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AUGUST 2012 WWW.HI-MEDIA.COM
FROM DIGITAL CONTENT TO DIGITAL PAYMENTS
HI-MEDIA GROUP ̸ H1 2012 RESULTS
About us
Being Structured for New Growth Path
Activities Evolution & Recent Events
H1 2012 Financial Performance
Market Outlooks – Developments & Perspectives
Take Away Points
H1 2012 RESULTS ̸ AGENDA
2
HI-MEDIA GROUP
ABOUT US
WWW.HI-MEDIA.COM 3
ABOUT US ̸ LEADING ONLINE MONETIZATION COMPANY
4
Company created in 1996, headquartered in Paris
Posted €230m in sales in FY2011; €101m in H1 2012
Operates in 9 European countries
Headcount of 470 people including 100 IT
Leading independent player across Europe
Two automated monetization platforms :
Advertising:
Payments:
Listed on NYSE Euronext Paris, ISIN code: FR0000075988 - HIM
ADVERTISING ̸ KEY FIGURES
LEADING INDEPENDENT PLAYER IN EUROPE
€44M REVENUE IN H1 2012
20 BILLIONS AD IMPRESSIONS DISPLAYED EVERY MONTH
2 000+ ACTIVE WEBSITES REPRESENTED
160M+ UNIQUE INTERNET USERS EVERY MONTH ACROSS EUROPE
5
PAYMENTS ̸ KEY FIGURES
LEADING INDEPENDENT PLAYER IN EUROPE
€56M REVENUE IN H1 2012
10 MILLION TRANSACTIONS PER MONTH
+20 000 ACTIVE MERCHANTS
50 PAYMENT METHODS IN 85 COUNTRIES
DOUBLE BANKING LICENSE – PSP, E-MONEY ISSUER
6
HI-MEDIA GROUP
BEING STRUCTURED FOR NEW GROWTH PATH
WWW.HI-MEDIA.COM 7
ADVERTISING ̸ INNOVATION TOWARDS GROWTH PATH
1996 Hi-Media starts its display ad
Network activity in France
2009 AdLINK acquisition
by Hi-Media Group
2011 Mobile & video
Ad network launch
H2 2012 Affiliation service
Retargeting solution
2010 Performance marketing
launch
2012 Hi-Media launches
Ad-eXchange
PREMIUM DISPLAY AD INVENTORY
PERFORMANCE MARKETING
AFFILIATION
RETARGETING
DOMESTIC INTERNATIONAL
PRODUCT
COVERAGE
POSITIONNING
FULLY EQUIPED FOR TAYLOR MADE AND AUTOMATED AD SOLUTIONS
HI-MEDIA
AD-EXCHANGE
8
PAYMENTS ̸ INNOVATION TOWARDS GROWTH PATH
2003 Hi-Media launches its
Micropayments platform
in France
2006 Allopass acquisition
by Hi-Media Group
2009 Hipay launch
H2 2012 Full service
Launch
2008 Electronic Money
Issuer licence
2011 PSP Licence
MOBILE PAYMENT & ALTERNATIVE SOLUTIONS
E-WALLET (BANKING)
FULL
BANKING
DOMESTIC INTERNATIONAL
PRODUCT
COVERAGE
POSITIONNING
FROM MICROPAYMENTS TO A FULL DIGITAL PAYMENTS SET 9
HI-MEDIA
PAY-EXCHANGE
STRUCTURE INNOVATION ̸ WHAT’S GOING ON?
Operations:
Teams reorganized to answer market evolutions
Centralization of decisions & functions
Recruitment of new expertise & talented people
Investments / Capex
Increase of the IT team (c. 100 people)
Development of new technologies in line with time to market
Ad-eXchange; retargeting
payments-eXchange; full services
HI-MEDIA GROUP CREATING NEW GROWTH PATH AND LEVERAGE 10
STRUCTURE OPTIMIZATION ̸ WHAT’S GOING ON?
Change in perimeter:
Advertising: UK, NL
Perimeter & cost structure optimization
Improve gross margin
Business arbitrage:
Payments: decided to stop various activities that were at risk or not
sufficiently profitable (eg. Instant wins)
Business & cost structure optimization
Improve gross margin
HI-MEDIA GROUP READY FOR GROWTH MARKET UPTURN 11
ACTIVITIES EVOLUTION
& RECENT EVENTS
WWW.HI-MEDIA.COM 12
ADVERTISING ̸ SPECIAL OPERATIONS
A plebiscite for tailor made approaches
Custom solutions to answer specific needs &
objectives
Maximization of the ad impact / brand recognition
Content related / Ad thematics / specific ad
formats
A dedicated team (creative studio & sales)
Unique positioning for advertisers:
News / Lifestyle / Entertainment
Strong growth trends 150% yoy
SPECIAL OPERATIONS WILL BE ONE OF THE GROWTH PILARD
IN THE COMING YEARS
PHILADELPHIA / 750g SFR / Jeuxvideo.com
13
ADVERTISING ̸ INNOVATION & LINE-UP EXPANSIONS
HI-MEDIA GETS MORE & MORE INDEPENDANT IN TERM OF
TECHNOLOGY AND OPENS NEW SALES OPPORTUNITIES
Affiliation platform
Retargeting solution
Dynamic banner solutions
Dedicated Video ad network
14
HI-MEDIA BEING A PIONNER IN MOVING FULL AD-EXCHANGE
ENJOYS LEADERSHIP, TECHNOLOGY & EXPERTISE
ADVERTISING ̸ AD-EXCHANGE
Technological approach / volume driven
Automated ad transactions / More ROI oriented
Use of state of the art technology
Large volumes / standard ad formats
#1 Ad-eXchange platform in Europe
Only platform to provide rich media formats
Unique positioning for advertisers:
News / Lifestyle / Entertainment
End of H1 was on a monthly run rate of 9% sales
coming from the Ad-eXchange
15
Publishers
Availability of the entire inventory on the ad exhange
All the sales criteria (pricing floor for example) are embede d within the ad exchangeAdExchange
Advertisers & Agencies
Buying criteria filing in the demand side platform (DSP).
Bids are automatically inserted with in the ad exchange.
When an ad placement comply with all the criteria all DSPs participate to the auction.
Competitive process between all auctions available for the inventory within the ad exchange.
The client who has the highest bid wins the auction
Ad network
ALL NEWLY SIGNED CONTRACTS HAVE BEEN GAINED ON
THE TAILOR MADE & AD-EXCHANGE UNIQUE POSITIONING
ADVERTISING ̸ RECENTLY SIGNED CONTRACTS
Publishers
Jan Feb Mar Apr May Jun
New operating partnership starting H2 2012
Partnership to enhance the Entertainment vertical positioning & strategy
- Deduplicated audience of c.9 million unics
- Creating the largest online advertising platform targeting the 15-24 years old in FR
16
AGGREGATING THE BEST PAYMENT
SOLUTIONS
PAYMENT
SOLUTIONS
ONE-STOP-SHOP SOLUTION
PAYMENTS ̸ CREATING A PAYMENT EXCHANGE PLATFORM
50 WITH
ONE INTEGRATION / APIs
ONE BACK OFFICE
ONE REPORTING
ONE SETTLEMENT
ONE DEDICATED TEAM
17
TOWARD A PAYMENT EXCHANGE PLATFORM WITH MOBILE,
ALTERNATIVE & FULL SERVICE (BANKING) CAPABILITIES TO
SERVE ONLINE PUBLISHERS & MERCHANTS
PAYMENTS ̸ RECENTLY SIGNED CONTRACTS
Publishers & Merchants
Jan Feb Mar Apr May Jun
Payment Solutions
Jan Feb Mar Apr May Jun
18
HI-MEDIA GROUP
H1 2012 FINANCIAL PERFORMANCE
WWW.HI-MEDIA.COM 19
ADVERTISING DECREASES DUE TO THE CARVE OUT OF NL & UK
AS WELL AS A DEPRESSED SITUATION IN SOUTHERN EUROPE
PAYMENTS STILL GROWING STRONGLY THANKS TO HIPAY
ADVERTISING
H1 2012 PERFORMANCE ̸ ACTIVITIES EVOLUTION
PAYMENTS
20
OVERALL GROSS PROFIT GENERATION DECREASE DUE TO
CARVE OUT ISSUES & A DECREASING ACTIVITY IN
ADVERTISING
ADVERTISING
H1 2012 PERFORMANCE ̸ GROSS PROFIT EVOLUTION
PAYMENTS
21
COST STRUCTURE STABLE & UNDER CONTROL DESPITE
MIGRATION/REORGANIZATION & DEVELOPMENT COSTS
H1 2012 PERFORMANCE ̸ OPERATING EXPENSES EVOLUTION
OPEX
PURCHASE PURCHASE
HR EXPENSES HR EXPENSES
D&A D&A
22
A PRESERVED LEVEL OF PROFITABILTY DESPITE THE
DECREASING LEVEL OF ACTIVITY & THE INCURED COST OF THE
ON-GOING TECHNOLOGICAL & OPERATIONAL CHANGES
CURRENT EBIT
H1 2012 PERFORMANCE ̸ CURRENT EBIT & NET RESULTS
NET RESULTS
23
A SATISFYING CASH FLOW GENERATION
H1 2012 PERFORMANCE ̸ CASH FLOW GENERATION
Sain operating structure
management
Working capital improvement
Share buy back of 0.9m shares
Investment in new tech platforms
Financial investment in:
Semilo (NL)
La Tribune (FR)
24
Cash Flow Generation as of June 30, 2012, in million euros
January 1, 2012 June 30, 2012
A STRONG FINANCIAL SITUATION
WITHIN THE GROUP STANDARDS
H1 2012 PERFORMANCE ̸ BALANCE SHEET
Strong shareholder equity level
Low level of long term financial
debt
Cash position of €13M
25
Fixed assets
Account receivable
Other assets
Cash & equivalents
Shareholder equity
Long term financial debt
Account payable
Other liabilities
MARKETS OUTLOOK
DEVELOPMENTS & PERSPECTIVES
WWW.HI-MEDIA.COM 26
ADVERTISING ̸ MARKET TRENDS
DESPITE CURRENT TURMOIL, ONLINE ADVERTISING SEGMENT
REMAINS VERY PROMISING THANKS TO NEW INNOVATIONS
SUCH AS THE AD-EXCHANGE & THE VIDEO FORMATS
Ad-eXchange market trend Ad investment market trend
Forecasted Growth Total Real-Time Bidding
Based Sales, By Country, 2010-2015
27
Online video ad investments expected growth in Europe
ADVERTISING ̸ NEW OUTLOOKS
Our markets & targets
AD-EXCHANGE
VIDEO
SPECIAL OPS
RETARGETING
Fast growing market (25% ad
investment market share in 2015) –
leading position and technology
refferent (Appnexus)
Dedicated sales team and creative studio.
Strong partnerships such as Skyrock will
increase value, visibility and sales in a
growing market
Dedicated business unit to improve
technology and visibility, increase sales
impact and inventory
Develop our own in-house technology.
Able to tackle this growing market and
stop dependency from third party
providers
A BRAND NEW REVENUE
POTENTIAL TO CATCH
28
PAYMENTS ̸ MARKET TRENDS
Content dematerialization continues to
become more and more important
Essentially based on freemium models
inspired by the gaming industry
Various industries are coming more and
more interested on the model: press, VOD,.
FREEMIUM MODELS
ARE STILL THE NEXT BIG THING 29
HI-MEDIA PAYMENTS ̸ NEW OUTLOOKS
Our markets & targets
GAMING
VIRTUAL GOODS
INTERNATIONAL
START-UPS
Any gaming merchant that is
already working with Allopass or
Hipay and that has a significant
potential
Mid-sized merchants that address several
geographical markets and where there is
the need for local solutions
Digital goods where we can offer both
micro and traditionnal payment solutions
Merchants in ecommerce areas.
Minimum 1M€ yearly flow.
A BRAND NEW REVENUE
POTENTIAL TO CATCH
30
HI-MEDIA GROUP
TAKE AWAY POINTS
WWW.HI-MEDIA.COM 31
MONETIZATION COMPANY ̸ INNOVATION & EXPERTISE
Currently creates two different eXchange platforms for audience monetization
HI-MEDIA : MORE EFFICIENT ORGANISATION TO
MAXIMIZE AUDIENCE MONETIZATION & SALES 32
Mobile Payments
Alternative Payments
Banking Payments
Dedicated tailor made solutions
(special operations)
Fully automated Ad-eXchange platform
HI-MEDIA GROUP
APPENDIX
WWW.HI-MEDIA.COM 33
H1 2012 PERFORMANCE ̸ DETAILED P&L
34
Period from 1 January to 30 June 2011 - in €M H1 2012 H1 2011
Turnover 100.8 117.5
Gross profit 35.7 38.2
Gross margin 35% 32%
Current operating income 6.7 9.0
Stock base compensation -0.3 -1.0
Other non-current earnings and charges 0.7 -0.1
Operating income 7.1 8.0
Financial result -1.0 -0.9
Share in the income of the SMEs -0.3 +0.2
Pre-tax earnings 5.8 7.3
Net income of the consolidated companies 5.5 5.1
34