Interim Results Presentation

Transcription

1 H1 2013/14 11th February 2014

2 Table of Contents December Table of Contents Company Background 3 Director Profiles 4 Time Line 5 Trading Performance - Continuing Operations 6 Divisional Performance 7 Statement of Financials 8 Low Dependency on Any One Client 9 Financial Summary 10 Accelerated Investment: Progress update 11 Closer Look at a New Client Win 12 US office 13 The Power Behind the Growth 14 Product Strategy 15 Magento Connector 16 Estimated Market Share 17 Sustainable Differentiation Strategy 18 The Five Stages of Marketing Automations 19 Improving Economic Climate 20 Outlook 21 Sample Client List 22 Contact Details 23 Appendix 24

3 Company Background 3 Company Background dotdigitalgroup was established in Originally providing a wide range of digital marketing services, it is now totally focused on its marketing platform which is one of the top UK marketing providers. People & Places 171 people Sales & Marketing 69 people IT & Development 43 people Client Services 30 people Other 29 people UK offices Croydon Headquarters London Bridge Sales & Demonstrations Manchester Regional Sales office Edinburgh Regional Sales office International offices New York, USA Sales office Minsk, Belarus Offshore Development Significant Shareholders Management Ian (Tink) Taylor 15% Simon Bird 12% Peter Simmonds 4% Institutions Old Mutual 8.3% Investec Asset Management Ltd 7.9% Liontrust Investment Holdings 5.1% Herald Investment Trust Plc 4.2% Hargreave Hale 3.9% * Free float : 69%

4 Director Profiles 4 Director Profiles Stable and experienced executive management team complimented by a non-executive board Peter Simmonds FCCA, aged 55 CEO & CFO Tink Ian Taylor, aged 40 Chief Operating Officer Simon Bird, aged 38 Chief Technical Officer with significant AIM Public Company experience and industry knowledge. Skip Gorden Fidura, 44 Client Services Director Milan Patel ACCA ACSI, aged 29 Company Secretary & Financial Controller Frank Beechinor, aged 49 Non-Executive Chairman Richard Kellett-Clarke FCA, aged 58 Non-Executive Director Simone Barratt, aged 53 Non-Executive Director

5 Time line 5 Time Line Whilst our business has changed almost unrecognisably from our formation in 1999, some qualities remain: a commitment to excellence, dedicated people and a profitable business model. Tink Taylor Co-Founder & COO COMPANY EARLY DAYS 1999 Ellipsis Media set up as web design and development agency Opened first office 2000 Hired first employee 2001 Built broadcaster tool 2002 Launched dotmailer Developing sales people and infrastructure 2006 Agreed the strategy to build dotmailer brand and user base 2006 Rebuilt the marketing platform PLUS MARKET LISTED SHARE PRICE 3.75p MARKET CAP 10m 2008 Won award for Delloitte Fast 500 Tech Co in EMEA Launched the landing page builder Ellipsis changes name to dotmailer Sent first ing on new platform Revenue 2.5m EBITDA 0.8m 2009 Won the NB Awards Growth Strategy of the year Acquired Netcallidas Ltd - Search Market Co Deloitte Fast 500 Tech Co s in EMEA Integrated dotmailer with Dynamics Launched Easy Editor, SMS Mobile feature and services dept First employee share options Revenue 4.8m EBITDA 1.1m 2010 Deloitte Fast Track 500 Tech in EMEA Opened Belarus office Integrated dotmailer with sales Logix Wins Croydon business awards for best medium sized business Annual sent volume reaches a billion s Revenue 6.0m EBITDA 1.5m AIM LISTED SHARE PRICE 7.875p MARKET CAP 21m 2011 Admission to AIM Launched social media management Translated the platform into eight languages Wins Croydon business awards for Best medium sized business Revenue 9.0m EBITDA 2.6m 2012 Integrated dotmailer with Salesforce Launched segments Won the Ruben de Honneur Awards at the European Business Awards for Best Mid Sized Business Revenue 12.0m EBITDA 3.4m AS OF 9/02/2014 SHARE PRICE 30.75p MARKET CAP 85m 2013 Closed dotagency business Integrated dotmailer with Magento Started accelerated investment strategy Opened New York Office Revenue 13.8m EBITDA 4.1m

6 Trading Performance 6 Trading Performance - Continuing Operations H M H M Growth % Revenue Cost of Sales (0.5) (0.4) 28.2 Gross Profit Administrative Expenses (4.9) (3.3) 47.3 Operating Profit EBITDA

7 Divisional Performance 7 Divisional Performance dotmailer Discontinued Central Cost Consolidated Dec-13 m Dec-12 m Growth * % Dec-13 m Dec-12 m Growth * % Dec-13 m Dec-12 m Growth * % Dec-13 m Dec-12 m Growth * % Sales (84.1) Cost of Sales (82.0) (37.9) Gross Profit (88.0) Administrative Expenses (82.0) Operating Profit before tax (0.1) (60.6) (0.5) (0.3) * Actual % increase is based on unrounded numbers

8 Trading position & Cashflow 8 Statement of Financials Position (Balance Sheet) Cashflow Dec-13 m Dec-12 m Dec-13 m Dec-12 m Assets Other Current Assets Cash Total Assets Non Current Liabilities - - Net cash generated from operations Net cash used in investing activities Net Cash generated from financing activities Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Current Liabilities Total Liabilities Net Assets

9 Low Dependency on Any One Client 9 Low Dependency on Any One Client Largest client only 2% of total revenues Top 100 clients account for 24% of total revenues

10 Financial Summary 10 Financial Summary High proportion of recurring revenues Large percentage under contract Healthy balance sheet, strong cash position and no debt Good US traction High gross margin

11 Accelerated Investment: Progress update 11 Accelerated Investment: Progress update What we said we were going to do? Invest up to 3m in Marketing, Sales & Account Management Winning/retaining more mid size to large corporates Increase % of clients on contracts Increase average order values Increase total recurring revenue Launch new features to the platform Invest in international markets Continue to look at earnings enhancing acquisitions What we achieved so far Investment added in 38 new staff throughout the business * Total annualised committed investment of 1.2m Total committed revenue from investment of 0.2m Multiple high profile client wins ** 73% of clients on contracts from 65% in the same period last year AOV from new clients increased from 217 to 295 Total recurring revenue increased from 76% to 78% Launched Magento connector Customer Insight Module & Lifecycle Management in Beta New client signing up on contracts increased from 66% to 74% * 24 in Sales & Account Management, 6 in Campaign Management & Project Management, 8 in IT & Development ** Client wins include Harley Davidson, Metapack, OFGEM, Fraser Hart, Payzone, Skanska, GFK, Santander, Fujifilm, Fruit of the Loom

12 A close look at a new client win 12 A Closer Look at a New Client Win Online Fashion Brand Magento Connector Consultancy services Setup of Triggered Programs, Wish list & Abandoned Basket campaigns Over 5,000% ROI Sample creative Website home page

13 US Office 13 US Office New Offices in Manhattan, New York 7 People in the office including the Chief Operating Officer 27 new customers signed Average Spend of $3,100 New Business & $600 Recurring spend Revenues from the US region increased from $88k to $460k Recent client wins include Play Rugby USA, Hockey Australia, Air Turks & Caicos, Duff & Phelps Investment Management Company, 3D Lacrosse LLC & Creative Teaching Since we opened in early 2013, I ve been extremely encouraged by the strong sales pipeline and initial partnership agreements Tink Taylor, Co-Founder & COO

14 The power behind the growth 14 The Power Behind the Growth Our year on year sustainable business growth is underpinned by our three brand pillars Higher value prospects attracted by our advanced marketing automation platform that delivers results GROWTH Increasing the customer spend by empowering technology and world class services Strong client retention rates due to high application satisfaction levels

15 Product Strategy 15 Product Strategy Rebrand to reposition offering for mid to large clients Launch Customer Insight module & Lifecycle tool Continued development on our world class integrations with CRM & Ecommerce platforms Value added services well received Services revenues more than double to 700k Clients Include DHL, BP, Sage, Hunter Boots, GFK & St. James s Place Application screen grabs Lifecyle tool

16 Magento Connector 16 Magento Connector Officially launched in September 13 Average monthly spend per customer of 700 Full time development team Over 75 Customers including 7dayshop, Paperchase, World Duty Free, Elemis, Cartridge World, Cabbages & Roses, Lola Rose and Heals Segmenting using order history inside dotmailer Key USP s Synchronise all customer data including customer orders and wish lists Segment and automate triggers on sales information Dynamic product recommendations and coupon codes Magento data mapping to dotmailer data fields.

17 Market Share 17 Estimated Market Share Estimated addressable market for UK ESP is c m*. Total market size of 495m estimated by Econsultancy includes Agency creative and inhouse resources. 10% 8% 7% 6% 6% 6% 5% 4% 4% 4% 4% 4% 3% 3% 3% 3% Highly fragmented Market UK MARKETSHARE 2% 2% 2% 2% 2% 2% 1% 1% 1% 1% <1% <1%<1%<1%<1% dotmailer is the largest UK ESP with 8% of the Market Share ESP NAME & UK TURNOVER ( M) Exact Target UK dotmailer Vision edialogue Silverpop Teradata ecircle Pure 360 RedEye Emarsys Epsilon Experien Mailchimp UK responsys Other Adestra Newsweaver Neolane Communicator Corp Communigator Marketo UK SDL Hubspot Lyris center Selligent Concep Bronto Vertical Response Campaign Monitor UK Constant Contact StrongView * Data obtained from Companies House & buyers Guide by Econsultancy

18 Sustainable differentiation strategy 18 Sustainable Differentiation Strategy Our core strategies to maintain competitive advantage are: Marketing Automation Delight customers with friendly, knowledgeable client service Introduce product attributes for which customers will pay a premium Increasingly focus on specific niches where expertise/competencies deliver high client value. Ecommerce Big Data CRM Integration Real-world marketing automation Multi-language/decentralised Marketing Client maturity / Sophistication Support Product Differentiation Pricing User Experience Systems Integrations Value Add Services Simplicity Market Maturity

19 The Five Stages of Marketing Automation 19 The Five Stages The five of Marketing phases of Automation Marketing Automation Adoption level of Marketing Automation Indicative Features and Services used Easy Editor Manual segments Manual triggers Creative studio Transactional customer data ROI tracking Custom development Data cleansing Strategic consultancy Auto segment creation Lifecycle campaigns 1-to-1 send time optimsation Predictive intent and rich customer behaviour analysis. Social media management Fully managed service Automatic content created and share tools. Self-educating platform. Auto optimising campaigns. Auto data enriching. Blended, multi channel lifetime ROI reporting. Business consultancy Indicates how platform complexity and intelligence grows User job role - Level of tech skill - Frequency of use - Typical use case Junior Marketing Exec - Technophobe - Intensive user - Create, test, send and report on campaigns. Marketing Executive - Early adopter - Frequent user - Improve targeting, tracking & list growth Senior Marketing Executive - Fast follower - Light user - Coordinate basic multichannel marketing Marketing Director - Tech advocate - Occassional user - Manages bidirectional multimedia campaign. CDO - Technophile -Fleeting user - Customer research and innovation pipeline. The relationship between the user and platform changes as the level of automation increases Success Criteria Measured on s and campaigns sent. Measured on pipeline volumes. Measured on lead quality and conversion rates. Measured on ROI of combined activities. Measured on contribution to business objectives. Success criteria ties into business success Spend Justification Costs and resources tightly constrained Costs justified by time saved Costs justified by increased ROI Costs seen as a business essential Value of the data harnessed and refined outstrips costs Costs and justification change with time Level of Customer Insight No insight. Time based opportunistic targeting used. Basic behavioural information and marketing segments. Broad understanding of customer spending and demographics. Rich predictive psychographic customer profiles. Strategic intelligence fed to other business systems. Becomes key channel of acquiring / refining customer insight Business and Marketing Integrations No system integrations. marketing activty exists in a silo. Website APIs. Campaigns manually linked to other marketing activity All core systems connected. Marketing assets easily shared across other channels Suite of automation tools from dotmailer app store. Multichannel campaigns Proactively reaches out to other systems to self educate and enrich. Moves to central hub of businss comms LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 Batch & Blast Smarter Semi automated Fully automated Enterprise Batch & Blast Marketing Marketing Automation

20 Outlook 1 20 Improving Economic Climate Infographic courtesy of Econsultancy Infographic courtesy of The Drum

21 Outlook 21 Outlook Investing for Growth Key Strategy remains focussed on continued successful organic growth Investment in effective marketing, sales & account management Winning and retaining fast growing corporate and mid size clients with high lifetime values Priority: continued investment in dotmailer platform Strong Growth Rationale Large & growing market High levels of brand awareness Very strong product Experienced management team Good operational Leverage High margins High levels of contracted recurring revenue H2 Outlook Revenue and investment on plan Larger monthly commit from corporate deals Strong uptake of Magento connector Confidence in the market with marketing budgets going up US Revenues building 1 invested in marketing generates a return of 21* 1 we spend on sales and marketing has historically generated a revenue of 6 60% of companies looking to increase marketing budgets* * Source: DMA report ** Source: Econsultancy

22 Sample Client List Sample Client List dotmailer is the trusted marketing partner of huge success stories including DHL, ODEON, ITV Studios, REISS, Renault Trucks and Nationwide Building Society. Recent client wins include Adecco Group Harveys Furniture Addison Lee Help for Heroes Balfour Beatty Investec Bourne Leisure Liverpool Victoria BP International Labour Party Cartridge World OId Mutual City & Guilds Osprey London Delice de France Michael Page Int l Econsultancy Mungo & Maud EDF Energy Ryman England Hockey Board Santander Fidelity Surrey County Council

23 Contact Details 23 Contact Details If you have an enquiry about any matter raised in this document please do not hesitate to contact a member of the team direct using the details below We are here Peter Simmonds CEO & CFO of dotdigital group PLC T: E: peter.simmonds@dotdigitalgroup.co.uk Frank Beechinor Non Executive Chairman of dotdigital group PLC T: E: frank.beechinor@dotdigitalgroup.co.uk Tink (Ian) Taylor Chief Operating Officer of dotdigital group PLC T: E: tink.taylor@dotdigitalgroup.co.uk Simon Bird CTO / Founder of dotdigital group PLC T: E: simon.bird@dotdigitalgroup.co.uk London office Emerson Studios 4-8 Emerson Street London SE1 9DU Croydon office No.1 Croydon Addiscombe Road East Croydon CR0 0XT dotmailer, an marketing platform which is one of the top UK marketing providers with Milan Patel FD & Company Secretary of dotdigital group PLC T: E: milan.patel@dotdigitalgroup.co.uk over 5000 clients

24 Disclaimer 24 Disclaimer This presentation contains certain forward-looking information and statements. Such forward-looking information and statements are based on the current, estimates and projections of the Company or assumptions based on information currently available to the Company. Such forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and assumptions. The Company cannot give assurance to the correctness of such information and statements. These forward-looking information and statements can generally be identified by the fact that they do not relate only to historical or current facts. Forwardlooking statements sometimes use terminology such as targets, believes, expects, aims, assumes, intends, plans, seeks, will, may, anticipates, would, could, continues, estimate, milestone or other words of similar meaning and similar expressions or the negatives thereof. By their nature, forward-looking information and statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements that may be expressed or implied by the forward-looking information and statements in this presentation. Should one or more of these risks or uncertainties materialize, or should any underlying assumptions prove to be incorrect, the Company s actual financial condition or results of operations could differ materially from that or those described herein as anticipated, believed, estimated or expected. Any forward-looking information or statements in this presentation speak only as at the date of this presentation. Except as required by the Oslo Stock Exchange rules or applicable law, the Company does not intend, and expressly disclaims any obligation or undertaking, to publicly update, correct or revise any of the information included in this presentation, including forward-looking information and statements, whether to reflect changes in the Company s expectations with regard thereto or as a result of new information, future events, changes in conditions or circumstances or otherwise on which any statement in this presentation is based. Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements.