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TradeDoubler

Earnings Release Nov 3, 2010

3209_10-q_2010-11-03_73cabe15-a42a-4342-970a-68509409137a.pdf

Earnings Release

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Increased sales for Network in the third quarter

(Numerical data in brackets refers to the corresponding period in 2009 unless otherwise stated.)

January – September 2010

  • Net sales decreased by 10% to SEK 2,068 M (2,289). In local currencies, net sales declined by 2%.
  • Gross profit decreased by 8% to SEK 477.3 M (517.6).
  • Operating profit (EBIT) amounted to SEK 50.3 M (-125.7).
  • The cash flow from operating activities was SEK -83.4 M (-42.5), which was mainly due to changes in working capital after the rights issue.
  • Profit after tax amounted to SEK 41.3 M (-183.7).
  • Earnings per share amounted to SEK 0.97 (-6.43).
  • The number of employees (full-time equivalents) amounted to 534 (580) as of 30 September.

July–September 2010

  • Net sales decreased by 2% to SEK 697.9 M (710.7). In local currencies, net sales increased by 6%.
  • Gross profit increased by 8% to SEK 154.7 M (143.4).
  • Operating profit (EBIT) amounted to SEK 24.8 M (-185.9).
  • The cash flow from operating activities was SEK 21.5 M (-53.2), which was due to better earnings, a tax refund and changes in working capital.
  • Profit after tax amounted to SEK 11.3 M (-237.1).
  • Earnings per share amounted to SEK 0.26 (-8.29).
  • The number of employees (full-time equivalents) decreased by 53 during the quarter.
Jul-Sep Jul-Sep* Jan-Sep Jan-Sep* Full year*
MSEK 2010 2009 2010 2009 2009
Net sales 698 711 2,068 2,289 3,014
Gross profit 155 143 477 518 690
Total costs -130 -329 -427 -643 -795
Operating profit 25 -186 50 -126 -105
Profit before tax 8 -225 43 -150 -127
Net profit 11 -237 41 -184 -178
*) Including items in gross profit and costs which amounted to SEK -209 M in total during the period January-September.
CEO's comments
"We see a continued improvement in sales within the core business Network (Affiliate and Campaign) due to the
company's focus on this area and a continued favourable advertising climate. In our largest region, Southern Europe,
the gross profit rose by 14 per cent in local currency during the quarter. The gross profit in Northern and Eastern Europe
also improved. The service area Search in the UK was marked by a continued decline. Overall improvement measures
taken are gradually having an impact on the Group. The work on boosting sales through strong product development
has resulted in improved tracking and targeting with immediate effects for our customers. At the same time, a long-term
investment in mobile and social media has been initiated. We have increased our efforts with the local companies and
have seen clear results from better operational follow-up and strong internal control.
We continued to focus on costs and cash flow during the quarter. The number of employees has been reduced by
holding back on recruitment, which has resulted in lower personnel costs. The work is now continuing to boost sales and
maintain cost control, while at the same time, executing strategic and necessary long-term changes.
In October, we presented a new strategic focus, whose pillars are "One performance-based world-class network", "One
cost-efficient company", and "One sales and results-driven corporate culture". In line with this strategy, improvements
are now being made to the business structure, market structure and organisation. The goal is to grow faster than the
market with scalable profitability. "
Urban Gillström, President and CEO

CEO's comments

"We see a continued improvement in sales within the core business Network (Affiliate and Campaign) due to the company's focus on this area and a continued favourable advertising climate. In our largest region, Southern Europe, the gross profit rose by 14 per cent in local currency during the quarter. The gross profit in Northern and Eastern Europe also improved. The service area Search in the UK was marked by a continued decline. Overall improvement measures taken are gradually having an impact on the Group. The work on boosting sales through strong product development has resulted in improved tracking and targeting with immediate effects for our customers. At the same time, a long-term investment in mobile and social media has been initiated. We have increased our efforts with the local companies and have seen clear results from better operational follow-up and strong internal control.

We continued to focus on costs and cash flow during the quarter. The number of employees has been reduced by holding back on recruitment, which has resulted in lower personnel costs. The work is now continuing to boost sales and maintain cost control, while at the same time, executing strategic and necessary long-term changes.

In October, we presented a new strategic focus, whose pillars are "One performance-based world-class network", "One cost-efficient company", and "One sales and results-driven corporate culture". In line with this strategy, improvements are now being made to the business structure, market structure and organisation. The goal is to grow faster than the market with scalable profitability. "

Consolidated profit for the period January – September 2010

Consolidated net sales fell by 10 per cent to SEK 2,068 (2,289) compared with the corresponding period in 2009, while gross profit declined by 8 per cent to SEK 477.3 M (517.6). The gross margin thus increased to 23.1 (22.6) per cent.

Net sales declined by 2 per cent in local currencies. Increased sales within Network (Affiliate and Campaign) were outweighed by a decline within Search in the UK and within Technology.

The gross profit was unchanged in local currencies compared with the corresponding period in 2009, excluding last year's dissolution of reserves of SEK +5.0 M, reconciliation differences of SEK -16.1 M and a write-down of trade receivables of SEK -7.0 M. Region Southern Europe increased its gross profit in local currencies by 7 per cent while the UK and Ireland region declined by 10 per cent. The changes in other regions were minor.

The run rate of underlying costs in local currencies was unchanged, adjusted for last year's impairment of goodwill of SEK -152.4 M, a provision of SEK -30.0 M for unutilized office space in London, and other items of SEK -8.5 M. Moreover, total costs, including depreciation/amortisation and impairment, of SEK 427.0 M (643.3) in total, were impacted by change projects during 2010.

Operating profit improved to SEK 50.3 M (-125.7) and the operating margin amounted to 2.4 (-5.5) percent. Comparing with the corresponding period last year, consideration should be given to the items during the period January-September last year which are described above under gross profit and costs of SEK -209 M in total.

Consolidated net financial items amounted to SEK -7.2 M (-24.8), which were largely due to changes in foreign exchange rates in respect of receivables from foreign subsidiaries. The Group had no external interest-bearing loans at 30 September.

Profit before tax thus amounted to SEK 43.1 M (-150.5). Profit after tax amounted to SEK 41.3 M (-183.7). The tax expense was positively impacted by Group utilising tax loss carryforwards more effectively from 2010.

The net margin for the first nine months of 2010 was 2.0 (neg) per cent.

Consolidated cash flow and financing for the period January – September 2010

The cash flow from operating activities before changes in working capital, amounted to SEK 32.5 (28.6) M, during the first nine months of 2010.

The change in working capital amounted to SEK -115.8 M (-71.1). The decrease was mainly due to a normalisation of payment flows after the proceeds of the rights issue were received during the first quarter. The cash flow from operating activities thus amounted to SEK -83.4 M (-42.5).

Net investments in non-current assets amounted to SEK -5.2 M (-13.2). The cash flow from financing activities amounted to SEK -199.2 M (-39.3) and consisted of amortisation of loans of SEK 242.1 M and the remaining proceeds from the rights issue of SEK 42.8 M. Thus, the cash flow for the nine month period amounted to SEK -287.8 M (-95.1).

On 30 September 2010, cash and cash equivalents amounted to SEK 136.2 M (40.5) and the Group had no interest-bearing liabilities (SEK 248.0 M). The Swedish Tax Agency repaid SEK 22.5 M during the third quarter, after an adjustment of TradeDoubler's tax return for income year 2008. The refund has no impact on earnings.

Consolidated profit for the period July-September 2010

Consolidated net sales fell by 2 per cent to SEK 697.9 (710.7) compared with the corresponding period last year, while the gross profit increased by 8 per cent to SEK 154.7 M (143.4). The gross margin thus increased to 22.2 (20.2) per cent.

Net sales increased by 6 per cent in local currencies. Increased sales within Network (Affiliate and Campaign) were partly off-set by a decline within Search in the UK and within Technology.

Operating profit improved to SEK 24.8 M (-185.9). An impairment of goodwill of SEK 152.4 M and other items were reported during the third quarter 2009 (see comments on period January-September above).

Profit before tax amounted to SEK 8.5 M (-224.9). Net profit amounted to SEK 11.3 M (-237.1).

Consolidated cash flow and financing for the period July-September 2010

The cash flow from operating activities before changes in working capital was SEK 19.2 M (-19.7) during the third quarter 2010. The improvement compared with the corresponding period of the preceding year was due to a tax refund, better earnings and lower taxes paid. The change in working capital amounted to SEK 2.4 M (-33.5). The cash flow from operating activities thus amounted to SEK 21.5 M (-53.2) and the cash flow for the period to SEK 20.4 M (-34.9)

Europe's leading partner within performance-based digital marketing TradeDoubler AB (publ), Sveavägen 20, 111 57 Stockholm, Sweden Telephone +46 (0)8-405 08 00, [email protected], www.tradedoubler.com, Corporate reg. no. 556575-7423, The registered office of the board of directors is in Stockholm. TradeDoubler Interim report January - September 2010 - 2 (10)

MSEK Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
Gross profit (GP) 2010 2009 2010 2009 2009
Central Europe 33 32 101 107 145
Northern and Eastern Europe 21 18 68 69 95
UK and Ireland 32 34 98 121 160
Southern Europe 69 60 210 220 290
Total 155 143 477 518 690

Operating profit (EBIT)

Central Europe 18 15 53 61 79
Northern and Eastern Europe 10 6 28 34 44
UK and Ireland 14 -169 47 -122 -109
Southern Europe 45 37 136 147 187
Parent Company and eliminations -63 -76 -213 -245 -305
Total 25 -186 50 -126 -105

Earnings per segment

The gross profit was unchanged in local currencies during the first nine months of the year compared with the corresponding period in 2009.

The gross profit in Central Europe during the first nine months of the year was 1 per cent higher in local currencies than in the corresponding period of the preceding year. The gross profit for Affiliate decreased during the period, which was counterbalanced by increased earnings in the service areas Campaign, Technology and Search. The gross profit for the third quarter increased by 3 per cent in local currencies compared with the corresponding quarter of the previous year.

The gross profit in Northern and Eastern Europe was unchanged in local currencies during the nine month period compared with last year. The gross profit for Affiliate and Technology decreased while Campaign and Search showed increased earnings. The gross profit increased by 11 per cent in local currencies during the third quarter, mainly due to an increased gross profit within the service area Campaigns.

The gross profit in the UK and Ireland during the first nine months of the year showed a decline of 12 per cent in local currencies compared with the previous year. The decline was primarily due to a negative development within the service areas Campaign, Technology and Search, while the largest service area Affiliate showed an increase in earnings. The gross profit in the third quarter fell by 10 per cent in local currencies. However, Affiliate and Campaign developed positively. Affiliate, which is the largest service area, showed an improved gross profit for the third consecutive quarter.

The Group largest region, Southern Europe delivered a gross profit for the first nine months of the year which was 7 per cent higher in local currencies than the corresponding period of the preceding year. All service areas displayed a positive development, especially Search, which doubled its earnings compared with the corresponding period of the preceding year. The increase in gross profit during the third quarter was 14 per cent in local currencies. The gross profit also increased in all service areas during the quarter.

Central functions include the finance, HR and legal departments, product development and product management, IT support, operations and development as well as TradeDoubler's international sales organisation. Overhead costs in the marketing companies only include costs for the local sales organisations.

Significant events after the end of the period

TradeDoubler announced in October that the company had decided to introduce a new business structure from year-end. The new business structure means that the company's core businesses, Affiliate and Campaign, will be brought together within Network, while the service areas Search and Technology will become independent units. It is intended to report according to these segments from 2011.

TradeDoubler simultaneously presented three strategic pillars for the company's continued development: One performance-based world-class network, One cost-efficient company, and One sales and results-driven corporate culture.

The Parent Company TradeDoubler AB's (publ) profit for the period January-September 2010

The parent company's net sales amounted to SEK 75.8 M (194.4). Revenues primarily consisted of licensing revenue and remuneration from subsidiaries for centrally performed services. The decrease in net sales was mainly due to lower licensing revenues.

Profit after tax amounted to SEK -5.5 M (69.1).

The average number of full-time equivalents in the parent company was 94 (92). The parent company's receivables from subsidiaries amounted to SEK 625.4 M (1,019.0) at the end of the third quarter and include financing in connection with the acquisition of IMW Group in 2007. The parent company's liabilities to subsidiaries amounted to SEK 106.4 M (515.6).

The parent company's settlement of debts to subsidiaries means that reduced net investments no longer exist in respect of certain loans from subsidiaries to the parent company.

Other information

Employees

At the end of the third quarter 2010, TradeDoubler's staff corresponded to 534 (580) full-time equivalents, including permanent, temporary, and hired employees. This was a decrease of 53 compared with 30 June 2010, which was mainly due to a restrictive human resources policy, which also explains the decline from the previous year. The average number of full-time equivalents during the first nine months of the year was 579 (596). From the third quarter 2010, the definition of the number of full-time equivalents is expressed more precisely as only including employees that are still in employment at the end of the month.

Risks and uncertainties

TradeDoubler divides risks into market-related risks, operational risks, financial risks and legal risks. These risks are described in the annual report for 2009 on pages 22-23 and pages 66-67. It is assessed that no significant risks or uncertainties have arisen.

Accounting policies

This interim report is prepared in accordance with the Swedish Annual Accounts Act and IAS 34, Interim Financial Reporting. For information regarding the accounting policies applied, see the 2009 Annual Report. The accounting policies and methods of calculation are unchanged, compared with the 2009 Annual Report apart from the fact that the assessment has been made that reduced net investments no longer exist in respect of certain loans from subsidiaries to the parent company. This means that foreign exchange differences in respect of

these loans are reported in the income statement from 2010 instead of via other comprehensive income as previously.

The new accounting standards that are effective from the first quarter 2010 have had no impact on TradeDoubler.

The TradeDoubler share

TradeDoubler AB had a share capital of SEK 17.1 M on 30 September 2010, distributed among 42,807,449 shares with a quota value of SEK 0.40. The average number of shares during the period January-September 2010 was 42,655,326. Earnings per share during the first nine months of 2010 totalled SEK 0.97 (-6.43).

English version of this report

Both English and Swedish versions of this report have been prepared. In the event of variation between the two reports, the Swedish version shall prevail.

Publication of the interim report

TradeDoubler discloses the information provided herein pursuant to the Swedish Securities Markets Act. The information was submitted for publication on 3 November 2010 at 8 a.m. CET.

Presentation of interim report

A meeting with analysts and the media has been arranged on 3 November at 11 a.m. in TradeDoubler's premises at Sveavägen 20, Stockholm.

The presentation may also be followed via telephone:

Sweden: +46 (0)8 - 5352 6440
UK +44 20 7138 0824
US: +1 212 444 0481
Code: 1428766

The presentation material will be published concurrently with the quarterly report on: www.tradedoubler.com/ir

Nomination Committee

The Annual General Meeting 2010 resolved that the nomination committee shall be composed of representatives of the three largest shareholders in terms of the number of votes on 30 June and the chairman of the board. The nomination committee is composed of the following persons:

  • Ramsay Brufer, Alecta (chairman)
  • Annika Andersson, Fourth Swedish National Pension Fund
  • Jan Andersson, Swedbank Robur funds
  • Mats Sundström, the chairman of the board

The nomination committee may be contacted via the chairman by e-mail [email protected] or by telephone +46 (0)706-56 92 62.

Annual General Meeting

TradeDoubler's annual general meeting will be held on 5 May 2011 in Stockholm.

Financial information

Year-end report 8 February 2011 Interim report January-March 2011 4 May 2011 Interim report January-June 2011 3 August 2011 Interim report January-Sept. 2011 2 November 2011

Contact information:

Urban Gillström, President and CEO, telephone +46 (0)70-785 76 00 Erik Skånsberg, CFO, telephone +46 (0)70-264 70 35 [email protected]

Address

TradeDoubler AB (publ), Sveavägen 20, SE 111 57 Stockholm, Telephone +46 (0)8-405 08 00, [email protected], www.tradedoubler.com Corporate registration number 556575-7423 The registered office of the board of directors is in Stockholm

Review of interim report

This interim report has not been examined by the company's auditor Ernst & Young AB.

Stockholm, 3 November 2010 On behalf of the board

Urban Gillström, President and CEO TradeDoubler AB (publ)

TradeDoubler in brief

TradeDoubler is active on the growing and rapidly changing European market for internet marketing. Digital marketing offers methods for advertisers to effectively market themselves and drive their sales. Digital marketing has greater reach than TV advertising in an increasing number of target groups and countries.

The company currently conducts operations in 18 European countries and reaches about 75 per cent of Europe's internet users TradeDoubler is the only player that is represented in principle on all relevant markets in Europe, which is a distinct competitive advantage. The company's most important markets are the UK, France and Germany, which combined, account for two thirds of total internet marketing in Europe.

TradeDoubler operates as an independent third party and arranges adverts amongst advertisers and websites/publishers which supply space on their homepages. TradeDoubler had approximately 1,750 advertisers and approximately135,000 active publishers at the end of the third quarter. TradeDoubler also offers services which help advertisers to optimise their marketing via search engines.

TradeDoubler creates value for both advertisers and publishers with its solid knowledge of internet marketing, transaction tracking, advanced administrative systems and its continuously updated network of advertisers and publishers.

Consolidated income statement

Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
SEK 000s 2010 2009 2010 2009 2009
Net Sales 697,914 710,694 2,067,987 2,288,952 3,014,349
Cost of goods sold -543,231 -567,319 -1,590,656 -1,771,318 -2,324,457
Gross profit 154,683 143,375 477,331 517,635 689,893
Selling expenses -84,741 -89,171 -274,750 -280,539 -374,959
Administrativ
e expenses *
-37,631 -78,764 -124,064 -178,245 -227,610
Dev
elopment expenses
-7,512 -8,895 -28,164 -32,112 -42,062
Goodwill write-down - -152,400 - -152,400 -150,339
Operating profit 24,799 -185,855 50,354 -125,661 -105,077
Net financial items -16,340 -39,066 -7,239 -24,820 -21,953
Profit before tax 8,459 -224,920 43,115 -150,482 -127,029
Tax 2,830 -12,151 -1,841 -33,263 -51,463
Net profit 11,290 -237,071 41,274 -183,745 -178,493
Profit after tax attributable to:
Equity holders of the Parent Company 11,290 -237,071 41,274 -183,745 -178,493
Statement of comprehensive income Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
SEK 000s
2010 2009 2010 2009 2009
Profit for the period, after tax 11,290 -237,071 41,274 -183,745 -178,493
Other comprehensive income
Exchange-rate differences -14,318 -26,083 -21,858 26,227 24,491
Total comprehensive income for the period, after tax -3,028 -263,154 19,416 -157,518 -154,002
Comprehensive income attributable to
Parent company shareholders -3,028 -263,154 19,416 -157,518 -154,002
Profit per share
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
SEK 2010 2009 2010 2009 2009
Profit per share 0.26 -8.29 0.97 -6.43 -5.31
Profit per share after dilution 0.26 -8.29 0.97 -6.43 -5.31
Number of Shares
Weighted av
erage before dilution
Weighted av
erage after dilution
42,807,449
42,807,449
28,581,663
28,581,663
42,655,326
42,655,326
28,581,633
28,581,633
33,590,996
33,590,996

Key data - Group

Key data - Group
Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
2010 2009 2010 2009 2009
Gross profit (GP) / rev
enue (%)
22.2 20.2 23.1 22.6 22.9
Operating profit (EBIT ) / rev
enue (%)
3.6 -26.2 2.4 -5.5 -3.5
Operating profit (EBIT) / gross profit (GP) (%) 16.0 -129.6 10.5 -24.3 -15.2
Net profit/gross profit (GP) (%) 7.3 -165.4 8.6 -35.5 -25.9
Equity/assets ratio (%) 37.9 10.5 37.9 10.5 27.8
Return on equity (%) 14.7 -79.4 14.7 -79.4 -46.2
Av
erage number of employees
534 578 567 595 589
Margin td Affiliate + td Campaign
(transaction margin) (%) ** 20.2 21.1 21.0 21.2 21.2
Margin td Search (Search margin) (%) ** 9.0 9.9 10.6 9.1 10.2

*) Last year's administrative expenses include a provision of SEK -30 M for unutilised office space in London and other items of SEK -8.5 M.

**) The transaction margin is calculated without fixed charges and connection charges for all periods (does not apply for the Search margin).

Consolidated balance sheet

30 Sep 30 Jun 31 Mar 31 Dec 30 Sep
SEK 000s 2010 2010 2010 2009 2009
Assets
Intangible fixed assets 431,530 475,058 450,749 477,276 474,221
Tangible fixed assets 16,355 19,002 20,653 21,425 23,762
Financial fixed assets 2,193 2,197 2,388 2,520 3,652
Deferred tax assets 33,808 27,985 27,719 28,831 46,488
Total fixed assets 483,885 524,242 501,508 530,052 548,123
Accounts receiv
ables
613,730 638,226 603,061 657,049 650,708
Tax assets 45,564 47,374 44,518 21,454 4,011
Other current receiv
ables
39,534 36,647 38,180 80,427 37,816
Cash & cash equiv
alents
136,212 121,469 148,201 436,596 40,505
Total current assets 835,039 843,716 833,959 1,195,526 733,040
Total assets 1,318,924 1,367,958 1,335,468 1,725,578 1,281,163
Shareholders' equity and liabilities
Shareholders' equity 500,409 503,437 473,490 480,507 134,396
Subordinated loan - - - 50,000 50,000
Deferred tax liabilities 19,544 15,578 17,649 23,862 19,840
Other prov
isions
854 1,474 - - -
Total long-term liabilities 20,399 17,052 17,649 73,862 69,840
Current interest-bearing liabilities - - - 192,065 197,961
Accounts payable 68,540 72,718 78,312 127,432 86,381
Current liabilities to publishers 387,015 403,435 386,084 418,615 374,249
Tax liabilities - 2,669 3,668 - -
Other current liabilities 342,562 368,646 376,264 433,096 418,336
Total current liabilities 798,117 847,468 844,328 1,171,209 1,076,928

Reconciliation of shareholders' equity

Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
SEK 000s 2010 2009 2010 2009 2009
Opening balance 503,437 397,550 480,507 291,914 291,914
Comprehensiv
e income for the period
-3,028 -263,154 19,416 157,518 -154,002
Share-related compensation settled
with equity instruments - - - - -551
New share issues - - 486 - 343,146
Total shareholders equity 500,409 134,396 500,409 134,396 480,507

All the equity is attributable to the parent company's shareholders.

Consolidated cash-flow statement

Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
SEK 000s 2010 2009 2010 2009 2009
Operating activities
Profit before tax 8,459 -224,921 43,115 -150,482 -127,030
Adjustments for items not included in cash flow 5,123 223,411 21,593 242,731 249,959
Income taxes paid 5,568 -18,216 -32,246 -63,666 -76,888
Cash flow from operating activities before changes in 19,150 -19,726 32,462 28,583 46,041
working capital
Changes in working capital 1,226 -33,467 -115,850 -71,085 18,669
Cash flow from operating activities 20,376 -53,193 -83,388 -42,502 64,710
Investing activities
Net inv
estments in intangible assets
-475 - -1,526 - -1,816
Net inv
estments in tangible assets
-603 -1,379 -3,645 -10,913 -11,096
Net inv
estments in financial assets
-14 -325 -37 -2,334 -1,202
Cash flow from investing activities -1,092 -1,704 -5,208 -13,247 -14,114
Financing activities
New share issues - - 42,820 - 300,812
External loan - 30,000 - 80,000 80,000
Amortisation - -10,000 -242,065 -119,327 -124,762
Cash flow from financing activities - 20,000 -199,245 -39,327 256,050
Cash flow for the period 19,284 -34,897 -287,841 -95,076 306,646
Cash and cash equivalents
On the opening date 121,469 73,891 436,595 133,389 133,389
Translation difference in cash and cash equiv
alents
-4,541 1,511 -12,542 2,192 -3,439
Cash and cash equivalens on the closing date 136,212 40,505 136,212 40,505 436,596
Adjustments for non-cash items
Depreciation 7,735 9,409 24,451 28,279 39,115
Goodwill write-down - 152,400 - 152,400 150,339
Other -2,612 61,602 -2,858 62,052 60,505
Total non-cash items 5,123 223,411 21,593 242,731 249,959

Europe's leading partner within performance-based digital marketing

TradeDoubler AB (publ), Sveavägen 20, 111 57 Stockholm, Sweden

Telephone +46 (0)8-405 08 00, [email protected], www.tradedoubler.com, Corporate reg. no. 556575-7423, The registered office of the board of directors is in Stockholm. TradeDoubler Interim report January - September 2010 - 8 (10)

Income statement - Parent company

Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
SEK 000s 2010 2009 2010 2009 2009
Net Sales 15,424 56,008 75,828 194,352 255,563
Cost of goods sold -2,823 -3,357 -8,549 -9,630 -12,443
Gross profit 12,601 52,651 67,280 184,722 243,120
Selling expenses -2,334 -1,130 -5,260 -4,088 -5,465
Administrativ
e expenses
-25,062 -29,680 -98,344 -85,598 -120,904
Dev
elopment expenses
-5,937 -6,317 -23,527 -22,329 -30,334
Operating profit -20,731 15,524 -59,851 72,708 86,418
Net financial items 10,275 10,203 50,946 20,003 2,008
Profit before tax -10,456 25,726 -8,905 92,711 88,425
Tax 3,439 -7,617 3,443 -23,565 -21,057
Net profit -7,017 18,109 -5,462 69,147 67,368

Balance sheet - Parent company

30 sep 30 jun 31 mar 31 dec 30 sep
SEK 000s 2010 2010 2010 2009 2009
Assets
Subscribed capital unpaid - - - 42,334 -
Intangible fixed assets 2,972 2,560 2,560 1,816 -
Fixed tangible assets 10,890 11,806 12,822 13,348 14,468
Financial fixed assets 389,672 420,381 394,944 410,757 52,189
Deffered tax assets 4,100 661 - - -
Total fixed assets 407,633 435,408 410,326 425,921 66,657
Accounts receiv
ables
3,572 2,600 2,257 3,301 3,057
Receiv
ables from Group companies
292,354 311,160 315,507 536,635 1,019,041
Tax assets 34,395 40,706 34,329 12,422 1,750
Other current receiv
ables
8,448 9,698 10,431 11,704 8,526
Cash & cash equiv
alents
-3,851 -713 36,063 270,836 -
Total current assets 334,918 363,452 398,587 834,898 1,032,373
Total assets 742,552 798,860 808,913 1,303,153 1,099,030
Shareholders' equity and liabilities
Shareholders equity 511,106 541,535 545,437 534,638 192,556
Subordinated loan - - - 50,000 50,000
Long-term liabilities to Group companies - - - 320,281 -
Deferred tax liability - - 1,179 5,638 5,621
Total long-term liabilities - - 1,179 375,919 55,621
Current interest-bearing liabilities - - - 192,065 207,048
Accounts payable 10,509 12,205 11,739 11,945 7,990
Liabilities to Group companies 106,412 133,037 119,328 51,350 515,582
Tax liabilities - - - - -
Other liabilities 114,525 112,082 131,230 137,237 120,233
Total current liabilities 231,446 257,324 262,297 392,596 850,854
Total shareholder´s equity and liabilities 742,552 798,860 808,913 1,303,153 1,099,030

Pledged assets and contingent liabilities

30 Sep 30 Jun 31 Mar 31 Dec 30 Sep
SEK 000s 2010 2010 2010 2009 2009
Group
Pledged assets none none 94,226 91,876 143,550
Rent deposits 2,190 2,194 2,385 2,517 3,652
Contingent liabilities none none none none none
Parent company
Pledged assets none none 21,442 21,442 23,565
Contingent liabilities 143,794 162,677 6,299 3,094 30,662

Europe's leading partner within performance-based digital marketing

TradeDoubler AB (publ), Sveavägen 20, 111 57 Stockholm, Sweden

Telephone +46 (0)8-405 08 00, [email protected], www.tradedoubler.com, Corporate reg. no. 556575-7423, The registered office of the board of directors is in Stockholm. TradeDoubler Interim report January - September 2010 - 9 (10)

Quarterly summary

Consolidated income statement

Jul-Sep Apr-Jun Jan-Mar Oct-Dec Jul-Sep Apr-Jun Jan-Mar Oct-Dec
SEK 000s 2010 2010 2010 2009 2009 2009 2009 2008
Net Sales 697,914 660,897 709,176 725,397 710,694 734,036 844,222 814,239
Cost of goods sold -543,231 -502,119 -545,306 -553,139 -567,319 -546,596 -657,402 -619,206
Gross profit 154,683 158,777 163,870 172,258 143,375 187,440 186,820 195,033
Total costs -129,884 -149,260 -147,833 -151,673 -329,230 -153,951 -160,116 -186,276
Operating profit 24,799 9,517 16,037 20,584 -185,855 33,489 26,704 8,757
Net financial items -16,340 16,476 -7,374 2,868 -39,066 13,386 859 -5,240
Profit before tax 8,459 25,993 8,663 23,452 -224,920 46,875 27,564 3,517
Tax 2,830 954 -5,625 -18,200 -12,151 -13,468 -7,644 163
Net profit 11,290 26,947 3,037 5,252 -237,071 33,407 19,920 3,680

Consolidated balance sheet

30 Sep 30 Jun 31 Mar 31 Dec 30 Sep 30 Jun 31 Mar 31 Dec
SEK 000s 2010 2010 2010 2009 2009 2009 2009 2008
Assets
Intangible fixed assets 431,530 475,058 450,749 477,276 474,221 706,120 657,664 631,657
Other fixed assets 52,356 49,184 50,760 52,776 73,902 93,105 77,383 69,979
Current receiv
ables
698,827 722,247 685,758 758,930 692,535 710,668 737,552 716,261
Cash & cash equiv
alents
136,212 121,469 148,201 436,596 40,505 73,891 151,088 133,389
Total assets 1,318,924 1,367,958 1,335,468 1,725,578 1,281,163 1,583,784 1,623,687 1,551,286
Shareholders' equity and liabilities
Shareholders' equity 500,409 503,437 473,490 480,507 134,396 397,550 333,907 291,914
Long-term interest bearing debt - - - 50,000 50,000 50,000 50,000 -
Long-term non-interest bearing debt 20,399 17,052 17,649 23,862 19,840 16,268 16,578 17,232
Current interest bearing debt - - - 192,065 197,961 177,500 207,500 286,827
Current non-interest bearing debt 798,117 847,468 844,328 979,144 878,966 942,466 1,015,702 955,312
Total shareholder´s equity and liabilities 1,318,924 1,367,958 1,335,468 1,725,578 1,281,163 1,583,784 1,623,687 1,551,286

Consolidated cash flow statement

Jul-Sep Apr-Jun Jan-Mar Oct-Dec Jul-Sep Apr-Jun Jan-Mar Oct-Dec
SEK 000s 2010 2010 2010 2009 2009 2009 2009 2008
Operating activities
Profit before tax 8,459 25,993 8,662 23,452 -224,921 46,875 27,564 3,516
Adjustments for items not included in cash flow 5,123 6,579 9,891 7,229 223,411 9,489 9,831 8,783
Tax paid 5,568 -10,887 -26,927 -13,223 -18,216 -47,774 2,324 3,341
Cash flow from changes in working capital 1,226 -46,108 -70,967 89,754 -33,467 -47,953 10,335 72,159
Cash flow from operating activities 20,376 -24,423 -79,341 107,212 -53,193 -39,363 50,054 87,799
Cash flow from inv
esting activ
ities
-1,092 -775 -3,341 -867 -1,704 -8,348 -3,195 -5,877
Cash flow from financing activ
ities
- - -199,245 295,377 20,000 -30,000 -29,327 -37,942
Cash flow for the period 19,284 -25,198 -281,927 401,722 -34,897 -77,711 17,532 43,980
Cash and cash equivalents
On the opening date 121,469 148,201 436,596 40,505 73,891 151,088 133,389 82,605
Translation difference -4,541 -1,534 -6,468 -5,631 1,511 514 167 6,804
Cash and cash equivalens on the closing date 136,212 121,469 148,201 436,596 40,505 73,891 151,088 133,389

Key data - Group

Key data - Group
Jul-Sep Apr-Jun Jan-Mar Oct-Dec Jul-Sep Apr-Jun Jan-Mar Oct-Dec
2010 2010 2010 2009 2009 2009 2009 2008
Gross profit (GP) / rev
enue (%)
22.2 24.0 23.1 23.7 20.2 25.5 22.1 24.0
Operating profit (EBIT ) / rev
enue (%)
3.6 1.4 2.3 2.8 -26.2 4.6 3.2 1.1
Operating profit (EBIT) / gross profit (GP) (%) 16.0 6.0 9.8 11.9 -129.6 17.9 14.3 4.5
Net profit/gross profit (GP) (%) 7.3 17.0 1.9 3.0 -165.4 17.8 10.7 1.9
Equity/assets ratio (%) 37.9 36.8 35.5 27.8 10.5 25.1 20.6 18.8
Return on equity (%) 14.7 -44.8 -48.4 -46.2 -79.4 26.3 22.4 30.9
Av
erage number of employees
534 587 588 569 578 589 618 640
Margin td Affiliate + td Campaign
(transaction margin) (%) * 20.2 22.0 20.9 21.2 21.1 21.3 21.3 22.5
Margin td Search (Search margin) (%) * 9.0 10.2 12.6 15.0 9.9 8.6 9.0 10.1

*) The transaction margin is calculated without fixed charges and connection charges for all periods (does not apply for the Search margin).

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