Slide 1: Interim results presentation, February 2019
Milan Patel, CEO Paraag Amin, CFO February 2019
Slide 2: Our mission: powering customer engagement across all touchpoints
Our mission: powering customer engagement across all touchpoints. • A global business with a UK headquarters. • Formed in 1999. Listed on AIM in 2006. • Background in ecommerce. • Acquired Comapi in 2017. • Rebranded to Engagement Cloud in 2019. Trade associations Official partnerships 2
Slide 3: About dotdigital
About dotdigital At the end of the period we employed 333 people in 14 office locations around the world. 115 113 60 40 UK - 266 Sales & Marketing Client Services Other IT & Development UK USA Australia South Africa Germany Belarus Poland 266 people 25 people 10 people 4 people 2 people 17 people 9
Slide 4: About dotdigital
About dotdigital • Directors 11.6% • European institutions • Liontrust Investment Holdings 18.8% • Slater Investment Ltd 5.9% • Highclere International 4.2% • Simon Bird 3.9% • JO Hambro 3.2% Global reach • Franklin Templeton Fund Management 3.0% • Allianz Global Investors (Ger) • Pie Funds (NZ) • J
Slide 5: About dotdigital
About dotdigital 33% Up from £18.8m • Our strategy is delivering – product innovation, partnership development and geographic expansion. • Product Innovation – Comapi acquisition facilitated a shift to an omnichannel offering. • Strategic partnerships – Have expanded and deepened, evidenced by the h
Slide 6: Strong, profitable organic growth
• Strong profitable organic Strong,growth profitable organic growth • Paraag Amin
Slide 7: Financials: revenue and adjusted EBITDA
Financials 26 £24.9m Growth trends continue for both 24 KEY revenue and profit. 22 Group Revenue 20 Adjusted EBITDA 1200% 18 Cash at Period End £16.6m* Engagement Cloud Revenue growth REVENUE in £m 16 14 1100% 12 Adjusted EBITDA growth 10 8 28% 6 £7.1m Engagement Cloud Revenue CAGR 4 2 27% 0 Adjuste
Slide 8: Financials: top line revenue growth, increasing recurring revenue
Financials Top line revenue growth Increasing recurring revenue Group revenues grew 33% to £24.9m in H1 2019 Engagement Cloud recurring revenue is now 90% of (H1 2018: £18.8m). ARPU increased 16% in H1 2019, total, of which 90% is contracted. Recurring revenue from product functionality grew by 50%
Slide 9: Financials: strong revenue growth
Financials Functional Recurring Revenue Product innovation Strong Revenue Growth (Engagement Cloud) Functional Recurring revenue £5.7m, 28% Strategic partnerships grew 50% to £5.7m in H1 2019. It now makes up 28% Geographic expansion of Engagement Cloud revenue. £3.8m, 22% £2.9m, Engagement Cloud SM
Slide 10: Financials: connector revenues grow
Financials H1 2018 Product innovation Connector revenues grow Non-integrated, Magento, 25% 58% Salesforce, • Revenues grew in both ecommerce (Magento and 9% Strategic partnerships Shopify) and CRM (Salesforce & MS Dynamics). Dynamics, 7% • Sales from customers using connectors to our Other partners,
Slide 11: Financials: revenue by geography
Financials Revenue by Geography Product innovation Revenue by Geography (Engagement Cloud) • Engagement Cloud international revenue now represents 30% of total, up from 25% in H1 2018. Strategic partnerships • Organic international revenue was up 37% to £6.0m (H1 2018: £4.4m). 86% 83% 79% Geographic
Slide 12: Financials: profit & loss statement
Financials Profit & Loss Dec 18 Dec 17 Growth £M £M % Statement Revenue 24.9 18.8 33% Group revenue Cost of sales (5.7) (3.1) 81% • Group revenue grew 33% to £24.9m (H1 2018: £18.8m). Gross profit 19.2 15.6 23% • Organic revenue grew 15% to £20.1m (H1 2018: £17.5m). Admin expenses (13.6) (11.0) 23%
Slide 13: Financials: balance sheet
Financials • Healthy balance sheet. Balance sheet Dec 18 Dec 17 £M £M • Zero debt. Non Current Assets 21.5 18.6 • Bandwidth for strategic investments. Other Current Assets 12.4 11.1 • Strong distributable reserves. Cash 16.7 10.5 Total Assets 50.6 40.2 Non Current Liabilities 1.9 0.8 Current Liabili
Slide 14: Financials: cash flow
Financials • Strong cashflows generated from operations. Cash flow Dec 18 Dec 17 £M £M • Adjusted free cash flow of £1.7m. Net cash generated from 4.5 2.6 • Healthy cash balance at the half year. operations Net cash used in investing 2.8 11.6 • c50% of monthly recurring value collected on activities
Slide 15: The customer engagement platform for the serious marketer
The customer engagement platform for the serious marketer
Slide 16: A reminder of what's happening
A reminder of what’s happening dotmailer COMPANY dotdigital Comapi dotmailer PRODUCT Engagement Cloud Comapi Email Marketing TERRITORY Marketing Automation Customer Engagement CPaaS 16
Slide 17: dotdigital Engagement Cloud
— \ dotdigital ©) engagement cloud
Slide 18: Engagement Cloud channels and integrations
A.I. Automation Collaboration Personalization Email SMS Social Ads ecommerce CRM Offline Webhooks Profiling Reporting Segmentation Mobile Web Chat 18
Slide 19: Increase ROI at every stage of the ecommerce journey
Increase ROI at every stage of the ecommerce journey Data Insight Engage Convert Retention Sync your customer, order, Build rich profiles to Talk to customers on Deliver a better Increase LTV with post- and product data. understand customers. the channels they use. CX and increase ROI. purchase camp
Slide 20: Our foundations
Our foundations Expand our product suite: providing organic Focus on growth Expand cross-selling: geographical deeper customer coverage relationships • Focus on developing our platform driving organic growth • High quality product improves Grow our customer base Extend reputation and drives meaningf
Slide 21: Our platform wins against other providers in the market
Our platform wins against other providers in the market LOW (price: <£150/month) MID (price: £150-£30k/month) HIGH (price: >£30k/month) • Functionality hits a wall • Value vs. cost • Very high costs • Limited or no service/support • Ease of use is an issue • Often underutilize platform • Becomes exp
Slide 22: A strategy to deliver on our ambitions
A strategy to deliver on our ambitions O Ty x Product Strategic Geographic innovation partnerships expansion 22
Slide 23: Future developments
Product innovation Future developments Further integration of functionality into the Strategic partnerships Engagement Cloud platform: • More channels, e.g. Chat and Twitter DM. Geographic expansion • Further ecommerce and CRM integrations • A.I. powered Product Recommendations • A.I. powered digita
Slide 24: Product innovation: channels
Triggered SMS Facebook Messenger Broadcast SMS Twitter DM (beta) Product innovation Transactional SMS Strategic partnerships Geographic expansion Landing pages Website chat Surveys & Forms Web push (beta) Facebook audiences App notifications Google Ad retargeting WhatsApp (beta) Instagram Ad retarge
Slide 25: Connectors
Connectors • Magento connector revenue (ecommerce) now Product innovation Global Premier comprises 28% of total Engagement Cloud European Elite Partner Technology Partner revenue. We recently extended our Global Premier Technology partner status agreement with Strategic partnerships Magento for a fu
Slide 26: Geographic expansion
EMEA focus on the Nordics region has resulted in stronger partnerships and growing revenue stream in the region US revenue growth driven 190% by system integrators and Product innovation strategic partners APAC growth a result of strong Strategic partnerships Engagement 30% conversion of prospects t
Slide 27: Omnichannel and email marketing statistics
higher LTV when of in-store purchases are Average return for £1 consumers shop on an omnichannel influenced by digital spent on email more than one approach is adopted transactions marketing channel 27
Slide 28: Outlook & Summary
, Outlook & Summary ,
Slide 29: Outlook
Outlook Clear and Highly Attractive Successful Opportunities Experienced compelling scalable industry dotdigital for superior management strategy platform growth culture growth team 29
Slide 30: Growth rationale and confidence for the new fiscal year
Outlook Growth rationale Confidence for the new fiscal year • Email remains highest ROI of all digital marketing • H1 2109 showed strong progress against channels at a return of $40 for every $1 spent all strategic ambitions • Omnichannel platform • Rebrand and technology integration sets • High mar
Slide 31: Forward-looking statements
Certain statements included or incorporated by reference within this presentation may constitute “forward-looking statements” in respect of the Group’s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of risks, uncertainties