2012 marked a pivotal year in the development of the CSM Sport & Entertainment division. Our agencies' in-depth involvement in the Olympic and Paralympic Games delivered strong revenue growth during the year, and leveraging the expertise demonstrated in London is generating powerful additional opportunities both in sports marketing and the broader entertainment field.

CSM Sport & Entertainment includes the strategic sponsorship agency Fast Track, the rights and athlete management business Essentially, branding and way-finding specialist Icon, event activation agency iLUKA, and pmplegacy, the bid consultancy business which will be developed into a fifth pillar for the division during 2013.

The 2012 Games demonstrated the tremendous depth of the CSM Sport & Entertainment division's full-service sports marketing offer through the spectacularly successful and high-profile work of its leading agencies.

The work of branding and way-finding specialist Icon was seen across the 2012 venues, with its turnkey solution to implementing the Olympic livery and palette, dressing venues and ensuring easy navigation for visitors, all forming an important and high-profile element of the Games' success. iLUKA, the event activation specialist acquired by the division this year, dominated hospitality during the Games, activating programmes for 14 official partners. The agency's event programmes included those of Coca-Cola, GSK, Lloyds TSB, Cadbury, and a spectacular solution for BP that transformed the Royal Opera House in Covent Garden into an Olympic museum. In addition, iLUKA's work for the International Olympic Committee included management of the IOC club hospitality at the Olympic stadium itself.

Beyond the impact on revenues during 2012 itself, the London Games provided the most powerful example yet of the potential of sports sponsorship to forge deeper connections with consumers; connections that can be executed and expressed across a growing range of content platforms - and which increasingly reach audiences across every corner of the globe. Fast Track's strong performance during the year demonstrates the growing demand for such powerful sponsorship solutions, with work for brands such as HSBC, Land Rover, BT, GSK and Emirates across sports from Rugby and Cricket to Football, Tennis, Triathlon and beyond.

The CSM Sport & Entertainment division has moved decisively to leverage the opportunity that the London Games is generating on the global stage. The arrival of Lord Sebastian Coe as chairman is hugely exciting, introducing the expertise of arguably the most recognisable and respected figure in the business of sport, and providing a compelling reason for CSM Sport & Entertainment to be invited into the decisions of countries bidding for major sporting events - and corporations weighing sports sponsorship options. Lord Coe's arrival will help to accelerate the development of our pmplegacy business, with the agency's offer in the bid consultancy space providing the division with a fifth pillar alongside Fast Track's strategic sponsorship consultancy, Essentially's rights and athlete management expertise, and the executional excellence of iLUKA and Icon.

The division's acquisition policy will continue to focus on areas of strategic opportunity both geographically and in terms of adding capabilities to address areas of increasing demand. Organic growth, supported by the hiring of new talent, will also play a key role in this.

In line with this policy, the arrival of McKenzie Clark during 2012 introduces valuable branding and production skills that are hugely complementary to the proposition of Icon. The acquisition of iLUKA, and the immediate results that this has delivered through activity at London 2012, demonstrates that CSM Sport & Entertainment is now a leading global player in the execution of major sporting events and the activation of sponsorship programmes connected to them.

Like sport, entertainment offers brands an opportunity to build new forms of emotive, content-rich connections with consumers, and this potential is shown in rapidly increasing demand for applying Essentially's expertise to music sponsorship deals. Lynx Deodorant, SABMiller and Beefeater Gin are among the brands the agency has worked with to leverage music's connection to key youth audiences. The division is investing in building additional expertise in this area to meet fast-growing interest amongst potential clients.

The CSM Sport & Entertainment division's high-profile role in the success of London 2012, together with our geographical exposure to other major upcoming sporting events, provides strong impetus for continued growth in 2013. However, growth potential is not limited to the major sporting cycles of the FIFA World Cup and Olympic Games, with additional opportunities continually emerging around global football, cricket, rugby and many other areas.

Part of the strength of sport lies in its genuinely global appeal - and part of the strength of the sports marketing business lies in the way that it provides access to growth opportunities in diverse markets, countering the impact of on-going recession in Europe. Even within those countries that continue to feel the impact of the economic downturn, the large sums commanded by rights owners testify to the robust value of sport in the eyes of marketers.

At a time of continued pressure on marketing budgets, The VCCP Partnership has maintained its strong track record for delivering famous, effective marketing campaigns, whilst broadening its offer to develop new channels for growth.

The VCCP Partnership is an integrated marketing services business offering advertising, content, experiential marketing, data consultancy and media. It also includes the specialist financial services agency group Teamspirit.

The Partnership has felt the impact of intensifying pressure on clients' marketing budgets, which have constrained revenues for the marketing services industry as a whole during 2012. Despite this, it has continued to grow revenues year-on-year, and further reinforced its reputation for delivering high-profile, highly effective campaigns that can generate increased value through "earned" media exposure. Our strategy of populating popular culture through highly integrated campaigns that leverage the full potential of digital and social platforms is seen in stand-out work for Easyjet, which has been credited with contributing to a doubling of the company's share price, O2, which we now support across five European markets, Coors Light and Compare the Market.

The VCCP Partnership has responded to the constraints on traditional Above-the-Line spend with significant investment in a broader offer that is already delivering new lines of revenue.

The recently launched content marketing business, VCCP Content is delivering significant amounts of work for clients across both online and traditional broadcast channels, with O2's Guru TV service helping customers to get more from their mobile phones, a particular highlight. VCCP Live, the experiential marketing business launched during the year is working with McLaren to deliver high-profile events throughout the F1 calendar. The data consultancy Conduit meets a demand increasingly expressed by clients for planning resources to keep pace with the data generated by digital channels. VCCP Media, which specialises in digital platforms, ensures that the Partnership now provides a fully end-to-end service when it comes to planning integrated campaigns.

The Partnership has significantly increased its international footprint, responding to client demand for new approaches within Europe, whilst opening up additional opportunities in faster growing markets.

The Partnership has built on the continued success of its Prague and Berlin offices with the launch of a Madrid operation that meets demand from existing client Telefonica whilst opening up new avenues of opportunity in the key rapid-growth market of Brazil. VCCP's highly integrated, digital-led offer is generating strong interest within Spain, at a time when economic conditions are forcing marketers to challenge conventional approaches.

In Asia, the launch of the Group's Sydney office continues to build presence in a key rapid-growth region, in conjunction with VCCP's existing operation in Singapore.

Investment in new market launches and the diversification of The Partnership's offer has held back margins during 2012. However, we expect this investment to deliver improved growth in both margin and revenues during the year to come. The strong performance of VCCP Content during 2012 along with gathering momentum for VCCP Media points to these agencies making a contribution during the year. Expansion into new markets is likely to bring additional opportunity, particularly through The Partnership's growing Asian hub, and the opportunities that our Madrid office is helping to develop in Latin America.

The divestment of the Bell Pottinger Group in July ensured that 2012 was a defining year for Chime's PR division. In establishing the Good Relations Group and building on our existing expertise in Corporate Responsibility, advocacy, b2b and brand communications, we have developed a compelling and timely offer that is already resonating in the marketplace.

The Good Relations Group comprises Good Relations Brand Communications, Good Relations Political Communications, Corporate Citizenship, Harvard, InEvidence, Good Relations Regional, TTA Property, Harvard Germany, MMK, and Traffic Communications.

The restructuring of the division has enabled us to define a proposition for the Good Relations Group that addresses the rapidly changing needs of brands and companies in radically transparent times. Our new offering focuses on brand building communications and CR consultancy, helping clients to build trusted brands that are rooted in good relationships.

The new position has been expressed through a bold rebranding of the Group around the Power of Good in driving relationships and results for business. This new branding supports an end-to-end approach to communications, in which the actions of a brand or company are integral to its reputation, and the ability to leverage those actions through PR and customer advocacy are integral to its success.

The strength of the Group's offer is demonstrated by a new business performance that remained solid despite the considerable disruption caused by the divestment and restructuring process. Good Relations began work with Nicoventures, Pilsner Urquell / SABMiller, Serco and Budgens/Londis during the year, whilst new business for our leading CR agency Corporate Citizenship included EADS, Fujitsu, and the European Investment Bank. Technology specialist Harvard began work with Huawei whilst opening up new opportunities with Sky, Harvard Germany was appointed by HTC, and the customer reference agency InEvidence was appointed to the Vodafone account.

The Group's strategy calls for a leap forward in the use of digital and social media for driving engagement and advocacy, with the goal of creating the most digitally literate and empowered employees in the PR industry. A groundbreaking partnership with Google marks a key early milestone in this roadmap, with agency employees undergoing intense training in use of Google's growing range of search and social tools, a first for a PR agency in the UK.

The centrality of digital is already reflected in the stand-out work delivered by the Group during the year, including the global brand relaunch of Pilsner Urquell, building a global social media community for Airbus, driving advocacy and endorsement across Facebook and Twitter for Weetabix, and delivering integrated campaigns across digital and social platforms for Hewlett Packard and Sky.

Good Relations Group has developed a proposition to the market that perfectly reflects the reality of stakeholder and customer engagement in the digital age. The promising momentum shown in the second half of 2012 indicates the strength of demand for such an offer. We expect the Group to develop further during 2013 on the back of increased new business, the launch of new services around leadership, internal and crisis communications, and the extension of our leading-edge corporate citizenship and customer advocacy services to new markets.

In its first full year of operation, the OPEN Health Group has established itself as a significant player in the European healthcare market, with a distinctive channel and discipline-neutral approach, and a focus on helping pharmaceutical companies adapt to a changing market environment and a new set of challenges.

OPEN Health includes the advertising and brand communication practice, OPEN LEC, the medical education agency Succinct, the healthcare public relations business Reynolds Mackenzie, the medical market research agency OPEN Plan, the digital operation The Earthworks, market access experts PH Associates and data consultants Harvey Walsh.

As a new player in the market, OPEN Health has been able to build its proposition around the strongest growth sectors in the pharmaceutical and healthcare industries, expanding the business through both organic growth and acquisition.

The Group's senior management team are established names within the UK and European healthcare market, and this team has handpicked agencies to join the Group from across the sectors that it believes offer the strongest current and future opportunities.

The OPEN Health approach to client briefs aims to bring the specific expertise of our leading agency brands together, in a joined-up approach that adds significant value to client businesses. This approach is realised through a very 'open' management culture that brings together the leaders of the individual agencies in working groups and strategic leadership teams.

Within its first full year, OPEN Health has grown to a point where it works with 87 different client companies and 250 separate brands, with a very significant majority of the world's leading pharmaceutical companies represented on its client list and increasing work amongst diagnostic organisations and device manufacturers. Significant wins during 2012 included the pan-European launch of a major new antibiotic that brought together five of the agency brands within the Group to deliver services from PR through market research to medical and brand communications.

For pharmaceutical companies, the challenges involved in launching and promoting medicines are broader than ever. Governments and healthcare purchasing organisations demand an evidence-based approach to both the scientific and economic impact of medicines and medical interventions. Only treatments that can prove positive benefits in both of these areas are rewarded with access to markets. In building a market access and medical education offer that is designed around meeting these challenges, OPEN Health is establishing a leadership position in the area on which the launch of any medicine increasingly depends. Our integration of data planning with market access and medical communications skills has already supported a number of key clients with major launches during 2012.

Digital channels have an increasing role to play in communicating benefits to both patients and practitioners, and specific expertise is essential for balancing the use of digital and social channels with the requirements of medical regulation. Digital skills underpin every element of the OPEN Health business, from the gathering of insight and data for market access solutions to effective targeting of practitioners and patients and the execution of PR and marketing campaigns for both audiences.

We expect OPEN Health to continue to deliver strong growth during 2013, as its uniquely integrated approach and market access expertise continue to generate traction in the market. The Group's success in handling an increasing number of pan-European launch briefs points to the additional growth potential that exists in leveraging this expertise on a regional basis.

A high-quality, highly responsive approach and a focus on the role of research in driving engagement have helped Chime's Insight & Engagement division to deliver strong growth in revenue and profitability in a challenging market.

Chime's Insight & Engagement division comprises the agencies Facts International, Naked Eye, Opinion Leader, StratAgile, Tree London and Watermelon Research. It provides a full-service research offer to clients, incorporating digital, face-to-face and telephone-based techniques for qualitative, quantitative and deliberative research programmes.

The full title of the division, Insight & Engagement, encapsulates a commitment to the practical application of research, using client-side experience to analyse and present information in a way that anticipates how it can be most effectively used within a business. Our approach is focused on delivering immediate benefits to the bottom line in terms of audience engagement and revenue generation.

Major new projects conducted during the year for O2, Ofqual, Thames Water and HSBC testify to the demand that exists for this type of market research proposition, whether applied to quick-fire surveys that produce instant snapshots on customer satisfaction, in-depth ROI studies to assess the effectiveness of major sponsorships and brand campaigns, or deliberative strategic consultancy to help guide business development and public policy.

The launch of the digital research agency, Watermelon Research, has completed the division's full-service research offer whilst delivering immediate profitability on a monthly basis. Watermelon's work with mobile apps and online communities ensures real-time, instantly actionable feedback to help businesses respond to issues and opportunities as they develop.

The success of the launch demonstrates the growing importance of digital technology to research solutions. The division has succeeded in capturing a growing slice of such business thanks to a high-quality approach that leverages digital platforms to deliver greater responsiveness for clients, adapting questionnaires and programmes in real-time to reflect changing needs.

International expansion provides another route to extending our client offer. The agency is launching a new operation in Sydney, Australia, which will ensure 24-hour response and availability for clients worldwide.

The division's commitment to engagement extends to developing new platforms for sharing insights with clients rapidly and efficiently: we have made increasing use of mobile platforms to deliver results to key decision-makers, and videos and podcasts to communicate findings in new and more engaging ways.

The CIE Group approach is rooted in the expertise of its senior team, and the perspective that client-side experience brings in judging how research can play an effective role in delivering measurable business results. The division moved to strengthen this senior team further during 2012, with the arrival of Caroline Bates, formerly head of brand and marketing strategy for O2, and a number of other director-level hires.

The market research sector continues to face challenging conditions. However, the continuation of CIE Group's highly integrated, results-focused approach will deliver further opportunities to outperform the market. The expansion of the division's digital offering and the round-the-clock research support enabled through the opening of the Sydney operation will provide additional competitive advantages to be leveraged during the year.