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1 •
Criteo 101
Investor Presentation February 2019
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, 2018, including the Risk Factors set forth therein and the exhibits thereto, the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 2, 2018, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, that was filed with the SEC on November 5, 2018, 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 reasons actual 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 •
Stock information and key financials
Ticker: CRTO
Stock Exchange: NASDAQ Global Market
CUSIP: 226718104
Shares outstanding1: 67.7M
Stock Ownership2:
1 As of December 31, 20182 On a fully-diluted basis, as of December 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
Free float84.0%
Founders, NEOs,
Management & Employees
15.3%
Idinvest & Yahoo! Japan0.8%
Core solution87%
New solutions13%
Q4 2018 Revenue ex-TAC breakdown
4 •
A global company with scale
Users in the Criteo Identity Graph
Clients
Countries
Sales transactions analyzed in LTM
Ads served in 2018
Criteos in R&D, tech & business intelligence
Employees
Offices worldwide
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, Chief of Staff and People, 50Alcatel,Nokia,IBM
6 •
Enabler, pioneer & innovator
We broughtperformance-based personalized marketing to display in 2008
We have since innovated in many ways…2008First CPC model in display
Real-time Creative OptimizationAOV Optimizer
Privacy by Design
Facebook Exchange
Universal Match
Apple-compliant solution Travel Segments in Engine
Conversion Rate Optimizer
4.5B products imported from merchants everyday
TOP!
Daily RTB: 55bn bid requests,1.2bn wins
Retail Media
600
TB of Data analyzed everyday
Largest Hadoop cluster in Europe
Dynamic product banners
Engine Optimized Segments
Pass
back
Sizelesscreatives
One
tag
App Deep linkingUnique User
Value Prediction
Mobile Ad FormatsApp advertising
Native Ads
AdaptiveRevenue Optimizer
App
Inst
all
Measurement
Dire
ct
Bid
der
Identity Graph
Interest Map
7 •
Data Technology Scale Openness
Solutions built on key assets
8 •
Our business model has unique attributes
Differentiated in Marketing
Attractive Direct
Sticky Elastic Demand
1 On average over the last four quarters through Q4 20182 Last twelve months to Q4 2018; excluding Criteo Retail Media3 Quarterly retention rate for all solutions combined – close to 90% for 35 consecutive quarters4 On average over the last four quarters through Q4 2018; excluding Criteo Retail Media. Represents uncapped budgets of our clients, which are either contractually uncapped or so large that the budget constraint does not restrict ad buys
75%Direct relationships
with clients2
325Net client additions
per quarter1
~90%Client retention rate3
73%Of Revenue ex-TAC from
uncapped budgets4
Market & Trends
10 •
Digital advertising’s share of global ad budgets continues to grow
Source: Zenith Advertising Expenditures Forecast
40%
50%
2018 2020
11 •
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
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 •
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 •
O U R V I S I O N :
To be the leading advertising platform for the open Internet
16 •
What’s the open Internet?
Where advertisers and publishers are in control and free to choose:
How to work with different partners
Whether to share customer data
How to measure success
17 •
• Performance• Transparency• Automation• Control
• Experience• Consent
• Performance• Fairness• Transparency
PublishersAdvertisers
Consumers
19,500Advertisers
incl.
1,000+Brands
3,500Premium
publishers
$800B+Annual
ecommerce sales
1.5B+Active
Shoppers Monthly
Our open Internet vision delivers benefits for all
Criteo Platform
19 •
The Criteo Platform supports advertising & monetization objectives
AWARENESS
CONSIDERATION
CONVERSION
Criteo Platform
Criteo Retail MediaCriteo Marketing Solutions
Web App Offline Onsite Offsite
CAMPAIGNS CAMPAIGNS
20 •
Leveraging the world’s largest open commerce data setFueled by a unique data set and powered by Artificial Intelligence
CAMPAIGNS CAMPAIGNS
AI Engine
Shopper Graph
AWARENESS
CONSIDERATION
CONVERSION
Lookalike Finder Product Recommendation DCO+1 Predictive
Bidding
Criteo Platform
Web App Offline Onsite Offsite
Criteo Retail MediaCriteo Marketing Solutions
1 Dynamic Creative Optimization+
21 •
Full-funnel capability addressing the entire buying journeyCriteo Marketing Solutions
AD OBJECTIVES• Brand Awareness
• Video Views
• Traffic
• Web, App
• App Installs
• Conversions
• Web, App
• Store Conversions
OPTIMIZATION • Reach, Views • Visits, Installs • Conversions
AwarenessGenerate interest in your
products or services
ConsiderationGet people to consider your
products or services
ConversionEncourage interested people
to purchase
MARKETING GOALS
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 •
Technology for retailer and brand marketers to achieve their objectivesCriteo Retail Media
Awareness Consideration
BRANDS & AGENCIES‘Sales Attribution’ Buy-side Advertising Technology
Sargento
Swiss
Cheese Slices$3.79
Supply-side Advertising TechnologyRETAILERS‘Monetization’
DEMAND
SUPPLY
Conversion
Standard Commerce Display Sponsored Products
Flexible range of targeting and display options
24 •
A self-service 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+ users
• 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 •
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 •
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 •
Product Recommendation accurately recommends the best offer
Campaign goal
Visitor’s site navigation
Recency and frequency of activity
Product type, price, and category
Most viewed products on Uniqlo’s site
And much more...
The Criteo Engine recommends products based on:
Productswe show John
John browses“Bomber Jacket”on Uniqlo’s site
34 •
Dynamic Creative Optimization+ delivers perfectly branded ads, optimized for every user
35 •
Predictive Bidding determines the right ad opportunities
7:45 AM 8:00 AM 9:00 AM 12:30 PM 6:00 PM 9:00 PM 11:30 PM
The right bid for the right placement at the right time
User context Publisher interactionProduct behavior
36 •
A privacy by design approach since day 1: data minimization
approach
CPM/CPC model: an incentive to present
relevant ads
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
Client Management Center
38 •
Self-service and managed service delivery optionsModular, flexible and open
ANALYTICS
BILLINGEVENT COLLECTION
CATALOGS
INTEGRATIONS
SHOPPER GRAPH
AUDIENCES
SUPPLY
CREATIVES
AI ENGINE
APIsUSER INTERFACES
Criteo Platform
CAMPAIGNS
39 •
Benefiting from Criteo’s unique commerce audience dataTargeting the right users with new audience creation options
Users Visitors or Existing customers
New 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
40 •
Flexible creative formats to address full-funnel marketing goals
1. Brand creative
• Brand focus
• No DCO+
Awareness
2. Dynamic Brand creative
• Brand & product focus
• Elements DCO+
Consideration
3. Dynamic creative
• Product focus
• 100% DCO+
Conversion
Banner formats
Video
Creative
• Original video • Original video • Dynamic video
• 3rd party creative
• Creative Management Platform integration
• 3rd party creative
• Creative Management Platform integration
• 3rd party creative
• Creative Management Platform integration
41 •
Client Management Center
• Self-service campaign creation
• Real-time monitoring and optimization of marketing efforts
• Insights on performance and budget
• Granular reporting and attribution across all products in the client’s product catalog
Solutions
Criteo Marketing Solutions
44 •
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
45 •
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
46 •
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*
47 •
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
49 •
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
50 •
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
51 •
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
52 •
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
53 •
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
55 •
Direct relationships with many premium commerce and brand clients
* 19,419 clients at the end of Q4 2018
56 •
Adapting our go-to-market to best serve our clients across all solutions Go-to-market & client service
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
New 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
57 •
A large opportunity to win new clients
25%Midmarket penetration50%
Large Clients penetration
~60,000 addressable clients worldwide in Retail, Travel and Classifieds
(excluding brands)
Publisher inventory
59 •
Ensures inventory-agnostic access to usersExtensive supply partnerships
Direct partnerships3,500 Premium publishers
Exchange partnersLong-tail & emerging formats
Walled gardensAccess to massive scale
• Flexible buying technology: RTB/S2S, Criteo direct bidder, SDK, API• Any relevant creative formats/environment: IAB, Native, In-App, Video, Google AMP
Retail partnerFor Criteo Retail Media
60 •
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
61 •
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
62 •
• 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 3,500 publishers at the end of Q4 2018
Criteo Direct Bidder: Direct access to Criteo’s unique demand
Competitive positioning
64 •
Our core competencies are difficult to replicate
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+ users in ID Graph
• Transparent rules on data sharing• ~75% of clients participate in ID Graph• No competing business agenda
We are well positioned to win
65 •
Advertising technology positioning
CLOSED
OPEN
WORKFLOW AUTOMATION PREDICTIVE PERFORMANCE
Note: based solely on Criteo’s qualitative assessment
66 •
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
Growth strategy
68 •
• Evolve go-to-market strategy for large and
midmarket clients
• Further scale and automate midmarket
operations worldwide
• Add new brand and retailer clients globally
Grow the customer base Increase our value for clients and partners
• Enhance Artificial Intelligence/Deep Learning technology
• Grow and leverage Criteo Shopper Graph
• Enhance self-service capabilities
• Expand Marketing Solutions & Retail Media
• Broaden quality supply of inventory
Our growth strategy is based on two strong pillars
69 •
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
70 •
We invest to drive a rebound in growth and profitability in 2020 and beyond2019 is a year of accelerating growth momentum
Continuing to grow our app business
Improving the pace of hiring
Driven by healthy business fundamentals and our investments into
Accelerating client additions through our self service platform
Growing our new solutions to drive broader marketing goals for clients
Track-record of execution & Financials
72 •
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.
Solid financial track record since IPO
Revenue ex-TAC1 ($ millions) Adjusted EBITDA2 ($ million)
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
37%CAGR
High growth
Expandingprofitability
73 •
9.3 10.2 11.0 11.912.9
14.5 15.4 16.4 17.3 18.1 18.5 19.0 19.2 19.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
We continue to add clients while maintaining 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.
74 •
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
Revenue ex-TAC 100% 100% 100% 100% 100% 100%
Other cost of revenue* 7.9% 6.6% 6.1% 6.4% 6.9% 6.7%
Gross margin 92.1% 93.4% 93.9% 93.6% 93.1% 93.3%
R&D* 14.9% 12.5% 13.4% 14.2% 14.7% 15.2%
S&O* 43.6% 39.9% 39.8% 35.3% 34.8% 33.6%
G&A* 16.0% 14.8% 13.8% 13.2% 10.7% 11.3%
Adjusted EBITDA 17.5% 26.2% 26.9% 30.8% 32.9% 33.2%
Revenue ex-TAC margin** 40.3% 40.8% 40.4% 40.6% 41.0% 42.0%
* 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
75 •
941 966
FY2017 FY2018
+2%*
* At constant currency
Profitable growth and strong cash flow – FY2018
REVENUE EX-TAC ($M) ADJUSTED EBITDA ($M) FREE CASH FLOW ($M)
33% margin (% of Revenue ex-TAC)
42% of Adj. EBITDA
310 321
FY2017 FY2018
137 135
FY2017 FY2018
76 •
Technology innovation
Broader supply
Upselling new solutions
Automation & self-service
Strong drivers for further operating leverage
Powered by a combination of
77 •
Robust operating cash flow enables smart investment
INVESTDEVELOP & GROW
CASHSCALE
PROFITS
SMARTINVESTING
78 •
Our financial structure offers significant flexibility
* Based on a $1.8bn market capitalization, pursuant to the 2018 AGM authorization to issue up to 6.6m 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
$364Mcash
As of December 31, 2018
€350Mcommitted financing
$170M equity raise capacity*
Share buy-back authorization**
79 •
Flexible capital allocation prioritizes growth
••
–––
•
•Organic growth
M&A
•
•Share repurchase
program
80 •
Large market opportunity
Clear vision Competitive moats Proven track-record
Attractive financial profile
Compelling investment thesis
Digital advertising is large and growing fast
Be the leading advertising platform for the open Internet
Technology
Scale
Openness
Client growth
~90% client retention for all solutions
combined
Plan to return to Growth
Increasing profitability
Strong cash flow
VP, Head of Investor Relations32, rue Blanche
75009 Paris+33 1 7621 2166
e.lassalle@criteo.com
Director, Investor Relations387 Park Ave South, 12th Floor
New York, NY 10016+1 917 837 8617
f.edelmann@criteo.com
Friederike EdelmannEdouard Lassalle
Investor Relations Contacts: IR@Criteo.com
82 •
Appendix
83 •
($ in thousands) Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3'17 Q4’17 Q1’18 Q2’18 Q3’18 Q4’18
Revenue 401,253 407,201 423,867 566,825 516,667 542,022 563,973 674,031 564,164 537,185 528,869 670,096
Less: Traffic acquisition costs 238,755 240,969 247,310 341,877 306,693 322,200 329,576 397,087 323,746 306,963 305,387 398,238
Revenue ex-TAC 162,498 166,232 176,557 224,948 209,974 219,822 234,397 276,944 240,418 230,222 223,482 271,858
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
84 •
Adjusted EBITDA reconciliation
($ in thousands) Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3'17 Q4'17 Q1’18 Q2’18 Q3’18 Q4’18 2017 2018
Net income 18,527 13,339 14,724 40,740 14,518 7,505 22,269 52,368 21,090 14,707 17,948 42,134 96,659 95,879Adjustments:
Financial (income) expense, net 1,317 94 570 (1,435) 2,333 2,094 2,886 2,221 1,325 1,006 1,007 1,746 9,534 5,084
Provision for income taxes 7,944 4,450 7,574 13,161 4,201 3,665 7,858 15,927 12,386 8,638 6,821 18,299 31,651 46,144
Equity awardscompensation expense 8,370 7,695 13,965 13,229 14,940 14,918 22,028 20,464 19,303 20,245 17,261 10,267 72,351 67,076
Pension service costs 129 131 132 133 290 299 320 321 434 419 419 419 1,231 1,691
Depreciation and amortization expense 12,516 13,300 14,771 16,190 20,167 22,306 23,755 24,570 23,646 23,560 25,619 30,675 90,796 103,500
Acquisition-related costs - 148 1,793 980 6 - - - - - 516 1,222 6 1,738
Acquisition-related deferred price consideration 40 44 3 (3) - - - - - - - - - -
Restructuring - - - - - 3,299 - 4,057 (252) 199 - - 7,356 (53)
Total net adjustments 30,316 25,862 38,808 42,255 41,936 46,581 56,847 67,560 56,842 54,067 51,643 62,628 212,925 225,180
Adjusted EBITDA 48,843 39,201 53,532 82,995 56,454 54,086 79,116 119,928 77,932 68,774 69,591 104,762 309,584 321,059
85 •
Free Cash Flow reconciliation
($ in thousands) FY2017 FY2018
CASH FROM OPERATING ACTIVITIES 245,458 260,726
Acquisition of intangible assets, property, plant and equipment (122,203) (116,984)
Change in accounts payable related to intangible assets, property, plant and equipment 13,692 (8,494)
FREE CASH FLOW 136,947 135,248
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