Tradedoubler Interim report January – September 2014

Tradedoubler takes performance marketing to a new level
The third quarter July – september 2014

  · Net sales were SEK 424 M (479), a decrease of 11% or 18% adjusted for
changes in FX rates. More than half of the decline referred to lower revenues
from two pan-European customers and reductions in non-core business.
  · Gross profit, excl. change related items, was SEK 91 M (107), a decrease of
15% or 21% adjusted for changes in FX rates. Gross margin, excl. change related
items, amounted to 21.4% (22.4).
  · Operating costs excl. depreciation and change related items, were SEK 79 M
(87), a reduction of 9% or 15% adjusted for changes in FX rates — mainly an
effect of the restructure announced at the end of 2013. Staff at end of Q3 2014
was 360 (455).
  · EBITDA, excl. change related items, was SEK 12 M (21).
  · Earnings per share, before and after dilution, were SEK 0.12 (0.30).
  · Cash flow from operating activities was SEK 30 M (29), almost entirely due
to a decrease in working capital.

The interim period January – September 2014

  · Net sales were SEK 1,280 M (1,497), a decrease of 14% or 19% adjusted for
changes in FX rates.
  · Excluding change related items, gross margin was 22.1% (22.8) and gross
profit amounted to SEK 283 M (341), a decrease of 17% or 21% adjusted for
changes in FX rates.
  · Operating costs excl. depreciation and change related items, were SEK 255 M
(281). Change related items were SEK -6.3 M (0) and EBITDA, excl. these, was SEK
28 M (59).
  · Cash flow from operating activities was SEK -88 M (51) and affected by
normalisation of working capital in Q1 after a temporary positive working
capital change in Q4 2013.
  · Earnings per share, before and after dilution, amounted to SEK ‑0.15 (0.75).
  · Matthias Stadelmeyer was appointed permanent CEO. A new CFO, Tomas Ljunglöf,
was recruited externally. Also, the Chief Strategy Officer, Chief Revenue
Officer and CTO left the company.

Significant events after the period

  · A new company strategy was launched in conjunction with this report. For
further information, see next page.
  · Current renegotiations with one major international client will have a
negative impact on revenue in 2015.

FINANCIAL           Jul    Jul    Change  Jan    Jan    Change  Full
OVERVIEW, SEK M     -Sep   -Sep   %2      -Sep   -Sep   %2      Year
                    2014   2013           2014   2013           2013

Net sales           424    479    -18%    1 280  1 497  -19%    2 001
Gross profit        91     107    -21%    283    341    -21%    455
excluding change
related items
Gross margin (%)    21,4%  22,4%          22,1%  22,8%          22,7%
Operating costs     -79    -87    -15%    -255   -281   -13%    -380
excl. depr. and
change related
costs
EBITDA excluding    12     21     -48%    28     59     -58%    75
change related
items
EBITDA-margin (%)   2,9%   4,3%           2,2%   4,0%           3,8%
Change related      6      -              -6     -              -22
items³
EBITDA              18     21     -20%    21     59     -68%    53
Operating profit    13     15             5      46             24
(EBIT)

Net investments in  -3     -6             -11    -24            -31
non-financial
fixed assets
Cash-flow from      30     29             -88    51             126
operating
activities
Liquid assets incl  410    186            410    186            506
financial
investments, at
period's end
Net cash1, at       165    186            165    186            262
period's end

1. Current
investment and
liquid
assets less
interest-bearing
liabilities
2. Per cent
changes are
adjusted for
changes in
exchange rates
3. Change related
items during Q3
2014 relates to a
one-off cost of
SEK 2 M and a
positive one-time
adjustment of the
publisher debt of
SEK 8 M

CEO Matthias Stadelmeyer’s comments on the third quarter 2014

“Underlying gross profit in our core business developed in line with the trend
from recent quarters. Adjusted for FX changes and one-offs, operating costs year
-to-date were SEK 38 M lower than last year and have compensated for slightly
more than half of the total gross profit decline. As previously communicated,
the annual cost reduction relating to the restructure at year-end 2013, with
full impact from the second half of 2014, is expected to be SEK 55 M. However,
the new strategy launched today implies significant expenditures to enhance the
core offerings in affiliate and technology as well as build new functionalities.
As an initial and immediate step 25 additional developers are being recruited.

We are continuously focusing on improving profitability and stabilising revenue
through operational efficiency. I see substantial potential for improvements and
I am content with the progress we are making. Nevertheless it will take time
until we see the financial impact of these efforts. Our strategic objective is
to take performance marketing to a new level. We will open our platform to use
multiple high quality traffic sources to create smarter results for our clients
based upon in-depth insights into online consumer behaviour enabled by data
-driven analysis.

We start a challenging, yet exciting journey. Our solid financial position,
active owners, dedicated personnel and new strategy give us a strong foundation
to address a substantially larger part of the total European performance
marketing arena.”

Presentation

This interim report will be presented at a teleconference on the 7th of November
2014 at 10.00 a.m. CET. To follow the presentation, please dial (SE) +46
8 519 990 30, (UK) +44 207 660 20 77 or (US) +1 855 269 26 06. The presentation
may also be followed via webcast using the link:
http://financials.tradedoubler.com/en-gb/investorrelations

Other

Tradedoubler discloses the information provided herein pursuant to the Swedish
Securities Markets Act. The information was released for publication on the 7th
of November 2014 at 08.00 a.m. CET. Numerical data in brackets refers to the
corresponding periods in 2013 unless otherwise stated. Rounding off differences
may arise.