SOURCE: LBI International AB (publ.)

April 29, 2009 02:33 ET

LBi Q1 Results 2009 -- Protecting Margin in Testing Times

STOCKHOLM, SWEDEN and AMSTERDAM, THE NETHERLANDS--(Marketwire - April 29, 2009) -


LBi - the global digital marketing and technology agency today announces its first quarter results 2009

Protecting margin in testing times

Net sales the first quarter amounted to EUR 34.6 million compared to EUR 37.8 million last year, a decrease of 5.9% at constant rates, mainly due to slightly lower demand and slower decision making in the US and Central European markets.

Despite top line pressure, margins were protected as a result of cost efficiency measures and portfolio rebalancing.

Adjusted EBITDA (excluding one-time items) came in at EUR 3.8 million compared to EUR 2.2 million (adjusted) last year, representing an increase of 76.4% at constant rates. Adjusted EBITDA margin reached 10.9% compared to 5.7% last year.

Earlier announced strategic restructuring charge of EUR 3.8 million taken to lower the cost base. Annualised savings expected to exceed EUR 9 million.

Net result was EUR -2.5 million (-0.7).

Earnings per share in the first quarter 2009 were EUR -0.04 (-0.01).

Financial highlights

                                                                Change at
                                       Jan-Mar      Jan-Mar      constant
EUR million                              2009         2008        rates
                                     -----------  -----------  -----------
Net sales                                   34.6         37.8         -5.9%
                                     -----------  -----------  -----------
EBITDA                                       0.0          3.6
                                     -----------  -----------  -----------
EBITDA adjusted*                             3.8          2.2         76.4%
                                     -----------  -----------  -----------
EDITDA-margin adjusted*                     10.9%         5.7%
                                     -----------  -----------  -----------
EBIT                                        -1.7          0.6
                                     -----------  -----------  -----------
Net result                                  -2.5         -0.7
                                     -----------  -----------  -----------
Earnings per share                         -0.04        -0.01
                                     -----------  -----------  -----------

*First quarter 2009 excludes a EUR 3.8 million restructuring costs. First quarter 2008 excludes a EUR 1.4 million non cash gain on dissolvement of three dormant entitities in the Netherlands, whose businesses have been transferred to LBi Lost Boys

A word from the CEO

In the first quarter 2009 LBi recorded an adjusted EBITDA of EUR 3.8 million on net sales of EUR 34.6 million. This represents an EBITDA improvement of 76.4% over the same period last year at constant rates, with net sales showing a decline of 5.9% at constant rates. The result is adjusted and does not include the impact of a one-time EUR 3.8 million restructuring charge as announced on 6 April 2009.

Our revenue decline in Q1 has principally occurred as a consequence of a slowdown in decision making on the client side. While headline budgets for digital are broadly stable or even slightly up on last year billings, project momentum has been negatively impacted by recently accelerated organisational change within the client marketing function.

We expect pressure on the top line to continue in a number of our key markets and we therefore earlier announced the reduction of approximately 9% of the global headcount, representing 150 FTE. At the same time we decided to speed up the formation of the final phase of our organisational redesign. These combined actions across the group will have a significant structural impact on our cost base, annualised savings are expected to exceed EUR 9 million.

Following this restructuring, we believe the new organisation is now right sized to deliver a good EBITDA performance over the course of the year. While we expect the development of the top line to remain challenging, we are confident that we can protect and indeed improve our margin over the remaining quarters. The accelerated implementation of both the Central European and US East coast hub also further differentiates our offering. LBi in 2009 will emerge as one of the few full-service digital agencies truly constructed from the ground up to handle complex global agency of record accounts.

Luke Taylor, CEO

LBi Q1 2009: http://hugin.info/86897/R/1309442/302411.pdf

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