Post on 15-Feb-2020
Investor Presentation
April/May 2019
Criteo 101
2 •2 •
This presentation contains “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include information concerning our possible or assumedfuture results of operations, business strategies, financing plans, projections, competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of competition and other actions by our counterparties.
Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this presentation, and nothing in this presentation should be regarded as a representation by any person that these beliefs or assumptions will take place or occur. You should read the Company’s most recent Annual Report on Form 10-K filed on March 1, 2019, including the Risk Factors set forth therein and the exhibits thereto, as well as future filings and reports by the Company, completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasonsactual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.
This presentation includes certain non-GAAP financial measures as defined by SEC rules. As required by Regulation G, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the Appendix slides.
Safe harbor statement
3 •3 •
Stock information and key financials
Ticker: CRTO
Stock Exchange: NASDAQ Global Market
CUSIP: 226718104
Shares Issued1: 66.1M
Stock Ownership2:
1 As of March 31, 20182 On a fully-diluted basis, as of March 31, 2018, based on 72.5 M fully diluted shares. 3 At constant currency
2018 Financials
• Revenue: $2,300M, (1%) at cc3
• Revenue ex-TAC: $966M, +2% at cc
• Adjusted EBITDA: $321M, +0% at cc
• Adj. EBITDA margin: 33% of Revenue ex-TAC
• Free Cash Flow: $135M, 42% of adj. EBITDA
Free float84.3%
Founders, NEOs,
Management & Employees
15.0%
Idinvest & Yahoo! Japan0.8%
Core solution91%
New solutions9%
Q1 2019 Revenue ex-TAC breakdown
4 •
A global company with scale
Criteo IDs
Clients
Countries
Sales transactions analyzed in LTM
Ads served in 2018
Criteos in R&D, tech & business intelligence
Employees
Offices worldwide
5 •5 •
Management team
Jean-Baptiste RudelleExecutive Chairman and Co-Founder, 48K-Mobile, Lucent,Roland Berger
Dan TeodosiuChief Technology Officer, 51Google, Microsoft, Hewlett-Packard
Mollie SpilmanChief Operating Officer, 50Millenial Media, Yahoo!, Advertising.com,Time Warner
Benoit FouillandChief Financial Officer, 53SAP, Business Objects
Ryan DamonEVP, General Counsel, 45Riverbed Technology, Charles Schwab, Gunderson Dettmer
Denis Collin EVP, People and Chief of Staff, 50Alcatel,Nokia,IBM
Isabelle Leung-TackVP, Global Communications, 45 Huawei,Microsoft
6 •6 •
Data Technology Scale Openness
Solutions built on key assets
7 •7 •
Our business model has strong attributes
Differentiated in Marketing
Attractive Direct
Sticky Open budgets
1 On average over the last four quarters through Q1 20192 Last twelve months to Q1 2019; Criteo Marketing Solutions3 Quarterly retention rate for all solutions combined – close to 90% for 36 consecutive quarters4 On average over the last four quarters through Q1 2019; Criteo Marketing Solutions. Represents uncapped budgets of our clients, which are either contractually uncapped or so large that the budget constraint does not restrict ad buys
>70%Direct relationships
with clients2
211Net client additions
per quarter1
~90%Client retention rate3
74%Of Revenue ex-TAC from
uncapped budgets4
Market & Trends
9 •9 •
Digital advertising’s share of global ad budgets continues to grow
Source: Zenith Advertising Expenditures Forecast
40%
50%
2018 2020
10 •10 •
Digital ad spend has long overtaken TV ad spend
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
$0B
$300B
TV
Digital
Source: MAGNA | Data for 2017 and beyond are forecasts – Created with Datawrapper
11 •11 •
Paid Display is the #1 Ad Spend category globally
Source: Criteo & Euromonitor, State of Ad Tech 2019
16%
14%
13%
10%10%
9%
9%
9%
9%
Marketing Budget Allocation by Activities, N=901
Paid Display
Social Media Marketing
Traditional Marketing (1)
Email Marketing
Content Marketing
SEO (2)
Search Advertising (PPC)
Landing Page/Website
Affiliate Marketing
(1) Print, Direct Mail, TV, Radio Ads
(2) Search Engine Optimization
12 •12 •
Northern Europe and Japan are mobile leaders.Mobile marches on
Source: Criteo, Q2 2018. Base: sales weighted aggregate, Apps excluded (see Methodology).
New Zealand 44%
Austria 44%
Switzerland 43%
Brazil 43%
Taiwan 42%
Italy 41%
United States 39%
France 39%
Belgium 38%
Canada 33%
Poland 33%
Russia 30%
Sweden 60%
Norway 57%
United Kingdom 55%
Japan 55%
Denmark 51%
Germany 50%
Finland 49%
Netherlands 49%
Spain 48%
South Korea 47%
Turkey 46%
Australia 46%
13 •13 •
The open Internet offers significant opportunity
Digital Ad Spend
Based on Nielsen US DCR trends, eMarketer, ExchangeWire, IDC
30% 70%
Time Spent
50% 50%
Open Internet Google/Facebook
Vision
15 •15 •
To be the leading advertising platform for the open internet
O U R V I S I O N :
16 •16 •
The open Internet offers multiple benefits to advertisers & publishers
Choice
Advertisers and publishers choose which partners to
work with and how
Neutrality
We have no conflicting
interests with advertisers and
publishers
Transparency
Advertisers and publishers
determine how to measure success
Controlof data
Advertisers and publishers keep control of their
own data
17 •17 •
Performance
Automation
Control
Demand
Relevance
Transparency
PublishersAdvertisers
Consumers
Our open internet vision delivers benefits for all
Experience
Consent
$800B+Annual
ecommercesales
19,000+Advertisers
3,700+Publishers
connected to Criteo Direct
Bidder
1.5B+Criteo IDs
Incl. 1,000+
Brands
And
350+Apps
Criteo Platform
19 •19 •
Criteo Platform delivers advertising and monetization opportunities
Awareness
Consideration
Conversion
Retail MediaMarketing Solutions
Supply-sideAdvertising Technology
RetailersAdvertisers
Criteo Platform
Web App Store
Brands
Buy-sideAdvertisingTechnology
Campaigns
Campaigns
Campaigns
20 •20 •
Fueled by a unique commerce data set and powered by AI
Awareness
Consideration
Conversion
Marketing Solutions
Advertisers
Shopper Graph
1Dynamic Creative Optimization+
AI EngineLookalike Finder Product Recommendations
1DCO+ Predictive Bidding
Web App Store
120+Intent signals/shopper
1.5B+Criteo IDs
4.5B+Products
$800B+eCommerce Sales
Supply-sideAdvertising Technology
Buy-sideAdvertisingTechnology
Retail Media
Retailers Brands
Campaigns
Campaigns
Campaigns
21 •21 •
Full-funnel capability addressing the entire customer journeyCriteo Marketing Solutions
Awareness
Marketing Goals
Consideration Conversion
Ad Objectives
Optimization
Get people to consider yourproducts or services
Encourage interested people to purchase
Generate interest in yourproducts or services
Reach
Views
Traffic: Web, App
App Installs
Conversion: Web, App
Store Conversions
Visits
InstallsConversions
Brand Awareness
Video Views
22 •22 •
Objectives and Campaign Types replace CDR, CCA, CAM, and ManageCriteo Marketing Solutions
CONSIDERATION
CONVERSION
Criteo Marketing SolutionsMarketing Goals Ad Objective Campaign examples
Dynamic Retargeting
Customer Acquisition
Audience Match Manage*
App Traffic
Web Traffic
App Installs
Web Conversions
App Conversions
Web traffic campaign for new customers, visitors or existing customers
App traffic campaign for app users or existing customers
App Installs campaign for existing web visitors or new users
Web conversion campaign for new customers, visitors or existing customers
App conversion campaigns for app users or existing customers
*Acquired in November 2018
23 •23 •
Technology for retailer and brand marketers to achieve their objectives
Criteo Retail Media
Supply-side Advertising Technology
Awareness Consideration Conversion
Buy-side Advertising Technology
SargentoSwiss
Cheese Slices$3.79
DEMAND
SUPPLY
Standard Commerce Display Sponsored Products
Flexible range of targeting and creative options
RETAILERS‘Monetization’
BRANDS & AGENCIES‘Sales Attribution’
24 •24 •
A self-service, API and managed services solution purpose-built for retailCriteo Retail Media
CONSIDERATION
CONVERSION
Criteo Retail MediaMarketing Goals Ad Objective Campaign examples
Sponsored Products
Sponsored Products Extension
Reseller Program
Commerce Display
(Storetail)
Web Traffic
Web Conversions
Web traffic campaign for new customers, visitors or existing customers
Web conversion campaign for new customers, visitors or existing customers
Audience Extension
ONSITE OFFSITE
ONSITE
OFFSITE
OFFSITE
Onsite = on a retailer’s site | Offsite = on a publisher’s site
Criteo Shopper Graph
26 •
A unified understanding of a shopper’s online journey and real-time intent dataCriteo Shopper Graph: the world’s largest shopper data set
Three trusted data collectives
OpenTwo-way exchange of data where the benefits always outweigh the contribution
TransparentGranular data sharing
SecureData privacy by design
FairClear and permission-based usage
Designed using our guiding principles
27 •
Identity Graph: matching of identifiers cross device, same device, and online/offline
Criteo’s advantages• ~75% of clients participate
• 1.5B+ Criteo IDs
• Global coverage
• +10% average uplift
Open, transparent, secure, fair• Encrypted and double-hashed personal
identifiable information (PII)
• Access at no additional cost
Participation• Opt-in by sending hashed identifiers
via OneTag or App Events SDK
28 •
Interest Map: anonymized shopper interest across products
Criteo’s advantages• Access to 4.5B+ products
• Large consumer reach worldwide
• Understand performance of product attributes
• 120+ shopping intent signals evaluated per shopper
• 21B product interactions per month
• 600TB daily shopper data
Open, transparent, secure, fair• Data isolated unless opt-in
• All data anonymized
• No free riders
• Contribution capped at 15% of pool
• Access at no additional cost
Participation• Opt-in to share anonymized data
• Opt-out to use client data only
29 •
Measurement Network: conversion and sales across retailers
Criteo’s advantages• SKU-level sales attribution for
brands across retailers
• Deterministic measurement
• Nearly 100 participating retailers
• $800B+ annual ecommerce sales
Open, transparent, secure, fair• All retailer data anonymized
Participation• When clients work with us, data within
and across retailers is aggregated
AI Engine
31 •31 •
Shopper-level optimization to drive CTR, CR, Order Value, or Product Margin
Proven machine-learning technology
> 20,000 tests/yearrun on new performance algorithms and variables
AI Engine
Lookalike Finder
Product Recommendation
Dynamic Creative
Optimization+
Predictive Bidding
32 •32 •
Lookalike Finder algorithms create relevant audiences
Dedicated campaign
Creation of a similar audience
Audience previously targeted or exposed to a specific category of products or services
Consumers likely to be interested in and engage
33 •33 •
Leveraging the power of our shopper graph and world-class algorithmsOffering shoppers the best product discovery experience
Campaign goal
Visitor’s site navigation
Recency and frequency of activity
Product type, price, and category
Most viewed products on retailer’s site
And much more...
The Criteo Engine recommends products based on:
Productswe show John
John browses“Bomber Jacket”on Uniqlo’s site
Product recommendations
34 •34 •
Enabling faster roll-out of Awareness and Consideration solutionsWe have a best-in-class Creative Studio
Creative studio
35 •35 •
Addressing full-funnel marketing goalsNew DCO+ delivers flexible creative formats in real time
Dynamic creativeDynamic Brand creative
Banner Formats
Brand creative
AWARENESS CONSIDERATION CONVERSION
Brand & Product focus Product focusBrand focus
36 •36 •
Our Predictive Bidding algorithms are industry-leading
The right bid for the right ad placement at the right time
User context Publisher interactionProduct behavior
Predictive bidding
Second-price bidder optimizationStandard bidder First-price bidder optimization
37 •37 •
We have immense computational power for real-time processing
SunnyvaleCA
DallasTX
AshburnVA
Paris (x2)
Amsterdam (x2)
Hong Kong
Tokyo
~36,000 servers9 data centers
Data center locations
2 Hadoop clusters3,350 servers
240K terabytes storage capacity530 terabytes of random-access memory
38 •38 •
A privacy by design approach since day 1:
data minimization approach
Trust requires transparency and control (Adchoiceicon, cross device
optout)
A European player with clear track
record in privacy
Criteo AI Engine: Where Artificial Intelligence meets privacy
CPM/CPC model: an incentive to present
relevant ads
Client Management Center
40 •40 •
We provide enhanced self-service capabilities
Integrated and modular customer platformproviding control, visibility and detailed transparency on campaigns
Client sign-up & onboarding
Autonomous, fast onboarding
Accelerated midmarket client additions
Campaign Management
More control for clients and agencies
Productivity & retention
Analytics &Insights
More transparency and insights for clients
Productivity & retention
41 •41 •
Self-service, API and managed service delivery optionsWe offer a modular, flexible and progressively open platform
Supply
IntegrationsEvent CollectionBilling
Objective
Coupons
Audiences Creatives
Catalogs
APIsUser Interfaces
Criteo Platform
Campaigns
Self-
serv
ice
tool
s
42 •42 •
43 •43 •
Benefiting from Criteo’s unique commerce audience dataTargeting the right users with new audience creation options
Users Visitors or Existing customersNew customersNew customers
•Web visitors or app users•Customer contact lists•Offline buyers•Platform audiences
Marketing Goals Awareness
Consideration
-
Awareness
Consideration
Conversion
-
Consideration
Conversion
Custom AudiencesSimilar AudiencesCommerce AudiencesAudiences
•Similar to your recent web and app users using Lookalike Finder AI technology
•Choose from 140+ product interest categories within our Shopper Graph commerce data set
44 •44 •
45 •45 •
46 •46 •
Solutions
Criteo Marketing Solutions
49 •49 •
Criteo Dynamic RetargetingCriteo Marketing Solutions
Revenue model• Revenue = Clicks x CPC
• Traffic Acquisition Cost (TAC) = CPM x impressions
• Revenue ex TAC = Revenues – TAC
• Revenue ex-TAC margin: Approx. 40%
What it does• Connect across web, mobile, app, social, and video using 120 intent signals
• Optimize with continuous machine-learning against business objectives
• Increase mobile app engagement
Benefits• Bring shoppers back to buy to drive more sales and increase profitability
• Gain access to the best inventory
• Engage shoppers by delivering the right ad at the right price and device with personalized product recommendations and 17 trillion ad set variations
50 •50 •
Criteo Customer AcquisitionCriteo Marketing Solutions
What it does• Targets highly relevant shoppers using historic shopping and browsing events from
Criteo’s identity graph
• Reaches relevant new customers with user-centric personalized product recommendations
• Only qualifies relevant shoppers, based on Criteo’s interest map, based on your optimal
customer using unique, shopper-scoring techniques
Benefits• Generate significant new revenue from relevant new customers
• Discover new customers across a pool that covers 72% of the world’s online
shoppers
• Drive maximum ROI with the industry’s only performance-based acquisition model
Pricing
• CPC | CPM*
*tentative
51 •51 •
Criteo Audience MatchCriteo Marketing Solutions
What it does• Identify audience and campaign objective
• Pass the audience list to be targeted
• Match audience with Criteo’s identity graph with 4B+ global device IDs
• Deliver personalized ads to drive engaged traffic to the advertiser’s website
Benefits• Boost sales by re-engaging existing
shoppers
• Bring qualified traffic back to the advertiser’s website
• Capitalize on market leading match rate of up to 60%
Use cases
Offline to onlineOfflineBuyers
Card Holders
LoyaltyAudiences that may soon churn
SeasonalSeasonalBuyers
Top SellersLapsed
Shoppers
UpsellBundleOffer
UpgradeAudiences likely
to upgrade
*tentative
Pricing
• CPC | CPM*
52 •52 •
ManageCriteo Marketing Solutions
Creative Formats & Supply• Primarily use/edit existing advertiser formats
• Single resource dedicated to CS
• ~40% video
• 100% RTB supply
Pricing
• Sell on a CPI*, optimize to CPA**
• Ability to sell on CPC or CPM for brand campaigns
* Cost per Install** Cost per Action
Criteo Retail Media
54 •54 •
Sponsored ProductsCriteo Retail Media
DYSON SUPERSONIC HAIR DRYER, FUCHSIA/IRON259,99 €
BenefitsOffer brands native product recommendation
based placements that increase conversion
personalized recommendations based on shopper’s unique journey
BudgetTrade and Performance
Pricing
CPC
55 •55 •
398,25 €
DYSON Aspirateurbalai DYSON V7
Animal
Sponsored Products ExtensionCriteo Retail Media
BenefitsEnable brands to retarget customers with relevant
product recommendations across Criteo’s
premium publisher network
personalized recommendations based on shopper’s unique journey
BudgetTrade and Performance
Pricing
CPC
56 •56 •
Benefits for sellers on the
Marketplace• Access best-in-class, commerce marketing technology
• Drive incremental, high-quality traffic and more sales
• Activate campaigns immediately – no integration required
Benefits for Marketplaces• Unlock new revenue by reselling Criteo Dynamic Retargeting
• Boost overall Gross Merchandise Value (GMV)
• Increase merchant loyalty with proven technology for sales growth
Criteo Retail MediaCriteo Reseller Program
57 •57 •
DYSON SUPERSONIC HAIR DRYER, FUCHSIA/IRON259,99 €
Commerce DisplayCriteo Retail Media
BenefitsEnable brands to increase consideration and
conversion with ecommerce display
placements, including guaranteed inventory
dynamic ecommerce features based on product catalog, availability, and other factors
BudgetShopper Marketing and National Media
Pricing
CPM
58 •58 •
Audience ExtensionCriteo Retail Media
DISCOVER
branded, standard display
BenefitsEnable brands to build shopper audience
segments and target them across Criteo’s
premium publisher network
BudgetNational Media
Pricing
CPM
Clients & Go-to-market approach
60 •60 •
A large opportunity to win new clients
<25%Midmarket penetration~50%
Large Clients penetration
~60,000 addressable clients worldwide in Retail, Travel and Classifieds
(excluding brands)
61 •61 •
Direct relationships with many premium commerce and brand clients
62 •62 •
A go-to-market approach to best serve our clients at scale
A$200K+
B
$50K+
D
$10K+
E
$5K+
F
<$5K
C
$20K+
Large Clients
Upper Mid-Market
Lower Mid-Market
Monthly ad spend
Highly customized service and proactive insights/proposals
Efficient, high quality, scalable and automated serviceto the highest number of clients
Client tiering
Objectives • Adapt sales organization to a multi-solution offering
• Provide the right level of service to each client segment
• Scale operations and enhance profitability
Consultative sales Telesales Self-service platform
1
2
3
63 •63 •
We are working to sell our new solutions in a more scalable way
1. Accelerate sales growth of new solutions
• Adapt Sales & Operations organization• Hire more sales specialists• Increase training of sales teams
Early 2020
2. Accelerate demand-generation programs for midmarket
• Third-party sales channels• Ecommerce Platform Partners• Lead-generation programs
Early 2020
Publisher inventory
65 •65 •
Extensive supply partnerships ensures audience access
Direct partnerships3,500+ Premium publishers
Exchange partnersLong-tail & emerging formats
Closed environments
Additional Reach
• Flexible buying technology: RTB/S2S, Criteo direct bidder, SDK, API• Any relevant creative formats/environment: IAB, Native, In-App, Video, Google AMP
66 •66 •
The publisher environment is constantly evolving
Transition to Mobile Social Native
Multiple Devices Header BiddingAd Blocking
Changing consumer behavior Evolving technology
Programmatic
Our drives more value for publishers
In App
67 •67 •
We have always delivered user-friendly ads
Ad blocking offers an opportunity for players with:• The right business model
• The right technology stack
• The right expertise in user privacy
• Premium demand
Our Position • Promote acceptable ad programs
• Invest in native formats
• Support an open tracking standard
• Define standards for retargeting
68 •68 •
• Criteo Direct Bidder (CDB) allows Criteo to bid on publisher inventory directly through the ad server without the need to funnel demand through Supply Side Platforms (SSPs) or exchanges.
• Benefits for the publisher:
• all of the Criteo bid goes to the publisher; none is taken by the SSP for fees (typically 10%-20%)
• user matching between the Publisher and Criteo is much more timely and complete than matching reliant on a third party
• +20-40% spend with publishers on the same inventory that was previously accessed through RTB
• Launched in Q2 2017, already connected to 3,700 publishers and over 350 apps at the end of Q1 2019
Criteo Direct Bidder: Direct access to Criteo’s unique demand
Competitive positioning
70 •
We have strong core competencies
Advertisers need a global strategic partner
• ~700 R&D & Product engineers• 13 years of Machine Learning• 20,000+ tests/year on new variables
• Global across 95+ markets• $800B+ annual ecommerce sales• 1.5B+ Criteo IDs
• Transparent rules on data sharing• ~75% of clients participate in ID Graph• No competing business agenda
We are well positioned to win
71 •71 •
Advertising technology positioning
CLOSED
OPEN
WORKFLOW AUTOMATION PREDICTIVE PERFORMANCE
Note: based on Criteo’s qualitative assessment
72 •
DSP
Retargeting
Mobile Advertising
Sponsored Products
Social Advertising
Ad Servers
Email Marketing
Marketing Automation
Social Media Marketing
Web Content Management
Data Management Platform
Analytics
App Measurement
Data Providers
Tag Management
Feed Management
Digital Commerce Platform
Adtech: Paid MediaCriteo wins 90% of head-to-head tests
Martech: Owned and Earned MediaCriteo complements these vendors
Data and Operations Infrastructure Criteo integrates with these technologies
Criteo in the Adtech/Martech Landscape
Strategy
74 •74 •
• Evolve go-to-market strategy to gain large
and midmarket clients in a scalable way
• Gain and retain clients through
our self-service platform
• Add new brand and retailer clients globally
Grow the customer base Increase our value for clients and partners
• Enhance AI/Deep Learning technology
• Grow and leverage Criteo Shopper Graph
• Enhance self-service capabilities
• Expand Marketing Solutions & Criteo Retail Media
• Broaden supply of quality inventory
Our growth strategy is based on two strong pillars
75 •75 •
Further strengthening the leading advertising platform for the open InternetOur company transformation supports our strategic goals
Further Broaden our Suite of Solutions
Deliver Solutions on Self-Service, API or Managed-Service
AdaptGo-to-Market
76 •76 •
We invest in growing areas in digital advertising – and beyond
• Leverage strong growth of apps
• Store advertising
•
•
•• Build flexible and modular client platform
•• Complete expansion of solution suite
* Prospective
77 •77 •
Maintain our 2019 profitability outlook and will seek to increase it in 20202019 is another transition year with increased focus on profitability
More scalable way to sell entire product suite
Increased focus on effective cost management
• Maintain 2019 profitability outlook
• Target higher margin in 2020
Track-record of execution & Financials
79 •79 •
1 We define Revenue ex-TAC as our revenue excluding traffic acquisition costs, or TAC, generated over the applicable measurement period. Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP. Please see the Appendices for a reconciliation of Revenue ex-TAC to Revenue, the most directly comparable GAAP measure. 2 We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, acquisition-related costs and deferred price consideration. Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. Please see the Appendices for a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure.
147238
403
534
730
941 966
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
2242
105
143
225
310 321
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Solid financial track record since IPO
Revenue ex-TAC1 ($ millions) Adjusted EBITDA2 ($ million)37%CAGR
High growth
Expandingprofitability
80 •80 •
11.0 11.912.9
14.5 15.4 16.4 17.3 18.1 18.5 19.0 19.2 19.4 19.4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
We have a large client base and maintain high retention
Client Retention Rate1 Number of clients (in thousands)
1 The retention rate represents the percentage of live clients during the previous quarter that continued to be live clients during the current quarter. For all solutions combined.
81 •81 •
941 966
FY2017 FY2018
+2%2
1 Revenue ex-TAC, Adjusted EBITDA, and Free Cash Flow are not measures calculated in accordance with U.S. GAAP. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the Appendix slides2 At constant currency
Key figures – FY2018
REVENUE EX-TAC1 ($M) ADJUSTED EBITDA1 ($M) FREE CASH FLOW1 ($M)
33% margin (% of Revenue ex-TAC)
42% of Adj. EBITDA
310 321
FY2017 FY2018
137 135
FY2017 FY2018
82 •82 •
240 236
Q1 2018 Q1 2019
+2%2
Key figures – Q1 2019
63% of Adj. EBITDA
7869
Q1 2018 Q1 2019
5244
Q1 2018 Q1 20191 Revenue ex-TAC, Adjusted EBITDA, and Free Cash Flow are not measures calculated in accordance with U.S. GAAP. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the Appendix slides2 At constant currency
REVENUE EX-TAC1 ($M) ADJUSTED EBITDA1 ($M) FREE CASH FLOW1 ($M)
29% margin (% of Revenue ex-TAC)
83 •83 •
Solid financial model: doubled Adj. EBITDA margin since IPO
As % of Revenue ex-TAC FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 LTM
Q1 2018LTM
Q1 2019
Revenue ex-TAC 100% 100% 100% 100% 100% 100% 100% 100%
Other cost of revenue1 7.9% 6.6% 6.1% 6.4% 6.9% 6.7% 6.6% 6.9%
Gross margin 92.1% 93.4% 93.9% 93.6% 93.1% 93.3% 93.4% 93.1%
R&D1 14.9% 12.5% 13.4% 14.2% 14.7% 15.2% 14.8% 15.3%
S&O1 43.6% 39.9% 39.8% 35.3% 34.8% 33.6% 34.1% 33.7%
G&A1 16.0% 14.8% 13.8% 13.2% 10.7% 11.3% 10.4% 11.6%
Adjusted EBITDA 17.5% 26.2% 26.9% 30.8% 32.9% 33.2% 34.1% 32.5%
Revenue ex-TAC margin2 40.3% 40.8% 40.4% 40.6% 41.0% 42.0% 41.4% 41.9%
* Cost of revenue and operating expenses are expressed on a Non-GAAP basis, which excludes the impact of equity awards compensation expense, pension service costs, depreciation and amortization, acquisition-related costs, restructuring and deferred price consideration. ** As a % of revenue
84 •84 •
Technology innovation
Broader supply
Upselling new solutions
Automation & self-service
Significant drivers of further operating leverage
Powered by a combination of
85 •85 •
Robust operating cash flow enables smart investment
INVESTDEVELOP & GROW
CASHSCALE
PROFITS
SMARTINVESTING
86 •86 •
Our financial structure offers significant flexibility
* Based on a $1.5bn market capitalization, pursuant to the 2018 AGM authorization to issue up to 6m shares** For M&A and to satisfy employee equity plan vesting
Strong balance sheet
1,531 1,597
Dec. 2017 Dec. 2018
Total assets (in $M) Financial liabilities (in $M)
Very low debt
4 4
Dec. 2017 Dec. 2018
Cash & cash equivalents (in $M)
Significantcash pile
414364
Dec. 2017 Dec. 2018
>20% of assets
$396Mcash
As of March 31, 2019
€350Mcommitted financing
$150M equity raise capacity*
Share buy-back authorization**
87 •87 •
Flexible capital allocation prioritizes growth
••
–––
•
•Organic growth
M&A
•
•
•
Share repurchase program
88 •88 •
Large market opportunity
Clear vision Competitive moats Proven track-record
Attractive financial profile
Investment thesis
Digital advertising is large and growing fast
Be the leading advertising platform for the open Internet
Technology
Scale
Openness
Large client base
~90% client retention for all solutions
combined
Plan to return to growth
High profitability
Strong cash flow
VP, Head of Investor Relations32, rue Blanche
75009 Paris+33 1 7621 2166
e.lassalle@criteo.com
Director, Investor Relations387 Park Ave South, 12th Floor
New York, NY 10016+1 917 837 8617
f.edelmann@criteo.com
Friederike EdelmannEdouard Lassalle
Investor Relations Contacts: IR@Criteo.com
Appendix
91 •91 •
($ in thousands) Q1’17 Q2’17 Q3'17 Q4’17 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19
Revenue 516,667 542,022 563,973 674,031 564,164 537,185 528,869 670,096 558,123
Less: Traffic acquisition costs 306,693 322,200 329,576 397,087 323,746 306,963 305,387 398,238 322,429
Revenue ex-TAC 209,974 219,822 234,397 276,944 240,418 230,222 223,482 271,858 235,694
Revenue ex-TAC reconciliation
($ in thousands) 2017 2018
Revenue 2,296,692 2,300,314
Less: Traffic acquisition costs 1,355,556 1,334,334
Revenue ex-TAC 941,136 965,980
92 •92 •
Adjusted EBITDA reconciliation
($ in thousands) Q1’17 Q2’17 Q3'17 Q4'17 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 2017 2018
Net income 14,518 7,505 22,269 52,368 21,090 14,707 17,948 42,134 21,401 96,659 95,879Adjustments:Financial (income) expense, net 2,333 2,094 2,886 2,221 1,325 1,006 1,007 1,746 1,974 9,534 5,084
Provision for income taxes 4,201 3,665 7,858 15,927 12,386 8,638 6,821 18,299 10,018 31,651 46,144
Equity awardscompensation expense 14,940 14,918 22,028 20,464 19,303 20,245 17,261 10,267 13,882 72,351 67,076
Pension service costs 290 299 320 321 434 419 419 419 394 1,231 1,691
Depreciation and amortization expense 20,167 22,306 23,755 24,570 23,646 23,560 25,619 30,675 19,296 90,796 103,500
Acquisition-related costs 6 - - - - - 516 1,222 - 6 1,738
Restructuring - 3,299 - 4,057 (252) 199 - - 1,890 7,356 (53)
Total net adjustments 41,936 46,581 56,847 67,560 56,842 54,067 51,643 62,628 47,454 212,925 225,180
Adjusted EBITDA 56,454 54,086 79,116 119,928 77,932 68,774 69,591 104,762 68,855 309,584 321,059
93 •93 •
Free cash flow reconciliation
($ in thousands) Q1 2018 Q1 2019
CASH FROM OPERATING ACTIVITIES 84,527 67,220
Acquisition of intangible assets, property, plant and equipment (7,413) (13,292)
Change in accounts payable related to intangible assets, property, plant and equipment (25,154) (10,392)
FREE CASH FLOW 51,960 43,536