Parity Group plc. Interims 2013 & Strategy Review PARITY

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1 Parity Group plc Interims 2013 & Strategy Review

2 Interims 2013

3 Financial Summary Income Statement 2013 Actual HY 000 Actual HY 000 Actual FY 000 Revenue 46,505 42,862 85,887 EBITDA (adjusted) 1, ,395 Operating Profit Finance income Finance costs (544) (520) (1,061) PBT 500 (87) 284 Non-recurring costs (1,016) (157) (1,350) 1 Adjusted EBITDA = Operating profit before share based payment, non-recurring costs and strategic initiative costs

4 Financial Summary Balance Sheet 2013 Actual HY 000 Actual HY 000 Actual FY 000 Intangible assets 7,869 8,593 7,756 Tangible assets Deferred tax 1,186 1,294 1,318 Trade and other receivables 15,767 14,180 13,064 Cash and cash equivalents 3,152 3,121 2,863 Asset based lending (ABL) financing (9,017) (7,065) (8,283) Trade and other payables (11,791) (11,453) (9,438) Provisions (1,101) (1,310) (770) Retirement plan liability (2,581) (3,004) (3,047) Net assets 3,827 4,967 3,878

5 Financial Summary Overview Group revenue for HY 2013 up 8.5% to 46.5 million; continues the trend from FY - group revenue up 6.7% on FY 2011 Operating profit for HY 2013 higher than FY despite HY 2013 which includes strategic initiative costs of 0.26 million Pension deficit reduced by 2.3 million to 6.3 million due to strengthening company covenant Pension contributions reduced from 1.09 to 0.68 million per annum as from 1 August 2013 Strong treasury management debtor days 26 (: 27 days) Replacing expensive and inflexible group based business systems with divisionally independent, business specific, flexible and cost effective systems

6 Strategy Review

7 Top Management Background Executive Chairman, Philip Swinstead OBE UK software industry pioneer Founder of 3 IT companies that have achieved FTSE 250 level in UK(2) and France. SD-Scicon ; Parity ; GFI Informatique Founded animation software, research company in Cambridge for film/video world CEO, Paul Davies Eur Eng Director of Projects in large scale international construction industry Nearly 20 years experience running IT systems companies Co-founder Parity Group plc in Finance Director, Alastair Woolley FCA 11 years at Deloitte Senior Group Manager involved in due diligence assignments, audit, tax investigation and financial modelling. 15 years as FD and MD in various technology based private companies Presented at major technology shows including Siggraph in the US Swinstead bought 26% stake in Parity in 2010 and re-joined, with co-founder Paul Davies, as Chairman and CEO. Woolley joined Swinstead and Davies at Parity in

8 Main Group Board Philip Swinstead OBE Lord Roger Freeman, Paul Davies, Alastair Woolley FCA, Neal Ransome FCA, Pater Luff, David Courtley, Suzanne Chase, Directors **Executive Chairman Deputy Chairman, and Chairman Nominations and Remuneration Chief Executive **Finance Director Non-exec director, and Chairman Audit Non-exec director Non-exec director Company Secretary & General Counsel Business Management Alan Rommel, Zahur Amin, Dr Adrian Leu, COO, Parity Professional COO, Parity Digital *Strategic Director, Parity Digital * Nearly 25 years experience in technology for film studios and production houses ** Worked together from 1997 to 2008 in various 2D/3D technology companies selling to production houses and film studios led to spotting the digital media market gap.

9 MILLIONS MILLIONS Parity Group Turnaround.and now July-December 2010 Cost cutting; 3.5m out of cots base New banking deal, business processes, management New strategic direction 2011 Raise 6.4m for working capital and investment Stabilise and move into operating profit Invest in current business and new strategy Grow revenues Increase profitability First emerging technology acquisition in digital media January-August 2013 Split Group into two divisions Parity Professional in IT services and Parity Digital in digital media Research, convince and filter acquisition prospects down to top twelve Enter serious negotiations with first four Move to AIM to increase acquisition efficiency Restructure Board and move to new brokers Share price more than tripled in three years since management change To December 2014 Grow Parity Professional to add shareholder value Build Parity Digital into a new style of Digital Agency based round interactive creative content H H H H H H H H H1 H1 Revenue H2 H2 H EBITDA * H * before non-recurring items

10 Digital Market Size An example of the many surveys predicting a swing from legacy marketing methodology to technology led digital marketing

11 SoDA Report 2013 Survey carried out by Society of Digital Agencies in UK SoDA - Society of Digital Agencies

12 CONTENT the core of the digital universe Adobe/eConsultancy Digital Briefing 2013

13 The Size Gap Revenue () WPP Omnicom/ Publicis Dentsu Interpublic CONGLOMERATES 500 mil Sapient Nitro St Ives (Amaze) OPPORTUNITY A new mid size marketing technology company 20 mil Realise TH_NK Reading Room Greenlight Profero Stickyeyes Equator Zone SMALL NICHE SO.CONSOLIDATE TOMORROW S SKILLS Source: NMA top 100

14 First Generation Digital Agency selling mainly to Ad Agencies e-commerce Advisory Digital agency Production Houses & Studios Graphics UX Analytics Search Web/App Build Games Videos DIRECTORS TV commercials BRANDS AD AGENCY

15 CIOs Digital Agency Today..now competing with Ad Agencies!! Marketing Tech Platforms Niche Production Houses & Studios UX GOOGLE etc Smaller Niche Advisory Firms Analytics Search Small Digital agency Analytics Web/App Build UX Search studio Traditional TV Interactive web content Videos/Games Experiential Augmented Reality DIRECTORS BRAND CMOs AD AGENCY

16 CIOs The Big Squeeze MARKETING TECH PLATFORMS Google etc NICHE ADVISORY UX, Analytics, Search Small Digital Agency Web/App Build CREATIVE TECHNOLOGY Traditional TV Interactive web content Videos/games Experiential Augmented reality BRANDS AD AGENCY

17 A new Mid-Size Marketing Technology Company Mid-Size Deep Skills Not competing with advertising agencies ADVISORY DEVELOPMENT MATHS RESEARCH CREATIVITY TECHNOLOGY Analytics Search TV You Tube UX Interactive Web/Apps AR..VR..DOOH Experiential BRANDS AD AGENCY