TECHNOLOGY-DRIVEN PERFORMANCE MARKETING. March 2018

Transcription

1 TECHNOLOGY-DRIVEN PERFORMANCE MARKETING March 2018

2 DISCLAIMER THIS PRESENTATION (THE PRESENTATION ) WHICH HAS BEEN PREPARED BY XLMEDIA PLC. (THE COMPANY) IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES, AND NEITHER THE PRESENTATION NOR ANYTHING CONTAINED HEREIN NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH OR ACT AS ANY INDUCEMENT TO ENTER INTO ANY CONTRACT OR COMMITMENT WHATSOEVER. Neither the Presentatin, nr any part f it, may be taken r transmitted int the United States f America, Australia, Canada, Suth Africa r Japan r int any jurisdictin where it wuld be unlawful t d s ( Prhibited Territry ). Any failure t cmply with this restrictin may cnstitute a vilatin f relevant lcal securities laws. The Presentatin is issued slely t and directed at: (i) persns wh have prfessinal experience in matters relating t investments falling within article 19(5) f the Financial Services and Markets Act 2000 (Financial Prmtin) Order 2005 (the Order ) and are investment prfessinals falling within the meaning f the Order; and (ii) high net wrth entities falling within article 49(2)(a) t (d) f the Order. This dcument is exempt frm the general restrictin n the cmmunicatin f invitatins r inducements t enter int investment activity and has therefre nt been apprved by an authrised persn as wuld therwise be required by sectin 21 f the Financial Services and Markets Act 2000 ( FSMA ). It is a cnditin f yur receiving the Presentatin Materials that yu fall within, and yu warrant and undertake t the Cmpany that: 1. yu fall within ne f the categries f persns described abve; 4. yu will nt frward, reprduce r therwise disclse the cntents f this dcument t any persn in cntraventin f FSMA r any ther applicable law r regulatin r t any persn in a Prhibited Territry. The Presentatin shuld nt be cpied, distributed r passed n, directly r in directly, t any ther persn. The Presentatin cntains nly a synpsis f mre detailed infrmatin available in relatin t the matters described in it and accrdingly n reliance may be placed fr any purpse whatsever n the sufficiency r cmpleteness f such infrmatin and t d s culd ptentially expse yu t a significant risk f lsing all f any investment made by yu. N reliance shuld be placed n the infrmatin and n representatin r warranty (express r implied) is made by the Cmpany, any f its directrs r emplyees r any ther persn, and, save in respect t fraud, n liability whatsever is accepted by any such persn, in relatin theret. The statements cntained in this dcument, such as may, will, shuld, expect, anticipate, estimate, intend, cntinue, aiming and believe and ther similar expressins are frward-lking statements and nt histrical facts. Due t varius risks, uncertainties and assumptins, actual events r results r the actual perfrmance f the Cmpany may differ materially frm thse reflected in r cntemplated by such frward-lking statements. Past perfrmance, targeted perfrmance and prjected perfrmance are nt reliable indicatrs f future results and there can be n assurance that targeted r prjected returns will be achieved. The value f any investment made by an investr can g dwn as well as up and an investr may lse its entire investment. 2. yu have read, agree t and will cmply with the terms f this disclaimer; 3. yu are nt resident in, r a citizen f, a Prhibited Territry; and 2

3 OVERVIEW A leading nline perfrmance marketing cmpany Attracting paying users frm multiple nline & mbile channels and direct them t nline businesses in return fr perfrmance based payment mdels Strng track recrd f prfitable grwth and cash generatin Successful diversificatin strategy adding skills and client base in additinal verticals and gegraphies Significant market pprtunity acrss multiple verticals 2017 Perfrmance $137.6 M Revenues Since IPO $44.2 M Dividends $47.1 M Adj EBITDA $39.3 M Prfit befre tax $113.5 M Investments in tech and acquisitins 3

4 OUR BUSINESS MODEL Attracting ptential users thrugh ur publishing assets and directing t ur custmers Publishing 46% Media 48% Online users: Web, mbile, scial, Cmplimentary Partners Netwrking Appraching ptential users thrugh psting ads n different platfrms and directing t ur custmers Perfrmance based payment Lifetime Revenue share (50% f revenues) / CPA / CPI / 4

5 2017 Business prgress 5

6 2017 HIGHLIGHTS Strategic prgress Entered the persnal finance sectr via tw strategic acquisitins Acquired ClicksMb, a mbile perfrmance-based user acquisitin platfrm, prviding expertise in user acquisitin fr mbile apps and games Cmpleted the acquisitin f Securethughts, a US cyber security cmparisn website Cmpleted the acquisitin f pnturi bune, a Rmanian netwrk, leveraging the grup s affiliatin license in a grwing regulated market Cntinued develpment f the Grup s prprietary systems fr imprved peratins and efficiencies Revenues 150 Grss Prfit 80 Adjusted EBITDA % +37% %

7 PERSONAL FINANCE EXPANSION Persnal finance sectr is a strategic grwth engine Acquired Greedyrates, a leading Canadian credit card cmparisn website and Mneyunder30.cm, a US financial services website Further grwth pprtunities include expanding int additinal persnal finance prducts (e.g. lans, banks,.) and cuntries The credit card and payment card markets cntinue t grw, with prjected CAGR f purchase transactins by credit cards (1) f 4.52% in Canada and 6.36% in the US fr 2014 t 2024 In February 2018 agreed terms fr the acquisitin f three persnal finance websites based in the US fr a ttal cnsideratin f $5.15 millin (1) Surce - The Nielsn reprt Purchase transactins are payments f gds and services generated by general purpse payment cards 7

8 MARKET DYNAMICS: REGULATION Enhanced regulatin in 2017 acrss the nline gambling industry in regins such as in Australia, Germany, UK (ad restrictins) as well as new regulatin in thers (US, Prtugal) The persnal finance sectr has clear instructins fr ads and prmtin in the different jurisdictins Further develpments in the nline industry include privacy prtectin, ad restrictins, prtecting cntent rights, etc. In the gambling space increased regulatin presents the Grup with bth challenges and pprtunities XLM is well psitined as a leader in the industry, with strng infrastructure and peratins, t perate accrding t the different guidelines acrss multiple territries and gain advantages in access t newly regulated markets 8

9 THE FUTURE OF ONLINE MARKETING Grwth f Internet advertising revenues Wrldwide digital ad spending will reach $ billin in 2017, representing 38.3% f ttal paid media utlays. This frmat is expected t see duble-digit grwth thrugh at least 2020 Glbal advertising expenditure in scial media will grw 72% between 2016 and 2019, rising frm US$29bn t US$50bn Online gambling and scial gaming market Demand fr scial games cntinues t grw, expected CAGR f 14.96% fr The glbal nline gambling market is expected t grw at a CAGR f ver 9% t exceed USD 60 billin by 2020 Financial services market The credit card and payment card markets cntinue t grw with prprtin f revenue attributed as digital sales revenue in banking expected t increase frm 21% in 2015 t 46% in 2020 Surces: H2 Gambling Capital, emarketer, Gartner, ZenithOptimedia, Technavi, IAB 9

10 Financial Results 10

11 STRONG FINANCIAL TRACK RECORD Adjusted EBITDA ($ m) Revenues ($ m) $160.0 $140.0 $137.6 $120.0 $100.0 $80.0 $89.2 $103.6 $60.0 $50.7 $40.0 $20.0 $0.0 $11.2 Dividends since IPO ($ m) $20.9 $26.1 $34.5 $4.0 $8.8 $12.5 $13.3 $ Emplyees: 40 Main fcus: pker and casin Emplyees: 40 Main fcus: pker and casin Emplyees: 97 Main fcus: expansin Emplyees: 120 Main fcus: expansin in EU & Nrth America Emplyees: 197 Main fcus: IPO, M&A $28.5 Emplyees: 270 Main fcus: Technlgy, M&A $ Emplyees: 327 Main fcus: diversificatin $47.1 Emplyees: 411 Main fcus: cntinued diversificatin 11

12 INCOME STATEMENT Item (Thusands $) FY 2017 FY 2016 change Revenues 137, ,605 33% Cst f revenues 64,487 50,282 28% Grss Prfit 73,145 53,323 37% Operating Expenses 32,376 23,226 39% Operating Prfit 40,769 30,097 35% Ttal adjusted EBITDA* 47,120 34,617 36% % Adj. EBITDA 34% 33% Finance incme (expenses), net (1,424) 903 Prfit Befre Taxes 39,345 31,000 27% Taxes (frm Incme) 7,474 5,416 38% Net Prfit 31,871 25,584 25% Earnings Per Share % *Earnings befre interest, taxes, depreciatin, amrtizatin, impairment and excluding share based payments. 12

13 SEGMENT PERFORMANCE PUBLISHING Prfit up 37% MEDIA Prfit up 39% PARTNER NETWORK Prfit up 22% $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 $23,965 $18,345 $30,297 $46,057 $23,855 $38,384 $62,894 $50,309 77% 79% 83% 80% $70, % $60, % $50,000 $40,000 $30,000 $20,000 $10,000 $0 $20,632 $8,548 $45,777 $47,645 $15,411 $13,779 $66,428 $19,982 41% 34% 29% 30% $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 $6,123 $13,145 $9,903 $8,310 $1,810 $1,160 $1,423 $683 11% 14% 12% 17% Revenues Direct Prfit Revenues Direct Prfit Revenues Direct Prfit 13

14 CASH FLOW STATEMENT Net incme 31,871 25,584 Depreciatin, amrtisatin and impairment 5,932 3,878 Cst f share-based payment Changes in Wrking Capital 5,432 2,871 Taxes paid, net (3,849) (5,710) Finance (incme) expense and exchange differences n cash 1,268 (317) Cash Flw frm Operating Activities 41,073 26,952 Financing Activities Dividend paid t equity hlders f the Cmpany (15,505) (12,362) Acquisitin f nn-cntrlling interests (2,250) - Dividend paid t nn-cntrlling interests (1,804) (1,805) Exercise f ptins 1,205 1,546 Receipt f lng-term lan frm bank 5,000 - Net cash used in financing activities (13,354) (12,621) Investing Activities Purchase f prperty and equipment, net (388) (479) Payment fr acquired business (5,100) - Payment f cntingent cnsideratin in respect f acquired cmpany - (5,500) Acquisitin f dmains, websites, technlgy (16,160) (6,742) Payment n accunt f Greedyrates - (9,300) Financial investments, net (1,295) 4,633 Cash Flw fr investing activities (22,943) (17,389) Cash and shrt term investments at the end f the perid 43,277 35,186 14

15 BALANCE SHEET 31 DECEMBER 2017 $ ' Current assets: Cash and shrt term investments 43,277 35,186 Trade receivables 18,950 17,075 Other accunts receivable 4,665 3,463 Financial derivatives 200 1,002 Ttal current assets 67,092 56,726 Nn-current assets: Lng term investments Gdwill 30,052 26,302 Intangible assets 54,347 32,687 Deferred taxes Other assets Prperty and equipment 1,230 1,229 Depsit fr acquisitin f websites - 9,300 Ttal nn-current assets 86,186 69,154 Ttal Assets 154, , Current liabilities: Trade payables 9,813 9,274 Current maturity f lng-term bank lan 2,500 - Financial derivatives 1,425 - Other liabilities and accunts payable 19,545 14,196 Ttal current liabilities 33,283 23,470 Nn-current liabilities Lng- term bank lan 2,500 - Taxes 1,825 - Deferred taxes Other liabilities Ttal Nn-current liabilities 4, Equity Share premium 68,417 66,812 Capital reserves (1,218) 702 Retained earnings 49,167 34,349 Nn cntrlling interests 291 1,422 Ttal equity 116, ,285 Ttal Equity & Liabilities 154, ,109 15

16 Grwth Strategy Our stated strategy is built n the fllwing three pillars: Diversificatin Technlgy M&A 16

17 GROWTH STRATEGY ONGOING DIVERSIFICATION AND INVESTMENTS Cntinue t expand the Grup s peratinal reach int new gegraphies and verticals: Drive rganic grwth acrss all segments thrugh investments and ecnmies f scale Enter new verticals and gegraphies in rganic and acquisitive activities Media: Leverage demand fr high value users within US and Asian markets Publishing: Cntinue t grw market share in current territries and newer nes 17

18 REVENUE DIVERSIFICATION Revenues diversificatin users gegraphy Revenues diversificatin prducts Revenues diversificatin custmers Revenues Per business mdel Scandinavia, 28% Other Eurpe, 30% Nrth America, 22% Asia, 8% Oceania, 3% Other Territries, 10% Gambling, 64% Mbile Applicatins, 19% Other, 17% Other Custmers (<5% Each), 76% A, 8% B, 6% C, 5% D, 5% Revshare, 48% CPI, 24% Other, 28% 2014: Scandinavia 63% 2014: Gambling 83% 2014: A 15% 2017 Revenues 18

19 GROWTH STRATEGY - TECHNOLOGY Cntinue develping ur technlgy infrastructure t accelerate ur grwth and prfitability thrugh efficiency and further enhance ur cmpetitive edge Tracking Slutins Tracks the sales funnel frm different surces fr analysis and ptimizatin Business Intelligence Unified Data warehuse t cllect data frm thusands f surces, prcess and analyze fr imprved perfrmance Palcn A cnslidated management system acrss all websites, fr dynamic integratin and deplyment and imprved cnversin Rampix Centralized management f scial campaigns, unique targeting methdlgies 19

20 GROWTH STRATEGY - M&A Execute acquisitins which bth strengthen and expand the Grup s peratinal ftprint Areas f fcus Publishing assets: cntinue t buy blt n websites, integrate them int XLM s existing infrastructure and technlgy, enjying benefits f scale Vertical expansin Gegraphy expansin Well rganized prcess t supprt nging M&A s Active pipeline f pprtunities driven by highly fragmented market Rbust due diligence prcess t select nly the nes that represent the very best fit fr ur business Financial strength and cash balance supprts deal executin Dedicated prfesstinal fcal pints acrss the rganizatin 20

21 UNRIVALLED PEDIGREE IN ACQUISITIVE GROWTH Acquisitin f High ptential dmain in Nrth America Acquisitin f UK-based sprts betting affiliate site Majrity acquisitin f Acquisitin f Dmains, websites and ther related assets Acquisitin f Acquisitin f Acquisitin f Finnish Netwrk Als acquired a pker website USD 0.3m and 0.1m, respectively USD 6.7m Israel-based digital marketing cmpany USD 7.3m USD 3.2m US-fcused mbile perfrmance marketing cmpany USD 5.1m Cyber security cmparisn website USD 2m Finnish gambling related infrmatinal websites Up t EUR 15m IPO Mar 2014 Apr Jul 2014 Aug 2014 Sep 2014 Jun Jan 2017 Feb Apr 2017 Jun 2017 Aug 2017 Jan Feb 2018 Acquisitin f Scandinavian netwrk Extended reach int the regulated Danish market USD 2.3m Acquisitin f User acquisitin fr mbile games USD 19m Acquisitin f UK mbile market and U.S. Market assets Expansin in the UK mbile market USD 7.4m (excluding the June acquisitin) Acquisitin f Canada-based prtal fr credit card cmparisn USD 9.3m Acquisitin f Rmanian netwrk Expanding gegraphic reach and diversificatin USD 1m Acquisitin f US-fcused website fr financial services USD 7m Acquisitin f Persnal finance websites in the US USD 5.1m Slid histry f earnings accretive acquisitins 21

22 SUMMARY AND OUTLOOK 2017 Prgress Strng rganic grwth Executing n strategic acquisitins Cntinued develpment f in-huse systems Fundatins laid fr future grwth Sustainable rganic grwth Leading market psitin with strng ft in newly regulated markets Persnal finance sectr represent significant grwth pprtunities fr the cming years Strng balance sheet and recent raise supprts further M&As Technlgy investments and staff are in place t supprt expansin fr media as well as cntinue rganic grwth in publishing 22

23 Any Questins? 23

24 USD 000 PUBLISHING XLMedia wns ver 2,300 infrmatinal websites, mbile sites and apps engaging millins f users in 18 languages Our infrmatinal websites attract ptential custmers and refer them t nline and mbile custmers Sme assets rank fr high intent keywrds, thers are being ptimized t reach these psitins Palcn is ur a prprietary cntent management system fr centralised management f websites Additinal assets are acquired and then integrated fr imprved perfrmance $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 XLMedia s prtfli is the utcme f years f investment $0 $18,840 $14,922 $14,234 $10,188 $23,965 $18,345 $30,297 $23,855 $46,057 $38,384 $62,894 $50,309 68% 76% 77% 79% 83% 80% Revenues Direct Prfit 24

25 USD 000 MEDIA XLMedia acts as an advertiser running thusands f simultaneus self-funded campaigns, in different verticals. Custmers pay based n perfrmance XL deplys prprietary technlgy t manage media campaigns acrss all ad units: scial, mbile, web, Recent acquisitin f ClicksMb strengthens mbile capabilities $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 $66,428 $45,777 $47,645 $20,632 $19,982 $15,411 $13,779 $8,183 $10,071 $5,565 $5,583 $8,548 68% 55% 41% 34% 29% 30% Revenues Direct Prfit 25

26 USER S JOURNEY Users search fr specific infrmatin User search results High ranking XLMedia prperty Users directed t client Revshare / CPA / Users brwse web/mbile/scial/ XLMedia psts ads Users directed t client 26

27 OPTIMIZATION CYCLE Quality cntent Asset ptimisatin Place Brands Send users Target Big Data Prprietary tracking, data and analysis tls Gather data Send users XLM self-funded campaigns Bid n ads Place Brands 27

28 USD 000 PARTNER NETWORK Manage independent affiliate partners wh drive traffic thrugh XLMedia XLMedia prvides affiliates with supprt and ne-stp-shp t service multiple peratrs Affiliates access XLMedia s prprietary system aggregating statistics and prmtins frm many peratrs cmpleted a review prcess f ur partner base in 2016 and implemented a mre stringent sign up and peratins criteria which resulted in a reductin in revenues $14,000 $13,145 $12,000 $10,000 $8,000 $6,000 $5,597 $6,123 $9,903 $8,310 $4,000 $3,030 $2,000 $0 $1,810 $1,160 $1,423 $484 $632 $683 16% 11% 11% 14% 12% 17% Revenues Direct Prfit 28

29 EXPERIENCED SENIOR LEADERSHIP INBAL LAVI CEO (ISRAEL) 13 years' experience in the nline marketing industry Diverse backgrund and expertise in marketing strategy, peratins and P&L management, including heading the 888pker business frm December 2011 t January 2014 LIAT HELLMAN CFO (ISRAEL) Over 20 years experience in publicly traded cmpanies Serves as CFO (Israel) f the cmpany since its inceptin and is respnsible fr financial infrastructure CHRIS BELL NON-EXECUTIVE CHAIRMAN ORY WEIHS FOUNDER & GROUP CEO Entrepreneur with 15 years experience in perfrmancebased marketing Currently fcused n business develpment and strategy CEO f the cmpany since inceptin YEHUDA DAHAN GROUP CFO & DIRECTOR Over 15 years experience in accunting and finance Previusly CFO fr Barinbim Investment Grup and Head Cntrller f Milmr Grup Frmer CEO f Ladbrkes between 2001 and 2010 Has ver 20 years experience in the gambling sectr Currently nn-executive Directr at Rank Grup plc and Spirit plc and a member f the Respnsible Gambling Strategy bard 29