Group Press Releases
Interim Management Statement
18 May 2009
When we announced our 2008 results in March of this year, we said that we expected to produce a resilient performance in more difficult markets in 2009. Following the first quarter, our views on the outlook remain unchanged. While we face difficult market conditions in both divisions, the group has been well-positioned to meet these with a targeted cost-reduction programme and increased flexibility in variable costs.
The comparative quarter in 2008 was exceptionally strong in both businesses, with Aegis Media revenue up 29.9% and Synovate gross revenue up 16.5%. Against these unusually high comparatives, group revenue in the first quarter of this year was 6.5% ahead, including a significant exchange rate benefit. Revenue was up 4.8% at Aegis Media and at Synovate gross revenue was up 9.6% and net revenue was up 10.9%. Excluding the effects of currency movements and acquisitions, group organic revenue was down by 11.6%, made up of 13.1% at Aegis Media and 9.1% in gross revenue at Synovate, where net revenue was down 12.0% organically.
Approximately half of the organic revenue movement at Aegis Media was the result of the phasing of previously announced client losses in the US and Renault in EMEA. However, new business momentum has been very strong, with net new business wins of $1.05bn in the quarter, including Kellogg's, Vodafone and Credit Agricole. These wins will start to benefit Aegis Media's performance from the second quarter onwards and should offset the impact of the earlier losses for the rest of the year.
The relative revenue movement in Synovate was largely adverse due to the high first quarter in 2008, with actual performance on budget. While we remain cautious about the predictive use of quarterly data at this stage of the year, sales orders in the first quarter of 2009 at constant currency were broadly in line with the first quarter of 2008.
John Napier, chairman and interim chief executive officer, said:
"Given visibility remains limited across the industry, in addition to sales we are focussed on delivering the cost reduction programme announced in March, which is on track. We have built in considerable flexibility in relation to variable costs. Our target remains to broadly maintain the full year underlying operating profit margins through continuing careful management of our businesses.
"Our financial position remains strong. We continue to manage our cash and working capital prudently."
For further information please contact:
Aegis Group plc +44 (0) 20 7070 7700
Charlotte Elston
Hannah Bailey
Tulchan +44 (0) 20 7353 4200
Andrew Grant
John Sunnucks
