Verve Group Se Class A · OMXSTO:VER
Verve Group Se Class A — Media and Games Invest — Q1 2021 Earnings Presentation
26 slides from Verve Group Se Class A's earnings presentation, 2021
Slide 1: Earnings Call Q1 2021
Media and Games Invest Ni EARNINGS CALL Q1 2021
Slide 2: Disclaimer
Disclaimer THE INFORMATION CONTAINED IN THIS PRESENTATION IS STRICTLY CONFIDENTIAL. ACCORDINGLY, THE INFORMATION INCLUDED HEREIN MAY NOT BE REFERRED TO, QUOTED OR OTHERWISE DISCLOSED BY YOU, NEITHER DIRECTLY OR INDIRECTLY NOR WHOLLY OR PARTLY. BY REVIEWING THIS INFORMATION, YOU ARE ACKNOWLEDGING THE
Slide 3: I. Introduction
I. Introduction II. Business overview III. Strategy IV. Financial performance
Slide 4: Today's presenters and ownership structure
Today's presenters and ownership structure Shares listed on Frankfurt Stock Exchange and Nasdaq First North Premier Stockholm Remco Westermann Shareholdings (128,749,748 shares)2 CEO & Chairman of the Board since 2012 33% • Manager, entrepreneur and investors with more than 25 Remco Westermann years
Slide 5: II. Business overview
I. Introduction II. Business overview III. Strategy IV. Financial performance
Slide 6: Financial Highlights Q1 2021
Financial Highlights Q1 2021 The Group‘s quarterly performance Major acquisitions “Wizard101, The Harry Potter Of Online Games” Nexstar digitals connected TV Platform reaching over 200 million unique monthly users Source: Group information 6
Slide 7: Introduction to Media and Games Invest
Introduction to Media and Games Invest A leading European gaming and digital media powerhouse serving customers worldwide Key facts Key revenue splits Revenues by segment Revenues by region (Q1’21) (Q1’21) +30 M&A Transaction since 2012 EUR ~600m Market cap 61% 28% 47% 53% Listed on Frankfurt Stock
Slide 8: MGI's two divisions
MGI’s two divisions Q1 2021 financials at a glance Games: Development and publishing Media: User acquisition technology infrastructure EUR 27.4m 97% EUR 24.5m 94% Revenue YoY growth Revenue YoY growth EUR 10.9m 40% EUR 2.6m 11% Adj. EBITDA Adj. EBITDA margin Adj. EBITDA Adj. EBITDA margin Revenue st
Slide 9: Outperforming markets by combining Media and Games
Outperforming markets by combining „Media and Games“ 3.2x higher organic growth than the markets MGI‘s addressable markets ($ billion) The sum is greater than its parts (Q1 2021) CAGR: 12% 702 498 485 markets combined 38% organic MGI‘s target 323 growth 217 175 2020 2023 Digital Games Digital Media
Slide 10: High cost advantages through synergies
High cost advantages through synergies Reduced user acquisition cost combined with higher ad-income Games and media combined: optimising the value chain Games standalone Games and media combined User acquisition CPI1: EUR 0.15 User acquisition CPI: EUR 0.10 Playing user Playing user Ad-income CPM2:
Slide 11: Highlights Q1 2021
Highlights Q1 2021 Initiatives in MGI’s both segments facilitated strong revenue growth in the first quarter of 2021 Games Media • MGI acquired Nexstar Inc.’s digital video • With the acquisition of KingsIsle, we have advertising technology platform via a US ACQUISITION OF added two strong games to
Slide 12: III. Strategy
I. Introduction II. Business overview III. Strategy IV. Financial performance
Slide 13: Robust model enabling long-term value creation
Robust model enabling long-term value creation ”Buy, integrate, build & improve” strategy consequently implemented since 8 years Overview of MGI’s strategy Buy Integrate Build and improve Market consolidation through Integration and synergy Ramp-up of organic sales prudent M&A strategy realisation g
Slide 14: Built on a prudent and tested M&A strategy
Built on a prudent and tested M&A strategy 1 MGI has a strong M&A track record… >30 <24 months <6x EBITDA EUR 5-40m for EBITDA negative cases for EBITDA positive cases Number of acquisitions since Typical pay-back time Purchase price of acquisitions1 Typical size of targets2 2013 2 …which facilitate
Slide 15: Acquisition of KingsIsle above plan in Q1 2021
Acquisition of KingsIsle above plan in Q1 2021 Contributes with 17% to MGI’s group revenues in the first quarter 2021 Revenues by Regions Revenues by Type 10% 11% 31% 57% 90% “Wizard101, The Harry Potter Of Online Games” In-game revenues United States Rest of World Subscription revenues Other A mult
Slide 16: Strong M&A pipeline with EUR +150m revenues
Strong M&A pipeline with EUR +150m revenues Several good targets in the pipeline, with some signings expected soon Shift from EBITDA negative to more EBITDA positive cases Buy <6x EBITDA <24 months Pay-back for EBITDA for EBITDA positive negative cases cases (incl. synergies) Market consolidation th
Slide 17: IV. Financial performance
I. Introduction II. Business overview III. Strategy IV. Financial performance
Slide 18: First quarter financial highlights
First quarter financial highlights Revenues increased by 96% and adjusted EBIT by 173% Net revenues amounted to 51.9 mEUR (Q1’20: 26.5 mEUR), which is an increase of 96%. Adjusted EBITDA amounted to 13.5 mEUR (Q1’20: 5.9 mEUR), which is an increase of 127%. Adjusted EBIT amounted to 9.3 mEUR (Q1’20:
Slide 19: Summary of financial performance
Summary of financial performance Profitable business model with an increasing share of organic growth Long-term financial development (EURm)1,2,3 CAGR 47%4 38% organic 166 growh 29.6% 140 25.0% 21.6% 22.2% 20.8% 19.9% 17.7% 84 9.9% 42 45 39 37 29 22 18 15 13 7 11 2 4 2014A 2015A 2016A 2017A 2018A 20
Slide 20: First quarter revenue and EBITDA development
First quarter revenue and EBITDA development Growing 8x faster than the media and games market in 2020-2023E1 Revenue Adj. EBITDA (EURm) (EURm) 180 +96% Q1 YoY 40 +127% Q1 YoY 166 37 160 35 140 30 120 25 97 100 20 20 26% 80 15 14 60 52 22% 10 40 27 6 20 5 0 0 Q1 2020 Q1 2021 Q1 2020 Q1 2021 Quarterl
Slide 21: First quarter segment performance
First quarter segment performance Strong organic growth of both segments combined with M&A Games Segment Media Segment (EURm) (EURm) 32 30 +97% +94% 27 25 27 25 22 20 17 15 40% 13 14 12 11 10 36% 11% 7 5 7% 5 3 1 2 0 Q1'20 Q1'21 Q1'20 Q1'21 Revenues Adj. EBITDA % margin Revenues Adj. EBITDA % margin
Slide 22: Operating cash flow and capex development
Operating cash flow and capex development Operating cash flow development1,2,3 Capex development (EURm) (EURm) 30.3 94,6 25.2 24.6 20.6 16.2 88.9 37.7 12.2 6.9 33.1 14.1 13.1 5.5 4.4 3.8 6.6 6.9 3.0 12.7 2.1 2.0 1.2 9.1 1.4 1.4 4.6 5.7 0.3 0.6 4.0 2014A 2015A 2016A 2017A 2018A 2019A 2020A LTM 2014A
Slide 23: Long-term net leverage development
Long-term net leverage development KingsIsle EBITDA contribution will lead to strong deleverage in the coming quarters Net leverage to adj. EBITDA ratio development1 (EURm) Net Interest Bearing Debt Net leverage Only one quarter KingsIsle EBITDA included 97.6 61.6 34.9 7.0x 25.2 20.5 20.4 13.1 3.0x
Slide 24: Prudent mid-term financial targets
Prudent mid-term financial targets Financial Targets well outperformed in Q1 2021 Revenue CAGR Adj. EBITDA margin Adj. EBIT margin Net leverage 25-30% 25-30% 15-20% 2-3x +96%1 38% Organic1 26% 18% 2.7x 58% M&A1 Source: Group information Note 1) Q1’21 vs Q1’20 (YoY comparison) 24
Slide 25: Outlook 2021: Strongest organic growth pipeline in history
Outlook 2021: Strongest organic growth pipeline in history New games and ad-tech launches set to further increase growth and profitability Overview of the current announced organic pipeline • The new free-to-play mobile • Worldwide development • Successful game currently title is headed to Android G
Slide 26: Media and Games Invest
G Media and Games invest
Media and Games Invest — Q1 2021 Earnings Presentation on 6ix