Deezer Sa · EURONEXT:DEEZR
Deezer Sa — FY2023 Earnings Presentation
33 slides from Deezer Sa's earnings presentation, Feb 29, 2024
Slide 1: Full-Year 2023 Results
Full-Year 2023 Results 29 February 2024
Slide 2: Disclaimer
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 may b
Slide 3: Strong performance in 2023 and clear momentum, confirming financial targets
Strong performance in 2023 and clear momentum, confirming financial targets for 2024 and 2025 Historic subscriber growth 10.5m subscribers (Dec-23), +1.1m in 2023 (+11.5% YoY) Acceleration of revenue growth +12.1% revenue YoY in Q4 23, +7.4% in FY 23 Significant improvement of adj. EBITDA Adj. EBITD
Slide 4: In line with our guidance for 2023
In line with our guidance for 2023 Guidance Actuals Significant acceleration Q4 23 of revenue growth expected in Q4 +12.1% revenue growth 7 to 10% revenue growth for FY 2023 vs. FY 2022 +7.4% revenue growth FY 23 Significant reduction in adj. EBITDA loss Reduced adj. EBITDA loss by half in H2 2023 c
Slide 5: Heading towards profitability with a commitment to operational excellence
Heading towards profitability with a commitment to operational excellence In €m FY21A FY22A FY23A FY24E 2.7% 9.2% 14.3% Adj. Gross profit 69 On path to profitability in 2025 after driven by: 42 marketing (% of revenue) 11 Revenue growth New terms with labels Sound Partnerships’ Staff / G&A €(7
Slide 6: 2023 Business Highlights
2023 Business Highlights
Slide 7: Live the Music - Successful relaunch and repositioning of the Deezer brand
Live the Music - Successful relaunch and repositioning of the Deezer brand Brand positioning Marketing Blitz EXPRESSION CONNEXION New tone of voice Refreshed visual identity 7
Slide 8: Catapulting fans from digital streaming to music experience services
Catapulting fans from digital streaming… Lyrics Did you Shaker Music Quiz Originals Concerts Ticketing translation know? …to music experience services 8
Slide 9: Expanding global business footprint through partners
Expanding global business footprint through partners Building a powerful partnership ecosystem Telco 2023 Renewal of successful long- term partnerships Media 2023 Ramp up and acceleration Retail 2023 Official music Renewal partner for Meli+ Other 2023 Nomination of Ivana Entered long term Kirkbride
Slide 10: Reinforced position as catalyst for industry transformation
Reinforced position as catalyst for industry transformation, enhancing the value of artists Artist centric model Price increase First to introduce comprehensive model Industry first mover in Jan-22 Better reward artists & music that fans 2nd wave initiated in Sep-23 value most Around half of Deezer
Slide 11: 2023 Financial Results
2023 Financial Results
Slide 12: All-time high subscriber base, with steadily increasing ARPU
All-time high subscriber base, with steadily increasing ARPU Subscribers All-time high In m 10.5 9.9 9.5 9.4 9.4 9.4 9.3 9.3 4.8 3.8 3.8 3.8 4.3 4.0 3.6 3.7 Partnerships Direct RoW 2.3 2.2 2.2 2.1 2.0 2.0 2.0 Direct FR 2.3 3.2 3.3 3.4 3.5 3.5 3.6 3.6 3.7 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4
Slide 13: Acceleration of revenue growth in Q4 at +12.1%
Acceleration of revenue growth in Q4 at +12.1% Total Revenue In €m YoY Growth % +6.5% +6.1% +4.8% +12.1% Sharp acceleration of 131 revenue growth in Q4-23 (+12.1% YoY) 121 118 Ramp-up in Partnerships 115 (revenue growth +29% YoY) Limited impact of the new price increase on Direct in Q4-23, accelerat
Slide 14: Annual revenue up 7.4%, in line with guidance
Annual revenue up 7.4%, in line with guidance Total Revenue In €m +7.4% +7.4% 485 485 451 18 451 +15.4% 15 136 119 +14.5% 197 178 +10.4% Other RoW Partnerships France Direct 317 +4.4% 331 +5.5% 273 288 2022 2023 2022 2023 Direct: Subscriber growth in France (+5.9%) and higher ARPU (+3.9%) France
Slide 15: Improvement in adjusted gross profit and margin across all segments
Improvement in adjusted gross profit and margin across all segments Adj. Gross profit In €m +1.0pt % of rev. Adjusted gross profit reached 110 22.7% €110m in 2023 (+12.6% vs. 2022), +12.6% 21.7% 98 2 driven by: 28 20.8% Higher level of activity +15.2% 20.6% 24 Positive impact of the Other optimi
Slide 16: Consistent operational excellence with positive impact on operating expenses
Consistent operational excellence with positive impact on operating expenses Marketing and trials Staff and G&A €m RoW €m % of rev. France % of rev. (27.2)% 21.6% 20.2% 12.5% 56 97 98 41 8.5% 16.7% 30 11 5.5% 9.8% 30 10.5% 27 2022 2023 2022 2023 Focus of marketing spend towards core markets, with St
Slide 17: Robust cash position of €63.6m at end-December
Robust cash position of €63.6m at end-December, well above resources required to reach financial targets In €m 114 (29) (2) 13 (4) (22) (6) 64 ~€(22)m Free Cash Flow excl. one-offs Cash position Adj. EBITDA ∆ Working Capex Leases & One-offs1 Financing Cash position Dec-22 Capital Financial Dec-23 in
Slide 18: Financial Outlook
Financial Outlook
Slide 19: 2024 roadmap is clear and impact already largely secured
2024 roadmap is clear and impact already largely secured Momentum created in 2023 Roadmap with impact in 2024 and 2025 Pricing Price increase deployed on >60% of user base Deployment for remaining users by end of Q2 Tailwind from recent deals with RTL, Sonos, Mercado Partnerships Libre will expand t
Slide 20: Confirmation of financial targets for 2024/2025
Confirmation of financial targets for 2024/2025 2024 2025 Positive free Adjusted EBITDA Positive 10% revenue cash flow1 in loss better than adjusted growth 2024 €(15)m EBITDA 1. Free cash flow: Adjusted EBITDA - change in working capital - capex - leases and net interests. 20
Slide 21: Thank you
Thank you
Slide 22: Q & A
Q & A
Slide 23: Appendix
Appendix
Slide 24: Direct: Subscriber growth in France and ARPU increase
Direct: Subscriber growth in France and ARPU increase Direct subscribers Direct ARPU In m In € - +3.9% 5.6 5.6 4.7 4.9 2022 2023 2022 2023 Continued expansion of the Group’s subscriber base in France (+5.9%), Improved geographic mix drove ARPU growth of +3.9% to reach €4.9 offsetting the anticip
Slide 25: Partnerships: Acceleration in subscribers and ARPU
Partnerships: Acceleration in subscribers and ARPU Partnerships subscribers Partnerships ARPU In m In € +28.9% +11.0% 4.8 2.8 3.8 2.6 2022 2023 2022 2023 +1.1m partnerships subscribers (+28.9% yoy), driven by the success of ARPU increase of +11.0% mainly due to improved geographical mix the firs
Slide 26: Reducing adjusted EBITDA loss by half to €(29)m
Reducing adjusted EBITDA loss by half to €(29)m while continuing strategic investments In €m Adj. EBITDA 2022 Adj. gross profit Marketing expenses Staff & G&A Driift Adj. EBITDA 2023 Strict management of Staff & G&A 0 (1) (29) 15 Driift consolidated in May-22 Optimized marketing expenses with focus
Slide 27: Key financial indicators
Key financial indicators In € million 2023 2022 Change YoY Change at constant FX Total revenue 484.7 451.2 +7.4% +7.6% By Quarter Q1 115.2 108.2 +6.5% +6.2% Q2 118.0 111.2 +6.1% +6.9% Q3 120.7 115.2 +4.8% +5.5% Q4 130.7 116.6 +12.1% +12.2% By segment Direct 331.1 317.2 +4.4% +4.8% Partnerships 135.7
Slide 28: Reconciliation of non-IFRS financial indicators
Reconciliation of non-IFRS financial indicators In € million 2023 2022 Gross profit 91.4 65.1 License agreements non-recurring expenses 18.8 32.9 Adjusted gross profit 110.3 98.0 In € million 2023 2022 Operating loss (64.4) (166.7) Gross profit adjustments 18.8 32.9 Depreciation and amortization 16.
Slide 29: Consolidated statement of income
Consolidated statement of income FYE 31-December; In € thousands 2023 2022 Revenue 484,656 451,199 Cost of revenue (393,223) (386,103) Gross Profit 91,433 65,095 Product and development (34,711) (34,025) Sales and marketing (61,727) (75,973) General and administrative (59,404) (121,843) Operating lo
Slide 30: Consolidated statement of financial position (1/2)
Consolidated statement of financial position (1/2) FYE 31-December; In € thousands 2023 2022 Assets Goodwill 7,487 15,070 Intangible assets 260 524 Property and equipment 4,915 5,881 Right-of-use assets 16,736 21,061 Non-current financial assets 5,337 5,440 Other non-current assets 525 1,705 Total n
Slide 31: Consolidated statement of financial position (2/2)
Consolidated statement of financial position (2/2) FYE 31-December; In € thousands 2023 2022 Equity and liabilities Share capital 1,216 1,211 Share premium 483,970 483,976 Treasury shares (363) (320) Consolidated reserves (654,079) (501,852) Net loss (57,666) (167,702) Equity attributable to owners
Slide 32: Consolidated statement of cash flows (1/2)
Consolidated statement of cash flows (1/2) FYE 31-December; In € thousands 2023 2022 Operating activities Net loss (59,586) (168,477) Adjustments for: - Depreciation and amortization (excluding those related to current assets) 16,319 8,780 - Provisions (1,014) 4,649 - Share-based compensation expens
Slide 33: Consolidated statement of cash flows (2/2)
Consolidated statement of cash flows (2/2) FYE 31-December; In € thousands 2023 2022 Financing activities Increase in share capital and share premium (net of costs) - 105,165 Repayments on short-term debt (5,164) (251,569) Repurchases of ordinary shares (44) (390) Proceeds from issuance of long-term