Annual report 2007
Contents
About Cision 2
2007 in summary 3
President’s Statement 4
Five-year summary 5
The share 6
Industry trends 7
Strategic direction 8
Offering & client value 9
Clients and market 10
Cision’s markets 11
Organization 12
Risks and risk management 13
Board of Directors’ report 15
Consolidated income statement 19
Consolidated balance sheet 20
Consolidated shareholders’ equity 21
Consolidated statement of cash flows 22
Parent Company income statement 23
Parent Company balance sheet 24
Parent Company shareholders’ equity 25
Parent Company statement of cash flows 26
Accounting principles and notes 27
Proposed distribution of earnings 46
Auditors’ report 47
Corporate governance 48
Internal control 51
Board of Directors 52
Senior Management 53
Notice of Annual General Meeting 54
Financial reporting dates 2008 54
Definitions and glossary 55
About the Annual Report 56
Cision in brief
About Cision
Nordic & Baltic, 27%
Rest of Europe, 31%
North America, 42% Monitor, 61%
Plan, 20%
Analyze, 14%
Connect, 5%
Partner for communicators
Cision is a global partner for communicators and consultants in PR, IR and marketing.
Global company with local expertise
Cision is a company with operations around the world and its head office in Sweden, with 2,600 employees and revenue of SEK 1,873 million in 2007.
Integrated services for the entire communication process
Cision’s services satisfy client demand for targeted distribution of communications, relevant media information and qualitative decision guidance.
Broad, international client base
Cision has approximately 30,000 clients around the world. The client base consists of both small and large listed and unlisted companies, organiza- tions, the public sector and consulting companies .
Revenue by region Revenue by service line
Egen marknadsnärvaro Marknadsnärvaro via partners
Cision in brief
2007 in summary
0 200 400 600 800 1,000
2005 2006 2007
Nordic & Baltic Rest of Europe North America Intäkter per region, Mkr
1)1) Excl other/eliminations Financial events
• Consolidated operating revenue amounted to 1,873 Mkr (1,915).
• Operating profit amounted to 179 Mkr (-612).
• The operating margin was 12.4 procent (10.6).
• Profit after tax amounted to SEK 80 million (-743).
• Earnings per share amounted to SEK 1.07 (-9.99).
• Cash flow from operating activities amounted to SEK 273 million (201).
The Group in brief 2007 2006
Operating revenue, SEK million 1,872.6 1,915.5
Operating profit
1), SEK million 231.5 203.7
Operating profit,SEK million 179.2 -612.3
Operating margin
1), % 12.4 10.6
Operating margin, % 9.6 -32.0
Operating cash flow, SEK million 272.5 201.2
Return on operating capital % 8.7 neg
Debt/equity ratio, % 54 61
Interest coverage, multiple 3.1 2.3
Earnings per share
2),SEK 1.07 -9.99
Dividend per share
3),SEK 0.25 –
Equity per share
2),SEK 17.25 16.78
1) Excl restructuring expenses and goodwill write-downs.
2) Before dilution.
3) Board of Directors’ proposed dividend for 2007.
0 50 100 150 200 250
2005 2006 2007
Nordic & Baltic Rest of Europe North America Rörelseresultat per region, Mkr
1)1) Excl restructuring expenses and goodwill write-downs Revenue by region
1), SEK million Operating profit by region
1), SEK million
Important events during the year
• Launch of new name and identity
• Launch of CisionPoint in North America
• Operations established in Asia
• Cooperation agreement with Oslo Børs
Cision in brief
President’s Statement
Demand for relevant information, targeted distribution and qualitative de- cision 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 distribu- tion 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, coordi- nated 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 of- fice 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 in- tegrated client offering began to produce results in 2007. We are growing strongly in priority areas such as international services and analysis ser- vices, 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 mar- kets. 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 pre- vious 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 to- tal 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 esta- blishment 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 im- portant 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 crea- ting 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 conti- nue to increase in importance. Through our position and offering, we can offer effective services for media monitoring and reputational manage- ment. 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 offe- ring and underscored Cision’s role as a provider that creates measurable value for its clients.
Stockholm, February 2008
Niklas Flyborg
President and CEO
Cision in brief
Five-year summary
Income statement
SEK in millions 2007 2006 2005 2004 2003
1)Operating revenue 1,872.6 1,915.5 1,776.3 1,613.6 1,544.1
Operating profit excl restructuring expenses and goodwill write-downs 231.5 203.7 175.1 193.8 223.6
Items affecting comparability
2)– – – – -27.0
Operating profit 179.2 -612.3 175.1 193.8 52.1
Profit before tax 118.8 -679.3 117.2 148.7 5.6
Tax -39.3 -63.7 -37.7 -33.6 -32.2
Net profit/loss for the year 79.5 -743.0 79.5 115.1 -26.6
Balance sheet
SEK in millions Dec. 31, 2007 Dec. 31, 2006 Dec. 31, 2005 Dec. 31, 2004 Dec. 31, 2003
1)Goodwill 1,879.2 1,921.6 2,888.9 2,389.6 2,395.8
Other fixed assets 273.0 275.8 288.7 231.4 222.5
Current assets 370.2 383.6 413.6 350.2 333.3
Tax assets 68.7 54.3 34.2 22.3 57.4
Liquid assets 131.7 127.9 137.3 98.3 145.0
Total assets 2,722.8 2,763.2 3,763.1 3,091.8 3,154.0
Shareholders' equity 1,285.6 1,249.1 2,148.0 1,785.0 1,774.8
Long-term liabilities 780.4 868.7 1,034.8 835.4 908.1
Tax liabilities 114.1 122.7 99.1 68.4 81.4
Current liabilities 542.7 522.7 481.2 403.0 389.7
Total shareholders' equity and liabilities 2,722.8 2,763.2 3,763.1 3,091.8 3,154.0
Key financial highlights
2007 2006 2005 2004 2003
1)Operating margin excl restructuring expenses and goodwill write-down, % 12.4 10.6 9.9 12.0 14.5
Profit margin, % 4.2 -38.8 4.5 7.1 -1.7
Return on equity, % 6 neg 4 6 neg
Return on operating capital, % 9 neg 6 7 9
Ditto excl restructuring expenses and goodwill write-down, % 11 9 6 – 8
Operating capital, SEK million 2,020.0 2,081.7 3,097.6 2,555.0 2,562.9
Ditto excluding goodwill, SEK million 140.7 160.1 208.7 165.3 167.4
Interest-bearing net debt, SEK million 688.9 763.9 913.9 731.7 764.2
Debt/equity ratio, % 54 61 43 41 43
Equity/assets ratio, % 47 45 57 58 56
Interest coverage, multiple 3.1 2.3 3.2 4.8 4.9
Non-restricted cash flow, SEK million 93.6 79.1 70.9 147.2 135.3
Operating cash flow, SEK million 272.5 201.2 162.6 209.8 254.2
Acquisition value of acquired operations, SEK million 4.4 12.6 198.6 97.9 190.9
Number of employees at year-end 2,521 2,759 2,743 2,647 2,454
Data per share
2007 2006 2005 2004 2003
1)Earnings per share before dilution, SEK 1.07 -9.99 1.12 1.64 -0.39
Earnings per share after dilution, SEK 1.07 -9.99 1.12 1.64 -0.39
Operating cash flow, SEK 3.66 2.71 2.30 3.00 3.70
Shareholders' equity before dilution, SEK 17.25 16.78 28.95 25.52 25.37
Shareholders' equity after dilution, SEK 17.25 16.78 29.01 25.61 25.96
Dividend
3), SEK 0.25 – – 0.45 0.45
Profit before dilution, SEK thousand 79,517 -742,893 79,461 115,072 -26,612
Profit effect from potential shares, SEK thousand – – – – –
Profit after dilution, SEK thousand 79,517 -742,893 79,461 115,072 -26,612
Average number of shares before dilution, thousand 74,538 74,351 70,657 69,957 68,078
Potential shares, thousands – 40 130 238 263
Average number of shares after dilution, thousand 74,538 74,391 70,787 70,195 68,341
Number of shares at year-end 74,544,418 74,453,572 74,203,725 69,957,325 69,957,325
1) Not restated in accordance with IFRS.
2) For 2003 the item refers to the cost-reduction program and conversion to new digitalization technology for print media.
3) Board of Directors’ proposed dividend for 2007.
Cision in brief
The share
Share price performance and trading
Cision’s shares are listed on the nordic exchange. Cision’s market ca- pitalization as of December 28, 2007 was SEK 1.3 billion. In 2007 ap- proximately 66.6 million shares were traded. The price of the Cision share changed by -56 percent during the year, from SEK 38.70 on December 29, 2006 to SEK 17.00 on December 28, 2007. During the same period the OMX SPI changed by -6 percent. In 2007 the share reached a high of SEK 39.70 and a low of SEK 17.00.
Share capital
The share capital in Cision AB amounted to seK 111,816,627, divided among 74,544,418 shares, each with a par value of SEK 1.50. All shares carry an equal right to the company’s earnings and assets and are entit- led to one vote each. a round lot consists of 500 shares.
Ownership structure
At year-end 2007 Cision had 16,959 shareholders, according to the re- gistry maintained by VPC AB (the Swedish Central Securities Depository).
Institutional investors such as pension funds and insurance companies owned 91 percent of the shares. Foreign investors owned 44 percent.
The ten largest shareholders had a combined holding of 53 percent of the shares. The number of shareholders decreased during the year.
Employee stock option program
In February 2001 an extraordinary general meeting voted to introduce a stock option program for Group employees. Allotments have been made during the years 2001, 2002 and 2003, with a maximum of 832,000 op- tions per year. Each option can be exercised for 1.068 shares after issue recalculations. The strike price was set at SEK 21.65.
The options are tied to employment and become void if the holder lea-
ves the company within two years of the allotment. The vesting period was two years. The options remained valid from February 2005 to February 2007. The option holder had the option to choose to subscribe for shares or sell the options for cash. The issuance of 90,846 new shares through the exercise of employee stock options increased shareholders’ equity by SEK 1,794 thousand. As of the balance sheet date all option programs had expired and no outstanding options remain.
Convertible debentures for senior executives
The Annual General Meeting 2007 resolved to initiate a performance- based incentive program by issuing not more than 700,000 convertible debentures to 13 members of Group Management. The issue price and nominal value of the convertibles have been determined as 113.3 percent of the volume-weighted average price of the Cision share during the period April 27–May 3, 2007, corresponding to market value. In total, 660,000 convertibles have been subscribed at a price of SEK 33.94. The total loan amount is SEK 22,400,400. The share capital may not increase by more than SEK 990,000. Upon request, each convertible can be converted to one new share in Cision AB during the period April 1–June 30, 2011.
The conversion price initially corresponds to the subscription price, but may be revised downward if the company fulfills certain financial objectives.
The targets are organic growth ≥ 6% and an operating margin (EBIT margin)
≥ 18% on a rolling 12-month basis. The targets are measured at eight me- asuring points at the end of each quarter during the period 2009–2010.
The Board intends to present a proposal for a new share-related incen- tive program to the AGM 2008 for adoption.
Analysts who continously cover Cision:
• Carnegie – Martin Arnell
• Enskilda Securities – Stefan Andersson
• Swedbank – Mikael Holm
• Handelsbanken – Rasmus Engberg Closing prices for the share
Year SEK per share
2002 34.00
2003 34.30
2004 35.00
2005 33.30
2006 38.70
2007 17.00
Shareholdings
No. Of sharehol-
ders
No. Of Shares
% of capital
% of votes
Market va- lue (KSEK)
1–500 13,962 1,561,921 2 2 26,553
501–1,000 1,402 1,098,543 1 1 18,675
1,001–10,000 1,360 3,969,207 5 5 67,477
10,001–50,000 138 3,241,519 4 4 55,106
50,001–100,000 24 1,704,001 2 2 28,968
100,001– 73 62,969,227 84 84 1,070,477
Total 16,959 74,544,418 100 100 1,267,255
Other shareholders, 9%
Foreign institutional investors, 44%
Swedish institutional investors, 47%
Shareholder structure, 2007 10 largest shareholders, 2007
Shareholders No. Of shares (%)
Fidelity 7,291,792 9.79
JP Morgan Chase bank 6,572,926 8.82
Handelsbanken fonder inkl XACT 5,571,339 7.47
Harris Associates L.P 5,497,300 7.38
Livförsäkringsaktiebolaget Skandia 4,662,094 6.25
S.W Mitchell Capital 3,804,764 5.10
MSIL IPB CLIENT ACCOUNT 3,796,028 5.09
EIKOS 3,690,000 4.95
INVESTORS BANK AND TRUST
CO/TREATY 3,206,700 4.30
Goldman Sachs 2,923,902 3.92
Subtotal 47,016,845 53.28
Other shareholders 27,527,573 46.72
Total 74,544,418 100
2003 2004 2005 2006 2007
125
100
75
50
25
0
OMXSPI Mid Cap PI Cision
Share performance 2003–2007
Operations
Industry trends
Global trends change the demands on communication
Powerful global trends are changing consumer demand and, as a result, our clients’ needs and actions. Globalization, technological development and the growing importance of business-critical information provide strong support for Cision’s efforts to create value for clients.
Growth in the global economy over the last 20 years has brought at least a billion people in Asia, Eastern Europe and Latin America into the market economy and increased democracy. This number continues to grow rapidly, accelerating demand for a market economy’s most valuable resource: information. Competition for consumers’ favor is constantly in- creasing, with growing demand for cost efficiencies, structural transforma- tion, innovation and market insight.
Power shifting to consumers
At the same time, a communication revolution is under way. Almost every- one will soon have access to the Internet and mobile phones. The amount of information is exploding and power is shifting to consumers.
Globalization and the information bombardment are changing the way companies and organizations communicate. Brand reputation is becoming one of the most important weapons in the global marketplace in the fierce competition for consumers’ attention. The volume of information avai- lable through a growing number of channels is making it more important than ever to clearly define what is important, react quickly to improprieties and maintain the best possible control over market reputations.
Positive drivers of Cision’s development
These megatrends point to an increasingly borderless information world.
They are the driving forces behind demand for Cision’s products and ser- vices. Companies and organizations must stay better informed about changes around them, and more quickly than ever before, to remain suc- cessful. In these efforts, brands are becoming an increasingly important platform for clients’ reputations and the success of their companies.
Cision’s growth strategies are based on these global trends. Its bu- siness model and product and service offerings are closely adapted to clients’ complex needs. The strategic importance of communication is growing and decisions on how it is managed are moving up the corpo- rate hierarchy. Comprehensive international solutions are required to con- trol and improve the efficiency of growing communication flows. Cision’s clients want relevant information quickly, at a cost that can be weighed against clear, measurable results.
Growing importance of brands
Companies with a good reputation have a lot of advantages. They can often charge more for their products and services. They find it easier to recruit the best employees. They are better able to manage crises. De- mand is increasing for communication tools that evaluate the strength of brands among a range of audiences. There is a growing need to be able
to measure and evaluate various communication strategies and activities in national and international markets.
Information clutter creates challenges
The tremendous increase in the number of media channels and communi- cation flows creates great challenges as well as opportunities. There is a growing need to identify business-critical information and to analyze and structure it as accurate decision guidance at a speed that offers compe- titive advantages. The ability to quickly monitor trends, competitors’ acti- vities, changes in the marketplace and buyer habits is taking on greater value. Quickly uncovering business opportunities or imminent crises can have a decisive effect on the bottom line.
Technological development increases demand while facilitating access to services
Digitalization creates new solutions to plan, distribute, process and analy- ze information. Clients are increasingly interested in digital sources, soft- ware solutions and services supplied through their intranets. Content and design are adapted to each client’s needs.
The Internet gives our clients new opportunities to broadly and accu- rately; simply and cost-effectively reach new and old target audiences.
It also provides new opportunities for effective dialogue and to gather information on consumers’ attitudes and behaviors.
The importance of the Internet is reinforced by the practically limitless opportunities for users to create and spread information. Individuals and businesses utilize the ability to spread negative and positive opinions about companies, products and services. This new form of information distribution and opinion making is a growing global force that is critical to any company’s or organization’s reputation. It requires greater attention, communication presence and control.
Cision well positioned
The impact of global megatrends makes communication and the media among the most dynamic areas of the global economy. As the only player in the industry with global capacity, Cision is well-positioned to capitalize on this to create value for clients and shareholders. Cision is continu- ously enhancing its offering to maintain leadership in integrated solutions for clients that work in an international environment where brands are growing in importance. Cision wants to be the best partner for effective communication that creates distinct, measurable value.
A growing need to plan, implement and evaluate communica- tion activities
Cision provides targeted information, accurate distribution and qualita- tive decision support Reputation
Globalization
Media clutter Social networking
Technological developme nt Digitalization
Greater competitive strength
Service Impact
Client demand Market factors
The industry’s drivers
Operations
Strategic direction
Strategic focus produces results
Cision’s strategic revision in 2006 reflects its aspiration to create greater value for clients and shareholders. The goal is to strengthen Cision’s posi- tion as a world leader in media monitoring and reputational management.
Cision wants to be the clear choice to partner with senior executives and professional communicators in large international companies and or- ganizations. Cision’s integrated, customized services make clients more competitive and provide measurable value.
Business concept
Cision improves clients’ performance through integrated services and software solutions for reputation and campaign management, media mo- nitoring and research of media contacts.
The Group’s work has focused on profitable growth through innovative, market-leading service development. Several objectives were achieved in 2007, contributing to Cision’s improved results. Following are some of the key steps that were taken:
Integrated, customized services create clear, measurable value
Cision offers clients integrated services with analyzed information. These services support the entire communication process. Cision annually in- vests 4 to 5 percent of its revenue in service development, a high figure in the industry.
In 2007 Cision launched a new generation of the CisionPoint service platform in the North American market. This “Software as a Service”
(SaaS) platform is unique. The fully integrated functions and a new user interface greatly increase the efficiency and quality of clients’ communi- cation work. Its reception has been very positive.
Another major focus during the year was the start of development work on CisionPoint for the European and Asian markets. This new generation will gradually reduce around twenty different technical platforms into one.
The launch is scheduled to begin in 2008.
Focus on large, international clients changes the client base and services By focusing more on large, international clients and integrated, customi- zed solutions, Cision is gradually changing the structure of its client base and services. This change is supported by the globalization trend among clients and is an important cornerstone in the business model. Reve- nue per client will rise through higher sales of value-added, knowledge- intensive, flexible solutions. This includes more revenue from integrated solutions and professional advice. The business model is aimed at a higher share of value-based sales with the more subscription-based and recurring revenue. The sales organization for this was strengthened in 2007 by recruiting sales experts with experience working at a strategic level in international environments.
In 2007 marketing and sales efforts were further intensified to in- crease the share of international projects. More clients want monitoring and integrated communications across multiple markets and regions of the world. Cision’s global service capacity and local expertise provide clients with value-added few other companies can match. Among new international clients are the hotel chain Rezidor, Yahoo, TeliaSonera and the International Red Cross.
The share of revenue from subscriptions and similar services reached 55 percent during the year. More clients are committed to systematic media monitoring coordinated and brand management for entire groups and larger market areas. A growing share of subscription services and
other recurring revenue sources will provide Cision with more consistent earnings and lessen its dependence on economic conditions.
Cision has its strength in a large base of existing clients, nearly 30,000 strong. The many profitable, growing clients are a major asset. Added sales from existing clients increased in 2007, also raising revenue per client. A sharper focus on profitability has also resulted in the phase-out of unprofitable contracts.
Strong position as a global partner through a distinct brand and expanded international presence
Cision is focusing on a standardized global offering under a uniform brand name and identity. Serving as a global partner offers clients advantages in terms of competence, cost and competitive strength. These same ad- vantages will benefit Cision and provide better leverage for international investments as well as a better geographical spread of risks. In addition to its growing presence in key markets, Cision has an international net- work of partners that gives it the industry’s best global coverage.
The name change to Cision and coordination under a uniform global identity was an important strategic step in 2007 that gives the company greater credibility as a global partner, improves the impact of its marke- ting and increases the value of its brand.
Cision’s international presence was strengthened in the Benelux countries in 2007 through the opening of the sales office in Amsterdam.
These markets were previously covered through cooperation agreements.
The number of global groups based in the Netherlands and Belgium and the dynamics of local demand motivated this move.
The Chinese market is becoming one of the global economy’s largest.
Most major multinationals are operating there, at the same time that do- mestic companies are rapidly globalizing. One of the main growth sectors is communications and media. To meet client demand, Cision opened a sales office in Hong Kong, along with a Group-wide production unit in Shanghai for international clients.
Improved internal efficiency makes Cision more competitive
The revised strategy stresses greater internal efficiency and cost con- trols. Processes are being streamlined and opportunities for better eco- nomies of scale are being utilized. The increased digitalization of services facilitates cost efficiencies.
A number of measures in 2007 contribute to greater efficiency. The new generation of CisionPoint launched in the US replaces around ten different technological platforms and provides greater efficiency poten- tial. The new unit in Shanghai will improve the production process used by group units internationally. During the year a new, uniform coding tool was introduced as well, to reduce coding costs associated for the growing number of articles in digital format.
During the year a new Group-wide purchasing function was established
as well. As a global leader in media monitoring and analysis, Cision has
a competitive advantage by being able to cost-effectively buy from the
best suppliers.
Operations
Offering & client value
Clearer value through effective communication
Effective communication is an increasingly important competitive factor for companies and organizations: to make better informed business de- cisions, to protect their good name and reputation, and to build brand va- lue. Cision develops and sells integrated services, products and software solutions that meet the needs of most clients to effectively control their growing communication flows.
CisionPoint – new service platform
CisionPoint, a new platform that integrates all of Cision’s services based on new software solutions and newly developed technology, was laun- ched during the year. With CisionPoint, clients have the best full-service solution to effectively manage and coordinate their entire communication process with support and advice from CisionPoint.
CisionPoint is a so-called Software as a Service (SaaS) platform, where clients access services through personal logins, their own intranet or ex- ternal websites. This gives them total access, regardless of where they happen to be. Clients are offered technical support, training, advice and qualitative support for maximum value.
CisionPoint is a strategic, client-driven response to the globalization of communication needs, the growing importance of brand management and rapid technological developments. It is also an important step in the development of Cision’s business model, to increase revenue through more fixed fees and subscriptions. And it gives clients a more predictable cost.
Integrated services create value
Cision creates value for clients through services designed for media plan- ning, distribution of information, media monitoring and analysis. Cision’s competence and solutions make it easy to effectively control communi- cation flows, analyze and gain new insight, and make better informed business decisions that strengthen brands.
Trends point to growing demand for integrated services at the expense of individual product and service offerings. Clients want higher efficiency, which is supported by the greatly expanded functionality in the new Ci- sionPoint platform. Cision’s integrated offering is structured in four ser- vice areas: Plan, Connect, Monitor and Analyze.
Plan – reach the right target audience
Media planning through Plan helps clients identify and precisely target the right audiences for campaigns, PR, press releases and other information material. With offices in Europe, North America and Asia, Cision offers the market’s most comprehensive database of editors and journalists, con- taining over 900,000 contacts from nearly 150 countries. The database provides the flexibility to design tools in CisionPoint to manage contact information on target audiences. Clients can also create and monitor their own distribution lists by saving them in CisionPoint. In this way, all the information on each target audience is stored in one location.
Connect – contact through the right channel
Connect is a service to distribute information, usually press releases or other information, by e-mail, fax or SMS to the right target audience. Th- rough CisionPoint, clients can contact various media outlets, journalists, opinion leaders and other target audiences in the channels of their choi- ce. The information is distributed promptly, simultaneously and consis- tently to specific target audiences with a high degree of accuracy. Clients can decide to distribute information themselves or receive support from CisionPoint’s client service representatives.
Cision also supplies PR and IR applications for clients’ websites. These services are designed to manage information for shareholders and other financial audiences. Examples include automatic publication of press re- leases, interim reports, annual reports, market information and images integrated with releases, subscription functions and share performance graphs.
Monitor – searchable media information
Monitor helps clients monitor practically any media, from newspapers, ma- gazines and broadcast outlets to websites and blogs. It provides clients with a clear overview of their coverage and that of their competitors. Its 50,000 sources and partners in almost 125 countries give Cision unri- valed global reach.
Media monitoring is based on specific, intelligent search profiles cus- tomized to each client’s needs. The profiles determine how information is filtered and coded. A typical assignment would be to monitor the impact of a campaign, compare a competitor’s media image and reputation, or issue a news alert when something important is reported by the media.
Complete coverage is immediately accessible and searchable online in CisionPoint. Clients also have the alternative of receiving analog press clippings, summaries or broadcast content on DVD.
Analyze – correctly evaluating communication and media coverage Analysis services help clients evaluate and understand if they are com- municating effectively and how it is impacting their reputation and brand, which provides important guidance for decision-making. Cision’s offering is a combination of analysis and advice. Analyze produces qualitative and quantitative analyses, which are presented online in CisionPoint as client- specific reports or in meetings in the form of strategic advice. Cision- Point makes it easy to immediately analyze specific details. For example, clients have online access to the complete articles on which graphs are based as well as information on the publications the articles came from.
Cision’s methods and tools help clients understand the value of their
communication work. Cision provides concrete advice on measures to
strengthen the company’s reputation and brand.
Operations
Clients and market
A changing client structure simplifies scalable services
Cision’s 30,000 clients can be found in practically every industry, among local and international companies, PR agencies, public sector agencies and organizations. No single client accounts for more than one percent of total revenue.
Today most of Cision’s services are purchased by information and com- munications departments and consultants. As the strategic value of cor- porate reputations grows, the decisions to work with Cision are being made higher up in these organizations. Cision is meeting the rising de- mand for sophisticated decision guidance with detailed analysis services.
These services also underscore the impact of communication on busines- ses: “information owners are business winners.”
The CisionPoint service platform is a powerful, scalable tool that pro- vides clients with a fully integrated, flexible digital solution adaptable to various users.
A fragmented market with strong growth segments
Cision’s market in the Nordic region, the rest of Europe and North America was estimated at SEK 10 million in 2007. Growth is estimated at 5 to 7 percent. The market is fragmenting in pace with technological deve- lopments, with significant differences in growth rates by segment. For example, global Internet use has increased by over 20 percent per year since 2000, while print media are stagnating.
Geographical demand also varies widely. Emerging markets such as Brazil, Russia, India and China as well as other countries in Eastern Euro- pe and Asia are generating rapid growth. With its global presence, Cision is well-positioned to benefit from this trend. This position is supported by growing demand from global clients for scalable services with an interna- tional overview.
Cision’s unique position relative to the competition
Many small, specialized players work locally and nationally, often limited to one or more of Cision’s service segments. A few larger companies operate on an international scale, but do not cover Cision’s entire range of services. They therefore have a hard time competing with Cision’s solu- tions for international clients in global environments. Barriers to entry are high, with tough demands on availability, technological sophistication and modifications to satisfy clients’ needs and behaviors.
International clients are a growth area
International clients with global operations are clearly a growth area for Cision. Extensive experience and an established structure to manage in- ternational clients, coupled with its large client base, uniquely position Cision in this growing segment. These factors are also significant barriers to entry for the competition. Assignments for international clients tend to stretch over long periods and entail large sums of money. Cision’s interna- tional clients are served by sale officies in London, Amsterdam and Hong Kong and by special production units in Europe, North America and Asia.
Client surveys for client-driven development
Cision’s client relationships are often long-standing and distinguished by close contacts between the client’s organization and Cision’s representa- tives. They are often put to the test in demanding situations and activities round-the-clock, where accurate, timely communication is of direct, busi- ness-critical value. To strengthen these relationships, Cision periodically surveys its clients on its image and the quality of its services as well as the friendliness of its staff.
Client surveys are an important tool in Cision’s efforts to continually improve its offering. They are essential to innovative, client-driven service development.
Vocus Meltwater Vocus
Carma Echo Biz360 Vocus
PressWatch Precise
TNS Factiva PR Newswire
PR Newswire Vocus
International / Global
Vocus BurrellesLuce
Meltwater Cymfony
Biz360 BurrellesLuce BurrellesLuce
VMS PR Newswire
Business Wire Vocus
PR Newswire BurrellesLuce
North America
Vocus Meltwater Echo Research
Carma Medien Tenor Durrants
Ausschnitt Precise
TNS PR Newswire
PR Newswire Gorkana
Rest of Europe
Alliances between niche competitors
Meltwater Local and/or
fragmented competition Retriever
Infopaq Agent 25 Hugin
Hugin
Nordic
& Baltic
Integrated services Analyze
Monitor Connect
Plan
Main competitive overview
Operations
Cision’s markets
Cision is consolidating its leading position and continues to gain market share in European and North American markets with integrated services and service platforms for media monitoring and reputation management.
Cision’s monitoring services still dominate in every market, although ana- lysis services account for the largest share of growth in terms of per- cent.
In 2007 Cision expanded to the strategically important Asian market through a sales office in Hong Kong and a production unit in Shanghai.
During the year the Cision Executive service was launched in the Asian market.
Operating revenue SEK
795 m SEK
587 m SEK
506 m
Operating profit
1)SEK 176 m SEK
78 m SEK
17 m
Operating margin
1)22.2% 13.3% 3.3%
Main competitor Vocus Durrants, PR Newswire Hugin, Infopac
1) Excl restructuring expenses and goodwill write-downs
Norden % Baltikum, 27%
Norden och Baltikum, 6%
Övriga, 31%
Övriga Europa, 29%
Nordamerika, 42%
Nordamerika, 65%
North America
Development in the U.S. is mainly dri- ven by the integrated offering, where
“Plan” is strongly contributing to reve- nue growth and margins. The launch of CisionPoint has received a positive response. Analysis services continue to generate good growth in the U.S.
Growth in Canada has been weak.
Rest of Europe
Operations in Germany and Portugal are growing. In the UK, a product up- grade and increased focus on large and international clients have begun and are expected to have an impact in 2008.
Nordic & Baltic
The share of Nordic clients with digital me-
dia monitoring is increasing, reflecting the
good future prospects for the digital “Mo-
nitor” service. Analysis services continue
to generate strong growth in the market,
and several new strategic agreements
were signed with clients during the year.
Verksamheten
Organization
Organized for success
The development of Cision’s organization and its employees’ competence is a continuous process to satisfy rapidly changing client needs and capi- talize on the opportunities afforded by new technology. Highlights during the year included the switch to a uniform brand, Cision, as well as the digitalization of operations, the change in the competence mix and further human resource development.
Cision has around 2,600 employees in 12 countries: Canada, China, Denmark, Finland, Germany, Lithuania, the Netherlands, Norway, Portugal, Sweden, the UK and the US. The head office is located in Stockholm.
During the year the operations in Ireland were dissolved, while operations in Asia, with offices in Hong Kong and Shanghai, were established.
Cision – a consistent promise in every market
The name change to Cision was an important strategic step in the transi- tion to an increasingly global company and offering. The Group now ope- rates under the same brand name around the world. The new identity has resulted in significant benefits in terms of cost and revenue synergies compared with the previous array of names used in different markets.
The Group’s marketing is more efficient and Cision’s promise is the same in every market. Clients can clearly associate our products, services and quality with a distinctive brand.
Digitalization changes the competence mix
The reorganization initiated in 2006 has continued according to plan. Di- gitalization and efficiency improvements led to a reduction in the number of employees during the year, mainly in production. At the same time the strategic shift toward services with more analyzed information, integrated services with a high technology content and greater international reach has helped Cision to strengthen competence among its employees, main- ly in analysis, sales, IT and management. This has been achieved through recruitments, human resource and leadership development, and the cla- rification and measurement of internal performance and objectives. As a result of the change, the share of employees with an academic degree had increased to 48 percent at year-end 2007.
Employee surveys are important to development
Managing change processes has placed tough demands on employees and management. An important tool to maintain a sense of commitment and motivation has been to periodically check on employees’ attitudes
and understanding of the changes through surveys. Feedback from these surveys is provided to employees and has led to concrete action plans and changes.
Clearly defined goals create a high performance culture
For Cision, leadership means seeing opportunities in challenges and change and encouraging employees to perform at their peak to reach common goals. The focus of Cision’s leadership development program is to increase internal recruiting for senior positions.
The most important tool to build support for Cision’s vision, strategies and objectives is a process called Performance Management. In 2007 it was improved to more clearly link each individual’s goals to the Group’s objectives. This has contributed to greater understanding and the right incentive structure.
Secondary education, 23%
Academic degree, 48%
Elementary education, 8%
Post-secondary ecucation, 21%
Educational level
Number of employees by country
2007 2006
Average no.
of employees
No. of employees
Of whom men
No. of employees
Of whom men Subsidiaries
Sweden 357 161 372 160
Norway 90 48 101 55
Denmark 89 50 103 57
Finland 124 36 119 35
Baltic countries 28 6 55 18
Germany 244 88 227 86
UK 449 205 507 208
Ireland – – 41 9
Portugal 129 53 121 54
Canada 320 128 329 188
USA 809 429 783 313
ToTAl 2,639 1,204 2,758 1,183
Key ratios 2007 2006
Value added per employee
1), SEK
thousands 508 495
Employee turnover
2)30% 23%
Employee turnover excl lay-offs 21% 18%
1) Operating profit plus staff costs divided by the average number of employees.
2) Number of employees who left the company during the year divided by the average number of employees in 2007.
