blinkx plc FY2013 Results S. Brian Mukherjee, CEO Edward Reginelli, CFO May 2013

Transcription

1 blinkx plc FY2013 Results S. Brian Mukherjee, CEO Edward Reginelli, CFO May 2013

2 Safeharbor Statement Forward-looking Statements This announcement contains (or may contain) certain forward-looking statements with respect to certain of blinkx's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. blinkx cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'aim', 'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', or other words of similar meaning. Examples of forward-looking statements include, among others, statements regarding blinkx's future financial position, income growth, impairment charges, business strategy, projected levels of growth in its markets, projected costs, estimates of capital expenditure, and plans and objectives for future operations of blinkx and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, UK domestic and global economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation, the success of future acquisitions and other strategic transactions and the impact of competition - a number of which factors are beyond blinkx's control. As a result, blinkx's actual future results may differ materially from the plans, goals, and expectations set forth in blinkx's forward-looking statements. Any forward-looking statements made herein by or on behalf of blinkx speak only as of the date they are made. Except as required by the FSA, AIM or applicable law, blinkx expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in blinkx expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. 2

3 Agenda Market Overview Technology Overview blinkx Business Model Financial Performance Appendix 3

4 Corporate Snapshot History Founded 2004 IPO 2007 Headquarters London, UK San Francisco, CA Locations Boston, Cambridge, Chicago, London, Los Angeles, Montreal, New York, San Francisco, Seattle, Tempe Employees 255 Total : 157 Sales & Marketing, 62 Research & Development, 36 General & Administrative Technology blinkx Video Search Engine and AdHoc Advertising Platform Financials $198.0M Revenue (+73% YOY) $30.2M Adjusted EBITDA 1 (+111% YOY) $55.9M Cash (+45% YOY) Partnerships 40+ Agencies 900+ Content Partners Brands Publishers 1. Adjusted for acquisitions and exceptional expenses, share based compensation, other income 4

5 FY2013 Highlights INDUSTRY Ad Spending on Online Video sector grew by 46.5% from 1.9B in 2011 to 2.9B in 2012 Yet this represents less than 5% of the total ad spend on traditional TV, c.$65b in 2012 Rapid and sustained move from experimental to incremental budgets FINANCIALS Revenue grew by 73% to $198.0m, from $114.4m in FY 2012 Adjusted 1 profit before tax was up 129% to $24.6m, from $10.7m in FY 2012 Adjusted EBITDA 2 was up 111% to $30.2m, and grew to 15.3% from 12.5% of Revenue Net Cash balance grew to $55.9m up from $38.4m as of 31 March 2012 OPERATIONS Launched mobile-ready, touch enabled video search, discovery and advertising platform New Content, Audience and Advertising Partnerships (Kiplinger, Sony, Kellogg, Nike, Mattel) Completed front end integrations of 2011 acquisitions to extend scale, scope and reach Successful senior management transitions, including CEO and CFO roles OUTLOOK Captive growth opportunity, based on 87% of interactions remain un-monetized Primary execution focus on Advertiser and Content relationships to drive organic growth Mobile capability at scale remains key opportunity to drive 4 Screen Video Advertising vision 1. Does not include acquisition and exceptional expense, purchase intangibles Includes, or share base compensation 2. Adjustments include acquisitions and exceptional expenses, share based compensation and other income 5

6 Agenda Market Overview Video in a Hyper-Connected World Technology Overview Content, Fragmentation, Video Search and Discovery blinkx Business Model Monetizing Ad Interactions Online Financial Performance FY2013 Results and Historical Trends Appendix Conclusions and Supporting Data 6

7 Video in a Hyper-Connected World Broadband Household Penetration Worldwide 68% 69% 69% 70% 70% 70% 70% 29% 32% 33% U.S. 35% 37% 38% 39% Worldwide Online Video Traffic Worldwide Online video constitutes 51% of consumer Internet traffic, and will reach 55% in three years By 2016, 1.2 million minutes of video or 833 days will traverse the Internet every second 1000 Petabytes/ Month Online video viewers worldwide are expected to grow from 1.1 Billion in 2011 to 1.6 Billion in three years Source: Cisco Systems, emarketer 7

8 Then Now 8

9 Proliferation of Connected Devices US Smartphone Penetration (M) Avg. Time (Min) Spent With Media (WW) By 2016, there are expected to be 3.4 billion Internet users about 45% of the world s projected population. On average, there will be more than two Internet connections for each person on Earth, driven by the proliferation of web-enabled mobile devices. Source: Cisco Systems, emarketer 9

10 Advertisers Following Audience Online Video Ad Spend 1 Online Video v Total Ad Spend 1 Mobile Ad Spend 2 $B $B Online Video Television Total 197 $B INTERNET Targeting, tracking, measurability TV Emotive, story-telling, brand building MOBILE Untethered, broadband, anytime, anywhere 1. emarketer,us only 2. Wall Street Journal, US only 10

11 Agenda Market Overview Video in a Hyper-Connected World Technology Overview Content, Fragmentation, Video Search and Discovery blinkx Business Model Monetizing Ad Interactions Online Financial Performance FY2013 Results and Historical Trends Appendix Conclusions and Supporting Data 11

12 Online Video Consumption Video Producer Consumer Advertiser Web Publisher 12

13 Value Flow Video Producers (Motortrend) Consumers (You) Content $ Advertisers (Toyota) Content Attention $$$ Web Publishers (CarPages.co.uk) 13

14 Fragmentation Video Producers Consumers Content $ Advertisers Content $$$ Attention Audience Web Publishers 14

15 The blinkx Engine Video Producers Consumers Web Publishers Agencies Advertisers AD AD AD The blinkx Internet Engine automatically matches consumers with video content and advertising on behalf of hundreds of brands millions of times a day automatically and in real time. 15

16 blinkx Revenue Equation Video Producers Consumers Supply Demand Advertisers blinkx.com Direct Sales Team Ask.com, Aol.com, & Others Advertising Exchanges Agencies 16

17 Scale, Scope and Reach Video Producers Supply Demand Connected TV Mobile Sales Consumers Mobile Trading Platforms Advertisers blinkx.com Direct Sales Team Ask.com, Aol.com, & Others Advertising Exchanges Agencies Display Publishers (2500) Search Publishers (500) Integrated Advertising Campaigns 17

18 The blinkx Ecosystem Video Producers Web Publishers Aggregators Agencies Advertisers 18

19 Text v. Video Search Text search engines miss the VIDEO in Video Search blinkx actually WATCHES the video President Barack Obama speech on sequestration April 30, 2013 Tags: President, Obama, Sequestration 19

20 Advertising Search Discovery Textual Speech Recognition Visual Analysis Advanced textual analysis, page and site-level human design context analysis and visual spidering with support for over 200 video and audio metadata file formats. Continuous, speaker independent, large vocabulary speech recognition. Neural Network and Hidden Markov Modelbased acoustic language modelling Visual Analysis: Realtime scene decomposition, Onscreen Character and Facial Recognition, visual and metadata Closed-Caption extraction blinkx CORE Concept Recognition Engine based on a patented combination of Shannon s Information Theory and Bayesian Inference 20

21 blinkx Technology 21

22 Agenda Market Overview Video in a Hyper-Connected World Technology Overview Content, Fragmentation, Video Search and Discovery blinkx Business Model Monetizing Ad Interactions Online Financial Performance FY2013 Results and Historical Trends Appendix Conclusions and Supporting Data 22

23 Business Model Content Licensed Indexed Monetisation Audience Premium blinkx Syndicates Display Search Conventional Opportunity Mobile Connected TV Direct Sold Platform Traded Advertisers 23

24 2013 KPIs Premium Conventional Tech & Svcs Total Opportunity Description High Value direct sold or exchange traded campaigns, including video, rich media, display, search High volume, campaigns typically non-rich media display ad units sourced from third parties Technology and services related to managing digital assets and advertising services that support current revenue streams Total of Premium, Conventional, and Tech & Svcs Access to interactions blinkx.com, blinks Syndicates and Affiliates and and emerging channels, mobile, ConnectedTV Revenue ($) Revenue (%) $154.8M 78% $36.0M 18% $7.1M 4% $197.9M 100% N/A ecpm ($) $4.75 $0.84 N/A N/A N/A Interactions (B) Volume (%) % % N/A % % Key Trends Device proliferation Digital spend growth ecpm Seasonality Trading Platforms Growing volume Volatile pricing Higher prices for targeted data buys Lower prices for un trageted reach buys High strategic value Insight into actual spend patterns Leverage and drive content partnerships Captive, inhouse opportunity Direct and exchange traded campaigns Potential monetization 24

25 KPI Trends 1 Revenue Contribution, (%) Premium Conventional Tech & Services 4% 5% 3% 9% 11% 16% 18% 18% Pricing Trends, ($/ecpm) Premium Conventional $4.78 $4.67 $4.80 $ % 80% 77% 79% $0.67 $0.66 $0.82 $0.85 1H '12 2H '12 1H '13 2H '13 1H '12 2H '12 1H '13 2H '13 Volume Trends, (B) Interactions, (B) Opportunity Premium Conventional Premium Conventional Opportunity H '12 2H '12 1H '13 2H '13 0 1H '12 2H '12 1H '13 2H '13-1. Note: Figures above are unaudited 25

26 Agenda Market Overview Video in a Hyper-Connected World Technology Overview Content, Fragmentation, Video Search and Discovery blinkx Business Model Monetizing Ad Interactions Online Financial Performance FY2013 Results and Historical Trends Appendix Conclusions and Supporting Data 26

27 Historical Trends Revenue, $M Adjusted 1 EBITDA, $M H1 '08 H2 '08 H1 '09 H2 '09 13 H1 '10 21 H2 '10 27 H1 '11 39 H2 '11 45 H1 '12 70 H2 '12 82 H1 '13 H2 '13-2 1H '08-4 2H '08-3 1H '09-5 2H '09-5 1H '10 1 2H '10 3 1H '11 7 2H '11 6 1H '12 8 2H ' H '13 2H '13 Operating Cash Flow, $M Adjusted PBT, $M H1 ' H2 '08 H1 '09 H2 '09-8 H1 '10-3 H2 '10 H1 '11 H2 '11 H1 '12 H2 '12 H1 '13 H2 '13-7 1H '08-4 2H '08-3 1H '09-6 2H '09-7 1H '10-2 2H '10 1H '11 2H '11 1H '12 2H '12 1H '13 2H '13 1. Adjusted for share based compensation and other income 27

28 Key Financials FY 2012 FY 2013 Variance 12 to 13 Revenue, $M $114.4 $ % Adjusted EBITDA 1, $M % $ % $ % 111% Adjusted Basic EPS 2 Cents % Cash, $M $38.4 $ % 1. Adjustments include acquisitions and exceptional expenses, share based compensation and other income 2. Adjustment include [exceptions, purchased intangibles and other income 28

29 Operational Gearing Total Revenue and Operational Expenses, $M Adjusted EBITDA, % Total Revenue, $ Total Operating Expenses, $ $250 40% $ % -62.5% -12.9% 15.0% 12.5% 15.2% 20% 0% $150-20% -40% $100-60% $50-80% -100% $0 FY '08 FY '09 FY '10 FY '11 FY '12 FY '13-120% 29

30 EBITDA Bridge FY 2013 ($M) (0.8) PBT Amortisation, Depreciation Purchase Intangibles Amortization EBITDA Acquisition & Exceptional Share Based Compensation Other Income Adjusted EBITDA 30

31 Cash Bridge FY 2013 ($M) (2.6) (4.8) (1.0) (3.0) (0.2) (1.1) Begining cash Adj EBITDA Working capital Tax Payments Purchase of PPE Capitalized internal dev. charges Payment on finance lease Foreign exchange Ending cash 31

32 Comparative IS and BS Income Statement ($M) ($M) FY 2012 FY Revenue Cost of Revenue S&M R&D G&A EBITDA Share based comp. Adjusted EBITDA Income BALANCE Statement SHEET ($M) ($M) FY FY Cash Goodwill Intangibles Receivables Def. Tax Asset Trade Payables Def. Tax Liability 32

33 Conclusions Booming segment of a robust sector with strong projected growth Technology-led media business with unique strengths in online video Rapid top line growth with increasing operational gearing Scale, scope and reach of acquisitions enhances relevance Near term organic and inorganic opportunities for growth 33

34 Agenda Market Overview Video in a Hyper-Connected World Technology Overview Content, Fragmentation, Video Search and Discovery blinkx Business Model Monetizing Ad Interactions Online Financial Performance FY2013 Results and Historical Trends Appendix Conclusions and Supporting Data 34