Quarterly Report • May 18, 2010
Quarterly Report
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Unaudited condensed interim consolidated financial report as of 31 March 2010
| Q1 / 2010 kEUR |
Q1 / 2009 kEUR |
Change Percent |
|
|---|---|---|---|
| Net sales | 11,995 | 11,619 | +3.2 |
| Gross margin | 5,291 | 5,223 | +1.3 |
| EBIT | 17 | -1,209 | >100 |
| Net income for the period |
419 | -878 | >100 |
| Earnings per share in EUR (basic) |
0.02 | -0.04 | >100 |
| 31-03-10 kEUR |
31-03-09 kEUR |
Change Percent |
|
|---|---|---|---|
| Liquid funds* | 22,677 | 21,575 | +5.1 |
| Equity | 22,339 | 54,048 | -58.7 |
| Total assets | 32,400 | 63,233 | -48.9 |
| Employees | 242 | 258 | -6.2 |
* including security holdings at fair value and deposits with a maturity of more than three months
| Important events | 6 |
|---|---|
| Basic economic conditions | 8 |
| The share | 12 |
| Result of operations, financial position and net assets | 14 |
| Report on opportunities and risks | 18 |
| Forecast report | 18 |
| Consolidated income statement | 20 |
|---|---|
| Consolidated statements of income and expense | |
| recognized in equity | 22 |
| Consolidated balance sheet | 24 |
| Consolidated statement of cash flows | 28 |
| Consolidated changes in equity | 32 |
| Notes | 36 |
| Company calendar | 50 |
|---|---|
| Contact/Publisher's notes | 50 |
In the first quarter of the year, ad pepper media was already able to improve all profitability ratios considerably and was back in the black on EBITDA, EBT and EBIT level. This positive development was largely due to the strong focus on performance-based advertising combined with a cost basis that has been reduced considerably compared to the previous year. On a comparable basis, sales were up by 6.9 percent. This growth was largely driven by the Webgains and ad agents segments which were up 26.6 percent and 31.7 percent, respectively, against the previous year.
After ad agents took over affiliate management of the multi-channel mail-order company in October 2009, co-operation has now been expanded on the basis of the convincing results to include search engine marketing. The optimum placement of neckermann.at in search engines, taking targets, daily products and offers into consideration, is designed to boost online shop sales. By winning neckermann.at, ad agents has been able to win one of the leading e-commerce companies on the Austrian market.
Neo@Ogilvy has selected Webgains in the UK as the preferred affiliate network for its customer Kodak Gallery. Exclusive co-operation will also be carried out in another five European countries. Kodak Gallery will terminate all existing affiliate programs with other affiliate networks in Europe and will co-operate in the UK with just one other network in addition to Webgains. The programs will be offered in the UK, Germany, France, the Netherlands, as well as in Spain and Italy. The programs will be centrally steered by Webgains in London and managed by account managers in the national offices of the respective markets.
The global economy and hence Germany too are once again set for growth since the second quarter of 2009. However, the dynamism and stability of this growth is still weak.
Nevertheless the International Monetary Fund (IMF) has raised its forecast for global economic growth significantly. The organization is now expecting a plus of 3.9 percent for 2010. This is after its initial forecast of 3.1 percent IMF economists expect growth in Germany to increase to 1.5 percent compared to 0.3 percent.
For the euro zone, they expect to see growth of 1.0 percent compared to 0.3 percent. They have forecast growth of 2.7 percent for the United States. Their original estimate had been 1.5 percent.
In the first quarter of 2010, companies in Germany invested considerably more in advertising than in the previous year. This is the result of the latest advertising statistics from Nielsen Media Research. Of the media with the highest growth, the Internet came out on top; the volume of advertising here rose by 17.1 percent compared to the first quarter of 2009. A completely different picture was found for print and radio where advertising revenues remained on the same level or declined compared to the previous year.
According to the study, the boom of the Internet as a means of advertising has continued despite the consequences of the economic crisis. The experts found that the Internet advertising boom was still being supported by the recession because it is at times like this that precise ROI measurability and flexibility on the part of advertisers are demanded. But even if Internet advertising comes out of the global economic crisis stronger than before, the negative impacts of this crisis are still being felt on the online advertising market. It is, for instance, unlikely that we will see the high growth rates of recent years in 2010. According to Online-Vermarkterkreis OVK, the strongest pillars in online marketing are search engine marketing and affiliate marketing.
The ad pepper media group is one of the leading independent marketing networks in online advertising.
ad pepper media International N.V. with its headquarters in Amsterdam, the Netherlands, is the central management and holding company for the companies of the ad pepper media group. With 16 branches in eight European countries and the US, ad pepper media conducts campaigns for thousands of national and international advertising customers in more than 50 countries world-wide. We are active on the online advertising market with three business divisions: ad pepper media, Webgains and ad agents.
ad pepper media offers a full range of products for successful display, performance and email marketing, as well as ad serving. The major products are iLead, Click Generation, mailpepper, iSense and Emediate.
iLead is the ideal partner for advertisers who want to implement successful measures in dialogue and direct marketing. The focus here is on obtaining addresses to win new customers through a success-based cost-per-lead price model.
Click Generation is ad pepper media's success-based traffic-generating marketing solution that supplies advertisers in an efficient and measurable manner with qualified Internet users according to the cost-per-click price model.
mailpepper enables advertisers to achieve large ranges quickly and effectively through email or even to send advertising messages to specific target groups without significant dispersion losses.
iSense equips advertisers and publishers with a revolutionary semantic advertising technology which they can use to place advertising on a relevance basis and targeted for each website. iSense is centered around the patented Sense Engine™ technology and is the result of ten years of research and development.
This technology was developed by Dr. David Crystal, one of the world's leading linguistics experts.
Emediate primarily provides ad serving technology solutions and services. Emediate is the market leader in Scandinavia and one of the few remaining players in the market with independent und powerful ad serving.
Our Webgains affiliate network is one of the platforms in this market segment with the most dynamic development and is represented by offices in the UK, France, Germany, the Netherlands, the US, Spain, Sweden and Denmark. Maximum range combined with successbased payment makes affiliate marketing very attractive for all participants. Using Webgains as the technology platform, advertisers (merchants) make advertising formats (banners, text links, etc.) available on the websites of website operators (affiliates). These formats can be used to advertise the merchants' products and services and, when successful, result in a purchase, subscription or similar transaction. This means that in a strict sense Webgains is an e-commerce platform and, in our opinion, one of the most efficient on the market.
Not only is the technical platform persistently upgraded, in line with customer demands, we also offer a service portfolio that is considered to be exemplary throughout the industry.
ad agents specializes in search-engine marketing (SEM), search-engine optimization (SEO) and performance marketing. ad agents advises wellknown companies from mail order business, the travel industry and many other sectors. There is one thing which all these customers have in common: They already have a mature e-commerce strategy in which they offer their goods and/or services via their websites or web shops. ad agents helps its customers to make their web presence even more efficient as a selling instrument.
This is achieved by improving range in combination with the best possible increase in advertising effectiveness.
The ad agents strategies, which are based on quality and security, offer customers sustainability in terms of clicks and sales, along with detailed reporting.
ad pepper media holds a 60 percent share in ad agents.
The ad pepper media share price has developed well since the beginning of the year. On 31 March, the share closed at EUR 1.38 and was hence around 17 percent higher than at the end of December 2009 (share price on 31 December 2009: EUR 1.18).
Over the past twelve months, the share price increased in fact by 58.6 percent. After the end of the period under review, the share price continued its dynamic development, reaching EUR 1.80 until the copy deadline for this report.
| Share facts | |
|---|---|
| Security Identification Number | 940883 |
| ISIN | NL0000238145 |
| Market segment | Prime Standard |
| Designated Sponsor | Equinet |
| Number of shares | 23,000,000 |
| Market capitalization (as per 31 March 2010) |
EUR 31.7m |
April May June July August September October November December January February March
On 8 March 2010, we were informed of a transaction of Amiral Gestion S.A. which had to be reported pursuant to the Dutch WFT. According to this information, its voting shares in ad pepper media fell below the threshold of 5 percent of voting shares and now total 4.90 percent (corresponding to 1,126,517 voting rights).
On 15 April 2010, we were notified that Amiral Gestion S.A. had reduced its voting shares in ad pepper media International N.V. to 0 percent (corresponding to 0 voting rights).
Due to the exercise of employee stock options, the number of own shares declined slightly in the first quarter of 2010 compared to 31 December 2009 to 2,073,792; this corresponds to a share of 9.02 percent of capital stock (31 December 2009: 2,267,792).
Date of report: 31 March 2010
| Shareholder | No. of shares | Percent of capital stock |
|---|---|---|
| EMA B.V. | 9,486,402 | 41.25 |
| Eigene Anteile | 2,073,792 | 9.02 |
| Amiral Gestion S.A. | 1,126,517 | 4.90 |
| U. Schmidt | 1,005,524 | 4.37 |
| Grabacap ApS | 848,000 | 3.69 |
| Euroserve Media GmbH | 306,132 | 1.33 |
| M. A. Carton | 332,178 | 1.44 |
| Viva Media Service GmbH | 71,300 | 0.31 |
| Sub-total | 15,249,845 | 66.31 |
| Freefloat | 7,750,155 | 33.69 |
In the first three months, sales of ad pepper media increased to kEUR 11,995 (Q1 2009: kEUR 11,619) corresponding to an increase of 3.2 percent against the same period of the previous year. On a comparable basis, i.e. taking the activities of ad pepper media Italy srl. into account which have now been discontinued, growth in fact totaled 6.9 percent. The main driving force behind this positive development was the Webgains segment which was up 26.6 percent from kEUR 2,836 to kEUR 3,591.
The ad agents segment also faired very well, with sales up here by 31.7 percent to a total of kEUR 1,843 (Q1 2009: kEUR 1,399). Many new customers have been won, especially from the travel and insurance industry, and it can be assumed that ad agents will also provide a positive impetus in the coming quarters. The ad pepper media segment remained below expectations. Sales declined here by 11 percent or by kEUR 816, falling from kEUR 7,374 to kEUR 6,558. The greater part of this decline in sales in this segment, i.e. kEUR 648, was recorded in Denmark. On a comparable basis – i.e. taking the activities discontinued in Italy into consideration – the decline in sales for the ad pepper media segment was only 6.0 percent.
The gross margin (in percent) of the ad pepper group totaled 44.1 percent, thus remaining at the same high level as the previous year (Q1 2009: 44.9 percent). In absolute figures, this means a slight increase of kEUR 68 to kEUR 5,291 (Q1 2009: kEUR 5,223). On a comparable basis, the increase in the gross margin totaled kEUR 261 or 5.2 percent.
Operative costs fell significantly in the first three months of the current year against the same period of the previous year from kEUR 6,432 to kEUR 5,274. This reflects both lower personnel expenditure, especially in conjunction with the discontinuation of activities by ad pepper media Italy srl., and lower depreciation compared to the previous year on intangible assets resulting from the purchasing price allocations (PPA). Personnel costs declined accordingly by kEUR 453 to kEUR 4,339; deprecation and amortization expenses fell by kEUR 435 to kEUR 186 (in each case compared to the same period of the previous year).
Earnings before interest, taxes, deprecation and amortization (EBITDA) totaled kEUR 203 (Q1 2009: kEUR -588). EBIT was also slightly positive, totalling kEUR 17 after kEUR -1,209 in the same period of the previous year. Due to the excellent financial result of kEUR 403, EBT also rose significantly. While EBT in the first quarter of 2009 was still negative at kEUR -903, kEUR 420 was recorded in the period under review. Profit for the period was also positive and totaled kEUR 419 (Q1 2009: kEUR -878). This means that all major profitability figures are positive.
Operative cash flow totaled kEUR -693 after kEUR -1,126 in the first three months of the previous year. Net cash flow from investment activities from January to March 2010 totaled kEUR 1,354 (Q1 2009: kEUR 287). In the first three months of 2010, cash flow from financing activities totaled kEUR 185 following kEUR -92 during the same period of the previous year.
The balance sheet total changed only insignificantly compared to the end of 2009, falling slightly by kEUR 404 to kEUR 32,400 (31 December 2009: kEUR 32,804). At the same time, equity rose by kEUR 1,001 to kEUR 22,339. The equity ratio as per 31 March 2010 hence totaled an excellent 69 percent (31 December 2009: 65 percent).
As per the balance-sheet date, the ad pepper media group is financed from its own resources. As per the end of March 2010, liquid funds, including securities at fair value and time deposits with a maturity of more than three months, totaled kEUR 22,677 (31 December 2009: TEUR 22,602). There are no long-term liabilities to banks.
As per 31 March 2010, the ad pepper media group employed a staff of 242. At the end of the same period of 2009, the company employed a total workforce of 258. The employees of the ad pepper media group were assigned to the following segments:
| 31 March 2010 Number |
31 March 2009 Number |
|
|---|---|---|
| ad pepper media | 130 | 158 |
| Webgains | 60 | 56 |
| ad agents | 17 | 12 |
| Administration | 35 | 32 |
Compared to the Consolidated Annual Accounts as per 31 December 2009, there have been no significant changes in the opportunity and risk situation of ad pepper media International N.V. We therefore refer to the presentation in the Management Report for fiscal 2009.
Macroeconomic conditions improved slightly at the beginning of 2010 with some regional differences.
The outlook for the development of the online advertising market is hence slightly positive – at least in the short term. The fact that the number of Internet users continues to increase is good for the online advertising market. Higher data rates increase the attractiveness of the Internet as a medium for advertisers even further. Furthermore, online advertising will continue to benefit from the strong trend towards measurability of advertising success, so that the online advertising market may become less dependent – at least partially – on economic cycles.
The first quarter proved that ad pepper media with its clear focus on performance marketing is in an excellent position and has done its homework to keep cost developments at bay. This was impressively demonstrated by the break even achieved in the first quarter which is traditionally not the strongest period of the year. Despite the remaining macroeconomic risks, we are still optimistic about the coming quarter. The goal is to break even on EBITDA level for the entire year 2010.
| Q1 / 2010 Q1 / 2009 kEUR kEUR Revenues 11,995 11,619 Cost of sales -6,704 -6,396 Gross profit 5,291 5,223 Selling and marketing expenses -3,731 -4,075 General and administrative expenses -1,957 -2,583 Other operating income 520 575 Other operating expenses -106 -349 Earnings before interest and taxes 17 -1,209 Financial income 462 319 Financial expenses -59 -13 Earnings before taxes 420 -903 Income taxes -1 25 Net income 419 -878 attributable to shareholders of the parent company 341 -885 attributable to minority interest 78 7 Basic earnings per share on net income for the year attributable to shareholders of the parent company 0.02 -0.04 Diluted earnings per share on net income for the year attributable to shareholders of the parent company 0.02 -0.04 Q1 / 2010 Q1 / 2009 Number of shares Number of shares Weighted average number of shares outstanding (basic) 21,414,991 21,927,234 Weighted average number of shares outstanding (diluted) 21,729,647 21,931,482 |
||
|---|---|---|
* Previous year adjusted for share-split of 1 to 2 on 27 May 2009
| Q1 / 2010 | Q1 / 2009 | |
|---|---|---|
| kEUR | kEUR | |
| Net income | 419 | -878 |
| Currency translation diffe rences |
-53 | -115 |
| Revaluation of available-for sale financial assets |
420 | -588 |
| Income tax recognized directly in equity |
0 | 0 |
| Total income and expense reco gnized directly in equity, net of tax |
367 | -703 |
| Total income and expense recognized in equity |
786 | -1,581 |
| attributable to minority interest | 78 | 7 |
| attributable to shareholders of ad pepper media International N.V. |
708 | -1,588 |
The total income and expense recognized directly in equity and the corresponding income taxes are as follows:
| Q1 / 2010 kEUR |
before income taxes |
income taxes |
after income taxes |
|---|---|---|---|
| Currency translation differences (incl. minority interest) |
-53 | 0 | -53 |
| Revaluation of available-for-sale financial assets |
420 | 0 | 420 |
| Total income and expense reco gnized directly in equity |
367 | 0 | 367 |
| Q1 / 2009 kEUR |
before income taxes |
income taxes |
after income taxes |
|---|---|---|---|
| Currency translation differences (incl. minority interest) |
-115 | 0 | -115 |
| Revaluation of available-for-sale financial assets |
-588 | 0 | -588 |
| Total income and expense reco gnized directly in equity |
-703 | 0 | -703 |
| Assets | 31 March 2010 | 31 December 2009 |
|---|---|---|
| kEUR | kEUR | |
| Non-current assets | ||
| Goodwill | 24 | 24 |
| Intangible assets | 724 | 816 |
| Property, plant and equipment | 511 | 563 |
| Securities at fair value through profit and loss | 2,686 | 3,265 |
| Securities available-for-sale | 4,284 | 4,423 |
| Other financial assets | 715 | 727 |
| Deferred tax assets | 308 | 308 |
| Total non-current assets | 9,252 | 10,126 |
| Current assets | ||
| Securities and deposits with maturity over three months | 1,400 | 1,400 |
| Trade receivables | 5,862 | 6,390 |
| Income tax receivables | 704 | 607 |
| Prepaid expenses and other current assets | 567 | 463 |
| Other financial assets | 308 | 304 |
| Cash and cash equivalents | 14,307 | 13,514 |
| Total current assets | 23,148 | 22,678 |
| Total assets | 32,400 | 32,804 |
| Equity and liabilities | 31 March 2010 | 31 December 2009 |
|---|---|---|
| kEUR | kEUR | |
| Equity attributable to shareholders of the parent company | ||
| Issued capital* | 1,150 | 1,150 |
| Additional paid-in capital | 67,144 | 67,102 |
| Treasury shares | -3,237 | -3,410 |
| Accumulated deficit | -39,735 | -40,076 |
| Accumulated other comprehensive losses | -3,166 | -3,533 |
| Total | 22,156 | 21,233 |
| Minority interest | 183 | 105 |
| Total equity | 22,339 | 21,338 |
| Non-current liabilities | ||
| Deferred tax liabilities | 21 | 21 |
| Total non-current liabilities | 21 | 21 |
| Current liabilities | ||
| Trade payables | 5,457 | 6,619 |
| Other current liabilities | 740 | 749 |
| Other financial liabilities | 3,459 | 3,693 |
| Income tax liabilities | 384 | 384 |
| Total current liabilities | 10,040 | 11,445 |
| Total liabilities | 10,061 | 11,466 |
| Total equity and liabilities | 32,400 | 32,804 |
* The Issued Capital consists of shares with a nominal value of EUR 0.05 each. The authorized capital amounts 23,429,708 shares, of which 23,000,000 are issued and 20,926,708 shares were floating at 31 March 2010 (31 December 2009: 20,732,708).
| Q1 / 2010 | Q1 / 2009 | |
|---|---|---|
| kEUR | kEUR | |
| Net income | 419 | -878 |
| Adjustments to reconcile net income for the year to net cash flow used in/provided by operating activities: |
||
| Depreciation and amortisation | 186 | 621 |
| Gain/loss on sale of fixed assets | 4 | 0 |
| Share-based compensation | 42 | 58 |
| Gain/loss on sale of securities | -216 | -19 |
| Other financial income and financial expenses | -187 | -287 |
| Income taxes | 1 | -25 |
| Other non-cash expenses and income | -127 | 23 |
| Gross cash flow | 122 | -507 |
| Change in trade receivables | 655 | 1,950 |
| Change in other assets | -123 | -536 |
| Change in trade payables | -1,162 | -1,607 |
| Change in other liabilities | -243 | -561 |
| Income taxes received | 0 | 0 |
| Income taxes paid | -98 | -140 |
| Interest received | 156 | 275 |
| Interest paid | 0 | 0 |
| Net cash flow from operating activities | -693 | -1,126 |
| Q1 / 2010 | Q1 / 2009 | |
|---|---|---|
| kEUR | kEUR | |
| Additions to intangible assets and property, plant and equipment | -49 | -122 |
| Proceeds from sale of intangible assets and property, plant and equipment | 3 | 0 |
| Proceeds from sale of shares in associates and other investments | 0 | 1,200 |
| Loans granted | 0 | -751 |
| Proceeds from sale/maturity of securities and maturity of fixed-term deposits | 2,387 | 5,119 |
| Purchase of securities | -987 | -5,159 |
| Net cash flow from investing activities | 1,354 | 287 |
| Sale of treasury shares | 173 | 0 |
| Purchase of treasury shares | 0 | -104 |
| Repayment of loans granted | 12 | 12 |
| Net cash flow from financing activities | 185 | -92 |
| Effect of exchange rates on cash and cash equivalents | -53 | 0 |
| Cash-effective decrease/increase in cash and cash equivalents | 846 | -931 |
| Cash and cash equivalents at beginning of financial year | 13,514 | 5,833 |
| Cash and cash equivalents at end of period | 14,307 | 4,902 |
| Balance at 01-01-09 |
Total in come and expense reco gnized in equity |
Share based payment |
Purchase of treasury shares |
Issuance of shares |
Balance at 31-03-09 |
|
|---|---|---|---|---|---|---|
| Issued capital | ||||||
| Number of shares | 22,789,708 | 22,789,708 | ||||
| Issued capital (kEUR) | 1,139 | 1,139 | ||||
| Additional paid-in capital | ||||||
| for employee stock option plans (kEUR) | 2,080 | 58 | 2,138 | |||
| from contributions of shareholders of ad pepper media International N.V. (kEUR) | 64,667 | 64,667 | ||||
| Treasury shares | ||||||
| Number of shares | 765,026 | 131,774 | 896,800 | |||
| Treasury shares at cost (kEUR) | -1,732 | -104 | -1,836 | |||
| Accumulated deficit (kEUR) | -5,769 | -885 | -6,654 | |||
| Accumulated other comprehensive losses | ||||||
| Currency translation differences (kEUR) | -1,477 | -115 | -1,592 | |||
| Revaluation available-for-sales securities (kEUR) | -3,353 | -588 | -3,941 | |||
| Equity attributable to shareholders of ad pepper media International N.V. (kEUR) | 55,555 | -1,588 | 58 | -104 | 0 | 53,921 |
| Minority interest (kEUR) | 120 | 7 | 127 | |||
| Total equity (kEUR) | 55,675 | -1,581 | 58 | -104 | 0 | 54,048 |
| Balance at 01-01-10 |
Total income and expense recog nized in equity |
Share-based payment |
Purchase of treasury shares |
Issuance of shares |
Balance at 31-03-10 |
|
|---|---|---|---|---|---|---|
| Issued capital | ||||||
| Number of shares | 23,000,000 | 23,000,000 | ||||
| Issued capital (kEUR) | 1,150 | 1,150 | ||||
| Additional paid-in capital | ||||||
| for employee stock option plans (kEUR) | 2,259 | 42 | 2,301 | |||
| from contributions of shareholders of ad pepper media International N.V. (kEUR) |
64,843 | 64,843 | ||||
| Treasury shares | ||||||
| Number of shares | 2,267,792 | -194,000 | 2,073,792 | |||
| Treasury shares at cost (kEUR) | -3,410 | 173 | -3,237 | |||
| Accumulated deficit (kEUR) | -40,076 | 341 | -39,735 | |||
| Accumulated other comprehensive losses | ||||||
| Currency translation differences (kEUR) | -1,369 | -53 | -1,422 | |||
| Revaluation available-for-sales securities (kEUR) | -2,164 | 420 | -1,744 | |||
| Equity attributable to shareholders of ad pepper media International N.V. (kEUR) |
21,233 | 708 | 42 | 0 | 173 | 22,156 |
| Minority interest (kEUR) | 105 | 78 | 183 | |||
| Total equity (kEUR) | 21,338 | 786 | 42 | 0 | 173 | 22,339 |
The current condensed interim consolidated financial statements of ad pepper media International N.V. were prepared according to the provisions of the International Financial Reporting Standards (IFRS) as applicable on the closing date, and are presented in euro. The comparative figures from the previous year were determined according to the same principles and adjusted where necessary. The quarter-end financial statements meet the requirements of IAS 34.
The condensed consolidated interim financial statements do not include all of the information required for the full annual financial statements and should therefore be read in conjunction with the consolidated annual report for the year ended 31 December 2009.
The consolidated interim financial statements include all subsidiaries. Compared to the consolidated financial statements as per 31 December 2009, no changes took place in the consolidated group: Emediate ApS and Pentamind A/S merged with effect as of 1 January 2010.
The consolidated interim financial statements as per 31 March 2010 were authorized for issue by the management board on 26 April 2010.
The accounting principles applied to these quarter-end financial statements do not materially differ from the principles as applied for the Annual Report as per 31 December 2009.
The following standards and interpretations have been adopted since then within the scope of the comitology procedure:
In the Official Journal of the European Union of 24 March 2010 (53rd year, L 77), Commission Regulation (EU) No. 243/2010 for the adoption of the annual "Improvements to IFRSs" published in April 2009 by the IASB was published and entered into force on the third day following that of its publication in the Official Journal of the European Union.
The "Improvements to IFRSs" aim to streamline and clarify the international accounting standards. The majority of amendments are clarifications or corrections of existing IFRSs or amendments consequential to changes previously made to IFRSs. Amendments to IFRS 8, IAS 17, IAS 36 and IAS 39 involve changes to the existing requirements or additional guidance on the implementation of those requirements. Companies are required to apply the "Improvements to IFRSs 2007-2009", at the latest, as from the commencement of their first financial year starting after 31 December 2009.
The improvement to IFRS 8 means that in this and in future statements, ad pepper media will not provide any details concerning segment assets because segments assets are not regularly reported to the company's chief operating decision makers.
In the Official Journal of the European Union of 24 March 2010 (53rd year, L 77), Commission Regulation (EU) No. 244/2010 for the adoption of the amendments to IFRS 2 "Share-based payment" published on 18 June 2009 by the IASB was announced and entered into force on the third day following that of its publication in the Official Journal of the European Union. The amendment clarifies the balance-sheet method for sharebased payment where a supplier of goods or services is paid in cash and another company of the group is obliged to settle in cash (cash-settled share-based payments by a group company). The amendments to IFRS 2 must be applied, at the latest, as from the commencement of the first financial year starting after 31 December 2009.
This has no effect on the consolidated accounts of ad pepper media.
Essentially we refer the explanations regarding results of operations, financial position and net assets in the Interim Directors' Report. The following one-off items affecting the income statement occurred in the period under review:
The financial result includes net exchange gains from the sale of securities totaling kEUR 216 (Q1 2009: kEUR 19).
IFRS 8 supersedes IAS 14 "Segment reporting" and converges the standards of the IASB with the requirements of the Statement of Financial Accounting Standards (SFAS) 131. IFRS 8 requires an entity to report financial and descriptive information about its so-called "reportable segments".
Reportable segments are either operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity, about which separate financial information is available, that is evaluated regularly by the chief operating decision maker for the purpose of resource allocation and assessing performance. Generally, financial information is required to be reported on the same basis as is used internally to evaluate the operating segments (management approach). The information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance is focused on the category of services delivered. For this reason, the group reports segment information for the operating segments of "ad pepper media" (lead, mail, banner, ad serving), "Webgains" (affiliate marketing) and "ad agents" (SEM/SEO) and for the non-operating "Admin" (administration) segment. The accounting policies of the reportable segments corresponds to the group's accounting policies described in note [2]. The segment result represents the EBIT and EBITDA for each segment without differences to IFRS. The segment result thus calculated is reported to the chief operating decision maker for the purpose of resource allocation and assessing segment performance. The "dealing at arm's length" principle forms the basis of accounting for inter-segment transactions.
| Q1 / 2010 | ad pepper media kEUR |
Webgains kEUR |
ad agents kEUR |
Admin kEUR |
Consoli dation kEUR |
Group kEUR |
|---|---|---|---|---|---|---|
| Total revenues | 6,636 | 3,665 | 1,843 | 324 | -473 | 11,995 |
| thereof external | 6,558 | 3,591 | 1,843 | 3 | 0 | 11,995 |
| thereof intersegmental | 78 | 74 | 0 | 321 | -473 | 0 |
| Expenses and other income | -6,256 | -3,663 | -1,648 | -731 | 320 | -11,978 |
| thereof amortization and depreciation | -77 | -5 | -4 | -100 | 0 | -186 |
| thereof other non-cash expenses | -119 | -25 | 0 | -101 | 0 | -245 |
| EBIT | 380 | 2 | 195 | -407 | -153 | 17 |
| Financial income | 4 | 0 | 1 | 478 | -21 | 462 |
| Financial expenses | -21 | -1 | 0 | -58 | 21 | -59 |
| Income taxes | -1 | |||||
| Net income for the period | 419 | |||||
| Q1 / 2009 | ad pepper media kEUR |
Webgains kEUR |
ad agents kEUR |
Admin kEUR |
Consoli dation kEUR |
Group kEUR |
|---|---|---|---|---|---|---|
| Total revenues | 7,511 | 2,983 | 1,410 | 471 | -756 | 11,619 |
| thereof external | 7,374 | 2,836 | 1,399 | 10 | 0 | 11,619 |
| thereof intersegmental | 137 | 147 | 11 | 461 | -756 | 0 |
| Expenses and other income | -7,807 | -2,961 | -1,393 | -1,140 | 473 | -12,828 |
| thereof amortization and depreciation | -264 | -84 | -7 | -266 | 0 | -621 |
| thereof other non-cash expenses | -108 | -40 | 4 | -62 | 0 | -205 |
| EBITDA | -32 | 106 | 24 | -403 | -283 | -588 |
| EBIT | -296 | 22 | 17 | -669 | -283 | -1,209 |
| Financial income | 32 | 0 | 2 | 353 | -68 | 319 |
| Financial expenses | -66 | -3 | 0 | -12 | 68 | -13 |
| Income taxes | 25 | |||||
| Net income for the period | -878 | |||||
The group operates in four principal geographical areas – the Netherlands (country of domicile), Germany, Scandinavia and the United Kingdom. The group's revenue from the continued operations of the group from business with external customers and information about the segments' assets are detailed below according to geographical location whereby the long-term assets do not include financial instruments or deferred tax assets:
| Revenue from external customers | Non-current assets | |||
|---|---|---|---|---|
| Q1 / 2010 | Q1 / 2009 | 31-03-10 | 31-03-09 | |
| kEUR | kEUR | kEUR | kEUR | |
| The Netherlands |
559 | 1,039 | 22 | 3,485 |
| Germany | 4,141 | 3,439 | 821 | 6,931 |
| Scandinavia | 1,530 | 2,053 | 294 | 7,688 |
| United Kingdom |
2,941 | 2,477 | 27 | 4,862 |
| Other | 2,824 | 2,611 | 35 | 3,427 |
| Total | 11,995 | 11,619 | 1,259 | 26,393 |
Disclosure information according to IFRS 8.34 is not relevant as there is no dependency on major customers.
By a shareholders' resolution of 19 May 2009, the board of directors was authorized to repurchase treasury stock of up to 50 percent of the issued capital within the next 18 months. The board of directors used this authorization and on 2 June 2009 resolved to acquire up to 10 percent of the issued capital amounting to 2,279,708 shares. The share buy-back scheme ended for the time being in November 2009.
As of 31 March 2010, ad pepper media International N.V. held 2,073,792 own shares (31 March 2009: 896,800) at a nominal value of 0.05 EUR each, corresponding to 9.02 percent (31 March 2009: 3.94 percent) of the share capital.
According to a shareholders' resolution, those shares can be used for stock option plans or acquisitions.
By doubling the number and halving the strike price, the existing stock option plans have been adjusted for the share spilt on 27 May 2009:
In the first quarter, no own shares (Q1 2009: 0) were sold at an exercise price of EUR 0.665, none (Q1 2009: 0) at a price of EUR 1.365 (Q1 2009: 0), 194,000 (Q1 2009: 0) at an exercise price of EUR 0.89 and none (Q1 2009: 0) at a price of EUR 2.225 under the employee stock option plans.
A total of 194,000 own shares were sold in the first quarter (Q1 2009: 0).
The number of shares issued and outstanding as of 31 March 2010 totals 20,926,208 (31 March 2009: 21,892,908). Each share has a nominal value of EUR 0.05.
Up until the day of authorization for issuance, no events took place which would have exerted substantial influence on the net assets, financial position or result of operations as per 31 March 2010.
ad pepper media is engaged in the field of online advertising in the broadest sense. Due to the seasonal character of the advertising industry, with its traditional focus on expenditure in the 4th quarter, revenue and thus operating profit are generally higher in the second half of the year.
As of 31 March 2010, a total of 2,491,000 stock options exist under stock option plans. The exchange ratio for each of the stock options is one share per option. The exercise prices are in the range of EUR 0.665 to EUR 6.75.
The following table lists the individual holdings and option rights of the Supervisory and Managing Board (directly and indirectly) as well as employees:
| Shares as of 31-03-10 |
Options as of 31-03-10 |
|
|---|---|---|
| Management board | ||
| Ulrich Schmidt | 1,005,524 | 446,000 |
| Michael A. Carton | 332,178 | 284,000 |
| Jens Körner | 0 | 160,000 |
| Supervisory board | ||
| Michael Oschmann | 0 | 0 |
| Dr. Frank Schlaberg | 0 | 0 |
| Jan Andersen | 0 | 0 |
| Merrill Dean | 0 | 0 |
| Associated companies | ||
| EMA B.V. | 9,486,402 | 0 |
| Viva Media Beteiligungsgesellschaft |
71,300 | 0 |
| Euroserve | 306,132 | |
| Grabacap ApS | 848,000 | 0 |
| Employees | 1,601,000 |
At the end of the first quarter of 2010, the ad pepper media group employed a workforce of 242 (31 March 2009: 258).
Transactions with related companies and persons did not change significantly compared to 2009.
The following directors' dealings (within the meaning of § 15a of the German Securities Trading Act) were registered with ad pepper media International N.V. during the period under review:
Nuremberg, 26 April 2010
Ulrich Schmid Jens Körner Michael A. Carton
All financial and press data relevant for the capital market at a glance:
| Quarterly report I/ 2010 | 12 May 2010 |
|---|---|
| General meeting of shareholders | |
| (Amsterdam, The Netherlands) | 18 May 2010 |
| Quarterly report II/ 2010 | 12 August 2010 |
| Quarterly report III/ 2010 | 11 November 2010 |
| Analysts' Conference (Frankfurt / Main) | November 2010 |
Jens Körner (CFO)/ Thomas Gahlert ad pepper media International N.V. Frankenstraße 150C FrankenCampus 90461 Nuremberg, Germany
Phone: +49 (0) 911 929057-0 Fax: +49 (0) 911 929057-157 E-mail: [email protected] www.adpepper.com
Published by ad pepper media International N.V. Frankenstraße 150C FrankenCampus 90461 Nuremberg, Germany
Phone: +49 (0) 911 929057-0 Fax: +49 (0) 911 929057-157 E-mail: [email protected] www.adpepper.com
Joint stock company (N.V.) Headquarters: Amsterdam, The Netherlands Nuremberg office Prime Standard, Frankfurt Stock Exchange ISIN: NL0000238145 HRB Nuremberg 17591 VAT-ID No.: DE 210757424
Executive management Ulrich Schmidt, Chairman Jens Körner, Finance Michael A. Carton, Director of the Board
We will gladly send you our 2009 Annual Report as well as the interim financial reports for 2010 in German or English.
These reports are also published as PDF files at www.adpepper.com under:
Investor relations/News & publications/Reports & presentations.
ad pepper media International N.V. Hogehilweg 15 NL - 1101 CB Amsterdam
www.adpepper.com
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