2013 Final Results Presentation

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Slide 1

Digital Globe Services Limited

Final Results to 30 June 2013

Leader in providing outsourced online customer acquisition services

September 2013


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Slide 2

Presenters and Agenda

Presenters:

Jeff Cox Chief Executive Officer

Bruce Casely Chief Financial Officer

Agenda:

Introduction

Highlights

Financial Review

Business Development

Conclusion & Questions


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Slide 4

Contact centres 400+ agents in 4 locations

pdfp

.cm/fl

/

PAKISTANMEXICO

Mexico CityOutsourced

English/Spanish

LahoreOwned

English/Spanish

KarachiOwnedEnglish

GRENADA

St. GeorgesOutsourced

English


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Slide 5

Market Structural growth drivers

Global Advertising

$ billions

Global Search Advertising

$ billionsDouble digit growth inunderlying onlineadvertising markets

Outsourcing trend

more strongly favoursexpert providers likeDGS

DGS occupies highestgrowth components

DGS winning largerallocations of clientadvertising budgets

Source: Magna Global, Digital Media Forecasts, December 2012. CAGR 2012-2017

2012 2017

Digital Traditional

2012 2017

Search Display

Social Mobile

$98$174

$45

$83

$480

$619

$98

$174

$41

$52

$16

$6$6

$23

Mobile 23% CAGR

Search 13% CAGR

Social 29% CAGR

Display 5% CAGR

Digital 12% CAGR

Traditional 3% CAGR


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Slide 8

Financials Dividends and cash

In June paid $1.4m dividend

Declaring a further $290k dividend to total $1.69m for H2 FY13since going public to be paid in October

This totals 6.27 cents per share*

Cash balance of $4m at year end

*Based on 27,021,388 shares in issue, excluding ESOP shares which do not rank for div idend until post option exercise


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Slide 9

Summary Financials P&L and Balance Sheet

$000 Audited Jun-12 Jun-13

Revenue 19,977 25,541

Cost of Revenue 12,914 15,758

Gross Profit 7,063 9,782

SG & A 4,037 6,560

EBITDA (Adjusted)* 3,049 4,025

Other expenses 164 501

Taxes** 1,064 5,091

Net Income/(loss) 1,798 (2,715)

$000 Audited Jun-12 Jun-13

Cash and Equivalents 453 4,004

Accounts Receivable, Net 2,637 3,982

Deferred Tax Asset - 220

Prepayments

Related party receivables

-

211

1,095

-

Total Current Assets 3,301 9,301

Plant Property and

Equipment 41 544

Goodwill 206 206

Intangible Assets - 775

Total Non Current Assets 247 1,525

Total Assets 3,548 10,826

Trade Payables 1,778 2,482

Related-party Payable 200 -

Factoring Advance 1,286 -

Deferred Tax Liability 43 64

Other Liabilities 64 982

Income tax (Cyprus) 48

Total Liabilities 3,370 3,576

Shareholders Equity 177 7,250

*EBITDA adding back foreign exchange losses, extraordinary items and ESOP charge

**IP was sold pre IPO to TRG resulting in a $4.8m tax charge. This was offset by NetOperating Losses and a capital contribution by TRG for the same amount


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Slide 10

Operational expansion Use of IPO proceeds

Investment in working capital

Expansion of call centre operations$700k: New 330 seat state of the art call centre in Lahore,capacity to end Dec 14 based on current forecasts

$350k: Additional build out of further call centre and techoperational centre in Karachi

Paying down of facilityRetired $2.4m of factored bank debt

Recruitment and business developmentRemainder of proceeds held to take advantage of marketopportunities


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Slide 12

Growth Strategy Three pillars

Core Platform

Geographic Expansion

Sector Addition

AddSatellite

And Wireless

AddBusiness

To Business

AddAgency

Business

OptimiseIn HouseSpending

Canada

Latin America

France, Germany and United Kingdom

Other Europe

Australia and New Zealand

Middle East and Asia

AlternativeEnergy

Insurance

RetailBanking

Education

HomeAutomation

Healthcare

Legal

ScaleCurrentClients

Geographic Expansion

Utilities


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Slide 13

Growth Product and service development

New business of bespoke software development services

Licensing of dgSMART software and analytics platform

Bespoke software platform development for existing Fortune500 customer base

Diversification and visibility of future revenue streams

Investment in resources to meet expansion and new lines ofbusiness


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Slide 14

Year Ahead Consistent focus

Grow core business

Accounts for most of growth in FY14

Launch Europe, expand Latin AmericaExpect revenues in H1 2014

Seek opportunistic acquisitions in Emerging MarketsAccelerategeographic or relevant sector growth

Invest in dgSMART to increase competitive advantageAdd bench strength and capacity


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Slide 15

Summary & Outlook

Strong financial performance and growth

Continued execution on three pillar strategy

Expand new line of product development

Confident outlook


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Slide 17

DGS Management team

Bruce Casely

Chief Financial Officer

Jeff Cox

Chief Executive Officer

Founded DGS in 2008VP Direct Channels, CharterSan Diego State University, BA

Jeff has over 20 years of experience in direct

marketing, including responsibilities for internet,

contact center, direct mail, and door to door

marketing. He has served as VP of Sales

Channels for Charter Communications and inexecutive roles at Verizon Wireless and Airtouch

Cellular.

Joined DGS in 2012Head of M&A, VION Food Group UKRobert Gordon University BA; Member of theChartered Institute of Bankers in Scotland

Bruce has over 19 years of finance experience

with particular focus on strategic planning and

analysis, mergers and acquisitions, and corporate

finance. He has worked for Bank of Scotland,

Rothschild, Ernst & Young and Scottish &Newcastle plc


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Slide 18

Paid search Proprietary technology

Proprietary databases on theperformance characteristics of nearly

10 million search terms in over 6000geographic locations developed over

five years

Proprietary algorithms thatdetermine the optimal price to pay for

advertising to ensure effectiveadvertising placement

+

Proprietary processesand tools formanaging specific client

requirements


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Slide 19

Websites Expertise in design and integration

Own or manage over 26 properties

Systems integration with clientsenables real time service availabilityand provisioning

Marketing integration withcustomers enables use of brandingand trademarks

Pricing integration with clients

Optimised artwork and copydesigned to drive customerconversion

C f


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Slide 20

Competitive position Performance leader

Industry has focused on revenue growth by bidding to win in

paid search auctions; DGS is not the largest provider whenmeasured in revenue terms

DGS has focused on profitabilityand customer quality bydeveloping data and algorithms; clients view DGS as the

performance and quality leader

DGS has built unique performance data and algorithmsthrough interactive market experience over time; financialinvestment alone is insufficient to compete

DGS is both gaining market share and growing absolutevolume

S Fi i l C h Fl


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Slide 21

Summary Financials Cash Flow$ Audited

Jun-12 Jun-13

Cash flows from operating activities

Net (loss)/income 1,798,072 (2,714,623)

Depreciation and amortisation 20,465 203,627

Income tax expense - 47,779

Stock Options Plan charge - 470,565Foreign currency translation - (816)

Adjustment to reconcile net income to net cash provided by operating activities:

Changes in assets and liabilities:

Accounts receivable (946,355) (1,345,113)

Related-party receivables (123,507) 211,427

Prepayments and other assets 6,376 (1,095,448)

Accounts payable 736,272 704,063

Related-party payables (79,675) (200,085)

Other liabilities (5,951) 918,240

Deferred tax - net 472,080 (198,304)

Net cash (used in)/provided by operating activities 1,877,777 (2,998,688)

Cash flows from investing activities

Purchases of intangible assets - (900,000)

Purchases of computer and office equipment (31,936) (581,603)

Net cash used in investing activities (31,936) (1,481,603)

Cash flows from financing activities

Repayment of loan from customer (1,250,000) -

(Repayments of)/advances on factoring arrangement 1,286,585 (1,286,592)

Gross proceeds from issue of new shares - 9,099,761

Extraordinary listing costs included within equity - (1,386,557)

Other capital contribution - 4,696,079Dividend paid (1,630,411) (3,091,566)

Net cash provided by/(used in) financing activities (1,593,826) 8,031,125

Net increase in cash 252,015 3,550,834

Cash at the beginning of the period 200,762 452,777

Cash at the end of the period 452,777 4,003,611

Supplement disclosures of Cash Flow Information

Cash paid during the period for interest 150,728 483,586

Cash paid during the period for income tax 1,064,163 -


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2013 Final Results Presentation

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