Hi everyone, and welcome to ABG Investor Days. My name is Nikola Kilaunovski, and I'm an equity research analyst here at ABG. With us today, we have the CFO of Verve Group, Christian Duus. Welcome. Thank you. The idea is that Christian will present to us Verve Group for around 15-20 minutes, depending on the length of the presentation, and then we will follow up with a brief Q&A. With that said, Christian, please, the floor is yours. Thank you very much. Happy to be here. Happy to try to give an overview of what Verve is and why we exist. What does Verve do? Essentially, we provide software that facilitates the placement of digital ads. When you see a digital ad on your mobile phone or your computer, on a tablet, excuse me, we provide some of the software that determines what you see, when you see it, how many times you see it. That ecosystem is what we are part of. Why do we exist? We exist that although a lot of ads today are served digitally, there are still a lot of inefficiencies in this industry. More and more is provided digitally, but even though there's a lot of middlemen in the industry, we really want to connect directly between what we call publishers and advertisers, so there's the most direct connection between the value chain, do it in a privacy-conformed way, brand safety checked way, and we focus mostly on what we call emerging channels, which are mobile, CTV, digital out of home. I'll come into some of these concepts, but that's really what we are about, and that's why we exist, because we want to make this industry work in a better way. There's a lot of inefficiencies, a lot of wasted money, and that's what we're out to change. I'll try to give you just an overview of Verve in a nutshell, a little bit about our numbers, what we do, where we're big, and the composition of our business. Here's the story. Here's the journey of Verve through the years. Today, for 2024, we reported EUR 437 million in revenues, and EUR 133 million in adjusted EBITDA. We grew 36% last year on a year-on-year basis, and we're a 30% margin business. I would say high growth, attractive margins. You can see every year we've grown our revenues, we've grown our EBITDA, so I think we have a fairly good and long track record. Behind all these numbers is also a transformation. Some of you will maybe know Verve from other names. We used to be named Gamigo, but the company has really transformed through time. We started out being a games company, purely focused on games. Around 2018-2019, we really saw the importance of advertising in games, in mobile games, casual games, and at that time, the company changed its strategy to focus more on solutions for digital advertising. We bought a number of companies, we transformed, we became MGI, and lately we have rebranded over the name of Verve. Today we're really all about digital advertising and software to facilitate that. We still have a proportion of our business that is games, but that's not what we're about today. Really it's been a long journey, but also a very transformative journey, and today we are one of the leading providers of this type of software. In the US, we are among the top 30 players in this space. That's a little bit about our journey. Coming back to what do we actually do, and this is super simplified, but essentially what we try to do is we connect. On the left-hand side here, you see an end consumer. They will have their, they may be using, in this example, their BBC app to read the news, and they're reading, this is, let's say, assume this is a male, reading about sports. Really what we try to do is to facilitate that this person gets the right advertisement. You'll see here a number of different advertisers. In this particular case, where it's around football and sports, Adidas would be probably the one that is most interested in paying to show an ad to this person. That's really what we do. We just provide software that digitally targets and ensures that the right ads come to the right receiver, and this market works as an auction. This is the simplified version. The actual way it is done is much, much more complex, and there is a lot of different software. I think I do not want to go into all the depths of it, but think about it as an auction. What is special about us is that we, on 65,000 different apps, can detect when a person is in the app and when there is an opportunity to show an ad, and we send that signal out to the ecosystem, and then we solicit bids to who wants to pay the highest price to show an ad. The more information we can provide on who the user is, the bigger price we can obtain from the market and thereby provide for the publisher. We do that on mobile devices, we do it on laptops, we do it on tablets, increasingly CTV, digital out of home. Digital out of home is when you go through an airport and you are seeing a digital screen, and increasingly also audio, which is Spotify would be the most known example of. You are actually listening to music and you get an ad through that. That is what we do. Our uniqueness is really on the side here, which is around connections to mobile phones. That is where we are strong, where we are very different. We have connections, direct connections to 65,000 apps, and that makes us one of the leaders, and especially the leader in the US on the Apple iOS platform. We're consistently, besides, if you subtract Apple, of course, we have the highest market share of inventory in the US. We do this at scale. As I mentioned, 65,000 apps we're integrated with. We can connect to 200 million CTV screens in the US. We can reach, with all our universe, we can reach 2.5 billion end consumers. Last year, we served 940 billion ads. That's 2.6, on average, that's 2.6 billion ad impressions every day. You understand that this is really a system, digital system and software that works at high, high scale, and very comparable would be the financial markets and clearing of the financial markets. It's at those dimensions. You can only do that through very advanced technology, AI technology, machine learning. Originally, it was built on machine learning. Today, it's using more advanced algorithms from AI, which basically tries to match the best ad for the best person. As I said, our main business is really providing what we call publishers and app developers, so the ones that offer out inventory. It could be a newspaper, it could be a news app, it could be games apps that want to earn money through advertisement. They will contact us, we will set them up, and that is really what we call the supply part of the business. We offer out the inventory. That's 73% of our business. We also do the other side, what we call the demand side of the business. That's today roughly 30%, 27% of our business. Most of our business is in the US. There's historical reasons for that. It's also the biggest market in the world, and the majority of our business is there. We are really a significant player in the US business, but also building international presence. We are mostly on mobile. The vast majority is mobile. We also do some CTV, 9% of CTV. We do not do a lot of display. I'll come back to that. Display is really the classic when you're reading, for instance, your newspaper on a laptop like that. That's what display is. We try to focus on the verticals that are growing and where most people are spending an increased amount of their time. As I mentioned, we have high growth. We've been growing significantly through the years, 36% last year. If I share a little bit with you what is driving this growth, there's a number of vectors, and I'll try to just move us through those in quite some speed. There's essentially four things that are driving our growth. Number one is we are in the right growing segments of the market, i.e., mobile and CTV. Those are where more and more consumers are using their time, and therefore it's also where more and more of our marketing dollars and marketing campaigns are focused. That's fundamentally that we're in a well-structured place. We have proven to both be able to take on board new customers and grow our existing customers. There's a level of growing through our customer base, which is something we've done both in times where the industry has grown, but also in times where the industry has had adversity and campaign budgets have gone. That's actually where we've probably taken most market share. We take market share. We're growing significantly faster than competitors, or some of our competitors, just to be precise. We're doing a lot of innovation in terms of products. I'll come back to that. We are focusing especially on technology that enables us to serve ads where you don't have an identifier. You will maybe sometimes hear about a cookie, a third-party cookie. That's that little piece of thing that is installed when you're web browsing that tells you about what the person is. We can do that without that tracking because we have other ways of doing that. I'll come back to that. We also grow through the more supply we have, the more interesting we become for the demand side. The more demand we have, the more interesting we become for the sell side. There's a big scale game in this, and there's huge network effects, and that's also why the industry is consolidating in the US and in general in the world. I'll quickly try to go through those four levers, but starting with market growth, showing you where we operate and where we don't operate. Here on the left-hand side, we're really focusing on emerging channels, mobile, CTV, digital out of home, as I mentioned. There's a lot of other channels, digital also channels where marketing dollars are being spent. We don't focus on that. I'm now getting a little bit of an error message here on my computer, but let's see if it doesn't work still. We try to be very focused because we can't do everything. We try to be really where the market dollars are traveling, and you'll see that. Let's try. Let's try. See if this works. Okay. Although we work in Although we work in technology, there's always problems with technology. Here's a brief overview of the market, and this is to say, 88% of our revenues are in mobile, mostly in-app. We are also in CTV, which is also growing fast, 9%, and we're only 2% in display. Display used to be the big part of the market, also the fastest growing part of the market, but today more and more of the marketing dollars are being spent on mobile, CTV, audio. It's a huge market. Roughly $1,100 billion are spent globally on advertising. Roughly $600 billion are provided digitally through systems like ours, and mobile is the biggest part of it. We really try to be where there's structural growth, which supports us, of course, and gives us a lot of advantages. To get a sense of what type of customers are we serving, we serve both publishers. This is the main part of our business. It's 73% of our business. These are typically big providers of outlets for showing. It could be LinkedIn, where you can show ads. It could be Senga, who's a big consolidator of games that operates on ads. We work with some of the biggest providers of publishers to show ads. We don't have one particular customer that is over 6% of our revenue, so I think we're well diversified. Similarly, we work with advertisers. This can either be direct advertisers. It could be McDonald's that is managing their campaigns themselves, or it could be what we call agencies, media agencies. Sometimes they're called global holding groups. There are some very big ones in the world, WPP, IPG, Havas, and we work with those as well. Those are some of the customers, but the majority of it is on the publisher side. Oh, sorry, let me just go back here. Coming to this point about growing our customers, you can really see here how we've grown through the last couple of years. If you take here on the right-hand side, lower on the net expansion rate. This is really how do we grow our existing customers. It's an index 110 here for the last quarter of 2024. That means we have grown our existing customer base year on year 10%. We grow with our existing customers. Above is a chart on how many new customers we're taking on board. We're only measuring here the very large customers, which use more than 100,000. We call them software clients. You can see really a big addition in number of customers. Over the past year, we have added 400 customers. That means not just customers of any size, but really customers that are scaling. This is really two ways that we have grown significantly to add and expand our customer base. Coming to our products, and this is probably what makes us really unique. What we are especially good at is driving and targeting on the iOS environment. That is because we have technologies that are enabled to show ads for people that do not allow consent. Today, actually, if you are on an iPhone like I am, 80% of the users either do not provide or give access to consent to what we call identifiers or cookies. Also, Apple has significantly reduced the amount of identifiers that you can actually track. Our technology is specifically good to match and find contextual relations where you should use the ads. I'll give you an example. It just happens to be that if you have a weather app and you target, it just happens to be very good to target weather apps in the morning, 10:00-11:00 A.M., with diapers. You think, why is that? The reason is that there's a high proportion of parents who have had their newborn. They will check the weather before they go to the park and stroll their children. There are these relationships. Where do ads work? Where do they not work? That's what we're very good at and our technology, which is IDLS, can target. We've had significant success. You can hear 46% growth of our revenues in that part of the market. Another type of product that we're very proud of is what we call Atom. Atom is anonymous targeting on mobile. What does it do? We have a small piece of software that goes into the app, the app developers install a small piece. That is how we can see if there is an ad. Increasingly, we have also built technology that can pick up the different motion sensors of the mobile. It all stays on the mobile. It all stays on the mobile. It is not sent out into the ecosystem, but we can see is the person moving? Is the person moving at what speed? Are they, for instance, jogging? Are they bicycling? We can see what categories they are looking at on the web. What time are they awake? What time zone are they in? All that information is then grouped. For instance, if we can see a person who's very sports active, very much out in nature, we can categorize them and say, this is an active sports person, probably a nature lover. What we do is we can categorize this person in an audience. They will always go into an audience that is a minimum of 10,000. You can never find back. That's why it's privacy conformed. You can never track back to the original user. What we can do is for the advertiser, we can say, if you want to sell outdoor gear, here's a very high likelihood. There is an audience of 10,000 that you can target. There's a very high likelihood that these individuals have a high interest for outdoor nature or sports activities, for instance. This is a piece of software we've developed. It's been four years in the making. It's privacy conformed. It's patented. And it's really one way to target advertisers, but in a very privacy conformed way. This is, to our knowledge, we're the only ones that have anything like that. It's also patented, and it gives us a huge advantage to be able to serve ads for those that do not allow tracking. That was a little bit about our technology, where we operate our customers. Briefly about our financial profile. As I mentioned, we had a very strong growth last year. Here on the right-hand side, you can see our organic growth through the year. We altogether had 25% organic growth. Total, we grew 36% last year. That's because we also bought a company called Jun Group in the US that we consolidated in from 1 August. Really, our organic core is growing very significantly. You can see the industry goes up and down. You can see the third quarter of 2023 was really the last quarter where you could feel the impacts of the industry and the economic turmoil after the Ukraine war and when campaign budgets were going down. Since then, we've been growing at double-digit rates. We've done that consistently some years, and you can see this on the left-hand side that 2023 was a more challenging year. If you look at the last five years, we have grown 33% on average. Some years we will have more growth. Some years we'll have less growth. We are in a business that is in some ways cyclical because it is driven by how much is put into marketing budgets. That does change with economic outlook. It's very highly correlated with GDP. Last year, we had a very strong year, and we've done that for years on end. 36% revenue growth, as I said. We lifted our EBITDA 40%. Yeah, we have a 30% margin business. We have not given out guidance yet for this year. We will do that in connection with our Q1 results. If I give you kind of the midterm targets for our business, so our three- to five-year targets, we aim to provide revenue growth of 25%-30% and an EBITDA margin of 30%-35%. That's because we're at 30% today. Over time, the scale benefits of growing will drive operational leverage in the business, 20%-25% EBITDA margin, and to be somewhere between 1.5-2.5 in terms of net debt leverage. We fulfilled all those requirements or all those targets during last year. I would say it's almost easier to talk about these days, our midterm targets, than the guidance for this year. I think many of our competitors have now started to release reports on the growth. Q1, and I'm not talking about us, but I think generally in the industry had a fairly okay Q1. That's also what we see. Obviously, given that we're very exposed to the US, it is more difficult to forecast how the US economy is going to go this year. That's our financial targets. We will be focusing on kind of organic growth this year. We need to, of course, make sure that we capture the positive development in the market with the growth in the market and also grow faster than market. That's what we've been doing all the years. We're doing huge investments in AI and especially IDLS targeting. We also, as we have a number of companies we bought through the years, we are still realizing the synergies and operational efficiencies on that and with a focus on growing our cash flows and earnings per share. That's Verve. As I said and opened with, we're really out to make the industry work better and make media better. That's what we strive at. Wonderful. Thank you very much. We're very squeezed on time. If anybody in the audience has any question, please you're able to do so after this presentation. I can just round off with one question, I guess. If you look at your exposure right now, 30% is demand side, 70% is supply side. You're aiming for a 50-50 split to become more and more vertically integrated. What's the goal of that? What do you achieve by doing so? There's two reasons. The systems that we provide, which are more on the supply side, if we also have the demand side, and this is the systems where advertisers put in their preferences in their campaign, it's essentially a digital marketing campaign planner. If we own and facilitate both of these, then we can make a much better return, much more direct measurement for the advertiser and ensure that the money is channeled the right place. It really has, you can be much more efficient for the advertiser. Unfortunately, in this industry, there's a lot of middlemen, and everybody takes their share. It's not uncommon. There are examples where if you invest $10 million in your marketing budget, that actually only 20% of that $10 million, so $2 million, is actually buying inventory. We know that because there are ongoing cases against Google in the U.S. from the DOJ. We know that in certain cases, Google takes 80% of the value chain. We believe we can do that much more efficiently, provide a much more efficient and much more value to the advertiser. That's number one. Number two is we earn a fee for providing the software on the publisher side. It's a revenue share. If we also provide the technology on the buy side and demand side, we essentially capture more of the value chain and that increases our revenues. It is a value chain expansion for us as well. There are the network effects. The more demand we have, the more interesting we are for supply partners and vice versa. Wonderful. Thank you very much for that exhaustive answer. Thank you, Christian. Thank you to everybody else for listening in. Thank you.