COMPANY ANALYSIS 23 July 2014

Important information: All information regarding limitation of liability and potential conflicts of interest can be found at the end of the report.

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Key Financials

List: Small Cap Market Cap: 906 MSEK Industry: Information Technology CEO: Magnus Thell Chairman: Lawrence C. Fey

7.0 points 6.5 points 8.0 points 4.0 points 6.0 points

Share information

Share price (SEK) 60.8

Number of shares (m) 14.9

Market Cap (MSEK) 906

Net debt (MSEK) 225

Free float (%)

50 %

Daily turnover (’000) 18

Analysts:

Philip Skogby Philip.skogby@redeye.se

Solid Profitability Trend Cision Q2 report was in line with our forecasts and revenues

amounted to 211 MSEK with a 3MSEK currency effect and 2 %

organic growth. EBIT and EBITDA came in higher than expected at

25 MSEK and 37 MSEK respectively. During the quarter the

company had non-recurring costs of 20 MSEK, primarily related to

legal and advisory fees caused by the bid offering. Consequently the

reported earnings were low during the quarter.

Blue Canyon Holdings stake in Cision have now increased by 2.1 % to

74 percent since last quarter. Meltwater’s stake is unchanged since

last quarter. Blue Canyon Holdings bid is likely to fail due to

Meltwaters incentives to reject the offer. The intrinsic value of the

company as a standalone entity should serve as an indicator of the

price post-failure.

Our DCF indicate a value of Cision, as a stand-alone company of 50

SEK per share (11.2 % WACC) which has been revised since last

quarter due to changes in the rating parameters.

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22-Jul 20-Oct 18-Jan 18-Apr 17-Jul

OMXS 30 Cision

Management Ownership Growth prospect Profitability Financial strength

Summary

Cision (CSN.ST)

Redeye Rating (0 – 10 points)

2012 2013 2014E 2015E 2016E

Revenue, MSEK 956 856 848 886 940

Growth -1% -10% -1% 4% 6%

EBITDA 113 -194 117 152 213 EBITDA margin 12% -23% 14% 17% 23%

EBIT 58 -242 68 102 138 EBIT margin 6% -28% 8% 12% 15%

Pre-tax earnings 34 -263 44 86 118 Net earnings 48 -276 34 79 110 Net margin 5% -32% 4% 9% 12%

2012 2013 2014E 2015E 2016E

Dividend/Share 2.00 1.00 1.13 2.64 3.69 EPS adj. 3.22 -18.48 2.27 5.27 7.38

2012 2013 2014E 2015E 2016E

P/E adj. 17.4 -1.7 26.8 11.5 8.2 EV/S 1.2 0.8 1.3 1.2 1.1 EV/EBITDA 10.5 -3.7 9.7 7.2 5.1

Cision

Company analysis 2

Redeye Rating: Background and definitions

The aim of a Redeye Rating is to help investors identify high-quality companies with attractive valuation.

Company Qualities

The aim of Company Qualities is to provide a well-structured and clear profile of a company’s qualities (or

operating risk) – its chances of surviving and its potential for achieving long-term stable profit growth.

We categorize a company’s qualities on a ten-point scale based on five valuation keys; 1 – Management, 2 –

Ownership, 3 – Growth Outlook, 4 – Profitability and 5 – Financial Strength.

Each valuation key is assessed based a number of quantitative and qualitative key factors that are weighted

differently according to how important they are deemed to be. Each key factor is allocated a number of points

based on its rating. The assessment of each valuation key is based on the total number of points for these

individual factors. The rating scale ranges from 0 to +10 points.

The overall rating for each valuation key is indicated by the size of the bar shown in the chart. The relative size of

the bars therefore reflects the rating distribution between the different valuation keys.

Management

Our Management rating represents an assessment of the ability of the board of directors and management to

manage the company in the best interests of the shareholders. A good board and management can make a

mediocre business concept profitable, while a poor board and management can even lead a strong company into

crisis. The factors used to assess a company’s management are: 1 – Execution, 2 – Capital allocation, 3 –

Communication, 4 – Experience, 5 – Leadership and 6 – Integrity.

Ownership

Our Ownership rating represents an assessment of the ownership exercised for longer-term value creation. Owner

commitment and expertise are key to a company’s stability and the board’s ability to take action. Companies with

a dispersed ownership structure without a clear controlling shareholder have historically performed worse than

the market index over time. The factors used to assess Ownership are: 1 – Ownership structure, 2 – Owner

commitment, 3 – Institutional ownership, 4 – Abuse of power, 5 – Reputation, and 6 – Financial sustainability.

Growth Outlook

Our Growth Outlook rating represents an assessment of a company’s potential to achieve long-term stable profit

growth. Over the long-term, the share price roughly mirrors the company’s earnings trend. A company that does

not grow may be a good short-term investment, but is usually unwise in the long term. The factors used to

assess Growth Outlook are: 1 – Strategies and business model, 2 – Sale potential, 3 – Market growth, 4 – Market

position, and 5 – Competitiveness.

Profitability

Our Profitability rating represents an assessment of how effective a company has historically utilised its capital to

generate profit. Companies cannot survive if they are not profitable. The assessment of how profitable a company

has been is based on a number of key ratios and criteria over a period of up to the past five years: 1 – Return on

total assets (ROA), 2 – Return on equity (ROE), 3 – Net profit margin, 4 – Free cash flow, and 5 – Operating

profit margin or EBIT.

Financial Strength

Our Financial Strength rating represents an assessment of a company’s ability to pay in the short and long term.

The core of a company’s financial strength is its balance sheet and cash flow. Even the greatest potential is of no

benefit unless the balance sheet can cope with funding growth. The assessment of a company’s financial strength

is based on a number of key ratios and criteria: 1 – Times-interest-coverage ratio, 2 – Debt-to-equity ratio, 3 –

Quick ratio, 4 – Current ratio, 5 – Sales turnover, 6 – Capital needs, 7 – Cyclicality, and 8 – Forthcoming binary

events.

Cision

Company analysis 3

Public Offer – Likely To Be Rejected

On February 14 th, 2014, Blue Canyon Holdings AB, a company indirectly controlled by GTCR Investment X AIV Ltd., announced a public offer to the shareholders of Cision to transfer all of their shares in the Company to Blue Canyon Holdings for a consideration of SEK 52.00 per share. The public offer has been increased twice to SEK 55.10 and on April 7 th, 2014 to SEK 61.00. Subsequent to the previous offer Blue Canyon Holdings AB announced that they controlled 71.9% of the shares and votes in Cision. On April 3 th, Meltwater Drive Sverige AB announced a competing offer of SEK 60.00 per share to the shareholders of Cision. The offer was conditional upon an acceptance rate of at least 70% of the shares. On April 16, 2014, Meltwater raised the offer to SEK 63.00 per share with a calculated acceptance period to May 27 th, 2014. The acceptance rate remained at 70% for this new offer. Meltwater later withdrew this offer on May 16. On June 23th GTCR offered another bid for 61 SEK per share which is the most recent. GTCR did not accept Meltwaters bid of 63 SEK per share and then GTCR subsequently reiterated their bid at 61 SEK per share. This indicates that GTCR can be reluctant to increase the bid from the current bid price. The current bid acceptance period runs out around the 5th of august according to the company, in which GTCR has the power to delay the acceptance period. Because the bid period is conditional, by state authority acceptance, it is possible according to the takeover-rules to delay the time for acceptance for up to 9 months after the announcement of the bid offerings terms and conditions. On May 21th, the board of directors of Cision has resolved to apply for a de-listing of the company’s share from NASDAQ OMX Stockholm. On June 21th the company decided to become listed on an alternative market place. On July 4th the company announced its intent and approval to list itself on the NGM Nordic MTF. This decision will most likely to lower liquidity in the shares, but more importantly it will make Cision comply with the regulatory framework for ownership spreads. Currently, Meltwater holds 15.3 % and Blue Canyon Holdings increased its position to 74 %. Since Meltwater holds more than 10 per cent of the company, Blue Canyon Holdings AB cannot exercise a compulsory redemption of the remaining shares in the market. Redeye asses that Blue Canyon Holdings AB will wait for the bidding rules to run out (12 month) and will then try to buy Meltwaters shares to force a compulsory redemption of the remaining outstanding shares. If GTCR plan is successful and as announced by GTCR the intent is to merge Cision and Vocus. Vocus have already been acquired by GTCR this quarter and the planning processes for the merger already seems to have begun. We asses that Cisions former president Peter Granat recent nomination as the CEO of Vocus, is likely a step in order to smooth the transition of the two entities together. The merger could then put significant pressure on Meltwaters current margins and business. A strong indicator that Meltwater will likely not accept the current bid. Because of the situation that Meltwater is in, it is likely that the offer has to be announced at a significant premium to be accepted. The other option for GTCR is to implement non-shareholder friendly measures as equity issuances and acquisitions which can be implemented to dilute Meltwater’s current stake. However, such actions should be seen in the light of GTCR

Possibility to delay the

acceptance period

Blue Canyon Holdings

increased its position

during the quarter

Cision

Company analysis 4

being a majority willing to risk current profitability and an effective transition with Vocus, which we deem is unlikely. On a stand-alone basis Cision seems to have significant potential to cut, their personel expenses with almost half of its costs relating to staff costs, similar to Vocus recent announcement of layoffs after the acquisition by GTCR. In Q2 we witnessed organizational changes contributing to a strong EBIT and similarly in Q1 we saw the layoff of production personnel. We expect the company to further increase the EBIT margin the coming quarters as we believe that Cision have room for further discharge of people. The DCF indicates a value for Cision around 50 SEK per share as a standalone entity. Thus, the outstanding bid of GTCR is fair. However, from our viewpoint, the acquisition is likely to fail due to Meltwater rejecting the bid offer, which can cause the share price to drop to the intrinsic value after the initial acceptance period and possibly after the extension of the bid period. Considering the ramifications on Meltwater’s current business in the case the acquisition succeeds, potential margin expansion and relative undervaluation makes the case clear that Meltwater is seeking a premium to the current share price. Thus, although the bid is likely to fail, we also estimate that the upside more probable than the downside. Considering that GTCR is still the majority owner and would not want to both set the entity in a financially worse position, as a majority owner, and possibly hinder an effective merger between Vocus and Cision. With large tax loss carryforwards, margin expansion through layoffs, relative undervaluation to its closest peer Vocus, we still believe that the stock can move further beyond the current bid price. We estimate that the upside can be around 75 SEK.

Cision’s intrinsic value

can be a good indicator of

the downside in the likely

scenario of bid failure

Cision

Company analysis 5

Positive Revenue Development and Cash Flow In The Limelight

Cision’s Q2 report was overall in line with expectations. Reported revenue amounted to SEK 211 million vs forecasted SEK 211 million. The FX effect on revenues were 3 MSEK as forecasted as USD and Euro were expected to be stronger this quarter than the year before. Organic growth amounted to 2 %, in line with our expectations, which we see as a strong indicator of Cision successful transition from print monitoring business to its core subscription services. EBIT amounted to SEK 25 million vs forecasted SEK 21 million before extraordinary items. The strong underlying EBIT is a consequence of successful cost reductions in the UK and cost benefits arising from changes within the board and organization. It can be noted that high non-recurring costs were reported for the quarter, primarily relating to non-recurring costs of advisory and legal fees amounting to 19.9 MSEK which affected all valuation measures.

EPS adjusted came in strong adjusted for the non-recurring items, supported by a gross margin expansion on adjusted basis since the last quarter one year before.

Cash Flow – Strong Working Capital Performance

Cision continued to deliver another strong cash flow quarter, driven by the strong and altered upfront invoicing seen in the first half of year when subscriptions are renewed. Cision’s operating cash flow amounted to 49 MSEK (50). The decreased free cash flow to 25 MSEK (42) primarily relates to payment of the legal and advisory fees. In the quarter Cision also signed a new credit facility to repay the old loan relating to a change in control of the company. The utilization of the new credit facility loan created a surplus of interest bearing in relation to previous quarter. As announced earlier, GTCR did not pay out any dividends for the year 2013, which makes it more probable that the company will now use the surplus to intensify either software development or paying off its debt gradually with the strong cash flow trend continuing.

Cision: Estimated vs reported

MSEK Q2'13 Q2'14E Reported Diff

0 0 0 0 0

Revenue* 203 211 211 0%

EBITDA ** 30 35 37 6%

EBIT ** 18 21 25 19%

EPS, SEK** 0,6 0,89 0,70 -21%

Revenue growth -19,8% 3,8% 3,8%

Gross margin 69,7% 68,0% 65,0%

EBIT margin 9,0% 10,0% 12,0%

EPS growth YoY -74,4% 39,1% 9,38%

*Q2'13 adjusted for extraordinary other-revenue items

**Excluding goodwil impairment and non-recurring items

Cision’s Q2 report was in

line with expectations

Cision

Company analysis 6

Revenue Growth in US and Europe Continues

The North American division delivered a strong quarter with 155 MSEK in revenues with 2 % organic growth which indicates traction in its subscription revenues. Currency effect of – 1 MSEK lead to a slightly lower revenue than expected. EBIT was 20 (21) for the second quarter which were caused by the decline in demand of the broadcast monitoring business. However, the company notes that the performance would have been better without the weak quarter for the Canadian business which is struggling with its declining demand for broadcast monitoring business.

The European division delivered a strong quarter, driven by strong growth in revenues from Germany, UK and the Nordics. Although, UK have potential to grow top-line revenue further, intense competition limits the potential. EBIT was 9 MSEK for the second quarter led by cost reductions in the UK business and a strong cost focus of the German business. Portugal showed weak growth this quarter and can be attributed to the economic condition in Portugal.

Cision: Development North America

MSEK Q2'13 Q3'13 Q4'13 2013 Q1'14 Q2'14

0 0 0 0 0 0

Revenue 153 153 157 650 154 155

Organic growth YoY -7,0% -2,0% 0,0% -3,0% -1,0% 2%

FX effect on Revenue -9 -6 -5 -28 -2 -1

EBIT * 21 13 22 78 20 20

EBIT % * 14,0% 8,4% 14,0% 12,6% 13,0% 13,0%

FX effect on EBIT * -1 0 -1 -3 -1 0,00

EBITDA* 30 22 32 115 31 29

EBITDA %* 19,6% 14,4% 20,4% 18,5% 20,0% 19,0%

*Excluding goodwil impairment and extraordinary items

Cision: Europe

MSEK Q2'13 Q3'13 Q4'13 2013 Q1'14 Q2'14

0 0 0 0 0 0 Q2'14

Revenue 53 54 60 219 56 57

Organic growth YoY -4,0% 0% 1% 0% 4% 7%

FX effect on Revenue -2 0 0 -3 2 2

EBIT * 3 6 6 19 8 9

EBIT % * 5,3% 11,1% 9,7% 8,8% 13,0% 15,0%

FX effect on EBIT * 0 0 0 0 0 0

EBITDA 4 8 7 25 9 10

EBITDA % 8,1% 14,8% 11,9% 11,6% 16,0% 18,0%0

*Excluding goodwil impairment and extraordinary items

Strong organic growth

with a weak quarter for the

Canadian business

The European division

shows growth despite

challenging conditions in

Portugal

Cision

Company analysis 7

Cision Positioned To Fulfill Growth Projection

North America stands for approximately 75 % of Cisions revenues and thus

it becomes important to consider the markets current growth trends.

According to Forrester Research U.S. Marketers are planning to increase

their spending on interactive channels (display,search,email,mobile and

social media), from 16 % in 2011 of its total spending on advertisements to

26 % in 2016. This growth will drive the spending on IT advertising systems

like that of Cisions targeted ads systems. Moreover, advertising revenues

are expected to grow from 7B USD in 2013 to 13B USD in 2017 for the

mobile platform. Catching the mobile growth trend by providing advertising

service products that are friendly to mobile platforms and with an

optimized management system for the specific platforms will be

instrumental for the company to capture. Companies are becoming

increasingly aware of the transition and potential for the mobile platform.

The competition will therefore be intense in this sector.

With Cision cash-generating subscriptions based model, Cision can cut a

significant portion of the invested capital in order to boost dividend or M&A

activity. Thus, the company appends little maintenance CAPEX. However,

Cision has invested heavily during 2013, doubling their CAPEX since a year

before, which was caused by an increase in investments for mobile support

to social newsrooms to enhance the user experience. In 2014, this trend has

continued. This is coherent with the growth trend of the mobile platform, as

a new social media platform. To monitor traffic in these networks and equip

customers with marketing service tools will become more important for

Cision’s future revenue growth. Despite the growth rate the company must

show that these investments actually grows revenues significantly, which is

quite early to tell. Research indicate that, 60 % of the world’s internet users

are active in social networks and the number of users are expected to grow

by 30 % until 2017.

Furthermore, the company has enhanced their content marketing suite,

social influencer search and campaign analytics to support businesses

marketing strategy to distribute their content in a way that the customer

would want to be perceived and helping them monitor the response of their

messages.

Cision expected to

continue with large

software investments for

growth

Cision

Company analysis 8

Estimates

Redeye has made only minor changes to our estimates after the Q1 report.

Redeye has decided to revise the revenue estimates slightly downwards for

2015 and 2016 based on that top-line revenue growth must show in the

coming quarters in order to materialize the growth expected. The coming

two quarters are not revised for EBIT and EBITDA. The reason is the

uncertainty in the effect of the Canadian broadcast monitoring business.

Furthermore, there also exists some uncertainty whether more advisory and

legal fees will be applicable for the company in the coming quarters. These

are partially offset by increasing efficiency measures as the organizational

changes announced both in Q1 and Q2 of the current year.

Moreover, CAPEX investments have been adjusted slightly upwards due to

continuation in this quarter of higher CAPEX investments than its historical

rate.

Cision: Detailed estimates

MSEK Q1'14 Q2'14E Q3'14E Q4'14E 2014E 2015E 2016E0 0 0 0 0 0 0 0

Revenue 206 211 214 218 848 886 940

EBITDA* 33 37 35 35 141 152 167

EBIT* 20 25 23 23 88 102 138

PTP 13 -2 16 16 44 86 120

EPS, SEK 0,7 -0,4 1,0 1,0 2,3 5,3 7,3

Revenue growth 0% -10% 5% 2% -1% 4% 6%

Gross margin 67% 68% 68% 70% 84% 69% 69%

EBIT% 8% 2% 11% 10% 10% 12% 15%

EPS growth (YoY) 161% -119% -105% n.a. -112% 132% 39%

*Excluding goodwill impairment and non-recurring costs

Slightly revised estimates

caused by uncertainty of

the Canadian business and

related bid fees

Cision

Company analysis 9

Valuation

The discounted cash flow model accompanied with a relative peer valuation is used to perform a valuation of the company.

DCF valuation

We have used a discount rate of 11.2 per cent, which is a decline of 1.8 % in

the discount rate, since the last quarter due to the revision in the rating

parameters. For 2014 we have assumed zero sales growth but lower costs,

which increases margins. The increase in value caused by the lower

discount rate is however compensated, partially, by the revision of sales

growth, EBIT margin, tax rate and CAPEX. Between the years 2014 - 2022

we have assumed a lower sales growth ranging between 5 to 10 per cent

with an average sales growth of 7 %. We have also downward adjusted the

period between 2018-2022 for both the EBIT margin and sales growth due

to the historical growth trend, competitive landscape and the uncertainty of

the company capitalizing on its mobile investments. The EBIT margin is

between 9 and 15 per cent during the period 2014 - 2022. CAPEX is

estimated to be higher than previously forecasted, which mostly relates to

intangibles as software development. We are positive to increased CAPEX

and might have to revise the estimates depending on the outcome of these.

We have used a tax rate of 8 per cent due to tax-loss carry forwards

amounting to 649 MSEK, and 225 MSEK in the US subsidiary alone, until

2021, where the tax benefits is expected to decrease, which in turn increases

the tax rate to 15 per cent. Our DCF valuation becomes upwards adjusted on

an absolute basis and the intrinsic value is estimated to be 50 SEK per share

(as a standalone entity).

Peer valuation

Due to none of its direct peers (Vocus) being listed anymore it is not easy to come up with an accurate peer analysis. Arriving at a valuation of Cision on P/E basis can be a little misleading because the company can take advantage of its tax-loss carry forwards to reduce its tax bill the upcoming five years. Our non-tax adjusted forecasts puts the P/E multiple for 2014e at 17,3 x and 14 x for 2015e, which is arguably a bit expensive for a company with single digit growth. Vocus was acquired by GTCR for 483 million dollars and had an unprofitable track-record, mostly caused by high personnel expenses, which makes Cision an interesting alternative which still have room for margin improvement in the same area. Although, the revenues are double of Cisions the company has a significantly stronger growth track record, which primarily relates to acquisitions.

Revised rating parameters,

but increased uncertainty

in growth projections

along with larger CAPEX

investments compensates

partially for the

adjustment of the DCF

value of 50 SEK

Cision

Company analysis 10

Despite this with purchase price of Vocus, on an EV/EBITDA basis, Cision would be cheap. If one assumes a 15 percent EBITDA margin, based on Cision’s rate, Vocus would be trading for 16,3 x EV/EBITDA for 2014. That would make Cision cheap at 8,6 EV/EBITDA for 2014 and the possibility of 10-30 % bid premium is not unlikely, which still provides an upside for the Cision, considering the layoff potential recently executed by Vocus to restore profitability in its organization. A 10 % decrease of personnel costs would decrease its EV/EBITDA valuation to 6. We are neither concerned that the company needs to add additional capital to maintain its growth, which consequently leads us to using the EBITDA measure with confidence. However, it shall be mentioned that the two entities are traded in two different markets which might cause the discrepancy.

Peer valuation*

Company 2013 2014 2015 2013 2014 2015

VOCUS INC - 43,0 35,0 - 16,3 15,2

CISION AB 9,0 7,1 6,5 6,9 8,6 7,4

Mean 9 25 21 7 12 11

Median 9 25 21 7 12 11

*Assume d 15 % a nd 5 % EBITDA & Ne t ma rgin, re spe c tive ly, for Voc us.

*Re de ye Re se a rc h / Bloombe rg

P/E EV/EBITDA

Cision looks cheap in

comparison to Vocus on a

EV/EBITDA basis

Cision

Company analysis 11

Fundamental View Cision

Investment Case

The pending acquisition is key to understand the potential the magnitude of upside

or downside. The current bid offer does not enable shareholders to extract any

significant value unless the acquirer (GTCR) are willing to release another larger

offer to the shareholders. Meltwater whom are minority shareholders have a strong

incentive to block the acquisition by declining the current bid; they are one

Cision’s key competitors in the US market. Meltwater is also aware that the

acquisition might cause significant issue for its US business, as Vision and Cision’s

will likely do a merger. Consequently, this will cause pressure on Meltwater’s

revenues and margins. Thus, GTCR are well aware that Meltwater will be difficult

to convince and thus it is likely that GTCR will either utilize methods to dilute

Meltwater’s current stake or increase the bid within the next 12 months. The risk of

the current acquisition failing is high considering Meltwater’s large incentive to

cease it, and the upside the next 12 months is relatively limited considering the

time-frame of the acquisition.

Cision is a profitable company with a strong recognized brand and a high degree of

recurring revenues by 65 %. The strong brand accompanied with efficient

monitoring solutions enables the company to reach its aim of higher degree of

subscriptions based revenues and thus more predictable revenues which could be

more appreciated by the market than one-off transactions. Although, the market is

relatively mature and growth is not expected to increase significantly as the PR

market in the North America is relatively mature with Cisions current position in

the market. Cision has the potential to streamline its operations, when considering

the restructuring program for Vocus which most likely would lead to higher

profitability.

Albeit, its investments in mobile applications, one of the risks with Cision is that it

loses traction in the evolving mobile industry. Shareholders should also be aware of

relatively high indebtedness and potential legal indictments of copyright material

which recently caused Cision to denounce its planned dividend (2012). Although,

goodwill is a significant part of Cision’s balance sheet is more attractive now than

before, considering the recent impairment of the traditional and broadcast

monitoring businesses.

Company Description

The company is listed on the Nasdaq OMX Small Cap. 20 The company reported

975 MSEK of revenues with an operating profit of 81 MSEK. Cision is a software

as a service company divided in to three categories software,professional and

transactional services. The majority of the 16000 customers contribute as a

recurring revenue stream. The majority of revenue is attributable to North America

(75%) with Europe (25%).

The company has an established brand and is often a preferred provider for

companies requesting news services. Moreover, add-on services such as

monitoring and ad support adds a layer of a complete internet package for

companies marketing.

Cision

Company analysis 12

Product Overview

Cisionpoint is a popular tool for planning, following and evaluate distributable

content. Through monitoring what news distribution works in terms of total traffic,

the websites that frequently or are expected to attract traffic, Cisionpoint becomes

an essential tool for marketers to deliver their content efficiently. The database

consists of 1.5 million media contacts and over 200 countries for social media.

Recently in 2013, Cision launched the content marketing suite which helps

companies to enhance creation and analysis of their brand content. An advantage of

Cisions product offering is its global reach of its products and the complete

offering from the planning stage of its content to the deliver and analysis of the

content.

Industry outlook

According to Forrester Research U.S. Marketers are planning to increase their

spending on interactive channels (display,search,email,mobile and social media),

from 16 % in 2011 of its total spending on advertisements to 26 % in 2016. This

growth will drive the spending on IT advertising systems like that of Cisions

subscription services, monitoring business and targeted ad systems. Moreover,

advertising revenues will grow from 7B USD in 2013 to 13B USD in 2017 for the

mobile platform. Catching the mobile growth trend by providing advertising

service products that are friendly to mobile platforms and with an optimized

management system for the specific platforms will be instrumental for the company

to capture as companies become increasingly aware of the transition and potential

for mobile advertising revenue.

Increased competition from Meltwater, PR newswire, business wire could pose a

threat to the US segment which could decrease its margins, despite its position, in

the market. A threat coming from clients themselves are that in-house expertise

already exists and several social media sites simplify news distribution. 60 % of the

world’s internet users are active in social networks and the number of users are

expected to grow by 30 % until 2017. The high growth rate and margins for social

networks will increase the number of social networks substantially. Combined with

increased functionality to satisfy users Cision could be challenged in the arena of

content branding by the social network themselves. However, as long as Cision can

offer its professional complete and global package competitively it appears that

they can keep their market position.

Cision

Company analysis 13

Summary Redeye Rating

The rating consists of five valuation keys, each constituting an overall

assessment of several factors that are rated on a scale of 0 to 2 points. The

maximum score for a valuation key is 10 points.

Rating changes in the report

The ownership parameter of the rating has been upwards adjusted due to

significant change in the ownership situation. Management 7.0p

The Company's management and board have been replaced in the recent past. The reason for this is because of the underlying merger proposal between Cision and Vocus. The new CEO Magnus Thell has extensive experience from Cision. CFO and other parts of management are also replaced and GTCR might plan more layoffs as with Vocus to support profitability.

Ownership 6.5p

GTCR is a strong owner whom are dedicated to acquire Cision, with their expertise represented on the board and executive team of Cision. If the bidding process fails, which is a likely scenario, we can still expect that GTCR will implement layoffs in order to successfully and eventually transition Vocus to Cision.

Growth prospect 8.0p

Cision has a high proportion of recurring revenues and the company has a good chance to succeed in developing their strong brand within new markets. Gross margin is also very high (65-70%) and in combination with further efficiency measures there is good potential for margin expansion. The company also has a very good market position in both North America and the Nordic countries, which are the core markets. margin is also very high (65-70%) and thus there is good potential for margin expansion.

Profitability 4.0p

The company has had a declining profitability in recent years. Furthermore, Cision has sold off much of the old business. Profitability has declined as the company has transformed the business and we expect no quick recovery. Rather a slow recovery that may also mean additional decline in profitability in the short term.

Financial strength 6.0p

Cision has a reasonably good financial situation with good development in its financial standing the last year. To a large extent the company uses a prepaid income model, long-term contracts and recurring revenue, making cash flow stable. Goodwill in relation to equity is not ultimate, but the last impairment write-down has improved the situation as the traditional print and monitoring business is impaired.

Cision

Company analysis 14

Income statement 2012 2013 2014E 2015E 2016E

Net sales 956 856 848 886 940

Total operating costs -843 -1,050 -731 -734 -727 EBITDA 113 -194 117 152 213

Depreciation -55 -47 -49 -50 -74

Amortization 0 0 0 0 0

Impairment charges 0 0 0 0 0 EBIT 58 -242 68 102 138

Share in profits 0 0 0 0 0

Net financial items -24 -22 -24 -16 -20

Exchange rate dif. 0 0 0 0 0 Pre-tax profit 34 -263 44 86 118

Tax 14 -12 -10 -8 -8

Net earnings 48 -276 34 79 110

Balance 2012 2013 2014E 2015E 2016E

Assets

Current assets

Cash in banks 56 66 85 77 78 Receivables 220 151 140 146 155

Inventories 0 0 0 0 0

Other current assets 0 0 0 0 0

Current assets 276 217 225 223 233

Fixed assets Tangible assets 27 23 25 35 28

Associated comp. 0 0 0 0 0

Investments 38 38 42 42 42

Goodwill 1,335 995 995 995 995

Cap. exp. for dev. 0 0 0 0 0 O intangible rights 76 94 93 97 103

O non-current assets 3 1 1 1 1

Total fixed assets 1,478 1,151 1,156 1,171 1,169

Deferred tax assets 5 3 3 3 3

Total (assets) 1,759 1,370 1,384 1,396 1,405

Liabilities

Current liabilities

Short-term debt 405 0 0 0 0 Accounts payable 266 292 280 266 235

O current liabilities 0 0 0 5 0

Current liabilities 671 292 280 271 235

Long-term debt 0 300 310 270 250

O long-term liabilities 2 4 4 4 4 Convertibles 0 0 0 0 0

Total Liabilities 672 596 594 545 489

Deferred tax liab 139 146 146 146 140

Provisions 0 0 0 0 0

Shareholders' equity 947 628 644 705 776 Minority interest (BS) 0 0 0 0 0

Minority & equity 947 628 644 705 776

Total liab & SE 1,759 1,370 1,384 1,396 1,405

Free cash flow 2012 2013 2014E 2015E 2016E

Net sales 956 856 848 886 940 Total operating costs -843 -1,050 -731 -734 -727

Depreciations total -55 -47 -49 -50 -74

EBIT 58 -242 68 102 138

Taxes on EBIT -9 -11 -15 -9 -10

NOPLAT 49 -253 53 93 129

Depreciation 55 47 49 50 74

Gross cash flow 104 -205 102 143 203

Change in WC 35 95 -1 -15 -45

Gross CAPEX 49 280 -55 -64 -73

Free cash flow 188 170 46 64 85

Capital structure 2012 2013 2014E 2015E 2016E

Equity ratio 54% 46% 47% 51% 55%

Debt/equity ratio 43% 48% 48% 38% 32% Net debt 349 234 225 193 172

Capital employed 1,296 862 869 899 948

Capital turnover rate 0.5 0.6 0.6 0.6 0.7

Growth 2012 2013 2014E 2015E 2016E Sales growth -1% -10% -1% 4% 6%

EPS growth (adj) -44% -674% -112% 132% 40%

Profitability 2012 2013 2014E 2015E 2016E

ROE 5% -35% 5% 12% 15% ROCE 4% -21% 7% 11% 14%

ROIC 3% -20% 6% 11% 14%

EBITDA margin 12% -23% 14% 17% 23%

EBIT margin 6% -28% 8% 12% 15% Net margin 5% -32% 4% 9% 12%

Data per share 2012 2013 2014E 2015E 2016E

EPS 3.22 -18.48 2.27 5.27 7.38

EPS adj 3.22 -18.48 2.27 5.27 7.38

Dividend 2.00 1.00 1.13 2.64 3.69 Net debt 23.41 15.69 15.12 12.96 11.55

Total shares 14.91 14.91 14.91 14.91 14.91

Valuation 2012 2013 2014E 2015E 2016E

EV 1,184.1 711.1 1,131.2 1,099.0 1,078.0

P/E 17.4 -1.7 26.8 11.5 8.2 P/E diluted 17.4 -1.7 26.8 11.5 8.2

P/Sales 0.9 0.6 1.1 1.0 1.0

EV/Sales 1.2 0.8 1.3 1.2 1.1

EV/EBITDA 10.5 -3.7 9.7 7.2 5.1 EV/EBIT 20.5 -2.9 16.6 10.7 7.8

P/BV 0.9 0.8 1.4 1.3 1.2

Share information

Reuters code CSN.ST

List Small Cap

Share price 60.8 Total shares, million 14.9

Market Cap, MSEK 905.8

Management & board CEO Magnus Thell

CFO Charlotte Hansson

IR Angela Elliot

Chairman Lawrence C. Fey

Financial information

Q3 report

October 23, 2014

October 28, 2014

February 4, 2015

Analysts Redeye AB Philip Skogby Mäster Samuelsgatan 42, 10tr

Philip.skogby@redeye.se 111 57 Stockholm

DCF valuation Cash flow, MSEK Risk premium (%) 5.3 % NPV FCF (2013-2015) 156

Beta 1.5 NPV FCF (2016-2022) 345

Risk-free rate (%) 3.0 % NPV FCF (2023-) 487

Interest premium 9.0 % Non-operating assets 51 WACC (%) 11.2 % Interest-bearing debt -300

Fair value estimate MSEK 739

Assumptions 2015-2021 (%)

Average sales growth 7.2 % Fair value e. per share, SEK 49.6 EBIT margin 9.9 % Share price, SEK 60.8

Share performance Growth/year 12/14e

1 month 10.0 % Net sales -5.80 %

3 month 1.3 % Operating profit adj 8.5 %

12 month 51.9 % EPS, just -16.1 % Since start of the year 77.1 % Equity -17.6 %

Shareholder structure % Capital Votes

GTCR Investment X AIV Ltd 74.0 % 74.0 %

Meltwater Drive Sverige AB 15.3 % 15.3 %

Others 8.0 % 8.0 % Skandia 2.0 % 2.0 %

Repurchased own shares 0.3 % 0.3 %

Hatteras Funds 0.2 % 0.2 %

Blomdahl,Håkan 0.1 % 0.1 % SEB Funds 0.1 % 0.1 %

Cision

Company analysis 15

Revenue & Growth (%) EBIT (adjusted) & Margin (%)

Earnings per share Equity & debt-equity ratio (%)

Sales division Geographical areas

Conflict of interests Company description

Philip Skogby owns shares in the company: No

Redeye performs/have performed services for the Company and

receives/have received compensation from the Company in connection

with this.

Over the past hundred years, Cision has helped more than 20,000 customers worldwide get their stories out. From freelancers to the

Fortune 500, the world’s best communicators all turn to Cision to make

sure their message succeeds. And we provide them with the PR and

media software, services and tools to help navigate the changing media landscape and cover every angle – from beginning to end, all

around the globe. Headquartered in Stockholm, Sweden, Cision is

present in Europe, North America and Asia, and has partners in many

countries. Cision AB is quoted on the Nordic Exchange.

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

780

800

820

840

860

880

900

920

940

960

980

2011 2012 2013 2014E 2015E 2016E

Net sales Net sales growth

-35,0%

-30,0%

-25,0%

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

-300

-250

-200

-150

-100

-50

0

50

100

150

200

2011 2012 2013 2014E 2015E 2016E

EBIT adj EBIT margin

-20

-15

-10

-5

0

5

10

-20

-15

-10

-5

0

5

10

2011 2012 2013 2014E 2015E 2016E

EPS, unadjusted EPS, adjusted

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

0

0,1

0,2

0,3

0,4

0,5

0,6

2011 2012 2013 2014E 2015E 2016E

Equity ratio Debt-equity ratio

Subscription Transactional

Professional Services Other

period

North America Europé period

Cision

Company analysis 16

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Redeye Rating (2014-06-10)

Rating Management Ownership Growth

Prospect

Profitability Financial

Strength

7,5p - 10,0p 22 28 11 4 16

3,5p - 7,0p 43 32 54 30 26 0,0p - 3,0p 1 6 1 32 24

Company N 66 66 66 66 66

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