Deezer Sa · EURONEXT:DEEZR
Deezer Sa — FY2022 Earnings Presentation
34 slides from Deezer Sa's earnings presentation, Mar 1, 2023
Slide 1: Full-Year 2022 Results
Full-Year 2022 Results March 1, 2023
Slide 2: Disclaimer
2 2 Disclaimer References herein to this presentation (the “Presentation”) shall mean and include this document, any oral presentation accompanying this document provided by Deezer SA (the “Company”), any question and answer session following that oral presentation and any further information that m
Slide 3: 2022 Execution of Deezer Strategy
3 3 2022 Execution of Deezer Strategy +14% +23% Successful B2C refocus B2C ARPU LTV/SAC +12% 20.6% Profitable B2B expansion B2B ARPU Adj. Gross Margin (+0.9pt YoY) +13% All segments and geographies growing Strong revenue growth Total revenue double digits Adj. EBITDA loss reduced by €9m Significant
Slide 4: Initiatives for Further Profitable Growth
4 4 Initiatives for Further Profitable Growth New features launched in 2022 New product vision 2023 roadmap focused on differentiation and monetization B2B expansion in new geographies & segments New partnerships in US & Italy Soft launch of Zen in December 2022 New Verticals development Full commer
Slide 5: Significant Improvement of B2C Economics
5 Significant Improvement of B2C Economics Successful Price Increase Marketing Focus Improved Roll-out + on Key Markets Economics 0.1pt decrease in Churn1 YoY in FY22 94% €52m 34% +23% €35m 16% LTV/SAC4 YoY 66% 84% 11% Dec-21 Dec-22 2021A 2022A FR, BR, DE RoW % B2C Subscribers2 with new prices B2C M
Slide 6: Driving Differentiation Through Music Experiences
6 Driving Differentiation Through Music Experiences Exclusives Live & VoD Experiences Music Discovery Livestream major concerts & performances New look Deezer Sessions X recorded in Paris HQ studio In app VOD Strong track record in Unique discovering formats upcoming superstars Unique fan Exclusive
Slide 7: B2B Expansion in New Markets & Segments
7 7 B2B Expansion in New Markets & Segments Development across attractive markets and Supported by differentiated value proposition new segments for partners Western Europe North America Music Streaming Toolkits (API/SDK) allowing speedy integration to ✔ partners platforms Product evolution to music
Slide 8: Long-Term Partnership with Sonos
8 8 Long-Term Partnership with Sonos ” DEEZER ENTERS LONG-TERM PARTNERSHIP WITH SONOS TO POWER CONTENT FOR SONOS RADIO WORLDWIDE Feb-23 Hardware ” 1st Major Highly recognized 16 countries Deezer provides Deezer to support commercial brand present in worldwide key services for expansion of Sonos part
Slide 9: Strategy is Paying Off
9 9 Strategy is Paying Off B2C B2B +12% +10% +€31m Revenue Revenue Group Adj. Gross Profit YoY YoY after Marketing vs. FY21 +14% +12% +7pt ARPU ARPU % margin vs. FY21 YoY YoY Note: FY22 figures. See appendix for definition of adjusted metrics
Slide 10: More Differentiation & Monetization to Come
10 10 More Differentiation & Monetization to Come Lyrics translation Apr-22 Communities 2023 Priorities Enable users to live music +25% Lyrics display experiences together Listen Collect Humming Discover Sep-22 +12% Enable artists to monetize Songcatcher their content & connect penetration rate to 1
Slide 11: Tech Services Launch
11 11 Tech Services Launch AI for Audio Augmented Cataloguing Recommendations Boost audio with AI and machine learning From metadata enrichment to cluster detection Understand user behaviors and recommend Spleeter Radar User journeys Source Separation Audio Fingerprinting & clusters Identify similar
Slide 12: New Verticals to Improve Profitability
12 12 New Verticals to Improve Profitability First product launched in 2022 Attractive economics at scale First holistic mind & body experience Fixed one off content production costs Exclusive content on sleep, relaxation, personal development, yoga, nutrition, fitness already incurred Limited marke
Slide 13: Building a Sustainable & Inclusive Business
13 13 Building a Sustainable & Inclusive Business Highly skilled, complementary & diversified governance Targeted ESG strategy based on 4 pillars Environmental Impact Iris Knobloch Guillaume d’Hauteville Mari Thjømøe Sophie Guieysse Ingrid Bojner Chairwoman Vice-Chairman Independent Independent Inde
Slide 14: Full-Year 2022 Financial Review
Full-Year 2022 Financial Review
Slide 15: Double-Digit Revenue Growth across all Segments
Double-Digit Revenue Growth across all Segments 15 In €m +12.8% +12.8% 451.2 451.2 400.0 15.5 400.0 +56.0% 9.9 178.0 +13.1% Other 157.4 317.2 RoW B2C +12.2% 282.7 France B2B +12.6% 273.2 242.6 +10.4% 118.5 107.4 FY 2021 FY 2022 FY 2021 FY 2022 → B2C: Double-digit growth driven by price increases and
Slide 16: Adjusted Gross Profit up +16.5% in FY 2022
Adjusted Gross Profit up +16.5% in FY 2022 16 +0.7% In €m 98.0 21.7% +16.5% B2C % margin 21.0% 84.1 → Adj. Gross Profit +8.5% YoY → Strong revenue growth (+12.2%) partly offset by increased publishing rates B2C B2B +8.5% 76.5 24.1% B2B 24.9% 70.5 → Adj. Gross Profit +15.5% YoY Other → Double-digit r
Slide 17: Adj. Gross Profit after Marketing multiplied by ~4x
Adj. Gross Profit after Marketing multiplied by ~4x 17 In €m +€30.7m 41.5 9.2% B2C B2C → Significant optimization of marketing expenses B2B reflecting refocus on selected key countries Other 16.8 → France, Brazil and Germany representing ~84% of 2 B2C marketing expenses in 2022 (vs. ~66% in 2021) 13
Slide 18: Fixed Costs Impacted by One-Offs and Scope
Fixed Costs Impacted by One-Offs and Scope 18 In €m + €12.6m / +2.8pt 97.5 Expenses incurred in 2022 not like for like with 2021 level 84.9 7.6 5.0 → Travel and HQ costs post-COVID 78.6 75.4 6.3 3.2 Increased fixed costs → Exceptional salary increase implemented in 2022 → Limited core G&A increase O
Slide 19: Significantly Improved Adjusted EBITDA Loss
Significantly Improved Adjusted EBITDA Loss 19 Driven by revenue increase, margin improvement and marketing efficiencies In €m +€18.3m % revenue (16.2)% (64.6) (12.4)% (10.3)% 10.6 (55.7) 5.0 one-offs (46.4) (9.4) (5.0) 17.1 (9.5) 1 Adj. Revenue impact Impact from Marketing Staff & Adj. EBITDA Scope
Slide 20: Strong Cash Position at end-December 2022
Strong Cash Position at end-December 2022 20 Free cash flow of €(43.6)m in FY 2022 In €m (55.7) 113.6 24.4 (3.0) (6.1) (3.1) 122.1 35.1 Cash Position Fundraising net Adj. EBITDA Δ Working Capex Leases 1 Other Cash Position Dec-21 proceeds FY22 Capital Dec-22 Note: See appendix for definition of adju
Slide 21: 2023 Priorities and Outlook
2023 Priorities and Outlook
Slide 22: 2023 Priorities and Outlook
2023 Priorities and Outlook 22 Continued Execution of our Profitable Growth Strategy New feature development in the product to fuel differentiation and further monetization Further acceleration of profitable B2B expansion on the back of recently announced partnerships such as Sonos (US), RTL (German
Slide 23: Long-Term Outlook
Long-Term Outlook 23 Positive cash flow1 in 2024 Positive adjusted EBITDA in 2025 Double-digit annual revenue growth over the period (1) Cash flow pre-funding.
Slide 24: Appendix
Appendix
Slide 25: Continued B2C Subscriber Growth in France
Continued B2C Subscriber Growth in France 25 YoY YoY YoY Subs (0.1)% ARPU +14.2% +13.7% In m QoQ In € +0.4% 5.7 5.6 5.6 2.4 2.2 2.2 ROW France 4.9 4.7 4.3 4.1 3.2 3.4 3.5 31-Dec-21 30-Sept-22 31-Dec-22 Q4 2021 Q4 2022 FY 2021 FY 2022 → Stable subscriber base YoY reflecting continued growth in France
Slide 26: Sustained Improvement in B2B ARPU
Sustained Improvement in B2B ARPU 26 YoY YoY YoY Subs (5.1)% ARPU +17.2% +11.9% In m QoQ In € (1.9)% 4.0 3.8 3.8 2.7 2.6 2.3 2.3 31-Dec-21 30-Sept-22 31-Dec-21 Q4 2021 Q4 2022 FY 2021 FY 2022 → Lower subscribers YoY due to a change in customer offer mix → Strong growth in ARPU YoY driven by price in
Slide 27: Key Performance Indicators for Q4 2022
Key Performance Indicators for Q4 2022 27 In € million Q4 2022 Q4 2021 Change (%) Chg. at constant FX (%) Total revenue 116.6 103.0 +13.2% +11.3% B2C 82.4 73.0 +12.8% +11.7% B2B 30.4 27.1 +12.3% +8.4% Other 3.7 2.8 +31.3% +27.1% Total revenue 116.6 103.0 +13.2% +11.3% France 71.1 61.8 +15.1% +15.1%
Slide 28: Key Performance Indicators for FY 2022
Key Performance Indicators for FY 2022 28 In € million FY 2022 FY 2021 Change (%) Chg. at constant FX (%) Total revenue 451.2 400.0 +12.8% +10.6% B2C 317.2 282.7 +12.2% +10.8% B2B 118.5 107.4 +10.4% +6.6% Other 15.5 9.9 +56.0% +48.8% Total revenue 451.2 400.0 +12.8% +10.6% France 273.2 242.6 +12.6%
Slide 29: Reconciliation of non-IFRS Financial Indicators
Reconciliation of non-IFRS Financial Indicators 29 In € million FY 2022 FY 2021 Gross Profit 65.1 48.5 Onerous contract depreciation - 7.6 License agreements non-recurring expenses 32.9 28.0 Adjusted Gross Profit 98.0 84.1 In € million FY 2022 FY 2021 Operating loss (166.7) (120.6) Gross profit adju
Slide 30: Consolidated Income Statement
Consolidated Income Statement 30 In K€ FY 2022 FY 2021 Total revenue 451,199 400,019 Cost of revenue (386,103) (351,490) Gross Profit 65,095 48,529 Product and development (34,025) (25,620) Sales and marketing (75,973) (94,702) General and administrative (121,843) (48,761) Operating loss (166,746) (
Slide 31: Consolidated Balance Sheet (1/2)
Consolidated Balance Sheet (1/2) 31 In K€ 31 December 2022 31 December 2021 ASSETS Goodwill 15,070 7,487 Intangible assets 524 1,427 Property and equipment 5,881 5,838 Right-of-use assets 21,061 24,663 Investments in equity affiliates - 5,500 Non-current financial assets 5,440 5,321 Other non-curren
Slide 32: Consolidated Balance Sheet (2/2)
Consolidated Balance Sheet (2/2) 32 In K€ 31 December 2022 31 December 2021 EQUITY AND LIABILITIES Equity attributable to owners of the parent (184,687) (217,333) Non-controlling interest reserves 2,866 - Total equity (181,821) (217,333) Provisions for employee benefits 692 1,043 Lease liabilities 1
Slide 33: Consolidated Cash Flow (1/2)
Consolidated Cash Flow (1/2) 33 In K€ FY 2022 FY 2021 OPERATING ACTIVITIES Net loss (168,477) (123,258) Adjustments for: - Depreciation and amortization (excluding those related to current assets) 8,780 11,854 - Provisions 4,649 6,933 - Share-based compensation expense 88,235 32,165 - Gains and loss
Slide 34: Consolidated Cash Flow (2/2)
Consolidated Cash Flow (2/2) 34 In K€ FY 2022 FY 2021 FINANCING ACTIVITIES Increase in share capital and share premium (net of costs) 105,165 5,125 Repayments on short-term debt (251,569) - Repurchases of ordinary shares (390) - Proceeds from issuance of long-term debt 422 25,000 Repayment of lease