Contents Overview FY 2012 Highlights dotmailer dotsurvey dotagency Investment Strategy Summary 2
Overview 12m 2.5m 9.5m 3
Company Summary Established 1999 Top UK ESP - Over 5,000 Clients 171 staff Sales & Marketing 57 Development 30 SEO/Agency 43 Client Services 23 Admin/Finance/Directors 18 Number of new clients: 1,433 in FY11 & 1,813 in FY12 Market Cap c. 35m Offices in Croydon, London Bridge, Manchester, Edinburgh & Minsk 4
Significant Shareholders Ian Taylor 19.57 Simon Bird 16.65 Peter Simmonds 7.25 New Edge Group SA 11.00 BlackRock Inc. 10.93 Legal & General Group PLC 6.96 BlackRock Smaller Co. Trust PLC 3.7 % 5
6 Operational Highlights Continued investment in upgrading IT infrastructure and further significant product development dotmailer continues to be a significant source of revenue growth in the year with 1,684 new clients being added and increased corporate client wins dotsurvey the new online survey tool only launched in May now has over 500 paying clients and nearly 2,500 trial users Early results from international expansion are encouraging with the international sales team being progressively built over the next year Strengthening of the senior management team and the Board with the appointment of Frank Beechinor-Collins as Chairman and Richard Kellett-Clarke as non-executive director Announced today : Simone Barratt appointed as Non-Exec Director
Financial Highlights FY12 Strong Recurring Revenues 73% of total Cash Generative 4m Cash in Bank No Debt 25%* Increase in PBT 34% Increase in Turnover IFRS3 impact 3.5m EBITDA * Before exceptional items 7
Consolidated Income Statement 8
5 Year Trends 2008 2009 2010 2011 2012 Revenue 2.1m 4.8m 6.0m 9m 12m EBITDA 0.7m 1.1m 1.5m 2.6m 3.4m 583% Revenue Growth 520% EBITDA Growth 9
Successful Re-Classification Announced 25 September Reclassified as Software and Computer Services; sub sector Internet (formerly in Media) Reclassification reflects changes to business strategy - SaaS revenue via dotmailer now 66% of total revenue FTSE All Share P/E ratings for the Software sector is 16.1x against 12.2x for Media 10
Attractive Gross Margins dotmailer Fixed cost infrastructure Incremental costs very low Step costs at key volumes Sales & marketing covered by licence fees Gross margin on monthly sends in > 80% Managed service Projects 1k - 10k per month Target gross margin 60% Dev teams onshore Recurring/contracted revenues building dotsearch Highly efficient process Monthly recurring revenue Low cost offshore operations Gross margin >50% dotagency Projects 30k- 100k+ Target gross margin 35-50% Fixed price dev teams offshore Recurring revenues for support Managed service gross margins 50-60% 11
dotmailer suite 12 and personal goals
13
dotmailer Platform Evolution 14
Competitive Positioning 15 A consolidating sector with active M&A..
Organic Growth Strategy Segmented approach around three key strands: Low touch, credit card, self service SaaS products dotmailer express, dotsurvey, dotcommerce Direct & Corporate Sales self service SaaS products Mid large enterprises (UK centric but US & Australian Office opening Q3 2012) Channel Partner CRM vendors & Agencies (UK & Global) Examples: Salesforce.com, Microsoft Dynamics, Magento etc.. 16
Direct Sales to Corporate Clients Focus on Sales & marketing activity around high potential verticals Account management to developing existing client relationships Corporate clients Client growth potential Often start spending at 1k pm DHL our largest global corporate client - growth in revenues 2009 18k 2010 108k 2011 242k Land & expand 17
Some Clients 18
Low Dependence on Largest Clients 5 Largest Clients approx 5% of total revenue Top 20 clients less than 15% of total revenue Client base spread across many sectors Circa. 50% of dotmailer customers on direct debit with 14 day payment terms 19
dotmailer monthly volumes are growing rapidly 20
dotsurvey 21 and personal goals
2500 users 500 paying clients Size of the market and growth seen by SurveyMonkey $28m, $69m, $174m, $301m from 2008-2011 22
dotagency 23 and personal goals
dotagency provide digital solutions and search marketing services to large corporations and brands. dotagency take a strategic approach to UX, web development and digital marketing to achieve our clients commercial objectives. dotagency are Magento silver-certified partners who have proven creative, technical and project management skills. We deliver superior solutions on desktop machines, mobiles and tablets. Our relationship with dotmailer ensures we always adopt best practice when it comes to automated email marketing and triggered campaigns to help customer acquisition, retention and recommendation. Our approach to search marketing blends organic with paid and social marketing, to help our clients avoid dips in their traffic so their online business stays at peak performance. We help drive traffic to clients sites to maximise cross-selling and up-selling. Digital Strategy Search Marketing Creative Design Paid Search Ecommerce and CMS Social Media 24
Growth 25 and personal goals
Core Growth Focus 2012/2013 Further enhancements to dotmailer platform Marketing Automation Connectivity to CRM and other business platforms International development Expansion of corporate sales Expand our global footprint VP Sales US starts Monday 15 th October Increase the proportion of contractual recurring revenue 26
Contractual Recurring Revenues Based on investor feedback Goal is to increase the contracted element of recurring revenue Steps taken Review of pricing and discounts for 12 to 48 month agreements Incentives for existing clients to convert to longer term contracts Complete overhaul of sales team remuneration structure Change in key KPI s for senior management sales team Impact March 2012 contracted revenues of 51% of dotmailer monthly billing July 2012 contracted revenues of 58% of dotmailer monthly billing In Q1 2012/13 68% of new sales have been contracted recurring revenue with an average contract length of 19 months 27
Summary 28 and personal goals
Summary of Current Position High growth profitable business in high growth market sectors - cash generative Significant opportunities for organic growth Opportunities for international expansion into US Opportunities for acquisitions & joint ventures Young, energetic team with passion for growth 2011-12 has been a year of product investment and 34% growth 2012-13 will be a year of investment in marketing, overseas growth and consolidation of product dominance 29