Bango (LSE:BGO) — Full Year results for the 12 months ended 31st December 2020

0:02 Good afternoon, ladies and gentlemen, and welcome to the BANGO PLC Full Year Results Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Just simply type in your question in the box below and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meets company dashboard, and we will send you an email notifying you when they're ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll, and if you could give that your attention, it would be greatly appreciated. And I'd now like to hand over to Paul Laby, CEO Matthew Garner, CFO and Anil Malhotra, CMO of BANGO. Good afternoon to you all.

0:55 Good afternoon, everybody, and thank you very much for your time. It's a pleasure to be with you today to talk through our results for the full year of 2020. I think 2020 goes without saying that the last twelve months have been a very turbulent year, lots of changes on personal and obviously a global level. And throughout all of that at BANGO, we focused very much on making sure that everybody inside the BANGO circle thrives in investors, partners, customers, merchants, payment providers and employees alike. And that focus on execution has allowed us to deliver a really strong 2020. We grew 70% in 2020, up to $12,200,000 in revenue, with end user spend approaching $2,000,000,000 A lot of that the leverage of the platform means a lot of that top line growth dropped straight to the bottom line. So EBITDA grew aggressively from last year, up 16 times to 4,600,000 I mean, we're generating cash, positive free cash flow, which we'll continue to use to reinvest in the platform, reinvest in technology to further grow and and and accelerate the growth of that business.

1:58 In doing all of that, we made sure not only do we deliver results, but we delivered results in the right way. We We became certified carbon neutral in 2020 for the first time with an ongoing commitment to maintain that level of carbon neutrality, something we're very proud of. And, obviously, a lot of towards carbon neutrality until the talks of 2030, 2040, 2050, and beyond. And in BANGO, we hit that in in 2020. I think what's more exciting for us is really not just the financial results we've delivered in 2020, but some of the other operational highlights that basically form the foundations of that growth for future years. Some of the new payment deals we talked about in 2020, the likes of BT and BritBox, the likes of Amazon and SoftBank, really before provide that foundation for growth in 2021 and beyond. And on the BANGO marketplace side, an increasing pool of payment data that end users spend approaching £2,000,000,000, we can use that to generate even more payment insights to allow app developers to target their marketing campaigns and find those paying users. And we saw 10 times more app developers engaged in that product at the end of the year than at the beginning, and they were using those those that product twice as much at the end of the year. So really, really great progress. And that, you know, that's the BANGO virtuous circle in action.

3:06 This is a reminder that virtuous circle is all about connecting merchants who have goods to sell with people who are who want to buy those through somebody on which we can a bill on which we can place a charge. That generates this end user spend and this payment data. From that, we can generate these payment insights to help the same app developers who have games in the Google Play Store that we connect to all over the world to target their marketing, find those paying users, which generates even more payment data, and that virtuous circle continues. Because the more payment data we have, the more payments insights we can generate. The more app developers use those payment insights, the more payment data it generates. Generates. The the BANGO's virtuous circle really in action. So with that, I'll turn you over to our CFO, Matt, and let him talk you through the financials. Thank you, Paul, and good afternoon, everyone.

3:55 2020 saw some record growth in revenues for BANGO on the back of five years of compound annual growth of 56%. 2020 saw revenues increase 70% from 2019, up to just over £12,000,000

4:12 Also for end user spend, which is our key performance indicator, this saw an exponential growth as well, rising from just over £1,000,000,000 in 2019, up to just short of £1,900,000,000 in 2020. All of this was done whilst maintaining the high margins at over 97%. And this shows the scalability of the BANGO platform to encompass a large increase in users whilst not having the incremental costs associated. These high margins have helped flow down to the increased EBITDA, which increased sixteenfold over 2019, up to $4,560,000 As far as the net profit goes, our profit from our core platform business raised to its first profit in 2020 at 1,270,000 up $3,430,000 from the loss made in 2019.

5:13 This combined with a profit generated from the sale of our audience business to NHN during the course of the year made our total net profit $4,680,000 This obviously flowed down to an increased earnings per share to 6,370,000 What's more pleasing as well is to see the cash generative items and free cash flow being positive for the year. On this slide, what we've done is compared our cash generated from our platform business. And again, that shows an increase while still investing heavily in R and D and sales and marketing, which is key for our future growth. On the left hand side of the graph, you'll see the cash and benefit that was arrived from the investment from NHN into the business following the good encounter with the joint venture and the audience business.

6:13 In summary, for 2020, we saw some very strong revenue growth of 70% while still continuing the high margins that we can maintain that we can acquire from our scalability of the platform. These produced great profits, 4,560,000 of EBITDA and also the successful acquisition of Audience in 2018,

6:36 where we took out key technology required for the development of our marketplace strategy and at the same time then found a route to exit, partially exit by way of a joint venture with NHN, allowing us to continue to hold some form of benefit from the Progressive joint venture as it proceeds through future years. More importantly, solid cash generation this year, which will enable us to continue to fund future growth, growing revenues and growing profitability.

7:09 Thanks, Matt. So a really good set of numbers, really solid growth and something we're very pleased of and very proud of, and we hope you as shareholders are too. But, again, as I said at the start, what's really exciting for us is the opportunity for future growth. So we thought in this section, we talked through some of the operational highlights that happened in 2020, some things that have happened since the end of the year, and not the high levels we see those playing forward in future years. The payments business growth has always been driven by this formula. It's about connecting more users, buying more routes, giving them more things to buy from more merchants, and using the data into the platform to help those routes really perform. And it's this sort of four factor formula which has driven that exponential growth in end user spend. So we look at each one in turn, and we can talk through some of the things that have happened.

7:54 Look at more users. Obviously, as I said at the start, the last twelve months with the pandemic have changed user behavior forever. They've accelerated online commerce. We don't see that as a blip at all. None of the data we have shows that people moved to online commerce during lockdown, and then as lockdowns end, ended, they moved away. This is a permanent shift in John's a permanent shift and a permanent acceleration of online commerce. There are more users using the platform now than ever before, and those people have stayed with it all the way through in and out of lockdowns. So it's not a blip. It's a step function we'll we'll continue to grow from an even higher base. The other thing you would have saw us announcing early part of this year was about t p our partnership with T Pay Mobile. So T Pay Mobile is a leading aggregator in The Middle East, Africa, and Turkey.

8:39 And it's a market that we've done very well in over a number of years with the merchants like Amazon and Google. We have around 20 to 30 connections in that market. But there's a lot of demand from the merchants connected into the BANGO platform to accelerate the deployment within that region. But it's a region not with those complexities, in some countries needing local licenses, and in many countries needing local people and local support. So by partnering with TPAY mobile, we give the BANGO merchants immediate access to the 610,000,000 people that are connected to the TPAY platform across all ages of very high growth region. And in the opposite direction, the merchants that TPAY have connected in the region have immediate access to the BANGO global footprint, allowing them to expand internationally and grow outside of the region. So very much a win win partnership and that absolutely aligned with our vision and our openness and our values as a company. We're all about collaboration, growing the ecosystem because we strongly believe that as everybody in the BANGO circle grows, we will naturally grow as a result of that.

9:36 If we look at more routes, we launched dozens more routes with the usual merchants, Amazon, Google, etcetera, in 2020. A couple that are of note is obviously our extension of the physical carrier billing carrier billing for physical goods in Japan from Amazon with SoftBank. So now supporting Dokomo, KDDI, as well as SoftBank, allowing people from the Amazon Japan store to buy anything from perfume, Alexa devices, audible subscriptions to groceries, but all charge all that using their carrier phone bill. One of the things we've been working on for a couple of years now is that subscription bundling business. And one of the things we've historically if you sort of if you think about the business model is, if you're a, you know, mobile a mobile phone subscription of a certain tier, you quite often can get entertainment packages sort of bundled in with that connection. And that's exactly what BANGO does is connecting streaming providers with sort of those mobile phone operators.

10:29 One of the items we expanded into in 2020, which is exciting for us, is into brick and mortar retailer. And the business model is simple. It's we decided to it with two of the largest US retailers, and the model goes something like this. So they they want to sell a a device, which is a smart speaker, for example. So they will entice people to buy that goods from them either online or in the store. And one of the ways they can do that is by bundling in or giving sort of a three month subscription as part of that. And it ties entices consumers to buy that goods. And then after that three month subscription period ends, that charge can go directly onto their loyalty card. That way, the retailer is keeping control of the customer, keeping them within their brand. It help them sell the physical product in the first place. It's keeping them within the brand, and then they can use it to upsell later. A good example being why don't you buy the subwoofer that goes with that smart speaker, and we'll give you another three months of a music streaming subscription.

11:19 That's exciting for us because that's not just a new that's an entirely new vertical that we can expand into. So our first two deals in 2020, but many more to come. And in 2021, later on this year, you'll see us announce making a announcement with with an energy provider, Again, bundling third party services with first party services, all with the goal of differentiating those first party services, in that case, electricity and gas supply, adding more value, keeping those subscribers for longer, and reducing the subscriber churn. Talking of subscriptions and moving on to more merchants. A lot of the merchants we added last year very much fall into that subscription business and very much dominated by OTT video providers. So these over the top video streaming content providers. So the likes of BritBox that we announced, but along with DocuBay and Epicon from India, but also on demand media.

12:07 On demand media is a company from Asia that has Korean, Vietnamese, and Chinese content that they can deliver on a global basis in local languages to expats all over the world. So really big opportunity, really big growth, and something that the telcos in particular are very interested in because it gives them a very sticky subscriber with a very unique and differentiated service. In 2020, streaming subscriptions went beyond just the video and music streaming services into games, and we extended our partnership with Microsoft to allow telcos all over the world to offer the Game Pass Unlimited and all access subscriptions. These new subscriptions are very high value, multiyear, and for the first time ever, bundle a physical games console along with a game streaming subscription. And you you can get the console funded over a few a two year period, as well as the same time being able to play those games on your five g mobile phone. Really exciting new development, and there's lots of news flow on that throughout the next three or four months.

13:05 We look at more insights. We've always very much focused on not just connecting and forgetting, but really making sure that that route can perform. Using the data in the platform to make payments as successful as possible and reduce any failed payments. One example of that is what we did we do in The United Arab Emirates. By looking at the data and using some of the marketing techniques that we've developed through the BANGO marketplace product, we could find groups of users that may be registered and then moved away from paying or registered paid once and then drifted away. And so by understanding that group of users, understanding the data, targeting them with offers, we can bring them back to becoming regular payers using carry billing. And that brought 20% of that population back in this particular instance to being regular payments using carrier billing. Subscriptions are, as we talked about, they become increasingly important. And there's a natural churn point with subscriptions. Every on a monthly subscription basis, your churn point is every month. So we've been looking at how we can use the data in the platform to increase that subscription renewal success rate.

14:03 With one operation in Japan, by looking at the the spending patterns of people across all the merchants that are they're connected to, we can time that subscription renewal so that it happens at a point when it's most likely to be successful, people are most likely to have money to spend, and credit on credit on which they can spend that. And that increased subscription renewal success rate from over eighty five percent to ninety five percent. Both of these are just examples of features that we're rolling out across the customer base in 2021, all of which will drive more end user spend. But it's features like these that are causing more and more people to standardize on the BANGO platform, Use the BANGO platform as a single point of entry for all the third party services. If you look at what we've announced with BT, deployed BANGO the plat BANGO platform initially to launch the Amazon Prime bundling services, but more recently, BritBox, and more and more new services to come. So over time, we're becoming that sort of standard entry point for mobile operators, retailers, any people in the energy sector who want to bundle more and more third party services to differentiate their first party services.

15:03 All this together gives us this increasing pool of payment data, and that payment data is full of valuable information. We talked about how we're using not only to optimize the payment connections, but also how using BANGO Marketplace, we can help app developers in particular better target their marketing campaigns. So why is that data so valuable? That data is so valuable because in the world of apps, 80% of the spend is driven by 5% of the users. And the BANGO platform knows exactly who that 5% of the users are. So by creating these anonymized audiences, these groups of users, talk about it like a lens, we can allow the app developers to focus their marketing campaign, get a better return on their investment. We call that purchase behavior targeting. So that five that illusive 5% can be really, really focused on using BANGO Marketplace.

15:52 2020 is our first full year of trading for BANGO Marketplace, and we saw great growth throughout the year. The growth is driven by these three factors. It's that volume of data. We talked about the payments business and the exponential growth there, almost 2,000,000,000 of end user spend, and we're supplementing that with payments data from third parties as we look to monetize on that behalf monetize the data on their behalf, including credit card data. With more and more of that data, it's bringing more app developers to the platform. We started the year with our own 200. We ended the year with our own 2,000, but there are hundreds of thousands of app developers out there. So one way to address that market is also by using channel partners. So our channel partner program, which was launched last year, now has 20 active participants. These are people that are providing reselling the BANGO audience capabilities in countries where we don't have a local presence, but also as as agencies, as part of a a fully outsourced and and and service marketing marketing offer. So it really expands the reach of that of the app developers we can get access to to the smaller app developers as well as into different countries.

16:56 Once we have an app developer engaged, obviously the goal is to get them to use the BANGO audiences as much as possible and to run as many campaigns as possible. So we introduced new pricing schemes of more of a subscription model that makes it easy for them to use multiple audiences across multiple titles in multiple countries. Some app developers also wanted to do some very specific targeting. And and down to a potentially a list of titles in similar games or similar apps, they wanted to really find a very specific group of users. So we introduced some technology called tailored audiences, which provides exactly that functionality. It provides the ability to be very specific about what criteria, what similar apps people might be purchasing so you can have a smaller audience, but an audience that generates really, really large returns on marketing. When you put more payment data with more app developers and get them to run more campaigns, what you do is you get more paying users. And that's the BANGO Virtua Circle in action because those paying users go on to make more payments, which generates even more payment data, allowing us to generate even more payment insights.

17:54 And on this side, you can see some of the success that some of our customers in all sorts of different sectors are having all around the virtuous circle.

18:06 So looking forward for growth, we'll continue to do the virtuous circle is really our strategy for growth. Continued execution will mean continued growth on the payments business, generating an increasing pool of end user spend, the routes we've won in 2020, the new verticals that we entered, the new verticals we'll enter in 2021 and using that data to make those routes better before. That will give them this increasing pool of payment data. And using technology around that, we'll be able to generate even more BANGO audiences to help app developers in more and more countries with an even better targeted group of users for them focused on marketing. That will naturally bring more app developers into the circle. We'll start to use BANGO audiences as a default part of their marketing campaign. And when you put that together around the virtual circle, that results in significant free cash flow.

18:51 We'll use that to reinvest, maintain our technology leadership, to invest in R and D and invest in sales and marketing to continue to grow the overall business. In terms of looking at KPIs to track that, we think there are four KPIs that are important. Two of these you will have seen already in my slides, that's end user spend and revenue. And you can see the exponential growth on the top half of this slide. BANGO Marketplace is obviously a new business. We report just a single line of business, and so we thought it'd be important for investors to understand the development of that business. So there are two KPIs we've created specifically around BANGO marketplace to help you better understand who that business is developing. One of those I've touched on already is and you'll have seen in our interims is this talk of app developers engaged, going from 200 at the start of the year to 2,000 at the end. But hundreds of thousands of potential customers out there, which will address through direct sales and marketing as well as through the channel part of the program.

19:43 Final KPI in the bottom left is new, BANGO audience days. And that's a measure not just of the number of app developers engaged, but how often those app developers are using that. So how many campaigns are being running, how many different markets on each day, all total together within a calendar month. And you can see that's grown by a factor of about 20 from across last year. So these are KPIs we'll continue to report on so you can get a better understanding of how that business is progressing. And our follow our focus, as we talked about before, has become the technology behind every payment choice. If you think of it very simply, twenty years ago, Google revolutionized marketing by allowing you to target our marketing and what people typed in a search bar. Facebook, ten years after that, allowed you to target that marketing based on what people have clicked that they like. With BANGO, we can target that marketing directly at what people have paid for, this purchase

20:32 behavior targeting, find that illusive 5%, and that's what we'll make as a technology behind every payment choice. So thank you for your time, and I think we have thanks to everybody for submitting questions. And I think we've had some in advance as well. That's brilliant. Thank you very much indeed to to Paul and the team. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while the company take a few moments to review the questions submitted today, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard. I'd also like to remind you that your feedback is important to the company. Immediately after the presentation has ended, you'll be redirected in order that the company that you can provide feedback in order that the company can better understand your views and expectations.

21:20 Paul, obviously, as you've just stated, investors did have the opportunity to pre submit questions, and thank you to those that did. And what I would propose to do is just start off with those ahead of them addressing the questions that have come in the live event. The first question, and I guess the first two questions that were presubmitted, I'll combine them together. Conversion rates of EUS into revenue has dropped from 65.51 basis points in 2019 to 50.70. What is causing this? And what are you targeting for 2021? And also, there was a 2.78 nontransactional payment associated with the licensing of software platform and technology. Is this something you anticipate annually? Or should these be treated as one offs?

22:01 Yes. It's a good question. I can I can see something in the chat window? It's asked asked asked a very similar question. So firstly, if look at our ratio of revenue and user spend, it's not actually dropped. It's exactly the same as it was in 2019. And as the revenue mix changes, we expect it to bump up and down, but overall, it's flat between 2019 and 2020. I think the calculation was done taking out what is listed in the annual report and broken out as sort of non transactional revenue. That sort of split has come around for two reasons. Firstly, some of the accounting standards have changed. So IFRS 15 for those accounts in the audience is a new accounting standard regarding our revenue is recognized and reported. And what we talked about in 2020, we've seen some new types of revenue. That platform revenue we talked about, where we become that standard interface, is one good example of a new revenue stream. And that's rather than being necessarily a percentage of the transaction through the platform.

22:52 It's a capacity based software license fee that's paid quarterly with a maintenance fee and sometimes with an integration setup fee. So that different types of revenue stream combined with the introduction of IRS 15 means we need to break that out in the annual report in a in a slightly different way. And so in the reporting, we've broken out as sort of transactional payments, which are those related directly to end user spend as a percentage, as well as the marketplace data from from selling BANG audiences, and there's sort of the other category, which is a combination of many different things. The the biggest example being the the platform license fee that I've described earlier. If I'm honest, I'm not sure it's a particularly helpful split. These are just different ways of charging for the platform, different ways of monetizing, and clear license fees on a on a on a software license basis that maintenance recur every year. So we don't track that split internally to us. It's it's the aggregate revenue that's important.

23:41 And, you know, in terms of the question, should those continue? Then, yes. Absolutely. But when we look at it, we look at it all added together. How would we monetize the BANGO platform?

23:50 No matter how we've charged for it, how we've invoiced it, or what the accountings accounting standards say, what's the best way of measuring it? And that's looking at the the overall revenue number, which you can expect to continue to grow. Thank you. The other presubmitted question, if I may, and I I do believe you did touch on this in the presentation, but it says, can you expand on what are the greatest opportunities you see from the t pay mobile partnership?

24:13 Yeah. That's that's a good question, Azan. And there's just such a big demand in in The Middle East and Africa for for for for from the merchants we have connected to the platform and how they want to expand. So for us, that was all about how do we expand in the quickest possible way in the easiest way. And the best way to do that was to part was to partner with a company who has a really strong embedded base in that region, people in multiple countries, the licenses in certain countries like Egypt where you need a license to to operate carrier billing. And so it became sort of the the natural choice to to partner. And what was aligned with, you know, how

24:44 we've always thought about the business and the focus on the ecosystem and focused on the growth? Hello, John. Yeah. So, yeah, I think that's that's right. So we BANGO, as Paul said, we do we've grown our business very successfully through partnerships over the whole lifetime of BANGO, and we were strong believers in partnering. We think the the BANGO platform itself is kind of a core asset, a core technological asset that BANGO has to offer as our main USP. And therefore, it's it's satisfying when that view is is endorsed by partners like TPA who say, you know, we'd like to to benefit from the BANGO platform, the BANGO ecosystem by joining it, which in essence is what the nature of that relationship with TPAY is. It's good for our customers because our customers take a long term view. They see Africa in particular, and that whole Middle East Africa region as being a long term growth opportunity.

25:35 It's a very, very highly populated Android market, 80%, 85% of smartphones are Android based. And so BANGO's relationships with Google and Samsung and Amazon and the like can really prosper as a result of that. And we looked at the differences between investing directly ourselves in that market and partnering. Partnering makes a lot of sense. And so we look forward to it as being a very successful partnership. Thank you very much indeed. So that takes care of the pre submitted questions. Perhaps if I could ask Paul to bring up the Q and A tab. Obviously, you'll see a number of questions there from investors. You'll see the question and the name of the investor. Perhaps if I could ask you to read out question, perhaps who it's from and an appropriate response as and where that works. So if I could leave over to you, and then I'll pick up at the end. Yes, sure. And thanks, everybody, for submitting the questions, and please do keep them coming.

26:31 So the question from Patrick Allen, I'm going to paraphrase a little bit because it's a long question. But it relates to the intangible software assets relating to this disposal of audience, the creation of that JV. You'll see that a chunk of that on the balance sheet, 5,300,000. Just trying to understand the accounting

26:48 treatment of that. So I'll let Matt answer that one. Okay. Thank you, Paul. Obviously, Audience was acquired with the view to use some of their software that they had available to develop the BANGO marketplace more quickly. Once that was taken on board and the joint venture was acquired, we wanted to retain that IP for the BANGO marketplace within sorry, for BANGO marketplace within BANGO. So therefore, those that IP was taken out of the audience business and put into BANGO itself, hence the additional amount of software. We did have the discussions with external audit partners audit parties and professional advisers on that value. Yeah. So I think I think it's a so it's a bit of a, like, as a coaching treatment question. But I think the the key point there is if you look at why we did the acquisition of Audience, we did it to take technology out to allow us to accelerate BANGO marketplace.

27:42 It does allow us to launch that product a year earlier. And then we've launched BANGL marketplace. BANGL market marketplace remains entirely within BANGL. But we're left with the audience CDP business. Joint venture is a great home for that. It allows us to generate a profit, and you see from the in effect, the the gain on the on the on the in the accounts this year from the disposal and the creation of that JV. And that's after we've already launched the product a year early using that technology. And because we're 40% shareholder, we'll generate profits in future years as as that business continues to grow, which with NHN's investment of cash as well as technology and data science know how really has a lot of promise. So we're very excited about the for that future business.

28:23 Let me scroll down the questions. See what I think we've answered another one, I think. What I could what competitive pressures are we experienced? What are your main competitors? And what do you feel is your USP? That's question from Simon Sea. So, Anna, I'll let you Yeah. Yeah. The market we're with market we're operating, which is the the expanding vast expanding digital economy, not just app stores, but also this whole growing area of digital streaming services that you will see emerging from, you know, the the big names, Amazon Prime and and Netflix. But recently, in the last twelve months, Disney plus has made a big splash, HBO. We announced we launched BritBox as a bundle with BT during the course of 2020. So it's really expanding markets. So there's no there's no real pressure in terms of market opportunity, addressable market size. That's continuing to grow, and so we have a significant opportunity to expand our business into that growing market. And and a key component of our growth in recent years has been organic growth as a result of our partners expanding their businesses within a rapidly expanding market.

29:29 Generally speaking, the you know, what's the alternative to using the BANGO platform? In most cases, the alternative is considered as a sort of do it yourself solution. So if I if I think, for example, around why have telcos starting to standardize on the BANGO platform for payments, but also offering these bundles of third party streaming services, most obvious example. Before, when it was a one off bundle, you know, they might have done an integration directly with the merchant. But as they see much, much bigger opportunities in this business, they need technology that allows them to quickly and easily bring these product bundles to market from multiple third parties, sourced from multiple third parties. And so we're seeing an increasing demand for the BANGO platforms becoming that technology that they use to run all of their products and services. For the example of the global telecommunications company we gave, they decided to just deploy the BANGO platform because it's a platform that's designed specifically to allow multiple third party services to be offered at scale. We're actually also seeing some of those merchants, whether it's an Amazon or or or another merchant. Microsoft, with the Xbox bundles being the most recent example you've hopefully seen, they also see that there are opportunities to offer better bundles which generate higher levels of adoption because of all of the data insights that BANGO develops across the business. We have a whole of market view of how customers engage with these services, whereas an individual merchant can see only how customers engage with their service, not another

31:00 service. And a telco, for example, now you see how their customers engage with merchant products, not what's the rest of the market doing. BANGO uniquely has a whole of market view. So the insights that we can generate, which help our customers grow their business, they can't possibly generate on their own. And so that, I think, helps, hopefully, answer the question on

31:20 competition. But also, there's a question on our USP. It really is the BANGO platform. It's the data insights we get from that whole market view that could put us in a position uniquely that we can help customers grow their businesses in ways they couldn't do on their own. Thanks, Arnold. And I think there's another one here that you might want to make a start. A question from Nick Jay on great progress. How big is the market opportunity? And what do you see as the greatest risk to your strategy? Strategy? You wanna make Yeah. Yeah. So, Mark, good good question, man. One of my jobs is trying to figure out both quantitatively and quantitatively what the size of the market opportunity is. We we put some numbers out from time to time, usually on a strategy day, which, unfortunately, we didn't do in January this year because we will all be told to stay at home. But later in the year, hopefully, we will be able to do a strategy day and do meet meet some of you. And so we use that opportunity to size the market. The in terms of of the payment side of the business, at the moment, there's there's just just between the app stores, there's about a 120,000,000,000 of end user spend, and that's growing rapidly each year.

32:21 Of that, the current estimate is about $2,425,000,000,000 is spent on all so called alternative payment methods like charging to phone bills, which is where BANGO really specializes, as you know. That is forecast to grow next two, three years to around 40,000,000,000 spend. So so market size is significant and growing. In terms of the the data business, the BANGO audiences, there there's around about if we just focus on app developers alone, the app developers are believed to spend around about $8,090,000,000,000 every year to to get a a slice of that growing a $120,100 to $180,000,000,000 end user spend in that market. Of that, around about 10 to 15%, so somewhere hovering around the 1,000,000,000 mark annually, is spent from those ad budgets on targeting data.

33:14 So when you run an advertising campaign, how do I focus that advertising campaign on user groups that are more likely to be interested in my products or service? So so BANGO falls into that addressable market, whereas we sell off, we think offering around about 1,000,000,000 just within the app developer space today. And so that's our addressable market there. There are another way we think about it is there are about 200,000 developers who charge users to use their app in one way or another, download or increasingly in app charges. We've engaged with about 2,000 of them by the end of twenty twenty. It's 200 or so at the beginning of twenty twenty. So there's a there's a lot of headroom in terms of market opportunities there for us to grow into too. Thanks a lot. I guess a question on risk is it is it going? I think, hopefully, the one thing you get out of today is is just the volume of opportunity ahead of us. And other than the usual risk, which you can read about in the annual report, one of the things we have to very carefully focus on is it it is focused, actually, and making sure that we're putting our resources, both from a technical as well as a sales and marketing position in in the right place. And when we enter new verticals like the energy sector, like the brick and mortar retailer sector, we do so carefully. The good news is the BANGO platform provides that agnostic approach so we can do a lot of that without any real technical investment.

34:28 But clearly, it requires people and effort to enter those big markets. So I think alongside with the data modernization, you know, continuing that focus of making sure we're putting the resources that we have in the place of the biggest opportunity to generate that biggest return is one of the things we we spend a lot of time on

34:45 and and many quite often qualified out of opportunities because there are not that they're not big and interesting, but because there's we think we can get a better return in other areas. Scrolling down the questions a little bit. The question from Dan m, should we be concerned to the end user's BANGO has slowed and he's no longer doubling year on year. So we doubled for sort of six consecutive years. In 2019, we did 1,100,000,000. We did just shy of 2,000,000,000 this year. So you can if you've programmed it the right way, so you could you could argue that it's doubling. But it's still incredible growth. Right? At a very arithmetic level, it it grew 70%. Clearly, can't continue to double forever. Or very soon, we would have the GDP of the entire world, so clearly, that's that's not possible. So should we expect it to see growth? No. We're not concerned about that. At the revenue growth, 70% year on year.

35:32 It's a it's an important measure. It's that sort of like the the volume of data we have to monetize and tools that's more important from that measure almost than any other. And we'll continue to see, you know, billions of end user spend added every year as we sort of the roots we've got existing continue to grow as we launch new services like the Xbox. And as we, you know, to migrate customers over who wanna use that sort of platform approach that we talked about to integrate all third party services. No. Absolutely, you shouldn't be concerned. I think it's it's a bit like the two KPIs we introduced by BANGL marketplace. When businesses are early on in their development, it's useful to have some of the leading integrated KPI. And then user spend was a good one for the famous business. We're at the point now where the volume of revenue is higher than actually revenues. Probably the more important measure overall. But, no, you shouldn't be concerned and, you know, growth is growth is still very strong.

36:22 We've tied it to the next question from James. He said revenues grew 70% last year. Can we expect expect similar revenue growth this year? So maybe if you subscribe to the relevant forums, you'll see Liberum's estimates in the market. The the we obviously put a very aggressive forecast in the market, which we beat in 2020. You'll see moving forward, I think the the forecasts are a little more conservative. But as I as I said earlier, you should get one thing from this, and that's the number of opportunities ahead of us. So we are grow a growth company. We're focused on growth. We will reinvest, the cash that we generate to fuel that growth. So that's where all of our attention is and that's what we want to deliver for you as shareholders. Sorry, I'm just rolling up and down. There's so many questions. Thanks everybody for your Sorry, I went the wrong way.

37:15 Paul, so I'll quickly answer Paul's question. It's not my question. It's a question for Paul. I don't think it's me. Yeah. So so that that's an interesting different outline of questioning about the marketplace and payment monetization business and how does that fit within a regulatory framework. BANGO has operated within regulatory frameworks for all of our life, actually. Payments itself is is quite heavily regulated as a business. You're handling people's money. There are certain requirements which are common across most markets and tougher in some markets than the others with respect to providing users with transparency about charges on their bills, users opting in to accept charges,

37:54 as you might imagine, recurring charge payments, subscriptions, which have seen significant growth in the BANGO business in the last twelve months. That's very heavily regulated. Users have to have really clear opt ins. They have to be able to opt out at any moment. So so we've operated in that regulatory environment for some time now. The data monetization business itself is is regulated, so consumer consents are regulated. Just to clarify before I say more, we we don't we're not in the business of selling payment data. So but one the things BANGO does not do is sell payment data. So the data that that we collect and monetize on behalf of billers, like telcos, for example, is is provided in the form where it can be used by a developer to market without them ever receiving that data. They never receive that data. There's never any data transfer.

38:45 It's it's there's some quite clever technology in the background which allows us to create an audience that's compatible with a marketing platform like Facebook, make that available through the Facebook marketing channel. The developer then instructs Facebook to target an offer to individuals within that audience. Facebook then does that, and then the audience that BANGO created is withdrawn from the platform. So at no point does that does that advertiser, that developer ever gets touch touch it. So there aren't any issues around data solved. We have we implemented from the get go a triple lock mechanism to ensure data was secured and secure secured compliantly. And I'll just expand just very quickly explain that. The first lock is the data can only be used if consent is provided for that data to be used.

39:37 Obviously, the relationship between the end consumer whose data it is is with their billing provider, so their telco or whoever whoever else might supply the data. And the billing provider manages and controls the the customer's opt in choices. So we only ever receive data for BANGO audiences that has been provided with the necessary consents. The second lock is BANGO then makes that data non PII. It cannot be personally identified. And we do that using industry standard encryption methods. And, of course, the data is always in aggregate anyway, and it's turned into these audiences that that kind of companies like Facebook that use the same kind of encryption methods can simply map and allow adverts to be provided. The third lock is the marketing platform. The marketing platform controls the user's wishes regarding seeing adverts.

40:30 So a user could, for example, have said, I'm happy for my data to be used to receive promotions, relevant products, and services, and then told Facebook that it only wants to see these kinds of ads. It doesn't want to see another kind of ad, and Facebook controls those. So at three stages in the process, there are controls and mechanisms in place to ensure consumer consents are known about and respected and that consumer identity is concealed and never revealed. Thanks, Anna. The question from Peter D relating to the marketplace business. Says, in H2, you added 400 app users much reduced from H1. Is this a temporary slowdown, and do you expect growth from app users to increase for the run rate in h two going forward? So the growth in things sort of changes as you go throughout the year. So, obviously, the second half of the year, focus on bringing on channel partners to help us scale that moving forward.

41:22 But, also, we've attracted some of the bigger app developer families onto the marketplace. So some of the customers we added that sort of basic counters won in the graphics on KPIs have fifteen, twenty, sometimes 30 app titles that they're looking to market. So they're sort of got co ops or conglomerates with multiple apps, and he's bringing all of those bigger customers in the second half year. There were more campaigns in parallel. This is where you've seen that massive spike up in that BANGO audience days, that new KPI, which measures the real use of audience in campaigns. And that's one of the reasons we introduced that second campaign because the first one wasn't telling necessarily the entire story. Still incredible growth factor of tenth through the year. Big opportunity ahead. When you combine that with the customers that have multiple app titles, they're using these audiences more and more regular, that BANGO audience days is a is a good measure of that. So you sort of need to look at the two together.

42:10 But there's you know, the growth of that business continues to accelerate. Every month, the overall growth and the size of that business gets bigger and bigger, and it's something we're very excited about moving forward. And in the long term, at least we see that being larger than the payments business. It will be it will be the biggest part of the payment business. But the nice thing is, though, it's centered around this virtuous circle where growth in one feels growth in the other. There's a question on competitors, which I think I know I think you've answered that one. So we'll we'll just interesting. We'll skip over that one. And a couple of questions on the on the audience JV, but one about from Tim D about when is it moving to profit? And one from a different Paul L about with BANGO to share, why would NHL allow us to to value to pass back to BANGGO from from that entity? So I think there's a a couple of elements to that, especially, obviously, we're we're a minority shareholder. We own 40%. It's accounted for in the equity method. But, actually, we're very so Ray Anderson, the cofounder of BANGO, along with Donald, who's our executive chair, also sits on the board of what we call New Deep. So that's the home of the audience CDP business, and he's the he's the joint venture with NHN. So very actively involved in that business. And and and and the partnership with NHN goes way beyond just what we do in that joint venture. We actually started partnering with them back in 2019 when they became a data supplier. So we brought their credit card data and monetized it on their behalf within BANGO marketplace to the app developer market. And their partnership has continued in in in that mode. It's continued in the mode where we have the joint venture together, and it's continued in the mode where

43:41 actually they took a stake in BANGO initially at 4.7%, which they've since increased by buying shares on the open market It's just short of of 7%. So a very strong strategic partnership. We're very close to NHN. We can help them, we think, expand internationally. They can certainly help us in Korea. The data being just just one example of that. They have very big ambitions for that joint venture, and the knowledge and the and the investment that they've made in that will allow that to well, there's an effect to sort of grow that joint venture to together for sure BANGO shareholders to benefit that because we still retain that 40% ownership. So hopefully that so let's address those questions. Let me question from Bob L. What portion of your deals last year were bundled sale of mobile payments and data? And how do you see this changing this year and next?

44:33 Not sure I fully understand the question, I'll sort of make a start, and I'll I'll ask Adele to to sort of to apply his intelligence to that, which will although I'll give a better answer. But I think if you look at sort of the payments business, one of the things that attracts people to use the BANGO payment platform are the data insights we generate. We actually made that payment room for that subscription bundle, that subscription renewal success rate that attracting users back to make payments regularly. So the data of the platform is always attracting people into the BANGO platform because we don't just wanna connect to the you know, we're not plumbers. We don't just sort of put the pipe in. We want water to flow as fast as possible through that pipe. So that's always what's attracting people to the BANGO platform. When you couple that with the data monetization of BANGO marketplace, we revenue share part of the sales from that back to the mobile operator because, in effect, they have the control of the data as as Arnold talked about.

45:20 Then there's another read more reason for people to come to the platform. So more and more, the overall platform benefit, people are joining maybe for one element of the platform, but very soon looking to take advantage of all the others. I don't want anything to add to that. Yeah. No. Worries. I think just quickly, the question, Bob is is an interesting one. Think we we need to to try and explain the different the different two different parts of the business better perhaps. But the we've always sat in the payments business behind the big app stores and big players like Google and and Amazon. And there are the reason why there's any payment activity at all is because there are thousands and thousands of developers and content owners selling through those stores. And, historically, BANGO has benefited from the fact that there are thousands of developers selling through those stores. And and if someone chooses to buy their product, finds out about it, downloads it, chooses to buy it, BANGO can process that payment and and generate revenue from it. With the BANGO marketplace product, we've we've actually sort of reached through the store to the developers and said to the developers, we can help you generate more payments, capture more customers, and generate more payments using the data insights we have. So in business model terms, we charge the use of those data insights in the in the form of sharing I talked about when I asked the question on on base security.

46:38 We charge fees for those, but those fees are separate from the mobile payments fees that we collect in conjunction with with mobile upgrades and people like that. But but the the reason why virtual circle is an interesting way of thinking about it in your mind was although we don't sell data insights and payments bundled together, the increasing usage of each of those BANGO products creates this virtuous circle. So the business as a whole grows because of the growth in activity in those two areas. Thanks, Alan. A couple of questions now on sort of market growth. There's a question from James C. And is there a chance of a global Amazon rollout? I think that's probably a better question for Amazon than rather those. But a number of years ago now, we made the investment to make a platform support the the building for physical goods. And, obviously, with Amazon in Japan, we now have the three largest operators out there. That's actually quite a bit of work if you look at the fact, you know, local taxes, fact that the goods ship at different times, you might return part of an order. It's a very different proposition. So the investment that we made in the platform a number of years ago really paid off in the success we're having with Amazon in Japan.

47:40 And it's worth pointing out that there are some markets where it's not possible to to build physical goods or our regulatory constraints. But likewise, there are other markets where we think it it actually is very applicable, not just to Amazon but to other merchants as well. So especially in certain parts of Asia, is the opportunity of a further rollout of that physical the billing for physical goods over over carrier billing? If I if I'm genericize the question a little bit, then absolutely, certainly to other markets. Probably not global, but certainly to other markets. Another question from Bob l about the contract with Xbox and operators and made regions products, opportunities to expand. So we've had a partnership with Microsoft for a number of years now, all focused around sort of carrier billing for the Microsoft Store. But as things move to more subscriptions, the the extension of that partnership is basically focused initially on the Xbox All Access and Xbox Game Pass Unlimited subscriptions.

48:33 Game Pass Unlimited gives you unlimited access to multiple games across multiple platforms, so not just in the console, but on your five g phone or on your on your PC or on across all sorts of different platforms. The All Access subscription takes up Game Pass Unlimited and bundles it with a physical console, which you pay for as part of that subscription over a period of time. The focus we're working on with Microsoft is rolling that in in telcos in different markets as they look to launch that in different markets. So, yeah, I think the best advice there is watch out for the announcements over the next over the next sort of month to two months, and you'll see the start of that rollout, particularly around Western Europe and in North America. That one we've answered already. Question about revenue concentrations, the 50% of revenue from three partners. How do you see the concentration going forward?

49:21 I would say I guess I'm so I'm not quite sure, Patrick, how how you sort of sort of calculated that. And I think, generally, if you look at our revenue mix, our customers are getting increasingly diverse. We're not we're not dominated by one large merchant. You know, we have Google, Amazon, Microsoft, Samsung, Spotify, Netflix, a whole host of merchants connected to the platform. The new ones we've added in 2020, DocuBay, Epicon, BritBox, etcetera. So the the spread of merchants is increasingly growing. On the payment provider side of the platform, the number of operators we're connecting to is all always growing. As we move into other sectors, it diversifies away from just the telco space into the energy sector, retailer sector we talked about. And then when you have the data monetization business and you sort of bring in the app developers as part of that, I don't think you'll find a com another company that has a a sort of diverse customer base as we do. So we feel very comfortable from a revenue spread perspective because we're spreading sort of every dimension from merchants, payment providers, as well as just the type of customers as we as we move through the data monetization business. Business.

50:22 Paul, I think just looking at that, I think you've probably taken on most of the questions that have been submitted by investors. So thank you very much for doing that, and thank you to the investors for sending those questions in. Obviously, we're coming up to the hour as well, so perfect timing. Thank you for that. Perhaps I could just ask you for a few comments to wrap up. I know investor feedback is important to you. And then perhaps I could redirect investors to give that. Yes, sure. So I guess firstly, thank you all for your time. Know that this is a busy month for results. So if you own multiple stocks, you must have joined many of these. So we thank you for spending the time with us. And thank you for your continued support. 2020 was a great year. Very proud of what we achieved, but it's really just the start of that journey. We've made that very clear transition into profitability, but growth is where the focus is.

51:07 The opportunities are many. We look forward to updating you on those through news flow throughout the year, but also in through similar events such as this as we report our interims full year results. And then, hopefully, later in the year when we can get together face to face, we'd love to see you in our strategy case. So thanks again for your support. We very much appreciate it, and enjoy the rest of the day. Paul, Matthew, Anil, thank you very much indeed for updating investors. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide feedback? If you access this meeting from our website, then the feedback page will appear. But if you access this meeting via the link sent to you by email, you'll simply be asked to log back in, to submit your feedback. And if we could encourage you to, give your company your views and expectations, that would be fantastic.

51:55 On behalf of the management team of BANGO PLC, we'd like to thank you very much indeed for attending today's presentation. That now concludes today's session. Good afternoon to you all, and thank you for your time.