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Digitouch Investor Presentation 2020
4285_10-k_2020-03-31_805943ba-2f73-4077-bc8b-ae15c6f76df7.pdf
Investor Presentation
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Conference Call: FY 2019 consolidated financial
31st March 2020
WHO WE ARE
One of the main independent Italian player specialized in Omnichannel Marketing and Digital Transformation
FROM DIGITAL MARKETING COMPANY TO FULL DIGITAL PLATFORM COMPANY INTEGRATED OFFER
MILESTONES
From Digital Marketing Company to Full Digital Platform Company
TARGET MARKET VALUE: ABOUT 6.5 BILLION EUROS
| ITALIAN MARKET (BILLIONS EURO) |
2017 | 2018 | 2019 | NOTE | IMMEDIATELY TARGET MARKET (BILLION EURO) FOR DIGITOUCH |
|
|---|---|---|---|---|---|---|
| DIGITAL MARKETING SERVICES |
Advertising online | 2 68 |
98 2 |
3 27 |
▪ About 70% of the online market is concentrated on Google, Facebook e Amazon |
2.10 |
| Event & Sponsorship services | 1 2 |
1 2 |
2 1 |
The B2C component represents approximately 60% of the ▪ total value (the remaining part is represented by corporate events) |
0.72 | |
| SOFTWARE MARKET |
Big data and data analytics |
1 1 |
1 3 |
1 7 |
▪ The market includes 20% of infrastructure resources, 47% software and 37% of services |
0.63 |
| Application CRM Software Content Appl. |
0 33 0 79 |
0 34 0 86 |
0 36 0 94 |
In this market segment mainly medium-large ▪ companies operate for 50% |
1.30 | |
| SYSTEM INTEGRATION & HOSTING |
System Integration | 2 29 |
2 34 |
2 39 |
Estimate of system integration activities functional to ▪ marketing / CRM / content ~ 40% |
0.95 |
| Hosting infrastructure |
0 79 |
0 85 |
0 914 |
▪ - |
0.91 |
CAGR 2020-2023: 10-15% IMPACT OF CAGR 2020-2023: neutral/acceleration
Source: Integrated Communications System (SIC) 2018, Internal Analysis, Big Data Observatories of the Polytechnic of Milan, Assintel Report
6.61
COVID-19 IMPACT
The impact of Covid-19 crisis will accelerate digitalization process, not only in terms of distributions but also in terms of operative models. This will be mostly visible to some sectors (retail/financial services) but is applicable to all industries.
EXPECTATIONS FOR GRUPPO DIGITOUCH
SHORT-TERM POSITIVE IMPACT MEDIUM-TERM IMPACT SHORT-TERM NEGATIVE IMPACT
- ∙ Demand increase for digital communication
- ∙ Marketing investments acceleration for others
- ∙ Digital interfaces redesign
- ∙ Digital Strategy Assessment
- ∙ Marketing investments delay for some sectors
- ∙ Cash-in delay for some sectors
- ∙ Delay in few negotiations/new projects
- ∙ Increase for digitalization investments
- ∙ Increase for digital marketing budgets
- ∙ Increase for e-commerce and content efforts
- ∙ Outsourcing focus
FULL DIGITAL PLATFORM COMPANY
The pillars of our approach
Digital PR Social Media Video and Content Marketing Special Projects Chatbot Experience Design UX/UI
Omnichannel Strategy Media Advertising Mobile Marketing Addressable Media Offline
Onsite/Offsite SEO International SEO Local SEO Voice Search SEO CRO
Purple X E-commerce Managed Service Mobile Applications Web Services
Business Analytics Machine Learning Process Automation Gamification Platform Digital Analytics Dashboard
OUR OFFER IN EVOLUTION
Focus on Data-Driven Customer Experience
- ∙ Performance
- ∙ Analysis Tracking
- ∙ SEO & CRO
- ∙ Omnichannel Communication
- ∙ Social Content
- ∙ Data-Driven Creativity
- ∙ Brand Experience
- ∙ Cloud Solutions
- ∙ Cyber Security
- ∙ Business Process Automation
- ∙ Gamification
- ∙ System & Solution Integration
PARTNERSHIP & TECHNOLOGIES
Designed to Increase competitiveness on the market
PARTNER OF AN INTERNATIONAL NETWORK OF AGENCIES
DigiTouch Group has tightened collaborations with independent international agencies to help the brands expand and advertise their activity abroad .
The Group is able to assist national and international clients in strategies of digitalisation and marketing at a global level .
CLIENT PORTFOLIO
Full diversification
THE GROUP PERIMETER
Revenues, EBITDA and Net Result TRENDS
CLOSING FY -2019 GRUPPO DIGITOUCH PROFIT & LOSS
Total revenues for '19 amount to about 39.0 million Euros, an increase of 21% compared to the same period of '18
| AG | |
|---|---|
In terms of cost structure: operating costs show a limited change of 13% but personnel costs increase by 66% (mainly due to the Meware aggregation). During 2020 further optimizations and efficiencies on the cost structure are expected in an industry which, by consolidation, requires greater economies of scale / scope
In terms of margins, there is an increase of 17% equal to an adjusted EBITDA of 5.75 million Euros
The depreciation and write -downs components decreased compared to last year (incidence on revenues fell from 10.7% to 9.5%). In particular, it should be noted that the main component is represented by the goodwill amortization.
Strong increase in pre -tax profit + 82% and consolidated profit + 186% equal to 765 thousand euros compared to 267 thousand euros in 2018
| (million euros) |
FY 2019 |
FY 2018 |
Change | |||
|---|---|---|---|---|---|---|
| [A] | % | [B] | % | [A]-[B] | % | |
| Operating revenues |
35,79 | 91,9 | 29,88 | 92,7 | 5,91 | 20 |
| Other revenues |
1,41 | 3,6 | 0,75 | 2,3 | 0,66 | 89 |
| Capitalized Costs |
1,75 | 4,5 | 1,60 | 5 | 0,14 | 9 |
| Total revenues |
38,95 | 100 | 32,23 | 100 | 6,71 | 21 |
| Operating costs |
25,94 | 66,6 | 22,97 | 71,3 | 2,97 | 13 |
| Labour costs |
7,25 | 18,6 | 4,36 | 13,5 | 2,89 | 66 |
| EBITDA Adjusted |
5,76 | 14,8 | 4,90 | 15,2 | 0,85 | 17 |
| Non-recurring costs |
0,37 | 0,9 | - 0,40 |
1,3 | 0,03 | - 7 |
| EBITDA | 13,8 | 14 | - | 20 | ||
| 5,38 | 4,50 - |
0,88 | ||||
| write-downs, Depreciation, |
- | - | - | |||
| Other and charges provisions |
3,69 | 9,5 | 3,45 | 10,7 | 0,24 | 7 |
| EBIT | 1,69 | 4,3 | 1,05 | 3,3 | 0,64 | 61 |
| Financial income/(expense) |
0,38 - |
- 1 | - 0,33 - |
- 1 | 0,05 - |
15 |
| Adjustments on financial assets |
- | 0 | - | 0 | - | 100 |
| Profit before tax |
1,31 | 3,4 | 0,72 | 2,2 | 0,59 | 82 |
| - | - | |||||
| of the Taxes year |
0,54 | 1,4 | 0,45 | 1,4 | 0,09 | 20 |
| Consolidated Profit Net |
0,77 | 2 | 0,27 | 0,8 | 0,50 | 186 |
| Of competence: |
- | - - |
||||
| Group | 0,23 | 0,6 | 0,27 | 0,8 | 0,03 - |
-13 |
| Third-party equity interest |
0,53 | 1,4 | 0,02 | 0,1 | 0,51 |
CLOSING H1 -2019 GRUPPO DIGITOUCH BALANCE SHEET
On a balance sheet level, the Fixed Assets of '19 grew by 5% from 14.2 million euros to 14.9 million euros. Against a continuous reduction in goodwill deriving from equity investments, an increase in intangible assets of 30% was recorded from 4.28 million euros to 5.56 million euros, largely attributable to the R&D policy and development of proprietary technological assets
Operating capital shows an increase in Net Working Capital which at 31.12.2019 amounted to almost 4 million Euros largely due to the strong growth in turnover in the last quarter of the year
Strong reduction in Other Liabilities which decreased from 0.76 Million Euros to 0.22 (in 2017 they amounted to 2.2 Million Euros)
Net financial position of 2.5 million euros compared to 1.48 million euros in 2018
| (million euros) |
31 Dec-2019 |
31 Dec-2018 |
Change | |
|---|---|---|---|---|
| [A] | [B] | [A]-[B] | % | |
| Fixed Assets |
5,1 | |||
| Goodwill | 14,99 8,58 |
14,27 9,15 |
0,73 -0,56 |
-6,2 |
| Development Costs |
0,34 | 0,27 | 0,08 | 29,1 |
| Other intangible assets |
5,57 | 4,28 | 1,29 | 30 |
| Tangible Fixed assets |
0,30 | 0,37 | -0,07 | -19,1 |
| Financial fixed asstes |
0,20 | 0,20 | 0,00 | -1,9 |
| Working capital |
3,22 | 1,88 | 1,34 | 71,5 |
| Commercial credits |
14,39 | 12,39 | 2,00 | 16,1 |
| Commercial debts |
-10,72 | -9,17 | -1,55 | 16,9 |
| Accrued and deferred and charges income |
-0,23 | -0,59 | 0,36 | 61,4 |
| Other assets and liabilities |
-0,23 | -0,76 | 0,53 | 69,9 |
| Severance pay |
-1,16 | -0,59 | -0,57 | 95,3 |
| Invested Capital Net |
17,05 | 15,55 | 1,50 | 9,6 |
| Group Equity |
13,73 | 13,79 | -0,06 | -0,4 |
| Third-party Equity |
0,77 | 0,27 | 0,49 | 100 |
| Net Assets |
14,50 | 14,07 | 0,43 | 3,1 |
| Financial and bond debts |
||||
| - short term |
7,24 | 2,56 | 4,68 | 183 |
| - long term |
4,31 | 4,90 | -0,58 | -11,9 |
| Cash and cash equivalents |
-7,21 | -4,07 | -3,14 | 77,1 |
| non instrumental to the operational Security activity |
-1,49 | -1,41 | -0,08 | 5,9 |
| Financial receivables |
-0,30 | -0,49 | 0,19 | 38 |
| financial position Net |
2,55 | 1,49 | 1,07 | 71,8 |
| COVERS | 17,05 | 15,55 | 1,50 | 9,6 |
| LEVERAGE | 0,18 | 0,11 |
CLOSING H1 2019 – GRUPPO DIGITOUCH NET FINANCIAL POSITIONS
18
REVENUES FY 2019 PER BUSINESS LINE
In terms of revenue mix, the "Data Services" business line recorded more than double growth compared to the Business Plan for 2019 (which included 2-2.5 million euros), exceeding 5 million euros. The "Performance Services" revenue line was in line with the Business Plan, while the "Digital Advertising" services division reported a decrease in revenues compared to the Business Plan objectives due to a more careful commercial policy, based on the selectivity of customers in support of industrial margins and greater competitiveness of the market.
NEW PRODUCT DEVELOPMENT
We are at work on new products that can give our clients a competitive advantage
THE COMPETITIVE ARENA
BUSINESS PRIORITIES
| INNOVATE AND UPGRADE THE OFFER! | AGGREGATE! | ||||
|---|---|---|---|---|---|
| Omnichannel approach |
Increase customer base |
||||
| Data-driven marketing & analytics |
Empower SW development capabilities |
||||
| Technology services | International expansion |
2020 OUTLOOK, CONSIDERING COVID-19
APPEALING EVALUTATION RESPECT COMPARABLES
| EV/REVENUES | EV/EBITDA | EV/EBIT | P/E | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Company | 2018 | 2019E | 2020E | 2018 | 2019E | 2020E | 2018 | 2019E | 2020E | 2018 | 2019E | 2020E |
| DigiTouch | 0,6x | 0,5x | 0,5x | 3,4x | 3,2x | 2,4x | 18,5x | 8,2x | 5,2x | 72,6x | 12,9x | 7,3x |
| AIM Italia Digital companies | ||||||||||||
| Alkemy | 1,0x | 0,3x | 0,3x | 13,2x | 5,9x | 3,3x | 15,6x | 10,5x | 4,4x | 20,6x | 16,0x | 7,8x |
| MailUp | 0,7x | 0,9x | 0,7x | n.m. | 12,8x | 10,3x | 13,9x | 26,8x | 19,8x | 21,1x | 38,6x | 32,2x |
| Expert System | 1,4x | 2,3x | 2,1x | neg. | 14,3x | 11,2x | neg | neg | neg | neg | neg | neg |
| DHH | 1,0x | 0,7x | 0,6x | n.m. | 9,1x | 5,3x | n.m. | 15,6x | 6,9x | n.m. | 15,3x | 10,8x |
| Vetrya | 0,4x | 0,4x | 0,3x | 6,0x | 3,0x | 2,3x | 6,9x | 5,1x | 3,4x | 9,2x | 5,8x | 3,9x |
| Digital360 | 1,1x | 0,6x | 0,6x | 14,2x | 6,4x | 4,8x | n.m. | 19,3x | 11,0x | neg | 88,3x | 16,5x |
| Neosperience | 0,3x | 2,1x | 1,6x | 1,1x | 8,2x | 6,3x | n.m. | 21,3x | 8,7x | n.m. | 33,5x | 12,9x |
| Neurosoft | 1,6x | n.a. | n.a. | 40,3x | n.a. | n.a. | neg | n.a. | n.a. | neg | n.a. | n.a. |
| GO internet | 2,7x | 2,5x | 2,3x | 10,8x | 6,5x | 5,4x | neg | neg | neg | neg | neg | neg |
| Intred | 2,5x | 4,4x | 2,7x | 6,3x | 10,6x | 9,0x | 10,2x | 16,0x | 12,2x | 13,3x | 24,6x | 20,3x |
| Softec | 0,9x | n.a. | n.a. | n.m. | n.a. | n.a. | n.m. | n.a. | n.a. | n.m. | n.a. | n.a. |
| Relatech | n.a. | 1,8x | 1,6x | n.a. | 13,5x | 11,4x | n.a. | 14,7x | 12,7x | 0,2x | 19,3x | 18,0x |
| AMM | n.a. | 0,4x | 0,3x | n.a. | 2,4x | 1,5x | n.a. | 3,2x | 1,8x | 2,4x | 7,4x | 3,9x |
| Maps | 0,2x | 1,1x | 1,0x | 1,3x | 5,6x | 4,4x | 1,3x | 8,0x | 6,4x | 1,9x | 10,2x | 7,4x |
| Mean | 1,1x | 1,5x | 1,2x | 11,6x | 8,2x | 6,3x | 9,6x | 14,0x | 8,7x | 9,8x | 25,9x | 13,4x |
| Median | 1,0x | 1,0x | 0,8x | 8,5x | 7,3x | 5,3x | 10,2x | 15,1x | 7,8x | 9,2x | 17,6x | 11,9x |
WINNING COMPETITIVE ADVANTAGES DEVELOPED ALL OVER THE YEARS - INVESTMENT HIGHLIGHTS
SIGNIFICANT INTERNAL INVESTMENT IN TECHNOLOGY AND BIG DATA
AGGREGATION ROLE
PROGRESSIVE BUSINESS GROWTH
MARKET GROWTH, RELEVANCE & POTENTIAL
PROFESSIONAL MANAGEMENT TEAM
MARKET UNDER FAST CONSOLIDATION
Questions & Answers
THANK YOU
Via Zarotto 2A - 20124 Milan - Italy
T +39 02 89295 100 W GRUPPODIGITOUCH.IT S