Interim Report Q3, 2022: Strong offer in challenging times

Speqta AB (publ) interim report for the period January 1–September 30, 2022 is published and available on:
https://speqta.com/en/investors/financial-reports

During the fourth quarter of 2021, Eone Oy (“Rahalaitos”) was divested and during the second quarter of 2022, Mytaste Food & Beverage AB (“Vinklubben”) and the business in Speqta Affilijet AB together with Leads on Top AB (“Affilijet”) were also divested. This means that the income statements for 2022 and 2021, in the report, have been recalculated in accordance with current Accounting Principles and therefore exclude divested operations and which are thus reported separately below. Financial information and comments about the operations in this report focus on continuing operations, unless otherwise stated.

Third quarter summary

• Revenues during the third quarter amounted to KSEK 3 246 (5 636).* The decrease is explained by the shift in focus from Shopello to Bidbrain which has a higher margin and long-term potential.
• EBITDA amounted to KSEK -6 802 (-4 377). The EBITDA margin was -210% (-78).
• Earnings per share (including divested operations) amounted to SEK -0.37 / share (3.60).
• Cash flow from operating activities (including divested operations) amounted to KSEK -8 532 (-1 746).
• Cash and cash equivalents at the end of the period amounted to KSEK 84 415 (20 666).
• Paying Bidbrain stores increased to 19, from 14 in the previous quarter.
• During the quarter the remaining earnout debt to the founders of Rahalaitos was written of with an impact of KSEK 6 132 via profit from divested operations.
• Bidbrain launched a new effective campaign management tool that enables e-retailers to easily set different budgets and ROAS targets on different parts of their assortment, enabling e-retailers to get more sales at the same advertising cost.

Events after the quarter

• Rahalaitos have had a strong performance in a challenging market which has increased the likelihood of making parts of the earnout. October, which was the last month of the measurement period, has been much stronger than previous months and the final earnout is estimated to be between MEUR 2.5–3.5. The earnout is subject to approval by the parties in the transaction. The approval and potential payment is expected to take place by January 2023 at the latest.
• Speqta has entered into an agreement with Redeye AB regarding the position of Certified Adviser starting December 1, 2022.

CEO Comment
In these challenging times, our offer to our e-retail customers is more relevant than ever. The outside world is becoming increasingly uncertain, with reduced purchasing power among consumers, combined with increased supplier and shipping costs. Our client group is wary of taking on new projects and therefore challenging for us to approach, at the same time we see it as an opportunity, as our tool - Bidbrain, clearly focuses on profitable growth and better cost control for e-retailers.

During the quarter, Bidbrain has become smarter and more scalable. The algorithms are continuously refined and focus on delivering even better results to our current and prospective clients. We have also launched a new functionality, which makes it easy for e-retailers to set different ROAS targets (Return On Ad Spend) on different parts of their assortment. 
 
I would like to highlight an example of a customer, that is now systematically expanding the collaboration with us. Craft, that sells sportswear, started using Bidbrain for its Swedish store in connection with our launch in 2021, and has now chosen to expand the collaboration to be able to take over more markets. Behind the decision lies both their increased sales by 63%, compared to the previous year, and a good ROAS, as well as the fact that Bidbrain contributed to an increase in traffic to their site, by 124%.

In Finland, we can conclude that part of the earnout, from the sale of Rahalaitos, will most likely accrue to Speqta. In recent months, Rahalaitos has performed well and has strengthened its position despite a tough market. At the end of the third quarter, 11 out of 12 months of the earnout period had passed, and if the measurement period were on 11 months, this would correspond to MEUR 1.77 in additional purchase price. October was the last month of the measurement period, and despite a challenging month, marketwise, Rahalaitos has shown continued strong momentum. We are ending the period better than previous months and total earnout is expected to be between MEUR 2.5–3.5. The parties of the transactions shall now agree upon the calculations and the amount will be determined and paid to us, no later than January 2023, which will further strengthen Speqta financially.

The journey continues as planned, developing our AI-based SaaS solution and with our competent team, focus on continuing to grow Bidbrain. We are proud and excited to be involved in building the future of e-commerce. At the same time, in these uncertain times, it is comforting that we have a substantial amount of cash and no interest bearing debts. We are a funded startup business with a strong and attractive offer for e-retailers.

Fredrik Lindros, CEO Speqta AB (publ)

Financial calendar
Year-end report 2022: February 16, 2023
Annual report 2022: April 20, 2023
Interim report Q1 2023: May 11, 2023
Annual General Meeting 2023: May 16, 2023
Interim report Q2 2023: August 24, 2023
Interim report Q3 2023: November 9, 2023
Year-end report 2023: February 22, 2024 

This information is such information that Speqta AB (publ) is obliged to publish in accordance with the EU Market Abuse Regulation. The information was submitted, through the agency of the contact person below, for publication on November 10, 2022 at 07:00 CET.

Contact:
Fredrik Lindros
CEO Speqta AB (publ)
fredrik.lindros@speqta.com
+46 723 10 66 66
www.speqta.com

About Speqta
Speqta is an Adtech company that offers traffic generating services in eCommerce using data and AI. The company has two services: The Affiliate network Shopello and the SaaS service Bidbrain, and is listed on Nasdaq First North Premier Growth Market in Stockholm under the ticker "SPEQT". The company's Certified Adviser is Västra Hamnen Corporate Finance AB, telephone number: +46 40 20 02 50, e-mail: ca@vhcorp.se.