Deezer Sa · EURONEXT:DEEZR
Deezer Sa — Shareholder Meeting (May 2023)
76 slides from Deezer Sa's shareholder meeting presentation, May 31, 2023
Slide 1: Annual General Meeting
Annual General Meeting 31 May 2023
Slide 2: Disclaimer
Déclarations Prospectives 2 Disclaimer This presentation is for information only and does not purport to contain comprehensive or complete information about Deezer. Generally, certain values presented in this document are rounded. As a result, total amounts and percentages do not necessarily equal t
Slide 3: Agenda
3 Agenda 1 Opening of the Meeting Iris Knobloch – Chair of the Board of Directors 2 2022 Key Highlights Jeronimo Folgueira – Chief Executive Officer 3 2022 Results and Q1 2023 Revenue Stéphane Rougeot – Deputy CEO and Chief Financial Officer 4 2023 Priorities and Outlook Jeronimo Folgueira – Chief E
Slide 4: Opening of the Meeting
01 Opening of the Meeting Iris Knobloch Chair of the Board of Directors Aline Cardin Secretary of the Meeting
Slide 5: 2022 Key Highlights
02 2022 Key Highlights Jeronimo Folgueira Chief Executive Officer
Slide 6: 2022 Execution of Deezer Strategy
6 2022 Execution of Deezer Strategy 6 +14% +23% Successful B2C refocus B2C ARPU LTV/SAC1 +12% 20.6% Profitable B2B expansion B2B ARPU Adj. Gross Margin (+0.9pt YoY) +13% All segments and geographies Strong revenue growth Total revenue growing double digits Adj. EBITDA loss reduced by €9m Significant
Slide 7: Initiatives for Further Profitable Growth
7 Initiatives for Further Profitable Growth 7 New features launched in 2022 New product vision 2023 roadmap focused on differentiation and monetization B2B expansion in new geographies & segments New partnerships in US & Italy Soft launch of Zen in December 2022 New Verticals development Full commer
Slide 8: Significant Improvement of B2C Economics
Significant Improvement of B2C Economics 8 Successful Price Increase Marketing Focus Improved Roll-out + on Key Markets Economics 0.1pt decrease in Churn1 YoY in FY22 94% €52m 34% €35m 16% +23% LTV/SAC4 YoY 66% 84% 11% Dec-21 Dec-22 2021A 2022A FR, BR, DE RoW % B2C Subscribers2 with new prices B2C M
Slide 9: Driving Differentiation Through Music Experiences
Driving Differentiation Through Music Experiences 9 Exclusives Live & VoD Experiences Music Discovery Livestream major concerts & performances New look Deezer Sessions X recorded in Paris HQ studio In app VOD Strong track record in Unique discovering formats upcoming superstars Unique fan Exclusive
Slide 10: B2B Expansion in New Markets & Segments
10 B2B Expansion in New Markets & Segments 10 Development across attractive markets and Supported by differentiated value proposition new segments for partners Western Europe North America Music Streaming Toolkits (API/SDK1) allowing speedy integration ✔ to partners platforms Product evolution to mu
Slide 11: Long-Term Partnership with Sonos
11 Long-Term Partnership with Sonos 11 ” DEEZER ENTERS LONG-TERM PARTNERSHIP WITH SONOS TO POWER CONTENT FOR SONOS RADIO WORLDWIDE February 2023 Hardware ” 1st Major Highly recognized 16 countries Deezer provides Deezer to support commercial brand present in worldwide key services for expansion of S
Slide 12: Strategy is Paying Off
12 Strategy is Paying Off 12 B2C B2B +12% +10% +€31m Revenue Revenue Group Adj. Gross Profit YoY YoY after Marketing vs. FY21 +14% +12% +7pt ARPU ARPU % margin vs. FY21 YoY YoY
Slide 13: More Differentiation & Monetization to Come
13 More Differentiation & Monetization to Come 13 Lyrics translation April 2022 Communities 2023 Priorities Enable users to live music +25% Lyrics display experiences together Listen Collect Humming Discover September 2022 +12% Enable artists to monetize Songcatcher their content & connect penetrati
Slide 14: Tech Services Launch
14 Tech Services Launch 14 AI for Audio Augmented Cataloguing Recommendations Boost audio with AI and machine learning From metadata enrichment to cluster detection Understand user behaviors and recommend Spleeter Radar User journeys Source Separation Audio Fingerprinting & clusters Identify similar
Slide 15: New Verticals to Improve Profitability
15 New Verticals to Improve Profitability 15 First product launched in 2022 Attractive economics at scale First holistic mind & body experience Fixed one off content production costs Exclusive content on sleep, relaxation, personal development, yoga, already incurred nutrition, fitness Limited marke
Slide 16: 2022 Results and Q1 2023 Revenue
03 2022 Results and Q1 2023 Revenue Stéphane Rougeot Deputy CEO and Chief Financial Officer
Slide 17: Double-Digit Revenue Growth across all Segments
17 Double-Digit Revenue Growth across all Segments In €m +12.8% +12.8% 451.2 451.2 400.0 15.5 400.0 +56.0% 9.9 178.0 +13.1% Other 157.4 317.2 RoW B2C +12.2% 282.7 France B2B +12.6% 273.2 242.6 +10.4% 118.5 107.4 FY 2021 FY 2022 FY 2021 FY 2022 → B2C: Double-digit growth driven by price increases and
Slide 18: Adjusted Gross Profit up +16.5% in 2022
Adjusted Gross Profit up +16.5% in 2022 18 +0.7% In €m 98.0 21.7% +16.5% B2C % margin 21.0% 84.1 → Adj. Gross Profit +8.5% YoY → Strong revenue growth (+12.2%) partly offset by increased publishing rates B2C B2B +8.5% 76.5 24.1% B2B 24.9% 70.5 → Adj. Gross Profit +15.5% YoY Other → Double-digit reve
Slide 19: Adj. Gross Profit after Marketing multiplied by ~4x
19 Adj. Gross Profit after Marketing multiplied by ~4x In €m +€30.7m 41.5 9.2% B2C B2C → Significant optimization of marketing expenses B2B reflecting refocus on selected key countries Other 16.8 → France, Brazil and Germany representing ~84% of 2 B2C marketing expenses in 2022 (vs. ~66% in 13.9 202
Slide 20: Fixed Costs Impacted by One-Offs and Scope
20 Fixed Costs Impacted by One-Offs and Scope + €12.6m / +2.8pt In €m 97.5 Expenses incurred in 2022 not like for like with 2021 level 84.9 7.6 5.0 → Travel and HQ costs post-COVID 78.6 75.4 6.3 3.2 Increased fixed costs → Exceptional salary increase implemented in 2022 → Limited core G&A increase O
Slide 21: Significantly Improved Adjusted EBITDA Loss
21 Significantly Improved Adjusted EBITDA Loss In €m +€18.3m % revenue (16.2)% (64.6) (12.4)% (10.3)% 10.6 (55.7) 5.0 one-offs (46.4) (9.4) (5.0) 17.1 (9.5) 1 Adj. Revenue impact Impact from Marketing Staff & Adj. EBITDA Scope Adj. EBITDA EBITDA at constant change in expenses G&A costs ex. Scope FY2
Slide 22: Cash Position at end-December 2022
22 Cash Position at end-December 2022 Free cash flow of €(43.6)m in FY 2022 In €m (55.7) 113.6 24.4 (3.0) (6.1) (3.1) 122.1 35.1 Cash Position Fundraising net Adj. EBITDA Δ Working Capex Leases 1 Other Cash Position Dec-21 proceeds FY22 Capital Dec-22 (1) Including repayment of lease liabilities and
Slide 23: Revenue growth of +6.5% in Q1 2023
Revenue growth of +6.5% in Q1 2023 23 In €m +6.5% 115.2 +6.5% 115.2 108.2 108.2 2.6 (32.2)% 3.9 +3.3% 45.0 43.6 Other B2C +7.2% 81.7 RoW 76.3 France B2B 64.6 +8.6% 70.2 +9.8% 30.8 28.1 Q1 2022 Q1 2023 Q1 2022 Q1 2023 → B2C: Continued subscriber growth in France and further increased ARPU → France: C
Slide 24: 2023 Priorities and Outlook
04 2023 Priorities and Outlook Jeronimo Folgueira Chief Executive Officer
Slide 25: 2023 Priorities and Outlook
2023 Priorities and Outlook 25 Continued Execution of our Profitable Growth Strategy New feature development in the product to fuel differentiation and further monetization Further acceleration of profitable B2B expansion on the back of recently announced partnerships such as Sonos (US), RTL (German
Slide 26: Long-Term Outlook
Long-Term Outlook 26 Positive cash flow1 in 2024 Positive adjusted EBITDA in 2025 Double-digit annual revenue growth over the period (1) Cash flow pre-funding.
Slide 27: Governance and Compensation
05 Governance and Compensation Sophie Guieysse Chair of the Nomination and Remuneration Committee
Slide 28: Statutory Auditors' Reports
06 Statutory Auditors’ Reports Frédéric Martineau EY (Ernst & Young Audit)
Slide 29: Statutory Auditors' Reports
Statutory Auditors’ Reports 29 Ordinary General Meeting → Report on the financial statements (1st resolution) → Report on the consolidated financial statements (2nd resolution) → Special report on the regulated agreements (4th to 8th resolutions) Extraordinary General Meeting → 8 special reports on
Slide 30: Report on the Financial Statements
Report on the Financial Statements 30 Pages 220 to 224 of the 2022 Universal Registration Document Key audit matters → Assessment of the cost of music rights and right holders’ liabilities, → Recognition of indirect sales from B2B contracts with a guaranteed minimum clause, and → Accounting and asse
Slide 31: Report on the Consolidated Financial Statements
Report on the Consolidated Financial 31 Statements Pages 192 to 195 of the 2022 Universal Registration Document Key audit matters → Assessment of the cost of revenue and right holders’ liabilities → Recognition of indirect sales from B2B contracts with a guaranteed minimum clause In our opinion, the
Slide 32: Special Report on the Regulated Agreements
Special Report on the Regulated Agreements 32 Pages 129 to 132 of the 2022 Universal Registration Document Agreements approved and concluded during the past financial year → Management agreement concluded between Deezer S.A. and Mr. Jeronimo Folgueira on July 5th, 2022 → Amendments to the license ag
Slide 33: Special Reports on Financial Delegations
Special Reports on Financial Delegations 33 Authorizations to be granted to the Board of Directors Authorization to reduce the share capital by canceling shares in connection with the authorization for 21th resolution the Company to purchase its own shares Overall delegation to issue shares and/or o
Slide 34: Questions and Answers
07 Questions and Answers Iris Knobloch Chair of the Board of Directors
Slide 35: Presentation and Vote of Resolutions
08 Presentation and Vote of Resolutions Aline Cardin Secrétaire de Séance
Slide 36: Ordinary General Meeting: 1st Resolution
36 Ordinary General Meeting 36 1st Resolution: Approval of the statutory financial statements for the fiscal year ended December 31, 2022
Slide 37: Ordinary General Meeting: 2nd Resolution
37 Ordinary General Meeting 37 2nd Resolution: Approval of the consolidated financial statements for the fiscal year ended December 31, 2022
Slide 38: Ordinary General Meeting: 3rd Resolution
38 Ordinary General Meeting 38 3rd Resolution: Allocation of the results for the fiscal year ended December 31, 2022
Slide 39: Ordinary General Meeting: 4th Resolution
39 Ordinary General Meeting 39 4th Resolution: Approval of the management agreement entered into between the Company and Mr. Jeronimo Folgueira on July 5, 2022 (agreement referred to in Article L. 225-38 of the French Commercial Code)
Slide 40: Ordinary General Meeting: 5th Resolution
40 Ordinary General Meeting 40 5th Resolution: Ratification of the amendments to the License Agreement entered into between Deezer S.A. and Rotana Audio Visual LLC on February 25, 2022, and April 1, 2022 (agreements referred to in Article L. 225-38 of the French Commercial Code) Shareholder concerne
Slide 41: Ordinary General Meeting: 6th Resolution
41 Ordinary General Meeting 41 6th Resolution: Approval of the company support agreement entered into between Deezer S.A. and certain of its shareholders on April 18, 2022 (agreement referred to in Article L. 225-38 of the French Commercial Code) Persons and shareholders concerned: Main shareholders
Slide 42: Ordinary General Meeting: 7th Resolution
42 Ordinary General Meeting 42 7th Resolution: Approval of the agreements entered into between Deezer S.A. and AI European Holdings Sàrl (agreements referred to in Article L. 225-38 of the French Commercial Code) Shareholder concerned: Al European Holdings Sàrl. Nature, purpose, terms and reasons: -
Slide 43: Ordinary General Meeting: 8th Resolution
43 Ordinary General Meeting 43 8th Resolution: Approval of the consultant agreement entered into between the Company and Dirgni Development AB on March 29, 2023 (agreement referred to in Article L. 225-38 of the French Commercial Code) Persons concerned: Ms. Ingrid Bojner, member of the Board of Dir
Slide 44: Ordinary General Meeting: 9th Resolution
44 Ordinary General Meeting 44 9th Resolution: Ratification of the provisional appointment of Mr. Mark Simonian as a director of the Company, as decided by the Board of Directors on December 13, 2022
Slide 45: Ordinary General Meeting: 10th Resolution
45 Ordinary General Meeting 45 10th Resolution: Ratification of the provisional appointment of Ms. Ingrid Bojner as a director of the Company, as decided by the Board of Directors on December 13, 2022
Slide 46: Ordinary General Meeting: 11th Resolution
46 Ordinary General Meeting 46 11th Resolution: Ratification of the provisional appointment of Mr. Stuart Bergen as a director of the Company, as decided by the Board of Directors on February 28, 2023
Slide 47: Ordinary General Meeting: 12th Resolution
47 Ordinary General Meeting 47 12th Resolution: Vote on the information relating to 2022 compensation of corporate officers (excluding executive corporate officers) referred to in Article L. 22-10-9 of the French Commercial Code (ex-post vote)
Slide 48: Ordinary General Meeting: 13th Resolution
48 Ordinary General Meeting 48 13th Resolution: Approval of the compensation (fixed, variable, and exceptional components) and benefits of any kind paid during, or awarded in respect of, the fiscal year ended December 31, 2022, to Ms. Iris Knobloch, Chair and Chief Executive Officer of I2PO S.A. fro
Slide 49: Ordinary General Meeting: 14th Resolution
49 Ordinary General Meeting 49 14th Resolution: Approval of the compensation (fixed, variable, and exceptional components) and benefits of any kind paid during, or awarded in respect of, the fiscal year ended December 31, 2022, to Mr. Guillaume d'Hauteville, Chair of the Board of Directors of the Co
Slide 50: Ordinary General Meeting: 15th Resolution
50 Ordinary General Meeting 50 15th Resolution: Approval of the compensation (fixed, variable, and exceptional components) and benefits of any kind paid during, or awarded in respect of, the fiscal year ended December 31, 2022, to Mr. Jeronimo Folgueira, Chief Executive Officer of the Company as of
Slide 51: Assemblée Générale Ordinaire: 16th Resolution
51 Assemblée Générale Ordinaire 51 16th Resolution: Approval of the 2023 compensation policy for corporate officers (excluding executive corporate officers) (ex-ante vote)
Slide 52: Ordinary General Meeting: 17th Resolution
52 Ordinary General Meeting 52 17th Resolution: Approval of the 2023 compensation policy for the Chair of the Board of Directors (ex-ante vote)
Slide 53: Ordinary General Meeting: 18th Resolution
53 Ordinary General Meeting 53 18th Resolution: Approval of the 2023 compensation policy for the Directeur général (ex-ante vote)
Slide 54: Ordinary General Meeting: 19th Resolution
54 Ordinary General Meeting 54 19th Resolution: Determination of total compensation allocated to the directors for 2023 and subsequent fiscal years
Slide 55: Ordinary General Meeting: 20th Resolution
55 Ordinary General Meeting 55 20th Resolution: Authorization for the Board of Directors to purchase the Company's shares
Slide 56: Extraordinary General Meeting: 21st Resolution
56 Extraordinary General Meeting 56 21st Resolution: Authorization to the Board of Directors to reduce the share capital by canceling shares in connection with the authorization for the Company to purchase its own shares
Slide 57: Extraordinary General Meeting: 22nd Resolution
57 Extraordinary General Meeting 57 22nd Resolution: Delegation of authority to the Board of Directors to increase the share capital immediately, or in the future, by issuance of ordinary shares and/or securities, with shareholders' preferential subscription right
Slide 58: Extraordinary General Meeting: 23rd Resolution
58 Extraordinary General Meeting 58 23rd Resolution: Delegation of authority to the Board of Directors to increase the share capital, immediately or in the future, by issuance of ordinary shares and/or securities, with cancellation of shareholders' preferential subscription right and public offer (o
Slide 59: Extraordinary General Meeting: 24th Resolution
59 Extraordinary General Meeting 59 24th Resolution: Delegation of authority to the Board of Directors to increase the share capital, immediately or in the future, by issuance of ordinary shares and/or securities, with cancellation of shareholders' preferential subscription right, to be issued in co
Slide 60: Extraordinary General Meeting: 25th Resolution
60 Extraordinary General Meeting 60 25th Resolution: Authorization to the Board of Directors, in the event of an issuance of shares and/or securities, with cancellation of shareholders' preferential subscription right, to set the share price within the limit of 10% of the share capital and within th
Slide 61: Extraordinary General Meeting: 26th Resolution
61 Extraordinary General Meeting 61 26th Resolution: Delegation of authority to the Board of Directors to decide on the issuance of shares and/or securities, with cancellation of shareholders’ preferential right, in consideration of contributions in kind of equity shares or securities giving access
Slide 62: Extraordinary General Meeting: 27th Resolution
62 Extraordinary General Meeting 62 27th Resolution: Delegation of authority to the Board of Directors to issue ordinary shares and securities giving access to the Company’s share capital, in the event of a public tender offer comprising an exchange component initiated by the Company
Slide 63: Extraordinary General Meeting: 28th Resolution
63 Extraordinary General Meeting 63 28th Resolution: Delegation of authority to the Board of Directors to increase the share capital by issuance of ordinary shares and/or any securities, with cancellation of shareholders' preferential subscription right for the benefit of a category of persons meeti
Slide 64: Extraordinary General Meeting: 29th Resolution
64 Extraordinary General Meeting 64 29th Resolution: Delegation of authority to the Board of Directors to increase the share capital by issuance of ordinary shares and/or any securities, with cancellation of shareholders' preferential subscription right for the benefit of a category of persons meeti
Slide 65: Extraordinary General Meeting: 30th Resolution
65 Extraordinary General Meeting 65 30th Resolution: Delegation of authority to the Board of Directors to increase the number of shares to be issued in the event of a capital increase with or without cancellation of shareholders' preferential subscription right
Slide 66: Extraordinary General Meeting: 31st Resolution
66 Extraordinary General Meeting 66 31st Resolution: Determination of the global ceiling for issuances carried out by virtue of delegations to increase the share capital to be granted under the above resolutions
Slide 67: Extraordinary General Meeting: 32nd Resolution
67 Extraordinary General Meeting 67 32rd Resolution: Delegation of authority to the Board of Directors to increase the share capital by incorporation of premiums, reserves, profits and other items
Slide 68: Extraordinary General Meeting: 33rd Resolution
68 Extraordinary General Meeting 68 33rd Resolution: Authorization to the Board of Directors to grant free shares of the Company, pursuant to Articles L. 225-197-1 et seq. of the French Commercial Code, to corporate officers and employees of the Company and its subsidiaries, with cancellation of sha
Slide 69: Extraordinary General Meeting: 34th Resolution
69 Extraordinary General Meeting 69 34th Resolution: Authorization to the Board of Directors to grant stock options to eligible employees or corporate officers of the Company and/or related companies pursuant to Articles L. 225-177 et seq. of the French Commercial Code, with cancellation of sharehol
Slide 70: Extraordinary General Meeting: 35th Resolution
70 Extraordinary General Meeting 70 35th Resolution: Delegation of authority to the Board of Directors to issue and grant equity warrants for the benefit of a category of persons meeting specified characteristics (members and observers of the Board of Directors and consultants)
Slide 71: Extraordinary General Meeting: 36th Resolution
71 Extraordinary General Meeting 71 36th Resolution: Determination of global cap for issuances carried out by virtue of the authorizations to grant stock options and free shares, and of the delegation to issue equity warrants
Slide 72: Extraordinary General Meeting: 37th Resolution
72 Extraordinary General Meeting 72 37th Resolution: Delegation of authority to the Board of Directors to carry out share capital increases by issuance of ordinary shares or other securities giving immediate, or future, access to the Company's share capital, reserved for members of a company's savin
Slide 73: Extraordinary General Meeting: 38th Resolution
73 Extraordinary General Meeting 73 38th Resolution: Amendments to the bylaws (purely technical modifications to remove statutory references no longer relevant)
Slide 74: Ordinary General Meeting: 39th Resolution
74 Ordinary General Meeting 74 39th Resolution: Powers for legal formalities
Slide 75: Closing of the Meeting
09 Closing of the Meeting Iris Knobloch Chair of the Board of Directors
Slide 76: Annual General Meeting
Annual General Meeting 31 May 2023