Milan Patel, CEO Paraag Amin, CFO. February 2019

Transcription

1 Milan Patel, CEO Paraag Amin, CFO February 2019

2 Our mission: powering customer engagement across all touchpoints. A global business with a UK headquarters. Formed in Listed on AIM in Background in ecommerce. Acquired Comapi in Rebranded to Engagement Cloud in Trade associations Official partnerships 2

3 Sales & Marketing IT & Development Client Services Other About dotdigital At the end of the period we employed 333 people in 14 office locations around the world UK UK 266 people USA 25 people Australia 10 people South Africa 4 people Germany 2 people Belarus 17 people Poland 9 people 3

4 About dotdigital Directors 11.6% European institutions Liontrust Investment Holdings 18.8% Slater Investment Ltd 5.9% Highclere International 4.2% Simon Bird 3.9% JO Hambro 3.2% Franklin Templeton Fund Management 3.0% Jupiter Asset Management 2.7% Herald Investment Management 2.6% Global reach Allianz Global Investors (Ger) Pie Funds (NZ) Grandeur Peak (USA) TDM (Aus) Royce Funds (USA) Microequities (Aus) Berenberg Asset Management (Ger) 4

5 About dotdigital 33% Up from 18.8m Our strategy is delivering product innovation, partnership development and geographic expansion. Product Innovation Comapi acquisition facilitated a shift to an omnichannel offering. Strategic partnerships Have expanded and deepened, evidenced by the high-quality, data-led insights we provide to drive meaningful returns for marketers. Geographic expansion International sales (excluding Comapi) represented 30% of total sales in H1 2019, up from 25% in H

6 Strong profitable organic Strong, growth profitable organic growth Paraag Amin

7 REVENUE in m Financials Growth trends continue for both revenue and profit. 1200% Engagement Cloud Revenue growth KEY Group Revenue Adjusted EBITDA Cash at Period End 24.9m 16.6m* 1100% Adjusted EBITDA growth % Engagement Cloud Revenue CAGR m 27% Adjusted EBITDA CAGR 2 0 1H H H H H H H H H H H 2019 * Comapi acquisition in November-2017 was for a cash consideration of 10.7m 7

8 Financials Top line revenue growth Group revenues grew 33% to 24.9m in H (H1 2018: 18.8m). ARPU increased 16% in H1 2019, from 757 to 876. Strong net cash position 16.7m at 31 December 2018 (H1 2018: 10.5m) after capital expenditure and product development of 2.8m. Increasing recurring revenue Engagement Cloud recurring revenue is now 90% of total, of which 90% is contracted. Recurring revenue from product functionality grew by 50% to 5.7m. Adjusted Operating Profit Increased 22% to 5.6m in H (21.7% AOP margin); growing from 4.6m in H Growth in international revenues Revenue growth of 30% in the US region to $US4.3m; 80% in the APAC region to $AUS1.6m. Outlook The Board is confident in current expectations for the full year. 8

9 Financials Product innovation Strategic partnerships Strong Revenue Growth Functional Recurring revenue grew 50% to 5.7m in H Functional Recurring Revenue (Engagement Cloud) 5.7m, 28% It now makes up 28% Geographic expansion of Engagement Cloud revenue. 3.8m, 22% Engagement Cloud SMS volume 2.9m, 19% was up over 100% in the period which remains a complimentary channel to . H H H

10 Financials H Product innovation Strategic partnerships Geographic expansion Connector revenues grow Revenues grew in both ecommerce (Magento and Shopify) and CRM (Salesforce & MS Dynamics). Sales from customers using connectors to our strategic partners solutions increased by 43% to 10.3m (H1 2018: 7.2m). Non-integrated, 58% H Magento, 25% Salesforce, 9% Dynamics, 7% Other partners, 1% Global Premier Technology Partner Gold Microsoft Partner Non-integrated, 49% Magento, 28% Salesforce, 9% Shopify Plus Technology Partner Verified Partner Other partners, 5% Dynamics, 9% 10

11 Financials Product innovation Strategic partnerships Geographic expansion Revenue by Geography Engagement Cloud international revenue now represents 30% of total, up from 25% in H Organic international revenue was up 37% to 6.0m (H1 2018: 4.4m). Engagement Cloud EMEA revenue grew c.10% despite the introduction of GDPR in May, Brexit uncertainties and reduced retail consumer spend. Revenue from the US region grew organically by approx. 30% to $4.3m, (H1 2018: $3.3m) driven by partners and integrators for Magento and Shopify. Both the direct to customer and the strategic partner sales teams helped drive organic revenue in APAC; we saw 80% growth to AUS$1.6m, (H1 2018: AUS$0.9m). Revenue by Geography (Engagement Cloud) 86% 83% 79% 12% 14% 16% 2% 3% EMEA US APAC H H H % 11

12 Financials Profit & Loss Statement Dec 18 M Dec 17 M Growth % Revenue % Group revenue Group revenue grew 33% to 24.9m (H1 2018: 18.8m). Organic revenue grew 15% to 20.1m (H1 2018: 17.5m). Monthly ARPU up 16% to 876 (FY 2017: 757). Engagement Cloud international revenue Now 30% of total (H1 2018: 25%). Revenue from strategic partners Increased by 43% to 10.3m (H1 2018: 7.2m). Cost of sales analysis Direct marketing increased to 1.3m (H1 2018: 1.1m). Partner commission 1.1m (H1 2018: 1.0m). Comapi contributed 3.4m in the period. Key investment areas People (+28 people in last 6 months), Partnerships and Product. Cost of sales (5.7) (3.1) 81% Gross profit % Admin expenses (13.6) (11.0) 23% EBITDA % Operating profit % Exceptional Items* % Adjusted EBITDA 7.1* 5.7 # 25% Adjusted operating profit 5.4* 4.6 # 19% Adjusted diluted EPS 1.63p 1.41p 16% * Excludes exceptional costs of 0.6m in the period 1) for the acquisition of Comapi ( 0.18k: 0.13m amortisation of customer relations and technology; and 0.05m acquisition costs of Comapi) 2) share-based payments ( 0.45k) # Excludes exceptional costs of 0.2m in the period 1) for the acquisition of Comapi ( 0.2k) 2) share-based payments ( 0.03k) 12

13 Financials Healthy balance sheet. Zero debt. Bandwidth for strategic investments. Strong distributable reserves. Balance sheet Dec 18 M Dec 17 M Non Current Assets Other Current Assets Cash Total Assets Non Current Liabilities Current Liabilities Total Liabilities Net Assets

14 Financials Strong cashflows generated from operations. Adjusted free cash flow of 1.7m. Healthy cash balance at the half year. c50% of monthly recurring value collected on Direct Debits / credit cards. Cash flow Dec 18 M Net cash generated from operations Net cash used in investing activities Net cash used from financing activities Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Dec 17 M

15 The customer engagement platform for the serious marketer

16 A reminder of what s happening COMPANY dotmailer Comapi dotdigital PRODUCT dotmailer Comapi Engagement Cloud TERRITORY Marketing Marketing Automation CPaaS Customer Engagement 16

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18 ecommerce CRM A.I. Automation Collaboration Personalization SMS Social Ads Offline Webhooks Profiling Reporting Segmentation Mobile Web Chat 18

19 Increase ROI at every stage of the ecommerce journey Data Insight Engage Convert Retention Sync your customer, order, and product data. Build rich profiles to understand customers. Talk to customers on the channels they use. Deliver a better CX and increase ROI. Increase LTV with postpurchase campaigns. ecom Offline Web A.I. Profiling Segment Social Chat ecom Automation SMS Personalize Ads Reports Typical usage of Engagement Cloud Solution Areas 19

20 Our foundations Focus on cross-selling: deeper customer relationships Expand our product suite: providing organic growth Expand geographical coverage Focus on developing our platform driving organic growth High quality product improves reputation and drives meaningful long-term relationships with partners Key partner relationships help drive international expansion in growing markets Grow our customer base Increasing our global; market presence Extend omnichannel capabilities Inorganic activity is selective and supplemental Deepening our strategic partnerships Building new connectors Globalising our talent Organisational strength and capabilities Deeper functionality with our core USP 20

21 Our platform wins against other providers in the market LOW (price: < 150/month) Functionality hits a wall Limited or no service/support Becomes expensive at high volumes Lack of flow functionality MID (price: k/month) Value vs. cost Ease of use is an issue Require better integrations Want more features included Require omnichannel HIGH (price: > 30k/month) Very high costs Often underutilize platform Additional costs to service Lack personal service Require ecommerce integration 21

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23 Product innovation Strategic partnerships Geographic expansion Future developments Further integration of functionality into the Engagement Cloud platform: More channels, e.g. Chat and Twitter DM. Further ecommerce and CRM integrations A.I. powered Product Recommendations A.I. powered digital advisors Enhanced analytics and reporting Omnichannel and automation enhancements Actual slides from development planning roadmap sessions 23

24 Product innovation Strategic partnerships Triggered SMS Broadcast SMS Transactional SMS Facebook Messenger Twitter DM (beta) Geographic expansion Website chat Landing pages Surveys & Forms Web push (beta) Facebook audiences Google Ad retargeting Instagram Ad retargeting App notifications WhatsApp (beta) RCS (beta) 24

25 Connectors Product innovation Strategic partnerships Magento connector revenue (ecommerce) now comprises 28% of total Engagement Cloud revenue. We recently extended our Global Premier Technology partner status agreement with Magento for a further three years. European Elite Partner Global Premier Technology Partner Geographic expansion Salesforce and Microsoft Dynamics revenue (CRM) each comprise 9% of total Engagement Cloud revenue. Approved Tech Partner Gold Microsoft Partner Revenue from the new connectors (Shopify, Big Commerce and Shopware) grew 372% albeit from a small base to 1m in the 6 months. The company is seeing a strong pipeline building on these connectors. Verified Integration Shopify Plus Technology Partner dotdigital named as Big Commerce's first Global Elite partner in Europe which will help with increasing addressable market and endorsement of the platform Verified Integration Verified Partner 25

26 EMEA focus on the Nordics region has resulted in stronger partnerships and growing revenue stream in the region Product innovation Strategic partnerships Geographic expansion Engagement Cloud international revenue is now 30% of total sales US revenue growth driven by system integrators and strategic partners 30% 10% 190% APAC growth a result of strong conversion of prospects to customers and further relationships with strategic partners 80% US clients Nordic clients APAC clients 26

27 higher LTV when of in-store purchases are Average return for 1 consumers shop on an omnichannel influenced by digital spent on more than one approach is adopted transactions marketing channel 27

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29 Outlook Clear and compelling strategy Highly scalable platform Attractive industry growth Successful dotdigital culture Opportunities for superior growth Experienced management team 29

30 Outlook Growth rationale remains highest ROI of all digital marketing channels at a return of $40 for every $1 spent Omnichannel platform High margins and high levels of contracted revenue Increasing international revenue growth Strong CAC to LTV ratio Confidence for the new fiscal year H showed strong progress against all strategic ambitions Rebrand and technology integration sets tone for omnichannel product and customers Board confident in expectations for the full year Strong recurring revenues (90%) 30

31 Certain statements included or incorporated by reference within this presentation may constitute forward-looking statements in respect of the Group s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast. This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or other securities in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares and other securities of the Company. Past performance cannot be relied up on as a guide to future performance and persons needing advice should consult an independent financial adviser. Statements in this presentation reflect the knowledge and information available at the time of its preparation. Liability arising from anything in this presentation shall be governed by English Law. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws. 31