Tradedoubler year-end report January - December 2015

Positive signs in underlying core business

THE FOURTH QUARTER OCTOBER - DECEMBER 2015

• Net sales amounted to SEK 400 M (452). Net sales excluding change related items were SEK 400 M (462), a decrease of 14% or 16% adjusted for changes in exchange rates.
• Gross profit excluding change related items was SEK 85 M (96), a decrease of 12% or 13% adjusted for changes in FX rates. Gross margin excluding change related items increased to 21.2% (20.8%).
• Operating costs excluding depreciation and change related items were SEK 90 M (85). This was an increase of 7% or 4% adjusted for changes in exchange rates.
• EBITDA amounted to SEK -17 M (-2). Excluding change related items EBITDA was SEK -6 M (12).
• Capitalised expenses were SEK 11 M (7). The increase was due to product development which was in line with strategy.
• Cash flow from operating activities was SEK 52 M (-22) and the sum of cash and interest-bearing financial assets was SEK 347 M (372) at the end of 2015. Net cash in the fourth quarter increased by SEK 36 M, partly due to temporary effects, to SEK 100 M.
• A writedown of SEK -72 M (-60) in goodwill was incurred, mainly related to France. Goodwill at year-end was SEK 246 M (324).
• Earnings per share, before and after dilution were SEK -3.33 (-1.79).
• As previously communicated, the loss of a major international client reduced net sales in 2015. This had a significant impact on  revenue and gross profit during the third and fourth quarter. Excluding this client the trend of the year-on-year gross profit decline in Tradedoubler’s core business improved and was smaller compared to recent quarters.
• As part of ongoing efficiency improvements Tradedoubler announced a reduction of permanent staff by around ten employees.
• Tomas Ljunglöf, CFO of Tradedoubler, has resigned and will leave the company at the latest in August 2016.
• In March 2015 the media company Reworld Media S.A., headquartered in Paris (France) acquired 19.1% of Tradedoubler’s shares. In December 2015 Reworld Media S.A. agreed to acquire additional shares from Henrik Kvick AB and now owns 29.95% of Tradedoubler.
   

THE FULL YEAR 2015

• Net sales were SEK 1,624 M (1,733). Net sales excluding change related items amounted to SEK 1,629 M (1,743) a decrease of 7% or 12% adjusted for changes in exchange rates.  
• Gross profit excluding change related items was SEK 336 M (379), a decrease of 11% or 17% adjusted for changes in exchange rates. Gross margin excluding change related items declined to 20.7% (21.7) mainly due to price pressure within affiliate.
• Operating costs, excluding depreciation and change related items, were SEK 348 M (339). This was an increase of 3% or a decrease of 2% adjusted for changes in exchange rates.
• EBITDA amounted to SEK -36 M (20). EBITDA adjusted for change related items was SEK -11 M (39).
• Cash flow from operating activities amounted to SEK 15 M (-110).
• Earnings per share, before and after dilution, were SEK -4.48 (-1.95).
• In January 2015 Tradedoubler finalised its Nordic regional structure and closed its office in Norway with limited one off costs.
• Also in January Tradedoubler acquired the German technology company Adnologies with limited financial effects.
• A new share issue of 3,120,000 C-shares relating to a long-term incentive programme for management was conducted.
• The Board proposes that no dividend should be declared for 2015. No dividend was declared for 2014.

CEO MATTHIAS STADELMEYER’S COMMENTS ON THE FOURTH QUARTER OF 2015

“In the fourth quarter the underlying gross profit trend in our core business, Performance Marketing, improved versus the year-on-year trend of the previous quarters. Gross profit grew in several markets and we are at the same time working on the challenges in France and Switzerland with first positive signs.

Our enhanced Performance Marketing solution focuses on bringing targeted new customers to our clients’ businesses. We released an initial offering in Germany and the UK during the fourth quarter and will have a market launch of a more sophisticated and scalable version in the second quarter 2016.

Other recent product launches are gaining traction with clients and delivering results. These include Cookieless Tracking, which tracks sales even where a cookie is not present, ensuring that our publishers are rewarded for more of the sales they gene-rate. User Journey Reporting gives our clients new under-standing of the complete online journeys of their customers.  Coupled with  ADAPT, our leading business intelligence tool, these are the tools that clients need to make sense of complex data and optimise their performance marketing.

We are exploring new ways of integrating with partners and in January we announced a partnership with Payoneer, a leading international online payment company, that enables us to make publisher payments in local currency, Euros or US$ in 200 countries. This simplifies the publisher payment process and strengthens our global capabilities.

During 2015 we strengthened our sales and business development teams with some new senior-level hires. In January this year we streamlined the Group Management Team to ensure focus on key priorities, including new initiatives to maximise gross profit, increase efficiency and roll out new solutions.

Our programme of customer-focused product launches, coupled with a streamlined and more efficient management structure, mean that we are well positioned to deliver an improved performance during 2016.”

Presentation
This year-end report will be presented at a teleconference on the 5th of February 2016 at 10.00 a.m. CET. To follow the presentation, please dial (SE) +46 8 566 425 09, (UK) +44 203 008 98 13, (US) +1 855 831 59 47 or (FR) +33 170 721 541. The presentation may also be followed via webcast using the link:http://financials.tradedoubler.com/en-gb/investorrelations

Other
Tradedoubler discloses the information provided herein pursuant to the Swedish Securities Markets Act. The information was released for publication on the 5th of February 2016 at 08.00 a.m. CET. Numerical data in brackets refers to the corresponding periods in 2014 unless otherwise stated. Rounding off differences may arise.

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