Mobile Loyalty: Third quarter 2012 update

Mobile Loyalty plc, the mobile advertising company traded on AktieTorget, Stockholm (ticker: MOBI SDB)* (the "Group"), announces an unaudited operational and financial update for the third quarter of 2012, ended 30 September 2012.

Financial Highlights

• Group revenue for the quarter of EUR 817,000 (3Q11: EUR 210,000), an increase by almost 4 times compared to the same period last year. Compared to the second quarter 2012 the revenue decreased from EUR 1,126,000, which is mainly due to seasonality effects with ENC.

• Despite seasonality effects, the Group continues to demonstrate quarterly revenue growth - organically and through acquisitions - of a 42% compound average growth rate over the last seven quarters.

(Please see chart in attached pdf-file).

• Due to accelerated investments in the launch and market introduction of new solutions and services, operating income as core EBITDA** for the quarter amounted to EUR -808,000 compared to EUR -212,000 in the prior quarter (3Q11: EUR -185,000). 

• Starting in 2Q12, with further acceleration in 3Q12, the Group has transitioned from a product development stage to a sales and marketing driven organization that launched a number of solutions and products in earnest in 4Q12. Accordingly, we have invested heavily in people and building the organization, as well as in marketing and product-launching activities leading to higher expenditures. Therefore, the loss before tax for the period decreased to EUR -1,209,000 compared to EUR -652,000 in the prior quarter (3Q11: EUR -807,000). 

* The Group recently announced that it is consolidating the trading of its shares on to one market place in Sweden, AktieTorget, following the closure of the Deutsche Boerse Open Market in Frankfurt.

** Core EBITDA reflects the operating result before exceptional items, one-off charges associated with acquisitions, divestitures, public listings and capital raising efforts.

Third quarter in short

• The Group's focus in the third quarter was to prepare for the launch of ADONcity together with TV4, Sweden's largest commercial national television network, and to further develop its white label advertising solution for media companies to reduce time-to-market from 12 to 2 weeks, to better address strong interest in its existing and new services. 

• 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 of 9,050,000 new shares to new and existing shareholders at SEK 2.00 per share. The new shares issued represent 45.2% of the total number of shares that the Board is authorized to issue according to the 2012 AGM. With the new capital raised, the Group can more aggressively pursue, finance and execute its growth strategy while accelerating its efforts to deliver and implement mobile advertising solutions for TV and newspaper companies. 

• The Group continued to implement 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 2013. 

• In line with its growth strategy, the Group made significant investments in staffing up its organization during the third quarter to increase its commercial capacity for meeting current and anticipated future demand in the Nordic market and internationally. The Groups has started to prepare for an international rollout independently and is also identifying and lining up international agents. 

• The integration of the Group's recently acquired subsidiaries Scandvision, ENC, and Scandinavian Advertising was completed and the combined Group is generating both new business and synergy opportunities that contribute to both current and future top-line growth and the bottom line. 

• In August 2012, the Group appointed Mangold Fondkommision AB as its market maker for its shares that trade on AktieTorget. 

Significant events after the period

• In October, the Group launched a new service named ADONcity that is the most advanced and value creating mobile search and advertising platform in the market. The national rollout of ADONcity started late October 2012 in Southern Sweden, and is planned to be completed by early 2013. The service has generated significant interest from both advertisers and consumers. Further details can be found on www.adoncity.com. 

• The Group's white label advertising solution for media companies has renewed contracts and signed new contracts with a number of newspaper titles. The Group participated at the WAN IFRA exhibition as a speaker in Frankfurt in October 2012, and the business is seeing increasing interest and requests for its white label services from several European and international media groups.

• The Group announced its decision to de-list from Deutsche Boerse's Frankfurt Stock Exchange as a result of the closing of the First Quotation Board on December 15, 2012. Consequently, the Group will consolidate the trading of its shares on one market place in Sweden with the objective to simplify the trading of the Mobile Loyalty share and facilitate a greater trading liquidity. The current trading of the Group's shares in the form of Swedish Depository Receipts (SDR) will continue as usual on AktieTorget, Stockholm.

Other

• The number of shares outstanding on November 30, 2012 is 55,915,493.

• The next report will be published on or before February 28, 2013.

Comments by the CEO

Nicklas Gerhardsson, CEO commented: "We continue to execute on and invest in our growth strategy and enjoy continued very strong interest in our innovative services and solutions. We have won several new customers that span media, digital, film, and communications."

"In our core growth business - advertising solutions for media companies - we have recently launched in Sweden our mobile service ADONcity that is the most high-end mobile search and advertising platform available. While we prepare ourselves for further international expansion we see very strong interest in this business from the Nordic region, Europe and other international markets."

"With the new capital raised at the end of the summer, we have been able to accelerate our plan of gearing up the organisation to meet increased market and customer demand. The success with our customer cases to date proves that our mobile advertising services and business model works and that our customers can quickly generate new revenues with our solutions. We continue to shorten our time-to-market while demonstrating the benefits and incremental revenue that our customers can generate with our services." 

"Going forward, we continue to focus on executing our plan, investing in growth and winning customers; we are excited about the great opportunities ahead. We look forward to working with new and existing customers to capitalize on the fastest growing segment in marketing and advertising: mobile."

On behalf of the Board of Directors

Nicklas Gerhardsson
CEO