2005 Agency Business Report: <strong>Financial Dynamics</strong>

Independently owned; revenue not supplied

Independently owned; revenue not supplied

Declan Kelly, CEO

Number of offices: Five in the US: New York (US hub), Boston, Chicago (opened March 2005) San Francisco, and Washington DC. Fourteen offices globally.

Staff numbers: 97 US employees, up nearly 35% 2003. Globally, FD has 300 employees.

Turnover: Less than 4% in the US

Senior hires: Several at VP level and above, including John Quinn, CFO, previously a partner of Scarpati, Quinn & Hennessy; Stan Collender, managing director and GM, Washington, DC, formerly at Ernst & Young, the US Mint, Sallie Mae and the Bureau of Economic Analysis of the US Department of Commerce; Neil Dhillon, SVP and national director of public affairs, formerly public affairs director at Hill & Knowlton; Evan Smith, SVP and head of property, formerly a financial analyst and portfolio manager at Fred Alger Management and Gintel Equity Management.

Senior departures: CFO Donal Lawless; VP Jesse Ciccone; SVP Christopher Clark (returned to FD in London), Ron Heckmann (MD in SF) and Christopher Katis.

New offices: Washington DC (opened February 2004) and Chicago

What region is growing? New York and Washington DC have been sources of substantial growth.

Mergers and acquisitions: Two agencies in Europe: Tamesis and Westbury Consulting.

Number of practice areas: Three core business communications services - investor relations, corporate communications and public affairs. Additionally, FD handles M&A communications, IPO advisory, crisis and litigation communications, and creative/design communications. Industry sector teams include financial services, life sciences, retail, technology and telecom, and property.

Which are new? Public affairs and property.

What areas were strong? FD grew across all practice areas, with the strongest in corporate communications and public affairs.

Distribution of accounts across practice areas: Basic industries and financial services, 18%; corporate communications, 18%; life sciences, 14%; retail, 9%; public affairs, 8%; crisis, M&A and IPO, 7%; technology and telecom, 6%; other financial communications, 20%.

Key account wins: Include American Financial Services Association, Forest Laboratories, GE Healthcare, Homegrown Coalition, Micro Focus, Management Recruiters International, Riverdance.

Key account losses: Six losses, including Therasense (acquired by Abbott), Alaris Medical Systems, Golden State Vintners, Genworth.

Accounts expanded into new markets: Won Heineken in the US, expanding the UK relationship; Management Recruiters International and Gartmore both expanded to the UK.

Dormant clients that started to spend again: Network Engines

Proportion of clients on a retainer: Approximately 80%, with M&A and design projects accounting for other clients.

Has this changed over the past year? This figure is comparable to retained clients in 2003; however, M&A projects increased significantly in 2004.

Did financial performance meet expectations? Revenue growth substantially exceeded expectations.

Did you experience top-line or bottom-line growth? FD's revenue grew by 100%, and operating profit rose by 380% during 2004 which again exceeded expectations.

Outlook: Though the firm has only been a brand in its own right in the US for two years, FD is making significant noise as it continues to poach senior staff from other firms and tout big account wins. Declan Kelly says the firm is in "an interesting place," and its high-octane pursuit of growth makes it a topic of much speculation. "Much of our business is not won by word of mouth," Kelly says. "It's by going out and attracting it." With a reported turnover rate of about 4%, the talent is sticking around for its next act.

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