Dotdigital Group Plc · LSE:DOTD
Dotdigital — H1 2021 Earnings Presentation
36 slides from Dotdigital's earnings presentation, February 2021
Slide 1: H1 2021 Results Presentation
Milan Patel, CEO Paraag Amin, CFO February 2021
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 campaigns quickly • Send personalised messaging campaigns across multiple channels • Automate customer journeys such as welcome, birthday, and abandon
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 • 320+ global employees • 12 offices worldwide • Strong network of tech and solution partners • Focused on mid market Trade associations Selected Service Partners “Whilst our busine
Slide 4: Who we help, key financials and business split
Who we help Key financials 21% 24% 44% 10-year revenue CAGR 10-year adjusted EBITDA CAGR 10-year EPS CAGR * Top 100 customers 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 326 people in 12 office locations
We employ 326 people in 12 office locations around the world. IT & Development 130 Sales &… 118 Client Services 46 Other 32 UK USA Australia South Africa Singapore Belarus Poland Netherlands 241 people 30 people 20 people 9 people 2 people 15 people 5 people 4 people 5
Slide 6: Product innovation, strategic partnerships, geographic expansion
Expand our product suite; Focus on Customer base providing cross-selling; or talent organic growth deeper acquisition; to strengthen our Product Innovation customer relationships hubs Grow our Complementary Strategic partnerships customer base; synergy Increasing our technology; new global market re
Slide 7: N Oo
— x os N Oo > 5S 7 UY
Slide 8: Continued double-digit organic growth, despite challenging macroeconomic conditions
Continued double-digit organic Continued to build on our global Increased spending in our markets growth, despite challenging footprint from the acceleration of digital macroeconomic conditions transformation caused by COVID-19 Benefitting from previous Financial position remains Continued momentum
Slide 9: tJ ft
Ye 0) 25 © Oo tJ 9 ft YN &
Slide 10: Product innovation
• Functional Recurring Revenue grew 20% Functional Recurring Revenue Product innovation to £8.9m in 1H 21. It now makes up 40% (Engagement Cloud - license & of Engagement Cloud recurring revenue. functionality) Strategic partnerships • Significant YoY increases in synced £8.9m, orders, products, web
Slide 11: Product innovation
Product innovation • Enhanced AI and data visualisation for product recommendations, customer persona modelling and product affinity capabilities • Intelligent contact data capture capabilities for chat, along with alerting Strategic partnerships and multi-language support and a more personalised cu
Slide 12: 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 13: Strategic partnerships
• Sales from customers using connectors to our Product innovation 1H 21 strategic partners’ solutions increased by 20% to £12.8m (1H 20: £10.7m). Strategic partnerships • Our Shopify connector revenue grew by 115% and Magento, Non- 29% our MS Dynamics connector revenue grew by 25% Integrated, (1H 20
Slide 14: Geographic expansion
US revenue grew organically 25% to $6.3m, (1H 20: $5.1m) driven by Product innovation partners and our core integrations for Magento and Shopify APAC sales, channel team expansion Strategic partnerships and increased Asia presence drove revenue from the region, which grew organically 41% to AUS$3.5m
Slide 15: Financial review
Financial review
Slide 16: Revenue growth trends continue for both revenue and profit
30 KEY £28.2m 10 year growth trends continue for both 27 Revenue £27.6m revenue and profit 24 Adjusted EBITDA 588% 21 Cash at Period End REVENUE in £m Engagement Cloud Revenue growth 18 15 775% Adjusted EBITDA growth 12 £10.5m 9 21% 6 Engagement Cloud Revenue CAGR 3 24% 0 Adjusted EBITDA CAGR 1H 11
Slide 17: Financial highlights
22% 93% 20% £27.6m Total revenue Recurring rev of Functionality Strong cash growth (£28.2m) total revenue revenue growth position & (£8.9m) no debt 27% 9% 20% 20% International Adjusted ARPC per month Email volume revenue growth operating profit grew growth (£9.3m) (£7.6m) (£1,196) 17
Slide 18: Profit & Loss Statement
Profit & Loss Statement Continuing operations Group revenue • Organic revenue grew 22% to £28.2m (1H 20: £23.1m) • Monthly ARPC up 20% to £1,196 (1H 20: Dec 20 Dec 19 restated Growth £999) £M £M % International revenue • Now 33% of total (1H 20: 32%). Revenue 28.2 23.1 22% Revenue from strategic par
Slide 19: Healthy balance sheet, strong cash position, zero debt
• Healthy balance sheet Balance sheet Dec 20 Dec 19 £M £M • Strong cash position Non-current Assets 29.1 28.7 • Zero debt Other Current Assets 13.2 13.2 • Bandwidth for strategic investments Cash 27.6 22.6 • Strong distributable reserves Total Assets 69.9 64.5 Non-current Liabilities 4.8 6.1 Current
Slide 20: Strong cashflows generated from operations
• Strong cashflows generated from Dec 20 Dec 19 Cash flow £M £M operations Net cash generated from 7.0 6.6 • Adjusted free cash flow of £3.8m (group); operations £4.3m (continuing operations) Net cash used in investing (3.2) (3.0) activities • Continuing operations EBITDA (£10.5m) Net cash used from
Slide 21: Our market
Our a) oD) —~Z a 140) &
Slide 22: Average return for £1 spent on email marketing
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 22
Slide 23: Email and SMS growth and automation statistics
YoY email send More automation YoY SMS messaging of customers using growth programs YoY growth more than one channel * All stats are sourced from the dotdigital platform 23
Slide 24: Competitive landscape by price tier
LOW (price: <$400/month) MID (price: $400-$30k/month) HIGH (price: >$30k/month) (Acquired by Vector Capital) (Part of the CM group) (Acquired by CM group) (Acquired by SAP) 25
Slide 25: Strong performer in Forrester Wave and winning 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 26: Global marketing automation spend
Global marketing automation spend is predicted to grow to $25.1bn by 2027 from $3.8bn today. FORRESTER’
Slide 27: Summary and outlook
Summary outlook
Slide 28: Continued momentum in trading performance
Continued momentum in trading performance – continued double-digit growth and majority recurring revenues Building on the foundations of our international hubs – continued expansion across all territories Significant growth through strategic partners and accelerated investment into building a more s
Slide 29: Well-positioned to capitalise on accelerated shift to digital
Well-positioned to capitalise upon accelerated shift to digital Benefits of ongoing and previous investments will continue to filter through Monitoring and responding to economic disruption – financial position, high revenue visibility and strong cash generation provide security Revenue and profit g
Slide 30: Questions
Questions {LIMA
Slide 31: Appendix
eas Oo c oT foe oY <
Slide 32: Major shareholders and global reach
• Liontrust Asset Management 18.1% • Directors 10.5% • Octopus Investments 7.1% • Investec Wealth & Investment 5.5% • Slater Investments 5.4% • Franklin Templeton Fund Management 4.8% • Highclere International Investors 2.8% Global reach • Herald Investment Management 2.6% • Baillie Gifford 2.6% Ger
Slide 33: 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 34: 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 35: Goggles 4 U
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 36: 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