Azerion publishes Interim Unaudited Financial Results Q3 2024 and
Year to Date Q3 2024
Robust Platform performance driving growth
Highlights of Q3 2024
In Q3 2024 we have not only increased our revenues but also
continued to improve and develop our portfolio of clients,
technologies and partnerships;
- Increased
client spend generated € 124.8 million of revenues, up
22.6% Year on Year.
- Signed 115
new publishers and connected 4 additional
SSPs and 6 DSPs to expand our digital audiences across
Europe and the Americas.
- Continued
delivery on the product roadmap including
expanding our CTV, DOOH and Audio advertising
offering for brands and publishers whilst enhancing
brand safety and control across the Platform.
- Launch of
Azerion Podcast Hosting Platform and Audio
Adserver, unlocking additional revenue streams in the fast
growing digital audio advertising segment.
- Entered a
new partnership with Captify in July to accelerate the
power of Search Intelligence, accelerating buyers’ access to
audiences derived from open web search data and empowering brands
with cookieless activation in France and Italy.
- Successfully
completed the placement of additional bonds for an amount
of € 50 million under Azerion’s existing Senior
Secured Callable Floating Rate Bond framework of € 300
million.
Post Q3 2024 Highlights
Increasingly favourable market conditions for partnerships and
acquisitions provide opportunities for Azerion to continue its
growth into 2025.
- We announced
the acquisition of Goldbach Austria GmbH in November, one
of the foremost digital and linear advertising brokers in the DACH
region. Goldbach’s expertise in DOOH, linear TV, CTV, and display
advertising will amplify Azerion’s offerings across the DACH
region. Completion of the transaction is subject to regulatory
approval by the Austrian Federal Competition Authority. In the 12
months ended September 2024, Goldbach Austria generated advertising
revenue of approximately € 26 million.
- We have
built a strong pipeline of actionable partnership and acquisition
opportunities. In this context, Azerion has mandated
Pareto Securities AB and Arctic Securities AB to conduct a series
of fixed-income investor meetings and subject to, inter alia,
market conditions a subsequent bond issue may follow
utilising some or all of the capacity available of up to € 85
million out of the Company’s already existing Senior Secured
Callable Floating Rate Bond framework of € 300 million
with ISIN NO0013017657.
Selected KPIs
Financial Results - Azerion Group N.V.
in millions of €
|
|
Q3 2024 |
Q3 2023 |
Growth |
YTD 2024 |
YTD 2023 |
Growth |
|
|
|
|
|
|
|
|
|
Platform Segment |
|
|
|
|
|
|
|
Advertising Platform |
92.4 |
73.3 |
26% |
286.0 |
222.6 |
29% |
|
AAA Game Distribution (e-commerce) |
18.5 |
17.5 |
6% |
58.1 |
57.1 |
2% |
|
Revenue |
110.9 |
90.8 |
22% |
344.1 |
279.7 |
23% |
|
Operating profit / (loss) |
(0.9) |
4.0 |
(123)% |
(8.9) |
(7.6) |
17% |
|
Adj. EBITDA |
13.1 |
13.5 |
(3)% |
36.2 |
30.4 |
19% |
|
|
|
|
|
|
|
|
|
Premium Games Segment1) |
|
|
|
|
|
|
|
Revenue |
13.9 |
17.7 |
(22)% |
39.1 |
63.5 |
(38)% |
|
Operating profit / (loss) |
1.0 |
73.3 |
(99)% |
(0.6) |
74.3 |
(101)% |
|
Adj EBITDA |
4.6 |
4.8 |
(4)% |
8.8 |
15.1 |
(42)% |
|
|
|
|
|
|
|
|
|
Group (excluding social card games) |
|
|
|
|
|
|
|
Revenue |
124.8 |
101.8 |
23% |
383.2 |
314.9 |
22% |
|
Operating profit / (loss) |
0.1 |
2.2 |
(96)% |
(9.5) |
(14.3) |
(34)% |
|
Adj. EBITDA |
17.7 |
16.2 |
9% |
45.0 |
35.8 |
26% |
|
|
|
|
|
|
|
|
|
Group (including social card games) |
|
|
|
|
|
|
|
Total Revenue |
124.8 |
108.5 |
15% |
383.2 |
343.2 |
12% |
|
Total Operating profit / (loss) |
0.1 |
77.3 |
(100)% |
(9.5) |
66.7 |
(114)% |
|
Total Adj. EBITDA |
17.7 |
18.3 |
(3)% |
45.0 |
45.5 |
(1)% |
1)2023 figures for Premium Games contain results of
the social cards game portfolio that was divested in Q3 2023. For
detailed split of Premium Games results please refer to respective
section below.
|
|
Q3 2024 |
Q3 2023 |
|
YTD 2024 |
YTD 2023 |
|
|
Adj. EBITDA Margin % |
|
|
|
|
|
|
|
Platform |
12% |
15% |
|
11% |
11% |
|
|
Premium Games |
33% |
27% |
|
23% |
24% |
|
|
Group (excluding social card games) |
14% |
16% |
|
12% |
11% |
|
|
Group |
14% |
17% |
|
12% |
13% |
|
Message from the CEO
"We are pleased with the performance of our business model
during Q3, with the Platform and Premium Games segments both
delivering revenue growth of over 20% compared to the same period
last year, excluding the divested social card games portfolio.
Importantly, we strengthened our local connections with advertisers
and publishers and delivered significant innovation through our
product and technology roadmap, developing new revenue streams and
enhancing our ability to reach targeted audiences at scale. We
invested further in our cookieless solutions through the
partnership with Captify, onboarding their sales teams in France
and Italy, whilst expanding our inventory in emerging channels such
as DOOH through the partnership with MyAdbooker. Earlier in
November, we announced the acquisition of Goldbach Austria GMBH,
opening new doors for growth, innovation, and impactful advertising
opportunities in Austria and advancing our strategic goals in the
wider DACH region.
With favourable market dynamics, we see increasing opportunities
to accelerate our growth through strategic partnerships and
acquisitions and have developed a strong pipeline of actionable
opportunities to execute on. We therefore intend to conduct a
series of investor meetings to explore further funding of those
opportunities through the debt markets."
- Umut Akpinar
Financial overview
Revenue
Q3 2024
Revenue for the quarter amounted to € 124.8 million, up 22.6%
from € 101.8 million in Q3 2023 excluding the social card games
portfolio divested in Q3 2023, mainly driven by higher advertising
spend across the Platform Segment, particularly in Direct Sales and
the integration of previous acquisitions. Revenue for the quarter
was up 15.0% from € 108.5 million in Q3 2023 including the revenue
from the social card games portfolio of € 6.7 million in Q3
2023.
YTD Q3 2024
Revenue for YTD Q3 2024 amounted to € 383.2 million, up 21.7%
from € 314.9 million in YTD Q3 2023 excluding the social card games
portfolio divested in Q3 2023, again mainly driven by higher
advertising spend across the Platform Segment, particularly in
Direct Sales and the integration of past acquisitions. Revenue was
up 11.7% from € 343.2 million in YTD Q3 2023 including the revenue
from the social card games portfolio of € 28.3 million YTD Q3
2023.
Earnings
Q3 2024
Adjusted EBITDA for the quarter was € 17.7 million compared to €
16.2 million in Q3 2023 excluding the divested social card games
portfolio, an increase of 9.3% mainly driven by improved
performance of Premium Games, specifically metaverse titles due to
the release of Habbo Hotel Origins and product development across
the social casino titles, and cost savings and efficiencies from
the integration of previous acquisitions. Adjusted EBITDA for Q3
2024 was down (3.3)% from € 18.3 million in Q3 2023 including the
contribution from the social card games portfolio of € 2.1 million
in Q3 2023.
The operating profit for the quarter amounted to € 0.1 million,
compared to a profit of € 2.2 million in Q3 2023 (excluding gain on
the sale and the result of the social card games portfolio of €
75.1 million), mainly due to a one-off increase in operating
expenses in Q3 2024 related to the renegotiation of contingent
consideration terms for one of the acquisitions (€ 2.9 million) and
a fair value gain on contingent consideration for previous
acquisitions in Q3 2023 (€ 2.0 million) that is absent in Q3 2024,
offset by the improved performance of Premium Games described
above, and cost savings and efficiencies from the integration of
previous acquisitions.
YTD Q3 2024
Adjusted EBITDA in YTD Q3 2023 was € 45.0 million compared to €
35.8 million in YTD Q3 2023 excluding the divested social card
games portfolio, an increase of 25.7% driven by higher advertising
spend across the Platform Segment and improved performance of
Premium Games, specifically metaverse titles due to the release of
Habbo Hotel Origins and product development across the social
casino titles, cost savings and efficiencies from the integration
of previous acquisitions and a gain on acquisition related
earn-outs of € 1.6 million. Adjusted EBITDA in YTD Q3 2024 was down
(1.1)% from € 45.5 million in YTD Q3 2023 including the
contribution from the social card games portfolio of € 9.7 million
in YTD Q3 2023.
The operating loss in YTD Q3 2023 amounted to € (9.5) million,
compared to a loss of € (14.3) million in YTD Q3 2023 (excluding
gain on the sale and the result of the social card games portfolio
of € 81.0 million), driven by increased Platform revenue and
contribution from Direct sales, improved performance of Premium
Games, specifically metaverse titles due to the release of Habbo
Hotel Origins and product development across the social casino
titles, efficiencies from optimisation and consolidation efforts,
and notwithstanding the one-off increase in operating expenses
related to the settlement of a commercial dispute and renegotiation
of contingent consideration terms for one of the acquisitions.
Cash flow
Q3 2024
Cash flow from operating activities in Q3 2024 was an outflow of
€ (11.4) million, mainly due to movements in net working capital
reflecting a decrease in trade and other payables of € (40.9)
million and a decrease in trade and other receivables of € 18.9
million, € (7.8) million paid on interest and € (0.8) paid in
income tax, partly offset by operating profit after adjustments.
Cash flow from investing activities was an inflow of € 2.0 million,
mainly due to the receipt of deferred consideration for the sale of
the social card games portfolio in amount of € 11.6 million, partly
offset by payments for intangible assets of € (4.3) million and net
cash outflow on acquisition of subsidiaries of € (5.2) million.
Cash flow from financing activities was an inflow of € 45.9
million, mainly due to net proceeds in the amount of € 48.2 million
(net of transaction costs) from additional bonds placed under the
existing Senior Secured Callable Floating Rate Bond framework
offset by repayments of external borrowings and the principal
portion of lease liabilities amounting in total to €
(2.3) million.
YTD Q3 2024
Cash flow from operating activities in YTD Q3 2024 was an
outflow of € (3.0) million, mainly due to movements in net working
capital reflecting a decrease in trade and other payables of €
(37.3) million and a decrease in trade and other receivables of €
27.4 million, € (18.3) million paid on interest and € (3.0) paid in
income tax, partly offset by operating profit after adjustments.
Cash flow from investing activities was an outflow of € (18.6)
million, mainly due payments for intangible assets of € (13.8)
million and net cash outflow on acquisition of subsidiaries of €
(16.0) million, partly offset by the receipt of net deferred
consideration for the sale of social card games portfolio in amount
of € 11.2 million. Cash flow from financing activities was an
inflow of € 49.4 million, mainly due to net proceeds from
borrowings of € 57.6 million offset by repayments of external
borrowings and the principal portion of lease liabilities amounting
in total to € (8.0) million.
Capex
Azerion capitalises development costs related to the internal
development of assets, a core activity to support innovation in its
platform. These costs primarily relate to developers’ time devoted
to the development of the platform, games and other new features.
In Q3 2024 Azerion capitalised € 3.8 million, equivalent to 14.3%
(Q3 2023: € 3.9 million, equivalent to 16.2%) of gross personnel
costs excluding restructuring provision expense. In YTD Q3 2024
Azerion capitalised € 11.4 million, equivalent to 15.0% (YTD Q3
2023: € 14.1 million, equivalent of 17.5%) of gross personnel costs
excluding restructuring provision expense.
Financial position and borrowing
Net interest-bearing debt*) amounted to € 177.7
million as at 30 September 2024, mainly comprising the outstanding
bond loan with a nominal value of € 215 million (part of a total €
300 million framework) and lease liabilities with a balance of €
17.1 million less the cash and cash equivalents position of € 68.3
million.
*)As defined in the Terms & Conditions of the
Senior Secured Callable Floating Rate Bonds ISIN: NO0013017657.
Please also refer to the Definitions section and the notes of this
Interim Report for more information.
Platform Segment
Our Platform segment includes our digital advertising
activities, AAA Game Distribution (formerly referred to as
e-commerce), Casual Game Distribution (being the operation and
distribution of casual games) and Azerion Sports. The Platform
segment generates Revenue mainly by displaying digital
advertisements in both game and general content, as well as selling
and distributing AAA games. Advertisers are serviced through two
models: i) Direct sales, which involve a direct engagement between
Azerion’s commercial teams and advertisers or their agencies in the
placement of digital advertisements, and ii) Automated auction
sales in which advertising inventory is purchased through the open
market. Platform is also integrated with parts of our Premium Games
segment, leveraging inter-segment synergies.
Selected business highlights in Q3 2024
include:
- Expanded our
Digital-Out-of-Home ("DOOH") advertising through the integration of
MyAdbooker into Azerion’s DSP, through which Azerion will support
local advertisers and agencies in France, The Netherlands and
Belgium access exclusive high-impact DOOH inventory offering a
powerful new dimension to their programmatic media strategies.
- Launched Generative
AI Contextual solution in Marketplace, a robust system that
provides accurate and reliable classification of web content,
enabling more effective campaigns and curated deals for our
partners.
- Enhanced our Demand
Side Platform adding new CTV and Set-Top Box localised in-home
granular targeting for improved geographic audience
identification.
- Improved our
programmatic open auction capabilities for audio, enabling
advertisers greater access to highly engaging podcasts, radio,
music and more.
- Brought greater
brand safety and control to advertisers and publishers through
launch of Child-Safe Marketplace in collaboration with Beeswax and
integrated DoubleVerify’s verification solutions in Azerion’s
SSP.
- Our B2B Game Key
distributor Genba, expanded its network of AAA and boutique
publisher partners averaging 175 connected studios in Q3 2024, an
increase of 11% from 157 in Q3 2023 increasing its catalogue of
popular games accessible to etailer partners.
- Azerion Sports
expanded into a new area of sport signing with the national Premier
Hockey League of the Netherlands, signed an additional 3 clubs to
its white-label fan engagement app, now totalling 26 clubs (18 in
Q3 2023), and launched in-app digital sports collectibles to reward
the clubs’ most loyal fans.
- Azerion strengthened
its casual games distribution portfolio during Q3 2024, adding 419
new games and 15 new publisher partners.
Platform – Selected Financial KPIs
Financial results - Platform
In millions of €
|
|
Q3 2024 |
Q3 2023 |
YTD 2024 |
YTD 2023 |
|
Advertising Platform |
92.4 |
73.3 |
286.0 |
222.6 |
|
AAA Game Distribution (formerly e-commerce) |
18.5 |
17.5 |
58.1 |
57.1 |
|
Total Revenue |
110.9 |
90.8 |
344.1 |
279.7 |
|
Operating profit / (loss) |
(0.9) |
4.0 |
(8.9) |
(7.6) |
|
Adj. EBITDA |
13.1 |
13.5 |
36.2 |
30.4 |
|
|
|
|
|
|
|
Revenue growth % - Advertising Platform |
26.1% |
|
28.5% |
|
|
Revenue growth % - AAA Game Distribution |
5.7% |
|
1.8% |
|
|
Total Revenue growth % |
22.1% |
|
23.0% |
|
|
Adjusted EBITDA growth / (decrease) % |
(3.0%) |
|
19.1% |
|
|
Adjusted EBITDA margin % |
11.8% |
14.9% |
10.5% |
10.9% |
Total Platform Revenue of € 110.9 million in Q3 2024, compared
to € 90.8 million in Q3 2023, an increase of 22.1% due to increased
Revenue from the Advertising platform particularly in Direct sales
and resilient AAA Games Distribution performance. Total Platform
Revenue of € 344.1 million in YTD Q3 2024, an increase of 23.0%
compared to € 279.7 million YTD Q3 2023, mainly due to growth in
advertising revenue from Direct sales, and the integration of
previous acquisitions.
Advertising Platform Revenue of € 92.4 million in Q3 2024, an
increase of approximately 26.1% compared to € 73.3 million in Q3
2023, mainly driven by increased Direct sales due to integration
and consolidation benefits from past acquisitions. In Q3
2024, Azerion’s Direct sales contributed approximately 70% of
Platform advertising revenue, as compared to approximately 60% in
Q3 2023, with the balance provided by Automated auction
sales.
In Q3 2024, AAA Game Distribution generated Revenue of € 18.5
million as compared to € 17.5 million in Q3 2023, an increase of
approximately 5.7% due to strong performance of B2B sales of
high-profile AAA game releases driven by promotional sales increase
and new eTailer partners added in Q3 2024. Strong revenue
performance was driven by the new releases and promotional sales of
popular titles. In Q3 2024, AAA Game Distribution Revenue
represented 16.7% of total Platform Revenue, as compared to 19.3%
in Q3 2023.
Total Platform Operating Loss of € (0.9) million in Q3 2024,
compared to Operating Profit of € 4.0 million in Q3 2023, a
decrease largely due to a one-off increase in operating expenses in
Q3 2024 related to the renegotiation of contingent consideration
terms for one of the acquisitions (€ 2.9 million) and a fair value
gain on contingent consideration for previous acquisitions in Q3
2023 (€ 2.0 million) that is absent in Q3 2024. Total Platform
Operating Loss of € (8.9) million in YTD Q3 2024, compared to €
(7.6) million in YTD Q3 2023, a decrease largely due to a one-off
increase in operating expenses related to the settlement of a
commercial dispute in Q2 2024 (€ 3.0 million) and renegotiation of
contingent consideration terms for one of the acquisitions, offset
by increased Platform revenue and contribution from Direct sales
and efficiencies from optimisation and consolidation efforts.
Total Platform Adjusted EBITDA of € 13.1 million in Q3 2024,
compared to € 13.5 million in Q3 2023, a decrease of (3.0)% largely
due to the mix of Advertising Platform Revenue, increased share of
Direct Sales offset by the lower-margin revenue from Hawk
acquisition. Total Platform Adjusted EBITDA of € 36.2 million in
YTD Q3 2024, compared to € 30.4 million in YTD Q3 2023, an increase
of 19.1% mainly as a result of growth in advertising revenue from
Direct sales and the integration of previous acquisitions.
Advertising - Selected Operational KPIs
Advertising - Operational KPIs
|
|
Q1 2023 |
Q2 2023 |
Q3 2023 |
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
|
Avg. Digital Ads Sold per Month (bn) |
12.3 |
13.0 |
11.9 |
13.9 |
11.9 |
12.1 |
12.6 |
|
Avg. Gross Revenue per Million Processed Ad Requests across the
Azerion Platform (EUR)1) |
25.1 |
30.3 |
25.4 |
34.5 |
25.4 |
29.0 |
23.4 |
1)Average gross revenue per million processed ad
requests across Azerion Platform is calculated by dividing gross
advertising revenue (processed by Azerion’s advertising auction and
monetisation platforms) by a million advertisement requests
processed by Azerion’s advertising auction and monetisation
platforms.
Note: Both Advertising Operational KPIs now include data
relating to the Hawk acquisition as of Q4 2023.
The Average Digital Ads sold per Month
increased to 12.6 billion in Q3 2024 from 11.9 billion in Q3 2023,
an increase of 5.9%, reflecting the Platform’s demand side growth
due to the integration of past acquisitions and the consolidation
of Azerion’s monetisation technology into a single scalable media
buying platform.
The Average Gross Revenue per Million Processed Ad
Requests across the Azerion Platform in Q3 2024 was €
23.4, compared to € 25.4 in Q3 2023, reflecting a small decline
year on year as we continue to balance and optimise between volume
and efficiency.
Premium Games Segment
From Q4 2023, the Premium Games segment consists of social
casino games and metaverse games. Azerion completed the sale of its
social card games portfolio to Playtika Holding Corp. on 28 August
2023 and its contribution to the Premium Games segment ceased at
that date. The segment generates revenue mainly by offering users
the ability to make in-game purchases for extra features and
virtual goods to enhance their gameplay experience. This segment
aims to stimulate social interaction among players and build
communities, offering an extended value proposition to advertisers
and generating cross-selling opportunities with the Platform
segment.
Selected Q3 2024 business highlights
- Partnered with
Everi, one of the largest suppliers of technology solutions for
casinos, to empower their Social Casino Brand Super Jackpot Slot
offering with Whow’s established technology and game mechanics
bringing innovative gaming to the casino industry.
- Test launch of new
mobile portrait social casino application to further engage
audiences on the go increasing daily active users and in-game
purchases.
- Created new
immersive quests and rolled out second hand store in Hotel
Hideaway, encouraging social journey gameplay and allowing users to
purchase their favourite add-ons at a discount further monetising
the game.
Premium Games – Selected Financial KPIs
Financial results - Premium Games
In millions of €
|
|
Q3 2024 |
Q3 2023 |
YTD 2024 |
YTD 2023 |
|
Revenue (excluding social card games) |
13.9 |
11.0 |
39.1 |
35.2 |
|
Social card games portfolio |
- |
6.7 |
- |
28.3 |
|
Total Revenue |
13.9 |
17.7 |
39.1 |
63.5 |
|
Operating profit / (loss) (excluding social card games) |
1.0 |
(1.8) |
(0.6) |
(6.7) |
|
Social card games portfolio |
- |
75.1 |
- |
81.0 |
|
Total Operating profit / (loss) |
1.0 |
73.3 |
(0.6) |
74.3 |
|
Adjusted EBITDA (excluding social card games) |
4.6 |
2.7 |
8.8 |
5.4 |
|
Social card games portfolio |
- |
2.1 |
- |
9.7 |
|
Total Adjusted EBITDA |
4.6 |
4.8 |
8.8 |
15.1 |
|
|
|
|
|
|
|
Revenue growth % (excluding social card games) |
26.4% |
- |
11.1% |
- |
|
Adjusted EBITDA growth % (excluding social card games) |
70.4% |
- |
63.0% |
- |
|
Adjusted EBITDA margin % (excluding social card games) |
33.1% |
24.5% |
22.5% |
15.3% |
Revenue of € 13.9 million in Q3 2024, as compared to € 11.0
million in Q3 2023 (excluding social card games), an increase of
26.4%, mainly driven by the increased number of paying users in
metaverse titles due to the release of Habbo Hotel Origins combined
with new social casinos sale features, improved discount strategies
and increased partner user acquisition spend, offset by the sale of
Woozworld at the start of January 2024 (totaling € 0.4 million
Revenue in Q3 2023). Revenue was € 39.1 million in YTD Q3 2024, as
compared to € 35.2 million in YTD Q3 2023 (excluding social card
games), an increase of 11.1%, driven by social casino and metaverse
performance and the factors previously described for Q3 2024,
partly offset by and the sale of Woozworld at the start of January
2024 (totaling € 1.3 million Revenue in YTD Q3 2023).
Adjusted EBITDA of € 4.6 million in Q3 2024, compared to € 2.7
million in Q3 2023 (excluding social card games), an increase of
70.4%, mainly driven by improved performance from metaverse titles
due to the release of Habbo Hotel Origins, consolidation and
integration efforts resulting in improved operational performance
and product development across the social casino and other
metaverse titles. Adjusted EBITDA of € 8.8 million in YTD Q3 2024,
as compared to € 5.4 million (excluding social card games), an
increase of 63.0% compared to YTD Q3 2023 reflecting the increased
performance of our metaverse titles due to the launch of Habbo
Hotel origins, consolidation and integration efforts resulting in
improved operational performance and product development across the
social casino and other metaverse titles offset by the shift in new
user generation to mobile in Azerion’s social casino environment
which has higher growth potential over time, but also higher
transaction costs as compared to web.
Operating Profit of € 1.0 million in Q3 2024, compared to
Operating Loss of € (1.8) million in Q3 2023 (excluding social card
games), an increase mainly driven by the reasons outlined in the
preceding paragraph. Operating Loss of € (0.6) million in YTD Q3
2024, compared to € (6.7) million in YTD Q3 2023 (excluding social
card games), an improvement once again reflecting the developments
described for Adjusted EBITDA above.
Premium Games – Selected Operational KPIs
Premium Games - Operational KPIs
|
|
Q2 2023 |
Q3 2023 |
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
|
Avg. Time in Game per Day (min) |
81.0 |
80.0 |
95.0 |
87.0 |
81.0 |
84.7 |
|
Avg. DAUs (thousands) |
274.1 |
252.0 |
255.4 |
251.2 |
252.9 |
239.4 |
|
Avg. ARPDAU (EUR) |
0.42 |
0.44 |
0.47 |
0.42 |
0.53 |
0.57 |
- The Average
Time in Game per Day (min) increased by 6% in Q3 2024 to
84.7 minutes per day as compared to 80.0 minutes per day in Q3 2023
due to the ongoing development of new features and events in social
casino and metaverse titles.
- The Average
Daily Active Users (DAUs) decreased by (5)% in Q3 2024 to
239.4 compared to Q3 2023 of 252.0, mainly due to lower user
acquisition spend and increased focus on greater engagement with
higher paying users.
- The Average
Revenue per Daily Active User (ARPDAU) increased by 30% in
Q3 2024 to € 0.57 compared to Q3 2023 of € 0.44, driven by improved
in-game sales mechanics in social casino, features and events and
continued benefits from the successful launch of Habbo Hotel
Origins in Q2 2024 which progressively normalised during the
quarter.
Given the sale of the social cards portfolio in August 2023, the
selected operational KPIs for all quarters have been revised to no
longer contain results from the social card games
portfolio.
Outlook
The guidance previously provided remains unchanged:
- Revenue for full
year 2024 is expected to be in the range of approximately € 540
million to € 560 million, with annual growth thereafter in the
medium term expected to be approximately 10%.
- Adjusted EBITDA for
full year 2024 is expected to be in the range of approximately € 75
million to € 80 million, with annual Adjusted EBITDA margin
thereafter in the medium term expected to be in the range of
approximately 14% to 16%.
Update on M&A and Funding Strategy
With favourable market dynamics, Azerion sees increasingly
attractive opportunities to accelerate its growth through further
strategic partnerships and acquisitions. At this stage, the highest
conviction components of the pipeline represent annual aggregate
revenue of between € 255 and € 285 million and aggregate adjusted
EBITDA in the range of approximately € 20 to € 25 million
pre-synergies. The precise mix of opportunities to be executed upon
and the timing for execution on them is subject to normal M&A
contingencies, including availability of funding for those
opportunities, and would be executed in accordance with the terms
and conditions of the Senior Secured Callable Floating Rate
Bonds.
In this context, Azerion has mandated Pareto Securities AB and
Arctic Securities AB to conduct a series of fixed-income investor
meetings and subject to, inter alia, market conditions a Subsequent
Bond issue may follow utilising some or all of the capacity
available of up to € 85 million out of the Company’s already
existing Senior Secured Callable Floating Rate Bond framework of €
300 million with ISIN NO0013017657. Proceeds
from the Subsequent Bond issue will be used to finance general
corporate purposes of the Company, including capital expenditure,
acquisitions and transaction costs.
Other information
Interest-bearing debt
Interest-bearing debt
in millions of €
|
|
30 September 2024 |
31 December 2023 |
|
Total non-current indebtedness |
224.4 |
172.0 |
|
Total current indebtedness |
21.8 |
12.6 |
|
Total financial indebtedness |
246.2 |
184.6 |
|
Deduct Zero interest-bearing loans |
(0.2) |
(0.1) |
|
Interest-bearing debt |
246.0 |
184.5 |
|
Less: Cash and cash equivalents |
(68.3) |
(40.3) |
|
Net Interest-bearing debt (Bond terms) |
177.7 |
144.2 |
References to bond terms in the table above refer to the terms
as defined in the Senior Secured Callable Floating Rate Bonds ISIN:
NO0013017657
Reconciliation of Profit / (loss) for the period to Adjusted
EBITDA
Reconciliation of Profit / (loss) for the period to Adjusted
EBITDA - Q3
in millions of €
|
|
Q3 |
|
|
2024 |
2023 |
|
|
Azerion Group |
Premium Games |
Platform |
Other |
Azerion Group |
Premium Games |
Platform |
Other |
|
Profit / (loss) for the period |
(9.4) |
|
|
|
54.4 |
|
|
|
|
Income Tax expense |
(0.7) |
|
|
|
18.1 |
|
|
|
|
Profit / (loss) before tax |
(10.1) |
|
|
|
72.5 |
|
|
|
|
Net finance costs |
10.2 |
|
|
|
4.8 |
|
|
|
|
Operating profit / (loss) |
0.1 |
1.0 |
(0.9) |
- |
77.3 |
73.3 |
4.0 |
- |
|
Depreciation & Amortisation |
11.3 |
2.7 |
8.6 |
- |
11.3 |
3.0 |
8.2 |
0.1 |
|
Social card games portfolio |
- |
- |
- |
- |
(72.6) |
(72.6) |
- |
- |
|
Other |
0.3 |
0.1 |
0.2 |
- |
- |
(0.1) |
0.1 |
- |
|
Acquisition expenses1) |
5.6 |
0.6 |
5.0 |
- |
2.8 |
1.2 |
1.7 |
(0.1) |
|
Restructuring |
0.4 |
0.2 |
0.2 |
- |
(0.5) |
- |
(0.5) |
- |
|
Adjusted EBITDA |
17.7 |
4.6 |
13.1 |
- |
18.3 |
4.8 |
13.5 |
- |
1)In the past, all changes to the fair value of
liabilities for contingent considerations were adjusted out of
EBITDA on the basis that these impacts were acquisition related.
Management has decided to cease these adjustments where the
consideration is contingent upon the achievement of financial
targets, because these changes in fair value are offsetting
opposite movements already included in the operational performance
of the acquired entity. This change has been applied
prospectively.
Additional notes:
- Acquisition expenses
for Q3 2024 includes € 2.9 million relating to renegotiation of
contingent consideration terms for one of the acquisitions.
Reconciliation of Profit / (loss) for the period to Adjusted
EBITDA - YTD
in millions of €
|
|
YTD |
|
|
2024 |
2023 |
|
|
Azerion Group |
Premium Games |
Platform |
Other |
Azerion Group |
Premium Games |
Platform |
Other |
|
Profit / (loss) for the period |
(38.7) |
|
|
|
32.3 |
|
|
|
|
Income Tax expense |
0.7 |
|
|
|
21.4 |
|
|
|
|
Profit / (loss) before tax |
(38.0) |
|
|
|
53.7 |
|
|
|
|
Net finance costs |
28.5 |
|
|
|
13.0 |
|
|
|
|
Operating profit / (loss) |
(9.5) |
(0.6) |
(8.9) |
- |
66.7 |
74.3 |
(7.6) |
- |
|
Depreciation & Amortisation |
32.3 |
7.9 |
24.4 |
- |
32.5 |
9.6 |
22.9 |
- |
|
Social card games portfolio |
- |
- |
- |
- |
(72.6) |
(72.6) |
- |
- |
|
Other |
1.6 |
0.3 |
1.3 |
- |
1.5 |
0.9 |
0.6 |
- |
|
Acquisition expenses1) |
19.4 |
0.9 |
18.5 |
- |
10.5 |
1.2 |
9.3 |
- |
|
Restructuring |
1.2 |
0.3 |
0.9 |
- |
6.9 |
1.7 |
5.2 |
- |
|
Adjusted EBITDA |
45.0 |
8.8 |
36.2 |
- |
45.5 |
15.1 |
30.4 |
- |
1)In the past, all changes to the fair value of
liabilities for contingent considerations were adjusted out of
EBITDA on the basis that these impacts were acquisition related.
Management has decided to cease these adjustments where the
consideration is contingent upon the achievement of financial
targets, because these changes in fair value are offsetting
opposite movements already included in the operational performance
of the acquired entity. This change has been applied
prospectively.
Additional notes:
Acquisition expenses for YTD Q3 2024 includes € 7.7 million
relating to:
- € 4.8 million in Q2
2024 on one-off settlement of a commercial dispute and contingent
consideration fair value loss (non-operational performance target)
relating to a previous acquisition, and
- € 2.9 million in Q3
2024 on renegotiation of contingent consideration terms for one of
the acquisitions.
Operating expenses
Breakdown of Operating expenses
in millions of €
|
|
Q3 |
YTD |
|
2024 |
2023 |
2024 |
2023 |
|
Personnel costs1) |
(23.1) |
(19.8) |
(66.0) |
(73.6) |
|
Includes: |
|
|
|
|
|
Restructuring related expenses |
(0.4) |
0.5 |
(1.2) |
(6.9) |
|
Acquisition related one-off item |
(1.7) |
- |
(1.7) |
- |
|
Other expenses |
(7.3) |
(6.9) |
(28.2) |
(28.6) |
|
Includes: |
|
|
|
|
|
One of settlement expenses2) |
- |
- |
(3.0) |
- |
|
Operating expenses |
(30.4) |
(26.7) |
(94.2) |
(102.2) |
1)Personnel costs in Q3 2024 include Hawk, which was
acquired in Q4 2023.
2)The one-off settlement is related to settlement of
a commercial dispute.
Condensed consolidated statement of profit or loss and other
comprehensive income
Condensed consolidated statement of profit or loss and other
comprehensive income
In millions of €
|
|
Q3 |
YTD |
|
|
2024 |
2023 |
2024 |
2023 |
|
Revenue |
124.8 |
108.5 |
383.2 |
343.2 |
|
Costs of services and materials |
(81.8) |
(67.7) |
(265.0) |
(214.4) |
|
Personnel costs |
(23.1) |
(19.8) |
(66.0) |
(73.6) |
|
Depreciation |
(2.2) |
(2.0) |
(6.0) |
(5.9) |
|
Amortisation |
(9.1) |
(9.3) |
(26.3) |
(26.6) |
|
Other gains and losses1) |
(1.2) |
74.5 |
(1.2) |
72.6 |
|
Other expenses |
(7.3) |
(6.9) |
(28.2) |
(28.6) |
|
Operating profit / (loss) |
0.1 |
77.3 |
(9.5) |
66.7 |
|
|
|
|
|
|
|
Finance income |
1.8 |
2.1 |
3.9 |
7.5 |
|
Finance costs |
(12.0) |
(6.9) |
(32.4) |
(20.5) |
|
Net Finance costs |
(10.2) |
(4.8) |
(28.5) |
(13.0) |
|
|
|
|
|
|
|
Profit / (loss) before tax |
(10.1) |
72.5 |
(38.0) |
53.7 |
|
Income tax expense |
0.7 |
(18.1) |
(0.7) |
(21.4) |
|
Profit / (loss) for the period |
(9.4) |
54.4 |
(38.7) |
32.3 |
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
Owners of the company |
(9.8) |
54.1 |
(40.0) |
31.6 |
|
Non-controlling interest |
0.4 |
0.3 |
1.3 |
0.7 |
|
|
|
|
|
|
|
Exchange difference on translation of foreign operations |
1.2 |
(0.3) |
1.3 |
(0.3) |
|
Financial assets fair value through OCI |
0.5 |
- |
(0.8) |
- |
|
Total other comprehensive income |
1.7 |
(0.3) |
0.5 |
(0.3) |
|
Total comprehensive income/(loss) |
(7.7) |
54.1 |
(38.2) |
32.0 |
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
Owners of the company |
(8.1) |
56.5 |
(39.5) |
31.3 |
|
Non-controlling interest |
0.4 |
(2.4) |
1.3 |
0.7 |
1)Earn-out results have been reclassified from Other
expenses to Other gains and losses
Condensed consolidated statement of financial
position
Condensed consolidated statement of financial position
in millions of €
|
|
30 September 2024 |
31 December 2023 |
|
Assets |
|
|
|
Non-current assets |
393.3 |
413.6 |
|
Property, plant and equipment |
19.2 |
17.0 |
|
Goodwill |
190.5 |
187.1 |
|
Intangible assets |
165.3 |
176.3 |
|
Non-current financial assets |
5.0 |
30.8 |
|
Deferred tax asset |
0.8 |
2.3 |
|
Investment in joint venture and associate |
12.5 |
0.1 |
|
|
|
|
|
Current assets |
249.0 |
238.4 |
|
Trade and other receivables |
179.6 |
196.7 |
|
Current tax assets |
1.1 |
1.4 |
|
Cash and cash equivalents |
68.3 |
40.3 |
|
Total assets |
642.3 |
652.0 |
|
|
|
|
|
Equity |
|
|
|
Share capital |
1.2 |
1.2 |
|
Share premium |
143.6 |
140.2 |
|
Legal reserve |
31.9 |
27.7 |
|
Share based payment reserve |
12.6 |
12.7 |
|
Currency translation reserve |
(0.6) |
(1.9) |
|
Fair value through OCI |
(0.8) |
- |
|
Retained earnings |
(119.7) |
(75.6) |
|
Shareholders’ equity |
68.2 |
104.3 |
|
Non-controlling interest |
6.4 |
5.3 |
|
Total equity |
74.6 |
109.6 |
|
|
|
|
|
Liabilities |
|
|
|
Non-current liabilities |
269.5 |
220.1 |
|
Borrowings |
211.5 |
161.9 |
|
Lease liabilities |
12.9 |
10.1 |
|
Provisions |
1.8 |
1.6 |
|
Deferred tax liability |
29.2 |
30.0 |
|
Other non-current liability |
14.1 |
16.5 |
|
|
|
|
|
Current liabilities |
298.2 |
322.3 |
|
Borrowings |
17.6 |
8.4 |
|
Provisions |
2.3 |
3.6 |
|
Trade payables |
117.2 |
142.0 |
|
Accrued liabilities |
87.1 |
112.7 |
|
Current tax liabilities |
10.6 |
13.4 |
|
Lease liabilities |
4.2 |
4.2 |
|
Other current liabilities |
59.2 |
38.0 |
|
Total liabilities |
567.7 |
542.4 |
|
Total equity and liabilities |
642.3 |
652.0 |
Condensed consolidated statement of cash flow
Condensed consolidated statement of cash flow
In millions of €
|
|
Q3 |
Q3 |
YTD |
YTD |
|
|
2024 |
2023 |
2024 |
2023 |
|
Cash flows from operating activities |
|
|
|
|
|
Operating profit / (loss) |
0.1 |
77.3 |
(9.5) |
66.7 |
|
Adjustments for operating profit / (loss): |
|
|
|
|
|
Depreciation and amortisation & Impairments |
11.3 |
11.2 |
32.3 |
32.5 |
|
Movements in provisions per profit and loss |
(0.2) |
1.3 |
1.2 |
7.9 |
|
Gain on sale of social card game portfolio |
- |
(72.6) |
- |
(72.6) |
|
Share-based payments expense |
0.1 |
0.1 |
0.4 |
0.7 |
|
Adjustment for acquisitions and disposals presented under investing
activities |
7.3 |
(2.9) |
5.7 |
(2.9) |
|
|
|
|
|
|
|
Changes in working capital items: |
|
|
|
|
|
(Increase)/Decrease in trade and other receivables |
18.9 |
(5.1) |
27.4 |
18.6 |
|
Increase (decrease) in trade payables and other payables |
(40.9) |
(18.0) |
(37.3) |
(10.2) |
|
|
|
|
|
|
|
Utilization of provisions |
(0.1) |
(1.6) |
(2.8) |
(6.8) |
|
Interest received |
0.7 |
- |
0.9 |
- |
|
Interest paid |
(7.8) |
(5.1) |
(18.3) |
(14.0) |
|
Income tax paid |
(0.8) |
(0.4) |
(3.0) |
(1.0) |
|
Net cash provided by (used for) operating activities |
(11.4) |
(15.8) |
(3.0) |
18.9 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Payments for property, plant and equipment |
(0.1) |
(0.8) |
(0.5) |
(1.4) |
|
Payments for intangibles |
(4.3) |
(7.6) |
(13.8) |
(19.6) |
|
Net cash outflow on acquisition of subsidiaries |
(5.2) |
(8.1) |
(16.0) |
(33.1) |
|
Net cash inflow/(outflow) from sale of business |
11.6 |
66.0 |
11.2 |
66.0 |
|
Distributions from equity method investees |
- |
- |
0.5 |
- |
|
Net cash outflow on acquisition of securities and equity
investments |
- |
(2.6) |
- |
(2.6) |
|
Net cash provided by (used for) investing activities |
2.0 |
46.9 |
(18.6) |
9.3 |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from external borrowings |
48.2 |
0.4 |
57.6 |
0.5 |
|
Repayment of external borrowings |
(0.5) |
(0.8) |
(3.2) |
(3.6) |
|
Payment of principal portion of lease liabilities |
(1.8) |
(1.7) |
(4.8) |
(5.0) |
|
Early cancelation of lease liability |
- |
(1.5) |
- |
(1.5) |
|
Dividends paid to shareholders of non-controlling interests |
- |
(0.4) |
(0.2) |
(0.4) |
|
Net cash provided by (used for) financing activities |
45.9 |
(4.0) |
49.4 |
(10.0) |
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
36.5 |
27.1 |
27.8 |
18.2 |
|
Effect of changes in exchange rates on cash and cash
equivalents |
- |
(0.1) |
0.2 |
0.1 |
|
Cash and cash equivalents at the beginning of the period |
31.8 |
42.2 |
40.3 |
50.9 |
|
Cash and cash equivalents at the end of the period |
68.3 |
69.2 |
68.3 |
69.2 |
Definitions
Adjusted EBITDA represents Operating Profit /
(Loss) excluding depreciation, amortisation, impairment of
non-current assets, restructuring and acquisition related expenses
and other items at management discretion, principally those
assessed as extraordinary items or non-recurring items which are
not in line with the ordinary course of business.
Adjusted EBITDA Margin represents Adjusted
EBITDA as a percentage of Revenue.
Average gross revenue per million processed ad
requests across Azerion Platform is calculated by dividing
gross advertising revenue (processed by Azerion’s advertising
auction and monetisation platforms) by a million advertisement
requests processed by Azerion’s advertising auction and
monetisation platforms.
Average time in game per day measures how many
minutes per day, on average, the players of Premium Games spend in
the games. This demonstrates their engagement with the games, which
generates more opportunities to grow the ARPDAU.
Average DAUs represents average daily
active users, which is the number of distinct users per day
averaged across the relevant period.
ARPDAU represents Average Revenue per Daily
Active User, which is revenue per period divided by days in the
period divided by average daily active users in that period and
represents average per user in-game purchases for the period.
Financial Indebtedness represents as defined in
the terms and conditions of the Senior Secured Callable Floating
Rate Bonds ISIN: NO0013017657 any indebtedness in respect of:
- monies borrowed or
raised, including Market Loans;
- the amount of any
liability in respect of any Finance Leases;
- receivables sold or
discounted (other than any receivables to the extent they are sold
on a non-recourse basis);
- any amount raised
under any other transaction (including any forward sale or purchase
agreement) having the commercial effect of a borrowing;
- any derivative
transaction entered into in connection with protection against or
benefit from fluctuation in any rate or price (and, when
calculating the value of any derivative transaction, only the mark
to market value shall be taken into account, provided that if any
actual amount is due as a result of a termination or a close-out,
such amount shall be used instead);
- any counter
indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument
issued by a bank or financial institution; and
- (without double
counting) any guarantee or other assurance against financial loss
in respect of a type referred to in the above paragraphs
(1)-(6).
Net Interest-bearing debt as defined in the
terms and conditions of the Senior Secured Callable Floating Rate
Bonds ISIN: NO0013017657 means the aggregate interest-bearing
Financial Indebtedness less cash and cash equivalents (including
any cash from a Subsequent Bond Issue standing to the credit on the
Proceeds Account or another escrow arrangement for the benefit of
the Bondholders) of the Group in accordance with the Accounting
Principles (for the avoidance of doubt, excluding any Bonds owned
by the Issuer, guarantees, bank guarantees, Subordinated Loans, any
claims subordinated pursuant to a subordination agreement on terms
and conditions satisfactory to the Agent and interest-bearing
Financial Indebtedness borrowed from any Group Company) as such
terms are defined in the terms and conditions of the Senior Secured
Callable Floating Rate Bonds ISIN: NO0013017657.
Operating expenses are defined as the aggregate
of personnel costs and other expenses as reported in the statement
of profit or loss and other comprehensive income. More details on
the reporting of cost by nature can be found in the published
annual financial statements of 2023.
Operating Profit / (Loss) represents revenue
less costs of services and materials, operating expenses,
depreciation and amortisation and other gains and losses.
Disclaimer and Cautionary Statements
This communication contains information that qualifies as inside
information within the meaning of Article 7(1) of the EU Market
Abuse Regulation.
This communication may include forward-looking statements. All
statements other than statements of historical facts are, or may be
deemed to be, forward-looking statements. Forward-looking
statements include, among other things, statements concerning the
potential exposure of Azerion to market risks and statements
expressing management’s expectations, beliefs, estimates,
forecasts, projections and assumptions. Words and expressions such
as aims, ambition, anticipates, believes, could, estimates,
expects, goals, intends, may, milestones, objectives, outlook,
plans, projects, risks, schedules, seeks, should, target, will or
other similar words or expressions are typically used to identify
forward-looking statements. Forward-looking statements are
statements of future expectations that are based on management’s
current expectations and assumptions and involve known and unknown
risks, uncertainties and other factors that are difficult to
predict and that could cause the actual results, performance or
events to differ materially from future results expressed or
implied by such forward-looking statements contained in this
communication. Readers should not place undue reliance on
forward-looking statements.
Any forward-looking statements reflect Azerion’s current views
and assumptions based on information currently available to
Azerion’s management. Forward-looking statements speak only as of
the date they are made and Azerion does not assume any obligation
to update or revise such statements as a result of new information,
future events or other information, except as required by law.
The interim financial results of Azerion Group N.V. as included
in this communication are required to be disclosed pursuant to the
terms and conditions of the Senior Secured Callable Floating Rate
Bonds ISIN: NO0013017657.
This report has not been reviewed or audited by Azerion’s
external auditor.
Certain financial data included in this communication consist of
alternative performance measures (“non-IFRS financial measures”),
including Adjusted EBITDA. The non-IFRS financial measures, along
with comparable IFRS measures, are used by Azerion’s management to
evaluate the business performance and are useful to investors. They
may not be comparable to similarly titled measures as presented by
other companies, nor should they be considered as an alternative to
the historical financial results or other indicators of Azerion
Group N.V.’s cash flow based on IFRS. Even though the non-IFRS
financial measures are used by management to assess Azerion Group
N.V.’s financial position, financial results and liquidity and
these types of measures are commonly used by investors, they have
important limitations as analytical tools, and the recipients
should not consider them in isolation or as a substitute for
analysis of Azerion Group N.V.’s financial position or results of
operations as reported under IFRS.
For all definitions and reconciliations of non-IFRS financial
measures please also refer to www.azerion.com/investors.
This report may contain forward-looking non-IFRS financial
measures. The Company is unable to provide a reconciliation of
these forward-looking non-IFRS financial measures to the most
comparable IFRS financial measures because certain information
needed to reconcile those non-IFRS financial measures to the most
comparable IFRS financial measures is dependent on future events
some of which are outside the control of Azerion. Moreover,
estimating such IFRS financial measures with the required precision
necessary to provide a meaningful reconciliation is extremely
difficult and could not be accomplished without unreasonable
effort. Non-IFRS financial measures in respect of future periods
which cannot be reconciled to the most comparable IFRS financial
measure are calculated in a manner which is consistent with the
accounting policies applied in Azerion Group N.V.’s consolidated
financial statements.
This communication does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities or any other
financial instruments.
Contact
Investor Relations: ir@azerion.comMedia relations:
press@azerion.com
Azerion Group NV (EU:AZRN)
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