Chime Communications plc

1
Chime Communications plc

• 2007 Preliminary Results
• For the Year Ended 31st December 2007
• 11th March 2008

2
Agenda

• Highlights
• Operational review
• Financial review
• Review of strategic progress
• Summary and outlook

3
Highlights

• 2007 operating profit up 29 - strong performance
  from all divisions
• Successful integration of acquisitions Fast
  Track, Corporate Citizenship, Facts and Stuart
  Higgins Communications
• Expanded digital capability to 12 of Group
  operating income
• Continued international expansion
• Strong cash generation
• Adoption of more progressive dividend policy
• 2008 started well

4
Operating profit analysis
5
Operational review

6
Modern communications group

• Chime operates in a global and diversified
  communications marketplace
• Bell Pottinger is the No. 1 public relations
  group in the UK
• Fast Track is the No. 1 sports marketing group in
  the UK
• The VCCP Group is a top 20 advertising and
  marketing services group
• The Chime Research Division is the market leader
  in deliberative research and consultation
• Teamspirit and TTA are top 3 performers in
  specialist communications in financial services
  and property marketing respectively

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Diversified strategy
Operating income
By geography
By division
8
Segmental analysis
9
Organic income growth - 2007
Source Group M
10
Industry sectors
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Financial review
12
Cash flow
13
Profit before tax
14
Balance sheet
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Banking arrangements

• 25 million reducing to 21 million in February
  2009 and 17 million in August 2009
• 15.5 million VCCP deferred payable in full in
  April 2008. 7.75 million in cash and 7.75
  million in shares
• shares subject to restriction on sale
• combination of new and existing shares
• Net debt during 2008 with forecast year end
  balance of less than 5 million

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Deferred considerations
Maximum payments
Note At Chimes option, share based payments can
be paid in cash
17

Review of strategic progress
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Overall strategy

• In the global marketplace for marketing
  communications, it is predicted that diversified
  communications will exceed advertising
  expenditure for the first time in 2007.
• Chimes strategy since 2006 has been to develop
  the modern diversified communications group by
• building leading businesses with above average
  growth potential
• eg. public affairs, public relations, sports
  marketing, digital communications, research and
  consultation
• building a differentiated proposition across the
  Group focused on reputation
• promoting the value of reputation management as
  equal to brand management.
• Group M - July 2006

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3 year plan 2006 - 2008

• Overall objective to double pretax profits in 3
  years

54 of growth from organic 46 by
acquisition
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Strategic progress key performance indicators
Average fee per client
(Original three year plan objective 50)
(Original three year plan objective - 70,000)
Operating profit margin
International income
(Original three year plan objective - 18)
(Original three year plan objective increase)
30
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International

• Healthy growth in income anticipated to continue
  especially in the Middle East and Germany
• Owned offices developed on a client led/revenue
  led basis and used as lily pads for other chime
  offerings
• eg. Fast Track opening in Abu Dhabi and VCCP
  opening in Doha through existing Bell Pottinger
  offices
• Targeting multinational work in a global economy
  not just brands and corporate but political
  leaders, governments and countries

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Extending our strategic plan

• Key performance indicators extended for the next
  three years as follows
• maintain double digit growth in operating income
  and profits
• target double digit growth in earnings per share
• increase the value of shared income across the
  Group with an objective of achieving 75
• continue to target the highest margin in the
  sector 18 (after central costs)
• improve the average fee per client to 80,000 pa
• grow our international business to between 40
  and 50 of total income
• grow our digital income to at least 20 of total
  income

23

Outlook
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Outlook 10 reasons to be optimistic

• New product development
• New business wins already in 2008
• Sectoral change in public relations
• Fast Track
• Public affairs
• International
• Search
• London Organising Committee of the Olympic and
  Paralympic Games
• Crisis communications and government work
• Control of fixed costs

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Appendices
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Some of our leading clients
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Five year trading history
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For further information please contact Chris
Satterthwaite or Mark Smith on 020 7861 8515 or
go to www.chime.plc.uk