Continued growth and delivery on M&A pipeline
Highlights of Q3 2022
- Revenue of almost EUR 106 million, compared to EUR 84 million
in Q3 2021, mainly driven by strong growth in the Platform
segment.
- Adjusted EBITDA of over EUR 12 million, down by 30% compared to
Q3 2021, primarily due to lower contributions from the Premium
Games segment, with Q3 2021 positively impacted by the successful
launch of the Habbo NFT project, which impacts comparability versus
Q3 2022.
- Completed acquisitions of Madvertise, Vlyby, Takerate and other
asset deals, boosting our offerings to advertisers and
publishers.
- Launched the new Habbo app on Android and iOS.
- Expanded integration with Google’s demand-side platform,
enabling Google’s Audience targeting, unlocking additional volumes
to Azerion’s advertising auction platform Improve Digital.
- In October and November, completed the acquisitions of
[M]media, Hybrid Theory and Adplay, strengthening capabilities and
global footprint.
- In November, won the Digital Media Owner Award, surveyed by the
Institute of Practitioners in Advertising in the UK, achieving the
highest score in the history of the survey.
- In November, announced the results
of an independent survey on attention measurement, revealing that
Azerion’s proprietary digital advertising formats can drive up to
20x higher attention compared to standard formats.
Selected Financial KPIs
Financial results (EURm) |
Q3 |
YTD |
Azerion Holding B.V. |
2022 |
20211) |
2022 |
20211) |
Revenue |
105.5 |
83.5 |
303.8 |
181.7 |
Gross profit |
38.5 |
34.7 |
113.2 |
70.5 |
Operating expenses |
(28.2) |
(19.6) |
(102.2) |
(48.8) |
Operating profit / (loss) |
0.2 |
4.7 |
(28.0) |
2.9 |
EBITDA |
9.7 |
14.0 |
(1.7) |
21.0 |
Adjusted EBITDA |
12.4 |
17.7 |
30.0 |
27.3 |
Revenue growth, % |
26.3% |
|
67.2% |
|
Gross profit margin % |
36.5% |
41.6% |
37.3% |
38.8% |
Adjusted EBITDA growth % |
-29.9% |
|
9.9% |
|
Adjusted EBITDA margin, % |
11.8% |
21.2% |
9.9% |
15.0% |
1) 2021 financial data has been updated to reflect the
allocation of head office costs to segments and 2021 audit
adjustments. Refer to the "Other information" section for more
information.
Co-CEO Umut Akpinar said:
“I am pleased with our continued growth on the top line, while
increasing the focus on costs and improving efficiencies across our
platform. We are on track to deliver at least EUR 450 million
revenue this year and we will continue integrating our acquisitions
and building volumes in our higher-margin products. In Q3 2021 we
had a very successful sale of NFTs in our Habbo metaverse, which
makes the numbers less comparable on a year-to-year basis.”
Co-CEO Atilla Aytekin said:
“This quarter we announced a number of acquisitions that add
valuable capabilities to our offerings to advertisers, publishers
and consumers. With a focus on profitability, we will expedite
integration and related synergies and remain ready to capture
opportunities in this market under consolidation. We are also
excited to be hosting our first Strategy Deep Dive with the market
to share insights into our organic and inorganic growth
strategy.”
Financial overview
Revenue
Revenue for the quarter amounted to EUR 105.5 million, an
increase of EUR 22.0 million, or 26.3%, compared to Q3 2021,
boosted by Platform, partly offset by lower revenue from Premium
Games.
Earnings
We delivered EUR 12.4 million adjusted EBITDA for the quarter
compared to EUR 17.7 million in Q3 2021, a decrease of EUR 5.3
million, mainly due to lower contributions from Premium Games and
the NFT pilot successfully executed in Q3 2021.
The operating profit amounted to EUR 0.2 million, compared to a
profit of EUR 4.7 million in Q3 2021, primarily reflecting the
lower contributions from Premium Games and the NFT pilot
successfully executed in Q3 2021.
Cash flow
Our cash flow from operating activities in Q3 2022 was an inflow
of EUR 2.8 million. Cash flow from investing activities was an
outflow of EUR 11.2 million, due to capital expenditures and
acquisitions. Cash flow from financing activities totalled an
inflow of EUR 13.7 million.
Capex
We capitalize development costs related to asset development, a
core activity to support innovation in our platform. These costs
primarily relate to developers’ time devoted to the development of
games, platforms, and other new features. In Q3 2022 we capitalized
EUR 4.1 million, equivalent to 17.7% of gross personnel costs.
Financial position and financing
Our net interest-bearing debt* amounted to EUR 179.1 million as
at 30 September 2022, mainly comprising our outstanding bond loan
with a nominal value of EUR 200.0 million (part of an in total EUR
300.0 million framework) and lease liabilities with a balance of
EUR 17.9 million less the cash and cash equivalents position of EUR
44.1 million.
Segment information
Platform
Our Platform segment includes casual games distribution,
advertising and e-Commerce, which are fully integrated through our
technology. It generates revenue mainly by displaying digital
advertisements in both game and non-game content, as well as
selling and distributing AAA games through our e-commerce channels.
Platform is also integrated with our Premium Games segment,
leveraging inter-segment synergies.
Platform – Selected Financial
KPIs
Financial results (EURm) |
Q3 |
YTD |
Platform |
2022 |
20211) |
2022 |
20211) |
Revenue |
84.2 |
57.5 |
238.8 |
133.1 |
Gross profit |
27.4 |
19.3 |
80.4 |
44.1 |
Operating expenses |
(20.5) |
(12.0) |
(67.2) |
(33.0) |
Operating profit / (loss) |
0.6 |
1.5 |
(14.0) |
(0.4) |
EBITDA |
7.1 |
6.0 |
3.7 |
10.6 |
Adjusted EBITDA |
8.2 |
8.4 |
18.0 |
14.8 |
Revenue growth, % |
46.4% |
|
79.4% |
|
Gross profit margin % |
32.5% |
33.6% |
33.7% |
33.1% |
Adjusted EBITDA growth % |
-2.4% |
|
21.6% |
|
Adjusted EBITDA margin, % |
9.7% |
14.6% |
7.5% |
11.1% |
1) 2021 financial data has been updated to reflect the
allocation of head office costs to segments and 2021 audit
adjustments. Refer to the "Other information" section for more
information.
Platform Revenue was EUR 84.2 million in Q3
2022, an increase of 46.4% compared to Q3 2021, mainly due to
acquisitions as well as organic growth.
Adjusted EBITDA was EUR 8.2 million in Q3 2022, decreasing by
2.4% compared to Q3 2021. Higher net revenue was offset by lower
gross profit margin, mainly driven by market conditions, and
increased operating expenses compared to Q3 2021, primarily driven
by acquisitions and ongoing investments in the platform.
Results benefited from increased user engagement levels, with
users spending more time playing casual games, as well as enhanced
monetisation across the portfolio. In addition, we have grown our
casual games distribution portfolio during Q3 2022, adding
approximately 452 new titles and 415 new publisher partners.
Advertising - Selected Operational
KPIs
|
Q3 2021 |
Q4 2021 |
Q1 2022 |
Q2 2022 |
Q3 2022 |
Avg. Digital Ads Sold per Month (bn) |
6.9 |
10.9 |
9.9 |
9.5 |
9.6 |
Advertising auction platform (bn) |
3.7 |
4.5 |
4.1 |
4.3 |
4.3 |
Publisher monetisation services (bn) |
3.2 |
6.4 |
5.8 |
5.2 |
5.3 |
Avg. Gross Revenue per Million Accepted Ad Requests from
advertising auction platform (EUR) |
9.9 |
12.9 |
8.6 |
9.1 |
11.2 |
- The Average number of digital ads sold per
month (paid impressions) increased to 9.6 billion from 6.9
billion in Q3 2021, reflecting significant growth in our
advertising business.
- The Average gross revenue per million accepted ad
requests was EUR 11.2 in Q3 2022, compared to EUR 9.9 in
Q3 2021, demonstrating our ability to manage our advertising
auction platform efficiently and profitably, even against the
backdrop of challenging macro-economic environment.
The numbers reported in the selected operational KPIs do not
include volumes from past acquisitions that are not yet fully
integrated. As of this quarter, the reported numbers include the
following previous acquisitions: advertising auction platforms
Improve Digital, Admoove, Delta Projects and Infinia, as well as
publisher monetisation services Headerlift, Pubgalaxy, Sublime,
Inskin, Strossle, Keymobile, Madvertise and Quantum.
Average gross revenue per million ad requests has been revised
to exclude ad requests that are rejected by our platform without
generating any costs. As a result this KPI has been renamed as
Average gross revenue per million accepted ad requests.
Premium Games
Our Premium Games segment includes social games and metaverse,
comprising nine premium game titles. 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. The aim of this segment is to stimulate social
interaction among players and build communities.
Premium Games – Selected Financial
KPIs
Financial results (EURm) |
Q3 |
YTD |
Premium Games |
2022 |
20211) |
2022 |
20211) |
Revenue |
21.3 |
26.0 |
65.0 |
48.6 |
Gross profit |
11.1 |
15.4 |
32.8 |
26.4 |
Operating expenses |
(7.6) |
(7.6) |
(21.6) |
(15.8) |
Operating profit / (loss) |
0.7 |
3.2 |
0.3 |
3.4 |
EBITDA |
3.6 |
8.0 |
8.9 |
10.4 |
Adjusted EBITDA |
4.2 |
9.2 |
12.0 |
12.4 |
Revenue growth, % |
-18.1% |
|
33.7% |
|
Gross profit margin % |
52.1% |
59.2% |
50.5% |
54.3% |
Adjusted EBITDA growth % |
-54.3% |
|
-3.2% |
|
Adjusted EBITDA margin, % |
19.7% |
35.4% |
18.5% |
25.5% |
1) 2021 financial data has been updated to reflect the
allocation of head office costs to segments and 2021 audit
adjustments. Refer to the "Other information" section for more
information.
Premium Games Revenue was EUR 21.3 million in
Q3 2022, a decrease of 18.1% compared to Q3 2021. Revenue in Q3
2021 was positively impacted by the successful launch of the Habbo
NFT project, impacting comparability versus Q3 2022. Excluding this
impact, Revenue was at a similar level as in Q3 2021, primarily
driven by increased average revenue per daily user, partly offset
by a decline in the average number of daily users.
Adjusted EBITDA was EUR 4.2 million in Q3 2022, a decrease of
54.3% compared to Q3 2021. The high margin NFT activities were a
significant contributor to the Adjusted EBITDA in Q3 2021,
affecting comparability. Excluding this impact, Adjusted EBITDA
reflected higher operating expenses, partly offset by slightly
improved gross profit margin.
Premium Games – Selected Operational
KPIs
|
Q3 2021 |
Q4 2021 |
Q1 2022 |
Q2 2022 |
Q3 2022 |
Avg. Time in Game per Day (min) |
79 |
80 |
81 |
80 |
80 |
Avg. DAUs
(thousands) |
616 |
599 |
607 |
567 |
556 |
Avg. ARPDAU (EUR) |
0.37 |
0.42 |
0.38 |
0.40 |
0.42 |
- The Average time in game per day from our
Premium Games players remained at a similar level as in Q3
2021.
- The Average daily active users
(DAUs) decreased by
almost 10% compared to Q3 2021, reflecting a normalisation of
Covid-19-induced elevated levels of users, partly offset by an
inflow of new users in France, following our user acquisition
campaign.
- The Average revenue per daily active user
(ARPDAU) increased by over 13% compared to Q3 2021,
primarily driven by new features and events that enhanced the user
gameplay experience, including for example the Love Island/ITV
Studios partnership in Hotel Hideaway.
Outlook
On track to deliver Revenue of at least EUR 450 million for the
full financial year 2022, with Adjusted EBITDA expected to be over
EUR 50 million.
Other information
Interest Bearing Debt
Interest Bearing Debt in millions of EUR |
30 September 2022 |
31 December 2021 |
Total non-current indebtedness |
227.9 |
213.3 |
Total current indebtedness |
10.6 |
11.5 |
Total financial indebtedness |
238.5 |
224.8 |
Deduct Zero interest bearing loans |
(0.3) |
(0.7) |
Interest Bearing Debt |
238.2 |
224.1 |
Less: Cash and cash equivalents |
(44.1) |
(35.3) |
Net Interest Bearing
Debt |
194.1 |
188.8 |
Of which permitted Net Interest Bearing Debt under the bond
terms |
179.1 |
188.8 |
References to the bond terms in the table above refer to the
senior secured callable fixed rate bond ISIN: SE0015837794
Financial indebtedness increased by EUR 13.7 million from 31
December 2021, mainly due to the reclassification of subordinated
convertible loans from other equity instruments to borrowings.
These subordinated convertible loans include an equity redemption
option of outstanding loan balances, in addition to a cash
redemption option. Under the modified terms, the discretion to
redeem the loans in equity or cash lies with Azerion Holding B.V.
Following the de-SPAC transaction, the loans are redeemable by
issuing shares in the capital of Azerion Group N.V. Since these
loans are no longer redeemable by issuing shares in the capital of
Azerion Holding B.V., they have been reclassified from other equity
instruments.
Reconciliation of net income to Adjusted
EBITDA
Reconciliation of net income to Adjusted EBITDA in millions
of EUR |
Q3 |
2022 |
2021 |
Azerion Holding B.V. |
Premium Games |
Platform |
Other |
Azerion Holding B.V. |
Premium Games |
Platform |
Profit / (loss) for the period |
(4.3) |
|
|
|
2.4 |
|
|
Income Tax expense |
1.1 |
|
|
|
0.1 |
|
|
Profit / (loss) before tax |
(3.2) |
|
|
|
2.5 |
|
|
Net finance costs |
3.4 |
|
|
|
2.2 |
|
|
Operating profit / (loss) |
0.2 |
0.7 |
0.6 |
(1.1) |
4.7 |
3.2 |
1.5 |
Depreciation & Amortization |
9.5 |
2.9 |
6.5 |
0.1 |
9.3 |
4.8 |
4.5 |
EBITDA |
9.7 |
3.6 |
7.1 |
(1.0) |
14.0 |
8.0 |
6.0 |
Capital markets |
- |
- |
- |
- |
0.9 |
- |
- |
De-SPAC related expenses1) |
0.3 |
0.1 |
- |
0.2 |
- |
- |
- |
Other |
0.9 |
0.1 |
0.0 |
0.8 |
2.3 |
1.0 |
2.3 |
Acquisition expenses |
1.4 |
0.2 |
1.2 |
- |
0.5 |
0.2 |
0.1 |
Restructuring |
0.1 |
0.2 |
(0.1) |
0.0 |
- |
- |
- |
Adjusted EBITDA |
12.4 |
4.2 |
8.2 |
- |
17.7 |
9.2 |
8.4 |
1) The De-SPAC related expenses relate to costs incurred on the
legal merger of Azerion Holding B.V. and Azerion Group N.V. Refer
to the "Background information: Azerion Holding B.V. and Azerion
Group N.V." section for further information.
Breakdown of operating expenses in millions of EUR
|
Q3 |
YTD |
2022 |
2021 |
2022 |
2021 |
|
|
|
|
Personnel costs |
19.1 |
11.8 |
58.1 |
31.0 |
Other expenses |
9.1 |
7.8 |
44.1 |
17.8 |
Operating expenses |
28.2 |
19.6 |
102.2 |
48.8 |
Of which: |
|
|
|
|
Platform |
20.5 |
12.0 |
67.2 |
33.0 |
Premium Games |
7.6 |
7.6 |
21.6 |
15.8 |
|
|
|
|
|
Updated quarters Q3 and Q4 2021 to reflect audit
adjustments included in Annual Report 2021
The Annual Report included updated financial statements as
compared to the preliminary unaudited financial results full year
2021 published on 28 February 2022. The updates to the figures are
mainly associated with acquisition accounting, following the
completion of the acquisition audits, as well as the accounting
treatment of the business combination with European FinTech IPO
Company 1 (EFIC1) that was completed on 1 February 2022, tax and
the refinancing of the Company’s bonds in 2021.
The updated financial statements mainly impacted the results of
the periods Q3 and Q4 of 2021. The table below summarizes the
impacts in these quarters in the condensed statement of profit or
loss and other comprehensive income and reflects quarterly figures
aligned to the full year figures published in the Annual Report
2021.
The comparative figures in the tables in this press release are
reflecting the impacts summarised below.
|
Q3 2021 impact |
Q4 2021 impact |
FY 2021 impact |
In millions of EUR |
Platform |
Premium Games |
Total |
Platform |
Premium Games |
Total |
Platform |
Premium Games |
Total |
Costs of services & materials |
(1.1) |
- |
(1.1) |
(0.7) |
1.5 |
0.8 |
(1.8) |
1.5 |
(0.3) |
Gross profit |
(1.1) |
- |
(1.1) |
(0.7) |
1.5 |
0.8 |
(1.8) |
1.5 |
(0.3) |
Personnel costs |
0.4 |
0.2 |
0.6 |
0.6 |
0.2 |
0.8 |
1.0 |
0.4 |
1.4 |
Depreciation |
- |
- |
- |
0.9 |
0.9 |
1.8 |
0.9 |
0.9 |
1.8 |
Amortization |
- |
(1.9) |
(1.9) |
0.1 |
(1.9) |
(1.8) |
0.1 |
(3.8) |
(3.7) |
Impairment of non-current assets |
- |
- |
- |
(0.9) |
(0.9) |
(1.8) |
(0.9) |
(0.9) |
(1.8) |
Other gains and losses |
0.2 |
- |
0.2 |
(4.2) |
(2.5) |
(6.7) |
(4.0) |
(2.5) |
(6.5) |
Other expenses |
0.2 |
(0.2) |
- |
(0.7) |
0.3 |
(0.4) |
(0.5) |
0.1 |
(0.4) |
Operating profit / (loss) |
(0.3) |
(1.9) |
(2.2) |
(4.9) |
(2.4) |
(7.3) |
(5.2) |
(4.3) |
(9.5) |
Finance income |
|
|
(0.1) |
|
|
(0.1) |
- |
- |
(0.2) |
Finance costs |
|
|
- |
|
|
(0.4) |
|
|
(0.4) |
Income Tax expense |
- |
- |
0.5 |
- |
- |
0.2 |
- |
- |
0.7 |
Profit / (loss) for the year |
- |
- |
(1.8) |
- |
- |
(7.6) |
- |
- |
(9.4) |
|
|
|
|
|
|
|
|
|
|
EBITDA |
(0.3) |
- |
(0.3) |
(5.1) |
(0.5) |
(5.6) |
(5.4) |
(0.5) |
(5.9) |
Adjustments |
0.6 |
- |
0.6 |
5.1 |
0.8 |
5.9 |
5.7 |
0.8 |
6.5 |
Adjusted EBITDA |
0.3 |
- |
0.3 |
- |
0.3 |
0.3 |
0.3 |
0.3 |
0.6 |
Background information: Azerion Holding B.V. and Azerion Group
N.V.
Azerion Holding B.V. is the main holding subsidiary of Azerion
Group N.V., formerly known as EFIC1. The Azerion Holding B.V.
Interim Unaudited Financial Results Q3 2022 are released as
required by the terms and conditions of the listed Senior Secured
Callable Fixed Rate Bonds (ISIN: SE0015837794).
Azerion Group N.V.’s main assets are the shares it holds in
Azerion Holding B.V. and it does not have any material operational
activities. Consequently, the Q3 2022 financial results of Azerion
Holding B.V. as included in this communication are a reasonably
reliable proxy for the Q3 2022 financial results of Azerion Group
N.V., except that:
- Current assets is EUR 1.1 million higher due to prepayments on
insurance costs.
- Borrowings is EUR 15.0 million lower due to subordinated loans
that are included in equity in Azerion Group N.V. as the loans can
be settled with Azerion Group N.V. shares.
- Other liabilities is EUR 11.8 million higher mainly relating to
a) Azerion Group N.V. warrants amounting to EUR 17.8 million
recognized in Azerion Group N.V. and b) an offset in share options
amounting to EUR 5.8 million recorded as equity in Azerion Group
N.V. as those may be settled with Azerion Group N.V. shares. It
should be noted that the counterparty in question claims that
Azerion has breached the relevant SPA and disputes the right of
Azerion to settle in shares. The dispute is likely to be subject to
arbitration.
- In addition to the items impacting equity as mentioned above,
the Azerion Group N.V. equity is EUR 10.5 million higher due to the
issuance of treasury shares during Q3 2022, which also resulted in
an EUR 10.5 million higher cash inflow from financing
activities.
- Net finance costs is EUR 1.7 million higher due to a fair value
loss related to an increase in the fair value of the Azerion Group
N.V. warrants.
Legal merger
On 28 October 2022 Azerion announced the successful completion
of the written procedure requesting bondholders to approve the
legal merger of the parent company Azerion Group N.V. and Azerion
Holding B.V., with the main objective of simplifying and
streamlining Azerion’s financial reporting and other communications
to the market. A written procedure, initiated on 30 September 2022,
relating to Azerion Holding B.V.’s senior secured bonds with ISIN
SE0015837794, requested certain waivers and amendments to the terms
and conditions of the bonds, including approval of the proposed
legal merger of the parent company Azerion Group N.V. and Azerion
Holding B.V. A sufficient number of bondholders participated in the
written procedure in order to form a quorum, and a requisite
majority of the bondholders voted in favour to approve the
amendments. The amendments will become effective as soon
as possible via an amendment and restatement agreement and the
satisfaction of certain conditions precedent. Azerion intends to
execute this legal merger on 31 December 2022 and publish one set
of consolidated financial statements for 2022 for Azerion Group
N.V., which will be the surviving entity.
Condensed consolidated statement of profit or loss and
other comprehensive income
|
Q3 |
YTD |
In millions of EUR |
2022 |
2021 |
2022 |
2021 |
Revenue |
105.5 |
83.5 |
303.8 |
181.7 |
Costs of services & materials |
(67.0) |
(48.8) |
(190.6) |
(111.2) |
Gross profit |
38.5 |
34.7 |
113.2 |
70.5 |
Personnel costs |
(19.1) |
(11.8) |
(58.1) |
(31.0) |
Depreciation |
(1.7) |
(4.1) |
(4.9) |
(6.3) |
Amortization |
(7.8) |
(5.2) |
(21.4) |
(11.8) |
Other gains and losses |
(0.6) |
(1.1) |
(12.7) |
(0.7) |
Other expenses |
(9.1) |
(7.8) |
(44.1) |
(17.8) |
Operating profit / (loss) |
0.2 |
4.7 |
(28.0) |
2.9 |
Finance income |
0.2 |
(0.1) |
0.9 |
1.1 |
Finance costs |
(3.6) |
(2.1) |
(15.2) |
(19.2) |
Net Finance costs |
(3.4) |
(2.2) |
(14.3) |
(18.1) |
Profit / (loss) before tax |
(3.2) |
2.5 |
(42.3) |
(15.2) |
Income Tax expense |
(1.1) |
(0.1) |
(2.4) |
(0.1) |
Profit / (loss) for the period |
(4.3) |
2.4 |
(44.7) |
(15.3) |
Attributable to: |
|
|
|
|
Owners of the company |
(4.2) |
2.2 |
(44.5) |
(15.3) |
Non-controlling interest |
(0.1) |
0.2 |
(0.2) |
0.0 |
Profit / (loss) for the period |
(4.3) |
2.4 |
(44.7) |
(15.3) |
Exchange difference on translation of foreign operations |
- |
(0.3) |
(1.3) |
0.1 |
Remeasurement of net defined benefit liability |
- |
- |
- |
- |
Total comprehensive income for the period |
(4.3) |
2.1 |
(46.0) |
(15.2) |
Total comprehensive (loss) / income attributable
to: |
|
|
|
|
Owners of the company |
(4.3) |
1.9 |
(45.9) |
(14.8) |
Non-controlling interest |
- |
0.2 |
(0.1) |
(0.4) |
Condensed consolidated statement of financial
position
In millions of EUR |
30 September 2022 |
31 December 2021 |
|
|
|
Assets |
|
|
Non-current assets |
364.6 |
323.8 |
Goodwill |
147.3 |
123.0 |
Intangible assets |
157.5 |
141.9 |
Property, plant and equipment |
18.8 |
18.5 |
Non-current financial assets |
36.9 |
36.1 |
Deferred tax asset |
4.0 |
4.2 |
Investment in joint ventures |
0.1 |
0.1 |
Current assets |
158.1 |
140.0 |
Trade and other receivables |
93.8 |
91.3 |
Contract assets |
19.1 |
12.1 |
Current tax assets |
1.1 |
1.3 |
Cash and cash equivalents |
44.1 |
35.3 |
Total assets |
522.7 |
463.8 |
|
|
|
Equity |
|
|
Shareholders’ equity |
22.7 |
(8.6) |
Non-controlling interest |
1.6 |
1.7 |
Total equity |
24.3 |
(6.9) |
|
|
|
Liabilities |
|
|
Non-current liabilities |
270.9 |
260.2 |
Borrowings |
214.4 |
199.0 |
Lease liabilities |
13.5 |
14.3 |
Provisions |
1.0 |
0.4 |
Employee benefits |
1.1 |
1.0 |
Deferred tax liability |
32.6 |
29.9 |
Other non-current liability |
8.3 |
15.6 |
Current liabilities |
227.5 |
210.5 |
Borrowings |
6.2 |
6.8 |
Lease liabilities |
4.4 |
4.7 |
Provisions |
0.9 |
1.0 |
Trade and other payables |
170.2 |
141.1 |
Other current liabilities |
40.6 |
53.5 |
Contract liabilities |
0.5 |
0.4 |
Current tax liabilities |
4.7 |
3.0 |
Total liabilities |
498.4 |
470.7 |
|
|
|
Total equity and liabilities |
522.7 |
463.8 |
Condensed consolidated statement of cash
flows
|
Q3 |
YTD |
In millions of EUR |
2022 |
2021 |
2022 |
2021 |
Cash flows from operating activities |
|
|
|
|
Operating profit / (loss) |
0.2 |
4.7 |
(28.0) |
2.9 |
Adjustments for operating profit / (loss) |
8.3 |
12.1 |
52.9 |
23.1 |
|
|
|
|
|
Changes in working capital items: |
|
|
|
|
Decrease (increase) in net receivables |
(16.9) |
3.5 |
(5.9) |
4.5 |
Increase (decrease) in accounts payables and other payables |
17.5 |
(29.0) |
19.1 |
(38.1) |
|
|
|
|
|
Utilization of provisions |
(0.9) |
- |
(1.6) |
- |
Income tax paid |
(0.7) |
(0.2) |
(1.2) |
(0.2) |
Interest paid |
(4.6) |
(2.1) |
(14.0) |
(5.3) |
Net cash provided by (used for) operating activities excluding
employee SARs related cash outflows |
2.9 |
(11.0) |
21.3 |
(13.1) |
Employee SARs related cash outflows |
(0.1) |
- |
(7.2) |
- |
Net cash provided by (used for) operating activities including
employee SARs related cash outflows |
2.8 |
(11.0) |
14.1 |
(13.1) |
Cash flows from investing activities |
|
|
|
|
Net capital expenditures |
(5.0) |
(5.7) |
(15.6) |
(11.2) |
Net cash outflow on acquisition of subsidiaries |
(6.2) |
(8.2) |
(45.4) |
(38.6) |
Net cash provided by (used for) investing activities |
(11.2) |
(13.9) |
(61.0) |
(49.8) |
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Capital contributions |
15.0 |
- |
80.5 |
- |
De-SPAC related expenses |
(0.4) |
- |
(17.3) |
- |
Other financing activities |
(0.9) |
(1.2) |
(7.0) |
(3.5) |
Proceeds from external borrowings |
- |
- |
- |
227.5 |
Repayment of external borrowings |
- |
(10.3) |
- |
(110.6) |
Increase in loans to related parties |
- |
- |
- |
(11.9) |
Early settlement of Senior Secured Callable Floating Rate
Bonds |
- |
- |
- |
(7.7) |
Net cash provided by (used for) financing activities |
13.7 |
(11.5) |
56.2 |
93.8 |
|
|
|
|
|
Effect of changes in exchange rates on cash and cash
equivalents |
(0.2) |
(0.3) |
(0.5) |
(0.1) |
Effect of exchange rate changes & accounting principles |
(0.2) |
(0.3) |
(0.5) |
(0.1) |
|
|
|
|
|
Cash flow variation |
5.1 |
(36.7) |
8.8 |
30.8 |
|
|
|
|
|
Cash and cash equivalents at the beginning of the period |
39.0 |
77.9 |
35.3 |
10.4 |
Cash and cash equivalents at the end of the period |
44.1 |
41.2 |
44.1 |
41.2 |
Definitions
Adjusted EBITDA means in respect of the period
the consolidated profit from ordinary activities according to the
latest Financial Report(s):
a) before deducting any amount of tax on
profits, gains or income paid or payable by any
subsidiary;b) before deducting any Net Finance
Costs;c) before taking into account any
extraordinary items and any non-recurring items which are not in
line with the ordinary course of
business;d) before taking into account any
Transaction Costs;e) not including any accrued
interest owing to any subsidiary;f) before taking
into account any unrealised gains or losses on any derivative
instrument (other than any derivative instruments which are
accounted for on a hedge account basis);g) after
adding back or deducting, as the case may be, the amount of any
loss or gain against book value arising on a disposal of any asset
(other than in the ordinary course of trading) and any loss or gain
arising from an upward or downward revaluation of any asset;
andh) after adding back any amount attributable to
the amortisation, depreciation or depletion of assets of any
subsidiary
Adjusted EBITDA Margin means Adjusted EBITDA as
a percentage of revenue
Average number of digital ads sold per month
(paid impressions) represents the number of digital advertisements
displayed to users of game and non-game content. The numbers
reported do not include volumes from past acquisitions that are not
yet fully integrated. As of this quarter, the reported numbers
include the following previous acquisitions: advertising auction
platforms Improve Digital, Admoove, Delta Projects and Infinia, as
well as publisher monetisation services Headerlift, Pubgalaxy,
Sublime, Inskin, Strossle, Keymobile, Madvertise and
Quantum.
Average gross revenue per million accepted ad requests
from the advertising auction platform is calculated by
dividing gross advertising revenue by a million of advertisement
requests. Not all advertisement requests are processed and become
eligible to be fulfilled as an advertisement sold, therefore this
metric measures our efficiency and overall profitability of the
digital advertising auction platform, demonstrating that the
revenue generated by the advertisements that are sold also
remunerate and more than cover the costs of all the advertisement
requests. As of this quarter we take into account the filtering
(optimising) to better show our ongoing efforts to lower the costs
of revenue.
Average time in game per day measures how many
minutes per day, on average, the players of Premium Games spend in
our games. This demonstrated their engagement with the games, which
generates more opportunities to grow the ARPDAU.
Average DAUs means average
daily active users, which is the number of distinct users per day
averaged across the relevant period.
ARPDAU means 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.
Azerion Holding means Azerion Holding B.V. and
Holding Group means Azerion Holding and each of
its subsidiaries from time to time and Holding Group Company means
any of them.
EBIT means, in respect of the period, the
consolidated profit from ordinary activities according to the
latest Financial Report(s):
a) before deducting any amount of tax on
profits, gains or income paid or payable by any member of the
Group;b) before deducting any Net Finance
Charges
EBITDA means in respect of the period the
consolidated profit from ordinary activities according to the
latest Financial Report(s):
a) before deducting any amount of tax on
profits, gains or income paid or payable by any
subsidiary;b) before deducting any Net Finance
Costs;c) before deducting any amount attributable
to the amortisation, depreciation, or depletion of assets of any
subsidiary.EFIC1 means European FinTech IPO
Company 1 B.V.
Financial Indebtedness means as defined in the
terms and conditions of the Senior Secured Callable Fixed Rate
Bonds ISIN: SE0015837794 any indebtedness in respect of:
a) monies borrowed or raised. including Market
Loans;b) the amount of any liability in respect of
any Finance Leases;c) receivables sold or
discounted (other than any receivables to the extent they are sold
on a non-recourse basis);d) any amount raised
under any other transaction (including any forward sale or purchase
agreement) having the commercial effect of a
borrowing;e) 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);f) 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; andg) (without double
counting) any guarantee or other assurance against financial loss
in respect of a type referred to in the above paragraphs
(a)-(f).Gross Profit Margin means Gross Profit as
a percentage of revenue
Gross Profit means the profit made after
subtracting all (variable) costs that are related to manufacturing
of its products or services. The gross profit can be calculated by
deducting the cost of goods sold (COGS) from total sales.
Net Interest Bearing Debt as defined in the
terms and conditions of the Senior Secured Callable Fixed Rate
Bonds ISIN: SE0015837794 means the aggregate interest bearing
Financial Indebtedness less cash and cash equivalents of Azerion
Holding B.V. and its subsidiaries from time to time in accordance
with the Accounting Principles (for the avoidance of doubt,
excluding any Bonds owned by the Issuer, guarantee, 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 Azerion Holding Group Company) as such terms are defined in the
terms and conditions of the Senior Secured Callable Fixed Rate
Bonds ISIN: SE0015837794
Operating expenses are defined as the aggregate
of personnel costs and other expenses as reported in the statement
of Other comprehensive income. More details on the cost by nature
reporting can be found in the published annual financial statements
of 2021.
Transaction Costs means all fees, costs and
expenses, stamp, registration and other taxes incurred by Azerion
Holding or any other Holding Group Company in connection with (i)
the Bond Issue, (ii) any Subsequent Bond Issue, (iii) the listing
of the Bonds or any Subsequent Bonds, (iv) acquisitions, mergers
and divestments of companies and (v) an Equity Listing Event, as
such terms are defined in the terms and conditions of the Senior
Secured Callable Fixed Rate Bonds ISIN: SE0015837794
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 Holding B.V. as
included in this communication are required to be disclosed
pursuant to the terms and conditions of the Senior Secured Callable
Fixed Rate Bonds ISIN: SE0015837794.
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 EBITDA and 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 Holding B.V. and Azerion Group N.V.’s
cash flow based on IFRS. Even though the non-IFRS financial
measures are used by management to assess Azerion Holding B.V. and
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 Holding B.V. and 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. We are 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 and Azerion Holding B.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.com
Media relations: press@azerion.com
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