Tradedoubler. Interim report January March May 2015

Transcription

1 Tradedoubler Interim report January March May 2015

2 Agenda

3 Tradedoubler in brief Confidence and opportunity in a rapidly changing world

4 A European Performance Marketing leader We drive online sales through our network of publishers who promote advertiser products in return for commission Online consumer Desired action Publisher website Merchant website

5 Network & technology: the next step in performance marketing Our performance marketing platform combines programmes on private networks and our public network, in a single solution This enables clients to manage their own publishers and extend activity beyond Tradedoubler s geographical footprint Clients can plug into our proven and established international network 5

6 We work in 69 countries Tradedoubler has the largest international footprint of any performance marketing network Offices in Hamburg London Madrid Milan Munich Paris Rotterdam Stockholm Telford Warsaw Zurich

7 We create results for leading brands We work with over 2,000 advertisers and 180,000 publishers

8 An attractive offering that creates value for clients In Q We signed 185 new client contracts, of which 40 are international We are implementing 274 new programmes In 2014 we delivered 24bn SEK order value for clients

9 And we are developing in response to a changing world We have a market-leading mobile offering that includes in app tracking 18% of our sales are made on mobile devices Our market leading business intelligence tool enables data driven insight Global Capabilities allows us to work effectively with our clients anywhere in the world

10 Returning to top line growth We have made significant structural and operational changes Stable management structure New internal processes implemented to increase efficiency Detailed understanding of client profitability New initiatives to grow existing business Fixing the core of our business will not deliver required growth Affiliate market not developing in line with overall ecommerce and digital ad spend Returning to top line growth We have redefined our strategic direction which allows us to address a larger market and return to profitable growth

11 A broader, dynamic marketplace

12 Consumers will continue to spend more online Online sales in Western Europe Retail and travel. billion % % % % 489 9% % 12% 10% 300 7% 8% 200 6% 4% 100 2% % Online sales % growth Source: emarketer Worldwide Retail Ecommerce Sales January Digital Travel Sales Worldwide by region December Converted from USD at $1= 0.927

13 Online display advertising will continue to grow and take a larger share of online ad spend Digital ad spend in Western Europe by format billion Search* Display** Classifieds and directories Source: emarketer Western Europe Digital Ad Spending. March 2015

14 Online display advertising will continue to grow and take a larger share of online ad spend Digital ad spend in Western Europe by format % 18% 16% 17% 17% Significantly higher growth predicted in 2016 compared to Nov % 12% 10% 8% 6% 4% 2% 0% 14% 10% 10% 10% 10% 9% 9% 9% 9% 10% 8% 8% 7% 6% 8% 6% 5% 7% 4% 6% 5% 3% 3% 3% 2% 0% Search Display** Classifieds and directories Total Source: emarketer Western Europe Digital Ad Spending. March 2015

15 A complex online ecosystem has developed Consumers Access the internet from multiple devices: 1 Desktop 2 Mobile phone 3 Tablet Advertisers Build brand or need to achieve specific consumer action, e.g. clicks, sales, leads Ad-tech Technology companies that enable and improve effectiveness in online advertising: 1 Tracking 2 Tag management 3 Attribution 4 RTB 5 DSP/SSP 6 Affiliate 7 Search/PPC optimization 8 Ad-serving 9 Reporting/analytics/data management 10 Re-targeting Publishers Key channel for serving online ads in different formats, e.g. text, images, flash, video 1 Metasearch/comparison/voucher/loyalty 2 Vertical content sites 3 4 Applications 5 Search 6 Social media Agencies Companies that build brands or deliver consumer action on behalf of an advertiser Publisher networks Groups of publishers bundled in relevant structures 1 Ad exchange: Publishers offering audience, e.g. FBX 2 Ad network: Publishers offering inventor

16 Brands struggle to understand this complex landscape and are unable to target consumers effectively Three-quarters of consumer brands say engaging connected customers is a priority Only 29% have a strategy in place to target and sell to this audience 37% don t know how to use data collected from online sales to inform a targeting strategy Digital advertising spend in 2015 Just 8% of senior marketers have full confidence in their digital marketing skills 52% of marketers do not test their campaigns or content and instead rely on instinct

17 Technology is the key driver and enabler in this new landscape

18 We are redefining our position in this complex marketplace

19 Our corporate strategy will deliver a new form of digital advertising Digital Advertising 1.0 was untargeted creative treatments based on delivery/budget goals Digital Advertising 2.0 was targeted creative treatments based on contextual data Digital Advertising 3.0 was targeted creative treatments based on user data the Adnologies ad tech offering Digital Advertising 4.0 will be a combination of all of this optimised by artificial intelligence to achieve definable marketing goals

20 How we create smarter results for our clients

21 The new corporate strategy extends our addressable market from 2 to 13 BSEK Estimated split of advertisers total online ad spend By percentage Estimated value (GP) of online advertising market (2014, BSEK) 21 PM: Affiliate (PUB) PM : Affiliate (PRI) 7% 7% 20% Branding Addressed with new strategy Currently adressed Not directly addressed PM: Display 26% % 6 8 PM: Search Branding Search Affiliate (PRI) Affiliate (PUB) PM: Display Total Notes 20% branding and 80% is performance marketing (PM) 50% of PM is search 35% of other PM is affiliate, split 50/50 in public (PUB) and private (PRI) Notes Branding: 15% of ad-spend Search: 1,5% of ad-spend Affiliate (PUB): 15% of ad-spend Affiliate (PRI): 5% of ad-spend PM Display: 20% of ad-spend

22 Our strategy will be realised through acquisition, investment and innovation 30 additional developers are being recruited as an initial step Delivers a technology stack that complements and extends our offering in line with the new corporate strategy Acquisition of the technology company, Adnologies

23 Agnostic offering delivers value and drives growth Scalability Profitability Business model aligned with client objectives Automated delivery is scalable Automated delivery drives profitability Data driven insight Technology assets Maximise tracking to build data assets and derive actionable insight E2E ad-tech platform becomes a technology asset

24 Summary of our position Our new corporate strategy extends our addressable market and we are well positioned to capitalise on the opportunities it presents We have a new strategy that addresses a broader market We have an advanced technical platform Our heritage in affiliate marketing means we have access to significant data and expertise We provide digital marketing expertise to many leading brands We are growing our business through investment and acquisition We have new shareholders who have deep knowledge and experience in the digital and e-commerce marketplace

25 Q financial results

26 Overall Q1 financials MSEK Q1 Q1 Profit and loss Net sales Gross Profit Gross Margin 22,7% 20,7% OPEX EBITDA 12 3 Change related 0-7 Reported EBITDA 12-4 CAPEX Cash flow from operations Cash and financ ial investments Net Cash Q1 net sales down 3% y-o-y and 11% currency adjusted Gross Profit in Q1 was down 12% and currency adjusted 19%. Around half of the decrease was explained by two pan-european customers that left in 2014 and reductions in non-core business Operating costs, excluding change related items, down 4% or 10% currency adjusted EBITDA in Q1 was 3 (12) MSEK Increase in CAPEX mainly relating to higher capitalized development expenses in line with strategy All numbers in the text above are excluding change related items

27 Net Sales Net Sales (SEK M) Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q1 net sales SEK 431 M (445) down 3% y-o-y and 11% currency adjusted More than half of the decrease is explained by lower revenues from two pan-european customers and reductions in non-core business During the last quarter revenue has grown in Sweden and the UK Note: All numbers are excluding change related items Details regarding change related items: Above not disclosed change related items relate to a correction of prepayments amounting to SEK -10 M in Q and an adjustment referring to Badwill of SEK +1 M in Q The latter refers to the acquisition of Adnologies.

28 Gross Profit and gross margin % Gross Profit (SEK M) Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q Gross Profit was SEK 89 M (101), down 12% y-o-y and currency adjusted 19% Underlying Q1 Gross Profit within core business roughly declined in line with the yearon-year trend from recent quarters Gross Margin was 20.7 (22.7) %, mainly due to price pressure within affiliate Gross profit Gross margin, % Note: All numbers are excluding change related items Details regarding change related items: Above not disclosed change related items referring to Net Sales relate to a correction of prepayments amounting to SEK -10 M in Q and an adjustment referring to Badwill of SEK +1 M in Q Also cost of goods sold have been adjusted with the publisher debt revaluation of SEK +8 M in Q

29 Operating Costs Operating Costs (SEK M) Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Operating costs, excl. dep & amort Change related costs Q1 operating costs excluding change related items were SEK 86 M (89), down 4% or 10% currency adjusted Cost reduction mainly due to fewer staff, which was 345 (367) end of Q1 Change related costs in Q of 8 MSEK mainly referred to the closing of the Norwegian office, an office move in London and costs for the acquisition of Adnologies

30 EBITDA EBITDA (SEK M) EBITDA Change related items Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 EBITDA in Q excluding change related items was 3 (12) MSEK Decrease in gross profit has partly been counterbalanced by reduced costs Note: All numbers are excluding change related items, see previous pages for details

31 Cash flow and financial position MSEK Q4 Q1 Q2 Q3 Q4 Q1 FY LTM Cashflow Q EBITDA incl change related Non cash items Paid tax & interest Changes in working capital CF from operations CAPEX Other CF for the period Opening cash Fx Cash end period Cash end period Short term investments Cash and short term inv Sum of cash and short term investments decreased by 64 MSEK to 365 MSEK during the last twelve months Decrease mainly referred to cash flow from operations and CAPEX Quarterly changes in working capital relates to a large extent to random timing of customer payments Cash and short term inv Bond Loan Net Cash end period W orking c ap end period

32 CEO conclusion We are making good progress on our journey to become the leader in generating smarter performance marketing results for our clients through traffic, technology and expertise. During this quarter we have increased operational efficiency to improve profitability and stabilise revenue. We have increased revenue for the first time in Sweden and for three quarters in a row in the UK. However Gross Profit in Q1 declined in line with the trend of recent quarters. The acquisition of the independent German technology company Adnologies is another important step in the development of our strategy as their product portfolio perfectly complements our own. This acquisition and our investments in our teams and products give us great opportunities to grow our business in the future. Stockholm 5 May 2015 Matthias Stadelmeyer

33 Q&A Q A Q&A Q&A Q A Q2 report to be published on 23 July 2015