The reason for this information being released ahead of the results for the period January - September 2009, due on November 3, 2009, is that net revenue and operating profit is believed to differ from the market expectations, even though TradeDoubler has not provided forecasts. The Board of Directors has therefore decided to release provisional results for the third quarter as shown below. The final report for January - September 2009, which will be reviewed by the Company's auditor, will be published on November 3 at 08:00 CET.
Today, Monday October 26, at 10:00 CET, a press- and analyst meeting will be held at TradeDoubler's offices at Sveavägen 20, Stockholm. For further information and invitation, please see below and on the company's homepage.

 

The operating results for the seasonally weak third quarter 2009 were to a certain extent negatively affected by lower gross profit of about seven percent and positive exchange rate differences of SEK 3.3 million, but primarily by non-recurring items of SEK 61.6 million and a goodwill write down of SEK 152.4 million.

 

Costs for non-recurring items relate to provisions for unutilized office space in London of SEK 30 million and bad debt of SEK 7 million. The costs cover adjustments for reconciliation differences between the Enterprise Resource Planning (ERP) system and the general ledger as well as other items amounting to a total of SEK 24.6 million.

 

As an effect of a weak development and a more conservative view of the future development, the goodwill value, relating to the 2007 acquisition of the IMW Group in the UK, has been written down by SEK 152.4 million following an impairment test.

 

Gross profit, excluding non-recurring items is around seven percent lower than in the same quarter last year and has been affected by the continuing economic recession, primarily in the UK. A number of measures have been taken since the beginning of the year to reduce the company's costs. Thus far, the cost base in the third quarter, after adjustments for exchange rate differences and non-recurring items, has been reduced by 27 percent compared to the fourth quarter 2008, and by 18 percent compared to the third quarter 2008. The ongoing efforts to reduce costs will continue.

 

"Despite a weak third quarter, TradeDoubler's market position remains very strong. We are the market leader within performance-based digital marketing in all European markets except Germany. We have around 1,700 customers, the 25 largest of which account for around 30 percent of our revenue. With our broad market offering and with the planned equity injection we are well positioned to pursue further expansion," says Örjan Frid, President and CEO.

Internal guidelines and control

The Board of Directors has initiated a process to strengthen the internal guidelines and control of the operations and processes including financial reporting. The process is headed by the new CFO Mr Thord Norberg, hired in August 2009, who reports the progress to the Audit Committee on a regular basis.

 

The Board of Directors has given the Company's external auditor, Ernst & Young, appointed at the Annual General Meeting 2009, the assignment to review the report for the period January - September 2009.

 

 

As the business has developed below expectations in combination with a tight debt amortisation schedule, the financial position has become increasingly constrained during the autumn. During September 2009, external debt financing has been increased by a bridge loan of SEK 30 million conditional upon that the company's long-term financing be resolved by no later than 31 January 2010.

 

The Board of Directors will within short propose a rights issue with preferential rights for existing shareholders amounting to around SEK 350 million. Three of the largest shareholders, Alecta, the Fourth Swedish National Pension Fund and AMF have each declared their intention to subscribe for at least their pro rata share, in total equivalent to just above 30 percent. The ambition is that the rights issue will be completed before the end of January 2010. SEB Enskilda has been appointed financial advisor and Hannes Snellman legal advisor in relation to the planned rights issue.

 

The Company has earlier communicated the following regarding the financial position: In the 2008 Annual Report it is stated that "TradeDoubler intends to amortize its external loans during 2009. The Group's cash flow will primarily be utilized for this purpose to minimize interest expense." In the first quarter report 2009 it is stated that "During the period, available credit facilities with banks were reduced by SEK 80.0 million to SEK 207.5 million, while at the same time, the company raised a subordinated loan in an amount of SEK 50.0 million. The subordinated loan extends for three years and ensures that the Group has access to the necessary funding for the foreseeable future."

For further information contact:
Örjan Frid, President and CEO, tel.+46-8-405 08 00, orjan.frid@tradedoubler.com
Thord Norberg, CFO, tel.+46-8-405 08 27, thord.norberg@tradedoubler.com

About TradeDoubler
TradeDoubler is an international digital marketing company offering a range of performance-based marketing solutions. TradeDoubler's products and services provide companies with the tools and expertise to drive results online whether they are looking to generate sales, leads or traffic or drive brand awareness. Headquartered in Stockholm, Sweden, the company boasts a unique global reach spanning 19 countries in Europe and Japan. With a breadth of expertise across multiple industry sectors and a network of more than 128,000 website publishers, TradeDoubler helps deliver results for over 1,700 advertisers around the world. TradeDoubler supplies 32 billion impressions, reaches 149 million unique visitors and generates 10 million leads every month and provides access to more than 76 per cent of the European online audience. Advertisers include Apple Store, Dell, Telia Sonera and Kelkoo. Please visit www.tradedoubler.com for further information.

 

 

Due to the provisional results for the period January - September 2009 are being released ahead of scheduled date, TradeDoubler's (publ) will hold a press- and analyst meeting today at 10:00 CET  at TradeDoubler's office 7th floor at Sveavägen 20, Stockholm.

 

President and CEO Örjan Frid and CFO Thord Norberg will give their comments and answer questions.

 

The presentation will be held in English.

 

To participate through telephone, please call the following numbers:

 

SWE + 46 (0)8 5051 3794

UK +44 (0)20 7806 1967