Quarterly Report • Oct 23, 2008
Quarterly Report
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Revenues decrease in Search whilst Transaction and Search margins improve.
TradeDoubler disclose the information herein pursuant to the Swedish Securities Market Act. The information was submitted for publication at 08.00 CET October 23, 2008. This report has been prepared in both Swedish and English. In cases of variation in the content of the two versions, the Swedish version shall prevail.
During the third quarter TradeDoubler produced a solid result despite a period of finacial instability. We are pleased to report strong and improving transaction and search margins, an effect of losing a high volume – low margin client. In addition we report an improvement in cash flow. This is favorable, both confirming our business model and enabling TradeDoubler to decrease short term financing. The effect of currency decline of the British Pound versus the Swedish krona year on year was –11.6 percent. This in turn impacts the Group's gross profit result by –4.2 percent or 6.9 MSEK. Adjusted for the GBP effect the growth year on year for the groups gross profit was 13.0 percent.
TradeDoubler's markets performed according to expectations for the quarter. The new management team in the UK is starting to produce results and the UK business has reversed the trend and grown steadily in the quarter. Being our largest market, we continue to monitor the UK business closely. We noticed a weakness in France in July and August, but performance improved substantially in September. Germany's result over the quarter gives us confidence in the German market especially for the transaction segment going forward. Client wins during the include British Airways expanding into a further seven markets and the signings of Bwin and Toshiba.
The Transaction business continues to perform with solid margins. The performance is backed up by the Campaign product which continues to show growth rates despite slower July and August sales. Our Search business is operating in five markets outside the UK; France, Germany, Holland, Spain and Sweden. The roll-out is still behind schedule due to the slower start in the beginning of the year. We will as planned, continue to roll-out the Search business to the rest of our markets during 2009. Search performance in the quarter was encouraging, and for the UK market we won a important new client. In the Netherlands DFDS Seaways and Bose were 2 other significant client wins. Our consultancy sales slowed in the third quarter thus impacting the growth of our Other segment which did not meet our targets. The reduction in consultancy and fixed fee revenues is mainly a result of renegotiations of longer term deals with a large number of our top clients. Our technology sales of td Searchware4 still continue to deliver however td Toolbox sales is affected with seasonality in the quarter. We continue to improve our offerings in order to grow the business.
We have continued to strengthen our organisation both within operational management and in our sales teams. Björn Lindberg has taken on the position as our new COO. Björn will take on overall responsibility for our sales and marketing operations across all 18 European markets and Japan. Björn brings a vast depth of knowledge to the role, gained not only through his various positions at TradeDoubler but also through his extensive experience within other industry segments. Our latest addition to our management team is Dominic Trigg. Dominic joins as V.P. Global Sales and is tasked with the responsibility for TradeDoubler's global advertiser, publisher and agency sales. Dominic brings with him a solid background from online and traditional media.
Overall I would like to conclude that the quarter has produced strong, sustainable margins and healthy cashflows. However we are focusing on improving our cost efficency, in particular examing our current staffing levels, given our cautious outlook. This quarter sees a decrease in the number of employees for the first time in the company's history.
The current instability within the financial markets will without doubt impact all business. The major sectors which TradeDoubler's clients operate within are travel, consumer electronics, retail and finance. These are all sectors which will see reduced consumer spending during periods of slower economic growth. However, during these tougher economic times consumers will also increase their focus on value and as such research stresses that e-commerce will prosper. It is still too early to say to what extent the slowdown in the economy will have impact an TradeDoubler's business. Industry research stresses that times like these may prove to be an advantage for TradeDoubler's long-term market share and performance given the company's focus on measurable performance based digital marketing. The structural shift from offline to online marketing may speed up as TradeDoubler's existing or potential clients are planning their budgets for 2009 and beyond. Whilst there is no historical data to prove this, it is certain that the shift will continue. TradeDoubler, with its strong brand, high-quality offering, publisher reach, unique technical platform and broad and local knowledge about internet marketing is well-positioned on this market in Europe and beyond.
The research institutes Jupiter and Forrester predict online ad spending to increase by 65 percent and 62 percent respectivly from 2007 to 2011. The corresponding increase for e-commerce are 72 percent and 101 percent to 2011 from 20071 .
1 Jupiter Research "European Online Advertising Forecast, 2007 to 2012", December 2007 and "European Online Retail Forecast, 2007 to 2012", August 2007, and Forrester, "Europe´s eCommerce Forecast; 2006 to 2011", June 2006 and "European online marketing", July 2007.
In the third quarter, the Campaign product has impacted the Group's historical seasonal pattern of an Q2 to Q3 increase with a sequential decline in line with seasonality and according to plan. TradeDoubler is affected by seasonality in sales. Travel, retail and finance are the three largest sectors within Affiliate and Search. The travel segment typically experiences its sales peak in Q1 and Q3 and has shown resilance in the quarter. Retail is strong in Q4 whilst finance clients, whom have shown weakness in the quarter have a more steady performance. For Campaigns the largest sectors are automotive, telecom and finance and TradeDoubler expect to see the results in September continue until the end of the year.
At the end of the period TradeDoubler had 1,730 (1,177) advertisers and the number of active publishers amounted to 128,475 (118,088). TradeDoubler's 25 largest advertisers accounted for 29.8 percent of the gross profit during the period. The top 25 publishers in the Group accounted for 16.4 percent of TradeDoubler's gross profit. TradeDoubler's limited dependence on few large advertisers as well as publishers ensures a diversified risk.
TradeDoubler intends to grow in line with the underlying market growth. With the recent succesful management changes in the UK in conjunction with unrivalled European presence which is showing strong sustainable growth TradeDoubler's outlook is positive. Whilst we strongly believe in the counter cyclical nature and ROI focus of our products, we remain cautious about our development in the short term given the broader macro economic environment.
The Group revenues increased by 4.1 percent in the quarter to 788.5 (757.4) MSEK. Transaction revenues accounted for 541.8 (490.0) MSEK of total revenues, up 10.6 percent compared to the third quarter 2007. Search revenues amounted to 209.0 (230.9) MSEK. Other revenues, that consist mainly of start-up, license and monthly fees as well as consulting revenues, were 37.7 (36.6) MSEK, an increase of 3.3 percent compared to the previous year. The gross profit for the period increased by 8.7 percent to 180.8 (166.3) MSEK. Transaction gross profit was 124.6 (112.2) MSEK, an increase of 11.0 percent year on year and Search gross profit was 20.5 (17.5) MSEK. Other gross profit was 35.7 (36.6) MSEK. The Transaction gross margin for the quarter amounted to 23.0 (22.9) percent. The gross margin for Search amounted to 9.8 (7.6) percent. 50 100 150 200 250
The Group revenues increased by 47.5 percent in the period to 2,642.5 (1,791.2) MSEK. Transaction revenues accounted for 1,613.4 (1,462.3) MSEK of total revenues, up 10.3 percent compared to the same period in 2007. Search revenues amounted to 900.7 (230.9) MSEK. Other revenues were 128.4 (98.0) MSEK, an increase of 31.0 percent compared to the previous year. The gross profit for the period increased by 23.0 percent to 552.1 (448.9) MSEK. Transaction gross profit was 361.3 (333.4) MSEK, an increase of 8.3 percent year on year and Search gross profit was 64.5 (17.5) MSEK. Other gross profit was 126.3 (98.0) MSEK. The Transaction gross margin for the period amounted to 22.4 (22.8) percent. The gross margin for Search amounted to 7.2 (7.6) percent.
EBITDA for the quarter amounted to 56.6 (55.3) MSEK, an increase of 2.4 percent and EBIT during the period decreased by 1.6 percent to 48.0 (48.8) MSEK corresponding to an operating margin of 6.1 (6.4) percent. Costs for amortization of the assets in the Search Works and the Technology Works amounted to 4.7 (3.5) MSEK. Costs have been reduced in the quarter by 18.7 (–4.5) MSEK relating to warrant schemes were the minimum performance criteria not will be met. Costs have decreased in the quarter by capitalisation of development expenses amounting to 1.7 (0) MSEK. Contribution from The Search Works and The Technology Works adhere to the Group's expectations of a neutral EPS contribution for 2008 as previously stated. Financial net in the quarter amounted to –1,1 (17,4) and consist of, interest income of 0.9 MSEK, interest expense –3.6 MSEK and currency exchange gains of 1.6 MSEK. Group profit before tax for the quarter amounted to 46.9 (66.2) MSEK and net profit decreased by 30.0 percent and totalled 34.7 (49.6) MSEK. 0 20 40 60 80
EBITDA for the period amounted to 166.6 (140.3) MSEK, an increase of 18.7 percent and EBIT during the period increased by 8.8 percent to 141.2 (129.8) MSEK corresponding to an operating margin of 5.3 (7.2) percent. Costs for amortization of intangible assets in the Search Works and The Technology Works amounted to 14.2 (3.5) MSEK. Costs have decreased in the period by capitalisation of development expenses amounting to 9.3 (0) MSEK. Expenses have been reduced in the period by 12.4 (–19.6) MSEK relating to warrant schemes were the minimum performance criteria not will be met. Adjusted for impact of warrant schemes, the operating margin for the period was 4.9 (8.3) percent. Financial net in the period amounted to –15,7 (22,3) and consist of, interest income of 4.9 MSEK, interest expense –16.6 MSEK and currency exchange losses of –4.0 MSEK. Net profit for the period decreased by16.3 percent to 90.7 (108.3) MSEK. The increase in selling expenses for the Group is directly related to the higher amount of employees in 2008 compared to 2007.
The average number of shares after dilution for the quarter amounted to 28,621,523 resulting in earnings per share of 1.21 (1.74) SEK for the quarter. The average number of shares after dilution for the period amounted to 28,758,653 resulting in earnings per share of 3.15 (3.79) SEK.
At September 30, cash and cash equivalents amounted to 82.6 (190.8) MSEK. Cash flow from operations, before changes in working capital was 86.2 (166.3) MSEK during the period. The change in working capital for the period was 43.9 (–64.7) MSEK. Cash flow from operations, before changes in working capital was 31,2 (77,1) MSEK in the quarter. The change in working capital for the quarter was 71,4 (–73,7) MSEK. The fluctuations intra quarter in working capital lies within timing of accounts receivable and payables primarily within search, and shall be considered normal for our operation. Net investments for tangible assets during the period amounted to –8.5 (–7.2) MSEK. Net investments for intangible assets during the period was –9.3 (–0.4) MSEK. A share buyback programme have affected the financing activities with –11.1 (0)MSEK. The Group has a total financing of 325.0 MSEK. Group net debt at the end of the period was 242.2 MSEK.
95.7 (96,0) percent of the Group revenues were generated outside of Sweden. Changes in currency exchange rates had an impact on the Group's income statement and balance sheet. TradeDoubler have no hedging of currency exchange rates.
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.
At the end of the period the Group had 638 (548) employees, of which 36 (34.6) percent are women. The average number of employees in the period was 642 (538). The number of TradeDoubler employees decreased by 6 people from previous quarter 2008 and TradeDoubler continue to evaluate staffing levels according to operational growth.
The Parent Company's sales during the third quarter increased by 25.7 percent to 83.0 (66.0) MSEK, an effect of strong growth in the Euro countries. Sales consist primarily of licence fees from subsidiaries. Profit before tax for the third quarter amounted to 60.8 (26.2) MSEK. The average number of employees in the Parent Company was 83 (99) in the period.
Transactions with subsidiaries within the Group essentially consist of license fees of 236.4 (207.9) MSEK, which the Parent Company charges the subsidiaries and other revenue of 9.4 (10.9) MSEK. Transactions within the Group are on an arms lengths basis. Intercompany transactions are eliminated in the consolidated accounts. The Parent Company's receivables on subsidiaries totalled 643.7 (876.0) MSEK including the financing connected to the purchase of the IMW Group. The Parent Company's liabilities to subsidiaries amount to 75.3 (138.6) MSEK. Intangible assets including the Searchware technology, the Bidbuddy brand and Dialog technology was sold for 26.6 MSEK from Bidbuddy Ltd within the Group as per June 30, 2008.
On May 6, 2008 the Annual General Meeting approved the Board of Director's motion for a performance-based share programme. The programme extends for five years, including a performance period of three years and will comprise at most 240,000 performance shares targeted at a maximum of 80 employees. The total cost, calculated in accordance with IFRS 2, recognised for the performance-based share programme is 0,3 MSEK.
The Board of Directors decided on July 24, 2008 to exercise the authorisation for the purpose of hedging its commitments in connection with above mentioned programme. Following the authorisation, the company has repurchased 65,000 shares within the price interval between the highest buying price and the lowest selling price at Nasdaq OMX Stockholm Exchange. September 2, 13,000 shares at a price of 58 SEK per share were repurchased and September 5, 52,000 shares at a price of 57.75 SEK per share were repurchased representing an investment of 3,8 MSEK for the quarter. TradeDoubler currently holds 130,000 shares in the company representing an investment of 11,1 MSEK.
| Gross profit by revenue source | (Jul–Sep 08) | |||||
|---|---|---|---|---|---|---|
| MSEK | Q3 -08 | Q2 -08 | Q1 -08 | Q4 -07 | Q3 -07 | |
| Transaction | 124.6 | 117.9 | 118.8 | 128.6 | 112.2 | Other 19.8% Transaction |
| Search | 20.5 | 19.6 | 24.4 | 20.1 | 17.5 | 68.9% |
| Other | 35.7 | 42.9 | 47.7 | 38.4 | 36.6 | |
| Total | 180.8 | 180.4 | 190.9 | 187.1 | 166.3 | Search 11.3% |
| EBITDA by revenue source | ||||||
| MSEK | Q3 -08 | Q2 -08 | Q1 -08 | |||
| Transaction | 38.9 | 33.6 | 37.6 | |||
| Search | 3.6 | 3.4 | 5.8 | |||
| Other | 14.1 | 12.0 | 17.6 | |||
| Total | 56.6 | 49.0 | 61.0 |
The Transaction business showed good performance in the third quarter with growth for the Affiliate product supported as in previous quarters by strong growth, especially post the holiday months for the Campaign products. Gross profit for the transaction segment grew 11.0 percent year on year and 5.7 percent sequentially boosted by strong sales whilst at the same time maintaining a strong transaction margin of 23.0 (22.9) percent. The consistent work to improve efficiency of existing Affiliate programs, the addition of pan European clients early in the year leading to programs reaching size and scale in the third quarter is a contributing factor for the growth. The peak in September for the segment shows sustainability of the business model and also provides positive momentum on entering the important fourth quarter.
Search also saw gross profit growth of 17.0 percent year on year in the quarter. The effect of removing "high volume – low margin clients" such as moneysupermarket.com saw the segment reach a margin of 9.8 (7.6) percent. Gross profit grew 4.96 percent versus the previous quarter and EBITDA grew by 5.9 percent, again reiterating the focus on profitability in our business and within the Search segment.
While showing decline in gross profit of –2.5 percent year on year, the revenue of the Other segment increased by 3.3 percent with gross profit margins at 94.7 (98.1) percent. Consultancy billings and fixed fees for clients have decreased both as a result of client renegotiations. The technology divisions sales of td Searchware4 continued to improve both year on year as well as for sequential quarters. td Toolbox sales were slower than expected and improved towards the end of the quarter.
| Gross profit by market | (Jul–Sep 08) | ||||||
|---|---|---|---|---|---|---|---|
| MSEK | Q3 -08 | Q2 -08 | Q1 -08 | Q4 -07 | Q3 -07 | Rest of World | |
| United Kingdom | 59.7 | 56.5 | 74.9 | 76.7 | 72.5 | 26.9% | UK 33.0% |
| France | 24.6 | 27.5 | 27.9 | 30.5 | 23.5 | ||
| Germany | 19.6 | 12.9 | 13.4 | 12.0 | 11.2 | ||
| Nordic Region | 28.2 | 31.2 | 26.6 | 25.8 | 23.2 | ||
| Rest of world | 48.7 | 52.3 | 48.1 | 42.1 | 35.9 | ||
| Total | 180.8 | 180.4 | 190.9 | 187.1 | 166.3 | Nordic 15.6% | France 13.6% |
| Germany 10.9% |
The important UK market showed renewed confidence in the quarter and steadily improved gross profit month-on-month. Gross profit performance was however down including currency effect by 17.7 percent year on year whilst the third quarter did improve sequentially on the previous quarter by 5.7 percent. The British Pound decreased in value versus the SEK by –11.6 percent year on year, a significant number affecting the Group's consolidated gross profit growth numbers by –4.2 percent or –6.9 MSEK. In order to further strengthen the UK operations for all divisions, actions are in place to ensure further improvement in efficiencies which we will see moving forward. Already these actions add to the contribution from the UK operations. Overall the European markets has been impacted by vacation in July and August but generally performed well in September. This trend is confirmed in France where the Campaign product has significant size but in July and August underperformed expectations. Germany managed to reach gross profit numbers in a solid performance across all products. Germany saw an increase in the gross profit to 19.6 MSEK, an increase of 51.9 percent versus the previous quarter. We are very pleased with the results from Germany as this is the single market where TradeDoubler is not the market leader in Affiliate marketing and where we have a new management team.
Gross profit in the Nordic region increased year on year by 21.6 percent.
The rest of Europe produced a solid set of numbers with highlights in Italy, and Switzerland as well as strong growth levels in Eastern Europe. The markets are showing increases across all of TradeDoubler's product offerings. Spain performed in line with our expectations and delivered numbers comparable to the first quarter of 2008.
TradeDoubler's Japanese business added new clients in the quarter and saw the delivery of several localized key technical functionalities. This will continue to improve the competitiveness of the local offerings moving forward.
6
This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting and the Swedish Annual Accouts Act. The Group adopts IFRIC 11 since January 1, 2007. 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. Further, the Group has adopted the regulations to capitalise development expenditure in accordance with IFRS since January 1,2008. A description of the accounting policies is included in note 1 of the Annual Report 2007. There are no new standards or interpretations issued by International Financial Reporting Interpretations Committee (IFRIC) and endorsed by the European Commission, affecting the Company as from January 1, 2008. The Parent company reports in accordance with RFR 2.1, "Reporting in separate statements" and the Swedish Annual Accounts Act.
The AGM 2008 adopted principles for appointing a new Nomination Committee. The Committee shall be composed of representatives from the largest shareholders (by number of votes) wishing to appoint a representative as well as the chairman of the Board of Directors. The basis for appointment is the shareholders statistics available on June 30, 2008 including other shareholder information available to the company at this time. A new Nomination Committee has been appointed and consists of Ramsey Brufer (Chairman), representing Alecta, Annika Andersson, representing the Fourth Swedish National Pension Fund, Anders Ljungqvist, representing AMF, and Kjell Duveblad, Chairman of the Board of Directors.
The AGM of TradeDoubler will be held at 16.00 CET May 6, 2009 at Norra Latin in Stockholm, Sweden. The Annual Report will be published April 20, 2009 on TradeDoubler's website and will be on hand at TradeDoubler's head office in Stockholm. In addition, printed versions will be distributed by post to shareholders approximately two weeks before the Annual General Meeting upon request.
The report will be released to the market at 08.00 on October 23,2008 CEST and at the same time published on TradeDoubler's website, www.tradedoubler.com. There will be a telephone conference at 10.00 CEST on October 23, 2008 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 56 619 338 International: +44 (0)1452 555 566
• Q4 2008 – January 29, 2009
William Cooper, President and CEO +46-8-405 08 00 Casper Seifert, CFO +46-8-405 08 27 Ann-Charlotte Johansson, Group IR Manager +46-8-405 08 05
Stockholm, October 23, 2008
William Cooper, CEO and President
We have reviewed the interim report of TradeDoubler AB (publ), corporate identity number 556575-7423, as of September 30, 2008 and for the nine-month period then ended. The Board of Directors and the President are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing in Sweden RS and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Annual Accounts Act for the Group and in accordance with the Annual Accounts Act for the Parent Company.
Stockholm October 23, 2008
KPMG AB
Carl Lindgren Authorized Public Accountant
| TSEK | Jan–Sep 2008 | Jan–Sep 2007 | Jul–Sep 2008 | Jul–Sep 2007 | Jan–Dec 2007 |
|---|---|---|---|---|---|
| Revenue | 2,642,457 | 1,791,222 | 788,527 | 757,454 | 2,663,642 |
| Cost of services sold | –2,090,405 | –1,342,316 | –607,722 | –591,203 | –2,027,619 |
| Gross profit | 552,052 | 448,906 | 180,805 | 166,251 | 636,023 |
| Selling expenses | –292,870 | –231,978 | –98,309 | –89,726 | –310,459 |
| Administrative expenses | –78,986 | –67,965 | –21,626 | –21,593 | –102,567 |
| Development expenses | –39,011 | –19,133 | –12,885 | –6,136 | –28,164 |
| Operating profit | 141,185 | 129,830 | 47,985 | 48,796 | 194,833 |
| Net financial items | –15,725 | 22,373 | –1,051 | 17,386 | 14,123 |
| Profit before tax | 125,460 | 152,203 | 46,934 | 66,182 | 208,956 |
| Income tax expense | –34,735 | –43,939 | –12,189 | –16,533 | –56,609 |
| Net profit | 90,725 | 108,264 | 34,745 | 49,649 | 152,347 |
| Basic earnings per share (SEK) | 3,18 | 3.86 | 1,22 | 1.77 | 5.42 |
| Diluted earnings per share (SEK) | 3,18 | 3.79 | 1,22 | 1.74 | 5.34 |
| Average no of shares outstanding | 28,547,330 | 28,015,287 | 28,497,839 | 28,015,287 | 28,092,179 |
| Average no of shares outstanding after dilution | 28,547,330 | 28,541,436 | 28,497,839 | 28,539,894 | 28,546,284 |
| Total no of shares outstanding (period end) | 28,581,633 | 28,015,287 | 28,581,633 | 28,015,287 | 28,429,359 |
| Total no of shares outstanding after dilution (period end) | 28,688,233 | 29,787,683 | 28,688,233 | 29,787,683 | 28,581,633 |
| TSEK | Jan–Sep 2008 | Jan–Sep 2007 | Jul–Sep 2008 | Jul–Sep 2007 | Jan–Dec 2007 |
|---|---|---|---|---|---|
| Operating activities | |||||
| Profit before tax | 125,460 | 152,203 | 46,935 | 66,182 | 208,956 |
| Adjustments for non-cash items | 12,916 | 30,083 | –10,117 | 10,958 | 33,233 |
| Income taxes paid | –52,127 | –15,976 | –5,605 | –77 | –16,000 |
| Cash flow from operating activities before change in working capital | 86,249 | 166,310 | 31,213 | 77,063 | 226,189 |
| Changes in working capital | 43,931 | –64,658 | 71,384 | –73,696 | –85,785 |
| Cash flow from operating activities | 130,180 | 101,652 | 102,597 | 3,367 | 140,404 |
| Investing activities | |||||
| Net investment of intangible fixed assets | –9,286 | –447 | –1,700 | –447 | – |
| Net investment of subsidiaries | – | –701,992 | – | –701,992 | –722,692 |
| Net investment of tangible fixed assets | –8,498 | –7,168 | –517 | –2,895 | –12,763 |
| Cash flow from investment activities | –17,784 | –709,607 | –2,217 | –705,334 | –735,455 |
| Financing activities | |||||
| New share issues | 49 | 146 | 49 | 146 | 7,030 |
| Purchase own shares | –11,070 | – | –3,758 | – | – |
| Current investments | 477,485 | – | – | – | –477,485 |
| External loan | 400,000 | 506,900 | – | 506,900 | 994,122 |
| Amortisation loan | –1,039,938 | – | –67,429 | – | – |
| Dividend | –78,599 | –140,076 | – | – | –140,076 |
| Cash flow from financing activities | –252,073 | 366,970 | –71,138 | 507,046 | 383,591 |
| CASH FLOW FOR THE PERIOD | –139,677 | –240,985 | 29,242 | –194,921 | –211,460 |
| Cash and cash equivalents on opening date | 224,157 | 433,082 | 52,719 | 392,326 | 433,082 |
| Translation difference in cash and cash equivalents | –1,875 | –1,286 | 644 | –6,594 | 2,535 |
| Cash and cash equivalents on closing date | 82,605 | 190,811 | 82,605 | 190,811 | 224,157 |
| Adjustment for non-cash items | |||||
| Depreciation | 25,349 | 10,466 | 8,577 | 6,494 | 19,255 |
| Expenses attributable to share related programs | –12,433 | 19,617 | –18,694 | 4,464 | 13,978 |
| Total non-cash items | 12,916 | 30,083 | –10,117 | 10,958 | 33,233 |
| TSEK | 30 Sep 2008 | 30 Sep 2007 | 31 Dec 2007 |
|---|---|---|---|
| ASSETS 1 | |||
| Fixed assets | |||
| Intangible fixed assets | 691,894 | 752,131 | 730,667 |
| Tangible fixed assets | 20,437 | 22,033 | 24,918 |
| Other long-term receivables | 967 | 803 | 803 |
| Deferred tax assets | 55,679 | 59,220 | 49,455 |
| Total fixed assets | 768,977 | 834,187 | 805,843 |
| Current assets | |||
| Accounts receivable | 671,8362 | 628,441 | 685,749 |
| Prepaid expenses and accrued income | 26,492 | 19,282 | 15,357 |
| Tax assets | 3,095 | – | – |
| Current Investments | – | – | 477,485 |
| Other current receivables | 24,984 | 46,667 | 28,406 |
| Cash and cash equivalents | 82,605 | 190,811 | 224,157 |
| Total current assets | 809,012 | 885,201 | 1,431,154 |
| TOTAL ASSETS | 1,577,989 | 1,719,388 | 2,236,997 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | 319,312 | 312,293 | 361,308 |
| Long-term liabilities | |||
| Deferred tax liability | 19,995 | 37,626 | 33,227 |
| Other provisions | 44 | 2,409 | 1,121 |
| Total long-term liabilities | 20,039 | 40,035 | 34,348 |
| Current liabilities | |||
| Accounts payable | 364,8883 | 244,166 | 257,913 |
| Publisher payable | 343,279 | 313,456 | 311,660 |
| Tax liability | 34,818 | 58,625 | 48,100 |
| Other current liabilities | 119,961 | 175,363 | 209,703 |
| Debt to financial institute | 75,000 | 506 900 | 964,707 |
| Bank overdraft facility | 249,769 | – | – |
| Accrued expenses and deferred income | 50,923 | 59,650 | 49,258 |
| provisions | – | 8,900 | – |
| Total current liabilities | 1,238,638 | 1,367,060 | 1,841,341 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 1,577,989 | 1,719,388 | 2,236,997 |
1Pledged assets in term of stocks in subsidiaries amounts to 162.2 MSEK. (197.7) 2 Accounts receivable for search was 327.5 MSEK (209.3)
3 Accounts payable to search engines 206.7 MSEK (149.3)
| TSEK | Jan–Sep 2008 | Jan–Sep 2007 | Jul–Sep 2008 | Jul–Sep 2007 | Jan–Dec 2007 |
|---|---|---|---|---|---|
| Shareholders' equity on opening date | 361,308 | 348,965 | 300,165 | 283,563 | 348,965 |
| Exchange rate effect adjusted to Equity | –30,668 | –23,814 | 6,805 | –26,920 | –33,567 |
| Profit for the period | 90,725 | 108,264 | 34,745 | 46,649 | 152,347 |
| Share buy back | –11,070 | – | –3,758 | – | – |
| New share issue | 49 | 146 | 49 | 146 | 7,030 |
| Dividend | –78,599 | –140,076 | – | – | –140,076 |
| IFRS cost share related programs | –12,433 | 18,808 | –18,694 | 5,855 | 13,978 |
| Tax effect on share option exercise | – | – | – | – | 12,631 |
| Total shareholders' equity on closing date | 319,312 | 312,293 | 319,312 | 312,293 | 361,308 |
| TSEK | Jul–Sep 2008 | Apr–Jun 2008 | Jan–Mar 2008 | Oct–Dec 2007 | Jul–Sep 2007 |
|---|---|---|---|---|---|
| Revenue | 788,527 | 866,910 | 987,020 | 872,420 | 757,454 |
| Quarter-on-quarter growth (%) | –9,0 | –12.0 | 13.1 | 15.2 | 47.8 |
| Cost of services sold (publisher compensation) | –607,722 | –686,524 | –796,159 | –685,303 | –591,203 |
| Gross profit | 180,805 | 180,386 | 190,861 | 187,117 | 166,251 |
| Quarter-on-quarter growth (%) | 0.2 | –5.5 | 2.0 | 12.6 | 16.2 |
| Selling expenses | –98,309 | –98,108 | –96,454 | –78,481 | –89,726 |
| Administrative expenses | –21,626 | –26,494 | –30,866 | –34,602 | –21,593 |
| Development expenses | –12,885 | –15,085 | –11,041 | –9,031 | –6,136 |
| Operating profit | 47,985 | 40,699 | 52,500 | 65,003 | 48,796 |
| Net financial items | –1,051 | –11,765 | –2,909 | –8,250 | 17,386 |
| Profit before tax | 46,934 | 28,934 | 49,592 | 56,753 | 66,182 |
| Income tax expense | –12,189 | –11,759 | –10,786 | –12,670 | –16,533 |
| Net profit | 34,745 | 17,175 | 38,805 | 44,083 | 49,649 |
| TSEK | Jul–Sep 2008 | Apr–Jun 2008 | Jan–Mar 2008 | Oct–Dec 2007 | Jul–Sept 2007 |
|---|---|---|---|---|---|
| Operating margin (%) | 6,1 | 4.7 | 5.3 | 7.5 | 6.4 |
| EBITDA | 56,563 | 48,926 | 61,046 | 73,792 | 55,290 |
| EBITDA margin (%) | 7,2 | 5.6 | 6.2 | 8.5 | 7.3 |
| Equity ratio (%) | 20,2 | 18.2 | 21.4 | 16.2 | 18.2 |
| Return on equity (%) | 44,1 | 47.4 | 44.3 | 46.1 | 52.4 |
| Return on Invested capital | 6,2 | 4.4 | 7.7 | 4.8 | 20 |
| Return on capital employed | 14,1 | 12.5 | 14.2 | 16.4 | 13.8 |
| Number of employees on closing date | 638 | 644 | 594 | 550 | 548 |
| Average number of employees | 642 | 631 | 587 | 557 | 538 |
| Transaction Margin (%) | 23,0 | 22.9 | 22.3 | 23.9 | 22.9 |
| Search Margin (%) | 9,8 | 6.3 | 6.5 | 6.8 | 7.5 |
| Diluted earnings per share (SEK) | 1,22 | 0.60 | 1.36 | 1.54 | 1.74 |
| IFRS | 2007 | 2006 | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|
| Revenue (TSEK) | 2,663,642 | 1,744,080 | 1,085,047 | 597,744 | 259,607 |
| Operating margin (%) | 7.3 | 10.9 | 4.0 | 9.3 | 4.1 |
| EBITDA (TSEK) | 214,088 | 196,474 | 48,118 | 58,167 | 13,310 |
| EBITDA margin (%) | 8.0 | 11.3 | 4.4 | 9.7 | 5.1 |
| Equity/assets ratio (%) | 16.2 | 38 | 35 | 31 | 22 |
| Return on capital employed (%) | 27 | 74 | 34 | 94 | 47 |
| Return on shareholders' equity (%) | 43 | 52 | 28 | 103 | 31 |
| Risk-bearing capital (%) | 17.6 | 38.5 | 35 | 31 | 22 |
| Number of employees at end of period | 550 | 351 | 256 | 160 | 92 |
| Average number of employees | 461 | 308 | 222 | 130 | 80 |
Operating margin – Operating profit as a percentage of revenue.
EBITDA – EBITDA is earnings before tax, net financial items and depreciation/amortisation and impairment.
EBITDA-margin – EBITDA as a percentage of revenue.
Return on capital employed – Operating profit plus interest income as a percentage of average capital employed, calculated as opening and closing capital employed divided by two.
Return on equity – equity Return on equity is calculated for the Group as profit for the year as a percentage of average equity.
Return on invested capital – Net operating profit less adjusted taxes divided by invested capital.
Equity/assets ratio – Shareholders' equity as a percentage of the balance sheet total.
Percentage of risk-bearing capital – Total of shareholders' equity, minority interests, shareholder loans and deferred tax liabilities divided by total assets.
11
| TSEK | Jan–Sep 2008 | Jan–Sep 2007 | Jul–Sep 2008 | Jul–Sep 2007 | Jan–Dec 2007 |
|---|---|---|---|---|---|
| Revenue | 245,819 | 218,762 | 82,952 | 66,043 | 276,368 |
| Cost of services sold | –7,114 | –8,429 | –2,595 | 1,029 | –10,687 |
| Gross profit | 238,705 | 210,333 | 80,357 | 67,072 | 265,681 |
| Selling expenses | –10,696 | –24,846 | –1,182 | –8,160 | –30,638 |
| Administrative expenses | –61,772 | –57,844 | –17,550 | –10,179 | –95,899 |
| Development expenses | –32,405 | –19,134 | –12,996 | –6,127 | –28,152 |
| Operating profit | 133,832 | 108,509 | 48,627 | 42,606 | 110,992 |
| Net financial items | –21,618 | –16,081 | 12,169 | –16,409 | –7,615 |
| Profit before tax | 112,214 | 92,428 | 60,797 | 26,197 | 103,377 |
| Income tax expense | –31,501 | –25,832 | –16,979 | –10,049 | –29,162 |
| Net profit | 80,713 | 66,596 | 43,818 | 16,148 | 74,215 |
| TSEK | 30 Sep 2008 | 30 Sep 2007 | 31 Dec 2007 |
|---|---|---|---|
| ASSETS 4 | |||
| Fixed assets | |||
| Property, plant and equipment | 6,362 | 6,235 | 7,586 |
| Investment in Group companies | 49,138 | 46,911 | 58,246 |
| Other longterm assets | 552 | 552 | 552 |
| Total fixed assets | 56,052 | 53,698 | 66,384 |
| Current assets | |||
| Accounts receivable | 2,453 | 5,579 | 2,539 |
| Receivables from Group companies | 643,7235 | 876,032 | 842,954 |
| Other current receivables | 926 | 1,579 | 6,373 |
| Prepaid expenses and accrued income | 521 | 4,920 | 1,186 |
| Tax assets | 1,743 | – | – |
| Total current assets | 649,366 | 888,110 | 853,052 |
| Investments | – | – | 477,485 |
| Total investments | – | – | 477,485 |
| Cash and cash equivalents | 6,965 | – | 102,517 |
| Total current assets | 656,331 | – | 1,433,054 |
| TOTAL ASSETS | 712,383 | 941,808 | 1,499,438 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | 185,043 | 182,658 | 206,473 |
| Current liabilities | |||
| Accounts payable | 7,705 | 9,063 | 8,660 |
| Liabilities to Group companies | 75,347 | 138,594 | 196,151 |
| Current tax | 40,652 | 49,735 | 53,130 |
| Debts to Financial institute | 75,000 | – | 964,707 |
| Bank overdraft facility | 249,769 | – | |
| Other current liabilities | 74,706 | 548,634 | 57,968 |
| Accrued expenses and deferred income | 4,161 | 13,124 | 12,349 |
| Total Current Liabilities | 527,340 | 759,150 | 1,292,965 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 712.383 | 941,808 | 1,499,438 |
4 Intangable assets have been transferred to a wholly owned subsidiary of the parent company..
5 Part of the receivables is an internal loan between the parent company and the subsidiary in the UK relating to the acquisition of the IMW group
| TSEK | 30 Sep 2008 | 30 Sep 2007 | 31 Dec 2007 |
|---|---|---|---|
| Assets pledged | 4,095 | 11,095 | 488,580 |
| Rent deposits | 552 | 552 | 552 |
| Contingent liabilities | – | 3,969 | – |
Through a strong brand, unique network, a proprietary and scalable technology platform and a market-leading expertise, TradeDoubler develops products and services within performance-based digital marketing that provides the company's clients with the tools and expertise to drive results online whether they are looking to generate sales or drive brand awareness. TradeDoubler is the market-leader within the industry and covers today 19 markets in Europe and Japan. The head-quarter is based in Stockholm, Sweden. TradeDoubler's network consists of over 128,000 publishers and every month the network has 272 million unique visitors, 23 billion impressions that together generate 9.6 million leads. TradeDoubler has 1,730 advertising clients, such as Apple Store, Dell, TeliaSonera, eBay and Kelkoo. TradeDoubler is listed on Nasdaq OMX Stockholm Exchange.
result pages. Search engine marketing allows advertisers to be found in search listings on specific
keywords.
which an advertiser rewards one or more affiliates for each visitor or customer brought about by the affiliate's marketing efforts.
differences are that campaigns make use of either a select group of publishers for high quality conversions or the broad reach of the affiliated publishers for larger volumes.
and creative aspects of their campaigns. TradeDoubler's integrated marketing interface, td Toolbox, provides ad serving, tracking and analysis and gives a seamless overview of all internet marketing
activities.
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