28 Feb YUUZOO CORP 2016 RESULTS: TOPLINE REVENUE GROWS BY 16 % TO S$ 105,1 MILLION EBITDA MARGIN GROWS 56 % TO S$ 41,2 MILLION NET PROFITS GROWS 117 % TO S$ 34,6 MILLION
Summary of financial results of YuuZoo’s business for financial year ended 31 December 2016:
|Network sales (m)||22,7||5,8||291%|
|Franchise sales (m)||28,0||49,1||-57%|
Singapore, 28 February 2017: Singapore Mainboard listed YuuZoo Corporation Limited (“YuuZoo”) (SGX: AFC) is pleased to announce its unaudited 2016 results, which show continued growth in its global expansion, its topline revenue and its bottomline.
The company’s topline revenue grew by 16% to SGD 105,1 million, EBITDA grew 56% to SGD 41,2 million, and EBIT grew 117% to SGD 34,6 million.
In reporting its 2016 numbers, YuuZoo has decided to no longer recognise revenue based on the valuation of the shares it has received in payment for its franchise licenses. The company instead sets a price on each license it sells based on the size of the addressable market and the combined ARPU (Average Revenue Per User) of e-commerce, advertising and games. The price set for all franchise licenses sold in 2016 are lower than the valuation of the shares YuuZoo has received. If YuuZoo had followed the 2015 principle of booking revenue based on valuation, its 2016 EBITDA would have been S$ 53,3 million, and the EBIT S$ 47,9 million.
James Sundram, who in October 2015 was appointed as Chief Executive Officer (CEO) of YuuZoo had to resign in October 2016 for health reasons.
While YuuZoo under the leadership of the 2016 management team did not meet the targets set by YuuZoo’s board including that of the Company becoming cashflow positive, the Company showed increased revenues in all its key sectors; e-commerce, sale of branded networks and sale of franchise licenses, and signed several new agreements which are expected to generate revenues in 2017 and beyond.
Those of YuuZoo’s franchisees that launched commercial operations in 2016 also showed revenues that either were better than budgeted or in line with budgets in the areas they have focused their marketing on, which primarily was games, sale of networks and payments.
In March 2016 YuuZoo announced that it had concluded the Electronic Sports China Cup (ESCC) Online Gaming Clubs Invitational. ESCC is considered China’s top e-sport events which YuuZoo, through its subsidiary YuuGames, co-hosted together with China Animation Group and the Chinese Ministry of Culture, the government body regulating internet & game cafés.
YuuZoo also announced that it had signed an agreement with Alibaba Sports Group (“AliSports”). Under this agreement, YuuZoo, through YuuGames, will organise and run the AliSports World Electronic Sport Games (“WESG”), as well as manage the E-Sports Clubs Competition Center for Alibaba throughout China.
In April 2016 YuuZoo announced that it had signed a franchise agreement with Busca Corp. in Mexico to incorporate YuuZoo’s fully-owned payment service provider, YuuPay, into the online store of LevelUp.com. The website is one of Busca Corp’s properties, and is the leading online video game community for gamers in Mexico.
In June YuuZoo announced that it had signed an agreement with SportsHero, Asia’s first real-time fantasy sports app and social prediction platform, to bring SportsHero to YuuZoo’s network of over 118 million consumers across 164 countries.
In August YuuZoo launched in Nigeria, Africa’s largest market with a population of 182 million, a new social e-Commerce platform for the SME sector, “SME Arena”, built and managed for Etisalat Nigeria, the fully owned Nigerian subsidiary of UAE-based Etisalat, the Middle East’s leading telecommunications operator.
In October YuuZoo announced that its agreement with Alisports, a subsidiary of Chinese e-Commerce giant Alibaba, for the management of Alisports eSports Arenas throughout China, had been extended to 5 years from the initial period of 1 year.
In December YuuZoo announced that it had penetrated the Indian market by selling a regional franchise license to iComp Digital Media, a company which is part of iComp Solutions Group, the leading distributor and largest partner of Apple India. IComp. Through the sale of the franchise license, YuuZoo will gain a strong foothold with a strong and well-established franchisee in the world’s second largest country and the world’s fastest growing online market.
In December the Company also announced the launch of its YuuWallet, a proprietary electronic wallet designed for use in developing markets as well as developed markets with low credit card penetration.
YuuWallet enables fast, easy and secure payments without credit cards. In addition to use for payments, YuuWallet also can be used for sending, receiving and withdrawing money worldwide. It covers the full range of payments and money transactions, from large amounts to micro-payments for e.g. digital content payments.
In December YuuZoo also announced it had signed an agreement to buy a stake of Relativity Media, one of the world’s largest independent movie studios and entertainment groups, with an option to increase its investment to a majority stake over the next 24 months.
Finally also in December YuuZoo announced the successful launch of a video streaming application for Redeemed Christian Church of God (RCCG), one of the world’s largest and fastest growing churches. The app, named “BRedeemed TV”, allows RCCG’s more than 50 million followers in 189 countries to upload, select and watch and listen to video and audio content uploaded by RCCG or the followers themselves.
Outlook for FY2017
Says Thomas Zilliacus, YuuZoo’s Executive Chairman & temporary CEO : “2016 was a year of good growth in all sectors of our business. What the management however failed to achieve was to become cashflow positive. Part of this was due to expenses growing faster than budgeted, which also resulted in a lower cash balance than what was healthy. Since taking over as temporary CEO from January 2017, I have focused on cutting costs and growing the cash balance while also growing the business. The costs have been cut to approximately half of what they were in December 2016. The cash balance has more than quadrupled since October 2016.
The focus for 2017 will be on managing and improving the many products YuuZoo already has launched or has chosen to launch, and to support and manage huge YuuZoo’s network of franchisees and partners. While we want to continue to grow our network of partners and franchisees, execution of the many agreements we already have signed will be given priority. We have franchisees and partners in 69 countries with a combined population of more than 4 billion. We have launched hundreds of vertically integrated social commerce networks. All of this puts YuuZoo is in a very strong position. We will therefore focus on execution of the deals YuuZoo has signed, and on generating strong topline as well as bottomline growth.
Achieving a cashflow positive status is another top priority for 2017. We will operate with a lean and flexible organisation where costs are kept in check and allowed to grow only once we see revenues growing” he added.
For more information, please contact:
Chief Financial Officer
Headquartered in Singapore and listed on the SGX mainboard (SGX: AFC), with access to over 118 million registered users and hundreds of millions of TV viewers across 164 countries, YuuZoo in a unique way combines social networking, e-commerce, games and payments in a mobile-optimized, fully localized “Tribal Marketplace”, where the consumer can choose the Tribe he wants to join and access hundreds of tribal & targeted social networks, shops and entertainment through one single login. All networks are by franchisees localized for each market as comes to language as well as merchandise and design. Based on this business model, unique in the digital space, YuuZoo is able to grow internationally at a very low cost. To see the networks, log on to: www.yuuzoo.com. For more information about the company, log on to: www.yuucorp.com
An exchange rate of USD1:SGD1.3805 has been adopted for the conversion of USD to SGD.