Full Year Report 2005 26 January 2006
Important Notice This Presentation has been produced by TradeDoubler AB (the Company ) and is furnished to you solely for your information. This document contains certain forward-looking statements relating to the business, financial performance and results of the Company and the industry in which it operates. These statements are based on the Company s current plans, estimates and projections, as well as its expectations of external conditions and events. In particular the words expect, anticipate, estimate, may, should, believe and similar expressions are intended to identify forwardlooking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These include, but are not limited to: the level of consumer acceptance of existing and new and upgraded products and services; the growth of overall market demand for the Company s products or for personal navigation products generally; the Company s ability to sustain and effectively manage its recent rapid growth; and the Company s relationship with third party suppliers, and its ability to accurately forecast the volume and timing of sales. Additional factors could cause future results to differ materially from those in the forward-looking statements. No representation or warranty (express or implied) is made as to, and reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the Company nor any of its subsidiary undertakings or any officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. You will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the company s business. This document does not constitute or form part of, and should not be constructed as, an offer or invitation to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis of, or be relied on in connection, with any offer or commitment whatsoever. This Presentation speaks as of 31 December 2005. You should be aware that the Presentation has not been updated to reflect any changes to the affairs of the Company since that date. 2
Agenda Topic Speaker 1) Business Highlights Martin Henricson (CEO) 2) Q4 and FY 2005 Financial Results Owe Wedebrand (CFO) 3) Outlook Martin Henricson (CEO) 4) Questions & Answers 3
Business Highlights 4
Financial Highlights Q4 2005 Revenues of SEK 342m up from SEK 194m in Q4 2004, an increase of 76% Gross profit amounted to SEK 97m compared to SEK 60m last year, up 63% Operating profit totaled SEK 36m compared to SEK 21m in the previous year, an increase of 71% During the period, non-recurring expenses relating to preparations for the stock exchange listing of the company were charged against earnings amounting to SEK 5.8m. Share-based expenses had a positive contribution during the period of SEK 2.3m (vs. negative of SEK 2.7m in Q4 2004) Adjusted operating profit (excluding costs above) was SEK 40m vs. SEK 24m in Q4 2004, up 70% 5
Business Highlights Q4 2005 Strong underlying market growth Across geographic regions Continued growth in number of publishers and advertisers Ongoing development of functionality of service offerings Increased diversification of client base Strong revenue, gross profit and operating profit growth In line with expected seasonal pattern All time high adjusted operating profit margin relative to gross profit Stable transaction margin 6
Financial Highlights Full Year 2005 Revenues increased by 82% to SEK 1,085m compared with SEK 598m in 2004 Gross profit amounted to SEK 314m, compared with SEK 188m for preceding year, corresponding to an increase of 67% Operating profit totaled to SEK 44m, compared with SEK 56 for the preceding year During the year, expenses relating to the stock exchange listing amounted to SEK 53.6m. Share-based compensation expenses during the year totaled SEK 23.4m (SEK 7.9m in 2004) Adjusted operating profit (excluding costs above) was SEK 121m compared to SEK 63m in 2004, an increase of 90% 7
Geographic breakdown of revenue Revenue by region SEK million 600 500 400 300 200 100 0 500 308 190 161 131 112 64 72 67 85 46 57 27 24 34 23 25 8 14 17 UK France Germany Rest of Sweden Europe excl. the Nordic region 2002 2003 2004 2005 55 13 19 29 Rest of Nordic region Broad European revenue base with growth prospects across all markets Continued market leadership in the UK market, the largest e- commerce market in Europe Market leader in France, Italy, Spain and Sweden based on company estimates Healthy growth in smaller, emerging, markets 8
Growth of advertising clients and active publishers Growth in number of advertising clients Growth in number of active publishers 1 000 100 000 900 800 Quarterly CAGR: 9.5% 90 000 Yearly CAGR: 43.6% 80 000 Quarterly CAGR: 6.4% Yearly CAGR: 27.9% 700 70 000 600 60 000 500 50 000 400 40 000 300 30 000 200 20 000 100 10 000 0 0 9 Q4 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q4 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Note: Active publisher defined as publisher having generated > 1 transaction during last month
Q4 and FY 2005 Financial Results 10
Financial Highlights SEK million 2004 2005 Revenue 597.7 1,085.0 % Growth 130.2% 82.0% Gross profit 1 188.5 314.5 Gross Margin 31.5% 29.0% Operating Profit (adjusted) 63.4 121.0 OP margin (adjusted) 10.6% 11.2% OP (adjusted) as % of 33.6% 38.5% Gross profit Net profit 62.3 38.9 Adjustments: Year ended 31 Dec Costs relating to IPO preparations 53.6 Q4 2004 2005 194.1 341.9 NA 76.2% 59.6 97.1 30.7% 28.4% 23.7 39.5 12.2% 11.6% 39.8% 40.7% 39.8 38.4 5.8 Warrant costs/(income) recognised under IFRS 7.9 23.4 ¹ Revenue less publisher compensation 11 2.7 (2.3)
Continued track record of growth and profitability Quarterly revenue Quarterly Gross Profit Quarterly Adjusted OP¹ 400 350 300 250 200 150 100 50 341.9 256.7 277.2 194.1 209.3 153.9 118.2 131.5 50 45 40 35 30 25 20 15 10 5 32.1 26.8 23.7 22.6 15.0 12.2 12.3 SEK million 0 0 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 12 39.5 SEK million 120 100 80 60 40 20 97.1 79.3 74.0 64.1 59.6 46.5 44.4 38.1 SEK million 0 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 ¹Excluding share-based compensation and IPO related costs
Margin Analysis 60% Adjusted OP/Gross Profit¹ Transcation Margin SEK million 40% 32.1% 27.8% 32.3% 39.8% 35.3% 36.2% 40.5% 40.7% 20% 22.6% 24.8% 21.4% 22.5% 22.5% 21.5% 22.0% 22.5% 0% Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 ¹Excluding share-based compensation and IPO related costs 13
Full Year Cash Flow Consolidated Cash Flow (SEK million) 2005 2004 2004 Cash Flows From Operating Activities Before Changes in Working Capital 71,752 59,334 Changes in Working Capital (29,912) 31,876 Cash Flow From Operating Activities 41,840 91,210 Cash Flow from Investment Activities (7,218) (5,579) Financing Activities 48,211 0 Cash Flow for the Period 82,833 85,631 14
Balance Sheet Balance Sheet (SEK million) 31-Dec-2005 2005 30-Sep-2005 31-Dec-2004 2004 Total Fixed Assets 18,365 25,162 21,243 Total Current Assets Total Assets Shareholders Equity Long-term Liabilities Current Liabilities Total Shareholders Equity and 515,441 533,806 188,562 9,000 336,244 417,199 442,361 103,759 25,466 313,136 281,361 302,604 93,488 4,102 205,014 Liabilities 533,806 442,361 302,604 Cash Position 218,348 207,297 128,589 15
Outlook 16
2006 Operating Priorities Add to the depth and breadth of our publisher network Continue to build long-term strategic relationships with key advertisers Introduction of new functions and features Expand our international presence Recruit the right people 17
Financial Outlook 2006 Strong revenue growth at least in line with growth of the e-commerce market Improved operating profit margin Positive working capital contribution Strong cash generation 18