Cello Health plc Annual Report 2017

Cello Annual Report 20172
HIGHLIGHTS
Who We Are 4
Progress Against Our Strategic Priorities 10
Key Financial Metrics 12
STRATEGIC REPORT
Chairman’s Statement 15
Our Marketplace 16
Our Business Model 22
Strategic Priorities 23
Chief Executive’s Operational Review 24
Group Finance Director’s Report 32
STRATEGY IN ACTION
The Work We Do 37
Cello Health Logic 43
Acquisitions 44
PEOPLE, CULTURE AND CORPORATE
SOCIAL RESPONSIBILITY
Our People 48
Cello Culture 52
Corporate Social Responsibility 54
Contents
CORPORATE GOVERNANCE
Directors’ Report 56
Corporate Governance Report 60
Report of the Remuneration Committee 62
CONSOLIDATED FINANCIAL
STATEMENTS
Independent Auditors’ Report 64
Consolidated Financial Statements 70
Accounting Policies 75
Notes to the Consolidated
Financial Statements 80
COMPANY FINANCIAL STATEMENTS
Independent Auditors’ Report 109
Company Financial Statements 113
Accounting Policies 115
Notes to the Company
Financial Statements 118
OTHER INFORMATION
Notice of Annual General Meeting 121
Directors’ Biographies 126
Advisers 128
Cello Annual Report 2017 3

Who We Are
A global healthcare-
focused advisory
group comprised of a
distinct set of technical
advisory and digital
delivery capabilities.
“We enable clients to differentiate their propositions
and drive brand success in ever more complex global
markets. We deliver our services through nearly
1,000 highly skilled professionals utilising latest
thinking, technology and digital solutions.”
Mark Scott
CEO, Cello Group plc
OUR AMBITION
To be a truly global company of destination
and distinction.
• For our clients as their preferred partner of choice,
working with them to achieve commercial success.
• For our people to experience a rewarding
environment that enables them to achieve their
full potential.
• For our shareholders to benefit from the results
of a prosperous and successful company.

Can Do
To get things done,
on time, on brief
Our underlying work
ethos is the ‘Pursuit of
Better’; to never be content
with the status quo or
the delivery of just good
enough solutions.
We challenge ourselves and
our approaches to perform
to higher standards, to
deliver exceptional results.
This is represented in
our core values.
Who We Are
We, not I
Collaborative
Spirit
Constantly
Curious
Searching for deeper
understanding and
challenging latest thinking
Bold
To act with courage,
creativity and confidence
Passionate
In what we do and in
our delivery
Fresh
Thinking
Harnessing our talent to
deliver innovative solutions

Who We Are
INSIGHT AND
ANALYTICS
Cello Health Insight
Specialised healthcare market
research and analytic
capabilities. Our expert teams
work regularly with Global
Fortune 500 pharmaceutical
companies, as well as small
to mid-sized biotech and
medtech firms, designing
and delivering cutting edge
customer research. This
research leverages latest
qualitative and quantitative
methodologies, including
digital platforms and
behavioural economic thinking,
to enable clients to build a
deeper understanding of their
customers and markets.
This unique mix of capabilities,
combined with our collaborative
approach, results in a unique
‘fusion’ of expertise, providing
powerful advisory and
implementation solutions.
Our four core global capabilities
enable us to offer best in class services
and an integrated partnership
approach to our clients.
STRATEGY AND
COMMERCIAL
Cello Health Consulting
A consulting-led capability
with a unique blend of
commercially experienced
pharmaceutical and
biotechnology professionals
with deep scientific expertise
across key therapeutic areas.
Working across the product
lifecycle, with particular
expertise in early asset
development and
commercialisation, forecasting
and valuations, business
development, launch planning,
scenario and competitive
planning, brand and franchise
strategy development.
SCIENCE AND
EVIDENCE
Cello Health
Communications
A team of communication and
scientific evidence experts.
Skill sets combining science,
strategy and creativity to build
a foundational evidence base
and translating that into
outcome-focused behaviour
change. A range of skill sets
with a deep understanding
of the scientific evidence
behind molecules and a focus
on how data and other insights
are applied in a strategic
framework to support clinical
and commercial success.
Our approach spans Rx,
Devices, Diagnostics, OTC
and Nutraceuticals.
DIGITAL AND
CREATIVE
Cello Signal
A full-service digital capability
across content and mobile
infrastructure, and automation
and personalisation in
multichannel CRM. We develop
data-led strategies and UX
planning to optimise the
customer experience and align
this to disruptive creative and
brand expression in campaigns,
content and film. Our
significant and growing
footprint in health (clinical,
consumer and public)
complements our other key
client digital and creative
sectors; technology and
gaming, charities and NFP and
financial services and utilities.
Our cross-industry expertise is
seen as a distinct advantage to
healthcare clients where the
use of digital strategies
and initiatives is in its
relative infancy.

Progress Against
Our Strategic
Priorities
1. GROWTH
a. Strong overall growth in our core Cello
Health operation, reflected in 9.2%
like-for-like growth in gross profit.
b. Good progress in developing our
market presence in early asset
development and commercialisation
across small biotech and larger
pharmaceutical companies.
c. Rapid US expansion driven by
organic progress in our science
and evidence business and the
successful acquisition and integration
of Defined Health and Advantage
Healthcare in 2017.
9.2% Like-for-like
growth in Health
Combined with strong
organic growth, the
US now contributes
45% of Cello Health’s
GP (2016: 35%).
“2017 represented a
year of investment
and strengthening of
our core operations,
whilst making
significant progress
against our three key
strategic priorities of
growth, innovation
and leveraging
key assets.”
Mark Scott
CEO, Cello Group plc
3. LEVERAGING
a. Significant progress was made in
leveraging our core digital and
creative skills from Signal into Signal
Health, with health orientated clients
now accounting for 14% of Signal’s
gross profit.
b. Collaboration continues at a pace.
c. Collaborative wins have contributed
£15.0m of gross profit to the business
since 2015.
2. INNOVATION
a. Continued development and
commercialisation of a range of
digital research tools and services
delivered strong growth in our
research capability.
b. Our core range of strategic planning
tools and customised forecasting
models helped bolster our ‘Launch
Excellence’ business which grew
strongly in 2017.
c. Pulsar, our social media analytics
platform, has grown from strength
to strength with growth in software
licences from 257 in 2016 to
346 in 2017.
£15.0m
Collaborative
wins since 201580%
Pulsar at 80%
renewals and
346 clients

LONDON
FARNHAM
EDINBURGH
CHELTENHAM
NEW YORK
SAN FRANCISCO
CHICAGO
PHILADELPHIA
UK US
Key Financial Metrics
Headline
Operating Profit
Headline
Gross Profit
Cello SignalCello Signal
Cello HealthCello Health
Gross Profit (£m)Dividend per Share (p)
Key Locations
2017 3.50
2015
2013
2.86
3.402016
2014 2.60
2.25
2017 102.5
2015
2013
86.5
92.72016
2014 81.0
74.7
£3.9m
£10.6m
£41.0m
£60.2m
% Split UK vs US Gross Profit Growth
OFFICES
14
978STAFF
Number of Staff
Number of Offices
2017
70/30
2016
77/23
2015
80/20
2014
83/17
2013
83/17
vs

Chairman’s Statement
Summary
We continue to deliver a consistent
performance, with the Group reporting a
10.6% increase in gross profit to £102.5m
(2016: £92.7m), with headline profit
before tax up 11.9% to £11.4m (2016:
£10.2m). Reported profit before tax was
£5.8m (2016: reported loss of £1.7m).
Total dividends per share increased to
3.50p per share, adding to an 11-year
record of dividend increases.
Cello has evolved significantly over the
years to where we are now: a global
health-focused marketing advisory
company that is the partner of choice
for many of the top pharmaceutical,
biotech and healthcare organisations
globally. We work with 24 of the top 25
pharmaceutical companies.
Cello’s focused strategy has delivered a
strong performance across our health
operations, with 9.2% constant currency
like-for-like gross profit growth from
Cello Health, and a competitive profit
margin of 17.7% (2016: 18.1%). In
addition, we were able to invest in
strengthening our core operations and
market position in 2017.
2017 saw the successful addition to the
Cello family of two further US
acquisitions: Defined Health, and
Advantage Healthcare. Both are
excellent organisations with passionate
staff, high-quality clients and strongly
differentiated service offerings. The US
now contributes 45.1% of Cello Health’s
gross profit (2016: 35.1%).
Cello Signal had an acceptable year
against a tough comparative. Operating
margins were maintained at 9.5% (2016:
10.3%) despite a 6.8% like-for-like
constant currency decline in gross profit.
The Group ended the year in a net cash
position and recently renewed its
banking facilities with RBS. This puts
the Group in a good position to expand
further as high-quality acquisitions and
start-up opportunities in the health
space are identified.
We begin 2018 with a positive outlook.
We expect to continue to leverage the
benefits of collaboration across the
Group, particularly as a result of our
new acquisitions. We will continue to
invest in market expansion, specifically
in the US and, as a matter of priority,
leverage Signal’s innovative digital
capability into the healthcare market.
We are excited to imminently change
the name of the business to Cello Health
Group plc to better reflect our focus.
Steering a
Clear Course

Our Marketplace
The healthcare market is set to continue to
drive demand for our services.
Ageing populations, with their myriad age-related
diseases, together with advances in scientific
understanding, diagnosis and treatments continue to
produce an underlying requirement for health
solutions. Combined with the strength of our clients’
R&D pipelines (see Fig.1) and the challenges (see
Fig.2) they face in ensuring every product that makes
it to market is a commercial success, means that
clients will continue to value the services that
Cello provides.
The move from the traditional blockbuster to
speciality medicines requiring the use of biotech
technology will continue to gain pace. Current
forecasts predict that biotech will contribute 52%
of the top 100 product sales by 2022 (see Fig.3),
overtaking small molecule drugs such as Viagra or
Lipitor. This reflects rapidly evolving cutting edge
science. This acceleration in scientific understanding
including new technology and genomics is resulting in
new and often personalised treatments, including
some groundbreaking advances and cures for
previously life-threatening conditions. Healthcare is
changing. The definition of a blockbuster is evolving
as new therapies are designed and targeted against
multiple connected diseases and indications. Medicine
is becoming much more targeted to specific patient
populations and conditions requiring integrated
diagnostics and more holistic solutions.
Health,
Technology
and Digital –
our Markets
of the Future
Ageing
Population
of 65+ will
be 1.6bn
by 2025
Source: US Census Bureau
– An Aging World
Implications for our clients
To stay ahead of the curve in this
rapidly developing market, our
clients need to invest earlier in
start-ups, biotechs and
promising new platform
technology and make earlier
decisions on whether to back an
asset or invest in a particular
area of science. They also need
to decide earlier on the commercial platform used to inform their
clinical trial programs.
As continued financial pressures impact all sectors, health is not an
exception, driven by a combination of pricing pressures, an
increased drive towards generics and biosimilars and the ongoing
costs of bringing novel therapies to market. Pharmaceutical and
biotech companies are having to find new approaches to pricing,
demonstrating value, managing costs, and sharing risks
expectations around outcomes-based medicine.
In 2017 our
Insight operation
delivered projects
across 17 rare
disease areas.
1,000 14,000
12,013Pre-clinical
21Phase 0
3,497Phase I
3,530Phase II
1,399Phase III
364Pre-registration
Source: https://pharma.globaldata.com (accessed 22 Nov 2017).
Source: DIMasI JA, Grabowski HG, Hansen RW. Innovation in the pharmaceutical industry:
new estimate of R&D costs. J Health Economics. 2016;47:20-33.
1,000 14,000
12,013Pre-clinical
21Phase 0
3,497Phase I
3,530Phase II
1,399Phase III
364Pre-registration
1970s 1980s 1990s-
early 2000s*
2000s-
early 2010s
Average Cost to Develop One New
Approved Drug – Including the Cost
of Failures (in Constant 2013 Dollars)
$2.6bn
$1.0bn
$413m$179m
Clients cannot
afford to get
it wrong.
They need to
maximise success
of every single
product approved.
FIG 4:
The Costs of Drug Development Have More Than Doubled Over the Past Decade
*Previous research by same author estimated average R&D costs in the early 2000s at $1.2 billion
in constant 2000 dollars (see DIMasI JA, Grabowski HG. The cost of biopharmaceutical R&D: is biotech
different? Managerial and Decision Economics. 2007;28 : 469-479). That Estimate is based on the same
underlying survey as the author's estimates for the 1990s to early 2000s reported here ($800 million
in constant 2000 dollars), but updated for changes in the cost of capital.
Source: DIMasI JA, Grabowski HG, Hansen RW. Innovation in the pharmaceutical industry:
new estimate of R&D costs. J Health Economics. 2016;47:20-33.
Clients cannot
afford to get
it wrong.
They need to
maximise
success of every
single product
approved.
Fig 1. Pipeline drugs (20,824 drugs in development)
Fig 2. The cost of drug development

2017 saw our
Insight capability
complete over
86 projects with
specific focus
on the patient.
In this environment, communication of a value story is critical
to support not only successful market access or
reimbursement outcomes for a product, but indeed to ensure
overall successful commercialisation. Clients look to Cello to
not only translate complex science into its commercial
significance but also reinforce the value of a product by
integrating health outcomes research and real world evidence
into the clinical story to payers and other key stakeholders.
Significance to Cello
Clients will continue to look to external partners like Cello to
provide scientific expertise, commercial understanding,
thought leadership and market research capabilities to
ensure their clinical trials, communications and commercial
strategies are based on a true understanding of the science,
the market and its myriad customers and competitors.
Additionally, clients are increasingly seeking support in
helping them integrate novel technologies including
diagnostics, biomarkers and patient support programmes
into their overall value offer. Specifically, they are seeking to
understand how to build innovation into the service offering,
how to price, how to demonstrate value and gain market
access; all key challenges that require our services.
Looking at the wider healthcare market, ever more
governments are encouraging patients to take an active
role in their own healthcare. Stopping illness in its tracks
before it becomes chronic is the holy grail of long-term
health transformation. Patient-focused programmes have
been in strong demand in 2017, as the patient journey has
become an increasingly critical component of medical and
marketing strategy.
The rise of consumerism is not new, but pharma’s ability to
accommodate the patient voice or support patients
throughout the product life cycle is still evolving. With the
industry needing to enhance the way it supports patients,
patient support programmes become increasingly integral to
optimising the value of therapeutic assets in terms of
educating patients, improving adherence and
improving outcomes.
Fig 3. Biotech vs. Conventional
Use of biotech
technology continues to
rise, contributing to 52%
of the top 100 product
sales by 2022, overtaking
small molecule drugs.
Source: Evaluate, May 2017.
20%
Technology%ofPrescription&OTCSales
10%
30%
40%
50%
60%
70%
80%
90%
0%
2008
17%
83%
2009
17%
83%
2010
18%
82%
2011
18%
82%
2012
20%
80%
2013
22%
78%
2014
23%
77%
2015
24%
76%
2016
25%
75%
2017
26%
74%
2018
27%
73%
2019
28%
72%
2020
29%
71%
2021
29%
71%
2022
30%
70%
Biotechnology Conventional/Unclassiﬁed
Biotech Products Within Top 100
Rapid increase in share of Top 100 products:
- 2008: 30%
- 2016: 49%
- 2022: 52%
2022 Split:
Biotech: n=48 (avg. $3.5bn)
Conv.: n=52 (avg. $3.0bn)
30%
70%
49%51% 52%48%
Given the way consumer-based
technology and digital solutions have
evolved, health in its widest sense is
also no longer associated purely with
hospitals, GPs and prescription
medicines. For Cello this means that
our client base has evolved and now
covers traditional pharmaceutical
organisations, emerging biotech,
medtech, device, consumer health
companies and health organisations
that focus on social health awareness
issues.
As a result, the breadth of our service
offering is also expanding. In
addition, the strengths we have
across the Group in Cello Health with
our deep dive technical expertise and
Cello Signal with its core digital and
creative competence, provide the
critical areas of expertise that our
clients need to support them in the
years to come.
DIGITAL AND DATA-DRIVEN
INNOVATION
Digital and data-driven innovation
continues unabated as clients seek to
harness technology to bring better
insight, reach, targeting and
experiences to customers
and stakeholders.
While discretionary spend against
generic concepts of research and
marketing continue to be cyclical and
impacted to a certain extent by
macroeconomic sentiment, particularly
outside our core health domain, clients
are still willing to invest heavily in
future proofing their businesses and
using digital innovation to gain
competitive advantage. This is where
Cello is strong.
The nature of this work inevitably
moves us beyond marketing services
and increasingly into wider business
solutions, and specifically ones where
data and digital-orientated platforms
play a key role, for example social
listening and analytics.
The rising power of the
‘Health Consumer’
Shifts across both clinical and
consumer health stimulate client need
for our services. We have seen a significant change in how
health information is accessed, which now places the
patient at the centre. Social groups, patient associations,
the role of social media through its various channels, digital
data, wearable and connected technology are all having a
major impact on how both healthcare professionals and
patients receive and disseminate information. Clients need
our help to understand the best way to engage with this
new environment.
Historically, communications were based on a push
strategy, with healthcare professionals as the main target
and targeted directly by our clients. This has changed to
multiple stakeholders, all with their individual
communication needs – key clinician opinion leaders,
payers, regulatory groups, patient groups, and the
patient directly.
This requires our clients to implement a much more
sophisticated multi-channel approach with a high level of
complexity that requires our external support, not only in
an advisory capacity but also to move from strategy to
creative execution. Cello is ideally positioned to address
these needs, with our core strength in pharmaceutical and
consumer marketing, utilising the latest digital and
creative solutions.

APPLICATION OF OUR DIGITAL
AND CREATIVE SKILL SET IN THE
HEALTH SECTOR PROVIDES CELLO
WITH A SIGNIFICANT OPPORTUNITY
FOR GROWTH
As clinical and consumer health markets continue to
evolve, the ability of our digital and creative teams
to personalise communication down to the
individual level has significant application in the
health arena. Although there are still limitations in
gaining direct access to patients, audiences are
becoming increasingly educated and engaged in
managing their own health and wellbeing. Their
desire to better understand their conditions,
treatment and related lifestyle choices offer the
opportunities for the pharmaceutical client
community to engage directly in supporting the
patient journey with personalised guidance.
This concept is already well established within the
rare diseases sphere and will increasingly become
mainstream as patients of more common conditions
become more able to input relevant, protected data
about their conditions and receive personalised
support and communication. In many cases this
input can be collected via patient-wearables. This
patient-driven appetite for engagement is likely to
grow in the long-term.
Our work with banks and utilities has direct
application to this healthcare opportunity. For
example, we have built a technology platform that
allows a major UK banking group to send each of its
individual customers a personalised video regarding
such products as car loans. The process is
automated and ensures that each customer receives
simple-to-follow and empathetic communication
about the specific terms and benefits of their loan.
This approach has obvious applications, in areas
such as diabetes, where wearable glucose monitors
and insulin delivery devices are fast becoming the
norm. Personalised video guidance for new patients
that acknowledges who they are, their diagnosis,
location and lifestyle is far more likely to engage
than a generic print format. Cello is uniquely
positioned to capitalise on this client need and able
to offer an integrated service with blended skills.
“Digital data, social
media, wearable and
connected technology
is impacting all kinds
of areas in healthcare
including the collection
of real world evidence
and clinical trial design;
particularly with the
uploading of real time
patient information.”
“As these shifts across both clinical and
consumer health continue to evolve, the
ability of our core digital and creative
team to personalise communication down
to the individual level has enormous
application in the health arena.”
“Our strategy as a
business is clear. We
will continue to focus,
realign and leverage
our digital and creative
ability that largely
resides in Signal to
support our health
agenda. Our health
clients in the widest
sense value the
expertise of this team
and want this wider
lens when addressing
their challenges
to ensure a
fresh perspective.”
John Rowley, CEO Cello Signal

Our Business
Model
A GLOBAL
COMPANY OF DISTINCTION
1. That enables our clients to address
mission critical issues and decisions.
2. With deep dive technical advisory, creative,
scientific, commercial and consumer
expertise at the heart of the company.
3. That leverages these different skills to
meet client need in a profitable manner.
INSIGHT
&
ANALYTICS SCIENCE
&
EVIDENCE
DIGITAL &
C
R
EATIVE
STRATEGY&
CO
M
M
ERCIAL
BESTINCLASS
SER
V
ICES
STRONG
TECH
N
ICALADVISORYSKILLSETS
BLENDED EXPERT TEAMS
DIAG
N
O
STICS
PHARM
ACE
U
TICAL
B
IO
TECH
CONSUMER
HE
A
LTH
&
W
ELLBEING
Strategic Priorities
To deliver sustained growth,
employee development and
shareholder value focusing on the
following three key strategic priorities:
1. GROWTH
Continue to drive organic growth across all
of our key capabilities, expanding:
a. our global footprint, and specifically our
presence within the US market,
b. our position within early asset development
and commercialisation, and
c. our footprint beyond core pharmaceuticals,
biotech and medtech into the broader health
and wellbeing market.
In so doing, seek to increase margins, delivering
improved profitability.
2. INNOVATION
To continue to innovate in our thinking, service
offering and products, capitalising wherever
possible on the range of technical and digital
advances available. We will continue to enhance
our reputation by offering highly differentiated
services, leveraging our strong market presence
across all of our capabilities.
3. LEVERAGING
To smartly leverage the different key assets
across Cello through alignment of businesses,
collaboration, product development and
integrated solutions.
INSIGHT
&
ANALYTICS SCIENCE
&
EVIDENCE
DIGITAL &
C
R
EATIVE
STRATEGY&
CO
M
M
ERCIAL
BESTINCLASS
SER
V
ICES
STRONG
TECH
N
ICALADVISORYSKILLSETS
BLENDED EXPERT TEAMS
DIAG
N
O
STICS
PHARM
ACE
U
TICAL
B
IO
TECH
CONSUMER
HE
A
LTH
&
W
ELLBEING

Chief Executive’s
Operational Review
Building on
our strengths
2017 represented a year of investment and
strengthening of our core operations,
whilst making significant progress against
our three key strategic priorities of growth,
innovation and leveraging key assets
across the Group. The core operations of
Cello Health (namely Cello Health
Communications, Cello Health Insight and
Cello Health Consulting) all made strong
progress in 2017. The capability formerly
represented by Cello Health Consumer was
consolidated into these three core
capabilities to maximise revenue from
those operations. The fourth pillar of Cello
Health is now serviced by Cello Signal,
which is bringing its digital skills and
consumer knowledge to bear on Cello
Health’s core agenda.
Cello Annual Report 201724 Cello Annual Report 2017 25

2017 has shown the benefits of our strategy of
focusing the Group on its two key areas of
strength: healthcare-focused advisory services
and digital solutions.
• Overall constant currency like-for-like gross
profit growth in our Cello Health operations of
9.2% was driven by good performance across
our core health operations. This growth has
been achieved as a result of continued
investment across all of our core operations in
expanding our geographic coverage,
establishing the right infrastructure,
capabilities and processes. This includes
bringing in significant leadership and middle
tier management, particularly in our
consulting business, with new recruitment
approaches and enhanced personal
development and performance management.
• The US market is a key territory for us and is
critical to our long-term growth aspirations.
2017 delivered a strong performance in this
region. The US share of Cello Health gross
profit has now increased to 45.1% from 35.1%
in 2016. In addition to our strong overall
organic growth, 2017 saw the successful
acquisition and integration of Defined Health
and Advantage Healthcare. These acquisitions
represent an important expansion of our
capability as Cello Health continues to migrate
towards cutting edge science.
• Cello Health continues to reinforce its
market presence by creating larger
resource hubs in key geographies. 2017 saw
the relocation of the consulting capability in
the UK to the same office as the UK
communications capability at Cello House
in Farnham. We have also unified our
European Communications capability into
Cello House, strengthening our offering
under a single capability umbrella. Similarly,
we moved into new office premises in New
York. In both cases we paid special
attention to how we would use the space to
enhance creativity, collaboration on
projects and new business activity.
Chief Executive’s
Operating Review
“89% of our business
in 2017 was from
clients who have
used us more
than once.”
Jane Shirley
Global CEO, Cello Health Insight
Growth
• Our core client base is robust and continues to
grow from strength to strength, with
relationships in place with 24 of the top 25
pharmaceutical companies. We secured 49
new client wins overall in 2017, with 23
specifically in the US. We have also focused on
increasing the average size of client
engagements. Increased investment in
marketing and business development
resources has seen significant strengthening
in our business development pipeline globally.
• Our core digital operations under the Signal
brand delivered a reduced trading result,
largely reflecting the long anticipated
cessation of two significant one-off client
projects in 2016. Importantly, as well as
supporting Cello Health’s core pharmaceutical
client base, Signal is making rapid progress in
developing business across a wide range of
health and wellbeing clients, notably:
– Digital communications – working for
EFPIA, Dexcom, Stryker and BUPA dental.
– Insight – Public Health England, Wellcome
Trust and Tesco own label health lines.
– Wellbeing – The Federation for Disability
Sport and The Food Doctor.
• We have consolidated our core digital
operations into three key operational
office hubs, in Cheltenham, London and
Edinburgh. All three offices work closely
together, sharing business development
and professional resource. This has enabled
a smoother sharing of technology and
technical expertise between locations.
It is also the key to raising operating
margins. In 2017 action was taken in the
US research business to reduce professional
costs, resulting in an exceptional charge.
This should feed through into margin
enhancement in due course.
“We continue to see the breadth of market where
our services are required expanding. In 2017 we
have worked in more than 50 different geographic
markets, including 12 markets for the first time.”
Jane Shirley
Global CEO, Cello Health Insight

Cello’s ethos over the years has been to
constantly challenge ourselves to
improve and bring to the market
innovative services. In 2017 we invested
in existing operations as well as the
development of new initiatives to be
launched in 2018.
• 2017 saw continued success with our
range of digital offerings. Our core
Insight digital offering continued its
rapid growth based on its ‘Living
Lens’ searchable video technology
and a revamp of its eVillage offering.
IQ, our quantitative research practice,
had an equally strong year.
• Cello Health Insight invested in
developing and preparing the
organisation to launch a new service
offering, Cello Health Logic. Cello
Health Logic is both a data science
and social analytics unit that utilises
our proprietary Pulsar technology
with a focus on the health sector. In
addition, we have formed strategic
relationships with a number of key
partners, which will provide us with
access to the online ‘conversations’
and views of healthcare professionals.
• Pulsar, our social media analytics
platform, has continued its rapid pace
of development, ending 2017 with 346
clients, up from 257 in 2016, and a
monthly revenue run rate in software
licence sales of c. £0.5m. Cello Health
Logic is in the process of leveraging
the Pulsar software suite into the
healthcare market.
Innovation
• Cello’s overall digital capability divides into
the planning and building of digital
infrastructure (Content Management
Systems, Mobile Applications, Personalisation
and Automation Platforms) and Digital
Marketing (across SEO, PPC, Media, Creative
and Social). We also have a significant
footprint in data-led strategy as clients seek
to connect on and off-line channels to create
a seamless customer experience.
• In addition we have an extensive base of
highly innovative clients across technology,
entertainment and gaming. EA, Facebook,
Apple, Sony, HP, Netflix, NBC, Wargaming
and Ubisoft are all significant clients across
our insight, communication and innovation
teams. The very technologically advanced
nature of these clients helps shape how the
majority of consumers behave online.
Importantly, advances made with these
clients in these sectors provide a valuable
lens for our health clients who want to
benefit from leading-edge digital solutions
used in other markets.
• The digital capability that
resides in Signal has a very
specific role within Cello
Group as we seek to apply
innovation in audience
intelligence, digital
marketing and digital
infrastructure. We are
focusing on utilising that
innovation to grow our
health client base. Tech
and gaming, charities and
financial services are
sectors that health clients
are seeking to learn from in
applying digital techniques
to meet the complex
communication challenges
in their health markets.
• Signal’s health activity has
grown to around 14.0% of
gross profit as a result of
collaboration with Cello
Health and by direct client
wins in clinical and
consumer health. Signal
was appointed by the
European Federation of
Pharmaceutical Industries
and Associations to
manage their digital
campaign in its response
to growing concern about
the rising costs of
healthcare. In addition,
Oasis Dental, the UK’s
largest dental clinic
network, appointed Signal
to deliver their CRM,
digital marketing and SEO
activity. A further example
of our success in
leveraging our digital
expertise in healthcare is
our work with BUPA. We
delivered the re-brand of
its website and ensured it
carried over their local
SEO footprint on its
clinic-by-clinic basis. The
Signal Health team is also
working with a range of
other health clients.
• In 2017 we invested in a
shared business
development resource
which works in
co-ordination with our
capability teams. This is
yielding strong benefits in
new business levels across
the business as
professional resource is
being flexibly
deployed against global
opportunities.
Leveraging key assets

Our Future
Backing the right compound,
determining the best development
route and powering the right trial
construct is fundamental to
creating the basis of success for
our healthcare clients. This in turn
is underpinned by robust
commercial thinking, which our
clients now recognise has to take
place even earlier in the product
development process.
Our clients recognise that to successfully
commercialise their development assets they
need to create a powerful scientific and
health economic story based on a clear
understanding of the science, the clinical
profile of the product and the role it can play
in terms of health benefit to the patient
population overall. Our clients then have to
be able to devise a multi-channel, multi-
media communication solution that
addresses the needs of an ever more
complex stakeholder environment.
We are also contending with an acceleration
in patients understanding of what health
means to them. An increase in self-
determination and a more proactive attitude
to health by patients is changing the
healthcare landscape. Health now is no
longer associated with purely acute or
chronic care. The concept of health and
wellbeing touches all our lives and is
associated with multiple and varied situations
and products, whether it is fitness related,
healthy diet, healthy mindset or a healthy
lifestyle overall.
This is significant for Cello as we address a
health market that is ever broader and more
varied. The client opportunities are vast but
with the single unifying theme – health and
wellbeing. What does that mean for us as we
set our priorities towards 2020 and beyond?
• We will continue to broaden our focus on
the health market. Our clients will include
those involved in health consumer
products, healthy foods, wearable devices
and organisations that focus on the health
of consumers, all of whom want to see
positive behaviour changes towards
health, whether that be driven by
governments, health bodies or
commercial organisations.
• We will continue to build on our strong
market position with major
pharmaceutical companies, emerging
and established biotech and medtech
companies. We will have a particular
focus on building on our strong
position in early asset development
and commercialisation.
• We will continue to build a strong
scientific and analytical core to all of our
key services, adding to our current suite
of tools and processes that clients have
come to value.
• We will evolve further our ability to
collaborate across Cello, enabling our
clients to access unique integrated
teams of experts formed to meet their
specific needs, not only across our core
health practices but also leveraging our
digital capacity.
• We will continue to focus on developing
our US footprint. This is key to our
long-term growth and builds on our
success to date in this market.
Finally, and most importantly we will continue
to invest in building a strong vibrant
organisation, staffed with professionals who
are passionate about the company they work
for, the teams they support and the services
they deliver.
“Cello’s ethos over the years has
been to constantly challenge
ourselves to improve and bring
to the market innovative services.”

Group Finance
Director’s Report
Summary
Total Group gross profit was £102.5m (2016:
£92.7m) on revenues of £169.3m (2016:
£165.3m). Headline profit before tax was
£11.4m (2016: £10.2m). Like-for-like gross
profit growth for the whole Group was 2.5%.
Constant currency like-for-like1 gross profit
growth was 1.6%.
The Group’s headline operating margin2 was
11.7% (2016: 11.5%) with a headline operating
margin of 17.7% in Cello Health (2016: 18.1%),
and 9.5% in Cello Signal (2016: 10.3%).
Finance costs were £0.4m (2016: £0.3m).
These are expected to drop during the year as
debt drops.
The Group’s reported tax charge was £1.6m
(2016: £0.8m) with a headline tax rate of 28.2%
(2016: 25.7%). The headline tax rate has
increased as a consequence of higher relative
profits in the US in 2017, which currently attract
a higher tax rate. The Group has carried out a
preliminary assessment of the impact of the
forthcoming changes to the US tax regime.
This assessment shows that the headline tax
rate for the Group should drop by at least
three percentage points from 2018 onwards.
The reconciliation of the tax charge for 2017 to
reported profit/loss before tax is in note 9.
Headline basic earnings per share3 is down
8.4% to 7.93p (2016: 8.66p). This drop is largely
as a result of the increased number of shares in
issue following the fund raise in early 2017.
Statutory profit before tax was £5.8m (2016:
loss of £1.7m), a reconciliation of headline
profit before tax to the statutory profit/loss
before tax can be found in note 1.
The Group benefitted from a stronger dollar in
2017 compared with 2016, with average US$:£
exchange rates strengthening from 1.35 in 2016
to 1.29 in 2017. The Group generated around
£5.4m of headline operating profit in the US in
2017 (2016: £3.3m), an increase of 65.1%.
The Board is proposing a final dividend of
2.45p per share (2016: 2.40p), giving a total
dividend for the year of 3.50p per share
(2016: 3.40p) representing an increase of
2.9%. The dividend has now grown every year
since 2006. Subject to shareholder approval,
the final dividend will be paid on 25 May 2018
to all shareholders on the register at 4 May
2018, and will be recognised in the year
ending 31 December 2018.
During the year the Group completed two
acquisitions to support and develop its
strategy of growing Cello Health in the US.
Acquisitions and deferred consideration
On 31 January 2017, the Group completed the
acquisition of the trade and assets of Defined
Healthcare Research Inc. and Cancer Progress
LLC (‘Defined Health’), a business delivering
scientific strategic advisory services to a wide
range of US and European global biotech
clients. Initial consideration was $5.75m of
which $5.25m was paid in cash, with the
balance settled by the issue of 398,904 new
ordinary shares.
On 17 July 2017 the Group acquired the trade
and assets of Advantage Healthcare Inc.
(‘Advantage Healthcare’), a consultancy
providing critical analysis and insights to
biopharmaceuticals, supporting new products
and business development. Initial
consideration was $1.5m, payable in cash.
The cash consideration for both these
acquisitions was financed by way of a placing of
15,463,919 new ordinary shares at a price of 97p
a share, raising £14.2m after expenses, which
occurred in early 2017. The placing was
oversubscribed and received strong support
from new and existing institutional shareholders.
Total future deferred consideration obligations
at 31 December 2017 now total £4.6m (2016:
£2.9m). In line with recognised accounting
practices, the income statement impact of this
deferred consideration is spread over the
length of the deferred consideration period.
The acquisitions-related Employee
Remuneration Expense is £1.4m (2016: £1.2m).
This provision will be substantially settled over
the years 2019 to 2021.
1 Like-for-like measures exclude the results from companies acquired in
the year and start-ups, which are defined in note 1.
2 Headline operating margin is calculated by expressing headline
operating profit as a percentage of gross profit.
3 Headline earnings per share is defined in note 12.
Cello Health Financial Performance
2017
£’000
2016
£’000
Gross profit 60,150 47,605
Headline operating profit 10,639 8,635
Headline operating margin 17.7% 18.1%
Gross profit in Cello Health grew by 26.4% in 2017, reflecting both organic growth and growth
by acquisition. Like-for-like constant currency gross profit was an excellent 9.2%, with a
particularly strong performance from the Cello Health businesses in the US. The acquisitions of
Defined Health and Advantage Health added materially to Cello Health’s biotech offer. Both
businesses are performing well. Operating margins dropped slightly to 17.7%, reflecting a
change in the mix of the business. 45.1% of total Cello Health gross profit was earnt by the US
operations (2016: 35.1%).
Cello Signal Financial Performance
2017
£’000
2016
£’000
Gross profit 40,961 43,613
Headline operating margin 9.5% 10.3%
Cello Signal had an acceptable year against a tough comparator in 2016. As highlighted in
previous announcements, 2016 benefitted from two significant contracts that were not going
to repeat in 2017.
Notwithstanding this impact, the UK businesses in Cello Signal had a good year. Trading in the
research business in the US was difficult and during the year headcount was reduced
significantly. Trading in the US is now on track. Taking all these factors into account, the
constant currency like-for-like decline in gross profit was 6.8%.
Pulsar continued to grow well and ended the year with 346 clients and c. £0.5m of monthly
licence revenue (2016: 257 clients and c. £0.3m of monthly revenue).
Operating Cash Flow
Headline operating cash flow4 of £10.4m represented 77.2% cash conversion of headline
EBITDA (2016: 123.0%). The operating cash flow surplus generated in 2016 therefore reversed
in 2017 as expected. The underlying operating cash flow performance of the Group is robust.
The following table demonstrates the calculation of headline operating cash flow and the cash
conversion rate.
4 Headline operating cash flow represents operating cash flow adjusted for the cash flow impact of non-headline items.

Non-Headline Items
A number of items are in the income statement below headline operating profit, which
are as follows:
2017
£’000
2016
£’000
Net interest payable (359) (293)
Headline profit before tax 11,419 10,204
Restructuring costs (1,916) (1,201)
Charge for VAT recoverable/(payable) and related costs 259 (1,798)
Employment settlement and related costs (48) (1,158)
Start-up losses (1,350) (977)
Acquisition costs (243) –
Amortisation of intangibles* (510) (294)
Acquisition-related employee remuneration expense* (1,364) (1,176)
Share option charges* (430) (349)
Impairment of goodwill* – (4,937)
Statutory profit/(loss) before tax 5,817 (1,686)
*No cash flow impact.
2017
£’000
2016
£’000
Headline operating profit 11.8 10.5
Depreciation 1.3 1.3
Headline amortisation 0.4 0.4
Headline EBITDA 13.5 12.2
Net cash inflow from operating activities 4.8 6.5
Restructuring costs 1.9 1.2
Post-employment restrictions settlement 0.1 1.2
Start-up losses 1.4 1.0
Acquisition costs 0.2 –
VAT settlement/receipts (0.3) 4.8
Settlement of deferred remuneration 2.3 0.2
Headline operating cash flow 10.4 14.9
Headline cash conversion 77.2% 123.0%
The Group’s net cash position at 31 December 2017 was £1.6m (2016: debt of £5.1m). The
operating cash flow is weighted towards the second half of the year. During the year the Group
was pleased to renew its debt facilities with the Royal Bank of Scotland. They have been
renewed on the same pricing terms as the previous arrangement and expire in March 2022.
During 2017, the Group incurred restructuring costs of £1.9m (2016: £1.2m). This mainly relates to redundancy
payments, predominately within the US research offer in Cello Signal. Structural changes were also
implemented to consolidate property commitments, integrate the offer further and reduce operating costs.
The Group collected £0.3m of VAT from charity clients in relation to the prior year's issue (2016:
provision made of £1.8m).
The employment settlement costs of £nil (2016: £1.2m) represent costs incurred in the prior year
regarding the establishment of a bioconsulting team in the US. This team is now profitable.
Start-up costs in the year principally related to operating losses from the Group’s Cello Health
Consulting operations in the US as well as losses from Pulsar operations in the US. The US operations
of Cello Health Consulting moved into headline activities in the second half of 2017.
Acquisition costs of £0.2m (2016: £nil) were incurred in relation to due diligence and legal costs on
acquisitions made in the year.
Amortisation of intangibles relates to the amortisation of identified intangible assets that are recognised on
acquisitions, this charge has risen to £0.5m (2016: £0.3m) due to the acquisitions completed in the year.
Acquisition-related employee remuneration expense of £1.4m (2016: £1.2m) is the necessary income
statement charge that relates to the spreading of deferred consideration payments made to certain
employees of the Group over the term of the deferred consideration measurement period.
Share option charges of £0.4m (2016: £0.3m) relate to the appropriate income statement charge
being recognised over the life of issued share options to staff.
Goodwill has not been impaired in 2017 (2016: charge of £4.9m).
Risks and Uncertainties
The Company regularly reviews the risks and uncertainties facing the business through a regular series of
board and operational meetings. The Directors believe the current largest risks are as follows:
1. Economic conditions
The Group’s business is domiciled in the UK but 48.9% (2016: 45.2%) of the Group’s revenues are from
clients based overseas. It is clear that income from clients is impacted by the prevailing economic
conditions. Global economic and geopolitical uncertainty has increased following Brexit and the US
election. However, the broad spread of clients across sector and geography mitigates this risk.
2. Loss of the Group’s key clients
Client relationships are crucial to the Group and the strength of them is key to its continued success.
The risk is mitigated by our client base being broadly spread and by several of our pharmaceutical
clients being subject to longer term master service agreements. The loss of any large client would
require replacement. The Group’s client review programmes help mitigate this risk.
3. Changing laws and regulations
There are various laws and regulations that are relevant to the operations of the Group, in particular
the forthcoming GDPR regime that applies from 25 May 2018. The Group has established a steering
group on this issue that is actively working across all its businesses to ensure compliance.
4. Loss of key staff
The Group’s Directors and staff are critical to the servicing of existing business and the winning of
new accounts and the departure of key staff could be a risk to maintaining client service. With
that risk in mind all senior staff are subject to financial lock-ins and long-term incentive
arrangements, as well as being under contractual non-compete and non-solicit clauses.
Current Trading and Outlook
The Group has begun 2018 with good levels of forward bookings and already secured a good level of
new business wins. Following the fundraise to finance the acquisitions of Defined Health and
Advantage Health, the Group is in the process of expanding its global footprint. The imminent
renaming of the Group as Cello Health Group plc reflects this strategic focus. The Board is confident
that expectations for 2018 will be met.
Allan Rich
Non-Executive Chairman
21 March 2018

The Work We Do
Working in
Partnership
CASE STUDIES
• Evaluating where to play in
the microbiome
• Oncology asset revenue royalty
investment decision
• The life-changing value of medicine
• The value of using SML – mapping
online behaviour and influence in
severe asthma
• Early detection of HIV

Case Study 1
Evaluating Where to
Play in The Microbiome
THE CLIENT
Senior leadership team in an
international healthcare company
who sought to evaluate potential
future business opportunities within
the microbiome field.
THE CHALLENGE
The landscape of the human microbiome
is complex and many factors influence its
development. Our client required a rigorous
evaluation of the future landscape and creation
of detailed future scenarios to enable them to
make strategic business decisions.
OUR APPROACH
We used a series of proprietary methodologies,
including our FUTURES scenario learning
methodology, to support this project. We
downloaded and evaluated significant desk
sources and identified the critical gaps in
knowledge against our critical thinking
framework. The priority gaps were filled using
additional desk and primary research. Then,
through a series of workshops and creative
sessions, we engaged the cross-functional senior
leadership team to consider the implications
of key trends and produced a range of plausible
future worlds (scenarios). Once the scenarios
were identified and enriched, we helped our
client navigate the future and evaluate their
strategic options given the different possibilities,
supporting decision making.
THE RESULT
As the project progressed, we created an
interactive and highly visual PDF outlining the
evolution of the microbiome landscape and the
different scenarios in some detail. This allowed
the work to ‘live’ within the organisation and
provides an ongoing test bed for future strategic
thinking and decision making. The senior team
were fully engaged in the process and owned
the scenarios and strategy development. Gaps
in market knowledge and capabilities were
identified and plans to fill them initiated.
Ultimately, the process allowed our client
to grasp a complex, evolving landscape and
make key strategic decisions with confidence.
Case Study 2
Oncology Asset Revenue
Royalty Investment Decision
THE CLIENT
A healthcare investment banking firm with a focus on
revenue royalty streams, evaluating a potential investment
in a recently launched treatment for ovarian cancer.
THE CHALLENGE
To understand perceptions of physicians globally at a
time when ovarian cancer treatment was experiencing a
significant change due to the launch of 3-5 commercially
similar, yet medically ground-breaking products. To develop
a 10-year revenue forecast projection to best inform the
decision to bid or not bid, and if so, at what level.
OUR APPROACH
We used our therapeutic area knowledge to guide
qualitative and quantitative primary research with
physicians, KOLs and payers in the US and EU5 and to
develop a flexible model that would allow for impact
analysis of differing market dynamics in the major countries.
We built a research-informed financial model
that could account for significantly different payer
dynamics in various countries.
THE RESULT
Revenue projections were
aligned with recent company
quarterly earnings reports to
better inform a potential bid
level. Top-line revenue
projections were calculated
in six major markets and
extrapolated to the rest of
the world with a dynamic
forecasting model that was
capable of accounting for a
shifting competitive landscape,
rapid label expansions into
earlier lines of treatment,
use in different patient
populations and potential
payer restrictions in the target
markets. Overall revenue
projections were lower than
consensus Wall Street analyst
reports but remarkably inline
with company reported sales.

Case Study 3
The Life-Changing
Value of Medicine
THE CLIENT
European Federation of Pharmaceutical
Industries and Associations (EFPIA).
THE CHALLENGE
The debate around the price of
medicines has become loud, one-sided
and framed through the lens of ‘price in
isolation’. As long as the debate is framed
in this way, the pharmaceutical industry
will struggle to be anything other than
the ‘bad guy’, putting price barriers
in the way of access to life-changing
medicines. The challenge was to find
a way to reframe the terms of the
debate, moving away from the idea
of ‘price in isolation’ to helping people
grasp the idea of ‘value in context’.
Importantly, we sought to focus the
debate on the life-changing value
of innovative medicines to patients
and their families, healthcare systems
and society.
OUR APPROACH
Medical innovations and ground-breaking
treatments don’t just happen. A single
new medicine is the product of thousands
of teams, working across hundreds of
companies, investing time, money, hard
work and dedication. Yet this side of the
story is rarely told. Harnessing this
thought, we developed a powerful
campaign strategy and creative platform
#WeWontRest.
This campaign focused on the vision,
passion and tireless commitment that
individuals within the biopharmaceutical
industry bring to researching and
developing life-changing new medicines.
THE RESULT
Through close collaboration with EFPIA’s
member companies and associations, the
campaign is running in 27 countries and 18
different languages. The campaign has seen
many of the world’s biggest pharma companies
get involved sharing their own #WeWontRest
innovation commitments. Collectively these
pledges act as tangible proof of the industry’s
commitment to changing lives.
The campaign was launched in June 2017 by the
EFPIA President and Chairman of the Executive
Board and CEO of Merck. The paid media is
outperforming industry norms.
Case Study 4
The Value of Using SML – Mapping
Online Behaviour and Influence
in Severe Asthma
THE CLIENT
A European-based pharma company.
THE CHALLENGE
Our client was preparing for launch of a new
treatment for severe asthma. As part of the
launch strategy they wanted to develop a
patient mobilisation programme to engage
with patients in the early stages of the
treatment journey. Key to this was to build a
solid understanding of the severe asthma
patient, their current context, as well as their
beliefs, behaviours, perceptions and
experiences to inform the patient mobilisation
strategy globally. Previous research and
listening exercises had provided high-level
insight only and our client now needed a
deeper exploration of the reality of living with
severe asthma in order to uncover genuine
unmet needs and to identify opportunities to
engage with patients directly.
OUR APPROACH
For this project, Pulsar partnered with Cello
Health Insight to provide a truly collaborative
solution. We designed a comprehensive social
media listening exercise that included a
12-month historical search alongside four
weeks of live data capture, across key
European markets plus Japan. Our search
strategy was constructed using insights from
the previous client research exercises, as well
as pulling upon the extensive industry
knowledge of the Cello Health team and
Pulsar’s social expertise. We then undertook a
phase 5 analysis approach that incorporated
category assessment, qualitative deep dive,
competitive review, influencer identification
and audience profiling.
THE RESULT
Our client received a comprehensive
report bringing all the findings together
with a clear narrative and providing
market-specific tactical marketing and
communication recommendations in
terms of how to best reach its target
audience. More specifically, the listening
exercise provided direction in terms of
both content and language that would
resonate with audiences – plus the need
to change this dependent on the channel
used. Clear identification of relevant
emotions and frustrations enabled our
client to truly understand the patients’
unmet needs and how this should feed
into online strategy when considering
communication efforts. We also
highlighted the need for nuanced
strategies varied by patient personas with
differing needs and at different stages of
the disease journey, as well as which
specific channels to target and potential
online influencers to approach. All of this
informed the global mobilisation planning
and lead to other markets commissioning
similar work to support them in more
localised activities.
Sample influencer network

Case Study 5
Early Detection
of HIV
THE CLIENT
Confidential.
THE CHALLENGE
The provision of HIV testing beyond
genito-urinary medicine, into settings
where people are most likely to use them,
has proved a complex issue. Challenges
to expanded testing include the low level
of awareness of the benefits of testing
as a driver of HIV prevention among
politicians and healthcare professionals,
limited available resource and the
continued stigma associated with an
HIV positive diagnosis.
OUR APPROACH
From 2009 Cello Health Public Affairs played an
active role in bringing together the nation’s
leading experts and advocates in HIV, from all
parts of the UK, to work in common cause and
campaign with policy makers to reduce late and
undiagnosed HIV. Meeting quarterly, over six
years, the campaign-group developed a series of
expert publications and research to raise
awareness in a range of healthcare and
community settings where HIV tests can be
deployed and to assess the changing attitudes of
healthcare professionals towards the offer of an
HIV test. This information was then shared with
policy makers, other experts and advocates
through a series of successful events
and meetings.
The initiative drew on the expertise of 31 expert
organisations under the independent
observation of Public Health England (PHE) and
The Department of Health. The group provided
evidence on the economic and clinical benefits
of HIV testing to the 2010 House of Lords Select
Committee Inquiry on HIV, and reports
developed by the All Party Parliamentary Group
on HIV and AIDS. The group generated local
reach, through strong collaboration with
community groups and health service networks.
This enabled engagement with local health
services and unitary authorities. Council
resolutions in support of expanded HIV testing
were passed in 20 high-HIV-prevalence
local authorities.
In support of these activities, a national PHE
framework to prevent the late detection of HIV
was established, supported by national HIV
testing guidance from NICE alongside letters in
support of expanded-HIV-testing from the UK
Chief Medical and Nursing Officers. In 2016, a
total 18% decline in HIV diagnoses was reported
by PHE in all groups.
THE RESULT
2017 saw significant decline in the number of
new HIV diagnoses among gay and bi-sexual
men in the UK. In October, PHE reported that the
number of new HIV cases had dropped from
3,570 in 2015 to 2,810 in 2016. The decline was
particularly steep among those living in London,
which saw a 29% fall. PHE attributed the result to
regular and frequent testing, as well as prompt
diagnosis and treatment.
Cello Health Logic
"Cello Health Logic will leverage
best-in-class industry knowledge and
expertise whilst harnessing the power
of Pulsar and the very latest social
analytics technology."
Damian Eade
Managing Director, Cello Health Logic
Healthcare
companies have
increasingly started to
wake up to the huge
volume of real-world
conversational data that has
the potential to drive
strategic decision-making
and development.
1.
4.
3.
6.
2.
5.
Through 2016/17, Cello Health
Insight’s dedicated digital
division delivered an increasing
number of social media insight
projects, including work for
seven of the world’s top
20 pharmaceutical
companies.
By tapping into validated
sources, alongside the wider
social conversation, Cello
Health Logic will be able to
increase confidence in social
media-based insight.
Over the past 18
months we have been
working ever closer with
colleagues in Cello Signal
and Pulsar to explore
opportunities to better
harness the wealth of online
healthcare conversations.
The new offering will also
help facilitate further
collaboration across the
Cello Health organisation,
with Cello Health Logic
supporting activities
across all capabilities
and the delivery of
more digitally-
orientated
solutions.
Access to premium healthcare
data sources will enable
clients to tap into not only
the huge wealth of health
conversations online,
but also the unique
voices of validated
healthcare
professional and
patient
communities.

Acquisitions
Defined Health
Ed Saltzman,
Founder, Executive Chairman
I have seen many changes over the span
of a 30+ year career, advising life science
companies on strategy. However, today’s
ever-increasing roster of biotechnology
companies face especially daunting
obstacles to success.
Specifically, the capital demands and long
timelines inherent in biomedical product
discovery and development means these
companies face unique strategic
challenges. Perhaps the greatest of these
is to direct their limited R&D funds such
that not only their likelihood of clinical
success will increase but simultaneously
validate the company’s value proposition
for the serial rounds of financing that will
be required to advance programs though
each stage of value inflection. Indeed,
while scientific failure is often pointed to
as the cause of biotech company attrition,
the roots of such failure are too
often found in poor or even
non-existent strategy.
Over the years, along with our senior
leadership team, I have worked hard to
establish Defined Health as a pre-eminent
knowledge-based strategy consultancy.
We understand the unique challenges
faced by ‘cash burning’ companies and
the implication that consulting firms must
very clearly demonstrate essential value
to be retained out of what are typically
limited resources. As these companies
leverage successful strategy to progress
to later stages of development, their need
for support and advice increases. And
right along with this comes their need for
a broader palette of capabilities and
resources than we as a ‘boutique’ were
able to provide. Our decision to join the
Cello Health family addressed this need.
After meeting with several very large
professional services firms we very
quickly realised that success would hinge
not just on an expanded capability set,
but rather by working with a team with
whom our people would be both
strategically and culturally aligned. Cello
Health uniquely fits this bill. Additionally,
we were excited by how we could play a
very significant role in helping them
achieve their simultaneous objectives of
expanding their presence in biotech and
their footprint in the US market. Since
joining the Cello organisation in February,
we have come to see how our
expectations for fit have been exceeded.
Cello Health is a fantastic home for us
both in terms of the people and strategy.
Cello Health Advantage
Debbie Glick,
CEO
I started my career in healthcare with
the US marketing team at Pfizer and
then moved from Pfizer to a start-up
pharmaceutical company, where I worked
as the Director of Marketing before
moving to the service side of the business
with the firm I founded, Advantage
Healthcare Inc.
Cello Health Advantage focuses on a vital
aspect of the supplier side of healthcare
in the US and globally, the acquisition,
sale and/or partner identification for
commercialisation of assets. We cover
biopharmaceuticals, software, devices,
diagnostics and various combinations
of these categories.
Ensuring that an opportunity is
commercially viable involves not only
understanding the future standard of
care at the time the new asset becomes
available, but identifying/collecting
potential adoption information and
accurately using that information in a
forecast. Our team has a strong track
record in areas where the industry has
not collected or assembled data
because the opportunity is in a
less-prevalent or rare disease.
As technology and the market demand
faster answers, our Rapid Response
Service provides turnkey information in
half (or less) of the usual turnaround time.
This is exactly what corporate licensing,
business development and new product
teams are seeking. Our Rapid Response
Service delivers high-quality results,
formulated by senior team members,
within the deadlines that have become
routine in today’s fast-paced
healthcare environment.
When given the option to come into
the Cello Health fold, I knew this was the
perfect opportunity to expand and hone
the skill set of our growing team.
I am thrilled to be part of the Cello Health
team. I enjoy working with a smart,
responsive team in a forward-looking
environment. We have already
experienced the benefits of interacting
with Cello Health on issues as diverse as
how to negotiate master services
agreements, refine our business
development skills and identify team
members with key access experience
in challenging projects.

“We work hard to
ensure we offer
an attractive and
stimulating place
to work that enables
our professionals
to achieve their
full potential.”
Nicola Cowland
CEO, Cello Health Insight
People, Culture and
Corporate Social Responsibility
Key to our
future success
Cello Annual Report 201746 Cello Annual Report 2017 47

Our People
Core to Cello’s DNA is our people and it is through their
passion, commitment and application of their expertise
that we are able to deliver outstanding value to our clients.
2017 saw a continued focus across Cello on a number of key
talent initiatives, with a particular focus on developing our
talent and embedding our culture across the organisation.
ATTRACTING TALENT
We have been delighted to welcome key senior recruits
from the companies acquired by Cello during 2017; Defined
Health and Advantage Healthcare. Their senior staff bring a
new range of expertise which complements our existing
experience. In addition, we have added a number of senior
recruits to the core business through external recruitment.
We also continue to be very successful at recruiting
graduates to the business, in 2017 30 graduates joined the
Group. Recruitment at this level provides the talent for
growth in the future and our commitment to this area is
reflected by the fact we now have our own internal
recruitment team.
OPPORTUNITIES FOR GROWTH
We work hard to ensure we offer an attractive
and stimulating place to work that enables our
professionals to achieve their full potential. We
have a number of initiatives in place to ensure all
our staff continue to learn and develop and are
provided with a range of opportunities to do so.
Our annual review process, combined with
regular ‘personal development check-ins’, allows
a focus on key developmental areas for each
member of the team. Our promotional strategy
is to reward and promote once the skills are in
place, allowing us to create an environment
where development and promotion is on a
continuous basis.
Internal and external secondments/transfers
(client companies) allow us to broaden skills, as
well as cross-fertilise experience and cultures
across our UK and US offices.
Cello also offers colleagues opportunities to
attend professional and industry congresses,
allowing them to continue to further their
professional development. For example, in 2017
representatives from all three Cello Health
capabilities attended the US and EU World
Orphan Drug Congresses to host lively round
table discussions with in-field experts, support
our collective exhibit there, as well as attend
educational sessions to expand our knowledge
base in the critical rare disease space.
Our latest addition to the
senior talent pool
John Tarplee joins Cello Health
Consulting Europe as a Vice President.
John has over 30 years of life sciences
industry experience in large
multinational as well as smaller niched
speciality companies, including
Adherium, ALK-Abellò, Sanofi and
Abbott. Over the course of his career,
John has gained a diverse geographical
understanding from managing a large
cardiovascular business unit in the UK
with over 250 people through to smaller
affiliate businesses in Denmark where he
was General Manager. He also gained
considerable experience during his time
as European Head Of Sales Force
Excellence on Sanofi.
John gained his above country
leadership perspective as a regional
SVP for Northern and Eastern Europe
and the Asia-pacific areas with ALK-
Abellò. He also brings immense therapy
area knowledge including
cardiovascular, urology, oncology,
allergy and respiratory to complement
his vast experience in commercial senior
leadership roles. At Cello Health
Consulting, he uses his wealth of
knowledge and talents for
organisational excellence to translate
vision into actionable strategy
for clients.

“As leaders in digital
transformations,
it is essential that
our team keep up
with the rapidly
changing world
and are constantly
upskilling.”
Nicola Cowland
CEO, Cello Health Insight
GROUP TRAINING AND
DEVELOPMENT INITIATIVES
Our organisational development
initiative, identifying key talent
within the business, was launched
in 2016. This allows us to focus
learning opportunities to meet the
needs of our key people, including
crafting and conducting objective
analysis and interviews that look
at organisational needs. This
includes culture and values,
business and leadership
challenges; and behavioural
aspects including leadership style
and competencies. The output of
this initiative will equip the
growing teams to have future
successors and talent in place,
while constructively giving
feedback regarding different
aspects of leadership.
Alongside our local company-
based learning and development
offerings, the Cello Group
Academy programme continues to
expand and develop. In 2017 a total
of 133 Cello employees attended
Academy training events. We
launched the core Academy
programme into the US to allow access for the growing US team,
with 17 US colleagues attending the training. We also continued
our Masterclass programme in the UK, with modules around
project-based accounting and negotiation, as well as launching a
number of new Bitesize training sessions, focused on inclusion
and leadership.
The range of central training initiatives that Cello Group offers is
seen by our employees to offer real benefit and adds core value to
the business, both in terms of personal development and
collaborative working. In 2018 we will continue to develop the
Academy programme. We are expanding the core Academy
programme to incorporate a change management module, which
will continue to equip our managers for growth. We are also
launching more technical and vocational training initiatives under
the Academy banner, utilising the UK Government’s
Apprenticeship Levy.
“The Academy was so useful to my role
at Signal. The leadership course really
opened my eyes to other people’s
working styles and made me more
aware of my emotional intelligence – I
often now stop and think ‘What have
I learned?’ and then change how I
approach a situation. It was also great
to spend time with colleagues from
other parts of the company such as
Cello Health and share our
experiences. I would do it all again this
year if they’d let me.”
Sarah Lilley
Account Director at Signal
“The Academy has been a great
support in the role I am in. It enables
me to take on everyday challenges
better as well as supporting the team
I work with. The presentation skills
learned during the Academy training
has supported me in presenting at
various levels. The learning around
leadership has also been positive in the
daily handling of people, obstacles and
challenges thrown at me.”
Sanjeev Patel
Head of Digital at Signal (Opticomm)
“Cello Academy US Masterclass served
as a great litmus test for evaluating my
leadership skills. It succeeded in
effectively balancing introspective
challenges with very meaningful
collaborative activities. The former
helped me to better characterise who I
am as a professional, and the latter
enabled me to learn more about my
Cello Health colleagues. Along the way,
it validated many principles I try to
practice and, more importantly,
introduced me to new ones that
immediately impacted how I engage
with colleagues and clients.”
Ed Geiselhart
Cello Health Insight

Cello Culture
Our culture is founded
on a set of values that
guides how we work
with each other and our
clients. These values are
intrinsic to who we are,
how we differentiate
ourselves and form the
basis of our service
offerings and project
methodologies.
We have six core values
central to our culture:
BOLD
We believe in being bold in our
recommendations to clients. Our clients face
tough challenges. They need us to work on their
behalf to push the boundaries and think the
impossible.
CAN DO
A US client of Cello Health Communications
requested the team’s assistance with expediting
the development of a high-profile manuscript
reporting the results of a pivotal clinical trial to
the New England Journal of Medicine, in order to
achieve simultaneous publication with the late-
breaking presentation at a large medical
conference, ASH. The team worked within
extremely aggressive timelines to go from a first
to final draft in less than a week, reflecting our
‘can do’ attitude in achieving challenging
timelines. This is what clients expect. This is what
Cello people deliver.
COLLABORATIVE SPIRIT
Collaboration within the Group has been one of
our keys to success over the last few years and
will continue to grow in importance as we evolve.
Our teams enjoy the collaborative element of
working with colleagues around the Group,
allowing them to develop new skills and
understand client issues and challenges through
different lenses. Our clients benefit from this
diversity of skills, all tuned into working with
them in a collaborative manner to help address
their unique challenges.
FRESH THINKING
We strive to take a fresh approach to challenging
issues. For example, Cello Health Communications
US recognised that our clients find it challenging
to meet and gain valuable insight from their key
opinion leaders due to financial or timing
constraints. In response, Cello developed a novel
digital Virtual Advisory Platform that provided
clients with a cost-effective approach to allow
ongoing engagement beyond the live meeting.
PASSIONATE
Across the Group all of our teams are passionate
about what we do and particularly in working
with our clients at all levels. One specific
example that brings this to life is Cello’s long-
standing client partnership with the British Heart
Foundation. Cello not only combines digital,
CRM and automation skills to deliver
transformational supporter experiences; but we
also have five employees trekking to China to
raise much-needed funds for the Foundation.
CONSTANTLY CURIOUS
The desire to be curious and learn more about
what drives beliefs and behaviours underlies
much of the work we do within Cello. Being
inquisitive enables us to really uncover and
understand our clients' challenges, and develop
appropriate interventions. In 2017 Cello Health’s
Insight ‘Experience First’ offering was named
one of PM360’s most innovative services. A user
experience and design research strategy that
focuses on users of a treatment, product and/or
service, within a real-world context that factors
in environments and systems within which they
live and work.

Corporate social responsibility is a key
building block that provides a solid
foundation for our organisation to evolve
in a manner that is sensitive to the needs
of our people and the community
we work in.
SOCIAL INITIATIVES
As a business, we have chosen to adopt
social initiatives at a local company level,
to allow us to dedicate resources and time
to more localised causes:
• In the US in 2017, Cello Health
Communications launched its ‘Give
Where You Live’ initiative. US
colleagues volunteered their time and
resources to help various organisations
near their office base in Yardley, PA.
Different departments worked with
different organisations – the
administrative team started the
programme off by collecting supplies
to donate to a local domestic violence
shelter, A Woman’s Place, and other
teams supported a range of other local
initiatives. This initiative is additionally
supported by the company’s ‘Volunteer
Time Off Policy’; allocating an
additional day off to everyone in the
agency, in order to encourage
employees’ instincts to help others and
cultivate their generous spirits.
• Our UK businesses extended their
charity programme to include staff
volunteering days, which were held at
Cheltenham Animal Shelter,
Gloucestershire Resource Centre, Star
College, Vision 21 and Sue Ryder. This
provided employees with a great
opportunity to give something back to
the local community and the
opportunity to develop new skills,
while enjoying working with colleagues
outside the office environment.
Our Corporate
Social Responsibility
In addition, our Cello businesses
in the UK supported a number of
fundraising initiatives, including:
• The Movember Foundation
– raising over £7,000 to
support the men’s health
charity addressing prostate
cancer, testicular cancer, and
mental health and suicide
prevention.
• Fundraising and running in
the Crisis Square Mile Run in
the City of London, to address
homelessness.
As a business, we have chosen
to adopt social initiatives at a
local company level, to allow
us to dedicate resources and time
to more localised causes.
DIVERSITY AND INCLUSION
WITHIN CELLO GROUP
Cello recognises that diversity and
inclusivity policies are key to
allowing us to draw on a range of
talent and experience, enabling us
to add value to our clients. We are
committed to having a diverse
employee base and attract people
on an equal opportunities basis,
regardless of age, sex, sexual
orientation, religion, nationality,
race or disability and we adopt an
inclusive culture. All employees are
recruited, trained, performance
assessed, rewarded and promoted
on the basis of fairness, professional
competence and contribution.
• Hope for Children – a UK-based
charity enabling vulnerable
children globally to experience
a happy childhood. The Cello
team in Farnham organised a
range of fundraising initiatives
to support this organisation.
• Participating in Macmillan’s
‘World’s Biggest Coffee
Morning’ to support the charity
as it continues to provide
medical, emotional, practical
and financial support to people
in the UK living with cancer.

Directors’ Report
The Directors present their Directors’ report
and audited financial statements on the
Group for the year to 31 December 2017.
General Information
Cello Group plc (‘The Group’) is a
healthcare and consumer strategic
marketing group of companies. The
Group is AIM quoted and is domiciled
and registered in the United Kingdom.
The Group has offices in the United
Kingdom, the United States of America
and Singapore.
Review of the Business and
Future Developments
The results for the year ended 31
December 2017 are set out in the
consolidated income statement on page
70. These show a profit for the year of
£4.2m (2016: loss of £2.8m). An interim
dividend of 1.05p per share was paid in
November 2017 (2016: 1.0p) and a final
dividend of 2.45p per share is proposed
(2016: 2.40p).
The Directors are required by the
Companies Act to present a business
review, reporting on the development and
performance of the Group and the
Company during the year and their
positions at the end of the year. A review
of the development and future prospects
of the business and key performance
indicators (‘KPIs’) are given in the Strategic
Report on pages 15 to 35 which are
incorporated in this report by reference.
The Group’s KPIs are outlined in various
sections of this review. Whilst there are
many financial measures that the Group
monitors on a regular basis our core
financial objectives are:
• Headline profit before tax
• Headline operating profit
• Headline operating margin
• Like-for-like gross profit
• Headline operating cash flow conversion
• Headline basic earnings per share
Directors
The Directors of the Company who were in
office during the year and up to the date of
signing the financial statements were:
Mark Scott
Mark Bentley
Stephen Highley
Paul Hamilton
Will David
Allan Rich
Chris Jones
Biographical details of the Directors at
the date of this report are set out on
pages 126 to 127.
Directors’ Report
Directors’ Interests in Shares and Options
Directors’ interests in the shares of the Company were as follows:
Number of ordinary shares of 10p each
At 31 December 2017
Number of ordinary shares of 10p each
At 31 December 2016
Mark Scott 1,455,475 1,320,175
Mark Bentley 442,518 337,968
Stephen Highley 2,136,104 2,074,604
Paul Hamilton 50,000 50,000
Will David 15,000 15,000
Allan Rich 977,785 977,785
Chris Jones – –
Under the rules of the PSP Option Scheme 2010 (the ‘PSP 2010’) the Executive Directors have been
granted an interest in options over ordinary shares of 10p each as follows:
At
1 January
2017
Granted
during
year
Exercised
during the
year
Lapsed
during the
year
At 31
December
2017
Exercise
price
(pence)
Earliest
exercise
date
Expiry
date
Mark Scott
PSP 2010 210,000 – (210,000) – – 10.00 July 2016 July 2023
PSP 2010 120,000 – (120,000) – – 10.00 June 2017 June 2024
PSP 2010 450,000 – – – 450,000 10.00 May 2019 May 2026
PSP 2010 – 275,000 – – 275,000 10.00 Sep 2020 Sep 2027
Total
Mark Scott
780,000 275,000 (330,000) – 725,000
At
1 January
2017
Granted
during
year
Exercised
during the
year
Lapsed
during the
year
At 31
December
2017
Exercise
price
(pence)
Earliest
exercise
date
Expiry
date
Mark Bentley
PSP 2010 165,000 – (165,000) – – 10.00 July 2016 July 2023
PSP 2010 90,000 – (90,000) – – 10.00 June 2017 June 2024
PSP 2010 220,000 – – – 220,000 10.00 May 2019 May 2026
PSP 2010 – 140,000 – – 140,000 10.00 Sep 2020 Sep 2027
Total
Mark Bentley
475,000 140,000 (255,000) – 360,000

Directors’ Report
At
1 January
2017
Granted
during
year
Exercised
during the
year
Lapsed
during the
year
At 31
December
2017
Exercise
price
(pence)
Earliest
exercise
date
Expiry
date
Stephen Highley
PSP 2010 100,000 – (100,000) – – 10.00 July 2016 July 2023
PSP 2010 50,000 – (50,000) – – 10.00 June 2017 June 2024
PSP 2010 220,000 – – – 220,000 10.00 May 2019 May 2026
PSP 2010 – 140,000 – – 140,000 10.00 Sep 2020 Sep 2027
Total
Stephen Highley
370,000 140,000 (150,000) – 360,000
There were no changes in Directors’ interests
between the year end and the date of signing
the Group’s financial statements.
Research and Development Activities
During the year the Group spent £409,000 (2016:
£310,000) on the development of new software
products which are expected to generate
economic benefits in the future. These amounts
were capitalised as intangible assets. £402,000
(2016: £386,000) of amortisation on research and
development expenditure was charged to the
income statement during the year.
Directors’ Third-Party Indemnity
Provisions
A qualifying third-party indemnity provision was
in place for Directors throughout the year and at
the date of approval of the financial statements.
Employees
It is the Company’s policy not to discriminate
between employees or potential employees on
any grounds. Full and fair consideration is given to
the recruitment, training and promotion of
disabled people and, should staff become
disabled during the course of their employment,
efforts are made to provide appropriate re-
training. The Company places enormous
importance on the contributions of its employees
and aims to keep them informed of developments
in the Company through a combination of
meetings and electronic communication.
Treasury Shares
The total number of shares in treasury at 31
December 2017 was 453,000 (2016: 453,000),
which represents 0.43% (2016: 0.52%) of the
issued share capital. The purpose of the treasury
shares is to satisfy future earn out payments
and/or share option awards.
Substantial Shareholdings
Other than the Directors’ interests disclosed on
the previous pages, the Company is aware of
the following shareholdings of 3% or more in the
issued share capital at 28 February 2018:
No. of shares %
Liontrust Asset Management 13,596,114 12.95
Ennismore Fund Management 9,912,176 9.44
Milton Asset Management 6,752,438 6.43
BlackRock 6,369,148 6.06
Octopus Asset Management 4,026,459 3.83
Hargreave Hale 3,300,000 3.14
Share Capital
Changes to the Company’s share capital during
the year are given in note 24 to the consolidated
financial statements.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the
Annual Report and the financial statements in
accordance with applicable law and regulation.
Company law requires the Directors to prepare
financial statements for each financial year.
Under that law the Directors have prepared the
Group financial statements in accordance with
International Financial Reporting Standards
(IFRSs) as adopted by the European Union and
company financial statements in accordance
with International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
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 Group and Company
and of the profit or loss of the Group and
Company for that period. In preparing the
financial statements, the Directors are
required to:
• select suitable accounting policies and then
apply them consistently;
• state whether applicable IFRSs as adopted by
the European Union have been followed for
the Group financial statements and IFRSs as
adopted by the European Union have been
followed for the Company financial
statements, subject to any material
departures disclosed and explained in the
financial statements;
• make judgements and accounting estimates
that are reasonable and prudent; and
• prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group and Company will
continue in business.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the Directors' and
company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the Group and Company and enable
them to ensure that the financial statements
comply with the Companies Act 2006 and, as
regards the Group financial statements, Article
4 of the IAS Regulation.
The Directors are also responsible for
safeguarding the assets of the Group and
Company and hence for taking reasonable steps
for the prevention and detection of fraud and
other irregularities.
The Directors are responsible for the
maintenance and integrity of the Company’s
website. Legislation in the United Kingdom
governing the preparation and dissemination of
financial statements may differ from legislation
in other jurisdictions.
The Directors consider that the annual report
and accounts, taken as a whole, is fair, balanced
and understandable and provides the
information necessary for shareholders to
assess the Group and Company’s performance,
business model and strategy.
Each of the Directors, whose names and
functions are listed in the Report of the
Remuneration Committee confirm that, to the
best of their knowledge:
• the Company financial statements, which
have been prepared in accordance with IFRSs
as adopted by the European Union, give a
true and fair view of the assets, liabilities,
financial position and profit of the Company;
• the Group financial statements, which have
been prepared in accordance with IFRSs as
adopted by the European Union, give a true
and fair view of the assets, liabilities, financial
position and profit of the Group; and
• the Directors’ Report includes a fair review of
the development and performance of the
business and the position of the Group and
Company, together with a description of the
principal risks and uncertainties that it faces.
In the case of each Director in office at the date
the Directors’ Report is approved:
• so far as the Director is aware, there is no
relevant audit information of which the Group
and Company’s auditors are unaware; and
• they have taken all the steps that they ought to
have taken as a Director in order to make
themselves aware of any relevant audit
information and to establish that the Group
and Company’s auditors are aware.
Statement of disclosure of information
to auditors
In the case of each Director in office at the date
the Directors’ Report is approved:
• so far as the Director is aware, there is no
relevant audit information of which the Group
and Company’s auditors are unaware; and
• they have taken all the steps that they ought to
have taken as a Director in order to make
themselves aware of any relevant audit
information and to establish that the Group
and Company’s auditors are aware of
that information.
Independent Auditors
A resolution to reappoint
PricewaterhouseCoopers LLP, Chartered
Accountants, as auditors will be proposed at the
forthcoming Annual General Meeting.
Corporate Governance
The Company’s statement on corporate
governance can be found in the corporate
governance report on pages 60 to 61 of the
financial statements. The corporate governance
report forms part of this Directors’ report and is
incorporated into it by cross-reference.
By order of the Board
Mark Bentley
Company Secretary
21 March 2018

Report
The Board of Cello Group plc appreciates the
value of good corporate governance, not
only in the areas of accountability and risk
management but also as a positive
contribution to the business. The Board
considers that the Company, whilst trading
on the AIM Market, has adopted those
requirements of the UK Corporate
Governance Code (September 2012) (the
‘Code’) as best applicable to the Company
given its current size. The full requirements of
the code have not been adopted.
Board Structure
The Board comprises three Executive
Directors and four Non-Executive Directors.
The roles of Chairman and Chief Executive
are separate. The Non-Executive Directors
are independent of management and free
from any business or other relationship with
the Company other than owning shares.
The Directors’ biographies appear on pages
126 to 127.
The Board is scheduled to meet at least six
times a year and additionally when necessary.
At each scheduled meeting of the Board, the
Chief Executive, Group Finance Director and
Group Chief Operating Officer report on the
Group’s operations. The Board is satisfied
that it is provided with information in an
appropriate form and quality to enable it to
discharge its duties. All Directors are subject
to re-election by shareholders at the first
opportunity after their appointment. All
Directors are required to retire by rotation
and one-third of the Board is required to seek
re-election each year. The Chairman ensures
that the Directors are permitted to take
independent professional advice as required.
All Directors have access to the advice and
services of the Company Secretary, who is
responsible to the Board for ensuring that
Board procedures are followed and that
applicable rules and regulations are
complied with.
The following committees of the Board have
been established to deal with specific
aspects of the Company’s affairs.
Audit Committee
The Audit Committee consists of two Non-
Executive Directors; Will David as Chairman
and Paul Hamilton. Will David is considered
to have relevant financial experience to chair
this Committee. The Committee considers
matters relating to the financial accounting
controls, the reporting of results and the
effectiveness and cost of the external audit. It
aims to meet at least twice a year with the
Company’s auditors in attendance. Other
Directors attend as required. The Company
Secretary provides secretarial support to the
Committee. The terms of reference of the
Committee are available on request.
Nomination Committee
The Nomination Committee consists of two
Independent Non-Executive Directors; Paul
Hamilton and Will David. The Committee is
chaired by Paul Hamilton and meets as
necessary. The Committee is formally
constituted with written terms of reference
and is responsible for reviewing and making
proposals to the Board on the appointment of
Directors. The Company Secretary provides
secretarial support to the Committee. The
terms of reference of the Nominations
Committee are available on request.
Remuneration Committee
The Remuneration Committee is formally
constituted with written terms of reference
and makes recommendations to the Board
with regard to remuneration policy and
related matters. The Remuneration
Committee consists solely of two of the
Independent Non-Executive Directors, Paul
Hamilton, who chairs the Committee and Will
David. However, the Chief Executive attends
as required and has the right to address the
Committee. The Committee aims to meet at
least twice a year. The terms of reference of
the Committee are available on request.
Further details of the Company’s policies on
remuneration, including details of Directors’
share options are given in the Report of the
Remuneration Committee on pages 62 to 63.
Report
Shareholder Communications
The Group believes in maintaining good
communications with shareholders. The Chief
Executive and Group Finance Director meet
analysts and institutional shareholders
regularly with a view to ensuring that the
strategies and objectives of the Group are
well understood. The Senior Independent
Director will not ordinarily attend such
meetings other than at the request of the
relevant shareholder. However, he is available
to shareholders if they have concerns which
the Chairman, Chief Executive or the Group
Finance Director have failed to resolve or for
which such contact is inappropriate.
Going Concern
The Directors have satisfied themselves that
the Company and Group have adequate
resources to continue in operational
existence for the foreseeable future, and for
this reason the financial statements continue
to be prepared on a going concern basis.
Internal Control
The Board is responsible for ensuring that the
Group maintains a system of internal controls
and risk management, including suitable
monitoring procedures. The objective of the
system is to safeguard Group assets, ensure
proper accounting records are maintained
and that the financial information used within
the business and for publication is reliable.
Any such system can only provide
reasonable, but not absolute, assurance
against material misstatement or loss.
Given the Group’s size and the nature of its
business, the Board does not consider it
would be appropriate to have its own internal
audit function. An internal audit function will
be established as and when the Group is of
an appropriate size but meanwhile the audit
of internal financial controls forms part of the
responsibilities of the Group’s finance
function.
All the day-to-day operational decisions are
taken initially by the Executive Directors or
subsidiary Directors, in accordance with the
Group’s strategy. Where appropriate, the
Board or subsidiary Directors approve such
decisions. The Executive Directors or
subsidiary Directors are also responsible for
initiating all transactions and authorising all
payments, save for those relating to their
employment. As such, the internal controls
primarily comprise:
• the segregation of duties;
• the review of pertinent financial and
other information by the Board on a
regular basis;
• the prior approval of all significant
strategic decisions;
• having a formal strategy for
business activities.
The Environment
The activities of the Group do not have a high
impact on the environment. However, the
Group aims to ensure that where waste can
be reduced this is done efficiently by
recycling where viable.
Employees
The Group employs nearly 1,000 employees
and places a great deal of emphasis on their
training and retention. The central
programme for rising talent, Cello Academy,
is now a well-established feature of the
Group’s staff development initiatives.
On behalf of the Board
Mark Bentley
Company Secretary
21 March 2018

Cello Health plc Annual Report 2017

Cello Health plc Annual Report 2017

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Cello Health plc Annual Report 2017