Adtraction Group AB (ADTR) February 2026 Capital Markets Day Transcript

hello and welcome to the presentation of attractions fourth quarter results as usual if you have any questions please post them online and we will answer after the presentation so this time we're going back to the basics we will talk about numbers and attractions goals and we will talk less about our business model and positioning we will not even talk about google or or um AI well maybe a little bit about google of course so um with that let's get started and let's talk about the fourth quarter attraction is back to a little bit of growth in the fourth quarter sales increased by three percent gross profit by five percent this gross profit growth of course is helped by our acquisition of affiliate future but we're also showing a little bit of organic growth in the quarter whenever we manage to grow gross profit we typically manage to grow operating profit at the quicker rate this happens also this quarter where ebda grows by 18 percent and we end up at 22 million we have strong cash flows in the quarter this is something that we are constantly working with and we're constantly trying to improve cash flows other stands out a little bit other is one of the segments that we report together with finance and the e-commerce other is a good proxy for bundler and you can see a growth rate there of 345 percent in the quarter i would like to point out that that other is not only a bundler but again it's a fairly good proxy for bungler i would also like to point out that this this growth rate is from from low levels the story of 25 is this we have seen three quarters with a small negative growth and we've seen a again a fourth quarter with a small positive growth i think it's important to point out that in the beginning of 2024 we still were consolidating clara lawn and that of course has an impact on the base numbers that we're looking at here sales for 25 dropped by one percent and so did gross profit because we manage costs we were able to increase ebit a slightly to 54 million we have strong or actually very strong cash flows for the quarter 70 million in total the segment other dropped or decreased by 17 percent and what's going on there is that we were consolidating Clara Lawn in the first quarter of of 24 so that is included in the base numbers Bundler is indeed catching up with Clara Lawn but we'll need a little bit more time before they reach Clara Lawn gross profit levels on a quarterly basis so Clara Lawn was actually at 3 to 4 million gross profit per quarter because we have a strong balance sheet and because we have very strong cash flows the board of directors is suggesting a dividend of 2.2 krona per share which represents an increase of 10 percent of course this needs to be approved by the shareholder meeting and if that is approved we expect to pay dividend in two tranches like we've done before probably in april and october there's a lot of stuff that we are doing in 2026 as usual our focus is growth and in the first quarter we have a particular focus on a couple of things the first one the crm system that we have implemented now it's up to use that in a proper way and we want all managers all partner managers and all country managers to use that in a proper way and we will make that use that system and the data systems to make correct decisions going forward we also have another very important project called fair tracking fair tracking deals with the consent gap and what's going on here is that because of the consent settings of certain clients attractions tracking code is not always executed we have built the beautiful solution to solve that problem which means that we can get compensation in a gdpr friendly way for untracked sales so this is great and we're in the process of implementing this across our portfolio i would say the fair tracking obviously is good for partners because they get committed for untracked sales it's great for our customers because they can make better budget allocation decisions and we get a better view of what's actually going on and who's actually delivering sales and when our partners and clients are happy we are happy too so it's also good for attraction our platform is developed continuously currently we have launched a new partner platform that that is in a test phase and we are getting feedback from partners the next step will be to switch all users to to that platform at some point later this year we're also developing an updated brand platform and an important part of that development is that we want more feature for self-managed accounts so that we can also service smaller customers and other customers with self-service needs we have an influencer project ongoing i think i've mentioned that before i think i talked briefly about that in the last report and i think between now and the next quarter report we will probably launch a test version of this and that means that in the q1 report i will be able to describe a little bit more what that project is and how it is supposed to work and perhaps even show a little bit of of what it looks like and and the business logic behind it we have a big project when it comes to pricing and service level i think that in in general our industry is not doing a good job explaining to customers what we do and what the difference is between different service levels and offerings and i think that we will do a very good job of explaining that so that's the first goal to to do a better job of explaining um our service and our pricing and the second goal is that attraction wants to address a bigger market so we will target slightly smaller customers and as we've said before we also want to go for bigger european accounts so that's also part of that exercise so we're we're we're increasing the addressable market i would say or increasing the number of potential customers bundler i think we have found a product market fit they are making great progress and we expect a strong development in in 2026 bundler has very good growth rates they are of course growing from fairly small levels but they really have found that product market fit and we expect good things from bundler in 2026. when it comes to affiliate future we have an integration and migration project ongoing which i will talk a little bit more to later in the presentation so as you know we have two main verticals it's finance and e-commerce in q4 we see a small sequential drop vis-a-vis q3 this is actually the normal cycle of the finance vertical this typically happens every year but we've also seen a small drop versus 2024 and what's going on here is that we have very mixed results from market to market so we see good development in for example Sweden, Denmark, Finland, Germany and also some smaller markets or for attraction smaller markets like Italy and Poland and then we see weaker performance in Norway and Spain and to some extent the Netherlands so it's a very mixed the picture here but um it is a still very important and great segment for us e-commerce i would characterize as more stable so we've talked before about the 2024 being a challenging year we think that things are more stable in 2025 again fewer accounts are closed or paused we are winning some strong accounts we have a more optimistic outlook from brands because of a general in general better economic conditions and i would also say that black friday in general was fairly strong for for attraction but it's the same story here we have slightly different results in different markets so in the fourth quarter norway finland netherlands poland spain showed very attractive growth rates and things were slower in Sweden, Denmark, Germany where we had negative growth rates. So if we look at the combined picture here what we see is a company that has been growing for a long while and now I would describe our development as more stable and of course we say every quarter report that our goal is to return to growth and the challenge right now is that we see such mixed results in many markets so it's not uncommon that for example finance is growing in one market and e-com is decreasing in some other market uh e-com is increasing and finance is shrinking and of course we need all of these things to grow that's when we can deliver growth on um on uh um for the for the whole uh company that's that's what we're seeking uh to uh to achieve we this graph shows the number of full-time employees before we we showed that on a quarterly basis i think this graph looks a little bit nicer and it also shows the trend the number of employees peaked in 2023 then it has decreased slightly slightly of course we are we're adding employees every time we acquire a company like we did in 2024 at record and 2025 So the employees, of course, is the biggest cost for attraction and, of course, the employees are also the ones who generate the gross profit that we need. Looking at the cost base, again, I think it's fair to say that the cost base is stable. We do see a slight increase in Q4 every year for a number of different reasons. Andreas will dig in a little bit more into that in his part of the presentation but I would characterize the cost base as being stable if you've followed attraction for a while you know that we are interested in three simple things from a financial financial point of view it's growth profitability and cash flows that ambition is also reflected in our financial goals so we want to gross sales by more than 20%. We want to have an EBITDA margin in excess of 7% and we want to pay a dividend of 30 to 60% of the net adjusted profit. So we have not delivered on the first two goals and I will comment on that a little bit later on. We have actually paid more than 60% dividend last year and also we plan to do that this year so historically attraction has delivered on the sales goal we've easily beaten that 20 percent goal and we have clearly not beaten that goal in 2024 and 2025 we still think that it's possible to reach that 20 sales growth so why do say that well i say it because we actually are delivering growth like that rates like that in individual markets actually more than one market and actually not only in small markets so we know that when everything is working out um we and the economy is a little bit stronger it's for sure possible to deliver those growth rates so this remains our ambition that may look a little bit weird for a company with minus one percent sales growth but this remains our ambition and we're going for that when it comes to the ebitda margin we were approaching um seven percent in 2023 or maybe we even delivered 27 in 2023 fourth quarter i don't remember exactly what i do know is this it's easier for us to deliver a strong EBITDA margin when we are growing so when we return to a sustainable growth i also expect margins to increase attraction has a long history of generating good cash flows so 2023 was a record year in terms of EBITDA we generated an EBITDA of 75 million in 2025 as I just mentioned the EBITDA is 54 million but cash flows are actually greater than they were in 2023 and that's because we're consistently working with improving cash flow and improving payment terms etc and that means that we actually can pay a good dividend and increase the dividend for the financial years 2025 so we talk a lot about growth how will we grow well that story has not changed it's the same as before the main thing here is that we want to grow with existing base this is all about adding more partners and doing more things with the existing customers we also welcome customers to start in new markets and we want to help them expand across europe of course we're also interested in increasing our market share we want to add new clients and partners to the partner marketing universe and of course we don't mind taking a client or two from competition either i think it's important that we grab that google budget so i have to mention google a little bit i think it's super clear that many brands are spending way too much money on google this turns out to be risky because cpc prices tend to increase at a much higher pace than the number of transaction or the order value generated from google it's a risky proposition to put too much money into google again our message is diversify and do that for example by partner marketing mna is a little bit special because Because I think that the foundation here is that there are too many companies in our industry and the industry would benefit from consolidation. At the same time, we've experienced market conditions and valuations which are not necessarily great for people who want to sell their companies. This is, and now I'm talking about 24 and 25. Attraction has acquired two companies in this period at record in 24 and Affiliate Future in 25. This was not because 24 and 25 were optimal times to sell. This was because the owners of those companies made strategic decisions to sell those companies. I think a lot of people in our industry are waiting for more favorable economic conditions and more favorable valuation levels before they engage in this consolidation exercise. So I may be wrong, but I don't expect a lot of things to happen in our core business in terms of consolidation for 2026. I may be wrong about that, but that's what we currently see. In the meantime, though, we are looking at some other projects. So we're almost always looking at something. and in the last couple of months that has been things that is not exactly core business but it's related to our core business one way or another. So speaking of M&A I want to say something about the affiliate future. As you probably remember we acquired this company in October or announce the transaction and then close the transaction also on October 31st. We bought this company from a company called Global Data and the transaction is a carve out. Carve outs are a little bit more complicated and time consuming and it's difficult to know exactly where the profitability ends up. I think that we were able to do this transaction in a fairly smooth and quick way. We more or less started the process full speed in, I think it was August and then we closed in October, which is pretty good. But that was a lot of work before we could finalize the process. So what's happening now is that we're doing migration and integration. Our COO, Dominika Skrytowska, is responsible for both of those things. The integration is ongoing. and what will happen here is that our existing business in the uk attraction uk will become part of affiliate future perhaps we will change name and affiliate future will be called attraction uk or something like that in the future and then we need to do something smart with affiliate future brand name also because this is that brand name has been around for a long time in the uk market and clearly has value we're also doing migration the goal is to finalize the process in q1 i would say that we're making good progress here together with the affiliate future team contrary to what i said in the last call affiliate future actually is profitable from the get-go again Then I was perhaps being a little bit cautious here, but it's not super easy to see what the underlying profitability was for Affiliate Future when that company was a part of Global Data. I would also like to point out that not everything will be migrated. So some accounts will not be migrated because they're too small. Some accounts have been closed. There's some partners that we prefer not to have in our platform, etc. So not everything will be migrated. This is completely normal. We've acquired four companies before, and in no case did we migrate 100% of the gross profit. So just summarizing Affiliate Futures financials, we've been consolidating Affiliate Futures in November and December. They had sales of $11.5 million, a gross profit of a little more than $2 million and an EBITDA of $0.6 million. So that's obviously a lot better than making a small profit is a lot better than making a small loss. And with Affiliate Futures customers, partners and teams, we think that we have a great foundation to continue to build things in the UK together with our existing UK team. So that was my part and with that said Andreas will do the numbers.

Thank you Simon and if we start by looking at net sales it's at 355 million in the quarter that is a three percent growth if we look at this from with the fixed currency rates we would have seen a six percent growth instead. Gross profit wise 68.9 million that is a five percent growth also with fixed currency rates we would have had eight percent growth like Simon mentioned we had 2.2 million from affiliate future and that would have left us with a one percent organic growth we also seen three very different months in the fourth quarter starting with October we had negative growth rates in October we had an amazing performance and then in December we ended the year with good positive growth. Simon also mentioned that we have year-to-date growth in Q1 and worth mentioning is also that January and February were relatively good months for attraction also in 25. So we are starting the new year on a positive trend. Looking at the EBITDA 21.7 million that is an increase by 18 percent here we also get the opportunity to show the positive things with our operating leverage we also add 0.6 million from affiliate future Simon also mentioned that we have a stable cost base naturally we have a little bit higher personnel costs in q4 when looking sequentially between q3 and q4 you might disagree that it's stable but the added cost here comes mainly from affiliate future with 1.5 million as well as the seasonality effects coming from vacation pay on the summer months Q2 and Q3 which lower the cost base in these quarters. Looking at the adjusted net result per share is at 1.04 Swedish Kronor and that is also an increase by 12%. The e-commerce vertical we have 46.4 million that is an increase by 7% leaving out the affiliate future 2.2 million gives us a organic growth of two percent for the e-commerce vertical. Looking at the bigger e-commerce vertical markets we can look at the Norwegian market which has completely outperformed and having growth rates up to 30 percent in in Q4 and meanwhile the Swedish market has had slight negative growth. Finance vertical we have 21.1 million that's a negative growth for over five percent we have seen nice stable GP from the Swedish finance vertical giving positive growth however we are still seeing negative growths and headwinds on the Norwegian and Spanish markets and that adds to the total negative growth of five percent. The other vertical now mainly bundler is at 1.4 million. That is a strong growth rate of 345% coming from lower comparison numbers. And geographies 50.4 million coming from the Nordics. We see slight positive growth rates from Finland and Norway. The Danish and Swedish markets are more or less at par with last year. And in Europe we have 18.5 million and that is a 14% growth. This is acquired growth coming from affiliate future we see more markets now with positive trends than negative we have for example a very good performance from italy meanwhile it's hard to grow when the biggest market the span spain is still have negative growth rates then looking at cash flows we have a record high operating cash flow 40.1 million in the quarter this comes from changes in our invoice process where we get paid for more November sales in December than we got previously. This will also affect Q1 where we will have bigger partner payments from these results. Next, investing activities. We have minus 13.9 million and this is the net from the acquisition of Affiliate Future. We have made full payment in Q4 so there are no more payments to be made from the acquisition. Fine financing activities we have 16.6 million and this is the dividend paid in the end of October. This gives us a total cash flow of 9.6 million in the quarter and also a net cash position of record high 123.6 million ending the year.

By that I give the mic back to you Simon. thank you very much so a little reflection on this i think it's nice that we can we can acquire a company pay dividend and still increase our cash position that's a testament to very strong cash flows indeed i also think andreas that you said that um october was amazing i may have misheard you there but actually you probably meant november uh negative growth rates in october and amazing november that's correct yeah i don't know i'm not 100 sure what you said but let's get that right so now you have the the the correct version here so briefly checking our goals um we are about growth profitability and cash flow you heard that before attraction is european networks we want to be more european and we want to be a leader consolidator in our industry and we want to serve a wider range of clients this is why we're developing our our platform and this is why we're doing a new pricing setup that we will talk more about soon so what's happening now you may ask well um in in the quarterly report that we presented this morning we said that we are growing in the first half of q1 pretty much in line with q4 growth this is much better than a slight negative growth of course much much better but we have higher ambitions than this but this is sort of an indication of where the first quarter seems to be heading based on the first half obviously the affiliate future is project and the integration and migration are a strong focus and then we have all the other things that i i just mentioned so So this is our quarterly report and presentation for the year so with that we have quite a few questions so we will just do them on volley as we say in Swedish so please give us a minute here and there to actually read the questions and then answer. So first we have a question here. Bundler performed well in 2025 and in the quarter. What are your expectations from this subsidiary in 2026? So we have big expectations for this company. We have a great team and we have a product market fit. We have also a good pipeline. We are not in a position to make a forecast right now, But I expect that we will communicate more about Bundler a little bit later in the year. I don't know exactly when. I think Bundler is a very interesting project indeed. So, again, another question, a good one. You are maintaining your financial targets. Historically, organic growth has been very good. In the future, what do you think will be the split between organic and inorganic growth? Half, half, roughly. So, yeah, I think that there's a potential to have a substantially better organic growth going forward. Can that be as high as 20%? Well, I think that we will need the support of M&A to reach that goal. So we haven't defined exactly how much will be from M&A, but clearly we will need to do some M&A to reach our growth targets. so what products in finance is strongest is credit card stronger than loans is there any new products holding uh holding up the finance segment for example el of tall or insurances so in in our world view uh insurance and electricity is actually not finance that is that is e-commerce and we are doing good business for both insurance and electricity but but that's reflected in the e-com numbers and and and you know looking at the finance vertical consumer loan is the biggest thing and then followed by by credit card then another question the number of full full-time employees increased quarter and quarter where and what kind of personnel are you hiring so i don't know the exact split there I don't know if you do, Andreas, but probably most of that is from AffiliateFuture.

Yes, I would say the full increase is AffiliateFuture personnel.

And AffiliateFuture employees are, you know, people working with the business. It's not the tech team, it's like people working in the business part of the organization. And actually one person for Andreas' finance department also. But that's it. all right uh when are you planning to launch a new platform the publisher currently are able to beta test uh will the influencer segment be open on this platform or will be a separate platform so um we haven't set a date uh for for the full launch of the of the partner platform we will need to get back on that but that is a priority for us our tech department is pretty busy there's lot of things that needs to be done including the the brand web so i'm afraid i cannot give you a specific date the influencer thing will be something separate and i think it's pretty cool and hopefully we can show you something fairly soon when is affiliate future estimated to be included in the attraction platform well in in q1 so it should happen fairly soon i'm not sure that exactly everything will be migrated in q1 but i think that we will see a lot of progress in q1 I don't know if you know the answer to this question, Andreas, I don't have that on top of my head. You mentioned that you had 136 full-time employees at the end of the quarter. What was the average during Q4?

Is that a number you have? Let me get back to that one. It's in the report.

Okay, so I will keep reading and then Andreas will get back with the average number of full-time employees during Q4. uh it's 129 129 thanks that's a quick digging uh andreas so uh so you're increasing staff with several roles after adjusting for affiliate future and you have uh many roles out for recruitment what are your thoughts about this increase in opex in general for 2026 well you're right um dear dear questioner here it's it's uh opex probably will increase a little bit but but some people are also leaving attractions so the net effect is not huge the biggest effect clearly is for an affiliate future we are hiring a little bit but it does not have a huge impact on the cost base i don't know if you have a different view on this andreas no so andreas agrees which is always a good thing have you seen any shift in compensation structures to partners during the last quarter i would actually say no i don't know if you have a different view no i don't i maybe this question come from seeing the margin increasing a little bit in q4 compared to last year but i would say that that increase is due to more e-commerce and and less finance okay so that's a good answer and here's a tricky question can you deep dive in the challenges within finance in Norway and Spain. And I think that in Norway the market has been slow for loan providers. It's probably mainly related to the economic situation and the risks associated with lending money. And I think this is more or less a part of a natural cycle. So we do see ups and downs in the finance sector. It's actually a little bit more volatile than the e-commerce sector because we take deeper dives and also bigger gains when things are working out. The Norwegian market really has been a lot of up and down and currently the customer activity is not so great, which is a reflection of what the consumer is doing. In Spain the market situation is a little bit more complicated. We have an upcoming regulation. There's also So there's some uncertainty around that. I think that the value chain to some extent is being redefined and we need to find new ways of working. A key thing in that is doing different kinds of integrations with loan providers. Those are called API integrations rather than traditional tracking. And this is something that we're focusing on and maybe what i just said doesn't make sense to anyone who's not in an industry but if you're in the industry you probably understand what i'm talking about um here's another question the incremental margin in this court was very strong is this the incremental martyr should be expected in the future well i'm not i'm not comfortable doing um forecasts like that what we do know is that whenever, you know, we know what our costs are and if we manage to increase gross profit, we should expect EBITDA to increase going forward and EBITDA margins to increase going forward. I don't know if this is the specific margin that we're talking about here, but I'm going to assume that is. All right. So here's a long question. I'll just read it and then we see where we end up. what are your hopes for the influencer MetaPic peer product and should we expect any significant spend maybe marketing in connection with the release also understanding my okay so let's do the MetaPic slash influencer question first so no we currently don't expect any significant marketing spend we will first try things out we believe that we are in a good position here because we know how to reach the influencers we know where they are and we know how to to market that to our existing client portfolio this will not require a lot of marketing maybe something obviously but but not any significant cost that will be noted um on on sort of a group level That may change going forward, but initially this will not happen. Here's an M&A question also. I understand you might not be able to find M&A targets valued less than attraction today. However, it would be great to hear your thoughts on using DEP, which should have a lower cost and equity for finance acquisitions. With enough synergies, it could perhaps be a good return if you require relatively high valuations. I think financing is actually not the problem here. I think that if you started a company and you built that for many years, maybe you don't want to sell that at six times EBIT. If you think that EBIT is also depressed that year compared to what it could be. So if you think that EBIT will increase and that multiples will increase, maybe you're not a seller that year. So I would say that at Record and Affiliate Future were sort of exceptions here. We are entertaining dialogues with many people in our industry, but my take is sort of that nothing feels hot right now. And I probably would not be willing to pay higher multiples right now. I feel that that's too risky. we're willing to do deals but that's going to be a fairly low multiples all right so europe bounces back to almost organic growth with adjusted for affiliate future compared to minus 15 percent is q3 what is driving this is spain performing better not really so spain is still still uh problematic in the finance vertical because of the challenges that we see in that market uh spain e-commerce is performing and has amazing growth rates but i think that um overall we have some markets that are working out fairly well so in german and finance is working out uh netherlands is uh working out uh on e-commerce side so it's it's really a mix and and we see we see markets and verticals go off in all sorts of directions here so there's It's not a consistent picture. So how far have you come with a probabilistic tracking rollout? Would you be able to estimate how much gross profit this initiative has been in Q4? So this is an ongoing project. We're not disclosing any numbers now. What I can say is that a substantial part of our portfolio has implemented what we call fair tracking. and then it's going to be take a little bit of time before we see the results but what i can say is that there is an impact and we expect to be able to communicate more about this we're also going to do more in the platform to show partners what brands have fair tracking and and implicitly you will be able to figure out who does not have fair tracking and and maybe that's that that will help partners decide where to send their traffic a little bit here's a question that we get sometimes and that is if we can do share buybacks because we have strong cash flows balance sheet and i don't know says valuation here i don't know i'm not i'm not going to comment evaluation but What I can say is that as a first north company, it's not really possible to do buybacks. There's the synthetic buybacks, which to me feels a little bit complicated. I think dividends actually are better. So my take is that we will stick to that. But I also think that, you know, the free float of attraction has been too low, I think. We've seen some improvement in the last quarter where Kasper Gröd and Jakob Notlev sold all of their shares and we're improving a situation with better free float and better liquidity in the share. And I think I'm not sure that this is the recipe for even improved liquidity in the share is to do share buybacks. If I'm wrong here, please inform me and tell me if I should be thinking about this differently. But for now, we are focusing on dividends instead. So we need to talk a little bit about AI after all. have you seen any shift in brand perception of partner marketing due to increasing ai visibility has this created any new deals well there's a couple of things going on here so first of all you know the ai tools or the llms gemini chat gpt claude they're currently not driving a lot of traffic to the brands we actually did a mini survey among our brands and in most cases um brands get less than three percent of of their total transactions actually in most cases even less than one percent of total transactions and sales from llms that's one thing another thing that's happening is that some brands at least are losing um are losing uh traffic because of ai overview so if you're a company that would spend a lot of time describing products or a process or whatever in order to attract traffic you will probably lose a lot of that traffic we've seen 20-30% loss for many brands and and then the brands need to compensate and in some cases they're actually buying more Google traffic I think that this is fairly common but I think in general this discussion actually has helped us a little bit because what's going on here is that is this if you're a brand and you're not getting any return from producing rich content then at some point you're going to stop producing content and over time you will not be seen in the llms if you do that so this is a sort of a of a catch 22 going on what we have seen and which i have talked about before is that our partners or publishers can help brands be seen in the llm so the brands are seen through partners because the partners keep producing this great content obviously this is not the long-term solution for partners either so so in my opinion people will stop producing content if they're not financially rewarding so the model is a little bit broken here and what we've seen is that some brands actually stop producing content we we know that it that that some publishers also are struggling a little bit with this but they need to keep producing content this is a complex question and what we have seen you know we we always follow the number of unique clicks to our platform that keeps increasing so the traffic delivery capability of the publishers is maintained and even growing uh actually so so it's still it's still working out there obviously it's a complicated environment with ai but it's also an interesting one it will create more opportunities for forward leading players so thank you very much for the interest and all the question i hope that our answers were somewhat useful and see you next quarter if not before thank you very much