Annual Report • Jan 31, 2008
Annual Report
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Strong Gross Profit growth with stable transaction margins and with very good performance in TradeDoublers fast growing European markets.
| SEK 000s | Oct-Dec 2007 | Jul-Sept 2007 | Apr-Jun 2007 | Jan-Mar 2007 | Oct-Dec 2006 |
|---|---|---|---|---|---|
| Revenue | 872 420 | 757 454 | 512 622 | 521 146 | 515 838 |
| Growth y/y | 69,1% | 77,4% | 27,9% | 30,1% | 51,0% |
| Gross profit | 187 117 | 166 251 | 143 049 | 139 606 | 139 556 |
| Growth y/y | 34,1% | 38,9% | 25,5% | 30,4% | 43,7% |
| EBITDA | 73 792 | 55 290 | 42 340 | 42 668 | 62 969 |
| Growth y/y | 17,2% | 13,6% | -9,7% | 7,2% | 69,2% |
| EBIT | 65 003 | 48 796 | 40 301 | 40 733 | 61 107 |
| Growth y/y | 6,4% | 4,0% | -11,0% | 10,9% | 69,6% |
| EBIT margin | 7,5% | 6,4% | 7,9% | 7,8% | 11,8% |
| Pre tax profit | 56 753 | 66 182 | 42 805 | 43 216 | 64 882 |
| Profit after tax | 44 083 | 49 649 | 30 588 | 28 027 | 47 923 |
| Earnings per share | 1,54 | 1,74 | 1,07 | 0,98 | 1,68 |
| Transaction margin | 23,9% | 22,9% | 23,3% | 22,2% | 22,4% |
The Search Works financials are reported as "The Search Works". Td Toolbox and the former Technology Works are combined into an integrated unit called td Technology and along with consultancy revenues are reported under "Other revenues". Transaction revenues are consistent with earlier reports and for comparison purposes left unchanged. The revenue contribution from The Technology Works, being a high gross margin business, is marginal.
The past year marks a time of change in the TradeDoubler history. The first quarter of the year was dominated by the AOL offer both confirming TradeDoubler's strategic value as well as the strong belief in the group and its continued independent growth within the online media landscape. The renewed focus on sales and the subsequent build-up of resources in all markets were key to the groups further growth. The third quarter of 2007 marks an important strategic move into online search with the acquisition of The Search Works and The Technology works. The subsequent integration and strategic planning for the rollout of the Search business as well as operational restructuring dominated the volume intensive fourth quarter.
2007 brought its share of challenges and TradeDoubler emerges strong to face, the tasks and deliver on the values for which TradeDoubler has become known.
The challenges in transforming TradeDoubler from a small to a medium sized corporation with today 550 employees puts an enormous emphasis on the knowledge and expertise of the company's primary recourse, its staff. As in any developing corporation, some early joiners finds new challenges elsewhere, but with careful management and with the addition of new, both experienced and high achieving staff, TradeDoubler continues to build its valuable asset of human capital. In integrating the acquired Search and Technology Works businesses, it is an outstanding achievement to have retained 98 percent of the staff to date, both reassuring to investors of the group as well as a mark to the internal integration work.
The group's product portfolio now covers the majority of spend within online marketing. The Search Works, the group's addition in the fast growing Search arena ensures strong growth levels. Further, the group holds
within the current product portfolio, the traditional TradeDoubler affiliate product, td Pull, the fast growing campaign product td Push & td Reach, the advantage of integrating telephony and the internet with td Talk and a very competitive integrated and independent technology solution- td Technology joining the proven strength of td Toolbox and BidBuddy® – the Technology works platform for search word management now renamed td Searchware 4. The product portfolio complements the people and the local expertise which TradeDoubler has built in its 19 markets today.
Looking forward, to capitalize on the rollout of Search, the margin strong td Technology product and the venture into Asia with an increased presence of TradeDoubler in Japan, remains the focus ahead. With a year of investments in 2007, TradeDoubler has set the foundation on which to keep building the group's profitability.
TradeDoubler grew out of the recession in early 2000 proving that in turbulent market conditions and in times of receding economies, TradeDoubler's focus on Return on Investment, in particular with the Cost per Action / commission based affiliate model, works. For the mature UK market, we expect that the growth levels will be impacted by a general slowdown in the retail climate following recent events in the markets. Competition has increased leading to effects on pricing and more compelling offers to publishers.
The latest figures from Forrester Research estimate that European consumers will be spending over 263 billion EUR online by 2011. JupiterResearch estimates the European e-commerce will grow with 16 percent annually until 2011. Across Asia, e-commerce is expected to grow at an
Traditionally a pan-European digital marketing company, TradeDoubler has extended its reach into the Asia Pacific region with the launch of td Technology in Japan and now enjoys a global presence. TradeDoubler's performance-based digital marketing products and services provide companies with the tools and expertise to drive results online whether they are looking to generate sales or drive brand awareness. Headquartered in Sweden, the company boasts a unique global reach with local offices in 18 countries. With a breadth of expertise across multiple industry sectors and a network of more than 120,000 website publishers TradeDoubler helps deliver online results for over 1,600 advertisers globally including a mix of local and international companies such as Apple Store, Dell, Telia Sonera, eBay and Kelkoo. Please visit www.tradedoubler.com for further information.
This document contains certain forward-looking statements relating to the business, financial performance and results of the Company and the industry in which it operates. These statements are based on the Company's current plans, estimates and projections, as well as its expectations of external conditions and events. In particular the words "expect", "anticipate", "estimate", "may", "should", "believe" and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These include, but are not limited to: the level of client acceptance of existing and new and upgraded products and services; the growth of overall market demand for the Company's products; the Company's ability to sustain and effectively manage its recent rapid growth; the Company's relationship with third party suppliers, and its ability to accurately forecast the volume and timing of sales. Additional factors could cause future results to differ materially from those in the forward-looking statements.
annual rate of 23 percent to reach 169 billion EUR in 2011, driven by
The first two points have been heavily influenced by rising levels of broadband and wireless adoption and increasingly lately, by the draw of social media sites which combine to entice European consumers to spend more time online than they do watching TV. The fragmentation of the media landscape and the rapidly changing publisher landscape, with the rise of previously unknown publishers such as Myspace and Facebook places TradeDoubler in an ideal position as an intermediary to benefit and capitalize on the rapid movements online. By building and helping growing sites to monetize their inventory, TradeDoubler is both an attractive partner for publishers as well as advertisers.
As consumers shift attention to the internet they are more receptive to online advertising relevant to them and their individual interests. Advertisers benefit from targeting the customers when the online shopper actively searches the net to shop.
Advertisers have had to adapt their marketing strategies to reach and target their audiences more effectively. Marketing budgets are continuing to shift towards the internet as advertisers follow consumers online and embrace new technologies opening up innovative new ways to engage with internet users and measure the effectiveness of online advertising campaigns. Southern Europe and the Nordic region will see strong growth over the next five years although the largest three markets - UK, France and Germany - will continue to account for approximately three quarters of total online advertising spend. Globally, the internet will remain the fastest growing advertising medium, with a projected 18.3 percent annual growth to 73 billion USD in 2011 (PWC).
Paid Search will continue to be the dominant driver of online advertising growth and will account for approximately half of all online adspend across Europe in 2012. As advertisers adopt new online advertising practices, rich media and video will grow to represent over half of online display advertising.
Affiliate marketing is also gaining a greater proportion of online advertising budgets thanks to its ability to deliver cost-effective results at low-risk for advertisers.
As advertisers increasingly seek to improve the ROI on their online marketing investments, seamless online marketing strategies encompassing a range of online disciplines including Search, Affiliate and Display will be essential to achieving the best results. As TradeDoubler with its broad product range encompasses the full spectrum of strategies, recent trends in declining efficiencies of keyword buying publishers, is being balanced by the shift online towards search by mainstream advertisers.
The td Pull product, with new key features and interface upgrades give immediate benefit to publishers and advertisers. In addition, the new Contextual Ad serving feature is being finalized. Contextual Ad serving allows the choice of ads served on a publisher's website to be fully automated, based on the content on the publisher's website and the relevance of the ad. This removes the requirement for the publisher to select the ads manually and aids the growth of the publisher network by providing TradeDoubler with a competitive advantage. The aim is an improved click-through and conversion rate to capitalise on the increasing volumes through our network, in order to increase profits for both advertisers and publishers as well as for TradeDoubler.
The newly formed td Technology unit saw the successful release and launch to existing customers of the next evolution of the BidBuddy® search management tool which has been re-branded td Searchware 4. Building on the heritage of BidBuddy®, it includes new functionality and design which frees users to focus on the important strategic and creative aspects of their campaigns. The work progressing to integrate td Toolbox functionality with the td Searchware 4 product will facilitate the progressive development of a fully functional cross-media management tool.
Business planning and recruitment for The Search Works roll-out into major markets in Europe, was ongoing and progressed in the fourth quarter.
Further, various improvements to the publisher interface include a new customisable export feature, which provides flexibility and ease of use within our Product Feed system for the larger price comparison publishers. In addition, publishers now enjoy transparency on the method of tracking for every advertiser which allows publishers to make informed decisions about which advertisers to work with. This facilitates further promotion of TradeDoubler's proprietary "G2" tracking method
that is a competitive advantage for TradeDoubler and results in better conversion rates by improved tracking accuracy.
In line with previous years, Christmas sales is commencing later in the month of December with the best day of this year being Boxing Day itself. The successful advertisers' pre Christmas, had strong campaigns with clear messages and campaigns which started earlier than most others, they also successfully used strategic search groups and capitalised on strong partnerships with loyalty sites. The trend of Men purchasing late in the period is obvious, based on the type of goods sold. The previous loss of two large clients impacted significantly TradeDoubler's sales in the UK, but was partly offset by very good results from existing programs in the retail/electronics and travel sectors.
Revenues for the fourth quarter 2007 amounted to 872,4 (515,8) MSEK, an increase of 69,1 percent, compared to the fourth quarter of the preceding year. Transaction revenues, corresponding to the traditional TradeDoubler operations, increased by 11,0 percent and accounted for 538,5 (485,0) MSEK. The Search Works revenues accounted for 295,5 (0,0) MSEK. The former Technology Works revenues are included in other revenues. Other revenues consist mainly of start-up, licence and monthly fees as well as consulting revenues and amounted to 38,4 (30,8) MSEK up 24,7 percent. Optimisation of existing programs by the TradeDoubler staff, aided in lifting TradeDoubler's gross profit to 187,1 (139,6) MSEK, an increase of 34,0 percent, compared to
the fourth quarter of the preceding year.
The share of gross profit attributable to Transaction gross profit, corresponding to the traditional TradeDoubler operations was 128,6 (108,8) MSEK up 18,2 percent with very strong growth noted in the campaign products. The Search Works contributed 20,1 (0,0) MSEK. Gross profit from other revenue sources including the former Technology Works increased by up 24,7 percent on its usual high margins and contributed 38,4 (30,8) MSEK.
The gross profit margin during the fourth quarter was 21,4 (27,1) percent for the group and the decrease is a result of the inclusion of The Search Works and the former Technology works in the group accounts. The notably strong transaction margin during the fourth quarter 2007 was 23,9 (22,4) percent. The strong margin being due to the continued drive towards higher margin customers and
a very strong growth of the smaller but higher margin td Push & td Reach campaign products.
The number of active advertisers increased during the fourth quarter by 123 and amounted 1 662 (1 276) on December 30, 2007, an increase of 30,3 percent. The recruitment of active publishers in TradeDoubler's network also continued to grow. The number of active publishers increased by 2 718 to 120 816 compared to 118 098 in the previous year.
The Group's revenues increased by 52,7 percent in the period to 2 663,6 (1 744,1) MSEK and transaction revenues accounted for 2 000,8 (1 629,8) MSEK of total revenues, up 22,8 percent. The Search Works revenues accounted for 526,4 (0,0) MSEK. The former Technology
| Revenue by revenue source | ||||||
|---|---|---|---|---|---|---|
| SEKm | Oct-Dec 2007 | Oct-Dec 2006 | Change (%) | Jan-Dec 2007 | Jan-Dec 2006 | Change (%) |
| Transaction revenues | 538,5 | 485,0 | 11,0 | 2 000,8 | 1 629,8 | 22,8 |
| Search revenues | 295,5 | - | - | 526,4 | - | - |
| Other revenues | 38,4 | 30,8 | 24,7 | 136,4 | 114,3 | 19,3 |
| Total | 872,4 | 515,8 | 69,1 | 2 663,6 | 1 744,1 | 52,7 |
| Gross profit by revenue source | ||||||
| SEKm | Oct-Dec 2007 | Oct-Dec 2006 | Change (%) | Jan-Dec 2007 | Jan-Dec 2006 | Change (%) |
| Transaction gross profit | 128,6 | 108,8 | 18,2 | 462,0 | 366,0 | 26,2 |
| Search gross profit | 20,1 | - | - | 37,6 | - | - |
| Other gross profit | 38,4 | 30,8 | 24,7 | 136,4 | 114,3 | 19,3 |
| Total | 187,1 | 139,6 | 34,0 | 636,0 | 480,3 | 32,4 |
Works revenues are included in other revenues. Other revenues consist mainly of start-up, licence and monthly fees as well as consulting revenues and amounted to 136,4 (114,3) MSEK up 19,3 percent.
The gross profit for the period increased by 32,4 percent and amounted to 636,0 (480,3) MSEK. The amount attributable to transactions corresponding to the traditional TradeDoubler operations was 462,0 (366,0) MSEK up 26,2 percent and The Search Works gross profit was 37,6 (0,0) MSEK. Other gross profit were 136,4 (114,3) MSEK up 19,3 percent. The gross margin for the period amounted to 23,9 (27,5) percent, a direct result of the inclusion of The Search Works in the groups accounts.
All geographic markets continued to grow during the fourth quarter 2007. In the UK, total revenues increased by 128,6 (38,4) percent, due to the inclusion of The Search Works. The transaction revenue in the UK was -6,0 percent in local currency compared to the fourth quarter of the preceding year and -9,0 percent on consolidation. Sales in Electronics and retail sectors note strong performances with some of the larger programs in our network doubling in size on the previous year. The UK operations with two large client losses in 2007 as previously stated in the second and third quarter reports were significantly negatively affected. The UK is likely to grow at a slower pace than historic levels.
France which grew by 22,7 (61,8) percent had exceptional sales in retail goods even outselling some advertisers supplies as early as week 49. Strong performance is also noted from travel and electronics.
Germany saw an increase of 12,7 (95,0) percent in the quarter with transactions at very high volumes, and with very strong Christmas sales but with average order values being lower than in the previous year thereby impacting the overall growth.
In local currencies and adjusted for currency effects on consolidation the growth for the segments were for France and Germany increased by 20,0 percent and 10,6 percent respectively.
The rest of Europe excluding the Nordic region saw revenues increase by 43,7 (67,8) percent, compared to the fourth quarter in the preceding year. The Nordic market grew by 7,8 (50,0) percent compared to the fourth quarter of the preceding year. During the fourth quarter 2007, 96 (93) percent of the company's revenues were generated outside of Sweden.
All geographic markets grew. In the UK, total revenues for the period increased by 87,9 (45,8) percent by the inclusion of the Search business and transaction revenues in the UK grew by 14,0 percent compared to the corresponding period of the preceding year. In France and Germany the increases were 22,3 (84,6) percent and 23,3 (75,8) percent, respectively. Across the rest of
| SEKm | Oct-Dec 2007 | Oct-Dec 2006 | Change (%) | Jan-Dec 2007 | Jan-Dec 2006 | Change (%) |
|---|---|---|---|---|---|---|
| Revenue | 502,7 | 219,9 | 128,6 | 1 369,4 | 728,8 | 87,9 |
| Gross profit | 76,7 | 54,4 | 41,0% | 257,4 | 185,6 | 38,7 |
| Rest of Europe | ||||||
| SEKm | Oct-Dec 2007 | Oct-Dec 2006 | Change (%) | Jan-Dec 2007 | Jan-Dec 2006 | Change (%) |
| France | 109,7 | 89,4 | 22,7 | 363,6 | 297,2 | 22,3 |
| Germany | 44,5 | 39,5 | 12,7 | 145,7 | 118,2 | 23,3 |
| Rest of Europe excl the Nordic region | 142,0 | 98,8 | 43,7 | 497,2 | 354,9 | 40,1 |
| Revenue | 296,2 | 227,7 | 30,1 | 1 006,4 | 770,3 | 30,7 |
| Gross profit | 84,6 | 61,3 | 38,0 | 281,6 | 210,0 | 34,1 |
| SEKm | Oct-Dec 2007 | Oct-Dec 2006 | Change (%) | Jan-Dec 2007 | Jan-Dec 2006 | Change (%) |
|---|---|---|---|---|---|---|
| Revenue | 73,5 | 68,2 | 7,8 | 287,7 | 245,0 | 17,4 |
| Gross profit | 25,8 | 23,9 | 7,9 | 97,0 | 84,7 | 14,5 |
Revenues are attributed according to the invoicing market.
Europe excluding the Nordic region, revenues increased by 40,1 (88,0) percent, compared to the corresponding period of the preceding year. The Nordic market grew by 17,4 (45,8) percent, compared to the corresponding period in the preceding year. During 2007, 95 (92) percent of the company's revenues were generated outside of Sweden.
TradeDoubler has continued to focus on productivity levels and the transaction related cost base has as a result remained flat on the previous quarter.
EBITDA for the fourth quarter increased by 17,2 percent and amounted to 73,8 (63,0) MSEK and Operating profit (EBIT) for the fourth quarter increased by 6,4 percent and amounted to 65,0 (61,1) MSEK, corresponding to an operating margin of 7,5 (11,8) percent driven by the inclusion of the Search Works business.
Earnings in the fourth quarter of 2007 were positively affected by costs relating to all existing warrant schemes. In the fourth quarter these costs decreased the selling expenses by 11,6 (0,8) MSEK.
Adjusted for expenses attributable to the share based compensation, the operating margin was 6,1 (12,0) percent of revenues and 28,5 (39,5) percent of gross profit.
One time extraordinary income in the fourth quarter amounted to 2,1 (0,0) MSEK and relates to transaction revenue.
Depreciation of tangible assets amount to -8,8 (-2,5) MSEK and for intangible assets to -10,2 (-1,0) MSEK for the fourth quarter. Costs of capital equals -8,3 (3,8) MSEK. Contribution from The Search and Technology works follow the group's expectations as previously stated and was EPS negative in the fourth quarter pertaining to the cost associated with the rollout of the business in the five prioritised markets.
Profit before tax for the period amounted to 56,8 (64,9) MSEK and Net Profit for the fourth quarter amounted to 44,1 (47,9) MSEK.
EBITDA for the period amounted to 214,1 (196,5) MSEK an increase of 9,0 percent and Operating profit (EBIT) during the period increased by 2,5 percent and amounted to 194,8 (190,1) MSEK corresponding to an operating margin of 7,3 (10,9) percent. Costs for depreciation of assets in the Search and Technology works amounts to 11,3 MSEK.
Earnings during the period have been negatively affected by costs relating to the existing warrant schemes. For the period, these costs increased the selling expenses by 7,9 (3,0) MSEK.
Adjusted for expenses attributable to the share based compensation, the operating margin for the period was 7,6 (11,1) percent of revenues and 31,9 (40,2) percent of gross profit.
One time expenses in the period amounted to 4,8 (0,0) MSEK.
Contribution from The Search and Technology works follow the group's expectations as previously stated and was EPS negative in the period pertaining to the cost associated with the rollout of the business in the five prioritised markets. Net finances include for the period 20,3 (0,0) MSEK relating to currency revaluations of the acquisition financing in the third quarter.
Profit before tax for the period amounted to 209,0 (198,2) MSEK and Net Profit for the period increased by 8,5 percent and totaled 152,3 (140,4) MSEK.
The average number of shares after dilution amounted to 28 567 493 resulting in earnings per share of 1,54 (1,68) SEK for the fourth quarter. The earnings per share for the full year 2007 amounted to 5,34 (4,93) SEK an increase of 8,3 percent.
Cash and cash equivalents at December 31, 2007 amounted to 224,2 (433,1) MSEK. Cash flow from operations before changes in working capital was during the fourth quarter 59,9 (63,1) MSEK and for the period 226,2 (196,6) MSEK. The change in working capital for the fourth quarter was -21,1 (-6,9) MSEK and for the period -85,8 (32,5) MSEK. Investments during the fourth quarter, was in tangible assets and amounted to 5,6 (2,5) MSEK and related to investments in computer equipment. For the reporting period, investments in tangible assets
amounted to 12,8 (7,3) MSEK.
The investment in subsidiaries amounted to 722,7 (9,9) MSEK in the period. Cash flow for the fourth quarter amounted to 29,5 (56,8) MSEK. Cash flow for the period amounted to -211,5 (220,2) MSEK. The group net debt at December 30 was 282,7 MSEK.
At December 31, 2007, the TradeDoubler group had 550 (351) employees of which 38 (36) percent are female. During the period, TradeDoubler added a further 199 (78) employees where 101 were contributed from the acquisition of the IMW Group. In the fourth quarter of 2007 2 (17) employees were recruited.
The average number of employees in the fourth quarter was 557 (344) and in the period 461 (308). As mentioned in the third quarter report, the majority of recruitments took place in the first half of the year.
As of January 1, 2008, TradeDoubler will include interns and temporary employees in the total number of employees reported. On December 31, 2007 TradeDoubler had 6 interns and temporary employees making the total number of employee's 556 at December 31, 2007.
TradeDoubler's operations involve the development of advanced software and services thereto associated. The business is expanding rapidly and internationally. In addition to customer and supplier relations, risks include, but are not limited to: the level of client acceptance of existing, new and upgraded products and services, the growth of overall market demand for the Company's products, the Company's relationship with third party suppliers and its ability to accurately forecast and manage the volume of sales in various currencies. Both the group and the Parent Company share these risks. The group has exposures against foreign currencies.
The Parent Company's sales during the fourth quarter decreased by 13,5 percent to 57,6 (66,6) MSEK, an effect of the UK growth levels as the sales consist primarily of license fees from subsidiaries. For the period the corresponding increase was 17,4 percent to 276,4 (235,4) MSEK.
Profit after financial items for the fourth quarter amounted to 10,9 (37,6) MSEK and Profit after financial items for the period amounted to 103,4 (111,1) MSEK. Cash and cash equivalents at December 31, 2007 were 102,5 (159,6) MSEK.
Investments in fixed assets during the fourth quarter amounted to 2,4 (1,3) MSEK and during the period amounted to 4,9 (4,3) MSEK.
The average number of employees during the fourth quarter was 113 (82) and for the period 102 (77).
TradeDoubler works to minimize the effect of currency in its accounts. Post the period, the financing of group debt has been amortized by 150 MSEK and the remaining funding has been structured as to limit movements in the group profit and loss accounts.
The tax for the group is reduced to 27,1 (29,2) percent. A number of subsidiaries have shifted into tax paying positions for 2007. Deferred taxes activated amounts to 5,8 (0,0) MSEK.
The Board of Directors proposes to the Annual General Meeting a dividend of 2,75 (2,50) SEK per share amounting to approximately 79 MSEK. No extraordinary dividend is proposed, 0,00 (2,50) SEK per share.
No significant transactions have taken place in the period. Related parties with which the Group has transactions are described in the annual report for 2006, note 25.
No significant events have occurred after the closing date.
TradeDoubler continues to aim to grow the company in line with the underlying market growth.
The Annual Report for 2007 will be published three weeks before the Annual General Meeting. It will be available at the company's website www.tradedoubler.com and also distributed in print to the shareholder that have so requested.
There will be a telephone conference at 10:30 CET on 31 January, 2007 hosted by CEO William Cooper and CFO Casper Seifert who will present the results for the period. To participate in the conference call, please dial Sweden: +46 (0)8 5052 0114 UK: +44 (0)20 7162 0125
The report and the presentation will be published on the company website, www.tradedoubler.com prior to the start of the conference call. For local dial in numbers, please consult the TradeDoubler website.
Stockholm, January 30, 2008
William Cooper President and CEO
For further information please contact:
William Cooper, President and CEO +46-8-405 08 00 Casper Seifert, CFO +46-8-405 08 27
| SEK 000s | Oct–Dec 2007 |
Oct–Dec 2006 |
Jan–Dec 2007 |
Jan–Dec 2006 |
|---|---|---|---|---|
| Revenue | 872 420 | 515 838 | 2 663 642 | 1 744 080 |
| Cost of services sold | -685 303 | -376 282 | -2 027 619 | -1 263 783 |
| Gross profit | 187 117 | 139 556 | 636 023 | 480 297 |
| Selling expenses | -78 481 | -57 104 | -310 459 | -200 110 |
| Administrative expenses | -34 602 | -16 638 | -102 567 | -72 041 |
| Development expenses | -9 031 | -4 707 | -28 164 | -18 080 |
| Operating profit | 65 003 | 61 107 | 194 833 | 190 066 |
| Net financial items | -8 250 | 3 775 | 14 123 | 8 134 |
| Profit before tax | 56 753 | 64 882 | 208 956 | 198 200 |
| Income tax expense | -12 670 | -16 959 | -56 609 | -57 814 |
| Profit after tax | 44 083 | 47 923 | 152 347 | 140 386 |
| Basic earnings per share (SEK) | 1,56 | 1,73 | 5,42 | 5,13 |
| Diluted earnings per share (SEK) | 1,54 | 1,68 | 5,34 | 4,93 |
| Average no of shares outstanding | 28 320 348 | 27 695 021 | 28 092 179 | 27 350 907 |
| Average no of shares outstanding after dilution | 28 567 493 | 28 518 847 | 28 546 284 | 28 479 075 |
| Total no of shares outstanding | 28 429 359 | 27 954 837 | 28 429 359 | 27 954 837 |
| Total no of shares outstanding after dilution | 28 581 633 | 28 588 773 | 28 581 633 | 28 588 773 |
| SEK 000s | 31 Dec 2007 |
31 Dec 2006 |
|---|---|---|
| ASSETS | ||
| Fixed assets | ||
| Intangible fixed assets | 120 887 | 12 715 |
| Goodwill | 609 780 | - |
| Tangible fixed assets | 24 918 | 11 558 |
| Other long-term receivables | 803 | 803 |
| Deferred tax assets | 49 455 | 2 263 |
| Total fixed assets | 805 843 | 27 339 |
| Current assets | ||
| Accounts receivable | 685 749 | 417 514 |
| Prepaid expenses and accrued income | 15 357 | 6 453 |
| Other current receivables | 28 406 | 30 316 |
| Current investments1) | 477 485 | - |
| Cash and cash equivalents | 224 157 | 433 082 |
| Total current assets | 1 431 154 | 887 365 |
| TOTAL ASSETS | 2 236 997 | 914 704 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||
| Shareholders' equity | 361 308 | 348 965 |
| Long-term liabilities | ||
| Deferred tax liability | 33 227 | 3 562 |
| Other provisions | 1 121 | - |
| 34 348 | 3 562 | |
| Current liabilities | ||
| Accounts payable | 257 913 | 12 662 |
| Publisher payable | 311 660 | 270 374 |
| Tax liability | 48 100 | 26 325 |
| Other current liabilities | 209 703 | 196 949 |
| Debts to financial institutes | 964 707 | - |
| Accrued expenses and deferred income | 49 258 | 45 367 |
| Other provisions | 0 | 10 500 |
| 1 841 341 | 562 177 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 2 236 997 | 914 704 |
1) Hedged funds.
| SEK 000s | Oct–Dec 2007 |
Oct–Dec 2006 |
Jan–Dec 2007 |
Jan–Dec 2006 |
|---|---|---|---|---|
| Shareholders equity on opening date | 312 293 | 297 610 | 348 965 | 188 562 |
| Exchange rate effect adjusted to equity | -9 753 | -6 773 | -33 567 | -6 745 |
| Profit for the period | 44 083 | 33 731 | 152 347 | 140 386 |
| Share issues | 6 884 | 8 056 | 7 030 | 8 225 |
| Dividend | - | - | -140 076 | - |
| IFRS cost share related programs | -4 830 | 732 | 13 978 | 2 928 |
| Tax effect on share option exercise1) | 12 631 | 15 609 | 12 631 | 15 609 |
| Total shareholders' equity on closing date | 361 308 | 348 965 | 361 308 | 348 965 |
1) Tax deduction is admitted in the UK at share option exercise based on calculated cost.
| SEK 000s | Oct–Dec 2007 |
Oct–Dec 2006 |
Jan–Dec 2007 |
Jan–Dec 2006 |
|---|---|---|---|---|
| Operating activities | ||||
| Profit before tax | 56 753 | 64 882 | 208 956 | 198 201 |
| Adjustments for non-cash items | 3 150 | -456 | 33 233 | 3 337 |
| Income taxes paid | -24 | -1 319 | -16 000 | -4 903 |
| Cash flow from operating activities before change in working capital |
59 879 | 63 107 | 226 189 | 196 635 |
| Changes in working capital | -21 127 | -6 873 | -85 785 | 32 533 |
| Cash flow from operating activities | 38 752 | 56 234 | 140 404 | 229 168 |
| Investing activities | ||||
| Net investment of intagible fixed assets | 447 | - | - | - |
| Net investment of subsidaries | -20 700 | -5 000 | -722 692 | -9 900 |
| Net investment of tangible fixed assets | -5 595 | -2 451 | -12 763 | -7 301 |
| Cash flow from investment activities | -25 848 | -7 451 | -735 455 | -17 201 |
| Financing activities | ||||
| Current investment | -477 485 | -477 485 | ||
| External loan | 487 222 | - | 994 122 | - |
| New share issues | 6 884 | 8 056 | 7 030 | 8 225 |
| Dividend | - | - | -140 076 | - |
| Cash flow from financing activities | 16 621 | 8 056 | 383 591 | 8 225 |
| CASH FLOW FOR THE PERIOD | 29 525 | 56 839 | -211 460 | 220 192 |
| Cash and cash equivalents on opening date | 190 811 | 379 934 | 433 082 | 218 348 |
| Translation difference in cash and cash equivalents | 3 821 | -3 691 | 2 535 | -5 458 |
| Cash and cash equivalents on closing date | 224 157 | 433 082 | 224 157 | 433 082 |
| Adjustment for non-cash items | ||||
| Depreciation | 8 789 | 1 862 | 19 255 | 6 409 |
| Non-recurring cost relating to the quotation | - | 2 950 | - | - |
| Personnel expenses attributable to share related programs | -5 639 | -5 268 | 13 978 | -3 072 |
| Total non-cash items | 3 150 | -456 | 33 233 | 3 337 |
| SEK 000s | Oct–Dec 2007 |
Jul–Sept 2007 |
Apr–Jun 2007 |
Jan–Mar 2007 |
Oct–Dec 2006 |
|---|---|---|---|---|---|
| Revenue | 872 420 | 757 454 | 512 622 | 521 146 | 515 838 |
| Quarter-on-quarter growth (%) | 15 | 48 | -2 | 1 | 21 |
| Cost of services sold (publisher compensation) | -685 303 | -591 203 | -369 573 | -381 540 | -376 282 |
| Gross profit | 187 117 | 166 251 | 143 049 | 139 606 | 139 556 |
| Quarter-on-quarter growth (%) | 13 | 16 | 2 | 0 | 17 |
| Selling expenses | -78 481 | -89 726 | -74 349 | -67 903 | -57 104 |
| Administrative expenses | -34 602 | -21 593 | -21 915 | -24 457 | -16 638 |
| Development expenses | -9 031 | -6 136 | -6 484 | -6 513 | -4 707 |
| Operating profit | 65 003 | 48 796 | 40 301 | 40 733 | 61 107 |
| Net financial items | -8 250 | 17 386 | 2 504 | 2 483 | 3 775 |
| Profit before tax | 56 753 | 66 182 | 42 805 | 43 216 | 64 882 |
| Income tax expense | -12 670 | -16 533 | -12 217 | -15 189 | -16 959 |
| Net profit | 44 083 | 49 649 | 30 588 | 28 027 | 47 923 |
| SEK 000s | Oct–Dec 2007 |
Oct–Dec 2006 |
Jan–Dec 2007 |
Jan–Dec 2006 |
|
|---|---|---|---|---|---|
| Operating margin (%) | 7,5 | 11,9 | 7,3 | 10,9 | |
| EBITDA | 73 792 | 62 969 | 214 088 | 196 474 | |
| EBITDA margin (%) | 8,5 | 12,2 | 8,0 | 11,4 | |
| Equity ratio (%) | 16,2 | 38,0 | 16,2 | 38,0 | |
| Return on equity (%) | 46,1 | 52,0 | 43,7 | 52,0 | |
| Number of employees on closing date | 550 | 351 | 550 | 351 | |
| Average number of employees | 557 | 344 | 461 | 308 |
Notes to the results of the group.
i. Extraordinary income related to cost of revenue during the fourth quarter amounted to 2,1 (0,0) MSEK
ii. Share based warrant costs included in selling expenses during the fourth quarter amounts to –11,6 (0,8) MSEK
iii. One-time expenses for the full year amounted to 4,8 (0,0) MSEK. 2,0 MSEK relating to the AOL offer, 1,0 MSEK in severance pay and 1,8 MSEK in integration costs.
iv. Share based warrant costs included in selling expenses for the full year amounts to 7,9 (3,0) MSEK
| SEK 000s | Oct–Dec 2007 |
Oct–Dec 2006 |
Jan–Dec 2007 |
Jan–Dec 2006 |
|---|---|---|---|---|
| Revenue | 57 606 | 66 555 | 276 368 | 235 426 |
| Cost of services sold (publisher compensation) | -2 258 | -2 659 | -10 687 | -14 937 |
| Gross profit | 55 348 | 63 896 | 265 681 | 220 489 |
| Selling expenses | -5 792 | -4 309 | -30 638 | -18 333 |
| Administrative expenses | -38 055 | -18 775 | -95 899 | -74 837 |
| Development expenses | -9 018 | -4 706 | -28 152 | -18 080 |
| Operating profit | 2 483 | 36 106 | 110 992 | 109 239 |
| Net financial items | 8 466 | 1 513 | -7 615 | 1 892 |
| Profit after financial items | 10 949 | 37 619 | 103 377 | 111 131 |
| Income tax expense | -3 330 | -6 668 | -29 162 | -26 670 |
| Net profit | 7 619 | 30 951 | 74 215 | 84 461 |
Share pledged are booked values of shares in subsidiaries
pledged under the short term financing extended to the group.
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and RR 31 Consolidated Interim Financial Reporting. The accounting policies that have been applied are in agreement with the accounting policies that were used in the preparation of the company's latest annual report. A description of the accounting policies is included in note 1 of the Annual Report. New or revised IFRS standards or IFRIC interpretations, which came into force on 1 January 2007, have not had any effect on the group's results of operations or financial position.
This report has included the additional information required by the implementation of the EU Transparency Directive to the Swedish law, from July 1, 2007.
The interpretation addresses how to apply IFRS 2 (Sharebased Payment) to accounting for share-based payment arrangements involving an entity's own equity instruments. The TradeDoubler group have applied IFRIC 11 during the last quarter and will apply it fully for the whole group from January 1 2008.
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