ADSLOT LIMITED Dear Shareholders,
It is with great pleasure that I present Adslot Ltd's Annual Report for 2015.
The 2015 Financial Year was a pivotal year for the Company, as it achieved unambiguous validation of its technology and the value it creates for the media industry.
In FY15, the Company continued to position itself to capitalise on the shift away from manual media buying processes towards automated trading of premium digital advertising. And finally we are seeing this strategy validated in all key metrics across the business.
From a revenue perspective: the long-awaited arrival of meaningful Trading Technology revenues finally emerged, becoming the largest revenue segment for the Company, growing 69% on FY14. This was in part driven by the significant increase in the value of media traded via Adslot Marketplace (up 437% on FY14).
Revenues from continuing operations and total income were both up 28% and 26% respectively on the prior corresponding period, and the Company's EBITDA loss was reduced by 32%. From a cash-flow perspective, receipts from trade and other debtors grew 73% year on year, from $4.77m to $8.28m, while net cash outflows from operating activities reduced by 43%.
In terms of capturing media buying demand: in the twelve months to 30 June 2015, we saw the annualised value of digital ad spend via Symphony grow by 39% from $1.65 billion to $2.3 billion. Growth in Symphony spend was due to increased investment from existing customers and the signing of further Symphony contracts with major agencies across the world. New clients signed over the year included Starcom MediaVest in Australia (one of Australia's largest media buying agencies); Haworth in the US; and Goldbach in Europe.
On the 'supply-side' (or Publisher side), we signed partnership agreements in the United States with two of the biggest brand-name publishers in the world: Microsoft and Yahoo. We are slowly moving towards integration with these companies, as they wait for the industry to adopt standard protocols by which premium ad inventory can be made available via platforms such as Adslot. On this note, I am pleased to advise that Adslot has taken an active leadership role in designing and architecting the 'Open Direct' standard protocols to be adopted by the Internet Advertising Bureau (IAB) by the end of the year. Once confirmed, we will prioritise integration projects with Yahoo and Microsoft to be completed shortly after, and we expect to see meaningful trading volume for this premium inventory.
In addition, during the 2015 financial year we signed global partnership agreements with two of the largest software and platform vendors to publishers, Operative and Pubmatic.
Innovation is also at the core of everything Adslot does. We take a design-led approach to building the best user interfaces and user experiences in the world, combined with seamless, efficient functionality. This has allowed us to maintain product leadership and superiority as it pertains to the trading of forward guaranteed inventory.
In August 2014, we announced the launch of Adslot's first integration with Symphony, followed up in April 2015 with a significant integration update, bringing true automation from media planning straight through to campaign execution, management and reporting. Through a collaboration with Neilsen, we are now also able to provide enhanced planning tools based on audience demographics.
From a corporate perspective, we undertook a $6.5m capital raising (strategic placement) in July 2014 to allow the Company to move quicker on a lot of these ambitious projects. We also welcomed another independent director to the Board, Sarah Morgan, who chairs the Company's Audit & Risk Committee.
All in all, it's been a big year, with considerable progress having been made - but the race is far from over. It feels like it's been a long time coming, but there are good early signs that our original vision for Adslot is proving not only realistic and achievable, but now well within reach.
As the industry continues to shift towards the automation of premium media buying and campaign execution, Adslot is at the forefront and will continue to strategically position itself to capitalise on this shift. We expect to see further validation and growth in the 2016 financial year.
I'd like to thank all our loyal shareholders for their continued support in FY15, and all our hard- working employees who have consistently pushed themselves during the period to make steady progress towards our ultimate goal: to become the leading platform for trading premium digital advertising globally.
Thanks for joining us on this journey. Yours sincerely,
Andrew Barlow Chairman
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