Quarterly Report • Feb 2, 2017
Quarterly Report
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Tradedoubler year-end report January – December 2016
| Oct-Dec | Oct-Dec | Full year Full year | ||||
|---|---|---|---|---|---|---|
| FINANCIAL OVERVIEW, SEK M | 2016 | 2015 | Change % | 2016 | 2015 | Change %2 |
| Net sales excluding change related items | 343 | 400 | -14.2% | 1,339 | 1,629 | -17.8% |
| Gross profit excluding change related items | 7 8 |
8 5 |
-7.9% | 297 | 336 | -11.8% |
| Gross margin (%) | 22.7% | 21.2% | 22.2% | 20.7% | ||
| Operating costs excl. depr. and change related costs | -65 | -90 | -27.5% | -286 | -348 | -17.7% |
| EBITDA excluding change related items | 1 3 |
-6 | 1 1 |
-11 | ||
| EBITDA-margin (%) | 3.7% | -1.4% | 0.8% | -0.7% | ||
| Change related items 1 | -15 | -11 | -17 | -25 | ||
| EBITDA | -2 | -17 | -6 | -36 | ||
| Impairment goodwill | - | -72 | - | -72 | ||
| Operating profit (EBIT) | -33 | -107 | -51 | -145 | ||
| Net profit | -16 | -141 | -50 | -190 | ||
| Net investments in non-financial fixed assets | -9 | -16 | -36 | -44 | ||
| Cash flow from operating activities | 2 0 |
5 6 |
-64 | 1 9 |
||
| Liquid assets incl financial investments, at period's end | 210 | 347 | 210 | 347 | ||
| Net cash2 , at period's end |
1 6 |
100 | 1 6 |
100 | ||
| 1 |
1 For more information regarding change related items see page 7
2Current investment and liquid assets less interest-bearing liabilities
"In Q4 Tradedoubler had an improved financial performance with a positive trend in the underlying business and a significantly improved cost base.
The increase of the Gross Profit margin reflects this positive trend and a shift in the balance of the product mix. The newly established product TD ENGAGE has a higher margin than the traditional TD CONVERT business.
Efficiency measures that were initiated during the year decreased the cost base of the company significantly and led to a positive EBITDA result for Q4 and the financial year 2016 excluding change related items.
The good progress we made during 2016 will help us to realise our ambitious plans for 2017. We will continue to develop our targeting capabilities based on data which includes developments to further strengthen our tracking and machine-learning capabilities. During 2017 we will as well release new interfaces of our platform for our clients and partners.
These measures will strengthen our core products TD CONVERT and TD CONNECT as well as our new product TD ENGAGE and help us to expand our offering further to address a broader digital market and establish our presence in new growth regions outside Europe."
Stockholm – 2 February 2017 Matthias Stadelmeyer
If not explicitly stated, the disclosed financial information refers to reported numbers that are not adjusted for change related items nor changes in exchange rates. For more information regarding change related items see page 7.
Consolidated net sales during 2016 amounted to SEK 1,344 M (1,624). Excluding change related items net sales were SEK 1,339 M (1,629), a decline of 18 per cent or 15 per cent adjusted for changes in exchange rates.
Consolidated net sales during the fourth quarter 2016 were SEK 346 M (400). Excluding change related items, net sales were SEK 343 M (400). This was a decline of 14 per cent or 13 per cent adjusted for changes in exchange rates.
Gross profit during 2016 was SEK 302 M (332). Gross profit excluding change related items was SEK 297 M (336), which was a decline of 12 per cent or 10 per cent adjusted for changes in exchange rates.
Gross profit during the fourth quarter was SEK 81 M (85). Gross profit excluding change related items was SEK 78 M (85), a decrease of 8 per cent or 8 per cent adjusted for changes in exchange rates. The decline is mainly related to the loss of some larger customers.
Gross margin, excluding change related items, during 2016 was 22.2 per cent (20.7) and 22.7 per cent (21.2) in the fourth quarter. This improvement is largely explained by a decline of low margin revenue.
Operating costs, excluding depreciation, amounted to SEK 308 M (368) during 2016. Operating costs, excluding change related items and depreciation, were SEK 286 M (348), a decrease of 18 percent or 16 per cent adjusted for changes in exchange rates.
Operating costs, excluding depreciation, amounted to SEK 83 M (101) during the fourth quarter. Operating costs, excluding change related items and depreciation, were SEK 65 M (90). This was a decrease of 28 per cent or 26 per cent adjusted for changes in exchange rates. The reduced cost can mainly be explained by a reduction in the number of employees and various efficiency projects that has been put in place.
Operating profit before depreciation and amortisation (EBITDA) during 2016 was SEK -6 M (-36). Adjusted for change related items EBITDA amounted to SEK 11 M (-11). Depreciation and amortisation was SEK 45 M (109) and operating profit (EBIT) during amounted to SEK -51 M (-145).
Operating profit before depreciation and amortisation (EBITDA) in the fourth quarter was SEK -2 M (-17). Adjusted for change related items, EBITDA was SEK 13 M (-6). In December 2016 it was decided to close the office in Telford and move support functions to the local offices, in order to improve the support and increase the local presence. Operating costs classified as change related is mainly related to restructuring costs for moving staff from Telford to the local markets. Depreciation and amortisation was SEK 31 M (91) in the fourth quarter. During the fourth quarter a writedown of other intangible assets related to capitalised development was made of SEK 24 M (13), as a consequence of a different technical delivery strategy for TD ENGAGE. Operating profit (EBIT) amounted to SEK -33 M (-107).
EBITDA (SEK M) / EBITDA/GP (%), EXCLUDING CHANGE RELATED ITEMS
Net financial items during 2016 were SEK 9 M (-19) where of exchange rate effects were SEK -1.4 M (-6). Financial income and expenses amounted to SEK 10 M (-13) and were mainly affected by interest income, revaluations of short term investments and interest expense relating to the bond issue. During November and December 2016 Tradedoubler repurchased own bonds with a nominal value totalling SEK 54 M which increased the financial net with SEK 26 M.
Net financial items in the fourth quarter were SEK 22 M (-4) where of exchange rates effects were SEK 0.4 M (-0.6). Financial income and expenses amounted to SEK 22 M (-4).
Profit after tax during 2016 was SEK –50 M (-190), corporate income tax was SEK -7 M (-26). In the fourth quarter corporate income tax was SEK -5 M (-29) and profit after tax was SEK -16 M (-141).
If not explicitly stated, the disclosed financial information refers to reported numbers that are not adjusted for change related items nor changes in exchange rates. For more information regarding change related items see page 7.
Tradedoubler's segments mainly consists of TD CONVERT (previously Affiliate) and TD CONNECT (previously Technology). These both segments together sum up to Performance marketing. Within TD CONVERT the market units are DACH (Germany, Switzerland and Austria), France & Benelux (France, Belgium and Netherlands), Nordics (Sweden, Norway, Denmark, Finland and Poland), South (Italy, Brazil, Portugal and Spain) and UK & Ireland (UK and Ireland).
Tradedoubler's core business Performance Marketing includes TD CONVERT and TD CONNECT. Net sales referring to the recently launched TD ENGAGE are included in TD CONVERT.
Net sales within Performance Marketing during 2016 were SEK 1,329 M (1,602), which was a decrease of 17 per cent or 14 per cent adjusted for changes in exchange rates.
Net sales for TD CONVERT decreased by 17 per cent or 14 per cent adjusted for exchange rates. Net sales within TD CONNECT decreased by 17 per cent or 16 per cent adjusted for exchange rates.
Net sales within Performance Marketing during the fourth quarter were SEK 342 M (394), which was a decrease of 13 per cent or 12 per cent adjusted for changes in exchange rates. Net sales for TD CONVERT decreased by 13 per cent or 12 per cent adjusted for exchange rates, while net sales within TD CONNECT decreased by 15 per cent or 16 per cent adjusted for exchange rates.
EBITDA for Performance Marketing during 2016 was SEK 84 M (104). EBITDA for Performance Marketing during the fourth quarter was SEK 18 M (23).
Net sales within Tradedoubler's non-core business, "Other", during 2016 amounted to SEK 16 M (23), which was a decline of 31 per cent or 32 per cent adjusted for changes in exchange rates. During the fourth quarter "Other" net sales amounted to SEK 4 M (6), which was a decline of 30 per cent or 33 per cent adjusted for changes in exchange rates. "Other" is primarily constituted of the non-strategic campaign business, which is continuing to decline according to plan.
EBITDA was SEK 2.4 M (5) during 2016. EBITDA was SEK 0.6 M (0.6) during the fourth quarter.
Costs for group management and support functions during 2016 amounted to SEK 93 (145), a decline of 36 per cent or 36 per cent adjusted for changes in exchange rates. Costs during the fourth quarter were SEK 20 M (40), a decrease of 49 per cent or 48 per cent adjusted for changes in exchange rates. The decrease is mainly due to cost savings and efficiency improvements that has included a revised structure for group management and a reduction in administrative employees.
| SEK M | Oct-Dec | Oct-Dec | Full year | Full year |
|---|---|---|---|---|
| Net Sales | 2016 | 2015 | 2016 | 2015 |
| DACH | 4 7 |
5 4 |
186 | 200 |
| France & Benelux | 7 8 |
7 9 |
295 | 337 |
| Nordics | 8 9 |
8 5 |
308 | 316 |
| South | 3 6 |
3 8 |
142 | 169 |
| UK & Ireland | 8 1 |
127 | 357 | 531 |
| TD CONVERT | 332 | 382 | 1,287 | 1,552 |
| TD CONNECT | 1 0 |
1 2 |
4 1 |
5 0 |
| Total Performance Marketing | 342 | 394 | 1,329 | 1,602 |
| Other | 4 | 6 | 1 5 |
2 3 |
| Total Net Sales | 346 | 400 | 1,344 | 1,624 |
| EBITDA | ||||
| DACH | 1 | 4 | 1 1 |
1 4 |
| France & Benelux | 1 | 1 | 4 | 9 |
| Nordics | 7 | 8 | 2 3 |
2 8 |
| South | 2 | 1 | 1 2 |
1 3 |
| UK & Ireland | 0 | 6 | 1 2 |
2 4 |
| TD CONVERT | 11 | 20 | 62 | 88 |
| TD CONNECT | 6 | 3 | 2 2 |
1 6 |
| Total Performance Marketing | 18 | 23 | 84 | 104 |
| Other | 1 | 1 | 2 | 5 |
| Group mgmt & support functions | -20 | -40 | -93 | -145 |
| Total EBITDA | -2 | -17 | -6 | -36 |
| Depreciation and impairment | -31 | -91 | -45 | -109 |
| Operating profit as in consolidated income statement | -33 | -107 | -51 | -145 |
| EBITDA/Net sales, % | ||||
| DACH | 2.2 | 8.2 | 5.9 | 6.9 |
| France & Benelux | 1.4 | 0.6 | 1.2 | 2.6 |
| Nordics | 7.4 | 9.6 | 7.5 | 8.8 |
| South | 6.1 | 2.7 | 8.7 | 7.6 |
| UK & Ireland | 0.6 | 5.1 | 3.3 | 4.6 |
| TD CONVERT | 3.5 | 5.3 | 4.8 | 5.6 |
| TD CONNECT | 60.9 | 20.9 | 54.3 | 42.9 |
| Total Performance Marketing | 5.2 | 5.8 | 6.3 | 6.5 |
Other 13.7 10.1 15.7 23.0
Total EBITDA Margin -0.6 -4.1 -0.5 -2.2
Segments include change related items, see page 7 for more details about the segments affected.
Cash flow from operating activities, before changes in working capital, amounted to SEK -19 M (-38) during 2016 and related to EBITDA adjusted for paid taxes, paid interest and non-cash items. Changes in working capital were SEK -45 M (57). As communicated in the fourth quarter 2015 the change in working capital was largely caused by an abnormal increase in prepayments from customers. The prepayment balance came down to a more normalised level in the second quarter of 2016 and thus impacted the cash flow negatively in 2016.
Net investments in tangible and intangible assets during 2016 amounted to SEK 36 M (44). These investments mainly related to product development.
Cashflow from short term investments amounted to SEK 52 M (168). Cashflow amounted to SEK -83 M (140).
Cash flow from operating activities before changes in working capital was SEK 4 M (-2) in the fourth quarter 2016 and related to EBITDA reduced with paid taxes, paid interest and non-cash items. Changes in working capital were SEK 16 M (58) and the positive working capital was mainly explained by seasonal effects in prepayments from customers.
Net investments in tangible and intangible assets during the fourth quarter amounted to SEK 9 M (16). Cash flow amounted to SEK -13 M (45) and net cash increased by SEK 40 M (36).
During November and December Tradedoubler repurchased its own bond to a nominal value of SEK 54 M which impacted the cash flow with SEK -29 M.
Tradedoubler has invested parts of the proceeds from the bond issue in December 2013 in interest bearing financial
instruments. At the end of the fourth quarter 2016 a total of SEK 41 M (94) was placed in interest bearing financial instruments.
Cash and cash equivalents at the end of 2016 amounted to SEK 169 (253) M and were affected by translation differences of SEK -0.5 M (-4). In addition, SEK 41 M (94) was invested in interestbearing financial instruments. The sum of cash and cash equivalents and interest-bearing financial assets was therefore SEK 210 M (347). Interest-bearing liabilities amounted to SEK 194 M (247) and related to the five-year unsecured bond issue with maturity date in the fourth quarter 2018. The decrease is due to the repurchase of the bond of SEK 54 M. Net cash hence amounted to SEK 16 M (100) at the end of 2016.
Consolidated shareholders' equity amounted to SEK 207 M (248) at the end of 2016 and the equity/asset ratio was 23.7 per cent (23.4). The return on equity during the rolling 12 months ending December 2016 was negative.
For comparability reasons and to indicate the underlying performance, Tradedoubler adjust for change related items. The following items affect the comparability in this report.
During 2016 change related items amounted to SEK -17 M and included change related revenue of SEK 5 M related to a reverse of the prepayment accrual made in year-end 2014. Change related costs amounted to SEK -22 M and were related to severance payments of SEK -6 M, costs for the long-term incentive program of SEK -1 M (Group Management) and restructuring costs of SEK -15 M, which mainly is related to the closing of the office in Telford.
During 2015 change related items amounted to SEK -25 M and included change related revenue of SEK 0.8 M referring to badwill in the acquisition of Adnologies (Group Management) and an adjustment for errors in recurring invoicing for one large customer of SEK -5 M (TD CONNECT).
Change related costs amounted to SEK -20 M and included costs related to the acquisition of Adnologies of SEK -2 M (Group Management), costs for closing down the office in Norway of SEK -2 M (Nordics), severance payments of SEK -2 M (South), SEK -1 M (DACH) and SEK -2 M (Group Management) and additional severance payments related to the announced efficiency improvements in December 2015 of SEK -11 M mainly affecting the Group management segment, costs related to an office move in the UK and a revaluation of future cash flows related to unallocated payments reducing costs by SEK 5 M.
Tradedoubler's operations, particularly within Performance Marketing, fluctuate with the development of e-commerce and online advertising. There are seasonal variations particularly within e-commerce. The highest level of activity is before Christmas, which implies that the fourth quarter is normally the strongest for Tradedoubler.
The parent company's net sales amounted to SEK 70 M (89) during 2016 and to SEK 14 M (8) during the fourth quarter. Revenue primarily consisted of internal licensing revenue to subsidiaries.
Operating profit (EBIT) was SEK -66 M (-69) during 2016 and SEK -42 M (-46) during the fourth quarter.
Net financial items amounted to SEK 23 M (39) during 2016 and to SEK 26 M (-14) during the fourth quarter. Dividends from group companies impacted the period with SEK 15 M (66). Changes in exchange rates have impacted 2016 with SEK –1.2 M (-2.1).
Corporate taxes were SEK -0.2 M (-24) during 2016 and SEK -0,2 M (-26) during the fourth quarter. Profit after tax was SEK -43 M (-54) during 2016 and SEK -17 M (-86) during the fourth quarter.
The parent company's receivables from group companies amounted to SEK 72 M (58) at the end of the fourth quarter 2016, of which none (0) were non-current. The parent company's liabilities to group companies were SEK 109 M (117), of which none (0) were non-current. Cash and cash equivalents amounted to SEK 124 M (182) at the end of the fourth quarter 2016.
During the fourth quarter 2013 the parent company issued a bond loan with the nominal value of SEK 250 M. Parts of the proceeds from the bond loan have been invested in short term investments. During November and December Tradedoubler repurchased a total nominal value of SEK 54 M of its own bond, hence the loan was reduced.
Deferred tax assets amounted to SEK 14 M (14) at the end of the fourth quarter 2016 and related to previous Group loans. No deferred tax has been booked on loss according to the revised assumptions of the possibility to use loss carried forward that was made in the fourth quarter 2015. For more information, see notes to the consolidated financial statements, note C2 Critical estimates and judgements, in the Annual Report 2015.
At the end of the fourth quarter 2016, Tradedoubler's staff corresponded to 344 (408) full-time equivalents (FTE) and included permanent and temporary employees as well as consultants. During the fourth quarter 2016 total headcount decreased from 357 to 344.
In June Tradedoubler announced the opening of an office in Singapore to expand its offering to Asia. Tradedoubler is based in the same Singapore office as Reworld Media, its largest shareholder. Since 2013 Reworld has successfully established a number of online titles in the Asia/Pacific region and the two groups will work together to maximise potential traffic and database synergies.
Also in June Tradedoubler acquired a minority share in the video company DynAdmic. Through its partnership with DynAdmic Tradedoubler is the first company to bring video into the performance arena. The holding is reported as a financial asset in the consolidated balance sheet at fair value. The fair value was considered unchanged per 31 December 2016.
On 14 July 2016 Tradedoubler purchased a share in the French affiliate marketing company R-Advertising, which will allow Tradedoubler to expand its performance-based offering in France. On 12 December 2016 the remaining shares in the company were acquired.
During November and December Tradedoubler repurchased own bonds for SEK 27.9 M which nominal value amounted to a total of SEK 54 M.
In December 3,120,000 C-shares in own custody were converted to ordinary shares.
Tradedoubler divides risks into market-related risks, operational risks, financial risks and legal risks. These risks are described on page 8 in the 2015 Annual Report. No significant risks and uncertainty factors have arisen in addition to those described in the 2015 annual report.
For information regarding critical estimates and judgements in the financial statements, see note C2 in the 2015 annual report. No critical estimates or judgements are considered to have arisen since the latest submitted annual report.
The Board proposes that no dividend should be declared for 2016 (SEK 0 per share). 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.
Aside from transactions in the normal course of business, to board and senior executives the following fourth party transactions have occurred during 2016. Reworld Media has, as a publisher in France received remuneration of 50 KEUR and since January 2016 Reworld Media is providing HR-support to the French subsidiary at the cost of 3 KEUR per month. Tradedoubler's Singapore operation is conducted from the same office as Reworld Media. The arm's length principle has been applied on all of these transactions.
The Annual General Meeting 2017 will be held on 4 May 2017 at Tradedoubler's premises on Birger Jarlsgatan 57 A, Stockholm.
In accordance with the resolution of the Annual General Meeting 2016, a Nomination Committee has been appointed consisting of representatives of the three largest shareholders at the end of August, as well as the Chairman of the Board Pascal Chevalier. The owner representatives are Cédric Vincent representing Reworld Media S.A. (Chairman of the Nomination Committee) and Yi Shi.
Shareholders wishing to present proposals to the Nomination Committee for the 2016 Annual General Meeting can submit them to Viktor Wågström by e-mail: [email protected].
Information about the work of the Nomination Committee may be found on Tradedoubler's home page www.tradedoubler.com.
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 17 countries involving nine different currencies, with Euro (EUR) and British pounds (GBP) representing the majority share. During the fourth quarter 2016 approximately 48 (43) per cent of group sales were made in EUR and approximately 23 (32) per cent in GBP. Approximately 30 (32) per cent of the group's operational costs were in EUR and approximately 30 (26) per cent in GBP. Net investments in foreign currency or transaction risks are not currently hedged. Exposure attributable to exchange rate fluctuation 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.
In June 2016 Tradedoubler acquired 40 per cent of the company R- Advertising. As of 12 December 2016 Tradedoubler acquired, through a new acquisition agreement, the remaining 60 per cent stake in R-Advertising. The purchase price for the remaining 60 per cent amounts to SEK 19 M. This includes an initial purchase price of SEK 4 M and an estimated additional purchase price of a total of SEK 15 M. The additional purchase price is divided into two sections, the first of SEK 3 M will be payable in 2017 based on the financial performance of the acquired company during the first quarter of 2017 and the second instalment of SEK 12 M will be payable in 2018 based on the financial performance of the acquired company for the year 2017.
The initial purchase price of SEK 4 M has been paid with 739,446 shares valued using the share price prevailing on the transaction date. The first additional purchase price of SEK 3 M will be paid in shares. The final number of shares that will need to be granted depends on the actual outcome of the additional purchase price. Regarding the second additional purchase price of SEK 12 M Tradedoubler has an opportunity to choose whether this should be settled in cash or in shares.
R-Advertising has from the date when the company became a wholly owned subsidiary of Tradedoubler contributed to Group with sales and operating profit of SEK 2.7 M and SEK 1.6 M (of which SEK 1.2 M are classified as change related).
The company is engaged in affiliate marketing and strengthens Tradedoubler's current position on the French market.
Goodwill in the Group increased by SEK 22.8 M related to this acquisition.
Tradedoubler's chairman of the board who hold an indirect minority share in R-Advertising has not participated in decisions regarding the investment.
| Preliminary Purchase price allocation: | SEK 000s |
|---|---|
| Initial Purchase price for 60% | 4,078 |
| Estimated contingent additional purchase price | 15,351 |
| Fair value of previous acquired 40% | 0 |
| Total Purchase price | 19,429 |
| Fair value of identifiable assets and liabilities | |
| Fixed assets | 583 |
| Accounts receivables | 10,394 |
| Other current receivables | 3,779 |
| Cash and cash equivalent | 3,847 |
| Current Liabilities | -22,420 |
| Fair value of identifiable assets and liabilities | -3,818 |
| Goodwill | 23,247 |
| Total Purchase price | 19,429 |
| Cashflow effect | |
| Total Purchase price | 19,429 |
| of which paid with own shares | -4,078 |
| of which estimated contingent additional purchase price | -15,351 |
| Cash and cash equivalent in aquired company | 3,750 |
| Total cashflow effect | 3,750 |
This interim report is prepared in accordance with IAS 34, interim financial reporting and the Swedish annual accounts act. Except the decrease in the bond loan the nature of financial assets and liabilities is essentially the same as at 31 December 2015. The carrying values are the same as the fair values with the exception of the bond loan which fair value according to level 2 amounts to SEK 94 M (based on liquid trading price) compared to the carrying amount of SEK 194 M. No new or amended standards have been applied in 2016. For information on the accounting policies applied, see the 2015 annual report.
The total number of shares at the end of the fourth quarter 2016 was 45,927,449 (45,927,449), of which 2,855,554 (3,595,000) were in own custody after use of own shares in the acquisition of R-Advertising. In December the 3,120,000 Cshares were converted to ordinary shares. The average number of outstanding shares during 2016 was 42,373,529 (42,332,449).
Earnings per share, before and after dilution, amounted to SEK -1.18 (-4.48) during 2016 and to SEK -0.38 (-3.33) during the fourth quarter. Equity per share amounted to SEK 4.50 (5.40) at the end of 2016.
The share price closed at SEK 4.85 on the final trading day of the fourth quarter 2016, which was lower than at year-end 2015 when the share price closed at SEK 5.55.
The company's long term financial targets, adopted by the board of directors, are to grow net sales in excess of 5 per cent annually in local currency and deliver an EBITDA/Gross profitratio in excess of 20 per cent over a business cycle.
The annual report 2016 will be available on Tradedoubler´s website from 13 April 2017. Shareholders who would like to receive the annual report by post are requested to contact Tradedoubler at [email protected] or by telephone +46 8 405 08 00.
Interim report Jan-Mar 2017 4 May 2017 Interim report Jan-Jun 2017 30 August 2017 Interim report Jan-Sep 2017 7 November 2017 Year-end report 2017 6 February 2018
Matthias Stadelmeyer, President and CEO, telephone +46 8 405 08 00 Viktor Wågström, interim CFO, telephone +46 8 405 08 00 E-mail: [email protected]
Both an English version and a Swedish version of this report have been prepared. In the event of a difference between the two reports, the Swedish version shall prevail.
Tradedoubler discloses the information provided herein pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was released for publication on 2 February 2017 at 08.00 a.m. CET. Numerical data in brackets refers to the corresponding periods in 2015 unless otherwise stated. Rounding off differences may arise.
This interim report has not been reviewed by the company's auditor Ernst & Young AB.
The Board of Directors and the CEO declare that the year-end report for the period January to December 2016 provides a true and fair overview of the Parent Company's and the Group's operations, financial position and results of operations as well as describing the material risks and uncertainties facing the Parent Company and other companies in the Group.
Stockholm, 2 February 2017
Pascal Chevalier Gautier Normand Chairman Board member
Jérémy Parola Erik Siekmann Board member Board member
Nils Carlsson Matthias Stadelmeyer Board member President and CEO
| Oct-Dec | Oct-Dec | Full year | Full year | |
|---|---|---|---|---|
| SEK 000s | 2016 | 2015 | 2016 | 2015 |
| Net Sales | 346,128 | 400,041 | 1,343,994 | 1,624,264 |
| Cost of goods sold | -265,049 | -315,275 | -1,041,753 | -1,292,420 |
| Gross profit | 81,079 | 84,767 | 302,241 | 331,844 |
| Selling expenses | -57,996 | -60,240 | -210,397 | -218,951 |
| Administrative expenses | -22,573 | -32,214 | -86,379 | -118,313 |
| Development expenses | -33,830 | -28,016 | -56,736 | -68,242 |
| Writedown goodwill | - | -71,725 | - | -71,725 |
| Operating profit | -33,320 | -107,428 | -51,271 | -145,387 |
| Net financial items | 22,427 | -4,294 | 8,614 | -18,663 |
| Profit before tax | -10,893 | -111,722 | -42,657 | -164,049 |
| Tax | -5,208 | -29,054 | -7,434 | -25,776 |
| Net Profit | -16,101 | -140,776 | -50,091 | -189,826 |
All earnings accrue to the parent company's shareholders.
| Oct-Dec | Oct-Dec | Full year | Full year | |
|---|---|---|---|---|
| SEK 000s | 2016 | 2015 | 2016 | 2015 |
| Profit for the period, after tax | -16,101 | -140,776 | -50,091 | -189,826 |
| Other comprehensive income | ||||
| Items that subsequently will be reversed in the income statement | ||||
| Translation difference, net after tax | -1,911 | -9,091 | 3,965 | -3,114 |
| Total comprehensive income for the period, after tax | -18,012 | -149,867 | -46,126 | -192,940 |
| Comprehensive income attributable to: | ||||
| Parent company shareholders | -18,012 | -149,867 | -46,126 | -192,940 |
| Oct-Dec | Oct-Dec | Full year | Full year | |
|---|---|---|---|---|
| SEK | 2016 | 2015 | 2016 | 2015 |
| Earnings per share | -0.38 | -3.33 | -1.18 | -4.48 |
| Number of Shares | ||||
| Weighted average | 42,496,770 | 42,332,449 | 42,373,529 | 42,332,449 |
| The earnings per share above apply before and after dilution. |
| Oct-Dec | Oct-Dec | Full year | Full year | |
|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | |
| Gross profit (GP) / revenue (%) | 23.4 | 21.2 | 22.5 | 20.4 |
| EBITDA / revenue (%) | -0.6 | -4.1 | -0.5 | -2.2 |
| EBITDA / gross profit (GP) (%) | -2.7 | -19.6 | -2.0 | -10.9 |
| Equity/assets ratio (%) | 23.7 | 23.4 | 23.7 | 23.4 |
| Return on equity (12 months) (%) | -22.0 | -55.1 | -22.0 | -55.1 |
| Average number of employees | 313 | 361 | 336 | 355 |
| Return on Capital Employed (12 months) (%) | -5.4 | -23.7 | -5.4 | -23.7 |
| Working Capital end of period (SEK M) | -162 | -199 | -162 | -199 |
| Cash flow from operating activities per share, SEK | 0.5 | 1.3 | -1.5 | 0.5 |
| Equity per share, SEK | 4.5 | 5.4 | 4.5 | 5.4 |
| Stock price at the end of the period, SEK | 4.9 | 5.6 | 4.9 | 5.6 |
| 31 Dec | 31 Dec | |
|---|---|---|
| SEK 000s | 2016 | 2015 |
| Assets | ||
| Non-current assets | ||
| Goodwill | 273,073 | 246,140 |
| Intangible fixed assets | 52,226 | 61,170 |
| Tangible fixed assets | 6,185 | 6,231 |
| Other non-current receivables | 4,882 | 5,341 |
| Shares and participation in other companies | 11,128 | - |
| Deferred tax assets | 19,143 | 21,558 |
| Total non-current assets | 366,636 | 340,441 |
| Accounts receivable | 260,902 | 335,538 |
| Tax assets | 7,733 | 11,843 |
| Other current receivables | 25,215 | 28,059 |
| Short term investments | 40,622 | 93,641 |
| Cash & cash equivalents | 169,198 | 252,886 |
| Total current assets | 503,671 | 721,967 |
| Total assets | 870,306 | 1,062,408 |
| Shareholders' equity and liabilities | ||
| Shareholders' equity | 206,529 | 247,931 |
| Deferred tax liabilities | 711 | 1,281 |
| Other provisions | 930 | 1,179 |
| Bond loan | 193,856 | 246,766 |
| Contingent additional purchase price long term | 12,437 | - |
| Total non-current liabilities | 207,934 | 249,226 |
| Accounts payable | 22,638 | 14,466 |
| Current liabilities to publishers | 250,318 | 302,350 |
| Tax liabilities | 4,606 | 2,303 |
| Contingent additional purchase price short term | 2,914 | - |
| Other current liabilities | 175,368 | 246,131 |
| Total current liabilities | 455,843 | 565,250 |
| Total shareholder´s equity and liabilities | 870,306 | 1,062,408 |
| Oct-Dec | Oct-Dec | Full year | Full year | |
|---|---|---|---|---|
| SEK 000s | 2016 | 2015 | 2016 | 2015 |
| Opening balance | 220,420 | 398,269 | 247,931 | 441,341 |
| Total comprehensive income for the period | -18,012 | -149,868 | -46,126 | -192,940 |
| Equity-settled share-based payments | 43 | -470 | 645 | -470 |
| Decrease of shares in own custody | 4,078 | - | 4,078 | - |
| Repurchase of shares | - | - | - | -1,248 |
| New share issue | - | - | - | 1,248 |
| Closing balance | 206,529 | 247,931 | 206,529 | 247,931 |
All capital accrues to the parent company's shareholders.
| Oct-Dec | Oct-Dec | Full year | Full year | |
|---|---|---|---|---|
| SEK 000s | 2016 | 2015 | 2016 | 2015 |
| Operating activities | ||||
| Profit before tax | -10,908 | -111,722 | -42,657 | -164,049 |
| Adjustments for items not included in cashflow | 14,904 | 112,065 | 22,060 | 130,258 |
| Income taxes paid/received | -366 | -1,964 | 1,710 | -3,880 |
| Cashflow from operating activities before changes in working capital | 3,630 | -1,622 | -18,887 | -37,671 |
| Changes in working capital | 16,195 | 57,891 | -44,855 | 56,750 |
| Cashflow from operating activities | 19,825 | 56,269 | -63,742 | 19,079 |
| Investing activities | ||||
| Investments in intangible assets | -7,652 | -13,836 | -33,613 | -37,936 |
| Investments in tangible assets | -894 | -1,924 | -2,132 | -6,122 |
| Investments in financial assets | 525 | 5 | -10,799 | 193 |
| Aquisition and disposal of subsidiaries | 3,750 | - | 3,750 | -2,843 |
| Short term investments | - | - | - | -31,518 |
| Sale of short term investments | 180 | 4,175 | 51,935 | 199,356 |
| Cashflow from investing activities | -4,092 | -11,580 | 9,141 | 121,130 |
| Financing activities | ||||
| New share issues | - | - | - | 1,248 |
| Repurchase of own shares | - | - | - | -1,248 |
| Repurchase of own bond | -28,552 | - | -28,552 | - |
| Cashflow from financing activities | -28,552 | 0 | -28,552 | 0 |
| Cashflow for the period | -12,818 | 44,689 | -83,153 | 140,208 |
| Cash and cash equivalents | ||||
| On the opening date | 182,904 | 209,112 | 252,886 | 116,747 |
| Translation difference in cash and cash equivalents | -887 | -916 | -536 | -4,070 |
| Cash and cash equivalents on the closing date | 169,198 | 252,886 | 169,198 | 252,886 |
| Adjustments for non-cash items | ||||
| Depreciation and impairment | 31,118 | 90,837 | 45,102 | 109,261 |
| Other | -16,214 | 21,228 | -23,042 | 20,997 |
| Total non-cash items | 14,904 | 112,065 | 22,060 | 130,258 |
| Oct-Dec | Oct-Dec | Full year | Full year | |
|---|---|---|---|---|
| SEK 000s | 2016 | 2015 | 2016 | 2015 |
| Net Sales | 13,580 | 7,696 | 69,762 | 88,649 |
| Cost of goods sold | -2,466 | -1,270 | -7,144 | -5,665 |
| Gross profit | 11,114 | 6,426 | 62,618 | 82,984 |
| Selling expenses | -95 | -243 | -421 | -254 |
| Administrative expenses | -22,069 | -29,537 | -80,928 | -100,331 |
| Development expenses | -31,284 | -22,617 | -46,970 | -51,823 |
| Operating profit | -42,333 | -45,972 | -65,702 | -69,424 |
| Net financial items | 25,670 | -14,020 | 23,227 | 39,165 |
| Profit before tax | -16,664 | -59,992 | -42,475 | -30,259 |
| Tax | -190 | -25,557 | -190 | -23,888 |
| Net profit | -16,853 | -85,549 | -42,664 | -54,147 |
| 31 Dec | 31 Dec | |
|---|---|---|
| SEK 000s | 2016 | 2015 |
| Assets | ||
| Intangible assets | 52,327 | 61,170 |
| Equipment, tools, fixtures and fittings | 2,251 | 467 |
| Participation in group companies | 189,263 | 158,700 |
| Deferred tax assets | 14,033 | 14,223 |
| Total non-current assets | 257,874 | 234,560 |
| Accounts receivable | 3,230 | 5,892 |
| Receivables from Group companies | 71,476 | 57,753 |
| Tax assets | 1,014 | 1,014 |
| Other current receivables | 6,892 | 9,251 |
| Short term investments | 40,622 | 93,641 |
| Cash & cash equivalents | 123,676 | 182,258 |
| Total current assets | 246,910 | 349,810 |
| Total assets | 504,783 | 584,370 |
| Shareholders' equity and liabilities | ||
| Shareholders equity | 93,802 | 131,744 |
| Bond loan | 193,856 | 246,766 |
| Contingent additional purchase price long term | 12,437 | - |
| Total non-current liabilities | 206,293 | 246,766 |
| Accounts payable | 12,744 | 6,434 |
| Liabilities to Group companies | 108,546 | 116,534 |
| Contingent additional purchase price short term | 2,914 | - |
| Other liabilities | 80,485 | 82,892 |
| Total current liabilities | 204,688 | 205,859 |
| Total shareholder´s equity and liabilities | 504,783 | 584,370 |
| Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar | Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar | |
|---|---|---|---|---|---|---|---|---|
| SEK 000s | 2016 | 2016 | 2016 | 2016 | 2015 | 2015 | 2015 | 2015 |
| Net Sales | 346,128 | 303,811 | 321,732 | 372,323 | 400,041 | 378,239 | 413,958 | 432,025 |
| Cost of goods sold | -265,049 | -233,990 | -251,042 | -291,673 | -315,275 | -299,270 | -335,850 | -342,025 |
| Gross profit | 81,079 | 69,821 | 70,690 | 80,650 | 84,767 | 78,969 | 78,108 | 90,000 |
| Total costs | -114,399 | -70,795 | -77,692 | -90,626 | -192,195 | -87,822 | -97,421 | -99,793 |
| Operating profit | -33,320 | -974 | -7,001 | -9,976 | -107,428 | -8,853 | -19,312 | -9,793 |
| Net financial items | 22,427 | -4,271 | -4,441 | -5,101 | -4,294 | -5,559 | -6,724 | -2,086 |
| Profit before tax | -10,893 | -5,245 | -11,442 | -15,078 | -111,722 | -14,412 | -26,036 | -11,879 |
| Tax | -5,208 | -955 | 410 | -1,680 | -29,054 | -2,665 | 3,992 | 1,950 |
| Net profit | -16,101 | -6,199 | -11,032 | -16,758 | -140,776 | -17,077 | -22,044 | -9,929 |
| 31 Dec | 30 Sep | 30 Jun | 31 Mar | 31 Dec | 30 Sep | 30 Jun | 31 Mar | |
|---|---|---|---|---|---|---|---|---|
| SEK 000s | 2016 | 2016 | 2016 | 2016 | 2015 | 2015 | 2015 | 2015 |
| Assets | ||||||||
| Intangible fixed assets | 325,298 | 326,671 | 317,975 | 312,103 | 307,310 | 393,407 | 388,545 | 388,234 |
| Other fixed assets | 41,337 | 42,800 | 41,919 | 31,277 | 33,130 | 59,911 | 68,703 | 65,335 |
| Current receivables | 293,851 | 295,296 | 284,780 | 296,718 | 375,440 | 363,608 | 433,488 | 416,195 |
| Short term investments | 40,622 | 40,783 | 68,688 | 91,817 | 93,641 | 101,223 | 105,097 | 200,357 |
| Cash & cash equivalents | 169,198 | 182,904 | 158,002 | 230,228 | 252,886 | 209,112 | 218,200 | 165,078 |
| Total assets | 870,306 | 888,453 | 871,364 | 962,143 | 1,062,408 | 1,127,261 | 1,214,034 | 1,235,199 |
| Shareholders' equity and liabilities | ||||||||
| Shareholders' equity | 206,529 | 220,420 | 221,580 | 230,055 | 247,931 | 398,269 | 411,462 | 434,092 |
| Long-term non-interest bearing debt | 14,078 | 1,873 | 1,765 | 1,854 | 2,460 | 1,111 | 8,124 | 8,431 |
| Long-term interest bearing debt | 193,856 | 247,584 | 247,311 | 247,039 | 246,766 | 246,494 | 246,221 | 245,949 |
| Current non-interest bearing debt | 455,843 | 418,577 | 400,708 | 483,195 | 565,250 | 481,388 | 548,227 | 546,727 |
| Total shareholder´s equity and | ||||||||
| liabilities | 870,306 | 888,453 | 871,364 | 962,143 | 1,062,408 | 1,127,261 | 1,214,034 | 1,235,199 |
| Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar | Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar | |
|---|---|---|---|---|---|---|---|---|
| SEK 000s | 2016 | 2016 | 2016 | 2016 | 2015 | 2015 | 2015 | 2015 |
| Operating activities | ||||||||
| Profit before tax | -10,908 | -5,230 | -11,442 | -15,078 | -111,722 | -14,412 | -26,036 | -11,879 |
| Adjustments for items not included in cash flow |
14,904 | 368 | 4,957 | 1,831 | 112,065 | 1,721 | 12,163 | 4,310 |
| Tax paid | -366 | -1,000 | 2,006 | 1,070 | -1,964 | -2,010 | 87 | 8 |
| Cash flow from changes in working capital |
16,195 | 10,971 | -71,825 | -195 | 57,891 | 7,963 | -18,253 | 9,150 |
| Cash flow from operating activities | 19,825 | 5,108 | -76,304 | -12,372 | 56,269 | -6,739 | -32,040 | 1,589 |
| Cash flow from investing activities | -4,092 | 18,939 | 3,731 | -9,437 | -11,580 | 714 | 86,224 | 45,772 |
| Cash flow from financing activities | -28,552 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash flow for the period | -12,818 | 24,048 | -72,574 | -21,809 | 44,689 | -6,025 | 54,184 | 47,360 |
| Cash and cash equivalents | ||||||||
| On the opening date | 182,904 | 158,002 | 230,228 | 252,886 | 209,112 | 218,204 | 165,079 | 116,748 |
| Translation difference | -887 | 854 | 347 | -849 | -916 | -3,067 | -1,059 | 971 |
| Cash and cash equivalents on the closing date |
169,198 | 182,904 | 158,002 | 230,228 | 252,886 | 209,112 | 218,204 | 165,079 |
| Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar | Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar | |
|---|---|---|---|---|---|---|---|---|
| 2016 | 2016 | 2016 | 2016 | 2015 | 2015 | 2015 | 2015 | |
| Gross profit (GP) / revenue (%) | 23.4 | 23.0 | 22.0 | 21.7 | 21.2 | 20.9 | 18.9 | 20.8 |
| EBITDA / revenue (%) | -0.6 | 1.2 | -0.7 | -1.4 | -4.1 | -0.8 | -3.1 | -0.8 |
| EBITDA / gross profit (GP) (%) | -2.7 | 5.2 | -3.2 | -6.6 | -19.6 | -3.8 | -16.7 | -3.9 |
| Equity/assets ratio (%) | 23.7 | 24.9 | 25.5 | 23.9 | 23.4 | 35.5 | 34.0 | 35.3 |
| Return on equity last 12 months (%) | -22.0 | -56.5 | -58.7 | -59.2 | -55.1 | -27.6 | -22.5 | -20.4 |
| Average number of employees | 313 | 330 | 342 | 359 | 361 | 352 | 360 | 346 |
| Return on Capital Employed last 12 months (%) |
-5.4 | -22.2 | -23.2 | -24.8 | -23.7 | -14.9 | -11.7 | -10.3 |
| Working capital at the end of the period (SEK M) |
-162 | -130 | -122 | -193 | -199 | -127 | -124 | -144 |
| Cash flow from operating activities per share, SEK |
0.5 | 0.1 | -1.8 | -0.3 | 1.3 | -0.2 | -0.8 | 0.0 |
| Equity per share, SEK | 4.5 | 4.8 | 4.8 | 5.0 | 5.4 | 8.7 | 9.7 | 10.3 |
| Stock price at the end of the period, SEK |
4.9 | 5.5 | 6.3 | 5.5 | 5.6 | 6.9 | 7.1 | 7.6 |
| Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar | Oct-Dec | Jul-Sep | Apr-Jun | Jan-Mar | |
|---|---|---|---|---|---|---|---|---|
| SEK M | 2016 | 2016 | 2016 | 2016 | 2015 | 2015 | 2015 | 2015 |
| DACH | ||||||||
| Net sales | 47.5 | 43.1 | 44.8 | 50.5 | 53.9 | 44.9 | 50.6 | 50.5 |
| EBITDA | 1.0 | 3.4 | 2.3 | 4.3 | 4.4 | 2.0 | 3.5 | 3.8 |
| France & Benelux | ||||||||
| Net sales | 77.8 | 64.6 | 68.6 | 83.8 | 78.5 | 77.1 | 79.4 | 101.8 |
| EBITDA | 1.1 | 0.2 | 0.0 | 2.3 | 0.5 | 3.4 | 1.5 | 3.3 |
| Nordics | ||||||||
| Net sales | 89.3 | 70.5 | 68.5 | 79.5 | 84.8 | 77.8 | 74.2 | 79.1 |
| EBITDA | 6.6 | 6.2 | 5.1 | 5.2 | 8.1 | 7.6 | 7.1 | 5.0 |
| South | ||||||||
| Net sales | 36.3 | 36.2 | 33.0 | 36.3 | 37.9 | 42.8 | 44.0 | 44.1 |
| EBITDA | 2.2 | 4.2 | 2.2 | 3.7 | 1.0 | 4.2 | 4.4 | 3.3 |
| UK & Ireland | ||||||||
| Net sales | 81.0 | 77.5 | 93.3 | 105.5 | 127.0 | 118.6 | 151.0 | 134.0 |
| EBITDA | 0.5 | 3.1 | 2.7 | 5.4 | 6.4 | 5.4 | 7.0 | 5.7 |
| TD CONNECT | ||||||||
| Net sales | 10.2 | 9.1 | 9.7 | 12.1 | 12.1 | 12.8 | 8.0 | 16.8 |
| EBITDA | 6.2 | 5.6 | 5.0 | 5.5 | 2.5 | 5.9 | 1.2 | 6.6 |
| Other | ||||||||
| Net sales | 4.1 | 2.8 | 3.8 | 4.7 | 5.9 | 4.1 | 6.7 | 5.8 |
| EBITDA | 0.6 | 0.4 | 0.7 | 0.8 | 0.6 | 1.4 | 2.7 | 0.5 |
| Group management & support functions | ||||||||
| Net sales | - | - | - | - | - | - | - | - |
| EBITDA | -20.4 | -19.5 | -20.4 | -32.5 | -40.1 | -32.9 | -40.4 | -31.6 |
| Total | ||||||||
| Net sales | 346.1 | 303.8 | 321.7 | 372.3 | 400.0 | 378.2 | 414.0 | 432.0 |
| EBITDA | -2.2 | 3.6 | -2.3 | -5.3 | -16.6 | -3.0 | -13.0 | -3.5 |
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.
Total assets less current and long-term noninterest-bearing liabilities, including deferred tax liabilities.
EBITDA is revenue before tax, net financial items and depreciation/amortization and impairment.
EBITDA as a percentage of revenue. Equity/assets ratio - Shareholders' equity as a percentage of total assets.
Profit after tax as a percentage of sales.
Operating profit as a percentage of revenue.
Total of shareholders' equity, minority interests, shareholder loans and deferred tax liabilities divided by total assets.
Revenue for the period as a percentage of the average shareholders' equity, calculated as open and closing shareholders' equity divided by two.
Operating profit plus interest income as a percentage of average capital employed, calculated- as opening and closing capital employed divided by two.
Revenue of the year divided by the average number of shares.
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.
The purpose of disclosing change related items separately is to make it easier for the reader to understand the underlying year-onyear development.
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