`Saatchi & Saatchi'; Preliminary Audited Results For The Year Ended 31 December 1999.Business Editors LONDON--(BUSINESS WIRE)--March 9, 2000 Saatchi Saatchi may refer to:
-- Over $1 billion of gross new billings won in 1999 and $735m net
(1998:$425m)
-- Ongoing revenue of (pound)390.3m (1998 restated: (pound)346.8m),
a 12.5% increase and 11.0% at constant exchange rates
-- Ongoing operating profit up 25.4% to (pound)35.5m (1998 restated:
(pound)28.3m) and 23.3% at constant exchange rates
-- Trading margin, for ongoing businesses including joint venture
income, up to 10.5% (1998 restated: 9.2%)
-- EPS, excluding exceptional items, increased by 34.2% to 10.6p
(1998 restated: 7.9p)
Bob Seelert, Chairman of Saatchi & Saatchi plc, commented: "1999 was a strong year for us. Our new business performance led the industry and we have both met and exceeded our corporate goals thereby delivering further value to shareholders. A buoyant Buoyant The term used to describe a commodities market where the prices generally rise with ease when there are considerable signals of strength. Notes: These types of markets can be very volatile as the prices are rapid to rise and fall with investor sentiment. advertising market and positive economic outlook leads me to believe that we can look forward to the coming year with confidence."
SAATCHI & SAATCHI PLC
1999 Trading Update
Overview of the Year In 1999 Saatchi & Saatchi made progress in winning new business, building more profitable business and increasing shareholder value. We won over $1billion of new business and net gains were $735m on an annualised basis. Advertising Age International ranked Saatchi & Saatchi number 1 in its 1999 global new business league table -- beating all other worldwide networks. Our largest international accounts continued to provide the agency with a steady stream of new product launches, line extensions and account consolidations. Of new clients won in 1999, Sony SONY Standard Oil of New York (common, but untrue; it's an urban legend) Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). was the largest and
provides Saatchi & Saatchi with an outstanding international brand
in the consumer electronics sector. Entering as one of our top ten
clients, Sony will reinforce re·in·forcev. 1. To give more force or effectiveness to something; strengthen. 2. To reward an individual, especially an experimental subject, with a reinforcer subsequent to a desired response or performance. 3. the business mix of our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations. Other new client wins included major assignments from Celebrity Cruises Celebrity Cruises is a cruise line founded in 1989 by the Greek Chandris Group. In 1997 Celebrity Cruises Ltd. merged with Royal Caribbean International to become Royal Caribbean Cruises Ltd., which operates Celebrity and the Royal Caribbean International line. , Preussen Elektra and Unum Unum (NYSE: UNM) is a Chattanooga, Tennessee-based insurance company previously named UnumProvident, which was formed from the merger of two competing insurance companies, Unum of Portland, Maine, and Provident of Chattanooga. Provident prov·i·dent adj. 1. Providing for future needs or events. 2. Frugal; economical. [Middle English, from Latin pr to name but a few. Saatchi & Saatchi is benefiting from its exposure to the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . Our on-line business, which includes such activities as internet banner advertising Banner Advertising A common form of advertising on the internet. The banner is an advertisement of 460x68 pixels, usually placed at the top of the page Notes: For an example, just look at the top of a page on almost any popular web site. , production and consulting, has increased 150% during the year and now constitutes 2.5% of our revenues. A further 5.5% of our revenues now comes from e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. companies. This sector enjoyed explosive explosive, substance that undergoes decomposition or combustion with great rapidity, evolving much heat and producing a large volume of gas. The reaction products fill a much greater volume than that occupied by the original material and exert an enormous pressure, growth last year and delivered over $200m of incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. billings Billings, city (1990 pop. 81,151), seat of Yellowstone co., S Mont., on the Yellowstone River, in a valley surrounded by seven mountain ranges; inc. as a city 1885. . Healthcare is another sector that grew strongly. This was mainly due to increased advertising spending in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. following the lifting of certain restrictions on drug advertising. In order to maximise Verb 1. maximise - make the most of; "He maximized his role" maximize exploit, tap - draw from; make good use of; "we must exploit the resources we are given wisely" 2. our exposure to this sector we solidified so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our diverse healthcare capability into a cohesive cohesive, n the capability to cohere or stick together to form a mass. network of specialist agencies in the US and Europe. If we treated our combined healthcare business as a single client it would now rank as our third largest. Group Revenue and Operating Profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. Revenue excluding joint venture revenue was (pound)400.7m (1998: (pound)380.1m) an increase of 5.4%. Ongoing revenue was up 12.5% to (pound)390.3m (1998: (pound)346.8m) and adjusted for exchange rate movements increased by 11%. Excluding acquisitions, ongoing revenue increased by 5.9% at constant exchange rates -- greater than the market rate of growth. Operating profit increased by 10.2% to(pound)34.6m (1998:(pound)31.4m). Ongoing operating profit increased 25.4% to(pound)35.5m (1998 restated: (pound)28.3m) and was up by 23.3% on a constant exchange rate basis. North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. In North America ongoing revenue increased 13.0% to (pound)192.4m (1998: (pound)170.3m). Growth at constant exchange rates was 10.3%. This highlights a continued improvement in the region's new business activity, additional spending by existing clients on new product launches and the impact of increasing levels of advertising spend in the dot.com See dot-com. and healthcare sectors. Operating profit increased by 29.1% to (pound)26.6m (1998: (pound)20.6m). On an underlying basis profit increased by 25.5%. UK In the UK ongoing revenue decreased 1.2% to (pound)57.5m (1998: (pound)58.2m) as accounts lost and resigned due to conflict situations were not totally offset by new business wins. Operating profit decreased slightly by 7.9% to (pound)7.0m (1998: (pound)7.6m). Rest of Europe, Africa and Middle East Ongoing revenue in the Rest of Europe increased 1.0% to (pound)71.2m (1998 restated: (pound)70.5m) and showed growth of 2.3% at constant exchange rates. There was growth in the major markets of Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). (26%), Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. (25%) and Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. (17%) although France was flat. Ongoing revenue in some of the smaller markets, Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. , Holland and Portugal Portugal (pôr`chəgəl), officially Portuguese Republic, republic (2005 est. pop. 10,566,000), 35,553 sq mi (92,082 sq km), SW Europe, on the western side of the Iberian Peninsula and including the Madeira Islands and the Azores in the , declined due to client losses. Operating profit in Europe was down 21.4% and by 18.5% on a constant exchange basis. Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). In Asia-Pacific ongoing revenue increased 7.1% to (pound)51.2m (1998 restated: (pound)47.8m) and had underlying growth of 4.1%. Revenues in Greater China increased by 2.0%. Within the Asia Pacific region, Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. represent 42% of revenues, Greater China 39%, Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). 12% and others 7%. Asia-Pacific achieved a small profit of (pound)0.1m, a turn around from the 1998 loss of (pound)2.7m. Zenith Zenith Media revenues grew by 16.0% and showed growth of 15% at constant exchange rates. A strong new business performance included HSBC's $150m global media business and the consolidation of Mars' $150m UK media buying. These and many other wins have increased the amount of third party revenue now handled by Zenith to 66%. Trading Margin (before exceptional items) 1999 trading margins, including joint venture income from Zenith, improved to 10.0% (1998: 9.2%). The margin for ongoing business improved to 10.5% (1998 restated: 9.2%). Non-Operating Items (pound)0.2m of pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta profit was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to businesses sold or closed down by the Group in 1999 (1998: (pound)6.1m). Financial Items Net interest payable and similar charges were (pound)4.0m (1998 restated: (pound)6.3m). The net interest expense on external borrowings was (pound)3.1m (1998: (pound)4.6m). Saatchi's share of the joint ventures' interest income was (pound)0.9m (1998: (pound)0.3m). In 1999 the Company adopted the net present valuation concept under FRS FRS abbr. Fellow of the Royal Society FRS, n “flexed rotated side-bent,” an osteopathic abbreviation used to describe vertebral position in cases of spinal dysfunction. 12 "Provisions, Contingent Liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. and Contingent Assets Contingent Asset An asset in which the possibility of ownership depends solely upon future events uncontrollable by the company. Notes: An example might be a settlement from a lawsuit. See also: Asset, Balance Sheet, Contingent Liability, Liability ." This requires that, where the time value of money is material, the amount of a provision is the present value of the expected future expenditures. The Group's long-term liabilities Long-Term Liabilities Recorded on the balance sheet, a company's liabilities for leases, bond repayments and other items due in more than one year. Notes: A company's long-term liabilities are accounted for by its debt obligations to other parties which last longer than have been restated on a net present value basis resulting in a prior year adjustment of (pound)10.7m. The impact on the Profit and Loss Account is shown in net interest -- (pound)1.8m (1998 restated:(pound)2.0m). Tax In both years, there were no tax charges on the non-operating exceptional items. Excluding these items the full year tax charge of (pound)11.3m (1998 restated: (pound)9.7m) represented a tax rate of 31.3% (1998 restated: 33.8%). The Group's share of the joint ventures' tax was (pound)2.1m (1998:(pound)1.3m). Cash Flow Net cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. from operating activities was (pound)32.7m after adding back depreciation and amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. of (pound)14.3m and deducting (pound)0.2m profit from the sale of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , (pound)6.1m of property provisions and a negative working capital movement of (pound)9.9m. Net interest and tax outflows amounted to (pound)7.3m and net dividends paid were (pound)1.2m. Capital expenditures on tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. fixed assets totalled (pound)11.3m. The net impact of acquisitions and disposals was an inflow of (pound)1.4m. An employee trust purchased the Company's shares at a cost of (pound)1.9m to hedge the cost of employee share schemes. The exercise of options and receipts under the Executive Incentive Plan generated (pound)1.6m. The Company paid down debt of (pound)7.1m. The net increase in cash for the year was (pound)6.3m. The average cash for the month of December December: see month. 1999 was (pound)5.9m (December 1998: debt of (pound)8.3m). Average net debt for the year was (pound)14.0m (1998: (pound)27.8m) and interest cover, net of exceptional items, was 10 times. Earnings Per Share Basic EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. increased 0.9% to 10.7p (1998 restated: 10.6p). EPS on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis decreased 2.9% to 10.2p (1998 restated: 10.5p). EPS, excluding exceptional items, increased 34.2% to 10.6p (1998:7.9p). On a diluted basis EPS, excluding exceptional items, increased 29.5% to 10.1p (1998: 7.8p). EPS excluding exceptional items, imputed interest Imputed Interest A term used to describe interest considered to be paid, even through no interest payment has been made. Notes: Imputed interest is calculated based upon actual payments that are to be paid, but have not yet been paid. and goodwill increased 32.6% to 11.4p (1998: 8.6p). On a diluted basis EPS excluding exceptional items, imputed interest and goodwill increased 28.2% to 10.9p (1998: 8.5p). Dividends An interim dividend of 0.6p was declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. and paid in 1999 (1998: nil). The Board recommends that a final dividend of 1.0p per Ordinary share be paid on 19 May 2000 to shareholders on the register at 14 April 2000. This makes 1.6p per Ordinary share for the full year (1998: 1.4p) Exchange Rates During the year Sterling strengthened slightly against the main European currencies but was volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. against the US Dollar ending the year slightly weaker. Exchange rates, therefore, had a relatively small impact on the results. Total Group revenue has benefited by 1.3% and total operating profit by 1.4% Business Outlook Zenith Media observed ob·serve v. ob·served, ob·serv·ing, ob·serves v.tr. 1. To be or become aware of, especially through careful and directed attention; notice. 2. in their most recent Advertising Spend Forecast that the world's economy is solidly on the path to recovery. The improving economic outlook is feeding consumer confidence and hence advertiser ad·ver·tise v. ad·ver·tised, ad·ver·tis·ing, ad·ver·tis·es v.tr. 1. To make public announcement of, especially to proclaim the qualities or advantages of (a product or business) so as to increase confidence. The pattern for 2000 and 2001 remains positive and their worldwide advertising expenditure forecasts have been revised upwards. The outlook for the United States, which accounts for 50% of Saatchi & Saatchi's revenues looks particularly good. In line with this we continue to feel optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the prospects for the company in the year to come.
SAATCHI & SAATCHI PLC
("Saatchi & Saatchi")
Preliminary Audited Results For The Year Ended 31 December 1999
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended Year ended(1)
Notes 31 Dec 1999 31 Dec 1998
(pound)m (pound)m
(Restated)
Revenue
Continuing businesses
and share of joint ventures 414.4 384.0
Acquired businesses 18.0 -
Disposed businesses 10.4 33.3
Less: share of joint ventures (42.1) (37.2)
Net group revenue 3 400.7 380.1
Net operating expenses (366.1) (348.7)
Operating profit
Continuing businesses 35.9 28.3
Acquired businesses (0.4) -
Disposed businesses (0.9) 3.1
Operating profit 3 34.6 31.4
Share of operating
profit in joint ventures 5.5 3.6
Total operating profit:
group and share of joint
ventures 40.1 35.0
Non-operating exceptional
items
Profit on disposal of
businesses 4 0.2 6.1
Profit on ordinary
activities before interest 40.3 41.1
Net interest (payable)/
receivable and similar items
Joint ventures 0.9 0.3
Imputed interest (1.8) (2.0)
Other 5 (3.1) (4.6)
Net interest (payable)/
receivable and similar items (4.0) (6.3)
Profit on ordinary
activities before tax 36.3 34.8
Tax on profit on ordinary
activities 6 (11.3) (9.7)
Profit on ordinary activities
after tax 25.0 25.1
Equity minority interests (1.5) (1.5)
Profit for the year 23.5 23.6
Paid and proposed Ordinary
dividends 7 (3.5) (3.1)
Retained profit for the year 20.0 20.5
Earnings per Ordinary share 8
Basic 10.7p 10.6p
Diluted 10.2p 10.5p
Earnings per Ordinary share
excluding exceptional items
Basic 10.6p 7.9p
Diluted 10.1p 7.8p
Earnings per Ordinary share
excluding exceptional items,
imputed interest and goodwill
Basic 11.4p 8.6p
Diluted 10.9p 8.5p
(1) The audited figures for the year ended 31 December 1998 have
been restated to reflect the impact of the adoption of FRS 12 and to
reflect the results of those businesses disposed of in 1999.
All the above figures relate to continuing operations.
SAATCHI & SAATCHI PLC
("Saatchi & Saatchi")
Preliminary Audited Results For The Year Ended 31 December 1999
CONSOLIDATED BALANCE SHEET
31 Dec 1999 31 Dec 1998(2)
Notes (pound)m (pound)m
(Restated)
Fixed assets
Intangible assets - goodwill 6.8 5.8
Tangible assets 75.9 77.3
Investment in joint venture:
Share of gross assets 2.3 1.6
Share of gross liabilities (2.1) (1.4)
Net share of joint venture assets 0.2 0.2
Other investments 12.5 12.4
95.4 95.7
Current assets
Work in progress 19.1 18.3
Debtors 270.2 243.4
Investments 0.6 0.2
Cash at bank and in hand 51.0 30.8
340.9 292.7
Creditors: amounts falling
due within one year 9 (374.4) (329.9)
Net current liabilities (33.5) (37.2)
Total assets less current
liabilities 61.9 58.5
Creditors: amounts falling
due after more than one year 9 (82.3) (94.1)
Provisions for liabilities and
charges
Investment in joint venture:
Share of gross assets 82.2 77.4
Share of gross liabilities (95.3) (91.1)
Net share of joint venture
liabilities (13.1) (13.7)
Other 10 (40.3) (44.3)
Total provisions for
liabilities and charges (53.4) (58.0)
Net liabilities (73.8) (93.6)
Capital and reserves
Called up share capital 22.4 22.3
Share premium account 105.2 103.9
Shares to be issued 1.8 1.6
Profit and loss account (207.7) (224.9)
Equity shareholders' deficit (78.3) (97.1)
Equity minority interests 4.5 3.5
Total capital employed (73.8) (93.6)
(2) The audited figures as at 31 December 1998 have been restated
following the adoption of FRS 12.
SAATCHI & SAATCHI PLC
("Saatchi & Saatchi")
Preliminary Audited Results For The Year Ended 31 December 1999
CONSOLIDATED CASH FLOW STATEMENT
Year ended Year ended
Notes 31 Dec 1999 31 Dec 1998
(pound)m (pound)m
Reconciliation of operating
profit to net cash inflow
from operating activities
Operating profit 34.6 31.4
Depreciation 13.6 13.8
Goodwill amortisation 0.7 0.2
Profit on sale of tangible
fixed assets (0.2) (0.2)
Net movement in working
capital (9.9) 0.7
Utilisation of property provisions (6.1) (7.2)
Net cash inflow from operating
activities 32.7 38.7
Net cash inflow from operating
activities 32.7 38.7
Dividends received from joint
ventures and associates 4.2 -
Returns on investments and
servicing of finance
Interest received 2.0 2.3
Interest paid and similar charges (4.7) (7.1)
Dividends paid to minorities (1.0) (0.1)
Net cash outflow on returns from
investments and servicing of finance (3.7) (4.9)
Taxation
UK tax paid (1.0) (0.7)
Overseas tax paid (3.6) (3.8)
Net tax paid (4.6) (4.5)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (11.3) (11.9)
Proceeds from sale of tangible
fixed assets - 0.2
Purchase of own shares by ESOP
trust (1.9) (4.9)
Purchase of other fixed asset
investments - (0.1)
Proceeds from sale of other fixed
asset investments - 0.6
Net cash outflow from capital
expenditure and financial
investment (13.2) (16.1)
Acquisitions and disposals
Purchase of subsidiary undertakings - (7.0)
Proceeds from sale of subsidiary
undertakings - 20.3
Cash acquired on purchase of
subsidiary undertakings 12 1.4 -
Cash in disposed subsidiary
undertakings - (1.2)
Demerger costs (0.4) (0.9)
Net cash inflow (outflow) from
acquisitions and disposals 1.0 11.2
Dividends
Equity dividends paid (4.4) (2.7)
Net cash inflow before use of
liquid resources and financing 12.0 21.7
Financing
Issued and to be issued ordinary
share capital 1.6 2.9
Reduction in facilities utilised (7.1) (33.7)
Capital element of finance lease
rental payments (0.2) (0.1)
Net cash outflow from financing (5.7) (30.9)
Increase (Decrease) in cash in
the year 11 6.3 (9.2)
SAATCHI & SAATCHI PLC
("Saatchi & Saatchi")
Preliminary Audited Results For The Year Ended 31 December 1999
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year Ended Year Ended
31 Dec 1999 31 Dec 1998
(pound)m (pound)m
(Restated)
Profit for the year 23.5 23.6
Translation
adjustment - owned
operations (6.3) 0.2
Translation
adjustment - joint
ventures (0.3) --
Total recognised
gains and losses
relating to the year 16.9 23.8
Prior year adjustment
arising from adoption
of FRS 12 10.7
Total recognised gains
and losses since last
annual report 27.6
SAATCHI & SAATCHI PLC
("Saatchi & Saatchi")
Preliminary Audited Results For The Year Ended 31 December 1999
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
The financial statements have been prepared on the basis of the
accounting policies set out on pages 49 to 51 of the Annual
Report and Accounts for the year ended 31 December 1998. During
the year the Group has adopted the new accounting standard FRS12
- "Provisions, Contingent Liabilities and Current Assets" and
FRS13 - "Derivatives and Other Financial Instruments:
Disclosures".
2. Exchange rates
The Group's principal trading currencies and the exchange rates
used are as follows:
Average rate Closing rate
1999 1998 1999 1998
US Dollar 1.62 1.66 1.61 1.66
Australian Dollar 2.51 2.64 2.46 2.71
French Franc 9.89 9.76 10.55 9.29
German Mark 2.95 2.91 3.15 2.77
Italian Lira 2,911 2,877 3,125 2,743
New Zealand Dollar 3.05 3.09 3.09 3.15
3. Geographical analysis of revenue and operating profit
1999 1998
(Restating)
Revenue Operating Revenue Operating
profit/ profit/
(loss) (loss)
(pound)m (pound)m (pound)m (pound)m
United Kingdom 57.5 7.0 58.2 7.6
North America 192.4 26.6 170.3 20.6
Rest of Europe,
Africa & Middle East 71.2 2.2 70.5 2.8
Asia Pacific 51.2 0.1 47.8 (2.7)
Latin America 18.0 (0.4) -- --
Ongoing businesses 390.3 35.5 346.8 28.3
Disposed businesses 10.4 (0.9) 33.3 3.1
400.7 34.6 380.1 31.4
1998 comparatives have been restated to exclude 1999 disposals from
ongoing businesses
Percentage increase/(decrease) in revenue and operating profit
from continuing businesses is as follows:
Revenue Operating profit
Constant Constant
Reported rates Reported rates
% % % %
United Kingdom (1.2) (1.2) (7.9) (7.9)
North America 13.0 10.3 29.1 25.5
Rest of Europe, Africa &
Middle East 1.0 2.3 (21.4) (18.5)
Asia Pacific 7.1 4.1 N/M N/M
Latin America -- -- -- --
Total Group 12.5 11.0 25.4 23.3
The geographical analysis of revenue and operating profit has
been prepared on a basis that reflects the management of the
operations of the Group.
Growth in continuing businesses is stated after eliminating the
effect of businesses no longer owned, exceptional items and the impact
of exchange rate movements.
4. Non-operating exceptional items
The net gain on disposals in 1999 was (pound)0.2 million. In
1999 the Group disposed of its interest in Cliff Freeman &
Partners for consideration of $4.6 million ((pound)2.8 million)
which resulted in a profit on disposal of (pound)1.0 million.
The costs of closure and divestiture of businesses in Japan,
Belgium and the Czech Republic, net of the partial release of a
provision upon the subletting of the Seigel & Gale UK offices,
resulted in a loss of (pound)0.8 million.
The net gain on disposals in 1998 was (pound)6.1 million. In
1998 the Group disposed of its interest in Siegel & Gale for
$33.8million ((pound)20.3 million) which resulted in a profit on
disposal of (pound)8.6million. The closure and divestiture of
businesses in Germany, Ireland, Norway, South Africa and Spain
resulted in a loss of (pound)2.5 million.
5. Net interest (payable)/receivable and similar items - other
1999 1998
(pound)m pound)m
Bank loans and overdrafts (4.3) (6.2)
Bank fees (0.8) (0.7)
(5.1) (6.9)
Interest receivable on cash and deposits 2.0 2.3
(3.1) (4.6)
6. Taxation
A significant proportion of the tax charge for both periods
related to overseas tax. The tax effect of non-operating
exceptional items was nil (1998: nil). Group share of tax of the
joint ventures was (pound)2.1 million (1998: (pound)1.3
million).
7. Dividends
An interim dividend of 0.6p was declared and paid during 1999
(1998: nil) at a cost of (pound)1.3 million. The Board has
recommended a final dividend of 1.0p net per Ordinary share
(1998: 1.4p) at a cost of (pound)2.2 million. The final dividend
is expected to be paid on 19 May 2000 to shareholders on the
register at 14 April 2000.
8. Earnings per ordinary share
Basic earnings per share have been calculated using earnings of
(pound)23.5 million (1998: (pound)23.6 million) and weighted
average shares in issue of 219.7 million shares (1998: 221.9
million shares). Diluted earnings per share have been calculated
using the same earnings on a weighted average of 230.3 million
shares (1998: 224.1 million shares). This takes into account the
exercise of share options issued to Group employees and
employees of Zenith, and contingently issuable shares, to the
extent that conditions have been met, which may be issued to
Group employees and employees of Zenith, where these are
expected to dilute earnings.
1999 1998
(Restated)
(pound)m Per share (pound)m Per share
Earnings 23.5 10.7p 23.6 10.6p
Profit on disposal of
businesses (0.2) (0.1p) (6.1) (2.7p)
Adjusted earnings excluding
exceptional items 23.3 10.6p 17.5 7.9p
Imputed interest, goodwill
and tax 1.8 0.8p 1.5 0.7p
Adjusted earnings excluding
exceptional items, imputed
interest, goodwill and tax 21.5 11.4p 19.0 8.6p
9. Other creditors
Due within Due after
one year one year
1999 1998 1999 1998
(Restated) (Restated)
(pound)m (pound)m(pound)m(pound)m
Loans and overdrafts 17.9 4.1 40.5 47.5
Finance leases and hire purchase 0.3 0.1 -- --
Trade creditors 240.8 202.3 -- --
Taxation and social security 17.6 12.7 19.1 21.6
Proposed dividend 2.2 3.1 -- --
Other creditors 95.6 107.6 22.7 25.0
374.4 329.9 82.3 94.1
10. Provisions for liabilities and charges - other
This included property provisions of (pound)32.2 million (1998
restated: (pound)35.3 million).
11. Analysis of changes in cash and net debt
At At
At
31 Dec cash 31 Dec
1998 flows 1999
(pound)m (pound)m (pound)m
Cash at bank and in hand 30.8 20.2 51.0
Overdrafts (3.3) (13.9) (17.2)
Net cash 27.5 6.3 33.8
External debt less than one year (0.8) 0.1 (0.7)
External debt over one year (47.5) 7.0 (40.5)
Finance leases (0.1) (0.2) (0.3)
Financing (48.4) 6.9 (41.5)
Net debt (20.9) 13.2 (7.7)
12. The effects of acquisitions and disposals of subsidiaries in 1999
Acquisitions Disposals
(pound)m (pound)m
Goodwill 3.2 --
Tangible fixed assets 2.3 (1.3)
Investments 0.5 --
Debtors 27.0 --
Cash 1.4 --
34.4 (1.3)
Provision for
liabilities and charges -- 0.2
Creditors 34.4 (1.7)
Net profit on disposals -- 0.2
Cost of acquisitions -- --
34.4 (1.3)
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 1999 and
1998, but is derived from those accounts. Statutory accounts for 1998
have been delivered to the Registrar of Companies, and those for 1999
will be delivered following the Company's Annual General Meeting. The
auditors have reported on those accounts: their reports were
unqualified and did not contain statements under section 237 (2) or
(3) of the Companies Act 1985.
When published, the Company's Annual Report and Accounts will be
sent to shareholders and will be made available to the public at the
Company's registered office.
Saatchi & Saatchi plc is registered in England and Wales (Number
2464197) and its registered office is 83/89 Whitfield Street, London
W1A 4XA.
The above information was approved by the Board of Directors on 8
March 2000.
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