Dalenys: Annual Results 2016

Payment division continues to perform
Turnover PAYMENT +44% at €17 million
Operational breakeven

First favourable effects of strategic refocusing of Marketing and Telecom divisions
Telecom returns to operational breakeven in the 2nd half of the year.

BRUSSELS--()--Regulatory News:

Today Dalenys (Brussels:NYS) (Paris:NYS) (ISIN BE0946620946 -- Mnemo NYS) publishes its audited, 2016 yearly results that were approved by the Board of Directors on 23 March 2017.

The results of 2016 reflect the ongoing performance of the Payment division that continues to increase its share of the European market, and its ability to reach the profitability threshold. The operating income of the Payment division has broken even after only 5 years of commercialisation, reflecting Dalenys’s capacity to sell added-value services beyond a simple banking transaction service.

The results of 2016 also reflect the refocusing made to the Marketing and Telecom divisions and the total synergy of their commercial strategy and operational management with the Payment division. The speed with which these action plans were implemented allowed the Telecom division to almost break even in operational terms in the second half of the year, and to divide by two the losses of the Marketing division compared to the 1st half of the year.

Thibaut Faurès Fustel de Coulanges, Chief Executive Officer of Dalenys states, “With a Run rate (*) of €2.6 billion at the end of January 2017 and 17 clients among the top100 of the French online businesses among, Payment Marketing specialist Dalenys has become a key player in the payment market in Europe. Following the success of the Payment division, we have aligned the Marketing and Telecom divisions more quickly to eliminate sources of losses, maximise the synergies between the business activities and deploy the best practices of the Payment division. With this reorganisation and restructuring, the Group is confident of reaching a Run rate of €5 billion looking ahead to 2018.”

Results of business activity in 2016: Payment division breaks even, Marketing and Telecom recover in H2

SIMPLIFIED CONSOLIDATED PROFIT AND LOSS STATEMENT

INCOME STATEMENT       2016       2015

Proforma (*)

      Variation       H1 2016
(in thousands of euros)                        
Turnover       64,493       53,859       20%       33,394
Gross margin 28,546 23,543 21% 14,825
As % of the turnover       44.30%       43.70%               44.40%
Other operating incomes       447       300       49%       261
Recurring operating expenses       (18,601)       (14,793)       26%       (9,729)
Payroll expenses       (14,673)       (12,329)       19%       (7,645)
Depreciations and amortisations       (1,541)       (1,674)       -8%       (957)
Recurring operating income (5,821) (4,953) 18% (3,246)
As % of the turnover       -9.00%       -9.20%               -9.70%
Other non-recurring operating income and expenses       (1,620)       (42)       3766%       (1,044)
Operating income (7,441) (4,995) 49% (4,290)
As % of the turnover       -11.50%       -9.30%               -12.80%
Financial results       661       4,785       -86%       294
Tax on income       (912)       1,717       -153%       851
Consolidated net income (7,693) 1,508 -610% (3,145)
As % of the turnover       -11.90%       2.80%               -9.40%

(*) 2015 excluding BtoC division sold on 1 July 2015 and Repu7ation (Marketing Division) sold effective from 30 June 2016

RECURRING OPERATING INCOME BY DIVISION

Recurring operating income by division       2016       2015

Proforma (**)

      Variation       H1 2016
(in thousands of euros)                        
Payment (16) (495) -97% 176
Marketing (1,213) (1,135) 7% (797)
Telecoms (938) 801 -217% (886)
Corporate (3,653) (4,124) -11% (1,738)
Recurring operating income (5,821) (4,953) 18% (3,246)

(**) 2015 excluding Repu7ation (Marketing Division) sold effective from 30 June 2016

Breakeven of Payment division confirmed in 2016

The turnover of the Payment division for 2016 rose to €17.1 million over the year, up +44% on 2015, with an earned business volume of €1.7bn over the year, up by 77%.

The strength and range of functionalities offered continues to make the Be2bill product attractive to third party providers. Be2bill launched the first Marketplaces payment service in 2016 (cash-in/escrow/cash-out) both in Euros and other currencies throughout the SEPA area. Several local payment methods have also been integrated into the Be2bill product by emphasising the collection of payment flows and offering exclusive functionalities like direct reimbursement via API. Finally, 2016 was the year that our anti-fraud tools were permanently optimised with the addition of automatic tags allowing suspicious transactions to be reviewed and the first results obtained from machine learning anti-fraud tools developed by the R&D team were gradually implemented.

Throughout 2016, the Payment division reached operational breakeven in a context of investments resulting in operational charges and the recruitment of new talent in the framework of the “Power 5 plan”.

Marketing division: first effects of the action plan in the second half of the year

Turnover reached €5.3 million in 2016, down by 6% compared to 2015 (correction following the disposal of Repu7ation in the middle of the year, for €0.4 million, for the purpose of comparison).

The targeting/retargeting activity was confirmed as commercially dynamic and profitable. Eperflex is positioned today as the best performing retargeting by email solution in the French market in terms of conversion rate, and there are natural commercial synergies with Be2bill, the Payment division product.

Following implementation of the action plan, essentially based on the re-energising of the product in the second half of the year, the Cashback activity has since concentrated on profitable growth and has already reduced its losses.

Therefore, the Marketing division has recorded a loss of €1.2 million for the year 2016, with a loss of €0.4 million in H2, compared to €0.8 million of operational losses in H1.

Telecoms division almost returns to operational break-even in H2.

Over the year as a whole, the turnover of the division rose to €42.1 million. The action plan and deep reorganisation of the Telecom division marked by the end of non-profitable products, increased selectivity of businesses and a structuring of procedures inspired by the Group’s best practices. The plan was quickly deployed and allowed the division to break even in the second half of the year.

Taking account of the Corporate division operating income reduced to €(3.6) million in 2016, compared to €(4.1) million in 2015, the current consolidated operating income for the year is established at €(5.8) million compared to €(5.0) million in 2015.

Net revenue

The operating revenue is recorded at €(7.4) million (compared to €(5.0) million in 2015) after taking into account non-recurring revenue of €(1.6) million for adjustments in tax credit relating to previous years.

The financial result is positive at €0.7 million, compared to €4.8 million in 2015, and relates to financial interests received in the context of the disposal of BtoC.

The tax payable is established at €0.9 million (€0.8 million of which are deferred tax payments) essentially relating to the impact of the finance law of 2017 that reduces the position of deferred taxes.

Consolidated net income for 2016 is therefore established at €(7.7) million.

Dalenys also shows a solid financial structure with shareholder equity of €59 million, €20.7 million cash and borrowings of €4 million from a financial institution.

The Group’s cash consists of (i) the cash held on behalf of third parties in the context of the Payment activity for the amount of €13.8 million and (ii) its own cash of €6.9 million.

Prospects

The Group intends to develop the business by concentrating its investments and main deployments on its Payment activity, in synergy with the Telecoms and Marketing activities. 2017 will confirm the technological advances of Be2bill in terms of international support, finding solutions to the problems of Marketplace and an omnichannel payment solution throughout the SEPA area, in Euros and other currencies. Looking ahead to 2018, the Group is therefore confident of reaching a Run rate of 5 billion Euros.

(*)Run rate: yearly business volume earned based on the last month and projected over a full year.

Next financial communication:

Publication of 1st quarter turnover, 2017: 28 April 2017, before market opening.

Read the press release on the Dalenys website:

https://www.dalenys.com/en/news/annual-report-2016.html

Annual Report 2016:

https://www.dalenys.com/uploads/annual-report-2016.pdf (Translation available mid-April 2017)

APPENDICES

                                 
PAYMENT       2016       2015       Variation      

Half yearly
2016

(in thousands of Euros)                        
Turnover       17,070       11,862       44%       8,557
Gross margin 10,918 7,985 37% 5,805
As % of the turnover       64.0%       67.3%       -335.9%       67.8%
Other operating incomes       256       73       248%       207
Recurring operating expenses       (3,428)       (2,775)       24%       (1,849)
Payroll expenses       (7,094)       (5,269)       35%       (3,617)
Depreciations and amortisations       (667)       (509)       31%       (370)
Recurring operating income (16) (495) -97% 176
                                 
MARKETING       2016      

2015
Pro forma
(*)

      Variation      

Half yearly
2016

(in thousands of Euros)                        
Turnover       5,344       5,712       -6%       2,983
Gross margin 3,188 3,440 -7% 1,861
As % of the turnover       59.7%       60.2%       -55.7%       62.4%
Other operating incomes       35       3       1016%       3
Recurring operating expenses       (890)       (1,646)       -46%       (563)
Payroll expenses       (2,942)       (2,502)       18%       (1,642)
Depreciations and amortisations       (604)       (430)       40%       (456)
Recurring operating income (1,213) (1,136) 7% (797)
                                 
TELECOMS       2016       2015       Variation      

Half yearly
2016

(in thousands of Euros)                        
Turnover       42,079       36,284       16%       21,854
Gross margin 14,441 12,118 19% 7,159
As % of the turnover       34.3%       33.4%       +92.1%       32.8%
Other operating incomes       98       11       754%       8
Recurring operating expenses       (12,236)       (8,945)       37%       (6,563)
Payroll expenses       (3,094)       (1,999)       55%       (1,422)
Depreciations and amortisations       (147)       (384)       -62%       (67)
Recurring operating income (938) 801 -217% (886)
                                 
CORPORATE       2016       2015       Variation      

Half yearly
2016

(in thousands of Euros)                        
Turnover                       n/a        
Gross margin n/a
As % of the turnover       n/a       n/a       n/a       n/a
Other operating incomes       58       212       -73%       44
Recurring operating expenses       (2,045)       (1,427)       43%       (753)
Payroll expenses       (1,543)       (2,559)       -40%       (964)
Depreciations and amortisations       (123)       (351)       -65%       (64)
Recurring operating income (3,653) (4,124) -11% (1,738)
 

Balance sheet status

                 
BALANCE SHEET ASSETS       2016       2015
(in thousands of Euros)            
Goodwill 4,855 4,855
Intangible assets 1,618 2,212
Property, plant and equipment 1,033 921
Other financial assets 40,075 44,443
Deferred tax assets       6,648       7,441
Non-current assets       54,228       59,873
Trade and other receivables 17,071 20,866
Current tax assets 3,230 4,581
Net cash and cash equivalents       20,701       16,279
Current assets       41,003       41,727
TOTAL ASSETS       95,231       101,599
                 
BALANCE SHEET LIABILITIES       2016       2015
(in thousands of Euros)            
Share capital 23,408 23,398
Group reserves 41,489 36,255
Group translation differences 0 (6)
Group share of income (7,657) 5,237
Treasury shares (1,011) (1,739)
Inst. settled in company shares 2,551 2,551
Minority interests       0       8
Shareholders equity       58,780       65,704
Long-term provisions 581 974
Financial liabilities       5,776       2,621
Non-current liabilities       6,357       3,595
Short-term provisions 0 72
Financial liabilities 7 (15)
Suppliers and other creditors 30,086 32,243
Current tax liabilities       1       0
Current liabilities       30,094       32,300
TOTAL OVERALL LIABILITIES       95,231       101,599
                 
INCOME STATEMENT       2016       2015
(in thousands of Euros)            
Turnover       64,493       70,330
Gross margin       28,546       35,218
As % of the turnover 44.30% 50.10%
Other operating incomes 447 303
Recurring operating expenses (18,601) (20,360)
Payroll expenses (14,673) (14,004)
Depreciations and amortisations       (1,541)       (1,594)
Recurring operating income       (5,821)       (438)
As % of the turnover -9.00% -0.60%
Other non-recurring operating income and expenses       (1,620)       (42)
Operating income       (7,441)       (480)
As % of the turnover -11.50% -0.70%
Financial results 661 4,774
Tax on income       (912)       926
Consolidated net income       (7,693)       5,221
As % of the turnover -11.90% 7.40%
 
Net earnings - Group share (7,657) 5,237
Net earnings - minority interests (36) (16)
 
Net earnings per share (0) 0
Diluted earnings per share (0) 0
                         
Cash flow statement table             2016       2015
(in thousands of Euros)                    
Net earnings from integrated companies (7,693) 5,221
Elim. of the amortisations and provisions 1,141 1,543
Elim. of the variation of tax 2,237 (2,121)
Elim. of disposal capital gains or losses (64) 5
Incidence of the change in working capital requirements               1,702       7,385
Cash flow relating to operational activities       (A)       (2,677)       12,033
Net acquisitions of fixed assets (1,296) (1,137)
Variation of the financial assets 3,547 (4)
Impact of changes in scope of consolidation 94 (5,644)
Capital increase 23 0
Treasury shares transactions 728 218
Issuance of loan               4,000       0
Cash flow relating to investment and finance       (B)       7,096       (6,567)
                         
Increase (decrease) in cash and cash equivalents       A+B       4,420       5,466
Net cash and cash equivalents at beginning of the period 16,279 10,802
Net cash and cash equivalents at end of the period 20,701 16,279
Impact of exchange rate variations               2       10
Increase (decrease) in cash and cash equivalents               4,420       5,466
 

About Dalenys

Founded in 2002 by Jean-Baptiste Descroix-Vernier, Dalenys -NYS- (formerly Rentabiliweb) offers Payment Marketing solutions that aim to increase revenues for online and point-of-sale merchants. Ranked #1 of French Fintech by Frenchweb in June 2016, Dalenys offers solutions that integrate transactional and marketing data to increase the conversion of the customers during their purchasing path. With over 200 employees in France and abroad, publicly traded on Euronext Brussels and Paris (C compartment), the company rigorously applies the ten principles laid out by the UN Global Compact and is eligible to the FCPI investment funds and to the French PEA-PME savings plan. Dalenys website: www.dalenys.com

Contacts

Investor Relations / Press Relations
Calyptus
Mathieu Calleux
mathieu.calleux@calyptus.net
+33 (0) 153 653 791

Contacts

Investor Relations / Press Relations
Calyptus
Mathieu Calleux
mathieu.calleux@calyptus.net
+33 (0) 153 653 791