maria hedengren - readly
TRANSCRIPT
JANUARY - MARCH 2021
Strong start to the year with continued solid growth
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CEO
CFO
Maria Hedengren
Johan Adalberth
[Insert footer] | [Insert extra text, if needed]Agenda
• This is Readly
• Quarterly highlights
• Financial performance
• Business highlights
• Summary
• Q&A
Agenda
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4
Readly has pioneered the digital magazine industry and is the European category leader
900~Publishers
5k+Titles
140k+Issues
11Markets
50Countries
17Languages
4.7App Store Rating
4Offices
PURPOSE
Bringing the magic of magazines into the future
- enabling the discovery and survival of quality content -
Browse +5,000 titles
EUR 9.99 / month | Unlimited reading
New and back issues availableFamily sharing | Up to 5 profiles
Offline reading | Downloadable content
Q1 highlights
• Strong subscriber (FPS) growth of 36.8% YoY
• Continued double-digit FPS growth on all markets
• Revenue increased by 32.0% YoY
• Continued strong revenue growth in the UK, 65.7% YoY
• Successful execution on partnership strategy and further optimization of marketing channels
• Continued focus on content category excellence
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38%
23%
23%
16%
Germany Sweden UK RoW
32.0% revenue growth to SEK 102 million
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Development of subscriber base
• Strong FPS growth by 36.8% in the quarter
• Continued double-digit growth in all markets
○ Good development in core markets with continued strong performance in the UK
○ Strong growth in our other markets
• Driven by successful execution on partnership strategy and further optimisation of marketing channels
397,071FPS
+37%YoY Growth
0
50000
100000
150000
200000
250000
300000
350000
400000
Mid-term:Uphold an annual organic
revenue growth
Long-term:Reach a gross margin of
Reach a positive EBITDA
Financial targets
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30-35% 35% 4-5 years
7783
93 99 102
0
20
40
60
80
100
120
Q120 Q220 Q320 Q420 Q121
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Number of FPS, thousand
+37%Q1 FPS growth YoY
+32%Q1 revenue growth YoY
290.2323.8 339.6
369.8397.1
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
Q120 Q220 Q320 Q420 Q121
Totalt revenue, SEKm
Gross profit & gross contribution Stable gross marginGross profit (SEKm) & margin
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Gross contribution (SEKm) & margin
25.2 27.031.3
33.6 33.9
32.7%32.3%
33.5%34.1%
33.2%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
30.0%
31.0%
32.0%
33.0%
34.0%
35.0%
36.0%
Q120 Q220 Q320 Q420 Q121
3.8
-23.2 -14.7
-4.0
-16.4
5.0%
-27.8%
-15.8%
-4.1%
-16.1%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
• Stable gross margin of 33.2%
• Increased investments in marketing
○ Relatively low marketing investments in Q1 2020
○ Broadened marketing channels and expansion to new markets
• Channel and market spend optimization continues to be in focus
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EBITDA development
• EBITDA development according to plan
• Personnel costs of SEK -21.9 (-17.6) million, expected to increase during the year following investments in capacity in primarily product development but also other areas like data analytics
• EBITDA expected to positive in 4-5 years in line with our financial goals
Adjusted EBITDA (SEKm) & margin
-29.4
-53.6
-39.6-37.8
-54.2-38.1%
-64.3%
-42.4% -38.3%
-53.2%-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
-60
-50
-40
-30
-20
-10
0
Q120 Q220 Q320 Q420 Q121
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Growing base of top tier publishers and content category excellence in focus
• 45 new publishers and 235 new titles including 12 newspapers added in Q1
• Newspapers increases reader engagement:
○ More frequent and longer reading sessions
○ Increased trial to paid sub conversion
○ Average reading time of newspapers in the UK increased more than 40% per month in Q1
○ No. of subscribers in Sweden who reads on daily basis increased by over 15% compared with Q1 2020
• The launch of Readly Insight continues according to plan with two signed contracts to date
Retail/FMC
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Partnerships: important steps taken in 2020…
• Strategically important channel to increase growth, reach further and strengthen brand awareness
• Over 100 new partnerships established in 2020
• Grew and “exported” strategic partners to multi-territories, e.g., Lidl and H&M
Selection of established partnerships
Telco
Consumer electronics Travel
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…and increased focus to drive growth in 2021
• Successful execution on partnership strategy in Q1 with 26 new partnerships with local and global brands
• Strong FPS intake and enhanced focus on partner channel
• Continue to build a strong network of strategic and tactical partners in all markets
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• Global market for magazines expected to be worth around 60bn USD in 2024, with a digital share of 29%
• In 2020 the digital share was 24%
• The increasing digital penetration of the magazine market is partly driven by increasing demand of immediate, trustworthy, comfortable and sustainable solutions
• Sales of print magazines impacted by Covid-19 pandemic - but digital sales stay resilient
* PwC Global Entertainment & Media outlook 2020-2024
71%
29%
MAGAZINE MARKET 2024
Print magazine market (incl. advertising)
Digital magazine market (incl. advertising)
~60bn USD
Market Opportunity
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Summary
• Strong FPS growth of 36.8% with continued double-digit growth across our markets YoY
• We continue to deliver on our financial targets
• Successful execution on partnership strategy and further optimization of marketing channels
• Continued focus on content category excellence
• Clear strategy to capture growth opportunities