XLMedia Plc · OTC:XLMDF
XLMedia — FY2018 Earnings Presentation
26 slides from XLMedia's earnings presentation, March 2019
Slide 1: Technology-Driven Performance Marketing
TECHNOLOGY-DRIVEN PERFORMANCE MARKETING March 2019
Slide 2: The Team
The Team Ory Weihs, CEO Yehuda Dahan, CFO o One of the founders and leads the Group’s o Joined XLMedia as Group CFO in 2013 leading business development and strategy the Company’s Cyprus Headquarters o An entrepreneur who has been deeply o Has 15+ years’ experience in accounting & involved in the on
Slide 3: Our Business
Our Business o A leading performance marketing and online publishing company o We attract paying users from multiple online channels and direct them to online businesses in return for performance based payment models o Main source of revenue generated from a wide network of publishing assets o Focus
Slide 4: XLMedia in Numbers
XLMedia in Numbers FY 2018 Revenues FY 2018 Gross profit FY 2018 Adjusted EBITDA $117.9M $67.9M $43.9M FY 2018 Net profit Cash Customers $20.8M $47.6M 300+ and short term investments Tier 1 Publishing assets Staff Operating across 160+ ~400 20+ Employees Countries
Slide 5: 2018 Overview
2018 Overview
Slide 6: Key Highlights
Key Highlights o Announced strategic pivot to focus on higher margin publishing revenues, delivering better quality and more predictable earnings o Actively reducing certain low margin media activities, ongoing media spend to complement the Group’s publishing activities o Trading for 2019 started in
Slide 7: Gambling Regulatory Summary
Gambling Regulatory Summary North America UK • May 2018 - US Supreme Court reserved 1992 federal law • Sports betting market continues to perform strongly prohibiting sports betting outside of Nevada • Enhanced gambling advertising regulation • Various US States in the process of introducing legisla
Slide 8: Financial Results
7 a Financial Results
Slide 9: Investing for Future Growth
Investing for Future Growth Adjusted EBITDA ($ m) Revenues ($ m) $160.0 $137.6 $140.0 $117.9 $120.0 $103.6 $100.0 $89.2 $80.0 $60.0 $50.7 $40.0 $34.5 $47.1 $43.9 $34.6 $20.0 $28.5 $13.3 $17.0 $0.0 2013 2014 2015 2016 2017 2018 Dividends since IPO ($ m) 8.2 8.0 12.5 15.5 14.5 Employees: 120 Employees
Slide 10: Revenue Diversification
Revenue Diversification Revenues diversification – Revenues Diversification – Revenues per Users’ Geography Products Business Model North America, 17% Other Europe, 17% CPI, 24% Gambling, 68% Revshare, 54% United Kingdom, Mobile Apps, 11% Scandinavia, 36% 21% CPA, 20% Other Territories, 19% Personal
Slide 11: Income Statement
Income Statement Item US$‘000 2018 2017 Revenues 117,866 137,632 Cost of revenues 49,922 64,487 Gross profit 67,944 73,145 Operating expenses 32,257 32,376 Operating profit before loss media activity planned reduction 35,687 40,769 Total adjusted EBITDA* 43,857 47,120 % Adjusted EBITDA 37% 34% Loss
Slide 12: Cash Flow Statement
Cash Flow Statement US$‘000 2018 2017 2018 2017 Operating Activities Financing Activities Net income 20,775 31,871 Dividend paid to equity holders of the Company (14,362) (15,505) Depreciation, amortisation and impairment 6,503 5,932 Share capital issuance 42,618 - Cost of share-based payment 1,667
Slide 13: Balance Sheet December 2018
Balance Sheet 31 December 2018 0
Slide 14: 14
14
Slide 15: Key Growth Initiatives
Key Growth Initiatives Focus on Strengthen focus on publishing activities as a core profit driver with an publishing emphasis on gambling and personal finance Reshape Actively reducing certain low margin media activities whilst complementing media publishing activities with media skillset Grow Perso
Slide 16: Focus on Publishing Expertise
Focus on Publishing Expertise o Increase investment and activity across higher margin Publishing activities o Leverage gambling expertise in gambling to increase footprint in existing territories in Publishing division, including across Scandinavia and other European regions o Continue to build port
Slide 17: Reducing Exposure to Media Activities
Reducing Exposure to Media Activities o Proactive decision to materially reduce Media activities which generate lower profit margins and unstable revenues in non-core products o Decision driven by changes to media landscape in some non-core products o Media activity will complement XLMedia’s existin
Slide 18: Expand The Personal Finance Sector
Expand The Personal Finance Sector o Personal finance business continues to grow and has increased its presence in the North American markets - 6% of overall revenues now derived from this sector (2017: 2%) Committed to expanding US operations - adding scale to grow our publishing assets o Recent ac
Slide 19: US Gambling Opportunity
US Gambling Opportunity Our plan for the US gambling market o XLMedia actively investing in building and developing a more comprehensive portfolio of publishing assets as part of the recently announced plan o The group still will be looking for strategic acquisitions in the region but generally focu
Slide 20: M&A
M&A Completed a number of publishing acquisitions totalling $46m, including: o Leading Finnish gaming assets for $18m o A UK Bingo comparison site - WhichBingo.co.uk - for $10.5m o A US personal finance website - investorjunkie.com - for $5.8m o A network of US and Canadian personal finance assets S
Slide 21: Summary & Outlook
Summary & Outlook o Proactive exit from low margin media activities to focus on higher margin publishing business, management focused on the long term targets o Short-term financial impact but the Board is confident these steps will deliver higher profit margins and a much higher quality of sustaina
Slide 22: Any Questions?
Thank You SY, | _ Any Questions? & WY ' i H |
Slide 23: The Future of Online Marketing
The Future of Online Marketing Growth of Internet advertising revenues o Worldwide digital ad spending will reach $223.74 billion in 2017, representing 38.3% of total paid media outlays. This format is expected to see double-digit growth through at least 2020 o Global advertising expenditure in soci
Slide 24: Optimization Cycle
Optimization Cycle Quality content Asset optimisation Place Brands Send users Big Data Gather data Target Proprietary tracking, data and analysis tools Send users XLM self-funded Bid on ads Place Brands campaigns 24
Slide 25: Experienced Senior Leadership
Experienced Senior Leadership LIAT HELLMAN CFO (ISRAEL) YEHUDA DAHAN GROUP CFO & DIRECTOR • Over 20 years’ experience in publicly traded companies • Over 15 years’ experience in accounting and finance • Serves as CFO (Israel) of the company since its inception and • Previously CFO for Barinboim is r
Slide 26: Disclaimer
Disclaimer THIS PRESENTATION (THE “PRESENTATION ”) WHICH HAS BEEN PREPARED BY 4. you will not forward, reproduce or otherwise disclose the contents of this XLMEDIA PLC. (THE “COMPANY) IS FOR INFORMATION PURPOSES ONLY AND DOES document to any person in contravention of FSMA or any other applicable NO