blinkx plc Corporate and Business...

blinkx plcCorporate and Business Overview

S. Brian Mukherjee, CEOEdward Reginelli, CFO

February 2014

Safeharbor Statement

2

This announcement or presentation 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 statementsthat 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 US and UK domestic and global economic and business conditions, the effects of blogs and media coverage, 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, theoutcome 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 FCA, 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 or presentation 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. Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

3

Agenda

Corporate Snapshot

Market Overview

Product and Technology

Business Model and Financials

Growth Strategy

Corporate Snapshot

4

1. Adjusted for acquisitions and exceptional expenses, share based compensation, other income

History Founded 2004IPO 2007 (LSE AIM: BLNX)

Headquarters London, UKSan Francisco, CA

Locations Boston, Cambridge, Chicago, Herndon, London, Los Angeles, Montreal, Mountain View, New York, San Francisco, Seattle, Tempe

Employees 343 Total : 109 Research & Development, 88 Sales, 66 Marketing & Services, 36 Ad Operations, 44 General & Administrative

Products Video Search, Discovery and Syndication PlatformDesktop and Mobile App Distribution and Monetization PlatformMulti-format Advertising and Campaign Management ToolsData Capture, Traffic Filtering, Optimization and Targeting Engine

Financials(H1 2014)

$111.6M – Revenue (+36%)$18.2M – Adjusted EBITDA1 (+76%)$69.4M – Cash (+67%) 119% – Cash Conversion Rate

Relationships 70+ Agencies900+ Brands1100+ Content Partners4600+ Publishers

Commercial Model

5

Content

Consumers Advertisers

6

Ad Units

FIND A STORE

7

Agenda

Corporate Snapshot

Market Overview



Growth Strategy

Video Enablement of the Web

8

Worldwide

U.S.

Source: Cisco Systems, eMarketer

69% 69% 70% 70% 70% 70%

32% 33% 35% 37% 38% 39%

2012 2013 2014 2015 2016 2017

Broadband Household Penetration Worldwide

1520

26

33

42

53

2012 2013 2014 2015 2016 2017

Online Video Traffic Worldwide

1000 Petabytes/ Month

Proliferation of Connected Devices

9Source: Cisco Systems, eMarketer

Avg. Time (Min/User/Day) Spent 2013 (US)

350 346 353 365 375 382

722 918 1078 1237 1380 1516128190

236280

318352

2012 2013 2014 2015 2016 2017

Worldwide Device Shipments Forecast, Millions

300

600

900

1200

1500

1800

2100

2007 2008 2009 2010 2011 2012 2013 2014 2015

Mobile Internet Users Desktop Users

Mobile Internet Users vs Desktop Users, (WW)

$1.9

$3.4

$4.6

$6.0

$7.4

$8.5

13%19% 22% 25% 28% 29%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

2012 2013 2014 2015 2016 2017

RTB Digital Ad Spend

% of Digital Display Advertising Spend

Programmatic Trading Trends

316

86

271

TV

ConnectedDevices

Radio

Advertisers Follow Audiences

10

ONLINETargeting, tracking,

measurability

TVEmotive, story-telling,

brand building

MOBILEUntethered, broadband,

anytime, anywhere

49

1319

2531

2012 2013 2014 2015 2016 2017

Mobile Ad Spend

$B

0.1 0.6 1.0 1.6 2.3 3.02.9 4.1 5.7 7.0 8.2 9.2

65 66 69 70 73 75

2012 2013 2014 2015 2016 2017

Mobile Video Digital Video TV

Digital Video v TV Ad Spend

$B

Source: eMarketer, US Only

3 4 6 7 8 9

2012 2013 2014 2015 2016 2017

Online Video Spend

$B

11

Agenda

Corporate Snapshot

Market Overview



Growth Strategy

Ecosystem

12

Consumer Advertiser

Website

Content Apps

Value Flow

13

Content(Motortrend)

Consumers(You)

Advertisers(Toyota)

Web Publishers(CarPages.co.uk)

$$$

$Content

Atte

ntio

nC

onte

nt

Apps(CNBC)

Fragmentation

14

Advertisers

Website

$$$

$Content

Atte

ntio

nC

onte

nt

Aud

ienc

e

Consumers

Content Apps

blinkx Engine

15

Content

Web Publishers Agencies

AD

AD

AD

Consumers Advertisers

Match consumers with content and ads millions of times a day in real time

Apps

blinkx Ecosystem

16

Content

Aggregators Agencies/PlatformsAudiences Advertisers

Search Discovery Syndication

Content Ads Audiences

Video Text Social Display Mobile

Apps

• Focus is on traffic filtering and optimization (B2B), not origination (B2C)

• Proprietary tools and technology for high-speed and volume trading in real time

• Advertisers and Partners are governed by agreed upon Terms & Conditions

• Campaigns typically verified by third parties for delivery and performance

• View-ability and verification are still in flux with no common standards

Standards & Protocols

17

Text v. Video Search

18

Text search engines miss the VIDEO in Video Searchblinkx actually WATCHES the video

Tesla Motors, Headquarter, Silicon Valley, Electric

October, 2013

Tags: Tesla, Electric, Silicon Valley

http://www.aol.com/video/translogic-3-tesla-motors-part-2/517141686/

TEXT ANALYSIS

Advanced textual analysis, page and site-level human design contextanalysis 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 Model-based acoustic language modelling

Visual Analysis: Real-time scene decomposition, On-screen Character and Facial Recognition, visual &metadata Closed-Caption extraction

IMAGE ANALYSISSPEECH ANALYSIS

Fallon SesameJimmyClassroomStreetroots

Context, Meaning and Relevance

19

20

Agenda

Corporate Snapshot

Market Overview



Growth Strategy

Business Model

21

Audience

Content

Advertisers

Licensed Indexed

Platform Traded

Search

blinkx

Syndicates

Display

Connected TV

Mobile

Monetisation

Conventional

Premium

I

Direct Sold

II

Opportunity

Historical Financials

-8-4 -5 -4

-8

-3

2

6

2

75

1715

H1'08

H2'08

H1'09

H2'09

H1'10

H2'10

H1'11

H2'11

H1'12

H2'12

H1'13

H2'13

H1'14

Operating Cash Flow, $MOperating Cash Flow, $MOperating Cash Flow, $M

1. Adjusted for share based compensation and other income22

1820

108

673

1

-5-5-3-4

-2

H1'14

H2'13

H1'13

H2'12

H1'12

H2'11

H1'11

H2'10

H1'10

H2'09

H1'09

H2'08

H1'08

Adjusted EBITDA1, $M

3 4 6 8 1321

2739

45

7082

116 112

H1'08

H2'08

H1'09

H2'09

H1'10

H2'10

H1'11

H2'11

H1'12

H2'12

H1'13

H2'13

H1'14

Revenue, $M

1517

8655

2

-2

-7-6

-3-4-7

H1'14

H2'13

H1'13

H2'12

H1'12

H2'11

H1'11

H2'10

H1'10

H2'09

H1'09

H2'08

H1'08

Adjusted PBT, $M

23

Revenue

$111.6m$82.0m

+36%

Adj. EBTIDA

$18.2m (16.3%)$10.4m (12.6%)

+76%

PBT

$10.8m $2.5m

+335%

Net Cash

$69.4m$41.6m

+67%

Notes: 1. H12014 Numbers in Line one, H12013 Numbers in Line two, Y/Y Growth Rate in Line three2. EBITDA Adjustments include acquisitions and exceptional expenses, share based compensation and other income3. Percentages in parentheses represent EBTIDA/Revenue in each half

H12014/H12013 Highlights

Operational Gearing

24

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

$0

$20

$40

$60

$80

$100

$120

$140

H1'10

H2'10

H1'11

H2'11

H1'12

H2'12

H1'13

H2'13

H1'14

Adjusted EBITDA, % Revenue Trends, ($M) Operating Expense Trends, ($M)

H12010 – H12014

55.9

69.4

H1 2014Beginning

cash

AdjustedEBITDA

Proceedsfrom issuance

of shares

Foreignexchange

InterestIncome

AcquistionRelated

CapitalizedExpenses

& PPE

TaxPayments

Workingcapital

H1 2014Ending cash

H12014 ($M)

18.23.4

1.8 0.1 (4.8)

(2.1)(2.0)

(1.1)

Cash Bridge

25

26

Agenda

Corporate Snapshot

Market Overview



Growth Strategy

27

Vision

Connect audiences, brands through premium content

Video Search

Search Syndication

Video Discovery

DiscoverySyndication

2004 2009 2011 2013 Future

Evolution

28

bVA

premium mobile video

PROGRAMMATIC INTEGRATIONS

Inorganic Growth

29

Relationships ☐ Build, Buy or Partner

Unified Advertising Technology Platform

Common Data Management Platform

Cross Platform Reporting and Analytics Engine

Existing Assets R&D investments

DEMANDSUPPLY

Sell Side Ad Technology Buy Side Ad Technology

ExchangeSSPAd NetworkPublisher DSP Trading Desk Agency

Con

sum

er

Ad

verti

ser

Capability

Technology Stack

Note: Illustrative, based on blinkx perspective

ACQUI-HIRE• Mobile

• Ad-Technology

• Data/Analytics

ACCELERATE• Mobile

• Video

• Geography

EXPAND• Mobile

• Video

• Programmatic

30


M&A Focus

M&A Process

31

Strategy

Financials

CultureExecution

Integration

M&A History

32


Apr 2009 May 2011 Nov 2011 Aug 2013 Dec 2013

Structure

Purchase of certain net assets from the ZangoCompanies from a consortium of financial institutions in a foreclosure sale

Stock Purchase Stock PurchasePurchase of certain net assets from Grab Networks Holdings Inc.

Stock Purchase

ProductsApp development, licensing, distribution and monetization platform

Display and rich media advertising network for long-tailindependent web publishers

Self service, auction based performance ad network (AdOn), digital agency (PrimeVisibility)

Video content syndication, distribution and audience extensionplatform

Ultra Premium, brand focused mobile video technology and adplatform

RationaleExpand supply of organic, owned and operated audiences and apps

Expand supply of audiences from long tail publishers for new video audience

Expand scale, scopeand reach ofaudiences, new products and services

Accelerate video content syndication monetization audience extension

Extend desktop offerings into mobilecontent, technology, advertising at scale

Recent Acquisitions

33

CONTENT

PUBLISHERS

ADVERTISERS

Premium, Mobile Video Technology and Advertising Technology Platform

Premium, Mobile Video Technology and Advertising Technology Platform

Leading Video Content Syndication and Distribution Platform

Leading Video Content Syndication and Distribution Platform

Rhythm New Media

34

1. Rhythm estimate based on comScore data & Rhythm’s Q412 Insights Report and first party publisher data2. Rhythm estimate based on first party publisher data Standardized measurement of In-Stream video completion.

Scale74m Uniques/Month

Reach100% Transparency/Site Selection

Scope200+ Ultra-Premium Apps

PerformancePremium, In stream Mobile Video


74MM

- indicates rhythm partner1

Blind,Long-Tail

Transparent,Premium

In BannerVideo

In StreamVideo

Conclusions

35

• Technology pioneer with unique strengths and assets in digital video

• Booming segment of a robust sector with demonstrated growth and potential

• Profitable, disciplined revenue growth with strong cash conversion

• Product and technology diversification provide scale, scope and reach

• Expanding universe of inorganic and organic growth opportunities

• Connect audiences, brands through premium content across four screens

blinkx plc Corporate and Business...

Documents

Transcript of blinkx plc Corporate and Business...