Boulogne-Billancourt, 26 March 2008
MEETIC (ISIN: FR0004063097), European leader in online dating, announces its results for the year ended 31 December 2007.
EBITDA margin reaches a record high of 27.5% in second half
EBITDA before the cost of share awards amounted to €27.3 million, an increase of 55.9% compared with 2006. The EBITDA margin before the cost of share awards therefore came to 24.0% compared with 22.2% at end-2006. This better than expected margin performance was driven by continued sustained growth in business coupled with deliberately tight control over marketing expenditure in the second half, given the positive trends in MEETIC’s business growth indicators.
The EBITDA margin at end June 2007 stood at 18.6% after marketing expenditure of €28.4 million, which represented 54% of first-half revenue. The EBITDA margin for the second half of the year therefore came to 27.5%.
The sharp improvement in margins from one half to the next once again illustrates the effectiveness of MEETIC’s strategy, which combines strong business growth with cost control.
MEETIC’s business model has also confirmed its ability to generate cash, with operating cash flow amounting to €21 million in 2007 (after the payment of €9 million of tax, versus €1 million in 2006).
The Group’s net cash surplus therefore stood at €41.5 million at the end of 2007 before the acquisition of NEU.DE, which was completed in January 2008 for a total cash consideration of €25 million.
A proven strategy and strengthened leadership
The Group continued to roll out its strategy effectively in 2007 and the benefits of decisions made during the year are already apparent in its 2007 results.
Successful roll-out of V2.0
ARPU rose to €17.60 in 2007 compared with €16.66 in 2006, reflecting the successful roll-out of V2.0 and more particularly the sale of new packages at higher rates and longer subscription periods. The churn rate was 15.3% in 2007 compared with 15.8% the previous year, and fell to 14.57% in the second half of 2007.
The positive trends in MEETIC’s subscription model indicators and strong growth in margins reflect the Group’s ability to anticipate and adapt successfully to market trends.
- European leadership strengthened, with the successive acquisitions of DatingDirect.com in the UK and NEU.DE in Germany (completed in January 2008), both of which are strategic countries for the Group.
- Continued internationalisation: launch of Meetic Taiwan and strengthened presence in Latin America (Mexico, Argentina and Brazil). MEETIC now operates in eighteen countries.
- Segmentation of the offering, with the launch of a new version of Ulteem and yeeyoo.com in China, and the acquisition of Cleargay, French number one in gay online dating.
MEETIC has built up a substantial asset base through its pioneering position in the fast-growing online dating market and rapid roll-out of its strategy. These assets not only underpin MEETIC’s excellent brand awareness but also its high traffic levels.
MEETIC now intends to leverage these assets to embark on the second chapter of its history. It aims to become a fully-fledged European media group by launching a strategic plan based notably on the creation of an editorial and traffic division. In particular, this new editorial and traffic division will be doped by the onlining, during 2008, of a media community portal for women, VIOO, and the deployment of a social network for young people, PEEXME.
In accordance with MEETIC’s economic model, this 3-year strategy will be supported by investments, and in particular marketing investments, that could reach €10 to 15 million a year.Marc Simoncini, Chairman and Chief Executive Officer of MEETIC, comments: „Our strong 2007 results once again demonstrate MEETIC’s exceptional ability to anticipate and adapt to its markets. MEETIC will now embark on the second chapter of its history by leveraging the unique assets it has in its business model, audience, brand awareness and technological and human capital. The strategic initiatives taken in 2007, especially in terms of offering segmentation, will be substantially developed in 2008. The Group will also launch an editorial and traffic division at the end of the first half to monetise its audience gradually through the fast-growing Internet advertising market. MEETIC is therefore positioning itself as a fully-fledged media group, combining revenues and margins from three complementary business activities: pay subscription services, mobile services and site-generated advertising revenues“.