Verve Group Se Class A · OMXSTO:VER
Verve Group Se Class A — Media and Games Invest — Pareto Gaming Seminar 2021
29 slides from Verve Group Se Class A's conference presentation, 2021
Slide 1: Pareto Gaming Seminar 2021
Media and Games Invest G Pareto Gaming Seminar 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: Agenda
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 Shareholdings (149,679,980 shares1)2 29% Remco Westermann Remco Westermann holds his MGI shares via the German holding company Paul Echt Bodhivas GmbH3. Bodhivas GmbH is base
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 region Revenues by segment (Q1’21) (Q1’21) +30 M&A Transaction since 2012 EUR ~600m Market cap 61% 28% 47% 53% Listed on Frankfurt Stock
Slide 8: 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 9: Outperforming markets by combining Media and Games
Outperforming markets by combining “Media and Games“ Combining “Media and Games” results in 3.2x higher organic growth than the overall market MGI‘s addressable markets ($ billion) The sum is greater than its parts (Q1 2021) CAGR: 12% 702 498 485 38% organic markets combined growth MGI‘s target 323
Slide 10: 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 11: MGI's two segments
MGI’s two segments 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 ste
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 of EUR +150m in revenues
Strong M&A pipeline of EUR +150m in revenues Several attractive targets in the pipeline, with some signings expected soon Bond proceeds will partly finance future acquisitions Shift from EBITDA negative to more EBITDA positive cases Buy <6x EBITDA <24 months Pay-back for EBITDA for EBITDA positive n
Slide 17: Acquisition pipeline: target with EUR ~60-80m revenue potential
Acquisition pipeline: target with EUR ~60-80m revenue potential Target key facts Acquisition rationale PC and mobile games ✓ Strong IPs with ample growth potential ✓ Adding critical mass; player base, know-how and IPs MMO and casual games ✓ Substantial synergies with existing gamigo portfolio +10 ga
Slide 18: Acquisition pipeline: target with EUR ~30-40m revenue potential
Acquisition pipeline: target with EUR ~30-40m revenue potential Target key facts Acquisition rationale Digital Advertising Platform to monetize ✓ Strong SaaS-IP with ample growth potential websites and apps via ad-placements ✓ Adding critical mass; additional demand and supply Cloud-based self serve
Slide 19: IV. Financial performance
I. Introduction II. Business overview III. Strategy IV. Financial performance
Slide 20: Summary of annual financial performance
Summary of annual financial performance Profitable business model with an increasing share of organic growth Long-term financial development (EURm)1,2,3 38% organic growh 166 140 25-30% EBITDA 84 Margin target FY2021 30% 25% 45 39 42 22% 21% 22% 20% 37 18% 29 22 18 15 10% 13 7 11 2 4 2014A 2015A 201
Slide 21: First quarter group revenue and EBITDA development
First quarter group revenue and EBITDA development Growing 8x faster than the media and games market in 2020-2023E1 Revenue Adj. EBITDA (EURm) (EURm) +96% Q1 YoY +127% Q1 YoY 180 40 166 37 160 35 140 140 29 30 120 120 112 25 25 22 97 100 20 20 80 26% 15 14 60 49 52 22% 22% 10 35 10 21% 40 27 30 6 7
Slide 22: 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 23: Business model ensures diversified revenue sources
Business model ensures diversified revenue sources Limited dependency on single game titles and media solutions Overview of key revenue splits1 3% 4% 12% 13% 47% 17% 67% 14% 6% 17% gamigo MMO KingsIsle MMO Advertisement Supply Side Platform Demand Side Platform Performance Platform Influencer Platfo
Slide 24: Operating cash flow and capex development
Operating cash flow and capex development Operating cash flow development1,2,3 Capex development (EURm) (EURm) 30 95 25 25 21 16 89 38 12 7 33 14 13 6 4 4 7 7 3 13 2 2 1 9 1 1 5 6 0,3 1 4 2014A 2015A 2016A 2017A 2018A 2019A 2020A LTM 2014A 2015A 2016A 2017A 2018A 2019A 2020A LTM Q1'21 Q1'21 Operatin
Slide 25: 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 97.6 KingsIsle EBITDA included 61.6 App. EUR 90m 34.9 capital 7.0x incr
Slide 26: 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% 0.2x 58% M&A1 Source: Group information Note 1) Q1’21 vs Q1’20 (YoY comparison) 26
Slide 27: 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 28: A clear roadmap to completion
A clear roadmap to completion Strong revenue CAGR of 25-30% combined with 25-30% EBITDA margin Low business risk focus MMO games and SaaS media revenues with steady sustainable cash streams Strong organic growth Content updates, DLCs, game launches, scaling existing and new B2B accounts Supported by
Slide 29: Media and Games Invest
G Media and Games invest