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FY2016 Fiscal Growth

Author: Mayer Becker
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NEWS

Year ended with significant turnover and EBIDTA growth; new annualised revenue

HH Global announced strong financial performance across all three operating regions for the fiscal year ending 31 March 2016. Turnover increased by thirty-seven per cent compared to the previous fiscal year, while adjusted EBITDA grew by sixty-one per cent. The company also announced a three-year growth strategy and key infrastructure improvements, as well as £55m in new annualised revenue. 

Robert MacMillan, Group CEO, said, “Our clients challenge us every day to deliver cost savings, process efficiencies, and innovation as we manage their marketing execution. Our proprietary HHub technology, combined with the depth of experience and knowledge of our people, have allowed us to meet that challenge successfully. As a result, we have had several major strategic client wins and renewed all existing contracts that were due to expire this year. That combination has fuelled our growth.”

MacMillan added, “As we enter our twenty-fifth financial year, the Executive Board are very bullish on our growth prospects. We’ve seen strong demand from large, global companies that want to focus on their core business. They are assigning procurement responsibilities to specialists like us who deliver guaranteed results in the form of cost savings and faster speed to market. To capitalise on this demand, the Executive Board adopted a three-year growth strategy with the goals of building up our infrastructure and strengthening our service offerings in order to continue to capture significant amounts of market share in the coming years.”

New Client Wins and Contract Extensions

A five-year contract win at Lloyds Banking Group was previously announced. HH Global closed major new contracts with leading global companies in the FMCG, consumer technology, automotive, and pharmaceutical sectors, including Samsung in EMEA and Unilever in Latin America.

As a result of the Unilever win in Latin America, HH Global is expanding its operations into four new countries in the coming fiscal year, including Chile, Colombia, Ecuador, and Peru.

In the U.S. market, HH Global added Shire Pharmaceuticals as a client. Andres White, US Marketing Services Lead for Shire said, “After the consolidation of our US commercial operations to Lexington MA, HH Global helped us streamline a fragmented print buying process, placed knowledgeable staff on-site to support our brands, standardised and leveraged our buying power, and delivered significant savings to our bottom line. All while supporting the promotional materials approval process with value-added editorial support to ensure we meet our compliance and regulatory guidelines.”

Existing clients Janssen Pharmaceuticals and Bayer AG, along with several others, renewed their contracts for additional terms. HH Global won new creative production assignments in EMEA, Asia Pacific, and the US, and opened design studios in Wakefield in the UK and San Francisco in the US to increase global capacity.

Global Financial Results

Edward Parsons, Group Chief Financial Officer, said, “Financial results were strongest in the Asia Pacific and Americas regions. The group’s annual turnover rose thirty-seven per cent to over £202m, and adjusted EBITDA increased sixty-one per cent to £7.6m.”

Operating
Region

Turnover
Growth

Adjusted EBITDA
Growth

EMEA

6%

7%

Americas

59%

54%

Asia Pacific

72%

86%

Table 1: Turnover and EBITDA growth by region (FY 2016 amounts subject to final audit.)

Parsons added, “We put in place financial improvement programmes during the year that reduced order-to-cash cycle times and as a result, improved cash flow. We are also deploying SAP Business One as our global financial system of record, allowing us to operate more efficiently.”

Technology Innovation

Transaction volume through the company’s proprietary marketing execution platform, HHub, increased 56 per cent, according to Chief Digital Officer, Kevin Dunckley. “We enhanced the e-Procurement module with QuickQuote,” said Dunckley, “which provides instantaneous pricing quotes for a basket of frequently purchased items, and completed integration of HHub with both SAP and Ariba to provide our clients with seamless two-way processing of procure-to-pay transactions. The SAP and Ariba integrations have resulted in streamlined and more automated processes for clients and HH Global itself. Thirty per cent of HH Global’s orders now come through the Ariba platform.”

Dunckley added, “We migrated our entire IT infrastructure to a new, highly secure and fully redundant platform, which was the largest IT infrastructure transformation project we’ve ever undertaken. We completed the project with zero business disruption and are now well positioned to support future accelerated growth."

Conclusion

“With our strong financial performance,” MacMillan concluded, “an experienced and motivated team, and continued investment in our infrastructure, we are well positioned to achieve our three-year strategy of doubling our turnover whilst tripling our Adjusted EBITDA.”