Sedo Holding AG Press and analysts conference. Frankfurt, March 21, 2013

Transcription

1 Sedo Holding AG Press and analysts conference Frankfurt, March 21, 2013

2 Management Dr. Dorothea von Wichert-Nick Marketing/Sales affilinet Tobias Flaitz Marketing/Sales Sedo Axel Hamann Finance Alexander Röthinger Technology Previously managing director at Solon Management Consulting, an international strategy consultancy company for leading European media and telecoms companies. At Sedo Holding AG since Tobias Flaitz was previously active in management positions in the strategy and business development areas at Hubert Burda Media/Burda Digital. For the last ten years has held management board/managing director positions at IT and consumer goods industry companies. Axel Hamann started his career at management consultancy Accenture. Since 2005, managing director (technology) with responsibility for affilinet technology and development area. More than ten years experience in development area for digital sales promotion. 2

3 Sedo Holding AG results Results for 2012 financial year 6.6% year-on-year sales growth Good revenue growth in Affiliate Marketing segment (+17.7%) Revenue decline in Domain Marketing (-17.9%) EUR 3.2 million goodwill impairment at affilinet France EUR 57.1 million goodwill impairment at Sedo subgroup Positive trend in key network figures 3

4 1. Sedo Holding AG market and strategy - affilinet - Sedo 2. FY 2012 results 3. Outlook 4

5 affilinet Partner for European affiliate marketing for 15 years Leading European performance network since Founding in Ebersberg, DE 2005 Branch opened in UK 2006 Branch opened in Paris 2008 Launch in Spain and Netherlands 2012 Takeover of Cleafs in NL 2013 Branches opened in CH und AT Serving customers in Ireland, Belgium and Italy More than 170 highly qualified performance marketing staff Extensive knowledge of all relevant markets and business models Dublin London Madrid Amsterdam Paris Munich Vienna Zürich Rome 5

6 Market environment: affilinet benefits from both online marketing and e-commerce market E-commerce / online marketing trends in Western Europe EUR bn e 2013e 2014e 2015e Online Marketing Umsatz E-Commerce Umsatz CAGR % 11.6% affilinet is an online marketing platform and digital sales channel affilinet growth potential is above market growth: new segments and markets, expansion of market share Some fragmented markets with high competitive intensity Consolidation as basis for strengthening business Source: emarketer 2011 (ecommerce)/2012 (online advertising) 6

7 Addressable market: affilinet continues to sustainably expand its market shares in FY 2012 Affiliate market growth (in EUR mill.) CAGR % Revenue trends compared (2012 vs. 2011) 20% 15% 17.7% % 11.7% 10% 5% 4.4% ,7% 2.2% 0% -5% Zanox e 2013e 2014e -10% -15% -9.1% Tradedoubler Source: affilinet Marktmodel, emarketer, IAB, Deloitte, PwC, Axel Springer, TradeDoubler 7

8 Our aim "Scalable, profitable growth"" carried by strategic pillars Scalable profitable growth = boosting sales and margin and efficiency "Shape the market" Establishing market leadership Quality leadership (product, partners, tech) Intelligence, ROIoptimized marketing solutions Integrated, scalable deployment of performance technologies In implementation "Passion for performance" Boosting productivity Sales initiative Performance steering Automation of platform Efficient cost management Focusing "Truly international" International synergies Tapping pan-european customers Europe-wide critical mass Expansion of Austria / Switzerland Continuous expansion 8

9 Privacy debate: No risk, but regulatory necessity in a maturing industry EU eprivacy Directive The user (end-customer) requires: 1. clear and extensive information about tracking: that tracking occurs purpose of tracking duration of tracking Option to consent to tracking or not 3. Option to revise/amend decision The affilinet solution: Complete information Extensive PR and explanatory work (trade fairs, white papers, workshops, press work) Complete transparency Support for publishers with compliance tool (see screenshot) Complete control Transfer as quality parameter in frontend 9

10 Example: Affilinet Matchmaster Unique, self-optimizing recommendation machine Approach: Every Monday, advertisers receive 10 appropriate, "intelligent" partner recommendations and can issue invitations based on this USP: Identification of previously unknown attractive publishers, interactivity between advertisers and publishers, higher transparency Fit Affilinet strategy: Efficiency through automation and intelligent optimization Sales revenue growth Sustainable sales success (11/12 mid-3/13) 5,600 new partnerships 28,500 transactions 140k publisher commissions First step towards intelligent and automatic optimization 10

11 Example: Data Warehouse Basis for strategic further development of customers In-house utilization of data warehouse Detailed client reporting Strategic analyses Input for optimization solutions Sector reports indices In-house utilisation of data warehouse Controlling of customer success/profitability KPI monitoring Strategic analyses Fit Affilinet strategy Efficiency through quicker analyses Boosting sales revenue / margin through better management/selection of customers 11

12 1. Sedo Holding AG market and strategy - affilinet - Sedo 2. FY 2012 results 3. Outlook

13 Value of domains in trading: Average prices continue to rise, fixed prices with rising demand Average prices [EUR] gtld & cctld Top sales channels (1)» Prices recover after 2011» 2012 transaction volumes approx. EUR 53 mill.» Average value EUR 1,463» Median value EUR 461» Increase in make-offers and immediate purchases» +11% sales via immediate purchase yoy» Active marketing remains important 13 (1) Buy-it-now = fixed-price domains

14 Domain marketing: Trading growing with further potential, domain parking profitable but falling Parking» Business expected to continue decline» Aggressive competition with growing margin pressure» Product remains profitable» Sedo's strength: most customers in high-margin long-tail area Targets» Assuming active role as largest provider in a consolidating market» Temporary stabilization / diminishment of sales decline» Ensuring long-term profitability Trading» Trading activities growing» Further activities in preparation (e.g. new gtld auctions)» Largest domain marketplace: 14.9 mill. domains tradable (31/12/2011: 15.7 mill.)» Number of registered customers: 1.5 mill. (31/12/2011: 1.4 mill.) Targets» Stronger internationalization» Tapping new target groups through new gtlds Sustainable growth of sales and earnings contributions 14

15 Strategy: Keep parking profitable, prepare trading for sustainable growth (new TLD etc) Parking Bundle of measures including:» Further performance optimization» Google optimization (template, portfolio, template rotation, 1-click vs. 2-click etc.)» Non-Google expansion (linking up with international ad providers, parallel bidding etc)» Technology optimization» Establishing new ad formats for better monetization Trading Expansion of existing and launch of new activities:» Creation of new gtld auctions» Market entry/expansion, especially in BRIC states» Expansion of SedoMLS network» Boosting trading inventory and fixed price domain offering» Start expiring domain auctions 15

16 SedoMLS product: Significantly exceeds expectations and forms basis for scalable growth SedoMLS Sedo's multi-listing service Sale of domains listed on Sedo.com with registrars worldwide Best sales opportunities through immediate offering and rapid purchase process GoDaddy we are expanding Sales via GoDaddy successively increase "Make Offer" inventory additionally available from September (c. 7 mill. domains) Registrar connection Total of more than 80 registrars in SedoMLS network 6 of top 20 registrars integrated (around 49% of global registrations) Top 20 registrars with worldwide > 80% global domain registrations Sedo in discussions with all top 20 registrars Optimization of listing process caters for further inventory creation 16

17 Outlook for new gtlds: Auctions offer potential for growth, demand exists, foundations now being laid.apartments.hotel.bavaria.music.art.app.green.book.lol.llc CLOUD.PARIS.NYC.brand.private.HIV.AUTO.AUCTION.BERLIN.buy.LAW.finance.film.ECO.ARCHITECT» Today: 280 country-code TLDs and 22 generic TLDs» 2012: 1,912 TLD registrations» From 2013: Market entry launch spread over years» 751 disputed applications (> 1 applicant) ICANN milestones / new gtlds» Market entry of new gtlds expected from Q Sedo Service» Premium domain listing» Pre-brokerage of premium domains» Sunrise and Landrush auctions» Premium domain sales, brokerage, auctions» Marketing support Status» Discussions with almost all applicants» More than 400 qualified leads for Sedo» More than 70 contracts signed» Of which c. 10 non-contestant» Services for 5 TLDs budgeted for 2013» Discussions with all major applicants» Discussions with > 10 individual applicants 17

18 1. Sedo Holding AG market and strategy - affilinet - Sedo 2. FY 2012 results 3. Outlook

19 Goodwill impairment at Sedo subgroup and affilinet France Trend towards weakening business in domain parking worsens further in 2012, contrary to our expectations affilinet France unable to realize turnaround in H1 2012, contrary to our plans Goodwill impairment charges 57.1 mill. EUR Sedo subgroup 3.2 mill. EUR affilinet France 60.3 mill. EUR 19

20 Group sales and gross margin Sales (IFRS in mill. EUR) Gross margin (in %) % 18.8% Gj 2011 FY Gj 2012 Gj 2011 Gj

21 Group EBITDA and EBT EBITDA** (IFRS in mill. EUR) EBT** (IFRS in mill. EUR) EBT before extraordinary items 7.6 EBT 5.0 Gj 2011 Gj 2012 * Earnings before interest, tax, depreciation, amortization and write-downs on domains ** Earnings before tax FY FY

22 Group net income and EPS Consolidated net income (IFRS in mill. EUR) EPS (IFRS in EUR) -1.0 Spalte1 Spalte FY 2011 FY 2012 Gj 2011 Gj

23 Segment sales trends affilinet sales (IFRS in mill. EUR) Sedo sales (IFRS in mill. EUR) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q

24 Highlights: affilinet Sales and earnings contribution (IFRS in mill. EUR) 31/12/ /12/ Sales revenue Contribution* Partner programs Websites Employees Gj 2011 Gj 2012 Sales up 17.7% to EUR 101 million Expansion of major customer business and advancing internationalization Higher payments to affiliates (gross margin: 14.2%, after 15.4% in 2011) EUR 3.2 million goodwill impairment loss at affilinet France Earnings burdened by investments in major customer business and capacities * Figure equivalent to EBIT 24

25 Highlights: Sedo Sales and earnings contribution (IFRS in mill. EUR) Gj 2011 Gj /12/ /12/2012 Tradable domains 15.7 mill mill. Marketable domains 4.4 mill. 4.4 mill. Registered members 1.4 mill. 1.5 mill. Employees Sales revenue Contribution* Sales fall to EUR 31.7 million (-17.9%) Weaker domain parking business, domain trading at stable level EUR 57.1 million goodwill impairment loss at Sedo subgroup * Figure equivalent to EBIT 25

26 Balance sheet figures Equity (IFRS in EUR mill. / %) 77.8% 80.4% 80.0% % 57.2% in EUR mill. 31/12/ /12/2012 Liquid assets* Trade receivables Goodwill Trade payables Share capital /10 06/11 12/11 06/12 12/12 Strong liquidity at EUR 21.4 million* Goodwill impaired by EUR 60.0 million to EUR 12.2 million Equity ratio: 57.2% * incl. cash deposited overnight with associated companies 26

27 Consolidated cash flow in EUR mill. FY 2011 FY 2012 Cash flow from operating activities Net cash inflow from operating activities Cash flow from operating activities falls to EUR 3.3 million due to weaker operating business Cash flow from investing activities Cash flow from financing activities 0 0 Cash and cash equivalents at the end of the period : cash deposited overnight with associated companies EUR million, investments in servers and data warehouse 2011: cash received from disposal of companies EUR 12.2 million, investments in servers and data warehouse 27

28 1. Sedo Holding AG market and strategy - affilinet - Sedo 2. FY 2012 results 3. Outlook

29 Strategic outlook» Parking securing profitability» Trading growth in sales and earnings (EBT)» Sustainable growth in sales and earnings (EBT) Guidance 2013: - Sales + c. 10% - EBT between EUR 4.0 million and EUR 5.0 million 29