Verve Group Se Class A · OMXSTO:VER
Verve Group Se Class A — Media and Games Invest — Investor Day (August 2021)
101 slides from Verve Group Se Class A's investor day presentation, August 2021
Slide 1: Capital Markets Day August 2021
CAPITAL MARKETS DAY August 2021
Slide 2: Welcome to MGI's Capital Markets Day
WELCOME TO MGI‘S CAPITAL MARKETS DAY Agenda: 10.30 – Media and Games Invest Business Update 10.50 – Deep Dive Games Segment 11.25 – Coffee Break 11.40 – Deep Dive Media Segment 12.15 – Break 13.15 – Financials 13.35 – Outlook 13.50 – Q&A 2
Slide 3: 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 4: Agenda sections
I. Introduction II. Business overview III. Games Segment IV. Media Segment V. Financials VI. Outlook
Slide 5: Aim of our Capital Markets Day
Welcome to MGI’s Capital Markets Day Aim of our Capital Markets Day Give an update of our latest developments in the segments Share deeper insights into our strategy and actions Provide an overview of financials; actuals and outlook Get to know the team of MGI 5
Slide 6: Media and Games Invest at a Glance
Media and Games Invest at a Glance Start 2012 with the acquisition of gamigo AG, a distressed gaming company Gaming: focus on sustainable revenue streams (MMO‘s & casual games) Sectors Media: focus on a vertically integrated omnichannel programmatic platform Step 1 Building critical mass; acquiring
Slide 7: Board of Directors
Board of Directors Remco Westermann Elizabeth Para CEO & Chairman of the Board of MGI Board Member (Independent1) Manager, entrepreneur and investor with + 25 years of experience • Co-Founder & Managing Partner of First Place Partners Ltd. from various leadership positions • M.A. Economics at Univer
Slide 8: Executive Management
Executive Management Remco Westermann Paul Echt Jens Knauber Jens Christian Fritz Group CEO Group CFO Group COO Group CIO MGI Level Maren Fischer Sabrina Gründemann Esther Hilsen Sören Barz Director Legal Head of Business Support Head of ESG / IR Manager Head of Investor Relations Top Management Top
Slide 9: Strong ownership structure
Strong ownership structure Good access to equity capital markets Shareholder Holdings (%) Shareholder Holdings (%) Board and 28.6%1 Finlandia 0.7% Management (32.3%)2 Rahastoyhtiö Oy Board and Management Didner & Gerge Oaktree Capital 0.6% 9.1% Funds Board and management with significant Management
Slide 10: MGI Fact sheet
MGI Fact sheet Registered Office Ordinary A-shares Ordinary B-shares Market segment Media and Games Invest SE • Authorized: 300,000,000 • Authorized: 200,000,000 • Frankfurt Stock Exchange St. Christopher Street 168 • Issued: 149,679,980 • Issued: 0 (Xetra), Scale Segment (Shares) Valletta VLT 1467,
Slide 11: Introducing today's presenters
Introducing today's presenters Our Speakers Today MGI Investor Relation Our IR Team is also here with us in Stockholm and happily awaits your questions Sören Barz Remco Jens Knauber Sameer Sondhi Head of Investor Relations Westermann COO of MGI & CEO of gamigo group CRO of Verve Group CEO & Chairman
Slide 12: Business overview
I. Introduction II. Business overview I. Business Update II. Strategy III. ESG III. Games Segment IV. Media Segment V. Financials VI. Outlook
Slide 13: Media and Games Invest in a Nutshell
Media and Games Invest in a Nutshell A leading European gaming and digital media powerhouse serving customers worldwide Key facts Key revenue splits Revenues by segment Revenues by region (Q2’21) (Q2’21) +35 M&A Transaction since 2012 3% 7% 3% EUR ~800m Market cap 24% 51% 49% 63% Listed on Frankfurt
Slide 14: An organic growth success story in games and media
An organic growth success story in games and media Q2’21 LTM Illustrative: Revenue development 36% 2020 organic MGI acquired majority of Growth gamigo; Remco Westermann Restructuring of gamigo AG; becomes Chairman of the Board lowering costs, ceasing risky of MGI; gamigo Bond issue € development act
Slide 15: Latest Milestones last twelve months
Latest Milestones last twelve months MGI announced strongest organic Tap Issue € 150m growth pipeline ever Nordic bond Q4’20 Interim Q1’21 Report with Illustrative: Share price development Report 38% organic growth Tap Issue € 40m Nordic Bond Acquisition of KingsIsle Q2’21 Report Entertainment Inc A
Slide 16: Business overview
I. Introduction II. Business overview I. Business Update II. Strategy III. ESG III. Games Segment IV. Media Segment V. Financials VI. Outlook
Slide 17: Our unique strategy delivers profitable, organic growth
Our unique strategy delivers profitable, organic growth The MGI Strategy builds on 2 pillars that culminate in profitable organic growth + 2 = 3 PROFITABLE 1 BUY. INTE- COMBINING ORGANIC GRATE. BUILD GAMES AND AND M&A & IMPROVE. MEDIA GROWTH Market consolidation through Higher traffic volumes pruden
Slide 18: Our strategy: 1 – Buy, Integrate, Build & Improve
1 2 3 Our strategy: 1 – Buy, Integrate, Build & Improve + 2 = 3 PROFITABLE 1 BUY. INTE- COMBINING ORGANIC GRATE. BUILD GAMES AND AND M&A & IMPROVE. MEDIA GROWTH Market consolidation through Higher traffic volumes prudent M&A strategy Leveraging the consolidation Integration and synergy and growth op
Slide 19: Buy, integrate, build & improve
1 2 3 “Buy, integrate, build & improve” Robust model enabling long-term value creation 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 growth Overall M&A strategy C
Slide 20: Successful integration of acquired entities
1 2 3 Successful integration of acquired entities Enhanced cost control and efficiency through the use of state-of-the-art technology Overview of integration process Data centres Cloud technology Outcome (EURk) • Scalable cost base 543 • Largely constituting variable 141 • High fixed costs costs Bef
Slide 21: …and strong ability to ramp up organic growth
1 2 3 …and strong ability to ramp up organic growth Developing and optimising games following successful integration Overview of “build and improve” process Phase 1: Rentability optimisation Phase 2: Asset optimisation Phase 3: Organic growth 24% organic growth Synergies Balance Relaunches Unlocking
Slide 22: M&A Overview (Games)
1 2 3 M&A Overview (Games) Platform PC Console Mobile Core Mid Core Type of Casual Engagement Hyper Casual Virtual Reality Free 2 Play Monetization Buy 2 Play Strategy Advertisement-based n/a Subscription-based n/a Own IP Own IP vs. Licensed Licensed Legend: Already part of gamigo / MGI value propos
Slide 23: M&A Overview (Media)
1 2 3 M&A Overview (Media) Platform In-App Mobile Web / Web CTV / OTT DOOH Creative Managed Brand Managed Performance n/a DSP (Self Serve, Enterprise) Vertical DMP Integration Open Exchange / Network SSP + HB PMP Analytics, Measurement & Attribution Audiences OX 1st Party Data (own SKD) Atom (probab
Slide 24: M&A Pipeline - Top Targets
M&A Pipeline - Top 5 Targets 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 negative cases ca
Slide 25: Our strategy: 2 - Combining Games and Media
1 2 3 Our strategy: 2 - Combining Games and Media + 2 = 3 PROFITABLE 1 BUY. INTE- COMBINING ORGANIC GRATE. BUILD GAMES AND AND M&A & IMPROVE. MEDIA GROWTH Market consolidation through Higher traffic volumes prudent M&A strategy Leveraging the consolidation Integration and synergy and growth opportun
Slide 26: Media and Games vertical integration
1 2 3 Media and Games vertical integration Online media serves as a strong organic growth accelerator for games Source: Group information 26
Slide 27: Why we combine Media and Games: #1
1 2 3 Why we combine Media and Games in a nutshell: #1 Combined Media and Games is much more efficient than stand-alone gaming: clear cost / revenue advantage Games and media combined: optimising the value chain, simplified example of the cost and revenue synergies Gaming standalone Gaming and media
Slide 28: Why we combine Media and Games: #2 DMP
1 2 3 Why we combine Media and Games in a nutshell: #2 Combining Media and Games: huge efficiency increase by transparency and data Example: data optimization GDPR compliant and consent based Retarget customers across different businesses and industries DMP Encourage referrals and address book shari
Slide 29: Our strategy: 3 – Profitable Organic and M&A Growth
1 2 3 Our strategy: 3 – Profitable Organic and M&A Growth + 2 = 3 PROFITABLE PROFITABLE 1 BUY. INTE- COMBINING ORGANIC ORGANIC GRATE. BUILD GAMES AND and M&A AND & IMPROVE. MEDIA GROWTH GROWTH Market consolidation through Higher traffic volumes prudent M&A strategy Leveraging the consolidation Integ
Slide 30: Complementary segments; own growth + synergies
1 2 3 Complementary segments; own growth + synergies Integrated into M&A growth Organic growth Synergies single unit/brand Current games: small Adding critical mass and game updates, DLC‘s, players: more sustainable porting, internatio- ✓ Cheaper media Games games PC + Console + nalization, player ✓
Slide 31: Profitable organic growth and addressable market
1 2 3 Profitable organic growth Combining “Media and Games” results in 3.0x higher organic growth than the overall market Illustration of value chain extension MGI‘s addressable markets (USDbn) The sum is greater than its parts CAGR: 12% 702 90% growth of which 498 36% Organic growth1 483 addressabl
Slide 32: Business overview
I. Introduction II. Business overview I. Business Update II. Strategy III. ESG III. Games Segment IV. Media Segment V. Financials VI. Outlook
Slide 33: ESG Policy of the Group
ESG Policy of the Group MGI’s environmental, social and governance initiatives are well in line with established UN goals Summary of the Group’s ESG commitment Adherence to relevant UN sustainability goals • Energy efficiency - migration of platforms to the cloud away from energy intensive tradition
Slide 34: MGI aims to provide a safe environment for all its users
MGI aims to provide a safe environment for all its users Particular focus on youth and child protection Preventive measures Control and sanctions Improvement targets • Community behavior rules • Trained community management • Age-appropriate advertising filters • Code of conduct for each game team •
Slide 35: Sustainability
Sustainability MGI has put great emphasize on sustainability initiatives and will continue to do so in the future Achievements 2020 Source: Group information 35
Slide 36: Our long-term Sustainability Goals
Our long-term Sustainability Goals First sustainability report published in June 2021 Continuously pursuing and improving our efforts Environmental Social Governance Inclusive and inspiring products Data Protection and security Carbon neutral by 2022 Green energy and cloud solutions Measures for a s
Slide 37: MGI Sustainability Grid
MGI Sustainability Grid Concrete actions are in place and planned, further actions are developed by Sustainability Working Group Working for a Greener Providing Data Protection A Great Team & an Diversity & Fair Play in our Corporate Governance Future & Security Inspiring Workplace Products & Servic
Slide 38: Games Segment
I. Introduction II. Business overview III. Games Segment I. Segment Overview II. Organic Growth III. M&A IV. Q&A IV. Media Segment V. Financials VI. Outlook
Slide 39: Gamigo Group at a glance
Gamigo Group at a glance A leading MMO powerhouse Key facts Key revenue splits Revenues by region (Q2’21) Revenues by type (Q2’21) Started in 2012 2% 5% 9% 3% 3% 28% HQ Hamburg 66% 83% +25 M&A Transaction since 2012 EU SA Rest Browser Mobile NA Asia Client Console ~500 Employees2 Major acquisitions
Slide 40: Monetization
Monetization Monetization at a glance in the Games segment Monetization strategy Advertisement- Subscription- Free 2 Play Buy 2 Play based based • Mostly free2play only MMOs • Upfront payment for game • Especially relevant in casual • Monthly subscriptions • Offering virtual goods • Possibility to c
Slide 41: gamigo is attractively positioned in the games industry
gamigo is attractively positioned in the games industry Hybrid positioning combining attractive characteristics for publishers and developers Gaming players are typically divided into publishers or developers Key criteria Publishers Developers Commentary Own property ✓ ✓ gamigo serves as publisher
Slide 42: Extensive catalogue of games
Extensive catalogue of games +10 Top MMOs +5,000 Casual Games Own IP Games 80% of total Games revenue stemming from own IP 1 Source: Group information Notes: 1) based on 2021 YTD numbers 42
Slide 43: Wizard101: The Harry Potter Of Online Games
Wizard101: The Harry Potter Of Online Games A dedicated customer base with multi-year relationships Massively Multiplayer Game Recurring revenues1 Substantial revenues 55% USD +430m revenues 21% 14% 10% +55m gamers 1 Year 1-3 Years 3-5 Years > 5 Years • A family-friendly MMORPG, first • 55% of reven
Slide 44: Revenues are typically recurring over +5 years
Revenues are typically recurring over +5 years Loyal customer base ensures a high degree of recurring revenues and visibility Revenue split by user tenure for selected games Desert Operations Global Last Chaos Europe Wizard101 85% 63% 55% 21% 22% 14% 10% 8% 8% 5% 7% 3% 1 Year 1-3 Years 3-5 Years > 5
Slide 45: Games Segment
I. Introduction II. Business overview III. Games Segment I. Segment Overview II. Organic Growth III. M&A IV. Q&A IV. Media Segment V. Financials VI. Outlook
Slide 46: Games growth strategy
Games growth strategy MGI follows a low risk portfolio approach Acquiring games/ IPs (81% 1)) • Game IP’s acquired from 3rd party developers Organic growth Rev Share • initiatives Game IP’s acquired 80%1 through M&A • New Content Updates • Community Management Licensing games (19%1)) • Localisation
Slide 47: Organic growth highlights
Organic growth highlights Games growth projects in the past twelve months H2 2020 H1 2021 ARCHEAGE UNCHAINED NEW MOBILE TURN-BASED TROVE LAUNCHES “DELVES” LAUNCHES GARDEN OF GODS MAJOR SPRING UPDATE FOR STRATEGY GAME HEROES OF ON CONSOLES EXPANSION: THE IPNYSH WIZARD 101 TWILIGHT SANCTUARY MASSIVE 3
Slide 48: Outlook 2021: Strongest organic growth pipeline in history
Outlook 2021: Strongest organic growth pipeline in history New games launches set to further increase growth and profitability Overview of the current announced organic pipeline • The new free-to-play mobile • Worldwide development title is headed to Android GOLF rights of the triple A mobile • Glob
Slide 49: Synergies with Media segment (1/2)
Synergies with Media segment (1/2) Gamigo casual games platform powered by Verve campaign management Demand side Publishers Advertiser Data Supply side platform platform (Consumers) Advertisers Publishers Revenue streams Campaign Setup through__________ platform In-Game ad placement 49
Slide 50: Synergies with Media segment (2/2)
Synergies with Media segment (2/2) Efficient user acquisition via Verve’s full stack solution Challenge: Gamigo Titles have been trying to acquire new users outside of the walled gardens Reaching new audiences across the Solution: Result: Open Web With the help of our end to end user 10-15% conversi
Slide 51: Games Segment: M&A
I. Introduction II. Business overview III. Games Segment I. Segment Overview II. Organic Growth III. M&A IV. Outlook IV. Media Segment V. Financials VI. Outlook
Slide 52: KingsIsle at a glance
KingsIsle at a glance Leading North American game developer and publishing platform with +55 million of registered gamers Key facts Integration update Leah Ruben Leah on the KingsIsle integration KingsIsle, based in Austin, Texas, is a leading game developer and publisher founded in 2005 Director Ga
Slide 53: KingsIsle acquisition well above plan
KingsIsle acquisition well above plan Currently trading at USD +35m revenues for 2021E Revenues by Regions Revenues by Type 9% 7% 33% 61% 91% “Wizard101, The Harry Potter Of Online Games ” United States In Game Revenues Rest of World Subscription Revenues Other KingsIsle initial guidance A multiple
Slide 54: Pirate101 shows strong organic growth
Pirate101 shows strong organic growth Revenue development Acquisition of KingsIsle through MGI Pirate101 performance well above plan in past year First Content Update after acquisition Jul 20 Okt 20 Jan 21 Apr 21 Jul 21 KingsIsle with large potential to grow the game and its player base in the near
Slide 55: Games offer significant organic growth opportunities
Games offer significant organic growth opportunities Organic growth, geographic expansion, licensing deals, platform extensions 1 • Expand the game in new territories Expansion through • Extend language versions Internationalization • Increase geographic penetration beyond US 2 Launch across new • E
Slide 56: KingsIsle ticks multiple boxes
KingsIsle ticks multiple boxes As a perfect fit, KingsIsle complements several open Positions Platform PC Console Mobile Core Mid Core Type of Casual Engagement Hyper Casual Virtual Reality Free 2 Play Monetization Buy 2 Play Strategy Advertisement-based n/a Subscription-based n/a Own IP Own IP vs.
Slide 57: Games Segment
I. Introduction II. Business overview I. Games Segment II. Segment Overview III. Organic Growth IV. M&A V. Q&A III. Media Segment IV. Financials V. Outlook
Slide 58: Q&A
Q&A Please send your questions to investors@mgi-se.com and we will answer them during the Q&A. 58
Slide 59: Coffee Break
COFFEE BREAK Agenda: 10.30 – Media and Games Invest Business Update 10.50 – Deep Dive Games Segment 11.25 – Coffee Break 11.40 – Deep Dive Media Segment 12.15 – Break 13.15 – Financials 13.35 – Outlook 13.50 – Q&A 59
Slide 60: Media Segment
I. Introduction II. Business overview III. Games Division IV. Media Segment I. Segment Overview II. Organic Growth III. M&A IV. Q&A V. Financials VI. Outlook
Slide 61: Verve Group at a glance
Verve Group at a glance Connecting advertisers and publishers to people in real time Key revenue splits +166bn 6% Started in 2016 7% 12% Impressions from SaaS HQ Berlin advertising in LTM Q2’21 76% +10 M&A Transaction since 2016 95% 21% Supply Side Platform Retention rate of > USD Increase in SaaS D
Slide 62: Full stack transparent advertising technology infrastructure
Full stack transparent advertising technology infrastructure Programmatic advertising platform encompassing the entire ad-tech value chain and driving user acquisition Media segment highlights MGI ad-tech value chain Demand side Publishers Advertiser Data Supply side platform platform (Consumers) Ad
Slide 63: Monetization
Monetization Monetization strategy SaaS – based revenues Non-SaaS - revenues Subscription- Rev Share Flat CPM Based 1000 Platform fees Platform revenue share Individual bookings 10% of revenue 75% of revenue 15% of revenue Value chain Demand side Supply side Publishers Advertiser Data platform platf
Slide 64: Verve Group at a glance
Verve Group at a glance Connecting advertisers and publishers to people in real time Experienced Industry Global Omnichannel Leadership Excellence Ad Platform Focus on technology, data, and High-quality, data-focused, first-in- Complete end-to-end demand-to- customer service class technology supply
Slide 65: Differentiators vs. competitors
Differentiators vs. competitors Topic Description Transparency/ Transparency in sourcing, pricing and operations, contrary to Open Standards “walled gardens” Open Source Being open to the ecosystem and active participants in Projects building open-source tech. DSP (Demand Side Allows advertisers to
Slide 66: Media Segment
I. Introduction II. Business overview III. Games Division IV. Media Segment I. Segment Overview II. Organic Growth III. M&A IV. Q&A V. Financials VI. Outlook
Slide 67: Verve Group's open platform
Verve Group’s open platform An Open Garden Omnichannel Marketing Ecosystem Centered Around User Privacy Managed DSPs & Demand campaigns Agencies Exchanges Advertiser Connections Demand Management Control Layer Layer Data Layer ● System controls ● Yield Optimization ● Reporting Publisher ● Analytics
Slide 68: Media Growth Engine - Flywheel
Media Growth Engine - Flywheel Organic growth through feedback loops, innovations and network effects from M&A ADVERTISERS ACCELERATORS FEEDBACK FEATURES Feature feedback loops ACCEL- ERATORS • Integration / Synergies PRODUCT • Cost optimization ROAS (results) High quality Data Innovations → Recurri
Slide 69: Technical Innovation: HyBid Cloud
Technical Innovation: HyBid Cloud SaaS Ad Monetization Toolkit for Service and Demand: Analytics: Publishers: ▪ Self Service and own AM ▪ Real-time analytics ▪ In-house monetization stack built on ▪ SaaS pricing ▪ Full bidstream reporting top of publisher’s own tech ▪ PMP packages ▪ User level AdLTV
Slide 70: The crumbling of identifiers
The crumbling of identifiers Adoption Rates over Time eCPM1 ~(-35%) Opt-In Rates over Time ≥IOs 14.5 vs. ≤IOs 14.4 Source: Based of the Performance of all iOS versions on our Verve Group exchanges between May 16 and June 29 Note: 1) eCPM = Effective cost per mille 70
Slide 71: Technical Innovation: Verve ATOM
Technical Innovation: Verve ATOM On device audiences ATOM = Anonymized Targeting on Mobile ▪ Proprietary solution to the targeting restrictions in Apple’s iOS 14.5 update Turn your To ▪ Building anonymized audiences on the user’s ▪ device Data used: x % 100 % unknown, known, ▪ Device data anonymized
Slide 72: Synergies with the Games segment
Synergies with the Games segment New possibilities of user acquisition / retargeting via CTV “Old world” – No Banner and Video Ads for Console Games “New world” – user acquisition via Connected TV retargeting Objective: Retarget lapsed Trove users Example: No efficient targeting in the Retar- Utilis
Slide 73: Media Segment: M&A
I. Introduction II. Business overview III. Games Segment IV. Media Segment I. Segment Overview II. Organic Growth III. M&A IV. Q&A V. Financials VI. Outlook
Slide 74: Smaato as a perfect strategic fit to MGI's M&A strategy
Smaato as a perfect strategic fit to MGI’s M&A strategy Leading monetization ad-platform for games and other publishers Investment Rationale Smaato Financials at a glance ▪ Highly accretive acquisition increasing MGI’s Group EBITDA by 29% EUR 39m EUR 13m ~20% ▪ Long term client relationships with ri
Slide 75: Future Growth Levers are available across 5 dimensions
Future Growth Levers are available across 5 dimensions With multiple Growth Drivers, Smaato is well-positioned in an Ecosystem rapidly shifting towards ROI 1 Get the controls to monetize their ad stack on one complete platform and free ad server Publishers 2 All major pubs are connected, now we grow
Slide 76: Increasing User Reach and building Critical Mass
Increasing User Reach and building Critical Mass Reach of individual Users can be increased by up to 30% adding significant to the Supply Side Value + Global User Reach: 1.4 bn Global User Reach: 1.3 bn Increase Reach Building Critical Mass Strong growth in Growing omni- Combined reach: Up to 30% in
Slide 77: The Sales Pipeline is full and strong
The Sales Pipeline is full and strong Smaato is in advanced discussions with a broadly diversified group of publishers Current Status Large Publishers Negotiating Qualifying Prospective Clients 77
Slide 78: Smaato ticks multiple boxes
Smaato ticks multiple boxes As a perfect fit, Smaato complements several open positions Platform In-App Mobile Web / Web CTV / OTT DOOH Creative Managed Brand Managed Performance n/a DSP (Self Serve, Enterprise) Vertical DMP Integration Open Exchange / Network SSP + HB PMP Analytics, Measurement & A
Slide 79: Media Segment
I. Introduction II. Business overview III. Games Segment IV. Media Segment I. Segment Overview II. Organic Growth III. M&A IV. Q&A V. Financials VI. Outlook
Slide 80: Q&A
Q&A Please send your questions to investors@mgi-se.com and we will answer them during the Q&A. 80
Slide 81: Lunch Break
LUNCH BREAK Agenda: 10.30 – Media and Games Invest Business Update 10.50 – Deep Dive Games Segment 11.25 – Coffee Break 11.40 – Deep Dive Media Segment 12.15 – Break 13.15 – Financials 13.35 – Outlook 13.50 – Q&A 81
Slide 82: Financials
I. Introduction II. Business overview III. Games Segment IV. Media Segment V. Financials VI. Outlook
Slide 83: Second quarter financial highlights
Second quarter financial highlights Revenues increased by 90% and adjusted EBITDA by 127% Q2 2021 overview Year on Year comparison Comments In EURm Q2 2021 Q2 2020 YoY Growth • 90% revenue growth, thereof 36% organic Net 57.1 30.0 90% Revenues • Adj. EBITDA margin improving YoY by 5 percentage point
Slide 84: 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 36% organic growth 244 CAGR 78%4 193 First 5% organic 140 Growth 30% 30% 25% 84 23% 22% 21% 20% 18% 68 42 45 45 39 10% 29 22 18 15 11 13 4 7 2 2014A 2015A
Slide 85: Second quarter revenue and EBITDA development
Second quarter revenue and EBITDA development Growing faster than the media and games market in 2020-2023E1 Revenue Adj. EBITDA (EURm) (EURm) +90% +127% 60 16 15 57 55 14 50 12 27% 45 10 22% 40 8 35 7 30 6 30 4 25 20 2 15 0 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Margin Adj. EBITDA Strong organic revenue Gr
Slide 86: Segment Performance
Segment Performance Strong organic growth combined with M&A in both segments Games segment Media segment (EURm) (EURm) +159% +49% 30 30 29 28 25 25 20 19 20 38% 15 15 29% 11 16% 11 10 10 11% 6 5 5 5 1 0 0 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Revenues Adj. EBITDA Margin Revenues Adj. EBITDA Margin High gr
Slide 87: 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 8% 14% 12% 51% 76% 7% 6% 28% MMOs Supply Side Platform Advertisement Demand Side Platform PC & Mobile Casual Games Performance Platform Media revenues Influ
Slide 88: Operating cash flow and capex development
Operating cash flow and capex development Operating cash flow development1,2,3 Capex development (EURm) Working Capital effect 41 (EURm) due to strong growth of Media segments 120 receivables 9 25 26 21 113 16 33 12 38 7 6 33 4 4 14 13 3 7 1 2 7 1 2 13 9 0 1 5 5 7 5 2014A 2015A 2016A 2017A 2018A 201
Slide 89: The MGI Balance Sheet
The MGI Balance Sheet Healthy Balance Sheet with dry powder for further acquisitions Balance Sheet as of June 30 2021 (EURm) 762.625 762.625 Equity attributable Intangible Assets 292,754 to shareholders of • Impairment tests done by Deloitte on a regular basis the parent company Intangible assets 43
Slide 90: Long-term net leverage development
Long-term net leverage development Conservatively levered credit with an illustrative post-bond net leverage of 1.9x Net leverage to adj. EBITDA ratio development1 (EURm) • Post-transaction, the senior secured Net Interest Bearing Debt Net leverage bond will constitute the majority of 7.0x 148.1 MGI
Slide 91: Comparable Companies Benchmarking
Comparable Companies Benchmarking The MGI valuation is highly attractive especially when compared to publicly trading peers Pure AdTech Pure Gaming Owned & Operated Discount Verve Standalone Business Model gamigo Business Model AdTech (vs. direct MGI Business Model peers): 33.3x 75% EV/Revenue Ø 12.
Slide 92: Outlook MGI Group 2021
Outlook MGI Group 2021 Double-down on EBITDA Updated Financial Guidance 2021 incl. Smaato Mid-Term Initial Guidance Updated Guidance FY 2020 Financial Targets 2021 incl. Smaato 20212 20211 Revenue 140 175 - 182 220 - 240 234 - 254 (in €m) Growth 67% 25-30% 57-71% 67-81% Adj. EBITDA 29 48 - 50 60 - 6
Slide 93: Prudent mid-term financial targets
Prudent mid-term financial targets Financial Targets well outperformed in Q2 2021 Revenue CAGR Adj. EBITDA margin Adj. EBIT margin Net leverage 25-30% 25-30% 15-20% 2-3x +90% 36% Organic 27% 19% 1.9x 54% M&A Source: Group information 93
Slide 94: Outlook
I. Introduction II. Business overview III. Games Segment IV. Media Segment V. Outlook
Slide 95: Outlook 2021 & 2022
Outlook 2021 & 2022 New games and ad-tech launches set to further increase growth and profitability Games Media 2021: Targeting 3 DLCs per game / year 2021: Close Smaato & connect / use synergy for core portfolio Further extend salesforce / sales Geo expansion of existing portfolio Roll out of Ad-Cl
Slide 96: Outlook 2021 & 2022
Outlook 2021 & 2022 New games and ad-tech launches set to further increase growth and profitability Games Media 2021: Targeting 3 DLCs per game / year 2021: Close Smaato & connect / use synergy for core portfolio Further extend salesforce / sales Geo expansion of existing portfolio Roll out of Ad-Cl
Slide 97: Outlook 2021 & 2022
Outlook 2021 & 2022 New games and ad-tech launches set to further increase growth and profitability Games Media 2021: Targeting 3 DLCs per game / year 2021: Close Smaato & connect / use synergy for core portfolio Further extend salesforce / sales Geo expansion of existing portfolio Roll out of Ad-Cl
Slide 98: Clear roadmap: an integrated Media & Games company
Clear roadmap: an integrated Media & Games company O&O AdTech company growing organically as well as via M&A Low business risk focus Recurring steady revenue streams: MMO games (O&O) and SaaS media revenues Strong organic growth In Games; new content and game launches In Media; scaling existing & ad
Slide 99: Q&A
Q&A Agenda: 10.30 – Media and Games Invest Business Update 10.50 – Deep Dive Games Segment 11.25 – Coffee Break 11.40 – Deep Dive Media Segment 12.15 – Break 13.15 – Financials 13.35 – Outlook 13.50 – Q&A 99
Slide 100: Q&A
Q&A To ask a question please dial in to one of the following phone numbers and wait for the operator: (NOTE: PIN code needed for participants) DE: +4969222239167 SE: +46850558354 UK: +443333009030 US: +1 6319131422 Participants Pin Code PIN: 21012820# Or send your questions to investors@mgi-se.com a
Slide 101: Media and Games Invest
G Media and Games invest