Verve Group Se Class A · OMXSTO:VER
Verve Group Se Class A — MGI - Media and Games Invest — Q3 2023 Earnings Presentation
36 slides from Verve Group Se Class A's earnings presentation, 2023
Slide 1: MGI - Media and Games Invest SE Interim Report Q3 2023
MGI - Media and Games Invest SE Interim Report Q3 2023
Slide 2: Presenter and Ownership Structure
Presenter and Ownership Structure Shareholdings (159,249,358 shares)1 Shares listed on Nasdaq First North Premier 28% Stockholm and Frankfurt Stock Exchange Remco Westermann Remco Westermann holds his MGI shares via the German holding company Bodhivas GmbH. Bodhivas GmbH is based in Düsseldorf where
Slide 3: Focus on Highly Scalable and Profitable Business Model
Focus on Highly Scalable and Profitable Business Model Adj. EBITDA Revenue In € millions 18% 41% Organic Growth REVENUE CAGR 38% Organic Growth 316 55% 3031 EBITDA CAGR 252 140 84 93 95 45 71 18 29 13 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 2023 LTM Notes: (1) normalized by €21m for FX effec
Slide 4: Our Business Model: Combining Digital Advertising and O&O Games
Our Business Model: Combining Digital Advertising and O&O Games We automate the buying and selling of ads on all digital devices enriched with data ADVERTISER / BRANDS PUBLISHER / END CONSUMER DooH $ 0,9 “Matching fully automated the right brands to the right audience in „BBC“ $ 1,0 milliseconds” „S
Slide 5: Q3 Highlights
Advertising budgets & CPM’s still depressed • CPM’s down by 20-30%, Net $ expansion rate still low Q3 Highlights with 93% • But there is light at the horizon Further increasing market share • Increased customer base and ad-volumes • Extending market-share in U.S. and EMEA Market Share • 1% organic g
Slide 6: Business Update
Invest G Media and Games & BUSINESS UPDATE
Slide 7: Advertising Budgets & CPM’s Still Depressed due to Macro Economic Pressure
Advertising Budgets & CPM’s Still Depressed due to Macro Economic Pressure Cyclicality of the Advertising Market Less Ad-Demand Leads to Lower Prices in Line with Macro economy CPMs decreased by 33% YoY Q3 20231 40,0% 30,0% 20,0% 10,0% Advertising is a Growth Market Programmatic Outperforms the Ad-M
Slide 8: MGI Further Gaining Market Share
MGI Further Gaining Market Share Declined budgets and stable client Continued increase of ad impressions served Leading to increase in market share retention as well as in software clients e.g. Mobile In-App1 Net $ Expansion Rate3 Total Software Clients 80% 9% 70% 104% 93% 2,068 60% 50% Q3 2022 Q3 2
Slide 9: Efficiency Improvements and Cost Control
Efficiency Improvements and Cost Control Annual EUR 10 million cost saving program, Enabled by the achieved technical optimizations Planning further efficiency gains and cost reductions based on initiatives such as platform optimizations Increase of adj. EBITDA margin driven by efficiency gains Furt
Slide 10: Let’s Make Media Better
Global Player in Programmatic Advertising with Strong USPs Multichannel Transparent Ad-Software platform Leading Strong & fast mobile in- growth in Our Mission: app SSP CTV Let’s Make Advanced data and Vertically Media Better integrated targeting A strong base to build from 10
Slide 11: Taking Further Market Share and Building a Market Leader
Taking Further Market Share and Building a Market Leader North America1 EMEA1 ✓ Further publishers onboarded, a.o. Apple Google Play Google Play Trippledot Studios, Popcore, Tribune Apple Publishing, AdAlliance, Verve Group 28% Verve Group 11% TaurusX 13% TaurusX 39% VerticalScope, Zealium Media Goo
Slide 12: Further Strengthening our CTV position
Further Strengthening Q3 Achievements our CTV position ✓ Further publishers onboarded, e.g. Friendly.TV, Hearst Television, Rakuten TV, Vizio and TCL ✓ Further demand partners onboarded, a.o. Magnite ✓ Added capabilities with Open RTB2.6 to allow all ad pod REACHING 60% OF US types (dynamic, hybrid,
Slide 13: Our Data is a Key Success Factor for Addressability
Our Data is a Key Success Factor for Addressability We bring together first- and third-party data sources for unmatched data at scale VERVE AD EXCHANGE DATA Cross-screen Activation Among Top 5 Mobile Ad Exchanges Globally Layers gaming data and behavior 20,000+ APPS across Mobile x CTV, at scale, po
Slide 14: Offering an Integrated Multichannel Platform
Offering an Integrated Multichannel Platform Our integrated multichannel ad platform was established based on M&A and organic additions 1 Q3 ACHIEVEMENTS HIGH AN EVEN PROPORTION OF PROPORTION OF SUB-PREMIUM PREMIUM AND SUPPLY SUB-PREMIUM ✓ Adding demand partners SUPPLY ✓ Further integrating tech sta
Slide 15: Leveraging our Owned and Operated Games Portfolio
Leveraging our Owned and Operated Games Portfolio Scale of our gaming Data PARTNERING WITH EPIC GAMES +10 Premium WIZARD101 MAJOR UPDATE - Windows Mac games THE CRYING SKY RAID +1bn NEW SERVER LAUNCH FIESTA ONLINE Playstation Xbox Registered FURTHER INTEGRATION OF GAMING gamers DATA INTO AD SOFTWARE
Slide 16: MGI’s Focus for Further Growth
MGI’S FOCUS FOR FURTHER GROWTH Machine Learning Contextual Targeting Demand Partnerships
Slide 17: Machine Learning is a Strong Driver of Our Business
Machine Learning is a Strong Driver of Our Business AI significantly improves analytical and targeting efficiency Machine Learning ● Leverage big data ● Automate processes ● Analyze patterns ● Make predictions ● Enable personalization for highest engagement Big Data on MGI‘s Platform ● 450 Bn bid re
Slide 18: Machine Learning is Important in Many Aspects
Machine Learning is Important in Many Aspects We use AI in a variety of fields Creating Personalized Experiences Building products based on AI • Tailored Advertising Campaigns • Moments.AI Contextual targeting • Enhanced Engagement & Conversions • Utilizing Consumer Behavior Data • Visual Intent Con
Slide 19: Deprecation of Identifiers: Shift Towards Contextual Targeting
Deprecation of Identifiers: Shift Towards Contextual Targeting One of the largest disruptions of Ad-Tech Opt-Out Identifiers widely available ADDRESSABILITY PREVIOUSLY 100 % Reach COOKIE DEPRECATION IDFA DEPRECATION PRIVACY REGULATIONS CHANGING USER PREFERENCES ADDRESSABILITY TODAY < 30 % Reach Audi
Slide 20: MGI’s Contextual Targeting Solution: Moments.AI
MGI’s Contextual Targeting Solution: Moments.AI 1 2 3 4 Standard Custom Visual Intent Segments Brand Safety Segments Segments by Getty Images Categories +700 off the shelf segments Bespoke segments Exclusive segments built with Getty Supporting Industry standard created for brands Images GARM Moment
Slide 21: Contextual Targeting with Moments.AI
Contextual Targeting with Moments.AI Moments.AI to enrich bid-request contextual signals for user targeting Optimize Campaigns Towards These Attention Metrics ➢ Confidence How strongly does the context index towards the segment definition? ➢ Brand Safety Is the content in line with the GARM Brand Sa
Slide 22: Case Study
Case Study X Moments.AI™ Establish that we can deliver new Methodology subscriptions in Norway with Contextual Traditional Approach Targeting - Third-Party Cookies - Audiences - Retargeting Results Moments AI™ Contextual Optimisation. 8.32X With No Cookies, IDs & PII. Return on advertising spend Zer
Slide 23: Contextual Targeting with ATOM
Contextual Targeting with ATOM Anonymous targeting on mobile, a future-proof and market-leading solution Product Roadmap Device Signals Device model, storage size, Enriched signals, Better keyboard language, time zone, targeting, Higher ROI day parts, sensors etc. NO IDFA 0000-0000-00 App Context Si
Slide 24: Demand Partnerships to Increase the Demand Side
Demand Partnerships to Increase the Demand Side Building relations with agencies & brands The top 5 worldwide MGI has a strong position on the Supply side advertising agencies… ✓ Reaching over 2bn devices ✓ Leading in Direct Supply (no middleman) Agencies ✓ Privacy & quality First ✓ Strong in Data a
Slide 25: Financials
G Media and Games Invest G FINANCIALS
Slide 26: Strong Commercial Development Builds Base For Organic Growth
Strong Commercial Development Builds Base For Organic Ggrowth KPIs driving our long-term top-line growth Ad impressions delivered (in bn) Ad Impressions Customer Revenue Expansion and Retention2 8% YoY Growth 181 181 186 173 172 166 156 161 135 59 93% 96% 37 44 15 17 22 Net $ Expansion >100k Clients
Slide 27: Positive Organic Growth During Third Quarter
Positive Organic Growth During Third Quarter Highly Profitable and Cash Generating Q3 2023 Unadjusted for divestments and -11% 1% FX in the amount of 10.2mEUR Revenue Growth FX-adjusted Organic Revenue Growth Strong Margin % Net Revenues Adj. EBITDA Adj. EBIT 29% 24% Adj. EBITDA margin Adj. EBIT mar
Slide 28: Consistent Long-Term Financial Development
Consistent Long-Term Financial Development Highly scalable and profitable business model with strong organic growth EURm1,2 CAGR 51%3 4 316 303 (adjusted EBITDA) 252 30% 29% 30% 140 28% 25% 22% 21% 20% 93 95 18% 84 77 78 71 55 10% 39 42 45 22 29 15 11 13 18 18 4 7 2 7 10 2 2014A 2015A 2016A 2017A 20
Slide 29: Revenue Growth with Further EBITDA Increases Expected For Q4
Revenue Growth with Further EBITDA Increases Expected For Q4 Seasonality will further support revenue and EBITDA growth in Q4 2023 Further revenue Commentary growth expected for Q4 with increasing growth rates Net Revenues Adj. EBITDA - Revenues tend to build up during the year (Q1 < Q2 < Q3 < Q4) -
Slide 30: Operating Cash Flow and Capex Development
Operating Cash Flow and Capex Development Strong cash flow from operations, continuous investments in organic growth Operating cash flow development1,2,3 Capex development3 (EURm) 134 (EURm) 296 Operating Cash Flow Maintenance Capex Free Cash Flow after Interest Expenses 23 107 Expansion Capex Cash
Slide 31: Net Leverage & Interest Coverage Ratio
Net Leverage & Interest Coverage Ratio Focus on further deleveraging in the coming quarters Net debt to adj. EBITDA ratio development1 Interest Coverage ratio development1 Free Cashflow in Q4 is (EURm) (EURm) expected to reduce Net leverage to <3,0x 307 305 95 Net leverage Interest Coverage Ratio 27
Slide 32: The MGI Balance Sheet
The MGI Balance Sheet Strong balance sheet with high cash position to navigate the cycle Development of Balance Sheet - Total Liabilities and Equity (EURm) 1.003 1.006 Total Equity 319 370 Total Equity Well diversified bond maturities with +90% maturing in 2026/27 Long-term 497 Long-term liabilities
Slide 33: Reiterated Guidance
REITERATED GUIDANCE Stable year-over-year performance for 2023 Normalized 2022 Initial Guidance Reiterated We expect stable YoY Actuals 2022 (*for divestments & FX) 2023 Guidance 2023 revenues in 2023 vs 2022 normalized for fx and divestments Revenue At normalized* 324 303* 335-345 (in €m) 2022 leve
Slide 34: Mid-Term Financial Targets
Mid-Term Financial Targets Mid-term financial targets focus on further substantial growth while keeping leverage under control 2023 anticipated to be softer due to macro environment factors; strong mid-term outlook Revenue CAGR Adj. EBITDA margin Adj. EBIT margin Pro-Forma Leverage1 25-30% 25-30% 15
Slide 35: Outlook & Closing Remarks
OUTLOOK & CLOSING REMARKS IN-APP ➢ Leading U.S. & EU positions built within four years ➢ Focus on further increasing market share ➢ Next key focus area; building on in-app and data strengths CTV ➢ Investing in features and sales ➢ Leading mix; contextual + 1st party + behavioral DATA & AI ➢ Well pre
Slide 36: Thank You.
Thank You. www.mgi-se.com 36
MGI - Media and Games Invest — Q3 2023 Earnings Presentation on 6ix