TIDMXLM
RNS Number : 4636T
XLMedia PLC
30 March 2016
For immediate release 30 March 2016
XLMedia PLC
("XLMedia" or "the Group" or "the Company")
Final results for the year ended 31 December 2015
Strong financial performance underpinning strategic
development
XLMedia (AIM: XLM), a leading provider of digital performance
marketing services, is pleased to announce its final results for
the year ended 31 December 2015.
The Group continued to deliver strong performance during the
year, building on the foundations that it had laid over the past
two years. By setting a clear strategy and focusing on execution,
the Company has continued to deliver in all key areas, namely
revenues and profit growth, investment in technology, and ongoing
diversification of the business. The Board is confident that the
Group remains well positioned to continue this strong growth and to
further develop its business.
Financial highlights
-- Revenues increased 76% to $89.2 million (2014: $50.7 million)
-- Gross profit increased 49% to $41.1 million (2014: $27.6 million)
-- Adjusted EBITDA increased 67% to $28.4 million (2014: $17.0 million)
-- Profit before tax increased 84% to $24.3 million (2014: $13.2 million)
-- Net cash from operating activities increased 68% to $28.4 million (2014: $16.9 million)
-- Net income increased 70% to $20.2 million (2014: $11.9 million)
-- Strong balance sheet with $42.6 million cash and short term investments
Operating highlights
-- Positive impact of acquisitions continues to accelerate profit growth and strategic progress
o Strong performance from Marmar Media acquisition, adding
skills and client base in additional verticals, namely software and
ecommerce
o First phase integration of EDM now completed, second phase
progressing well
o Extension of our network through ongoing bolt on acquisitions
within the Publishing division of mainly UK based websites
-- Ongoing R&D has strengthened the Groups in house
operations and enhanced our analytics capabilities
-- Continued organic growth in all business segments and geographies
The Board continues to remain confident of the Company's ability
to continue to execute and deliver in the key areas and is focussed
on maximising value for shareholders.
Ory Weihs, Chief Executive Officer of XLMedia, commented:
"We are extremely pleased to report another record breaking
year. During 2015 we continued to invest in our technology, systems
and people which are the key drivers for performance and future
growth. We also made significant progress regarding acquisitions,
and successfully diversified our business further.
"Over the last two years we have consistently reported strong
financial performance, invested in organic growth opportunities,
completed several successful earning enhancing acquisitions and
declared $21.25 million in dividends to shareholders.
"We continue as always to maximise value for our shareholders,
both through our ongoing work in developing the business as well as
through the strategic review process which was announced on 26
January 2016.
"The Board would like to thank management and our employees for
the excellent delivery of 2015 results. We look forward to further
progress and achievements in 2016."
Our full annual financial statements are available on our
website at the following address:
http://www.xlmedia.com/company-reports/
For further information, please contact:
XLMedia plc Ory Weihs www.xlmedia.com Tel: 020 8817 5283
Vigo Communications Jeremy Garcia Tel: 020 7830 9700
/ Fiona Henson www.vigocomms.com
Cenkos Securities plc (Nomad Tel: 020 7397 8900
and Joint Broker) Ivonne Cantu
/ Camilla Hume www.cenkos.com
Liberum (Joint Broker) Neil Tel: 020 3100 2000
Patel / Chris Clarke www.liberum.com
Business review
During 2015 we continued to execute our strategic plan and
establish our position as a dominant player in the online and
mobile traffic monetisation arena.
Our strategic plan includes the following key growth
initiatives: broadening our reach to additional geographies and
verticals; developing our technology infrastructure to enable our
growth and competitive edge; and driving organic growth.
We are proud to report progress on executing our plan in all
aspects, which resulted in the delivery of record breaking revenues
and profit in 2015.
Our efforts to accelerate growth through acquisitions have also
progressed well during the year with the following milestones
achieved:
-- Addition of bolt on domains and websites through acquisition,
complementing our publishing asset base and providing access to
additional markets and products. The focus of these additional
assets was for the UK as well as other European markets, and for
diversified verticals. Additional bolt ons were targeted at mobile
traffic in these markets. All of these acquired assets have been
integrated into our publishing division and in house platforms.
-- Completed the first phase of integration of EDM (acquired
September 2014) into the Group during the period and due to EDM's
strong performance in the first year following its acquisition we
decided to waive performance conditions for contingent
consideration to accelerate full integration into the Group. The
Board believes that such integration will help to improve
performance and increase scale which is important as it expects
social and mobile gaming to be a strong growth driver for XLMedia
over the coming years.
-- On 1 July 2015 we announced the acquisition of the majority
stake in Marmar Media, a performance media company for web and
mobile. Marmar Media adds additional know how and scale, as well as
widening the Group's customer base and adding further vertical
diversification.
-- All of the acquired assets and companies are performing in
line with or above management's expectations.
Below is an overview of the progress in execution of our plan
during 2015:
-- Technology infrastructure to enable our growth and competitive edge
o We continued to increase our investment in technology and our
R&D team now has over 50 staff and continues to grow.
o Following the launch of our Palcon system for the management
of publishing assets at the end of 2014, we migrated our major
assets to Palcon. Following migration we have seen continuous
improvement in mobile performance of these websites.
o In the media segment we developed tracking tools and campaign
management infrastructure to enable efficient optimization and
management of campaigns.
o In December 2015 we launched Rampix - EDM's system for
centralized management of social campaigns with unique targeting
methodologies and dashboards.
o We further enhanced our Business Intelligence ("BI")
capabilities to support information gathered from thousands of
information sources, analysed and presented to our campaign
managers for efficient optimization of campaigns.
-- Broaden our reach to additional geographies and verticals,
diversifying our client base and markets
o We successfully broadened our business to new geographies and
products, through organic growth as well as acquisitions
o The acquired websites extended our reach and established our
position in the UK market
o We made our first acquisitions of websites in the financial
services vertical in Europe. We believe there are growth
opportunities within the financial services vertical, where we can
use our online marketing expertise to bring further revenue
growth
o The addition of Marmar Media added more activity in software
and e-commerce verticals
o EDM continues to develop the Group's offering for mobile apps
and social gaming
o Following the Marmar Media acquisition the largest customer in
the group(1) represents 8% of the Group's revenues
-- Continue our organic growth
o The Group continues to deliver strong organic growth in all of
its business segments with the 2015 year-end trading performance
exceeding initial market expectations
o Organic growth continues to be strong in our core Scandinavian
markets, while in other European countries as well as other English
speaking countries we have increased our revenues even faster, with
these countries becoming more dominant in the revenue
distribution
o With the implementation of technology and tools we see
improved performance and organic growth for websites and campaigns.
We expect to continue this trend into 2016 and coming years
Business Segments review
($'000) Partner
Publishing Media Network Total
2015
Revenues 30,297 45,777 13,145 89,219
% of revenues 34% 51% 15% 100%
Direct
profit 23,855 15,411 1,810 41,076
Profit
margin 79% 34% 14% 46%
2014
Revenues 23,965 20,632 6,123 50,720
% of revenues 47% 41% 12% 100%
Direct
profit 18,345 8,548 685 27,578
Profit
margin 76% 41% 11% 54%
-- Publishing
Publishing revenues grew 26% to $30.3 million (2014: $24.0
million). The growth was primarily organic, with some additions
from new assets acquired mainly during the second half the
year.
We invested significant amounts in technology infrastructure to
support the centralised management of our assets and we have seen
improvement in conversions and performance of our assets as a
result, with increased improvement in mobile results.
During 2015 we invested $7.1 million in acquiring new websites
and domains and we plan to continue buying and developing more
assets to further drive our growth.
-- Media
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Media revenues grew 122% to $45.8 million (2014: $20.6 million).
The media segment includes the activity of the Company as well as
EDM acquired in September 2014 and Marmar Media acquired in July
2015. EDM and Marmar Media add diversification of our activity with
additional marketing channels, products and markets. The majority
of revenues from the acquired businesses is derived from the US for
marketing of social games, mobile apps, ecommerce and software.
Marmar Media has contributed $9.1 million to 2015 revenues.
Excluding Marmar Media and the EDM additions (EDM's contribution of
$6.0 in the last 4 months of 2014 compounded annually), organic
growth in the media segment was 28%.
We continue to focus on performance, using our technology to
improve ROI of spend in marketing campaigns.
-- Partner Network
Partner network revenues grew 115% to $13.1 million (2014: $6.1
million). Our partner network remains an important part of our
business, giving us the opportunity to provide marketing services
to our clients which are not currently serviced through our
existing publishing and media networks. All of the partner network
growth is organic, as we continue to attract new partners to join
our network and enjoy the benefits offered to them.
Current Trading and Outlook
Demand for our services has continued across our geographic
footprint and the Group has made a strong start in 2016. We will
continue to seek ways in which to maximize shareholder value at the
same time as continuing to commit to expanding our core offer
through a combination of ongoing investment, product development
and acquisitions.
Financial review
$ millions
2015 2014 Change
==================== ===== ====== =======
Revenues 89.2 50.7 76%
==================== ===== ====== =======
Gross Profit 41.1 27.6 49%
==================== ===== ====== =======
Operating expenses 18.1 13.0 40%
==================== ===== ====== =======
Operating income 23.0 14.2 61%
==================== ===== ====== =======
Adjusted EBITDA 28.5 17.0 68%
==================== ===== ====== =======
Financial income,
net 1.7 (0.8) N/A
==================== ===== ====== =======
Profit Before
Tax 24.3 13.2 84%
==================== ===== ====== =======
2015 has been another year of strong performance for XLMedia.
Revenues for the year were $89.2 million, reflecting 76% growth
compared to the last year. Revenues in 2015 include the acquisition
of Marmar Media, acquired in July 2015, and the consolidation of
EDM, acquired in September 2014, as well as strong organic growth
in all business segments during the period.
Gross profit reached $41.1 million or 46% of revenues,
representing 49% growth compared to last year (2014: $27.6 million,
54%). Over the course of 2015, the media segment has grown to be
the largest segment in XLMedia and generating 51% of FY 15
revenues. As we continue implementing our strategy to further
increase and develop our media business, the Group's revenue mix
will shift further towards media, lowering gross margins. As such
we expect total gross margins (in terms of percentage) to decrease
further across the Group.
Operating expenses during 2015 were $18.1 million, an increase
of 40% compared to last year (2014: $13.0 million). As expected,
recruiting pace was stronger in the second half of the year as we
worked hard to recruit additional staff to support our growing
operations.
Operating expenses included $1.4 million of research and
development costs, reflecting an increase of 43% compared to last
year (2014: $1.0 million). These expenses are in addition to the
increase of 123% in investments in internal systems developed
through capitalized costs during the year of $2.0 million (2014:
$0.9 million). The Group expects to invest further in technology as
we see this a key driver to growth and profit for the coming
years.
Adjusted EBITDA(2) reached $28.4 million or 32% of revenues,
reflecting an increase of 67% to the previous year (2014: $17.0
million, 34%). As the mix of revenues changes towards more media,
we expect adjusted EBITDA to decrease in terms of margins but to
grow in absolute numbers.
Net financial income for year was $1.7 million, attributed to
the Company's dynamic hedging activity to mitigate material
exposure to foreign currencies. As a significant portion of the
Group's revenues are denominated in Euros, the Company entered into
a series of forward contracts for the sale of Euros and purchase of
US Dollars. The Euro exchange rate decreased by 6.6% versus the US
Dollar during this period. The Company gained financial income from
its hedging activity which partially compensated for the decrease.
The financial income was received in cash (when forward contracts
matured) while the amounts recorded as fair value gains for forward
contracts not yet matured was not material. The Company has entered
into additional forward contracts which will mature over the course
of the next 12 months.
As a result of the high adjusted EBITDA as well as the financial
gain from changes in exchange rates, profit before tax increased by
84% to $24.3 million (2014: $13.2 million).
As of 31 December 2015 we had $42.6 million cash and short term
investments compared to $44.1 million on December 31, 2014. The
change in cash reflects an increase of $28.4 million provided by
operating activity, offset mainly by spending $19.7 million on
investments in technology and acquisitions and $8.0 million of
dividends paid during 2015.
Current assets at 31 December 2015 were $60.9 million (31 Dec
2014: $57.8 million) and non-current assets reached $57.9 million
(31 December 2014: $42.0 million). The increase in non-current
assets is attributed mainly to the acquisition of Marmar Media
shares, investments in domains and websites, as well as additions
to our in-house technology.
Total equity on 31 December 2015 reached $90.0 million, or 75%
(2014: 76%). This, with cash and short term investments of $42.6
million, positions the Group well to continue executing its
strategic plan.
(1) Revenues for the six months ending 31 December 2015
(2) Earning Before interest, Taxes, Depreciation and
Amortization and adjusted to exclude share based payments and
expenses related to acquisition agreements
PRELIMINARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION AS OF
DECEMBER 31, 2015
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of 31 December
2015 2014
---------- -------
USD in thousands
-------------------
Assets
Current assets:
Cash and cash equivalents 35,741 27,351
Short-term investments 6,866 16,714
Trade receivables 16,088 11,548
Other receivables 2,042 1,895
Financial derivatives 165 264
60,902 57,772
---------- -------
Non-current assets:
Long-term investments 1,102 333
Other receivables 332 456
Property and equipment 1,190 864
Goodwill 26,302 19,586
Domains and websites 23,897 16,728
Other intangible assets 4,837 4,014
Deferred taxes 256 -
57,916 41,981
---------- -------
118,818 99,753
========== =======
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of 31 December
2015 2014
---------- -------
USD in thousands
-------------------
Liabilities and equity
Current liabilities:
Trade payables 11,146 9,073
Contingent consideration payable 5,373 3,396
Other liabilities and accounts
payable 12,151 7,764
28,670 20,233
---------- -------
Non-current liabilities:
Contingent consideration payable - 3,233
Deferred taxes 317 332
Other liabilities 155 42
---------- -------
472 3,607
Equity attributable to equity
holders of the Company:
Share capital *) *)
Share premium 64,447 62,271
Capital reserve from share-based
transactions 1,390 1,784
Capital reserve from transaction
with non-controlling interests (506) (506)
Retained earnings 22,774 12,072
88,105 75,621
Non-controlling interests 1,571 292
---------- -------
Total equity 89,676 75,913
---------- -------
118,818 99,753
========== =======
*) Lower than USD 1 thousand.
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CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Year ended 31
December
--------------------
2015 2014
--------- ---------
USD in thousands
(except per share
data)
--------------------
Revenues 89,219 50,720
Cost of revenues 48,143 23,142
Gross profit 41,076 27,578
Research and development expenses 1,438 1,008
Selling and marketing expenses 3,038 2,239
General and administrative
expenses 13,640 9,732
18,116 12,979
Operating income before expenses
in connection with IPO 22,960 14,599
Expenses in connection with
IPO - 361
--------- ---------
Operating income after expenses
in connection with IPO 22,960 14,238
Finance expenses (523) (1,001)
Finance income 2,259 231
Income before other expenses 24,696 13,468
Other expenses, net (403) (229)
--------- ---------
Profit before taxes on income 24,293 13,239
Taxes on income 4,093 1,329
--------- ---------
Net income and other comprehensive
income 20,200 11,910
========= =========
Attributable to:
Equity holders of the Company 18,719 9,821
Non-controlling interests 1,481 2,089
--------- ---------
20,200 11,910
========= =========
Earnings per share attributable
to equity holders of the Company:
Basic earnings per share (in
USD) 0.10 0.06
========= =========
Diluted earnings per share
(in USD) 0.10 0.05
========= =========
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
31 December
------------------
2015 2014
--------- -------
USD in thousands
Cash flows from operating activities:
Net income 20,200 11,910
--------- -------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Adjustments to the profit or loss
items:
Depreciation and amortisation 3,775 1,296
Finance expense income, net 231 25
Finance income from financial derivatives 99 (264)
Loss from sale of assets - 9
Cost of share-based payment 839 1,042
Taxes on income 4,093 1,329
Exchange differences on balances
of cash and cash equivalents 310 482
--------- -------
9,347 3,919
--------- -------
Changes in asset and liability items:
Decrease (increase) in trade receivables (3,580) 994
Increase in other receivables (432) (608)
Decrease in related parties - 142
Increase (decrease) in trade payables 1,155 (256)
Increase in other accounts payable 3,892 782
Increase in other long-term liabilities 99 18
1,134 1,072
--------- -------
Cash received (paid) during the
period for:
Interest paid (2) -
Interest received 72 46
Taxes paid (2,352) (421)
Taxes received - 417
(2,282) 42
--------- -------
Net cash provided by operating activities 28,399 16,943
--------- -------
Year ended
31 December
-------------------
2015 2014
-------- --------
USD in thousands
-------------------
Cash flows from investing activities:
Purchase of property and equipment (644) (350)
Acquisition of initially consolidated
companies (4,459) (9,950)
Payment of contingent consideration
in respect of acquired company (3,500) -
Acquisition of domains, websites
and other intangible assets (12,326) (11,528)
Proceeds and collection of receivable
from sale of assets 300 328
Short- term and long-term investments,
net 9,625 (16,315)
Net cash used in investing activities (11,004) (37,815)
-------- --------
Cash flows from financing activities:
Issue of share capital (net of
issue costs) - 48,917
Dividend paid to equity holders (8,017) (8,243)
Acquisition of non-controlling
interests - (1,490)
Dividend paid to non-controlling
interests (694) (2,287)
Repayment of liabilities to related
parties - (3,512)
Exercise of options 943 12
Financing by non-controlling interests - 57
Payments of liabilities to former
shareholders of acquired businesses (927) -
Repayment of long-term and short-term
liabilities - (204)
Net cash provided by ( used in)
financing activities (8,695) 33,250
-------- --------
Exchange differences on balances
of cash and cash equivalents (310) (482)
-------- --------
Increase in cash and cash equivalents 8,390 11,896
Cash and cash equivalents at the
beginning of the year 27,351 15,455
-------- --------
Cash and cash equivalents at the
end of the year 35,741 27,351
======== ========
NOTES TO PRELIMINARY CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
NOTE 1: GENERAL
The Group is an online performance marketing company. The Group
attracts paying users from multiple online and mobile channels and
directs them to online and mobile businesses who, in turn, convert
such traffic into paying customers.
Online traffic is attracted by the Group's publications and
advertisements and are then directed, by the Group, to its
customers in return for mainly a share of the revenue generated by
such user, a fee generated per user acquired, fixed fees or a
hybrid of any of these models.
NOTE 2: OPERATING SEGMENTS
(a) General:
The operating segments are identified on the basis of
information that is reviewed by the chief operating decision maker
("CODM") to make decisions about resources to be allocated and
assess its performance. Accordingly, for management purposes, the
Group is organised into operating segments based on the products
and services of the business units and has operating segments as
follows:
Publishing - The Group owns over 2,000 informational
websites in 17 languages. These websites
refer potential customers to online businesses.
The sites' content, written by professional
writers, is designed to attract online
traffic which the Group then directs
to its customers online businesses.
Media - The Group's Media division acquires
online and mobile advertising targeted
at potential online and mobile traffic
with the objective of directing
it to the Group's users. The Group
buys advertising space on search
engines, websites, mobile and social
networks and places adverts referring
potential users to the Group's customers'
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websites or to its own websites.
Partners - The Group manages marketing partners,
Network whose role is to direct online traffic
to the Group's customers for which
the Group receives revenues. The
Group is responsible for paying
its partners. The Group's partner
programme enables affiliates to
have a single point of contact to
direct traffic to, and receive monies
from, rather than engaging in multilateral
negotiation, administration and
collection of revenues.
Segment performance (segment profit) is evaluated based on
revenues less direct operating costs. Items that were not allocated
are managed on a group basis.
(b) Reporting on operating segments:
Partners
Publishing Media Network Total
---------- ------ -------- ---------
USD in thousands
-----------------------------------------
Year ended 31 December
2015:
Revenues 30,297 45,777 13,145 89,219
---------- ------ -------- ---------
Segment profit 23,855 15,411 1,810 41,076
---------- ------ -------- ---------
Unallocated corporate
expenses (18,116)
Other expense,
net (403)
Finance income,
net 1,736
Profit before taxes
on income 24,293
=========
Year ended 31 December
2014:
Revenues 23,965 20,632 6,123 50,720
---------- ------ -------- ---------
Segment profit 18,345 8,548 685 27,578
---------- ------ -------- ---------
Unallocated corporate
expenses (13,340)
Other income, net (229)
Finance expense,
net (770)
Profit before taxes
on income 13,239
=========
(c) Geographic information:
Revenues classified by geographical areas based on internet user
location:
Year ended 31
December
---------------
2015 2014
------- ------
Scandinavia 29,414 28,164
Other European countries 16,732 7,457
North America 19,588 4,918
Oceania 2,788 942
Other countries 2,610 3,116
------- ------
Total revenues from identified
locations 71,132 44,597
Revenues from unidentified
locations 18,087 6,123
------- ------
Total revenues 89,219 50,720
======= ======
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFLAVFIAFIR
(END) Dow Jones Newswires
March 30, 2016 02:00 ET (06:00 GMT)
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