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YOC AG Interim / Quarterly Report 2019
497_10-q_2019-08-21_7d3bae70-640c-4ba2-b89e-1cab1ced234f.pdf
Interim / Quarterly Report
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Berlin, 21 August 201
| Letter to the Shareholders 3 |
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|---|---|
| YOC at a Glance 4 |
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| Interim Consolidated Management Report 5 |
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| Interim Consolidated Financial Statements10 |
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| Notes to the Financial Statements15 | |
| YOC locations 20 |
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| Financial calendar21 | |
| Imprint …………22 |
2
Dear Shareholders,
YOC Group has been among the leading independent providers of mobile advertising in Europe since 2001. Our goal is to create an ideal digital advertising experience for advertisers, publishers and users of the mobile web.
To this end, we develop eye-catching digital advertising products, which achieve to create a lasting brand awareness and reach out to people through appealing and fascinating ads.
This is why we have conceptualised and developed our new proprietary trade platform VIS.X®, which we introduced into the market at the beginning of 2018.
VIS.X® is a programmatic supply-side platform of the next generation, which facilitates the efficient media trade of visible and high-impact advertising products.
VIS.X® allows our clients to purchase high-quality advertising inventory combined with the YOC products fitting their advertising strategy, in an automated and thereby scalable manner, day and night. In parallel, VIS.X® supports our publisher partners to realize an increased monetization of their media inventories.
We regard the technological opportunities of VIS.X® as visionary. At this stage we have by far not reached the full potential of our platform, however we are on the right course of positioning YOC as a technology-based provider of high-impact programmatic advertising at the top of the advertising market.
We are still going to extend VIS.X® by many functionalities and expand our marketplace by continuously adding new well-renowned premium publishers,
We are pleased to report that in the first six months of the current 2019 financial year the YOC Group's revenue increased by around 18% to total revenue of EUR 6.8 million (H1/2018: EUR 5.7 million) compared with the same period last year.
Increased trading via our VIS.X® technology platform is helping us to increase the company's profitability: Operating earnings before interest, taxes, depreciation and amortization (EBITDA) improved by 98% or EUR 0.4 million to -9 TEUR (H1/2018: -442 TEUR).
Thus, the steady improvement in earnings of previous years continued in the first half of 2019.
In addition, the company expanded its existing product lines with YOC Ads Plus in the second quarter and is thus pursuing its mission to offer a better advertising experience for everyone. Each YOC Ads Plus format promises better awareness, unique user experience and the highest possible quality.
Various international media agencies and advertising customers – including Nespresso, Milka, Unilever and National Geographic - have purchased different versions of the YOC Ads Plus programmatically via VIS.X®.
The company's growth will continue in the second half of the year, with the result that we expect sales revenues of between EUR 15.5 million and EUR 16.5 million for the 2019 financial year as a whole, with a disproportionately low increase in the cost structure.
Dear valued shareholders, with our unique technology platform VIS.X®, our self-developed advertising formats and long-standing expertise, YOC continues to evolve towards being a leading provider of advertising technology in Europe.
We are going to continuously add new functions to VIS.X®. We are expanding our coverage and the available media inventory substantially by integrating new publishers and connecting many new demand side platforms with VIS.X®, thus facilitating access to our platform for many media buyers. All these steps will increase our trade volume and help us stand out from competitors.
Our team is driving this development with strong commitment.
I wish to express my sincere thanks for the trust you have placed in us and will be looking forward to our continued cooperation.
Kind regards,
Dirk-Hilmar Kraus
CEO
| Total Revenue | 6.779 | 5.732 | 1.047 | 1 8 |
|---|---|---|---|---|
| National | 3.777 | 2.632 | 1.145 | 4 3 |
| International | 3.002 | 3.100 | -99 | -3 |
| Gross profit margin (in %) | 37,3 | 37,3 | 0,0 | k.A. |
| Total output | 7.039 | 6.189 | 850 | 1 4 |
| EBITDA | -9 | -440 | 431 | 9 8 |
| EBITDA margin (in %) | -0,1 | -7,1 | 7,0 | k.A. |
| Earnings after tax | -432 | -668 | 236 | 3 5 |
| Earnings per share (diluted in EUR) | -0,13 | -0,20 | 0,07 | 3 5 |
| Earnings per share (basic in EUR) | -0,13 | -0,20 | 0,07 | 3 5 |
| Average number of employees1 ) |
4 8 |
5 5 |
-7 | -13 |
|---|---|---|---|---|
| Number of employees at end of June | 4 8 |
5 6 |
-8 | -14 |
| Total revenue per employee (in kEUR) | 141 | 104 | 3 7 |
3 6 |
| Total output per employee (in kEUR) | 147 | 113 | 3 4 |
3 0 |
| Total assets | 5.237 | 6.2242 ) |
987 | 1 6 |
|---|---|---|---|---|
| Cash flow from operative activities | 9 9 |
-514 | 613 | 119 |
Where rounded figures are used, differences may occur due to commercial rounding.
1) Based on permanent employees on full-time 2) as of 31/12/2018
KEY FIGURES
In the first half of 2019 financial year, the YOC Group recorded total revenues of EUR 6.8 million (H1/2018: EUR 5.7 million). This corresponds to an increase of around 18 % compared with the same period of the previous year.
Revenues on the national market increased by 43 % compared to the same period of the previous year.
Revenues from international business activities declined slightly by 3 % in the first six months of 2019.
This was due to the fact that the sales targets in the British and Spanish markets could not be achieved. Corresponding adjustments to the cost structure were made. However, taking the whole year into consideration a stabilisation effect is expected. By contrast, revenues in Austria and Poland each increased by around 30 % compared with the same period in the previous year.
In particular, the proprietary technological platform VIS.X®, introduced into the market in 2018, added to the revenue development in the reporting period with steadily growing sales shares. The trade platform VIS.X®allows for the programmatic (automated) trade of highly effective advertising products by YOC, positioning the company as a provider of high-quality advertising technology.
At the same time, the revenue share of self-developed ad tech products increased, leading to the company's gross profit margin reaching a quota of 37 % in the first half of financial year 2019 (H1/2018: 37 %).
Operating earnings before interest, taxes, depreciation and amortization (EBITDA) improved by EUR 0.4 million (+98 %) year-on-year to EUR -0.009 million (H1/2018: EUR -0.442 million). Thus, the improvement in profitability of previous years continued in the first half of 2019.
The operating cash flow in the reporting period came to EUR 0.1 million (H1/2018: EUR -0.5 million). In addition to the result after taxes, this resulted from the seasonal change in working capital.
RANGE OF SERVICE
With its growth of expertise since 2001, YOC develops innovative digital advertising formats, making them available through its marketplace for both traditional and automated real-time trade (programmatic advertising). With its cutting-edge technology, developed in-house, along with a tremendous coverage, the company operates at the forefront of the advertising market.
YOC's proprietary products create positive brand awareness and contribute substantially to changing the advertising market.
This way advertising clients reach their goals, while the self-developed, unobtrusive formats improve the user experience. Our long-standing experience, transparent processes, our software and excellent service create trust in YOC and convince both customers and partners.
A large number of the top 500 global advertisers use YOC's technology. Our clients include well renowned brands such as Deutsche Telekom, Audi, McDonald's, Volkswagen, Mercedes-Benz, Netflix, Coca-Cola, Samsung, Garnier or Sky.
Our around 400 integrated well-selected international partners with a direct global coverage of more than 200 million monthly active users (MAU) include premium publishers such as Mail Online, Trinity Mirror, Kurier, Kronenzeitung, Der Tagesspiegel, Bunte.de or Eurosport. They trust in YOC due to our technological and market specific skills as well as a long-standing profitable partnership.
The company`s focus lies on positioning itself as a technological provider of its proprietary supply-side platform VIS.X® as well as mobile advertising products and solutions in the core markets in Great Britain, Germany, Austria, Spain, Poland - and since the third quarter of 2018 also the Netherlands.
As a result of the modified technological framework parameters, YOC has assumed a stronger position in the market for digital advertising and undergone decisive changes over the past years.
To this end, the company has internalised important elements of the value chain in mobile advertising and also tackled the issue of online advertising. This includes the development of proprietary, high-performing advertising products that on the one hand unfold a strong advertising effect for advertisers and on the other do not intrude on the internet user's consumption of media content.
What is more, the company set up a comprehensive system landscape over the past years, consisting of self-developed, innovative software and prominent solutions by well-known external providers like Google, SAP or Salesforce. On this basis, YOC is able to serve all relevant sales channels in a scalable manner.
The mix of a modern and scalable supply-side platform, innovative advertising products and a highperforming technological infrastructure is the striking competitive feature by which YOC clearly stands out from other market participants.
YOC'S SUPPLY-SIDE PLATFORM (SSP): VIS.X®
In addition to the established product lines, YOC has developed a new platform for highly automated media trade and introduced it into the market at the beginning of 2018. This strategy aims at delivering the solution to one of the prevailing problems of the digital advertising market: satisfying the demand for the programmatic purchase of highly impact advertising formats.
Most of the platforms available in the market concentrate on standard products, so that the product lines developed by YOC in-house - as well as eye-catching advertising formats from several third-party providers – were not available for programmatic booking.
With VIS.X®, YOC establishes a new programmatic trading venue for international, brand-safe inventory by premium publishers – positioning itself in the market as a provider of high-quality advertising technology.
The platform combines the publishers' advertising inventory with YOC's own products via private marketplaces in an integral auction, thereby offering the advertisers all relevant products in one transaction.
In line with the buyers' targeting data and individual campaign goals, YOC provides the appropriate auctioning mechanisms for an efficient media purchase. The purchasing process for advertisers, media agencies as well as their trading desks does not require further technological adaptations to the existing infrastructure.
Already available advertising media are transformed into YOC's in-house, promotionally effective products and delivered through VIS.X® in real-time. The technology developed by YOC thereby unfolds the full potential of programmatic advertising, making VIS.X® the ideal platform for effective digital advertising.
By integrating several hundred publishers and due to the high performance of VIS.X®, the trading desks are offered high scalability in real-time as well as international premium inventory for their media purchase.
The available inventory of one publisher is offered to all buyers at the same time. This ensures ideal monetising for the publishing partner. At the same time, the platform offers YOC's advertising client's premium inventory, high transparency as well as brand safety, leading to better advertising results.
Hence, the use of VIS.X® provides the publishers, trading desks and advertisers with a sustainable competitive edge.
The company benefits from its independence from third-party suppliers, positioning itself as a strong technology provider with a scalable business model. This constantly drives the company to further develop the in-house supply-side platform (SSP) VIS.X® and thereby increase the platform's performance capacity.
In the past financial year 2018, VIS.X® was protected and registered as a European trademark by the European Patent Office.
PRODUCT LINES
The company successfully commercialises its product lines YOC Understitial Ad®, YOC Inline Video Ad, YOC Mystery Ad® as well as the YOC Mystery Scroller®.
The aim of these products is to spread the advertising messages of advertisers among the end users in an effective and purposeful way. The use of different methods of display, interactive elements as well as unobtrusive operating principles leads to a better acceptance with users.
Adding to this, other than traditional standard formats, the YOC products allow for enhanced methods of measuring different interaction and retrieval statistics. This is how, on the one hand, they contribute substantially to the measurability of marketing success for advertisers, while on the other hand enhancing the potential for optimising the advertising effect with the end users.
In particular those product variants with video components offer advertisers the possibility to advertise their brands and products audio-visually on mobile devices in a comprehensive and highly scalable manner.
The core characteristic of YOC Understitial Ad® is its effective but nonetheless unobtrusive placement in the content environment of a website. Advertisers reach the smartphone or desktop users with large-scale advertising material without disrupting them in their user habits.
In this advertising medium, YOC unites technological experience with expertise in targeting users in digital environments.
Last financial year 2018, YOC Understitial Ad® was further improved. Especially the video version was enhanced with the newest software protocols and received new components.
Following the success of the mobile format YOC Understitial Ad®, the company also introduced a version for the desktop advertising market:
YOC Understitial Desktop Ad is just as unobtrusive in the editorial content as the mobile product, and it is opened successively by scrolling a page until it becomes fully visible. The online advertising format is available for HTML5, video or image content. Here, too, the intention not to intrude on the users' digital habits is the main focus.
Meanwhile, YOC improves monetising for publishers with this product extension, as advertising campaigns based on YOC Understitial Ad® are available both for mobile and online sale. On top of this, the development of YOC Understitial Desktop Ad strengthens the holistic communication approach of the advertisers.
YOC Inline Video Ad is an innovative digital advertising format which allows advertisers to place video ads on traditional websites without own video content. It is compatible with the standards of the branch (VAST and VPAID) and plays the video ad in high quality. The special feature of this product is that it can be used anywhere and that no fixed placement within the publisher's website is required.
The integrated automatic start-stop system only lets the video play when the user is actually viewing it on his smart phone display or monitor, and it pauses as soon as it moves out of the visible range by scrolling.
This significantly improves the viewability and, as a consequence, the advertising effect for the advertiser.
YOC Mystery Ad® is a full-screen mobile advertising format which has won several awards. The product's special feature lies in the possibility of inviting the user to interact with the brand message through any number of creative elements. YOC Mystery Ad® hence offers comprehensive design options that guarantee to attract great attention with the users.
In mid-2018, YOC introduced its fourth advertising format into the market: YOC Mystery Scroller®. The advantage of the YOC Mystery Scroller® is its reactive scrolling technology: animations, effects and videos can be adapted to the user's scrolling behaviour.
YOC Mystery Scroller® is supported by all mobile browsers, only using around 30 % of the display. The ad remains visible at all times, without disturbing the reading flow. Due to its proactive nature, YOC Mystery Scroller® does not just play an advertising format but gives it a special touch without annoying transitions.
Aside from the mentioned YOC-owned products, the company also offers traditional advertising formats that follow the internationally applicable IAB and MMA standards. Moreover, the team of experts at YOC is able to develop additional functionalities such as responsive formats, enhanced tracking possibilities or the use of special advertising media within standard formats. Measuring viewability has advanced to becoming a decisive factor for managing, optimising and analysing a campaign.
In financial year 2018, YOC hence further extended its technological infrastructure for measuring and analysing the viewability of mobile ad formats.
The YOC products follow the standards of the market (IAB and MRC) and thereby offer advertisers internationally comparable performance indicators for the effectiveness of their digital advertising. As a consequence, YOC provides alternative payment models for its advertising clients based on the collected viewability data. A campaign is only charged for when for example a video has been played in full length in the user's field of vision.
All YOC product lines, with the exception of the YOC Inline Video Ad, have been protected and registered with the European Patent Office in past financial year 2018 for brand safety reasons.
ADDITIONAL DIGITAL SERVICES
YOC offers its advertising clients effective mobile and online advertising solutions for successful advertising campaigns:
CREATIVE SERVICES
For already more than a decade, YOC has advised advertisers on the right choice of mobile advertising formats and, as the case may be, also handles the production of advertising media. Aside from these services, the company's specialists also provide their expertise in managing the campaigns on digital devices.
YOC HUB
The business intelligence platform YOC Hub is both a tool for internal process management at YOC and for publishers to control and optimise their marketing activities. In addition, the company's own platform VIS.X® is controlled by YOC Hub.
The enhanced support of the programmatic business segment through dedicated reporting simplifies the daily operating business. Through the comprehensive and freely configurable software surface of YOC Hub, users gain an up-to-date overview of the YOC products' marketing success.
The new accounting standard IFRS 16 has been applicable since 01 January 2019. It regulates the recognition, measurement, disclosure and disclosure requirements for leases.
For a more detailed presentation of the revaluation and reclassification effects, please refer to the section "Principles for the preparation of the financial statements, accounting and valuation methods" in the notes of the interim report.
REVENUE TREND AND OVERALL PERFORMANCE
In the first six months of the current 2019 financial year, the YOC Group increased total revenues by around 18 % year-on-year to EUR 6.8 million (H1/2018: EUR 5.7 million).
At EUR 7.0 million, the Group's total output was EUR 0.8 million higher than in the previous year (H1/2018: EUR 6.2 million).
GROSS PROFIT
In the reporting period, the gross profit margin ratio remained constant at 37 % compared to the previous year (H1/2018: 37 %). The continued increase of the gross profit margin is an important element of the further sustained positive corporate development and at the same time reflects the adjusted market position of the company.
PERSONNEL EXPENSES AND STAFF DEVELOPMENT
Compared with the previous year, the average headcount (excluding the Management Board) of the Group fell to 48 employees (H1/2018: 55 employees). As of 30 June 2019, the YOC Group employed 48 permanent staff.
Compared with the previous year, this represented a decline of 14 % (H1/2018: 56 permanent employees).
At EUR 1.95 million, personnel expenses were around 10 % below the level of the previous year (H1/2018: EUR 2.1 million).
OTHER OPERATING EXPENSES
In the first six months of the current fiscal year 2019, other operating expenses of total EUR 0.8 million were slightly below the level of the previous year (H1/2018: EUR 0.9 million). Overall, the cost-cutting measures implemented over the past years in various fields continued to take effect.
EBITDA
Operating earnings before interest, taxes, depreciation and amortization (EBITDA) improved by EUR 0.4 million (+98 %) year-on-year to EUR -0.009 million (H1/2018: EUR -0.442 million). Thus, the improvement in profitability of previous years continued in the first half of 2019.
POST-TAX PROFIT OR LOSS
YOC Group recognised scheduled depreciation in the amount of EUR 0.25 million (H1/2018: EUR 0.15 million), a negative financial result in the amount of EUR 0.1 million (H1/2018: EUR -0.05 million) as well as taxes on income and revenue in the amount of EUR 0.06 million (H1/2018: EUR 0.03 million).
Earnings after tax (including corporate functions) thus came to EUR -0.4 million in the reporting period (H1/2018: EUR -0.7 million).
As of 30 June 2019, YOC Group's cash and cash equivalents amounted to EUR 0.3 million.
OPERATING CASH FLOW
The operating cash flow is determined using the indirect method. The starting point for determining the operating cash flow is the net income after taxes in the reporting period, amounting to EUR -0.4 million (H1/2018: EUR -0.7 million). The operating cash flow includes all cash transactions that are not attributable to investing or financing activities.
The operating cash flow came to EUR 0.1 million in the reporting period (H1/2018: EUR -0.5 million).
In addition to the result after taxes, this resulted from the seasonal change in working capital.
CASH FLOW FROM INVESTING ACTIVITIES
The cash flow from investing activities totalling EUR 0.3 million (H1/2018: EUR 0.3 million) primarily comprises capitalizable development costs in connection with the further development of the company's technological platforms and innovative products as well as external development costs.
In the fixed assets, the additions and disposals are balanced.
CASH FLOW FROM FINANCING ACTIVITIES
The cash flow from financing activities of EUR -0.2 million (H1/2018: EUR 0 million) results from the reduction of loan and leasing liabilities.
OPPORTUNITIES AND RISKS
Being a service provider with an international focus, YOC Group is active in a dynamic market which naturally brings about certain corporate and branchspecific 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 detect 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 company-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-return-ratio, 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 detected and evaluated at an early stage so that a timely and appropriate response is possible, and efficient management can be guaranteed for 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 use of the internet has already permeated peoples' daily lives to a large extent. Its various possibilities along with the bulk of content provided online affect the continuously increasing daily internet consumption. Especially people who go online with their mobile devices while on the move use the internet at a much higher rate compared to the overall population: on average 209 minutes daily. In the group of users under 30 years of age, the daily usage was even 278 minutes.1)
In order to stay relevant for this generation, both publishers and advertisers need to provide attractive information and entertainment products. For publishers this implies not to overstrain their users with advertisements and ideally even to offer them additional value through creative formats. For advertisers, on the other hand, it means to exactly know their target group and to address them in a creative way. In this light, the need for creative and highly effective formats becomes even more relevant. Studies show that rich media formats, i.e. formats that allow for integrating multifarious media such as video, audio or HTML5, create interaction levels five times as high as standard banners achieve, leading to a higher and more positive brand awareness.2)
For some years, YOC has already positioned itself in this business segment with numerous attractive product lines and features and will participate in the growth of the market by providing interactive and highly effective advertising formats in the programmatic environment. The automation of the media trade was as yet, however, met hesitantly especially in Germany.
But also, in the European context the market currently offers few supply-side platforms that can service the demand for mobile programmatic advertising in connection with highly effective advertising products. Further reservations arise from the concern of many advertisers that their ad could appear in negatively connoted environments. This shows all the more the relevance of secure premium environments and especially their transparency.
Against the background, YOC saw the need for corresponding in the past year: By developing the new proprietary supply-side platform VIS.X® in 2018, YOC not only offers highly effective advertising formats that meet the requirements of the Coalition For Better Ads3) , but can now also trade them via platform-based programmatic sales channels. By binding premium publishers and their high-quality inventory, YOC moreover covers the strong demand for brand safety, i.e. for secure advertising environments, and will thereby in future participate in the further expansion of programmatic trade in Europe.
In financial year 2019, the Management Board devotes special attention to stabilising the dynamic growth of the programmatic platform trade and thereby to implementing the defined business strategy. To this end it is necessary that all YOC subsidiaries adapt the new market positioning and implement all relevant tasks. Meanwhile, YOC Group's internationalisation shall be further advanced. By introducing its own technology platform VIS.X® into the market, the company will achieve a sustainable competitive edge as well as independence from third party providers through the programmatic trade of highly effective advertising products. On top of this, aside from the existing business, further revenue will be generated successively in the programmatic real-time trade.
Expectations for financial year 2019 are positive. Altogether, YOC Group reckons with sales revenues ranging between EUR 15.5 million and EUR 16.5 million in financial year 2019, with the cost structure merely rising at a disproportionately low rate.
On the basis of this revenue forecast, the company expects a further improvement in operating earnings before interest, taxes, depreciation and amortization (EBITDA) of between EUR 0.2 million and EUR 0.5 million for the 2019 financial year.
1) ARD/ZDF. ARD/ZDF-Onlinestudie 2018. 10.10.2018. http://www.ard-zdf-onlinestudie.de/ardzdf-onlinestudie-2018/. Access on: 11.03.2019.
2) Adform. Standard vs. Rich Media! Who will win the battle?. Website of adform. 09.17.2012. https://blog.adform.com/rich-media/standard-vs-rich-media/. Access on: 03.11.2019.
3) Coalition for Better Ads. The Bad Ads Standards. No publication date. https://www.betterads.org/standards/. Access on: 11.03.2019.
| Revenue | 3.901.313 | 3.013.698 |
|---|---|---|
| Own work capitalised | 78.653 | 81.806 |
| Other operating income | 44.846 | 81.395 |
| Total output | 4.024.812 | 3.176.899 |
| Expenses for goods and services | 2.471.165 | 1.905.880 |
| Personnel expenses | 973.267 | 1.073.604 |
| Other operating expenses | 449.713 | 495.388 |
| Earnings before interest, taxes, depreciation and amortization | 130.667 | -297.973 |
| Depreciation and amortisation expenses | 118.181 | 79.018 |
| Earnings before interest and taxes | 12.486 | -376.991 |
| Financial expenses | 66.696 | 23.355 |
| Financial result | -66.696 | -23.355 |
| Earnings before taxes | -54.210 | -400.346 |
| Income taxes | 4.183 | -11.003 |
| Net income continuing operations | -58.393 | -389.343 |
| Net income | -58.393 | -389.343 |
| Earnings per share basic | -0,02 | -0,12 |
|---|---|---|
| Earnings per share diluted | -0,02 | -0,12 |
| Net income | -58.393 | -389.343 |
|---|---|---|
| Net other comprehensive income to be reclassified through | ||
| profit or loss in subsequent periods: | ||
| Unrealised gains/losses from foreign currency translation | 5.245 | 9.264 |
| Total other comprehensive income | 5.245 | 9.264 |
| Total comprehensive income | -53.148 | -380.079 |
| -58.393 | -389.343 | |
|---|---|---|
| 5.245 | 9.264 | |
| WWWWW 5.245 |
9.264 | |
| -53.148 | -380.079 |
| Revenue | 6.779.392 | 5.732.245 |
|---|---|---|
| Own work capitalised | 149.142 | 166.947 |
| Other operating income | 110.794 | 290.030 |
| Total output | 7.039.328 | 6.189.222 |
| Expenses for goods and services | 4.253.397 | 3.592.092 |
| Personnel expenses | 1.947.488 | 2.117.121 |
| Other operating expenses | 847.810 | 919.753 |
| Earnings before interest, taxes, depreciation and amortization | -9.367 | -439.744 |
| Depreciation and amortisation expenses | 252.180 | 153.861 |
| Earnings before interest and taxes | -261.547 | -593.605 |
| Financial expenses | 106.872 | 47.215 |
| Financial result | -106.872 | -47.215 |
| Earnings before taxes | -368.419 | -640.820 |
| Income taxes | 63.255 | 26.741 |
| Net income continuing operations | -431.674 | -667.561 |
| Net income | -431.674 | -667.561 |
| Earnings per share basic | -0,13 | -0,20 |
|---|---|---|
| Earnings per share diluted | -0,13 | -0,20 |
| Net income | -431.674 | -667.561 |
|---|---|---|
| Net other comprehensive income to be reclassified through | ||
| profit or loss in subsequent periods: | ||
| Unrealised gains/losses from foreign currency translation | 10.862 | 14.881 |
| Total other comprehensive income | 10.862 | 14.881 |
| Total comprehensive income | -420.812 | -652.680 |
| -431.674 | -667.561 | |
|---|---|---|
| 10.862 | 14.881 | |
| 10.862 | 14.881 | |
| -420.812 | -652.680 |
| Non-current assets | 1.642.464 | 844.641 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Property, plant and equipment | 86.117 | 96.189 | |||||||
| Intangible assets | 867.297 | 747.287 | |||||||
| Deferred tax assets | 1.172 | 1.165 | |||||||
| Rights of use from leasing | 687.878 | 0 | |||||||
| Current assets | 3.594.956 | 5.379.230 | |||||||
| Trade receivables | 3.002.466 | 4.532.281 | |||||||
| Other receivables | 300.523 | 182.720 | |||||||
| Tax receivables | 0 | 0 | |||||||
| Cash and cash equivalents | 291.967 | 664.228 | |||||||
| Total assets | 5.237.420 | 6.223.871 |
| Equity | -4.315.419 | -3.894.606 |
|---|---|---|
| Subscribed capital | 3.292.978 | 3.292.978 |
| Additional paid in capital | 20.961.224 | 20.961.224 |
| Retained earnings | -28.495.054 | -28.063.379 |
| Other comprehensive income from currency translation differences | -24.249 | -35.111 |
| Own shares | -50.319 | -50.319 |
| Non-current liabilities | 2.945.292 | 2.430.181 |
| Provisions | 79.734 | 79.714 |
| Liabilities from leasing | 541.832 | 0 |
| Other financial liabilities | 2.323.726 | 2.350.467 |
| Current liabilities | 6.607.547 | 7.688.296 |
| Prepayments received | 6.282 | 12.485 |
| Trade payables | 2.991.625 | 3.426.506 |
| Other liabilities | 302.261 | 575.906 |
| Other financial liabilities | 2.048.111 | 3.610.140 |
| Liabilities from leasing | 147.492 | 0 |
| Tax liabilities | 57.635 | 46.760 |
| Provisions | 1.054.141 | 16.500 |
| Total equity and liabilities | 5.237.420 | 6.223.871 |
| -4.315.419 | -3.894.606 |
|---|---|
| 3.292.978 | 3.292.978 |
| 20.961.224 | 20.961.224 |
| -28.495.054 | -28.063.379 |
| -24.249 | -35.111 |
| -50.319 | -50.319 |
| 2.945.292 | 2.430.181 |
| 79.734 | 79.714 |
| 541.832 | O |
| 2.323.726 | 2.350.467 |
| 6.607.547 | 7.688.296 |
| 6.282 | 12.485 |
| 2.991.625 | 3.426.506 |
| 302.261 | 575.906 |
| 2.048.111 | 3.610.140 |
| 147.492 | O |
| 57.635 | 46.760 |
| 1.054.141 | 16.500 |
| 5.237.420 | 6.223.871 |
| Net income | -431.675 | -667.561 |
|---|---|---|
| Depreciation and amortisation | 252.180 | 153.861 |
| Taxes recognised in the income statement | 63.255 | 26.741 |
| Interest recognised in the income statement | 106.872 | 47.215 |
| Other non-cash income and expenses | 19.753 | 33.055 |
| Cash-Earnings | 10.387 | -406.689 |
| Changes in receivables and other receivables | 1.412.013 | 736.944 |
| Changes in liabilities, prepayments and other liabilities | -2.260.786 | -1.466.222 |
| Changes in provisions | 1.037.661 | 727.519 |
| Changes in other assets and liabilities | 1.445 | 0 |
| Interest paid | -68.965 | -63.728 |
| Income taxes paid | -33.000 | -41.524 |
| Cash flow from operating activities | 98.755 | -513.700 |
| Purchase of property, plant and equipment | -12.068 | -28.288 |
| Purchase of intangible assets | -66.546 | -91.560 |
| Outflow from development costs | -174.497 | -166.947 |
| Disposal of assets | 8 4 |
0 |
| Cash flow from investing activities | -253.027 | -286.795 |
| Repayment of lease liabilities | -117.989 | 0 |
| loan repayment | -100.000 | 0 |
| Cash flow from financing activities | -217.989 | 0 |
| Net increase / decrease | -372.261 | -800.495 |
| Cash and cash equivalents at the beginning of the period | 664.228 | 984.244 |
| Cash and cash equivalents at the end of the period | 291.967 | 183.008 |
| as of 01/01/2018 | 3.292.978 | 20.641.091 | -27.904.959 | -70.306 | -50.319 | -4.091.514 |
|---|---|---|---|---|---|---|
| Net income | 0 | 0 | -668.304 | 0 | 0 | -668.304 |
| Currency translation differences |
0 | 0 | 0 | 14.881 | 0 | 14.881 |
| Comprehensive income | 0 | 0 | -668.304 | 14.881 | 0 | -653.423 |
| as of 30/06/2018 | 3.292.978 | 20.641.091 | -28.573.263 | -55.425 | -50.319 | -4.744.937 |
| as of 01/01/2019 | 3.292.978 | 20.961.224 | -28.063.379 | -35.111 | -50.319 | -3.894.606 |
|---|---|---|---|---|---|---|
| Net income | 0 | 0 | -431.675 | 0 | 0 | -431.675 |
| Currency translation differences |
0 | 0 | 0 | 10.862 | 0 | 10.862 |
| Comprehensive income | 0 | 0 | -431.675 | 10.862 | 0 | -420.813 |
| as of 30/06/2019 | 3.292.978 | 20.961.224 | -28.495.054 | -24.249 | -50.319 | -4.315.419 |
Where rounded figures are used, differences may occur due to commercial rounding.
› No shares are held by non-controlling shareholders.
GENERAL INFORMATION
YOC AG, with headquarters at Greifswalder Str. 212, Berlin, Germany, is an international 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.
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 30 June 2019 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) 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 to read the interim report along with the Annual Report 2018.
Standards and interpretations requiring mandatory application in the current financial year
In the ongoing financial year 2019, all standards that were mandatory as of 01 January 2019 were complied with.
IFRS 16 regulates the recognition, measurement, presentation and disclosure of leases. The standard provides a single accounting model for the lessee.
IFRS 16 was published in January 2016 and is to be applied for the first time to financial years beginning on or after 01 January 2019. This results in the lessee recognising all assets and liabilities under leases in the balance sheet unless the lease term is 12 months or less or the asset is of low value (either option).
For accounting purposes, the lessor continues to distinguish between finance and operating leases. The lessor's accounting model is not materially different from that in IAS 17 - Leases.
The company makes use of the modified retrospective application. The company has not made use of the possibility of early application. The new regulations relate to the accounting and valuation of rental leases that were previously classified as operating leases.
In the context of the first-time application, leases with a remaining term of up to one year were treated as short-term leases.
The office space leased by the company leads to corresponding rights of use and correlating leasing liabilities. The leasing liabilities in accordance with IFRS 16 are discounted using the marginal borrowing rate as of 01 January 2019. The weighted average interest rate is 7.9 %.
Published standards and interpretations that are not yet mandatory
IFRIC 23 rules the requirements for recognition and measurement of uncertain income tax items. This interpretation is to be applied to taxable profits (tax losses), tax bases, unused tax losses, unused tax credits and to tax rates, where there is uncertainty regarding the income tax treatment according to IAS 12.
The company is currently assessing the implications of applying the interpretation to the consolidated financial statements.
The YOC AG Management Board assumes that the above-mentioned standards and interpretations will be applied in the financial statements of the financial year in which they become mandatory, if cases should occur in which they apply.
OTHER DISCLOSURES TO FINANCIAL INSTRUMENTS
The carrying amounts of cash and cash equivalents,
trade receivables, other current assets and other current financial liabilities approximate their fair values mainly due to the short maturities of these instruments.
For reasons of materiality, the fair value of these shortterm balance sheet items is equated with their carrying amount.
The following table shows the carrying amounts, fair values and categorisation in accordance with IFRS 9.
| Cash and cash equivalents | 292 | 292 |
|---|---|---|
| Trade receivables | 3.002 | 3.002 |
| Other assets | 301 | 301 |
| thereof long-term | ||
| Fixed rate borrowing | 1.030 | 1.030 |
| YOC Convertible Bond 2018 - 2020 | 1.294 | 1.294 |
| thereof short-term | ||
| Trade payables | 2.992 | 2.992 |
| Fixed rate borrowing Other financial liabilities |
250 1.798 |
250 1.798 |
| Cash and cash equivalents | 183 | 183 |
| Trade receivables | 2.250 | 2.250 |
| Other assets | 149 | 149 |
| thereof long-term | ||
| Fixed rate borrowing | 800 | 800 |
| YOC Convertible Bond 2018 - 2020 | 0 | 0 |
| thereof short-term | ||
| Trade payables | 3.175 | 3.175 |
| Fixed rate borrowing | 500 | 500 |
REVENUE AND TOTAL OUTPUT
In the six months of the current 2019 financial year, the YOC Group increased total revenues by around 18 % year-on-year to EUR 6.8 million (H1/2018: EUR 5.7 million). At EUR 7.0 million, the Group's total output was EUR 0.8 million higher than in the previous year (H1/2018: EUR 6.2 million).
GROSS PROFIT
In the reporting period, the gross profit margin remained constant at 37 % compared with the previous year (H1/2018: 37 %).
EBITDA
Other financial liabilities 1.786 1.786
Operating earnings before interest, taxes, depreciation and amortization (EBITDA) improved by EUR 0.4 million (+98 %) year-on-year to EUR -0.009 million (H1/2018: EUR -0.442 million).
Thus, the improvement in profitability of previous years continued in the first half of 2019.
Segment reporting is based on the internal management structure and reporting. At the beginning of the second quarter of 2019, internal reporting and external corporate communications were changed.
In addition to the corporate functions, the Group is divided into the following reportable regional business segments:
› National
› International
To form the above reportable business segments, the regions Austria, Great Britain, Spain, Poland and the Netherlands are combined in the international segment in the course of the preparation of the 2019 halfyear financial statements, as they have comparable
economic characteristics and are also comparable with regard to their products, services, customers, processes, structures and sales methods.
The previous year's figures were adjusted accordingly.
Sales revenue is calculated based on the revenue generated by the subsidiaries in the respective countries. Internal sales between the segments are predominantly obligations which are passed on without a surcharge.
Internal sales within a segment are eliminated accordingly. In addition, the parent company generates revenues in the central revenue optimization area of the YOC Group's international publisher portfolio and passes them on internally.
The following table shows the results of the different segments. In accordance with the internal reporting structure, EBITDA is used to measure the earnings:
| (in kEUR) | ||||||
|---|---|---|---|---|---|---|
| -- | ----------- | -- | -- | -- | -- | -- |
| External revenue | 2.271 | 2.396 | 2.112 | 0 | 6.779 |
|---|---|---|---|---|---|
| Internal revenue | 1.393 | 605 | 281 | -2.279 | 0 |
| Total revenue | 3.664 | 3.002 | 2.393 | -2.279 | 6.779 |
| Own work capitalised | 0 | 0 | 149 | 0 | 149 |
| Other operating income | 4 3 |
1 8 |
421 | -371 | 111 |
| Total output | 3.707 | 3.019 | 2.963 | -2.650 | 7.039 |
| Costs of goods sold | 2.335 | 1.796 | 2.400 | -2.278 | 4.253 |
| Personnel expenses | 518 | 620 | 809 | 0 | 1.947 |
| Other operating expenses | 280 | 488 | 453 | -374 | 848 |
| EBITDA | 574 | 115 | -699 | 1 | -9 |
| External revenue | 1.886 | 2.719 | 1.125 | 0 | 5.730 |
|---|---|---|---|---|---|
| Internal revenue | 720 | 381 | 442 | -1.543 | 0 |
| Total revenue | 2.605 | 3.100 | 1.567 | -1.543 | 5.730 |
| Own work capitalised | 0 | 0 | 167 | 0 | 167 |
| Other operating income | 148 | 7 8 |
497 | -434 | 290 |
| Total output | 2.754 | 3.178 | 2.231 | -1.977 | 6.187 |
| Costs of goods sold | 1.663 | 1.894 | 1.577 | -1.542 | 3.592 |
| Personnel expenses | 444 | 843 | 830 | 0 | 2.117 |
| Other operating expenses | 235 | 622 | 497 | -434 | 920 |
| EBITDA | 412 | -181 | -672 | 0 | -442 |
In the national segment, total sales including internal sales increased by 41 % to kEUR 3,664 (H1/2018: kEUR 2,605). As a result, EBITDA increased by kEUR 162 to kEUR 574 (H1/2018: kEUR 412) compared to the same period of the previous year.
Revenues from international business activities declined slightly in the first six months of 2019, falling by 3 % to kEUR 3,002 (H1/2018: kEUR 3,100).
This was due to the fact that the sales targets in the British and Spanish markets could not be achieved.
On the other hand, sales revenues in Austria and Poland each increased by around 30 % year-on-year.
For the year as a whole, however, the international segment is expected to stabilise and generate revenue growth compared with the previous year.
However, a corresponding adjustment to the cost structure improved EBITDA by kEUR 296 year-on-year.
As a result, the segment contributed positive EBITDA of kEUR 115 (H1/2018: kEUR -181) to the consolidated result.
The EBITDA of YOC Group is reconciled to net income as follows:
As of June 30, 2019, trade receivables in the national region amounted to kEUR 1,137 (previous year: kEUR 567) and kEUR 1,052 (previous year: kEUR 1,308) in the international region and kEUR 813 (previous year: kEUR 375) in corporate functions.
In addition, liabilities in the national region amounted to kEUR 1,619 (previous year: kEUR 1,154), international to kEUR 1,049 (previous year: kEUR 1,509) and corporate functions to kEUR 323 (previous year: kEUR 512).
As of 30 June 2019, YOC Group's cash and cash equivalents amounted to EUR 0.3 million.
The operating cash flow came to EUR 0.1 million in the reporting period (H1/2018: EUR -0.5 million). In addition to the result after taxes, this resulted from the seasonal change in working capital.
The cash flow from investing activities totalling EUR 0.3 million (H1/2018: EUR 0.3 million) primarily comprises capitalizable development costs in connection with the further development of the company's technological platforms and innovative products as well as external development costs. In the fixed assets, the additions and disposals are balanced.
The cash flow from financing activities of EUR -0.2 million (H1/2018: EUR 0 million) results from the reduction of loan and leasing liabilities.
On 22 July 2019, YOC AG announced that Germany's Federal Financial Supervisory Authority BaFin is conducting a fine proceeding against the company. The background to this is a missing statement by the management board pursuant to § 264 (2) sentence 3 and § 289 (1) sentence 5 of the German Commercial Code (Handelsgesetzbuch) in the half-year financial reports 2016 and 2017.
The accuracy of the figures in the half-year financial statements and the relevant annual financial statements as such is not in question. The amount of a possible fine has not yet been determined but will have to take into account the economic performance of the company. YOC AG will cooperate with BaFin in the processing of the case.
There were no other significant events after 30 June 2019 up to the date of publication of the interim consolidated financial statements.
The financial instruments of the YOC Group include trade accounts payable, cash and cash equivalents, other assets and trade accounts payable, other liabilities and the YOC convertible bond 2018–2022.
It is possible that the YOC convertible bond 2018–2022 was not or only partially converted into YOC shares on the repayment date. In this case, 112 % of the non-converted bonds would be repaid.
All other information on the company- and industryspecific and financial risks of the YOC Group and its management is provided in the risk report of the Group management report, which forms part of the audit by the auditor.
Depending on a specific exercise scenario, payment obligations may arise from the virtual stock option program under certain circumstances.
There are no other contingencies, warranties, contingent liabilities or similar obligations.
For the purposes of IAS 24, related companies and persons are generally defined as members of the Management Board and of the Supervisory Board of YOC AG along with their family members and companies controlled by these persons. Persons in key positions and their close family members are also considered related parties (according to IAS 24.9).
Since 01 January 2015, YOC AG's obligations to the Management Board member Dirk-Hilmar Kraus amounting to kEUR 180 have been subject to interest at a rate of 5 % p. a. and reported under non-current financial liabilities.
In June 2019, Mr. Dirk-Hilmar Kraus also provided the company with a loan of kEUR 100 to finance further growth. This loan is subject to interest of 6 % p.a. on payment in September 2019 and is reported under non-current financial liabilities.
Beyond that, no significant business transactions with related companies or persons took place in the period under review.
I assure, to the best of my knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Berlin, 21 August 2019
Dirk-Hilmar Kraus The Management Board
YOC AG YOC Mobile Advertising GmbH
Greifswalder Straße 212 10405 Berlin Germany
YOC Central Eastern Europe GmbH
Neubaugasse 10/2/17 1070 Vienna Austria
YOC Mobile Advertising GmbH
Corneliusstraße 16 - 18 40215 Dusseldorf Germany
YOC Mobile Advertising Ltd.
WeWork Chancery Lane 14 Gray's Inn Road London, WC1X 8HN Great Britain
YOC Central Eastern Europe GmbH
SP. Z O. O. ODDZIAŁ W POLSCE Ul. Biały Kamien 3 m 49 02-593 Warsaw Poland
YOC Mobile Advertising Netherlands
Mediarena 2 1114 BC Amsterdam – Duivendrecht Netherlands
YOC Spain S.L.
Calle de Orense nº 20 1ª Planta Ofic. 4 28020 Madrid Spain
Interim Report Third Quarter 2019
MKK – Münchner Kapitalmarkt Konferenz
YOC AG Greifswalder Straße 212 10405 Berlin Germany
P +49 (0) 30 72 61 62 - 0 F +49 (0) 30 72 61 62 - 222 [email protected]
Commercial Register Registration: Berlin HRB 77 285
YOC AG Investor Relations
[email protected] www.yoc.com
