Verve Group Se Class A · OMXSTO:VER
Verve Group Se Class A — Media and Games Invest — Q4 2022 Earnings Presentation
39 slides from Verve Group Se Class A's earnings presentation, 2023
Slide 1: MGI - Media and Games Invest SE Year-End-Report Q4 2022
MGI - Media and Games Invest SE Year-End-Report Q4 2022
Slide 2: Agenda
AGENDA Introduction Our Market – Programmatic Advertising Our Mission – Make Advertising Better Our Growth Drivers Financials
Slide 3: Key Facts
LEADING AD-SOFTWARE-PLATFORM WITH STRONG FIRST-PARTY GAMES CONTENT KEY FACTS €324M +800 Employees1 Revenue FY22 Remco Westermann CEO & Member of the Board since 2012 80% Ad-software revenues Holdings in MGI: 41,872,370 shares (26.2%) €93M 20% Consumer games revenues Adj. EBITDA FY22 +550 Software Cl
Slide 4: Major Events During Q4 2022
Major Events During Q4 2022 Broad range of initiatives facilitating strong revenue growth in the fourth quarter of 2022 16% REVENUE GROWTH IN Q4 SALE OF EG7 STAKE AS PART RELOCATION TO SWEDEN LARGELY ORGANICALLY OF STRATEGIC REFOCUS COMPLETED MATCH2ONE STORE +100 NEW CASUAL GAMES 75M SECURITIZATION
Slide 5: Taking Responsibility And Laying The Foundation For Further Growth
Taking Responsibility And Laying The Foundation For Further Growth Our consistent efforts on all ESG aspects are being recognized resulting in a strong rating improvement MSCI ESG RATING E S G AAA AA A Carbon neutrality Gender balance Relocation of seat to Sweden MGI achieved carbon neutrality for 2
Slide 6: Our Market – Programmatic Advertising
OUR MARKET – PROGRAMMATIC ADVERTISING
Slide 7: The Importance of Programmatic Advertising
The Importance of Programmatic Advertising The Importance of Advertising Programmatic Advertising The engine for consumer spending The turbo engine for consumer spending PUBLISHER Promote products, services and ideas to ADVERTISER potential customers and target groups NON-PROGRAMMATIC Enable free co
Slide 8: Our Fast-Growing Market: Programmatic Advertising
Our Fast-Growing Market: Programmatic Advertising The advertising industry is massive and programmatic is the growth driver (USDm) 1.300 70% 1.190 1.200 1.133 1.068 Advertisers are shifting 1.100 988 65% DEMAND SIDE 1.000 AGENCY PLATFORM (DSP) 900 907 their budgets to 819 TRADING 61% 800 DESK 59% 72
Slide 9: How Does Programmatic Advertising Work?
How Does Programmatic Advertising Work? We automate the buying and selling of ads on all digital devices PUBLISHER / ADVERTISER / BRANDS END CONSUMER DooH $ 0,9 “Matching fully automated the right brands to the right audience in „BBC“ $ 1,0 milliseconds” „Sports“ „Champions League“ Ad Bids MGI Deman
Slide 10: How Monetization Works in Programmatic Advertising
How Monetization Works in Programmatic Advertising We earn money in all three steps of the programmatic value chain ADVERTISER / BRANDS OUR TECHNOLOGY PUBLISHER USERS DEMAND-SIDE DATA SUPPLY-SIDE Connecting Enriching data and Connecting publisher advertiser to the matching advertiser and (and the us
Slide 11: The Lack of Transparency
The Lack of Transparency Behind the scenes, the market is highly fragmented with many players in the value chain AD-TECH VALUE CHAIN AGENCY AGENCY TRADING DESKS P TRADING SSPs DESKS DSPs EXHANGES U AGENCIES B B VERTICAL / CUSTOM R L CREATIVE A OPTIMI- MEDIA SHARING DATA I ZATION / SOCIAL PLANNING TA
Slide 12: Our Mission – Make Advertising Better
OUR MISSION – MAKE ADVERTISING BETTER
Slide 13: MGI's Mission
MGI’s Mission We want to make the advertising world a better space MAKE ADVERTISING BETTER MGI operates a fast growing, integrated ad-software platform that matches global advertiser demand with publisher ad-supply while improving results via data. 13
Slide 14: Our Mission in Practice: Integrated Solution
Our Mission in Practice: Integrated Solution There are too many layers between brands and the consumer Management Ad serving costs1 10-30% costs1 10-30% Fragmented Demand Side Tech Stack Platform Data Solutions Ad Exchange Supply Side Platform Consolidated Brand Tech Stack Consumer MGI’s one-stop-sh
Slide 15: Our Mission in Practice: Solving the 80% Problem
Our Mission in Practice: Solving the 80% Problem Deprecation of identifiers: 80% of audiences is unidentified 2022 and 2023 and Before Beyond Opt-Out Opt-In Targeting based on PII Targeting based on PII without active consent only with active consent 80%+ of audience will be unidentified e.g. EMAIL,
Slide 16: Our Mission in Practice: Data For Targeting the 80%
Our Mission in Practice: Data For Targeting the 80% Unique Data Solutions to Solve the 80% Problem First-Party Opt-In Data Contextual Data from +1bn own registered gamers Data via crawling websites and apps Data available for targeting Data available for targeting • E-mail address • Location • Devic
Slide 17: Our Mission in Practice: Scale Globally to Make Advertising Better
Our Mission in Practice: Scale Globally to Make Advertising Better Advertising is a global business; more countries and more reach drive efficiency +20 offices worldwide 2 billion end-consumers monthly 1.7+ billion of ad impressions viewed daily 17
Slide 18: MGI is Working with Leading Advertisers and Publishers
MGI is Working with Leading Advertisers and Publishers Based on our integrated platform large as well as small customers are being served Advertisers Publishers TIER ONE ADVERTISING CLIENTS LEADING DIGITAL PUBLISHING CLIENTS … top advertisers and top publishers driving Innovation making advertising
Slide 19: MGI is Particularly Strong in Mobile
MGI is Particularly Strong in Mobile Software integrations with chart-topping own- and third-party games Blockudoku®: block puzzle game Hair Challenge Easybrain Rollic Games 10M downloads 100M downloads Colorscapes - Color by Number Pixel Art: color by number Fuero Games Easybrain 10M downloads 100M
Slide 20: MGI is a Leading Global Player
MGI is a Leading Global Player In less then four years we have via M&A and organic invests build a leading position Becoming one of the leading larger players in the open internet in less then four years Top 5 One of the largest mobile in-app exchange worldwide (top five) In-app mobile exchange One
Slide 21: Our Growth Drivers
G Media and Games Invest OUR GROWTH DRIVERS @
Slide 22: Multiple Growth Drivers
Multiple Growth Drivers Building a programmatic powerhouse „Verve Group“ Accretive acquisitions in 2022: We are innovators: Cost Efficiency Drive profitability through cost efficiency M&A Expanding the Tech Stack Exciting new and Scaling Business partners in 2022: through Value-accretive Acquisition
Slide 23: Driving Growth and Profitability via Innovation
Driving Growth and Profitability via Innovation CTV ATOM RETARGETING Innovative extension of our SDK, Unlocking previously untapped generating profiles on mobile games console audiences for device without privacy data re-engagement on Connected leaving the device maximizing TV (CTV). An example for
Slide 24: Driving Growth and Profitability via Buy. Integrate. Build & Improve
Driving Growth and Profitability via BUY. INTEGRATE. BUILD & IMPROVE Focus on organic growth but keeping our eyes open for accretive targets at attractive price points Buy Integrate Build and Improve Priority: Priority: Further Integration and synergy Focus on organic growth realisation Cost efficie
Slide 25: Driving Growth and Profitability via Fly Wheel Effects
Driving Growth and Profitability via Fly Wheel Effects Scaling MGI‘s Ad-Software Platform via Customers, Technology and Data Serving more relevant ads to users More Critical Mass More Access to Data DSP +5,000 gamigo Games SSP +20,000 More Publishers Mobile Direct App More Advertisers Desktop Integr
Slide 26: Financials
G Media and Games Invest G FINANCIALS
Slide 27: Key Financials
Key Financials Q4 2022 FY 2022 +16% YoY 64% CAGR 88 93 324 80 78 66 252 140 84 45 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2018A 2019A 2020A 2021A 2022A €93M 16% €324M 29% Revenue Revenue Growth Revenue Revenue Growth €32M 13% €93M 18% Adj. EBITDA Organic Revenue Adj. EBITDA Organic Revenue Growth Co
Slide 28: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights Strong Profitability and Cash Generation Q4 2022 Net Revenues Adj. EBITDA Adj. EBIT Margin Growth 93 35% 45% 100 88 16% YoY Adj. EBITDA Growth Adj. EBIT Growth 90 80 78 Revenue Growth 80 66 Margin % 70 60 34% 30% 50 40 Adj. EBITDA margin Adj. EBIT margin 32 28 23
Slide 29: Consistent Long-Term Financial Development
Consistent Long-Term Financial Development Highly scalable and profitable business model with strong organic growth EURm1,2 CAGR 64%3 18% Organic Revenue Growth4 324 (adjusted EBITDA) 252 30% 29% 140 28% 25% 22% 21% 20% 93 18% 84 77 71 55 10% 39 42 45 22 29 15 11 13 18 10 18 2 4 7 2 7 2014A 2015A 20
Slide 30: MGI – Segment Performance
MGI – Segment Performance Demand-Side Segment Supply-Side Segment (EURm) (EURm) +41% +13% 10.3 82.6 72.9 7.3 3.7 27.9 21.5 36% 1.7 34% 30% 24% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Revenues Adj. EBITDA Margin Revenues Adj. EBITDA Margin Demand-Side outgrowing Supply-Side by ca. 3x following Solid organic
Slide 31: Strong Customer Growth Drives Overall Growth
Strong Customer Growth Drives Overall Growth The KPIs driving our top-line growth Despite headwinds Share of Group Revenue5 Ad Impressions sustainable growth 20% Ad impressions delivered (in bn) 173 172 181 35% 31% 156 161 56% 135 Consumer6 Software 80% 69% 59 65% 37 44 44% 15 17 22 2019 2020 2021 2
Slide 32: Operating Cash Flow and Cash Conversion
Operating Cash Flow and Cash Conversion Increasing cash flow from operations, more investments in organic growth Operating cash flow development1,2,3 Cash conversion analysis5 (EURm) 134 Operating Cash Flow Free Cash Flow after Interest Expenses 23 Cash Interest Expenses 135% EUR 48m receivable fina
Slide 33: Net Working Capital Development
Net Working Capital Development Reduced net working capital leads to cash flow improvements Net working capital development (EURm) 20% • Installment of up to EUR 75m Securitization program with cost of funds2 + 1.55% enables true 103 sale of receivables on a non- 5% 3% -1% 50 1% recourse basis -5% -
Slide 34: Investments Leading To Strong Organic Growth
Investments Leading To Strong Organic Growth More investments in organic growth and larger acquisitions Total Capex / Investment Cash Flow Capex development2 Commentary (EURm) (EURm) Considerable reduction expansion capex (40%) in Less M&A leads to reduced • Investments in… Expansion Capex 2022 comp
Slide 35: Net Leverage and Interest Coverage Ratio
Net Leverage and Interest Coverage Ratio Constantly deleveraging in the last quarters Net debt to adj. EBITDA ratio development1 Interest Coverage Ratio development1 (EURm) (EURm) Incl. pro-forma sale of EG7 shares 307 93 299 Net leverage Interest Coverage Ratio 274 85 Net Interest Bearing Debt Adj.
Slide 36: The MGI Balance Sheet
The MGI Balance Sheet Strong balance sheet with high cash position to navigate the cycle Balance Sheet as of December 31, 2022 (EURm) 1.045 1.045 Intangible Assets • Impairment tests done by EY on a regular basis with 322 Total Equity solid Headroom. • One-time amortization in Q4’22 amounting to Of
Slide 37: Revenues and EBITDA at Top End of Guidance
REVENUES AND EBITDA AT TOP END OF GUIDANCE First FYGuidance 2021 2022 Guidance Second 2022 Guidance 2022 2022A Revenue Revenue 290 – 3101 252 290 – 3101 315 – 325 324 (in (in€m) €m) Growth Growth 80% 15-23% 15-23%25-29% 29% Adj. Adj.EBITDA EBITDA 71 80 – 90 80 – 9083 – 93 93 (in (in€m) €m) Growth Gr
Slide 38: 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 ar
Slide 39: Thank You.
Thank You. www.mgi-se.com 39
Media and Games Invest — Q4 2022 Earnings Presentation on 6ix