Strong growth and delivery while going public
Highlights of Q1 2022
- Net Revenue of over
EUR 94 million , more than doubling Q1 2021, mainly driven by strong growth in the Platform segment. - Adjusted EBITDA of nearly
EUR 6 million , up 118% compared to Q1 2021, primarily boosted by the Premium Games segment. - Expanded the partnership with Ubisoft, adding 10 exclusive titles, following the successful development, release and distribution of
Hungry Shark Arena - Completed the integration of Habbo Avatars collection, offering unique playable Avatars in the Habbo metaverse.
- Announced the acquisition of digital marketing company Infinia, bolstering our media platform capabilities, sales force and volumes in
Spain andLatin America . - In May, we won the Digital Media Owners Spring Award as number one media owner, surveyed by the
Institute of Practitioners in Advertising in theUK .
Financial Overview
Financial results (EURm) | Pro forma | ||
Q1 2022 | Q1 2021 | LTM | |
Net Revenue | 94,4 | 45,5 | 403,2 |
COGS | (61,5) | (30,6) | |
Gross profit | 32,8 | 15,0 | |
Operating & Other Expenses | (44,9) | (18,1) | |
Operating profit / (loss) | (12,1) | (3,1) | |
EBITDA | (3,9) | 1,7 | |
Adjusted EBITDA | 5,9 | 2,7 | 53,5 |
Revenue growth, % | 107,3% | ||
Gross margin, % | 34,8% | 32,9% | |
Adjusted EBITDA growth, % | 117,6% | ||
Adjusted EBITDA margin, % | 6,2% | 5,9% | 13,2% |
Co-CEO
“This quarter demonstrated our capacity to deliver results while completing our listing on Euronext Amsterdam. Our financial performance continued to improve and, despite macroeconomic volatility, we remain confident in our guidance to deliver at least
Co-CEO Atilla Aytekin said:
“Listing Azerion was an important milestone for our company, welcomed by our clients and partners, who increasingly approach us with business propositions. Our market continues to consolidate and we remain actively working on our acquisition funnel to complement our organic growth with more volume, capabilities and technology. As we continue to mature our M&A pipeline, we will consider a variety of options to fund acquisitions, including raising equity.”
Financial overview Q1 2022
Revenue
Revenue for the quarter amounted to
Earnings
We delivered
The loss before tax amounted to
Cash flow
Our cash flow from operating activities in Q1 2022 was an inflow of
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 Q1 2022 we capitalized
Acquisitions
During Q1 2022 we announced the acquisition of Infinia, which completed in
Financial position and financing
Our net interest-bearing debt amounted to
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
Platform Financial Highlights
Financial results (EURm) | ||
Platform | Q1 2022 | Q1 2021 |
Net Revenue | 72,5 | 34,2 |
COGS | (50,2) | (24,3) |
Gross profit | 22,3 | 9,9 |
Operating & Other Expenses | (33,8) | (13,2) |
Operating profit / (loss) | (11,5) | (3,3) |
EBITDA | (6,4) | 0,7 |
Adjusted EBITDA | 2,0 | 1,2 |
Revenue growth, % | 111,8% | |
Gross margin, % | 30,8% | 29,1% |
Adjusted EBITDA growth, % | 64,6% | |
Adjusted EBITDA margin, % | 2,7% | 3,5% |
Financial data for Q1 2021 has been revised to reflect reporting segments adopted as of Q3 2021
Platform revenue was
Besides the impact of acquisitions, the improved financial performance reflects increased quality and quantity of the casual games distribution portfolio, achieved through exclusive partnerships and organic influx of content providers. New quality content and continuous adaptation of existing titles contributed to an increase in revenue compared to Q1 last year. During Q1 2022 we added approximately 745 new titles to our casual games distribution portfolio. In addition, we added 20 new publisher partners to our network to facilitate growth in key markets.
Advertising - Selected KPIs
Advertising Selected KPIs | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 |
Avg. Digital Ads Sold per Month (bn) | 4.4 | 4.9 | 4.3 | 3.2 | 2.9 |
Avg. Gross Revenue per Million Ad Requests (EUR) | 6.10 | 9.73 | 7.14 | 6.72 | 3.66 |
- Avg. Digital Ads Sold per Month: the average number of paid impressions per month increased to 4.4 billion from 2.9 billion in Q1 2021, reflecting significant growth in the advertising business.
- Avg. Gross Revenue per Million Ad Requests: Average gross revenue per million ad requests was
EUR 6.10 in Q1 2022, compared toEUR 3.66 in Q1 2021.
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 Financial Highlights
Financial results (EURm) | ||
Premium Games | Q1 2022 | Q1 2021 |
Net Revenue | 21,8 | 11,3 |
COGS | (11,3) | (6,3) |
Gross profit | 10,5 | 5,0 |
Operating & Other Expenses | (11,0) | (4,8) |
Operating profit / (loss) | (0,6) | 0,1 |
EBITDA | 2,5 | 1,3 |
Adjusted EBITDA | 3,9 | 1,5 |
Revenue growth, % | 93,7% | |
Gross margin, % | 48,0% | 44,2% |
Adjusted EBITDA growth, % | 151,9% | |
Adjusted EBITDA margin, % | 17,7% | 13,6% |
Financial data for Q1 2021 has been revised to reflect reporting segments adopted as of Q3 2021
Premium Games revenue was
The improved financial results reflect the acquisition of Whow Games and lower user acquisition costs. Results were also positively impacted by stronger performance of Governor of Poker 3 and
Results also benefited from the expansion of Web 3.0 with the integration of the Habbo Avatars NFT collection, which offers unique playable Avatars, airdrops towards owners and the feature to sell unique in-game usable NFT furniture, in the Habbo metaverse.
Premium Games – Selected KPIs
Premium Games Selected KPIs | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 |
Avg. Time in Game per Day (min) | 82 | 80 | 79 | 79 | 79 |
Avg. DAUs (thousands) | 604 | 599 | 616 | 693 | 696 |
Avg. ARPDAU (EUR) | 0.38 | 0.42 | 0.37 | 0.34 | 0.33 |
Note: Whow Games included for the full historical period for comparability purposes
- Avg. Time in Game per Day: time spent playing our Premium Games continued to grow steadily, mainly due to improved first time user experience and continuous improvement of live operations.
- Avg. DAUs: Daily Active Users increased by 1% compared to Q4 2021, following the reset of number of users post Covid-19 elevated levels.
- Avg. ARPDAU: Average Revenue per Daily Active User decreased compared to Q4 2021, due to seasonality. Compared to Q1 2021, ARPDAU increased from
EUR 0.33 toEUR 0.38 , primarily driven by improved live operations with better events and promotions.
Background information:
The first consolidated financial results for the post business combination
Condensed Consolidated financial statements (unaudited)
The condensed consolidated financial statements have been prepared in accordance with IFRS.
Condensed consolidated statement of profit or loss and other comprehensive income (EURm) | Q1 2022 | Q1 2021 | ||||||
Revenue | 94,4 | 45,5 | ||||||
Costs of services & materials | (61,5) | (30,6) | ||||||
Gross profit | 32,8 | 15,0 | ||||||
Personnel costs | (18,6) | (8,9) | ||||||
Depreciation | (1,6) | (1,0) | ||||||
Amortization | (6,5) | (3,5) | ||||||
Impairment of non-current assets | - | - | ||||||
Other gains and losses | (9,3) | (0,3) | ||||||
Other expenses | (8,9) | (4,5) | ||||||
Operating profit / (loss) | (12,1) | (3,2) | ||||||
Finance income | 0,4 | 0,7 | ||||||
Finance costs | (5,9) | (2,7) | ||||||
Net finance costs | (5,5) | (2,0) | ||||||
Share in profit / (loss) of joint venture | - | - | ||||||
Profit / (loss) before tax | (17,6) | (5,1) | ||||||
Income Tax expense | (0,7) | (0,1) | ||||||
Profit / (loss) for the period | (18,3) | (5,2) | ||||||
Attributable to: | ||||||||
Owners of the company | (18,0) | (4,7) | ||||||
Non-controlling interest | (0,2) | (0,4) | ||||||
Profit / (loss) for the period | (18,3) | (5,2) | ||||||
Exchange difference on translation of foreign operations | (0,4) | 4,5 | ||||||
Remeasurement of net defined benefit liability | 0,0 | 0,1 | ||||||
Total comprehensive income for the period | (18,6) | (0,6) | ||||||
Total comprehensive (loss) / income attributable to: | ||||||||
Owners of the company | (17,9) | 0,2 | ||||||
Non-controlling interest | (0,7) | (0,8) |
Condensed consolidated statement of financial position (EURm) | |||||
Assets | |||||
Non-current assets | 321,1 | 323,6 | |||
Intangible assets (incl. | 262,6 | 264,8 | |||
Property, plant and equipment | 19,1 | 18,5 | |||
Non-current financial assets | 36,2 | 36,1 | |||
Deferred tax asset | 3,2 | 4,2 | |||
Investment in joint ventures | 0,0 | 0,1 | |||
Current assets | 131,7 | 140,1 | |||
Trade and other receivables | 76,5 | 91,3 | |||
Contract assets | 11,6 | 12,1 | |||
Current tax assets | 1,1 | 1,3 | |||
Cash and cash equivalents | 42,6 | 35,3 | |||
Total assets | 452,9 | 463,7 | |||
Equity | |||||
Shareholders' equity | (1,1) | (8,6) | |||
Non-controlling interest | 1,4 | 1,7 | |||
Total equity | 0,4 | (6,9) | |||
Liabilities | |||||
Non-current liabilities | 258,3 | 260,2 | |||
Borrowings | 198,8 | 199,0 | |||
Lease liabilities | 13,9 | 14,3 | |||
Provisions | 1,2 | 0,4 | |||
Employee benefits | 1,0 | 1,0 | |||
Deferred tax liability | 28,2 | 29,8 | |||
Other non-current liability | 15,2 | 15,6 | |||
Current liabilities | 194,2 | 210,5 | |||
Borrowings | 5,5 | 6,8 | |||
Lease liabilities | 5,1 | 4,7 | |||
Provisions | 0,3 | 1,0 | |||
Trade and other payables | 135,5 | 141,1 | |||
Other current liabilities | 44,6 | 53,5 | |||
Contract liabilities | 0,6 | 0,4 | |||
Current tax liabilities | 2,6 | 3,0 | |||
Total liabilities | 452,5 | 470,6 | |||
Total equity and liabilities | 452,9 | 463,7 |
Condensed consolidated statement of cash flow (EURm) | Q1 2022 |
Cash flows from operating activities | |
Operating profit / (loss) | (12,0) |
Adjustments for non-cash operating profit / (loss) | 9,8 |
Changes in working capital items: | |
Decrease / (increase) in net receivables | 20,2 |
Increase / (decrease) in accounts payables and other payables | (5,8) |
Income tax paid | (0,4) |
Interest paid | (5,3) |
Net cash provided by (used for) operating activities | 6,5 |
Cash flows from investing activities | |
Net capital expenditures | (5,6) |
Decrease / (increase) in loans and other investments | 0,0 |
Net cash outflow on acquisition of subsidiaries | (2,6) |
Net cash provided by (used for) investing activities | (8,2) |
Cash flows from financing activities | |
Capital contributions | 12,2 |
Other financing activities | (3,2) |
Net cash provided by (used for) financing activities | 9,0 |
Effect of changes in exchange rates on cash and cash equivalents | (0,0) |
Effect of exchange rate changes & accounting principles | (0,0) |
Cash flow variation | 7,3 |
Cash and cash equivalents at the beginning of the year | 35,3 |
Cash and cash equivalents at the end of the period | 42,6 |
Other information
Q1 2022 | ||||
Reconciliation of net income to Adjusted EBITDA (EURm) | Premium Gaming | Platform | ||
Profit / (loss) for the period | (18,3) | |||
Income Tax expense | 0,7 | |||
Profit / (loss) before tax | (17,6) | |||
Net finance costs | 5,6 | |||
Operating profit / (loss) (also called EBIT) | (12,0) | (0,6) | (11,5) | |
Depreciation & Amortization | 8,1 | 3,1 | 5,1 | |
EBITDA | (3,9) | 2,5 | (6,4) | |
Transition expenses - Capital Markets* | 8,8 | 1,3 | 7,5 | |
Other non-recurring income or expenses | 1,0 | 0,1 | 0,9 | |
Adjusted EBITDA | 5,9 | 3,9 | 2,0 | |
*Early exercised share-based appreciation rights |
Interest Bearing Debt (EURm) | 2022 | ||
Total non-current indebtedness | 212,7 | 213,3 | |
Total current indebtedness | 10,6 | 11,5 | |
Total financial indebtedness | 223,3 | 224,8 | |
Adjustments | |||
Add Postponed VAT payables | 0,6 | 0,5 | |
Add Postponed Wage tax payable | 4,5 | 3,2 | |
Deduct Zero interest bearing loans | 0,6 | 0,7 | |
Interest Bearing Debt | 227,9 | 227,8 | |
Less: Cash and cash equivalents | (42,6) | (35,3) | |
Net Interest Bearing Debt | 185,3 | 192,5 |
Cautionary Notice
This communication contains information that qualifies as inside information within the meaning of Article 7(1) of the
This communication may include forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words and expressions such as believes, estimates, plans, projects, anticipates, expects, intends, may, will, should or other similar words or expressions are typically used to identify forward-looking statements. Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause the actual results of the company to differ materially from future results expressed or implied by such forward-looking statements.
Any forward-looking statements reflect the company’s current views and assumptions based on information currently available to the company’s management. Forward-looking statements speak only as of the date they are made, and the company does not assume any obligation to update such statements, except as required by law.
This report has been prepared as required by the terms and conditions of the Senior Secured Callable Fixed Rate Bonds ISIN: SE0015837794. This report has not been reviewed or audited.
Some financial positions, which have currently been assessed for
Certain financial data included in the report consists of alternative performance measures (“non-IFRS financial measures”), including EBITDA and Adjusted EBITDA. The alternative performance 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
Adjusted EBITDA as defined in the Definitions section of this Interim Report. For all definitions and reconciliations of alternative performance measures please also refer to www.azerion.com/investors. This report may contain forward-looking alternative performance measures. We are unable to provide a reconciliation of these forward-looking alternative performance measures to the most comparable IFRS financial measure because certain information is dependent on future events some of which are outside the control of the company.
Contact
Investor Relations: ir@azerion.com Media relations: press@azerion.com | ||
Definitions
Adjusted EBITDA means in all places other than in relation to Pro Forma LTM, in respect of the period, the consolidated profit of the
(a) before deducting any amount of tax on profits, gains or income paid or payable by any member of the
(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
(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; and
(h) after adding back any amount attributable to the amortisation, depreciation or depletion of assets of members of the
Adjusted EBITDA means in the context of Pro Forma LTM, EBITDA as defined in the terms and conditions of the Senior Secured Callable Fixed Rate Bonds ISIN: SE0015837794, in respect of the Reference Period, the consolidated profit of the
(a) before deducting any amount of tax on profits, gains or income paid or payable by any member of the
(b) before deducting any Net Finance Cost
(c) before taking into account any extraordinary items and any non-recurring items which are not in line with the ordinary course of business provided that such items are not in excess of an amount equal to ten (10) per cent. of EBITDA in the Reference Period;
(d) before taking into account any Transaction Costs;
(e) not including any accrued interest owing to any
(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;
(h) after deducting the amount of any profit (or adding back the amount of any loss) of any
(i) plus or minus the
(j) after adding back any amount attributable to the amortisation, depreciation or depletion of assets of members of the
Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of revenue
ARPDAU means Average Revenue per Daily Active User - revenue per period divided by days in the period divided by average daily active users in that period
Average DAUs: DAUs means Daily Active Users and average DAUs is the number of distinct users per day averaged across the relevant period
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 of the
(a) before deducting any amount of tax on profits, gains or income paid or payable by any member of the
(b) before deducting any Net Finance Costs;
(c) before deducting any amount attributable to the amortisation, depreciation or depletion of assets of members of the
EFIC1 means
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:
- 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;
Gross Margin means Gross Profit as a percentage of revenue
Gross Profit means the profit
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 the
Pro Forma LTM means the last twelve months Revenue or Adjusted EBITDA (as applicable) adjusted to include the contribution from companies or assets acquired during the last twelve months as if they had been acquired at the start of the last twelve months
Reference Period means as defined in the terms and conditions of the Senior Secured Callable Fixed Rate Bonds ISIN: SE0015837794 each period of twelve consecutive calendar months
Transaction Costs means all fees, costs and expenses, stamp, registration and other taxes incurred by
Source:
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