertainties in the global economic environment, Aegis is well positioned for the
coming year with evidence of top-line momentum, a strengthened balance sheet and strong management
continuity. Against this background, we continue to forecast modest growth this year.”
For further information please contact:
| Aegis Group plc +44 (0) 20 7070 7708 |
Tulchan +44 (0) 20 7353 4200 |
| Rob Gurner |
Susanna Voyle |
| |
Tom Rayner |
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