CRITEO (CRTO)

Tina Yao & Adriana Kille & Morgan Olenski

Investment ThesisBased on the competitive advantages, growth rate, and future growth

drivers, we firmly believe the Criteo is a

BUYCurrently trading price: $39.80

Our target price: $43.21~$58.81

Company OverviewCriteo is a technology company that engages in digital performance

marketing. The company combines technology, data, science and insight with a transparent cost-per-click model to deliver easy-to-measure ROI.

Partners

Key Clients

Focuses for 2016● 3 focuses: Innovation, Midmarkets,

Asian position○ mid-market up 90% Q/Q ○ Penetration has only reached 10% globally

● Focused on growing Asia-Pacific segment in 2016

○ Good way to capitalize on emerging markets○ Launch operations in India and take

advantage of the country's booming ecommerce; continue to drive high growth across Southeast Asia

● By 2018, over 60% of the global retail ecommerce will come from APAC

Geographic Segments

Economy Basics● Exchange rate: 1 dollar = 0.91 Euro

● GDP Growth Rate: 1.16%

● Unemployment: 10.5%

● Inflation: 0.17%

● Interest Rates: 0.5%

● Corporate tax rate: 33.33%

● 6th largest economy in the world

○ 3rd largest economy in Europe

Regional Overview● France

○ President recently introduced new plan

■ Includes extra 2 bil. euros to spur job creation

● Eurozone○ Expecting total fixed investment to grow 2.4% in 2016 (the fastest rate since 2007), accelerating

to 3.1% in 2017

○ Growing exports and rebounding domestic demand mean that capacity constraints are

emerging in a number of sectors.

○ Better access to credit and low interest rates is driving increased loan demand

Industry OverviewMultiple Devices

● Half of all eCommerce transactions are made using multiple devices

Big Shopping Holidays● Shift from in-store to online● Cyber Monday: $3B● Black Friday: $1.7B● Single’s Day: $14.3B

Higher Web- Influences● 8/10 shoppers look online

before visiting or while visiting● 38% of offline sales have a

web-influence

People Focused Marketing● Only 27% of people

companies can recognize them across devices

Competitors

Risks

Executing on Growth

Failure of Criteo Engine

Ad Blocking Software

Business Risks Political Risks

Regulation of using cookies and other tracking

technologies to collect data

Requires companies to get consent from user before placing cookies or other

tracking technologies

Competitive AdvantagesTechnology Driven Team

Jean-Baptiste RudelleEXECUTIVE CHAIRMAN AND CO-

FOUNDER

The Galion Project

Eric EichmannCHIEF EXECUTIVE OFFICER

COO at Living Social and Rosetta Stone

Senior Engagement Manager at McKinsey

and Co

Benoit FouillandCHIEF FINANCIAL OFFICER

CFO at SAP

Romain NiccoliCHIEF TECHNOLOGY OFFICER

AND CO-FOUNDER

Microsoft

Jonathan WolfCHIEF PRODUCT OFFICER

YahooBoston Consulting Group

Competitive AdvantagesPerformance marketing driven by technology

● 90% client retention rate for past 18 consecutive quarters

● Performance based pricing model

Key Drivers of GrowthTransition to Mobile

● Increased revenue ex-TAC over 47%● 25% of revenue ex-TAC from users on two or more devices

○ Over 65% of their customers share anonymized CRM data

Client Additions● 1B+ monthly users

● 25% increase of new clients

● Only 10% of possible customers in the middle market

Expansion of Publisher Relationships● 14,000+ publishers (up from 6,000 in 2013)

● Reach of over 90% of Internet websites in most major markets

Recent Financial Highlights● Revenue in the third quarter 2015 increased 54% (or 46% at constant currency[1]) to €299 million, compared with

€194 million in the third quarter 2014.

● Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, in the third quarter 2015 grew 55% (or 47% at constant currency) to €120 million, compared with €78 million in the third quarter 2014.

● Adjusted EBITDA for the third quarter 2015 was €31 million, an increase of 58% (or 55% at constant currency), compared with €20 million in the third quarter 2014.

● For the first time in Criteo’s history, Revenue crossed the €1 billion landmark on a last 12-month basis to reach €1.1 billion.

● Criteo added over 720 net clients in Q3 2015, while maintaining our client retention rate at over 90%.

● In September 2015, 90% of our clients were using our multi-screen solution.

Financial Analysis and Valuation- WACC 8.33%

- Beta 1.14 (correlated with NASDAQ)

SEE DCF MODEL