Demand for relevant information, targeted distribution and qualitative decision
support is rising
In 2007 Cision took important steps toward its goal to be the world leader in media monitoring. Our aim to be the obvious partner to communicators is based on an ability to create distinct, measurable value for our clients.
Aside from the steps we have taken, market factors have contributed to this positive development. The growing importance of brands and its direct impact on business is increasing the need to understand media images. Furthermore, technological developments and globalization have raised the number of media sources and their reach. This is leading to higher demand for monitoring of broadcast media and new sources such as blogs, and thus on the ability to quickly validate and present relevant information.
Cision’s services that provide relevant information, targeted distribution and qualitative decision-support were a driving force during the year.
Important strategic goals reached in 2007
During the year we strengthened our offering while at the same time improving our processes. Cision now meets the market’s needs with a global brand, new, integrated services and greater digitalization, so that it can quickly and accurately provide the market’s most qualitative full-service solutions for professional communicators.
The launch of our new name and trademark – Cision – took place during the second quarter. After having been a leader in several markets with various names and services, we stand united today in a global, coordinated organization under a shared brand. This has increased our appeal among large and global clients, as confirmed by the large number of new agreements that were initiated and signed with global companies and organizations in the second half of 2007.
The new generation of the CisionPoint software launched in the US last fall – and which will be launched in a number of other countries in 2008 – marks a step toward a fully integrated solution comprising all our services. CisionPoint creates value for clients while supporting the transition to a largely subscription-based business model. The launch of CisionPoint also improves our operating efficiency by reducing the number of technical platforms.
Our expansion to Asia is another example of how we are growing Cision into a global player for global companies. In 2007 we opened a sales office in Hong Kong and a production office in Shanghai.
Business development and a clear focus have produced results
Our focus on large international companies and organizations and an integrated client offering began to produce results in 2007. We are growing strongly in priority areas such as international services and analysis services, even though organic growth for the entire business was a modest 1 percent for the year. This is due to a decline in print monitoring, though also to the transition to new services we launched in a number of markets. Our long-term financial growth objective of 6 percent remains firm.
During the year we generated operating profit excluding restructuring expenses of SEK 232 million, which is 14 percent higher than the previous year. Our total revenue was SEK 1,873 million, with currency effects negatively affecting revenue by SEK 64 million. The operating margin rose to 12.4 (10.6) percent.
The positive profit trend is the result in part of higher demand and an improved margin on our services in ”Plan”, ”Connect” and ”Analyze”. In the Nordic market, the service areas have now grown to the point where they together account for a larger share of revenue than the services in “Monitor.”
Through the current cost-cutting program, we managed to reduce total costs despite significant investments in business development and new services. Among the biggest investments were the development and launch of the new generation of CisionPoint in North America, the establishment of the company Atodia to provide digital information for the Nordic market, branding work and the expansion to Asia
Our agenda also includes a gradual shift in Cision’s business model toward more stable revenue streams. The launch of CisionPoint is an important step in this regard. The payment model in CisionPoint consists of subscriptions based on fixed prices. For us, this means less dependence on the content and volume of news flows, more stable revenue and better cash flow. At year-end the share of revenue from subscriptions and other recurring revenue sources was more than 55 percent.
In 2008 our services will be even more important for clients
Continued globalization and rapid technological developments are creating growing demand in our market. More digital media sources mean greater potential for new services and profitable growth, though also more competition from current and new players in the market. We believe the integrated CisionPoint offering and our international strength give us a competitive advantage while the same time making us less sensitive to economic fluctuations.
Professional management of images, reputations and brands will continue to increase in importance. Through our position and offering, we can offer effective services for media monitoring and reputational management. We help our clients to be more successful.
I would like to thank all our employees for their fine efforts during a very eventful and successful year. During the year we strengthened our offering and underscored Cision’s role as a provider that creates measurable value for its clients.
Stockholm, February 2008
Niklas Flyborg
President and CEO