Interim Report January-September 2020
- I am happy to report that Readly delivered stable growth for the third quarter, well in line with our expectations. We saw an increased growth rate compared to previous quarters in 2020, with all markets contributing both in terms of the number of subscribers and revenue. Among our core markets, performance in the UK was especially strong, with more than 50 per cent revenue growth and a strong trend for subscriber acquisition. A key part of Readly’s growth strategy is to optimise marketing investments and expanding partnership channels. In this regard, the UK is a prime example, where we have also taken a big step in our portfolio of daily news sources, says Maria Hedengren, CEO of Readly
Readly continue to see good demand in the third quarter and increased its growth rate for the second consecutive quarter, which shows that improved brand awareness and broadened quality content are generating results. All markets made positive growth contributions during the third quarter, where the UK stood out among our core markets. Subscriber growth increased during the quarter, driven mainly by partnerships and channel improvements. Readly continues to invest in conversion marketing as well as in brand-building activities, which is benefiting growth both short and long term. During the third quarter the gross contribution margin was -15.8 per cent, which is a significant improvement compared to the preceding quarter, when it was -27.8 per cent. At the same time, the growth rate for full-paying subscribers increased over the preceding quarter, which is an example of how marketing investments are affecting growth not only in the current quarter.
Readly’s 800 publisher partnerships, together with our subscribers and partners, make up the core of our business. Our product is based on an inspiring, engaging and reliable offering of titles that are currently available in 17 languages. Through Readly, publishers gain access to additional revenue at no extra cost along with the opportunity to reach new readers in a global market. Roughly 20 percent of the reading on our platform is enjoyed through international titles outside the subscriber’s country of residence. The fact that Aller Media and more than 60 other new publishers including a number of new daily newspapers, choose Readly, further demonstrates Readly’s business model and our scalable platform.
Since 17 September, Readly’s shares are traded on Nasdaq Stockholm Midcap. This is a milestone for Readly and we are happy to welcome thousands of new shareholders to be part our exciting growth journey. The broadened ownership also adds to our opportunities to drive the development of the digital magazine market.
Readly aim to create a great reading experience for subscribers and add value to its partners. Interest in Readly remains strong, with a broader readership base that appreciates the offering of editorially verified content. A growing offering of daily newspapers, more new partners that are marketing and reselling Readly subscriptions, growth in all markets, and increased brand awareness are strengthening Readly’s position as a market leader. Going forward, emphasis will be put on developing the product in order to further improve the experience on Readly’s platform. Digitalisation of the magazine industry is still in its infancy, and Readly is well positioned to continue leading the transformation of the industry.
| ||The number of full paying subscribers increased by 29.7 per cent, totalling 339,557 (261,828) at the end of the quarter.|
| ||Revenue for the period totalled SEK 93.4 million (69.3), an increase of 34.8 per cent compared with the same period a year ago.|
| ||Gross profit increased by 42.6 per cent to SEK 31.3 million (22.0), corresponding to a gross margin of 33.5 per cent (31.7).|
| ||The gross contribution margin for the period was -15.8 per cent (-6.8).|
| ||Operating profit was SEK -51.2 million (-33.4), corresponding to an operating margin of -54.8 per cent (-48.2).|
| ||Adjusted operating profit was SEK -42.0 million (-32.4), corresponding to an adjusted operating margin of -45.0 per cent (-46.8).|
| ||Earnings per share were SEK -1.6 (-1.3) before and after dilution.|
| ||Revenue for the period totalled SEK 254.0 million (191.2), an increase of 32.8 per cent compared with the same period a year ago.|
| ||Gross profit increased by 40.9 per cent to SEK 83.5 million (59.2), corresponding to a gross margin of 32.9 per cent (31.0).|
| ||The gross contribution margin for the period was -13.4 per cent (-4.9).|
| ||Operating profit was SEK -148.4 million (-97.9), corresponding to an operating margin of -58.4 per cent (-51.2).|
| ||Adjusted operating profit was SEK -130.0 million (-96.9), corresponding to an adjusted operating margin of -51.2 per cent (-50.7).|
| ||Earnings per share were SEK -5.3 (-4.2) before and after dilution.|
Presentation for investors, analysts and the media
Maria Hedengren, CEO, and Johan Adalberth, CFO, will present the results for the third quarter in an audiocast and conference call today, 12 November 2020, at 09.00 CEST. The presentation will be held in English.
To listen to the presentation by phone, please call:
SE: +46 8 505 583 53
UK: +44 3 333 00 92 72
US: +1 844 625 15 70
The report and presentation will be available for download at https://corporate.readly.com/sv/investerare/finasiella-rapporter-och-presentationer/.
For more information, please contact:
Contact information for investors and analysts:
Maria Hedengren, CEO Readly
Johan Adalberth, CFO Readly
+46 72 727 50 70, email@example.com
Annika Billberg, Head of Investor Relations Readly
+46 70 267 97 91, firstname.lastname@example.org
Contact information for media:
Linnéa Aguero, Head of PR & Communications Readly
+46 72 503 32 31, email@example.com
This information is inside information that Readly International AB (publ) is obligated to make public pursuant to the EU Market Abuse Act. The information was submitted for publication, through the agency of the contact person set out above, at 07.30 CEST on 12 November 2020.
Readly is the European category leader for digital magazines. The company offers a digital subscription service that gives customers unlimited access to nearly 5,000 national and international magazines – all in one app and at a fixed monthly fee. Readly has subscribers in more than 50 countries and content available in 17 different languages. In collaboration with around 800 publishers worldwide, Readly is digitalising the magazine industry. In 2019 revenues amounted to SEK 265 million. Since September 2020, Readly’s shares are listed on Nasdaq Stockholm Midcap. For more information, please visit: https//corporate.readly.com.