Half Year 2021 Results - Trustpilot - a universal symbol of trust
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Half Year 2021 Results Trustpilot - a universal symbol of trust 15th September 2021
Disclaimer
Important Notice
This Presentation does not purport to be comprehensive or complete and has not been independently verified. It is provided as at its date and is subject to change without notice. Neither Trustpilot Group
plc (the “Company”) nor any other person is under an obligation to update or correct this Presentation or to provide access to any additional information that may arise in connection with it.
“Presentation” means the document of which this page forms part, and such document’s contents or any part of it or them, any oral presentation, any question and answer session and any written or oral
material discussed or distributed before, during or after any meeting at which this document or any part of it is made available.
This Presentation has been prepared for information purposes only and does not constitute an offer to sell, or a solicitation of an offer to subscribe for or purchase, any securities in any jurisdiction, and is not
for publication or distribution in or into any jurisdiction where such publication or distribution is unlawful.
Nothing in this Presentation is intended to form the basis of, or be relied upon in connection with, any investment decision and nor should it be construed as legal, tax, regulatory, financial, accounting or
investment advice or a recommendation to subscribe for, purchase or dispose of any securities. Before making any investment decision you should consult with your own advisers in relation to such matters
and make your own independent assessment and conduct such investigations as you deem necessary.
Forward-looking Statements
This Presentation may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology,
including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “plans”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology. They may
appear in a number of places and may include statements regarding the Company’s intentions, beliefs or expectations. By their nature, forward-looking statements involve risks and uncertainties because they
relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and future performance may differ materially from
that set out in or suggested by the forward-looking statements set out in this Presentation. Forward-looking statements speak only as at the date of this Presentation and any obligation to release any update
of, or revisions to, any forward-looking statements in this Presentation is expressly disclaimed. As a result, caution should be exercised when considering such forward-looking statements.
Past performance cannot be relied on as a guide to future performance.
Industry and market data
Where this Presentation contains industry, market or competitive position data it may have come from third party sources. Third party industry publications, studies and surveys generally state that the data
contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. In addition, certain such data may have come from the
Company’s own internal research and estimates based on the knowledge and experience of the Company’s management in the industries and markets in which the Company operates. No industry, market or
competitive position data contained in this Presentation has been verified by any independent source for accuracy or completeness and such data is subject to change without notice. Accordingly, caution
should be exercised when considering such data.
Financial and other information
Nothing in this Presentation is intended to constitute a profit forecast or profit estimate. Certain figures in this Presentation may be unaudited. In addition, certain figures in this Presentation, including financial
information, may have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this Presentation may not conform exactly to the
total figure given.
The Company utilises a range of alternative performance measures (“APMs”) to assess its performance and this Presentation may contain certain financial measures that are not defined or recognised under
IFRS. Any APMs used in this Presentation should not be considered superior to, or a substitute for, measures calculated in accordance with IFRS. You should not consider any such APMs in isolation, but in
conjunction with measures calculated in accordance with IFRS. APMs used by the Company are unaudited and may not be comparable to similarly titled measures reported by other companies as those
companies may define and calculated such measures differently.
Disclaimer
Neither the Company, nor any of its subsidiary undertakings, nor any of its or their respective directors, officers, employees, agents, consultants or advisers (together, “Associates”) has independently verified
any information contained in the Presentation and none of the foregoing makes any representation or warranty as to, and no reliance should be placed on, the accuracy, fairness or completeness of, this
Presentation. The Company, its subsidiary undertakings and its and their Associates disclaims, to the maximum extent permitted by law, all responsibility and liability, arising in tort, contract or otherwise,
which they might otherwise have in connection with the Presentation.
2
Overview Peter Mühlmann Founder and CEO
Trust is a defining issue of There is strong virality We target long-term,
our times between the consumer sustainable value for all our
and business sides of our stakeholders
platform
• Trustpilot is a leading • One drives and • Strong sense of purpose
global review platform in reinforces the other and culture
an emerging and growing • This network effect lies • Our platform supports a
category at the heart of scalable SaaS business
• Our mission is to provide Trustpilot’s organic with compelling unit
the ‘trust layer’ for growth economics
businesses in the open • We have delivered 30 • Our global, under-
commerce ecosystem per cent compound penetrated total
• Our open platform annual revenue growth addressable market is
enables businesses and since 2015 estimated to be c.$50bn*
consumers to gain
actionable insights and
collaborate
* Q1 2021 study commissioned by Trustpilot. Total Addressable Market excludes China and refers to the total future market opportunity that exists including adjacent industries (e.g.
construction, property, manufacturing), adjacent products (e.g. product and location reviews) and adjacent geographies.
4
H1 strategic KPIs
◦ Total cumulative reviews* +44% YoY to 144m
◦ Reviewed domains** +41% YoY to 626k
◦ Active domains +42% YoY to 73k
◦ 44bn Trustbox impressions in the period
◦ On average, 44m review invitations sent by
businesses every month +73% YoY
* all submitted reviews including reviews subsequently removed or deleted
** including both claimed and unclaimed domains, and those subsequently removed from the Trustpilot consumer website
5
H1 financial KPIs
◦ Revenue +31% YoY to $62m (+22% c/c)
◦ Bookings +37% YoY to $75m (+28% c/c) The financial KPIs in the first half of
◦ ARR +36% YoY to $134m (+27% c/c) the year were strong across the
◦ LTM Net Dollar Retention Rate at 97% business
◦ Bookings growth strong across all regions
* including reviews subsequently removed or deleted
** including both claimed and unclaimed domains, and those subsequently removed from the Trustpilot consumer website
6
We provide a trust layer for the open commerce ecosystem
Diverse, global, online
and offline businesses Money & Home & Shopping & Electronic & Business Beauty &
Transportation Health Travel
Insurance Garden Fashion Tech Services Wellness
Trust
Marketing
CRM
Payments
Commerce infrastructure
7
Our global addressable market is large and under-penetrated
Diverse global online or offline businesses
MONEY & INSURANCE TRANSPORTATION
Global Total Addressable
Market (ex China) (3)
~$50bn
HOME & GARDEN BEAUTY & WELLNESS
Total
Serviceable Addressable
Market (2) HEALTH
SHOPPING & FASHION $18.8bn
TRAVEL
ELECTRONIC & TECH
Current
Serviceable
Addressable
Market (1)
BUSINESS SERVICES
$6.3bn OTHERS
Source: Q1 2021 study commissioned by Trustpilot
1. Current Serviceable Addressable Market (Current SAM) refers to the realisable market opportunity that exists within Trustpilot 's core industries, products and geographies
assuming maximum currently observed penetration rates of 48% and maximum conversion rates to paid customers of 38%
2. Total Serviceable Addressable Market (Total SAM) refers to the future, theoretical long-term market opportunity available to Trustpilot within core geographies, industries and
products assuming 100% penetration of addressable businesses and 56% conversion to paid customers
3. Total Addressable Market (TAM) refers to the future theoretical market opportunity assuming Trustpilot, and its competitors, can penetrate adjacent industries (e.g., construction,
property, manufacturing), adjacent products (e.g., product and location reviews) and adjacent geographies
8
Diverse spread of businesses using Trustpilot
Money & Home & Shopping & Electronic Business Trans- Beauty &
Travel Other
Insurance Garden Fashion Tech Services portation Wellness
Selected H1 business customer additions
9
Our organic growth is driven by a powerful viral network effect
Consumers Businesses
144m Showcase Better informed
626k
Reviews by consumers Trustpilot stars consumer Reviewed domains
(44% YoY growth globally) (1),(2) Share experiences (41% YoY growth globally) (1),(3)
Learn from Consumer
consumer experience
experience
Business engage Shared on
via software with Trustpilot
customers
Better informed purchasing Showcase, learn and grow
based on the experience of more efficiently
other consumers New business added to platform
Increased traffic,
Your voice matters conversion, revenues and
customer LTV
Consumer engagement drives growth in business customers
Notes:
1. As of 30 June 2021
2. All submitted reviews (inclusive of reviews subsequently removed or deleted)
3. All reviewed domains (inclusive of domains subsequently removed from Trustpilot consumer site) 10Opportunity to convert reviewed domains to paying customers
Global universe of c.13 million potential business customers (1)
626k
reviewed domains (2)
481k
claimed domains (3)
73k
total active domains (4)
21k
paying business customers (5)
Notes:
1. Q1 2021 study commissioned by Trustpilot; addressable businesses includes companies within core industries only, excluding holding companies and those without a website, and excluding China
2. 30 June 2021; all reviewed domains (inclusive of domains subsequently removed from Trustpilot consumer site)
3. 30 June 2021; number of domains who have claimed their profile on Trustpilot and can access features like inviting customers to write reviews, replying to reviews, and being notified whenever
someone writes a review
4. 30 June 2021; number of domains that have claimed their profile on Trustpilot and have at least 1 invited review or Trustbox impression in the month
5. 30 June 2021
11A scalable SaaS platform
Trustpilot software provides We go to market with a flexible We are a successful fast
critical support for businesses to freemium model growing SaaS company, with
understand and respond to true high gross margin and high
consumer sentiment Free retention
Standard + Add-ons
Build a trusted brand (Annual subscription model)
Engage with customers Invite Location $134m 81%
Reviews ARR (1) (30% annual Gross Margin (1)
Convert
Leverage reviews for trust- revenue growth since
Integrate 2015) (2)
based marketing Enhance
Insights
Apply learnings and grow Connect
efficiently …
Product
Reviews 97% ~$5,800
Estimated ~ 25-30% total LTM Net Dollar Average
compounding uplift on revenue Enterprise Retention Rate (4) Contract Value (3)
for Trustpilot users (5) (Annual subscription tailored offering)
Notes:
1. 30 June 2021
2. Compound annual revenue growth rate of 30% from 2015 to H1 FY21; constant currency growth
3. H1 FY21
4. Represents all customers renewing in LTM June 2021. Retention refers to US$ amount rather than customer count rate. Retention rate determined by taking retention bookings
contracts up for renewal. Inclusive of up- and cross-selling of existing customers
5. Based on a Q1 2021 study commissioned by Trustpilot 12Our business customers amplify our brand across all channels
7.4bn monthly TrustBox 1.2bn Google monthly 263m Review invitations in
impressions (1) search results (3) H1 FY21 (2) Offline TV
(32% YoY growth globally) (73% YoY growth globally)
73k+ active domains (4)
3. Average monthly Google Search impressions in H1 FY21. Google Search impressions counted
Notes: as the number of times that a link to a Trustpilot page has been returned in response to a
1. Average monthly TrustBox impressions in H1 FY21. Trustbox Impressions is the number of customer Google search, on any page of the search results
webpage loads with an embedded TrustBox, but the consumer does not necessarily see the TrustBox 4. 30 June 2021; number of domains that have claimed their profile on Trustpilot and have at least
2. Review invitations in H1 FY21, includes via invitation methods tracked inside the product 1 invited review or Trustbox impression in the month 13Our strategic investment priorities
Consumer Trust Markets and Growth
◦ Technology and processes to protect content
◦ Scaling channels
integrity
◦ Partners and eCommerce integrations
◦ Published inaugural Transparency report
Business Proposition People
◦ Automation and efficiency ◦ Make Trustpilot the place where talent can thrive
◦ Enhanced personalization and insight ◦ Continue to strengthen our leadership team
14Finance review Hanno Damm CFO
A strong H1 financial performance
Bookings Revenue ARR LTM Net Dollar Adj. EBITDA
Retention Rate
$75.5m $62.4m $134.2m 97% $3.8m
+28%* +22% +27% +600bps +121%
• Re-acceleration of bookings growth • Net Dollar Retention Rate improved by
continues 600bps
◦ Reflects investment in retention and expansion
• Strong bookings performance across all
regions • Balance sheet significantly strengthened post
◦ UK +27%
IPO
◦ RoW +36% ◦ Closing H1 net cash balance of $91.4m, after
◦ North America +18% paying down $13m of debt
* All percentage growth rates shown here are at constant currency and represent a YoY comparison.
16Bookings and revenue analysis
• Regional bookings growth Six months to 30 June 2021 H1 FY21 H1 FY20 Change Change
(USD’000) (USD’000) (YoY) (c/c)
drives future revenue growth
Bookings
• Bookings growth accelerated in United Kingdom 29,750 21,265 +40% +27%
all regions
Rest of World 28,154 18,903 +49% +36%
• H1 revenue growth reflected North America 17,574 14,839 +18% +18%
prior year bookings growth Total bookings 75,478 55,007 +37% +28%
• The bookings growth achieved
in the period reflects an element Revenue
of recovery from the impact of United Kingdom 25,137 18,012 +40% +27%
the pandemic which disrupted
Rest of World 22,619 15,839 +43% +30%
H1 FY20
North America 14,692 13,829 +6% +6%
Total revenue 62,448 47,680 +31% +22%
17Re-acceleration from COVID impact has continued
Monthly constant currency ARR (USDm)
CAGR Jan-17 - Jan-20 Jan-20 - May-20 May-20 - Jun-21
UK 37% 10% 33%
RoW 32% 11% 35%
North America (1) 26% 0% 11%
Total 32% 8% 28%
UK RoW North America (1)
UK and RoW have returned to pre-crisis month-on-month growth rates and North America continues its recovery
Notes:
1. Includes US and Canada 18High net dollar retention supports bookings and revenue visibility
Bookings by cohort and year (USDm)
83% 85% 83% 84% LTM Gross Dollar Retention Rate (1)
7% 10% 8% 13% Net expansion (3)
89% 94% 91% 97% LTM Net Dollar Retention Rate (2)
3.8x
Increasing first-time customer
base LTM H1 FY21
Group LTV/CAC (4,5)
High returning customer base
2017 and before 2018 2019 2020 2021
Notes: 3. Calculated as net dollar retention rate – gross dollar retention rate
1. Determined by taking retention bookings / contracts up for renewal, refers to US$ amount rather 4. Lifetime Value defined as (Average Customer ACV * Gross Margin %) / Churn,
than customer count and excludes up-and cross-selling (expansion) of existing customers excluding upsell and cross-sell where ACV = Annual Contract Value
2. Determined by taking retention bookings / contracts up for renewal, refers to US$ amount rather 5. Customer Acquisition Costs per customer defined as Sales and Marketing
than customer count and includes up-and cross-selling (expansion) of existing customers 19
Costs / # new customersSummary income statement
• Revenue growth principally driven Six months to 30 June 2021
H1 FY21 H1 FY20 Change Change
by UK and RoW, reflecting prior (USD’000) (USD’000) (YoY) (c/c)
year bookings Revenue 62,448 47,680 +31% +22%
• Gross margin 81% in the period
Cost of sales (11,676) (8,389) +39% +30%
(H1 FY20: 82%)
Gross profit 50,772 39,291 +29% +21%
• Net loss impacted by IPO-related
transaction costs
Sales and marketing (21,265) (21,541) -1% -7%
Technology and content (15,205) (10,993) +38% +27%
General and administrative (30,129) (11,489) +162% +146%
Other operating income 391 38 - -
Loss before net financial items (15,436) (4,694) +229% +208%
20Adj. EBITDA development
Adj. EBITDA (USD’000) (1) Reconciliation to adjusted EBITDA (USD’000) (1)
5,515 3,769
3% 6%
9,830
3,860
(15,436)
Margin General & Administrative Technology & Content
Phasing of costs for H2 is an important consideration for analyst models. We continue to prioritise investment in driving
adoption.
Notes: Reported figures for all absolute figures and EBITDA margin figures.
1. Adjusted EBITDA equals earnings before interest, taxes, depreciation and amortisation, adjusted to exclude share-based compensation and non-recurring transaction costs
21Operating cost analysis
Statutory Core
Change Change Change Change
H1 FY21 % of Rev H1 FY21 % of Rev
(YoY) (C/C) (YoY) (C/C)
(USD’000) (USD’000)
Sales and marketing 21,265 -1% -7% 34% 21,265 6% -1% 34%
Technology and content 15,205 38% 27% 24% 13,978 32% 21% 22%
General and administrative 30,129 162% 146% 48% 12,151 73% 63% 19%
• Operating cost trend shown on both a statutory and core basis
• Details of the adjustment can be found in the release
22A step change in efficiency of customer acquisition
◦ The reduction in expense YoY follows Sales and marketing costs (USDm)
actions taken a year ago
45%
◦ Consequently, the average headcount in
the period was 254 (H1 FY20: 328) 34%
◦ The saving has been partially offset by
higher average cost per headcount, higher
commissions and higher marketing
expenditure
◦ Expect to incur somewhat higher sales
and marketing spend in current year and
beyond, though not a return to levels seen
in previous years as a share of revenue
Sales B2B marketing %
Restructuring
costs costs revenue
23Summary balance sheet items
• Closed the period with $91.4m of
30 June 31 December
cash
2021 2020
(USD’000) (USD’000)
• Paid down $12.9m of debt Non current assets 24,301 25,460
Trade receivables 5,114 5,227
• Balance sheet strengthened
considerably following the IPO and Cash and cash equivalents 91,392 50,387
capital raise Other current assets 5,871 4,155
Total assets 126,678 85,229
Trade and other payables 20,701 25,746
Contract liabilities 25,558 22,849
Borrowings – 12,941
Other liabilities 15,181 16,694
Total equity 65,238 6,999
Total equity and liabilities 126,678 85,229
24We have identified multiple avenues for long-term growth
M&A
Accelerate our growth
New by acquiring selected
services companies
New Develop additional
Monetise opportunities and enhanced
Product-led services, using data
go-to-market Enter new capabilities and other
Upsell & Cross sell
geographies and insights
to customers
Investment into channels, leveraging
through modular
consumer engagement first mover advantage
pricing and improve
and product led and network virality
efficiencies through
growth, focused on
product-led
enhancing trust
automation and
volume onboarding
25Raising revenue guidance for FY21
FY20 H1 FY21 Guidance
Medium-term: Return to historical constant
Constant currency
bookings 18% 28% currency growth trend as we head
into 2022 and beyond
Top line
FY21: Raising constant currency growth for the full year to be
Constant currency
revenue 23% 22% consistent with performance in H1 FY21 (previous guidance was
‘high-teens’ growth)
“We previously provided guidance for high-teens constant currency revenue
growth in the current year. On the back of stronger H1 FY21 performance,
we now expect to achieve a rate of constant currency revenue growth for
the full year consistent with H1 FY21.”
26Summary & outlook
• A strong H1 financial performance
• Re-acceleration of bookings across all regions
• Operating KPIs confirm strong progress against our strategic objectives
• Strong virality between business and consumer sides of our platform is driving our organic growth
• We have raised our constant currency revenue guidance for FY21 to be consistent with performance
in H1 FY21*
• Our strategy to provide the ‘trust layer’ for the open commerce ecosystem is working
* Previous guidance was constant currency revenue growth of ‘high-teens’ for FY21
27There has never been a greater need for trust
28Analyst Q&A
Appendix
A purpose-driven business
We are doing something
that we believe will create a
better world and is really
750+ 8 43% meaningful for the times we
Employees (1) Locations (1) Female employees (1)
live in
Trying to solve trust for
the internet economy is
43%
Female senior
49 ~32 our key purpose
Nationalities (1) Average age (1)
management (1),(2)
“It’s a positive and empowering culture, “There is a big sense of ethics, people Our stakeholders include
people want the best for each other” (3) really want to do the right thing” (3) our owners and employees,
as well as all consumers
— Tudor — Liza
Notes
1. As of 30 June 2021
2. Employee seniority of Director or above
3. Trustpilot employee quotes
31Statutory Income Statement
H1 FY21 H1 FY20 (+/-) % (+/-) %
USD'000 constant
(USD’000) (USD’000) actual
currency
Revenue 62,448 47,680 31% 22%
Cost of sales (11,676) (8,389) 39% 30%
Gross profit 50,772 39,291 29% 21%
Sales and marketing (21,265) (21,541) -1% -7%
Technology and content (15,205) (10,993) 38% 27%
General and administrative (30,129) (11,489) 162% 146%
Operating loss (15,827) (4,732) 234% 213%
Other operating income 391 38 NM NM
Loss before net financial items (15,436) (4,694) 229% 208%
Financial income/(expense) (1,820) (1,717) 6% 34%
Loss before tax (17,256) (6,411) 169% 173%
Income tax 79 585 -86% -87%
Loss for the period (17,177) (5,826) 195% 202%
Loss before net financial items (15,436) (4,694) 229% 208%
Depreciation and amortisation 3,860 2,117 82% 71%
Non-recurring transaction costs 9,830 563 NM NM
Restructuring costs 0 1,744 -100% -100%
Share-based compensation, including associated social
security costs 5,515 1,880 193% 180%
Adjusted EBITDA (non-IFRS) 3,769 1,610 134% 121%
32Adjusted EBITDA reconciliation
• Non-recurring transaction costs
relate to the IPO
H1 FY21 H1 FY20
Six months to 30 June 2021
• We responded to pandemic (USD’000) (USD’000)
uncertainties with cost reduction Loss before net financial items (15,436) (4,694)
and restructuring measures
Depreciation and amortisation 3,860 2,117
EBITDA (11,576) (2,577)
Non-recurring transaction costs 9,830 563
Restructuring costs — 1,744
Share-based payments 5,515 1,880
Adjusted EBITDA 3,769 1,610
33Financial glossary
Definition
Bookings The annual contract value of contracts signed in a given period, nearly all are 12 months in duration but
in the rare case a contract exceeds 12 months the value reported is only the 12 month equivalent
Revenue Recognised revenue, software subscriptions are amortised over the term of the contract
ARR Annual Recurring Revenue = Monthly Recurring Revenue * 12
Lifetime Value (Avg Customer ACV * Gross Margin %) / Churn
ACV Annual Contract Value
LTM Net Dollar Retention Rate Determined by taking retention bookings / contracts up for renewal, refers to US$ amount rather than
customer count and includes up-and cross-selling (expansion) of existing customers
LTM Gross Dollar Retention Rate Determined by taking retention bookings / contracts up for renewal, refers to US$ amount rather than
customer count and excludes up-and cross-selling (expansion) of existing customers
Net expansion Calculated as LTM Net Dollar Retention Rate – LTM Gross Dollar Retention Rate
Cost of sales Cost of goods sold = network costs (c. 14%) + retention costs (c. 71%) + support costs (c. 15%)
CAC CAC = Customer Acquisition Cost. Includes Sales and Marketing costs in a given period
CAC per customer Sales and Marketing Costs / # new customers
34Operational glossary
Definition
Active domains Number of domains that have claimed their profile on Trustpilot and have at least 1 invited review or
TrustBox impression in the month
Claimed domains Number of domains who have claimed their profile on Trustpilot and can access features like inviting
customers to write reviews, replying to reviews, and being notified whenever someone writes a review
Domains with reviews All reviewed domains (inclusive of domains subsequently removed from Trustpilot consumer site)
Google search results / impressions Number of times that a link to a Trustpilot page has been returned in response to a Google search, on
any page of the search results
Penetration of addressable Calculated using current Free & Paying domains divided by the number of addressable businesses in
businesses each market
Reviews by consumers / total All submitted reviews (inclusive of reviews subsequently removed or deleted)
reviews
Reviewed domains All reviewed domains (inclusive of domains subsequently removed from Trustpilot consumer site)
TrustBox impressions TrustBox impressions is the number of customer webpage loads with an embedded TrustBox, but the
consumer does not necessarily see the TrustBox
35You can also read
