Ebiquity — Expanding offering in wider geographies

Ebiquity (AIM: EBQ)

Last close As at 29/02/2024

35.50

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Market capitalisation

49m

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Research: TMT

Ebiquity — Expanding offering in wider geographies

Ebiquity reported strong FY22 results, with revenue and operating profits increasing in line with expectations. The complexity of the media market provides a supportive backdrop to its offering, designed to help brand owners optimise the efficiency of their marketing spend. The acquisitions of US-based MMi and Swedish-based Media Path in FY22 significantly scale Ebiquity’s potential revenue base, while productisation, efficiency gains, and the transition to a common technology platform give a clear path to improving margins. The company also announced the forthcoming retirement of CFO, Alan Newman, with the search for his successor well underway. The share price remains at a significant discount to peers.

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

TMT

Ebiquity

Expanding offering in wider geographies

FY22 results

Media

12 April 2023

Price

51.5p

Market cap

£60m

Net bank debt (£m) at 31 December 2022

9.1

Shares in issue

116.1m

Free float

82.4%

Code

EBQ

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(1.9)

(4.6)

(27.5)

Rel (local)

(2.0)

(4.8)

(27.4)

52-week high/low

71.5p

43.0p

Business description

Ebiquity is a leading, independent global media consultancy, working for over 70 of the world’s 100 leading brands to optimise their media investments.

Next events

AGM

May 2023

Analyst

Fiona Orford-Williams

+44 (0) 20 3077 5739

Ebiquity is a research client of Edison Investment Research Limited

Ebiquity reported strong FY22 results, with revenue and operating profits increasing in line with expectations. The complexity of the media market provides a supportive backdrop to its offering, designed to help brand owners optimise the efficiency of their marketing spend. The acquisitions of US-based MMi and Swedish-based Media Path in FY22 significantly scale Ebiquity’s potential revenue base, while productisation, efficiency gains, and the transition to a common technology platform give a clear path to improving margins. The company also announced the forthcoming retirement of CFO, Alan Newman, with the search for his successor well underway. The share price remains at a significant discount to peers.

Year
end

Revenue
(£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

EV/EBITDA
(x)

12/21

63.1

4.1

2.7

0.0

19.6

10.3

12/22

76.0

8.0

4.5

0.0

11.8

6.3

12/23e

85.5

11.1

5.6

0.0

9.4

4.9

12/24e

96.5

13.7

6.5

0.0

8.0

4.2

Note: *PBT and EPS are normalised and fully diluted, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Revenues shift towards higher-margin service lines

FY22 revenue was ahead by 20% y-o-y, +9% y-o-y organic, with adjusted operating profit margin up from 7% to 12%. Media Performance revenues rose 33% (66% of group revenue), reflecting the acquisitions plus organic growth. Here, Digital Media Solutions grew 76%, helping lift group operating margin from 8% to 12%. By geography, North America moved into profit on revenues more than double FY21 year, aided by the acquisition of MMi on top of 73% organic growth. As a result, the North American group revenue share rose from 9% to18%. Continental European operating margin rose from 24% to 30%, reflecting the inclusion of Media Path and efficiency gains. Asia Pacific (FY22 organic growth: 18%) remains a key focus given the size of regional advertising budgets. As previously flagged, statutory results carried £15.2m of highlighted items. The largest element was the increase in the final deferred consideration for Digital Decisions following strong performance.

Balance sheet comfortably within covenants

Net bank debt at end FY22 was £9.1m, slightly more than our modelled £8.0m due to timing effects of working capital across the year-end, representing 25% gearing. Contingent acquisition payments for Digital Decisions are due in FY23 (we assume 50:50 cash: shares), comfortably covered within covenants on the group’s revolving credit facility. Net debt should start reducing in FY24, barring further M&A.

Valuation: Substantial discount persists

Ebiquity’s valuation remains at a marked discount to its marketing services peers. Parity with averaged FY23e and FY24e P/E, EV/EBITDA and EV/EBIT multiples suggests a value of 73p. This is well ahead of the current price but below the 97p in our February update, reflecting the roll-forward of year and weaker peer share price performances. Our February MediaWatch report showed Ebiquity’s rating at a 70% discount to its long-term average EV/EBITDA.

FY22 results show transformative impact of acquisitions, organic growth and margin gains

Organic revenue growth was 9% in FY22, with the impact of the acquisitions (from April 2022) lifting that figure to 20%. The prior year adjusted operating margin was 18.2% pre unallocated costs (post: 7.5%). The uplift to 20.9%/12.2% is therefore significant, driven by the benefits of scale following the acquisitions, increasing contribution from digital products in the mix and careful control of costs.

Exhibit 1: Summary results by geography

Revenue £000s

Change

Adjusted operating profit (£000s)

Adjusted operating margin

UK & Ireland

31,528

(2.3%)

6,552

20.8%

Continental Europe

21,855

25.9%

6,449

29.5%

North America

13,310

139.2%

913

6.9%

Asia Pacific

9,280

17.6%

1,943

20.9%

Total

75,973

20.4%

15,857

20.9%

Unallocated

(6,587)

(8.7%)

Total

9,270

12.2%

Source: Company

Reporting now by geography

The historical segmentation had been becoming less meaningful as the group’s business expanded and shifted in nature. Ebiquity is therefore now reporting by geographical segment, which better reflects the internal group management, although it is worth noting that this is geography by client billing, rather than necessarily representative of where the work is done. With an increasing use of mutualised resources across media operations centres in various territories, the geographic segmentation of operating profit may not be an accurate representation of the dynamics of the business in future periods.

Exhibit 2: FY22 revenue by geography

Exhibit 3: FY22 adjusted operating profit

Source: Company

Source: Company

Exhibit 2: FY22 revenue by geography

Source: Company

Exhibit 3: FY22 adjusted operating profit

Source: Company

In terms of service line, the addition of revenues from MMi and Media Path meant that the Media Performance practice climbed to 66% of group in FY22 (higher on an annualised basis). The digital offering within this was, unsurprisingly, the fastest growing portion, with Digital Media Solutions growing 76% and delivering an adjusted operating margin of over 50%.

Breadth of service offering

Ebiquity’s target market is the world’s largest advertisers and it currently serves more than 70 of the top 100 by advertising spend. The acquisition of MMi has facilitated a scaling up of the group’s presence in the United States, the world’s largest market, where it now counts 19 of the 25 largest advertisers in that market as its clients.

Exhibit 4: Operational key performance indicators (KPIs)

As at 31 December

2020

2021

2022

Number of clients buying one or more products from the digital solutions portfolio

10

28

55

Digital advertising impressions analysed on the platform

112bn

639bn

1400bn

Value of digital advertising analysed on the platform

$0.5bn

$3.0bn

$6.6bn

Number of countries where new digital portfolio served

50

87

91

Number of clients buying two or more service lines

58

76

97

% revenue derived from digital services

25%

29%

32%

Source: Company

The Media Path acquisition brought with it a scalable technology platform, GMP365, which is helping drive a transformation of Ebiquity’s service deliverability in terms of both functionality and speed.

The group KPIs, illustrated above, are all about driving deeper client relationships, making the service more integrated into client workflow and hence increasing stickiness, as well as delivering greater utility for the client.

Growth from roll-out of existing offering and innovation

The full benefit of the acquisitions is yet to be achieved, with it still being very early days for the realisation of £5m of synergy benefits identified through to FY25.

In terms of operational enhancements, the company reported that benefits already delivered in FY22 were in line with its plans. The group is building on the success of its Madrid shared-services centre and moving to a global delivery model instead of the current local market basis. This will also support the transfer of work to the GMP365 platform and the delivery of synergy benefits. This should make meaningful improvements to the scalability of the offering and the delivery timescales.

From a geographical perspective, there is still much to be done to develop the group’s presence in the large North American market, although with each service enhancement there is a step-up in visibility. Through a land-and-expand approach, the opportunity is clearly substantial. The other key opportunity for Ebiquity is in Asia Pacific, where the market for determining media spend efficacy is far less developed. The group has established businesses in China and Singapore, and it initiated an organic start-up in India at the end of FY21. Indonesia, Hong Kong and South Korea are all potential strong market opportunities.

Product enhancement is a continuous process, and in terms of new initiatives within the productised digital media solutions, there is good progress in ESG through the group’s Responsible Media offering, which is eliciting a lot of interest from advertisers anxious to protect their brand integrity. Key areas for current development are:

Advanced TV solutions. This market is much more developed in the United States, but there are issues around the accuracy of audience measurement and, reportedly, a large amount of fraud and misreporting of ad impressions.

Commerce media solutions. This market is taking off very fast, but with little consensus on performance measurement and multiple service providers lacking the ability to look – independently – across the full landscape.

Our FY23 forecasts for revenue and PBT are broadly unchanged (revenue trimmed 1%, PBT trimmed 3%) on publication of the FY22 results. We have now introduced provisional forecasts for FY24, predicated on revenue growth of 13% and a further uplift in adjusted operating margin to 15.6% (FY23e: 14.6%) as the mix shifts further towards the digital products and scale effects continue to contribute. End-FY23 net bank debt is modelled at £10.7m post the further earnout payments, which we assume are met 50% in shares, 50% in cash, reducing to £4.3m at end FY24.

Exhibit 5: Financial summary

£000s

2020

2021

2022

2023e

2024e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

31-Dec

31-Dec

31-Dec

31-Dec

31-Dec

Revenue

 

 

55,907

63,091

75,973

85,500

96,500

Cost of Sales

(31,219)

(7,525)

(7,220)

(7,000)

(7,500)

Gross Profit

24,687

55,566

68,753

78,500

89,000

EBITDA

 

 

1,797

6,834

11,051

14,300

16,850

Operating profit (before amort. and excepts.)

 

 

(334)

4,738

9,270

12,500

15,100

Amortisation of acquired intangibles

(1,122)

(1,065)

(2,739)

(3,250)

(3,100)

Highlighted items

(3,325)

(8,291)

(15,168)

(3,436)

0

Share-based payments

1,906

(459)

(553)

(553)

(553)

Reported operating profit

(2,875)

(5,077)

(9,190)

5,261

11,447

Net Interest

(875)

(862)

(1,352)

(1,383)

(1,383)

Joint ventures & associates (post tax)

0

0

0

0

0

Forex

(137)

229

49

0

0

Profit Before Tax (norm)

 

 

(1,346)

4,105

7,967

11,117

13,717

Profit Before Tax (reported)

 

 

(3,887)

(5,710)

(7,201)

7,681

13,717

Reported tax

150

(1,206)

(261)

(2,779)

(3,429)

Profit After Tax (norm)

(1,372)

2,368

7,042

8,337

10,288

Profit After Tax (reported)

(3,737)

(6,916)

(7,462)

4,901

10,288

Minority interests

(186)

(117)

(33)

22

45

Discontinued operations

220

0

0

0

0

Net income (normalised)

(1,557)

2,251

7,009

8,359

10,333

Net income (reported)

(3,703)

(7,031)

(7,495)

4,923

10,333

Average Number of Shares Outstanding (m)

81.6

82.6

109.0

127.6

135.0

EPS - normalised (p)

 

 

(1.9)

2.7

5.4

6.6

7.7

EPS - normalised fully diluted (p)

 

 

(1.9)

2.7

4.5

5.6

6.5

EPS - basic reported (p)

 

 

(4.8)

(8.5)

(6.9)

3.9

7.7

Dividend per share (p)

0.00

0.00

0.00

0.00

0.00

EBITDA Margin (%)

3.2

10.8

14.5

16.7

17.5

Normalised Operating Margin

-0.6

7.5

12.2

14.6

15.6

BALANCE SHEET

Fixed Assets

 

 

44,322

40,297

62,663

71,472

67,622

Intangible Assets

34,698

32,700

55,867

64,926

61,276

Tangible Assets

8,199

6,054

4,597

4,347

4,147

Tax, receivables, Investments & other

1,425

1,543

2,199

2,199

2,199

Current Assets

 

 

35,610

36,482

46,509

41,879

51,494

Stocks

0

0

0

0

0

Debtors

24,318

21,934

33,163

30,921

34,185

Cash & cash equivalents

11,121

13,134

12,360

10,818

17,168

Other

171

1,414

986

141

141

Current Liabilities

 

 

(22,189)

(30,473)

(41,975)

(41,091)

(47,772)

Creditors

(15,986)

(26,265)

(39,448)

(37,479)

(42,302)

Tax and social security

(1,953)

(1,642)

(1,121)

(1,121)

(1,121)

Short term borrowings (incl. positive loan fees)

45

0

0

0

0

Other incl lease liabilities

(4,295)

(2,566)

(1,406)

(2,491)

(4,349)

Long Term Liabilities

 

 

(26,997)

(23,302)

(30,935)

(30,935)

(29,078)

Long term borrowings

(19,675)

(18,000)

(21,500)

(21,500)

(21,500)

Other long term liabilities

(7,322)

(5,302)

(9,435)

(9,435)

(7,578)

Net Assets

 

 

30,746

23,004

36,262

41,325

42,266

Minority interests

442

269

302

302

302

Shareholders' equity

 

 

30,304

22,735

35,960

41,023

41,964

CASH FLOW

Operating Cash Flow

1,797

6,834

11,051

14,300

16,850

Working capital

4,171

4,431

(6,984)

1,563

(2,059)

Exceptional & other

(3,325)

(1,718)

(3,000)

(4,572)

(2,999)

Tax

(2,285)

(2,492)

(1,871)

(2,779)

(3,429)

Net Operating Cash Flow

 

 

358

7,055

(804)

8,512

8,363

Capex

(1,316)

(1,200)

(449)

(1,000)

(750)

Acquisitions/disposals

(2,118)

(1,971)

(17,020)

(15,787)

0

Net interest

(550)

(619)

(768)

(1,383)

(1,383)

Equity financing

0

34

14,374

7,900

0

Dividends

(444)

(157)

0

0

0

Other

0

134

0

0

0

Net Cash Flow

(4,070)

3,276

(4,667)

(1,758)

6,230

Opening net debt/(cash)

 

 

5,610

8,509

4,866

9,140

10,682

FX

117

(372)

564

0

0

Other non-cash movements

1,055

739

(171)

216

120

Closing net debt/(cash)

 

 

8,509

4,866

9,140

10,682

4,332

Source: Company accounts, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Ebiquity and prepared and issued by Edison, in consideration of a fee payable by Ebiquity. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Ebiquity and prepared and issued by Edison, in consideration of a fee payable by Ebiquity. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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EMIS Group — Deal to proceed, pending Phase 2 investigation

The Competition and Markets Authority (CMA) has rejected the remedy proposed by United Health (the bidder) and EMIS to reduce the risks to competition and has announced it is launching a Phase 2 investigation into the acquisition. The bidder and EMIS have confirmed they will proceed with the Phase 2 investigation. Due to the investigation, they have extended the long stop date for the deal and extended the period during which EMIS shareholders will be entitled to dividends by one year.

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