SOURCE: LBI International AB (publ.)

February 26, 2010 02:38 ET

Strong operating performance in key markets as recovery momentum builds

STOCKHOLM, SWEDEN--(Marketwire - February 26, 2010) - LBi - the global digital marketing and technology agency today announces its fourth quarter and year-end results 2009

Fourth quarter highlights

Net sales came in at EUR 34.6 million, an increase from EUR 33.8 million during the third quarter 2009, reflecting continued progress at both management and operational level across key markets

Adjusted EBITDA for the fourth quarter 2009 was EUR 5.0 million; EBITDA margin 14.4%

Strong performance in UK: EBITDA 27% quarter on quarter improvement realising a margin of 23%; US performance delivered adjusted EBITDA of EUR 2.0 million, a quarter on quarter improvement of 82%

Central and Southern Europe significantly underperformed relative to a very strong result in Q4 2008 We are confident of making good steady progress throughout 2010.

Strong operational cash flow EUR 10.9 million

Earnings per share in the fourth quarter came in at EUR 0.08 (0.07) and for the full year EUR -1.03 (0.15). The board proposes that no dividend payments are made for 2009

Announced merger with Obtineo will create largest marketing and technology agency in Europe, uniquely positioned to drive further consolidation in the industry

Financial highlights

EUR million

                       Oct-    Oct-   Change at Jan-    Jan-    Change at
                       Dec     Dec    constant  Dec     Dec     constant
                       2009    2009    rates*   2009    2008     rates*
Net sales              34.6    39.0    -11.2%   137.5   160.4   -11.5%
EBITDA                  3.9     5.6              12.9    21.3
EBITDA adjusted**       5.0     5.6    -15.7%    18.1    19.9   -10.6
EBITDA margin
 adjusted**            14.4%   14.2%             12.4%   13.4%
Impairment                -       -             -68.9       -
EBIT                    2.5     3.6             -63.1    12.5
Net result              4.9     4.4             -63.1     9.5
Earnings per share     0.08    0.07             -1.03    0.15

*  Change rates reflects year-on-year comparisons, adjusted for exchange
   rate fluctuations
** January-December 2009 excludes EUR 4.7 million restructuring costs and
   EUR 0.5 million related to prior years acquisitions, divestments and
   liquidation of entities in Italy, Belgium and United Kingdom.
   January-December 2008 excludes a EUR 1.4 million non cash gain during
   Q1 2008 on dissolvement of three dormant entitities in the Netherlands,
   whose businesses have been transferred to LBi Lost Boys.

A word from the CEO

2009 was a dynamic and challenging year for LBi as the business continued to suffer the adverse effects of the global economic crisis. In the first part of the year we experienced lower demand and slower decision-making on the client side. In the second half we saw demand for our services gradually increasing again. We ended the fourth quarter with group results that reflect the significant progress we have made at both a management and operational level across key markets. At the same time, we continued to extend our service offering and further improved the quality of services, both of which have contributed to the gradual recovery of our group EBITDA margin to pre-crisis levels.

In particular, we made significant operational improvements in two of our key regions, the UK and US, over the year. For the UK this resulted in an EBITDA margin of 23% percent and a growth in EBITDA of 14% (at constant rates) over the same period last year, a great performance in challenging business conditions. The US delivered an 82% (at constant rates) increase in EBITDA and a 21% EBITDA margin in the fourth quarter.

The evolution of the business across our Central and Southern European region is more tentative. While our digital operations in Germany have grown significantly quarter on quarter, the branding specialist MetaDesign continues to under-perform relative to expectation. MetaDesign is the most cyclical part of our business. We anticipate a strong recovery this year based on improvements in the weighted pipeline, better sector coverage and an acceleration in automotive spend from a historic low. Other markets in Central Europe performed broadly in line with expectation and we anticipate further improvement in 2010.

In the Nordic region we have struggled to rebuild revenues and, as a consequence, we have changed the management structure at both a regional and country market level. We also recently completed the acquisition of Triple Copenhagen, which is a significant step in our plan to revitalise top-line growth for the entire region. The new management team will take over day-to-day operations in Copenhagen, strengthening our strategic capabilities in the entire region and further expanding our position as market leader in the Nordics.

Outside Europe we continue to expand our footprint organically. In the last quarter we opened larger offices in both Beijing and Dubai to satisfy growing demand for our services.

Finally, I am delighted that we recently announced that LBi and Obtineo will shortly merge to form Europe's largest marketing and technology agency. Obtineo delivers sizeable funding and, most significantly, Europe's pre-eminent search engine marketing company, Bigmouthmedia. The new combination will have over 1800 people across 15 countries and a new primary listing on NYSE Euronext in Amsterdam. The new company will have a fully integrated digital marketing offering and is uniquely positioned to benefit from the trend for blue chip clients to demand a single agency to service both their digital customer acquisition and retention requirements.

The newly-obtained funds provided by Obtineo and the anticipated additional funds of the underwritten rights issue will be used primarily to extend our global service offering, particularly in the US and Asia where we see the most compelling growth opportunities for the years to come.

Luke Taylor, CEO

LBi Q4: http://hugin.info/86897/R/1388883/347139.pdf

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