Good day, and welcome to Deezer H1 2023 Results Call. My name is Priscilla, and I'll be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen-only. However, you'll have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. And if you require assistance at any point, please press star zero, and you'll be connected to an operator. I will now hand you over to your host, Mr. Jeronimo Folgueira, the CEO, to begin today's conference. Please go ahead, sir. Thank you. Good morning, everyone. Thank you for joining Deezer H1 2023 Results Conference Call and Webcast. I am Jeronimo, CEO of Deezer. I'm joined today by Stéphane, Deputy CEO and CFO. Regarding today's agenda, I will discuss first, Deezer's unique position within the music ecosystem and what makes us very confident that we're on the right path to achieve our profitability and cash flow generation objectives. Stéphane will go into more details about our H1 performance. After that, we will discuss our 2023 priorities and outlook. We will conclude with a Q&A session. Moving on to slide four. Let me first share some facts about Deezer for those of you that do not know us yet. Deezer is the second largest independent music streaming platform globally and holds leading positions in France and Brazil, our largest markets. Music streaming is a large and growing market in which Deezer holds a unique and strategic positioning. Over the past two years, we have been implementing a new strategy aiming at driving profitable growth through a unique business mix approach. In 2022, we generated EUR 451 million of total revenues through direct subscriptions and partnerships, and ended the year with around 9.3 million subscribers and over 600 employees. As you will see today, our H1 results confirm that our strategy is bearing fruit and that we're able to drive significant operational performance improvement. We continue to grow and have cut our losses by almost half compared to last year. Additionally, the recent signature and launches of large new partnerships will help us accelerate growth in the years to come. Our direct subscription and freemium business shows stronger economics than ever, and we continue to optimize our market position and strictly control our costs. All of this make me very confident that we're on the right path to achieve our profitability and cash generation objectives. Moving on to slide six. As you can see in the left-hand side of the slide, the worldwide streaming market has doubled in value over the past five years and is expected to expand significantly by 2025, thanks notably to still low penetration of paid music streaming. Beyond subscriber volume, we expect the music streaming market to be supported by ARPU growth as well in connection to further price increases. Deezer was the first player to raise prices in early 2022, with pretty much no impact on churn, which has clearly demonstrated that music is highly undervalued and that platforms like us have more pricing power than initially anticipated. Since then, all other global platforms have followed our move, which now gives us the opportunity to review pricing again in the near future. Moving on to slide seven. We think that Deezer has a strategic position in the industry that we clearly bring added value to the entire ecosystem, including labels and artists, as well as our distribution partners. We were the first to show the pricing potential for the industry. We're at the forefront of the artist-centric discussion with Universal Music to create a new model that better rewards artists that generate valuable content. We have had for years one of the most sophisticated and strict fraud detection systems, and we are now the first platform to engage in AI detection to ensure new technologies are used in a way that supports value creation for the industry. On the distribution side, we have successfully positioned ourselves as the go-to partner for large players looking for high-quality music solutions. Music streaming increases customer engagement and differentiation for our partners and generates new sources of revenues for them. Over the last couple of years, we have expanded our business both across new territories and new verticals, as reflected by our partnerships with RTL, Sonos, and Mercado Libre, among others. Moving on to slide eight. Deezer enjoys a truly unique business mix that helps us achieve profitability improvement at lower scale than our competitors, with attractive economics, especially on partnerships and new verticals, that require a substantially lower marketing spend than direct distribution. Moving on to slide nine. As you can see, we have made significant progress on our path to profitability, thanks to the successful implementation of our strategy. Our H1 performance clearly demonstrates our ability to drive a strong operational performance improvement across all segments of our business. In direct subscriptions, we have refocused our business on selected key countries that offer attractive unit economics. This has allowed us to continue to expand our subscriber base in France, despite lower spend, leading to a significant improvement in ROI. In addition, we have continued to successfully implement our partnership-led strategy. Our business has continued to expand fast with existing, also new customers across new countries and verticals, as reflected by the new deals with RTL in Germany, Sonos in the U.S., and Mercado Libre in Latin America. This has allowed us to drive our top-line growth, also to support profitability improvements, thanks to a much lower level of marketing spend as we lever our partner distribution and promotion capabilities. Lastly, we launched our digital wellbeing app, Zen by Deezer in June, as well as new label and tech services, accelerating Deezer's path to profitability through attractive economics and higher margins. This concludes my introduction, now I will pass it on to Stéphane for the financial section. Thank you, Jeronimo, and good morning, everyone. I'm now moving to page 11. I’m gonna share with you the key highlights of our H1 performance, which, as mentioned by Jeronimo, underscore the continued execution of Deezer strategy. In the first half, as you can see, we achieved revenue growth of +6.3% to EUR 233 million, in line with our plan. As a result of the growth we had in our direct business, driven by continued subscriber addition in France, also the good momentum from the gradual buildup of the launched partnerships. We recorded a significant increase in our adjusted gross profit, which increased +14.2% to EUR 52 million, which reflect a solid gross margin performance across our direct and partnership segments, as well as the benefit from the optimization of our free product. This adjusted gross profit increase, combined with the efficient marketing spend and a strict control of our staff and G&A expenses, led to a sharp reduction of EUR 11.5 million of our adjusted EBITDA loss to EUR 13 million in H1, ahead of our plan. As a result, as you can see, our net loss decreased by EUR 13.5 million to -EUR 38 million in H1. Lastly, we ended H1 with a robust cash position of EUR 91 million, in line with the resources that we need in order to execute our plan to reach break-even in 2025. Moving now to Slide 12. As you can see here, we generated revenues of EUR 233 million in H1 2023, an increase of 6.3% compared to H1 2022. Looking at our revenue performance by segment on the left-hand side of the slide, we reported revenue growth of +5.7% from the direct segment, mainly driven by the continued expansion of our subscriber base in France, and a further increase in our ARPU, resulting from the remaining effect of the 2022 price increases. With respect to partnerships, we posted revenue growth of +8.5% in H1, driven by the good performance of new and existing deals. This mainly reflect the gradual buildup of the RTL partnership before the launch of their multimedia app that is planned in the course of this quarter, and the initial contribution of the Sonos partnership launched at the end of April 2023. The ARPU for partnership was also strongly up, mainly due to the improved geographical mix. We have signed an agreement with Mercado Libre, Latin America's leading e-commerce platform, to expand our current partnership and offer premium music experience to millions of people across the region. We will provide you additional details about this partnership expansion and the new offers that will be launched later during this quarter. Other revenues, which are mainly made up of advertising and ancillary revenues, were stable in H1, despite the marketing spend rationalization in the rest of the world. We started recording advertising revenues from our Sonos partnership in Q2. Looking at our performance by geography on the right-hand side, we recorded solid revenue growth of +7.2% in France, driven by the continuous direct subscriber growth. In the rest of the world, the revenues, revenues was +5.3%, as the double-digit growth in ARPU more than offset the decline of the subscriber base in the markets where we don't have the attractive unit economics. Moving now to Slide 13. On the left-hand side, you can see the evolution of our subscriber base. We are very satisfied to have been able to stabilize our direct subscriber base, which stood at 5.6 million subscribers at the end of June 2023, stable year-on-year and stable also quarter-on-quarter. We continue to deliver a solid growth of our subscriber base in France, while we saw a lower decrease of our subscriber base in the rest of the world, in line with our strategy. In addition, the geo-mix improvement had a positive effect on ARPU. Looking at partnership, we are very happy now to show a sequential increase in our subscriber base at 3.7 million subscribers at the end of June 2023, as we start to see the positive impact of subscribers from recent and new partnerships. Our subscriber base from partnership should further increase in Q3, and especially in Q4, as a consequence of the expected expansion of recent partnerships, in particular, RTL, with the multimedia app, and also the Mercado Libre expansion that we just announced. Lastly, on the right-hand side of this slide, we recorded a further increase in ARPU, up +8.3% to EUR 4.2 per subscriber in the first half. It was driven by direct and partnership segments, and we continued to see ARPU growth coming from improvements both in our mix, in terms of geographies, as well as partners and offers. We also still benefited from the remaining effect of price increases, but to a lesser extent compared to prior periods. As you remember, the main price increase was done in France at the end of January 2022. Moving now to Slide 14. The adjusted gross profit amounted to EUR 52 million in H1 2023, an increase of 14% compared to H1 2022. It reflects the higher level of activity and the positive impact of the optimization of our free product, offset in part by higher publishing rates. This led to a significantly higher adjusted gross margin at 22.2% in H1 2023. Our direct adjusted gross profit was up +4.8% year-on-year, reflecting higher revenues and offset in part by an increase in publishing rates compared to last year. This led to a slight decrease in direct adjusted gross margin at 23.8% in H1, down 10 basis points compared to H1 2022. Partnerships adjusted gross profit was solid. It was up by 10.2% year-on-year, reflecting the good revenue growth and a more favorable partner offer mix. This drove an increase of 30 basis points year-on-year in the partnership adjusted gross margin, which reached 20.9% in the first half of 2023. Finally, the loss of the other segment was reduced by EUR 3.3 million compared to a year ago, due to the positive impact from the free offer shutdown in long-tail countries, and also lower content costs in new verticals. Moving to slide 15, as you can see, we've been able to generate a strong increase in our adjusted gross profit after marketing expenses, which grew by EUR 15.4 million year-on-year and reached EUR 35 million in the first half. This sharp improvement resulted from the increase in adjusted gross profit, combined with the further optimization of direct marketing expenses, thanks to our focus on selected markets. Overall, our marketing expenses were optimized and reduced by approximately EUR 9 million in the first half. Accordingly, our adjusted gross margin after marketing expenses significantly increased by 600 basis points and reached 15% in the first half of 2023, compared to 9% a year ago. Moving to slide 16, the adjusted EBITDA loss amounted to EUR 13 million in the first half of 2023, a very sharp reduction of EUR 11.5 million compared to the first half of 2022. As you can see on the bridge, the year-over-year change in adjusted EBITDA loss reflected first, the positive impact of our top line growth and the improved adjusted gross margin. Second, the reduction in marketing expenses, which results from our strategy to focus on partnership and selected key markets for direct subscription. It is important to mention that we slightly increased our marketing spend year-on-year in France, where we see the best return, and we continue to grow our subscriber base in a profitable way. Third, a very strict control of our staff and G&A costs. Compared to the second half of 2022, sequentially, we managed to reduce our cost base, both in absolute value and also as a percentage of revenues. As a result, our adjusted EBITDA margins stood at -5.6% in H1, compared to -11.2% in H1 2022. Moving to slide 17, we reported a robust cash position of EUR 91 million at the end of June 2023, compared to EUR 114 million at the end of December 2022. This is in line with the resources that we need in order to execute our 2025 plan. As you can see on the bridge, the change in our cash position compared to the end of December, reflected first, a significant reduction of our cash burn run rate, which stood at around -EUR 10 million in H1. This is in line with our profitability improvement, and that excludes some one-off impact for a few items. Indeed, we had, during the first half, the impact of exceptional one-off payments amounting to EUR 12 million, that are not related to the normal course of our business and includes tax regularization in certain markets. I will now turn the call over to Jeronimo to discuss 2023 priorities and outlook. Thank you, Stéphane. Moving on to slide 19. As a conclusion, we're pleased with the performance we achieved in H1 2023, which confirms the relevance of our strategy. Going forward, we will continue to prioritize profitability while targeting revenue growth from partnerships and direct subscriptions in selected key markets. With respect to Deezer's full year 2023 outlook, we expect revenue growth to accelerate in H2 2023 versus H1 2023, benefiting from the contribution of recent partnerships, including Mercado Libre and new sources of revenues, and target to achieve 7%-10% revenue growth in full year 2023 versus full year 2022. This compares to a previous expectation of revenue growth in excess of 10% for full year 2023, as a consequence of a gradual build-up of those partnerships and new verticals. We also expect another significant reduction in adjusted EBITDA loss in H2 2023 compared to H2 2022, reflecting accelerated revenue growth and continued strict cost control. Moving on to slide 20. Given our continuous focus on profitability, and strong growth and strong profitability improvement already achieved in H1 2023, we're also pleased to confirm our long-term outlook. Deezer remains on a path to generate positive cash flow in 2024 and achieve a positive adjusted EBITDA in 2025, while delivering double-digit average yearly revenue growth over the period 2023– 2025. This concludes today's presentation. Stéphane and I will be pleased now to respond to your questions. Thank you, sir. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. We'll pause just for a moment to allow everyone an opportunity to signal for questions. We'll take our first question from Eric Ravary from CIC. Please go ahead. Your line is open. Yes, good morning, Jeronimo. Good morning, Stéphane. Thank you for the presentation. I have three questions. First one is on your new guidance of growth for 2023, so 7%-10%. Does it assume further price increase in B2C in H2, which is possible, following the price increase by Spotify? Or do you assume in this guidance, stable prices? That's the first question. Second question is on the figures of gross profit adjustments. It was EUR 60 million in H1 2022. It is almost EUR 24 million in H1 2023. Stéphane, could you please detail what is in these adjustments? The third question is on the new partnerships and its impact and acceleration in H2, especially in RTL+. You mentioned the launch of the multimedia app by RTL soon. Why this new app should have a significant impact on the takeup of your service by RTL+ subscribers? Thank you. Thank you a lot for your questions. I will address your first question. Our guidance of 7%-10% for growth for the full year 2023, at the moment, does not include an assumption that we will raise prices this year. If we were to do that, that will help us to either be at the top end of the range. Okay, Eric, to your, your second question on the adjustment at the level of the gross profit. As we have explained, and this is fully disclosed in our annual report, we are making some adjustments for all the things that are not reflecting the current performance or the normal course of business, and that are generally non-recurring. Here in that cases, and of course, we can get into all details, but those adjustments, which are non-recurring expenses or charges, they mainly relate to specific contractual provisions that we have in some of our license agreements that we have signed in the past, mainly in 2020, 2021, and which includes the Minimum Guarantee provisions. The provisions, they are booked for the semester, and they are largely the result of the level of activity, but also other factors that are completely beyond our control. The evolution of the market share of some of our content providers, the decision that we can make to improve our economics, and of course, that may have an impact on the minimum guarantees, like the optimization of the free funnel or the reduction of the trials. This is what is reflected into those provisions and their evolution year-on-year. Overall, the, the last thing I will mention is that we are having a discussion about those contractual commitments, which comes from the past, and we are confident that overall and ultimately, the impact related to these contractual commitments, which today are essentially in the P&L and in the adjusted items, will be very limited. On your third question related to, to new partnerships and more specifically, RTL. You probably remember that RTL launched its new digital streaming service strategy and service back in August 2022, and they have several type of offers, including a few offers that include music by Deezer, namely RTL+ Max and RTL+ Family. These are the offers where the subscriber can enjoy the full music experience provided by Deezer. When it was launched in August 2022, because of all the technical developments that took place on the RTL side, they decided that they could only launch it with two separate app. When the subscriber was taking the subscription to the RTL+ Max service, they had the video on one app, and they had the music on a separate app, because RTL was not able to combine those two apps at launch. This is what we mean by the multimedia app, which is finally the app where, in a single application, the subscriber, the consumer, will have access to all type of content and will not have to change or to download an additional app. In the first year of the partnership, we had to deal with that situation where the promise to the subscriber, the promise to the consumer, was not complete yet, but starting in the coming weeks, all the subscribers and all the new subscribers will have all that experience into a single app. This is going to enhance the customer value proposition. This is going to drive much more the cross-content usage, and this is why this will support the growth acceleration of our joint offer, so RTL+ Max and RTL+ Family. And, and we are very excited about that, because, again, this is quite different from the situation of the first 12 months. This is an example of the type of expansion and change that we expect and will drive an increase in our subscriber growth and increase in our revenues as of the second half. We have others, like Sonos, which will have a full semester impact, because as you know, it only started at the end of April. Mercado Libre, which will start, and the new offers, which will be unveiled a little bit later, during this quarter, and they will start immediately, and they will drive in the course of the third quarter and on, on a full quarter basis in Q4, additional subscriber, and it should top line. These are the, the growth levels that we have from our partnership business. Thank you. Thank you very much. Thank you. We'll move on with our next participant, Silvia Cuneo from Deutsche Bank. Please go ahead. Your line is open. Thanks. Good morning, everyone. I would also like to ask three questions. The first one is on the B2C France business. In France, you continue to add direct subscribers, quarter -on -quarter. Can you please tell us about what has been the driver of strong additions in France, in your view, and where the new subscribers are coming from, and what are your markets ambition for your own market in the medium term? Second question on the B2B partnerships business. That was the largest revenue growth driver in H1, and we understand will also be the case in H2. You partly talked about this in the prior question, can you please discuss a little bit more what assumptions for partnerships build-up you made within your low end and high end of the guidance range? Could you achieve the top end with the ramp-up of existing partnerships, I mean, or would you need to sign additional ones? Then the final question on the new initiatives. The other revenue growth line accelerated significantly in Q2. Can you talk a bit more about the different initiatives within the mix and progress in areas like, Zen by Deezer and label services? Thank you. Thank you, Silvia. I will start addressing your first question. Our subscriber growth in France, as you have seen, it's very healthy, very strong, and has been like that for quite a while. The drivers are several. The first one is we have actually increased our marketing spend in France. The overall reduction is driven by cuts in the rest of the world. In France, in particular, we have been increasing our marketing spend. The second is that we see improved economics, even though with more spend, our economics in France have substantially improved, which allows us basically to build up a stronger base and invest. Additionally, the French market is growing, what we see is that penetration of paid subscription in France is still very low. It's one of the lowest for Western countries, the market is growing at around the same level as us. Basically around 9% growth in subscribers. What we see is that we grow with the market. We have been holding on market share in France now for quite a long time, we have around a bit more than a quarter of the French market, we expect that market share that has been very stable over the last quarters to remain stable or even improve. All of those things are driving our solid performance in subscribers in France, and we're very happy with that, with that trend. Yeah. Silvia, hi, this is Stéphane. Let me answer the, the second and the third question. Let me start with a bit of a general comment on partnerships and developing new businesses. We know that when you want to grow new businesses, this can take time, and especially when you develop and when you expand beyond your core business and into new offerings. This is the case, for example, in partnership, because we go into new industries, like, you know, signing with RTL. Themselves, they are launching something that is quite new for a traditional media company, or Sonos, who is also heading into a different business compared to their typical hardware business, or when we develop new verticals like we are doing with Zen tech and label services or Driift. You don't always know precisely when you're going to sign new deals and how quickly they will generate material, incremental revenues. That's true for us, but sometimes it's even true and even more true for our partners. When it comes to the— to those partnerships, we are really happy with the deals that we have signed and that we have been able to sign, both the one of RTL a year and a half ago, but also the one with Sonos at the beginning of the year in the U.S,, the one with Mercado Libre, which is a, a big expansion that we expect. We know that overall, this will drive a significant increase in our revenues moving forward. The timing of signature, the timing of launch, the speed of the ramp-up, that can wait a little bit on the revenue goes in the short term, but that doesn't change the midterm revenue opportunity that we see. And we know that at some point they will all deliver their full potential. Now, to your specific question about H2, it's going to—we have today, three, putting aside and on top of our clean partners, we have three recent or new partnerships that are growing and which are generating incremental revenues and incremental subscriber more or less rapidly. RTL, and as I responded in the previous question, there is room for acceleration here with the multimedia app. Sonos, which is ramping up progressively, as you may remember, in our press release in February, we indicated that we are working with Sonos in order to expand and enrich their music service experience moving forward. We have what exists today, and then we will develop more with Sonos, a richer service, but it will take a bit of time. Then finally Mercado Libre, which in the course of this quarter, we will announce new offers and significant expansion. That will be the build-up in Q3, even more in Q4, by definition, and of course, even more in 2024. Now, whether —we don't need more and additional partnerships in order to generate what is embedded in terms of assumptions in our range, top-line range of 7%-10%. This is more the speed at which they will ramp up and the magnitude that they will reach in Q3 and especially in Q4, that will determine whether we are more in the lower end or more in the higher end. Now, lastly, we are, of course, in negotiation with other partners, and we hope to be able to sign and announce other partnership in the second half, and they will continue to bring their own contribution moving forward. Probably not so much in the second half, but starting in the first half. We are just adding up new partnerships, and each of them will bring an incremental contribution that will just add up, and this is why we know we will have an acceleration of our top line growth for partnership in the second half and even more in 2024 and beyond. This is the core of our strategy. Finally, as you know, our partners, they stay with us, and the best evidence of that is the renewal we had with Orange, that we signed in July. It's relatively the same for other new initiatives, although they bring a lower revenue contribution. Again, we expect both on tech services, on label services, and to some extent, also on Zen, to be able to start booking more revenues and accelerating the growth in the second half and then moving forward in 2024. Very clear. Thank you. Thank you. We'll move on with Mourad Lahmidi from BNP Paribas. Please go ahead. Your line is open. Yes, good morning, gentlemen. I have two questions on my side. The first one is, could you provide us some granularity on the driver behind the tweaking down of your guidance from above 10% to 7%-10%? Is it entirely due to phasing of partnerships, or was there other factors playing out here? The second question is on your strategy to exit freemium, from what I understood from the press release. Do you still have a big chunk of your business coming from freemium, or do you still have potential to continue exiting those types of activity streams? Thank you. Yes. Let me start with the, the first one. Yes, it's only related to the phasing, and the magnitude of the ramp up of the of the partnership, and that's the reason now we are a bit more cautious. And when I say partnerships, I mean mainly B2B partnerships, but also to a lesser extent, the phasing of the ramp up of those new sources of revenues, tech services, et cetera. The— but the bulk of that is really the traditional partnerships. On your second question about the freemium, we got freemium now to be breakeven, and we expect that to become a profitable segment in the months to come. We have exited 140 countries out of the 180 that we have, but we still have a freemium version in 40 countries, the most relevant ones for us. Actually, we're able to make it work in those markets. We obviously will continue to optimize the free funnel, but we have no intention right now to exit freemium in any of the countries where we have it at the moment. Especially in places like France, we see our freemium product working quite well. Having said that, freemium is not our main source for traffic, and it's a very small part of our business. If you look at the contribution to revenues, it's a very low single digit of revenues coming from advertising. Therefore, it's not a meaningful driver of top line, but historically has been costing us a lot of money, and now we have stopped the bleeding, basically. Thank you very much. Thank you. Ladies and gentlemen, if you have any follow-up questions, we are happy to take it, and please press star one again. All right, it appears there is no further questions at this time. I'd like to turn the conference back to the host for any additional or closing remarks. Thank you. Thank you everyone for attending this conference call. Again, if you have any further questions, we are at your disposal, and in the meantime, we wish you a very good day. Thank you. Thanks. Thank you for joining today's call. You may now disconnect. Have a nice day, everyone.