Performance marketing network, Tradedoubler, has announced its interim financial report for the third quarter July to September 2013 in a webcast to analysts.

Sales were disappointing for the network, having dropped 11.3% compared to the same period in 2012, and they were accompanied by a warning that they are unlikely to line up to original forecasts for the rest of the year.

Tradedoubler’s CEO and president, Rob Wilson, revealed early on his presentation of the network’s books for Q3 that there would be no return to growth in 2013, as was previously anticipated by the firm.

The network reasoned that the sales decline was because of poor performance in the French market, especially in the email channel, and a significant unnamed advertiser pausing its activity.

Wilson did clarify later that said advertiser has since restarted its performance work, just not at the same levels as previously.

Cost-cutting Rewarded

Since taking over, the CEO and President has initiated some heavy cost-saving measures to make the company more efficient and turning sales into profit, which can be seen in its EBITDA of nearly SEK 60 million compared to last year’s SEK 15.2 million.

Additional signs of recovery could be seen in Tradedoubler’s reported operating profit that has been turned around from a negative SEK 7.8 million to SEK 15.5 million between July and September this year.

Wilson should be praised for his cost-cutting, which can be a hard thing to do effectively. The worry will be if the EBITDA and operating profit can be maintained should sales continue to decline as costs can only be curtailed to a point.

Cash Flow at the Double

Another plus for Tradedoubler is in its cash generation. Profits are fine, but without cash in hand, expendables such as bills and investment can be difficult. Fortunately for the network, its cash flow from operating activities has more than doubled year-on-year in Q3 from SEK 13.4 million to SEK 29.4 million.

Investment in the wider performance marketing industry is a more long-term target for Wilson, who believes the changes he has made to Tradedoubler will maintain current levels of profits at the company.

“I’m proud of the fact that we’ve developed an even more client-focused and operationally efficient business, which is now consistently delivering healthy levels of profitability,” Wilson said.

“This provides us with a great foundation on which to further invest in the performance marketing industry and as a result to grow our business in the UK and across Europe. There are exciting things planned for 2014 at Tradedoubler, watch this space.”