YOC AG — Interim / Quarterly Report 2015

Aug 21, 2015

MOBILE ADVERTISING INTERIM REPORT FIRST HALF 2015 YOC AG

MOBILE ADVERTISING

MOBILE ADVERTISING

MOBILE ADVERTISING

CONTENT

	PAGE
Letter to the Shareholders	02
YOC at a Glance	04
Interim Consolidated Management Report	05
Interim Consolidated Financial Statements	11
YOC Contact	23
Financial Calendar	24
Imprint	25

Letter to the Shareholders

Dear Shareholders,

YOC AG has been among the pioneers for advertising on mobile devices, going "mobile first" since 2000. There has been a distinct trend towards higher mobile advertising budgets. We - and our industry - have always been driven by the vision to target users on their "electronic companion" anytime and anywhere, using customised and profile-based solutions.

The total revenue of EUR 4.4 million in the first half of financial year 2015 corresponds to that of the previous year. The cause for the unsatisfying development of turnover in the first six months is the deficient British and Spanish contribution to sales revenues.

As a consequence, we have hired a new managing director for the British market, reorganised the London team, and filled key positions with new staff accordingly. The Spanish subsidiary has grown by 114 % as compared to the previous year, though it is still falling behind the original growth forecast. In the course of the year, we will realise an improved development in both markets.

In the D-A-CH region, the sales revenue in the first six months shows a 14 % growth as compared to the same period of the previous year.

The further improvement of the gross profit by 5 % to 32 % in the first half-year is another crucial component for the sustainable development of the company (H1/2014: 27 %). To this end, the optimised ad delivery as well as the integrated monetisation of web inventory, which we can increasingly offer our media partners, is essential.

We further introduced innovative web formats. The new, user centred generation of mobile ad formats such as YOC Understitial Video Ad, Understitial Classic Ad, Interactive Video Ad, or Inline Video Ad, offers the advertisers an intrinsic and at the same time interactive access to the designated target group. First customers of these products were McDonald's, O2, or Telekom Austria, among others.

Simultaneously, YOC pushes forward with the development of the international YOC Performance portfolio. YOC Performance aims at the acquisition of active users for our advertisers on a data-driven basis (from downloads of native apps to mobile transactions).

Through the improvement of gross profit and through cost reductions, operating earnings before depreciation/amortisation came to EUR -1.0 million as of 30 June 2015 (H1/2014: EUR -1.1 million). EBITDA adjusted for positive special effects from reorganisation and restructuring measures increased by EUR 0.8 million from EUR -1.8 million (H1/2014) to EUR -1.0 million as of 30 June 2015.

The measures and developments implemented in the past months assure us of a positive revenue development for the second half of 2015. We are convinced that, through the path taken, we will be able to position YOC as a leading, innovative provider of premium mobile programmatic advertising, and to further improve our operating performance.

We thank you for the trust you have placed in us and are looking forward to continuing our cooperation in the future.

Kind regards,

Dirk Kraus Michael Kruse

Management Board YOC AG

YOC at a Glance

Mobile Advertising (in kEUR)	H1/2015	H1/2014	Change	Change in %
Revenue and earnings
Total revenue	4,382	4,448	-66	-1
D-A-CH	2,718	2,385	333	14
Other countries	1,663	2,064	-401	-19
Total output	5,018	6,202	-1,184	-19
EBITDA	-993	-1,146	153	13
EBITDA margin (in%)	-23	-26	k.A.	k.A.
Earnings after tax	-1,170	-1,473	303	21
Earnings per share (diluted in EUR)	-0.38	-0.52	0.14	27
Earnings per share (basic in EUR)	-0.38	-0.52	0.14	27
Employees
Average number of employees *1	55	67	-12	-18
Number of employees at end of March	53	64	-11	-17
Total revenue per emplyoee (in kEUR)	80	66	13	20
Total output per employee (in kEUR)	91	93	-1	-1
Financial position and liquidity
Total assets	4,024	4.135 *2	-111	-3
Cash flow from operative activities	-1,505	-1,579	74	5

*1 Based on permanent employees

*2 at 31/12/2014

Where rounded figures are used, differences may occur due to commercial rounding

Interim Consolidated Management Report

(unaudited)

Business development of YOC Group in the first half of 2015

Key figures

In the first half of 2015, YOC Group's total revenue remained nearly stable year-on-year at EUR 4.4 million (H1/2014: EUR 4.4 million).

Pushing forward with product innovations that promise higher gross margins led to an increased gross yield at 32 % in H1 2015 (H1/2014: 27 %).

YOC Group's operating earnings before interest, tax, depreciation and amortisation in the first six months of financial year 2015 were at EUR -1.0 million (H1/2014: EUR -1.1 million). After adjusting previous year's figures for one-off effects in connection with the company's reorganisation and restructuring, EBITDA improved by EUR 0.8 million.

The operating cash flow was at EUR -1.5 million (H1/2014: EUR –1.6 million).

Mobile Advertising – scope of service

With a smartphone penetration of over 57 % on average (comScore 2013), mobile advertising has become a defining medium for digital advertising in Europe. Some countries such as Great Britain, Spain or Italy have already reached smartphone coverage of 70 %, according to recent studies (comScore 2014).

YOC is one of the largest independent premium mobile advertising providers in Europe, and can draw upon its longstanding expertise in this business sector since 2001. With an available coverage of several billion ad impressions per month, we reach around 40 million mobile web users. YOC cooperates with more than 300 well-selected international premium publishers such as Shazam, The Sun, Metro, krone.at or Eurosport, who trust in the technology and marketing expertise of the company, on the basis of longstanding partnerships.

Based on many years of experience, exclusive business partnerships with marketing partners and advertising clients, successful product innovations and scalable in-house technologies, YOC has become an innovative part of the mobile targeting market segment, which is becoming more and more important. Our focus lies on the strategic development of our position as a specialist for mobile advertising in the core markets in Great Britain, Germany, Austria, Spain and France.

For app and mobile web publishers from all branches, YOC offers direct access to all relevant media agencies and demand channels. In combination with state-of-the-art advertising technologies, we successfully apply comprehensive monetising strategies, while at the same time ensuring sustainable growth of the user population for our publishers. YOC's premium ad formats allow for targeted branding without overstraining the user in his familiar environment. YOC Mediation allows for a high but steady utilisation and attractive cost per mille above market average. With its concept of audience targeting, YOC guarantees that users are only shown the most relevant advertisement, while ensuring data protection standards.

Our advertisers benefit from exclusive advertising opportunities with premium publishers. The award-winning ad formats especially developed by YOC in-house offer a strong creative branding effect, and have been awarded, among others, the Cannes Lion Gold Award in the Mobile category. YOC Audience Targeting, with a multitude of exclusive data sources, guarantees that each advertiser reaches his specific target group. Our full-service approach makes us a reliable partner, offering solid and high-quality campaigns. By means of a trading desk approach, YOC reaches a significant range of mobile users via efficient demand-side platforms (DSP).

The widespread distribution and use of mobile apps and the app ecosystem thus evolved are exploited by YOC through performance products in order to gain new revenue potential, or more precisely: to attract new users or registrations for YOC's clients. The increasingly important programmatic media trade is actively attended by YOC and utilised to reach the campaign goals of its clients and to open up additional sources of revenue for publishers.

In cooperation with trading desk partners, YOC establishes private marketplaces (PMP). A private marketplace is a platform on which premium publishers offer their advertising inventory only to a selected group of advertisers. As opposed to the direct booking of an advertising space, advertisers in a PMP subscribe by means of programmatic media buying. Through private marketplaces linked to YOC, publishers and advertisers benefit from a selected trade channel with fixed prices and defined inventory. The advertising spaces are traded by means of real-time bidding. In addition, direct deals between publishers and advertisers can be made via private marketplaces. Because of the automated ad delivery and predefined conditions, this practice offers the efficient execution of campaign bookings with full transparency on the inventory included.

Development of net assets, financial position and results of operation

Results of operation

Revenue trend and overall performance

In the first six months of financial year 2015, YOC Group's revenue was at EUR 4.4 million (H1/2014: EUR 4.4 million).

The Group's total output stood at EUR 5.0 million. Due to the positive effects in the amount of EUR 0.9 million gained through restructuring activities in the same period of the previous year, the total output was at EUR 6.2 million in 2014.

Revenue by region

In the D-A-CH region, revenue increased by 14 % year-on-year. Especially in the Austrian market, we have recorded a significant increase in revenue by 35 % year-on-year. The important domestic market in Germany sees a 5 % increase. In the other European countries, revenue decreased by 19 % as compared to H1 2014, mainly due to the deficient performance of the British subsidiary. In the Spanish market, we see a growth in revenue year-on-year.

Gross income

The gross margin rose to 32 % in H1 2015 (H1/2014: 27 %) due to effects from the shift to new product fields, among other reasons. Material costs dropped by 9 % to EUR 3.0 million (H1/2014: EUR 3.3 million).

Personnel expenses and personnel development

In the first six months of financial year 2015, the average number of staff stands at 55 employees (H1/2014: 67 employees).

Personnel expenses were below previous year's level at EUR 2.0 million (H1/2014: EUR 2.2 million). Through improved efficiency and the company's reorganisation, the average number of employees could be reduced by 12 in total – 4 of those in other locations than Germany. Consequently, revenue per employee increased year-on-year by 20 % to kEUR 80 (H1/2014: kEUR 66).

Other operating expenses

Other operating expenses were at EUR 1.0 million, EUR 0.9 million below the previous year's expenses (H1/2014: EUR 1.9 million). Adjustments to the cost structure, made in the course of the restructuring process completed by the end of 2014, led to a significant reduction of ongoing operating costs as well as costs for several external consulting services in connection with the restructuring process.

In sum, all cost-cutting measures have taken effect, leading to the significant drop of other operating expenses in relation to the total output to 20 % (H1/2014: 31 %).

EBITDA

Operating earnings before interest, tax and depreciation/amortisation amounted to EUR -1.0 million in the reporting period (H1/2014: EUR -1.1 million).

Adjusted for special effects from reorganisation and restructuring measures recognised in other operating income and expenses in the first half of 2014 amounting to EUR 0.7 million, EBITDA improved from EUR -1.8 million in the first half of 2014 to EUR -1.0 million in H1 2015.

Post-tax profit or loss

Earnings after tax have slightly improved in the reporting period to EUR -1.2 million (H1/2014: EUR -1.5 million). Besides clearly improved operating results, the measures taken in the restructuring process are clearly taking effect.

Financial position and net assets

As of 30 June 2015, YOC Group's cash and cash equivalents came to EUR 0.7 million. This means a decline in liquidity by EUR 0.5 million as compared to 31 December 2014.

The operating cash flow in the first six months of 2015 amounted to EUR –1.5 million (previous year: EUR -1.6 million).

Cash flow from investing activities came to EUR -0.1 million in the first six months of the financial year (previous year: EUR 0.1 million).

Altogether, investments in the amount of EUR 0.2 million were made into internal development to further advance technological platforms and new products.

The sale of operating and business equipment to the Affiliate Marketing business segment, sold in 2014, brought income of EUR 0.1 million.

In connection with the capital increase from authorised capital against cash contributions realised in April 2015, 253,973 new shares were issued under the exclusion of subscription rights for existing shareholders. With an issue price of EUR 3.15 per share, the company gained gross issue proceeds of EUR 0.8 million.

On top of this, the Group concomitantly took out a loan of EUR 0.3 million at usual market conditions, with the designated maturity ending mid 2017.

Opportunities, risk and outlook

Risks and opportunities

Being a service provider with an international focus, YOC Group is active in a dynamic market which naturally brings about certain corporate and branch-specific as well as financial risks. Main risks include market and competition risks, technological risks, liability risks, personnel risks, planning risks, organisational as well as financial and treasury risks. These risks are influenced by our own business activities as well as external factors. YOC Group has taken measures to identify such possible risks in time and to reduce them. To this end, an adequate risk management system has been developed which records and evaluates risks by means of a group-wide risk inventory at regular intervals and, if necessary, constantly monitors them.

YOC Group's risk policies which have been set by the Management Board remain unchanged and are a vital part of the corporate policy, in line with the pursuit of sustainable growth, growth in company value and securing the company's existence in the long-term. For this purpose, necessary risks are consciously taken, while taking into account the risk-returnratio, in order to make use of market opportunities and to exhaust the success potential inherent in them.

By means of anticipatory risk control as part of the internal control system, risks and opportunities can be identified and evaluated at an early stage so that a timely and appropriate response is possible, thereby guaranteeing efficient control in the interest of the company's success. The measures that are to be taken in line with risk control are being implemented in the respective operating units.

Outlook

The company's focus on its core business shows positive effects. Following the restructuring and strategic reorientation of the company, YOC Group expects an improved revenue and earnings situation in 2015 year-on-year – despite a difficult first half of 2015. The Management Board still calculates with negative operating cash flows for financial year 2015. It has implemented further measures to further strengthen liquidity:

• In the second quarter, a credit line of EUR 0.1 million was agreed upon. As of the reporting date, it has not been made use of.
• During the third quarter, the Group generated cash inflow in the amount of EUR 0.75 million through an out-of-court settlement.

Further measures for strengthening liquidity are currently at the planning stage or already being carried out.

Altogether, the company expects increased sales revenues in the high single-digit percentage range for financial year 2015. Following the satisfying growth of the first quarter, revenues stagnated, in particular due to the development in Great Britain. In terms of costs, great savings could be realised. For the second half of the year, we expect the following developments:

The company has reacted to the insufficient development in Great Britain, and hired a new managing director for the British subsidiary, while the team in London has been reorganised and supplemented accordingly. For the second half of 2015, we expect a stable revenue trend on the one hand, on the other this phase is meant to improve the market position and reorganisation, in order to pave the way for a stronger development in financial year 2016.

Following the building of a new team in financial year 2014, the Spanish subsidiary has fallen behind the original growth forecast for about two to three quarters. Thus, while a further rise in revenues is to be expected for the remaining half of 2015, it will fall short of the planned revenue development for 2015.

Due to the logical strategic focus on the core competence of Mobile Advertising and a market positioning in line with the requirements of the industry, consistent growth is to be expected also in the medium term. The positive economic conditions worldwide support this prognosis.

The restructuring of the company to a premium mobile programmatic provider elevates the company to a novel product level and will, with the expected development, lead to a stronger market position, and in the future account for a substantial part of total revenues due to the planned extension of these services. With the expansion of this product field, an increased gross margin is to be expected, while at the same time the company gains more independence from larger co-operations.

A prerequisite for this is the development of the international branches according to plan. Investments in innovative technologies and products are part of the company's strategy and are necessary to strengthen and expand the development commenced. On the grounds of the development outlined above, YOC Group reckons with a slight improvement of the operating results adjusted for special effects.

Interim Consolidated Financial Statements (unaudited)

Consolidated Statement of Comprehensive Income

Consolidated Income Statement (in EUR)	Q2/2015	Q2/2014
Revenue	2,327,525	2,622,746
Own work capitalised	62,633	63,762
Other operating income	135,964	231,830
Total output	2,526,122	2,918,338
Expenses for goods and services	1,548,902	1,770,102
Personnel expenses	1,002,886	997,886
Other operating expenses	550,590	820,896
EBITDA	-576,256	-670,546
Depreciation and amortisation expenses	55,212	76,134
EBIT	-631,468	-746,680
Financial income	443	0
Financial expenses	3,194	36,851
Financial result	-2,751	-36,851
EBT	-634,219	-783,531
Income taxes	46,474	92,134
Net income continuing operations	-680,693	-875,665
Net income disontinued operations	0	605,396
Net income	-680,693	-270,269
Earnings per share
Earnings per share basic	-0.22	-0.09
Earnings per share diluted	-0.22	-0.09
Earnings per share continuing operations
Earnings per share basic	-0.22	-0.31
Earnings per share diluted	-0.22	-0.31

Consolidated statement of comprehensive income (in EUR)	Q2/2015	Q2/2014
Net income	-680,693	-270,269
Net other comprehensive income to be reclassified through
profit or loss in subsequent periods
Unrealised gains/losses from foreign currency translation	-70,997	-86,414
Total other comprehensive income	-70,997	-86,414
Total comprehensive income	-751,690	-356,683

› The figures are not subject to an auditor´s review.

Consolidated Statement of Comprehensive Income

Consolidated Income Statement (in EUR)	H1/2015	H1/2014
Revenue	4,381,683	4,448,287
Own work capitalised	137,775	147,379
Other operating income	498,245	1,606,622
Total output	5,017,703	6,202,288
Expenses for goods and services	2,961,694	3,258,609
Personnel expenses	2,038,557	2,196,675
Other operating expenses	1,010,049	1,893,307
EBITDA	-992,597	-1,146,303
Depreciation and amortisation expenses	114,034	159,002
EBIT	-1,106,631	-1,305,305
Financial income	542	811
Financial expenses	3,194	69,754
Financial result	-2,652	-68,943
EBT	-1,109,283	-1,374,248
Income taxes	60,739	98,520
Net income continuing operations	-1,170,022	-1,472,768
Net income disontinued operations	0	807,919
Net income	-1,170,022	-664,849
Earnings per share
Earnings per share basic	-0.38	-0.23
Earnings per share diluted	-0.38	-0.23
Earnings per share continuing operations
Earnings per share basic	-0.38	-0.52
Earnings per share diluted	-0.38	-0.52

Consolidated statement of comprehensive income (in EUR)	H1/2015	H1/2014
Net income	-1,170,022	-664,849
Net other comprehensive income to be reclassified through
profit or loss in subsequent periods
Unrealised gains/losses from foreign currency translation	-188,892	-170,970
Total other comprehensive income	-188,892	-170,970
Total comprehensive income	-1,358,914	-835,819

› The figures are not subject to an auditor´s review.

Consolidated Statement of Financial Position

in EUR	30/06/2015	31/12/2014
ASSETS
Non-current assets	692,834	650,071
Property, plant and equipment	84,611	144,765
Intangible assets	604,244	501,854
Deferred tax assets	3,979	3,452
Current assets	3,331,359	3,484,598
Trade receivables	1,990,475	1,610,764
Other receivables	649,308	641,381
Tax assets	27,757	28,729
Cash and cash equivalents	663,819	1,203,724
Total assets	4,024,193	4,134,669
EQUITY AND LIABILITIES
Equity	-2,238,691	-1,650,250
Subscribed capital	3,112,473	2,858,500
Additional paid in capital	20,397,672	19,902,539
Retained earnings	-25,368,870	-24,220,215
Other comprehensive income from currency translation differences	-329,647	-140,755
Own shares	-50,319	-50,319
Non-current liabilities	378,528	64,828
Provisions	78,528	64,828
Other financial liabilities	300,000	0
Current liabilities	5,884,356	5,720,091
Prepayments received	15,710	9,300
Trade payables	2,862,695	2,520,603
Other liabilities	729,043	771,153
Other financial liabilities	1,376,030	2,395,870
Tax liabilities	71,272	23,165
Provisions	829,605	0
Total equity and liabilities	4,024,193	4,134,669

› The figures are not subject to an auditor´s review.

Consolidated Statement of Cash Flows

in EUR	H1/2015	H1/2014
Net income continuing operations	-1,170,022	-1,472,768
Net income discontinued operations	0	807,919
Depreciation and Amortisation	114,034	203,358
Taxes recognised in the income statement	60,739	90,953
Interest recognised in the income statement	2,652	68,434
Other non-cash income and expenses	14,380	1,105,332
Cash-Earnings	-978,217	803,228
Result from disposal of assets	-51,430	-6,497
Changes in receivables and other receivables	-386,666	268,350
Changes in liabilities, prepayments and other liabilities	-930,696	-2,837,025
Changes in provisions	843,305	197,411
Interest received	-542	1,320
Interest paid	0	-5,305
Income taxes paid	-406	0
Cash flow from operating activities	-1,504,652	-1,578,518
Purchase of property, plant and equipment	-11,012	-24,684
Outflow from development costs	-175,073	-159,916
Disposal of assets	78,630	318,337
Cash flow from investing activities	-107,456	133,737
Inflows from capital increases	800,015	0
Transaction costs related to issuance of new shares	-27,814	0
Repayment of liabilities under finance lease	0	-6,744
Repayment of bank loans	0	-250,000
Issuance of loans	300,000	1,474,704
Cash flow from financing activities	1,072,201	1,217,960
Net increase / decrease	-539,907	-226,821
Cash and cash equivalents at the beginning of the period	1,203,724	531,087
Cash and cash equivalents at the end of the period	663,817	304,266

› The figures are not subject to an auditor´s review.

Consolidated Statement of Changes in Equity

				Other comprehensive
	Subscribed	Additional	Retained	income from currency
in EUR	capital	paid in capital	earnings	translation differences	Own shares	Total
as of 01/01/2014	2,858,500	20,226,168	-27,781,828	69,085	-50,319	-4,678,394
Net income			-664,849			-394,580
Currency translation differences				-170,970		-84,556
Comprehensive income	0	0	-664,849	-170,970	0	-835,819
Stock option programme		25,664				25,664
as of 30/06/2014	2,858,500	20,251,832	-28,446,677	-101,885	-50,319	-5,488,549
as of 01/01/2015	2,858,500	19,902,539	-24,220,215	-140,755	-50,319	-1,650,250
Net income			-1,170,022			-1,170,022
Currency translation differences				-188,892		-188,892
Comprehensive income	0	0	-1,170,022	-188,892	0	-1,358,914
Issuance of subscribed capital	253,973	546,042				800,015
Stock option programme		-23,095	21,366			-1,729
Transaction costs including tax benefits		-27,814				-27,814
as of 30/06/2015	2,858,500	20,397,672	-25,368,870	-329,647	-50,319	-2,238,691

No shares are held by non-controlling shareholders

› The figures are not subject to an auditor´s review.

Notes to the financial statements

1. General information

YOC AG, headquartered at Greifswalder Str. 212, Berlin, Germany, is an international service provider of Mobile Advertising.

YOC AG is listed in the Prime Standard of the Frankfurt Stock Exchange under the identification number WKN 593273 / ISIN DE 0005932735.

2. Principles for the preparation of the financial statements, accounting and valuation methods

Principles for the preparation of the financial statements

YOC AG's interim report as of 31 March 2015 was prepared in compliance with the German Securities Trading Act (WpHG). The interim consolidated financial statements were prepared as condensed financial statements pursuant to IAS 34 and comply with Section 315a of the German Commercial Code (HGB) and are in accordance with the rules of the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) as adopted by the European Union and valid on the reporting date as well as the interpretations of the IFRS Interpretations Committee (IFRS IC) approved by the IASB.

The condensed and unaudited interim consolidated financial statements of YOC AG do not contain all the information and disclosures necessary for the preparation of complete financial statements at the end of the financial year. It is therefore to be recommended that one reads the interim report along with the Annual Report 2014.

Accounting and valuation measures

In the first three months of 2015, all standards that have been mandatory since 01 January 2015 have been applied:

• IFRIC 21 – Levies: Guidelines on the accounting for levies imposed by a government, governmental agency or similar body has no impact on the company. This interpretation is to be applied for the first time for financial years beginning on or after 17 June 2014. For YOC AG there is no case in which it would apply.

• Improvements to IFRS (2011-2013) The Improvements are a collective standard dealing with changes in various IFRS. The Improvements are to be applied for the first time for financial years beginning on or after 01 July 2014. They have no effect on YOC AG.

• Amendment to IAS 19 regarding defined benefit plans

The amendment is to be applied for the first time for financial years beginning on or after 01 July 2014. The amendment deals with the contributions from employees or third parties to defined benefit plans with the objective of reducing service cost. It has no effect on YOC AG's financial statements.

In summary, no accounting standards that are to be applied for the first time in financial year 2015 have any effect on the presentation of net assets, financial position or results of operation in the consolidated interim financial statements.

3. Notes to key developments in the Statement of Financial Position and the Statement of Comprehensive Income

Equity capital and shareholder loans

On 22 April 2015, the Management Board and the Supervisory Board of YOC AG decided on a capital increase from authorised capital against cash contributions, issuing 253,973 new shares, excluding subscription rights for existing shareholders. With an issue price of EUR 3.15 per share, the company gained gross issue proceeds in the amount of EUR 0.8 million.

On top of this, the company agreed on concomitantly taking up a loan of EUR 0.3 million at usual market conditions, with a maturity ending mid 2017.

Both measures serve to strengthen equity and to boost the further business development, in particular through the development of new products.

Other disclosures regarding financial instruments

The following table shows the carrying amounts and fair values of the financial assets and liabilities recognised in the interim financial statements as well as their classification according to IAS 39 and their level within the fair value hierarchy:

	Carrying		Measurement category	Fair value
30/06/2015 (in kEUR)	amount	Fair Value	IAS 391)	hierarchy
Financial assets
Cash and cash equivalents	664	664	LaR	n/a
Trade receivables	1,990	1,990	LaR	n/a
Other assets	649	649	LaR	n/a
Financial liabilities
Fixed rate borrowing	300	270	FLAC	Level 2
Trade payables	2,863	2,863	FLAC	n/a
Other financial liabilities	1,376	1,376	FLAC	n/a

			Measurement
	Carrying		category	Fair value
31/12/2014 (in kEUR)	amount	Fair Value	IAS 391)	hierarchy
Financial assets
Cash and cash equivalents	1,204	1,204	LaR	n/a
Trade receivables	1,611	1,611	LaR	n/a
Other assets	641	641	LaR	n/a
Financial liabilities
Trade payables	2,521	2,521	FLAC	n/a
Other financial liabilities	2,396	2,396	FLAC	n/a
thereof finance lease	3	3	FLAC	Level 2
obligations

1) AfS: available for sale financial assets LaR: loans and receivables FLAC: other financial liabilities measured at amortised cost.

The carrying amounts of cash and cash equivalents, trade receivables, other current assets, bank overdrafts, and other current financial liabilities nearly match their fair value, mainly due to their short maturities. In accordance with the principle of materiality, the fair value of these current items is equated with their book value.

Sales revenue

Compared to the same period of the previous year, the Group's sales revenue was slightly below the previous year's revenue at kEUR 4,382 (H1/2014: kEUR 4,448). In the D-A-CH region, revenue increased by 14 % to kEUR 2,718 (H1/2014: kEUR 2,385). In the rest of Europe, revenues decreased by 19 % to kEUR 1,663 (H1/2014: kEUR 2,064).

Other operating income

In the first six months of financial year 2015, other operating income was influenced by the sale of operating and business equipment worth kEUR 49. In the same period of the previous year, restructuring gains amounting to kEUR 900 had been recognised in the financial statements.

Other operating expenses

In the first half of 2015, other operating expenses dropped by kEUR 842, from kEUR 1,893 to kEUR 1,051. The measures taken in the course of the restructuring process are fully effective. The reduction of other operating expenses is based mainly on three elements:

• In particular, reductions in rental costs led to a decline in operating expenses by kEUR 192 to kEUR 188 (-51 %) year-on-year.
• Legal and consulting costs as well as accounting costs and annual audit costs dropped by kEUR 314 to kEUR 172 (-65 %) as compared to the same period of the previous year (kEUR 486).
• In the same period of the previous year, the company faced expenses amounting to kEUR 238 in connection with the restructuring process. These did not occur in the current reporting period.

Operating earnings before income tax, depreciation and amortisation (EBITDA)

Taking into account the abovementioned effects, EBITDA increased by kEUR 154 to kEUR -993 (H1/2014: kEUR -1,146).

Not taking into consideration the positive balance from restructuring income and expenses amounting to kEUR 662 from the same period of the previous year, the company sees a significant increase in operating earnings by kEUR 815 in total year-on-year.

4. Segment reporting

Segment reporting is based on the internal management structure. The Group is therefore made up of the following reportable business segments:

1. D-A-CH region (Germany, Austria and Switzerland)

2. Rest of Europe

For the formation of the abovementioned reportable business segments, the business segments of Germany and Austria (including Switzerland) have been assigned to the D-A-CH segment, while Great Britain, Spain and France have been assigned to the Rest of Europe segment, as they show similar economic characteristics and are comparable in terms of their products, range of services, customers, processes and marketing methods.

The Corporate Functions item consists of income and expenses that occur in the parent company and are not directly attributable to any business segment.

Revenues are calculated based on turnovers achieved by the subsidiaries in the respective countries.

The following table shows the results of the individual segments. In accordance with the internal reporting structure, EBITDA is used as the measure of earnings:

Segment reporting			Corporate
(in kEUR)	D-A-CH	Rest of Europe	functions	Consolidation	YOC Group
H1 2015
External revenue	2,718	1,663			4,382
Internal revenue	283	0		-283	0
Total revenue	3,001	1,663		-283	4,382
Own work capitalised	138	0			138
Other operating income	479	19			498
Total output	3,335	1,683			5,018
Costs of goods sold	1,728	1,234			2,962
Personnel expenses	925	590	524		2,039
Other operating expenses	280	309	421		1,010
EBITDA	403	-451	-945		-993

H1 2014
External revenue	2,385	2,064			4,448
Internal revenue	258	0		-258	0
Total revenue	2,642	2,064		-258	4,448
Own work capitalised	147	0			147
Other operating income	565	215	827		1,607
Total output	3,097	2,278	827		6,202
Costs of goods sold	1,742	1,516			3,259
Personnel expenses	1,054	726	418		2,197
Other operating expenses	408	608	878		1,893
EBITDA	-106	-572	-469		-1,146

Operating results of the individual segments have significantly improved due to higher gross margins along with systematically implemented cost reductions in the D-A-CH region as well as the rest of Europe.

The gross margin in the D-A-CH region increased significantly to 36 % (previous year: 27 %), and has contributed to the EBITDA increase by kEUR 509. In the rest of Europe, in particular minimised costs have a positive effect on results, so that YOC was able to achieve an EBITDA increase by kEUR 121.

In sum, the EBITDA is kEUR 154 above the previous year's level. In addition to this, in the same period of the previous year, other operating earnings included one-time items worth kEUR 827 in the area of corporate functions, leading to a total increase by kEUR 981.

As of 30 June 2015, trade and other receivables amounted to kEUR 1,017 in the D-A-CH region (H1/2014: kEUR 862), and kEUR 973 in the rest of Europe (H1/2014: kEUR 1,605).

EBITDA is reconciled to net income as follows:

Reconciliation (in kEUR)	H1/2015	H1/2014
EBITDA	-993	-1,146
Depreciation and amortisation	-114	-159
Financial result	-3	-69
Net income before taxes	-1,110	-1,374
Taxes	-61	-99
Net income from discontinued operations	0	808
Net income	-1,170	-665

5. Cash flow statement

As of 30 June 2015, YOC Group's cash and cash equivalents came to EUR 0.7 million, meaning a decrease in liquidity by EUR 0.8 million compared to 31 December 2014.

Cash flow from operating activities came to EUR -1.5 million in the first half of 2015 (previous year: EUR -1.6 million).

Cash flow from investing activities in the first six months of the current financial year is at EUR -0.1 million (previous year: EUR 0.1 million).

Altogether, investments amounting to EUR 0.2 million were made into internal development related to the further development of technological platforms and new products.

The sale of operating and business equipment to the Affiliate Marketing business segment sold in 2014 brought an income of EUR 0.1 million.

For the capital increase from authorised capital against cash contributions, implemented in April 2015, 253,973 new shares were issued, excluding subscription rights for existing shareholders. With an issue price of EUR 3.15 per share, the company generated gross issue proceeds of EUR 0.8 million.

On top of this, the Group concomitantly took out a loan of EUR 0.3 million at the usual market conditions, with the designated maturity ending mid 2017.

6. Guarantees, contingent liabilities and similar obligations

As in the annual consolidated statements from 31 December 2014, no guarantees, contingent liabilities and similar obligations exist.

7. Related party disclosures

No significant business transactions were performed with related parties during the period under review.

8. Events after the interim reporting period

In the context of an out-of-court settlement, the company was able to generate cash inflow of EUR 0.75 million.

As of the publication date of the interim report, no other significant events occurred after 30 June 2015.

YOC Contact

Berlin (Headquarters)

YOC AG YOC Mobile Advertising GmbH

Greifswalder Straße 212 10405 Berlin Germany

T +49 (0) 30 726 162 – 0 F +49 (0) 30 726 162 – 222

London

YOC Mobile Advertising Ltd.

17-21 Old Street, Morelands Buildings 3rd Floor, Block D London, EC1V 9HL, UK

T +44 (0) 20 71 99 61 60

Madrid

YOC Spain S.L.

Orense, 20, 1^a Planta, Oficina 4 28020 Madrid Spain

T +34 (0) 91 392 41 87

Wien

YOC Central Eastern Europe GmbH

Neubaugasse 10/2/17 1070 Wien Austria

T +43 (0) 1 522 5006 – 0 F +43 (0) 1 522 5006 - 116

Financial Calendar

25th August 2015

Annual general meeting of Shareholders

26th November 2015

Publication of Interim Report Third Quarter 2015

Imprint

Publisher

YOC AG

Greifswalder Str. 212 10405 Berlin T +49 (0) 30 72 61 62 – 0 F +49 (0) 30 72 61 62 – 222 info@yoc.com

Overall concept and editing

YOC AG

T +49 (0) 30 72 61 62 – 0 F +49 (0) 30 72 61 62 – 222 ir@yoc.com

www.yoc.com