Aegis Media business review
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| £m | 2010* | 2009 | Change % |
Constant currency % |
|---|---|---|---|---|
| Revenue | ||||
| EMEA** | 579.7 | 585.3 | (1.0) | 0.4 |
| Americas*** | 189.4 | 158.6 | 19.4 | 14.5 |
| Asia Pacific | 117.7 | 81.3 | 44.8 | 34.4 |
| Worldwide | 886.8 | 825.2 | 7.5 | 6.8 |
| Operating costs | (722.1) | (674.8) | (7.0) | (6.1) |
| Operating profit**** | 164.7 | 150.4 | 9.5 | 9.9 |
| Operating margin**** | 18.6% | 18.2% | 40 bps | 60 bps |
| * | Mitchell acquisition contributed £12.6m revenue and £2.0m underlying operating profit in 2010 |
| ** | 2009 EMEA revenue includes one-off £9.5m insurance recoveries at Aegis Media Germany |
| *** | 2009 Americas revenue includes one-off £10.5m revenue reversal relating to Posterscope USA |
| **** | Throughout this commentary, results are stated on an underlying basis unless otherwise indicated |
Headlines /
- Organic revenue growth of 5.7% during 2010, including 7.4% in the fourth quarter
- At constant currency, operating margin increased 60 basis points to 18.6%, with operating profit increasing 9.9% to £164.7m
- Businesses in faster-growing regions and North America performed extremely well
- Geographic profile and product range in Asia Pacific strengthened by Mitchell acquisition and Charm joint venture and investment
- Digital revenue up to 32% in 2010, (from 31% in 2009)
- Strong global new business performance of $2.0 billion net new business wins in 2010, with continued momentum into 2011
- In March 2011, Carat upgraded 2011 global advertising expenditure growth forecast to 5.7% (from 4.7% forecast in August 2010).
2010 results overview /
Aegis Media delivered a strong performance in 2010, which benefited from a re-focused strategic approach, with an emphasis on enhanced digital capabilities, a strengthened geographic profile and an excellent new business performance during the year, with $2.0 billion in net wins, compared to $2.7 billion in 2009, a record year. This was supported by a number of good operational performances during the year, particularly from our businesses in faster-growing regions and North America.
As a result of these factors, Aegis Media delivered total revenue for the year of £886.8m, an increase of 7.5% at reported rates and 6.8% at constant currency. Organic revenue increased 5.7% in the year and 7.4% in the fourth quarter.
Quarter |
Half year |
Full Year | |||||
|---|---|---|---|---|---|---|---|
| Aegis Media | Q110 | Q210 | Q310 | Q410 | H110 | H210 | FY10 |
| Organic revenue change % | 3.0 | 3.6 | 8.5 | 7.4 | 3.4 | 7.8 | 5.7 |
Operating profit increased 9.5% at reported rates and 9.9% at constant currency to £164.7m, with operating margin up 40 basis points at 18.6% and up 60 basis points at constant currency. This was achieved despite total Aegis Media headcount increasing by 14.3% as at the end of the year, (5.5% excluding the addition of Mitchell employees). Underlying staff costs increased by 6.7% on a constant currency basis and total operating costs increased by 7.0% at reported rates and 6.1% on a constant currency basis.
The increases in headcount and staff costs were partly a result of the addition of the Mitchell business and due to accelerated resourcing in Asia Pacific and North America in the second half to support strong revenue growth in those regions. Whilst we continue to expect staff costs to increase in the coming years to match our growth ambitions, management will ensure a continued focus on cost control and efficiencies.
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