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Tradedoubler interim report January – June 2015

Positive signs in net sales and good progress in product development

Positive signs in net sales and good progress in product development

The second quarter April – June 2015

  • Net sales amounted to SEK 414 M (411). Excluding change related items net sales were SEK 419 M (411), an increase of 2% or a decrease of 4% adjusted for changes in FX rates.
  • Gross profit excluding change related items was SEK 84 M (91), a decrease of 8% or 13% adjusted for changes in FX rates.
  • Gross margin excluding change related items was 19.9% (22.1%). The decrease was mainly due to price pressure within affiliate.
  • Operating costs, excluding depreciation and change related items, were SEK 90 M (87). This was an increase of 3% or a decrease of 2% adjusted for FX changes mainly related to fewer staff. Full time equivalents at end of Q2 were 355 (378).
  • EBITDA amounted to SEK -13 M (-9). Excluding change related items EBITDA was SEK -6 M (4).
  • Capitalised expenses increased to SEK 8 M (3), due to hiring of more developers in line with the strategy.
  • Earnings per share, before and after dilution, were SEK -0.52 (-0.37).
  • Cash flow from operating activities was SEK -32 M (-43) and net cash decreased by SEK 42 M during the second quarter to SEK 77 M. The sum of cash and interest-bearing financial assets was SEK 323 M (380) at the end of the second quarter.
  • Bertil Lundell who was appointed as CTO in January 2015 left, as earlier communicated, the company in June.
  • As previously communicated, renegotiations with one major international client have a negative impact on revenue in 2015.

The Interim period January – June 2015

  • Net sales were SEK 846 M (856). Net Sales excluding change related items were SEK 851 M (856), a decrease of 1% or 8% adjusted for changes in exchange rates.
  • Gross profit excluding change related items was SEK 173 M (192), a decrease of 10% or 16% adjusted for changes in exchange rates. Gross margin excluding change related items amounted to 20.3% (22.4)
  • Operating costs, excluding depreciation and change related items, were SEK 176 M (176). This was a decrease of 0% or 6% adjusted for changes in exchange rates.
  • EBITDA amounted to SEK -17 M (3). EBITDA adjusted for change related costs was SEK -3 M (16).
  • Cash flow from operating activities amounted to SEK -30 M (-119).
  • Earnings per share, before and after dilution, amounted to SEK -0.76 (-0.28).
  • Tradedoubler finalised its Nordic regional structure and closed its office in Norway with limited one off costs.
  • The German technology company Adnologies was acquired to support the new corporate strategy. The impact from Adnologies upon the results year to date were limited.
  • French media company Reworld Media S.A. acquired 19.1 per cent of Tradedoubler’s share mainly from Monterro 1A AB and thus became the largest shareholder in the company.
FINANCIAL OVERVIEW, SEK M Apr-Jun 2015 Apr-Jun 2014 Jan-Jun 2015 Jan-Jun 2014 Change % Full year 2014
Net sales excluding change related items 419 411 851 856 -1% 1 743
Gross profit excluding change related items 84 91 173 192 -10% 379
Gross margin (%) 19,9% 22,1% 20,3% 22,4% 21,7%
Operating costs excl. depr. and change related costs -90 -87 -176 -176 0% -339
EBITDA excluding change related items -6 4 -3 16 -118% 39
EBITDA-margin (%) -1,4% 0,9% -0,3% 1,8% 2,3%
Change related items 1) -7 -12 -14 -12 -20
EBITDA -13 -9 -17 3 -609% 20
Impairment goodwill 0 0 0 0 -60
Operating profit (EBIT) -19 -14 -29 -7 -63
Net investments in non-financial fixed assets (Capitalized expense) -8 -3 -23 -7 -17
Cash-flow from operating activities -32 -43 -30 -119 -110
Liquid assets incl financial investments, at period’s end 323 380 323 380 372
Net cash 2), at period’s end 77 135 77 135 126
1) Change related items during Q2 2015 that impacted net sales related to an adjustment for errors in recurring invoicing to one large customer since mid 2013. Change related costs are mainly related to severance payments.
2) Current investment and liquid assets less interest-bearing liabilities.

CEO MATTHIAS STADELMEYER’S COMMENTS ON THE SECOND QUARTER OF 2015

“The underlying gross profit development during the second quarter was in line with the year-on-year trend of previous quarter. However, the development within different markets varies considerably due to specific market reasons and our own performance. We see good results and year-on-year revenue growth in the United Kingdom, Germany, Spain, Sweden and Poland while especially France is more challenging. Total operating costs increased compared to the first quarter 2015 due to higher product development costs in line with the strategy. Capitalised product development expenditure was on the same level as in the previous quarter.

During the second quarter we made good further progress with the realisation of our new offerings. We are currently running test campaigns in selected markets using integrated Tradedoubler and Adnologies technology and are seeing encouraging results. In September, we will have a beta product to further test and develop together with selected clients.

While we continue to roll out ADAPT, our market-leading business intelligence tool, we are adding new functionalities and are in the process of incorporating data relating to online user journeys. This is a major step forward and enables clients to have great insights into how their consumers interact with performance channels.

We have more exciting launches planned during the second half of 2015 focusing on new solutions that deliver data-driven insights and functionalities that help us to create smarter performance marketing results for our clients.

With these new offerings we are extending our addressable market considerably and we are now in the process of strengthening our commercial teams in the markets to ensure that we will be able to take full advantage of the market potential”

Presentation

This interim report will be presented at a teleconference on the 23th of July 2015 at 10.00 a.m. CET. To follow the presentation, please dial (SE) +46 8 566 426 90, (UK) +44 203 428 14 33 or (US) +1 855 831 59 45. The presentation may also be followed via webcast using the link: http://www.tradedoubler.com/en/about/investors/reports-and-media/presentations/

Other

Tradedoubler discloses the information provided herein pursuant to the Swedish Securities Markets Act. The information was released for publication on the 23th of July 2015 at 08.00 a.m. CET. Numerical data in brackets refers to the corresponding periods in 2014 unless otherwise stated. Rounding off differences may arise.