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Financial summary

Financial Summary

2016 2015 Change %
Billings1 £55,245m £47,632m +16.0
Revenue £14,389m £12,235m +17.6
Net sales1 £12,398m £10,524m +17.8
Headline EBITDA2 £2,420m £2,002m +20.8
Headline operating profit2 £2,095m £1,705m +22.9
Reported operating profit £2,063m £1,632m +26.4
Headline PBIT2 £2,160m £1,774m +21.8
Net sales margin2 17.4% 16.9% +0.5*
Headline PBT2 £1,986m £1,622m +22.4
Reported PBT 1,891m £1,493m +26.7
Headline earnings2 £1,468m £1,229m +19.4
Reported earnings £1,400m £1,160m +20.7
       
Headline diluted earnings per share2,3 113.2p 93.6p +20.9
Reported diluted earnings per share3 108.0p 88.4p +22.2
Ordinary dividend per share 56.60p 44.69p +26.7
Ordinary dividend per ADR4 $3.83 $3.42 +12.0
       
Net debt at year-end £4,131m £3,211m +28.6
Average net debt5 £4,340m £3,562m +21.8
Ordinary share price at year-end 1,816.0p 1,563.0p +16.2
ADR price at year-end $110.66 $114.74 -3.6
Market capitalisation at year-end £23,260m £20,237m +14.9
       
At 12 April 2017


Ordinary share price 1,737.0p

ADR price  $108.60

Market capitalisation £22,214m

The financial statements have been prepared under International Financial Reporting Standards (IFRS).

1 Billings and net sales are defined in the financial glossary.

2 The calculation of ‘headline’ measurements of performance (including headline EBITDA, headline operating profit, headline PBIT, net sales margin, headline PBT and headline earnings) is set out in note 31 of the financial statements PDF (1.07MB).

3 Earnings per share is calculated in note 9 of the financial statements PDF (1.07MB).

4 One American Depositary Receipt (ADR) represents five ordinary shares. These figures have been translated for convenience purposes only using the Consolidated income statement exchange rates shown on page 12 of the financial statements PDF (1.07MB). 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.

5 Average net debt is defined in the financial glossary.

* Margin points.

Revenue £m

Revenue. 2012: £10,373m, 2013: £11,019m, 2014: £11,529m, 2015: £12,235m, 2016: £14,389m.

14,389m

Reported revenue was up 17.6% at £14,389 million. On a constant currency basis, revenue was up 7.2% and, on a like-for-like basis, revenue was up 3.0%.

Net sales £m

Net sales. 2012: £9,515m ,2013: £10,076m, 2014: £10,065m, 2015: £10,524m, 2016: £12,398m.

12,398m

Reported net sales were up 17.8% at £12,398 million. On a constant currency basis, net sales were up 7.4% and, on a like-for-like basis, net sales were up 3.1%.

Headline PBIT1 £m

Headline PBIT. 2012: £1,531m ,2013: £1,662m, 2014: £1,681m, 2015: £1,774m, 2016: £2,160.
  • Net sales margin1 %

2,160m

Headline PBIT was up 21.8% to £2,160 million, over £2 billion for the first time. Net sales margin was up 0.5 margin points (0.3 margin points on a like-for-like basis) to an industry-leading 17.4%.

Headline EBITDA1 £m

Headline EBITDA. 2012: £1,756m ,2013: £1,896m, 2014: £1,910m, 2015: £2,002m, 2016: £2,420.

2,420m

Headline EBITDA (headline earnings before interest, taxation, depreciation and amortisation) rose by 20.8% (8.0% in constant currencies).

Return on equity2 %

Return on equity. 2012: 13.6% ,2013: 14.4%, 2014: 15.0%, 2015: 16.3%, 2016: 16.2%.
  • Weighted average cost of capital (WACC)

16.2%

Return on equity decreased marginally to 16.2% in 2016, versus a weighted average cost of capital of 6.4% in 2016, also down from 2015.

Headline diluted earnings per share1 p

Headline diluted earnings per share. 2012: 73.4p, 2013: 80.8p, 2014: 84.9p, 2015: 93.6p, 2016: 113.2.
  • Dividends per share p

113.2p

Headline diluted earnings per share were up 20.9% to 113.2p. Dividends were up 26.7% to 56.60p per share, giving a payout ratio of 50%, reaching the targeted payout ratio of 50% one year ahead of schedule.

1 The calculation of ‘headline’ measurements of performance (including headline EBITDA, headline PBIT, net sales margin and headline earnings) is shown in note 31 of the financial statements PDF (1.07MB).

2 Return on equity is headline diluted earnings per share divided by equity share owners’ funds per share.

Average net debt £m

Average net debt. 2012: £3,203m ,2013: £2,989m, 2014: £3,001m, 2015: £3,562m, 2016: £4,340.
  • Average net debt to headline EBITDA2 ratio

4,340m

Average net debt was up at £4.3 billion in 2016, primarily reflecting the weakness of sterling. The average net debt to headline EBITDA ratio remains under 1.8 times, almost in the middle of the Group’s target range of 1.5-2.0 times.

Debt maturity3 £m

Debt maturity.2019: £719m, 2020: £200m, 2021: £658m, 2022: £405m, 2023: £641m, 2024: £608m, 2025+: £2,201m.

In September 2016, the Group issued £400 million of 30-year bonds with a coupon of 2.875%, refinancing £400 million of bonds maturing in April 2017 with a coupon of 6.0%.

2016 revenue by geography %

2016 revenue by geography: North America 42%, UK 12%, Western Continental Europe 16%, Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 30%
  • North America37
  • UK13
  • Western Continental Europe20
  • Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe30

In 2016, 30% of the Group’s revenue came from Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe up almost one percentage point from 2015. Our target is to increase this to 40-45% of revenues over the next five years.

2016 headline PBIT1 by geography %

2016 headline PBIT1 by geography: North America 42%, UK 12%, Western Continental Europe 16%, Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 30%
  • North America42
  • UK12
  • Western Continental Europe16
  • Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe30

Profit growth was strongest in Western Continental Europe in 2016, with margin improvement across all regions in the year.

2016 revenue by sector %

2016 revenue by sector: Advertising and Media Investment Management 46%, Data Investment Management 18%, Public Relations & Public Affairs 8%, Branding & Identity, Healthcare and Specialist Communications 28%
  • Advertising and Media Investment Management46
  • Data Investment Management18
  • Public Relations & Public Affairs8
  • Branding & Identity, Healthcare and Specialist Communications28

Marketing services comprised 54% of our revenues in 2016, similar to 2015. Revenue growth was strongest in Advertising and Media Investment Management at almost 5% on a like-for-like basis.

2016 headline PBIT1 by sector %

2016 headline PBIT1 by sector: Advertising and Media Investment Management 48%; Data Investment Management 16%; Public Relations & Public Affairs 8%; Branding & Identity, Healthcare and Specialist Communications 28%
  • Advertising and Media Investment Management48
  • Data Investment Management16
  • Public Relations & Public Affairs8
  • Branding & Identity, Healthcare and Specialist Communications28

All sectors showed margin improvement in 2016, with the strongest growth in Data Investment Management and Public Relations & Public Affairs.

1 The calculation of headline PBIT is set out in note 31 of the financial statements PDF (1.07MB).

2 The calculation of headline EBITDA is set out in note 31 of the financial statements PDF (1.07MB).

3 Includes corporate bonds and bank loans payable at par value, excluding any redemption premium due, by due date.