Financials

The Group’s financial results for the year are once again the Company’s best ever in terms of revenues and profits, allowing us to look to 2014 with optimism. The market environment is very positive, with ever increasing numbers of Smartphones and an increasing breadth of functions and services provided through such devices. InternetQ has continued to extend geographically and also to develop new value added services which will maintain our momentum in years to come.

The Company’s performance, and ability to drive profitable growth during the past year is not only a result of the healthy market, the strength of our market proposition and operational execution, but can also be attributed to our approach to managing costs, cash flow and our balance sheet.

In addition, 2013 was marked by the completion of two important acquisitions, Atlas Interactive in Germany and Interacel in Latin America. As such, by the end of 2013 the Group held a strong position, having achieved the objectives of globalizing its operations, improving its competitiveness and creating a balanced portfolio of products, setting a strong foundation for future growth.

Group revenues generated 42% growth in 2013, with both segments delivering substantial sales growth. Revenues from B2B activities grew by 43% to € 87.7 million (2012: €61.5 million) while revenues from B2C grew by 40% to € 16.7 million (2012: €11.9 million).

Selling and administration costs increased by 49%, primarily due to the acquisitions and the geographic expansion of the business. Adjusted EBITDA (after adjustment for share incentive plans and share based payments amounting to €1,412,997) (Note 9) grew by 33% to €16.2 million (2012: €12.3 million) a margin of 16% (2012: 17%). The profit after tax for the year reached €8.7 million compared to €6 million for 2012.

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 2013 stood at €14.4 million, an increase of 82% from the previous year (2012: €7.9 million).

The Group ended 2013 with €4.7 million (2012: €2.2 million) net cash, which consisted of €13.2 million (2012: €9.3 million) cash and cash equivalents and restricted cash and €8.5 million of bank debt (2012: €7.1 million). The Group raised €11.1 million of capital in July 2013 in order to finance the acquisition of Atlas Interactive in Germany and the expansion of its business internationally. The terms and conditions of the Group’s borrowing agreements continue to be relatively favorable. Our €4 million term loan matures in March 2022 and another €2 million loan arrangement matures in April 2017. InternetQ Germany also obtained a €2 million overdraft facility for the financing of its expanding business with gaming companies, from which, the utilized portion as of year-end was €1.1 million.

InternetQ is entering 2014 in a stronger financial position than at the start of the previous year. We have delivered strong financial results with a continued dedication to cost control, selective investments, and improved cash conversion. All in all, we have completed a year of considered corporate recalibration to position the Group more strongly from an operational, as well as, from a financial standpoint providing a base to capitalize on in the future.

For all of us in the Group’s Management, our foremost concern is to take careful and measured steps to offset risks and to safeguard the interests of the Group, of our people, of our shareholders and of our partners. In other words, of all those who put their trust in us and who assist us in our efforts.