Slide 1: Milan Patel, CEO; Paraag Amin, CFO
Milan Patel, CEO Paraag Amin, CFO October 2019
Slide 2: Who we are, what we do, who we help
Who we are What we do Who we help • Formed in 1999 as dotmailer with a marketing We provide a SaaS based cross-channel technology vision marketing platform that enables brands to • A global business with a UK headquarters engage with their customers across all • 340+ global employees touchpoints. •
Slide 3: About dotdigital
About dotdigital Empowering technology Super-powerful and easy to use so marketers can do it all themselves. Learning We help brands get smarter with inspiring events and thought leadership. Service If our customers are busy or short-staffed, we can do it all for them. Expertise We have been helping
Slide 4: About dotdigital: employees and offices
About dotdigital At the end of the period we employed 341 people in 14 office locations around the world. 131 127 44 39 UK - 266 Sales & Marketing Other IT & Development Client Services UK USA Australia South Africa Singapore Belarus Poland Netherlands 266 people 29 people 15 people 6 people 2 peopl
Slide 5: About dotdigital: strong financial performance
About dotdigital • Our strategy continues to deliver – Product innovation, Another year of strong financial performance and success operationally partnership development and geographic expansion. • Product Innovation – Introduced commerce intelligence to extend our product capabilities into AI and m
Slide 6: Strong, profitable organic growth
• Strong profitable organic Strong,growth profitable organic growth • Paraag Amin
Slide 7: Revenue growth trends continue
Financials 45 Growth trends continue for both £42.5m revenue and profit 40 KEY Revenue from continuing operations 35 Adjusted EBITDA 800% 30 Cash at Period End Engagement Cloud Revenue growth REVENUE in £m 25 1200% 20 £19.3m* Adjusted EBITDA growth 15 £14.7m 24% 10 Engagement Cloud Revenue CAGR 5 30
Slide 8: Top line revenue growth, increasing recurring revenue
Financials Top line revenue growth Increasing recurring revenue Revenue from continuing operations grew 15% to Engagement Cloud recurring revenue is now 86% of £42.5m in 2019 (2018: £36.9m). ARPU increased 14% in total, of which 90% is contracted. Recurring revenue from product functionality grew by
Slide 9: Strong functional recurring revenue growth
Financials Functional Recurring Revenue Product innovation Strong Revenue Growth (Engagement Cloud - license & functionality) Functional Recurring revenue £12.4m, Strategic partnerships grew 39% to £12.4m in 2019. 34% It now makes up 34% Geographic expansion of Engagement Cloud recurring £8.9m, 28%
Slide 10: Connector revenues grow
Financials 2019 Product innovation Connector revenues grow Non-integrated, Magento, 28% 52% • Revenues grew in both ecommerce (Magento and Salesforce, Strategic partnerships Shopify) and CRM (Salesforce & MS Dynamics). 8% • Sales from customers using connectors to our Dynamics, 9% Other strategic pa
Slide 11: Revenue by geography
Financials Revenue by Geography Product innovation Revenue by Geography (Engagement Cloud) • Engagement Cloud international revenue now represents 29% of total, up from 25% in 2018. Strategic partnerships • Organic international revenue was up 28% to £12.3m (2018: £9.6m). 86% 82% 79% Geographic expa
Slide 12: Profit & loss statement
Financials Group revenue Profit & Loss Jun 19 Jun 18 Growth Jun 19 Jun 18 Jun 19 • Group revenue grew 19% to £51.3m (2018: £M £M % £M £M £M Statement (continuing (continuing (continuing (discontinued (discontinued (Group) £43.1m). operations) operations) operations) operations) operations; • Organic
Slide 13: Balance sheet
Financials • Healthy balance sheet Balance sheet Jun 19 Jun 18 £M £M • Strong cash position Non-current Assets 22.4 20.5 • Zero debt Other Current Assets 12.3 13.0 • Bandwidth for strategic investments Cash 19.3 15.0 • Strong distributable reserves Total Assets 54.0 48.5 Non-current Liabilities 1.2
Slide 14: Cash flow
Financials • Strong cashflows generated from operations Cash flow Jun 19 Jun 18 £M £M • Adjusted free cash flow of £6.2m Net cash generated from 12.3 10.2 • Healthy cash balance operations Net cash used in investing (6.1) (14.5) • c50% of monthly recurring value collected on activities Direct Debits
Slide 15: IFRS 15 impact
Financials • The IFRS 15 impact was £137k on revenue and Continuing In-period adjusted operating profit and £111k on profit Operations adjustment £k Revenue (137) after tax for the continuing operations. Adjusted Operating Profit (137) • We have adopted IFRS 15 as at 1 July 2018 and Defered tax asse
Slide 16: Financials summary
Financials Summary High proportion of recurring revenues Good US and APAC traction Large percentage under contract Healthy balance sheet and strong cash position High gross margin 16
Slide 17: Digital marketing complexity drives cross-channel tools
As digital marketing complexity increases, businesses are embracing cross channel tools to improve efficiency and speed to market
Slide 18: Global marketing automation spend forecast
Global marketing automation spend, according to Forrester Research, is predicted to grow to $25.1bn by 2027 from $3.8bn today.
Slide 19: Cross-channel marketing returns
Average return for £1 higher LTV when of in-store purchases consumers shop on spent on email a cross-channel are influenced by more than one marketing approach is adopted digital transactions channel 19
Slide 20: Next generation MarTech enterprise core
Traditional MarTech was linear. The next generation enables marketers to build an enterprise core that centralises critical customer knowledge and interactions that will deliver a first class customer experiences to generate business value and satisfy consumers. * Source: Forrester research 20
Slide 21: Buyer questions across channels
How do I deliver a How do I enable strategic How do I deliver growth How can technology good CX across all innovation and digital expectations when not enable an agile channels transformation aligned to budget organisation Primary buyer and win rate 21
Slide 22: Platform channels and capabilities
Ecommerce CRM Offline Webhooks A.I. Automate Collaborate Personalize Profiling Report Segment Email SMS Social Ads Mobile Web Chat
Slide 23: Our platform wins against other providers
Our platform wins against other providers in the market LOW (price: <£350/month) MID (price: £350-£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 underutilise platform • Become expe
Slide 24: G2 Crowd ratings comparison
c£1k c£6k+ c£2k+ c£4k+ Email marketing 8.6 8.1 6.5 5.7 Online marketing 8.1 7.3 7.3 5.6 Lead management 8.1 7.4 7.4 Not enough data Program management 8.0 7.7 7.2 5.3 8.0 8.0 6.8 Not enough data Social campaigns Reporting & analytics 8.1 7.6 6.8 Not enough data 7.7 7.1 Not enough data Integration AP
Slide 25: The cross-channel customer engagement platform
The cross-channel customer engagement platform for the serious marketer
Slide 26: dotdigital's mission
dotdigital’s mission is to drive value from every engagement for our customers
Slide 27: Our foundations
Our foundations Expand our product suite: providing organic Focus on Expand growth cross-selling: geographical deeper customer coverage relationships • Focus on developing our platform through continuous investment • High quality product improves Grow our customer base reputation and drives meaningf
Slide 28: A strategy to deliver on our ambitions
A strategy to deliver on our ambitions oO Ty ¥& Product Strategic Geographic innovation partnerships expansion 28
Slide 29: Customer engagement platform architecture
Cross-Channel Conversational Orchestration Messaging Interface controlled 1-2-1 real-time Scaled marketing Transactional Action-based Programmable Customer Engagement Unified Behavioral Marketing Relevant Messaging Automation Customer Engagement Intelligence Product Recs RFM Personas Email Massively
Slide 30: Product innovation capabilities
Conversational Messaging Cross-channel orchestration Intelligence and Data Product innovation Strategic partnerships Email Powerful APIs RFM reporting SMS Customer journey canvas Product recommendations Geographic expansion Chat Cross-channel Adaptive personalisation Facebook Messenger Re-targeting
Slide 31: Roadmap
Roadmap Product innovation • Focus SCV/CDP capabilities, including orchestration events • Infuse machine learning capabilities across more Strategic partnerships areas of the platform • Release new family of APIs to encapsulate new consolidated capabilities and channel Geographic expansion • Improve
Slide 32: Deep integrations and partners
Deep integrations • Engagement Cloud now pre-installed for all new Product innovation Global Premier Magento customers. We recently extended our Global Elite Partner Technology Partner Global Premier Technology partner status agreement with Magento for a further three years. Strategic partnerships N
Slide 33: Geographic expansion
Focus on Benelux has resulted in stronger partnerships and growing revenue stream in the region US revenue growth driven 40% by system integrators and Product innovation strategic partners APAC fastest growing region due to higher order values and volume of Strategic partnerships Engagement 27% new
Slide 34: Outlook & Summary
, Outlook & Summary ,
Slide 35: Outlook & Summary
Outlook & Summary Growth rationale Confidence in the new fiscal year • Recurring SaaS revenue model • 2019 showed strong progress against all • Growth platform for mid-market companies strategic ambitions • Although early, the Q1 results give us confidence • Large, growing total addressable market i
Slide 36: About dotdigital
About dotdigital Clear and Highly Attractive Successful Experienced Opportunities compelling scalable industry dotdigital management for superior strategy platform growth culture team growth 36
Slide 37: Questions
Questions www.dotdigitalgroup.com © dotdigital
Slide 38: Appendix
Slide 39: About dotdigital: shareholders and global reach
About dotdigital • Directors 10.6% • European institutions • Liontrust Investment Holdings 19.4% • Slater Investment Ltd 5.9% • Investec Group 4.2% • Highclere International 4.2% • Franklin Templeton Fund Management 4.0% Global reach • Simon Bird 2.7% • Herald Investment Management 2.6% Germany USA
Slide 40: Some of our 6,000+ clients
Some of our 6,000+ clients and growing Cran Sarita, Barbour Oliver Sweeney ato WieS Si fs Pe ctive WAREHOU: e CharlotteTilbury @ habitat® Mr Price y Pits ee ve GREENE KING NATIONAL GALLERY SCREWFIX = MATT BLATT. YoSLEROCK aftio~( EID Pewmoe Ppwtitte G OLIVER BONAS @YAMAHA F&F} = DevaCur! FA bee Jee
Slide 41: Tottenham Hotspur case study
The challenge Tottenham Hotspur needed to create a strong first impression with fans were entering the Club’s database through multiple sources and in high volumes. The solution • Optimized welcome program • Two-month programs specifically targeting unopened emails The results • Consistent 36% open
Slide 42: Team GB case study
The challenge Team GB needed to deliver inspirational and engaging content to its fanbase during the Winter Olympic Games in PyeongChang. The solution • dotdigital DMS support • dotdigital Creative Services The results • Sent nearly 6 million emails • 45k clicks during the games
Slide 43: icelolly.com case study
The challenge The marketing team at icelolly.com works tirelessly to deliver personalized customer experiences. The brand would move audiences along the customer journey – from awareness to consideration and conversion – by providing highly relevant Facebook ads. The solution • Pushed data from one
Slide 44: 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