Verve Group Se Class A · OMXSTO:VER
Verve Group Se Class A — Media and Games Invest — Investor Presentation (2022)
53 slides from Verve Group Se Class A's investor presentation, 2022
Slide 1: Company Presentation
<> Media and Games Sp Invest
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
Agenda Introduction Business Overview Our Flywheel Overview ESG Strategy MGI Financial Performance Vision 2025
Slide 4: Introduction
G Media and Games Invest @ 1. Introduction
Slide 5: Today's Presenters and Ownership Structure
Today’s Presenters and Ownership Structure Shareholdings (149,679,980 shares)1 Shares listed on Frankfurt Stock Exchange and 28% Remco Westermann Nasdaq First North Premier Stockholm Remco Westermann holds his MGI shares via the German holding company Bodhivas GmbH. Bodhivas GmbH is based in Düsseld
Slide 6: Business Overview
G Media and Games @ 2. Business Overview
Slide 7: Key facts: MGI in a Nutshell
Key facts €252M +800 Employees1 Revenue 2021 MGI in a Nutshell 55% Tech Employees2 €71M We are a leading Ad-Software platform enabling Adj. EBITDA 2021 +400 Software Clients monetization and user acquisition for app and with revenues >$100k4 content developers. 80% Revenue Growth FY 2021 +94% of Sof
Slide 8: Global Reach
Global Reach Combining vast global reach… North America Europe1 South America Asia RoW +411B +1.7B +250M yearly ad Connected devices Daily active impressions2 users3 3% 6% 3% … with world class first party content access. 19% Revenues by region (Q4’21) +5,000 +20,000 +100M own games Connected Own ga
Slide 9: Transforming into a Leading Ad-Software Platform
Transforming into a Leading Ad-Software Platform Acceleration of software revenue growth in 2021 Growth to Total Revenues +400 Software (EURm) Clients1 Launched Verve Group with +100 Software Clients1 252 80 140 63 52 57 84 45 2012 2016 2017 2018 2019 2020 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Adding
Slide 10: 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 The Network Effect Served more relevant ads to users More critical Mass More 1st Party Content DSP +5,000 own gamigo SSP games +5000 In-App Web Direct Publisher CTV Integrations DO
Slide 11: The Market Opportunity of MGI
The Market Opportunity of MGI We outgrow two highly attractive markets thanks to synergies and network effects created by the flywheel The sum is greater than its parts Digital Advertising +$550 bn market2 Combined addressable Market: +750 bn2 +10% 38% Growth CAGR2 Organic Revenue Growth1 Digital Ga
Slide 12: Major Events in the Fourth Quarter
Major Events in the Fourth Quarter Major MGI initiatives facilitating strong revenue growth in the fourth quarter of 2021 PARTNERSHIP WITH KUBIENT TO REDUCE AD FRAUD AND INCREASE ACQUISITION OF MATCH2ONE TRANSPARENCY IN THE AD-VALUE-CHAIN APPLOVINS „MAX SOLUTION“ ANNOUNCEMENT OF FRACTURED ONBOARDED
Slide 13: Our Ad-Software Platform
G Hele and Games @ 3. Our Ad-Software Platform
Slide 14: Our Ad-Software Platform Powers the Ad-Ecosystem
Our Ad-Software Platform Powers the Ad-Ecosystem Our leading platform is omnichannel, multiformat and vertical Our value proposition Full stack ad-technology Horizontal: Mobile In-App, Mobile Web, Desktop, CTV, DOOH DSP Mobile In-App Vertical: Fully integrated platform between advertiser and publish
Slide 15: Our Ad-Software Platform Serves All Ad-Formats
Our Ad-Software Platform Serves All Ad-Formats Strong Supply Side Positioning in Mobile In-App Revenue breakdown per device1 Recurring software revenues with loyal clients2 Desktop1 3% 14% Connected TV (CTV) 25% Mobile Demand Side Platform (In-App) 1% Digital out of Home Supply Side Platform (DooH)
Slide 16: Our Full Stack Ad-Software Platform Covers the Whole Value Chain
Our Full Stack Ad-Software Platform Covers the Whole Value Chain Connecting blue-chip brands, advertisers and publishers to users in real time Advertisers Demand side platform Data Supply side platform Publishers (Consumers) Own MGI Demand MGI 1st Party Supply Fortune 500 Games & Social Demand side
Slide 17: Own First Party Games Content
4. Own First Party Games Content
Slide 18: Strong Portfolio of Own Games Fuels the Ad-Software Platform
Strong Portfolio of Own Games Fuels the Ad-Software Platform Platform fueled by our highly diversified and engaging first party content +5000 Casual Games3 for everyone +10 Premium Games for our most engaged players Casual Games Premium MMO Games Spanning all genres Highly engaging genres includ
Slide 19: Content Launches at Scale To Accelerate the Flywheel
Content Launches at Scale To Accelerate the Flywheel Delivering new content on an ongoing basis drives engagement and ad monetization 1 H1 2021 Q3 2021 Q4 2021 New engaging Casual Games 3 Casual Games - Launch Pipeline strong pipeline of 2022 new and engaging Criminal Archives: Myth or Reality: I Lo
Slide 20: Data Enrichment on our platform
5. Data Enrichment on our platform Data empowering
Slide 21: Data: Value Add That Makes Advertising More Efficient
Data: Value Add That Makes Advertising More Efficient Value added services drive margins due to up-selling potential and increasing wallet share of customers Advertiser Publisher Wants highest revenue per Wants highest efficiency ad-space and no annoyance of each $ spend of the consumer Solution: op
Slide 22: Better Efficiency Based on Data and Targeting
Better Efficiency Based on Data and Targeting Old World – identifiers available: identifiers in place give high Our innovation drives value add for advertisers accuracy but limited reach – if no identifier in place, blind advertiser with potentially high reach but very low accuracy and publishers in
Slide 23: Our Flywheel In Action
6. Our Flywheel In Action Data empowering
Slide 24: MGI's Ad-Software Platform Drives Higher Efficiency
MGI’s Ad-Software Platform Drives Higher Efficiency MGI’s integrated ad-tech platform leverages MGI’s own 1st party content to drive more revenues The highly fragmented ad-market vs. MGI’s setup…. … and the benefits we can get from it1 Traditional Ad-Software platform programmatic value with access
Slide 25: Example: Monetization of Games for Direct Publishers integrated via SDK
Example: Monetization of Games for Direct Publishers integrated via SDK MGI powers chart-topping android mobile games loved by over 500M players worldwide Example of directly connected Publisher Apps MGI places ads on directly Top Android Apps on Google Play Store, 2021 connected Publishers Buying e
Slide 26: Example: MGI Monetizes Own Games via Advertising
Example: MGI Monetizes Own Games via Advertising MGI generates more revenues due to better fill rates, much higher CPMs and the full margin staying in-house MGI places ad on Campaign Setup own content through Verve Group platform Further increased efficiency for UA in own games as well as more relev
Slide 27: Overview ESG
Overview ESG 7. Media and Games Invest @ @
Slide 28: Sustainability, a Key Focus Area for MGI
Sustainability, a Key Focus Area for MGI Selection of some major MGI has put great emphasize on sustainability achievements initiatives and will continue to do so in the future Release date: 2021-06-17 Download: mgi-se.com/sustainability-reports/ MGI is collaborating with Planetly and became carbon
Slide 29: MGI Is Actively Improving Its Governance
MGI Is Actively Improving Its Governance Reducing administrative complexity and risk premium on MGI stock Update on the relocation process Governance structure Initiated relocation away from Malta following Malta’s grey- Increase number of Board members and establish a listing by the FATF1 in mid-20
Slide 30: MGI Strategy
G ele and Games @ 8. MGI Strategy
Slide 31: Robust Model Enabling Long-term Value Creation
Robust Model Enabling Long-term Value Creation ”BUY. INTEGRATE. BUILD & IMPROVE.” strategy consequently implemented for 9+ years Overview of MGI’s strategy combining acquisitive and organic growth Build and Buy Integrate improve Market consolidation through Integration and synergy Ramp-up of organic
Slide 32: Built on a Prudent and Tested M&A Strategy
Built on a Prudent and Tested M&A Strategy Consequently executing M&A with typically 3-5 cases per year 1 MGI has a strong M&A track record… >35 <24 months <10x EBITDA EUR 5-40m Purchase price multiples for Number of acquisitions since Typical pay-back time Typical revenue size EBITDA positive cases
Slide 33: Successful Integration of Acquired Entities
Successful Integration of Acquired Entities Substantial cost savings through use of state-of-the-art technology and economies of scale Overview of integration process Data centers Hybrid cloud technology Outcome (kEUR) 543 • High fixed costs • Scalable cost base • High personnel costs • Largely cons
Slide 34: MGI Continuously Creates Value Through M&A
MGI Continuously Creates Value Through M&A Network effects allow us to realize revenue synergies post M&A while keeping cost under control Financial performance (2020 – 2021) In mEUR Net Revenues EBITDA Achievements since acquisition Boost top line, integrate & improve employee satisfaction Actuals
Slide 35: Top M&A Targets
Top 5 M&A Targets Several attractive targets in the pipeline, with some signings expected soon <10x EBITDA (incl. synergies) Overview of cases with good potential to be signed within next 6 months1: Mobile games developer & publisher Own strong IP, mobile racing games, € 7 - 10m revenues, highly pro
Slide 36: Financial Performance
G Media and Games Invest @ 9. Financial Performance sere, WE MM
Slide 37: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights Revenues increased by 65% and adjusted EBITDA by 131% Strong Top-line Growth Strong profitability and cash generation Q4 2021 Q4 2021 65% 36% Growth Revenue Growth of which: Organic Revenue Growth 131% 232% Net Revenues Adj. EBITDA Growth Adj. EBIT Growth Adj. EBI
Slide 38: Consistent Long-Term Financial Development
Consistent Long-Term Financial Development Highly scalable and profitable business model with strong organic growth EURm1,2 38% Organic Revenue Growth 20215 252 CAGR 77%4 29,6% 140 28,2% 25,0% 21,6% 20,8% 19,9% 84 17,7% 71 55 42 45 9,9% 39 29 22 18 18 15 11 13 10 2 4 7 2 7 2014A 2015A 2016A 2017A 20
Slide 39: We Grow With Our Software Clients
We Grow With Our Software Clients The KPIs driving our top-line growth Ad-Software share of group revenue6 Ad Impressions 173 35% 31% Ad impressions delivered (in bn) 56% 135 Consumer7 Including M&A 1 Organic Growth 87 Software 66 69% 59 65% 37 44 44% 15 17 22 54 40 2019 2020 2021 Q1’20 Q2’20 Q3’20
Slide 40: Case Study Fiesta: We grow with our Premium Games
Case Study Fiesta: We grow with our Premium Games We continuously grow a 15-year-old game via efficient user acquisition combined with content updates +15 years since launch Anime MMO that Impact on organic growth The game active in the market captivates players with its beautiful level of detail an
Slide 41: The KingsIsle Acquisition Is Well Above Plan
The KingsIsle Acquisition Is Well Above Plan Revenues +9% and EBITDA +18% above plan KingsIsle Guidance 2021 KingsIsle 2021 Actuals Delta Revenue Revenue +32mUSD +35mUSD +9% EBITDA EBITDA +21mUSD +24mUSD +18% Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 41
Slide 42: Improving MGI's Cost Structure Over Time
Improving MGI’s Cost Structure Over Time Economies of scale lead to clear cost efficiencies Operating model and cost structure Impact on EBITDA Adj. EBITDA Costs as a percentage of Net Revenues Cost of Sales (in mEUR) 80 40 Traffic and 71 technology costs 70 35 account for 85% of Cost of Revenue 60
Slide 43: Investments Leading To Strong Organic Growth
Investments Leading To Strong Organic Growth MGI has a highly efficient CAPEX structure driving organic growth Investments in 2021 Impact on Organic Growth Total CAPEX / Investment Cash Investments in Games Content 10% 38% Flow (in mEUR) Maintenance CAPEX: Market vs Org. growth Investments in conten
Slide 44: 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 and larger acquisitions Operating cash flow development1,2,3 Capex development3 (EURm) 65 (EURm) 296 55 285 25 21 16 12 38 7 4 6 3 4 14 13 33 1 2 7 7 0 1 2 1 13 9
Slide 45: Net Leverage and Interest Coverage Ratio
Net Leverage and Interest Coverage Ratio Conservatively levered with an net leverage of 2.8x based on 2021 adj. EBITDA Net leverage to adj. EBITDA ratio development1 Interest Coverage Ratio development1 (EURm) (EURm) 199 71 Net leverage Interest Coverage Ratio Net Interest Bearing Debt Adj. EBITDA 2
Slide 46: Actuals vs. Guidance
Actuals vs. Guidance 2021 Strong revenue and EBITDA results 2021 Actuals vs. 2021 Guidance Guidance 2021 FY 2020 FY 2021 incl. Smaato Revenue 140 252 234 - 254 (in €m) Growth 67% 80% 67-81% Adj. EBITDA 29 71 65 - 70 (in €m) Growth 61% 143% 123-141% Copyright © 2022 Media and Games Invest SE. All Ri
Slide 47: Guidance 2022
Guidance 2022 15-23% largely reflecting organic revenue growth in 2022 as M&A revenues (2021) are set-off by discontinued business FY 2021 Guidance 2022 Impact discontinued business c. 20mEUR Revenue 252 290 – 3101 (in €m) Growth 80% 15-23% 15-23% is largely organic growth as M&A related “Smaato” re
Slide 48: Mid-term Financial Targets
Mid-term Financial Targets Prudent mid-term financial targets which have been outperformed for three years in a row Revenue CAGR Adj. EBITDA margin Adj. EBIT margin Net leverage 25-30% 25-30% 15-20% 2-3x Source: Group information Copyright © 2022 Media and Games Invest SE. All Rights Reserved. 48
Slide 49: Vision 2025
G Media and Games Invest @ 10. Vision 2025
Slide 50: Vision 2025: MGI's Four Pillars For Further Growth
Vision 2025: MGI’s Four Pillars For Further Growth Our iron base for exceptional growth and for reaching our Vision 2025 4 Leveraging platform synergies and Platform network effects via our flywheel synergies 3 Focus on ad-tech and mobile content Synergetic M&A M&A Further complete full-stack ad-tec
Slide 51: Vision 2025: Let the MGI Flywheel Spin
Vision 2025: Let the MGI Flywheel Spin The network effect based on MGI’s unique synergetic setup leads to accelerating the flywheel Porting IP‘s to other platforms Investing in open source Focus on ATOM Strategic opportunity: White Label Ad-Software platform for Games and Non-Games companies Copyri
Slide 52: Headlines Vision 2025
Headlines Vision BEING ONE OF THE MOST DESIRED GLOBAL COMPANIES TO WORK FOR 2025 embracing diversity, global, no politics, professional, engaged, innovative, strong drive A clear commitment of the board BECOMING ONE OF THE TOP 5 WORLDWIDE LEADING and top management of MGI AD-SOFTWARE PLATFORMS trans
Slide 53: Thank You.
Thank You. www.mgi-se.com 53
Media and Games Invest — Investor Presentation (2022) on 6ix