SOURCE: LBI International AB (publ.)

February 12, 2009 08:44 ET

LBi Announces Fourth Quarter and Year-End Results 2008

STOCKHOLM, SWEDEN and AMSTERDAM, THE NETHERLANDS--(Marketwire - February 12, 2009) - LBI International AB ("LBi"), the global digital marketing and technology agency, today announces its fourth quarter and year-end results 2008. See link below to download the report.

Mr Luke Taylor (CEO), Mr Theo Cordesius (EVP) and Mr Huub Wezenberg (acting CFO) will comment on the results and market developments during a conference call for press, analysts and investors. The conference call will start at 09.30 CET.

Details for the conference call:
Access Number:          +31 (0)20 717 68 68
Participant Pincode:    67960870#

Executive summary

--  Good overall performance in the fourth quarter given the deteriorating
    economic environment and the material adverse currency effects
    
--  Strong new business performance in the fourth quarter in the main
    offsets contraction in spend across existing accounts
    
--  Net sales in the fourth quarter increased by 21.7% at constant rates
    and amounted to EUR 39.0 million (36.6) year-on-year. Organic growth is
    pressured by ongoing rebalancing of portfolio and move to higher margin
    retained business
    
--  Net sales for January-December increased by 9.7% at constant rates
    while EBITDA grew by 37% year-on-year
    
--  Fourth quarter EBITDA came in at EUR 5.6 million, a more than doubled
    improvement at constant rates, translating into an improved EBITDA margin
    of 14.2% (6.7%)
    
--  Earnings per share in the fourth quarter came to EUR 0.07 (0.07) and
    EUR 0.15 (0.18) for the full year (January - December). The Board will not
    propose any dividend for 2008
    
--  Abu Dhabi office opening in the quarter to boost global offering and
    improve exposure to fast growing markets
    
--  Huub Wezenberg (acting CFO) appointed as new Chief Financial Officer
    LBi International
    
--  For 2009 LBi expects that the continued migration of spend from off-
    line to online will partly mitigate the contraction in overall marketing
    spend. New business success is also expected to help off-set any further
    shrinkage of budgets with retained clients
    

Luke Taylor, CEO: In Q4 2008 we recorded an EBITDA result of EUR 5.6 million, a margin of 14.2% on revenues of EUR 39.0 million. EBITDA for the full year was EUR 21.3 million, an improvement of 37.0% at constant rates. This is a good performance given the backdrop of a rapidly deteriorating economic environment and material adverse currency effects.

Most markets in which LBi is active performed broadly in line with expectations. The quarter was characterized by a rise in project cancellations and some retained clients postponing projects or reducing marketing spend. These developments combined with our continued and deliberate focus on quality of earnings pressured the top-line performance. At the same time we won a significant amount of new business during the period. Across our markets we saw some exceptional local and inter-country performances and LBi secured significant wins against global competition. New international mandates include ING, E-concern, Electrolux and Puma. A number of these engagements started in Q4 and the strong new business performance was therefore able to offset the contraction in spend across several existing key accounts.

Against this backdrop of uncertainty, the majority of markets were able to adequately protect, and in some markets even improve margins. In most regions EBITDA levels are now typically in line with our target threshold of 18%: UK EBITDA was 20.5%, Central and Southern Europe 17.9%, the Nordic region 16.6%. The US however disappointed at 13.2%. The revenue decline in this region was quite precipitous and earnings were further adversely affected by a one-off project overrun, for which adequate measures are now in place. In order to further boost our global offering and improve our exposure to fast-growing markets, we successfully opened a new office in Abu Dhabi to serve demand in the UAE region.

2009 is at the moment difficult to call, Q1 is traditionally a weaker quarter and this year will be no exception. In all regions business conditions are expected to become more challenging. Most retained clients have to date recommitted to previously agreed levels of spend, but continued uncertainty and organizational unrest within marketing departments could still impact both budgets and project momentum leading to further pressure on the revenue line in the short term.

Looking further ahead it is vital that our strong new business record is able to broadly of-set any significant shrinkage of budgets with retained clients. We remain at all times confident of our ability to win large-scale strategic assignments through our global network. The increasing number of sizeable mandates awarded during Q4 2008 strengthens our conviction that client budgets are being diverted away from broadcast TV-based messaging into more accountable digital formats. With our differentiated and compelling digital offering we should therefore be able to perform reasonably well in these difficult economic circumstances.

In line with the past year, we will also continue to act quickly to right-size the organization and safeguard efficiencies. By doing this, we should be able to protect our strong margins going forward.

About LBi:

LBi is a global digital marketing and technology agency, blending insight, creativity and expertise to solve business problems. The largest genuinely full service agency of its kind in Europe, LBi provides the full range of digital capabilities, including digital strategy, branded content, service design, media, CRM, technology, managed hosting and support services. The Company employs over 1,600 professionals located primarily in the major European, American and Asian business centers; such as Amsterdam, Atlanta, Berlin, Brussels, London, Milan, Mumbai, New York, Paris and Stockholm. LBi is listed on Nasdaq OMX in Stockholm and NYSE Euronext in Amsterdam (symbol: LBI). www.lbi.com

LBi Year-end results: http://hugin.info/86897/R/1289749/290592.pdf

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