HALF YEAR FINANCIAL RESULTS

Transcription

1 2006 HALF YEAR FINANCIAL RESULTS

2 FINANCIAL RESULTS BY CATEGORY HALF YEAR ENDED JUNE 30, 2006 TOTAL GROUP ADVERTISING DIRECT, PROMOTION & RELATIONSHIP MARKETING BRANDING & IDENTITY PUBLIC RELATIONS PRODUCTION & MEDIA INFORMATION & INSIGHT SPECIALIST COMMUNICATIONS HOLDING COMPANIES Note: STW has direct and indirect ownership interests in over 50 advertising and communications companies. Because our holdings in many of these companies constitute joint control under current accounting standards we cannot consolidate their results in our statutory accounts. Accordingly we compare in this report the consolidated results for all companies in the Group, with STW s economic interest in their revenues, profits and losses aggregated on a percentage basis.

3 TOTAL GROUP ($ 000) CONSOLIDATED Jan-Jun 2006 CHANGE PCP STW SHARE Jan-Jun 2006 CHANGE PCP 167,358 15% REVENUE 101,562 27% 37,604 4% EBIT 22,900 18% 22% -3 points EBIT MARGIN 23% -1 point 37,741 5% OPBT 22,476 21% 23% -1 point OPBT MARGIN 22% -1 point 26,538 2% NORMALISED NPAT 16,223 17% STW share of consolidated NPAT 61% Results include cost of Executive Share Plan Acquisitions contributed 38% of STW s revenue growth. Normalised earnings exclude amortisation and impairment

4 TOTAL GROUP JAN JUN 2006 NORMALISED NPAT GROWTH 17% WANOS GROWTH 13% NORMALISED EPS GROWTH 3%

5 TOTAL GROUP 2006 FULL YEAR FORECAST FORECAST NORMALISED NPAT GROWTH 17% 22% FORECAST WANOS GROWTH 10% FORECAST NORMALISED EPS GROWTH 7% 12%

6 STW GROUP COMPANIES REVENUE SPLIT JAN JUN 2006 Sector Changes on PCP Advertising -5 points DPRM +2 points Branding & Identity Public Relations Production & Media -2 points Info & Insight +5 points Specialist Comms. TOTAL GROWTH 27%

7 STW GROUP COMPANIES CONSOLIDATED REVENUE BY CATEGORY JAN JUN 2006 ADVERTISING Singleton Ogilvy & Mather (67%) J.W.T. (ANZ) (49%) The Brand Agency (49%) Advertising Works Ogilvy (43%) Badjar (100%) Zoo Communications (50%) Fame Advertising (67%) Peach Advertising (60%) I.M. Advertising (49%) Star Advertising (67%) STW Automotive Advertising (50%) Frank Advertising (43%) STW Village (100%) $82 MILLION Note: Percentages are STW s fully diluted 2006 ownership interest.

8 ADVERTISING ($ 000) CONSOLIDATED Jan-Jun 2006 CHANGE PCP STW SHARE Jan-Jun 2006 CHANGE PCP 82,028 5% REVENUE 51,339 15% 24,986 0% OPBT 15,911 11% 31% -1 point OPBT MARGIN 31% -1 point 17,308 0% NPAT 11,279 13% STW share of consolidated NPAT 65%. Acquisitions account for 3% of STW s revenue growth and 13% of STW s NPAT growth.

9 STW GROUP COMPANIES CONSOLIDATED REVENUE BY CATEGORY JAN JUN 2006 DIRECT, PROMOTION AND RELATIONSHIP MARKETING Singleton Ogilvy Interactive (67%) Singleton Ogilvy One (67%) Brett Goulston (49%) Relationship Marketing Group (29%) Torque (40%) Permission Communications (40%) SMSi (49%) JWT (49%) rmg:connect (29%) Bamboo (30%) Promotional Campaigns Group (67%) Fudge (49%) Evocatif (49%) STW Village (100%) $19.2 MILLION Note: Percentages are STW s fully diluted 2006 ownership interest.

10 DIRECT, PROMOTION AND RELATIONSHIP MARKETING ($ 000) CONSOLIDATED Jan-Jun 2006 CHANGE PCP STW SHARE Jan-Jun 2006 CHANGE PCP 19,234 48% REVENUE 11,193 54% 4,039 32% OPBT 2,522 43% 21% -3 points OPBT MARGIN 23% -2 points 2,816 30% NPAT 1,762 42% STW share of consolidated NPAT 63%. Acquisitions account for 27% of STW s revenue growth and 20% of STW s NPAT growth.

11 STW GROUP COMPANIES CONSOLIDATED REVENUE BY CATEGORY JAN JUN 2006 BRANDING AND IDENTITY Cornwell Design (40%) DT Design (49%) EKH Branding House (100%) Design Works (40%) Chameleon (49%) $11.3 MILLION Note: Percentages are STW s fully diluted 2006 ownership interest.

12 BRANDING & IDENTITY ($ 000) CONSOLIDATED Jan-Jun 2006 CHANGE PCP STW SHARE Jan-Jun 2006 CHANGE PCP 11,293 20% REVENUE 6,751 27% 3,817 53% OPBT 2,586 59% 34% 7 points OPBT MARGIN 38% 8 points 2,662 52% NPAT 1,802 58% STW share of consolidated NPAT 68%. Acquisitions contributed less than 10% of STW s revenue and NPAT growth. More than 90% of growth is organic.

13 STW GROUP COMPANIES CONSOLIDATED REVENUE BY CATEGORY JAN JUN 2006 PUBLIC RELATIONS Ogilvy PR (49%) Howorth Communications (49%) Pulse Communications (49%) Savage & Horrigan (38%) Parker & Partners (37%) Canning-Debelle (100%) Stenmark Organisation (49%) $10.5 MILLION Note: Percentages are STW s fully diluted 2006 ownership interest.

14 PUBLIC RELATIONS ($ 000) CONSOLIDATED Jan-Jun 2006 CHANGE PCP STW SHARE Jan-Jun 2006 CHANGE PCP 10,543 5% REVENUE 5,913 31% 2,309 6% OPBT 1,557 46% 22% OPBT MARGIN 26% 3 points 1,677 12% NPAT 1,150 56% STW share of consolidated NPAT 69%. Acquisition accounted for less than 10% of STW s revenue and NPAT growth.

15 STW GROUP COMPANIES CONSOLIDATED REVENUE BY CATEGORY JAN JUN 2006 PRODUCTION AND MEDIA MindShare (50%) Plush (45%) Stenmark Organisation (49%) Candlelit Films (49%) Massive Vision (49%) $18.4 MILLION Note: Percentages are STW s fully diluted 2006 ownership interest.

16 PRODUCTION AND MEDIA ($ 000) CONSOLIDATED Jan-Jun 2006 CHANGE PCP STW SHARE Jan-Jun 2006 CHANGE PCP 18,420 5% REVENUE 9,036 5% 4,377 (16%) OPBT 2,128 (15%) 24% -6 points OPBT MARGIN 24% -6 points 3,125 (14%) NPAT 1,520 (14%) STW share of consolidated NPAT 49%

17 STW GROUP COMPANIES CONSOLIDATED REVENUE BY CATEGORY JAN JUN 2006 INFORMATION AND INSIGHT A.N.O.P. Research (50%) Added Value (51%) Hoed (100%) Pophouse (50%) AMR Interactive (100%) $9.8 MILLION Note: Percentages are STW s fully diluted 2006 ownership interest.

18 INFORMATION & INSIGHT ($ 000) CONSOLIDATED Jan-Jun 2006 CHANGE PCP STW SHARE Jan-Jun 2006 CHANGE PCP 9, % REVENUE 8, % 1, % OPBT 1, % 17% 3 points OPBT MARGIN 18% 4 points 1, % NPAT 1, % STW share of consolidated NPAT 91%. Acquisitions contributed 94% of STW s revenue growth and 77% of STW s NPAT growth.

19 STW GROUP COMPANIES CONSOLIDATED REVENUE BY CATEGORY JAN JUN 2006 SPECIALIST COMMUNICATION Assignment (100%) Ethnic Communications (67%) Impact Employee Communications (39%) Solutions Marketing (24%) STW Brandswitch (50%) Oxygen Learning (60%) (2005: 49%) STW Sports & Events (45%) Web Development Group (49%) STW Automotive (50%) Adcast (40%) $16.0 MILLION Note: Percentages are STW s fully diluted 2006 ownership interest.

20 SPECIALIST COMMUNICATIONS ($ 000) CONSOLIDATED Jan-Jun 2006 CHANGE PCP STW SHARE Jan-Jun 2006 CHANGE PCP 16,055 31% REVENUE 8,897 45% 2,815 (8%) OPBT 1,747 2% 18% -8 points OPBT MARGIN 20% -8 points 1,805 (16%) NPAT 1,126 (5%) STW share of consolidated NPAT 62%. Acquisitions and start-ups contributed 72% of STW s revenue increase and a 38% increase on pcp NPAT.

21 HOLDING COMPANIES ($ 000) CONSOLIDATED Jan-Jun 2006 CHANGE PCP STW SHARE Jan-Jun 2006 CHANGE PCP (6,284) (13%) OPBT (5,502) (15%) (4,032) (37%) NPAT (3,483) 47% Includes STW holding companies, SOM Holdings and JWT Holding companies. Significant increase in holding company costs due primarily to investment in more senior executives at STW level.

22 STW GROUP STRATEGY A Unique Leader Unmatched in scale, depth, breadth, specialisation A Results Powerhouse Ideas driven; results obsessed Channel Neutral Solutions Bespoke solutions leveraging the insight, ideas and influence of entire group Home to the Biggest Brands The best client list in the business Home for the Best People And the place where the best want to work

23 STW GROUP STRATEGY The STW Business Model is proven and sets the benchmark. That model deals with Marketing / Communications budgets as a whole not Advertising, not DM, not Digital etc but Marketing Communications. Not subject to cyclical swings affecting media spending. Direct beneficiary of the fragmentation of media spend. We are paid by assignment. The more channels to market, the more pipes to fill, the more assignments we are paid to fulfil. Acquisitions of quality businesses remain an important part of our growth strategy as will the continual search for new ideas and great people.

24 STW ACQUISITIONS 6 Simple Rules of Engagement Will business X grow quicker with STW than without STW? Is business X cash flow positive? Will company X deliver minimum 15% ROI (PBT as % of investment costs?) Will the deal be accretive to the STW share price? Does business C bring best in class skills to STW and help us build our strategy of servicing MARKETING budgets? Do we like the people?!

25 ACQUISITIONS Entity Speciality STW s Equity Interest Mears Taine (NZ) Advertising 100% BADJAR Advertising 100% AMR Interactive Research 100% DT Design Web Design 49% Oxygen Training 60% Adcast Automation 40% Starterjee Consulting 20% Canning-Debelle Public Relations 100% Howorth Communications Public Relations 49% Savage & Partners Public Relations 38% Pulse Communications Public Relations 49%

26 ACQUISITIONS IN 06 TO DATE Adcast Marketing Automation Meares + Taine Advertising PROPOSED Design / Strategy Research Promotions / Activation Media Planning / Buying Photographic Studio / Digital Asset Management Branded Entertainment BEYOND Field Marketing Web and On-line Advertising Agencies

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