LBi - the global digital marketing and technology agency today announces its first quarter results 2010
Executive Summary
Positive momentum in US and UK markets drives LBi's revenue growth and margin improvement

First quarter highlights
Net sales up 6.1% to EUR 36.5 million, reflecting continued strong progress at both commercial and operational levels across the US and the UK, with markets in continental Europe being more hesitant.

Adjusted EBITDA (excluding restructuring charges related to headcount and property rationalisation) increased by 24.4% to EUR 4.5 million, reflecting an improvement of adjusted EBITDA margin to 12.4%.

Particularly strong EBITDA performance in most advanced US and UK markets, where clients are increasingly shifting spend to agencies that blend direct response, data and digital skill sets

Central and Southern Europe remains more tentative. Rebound in German and Nordic markets; Netherlands performing well; LBi are confident of good steady progress throughout 2010.

Earnings per share in the first quarter came in at EUR -0.01 (-0.04).

Good progress on merger with Obtineo; approval obtained from LBi shareholders paves way for creating the largest marketing and technology agency in Europe; completion and new NYSE Euronext listing scheduled for July 2010.

A word from the CEO
This is a good first quarter for 2010 with year-on-year revenues and EBITDA growing by 6.1% and 24.4% respectively at constant rates. Our performance reflects the positive momentum in our most mature UK and US markets and the start of recovery in other territories.

In the quarter, we saw significant year-on-year growth in key UK and US markets, both for topline and EBITDA. The revenue growth in the UK and US came in at 14% and 25% respectively at constant rates. Furthermore UK EBITDA adjusted increased by 32% and US EBITDA adjusted increased by 38% at constant rates compared to the first quarter of 2009. The improvements demonstrate the success of our service extension strategy. Our offer is proving to be highly relevant in advanced markets where buyers are increasingly shifting spend to agencies that blend direct response, data and digital skill sets.

Performance in Central & Southern Europe remains more tentative. Revenues for the region were down 8% at constant rates. Our Dutch operations continued to track well to plan and our digital activities in Germany are well ahead of targets and flourishing. However, as anticipated, our German branding business Meta continued to struggle in difficult market conditions. We firmly believe that from Q2 onwards Meta will start to deliver strong incremental quarter-on-quarter improvement over the rest of the year. This confidence is driven by improved revenue visibility, an increase in inbound order values and significant recent new business success.

In our smallest region, the Nordics, we saw a strong rebound with revenues and profits up 22% and 308% respectively at constant rates year-on-year. This was a consequence of management changes, acceleration in spending across our existing client base and solid momentum driven by the integration of Triple in Copenhagen, which we acquired in February this year.

Clients have responded very positively to the recent merger with Obtineo and the consequent ability to deliver best in class search engine marketing into all our key markets. In the quarter, we have immediately started to initiate cost savings and synergies attributable to merger. To this end, we recorded EUR 2.5 million of restructuring costs relating mainly to headcount reduction and property rationalisation in areas where we are consolidating all functions and operations. The merger completion process, the intended delisting from Nasdaq OMX in Stockholm and the preparations for the new primary listing on NYSE Euronext Amsterdam are all tracking well to plan.

The full transaction, including the attached rights issue is expected to be completed in the course of the summer period. The future funds to be provided by Obtineo and the intended rights issue give us the opportunity to strengthen our leading position in online marketing and technology services and enable us to accelerate our growth strategy.

Luke Taylor, CEO