Rentabiliweb: Sharp Increase in 1st Half Profits

BRUSSELS, August 31, 2011 -

RENTABILIWEB: SHARP INCREASE IN FIRST HALF PROFITS

- An excellent start for 2011 -

Sales up by 8.3%
55.3% increase in net profit to €6.3m
70.2% increase in operating income to €10.3m
€71.2m of equity
Positive cash situation of €16.4m - zero debt
2011 dividends increased to €0.4 per share - 50% first instalment to be paid shortly

Rentabiliweb Group today publishes its half-yearly accounts.
In a context of financial crisis and an uncertain international environment, Rentabiliweb has confirmed the strength and robustness of its model. The Group’s consolidated net profit was up by 55.3% to €6.3m, with steady generation of free cash-flow (€8.5m)up by almost 15% and greater financial solidity, with a total lack of bank debt and equity up by 27% to €71.2m.

“During the semester, our operating income increased over eight times faster than revenues, reaching €10.3m - an increase of 70%.  This year, we have been concentrating our efforts on strong fundamentals: high profitability, high free cash flow and the unhurried preparation of future products, such as e-payment. This has proved to be the best possible strategy during a global financial crisis.
We are continuing to pursue this successful strategy, providing a constant increase in value for shareholders:earnings per share for the half year increased by 37.5%, 2011 dividends have been increased tenfold, and the first instalment will be paid shortly,” said Jean-Baptiste Descroix-Vernier, Chairman of the Board for the Group.

    In thousands of EUR      30.06.2011   30.06.2010    Variation

    Sales                       44496       41 080        + 8.3%
    Gross profits               23582        20276       + 16.3%
    as % of sales                  53%        49.4%          --
    EBITDA                       8440         8226        + 2.6%
    Current operating income     7996         7879       + 1.48%
    Operating income            10268         6033       + 70.2%
    Tax on profits              (3897)       (1906)
    Net profits                  6365         4097       + 55.3%
    as % of sales                14.3%        10.0%          --

8.3% growth for the first half of 2011

In a difficult context, the Rentabiliweb Group has reported growth in all its activities, with turnover up by 8.3% at €44.5m. This result, achieved organically and through external growth, is the fruit of the combined performance of B2C digital printing and B2B monetization services, accounting for 58% and 42% of sales respectively.

B2C: a broader panel and optimised audience

B2C digital content publishing, which consists of proprietary audience monetization focusing on Dating, Astrology, Family Games and Women’s Wellbeing, has returned growth of 6.7% for a total of €25.8m. Key events in the half year included the integration of astrology in the Group’s entertainment panel in late April, the gradual rollout of dating offers, and ramping up Women’s Wellbeing sites with clicbienetre.com. This site has now over 1 million visitors per month and over 200,000 online purchasers, 89% of whom are women.

In terms of audiences, the Group has continued to recruit qualified profiles; these websites have in no way suffered as a result of Google’s deployment of its new Panda algorithm. Rentabiliweb’s exclusive content and its affinity with customer requests have helped consolidate its audience in French-speaking Europe.

B2B: a one-stop solution for monetization services

Over the first six months of the year, B2B recorded 10.5% growth compared to the first semester of 2010 with a total of €18.7m, driven by direct marketing solutions (cashback and loyalty schemes), telecoms and interactive services (telephony, chatrooms, IVS, messaging, web call-back, push SMS, etc.).

Both cashback and targeted database monetization through direct marketing have continued to perform well, while Mailorama has maintained its leading position, with over 1.5m active members. The Mailorama solution is asserting its position as a benchmark site for cashback, with a campaign opening rate of over 20%. This result also builds on the success of the Mailocash software for automatic cashback detection and online shopping assistance. The application already accounts for over 10% of Mailorama sales, resulting in a higher average basket and a higher conversion rate.
The “Consoclient” (online surveys website) offer has also recorded a very good half year, with conversion rates higher than those of competing offerings. As of May 2011, according to Nielsen, every month the site has over 1.3m unique visitors and generates over 200 000 targeted leads.

Capitalizing on the French Telecoms Authority (ARCEP) licences, the Group has continued to pursue deployment of telecoms solutions for the media, service providers and e-business websites. One of the many new clients to have signed up over the last few months is interactive security leader Mediaveil, for which Rentabiliweb handle telecom traffic between alarms.

A new web player specialising in online payment

Over and above all this, the first six months of the year saw a major strategic step, as a result of which Rentabiliweb is now positioned as one of the few approved payment institution in France, also becoming the first Payment institution to join the Bank Card Group in France. What is more, Rentabiliweb is one of the very first operators to be approved across Europe, notably in the United Kingdom, Germany, Spain, Romania, Italy, Belgium and Luxembourg. During the first six months, the Group selected its partner banks from among the European leaders in the acquisition of e-payment transactions, as well as approaching the international Visa and Mastercard networks to cover its clients’ international requirements. Rentabiliweb also worked on interconnecting various software languages involved in the processing and reconciliation of e-payment transactions.

As forecasted, Micropayment activity recorded constant growth; Rentabiliweb has been more selective in its choice of clients and partners, as well as directing some to the Group’s other payment offers. In addition, Rentabiliweb has concentrated its efforts on innovative services, in particular Offerpass and virtual currency, which allow publishers to capitalise on their brands and have code purchases sponsored directly by advertising companies.

Gross margin increased steadily

During the first semester, gross margin  increased by 16.3% to €23.6m. This growth is due to constant control of payout levels to partner publishers. B2C payouts fell by 10 percentage points compared to the first half of 2010, taking the B2C gross profit rate to 70.7% of sales compared to 60.4% a year earlier. In particular, the Group’s publishing activities have benefited from operational and financial synergies with Edencast teams, which were integrated during the second half of 2010, as well as the contribution of the astrology business.

The B2B gross profit rate reflects the payout rate to telecoms operators. As expected, it has stabilised at around 30% of sales: 28.6% compared to 25.3% for full year 2010. The fall in the profit rate compared to the first half of 2010 stems partly from the unfavourable benchmark for comparison and partly from the commercial and marketing policy implemented on July 1st, 2010. This consisted of recruiting new customers and gradually shifting them to e-payment offers (payments by bank card rather than through operators). The gross profit rate for B2B should gradually show a significant increase over the next 18 months, thanks to the contribution of telecoms and direct marketing, the massive launch of the e-payment payment offer and the technology selected for this (development of in-house telecoms routing platforms).

Ever-increasing profitability of all activities, with net profit of 14.3% compared to 10% a year earlier

The Group’s EBITDA amounted to €8.4m on June 30, 2011, equivalent to 19% of turnover. This performance is precisely in line with announced plans, as well as with the strategy for incrementally increasing operating margins. The Group’s EBIT came to €8m, the highest profit generated by the Group since its creation.

Despite the e-payment offer deployments, operating expenses have increased only slightly with respect to sales. Alongside the investments made to finalise construction of the e-payment platform, human and financial resources have been assigned to this strategic project. During the first half year, some of Rentabiliweb’s systems engineers switched to tasks such as finalisation of the tools and the platform, interconnection with bank partners and international networks, and achieving the highest level of security for an online payment platform (PCI DSS).

As anticipated, the proportion of staff costs increased by 1.5 points, accounting for 8.7% of sales compared to 7.2% in the first half of 2010. This fully controlled increase, still well below industry norms, is the result of having recruited the better-qualified profiles required in order to roll out the online payment and cashback activities.
The half year was also marked by more focussed advertising and promotional investments, down 7% on the last six months of the previous year. Integrating Edencast marketing and technical solutions enabled the Group to centralise and optimise expenditure in line with the performance of web and mobile campaigns.

Operating income as of June 30, 2011 amounted to €10.3m compared to €6.0m on June 30, 2010, up 70.2%. In addition to the positive variation in current operating income (EBIT), the financial period saw a positive adjustment of €2.5m due to the settlement of a liability guarantee implemented when the Montorgeuil Group was bought out. At the same time, provisions for taxes of some €2m were booked in the accounts on June 30, 2011.

Net profit amounted to €6.4m, up by 55.3%. It rose over six times faster than sales during the half year.

A very robust financial situation, with no bank debt, strengthened further by the generation of free cash flow

The Group’s equity has increased by €15.1m to €71.2m, and the Group remains free of any short or long-term debt.

The generation of free cash flow totaling €8.5m, 14.8% higher than in the first half of 2010, stems from the good current operating income (EBIT) and controlled net investments excluding acquisition (€1.2m) earmarked for rollout of our e-payment and payment solutions. It also includes all the measures implemented by Finance and Cash Management: these have resulted in a positive contribution in terms of the operational working capital requirement, down €1.3m, mainly due to the clearing of a temporary delay in supplier payments.

At the same time, debts on participating interests, consisting mainly of price supplements relating to acquisitions, fell by €7.6m compared to the end of December 2010. Payments corresponding to the same acquisitions amounted to €3.1m.

Cash flow relating to financing operations amounted to €826k, notably due to the cash payment of the 2010 dividend, totalling €750k, and repayment of credit lines totalling €94k in the books of companies acquired at the end of the 2010 financial year.

The group’s net cash position was €16.4m on June 30, 2011. Rentabiliweb still has zero bank debt.

2011: A strategic year, with the launch of the e-payment offering

The offering is now operational for e-business players.
The first tests are in progress and the Group is planning to start marketing its offering to pilot clients as of mid-September, on the occasion of the E-commerce exhibition, before opening up the solution to a broader public from January 1st 2012.
Rentabiliweb’s competitive advantages for e-commerce players include:

- 10 years’ experience in the online settlement of transactions as an e-trader in digital services (dating, casual gaming, astrology, etc.)
- quick, easy procedures for opening an account without having to enter into contracts with financial institutions
- one-click payment management to optimise conversion rates at the time payment is made online
- foreign currency transactions
- secure transaction tools in order to eliminate fraud and bad debts
- ultra-competitive prices thanks to bank partnerships implemented with the principal French financial institutions and leading foreign banks.

Dividends increase tenfold; payment of a first instalment by year-end

Dividends increase tenfold
On August 10^th, Rentabiliweb announced that it was increasing 2011 dividends to a level 10 times higher than that of 2010, at €0.4 per share. This measure is part of a new shareholder policy aimed at increasing share profitability, endowing shares withthe twin assets of yield and growth, whilst maintaining the Group’s financial flexibility.

Payment of a first instalment of dividends

Even before 2011 is closed, the Group’s board is confident of future profit levels and has decided to pay a first instalment of dividends to shareholders. This payment of 50% of the total dividend to be paid, totaling a little over €3.4m, will be made before the year end.

Read the Group’s press release about its brand new institutional website: www.rentabiliweb-group.com/en/?p=5088

About Rentabiliweb

Founded in 2002, the Rentabiliweb Group offers Internet professionals and webmasters a leading platform of website traffic monetization services, namely payment and micropayment solutions. It has been definitively approved as a Payment Body by the Banque de France and as a member of the French Bank Card Group for the provision of online payment solutions. It also runs affiliate programs, offers online advertising space brokerage and interactive voice services for offline media, and provides acclaimed expertise in loyalty programs and Direct Marketing.

Rentabiliweb is also one of the premier French-language publishers, with a package of services spanning the full range of mass-market entertainment includingastrology, community services, family games, services for the general public, advice for Internet users, personal ads and dating, women’s wellbeing, humour, entertainment and more.

Listed on Compartment B of the Euronext Brussels and Paris stock markets, the Group currently has 20 subsidiaries in Europe, Canada and Asia, with a workforce of about 200 worldwide. In 2010, Rentabiliweb’s sales topped €90 million, with an EBITDA up by 39.4% at €16 million.

Rentabiliweb is also a socially responsible company in its sectors of activity, and rigorously applies the ten principles laid out by the UN Global Compact.

The Group is eligible for FCPI investment funds, has received the OSEO “Innovating company” kitemark, and has received PCI-DSS certification for its bank card payment platform.

CONTACTS

Corporate Communications
IMAGE SEPT
Anne Auchatraire aauchatraire@image7.fr
Claire Doligez cdoligez@image7.fr
+33-1-53-70-74-70

Financial – Investor Communications
CALYPTUS
Mathieu Calleux mathieu.calleux@calyptus.net
+33-1-53-65-37-91

.