Second quarter 2012 in short:
- The Group continues to receive strong interest in its existing and new services. The Group continues to make significant investments according to its growth strategy to scale up its commercial capacity for meeting current and expected demand in the Nordic market and internationally.
- Group revenue for the quarter increased to EUR 1,126,000, an increase of 2.2 times revenue of EUR 518,000 in the prior quarter and more than 15 times revenue of EUR 72,000 in the year- ago quarter.
- Continues to demonstrate quarterly revenue growth – organically and through acquisitions – of 62.9% compound average growth rate over the last six quarters.
- Improved operating income: Core EBITDA for the quarter was EUR -212,000 compared to EUR -351,000 in the prior quarter (2Q11: EUR -246,000). Core EBITDA reflects the operating result before exceptional items, one-off charges associated with acquisitions, divestitures, public listings and capital raising efforts.
- Loss for the period decreased by approximately 30% to EUR -652,000 compared to EUR -932,000 in the prior quarter (2Q11: EUR -405,000).
- The integration of the Group’s recently acquired subsidiaries Scandvision, ENC, and Scandinavian Advertising is completed and the combined Group is generating concrete new business and synergy opportunities that contribute to both top-line growth and the bottom line.
- The Group continues its strategic plan of making significant investments in Mobile Loyalty Europe AB, the Group’s core mobile advertising business, with the objective to operate on a broad commercial base in 2012.
Significant events after the period:
- The Group raised SEK 18.1 million (EUR 2.6 million) in new capital through a private placement of 9,050,000 shares at SEK 2.00 per share.
- The Group has signed several international customer agreements, including Norway’s largest newspaper Aftonposten.
Operational and financial update
Having completed the acquisitions of ENC and Scandvision in the first quarter of 2012, the Group now pursues business opportunities with a broader and more integrated product and service platform to all of the Group’s target segments, including brand communication, media, and advertising.
As further detailed below, the Group is now structured with Mobile Loyalty plc as the parent company with three wholly owned subsidiaries:
- Mobile Loyalty Europe AB, with subsidiary Scandinavian Advertising AB;
- Scandvision Holding AB, with subsidiaries; and,
- Encons Nordic AB (“ENC”).
Together, these subsidiaries offer leading-edge, competitive and synergistic solutions around mobile advertising, social networks, and moving images. Their offerings continue to receive strong interest from a broad range of market leading companies particularly in the Group’s core target segments, including TV, media and brand companies.
In 2011, the Group started to transition its mobile advertising business into a more sales and marketing driven organization. This effort has progressed according to plan through the first two quarters of 2012, with the expectation of a more substantial financial effect in the second half of 2012.
The Group’s consolidated financial information presented herein comprises for the first time Mobile Loyalty plc, Mobile Loyalty Europe AB, Scandinavian Advertising AB, and Encons Nordic AB on a consolidated basis for three full months. Accordingly, the 30 June 2012 consolidated balance sheet comprises Mobile Loyalty plc, Mobile Loyalty Europe AB, Encons Nordic AB, and Scandvision Holding AB.
- Group revenue for the quarter increased to EUR 1,126,000, an increase of 2.2 times revenue of EUR 518,000 in the prior quarter (2Q11: EUR 72,000).
- Operating income continues to improve: Core EBITDA for the quarter was EUR -212,000 compared to EUR -351,000 in the prior quarter (2Q11: EUR -246,000). Core EBITDA reflects the operating result before exceptional items, one-off charges associated with acquisitions, divestitures, public listings and capital raising efforts.
- Loss before tax for the period decreased significantly (approximately 30%) to EUR -652,000 compared to EUR -932,000 in the prior quarter (2Q11: EUR -405,000).
During the quarter, the Group held its first annual general meeting (“AGM”); reorganized its corporate structure including divesting two minority stakes in Scandvision CPH and QuickSpot AB; and in late June, with the approval of the AGM, launched a private placement activity with the objective to raise SEK 18 million (approximately EUR 2.6 million).
Results of AGM
The AGM was held on 31 May 2012 at which 57.9% of the total number of shares outstanding were represented. All resolutions proposed by the Board were approved unanimously.
The AGM elected a new Board. Two new Directors were elected, Berndt Modig and Patrik Gustafsson- Sonne, who was also appointed Chairman. At the same time, two of the Board’s existing Directors Nicklas Gerhardsson, CEO and Sterner de la Mau, CBDO were re-elected to the Board. Jonas Thuresson and Mikael Kotanidis, both Directors, did not stand for re-election and resigned from the Board on 31 May 2012.
Corporate structure and divestments of minority stakes
According to its strategy, the Group’s organisational structure will be subject to further review. The minority stakes in associated companies will be either fully integrated or divested. During the quarter, the Company divested its minority stakes in Scandvision CPH A/S and QuickSpot AB, in which the Group held minority stakes of 25% and 39%, respectively.
Significant events after the period
Encons Nordic AB, the leading auction solutions provider to newspapers, announced on 10 August 2012 that it is continuing its international expansion by having signed a contract with Aftonposten, Norway’s largest newspaper with 1,120,000 daily readers.
The Group announced on 15 August 2012 that it had raised EUR 2.6 million (SEK 18.1 million) in new capital through a private placement to new and existing shareholders at SEK 2.00 per share. With the new capital raised, the Group can more aggressively pursue, finance and execute its growth strategy, and accelerate its efforts to deliver and implement mobile advertising solutions to TV and newspaper companies. Both new and existing investors participated in this private placement; none of these investors owns 5% or more of the Company’s shares. As a result of this private placement, the Company's total number of shares outstanding will increase by 9,050,000 shares to 55,915,493 shares.
On 17 August 2012, the Group appointed Mangold Fondkommision AB as its market maker for its shares that trade on Aktietorget. This is in order to provide liquidity and decrease the spread between the ask and bid price.
We are delighted to continue receiving a very strong interest in the Group, our companies, and our combined expertise and creative solutions. The integration of the Group’s entities has resulted in that our service offering has become better known in the market place and by our customers. Given the robustness of our go-to-market plan – in combination with recently raised capital – we are stronger and faster in winning new business.
Indeed, we very much look forward to continuing ramping up our efforts even further and developing a truly scalable and international business.
On behalf of the Board of Directors
Mobile Loyalty’s business model is based on revenue sharing with customers, which means our customers:
- do not need to invest in technology or personnel.
- do not need to continuously invest in maintenance and updates to keep up with i.e. new mobile phones being launched on the market.
- that currently have fixed and running costs for development, hardware, software, personnel and support can, in whole or in part, eliminate these.
- gain new, more and larger revenues via digital channels than they have today.
- gain a direct channel to their consumers and thus build up a valuable customer database