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ANNUAL REPORT 2011
YOC Group Overview (in kEUR)
2011
2010
Change
Change in %
33,332
30,453
2,879
9%
Germany
17, 8 82
21, 544
-3,662
-17%
Other countries
15,450
8,909
6, 541
73%
Mobile Technology segment
13,019
18,699
-5,680
-30%
Media segment
20, 313
11,755
8, 558
73%
Total
35,044
31,883
3,161
10%
EBITDA
-3,004
2,819
-5,823
< -100%
-9%
9%
k.A.
k.A.
EBITA*1
-4,960
2,062
-5,762
< -100%
Earnings after tax
-7, 8 8 1
671
-8, 552
< -100%
Earnings per share (diluted in EUR)
-4.19
0. 36
-5
< -100%
Earnings per share (basic in EUR)
-4.19
0. 39
-5
< -100%
30,603
33, 288
-2,685
-8%
36%
52%
k.A.
k.A.
1,571
5,175
-3,604
-70%
676
1, 593
-917
-58%
Average number of employees*²
214
180
34
19%
Number of employees at year end
227
187
40
21%
Total output per employee (in EUR thousand)
164
177
-13
-7%
Revenue and earnings Total revenue
EBITDA margin (in%)
Financial position and liquidity Total assets Equity ration (in %) Cash and cash equivalents Operating cash flow
Employees
*1 EBIT before amortisations due to purchase price allcations (EBIT adjusted for amortisations due to company acquisitions) *² On the basis of permanent employees
Where rounded amounts are used, differences may occur due to commercial rounding.
INDEX of contents
1 2 3 4
to our shareholders 6
Letter to Shareholders
8
The Management Board
1 0 Report of the Supervisory Board 12 Corporate Governance 18 The Share
The YOC Group 22 Company Structure 23 Operations 2 6 International Position 27 Strategy
group management report 30 Market Environment
47 Inspection and Risk Management Report on the Accounting Process
32 Scope of Service 34 Business Development 38 Development of Profit 40 Development of Net Assets and Financial Position
4 8 Information on Shares and Management Board Explanatory Report 50 Declaration on Corporate Governance 53 Remuneration Report 55 Important Events after the Balance Sheet Date
43 Forecast Report 44 Opportunities and Risk Report
consolidated financial statementS
and information concerning the Management Board and Supervisory Board
58 59 60
Consolidated Statement of Comprehensive Income
90 Statement of Responsibility made by the Management Board
Consolidated Statement of Financial Position
91 Audit Opinion 92 Management Board
Consolidated Cash flow Statement 93 Supervisory Board
61 Consolidated Statement of Changes in Equity 62 Notes to the Financial Statements
94 Financial Calendar
Our technology
platform enables us to
deliver billions
of mobile page
impressions
every month
Letter to Shareholders
8
The Management Board
3 Group Management Report
6
2 The YOC Group
To our shareholders
1 To Our Shareholders
1
10 Report of the Supervisory Board 12 Corporate Governance 18 The Share 4 Consolidated Financial Statements
YOC Group
Annual Report 2011
â&#x20AC;&#x160;Letter to Shareholders Dear Shareholders, The financial year 2011 was a challenging year for our Group in which we did not achieve the goals that were set. For this reason, we worked intensively on the further development of the YOC Group strategy and the refocusing of its market appearance in the second half of the financial year 2011. The key element of this process is the strict strategic concentration of our operations on the Mobile Technology and the Media segments. This includes pooling our competences in the Mobile Technology segment under the Sevenval brand whilst marketing the Media business under the YOC Media brand, both of which has also been reflected in the external image of the Group since the fourth quarter of 2011. Our aim is to generate growth in the Media segment and increase profitability in the Mobile Technology segment. To reflect this strategic focus, YOC Group has been reporting on the two segments Mobile Technology and Media since 1 January. However, a temporary decline in sales due to the ensuing structural reorganisation and discontinuation of side activities also has to be knowingly accepted. YOC Group generated sales totalling EUR 33.3 million in the financial year 2011 (2010: EUR 30.5 million) and an operating result amounting EUR -3 million (2010: EUR 2.8 million). This includes costs for the strategic reorientation and one-off expenses amounting to EUR 1 million. This strategic focus is particularly clear in the Mobile Technology segment. To reflect this process, we have started focussing our business operations on the implementation of larger projects with customers for whom the mobile channel is a strategic growth driver. The sales focus is on the retail, financial institutions, travel & transport and the automotive industry. At the same time, the Group has continued to boost recurring returns from licence, hosting and maintenance income. The focus of this segment is to achieve the profitability we were used to. The Mobile Technology segment reported sales revenues of EUR 13 million in the financial year 2011. This corresponds to a percentage of 39% in the total revenues of YOC Group. The percentage of the total group revenue amounted to EUR 18.7 million and 61% in the same period of the previous year. The implementation of the strategic focussing also led
to the discontinuing or active termination of activities that were no longer within the core business of the segment. In addition to this, a number of operative challenges needed to be overcome, particularly in the second and third quarter of 2011. The market launch of new products led to slower project handling and delayed sales and revenue recognition. This resulted in a strongly increased order backlog amounting to EUR 2.4 million at the end of the year. The business segment Media saw encouraging growth amounting 73% in the period under report. Due to the increase in sales revenue from EUR 11.8 million to EUR 20.3 million the percentage of total sales was already 61% in the period under report, while it amounted to 39% in the same period of the previous year. Due to the takeover of the French subsidiary MobilADdict SAS in the first quarter 2011 and the successful Media units in Germany, Spain, Austria and the United Kingdom we could strengthen our competitive position in Europe significantly. In the Media segment, the expansion into more markets and the resulting growth potential are of high strategic importance. We established a central organisational structure based on our experience to quickly and efficiently integrate newly created organisations in the respective countries and support them and the existing organisations in the development of their business activities. YOC Group thus lays the groundwork for continued participation in the positive development of the global mobile advertising market in the future.
Outlook for the financial year 2012 The strict implementation of the defined strategy focussing on the Mobile Technology and Media segments enabled us to create the basis for the sustainable further development. Therefore, we expect the financial year 2012 to see an increase in sales to about EUR 40 million and a positive operating result. These expectations are supported by general market developments relating to the rapidly increasing use of the mobile internet and the resulting need for companies to go mobile. Due to the ever more challenging demands on mobile infrastructure solutions more and more customers and partners trust on our expertise in the field of Mobile Technology. Growth in the Media segment is increasingly driven by a budget shift from traditional media channels to mobile advertising.
7 1 To Our Shareholders
We are convinced that with the strategic refocusing of YOC Group we are on the right track. The structural and operative measures that we have initiated have already begun to produce positive results.
I would be delighted to see this cooperation continue in the future. Kind regards,
I would like to seize this opportunity to thank our Supervisory Board for its great commitment and support during the past financial year. Dirk Kraus CEO of YOC AG
2 The YOC Group
On behalf of the Management Board I would also like to thank all shareholders as well as our customers and business partners for their cooperation in the financial year 2011.
3 Group Management Report 4 Consolidated Financial Statements
The Management Board YOC Group
Annual Report 2011
Jan Webering Management Board Business Unit Mobile Technology
Joachim von Bonin CFO Finances & Controlling, Human Resources, Central Purchasing
Alex Sutter Management Board Business Unit Mobile Technology
9
Patrick Feller
Dirk Kraus
Management Board Organisation, Strategy, Strategical Human Resources Develoment, Change Management
CEO M&A, Corporate Development, Business Unit Media
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
â&#x20AC;&#x160;Report from the Supervisory Board The Supervisory Board carried out the tasks and duties incumbent upon it under law, the Articles of Association and the Rules of Procedure comprehensively and diligently during the financial year 2011. It intensively dealt with the situation of the company, regularly advised the Management Board on the management of the company and continuously monitored its activities. The Supervisory Board was directly involved in all decisions of fundamental importance to the company and discussed them in detail. In fulfilling its obligations, the Supervisory Board dealt with revenues and results of operations of the company, the business performance as well as the intended corporate policy and planning by means of regular written and verbal reports of the Management Board. After scrutinising the documents submitted and discussing approval in detail, the Supervisory Board approved Management Board decisions or measures subject to Supervisory Board approval pursuant to the law or the Management Board Rules of Procedure. Alongside a wide range of technical issues and measures subject to approval as well as the business development, meetings also focussed on basic questions concerning corporate planning and an adjustment of the corporate strategy to the changing framework conditions, the continued expansion of the international business, the safeguarding of the company's competitiveness as well as personnel decisions in the financial year 2011. Short-term, medium-term and long-term issues were treated in the same way.
Material issues of the Supervisory Board activities The Supervisory Board held a total of five meetings demanding physical presence as well as two telephone conferences in the period under report; moreover, further written resolutions of the Supervisory Board were passed in writing. In doing so, the Supervisory Board engaged in a detailed consultation with the Management Board. Furthermore, the Supervisory Board as a whole was in close communication with the Management Board and was kept informed by the latter about the current business development and all important business transactions. The Supervisory Board also took advantage of the option to discuss issues without the presence of the Management Board. All Supervisory Board members participated in the meetings and other resolutions in 2011; no Supervisory Board committees were established. There were no indications for potential conflicts of interest among the Supervisory Board members in the financial year 2011.
The Supervisory Board paid special attention to the acquisition of MobilADdict SAS in March 2011 as well as the strategic focusing of the company on the business units Mobile Technology and Media. The supervisory body also advised the Management Board on these matters between Supervisory Board meetings. At its meeting on 5 April 2011, the Management Board presented the results for the financial year 2010 and current developments in the first quarter of 2011 to the Supervisory Board and discussed them with the Supervisory Board. The Supervisory Board discussed the issues of the ordinary General Meeting 2011 on 20 April 2011. The agenda was discussed with the Management Board and approved in the following. At its meeting on 31 May 2011, the Supervisory Board primarily dealt with the business performance and the results of the first quarter. Moreover, it decided on the appointment of Mr. Joachim von Bonin as Chief Financial Officer of the company. At its meeting on 23 August 2011, the Supervisory Board also discussed the results of the first half-year presented by the Management Board and was informed about the current development of the company. On 9 November 2011, the Management Board explained the performance in the third quarter to the Supervisory Board and presented the medium-term strategy focussing on the two business segments Mobile Technology and Media as well as the ensuing discontinuation of side activities and the measure implementation status so far. At its meeting of 6 December 2011, the Supervisory Board again dealt with the results of the strategy process as well as its implementation and the group economic planning of YOC Group for the year 2012, which was subsequently approved by the Supervisory Board. Moreover, the annual Declaration of Conformity in accordance with Sect. 161 Stock Corporation Act (AktG) presented and approved by common agreement by the Management Board of YOC AG was unanimously adopted following detailed examination and discussion.
Audit of the annual and consolidated financial statements At its meeting of 5 April 2011, the Supervisory Board discussed the annual financial statements and the consolidated financial statements of YOC AG as of 31 December 2010 as well as the
11 1 To Our Shareholders
Court Charlottenburg of 14 June 2011, Patrick Feller was initially appointed to replace him until the end of the next ordinary General Meeting. The Supervisory Board approved an organisational and personnel modification by means of expanding the Management Board and subsequently appointed two new Management Board members. Within this scope, the areas of responsibility of the Management Board members were reallocated so that the Management Board can run the operational business even more efficiently and safeguard the implementation of the strategic focussing on the core segments. The Supervisory Board appointed Mr. Joachim von Bonin to the Management Board of the company as of 1 June 2011. Mr. von Bonin accepted the appointment as Chief Financial Officer.
2 The YOC Group
summarised Management Report for YOC AG and the Group in depth. The annual and consolidated financial statements of YOC AG as of 31 December 2010 as well as the summarised Management Report were audited and given an unqualified audit opinion by Ernst & Young GmbH WirtschaftsprĂźfungsgesellschaft, Stuttgart, branch office Berlin, the auditor appointed by the General Meeting on 16 June 2010 and commissioned by the Supervisory Board. The Supervisory Board received the respective documents and discussed them in depth in the presence of the auditor, who reported about his audit findings. The Supervisory Board acknowledged the report of the auditor and approved the findings of the audit. As its own examination did not lead to any objections, the Supervisory Board approved the financial statements prepared by the Management Board. Thus, the annual financial statements of YOC AG were adopted.
Corporate governance
Mr. Michael Schwetje left the Supervisory Board at the end of the General Meeting on 6 June 2011. By resolution of the Local
Thanks to the members of the Management Board and all YOC AG staff The Supervisory Board would like to thank the Management Board and all staff of YOC AG and all other companies in the group for their great commitment and the work accomplished over the past financial year.
Berlin, April 2012 The Supervisory Board
Gerd Schmitz-Morkramer Chairman
4 Consolidated Financial Statements
Personnel changes in the Management Board and Supervisory Board
Mr. Patrick Feller was appointed from the Supervisory Board to the Management Board of the company as of 9 September 2011. By resolution of the Local Court Charlottenburg of 6 September 2011, Mr. Oliver Borrmann was appointed to replace him in the Supervisory Board until the end of the next General Meeting. The Supervisory Board appointed Mr. Borrmann as independent financial expert within the meaning of Sect. 100 Para. 5 Stock Corporation Act (AktG) having expertise in the field of accounting or auditing.
3 Group Management Report
The Supervisory Board also studied the recommendations of the German Corporate Governance Code in the financial year 2011. In this context, the Supervisory Board also reviewed whether the Management Board remuneration was adequate and customary. The horizontal and vertical customariness were reviewed, which means that the remuneration was compared with other companies from similar sectors and sizes on the one hand and in relation to the remuneration of lower-ranking hierarchy levels within the company on the other hand. Furthermore, the Supervisory Board discussed the efficiency of its activities as well as the contents of the Declaration on Corporate Governance, including the Declaration of Conformity with regard to the German Corporate Governance Code in accordance with Sect. 161 Stock Corporation Act (AktG). The Management Board and the Supervisory Board delivered their joint Declaration of Conformity in December 2011. The company largely complies with the recommendations of the German Corporate Governance Code. As part of the Declaration on Corporate Governance, the Declaration of Conformity together with explanations of deviations from the recommendations can be found on pages 50-53 of the Annual Report and was made permanently accessible on the companyâ&#x20AC;&#x2122;s website. Further information about corporate governance at YOC AG can be obtained from the Corporate Governance Report published on page 12-17 of the Annual Report.
YOC Group
Annual Report 2011
C â&#x20AC;&#x160; orporate Governance YOC AG attaches great importance to corporate governance: It stands for the responsible and long-term value-driven management and control of our company. Efficient cooperation between the Management Board and the Supervisory Board, respect for the interests of the shareholders as well as open and transparent corporate communications are key aspects of good and responsible company management and corporate governance. The Management Board and Supervisory Board report as follows on corporate governance at YOC AG:
a Management Board and a Supervisory Board. There is a strict personnel separation of management (Management Board) and corporate control (Supervisory Board) within this two-tier management system. It is not legally possible to simultaneously sit on both the Management Board and the Supervisory Board. Each of these two bodies has its own duties and responsibilities which are clearly defined by law. The Management Board is responsible for the management of the company while the Supervisory Board advises and monitors the Management Board.
2.1 Management Board YOC AG complies with the recommendations of the "Government Commission of the German Corporate Governance Code" (hereinafter also referred to as "Code" or "DCGK") in the version of 26 May 2010 with the exception of Sect. 2.3.2, 3.8 Para. 3, 4.1.5, 4.2.3 Para. 2 and Para. 5, 5.1.2 Para. 1 and 5.4.1 Para. 2 and Para. 3, 5.1.2 Para. 2 Sent. 3, 5.3.1, 5.3.2 and 5.3.3, 5.4.1 Para. 2 Sent. 1, 5.4.3 Sent. 3, 5.4.6 Para. 1 Sent. 3, 5.4.6 Para. 2 and 7.1.2 Sent. 4. The Management Board and the Supervisory Board of YOC AG have adopted the declaration on the Corporate Governance Code (Declaration of Conformity 2011) attached to the end of this report. It has been published on the website of YOC AG at www.yoc.com (Investor Relations section).
The Management Board consisted of five members as of 31 December 2011: More information on the members of the Management Board and their areas of responsibility can be found on the pages 8 and 9 of this Annual Report. Furthermore, information about functions and CVs is available online at http://group.yoc.com/Executive-Board.
1. Shareholders and General Meeting
The Management Board works in close cooperation with the Supervisory Board, informing the latter regularly, promptly and in detail of all issues relevant for the entire company concerning strategy, strategy implementation, planning, business development, financial position and results of operations, compliance and corporate risks.
YOC AG reports to its shareholders four times in the financial year on business developments and the net assets, financial position and results of operations of the consolidated companies. Matters upon which the General Meeting decides include the appropriation of profit, discharge of the Management Board and the Supervisory Board as well as the election of the auditor. Amendments to the Articles of Association and corporate actions are resolved upon by the General Meeting alone and implemented by the Management Board. Shareholders may submit counter-motions to resolutions proposed by the Management Board or the Supervisory Board and challenge resolutions of the General Meeting.
The Management Board has sole responsibility for the management of the company and exercises control over the consolidated companies. It has a duty to act in the interests of the company and is committed to increasing the sustainable company value. It is responsible for defining the company's strategic direction in consultation with the Supervisory Board.
The Management Board is responsible for drawing up the quarterly reports, half-year and annual financial statements of YOC AG as well as the consolidated financial statement. It ensures compliance with statutory provisions and appropriate risk management within the company.
2.2 Supervisory Board The Management Board makes use of electronic communication channels, in particular the internet, to facilitate shareholder access to information on the General Meeting and allow shareholders to vote in absentia, for example by appointing a proxy.
2. Management and control structure As required by the German stock corporation law, YOC AG has a two-tier management and control structure comprising
In accordance with Sections 101 et seq. AktG [German Stock Corporation Act] in conjunction with Section 10 of the Articles of Association, the Supervisory Board of YOC AG comprises three members elected by the General Meeting for one term of office ending with the conclusion of the General Meeting that resolves on the discharge for the fourth financial year following their election, not including the financial year in which the term of office commences. More information on the mem-
13 1 To Our Shareholders
bers of the Supervisory Board can be found on page 93 of this Annual Report. Furthermore, their CVs are available online at http://group.yoc.com/Supervisory-Board.
3. Remuneration Report The Remuneration Report is based on the recommendations in the German Corporate Governance Code. It sets out principles which are applied in setting the remuneration of the Management Board of YOC AG and explains the amount and structure of these payments. It also describes the principles applied to and the amount of Supervisory Board remuneration. The Remuneration Report also contains details which German commercial law requires to be part of the notes to the consolidated financial statement pursuant to Sect. 314 German Commercial Code (HGB) as well as the group management report pursuant to Sect. 315 German Commercial Code (HGB).
• The basic remuneration is a fixed cash remuneration referring to the entire year based on the area of responsibility of the respective Management Board member and paid out in twelve monthly instalments. • The variable component consists of a cash remuneration as profit-sharing based on the results of operations according to IFRS (EBITDA) of YOC AG and is subject to an upper limit. • With the participation in the YOC Management Incentive Programme initiated in 2009, the members of the Management Board - and other employees of the company - receive subscription rights to shares in YOC AG. The subscription rights granted in this respect are subject to a holding period of several years. The exercise of subscription rights requires an own investment of the subscription right owners at an exercise price derived from the stock market price of the YOC share at the time of issuance of the respective subscription rights (market value) (also see Section 6 below). The participation of the Management Board in the YOC Management Incentive Programme is intended to reward the contribution of the Management Board to increase the shareholder value and to promote the long-term success of the company. This element of remuneration and the long-term incentive it offers create a useful link between the interests of the management and those of the shareholders.
3 Group Management Report
The members of the Supervisory Board make their decisions independently and are not bound by the demands or instructions of third parties. Furthermore, consultancy, service and other agreements between YOC AG and its subsidiaries on the one hand and members of the Supervisory Board on the other hand must be approved by the Supervisory Board.
In the financial year 2011, it consisted of a fixed basic component, a variable component and the participation in the YOC Management Incentive Programme. 2 The YOC Group
The Supervisory Board monitors and advises the Management Board with regard to the management of the business. The Supervisory Board discusses the business development and planning as well as the strategy and its implementation with the Management Board at regular intervals. The Supervisory Board approves the annual financial statement and takes note of and approves the consolidated financial statement following discussion with the auditor and own examination. Moreover, it appoints the members of the Management Board. Fundamental decisions affecting YOC AG require Supervisory Board approval. These include decisions or measures that would significantly change the net assets, financial position or results of operations of the company. The information and reporting obligations of the Management Board were defined by the Supervisory Board.
Management Board remuneration is performance-related. Remuneration is determined in such a way that it remains at a level competitive within the market for highly qualified management personnel and offers a performance incentive.
Management Board remuneration in 2011
Name
Fixed (in kEUR)
Variable (in kEUR)
Subscription rights (in numbers)
170
0
0
Alex Sutter
160
0
0
The Supervisory Board is responsible for setting the Management Board remuneration. Its decision takes account of the size and activities of the company, the company's economic and financial position, the tasks of the respective Management Board member as well as the amount and structure of management board remuneration at other companies in the sector.
Jan Webering
150
0
0
Joachim von Bonin (ab 01. Juni 2011)
93
0
16,625
Patrick Feller (ab 09. September 2011)
47
0
0
620
0
16,625
Total
4 Consolidated Financial Statements
Dirk Kraus
3.1 Management Board remuneration
YOC Group
Annual Report 2011
Remuneration received by the Management Board in 2011 totalled kEUR 620. The Management Board held a total of 16,625 subscription rights in the financial year 2011. The fair value of the subscription rights amounted to around kEUR 170 as of the balance sheet date. As a contractual fringe benefit, Mr. Jan Webering has the right to a company car.
3.2 Supervisory Board remuneration Supervisory Board remuneration was set by the General Meeting of YOC AG on the basis of a proposal by the Management Board and Supervisory Board.
shall make every effort to comply with the recommendation pursuant to Sect. 7.1.2 Sent. 4 of the German Corporate Governance Code, but cannot guarantee compliance for 2012. It was agreed with the auditor, Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft, Stuttgart, Berlin branch, that the chairman of the Supervisory Board would immediately be informed of any reasons precluding the employment of the auditor and any conflicts of interest arising during the audit and that the auditor would immediately report on all issues and events significant for the tasks of the Supervisory Board revealed during the conduct of the audit.
5. Transparency Supervisory Board remuneration is fixed. The fixed remuneration amounts to kEUR 7.5 for one financial year. The chairman of the Supervisory Board receives 2.5 times and the deputy chair 1.5 times this fixed amount. Supervisory Board remuneration in 2011 Name
Fixed (in kEUR)
Gerd Schmitz–Morkramer
18.75
Peter Zühlsdorff
11.25
Michael Schwetje
3.23
Patrick Feller
1. 8 6
Oliver Borrmann Total
2 . 41 37.50
There was no remuneration of personally rendered services outside the board activities, particularly with regard to any consulting and referral services. The remuneration is paid out following the ordinary General Meeting at which the approved consolidated financial statement for the last financial year is presented.
All participants of the capital market are provided with information by YOC AG on a uniform, comprehensive, prompt and simultaneous basis. Reporting on the business situation and results of YOC AG and YOC Group takes place through the annual report, the half-year report and the interim reports. Furthermore, information is passed on through ad-hoc communications, where legally necessary, and through the company's websites. Changes in the make-up of the shareholder structure which have to be reported in accordance with Sect. 26 Securities Trading Act (WpHG) as well as the purchase and sale of shares of individuals who hold management positions within YOC AG (Directors’ Dealings according to Sect. 15a Securities Trading Act (WpHG)) are also published by the Management Board. The tables below list all holdings of the Management Board and the Supervisory Board in YOC AG which directly or indirectly exceed 1% of shares issued by the company: Management Board holdings as of 31 December 2011 Name
Supervisory Board remuneration for the financial year 2011 totalled kEUR 37.5.
4. Accounting and auditing The consolidated financial statements and interim reports are drawn up in accordance with the IFRS. The consolidated financial statements are drawn up by the Management Board and reviewed by the auditor and the Supervisory Board. The consolidated financial statements for the financial year 2011 were not completed by the deadline for public disclosure of 90 days after the end of the financial year as defined in Sect. 7.1.2 Sent. 4 of the German Corporate Governance Code. The company
Dirk Kraus
Number of shares 447,450
Alex Sutter
54,925
Jan Webering
14,250
Supervisory Board holdings as of 31 December 2011 Name
Number of shares
Peter Zühlsdorff
248,560
Michael Schwetje
218,560
6. Further information about the YOC AG share option programme 2009 saw the launch of the YOC Management Incentive
15 1 To Our Shareholders
The subscription rights may only be acquired during precisely specified acquisition periods. The first acquisition period in the year is based on the timing of the company's annual press conference on financial results and lasts ten stock trading days. The second acquisition period in the year is based on the publication of the first half-year report for the financial year and also lasts ten stock trading days. The final acquisition period for subscription rights will be in the year 2012.
7. Declaration of the Management Board and the Supervisory Board of YOC AG in accordance with Sect. 161 Stock Corporation Act (AktG) on the German Corporate Governance Code in the version of 26 May 2010 (Declaration of Conformity 2011) Pursuant to Sect. 161 Stock Corporation Act (AktG), the
The Management Board and the Supervisory Board of YOC AG declare that the recommendations made by the "Government Commission of the German Corporate Governance Code" are and were principally complied with in the past. The Management Board and the Supervisory Board of YOC AG also intend to remain compliant in the future. Only the following recommendations of the German Corporate Governance Code were and are not applied: • Sect. 2.3.2 of the Code: The company regards the announcement of the invitation to attend the General Meeting in the electronic Federal Gazette as sufficient. • Sect. 3.8 Para. 3 of the Code: The company believes that the motivation and responsibility with which the members of the Management Board and Supervisory Board carry out their duties will not be improved by an excess. The D&O liability insurance serves to safeguard against the company's material own risks and at most serves as a second-line defence of the assets of the members of those bodies. Therefore, the D&O insurance for the Supervisory Board was concluded without excess. • Sect. 4.1.5 of the Code: When filling their managerial posi-
4 Consolidated Financial Statements
The subscription rights may only be exercised during the precisely specified exercise periods. Exercise periods are also based on the timing of the company press conference on the annual result and the publication of the report on the first half of the year. Each exercise period comprises 17 stock trading days. All holders of subscription rights must comply with the provisions of insider trading laws.
The German Corporate Governance Code (DCGK) contains regulations with different binding effects. Aside representations of the applicable corporation law, it contains recommendations from which companies may deviate; however, in this case they are obliged to disclose their deviations annually. In accordance with Sect. 161 Stock Corporation Act (AktG), deviations from the recommendations of the DCGK shall also be justified. Furthermore, the DCGK contains suggestions from which companies may deviate without disclosure. The following declaration concerns the period of time since the last Declaration of Conformity of December 2010 and refers to the requirements of the DCGK in its current version of 26 May 2010.
3 Group Management Report
The subscription rights may be exercised by the holders no earlier than three years from the respective issue date. The exercise price of the subscription rights is based on the average Xetra closing price of the YOC share for the last eight stock trading days before the beginning of the acquisition period. However, the exercise price must be at least equal to the closing price of the YOC share on the day on which the subscription rights were issued. The prerequisites for the exercise of subscription rights include the holder's ongoing employment with the company at the time of exercise and the fulfilment of certain performance targets. The performance targets include an increase in the YOC share price.
Management Board and the Supervisory Board of a listed stock company shall annually declare that the recommendations made by the "Government Commission of the German Corporate Governance Code" in the official part of the electronic Federal Gazette published by the Federal Ministry of Justice were or are complied with or which recommendations were or are not applied including the respective reasons. The declaration is to be made publicly available on the website of the company.
2 The YOC Group
Programme with a total of 175,000 subscription rights. One subscription right entitles the holder to acquire one share in YOC AG. The subscription rights for the acquisition of YOC shares can be granted to members of the Management Board (up to 115,500 subscription rights) and to employees (up to 59,500 subscription rights). The YOC Management Incentive Programme runs until 31 December 2012. As of 31 December 2011, subscription rights for the acquisition of 114,590 shares had been granted to members of the Management Board and subscription rights for the acquisition of 51,000 shares to employees.
YOC Group
Annual Report 2011
tions within the company, the Management Board is to consider company-specific realities as well as an appropriate level of diversity. In our opinion, however, the guidelines of the DCGK inappropriately restrict the Management Board in its selection of suitable candidates for managerial positions which need to be filled. • Sect. 4.2.3 Para. 2 Sent. 2 of the Code: The remuneration structure of the Management Board members focuses on sustainable corporate development. In case of a temporary appointment of a Management Board member for a period of less than one year, however, the granting of variable remuneration components was renounced as these did not appear reasonable in the same way as a multi-annual assessment basis in this individual case. • Sect. 4.2.3 Para. 5 of the Code: In deviation from the recommendation of the Corporate Governance Code, payments in the event of a change of control are not generally limited to 150% of the severance cap. Such a limit could affect the ability to attract highly qualified employees. According to the Management Board remuneration structure, a change of control case could also have the effect of increasing the YOC share price when Management Board members participate in the share option programme of the company. In addition to the beneficiaries of the share option programme, however, the shareholders also profit from the rise in the share price, so that the interests of the Management Board and the shareholders coincide in this respect. • Sect. 5.1.2 Para. 1 as well as Sect. 5.4.1 Para. 2 and Para. 3 of the Code: A guideline for the structure of the Management Board as stipulated in Sect. 5.1.2 Para 1 of the Code inappropriately restricts the Supervisory Board in its election of suitable members of the Management Board. The same applies to an objective for the composition structure of the Supervisory Board as stated in Sect. 5.4.1 Para. 2 and 3 of the Code. We are fundamentally of the opinion that this constitutes a too extensive limitation in the selection of suitable candidates for the Supervisory Board on an individual case basis. Moreover, such an objective also compromises the right of our shareholders to elect the members of the Supervisory Board. • Sect. 5.1.2 Para. 2 Sent. 3 of the Code: The Supervisory Board has not set an age limit for members of the
Management Board. The members of the Supervisory Board believe that suitability for a company management position depends first and foremost on individual ability and performance. • Sect. 5.3.1, 5.3.2 and 5.3.3 of the Code: As the Supervisory Board of YOC AG has only three members, it would not be practical to set up committees, and especially not an audit committee or a nomination committee. The purpose of the audit committee as proposed by the Code is to increase the efficiency of auditing. This aim would not be achieved at YOC AG as nearly all members of the plenum would have to sit on the audit committee. Similarly, nearly all plenum members would sit on the nomination committee, which would not bring any improvement in the preparation of Supervisory Board recommendations regarding candidates proposed by the shareholders. • Sect. 5.4.1 Para. 2 Sent. 1 of the Code: No age limit has been set for Supervisory Board members. A candidate's ability to monitor and act as a fit contact for the Management Board depends first and foremost on individual capabilities. • Sect. 5.4.3 Sent. 3 of the Code: The recommendation that proposed candidates for the chairmanship of the Supervisory Board be announced to the shareholders has not been adopted. Pursuant to Sect. 11 Para. 1 of the company's Articles of Association, the Supervisory Board elects its chair from amongst its members. According to the Supervisory Board's Rules of Procedure, the selection of a chairperson takes place during the first meeting after the election of the Supervisory Board without having to specially call for a meeting. With that said, the announcement of proposed candidates is not practical. • Sect. 5.4.6 Para. 1 Sent. 3 of the Code: The company meets the recommendations of the Code regarding the remuneration of the chair and deputy chair of the Supervisory Board with the exception of the provisions on committees; chairmanship and membership of committees is not considered separately for lack of formed committees. • Sect. 5.4.6 Para. 2 of the Code: The remuneration of the Supervisory Board consists of a fixed payment. Any variable remuneration to be granted beyond this is unnecessary for a motivation of the Supervisory Board and would not lead to any additional incentive or motivational boost.
17 1 To Our Shareholders
â&#x20AC;˘ Sect. 7.1.2 Sent. 4 of the Code: The company will endeavour to comply with the recommendation that the consolidated financial statements are to be made available to the public within 90 days of the end of the financial year and the interim reports within 45 days of the end of the reporting period, but cannot guarantee this due to the large scope of consolidation.
YOC AG The Management Board The Supervisory Board
2 The YOC Group
Berlin, December 2011
3 Group Management Report 4 Consolidated Financial Statements
YOC Group
Annual Report 2011
â&#x20AC;&#x160;The Share The development of the YOC share in 2011 The YOC share price performed well in the first quarter of 2011. At the beginning of the year, the share price was EUR 34.00 and reached its peak price for the quarter amounting to EUR 41.90 (9 February 2011) only a few days after in February 2011. However, the European debt and banking crisis increasingly intensified in the months to come and the global economy slowed down dramatically. These influences dominated the performance of the stock markets in a clearly negative way. Thus, the euro crisis in connection with the tense financial situation of some European states made the leading German share index DAX drop by 27% from 7,300 to 5,300 points in
1.07% Management
the worst of times. The share of YOC AG was also caught up in this development alongside other technology stocks and dropped to EUR 20.50 on 9 August 2011. Influenced by the weak sales results, especially in the third and fourth quarter, the share price of YOC AG fell and reached its low amounting to EUR 14.00 on 12 December 2011. At the end of the year, the share was listed at a price of EUR 15.15 on 31 December 2011. For us the development of the YOC Share is disappointing.
20.19% Management Board
DIH Deutsche 12.98% Industrie Holding GmbH 4.67% IP Concept Fund Management S.A. 6.78% dkam GmbH 27.07% Free Float 6.27% Ruffer Investments LLP 11.41% Schwetje Invest GmbH
9.35% Fidelity Investments
0.21% YOC AG (treasury stock)
Shareholder structure as of 31 December 2011
Analysts show growing interest in YOC The YOC share has become more attractive - particularly to international investors - with our strategic focus on the business segments Mobile Technology and Media. This enables us to create a starting point for further growth and an increased profitability of the business segments. In the same way, the capital market benefits from this reporting structure
and the ensuing optimised as well as more transparent communication. As Deutsche Bank in 2009 and Close Brothers Seydler Bank in 2010, WestLB included the coverage with a recommendation to buy in July 2011 and has since regularly published studies as well as comments on the current development of the company.
19 1 To Our Shareholders
Consistent and transparent investor relations
Aside regular quarterly, half-year and annual reporting, we also inform our shareholders in telephone and analyst conferences. YOC AG was presented at the German Equity Forum in Frankfurt on Main on 21 November 2011. This event as well as the participation in other investor conferences was also reflected in the constantly increasing interest in the YOC share as well as the market for Mobile Technology and Media in the financial year 2011. That is why the company will as
usual be holding regular telephone conferences and attending conferences and road shows to talk to analysts and investors about the company’s development, key indicators and strategic objectives. We are always pleased to provide information to institutional investors, analysts as well as private investors - at our general meeting, in individual discussions, via telephone or e-mail. Further information on how to reach us can be obtained from the “Investor Relations” section at www.yoc.com. There, you can also find our Financial Calendar containing important Investor Relations dates and publications about the business development for download.
2 The YOC Group
The intensive dialogue with the capital market is traditionally of particular value to YOC AG. It is the claim of the company to inform shareholders and all participants of the capital market about the current status of the corporate development, structural changes and strategic decisions transparently, promptly and in detail. Therefore, YOC AG sees transparent financial market communication as a key factor in sustainably increasing shareholder value.
125%
3 Group Management Report
100%
75%
50%
03.01.11
31.03.11
30.06.11
30.09.11
31.12.11
YOC AG
TecDAX Performance Index
03.01.2011
34.00 EUR*1
851.43 Points
YOC AG -55.44%
31.12.2011
15.15 EUR*1
685.06 Points
TecDAX -19.54%
Change
-55.44%
-19.54%
YOC share and TecDAX Performance Index developments
*1 XETRA closing price
2011
2010
Change
Annual closing price
34.00
15.15
-55.44%
Maximum price
43.00
41.44
-3.62%
Minimum price
12.82
14.00
9.16%
Information on the listing Stock type Trading place Stock exchange segment
Market capitalisation
65.11
29.02
-55.43%
Daily trading volume (average)
Security identification number
4.471
2.037
-54.44%
ISIN
Domestic stock Xetra Prime Standard 593273 DE0005932735
4 Consolidated Financial Statements
Information about the share [in EUR]
We operate several
hundredmobile
portals
andapplications
over our Sevenval
FITApplication
Server
2 The YOC Group
The yoc group
3 Group Management Report
22 Company Structure
1 To Our Shareholders
2
23 Operations 2 6 International Position
27 Strategy
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
Company Structure
YOC Group Business Unit MOBILE TECHNOLOGY
Business Unit YOC MEDIA
MOBILE ADVERTISING A YOC Group Company
YOC MEDIA NETWORK
The YOC AG business units Mobile Technology and Media
YOC PERFORMANCE NETWORK
A YO C G ROUP COMPA N Y
23 1 To Our Shareholders
O perations browsers. Our customers can choose between licensing their software products and having an in-house installation of either the FIT Server or the fitml.com cloud version. Sevenval operates more than hundred mobile sites worldwide based on its FIT Technology. It is the first software provider to offer the possibility to programme and operate individual mobile sites for free at www.fitml.com.
2 The YOC Group
YOC is the global provider of mobile technology and media. In its Mobile Technology division, YOC licenses and implements software products for the development of cutting-edge technological infrastructure like mobile internet sites, web apps, mobile commerce, secure mobile banking, mobile CRM platforms and integrated, high end mobile marketing campaigns. The Media segment (Mobile Advertising and Affiliate Marketing) includes the marketing of media bundles and advanced rich media advertising formats for highly targeted and efficient mobile advertising. Several of the world’s top brands (e.g. The Coca-Cola Company, Mercedes-Benz, Motorola, Waitrose, Ford and Swiss Airlines) trust on YOC’s products, the company’s technological expertise and innovative power.
Mobile Technology YOC’s product portfolio is based on in-house developed technologies which are connected on one single, innovative and high-performance platform and offer great flexibility, performance, reliability and scalability. Roadmaps are used to continually develop these enabling technologies so that YOC will always be in the position to globally provide cutting-edge mobile technology products and platforms.
This approach helps YOC Group to exactly meet the needs of the customers since nowadays advertisers, publishers, retailers etc. need to constantly adjust to the rapid development of new devices. This means that advertising formats and mobile portals need to be provided for all operating systems if possible, such as Apple’s iOS, Google’s Android and Microsoft’s Windows Phone 7.
The technological base for the Mobile Technology segment is the FIT Technology developed by YOC subsidiary Sevenval. This leading global technology enables the automatic creation and optimised conversion of existing online content for all internet-enabled devices. The FIT Technology can adjust websites to the properties of devices, operating systems and
4 Consolidated Financial Statements
Mobile Branding for Mercedes–Benz
Numerous international customers have already started to use the YOC’s software solutions to meet the high demands of the consumers. This platform enables the automatic creation and optimised conversion of existing online content for all internet-enabled devices. For example, it is used by YOC’s customers Jigsaw and Baur to allow customers to buy clothes and furniture via their smartphones. Coca-Cola uses YOC’s mobile technology products to operate its mobile CRM system in various countries. YOC’s mobile technology products allow customers of Swiss International Air Lines, Austrian Airlines and airberlin to use mobile flight booking and check-in.
3 Group Management Report
Mobile Travelling for Swiss Airlines
YOC Group
Annual Report 2011
Media The Media segment is built upon two pillars: Mobile Advertising and – under the belboon brand – Affiliate Marketing.
Mobile Advertising
formats, video ad formats to monetise video content and interactive rich media advertising formats, which proactively involve users and thus contribute to positive brand building. The campaigns are mainly operated on a fixed Cost per Mille (CPM) basis.
In the Mobile Advertising segment YOC markets mobile websites and applications, generating advertising revenue for publishers. YOC operates two specialised networks: the YOC Media Network and the YOC Performance Network.
Expandable Ad for Peugeot
Flip Ad for Germanwings
The YOC Media Network offered by YOC is a premium advertising network that is specialised in brand-building advertising with Europe’s uppermost media penetration in Germany, Austria, France, Spain and Great Britain. The YOC Media Network provides advertisers aiming for brand image, awareness and commitment with highly innovative rich media advertising formats, cutting-edge targeting methods and detailed reporting tools. Against this background we are always striving to meet the individual targets of our customers. This network offers a range of exclusive premium publishers such as The Telegraph, EuroSport, krone.at, NRJ, ELLE and MTV to place campaigns in ideal environments and reach the focused target groups. Alongside the MMA standard publicity banners, YOC Media is continuously developing new mobile advertising products to offer maximum technological know-how to its customers. With its YOC Media Network, YOC offers classic banner
One of YOC’s proprietary advertising products in the YOC Media Network is YOC Ad Plus. Launched in September 2010, YOC Ad Plus is Europe’s first rich media format for applications. The mobile advertising format integrates videos, picture galleries and 360° views. Another asset of YOC Ad Plus is its implementation into the mobile browser and all operating systems. YOC Ad Plus gives advertisers new possibilities to bolster their brand image and target effectively. The YOC Performance Network is an ad network that is well-positioned internationally. It enables advertisers to generate leads and increase their sales via the mobile channel. This network provides its customers with ultra high reach in the core markets Germany, Austria, France, Spain and Great Britain. The YOC Performance Network specialises in performance-related CPC pricing models but has also started to offer pay per download price models very recently, thus guaranteeing optimum reach for all campaigns.
25 1 To Our Shareholders
The YOC Performance Network is offered as a full-service or self-service version. Its platform can be used to book individual campaigns and optimise them. In addition to the MMA standard publicity banners, the YOC Performance Network also gives its customers the possibility of running rich media campaigns.
belboon-adbutler GmbH and its affiliate marketing network belboon represent the Affiliate Marketing segment within YOC Group. The company is one of the three leading performance marketing networks in the German-speaking world. It offers a portfolio of more than 1,300 partner programmes and 65,000 active publishers from 30 countries. It includes online and mobile marketing, which is operated on a performance-based pricing model. Publishers and advertisers can thus benefit from significant synergy effects due to a purely performance-based pricing model and enormous network reach. The Affiliate Marketing network acts as an interface and a market place for two customer groups: publishers and advertisers. belboon links the online advertising of advertisers to the advertising space of publishers. Advertising via the Affiliate Network is operated on the basis of performance-related commissions. Advertising customers only have to pay if sale or address generation was successful.
4 Consolidated Financial Statements
In addition to branding and sales advertising, YOC also offers mobile affiliate marketing through its subsidiary belboon. This performance marketing network offers publishers success-related marketing based on “cost per performance”, “cost per click”, and “cost per order” models.
3 Group Management Report
The service portfolio of the Affiliate Marketing Network offers various individual marketing tools attuned to the needs of the customer. This includes re-targeting, performance display advertising, SEO/SEM, social media marketing, affiliate marketing, mobile affiliate marketing and e-mail marketing.
Mobile Banner for Deutsche Bahn
2 The YOC Group
Both networks ensure optimised conversion of content for all devices and offer various options for addressing the focused target group. Targeting is offered by both networks using different parameters such as device (manufacturer/ model), screen, operating system, special key words, IP address, connection type (WiFi vs. 3G), geotargeting (based on regions/cities) and – together with anonymised customer data of a mobile operator – socio-demographic data. The YOC Media Network and the YOC Performance Network also offer technical services such as accounting and planning, the monitoring and optimisation of ongoing campaigns (“on-flight optimisation”) and the creation of campaignspecific landing pages.
Affiliate Marketing
YOC Group
Annual Report 2011
I nternational Positioning Cologne London
Paris
Berlin
Vienna
Madrid
International position of YOC Group YOC Group has a unique position on the European market. This is thanks to the company’s strong presence on Europe’s core markets, its broad range of products in the business segments Mobile Technology and Media as well as its many years of market expertise. It has offices in Berlin (head office) and Cologne, and four branch offices outside Germany in the United Kingdom (London), Spain (Madrid), Austria (Vienna) and France (Paris). The YOC Group’s business abroad is conducted by the whollyowned subsidiaries YOC Ltd., YOC Mobile Advertising Ltd. (London), YOC Central Eastern Europe GmbH (Vienna) as well as YOC Spain S.L. (Madrid). In France, the company operates through its subsidiary MobilADdict SAS, which it acquired in the financial year 2011. YOC Group employed 232 permanent staff as of 31 December 2011, of whom 47 worked outside Germany. This figure is equal to 21% of the total number of staff employed during the 2011 financial year compared to 15% in 2010. YOC Group offers its range of products in the business segments Mobile Technology and Media in Germany, Austria, the United Kingdom, Spain and France. The percentage of revenue generated outside the domestic market (Germany) rose to 46% in the financial year 2011 (2010: 29%). The company is the leading provider on the Mobile Technology and Media market, and its strong international position means it is well-equipped to meet the customers’ growing demand for international and cross-border mobile services.
With a portfolio of over 300 international publishers, YOC has Europe’s largest premium media network in the Media business segment. Moreover, a service range covering all mobile marketing models for mobile websites and applications - ranging from premium and media reach-based to performancebased payment options - distinguishes YOC Group from its international competitors. The underlying technology platform for mobile media reach and performance marketing has a global focus and currently delivers around 5billion mobile AdImpressions per month with its AdNetworks. The YOC subsidiary belboon-adbutler GmbH operates the Affiliate Marketing business of YOC Group. The company focused on the stronger expansion of international business beyond Germany, Austria and Switzerland to English and French-speaking countries in this product segment in the financial year 2011. The product development and technological platform of YOC Group are operated and developed from the offices in Cologne and Berlin only. The international subsidiaries of YOC Group use the technology provided by the two German offices. In 2012, YOC Group will also continue to strengthen its international position and further increase sales generated abroad as well as their percentages in the total revenue of the company. Moreover, the company strives for an expansion of business operations in new markets in the medium term. The company remains open to attractive international acquisition options.
27 1 To Our Shareholders
Strategy Focussing
Mobile Technology This strategic focus is particularly clear in the Mobile Technology segment. In addition to the discontinuation of side activities such as the text messaging business and the mobile B2C business, YOCâ&#x20AC;&#x2DC;s competences in the Mobile Technology segment have been reflected in its external image and pooled under the Sevenval brand since the fourth quarter.
To reflect this strategic approach, we started focussing our business operations on the implementation of larger projects
Media In the Media segment, YOC Group uses the YOC Media Network and the YOC Performance Network to market mobile internet portals and mobile applications. During the past financial years, YOC Group has successfully established itself as a leading provider for mobile advertising in Germany, Austria, Switzerland, France, Spain and Great Britain. YOC Group uses the extremely high media reach of its premium and performance networks and the development of the latest mobile advertising formats to promote developments in the mobile advertising market. With the market launch of innovative advertising formats such as YOC Ad Plus, YOC shows its longstanding technological expertise and sets new international standards. In the Media segment, the standardised expansion into other markets and the resulting growth potential are of high strategic importance. YOC Group established a central organisational structure for marketing, product and technology management, finances and personnel to quickly and efficiently integrate new company structures and to support the existing and newly created organisations to develop their business activities. YOC Group thus lays the groundwork for continued participation in the positive development of the global mobile advertising market in the future. With the strategic focussing on the two segments Mobile Technology and Media as well as the continuous development of standardised products in the past financial year, YOC Group laid the groundwork for sustainable and further growth of the Group.
3 Group Management Report
As a leading technology expert and provider of mobile, multichannel web and mobile marketing solutions, Sevenval offers a range of products for the realization of mobile internet portals and integrated mobile marketing activities. With its FIT Technology, YOC Group enables its customers to optimise the delivery of content to all mobile devices such as smartphones, tablet PCs, portable game consoles and internet-ready TV sets. The FIT Technology adjusts websites to the properties of devices, operating systems and browsers. Roadmaps are used to continuously develop the basic technologies of YOC Group further, providing international markets with the most innovative mobile technology products and platforms. Customers can license software products or choose between an in-house installation, the FIT Server or the fitml.com cloud version.
with customers for whom the mobile channel is a strategic growth driver. The sales focus is also on the retail, financial institution, travel & transport and the automotive industry. At the same time, YOC Group has continued to boost recurring returns from licence, hosting and maintenance income to increase and ensure sustainable profitability of this segment.
2 The YOC Group
During the financial year 2011, YOC Group worked intensely on the further development of its strategy and the refocusing of its market appearance. YOC Group pursued the strict strategic concentration of its operations on the key segments Mobile Technology and Media. During this process, YOC Group discontinued or ended actively activities that are no longer part of the core business. The aim of the Group is to generate growth in the Media segment and increase profitability in the Mobile Technology segment. To reflect this strategic focus, YOC Group has been reporting in the two segments Mobile Technology and Media since 1 January 2011.
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
The centrally controlled
adserver processeseS
more than
50 billion
mobile advertising
requests via the
YOC Media Network and YOC Performance Network
every 足 month
47 Inspection and Risk Management Report on the Accounting Process
3 Group Management Report
30 Market Environment
2 The YOC Group
group management report
1 To Our Shareholders
3
29
32 Scope of Service 34 Business Development 38 Development of Profit
50 Declaration on Corporate Governance 53 Remuneration Report 55 Important Events after the Balance Sheet Date
43 Forecast Report 44 Opportunities and Risk Report
4 Consolidated Financial Statements
40 Development of Net Assets and Financial Position
4 8 Information on Shares and Management Board Explanatory Report
YOC Group
Annual Report 2011
Market environment International mobile phone market: more mobile phone than internet users - LTE as the next stage of expansion for mobile data transfer The number of mobile phone users is rapidly increasing: Around 4.3 billion people worldwide have a mobile end device - this corresponds to more than 60% of the total population. 824 million of them are already using the mobile internet compared to 2.2 billion stationary internet users (Mobile Web Watch 2011, Accenture, 2011). According to the latest study AGOF mobile facts 2011, 16.5 million Germans from the age of 14 onwards are among the mobile internet users. For comparison: Only 9.1 million German citizens used the mobile internet in 2010 (AGOF mobile facts, 2011).
Digital service consumer Around the world, in Germany, Austria and Switzerland
19.5
Million User of mobile internet in Germany, Austria and Switzerland
824 Million
User of mobile internet around the world
2.2 Billion
Internet user around the world
4.3
Billion mobile user around the world
5.3 Billion
mobile contracts around the world
the use of mobile surfing. Particularly data-intensive services such as multiplay gaming and video as well as audio streaming benefit from this development as large data volumes can be delivered to mobile end devices in real time. LTE also offers several advantages for network operators: With higher bandwidths and lower costs, LTE is clearly more efficient than 3G (Mobile Compass 2011/2012, BVDW, 2011).
Increasing popularity of smartphones - mobile internet and mobile computing become established in everyday life The worldwide figure of around 500 million smartphone users illustrates that the mobile internet has arrived in everyday life. Around 10 million smartphones were sold in Germany in 2011, which corresponds to an increase of 36% compared with the previous year. According to the Federal Association of the Digital Economy (BVDW), 43% of the currently twelve million smartphone users in Germany use their mobile end devices every day for internet access. Two thirds of users have their mobile end devices with them at any time and in any place (Mobile Research, Google/BVDW, 2011). M-commerce offers have also gained a stronger ground in everyday life in line with this development. Every third mobile internet user in Germany shopped online with his smartphone in 2011 – compared to only ten percent in 2010. The percentage of people comparing prices and making banking transactions by means of their mobile phone has more than doubled. Financial programs and apps reported a user increase of 240%. Traffic and mobility offers as well as additional communications services in connection with internet and video telephony are increasingly in demand among users. Three drivers are essential for this mobile evolution according to Accenture (Mobile Web Watch 2011, Accenture, 2011): • Devices and technology - into the touch era via broadband. Goods totalling 119 billion US-dollars will be purchased via the mobile phone in the next four years. The way mobile services are used will further change due to the increasing presence of tablets.
6.9
Milliarden Total population Accenture Analysis, Bundesagentur für Arbeit Switzerland (2011), Gartner (2011), GFK Online Monitor (2001), ITU (2011), United Nation current number of world population (2011)
The mobile phone standard Long Term Evolution (LTE), which is currently introduced Europe-wide, determines a paradigm shift from a language-oriented to a data packetoptimised mobile phone network. Higher data rates and lower loading periods are expected to significantly improve
• Services and applications - geological data, location-based services and social networks point the way through the digital mobile world. Communities experience the establishment, consumption and permanent updating of knowledge from collaboration in real time beyond cultural and age barriers. • Users and user behaviour - the digital natives are the first generation that does not know a world without the internet, mobile phones, Facebook and Google. They take
31
Mobile advertising tipped for success worldwide
Revenue of mobile data services increased by 14% to 7.4 billion
Mobile
Aided Awareness +2.1
+5.9
Ad Awareness +19.9
+4.2
Message Association +12.2
+2.2
Brand Favorability +1.4
+3.9
Purchase Intent +1.2
+4.7
The German information and communication technology (ICT) revenues rose by 1.5% to 124.4 billion Euro in 2010, which corresponds to a global market share of around 5% and therefore to the fourth-largest ICT-location in terms of revenues (Monitoring-Report Germany Digital 2011, Federal Ministry of Economics and Technology, 2011). Advertisers in the USA spent around 743 million US-dollars on mobile advertising in 2010. According to a forecast by Mobile Marketer, this figure will amount to 2.5 billion US-dollars already in 2014 (Mobile Marketer, State of Mobile Advertising 2011, June 2011). The Federal Association of the Digital Economy (BVDW) expects a 100% increase of the gross mobile advertising spending to 40
4 Consolidated Financial Statements
Revenue expectations for mobile internet and mobile advertising
Online
3 Group Management Report
Moreover, the excellent targeting options of mobile advertising compared to other media channels play an important role: From end device, time and mobile phone network to content and geographic or socio-demographic targeting, advertising messages can be transported in a more specific way to the desired target group than via any other medium (MAC Mobile-Report 2011/2012, BVDW, 2011).
Dynamic Logic, Mobile Media Summit October 2011
2 The YOC Group
The importance of mobile advertising has strongly increased in the cross-media context: Media agencies integrate mobile advertising campaigns more and more often as firm parts of the media mix. For the mobile channel has increasingly become a central customer touch point for brands of all industries. Mindshare and YOC were in a position to prove the specific influence qualities of mobile advertising campaigns within the scope of a cross-media advertising effect measurement: The mobile channel has a strong influence on the memory of the advertising material, the brand image as well as the purchase intention (Mobile advertising works, Mindshare/YOC, 2011). Especially the use of attentiongrabbing special advertising formats such as innovative rich-media advertising formats that clearly stand out from standardised banners due to the multimediality as well as interactivity boost the success of mobile campaigns (MAC Mobile-Report 2011/2012, BVDW, 2011).
The impact of Mobile Advertising is five times higher than that of Online Advertising
8%
The growth course for mobile campaigns gathered further pace in 2011. Even in the first half-year advertisers commissioned 609 campaigns in Germany - compared to 545 campaigns in the first half-year of 2010. The volume of booked mobile inventory per campaign has also significantly increased: Campaigns were displayed on an average of five mobile websites or applications, respectively, in the first halfyear 2010; this value increased to 8.9 in the reference period of the year 2011 (MAC Mobile-Report 2011/2012, BVDW, 2011). The current study on mobile advertising effects by Dynamic Logic confirms that mobile campaigns significantly influence the brand awareness and purchase intention. Mobile advertising media achieve a higher degree of attention in comparison with online media, which can be explained due to the prominent advertising placement on the display and the high degree of interactivity (Using Mobile Advertising for Branding, Dynamic Logic, 2011 in MAC Mobile-Report 2011/2012, BVDW, 2011).
Euro in Germany in the year 2011 according to the European Information Technology Observatory (EITO). Revenues rose by 12% to 40 billion Euro in the EU 25 countries and will reach 44 billion Euro at a growth rate of 10% in 2012 (MonitoringReport Germany Digital 2011, Federal Ministry of Economics and Technology, 2011).
1 To Our Shareholders
user-friendly technologies and continuous web availability for granted.
YOC Group
Annual Report 2011
million Euro for 2011 - compared with 20 million Euro in the previous year (MAC Mobile-Report 2011/2012, BVDW, 2011).
Online and affiliate marketing: current developments The German internet advertising market is highly developed in a worldwide comparison: Germany comes third after the front runners South Korea and the United Kingdom concerning the percentage of internet revenues in the advertising market. The German media industry also continues to show an upward trend: For the first time, the online advertising volume exceeded newspaper and television advertising in 2011 according to PricewaterhouseCoopers. Revenues in the entire industry rose by 2.8% to almost 59.3 billion Euro. According to forecasts for the year 2015, industry revenues will grow by an average of 2.9% per annum and reach a volume of 68 billion Euro in 2015. The percentage of online advertising in the advertising market will increase from 24% in the year 2010 to 33% in 2015 (PricewaterhouseCoopers, German Entertainment and Media Outlook 2011â&#x20AC;&#x201C;2015).
The economic development of the German affiliate networks ensures a positive atmosphere in the entire industry: Following a successful financial year 2010, the industry also achieved a revenues increase in 2011. Due to the rapidly increasing popularity of smartphones and tablets, the mobile affiliate marketing trend continues to increase. 98% of advertisers and 86% of affiliates rely on the mobile channel as one of the most important future growth drivers, particularly for themes such as dating, ringtones, gaming, entertainment, app download and financial services (Affiliate Marketing Trends, Markus Kellermann, 2011).
Revenue expectations for affiliate marketing The German online advertising market grew to 5.7 billion Euro in 2011 according to the Online Marketer Circle (OVK). Classic online advertising showed the highest value with 3.3 billion Euro, followed by search word marketing with 2.1 billion Euro and affiliate networks with 374 million Euro (2010: 339 million Euro). 11% growth to a gross advertising volume of more than 6.3 billion Euro is expected for the online advertising sector in 2012 (OVK, 2012).
â&#x20AC;&#x160;Scope of Service Mobile Technology Segment
Mobile Shopping for Jigsaw
Mobile Marketing The product portfolio in the mobile marketing business area ranges from the combination of advertising communication from the areas of television, print media, radio and outdoor advertising with mobile devices (mobile response marketing), to direct communication with consumers via mobile networks and the internet (mobile or e-mail push marketing) and the development of technological applications such as mobile websites, applications and location-based services. The implementation of mobile marketing measures is carried out on the basis of uniquely developed technological solutions and applications. The services offered in the Mobile Technology segment are used across all industries and include companies from the consumer goods, retail, services, financial and car manufacturing industries. YOC therefore implements its mobile marketing products for brands such as The Coca-Cola Company, Mercedes-Benz, Kraft Foods, Deutsche Post, Unilever and Adam Opel.
33
channel. High internet banking security standards are also guaranteed on mobile internet devices using this software.
Media Segment
2 The YOC Group
Mobile Internet
Mystery Ad for Thor
Mobile Advertising In the mobile advertising business area, YOC Group markets the mobile internet portals and applications of media companies, publishing groups and independent portal operators as well as the applications for internet-enabled end devices and generates advertising sales from these. Throughout the course of targeted mobile marketing, YOC works particularly closely both with media and advertising agencies, and directly with advertising companies from the consumer goods, services and financial industries. YOC mobile advertising is therefore used for brands such as The Coca-Cola Company, Mercedes-Benz, Intel, Deutsche Bahn, Ford, SAP, Diesel, Lufthansa, Manager Magazin, Citroën, Vodafone and BlackBerry.
The installation is frequently used by customers for security-critical applications within the area of mobile banking. This software product is hereby used with the existing bank IT infrastructure and optimises access for the mobile sales
Premium-based campaigns focus above all on branding and image, but also factor in the advertiser’s awareness targets. Today media agencies use high-profile rich media advertising formats developed by YOC such as YOC Ad Plus
It is operated on a CPM (Cost per Mille), reach and performance basis. YOC offers its customers the complete spectrum of mobile marketing solutions. It currently delivers about 5 billion mobile AdImpressions per month via its AdNetworks. With a portfolio of more than 300 international publishers, YOC Group has the largest premium media network in Europe. Premium pages such as The Sun, 20 Minutes, krone.at and El Mundo are marketed at a fixed price.
4 Consolidated Financial Statements
More than 800 renowned mobile portal companies including Mercedes-Benz, The Coca-Cola Company, Postbank, FAZ, T-Online, Air Berlin and WEB.DE use the mobile internet technology from YOC Group. Whilst just a few years ago, mobile internet exclusively consisted of simple informative services such as stock exchange information, weather and travel information, today it offers complex interactive transaction systems, for example, mobile banking, mobile social community networks or mobile commerce portals. In these datasensitive areas, particularly sophisticated technology is essential as the necessary security standards for account access, transfers or transactions can only be guaranteed through the combination of different technological building blocks.
3 Group Management Report
Within the mobile internet, YOC implements and hosts mobile internet portals and applications on the basis of Sevenval’s FIT Technology and licenses the necessary software to its customers. Pure internet portals that are not optimised for calls via mobile telephone devices, are often unsuitable for calls on mobile phones due to the volume, processing and display of data. However, mobile internet portals created on the basis of Sevenval’s FIT Technology from YOC, are specifically designed to be used on mobile devices. In this way, YOC offers to create individual mobile websites, with content that may partially or significantly differ from the customer’s stationary internet website, as well as the automated conversion of stationary websites for mobile use. In both cases, YOC’s in-house developed technology is used. The FIT Technology developed by the YOC subsidiary company Sevenval GmbH allows for an automatic optimisation of stationary content for mobile end devices and is able to react quickly and innovatively to market innovations, for example, Apple’s launch of its iPad in 2010.
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Today, there are a number of different technologies available for mobile marketing to implement highly emotive multi-media communication concepts on mobile phones. YOC offers technologies and products that help combine all available technology individually. Thus, YOC develops individual solutions for each project that are specific to the target group in question and its media use. YOC makes it possible to implement an individual mobile internet presence, which is optimised for the specific use on mobile end devices. The company therefore operates an extensive end device database, which is constantly being expanded. The end devices are analysed on the basis of 800 criteria.
YOC Group
Annual Report 2011
to achieve these objectives and create maximum visibility. This mobile advertising format integrates videos, picture galleries and 360° views and is configured for all operating systems. Unbeatable targeting options and detailed reporting methods make YOC Ad Plus a unique mobile publicity tool offering advertisers new opportunities to improve emotive appeal and targeting. A number of international customers including BlackBerry, Ford, Coca-Cola, Austrian Airlines or SAP already use YOC Ad Plus. The YOC Performance Network is a web-based, globally designed, self-service technology platform, which brings advertisers and publishers together on the mobile internet on the basis of a variable price system. The YOC Performance Network is used for campaigns that aim for greater reach and operate on a performance-related cost-per-click basis.
Affiliate Marketing YOC offers its affiliate network belboon via the organically grown subsidiary company belboon-adbutler GmbH, which is one of the top three affiliate networks on the German speaking market. Many international customers such as Vodafone D2, XING, Praktiker, Kraft Foods and TUI Austria trust in the network‘s technological competence and its long-standing expertise.
The affiliate network of YOC Group provides an independent internet-based platform, which acts as a marketplace for advertisers/merchants and sales partners (publishers/affiliates). In this marketplace, advertisers provide their offers for publishers within the scope of a partner programme. This contains for example the granted success commission rate of the publisher for defined success with the end consumer (sales or user registrations) as well as the available advertising material. Publishers conclude contracts to participate in these partner programmes and incorporate the provided advertising material into their digital media mix such as websites, newsletters or via search engine ranking and therefore generate profit and commissions. belboon is responsible for the financial interactions between business partners and for the administrative technology. This includes the tracking and classification of generated commissions via tracking technologies and the provision of sophisticated management and controlling platforms for advertisers and publishers. In line with the industry standards, belboon operates its services on a performance-related pricing model, mainly based on generated sales and leads.
Business development Business development in the Mobile
Technology segment YOC Group is present within the key markets in Europe with offices in Germany, Austria, the United Kingdom, Spain and France. The Group offers its Mobile Technology services in all of these markets except for France. The financial year 2011 was marked by the solution of operational challenges. Especially the launch of new products lead to a delay in project handling and therefore to a slow down of revenue recognition of the realization of earnings. This resulted in a significant increase of order backlog. The financial year 2011 was furthermore characterised by the strategic reorientation of the Mobile Technology unit. Within the scope of this process, the company discontinued or actively terminated activities that are no longer within the core business of the segment. We started focussing our business operations on the implementation of larger projects with customers for whom the Mobile channel is a strategic growth driver.
Mobile Entertainment for Coca–Cola
At the same time, the company has continued to boost
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Business development in the Media segment
International advertising customers such as Kraft Foods, Microsoft, Unilever, Carrefour, McDonald’s, Ford or Warner Brothers rely on the mobile advertising offers of YOC and reach their target groups via the products and technologies provided. The study „Mobile advertising works“ (“Mobile Advertising wirkt”) presented at dmexco in September 2011 in close cooperation with the media agency Mindshare Germany illustrated that advertising budget investments in the mobile channel pay off. The study came up with a clear result: There is a significant increase in advertising perception, brand image and consumer acceptance when the mobile channel is integrated in the media mix. A unique research approach to cross-media comparisons provides new insights to more efficient budget allocation for advertisers in the future.
Affiliate Marketing Studies such as the OVK Online Report show that digital advertising channels have already outpaced classic media such as newspapers, magazines and the radio in terms of advertising expenses. This development positively influenced the business development of the affiliate marketing network belboon in the financial year 2011. The company is currently among the three leading performance marketing networks in the Germanspeaking market and its portfolio encompasses around 1,300 partner programmes. Among the national and international advertisers are international companies such as Vodafone, Telefónica, Rail Europe, Jesta Digital, XING, DailyDeal, the DIY market Praktiker, HolidayCheck or mirapodo (Otto Group). Around 65,000 active distribution partners are registered in the platform belboon.
Click–to–Video Ad for Armani
4 Consolidated Financial Statements
A total of three topics accompanied the positive development of the affiliate network in the financial year 2011: the expansion of the competent staff, the technological further development and the stronger expansion of business activities in English and French-speaking countries. The latest developments of belboon include the clear graphic display of key performance indicators for publishers enabling them to boost their sales in a specific way.
3 Group Management Report
The driving- forces behind this demand in the business segment Mobile Technology in the financial year 2011 particularly include the increasing professionalization on part of the customers requesting clearly more comprehensive, technologically stable and reliable solutions. We were in a position to accommodate this professionalization and implement mature and technologically stable solutions for our customers due to the FIT Technology of our subsidiary Sevenval. Other factors positively influencing the market and demand in this segment are the increasing popularity of mobile phone devices, the transfer rates due to the rising use of UMTS as well as the rapidly increasing use of smartphones and the ensuing more frequent use of the mobile internet.
The innovative strength of YOC Group, its technological competence as well as the uniqueness of its international marketing network are reflected in the successful development of the business unit Media in the financial year 2011. The number of European-wide campaigns rose to around 1,500 in 2011. YOC Group experienced continuous growth in terms of page impressions and available ad impressions on marketed mobile portals and applications in 2011. The past financial year was also used to develop innovative advertising formats and further strengthen the position as Europe‘s leading premium marketer. 2 The YOC Group
The company could win several well-known new customers relying on the platforms or products of YOC Group in the financial year 2011. Examples include companies such as Panasonic, RWE, ERGO Direkt, Zürich Airport or Apotheke zur Rose. Furthermore, existing national and international customers including The Coca-Cola Company, Mercedes-Benz, Kraft Foods, Adam Opel and Deutsche Post also use the mobile technology products offered by YOC Group. In total, more than 200 new mobile portals on the basis of the YOC technology were implemented on an international level by YOC Group in the financial year 2011.
Mobile Advertising
1 To Our Shareholders
recurring revenues and licence income and focused on the development of mobile portals on the basis of the selfdeveloped Sevenval FIT Technology as well as the creation of integrated mobile marketing concepts and solutions.
YOC Group
Annual Report 2011
Internationalisation YOC Group was able to further strengthen its position on the European market in the financial year 2011. This is thanks to the companyâ&#x20AC;&#x2DC;s strong presence on Europeâ&#x20AC;&#x2DC;s core markets, its broad range of products in the business segments Mobile Technology and Media as well as its many years of market expertise. The company has offices in Berlin (head quarters) and Cologne, and four branch offices outside Germany in the United Kingdom (London), Spain (Madrid), Austria (Vienna) and also in France (Paris) through its subsidiary MobilADdict SAS since the first quarter of 2011.
their work as well as offering internal and external training opportunities and holding regular events.
31.12.2010
219 187 32 31.12.2011
Its subsidiary belboon-adbutler GmbH also focussed on the continued expansion of international business activities in the financial year 2011. The company continuously pursues the safeguarding of corporate growth within YOC Group by means of increasing its range of action in Germany, Austria, Switzerland and France - based on the increasing market requirements in the online and mobile market. Accordingly, foreign revenues of YOC Group also showed a positive development: The percentage of revenues generated outside the domestic German market rose to 46% in the financial year (2010: 29%). The company is the leading provider in the Mobile Technology and Media market, and its strong international position means it is well-equipped to meet customersâ&#x20AC;&#x2DC; growing demand for international and crossborder mobile services.
Personnel As of 31 December 2011, YOC Group had 232 permanent staff. This is an increase of around 20% against last year (2010: 187 permanent staff), which is partly due to the expansion of international business and the increasing business volume. In the Mobile Technology and Media market, the expert knowledge of our employees is paramount. In this highly innovative field of business, continuous further training of our employees is essential in order to meet the ever-increasing requirements of the industry and our clients. The first step in this process is the recruiting and employment of exceptionally talented individuals. Therefore, careful selection in the recruitment process is indispensable. Due to increased competition, finding suitable employees was also a challenge in the financial year 2011. There is evidence to suggest that the race for top talents will also be continued in the financial year 2012. Therefore, YOC Group also endeavours to counteract this effect and retain its employees within the company in the future. YOC Group awards the performance, commitment and desire of its employees to achieve innovative solutions by trusting them and granting them considerable leeway in structuring
267 232 35
Human Resources Development of YOC Group Total number of employees Permanent employees Freelancer and other
Outlook business development Due to the consistent implementation of the strategic focussing on the business units Mobile Technology and Media, YOC Group laid the groundwork for dynamic growth in the financial year 2011 and therefore expects a positive development of the company.
Further development of the IT infrastructure and technological integration YOC has a high-performance IT system landscape and YOCdeveloped software products that can be used for mobile and internet-based services. The underlying technology platforms were developed entirely by YOC and are very flexible, powerful, reliable and scalable. They have numerous interfaces that enable the integration of networked multi-media applications. YOC has its own IT departments for the support and further development of the software (e.g. FIT Technology). Of all the different technologies used by YOC, the following are of particular importance: With the Sevenval FIT Technology, YOC developed its own software platform that links the varying technologies to create individual solutions for every mobile marketing campaign that are specific to the target group in question and its media use. In line with the rapid technological developments, the focus of
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So-called Software Developer Kits were also made available to developers of mobile applications, through which the YOC Performance Network system can be used as a monetary assessment module. This high-performance technology is supple-
We have also created a flexible interface structure that makes it easier to link up external systems. It is used for example to send user data generated via contests directly to the CRM systems of the customers. This platform can also be used to sell mobile contents via mobile websites. The integrated billing interface enables billing via the user‘s mobile phone bill. The individual software modules are developed by YOC Group developers with modern, data-based systems on the basis of object-oriented programming languages using the serviceorientated architecture (SOA). The database and application servers used by YOC are set up at the offices in Berlin and Cologne and managed by the YOC IT department. To ensure security, there are also other servers, which are located in electronic data processing centres certified by the German Technical Inspection Service (TÜV) managed by YOC and hosted by external service providers. To avoid disruption of service due to hardware failure, system and network reserve capacity is available. To prevent unauthorised persons from accessing the systems of YOC Group or third party data, we installed firewall systems, encrypted protocols and access rights management at critical points. Critical data is also duplicated in backup systems and backed up at different geographical locations.
3 Group Management Report
The YOC-developed mobile AdServing technology was launched by YOC Group in early 2007. This technology platform encompasses all functions implemented in online advertising platforms such as campaign management, content management, multiclient capabilities and extensive reporting features and possibilities. This mobile advertising technology also makes it possible to directly address target groups taking into consideration users‘ different mobile handsets and/or mobile phone operators. The mobile range network YOC Performance Network (formerly ubiyoo) was launched at the beginning of 2010. It functions on a global basis and is also based on the AdServing technology. This technological platform also offers specific targeting options by country, channel, mobile service provider and device, weekday or time of day as well as flexible pricing models.
The affiliate marketing network belboon is among the leading affiliate marketing networks in Europe. The latest second generation network technology guarantees successful multi-channel online and mobile performance advertising. Alongside the market-leading standard of the network platform, belboon has the latest tracking technology in order to reliably measure sales. The success of the publisher is guaranteed through the combination of fingerprint, session, cookie, post-view and flash tracking. 2 The YOC Group
In the mobile internet segment it is also the FIT Technology which is mainly used, and on the foundation of which stationary websites can be automatically transformed into mobile websites. YOC‘s technology platform now also includes a content management system (CMS) for the operation of internet portals, which can be used to quickly and easily implement portals, microsites and landing pages as part of mobile marketing and mobile internet campaigns. YOC Group‘s device database that is updated on a daily basis ensures the best representation of WAP portals possible on a huge number of commonly-used mobile end devices. This database is also used for MMS and text message-based mobile marketing projects.
mented with a Self-Service Booking platform which enables the clients to manage their own campaigns and also guarantees a top scalability of this long tail business field.
1 To Our Shareholders
its activities has increasingly shifted in recent years from the conception and creative design of marketing concepts and the technological implementation and support of mobile marketing measures, to providing a full service. Technologies such as mobile advertising, SEM/SEO, QR codes and augmented reality have made a particular contribution to this end.
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
D â&#x20AC;&#x160; evelopment of Profit Revenues trend and overall performance In 2011 YOC Group continued the focussing on and further development of the core business. Delays in the delivery of newly-developed products led to a clear slowingdown of revenue recognition in the Mobile Technology segment as well as a strongly increased order backlog. YOC Group continued steadily along its growth path in the Media segment. At the same time, the company reduced or discontinued side activities that are no longer part of the core business. Against this background, YOC Groupâ&#x20AC;&#x2DC;s revenues rose by 9% from EUR 30.5 million to EUR 33.3 million in the period under report. While the core business grew by a total of 15% despite the delivery bottlenecks, discontinued side activities led to a corresponding drop in revenues.
Mobile Technology
13 18.7
Media
20.3 11.8
Revenues by business units in m EUR
2011
2010
39% Mobile Technology
Due to own work capitalised in the form of in-house developed software amounting to EUR 1.4 million as well as other operating income amounting to EUR 0.4 million, our total output in financial year 2011 was increased by 10% from EUR 31.9 million to EUR 35.0 million.
61% Media
Revenues by segment Within the scope of the business reorientation we segmented our business units into Mobile Technology and Media. Therefore, we reported according to the new, more transparent structure for the first time in the financial year 2011. The comparative figures of the same period in the previous year were also stated in the new structure for comparability. The Mobile Technology segment reported revenues of EUR 13.0 million in the financial year 2011. This corresponds to a 39% share of total revenues of YOC Group. In the previous year the share of total group revenue amounted to EUR 18.7 million and 61%. Revenues in this segment went down as we expected as we reduced or discontinued, respectively, activities, which are not scalable in the long term, as well as side activities of this business segment. With the manufacturing, distribution or licensing as well as implementation of innovative products and platforms on the basis of the constantly further developed basic technologies of the company, the business segment Mobile Technology focuses on the development of its basis technology Sevenval FIT. Furthermore, the introduction of new products such as the YOC Smart Web App led to significantly longer project durations in the current financial year and, consequently, to a delayed revenue recognition depending on the project progress. Accordingly, a high order backlog amounting to around EUR 2.4 million was the result as of 31 December 2011. It will also be reflected in the revenues figures for the coming periods.
Distribution of revenues 2011 by business units in %
The business segment Media saw accelerated growth amounting to 73% in the period under report. Due to the increase in revenues from EUR 11.8 million to EUR 20.3 million the share of total turnover was 61% in the period under report, while it amounted to 39% in the same period of the previous year. All product areas of the Media segment contributed to this strong development: The YOC Media Network for premium mobile advertising (+89%), the YOC Performance Network for range and performance mobile advertising (+570%) as well as the Affiliate Marketing Network belboon (+26%). Revenues rose by EUR 2.0 million due to the completed acquisition of the now wholly-owned French subsidiary MobilADict SAS in March 2011. Organic growth in the business segment Media amounted to 56% adjusted by this effect.
Revenues by region YOC Group steadily continued its international growth course. International revenues increased by 73% from EUR 8.9 million to EUR 15.5 million in the period under report. The share of international revenues amounted to 46% (previous year: 29%). EUR 2.0 million of this revenue development is attributed to the acquisition of MobilADict SAS in March 2011.
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2011
2010
17.9
21.5
Great Britain
6.7
3.8
Austria
1.5
1.5
Spain
1.4
1.1
Zwisterland
1.0
0.8
Germany
USA
0.8
0.6
France
2.5
0.3
Other Total
1.5
0.9
33.3
30.5
This also reflects investments in employee development required for the further international expansion, the stepping up distribution activities, the further and new development of our technological platforms and products. YOC Group pursues its international expansion strategy and prepares for a rapidly growing market in order to seize future opportunities in this respect. Personnel expenses (in kEUR) Personnel expenses
Gross income Compared to the increase in revenues, expenses for goods and services received increased disproportionately by 33% to EUR 17.0 million. This development can be ascribed to the strong increase in the business segment Media, which generates lower contribution margins due to its business nature. Hence the gross profit margin of the company as a whole dropped from 60% to 52% compared with the same period in the previous year.
2010
14.562
11.284
Other operating expenses Other operating expenses increased to EUR 6.5 million compared to EUR 5 million in the previous year. This is mainly due to the increase of agency commissions by EUR 0.7 million incurred in connection with the growing business volume of the Media segment. EUR 0.4 million were attributed to one-off expenses in connection with the strategic reorientation; further one-off expenses were incurred due to incidental expenses related to the acquisition of MobilADdict SAS amounting to EUR 0.1 million as well as EUR 0.1 million in costs in connection with the tax audit carried out in 2011. Allowance for doubtful accounts or bad debt losses amounted to EUR 0.3 million in the period under report. The other operating expenses ratio, which sets other operating expenses in relation to total output, amounted to 19% (previous year: 16%). Other operating expenses (in kEUR) ooe
2011
2010
6.491
5.049
3 Group Management Report
Revenues in the domestic market Germany dropped from EUR 21.5 million to EUR 17.9 million in comparison with the previous year. Thus, the share of total revenues amounted to 54% (previous year: 71%). The decline in the domestic market is due to the reduction of side activities and discontinuation of areas in the Mobile Technology segment that no longer form part of the core business within the scope of strategic focussing. Furthermore, the delay in revenue recognition due to longer project durations in the segment is reflected in our figures.
2011
2 The YOC Group
UK remains the most important international market with a share of EUR 6.7 million in revenues. France (EUR 2.5 million), Austria (EUR 1.5 million), Spain (EUR 1.4 million), Switzerland (EUR 1 million) and the USA (EUR 0.8 million) are also important markets. Revenues totalling EUR 1.5 million were generated in the other foreign markets comprising mainly Belgium, Italy and the Netherlands.
around EUR 0.5 million, personnel costs also rose by EUR 3.3 million to a total of EUR 14.6 million in 2011. The personnel cost ratio, which sets the personnel costs in relation to total output, increased from 35% to 42% compared to the same period last year. Particularly the delays in revenue recognition due to longer project lead times led to this strong increase of the personnel cost ratio as the personnel expenses were incurred irrespective of the degree of project completion.
1 To Our Shareholders
Turnover by regions (in m EUR)
EBITDA Personnel expenses and personnel development
Due to the increase in staff as well as severance payments in connection with the reduction of side activities amounting to
In the Mobile Technology segment, EBITDA fell from EUR 5.0 million in the financial year 2010 to EUR -0.4 million as of 31. December 2011. This development is mainly due to the delays in revenue recognition and the discontinuation of side activities, investments in the personnel development as well as aforementi-
4 Consolidated Financial Statements
The expansion of business in the core segments led to a consistent increase in the number of YOC Group employees in the financial year 2011. Compared to the previous year, the average number of group employees rose by 34 to 214 (without Management Board members, trainees and freelancers) due to internal and external growth. As of 31 December 2011, YOC Group had 232 permanent staff.
Earnings before interest, tax, depreciation and amortisation amounted to EUR -3.0 million in the period under report (previous year: EUR 2.8 million). Particularly in the third quarter of 2011, delays in the revenue recognition led to an operating loss. Furthermore, one-off expenses relating to personnel and other operational expenses were reflected in terms of revenues and earnings.
YOC Group
Annual Report 2011
oned one-off expenses in the period under reporting. EBITDA in the Media segment rose from EUR 1-0 million to EUR 1.5 million in the period under report and reflects the growing business volume.
assets as well as the negative business performance in the Mobile Technology segment EBIT decreased to EUR -9.4 million in the period under report (previous year: EUR 1.5 Mio).
EBITDA (in kEUR)
2011
2010
Financial result
EBITDA
-3.004
2.819
The financial result amounted to EUR -0.2 million in the financial year 2011 and was slightly better than in the previous year (EUR -0.3 million). Interest income amounting to EUR 0.2 million mainly encompassed income from the valuation of the interest-rate swaps as of 31 December 2011. This has to be offset against interest expenses amounting to EUR 0.4 million which are mainly caused by interest expenses for loans used to finance acquisitions.
Mobile Technology
-439 5,044 Media
1,460
Financial result (in kEUR)
973
2011
2010
EBITA (EBIT before purchase price allocations) Earnings before interest, taxes and amortisation of purchase price allocations (EBITA) went down to EUR -5.0 million in the financial year 2011 compared to EUR 2.1 million in the previous year. Impairment amounting to EUR 4.7 million incurred in the third quarter of 2011 in connection with the discontinuation of side activities. Within the scope of focussing on the core business, these activities are discontinued and abandoned in the short term. Intangible assets connected with these segments such as good will, customer bases, brand names as well as software were fully impaired in this respect.
EBIT
2010
187
103
Interest expenses
422
430
-235
-327
Financial result
EBITDA by segments (in kEUR)
2011
Interest income
Earnings before tax Earnings before tax (EBT) amounted to EUR -9.7 million (previous year: EUR 1.2 million) in the period under report. Earnings before tax (in kEUR) EBT
2011
2010
-9,669
1.168
Net income Net income amounted to EUR -7.9 million (previous year: EUR 0.7 million) in the financial year 2011. The positive income tax effect of EUR 1.8 Mio. Is mainly attributable to the capitalization of tax loss carry-forwards and the decrease of deferred tax liabilities due to the impairment of intangible assets. Net income (in kEUR)
2011
2010
Net income
-7,881
671
Due to the impairment of the abovementioned intangible
D evelopment of the financial position and net assets Financial position and net assets
Non-current assets
YOC Group‘s total assets fell by 8% compared to the financial year 2010 and amounted to EUR 30.6 million as of 31 December 2011. The decline in total assets mainly reflects the impairment of intangible assets and goodwill as well as the decline in liquidity due to the focussing on the core business.
As of 31 December 2011, non-current assets amounted to EUR 20.1 million and therefore only insignificantly changed compared to the previous year (EUR 20.4 million). Within the scope of continuously focussing on the core business, YOC Group decided to discontinue or abandon side activities.
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Non-current Assets (in kEUR) Property, plant and equipment Goodwill Intagible assets Investments Deferred tax assets Total
2011
2010
1.176
769
10.648
11.359
7.175
8.253
0
1
1.071
0
20.070
20.382
Intangible assets amounted to EUR 7.2 million as of 31 December 2011. A reduction amounting to EUR 2.3 million was carried out by the impairment of capitalised customer bases, capitalised brands and self-developed software solutions due to the termination of side activities and focussing on the core business. The capitalisation of self-developed software solutions amounting to EUR 1.4 million as of 31 December 2011 had an opposite effect.
Prepayments made Trade receivables Other assets
2011
2010
140
106
8.606
7.433
174
156
Tax assets
15
23
Securities
27
13
1.571
5.175
10.533
12.906
Cash and cash equivalents Total
Other items under current assets amounting to EUR 0.4 million comprise securities, pre-payments made, tax assets and other assets which only insignificantly changed in comparison to the previous year. Equity (in kEUR)
2011
2010
1.915
1.887
Additional paid-in capital
15.014
13.559
Retained earnings
-5.956
1.926
Subscribed capital
Currency translation Own shares Total
58
47
-50
-263
10.981
17.156
2 The YOC Group
amounting to EUR 1.4 million had an opposite effect.
Current Assets (in kEUR)
1 To Our Shareholders
Thus, the goodwill on investments was reduced by EUR 1.8 million in the financial year 2011. The capitalisation of goodwill in connection with the acquisition of MobilADdict SAS
Equity The equity of YOC Group amounted to EUR 11.0 million (previous year: EUR 17.2 million) as of 31 December 2011. This corresponds to an equity ratio of 36% (previous year: 52%).
Property, plant and equipment was increased by EUR 0.4 million to EUR 1.2 million. This mainly includes the purchase of computers and accessories (EUR 0.3 million), office furniture (EUR 0.1 million) as well as low-value fixed assets (EUR 0.1 million). Scheduled depreciation had an opposite effect.
The drop can particularly be attributed to the reduction of retained earnings due to the allocation of the net loss for the year amounting to EUR 7.9 million. Opposite effects resulted from the capital increase due to the issue of 28,000 new shares with a nominal price of EUR 1 per share in May 2011 and the related increase of additional paid-in capital by EUR 1.0 million. The representation of the Management Incentive Programme also had an increasing effect on additional paid-in capital.
Current assets Current assets amounted to EUR 10.5 million on the balance sheet date and declined by EUR 2.4 million as compared to the previous year. The decline can mainly be attributed to the decrease in cash and cash equivalents which fell by EUR 3.6 million to EUR 1.6 million.
Non-current liabilities In a year-on-year comparison, non-current liabilities of YOC Group fell from EUR 2.9 million to EUR 0.9 million as of 31 December 2011. It is to be considered that YOC Group did not fulfil the financial covenants of the lending bank as of 31 December 2011. As the lender declared its waiver of the right of termination resulting from the breach of the financial
4 Consolidated Financial Statements
Investments in self-developed software led to a cash outflow of EUR 1.4 million in the financial year 2011. Moreover, expenses were incurred for investments in the acquisition of the French MobilADdict SAS amounting to EUR 0.8 million as well as cash outflows within the scope of fulfilling variable purchase price components in connection with the acquisitions of the previous financial years amounting to EUR 0.2 million. Loan liabilities totalling EUR 2.7 million were repaid as scheduled. Due to the growing business volume trade receivables increased by EUR 1.2 million to a total of EUR 8.6 million. The accompanying measures as part of our Working Capital Management counteracted this development.
The currency translations of the financial statements of the British subsidiaries into Euro led to other comprehensive income which also slightly increased equity. The balance sheet item â&#x20AC;&#x17E;own sharesâ&#x20AC;&#x153; was increased by EUR 0.2 million compared to the previous year due to the issue of shares as purchase price components from the acquisitions of MobilADdict SAS and YOC Spain, S.L. (formerly Mobile Interactive Advertising Media, S.L.), which was purchased in the financial year 2009.
3 Group Management Report
Deferred taxes assets mainly contain capitalised loss carryforwards as well as temporary differences due to valuation differences amounting to EUR 1.1 million.
YOC Group
Annual Report 2011
covenants only after the balance sheet date in writing however, before the disclosure of the consolidated financial statements - non-current liabilities to financial institutions amounting to EUR 1.7 million are disclosed in current liabilities as of 31 December 2011. Further information, especially regarding the remaining terms, is included in the liabilities section of the notes to the consolidated financial statements. Non-current liabilities (in kEUR) Provisions Loans
2011
2010
40
33
0
2.215
6.6 million primarily resulted from the increase of liabilities for outstanding purchase invoices due to the overall higher business volume. Other current financial liabilities included EUR 1.1 million from the recognition of liabilities from the application of the percentage-of-completion method in the Mobile Technology segment which increased due to the slower project handling along with a higher project complexity as of 31 December 2011. Furthermore, EUR 0.1 million were attributed to interestrate swaps.
Other liabilities
103
0
Other financial liabilities
213
600
Investments (without company acquisitions)
Daferred tax liabilities
588
972
944
3.820
In the financial year 2011, additions to investments amounted to EUR 1.9 million. Around EUR 0.5 million accounted for investments in property, plant and equipment and EUR 0.1 million for investments in intangible assets. In the previous year, YOC Group invested EUR 0.3 million in property, plant and equipment and EUR 0.1 million in intangible assets. Moreover, YOC Group capitalised EUR 1.4 million for development expenses, particularly for the creation of software in the Mobile Technology segment.
Total
Other non-current liabilities fell from EUR 0.6 million to EUR 0.2 million. Due to the depreciation of self-developed software capitalised in accordance with IFRS, deferred tax liabilities fell by EUR 0.4 million to EUR 0.6 million. On the balance sheet date, deferred tax liabilities included the remaining differences from the capitalisation of self-developed software as well as tax effects from customer bases capitalised in subsidiaries. Other liabilities amounting to EUR 0.1 million on the balance sheet date had a lower influence on the increase of non-current liabilities.
Current liabilities Current liabilities rose by 52% to EUR 18.7 million in the financial year 2011. They include EUR 3.1 million from loan liabilities reduced by repayments amounting to EUR 2.7 million in the reporting period. The company borrowed EUR 1 million for the financing of the acquisition of MobilADdict SAS. In addition to the aforementioned adjusted allocation of loan liabilities, the increase of current liabilities particularly resulted from the increase of trade liabilities from EUR 2.5 million to EUR 4.4 million. The growing business volume in the Media segment was the main reason for this development. Current liabilities (in kEUR)
2011
2010
Prepayments received
2.328
2.014
Trade liabilities
4.379
2.496
Loans
3.126
2.618
Other liabilities
6.646
4.596
Other financial liabilities
1.781
424
Tax liabilities
257
102
Provisions
161
62
18.678
12.312
Total
The increase of other liabilities by EUR 4.6 million to EUR
Cash Flow On the balance sheet date, YOC Groupâ&#x20AC;&#x2DC;s cash and cash equivalents amounted EUR 1.6 million. Thus, the decline in liquidity amounted to EUR 3.6 million in comparison to the previous year. The cash outflow is particularly due to the repayment of loan liabilities to credit institutes amounting to EUR 2.7 million. Taking up a bank loan amounting to EUR 1 million for the financing of the acquisition of MobilADdict SAS had an opposite effect. Thus, the cash outflow of YOC Group resulting from financing activities totalled EUR 1.8 million. The cash flow from investment activities amounted to EUR -2.9 million in the reporting period, which were mainly attributed to investments in self-developed software within the scope of the further development or new development of existing platforms and solutions amounting to EUR 1.4 million. Furthermore, EUR 1 million was attributed to the purchase price component for the acquisition of MobilADdict SAS and EUR 0.5 million to investments in property, plant and equipment. The operating cash flow amounted to EUR 0.7 million in the financial year 2011. In addition to the increased business activities, the working capital management programme already introduced group-wide in the financial year 2010 led to an improvement of the operating cash flow. We still particularly focus on the management of trade receivables and trade payables as well as the establishment of a central purchasing department in order to achieve purchasing synergies and optimise payment conditions.
43
YOC Group has a credit line of EUR 1.0 million at its disposal that was not utilised as of the balance sheet date on 31 December 2011. The available liquidity is invested in time deposits, both lifespan and interest-optimised.
Research and development Expenses for the research and development of new products or technological innovations totalled EUR 2.0 million in the financial
year 2011 (previous year: EUR 1.6 million). Of this amount, EUR 1.4 million was accounted for by developments in the Mobile Technology segment and EUR 0.6 million in the Media segment.
Summary of the results of operations, financial position and net assets At the time of the generation of the management report, the group‘s net assets, financial position and results of operations show that YOC Group holds a solid economic position.
There was a strong deterioration in the German and European economy’s rate of recovery at the end of the financial year 2011. This is due to high debt levels in many industrial nations leading to consumer fears and uncertainty persisting in the global economy (IFO Institute for Economic Research). According to the figures released by the Federal Statistics Office, German GDP rose by 3% in the financial year 2011 on a year-to-year basis. Growth was driven by domestic demand.
The LTE mobile phone standard (Long Term Evolution) will facilitate a paradigm shift from a language-oriented to a data packetoptimised mobile phone network. Higher data rates and lower loading times will improve the usability of mobile surfing significantly. Particularly data-intensive services such as multiplay gaming and video as well as audio streaming benefit from this development as large data volumes can be delivered to mobile end devices in real time. LTE also offers several advantages to network operators: With higher bandwidths and lower costs, LTE is clearly more efficient than 3G (Mobile Compass 2011/2012, BVDW, 2011). The focus on the FIT Technology developed by YOC’s subsidiary Sevenval will continue to enable YOC to offer customers the desired and ever more comprehensive products and solutions based on this reliable and technically stable enabling technology. Other assets are our long-standing expertise in product development and our deepening international network relations with customers, partners, and agencies.
Media Mobile Technology
The monitoring report “Deutschland Digital 2011” published by the Federal Ministry of Economics and Technology has confirmed that with the growing use of mobile data services
4 Consolidated Financial Statements
By the end of 2011 more than 60% of the world’s population owned a mobile device (Mobile Web Watch 2011, Accenture 2011). According to Google’s/BVDW’s Mobile Research Report (2011), 10 million smartphones were sold in 2011, which is an increase of 36% compared to the previous year. This means that in many countries mobile users have more than just one device. Smartphones and tablets with 3G standard have conquered the market and are key to the success of the mobile internet. The number of mobile internet users in Germany is expected to rise to 35 million people by 2014. According to the AGOF mobile facts study, 16.5 million people in Germany used the mobile internet regularly in 2011. In spite of the subdued global economic outlook, we expect the
According to Nielsen Research, the gross advertising market of above the line media in Germany increased by 3.5% to reach EUR 25.8 billion in 2011 on a year-to-year basis. With 23% rising to EUR 2.9 billion, online advertising has seen significantly stronger growth than the total advertising market. We expect the digital online and mobile advertising market to achieve disproportionate growth in the financial year 2012 due to a continuous shift in advertising budgets towards digital media and upcoming mega events such as the Euro 2012 in Poland and the Ukraine as well as the London Summer Olympics.
3 Group Management Report
The overall economic situation in Germany and the Euro area is expected to develop greater stability in the financial year 2012. The outlook for the global economy seems to be brightening. The German Institute for Economic Research (DIW) expects the German economy to show signs of strong recovery in the financial year 2012. The IFO Institute expects domestic demand in Germany to increase in the second half of 2012 resulting from rising consumer confidence, which should help households overcome their reticence to spend - similar to the situation in the fourth quarter of 2011. In view of the sovereign debt crisis in Europe, however, Germany and the Euro area are not expected to see strong growth rates in the first half of 2012.
mobile technology market to have enormous growth potential to benefit YOC Group.
2 The YOC Group
Forecast report Economic framework conditions
1 To Our Shareholders
Financial management
YOC Group
Annual Report 2011
“mobile” has been incorporated more fully into the communication mix of advertisers The use of attention-grabbing special advertising formats such as innovative rich-media advertising formats that clearly stand out from standardised banners due to their multimediality and interactivity also boost the success of mobile campaigns (MAC Mobile-Report 2011/2012, BVDW, 2011). Focussing on the two networks YOC Media Network and YOC Performance Network will help create further synergies within the Mobile Advertising product segment. YOC Group will consistently continue its international expansion to benefit from the opportunities presented by the development in the mobile advertising market. In the coming financial years, the growing digitalisation of the advertising market will also serve as an advantage to the Affiliate Marketing product segment. Germany is expected to see a rise in gross advertising volume by 11% to reach EUR 6.3 million in 2012 (OVK 2012). According to PricewaterhouseCoopers, 2012 was the first year in which online advertising volume
in Germany exceeded that of print and TV advertising. PwC estimates that Germany will see annual growth in industry revenues of 2.9% reaching a total of EUR 68 billion in the years before 2015, with the share of online advertising amounting to 33%. YOC Group also continues its efforts in constantly expanding its affiliate network, developing new platform features and acquiring new exclusive partner programmes.
Outlook We estimate sales revenues to increase in total in both segments, Mobile Technology and Media, in the two coming financial years. Accelerated market growth and our market position make us expect disproportionate growth in the Media segment. Investments are planned to further develop innovative technologies and products as well as promote internationalisation. We expect a positive operating result for 2012 at group level and in both operating segments. We estimate that the operating result will increase further in the subsequent year due to our strategic focus on our core business.
Opportunities and Risk report Principles of risk and opportunity management YOC Group is an internationally oriented service provider operating in a dynamic market, which naturally involves company and sector-specific as well as fiscal risks. Such risks may arise from the Group’s own entrepreneurial action or from external factors. YOC Group has taken appropriate measures in order to detect and reduce potential risks in good time. For this purpose, a corresponding risk management system was set up – within the framework of this system, risks are regularly recorded, evaluated and, if necessary, continually monitored through a group-wide risk inventory.
Risk management/Central department records and outlines theur respective risks
Central controlling department systemizes the risk and compiles the provisional risk situation
Those responsible for the segments evaluate the risks in the current situation
Management Board advises and passes measures
Formal Risk management procedure
YOC Group’s risk policy, which was established by the Management Board, has not changed and is a component of the company policy seeking to achieve sustainable growth, the increase of the company value as well as the long-term guarantee of the Group’s continued existence. To do this, necessary risks have been consciously taken on in awareness of the risk/return ratio in order to make use of market opportunities and to be able to exploit the generated potential for success. YOC Group has installed a risk management system with corresponding surveillance and control systems in order to monitor and control these risks. The key element of this system is a detailed management reporting, which will be continuously monitored and developed. It uses key operational and financial performance indicators to refer to the identified areas of risk. Due to having anticipatory risk controlling as a part of the internal control system, risks and opportunities can be detected and evaluated early in order to thus be able to promptly react to these to an appropriate extent and to guarantee efficient control for the company’s success. The measures concerned within the scope of risk control are implemented within the operating units. The appropriateness of the methods and processes of risk management for the identification, evaluation, control, monitoring and communication of risks are regularly inspected
45
ment ge na
risk m a Staff planning
Debts management
risk ma n
IT-Security
Liquidity management
risk m an
Working Capital Management
ERP assisted forcasting system
Risks from acquisitions Due to the company acquisitions of the past four financial years, the expected synergy effects have already occurred extensively. These synergy potentials are to be further expanded next year and should be fully used. In the course of this, there is the risk that the synergy potentials will not reach the planned amounts and subsidiary companies will not achieve the proposed yield on turnover.
2 The YOC Group
Market monitoring
nt eme ag an
ent em ag
risk m
Insurance cover
Scrutiny of contracts
ent em ag
Audit of offers
Moreover, YOC Groupâ&#x20AC;&#x2DC;s leading market position provides a lot of room for manoeuvre and a comfortable negotiating position concerning suppliers and clients when it comes to issues concerning market and competition policy. The constant improvement of the cost structure is also decisive in competition. For this purpose, additional measures were developed and implemented. Keeping costs variable is, as always, considered to be extremely important and vital in competition.
1 To Our Shareholders
and adjusted to internal and external developments. Neither during the 2011 financial year nor at its end have any particular risks become apparent within the context of regular risk reporting which would have jeopardised the continued existence of the company.
The conducted acquisitions of subsidiary companies did not only constitute financial risks, but also involved challenges to the organisational consolidation of the companies. We have focused on the different company structures and the arrangement of organisational interdependencies so that synergies can ultimately be used optimally.
Risk management
Technological risks Market risks and risks of competition
If technological innovations are not consistently promoted by manufacturers, infrastructure suppliers and their technology partners, this could negatively affect the growth of the company. Substitutes or products from competitors could negatively impact the competitive position of YOC. If required, business-specific company developments through qualified internal and external specialists will therefore be created. Concerning the selection of IT systems, YOC Group predominantly chooses sector-specific standard software from renowned providers.
4 Consolidated Financial Statements
Changes in economic factors may also have an impact on the development of YOC Group because of decreased orders, particularly in the advertising sector. However, given its wideranging offer of products and services as well as its diversified client base, YOC Group is in an outstanding position, so that the risk of a decrease in turnover as a result of overall economic factors can be estimated as low.
YOC Groupâ&#x20AC;&#x2122;s business processes are mainly based on modern technologies in the mobile communication and internet sector. In order to ensure that these business processes, which are, for the most part, also automated, run securely and efficiently, YOC Group pursues a uniform IT strategy which involves constant monitoring and further development of the IT systems. The arrangements for information security encompass, for example, the group-wide implementation of encryption mechanisms, firewalls and virus scanners. Precautionary measures to protect against the breakdown of technical equipment were taken by the parallel operation of technical applications so that the processing of client orders takes place smoothly at all times. Furthermore, back-up systems protect the database against possible loss of data and guarantee consistent availability.
3 Group Management Report
YOC Group acts in a dynamic, developing market. This environment requires highly flexible processes and structures. Unexpected developments in market and competition conditions as well as changes, such as the market appearance of a new competitor, for example, count among the risks which YOC Group prevents through constant and precise market and company monitoring. The detection and tracing of trends and new developments are mainly guaranteed by the market research department and the business development department. Transparent and rapid decision structures enable, if necessary, immediate reactions and suitable measures for risk limitation. Customer loyalty measures as well as technical and creative strength in the improvement and further development of the product portfolio further strengthen YOC Groupâ&#x20AC;&#x2122;s market position. New product developments could, however, prove not to be marketable in the long-term, thus rendering existing investments unprofitable.
YOC Group
Annual Report 2011
Financial and treasury risks The core function of YOC Group’s treasury is the guarantee of liquidity at all times. The risk of bad debt is counteracted through strict accounts management which is aligned towards the monitoring of the age distribution of accounts and the management of dubious accounts. Accounts are preferably issued in the currency used by the corporation (EUR). Cash flows in foreign currencies are therefore only in a comparatively low amount and thus only constitute a low risk resulting from possible currency fluctuations. For the reduction of cash flow-relevant risks of changes in interest, derivative fiscal instruments (interest rate swaps) are used. The guarantee of interest provides for the reduction of costs resulting from interest while simultaneously minimising the volatility of the interest expense. Furthermore, the specified measures also provide for the minimisation of the risk of liquidity which is also limited by permanent liquidity management. In addition, the liquidity management assists the control of risks resulting from fluctuations in cash flows through ongoing and predictive monitoring. The stock of liquid resources as well as bank loans are used to finance the corporation. As in the previous years, YOC Group prefers financing through its own capital. In this process, the company always takes care to ensure the group’s ability to finance itself at all times. Control takes place using operating numbers, amongst other things, which provide information on the company‘s capital structure.
Legal risks and liability risks To prevent legal risks, important legal transactions are examined through the engagement of external lawyers. Thanks to extensive insurance cover which is subject to ongoing examination, YOC Group is secured against cases of loss and a possible risk of liability. The concluded Directors & Officers Liability Insurance provides for the safeguarding of the management against possible financial losses which affect the company. In the 2011 financial year, neither YOC Group nor one of its subsidiary companies were involved in an ongoing or foreseeable lawsuit or arbitration procedure which could have an influence on the corporation‘s economic position. In
addition, no negative development is expected for the coming financial year. Legal restrictions made by legislators, such as the change in the data protection law, for example, could have a negative influence on the business activity of YOC Group. At the time of preparing the financial statements, there is no information concerning changes to the law planned for the foreseeable future that might be relevant to YOC Group.
Personnel risks The implementation of business goals is conducted by highlyqualified employees in all sectors. The lasting engagement of a sufficient number of qualified employees in the company is necessary for further business development. Measures for staff development and a performance-related remuneration system form the basis of gaining and retaining employees. Successfully operating training and further education measures also guarantee that several key members of staff work in each company segment. Defined rules on replacement and succession ensure the safeguarding of business procedures and decision-making processes. The risk of staff shortages are reduced through corporation-wide staff planning and specific staff marketing measures. Employees who work with confidential information are obligated to adhere to the corresponding regulations and are to deal with confidential information in a responsible manner.
Planning risks Forecasts for revenues and expenses involve planning risks. The budgeting process is further improved on the basis of professional controlling with the objective of generating reliable and achievable plan figures. Thus the internal calculation and forecast system was additionally aligned to the interests of the sales department using the means of marketable software. A regular EDP-assisted examination of individual projects is carried out: Should these controls show that a project cannot achieve the planned turnover or amount covered, necessary countermeasures are immediately initiated. Moreover, the target-performance comparison is used for the project and business sector-related deviation analysis of the estimated plan of the performance figures.
47 1 To Our Shareholders
I nspection and risk management report on the accounting process (Sect. 289 Para. 5 and Sect. 315 Para. 2 No. 5 German Commercial Code (HGB))
We consider the following elements of the internal control and risk management system of YOC Group essential with regard to the (group’s) accounting process: • Procedures for the identification, assessment and documentation of all essential business processes and areas of risk relating to accounting, including corresponding key controls. These encompass finance and accoun-
• Process-integrated controls (EDP-assisted controls and access restrictions, four-eye principle, separation of functions, analytical controls). • Standardised financial accounting processes. • Guaranteeing uniform balancing through group-wide guidelines and procedures. • Monthly internal group reporting, profit and loss accounting as well as monthly result reporting of all cost objects including the analysis and reporting of essential developments and target-performance deviations. The effectiveness of the (group’s) accounting-related internal control and risk management system is systematically examined and evaluated through regular preventive control tests. A group-wide report system guarantees the ongoing and timely information of the Management Board and the Supervisory Board. The current risk situation as well as the functioning, effectiveness and adequacy of the internal control and risk management system are regularly reported to the Management Board and the Supervisory Board.
3 Group Management Report
The Management Board is completely responsible for the internal control and risk management system with regard to the (group’s) accounting process. All companies included in the group financial statement are involved in a firmly defined management and reporting organisation. Operational responsibility rests with the member of the Management Board in charge of finance together with the accounting department.
ting processes as well as administrative and operational business processes, which generate essential information for the compilation of yearly and consolidated financial statements including the management report and group management report. 2 The YOC Group
For both YOC AG as well as YOC Group, the control and risk management system comprises the entirety of all organisational regulations and measures for the identification, evaluation and communication of risks as well as dealing with the risks of entrepreneurial activity. Concerning the (group’s) accounting process, the organisation and constant further development of the internal control system, the observance of relevant accounting regulations and standards and the correctness of the accounting shall be guaranteed so that the financial reporting provides a true and fair view of the real circumstances of YOC AG’s and YOC Group’s net assets, financial position and results of operations.
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
Information on shares (Disclosures pursuant to Sect. 289 Para. 4 and Sect. 315 Para. 4 of the German Code of Commercial Law (HGB) and explanatory report of the Management Board)
Subscribed capital YOC AG‘s subscribed capital amounts to 1,915,000 EUR and is divided into 1,915,000 bearer no-par ordinary shares. Each share has one vote. Different classes of shares do not exist. The same rights and obligations are associated with all shares. Each share guarantees a vote at the General Meeting and is decisive for the shareholder‘s proportion of the company‘s profits. This does not include shares held by the company which confer no rights on the company.
Restrictions of voting rights or transfer of shares The company is not aware of any restrictions to the voting rights concerning shares of YOC AG or the ability to trade shares of YOC AG.
Participation in capital which exceeds 10% of the voting rights The following direct or indirect participations in YOC AG capital which exceed ten percent of the voting rights are based on voting rights announcements pursuant to Sect. 21 of the Securities Trading Act (WpHG) notified to and published by the company in the financial 2011 and earlier. • dkam GmbH, Frankfurt am Main: 6.78% of the nominal capital. This participation is attributable to Mr. Dirk Kraus. The participation directly and indirectly controlled by Mr. Dirk Kraus amounts to an overall total of 23.37% of the voting rights. • DIH Deutsche Industrie-Holding GmbH, Frankfurt am Main: 12.98% of the nominal capital. This participation is attributable to Mr. Peter Zühlsdorff. The participation directly and indirectly controlled by Mr. Peter Zühlsdorff amounts to an overall total of 12.98% of the voting rights. • Schwetje Invest GmbH, Cologne: 11.41% of the nominal capital. This proportion is attributable to Schwetje Invest GmbH, Cologne, and Mr. Michael Schwetje. The participation directly and indirectly controlled by Mr. Michael Schwetje amounts to an overall total of 11.41% of the voting rights.
Shares with special rights which give supervisory powers Shares with special rights which give supervisory powers do not exist.
Type of voting power if employees participate in capital and do not immediately exercise their supervisory rights The General Meeting of YOC AG concluded the requirements of the YOC Management Incentive Programme on 15 July 2009. Purchase rights were distributed to members of the Management Board and company employees under this programme in autumn 2009. As the waiting period for the YOC Management Incentive Programme has not yet expired, no shares have been transferred to the members of the Management Board and the company‘s employees. If YOC AG issues shares to employees under the YOC Management Incentive Programme, the shares will be immediately transferred to the employees. Employees receiving shares are able to exercise the rights that come with the employee shares just like other shareholders in accordance with legal regulations and the provisions of the Articles of Association of the company.
Rules for the appointment and dismissal of members of the Management Board and on the amendment of the Articles of Association The legal regulations on the appointment and dismissal of members of the Management Board are found in Sect. 84 and 85 of the German Stock Corporation Act (AktG). Sect. 7 Par. 2 of YOC AG‘s Articles of Association provides a corresponding arrangement. The Articles of Association can be amended by resolution of the General Meeting pursuant to Sect. 119 Para. 1 No. 5, 133, 179 Para. 1 and Para. 2 of the German Stock Corporation Act (AktG). The Supervisory Board is authorised to make decisions on amendments to the Articles of Association relating only to the wording (Sect. 17of the Articles of Association of YOC AG).
The authority of the Management Board concerning the possibility of distributing or buying back shares Acquisition of own shares The resolution passed by the General Meeting on 16 June 2010 authorises the company to purchase its own shares until 15 June 2015. The Management Board of YOC AG is also authorised to offer or transfer its own acquired shares with the agreement of the Supervisory Board to third parties in ways other than via the stock exchange or using the means of public offers to all shareholders, provided that this takes place:
49 1 To Our Shareholders
• in the context of the acquisition of companies or participations in companies or of parts of a company or within the framework of company mergers, or
• to offer the purchase of shares to people who have an employment contract with the company or an associated company. The authorisations specified above can be used on one or several occasions, either individually or together. This authorisation allows for a total volume of shares to be purchased of up to 10% of the share capital.
The resolution passed by the General Meeting on 6 June 2011 authorises the Management Board to increase the share capital of the company on one or several occasions up to a total of 943,500 EUR until 5 June 2016 by issuing new bearer shares against cash contributions and/or contributions in kind with the approval of the Supervisory Board. The Management is also authorised to exclude subscription rights of shareholders under certain conditions if approved by the Supervisory Board.
Company agreements regarding compensation concluded with members of the Management Board or employees in the event of a takeover bid In the event of a takeover bid described in Sect. 29, 35 of the German Securities Acquisition and Takeover Act (WpÜG), the YOC Management Incentive Programme envisages that subscription rights already granted in an option contract may be exercised by the subscription right holders, i.e., the members of the Management Board and the employees of the company, within an additional exercise period starting on the fifth day of trading and extending for the following ten stock exchange trading days after the publication of the takeover bid, provided that the statutory waiting period for the initial exercise of the subscription rights of at least two years is respected. In case of a takeover bid being submitted before the statutory waiting period of two years has expired, the company will compensate the members of the Management Board in cash for the value of their subscription rights. There are no such corresponding compensation agreements for the employees of the company.
4 Consolidated Financial Statements
Conditional capital According to Sect. 6 Para. 7 of YOC AG‘s Articles of Association, the share capital of the company was increased by up to EUR 175,000 through the issue of up to 175,000 new bearer no-par
There are no essential agreements of the company which are subject to the condition of a change in control resulting from a takeover bid.
3 Group Management Report
Authorised capital Sect. 6 Para. 5 of the Articles of Association of YOC AG provides for authorised capital 2011/I:
Essential agreements of the company subject to the condition of a change in control resulting from a takeover bid
2 The YOC Group
• to list company shares on foreign stock exchanges on which they have previously not been admitted to trading. The price at which these shares are introduced to foreign stock exchanges (excluding incidental costs associated with the acquisition) may not fall short (by no more than 5%) of the arithmetic average of the rate of the no-par value shares from YOC AG in the closing auction in Xetra trading (or a comparable successor system) on the Frankfurt Stock Exchange during the last three trading days prior to the date on which they are introduced on the foreign exchange, or
value shares. The conditional capital provides for the operation of the YOC Management Incentive Programme and the subscription rights issued under this programme. Conditional capital is only increased if the holders of subscription rights exercise these rights. The new shares resulting from the exercise of subscription rights shall participate in the profits from the start of the financial year for which - at the time of the subscription rights being exercised - no resolution of the General Meeting has been reached yet regarding the use of the net income. The Management Board is authorised, subject to the consent of the Supervisory Board, to determine the further details of the implementation of the conditional capital increase.
YOC Group
Annual Report 2011
D eclaration on Corporate Governance (Sect. 289a German Commercial Code (HGB))
The Declaration on Corporate Governance in accordance with Sect. 289a German Commercial Code (HGB) includes the Declaration of Conformity in accordance with Sect. 161 Stock Corporation Act (AktG), relevant information concerning company management practices and a description of the working methods of the Management Board and the Supervisory Board. This declaration forms part of the consolidated Management Report of YOC AG and the Group for the financial year 2011. Information pursuant to Sect. 289a German Commercial Code (HGB) does not have to be included in the audit in accordance with Sect. 317 Para. 2 Sent. 3 German Commercial Code (HGB).
Declaration by the Management Board and Supervisory Board of YOC AG in accordance with Sect. 161 Stock Corporation Act (AktG) on the German Corporate Governance Code (hereinafter also referred to as „Code“ or „DCGK“) in the version of 26 May 2010 (Declaration of Conformity 2011) Pursuant to Sect. 161 Stock Corporation Act (AktG), the Management Board and the Supervisory Board of a listed stock company shall annually declare that the recommendations of the „Government Commission of the German Corporate Governance Code“ in the official part of the electronic Federal Gazette published by the Federal Ministry of Justice were or are complied with or which recommendations were or are not applied including the respective reasons. The declaration shall be made publicly accessible on the website of the company. The German Corporate Governance Code (DCGK) contains regulations with different binding effects. Aside representations of the applicable corporation law, it contains recommendations from which companies may deviate; however, in this case they are obliged to disclose their deviations annually. In accordance with Sect. 161 Stock Corporation Act (AktG), deviations from the recommendations of the DCGK shall also be justified. Furthermore, the DCGK contains suggestions from which companies may deviate without disclosure. The following declaration concerns the period of time since the last Declaration of Conformity of December 2010 and refers to the requirements of the DCGK in its current version of 26 May 2010. The Management Board and the Supervisory Board of YOC AG declare that the recommendations made by the „Govern-
ment Commission of the German Corporate Governance Code“ are and were principally complied with in the past. The Management Board and the Supervisory Board also intend to remain compliant in the future. Only the following recommendations of the German Corporate Governance Code were and are not applied: • Sect. 2.3.2 of the Code: The company regards the announcement of the invitation to attend the General Meeting in the electronic Federal Gazette as sufficient. • Sect. 3.8 Para. 3 of the Code: The company believes that the motivation and responsibility with which the members of the Supervisory Board carry out their duties will not be improved by an excess. The D&O liability insurance serves to safeguard against the company‘s material own risks and at most serves as a second-line defence of the assets of the members of those bodies. Therefore, the D&O insurance for the Supervisory Board was concluded without excess. • Sect. 4.1.5 of the Code: When filling their managerial positions within the company, the Management Board considers company-specific realities as well as an appropriate level of diversity. In our opinion, however, the guidelines of the DCGK inappropriately restrict the Management Board in its selection of suitable candidates for managerial positions which need to be filled. • Sect. 4.2.3 Para. 2 Sent. 2 of the Code: The remuneration structure of the Management Board members focuses on a sustainable corporate development. In case of a temporary appointment of a Management Board member for a period of less than one year, however, the granting of variable remuneration components was renounced as these did not appear reasonable in the same way as a multi-annual assessment basis to be agreed in this individual case. • Sect. 4.2.3 Para. 5 of the Code: In deviation from the recommendation of the German Corporate Governance Code, payments in the event of a change of control are not generally limited to 150% of the severance cap. Such a limit could affect the ability to attract highly qualified employees. According to the Management Board remuneration structure, a change of control case could also have the effect of increasing the YOC share price when Management Board members participate in the share option programme of the company. In addition to the beneficiaries of the share option
51
• Sect. 5.1.2 Para. 2 Sent. 3 of the Code: The Supervisory Board has not set an age limit for members of the Management Board. The members of the Supervisory Board believe that suitability for a company management position depends first and foremost on individual ability and performance.
• Sect. 5.4.1 Para. 2 Sent. 1 of the Code: No age limit has been set for Supervisory Board members. A candidate‘s ability to monitor and act as a fit contact for the Management Board depends first and foremost on individual capabilities.
Berlin, December 2011 YOC AG The Management Board The Supervisory Board The declaration has been made permanently available to the public on the YOC AG‘s website (www.yoc.com) under „Investor Relations“.
Information concerning company management practices Basic principles Sustainable economic, ecological and social actions form a defining element of the company culture at YOC AG. This also includes integrity in the treatment of employees, investors, customers, suppliers, authorities, interest groups and other stakeholders as well as the public. YOC AG is a stock corporation with its registered office in Germany. Thus, German law is the basis for the scope of corporate governance, particularly the stock corporation law and the law on capital markets as well as the Articles of Association of YOC AG. As a service company, YOC AG is compelled to win and maintain the trust of its customers and business partners through exemplary behaviour. The objective is to act in a credible, trustworthy and reliable manner and to convey a corresponding image.
4 Consolidated Financial Statements
• Sect. 5.4.3 Sent. 3 of the Code: The recommendation that proposed candidates for the chairmanship of the Supervisory Board be announced to shareholders has not been adopted. Pursuant to Sect. 11 Para. 1 of the company‘s Articles of Association, the Supervisory Board elects its chair from amongst its members. According to the Supervisory Board‘s Rules of Procedure, the selection of a chairperson takes place during the first meeting after the selection of the Supervisory Board without having to specially call for a meeting. With that said, the announcement of proposed candidates is not practical.
• Sect. 7.1.2 Sent. 4 of the Code: The Company will endeavour to comply with the recommendation that the consolidated financial statements are to be made available to the public within 90 days of the end of the financial year and the interim reports within 45 days of the end of the reporting period, but cannot guarantee this due to the large scope of consolidation.
3 Group Management Report
• Sect. 5.3.1, 5.3.2 and 5.3.3 of the Code: As the Supervisory Board of YOC AG has only three members, it would not be practical to set up committees, and especially not an audit committee or a nomination committee. The purpose of the audit committee as proposed by the Code is to increase the efficiency of auditing. This aim would not be achieved at YOC AG as nearly all members of the plenum would have to sit on the audit committee. Similarly, nearly all plenum members would sit on the nomination committee, which would not bring any improvement in the preparation of Supervisory Board recommendations regarding candidates proposed by the shareholders.
• Sect. 5.4.6 Para. 2 of the Code: The remuneration of the Supervisory Board consists of a fixed payment. Any variable remuneration to be granted beyond this is unnecessary for a motivation of the Supervisory Board and would not lead to any additional incentive or motivational boost. 2 The YOC Group
• Sect. 5.1.2 Para. 1 as well as Sect. 5.4.1 Para. 2 and Para. 3 of the Code: A guideline for the structure of the Management Board as stipulated in Sect. 5.1.2, Para 1 of the Code inappropriately restricts the Supervisory Board in its selection of suitable members of the Management Board. The same applies to an objective for the composition structure of the Supervisory Board as stated in Sect. 5.4.1, Para. 2 and 3 of the Code. We are fundamentally of the opinion that this constitutes a too extensive limitation in the selection of suitable candidates for the Supervisory Board on an individual case basis. Moreover, such an objective also compromises the right of our shareholders to elect the members of the Supervisory Board.
• Sect. 5.4.6 Para. 1 Sent. 3 of the Code: The company meets the recommendations of the Code regarding the remuneration of the chair and deputy chair of the Supervisory Board with the exception of the provisions on committees; chairmanship and membership of committees are not considered separately for lack of formed committees.
1 To Our Shareholders
programme, however, the shareholders also profit from the rise in the share price, so that the interests of the Management Board and the shareholders coincide in this respect.
YOC Group
Annual Report 2011
Transparency A uniform, comprehensive and prompt information policy in relation to employees, investors, customers, suppliers, authorities, interest groups and other stakeholders is of high importance to YOC AG. All those mentioned above are provided with information by YOC AG on a uniform, comprehensive, prompt and simultaneous basis. Reporting on the business situation and results of YOC AG and YOC Group takes place through the annual report, the mid-year report and interim reports. Furthermore, information is passed on through ad-hoc communications, where legally necessary, and through the company‘s websites. All messages, presentations and notices as well as the current financial calendar can be viewed on the company‘s website (www.yoc.com) under „Investor Relations“. Changes in the make-up of the shareholder structure which have to be reported (Announcements of Voting Rights, Sect. 21 et seq. Securities Trading Act (WpHG)) and the purchase and sale of shares of individuals holding management positions within YOC AG (Directors‘ Dealings according to Sect. 15a of the Securities Trading Act (WpHG)) are also published by the Management Board. YOC AG also holds the stipulated insider registers in accordance with Sect. 15b of the Securities Trading Act (WpHG). The individuals this relates to were and are informed of the legal duties and sanctions. Risk management YOC Group is one of the world‘s leading providers of mobile technology and media and is as such exposed to many of the opportunities and risks specific to the sector and the company. YOC AG has an established, comprehensive and effective system which allows the company to detect, assess, report on and deal with opportunities and risks involving all functions and business processes at an early stage. The underlying principles and guidelines have been summarised in a risk management guide that applies throughout the Group. The aim of this guide and all the systems concerned is to systematically detect risks at the earliest possible time, assess the likelihood of them occurring, estimate the potential qualitative and quantitative impact and initiate effective countermeasures. Risk management is regularly debated at Management Board and Supervisory Board level, then further developed and discussed with the company‘s auditors. Further information on the company‘s risk management, the particular risks to which the company is exposed and the accounts-related internal control and risk management system can be found in the Risk Report that forms part of the company‘s Group Management Report.
Description of the working methods of the Management Board and the Supervisory Board As a German stock corporation, YOC AG is governed by the German Stock Corporation Act. Thus, a two-tier management system is legally prescribed. The Management Board and the Supervisory Board have autonomous powers and collaborate closely and in confidence concerning the fulfilment of their statutory tasks. Management Board The Management Board has sole responsibility for the management of the company. It has a duty to act in the interests of the company and is committed to the sustainable development of the company. The tasks of the Management Board encompass the determination of the company‘s strategic focus in consultation with the Supervisory Board and the exercise of the company management. The Management Board manages the company in accordance with the relevant laws, the Articles of Association and its Rules of Procedure. The members of the Management Board are appointed by the Supervisory Board. The periods in office of the members of the Management Board may last up to a maximum of five years, but a member may serve for several periods. The Supervisory Board can nominate a member of the Management Board to be the chairperson of the Management Board. Mr. Dirk Kraus has been appointed Chairman of the YOC AG Management Board. The Management Board reports to the Supervisory Board regularly, promptly and completely on important issues relating to the business development, strategy and planning, the risk situation of the Group as well as on compliance and also consults the Supervisory Board prior to all important strategic decisions. Management Board meetings are normally held every two weeks for joint votes. In addition to this, the Management Board regularly consults the members of the company‘s second level of management. The Management Board did not form any committees. Supervisory Board The Supervisory Board has to advise and supervise the Management Board. It is involved in the strategy and planning as well as all issues which are of fundamental importance for the company. Its approval has to be obtained for major decisions to be taken by the Management Board. This includes the corporate planning for the year ahead prepared by the company once a year (the budget), which is submitted to the Supervisory Board by the Management Board, discussed with the Supervisory Board and adapted where necessary. The Supervisory Board also assigns the audit mandate to the auditor appointed by the General Meeting. The Supervisory Board holds at least four meetings per year.
53
The agenda and applications for resolution for the Supervisory Board meetings are communicated to all participants in writing before the respective meetings, allowing for sufficient notice. When decisions are needed at short notice, they may be dealt with through a written circulation procedure. All meetings of the Supervisory Board are minuted in writing. The chairman of the Supervisory Board explains the activities of the Supervisory Board at the General Meeting each year as well as in his report to the shareholders, which is printed in the company‘s Annual Report. Berlin, March 2011 YOC AG The Management Board
The Remuneration Report is based on the recommendations in the German Corporate Governance Code. It sets out principles which are applied in setting the remuneration of the Management Board of YOC AG and explains the amount and structure of these payments. It also describes the principles applied to and the amount of Supervisory Board remuneration.
market for highly qualified management personnel and offers a performance incentive.
The Remuneration Report also contains details which German commercial law requires to be part of the notes to the consolidated financial statement pursuant to Sect. 314 German Commercial Code (HGB) as well as the group management report pursuant to Sect. 315 German Commercial Code (HGB).
• The basic remuneration is a fixed cash remuneration referring to the entire year based on the area of responsibility of the respective Management Board member and paid out in twelve monthly instalments. • The variable component consists of a cash remuneration as profit-sharing based on the results of operations according to IFRS (EBITDA) of YOC AG and is subject to an upper limit. • With the participation in the YOC Management Incentive Programme initiated in 2009, the members of the Management Board - and other employees of the company - receive subscription rights to shares in YOC AG. The subscription rights granted in this respect are subject to a holding period of several years. The exercise of subscription rights requires an own investment
4 Consolidated Financial Statements
The Supervisory Board is responsible for setting the Management Board remuneration. Its decision takes account of the size and activities of the company, the company‘s economic and financial position, the tasks of the respective Management Board member as well as the amount and structure of management board remuneration at other companies in the sector. Management Board remuneration is performance-related. Remuneration is determined in such a way that it remains at a level competitive within the
In the financial year 2011, it consisted of a fixed basic component, a variable component and the participation in the YOC Management Incentive Programme.
3 Group Management Report
Renumeration Report
Management Board remuneration
2 The YOC Group
The way the Supervisory Board works is set out formally the Rules of Procedure. Resolutions of the Supervisory Board are normally passed in meetings with the physical presence of its members; furthermore, meetings and resolutions in writing, via telephone, telex or other means of telecommunication are also possible. The company‘s Management Board attends the meetings regularly and other members of the extended company management are also invited to attend if required. At the first meeting each year which demands the physical presence of the members of the Supervisory Board after the preparation and auditing of the annual financial statements (in
the so-called „balance sheet meeting“), the company‘s auditors are in attendance and present their report of the recent audit to the Supervisory Board.
1 To Our Shareholders
The YOC AG Supervisory Board consists of three members, none of whom were previously on the company‘s Management Board. The Supervisory Board is elected by the General Meeting. The Supervisory Board did not form any committees. With Mr Oliver Borrmann, the Supervisory Board has an independent member fulfilling the requirements as to independence and expertise in the fields of financial reporting or auditing within the meaning of Sect. 100 Para. 5 Stock Corporation Act (AktG).
YOC Group
Annual Report 2011
of the subscription right owners at an exercise price derived from the stock market price of the YOC share at the time of issuance of the respective subscription rights (market value) (also see Section 6 below). The participation of the Management Board in the YOC Management Incentive Programme is intended to reward the contribution of the Management Board to increase the shareholder value and to promote the long-term success of the company. This element of remuneration and the long-term incentive it offers create a useful link between the interests of the management and those of the shareholders. Management Board remuneration in 2011
Variable (in kEUR)
Subscription rights (in numbers)
Dirk Kraus (Vorstandsvorsitzer)
170
0
32.655
Alex Sutter
160
0
32.655
Jan Webering
150
0
32.655
Joachim von Bonin (from 1 June 2011)
93
0
16.625
Patrick Feller (from 1 September 2011)
47
0
0
620
0
114.590
Total
Supervisory Board remuneration was set by the General Meeting of YOC AG on the basis of a proposal by the Management Board and Supervisory Board. Supervisory Board remuneration is fixed. The fixed remuneration amounts to kEUR 7.5 for one financial year. The chairman of the Supervisory Board receives 2.5 times and the deputy chair 1.5 times this fixed amount. Supervisory Board remuneration in 2011 Name
Fixed (in kEUR)
Name
Supervisory Board remuneration
Remuneration received by the Management Board in 2011 totalled kEUR 623. The Management Board held a total of 16,650 subscription rights in the financial year 2011. The fair value of the subscription rights amounted to around kEUR 170 as of the balance sheet date. 97.965 subscription rights were already issued in 2009. In total the Management Board was due to a total of 114.590 subscription rights in 2011. As a contractual fringe benefit, Mr. Jan Webering has the right to a company car.
Fixed (in kEUR)
Gerd Schmitzâ&#x20AC;&#x201C;Morkramer
18.75
Peter ZĂźhlsdorff
11.25
Michael Schwetje
3. 23
Patrick Feller
1. 8 6
Oliver Borrmann Total
2 . 41 37.50
There was no remuneration of personally rendered services outside the board activities, particularly with regard to any consulting and referral services. The remuneration is paid out following the ordinary General Meeting at which the approved consolidated financial statement for the last financial year is presented. Supervisory Board remuneration for the financial year 2011 totalled kEUR 37.5.
55
As of 31 December 2011 YOC-Group did not fulfil the financial covenants of the loan providing bank. The bank declared the waiving of its right of termination due to the breaching of the covenants. The written declaration was provided after the balance sheet date, yet before the disclosure of the consolidated financial statements.
outstanding as of 31 December 2011) was extended by six months to 31 March 2014. A repayment due in 2011 was deferred.
In March 2012 the termination period of a loan (kEUR 1,595
Berlin, 27 March 2012
1 To Our Shareholders
Important events after the balance sheet reporting date No other events which could have been crucial for the 2011 consolidated financial statement took place after the balance sheet reporting date.
2 The YOC Group
Dirk Kraus CEO of YOC AG
Jan Webering Management Board of YOC AG
Joachim von Bonin CFO of YOC AG
3 Group Management Report
Patrick Feller Management Board of YOC AG
Alex Sutter Management Board of YOC AG
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
With more than
300 international
PublisherS
YOC has the largest
Premium Media
Network
in europE
Consolidated Statement of Comprehensive Income
90 Statement of Responsibility made by the Management Board
Consolidated Statement of Financial Position
91 Audit Opinion
3 Group Management Report
58 59 60
2 The YOC Group
consolidated financial statementS
1 To Our Shareholders
4 92 Management Board
Consolidated Cash flow Statement 93 Supervisory Board 94 Financial Calendar
4 Consolidated Financial Statements
61 Consolidated Statement of Changes in Equity 62 Notes to the Financial Statements
YOC Group
Annual Report 2011
C â&#x20AC;&#x160; onsolidated Statement of C â&#x20AC;&#x160; omprehensive Income Consolidated Income Statemtent in EUR Revenues
Note # 5.1
2011
2010
33,332,457
30,453,555
Work in progress
5.2
0
-29,800
Own work capitalised
5.2
1,356,782
1,131,474
Other operating income
5.3
Total output
354,804
328,087
35,044,043
31,883,316
Expenses for goods and services
5.4
16,994,843
12,731,264
Personnel expenses
5.5
14,561,723
11,283,827
Other operating expenses
5.6
6,491,451
5,049,307
-3,003,974
2,818,918
EBITDA Depreciation and amortisation
6.1/6.3
EBIT
6,430,671
1,323,572
-9,434,645
1,495,346 103,253
Interest income
5.7
186,919
Interest expenses
5.7
421,767
430,481
-234,848
-327,228
-9,669,493
1,168,118
Financial result Earnings before tax Income taxes
5.8
Net income Earnings per share diluted
5.9
Earnings per share basic
Consolidated Statement of Recognised Income and Expenses in EUR
Note #
Net income Changes from currency translation Other income/loss Comprehensive income
5.11
-1,788,410
496,711
-7,881,083
671,407
-4.19
0.36
-4.19
0.39
2011
2010
-7,881,083
671,407
10,819
62,163
10,819
62,163
-7,870,264
733,570
59 1 To Our Shareholders
C â&#x20AC;&#x160; onsolidated Statement of â&#x20AC;&#x160;Financial Position in EUR
Note #
31.12.2011
31.12.2010
20,070,406
20,381,848
Assets Non-Current Assets 6.1
1,175,895
768,944
Goodwill
6.2
10,648,063
11,359,002
Intagible assets
6.3
7,175,139
8,252,902
Investments
6.4
0
1,000
Deferred tax assets
5.8
1,071,309
0
10,533,009
12,906,181
Current Assets Prepayments made
6.5
140,198
105,695
Trade receivables
6.6
8,606,232
7,432,724
Other receivables
6.6
173, 8 05
15 6 ,172
Tax assets
6.6
14,518
22,731
Securities
6.7
26,888
13,469
Cash and cash equivaltents
6.8
1,571,368
5,175,390
30,603,415
33,288,029
10,981,376
17,155,615
Total Assets
2 The YOC Group
Property, plant and equipment
Equity and Liabilities Equity Subscribed capital
6.9
1,915,000
1,887,000
Additional paid in capital
6.9
15,013,956
13,559,450 1,925,586
6.9
-5,955,498
6.9
58,237
47,418
Own shares
6.9
-50, 319
-263, 839
943,839
3,819,710
Non-Current Liabilities Provisions
6.10
39,470
33,331
Loans
6.11
0
2 ,214,918
Other liabilities
6.11
103,337
0
Other financial liablilties
6.11
213,127
599,817
Deferred tax liabilities
5.8
Current Liabilities
587,905
971,644
18,678,200
12,312,704
Prepayments received
6.11
2,328,033
2,013,826
Trade liabilities
6.11
4,379,199
2,496,291
Loans
6.11
3,126,145
2,617,806
Other liabilities
6.11
6,646,150
4,596,321
Other financial liablilties
6.11
1,781,493
424,051
Tax liabilities
6.11
256,667
102,049
Provisions
6.10
160,513
62,360
30,603,415
33,288,029
4 Consolidated Financial Statements
Total Equity and Liabilities
3 Group Management Report
Retained earnings Currency translation
YOC Group
Annual Report 2011
C â&#x20AC;&#x160; onsolidated C â&#x20AC;&#x160; ash flow Statement in EUR
2011
2010
-7,881,083
671,407
Depreciation, amortisation and impairements
6,430,671
1,323, 572
Taxes recognised in the income statement
-1,788,410
496,711
234,848
327, 229
Note #
Net income
Interests recognised in the income statement Non-cash income and expenses Cash-Earnings Result from disposal of assets
161,255
189, 269
-2,842,719
3,008,188
7,016
13,663
0
29,800
Changes in receivables, prepayments made and other receivables
-373, 278
-1,472, 274
Changes in liabilities, prepayments received and other liabilities
4,195,210
371,352
102,130
-115,292
Changes in inventories
Changes in provisions Interests received Interests paid Income taxes paid Cash flow from operating activities
7.1
Purchase/Disposal of Securities Akquisition of subsidiaries Purchase of property, plant and equipment Purchase of intangible assets
26 , 575
7,191
-338,776
-338,338
-100,587
88,839
675,571
1,593,129
0
-13,469
-1,016,557
-968,485
-493,706
-233,488
-51,562
-120,455
-1,356,782
-1,131,474
-2,918,607
-2,467,371
0
4,555,250
Transaction costs related to issuance of own shares
-12,000
-160,000
Repayments of liabilities under finance lease
-42,431
-28,042
-2,719, 50 0
-2,145,497
1,000,000
1,000,000
Outflow from development costs Cash flow from investing activities
7.1
Inflows from capital increase
Repayment of bank loans Issuance of bank loans Cash flow from financing activities
7.1
Net increase/decrease Changes in cash and cash equivalents due to exchange rates Changes in cash and cash equivalents due to changes in the scope of consolidation
-1,773,931
3,221,711
-4,016,967
2,347,469
-8,528
3,100
421,473
0
Cash and cash equivalents at the beginning of the period
7.2
5,175,390
2,824,821
Cash and cash equivalents at the end of the period
7.2
1,571,368
5,175,390
61 1 To Our Shareholders
C â&#x20AC;&#x160; onsolidated Statement of C â&#x20AC;&#x160; hanges in Equity in EUR
Note #
per 01.01.2010
8
Subscribed Capital
Additional paid in capital
1,750,000
9,143,281
Net income
1,254,179
Currency translation
-14,746
Own shares
-263,839
671,407 8
Comprehensive income Issuance of subscribed capital
6.9/8
Stock option programme
6.9/8
Issuance of own shares
6.9/8
8
62,164
62,164
0
0
137,000
4,418,250
4,555,250
138,230
138,230
0
-140,311
-140,311
1,887,000
13,559,450
Net income
1,925,586
47,418
-263,839
-7,881,083
Currency translation
8
Comprehensive income 6.9/8
733,570
0
Transaction costs including tax benefits per 31.12.2010
11,868,875 671,407
62,164 671,407
Total
0
28,0 0 0
953,120
Stock option programme
-7,881,083
17,155,615 -7,881,083
10, 819 0
10,819
10,819 0
-7,870,264 9 81,120
352,130
213,520
565,650
Issuance of own shares
6.9/8
161, 255
161,255
Transaction costs including tax benefits
6.9/8
-12, 0 0 0
-12,0 0 0
per 31.12.2011
8
15,013,955
-5,955,497
58,237
-50,319
10,981,376
3 Group Management Report
No shares are held by non- controlling shareholders.
1,915,000
2 The YOC Group
Currency translation
Issuance of subscribed capital
Retained Earnings
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
Notes to the Financial Statements 1. General information 1.1 Application of new and modified standards 1.2 Early application of standards 1.3 Published standards and interpretations that are not mandatory yet 2. Consolidation 2.1 Consolidation principle 2.2 Scope of consolidation 3. Accounting and valuation principles 3.1 General principles 3.2 Use of estimates and discretion 3.3 Equity management 3.4 Currency effects and currency conversion 4. Acquisitions 5. Notes to the Statement of Comprehensive Income 5.1 Sales Revenues 5.2 Changes in inventory and internally produced and capitalised assets 5.3 Other operating income 5.4 Expenses for goods and revenues 5.5 Personnel expenses 5.6 Other operating expenses 5.7 Interest 5.8 Income taxes 5.9 Earnings per share 5.10 Segment reporting 5.11 OtherComprehensive income 6. Notes to the financial position 6.1 Property, plant and equipment 6.2 Goodwill 6.3 Intangible assets 6.4 Investments 6.5 Prepayments made 6.6 Trade Receivables and Other Receivables 6.7 Securities 6.8 Cash and cash equivalents 6.9 Equity 6.10 Provisions 6.11 Liabilities 6.12 Other financial liabilities 6.13 Government grants 6.14 Other disclosures to financial instruments 7. Notes to the Cash Flow Statement 7.1 Cash flow of the individual activities 7.2 Cash and cash equivalents 8. Notes to the statement of Changes in Equity 9. Other disclosures 9.1 Guarantees, contingent liabilities and similar obligations 9.2 Events after the balance sheet date 9.3 Report on risks and opportunities 9.4 Related party disclosures 9.5 Remuneration of the Supervisory Board and the Management Board 9.6 Auditorâ&#x20AC;&#x2DC;s fees 9.7 Declaration of Conformity with the German Corporate Government Code
63 63 63 63 64 64 65 65 65 69 69 69 70 72 72 72 72 72 72 73 73 73 75 75 76 77 77 77 78 80 80 80 80 80 81 82 82 .84 85 85 87 87 87 88 88 88 88 89 89 89 90 90
63
YOC AG with headquarters at Karl-Liebknecht-Straße 1, Berlin, Germany is an international service provider in the field of Mobile Technology (development of mobile internet portals and mobile marketing campaigns) and Media (marketing of media packages and advertising formats). YOC AG shares are listed in the Prime Standard of the Frankfurt Stock Exchange under the identification number WKN 593273/ ISIN DE 0005932735.
The consolidated financial statements of YOC AG thus conform to the IFRS as mandatory in the European Union from 1 January 2011. The consolidated financial statements provide a fair presentation of YOC‘s net assets, financial position and results of operations.
1.1 Application of new and modified standards Standards and interpretations to be applied in the current financial year The following new or revised standards and interpretations were applicable for the first time in the financial year 2011: • IAS 24 (revised 2009): Related Party Disclosures • IAS 32 (revised 2009): Classification of Rights Issues
• Amendment of IFRIC 14 (revised 2009): Prepayments of a Minimum Funding Requirement • IFRIC 19: Extinguishing Financial Liabilities with Equity Instruments
• The amendment of IFRS 7 “Financial Instruments: Disclosure” extends the disclosure requirements for transactions containing transfers of financial assets. Application is mandatory for the financial years starting on or after 1 July 2011. Material adjustments of information contained in the Notes concerning financial instruments in accordance with IFRS 7 are not expected for the consolidated financial statements of YOC Group. Optional early application is not made use of.
1.3 Published standards and interpretations that are not mandatory yet As of the approval date of these financial statements for publication, the following standards, interpretations and amendments to standards and interpretations have already been published but their application is not yet mandatory and/or recognised as part of the EU endorsement process. The impact of the following new and amended standards and interpretations on the consolidated financial statements of YOC Group is currently being evaluated: • The amendment of IFRS 7: “Financial Instruments: Disclosures: Balancing of Financial Assets and Financial Liabilities” extends the disclosure requirements concerning financial instruments in connection with certain offsetting agreements. The amendments are mandatory for financial years starting on or after 1 January 2013. • Amendments of IFRS 9 and IFRS 7: Mandatory date of application and information contained in the Notes during transition. The mandatory application of IFRS 9 was postponed until financial years starting on or after 1 January 2015. Additional information to be contained in the Notes as demanded by IFRS 9 was added as amendments to IFRS 7. The first-time application of amendments is mandatory for financial years starting on or after 1 January 2013. • IFRS 9: “Financial Instruments” replaces the existing provisions of IAS 39 governing the classification and measurement of financial instruments. The application of IFRS 9 (revised 2011) becomes mandatory for financial years beginning on or after 1 January 2015.
4 Consolidated Financial Statements
• Improvements of the International Financial Reporting Standards (2010)
The following amended standard could be applied prematurely in the financial year 2011 as it was recognised as part of the EU endorsement process:
3 Group Management Report
The Management Board of YOC AG approved the consolidated financial statements on 27 March 2012 to be submitted to the Supervisory Board of the company.
1.2 Early application of standards
2 The YOC Group
The consolidated financial statements of YOC AG as of 31 December 2011 have been prepared pursuant to Sect. 315a German Commercial Code (HGB) in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board (IASB), London, United Kingdom, and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), as applicable in the European Union (EU), in effect on the closing date of the financial statements.
The impact of the new and amended standards and interpretations was evaluated. There was no or no material impact, respectively, on the consolidated financial statements of YOC Group.
1 To Our Shareholders
1. General Information
YOC Group
Annual Report 2011
• IFRS 10: “Consolidated Financial Statements” replaces the existing provisions for consolidated financial statements of IAS 27 “Consolidated and Separate Financial Statements” and defines the control approach as uniform principle. The application of IFRS 10 becomes mandatory for financial years beginning on or after 1 January 2013.
The following new and amended standards and interpretations not yet mandatory in the financial year 2011 and/or recognised as part of the EU endorsement process are expected to have no material impact on the YOC Group‘s consolidated financial statements:
• IFRS 13: “Fair Value Measurement” combines uniform guidelines concerning the valuation at the fair value and the respective information contained in the Notes. The application of IFRS 13 becomes mandatory for financial years beginning on or after 1 January 2013.
• IFRS 12: Disclosure of Interests in Other Entities2
• The amendment of IAS 1: “Presentation of Financial Statements: Presentation of Other Income” leads to additional disclosure requirements concerning other income with regard to the classification of individual items. The amendments are mandatory for financial years starting on or after 1 July 2012. • The new version of IAS 27: “Separate Financial Statements” contains amendments resulting from the publication of IFRS 10: “Consolidated Financial Statements”. The application is mandatory for the financial years starting on or after 1 January 2013. • The amendment of IAS 32: “Balancing of Financial Assets and Financial Liabilities” specifies additional application guidelines. The application of the additional guidelines is mandatory for financial years starting on or after 1 January 2014.
• IFRS 11: Joint Arrangements2
• Amendment of IAS 12: Deferred Taxes: Recovery of Underlying Assets1 • Amendment of IAS 19: Employee Benefits: Employee Benefit Accounting2 • New version of IAS 28: Investments in Associates and Joint Ventures: Amendments resulting from the publication of IFRS 11 and IFRS 122 The Management Board of YOC AG assumes that the standards and interpretations mentioned above will be applied in the consolidated financial statements for the financial year in which their application becomes mandatory.
1 applicable for financial years starting on or after 1 January 2012. 2 applicable for financial years starting on or after 1 January 2013.
2. Consolidation 2.1 Consolidation principles The consolidated financial statements include those companies in which YOC AG holds a direct or indirect majority of the voting rights (subsidiaries) or in which YOC AG, by virtue of its controlling position, obtains the majority of the economic benefits and bears the majority of the risks arising from their operations. The inclusion of subsidiaries in the consolidated financial statements begins from the date as of which YOC AG obtains control. The separate financial statements of the consolidated companies are prepared as of the reporting date of the consolidated financial statements. The results of subsidiaries
acquired during the year are recognised in the consolidated income statement beginning on the actual date of acquisition. Investments are consolidated using the purchase method by offsetting the carrying amounts of the investments against the re-measured equity of the subsidiaries at the date of their acquisition. Assets and liabilities that meet the recognition criteria of IFRS 3 are recognised at their fair values. Any residual amounts are reported as goodwill. Intra-group profits and losses, revenues, expenses and income as well as intercompany receivables, other assets and liabilities are eliminated.
65
As of 31 December 2011 the scope of consolidation of YOC Group includes the following companies: Fully consolidated companies
Share in %
Held via No.
Since
Domestic 1
YOC AG, Berlin
-
-
2
Moustik GmbH, Berlin
100%
1
01.02. 2007
3
Sevenval GmbH, Cologne
100%
1
25.09.2007
4
belboon–adbutler GmbH, Berlin
100%
1
12.03.2008
5
YOC Mobile Advertising GmbH, Berlin
100%
1
11.03.2009
6
YOC Mobile Advertising Ltd., London, United Kingdom
100%
1
01.01.2007
7
Moustik Sprl., Brussels, Belgium
100%
1
01.02.2007
8
YOC Ltd., London, United Kingdome
100%
1
27.05.2009
9
YOC Central Eastern Europe GmbH, Vienna, Austria
100%
1
01.06.2009
10
YOC Spain, S.L., Madrid, Spain
100%
1
22.09.2009
11
ubiyoo Ltd., London, United Kingdom
100%
1
17.08.2010
12
MobilADdict SAS, Paris, France
100%
1
23.03. 2011
With the acquisition of MobilADdict SAS, Paris, France, the YOC AG included another wholly-owned subsidiary in its consolidated financial statement as of 23 March 2011. MobilADdict SAS was included in the consolidated financial statements of YOC AG for the first time when control was obtained (see Section 4 Acquisitions).
1 To Our Shareholders
2.2 Scope of consolidation
-
All subsidiaries of YOC AG are included in the consolidated financial statements through full consolidation.
2 The YOC Group
Foreign
3.1 General principles YOC AG functions as the parent company of the group and directly holds 100% of all companies of YOC Group. The financial years for all subsidiaries coincide with the calendar year.
The consolidated balance sheet is structured according to IAS 1 “Presentation of Financial Statements” and the principle of maturity. Consequently, the balance sheet items are divided into noncurrent and current assets or liabilities respectively. As a matter of principle, assets and liabilities are classified as current when they have a remaining term to maturity or circulation of less
The annual financial statements of the companies included in these consolidated financial statements are based on uniform accounting and valuation principles. Tax bases are not used as carrying amounts in the consolidated financial statements. The consolidated financial statements were prepared in euro. For purposes of clarity and comparability, all amounts are generally (unless otherwise stated) indicated in euro in thousands. Minor calculation differences may occur due to commercial rounding of individual items and percentages. Total income is presented in two separate statements: the income statement according to the nature of expense method and the statement of comprehensive income.
4 Consolidated Financial Statements
In preparing the consolidated financial statements, the Management Board has presumed that all the companies included in the consolidated financial statements are going concerns. Therefore, accounting and measurement were performed according to the going-concern principle.
than one year within the scope of ordinary business operations. Accordingly, assets and liabilities are classified as non-current when they remain within the company for more than one year.
3 Group Management Report
3. Accounting and valuation principles
YOC Group
Annual Report 2011
The accounting and valuation principles described below were applied to the consolidated financial statements. Property, plant and equipment Property, plant and equipment is assessed at historical or production cost and depreciated on a straight-line basis over their expected economic lives as follows: If there is an indication of impairment, an impairment test is also performed. Property, plant and equipment
Useful life in years
Fixtures added by the tenants
8 - 10
Operating and business equipment
3 - 11
Gains and losses from asset disposals are recognised in other operating income and/or in other operating expenses respectively. Investment subsidies and grants provided by public authorities for the acquisition and production of property, plant and equipment are recognised on the grant date by deducting the grant from the cost, and are depreciated over the useful lives of the assets in the form of reduced depreciation or recognised in income upon disposal of the grant-supported assets. Goodwill Goodwill which arises from the acquisition of a subsidiary corresponds to the excess of the acquisition costs measured at the fair value, above the fair net value of unidentifiable assets, liabilities and possible liabilities of the subsidiary. Goodwill is not subject to scheduled depreciation. Impairment tests on goodwill are carried out once annually, or at any other time should there be any indication of depreciation. If an intrinsic value no longer exists, good will is depreciated to its recoverable amount. If company acquisitions were performed pursuant to IFRS 3 (2004) in the financial years before 1 July 2009, the variable purchase price liabilities are adjusted after expiration of the one year limit via goodwill with no effect on profit or loss. Incidental acquisition costs are capitalised. For company acquisitions which took place in financial years beginning after 1 July 2009, the revised IFRS 3 (2008) is applicable. Incidental acquisition costs as well as adjustments of purchase price liabilities were recognised as expenses after the expiration of the one year limit with effect on profit or loss. Intangible assets Intangible assets include both acquired and self-developed intangible assets.
Acquired intangible assets are valued at the acquisition costs and, if applicable, less the accumulated write-downs and impairment losses. This includes both intangible assets which have been acquired as part of a business combination, as long as this fulfils the recognition criteria of IFRS 3, as well as those intangible assets which have been acquired separately. Self-developed intangible assets of the fixed assets, from which future economic benefits are likely to accrue to the group, and which meet the recognition criteria of IAS 38 “Intangible Assets”, are valued at the production costs which were incurred during the development phase of the assets. Capitalised development costs only encompass directly attributable costs. Research costs are fully recorded as expenses in the periods in which they are incurred. Unless intangible assets have indefinite useful lives, they are written down linearly over the respective expected economic lives. In the case of self-developed intangible assets, the write-down begins at the time of completion of the asset. The useful lives are: Intangible assets Self-developed software or software purchased in connection with company purchases Licences
Useful life in years 3-9 3-5
Customer bases
8 - 10
Other intangible assets
8 - 10
If there is an indication of impairment, an impairment test is also performed. Intangible assets with indefinite useful lives are not systematically written down. Instead, these assets are regularly tested for their intrinsic value in the course of annual impairment tests and additionally if there are indications of an impairment loss. If there are impairment losses, the intangible assets are written down to the recoverable amount. Investments Financial assets neither constituting a command nor a significant influence fall under the category “available for sale”. Financial instruments under this category are valued at fair value as of the date of the first balancing on the settlement date. The subsequent valuation is likewise at fair value as long as this can be reliably ascertained, whereby changes in value are to be recognised neutrally in the provision for market valuation, for profit purposes. In the case that the interests are deducted, the net result and the cancellation of the provisions are carried out affecting net income. Prepayments made, receivables and tax receivables Trade receivable and other financial assets in the category “cre-
67
Securities Current securities are categorised as financial instruments available for sale as they have not been acquired for trade purposes. They are reported in the balance sheet on the settlement date. They are initially and subsequently valued at fair value. Changes to value are recognised in the provisions for market value changes as neutral in their affects to profits. The valuation of the fair value is carried out according to prices quoted on active markets for identical financial liabilities (level 1) or derived from such prices (level 2). If market values cannot be determined reliably, the fair value is calculated on the basis of recognised financial calculation models (level 3).
Deferred taxes Deferred taxes are recognised for temporary differences between the fiscal carrying values of assets and liabilities and the carrying values in the consolidated financial statement as well as on losses carried forward, in order to accurately account for future tax liability and relief.
Provisions Provisions are formed for present legal and actual obligations to third parties if the obligation is likely to lead to a future outflow of resources and the amount of the obligation can be reliably estimated. Short-term provisions are recorded on the expected settlement date. Long-term provisions are recorded at the present value. To calculate the present value, provisions are discounted to the balance sheet date on the basis of a risk-adequate and duration-appropriate market interest rate. Prepayments received, liabilities and tax liabilities Liabilities described in the Notes cover prepayments received, trade liabilities, other financial and non-financial liabilities as well as tax liabilities. Prepayments received are recognised at their settlement values. Financial liabilities within the meaning of IFRS 7 are trade accounts payable, financial liabilities, variable purchase price components and derivative financial instruments. These are initially recognised at the fair value. Transaction costs that can be directly attributed to the purchase of financial liabilities (which are valued at the fair value with no effect on the net income) are taken into consideration. Non-current liabilities are subsequently valued at the continued acquisition costs using the effective interest method. Current liabilities are subsequently valued at the settlement amount, without discount. In accordance with IFRS 3, liabilities arising from variable purchase prices are valued at the fair value of the likely settlement amount which is discounted to the present value when the term is longer than one year. The estimate of tax liabilities ensues in the amount of the anticipated payment of taxes.
4 Consolidated Financial Statements
Cash and cash equivalents Cash and cash equivalents are organised in the category â&#x20AC;&#x153;credits and receivablesâ&#x20AC;?. Short-term deposits with a term of up to 90 days which do not display a great risk of value fluctuation are summarised under cash equivalents. Cash and cash equivalents are valued at their nominal value
Deferred tax assets and liabilities are offset to the extent to which a legal right of set-off against the same tax authority exists.
3 Group Management Report
Derivative financial instruments Derivative financial instruments are initially recognised and subsequently valued at the fair value at all times. Market values of comparable listed derivatives are used as fair values (level 1). If there are no market values, then the fair values are calculated on the basis of recognised financial calculation models (level 3). Changes to the fair value are recorded in income. The derivatives available in the group are not recognised in the financial hedging relationships on the closing date.
Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised in those cases in which their feasibility seems to be sufficiently probable in the near future. The tax effect of tax losses carried forward was capitalised to the extent to which the future use of such losses carried forward is expected. 2 The YOC Group
Advance payments made and other assets, which are not financial instruments for the purpose of IFRS 7, are initially recognised at the acquisition costs. They are subsequently valued at continued acquisition costs with consideration of impairment losses. All the recognised receivables and other assets are non-current.
Deferred taxes were valued using the expected tax rates on the basis of current legislation at the end of the financial year. In doing so, the individual conditions of each legal entity were considered for the tax calculations. For foreign companies, the respective tax rates specific to that country were used.
1 To Our Shareholders
dits and receivablesâ&#x20AC;? are reported in the balance sheet on the settlement date. They are subsequently valued at the continued acquisition costs - if necessary - using the effective interest method less any impairment losses which result from the difference between the book value of the receivable and the estimated future cash-flows which are expected of this receivable. Losses arising from the impairment loss are recognised under other operating expenses.
YOC Group
Annual Report 2011
Own shares Own shares are valued at the acquisition costs and deducted from the equity capital with no effect on the net income. The statement ensues in the balance in one separate item. Purchases and sales as well as expenses and redemption of own shares are recorded without affecting the net income.
If the order costs incurred plus accounted gains less accounted losses exceed the value of the settlement according to the degree of completion, the surplus is shown as asset under trade accounts receivable. Liability items are recognised within other financial obligations if the value of the settlement according to the degree of completion exceeds the incurred order costs plus accounted gains and less accounted losses.
Share-based compensations with settlement by means of equity instruments For the purposes of the YOC Management Incentive Programme, subscription rights to YOC shares are granted on the first and second management levels of YOC Group.
If orders that have not been started yet were already paid for, the amount is recognised as advance payment received. Partial settlements for already rendered services from a service agreement which the customer has not paid for yet are recognised as trade accounts receivable in the balance sheet.
These are valued at the fair value of the equity instruments on the day of the granting and are recorded linearly as personnel expenditure over the time period until the non-forfeiture.
Licence revenues Furthermore, YOC Group generates sales with the licensing of software solutions. They are collected on an accrual basis over the term of the licence agreement in case of surrender of use. In case of a sale of licences, sales are considered as realised at the date of the sale.
On every balance date the estimation regarding the number of equity instruments which become non-forfeitable is checked. If existent, the effects of modifications of the original estimations are to be recorded affecting the net income, subject to the adjustment of the capital reserve, over the remaining period until non-forfeiture. Revenues and expenditure YOC Group mainly generates its revenues by rendering services. The recognition of sales proceeds takes place at the time of the service provision so that the economic benefit of the group resulting from the services is assigned on an accrual basis. Revenues are valued at the fair value of the service in return and net of the amounts of bonus agreements with the customers, granted allowances or similar deductions. Agency commissions are listed under other operating expenses. Expenditures are recorded at the time of the cause, affecting net income. Service agreements for customer-specific software Sales revenues from service agreements for customer-specific software which can be reliably estimated are recognised according to the percentage-of-completion method depending on the respective degree of completion. The order costs of the service rendered are pro-rated with the estimated total order costs for the determination of the degree of completion. If the result of an order cannot be reliably estimated, the sales revenues are only recognised to the amount of the already incurred and probably recoverable order costs. If the estimated total order costs exceed the total order proceeds, this estimated loss is recognised as expenditure. Order costs are recognised on an accrual basis.
Revenues in the field of Media and other sales Revenues in the field of Affiliate Marketing and Mobile Advertising are recognised at the date of service provision and as gross sum. The respective publisher remunerations are recognised on an accrual basis as services obtained in the cost of materials. Interest Interest earned and interest payable are recorded on an accrual basis and affecting net income. Leasing At YOC Group, both finance and operating leases exist. Within the scope of operating leases, expenditures caused are recorded linearly as expenditure over the duration of the contract. In the event that performance incentives have been granted in order to enter an operating lease, these are distributed over the duration of the contract according to the costs-by-cause principle unless another systemic basis meets the actual use development. In the specific case of an operating lease, the performance incentives obtained are recorded linearly as a reduction of the current leasing expenditure over the duration. Assets which are acquired within the scope of a finance lease are set at their fair value or the lower cash value of the minimum leasing payments at the beginning of the lease. For the liability to the lessor, a corresponding amount is recorded under liabilities. Leasing relationships in which companies of YOC Group appear as the lessor do not exist.
69
lities for earn out agreements from mergers and the feasibility of active deferred taxes. For the declaration of asset values which have been ascertained using estimations, we refer to the corresponding individual comments.
3.3 Equity management In the business year 2011, as well as in the previous years, YOC Group focused on financing its business activity using its own equity.
Furthermore, financial covenants have been imposed upon YOC Group by the bank that grants loans within the scope of outside financing. In the process, the minimum own resources and the net accumulation of debt/EBITDA form the basis of assessment. The financial covenants were not met as of 31 December 2011. However, the lender waived the exertion of his right of termination resulting from the breach of the covenants after the balance sheet date and before the publication of the consolidated financial statement in writing until the presentation of the consolidated financial statements 2012. Therefore, statements ensues under current loan liabilities.
3.4 Currency effects and currency conversion
If the transactions are invoiced in a foreign currency, receivables and payables will be converted into the particular functional currency at the exchange rates applicable on the closing date of the transaction and entered in the accounting records. Receivables and payables existing on the balance sheet date will be correspondingly adjusted for any currency fluctuations.
The following exchange rates form the basis of currency conversion: Closing rate
Average rate
31.12.11
31.12.10
2011
2010
1 EUR = GBP
0.83783
0.8568
0.8678
0.8579
1 EUR = USD
1.29485
1.3252
1.3924
1. 3264
1 EUR = CHF
1.21675
1.2465
1.2330
1.3831
The following table indicates the sensitivity of the groupâ&#x20AC;&#x2DC;s consolidated pre-tax earnings in comparison to a fundamentally possible exchange rate modification after reasonable assessment, in percentage points of the Pound Sterling (GBP) and the US Dollar (USD). All monetary assets in foreign currency are factored into the sensitivity. All other variables remain constant in the analysis.
Foreign currency
Foreign currency market trend in percentage points
Effect on earnings before taxes
2011 Pound Sterling (GBP)
US Dollar (USD)
+5%
-47
kEUR
- 5%
53
kEUR
+5%
-21
kEUR
- 5%
23
kEUR
+5%
-48
kEUR
- 5%
53
kEUR
+5%
6
kGBP
- 5%
-6
kGBP
2010 Pound Sterling (GBP)
US Dollar (USD)
The fully consolidated subsidiary companies YOC Mobile Advertising Ltd. and YOC Ltd. have receivables in USD. Currency fluctuations resulting from the currency conversion from USD to GBP have an effect of 7 kGBP in case of +5% and -7 kGBP in case of -5%.
4 Consolidated Financial Statements
The functional currency of the parent company and the presentation currency of the group is the euro.
Assets and liabilities of affiliated companies, whose functional currency is a different one than the euro, are converted into euro according to the currency rate valid on the balance sheet closing date. Changes during the year as well as expenses and income are converted into euro using the annual average exchange rates. Equity is converted using the respective historical rate. Differences resulting from the conversion at end-of-period exchange rates are recorded as currency conversion differences in equity.
3 Group Management Report
The Management Board is informed of the development of YOC Groupâ&#x20AC;&#x2DC;s own equity through the reporting of key figures such as the equity ratio. In doing so, the aim is to ensure the ideal balance of own and outside financing.
The conversion of currency for the annual financial statements of foreign subsidiary companies is effected in accordance with the functional currency concept. The functional currency of the respective investment is the respective national currency.
2 The YOC Group
The creation of the consolidated financial statement in accordance with IFRS requires assumptions and discretionary decisions to be made which concern the future and must not correspond to prospective circumstances by nature. Such assumption and assessment affects the inclusion and valuation of assets and liabilities as well as revenues and expenses. Assessment and assumption of this consolidated financial statement is based on empirical values as well as other factors that are considered plausible and commercially reasonable under the given circumstances. As the assessment may differ from actual values, assumptions and assessment are subject to regular verification. Essential estimations and assumptions have been made in particular regarding the following issues: medium-term plans, discount rates and rates of growth for the assessment of the goodwill and intangible assets, conditional purchase price liabi-
1 To Our Shareholders
3.2 Use of estimates and discretion
YOC Group
Annual Report 2011
4. Acquisitions On 23 March 2011, YOC AG acquired 100% of the shares in MobilADdict SAS, Paris, France. MobilADdict SAS is a French mobile advertising provider marketing advertising space in the mobile internet. The acquisition enables YOC Group to expand its position on the French market and accelerates international growth. The acquisition costs amounting to kEUR 2,747 consist of a fixed earn out component amounting to kEUR 2,165 as well as a variable earn out component with a fair value of kEUR 582 at the date of acquisition. Incidental acquisition costs amounting to kEUR 100 were recorded under other operating expenses.
The following table shows the preliminary purchasing price allocation of MobilADdict SAS at the date of acquisition: Preliminary purchase price allocation of MobilADdict SAS (in TERUR) Non-current assets
1,854
Intangible assets
1,811
Property, plant and equipment Deferred assets Current assets Trade receivables and other receivables Securities
The fixed earn out components amounting to kEUR 830 were paid in cash and a total of kEUR 1,332 was paid in the form of 38,000 no-par-value shares of YOC AG issued in the name of the holder at a share price of EUR 35.04 per share. A capital increase of 28,000 new no-par-value shares issued in the name of the holder at a share price of EUR 35.04 per share was implemented for the payment of the purchasing price in shares. The transfer of 10,000 YOC shares from the own stock of YOC AG was also implemented at a share price of EUR 35.04 per share. The variable earn out component is based on the EBITDA of MobilADdict SAS generated in the financial years 2011 and 2012 and is due for payment on 1 July of the respective subsequent year. At the time of the preparation of the consolidated financial statement, YOC AG expects an obligation resulting from the variable earn out component amounting to kEUR 616 estimated at a fair value of kEUR 582 as of the acquisition date. In case of an overachievement of the earnings for 2011 and 2012, a conditional earn out payment of a maximum total of kEUR 776 for 2011 and 2012 may fall due in accordance with the purchase agreement so that a maximum variable purchase price amounting to kEUR 1,552 may result. A conditional earn out payment amounting to kEUR 470 is expected for the financial year 2011 as of 31 December 2011. At the time of preparation of the consolidated financial statement for the financial year 2012, YOC AG expects the achievement of an adjusted EBITDA of MobilADdict SAS amounting to between kEUR 412 and kEUR 575. In this case, an estimated subsequent earn out obligation amounting to kEUR 147 would become due on 1 July 2013, which was valued at a fair value of kEUR 138 as of 31 December 2011. If MobilADdict SAS misses its EBITDA targets contrary to expectations, the payment in return may be reduced to kEUR 0. A purchasing price allocation in accordance with IFRS 3 was implemented for the acquisition of MobilADdict SAS. As the valuation of the variable earn out obligation has not been fully completed with regard to MobilADdict SAS, the purchasing price allocation is preliminary and can be adjusted within one year after the takeover date on the basis of conclusive information in accordance with IFRS 3.
Fair values at the date of acquisition
Cash and cash equivalents Liabilities Liabilities Deferred tax liabilities Net assets
7 36 1,476 1,042 13 421 1,974 1, 371 6 03 1,356
Reconciliation goodwill (in kEUR) Fair value of the acquisition costs Net assets Goodwill
2,747 1,356 1,391
Customer bases amounting to kEUR 1,808 were capitalised within the scope of the purchase price allocation. The customer bases were valued at the fair value. A modified DCF method based on the currently valid version of the IDW S1 (Standard of the Institute of Public Auditors in Germany) was applied within the scope of the income approach. The subsequent valuation of customer bases will be implemented on a linear basis as scheduled during a useful life of 10 years. The fair value of trade accounts receivable amounted to kEUR 844 at the date of acquisition (gross amounts receivable to the tune of kEUR 944; kEUR 100 thereof were adjusted due to their age structure). This leads to preliminary net assets amounting to kEUR 1,356 as of 31 December 2011. The goodwill of kEUR 1,391 resulting from the difference between the fair value of the acquisition costs amounting to kEUR 2,747 and the preliminary net assets reflects the potential synergy effects and the strategic development potential of the company. It is expected that the goodwill recorded is not tax-deductable. MobilADdict SAS contributed kEUR 1,993 in sales and earnings after tax amounting to kEUR 70 to the group earnings as of 31 December 2011. In case of inclusion of MobilADdict SAS as of 1 January 2011 in YOC Group, the company would have contributed sales amounting to kEUR 2,259 and earnings after tax amounting to kEUR -30.
71
The assessment of conditional earn out obligations to be implemented regularly led to an adjustment of the variable purchasing prices from the acquisition of YOC Spain, S.L. in 2011.
The conditions for the achievement of the agreed variable earn out
In the financial year 2011, a subsequent adjustment of the purchasing price amounting to kEUR 55 was carried out for the acquisition of belboon-adbutler GmbH (formerly: adbutler GmbH), which was completed on 12 March 2008. The purchase price is adjusted by a goodwill adjustment according to IFRS 3 (2004), the application of which was mandatory at the time of acquisition. The following table shows the development of the goodwill from the acquisitions of YOC Group:
2010 Company purchases (in kEUR) Purchase price
Values as of Sevenval 31.12.09 GmbH
belboonadbutler GmbH
YOC Ltd.
2011 YOC Spain, S.L.
18,384
Variable purchase price adjustment
-74
Incidental acquisition expenses
306
Values as of 31.12.10
Brutus Media GmbH
Moustik GmbH
Moustik Sprl.
belboonadbutler GmbH
YOC Spain, S.L.
18,384 -8
28
372
223
541
55
Mobil ADcict SAS
Values as of 31.12.11
2,747
21,131
-346
250
306 -8
28
372
223
2 The YOC Group
The cash share of the agreed variable earn out component amounting to kEUR 103 was paid out in the financial year 2011. With the transfer of 7,000 own shares at a share price of EUR 30.75 to the seller of YOC Spain, S.L. (formerly: Mobile Interactive Advertising Media, S.L.) YOC AG fulfilled another conditional purchasing price payment.
component in share packages were not fulfilled as of 31 December 2011. As of 31 December 2011, the adjustment of the variable purchasing price was carried out by means of an adjustment of the goodwill amounting to kEUR -346 on the basis of IFRS 3 (2004), which has been binding as of the acquisition date.
1 To Our Shareholders
There were no further acquisitions by YOC Group during the financial years 2010 and 2011.
306
Total purchase price
18,616
2,747
21,687
Net assets to book values
2,351
19,231 2,351
55
-346
115
2,466
6,979
6,979
1,808
8,787
Adjustment to fair
Deferred tax assets
659
659
36
695
Deferred tax liabilities
2,118
2 ,118
603
2 , 7 21
Purchased assets and debts total
7,871
7,871
1,356
9,227
1,391
10,648
Impairment Remaining goodwill
10,744
-8
28
372
223
11,359
-1,213
-91
-507
-1,213
-91
-507
-1,811 55
-346
3 Group Management Report
Intangible assets
The amount of the item â&#x20AC;&#x153;Acquisition of equity investmentsâ&#x20AC;? of the cash-flow statement amounting to kEUR 1,016 is established as follows:
Purchase prices affecting payment in 2011
belboon-adbutler GmbH
YOC Spain, S.L.
MobilADict SAS
Total
0
0
830
830
Variable purchase price components paid in arrears in 2011 (classified as liability in the previous years)
83
103
0
186
Acquisition of equity investments
83
103
830
1,016
4 Consolidated Financial Statements
Acquisition of equity investments of the CF statement (in kEUR)
YOC Group
Annual Report 2011
5. Notes to the Statement of Comprehensive Income 5.1 Revenues YOC Group generated revenues in the amount of kEUR 33,332 (2010: kEUR 30,454) in the financial year 2011, primarily arising from the provision of services in the fields of Mobile Technology and Media. In the financial year 2011, YOC Group recorded revenues using the percentage-of-completion method according to the degree of completion for the first time. Ongoing projects on the closing date are offset against the recorded revenues total costs plus possible gains minus possible losses amounting to kEUR 2,506 (2010: kEUR 0).
5.2 Changes in inventory and internally produced and capitalised assets
Research and development expenses (in kEUR) Mobile Technology Media Total
Changes in inventory Internally produced and capitalised assets Total
2011
2010
0
-30
1,357
1,131
1,357
1,101
2010 1,162
560
475
2,006
1,637
5.3 Other operating income Other operating income (in kEUR)
2011
2010
Accrual adjustment and liquidation
86
15
Other remuneration in kind
71
61
Government grant income
52
4
Foreign exchange and currency conversion gains
49
46
Foreign exchange and currency conversion gains
44
0
Other income (in kEUR)
2011 1,446
Total
53
202
355
328
The item “other income” mainly contains income from the reimbursement of the value added tax from the previous years.
5.4 Expenses for good and services In the financial year 2011, there was no work in progress reported.
Expenses for goods and services (in kEUR) Goods
kEUR 1,357 (2010: kEUR 1,131) was capitalised for the development costs of self-developed software. The product field of mobile marketing predominantly developed software that is applied within the scope of service provision. In addition, the mobile internet technology, adserving technology and affiliate marketing technology were constantly further developed. The recognition criteria of IAS 38 were met. The directly attributable individual costs were capitalised in the balance sheet as production costs for self-developed software. Production costs were determined on the basis of hourly logs and measured at daily rates for each employee. The costs for the research and development of new products and technical innovations in the financial year 2011 amounted to kEUR 2,006 (2010: kEUR 1,637). YOC Group invested kEUR 868 (2010: kEUR 835) for the further development of mobile internet technology and kEUR 578 (2010: kEUR 327) in other mobile marketing technologies. The research and development costs were distributed across the two business areas of YOC Group as follows:
Received services Total
2011
2010
8
105
16,987
12,626
16,995
12,731
The expenses for services received amounting to kEUR 16,987 (2010: kEUR 12,626) mainly comprises costs incurred for the infrastructure for the provision of services, utilisation of external services for the implementation of projects, publisher compensation as well as the sending of SMS, MMS and e-mails.
5.5 Personnel expenses Personnel expenses (in kEUR) Wages and salaries Social security Total
2011
2010
12,414
9,587
2,148
1,697
14,562
11,284
In the financial year 2011, the increase of personnel expenses by kEUR 3,278 to kEUR 14,562 primarily resulted from the further group-wide expansion of the workforce in the core areas. A sum amounting to kEUR 119 (2010: kEUR 115) for direct insurance policies and contributions to the statutory / public pension fund (contribution-oriented scheme) amounting to kEUR 753 (previous year: kEUR 595) are included in the social security
73
The calculation of the annual average number of employees of MobilADdict SAS is carried out on a pro-rata basis from the initial consolidation. The total as of year end does not include board members. Number of employees
2010
Annual average
214
180
Year-end number
227
187
Other operating expenses (in kEUR)
2011
2010
Marketing, communication, media placement
2,363
2,249
Running operating expenses
1,098
1,063
Legal and professional fees
804
383
Travel expenses
664
492
Outside service
546
205
Value adjustment on receivables
265
14 8
Recruiting and training expenses
243
84
Stock exchange listing fees
50
47
Stock price losses
47
79
All other operating expenses Total
411
299
6,491
5,049
5.6 Other operating expenses
The item “running costs of the business” includes rental, leasing and ancillary expenses amounting to kEUR 804 (2010: kEUR 724), expenses for repairs, maintenance and upkeep of operating and business equipment as well as software amounting to kEUR 132 (2010: kEUR 132) as well as expenses for contributions, insurances and taxes amounting to kEUR 89 (2010: 122).
Security income and other interest income Income from interest rate swap valuation Interest Income Interest and similar expenses Interest expenses from long-term liabilities Interest expenses Financial results
2010
54
28
133
75
187
103
380
87
42
343
422
430
-235
-327
The net interest income amounting to a total of kEUR 187 (2010: kEUR 103) includes an income of kEUR 133 (2010: kEUR 75) which is a result of the development of the interest rate swap. Interest and similar expenses mainly contains tax-deductible fringe benefits and other benefits in connection with business taxes. The recognition of fair values for the variable purchase price components of the business acquisitions resulted in the associated liabilities being discounted to the date of the business acquisition. Subsequent valuation (accumulation) led to interest expenses amounting to kEUR 19 (2010: kEUR 19) in the financial year. Interest expenses from loan agreements which have a final maturity of more than one year are accounted for under the item “interest expense for non-current liabilities”. Interest expenses for non-current liabilities include an amount of kEUR 16 (2010: kEUR 16) which accounts for non-current finance leasing.
5.8 Income Taxes The tax expenses for the financial year 2011 consist of the following: Income Taxes (in kEUR)
2011
2010
Current taxes Domestic Foreign Total
87
6
144
108
231
114
-1,655
460
Deferred taxes Domestic Foreign Total
Furthermore, all other operating expenses also encompass additional costs of monetary transactions amounting to kEUR 45 (2010: kEUR 56), expenses from the remuneration of the Supervisory Board amounting to kEUR 38 (2010: kEUR 38), expenses for other taxes amounting to kEUR 87 (2010: kEUR 5) as well as expenses for licences and concessions amounting to kEUR 39 (2010: kEUR 28).
2011
Income taxes
-364
-77
-2,019
383
-1,788
497
The actual taxes on income consist of corporate income tax, trade tax, solidarity surcharge and the foreign taxes on income and earnings. The actual domestic taxes on income are regarded
4 Consolidated Financial Statements
The increase of legal and professional fees by kEUR 421 to kEUR 804 (2010: kEUR 383) results from the higher legal advice costs in the financial year 2011, which were incurred due to the acquisition of MobilADdict SAS as well as the strategic reorientation of YOC Group in the third quarter. Moreover, expenses for tax advice services increased.
Financial result (in kEUR)
3 Group Management Report
The item “marketing, communication, media placement” mainly contains costs for agency provisions amounting to kEUR 1,234 (2010: kEUR 535) as well as costs for marketing and public relations amounting to kEUR 544 (2010: kEUR 963).
5.7 Interest
2 The YOC Group
2011
1 To Our Shareholders
payments. The item “wages and salaries” contains expenses for the stock option programme introduced in the financial year 2009 amounting to kEUR 161 (2010: kEUR 138).
YOC Group
Annual Report 2011
The deferred taxes recognised in income for the financial year amount to a total of kEUR -2,019 (2010: kEUR 383).
as tax expenses for other accounting periods. The deferred taxes recognised in income are broken down as follows: Deferred taxes recognised in profit or loss (in kEUR) On temporary differences On loss carry-forward and tax benefits Total
2011
2010
-551
169
-1,468
214
-2,019
383
The following table shows the offsetting and reconciliation from the expected to the actual disclosed tax expenses:
2011 Tax reconciliation (in kEUR) Earnings before tax
kEUR
%
-9,669
kEUR
%
1,168 31%
Tax rate of YOC AG Expected tax expenditure
2010
31%
-2,960
358
Changes due to deviations from tax assessment basis 0
-13
Non tax-deductible expenses
Tax-free earnings, tax allowances and benefits
119
59
Non tax-deductible depreciation on goodwill
571
0
Tax rate deviations Diverging tax rate effects
-2
13
4
-24
Deferred tax value correction on loss carry-forward
0
98
Deferred tax allocation on loss carry-forward
0
0
325
0
23
0
93
6
39
0
-1,788
497
Diverging foreign tax rate effects
Deferred tax assets appropriation and assessment
Non-recognition of deferred tax assets on loss carry-forward Tax rate deviations on deferred taxes Tax rate deviations on deferred taxes
Non-periodic effects Taxes from previous years
Other Other
Actual tax expenditure according to the Income Statement
The expected tax expenses result from the multiplication of the consolidated result before taxes with the tax rate of the parent company amounting to: 30.61% (previous year: 30.61%). The relevant tax rate is calculated according to the tax regulations valid on the closing date of the financial statement. The corpo-
rate income tax, the solidarity surcharge and the trade tax will be considered accordingly. The following deferred tax assets and liabilities were recognised on differences and on tax loss carry-forward:
75
2011
2010
Deferred tax assets
Deferred tax liabilities
Deferred tax assets
Deferred tax liabilities
Intangible assets
332
2,135
301
2,275
Work progress
762
0
0
0
Property, plant and equipment
0
8
0
0
Receivables
0
376
0
2
Provisions
0
93
0
0
Liabilities
331
777
72
4
2,447
0
936
0
3,872
3,389
1,309
2,281
-2,801
-2,801
-1,309
-1,309
1,071
588
0
972
Tax loss carry-forwards and benefits Total Offsetting Recognised in the balance sheet
Deferred taxes on balance sheet items relating to foreign equity investments were determined in consideration of the tax conditions applicable to the respective company.
nary shareholders of YOC AG were divided by the weighted average number of ordinary shares in circulation during the year. The following amounts were used as the basis for the calculation of diluted earnings per share and the basic earnings:
Weighted average number of common shares to calculate the undiluted results per share Dilutive effect of share options
Deferred taxes on tax loss carry-forwards were determined taking their future feasibility into consideration. Deferred tax assets on tax loss carry-forwards which amounted to kEUR 1,417 (2010: kEUR 300) were not recognised on 31 December 2011.
The tax receivables amounting to kEUR 15 (2010: kEUR 23) contain the following items: Tax receivables (in kEUR)
2011
2010
Corporate tax
0
11
Trade tax
9
9
Capital yields tax
6
3
15
23
Reclaims for:
Total
5.9 Earnings per share The registered share capital as of 31 December 2011 is divided into 1,915,000 bearer shares (2010: 1,887,000 bearer shares) each with a nominal value of EUR 1 per share. To calculate the undiluted earnings per share, the earnings attributed to ordi-
1,879,299
1,735,005
0
154,479
1,879,299
1,889,484
The profit after tax for the financial year 2011 amounted to kEUR -7,881 (2010: kEUR 671). Due to the loss situation the stock options had no dilutive effect in 2011. Thus, the undiluted and the diluted earnings per share are the same for the financial year 2011 and amount to EUR -4.19 (2010: undiluted EUR 0.39/diluted EUR 0.36).
5.10 Segment reporting Segment reporting takes place on the basis of the internal management structure. For the purpose of focussing on the scalable business units, reorganization of segments took place in the first quarter of the financial year in order to further develop the business segment strategy leading to more internal and external transparency. The group is now organised in the following reportable business segments: 1. Mobile Technology 2. Media The Mobile Technology segment encompasses the product areas Mobile Marketing and Mobile Internet as well as the former business unit Mobile B2C Services which, however, no longer forms part of the strategic focus of YOC Group. Mobile Technology also includes the licensing and implementation of technological products for target-oriented communication via mobile end devices.
4 Consolidated Financial Statements
Tax liabilities amount to kEUR 257 (2010: kEUR 102) as of 31 December 2011.
2010
3 Group Management Report
The amount of deferred tax assets to be indicated in accordance with IAS 12.82 is kEUR 1,071 (2010: kEUR 0) and is expected to be realised by corresponding future gains as scheduled. The usage of tax loss carry-forwards has no time limits in Germany.
Weighted average number of common shares adjusted by the dilutive effect
2011
2 The YOC Group
For the calculation of deferred taxes for German tax purposes a corporate tax rate of 15% and a solidarity surcharge of 5.5% was used. The trade tax is calculated using a 3.5% base rate and the respective tax rate specific to each municipality.
1 To Our Shareholders
Deferred tax assets/liabilities (in kEUR)
YOC Group
Annual Report 2011
The Media segment encompasses the product areas Mobile Advertising and Affiliate Marketing. The business unit Media includes the marketing of mobile websites and applications on cost-per-thousand-impressions (CPM), media penetration and performance basis.
The following table shows the earnings of the individual segments. EBITDA is used as the measure of earnings, in accordance with the internal reporting structure:
Mobile Tech
Segment reporting (in kEUR)
Media
Consolidation
Overhead
YOCâ&#x20AC;&#x2018;Gruppe
01.01.2011-31.12.2011 External sales
13,019
20,313
Internal sales
3,016
2,458
-5,473
0
16,035
22,771
-5,473
33,332
984
373
0
0
0
259
96
355
Total sales Internally produced and capitalised assets Change in portfolio Other operational yields Overall performance Cost of material
33,332
1, 357
14,262
20,782
35,044
3,428
13,567
16,995
Personnel cost
8,907
3,420
2,235
Other operational cost
2,365
2,336
1,790
6,491
-438
1,459
-4,025
-3,004
External sales
18,699
11,755
Internal sales
3,812
599
-4,411
0
22,511
12,354
-4,411
30,454
EBITDA
14,562
01.01.2010-31.12.2010
Total sales
30,454
Internally produced and capitalised assets
815
317
Change in portfolio
-30
0
-30
Other operational yields
229
99
328 31,883
Overall performance
19,713
12,170
Cost of material
4,933
7,798
Personnel cost
7,273
2,229
Other operational cost
2,464
EBITDA
5,044
The balancing and valuation methods of the segments obligated to report follow the balancing and valuation methods used in the consolidated financial statements.
1,131
12,731 1,782
11,284
1,170
1,416
5, 0 49
973
-3,198
2,819
Sales revenues are essentially allocated to the country in which the service is provided. If such an allocation is not possible, then the revenue is allocated to the country in which the provision of the service was commissioned.
EBITDA can be reconciled to earnings after tax as follows: Earnings after tax (in kEUR) EBITDA Amortisation Earnings Taxes Earnings after taxes
2011
2010
-3,004
2,819
-6,430
-1,324
-235
-327
1,788
-497
-7,881
671
External sales of kEUR 17,882 (2010: kEUR 21,544) is attributed to Germany and kEUR 15,450 (2010: kEUR 8,909) is attributed to international sales.
Of the non-current assets, kEUR 6,136 (2010: kEUR 4,882) is internationally attributable and kEUR 13,934 (2010: kEUR 15,500) can be attributed to Germany.
5.11 Other comprehensive income Other comprehensive income in the financial year 2011 include changes arising from currency conversions amounting to kEUR 11 (2010: kEUR 62). No amounts have been dissolved in the profit and loss statement in the financial year 2011. There were no further taxes to be considered.
77 1 To Our Shareholders
6. Notes to the Financial Position 6.1 Property, plant and equipment Tangible assets primarily encompass operating and office equipment and IT infrastructure such as server systems. On 31 December 2011, the consolidated balance sheet showed tangible assets inventory amounting to kEUR 1,176 (2010: kEUR 769). Regular depreciation on tangible assets amounted to kEUR 328 for the financial year (2010: kEUR 245).
Impairment and extraordinary write-downs on tangible assets were not necessary in the financial year 2011. YOC AG committed itself to the purchase of fixtures added by tenants and office equipment amounting to kEUR 55 in the financial year 2011. The development of the tangible assets is as follows in the financial year 2011:
PPE
Acquisition costs as of 01.01.2010
1,738
Changes in the scope of consolidation
0
Additions
295
Disposals
126
Currency translation effects as of 31.12.2010
6 1,913
Depreciation as of 01.01.2010
1,013
Changes in the scope of consolidation
0
Additions
245
Disposals
115
Currency translation effects as of 31.12.2010 Net book vlaue as of 31.12.2010
1 1,144
2 The YOC Group
There were no restraints on disposal or restrictions for individual tangible assets. Likewise, no tangible assets were pledged or issued as security in any way.
Changes to property, plant and equipment (in kEUR)
769
Acquisition costs as of 01.01.2011
1,913
Changes in the scope of consolidation
7
Additions
734
Disposals
79
Currency translation effects as of 31.12.2011
3 2,578
as of 01.01.2011
1,144
Changes in the scope of consolidation
0
Additions
328
Disposals
72
Currency translation effects as of 31.12.2011 Carrying amounts as of 31.12.2011
2 1,402 1,176
3 Group Management Report
Depreciation
6.2 Goodwill The development of the goodwill is represented as follows: Goodwill (in kEUR) as of 01/01/2010
10,744 623
Disposals
8
Impairments as of 31/12/2010 Additions Disposals Impairments as of 31/12/2011
0 11,359 1,447 347 1,811 10,648
4 Consolidated Financial Statements
Additions
YOC Group
Annual Report 2011
The change of the goodwill in the financial year 2011 arose from the addition within the scope of the acquisition of MobilADdict SAS as well as the adjustment of the variable purchase price components using IFRS 3 which, at the time of the acquisitions in previous years, was mandatory to use (see also Chapter 4 â&#x20AC;&#x153;Acquisitionsâ&#x20AC;?).
Intangible assets (in kEUR)
At the end of the third quarter, goodwill was subject to an impairment test in accordance with IAS 36, in which impairment amounting to kEUR 1,811 was the result. Due to the focussing on the core business in the Mobile Technology segment, YOC Group abandoned side activities in the areas Mobile B2C Services as well as Mobile Messaging in the financial year 2011. The impairment of the goodwill amounts to kEUR 598 in the business unit Mobile B2C Services and kEUR 1,213 in the business unit Mobile Messaging.
Intangible assets with indefinite useful lives were allocated to individual cash generating units as follows:
To carry out the recoverability test, the goodwill was allocated to the cash generating units (reporting units) that are expected to profit from the synergies of the company acquisitions. These reporting units represent the lowest level at which the goodwill is monitored for management control purposes. They correspond to the Media segment as well as the business units Mobile Technology, Mobile B2C Services and Mobile Messaging. The impairment test involves determining the use value of the reporting units with the help of estimated future cash flows which are derived from the medium-term planning. The medium-term planning is based on experienced data relating to the past and considers market growth expectations for specific business segments. The medium-term planning horizon amounts to five years provided that the company is a going concern. Payment flows after this five year period are predicted using a growth rate of 2% (2010: 2%) which does not exceed the assumed average market growth of the respective reporting units. Discount rates are ascertained on the basis of the average weighted cost of capital usual in the industry and amount to 7.8% and 9.6% before tax for 2011 (2010: between 7.8% and 9.6%). The impairment tests did not lead to any other impairment requirements of the goodwill apart from the impairment stated above. The following table provides an allocation of the goodwill to the business segments: Goodwill (in kEUR) Mobile Technology Media Total
2011
2010
7,595
9,406
3,053
1,953
10,648
11,359
Intangible assets with indefinite useful lives Intangible assets with definite useful lives Total
Business segment
Cash-generating unit
Mobile Technology
Media
2011
2010
572
1,542
6,603
6,711
7,175
8,253
2011
2010
Websites (from the acquisition of Brutus Media GmbH)
0
911
Other websites
26
64
Other trademark rights
0
21
Trademark rights (from the acquisition of adbutler GmbH)
546
546
572
1,542
Total
The trademark adbutler was originally valued using the relieffrom-royalty method, as well as using the impairment test in subsequent years. A royalty rate of 1% (2010: 1%) was applied to trademark-relevant revenues. The discount rates for 2011 range from 7.8% to 9.6% before tax (2010: between 7.8% and 9.6%). Remarks concerning the method used to test the impairment of goodwill apply to the assessment of the website and trademark rights. The impairment test on 30 September 2011 indicated the need to impairment of the websites amounting to a total of kEUR 949 and of the trademark rights amounting to kEUR 21. Intangible assets impaired in value were used in the business units that are discontinued in the course of the business restructuring of YOC Group. The management estimated the recoverable amount of the websites and trademark rights concerned EUR 0 within the scope of the impairment test for the Mobile Messaging unit on 30 September 2011 so that the comparison with the book value of these assets led to full impairment. Apart from the impairment stated above, the impairment tests did not indicate any further need to recognise any impairment of intangible assets. The intangible assets with definite useful lives encompass the following items: (inâ&#x20AC;ŻkEUR) Self-developed software
6.3 Intangible assets
Software and licences
The inventory of intangible assets on 31 December 2011 amounting to kEUR 7,175 (2010: kEUR 8,253) consists of the following:
Customer bases Total
2011
2010
3,198
3,152
230
316
3,175
3,243
6,603
6,711
79
The customer bases amounting to kEUR 3,175 (2010: kEUR 3,243) include the customer bases acquired with the acquisitions of subsidiary companies.
There was impairment on capitalised self-developed software amounting to kEUR 554, on acquired software and licences amounting to kEUR 22 and on customer bases amounting to kEUR 1,336 in the financial year 2011.
Changes in intangible assets (in kEUR)
Self developed Software
There were no restraints on disposal or restrictions for individual intangible assets. Likewise, no intangible assets were pledged or issued as security in any way. The development of intangible assets is as follows:
Websites and trademark rights
Purchased software and licenses
Costumer bases
Total
10,187
2 The YOC Group
The scheduled depreciation of intangible assets amounted to kEUR 1,412 in the financial year (2010: kEUR 1,079).
The need for impairment resulted from the strategic decision of YOC Group to abandon the business units Mobile B2C Services and Mobile Messaging in the financial year 2011. The impairment percentage with regard to capitalised software and customer bases allocated to these business units amounts to kEUR 1,063 for the business unit Mobile B2C Services and kEUR 1,280 for the business unit Mobile Messaging. Furthermore, software and trademarks that are not used in the planned product portfolio and will therefore not generate any economic use for YOC Group amounting to kEUR 201 in the Mobile Technology segment and kEUR 338 in the Media segment were subject to extraordinary depreciation.
1 To Our Shareholders
The software components which have already been completed and amounted to a production cost of kEUR 3,198 (2010: kEUR 3,152) are subject to scheduled depreciation linearly over a useful life period of between 3 and 8 years. As of 31 December 2011, the remaining useful lives were between 2.75 and 5.75 years (2010: between 3.75 and 6.75 years).
Acquisition costs As of 01.01.2010
903
4,814
0
0
0
0
Additions
1,131
4
124
0
1,259
Disposals
0
0
7
0
7
Currency translation effects
0
0
0
42
42
4,063
1,542
1,020
4,856
11,481
436
0
578
1,137
2,151
0
0
0
0
0
Additions
475
0
130
473
1,078
Disposals
0
0
4
0
4
Currency translation effects
0
0
0
3
3
911
0
704
1,613
3,228
3,152
1,542
316
3,243
8,253
4,063
1,542
1,020
4,856
11,481
0
0
3
1,808
1,811
Additions
1,357
0
34
0
1,391
Disposals
0
0
0
0
0
Currency translation effects
0
0
0
20
20
5,420
1,542
1,057
6,684
14,703
911
0
704
1,613
3,228
0
0
0
0
0
757
0
101
554
1,412
As of 31.12.2010 Amortisation and impairments As of 01.01.2010 Changes in the scope of consolidation
As of 31.12.2010 Carrying amount as of 31.12.2010 Acquisition costs per 01.01.2011 Changes in the scope of consolidation
As of 31.12.2011 Amortisation and impairments As of 01.01.2011 Changes in the scope of consolidation Additions Disposals Impairment Currency translation effects
0
0
0
0
0
554
970
22
1,336
2,882
0
0
0
6
6
As of 31.12.2011
2,222
970
827
3,509
7,528
Carrying amount as of 31.12.2011
3,198
572
230
3,175
7,175
4 Consolidated Financial Statements
1,538
0
3 Group Management Report
2,932
Changes in the scope of consolidation
YOC Group
Annual Report 2011
6.4 Financial Investments
Post-due trade receivables (in kEUR)
Until 31 December 2010, the financial assets accounted for YOC AG‘s equity investment of kEUR 1 in the company selfloading content GmbH which was acquired in the financial year 2007. The equity investment was fully impaired due to the reorientation of the core business as of 30 September 2011.
up to 30 days*
2011
2010
7,956
6,320
31 days to 90 days
361
715
91 days to 180 days
163
234
from 181 days
100
150
Value-adjusted receivables mature as of 31/12/2011
377
184
8,957
7,603
6.5 Prepayments made
Total trade receivables
As of 31 December 2011, YOC Group made prepayments amounting to kEUR 140 (2010: kEUR 106) which were for insurances, annual subscriptions, advance rent payments and licenses, among other things. Expenditures before the financial statement closing date which lead to expenses for a specific period after the financial statement closing date are included under advance payments made.
*Of these, receivables amounting to kEUR 6,988 are neither due nor impaired on 31/12/2011 (2010: kEUR 4,920)
There were no restraints on disposal or restrictions on advance payments made. Likewise, advance payments were neither pledged nor issued as security in any way.
6.6 Trade receivables and other receivables Trade accounts receivable amounted to kEUR 8,606 (2010: kEUR 7,433) on 31 December 2011. They consist of the following: Trade receivable (in kEUR)
2011
2010
Trade receivable
8,957
7,603
Before allowance
8,957
7,603
-351
-170
8,606
7,433
Bad debt allowance Total
The write-downs that have been formed on trade have changed as follows: Change of bad debt allowance (in kEUR)
2011
2010
As of 01/01/
170
49
Additions
321
155
Reversal
-10
-19
Utilisation
-130
-15
As of 31/12/
351
170
The management of receivable accommodates a balanced age structure of receivables by continuously analysing the amount of receivables. Trade receivable older than 60 days are subject to a detailed analysis. If the need for specific provisions is indicated already earlier, the respective trade receivable are accordingly impaired. The following table shows the analysis of the age structure of receivables which are recorded in the balance sheet on the end of period date:
No securities have been issued for trade accounts receivable or for other assets. The item “trade receivable” contains receivables from uncompleted projects amounting to kEUR 389 (2010: kEUR 0) valued on the basis of the degree of completion using the percentage-of-completion method as of the closing date. The item “other receivables” amounting to kEUR 174 (2010: kEUR 156) mainly includes receivables against tax offices concerning other taxes, employees, statutory health insurances as well as deposits paid. As in the previous year, impairments on other assets did not appear. All trade receivables and other receivables encompass short-term items. There were no particular non-payment risks or concentrations of non-payment risks for the receivables of YOC Group, as in the previous year. The book values represented above reflect the maximum non-payment risk of the group with regard to such receivables and assets.
6.7 Securities YOC Group held securities with a fair value of kEUR 27 (2010: kEUR 13) as of 31 December 2011.
6.8 Cash and Cash Equivalents Cash and cash equivalents encompass all bank and cash assets and short-term fixed term deposits amounting to a total of kEUR 1,571 (2010: kEUR 5,175). On the balance sheet date, the credit balances held with various banks were earning interest rates of between 0% and 1.4%. Bank accounts which are held in a foreign currency were converted using the end-of-period exchange rate. On 31 December 2011, no cash assets had been pledged as security. To counter the risk of liquidity, YOC Group uses a liquidity forecast for the entire group based on a fixed planning horizon.
81
In the year under review, YOC AG implemented a capital increase amounting to 28,000 bearer shares with a nominal value of the share capital of EUR 1 per share within the scope of the acquisition of MobilADdict SAS. The new shares were issued at EUR 35.04 per share. Therefore, the number of shares of the company has increased from 1,887,000 to 1,915,000. 4,000 of the 1,915,000 shares with a nominal value of the share capital of EUR 1.00, have been kept by YOC AG as own shares (see explanations below). The recognition of this is an one-line-adjustment under the balance item “own shares in shareholders‘ equity”.
The following table shows the shareholder structure of YOC AG as of 31 December 2011: Shareholders in YOC AG Management Board
Shares in % 20.19%
DIH Deutsche Industrie Holding GmbH*
12.98%
Schwetje Invest GmbH**
11.41%
Fidelity Funds SICAV
9. 35%
dkam GmbH***
6.78% 6.27%
IPConcept Fund Management S.A.
4 . 67 %
Management
1.07%
YOC AG (treasury stock) Free float Total
New subscription rights may be granted within the limits of the total volume for subscription rights which have expired due to cancellations. In the event of a takeover bid for the shares of YOC AG in accordance with Sect. 29, 35 German Securities Acquisition and Takeover Act (WpÜG), the subscription rights can be exercised within an additional exercise period as long as the statutory waiting period of two years is still observed.
0.21% 27.07% 100.00%
* The stake in DIH Deutsche Industrie Holding GmbH is allocated to Mr Peter Zühlsdorff. **The stake in Schwetje Invest GmbH is allocated to Mr Michael Schwetje. ***Sole shareholder and Managing Director of dkam GmbH is Mr Dirk Kraus. rr Dirk Kraus.
As early as in the financial year 2009, contingent capital was created so that subscription rights within the framework of the share option programme could be granted to the management and employees of the company and their affiliates for the first time.
On 31 December 2011, the weighted average remaining term amounted to 1.25 years. The weighted average fair value of the options on the balance sheet date amounted to EUR 5.17.
4 Consolidated Financial Statements
Of the total volume of 175,000 subscription rights, 115,500 shares, i.e. up to 66% of the total volume, may be granted to members of YOC AG‘s Management Board. A total of 59,500 shares, i.e. up to 34% of the total volume, may be granted to employees of YOC AG and employees of affiliates. Each subscription right entitles the holder to purchase one share in YOC AG at the exercise price.
In the business year 2011, 139,090 subscription rights (2010: 150,465 units) at an exercise price of EUR 13.25 and a fair value of EUR 4.12, 5,000 subscription rights (2010: 5,000 units) at an exercise price of EUR 32.50 and a fair value of EUR 11.24, 2,875 subscription rights (2010: 2,875 units) at an exercise price of EUR 35.90 and a fair value of EUR 12.45 and 18,625 subscription rights (2010: 0 units) at an exercise price of EUR 27.00 and a fair value of EUR 10.24 were granted to the employees and management of the company and its affiliates. No subscription rights were exercised during the financial year and no subscription rights were exercisable as of 31 December 2011. During the financial year 2011, 11,375 subscription rights expired and were completely reassigned in the following granting negotiations. A total of 18,625 subscription rights were reassigned in the financial year 2011.
3 Group Management Report
Ruffer Investments LLP
Exercising the subscription rights is therefore linked to an increase in the YOC share‘s stock market price of at least 15% in the third year following the granting of the subscription rights, at least 20% in the fourth year and at least 25% in the fifth year. In addition, the person exercising their rights must have been continuously employed by YOC AG or an affiliate since the subscription rights were granted. The right to exercise the subscription rights remains intact if the employment contract is terminated due to long-term illness, inability to work, retirement or the employment contract is mutually terminated or is terminated due to parental leave.
2 The YOC Group
With the approval of the Supervisory Board, the Management Board may have an approved capital of kEUR 944 until 5 June 2016 at its disposal. The approved capital can be used on one or more occasions to increase the share capital by issuing new bearer shares.
The exercise price corresponds to 100% of the unweighted average Xetra closing rate of YOC shares in the last eight trading days before the beginning of the subscription period in which the subscription rights are granted, but not less than the closing price of the share on the date when the subscription rights are granted. The subscription rights may only be exercised during specific exercise periods, at the earliest however, three years after they have been granted, and at the latest in 2017.
1 To Our Shareholders
6.9 Equity
YOC Group
Annual Report 2011
The fair value of the share options was ascertained by means of a Monte-Carlo-Simulation, taking the following assumptions as a basis: Options September 2011
Options August 2010
Expected dividend yield
0%
0%
0%
0%
Riskless assets interest rate
0.97%
1.23%
1.43%
2.40%
Vesting period
3.3 years
3.3 years
3.3 years
3.3 years
45%
40%
40%
35%
Volatility
Options Mai 2010
Options September 2009
The volatility was ascertained in previous years using historical changes in share prices of a group of companies which are comparable with YOC AG. On 31 December 2011, additional paid-in-capital includes an amount of kEUR 15,014 (2010: kEUR 13,559). The change of additional paid-in-capital on the one hand results from the collection of a premium from the increase in capital less the costs attributable to this totalling kEUR 941 as well as the issue of a total of 17,000 own shares amounting to kEUR 352. On the other hand, the capital reserve includes liabilities amounting to kEUR 161 (2010: kEUR 138) as part of the share option programme in accordance with IFRS 2. The retained earnings amounted to kEUR -5,955 on 31 December 2011 (2010: kEUR 1,925). The changes in reserves are shown in the statement of changes in equity. In the financial year 2011, the stock of own shares was reduced due to the granting of 10,000 own shares as part of the acquisition of MobilADdict SAS to the sellers as well as the granting of 7,000 own shares due to the transfer as earn out component to the seller of YOC Spain, S.L. YOC AG held 4,000 shares valued at an average of EUR 12.56 in their own equity on 31 December 2011.
6.10 Provisions The provisions consisted of the following: Provisions (in kEUR)
As of 01/01/2011
Drawdown Closing
Allocation
As of 01/01/2011
Archiving provisions
33
0
5
11
39
Lawsuit provisions
35
35
0
8
8
Other provisions
28
28
0
153
153
96
63
5
172
200
Total
On 31 December 2011, YOC Group had provisions amounting
to a total of kEUR 200 (2010: kEUR 96). Of this amount, kEUR 39 (2010: kEUR 33) is classified as non-current. The item â&#x20AC;&#x153;noncurrent provisionsâ&#x20AC;? contains archive provisions amounting to kEUR 39 (2010: kEUR 33), which result from the obligation to maintain company documents. The amount of kEUR 161 (2010: kEUR 63) is classified as current. Current provisions include provisions for legal disputes amounting to kEUR 8 (2010: kEUR 35). Other provisions amounting to kEUR 153 include provisions for value added tax from previous years including interest amounting to kEUR 66 (2010: kEUR 28) and interest on income taxes from previous years amounting to kEUR 12. Moreover, there were provisions for an obligation amounting to kEUR 75 for bonus payments within the scope of the acquisition of MobilADdict as of 31 December 2011.
6.11 Liabilities On 31 December 2011, liabilities of YOC Group totalled kEUR 18,834 (2010: kEUR 15,065). They encompass advance payments received, trade accounts payable, financial and fiscal liabilities and tax liabilities, other liabilities and other financial liabilities. On 31 December 2011, trade accounts payable amounted to kEUR 4,379 (2010: kEUR 2,496). Other liabilities totalling kEUR 6,749 (2010: kEUR 4,596) on 31 December 2011 included non-current liabilities amounting to kEUR 6,646 (2010: kEUR 4,596). They are broken down as follows:
83
Total
2011 thereof short-term
Total
2010 thereof short-term
3,733
3,733
2,670
2,670
Liabilities personnel matters
1, 673
1, 673
1,120
1,120
646
646
590
590
Liabilities to supervisory boards
78
78
56
56
Liabilities operating leasing
18
18
42
42
601
498
118
118
Total
6,749
6,646
4,596
4,596
Liabilities arising from personnel matters cover liabilities concerning personnel, for example, from bonus and provision claims defined on an accrual basis, which amounted to kEUR 972 (2010: kEUR 790), liabilities for holidays not taken amounting to kEUR 116 (2010: kEUR 100) and liabilities concerning authorities amounting to kEUR 294 (2010: kEUR 227), such as liabilities from payroll and church taxes, liabilities concerning the occupational insurance association and liabilities for compensation levy for the non-employment of the severely handicapped.
the financial year 2011 as well as liabilities from delineated sales revenues from the sale of licences. Moreover, the item includes liabilities amounting to kEUR 127 from a granted building cost subsidy for the office premises of YOC AG; kEUR 103 thereof were recorded as non-current other liability in the balance sheet. Remaining other current liabilities include liabilities for year-end closing and auditing costs of YOC AG amounting to kEUR 115 (2010: kEUR 95).
Liabilities sales tax
Other liabilities
The item â&#x20AC;&#x153;remaining other liabilitiesâ&#x20AC;? mainly includes liabilities from excess payments of customers amounting to kEUR 286 in
Of other financial liabilities amounting to kEUR 1,995 (2010: kEUR 1,024) on 31 December 2011, kEUR 213 (2010: kEUR 600) is non-current and kEUR 1,781 (2010: kEUR 424) is current. 2011 thereof short-term
Total
2010 thereof short-term
1,122
1,122
0
0
Liabilities variable purchase prices
626
465
740
396
Negative market value derivates
102
102
235
0
Liabilities financial leasing
145
92
49
28
Total
1,995
1,781
1,024
424
Financial liabilities cover variable purchase price components and liabilities arising from finance leasing in addition to liabilities which result from the balancing of interest rate swaps for fair value amounting to kEUR 102 (2010: kEUR 235).
for ongoing projects amounting to kEUR 729.
Liabilities percentage-of-completion method
Moreover, liabilities from the application of the percentage-ofcompletion method amounting to kEUR 1,122 were recorded as of 31 December 2011. They include advance payments received Financial liabilities (inâ&#x20AC;ŻkEUR) Long-term loan
thereof short-term Long-term loan thereof short-term Loan thereof short-term Total
Drawdown
Interest rate
Maturity
1,595
Euribor +1.0 %-points
biannual amortisation until 30/09/2013
Euribor +1.5 %-points
quarterly amortisation until 31/01/2015
6.60%
quarterly amortisation until 30/06/2014
Euribor +1.2 %-points
quarterly amortisation until 29/02/2012
1,595 813 813 625 625 93 93 3,126
4 Consolidated Financial Statements
thereof short-term Long-term loan
The financial debts as of 31 December 2011 which total kEUR 3,126 (2010: kEUR 4,833) include non-current liabilities to financial institutes amounting to kEUR 0 (2010: kEUR 2,215) and current liabilities to financial institutes amounting to kEUR 3,126 (2010: kEUR 2,618).
3 Group Management Report
Total
Other financial liabilities (in kEUR)
2 The YOC Group
Liabilities purchase invoices not received
1 To Our Shareholders
Other liabilities (in kEUR)
YOC Group
Annual Report 2011
YOC Group did not meet the financial covenants of the lending banks as of 31 December 2011. Thus, the non-current percentage of loans concerned has to be recorded as current in accordance with IAS 1.74. At the time of the preparation of the consolidated financial statements, YOC Group expects that the lending banks will not request early repayment of the loans. The lenders declared a respective waiver of the right of termination towards YOC Group after the balance sheet date and before the completion of the annual financial statements in writing (see Section 9.2 Events after the balance sheet date). In the first quarter of 2011, a loan of kEUR 1,000 was taken out to finance the acquisition of MobilADdict SAS. The loan has been and will be repaid quarterly since the end of April 2011 at amounts of kEUR 63 until 31 January 2015. In the financial year 2011, the loan that was taken out to finance the acquisition of Sevenval GmbH was extended and provided with half-yearly repayments at a rate of kEUR 400. The term of the loan is extended by half a year and will end on 30 September 2013. The special repayment amounting to kEUR 500 agreed in the financial year 2011 was due in the first quarter of 2011 as a result of the successful capital increase in 2010. Due to the credit agreements that YOC AG concluded in the financial years 2007 and 2008, the company agreed an interest rate hedge covering 100% of the respective credit volume with the help of two interest rate swaps on the date that the credit agreements were concluded. The interest rate swaps expire on 30 September 2012 and 29 February 2012 respectively. The interest rate swaps lead to economic interest rates of 5.48% (2010: 5.48%) for the loan amounting to kEUR 93 (2010: kEUR 465) as well as 5.30% (2010: 5.30%) for the long-term loan amounting to kEUR 1,595 (2010: kEUR 3,493). No adjustment to the agreements regarding interest rate swaps was undertaken due to the adjustment and extension of halfyearly repayments of the loan which was taken out in 2007 to cover the acquisition of Sevenval GmbH, resulting in mismatched maturities and extra security of the loan. There is only a negligible risk of changes in interest for all of the loans. These are not recognised for hedging relationships.
subject to an interest rate of 5.75% per annum. The credit line was not made use of as of 31 December 2011. On the whole, liabilities towards financial institutions were reduced by kEUR 1,707 (2010: kEUR 1,142) during the financial year.
6.12 Other liabilities On 31 December 2011, there were financial obligations for outstanding leasing instalments for office space, operating and office equipment and vehicle leases. Of the leasing obligations from operating leases, the following is to be achieved in the coming years: Other financial liabilities (in kEUR) Up to 1 year 1-5 years More than 5 years Total
YOC AG has a credit line amounting to kEUR 1,000 from the commercial bank at its disposal, the drawdown of which is
2010
464
183
1,439
1,400
29
346
1,932
1,929
The new lease agreement for the business premises of YOC AG was signed in the financial year 2011. The minimum term of the lease agreement is five years and ends on 31 January 2017. Other financial obligations include the resulting future obligation. Furthermore, financial liabilities from minimum lease durations for the business premises of the groupâ&#x20AC;&#x2DC;s subsidiaries YOC Mobile Advertising Ltd. and YOC Ltd. as well as YOC Spain for a maximum of twelve months were included. In the financial year 2011, minimum leasing payments from operating leases of YOC Group amounted to kEUR 260 and conditional lease payments amounted to kEUR 221 (2010: kEUR 435) recognised in profit or loss. There were no lease commitments pursuant to IFRIC 4. Furthermore, on 31 December 2011, the company had commitments under finance lease agreements for tenant improvements, office equipment and hardware with maturities of 5 years in total. Of the commitments from finance lease agreements totalling kEUR 158 (2010: kEUR 77) the following is to be achieved in the next years: Minimum lease payments (in kEUR) Up to 1 year
On 31 December 2011, the respective fair values of the interest rate swaps amounted to kEUR -101 (2010: kEUR -224) and kEUR -1 (2010: kEUR -11). The change in fair values was recorded through profit and loss.
2011
1-5 years more than 5 years Total
2011
2010
105
44
53
33
0
0
158
77
The present value of the minimum lease payments is shown in the following table:
85
2011
2010
Up to 1 year
92
28
1-5 years
53
21
more than 5 years Total
0
0
145
49
The fair value of the commitments under finance lease agreements essentially corresponds to the book value. Lending and similar forms of financing did not apply in the business year 2011.
6.13 Government grants
The minimum lease payments can be reconciled with the present value as follows: Offsetting and reconciliation (in kEUR)
31.12.2010
158
77
- Future financing cost
-13
-28
= Present value minimum lease payment
145
49
In the financial year 2011, the company received public grants amounting to kEUR 52 for the development of a mobile application from the Federal State of North RhineWestphalia.
6.14 Other disclosures to financial instruments
The commitments under finance lease agreements are included under the following balance sheet items: Lease obligations (in kEUR)
31.12.2011
31.12.2010
Short-term financial obligations
92
28
Long-term financial obligations
53
21
145
49
Total
The following table shows the book values and fair values of the financial assets and liabilities reported in the consolidated financial statements and their breakdown in accordance with IAS 39:
Financial instruments recognised at fair value
Held for trading
Financial instruments recognised at amortised cost
Financial Fair assets Value available for Option sale
Loans and receivables Book value
Fair value
8,606
8,606
28
28
1, 571
1, 571
Investments Trade receivable Other receivables
Financial assets available for sale Book value
Fair value
0
0
Non-financial assets/ Financial liabilities obligations Book value
0 8,606 146
27
Cash and cash equivalents
Total
Fair value
174 27 1,571
Loans
3,126
3,105
3,126
Trade liabilities
4,379
4,379
4,379
Other liabilities
5,679
5,684
thereof derivates with no financial hedge relationship
2,818
102
8,744
thereof finance-leasing obligations
145
3 Group Management Report
2011
Securities
2 The YOC Group
31.12.2011
Minimum lease payment at settlement day
1 To Our Shareholders
Present value minimum lease payments (in kEUR)
144
2010 Investments
1
Trade receivable
7,433
Other receivables
1
1
7,433
7,433
13
13 156
Cash and cash equivalents
5,175
5,175
5,175
Loans
4,833
4,810
Trade liabilities
2,496
2,496
740
740
Other obligations thereof derivates with no financial hedge relationship thereof finance-leasing obligations
156
235
4,833 2,496 4,596 5,620
49
49
4 Consolidated Financial Statements
Securities
YOC Group
Annual Report 2011
The current market value of the derivative financial instruments and the securities is ascertained on the basis of market-driven, directly deducible values (level 2 of the Fair Value Evaluation). The financial assets in the category “designated as available for sale” were evaluated on the basis of acquisition costs when there was no market value in the previous year. The fair value of non-current liabilities towards credit institutions was determined on the basis of the discounted-cash-
flow method and the 3-month Euribor as of 31 December 2011 (level 3 of the Fair Value Evaluation). On the reporting date, the book values of the remaining financial assets and debts concur almost exactly with the current market values. The following table shows the future, non-discounted, contractually agreed cash outflows in relation to the financial instruments: Undiscounted cash outflow
Book value as of 31/12/2011
Up to 1 year
1 to 5 years
more than 5 years
Liabilities financial institutions
3,126
4,156*
0
0
Other liabilities
6,749
6,646
0
0
102
102
0
0
Other financial liabilities
1,893
1,786
221
0
Trade accounts payable
4,379
4,379
0
0
Book value as of 31/12/2010
Up to 1 year
1 to 5 years
more than 5 years
Liabilities financial institutions
4,833
2,768
2,220
0
Other liabilities
4,596
4,596
0
0
Financial derivates
235
78
157
0
Other financial liabilities
789
443
377
0
2,496
2,496
0
0
Maturity analysis (in kEUR)
Financial derivates
* this includes the credit line amounting to kEUR 1,000 that was not made use of as of 31 December 2011.
Trade accounts payable
Due to the beach of the financial covenants of the lending bank, the non-current percentage of the loan is recognised as current. For this reason, the long-term repayment rates of the loans are categorised under “maturity of up to one year”. The YOC Group has a group-wide cash management system with which the liquidity of the group companies is monitored on a daily basis.
On 31 December 2011, as in the previous year, the maximum contingency risk was equal to the book value of all assets. The revenues and expenditures as well as profits and losses from financial instruments which are recorded in the profit and loss statement are presented in the table below:
2011 Profits, losses, revenues and expenditures from financial instruments (in kEUR)
2010
Net profit/-loss
Total interest yield and expenditure
Net profit/-loss
Total interest yield and expenditure
Credits and receivables (including means of payment and credit with credit institutions)
-284
0
-200
0
Financial liabilities valued at the fair value
-265
-48
-343
-39
133
0
75
0
-416
-48
-468
-39
Financial instruments valued at the fair value affecting the net income Total
The net result in accordance with the IFRS 7.20 (a) incorporates, for the most part, interest for liabilities towards credit institutions, value adjustments of payables and results from the evaluation of the financial instruments at the fair value.
Total interest result in accordance with IFRS 7.20 (b) contains, for the most part, the interest expenditures resulting from the implementation of effective interest methods as well as interest expenditures from lease liabilities.
87
7.1 Cash flow of the individual activities Operating cash flow The operating cash flow is determined using the indirect method. The starting point for determining the operating cash flow is the profit after taxes of the financial year, the amount of which is kEUR -7,881 (2010: kEUR 671).
Cash flow from investment activities Cash flow from investment activities for the financial year amounted to kEUR -2,919 (2010: kEUR -2,467). The acquisition of property and intangible assets resulted in a cash outflow of kEUR -545 in the financial year 2011 (2010: kEUR -354). Further cash outflows amounting to kEUR -1,357 (2010: kEUR -1,131) were the result of software development.
Components of the transactions not affecting payments were eliminated. Cash flow from financing activities The capital increase from financing activities amounting to kEUR -1,774 (2010: kEUR 3,222) in the financial year 2011 mainly results from the repayment of liabilities to banks amounting to kEUR -1,720 (2010: kEUR -1,145).
7.2 Cash and cash equivalents Cash and cash equivalents is comprised of cheques, cash assets and bank deposits as well as short-term financial investments with a maturity of up to 90 days which have only a slight value fluctuation risk. On 31 December 2011, cash and cash equivalents amounted to kEUR 1,571 (2010: kEUR 5,175). Furthermore, the first-time consolidation of MobilADdict SAS, Paris, acquired in March 2011 led to a cash inflow amounting to kEUR 421.
3 Group Management Report
The acquisition of the French mobile advertising provider MobilADdict SAS as well as variable purchase price obligations
for belboon-adbutler GmbH as well as YOC Spain, S.L. led to cash outflows of kEUR -1,017.
2 The YOC Group
The operating cash flow amounting to kEUR 676 (2010: kEUR 1,593) contains all transactions for the financial year affecting payment which cannot be attributed to investment or financing activities.
1 To Our Shareholders
7. Notes to the Cash Flow Statement
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
8. Notes to the statement of Changes in Equity In addition to the annual net loss of kEUR 7,881, which was added to retained earnings, the following items had an effect on the change of the shareholders‘ capital:
name of the holder at an offering price of EUR 35.04 per share led to an increase of the capital reserve by kEUR 953; the directly attributable costs of the capital increase amount to kEUR 12.
Currency translation effects from the consolidation of the foreign subsidiaries, YOC Mobile Advertising Ltd. and YOC Ltd., led to an increase in shareholders‘ capital amounting to kEUR 11 (2010: kEUR 62).
10,000 own shares were transferred to the sellers as earn out component within the scope of the acquisition of MobilADdict SAS, which led to an increase of additional paid-in capital by kEUR 225. Moreover, the capital reserve was increased by kEUR 127 due to the transfer of 7,000 own shares agreed with the seller of the company as conditional earn out component within the scope of the acquisition of YOC Spain, S.L.
The appropriation of personnel expenses within the scope of the share option programme led to an increase in the capital reserve by kEUR 161 (2010: kEUR 138). The capital increase executed in the second quarter of the financial year with the issue of 28,000 no-par value shares in the
9. Other disclosures 9.1 Guarantees, contingent liabilities and similar obligations
9.2 Events after the balance sheet date
The guaranty amounting to kEUR 50 provided by Commerzbank for YOC Group to the lessor within the scope of the lease contract for the business premises of YOC AG was increased by kEUR 50 to kEUR 100 as of 1 February 2012 due to the agreement on the lease of the double renting space.
YOC Group could not meet the financial covenants of the lending bank as of 31 December 2011. However, the lenders waived their right of termination resulting from the breach of the financial covenants after the balance sheet date and before the publication of the consolidated financial statements in writing until the presentation of the consolidated financial statements 2012.
Due to YOC Group‘s business model, no contracts or warranties are usually concluded which would establish long-term contingencies, guarantees or other warranties and obligations. There are no other contingent liabilities.
In March 2012, the term for a loan (remaining debt as of 31 December 2011: kEUR 1,595) was extended by six months until 31 March 2014 and a credit instalment due in 2011 was deferred. There were no further events which could have had a signi-
89 1 To Our Shareholders
ficant effect on the net assets, financial position and results of operations of YOC Group after the balance sheet date.
9.3 Report on risks and opportunities
scope of the YOC Management Incentive Programme. In the financial year 2011, further 16,625 stock options with a fair value at the time of granting of kEUR 170 were granted. In the financial year 2011, kEUR 573 (2010: kEUR 480) was the total amount paid to the Management Board as ongoing remuneration. Moreover, kEUR 108 of the variable remuneration granted in the previous year affected payments in the financial year 2011.
9.4 Related party disclosures
The following table shows the breakdown of the remuneration for each member of the Management Board:
Under IAS 24, related companies and persons include members of the Management Board and of the Supervisory Board of YOC AG and their family members as well as companies managed by these persons. Furthermore, persons in key positions and their close family members, i.e. members of the management, are considered related parties.
9.5 Remuneration of the Supervisory Board and the Management Board Remuneration of the Management Board The Management Board in the financial year 2011: Dipl.-Kfm. Dirk Kraus, Chief Executive Officer since December 2005 Businessman Alexander Sutter, since July 2008 Fully qualified lawyer Jan Webering, since July 2008 Dipl.-Kfm. (FH) Joachim von Bonin, since June 2011 Dipl.-El-Ing. Patrick Feller, MBA, since September 2011
Variable remunertion (in kEUR)
Options granted (in units) in 2009 and 2011
Dirk Kraus (Chief Executive Officer)
170
0
32,655
Alexander Sutter
160
0
32,655
Jan Webering
150
0
32,655
93
0
16,625
Joachim von Bonin Patrick Feller Total
47
0
0
620
0
114,590
As an additional benefit of his contract, Mr. Jan Webering receives a company car for both professional and private use. Other than this no advances, loans, bailouts, pension promises or similar benefits were granted to the Management Board. Remuneration of the Supervisory Board The remuneration of YOC AG‘s Supervisory Board consists of a fixed remuneration amounting to kEUR 38 in total (2010: kEUR 38). The following table shows the breakdown of the remuneration for each member of the Supervisory Board: Remuneration of the Supervisory Board Name
Fixed remuneration (in kEUR)
Gerd Schmitz-Morkramer (Chairman of the Supervisory Board)
19
Peter Zühlsdorff
11
Michael Schwetje (until 6 June 2011)
3
Patrick Feller (7 June until 5 September 2011)
2
Oliver Borrmann (from 6 September 2011)
3
Total
38
4 Consolidated Financial Statements
The remuneration of the Management Board of YOC AG encompasses a fixed salary component totalling kEUR 620 (2010: kEUR 480) in the financial year 2011. There was no variable component based on the operating result of YOC Group in the current financial year (2010: kEUR 108). In the financial year 2011, the Management Board received 97,965 stock options with a fair value at the time of granting of kEUR 403 within the
Name
Fixed remunertion (in kEUR)
3 Group Management Report
An agreement on architectural services within the scope of the expansion of YOC AG‘s leased business premises with an order volume of kEUR 24 was concluded between YOC AG and MSM Meyer Schmitz-Morkramer. As of 31 December 2011, YOC AG has liabilities towards MSM Meyer Schmitz-Morkramer amounting to kEUR 18. With the exception of the business transaction stated above and the following remuneration of the Supervisory Board and the Management Board, no related party transaction took place in the financial year 2011. There were no business transactions within the meaning of IAS 24 in the previous year.
Remuneration of the Management Board (in kEUR)
2 The YOC Group
Information on company and industry-specific as well as financial risks of YOC Group and their management is stated in the risk report of the Group Management Report, which forms part of the Annual Report 2011 and is subject to being audited.
YOC Group
Annual Report 2011
No advances, loans, bailouts, pension promises or similar benefits were granted to the Supervisory Board. Likewise, other than their Supervisory Board activities, the Supervisory Board members did not perform any advisory or referral services for YOC Group.
9.6 Auditor‘s fees The following fees were accrued for the services performed by the auditor Ernst & Young: Auditor‘s fees
2011
2010
Annual audit
91
80
Other confirmation services
15
0
106
80
Total
Dirk Kraus CEO of YOC AG
Jan Webering Management Board of YOC AG
9.7 Declaration of Conformity with the German Corporate Government Code The Declaration of Conformity with the German Corporate Government Code (Deutsche Corporate Governance Kodex) in accordance with Sect. 161 Stock Corporation Act (AktG) was issued by the Management Board and the Supervisory Board and was made accessible to YOC AG‘s shareholders on the website www.yoc.com in the “investor relations” section. Berlin, 27 March 2012 The Management Board
Alex Sutter Management Board of YOC AG
Patrick Feller Management Board of YOC AG
Joachim von Bonin CFO of YOC AG
Statement of Responsibility made by the Management Board (Pursuant to Sect. 37y No. 1 Securities Trading Act (WpHG) in conjunction with Sect. 297 Para. 2 Sent. 4 and Sect. 315 Para. 1 Sent. 6 German Commercial Code (HGB)) To the best of our knowledge we assure that the consolidated financial statements conveys a true and fair view of the net assets, financial position and results of operations of the group according to the applicable accounting principles and the conduct of business including the business results and the situation of the group are
Dirk Kraus CEO of YOC AG
Jan Webering Management Board of YOC AG
described in the Group Management Report so as to convey a true and fair view of the facts and circumstances as well as the material risks and opportunities of the group‘s probable development. Berlin, 27 March 2012
Alex Sutter Management Board of YOC AG
Patrick Feller Management Board of YOC AG
Joachim von Bonin CFO of YOC AG
91
We have issued the following opinion on the consolidated financial statements and the group management report:
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs as adopted by the EU, the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future development.“ Berlin, 28 March 2012 Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft Dr. Röders Wirtschaftsprüfer German Public Auditor
Klemm Wirtschaftsprüfer German Public Auditor
3 Group Management Report
We conducted our audit of the consolidated financial statements in accordance with Sec. 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the
Our audit has not led to any reservations.
2 The YOC Group
„We have audited the consolidated financial statements prepared by YOC AG, Berlin, comprising the statement of financial position, the income statement, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows and the notes to the consolidated financial statements, together with the group management report for the fiscal year from 1 January to 31 December 2011. The preparation of the consolidated financial statements and the group management report in accordance with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB [„Handelsgesetzbuch“: „German Commercial Code“] are the responsibility of the parent company’s management. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit.
accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion.
1 To Our Shareholders
Audit Opinion
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
Management Board The Management Board was composed as follows in the financial year 2011 (as of 31 December 2011): Dirk Kraus Dirk Kraus founded YOC AG in 2001 and was appointed Chairman of the Management Board in December 2005. He is responsible for M&A, corporate development as well as the business segment Media. The business graduate completed an apprenticeship at Deutsche Bank AG in Frankfurt and then underwent a business administration degree at the Otto Beisheim School of Management (WHU) in Koblenz, where he majored in corporate finance, marketing and international
business. During his degree course, he studied at Universities in France, Denmark and the USA. His further professional development then took him abroad where his work focused on the restructuring and strategic reorientation of companies. Following his work as a senior consultant at Roland Berger Strategy Consultants, Dirk Kraus founded YOC AG in Berlin with a partner.
Alex Sutter In July 2008, Alex Sutter was appointed to the Management Board of YOC AG and in this position he is responsible for the business segment Mobile Technology in close cooperation with Jan Webering. Since 2006 he has held the position of Managing Director and been in charge of the product segment Mobile Marketing. Prior to this, he was in charge of acquisition and
key account management. He has been a member of the company management team since the company was founded in 2001. Before joining YOC, Alex Sutter worked for Fidelity Investment Services based in Frankfurt on Main, where he was responsible for building and maintaining customer relations.
Jan Webering In July 2008, Jan Webering was appointed to the Management Board of YOC AG and in this position he is responsible for the business segment Mobile Technology in close cooperation with Alex Sutter. In his previous position as CEO of Sevenval AG, Jan Webering was responsible for sales, marketing and professional services. Before Sevenval was founded, Jan Webering
managed several companies, including the internet consultancy company net-consulting. Prior to this, he graduated from the University of Cologne with a degree in law. Since YOC AG acquired Sevenval in September 2007, Jan Webering has continued to successfully manage the company.
Joachim von Bonin Joachim von Bonin was appointed CFO of YOC AG in June 2011 and is in charge of finances and controlling, human resources as well as central purchasing. Since joining the company in June 2010, Joachim von Bonin has been the Business Administration Manager of YOC Group. After completing his studies in business informatics and several stays abroad in the USA, Mexico and Spain, Joachim von Bonin spent several years working for the KPMG
Patrick Feller Patrick Feller was appointed to the Management Board of YOC AG in September 2011. He is responsible for organisation, strategy, strategic human resources development and change management. Patrick Feller studied electrical engineering at the University of Zurich and the University of Tokyo. He also completed a masterâ&#x20AC;&#x2122;s degree in Business Administration at Harvard University in Boston. After working as a consultant for McKinsey & Co. and Goldman Sachs International,
auditing company in Germany and abroad, where he was in charge of international DAX companies and mediumsized enterprises from different industries. Before joining YOC, he held several executive positions in the commercial department of the Heineken Group. Most recently, he was CFO of Heineken Deutschland GmbH.
he went on to join HMD Partners LP, London, where he served as a Principal between 2002 and 2008. He was responsible for transaction, strategy and operations support for European medium-sized companies from the consumer goods industry, the luxury goods industry and the trade sector. Between 2006 and 2010 Patrick Feller was Speaker of the Management Board at SinnLeffers GmbH. Since 2009 he has held the position of Managing Partner of DIH - Deutsche Industrie Holding GmbH.
93 The Supervisory Board was composed as follows in the financial year 2011 (as of 31 December 2011):
1 To Our Shareholders
Supervisory Board Gerd Schmitz–Morkramer Seats in other mandatory supervisory boards • YOC AG: Chairman of the Supervisory Board • bmp media investors AG (formerly bmp AG): Chairman of the Supervisory Board • Ernst Max von Grunelius Stiftung: Management Board • SSC Savelberg Schmidt & Company GmbH & Co. KG: Member of the Advisory Board
Seats in other mandatory supervisory boards • YOC AG: Member of the Supervisory Board • Tengelmann Verwaltungs- und Beteiligungs GmbH: Member of the Advisory Board • Kaiser‘s Tengelmann AG: Member of the Supervisory Board
• GfK e.V.: President • OBI Group: Member of the Supervisory Board • Interseroh S.E.: Member of the Supervisory Board • Berlin Partner GmbH: Chairman of the Supervisory Board
2 The YOC Group
Peter Zühlsdorff
Oliver Borrmann Seats in other mandatory supervisory boards • YOC AG: Member of the Supervisory Board
3 Group Management Report
• bmp media investors AG (formerly bmp AG): Member of the Board • bmp Beteiligungsmanagement AG: Chief Executive Officer • König & Cie. Private Equity Management GmbH: Managing Director • König & Cie. II. Private Equity Beteiligungs- und Treuhand GmbH: Managing Director • Central & Eastern Europe Venture GmbH: Managing Director • ECO Investors Germany Management GmbH: Managing Director
• Cavy Capital GmbH: Managing Director • Newtron AG: Chairman of the Supervisory Board • Heliocentris Fuel Cells AG: Chairman of the Supervisory Board • brand eins Medien AG: Chairman of the Supervisory Board • Revotar Biopharmaceuticals AG: Chairman of the Supervisory Board • ergoTrade AG: Member of the Supervisory Board • bmp Media Investors AG & Co. KGaA: Chairman of the Supervisory Board
4 Consolidated Financial Statements
YOC Group
Annual Report 2011
Financial Calendar 22 .03. 2012
Publication of the Preliminary Annual Result 2011
26.04.2012
Press Conference on Annual Result
14.05.2012
Publication of the Report on the 1st Quarter 2012
13.08. 2012
Publication of the Report on the 1st Half-Year 2012
21.08. 2012
Annual General Meeting
12.11. 2012
Publication of the Report on the 3rd Quarter 2012
95 1 To Our Shareholders
YOC Contact Cologne
London
YOC AG YOC Mobile Advertising GmbH belboon–adbutler GmbH
YOC AG Sevenval GmbH
YOC Ltd. YOC Mobile Advertising Ltd.
Bahnhofsvorplatz 1 50667 Cologne Germany
Holden House 51-57 Rathbone Place London, W1T 1JU Great Britain
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T + 44 (0) 20 719 901 10
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2 The YOC Group
Berlin (Headquarter)
3 Group Management Report 4 Consolidated Financial Statements
info@yoc.com www.yoc.com m.yoc.com
YOC Group
Annual Report 2011
Imprint Publisher YOC AG Karl–Liebknecht–Straße 1 10178 Berlin T: + 49 (0) 30 726 162 – 0 F: + 49 (0) 30 726 162 – 222 info@yoc.com Entry in the German Commercial Register: District Court of Berlin, Commercial Register No. 77285
Overall Design and Editorial YOC AG T: + 49 (0) 30 726 162 – 201 F: + 49 (0) 30 726 162 – 222 ir@yoc.com www.yoc.com
Design and Production Vanessa Kalkman
Print Druckhaus Berlin–Mitte
Image Sources YOC AG Kühnapfel Fotografie
Reproduction subject to approval of YOC AG