Financials

Improved market confidence, reflected in increased smartphone sales and demand for more advanced functionality and services, have ensured InternetQ’s continued growth across its B2B and B2C businesses in 2014. The Company remained focused on delivering on its business strategy, successfully expanding its international portfolio and consolidating its presence in Latin America through the acquisition of Up Mobile in the period. InternetQ’s solid performance is reflected in its 2014 financial results, as evidenced by the robust overall financial performance and a strong start to 2015.

Group revenues increased by 27% in 2014, with both the B2B and B2C businesses delivering substantial sales growth. Revenues from B2B activities grew by 18% to €103.9 million (2013: €87.7 million) while revenues from B2C grew by 71% to €28.5 million (2013: €16.7 million).  Acquisitions completed during the year contributed €0.9 million (post acquisition) (2013: €19.3 million) to Group revenues.

Operating costs increased by 37%, primarily due to costs incurred following acquisitions and geographic expansion. Adjusted EBITDA (note 2) grew by 37% to €22.3 million (2013: €16.2 million), a margin of 17% (2013: 16%). The adjusted profit after income tax for the year reached €13.1 million compared to €11.1 million for 2013. Acquisitions completed during the year did not contribute to the Group’s profit after income tax post acquisition.

Investment in the Akazoo and Minimob platforms resulted in an increase in capital expenditure. Total capital expenditure including fixed and intangibles assets for the year ended 31 December 2014 stood at €14.7 million, an increase of 5% from the previous year (2013: €13.9 million).

The Group ended 2014 with €0.2 million (2013: €4.7 million) net cash, which consisted of €12.3 million cash, cash equivalents and restricted cash (2013: €13.2 million) and €12.1 million of bank debt (2013: €8.5 million). The terms and conditions of the Group’s borrowing agreements continue to be relatively favourable. Our €4 million term loan matures in March 2022 and another €2 million loan arrangement matures in May 2017. InternetQ Germany also obtained a €3 million overdraft facility to finance its expansion into gaming, the utilised portion as of year-end was €2.8million.

The Group generated €15.8 million (2013: €12.2 million) in cash from operating activities and reduced the receivables days outstanding to 96 days (2013: 108 days) and its cash conversion cycle to 43 days (2013: 63 days).

InternetQ is entering 2015 in a stronger financial position than at the start of the 2014 financial year. We are pleased that our focus on balancing strict cost control with selective investment, managing working capital and increasing cash conversion, is showing through in our solid financial results.

Overall we have completed a year of considered corporate recalibration which positions the Group strongly from an operational and a financial standpoint, providing a base to capitalise on in 2015 and beyond.