13 Aug YuuZoo’s 1H/2015 revenues grow to US$ 17.6 million (S$ 24.5 million), a 73% increase over the same period last year, with EBITDA of US$ 8.0 million (S$ 11.1 million) vs a negative EBITDA of US0.9 million for 1H/2014
Increase in revenue and EBITDA mainly attributed to the sale of exclusive franchise licenses, for which payment is received in shares
Summary of financial results for six months ended 30 June 2015:
Singapore, 13 August 2015: Singapore-listed YuuZoo Corporation Limited (“YuuZoo”) (SGX: AFC) is pleased to report a 73% growth in revenue in 1H/2015, to US$ 17.6 million (S$ 24.5 million) and a positive EBITDA of US$8.0 million (S$ 11.1 million) versus a negative EBITDA of US$0.9 million for 1H/2014.
This revenue improvement was driven by the sale of franchise licenses and the launch of franchise operations in South Korea and Turkey in Q1, and 6 countries in Central and Eastern Europe in Q2.
YuuZoo’s unique business model incorporates a payment model developed by a big four audit firm whereby the franchisee pays YuuZoo for the franchise license by issuing to YuuZoo shares in the company owning and operating the licence. 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. The assets will periodically be assessed to determine whether there has been any change in the value of the shares. Any such increase or decrease will be reflected by adjustment to the book value of the asset when the assessment is made. The next assessment is due at the end of 2015.
The Company earlier, in its full year 2014 results announcement, stated that it will recognize as revenue the full value of the assets (in the form of shares) it has received as payment for the licenses when franchisees commence operations. The Company has decided to take a more conservative approach, and recognizes only 50% of the already heavily discounted valuation done by another big 4 audit firm, with the balance 50% recognised when the franchisee has achieved its first year targets.
Q2/2015 Operational Highlights
During Q2/2015 YuuZoo announced the launch of a its social e-commerce network in China, the world’s largest market, linked to a football show on the Great Sport Media network channel of Shanghai Media Group, a TV channel with a reach in excess of 300 million TV viewers nationwide. Also in China, YuuZoo has formed a joint venture company with XG AMA, a leading provider and organizer of e-sport events and related games activities through internet e-Sports gaming bars and cafes in China.
In Q2 the Company also announced a partnership with Africa’s largest TV network NTA, for the marketing of its social e-commerce network across Africa, the world’s fastest growing continent.
YuuZoo further announced the launch of its social e-commerce platform with franchisees in 6 countries in Central and Eastern Europe; Poland, Hungary, Czech Republic, Romania, Bulgaria and Slovakia, with a combined population base of almost 100 million people.
In June, YuuZoo unveiled a new patent-pending solution that gamifies the Company’s social e-commerce platform. The solution enables consumers to earn discounts by playing engaging but simple games, thereby creating a more fun, engaging and sticky environment.
In Q2, YuuZoo for the first time started direct consumer marketing. As a result, YuuZoo’s Alexa ranking rose over 900,000 positions in 3 months, ranking in the top 190,000 sites in the world by early August.
Through a very effective marketing campaign, the cost of acquisition for new registered users was significantly less than the budgeted cost. This means that the Company expects to be able to generate significantly more new users with the marketing budget it has allocated for 2015.
During the first half of the year the Company has strengthened its top management team by making key appointments, including the hiring of Rio Inaba, former CEO of Indonesia and Global President for New Market Development for Rakuten, one of the world’s largest e-commerce companies, to manage YuuZoo’s e-commerce expansion, and the hiring of Michael Parker, a former CFO of South China Morning Post, Star TV and Fox Sports Australia, as the new CFO for the Company.
Outlook for FY2015
YuuZoo is, through its unique partnership and franchise model, positioned strongly in the social e-commerce space. The Company, in the remainder of 2015, is expecting to continue expanding the local marketing of its virtual shopping mall with its current partners and franchisees. As the cost of acquisition of new registered users is less than the budgeted, the Company expects to be able to generate significantly more new users with the marketing budget it has allocated for 2015.
YuuZoo also expects to sign new agreements with new partners and franchisees in additional markets, where it currently is holding discussions.
Headquartered in Singapore and listed on the SGX mainboard (SGX: AFC), with access to over 85 million registered users and over 800 million TV viewers in 164 countries, YuuZoo in a unique way combines social networking, e-commerce, games and payments 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 and www.yuuzoo.cn For more information about the company, please log on to: www.yuucorp.com or www.yuuinvestor.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.