Interactive Investor Update Amsterdam: Icecat’s Quest to Cover any Product on Sale


Yesterday, at the annual investor meeting in Amsterdam, Icecat CEO Martijn Hoogeveen presented in a highly interactive meeting, the business results of 2018. See the full presentation (pdf). Earlier that morning the general meeting of shareholders (pdf) has approved the 2018 report and management policies. The 2018 annual report and fast growth results have been published earlier.

Quest for Global Coverage

The progress regarding non-financial KPIs relate to the mission of Icecat to support any buying decision in any country, with any information that is relevant. Especially the sharp increase in editor productivity and Product Data-Sheet production by 140%, is one necessary stride forward in Icecat’s quest to eventually cover all the 100s of millions of products that are on sale. Many more of such steps need to be taken in the coming years to be able to fully cover any ecommerce portfolio.

Q&A Investors

  • What non-financial KPI is most strongly linked to financial performance?
    All KPIs are correlated to Icecat growth. The number of connected technical platforms is maybe the most close predictor: the growth by 13% is – partly accidentally – the same figure as the organic growth percentage of Icecat.
  • How important are Product Data-Sheet productivity gains?
    For our mission to cover any product sold in the world with a PDS, it’s critical to rapidly increase both our production and our productivity. Major marketplaces in large markets typically can contain some 100 million of different products. We need to double our production a few more times to better fulfill our mission. It also better positions us a strategic partner of major ecommerce marketplaces anywhere in the world.
  • Why not fully optimize profits yet?
    For a fast-growth company in a fast-growing, new market, it would be a major mistake to start maximizing profit too quickly. We first invest in everything that we believe helps with winning market share. To finance growth, we contain costs. We provide free content and free cloud services, as an investment in market share in the PIMS (product information management & syndication) markets. We believe that at a later point in time, the up-sell revenues will kick in.
  • Is the Icecat share price expensive (i.e, the income per share is low)?
    We don’t fully optimize profits yet as explained above. We focus on maintaining fast-growth. When we have matured and our PIMS market has matured, we will shift focus to profit optimization. In our sector, fast-growth companies are valued based on revenues multiples between 7 and 15. Ex ventures, we calculate currently with a revenue multiple of around 10 for Icecat, which came down from around 14-15 at the IPO in February 2017. Great progress.
  • What do you do with cryptos/tokens?
    We continue to pilot with ICURY (ICY), which is based on etherium (ERC-20). Around 100 users participate in the pilot. We believe it plays already a role as a loyalty instrument. Our investments are more on R&D level, and are limited. Till we fully understand the potential impact and how to apply and roll it out in our ecosystem.
  • What is the Free Float now after all transactions?
    As mentioned in the annual report, the free float has increased to 6.6%. Because of further acquisitions, in which part of the acquisition is paid with shares, the free float might increase further. Till now, there was after the IPO no dilution.
  • Are you busy with new acquisitions now?
    Recently, as published, we finalized the acquisition of reviews aggregator Testseek. Currently, we are fully integrating this business line in Icecat. We have more take-over opportunities, and expect to do more small acquisitions in the coming periods.
  • How important are acquisitions for growth?
    During 2018, our organic growth was around 13%. Acquisitions added around 6% in growth. A balanced organic and buy & build strategy is – in our opinion – the best way to accelerate growth, win global market share, and create shareholder value.
  • Should you raise new capital for acquisitions?
    Till now, we can finance acquisitions from our cash-flow and profits. As we focus on smaller, strategic and highly synergistic acquisitions, given the high risks associated with acquisitions, we can currently continue to finance them ourselves. Our current bandwidth is acquisitions with an impact of up to 10% of our revenues. This limits the take-over risks.
  • The share price impact of the increased free float is limited…
    Indeed, there was till now no noticeable impact of increasing the free float, and paying acquisitions partly with Depository Receipts of Icecat shares (DRs). We mitigated risks by negotiating partial lockups with such new DR holders: they are not allowed to trade below the last market price on NPEX. This worked.

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