ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
For the Year Ended
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Heisenberg UK Bidco Limited
Company Information
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Heisenberg UK Bidco Limited
Contents
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Heisenberg UK Bidco Limited
Strategic Report
For the Year Ended 31 December 2020
The Directors present their Strategic Report for the period ended 31 December 2020.
Following the Carlyle transaction whereby Dept was acquired by Heisenberg S.a.r.l. (an investment company of The Carlyle Group) and Dept’s senior management late January 2019, an initial restructure has occurred which has seen Heisenberg UK Bidco Limited become the parent company of Dept UK Holding Limited as of 15 April 2020 and the company restructured it’s financing arrangements. The new ownership serves to accelerate Dept’s ambition to grow into an industry leader within the UK and internationally.
During the year Heisenberg UK BidCo maintained its key strategic role as owner and shareholder of its direct and indirect subsidiaries. In early March 2020, the global COVID-19 pandemic reached the United Kingdom. The Group (Heisenberg UK BidCo and its fully owned (indirect) subsidiaries) continues to assess the potential impact of the pandemic, applying various scenarios and taking a range of mitigating measures to ensure business continuity with a focus on people, operations, suppliers and finance. As part of the UK’s management policy, the Group took the required measures, and closely followed the guidelines laid down by the U.K. health authorities. The Group took several risk mitigating measures to guarantee the continuity of operations, such as ensuring that all employees remained safe and were able to effectively work from home, intensifying working capital and cash management and cost reductions, as well as proactive contact with customers. 2020’s high focus on sales effectiveness ensured that the Company was not heavily impacted by the COVID-19 pandemic. Despite the challenges posed by the pandemic, the Group was able to further strengthen its culture by focusing on connecting Depsters virtually, ramping up internal communication, and placing health and wellbeing as a key priority. A range of initiatives were implemented locally to help with engagement and to support Depsters health and wellbeing. The Company introduced Wellbeing Advisors who were on hand to help any Depster who was struggling with their mental health; the Dublin team launched a Wellness Challenge, encouraging Depsters to take part in activities to promote physical and mental wellbeing; virtual social events, yoga, lunch & learns and virtual coffee breaks ensured Depsters remained connected with each other. Although no company or industry is immune to the economic effects of COVID 19, the Directors believe the Digital industry to be resilient as staff can easily work from home and clients and prospective clients will become more reliant upon digital service offerings and internal systems as they seek to pivot from operations exposed to the effects of COVID 19. The U.K. Government has made it clear that they will do whatever it takes to support the U.K. economy and the group is well placed to take advantage of the Government Support available. So far this has been limited to the Coronavirus Job Retention Scheme. Over the course of the following 12-months the Company intends to continue its role as a shareholder for it’s direct and indirect subsidiaries. Heisenberg UK BidCo Limited is a 100% owned subsidiary of Digital Agency Holding B.V and therefore makes use of the exemption to provide consolidated financial statements, electing instead to consolidate at a ‘Dept Group’ level. The ‘Dept Group’ consolidated accounts are publicly available from Generaal Vetterstraat 66, 1059 BW, Amsterdam, The Netherlands.
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Heisenberg UK Bidco Limited
Strategic Report (continued)
For the Year Ended 31 December 2020
The principal risks are the performance, and subsequently the valuation, of the subsidiary entities of the company.
Core risks facing the Group can be characterised as follows: Political risk It would be remiss not to highlight Britain’s departure from the EU (“Brexit”) as an external risk to the business, particularly in the U.K. Group companies’ ability to recruit the talented individuals necessary to deliver the complex digital solutions it offers. However, the Directors believe that given the industry in which these companies operate; where risk exists, so does opportunity, and, are therefore confident about the Company’s ability to grow organically over the course of the coming years. The risk represented by Brexit is to some extent mitigated by the Company’s global reach and access to people and talent through its parent, sister and subsidiary companies across the globe, and the very nature of the services it offers being part of the cutting edge of an economically growing industry. Economic risk The Group of companies are all service based companies and they therefore suffer from the common economical risks most service companies face, namely: - The recruitment and retention of highly skilled employees - Maintaining the structures which enable investment in innovation which is required to maintain a competitive advantage - Ensuring that operations augments service delivery effectively To reduce such risks to an acceptable level the company has implemented a robust operational framework, involving the standardisation of systems and software across the ‘Dept Group’, and the strong integration of management reporting mechanisms and data analysis. Foreign exchange risk The group is exposed to the effects of foreign exchange fluctuations through its mixture of non-sterling customers, suppliers, subsidiaries and sister companies. Where possible the Company looks to take advantage of its embedded global positions through the movement of assets and liabilities at optimal exchange rates with the objective of moving cash balances upstream as efficiently as possible. The Company has also implemented contractual defences to exchange rate movements which enables the Company to pass on large foreign exchange losses to clients.
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Heisenberg UK Bidco Limited
Strategic Report (continued)
For the Year Ended 31 December 2020
Dept broadly focuses on key performance indicators classified under the following headings:
· Financial performance: o Net sales and contribution margin o Operational efficiency and delivery o Fixed cost fiscal responsibility · Client satisfaction · Staff satisfaction As a shareholder centre with no external clients, key performance indicators in respect of clients and project delivery are irrelevant. Fiscal cost responsibility and staff satisfaction however remain pertinent. Financial performance relevant to Heisenberg UK BidCo relates to responsibility and governance of costs. The company maintained within its budget for the year 2020, hence concludes on a strong year given the economical situation in that year.
Staff satisfaction is monitored via bi-annual electronically distributed Peakon survey to all staff members and is measured on a 10-point Likert scale. The surveys are thorough and cover a wide range of topics from wellbeing to professional development and remuneration.
Dept is a company which cares passionately about its employees, as their effective engagement is the driving force to delivery of the company’s strategic goals. In 2020, the Group maintained an above satisfactory score.
This report was approved by the board and signed on its behalf.
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Heisenberg UK Bidco Limited
Directors' Report
For the Year Ended 31 December 2020
The directors present their report and the financial statements for the year ended 31 December 2020.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £506,727.
The directors do not recommend payment of a dividend.
The directors who served during the year were:
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Heisenberg UK Bidco Limited
Directors' Report (continued)
For the Year Ended 31 December 2020
On 11 February 2021, Heisenberg UK BidCo (through its subsidiary Dept UK Holding) acquired 100% of the ordinary share capital of Byte Club Limited, a leading marketing technology company based in London with a presence within the U.K, U.S and Germany. The acquisition represents Dept's ambition to grow it's presence and service offering within the U.K. The Byte Group provide innovative marketing technology services to household brands such as Snapchat and Spotify and signifies a diversification of the company's service offering within the U.K, which the company intends to leverage in order to provide a "full service" digital offering to incumbent and new clients within the U.K and abroad.
Management has started the initiative to execute a merger of all operating companies in the United Kingdom, excluding the recent Byte acquisition. The company expects to complete the merger in the fourth quarter of 2021 for the companies Dept Design & Technology Ltd, Dept Marketing Automation Ltd, Dept Experience Design Ltd and Dept Commerce Ltd. By bringing these together in one legal entity we reach the final step of managerial and operational integration of the business teams. Management furthermore foresees continued growth in staff and business in the operating companies, and a stable headcount of the shared service centre.
As noted above, the UK Group (through Dept UK Holding Limited) acquired Byte Club Limited on 11 February 2021 and intend to restructure the UK Group in the forthcoming financial year.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Heisenberg UK Bidco Limited
Independent Auditors' Report to the Members, As A Body, of Heisenberg UK Bidco Limited
We have audited the financial statements of Heisenberg UK Bidco Limited (the 'Company') for the year ended 31 December 2020, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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Heisenberg UK Bidco Limited
Independent Auditors' Report to the Members, As A Body, of Heisenberg UK Bidco Limited (continued)
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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Heisenberg UK Bidco Limited
Independent Auditors' Report to the Members, As A Body, of Heisenberg UK Bidco Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: • The nature of the industry and sector, control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. • Enquiring of local management and parent company management, including obtaining and reviewing supporting documentation, concerning the Company's policies and procedures relating to: - Identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; - Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected of alleged fraud; - The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. • Discussing among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud; • Obtaining an understanding of the legal and regulatory frameworks that the Company operates in, focusing on those laws and regulations that had a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or that had a fundamental effect on the operations of the Company, including General Data Protection requirements and Anti-bribery and corruption policy. Audit response to risks identified Our procedures to respond to risk identified included the following: • Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; • Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud; • Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities; • Enquiring of management concerning actual and potential litigation and claims; and • Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
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Heisenberg UK Bidco Limited
Independent Auditors' Report to the Members, As A Body, of Heisenberg UK Bidco Limited (continued)
We have also considered the risks noted above in addressing the risk of fraud through management override of controls:
• Testing the appropriateness of journal entries and other adjustments; we have analysed all entries posted to ensure that any accounting transactions which may pose a heightened risk of material misstatement are free from fraud or error and have been agreed to appropriate supporting documentation; • Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and • Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Cheshire
SK1 1TD
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Heisenberg UK Bidco Limited
Statement of Comprehensive Income
For the Year Ended 31 December 2020
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Heisenberg UK Bidco Limited
Registered number: 12503141
Statement of Financial Position
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 19 form part of these financial statements.
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Heisenberg UK Bidco Limited
Statement of Changes in Equity
For the Year Ended 31 December 2020
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Heisenberg UK Bidco Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
Heisenberg UK Bidco Limited was incorporated on 6 March 2020. It is a private company limited by shares, incorporated in England and Wales. The address of the registered office is 9th Floor, Bridgewater House, Whitworth Street, Manchester, M1 6LT. The nature of the Company's operations is that of a holding company.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Heisenberg S.A.R.L. as at 31 December 2020 and these financial statements may be obtained from 2 Avenue Charles de Gaulle, Luxembourg.
The Company is a parent Company that is also a subsidiary included in the consolidated financial statements of its immediate parent undertaking established under the law of a non-UK state and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006.
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Heisenberg UK Bidco Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
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Heisenberg UK Bidco Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
Provision for impairment loss on investments in subsidiaries Management assess at each reporting date whether there is an indication that the investment in the subsidiary of £21,905,514 is impaired. If any such indication exists, management shall estimate the recoverable amount of the asset and any impairment loss shall be recognised immediately in the profit or loss.
The cost of auditor's remuneration has been borne by the trading entities within the UK group.
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Heisenberg UK Bidco Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
There were no factors that may affect future tax charges.
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Heisenberg UK Bidco Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Heisenberg UK Bidco Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
During the period, the company issued 101 ordinary shares with full voting, dividend and capital distribution rights. The aggregate nominal value of these shares is £101. In consideration for the allotment of these shares, Digital Agency Subholding B.V. agreed to release the company from some of the consideration loan notes, with a value in Euros equal to €10,200,000. The capitalisation shares would be allotted to Digital Agency Subholding B.V. fully paid up, and would have an aggregate share premium equal to £10,199,900.
Share premium account
Profit and loss account
There is a fixed and floating charge over the assets of the company in respect of a senior facilities agreement of EUR 185,000,000 held by a foreign parent entity, Digital Agency Holding B.V. The company is one of six UK-based group companies acting as chargor in the agreement.
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Heisenberg UK Bidco Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
The immediate parent undertaking is Digital Agency Subholding B.V., a company registered in The Netherlands.
Consolidated accounts are prepared by Heisenberg S.A.R.L., a company registered in Luxembourg at 2 Avenue Charles de Gaulle, Luxembourg. This is both the smallest and largest group for which consolidated accounts are prepared that include Heisenberg UK Bidco Limited. These accounts are available from the registered offices listed above. Heisenberg S.A.R.L. is the ultimate parent undertaknig.
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