• Revenue Decline: Decreased by 7% or GBP 2.8 million compared to the first half of last year.

• Operating Expenses: Increased due to dual running of old and new models.

• Highlighted Items: GBP 2.5 million, down from GBP 3.4 million in the previous year.

• Net Debt: GBP 15.3 million as of June 30, 2024, similar to GBP 15 million a year ago.

• Leverage: 1.6 at mid-year, expected to decrease to 1.2 by year-end.

• Regional Revenue: Declines in UK & Ireland and Continental Europe; no growth in North America; slow growth in Asia Pacific.

• Second Half Outlook: Expected mid-single-digit revenue growth and double-digit adjusted operating profit growth year-on-year.

• Client Wins: New business from Airbnb, UBS, and others; regained Haleon.

• Transformation Costs: Expected to decrease in the second half with some severance costs remaining.

• Warning! GuruFocus has detected 4 Warning Signs with FRA:YO4.

Release Date: October 02, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ebiquity PLC (FRA:YO4) has experienced a strong tailwind in new business activity from Q2 onwards, leading to an improved trajectory for the second half of the year.

• The company has a full pipeline, providing a strong start into 2025, with 88% of full-year expected revenue already secured.

• Ebiquity PLC has successfully reorganized its operating model to become more scalable, focusing on technology-enabled services and global consistency.

• The company has made significant progress in rolling out its GMP365 data management platform, with increased client activity and identified delivery hour savings.

• Ebiquity PLC has expanded its client base with new global logos such as Airbnb and UBS, and has extended relationships with existing clients like Disney and BMW.

Negative Points

• Ebiquity PLC faced a disappointing first half of the year, with a 7% decline in revenue compared to the previous year, impacting profits and compressing margins.

• The company experienced challenges in North America, failing to convert new business opportunities and losing clients, which affected growth in the region.

• There were increased operating expenses due to dual running of old and new models, impacting financial performance during the transition period.

• Net debt remained stable at GBP15.3 million, contrary to expectations of a reduction, due to lower trading performance and exceptional cash outflows.

• The transition of Benchmarking services onto the GMP365 platform has faced obstacles, requiring modifications to cater for local market nuances, delaying expected efficiencies.