ANNUAL REPORT 2015

Avaus Marketing Innovations is a leading marketing and technology service provider in the Nordics. We help our clients achieve better business results by combining creative content, technology, advanced analytics and digital media.

Contents

In Brief- Key Updates

- Mission, Vision and Strategy

2015 – Getting Closer- The Avaus Footprint

- Highlights and Accomplishments in 2015

Business Environment - The New Marketing Industry Strategy and People- Our Strategy and Priorities

- Our Services

- Attracting Opposites

- Avaus Values

- The Avaus Crew 2015

Financials and Management- Financials 2015

- Board and Management Teams

4

6

1218

26

2 3

‘‘In 2015 we set ourselves three key targets: To enter new markets, to grow our industrial customer base and to strengthen our creative offering. We were quite successful with all of the above and took one step closer to becoming a leading full service data-driven digital agency in the Nordics.

Our customer base has expanded substantially and half of our accounts are industrial or business services companies. Our Stockholm

office got a very good start and our new Centre of Excellence in Gdansk, has further strengthened our core competencies in marketing technology and data. Our technology solutions range has also expanded beyond Adobe and Marketo as we entered a partnership with Salesforce during the year. All these measures are contributing to strong and consistent growth in the future.”

Harri Roschier, Chairman

IN BRIEFOur people: 90 employees (68)

Offices: Helsinki, Stockholm, Gdansk

People: Key hires for 2015: Managing Director Sweden, Country Manager Poland, CTO Poland, Group CFO, Creative Director

Clients: Avaus customer base has expanded from 36 active accounts in Q4/2014 to 53 active accounts in Q4/2015. All together Avaus gained 14 new B2B customers and 7 new B2C customers during the year. Avaus customer churn in 2015 was record low of only 8% (13%)

New customers: In 2015 we welcomed, among others, a global fashion retailer, a leading Nordic retailer, a leading health services provider, a global design brand owner, a global professional services company, a Nordic internet services company, a national car maintenance and repair company, a global industrial specialist manufacturer, a building materials manufacturer, a building constructions consultant, and a global architectural design software company

Revenue: 8,1 million € (6,4M€) + 27%

EBITDA: 0,9 million € (0,6M€) + 33%

Meaningful relationshipsWe want to enable more significance and dialogue and to minimise clutter and waste in marketing

Client GrowthWe want to help Nordic companies successfully compete in the global digital marketplace

1. We want to be the best place to work and grow for a diverse group of talented people

2. We want to be an undisputed leader in driving marketing performance

Four Corner Stones1. Amazing people and strong culture2. Our business model relies on:

• Great sales results for our customers • Ongoing long term client

relationships • A 50/50 mix of tech and marketing • A combination of creativity and high

process efficiency 3. International profitable growth

• 30% YoY organic growth• EBITDA >12%

4. Constant innovation, change and pushing limits

KEY UPDATES AVAUS MISSION

AVAUS STRATEGY

AVAUS VISION

4 5

– GETTING CLOSER

6 7

To grow organically from 32 people to 90 people in two years is a dramatic experience. At the beginning of 2014 Avaus was a smallish specialist company with two core competences – implementing marketing technologies and operating marketing programs. In 2015 Avaus had grown into an international mid-sized company with an offering portfolio ranging from predictive analytics to creative excellence.

All the way Avaus has been able to attract extraordinary new talent and is on a steady path toward a full service data-driven digital agency in 2016. All teams have grown in size with the Technology team and the Growth hackers leading the way.

Since the divestment of the parent company Avaus Consulting in the summer of 2014, Avaus Marketing Innovations has been focusing on three things: attracting top talent, opening new markets and expanding our offering portfolio. The result has been rapid growth in an otherwise declining Finnish marketing services market.

For years we have been evangelising data-driven and technology-enabled marketing as a solution to the marketers’ core dilemma – diminishing returns on marketing investments. For years we have been insisting that marketing is not broken, we just have to change the way we do it.

The explosion of data management and customer interaction technologies have provided marketers with an ever expanding toolbox for doing things predecessors couldn’t even fantasise about. Early on, Avaus chose the right technology partners. We never lost our focus of solving the core marketing challenges with new methods. As late as 2012-2013 the Nordic B2C market was finally ripe for rapid change. The B2B market followed suit a year or two later.

This change is now gaining momentum as marketers increase their investment in marketing technology, related services and the new breeds of engaging digital content.

At the end of 2015 we were serving a substantially larger portfolio of companies with a much larger service offering than a year earlier. The timing of our launch of the Stockholm office seems to have been perfect. The initial response from the much larger Swedish market has been very encouraging. At the end of Q4 a rapidly growing Swedish team was already servicing a dozen Nordic and Swedish clients.

2015 – GETTING CLOSER THE AVAUS FOOTPRINT

Our footprint has expanded both within major clients as well as into new verticals.

The Finnish market, where Avaus was launched in 2007, has undergone a strict,

frugal regime where traditional media and below-the-line budgets have been dramatically cut since the all time high of 2007. As marketing austerity has prevailed, Avaus’ clients first started to make minor, then major investments in new technology-enabled capabilities and digital services. The end result is a strongly reversing trend, counterbalancing the continued pruning of the traditional media and below-the-line marketing spend.

Digital services, customer engagement platforms, own data development, programmatic media and compelling new digital content are examples of areas for increased marketing investments. Avaus has been fortunate to catch the new investment wave early on, and has been riding it ever since.

This new sub-segment of the marketing services market has evolved in the intersection of technology, data, digital media and digital creative content. Technology and data are now an ever more critical component of everything marketing does.

Up until the end of 2015 Avaus had facilitated

more than 1 billion data-driven engagements between end customers and their clients.

Tom NickelsFounding Partner

2013

Marketing StrategyNeolane/Adobe

MarketingWeb Analytics

2015 Business StrategyAdobe Marketing CloudSalesforce Marketing CloudMarketoAdtech Marketing AnalyticsData StrategyData Management PlatformsWeb AnalyticsCustomer AnalyticsContent DevelopmentMarketing ProgramsGrowth HackingCreativeSocial MediaProgrammatic Media

Our offering and competencies have developed

2013

Retail

Media & EntertainmentTelco

Financial services

2015 RetailMedia & EntertainmentTelco and InternetFinancial servicesTravelFMCGManufacturingSoftware and technologyProfessional ServicesPublic Sector

We work with 10 verticals

8 9

People & Culture: Developing Avaus cultural strengths – combining high quality, focus on results and diversity of talent - have been in the forefront of Avaus managerial development. Avaus had several high profile hiring successes during the year, among them Avaus new Creative Director, new CFO and Salesforce Marketing Cloud Team Lead. All teams grew in size but headcount increases were lead by Tech and Growth Hacking. Avaus management had its first full year working with the COO appointed in late 2014. Our teams in Poland and Sweden brought with them a new enlarged sense of purpose for the entire company. What we had been doing in Finland, is happening across all major European markets – Avaus is tapping into the global marketing transformation that is underway.

Creative Content: The Avaus Creative Content team had several major wins during the year. The launch of Avaus short movie “The Choice” aimed at two things: 1) Making the Avaus offering understandable 2) Showcasing the creative talent of the company. The movie went on to the finals of the New York Festival, and the team went on to score client assignment wins. The headcount was in rapid ascent throughout the year.

Innovation: Avaus strengthened its reputation as an innovative business partner for its clients. Avaus is combining growth hacking, innovative marketing and data management solutions with analytics and great content. This has resulted in many marketing success stories among Avaus clients. Avaus Best Practices database, accumulated over the years, provides a source of innovative ideas as well as a library of fully tried and tested, surefire solutions.

Data solutions: In 2015 Avaus took a major step towards combining the domains of MarTech and AdTech. Implementing data management platforms - DMP’s - enable the use of company proprietary data in a wide array of marketing circumstances. A DMP enables omni-channel, cross-device, personalised customer experience and advertising with the help of a single customer view.

New Business: The Avaus new business hit rate continued to improve during 2015. Major pitches and clients were won including a major retailer, a global travel operator, a global fashion retailer, a leading Nordic retailer, a leading health services provider, a global design brand owner, a global professional services company, a Nordic Internet services company, a national car maintenance and repair company, a global industrial specialist manufacturer, a building materials manufacturer, a building constructions consultant, and a global architectural design software company

Partnerships: Avaus further developed its strategic partnership with Adobe, implementing Adobe Marketing Cloud solutions for several major new big clients. In the Nordics, Adobe has strengthened its position as the leading B2C marketing cloud solutions. In the B2B space, Avaus solutions partner Marketo is the platform of choice for Avaus B2B clients with a rapid expansion of the installed base. Salesforce is the undisputed leader as an enterprise CRM solutions provider in Avaus core markets. Salesforce is also the CRM of choice for many of Avaus strategic clients. The strategic partnership with Salesforce Marketing Cloud was therefore a natural choice.

HIGHLIGHTS AND ACCOMPLISHMENTS IN 2015

B2B solutions: The Avaus B2B practice, launched in 2014 was very successful in 2015 as the customer base grew substantially during the year. In Q4 B2B customers represented 50% of Avaus’ total client base. Avaus successfully carried out several global marketing automation implementation projects as well as global B2B campaigns.

Change management: The transformation of the marketing function is accelerating as a result of increased demands for marketing accountability. Avaus has further developed its marketing strategy

advisory competences. Avaus is increasingly advising on the structuring and resourcing of the marketing function in rapidly changing digital environments.

Technology competence buildup: The Avaus Technology Team headcount increased from 16 to 28 including eight people in Poland. Avaus has the largest Adobe Campaign and Marketo implementation teams in the Nordics. The Salesforce technology resource was rapidly being ramped up during the second half of the year.

EXPERIAN MARKETING SERVICES EPSILON

(CONVERSANT)

REDPOINTNIELSEN (EXELATE)

KITEWHEELSIZMEK

MARIN SOFTWARE

ZETA INTERACTIVE

TERADATA

ORACLE

ADOBE

SALESFORCE

MEDIAMATH KRUX

TURNROCKET FUEL

DATAXU

SITECORE

IGNITIONONENEUSTAR

CHALLENGERS LEADERS

NICHE PLAYERS VISIONARIES

COMPLETENESS OF VISIONSource: Gartner 2016

IBM MARKETO

ABILITY TO EXECUTE

Gartner´s Magic Quadrant for Digital Marketing Hubs January 2016

Avaus partners

10 11

– THE NEW MARKETING INDUSTRY

12 13

The transformation of the marketing function is ultimately driven by radical consumer migration to digital channels, especially mobile. As a result, the marketing industry is undergoing the biggest transformation since the advent of TV-broadcasting in the late 1940s. Now, as then, a massive re-allocation of marketing investments and resources is the consequence.

The most visible shift is in media investments, where digital advertising in the Nordics in 2015 was close to 3,5BN€, representing 36% of total adspend. Adspend has been flat in the Nordics since the financial crisis of 2007, but the shift to digital has been as fast and radical as the decline of print advertising in all Nordic markets. In outlier Finland however, there’s been a 30% decrease in Adspend.

The shift from earned media and traditional BTL activities, to the development of own channels and customer interaction management capabilities, has been less visible and is poorly documented.

The annual “Avaus Marketing Innovator Survey” presents a detailed picture of this ongoing shift in marketing budget allocations.

BUSINESS ENVIRONMENT – THE NEW MARKETING INDUSTRY

HELSINKI

STOCKHOLM

GDANSK

Marketing budgets have shifted from traditional paid media to data-driven, technology enabled channels and also to the development of direct customer interaction capabilities.

This shift has had a profound impact on the structure of the marketing service industry. This expanding industry is driven by data and technology-based service provision.

According to Avaus estimates, the Nordic marketing technology, services and content (MTSC) was worth 2,7BN€ in 2015.

Source: Avaus – Marketing Innovators 2015

DEVELOPING OWN CHANNELS

SOCIAL MARKETING

ANALYTICS

CONTENT MARKETING

CRM AND MARKETING AUTOMATION

SEARCH MARKETING

DISPLAY ADVERTISING

EVENTS

MARKETING PERSONNEL

TV ADVERTISING

PRINT ADVERTISING

INVESTING LESS INVESTING MORE

83 %

77 %

77 %

62 %

61 %

52 %

31 %

31 %

13 %

8 %

8 %

Traditionalmarketing investments

Data-driven channels

Shift in Marketing Budget Allocation

14 15

The Nordic Marketing Technology Services and Content (MTSC) Market 2015 (M€)

The combined media, below-the-line marketing and agency spend in the Nordics was 20BN€ in 2015. The traditional marketing and MTSC markets combined are worth 22,7BN€. MTSC represented 12% of total marketing spend in the Nordics in 2015. MTSC plus digital advertising amounts to 6,2BN€ which is 27% of total marketing spend.

At the present Avaus is working on four out of the five sub-segments of the market, excluding digital services development.

Source: IDC, Avaus Marketing Innovations 2015

The enterprise marketing technology landscape has also undergone a rapid transformation during the last 5 years. The four dominant players Adobe, Oracle, Salesforce and IBM have created their marketing clouds through an extensive acquisition spree begun by IBM’s purchase of Unica in 2010.

In parallel with this development, the paid media landscape has successively been digitalised. The global digital paid media platforms of Google and Facebook that dominate this landscape, now collect 45% of total worldwide digital advertising euros. The principal analog marketing service providers – local media companies – are successively being replaced by the US tech giants in both paid media as well as in direct customer interaction management.

Adobe is at the present the undisputed leader of the MarTech space with Salesforce being the fastest growing contender.

The Nordic Marketing and IT markets are converging (BN€)

MARTECH SERVICES 464 DIGITAL CONSULTING 100 MARTECH 309 CONTENT AGENCY 496

IT 19,1MAR TECH 2,2MARKETING 20,6

DIGITAL SERVICES 1337

Marketing Cloud Global Sales 2015 – Adobe, Salesforce, Oracle (est), Marketo

Source: Adobe, Salesforce, Marketo Annual Reports 2015, Oracle estimated by Avaus based on Outsell’s Marketing Industry Database 2014

Avaus in 2015 was the leading enterprise marketing technology implementation specialist in the Nordics, working mainly with three of the dominant platforms: Adobe, Salesforce and Marketo.

Avaus target market size is 1,4 billion euro in the Nordics. According to IDC the market is expected to have a compound annual growth rate of 12,5% annually until 2020. This implies that the market will be 80% larger in five years.

Leading MarTech vendors are growing faster than market average. Adobe Marketing Cloud reported 30%, Marketo 46% and Salesforce overall reported growth was 34% annually.

Avaus is addressing a rapidly growing marketing services market partnering with the three of the leading enterprise marketing technology providers. Because of it’s strong initial market position in the Nordics, Avaus is expecting an average annual growth that is comparable with the growth of its technology partners.

ADOBE

SALESFORCE

ORACLE

MARKETO

1360

505

400

210 M€

16 17

STRATEGY PEOPLE

18 19

OUR STRATEGY AND PRIORITIES

AMAZING PEOPLE AND STRONG CULTURE

This is what it means:• Diversity is good• Ownership and responsibility

come before rules• Results come from people

collaborating, not an organisation chart

VALUE THROUGH COLLABORATION

This is what is means:• Great business results for our

customers• We create value in ongoing, long

term client collaboration• Our recipe is a fifty-fifty mix of

tech and marketing • We combine creativity and high

process efficiency

WHAT WE FOCUS ON

INTERNATIONAL PROFITABLE GROWTH

This is what it means: • 30% YoY• EBITDA >12%• We grow with expanding

markets• We enlarge our geographic

footprint• We develop our portfolio of

offerings

CONSTANT INNOVATION, CHANGE AND PUSHING LIMITS

This is what it means:• New technologies combined

with new creative concepts enable extraordinary experiences and business results

• Data tells what’s going on - innovation is about what could be going on

• Customer organisations need to change too – fast and profoundly

• Great results are just a couple hacks away from good ones

We create results by using data to connect customers to the thing they really care about. We also know when and where to do it.

For B2B marketers we know how to engage prospects and customers with the right content at the different stages of their decision making

MARKETING ANALYTICSCurrent customer needs are expressed every second in digital encounters. We help our clients turn data into actions – actions that build lasting, more meaningful and profitable relationships with their customers.

DATA MANAGEMENTData is precious and needs to be nurtured and managed. We implement data management platforms that turn data into rocket fuel for marketers. Cross-channel, personalised customer experiences can now be delivered in all channels, whenever it is the right time to do it.

MARKETING TECHNOLOGYWe implement the leading marketing technology platforms to enable our clients to automate customer engagement in their own channels as well as in bought media.

CREATIVE AND CONTENTWe help companies establish emotional bonds between their brands and their clients. We combine inspiring creative concepts with personalised and engaging content solutions.

STRATEGY AND INSIGHTMarketing strategies aiming at top-line growth are what we do best. We use numbers, best-practices and decades of business experience to help our clients become top-performers.

THE NEW MARKETING ORGANISATIONStrategy, Data, Technology and great Content are not enough. Somebody’s got to do the job. We help marketing organisations re-invent themselves and acquire the new skills and ways of working that are needed for success.

SMART MEDIAWe help our clients get a higher return on bought media investments by taking media buying in-house, using owned data, growth hacking methods, testing and continuous optimisation to get the best possible return on mediaspend.

OUR SERVICES

1.

2.

3.

4.

5.

6.

7.

20 21

ATTRACTING OPPOSITES

Our culture helps us to attract amazing people with diverse skills – and it drives them to do their best work

Avaus is about deep customer insight, creative storytelling, brand building with the help of the most advanced MarTech and data expertise. We help companies and brands adjust to the digital future. All this requires a unique set of diverse talent and expertise rarely gathered under the same roof.

The Avaus culture is our main enabler. It supports diversity of talent, encourages collaboration over competence areas and borders, and cherishes rapid learning in multi-skilled teams. We believe in attracting opposites, technologists working with creatives, intuitive problem solvers with analysts, planners with doers. We call it mashing.

This method of attracting opposites, has created a methodology to rapidly and efficiently bring strategies and concepts to marketing action. Mashing happens in Growth Hacking when communications specialists and analysts work together. It happens in our Smart Media practice when Content Developers work with data scientists and programmatic media specialists.

We know that a culture that attracts opposites is a prerequisite for marketing success today. When you get technologists, storytellers, data scientists and business developers to join forces, you create amazing results.

PROJECTS

CREATIVE

PLANNING

EMPATHY

BEST EXPERIENCE

PROCESSES

TECHNOLOGY

DOING

DATA-DRIVEN

SALES FOCUS

WE MAKE OPPOSITES ATTRACT

AMAZING PEOPLE: Our success comes from great people working together

RESULTS: We always go the extra mile to produce great results for our clients

FREEDOM & RESPONSIBILITY: We favour autonomy and take ownership - we are entrusted with freedom to get things done in a smart and profitable way

PROFITABILITY: The key to our long-term success is profitability and growth

AMBITION: We pursue growth and learning - we take pride in our work but we want to be even better and go even further

TRUST: Open communications, keeping promises and being professional builds trust and long-term close relationships

REDUCE WASTE: We love simple solutions that create efficient processes focusing only on the essential

BEING ADVENTUROUS: We question the status quo and drive change through creativity, open-mindedness and experimentation

BE HUMBLE: We never take success for granted, we ask for help when we need it

CREATE FUN: Fun comes first, and a little weirdness is our middle name

THE BEST PEOPLE

AVAUS CULTURE

AVAUS VALUES

22 23

THE AVAUS CREW 2015

“Drive growth and profitability through great people and strong culture, manage workload and have fun together while doing it.”

Tom Nickels

ANALYTICS 11 %

CREATIVE 9 %

GH 14 %

ADMIN 12 %

MEDIA 5 %STRATEGY 16 %

TECH 33 %

Employee turnover in 2014, 8%

< 30 30-34 35-39 40-44 45-50 50+

21%

31%

22%15%

3%

AGE DISTRIBUTION

BUSINESS SCHOOL 46%UNIVERSITY TECH 28%ARTS & DESIGN 9%SOCIAL SC. 6%OTHER 11%

SCHOOL

BY OFFERING • YEAR OF EMPLOYMENT AT AVAUS

2014-2015 64%

2005-2007 7%

2008-2010 7%

2011-2013 28%

FEMALE 32% • MALE 68%

8%

DEGREEPHD OR LICENCIATE 3%MASTERS DEGREE 58%BC OF ARTS 24%VOCATIONAL 7%HIGH SCHOOL 7%

24 25

FINANCIALS MANAGEMENT

26 27

BOARD AND MANAGEMENT TEAMS

Harri Roschier Chairman, Founding Partner

Tom Nickels Founding Partner

Kim WeckströmFounding Partner

Markus EiniöBoard Member

Jyrki Poutanen Creative

Mia Luostarinen Content

Emma Storbacka Sales Sweden

Jukka Immonen Technology

Topi K. TuominenProduction

Anna MasalinGrowth Hacking

Pekka PohjolaFinance

Jakub DabkowskiTechnology

Board

Management

Tuomo Räsänen COO

Mikael Thiel MD Sweden

Patryk Janiak MD Poland

Anna HakkarainenB2C

Henri SyvänenB2B

2015 2014 Revenue 000' € 8 077 6 391 Materials and services -1 492 -18% -1 483 -23% Personnel cost -3 918 -49% -3 022 -47% Other operating expenses -1 849 -23% -1 250 -20% Operating profit 767 9% 636 10% Financial income and expenses -10 -11 Profit before extraordinary items 757 9% 539 8% Profit before appropriations 757 9% 539 Income taxes -180 -114 Profit for the financial year 576 7% 425 7%

FINANCIALS 2015

Petri Heinonen Media

Jari SalonjuuriAnalytics

28 29

AVAUS MARKETING INNOVATIONS GROWTH 2013-2015 – CAGR* 34%

2013 2014 2015

4,5 6,5 8,1

Revenue M€

M€

*) Compound Annual Growth Rate

A SHORT HISTORY 2007-2015

2007 – Avaus Consulting founded by Tom Nickels, Kim Weckström, Harri Roschier, Juha-Pekka Virtanen. LoyaltyNorth is acquired

2008 – LoyaltyNorth becomes Avaus Dialog. Neolane chosen as preferred Marketing Automation Platform, first major retail customer

2009 – Second major retail customer, turnover 1 million euros

2011 – HBO Nordic becomes major client, turnover 2,6 million euros

2012 – Marketo becomes B2B marketing automation partner. First B2B marketing automation customer, turnover 3,6 million euros

2013 – Avaus Dialog is spun out from Avaus Consulting, Neolane acquired by Adobe, turnover 4,5 million

2014 – Avaus Consulting is acquired by Siili Solutions Oyj. Avaus Marketing Innovations continues with founding partners as principal owners. Smart Advertising offering launched. Headcount uo from 32 to 64. Turnover 6,5 million euros

2015 – Offices launched in Stockholm and Gdansk. B2B customer base grows significantly. Salesforce partnership announced. Turnover 8,1 million euros.

2016 – Q1 Headcount 90, Growth year on year 60%, estimated turnover 12 million euros, Creative nomination for New York Festivals, Finalist for Marketo’s Agency of the Year.

30 31