 Third Quarter IFRS Operating Profit Increased by 15.1% to $6.4 Million 

 Nine Months IFRS Operating Profit up 51.5% to $17.7 million 

Chicago.  November 8, 2012 - Acquity Group Limited (Acquity Group or the Company) (NYSE MKT: AQ) today reported the following unaudited financial results for the third quarter and nine months ended September 30, 2012. 

Financial highlights for the three month period ended September 30, 2012, compared to the three month period ended September 30, 2011

·Revenues increased by $7.7 million, or 26.0%, to $37.3 million, compared to $29.6 million for the three month period ended September 30, 2011. 

·IFRS operating profit increased by $0.8 million, or 15.1%, to $6.4 million, or 17.2% of revenues, compared to $5.6 million, or 18.8% of revenues, for the three month period ended September 30, 2011. 

·IFRS operating profit, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, increased by $0.1 million, or 1.3%, to $7.1 million, or 18.9% of revenues, compared to $7.0 million, or 23.5% of revenues, for the three month period ended September 30, 2011.  Refer to the Reconciliation of Non-IFRS Financial Measures to IFRS Profit in the tables that follow for additional details for all non-IFRS financial measures. 

·IFRS profit attributable to equity holders of the Company increased by $0.1 million, or 1.0%, to $3.2 million, or $0.14 per American depositary share (ADS), compared to $3.1 million, or $0.17 per ADS for the three month period ended September 30, 2011. 

·Non-IFRS adjusted profit attributable to equity holders of the Company decreased by $0.7 million, or 17.1%, to $3.6 million, or $0.15 per ADS, compared to $4.3 million, or $0.23 per ADS for the three month period ended September 30, 2011. 

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·Non-IFRS adjusted EBITDA increased by $0.1 million, or 2.4%, to $7.6 million for the three month period ended September 30, 2012, compared to $7.5 million for the three month period ended September 30, 2011. 

·As of September 30, 2012, the Company had unrestricted cash and cash equivalents of $31.3 million. 

Financial highlights for the nine month period ended September 30, 2012, compared to the nine month period ended September 30, 2011

·Revenues increased by $31.2 million, or 41.1%, to $107.2 million, compared to $76.0 million for the nine month period ended September 30, 2011. 

·IFRS operating profit increased by $6.0 million, or 51.5%, to $17.7 million, or 16.5% of revenues, compared to $11.7 million, or 15.4% of revenues, for the nine month period ended September 30, 2011. 

·IFRS operating profit, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, increased by $7.3 million, or 50.8%, to $21.7 million, or 20.3% of revenues, compared to $14.4 million, or 19.0% of revenues, for the nine month period ended September 30, 2011. 

·IFRS profit attributable to equity holders of the Company increased by $1.4 million, or 20.2%, to $8.2 million, or $0.38 per ADS, compared to $6.8 million, or $0.36 per ADS for the nine month period ended September 30, 2011. 

·Non-IFRS adjusted profit attributable to equity holders of the Company increased by $2.6 million, or 29.9%, to $11.4 million, or $0.53 per ADS, compared to $8.8 million, or $0.47 per ADS for the nine month period ended September 30, 2011. 

·Non-IFRS adjusted EBITDA increased by $7.8 million, or 50.4%, to $23.4 million for the nine month period ended September 30, 2012, compared to $15.6 million for the nine month period ended September 30, 2011. 

It was yet another strong quarter for the Company in the face of challenging macro-economic conditions for our clients, said Christopher Dalton, President and Chief Executive Officer of Acquity Group.  Our deep, and strengthening, work with recognized global clients is a critical component of our success.  We have been able to sustain our current level of growth with a diligent focus on executing our business strategy.  We are capturing market share in both the business-to-consumer and business-to-business spaces and our clients continue to turn to Acquity Group to help them reinvent their digital Brand e-Commerce business models in the face of secular industry changes, changing demographics, and a new era of mobile, social, analytics and digital technologies.  

Paul Weinewuth, Chief Financial Officer of Acquity Group, said, Our utilization remains strong, driven by deepened client relationships and robust interest in our expertise in Brand eCommerce and Digital Marketing services.  Our performance strength continues to bump up against continued economic headwinds, and as a result we are maintaining a cautious outlook for the fourth quarter.  We are also looking towards conversion to U.S. GAAP next year, which will also include implementation of a new

·Named the ninth largest digital agency for U.S. mobile revenue by Advertising Age

·Cited as an emerging example of a business transformer in the July 2012 Forrester Research, Inc. report, The New Interactive Agency Landscape

Third Quarter 2012 Financial Results

Three Month Period Ended September 30, 2012 Compared to Three Month Period Ended September 30, 2011

Revenues increased by $7.7 million, or 26.0%, to $37.3 million for the three month period ended September 30, 2012, from $29.6 million for the three month period ended September 30, 2011.  Revenues continued to grow due to strong demand seen in the market place for the Companys expertise and focused approach to delivering customer value. 

Cost of revenues increased by $5.3 million to $21.0 million for the three month period ended September 30, 2012, from $15.7 million for the three month period ended September 30, 2011, which was primarily driven by continued organic growth of our staff to accommodate the demand for our services.  These costs increased as a percentage of revenues to 56.4% for the three month period ended September 30, 2012, from 53.2% for the three month period ended September 30, 2011. 

Selling and marketing expenses increased by $0.3 million to $2.4 million for the three month period ended September 30, 2012, from $2.1 million for the three month period ended September 30, 2011.  These costs decreased as a percentage of revenues to 6.3% for the three month period ended September 30, 2012, from 7.1% for the three month period ended September 30, 2011.  This improvement was the result of leveraging our experienced sales force and entering into engagements that fit our growth model. 

Administrative expenses increased by $2.1 million to $7.5 million for the three month period ended September 30, 2012, from $5.4 million for the three month period ended September 30, 2011.  These costs increased as a percentage of revenues to 20.0% for the three month period ended September 30, 2012, from 18.3% for the three month period ended September 30, 2011.  The increase was primarily due to an increase in operations headcount in order to support the growth of our business. 

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Equity in losses of joint ventures was $0.3 million for the three month period ended September 30, 2012, compared to $0.4 million for the three month period ended September 30, 2011. 

Income tax expense was $2.9 million and $2.2 million for the three month periods ended September 30, 2012 and September 30, 2011, respectively.  Our effective tax rate was 48.5% and 41.8% for the three month periods ended September 30, 2012 and September 30, 2011, respectively.  The increase for the three month period ended September 30, 2012, compared to the three month period ended September 30, 2011 was primarily attributable to losses from non-U.S. operations for which no tax benefit was available and an increase in state taxes. 

Nine Month Period Ended September 30, 2012 Compared to Nine Month Period Ended September 30, 2011

Revenues increased by $31.2 million, or 41.1%, to $107.2 million for the nine month period ended September 30, 2012, from $76.0 million for the nine month period ended September 30, 2011.  Revenues increased as a result of our continued focus on being one of the best providers in Brand eCommerce and Digital Marketing service capabilities and our ability to continue to secure new accounts that are committed to the digital channel. 

Cost of revenues increased by $16.3 million to $59.1 million for the nine month period ended September 30, 2012, from $42.8 million for the nine month period ended September 30, 2011, which was primarily driven by organic growth of our staff to accommodate the demand for our services.  These costs decreased as a percentage of revenues to 55.1% for the nine month period ended September 30, 2012, from 56.3% for the nine month period ended September 30, 2011. 

Selling and marketing expenses increased by $1.2 million to $6.8 million for the nine month period ended September 30, 2012, from $5.6 million for the nine month period ended September 30, 2011.  These costs decreased as a percentage of revenues to 6.3% for the nine month period ended September 30, 2012, from 7.4% for the nine month period ended September 30, 2011.  This improvement was the result of leveraging our experienced sales force and entering into engagements that fit our growth model. 

Administrative expenses increased by $6.6 million to $21.6 million for the nine month period ended September 30, 2012, from $15.0 million for the nine month period ended September 30, 2011.  These costs increased modestly as a percentage of revenues to 20.1% for the nine month period ended September 30, 2012, from 19.8% for the nine month period ended September 30, 2011.  The increase was primarily due to an increase in operations headcount in order to support the growth of our business. 

Equity in losses of joint ventures was $1.2 million for the nine month period ended September 30, 2012, compared to $0.5 million for the nine month period ended September 30, 2011. 

Income tax expense was $8.5 million and $4.5 million for the nine month periods ended September 30, 2012 and September 30, 2011, respectively.  Our effective tax rate was 51.3% and 40.6% for the nine month periods ended September 30, 2012 and September 30, 2011, respectively.  The increase for the nine month period ended September 30, 2012, compared to the nine month period ended September 30, 2011 was primarily attributable to the impact of non-deductible costs related to our initial public

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offering (IPO), losses from non-U.S. operations for which no tax benefit was available and an increase in state taxes. 

Fourth Quarter 2012 Outlook

The Company currently expects the following financial results for the fourth quarter of 2012:

·Revenues are expected to be in the range of $36 million to $40 million; and

A conference call and webcast have been scheduled for 8:30 a.m. EDT today to discuss these results.  Details of the conference call are as follows:

Date:

Thursday, November 8, 2012

Time:

8:30 a.m. EDT (please dial in by 8:15 a.m.)

Dial-In #:

(800)920-8624 U.S. & Canada

+1(617) 597-5430 International

Confirmation code:

33160322

Alternatively, the conference call will be available via webcast at www.acquitygroup.com by clicking on the Investors tab. 

Non-IFRS Financial Measures

Acquity Group provides non-IFRS financial measures to complement reported IFRS results.  Management believes these measures help illustrate underlying trends in the Companys business and uses the measures to establish budgets and operational goals, communicated internally and externally, for managing the Companys business and evaluating its performance.  The Company anticipates that it will continue to report both IFRS and certain non-IFRS financial measures in its financial results, including non-IFRS results that exclude interest, income tax provisions, depreciation and amortization, costs associated with its initial public offering, equity in losses of its joint ventures, acquisition costs and other related charges, among other costs.  Consequently, Acquity Groups non-IFRS financial measures should not be evaluated in isolation or as a substitute for IFRS measures, but, rather, should be considered together with its consolidated financial statements, which are prepared according to IFRS. 

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Special Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements.  These statements are made under the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995.  These forward-looking statements can be identified by terminology such as aim, anticipate, believe, confident, continue, estimate, expect, future, intend, is currently reviewing, it is possible, likely, may, plan, potential, will or other similar expressions or the negative of these words or expressions.  The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs.  In particular, the section entitled Fourth Quarter 2012 Outlook in this announcement consists of forward-looking statements.  Statements that are not historical facts, including statements about the Companys beliefs and expectations, are forward-looking statements and are subject to change, and such change may be material and may have a material adverse effect on the Companys financial condition and results of operations for one or more periods.  Forward-looking statements involve inherent risks and uncertainties.  A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements in this announcement.  Potential risks and uncertainties include, but are not limited to, the risks outlined in the Companys Registration Statement on Form F-1 and other documents filed with the U.S. Securities and Exchange Commission.  Unless otherwise specified, all information provided in this announcement and in the attachments is as of the date of this announcement, and the Company does not undertake any obligation to update any such information, except as required under applicable law. 

About Acquity Group Limited

Acquity Group Limited is a leading Brand eCommerce and Digital Marketing company that leverages the Internet, mobile devices and social media to enhance its clients brands and e-commerce performance.  It is the digital agency of record for a number of well-known global brands in multiple industries.  Acquity Group Limited has served more than 500 companies and their global brands through eleven offices in North America and three offices in Asia.  For more information about Acquity Group Limited, visit www.acquitygroup.com. 

On May 2, 2012, the Company completed the initial public offering of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol AQ. Pursuant to our registration statement filed with the U.S. Securities and Exchange Commission, each American depositary share presented in the consolidated statement of comprehensive income represents two ordinary shares outstanding. 

7

Acquity Group Limited

Consolidated Statements of Financial Position - Unaudited

(Amounts in thousands)

September 30, 2012

December 31, 2011

Assets

Non-current assets

Property and equipment, net

$

4,782

$

3,648

Intangible assets

24,493

26,428

Other non-current assets (1)

4,844

74

Investment in joint ventures

2,559

3,887

Deferred tax assets

5,336

4,521

42,014

38,558

Current assets

Trade receivables

27,901

19,906

Unbilled receivables

11,514

8,056

Due from customers under fixed-price contracts

371

456

Prepayments and other receivables

1,842

3,096

Restricted cash



2,600

Cash and cash equivalents

31,319

6,875

Total current assets

72,947

40,989

Total assets

$

114,961

$

79,547

Equity and liabilities

Equity

Issued capital

$

5

$

4

Capital reserve

96,577

71,030

Other comprehensive income/(losses)

(43

)

68

Retained profit / (losses)

763

(7,413

)

Equity attributable to equity holders of parent

97,302

63,689

Non-controlling interests

599

745

Total equity

97,901

64,434

Non-current liabilities

Other non-current liabilities

6,332

5,379

6,332

5,379

Current liabilities

Trade payables

1,532

1,499

Other payables and accruals

7,612

8,159

Due to customers under fixed-price contracts

116

41

Accrued income taxes

1,468

35

10,728

9,734

Total liabilities

17,060

15,113

Total equity and liabilities

$

114,961

$

79,547

(1)

As of September 30, 2012, other non-current assets primarily consists of deposits for joint venture related to an additional investment in our Huaren Kudong Commercial Trading Co., Ltd. joint venture.  We are awaiting approval from the Chinese government, at which time the funds will be reclassified to Investment in joint ventures on the consolidated statement of financial position. 

8

Acquity Group Limited

Consolidated Statements of Changes in Equity - Unaudited

(Amounts in thousands)

Issued capital

Capital reserve

Other

comprehensive

income

Retained profit/

(losses)

Equity attributable

to equity holders of

parent

Non-controlling

interests

Total equity

As of 31 December 2010

$

4

$

71,030

$



$

(16,020

)

$

55,014

$

983

$

55,997

Profit/(loss) for the period

1,420

1,420

(2

)

1,418

Other comprehensive income

5

5

2

7

Total for the period





5

1,420

1,425



1,425

As of 31 March 2011

$

4

$

71,030

$

5

$

(14,600

)

$

56,439

$

983

$

57,422

Profit/(loss) for the period

2,238

2,238

(30

)

2,208

Other comprehensive income

21

21

10

31

Total for the period





21

2,238

2,259

(20

)

2,239

As of 30 June 2011

$

4

$

71,030

$

26

$

(12,362

)

$

58,698

$

963

$

59,661

Profit/(loss) for the period

3,145

3,145

(130

)

3,015

Other comprehensive income

23

23

12

35

Total for the period





23

3,145

3,168

(118

)

3,050

As of 30 September 2011

$

4

$

71,030

$

49

$

(9,217

)

$

61,866

$

845

$

62,711

Profit/(loss) for the period

1,804

1,804

(111

)

1,693

Other comprehensive income

19

19

11

30

Total for the period





19

1,804

1,823

(100

)

1,723

As of 31 December 2011

$

4

$

71,030

$

68

$

(7,413

)

$

63,689

$

745

$

64,434

Profit/(loss) for the period

3,845

3,845

(64

)

3,781

Other comprehensive income

2

2

2

Total for the period





2

3,845

3,847

(64

)

3,783

As of 31 March 2012

$

4

$

71,030

$

70

$

(3,568

)

$

67,536

$

681

$

68,217

Profit/(loss) for the period

1,154

1,154

(40

)

1,114

Other comprehensive income

(69

)

(69

)

(69

)

Issuance of American depositary shares, net of offering costs (1)

1

25,547

25,548

25,548

Total for the period

1

25,547

(69

)

1,154

26,633

(40

)

26,593

As of 30 June 2012

$

5

$

96,577

$

1

$

(2,414

)

$

94,169

$

641

$

94,810

Profit/(loss) for the period

3,177

3,177

(42

)

3,135

Other comprehensive income

(44

)

(44

)

(44

)

Total for the period





(44

)

3,177

3,133

(42

)

3,091

As of 30 September 2012

$

5

$

96,577

$

(43

)

$

763

$

97,302

$

599

$

97,901

(1)

During the three month period ended June 30, 2012, the Company recorded an additional issued capital and capital reserve related to the issuance of the Companys IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012, and was offset by costs associated with the IPO in accordance with IFRS rules. 

9

Acquity Group Limited

Consolidated Statements of Cash Flows - Unaudited

(Amounts in thousands)

Nine Month Periods Ended

September 30, 2012

September 30, 2011

Operating activities:

Profit before tax

$

16,487

$

11,182

Adjustments to reconcile profit before tax to net cash flows from operating activities:

Non-cash:

Depreciation of property and equipment

1,552

1,007

Amortization of intangible assets & straight-line rent

2,033

1,983

Impairment loss of trade receivables

180



Finance costs

(9

)

(33

)

Equity in losses of joint ventures

1,215

530

Working capital adjustments:

Trade receivables and unbilled receivables

(11,633

)

(9,028

)

Due from customers under fixed-price contracts

85

(227

)

Prepayment and other receivables

(432

)

(223

)

Trade payables

33

(353

)

Other payables and accruals

(538

)

237

Due to customers under fixed-price contracts

75

8

Other non-current assets

(8

)

(8

)

Income tax paid

(5,675

)

(3,600

)

Net cash flows generated from operating activities

3,365

1,475

Investing activities:

Purchase of property and equipment

(2,686

)

(1,654

)

Purchase of intangible assets



(157

)

Decrease/(increase) in restricted cash

2,600



Investment in joint venture



(4,822

)

Loan receivable from officers of Acquity Group LLC



(4,193

)

Increase in deposits for joint venture (1)

(4,762

)



Loan to joint venture

(270

)

(97

)

Net cash flows used in investing activities

(5,118

)

(10,923

)

Financing activities:

Proceeds from issuance of American depositary shares

28,667



Payment of costs associated with initial public offering

(2,470

)

(442

)

Net cash flows generated from/(used in) financing activities

26,197

(442

)

Net increase/(decrease) in cash and cash equivalents

24,444

(9,890

)

Cash and cash equivalents at the beginning of the period

6,875

12,428

Cash and cash equivalents at the end of the period

$

31,319

$

2,538

(1)

For the nine month period ended September 30, 2012, the increase in deposits for joint venture relates to an additional investment in our Huaren Kudong Commercial Trading Co., Ltd. joint venture.  We are awaiting approval from the Chinese government, at which time the funds will be reclassified to Investment in joint ventures on the consolidated statement of financial position. 

Adjusted profit per share attributable to equity holders of the Company:

American depositary shares (3)

$

0.15

$

0.23

$

0.53

$

0.47

Ordinary shares

$

0.08

$

0.12

$

0.27

$

0.24

Shares used in computing profit per share:

American depositary shares (3)

23,516.4

18,738.6

21,476.3

18,738.6

Ordinary shares

47,032.8

37,477.3

42,952.5

37,477.3

(1)

The Company includes these adjusted calculations for the three and nine month periods ended September 30, 2012 and September 30, 2011 because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making. 

Accordingly, the Company believes that the presentation of this analysis, when used in conjunction with IFRS financial measures, is a useful financial analysis tool that can assist investors in assessing the Companys operating performance and underlying prospects.  This analysis should not be considered in isolation or as a substitute for profit/(loss) prepared in accordance with IFRS.  This analysis, as well as the other information in this press release, should be read in conjunction with the Companys financial statements and related footnotes contained in the documents that the Company files with the U.S. Securities and Exchange Commission. 

(2)

The three and nine month periods ended September 30, 2012 and September 30, 2011 include costs associated with the Companys IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012.  The Company recorded this charge in accordance with IFRS rules, which allow the Company to (1) fully capitalize costs directly attributable to the IPO and (2) capitalize a portion of costs indirectly attributable to the IPO, based on the size of the offering. 

(3)

On May 2, 2012, the Company completed the initial public offering of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol AQ. Pursuant to our registration statement filed with the Securities and Exchange Commission, each American depositary share presented in the Reconciliation of Non-IFRS Financial Measures to IFRS Profit represents two ordinary shares outstanding.