Slide 1: FY19/20 Results Presentation
Milan Patel, CEO Paraag Amin, CFO November 2020
Slide 2: We sell cloud-based software for email and marketing communications
We sell cloud-based software to businesses that helps them send emails and marketing communications to their customers. • Design professional looking emails quickly • Send personalised email and SMS campaigns • Automate email programs like welcome, birthday, and abandon basket • Use other channels i
Slide 3: Who we are
Who we are • Formed in 1999 as dotmailer with a marketing technology vision • A global business with a UK headquarters • 340+ global employees • 13 offices worldwide • Strong network of tech and solution partners • Focused on mid market Trade associations Selected Service Partners “Whilst our busine
Slide 4: Key financials, who we help, business split
Who we help Key financials 23% 28% 45% 10-year revenue CAGR 10-year adjusted EBITDA CAGR 10-year EPS CAGR * Top 100 customer represent 17% of group revenue Business split Regional Business model Strategic EMEA US APAC Msg License & Func. One-off Connector Non Connector 4
Slide 5: We employ 341 people in 13 office locations
We employ 341 people in 13 office locations around the world. IT & Development 130 Sales &… 123 Client Services 49 Other 39 UK USA Australia South Africa Singapore Belarus Poland Netherlands 250 people 32 people 20 people 10 people 3 people 16 people 6 people 4 people 5
Slide 6: Board of directors
Mike O’Leary Liz Richards Boris Huard Non-Executive Chairman Non-Executive Director Non-Executive Director Mike has over 30 years’ main board Liz is a highly experienced executive Boris joined the Board on in March experience serving on AIM listed, FTSE and non-executive director with a 2019 and is
Slide 7: Growth strategy
Expand our product suite; providing organic Focus on growth Expand cross-selling; geographical deeper customer coverage relationships Product Innovation Grow our customer base; Adjacent Strategic partnerships Increasing our technology global market presence Geographic expansion Deepening our strateg
Slide 8: FY 19/20 review
FY 19/20 review
Slide 9: Operational highlights amid COVID
Quickly and safely transitioned to working from home with 1 minimal operational impact New business levels normalised after brief slowdown in April 2 with trading improving on a monthly basis through to the end of the year Robust cash collection throughout with benefits of diversity of customer 3 ba
Slide 10: Double digit organic growth despite COVID disruption
Double digit organic growth despite Continued momentum in adoption Increased demand for omnichannel COVID disruption proves resilience of platform globally offering with a quarter of all customers of business model now using more than one channel Significant and continuing Strengthened already robus
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Slide 12: Product innovation: functional recurring revenue
• Functional Recurring Revenue grew 16% Functional Recurring Revenue Product innovation to £14.4m in 2020. It now makes up 36% (Engagement Cloud - license & of Engagement Cloud recurring revenue. functionality) Strategic partnerships • Significant YoY increases in synced £14.4m, orders, products, we
Slide 13: Product innovation developments
Product innovation • Continued focus on data and intelligence – joining all data together to create a single customer view and improving personalisation • Continued to harness AI and machine learning including launch of Strategic partnerships sector-tailored product package for commerce customers an
Slide 14: Data integration, orchestration & APIs
Unified customer insight • Single customer view analytics • AI powered customer segmentation Email CRM / DMP / CDP • Dynamic Personalisation • Marketing automation Provides customer, • Custom data models • Lifecycle marketing opportunity, activity history, • Tagging & scoring • Product recommendatio
Slide 15: Strategic partnerships
• Sales from customers using connectors to our Product innovation 2020 strategic partners’ solutions increased by 10% to £22.2m (2019: £20.3m). Strategic partnerships • Revenues grew in both ecommerce (Magento and Magento, 29% Shopify) and CRM (Salesforce & MS Dynamics). Non- (FY19 28%) Geographic e
Slide 16: Geographic expansion
US revenue grew organically 17% to $10.5m, (2019: $9.0m) driven by Product innovation partners and our core integrations for Magento and Shopify Strategic partnerships APAC sales, channel team expansion and Asia presence drove revenue from the region, which grew organically 37% to AUS$5.2m, (2019: A
Slide 17: Financial review
Financial review
Slide 18: Growth trends continue for both revenue and profit
50 Growth trends continue for both KEY £47.4m revenue and profit 45 Group Revenue 40 888% 35 Adjusted EBITDA Cash at period End Engagement Cloud Revenue growth REVENUE in £m 30 1555% 25 £25.4m Adjusted EBITDA growth 20 £18.2m 23% 15 Engagement Cloud Revenue CAGR 10 28% 5 Adjusted EBITDA CAGR 0 2009
Slide 19: Financial highlights
12% 91% 16% £25.4m Total revenue Recurring rev of Functionality Strong cash growth (£47.4m) total revenue revenue growth position & (£14.4m) no debt 20% 11% 12% 28% International Adjusted ARPC per month Messaging revenue growth operating profit grew volume growth (£14.8m) (£13.1m) (£1083) 19
Slide 20: Profit & Loss Statement
Profit & Loss Continuing operations Discontinued ops Group Group revenue Statement • Organic revenue grew 12% to £47.4m (2019: £42.5m) Jun 20 Jun 19 Growth Jun 20 Jun 19 Jun 20 • Monthly ARPC up 12% to £1083 (2019: £M £M % £M £M £M £966) International revenue Revenue 47.4 42.5 12% 7.5 8.8 54.9 • Now
Slide 21: Healthy balance sheet, strong cash position, zero debt
• Healthy balance sheet Balance sheet Jun 20 Jun 19 £M £M • Strong cash position Non-current Assets 29.0 22.4 • Zero debt Other Current Assets 13.0 12.2 • Bandwidth for strategic investments Cash 25.4 19.3 • Strong distributable reserves Total Assets 67.4 53.9 • IFRS16 adoption leads to increased No
Slide 22: Cash flow
• Strong cashflows generated from Jun 20 Jun 19 Cash flow £M £M operations Net cash generated from 15.8 12.3 • Further optimised cash collection during operations pandemic Net cash used in investing (6.7) (6.1) activities • Adjusted free cash flow of £7.7m (group); Net cash used from financing (3.0)
Slide 23: IFRS 16 adoption
• We have adopted IFRS 16 as at 1 July IFRS 16 adjustment as at 30 June 2020 2019 using the modified approach but not (£m) restated comparatives. Right of Use Asset 4.4 • The IFRS 16 P&L impact was a £72k Lease Liabilities 4.5 decrease on adjusted operating profit and a £58k decrease on profit after
Slide 24: Financial summary and raised revenue guidance
High proportion of recurring revenues Large percentage under contract Strong international growth Raising revenue growth guidance Healthy balance sheet and strong cash position 24
Slide 25: Our market
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Slide 26: Digital transformation accelerated
• Consumer behaviour has changed “2 years worth of digital • Marketers across the world have shown an incredible resilience and ability to adapt to transformation in 2 months.” Satya Nadella, CEO, Microsoft the next normal • A renewed empathy for customers and their requirements “Now, the path forwa
Slide 27: Return on email marketing and cross-channel
Average return for Higher customer Of in-store purchases Of consumers £1 spent on email lifetime value when are influenced by shop on more marketing a cross-channel digital transactions than one channel approach is adopted 27
Slide 28: Platform usage growth
YoY email send More automation YoY mobile messaging of customers using growth programs YoY growth more than one channel * All stats are sourced from the dotdigital platform 28
Slide 29: Competitive landscape by price tier
LOW (price: <$400/month) MID (price: $400-$30k/month) HIGH (price: >$30k/month) (Part of the CM group) (Acquired by CM group) (Acquired by SAP) 29
Slide 30: Forrester recognition and partner awards
Strong performer in The Email Marketing Forrester Wave™ and winning awards CG CG Chalten, Momentum a Leader Leader Leader ae t ia-Market | cies 2020 ohh 2020 2020 ™_ 2020 Partner Awards Partner Awards THINK BIG AWARD APAC a FORRESTER INNOVATIVE INTEGRATION EMEA a
Slide 31: Global marketing automation spend forecast
Global marketing automation spend is predicted to grow to $25.1bn by 2027 from $3.8bn today. FORRESTER’
Slide 32: Summary and outlook
Summary outlook
Slide 33: Business model strength and unchanged strategy
COVID has highlighted strength of business model – strategy remains unchanged Solid trading performance – majority recurring, contracted revenue Strengthened foundations of our international hubs – growing traction across all territories Investment in relationship-building and progress with all stra
Slide 34: Clear strategy and increased revenue guidance
Clear strategy to capitalise on market opportunity Revenue guidance for FY 20/21 increased once again following strong Q1 and October Increased investment to drive revenue growth Closely monitoring evolving COVID-19 situation – financial position, high revenue visibility and strong cash generation p
Slide 35: Questions
Questions {LIMA
Slide 36: Appendix
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Slide 37: Shareholders and global reach
• Liontrust Asset Management 18.1% • Directors 10.5% • Octopus Investments 6.8% • Investec Wealth & Investment 5.5% • Slater Investments 5.5% • Franklin Templeton Fund Management 4.9% • Highclere International Investors 3.0% Global reach • Herald Investment Management 2.6% • Baillie Gifford 2.6% Ger
Slide 38: See how dotdigital can help marketers
See how dotdigital can help marketers utilise their data, boost ROI and do more in less time. • General overview click here • Data click here • Segmentation click here • Email building click here • Automation suite click here • Reporting click here 38
Slide 39: Product release roadmap
New – 20four October release Soon Next Interactive email, powered by AMP Out-of-the-box custom insight data importer AI affinities and auto-segments Tax adjusted pricing support for product Revamped campaign comparison reporting Program enrolment enhancements blocks with Magento Premium messaging wa
Slide 40: Case study: Mr Beer
CASE STUDY Mr Beer Challenge: With the overwhelming growth of its customer database, Mr. Beer faced two key challenges. First, the lack of a strong automated email engagement programs and second, the company wanted to up its game in capturing customer attention and increase its sales through relevan
Slide 41: Case study: Goggles4U
CASE STUDY Goggles 4 U Challenge: The main challenge that Goggles4u faced was that customers weren’t engaging over email; open rates were typically low. The brand also had challenges around list attrition and what actions to take to reduce the number of unsubscribes. Solution: With the help of dotdi
Slide 42: 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