The Bango mobile payment platform is vital to the global growth in digital content sales. The giants of mobile choose the Bango Payment Platform to provide a delightful and immediate payment experience that maximizes sales of digital content. With over 140 markets activated by our partners, the Bango Payment Platform is established as the global standard for app stores to offer carrier billing. As the next billion consumers pick up their first smartphone, Bango technology will be there to unlock the universe of apps, video, games and other content that bring those smartphones to life. Global leaders plugging into Bango include Amazon, BlackBerry, Facebook, Google, Microsoft and Mozilla. January to December 2014 saw Bango exceed 140 Mobile Network Operator activations, with new integrations in strategically vital, fast-growing markets, including Indonesia, Mexico, South Africa and across the Middle East. Bango was proud to launch two entirely new app store integrations during 2014, with Amazon, who are acknowledged as the masters of connected commerce, and with Samsung, the world’s largest smartphone manufacturer. Six of the world’s largest app stores have chosen the Bango Payment Platform, demonstrating that Bango has emerged as the de facto global standard for carrier billing in app stores. Contents 01 Contents Highlights……………….……………………….....…………..….………...…02 Strategic report Chairman statement…….......................………………….……......……03 CEO statement……………………........................….…….……...……..04 CFO statement…………………….........................……….…...………..07 Strategic report……………….…........................………....……......…..09 Business review Progress report.…………………….………….………….…………....……11 Products…………………………………………………………….…...……13 Business model………………………………………………………....…...13 Key market developments……..……………….………………………...…14 Report of Directors Directors……….......................………………………………….…...…...15 Company information…………….…….………….....................…….....17 Directors’ report…………………………….…………............................18 Corporate governance statement…......................….………...…………20 Remuneration Committee report….….…….……........................……..21 Financial statements Independent auditor’s report to the members of Bango PLC…...….…...22 Consolidated balance sheet……….…................................…...…...…23 Consolidated statement of comprehensive income..............................24 Consolidated cash flow statement…….….........................…......….....25 Consolidated statement of changes in equity……...............................26 Notes to the financial statements…….…….….…...............................27 Independent auditor’s report to the members of Bango PLC…...….......45 Company balance sheet…………….……......................…….....……...46 Notes to the financial statements…….………..…...............................47 Shareholder notices Notice of General Meeting………………….……..............................…50 Form of proxy….……………………….....................……….....…....…..52 Explanatory notes….........................................….….…....................54 Highlights 02 Highlights Live stores 22 Google Play Firefox Marketplace BlackBerry Messenger BlackBerry World Windows Phone Store Amazon Appstore Samsung GALAXY Apps 2011 2012 2013 2014 Cost Capacity Stable operational cost base of £5.0m (FY2013: £5.1m) Bango Platform tested at £650m ($1bn) annualized spend levels 3.5 25 3 20 2.5 15 2 1.5 10 (£million GBP) 1 Processing capacity Processing capacity Operational cost base Operational cost 5 0.5 (multiple of current transaction volumes) 0 0 1h2013 2h2013 1h2014 2h2014 Pre platform upgrade Post platform upgrade Daily end user spend Cash and cash equivalents End user spend increased to £25.2m (FY2013: £15.6m), up 62% Cash balance of £6.3m (FY2013: £5.1m) 7 100 6 5 4 50 3 (£million GBP) GBP) (£million (£thousand GBP) Daily end user spend 2 Cash and cash equivalents 1 0 0 2011 2012 2013 2014 FY2013 FY2014 Bango PLC Annual Report 2014 03 Chairman’s statement Chairman’s statement Over the past two years, Bango has made Platform able to process this growth demonstrating its ability to scale while significant investment into its platform, within current cost base, Bango is now the Bango cost base remains stable. both in terms of capacity and robustness. well positioned to benefit financially from This has enabled the team to secure its strategic position in the market. The global market for paid content is partnerships with many of the world’s growing and it is now clear that carrier leading app stores. 2014 was the year After achieving success in providing billing will take a meaningful share of that these investments and customer payment services for independent content that market. Bango fulfils a vital industry wins started to show a return, as providers in the UK and USA – resulting role, delivering carrier billing for app evidenced by the increased transaction in a maiden profit in 2010, Bango made stores. I look forward to Bango’s next volumes and end user spend through the the strategic decision to invest in product stage of growth. Bango Platform. Crucially, end user development for the app stores which are at the heart of digital content sales in a I would like to thank the Bango team for spend is now rising without the need to their impressive work in securing 140 live increase the cost base of the business. market increasingly dominated by smartphones. activations, across 60 countries for six of The Bango Payment Platform has been the world’s largest app stores. Thanks tested with loads in excess of £650m App stores have adopted carrier billing at also to shareholders in Bango for their ($1bn) per year of end user spend. Bango varying rates, beginning with BlackBerry continued support as we see the announced and launched two new app in 2011 and with Samsung, the world’s investments Bango has made in store partnerships, with Amazon and largest smartphone vendor, the most technology and partnerships starting to Samsung, during the final few months of recent to embrace the technology. These bear fruit in its financial outlook. 2014. With additional potential volumes stores have all chosen to integrate with of end user spend coming from these in the Bango Payment Platform. David Sear addition to the existing relationships with Key partnerships with many of the giants Chairman Google, Microsoft, BlackBerry and of mobile are in place. End user spend is Mozilla, and with the Bango Payment starting to rise rapidly and the platform is Bango PLC Annual Report 2014 CEO’s statement 04 CEO’s statement Bango has now emerged as the de facto standard for carrier billing in app stores 2014 was a year of strong progress for called “acting as principal”. Secondly manufacturer, announced a global carrier Bango. App stores continue to fuel the where the app store receives the payment billing partnership with Bango, with plans rapid growth in digital content sales, with enabled by Bango technology directly to roll out immediately across a wide the Bango Payment Platform enabling from the user, and pays a fee to Bango – range of MNOs. These relationships will app store purchases to be charged to a this is called the “agency model”. drive additional growth in 2015. user's phone bill. Bango has now emerged as the de facto standard for The Bango Payment Platform enables Almost 100 MNOs have now integrated carrier billing in app stores, uniting the app stores to increase their sales by with the Bango Payment Platform and are industry behind a common platform that making payment easier and faster. Bango using it to provide their billing services to drives up revenues, while providing the data shows that if consumers are only one or more app stores. During FY2014, best consumer purchasing experience. presented with a credit/debit card Bango was pleased to secure a number of payment option, conversion rates can be mobile operator group deals - including All major app stores that have chosen to as low as 0.5% in developing markets, with Etisalat and Deutsche - which deploy Direct Carrier Billing (DCB) have and rarely exceed 40% even in markets expand the pipeline of future activations chosen to partner with Bango, and Bango where card penetration is high. Data from faster than one-by-one agreements, and is now the natural partner for Mobile the first 8 months of 2014 showed an speed up the activation of app stores Network Operators (MNOs) seeking to average conversion rate for carrier billing across multinational mobile operators. harness revenue from the digital content for five app stores using the Bango sales passing over their networks. Payment Platform of 82% (excluding Google transactions limited by monthly spend As expected, the majority of end user The Bango model and opportunity caps for specific users). This powerful spend growth in FY2014 came from the Bango's objective is to enable one-click advantage was one of the key factors initial ramp up of Google Play mobile payment at massive scale, motivating new app store and MNO sign transactions which are expected to maximizing conversion rates and driving ups during FY2014. continue and accelerate into 2015. revenues for app stores, mobile operators Google Play is the content store available and content developers. Bango's proven Continued momentum with app on Android, which powers the most platform acts as a single point of stores and ongoing activations with smartphones worldwide. Many early integration for app stores and MNOs Mobile Network Operators