Madvertise (ISIN code: FR0010812230, ticker: ALMNG), the French ad tech company specializing in mobile advertising, has published its half-yearly results at June 30, 2017.
Paul Amsellem, Chairman and Chief Executive Officer of Madvertise, said:
“Madvertise saw its revenues grow by nearly 16% in H1 2017, as well as a strong increase in operating profitability, both of which reflect the success of the strategy we have deployed. These robust results are consistent with our expectations and demonstrate the validity of our business model geared towards premium mobile advertising. They also confirm the leverage effect of growth on our profitability which was already evident in 2016.
Not only are we the leader in mobile advertising to selected target audiences in France, with 26 million unique visitors every month (reaching 71% of mobile users in France), but we now also hope to start driving forward our international development. We have already started to reap the rewards of our international strategy, with 42% growth in the first half of the year in our two other main markets, Italy and Germany. Our ambition is for Madvertise to become a key partner for leading European advertising publishers – and so, to achieve this, we will be opening in new countries from 2018.
Finally, the move to a public listing on Euronext Growth last month marks an important stage in our company’s history, making us a more appealing investment prospect with increased liquidity and improved visibility, as well as expanding our potential investor base.”
Maintaining double-digit growth
The 16% increase in consolidated revenues (€9 million in first-half 2017) is a perfect illustration of the strategy’s success. The mobile advertising activity (which accounted for around 90% of the company’s revenues in H1 2017) and the agency activity (10%) both experienced double-digit growth in the first half of the year. This validates Madvertise’s strategic model, which combines the creative talents of a premium advertising agency with the technological expertise of a 100% mobile advertising provider.
The company has signed a number of major new deals including advertising contracts with Radio France, Ouest France and the Marie Claire Group in France and network operator Veon in Italy.
The added value of Madvertise’s mobile advertising offer, with an increasing proportion of services deployed using the company’s proprietary algorithms and data analysis resources, resulted in a robust gross margin at 35.8% of revenues.
This solid gross margin and strict cost discipline meant that Madvertise was able to multiply its EBITDA by 4.4 in one year, increasing from €24k to €105k.
After depreciation, amortization and provisions (-€300k), which rose due to the ramp-up in R&D investments undertaken last year, operating profit remained stable at -€139k, compared to -€142k in H1 2016.
Net loss was down by more than 40% at €572k, thanks to the decrease in extraordinary expenses and the research tax credit contribution.
The improvement in operating profitability led to cash flow at €223k (-€344k in first-half 2016).
At the same time, the company issued convertible bonds for €800k as a means of securing financing for its working capital.
The company’s gross cash position was €543k at the end of June 2017, compared to €417k at December 31, 2016. Net financial debt, including the convertible bonds, was €688k and equity stood at €864k.
Healthy outlook thanks to high value-added line-up
Madvertise is confident of maintaining sustained and profitable growth for the rest of 2017 in a thriving mobile advertising market driven by increasing smartphone use and new consumer trends (mobile commerce, etc.).
Madvertise has already won several significant contracts in the second half of the year, including with upday, the news app now preinstalled on all Samsung Galaxy S7 and S8 smartphones, and numerous other business opportunities are due to be finalized in the near future.
This momentum is underpinned by innovation, showcased by the launch of Madvertise Audience Targeting last May and, in September, Madvertise Eye Tracking, the first solution with the capacity to measure how much attention mobile internet users pay to advertisements.
The Group will be launching a new product in the coming months as it continues to add to its range of solutions in order to gain access to other high-potential market segments, particularly video. Madvertise will also continue to deploy its location and data solutions (geolocation, contextual advertising) which have very high potential for growth.
The company also intends to drive forward its international development by opening in other countries from 2018.
Publication of the half-yearly financial report
The company’s first-half 2017 financial statements were approved by the Board of Directors at their meeting on October 25, 2017. Madvertise’s statutory auditors have completed their limited review of the company’s financial information. The half-yearly report is now available to the public and has been filed with the French market authority, the Autorité des marchés financiers. The French version can be downloaded from the “Rapports financiers” section under “Investisseurs” on the Madvertise website: www.madvertise.com/investisseurs.
 Source: Médiamétrie Netrating Mobile – April 2017
 Gross margin = revenues – outsourcing costs
 EBITDA = earnings before interest, taxes, depreciation and amortization
 Gross cash position = investment securities + cash and cash equivalents