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LBI International AB (publ.) (AMS:LBI) PRESS RELEASE Stockholm/Amsterdam, 23 October 2008
LBI International AB ("LBi"), the global marketing and technology agency, today announces its results for the third quarter 2008.
Executive summary - Strong performance in third quarter, a period traditionally impacted by the summer holiday season.
- EBITDA came in at EUR 6.0 million, a year-on-year improvement of 51.3%
- Improved margins across the Group resulting from better cost control and improved new business conversion. Our two primary hub markets, UK and US, reported EBITDA margins of 20.4% and 24.1% for the quarter.
- Net sales in the third quarter increased by 3.9% and amounted to EUR 41.0 million (40.3) year-on-year. Quarterly growth is pressured by ongoing rebalancing of portfolio and move to higher margin retained business.
- Earnings per share in the third quarter came to EUR 0.05 (0.02).
- Execution well on track against our strategic objectives with continued focus on improving quality of earnings and cost optimization.
- LBi expects further improved operational performance in Q4.
A word from the CEO Even though Q3 is a quarter traditionally impacted by the holiday season, we have delivered a strong set of results. For the quarter, EBITDA came in at EUR 6.0 million on sales of EUR 41.0 million. This represents a year-on-year EBITDA improvement of 51% (62% at constant currency rates).
I am pleased with the progress we have made over the past two quarters. We are now delivering EBITDA margins of 20.4% and 24.1% in our two primary hub markets (UK and US), as a result both of better cost control and improved new business conversion. The steps that we have taken over the course of the year to institutionalize operational excellence and drive efficiency will serve us well if economic conditions continue to deteriorate. We have deliberately throttled growth in our relentless pursuit of blue chip, retained, high margin engagements and this disciplined, focused approach to new business will safeguard profits as we go into 2009. I do nevertheless believe that we can further accelerate our cost optimization programme and we will of course continue to aggressively manage our cost base in real time in response to changing market conditions.
We continue to track well against our strategic objectives. We have significantly matured our two primary hub offerings. In the United States we can now deliver a best-in-class marketing-led offer. Our dedicated media operation, digital creative agency and platform specialists are increasingly working and pitching in a fully integrated fashion. In the UK market we have significantly deepened our search engine optimization, search engine marketing, data and media capabilities. We have also rolled out a single go-to-market offering that now consistently applies in all markets and this enables us to respond faster and more effectively on cross-border pitches. The LBi rebranding has been virtually completed in all European markets (with Germany coming on stream during the quarter) and this has made it easier to leverage our global footprint in response to client needs.
Improved clarity and focus in our offer has translated into improved new business success. Key wins in the quarter include, Proximo Spirits in the US, Waterstones and HMV in the UK and IKEA, Q8 and Bayer Healthcare in Central and Southern Europe and Scandinavia. In these new engagements we meet an increasing desire to consolidate all direct response, ECRM and digital activities into a single contract. This reinforces the relevancy of our service strategy and plays to our highly differentiated position in the market place.
While we expect to deliver further improved operational performance in Q4 it is difficult to assess how current market conditions will impact 2009. The new business funnel at country level is robust but it is not yet clear how much new business activity will convert into signed orders. Spending behaviour can be differentiated by sector. There is evident contraction in both the automotive and financial wholesale services sectors but this is currently being offset by improved digital business and marketing spend in the retail/e-commerce, fast moving consumer goods and media/entertainment sectors.
In our Q4 release we expect to assess more confidently the 2009 picture as we will by this time have concluded budget negotiations across our key client base. At this point in time we remain confident that we can benefit from any prolonged period of uncertainty and we expect to capture market share with advertisers that are increasingly attracted to an ROI-led service offer.
Luke Taylor, CEO
For further information please contact: Luke Taylor, CEO, LBI International AB +44 (0) 20 70 63 64 65, luke.taylor@lbi.com Huub Wezenberg, acting CFO, LBI International AB +31 20 460 4500, huub.wezenberg@lbi.com Eva Ottosson, Group Communications Manager, LBI International AB +46 709 41 21 40, eva.ottosson@lbi.com
About LBi: LBi is a global marketing and technology agency. The Company employs approximately 1,600 professionals located primarily in the major European, American and Asian business centers, such as Amsterdam, Atlanta, Berlin, Brussels, London, Milan, Mumbai, New York, Paris and Stockholm. LBi blends the full range of service disciplines to create innovative multichannel solutions for national and international corporate clients. By combining business and media strategy development with creative design, industry expertise and the latest digital communications technology, LBi offers a unique , and uniquely valuable proposition. LBi is listed on OMX Nordic in Stockholm and Euronext in Amsterdam as (symbol: LBI). www.lbi.com
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