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Fast read: How we're doing

Financial summary*

  2007 2006 Change %
Billings £31,666m £30,141m +5.1
Revenue £6,186m £5,908m +4.7
Headline EBITDA1 £1,072m £1,002m +7.0
Headline operating profit1 £887m £822m +7.9
Reported operating profit £805m £742m +8.5
Headline PBIT1 £928m £859m +8.0
Headline PBIT margin 15.0% 14.5% +0.5
Headline PBT1 £817m £766m +6.7
Reported PBT £719m £682m +5.5
Headline diluted earnings per share1,3 46.0p 42.0p +9.5
Headline diluted earnings per ADR1,2,3 $4.63 $3.92 +18.1
Ordinary dividend per share 13.45p 11.21p +20.0
Ordinary dividend per ADR2 $1.35 $1.03 +31.1
Net debt at year-end £1,286m £815m +57.8
Average net debt4 £1,458m £1,214m +20.1
Ordinary share price at year-end 647.0p 690.5p -6.3
ADR price at year-end $64.29 $67.78 -5.1
Market capitalisation at year-end £7,709m £8,566m -10.0
At 16 April 2008    
Ordinary share price 616.0p    
ADR price $60.96    
Market capitalisation £7,241m    


* The financial statements have been prepared under IFRS (International Financial Reporting Standards, incorporating International Accounting Standards).
1 The calculation of 'headline' measurements of performance (including Headline EBITDA, Headline operating profit, Headline PBIT, Headline PBT and Headline earnings) is shown in Note 31 of the financial statement.
2 One American Depositary Receipt represents five ordinary shares. These figures have been translated for convenience purposes only using the income statement exchange rates shown in the Consolidated income statement. This conversion should not be construed as a representation that the pound sterling amounts actually represent, or could be converted into, US dollars at the rates indicated.
3 Earnings per share is calculated in Note 9 of the financial statement.
4 Average net debt is defined in financial glossary.

207 revenue by geography2007 headline PBIT by geography
2007 revenue by sector2007 headline PBIT by sector


1 Percentages are calculated on a constant currency basis. See definition in the financial glossary.
2 Headline PBIT: The calculation of Headline PBIT is set out in note 31 of the financial statements.

2007 results

Record results in our twenty-second year again reflect the continued steady strength of the world economy, despite the current credit and liquidity crisis, positively impacting almost all disciplines and geographies and the strength of the Group's operating brands and franchise. 2007 also saw an historically unprecedented run of new business wins across the Group, building a strong base for 2008.

Billings were up 5.1% at £31.7 billion. Reportable revenue was up 4.7% to £6.186 billion. Revenue, including 100% of associates, is estimated to total over £7.3 billion. On a constant currency basis, revenue was up 8.2%, chiefly due to the 8.6% decline in the US dollar against the pound sterling.

Headline earnings before interest, depreciation and amortisation rose 7.0% to £1.072 billion and 9.2% in constant currencies. Headline profit before interest and tax was up 8.0% to £928 million. Reported profit before interest and tax was up 8.1% to £846 million and up 10.0% in constant currencies. Headline profit before tax or profit pre-goodwill impairment, amortisation of acquired intangibles, investment gains and write-downs, revaluation of financial instruments and tax was up 6.7% to £817 million and up 8.8% in constant currencies. Headline operating margin (including income from associates) increased 0.5 margin points to a record 15.0% from 14.5%.

Diluted headline earnings per share were up 9.5% at 46.0p. In constant currencies, earnings per share on the same basis were up 13.6%. Diluted earnings per share rose by 8.0% to 38.0p and by 12.0% in constant currencies.

The final dividend increased to 9.13p per share, making a total of 13.45p per share for 2007, a 20% increase over 2006.

Sector and geographic performance

By discipline, Media Investment Management led the way, together with Public Relations & Public Affairs and Specialist Communications. Public Relations & Public Affairs continued to grow strongly, even at a late stage in the economic cycle. Advertising, Information, Insight & Consultancy, and Branding & Identity and Healthcare Communications also registered good performances.

Marketing services rose to almost 54% of our revenues in 2007, up from 52% in 2006. Advertising and Media Investment Management comprised the other 46%.

By geography, Asia Pacific, Africa and the Middle East, Latin America and Central and Eastern Europe led the way. The US showed surprisingly solid growth along with Spain. The only laggards were the UK, and to some extent France, although Germany and Italy showed some improvement. As a result, markets outside North America now account for over 62% of our revenues, up from 60% in 2006.

Net debt and cash flow

The Group's net debt increased to £1.286 billion at year end compared with £815 million at the end of 2006, largely reflecting acquisition spend and share repurchases. Cash flow strengthened as a result of improved working capital management and cash flow from operations.

Future objectives

We will continue to focus on our key objectives – improving operating profits and margins, increasing cost flexibility, using free cash flow to enhance share owner value and improve return on capital employed, continuing to develop the role of the parent company in adding value to our clients and people, developing our portfolio in high-revenue growth areas, both geographically and functionally, and improving our creative quality and capabilities.

Our letter to share owners can be read in full in How we're doing - Letter to share owners.

For more information see Operating & financial review - Competitive performance, Our 2007 financial statements - Accounting policies or visit