Team Internet (TIG) 2023年年度報告「AIM」.pdf

《Team Internet (TIG) 2023年年度報告「AIM」.pdf》由會員分享，可在線閱讀，更多相關《Team Internet (TIG) 2023年年度報告「AIM」.pdf（140頁珍藏版）》請在三個皮匠報告上搜索。

1、Team Internet Group PlcAnnual report 2023Team Internet Group Plc|Annual report 2023Creating meaningful and successful connections.Contents.Strategic reportPurpose,mission,strategy and values 1Our highlights 2Journey so far 3What we do 4Market opportunity 8Chairmans statement 12Investment case 13Chie

2、f Executive Officers report 14Our business model 20Our strategy 22Key performance indicators 25Section 172(1)statement 28Environmental,social and governance(ESG)29Chief Financial Officers report 57Risks 60GovernanceBoard of Directors 64Corporate governance 66Audit&Risk Committee report 71Remuneratio

3、n report 72Directors report 78Financial statementsIndependent auditors report 82Consolidated statement of comprehensive income 89Consolidated statement of financial position 90Consolidated statement of changes in equity 91Consolidated statement of cash flows 92Notes to the consolidated financial sta

4、tements 93Company statement of financial position 124Company statement of changes in equity 125Notes to the Company financial statements 126Particulars of subsidiaries 129Additional informationShareholder information 133Glossary 135PhotographerLayton Thompson1Team Internet Group Plc|Annual report 20

5、23Additional informationFinancial statementsGovernanceStrategic reportPurpose,mission,strategy and values.Strategic priorities:Purpose:To create meaningful and successful connections.Underpinned by our values:Creating value for stakeholders:Mission:By leveraging our people,businesses and technologie

6、s,we aim to drive information,deliver value and create growth for all.Read more on page 22 Read more in our people section on pages 45 to 56 CustomersInvestorsColleaguesPartnersRegulators and governmentsCommunitiesWe have the courage to do the right thing,even if its hard.We act like owners.We work

7、smart to build things we are proud of.And by working together,we win together.1 Organic growth4 Focused bolt-on M&A2 Operating leverage3 Competitive cost of capital2Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic report+15%Our highlights.Financ

8、ial highlightsShare buybackThe Group successfully completed its first share buyback programme of GBP 4.0 million worth of ordinary shares in January 2023,and a second share buyback programme commenced in May 2023 and was increased to GBP 34.0 million worth of ordinary shares in July 2023.By 31 Decem

9、ber 2023,the Group had repurchased a total of GBP 28.4 million(USD 35.6 million)worth of ordinary shares across the two programmes,with GBP 9.6 million(USD 12.2 million)remaining of the share buyback scheme at 31 December 2023.DividendOn 16 June 2023,the Group paid its inaugural final dividend of 1.

10、0 pence per share totalling USD 3.6 million,reflecting a renewed capital allocation geared towards greater return to Shareholders.Revenue growth (USD m)20222023728.2 836.9Net revenue/gross profit growth(USD m)+8%20222023177.7191.1Adjusted EBITDA growth (USD m)+12%2022202386.096.4Operating profit gro

11、wth (USD m)+26%2022202333.642.3+31%Net debt(USD m)2022202356.674.12023 highlights On 4 September 2023,to support our next phase of continued growth,the Group announced its rebranding from CentralNic Group to Team Internet Group,and effective that same day,the Groups shares commenced trading under th

12、e ticker TIG.The Financial Times listed Team Internet among the top 250 fastest-growing companies and among the top 50 fastest-growing technology companies in Europe.Acquisition of Adrenalads LLC,a business which has a rich history with Zeropark,on 31 August 2023 for an initial consideration of USD

13、2.1 million;the acquisition included deferred consideration of USD 0.2 million payable in February 2025.The Group adjusted its global office footprint to post-pandemic working realities,notably reducing cash outflow,lease liabilities and emissions.Appointment of Marie Holive as Non-Executive Directo

14、r and Chair of the Audit&Risk Committee on 24 April 2023.Organic growth and operating leverage,augmented by focused bolt-on M&A.+13%Organic revenue growth (USD m)20222023744.2838.13Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportJourney s

15、o far.2023Acquisitions:Adrenalads,Niche website portfoliosCAGR:71%USD 837m2022Acquisitions:VGL,Fireball,.ruhr TLD,M.A Aporia,Intellectual Property Management Company,Niche website portfoliosUSD 728m2021Acquisitions:SafeBrands,Wando,White&Case publishing network,NameActionUSD 411m2020Acquisition:Code

16、wiseUSD 240m2019Acquisitions:TPP Wholesale,HEXONET,Ideegeo,Team InternetUSD 109m2018Acquisitions:KeyDrive,GlobeHostingUSD 56m2017Acquisition:SK-NICUSD 32m2016Acquisition:Instra GroupUSD 29m2015Acquisition:dnsXpertsUSD 14m2014Acquisition:internet.bsUSD 8m2013Acquisition:DomiNICUSD 4m3Team Internet Gr

17、oup Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportTeam Internet has achieved a revenue Compound Annual Growth Rate(CAGR)of 71%since its IPO in 2013,driven by a blend of significant organic growth and the Groups ability to leverage the opportunity of acquis

18、itions through optimisation and synergies.4Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportWhat we do.Online MarketingCreating privacy-safe and AI-generated online consumer journeys that convert general interest online media users into co

19、nfident,high conviction consumers through advertorial and review websites.Wir bewerten unabhngig&objektiv.Recurring revenue modelRolling open-ended revenue share contracts14%Gross revenue growthGross revenueUSD 657.1million2022:USD 574.7 millionVisitor sessions5.9 billion2022:4.6 billionNet revenue/

20、gross profitUSD 131.7 million2022:USD 125.1 millionRevenue per thousand sessions(RPM)USD 952022:USD 105A leading global internet solutions company,operating in two highly attractive markets:digital advertising(Online Marketing segment)and domain name management solutions(Online Presence segment).Onl

21、ine PresenceA critical constituent of the global online presence and productivity tool ecosystem,where we serve as the primary distribution channel for a wide range of digital products.Recurring revenue modelAnnual subscriptions17%Gross revenue growthGross revenue179.8 million2022:USD 153.5 millionP

22、rocessed domain registration years13.8 million2022:13.2 millionNet revenue/gross profitUSD 59.4 million2022:USD 52.6 millionAverage revenue per domain yearUSD 11.32022:USD 10.0Team Internets brandsTeam Internets brands5Team Internet Group Plc|Annual report 2023Additional informationFinancial stateme

23、ntsGovernanceStrategic reportWhat we do.continuedOnline Marketing case study:In Online Marketing,Team Internet helps online consumers make informed choices an evergreen purpose.Gross revenueUSD 657.1 million+14%2022:USD 574.7 million 5Team Internet Group Plc|Annual report 2023Additional informationF

24、inancial statementsGovernanceStrategic reportWe do so by creating customer journeys that convert general interest online media users into confident,high conviction online customersWe engage by offering contact points on social media or native content networks,publisher websites and search engines in

25、 the form of ads for broad categoriesWe educate the consumer through easy-to-understand advertorials and review websitesBy working with world-leading aggregators,we have access to commercial inventory that closely matches the consumers intentTeam Internet is particularly good at this due to machine

26、learning on billions of consumer interactions,providing superb insights into the psychology of online consumers6Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportWhat we do.continuedAdditional informationFinancial statementsGovernanceStrate

27、gic report6Team Internet Group Plc|Annual report 2023What does it look like in real life?Consumers on social media are run through brief consumer guides before being referred to a recommended merchant.Social media user experienceSearch engine users are directed to review websites before buying the p

28、roduct of their choice at an e-commerce partner.Search engine user experienceOnline consumers value the noise reduction and privacy value is captured through commercial alliances.Online Marketing case study:continuedTeam Internet places ads for broad categories on social media,in this example,on Fac

29、ebook(1).If an online consumer is interested in the category,they click on the ad.1An online consumer is then forwarded an advertorial website where the online consumer learns what it needs and clicks on a link for a more specific category.2The online consumer is then presented with related search t

30、erms to further close in on their intent.3The online consumer is then shown the ad most relevant to their intent.Once the consumer clicks,Team Internet is paid.4The online consumer then arrives on the offering of the most relevant vendor,in this instance T-Mobile(2).51Team Internet places ads for pr

31、oduct categories on search engines.Due to a vast inventory of high-quality product review content,Team Internet would also appear high in the search ranking.2The online consumer is then presented a choice of relevant products where we identify the best,the most affordable,the best price-quality and

32、best seller products consumers are typically happy to adopt one of the four strategies.3The online consumer then clicks out to the merchant with the offer that comes closest to their intent or need.When the consumer checks out of the e-commerce partners site,Team Internet is paid.Net revenueUSD 131.

33、7 million+5%2022:USD 125.1 million(1)Facebook is an example of a partner.They provide traffic,and Team Internet pays for it.(2)T-Mobile is an example of a customer.Team Internet refers a customer and gets paid for it.7Team Internet Group Plc|Annual report 2023Additional informationFinancial statemen

34、tsGovernanceStrategic reportWhat we do.continued7Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportOnline Marketing case study:continuedNo.of visitor sessionsUSD 5.9 billion+28%2022:USD 4.6 billion Merchants:Merchants appreciate the pre-inf

35、ormed,high-intent online consumers who convert more frequently and return goods less often Increase their reach to media outside the media buying domain Pay a fee for the referral or a commission for a completed transactionValue captureOnline consumers:Only see the most relevant ads Never see malici

36、ous ads Only proceed if they interact(no auto forwarding/redirecting)Have more information to make a confident,informed choice Remain private as no third-party data is collected or sharedValue creationTeam Internet and its partners place a broad array of contact points in the form of adsTeam Interne

37、t pre-qualifies merchants to be in front of the consumerTeam Internet provides the consumer with helpful contentMerchant pays Team Internet,through an aggregator or directlyConsumer engages with a Team Internet ad on social media or the webConsumer engages with the,or one,of the proposed merchantsTe

38、am Internets AI-based,dynamically optimised portfolio of:Advertorial websites Comparison websites Special interest microsites8Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportMarket opportunity.The Online Marketing segment is taking advant

39、age of three megatrends.The ascendance of social mediaThe data privacy shiftRisk transformation opportunityThe online advertising landscape is steadily evolving towards a model where publishers bear more risk,transitioning from Pay Per Mille(PPM)to Pay Per Click(PPC),and now to Pay Per Action(PPA),w

40、here advertisers pay only for specific outcomes.This decade-spanning shift benefits those who can effectively manage conversion.Investments in companies like VGL Publishing and Adrenalads position us to thrive in this new paradigm.An alternative innovative approach involves engaging users with conte

41、nt that encourages endless scrolling,generating revenue through continuous ad impressions,an area that we are eager to explore.Lastly,there is also an opportunity to balance mismatches in supply and demand between search engines.In a world of heightened data privacy regulations,search engines hold a

42、 distinct advantage over social media platforms.Users direct expression of intent through search queries reduces the need for extensive tracking,aligning with privacy laws and minimising privacy concerns.Consequently,despite the continued growth in social media usage,advertisers are willing to bid h

43、igher click prices for search engine ads due to their efficiency in targeting and proximity to conversion,leading to a divergence in advertising yields.Our TONIC.platform aims to capitalise on this trend by bridging the gap between intent-driven search ads and the expansive audience on social media.

44、Over the past two decades,social media has revolutionised the paradigms of content creation and consumption.Platforms such as Facebook,Instagram and TikTok have led this transformative journey,ushering in the era of User-Generated Content(UGC),the Web 2.0.This pivotal shift,acknowledged by Time Maga

45、zine through its recognition of online users as Person of the Year 2006,underscores the increasing preference for content that resonates on a more personal and relatable level,challenging traditional Web 1.0 media landscapes and search engines it has spawned.9Team Internet Group Plc|Annual report 20

46、23Additional informationFinancial statementsGovernanceStrategic reportMarket opportunity.continuedThe Online Presence segment aims to optimise the domain name industry for greater efficiency.Optimising for efficiencyMove towards exotic domain names Team Internets influence enhances a digital landsca

47、pe which would otherwise be less accessible:approximately 4,000 ICANN accredited registrars and 1,500 top-level domains engaging in direct and cumbersome transactions.This would entail an overwhelming proliferation of contracts,technical integrations and monthly invoicing processes,cumulatively numb

48、ering in the millions.Our Online Presence segment plays an instrumental role in transforming this complex web into a streamlined and efficient ecosystem.Through our innovative solutions,we significantly reduce operational burdens,thereby elevating the industrys competitiveness and sustainability.Tea

49、m Internet stands at the forefront of the global online presence and productivity tool ecosystem,serving as a linchpin for businesses and organisations seeking to navigate the digital domain with ease and efficiency.With domain nearing full capacity,where virtually all meaningful combinations of let

50、ters and numbers have been registered,Verisign,the entity ,is navigating this saturation by implementing price increases.This strategy for revenue growth,driven by the scarcity of domain names and their escalating costs,is gradually shifting consumer interest towards alternative avenues,specifically

51、 country code top-level domains(ccTLDs)and newly introduced TLDs(nTLDs).These segments,which fall squarely within our realm of expertise,are witnessing an uptick in demand as market dynamics evolve.In this context,the advent of artificial intelligence(AI)stands to significantly influence the landsca

52、pe.AIs potential to pinpoint premium domain names across these exotic TLDs could redefine valuation standards and uncover untapped opportunities.Furthermore,the proliferation of AI-driven content farms is expected to catalyse a surge in domain creation activities.This trend not only underscores the

53、evolving nature of digital real estate,but also highlights our strategic position to capitalise on these shifts.Our proficiency in navigating the intricacies of country code and new TLDs positions us to leverage these developments,ensuring we remain at the forefront of innovation and growth in the d

54、omain industry.Committed to excellenceTeam Internet is committed to customer service excellence in all of its businesses,and this is particularly evident in our Online Presence segment where we consistently significantly outperform the targets established in our customer service level agreements(SLA

55、),as well as significantly outperforming against internal KPI benchmarks.On resolution of customer tickets,we are considerably ahead of our target four hour completion time and consistently,and considerably,in excess of our target 80%Happy customer satisfaction score.Where we commit to resolving que

56、ries via chat functionality,we aim for a maximum of one minute of wait time,a maximum of 20 minutes of chat time,and a 90%Happy customer satisfaction score.Again,we consistently meet and significantly outperform these SLAs,in particular resolving chat queries well under the maximum target of 20 minu

57、tes.Finally,we are proud to have a Trustpilot rating of 4.6/5,a testament to the quality of customer service that our teams are committed to delivering.Team Internet4.6/510Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportMarket opportunity

58、.continuedOnline MarketingOnline PresenceSearch:We address a wide range of industries whose constituents advertise on search engines.The most significant sectors include Health(23%),Jobs&Education(14%),Home&Garden(10%),Finance(8%)and Autos&Vehicles(7%).Each industry consists of various verticals,fur

59、ther composed of numerous distinct advertisers.Resellers:Premier domain marketplace connecting more than 1,500 top-level domains(TLDs)to around 22,000 resellers,among global leaders such as GoDaddy,Newfold Digital and many others.E-commerce:We earn commission from transactions made by customers refe

60、rred to e-commerce partners.The opportunity continues to expand by incorporating new product reviews and expanding into new verticals.Since currently only the German and French-speaking markets are addressed,this revenue stream has tremendous potential for growth by internationalisation.Small and me

61、dium-sized business:c.230,000 direct SMB customers addressed through 13 brands specialised on specific geographies or customer personas.Affiliates:Team Internets performance marketing and advertising technology platform is utilised by over 2,000 affiliate advertisers.Corporates:Trusted guardians of

62、the domain portfolio brands of hundreds of internationally recognised brands,such as Johnson&Johnson,Mercedes-Benz and Rolex.Analytics SaaS:Our privacy-enabled marketing solution aligns seamlessly with market demand.Team Internets SaaS analytics platform boasts 4,000 active users leverage its automa

63、tion capabilities to track and optimise multiple ad campaigns to improve conversion.Team Internet does business with the most respected companies in its industries,both on the demand and supply side,resulting in an incredibly resilient business model.Registry:Leading outsourcing provider for new top

64、-level domains(nTLDs),managing over 15.5 million domain names under 104 nTLDs.Team Internets diverse revenue streams.11Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportMarket opportunity.continuedAcross its two segments,Team Internet creat

65、es a vibrant,symbiotic ecosystem,connecting a vast supply with substantial demand.FY23 value flows,Sankey presentationCost of sale OM:USD 525mSocial Media:44%Total revenue:USD 837mCost of sale OP:USD 121mNet revenue:USD 191mRevenue OM:USD 657mRevenue OP:USD 180mNative:21%Search Ads:6%Domains:4%Alter

66、native Publishers:4%Contextual Ads:2%Domain Registries:17%Value-added Services:2%Search:67%(TONIC.,ParkingCrew)E-commerce:6%(VGL)Affiliate Advertisers:5%(Zeropark)Analytics SaaS:1%(Voluum)Resellers:14%SMB:4%Corporates:2%Registry:1%12Team Internet Group Plc|Annual report 2023Additional informationFin

67、ancial statementsGovernanceStrategic report Chairmans statement.The year 2023 marked a significant milestone for Team Internet Group Plc.I am delighted to report that our executive team has successfully achieved the goals and objectives we established in December 2022.Reflecting on our commitments:O

68、ur focus to running the business in 2023 was framed around the new capital allocation policy which we articulated in the CEOs report of our 2022 annual report.This approach endorsed a structured cash flow allocation strategy,with a more even weighting between Shareholder returns/debt reduction on th

69、e one hand,and M&A on the other(in contrast to an almost exclusive focus on M&A in the past).In alignment with this strategic shift,the Company inaugurated a progressive dividend policy,commencing with a disbursement of 1.0 pence per share in June 2023.Additionally,we initiated a GBP 4 million share

70、 buyback programme in January 2023,and subsequently launched a more substantial GBP 34 million share buyback programme in May 2023,with the aim to use the full authority granted by the Annual General Meeting(AGM)in April 2023.This programme is nearing its completion as of this report.In October 2023

71、,we augmented our distributable reserves,thereby facilitating further distributions in 2024.The Company had a strategic reduction in M&A activities in 2023,finalising one acquisition,compared to six in the preceding year.A pivotal moment in 2023 was the rebranding to Team Internet Group Plc,more acc

72、urately reflecting the balance of the Company,our business ethos and embracing the diversity of our stakeholders.This rebranding was celebrated with a market opening ceremony,marking a decade since our initial public offering,and a Capital Markets Day(CMD),the first in more than three years.Given th

73、e success of the CMD,we anticipate greater frequency of these in future.As Chairman,ensuring the Companys effective governance remains a foremost responsibility.Towards this end,we have enhanced our governance structure by increasing the ratio of Non-Executive Directors(NEDs)to Executive Directors f

74、rom 2:1 to 3:1.With Marie Holive succeeding Thomas Rickert,the proportion of independent NEDs to non-independent NEDs has improved to 1:1 from 1:2.Furthermore,we have broadened the scope of the Audit Committee to encompass Audit and Risk and amended its composition to be fully independent.We will co

75、ntinue to review Board and Committee composition with a view to adopting best practices where we feel this is in the best interests of Shareholders.The year concluded with the Company achieving record revenue and profit.I extend my heartfelt appreciation to our management team and all employees for

76、their unwavering commitment and exemplary performance in 2023,on behalf of the entire Board.Looking ahead,with robust free cash flows and substantial liquidity reserves,Team Internet Group Plc is excellently positioned to live up to its capital allocation strategy that supports Shareholder distribut

77、ions,debt reduction and strategic M&A activities as deemed appropriate.Iain McDonald Chairman15 March 2024Iain McDonaldChairmanAchieving milestones,embracing change:a year of strategic success.13Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic r

78、eportInvestment case.PhotographerAnna Rauchenberger1 GrowthWe demonstrated strong organic growth,with gross revenue increasing by approximately 15%in FY2023.Our Online Marketing business is strategically positioned to capitalise on firmly established industry megatrends.2 ValueOur consistent high ca

79、sh conversion,hovering around 100%,underscores our financial stability.We have initiated paying a progressive dividend and engaged in an expansive share buyback programme,showcasing our commitment to returning value to Shareholders.3 TimingOur transformation from a domain-centric business to a leade

80、r in online marketing was accompanied by a recomposition of our Shareholder register.We now approach the end of this process and investor feedback has been overwhelmingly positive regarding this business transformation.Why is now a good time to invest in Team Internet?14Team Internet Group Plc|Annua

81、l report 2023Additional informationFinancial statementsGovernanceStrategic reportChief Executive Officers report.I am delighted to present my second CEOs report since assuming this role,marking yet another year of unprecedented achievements for Team Internet Group Plc.This year has been a milestone

82、for us with our revenues growing by 15%to USD 837 million,and our adjusted EBITDA increasing by 12%to USD 96 million.We have also seen a significant breakthrough in bottom-line profitability,delivering a profit after tax of USD 24.3 million,a notable improvement from the USD 2.1 million loss after t

83、ax in 2022.This is a testament to our robust performance and strategic acumen,further highlighted by our adjusted EPS rising to 23.22 cents.These accomplishments reflect our discipline in cost management,both above and below EBITDA.As we embark on this comprehensive exploration of our past years jou

84、rney and future outlook,we present a structured overview of our achievements,strategic initiatives and the vision that propels us forward.The sections of this report are meticulously arranged to guide you through our multifaceted strategy and execution:Strategic communication:Our approach to enhanci

85、ng transparency and engagement with our stakeholders.Online Marketing:A review of our marketing strategies,performance metrics and strategic partnerships.Growth trajectory and megatrends:How were navigating key industry trends and positioning ourselves for future success.Online Presence:Our efforts

86、to streamline and innovate within the online presence domain.Innovations and initiatives:An overview of our cutting-edge AI projects,advancements and strategic investments.Sustainability and responsibility:Our commitment to environmental stewardship,social responsibility and governance excellence.Re

87、branding for the future:The rationale and impact behind our transition to Team Internet Group.Leadership redesign:The evolution of our leadership structure to align with our strategic ambitions.Outlook and future directions:Our perspective on upcoming challenges and opportunities.This report not onl

88、y reflects on our accomplishments,but also outlines our strategic blueprint for continued innovation and growth.Let us delve into these sections to fully appreciate the scope of our efforts and the direction we are headed.Michael Riedl Chief Executive OfficerForging ahead:innovation,growth and susta

89、inability at Team Internet Group.15Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportChief Executive Officers report.continuedPhotographerAnna RauchenbergerStrategic communicationAddressing our communication strategy first,it has been histo

90、rically noted in analyst observations that while our results were commendable,the essence of our operations remained ambiguous.This critique was taken to heart,prompting a transformative overhaul in how we engage with our investors.By providing an intricate view into the workings of our AI-driven,pr

91、ivacy-conscious consumer journeys elaborated through detailed steps,illustrative screenshots and supported by key performance indicators we have clarified the nature of our business operations.This year,the narrative has shifted.Analysts now commend not only our results,but also express a newfound u

92、nderstanding of our operational mechanisms,refocusing inquiries towards our long-term vision.This marks the commencement of a new chapter in our investor relations,one we are eager to explore over the forthcoming year.Online Marketing:A strategic overviewThe efficacy of our Online Marketing executin

93、g is quantifiable,with a marked increase in consumer engagement in customer journeys,rising from 4.6 billion in 2022 to 5.9 billion in 2023.While the value capture per thousand declined from USD 105 in 2022 to USD 95 in 2023,this is owed to the macroeconomic environment and the weakness in click pri

94、ces across the market.It is important that our capacity to generate value only requires a spread between the ad bids on the demand and the supply side,allowing us to systematically earn money through all phases of the economic cycle.We are privileged to acknowledge our symbiotic partnership with the

95、 leading search engine operator as an invaluable asset,underpinned by the enduring AdSense For Domains(AFD)programme.This initiative,serving as the cornerstone of our TONIC.platform,having been in existence for approximately 18 years,epitomises the programmes durability.Despite our subsidiary enteri

96、ng this business in the relatively recent year of 2010,Team Internet Group has unequivocally established itself as the pre-eminent leader within a well-defined oligopoly,demonstrating our unparalleled expertise and leadership in this space.Team Internets growth trajectory is bolstered by our adept n

97、avigation of three irreversible megatrends,each shaping the future of online marketing:The ascendance of social media:Over the past two decades,social media has revolutionised the paradigms of content creation and consumption.Platforms such as Facebook,Instagram and TikTok have led this transformati

98、ve journey,ushering in the era of User-Generated Content(UGC),the Web 2.0.This pivotal shift,acknowledged by Time Magazine through its recognition of online users as Person of the Year,underscores the increasing preference for content that resonates on a more personal and relatable level,challenging

99、 traditional Web 1.0 media landscapes and search engines it has spawned.The data privacy shift:In a world of heightened data privacy regulations,search engines hold a distinct advantage over social media platforms.Users direct expression of intent through search queries reduces the need for extensiv

100、e tracking,aligning with privacy laws and minimising privacy concerns.Consequently,despite the continued growth in social media usage,advertisers are willing to bid higher click prices for search engine ads due to their efficiency in targeting and proximity to conversion,leading to a divergence in a

101、dvertising yields.Our TONIC.platform aims to capitalise on this trend by bridging the gap between intent-driven search ads and the expansive audience on social media.Risk transformation opportunity:The online advertising landscape is steadily evolving towards a model where publishers bear more risk,

102、transitioning from Pay Per Mille(PPM)to Pay Per Click(PPC),and now to Pay Per Action(PPA),where advertisers pay only for specific outcomes.This decade-spanning shift benefits those who can effectively manage conversion.Investments in companies such as VGL Publishing and Adrenalads position us to thr

103、ive in this new paradigm.An alternative innovative approach involves engaging users with content that encourages endless scrolling,generating revenue through continuous ad impressions,an area that we are eager to explore.Last,there is also an opportunity to balance mismatches in supply and demand be

104、tween search engines.16Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportChief Executive Officers report.continuedOnline Marketing:A strategic overview continued The ultimate vision to exploit these three global and evergreen megatrends is

105、building an Omni-media Omni-monetisation Platform(OM2P)that will enable us to connect visitors from any kind of digital media with the most effective monetisation channel.Team Internet is maintaining its strategic course towards this long-term vision,unaffected by transient challenges,underscored by

106、 several key initiatives:Seamless engagement:Our Pagehub initiative aims at designing a shorter conversion process,integrating the ads more seamlessly into the content we serve.This initiative is using the confluence of deep learning and generative AI capabilities.A new set of agreements with our co

107、re search engine partner will allow us to source ads for this enhanced environment and consumer journey experience from an even wider set of its advertising partners.The aspiration is to build the foundation for a new wave of growth based on further enhanced consumer and advertiser satisfaction.Sear

108、ch-to-search:In 2023,we announced an agreement with Microsoft Bing.This agreement focuses on leveraging Bings platform to monetise traffic from alternative search engines,a traffic source that is challenging to monetise with our current workflow.Much like our primary search engine partnership,succes

109、sfully capitalising on this opportunity demands substantial expertise in machine learning and scalable software engineering.We have now gained the necessary insights into the complexities of integrating this secondary search engine feed.With this understanding,we are poised to make substantial inves

110、tments in scaling it to an industrial level.We anticipate that this endeavour will yield meaningful revenue contributions by the end of the year.Open Web capabilities:Although social media platforms currently serve as our main source of traffic,the Open Web presents a parallel avenue ripe with oppor

111、tunities,especially concerning general interest websites such as news,weather or sports.Presently,we are tapping into this potential through native networks.In 2024,our Adsolutely product is set to undergo a beta phase aimed at offering content publishers an alternative means of monetising their aud

112、ience.Leveraging our search engine-based and subsequently e-commerce-based monetisation technologies,we aspire to empower publishers with enhanced revenue streams and foster mutually beneficial partnerships.Adherence to industry policies:Our unwavering commitment to White Knight ethics,demonstrated

113、through our adherence to publisher and advertiser policies,reflects our dedication to fostering a sustainable digital advertising ecosystem.This principled approach,even in the face of potential short-term constraints,is foundational to our strategy,ensuring long-term viability and success.Supply si

114、de challenges:The rapid expansion of social media networks globally has brought about operational complexities,such as occasional service disruptions,localised policy changes,and strategic shifts such as the recent cessation of the Universal Music licensing deal with ByteDance(TikTok).In response to

115、 these evolving dynamics,we are proactively diversifying our network of integrated publishers and remaining agile to ensure our continued resilience and performance stability.All these initiatives feed into the strategic priorities postulated at the Capital Markets Day on 4 September 2023,making our

116、 revenue streams more diversified,more vertically integrated and more sustainable.Enhancing the digital ecosystem:The Online Presence segmentIn envisaging a digital landscape devoid of Team Internets influence,one confronts a daunting scenario:approximately 4,000 ICANN accredited registrars and 1,50

117、0 top-level domains engaging in direct and cumbersome transactions.This would entail an overwhelming proliferation of contracts,technical integrations and monthly invoicing processes,cumulatively numbering in the millions.Our Online Presence segment plays an instrumental role in transforming this co

118、mplex web into a streamlined and efficient ecosystem.Through our innovative solutions,we significantly reduce operational burdens,thereby elevating the industrys competitiveness and sustainability.Team Internet stands at the forefront of the global Online Presence and productivity tool ecosystem,ser

119、ving as a linchpin for businesses and organisations seeking to navigate the digital domain with ease and efficiency.At the heart of our Online Presence segment lies our domain name offering,a critical component for entities of all magnitudes to carve out their digital identity.Team Internet distingu

120、ishes itself within this competitive landscape through the provision of an unparalleled selection of domain extensions.This,combined with our fully automated Application Programming Interfaces(APIs)and comprehensive fulfilment services,ensures that our customers can seamlessly procure and manage the

121、ir domain names.This level of service and functionality underscores our commitment to simplifying the complexities of digital identity management,setting a new standard for excellence within the industry.Our segment caters to a broad spectrum of clients,from web hosting companies and globally recogn

122、ised brands,to small and medium-sized businesses(SMBs),all of whom benefit from the integrated solutions we offer.This one-stop-shop experience empowers our clientele to address their entire spectrum of domain name requirements within a singular,user-friendly platform.This consolidation significantl

123、y enhances the efficiency of managing online presences,a testament to our understanding of,and responsiveness to,the needs of the digital marketplace.Furthermore,our extensive distribution network provides unmatched reach and visibility for country code and generic domain operators,embodying a seaml

124、ess conduit through which customers can secure the domain names vital for their online ventures.The Online Presence market is characterised by its high customer loyalty,with less than 3%of customers transitioning to alternative providers annually.This statistic speaks volumes about the trust and sat

125、isfaction our clients place in our services.Team Internets strategic approach is centred on the integration and optimisation of a globally diversified portfolio of businesses.Our objective is to forge a unified marketplace that not only fosters organic growth,but also continuously diversifies our su

126、pplier base,distribution channels and customer pool.17Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportChief Executive Officers report.continuedEnhancing the digital ecosystem:The Online Presence segment continued Our ambition extends beyo

127、nd the mere provision of services;we endeavour to create a cohesive and integrated marketplace that caters to the evolving needs of the digital economy.By continually expanding our network of suppliers,distribution channels and customers,we are setting the stage for sustained organic growth.This vis

128、ion for a unified marketplace is a reflection of our commitment to innovation,customer satisfaction and industry leadership.As a first major step towards this vision,we are launching project UNITY,which aims at reducing our infrastructure to focus on one single platform and brand for each key use ca

129、se:Reseller,Retail,Brand and Registry.Unveiling a new corporate identityThe transition of our corporate identity marks a pivotal chapter in our history.Initially publicised in 2013 under the moniker CentralNic,a designation rooted in the foundational elements of our business the Network Information

130、Center,emblematic of domain registry operations this nomenclature captured a mere fraction of the vast array of activities that presently delineate the essence of our Group.With such operations contributing to approximately 3%of our net revenue,it became increasingly clear that a transformation was

131、imperative to reflect the breadth and dynamism of our enterprise more accurately.Hence,on 4 September 2023,a strategic rebranding initiative culminated in the unveiling of Team Internet Group,a name that signifies a new era of integration,innovation and expansive vision.The essence of Team,as concep

132、tualised by the Kellogg School of Management,is a collective of individuals,encompassing both human and technological entities,united by a shared dependency on information,resources,knowledge and skills.This collective endeavours harmoniously towards achieving a singular,overarching goal.Team thus e

133、ncapsulates the core of our ethos our people,our technologies and our businesses each component integral to our operational synergy and collective success.Internet,as defined by the Oxford English Dictionary,represents the vast,interconnected network that facilitates a plethora of information and co

134、mmunication services across the globe.It embodies the domain of our customers and our partners,highlighting the expansive and interconnected nature of our operations and aspirations.At the heart of Team Internet Group lies a steadfast purpose:to forge meaningful and successful connections that bridg

135、e our customers with our partners.Our vision,both straightforward yet powerful,is to create meaningful and successful connections:businesses to domains,brands to consumers,publishers to advertisers and beyond,enabling everyone to realise their digital ambitions.Our mission is to leverage our people,

136、businesses and technologies;we aim to drive information,deliver value and create growth for all.The commemoration of our rebranding was strategically aligned with the tenth anniversary of our initial public offering(IPO),a momentous occasion that was fittingly observed at the London Stock Exchange.T

137、his event not only marked a significant milestone in our corporate journey,but also provided a platform to herald the dawn of a new chapter for Team Internet Group.Alongside the market opening ceremony,a Capital Markets Day was convened,further underscoring our commitment to transparency,communicati

138、on and leadership.This gathering also served as an opportunity to introduce the esteemed leaders spearheading our new divisional leadership structure,each embodying the principles and aspirations that Team Internet Group stands for.In summary,the rebranding to Team Internet Group is not merely a cha

139、nge of name,but a profound reaffirmation of our evolving identity,purpose and commitment to the digital ecosystem.It represents a strategic pivot towards a future defined by meaningful connections,innovative solutions and collaborative success,firmly positioning us at the forefront of the digital ag

140、e.Refining leadership for strategic excellenceAs mentioned at the outset,designing the leadership is one of the most formidable missions of a CEO.At the core of our strategic vision lies the commitment to fostering a leadership framework that not only aligns with our goals,but propels us towards ach

141、ieving them.Recognising the importance of agile and responsive leadership,we have embarked on a significant transformation from a functional organisation to a more dynamic divisional organisation.This new structure integrates the Group functions and is delineated into four distinct divisions:Search,

142、Comparison,Commerce Media Tech and Online.The first three divisions form the cornerstone of our Online Marketing segment,while the Online Presence segment is encapsulated within the Online division.This reorganisation ensures a coherent alignment of our business units with our strategic objectives,f

143、acilitating enhanced focus and efficiency.Central to our leadership ethos is the harmonisation of efforts between the Group functions and the individual divisions.By providing robust support structures and facilitating co-ordination where necessary,we ensure that our divisions are not only self-suff

144、icient,but also benefit from the collective expertise and resources of the Group.This collaborative framework is instrumental in driving our divisions towards achieving their strategic goals,supported by efficient capital allocation and resource management.In our pursuit of excellence,we employ a ri

145、gorous benchmarking process,evaluating each division against the Team Internet Growth Efficiency Ratio(TIGER).Inspired by the Rule of 40 a benchmark commonly used among software industry analysts our assessment criteria extend to include EBITDA conversion(EBITDA over net revenue)and net revenue grow

146、th.Our objective is clear:to elevate every division above the threshold of 40,a marker of exceptional performance and strategic vitality.As we look towards 2024,we are confident in our ability to guide all divisions into this distinguished zone,signifying not only their success,but also the collecti

147、ve triumph of Team Internet Group.18Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportChief Executive Officers report.continuedRefining leadership for strategic excellence continuedUnderstanding that the realisation of our ambitions hinges

148、on the provision of adequate resources,we are steadfast in our commitment to equipping our teams with the tools and support they require.This encompasses not just financial investments,but also the fostering of an environment that encourages innovation,collaboration and continuous improvement.By doi

149、ng so,we aim to create a culture of excellence that permeates every level of our organisation,driving us towards our goal of redefining the digital ecosystem.In essence,our leadership strategy is a reflection of our broader mission:to lead with vision,agility and a relentless focus on excellence.By

150、restructuring our leadership framework,empowering our divisions and committing to a culture of support and collaboration,we are poised to navigate the complexities of the digital age,achieving sustainable growth and success for Team Internet Group and all its stakeholders.Pioneering AI integration:A

151、 strategic imperativeThe year 2023 also marked a pivotal moment in the corporate landscape,witnessing a widespread recognition of the transformative potential of Artificial Intelligence(AI).Team Internet has consistently been at the vanguard of this technological revolution,underscored by our proact

152、ive initiatives and strategic foresight.Our dedication to staying ahead of the curve was exemplified in July 2021,with the significant appointment of Dr.Pawel Rzeszucinski as our Head of Data&AI,a move that cemented our commitment to leveraging AI for enhancing our operations and offerings,years bef

153、ore other corporates came to the same realisation.Further advancing our AI strategy,we engaged the expertise of Futurist David Shrier in 2023.His collaboration has been instrumental in conceptualising and developing two cornerstone projects aimed at embedding AI throughout our organisational fabric:

154、the AI Academy and the Innovation Factory.The AI Academy is designed with a tripartite purpose,each aiming to foster a comprehensive understanding and application of AI across our team:1.Raising the floor:This initiative is focused on democratising AI knowledge within our organisation,ensuring every

155、 member of our staff is equipped with the necessary skills to leverage off-the-shelf AI tools for enhanced productivity.Our commitment is to leave no individual behind in our journey towards digital empowerment.2.Raising the ceiling:By providing advanced training to our engineers and data scientists

156、,we aim to push the boundaries of what is possible with AI.This involves immersing our technical teams in the latest technologies and methodologies,enabling them to create superior products that exceed our customers expectations.3.Raising awareness:A key component of our AI Academy involves nurturin

157、g a culture of critical and creative thinking among our senior leadership.This training is geared towards enabling our leaders to foresee and navigate potential disruptions caused by AI and other emergent technologies,ensuring strategic resilience.The Innovation Factory represents a strategic invest

158、ment in our Companys organic growth,aligned with the second priority of our Cash flow Allocation Waterfall Model(CAWM).This initiative serves as a crucible for innovation,where ideas that extend beyond the immediate scope of our Horizon 1 agile development cycles are identified,assessed and nurtured

159、.It provides a unique platform for rapid prototyping,allowing us to explore and realise innovative concepts that have the potential to redefine industry standards and enhance our competitive edge.As we continue to integrate AI into the core of our operations and strategies,we are mindful of the impo

160、rtance of sharing our progress and insights with all stakeholders.To this end,we are including a dedicated AI page in our annual report,offering a comprehensive overview of our initiatives achievements,and future directions in harnessing AI to drive growth,efficiency and innovation(see page 24).This

161、 commitment to AI and innovation is not just about maintaining leadership in the digital realm;its about shaping the future of our industry and ensuring that Team Internet remains synonymous with excellence,innovation,and foresight.Through the AI Academy and Innovation Factory,we are laying the grou

162、ndwork for a future where our Company not only adapts to technological advancements,but leads them,creating unparalleled value for our customers,partners and stakeholders.Embedding sustainability and responsibility:Our ESG commitmentAt the heart of Team Internet Groups ethos lies a steadfast commitm

163、ent to environmental protection,social responsibility and progressive governance practices.Our dedication to reducing our environmental impact is evident in the significant achievement of my office,which has successfully reduced its carbon footprint,dramatically.This milestone is reflective of our b

164、roader strategy to integrate sustainable practices across all facets of our operations,aiming not only to minimise our ecological footprint,but also to set a new standard for environmental stewardship within the digital industry.This entails rightsizing our global office footprint to the post-pandem

165、ic working realities.During 2023,we have focused on our European core operating sites,having downsized office space in Krakow,Munich and the Saarland.This year we see a focus on adapting our overseas and ancillary offices to our current needs.Just like a figure skater,by pulling our arms in,we make

166、the flywheel spin faster.Our commitment extends beyond environmental sustainability to encompass a deep-seated responsibility towards the communities in which we operate.Recognising the profound impact of humanitarian crises and conflicts around the globe,we have actively supported individuals affec

167、ted by these challenges,including both our staff and wider community members.This support is a testament to our belief in the importance of maintaining social balance and contributing positively to the wellbeing of societies worldwide.Through these efforts,we aspire to not just conduct business with

168、 integrity and compassion,but to also inspire change and encourage a culture of support and solidarity within the tech industry and beyond.19Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportChief Executive Officers report.continuedEmbeddin

169、g sustainability and responsibility:Our ESG commitment continued In the realm of corporate governance,Team Internet Group has achieved remarkable progress,underscored by the comprehensive review and enhancements detailed in the Chairmans statement and elaborated upon in our dedicated ESG report on p

170、ages 29 to 56.These strides in governance reflect our unwavering commitment to transparency,accountability and ethical leadership.By continuously refining our governance structures and practices,we ensure that our operations not only comply with the highest standards,but also foster trust and confid

171、ence among our stakeholders,paving the way for sustainable growth and long-term success.Post year end and outlookWe confirm our guidance that the Group is confident in its ability to meet market expectations as indicated on page 25.Our established brands,market leadership,cutting-edge technology,the

172、 assembled talent and robust cash flow will allow us to translate our current success into future success.ConclusionAs we conclude this comprehensive report,I trust you have gained a deeper understanding of Team Internet Groups strategic endeavours,our commitment to innovation,and the path we have c

173、harted for future success.We have traversed through a series of critical discussions:The refinement of our strategic communication to foster greater clarity and connection with our audience.The achievements and strategic depth of our Online Marketing efforts,amidst evolving market dynamics.Our proac

174、tive navigation of growth trajectory and megatrends,ensuring we remain at the forefront of industry innovation.Our initiatives in Online Presence,aiming to revolutionise the online presence and digital identity management.The unveiling of AI innovations and Initiatives that mark our commitment to le

175、ading through technology and strategic foresight.Our dedication to sustainability and responsibility,embedding these principles into the core of our operations.The strategic importance of rebranding for the future,marking a new era for our corporate identity and strategic focus.The leadership redesi

176、gn that aligns our organisational structure with our ambitions for growth and innovation.And finally,our outlook and future directions,where we anticipate the challenges and opportunities that lie ahead.It is with a sense of pride and optimism that I share this report,a testament to our teams hard w

177、ork,our strategic vision and our unwavering commitment to excellence.As we look to the future,Team Internet Group is well-positioned to continue its trajectory of growth,innovation and leadership in the digital landscape.I extend my deepest gratitude to our employees,partners and stakeholders for yo

178、ur continued support and belief in our vision.Together,we will forge ahead,embracing the opportunities and challenges of the future with confidence and strategic acumen.Michael RiedlChief Executive Officer15 March 202420Team Internet Group Plc|Annual report 2023Additional informationFinancial statem

179、entsGovernanceStrategic reportOur business model.How we do it:Team Internets strength and organic growth is based on a foundation of exceptional resources dedicated to fostering sustainable value creation.Our mission:By leveraging our people,businesses and technologies,we aim to drive information,de

180、liver value and create growth for all.Inputs:Our peopleTeam Internet leverages a wealth of talent throughout the organisation,boasting significant and extensive industry expertise.Our segmentsOnline Marketing Crafting secure,privacy-conscious online consumer experiences powered by AI,which guide gen

181、eral interest online media users towards becoming confident and committed consumers through advertorial and review platforms.Online PresenceA critical constituent of the global online presence and productivity tool ecosystem,where we serve as the primary distribution channel for a wide range of digi

182、tal products.Driven by our strategic prioritiesUnderpinned by our shared valuesOur technologyRenowned for its outstanding technological solutions,Team Internet is backed by extensive in-house product,engineering and operations teams.Our innovative omni-channel platform delivers world-class solutions

183、 tailored to meet the needs of every customer.Our global perspectiveTeam Internets globally diverse acquisitions,people and operations lend a unique perspective to the Group.Our operational structureThe Groups finance,human resources,product development,project management,integration,technical and o

184、perational teams are primarily based in Germany and Poland,with regional offices positioned across five continents.Team Internet operates as a truly global entity,serving customers worldwide.Organic growthOperating leverageCompetitive cost of capitalFocused bolt-on M&AAnd by working together,we win

185、togetherWe act like ownersWe work smart to build things we are proud ofWe have the courage to do the right thing,even if its hard21Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportOur business model.continuedCreating value for all of our s

186、takeholders whilst remaining steadfastly focused on sustainability.Creating value for all our stakeholders:Focused on sustainability:EnvironmentSee more on our environmental strategy and carbon neutrality on pages 29 to 41.CommunitiesSee more on how we support local communities on pages 42 to 44.Div

187、ersity and inclusionSee more on our approach to diversity and inclusion on pages 45 to 56.GovernanceSee more on how we are creating long-term sustainable success on pages 30 to 35.Customer renewal rates c.100%827Expert employeesTeam Internet creates meaningful and successful connections from busines

188、ses to domains,brands to consumers,publishers to advertisers,enabling everyone to realise their digital ambitions.USD 25 millionof payroll,corporate and value-added taxes paid in 2023USD 1.3 millionGrants donated through the SK-NIC Fund(105 projects to date)CustomersRegulators and governmentsColleag

189、uesPartnersCommunities23.22 cents32%growth in adjusted EPSInvestors22Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportOur strategy.Our strategic priorities create a virtuous circle:organic growth leads to enhanced operating leverage,drivin

190、g a more competitive cost of capital,thus facilitating M&A.2023 achievements:In 2023,the operating expenses of the Group companies expressed as a percentage of net revenue has decreased to 50%,down from 52%in 2022;a further improvement in operational efficiency which takes the Groups EBITDA conversi

191、on to a rarely observed level we have aspired to for many years.Priorities for 2024:Attracting and retaining the requisite AI,data science,coding and business talent,while further streamlining overhead and administration as well as ancillary expenses.Link to KPIs:3 4 7 9 Link to KPIs:1 2 3 4 5 6 8 L

192、ink to KPIs:1 2 3 5 6 8 10 11 13Organic growthNew customer wins,supporting existing customers,and cross-selling our services.Launching new products and contracting with new partners.Notes:Pro forma comparable financial summaries are prepared to effectively isolate organic growth.2023 achievements:Or

193、ganic revenue growth of 13%in 2023 demonstrates the success of the Groups strategy of investing during the pandemic.The Financial Times listed Team Internet among the top 250 fastest-growing companies and among the top 50 fastest-growing technology companies in Europe for the second year in a row.In

194、clusion is based on organic growth.Priorities for 2024:Capitalise on strategic partnerships entered and new products introduced in 2023.Organic growth by cross-selling between the divisions formed in 2023.Notes:M&A activity targets specific financial synergies to ensure that the cost base continues

195、to be well controlled.Operating leverageAchieve cost savings in future periods by successfully integrating acquired businesses.Operational gearing is expected to enhance margins as the Group scales.Competitive cost of capitalReduce interest rate on historic debt(latest effective interest rate 8%).Re

196、tain net debt/EBITDA ratio of 4x.Notes:Interest varies in line with SOFR(published by the Federal Reserve Bank of New York)and the Groups operating leverage.2023 achievements:In 2023,the Company enjoyed the full year benefits of its October 2022 refinancing.The latest effective interest rate on all

197、debt is less than 8%.During FY2023,the Company bought back 22.1 million shares,representing c.8%of the outstanding share capital,at an average price of GBP 1.16.Together,these actions helped achieve strong adjusted EPS growth of 32%.Priorities for 2024:Optimising the mix between debt and equity for

198、the right balance between capital structure efficiency and sustainability.Link to KPIs:1 2 3 4 5 6 7 8 9 10 11 12 132023 achievements:Acquisition of Adrenalads LLC in the Online Marketing segment in August 2023.Adding further Pay Per Action(PPA)and commerce media capabilities in the essential US mar

199、ket.Team Internet has been focusing on integrating the operating entities into the four divisions it created at the beginning of 2023.Priorities for 2024:Horizontal expansion into complementary traffic monetisation strategies and vertical integration in the current strategies will be the focus.Notes

200、:Team Internets excellent ability to source,complete and integrate transformative acquisitions drives organic growth.Focused bolt-on M&AWebsite and e-commerce targets matching Team Internets current recurring revenue,cash generation profile.Strong pipeline of attractively priced deals.23Team Interne

201、t Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportOur strategy.continuedAllocation of the Groups free cash flow is structured to ensure compatibility with its strategic priorities.Progressive dividend policy:Given the Groups maturity and resilience in

202、volatile markets,the Directors have decided to implement a progressive dividend policy as a fundamental cash return.The proposed dividend of 2.0 pence per share for 2023(2022:1.0 pence per share)represents approximately 11%of 2023s free cash flow,providing ample room for growth and achieving other c

203、orporate objectives.1Organic growth:While all our business units have positive EBITDA,the Directors will consider investing in capital projects that drive the Group forward and yield returns above the cost of capital.These projects may include platform integration,content repository expansion or int

204、ernational growth.2Accretive bolt-on acquisitions:Team Internet is the company we know best.Thus,acquiring any other company must provide higher returns than repurchasing our own equity.Investing free cash flow in accretive acquisitions also helps reduce leverage by increasing pro forma EBITDA.3Shar

205、e buybacks:Remaining free cash flow allows share buybacks within limits agreed upon with Shareholders,the banking pool and the debt repayment(net leverage)target described in the following box.Shares may be reissued for acquisition purposes.4Debt repayment:If any funds remain,they will be allocated

206、to reduce the Groups gross debt.If net leverage approaches the levels seen at the end of 2021,i.e.2.0 x net debt to EBITDA or more,the Group will prioritise debt reduction over share buybacks,using free cash flow for this purpose.524Team Internet Group Plc|Annual report 2023Additional informationFin

207、ancial statementsGovernanceStrategic reportOur strategy.continuedAt Team Internet,AI is seamlessly woven into the fabric of our daily operations.Raising the floorRaising awarenessRaising the ceilingThis initiative focused on democratising AI knowledge within our organisation,ensuring every member of

208、 our staff is equipped with the necessary skills to leverage off-the-shelf AI tools for enhanced productivity.Our commitment is to leave no individual behind in our journey towards digital empowerment.A key component of our AI Academy involves nurturing a culture of critical and creative thinking am

209、ong our senior leadership.This training is geared towards enabling our leaders to foresee and navigate potential disruptions caused by AI and other emergent technologies,ensuring strategic resilience.This initiative also focuses on leveraging emergent technologies to conceive products that,prior to

210、these advancements,would have been unimaginable.By providing advanced training to our engineers and data scientists,we aim to push the boundaries of what is possible with AI.This involves immersing our technical teams in the latest technologies and methodologies,enabling them to create superior prod

211、ucts that exceed our customers expectations.Algorithm-driven HR interviews save time,enhance efficiency,and standardise feedback by listening and then summarising,assigning actions and sharing feedbackProprietary machine learning in CRM analyses retail customer data,enabling targeted sales operation

212、s and saving agent timeAI used to summarise and extract actions from client-customer care conversations to streamline ticket creation and save agent timeAI Chatbots are designed and used on ;7,000+customers and leads served in six monthsProprietary machine learning optimises native ad placement by a

213、nalysing third-party websites content and deploying matching advanced keywords on them for conversion maximisation(Adsolutely)Proprietary machine learning algorithm identifies high-traffic potential expired domains,registers them,builds websites using templates,populates them with relevant content a

214、nd native ads,and promotes its articles on social media,to drive qualified leadsCustomers provide a business or project description and AI generates matching options,checks availability and presents matching domain names for purchaseAI analyses domain purchases on a Team Internet retail website,vert

215、icals are extracted and AI is used to assign the most appropriate nTLDs to inform marketing-driven campaignsAI used to identify better contextualised keywords on passively monetised parked domain names to optimise earnings per click(EPC)and Click Through Ratio(CTR)AI used to build websites with cont

216、ent around a specific product,e.g.washing machines,to drive qualified leads to VGL25Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportKey performance indicators.The Group achieved record levels on financial key performance indicators from t

217、he top to the bottom line.Financial KPIs+13%+2%+8%+15%1 Revenue growth (USD m)20222023728.2836.92 Net revenue/gross profit growth (USD m)20222023177.7191.13 Adjusted EBITDA growth (USD m)+12%2022202386.096.44 Adjusted EBITDA%of net revenue/gross profit2022202348.4%50.4%5 Organic revenue growth (USD

218、m)20222023744.2838.1Why its importantRevenue increase is the key indicator of the Groups growth2023 performance15%revenue growth achieved in 2023OutlookAnalyst expectations of 2024 revenue currently range from USD 854.3 million to USD 914.1 millionWhy its importantPrincipal indicator of core profita

219、bility given pass-through nature of some revenue streams2023 performance8%growth in 2023OutlookAnalyst expectations of 2024 net revenue currently range from USD 192.0 million to USD 208.1 millionWhy its importantAdjusted EBITDA is the key measure of the Groups operational excellence 2023 performance

220、12%growth due to strong revenue growth and focus on cost controlOutlookAnalyst expectations of 2024 EBITDA currently range from USD 97.3 million to USD 107.6 millionWhy its importantGiven significant pass-through costs,e.g.traffic acquisition costs,net revenue ratio gives an indication of operating

221、leverage in the business model2023 performanceIncreased by 2%in 2023OutlookWe would expect the adjusted EBITDA to net revenue ratio to remain above 50%Why its importantGiven the acquisitive nature of the Group in previous years,organic growth is a key metric illustrating the underlying revenue growt

222、h of the Group2023 performanceOrganic growth of 13%in 2023OutlookInvestments are expected to continue to drive organic growth into 202426Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportKey performance indicators.continued(2)%+26%+32%Finan

223、cial KPIs continued6 Adjusted EPS(cents)2022202317.5623.228 Cash balance (USD m)2022202394.892.7Why its importantCash balances are monitored weekly for working capital and M&A funding requirements2023 performanceCash reserves reduced by 2%to USD 92.7 million at the end of 2023OutlookOperational cash

224、 conversion is expected to be greater than 100%in 2024+31%7 Operating profit (USD m)2022202333.642.3Why its importantOperating profit is a measure of a companys earnings excluding accounting items such as one-time charges,interest and taxes that may skew profit data 2023 performanceOperating profit

225、increased by 26%to USD 42.3 million at the end of 2023OutlookContinued profit growth following accretive 2022 and 2023 acquisitions and organic growth9 Net debt (USD m)20222023Why its importantNet debt deleverage expected over time2023 performanceNet debt increased following investing cash outflows(

226、deferred consideration,dividends and share buybacks),but net debt:adjusted EBITDA ratio remains below 1:1OutlookLeverage measured by net debt/adjusted EBITDA will not increase to the levels of 2021 and earlier yearsAdjusted EPS and operating profit increased by 32%and 26%,respectively.Cash and net d

227、ebt KPIs impacted by cash returned to Shareholders.Why its importantMeasure of the underlying growth in earnings per share2023 performance32%growth is testament to organic and M&A-led growth of the GroupOutlookGrowth expected from continuing operational leverage benefits and ongoing impact of the sh

228、are buyback programme56.674.127Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportKey performance indicators.continuedWhilst most non-financial KPIs reported year-on-year growth,revenue per thousand impressions was impacted by the cyclical w

229、eakness in click prices across the market.Non-financial KPIs10 No.of visitor sessions (Online Marketing)(#)+27%202220234.6bn5.9bn11 Revenue per thousand impressions (Online Marketing)(USD)(9)%202220231059512 No.of domain registration years (Online Presence)(#)+4%2022202313.2m13.8m13 Average revenue

230、per domain year (Online Presence)(USD)+13%2022202310.011.3Why its importantIndicative of the stability of our conversion of underlying activity2023 performanceGrowth of 13%achieved given market shift to alternative domain namesOutlookSustainable growth expected as we continue to bring efficiencies t

231、o the domain subscription processWhy its importantIndicative of how effectively traffic is being monetised,absent current market conditions2023 performanceTrending to a more stable base as digital advertising market returns to growthOutlookTeam Internet is expected to maintain current levels of reve

232、nue per thousand sessionsWhy its importantIndicates whether Team Internet is winning market share2023 performanceGreater demand for country code TLDs and new TLDs contributed to growthOutlookFurther market share gain by volume expected in 2024Why its importantIndicative of the Groups total audience2

233、023 performanceStrong growth in particular from social media,following the audience to short-form videosOutlookBeing platform agnostic,Team Internet will nimbly follow mass audience migrationThe year-on-year percentage increase or decrease for non-financial KPIs is calculated using non-rounded figur

234、es.28Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportSection 172(1)statement.How we engage:Supplier audits and assessmentsHow we engage:Regular Town Halls Campus,our new corporate university Our news site Team Internet Connect Pulse and t

235、argeted surveys Viva Engage through our All Company community and local interest groupsHow we engage:Through engagement with charities and non-governmental organisations Participation in key international forums and working groupsHow we engage:Regular meetings with institutional investors and analys

236、ts during the year Individual or collective meetings between major Shareholders and the Board Annual General Meeting(AGM)Feedback from nominated advisers and joint brokers on Shareholder opinions Group websiteHow we engage:Contribute to society and communities by paying taxes and social charges in c

237、ompliance with applicable regulations Help ideate and enforce regulationHow we engage:Customer support function Newsletters Customer satisfaction surveysCustomersRegulators and governmentsEmployeesSuppliersShareholders and investorsCommunitiesOur relationship with governments and regulators is impor

238、tant to ensure policies are developed in the interests of our customers and the industry,while also enabling them to better understand the positive impact we can have on the environment and communities we operate in.The Board is committed to improving sustainability and helping communities thrive by

239、 positively contributing both socially and economically.Building and preserving relationships with the communities we serve is also core to our commercial success and supports our purpose of enabling our customers to realise their aspirations online.The Group engages with customers across the globe

240、through its dedicated customer support function.Engaging with our customers and understanding their needs is critical to delivering on our strategy,ambition and purpose.Our suppliers are key to the operational success of our Company.The Board regards effective communication with Shareholders as esse

241、ntial.Relations with Shareholders are managed principally by the Chief Executive Officer,Chief Financial Officer and the Chairman.The Group recognises that high levels of employee engagement lead to lower levels of attrition,higher levels of productivity and a more enjoyable work environment,where p

242、eople are happier and are more likely to thrive.The Board recognises its responsibility to take into consideration the needs and concerns of all our stakeholders as part of our discussion and decision-making processes,and in this regard,we welcome the fresh stance under section 172 of the UK Compani

243、es Act 2006(s.172)as part of the QCA Corporate Governance Code.The Directors have identified the Companys key stakeholders as its:Shareholders and investors,employees,customers,suppliers,regulators and governmental bodies,the environment and the wider community.Building positive relations with these

244、 stakeholders,treating them well and with respect and managing our operations in a sustainable way,is essential to the success of the business.The Board considers the interests of the Groups employees and other stakeholders,including the impact of its activities on the community,environment and the

245、Groups reputation,when making all decisions.The Board,acting fairly between members,and acting in good faith,considers what is most likely to promote the success of the Group for its Shareholders in the long term.The Groups stakeholder engagement activities help to inform the Boards decisions.By tho

246、roughly understanding our key stakeholder groups,we can factor their insights and concerns into boardroom discussions.29Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportWe believe that the first step to influencing positive change as a bus

247、iness is by making a strong commitment to our key stakeholders.This keeps our progress firmly aligned with the Groups vision and direction,and by standing by these commitments,this group of stakeholders,who will hold us accountable,will help us to embed our focus on ESG for years to come.There are a

248、 number of initiatives that we are proud to have undertaken and prioritised during the year,which are summarised on the following pages.Introduction.See more.Our sustainability strategySee more on our sustainability strategy and carbon neutrality on pages 30 to 32,and 39 to 41.Our people and culture

249、See more on how we support our team members on pages 45 to 56.TCFDSee more about our approach to the Task Force on Climate-related Financial Disclosures on page 33.Environmental,social and governance(ESG).29Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanc

250、eStrategic reportOur Board sees investing as key to address ESG issues which affect the Groups stakeholders.CommunitiesSee more on how we support local communities on pages 42 to 44.30Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportEnviro

251、nmental,social and governance(ESG).continuedUN GoalsThe Groups sustainability framework aligning with the UN Sustainable Development GoalsOur sustainability strategy.How Team Internet contributesHealth and wellbeing are embedded in Team Internets strategic people priorities,and contribute to its cor

252、e sustainability mission.Team Internet is committed to ensuring equal opportunities for all,irrespective of gender,and to maintaining a culture of inclusion,where diversity is seen as a strength.Team Internet employs over 850 employees globally.Our team is crucial to delivering our sustainability go

253、als and mission.Team Internet has been for many years,and continues to be,on a steep growth trajectory.Our people are central to helping us continue to build our services,and we are committed to providing the best and most inclusive environment in which to work.Team Internet is at the forefront of i

254、nnovation within the Online Marketing and domain industry.Our mission is to help online consumers make informed choices,demonstrating our commitment to effective digital work and social practices,such as data privacy.Team Internet makes sustainability a key factor when managing suppliers.Team Intern

255、et is taking action to reduce its GHG emissions whilst also investing in green energy projects.The Groups goals,strategy and business model on pages 1 to 27.How we manage risks,pages 60 to 63.Corporate governance,pages 66 to 77.Read more aboutResponsible consumption and production12Climate action13S

256、ustainable development9 Decent work and economic growth8Gender equality5Good health and wellbeing3The 17 Sustainable Development Goals(SDGs)were launched in 2015 by the United Nations(UN),aiming to end poverty and create a life of dignity and opportunity for all.The SDGs define global sustainable de

257、velopment priorities and aspirations for 2030 and seek to mobilise global efforts among governments,business and civil society around a common set of targets.Group activities align most closely with six UN SDGs,covering the themes of resilient,inclusive,sustainable and innovative industrialisation,t

258、ogether with good health and wellbeing,gender equality,decent work and economic growth,responsible consumption and production and climate action.We have already made progress towards advancing these goals.The actions we have taken and our performance across these areas are covered over the following

259、 pages.Aligning our sustainability strategy with the UN SDGs will help guide our future activity to ensure we continue to create sustainable,shared value for all stakeholders.31Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportEnvironmental

260、,social and governance(ESG).continued Our sustainability strategy.continuedMateriality We have conducted a materiality assessment to identify the material and emerging ESG issues relevant to our business,our stakeholders and the societies in which we operate.Team Internet performed the materiality a

261、ssessment according to GRI 2022.This exercise allowed the Group to identify the most significant impacts on the economy,environment and people,including human rights,as a result of its activities and business relationships.The process comprises four steps.1)Understanding the organisations context Th

262、e Group conducted a mapping exercise that defined a preliminary list of material topics based on industry-specific frameworks,such as SASB Software and IT services and SASB Internet and Media services.Also,a benchmark of the most relevant peers and stakeholders was conducted.This process helped the

263、organisation to consider the impacts commonly associated with the sector.This phase took place in a series of workshops guided by experts where critical organisation members were involved.2)Identification of impactsThe organisation involved internal and external stakeholders in identifying impacts.A

264、 survey was used to capture the impacts dimension(environment,economy and people),the type of impact(positive,negative,actual and potential)and the likelihood of the impact occurring.The total participation rate of the survey was 61%,where internal stakeholders rate was 64%and external stakeholders

265、50%.The likelihood represents the chance of an impact happening.The organisation used a qualitative method to measure this concept.The hierarchy used was:not likely,likely and very likely.The organisation validated the survey results through round table discussions moderated by a panel of experts an

266、d interviews with relevant organisation members and external stakeholders.3)Assessment of significanceTeam Internet assessed the significance of the impacts based on their severity defined by their scale,scope and irremediable character.The organisation assigned a score for each topic and category(1

267、:low,2:medium,3:high).The concept of scale refers to how severe a negative impact is(or could be),or how positive an impact is(or could be).The scale of a negative impact can depend on whether the impact leads to non-compliance with laws,regulations or authoritative intergovernmental instruments.The

268、 organisation also considered the context in which the impact took place to determine the scale scoring.The scope represents how widespread the impact is(or could be).This typically refers to the number of individuals or the extent of environmental resources that are or could be affected.Irremediabl

269、e character means how difficult it is for the organisation to counteract or make good the resulting harm.This concept applies only to negative impacts.32Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportEnvironmental,social and governance(E

270、SG).continuedMateriality continued4)PrioritisationThe topics were prioritised based on the average score of scale,scope and irremediable character(when applicable).The Group has prioritised negative impacts and positive impacts separately.The threshold used to consider a topics significance correspo

271、nds to those topics scored from medium to high.The Group is committed to addressing todays sustainability challenges and opportunities,adjusting our business strategy accordingly.Understanding the needs of key stakeholders and the expectations they have is central to ensuring Team Internet prioritis

272、es the most critical issues,and operates a responsible and sustainable business.Our sustainability strategy was developed around our priority sustainability topics and associated Sustainable Development Goals(SDGs).We sought stakeholders views in determining the materiality of different topics,havin

273、g undertaken an in-depth analysis of the SDGs to identify opportunities for shared value creation.Our materiality assessment followed best practice,involving our leadership team and a broad range of external stakeholders.Our sustainability strategy.continuedPrioritisation of positive impactsMaterial

274、 topic:Significance score:Diversity and equal opportunities 2.00Non-discrimination Training and education Corporate governance,ethics and complianceIntellectual property 2.002.002.002.00Prioritisation of negative impactsMaterial topic:Significance score:Data security 2.67Customer privacy Intellectua

275、l property Managing systemic risks from technologyEnergy GHG emissions 2.332.002.001.331.3333Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportEnvironmental,social and governance(ESG).continuedClimate-related financial disclosures.The Task

276、Force on Climate-related Financial Disclosures(TCFD)was established by the Financial Stability Board to improve reporting of climate-related risks and opportunities.Team Internet has structured its climate disclosures according to the TCFD recommendations,believing that good quality information abou

277、t its climate-related risks and opportunities supports Shareholders to make long-term investment decisions.A big part of holding ourselves accountable is taking a leadership position on disclosure.We adopted TCFD reporting in our 2022 report ahead of time on a voluntary basis and continue to be proa

278、ctive in our reporting and improve on our disclosures.We have detailed in this table our progress against the eleven TCFD recommendations.Fully consistent with TCFD recommendationsPartially consistent with TCFD recommendationsRecommendationsGovernanceDisclose the organisations governance around clim

279、ate-related risks and opportunitiesStrategyDisclose the actual and potential impacts of climate-related risks and opportunities on the organisations businesses,strategy and financial planning where such information is material.Risk managementDisclose how the organisation identifies,assesses and mana

280、ges climate-related risks.Read more on pages 34 to 35 Read more on page 38 Read more on pages 36 to 37 Metrics and targetsDisclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.Read more on page 39 Recommendation

281、:a)Describe the Boards oversight of climate-related risks and opportunities.b)Describe managements role in assessing and managing climate-related risks and opportunities.Recommendation:a)Describe the climate-related risks and opportunities the organisation has identified over the short,medium and lo

282、ng term.b)Describe the impact of climate-related risks and opportunities on the organisations businesses,strategy and financial planning.c)Describe the resilience of the organisations strategy,taking into consideration different climate-related scenarios,including a 2C or lower scenario.Recommendati

283、on:a)Describe the organisations processes for identifying and assessing climate-related risks.b)Describe the organisations processes for managing climate-related risks.c)Describe how processes for identifying,assessing and managing climate-related risks are integrated into the organisations overall

284、risk management.Recommendation:a)Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process.b)Disclose Scope 1,Scope 2 and,if appropriate,Scope 3 greenhouse gas(GHG)emissions,and the related risks.c)Describe t

285、he targets used by the organisation to manage climate-related risks and opportunities and performance against targets.34Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportEnvironmental,social and governance(ESG).continuedGovernance.Board ove

286、rsight of climate issues The Board establishes Team Internets purpose,vision and strategy with due consideration given to all material influencing factors,including those related to climate change.The Boards assessment of climate-related matters is informed through presentations across dedicated str

287、ategy sessions and within Board meetings,which cover the substance of the physical and transitional opportunities and risks associated with climate change.The Boards assessment of risk is reflected both in the strategic decisions it takes,and in the identification of Group principal risks and emergi

288、ng risks,which have the ability to affect achievement of agreed strategic objectives and,in turn,long-term success.Board Committee support is provided on climate-related issues in the following ways:the Remuneration&Nominations Committee ensures the Board possesses the correct depth and balance of c

289、apabilities to support Team Internets long-term position,including the expertise to assess the impact of climate-related change;and the Audit&Risk Committee supports the Board on matters relating to financial reporting,internal control and risk management.The Committee reviews the integrity of Team

290、Internets climate-related financial reporting and the process used to develop Team Internets TCFD-aligned disclosures.The Board-agreed division of responsibilities across key areas of Team Internets governance framework are set out in the terms of reference of the Board Committees,and the role profi

291、les for key Board roles.Role of Senior ManagementStrategy is implemented by the Executive Committee through the operational management of Team Internets business units and monitoring of performance in line with agreed plans.This includes ensuring business decisions are being taken in line with the p

292、arameters set by the Board and for monitoring new and emerging issues that require escalation.The Chief Financial Officer(CFO)retains responsibility for the management of climate-related initiatives under agreed strategy and,in turn,driving progress.In support of this,the CFO agrees the annual objec

293、tives for the Group Governance Lead,who is a direct report.The Group Governance Lead advises the Board,Group Executives,Senior Management Team,Group Audit&Risk Committee and business units on climate-related matters and progress under the various projects.The Group Audit&Risk Committee monitors all

294、Group risks on a periodic basis and ensures that the business units are managing the risks for which they are responsible.The Audit&Risk Committee has overall responsibility for ensuring the right mechanisms are in place for managing all risks,including climate-related risk and opportunities.Governi

295、ng climate-related risks and opportunities.35Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportEnvironmental,social and governance(ESG).continuedGovernance.continuedGoverning climate-related risks and opportunities.continuedEngaging with st

296、akeholders to inform strategyThe Group has conducted a materiality assessment during the year to help us understand which sustainability-related issues are most relevant to our internal and external stakeholders.The results of the materiality assessment are disclosed in the strategy section of the E

297、SG section of the strategic report on pages 31 and 32.Role of Senior ManagementAudit&Risk CommitteeMonitors and assesses our risk management and internal control system effectiveness on the Boards behalf.That includes climate change risks and opportunities,discussed at least on a quarterly basis.Top

298、-down risk managementOngoing risk mitigation and control review.Bottom-up risk managementIdentification,assessment and monitoring of risk.Chief Financial OfficerThe CFO is ultimately responsible for our environmental policy and performance.That includes climate-related risks and opportunities.Execut

299、ive Committee Sets operational strategy on climate change and sustainability.It also monitors associated progress,performance and risks informed by our Governance and Compliance Team.The Executive Committee meets on a monthly basis,agenda points include climate-related risks and opportunities.Govern

300、ance and Compliance Team The Governance and Compliance Team oversees the daily management of climate-related compliance and risk matters on behalf of the Executive Committee.They coordinate the process of identifying and assessing risks and provide regular reports to ensure effective communication.B

301、oard of DirectorsThe Board has overall responsibility for how we identify and manage climate-related risks and opportunities,as described on page 34.Matters reserved to the Board include items of significant strategic importance,such as those which have a direct impact on the Groups funding position

302、,reputation or integrity;and/or ethical standards.36Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportKey risksImpact scales High 4%of annual net revenue(gross profit)i.e.USD 8 millionMedium 1-4%of annual net revenue(gross profit)i.e.USD 2

303、million USD 8 millionLow 1%of annual net revenue(gross profit)i.e.USD 2 millionMinimal No significant financial impactEnvironmental,social and governance(ESG).continuedKey risks heatmapStrategy.Risks and opportunitiesTime horizonHighShort termMid-termLong termLowFinancial impact12431Severe wind/rain

304、 storm or other weather events 2Enhanced emissions-reporting obligations3Changing customer behaviour4Costs to transition to lower emissions technologyTime horizon Short term 0-5 years Mid-term 2030Long term 2050Impact of climate-related risks on our business and strategy In preparing the consolidate

305、d financial statements,the Directors have considered the impact of climate change on the Group and have concluded that there is no material impact on financial reporting judgements and estimates(as discussed in note 4 to the financial statements).This is consistent with the assertion that risks asso

306、ciated with climate change are not expected to have a material impact on the longer-term viability of the Group.Also,the Directors do not consider there to be a material impact on the carrying value of goodwill,other intangibles or on property,plant and equipment.Resilience of our strategyWe committ

307、ed to carbon reduction measures to reduce our exposure to future carbon pricing and energy cost increases.As part of our reduction planning,we have started discussions with our landlords and suppliers to assess their commitment towards a journey to net zero emissions.To help mitigate physical risks

308、to our data centres,we are transitioning to cloud-based hosting.This will increase geographical diversity of data storage and backup,reducing our reliance on any one specific data centre location.37Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategi

309、c reportEnvironmental,social and governance(ESG).continuedStrategy.continuedPhysical riskCurrent policiesMore frequent and severe heatwaves and extreme weather would likely mean a need for extra cooling maintenance costs and more business disruptionGlobal events can lead to higher traffic and people

310、 using the internet moreTransition riskN/ARegulatory and governmental policy changes may introduce additional operational costsTransitioning to energy efficient technologies and focusing on maintaining renewable electricity consumption in our operations could lead to lower operating costs as a resul

311、t of less reliance on expensive fossil fuelsTransition riskNet zero 2050Loss of revenue as a result of changing customer preferences and expectations on climate actionHaving a remote workforce protects business from physical risksHaving the Groups operations in high-efficiency buildings can reduce e

312、nergy costsTransition riskDelayed transition and Net zero 2050Increase in utility costs and rental prices as a result of higher energy pricesAdapt to changing consumer preferencesUse of lower carbon energy sourcesTime horizon Short term 0-5 years Mid-term 2030Long term 2050Mid-termReduced operating

313、costs(e.g.,through efficiency gains and cost reductions)Mid-termMid-termRisks and opportunities continuedSevere wind/rain storm or other weather eventsEnhanced emissions-reporting obligationsChanging customer behaviourCosts to transition to lower emissions technologyOpportunitiesTime horizonDescript

314、ionRiskScenarioImpact descriptionImpact38Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportEnvironmental,social and governance(ESG).continuedRisksSevere wind/rain storm or other weather eventsEnhanced emissions-reporting obligationsChanging

315、 customer behaviourCosts to transition to lower emissions technologyMitigation planRisk management.Process for identifying and managing risks Our risk management framework helps us assess,manage,monitor and act on risks including climate change to deliver on our strategic objectives.We track and rep

316、ort risks to the Audit&Risk Committee and Executive Committee.Risk identificationRisk treatment and monitoring Risk assessmentWe identify climate change risks as part of our risk management framework.We manage them through GRCs including operational resilience(physical assets),stakeholder management

317、(reputation)and supply management(supply chain).Day to day,we manage climate risks in the parts of our business they might affect.Once a risk is identified and assessed,a risk owner is responsible for developing and implementing the mitigating actions and controls.We decide how to mitigate or contro

318、l a risk based on its likelihood and impact.The control owners are responsible for reviewing policies,procedures and other relevant information to check whether the controls are effective and update them as necessary.We evaluate climate risks against time horizon,preparedness and likely degree of im

319、pact.We calculate the impact using quantitative and qualitative measures on revenue and market capitalisation,customer experience and stakeholder perception.This lets us determine relative risk priority.Transitioning to cloud computing,hence reducing reliance on data centres.Business continuity plan

320、s are in place for extreme weather events in all our locations,which are reviewed and tested regularly.Improve transparency of ESG data and climate transition plans.Continue to roll out energy efficiency programmes to minimise risk exposure.We continue to engage with our stakeholders and customers o

321、n climate-related issues.We consider these insights as part of our climate plans and approach to engaging with customers and other stakeholders.Continue to roll out energy efficiency programmes to optimise energy use.Engage partners in our value chain to promote alignment of carbon targets and actio

322、ns,including energy efficiency improvements.Mitigation plan39Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportEnvironmental,social and governance(ESG).continuedMetrics and targets.Metrics to assess risks and opportunities Our internal metr

323、ics and targets help us measure and manage financial risk associated with potential future carbon-related risks and opportunities.Team Internets Scope 1,2 and 3 emissions are summarised on page 40,giving comparative years.Targets used to manage risks and opportunities We are consistently striving to

324、 update and enhance our metrics and key risk indicators to more effectively gauge and address climate-related risks and opportunities.We acknowledge the need for further development in this domain as industry practices evolve and higher-quality data becomes more accessible.Disclosure of GHG emission

325、s In 2022,we conducted our most thorough assessment of Scope 1,2 and 3 emissions,benefiting from enhancements made to our data collection systems(refer to page 41).Throughout 2023,we have sustained this high standard,facilitating improved year-on-year comparisons and providing a consistent basis for

326、 evaluating our progress.40Team Internet Group Plc|Annual report 2023Additional informationFinancial statementsGovernanceStrategic reportEnvironmental,social and governance(ESG).continuedEnergy consumption.Streamlined Energy and Carbon Reporting(SECR)Under the Companies(Directors report)and Limited

327、Liability Partnerships(Energy and Carbon Report)Regulations 2018,we are mandated to disclose our UK energy use and associated greenhouse gas(GHG)emissions.Specifically,and as a minimum,we are required to report those GHG emissions relating to natural gas,electricity and transport fuel,as well as an

328、intensity ratio,under the SECR regulations.Methodology Team Internet Group Plc appointed ClimatePartner,a leading carbon and energy management company,to independently assess its GHG emissions in accordance with the UK Governments Environmental Reporting Guidelines:Including Streamlined Energy and C

329、arbon Reporting Guidance.ClimatePartner has conducted the 2023 carbon footprint calculation on behalf of Team Internet,including activities relevant to their Streamlined Energy and Carbon Report for 2023.The activities of all Team Internet global sites and full-time employees(FTEs)were included in t

330、he calculation.The calculation was conducted in accordance with the GHG Protocol Corporate Standard and HM Governments Environmental Reporting Guidelines(March 2019).ResultsThis is the fourth year Team Internet Group Plc has assessed its emissions.The two tables below show only the SECR required ele

331、ments for the UK operations.Element2023(tCO2e)2022(tCO2e)Direct emissions(Scope 1)66.560.1Indirect emissions(Scope 2)Purchased electricity8.2 8.9Total tCO2e(Scope 1 and 2)74.7 69.0 Other indirect emissions(Scope 3)Employee-owned car travel2.22.8Other indirect emissions(Scope 3)Upstream fuel and ener

332、gy-related emissions10.7 5.0 Total tCO2e(Scope 3)12.9 7.8 Gross total tonnes of CO2e87.6 76.8 Tonnes of CO2e per UK employee1.2 0.7 Scope 3 emissions are indirect GHG emissions which we cannot control but may be able to influence.As Scope 3 emission reporting is an ever-evolving space,Team Internet

333、is looking at the best way to collect this information going forward.This year has seen an increase in our carbon emissions in the UK,partly due to the increased quality of data collected around Scope 3 emissions.Tree plantation programmeTeam Internet continued to contribute in 2023 to a global tree plantation programme,Eden Reforestation Projects(EFP).In this effort,Team Internet helped EFP plant