Slide 1: A high growth company in a high growth market
Annual Results Presentation 2010/11 A high growth company in a high growth market 1
Slide 2: The Board
The Board Frank Beechinor – Non Exec Chairman Peter Simmonds – CEO & FD Tink Taylor - COO Simon Bird – CTO Skip Fidura – Client Services Director Nicholas Nelson – Non Exec Richard Kellet-Clarke – Non Exec 2
Slide 3: dotDigital offerings
dotDigital offerings 66 dotDigitaléroup x dotDigital Group Plc dotDigital Serivces dotMailer — powerful email marketing made easy, by the second largest and fastest growing email agency and ESP in the UK and the number 1 choice of over 18,000 business users. Uniquely designed to meet the needs of ev
Slide 4: Company Summary
Company Summary o Established 1999 o 142 staff o Sales & Marketing - 47, Development - 19, SEO – 43 o Client Services – 15, Admin/Finance/Directors - 18 o 1,470 new clients in 2010/11 o Over 4,000 Clients o Profitable, self funded growth - minimal debt o Acquisition - Netcallidus for £1.15m May 2010
Slide 5: Company Summary
Company Summary o Average 122 new clients per month o Fastest growing UK email marketing provider (ESP) o Top 3 ESP in UK in NMA guide 5
Slide 6: Financial Highlights – 2010/11 Full Year
Financial Highlights – 2010/11Full Year 6
Slide 7: IFRS 3 – Business Combinations
IFRS 3 – Business Combinations In accordance with IFRS 3 we have reviewed the likely final payment in October 2012 to the vendors of Netcallidus based on the board’s estimated financial outturn of the business for the year ended 30th June 2012. This has resulted in a reduction of the estimated total
Slide 8: Netcallidus – financial overview of deal
Netcallidus – financial overview of deal Seeking goal alignment Earnings enhancing v dotDigital shareholders Shared vision for growth Deal structure 5 x PAT for y/e June 2010 = (5x£230k) £1.15m (Cash £1m) Deferred consideration 4X PAT for y/e June 2011 less £1.15 paid so far 3X PAT for y/e June 2012
Slide 9: Impact of new products on growth
Impact of new products on growth 37% Increase growth in 78% email Increase growth in e-commerce 1,224% Increase o New products showing good growth growth in o Email marketing continues to perform very strongly search marketing o Managed service aids retention o Search marketing boosted by Netcallidu
Slide 10: dotmailer – monthly volumes are growing rapidly
dotmailer – monthly volumes are growing rapidly 10
Slide 11: Revenue Model
Revenue Model o Focus on Recurring Revenue - monthly billings now account for over 65% of total billing o dotMailer monthly recurring revenue continues to grow strongly o dotSEO/Netcallidus recurring revenue now increasing significantly o dotCommerce recurring revenue starting to build 11
Slide 12: Low dependence on largest clients
Low dependence on largest clients • 5 Largest Clients approx 5% of total revenue DHL Rush LIDA Wine and Spirit Educational Trust CTT • Top 20 clients less than 15% of total revenue • Client base spread across many sectors • Circa. 50% of dotMailer customers on direct debit with 14 day payment terms
Slide 13: Attractive gross margins
Attractive gross margins dotMailer dotSeo & Netcallidus o Fixed cost infrastructure o Highly efficient process o Incremental costs very low o Monthly recurring revenue o Step costs at key volumes o Low cost offshore operations o Sales & marketing covered by licence fees o Gross margin in excess of 7
Slide 14: 5 Year Financial Summary
5 Year Financial Summary £m 12 Months to 12 Months to 12 Months to Yr to 30 April 2008 Yr to 30 April 2007 June 2011 June 2010 June 2009 Turnover 9.0 6.0 4.2 2.5 1.2 Expenses 6.6 4.6 3.3 1.7 0.9 Operating profit 2.3 1.4 1.0 0.75 0.3 (before exceptional) Profit before tax 3.3 1.4 0.9 0.75 0.3 Profit
Slide 15: Cash Flow Summary
Cash Flow Summary o Cash generative operations o Strong cash position 15
Slide 16: Organic Growth Strategy
Organic Growth Strategy o Win new clients through products with short sales cycle then cross-sell and up-sell higher value relationship based services Example – Fast Growing Chain of Hair Salons Initial enquiry for email marketing ….monthly value £500pm 12 months later - now spending £15,000 per mon
Slide 17: Sources of further organic growth
Sources of further organic growth o Products o dotMailer o new features now live - powerful new ‘easy editor’ - intuitive new step process - powerful split testing o dotSurvey o new product currently in Public Alpha o Channels o Expand partner distribution channels eg through development of connecto
Slide 18: dotSurvey in limited Beta
. ope 6®@ dotSurvey in limited Beta dotDigitalGroup . SD dotsurvi > dotsurvegag Take atour | CopykKi Survey report survey! Choose a te questiv aN - , ‘ forme| This is an example with a very very very very long survey na... 10:00 8 Jan 2011 > Gotsue se 19:30 12 Fob 2011 choose Responses 25 days Pa: E
Slide 19: dotSurvey – good initial feedback
dotSurvey – good initial feedback “I REALLY LIKED USING DOTSURVEY. IT WAS REALLY INTUITIVE AND I THINK I NOW PREFER IT TO SURVEY MONKEY!” 19
Slide 20: Growth by acquisition
Growth by acquisition The target sectors selected for potential acquisitions are: o Mobile, Social o Consolidation other Email Marketing providers o In the UK Email Marketing providers (ESPs) o very fragmented o No player highly dominant o Consolidation starting (email vision acquired smart focus) o
Slide 21: Current year insight – Q1
Current year insight – Q1 o Email sends at record levels o Our busiest ever sends day last Friday in September o Revenues in line with plan o Significant growth above same period last year 21
Slide 22: In conclusion
In conclusion o High growth profitable business in high growth market sectors o Cash generative o Significant opportunities for organic growth o Opportunities for international expansion o Opportunities for acquisitions & joint ventures o Young, energetic team with passion for growth Care needed to