Making Science Group Sa · BME:MAKS
Making Science Group Sa — FY2022 Earnings Presentation
55 slides from Making Science Group Sa's earnings presentation, May 29, 2023
Slide 1: FY2022 Results and Q1 2023 Update
making science | Investors FY2022 Results and Q1 2023 Update Investor Presentation José Antonio Martínez Aguilar CEO Making Science May 29, 2023 Making Science Group, SA - Confidential
Slide 2: Disclaimer
making science | Investors Disclaimer This document and the conference-call webcast (including the Q&A session) may contain forward-looking statements and information (hereinafter, the “Information”) relating to MAKING SCIENCE GROUP, S.A (hereinafter “Making Science” or the “Company”). This informat
Slide 3: Index
making science | Investors Investor Presentation FY2022 Results and Q1 2023 Update 01 Overview of Making Science 02 Core Business: Growth Strategy 03 Core Business: US Expansion 04 Investments: E-Commerce & Products 05 FY2022 and Financial Update Index 06 Q1 2023 Update Appendix 3 Making Science Gro
Slide 4: 01. Overview of Making Science
making science | Investors 01. Overview of Making Science Making Science Group, SA - Confidential
Slide 5: Making Science is a Marketing and Technology Consulting Firm
making science | Investors Making Science is a Marketing and Technology Consulting Firm Helping Companies Accelerate Their Digital Capabilities Making Science is an international digital acceleration company with more than 1,200 employees and a presence in 14 countries. Making Science’s businesses a
Slide 6: 360º Capabilities Across All Aspects of Digital Marketing Services
making science | Investors 360º Capabilities Across All Aspects of Digital Marketing Services Our strategic framework is based on the understanding that our digital ecosystem is a complex puzzle and the importance of building an integrated strategy Overview of Making Science Benefits of building a ro
Slide 7: Core Digital Business Services
making science | Investors Overview of Making Science Services Lines of Business Example Services Advertising consulting Organic ad consulting Creativity and content Digital Marketing Search engines, social & Search engine optimization Brand strategy, content other media formats (SEO) and organic so
Slide 8: Our Flywheel
making science | Investors Our Flywheel Complementary, high-growth lines of business that reinforce the value proposition to the client Digital Technology, Cloud Marketing & Software Our access to clients’ We have a large pool of businesses and our software engineers, data technological partnerships
Slide 9: Some of Our Clients
making science | Investors Some of Our Clients We create value through integrated solutions to deliver a 360-degree, results-driven experience Overview of Making Science 9 Making Science Group, SA - Confidential
Slide 10: Operating in Partnership With the Largest Global Platforms
making science | Investors Operating in Partnership With the Largest Global Platforms We are experienced in all channels of the digital ecosystem Google We are partners of the Google largest companies in the Security sector, which gives us a Meta complete vision of the digital advertising ecosystem.
Slide 11: Investment Highlights
making science | Investors Investment Highlights Why invest in Making Science Unique combination of synergistic businesses bringing together digital marketing, data 1 analytics and cloud & software technology 2 Strong organic growth performance, outpacing the sector’s high growth rate Sound track re
Slide 12: 02. Core Business: Growth Strategy
making science | Investors 02. Core Business: Growth Strategy Making Science Group, SA - Confidential
Slide 13: Our Multi-Pronged Growth Strategy
making science | Investors Our Multi-Pronged Growth Strategy 4 Create 3 Partnerships to Accelerate Global Our goal is to be one Use Innovation and Growth of the top advertising 2 Technology to Drive and technology ● Continue to work with 1 Expand Global Customer Success Local Planet and consulting c
Slide 14: Why Pursue Internationalization?
making science | Investors Why Pursue Internationalization? The benefits of global scale in our industry Relationships with major New business and market share Local presence global partners opportunities Local team facilitates communication and Increase collaboration with major global Ability to off
Slide 15: Global Diversification Progress: Expanding Global Reach
making science | Investors Global Diversification Progress: Expanding Global Reach Our aspiration is to be present in the top 20 global advertising markets Offices Spain (Madrid, Barcelona, Mallorca, Valencia, Alicante) France (Paris) Portugal (Lisbon) Italy (Padua, Milan) UK (London) Ireland (Dublin
Slide 16: Global Diversification Progress: EBITDA and Employees
making science | Investors Global Diversification Progress: EBITDA and Employees Our aspiration is to be present in the top 20 global advertising markets EBITDA by Region (2020 vs. 2022)¹ Making Science has made significant 5% progress in diversifying throughout Europe and the global economy. 59% 39%
Slide 17: Organic Growth: 2022 Highlights
making science | Investors 1 Organic Growth: 2022 Highlights Global demand for digital services will continue to grow Organic Growth Highlights (2022) In 2022, Making Science continued executing its organic growth plan in the high-growth digital industries it competes in. 31% 250 Organic EBITDA Grow
Slide 18: Acquisition Strategy: Overview
making science | Investors 2 Acquisition Strategy: Overview Deep experience in acquiring and integrating companies to accelerate their growth Acquisition Criteria ✓ Pure digital companies or traditional full-service agencies ✓ Proven track record of growth and strong margins ✓ Ability for Making Sci
Slide 19: Acquisition Strategy: The Evolution of Making Science
making science | Investors 2 Acquisition Strategy: The Evolution of Making Science €210M 1200+ Diversifying across the globe into top digital advertising markets Making Science has expanded its global footprint through a combination of €110M acquisitions, partnerships, and joint ventures 800+ (69.8%
Slide 20: Innovation and Technology: Gauss
making science | Investors 3 Innovation and Technology: Gauss Innovative AI technology developed by Making Science Product developed by Making Science that provides easy activation of data through Artificial Intelligence. Designed to provide solutions for digital marketing and sales. Gauss AI helps t
Slide 21: Innovation and Technology: Ad-Machina
making science | Investors 3 Innovation and Technology: Ad-Machina State-of-the-art campaign automation technology for Google Ads “ad-machina is a natural language generation technology that transforms data feeds into advanced Google ads campaigns, generating more sales and at a lower cost. “ Core B
Slide 22: Partnerships: Local Planet Partnership
making science | Investors 4 Partnerships: Local Planet Partnership Strengthening our position as a global operator In October 2021, Making Science joined Local Planet as its specialist digital consultancy partner. With Local Planet’s global reach, Making Science has been able to offer our best-in-c
Slide 23: 03. Core Business: US Expansion
making science | Investors 03. Core Business: US Expansion Making Science Group, SA - Confidential
Slide 24: Certified Partner Status
making science | Investors Certified Partner Status After 18 months of work, we have gotten our US Google Marketing Platform Certification Core Business: US Expansion 24 Making Science Group, SA - Confidential
Slide 25: Now is the Time to Grow in the US
making science | Investors Now is the Time to Grow in the US Making Science is breaking into New York the US market with a major expansion of its US-based team CHICAGO US SERVICES CENTER OF EXCELLENCE Appointed three C-level executives, all former Googlers, to elevate awareness of Making Science’s d
Slide 26: Expanding in the US Market Organically
making science | Investors Expanding in the US Market Organically MarTech consulting Making Science is investing heavily into AdTech and MarTech Google Marketing Platform implementation and the US expansion organically, rather than consulting services regarding Ad&MarTech Initial Focus: through M&A
Slide 27: 24/7 Professional Services – Team Certifications
making science | Investors 24/7 Professional Services – Team Certifications Privacy for Agencies & Partners Certification Core Business: US Expansion DV360 SA360 GA360/GA4 Creative CM MOBILE PRIVACY INTERNATIONAL NETWORK Timezone support Local knowledge Language support Cost efficiency 27 Making Scien
Slide 28: The US Market Opportunity
making science | Investors The US Market Opportunity Largest Digital Advertising Markets Worldwide (2023)¹ The US market is the largest digital advertising market in the world, encompassing ~40% of global digital advertising spend and ~53% excluding China Despite its large size, it is forecasted to
Slide 29: US Market Growth: Ad Spending by Segment
making science | Investors US Market Growth: Ad Spending by Segment US Advertising Spending by Segment (US$B)¹ Search Advertising makes up approximately ~45% of digital advertising spending in the US, and has a higher rate of growth than other large segments Core Business: US Expansion 1. Source: St
Slide 30: North American Presence of Other Consulting Firms
making science | Investors North American Presence of Other Consulting Firms Share of Net Revenue from North America (2022)¹ In comparison with other major global agencies and consulting firms, Making Science has very little exposure to North America. This represents an opportunity to grow in this re
Slide 31: 04. Investments: E-Commerce & Products
making science | Investors 04. Investments: E-Commerce & Products Making Science Group, SA - Confidential
Slide 32: Ventis Overview
making science | Investors Ventis Overview E-commerce business with significant potential for value creation Ventis is an e-commerce business acquired by Making Science in May 2021 Product Categories Fashion, Home and Gourmet Based in Italy Countries Launched in Spain in Q4 2021 Revenue €10.6M (2022)
Slide 33: Recent Initiatives
making science | Investors Recent Initiatives Making Science is executing an operational turnaround to enhance Ventis' growth and profitability MARKETING PRODUCT TECHNOLOGY ● Improved SEO structure ● Automation process to ● Revamped UX with improved ● Upgraded media strategy, speed up merchant naviga
Slide 34: Path to First Quarter of Profitability
making science | Investors Path to First Quarter of Profitability Ventis achieved its first breakeven recurring EBITDA in Q1 Ventis achieved its first breakeven quarter in Recurring EBITDA Bridge (Q1 2022 - Q1 2023) Q1 2023, due to the impact of: in € 000s ● Increase in Gross Margin ○ Refined pricing me
Slide 35: 05. FY2022 and Financial Update
making science | Investors 05. FY2022 and Financial Update Making Science Group, SA - Confidential
Slide 36: Financial Highlights
making science | Investors Financial Highlights FY2022 Gross Margin Recurring EBITDA ↑75% ↑53% €11.0M YoY Growth YoY Growth FY2022 Recurring EBITDA FY2022 and Financial Update 44% 31% International Organic Growth Gross Margin Rate (% of Total) 2022 vs. 2021 Note: results based on Core Digital Busine
Slide 37: 2022 Results: Core Digital Business
making science | Investors 2022 Results: Core Digital Business Significant growth in our business demonstrates the strength of our core operations Financial Results (2021 vs. 2022) ● Revenue and gross margin grew by 92% and In €M Recurring 75% in 2022 to €199.5M and €52.1M, Revenue Gross Margin EBITD
Slide 38: 2022 Results: Core Digital Business (cont'd)
making science | Investors 2022 Results: Core Digital Business (cont’d) Accelerating both organic and inorganic growth while maintaining profitability Recurring EBITDA Bridge (2021 - 2022) ● Solid and sustained organic growth in In €M +31% 2022 compared to the same period in 2021, with Like-for-Like
Slide 39: 2022 Results: Investments (E-Commerce & Products)
making science | Investors 2022 Results: Investments (E-Commerce & Products) Significant value creation opportunity in Ventis operational improvement Financial Results (12M From Acquisition vs. 2022) ● Net revenue was slightly down in 2022 In €M Revenue Gross Margin Recurring compared to the 12 month
Slide 40: Income Statement Summary (GAAP)
making science | Investors Income Statement Summary (GAAP) FY2022 Results Income Statement Summary ● Revenue growth of 90% and gross margin growth of In €M 2021 2022 83% in 2022, from both organic and inorganic growth Revenue €110.4 €210.1 ● Recurring EBITDA growth of 61%, representing an Cost of Sa
Slide 41: Balance Sheet Summary (GAAP)
making science | Investors Balance Sheet Summary (GAAP) FY2022 Results Balance Sheet Summary ● Material cash cushion of €31.3M at December 31, 2022, In €M 2021 2022 providing flexibility to achieve corporate objectives Cash and Equivalents €30.2 €31.3 ● Continued negative net working capital balance
Slide 42: Cash Flow Summary (GAAP)
making science | Investors Cash Flow Summary (GAAP) FY2022 Results Cash Flow Summary ● Increase in cash balance of €1.1M in 2022, ending the year In €M 2021 2022 with €31.3M EBITDA (Recurring) €5.7 €9.2 ● Significant organic operating cash flow of €10.9M reflecting Non-Recurring Expenses (€3.4) (€1.7)
Slide 43: Net Debt
making science | Investors Net Debt Disciplined use of debt financing and earn-outs to accelerate growth Net Debt¹ ● Net Debt increased by only €1.3M from 2021 to 2022, as In €M 2021 2022 organic cash flow generation offset the cash impact of Bank Debt €24.6 €26.1 capex and acquisitions Bonds €11.8 €1
Slide 44: Credit Profile
making science | Investors Credit Profile Making Science is well-positioned to finance its growth strategy Debt Maturity Schedule Credit Position 1 Bond Covenant (2022 Year End)² 3x Net Debt / EBITDA Credit Rating (EthiFinance)³ BB (Positive) Avg. Cost of Debt (Bank Debt & Bonds) ~5.3% Avg. Cost of De
Slide 45: Shareholder Information
making science | Investors Shareholder Information Significant ongoing investment from key stakeholders of the company Share Information Shareholder Composition Free Float (Madrid) (Paris) Treasury Stock 3% Shares Outstanding 8,285,967 Other Management and Founders from Integrated Companies Current S
Slide 46: 06. Q1 2023 Update
making science | Investors 06. Q1 2023 Update Making Science Group, SA - Confidential
Slide 47: Q1 2023 Results: Core Digital Business
making science | Investors Q1 2023 Results: Core Digital Business Significant growth in our business demonstrates the strength of our core operations Financial Results (Q1 2022 vs. Q1 2023) ● Revenue and gross margin grew by 36% and In €M Recurring 29% in Q1 2023 to €51.6M and €14.5M, Revenue Gross M
Slide 48: Q1 2023 Results: Core Digital Business
making science | Investors Q1 2023 Results: Core Digital Business Impact on margins in 2023 driven by investments in organic growth ● In Q1 2023, EBITDA growth and margins in the Core Business were Financial Results (Q1 2022 vs. Q1 2023) lower compared to Q1 2022 in € 000s Q1 2022 Q1 2023 Change ● T
Slide 49: Q1 2023 Results: Investments (E-Commerce & Products)
making science | Investors Q1 2023 Results: Investments (E-Commerce & Products) Significant value creation opportunity in Ventis operational improvement Financial Results (Q1 2022 vs. Q1 2023) ● Net revenue was down year-over-year in Q1, In €M Recurring but gross margin increased 52% as the Revenue G
Slide 50: Thank you!
making science | Investors Thank you! The Digital Acceleration Company Making Science Group, SA - Confidential
Slide 51: Appendix
making science | Investors Appendix Making Science Group, SA - Confidential
Slide 52: 2022 Results by Business Area
making science | Investors 2022 Results by Business Area 2021 2022 ‘21-’22 Growth Rates Core Dig. Invest- Core Dig. Invest- Core in € 000s Spain Int'l Total Spain Int'l Total Spain Int'l Bus ments Bus ments Dig. Bus Net Revenue 84,829 18,885 103,715 6,730 110,445 116,386 83,126 199,511 10,621 210,13
Slide 53: Q1 2023 Results by Business Area
making science | Investors Q1 2023 Results by Business Area Q1 2022 Q1 2023 Q1 ‘22-’23 Growth Rates Core Dig. Invest- Core Dig. Invest- Core in € 000s Spain Int'l Total Spain Int'l Total Spain Int'l Bus ments Bus ments Dig. Bus Net Revenue 22,932 15,029 37,961 3,588 39,668 32,411 19,233 51,644 2,402
Slide 54: Acquisitions, Partnerships and Joint Ventures
making science | Investors Acquisitions, Partnerships and Joint Ventures International Acquisitions Other Initiatives Date Area of expertise / complementarity Date Area of expertise / complementarity Oct. 2020 • Presence in Italy • AdTech technological platform based in Sep. 2021 Mallorca (51%) Feb.
Slide 55: Analyst Coverage
making science | Investors Analyst Coverage Equity research analyst reports are available to investors on Making Science’s Investor Relations page Broker Analyst Fernando Abril-Martorell Iván San Félix Carbajo Appendix 55 Making Science Group, SA - Confidential