Verve Group Se Class A · OMXSTO:VER
Verve Group Se Class A — Media and Games Invest — Investor Day (2022)
111 slides from Verve Group Se Class A's investor day presentation, 2022
Slide 1: Capital Markets Day 2022
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Slide 2: Welcome to MGI's Capital Markets Day
WELCOME TO MGI‘S CAPITAL MARKETS DAY Agenda: 10.30 – Start Presentation & Introduction (CEO Remco Westermann) 10.50 – Business Overview (CEO Remco Westermann) 11.15 – A Guide to Programmatic Advertising (CRO Sameer Sondhi) 11.35 – Our Ad Software Platform (CPO Ionut Ciobotaru) 12.00 – Q&A 12.15 – Lu
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
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad Software Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 4
Slide 5: Our Speakers Today
Our Speakers Today MGI Investor Relations Our IR Team is also here with us in Stockholm and happily awaits your questions Remco Westermann Sameer Sondhi Jens Knauber Sonja Lilienthal CEO & Chairman of the Board of CRO of MGI COO of MGI CIO of MGI MGI • 20+ years of experience in the • 10+ years of e
Slide 6: Aim of Our 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 Q2 FINANCIALS: ACTUALS AND OUTLOOK GET TO KNOW THE TEAM OF MGI Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 6
Slide 7: 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 Business Advertising software platform with first-party content Advertising software platform that brings together advertising supply and advertising demand and Strategy combines this with da
Slide 8: Governance & Sustainability
Governance & Sustainability 8
Slide 9: Board and Management
Board and Management BOARD OF DIRECTORS Remco Westermann Tobias M. Weitzel Elizabeth Para Antonius Fromme Chairman Non-Executive Non-Executive Non-Executive EXECUTIVE MANAGEMENT Remco Westermann Paul Echt Jens Knauber Sonja Lilienthal Sameer Sondhi Ionut Ciobotaru Group CEO Group CFO Group COO Group
Slide 10: Taking Responsibility and Laying the Foundation for Further Growth
Taking Responsibility and Laying the Foundation for Further Growth E S G Gender balance1 Carbon neutrality Relocation of seat to Sweden Composition of the Board of Directors after AGM1 in accordance with 4.1 of the Swedish Governance Transfer documents released by the authorities. MGI achieved carbo
Slide 11: Designated Blue-Chip Board
Designated Blue-Chip Board Board members subject to approval by the Annual General Meeting 2022 Governance / Executive Experience/ Finance & Accounting / Finance & Accounting / Media Executive / Games / Swedish Communications / +20 years industry Capital Markets Capital Markets U.S. Market Capital M
Slide 12: Agenda
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad-Software-Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 12
Slide 13: Key facts MGI in a Nutshell
Key facts €287M 800+ Employees1 Revenue LTM MGI in a Nutshell Q2 2022 131% Ad spend growth Q2 €81M 2022 Adj. EBITDA LTM A leading European ad software platform with Q2 2022 500+ Software Clients with strong first-party games content >$100k revenue / year3 37% Revenue Growth 95%+ Retention Rate of Q2
Slide 14: Global Reach
Global Reach Combining vast global reach… North America Europe RoW 625B+ 2.0B+ 250M+ yearly ad Connected end- Daily active impressions1 consumer devices2 users3 18% … with world class first-party content access. Revenues by region (Q2’22) 13% 5,000+ 20,000+ 1bn+ Own games Connected Own gamers mobile
Slide 15: Major Events During Q2 2022
Major Events During Q2 2022 Initiatives facilitating strong revenue growth in the second quarter of 2022 76% ORGANIC GROWTH ON 175M EUR BOND ISSUE & DEMAND SIDE DRIVEN BY NEW & REPURCHASE OF 115M EUR EXISTING SOFTWARE CLIENTS EXISTING BOND 25+ NEW PUBLISHERS 300M SEK DIRECTED ONBOARDED TO SUPPLY SID
Slide 16: New World = New Rules
CAPITAL MARKETS Increased interest rates, inflation and recession fear Limiting access to capital & making capital more expensive ECONOMIC SITUATION Uncertainty, inflation, interest, supply chain issues, Ukraine war Severe risk of recession M&A DRAMATICALLY CHANGING MARKET M&A More expensive capital
Slide 17: We Want to Be Winners
WE WANT TO BE WINNERS REACTING TO THE ECONOMIC SITUATION Target: getting out of the recession stronger Further investments in organic growth Focus on active margin & cost management Prioritize WE NEED TO GROW. BETTER EFFICIENCY & PROFITABILITY Base: we are well positioned with our business model & a
Slide 18: Confirming Our Guidance
Confirming Our Guidance WE CONFIRM OUR GUIDANCE 2022 WE CONTINUE TO PURSUE OUR VISION BEING ONE OF THE MOST DESIRED GLOBAL COMPANIES TO WORK FOR BECOMING ONE OF THE TOP FIVE WORLDWIDE LEADING AD SOFTWARE PLATFORMS DELIVERING COOL CONTENT RESPECTING OUR PARTNERS’ VALUES AND DELIVERING TRANSPARENCY TO
Slide 19: Agenda
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad-Software-Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 19
Slide 20: Media Market Overview
Media Market Overview Recession likely to lead to 2022 renewed strong Fast and strong recovery acceleration of shift toward July was the worst month for ad spending in two years (-12.6%)2 due to: after COVID collapse programmatic • Softness in consumer spend due to inflation and fear of a recession
Slide 21: Games Market Overview
Games Market Overview 250 25.00% 2022 20.5% 20.00% Games market under pressure, due to: 200 191 195 188 182 • End of Lockdown 15.00% • Russia’s (10th biggest games market) decision to invade 151 150 Ukraine causing USD 1B+ loss • IDFA affecting mobile advertising revenues 10.00% 7.86% • Supply chain
Slide 22: Agenda
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad-Software-Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 22
Slide 23: The MGI Flywheel
The MGI Flywheel The network effect based on MGI’s unique synergetic setup accelerates the flywheel Served more relevant ads to users Ad Software DSP +5,000 Platforms gamigo Our Games & Games SSP Our SDKs +20,000 Mobile Direct App Desktop Integrations CTV DOOH The power of data 1st party, contextual
Slide 24: Transforming into a Leading Ad Software Platform
Transforming into a Leading Ad Software Platform Acceleration of software revenue growth since 2020 Growth to 500+ Growth to Software Total Revenues 400+ Clients1 (EURm) Software Clients1 Revenue per stream (Q2 2022) Launched Verve Group with 1% 100+ 13% Software CTV Clients1 287 252 Mobile 24% 140
Slide 25: The Acceleration of the MGI Flywheel
The Acceleration of the MGI Flywheel The network effect based on MGI’s unique synergetic setup accelerates the flywheel Served more relevant ads to users More Critical Mass More Players • More volume = more economies of • Adding 350-400 games to the MGI scale = higher attractiveness & better platfor
Slide 26: First-Party Games Content
First-Party Games Content First-Party Games Content & Data Targeting Without Identifier or Third- Party Data Improve AI FULL MARGIN IN-HOUSE: HIGHEST DATA QUALITY, EFFICIENT UA FOR OWN GAMES, IMPROVED FILL-RATES AND MUCH HIGHER CPM Cross Channel Connected mobile Own gamers Own Games apps1 /audience2
Slide 27: Data to Improve Targeting Effectiveness
Data to Improve Targeting Effectiveness Leveraging Data based on a Privacy First Approach First-Party Data Behavioral Data Contextual Data Third-Party Consent Data Verve SDKs PRIVACY-FIRST, ON-DEVICE AUDIENCE CONTEXTUAL MARKETING IN MILLISECONDS FIRST-PARTY DATA: FULL MARGIN IN-HOUSE TARGETING SOLUT
Slide 28: End-to-End Multichannel Ad Technology Platform
End-to-End Multichannel Ad Technology Platform Connecting blue-chip brands, advertisers and publishers to users in real time Demand side Publishers Advertisers platform Data Supply side platform (Consumers) Own MGI Demand MGI First-Party Supply In-App Fortune 500 Mobile Web Games & Social Demand sid
Slide 29: Agenda
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad-Software-Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 29
Slide 30: The Open Internet Matters
The Open Internet Matters and fuels growth by complementing the walled gardens Meta universe Google universe • Walled gardens (~70% share) - Google, Meta, Amazon and Apple are Apple universe major walled gardens and control Open internet 70% of advertiser spend Amazon • Open internet (~30%) - all ot
Slide 31: Traditional Digital Advertising
Traditional Digital Advertising Cost and time intensive as well as unscalable PUBLISHER ADVERTISING PARTNERS PARTNERS ADVERTISER PUBLISHER ONE TO MANY MANUAL RFPs NEGOTIATIONS INSERTION ORDERS Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 31
Slide 32: Programmatic Advertising – Part 1
Programmatic Advertising – Part 1 Understanding the Demand landscape DEMAND MANAGEMENT | FLOW OF AD SPENDS EXCHANGE 1 SSP 1 EXCHANGE 2 DEMAND-SIDE AGENCY SSP 2 PLATFORM (DSP) EXCHANGE 3 TRADING DESK SSP n EXCHANGE ..n Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 32
Slide 33: Programmatic Advertising – Part 2
Programmatic Advertising – Part 2 Understanding the supply landscape INVENTORY MANAGEMENT | FLOW OF AD REQUEST MEDIATION PLATFORM DSP 1 SDK SERVER-SERVER DSP n EXCHANGE ..n OPEN INTERNET DEMAND MEDIATION HELPS BALANCE OPEN VS WALLED GARDEN DEMAND WATERFALL / SEQUENTIAL HEADER / APP BIDDING Copyright
Slide 34: Programmatic Advertising – Part 3
Programmatic Advertising – Part 3 How does mediation work? SEQUENTIAL PRIORITY – OLD WORLD PARALLEL PRIORITY – NEW WORLD AD REQUEST Exchange A $2.0 Exchange A $2.0 WATERFALL SET UP Exchange B $2.5 Exchange B $2.5 AD REQUEST IN-APP OR HEADER BIDDING Exchange C $2.7 Exchange C $2.7 Exchange D $2.2 Exc
Slide 35: Programmatic Advertising – Part 4
Programmatic Advertising – Part 4 Real-time bidding - where the magic happens Ad request is OpenRTB Bid is sent to ad server; initialized when a Standard ad is shown / rendered user loads a page Ad server sends COMMUNICATION the ad request 300 30 ms to multiple ad PROTOCOL exchanges ms DEMAND SIDE O
Slide 36: Programmatic Advertising – Part 5
Programmatic Advertising – Part 5 Importance of targeting and data enrichment SIGNALS RECEIVED Gender Female Age 35-55 FROM CONSUMER: Location Interests Sports, Travel, Device Entertainment Demog App context Work Bradstreet, London, UK Ad history Timestamp SUPPLY SIDE DEMAND SIDE PLATFORM (SSP) PLAT
Slide 37: Programmatic Advertising – Part 6
Programmatic Advertising – Part 6 Importance of measurement across the marketing funnel ADVERTISER ECOSYSTEM MEASUREMENT ECOSYSTEM FULL FUNNEL OPTIMIZATION & MEASUREMENT LEADING, INDEPENDENT MEASUREMENT OBJECTIVES PROVIDERS Awareness Consideration Acquisition Activation Flexibility to work with any
Slide 38: Programmatic Advertising | Future Forward
Programmatic Advertising | Future Forward What will fuel programmatic growth in the coming years ? 3 Cross- channel 4 Open box with end-end Transparency Offer, unified visibility into data and Optimization multi-channel pricing solutions 2 Audience Higher ROAS1 & Yield Per Ad Brand & Performance 5 O
Slide 39: Agenda
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad-Software-Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 39
Slide 40: MGI will have a leading position in this new world
„ MGI will have a leading position in this new world as we have built our platform from the ground up for where the world will be as opposed to where it is now. “ 40
Slide 41: Our Growth Drivers
Our Growth 1 FULL STACK, ONE-STOP SHOP Robust solutions. Accelerated feedback loop. Innovate and learn. Drivers 2 AUDIENCE EXCELLENCY Making media better through product Proprietary data solutions, complemented by strong product bridges. innovation and partnerships. 3 TRANSPARENCY Open-box. Embracin
Slide 42: Full Stack. One-Stop Shop.
1 Full Stack. One-Stop Shop. Simplifying a fragmented market leads to more transparency, efficiency and margin O&O OPEN SOURCE Ecosystem END-TO-END SUPPLY MULTI-CHANNEL Platform TOP / BOTTOM FUNNEL Products DATA DEMAND PRIVACY FIRST BUILT WITH BRIDGES 2019 2022 2023+ Copyright © 2022 Media and Games
Slide 43: Audience Excellency
2 Audience Excellency Three unique audiences, built for ID-based and non-ID based privacy-first targeting Audiences with ID Audiences without ID (Privacy-focused) Behavioral Contextual On-Device Cohorts IDFA GAID Deterministic audiences Privacy-by-design, natural Language Privacy-by-design, machine
Slide 44: Audience Excellency: Behavioral
2 Audience Excellency ID-based Audiences: Behavioral Proprietary Solution: Verve Activate Among Top five mobile ad exchanges globally, in terms of audience reach and scale TRUE AND ACCURATE DETERMINISTIC TARGETING GRANULAR CUSTOM SEGMENTS CROSS-CHANNEL OPERABLE DEVICE IDENTIFIERS IDFA / GAID PERSONA
Slide 45: Audience Excellency: Contextual
2 Audience Excellency Non ID-based Audiences: Contextual Proprietary Solution: Strategic partnership with Getty Images for Verve Moments.ai brand placements on premium content PRIVACY FOCUSED NO IDENTIFIERS OR PII CONTEXTUAL; NOT USER LEVEL CROSS-CHANNEL REACH DEVICE IDENTIFIERS IDFA / GAID PROBABIL
Slide 46: Audience Excellency: Cohorts
2 Audience Excellency Non ID-based Audiences: Cohorts Proprietary Solution: First in market with cohort-based mobile Verve ATOM audiences for IDFA-less targeting Partner Solutions: + Topics SKAdNetwork DEVICE IDENTIFIERS IDFA / GAID COOKIES ML Models & AI Automation On-device Audiences App Context D
Slide 47: Transparency
3 Transparency Open box platform with strong bridges to embrace incumbent solutions and standards Open-Source SDK1 Prebid Open and modular tech to simplify Industry first collaboration on open yield management for publishers source projects like in-app bidding IAB Certified for transparency as per O
Slide 48: Cross Channel Optimization
4 Cross Channel Optimization Multi-channel optimization ensuring brand and performance KPIs are met across screens Verve Data Platform Verve SSP 1. ECOMMERCE DESKTOP / MOBILE VISIT: 2. DATA ENRICHMENT USING NO TRANSACTION HOUSEHOLD GRAPH O&O & 3P DATA Verve DSP PROPRIETARY HOUSEHOLD GRAPH Ad 1 of 2
Slide 49: Performance and Brand KPI Optimization
5 A. Performance and Brand KPI Optimization Investment in building a product stack that works across client KPIs BRAND BRAND-PERFORMANCE PERFORMANCE Deterministic Audiences User Acquisition Premium Inventory Dataseat - performance specialized in- Built on online, offline and cross-device Large footp
Slide 50: Measurement & Attribution
5 B. Measurement & Attribution Investing in future-proof measurement and attribution solutions through partnerships TODAY BRAND BRAND-PERFORMANCE PERFORMANCE BRAND SAFETY FOOTFALL MEASUREMENT WEB CONVERSIONS VIEWABILITY VERIFICATION SALES LIFT APP INSTALLS AUDIENCE VERIFICATION BRAND LIFT PURCHASES
Slide 51: Quality: Fighting Fraud
6 Quality Zero compromise policy. Stringent in-house tools and policies; combined with strong external partnerships FRAUD TYPES FIGHTING FRAUD DESKTOP MOBILE CTV # PREVENTION 1 In house Algorithms adaptively learn complex patterns to detect fraud in real-time (pre-bid). App-ads.txt for added transpa
Slide 52: Consecutively Ranked #1 in Trust Index
6 Quality The proof is in the results Rank Seller Final Score 1 92 (A) 2 Tappx 92 (A) Q3 2021 Q4 2021 Q1 2022 3 89 (A) 7 87 (A) Consecutively 10 86 (A) Ranked #1 in 23 82 (B) Trust Index 30 82 (B) Source: Seller Trust Index, published quarterly by 32 81 (B) 36 Applovin 80 (B) 38 78 (B) Copyright © 2
Slide 53: Time for Q&A
Time for Q&A To ask a question, please send an email to: investors@mgi-se.com 53
Slide 54: Lunch Break
Lunch Break Starting again at 13:00 54
Slide 55: Agenda
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad-Software-Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 55
Slide 56: MGI's Games Portfolio
MGI‘s Games Portfolio MGI’s Game Studios 10+ MMO Premium Games for our role 5,000+ Casual & Mobile Games1 for everyone play and strategy players Own IP Games1 Source: Group information Notes: (1) 81% of Games revenues from own IP, including Casual Games Copyright © 2022 Media and Games Invest SE. Al
Slide 57: Mobile and Casual Strategy
Mobile and Casual Strategy Monetization Model Growth Strategy Mobile Games Development Leveraging synergies with our ad • In-house development less Free 2 Play software platform via: complex and cost-intensive • Significantly reduced risk profile Ad based & data See following slide User Acquisition
Slide 58: MGI's Casual and Mobile Games Portfolio
MGI‘s Casual and Mobile Games Portfolio User Acquisition and ad-monetization are Key Mobile and casual games are characterized by a shorter player lifespan At the same time, user acquisition is easier as entry barriers are lower for players Efficient user acquisition is key for the success of mobile
Slide 59: Casual and Mobile Games: Part of the Flywheel
MGI‘s Casual and Mobile Games Portfolio Part of the Flywheel Users Content/ Casual & Games Mobile Games Audiences First-Party Data Gaming standalone Gaming and media combined CPI1: EUR User acquisition 0.153 User acquisition CPI: EUR 0.103 Improved Targeting & Playing user Playing user Monetization
Slide 60: Advertising Synergies in Action
Advertising Synergies in Action Leveraging the perfect synergetic fit: MGI’s most recent first party games data acquisition AxesInMotion Placing ads in own games Synergy Effect Next: Integration of AxesInMotion Full value chain: From campaign creation Revenue distribution: Revenue based on via Verve
Slide 61: Launch Pipeline Mobile & Casual
Launch Pipeline Mobile & Casual Strong mobile launch pipeline in the next months and quarters Q3 2022 H2 2022 2023 2023 PROJECT GALAXY STEALTH Unlock golfers with varying Card-based gameplay: A 4X strategy game with a • CPI Optimization skills & abilities as they Build your deck from a high-fantasy
Slide 62: MMO Business
MMO Business Gaming as a Service Monetization Model Growth Strategy Development New Content Updates Desktop / Console Games Free 2 Play Development vs. Mobile Games Community Services • In-house development is complex Buy 2 Play and cost-intensive Re-Engage Players • High risk profile Subscription b
Slide 63: MGI's Resilient MMO Portfolio
MGI‘s resilient MMO Portfolio A dedicated customer base with multi-year relationships Massively Multiplayer Game Recurring revenues1 Substantial revenues 56% USD 450m+ revenues 21% 14% 9% 55m+ gamers 1 Year 1-3 Years 3-5 Years > 5 Years • A family-friendly MMORPG, first • 55%+ of revenues from playe
Slide 64: MMO Revenues Are Typically Recurring Over 5+ Years
MMO 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 Wizard101 88% 56% 21% 14% 9% 3% 4% 5% 1 Year 1-3 Years 3-5 Years > 5 Years 1 Year 1-3 Years 3-5 Y
Slide 65: MMO Geographical Expansion
Further Growth MMO‘s: Geographical Expansion The example of Wizard101 - expanding into Europe Prior to the KingsIsle acquisition, Wizard101's publishing Following the acquisition of KingsIsle, Wizard101's in Europe was outsourced to another publisher publishing in Europe has been in-sourced Resultin
Slide 66: MMO Structural Game Improvement
Further Growth MMOs: Structural Game Improvement E.g. Trove; gamigo released the biggest update for Trove since its acquisition in 2018 ~14 Content Updates Recent months show Trove was since acquisition highest revenues since launched in 2015 acquisition Acquired by MGI Biggest Update since in 2018
Slide 67: MMO Content & New Game Launches at Scale
Further Growth MMO’s: Content & New Game Launches at Scale Premium Games engaging updates & DLCs, promotions and platform ports Q3 2021 Q4 2021 Q1 2022 Q2 2022 Aura Fiesta Trove Wizard101 Trove Grand Echo of Soul: Trove Trove Wizard101 EU Trove The Return of Kingdom Realm of Console Lemuria Polished
Slide 68: Agenda
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad-Software-Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 68
Slide 69: Robust Model Enabling Long-Term Value Creation
Robust Model Enabling Long-Term Value Creation “BUY. INTEGRATE. BUILD and IMPROVE.” strategy consequently implemented since 2012 Primary focus on synergy MGI’s Strategy: Focus on Organic Growth realization & profitable organic growth Buy Integrate Build and Improve Priority: Priority: Further Integr
Slide 70: Capital Market Environment and Updated M&A Strategy
Capital Market Environment and Updated M&A Strategy M&A activity has slowed with macroeconomic headwinds Volatile markets and decreasing public equity valuations Potentially upcoming recession Gap in valuation expectations of buy-side and sell-side M&A not a priority Debt / Equity capital markets di
Slide 71: Realizing Synergies From Past M&A
Realizing Synergies From Past M&A Two important transactions in 2022 accelerating our flywheel to achieve our Vision 2025 Media Gaming ✓ DSP start-up with future-oriented contextual ✓ Leading free-to-play mobile games developer technology ✓ Enrich our ad software platform with premium ✓ Continuously
Slide 72: Adding a missing puzzle piece
Capital Markets Day “Adding a missing puzzle piece with strong synergy and growth potential ” Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 72
Slide 73: Dataseat: In-App, Transparent, Privacy Compliant DSP
In-App, Transparent, Privacy Compliant DSP For: User Acquisition, Retargeting & Cross-Promo Campaigns Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 73
Slide 74: Who, Why, What
WHO, WHY WHAT STARTED AN MEDIA AGENCY IN 2010 DAVID 2 CLIENTS: GROUPON & PHILIPPSON EXPEDIA REQUIREMENT TO CEO & Co-Founder TRACK A DOWNLOAD MET DR. PAUL HAYTON, WIZARD ENGINEER DR PAUL HAYTON CTO & Co-Founder CREATED AD-X TRACKING FOR THE FIRST MMP/ATTRIBUTION PLATFORM Copyright © 2022 Media and Ga
Slide 75: Dataseat Thesis
DATASEAT THESIS ● 2013 criteo acquired ● GM of Mobile Solution ● Three years with Criteo and Ad-X tracking and tasked with building Apple made their first in-app retargeting major move in privacy ● ITP (intelligent ● Hypothesis was that ● This would create tracking prevention) Apple would remove the
Slide 76: Behavioral vs Contextual
BEHAVIORAL CONTEXTUAL ● Driven by Facebook ● What advertising used to be ● Who ever has most data wins and will become again ● Able to collect data from advertiser ● Is privacy compliant and publisher ● Why the BMW would advertise ● All other ad networks had to compete on the FT so did the same thin
Slide 77: Apple Is Causing Significant Disruption
APPLE IS GOOGLE HAS CAUSING ANNOUNCED SIGNIFICANT SIMILAR DISRUPTION iOS 14.5 release on 26th April 2021 GAID is expected to be removed has caused significant and lasting which will have similar negative negative effect particularly on effect on behavioral targeting Facebook Apple is expected to enf
Slide 78: Dataseat Growth
July 2022: DATASEAT GROWTH Joins MGI/Verve Between April and May 2021: iOS 14.5 released November 2021: June 2020: Launch our Apple announced ATT context UA product January 2020: Closed VC funding & soft launch Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 78
Slide 79: Synergies
SYNERGIES ● Future successful Data contextual DSP will include an SDK install base Supply ● Virtuous circle where our Moments.AI demand helps grow supply Demand ● Whilst our growing SDK supply helps our performance ● First-party data & contextual data platform further improves performance Copyright
Slide 80: GEOs
GEOs ● Multiple Verve MGI offices ● Sellers on the ground in every major region ● Grow our business in new GEOs & new TAMs1 Notes: (1) TAM = “Total Addressable Market” Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 80
Slide 81: TAMs
Gaming On-demand & Retail Finance / Crypto Entertainment TAMs ● Dataseat strategically focused on Gaming ● Our machine learning & AI capability works for all TAMs Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 81
Slide 82: Tradewinds & Tailwinds Are in Our Favor
TRADEWINDS & TAILWINDS ARE IN OUR FAVOR Watch out for Apple banning Google has Brands care more Being part of fingerprinting or announced similar about transparency Verve/MGI we can probabilistic intentions through & privacy than ever now execute on this attribution Google sandbox before potential C
Slide 83: Adding critical mass in mobile gaming
“Adding critical mass in mobile gaming with strong synergy and growth potential ” Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 83
Slide 84: Strong IP Beyond Flagship Game ECDS
Strong IP Beyond Flagship Game ECDS Portfolio of high-quality racing games Extreme Car Driving Simulator Car Stunt Races: Mega Ramps Extreme SUV Driving Simulator Launch in 2014 Launch in 2019 Launch in 2014 Flagship title and main revenue driver Stunt racing games identified as an attractive Recogn
Slide 85: ECDS: Explosive Growth in ARPDAU
ECDS: Explosive Growth in ARPDAU IOS ARPDAU 2020-2021, $ Google Play ARPDAU 2020-2021, $ 0.07 +39% Dec’21: 0.028 +87% Dec’21: $0.064 $0.022 0.024 0.06 0.02 0.05 Dec’20: 0.016 $0.046 0.04 Dec’20: 0.012 $0.012 0.03 0.008 0.02 0.004 Feb-20 Jul-20 Jan-21 Jun-21 Dec-21 Feb-20 Jul-20 Jan-21 Jun-21 Dec-21
Slide 86: AxesInMotion Milestones
AxesInMotion Milestones Company development from inception to 2021 Cumulative downloads, in millions Downloads 23 107 181 255 348 448 589 735 Growth N/A 365% 69% 41% 36% 29% 31% 25% 800m+ downloads since 2014 2014 2015 2016 2017 2018 2019 2020 2021 AxesInMotion is New strategy adopted: Release of “E
Slide 87: AxesInMotion Organic Growth Opportunities
AxesInMotion’s Games Offer Significant Organic Growth Opportunities Organic growth based on scaled and cost-efficient UA, keeping full ad value chain in house • Company is not yet investing in User Acquisition at scale User • Vast synergy potential via (cost-) efficient user acquisition via own tech
Slide 88: AxesInMotion Highlights
AxesInMotion Highlights Vast synergy potential Proven track record in Strong vision to expand in- Strong pipeline of projects Compelling portfolio of building a massive audience game monetization under development visually stunning highly viral worldwide without ANY mechanics and to further expected
Slide 89: Strong U.S. Audience for Verve U.S. Advertisers
Strong U.S. Audience for Verve U.S. Advertisers Extreme Car Driving Simulator 2021 Total Revenues, in % USA 33% Advertisers targeting U.S. customers with first class Germany 5% access to U.S. audiences via AxesInMotion Brazil 5% India 5% UK 4% Mexico 3% Russia 3% + France 3% Australia 2% Saudi Arabi
Slide 90: The Acceleration of the MGI Flywheel
The Acceleration of the MGI Flywheel AxesInMotion and Dataseat is a perfect strategic fit to spin our flywheel Served more relevant ads to users • Efficient UA brings more users • SDK integration with Verve brings more World class first-party data DSP games • Monetization via Verve SSP brings up to
Slide 91: Games Pipeline
Games Pipeline New great first-party content filling the pipeline Release Release Tech Soft Global Launch Prototype BETA Launch & Liveops Nitro Clash Card-based gameplay: Build your deck from a broad variety of vehicles, upgrade the cards to Release Soft Prototype Launch be more competitive Game Con
Slide 92: Time for Q&A
Time for Q&A To ask a question, please send an email to: investors@mgi-se.com 92
Slide 93: Agenda
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad-Software-Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 93
Slide 94: Second Quarter Financial Highlights
Second Quarter Financial Highlights Strong Growth Compared To Strong profitability and cash generation Q2 2021 Q2 2022 37% of which: 18% Margin Growth Revenue Growth Organic Revenue Growth 38% 47% Net Revenues Adj. EBITDA Growth Adj. EBIT Growth Adj. EBITDA 90 Adj. EBIT 45 % Margin % 80 78 80 % EBIT
Slide 95: MGI – Segment Performance
MGI – Segment Performance Demand-Side Segment Supply-Side Segment 76% organic 14% organic (EURm) growth (EURm) growth +104% +32% 7.7 70.4 53.3 3.8 19.9 14.6 28% 1.2 0.7 16% 27% 18% Q2 2021 Q2 2022 Q2 2021 Q2 2022 Revenues Adj. EBITDA Margin Revenues Adj. EBITDA Margin • Following investments into th
Slide 96: Consistent Long-Term Financial Development
Consistent Long-Term Financial Development Highly scalable and profitable business model with strong organic growth EURm1,2 CAGR 69%3 18% Organic Revenue Growth4 287 252 (adjusted EBITDA) 30% 28% 28% 140 25% 22% 21% 20% 18% 84 81 71 64 55 10% 39 42 45 29 15 22 18 18 7 11 13 7 10 2 4 2 2014A 2015A 20
Slide 97: We Grow With Our Software Clients
We Grow With Our Software Clients The KPIs driving our top-line growth Taking market share but CPMs down and therefore Ad Impressions not directly translating Ad impressions delivered (in bn) into revenues Including M&A 1 Organic Growth 156 161 135 173 87 85 89 59 66 37 44 60% YoY 15 17 22 54 organi
Slide 98: Seasonality in Programmatic Advertisement
Seasonality in Programmatic Advertisement Seasonality will further support strong revenue and EBITDA growth in H2 2022 H2 vs H1’22 will grow Commentary regardless of ad Group spend softness due Seasonality in MGI group to strong seasonality - MGI increasingly subject to seasonality as business more
Slide 99: Net Working Capital Development
Net Working Capital Development Decreased NWC leads to cashflow improvements Net working capital development (EURm) 20% 19% 120 20 16% 50 15 100 45 52 10 80 5% 3% 5 -1% NWC as % of revenues 60 -4% 0 -5% -6% 103 Trade receivables 97 -5 40 -9% 7 87 Trade payables -10 NWC 20 37 1 -15 17 5 5 5 0 -1 2 -4
Slide 100: The MGI Balance Sheet
The MGI Balance Sheet Strong balance sheet with high cash position to navigate the cycle Balance Sheet as of June 30, 2022 (EURm) 1.042.217 1.042.217 Intangible Assets • Impairment tests done by Deloitte on a regular 352.419 Total Equity basis. EY Starting 2022 as Deloitte becomes auditor. • EY revi
Slide 101: Net Leverage and Interest Coverage Ratio
Net Leverage and Interest Coverage Ratio Strong interest coverage ratio of 3,9x based on Q2 2022 LTM adj. EBITDA Net debt to adj. EBITDA ratio development1 Interest Coverage Ratio development1 (EURm) (EURm) Net leverage 299 Interest Coverage Ratio 81 Net Interest Bearing Debt 286 280 Adj. EBITDA 71
Slide 102: Operating Cash Flow and Capex Development
Operating Cash Flow and Capex Development MGI Flywheel at work: increasing cash flow from operations, more investments in organic growth Operating cash flow development1,2,3 Capex development3 (EURm) 84 (EURm) 345 Operating Cash Flow Maintenance Capex 296 Free Cash Flow after Interest Expenses Expan
Slide 103: Confirming our Guidance 2022 despite Macro-Economic Headwinds
Confirming our Guidance 2022 despite Macro-Economic Headwinds LTM Q2 22: Revenue EUR 287 million EBITDA EUR 81 million FY 2021 Confirmed Guidance 2022 Revenue 252 295 – 315 (in €m) Growth 80% 17%-25% Adj. EBITDA 71 83 – 93 (in €m) Growth 143% 17%-31% Copyright © 2022 Media and Games Invest SE. All R
Slide 104: Mid-Term Financial Targets
Mid-Term Financial Targets Prudent mid-term financial targets which have been outperformed for three years in a row Confirming our prudent mid-term financial targets despite difficult to predict 2023 Revenue CAGR Adj. EBITDA margin Adj. EBIT margin Pro-Forma Leverage1 25%-30% 25%-30% 15%-20% 2-3x We
Slide 105: Financial Key Take-aways
Financial Key Take-aways MGI is well-positioned to navigate the cycle ~70% of ad revenues from U.S. market which is more resilient than European market1 ~50% of EBITDA based on anti cyclic free-to-play games revenues1 Positioned in the games and advertising markets – which naturally hedge each other
Slide 106: Agenda
Agenda Introduction Business Overview Business Update Market Outlook MGI Flywheel A Guide to Programmatic Advertising Our Ad-Software-Platform Growth Driver Q&A Our Resilient Games Portfolio Our Strategy: Focus on Organic Growth Q&A Financial Performance & Outlook Vision 2025 Q&A 106
Slide 107: Vision 2025: MGI's Five Pillars For Further Growth
Vision 2025: MGI’s Five Pillars For Further Growth 5 Leveraging Leveraging positions that give clear USPs such as End2End, unique USP SaaS, multi-channel, Our iron base for exceptional growth and for positions transparent, contextual reaching our Vision 2025 4 Leveraging our unique combination of Ad
Slide 108: Vision 2025: Let the MGI Flywheel Spin
Vision 2025: Let the Growing SDK base via onboarding MGI Flywheel Spin publishers Investing in open source Data empowering The network effect based on MGI’s unique synergetic setup leads to accelerating the flywheel Focus on ATOM Lots of synergies and improvements to go for, leading to further growt
Slide 109: Headlines Vision 2025
BEING ONE OF THE MOST DESIRED GLOBAL COMPANIES TO WORK FOR embracing diversity, global, no politics, professional, engaged, innovative, strong drive BECOMING ONE OF THE TOP FIVE WORLDWIDE LEADING AD- SOFTWARE PLATFORMS transparent, open source, innovative, multi-format, omni- platform, vertically in
Slide 110: Time for Q&A
Time for Q&A To dial in for questions, please call: SE: +46850558358 UK: +443333009274 US: +16467224956 DE: +4969222220377 Technical note: While in the teleconference, please make sure to turn off the volume on your computer and only listen via phone. 110
Slide 111: Thank You.
Thank You. www.mgi-se.com 111