Annual Report • Apr 27, 2021
Annual Report
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Tradedoubler's business is online and therefore we think the website is the natural focus for our financial communication. Our ambition is to offer shareholders and other investors an effective and easily accessible way of reading up-to-date and relevant information on www.tradedoubler.com.
Tradedoubler AB (publ), 556575-7423, is a Swedish public limited liability company with its registered office in Stockholm. The company is subject to Swedish laws and as a listed company is obliged to comply with NASDAQ Stockholm's rules and regulations which govern information disclosure to the market.
All values are stated in Swedish kronor. Kronor expressed in millions is abbreviated to SEK M and kronor expressed in thousands is abbreviated to SEK '000. Numerical data in brackets refers to 2019 unless otherwise stated. Information about markets and the competitive situation is Tradedoubler's own assessment, unless a specific source is provided. You can subscribe to press releases and financial reports on Tradedoubler's website.
The Annual Report is prepared in Swedish and translated into English. Should differences occur between the Swedish Annual Report and the English translation, the Swedish version shall prevail.
| BOARD OF DIRECTORS' REPORT | 4 |
|---|---|
| SUSTAINABILITY REPORT | 6 |
| RISKS AND UNCERTAINTY FACTORS | 7 |
| CORPORATE GOVERNANCE | 7 |
| FINANCIAL INFORMATION | |
| CONSOLIDATED ACCOUNTS | 14 |
| NOTES TO THE CONSOLIDATED ACCOUNTS | 18 |
| PARENT COMPANY ACCOUNTS | 36 |
| NOTES TO THE PARENT COMPANY ACCOUNTS | 40 |
| BOARD AND CEO'S SIGNATURES | 46 |
| AUDITOR´S REPORT | 47 |
| BOARD OF DIRECTORS | 51 |
| COMPANY MANAGEMENT | 52 |
| ALTERNATIVE PERFORMANCE MEASUREMENTS | 53 |
A print version of the annual report may be ordered from: Tradedoubler AB Birger Jarlsgatan 57A SE-113 56 Stockholm Tel. +46 8 40 50 800 E-mail: [email protected]
| SEK M | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|
| Total revenue1 | 1,235 | 1,209 | 1,173 | 1,173 | 1,339 |
| Gross profit1 | 255 | 264 | 264 | 260 | 297 |
| Gross margin, %1 | 20.6 | 21.9 | 22.5 | 22.2 | 22.2 |
| Operating costs, excl. depreciation1, 2 |
-191 | -212 | -222 | -239 | -286 |
| EBITDA adjusted for change related items2 |
64 | 52 | 42 | 22 | 11 |
| Change related items | -2 | -7 | -3 | 2 | -17 |
| EBITDA incl. change related items2 |
62 | 45 | 39 | 23 | -6 |
1 Adjusted for change related items.
2018 and earlier periods has not been adjusted for IFRS 16.
| 18 May 2021 |
|---|
| 18 May 2021 |
| 27 August 2021 |
| 10 November 2021 |
| 22 February 2022 |
The group's total revenue during 2020 amounted to SEK 1,235 M (1,209). This was a increase of 2 per cent or a change of 4 per cent adjusted for changes in exchange rates compared to 2019.
Gross profit amounted to SEK 255 M (264), which was an decrease of -4 per cent or a decrease of -2 per cent adjusted for changes in exchange rates.
EBITDA amounted to SEK 62 M (45).
Investments, mainly related to activated development expenses, amounted to SEK 24 M (22).
Operating profit (EBIT) amounted to SEK 25 M (8).
The sum of cash and interest-bearing financial assets at the end of 2020 amounted to SEK 89 M (48). Net cash was SEK -30 M (-86).
Earnings per share, before and after dilution, amounted to SEK 0.16 (-0.26).
The Board proposes that no dividend should be declared for 2020 (SEK 0 per share).
The board of directors and the chief executive officer of Tradedoubler AB (publ), corporate registration number 556575-7423, hereby submit the annual accounts for the operations in the parent company and the group for the financial year 2019.
Tradedoubler is an international leader in performance-based digital marketing and technology powering a unique network of connections. The company works with over 2,000 advertisers through its network of 180,000 publishers in over 80 countries. In 2020, Tradedoubler generated SEK 19bn incremental revenue for its clients through e-commerce and m-commerce.
Tradedoubler operates within the dynamic environment of digital and mobile commerce, which is characterised by positive trends in both consumer and advertising expenditure. The digital marketing sector in Europe and worldwide is very dynamic. Channels such as social media, video and mobile continue to expand their market share and advertising is increasingly traded on an automated basis. This dynamic is influencing our business and, together with advances in technology, opens a range of new opportunities for our clients and us.
For advertisers and publishers who want to grow their business Tradedoubler offers performance marketing and technology solutions powering a unique network of connections. Combining 20 years of digital marketing innovation and expertise and global presence Tradedoubler offer tailored performance solutions based on our clients' needs. Our market-leading integrated technology platform tracks online customer journeys. It creates data-driven insight that helps us deliver targeted performance advertising across multiple, high-quality digital channels:
Building and growing relations is our lifeblood and our key expertise for 20 years. 242 employees based in 14 offices connect advertisers and publishers in more than 80 countries around the globe to grow their business.
The outbreak of covid-19 has had an impact on the results of the year. Certain segments and markets have benefited from the situation while mainly the travel segment has declined sharply. Group management has taken an active role in controlling the company's costs as a response to the covid-19 crisis which has led to improved profitability compared to last year. The impact of the covid-19 crisis going forward is hard to estimate as most segments of the business are affected.
The tax authorities in the United Kingdom and Sweden have during the third quarter 2020 reached a mutual agreement on the double taxation procedure. The result of the agreement is that the tax adjustment is divided between the two jurisdictions in an equal proportion. The parent company has in previous periods booked a tax receivable of SEK 14 M related to this issue. Based on a final agreement between competent authorities a cash tax refund of around SEK 7 M was received during the fourth quarter by the parent company. The UK subsidiary is expected to receive a cash tax refund of less than SEK 1 M. The remainder will be rewarded as unused tax credit. This has resulted in a write-down of approximately SEK 7 M during 2020.
The pandemic has marked the year to a large extent. The company was hit relatively hard in the beginning of the pandemic, which was then characterised by a general caution from customers and a radical reduction in revenue from the travel segment. Since then, Tradedoubler has ended the year significantly better and during the fourth quarter, revenues rose by as much as 13% adjusted for exchange rate effects compared with the same period last year.
If not explicitly stated, the disclosed financial information refers to reported numbers not adjusted for change related items nor changes in exchange rates. For comparability reasons and to indicate the underlying performance, Tradedoubler adjust for change related items. For more information, see page 6.
Consolidated total revenue during 2020 were SEK 1,235 M (1,209), which was an increase of 2 per cent or 4 per cent adjusted for changes in exchange rates.
Gross profit during 2020 was SEK 255 M (264), which was a decrease of -4 per cent or a decrease of -2 per cent adjusted for changes in exchange rates.
Gross margin, was 20,6 per cent (21.9) during 2020.
Operating costs, excluding depreciation, amounted to SEK
193 M (220) during 2020. Operating costs, excluding change related items and depreciation, were SEK 191 M (212). This was a decrease of 10 per cent or 9 per cent adjusted for changes in exchange rates. The reduced costs are mainly related to lower salary costs compared to last year. Other variable costs have been reduced as well as reaction to the covid-19 crisis.
Operating profit before depreciation and amortisation (EBITDA) during 2020 was SEK 62 M (45). Adjusted for change related items, EBITDA was SEK 64 M (52).
Depreciation and amortisation were SEK 37 M (36) and operating profit (EBIT) amounted to SEK 25 M (8).
Cash flow from operating activities before changes in working capital was SEK 40 M (20) in 2020 and related to EBITDA reduced with paid taxes, paid interest and non-cash items.
Changes in working capital were SEK 49 M (-11). Cash flow from operating activities was SEK 88 M (9).
Net investments in non-financial assets during 2020 amounted to SEK -25 M (-22) and were mainly related to product development.
Paid dividends during 2020 were SEK 0 M (0) and cash flow amounted to SEK 35 M (4).
Cash at the end of 2020 amounted to SEK 89 M (48). Interestbearing liabilities amounted to SEK 118 M (134) and related to the loan agreements that was renegotiaded with Tradedoublers principal owner Reworld Media.
Net cash hence amounted to SEK -30 M (-86) at the end of 2020.
Consolidated shareholders' equity amounted to SEK 226 M (233) at the end of 2020. The return on equity during 2020 was 3.1 per cent (negative.) and the equity/asset ratio was 27.0 per cent (27.8).
At year-end 2020, Tradedoubler's staff corresponded to 242 (239) full-time equivalents and included permanent and temporary employees as well as consultants.
For comparability reasons and to indicate the underlying performance, Tradedoubler adjusts for change related items. The following items affect the comparability in this report.
Change related items in the year 2020 amounted to SEK -2 M and related to costs linked to Reworld Media's share program to key management personnel.
During the year 2019 change related items amounted to SEK -7,4 M and related to severance payment of SEK -4.8 M spread over several segments, costs for closing of office SEK -2,9 M and a revaluation of the contingent purchase price in the acquisition of Metapic of SEK 0.3 M (Group management).
During 2020 and 2019, there were no change-related items that affected the company's revenues or gross profit.
For more information, see Note C25.
No significant events have occurred after the balance sheet date.
The parent company's total revenue amounted to SEK 92 M (76) during 2020. Revenue primarily consisted of licensing revenue and remuneration from subsidiaries for centrally performed services. Licensing revenues are based on the underlying profitability of the subsidiary, in accordance with the group's agreement to transfer pricing.
EBITDA (SEK M) EBITDA/Gross profit (%) Excluding change related items
Operating profit (EBIT) amounted to SEK 9 M (-10) during 2020 and net financial items amounted to SEK 7 M (-7). Dividends from group companies were SEK 5 M (7) and changes in exchange rates have impacted pre-tax profit in 2020 with SEK 6 M (-1). Profit after tax amounted to SEK 9 M (-16) during 2020.
The parent company's receivables from group companies amounted to SEK 147 M (139) at end of 2020, of which none (0) were non-current. The parent company's liabilities to group companies were SEK 87 M (87), of which none (0) were non-current. Cash and cash equivalents amounted to SEK 41 M (25) at the end of 2020.
Deferred tax assets amounted to SEK 0 M (14) at the end of 2020. No capitalisation of deferred tax on loss has been made since the assessment of the possibility of using deferred tax on loss carry forwards is unchanged compared to previous periods.
Tradedoubler's share is listed on NASDAQ Stockholm since 2005 and is traded on the list for Small Cap companies. The share is classified as Information Technology. The share capital on 31 December 2020 amounted to SEK 18.4 M (18.4) distributed among 45,927,449 (45,927,449) shares, each with a quota value of SEK 0.40. All shares carry equal rights to share in the company's assets and profits. Each share carries one vote. At the general meeting, each shareholder is entitled to vote for all shares he/ she holds and represents without restriction as to the number of votes cast. Tradedoubler has 790,760 (790,760) shares in its own custody.
Tradedoubler's share price decreased during 2020 by 11.2 per cent from SEK 3.29 to SEK 2.92 on 31 December 2020. The highest price recorded during 2019 was SEK 3.70 and the lowest price was SEK 1.62. The market capitalisation on 31 December 2020 amounted to SEK 134 M.
At year-end 2019 Tradedoubler had 1,774 (1,549) shareholders. The company's largest shareholder was Reworld Media S.A with 51,8 (40.21) per cent of the capital and votes. The five largest shareholders jointly owned 72.7 (66.8) per cent of the shares.
Foreign ownership amounted to 64.9 per cent (59.3). The board of directors and group management jointly owned approximately 0.3 per cent (0.3) of the votes and capital at the end of 2020.
For more information regarding the share, see Tradedoubler's investor site: www.tradedoubler.com/en/investors/ under the heading Shareholders and ownership.
The guidelines for remuneration to the company management is provided on page 10 in the Corporate governance report. The Board will propose to AGM to adopt these guidelines in 2021.
Tradedoubler's long term financial targets are to grow total revenue in excess of 5 per cent annually in local currency and deliver an EBITDA/Gross profit-ratio in excess of 20 per cent over a business cycle. In 2020, total revenue increased by 4% in local currencies, while EBITDA divided by gross profit amounted to 24%.
At the disposal of the Annual General Meeting of the parent company:
| SEK | |
|---|---|
| Share premium reserve | 352,540,285 |
| Retained earnings | -336,430,531 |
| Net profit for the year | 9,020,414 |
| Total non-restricted equity to be carried forward | 25,130,168 |
In addition to the non-restricted equity, the Parent company had SEK 52,306,613 in restricted equity as per end of 31 December 2020.
The Board of Directors proposes to declare no dividend for 2020. No dividend was declared for 2019. Tradedoubler has a policy of distributing at least 50 per cent of its profit after tax provided that a suitable capital structure is maintained. The distribution may occur through share dividends, share redemption and share buybacks.
The legal requirements for sustainability reporting require companies to disclose the consequences of the company's operations within the five areas of Environment, Social conditions, Personnel, Human rights and Anti-corruption.
Since the company's business model only involves the sale of services environmental impact is very limited and therefore not considered a significant risk.
Tradedoubler's employees are the key to Tradedoubler's success. Tradedoubler strives to attract, develop and retain qualified and motivated people in a professional, safe and healthy work environment. Tradedoubler complies with all local laws relating to working hours, vacation laws and occupational health laws including the psychosocial work environment. Regular team activities as well as physical activity are encouraged. Own initiatives and ideas are encouraged, among other things through access to a special e-mail address to share ideas and improvements, as well as the opportunity for recruitment prize for employee tips for employment. Tradedoubler also performs an annual employee survey to gain insight into and measurability in the employees' experienced work and social conditions. Key figures used are work and development, organisation and information, corporate culture, psychosocial work environment and leadership.
Tradedoubler has established a Group Code of Ethics and Conduct and all directors, officers and employees are expected to be familiar with this Code of Ethics and Conduct and to adhere to the principles and procedures set forth in the Code.
Tradedoubler has a history of success as a result of fair and ethical business practices. We interact with a variety of stakeholders; advertisers, publishers, suppliers, colleagues, shareholders and regulatory bodies. Our relationships and
communication shall be honest, fact-based and transparent within the bounds of commercial confidentiality. We value interaction and therefore encourages a constructive dialogue with all our stakeholders.
In our business relations, we expect our partners to adhere to business principles consistent with our own. Tradedoubler's Ethics and Conduct Code contains guidelines for how to act in different situations when representing Tradedoubler in a business context, towards colleagues, in conflict of interests as well as compliance and whistle-blowing.
The code also states zero tolerance to discrimination or harassment because of gender, ethnicity, nationality, religion, sexual orientation, age, disability, marital status or political opinion. All employees should be treated fairly and equally, and all abilities and contributions are valued and honoured equally and in accordance with the Code and fundamental human rights.
No cases of discrimination have been found.
Tradedoubler has established an Anti-Bribery and Corruption Policy with the purpose of establishing main principles and approaches to fraud, incentives and incorrect payments which are considered as major risks for a company like Tradedoubler as it handles a large amount of transactions. This to prevent illegal and unethical business behaviour. Tradedoubler has zero tolerance to such behaviour and where any employee found to violate this policy will be subject to disciplinary action, which may include termination of employment. No such case has occurred.
Identifying and managing risks is a central component in the governance and control of Tradedoubler's business and is incorporated in all parts of the operations.
Risks are continuously reported to the board by management. Through clear processes and routines, the company aim to take advantage of the opportunities presented in a dynamic market, while minimising the risk for damage and losses. Tradedoubler distinguishes between market-related risks, operational risks, financial risks and legal risks.
As with all businesses, Tradedoubler has market-related risks, which are primarily related to the surrounding environment such as macroeconomic conditions, competition and technical development. Within the market Tradedoubler operates the technical and commercial rate of change is high. This means great opportunities, but also significant risks for Tradedoubler. The group management is primarily responsible for monitoring and finding opportunities in this changing environment.
Tradedoubler's operative risks is mainly related to its IT- infrastructure which is essential to deliver the services provided. As for the risks of the IT-infrastructure Tradedoubler has a CISO, Chief Internet Security Officer, who leads the risk management of the IT infrastructure together with a board of internal and external resources.
The treatment of financial risks is centralised to the finance function of Tradedoubler and is conducted in accordance with the assumed finance policy accepted by the Board of Tradedoubler. For more information regarding the financial risks see Note C21.
As a multinational company Tradedoubler is subject to local regulations. Legal risks could be tax related, intellectual property rights or privacy legislation. Tradedoubler monitors and mitigates legal risks through internal and external resources as well as through trade associations.
Tradedoubler has a significant goodwill item and other immaterial assets such as activated development expenses, which are tested for impairment on an annual basis. In conjunction with the preparation of the year-end report 2020, impairment tests relating to intangible assets were performed and resulted in a write-down of intangible assets related to product development of SEK 3.3 M.
In connection with the impairment testing of goodwill for 2020 no impairment was deemed to exist. At the end of 2020 goodwill amounted to SEK 286 M (299). It cannot be ruled out that a future impairment test would lead to further write-downs of immaterial assets in the consolidated results and/or the parent company. For further information, see Note C13.
In May 2018, the EU Data Protection Ordinance (GDPR) entered into force, which places even greater demands on how the company handles personal data and otherwise deals with data protection issues. The company has worked actively to be able to meet the requirements under the new regulation.
Tradedoubler is a Swedish public limited liability company with its registered office in Stockholm. Tradedoubler's share has been quoted on NASDAQ Stockholm since 2005. This section describes Tradedoubler's corporate governance, management and administration as well as the internal control.
The governance of Tradedoubler is divided among the shareholders at the annual general meeting (AGM), the board of directors, the CEO and the group management in accordance with the Swedish Companies Act, the articles of association and the Swedish Code of Corporate Governance (the Code). The board of directors has chosen to jointly handle the duties pertaining to the audit committee according to the Code and the Swedish Companies Act, but which also may be handled by the board as a whole – see more information under "Audit Committee".
In 2020, three employees, including the CEO, participated in the main owner Reworld Media's share program. The conditions of the program are that the employees are allotted some shares if they are still employed in September 2021, and some shares if they are still employed in September 2022. For more information, see Note K6. According to the Code, share-based compensation programs must have a term of at least three years, and Tradedoubler deviates, in this instance, from the Code as the same rules are not applicable to the main owner Reworld Media that is based in France. In other respects, Tradedoubler has applied the Code without deviations during 2020.
Tradedoubler's articles of association and other information regarding corporate governance in the company is available on Tradedoubler's website: www.tradedoubler.com/en/investors/ corporate-governance/
The annual general meeting is Tradedoubler's highest decision- making body in which shareholders exercise their rights to decide on the affairs of the company and where each share carries one vote. Shareholders are informed via Tradedoubler's website of their entitlement to have an item addressed at the AGM. Shareholders who are registered in the share register on the record day, (five weekdays prior to the date of the AGM) and who have provided notification of their intention to attend in accordance with what is stated in the convening notice, are entitled to participate in the AGM, either in person or by proxy.
Minutes from the annual general meeting 2020 and previous general meetings of shareholders are available on Tradedoubler's website: www.tradedoubler.com/en/investors/ financial-calendar-and-events/
The AGM was held on 7 May 2020 in Stockholm. 41.3 per cent of the shares were represented at the AGM. The AGM passed resolutions on election of board members.
The annual general meeting resolved to authorise the board of directors, until the next annual general meeting, on one or several occasions, with or without deviation from the shareholders' preferential rights, to resolve on new issues of shares, warrants and/or convertibles corresponding to a maximum fifty (50) per cent of the total number of outstanding shares in the company per the date of the annual general meeting. The authorisation shall also include the right to decide on a new issue of share, warrants and/or convertibles with provision for non-payment, set-off or otherwise with terms under the Companies Act. Cash or set-off issues that take place with deviation from the shareholders' preferential rights shall be made on market terms.
The annual general meeting resolved in accordance with the Board's proposal for guidelines for remuneration and other terms of employment for company management.
The annual general meeting resolved to authorise the board of directors, until the next annual general meeting, on one or several occasions, to resolve on the acquisition of a maximum number of own shares so that, after the purchase, the company holds no more than ten per cent of the total number of shares in the company.
The annual general meeting resolved to authorise the board of directors, until the next annual general meeting, on one or several occasions, to resolve on the transfer of shares in the company. Transfer of own shares may only take place in connection with financing of company acquisitions and other types of strategic investments and acquisitions and with a maximum of the number of own shares held by the company at each time.
The annual general meeting resolved in accordance with the Nomination Committee's proposal for a decision on election committee for the 2021 annual general meeting.
Tradedoubler's AGM passes resolutions regarding a nomination committee before the next AGM. According to the resolution the nomination committee shall be composed of the Chairman of the Board and representatives of the three largest shareholders, as of the last banking day in August, according to the share register kept by Euroclear Sweden AB.
The Chairman of the Board shall convene the first meeting of the Nomination Committee. The representative representing the largest shareholder shall be appointed chairman of the nomination committee. If one or more shareholders do not wish to appoint a representative to the nomination committee the next shareholder should be contacted. If the shareholder who is next do not wish to appoint a representative the Chairman must only contact the eight largest shareholders to obtain a nomination committee of at least three representatives including the Chairman of the Board. If a nomination committee is not obtained on three representatives (including Chairman) after contact with the eight largest shareholders, the Chairman of the board will continue to contact shareholders until a nomination committee of three representatives (including Chairman of the board) has been reached.
The composition of the nomination committee consists of the following members; Gautier Normand, appointed by Reworld Media S.A (chairman), Yi Shi and Pascal Chevalier, chairman of the Board. The nomination committee's proposals to the AGM 2021 regarding board members, fees and other remuneration etc. are planned to be presented in the notice convening for the AGM 2021 and will also be available on the company's website.
The members of the nomination committee receive no remuneration from Tradedoubler. However, the chairman of the board and Gautier Normand receives remuneration from Tradedoubler in the form of ordinary directors' fees.
According to Tradedoubler's articles of association, the board shall be composed of between five and nine members. The CEO is not a member of the board, but attends board meetings.
Other employees in Tradedoubler participate in board meetings when required, for instance to present reports. The company's chief financial officer has during 2020 served as the secretary to the board.
During 2020, Tradedoubler's board of directors was composed until the annual general meeting on 7 May 2020 of Pascal Chevalier (chairman), Gautier Normand, Jérémy Parola, Erik Siekmann and Nils Carlsson.
At the AGM on 7 May 2020 all board members were re-elected. The current board is presented on page 49.
The nomination committee for AGM 2020 considered Pascal Chevalier and Gautier Normand in their capacity as founder and senior executives of Reworld Media S.A dependent in relation to the company's major owners, but independent in relation to the company and the company management. It also considered Jérémy Parola dependent in relation to the company's major shareholders, but independent in relation to the company and the executive management. Other board members who held positions during 2020 were independent during their term of
office in relation to the company and the company management and in relation to the company's major owners. The composition of board members during 2020 has therefore met the requirements imposed in relation to independence.
Under the Code, the board, having regard to the company's operations, development stage and circumstances, must have an appropriate composition characterised by versatility and breadth regarding the competence, experience and background of the members, and that an even distribution of gender in the board should be pursued. Tradedoubler's board of directors during 2020 was entirely composed of men. The nomination committee aims for a uniform gender distribution and had this balance in consideration in its work on a proposal for a new board of directors.
The work of the board is guided by Rules of procedure for the board that is adopted each year, usually at the statutory board meeting. These rules set out the responsibilities of the board and CEO and regulates the board, its committees and its members' internal division of work, the decision-making order within the board, notifications of board meetings, agendas and minutes, and the board's work on internal control, risk management and the financial reporting. The current rules of procedure were approved by the board of directors on 7 May 2020.
According to the current rules of procedure, the chairman of the board shall ensure that the board work is conducted effectively and that the board fulfils its duties. In particular, the chairman shall:
The board held 9 recorded board meetings during 2020, of which 9 took place by telephone. The individual members' attendance at board and committee meetings is shown in the table on page 12.
During the year, the board's work mainly focused on the execution of the strategy balancing expenditures towards necessary investments, budget and business plan for 2020-2021 and other analysis of the business and trends in the industry.
The Code and the Swedish Companies Act (2005:551) contain provisions regarding the establishment of an audit committee. The entire board of directors may fulfil the committee's duties in accordance with what is prescribed in Chapter 8 Sections 49 a-b second paragraph of the Companies Act. Since autumn 2013 the duties of the audit committee have been handled by the entire board. In 2020, the auditor in charge have, at two separate meetings, informed the board about planned audit, estimated costs for audit and the results from completed audit.
The committee's work focused on assessment of immaterial assets and internal control. For more information about the internal control and risk management, see page 11.
The board has appointed a remuneration committee, which during the year was composed of two board members, one of whom was chairman. The remuneration committee shall hold meetings when necessary. When considered appropriate, the remuneration committee may invite the CEO, the company's CFO, the company's auditor or others to participate in the committee's meetings. Minutes are taken of the remuneration committee's meetings and a copy of the minutes is distributed to all board members.
During 2020 the remuneration committee was composed of Pascal Chevalier and Erik Siekmann.
The remuneration committee has not had any recorded meetings during 2020. The board has delegated certain terms of remuneration to the chairman of the board, including approvals of changes in remuneration to company management in addition to the CEO.
The AGM 2020 approved annual remuneration to the board of directors amounting to SEK 180,000 to each of the board members, including the chairman, elected by the AGM who are not employed by Tradedoubler. The AGM resolved on no remuneration for committee work. No board member was employed by any company in the group during 2020.
Remuneration to each board member is shown in the table "Composition, independence and remuneration of the Board 2020" on page 12.
The President and CEO leads the day-to-day operations and is assisted by a company management team.
The company management during 2020 was composed of:
| Matthias Stadelmeyer | CEO |
|---|---|
| Viktor Wågström | CFO |
| François Pacot | CTO |
The AGM resolves on guidelines for remuneration and other terms of employment to company management. Company management is defined as the managing director and other members of the senior leadership team.
The annual general meeting 2020 resolved on the following guidelines for remuneration to company management.
The total remuneration shall be competitive in the local market where the employee is based in order to attract, motivate and retain highly skilled employees. Individual remuneration shall be based on the employee's experience, competence, responsibility and performance.
The total remuneration should be based on four main components; base salary, variable salary, pension benefits and, from time to time, long-term incentive programmes.
Base salary: The base salary shall be in line with local market conditions and shall be based on experience, competence, responsibility and performance.
Variable salary: Variable salary shall be in line with local market conditions and reward growth and profitability and have a uniting effect for the group. It should be based on pre-defined measurable targets, both quantitative and qualitative, agreed in writing with the employee. There shall be a maximum for the variable salary, normally not more than 50 per cent of the base salary.
Pension benefits: Pension benefits may be offered to the company management, depending on local market conditions. Management based in Sweden is offered a benefit that, essentially, corresponds to the so-called ITP plan. For management based outside Sweden, pension benefits may not exceed 50 per cent of the base salary.
Notice and severance payment: A mutual termination period of 3–9 months shall apply for the company management. Severance payment, if any, shall not exceed a sum equal to 12 months base salary if the company terminates the employment. If the employee terminates the employment he/she should normally not be entitled to any severance payment.
Long-term incentive programmes: Any share and shareprice- related incentive programmes related to the Tradedoubler share shall be approved by a General Meeting and are therefore excluded from these guidelines. The amount of such benefits are allowed to amount to a maximum of 15 percent of the fixed salary.
Other benefits: Other benefits, such as company cars, shall have a limited value in relation to the total compensation.
Matters regarding the terms of employment for the managing director are to be decided by the board of directors. The managing director decides the terms of employment for the other company management after approval by the remuneration committee.
Members of the board of directors, elected at general meetings, may in certain cases receive a fee for services performed within
their respective areas of expertise, outside of their board of directors duties. Compensation for these services shall be paid at market terms and be approved by the board of directors.
The board of directors or the remuneration committee may deviate from these principles if special reasons are at hand in an individual case. In 2020, no deviations have been made from the guidelines.
Tradedoubler has in 2020 prepared a single compensation report as a result of new legislation, this report is available on the company's website
As chief executive officer Matthias Stadelmeyer received remuneration for 2020, amounting to SEK 4,812,000 including fixed and variable salary of SEK 4,175,000, shared-based remuneration valued at 556,000 and SEK 81,000 as remuneration for payment into private pension insurance.
Company management apart from the chief executive officer received a total of SEK 4,175,000 in remuneration including fixed and variable salary of SEK 3,329,000, shared-based remuneration valued at 556,000 and SEK 290,000 as remuneration for payment into private pension insurance.
EY was elected as auditor at the AGM 2020 for the period until the AGM 2021, with the authorised public accountant Jennifer Rock-Baley as auditor-in-charge.
During 2020, the auditor reviewed the annual accounts, the consolidated accounts and accounting records as well as the administration of the board of directors and the CEO. In addition, the auditor reviewed the corporate governance report and the sustainability report. The auditor has also reviewed the interim report for the period January–June 2020 and has been retained for certain advice, most of which pertained to auditrelated consultations regarding accounting and tax matters.
Total remuneration of SEK 4,921,000 was paid during 2020, of which SEK 4,582,000 was paid to EY and SEK 339,000 to other auditing companies.
Management in Tradedoubler has taken part in the main owner Reworld Media's share program. A total of 200,859 share options have been granted to senior executives. The conditions of the share program are that the senior executives have to be employed at the allotment date. See note C6, for more information about the share programme.
The group also operates an annual performance- and resultsbased variable remuneration programme for employees within the group. In the 2020 programme, various quantitative and qualitative performance- and earnings targets were set for different occupational categories, based on company-wide, and regional targets for employees.
1 Published by the Committee of Sponsoring Organisations of the Treadway Commission (COSO), (www.coso.org)
The board's responsibility for internal control and risk management is governed by the Companies Act and by the Code. Internal control and risk management in respect of the financial reporting constitute a part of the total internal control and risk management within Tradedoubler, which is based on the COSO framework1 and represents an essential part of Tradedoubler's corporate governance.
COSO describes the internal control as divided into five components as follows; control environment, risk management, control activities, information and communication, monitoring.
The area of internal control and risk management in respect of the financial reporting is part of the board's and group management's overall work on identifying and managing risks. This work aims to identify and evaluate the most critical risks affecting the internal control and the financial reporting in the group's companies, as a basis for how to handle risks through different control structures. The most significant risks for the group are described under "Risks and uncertainty factors" on page 7. See also Note C2 and C21 in Notes to the consolidated accounts.
The board has the overall responsibility for the internal control and risk management in respect of the financial reporting. The board has adopted Rules of procedure. This is an internal control instrument setting out the responsibilities of the board, CEO and company management regulating the board, its committees and members' internal division of work. The board also works with the duties that under the Code shall be handled by the audit committee. This is primarily control of the financial reporting and monitoring the effectiveness of the company's internal control and risk management in respect of the financial reporting.
In addition, the CEO and company management control the day-to-day work through a variety of policies and internal control documents. The most important of these include the company's Authorisation manual, Payment policy and IT Security policy.
The CEO in conjunction with the rest of the group management is responsible for ensuring that the above-mentioned internal control instruments are complied with and updated if necessary.
Control structures are concerned with what controls are chosen to manage identified risks in the group's companies. The controls may be general or detailed, preventative or discovery-based and automated or manual in character.
The internal control instruments are available for the relevant employees on Tradedoubler's Intranet.
The CEO and the company's CFO report the on-going work on develop and monitor the company's internal control and risk management to the board.
Follow up in order to ensure the effectiveness of the internal control and risk management in respect of the financial reporting is conducted by the board, the CEO and the rest of the group management, including the company's CFO.
Follow up includes review of monthly income statements and cash flow statements against the budget and latest financial forecast and current controls that exceptions to policies has been approved by authorised personnel. This means, inter alia exemption from the credit policy and the policy of publishers only getting paid after the customer has paid its invoice to Tradedoubler.
The IT security work is continually ongoing with follow up meetings with the CISO (Chief Internet Security Officer) and group managers for development and operations in attendance. Any IT security-related incidents are reported at these meetings and follow up takes place of IT security-related projects and activities. When required, the CISO reports to the CEO and other members of the group management including the company's CFO. The company have agreements with external security experts in order to receive advice and support regarding implementation, assessments, and priorities on IT security-related issues.
At present, the company does not have any special audit function. The question of formally establishing a special audit function is reviewed continually.
| Name | Born | Nationality | Elected | The Board of directors |
The Remuneration Committeet |
Independent in relation to the company, the company management and the company´s major shareholders* |
Fee in SEK (incl. commit tee work)** |
Own or related party share holdings*** |
|---|---|---|---|---|---|---|---|---|
| Pascal Chevalier | 1967 | French | 2015 | Chairman | Chairman | No* | 180,000 | – |
| Gautier Normand | 1978 | French | 2015 | Member | – | No* | 180,000 | – |
| Jérémy Parola | 1987 | French | 2016 | Member | – | No* | 180,000 | – |
| Nils Carlsson | 1969 | Swedish | 2016 | Member | – | Yes | 180,000 | – |
| Erik Siekmann | 1971 | German | 2016 | Member | Member | Yes | 180,000 | – |
| SUM | 900,000 |
* Pascal Chevalier, Gautier Normand and Jérémy Parola are independent to the company and company management but dependent in relation to the company´s major owners, since they are all active in Reworld Media, Tradedoubler's major owner. The arm's length principle has been applied in all transactions between Tradedoubler and Reworld Media, for more information see Note C23.
** The annual general meeting 2020 approved the nomination committee's proposal for the compensation to the Board members corresponding to SEK 180,000. No compensation is payable for committee work. Compensation relates to the annual payable amount.
*** Holdings of shares or other equal financial instruments by private or related persons or legal entities in Tradedoubler according to the latest available information to Tradedoubler.
| Name | Board of directors | Attendance, board meetings |
The remuneration committee |
Attendance Remuneration committee |
|---|---|---|---|---|
| Pascal Chevalier | Chairman | 9/9 | Chairman | – |
| Gautier Normand | Member | 9/9 | – | – |
| Jérémy Parola | Member | 9/9 | – | – |
| Nils Carlsson | Member | 9/9 | – | – |
| Erik Siekmann | Member | 9/9 | Member | – |
| CONSOLIDATED ACCOUNTS | 14 |
|---|---|
| NOTES TO THE CONSOLIDATED ACCOUNTS | 18 |
| PARENT COMPANY ACCOUNTS | 36 |
| NOTES TO THE PARENT COMPANY ACCOUNTS | 40 |
| BOARD AND CEO'S SIGNATURES | 46 |
| AUDITOR´S REPORT | 47 |
| BOARD OF DIRECTORS | 51 |
| COMPANY MANAGEMENT | 52 |
| ALTERNATIVE PERFORMANCE MEASUREMENTS | 53 |
| SEK ´000 | Note | 2020 | 2019 |
|---|---|---|---|
| Net sales | 1,210,842 | 1,183,087 | |
| Other revenue | 24,606 | 25,603 | |
| Total revenue | C3, C4 | 1,235,448 | 1,208,690 |
| Cost of goods sold | C8 | -980,887 | -944,259 |
| Gross profit | 254,562 | 264,431 | |
| Selling expenses | -142,919 | -163,652 | |
| Administrative expenses | -57,736 | -61,667 | |
| Research & development expenses | -28,909 | -31,229 | |
| Other income and expenses | -79 | 302 | |
| Operating profit (EBIT) | C4, C5, C6, C7, C8, C9 | 24,919 | 8,186 |
| Financial income | -213 | 829 | |
| Financial expenses | -8,055 | -17,703 | |
| Net financial items | C10 | -8,268 | -16,874 |
| Profit before tax | 16,651 | -8,688 | |
| Tax | C11 | -9,618 | -3,014 |
| Net profit for the year | 7,033 | -11,702 |
| SEK ´000 | Note | 2020 | 2019 |
|---|---|---|---|
| Profit for the year | 7,033 | -11,702 | |
| Other comprehensive income | |||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods |
|||
| Translation differences, net after tax | -14,598 | 7,350 | |
| Total other comprehensive income to be reclassified to profit or loss in subsequent periods |
-14,598 | 7,350 | |
| Total comprehensive income for the year | -7,565 | -4,352 | |
| Total comprehensive income for the year attributable to: | |||
| The parent company's shareholders | 7,033 | -11,702 | |
| Comprehensive income attributable to: | |||
| The parent company's shareholders | -7,565 | -4,352 | |
| Earnings per share | C17 | ||
| Earnings per share before and after dilution | 0.16 | -0.26 |
| SEK ´000 | Note | 2020-12-31 | 2019-12-31 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | C13 | 286,139 | 299,094 |
| Intangible assets | C13 | 48,605 | 44,662 |
| Equipment, tools, fixtures and fittings | C14 | 1,871 | 1,227 |
| Right-of-use assets | C9 | 40,534 | 32,116 |
| Other non-current receivables | 6,282 | 5,819 | |
| Shares and participation in other companies | C26 | 11,128 | 11,128 |
| Deferred tax receivables | C11 | 22,691 | 32,976 |
| Total non-current assets | 417,248 | 427,021 | |
| Current assets Trade receivables |
C12 C21 |
295,762 | 329,309 |
| Tax receivables | 6,015 | 6,639 | |
| Other receivables | 8,886 | 12,105 | |
| Prepaid expenses and accrued income | C15 | 22,746 | 14,347 |
| Cash and cash equivalents | C21 | 88,715 | 48,193 |
| Total current assets | 422,125 | 410,594 | |
| Total assets | 839,373 | 837,615 | |
| EQUITY AND LIABILITIES | |||
| Shareholders' equity | C16 | ||
| Share capital | 18,371 | 18,371 | |
| Share premium | 441,600 | 441,600 | |
| Translation reserve | 40,264 | 54,863 | |
| Retained earnings including net profit for the year | -273,767 | -282,191 | |
| Shareholder's equity attributable to the Parent Company's shareholders |
226,468 | 232,643 | |
| Non-current liabilities | C12, C21 | ||
| Deferred tax liabilities | C11 | 1,523 | 1,492 |
| Provisions: non-current | 483 | 915 | |
| Lease Liabilities, long term | C9 | 27,737 | 15,897 |
| Other non-interest-bearing liabilitities | 497 | – | |
| Other interest-bearing liabilities | C18 | 106,198 | 121,526 |
| Total non-current liabilities | 136,438 | 139,830 | |
| Current liabilities | C12, C21 | ||
| Current interest-bearing debt | C18 | 12,206 | 12,687 |
| Trade payables | 16,034 | 18,002 | |
| Current liabilities to publishers | C12 | 316,968 | 318,651 |
| Tax liabilities | 6,214 | 3,959 | |
| Other liabilities | C19 | 74,900 | 67,041 |
| Leasing Liabilities, short-term | C9 | 11,849 | 14,699 |
| Accrued expenses and deferred income | C20 | 38,296 | 30,103 |
| Total current liabilities | 476,467 | 465,142 | |
| Total equity and liabilities | 839,373 | 837,615 |
For information regarding Pledged assets and contingent liabilities, see Note C22.
| Share | Translation | Retained earnings incl. Net profit for |
|||
|---|---|---|---|---|---|
| SEK ´000 | Share capital | premium | reserve | the year | Total equity |
| Opening balance at January 1, 2019 | 18,371 | 441,600 | 47,512 | -271,497 | 235,986 |
| Comprehensive income | |||||
| Net profit for the year | -11,702 | -11,702 | |||
| Other comprehensive income | |||||
| Translation differences, net after tax | – | – | 7,350 | – | 7,350 |
| Total other comprehensive income | – | – | 7,350 | – | 7,350 |
| Total comprehensive income | – | – | 7,350 | -11,702 | -4,352 |
| Transactions with shareholders | |||||
| Use of shares in own custody | – | – | – | 1,009 | 1,009 |
| Total transactions with shareholders | – | – | – | 1,009 | 1,009 |
| Closing balance at December 31, 2019 | 18,371 | 441,600 | 54,862 | -282,190 | 232,643 |
| Opening balance at January 1, 2020 | 18,371 | 441,600 | 54,862 | -282,190 | 232,643 |
| Comprehensive income | |||||
| Net profit for the year | 7,033 | 7,033 | |||
| Other comprehensive income | |||||
| Translation differences, net after tax | – | – | -14,598 | – | -14,598 |
| Total other comprehensive income | – | – | -14,598 | – | -14,598 |
| Total comprehensive income | – | – | -14,598 | 7,033 | -7,565 |
| Transactions with shareholders | |||||
| Equity-settled share-based payments | – | – | – | 1,391 | – |
| Total transactions with shareholders | – | – | – | 1,391 | 1,391 |
| Closing balance at December 31, 2020 | 18,371 | 441,600 | 40,264 | -273,767 | 226,468 |
All equity is tributed to the shareholders of the Parent Company.
| SEK ´000 | Note | 2020 | 2019 |
|---|---|---|---|
| Operating activities | C24 | ||
| Profit before tax | 16,651 | -8,688 | |
| Adjustment for items not included in the cash flow | 20,529 | 31,959 | |
| Taxes paid | 2,403 | -3,701 | |
| Cash flow from operating activities before changes in working capital | 39,583 | 19,571 | |
| Cash flow from changes in working capital | |||
| Increase (-)/Decrease (+) in operating receivables | 9,173 | -48,414 | |
| Increase (-)/Decrease (+) in operating liabilities | 39,749 | 37,780 | |
| Cash flow from operating activities | 88,505 | 8,937 | |
| Investing activities | |||
| Investments in intangible assets | -23,591 | -21,643 | |
| Investments in property, plant and equipment | -1,405 | -705 | |
| Investments in financial assets | -889 | -704 | |
| Cash flow from investing activities | -25,885 | -23,051 | |
| Financing activities | |||
| Newly raised loans | 600 | 103,663 | |
| Repayment of loans and own bonds | -12,584 | -71,000 | |
| Payment of contingent additional purchase price | – | -255 | |
| Payment of lease liability | -15,405 | -13,890 | |
| Cash flow from financing activities | -27,389 | 18,519 | |
| Cash flow for the year | 35,231 | 4,404 | |
| Cash flow for the year | 35,231 | 4,404 | |
| Cash and cash equivalents at the beginning of the year | 48,193 | 44,171 | |
| Exchange difference in cash and cash equivalents | 5,291 | -382 | |
| Cash and cash equivalents at the end of the year | 88,715 | 48,193 |
Tradedoubler AB (the parent company) and its subsidiaries together make up the Tradedoubler group. TradeDoubler AB (publ), corporate registration number 556575-7423, is a Swedish registered limited liability company with its registered office in Stockholm. The address of the head office is Birger Jarlsgatan 57A, 113 56 Stockholm. The parent company's shares are listed on NASDAQ Stockholm. The board of directors approved these annual accounts for publication on 23 April 2021. The annual accounts will be considered for adoption by the annual general meeting.
The consolidated accounts were prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the European Commission for application within the EU. In addition, the Swedish Financial Reporting Board's recommendation RFR 1, Supplementary Accounting Rules for Groups is applied.
The parent company applies the same accounting policies as the group except in the instances described below in the section "Parent Company's accounting policies". Discrepancies between the principles applied by the parent company and the group arise due to restrictions on the ability to apply IFRS within the parent company imposed by the Swedish Annual Accounts Act, the Pension Obligations Vesting Act ("tryggandelagen") and, in some cases, by tax considerations. Assets and liabilities are recognised at historical cost unless otherwise stated below.
The parent company's functional currency is the Swedish krona (SEK), which is also the presentation currency for the parent company and the group. This means that the financial statements are presented in SEK. All amounts are rounded off to the nearest thousand, unless otherwise stated.
Preparing the financial statements in conformity with IFRS requires the group management to make judgements and estimates as well as assumptions that affect the application of the accounting policies and the recognised amounts of assets, liabilities, revenue and expenses. The actual outcome may deviate from these estimates and judgements. Estimates and assumptions are reviewed regularly. Changes in estimates are recognised in the period in which they arise if the change affects that period alone or, alternatively, in the period in which they arise and during future periods if the change affects both the period in question and future periods.
Judgements made by the group management in the application of IFRS, which have a material impact on the financial statements and estimates made, which may give rise to significant adjustments in future financial statements are described in more detail in the notes to the consolidated accounts C2, Critical estimates and judgements.
The Group and parent company applies in this Annual report for the first time the new and amended standards and interpretations applicable for fiscal years beginning 1 January 2020 or later. The new standards has no material impact on the Group or parent company's financial statements.
No new or amended standards or interpretations published by the IASB is expected to have some impact on the Group or parent company financial reports.
Non-current assets and non-current liabilities in the parent company and the group largely consist of amounts that are expected to be recovered or paid after more than twelve months, calculated from the end of the reporting period. Current assets and current liabilities in the parent company and the group largely consist of amounts that are expected to be recovered or paid within twelve months, calculated from the end of the reporting period.
Identification of segments is made based on the internal reporting to the chief operating decision-maker, which as far as Tradedoubler is concerned is deemed to be the CEO. From January 1, 2019 Tradedoubler reports the geographical segments DACH (Germany, and Switzerland), France & Benelux (France, and Netherlands), Nordics (Sweden, Norway, Denmark, Finland and Poland), South (Italy, Brazil and Spain) and UK & Ireland (UK).
The consolidated financial statements include the parent company and its subsidiaries. The financial statements of the parent and its subsidiaries included in the consolidated accounts cover the same period and are prepared according to the accounting principles applicable to the Group. All intercompany receivables and liabilities, income and expenses, gains or losses arising from transactions between companies included in the consolidated accounts are eliminated in full.
A subsidiary is included in the consolidated financial statements from the acquisition date, which is the date when the parent company obtains control, and are included in the consolidated financial statements until the date that control ceases. Normally, controlling influence over a subsidiary by the holding of more than 50 per cent of voting shares, but can also be obtained in other ways, for example through contracts. Subsidiaries acquired are reported in the consolidated financial statements using the purchase method. This applies to businesses acquired directly. The purchase method means that the acquisition value of shares, or of the directly acquired business, is allocated to the acquired assets, assumed commitments and liabilities at the date of acquisition on the basis of their fair values at the time. Possible additional consideration is valued at fair value. If the cost exceeds the fair value of the acquired company's net assets, the difference is recognised as goodwill. If the cost is less than the fair value of the acquired company's net assets, the difference is recognised directly in the income statement. Transaction costs related to the acquisition is recognised directly in the income statement as other operating expenses. In cases where a revaluation at fair value of the contingent consideration its recognised in operating income.
Non-controlling interest is the part of the profit and net assets of a jointly owned company that is attributed to the other owners. Noncontrolling interests' share of income is included in the consolidated profit after tax. The share of net assets is included in equity in the consolidated balance sheet but disclosed separately from equity attributable to parent company shareholders.
Transactions in foreign currencies are translated to the functional currency at the exchange rate prevailing on the transaction date. The functional currency is the currency which applies in the primary economic environments in which the companies conduct their operations. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the prevailing year-end exchange rate. Exchange differences arising on translation are recognised in the income statement, as financial income and expenses, with the exception of exchange differences in respect of intra-group loans which are treated as a net investment in a foreign operation (increased/reduced net investment) where exchange differences are
recognised in other comprehensive income in the same way as translation differences.
The group's presentation currency is the Swedish krona (SEK). Assets and liabilities in foreign operations, including goodwill and other goodwill/negative goodwill arising on consolidation, are translated from the foreign operation's functional currency to the group's presentation currency, Swedish krona, at the exchange rate prevailing at the end of the reporting period. Income and expenses in a foreign operation are translated to Swedish kronor at an average rate that represents an approximation of the prevailing exchange rates on the date of each transaction. Translation differences arising on such translation are recognised in other comprehensive income.
The exchange rates used in translation of the financial statements for consolidation purposes are as follows:
| Closing day rate | Average rate | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| EUR | 10.04 | 10.43 | 10.49 | 10.59 |
| GBP | 11.09 | 12.21 | 11.80 | 12.07 |
| NOK | 0.95 | 1.06 | 0.98 | 1.07 |
| DKK | 1.35 | 1.40 | 1.41 | 1.42 |
| PLN | 2.22 | 2.44 | 2.36 | 2.46 |
| CHF | 9.25 | 9.57 | 9.80 | 9.52 |
| BRL | 1.57 | 2.30 | 1.82 | 2.40 |
| SGD | 6.18 | 6.90 | 6.67 | 6.93 |
The company does not currently hedge foreign exchange exposure. Inconnection with the disposal of a foreign operation, the accumulated translation differences attributable to the operation are recognised in the consolidated income statement.
Sales revenue, which is synonymous with net sales, is reported at the fair value of what has been received or will be received less discounts granted. Revenue recognition takes place in the income statement when it is probable that the future economic benefits will accrue to the Group and these benefits can be calculated reliably. Revenues include only the gross inflow of economic benefits that the company receives or can receive on its own account.
The Group's revenues consist of remuneration from the companies and organisations that advertise and market their products and services through the group. Revenue consists of variable transaction and consulting revenue (called Transaction revenue) and of fixed onetime and monthly fees (called Fixed revenue) and also to a certain extent of Other revenue.
The parent company's revenues consist mainly of license fees that are charged to the subsidiaries. The parent company's license revenue is based on the Group's current rules for internal pricing and is calculated so that a market-based margin remains in the subsidiary with regard to the services that the subsidiary carries out and the risks that the business entails.
Most of the company's revenue consists of transaction revenue. Transaction revenue is mainly generated within the framework of various advertising campaigns where each campaign constitutes a performance commitment. Advertisers only pay a success-based fee to the publisher if the advertising material has actually been used and resulted in the desired transaction for the advertising customers. The transaction is then validated by the advertiser and Tradedoubler then reports the revenue when the performance commitment is considered fulfilled.
Fixed revenue consists of fixed one-time and monthly fees. These revenues are linked to a service assignment in which the company, among other things, gives the customer the right to use the company's technology. The right of use is mainly regulated via a service assignment. These revenues are reported over time during the current useful life.
Other revenue is revenue that is not directly linked to Tradedoubler's main business. These mainly consist of rental income and government support that is reported at fair value as other income as there is reasonable assurance that the grant will be received and that Tradedoubler will meet the conditions associated with the grant. Government grants are accrued and reported in the income statement over the same periods as the costs the grants are intended to cover. For more details on revenue recognition, see Note C3.
Costs of goods sold consist of remuneration to publishers and search engines and are reported in line with reported revenues. Tradedoubler's agreement with publishers contains clauses that mean that disbursement first occurs when certain minimum levels are reached. Furthermore, there are cases where Tradedoubler lacks opportunities to settle the debts incurred. This means that Tradedoubler is forced to make estimates of whether and when the debts will have to be settled on a regular basis and the debt is adjusted regularly to reflect revised future estimated cash flows.
Interest income is primarily interest on bank deposits and is recognised in the income statement as it arises by application of the effective interest method. Dividend income is recognised in the income statement when the group secures the right to receive payments. Financial expenses consist of interest costs on borrowings, the effect of dissolution of present value computation of provisions, loss on changes in value of financial assets measured at fair value via the income statement, impairment of financial assets and such losses on hedging instruments that are recognised in the income statement. Exchange gains and exchange losses are recognised net. Since 2019, interest expenses related to leasing under IFRS 16 have been reported under financial expenses.
Financial instruments on the asset side that are recognised in the statement of financial position includes cash and cash equivalents, trade and financial receivables. Liabilities includes trade payables, liabilities to publishers, other interest-bearing liabilities and contingent additional purchase price.
A financial asset or financial liability is recognised in the statement of financial position when the company or one of the subsidiaries becomes a party according to the instrument's contractual terms. A receivable is recognised when the company has performed and there is a contractual obligation for the counterparty to pay, even if the invoice has not yet been sent. Accounts receivable are recognised in the statement of financial position when the invoice has been sent. Debt is recognised when the counterparty has performed and there is a contractual obligation to pay, even if the invoice has not yet been received.
Accounts payable are recognised when the invoice is received. A financial asset is removed from the statement of financial position when the rights in the agreement are realised, expire or the company loses control over them. The same applies to part of a financial asset. A financial liability is removed from the statement of financial position when the obligation in the agreement is fulfilled or otherwise extinguished.
The same applies to part of a financial debt. A financial asset and a financial liability are offset and reported with a net amount in the statement of financial position only when there is a legal right to offset the amounts and that there is an intention to settle the items with a net amount or to simultaneously realise the asset and settle the debt
Acquisitions and divestments of financial assets are reported on the business day. The business day is the day on which the company commits to acquire or dispose of the asset.
Debt instruments: the classification of financial assets that are debt instruments is based on the Group's business model for managing the asset and the nature of the asset's contractual cash flows.
The instruments are classified into:
The Group's assets in the form of debt instruments are classified at amortised cost. Financial assets classified at amortised cost are initially measured at fair value with the addition of transaction costs. Accounts receivable are initially recognised at the invoiced value. After the first accounting opportunity, the assets are valued according to the effective interest method. Assets classified at amortised cost are held according to the business model to collect contractual cash flows that are only payments of principal amounts and interest on the outstanding capital amount. The assets are covered by a loss reserve for expected loan losses.
Equity instruments are classified at fair value through profit or loss with the exception if they are not held for trading, as an irrevocable choice can be made to classify them at fair value through other comprehensive income without subsequent reclassification to the result.
The Group classifies equity instruments at fair value through profit and loss. Derivative instruments are classified at fair value through profit and loss, except in cases where hedge accounting is applied.
Financial liabilities are classified at amortised cost, with the exception of derivatives and contingent additional purchase price. Financial liabilities recognised at amortised cost are initially measured at fair value including transaction costs. After the first accounting date, they are valued at accrued acquisition value according to the effective interest method. Derivative instruments are classified at fair value through profit or loss, except in cases where hedge accounting is applied. Supplementary consideration is reported at fair value in the result.
Financial instruments that are not derivatives are initially recognised at cost corresponding to the instrument's fair value plus transaction costs for all financial instruments except for those belonging to the category financial asset which is reported at fair value via the income statement, which is reported at fair value excluding transaction costs. A financial instrument is classified on initial recognition based on the purpose for which the instrument was acquired. The classification determines how the financial instrument is valued after the first accounting opportunity as described below.
Loans and receivables are financial assets that are not derivative instruments, which have fixed or determinable payments and which are not quoted on an active market. These assets are measured at amortised cost according to the effective interest method.
Trade receivables are recognised at the amount that is expected to be received less doubtful debts, which are assessed individually. Trade receivables have short expected maturities, which is why the value of each receivable is carried at its nominal amount without discounting. Impairment losses on trade receivables are recognised in operating expenses.
Receivables with expected maturities of more than one year are classified as non-current receivables and those with shorter maturities are classified as other receivables.
Financial assets measured at fair value through profit or loss are divided into two subcategories: Financial assets held for trading as well as financial assets identified at initial recognition as belonging to this category. Financial assets held for trading are defined as financial assets acquired principally for the purpose of selling or repurchasing in the short-term.
Assets in this category are measured initially and in subsequent financial statements at fair value. All changes in value arising are recognised in profit or loss.
Financial liabilities are measured at amortised cost. Accrued cost is determined on the basis of the effective interest rate measured when the liability was carried. This means that surplus and deficit values, as well as direct issue expenses, are allocated over the term of the liability Repurchases of own bonds below nominal value are recognised in other revenue. Trade payables have short expected maturities and are measured at their nominal value without discounting.
Cash and cash equivalents consist of cash in hand and directly accessible balances at banks and similar institutions.
Property, plant and equipment is recognised as an asset in the balance sheet if it is probable that the future economic benefits will accrue to Tradedoubler and the cost of the asset can be reliably measured. The cost of acquisition is defined as the purchase price and the costs of putting the asset in place.
Property, plant and equipment is recognised in the group at cost less accumulated depreciation and any impairment losses. Additional expenditure is added at cost only if it is probable that the future economic benefit associated with the asset will increase. All other expenditure is expensed.
Property, plant and equipment consisting of units with different useful lives are treated as separate items of property, plant and equipment.
The carrying amount of an item of property, plant and equipment is derecognised on retirement or disposal or when no future economic benefits can be expected from its use. Gains or losses arising from disposal or retirement of an asset consist of the difference between the selling price and the asset's carrying amount less directly related selling expenses. Gains and losses are recognised as other operating income/ expenses.
From 1 of January 2019 has IFRS 16 Leases replaced IAS 17. According to the new standard shall the leasee account for the commitment to pay leasing fees as a lease liability, and the right to use the underlying assets as a asset in the balance sheet. Depreciation of the asset is recognised in the income statement as well as an interest on the lease liability. Leasing fees paid are reported partly as payment of interest and partly as amortisation of the lease liability, which affect the financial position and key ratios.
The introduction of IFRS 16 has no effect on the total cash flow. The
standard is exempting lease agreements with lease period shorter than 12 months or if there is an underlying asset of low value. The Group applies this standard for the leasing contracts retroactively with the accumulated effect of initial application of the standard on the first day of application; January 1, 2019. This means that comparative figures will not be adjusted for periods before 2019. A marginal loan interest rate has been set per country and maturity for discounting is identified from leasing agreements.
The right of use period has been assessed on the basis of knowledge of the duration of the underlying agreement as well as termination and extension clauses. The applied leasing period is equal to the period during which the agreement cannot be terminated, or based on management's assessment that the leasing agreement will be extended. The rights of use are depreciated from the first date of validity until the earliest of the end of the lease and the end of the asset's useful life. The Group distributes the contract's compensation amount to the various leasing parts and calculates those parts of a lease that do not actually refer to leasing. The leasing agreements that covered by the new standard are operating leases in respect of rental of office space. Leasing agreements for low-valued assets mainly apply to computer and office equipment, certain vehicles and machines and others of lesser value.
The transition to IFRS 16 means that leases previously classified as operational leasing in accordance with IAS 17 are instead recognised as rights of use and leasing liabilities.
Depreciation takes place on a straight-line basis over the estimated useful life of the asset.
| Equipment | Three to five years |
|---|---|
An assessment is made of an asset's residual value and useful life every year.
Goodwill is measured at cost less any accumulated impairment losses. Goodwill is distributed to cash-generating units and is tested at least once annually for any impairment need. Impairment testing is carried out more frequently if there are indications that the unit may need to be impaired. If the recoverable amount of the cash-generating unit is lower than the unit's carrying amount, the write-down is distributed to any goodwill's carrying amount distributed to the cash-generating unit proportionally.
In business combinations where the cost of acquisition is less than the net value of acquired assets, and liabilities and contingent liabilities assumed, the difference is recognised directly in net profit.
Expenses for new or substantially improved products or processes are carried as assets in the balance sheet only if the product or process is technologically or commercially viable, the group has sufficient resources to complete development and that it is possible to estimate future revenues in a reliable manner. Capitalisation may occur when a new platform or functionality is developed and includes costs of materials, direct work and a reasonable share of the indirect costs. System maintenance costs are expensed as they arise. Capitalised development expenses are recognised at cost less accumulated depreciation and impairment losses.
This category includes system tools for customer management and finance among other things. These intangible assets are deemed to have a longer useful life than those within the Development category, mainly due to a longer product lifecycle in the market. In this category, capitalised expenditure is also recognised at cost less accumulated amortisation and impairment losses.
Additional costs for capitalised intangible assets are recognised as an asset in the balance sheet only when they increase the future economic benefits of the specific asset to which they relate to. All other costs are expensed as they arise.
Amortisation is recognised in the income statement on a straight-line basis over the estimated useful lives of the intangible assets, provided such useful lives are determinable. Goodwill and intangible assets with an indeterminable useful life are tested for impairment on an annual basis and as soon as there are indications suggesting that the asset in question has decreased in value. Intangible assets that may be amortised are amortised from the date from which they are available for use. The estimated useful lives are:
| Development | Three years |
|---|---|
| Administration och support | Five years |
The carrying amounts of the group's assets are tested on each balance sheet date in order to determine if there is any indication of an impairment need. IAS 36 is applied for testing impairment needs of assets other than financial assets, which are tested in accordance with IFRS 9, assets for sale and disposal groups, which are tested in line with IFRS 5, and deferred tax receivables. For exempted assets, as above, the carrying amount is tested in accordance with each standard.
If there is an indication for impairment on goodwill, intangible or tangible assets with indeterminate period of use and intangible assets not in use, the asset's recoverable amount is calculated using IAS 36. If it is impossible to determine significant independent cash flows to a single asset, the assets should be grouped, in conjunction with impairment testing, at the lowest level at which it is possible to identify significant independent cash flows – a so-called cash-generating unit
An impairment loss is recognised when the carrying amount of an asset or cash-generating unit (group of units) exceeds its recoverable amount. An impairment loss is charged to the income statement.
The recoverable amount is the higher of the fair value less selling expenses and value in use. In calculating value in use, future cash flows are discounted using a discounting factor that takes into account the risk-free rate of interest and the risk relating to the specific asset.
Goodwill consists of the amount by which the acquisition cost exceeds the fair value of the net assets acquired by the group in conjunction with a company acquisition or acquisition of assets and liabilities Goodwill arising from the acquisition of an associated company is included in the carrying amount for the associated company. Goodwill is allocated to cash-generating units upon acquisition and is not amortised, but is tested annually to identify any impairment needs. Goodwill is measured at acquisition cost less any accumulated impairment losses. Impairments of goodwill are not reversed. The recognised revenue from the disposal of a group company includes the remaining carrying amount of the goodwill attributable to the divested unit.
In connection with quarterly financial reporting, Tradedoubler evaluates whether there is objective evidence that a financial asset or group of assets is in need of impairment. Objective evidence consists of observable conditions that have occurred and which have a negative impact on the possibility of recovering the acquisition value.
The group's financial assets and contract assets, in addition to those which is classified at fair value through profit or loss, is subject to writedowns for expected loan losses. Write-downs for loan losses according to IFRS 9 are forward-looking and a loss reserve is made when there is an exposure to credit risk, usually at the first accounting date. Expected credit losses reflect the present value of all cash flow deficits attributable to default either for the next 12 months or for the expected remaining term of the financial instrument, depending on the asset class and on the credit deterioration since the first accounting date. Expected credit losses reflect an objective, probability-weighted outcome that takes into account most scenarios based on reasonable and verifiable forecasts. The valuation of expected loan losses takes into account any collateral and other credit enhancements in the form of guarantees.
The simplified model is applied for accounts receivable and contract assets. A loss reserve is reported, in the simplified model, for the expected residual maturity of the asset or asset.
For other items covered by expected loan losses, an impairment model with three stages is applied. Initially, as well as on each balance sheet date, a loss reserve for the next 12 months is reported, or for a shorter period of time depending on the remaining maturity (stage 1).
If there has been a significant increase in credit risk since the first accounting date, a loss reserve for the asset's remaining maturity (stage 2) is reported. For assets that are deemed to be credit impaired, provisions for continued loan losses for the remaining maturity (stage 3) are still reserved. For credit-impaired assets and receivables, the calculation of interest income is based on the asset's carrying amount, net of loss reserves, as opposed to the gross amount as in the previous stages.
The financial assets are recognised in the balance sheet at amortised cost, i.e net of gross value and loss reserve. Changes in the loss reserve are reported in the income statement.
An impairment loss is reversed if there is an indication that an impairment need no longer exists and a change has occurred in the assumptions that provided the basis for the measurement of the recoverable amount. A reversal is only made to the extent that the carrying amount of the asset after reversal does not exceed the carrying amount that would have been recognised, less amortisation where appropriate, if no impairment had been made. Impairment of goodwill is never reversed.
The calculation of earnings per share is based on the group's net profit for the year attributable to the parent company's shareholders and on the weighted average number of shares in issue during the year. In the calculation of earnings per share after dilution, the profit and the average number of shares are adjusted to take account of the effects of dilutive potential ordinary shares, which can consist of options issued to employees.
The cash flow analysis is prepared according to the indirect method. The reported cash flow only includes transactions that involve inflows or outflows. Cash and bank balances are classified as cash and cash equivalents.
The group mainly operates defined contribution pension plans. In defined contribution plans, Tradedoubler pays fixed fees to an insurance company and has no obligation to pay further amounts Obligations in respect of charges for defined contribution plans are recognised as an expense in the income statement as they arise.
A provision is recognised in conjunction with the termination of employment only if it is evident that Tradedoubler is obligated, without any realistic possibility of withdrawal, by a formal detailed plan to terminate employment before the normal retirement date. When remuneration is offered to encourage voluntary retirement, it is recognised as a cost if it is likely that the offer will be accepted and the number of employees accepting the offer can be reliably estimated.
The company's share programme allowed selected persons to receive shares in Reworld Media S.A (majority owner in Tradedoubler AB). The fair value of the shares has been recognised as a personnel cost in the profit and loss account. The fair value of the shares is estimated based on generally accepted valuation models taking into consideration the terms and conditions prevailing on the allotment date, including the closing price, statistics on the volatility of the share price and estimated future dividends. The costs are allocated during the vesting period.
During every year-end closing, an assessment is made as to whether, and to what degree, the vesting conditions will be fulfilled. If this assessment results in an estimate of a lower number of shares being earned during the vesting period, previously expensed amounts are reversed in the income statement. This means that in those cases where the vesting requirements are not fulfilled, no costs will be recognised in the income statement, as viewed over the entire vesting period.
Social security contributions attributable to the share programme are recognised as a personnel cost and a personnel-related liability, respectively. Provisions for social security contributions are calculated using the best estimate at each closing date of the group's future liability for social security contributions. The provision for social security contributions is allocated over the vesting period. The calculations are based on the fair value of the shares on each closing date. The provision for social security contributions also includes social security contributions for equity instruments.
Provisions are recognised in the balance sheet when the group has an existing legal or informal obligation as a result of past events, and it is probable that an outflow of financial resources will be required to settle the obligation and that the amount can be reliably estimated. Provisions include leases where the outlay exceeds the economic benefits. In cases where the effect of payment timing is significant, provisions are calculated by discounting the expected future cash flow at an interest rate before tax that reflects current market assessments of the time value of money, and if applicable, the risks specific to the liability.
Income taxes in the income statement include both current tax and deferred tax. Taxes are recognised in the income statement except where the underlying transaction is recognised in other comprehensive income or directly against equity.
Current tax is tax that shall be paid or received in respect of the current year, using the tax rates which, have been enacted or which in practice were enacted on the balance sheet date. This also includes adjustments of current tax relating to previous periods.
Deferred taxes are estimated in accordance with the liability method, based on temporary differences between the tax bases of assets and liabilities and their carrying amounts. The following temporary differences not taken into consideration; temporary differences arising on the initial recognition of goodwill, the initial recognition of assets and liabilities that are not business combinations and, which on the transaction date did not affect the recognised or taxable result. Furthermore, temporary differences are not taken into consideration that are attributable to investments in subsidiaries and associated companies and, which are not expected to be reversed within the foreseeable future. The measurement of deferred tax is based on how the carrying amounts of assets or liabilities are expected to be realised or settled. Deferred tax is measured using the tax rates and tax
regulations which, have been enacted or which in practice were enacted on the balance sheet date.
Deferred tax assets in respect of deductible temporary differences and loss carry-forwards are only recognised to the extent that it is probable that they can be utilised. The value of deferred tax assets is reduced when it is no longer considered probable that they can be utilised. Any additional income tax arising on dividends is recognised at the same time as the dividend is recognised as a liability.
A contingent liability is recognised when there is a possible obligation arising from past events and whose occurrence can only be confirmed by one or more uncertain future events or when an obligation arises which cannot be recognised as a liability or provision as it is not probable that an outflow of resources will be required, or the size of the obligation cannot be estimated with sufficient reliability.
The preparation of accounts and the application of accounting policies is often based on the management's judgements and on estimates and assumptions that are deemed to be reasonable at the time the judgement was made. However, the result may be different using different judgements, assumptions and estimates and events can occur which can require a significant adjustment of the carrying amount of the asset or liability in question. The accounting policies whose application is based on such judgements are described below and the most important sources of uncertainty in the estimates that the company believes may have the most important impact on the group's reported results and financial position. The information in this note refers to those areas, where risk of future adjustments of carrying amounts is greatest.
Testing of goodwill is based on estimates and assumptions regarding the future. As the company conducts operations in a relatively young industry, which is characterised by development and constant changes, these assumptions are an uncertainty factor.
The basis for Tradedoubler's goodwill impairment test was a 5-year discounted cash flow analysis per cash generating unit (segment), which for 2020 are DACH, Nordics, South, France & Benelux and UK & Ireland. In order to determine expected future cash flows as the basis for calculations, assumptions are med on important parameters such as sales growth and gross margins for the company's various business flows and future cost levels. The present value calculation is further based on a so-called WACC which is based on specific valuation technical assumptions.
Neither 2020 impairment nor 2019 resulted in any write-downs. Further information on the impairment test is provided in Note C13.
Development expenses are capitalised in the balance sheet when certain criteria are met. These criteria include, among other things, to assess the the development is technically and commercially viable and that it is possible to estimate future revenues in a reliable manner. In Note C1 a more detailed description of these criteria can be found. Capitalised development are expensed on a straight-line basis. In order to determine the depreciation period assumptions are made about the activated development market longevity. Impairment is performed annually. The impairment is performed in the same way as described for goodwill above, based on the present value of expected future cash flows for each enabled development project.
In 2020, write-downs of SEK 3 M were made in addition to ordinary depreciation according to plan. No other write-downs in addition to these have been identified. See Note C13 for more information.
The integrated nature of Tradedoubler's operations can give rise to complexity and delays in assessing the company's tax position and can lead to Tradedoubler facing tax audits which in some cases result in disputes with tax authorities. During these tax audits, local tax authorities may question or challenge the Group's tax positions. These disputes with tax authorities can lead to lengthy legal proceedings. The outcome of these proceedings may be difficult to assess and there is no guarantee that a settlement of such proceedings wouldn't have a significant effect on the income statement and the statement of financial position of the company. For further information about ongoing tax cases see note 11.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Transaction revenue | 1,210,842 | 1,183,087 |
| Fixed revenue | 17,834 | 22,237 |
| Net sales | 1,228,676 | 1,205,324 |
| Other revenue | ||
| Other revenue | 2,755 | 3,366 |
| Governmental grants | 4,017 | – |
| Total other revenue | 6,772 | 3,366 |
| Total Revenue | 1,235,448 | 1,208,690 |
Transaction revenues are mainly generated within the framework of various advertising campaigns, where each campaign constitutes a performance commitment. Advertisers only pay a success-based fee to the publisher if the advertising material has actually been used and resulted in the desired transaction for the advertiser. The transaction is then validated by the advertiser and Tradedoubler then reports the revenue as the performance commitment is considered fulfilled.
Tradedoubler connects advertisers and publishers, who have no contractual obligations to each other. Tradedoubler provides the advertisers with expertise, insights, campaign management, among other services, and has the main responsibility for the performance between the parties. The assessment according to the criteria in IFRS 15 is that transaction income must be reported as gross income. Therefore, transaction revenue also includes publishers' remuneration earned through Tradedoubler's network.
In cases where advertisers use Tradedoubler's white-label solution, ie use Tradedoubler's technology to manage their own network, customers pay a fixed or variable fee to Tradedoubler, and in some cases the publisher compensation that Tradedoubler later pays to the publishers. This publisher compensation is not included in net sales as Tradedoubler is not considered to have a sufficiently large influence on the outcome, which is one of the criteria for gross revenue recognition in accordance with IFRS 15.
Invoicing normally takes place in the same month as the transactions have been validated and with an average credit period of approximately 30 days. In some cases, an advance payment is received for the expected transaction volume for an agreed period.
Other revenue mainly refers to rental income and governmental support. In 2020, the Group received governmental support in several countries related to short-term work in connection with the pandemic. These amounted to SEK 4,017 thousand in 2020.
| SEK ´000 | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|
| Receivables | 313,177 | 340,047 |
| Liabilities | 32,995 | 34,644 |
| Total | 346,172 | 374,692 |
Receivables pertain to accounts receivable of SEK 295,762 (329,309) thousand and accrued income of SEK 17,415 (10,738) thousand. Both accounts receivable and accrued income relate to receivables from customers where Tradedoubler has fulfilled its performance commitment and has an unconditional right to payment. Contract liabilities relate to advances from customers.
All contractual liabilities at the beginning of each financial year refer to performance commitments that have been fulfilled in their entirety during the period in question financial year.
Tradedoubler had five segments during 2019. These segments consisted of DACH, France & Benelux, Nordics, South, and UK & Ireland.
The respective segments consisted of the following markets;
Identification of segments is based on the internal reporting to the chief operating decision-maker. Reporting and follow up took place based on the geographical regions that served as the basis of division for the segment reporting.
The group's chief operating decision-maker continually monitored total revenue and EBITDA per segment.
Intra-group transfer prices between different segments are set based on the "arm's length" principle, in other words, between parties that are independent of each other, well informed and with an interest in completing the transactions.
Operating profit (EBIT) for the parent company, central functions and eliminations are allocated to the segments.
The same accounting policies as for the group are applied in the segment reporting.
Tradedoubler has no customers which account for revenues of more than 10 per cent of the company's total revenues for the years 2020 or 2019.
| Total revenue | EBITDA* | |||
|---|---|---|---|---|
| SEK ´000 | 2020 | 2019 | 2020 | 2019 |
| Segment DACH | 200,188 | 158,859 | 18,376 | 12,128 |
| Segment France & Benelux | 261,635 | 309,691 | 25,643 | 31,018 |
| Segment Nordics | 428,897 | 343,038 | 30,754 | 23,472 |
| Segment South | 161,949 | 169,206 | 20,124 | 20,969 |
| Segment UK & Ireland | 182,779 | 227,896 | 12,455 | 9,150 |
| Total Group management and support functions |
1,235,448 1,208,690 – |
– | 107,351 -45,342 |
96,738 -52,224 |
| Total | 1,235,448 1,208,690 | 62,009 | 44,514 |
* The difference between EBITDA above of SEK 62,009 (44,514) thousand and operating profit in the consolidated income statement consists of depreciation and write-downs amounting to SEK 37,090 (36,328) thousand.
| Total revenue | Fixed assets | |||
|---|---|---|---|---|
| SEK ´000 | 2020 | 2019 | 2020 | 2019 |
| Sweden | 144,183 | 115,061 | 350,449 | 377,149 |
| UK | 185,392 | 229,259 | 3,248 | 6,898 |
| France | 211,952 | 254,731 | 8,054 | 11,009 |
| Germany | 180,961 | 139,134 | 20,757 | 882 |
| Italy | 69,925 | 81,572 | 2,954 | 1,849 |
| Spain | 94,080 | 89,381 | 13,672 | 14,805 |
| Poland | 215,881 | 156,188 | 14,197 | 10,795 |
| Netherlands | 54,368 | 57,163 | 3,211 | 2,260 |
| Other | 78,706 | 86,201 | 706 | 1,374 |
| Total | 1,235,448 1,208,690 | 417,248 | 427,021 |
Revenue from external customers is recognised per geographical area in which the revenue was generated.
For geographical information regarding goodwill, see Note C13. In addition to goodwill Tradedoubler's other intangible assets are mainly accounted for in the parent company, for more information see Note P12 Intangible assets in notes to the Parent company accounts.
| 2020 | 2019 | |||
|---|---|---|---|---|
| men (%) | men (%) | |||
| Parent company | ||||
| Sweden | 35 | 50 | 40 | 42 |
| Subsidiaries | ||||
| Denmark | 1 | 33 | 1 | 0 |
| France | 40 | 35 | 41 | 27 |
| Italy | 22 | 43 | 23 | 42 |
| Netherlands | 8 | 73 | 8 | 77 |
| Poland | 44 | 46 | 43 | 45 |
| Switzerland | 0 | 3 | 100 | |
| Spain | 24 | 26 | 23 | 31 |
| UK | 27 | 55 | 33 | 44 |
| Sweden | 18 | 50 | 27 | 38 |
| Germany | 19 | 35 | 21 | 34 |
| Singapore | 0 | 1 | 100 | |
| Total subsidiaries | 201 | 44 | 222 | 40 |
| Total group | 236 | 44 | 262 | 40 |
*Including permanent and temporary employees
| Share women (%) | 2020 | 2019 |
|---|---|---|
| The Board of Directors | 0.0 | 0.0 |
| President and other senior executives | 0.0 | 0.0 |
| Salaries and other remuneration |
Social fees (of which pension) |
Salaries and other remuneration |
Social fees (of which pension) |
|
|---|---|---|---|---|
| SEK ´000 | 2020 | 2019 | ||
| Parent company | 26,841 | 8,807 | 26,837 | 8,979 |
| (1,844) | (1,730) | |||
| Subsidiaries | 88,427 | 21,450 | 103,789 | 25,164 |
| (2,572) | (2,837) | |||
| Total | 115,267 | 30,257 | 130,625 | 34,143 |
Activated personell-related development costs in 2020 amounted to SEK 19 M (18).
| Total | 147,555 | 164,768 |
|---|---|---|
| 30,884 | 34,143 | |
| Social security contributions attributable to share-based payments |
627 | – |
| Social security contributions | 25,841 | 29,575 |
| Pension expenses | 4,416 | 4,568 |
| 116,671 | 130,625 | |
| Share-based payments | 1,404 | – |
| Salaries and remuneration | 115,267 | 130,625 |
| SEK ´000 | 2020 | 2019 |
| 2020 | 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Remuneration and other benefits, (SEK ´000) |
Basic salary, other remuneration, directors' fees1 |
Variable remune ration |
Long-term incentive programs |
Pension obliga tions |
Total | Basic salary, other remuneration, directors' fees1 |
Variable remune ration |
Long-term incentive programs |
Pension obliga tions |
Total |
| The Board of Directors | ||||||||||
| Pascal Chevalier | 180 | – | – | – | 180 | 763 | – | – | – | 763 |
| Gautier Normand | 180 | – | – | – | 180 | 763 | – | – | – | 763 |
| Jérémy Parola | 180 | – | – | – | 180 | 180 | – | – | – | 180 |
| Erik Siekmann | 180 | – | – | – | 180 | 180 | – | – | – | 180 |
| Nils Carlsson | 180 | – | – | – | 180 | 180 | – | – | – | 180 |
| Matthias Stadelmeyer (CEO) | 3,395 | 780 | 556 | 81 | 4,812 | 3,428 | 318 | – | 79 | 3,825 |
| Other company | ||||||||||
| management | 2,736 | 590 | 556 | 290 | 4,175 | 2,658 | 314 | – | 295 | 3,267 |
| Total | 7,031 | 1,373 | 1,112 | 370 | 9,886 | 8,152 | 631 | – | 374 | 9,157 |
1 Directors' fees are periodised based on the calendar year.
The annual general meeting 2020 approved the following remuneration to the board of directors: SEK 180,000 to each of the other board members, including the chairman of the board, elected by the annual general meeting who are not employed in Tradedoubler.
The annual general meeting 2020 resolved on the following guidelines for remuneration to company management, which is defined as the managing director and other members of the Senior Leadership Team. The total remuneration shall be competitive in the local market in which the employee is based in order to attract, motivate and retain skilled employees. Individual remuneration should be based on the employee's experience, skills, responsibilities and performance.
Members of the Board of Directors, elected at General Meetings, may in certain cases receive a fee for services performed within their respective areas of expertise, outside of their Board of Directors duties. Compensation for these services shall be paid at market terms and be approved by the Board of Directors.
The total remuneration shall be competitive on the local market where the employee is based in order to attract, motivate and retain highly skilled employees. Individual remuneration shall be based on the employee's experience, competence, responsibility and performance.
Remuneration under employments subject to other rules than Swedish may be duly adjusted to comply with mandatory rules or local practice, taking into account the overall purpose of these guidelines.
Variable salary covered by these guidelines shall aim at promoting the company's business strategy and long-term interests, including its sustainability.
Total remuneration can be based on four main components; base salary, variable salary, pension benefits and other benefits. Additionally, the General Meeting may – irrespective of these guidelines – resolve on, among other things, share-related or share price-related long-term incentive programs.
Base salary: The base salary shall be in line with local market conditions and shall be based on experience, competence, responsibilitt and performance. Variable salary shall be in line with local market conditions and reward growth and profitability and have a uniting effect for the group. It should be based on pre-defined measurable targets, both quantiative and qualitative, agreed in writing with the employee. There shall be a maximum for the variable salary, normally not more than 50 per cent of the base salary.
Variable salary: Variable salary shall be in line with local market conditions and reward growth and profitability and have a uniting effect for the group. It should be based on pre-defined measurable targets, both quantiative and qualitative, agreed in writing with the employee. There shall be a maximum for the variable salary, normally not more than 50 per cent of the base salary.
Pension: Pension benefits may be offered to the company management, depending on local market conditions. Management based in Sweden is offered a benefit that, essentially, corresponds to the so called ITP plan.
Notice and severance payment: A mutual termination period of 3-9 months shall apply for the company management. Severance payment, if any, shall not exceed a sum equal to 12 months base salary if the company terminates the employment. If the employee terminates the employment he/she should normally not be entitled to any severance payment.
Long-term incentive programmes: Any share and share price related incentive programmes related to the Tradedoubler share shall be approved by a General meeting.
Other benefits: Other benefints such as company cars should have a limited value in relation to the total compensation.
Matters regarding the terms of employment for the managing director are to be decided by the board of directors. The managing director decides the terms of employment for the other company management after approval by the remuneration committee.
Members of the board of directors, elected at General meetings, may in certain cases receive a fee for services performed within their respective areas of expertise, outside of their board of directors duties. Compensation for these services shall be paid at markets terms and be approved by the board of directors.
The board of directors or the remuneration committee may deviate from these priniples if special reasons are at hand in an individual case.
The aim of Tradedoubler's remuneration policy is to offer fair, competitive, market-based remuneration that promotes recruitment and retention of skilled employees.
Pension benefits can be offered to certain members of company management depending on local market conditions. For employees based in Sweden, a solution is offered that mainly corresponds to the ITP plan. For foreign employees, the pension benefit may not exceed 50 percent of the fixed salary.
Tradedoubler operates a performance- and results-based annual programme for variable remuneration for employees within the group. Various quantitative and qualitative performance- and results-based targets are set for different occupational categories, based on company-wide, and regional targets for the employees. The company management receives variable remuneration which is mainly linked to the group's financial performance. The variable remuneration has a ceiling. The ceiling lies in the range of between 10 and 50 per cent of the fixed salary for the majority of employees. For the group management, the variable remuneration may amount to a maximum of 50 per cent of the fixed salary.
Variable remuneration is paid annually in arrears, however, portions of the variable salary are determined and disbursed on a quarterly basis for employees within the occupational categories – sales and customer service.
During 2020, SEK 10.1 M (8.4) including social security contributions was expensed for the performance- and results-based programme for variable remuneration.
In 2020, three employees in leading positions in Tradedoubler took part in the main owner Reworld Media's share program. A total of 200,859 share options have been granted to the three employees. The conditions of the share program are that the three employees will be allotted half of the shares if the employee is still employed within Tradedoubler 27 September 2021. The remaining shares will be allotted if the employee is still employed within Tradedoubler on 27 September 2022. Reworld Media's share price was EUR 1.9 on the grant date, corresponding to approximately SEK 20. The value of these shares on the allotment date amounted to EUR 381,632, or SEK 4,022 thousand. This amount is reported as an expense on an ongoing basis during the share program's validity period and a reservation for social security contributions is imposed based on the prevailing share price on the balance sheet date. During the year, the reported costs of the share program amounted to SEK 2,031 thousand, of which debt for social security contributions amounted to SEK 627 thousand.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Personnel expense (including social social security contributions) arising from share based remuneration |
2,031 | – |
| Total personnel expense arising from | ||
| share-based remuneration | 2,031 | – |
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| EY | ||
| Audit assignments | 3,707 | 3,448 |
| Tax services | 30 | 193 |
| Other assignments | 845 | 479 |
| Other auditors | ||
| Audit assignments | 339 | 215 |
| Tax services | – | – |
| Other assignments | – | – |
| Total | 4,921 | 4,335 |
Audit assignments refers to the examination of the annual accounts, the consolidated accounts and accounting records as well as the administration of the board of directors and the CEO, other duties that the Company´s auditors are obliged to perform as well as advice or other assistance arising from observations during such examination and implementation of such duties. In addition, the auditor reviewed the corporate governance report and the sustainability report. The auditor has also reviewed the interim report for the period January– June 2020 and has been retained for certain advice, most of which pertained to audit-related consultations regarding accounting and tax matters.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Remuneration cost to publishers | 980,887 | 944,259 |
| Employee costs | 135,324 | 157,147 |
| Depreciation and amortisation | 37,012 | 36,328 |
| Other operating costs | 57,307 | 62,770 |
| Total | 1,210,529 | 1,200,504 |
| Right-of-use | |
|---|---|
| assets for rented | |
| SEK ´000 | premises |
| Balance at jan 1, 2019 | 46,014 |
| New contracts | 15,444 |
| Terminated Contracts | -14,778 |
| Depreciation | -14,771 |
| Translation difference | 207 |
| Balance at dec 31, 2019 | 32,116 |
| SEK ´000 | Right-of-use assets for rented premises |
|---|---|
| Balance at jan 1, 2020 | 32,116 |
| New contracts | 26,362 |
| Terminated Contracts | -604 |
| Depreciation | -15,364 |
| Translation difference | -1,975 |
| Balance at dec 31, 2020 | 40,535 |
1 In 2019 and 2020, all leasing agreements for machinery, equipment, and other items were of low value or to have a shorter term than 12 months.
Non-terminable lease payments amount to:
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Within one year | 13,757 | 16,559 |
| Between one and five years | 22,656 | 17,928 |
| More than five years | 14,404 | 3,556 |
| 50,817 | 38,043 |
The leases in the group are mainly related to rent for premises. Revenues for subleasing of office space in Sweden, and Germany amounted to SEK 1,015 (1,131) K in 2020.
| SEK ´000 | Leasing liabilities for rented premises |
|---|---|
| Balance at jan 1, 2019 | 46,014 |
| New contracts | 15,444 |
| Amortisations | -13,890 |
| Terminated Contracts | -16,972 |
| Balance at dec 31, 2019 | 30,596 |
| SEK ´000 | Leasing liabilities for rented premises |
| Balance at jan 1, 2020 | 30,596 |
| New contracts | 26,362 |
| Amortisations | -15,405 |
| Terminated Contracts | -1,967 |
| Balance at dec 31, 2020 |
| 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|
| SEK ´000 | Leasing costs for rented premises |
Other leasing costs1 |
Total | Leasing costs for rented premises |
Other leasing costs1 |
Total | |
| Depreciation | -15,364 | – | -15,364 | -14,771 | – | -14,771 | |
| Interest related to lease liabilities |
-1,274 | – | -1,274 | -1,730 | – | -1,730 | |
| Costs related to short term leases |
– | – | – | -383 | – | -383 | |
| Costs related to leases of low value |
– | -371 | -371 | – | -815 | -815 | |
| Total Leasing costs | -16,638 | -371 | -17,009 | -16,884 | -815 | -17,699 | |
| Total cash flow related to leasing costs |
-15,405 | -371 | -15,776 | -14,273 | -815 | -15,088 |
1 In 2019 and 2020, all leasing agreements for machinery, equipment, and other items were of low value or to have a shorter term than 12 months.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Interest income on bank balances and short-term | ||
| investments | 147 | 638 |
| Interest income, other | 349 | 191 |
| Other financial income | 2 | – |
| Financial income | 498 | 829 |
| Interest expenses on financial liabilities measured | ||
| at amortised cost | -7,027 | -12,668 |
| Interest expense, other | -4 | -29 |
| Unrealised result from revaluation of debt in | ||
| foreign currency | 4,771 | 3,193 |
| Changes in foreign exchange rates | -4,754 | -3,850 |
| Other financial costs | -1,752 | -4,349 |
| Financial expense | -8,766 | -17,703 |
| Net financial items | -8,268 | -16,874 |
The company's tax expense is divided into the following components:
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Current tax expense | ||
| Tax expense for the period | -7,170 | -3,185 |
| Tax expense related to previous periods | 6,523 | 232 |
| Total current tax expense | -648 | -2,952 |
| Deferred tax expense | ||
| Deferred tax in respect of temporary differences | 5,106 | -11 |
| Deferred tax expense due to utilisation of previous capitalised loss carryforwards for tax |
||
| purposes | -14,076 | -50 |
| Total deferred tax expense | -8,970 | -61 |
| Total | -9,618 | -3,014 |
The tax expense for the year can be reconciled to profit before tax according to the following:
| 2020 | 2019 | |||
|---|---|---|---|---|
| % | SEK ´000 | % | SEK ´000 | |
| Profit before tax | – | 16,651 | – | -8,688 |
| Tax according to applicable tax rate for parent company | 21.4 | -3,563 | 21.4 | 1,859 |
| Effect of other tax rates for foreign subsidiaries | 2.7 | -444 | -3.5 | -302 |
| Adjusted estimates for previous year's loss carryforwards | 45.1 | -7,510 | 2.7 | 232 |
| Non-deductible expenses | 32.8 | -5,464 | -39.0 | -3,385 |
| Non-taxable income | 2.7 | -458 | 11.0 | 956 |
| Increase of loss carryforwards for tax purposes without corresponding capitalisation of deferred tax expense |
1.4 | -241 | -28.3 | -2,463 |
| Utilisation of previously not capitalised loss carryforwards | -16.4 | 2,727 | 4.5 | 390 |
| Other* | -32.0 | 5,335 | -3.5 | -300 |
| Effective tax rate | 57.8 | -9,618 | -34.7 | -3,014 |
* Other in 2020 mainly refers to non-taxable income from temporary differences in Poland.
Deferred tax assets and tax liabilities are attributable to the following:
| Deferred tax assets | Deferred tax liabilities | Net | |||||
|---|---|---|---|---|---|---|---|
| SEK ´000 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |
| Loss carryforwards | 366 | 442 | – | – | 366 | 442 | |
| Other receivables | 54 | 65 | – | – | 54 | 65 | |
| Other liabilities | 9,756 | 5,523 | -1,523 | -1,492 | 8,233 | 4,031 | |
| Other non-current assets | 258 | 436 | – | – | 258 | 436 | |
| Other unused tax deductions1 | 12,257 | 26,510 | – | – | 12,257 | 26,510 | |
| Deferred tax assets and tax liabilities | 22,691 | 32,976 | -1,523 | -1,492 | 21,168 | 31,483 |
1 In 2007, Tradedoubler Ltd acquired all shares in IMW with the help of loans from Tradedoubler AB. HMRC (the English tax authority) has subsequently refused Tradedoubler Ltd a deduction for interest costs, with reference to British thin capitalisation rules. Tradedoubler AB has also declared interest income and thus arises In an application, Tradedoubler AB has requested that the Swedish Tax Agency initiate proceedings for an agreement with the British competent authority in order to eliminate the double taxation that has arisen.The total receivable amounted to SEK 14 M at the beginning of 2020. During the third quarter of 2020, the tax authorities in the United Kingdom and Sweden, reached a mutual agreement on double taxation. The outcome resulted in the tax effect being distributed equally between the two jurisdictions. Based on the final agreement between the competent authorities, a cash tax refund of approximately SEK 7 M was received for the parent company during the fourth quarter. The subsidiary in the UK is expected to receive a division between cash tax refunds of less than SEK 1 M and the remaining is received as unutilised tax deductions. This has resulted in a write-down of approximately SEK 7 M in 2020.
In 2018, Tradedoubler deposited SEK 12 M to the Spanish Tax Agency attributable to an ongoing tax case. The Spanish tax authorities have questioned certain tax deductions made by Tradedoubler within the framework of its transfer pricing policy. Tradedoubler estimates that this amount will be refunded.
| SEK ´000 | Capitalisation of loss carryforwards |
Other receivables |
Other liabilities |
Other non current assets |
Other unused tax deductions |
Deferred tax assets and tax liabilities |
|---|---|---|---|---|---|---|
| Balance at Jan 1, 2019 | 466 | 65 | 3,408 | 284 | 26,320 | 30,542 |
| Recognised via income statement | -32 | -2 | 579 | 140 | – | 685 |
| Reclassification | – | – | 4 | – | – | 4 |
| Translation difference | 8 | 2 | 40 | 12 | 190 | 252 |
| Balance at Dec 31, 2019 | 442 | 65 | 4,031 | 436 | 26,510 | 31,483 |
| Balance at Jan 1, 2020 | 442 | 65 | 4,031 | 436 | 26,510 | 31,483 |
| Recognised via income statement | -63 | -5 | 5,026 | -152 | -13,778 | -8,972 |
| Reclassification | – | – | 1 | – | – | 1 |
| Translation difference | -13 | -6 | -825 | -26 | -475 | -1 345 |
| Balance at Dec 31, 2020 | 366 | 54 | 8,233 | 258 | 12,257 | 21,168 |
Deductible temporary differences and loss carryforwards for tax purposes for which deferred tax assets have not been recognised in the income statement and balance sheet:
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Tax on loss carryforwards | 61,301 | 63,741 |
| Total | 61,301 | 63,741 |
The value for tax purposes of capital loss carryforwards of SEK 336 thousand and non-capital loss carryforwards of SEK 61,301 thousand (of which SEK 59,964 thousand is related to the parent company), have a perpetual term. Non-capital loss carryforwards relate to the assessment that is it uncertain whether these will be utilised in the near future.
| 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|
| SEK ´000 | Valued at amortised cost |
At fair value via the Profit & Loss |
Total carrying amount |
Valued at amortised cost |
At fair value via the Profit & Loss |
Total carrying amount |
|
| Shares and participation in other companies |
11,128 | 11,128 | 11,128 | 11,128 | |||
| Trade receivables | 295,762 | 295,762 | 329,309 | 329,309 | |||
| Accrued revenue | 17,415 | 17,415 | 10,738 | 10,738 | |||
| Cash and bank balances | 88,715 | 88,715 | 48,193 | 48,193 | |||
| Total financial assets | 401,892 | 11,128 | 413,020 | 388,240 | 11,128 | 399,368 | |
| Other interest-bearing debts | 118,404 | 118,404 | 134,213 | 134,213 | |||
| Leasing liabilities | 39,586 | 39,586 | 30,596 | 30,596 | |||
| Trade payables | 16,081 | 16,081 | 18,002 | 18,002 | |||
| Liabilities to publishers | 316,968 | 316,968 | 318,651 | 318,651 | |||
| Total financial liabilities | 491,039 | 491,039 | 501,462 | 501,462 |
Determination of fair value is as a valuation hierarchy consisting of three levels. The levels reflect the extent to which fair value is based on observable market data or assumptions.
Level 1 – fair value is determined based on the observed (unadjusted) quoted prices in active markets for identical assets and liabilities. Level 2 – fair value is determined using valuation models based on observable for the asset or liability other than quoted prices included in Level 1.
Level 3 – fair value is determined using valuation models where significant inputs are based on unobservable market data.
Shares and participations in other companies are valued at fair value via the income statement. The fair value of these has been determined in accordance with level 3.
Tradedoubler currently has no liabilities valued at fair value through the Profit & Loss statement. Regarding other financial assets and liabilities, the book value is assessed to correspond to fair value.
| Development | Administration & | ||||
|---|---|---|---|---|---|
| SEK ´000 | expenses | Support | Goodwill | Other | Total |
| Accumulated acquisition costs | |||||
| Opening balance at Jan 1, 2019 | 166,031 | 46,548 | 583,644 | 1,477 | 797,700 |
| Investments for the year | 21,475 | – | – | 168 | 21,643 |
| Translation difference | – | – | 19,812 | 201 | 20,014 |
| Closing balance at Dec 31, 2019 | 187,506 | 46,548 | 603,456 | 1,847 | 839,356 |
| Opening balance at Jan 1, 2020 | 187,506 | 46,548 | 603,456 | 1,847 | 839,356 |
| Investments for the year | 23,064 | – | – | 1,912 | 24,976 |
| Translation difference | – | – | -32,814 | -471 | -33,285 |
| Closing balance at Dec 31, 2020 | 210,570 | 46,548 | 570,642 | 3,288 | 831,048 |
| Accumulated amortisation and impairment losses |
|||||
| Opening balance at Jan 1, 2019 | -123,171 | -46,548 | -291,184 | -1,096 | -461,998 |
| Amortisation | -19,948 | – | – | -282 | -20,231 |
| Translation difference | – | – | -13,178 | -192 | -13,370 |
| Closing balance Dec 31, 2019 | -143,120 | -46,548 | -304,362 | -1,571 | -495,600 |
| Opening balance at Jan 1, 2020 | -143,120 | -46,548 | -304,362 | -1,571 | -495,600 |
| Amortisation | -20,615 | – | – | -326 | -20,941 |
| Translation difference | – | – | 19,858 | 379 | 20,237 |
| Closing balance Dec 31, 2020 | -163,735 | -46,548 | -284,504 | -1,518 | -496,304 |
| Carrying amounts | |||||
| At Jan 1, 2019 | 42,860 | – | 292,460 | 382 | 335,702 |
| At Dec 31, 2019 | 44,386 | – | 299,094 | 276 | 343,756 |
| At Dec 31, 2020 | 46,835 | – | 286,139 | 1,770 | 334,744 |
Amortisation of intangible assets is included in administrative expenses. All intangible assets, aside from goodwill, are amortised. For further information about depreciation methods, see Note C1 Accounting Policies.
"Goodwill is tested annually for impairment or as soon as there are indications of a decline in value. The impairment for 2020 has, as previous years, been performed in connection with the preparation of the year-end report and is based on a 5-year discounted cash flow analysis per cash generating unit (segment). Impairment in 2020 did not result in any writedown.
The future cash flows on which the valuation is based on is based primarly on assumptions of sales growth and gross margin development for the company's various business flows and future cost levels. During the forecast period the average yearly growth in gross profit has been assumed to be 5% and the average operating cost level is assumed to increase by 2% yearly. Estimated cash flows has been discounted with WACC based on a risk-free rate of interest plus a stock market premium. WACC before tax in the estimates for the six cashgenerating units on 31 December 2020 was 14.4(14.4) per cent. WACC after tax was 12.4 (12.4) per cent.
A sensitivity analysis shows that an increase in WACC after tax of 2 percentage units combined with a decreased growth rate after the forecast period of a half percentage unit, each of which is reasonably likely, indicates that there is margin for all segments.
For estimation of future revenue and growth both external and internal assumptions are used, which may differ from market to market. The short-term forecasts and market position have a major impact on the estimated future growth in the segments.
Tradedoubler's forecast period extends until 2025 and is based on a five year outlook. The growth rate in the forecast period is in line with the outlook for the market the company plans to address. The growth rate after the forecast period is set at 3 (3) per cent per year. It is an assessment of the then addressable markets estimated growth.
| SEK '000 | 2020 | 2019 |
|---|---|---|
| Nordics | 76,603 | 78,393 |
| UK & Ireland | 46,573 | 51,308 |
| France & Benelux | 47,954 | 49,846 |
| DACH | 64,238 | 66,773 |
| South | 26,745 | 27,800 |
| R-Advertising | 24,026 | 24,974 |
| Total | 286,139 | 299,094 |
In addition to goodwill, Tradedoubler's other intangible assets are mainly recorded in the parent company. See Note M12 Intangible assets in the notes to the parent company's financial statements.
| SEK ´000 | Equipment, tools, fixtures and fittings |
|---|---|
| Accumulated costs | |
| Opening balance Jan 1, 2019 | 33,075 |
| Investments | 470 |
| Sales/Disposals | -2,664 |
| Translation difference | 630 |
| Closing balance Dec 31, 2019 | 31,512 |
| Opening balance Jan 1, 2020 | 31,512 |
| Investments | 1,405 |
| Sales/Disposals | -189 |
| Translation difference | -1,073 |
| Closing balance Dec 31, 2020 | 31,655 |
| Accumulated depreciation | |
| Opening balance Jan 1, 2019 | -31,013 |
| Depreciation | -1,327 |
| Sales/Disposals | 2,648 |
| Translation difference | –593 |
| Closing balance Dec 31, 2019 | -30,285 |
| Opening balance Jan 1, 2020 | -30,285 |
| Depreciation | -706 |
| Sales/Disposals | 189 |
| Translation difference | 1,018 |
| Closing balance Dec 31, 2020 | -29,784 |
| Carrying amounts | |
| At Jan 1, 2019 | 2,062 |
| At Dec 31, 2019 | 1,227 |
| At Dec 31, 2020 | 1,871 |
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Rent of premises | 2,938 | 2,195 |
| Accrued income | 17,415 | 10,738 |
| Other | 2,393 | 1,414 |
| Total | 22,746 | 14,347 |
Share capital refers to the parent company's share capital. Each share carries one vote and those entitled to vote may vote for the full number of shares represented and owned without any restriction in voting rights. All shares carry equal rights to share in the company's assets and profits and in any surplus on liquidation.
At December 31, 2020, Tradedoubler AB had a share capital of SEK 18.4 M distributed among 45,927,449 shares, each share with a par value of SEK 0.40.
| Reconciliation of number of shares | Number of shares issued |
Issued share capital |
|---|---|---|
| Number of shares issued January 1, 2020* |
45,927,449 | 18,370,978 |
| Number of shares issued December 31, 2020* |
45,927,449 | 18,370,978 |
* Of which 790,760 shares are in own custody.
The translation reserve included all exchange differences that arise on translation of financial statements from foreign operations that have prepared their financial statements in another currency than the currency which the group's financial statements are presented in. The parent company and group present their financial statements in Swedish kronor (SEK).
Retained earnings including net profit for the year includes profits earned in the parent company and its subsidiaries. Previous allocations to the statutory reserve, excluding transferred share premium reserves, are included in this equity item.
The board and CEO will propose to Tradedoubler's Annual General Meeting 2021 that no dividend should be declared for 2020 in accordance with Tradedoubler's guidelines.
Tradedoubler has a policy of distributing at least 50 per cent of the profit after tax, provided that a suitable capital structure is maintained. Distribution may occur through share dividends, share redemption and share buyback.
Group capital under management is composed of shareholders' equity, which at the end of 2020 amounted to SEK 226 M (233) in total and loan capital, which at the end of 2020 amounted to SEK 118 (134). The measures of the company's capital structure used for control purposes are the interest coverage ratio, defined as profit before tax, plus interest expense, divided by interest expense; and the debt/ equity ratio, defined as the total of interest-bearing liabilities and pension provisions less cash and cash equivalents and interestbearing receivables, divided by shareholders' equity. The Group's goal in managing capital is to safeguard its survival and freedom of action and to ensure that shareholders receive a return on their investment. The distribution between shareholders' equity and loan capital should be such that a good balance is achieved between risk and return. If necessary, the capital structure is adapted to changing economic conditions and other markets factors. To maintain and adapt its capital structure, the Group can distribute funds, raise shareholder's equity by issuing new shares or capital contributions, or reduce or increase liabilities.
Totalt uppgår, vid utgången av 2020, innehav av egna aktier till 790 760 stamaktier.
Total holdings of own shares at the end of 2020 amounted to 790,760 ordinary shares.
| 2020 | 2019 | |
|---|---|---|
| Profit for the year attributable to the parent company's shareholders (SEK '000) |
7,033 | -11,702 |
| Weighted average number of outstanding ordinary shares before and after dilution |
||
| (thousands) | 45,137 | 45,072 |
| Earnings per share, before and after dilution | 0.16 | -0.26 |
In the third quarter 2019 Tradedoubler finalised an arms-length re-negotiation regarding its current loan agreement with the Company's principal owner Reworld Media S.A. The Company has increased its current facility with Reworld Media S.A from SEK 40 M to a total of SEK 138 M (EUR 13.45 M) to repay the Company's SEK 71 M loan to a Swedish credit institution.
The facility with Reworld Media S.A. is on market terms, and the majority of the facility has a maturity in 2026 with an fixed interest rate between 3 and 4 per cent. The loan has an amortisation structure where arround SEK 12 M will be amortised each year until 2024, where SEK 6,4 M will be amortised. The remaining loan will be repayed during 2025 and 2026. During 2020, Tradedoubler amortised SEK 12,6 M, and SEK 12,2 M will be amortised during 2021, and is therefore classified as short-term debt. The rest of the loan, adjusted for periodised arrangement fees, SEK 106.2 M, is classified as long-term debt. The loan contains one covenant which means that the loan will fall due in the event of a change in control of the company.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Opening balance Jan 1 | 134,213 | 109,337 |
| Cash flows | -12,584 | 32,663 |
| Translation difference | -4,771 | 3,193 |
| Other | 1,546 | -10,980 |
| Closing balance Dec 31 | 118,404 | 134,213 |
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Prepayments from clients | 32,995 | 34,644 |
| VAT | 14,747 | 10,969 |
| Withholding tax and social security contributions |
6,499 | 6,592 |
| Other | 20,659 | 14,835 |
| Total | 74,900 | 67,041 |
| 2020 | 2019 |
|---|---|
| 16,998 | 11,750 |
| 7,228 | 4,814 |
| 179 | 179 |
| 1,182 | 290 |
| 8,169 | 4,409 |
| 4,540 | 8,661 |
| 38,296 | 30,103 |
Tradedoubler's Finance policy has been drawn up for the purpose of balancing the group's financial risks. The policy is continually reviewed and is adopted by the board. Responsibility for the group's financial transactions and risks is tasked to the group's central financial department.
Cash and cash equivalents are mainly invested in bank accounts held with Tradedoubler's two main banks at the best possible bank interest.
| SEK ´000 | Total |
|---|---|
| Cash and cash equivalents | 88,715 |
| Sum | 88,715 |
The group and the company are exposed to credit risk, which arises primarily in connection with trade receivables. Trade receivables at year-end amounted to SEK 333 M (349).
The group has established a credit policy that determines how clients are managed, with decision-making levels set for various credit limits. Tradedoubler strives for advance payment from clients. When deviations from advance payment are made, the company's credit policy serves as the basis for decision.
Tradedoubler has not noticed increased bad debt losses in any geographical area. However, the group management is actively monitoring the situation. No specific risk concentration exists for any customer category.
Incurred bad debt losses during the year amounted to SEK 3,612 (1,901) thousands in the group, net after reversal of liabilities to publishers.
Provision for anticipated bad debt losses in the balance sheet amounted to SEK 37,242 (19,343).
Provisions for uncertain accrued revenue are continuously revalued in connection with the income statement and the sum of these is of nonsignificant value.
Since a publisher in most cases only gets paid when the customer has paid the invoice, the company's customer credit risk is reduced in this way.
| 2020 | 2019 | |
|---|---|---|
| SEK ´000 | Carrying amount |
Carrying amount |
| Trade receivables not due | 220,071 | 216,668 |
| Trade receivables, due 0-30 days | 54,708 | 74,579 |
| Trade receivables, due 31-90 days | 12,664 | 30,109 |
| Trade receivables, due >90+ days | 45,561 | 27,208 |
| 333,004 | 348,652 |
| 2020 | 2019 | |
|---|---|---|
| SEK ´000 | Carrying amount |
Carrying amount |
| Trade receivables not due | -1,532 | -212 |
| Trade receivables, due 0-30 days | -1,518 | -319 |
| Trade receivables, due 31-90 days | -1,664 | -3,034 |
| Trade receivables, due >90+ days | -32,527 | -15,778 |
| -37,242 | -19,343 |
| 2020 | 2019 | ||
|---|---|---|---|
| SEK ´000 | Carrying amount |
Carrying amount |
|
| Trade receivables | 333,004 | 348,652 | |
| Provision, doubtful trade receivables | -37,242 | -19,343 | |
| Total trade receivables | 295,762 | 329,309 |
| SEK ´000 | 2020 |
|---|---|
| Opening balance | -19,343 |
| Confirmed bad debt | 3,968 |
| Reversed provisions | 3,207 |
| Provisions for the year | -28,138 |
| Translation difference | 3,064 |
| Closing balance | -37,242 |
Foreign exchange risk refers to the risk that changes in exchange rates may affect the consolidated income statement, balance sheet and cash flow statement. Foreign exchange risk exists in the form of transaction risk and translation risk. Tradedoubler is exposed to foreign exchange risk in 14 countries involving eight different currencies, with Euro (EUR), Polish zloty (PLN) and British pounds (GBP) representing the majority share.
In 2020, approximately 49 (52) per cent of group sales were made in EUR, 17 (13) per cent in PLN and approximately 15 (19) per cent in GBP. In 2020, approximately 40 (42) per cent of the group's costs were in EUR, 12 (9) in PLN and approximately 7 (12) per cent in GBP.
Exposure attributable to exchange rate fluctuations in client and supplier invoices is limited since invoicing to customers and from suppliers largely occurs in local currency for all companies in the group. Since 2019, Tradedoubler AB has a loan amounting to M 13.45 EUR and is therefore more exposed to exchange rate changes between SEK and EUR than earlier. This loan amounted to SEK 12,23 M at year-end. Exchange rate differences from this revaluation is recognised in the income statement and is not currently hedged.
Tradedoubler is also exposed to foreign exchange risk in the parent company's intra-group lending to subsidiaries which takes place in the subsidiary's currency, as well as deposits from subsidiaries of excess liquidity. Exchange rate differences due to deposits and lending from subsidiaries are recognised in the income statement.
Intra-group lending and deposits are currently not hedged.
In the event of a change of the group's underlying currencies of 1 per cent, this would affect the company's net sales by approx. SEK 11 M, of which SEK 6 M relates to subsidiaries in euro zone countries, SEK 2,2 from the Polish subsidiary, SEK 2 M relates to the UK subsidiary and SEK 0,7 M to other foreign companies in the group.
Changes in foreign exchange rates impact the group's earnings on translation of the income statements of foreign subsidiaries to the group's presentation currency, SEK.
Translation exposure also arises in connection with translation of the group's investments in foreign subsidiaries to the group's presentation currency, SEK, which is recognised as a component of "other comprehensive income" (outside the income statement).
In the event of a weakening of the group's underlying currencies of 10 per cent, this would affect the company's profit before tax negatively by approx. SEK 1.0 M, of which SEK 0.35 M relates to subsidiaries in euro zone countries, SEK 0.3 M relates to the polish subsidiary, and SEK 0.3 to other foreign companies in the group. If the company's underlying currencies weakened by 10 per cent at the end of the reporting period, it would weaken consolidated equity by approx. SEK 4 M, of which SEK 2.8 M relates to the subsidiaries in euro zone countries, SEK 0.5 M relates to the polish subsidiary, and SEK 0.7 M to other foreign companies in the group.
The group's net investments in foreign currency primarily involve EUR and GBP. Net investments in foreign currency are not currently hedged.
Interest risk refers to the risk that changes in market interest rates may affect the consolidated income statement and cash flow or the fair value of financial assets and liabilities. A significant factor affecting the interest risk is the interest rate refixing period. The group's interest rate exposure is managed centrally, which means that the finance function is responsible for identifying and managing this exposure.
On 31 December 2020, interest-bearing assets in the form of bank balances amounted to SEK 89 M. Bank balances run according to variable rates of interest, mainly linked to market rates for each currency that the asset relates to. A change in the variable interest rate of + / - 1 percent on the closing date affect the Group's net financial items by SEK 0 M.
Tradedoubler renegotiated during 2019 its loan with their principal owner Reworld Media. The loan signed with a fixed interest rate and thus a limited interest risk.
Tradedoubler works actively to minimise the group's liquidity risk by not taking risks in the cash flow. A publisher in most cases is only paid when the customer has paid the invoice to Tradedoubler. Tradedoubler limits its liquidity risk in this way. Credit ratings are performed on new clients and Tradedoubler normally requires advance payments from clients for which adequate financial information is not available.
Tradedoubler also has counterparty risk related to liquidity risks, which are principally related to banks in existing markets.
At the balance sheet date, the company has external interest-bearing borrowing of SEK 118 M or SEK 123 M when excluding accrued arrgangement fees.
Since 2019, Tradedoubler have a loan agreement with the Company's principal owner Reworld Media S.A. amounting to EUR 13.45 M. The facility with Reworld Media S.A. is on market terms, and the majority of the facility has an amortisation structure, and matures in 2026. During the year, 1,22 MEUR was amortised, which corresponds to SEK 12,2 M on the closing date.
| 2020 | 2019 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK ´000 | Total | Within 1 month |
Within 1-3 months |
Over 4 months |
SEK ´000 | Total | Within 1 month |
Within 1-3 months |
Over 4 months |
|||
| Trade payables | 16,081 | 13,539 | 2,767 | -225 | Trade payables | 18,002 | 17,336 | 646 | 20 | |||
| Lease Liability | 39,586 | – | 3,851 | 35,735 | Lease Liability | 38,043 | – | 3,918 | 34,125 | |||
| Short-term liabilities to publishers |
316,968 | 110,043 | 182,890 | 24,035 | Short-term liabilities to publishers |
318,651 | 91,244 | 211,304 | 16,102 | |||
| Total | 372,635 | 123,582 | 189,508 | 59,545 | Total | 374,696 | 108,580 | 215,868 | 50,248 |
| SEK ´000 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total |
|---|---|---|---|---|---|---|---|
| Amortisations | 12,206 | 12,206 | 12,206 | 6,103 | 49,886 | 30,163 | 122,769 |
| Interest | 3,513 | 3,162 | 2,821 | 2,519 | 7,581 | 381 | 19,977 |
| Sum | 15,719 | 15,367 | 15,026 | 8,622 | 57,467 | 30,544 | 142,746 |
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Pledged assets | ||
| Rental deposits | 4,807 | 5,819 |
| Total pledged assets | 4,807 | 5,819 |
| Contingent liabilities | none | none |
Transactions with related parties are priced on commercial terms. The group has during the year had transactions between the parent company and its subsidiaries. The transactions consist primarily of license invoices from the parent company to the subsidiaries. See further description in Notes to the Parent company's financial statements, M15 Investments and M23 Transactions with related parties.
Reworld Media has as a publisher in France received remuneration of EUR 21 K, EUR 48 K for provided HR-support and EUR 149 K in remuneration for rent, both related to Tradedoubler's French subsidiary. Reworld Media has during 2020 been invoiced for purchased services from Tradedoubler France of EUR 208 K in total. Other subsidiaries have sold services to Reworld Media amounting to EUR 58 K.
In May 2018 Tradedoubler entered into a loan agreement with Reworld Media. This loan was renegotiated and increased in Q3 2019 so that the company could replace the loan from a Swedish credit institution. At the end of the year the loan amounted to SEK 123 M (EUR 12.23 M). The loan has an amortisation structure and matures in 2026. The loan is subscribed on market terms and the interest expense during the year has amounted to SEK 4.8 M. The second and last payment amounting to EUR 312 K related to the arrangement of the loan was paid to Reworld Media in March 2020. The loan has as of the end of the period been amortised by SEK 12.6 M during 2020.
Management in Tradedoubler has taken part in the main owner Reworld Media's share program. A total of 200,859 share options have been granted to senior executives. The conditions of the share program are that the senior executives are allotted half of the shares if the senior executive is still employed within Tradedoubler on 27 September 2021. Remaining shares are allotted to the senior executive if they are still employed within Tradedoubler on 27 September 2022. Reworld Media's share price was EUR 1.9 on the allotment date, which was approximately 20 SEK. The value of these shares on the grant date was EUR 381,632, which equals 4,022,425 SEK. This amount is reported as an expense on an ongoing basis during the share program´s validity
period and a provision for social security contributions is imposed based on the prevailing share price on the balance sheet date. In the year the reported costs of the share program amounted to SEK 2,031 K, of which debt for social security contributions amounts to SEK 627 K. The arm's length principle has been applied on all these
transactions.
Aside from transactions in the normal course of business or to the board and senior executives, the following fourth-party transactions have occurred during 2020. Tradedoubler's CTO, Francois Pacot, has during the year received payment of EUR 120 K related to his monthly fee as consultant and EUR 284 K related to other services through his fully owned companies.
During Q4 2020, Tradedoubler German subsidiary signed a lease agreement regarding an office in Munich with CRE Germany GmbH which is owned by multiple members of the board and group management. The lease commencement date is January 1 2021. Rent is paid at market rates, however no costs were incurred during the financial year.
In 2020, Tradedoubler AB lent SEK 1,291 thousand to the associated company MP Media Ventures GmbH, which is 30% owned by Tradedoubler AB. In connection with the formation of MP Media Ventures GmbH, SEK 183 thousand was also lent to the co-founder, which corresponds to his share of the share capital. The loans have been prepared on market terms.
The arm's length principle has been applied on all these transactions.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Cash and bank balances | 88,715 | 48,193 |
| Total according to the balance sheet | 88,715 | 48,193 |
| Total according to the cash flow statement | 88,715 | 48,193 |
| SEK ´000 | 2020 | 2019 |
| Interest received | 496 | 829 |
| Interest paid | -6,140 | -15,680 |
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Depreciation and amortisation | 37,012 | 36,328 |
| Provisions for severance payments | – | 271 |
| Unrealised exchange rate differences | -12,380 | 3,819 |
| Write-down accounts receivables | -3,620 | -3,912 |
| Other | -483 | -4,547 |
| -20,529 | 31,959 |
Change related items refer to items of non-recurring nature and the purpose of disclosing these separately is to make it easier for the reader to understand the underlying year-on-year developments. In the table below the items adjusted for in 2020 and 2019 are listed.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Costs | ||
| Severance | – | -4,512 |
| Office moving costs | – | -2,936 |
| Restruct costs | – | -298 |
| Long-term incentive programme | -2,031 | – |
| Revaluation contingent additional purchase | ||
| price | – | 302 |
| Sum change related costs | -2,031 | -7,444 |
| Sum change related items | -2,031 | -7,444 |
PER SEGMENT
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Nordics | – | -596 |
| UK & Ireland | – | -4,833 |
| France & Benelux | -363 | -1,403 |
| DACH | – | -280 |
| South | – | -121 |
| Group Management & support functions | -1,668 | -212 |
| Sum | -2,031 | -7,444 |
The item refers to 7 per cent of the shares in DynAdmic. The shares are classified as financial assets available for sale. The shares are valued at fair value and value adjustments are recognised in other comprehensive income.
During the year, Tradedoubler AB acquired 30% of the German company MP Media Ventures GmbH. The value of the holding is considered insignificant and is therefore not included in the consolidated accounts.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Opening balance 1 January | 11,128 | 11,128 |
| Acquisitions during the year | – | – |
| Change in value | – | – |
| Closing balance 31 December | 11,128 | 11,128 |
No significant events have occurred after the balance sheet date.
| SEK ´000 | Note | 2020 | 2019 |
|---|---|---|---|
| Net sales | 5,227 | 6,202 | |
| Other revenue | 86,950 | 69,712 | |
| Total revenue | P3 | 92,177 | 75,914 |
| Cost of goods sold | -5,255 | -6,359 | |
| Gross profit | 86,922 | 69,555 | |
| Selling expenses | -690 | -1,592 | |
| Administrative expenses | -52,397 | -53,001 | |
| Research & development expenses | -24,687 | -24,774 | |
| Operating profit (EBIT) | P4, P5, P6, P7, P8 | 9,147 | -9,813 |
| Profit from financial items | |||
| Profit from participations in group companies | 8,169 | 10,292 | |
| Other interest income and similar income statement items | 417 | 870 | |
| Interest expenses and similar income statement items | -1,121 | -17,819 | |
| Net financial items | P9 | 7,465 | -6,658 |
| Profit before tax | 16,611 | -16,472 | |
| Tax | P10 | -7,591 | 52 |
| Net profit for the year | 9,020 | -16,420 |
| SEK ´000 | Note | 2020 | 2019 |
|---|---|---|---|
| Profit for the year | 9,020 | -16,420 | |
| Other comprehensive income | |||
| Total other comprehensive income | – | – | |
| Total comprehensive income for the year | 9,020 | -16,420 |
| SEK ´000 | Note | Dec 31, 2020 | Dec 31, 2019 |
|---|---|---|---|
| ASSETS | P11 | ||
| Non-current assets | |||
| Intangible assets | P12 | 46,836 | 44,387 |
| Equipments, tools, fixtures and fittings | P13 | 76 | 54 |
| Financial assets | |||
| Participations in group companies | P14, P15 | 174,695 | 174,695 |
| Participations in associated companies | 79 | ||
| Shares and participations in other companies | P14, P15, P25 | 11,128 | 11,128 |
| Deferred tax asset | P10 | 102 | 14,130 |
| Other financial assets | P14 | 1,475 | – |
| Total non-current assets | 234,390 | 244,394 | |
| Current assets | |||
| Trade receivables | 388 | 5,105 | |
| Receivables from group companies | 146,632 | 138,745 | |
| Tax receivables | 1,014 | 1,617 | |
| Other receivables | 1,018 | 1,063 | |
| Prepaid expenses and accrued income | P16 | 3,443 | 3,593 |
| Cash and cash equivalents | 40,938 | 25,094 | |
| Total current assets | 193,434 | 175,216 | |
| Total assets | 427,824 | 419,610 | |
| EQUITY AND LIABILITIES | |||
| Shareholders' equity | P17 | ||
| Restricted equity | |||
| Share capital | 18,371 | 18,371 | |
| Fund for development expenses | 33,936 | 31,487 | |
| Total restricted equity | 52,307 | 49,858 | |
| Non-restricted equity | |||
| Share premium reserve | 352,540 | 352,540 | |
| Retained earnings | -336,435 | -318,676 | |
| Net profit for the year | 9,024 | -16,420 | |
| Total non-restricted equity | 25,129 | 17,444 | |
| Total equity | 77,435 | 67,302 | |
| Long-term liabilities | P11 | ||
| Other interest-bearing debt | P18 | 105,612 | 121,526 |
| Total long-term liabilities | 105,612 | 121,526 | |
| Current liabilities | P11 | ||
| Current interest-bearing debt | P18 | 12,206 | 12,687 |
| Trade payables | 4,142 | 9,133 | |
| Liabilities to group companies | 87,455 | 86,597 | |
| Other liabilities | P19 | 128,510 | 115,454 |
| Accrued expenses and deferred income | P20 | 12,463 | 6,910 |
| Total current liabilities | 244,776 | 230,782 | |
| Total equity and liabilities | 427,824 | 419,610 |
For more information about pledged assets and contingent liabilities, see Note P22.
| Restricted | Non-restricted | |||||
|---|---|---|---|---|---|---|
| SEK ´000 | Share capital | Fund development expenses |
Share premium reserve |
Retained earnings incl. net profit for the year |
Total equity |
|
| Opening balance at January 1, 2019 | 18,371 | 29,960 | 352,540 | -318,156 | 82,714 | |
| Comprehensive income | ||||||
| Net profit for the year | -16,420 | -16,420 | ||||
| Fund development expenses | 1,526 | -1,526 | – | |||
| Transactions with shareholders | ||||||
| Use of shares in own custody | 1,009 | 1,009 | ||||
| Equity-settled share-based payments | – | – | ||||
| Closing balance at December 31, 2019 | 18,371 | 31,487 | 352,540 | -335,094 | 67,302 | |
| Opening balance at January 1, 2020 | 18,371 | 31,487 | 352,540 | -335,094 | 67,302 | |
| Comprehensive income | ||||||
| Net profit for the year | 9,020 | 9,020 | ||||
| Fund development expenses | 2,449 | -2,449 | – | |||
| Transactions with shareholders | ||||||
| Use of shares in own custody | – | |||||
| Equity-settled share-based payments | 1,112 | 1,112 | ||||
| Closing balance at December 31, 2020 | 18,371 | 33,936 | 352,540 | -327,411 | 77,435 |
| SEK ´000 | Note | 2020 | 2019 |
|---|---|---|---|
| Operating activities | P24 | ||
| Profit before tax | 16,611 | -16,472 | |
| Adjustment for items not included in the cash flow | 20,943 | 10,748 | |
| Paid tax | 7,440 | -603 | |
| Cash flow from operating activities before changes in working capital | 44,993 | -6,327 | |
| Cash flow from changes in working capital | |||
| Increase (-)/Decrease (+) in operating receivables | -10,331 | -2,028 | |
| Increase (-)/Decrease (+) in operating liabilities | 18,414 | 11,319 | |
| Cash flow from operating activities | 53,076 | 2,965 | |
| Investing activities | |||
| Investments in intangible assets | -23,064 | -21,475 | |
| Investments in property, plant and equipment | -44 | -54 | |
| Investments in financial assets | -1,553 | – | |
| Cash flow from investing activities | -24,661 | -21,529 | |
| Financing activities | |||
| Newly raised loans | – | 103,663 | |
| Payment of contingent additional purchase price | – | -1,565 | |
| Repayment of loan and own bonds | -12,570 | -71,000 | |
| Cash flow from financing activities | -12,570 | 31,098 | |
| Cash flow for the year | 15,844 | 12,535 | |
| Cash and cash equivalents at the beginning of the year | 25,094 | 12,559 | |
| Cash and cash equivalents at the end of the year | 40,938 | 25,094 |
The parent company has prepared its annual accounts and consolidated accounts according to the Swedish Annual Accounts Act (1995:1554).
The differences between the accounting policies applied by the group and the parent company are shown below. The accounting policies set out for the parent company below have been applied consistently for all periods presented in the parent company's financial statements.
The parent company's income statement and balance sheet are prepared according to the Swedish Annual Accounts Act's layout. The difference in relation to IAS 1: Presentation of financial statements that was applied in the presentation of the consolidated financial statements is mainly in recognition of financial income and expenses, noncurrent assets and shareholders' equity, discontinued operations and the presence of provisions as a separate heading in the balance sheet.
Participations in subsidiaries and associated companies are recognised in accordance with the cost method.
The parent company reports group contributions and shareholders' contributions in accordance with RFR2. The company has chosen to account for group contributions paid and received in the income statement.
Shareholders' contributions are carried directly against equity in the case of the receiver and capitalised as shares and participations by the grantor, to the extent that impairment is not required.
In accordance with the amendments to the Swedish Annual Accounts Act and RFR2 that is applicable from 1 January 2016, the parent company has applied the rule on allocation to a development expenses fund. The change means that after 1 January 2016 companies that activate self-developed intangible assets has to bring about an amount equal to the capitalised development expenditures from unrestricted equity to a fund for development expenses in restricted equity. In the event of amortisation of the capitalised development expenditures, the corresponding amount will be returned to unrestricted equity.
The parent company has chosen to not apply IFRS 16 according to the possibility given in RFR 2. This means that the parent company's accounting of leasing remain unchanged. The parent company is leasee in operational leasing agreements in which the lessor carries the economical risks and advantages. The lease costs are accounted for liniary over the leasing period.
Shares in subsidiaries are recognised in the parent company at cost less any impairment losses. When an indication of impairment occurs, an impairment test is performed, using the same method as described for goodwill in Note C2. Impairment test has been carried out in 2020 in conjunction with the impairment testing of the group's goodwill. Important assumptions and estimates in connection with this are shown in the section about the goodwill impairment testing in Note C1 in notes to the consolidated statements.
The parent company if affected by estimates and judgements regarding intangible assets. For information regarding critical estimates and judgements in the annual accounts see the note to the Consolidated accounts, C2 Critical estimates and judgements.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Other revenue | 7,719 | 7,064 |
| Government support | 1,744 | – |
| License fees | 82,714 | 68,842 |
| Total revenue | 92,177 | 75,914 |
| 2020 | 2019 | ||
|---|---|---|---|
| men (%) | men (%) | ||
| Sweden | 35 50 |
40 | 42 |
| Salaries and other remuneration |
|||
|---|---|---|---|
| SEK ´000 | 2020 | 2019 | |
| Salaries and remuneration | 26,841 | 26,837 | |
| Share-based payments | 1,112 | – | |
| Total | 27,953 | 26,837 | |
| Pension expenses | 1,844 | 1,730 | |
| Social security contributions | 6,963 | 7,249 | |
| Social security contributions attributable to share-based payments |
555 | – | |
| 9,362 | 8,979 | ||
| Total | 37,315 | 35,816 |
For further information regarding remuneration to the board and company management and the remuneration policies within the group, see notes to the consolidated statements, Note C5 Remuneration to employees, group management and board of directors.
Three senior executives in Tradedoubler have taken part in the main owner Reworld Media's share program. For 2020, the Parent Company has reported a cost of SEK -1,668 (0) thousand for the long-term incentive program decided on in 2020. For more information regarding the Group's share-based payments, see Note to the consolidated financial statements, Note K6 Share-based payments.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| EY | ||
| Audit assignments | 2,546 | 2,068 |
| Other assignments | 696 | 300 |
| Total | 3,242 | 2,368 |
Audit assignments refers to the examination of the annual accounts, the consolidated accounts and accounting records as well as the administration of the board of directors and the CEO, other duties that the Company´s auditors are obliged to perform as well as advice or other assistance arising from observations during such examination and implementation of such duties. In addition, the auditor reviewed the corporate governance report. The auditor has also reviewed the interim report for the period January–June 2020 and has been retained for certain advice, most of which pertained to audit-related consultations regarding accounting.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Remuneration cost to publishers | 5,255 | 6,359 |
| Employee costs | 23,911 | 25,342 |
| Depreciation and amortisation | 20,637 | 20,502 |
| Other operating costs | 33,226 | 33,523 |
| Total | 83,030 | 85,727 |
Non-terminable lease payments amount to:
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Within one year | 3,587 | 4,788 |
| Between one and five years | 168 | 4,218 |
| Longer than five years | – | – |
| 3,755 | 9,006 |
The operating lease costs in the company are mainly related to rent for office premises. Costs for operating leases 2020 amounted to SEK 3,851 (3,831) thousand.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Dividends from group companies | 5,100 | 7,045 |
| Group contributions received | 2,938 | 3,247 |
| Result from sales of shares in subsidiaries | 131 | – |
| Profit from participations in group companies | 8,169 | 10,292 |
| Interest income, group companies | 300 | 354 |
| Interest income, other | 117 | 516 |
| Financial income | 417 | 870 |
| Interest expense, group companies | -215 | -1,840 |
| Interest expense, other | -5,693 | -10,954 |
| Unrealised result at fair valuation of short-term investments |
4,771 | 3,193 |
| Change in foreign exchange rates | 1,057 | -3,869 |
| Other financial expenses | -1,041 | -4,349 |
| Financial expenses | -1,121 | -17,819 |
| Net financial items | 7,465 | -6,658 |
The company's tax expense is divided into the following components:
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Current tax expense | ||
| Tax expense for the period | -399 | – |
| Tax expense for prior years | 6,837 | – |
| Total current tax expense | 6,438 | – |
| Deferred tax | ||
| Deferred tax related to temporary differences | -29 | 52 |
| Deferred tax expense due to utilisation of previous capitalised loss carryforwards for tax |
||
| purposes | -14,000 | – |
| Total deferred tax | -14,029 | 52 |
| Total | -7,591 | 52 |
The tax expense for the year can be reconciled to profit before tax according to the following:
| 2020 | 2019 | |||
|---|---|---|---|---|
| % SEK ´000 | % SEK ´000 | |||
| Profit before tax | 16,611 | -16,471 | ||
| Tax according to applicable tax rate | 21.4 | -3,555 | 21.4 | 3,525 |
| Adjusted estimates for previous year's loss carryforwards |
43.1 | -7,163 | – | – |
| Non-deductible expenses1 | 2.4 | -399 | -15 | -2,552 |
| Non-taxable income | -7.1 | 1,172 | 9.3 | 1,531 |
| Increase of loss carryforwards without corresponding capitalisa |
||||
| tion of deferred tax expense | -14.2 | 2,354 | -14.9 | -2,452 |
| Effective tax/tax rate | 45.7 | -7 591 | 0.3 | 52 |
1 During 2019, SEK 11.3 M has been retributed as non-deductible expenses due to the implementation of limited deductions for interest expenses.
Deductible loss carryforwards for tax purposes for which deferred tax assets have not been recognised in the income statement and balance sheet:
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Tax on loss carryforwards | 59,964 | 62,090 |
| Total | 59,964 | 62,090 |
The value for tax purposes or non-capital loss carryforwards has a perpetual term. Non-capital loss carryforwards relates to the assessment that it is uncertain whether these will be utilised in the near future.
Deferred tax assets are attributable to the following:
| SEK ´000 | Capitalisation of loss carryforwards |
Other receivables |
Other liabilities |
Other non-current assets |
Other unused tax deductions |
Deferred tax assets and tax liabilities |
|---|---|---|---|---|---|---|
| Balance at Jan 1, 2019 | – | – | – | 79 | 14,000 | 14,079 |
| Recognised via income statement | – | – | – | 52 | – | 52 |
| Balance at Dec 31, 2019 | – | – | – | 130 | 14,000 | 14,130 |
| Balance at Jan 1, 2020 | – | – | – | 130 | 14,000 | 14,130 |
| Recognised via income statement | – | – | – | -29 | -14,000 | -14,029 |
| Balance at Dec 31, 2020 | – | – | – | 102 | – | 102 |
For more information on Other unused tax deductions, see Note C11 Taxes in the notes to the consolidated financial statements.
Trade receivables, trade payables, other current receivables and liabilities that are measured at cost have short terms and thus fair value corresponds with the carrying amount. Tradedoubler currently has no liabilities valued at fair value through the profit and loss. Fair value for contingent additional purchase price has been determined using valuation models where significant inputs are based on unobservable market data.
| Development | Administration | |
|---|---|---|
| SEK ´000 | expenses | and support |
| Accumulated acquisition costs | ||
| Opening balance at Jan 1, 2019 | 166,031 | 46,548 |
| Investments for the year | 21,475 | – |
| Closing balance at Dec 31, 2019 | 187,506 | 46,548 |
| Opening balance at Jan 1, 2020 | 187,506 | 46,548 |
| Investments for the year | 23,064 | – |
| Closing balance at Dec 31, 2020 | 210,570 | 46,548 |
| Accumulated amortisation | ||
| Opening balance at Jan 1, 2019 | -123,171 | -46,548 |
| Amortisation for the year | -19,948 | – |
| Closing balance Dec 31, 2019 | -143,119 | -46,548 |
| Opening balance at Jan 1, 2020 | -143,119 | -46,548 |
| Amortisation for the year | -20,615 | – |
| Closing balance Dec 31, 2020 | -163,734 | -46,548 |
| Carrying amounts | ||
| At Jan 1, 2019 | 42,860 | – |
| At Dec 31, 2019 | 44,387 | – |
| At Dec 31, 2020 | 46,836 | – |
| SEK ´000 | Equipment, tools, fixtures and fittings |
|---|---|
| Accumulated acquisition | |
| Opening balance Jan 1, 2019 | 11,259 |
| Investments | 54 |
| Closing balance Dec 31, 2019 | 11,313 |
| Opening balance Jan 1, 2020 | 11,313 |
| Investments | 44 |
| Closing balance Dec 31, 2020 | 11,357 |
| Accumulated depreciation | |
| Opening balance Jan 1, 2019 | -10,705 |
| Depreciation for the year | -554 |
| Closing balance Dec 31, 2019 | -11,259 |
| Opening balance Jan 1, 2020 | -11,259 |
| Depreciation for the year | -22 |
| Closing balance Dec 31, 2020 | -11,281 |
| Carrying amounts | |
| At Jan 1, 2019 | 554 |
| At Dec 31, 2019 | 54 |
| At Dec 31, 2020 | 76 |
| SEK ´000 | Dec 31, 2020 Dec 31, 2019 | |
|---|---|---|
| Accumulated acquisition costs | ||
| Opening balance | 185,823 | 186,124 |
| Investment in associated companies | 79 | – |
| Receivables from associated companues | 1,475 | – |
| Revaluation of contingent additional | ||
| purchase price | – | -302 |
| Closing balance Dec 31 | 187,376 | 185,823 |
| Book value | ||||||
|---|---|---|---|---|---|---|
| Subsidiary | Corporate identity number |
Registered office |
Number of shares |
Participation as % |
Dec 31, 2020 | Dec 31, 2019 |
| TradeDoubler OY | 777468 | Helsinki | 100 | 100 | 70 | 70 |
| TradeDoubler A/S | 25137884 | Copenhagen | 125 | 100 | 5,772 | 5,772 |
| TradeDoubler Ltd | 3921985 | London | 5,000 | 100 | 140,000 | 140,000 |
| TradeDoubler Espana SL | B82666892 | Madrid | 100 | 100 | 62 | 62 |
| TradeDoubler Srl | 210954 (rep)/26762 (Rac) | Milan | 1 | 100 | 2,683 | 2,683 |
| TradeDoubler GmbH | 76167/URNo R181/2001 | Münich | 1 | 100 | 250 | 250 |
| TradeDoubler AS | 982006635 | Oslo | 1,000 | 100 | 6,011 | 6,011 |
| TradeDoubler SARL | B431573716 (2000B08629) | Paris | 500 | 100 | 119 | 119 |
| TradeDoubler BV | 20100140 | Rotterdam | 40 | 100 | 188 | 188 |
| TradeDoubler International AB | 556833-1200 | Stockholm | 500 | 100 | 3,195 | 3,195 |
| TradeDoubler Sweden AB | 556592-4007 | Stockholm | 1,000 | 100 | 2,003 | 2,003 |
| TradeDoubler Sp zoo | 015792506 | Warszaw | 1,000 | 100 | 115 | 115 |
| TradeDoubler AG | CH020.3.3.028.851-0 | Zürich | 997 | 100 | 609 | 609 |
| TradeDoubler Performance Marketing LTDA |
14.273.556/0001-66 | Sao Paolo | 297,923 | 100 | – | – |
| Adnologies GmbH* | HRB200226 | Hamburg | – | 0 (100) | – | – |
| Tradedoubler Singapore PTE LTD | 201615663C | Singapore | 1,000 | 100 | 6 | 6 |
| R-Advertising | B502207079 | Mougins | 1,375,953 | 100 | 10,780 | 10,780 |
| Metapic Sweden AB | 556965-7868 | Stockholm | 10,000 | 100 | 2,831 | 2,831 |
| MP Media Ventures GmbH** | HRB220095B | Berlin | 7,500 | 30 | 79 | – |
| DynAdmic SAS | 753502582 | Mougins | 346,180 | 7 | 11,128 | 11,128 |
| 185,901 | 185,823 |
* Adnologies GmbH was struck off during 2020.
** MP Media Ventures GmbH was founded in 2020.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Rent of premises | 1,117 | 1,114 |
| Other | 2,326 | 2,479 |
| Total | 3,443 | 3,593 |
Share capital refers to the parent company's share capital. Each share carries one vote and those entitled to vote may vote for the full number of shares represented and owned without any restriction in voting rights. All shares carry equal rights to share in the Company's assets and profits and in any surplus on liquidation.
At December 31, 2020, Tradedoubler AB had a share capital of SEK 18.4 M distributed among 45,927,449 shares, each share with a par value of SEK 0.40.
| Reconciliation of number of shares | Number of shares issued |
Issued share capital |
|---|---|---|
| Number of shares issued January 1, 2020* |
45,927,449 | 18,370,978 |
| Number of shares issued December 31, 2020* |
45,927,449 | 18,370,978 |
* Of which 790,760 shares are in own custody.
In the third quarter 2019 Tradedoubler finalised an arms-length re-negotiation regarding its current loan agreement with the Company's principal owner Reworld Media S.A. The Company has increased its current facility with Reworld Media S.A from SEK 40 M to a total of SEK 138 M (EUR 13.45 M) in order to repay the Company's SEK 71 M loan to a Swedish credit institution.
The facility from Reworld Media S.A. is on market conditions and has a term until 2026 with a fixed interest rate of approximately 3-4%. The loan has an amortisation structure where approximately SEK 12-13 M will be repaid each year until 2024. In 2024, SEK 6.4 M will be repaid and the remaining part of the loan will be repaid in 2025 or later. During 2020, SEK 12.6 M was repaid and since approximately the same amount is to be repaid in 2021, SEK 12.2 M has been classified as a current liability at the balance sheet date. The remaining loans are classified as long-term in the balance sheet and amount to SEK 105.6 M, which is adjusted for accrued set-up costs. The loan has a covenant which means that the entire loan must be repaid if a possible change in company control should take place.
For more information regarding loans, see Note to Consolidated Financial Statements, C18 Loans.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Current liabilities to publishers | 125,827 | 110,261 |
| Withholding tax and social security contributions |
2,080 | 1,560 |
| Other | 603 | 3,633 |
| Total | 128,510 | 115,454 |
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Holiday pay | 2,509 | 1,912 |
| Other payroll expenses | 3,275 | 197 |
| Consultancy costs | 621 | 880 |
| Audit costs | 2,068 | 1,130 |
| Closing of legal entities | 179 | 179 |
| Accrued interest | 1,182 | 290 |
| Other | 2,629 | 2,322 |
| Total | 12,463 | 6,910 |
Tradedoubler's financial risk management is handled and monitored at group level. For more information regarding the financial risks, see notes to the Consolidated statements, Note C21 Financial risks.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Total pledged assets | – | – |
| Contingent liabilities | – | 935 |
Contingent liabilities consists of performance guarantees to subsidiaries.
Transactions with related parties are priced on commercial terms.
Transactions with related parties for Tradedoubler AB mainly consists of licensing fees corresponding to SEK 83 (69), invoiced by the parent company to subsidiaries and other revenue of SEK 5 M (6). The parent company's receivables from subsidiaries amounted to SEK 150 M (139). The parent company´s liabilities to subsidiaries amount to SEK 87 M (87). Receivables and liabilities from subsidiaries have been netted off in the balance sheet.
In May 2018, Tradedoubler entered into a loan agreement with Reworld Media. This loan was renegotiated and increased in Q3 2019 so that the Company could replace the loan from a Swedish credit institution. At the end of the year the loan amounted to SEK 123 M (EUR 12.23 M). The loan has an amortisation structure and matures in 2026. The loan is subscribed on market terms and the interest expense during the year has amounted to SEK 4.8 M. The second and last payment amounting to EUR 312 K related to the arrangement of the loan was paid to Reworld Media in March 2020. The loan has as of the end of the period been amortised by SEK 12.6 M during 2020. The agreement contains a clause related to change of control, however, no other covenants are in place. The arm's length principle has been applied on all these transactions.
No transactions with key people in executive positions have taken place during the year except the ones specified in the notes to the Consolidated statements, Note C5 Remuneration to employees, group management and board of directors, Note C6 Share-based remuneration and Note C23 Transactions with related parties.
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Cash and bank balances | 40,938 | 25,094 |
| Total according to the balance sheet | 40,938 | 25,094 |
| Total according to the cash flow statement | 40,938 | 25,094 |
| SEK ´000 | 2020 | 2019 |
| Interest received | 364 | 516 |
| Interest paid | -5,016 | -15,260 |
| SEK ´000 | 2020 | 2019 |
|---|---|---|
| Depreciation and amortisation | 20,637 | 20,502 |
| Other provisions | – | -7,787 |
| Unrealised exchange rate differences | -2,644 | -295 |
| Other | 2,950 | -1,672 |
| 20,943 | 10,748 |
The item refers to 7 per cent of the shares in DynAdmic.
| SEK '000 | 2020 | 2019 |
|---|---|---|
| Opening balance 1 January | 11,128 | 11,128 |
| Closing balance 31 December | 11,128 | 11,128 |
No significant events have occurred after the end of the balance sheet date.
For more information see Note to Consolidated Financial Statements, C27 Events after the balance sheet date.
The undersigned assure that the consolidated accounts and annual report have been prepared in accordance with international accounting standards, IFRS, as adopted by the EU, and pursuant to generally accepted accounting standards and provide a true and fair view of the group's and parent company's operations, financial position and results of operations and describe significant risks and uncertainties facing the group. The consolidated income statement and statement of financial position and the parent company's income statement and balance sheet are subject to approval by the annual general meeting to be held on 18 May 2021.
Stockholm, 23 April 2021
Pascal Chevalier
Chairman
Gautier Normand Board member
Jérémy Parola Board member
Erik Siekmann Board member
Nils Carlsson Board member
Matthias Stadelmeyer
President and CEO
Our Audit report was submitted on 23 April 2021
Ernst & Young AB
Authorised Public Accountant
To the general meeting of the shareholders of Tradedoubler AB (publ), corporate identity number 556575-7423
We have audited the annual accounts and consolidated accounts of Tradedoubler AB (publ) except for the corporate governance statement on pages 7-12 and the statutory sustainability report on pages 6-7 for the year 2020. The annual accounts and consolidated accounts of the company are included on pages 1-46 in this document.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2020 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2020 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the corporate governance statement on pages 7-12 and the statutory sustainability report on pages 6-7. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.
We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group.
Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company's audit committee in accordance with the Audit Regulation (537/2014) Article 11.
We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.
Capitalised development expenditure is recognised in the statement of financial position of the group and the parent company at December 31, 2020 to SEK 47 M. The company's accounting policies for development expenditure is described in note K1. Capitalised development expenditures are amortised over the estimated useful live in accordance with the amortisation periods described in note K1. Note K2 describes that significant estimates and judgments are required by the company to assess the conditions for capitalisation of development expenditures. Furthermore, the company needs to make assumptions about the useful life of capitalised development expenditures in order to determine the amortisation period. The company continuously evaluates whether there are indications of impairment for capitalised development expenditures. As described in note K2, other than an impairment amounting to SEK 3 M, there has not been any cases of impairment triggers in the group and the parent company during the year.
As a result of the estimates and assumptions that needs to be made to determine whether development expenditure should be capitalised or not, the period of use and whether indications of impairment exist, we have assessed the accounting of development expenditures as a key audit matter.
In our audit, we evaluated the company's process for handling and accounting of development expenditures. We have further assessed the estimates and assumptions made by the company relating to ongoing development projects through monitoring and analyzing the future economic benefits on which the development projects are based.
We also evaluated the applied amortisation periods against the underlying business decisions and we have checked that amortisation has been recorded in accordance with these. We have also assessed the company's assumptions made when assessing whether impairment exists or not.
We have also reviewed the disclosures in the annual report.
Goodwill is recorded in the consolidated statement of financial position as of 31 December 2020 to SEK 286 M. Shares in subsidiaries are recorded in the statement of financial position for the parent company as of December 31, 2020 to SEK 175 M. Goodwill in the group is defined as an asset with indefinite useful live for which no amortisation is recorded. Shares in subsidiaries are recognised at cost less any impairment write-offs. The company's accounting principles for goodwill and shares in subsidiaries are described in note K1 and note M1.
The company performs an impairment test at least annually and when an indication of impairment is identified to make sure that the carrying value of goodwill does not exceed the recoverable amount. For shares in subsidiaries, such a test is performed when there are indications that the carrying value exceeds the recoverable value. The impairment test performed during the year for goodwill has also included the parent company's carrying value of shares in subsidiaries. Principles for the impairment test are described in note K1. Significant judgments and estimates of the valuation and other significant information about the performed impairment test are described in Note K2 and K13. The impairment test that the company performed during 2020 has not resulted in any impairment write-off.
As a result of the judgments and significant assumptions required when calculating the value in use, we have assessed the valuation of goodwill and shares in subsidiaries as a key audit matter.
In our audit, we evaluated the company's process for determining if an indication of impairment exists, and the preparation of the impairment test.
We have examined how cash-generating units are identified and determined. We have with support from our valuation experts evaluated the company's valuation and calculation methods, we have assessed the reasonableness of the assumptions and sensitivity analysis of changes in assumptions made. We have also assessed the accuracy in previous forecasts against historical results. We have evaluated the reasonableness of the used discount rate and long-term growth by comparing with other companies in the same industry.
We have also reviewed the disclosures in the annual report.
This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1-7. The remuneration report for financial year 2020 is considered other information. The Board of Directors and the Managing Director are responsible for this other information.
Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.
In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.
If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.
In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company's and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
We must inform the Board of Directors of, among other matters, the planned scope and timing of the audit. We must also inform of significant audit findings during our audit, including any significant deficiencies in internal control that we identified.
We must also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the annual accounts and consolidated accounts, including the most important assessed risks for material misstatement, and are therefore the key audit matters. We describe these matters in the auditor's report unless law or regulation precludes disclosure about the matter.
In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Tradedoubler AB (publ) for the year 2020 and the proposed appropriations of the company's profit or loss.
We recommend to the general meeting of shareholders that the profit be appropriated (loss be dealt with) in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.
We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group's equity, consolidation requirements, liquidity and position in general.
The Board of Directors is responsible for the company's organisation and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the group's financial situation and ensuring that the company's organisation is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfill the company's accounting in accordance with law and handle the management of assets in a reassuring manner.
Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:
Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.
As part of an audit in accordance with generally accepted auditing standards in Sweden, we exercise professional judgment and maintain professional skepticism throughout the audit. The examination of the administration and the proposed appropriations of the company's profit or loss is based primarily on the audit of the accounts. Additional audit procedures performed are based on our professional judgment with starting point in risk and materiality. This means that we focus the examination on such actions, areas and relationships that are material for the operations and where deviations and violations would have particular importance for the company's situation. We examine and test decisions undertaken, support for decisions, actions taken and other circumstances that are relevant to our opinion concerning discharge from liability. As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss we assess whether the proposal is in accordance with the Companies Act.
The Board of Directors is responsible for that the corporate governance statement on pages 7-12 has been prepared in accordance with the Annual Accounts Act.
Our examination of the corporate governance statement is conducted in accordance with FAR´s auditing standard RevU 16 The auditor´s examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.
A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act.
The Board of Directors is responsible for the statutory sustainability report on pages 6-7, and that it is prepared in accordance with the Annual Accounts Act.
Our examination has been conducted in accordance with FAR's auditing standard RevR 12 The auditor´s opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.
A statutory sustainability report has been prepared.
Ernst & Young AB, and Jennifer Rock-Baley as auditor in charge, Box 7850, 103 99 Stockholm were appointed auditors of Tradedoubler AB (publ) by the general meeting of the shareholders on 7 May 2020 and has been the company's auditors since the financial year 2009.
Stockholm, 23 April 2021 Ernst & Young AB
AUTHORISED PUBLIC ACCOUNTANT
Member and Chairman of the Board of Directors since 2015.
Independent in relation to the company and the executive management. Dependent in relation to the company's major shareholders.
Education: MBA from IAE Paris, IT engineering graduate of EPITDA.
Co-founder and Chairman of the Board of Directors of Reworld Media S.A., Board Member and CEO of Sporever, Board Member of 50 Partners, Nextedia, Planet.fr, Leadmedia Group and Mobile Network Group.
Pascal was the Chairman of the board of Netbooster (Alternext Paris ALNBT), Director of Prosodie in London (now Cap Gemini), Chairman of the board of CPI Venture.
0 shares.
Member of the Board of Directors since 2015. Independent in relation to the company and the executive management. Dependent in relation to the company's major shareholders.
Born: 1978 Education: Business school in Paris.
Board Member and deputy CEO of Sporever.
CEO of La Tribune, Head of Projects at NextRadio TV. Deveopment Director at Axel Springer France and Media Sector Director at Deloitte.
Shareholding: 0 shares.
0 shares.
Member of the Board of Directors since 2016.
Independent in relation to the company and the executive management. Dependent in relation to the company's major shareholders.
Born: 1987
Other assignments: Web marketing director
at Reworld Media S.A. Former assignments:
Business Development Manager at La Tribune (financial Newspaper).
Shareholding:
Member of the Board of Directors since 2016.
Independent in relation to the company, the executive management and the company's major shareholders.
Born: 1971
Education: Studies in Economics at the Technical University of Berlin (TU Berlin).
Other assignments: Founder and CEO of Digital Forward GmbH and founder and CEO of Daytona Ventures GmbH as well as cofounder and CEO of ESP – eSales Performance Marketing GmbH.
CEO Blume 2000 new media AG and CEO and cofounder of Valentins GmbH.
Shareholding: 0 shares
Member of the Board of Directors since 2016.
Independent in relation to the company, the executive management and the company's major shareholders.
Born: 1969
Education: MBA, Finance Management, Edinburgh 2011; School of Economics & Management Stockholm, Handelshögskolan 2004; School of Economics Växjö, University degree, Economics, 1994.
Other assignments: CEO Resurs Bank
CEO Fortnox, CEO Eniro Sweden AV, Electrolux Sweden AB; Group COO Netbooster Group; CEO Guava (UK).
Shareholding:
0 shares.
Chief Executive Officer (CEO) since April 2014.
Born: 1976
Education: Studied Industrial Management and Engineering at the University of Applied Sciences in Munich.
ments: Matthias Stadelmeyer has held several leading positions within Tradedoubler such as Sales Director and Head of TD Technology in Germany, Regional Director for market unit DACH and Vice President Sales. Matthias started his career as Team leader for Online Marketing at CANCOM IT Systeme AG, Munich.
Based: Munich.
Holdings: 100,000 shares.
Chief Financial Officer (CFO) since October 2016.
Education: Degree in Finance from Stockholm University.
ments: Viktor joined Tradedoubler in March 2015 as Head of Group Accounting, was appointed Interim CFO in May 2016 and took on the position permanently in October 2016. Prior to that Viktor worked for Cision, an international PR software company and held a number of roles including Group Treasurer and Business Controller.
Based: Stockholm.
Holdings: 20,000 shares.
Chief Technical Officer (CTO) since November 2017.
Born: 1985
Education: Studied Engineering at Telecom Bretagne in France and Marketing at UCI in California.
ments: François joined Tradedoubler in December 2016 when the group acquired R-Advertising, an email marketing company in which he held the position of the CEO. Prior to that François founded RoyalCactus, a leading social & mobile gaming company.
Based: Aix-en- Provence, France.
Holdings: 0 shares.
w
Tradedoubler uses the key ratios of capital employed and solidity to enable the reader to assess the possibility of dividend, implementation of strategic investments and the group's ability to meet financial commitments. Further, Tradedoubler use the key ratio EBITDA excluding change related items for investors to be able to understand the underlying business performance.
Average number of permanent- and temporary employees during the year.
Total assets less current and long-term noninterest-bearing liabilities, including deferred tax liabilities.
Change related items refer to items of non-recurring nature and the purpose of disclosing these separately is to make it easier for the reader to understand the underlying year-on-year developments.
defined as the total of interest-bearing liabilities and pension provisions less cash and cash equivalents and interest-bearing receivables, divided by shareholders' equity.
Profit before tax and net financial items.
EBITDA is revenue before tax, net financial items and depreciation/amortisation and impairment.
EBITDA as a percentage of revenue.
Shareholders' equity divided by the average number of shares.
Gross profit as a percentage of total revenue.
Defined as profit before tax, plus interest expense, divided by interest expense.
Liquid assets less interest-bearing liabilities.
Profit after tax as a percentage of sales.
Operating profit as a percentage of revenue.
EBITDA is revenue before tax, net financial items and depreciation/amortisation and impairment.
Price of the share divided by shareholders' equity per share.
Operating profit plus interest income as a percentage of average capital employed, calculated as opening and closing capital employed divided by two.
Revenue for the period as a percentage of the average shareholders' equity, caculated as open and closing shareholders' equity divided by two.
Revenue of the year divided by the average number of shares after full dilution.
Total equity as a percentage of total assets.
Total current assets less cash and cash equivalents, short term investments and total current liabilities.
Tradedoubler AB Birger Jarlsgatan 57A SE-113 56 Stockholm Phone: +46 8 40 50 800 E-mail: [email protected]
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