Dotdigital Group Plc · LSE:DOTD
Dotdigital — FY2021 Earnings Presentation
35 slides from Dotdigital's earnings presentation, November 2021
Slide 1: FY2021 Results Presentation
Milan Patel, CEO Paraag Amin, CFO November 2021
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 omnichannel technology vision marketing platform that enables brands to • A global business with a UK headquarters engage with their customers across all • 330+ global employees touchpoints. • 10
Slide 3: 23% organic growth and EBITDA ahead of expectations
23% organic growth and EBITDA Continued to build on our global Increased uptake of omnichannel ahead of expectations whilst footprint offering with a quarter of all customers navigating covid-19 now using more than one channel Significant investment in Financial position remains High level of confid
Slide 4: Our people and workforce by function and country
Continually striving to make Dotdigital one of the best places to work Strengthened workforce during the year, including sales, marketing, and customer care teams 143 121 48 34 UK - 266 Sales & Marketing Other IT & Development Client Services UK USA Australia South Africa Singapore Belarus Poland Ne
Slide 5: Connect, Empower: platform data and channels
Connect Empower Data collection Single customer view Data capture Audience analytics De-duplication Segmentation Data enrichment Lifecycle modelling Outcomes Profile unification Experience orchestration Grow Cross-channel campaign mgmt Retain CRM | ERP Zero & first Content & creative Influence CDP/D
Slide 6: Customer email campaign case study
• Six stage email campaign as main • Integration of existing marketing channel, including playable game comms to dotdigital revealing elements of new kit • “An incredibly efficient process” • Generated £16,000 in kit sales • 52% increase in revenue, 18% uplift in • “Reminder” email generated open ra
Slide 7: Growth pillars and strategic M&A
ORGANIC GROWTH PILLARS Strategic M&A Product Innovation Strategic partnerships Geographic expansion Expand our product Grow our customer Customer base or talent Deepening our acquisition; suite; base; strategic to strengthen our hubs providing organic Increasing our global partnerships; market prese
Slide 8: Our strategy
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Slide 9: Revenue recovered and customer adoption metrics
Revenue recovered Increase YoY in New UI languages Products synced in FY21 (or $81k customers adopting introduced this year in to Dotdigital in average revenue our cross-channel support of our APAC FY21 by recovered per package (with a 71% expansion: customers merchant per month) increase in MRR) In
Slide 10: Email remains a key channel; SMS emerging
Email remains a key channel • Engagement is consistent – send volume up 41.6% since 2019 • 70% of companies invest in email marketing SMS emerging as a key channel • SMS click-through rate increased by +300% since 2019 • Brands using SMS attribute at least 10% of earnings to this channel • EMEA acco
Slide 11: Marketing automation platform positioning by price
LOW (price: <$400/month) MID (price: $400-$30k/month) HIGH (price: >$30k/month) (Merged with (Part of the CM group) (Acquired by CM group) CM group) (Acquired by SAP) (Acquired by Intuit) (Acquired by Clearlake) Powerful, feature-packed and yet easy to use marketing automation platform, capable of d
Slide 12: Review: pillars of growth
FY 2021 Review: 3 pillars of growth
Slide 13: Product innovation: functionality recurring revenue
• Functional Recurring Revenue grew by 31% to £18.9m (FY20: £14.4m). It now Functionality Recurring Revenue Product innovation makes up 35% of Engagement Cloud (Engagement Cloud - license & functionality) recurring revenue. £18.9m Strategic partnerships • Improved end user experience interface, driv
Slide 14: Product innovation timeline 2020-2021
Customers drive meaningful Product innovation We launched self-serve SMS, experiences with transactional SMS improvements to our global SMS and email updates. Plus, we launch offering and an abandoned cart Strategic partnerships SSO for enterprises. dashboard Geographic expansion July 2020 October 2
Slide 15: Product releases and 2022 plans
✓ Cross-account reporting Product innovation Customers gain dynamic, real-time insights with Program and ✓ More self-serve integrations Segment analytics Strategic partnerships ✓ Back-in-stock Geographic expansion September 2021 October 2021 2022 ✓ Multi-channel attribution model ✓ Contact Unificati
Slide 16: Strategic partnerships and connector revenue
FY 20 Non- Magento, • Sales from customers using connectors to our integrated, 27% Product innovation 48% strategic partners’ solutions increased 14% to £25.4m (FY20: £22.2m). Salesforce, 8% Strategic partnerships • Revenue from Magento increased 11% to £14.3m Magento, Non- 29% Dynamics, (FY20: £13.
Slide 17: Looking ahead: geographic expansion and partners
Looking ahead Geographic expansion • Continued investment in new strategic hires in all regions with increased focus on building Global Premier Gold Microsoft Technology Partner Partner Strategic partnerships strategic partnerships • Further investment in our Strategic Partner Product innovation con
Slide 18: Geographic expansion: revenue by region
Revenue in the Americas grew 19% to $12.5m, (FY20: $10.5m) driven by Product innovation the strength of our partner relationships. Strategic partnerships APAC revenues grew 47% to AUS$7.7m, (FY20: AUS$5.2m), driven by a growing pipeline in Japan and the Far East from our Singapore-based team. Geogra
Slide 19: dotgreen sustainability initiatives
• ‘dotgreen’ initiative launched 2019 now embedded in organisational decision making • Now world’s first carbon-neutral automation platform • Obtained ISO 14001 certification • Corporate member of the Woodland Trust • Signed Terra Carta, part of HRH The Prince of Wales’ Sustainable Markets Initiativ
Slide 20: Financial Review
Financial Review
Slide 21: 10-year growth trends in revenue and profit
60 £58.1 m KEY 10-year growth trends continue for both 55 Revenue revenue and profit 50 Adjusted EBITDA 45 384% 40 Cash at Period End REVENUE in £m Engagement Cloud Revenue growth 35 30 482% £32.0 m 25 Adjusted EBITDA growth 20 £19.8 m 21% 15 Engagement Cloud Revenue CAGR 10 5 23% 0 Adjusted EBITDA
Slide 22: Financials: group revenue and profit
Financials Group revenue Revenue • Revenue from continuing operations grew 23% to £58.1m £58.1m (2020: £47.4m) £60.0m • Monthly ARPC increased 16% to £1,251 (2020: £1,083) £50.0m £47.4m Key Highlights £42.5m • International revenue grew 22% to £18.0m (2020: £14.8m) £40.0m £36.9m • Functionality reve
Slide 23: Licence model and recurring revenue
Licence model • Annual message plans with typical contract length of over 20 months and average customer tenure over 10 years • Charged as a function of audience +90% Recurring revenue size and messaging volumes • Invoiced monthly • Revenue recognised equally over life of contract (IFRS15) •Addition
Slide 24: Profit & Loss Statement
Group revenue Jun 21 Jun 20 Growth Profit & Loss • Organic revenue grew 23% to £47.4m (2020: £47.4m) £M £M % Statement • Monthly ARPC up 16% to £1,251 (2020: £1,083) Revenue 58.1 47.4 23% International revenue Cost of sales (10.4) (3.9) 166% • Grew 22% to £18.0m (31% of total; 2020: £14.8m, 31%) Gro
Slide 25: Balance sheet
Balance sheet Dec 21 Dec 20 • Healthy balance sheet £M £M • Strong cash position Non-current Assets 29.8 29.0 • Zero debt Other Current Assets 13.4 13.0 • Bandwidth for strategic investments Cash 32.0 25.4 Total Assets 75.1 67.4 • Strong distributable reserves Non-current Liabilities 3.8 5.4 Current
Slide 26: Cash flow
• Strong cashflows generated from Dec 21 Dec 20 Cash flow £M £M operations Net cash generated from 17.0 15.8 • Adjusted free cash flow of £3.8m (group); operations £4.3m (continuing operations) Net cash used in investing (7.0) (6.7) activities • Continuing operations EBITDA (£10.5m) Net cash used fr
Slide 27: Financial highlights summary
23% 93% 31% £32.0m Total revenue Recurring rev of Functionality Strong cash growth (£58.1m) total revenue revenue growth position & (£18.9m) no debt 23% 19% 47% 16% EMEA revenue US revenue APAC revenue ARPC growth to growth growth ($12.5m) growth ($7.7m) £1,251/m (£44.6m) 27
Slide 28: Outlook
Outlook
Slide 29: Outlook and investment proposition
Strengthened platform proposition in rapidly developing market Highly visible recurring SaaS revenue model Agile business structure with empowered culture Focused growth strategy Long-term vision and value proposition unchanged FY22 1Q trading in line with management expectations 29
Slide 30: Questions
Questions {LIMA
Slide 31: Appendix
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Slide 32: Major shareholders and global reach
• Liontrust Asset Management 16.4% • Directors 10.5% • Octopus Investments 9.7% • Slater Investments 5.3% • Investec Wealth & Investment 5.2% • Franklin Templeton Fund Management 3.2% • Baillie Gifford 2.9% Global reach • Herald Investment Management 2.6% • William Blair & Company 2.5% Germany USA F
Slide 33: What we sell: cloud-based marketing software
We sell cloud-based software to businesses that helps them send emails and marketing communications to their customers. • Design professional looking campaigns quickly • Send personalised messaging campaigns across multiple channels • Automate customer journeys such as welcome, birthday, and abandon
Slide 34: 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 34
Slide 35: 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