2021 Results
Annual Results for the year ending 31st December 2021
AGENDA
1
2
3
WHAT HAPPENED?
Financial Review
WHAT NOW?
Business Review
WHAT NEXT?
Outlook and Plans
1
WHAT HAPPENED?
Financial Review
PROFIT & LOSS
(£’M)
2021
BILLINGS
REVENUE
153.3
72.5
2020
121.9
61.5
%
change
£
31.4
11.0 18%
OPERATING EXPENSES
(64.5)
(59.6)
(4.9)
HEADLINE OPERATING PROFIT
OPERATING PROFIT MARGIN
INTEREST/JV SHARE
HEADLINE PBT
ADJUSTMENTS
PBT
TAX
EARNINGS
DILUTED HEADLINE EPS (p)
PROPOSED DIVIDEND (p)
8.0
11.1%
(0.6)
7.5
(0.7)
6.8
(1.4)
5.3
6.5
2.4
1.9
3.1%
(0.7)
1.2
(3.2)
(2.1)
(0.2)
(2.2)
1.0
nil
6.1 315%
8.0%
0.1
6.3 539%
2.5
8.9
(1.2)
7.6
5.5 550%
2.4
• Revenue up 18% on 2020
• Profit up 5% on market expectations
• Client retention statistics remain excellent:
47%+ from Clients of 5 yrs or more
31% from 10+ yrs, 14% from 20+ yrs
•
•
• Strong margin improvement:
•
•
•
•
YOY revenue growth (£11m) delivered off only £4.9m extra OPEX:
incremental margin of 55%
Steady infrastructure base
Firm cost control by Agency CEOs
Efficiency offered by CJRS
• Headline adjustments
(£M)
2021
COVID19
-
Board
Start ups
(0.5)
(0.4)
Acquisitions
0.2
Total
(0.7)
2020
(1.0)
-
(0.3)
(1.9)
(3.2)
• Movement in fair value of consideration:
2021 £0.8m; 2020 (£1.3m)
2020: increased forecast 2021 AC payment
2021: crystallised c£1m lower on negotiation
BALANCE SHEET STRENGTH
ACQUISTION OBLIGATIONS AT LOWEST LEVEL SINCE 2013
Acquisition Obligations £m
LEVERAGE RATIOS WELL WITHIN COVENANTS
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2013
2014
2015
2016
2017
2018
2019
2020
2021
Timing of current acquisition obligations:
2022: £0.7m / 2023: £0.4m / 2024: £0.3m / 2025: £1.9m
Bank facilities renewed Q1 2021:
£20m facility agreed with 3+1 term & £5m accordion option.
BALANCE SHEET
(£’M)
INTANGIBLES
FIXED ASSETS/INVESTMENTS
WORKING CAPITAL
NET BANK DEBT
EARN-OUT OBLIGATIONS
TOTAL NET DEBT
RIGHT OF USE ASSETS
LEASE LIABILITIES
ALL OTHERS (MAINLY TAX)
NET ASSETS
BANK DEBT LEVERAGE
TOTAL DEBT LEVERAGE
2021
99.0
2.6
6.9
(10.3)
(3.3)
(13.6)
9.1
(9.7)
(0.8)
93.5
x1.2
x1.5
2020
96.2
2.7
2.2
(1.2)
(8.5)
(9.7)
10.7
(11.3)
(0.6)
90.2
x0.6
x4.3
Working capital increase driven by
• catch-up of 2020 HMRC deferral schemes (£3.1m)
• supporting growth in H2 (£1.6m)
NET BANK DEBT MOVEMENT
(£’M)
12.0
10.0
8.0
m
£
6.0
4.0
2.0
0.0
1.2
2021
0.1
10.3
2.0
1.4
1.2
3.1
6.7
5.5
1.8
0.2
0.7
Deferred
HMRC
pmnts
Delayed
Acq
pmnts
Deferred
2019 div
Normal
Operating
CF
Prior
Acq'ns
New
Acq'ns
2021
Interim div
Capex
Lease
payments
Other
2022
• All COVID-19 deferrals etc now caught up (£5.7m)
• Major earn out obligations settled
• Capex: investment in Pathfindr
EFFICIENT CASH
CONVERSION
110% average conversion ratio over
the three years to 2021
Cash flow from operations / operating profit %
3 year MAT
140%
120%
100%
80%
60%
40%
20%
0%
2016
2017
2018
2019
2020
2021
PROGRESSIVE DIVIDEND STRATEGY
• 2021: Final dividend of 1.60p proposed
• Total dividend 2.40p, up 4% on 2019
2.7x cover on Headline Diluted EPS
IN SUMMARY
• 18% Revenue growth
• Effective conversion of Revenue to Profit
• Low level of Acquisition Obligations
• Excellent record of Cash conversion
• Progressive Dividend strategy
2
WHAT NOW?
Business Review
MISSION IS WORKING
• Improved Agency performance across the board
• Successfully added complementary businesses and services
• Repositioned some existing businesses to better reflect Client demand
• Group perfectly placed to capitalise on Client drive for ‘Collective Specialism’
• Continued to invest in our people and infrastructure (MSS)
• Board streamlining and restructuring complete
• Making progress against our ESG manifesto ‘Making Positive Change’
• Harnessed our MarTech capabilities to develop ownable IP and products i.e. Pathfindr
• Despite a very challenging new business landscape over £2m of revenue was referred
within the Group or won as a Group (more than one Agency). Excludes £6m pitched in
2021 but yet to be awarded
AGENCY PERFORMANCE
VS 2020
COVID-19 RESILIENT
SECTORS AND PERFORMERS
CONTINUED TO PERFORM
15% revenue
31% revenue
26% revenue
COVID-19 IMPACTED
SECTORS STARTING TO
BOUNCE BACK
34% revenue
40% revenue
33% revenue
TOP 5 CLIENTS AND SECTORS
CLIENT
YOY REVENUE
CHANGE
TENURE
SECTOR
% OF TOTAL
GROUP REVENUE
1.
2.
3.
4.
5.
31%
37%
43%
124%
87%
35 yrs
1. PROPERTY
4 yrs
7 yrs
2 yrs
2. TECHNOLOGY
3. HEALTHCARE
4. PUBLIC SECTOR
12 yrs
5. AUTOMOTIVE
18%
14%
8%
7%
7%
OUTPERFORMING OUR PEERS
WPP
Publicis
IPG
Dentsu
MISSION
M&C
Revenue growth
(2021vs 2020)
6.5%**
8.8%*
13.0%*
15.6%*
18%
8.8%*
Shore Capital:
* Factset consensus
** Revenue less pass through costs
MISSION NEW BUSINESS IS WORKING
FUELING THE ‘AGENCY FIRST’ AGENDA BUT PROVIDING A SOLUTION FOR THE
‘MULTI-SPECIALIST’ BRIEFS
AGENCY
ü Specialists, tight and agile team
X A narrow, specific skill set and category experience
Investment in Agency (Local) Marketing
AGENCIES
ü Multifaceted category experience
Investment in Central resource and external
professional support
MISSION
ü Big, broad capability
ü Wide and varied skill set
GROUPING OUR AGENCIES
HOW WE SHOW OURSELVES TO OUR CLIENTS
PURPOSE
PERSUASION
PROVISION
Livity is a creative business that works
hand in hand with brands and
the next generation
to build the future better
Youth inspire and co-create everything we make,
through our youth network, and beyond.
That network is made up of a diverse group of
young people in the truest sense of the word.
What unifies them all is a creative mindset, with a
desire to positively impact the world in their own
way.
Creators // designers // makers // activists // entrepreneurs //
Illustrators // designers // artists // product developers //
videographers // editors // writers // strategists // Fashion
designers // musicians // architects // doctors // podcasters //
models // presenters // athletes // And more.
We help our clients to change the behaviour of
their target audience (be it employees or
consumers)
We do this by first understanding the motivations
of the audience and then creating engaging
campaigns to impact their behaviour
Our clients range across multiple sectors (FMCG,
Telecomms, Financial etc) as agencies looking for
specialist support.
We specialise in…
Sales Promotion
Partnership Marketing
Reward & Recognition
Gifting & Benefits
B2B Representation / Sales Management
We ensure your audience are
moved in the right direction.
Our difference:
CX insight and tools fuel our creativity,
and creativity elevates our CX approach.
We call it Creative CX.
The output:
Ever-evolving, intelligently joined up
communication with your audience
– and powerful results for you.
3
WHAT NEXT?
Outlook and Plans
IN APRIL
Story Edinburgh, Story Newcastle and Chapter Birmingham are coming together to form
Story Group.
Already sister agencies in culture, heart and spirit, together they unite to give scale,
geographic reach, broad sector experience and a strong creative reputation.
PATHFINDR: READY TO GROW
• IIoT is thriving
• Pandemic restrictions on visiting Clients nearly completely over
• Core team in place – technology, procurement, sales, marketing and technical support
• Product suite constantly evolving ahead of curve
• Gen 3 GPS development utilizing new IOT networks (5G)
• Ultra-wideband technology roll-out
• Proximity detection to Trilateration for even greater accuracy
• Blockchain integration for greater data integrity
• ‘Uniqueness’ of the Pathfindr offer communicated and resonating with global businesses,
initiating trials around the world
PATHFINDR: READY TO GROW
Some examples of trials currently underway in Q1
Ford Europe
Ford ASPAC
Ford China
Global engine parts location & condition monitoring (Mexico/Spain)
Parts logistics tracking (S.Africa/China)
Electric vehicle parts logistics tracking and monitoring in-country
Ford Supply Chain
Ford rolling out Pathfindr offer to their key suppliers
e.g. Nemak manufacturing plant location and monitoring (Mexico)
Petronas
European bulk IBC container tracking (UK/Europe)
Rolls Royce Aero
US Govt asset tracking (UK)
Outukumpu
Thyssenkrupp
Stainless steel bulk logistics monitoring (Mexico)
Parts tracking and monitoring (Germany/Spain)
And many more…………..
PATHFINDR: CONSTANTLY INNOVATING
• Potential partnership with; QTS Group, one of the UK's leading Rail Contractors, providing
specialist services in Rail Engineering, Infrastructure, Electrification, Design & Training
• 10 workers are killed every year resulting in £xxm potential fines and criminal prosecutions
PEOPLE THAT COUNT
• There is no point ignoring it - The Great Resignation has made this an incredibly tough market in
which to recruit, coupled with Industry wide wage inflation (offset by pricing realignment)
• That’s why we constantly invest and innovate in securing the best and brightest talent, first
• 300 people were recruited by the central team in 2021 and because of our unique approach
£851,000 was saved in Recruitment Agency fees
• Cost per hire last year was £1,284 vs external estimates of c£3,000 (CIPD and Glassdoor)
• Group People Board created (November 2021) as a forum for change and the shaping and delivery
of an ambitious People Proposition
• Understand how we can recruit, develop and retain the best, whilst providing an exceptional employee experience
• Provide awareness of both the internal and external people factors that influence how we operate
• Deliver a consensus re Group priorities to improve consistency and collaboration
• Build on strong transformational leadership
• Mobilise Leaders and the People Team on issues that matter to the whole Group
PEOPLE THAT COUNT
ALSO EACH AGENCY IS INNOVATING TO SUPPORT THEIR EMPLOYER BRAND
FOR EXAMPLE: ThinkAcademy
• A prestigious learning environment delivering bespoke content on a range of courses for new recruits and
continuing professional development for our teams
• Gold Standard core modules written to fit ThinkBDW’s business needs, ethos and professional standards
• Apprentices recruited to ThinkAcademy will learn from the best in the business and benefit from invaluable work
placements to be undertaken alongside their studies
• ThinkAcademy courses, to be delivered by in-house and external trainers, will include:
• CGI/UX
• Design/Artwork
• Account Handling core skills
• Presentation skills for Account Managers
• Managing people
• Copywriting
• Proofreading
MAKING POSITIVE CHANGE
• It’s our ambition to become the UK’s leading, most respected Agency Group
• We believe the impact MISSION makes on the world should be positive, always
• We have mapped the carbon impact of the entire MISSION Group, allowing us to identify key
hotspots and areas where we can improve our behaviours and practices to make a
fundamental difference
• We have joined the Business Ambition for 1.5°C campaign - the world’s largest and fastest-
growing group of companies that are aligning with 1.5°C by helping to halve global emissions
by 2030
• A target reduction in total emissions by 21% for 2024 and 42% for 2029 in line with Science
Based Targets
• 17 environmental champions from across our Agencies appointed
• These environmental champions have been working hard to develop robust Environmental
Management Systems and action plans and we hope to see all Agencies this year receive ISO
14001 certification as a result
MISSION GROUP DEVELOPMENT
MAINTAINING OUR GROWTH TRAJECTORY
ALREADY IN DEVELOPMENT
• eCommerce via Mission Made
• Enhanced SEO capability via Mission Made
• Shaping an evolved Healthcare proposition
• Developing a central ‘Data that Counts’ proposition
IN SCOPE (2022)
• Assessing and enhancing the Group’s Media Planning & Buying needs
• MISSION HUBS ‘Build it and they will come’
• The creation of multi-Agency International hubs to facilitate Global expansion and growth – organic and M+A
• Building in additional Verticals
• Leveraging our financial strength to take advantage of in-market M&A opportunities
IN SUMMARY
18% REVENUE
GROWTH IN 2021
WITH EFFECTIVE
CONVERSION INTO
PROFIT AND CASH
NEW ADDITIONS
OF SOUL AND
LIVITY BEDDING IN
WELL AND
ONGOING AGENCY
PORTFOLIO
DEVELOPMENT
PLAN TO USE
FINANCIAL
STRENGTH FOR
FURTHER
GROWTH AND
PATHFINDR
RESTRICTIONS TO
TRADE NOW
REMOVED
2022 HAS
STARTED WELL
AND WE ARE
ANTICIPATING
ANOTHER YEAR OF
DOUBLE DIGIT
GROWTH