Statutory auditor’s report on the consolidated financial statements
- Another year of double-digit growth, with revenue up 11% for 2018
- Huge success of Sales & Marketing AI solution take-off (up 46%)
- Operating profit above expectations (up 10%) − ahead of acquisition integration plan
- Growth likely to accelerate in 2019
Olivier Novasque, founder and CEO of Sidetrade, had this to say:
“2018 was a real turning point in Sidetrade’s history and a major milestone in its development. In less than eighteen months, we finalized the integration of our three acquisitions. We smoothly merged all our departments, eliminating any potential losses. This convergence, backed by major investments, allowed us to launch a unique, comprehensive AI solution for the Sales & Marketing teams of large companies. Already an enormous success in a wide range of industries, the Sidetrade Sales & Marketing AI solution generated revenue of nearly €4M (up 46%) and 50% of new customers in 2018.
Our drive to innovate paid off with a huge introduction of new technologies in our core Financials AI business, which now has a considerable lead on the market. The impact of this will be seen in 2019 income. Double-digit growth in revenue and a solid rise in operating profit attest to the success of our acquisition plan, especially considering how quickly it was carried out.
Sidetrade has what it takes to lead the way in AI for the entire B2B customer cycle. More than ever, we are geared up to capture this thriving market and significantly accelerate growth in 2019. »
Another year of double-digit growth: Revenue up 11%, Operating profit up 9%
| SIDETRADE GROUP (MILLION EUROS) |
2018 | 2017 | VARIATION (%) |
|---|---|---|---|
| REVENUE | 24,1 | 21,6 | + 11% |
| OF WHICH SALES & MARKETING AI |
3,8 | 2,6 | + 46% |
| AI FINANCIALS | 20,3 | 19,0 | + 7% |
| OPERATING PROFIT | 2,3 | 2,1 | +10% |
| NET PROFIT | 2,2 | 2,0 | +9% |
The 2018 consolidated accounts have been reviewed by our statutory auditors. Their certification report will be issued after finalization of the procedures required for the Annual Report.
Huge success of Sales & Marketing AI solution take-off (up 46%)
2018: fourth consecutive year of double-digit growth in revenue.
Sidetrade confirms the commercial success of their Sales & Marketing AI business, which leapt to €3.8M, up 46%. This performance shows just how effective the solution is and validates Sidetrade’s strategic choice to extend their AI offering to the entire customer cycle. Sidetrade also reinforced their core Financials AI business; which rose 7% to €20.3M, considering a higher base effect.
2018 also saw the phase-out of B2C services (outsourcing of recovery from consumers), no longer considered strategic in Sidetrade’s new positioning, now focused on AI dedicated to B2B customer relations. Run from the shared services center in Dublin, this business represented revenue of €2M in 2018. Its phase-out in Q4 of 2018 was anticipated in terms of resources, and its impact on margin in the next fiscal year should be negligible.
Operating profit above expectations (up 10%) − ahead of acquisition integration plan
Operating profit reached €2.3M in 2018, up 10% against the previous year (€2.1M). This very nice performance can be explained by a €2.8M increase in gross margin, reaching €18.1M, i.e. 75% of income. SaaS subscriptions now contribute 90% of this gross margin (vs 86% in 2017) confirming the incremental profitability of Sidetrade’s pure SaaS model.
2018 was also spent integrating three newly acquired start-ups and eliminating their losses (€1.3M). At the same time, Sidetrade boldly merged the different businesses into a single sales force marketing both Sidetrade AI services: Sales & Marketing and Financials. This dramatically boosted productivity.
Sidetrade also launched an investment program with an additional €2.8M for R&D resources to finalize the convergence of the three acquired technologies and additional Sales & Marketing resources to handle the new business.
Operating profit included a €1.8M research tax credit (vs €1.5M in 2017) as well as activation of marginal R&D costs (€0.2M -identical to 2017).
Income tax payable is estimated at – € 0.05M in 2018, vs €0.05 M€ in 2017.
Net profit was €2.2M up 9%.
A solid financial structure
Sidetrade maintains a solid financial structure with gross treasury of €5.5M and financial debt kept down to €0.4M. Sidetrade holds 76,000 of its own shares for a value of €3.8M on 31 December 2018.
Growth likely to accelerate in 2019
The paradigm change initiated by Sidetrade in late 2016, with the acquisition of three AI start-ups, enabled the company to expand its services to the entire customer value cycle. The convergence of three different AI technologies, along with an ambitious investment plan, enabled the company in just 18 months to provide a first-of-its-kind service that has been extremely well received by the market since 2018.
Let us recall that in 2013, Sidetrade laid the foundations for true innovation by creating one of the very first data Science Lab in France. The lab now employs over a dozen scientists, split between France and the UK, developing algorithms by analyzing the 230 million B2B transactions in Sidetrade’s cloud (through the Financials AI business), combined with millions of unstructured public records collected from multiple sources (e.g. company registries as Companies House, semantic analyses of corporate websites, weak signals from social networks).
Today, Sidetrade’s unique Artificial Intelligence platform called Aimie is one of the most advanced technologies on the B2B market. Aimie provides predictive analytics for the entire customer life cycle and makes practical recommendations to thousands of operational staff every day. Aimie identifies the best leads, detects upsell and cross-sell opportunities, and preempts customer churn. At a time when “customer experience” drives business, Aimie’s immediately actionable recommendations are precious for accelerating growth.
In 2019, Sidetrade will be following through with the R&D work started in 2018, massively integrating new Artificial Intelligence technology into their core AI Financials business. The aim is to radically accelerate the order-to-cash cycle using Machine Learning, Deep Learning and Natural Language Processing at the heart of every component. Results from the Sidetrade Data Science Lab have been very encouraging. For example, follow-up actions have been shown to be 51% more effective when they follow Aimie’s recommendations (65% vs 43% success rate for getting payment within five days). Team productivity also increased by around 53%. A pilot study is now under way under real conditions with Sidetrade customers. Initial results are very promising. Now that human labor is considered a costly resource to be used sparingly, a solution that augments human capacity is more than welcome.
With exciting technological breakthroughs, a unique approach encompassing the entire customer journey, and ambitious investments in Sales & Marketing resources, Sidetrade is ideally positioned to seize the opportunity of the booming B2B AI market. Like for like (excluding B2C), Management is looking forward to even better growth in fiscal year 2019.
ALTO Invest is an independent management company that makes private equity investments. ALTO Invest has just boosted their stake in Sidetrade, the artificial intelligence innovator, to 5.04%, by acquiring Sidetrade shares on the market.
“Sidetrade is one of the few pioneering listed companies in the word of SaaS software editors. The quality of their management, together with their strategic positioning in B2B customer relations, convinced us to invest in them. Sidetrade’s development of new AI-based business solutions shows their determination to break new ground. They are trailblazers in their field”, said Franck Halley, Managing Director of ALTO Invest.
ALTO Invest is a specialized asset management firm which invests in privately-owned and publicly-listed SMEs seeking to grow through innovation. In 2011, ALTO Invest became a Sidetrade shareholder and has since supported and guided Sidetrade’s international development.
Sidetrade is one of today’s market leaders in B2B Artificial Intelligence solutions. Sidetrade provides a unique intelligent assistant to accelerate business growth, especially for Marketing, Sales and Finance teams.
Olivier Novasque, Founder and CEO of Sidetrade, commented:
“I wish to thank ALTO Invest, one of our longstanding shareholders, for their trust. Artificial Intelligence is on its way to becoming a crucial asset for top-performing businesses. We have given ourselves the resources to move fast and take a considerable lead in the market. »
As part of the liquidity contract signed by Sidetrade with Gilbert Dupont broker, the following assets appeared on the liquidity account as of 31st December 2018:
- 3,793 Sidetrade shares
- €113,182.22 in cash
As a reminder, the following assets appeared on the liquidy account as of 29th June 2018:
- 2,553 Sidetrade shares
- €198,346.27 in cash
- Another year of double-digit growth, with revenue up 11% for 2018
- Huge success of Sales & Marketing AI solution take-off (up 46%)
- End of B2C Services in Q4 2018
Another year of double-digit growth, with revenue up 11% for 2018
Sidetrade’s 2018 revenue was €24.1m, up 11% against 2017. This double-digit growth proves the value of the 2018 roadmap. Olivier Novasque, Founder and CEO of Sidetrade, had this to say:
“Following our three acquisitions in 2017, we charted a new course aiming to put Artificial Intelligence solutions for the entire customer journey within the reach of every business. 2018 was an amazing year for us. Our Financials AI solution continued to do well, and our brand new Sales & Marketing AI solution was a huge success – with about €4m in revenue. This concretely shows that Sidetrade has moved into its next phase of development. In barely 18 months, we have created one of the most advanced B2B Sales & Marketing AI solutions in the world (by bringing together the technologies of the three start-ups we acquired) and converged all of our teams with the same business process and IT systems.
Most of all, we have been able to get our Sales & Marketing offer off the ground while keeping up the strong growth of our regular line of services. In 2018, Sales & Marketing AI actually accounted for over half of new contracts. The next step is to give even more clients access to Artificial Intelligence insights. AI is now the key to all our solutions, empowering operational teams to generate greater value for their companies. Clearly, we are at the dawning of a new era!”
| SIDETRADE GROUP (MILLION EUROS) |
2018 | 2017 | VARIATION (%) |
|---|---|---|---|
| REVENUE | 24.1 | 21.6 | + 11% |
| OF WHICH SALES & MARKETING AI |
3.8 | 2.6 | + 46% |
| FINANCIALS AI | 20.3 | 19.0 | + 7% |
Sidetrade has achieved technological maturity and high innovation capacity, earning five awards in 2018: Business Award France, in the FinTech category, awarded by the French Chamber of Commerce & Industry; Fast Growth Icons 2018; PwC Digital Champions; Forbes Futur40, and the 2018 Innovation Competition in the digital category
In 2018, Sidetrade was one of the rare Euronext Growth listed companies in the promising AI sector.
Huge success of Sales & Marketing AI solution launch (up 46%)
In 2018, Sidetrade undertook several decisive added-value projects, including its unique B2B AI platform covering the entire customer cycle, from prospecting to payment collection. Outstanding progress was achieved in two lines of business.
- Sales & Marketing AI revenue jumped to €3.8m, up 46%. This leap shows that Sidetrade has repositioned to meet the needs of a range of industries in different countries including: Transport (Heppner in France and Geodis in the UK); IT (Advanced Computer Solutions and Heraeus in the UK, Cision and Visiativ in France); Banking (Bpifrance); the Public sector (Ile-de-France region), Services (Viparis and Idex in France), Chemicals (Croda International in the UK), Industry (Eurocell and Malvern in the UK, Würth in Belgium). These organizations all use Sidetrade’s powerful predictive algorithms to identify new markets, develop additional sales, and improve retention rate.Our Sales & Marketing AI business has proven to be a driver of solid, sustainable growth. It accounted for 50% of the year’s new contracts. This performance shows the attractiveness of Sidetrade’s Sales & Marketing AI solution, based on the convergence of three AI technologies.
- Financials AI revenue reached €20.3m, up 7%, given its historical position as a core contributor to Sidetrade’s income. Prestigious new clients include: Andréas Stihl, France Télévisions, Groupe Fed, Husqvarna, Paredes in France, and Bunzl, Finning International (Caterpillar), Freemantle (RTL Group), Inmarsat, Pharmanovea, and The Parts Alliance in the UK.
End of B2C Services in Q4 2018
Sidetrade announced the end of B2C Services (outsourcing of recovery from consumers), a business line started in 2015, which had become non-strategic in Sidetrade’s new positioning, centered on AI dedicated to the B2B customer journey. Managed at the shared services center in Dublin, B2C Services generated revenue of €2m in 2018.
The phase-out of B2C in Q4 2018 had been anticipated in terms of resources, and its impact on margins in the following financial year will be negligible.
Like for like, Sidetrade management is confident that they will again achieve double-digit growth of its revenue in 2019.
Olivier Novasque, Founder and CEO of Sidetrade, had this to say :
“We are proud to be a part of the EnterNext® PEA-PME 150 index, a new benchmark, which enriches the family of Euronext indexes dedicated to European small- and mid-cap equities.”
A PEA-PME is a French shares savings plan (French Plan d’Epargne en Actions) to finance small and medium enterprises (French Petites et Moyennes Entreprises).
PEA-PME-eligible funds now represent nearly €5bn in assets. They have been among the best sources for raising capital since the start of the year.
One of the rare Euronext Paris-listed companies for those seeking to invest in artificial intelligence, Sidetrade is PEA-PME eligible. Technology is shaking up the economy and Sidetrade is set to be a key player in this new industrial revolution.
The global AI market could well be worth over $15.7bn euros by 2030. According to PWC, AI is bound to boost productivity and sales. Companies must embrace artificial intelligence if they are to keep or gain a competitive edge.
The EnterNext® PEA-PME 150 is a stock market index for French PEA-PME eligible shares. Broader than the CAC PME index, the EnterNext® PEA-PME 150 is composed of 150 of the most liquid small and medium securities. The weight of each security and the full rules of the index will be posted on the Euronext website on 17 November.
Investors are invited to watch the Sidetrade video (< 2 minutes).
Revenue up 13% in the first nine months of 2018
Olivier Novasque, Founder and CEO of Sidetrade, had this to say :
“This amazing 13% growth in the first nine months of the year results from our success in harnessing the convergence of three new Artificial Intelligence technologies to offer our clients exciting new possibilities.
This is a stimulating time for us, with the development of our new AI Sales & Marketing business, which has given us tremendous momentum and is creating undeniable value for the group.”
| SIDETRADE GROUP (IN € MILLION) | FIRST 9 MONTHS 2018 | FIRST 9 MONTHS 2017 | VARIATION (%) |
|---|---|---|---|
| REVENUE | 18.2 | 16.1 | +13% |
| OF WHICH AI SALES & MARKETING | 2.7 | 1.8 | +48% |
| OF WHICH FINANCIALS | 15.4 | 14.3 | +8% |
At the end of the third quarter of fiscal year 2018, the Sidetrade group continues to show double-digit growth (+13% against last year) with revenue of €18.2m. As with the first six months of the year, growth has been upheld by all of our business lines and especially driven by the takeoff of our new AI Sales & Marketing business (up 48%). Our Financials business, historically a strong contributor, continues with solid 8% growth. Our AI Sales & Marketing solutions have been performing excellently and are expected to remain a growth driver in the future.
Double-digit growth is expected for the entire 2018 financial year.
- Double-digit growth in revenue (14%)
- AI Sales & Marketing solutions kick off with 55% growth
- Net profit up 16%
- Very solid financial health
Steady double-digit growth in revenue (14%) and net profit (16%)
Olivier Novasque, SIDETRADE Founder and CEO, states:
“In less than eighteen months, Sidetrade has come to a turning point in their history with three acquisitions. We have moved from our position as a European SaaS leader specialized in Financial customer relations, to an Artificial Intelligence provider covering the entire spectrum of customer relations, from generation of sales opportunities to cash flow acceleration. In the first half of this year, we have already achieved convergence of our teams in every department, finalized a unique Sales & Marketing Artificial Intelligence platform blending three different recently acquired technologies, and successfully launched a new service in all the countries where we operate.
Although it is still too early at this stage to draw conclusions, we can say that we are off to an encouraging start with very high growth. These initial results are the concrete outcome of our AIM2020 strategic plan. AI is becoming an essential– perhaps even vital– asset for top-performing businesses. We have enabled ourselves to move quickly and gain a considerable lead in the market. We have faith in our capacity to achieve around 40% growth with our new AI Sales & Marketing offering in 2018 and 2019.”
| SIDETRADE GROUP (IN € MILLION) | 1ST SEMESTER 2018 | 1ST SEMESTER 2017 | VARIATION (%) |
|---|---|---|---|
| REVENUE | 12.2 | 10.8 | +14% |
| OF WHICH AI SALES & MARKETING | 1.7 | 1.1 | +55% |
| OF WHICH FINANCIALS | 10.5 | 9.7 | +8% |
| OPERATING PROFIT | 1.2 | 1.1 | +3% |
| NET RESULT | 1.1 | 1.0 | +16% |
AI Sales & Marketing solutions kick off with 55% growth
In the first half of 2018. the Sidetrade group continued its double-digit growth-up 14% against the first half of 2017.
Driving this momentum was the dynamism of the new Sales & Marketing offer, which contributed more than their core Financials offer, given base effect. Over the last eighteen months, the Sidetrade group merged three technologies from acquisitions to create a unique AI Sales & Marketing platform.
During this watershed period, Sidetrade extended their services to the customer lifecycle with:
- AI Sales & Marketing (for sales and marketing teams)
These solutions use AI to boost customer acquisition, identify cross-sell/upsell opportunities, and predict churn
- AI Financials (for finance teams)
These solutions use AI to reduce payment delay, anticipate payment behavior, manage credit risk, accelerate dispute resolution, generate additional cash and enhance customer satisfaction.
In the first half of 2018, AI Sales & Marketing performed remarkably. With revenue up 55% just eighteen months after launch, these solutions are sure to be a growth driver for the future. AI Financials grew surely and steadily by 8%.
The new product mix owes its success to Sidetrade’s acquisition strategy, the ability of the R&D department to integrate new technologies, and the drive of the Sales force to present a comprehensive range of solutions. Given these strengths, the group will forge ahead with even stronger sales teams to take the lead in the Artificial Intelligence market.
Net profit up 16%
The group’s operating profit reached €1.2 million this half, up 3% compared to the same period last year.
The first six months of the year have essentially been devoted to finalizing the integration of three acquisitions, and eliminating the losses of acquired startups (€0.8 million) by pooling resources and unifying support functions. In the meantime, the group invested an additional €2.1 million to accelerate its growth.
Operating profit includes a research tax credit of €0.8 million (vs €0.5 million in the 1st half of 2017) and activation of R&D costs of €0.1 million (identical to the 1st half of 2017).
The acquisitions had a positive impact on corporate income tax (€0.13 million), explaining a big 16% increase in net profit.
Solid financial health
The Sidetrade group is in solid financial health, with treasury of €5.5 million on 30 June 2018, and virtually no debt (€0.4 million)
The group holds 74,940 of its own shares for an estimated value of €4.7 million on 30 June 2018.
Very strong Q1 2018: Revenue up 14%
| REVENUE* (IN € MILLIONS) SIDETRADE GROUP |
2018 | 2017 | VARIATION |
|---|---|---|---|
| Q1 REVENUE | 5.9 | 5.2 | +14% |
In the first quarter of 2018, Sidetrade Group generated consolidated revenue of €5.9 million, an increase of 14% compared to the first quarter of 2017, which already saw a 21% increase.
The Board of Directors is confident of its ability to continue this upward growth trend across business activity in 2018.
Olivier Novasque, SIDETRADE Founder and CEO, states:
“As we anticipated, Sidetrade has delivered a successive thirteenth quarter of double-digit revenue growth, confirming its accelerated growth. The results speak for themselves and our excellent start of the year underlines both the relevance and the strong early execution of our new strategic plan Aim2020. Much remains to be done but we have already maximized this first quarter by streamlining the sales and marketing teams from our recent company takeovers to establish a single unified organization ready to deliver our offering across all of the countries in which we are present.
This exercise in rationalization, integration, and synergy gives us unique sales and marketing clout that we are now in a position to leverage for our entire offering and fulfill our aim of democratizing Artificial Intelligence and putting it the benefit of our business customer market. Our convergence efforts now have us ideally aligned to achieve our goal: be the Artificial Intelligence customer engagement platform of choice for today’s leading companies.”
- Impressive growth in 2017: Revenue up 20%, Net Profit up 13%
- Strong Backlog growth: €31M (+20%)
- 2018: converging toward AI M 2020
Further year of strong growth: 20% increase in revenue and net profit up 13%
| CONSOLIDATED FINANCIAL STATEMENTS* (IN € MILLIONS) SIDETRADE GROUP |
2017 | 2016 | VARIATION |
|---|---|---|---|
| REVENUES | 21.6 | 18.1 | +20% |
| OPERATING PROFIT | 2.1 | 2.1 | +3% |
| NET PROFIT | 2.0 | 1.8 | +13% |
2017 was another year of solid growth for the Sidetrade group, with revenue of 21.6 million (up over 20%). This consistent performance, quarter after quarter, bears out the effectiveness of the Group’s strategic investments and attests to our leadership in AI solutions for managing customer engagement.
Olivier Novasque, SIDETRADE Founder and CEO, states:
“2017 was a banner year for the Sidetrade group. In a few short months, we achieved a major milestone with record growth in both revenue and net profit. Because of its leadership in Customer Financial Relationships, with hundreds of millions of cloud-based B2B data and the technological edge of our three acquisitions, Sidetrade has become one of the most innovative companies in the field of Artificial Intelligence applied to Customer Engagement.
With governments making Artificial Intelligence development a national cause, and CEOs wondering how this technology is going to disrupt their industries, we have an incredible opportunity to bring AI to companies and make it a part of their everyday business. Faithful to our values, we take a pragmatic approach to AI, focusing on how it can augment the capabilities of marketing, sales and financial teams to grow revenues and accelerate cash generation. Our mission is to be a strategic partner for our clients, and in 2018, we will have the resources to do just this.”
Strong Backlog growth: €31M (+20%)
2017 was also the first year of big wins with our new Sidetrade Growth solutions. Nine deals were signed in the second half of the year. This ramp-up shows that the Group’s strategy of covering the entire customer cycle is working. Companies from a range of sectors- Transport (Geodis UK), Software (Maileva, OneAdvanced), Recruitment (Groupe Leader) and Industry (Malvern PANalytical, Würth) now use Sidetrade’s powerful predictive algorithms to boost retention rate and develop sales.
Recurring SaaS revenue from multi-annual contracts provides excellent medium-term visibility. Yearend SaaS backlog was €31 million (up 20%.) This is sure revenue but could not be posted to Groups accounts by 2017 closing.
Net profit up 13%
Operating profits reached €2.13 million, up 3% against the same period last year.
This is remarkable, given the €1.3 million loss recorded by BrightTarget, Iko System and C-Radar, which entered the consolidation scope in 2017. Like for like, the Sidetrade group made a record operating profit of €3.4 million, up a whopping 65%. The year 2017 saw the development of a promising synergy with the acquired startups.
This operating profit includes a €1.34 million tax credit for research (vs €0.9 million in 2016), as well as €0.2mn in capitalization of R&D expenses (same as last year).
Tax burden on 31 December 2017: €0.1 million (Est.) vs €0.2 million on 31 December 2016.
Bottom line: €2 million net profit, up 13%.
Rock-solid financial health
Despite three acquisitions, the Sidetrade group remains in excellent financial health. Financial debt is limited to €0.4mn. Treasury was €6 million. It should also be recalled that Sidetrade holds 89,000 of its own shares, valued at €6 million on 31 December 2017.
2018: converging toward AIM2020
The Sidetrade group took a decisive step forward with the acquisition of three AI startups, and achieved financial results in line with development strategy.
2017 saw the first positive effects of the AIM2020 strategy aiming to make Sidetrade a leader in Artificial Intelligence for managing customer engagement.
In this time of digital transformation, leading companies are looking to reinvent their customer relationships; forward-thinking businesses are using AI to expand revenue and accelerate cash generation.
All over the world, AI research has become the subject of presidential speeches (Vladimir Putin, Emanuel Macron) and government reports (Cedric Villani). Sidetrade is uniquely positioned to take up this challenge and serve as a strategic partner for future-minded businesses.
Sidetrade management has every confidence that the group will achieve double-digit growth in revenue once again in 2018.
Sidetrade has two priorities in 2018:
- launch a unique AI Sales & Marketing platform incorporating its three acquisitions
- establish a single groupwide Sales & Marketing organization, with extra capacity in countries where the group already does business, to fully seize the growth opportunities of the AI market in the years to come.
Finally, let us recall that Sidetrade’s AIM2020 plan is expected to double the Group’s revenue by the year 2020.