28 Apr YuuZoo’s Profits From Sale Of Licences To New Franchisees In 59 Countries Valued At 33.4 Million SGD By Big 4 Audit Firm

Franchisees pay YuuZoo in shares of company owning the license

Profit from shares received under new deals signed valued at 33.4M SGD as at February 2015 by big 4 audit firm

Share-based payment enables significant value increase over time, and allows YuuZoo’s shareholders to become owners of social e-commerce businesses covering 59 countries with 1.3 billion people

YuuZoo

Singapore, 28th April 2015: Singapore Exchange Listed YuuZoo Corporation Limited (“YuuZoo” SGX: AFC) one of the world’s first 3rd generation social e-commerce network, today announced that the profits from the sale of new licenses to franchisees through valuation by a big 4 audit firm have been valued at SGD 33.4 million (USD 24.2 million) as at February 2015. The revenue and profits from the sale of the franchise licenses will, subject to auditor approval, be included in YuuZoo’s accounts when the franchisees commence operations. An independent re-valuation will thereafter be conducted at the end of each year.

Under a payment model developed by another big 4 audit firm, the franchisee pay YuuZoo for the franchise license by issuing to YuuZoo, shares in the company owning the license. This enables YuuZoo to achieve two key objectives; to over time get a significantly higher share of the recurring revenues from the advertising, e-commerce, games and payments revenue generated by the franchisee, and to correctly determine the value of the asset over time as the business of the franchisee develops. From a shareholder perspective, this means that a YuuZoo shareholder becomes an owner not only of YuuZoo Corporation Limited, but of a growing number of local social e-commerce businesses in a growing number of countries, all of which can be sold at the right time.

YuuZoo has signed new franchise agreements that cover 59 countries and a population of 1.3 billion people. Agreements have been signed in Asia, Europe and Africa. These include the already announced agreements in South Korea and Turkey, as well as new agreements signed in other large and fast-growing markets such as Poland, Romania, South Africa, Kenya etc.

The new franchisees are committed to register a combined minimum of 5.7 million new users within 12 months from launch, and 40 million users within 36 months from launch. Assuming each franchisee generates a conservative 10% of average global B2C e-commerce revenue per user, which according to published market data stands at 1,459 USD[1] and an equally conservative 10% of average global digital ad spend per user of 55.60 USD[2], 5.7 million active users would on an annual basis generate topline revenue of 1.2 billion SGD, while 40 million active users on an annual basis would generate topline revenues of over 8.3 billion SGD.

Says YuuZoo Chairman & CEO Thomas Zilliacus: “Our policy of entering overseas markets by appointing a local franchisee enables us to fully localize our virtual shopping mall for each market, and to expand our global footprint at a rapid pace. Our earlier franchisee model, where we received a onetime cash fee for the license and a fixed revenue share on all future income, gave us a significantly smaller revenue share and a fee that over time did not reflect the correct value. We assigned a big 4 audit firm to work out a model that would increase our revenue share on the recurring income and reflect the correct value of the franchise license over time.

Under this “big 4” model we have signed new license agreements covering 59 countries. The stakes in the franchise companies we have received as payment have been valued at a current value of 33.4M SGD as at February 2015 by another big 4 audit firm. We believe the value of these unique social e-commerce businesses once the franchise operations have started can become significantly higher especially in large markets. The value will therefore be reassessed by an independent valuer at the end of each year, and subject to our auditors be entered in our balance sheet at the correct value as at our financial year ended 31 December 2015” he added.

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ABOUT YUUZOO:

Headquartered in Singapore and listed on the SGX mainboard (SGX: AFC), with access to over 85 million registered users and 800 million TV viewers across 164 countries, YuuZoo in a unique way combines social networking, e-commerce and games in a mobile-optimized, fully localized virtual shopping mall, where the consumer can access hundreds of targeted social networks, targeted shops and targeted entertainment through one single login. All networks are localized for each market as comes to language as well as merchandise and design. To see the networks, log into: www.yuuzoo.com. For more information about the company, please log on to: www.yuucorp.com

 

Macquarie Capital (Singapore) Pte. Limited (“Macquarie”) was the financial adviser to W Corporation Limited (now known as YuuZoo Corporation Limited) in relation to the acquisition of the entire issued and paid-up share capital of YuuZoo Corporation and its subsidiaries. Macquarie assumes no responsibility for the contents of this announcement.

 


[1] 1 Average B2C Ecommerce Sales per Digital Buyer Worldwide, by Region and Country, 2011-2016

[2] Digital Ad Spending per Internet User Worldwide, by Region, 2013-2018