Tradedoubler Interim Report January-September 2020

The third quarter July - September 2020

• Net sales amounted to SEK 285 M (280) an increase of 2% or 5% adjusted for changes in exchange rates compared to the same period last year.
• Gross profit was SEK 59 M (62), a decrease of -4% and -1% adjusted for changes in exchange rates. Gross margin was 20.7% (22.0).
• Operating costs excluding depreciation and change related items were SEK 42M (48), a decrease of -14% or -10% adjusted for changes in exchange rates.
• EBITDA amounted to SEK 16 M (12). Adjusted for change related items, EBITDA was SEK 17 M (13).
• Capitalised expenses for product development were SEK 6 M (5).
• Cash flow from operating activities was SEK 15 M (-37) and the sum of cash and interest-bearing financial assets was SEK 56 M (25) at the end of the third quarter. Net cash in the third quarter increased by SEK 6 M to SEK -74 M.
• Earnings per share, before and after dilution were SEK -0.07 (-0.14).
• The tax authorities in the United Kingdom and Sweden have during the third quarter 2020 reached a mutual agreement on the double taxation procedure which is described in the 2019 annual report on page 28. The result of the agreement is that the tax adjustment is divided between the two jurisdictions in an equal proportion. Tradedoubler has in previous periods booked a tax receivable of SEK 14 M related to this issue, but based on a final agreement between competent authorities a cash tax refund around SEK 6 M will be received by the parent company, while the UK subsidiary is expected to receive a cash tax refund of SEK 1 M. The remainder will be rewarded as unused tax credit. This has resulted in a write-down of approximately SEK 7 M during the third quarter. The revised declarations will be submitted during the fourth quarter. The carrying amounts are based on the most probable result.

The interim period January - September 2020

• Net sales amounted to SEK 877 M (876), which is in line with the comparing period or -1% adjusted for changes in exchange rates compared to the same period last year.
• Gross profit was SEK 187 M (193), a decrease of -3% and -3% adjusted for changes in exchange rates. Gross margin was 21.3% (22.0).
• Operating costs excluding depreciation and change related items were SEK 141M (157), a decrease of -10% or -9% adjusted for changes in exchange rates.
• EBITDA amounted to SEK 45 M (32). Adjusted for change related items, EBITDA was SEK 46 M (36).
• Capitalised expenses for product development were SEK 17 M (16).
• Cash flow from operating activities was SEK 40 M (11) and the sum of cash and interest-bearing financial assets was SEK 56 M (25) at the end of the interim period. Net cash in the interim period increased by SEK 12 M to SEK -74 M.
• Earnings per share, before and after dilution were SEK -0.06 (-0.35).
• The outbreak of covid-19 has had a mixed impact on the results of the interim period. Certain segments and markets have benefited from the situation while mainly the travel segment has declined sharply. Group management has taken an active role in controlling the company’s costs as a response to the covid-19 crisis which has led to improved profitability compared to last year. The impact of the covid-19 crisis going forward is hard to estimate as most segments of the business are affected. The fourth quarter will like previous periods be very dependent on macroeconomic circumstances which may change daily.

CEO Matthias Stadelmeyer’s comments

“Tradedoubler´s results in the third quarter 2020 are to a large extent influenced by the covid-19 crisis. 

How our clients are impacted by the crisis is reflected as well in the performance of their programs and campaigns at Tradedoubler. Travel programs and campaigns are significantly reduced as well as all entertainment related businesses. Ecommerce related activities are growing largely resulting in 5% revenue growth in Q3 2020.

The slightly reduced margin of 20.7% is related to a lower share of campaigns business in our portfolio which is linked to the crisis as well. Clients invest more budget into pure performance activities and less into exposure campaigns which usually have a higher margin. 

Costs remain lower and EBITDA in Q3 therefore increased again to 17m SEK with an improved EBITDA margin of 6.1%. 

The crisis will continue to impact our business in the coming quarters. It is uncertain for us to what extent as the affect will depend largely on macro-economic circumstances.

At the end of October we launched TD Grow, a smart self-service affiliate platform for smaller and medium sized businesses. This new product complements our existing serviced solutions and addresses a new target group for Tradedoubler.  After a successful pre-launch in July clients have created already more than 200 affiliate programs on this platform.”

Contact information

 Matthias Stadelmeyer, President and CEO, telephone +46 8 405 08 00   
Viktor Wågström, CFO, telephone +46 8 405 08 00   
E-mail: ir@tradedoubler.com

Other information

This information is information that Tradedoubler AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CET on 6 November 2020. Numerical data in brackets refers to the corresponding periods in 2019 unless otherwise stated. Rounding off differences may arise.