Strong growth in Platform advertising revenue driving improved profitability
Highlights of Q1 2024

  * 31% growth in Platform advertising revenue to EUR 89.2 million in Q1 2024,
    compared to EUR 68.0 million in Q1 2023, mainly driven by increased Direct
    sales and Automated auction sales and the benefits of integrating and
    consolidating past acquisitions, including Hawk as Azerion's single media
    buying platform.
  * 58% increase in Hawk revenue as compared to Q1 2023, largely due to scale
    benefits and efficiencies from operating within Azerion's Platform and
    confirming the improved value proposition and synergies generated by the
    acquisition.
  * Total Revenue of EUR 119.7 million in Q1 2024, up 6.2% from EUR 112.7 million in
    Q1 2023, mainly driven by higher advertising spend across the Platform
    Segment particularly in Direct sales, the integration of past acquisitions
    and notwithstanding the loss of contribution from the divested social card
    games portfolio.
  * Adjusted EBITDA in Q1 2024 of EUR 9.8 million, an increase of 12.6% as

compared to EUR 8.7 million in Q1 2023, largely driven by increased Platform

    revenue from advertising, particularly in Direct sales, cost savings and
    efficiencies from the integration of previous acquisitions and a gain on
    acquisition related earn-outs and notwithstanding the loss of contribution
    from the social card games portfolio divested in Q3 2023.
  * Total operating expenses down 23% in Q1 2024 as compared to Q1 2023 due to
    delivery of ongoing optimisation and efficiency programmes.
  * Significant progress in advancing our product and technology roadmap,
    including continued development of Performance by Azerion, Azerion's
    audience and data management platform, the integration of Azerion's single
    media buying interface and enhanced monetisation and content development
    solutions.
  * Signed 42 new publishers and connected 5 additional SSPs to expand our
    digital audiences across Europe and the Americas.

* Expanded our market position in the Nordic markets in April 2024 by entering

    into a strategic partnership with Eniro Group AB, supported by the
    acquisition of a minority stake, to provide digital advertising services to

Eniro's 50,000 SME client base and various services related to monetisation, product and technology.
Selected KPIs
Financial Results - Azerion Group N.V.
in millions of EUR
+------------------------------------+---------+---------+---------+
| | Q1 2024 | Q1 2023 | Growth |
+------------------------------------+---------+---------+---------+
| Platform Segment | | | |
+------------------------------------+---------+---------+---------+
| Advertising Platform | 89.2 | 68.0 | 31.2% |
+------------------------------------+---------+---------+---------+
| AAA Game Distribution (e-commerce) | 19.2 | 21.3 | (9.9)% |
+------------------------------------+---------+---------+---------+
| Total Revenue | 108.4 | 89.3 | 21.4% |
+------------------------------------+---------+---------+---------+
| Adj. EBITDA | 9.0 | 3.6 | 150.0% |
+------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------+---------+---------+---------+
| Premium Games(1)()) | | | |
+------------------------------------+---------+---------+---------+
| Revenue | 11.3 | 23.5 | (51.9)% |
+------------------------------------+---------+---------+---------+
| Adjusted EBITDA | 0.8 | 5.1 | (84.3)% |
+------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------+---------+---------+---------+
| Total Group | | | |
+------------------------------------+---------+---------+---------+
| Revenue | 119.7 | 112.7 | 6.2% |
+------------------------------------+---------+---------+---------+
| Adj. EBITDA | 9.8 | 8.7 | 12.6% |
+------------------------------------+---------+---------+---------+
(1))2023 figures for Premium Games contain results of the social cards game
portfolio that was divested in Q3 2023. For detailed split of Premium Games
results please refer to respective section below.
+----------------------+------+-------+---+
| Adj. EBITDA Margin % | | | |
+----------------------+------+-------+---+
| Platform | 8.3% | 4.0% | |
+----------------------+------+-------+---+
| Premium Games | 7.1% | 21.7% | |
+----------------------+------+-------+---+
| Total Group | 8.2% | 7.7% | |
+----------------------+------+-------+---+
Message from the CEO
"We aim to become a cornerstone partner for brands, agencies and publishers
across Europe's digital advertising landscape and are pleased with our progress
in Q1. Our advertising platform has seen strong revenue growth and improved
profitability. The ongoing integration of our single media buying platform
continues to improve our delivery for our advertising clients, while positioning
us well for growth in premium advertising formats such as Digital Out-of-Home,
Audio, and Connected TV. By streamlining operations, we have unlocked
significant efficiencies that help drive our growth and enhance our service
offerings and we continue to see benefits from our ongoing investment in
advanced machine learning and AI. As our platform continues to scale, we also
see a strong and attractive pipeline of opportunities for strategic
partnerships."
- Umut Akpinar
Financial overview
Revenue
Revenue for the quarter amounted to EUR 119.7 million compared to EUR 112.7 million
in Q1 2023, an increase of approximately 6.2%. The increase in Revenue year on
year came mainly from growth in the Platform segment revenue of EUR 19.1 million,
driven by increased advertising revenue from Direct and Automated auction sales
and the integration of previous acquisitions, offset by a reduction in Revenue
in Premium Games due to the sale of the social card games portfolio completed
during Q3 2023 with that portfolio contributing revenue of EUR 11.3 million in Q1
2023 and a reduction in Revenue from AAA Game Distribution (formerly referred to
as e-commerce) of EUR 2.1 million largely due to fewer high profile AAA game
releases in Q1 2024 compared to Q1 2023.
Earnings
The operating loss for the quarter amounted to EUR (5.7) million, an improvement
of EUR 2.0 million as compared to an operating loss of EUR (7.7) million in Q1
2023, with the benefits of higher revenue, lower personnel costs and lower other
expenses, largely offset by the higher costs of services and materials and
related lower comparative margins from the change in business mix arising from
sale of the social card games portfolio completed in August 2023 and the
acquisition and integration of Hawk.
Adjusted EBITDA in Q1 2024 of EUR 9.8 million, an increase of 12.6% as compared to
EUR 8.7 million in Q1 2023, largely driven by increased Platform revenue from
advertising, particularly in Direct sales, cost savings and efficiencies from
the integration of previous acquisitions and a gain on acquisition related earn-
outs of EUR 1.6 million and notwithstanding the loss of contribution from the
social card games portfolio divested in Q3 2023 with that portfolio contributing
Adjusted EBITDA of EUR 3.5 million in Q1 2023.
Cash flow
Cash flow from operating activities in Q1 2024 was an inflow of approximately EUR
1.7 million, mainly due to movements in net working capital, reflecting an
increase in trade and other payables of EUR 4.2 million and a decrease in trade
and other receivables of EUR 2.8 million, offset by EUR (4.5) million paid on bond
related interest and EUR (1.5) paid in income tax. Cash flow from investing
activities for the period was an outflow of EUR (9.2) million, mainly due to cash
outflow on past acquisitions of subsidiaries in the amount of EUR (3.6) million
and payments for intangibles of EUR (4.9) million. Cash flow from financing
activities in the period amounted to an outflow of EUR (3.2) million, mainly due
to repayment of borrowings of EUR (1.5) million and repayment of lease liabilities
of EUR (1.5) million.
Capex
Azerion capitalises development costs related to the internal development of
assets, a core activity to support innovation in its platform. These costs
primarily relate to developers' time devoted to the development of the platform,
games and other new features. In Q1 2024 Azerion capitalised EUR 3.3 million,
equivalent to 13.3% (Q1 2023: EUR 4.3 million, equivalent to 14.9%) of gross
personnel costs excluding restructuring provision expense.
Financial position and borrowing
Net interest bearing debt(*)) amounted to EUR 158.1 million as at 31 March 2024,
mainly comprising the outstanding bond loan with a nominal value of EUR 165
million (part of a total EUR 300 million framework) and lease liabilities with a
balance of EUR 18.5 million less the cash and cash equivalents position of EUR 29.7
million.
(*))As defined in the Terms & Conditions of the Senior Secured Callable Floating
Rate Bonds ISIN: NO0013017657. Please also refer to the Definitions section and
the notes of this Interim Report for more information.
Platform Segment
Our Platform segment includes our digital advertising activities, AAA Game
Distribution (formerly referred to as e-commerce), Casual Game Distribution
(being the operation and distribution of casual games) and Azerion Sports. The
Platform segment generates Revenue mainly by displaying digital advertisements
in both game and general content, as well as selling and distributing AAA games.
Advertisers are serviced through two models: i) Direct sales, which involve a
direct engagement between Azerion's commercial teams and advertisers or their
agencies in the placement of digital advertisements, and ii) Automated auction
sales in which advertising inventory is purchased through the open market.
Platform is also integrated with parts of our Premium Games segment, leveraging
inter-segment synergies.
Selected business highlights in Q1 2024 include:
* Expanded our digital audio advertising platform offering through a strategic

    partnership with Acast, in which Azerion will support local advertisers and
    agencies in Spain, Belgium, The Netherlands, Italy and Greece to execute
    their audio advertising campaigns on Acast's podcast network.
  * Strengthened our position to deliver premium advertising solutions in the
    dynamic Italian media landscape through a partnership with Money.it
  * Together with the Royal Dutch Football Association ("KNVB"), Azerion Sports
    launched a new app for the Azerion Women's League making the league more
    accessible and interactive for fans and expanding Azerion's ecosystem of
    engaged audiences.
  * Azerion Sports signed an additional two clubs to its white-label fan
    engagement app, now totalling 23 clubs and 228,000 app downloads by the end
    of Q1 2024, helping clubs engage and interact with their fan base in a
    consolidated platform.
  * Azerion strengthened its casual games distribution portfolio during Q1
    2024, adding 302 new games and 54 new publisher partners.

Platform - Selected Financial KPIs
Financial results - Platform
in millions of EUR
+-------------------------------------------+--------+-------+
| | Q1 | Q1 |
+-------------------------------------------+--------+-------+
| | 2024 | 2023 |
+-------------------------------------------+--------+-------+
| Advertising Platform | 89.2 | 68.0 |
+-------------------------------------------+--------+-------+
| AAA Game Distribution (e-commerce) | 19.2 | 21.3 |
+-------------------------------------------+--------+-------+
| Total Revenue | 108.4 | 89.3 |
+-------------------------------------------+--------+-------+
| Operating profit / (loss) | (3.7) | (8.3) |
+-------------------------------------------+--------+-------+
| Adjusted EBITDA | 9.0 | 3.6 |
+-------------------------------------------+--------+-------+
| | | |
+-------------------------------------------+--------+-------+
| Revenue growth % - Advertising Platform | 31.2% | |
+-------------------------------------------+--------+-------+
| Revenue growth % - AAA Game Distribution | (9.9)% | |
+-------------------------------------------+--------+-------+
| Total Revenue growth % | 21.4% | |
+-------------------------------------------+--------+-------+
| Adjusted EBITDA growth % | 150.0% | |
+-------------------------------------------+--------+-------+
| Adjusted EBITDA margin % | 8.3% | 4.0% |
+-------------------------------------------+--------+-------+
Total Platform Revenue of EUR 108.4 million in Q1 2024, compared to EUR 89.3 million
in Q1 2023, an increase of 21.4% due to increased Revenue from the Advertising
platform, offset by a decrease in Revenue from AAA game key sales in AAA Game
Distribution (formerly referred to as e-commerce).
Advertising Platform Revenue of EUR 89.2 million in Q1 2024, an increase of
approximately 31% compared to EUR 68.0 million in Q1 2023, mainly driven by
increased Direct and Automated auction sales and the benefits of integrating and
consolidating past acquisitions, including Hawk as Azerion's single media buying
platform. Revenue in Hawk increased by 58% as compared to Q1 2023, contributing
EUR 16.4 million of Revenue in Q1 2024 as compared to pre-acquisition Revenue of EUR
10.4 million for the same period last year, largely due to the scale benefits
and efficiencies from operating within Azerion's Platform and confirming the
improved value proposition and synergies generated by the acquisition.
In Q1 2024, Azerion's Direct sales contributed approximately 70% of Platform
advertising revenue, as compared to approximately 65% in Q1 2023, with the
balance provided by Automated auction sales. In Q1 2024, AAA Game Distribution
generated Revenue of EUR 19.2 million as compared to EUR 21.3 million in Q1 2023, a
decrease of approximately (9.9)% largely due to fewer high-profile AAA game
releases in Q1 2024 compared to Q1 2023. In Q1 2024, AAA Game Distribution
Revenue represented approximately 17.7% of total Platform Revenue, as compared
to approximately 23.9% in Q1 2023.
Total Platform Adjusted EBITDA of EUR 9.0 million in Q1 2024, compared to EUR 3.6
million in Q1 2023, an increase of 150.0% largely due to growth in higher-margin
Direct sales, improved spend on higher-impact ads in channels such as audio, CTV
and DOOH, increased monetisation of exclusive partnerships and owned and
operated content, together with ongoing consolidation and integration of
previously acquired businesses and cost optimisation and a gain on acquisition
related earn-outs of EUR 1.6 million. The Adjusted EBITDA performance also
reflects the successful integration of the recent Hawk acquisition.
Advertising - Selected Operational KPIs
Advertising - Operational KPIs(1))
+------------------------------------+-------+-------+-------+-------+-------+
| |Q1 2023|Q2 2023|Q3 2023|Q4 2023|Q1 2024|
+------------------------------------+-------+-------+-------+-------+-------+
|Avg. Digital Ads Sold per Month (bn)|12.2 |13.0 |12.2 |12.9 |12.0 |
+------------------------------------+-------+-------+-------+-------+-------+
(1))The reporting of average Gross Revenue per Million Processed Ad Requests
from advertising auction platform (EUR) has been temporarily discontinued due to
the ongoing integration of operational reporting data from the acquisition of
Hawk completed in Q4 2023 and a review of our selected operational KPIs for this
segment more generally.
The Average Digital Ads Sold per Month decreased to 12.0 billion in Q1 2024 from
12.2 billion in Q1 2023, reflecting an ongoing focus on premium digital
advertising formats such as DOOH, digital audio, drive to store, resulting in
higher CPMs and lower digital ads sold.
The selected operational KPIs include the Hawk acquisition as of Q1 2024.
Premium Games Segment
From Q4 2023, the Premium Games segment consists of social casino games and
metaverse games. Azerion completed the sale of its social card games portfolio
to Playtika Holding Corp. on 28 August 2023 and its contribution to the Premium
Games segment ceased at that date. The segment generates revenue mainly by
offering users the ability to make in-game purchases for extra features and
virtual goods to enhance their gameplay experience. This segment aims to
stimulate social interaction among players and build communities, offering an
extended value proposition to advertisers and generating cross-selling
opportunities with the Platform segment.
Selected Q1 2024 business highlights

  * Introduced two new sale mechanics "Fortunas wheels" and "Offer chain" into
    the social casino portfolio improving user monetisation.

* Habbo continued its adoption of Web3 technology with the launch of Collector Cabinets, a feature that can convert in-game items into NFTs
Premium Games - Selected Financial KPIs
Financial results - Premium Games
in millions of EUR
+---------------------------------------------------------+---------+-------+
| | Q1 | Q1 |
+---------------------------------------------------------+---------+-------+
| | 2024 | 2023 |
+---------------------------------------------------------+---------+-------+
| Revenue (excluding social card games) | 11.3 | 12.2 |
+---------------------------------------------------------+---------+-------+
| Social card games portfolio | - | 11.3 |
+---------------------------------------------------------+---------+-------+
| Total Revenue | 11.3 | 23.5 |
+---------------------------------------------------------+---------+-------+
| Operating profit / (loss) (excluding social card games) | (2.0) | (2.5) |
+---------------------------------------------------------+---------+-------+
| Social card games portfolio | - | 3.1 |
+---------------------------------------------------------+---------+-------+
| Total Operating profit / (loss) | (2.0) | 0.6 |
+---------------------------------------------------------+---------+-------+
| Adjusted EBITDA (excluding social card games) | 0.8 | 1.6 |
+---------------------------------------------------------+---------+-------+
| Social card games portfolio | - | 3.5 |
+---------------------------------------------------------+---------+-------+
| Total Adjusted EBITDA | 0.8 | 5.1 |
+---------------------------------------------------------+---------+-------+
| | | |
+---------------------------------------------------------+---------+-------+
| Revenue growth % (excluding social card games) | (7.4)% | |
+---------------------------------------------------------+---------+-------+
| Adjusted EBITDA growth % (excluding social card games) | (50.0)% | |
+---------------------------------------------------------+---------+-------+
| Adjusted EBITDA margin % (excluding social card games) | 7.1% | 13.1% |
+---------------------------------------------------------+---------+-------+
Revenue of EUR 11.3 million in Q1 2024, as compared to EUR 12.2 million in Q1 2023
(excluding social card games), a decrease of (7.4)%, mainly due to the sale of
Woozworld to its management at the start of January 2024 (EUR 0.5 million Revenue
in Q1 2023) and management actions on the remaining portfolio.
Adjusted EBITDA of EUR 0.8 million in Q1 2024, compared to EUR 1.6 million in Q1
2023 (excluding social card games), a decrease of (50.0)%, mainly driven by the
social casino portfolio and a shift in new-user generation to mobile in
Azerion's own environment, as well as through its white label partners, which
has higher growth potential over time, but also higher transaction costs as
compared to web.
Premium Games - Selected Operational KPIs
Premium Games - Operational KPIs
+-------------------------------+-------+-------+-------+-------+-------+
| |Q1 2023|Q2 2023|Q3 2023|Q4 2023|Q1 2024|
+-------------------------------+-------+-------+-------+-------+-------+
|Avg. Time in Game per Day (min)|76 |81 |80 |95 |87 |
+-------------------------------+-------+-------+-------+-------+-------+
|Avg. DAUs (thousands) |310 |274 |252 |255 |251 |
+-------------------------------+-------+-------+-------+-------+-------+
|ARPDAU (EUR) |0.39 |0.42 |0.44 |0.47 |0.42 |
+-------------------------------+-------+-------+-------+-------+-------+

  * The Average Time in Game per Day (min) increased by 14.5% in Q1 2024 to 87
    minutes per day as compared to Q1 2023 due to improved in-game sales
    mechanics, features and events.
  * The Average Daily Active Users (DAUs) decreased by (19.0)% in Q1 2024
    compared to Q1 2023, mainly due to lower user acquisition spend and
    increased focus on greater engagement with higher paying users.
  * The Average Revenue per Daily Active User (ARPDAU) increased by 7.7% in Q1
    2024 compared to Q1 2023, due to improved spending in social casino and
    metaverse titles due to improved in-game sales mechanics, features and
    events.

Given the sale of the social cards portfolio in August 2023, the selected
operational KPIs for all quarters have been revised to no longer contain results
from the social card games portfolio.
Outlook
The guidance previously provided remains unchanged:

  * Revenue for full year 2024 is expected to be in the range of approximately EUR
    540 million to EUR 560 million, with annual growth thereafter in the medium
    term expected to be approximately 10%.
  * Adjusted EBITDA for full year 2024 is expected to be in the range of
    approximately EUR 75 million to EUR 80 million, with annual Adjusted EBITDA
    margin thereafter in the medium term expected to be in the range of
    approximately 14% to 16%.

Other information
Net Interest Bearing Debt
Net Interest Bearing Debt
in millions of EUR
+----------------------------------------+---------------+------------------+
| | 31 March 2024 | 31 December 2023 |
+----------------------------------------+---------------+------------------+
| Total non-current indebtedness | 175.1 | 172.0 |
+----------------------------------------+---------------+------------------+
| Total current indebtedness| 12.8 | 12.6 |
+----------------------------------------+---------------+------------------+
| Total financial indebtedness | 187.9 | 184.6 |
+----------------------------------------+---------------+------------------+
| Deduct Zero interest bearing loans | (0.1) | (0.1) |
+----------------------------------------+---------------+------------------+
| Net Interest Bearing Debt | 187.8 | 184.5 |
+----------------------------------------+---------------+------------------+
| Less: Cash and cash equivalents | (29.7) | (40.3) |
+----------------------------------------+---------------+------------------+
| Net Interest Bearing Debt (Bond terms) | 158.1 | 144.2 |
+----------------------------------------+---------------+------------------+
References to bond terms in the table above refer to the terms as defined in the
Senior Secured Callable Floating Rate Bonds ISIN: NO0013017657
Reconciliation of net income to Adjusted EBITDA
Reconciliation of net income to Adjusted EBITDA
in millions of EUR
+--------------+---------------------------------------------------------------+
| |Q1 | +--------------+--------------------------------+------------------------------+
| |2024 |2023 | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
| |Azerion |Premium |Platform|Other|Azerion|Premium|Platform|Other| | |Group |Games | | |Group |Games | | | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Profit / | | | | | | | | | |(loss) for the|(16.3) | | | |(12.4) | | | | |period | | | | | | | | | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Income Tax |1.9 | | | |0.9 | | | | |expense | | | | | | | | | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Profit / | | | | | | | | | |(loss) before |(14.4) | | | |(11.5) | | | | |tax | | | | | | | | | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Net finance |8.7 | | | |3.8 | | | | |costs | | | | | | | | | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Operating | | | | | | | | | |profit / |(5.7) |(2.0) |(3.7) |- |(7.7) |0.6 |(8.4) |0.1 | |(loss) | | | | | | | | | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Depreciation, | | | | | | | | | |amortisation |10.4 |2.5 |7.9 |- |10.3 |3.1 |7.2 |- | |and impairment| | | | | | | | | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Other |0.6 |0.1 |0.5 |- |- |0.1 |- |(0.1)| +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Acquisition |3.8 |0.1 |3.7 |- |2.8 |- |2.8 |- | |expenses | | | | | | | | | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Restructuring |0.7 |0.1 |0.6 |- |3.3 |1.3 |2.0 |- | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
|Adjusted |9.8 |0.8 |9.0 |- |8.7 |5.1 |3.6 |- | |EBITDA | | | | | | | | | +--------------+--------+--------+--------+-----+-------+-------+--------+-----+
Operating expenses
Breakdown of Operating expenses
in millions of EUR
+--------------------------------+-----------------+

|                                | Q1              |
|                                +--------+--------+
|                                | 2024   | 2023   |

+--------------------------------+--------+--------+
| Personnel costs | (22.2) | (27.8) |
+--------------------------------+--------+--------+
| Includes: | | |
+--------------------------------+--------+--------+
| Restructuring related expenses | (0.7) | (3.3) |
+--------------------------------+--------+--------+
| Other expenses | (7.9) | (11.5) |
+--------------------------------+--------+--------+
| Operating expenses | (30.1) | (39.3) |
+--------------------------------+--------+--------+
Restructuring
In relation to ongoing consolidation and integration, restructuring charges in
Q2 2024 are expected to be approximately EUR 0.8 million. These costs impact the
reported operating profit / loss, but are removed from Adjusted EBITDA.
Condensed consolidated statement of profit or loss and other comprehensive
income
Condensed consolidated statement of profit or loss and other comprehensive
income
in millions of EUR
+----------------------------------------------------------+-----------------+
| | Q1 |
+----------------------------------------------------------+--------+--------+
| | 2024 | 2023 |
+----------------------------------------------------------+--------+--------+
| Revenue | 119.7 | 112.7 |
+----------------------------------------------------------+--------+--------+
| Costs of services and materials | (86.5) | (70.7) |
+----------------------------------------------------------+--------+--------+
| Personnel costs | (22.2) | (27.8) |
+----------------------------------------------------------+--------+--------+
| Depreciation | (1.8) | (1.9) |
+----------------------------------------------------------+--------+--------+
| Amortisation | (8.6) | (8.4) |
+----------------------------------------------------------+--------+--------+
| Other gains and losses(1)) | 1.6 | (0.1) |
+----------------------------------------------------------+--------+--------+
| Other expenses | (7.9) | (11.5) |
+----------------------------------------------------------+--------+--------+
| Operating profit / (loss) | (5.7) | (7.7) |
+----------------------------------------------------------+--------+--------+
| | | |
+----------------------------------------------------------+--------+--------+
| Finance income | 1.0 | 2.9 |
+----------------------------------------------------------+--------+--------+
| Finance costs(2)) | (9.7) | (6.7) |
+----------------------------------------------------------+--------+--------+
| Net Finance costs | (8.7) | (3.8) |
+----------------------------------------------------------+--------+--------+
| | | |
+----------------------------------------------------------+--------+--------+
| Share in profit/(loss) of joint ventures and associates | - | - |
+----------------------------------------------------------+--------+--------+
| Profit / (loss) before tax | (14.4) | (11.5) |
+----------------------------------------------------------+--------+--------+
| | | |
+----------------------------------------------------------+--------+--------+
| Income tax expense | (1.9) | (0.9) |
+----------------------------------------------------------+--------+--------+
| Profit / (loss) for the period | (16.3) | (12.4) |
+----------------------------------------------------------+--------+--------+
| Attributable to: | | |
+----------------------------------------------------------+--------+--------+
| Owners of the company | (16.6) | (12.5) |
+----------------------------------------------------------+--------+--------+
| Non-controlling interest | 0.3 | 0.1 |
+----------------------------------------------------------+--------+--------+
| | | |
+----------------------------------------------------------+--------+--------+
| Exchange difference on translation of foreign operations | (0.8) | 0.1 |
+----------------------------------------------------------+--------+--------+
| Total other comprehensive income | (0.8) | 0.1 |
+----------------------------------------------------------+--------+--------+
| | | |
+----------------------------------------------------------+--------+--------+
| Total comprehensive income/(loss) | (17.1) | (12.3) |
+----------------------------------------------------------+--------+--------+
| Attributable to: | | |
+----------------------------------------------------------+--------+--------+
| Owners of the company | (17.4) | (12.2) |
+----------------------------------------------------------+--------+--------+
| Non-controlling interest | 0.3 | (0.1) |
+----------------------------------------------------------+--------+--------+
(1))Earn-out results have been reclassified from Other expenses to Other gains
and losses
(2))The main change Q1 2024 versus Q1 2023 comes from fair value movement on the
call option related to the settlement of the shareholder loans as announced 11
December 2023.
Condensed consolidated statement of financial position
Condensed consolidated statement of financial position
in millions of EUR
+-----------------------------------------+--------------+----------------+
| |31 March 2024|31 December 2023|
+-----------------------------------------+--------------+----------------+
|Assets | | |
+-----------------------------------------+--------------+----------------+
|Non-current assets |414.1 |413.6 |
+-----------------------------------------+--------------+----------------+
|Goodwill |187.6 |187.1 |
+-----------------------------------------+--------------+----------------+
|Intangible assets |173.4 |176.3 |
+-----------------------------------------+--------------+----------------+
|Property, plant and equipment |21.3 |17.0 |
+-----------------------------------------+--------------+----------------+
|Non-current financial assets |29.5 |30.8 |
+-----------------------------------------+--------------+----------------+
|Deferred tax asset |2.2 |2.3 |
+-----------------------------------------+--------------+----------------+
|Investment in joint venture and associate|0.1 |0.1 |
+-----------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------+--------------+----------------+
|Current assets |224.1 |238.4 |
+-----------------------------------------+--------------+----------------+
|Trade and other receivables |193.0 |196.7 |
+-----------------------------------------+--------------+----------------+
|Current tax assets |1.4 |1.4 |
+-----------------------------------------+--------------+----------------+
|Cash and cash equivalents |29.7 |40.3 |
+-----------------------------------------+--------------+----------------+
|Total assets |638.2 |652.0 |
+-----------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------+--------------+----------------+
|Equity | | |
+-----------------------------------------+--------------+----------------+
|Share capital |1.2 |1.2 |
+-----------------------------------------+--------------+----------------+
|Share premium |140.2 |140.2 |
+-----------------------------------------+--------------+----------------+
|Treasury shares |- |- |
+-----------------------------------------+--------------+----------------+
|Legal reserve |28.7 |27.7 |
+-----------------------------------------+--------------+----------------+
|Share based payment reserve |12.8 |12.7 |
+-----------------------------------------+--------------+----------------+
|Currency translation reserve |(2.7) |(1.9) |
+-----------------------------------------+--------------+----------------+
|Other equity instruments |- |0.0 |
+-----------------------------------------+--------------+----------------+
|Retained earnings |(92.7) |(75.6) |
+-----------------------------------------+--------------+----------------+
|Shareholders' equity |87.5 |104.3 |
+-----------------------------------------+--------------+----------------+
|Non-controlling interest |5.5 |5.3 |
+-----------------------------------------+--------------+----------------+
|Total equity |93.0 |109.6 |
+-----------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------+--------------+----------------+
|Liabilities | | |
+-----------------------------------------+--------------+----------------+
|Non-current liabilities |218.2 |220.1 |
+-----------------------------------------+--------------+----------------+
|Borrowings |161.8 |161.9 |
+-----------------------------------------+--------------+----------------+
|Lease liabilities |13.3 |10.1 |
+-----------------------------------------+--------------+----------------+
|Provisions |1.6 |1.6 |
+-----------------------------------------+--------------+----------------+
|Deferred tax liabilities |32.0 |30.0 |
+-----------------------------------------+--------------+----------------+
|Other non-current liabilities |9.5 |16.5 |
+-----------------------------------------+--------------+----------------+
| | | |
+-----------------------------------------+--------------+----------------+
|Current liabilities |327.0 |322.3 |
+-----------------------------------------+--------------+----------------+
|Borrowings |7.6 |8.4 |
+-----------------------------------------+--------------+----------------+
|Provisions |2.2 |3.6 |
+-----------------------------------------+--------------+----------------+
|Trade payables (1)) |145.0 |142.0 |
+-----------------------------------------+--------------+----------------+
|Accrued liabilities(1)) |103.1 |112.7 |
+-----------------------------------------+--------------+----------------+
|Current tax liabilities |11.6 |13.4 |
+-----------------------------------------+--------------+----------------+
|Lease liabilities |5.2 |4.2 |
+-----------------------------------------+--------------+----------------+
|Other current liabilities(1)) |52.3 |38.0 |
+-----------------------------------------+--------------+----------------+
|Total liabilities |545.2 |542.4 |
+-----------------------------------------+--------------+----------------+
|Total equity and liabilities |638.2 |652.0 |
+-----------------------------------------+--------------+----------------+
(1))Trade, other payables and accrued liabilities have been reclassified to
Trade payables, Accrued liabilities and Other current liabilities to better
reflect the reporting by nature
Condensed consolidated statement of cash flow
Condensed consolidated statement of cash flow
In millions of EUR
+----------------------------------------------------------------+------+------+
| |2024 |2023 | +----------------------------------------------------------------+------+------+
| |Q1 |Q1 | +----------------------------------------------------------------+------+------+
|Cash flows from operating activities | | | +----------------------------------------------------------------+------+------+
|Operating profit / (loss) |(5.7) |(7.7) | +----------------------------------------------------------------+------+------+
| | | | +----------------------------------------------------------------+------+------+
|Adjustments for operating profit / (loss): | | | +----------------------------------------------------------------+------+------+
|Depreciation and amortisation & Impairments |10.4 |10.3 | +----------------------------------------------------------------+------+------+
|Movements in provisions per profit and loss |0.8 |3.3 | +----------------------------------------------------------------+------+------+
|Share-based payments expense |0.2 |- | +----------------------------------------------------------------+------+------+
|Other non-cash items |(3.0) |- | +----------------------------------------------------------------+------+------+
| | | | +----------------------------------------------------------------+------+------+
|Changes in working capital items: | | | +----------------------------------------------------------------+------+------+
|(Increase)/Decrease in trade and other receivables |2.8 |19.8 | +----------------------------------------------------------------+------+------+
|Increase (decrease) in trade payables and other payables |4.2 |7.7 | +----------------------------------------------------------------+------+------+
| | | | +----------------------------------------------------------------+------+------+
|Utilization of provisions |(2.3) |(2.1) | +----------------------------------------------------------------+------+------+
|Interest received |0.2 |- | +----------------------------------------------------------------+------+------+
|Interest paid |(4.5) |(4.1) | +----------------------------------------------------------------+------+------+
|Income tax paid |(1.4) |- | +----------------------------------------------------------------+------+------+
|Net cash provided by (used for) operating activities |1.7 |27.2 | +----------------------------------------------------------------+------+------+
| | | | +----------------------------------------------------------------+------+------+
|Cash flows from investing activities | | | +----------------------------------------------------------------+------+------+
|Payments for property, plant and equipment |(0.3) |(0.5) | +----------------------------------------------------------------+------+------+
|Payments for intangibles |(4.9) |(6.2) | +----------------------------------------------------------------+------+------+
|Net cash outflow on acquisition of subsidiaries |(3.6) |(18.2)| +----------------------------------------------------------------+------+------+
|Net cash inflow/(outflow) from sale of business |(0.4) |- | +----------------------------------------------------------------+------+------+
|Net cash provided by (used for) investing activities |(9.2) |(24.9)| +----------------------------------------------------------------+------+------+
| | | | +----------------------------------------------------------------+------+------+
|Cash flows from financing activities | | | +----------------------------------------------------------------+------+------+
|Proceeds from external borrowings |- |0.1 | +----------------------------------------------------------------+------+------+
|Repayment of external borrowings |(1.5) |(1.5) |+----------------------------------------------------------------+------+------+
|Payment of principal portion of lease liabilities |(1.5) |(1.7) | +----------------------------------------------------------------+------+------+
|Dividends paid to shareholders of non-controlling interests |(0.2) |- | +----------------------------------------------------------------+------+------+
|Net cash provided by (used for) financing activities |(3.2) |(3.1) | +----------------------------------------------------------------+------+------+
| | | | +----------------------------------------------------------------+------+------+
|Net increase/(decrease) in cash and cash equivalents |(10.7)|(0.8) | +----------------------------------------------------------------+------+------+
|Effect of changes in exchange rates on cash and cash equivalents|0.1 |0.2 | +----------------------------------------------------------------+------+------+
|Cash and cash equivalents at the beginning of the period |40.3 |50.9 | +----------------------------------------------------------------+------+------+
|Cash and cash equivalents at the end of the period |29.7 |50.3 | +----------------------------------------------------------------+------+------+
Definitions
Adjusted EBITDA represents Operating Profit / (Loss) excluding depreciation,
amortisation, impairment of non-current assets, restructuring and acquisition
related expenses and other items at management discretion, principally those
assessed as extraordinary items or non-recurring items which are not in line
with the ordinary course of business.
Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of Revenue.
Average time in game per day measures how many minutes per day, on average, the
players of Premium Games spend in the games. This demonstrates their engagement
with the games, which generates more opportunities to grow the ARPDAU.
Average DAUs represents average daily active users, which is the number of
distinct users per day averaged across the relevant period.
ARPDAU represents Average Revenue per Daily Active User, which is revenue per
period divided by days in the period divided by average daily active users in
that period and represents average per user in-game purchases for the period.
Financial Indebtedness represents as defined in the terms and conditions of the
Senior Secured Callable Floating Rate Bonds ISIN: NO0013017657 any indebtedness
in respect of:

  * monies borrowed or raised, including Market Loans;
  * the amount of any liability in respect of any Finance Leases;
  * receivables sold or discounted (other than any receivables to the extent
    they are sold on a non-recourse basis);

* any amount raised under any other transaction (including any forward sale or

    purchase agreement) having the commercial effect of a borrowing;
  * any derivative transaction entered into in connection with protection
    against or benefit from fluctuation in any rate or price (and, when

calculating the value of any derivative transaction, only the mark to market value shall be taken into account, provided that if any actual amount is due

    as a result of a termination or a close-out, such amount shall be used
    instead);

* any counter indemnity obligation in respect of a guarantee, indemnity, bond,

    standby or documentary letter of credit or any other instrument issued by a
    bank or financial institution; and

* (without double counting) any guarantee or other assurance against financial loss in respect of a type referred to in the above paragraphs (1)-(6).
Net Interest Bearing Debt as defined in the terms and conditions of the Senior
Secured Callable Floating Rate Bonds ISIN: NO0013017657 means the aggregate
interest bearing Financial Indebtedness less cash and cash equivalents
(including any cash from a Subsequent Bond Issue standing to the credit on the
Proceeds Account or another escrow arrangement for the benefit of the
Bondholders) of the Group in accordance with the Accounting Principles (for the
avoidance of doubt, excluding any Bonds owned by the Issuer, guarantees, bank
guarantees, Subordinated Loans, any claims subordinated pursuant to a
subordination agreement on terms and conditions satisfactory to the Agent and
interest bearing Financial Indebtedness borrowed from any Group Company) as such
terms are defined in the terms and conditions of the Senior Secured Callable
Floating Rate Bonds ISIN: NO0013017657.
Operating expenses are defined as the aggregate of personnel costs and other
expenses as reported in the statement of profit or loss and other comprehensive
income. More details on the reporting of cost by nature can be found in the
published annual financial statements of 2023.
Operating Profit / (Loss) represents revenue less costs of services and
materials, operating expenses, depreciation and amortisation and other gains and
losses.
Disclaimer and Cautionary Statements
This communication contains information that qualifies as inside information
within the meaning of Article 7(1) of the EU Market Abuse Regulation.
This communication may include forward-looking statements. All statements other
than statements of historical facts are, or may be deemed to be, forward-looking
statements. Forward-looking statements include, among other things, statements
concerning the potential exposure of Azerion to market risks and statements
expressing management's expectations, beliefs, estimates, forecasts, projections
and assumptions. Words and expressions such as aims, ambition, anticipates,
believes, could, estimates, expects, goals, intends, may, milestones,
objectives, outlook, plans, projects, risks, schedules, seeks, should, target,
will or other similar words or expressions are typically used to identify
forward-looking statements. Forward-looking statements are statements of future
expectations that are based on management's current expectations and assumptions
and involve known and unknown risks, uncertainties and other factors that are
difficult to predict and that could cause the actual results, performance or
events to differ materially from future results expressed or implied by such
forward-looking statements contained in this communication. Readers should not
place undue reliance on forward-looking statements.
Any forward-looking statements reflect Azerion's current views and assumptions
based on information currently available to Azerion's management. Forward-
looking statements speak only as of the date they are made and Azerion does not
assume any obligation to update or revise such statements as a result of new
information, future events or other information, except as required by law.
The interim financial results of Azerion Group N.V. as included in this
communication are required to be disclosed pursuant to the terms and conditions
of the Senior Secured Callable Floating Rate Bonds ISIN: NO0013017657.
This report has not been reviewed or audited by Azerion's external auditor.
Certain financial data included in this communication consist of alternative
performance measures ("non-IFRS financial measures"), including Adjusted EBITDA.
The non-IFRS financial measures, along with comparable IFRS measures, are used
by Azerion's management to evaluate the business performance and are useful to
investors. They may not be comparable to similarly titled measures as presented
by other companies, nor should they be considered as an alternative to the
historical financial results or other indicators of Azerion Group N.V.'s cash
flow based on IFRS. Even though the non-IFRS financial measures are used by
management to assess Azerion Group N.V.'s financial position, financial results
and liquidity and these types of measures are commonly used by investors, they
have important limitations as analytical tools, and the recipients should not
consider them in isolation or as a substitute for analysis of Azerion Group
N.V.'s financial position or results of operations as reported under IFRS.
For all definitions and reconciliations of non-IFRS financial measures please
also refer to www.azerion.com/investors.
This report may contain forward-looking non-IFRS financial measures. The Company
is unable to provide a reconciliation of these forward-looking non-IFRS
financial measures to the most comparable IFRS financial measures because
certain information needed to reconcile those non-IFRS financial measures to the
most comparable IFRS financial measures is dependent on future events some of
which are outside the control of Azerion. Moreover, estimating such IFRS
financial measures with the required precision necessary to provide a meaningful
reconciliation is extremely difficult and could not be accomplished without
unreasonable effort. Non-IFRS financial measures in respect of future periods
which cannot be reconciled to the most comparable IFRS financial measure are
calculated in a manner which is consistent with the accounting policies applied
in Azerion Group N.V.'s consolidated financial statements.
This communication does not constitute an offer to sell, or a solicitation of an
offer to buy, any securities or any other financial instruments.
Contact
Investor Relations: ir@azerion.com (mailto:ir@azerion.com)
Media relations: press@azerion.com (mailto:press@azerion.com)
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