Start a new cycle of growth

H1 2022 results

BRUSSELS, October 17, 2022–(BUSINESS WIRE)–Regulatory news:

Targetspot (formerly AudioValley) (Paris:ALTGS) (Brussels:ALTGS) is publishes its accounts for the first half of 2022. The Group also unveils its new three-year strategic plan, Audio 2025, aimed at accelerating its transformation to position itself among the world leaders in digital audio technologies.

The unaudited consolidated financial statements as of June 30, 2022 were approved by the Board of Directors on October 17, 2022.

As of June 30, the Targetspot Group achieved a turnover of 14.5 M€ against 12.3 M€ a year earlier, representing a growth of 17.6%. Growth amounted to 11.7% at constant exchange rates (CER). The foreign exchange effect, linked to the appreciation of the dollar against the euro, was +5.9% in the first half.

As expected, the Group’s strong momentum was driven by the Targetspot division, which represented 92% of total sales in the first half. Responsible for the monetization of all digital audio channels (podcasts, web radios, music platforms), this division generated revenue of €13.6 million, up 19.8% (+13.3% at TCC). The division is progressing in all its geographical areas, with Europe in the lead (+36.1%) and continued strong momentum in North America (+11.1%).

In K€, IFRS Standards

H1 2022

H1 2021

Turnover

14,497

12,332

Costs of sales

(7,247)

(6,511)

Staff costs

(5,503)

(4,471)

Other ch. administrative and commercial

(3,711)

(1,763)

EBITDA

(1,964)

(413)

Depreciation and amortization, other ch.

(2,180)

(2,055)

EBIT

(4,144)

(2,468)

Other income and expenses

(2)

Operating income

(4,144)

(2,470)

bottom line

(1,158)

(818)

Income taxes

(253)

(2)

The result of the exercise

(5,555)

(3,290)

Summary by Division

REVENUE BY DIVISION in H1 2022, in K€

WinampComment

Target

Company

Band

Revenue

1,111

13,386

14,497

Cost of sales

(439)

(6,808)

(7247)

Gross margin

672

6,578

7,250

Personal expenses

(965)

(4,219)

(319)

(5,503)

Other administrative and commercial costs

(1,378)

(1,868)

(534)

(3,780)

Other operating income / expenses

26

43

69

EBITDA by division

(1,671)

517

(810)

(1,964)

Gross margin increase, Targetspot EBITDA nearly quadrupled

Gross margin increased by 24.5% Group-wide in the first half of 2022 to reach 7.2 million euros, driven by the dynamics of Targetspot’s core business. Despite this positive trend, EBITDA was negative at -€2 million, compared to -€0.4 million a year earlier, due to the development efforts of the Winamp division. After amortization and depreciation, operating profit was -€4.1 million.

The financial situation remains under control, with €11 million in equity and gross cash of €3.1 million. Financial debt amounted to €23 million compared to €17.6 million at the end of 2021.

Targetspot division, in k€

S1 2022

H1 2021

Revenue

13,386

11,178

Cost of sales

(6,808)

(6,044)

Gross margin

6,578

5,134

Personal expenses

(4,219)

(3,748)

Other administrative and commercial costs

(1,868)

(1,249)

Other operating income / expenses

26

EBITDA by division

517

137

The momentum of the Targetspot division resulted in revenue growth of 19.8% (+13.3% at constant exchange rates) and an increase in the gross margin which stands at 49.1% of revenue. revenue in H1 2022 compared to 45.9% in H1 2021. at €6.6m compared to €5.1m at June 30, 2021, up €1.5m.

EBITDA is positive at +€517k, i.e. nearly four times higher than at June 30, 2021.

Winamp division, in k€

S1 2022

S1 2021

Revenue

1,111

1,154

Cost of sales

(439)

(467)

Gross margin

672

687

Personal expenses

(965)

(595)

Other administrative and commercial costs

(1,378)

(344)

Other operating income / expenses

(2)

EBITDA by division

(1,671)

(254)

The Winamp subsidiary generated an EBITDA of -€1,671k in H1 2022, compared to -€254k in H1 2021. The trend is mainly due to an increase in personnel expenses, mainly for recruitments, the headcount having been increased by almost 40% in six months (54 employees at June 30, 2022 compared to 39 at the end of 2021). Winamp’s investments in technological and commercial development also impacted “Other administrative and commercial expenses”, in particular through the increased use of external service providers over the period.

AUDIO 2025: five strategic priorities to seize global market opportunities

The digital audio advertising market took off as the 2020s approached, marked by double-digit growth rates. The boom has been fueled by the proliferation of different sources of content (radio, music streaming, podcasts, video platforms, mobile games, audio books, etc.) and new technologies (including smartphones, connected speakers, headsets without wire and Apple CarPlay).

The digital audio market is expected to continue on this strong growth path, offering unprecedented benefits to all players in the ecosystem:

  • Listeners are more than ever looking for affinity content, available at any time of the day and including advertisements as close as possible to their centers of interest. Digital audio has become a daily companion for billions of consumers around the world.

  • Advertisers, looking for the best advertising efficiency, are attracted by a channel that guarantees unparalleled listening receptivity, highly qualified targeting and premium advertising formats. The shift in advertising investment from traditional FM radio to digital audio continues to accelerate.

  • With digital sound, editors take advantage of new levers to increase their audience and maximize monetization thanks to prices linked to the targeting capacities and the unique advertising receptivity of the medium.

An AdTech pioneer, Targetspot has developed independent, innovative and all-in-one solutions that have continuously strengthened its competitive advantage. To exploit the full potential of the market while improving its financial performance, the Group is today announcing a three-year strategic plan that will enable it to post solid performance in terms of growth and profitability over the long term.

Called Audio 2025, the plan has five priorities:

  • Aspeed through all aspects of digital audio. Initially limited to the monetization of radio audiences, the Targetspot market is developing in several extremely buoyant territories where the Group will continue to exploit its advantage by adapting its technological platform and forging partnerships with leading players, as we have seen recently seen in mobile games with Gadsme.

  • younit all resources for a single activity. To grow, Targetspot must focus all its resources and investments on a single core business. As announced last May, the Group intends to sell its subsidiary Winamp in order to refocus on the growing and profitable Targetspot division, which is already international.

  • Ddevelop international positions. Already very present in North America (two thirds of its turnover) and in Europe, Targetspot is now ready to accelerate internationally to strengthen its decisive advantage with major advertisers with global inventories. The Group initiated this acceleration this summer in Latin America, through a series of local partnerships.

  • Innovate to extend its lead in the market. Targetspot has a unique proprietary technology platform to monetize digital audiences, a platform it continuously updates to stay ahead of emerging competition. Going further, R&D priorities will focus on programmatic advertising and targeting capabilities.

Strong leverage effect on growth and profitability

The execution of this plan should enable AdTech to become the leader in digital audio in Europe and a challenger in North America, with solid positions in the rest of the world.

The Group will support this strategic ambition by strengthening its growth and profitability profile. For a scope of activity no longer including the Winamp subsidiary, Targetspot is aiming for an average annual growth in turnover of 20% over the period 2023-2025. By 2025, it plans to generate more than 50 million euros in annual turnover. As a reminder, the Targetspot division achieved a turnover of €26 million in 2021.

In terms of profitability, the Group aims to increase its EBITDA margin to more than 15% in 2025, i.e. double that of 2021 (7.6% for the Targetspot division).

On the strength of these new orientations, the Group is preparing to embark on a new development cycle enabling it to fully seize the opportunities of its market.

NEXT EVENT

Annual sales
January 26, 2023, after market close

About Targetspot
Targetspot, an AdTech company listed on the Brussels and Paris stock exchanges, has been a leader and pioneer in digital audio since 2007. Targetspot connects brands to their target audiences through an inventory of leading publishers in all areas of audio digital. Thanks to its proprietary technologies, Targetspot provides end-to-end integration between advertisers and publishers for contextualized campaigns without cookies in direct and programmatic purchase. Targetspot is also an unrivaled leader in audio streaming with its Shoutcast brand, enabling over 85,000 radio stations to be streamed online. Targetspot operates in nine countries and employs around 100 people worldwide.

See the source version on businesswire.com: https://www.businesswire.com/news/home/20221017005709/en/

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