The online audience monetisation specialist sets up its secure payment platform. Membership of GIE Cartes Bancaires is a winning argument in recruiting firms and individuals selling goods and services on line.

An Internet company… This Friday, 24 June, the highly select GIE Cartes Bancaires organisation, to which France’s principal financial establishments belong, welcomes a new and by no means typical member: Rentabiliweb. After two years of persistent effort, the company founded by Jean-Baptiste Descroix-Vernier at last enters the holy of holies, co-opted by BPCE. “Welcomes” is perhaps not quite the right word: the French banks have done their utmost to delay application of the European directive on payment services, intended to bring new players into the market.

French pioneer
In other parts of Europe, dozens of payment organisations have been set up since the new regulations were introduced in 2007. In the United Kingdom alone, there are now as many as eighty, and there are forty or so in Luxembourg. In France, there are only six, each operating in a specific field. Rentabiliweb is one of this number, and its teams are in a more rebellious mood than ever before. The troops of Iliad-Free must have felt much the same a decade or so ago. “In financial services, we are experiencing what telecommunications were going through at that time”, says Thibaut Faurès Fustel de Coulanges, general manager of Rentabiliweb. At the beginning of 2011, the company was the first payment establishment officially approved by the Banque de France to take payment by specialised banker’s card on line.
The rise of these new companies in the area of e-commerce-related payments is upsetting vested interests and encroaching on protected territory. Until now, the French market in online financial transactions was a special preserve of the banks, and particularly two of them: Société Générale and Crédit Mutuel. By obtaining accreditation in France, where its secure servers are located, Rentabiliweb, specialising in online audience monetisation, will be gaining access to the whole European Union market with its tens of thousands of e-commerce websites. By becoming a member of GIE Cartes Bancaires, the company will be able to stick a finger in their private pies and refine the services it offers online traders, probably before the end of the year.

Financial solidarity

The competition is observing Rentabiliweb’s first steps in this direction with great interest. At PayPal, a subsidiary of e-Bay specialising in electronic payments, they are trying to play down the arrival of this troublemaker. “It is quite normal that players such as Rentabiliweb be granted a licence”, explains one PayPal manager. “For our part, we are seeing new initiatives launched every week, evidence of the vitality of the payments sector.”
But the Descroix-Vernier team is already putting forward some solid arguments. During the winter, the Rentabiliweb boss invited thirty or so investors to visit a major data centre located in the Paris region. His aim: to convince his guests that Rentabiliweb has the resources to make good its ambitions in the cyber-payments sector. His enterprise, with turnover of more than 90 million euro and annual growth of over 30%, is currently the darling of the markets. It has come through the recession unscathed and, in the last twelve months, its share price has climbed by more than 70%.
Security is the key aspect of Rentabiliweb’s strategy where online payments are concerned. “The moment when an Internet user has to type in his banker’s card number to make his purchase is a psychologically important stage in the process: 32% of online buyers break off the transaction if they encounter a problem when making payment”, explains Thibaut Faurès Fustel de Coulanges. The group claims that it is already “more than satisfying the security regulations prescribed by the Monetary and Financial Code”.
To begin with, the company says it can offer users a fluid and transparent experience: goodbye to the ugly and disturbing page that appears when you proceed to make your purchase. “We are already doing this on the dozens of sites we operate in house at Rentabiliweb, and we are quite capable of doing it on account of third parties”, says Jean-Baptiste Descroix-Vernier.

J-Chalin / L’Expansion

A competitive approach

Above all, the newly fledged payments establishment hopes to benefit from another of its advantages: its small size. With just 200 employees (his “ninjas”, as Descroix-Vernier calls them) based in Europe, Siberia and the United States, the company’s costs are much lower than those of the major banks. “We are in the process of finalising our terms and conditions, but clearly we shall be offering online traders rates that are lower than those currently practised”, affirms Philippe Bontemps, deputy general manager of Rentabiliweb Europe, recently recruited to develop the firm’s monetisation business. Rentabiliweb should be able to bring down prices by between 10 and 30%.
“And online payment will no longer be a simple commodity, as it is today”, promises Thibaut Faurès Fustel de Coulanges. Because Rentabiliweb will be able to rely on its original know-how in persuading online traders to sign up. Since it was founded roughly ten years ago, the company has based its reputation for monetising the content of web sites on more accurate knowledge of the visitors to such sites. In managing the financial transaction stage of the sales operation on their behalf, it will be able to provide traders with an increasingly subtle profile of the people buying their goods and services.

Big-name backing

Website owners still need to be persuaded to cross the Rubicon, to break their comfortable ties with the banks and entrust a crucial part of their business to this upstart newcomer. Here again, Descroix-Vernier has a secret weapon: his shareholders, who include Bernard Arnault, François Pinault and Stéphane Courbit. Not that he goes running after celebrities. But, through them, he can count on the custom of such powerful brands as LVMH, Fnac and La Redoute, as well as some big names from the world of online games, to give him a leg-up.
And Rentabiliweb will have to move quickly: the American giants are waiting in the wings. Facebook is promoting its virtual money. Amazon has its virtual portfolio solution, while Google and Apple are betting on their own technology. Rentabiliweb is definitely up among the big boys.

Gilles Fontaine

Some Chief Executives would not be out of place in a novel; they would fit perfectly into a work by Alexandre Dumas or Victor Hugo. This is certainly the case of Jean-Baptiste Descroix-Vernier, chairman and founder of RENTABILIWEB (BE0946620946 – BIL), famous for his dreadlocks.

• The success story of an unusual CEO

Our man had been through several incarnations before setting up his company, on the way managing to recruit François Pinault and Bernard Arnault as shareholders (Yes, you did read right…). He first trained as a priest, then became a commercial lawyer. He disappeared for 18 months, so effectively that even his parents did not know where he was. “I like mystery, so I won’t tell you anything about it; I had my time as the lawyer Jacques Vergès”, he begins, before suddenly switching to Christian-name terms. Despite rumours about his sometimes difficult character, he was extremely courteous, prepared to answer all my questions.

I immediately felt he was a straight-talker. He doesn’t like road shows or the idiotic questions asked by some fund managers and journalists. But he admits that, on this side of the house, you cannot avoid a minimum of communication – you don’t need to convince me, you’re beginning to get to know me!

At the start of our interview, at the Hôtel Raphael, where he is a habitué, he warns me: “I can give you forty minutes, I’ve got to get back to Amsterdam, to the barge where I live. I need the peace and quiet”.

• A business riding a swelling wave

OK, before embarking on the financial structure and health of the company, I’d better begin at the beginning: its field of activity RENTABILIWEB is a specialist in audience monetisation. In other words, its job is to make money from people who visit websites, whether on its own account by exploiting sites it publishes itself (B-to-C = business to consumer), or by proposing payment solutions for third parties (B-to-B = business to business).

Since I have recently reported on e-commerce, you will know that this sector is doing extremely well. And, as you would expect, RENTABILIWEB’s business is thriving.

Last year, the group’s turnover grew by roughly 38% to €90 million: €51.6 million (+28%) for B-to-C activity and €38.4 million (+54%) for B-to-B. “In the B-to-B sector, we have become a one-stop shop for audience monetisation, providing micro-payment services and interactive marketing, as well as online advertising”, explains Jean-Baptiste Descroix-Vernier.

“Our principal customers included media concerns, games sites and e-commerce platforms.” As I have told you, the group also publishes entertainment sites featuring games, dating and astrology (a new topic developed by the group) on its own account. “One of our most successful sites is abrutis.com!”, he tells ne with a toothy smile, clearly enjoying the irony of the situation.

JBDV thinks they should be offering more content in areas such as employment, sport and information. “We boost our traffic by cross-selling between our different areas of activity.” Cross-selling is a sales technique well suited to the Internet, consisting in offering the customer of one site the products of another site, which might interest him/her because they are complementary.

But much of our conversation related to a new development of great importance to the group: its accreditation as an online payment institution: “We have obtained approval from the official watchdog, which allows us to receive payments on behalf of third parties and clearing houses. This is an enormous growth opportunity for us, as it will enable us to compete with such establishments as Société Générale and Crédit Mutuel. And our services will be less expensive, as our charges are lower than those of traditional banks.” But the Chief Executive prefers not to make too many forecasts… All we know is that this side of the business will be starting up this year, with approval extended to cover Germany and the United Kingdom. But I would imagine that there is an enormous market to tap into.

According to the FEVAD (again I refer you to my article on the topic), €31 billion have been spent in France via the Internet. Which should enable RENTABILIWEB to find a new source of growth and profitability, starting this year. The first payments should start coming through in the second half of this year.

• An appropriately named company

So, let’s talk about profitability… RENTABILIWEB (“profiting from the web”) is appropriately named, like other stars of the Internet. Last year, as I told you, company turnover increased by 37.6% to €90 million, while the trading profit was €15.5 million, up 38.4%. And 2011 should be another excellent year.

In the first quarter, sales have already increased by 16.1%, to €22.6 million. Given JBDV’s reluctance to provide information about future prospects, I have reviewed the analyses I made prior to the interview. I reckon on an increase in turnover of around 20% to €110 million, with the trading profit* stable at around 17.5%, i.e. around €20 million. Where cash flow is concerned, the company is perfectly healthy, with €18 million in hand.

Let’s look for a moment at stock-market ratios. The company’s value (i.e. its stock-market capitalisation, or net worth) stands at around €150 million. This means that, with a VE/REX of 7, the shares are not excessively expensive. The rise in value of its shares has been exceptional. In just one year, the shares have gained 50% and are now trading at around €9.70. But if we go further back, the trend is even better. “We were first listed via a private placement in December 2006, at a price of €3. Our shareholders have done very well indeed”, concludes Jean-Baptiste Descroix-Vernier. Since the beginning of 2010, the shares are in the normal market whereas before it was au fixing.

40 minutes later, our interview comes to an end. We say goodbye and he climbs onto the motorbike-taxi that will take him to the airport to return to his peaceful retreat: his barge in Amsterdam. I have just met a happy Chief Executive. Given the share price and future prospects, the shareholders have every reason to be happy, too.

* Explanation: operating profit or trading profit.
This expresses the relationship between the company’s trading profit (operating profit) and its turnover. For example, if a company achieves sales of €100 million and its trading profit is €10 million, the profit margin is 10%.

A 18 ans, il s’imaginait prêtre. Mais il a finalement troqué l’aube contre la robe d’avocat qu’il a portée pendant 6 ans avant de se lancer dans l’entrepreneuriat. C’est ainsi qu’est née en 2001, Rentabiliweb, une entreprise spécialiste de la monétisation des audiences et premier guichet unique de solutions rentables à destination des professionnels sur Internet et mobiles en Europe.

Le groupe est aujourd’hui côté en bourse et emploie 170 personnes – ses ninjas, comme il les appelle- que Jean-Baptiste Descroix-Vernier dirige depuis sa péniche amstellodamoise grâce à des écrans de contrôle.

Jean-Baptiste Descroix-Vernier est également membre du conseil national du numérique.

[wmv]http://www.rentabiliweb-group.com/wp-content/uploads/2011/05/DESCROIX-VERNIER-ENTREPRENEUR.mp4[/wmv]

Brussels, also quoted in Paris.

The facts. The group, 48.7 % of whose shares are controlled by its chairman and founder Jean-Baptiste Descroix-Vernier, publishes websites on topics such as personal meetings/dating and games. It also offers Internet payment solutions and online marketing services, notably with its Mailorama subsidiary and its database of 11 million e-mail addresses.

Comments.

In 2010, Rentabiliweb made a net profit of €8 million (an increase of 7.6 %), that is a Return on Equity of 12.6 %. If extraordinary negative items are excluded, their profits can be considered to have increased by 37 % reaching 10.2 million. Moreover, the operating profit on ordinary activities climbed from 36.2 % to 15.5 million. In the face of the decline of online micropayment systems – which is linked to the fact that consumers are less and less afraid of making bank card payments via the Internet – the group has received approval from the ACP prudential supervisory authority (Autorité de contrôle prudential, Banque de France) to provide card payment services (and offer subscriptions). Enough to compete with Sogepass (Société Générale) and Cybermut (Crédit Mutuel). This approval, which is valid for Europe, has subsequently been extended to Germany and the United Kingdom in particular. The first contracts are expected for the middle of the year. In addition, an acquisition made last year, as well as the telecommunications licences held by the company, mean that it is able to engage in another growth-promoting activity: that of automated payments (for video-surveillance, lift alarms, motorways, car parks etc.). J.-L.C.

Buy

The securities are set at 15.2 times the net profit for 2011, estimated a 12 million, i.e. an increase of 18 % compared with the net income for 2010, excluding extraordinary items. This ratio falls to a factor of 13.1 on the basis of the forecasts for 2012, without taking into account the probable strong expansion of promising and lucrative online bank card payment solutions. Moreover, the balance sheet is strong with 18.5 million in net cash balances, which will make new acquisitions possible.

Next rendezvous

5th May, quarterly turnover.See the full size press cutting

by Jean-Luc Champetier for Investir

After three years on the Alternext index, Rentabiliweb was officially listed on 15 January 2010, then admitted on 24 January to compartment B. Founded in 2002, the company has also been granted Banque de France approval to compete with banks, proposing its online system for making payments by banker’s card to e-commerce websites. Activity in this sector, which is growing by 10% a year and is highly profitable, should boost sales from the second half of this year.

The group is also benefiting from the growth in online advertising, as a website publisher and manager of external portals. It also has a valuable database containing the names of seven million internet users who have supplied information regarding their tastes and are willing to receive advertising material by e-mail.

The company founded by Jean-Baptiste Descroix-Vernier (who controls 50.5 % of the capital) is specialised in the “monetisation” of Internet audiences, those of websites that it publishes itself (mainly in the fields of games and dating/meetings) and those of its clients. It does this by means of micropayment systems and targeted advertising campaigns. Rentabiliweb hopes to receive approval in September from the Banque de France as a payment service provider, in order to receive funds on behalf of its clients.

Analysis.

The buyout of Edencast was favourably received by the Stock Exchange (up by 3 % on 10th August). According to Stephan Dubosq, securities analyst at Arkeon, it will have a positive effect on the earnings per share from 2011. This company, created in 2004 by Julien Dumas and Alban Wienkoop, is recognised for its know-how in acquiring highly-targeted traffic on the Web. The group’s database is going to be almost doubled with a wealth of more than 6 million “opt-in” e-mail addresses (of which 1.5 million for the Mailorama subsidiary) belonging to Internet users, having agreed to receive e-mails linked to their centres of interest. Edencast’s number one client is none other than Rentabiliweb (followed by Hi-Media), which is thus going to take over the profit margin of one of its business providers. Edencast also publishes a few websites such as Abrutis.com (1.8 million individual visitors), Starwizz.com and Justalove.com. Part of the payment will be made in cash, that is to say €7.5 million, with a complement, according to the operating profit in 2010 and 2011. The balance of 4 million will be paid in shares (617,934, that is to say 3.6 % of the current capital) issued at €6.50. They will be non-transferable for three years, specifies Jean-Baptiste Descroix-Vernier, who has also persuaded Edencast’s founders to reduce their salaries.

Buying.

The net cash balance (€14.2 million at the end of 2009) will remain plentiful. Objective: €8 (mnémo: BIL)

Next RENDEZVOUS:

Half-yearly results at 31st August (before Stock Exchange)

The facts

Rentabiliweb Opens Up to Women. The specialist in the monetisation of audiences on the Internet has announced its acquisition of the whole of the editorial content, brand, and database of Clic Bien Etre, the Yves Rocher group’s health and shopping information portal.

According to a press release from Rentabiliweb, this website is visited by a million individual Internet users every month. The total amount of the transaction has not been specified. Thanks to this acquisition, Rentabiliweb is not only consolidating its provision of monetisation solutions for direct marketing, but also its range of digital entertainment content.

Moreover, the group estimates that the return on investment from this acquisition which is “above all strategic” will have been achieved “before the end of the 2010 financial year. “

Analysis (Investir)

An issue of new shares to the amount of just under €10 million in January 2010 should make it possible to finance the acquisition of the Yves Rocher well-being portal. Rentabiliweb’s strategy is simple. The aim is to attract female virtual communities (88% of the site’s 200,000 members are women), thanks to editorial content of interest to them, in the field of health and well-being. The ultimate goal is then to enrich the group’s databases, in order to monetise them.

The operation makes sense, since in the B2C (business-to-consumer) sector, Rentabiliweb had already declared that it wanted to consolidate itself by means of a website with female-oriented content. In doing so it intended to gain an additional audience as well as to promote “cross-selling” through its other website themes (“casual gaming” has a large female audience) and business activities (mailorama.fr for direct marketing).

Rentabiliweb is “only just” beginning its expansion in the women’s sector, “which heralds other deals over the coming months”, interprets Arkéon Finance in its daily note.

The group’s accounts are excellent. In 2009, Rentabiliweb showed a bottom line of €7.5 million, an increase of nearly 12%. According to our forecasts, the group’s profits are set to rise again by 18%, thereby reaching €8.85 million at the end of 2010. An estimate upgraded 12.6 times at the current share price of €6.52.

Rentabiliweb is putting its external growth strategy in place. The acquisition of Yves Rocher’s women’s portal is a shrewd move, since it will enrich the group’s databases. We are buyers, aiming at €8.

Share price at the time of the advice: €6.5