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Classification of
HY1 2024: Dynamic sales development thanks to strong organic growth; disproportionately high earnings growth due to the onset of economies of scale and savings effects; GBC estimates and price target also raised following guidance increase Business performance in the first half of 2024 Verve Group SE (Verve) published its Q2 and half-year figures for the current financial year 2024 on The positive Group sales performance was primarily driven by the high-volume Supply Side Platform business unit with a significant increase in segment sales of 28.1% to € 167.64 million (HY1 2023: € 130.84 million). By contrast, revenue in the essentially smaller DSP business area, which was significantly strengthened and expanded by this year's Jun acquisition (takeover in In line with their dynamic sales development, EBITDA increased disproportionately by 29.0% to € 48.27 million (HY1 2023: € 37.41 million) compared to the same period of the previous year due to economies of scale and cost optimisation effects (resulting from the cost-cutting programme introduced in 2023). Adjusted for one-off costs and special effects (e.g. M&A or consulting costs), adjusted EBITDA (Adj. EBITDA) for the first half of 2024 totalled € 51.10 million (HY1 2023: € 40.40 million), an increase of 26.5% compared to the same period of the previous year. At the same time, the adjusted EBITDA margin increased slightly to 28.5% (HY1 2023: 27.9%). Earnings growth also continued at net level (consolidated earnings after minority interests) with a jump in earnings to € 6.86 million (HY1 2023: € 2.57 million). Business performance in Q2 2024 Due to their accelerated (internal) growth momentum over the past quarters, a high growth rate was recorded in the second quarter in particular. In The main growth drivers here proved to be the strong customer demand for privacy-first targeting solutions from new customers and the expansion of (digital) advertising budgets (net dollar expansion rate Q2 2023: 82% vs. Q2 2024: 109%) with existing customers. The growth achieved was also reflected in a 33.0% increase in larger software customers (annual revenue of more than According to the company, the ad-tech company once again succeeded in further increasing its market share in the past quarter, particularly through innovative AI-based customer solutions such as ATOM 3.0, Moments.AI and ML-driven optimisations (for SKAN), thereby expanding its existing market position. In terms of operating earnings development, Verve achieved a significantly disproportionate increase in EBITDA of 40.5% to € 28.08 million (Q2 2023: € 19.99 million) due to the strong organic quarterly growth recorded and a reduced structural fixed cost base. Group EBITDA adjusted for one-off and special effects (e.g. M&A and consulting costs) increased by 36.6% to € 29.10 million (Q2 2023: € 21.30 million). At the same time, the adjusted EBITDA margin increased significantly to 30.1% (Q2 2023: 28.0%). In view of the high profitability and strong operating cash flow, the Forecasts and evaluation With the publication of its quarterly and half-year figures, the It should be noted here that the adjusted company guidance does not include any potential (additional) advertising income from the upcoming US election campaign, which is expected to occur between the end of the third quarter and the fourth quarter of 2024 in particular and thus opens up significant upside potential for revenue. It should be emphasised at this point that the US presidential candidate At the same time, the technology company has also adjusted its previous medium-term financial targets upwards in the form of an average annual (adjusted) EBITDA margin of 30.0% to 35.0% (previously: 25.0% to 30.0%) due to the significant increase in the Group's size and profitability following the Jun acquisition. At EBIT margin and net leverage level, an improvement to 20.0% to 25.0% (previously: 15.0% to 20.0%) and a reduced leverage ratio (net debt/adj. EBITDA) of 1.50x to 2.50x (previously: 2.0x to 3.0x) is expected. In terms of medium-term growth ambitions, Verve continues to expect an average annual growth rate of 25.0% to 30.0% (CAGR). In view of the convincing half-year performance and the raised corporate guidance and increased medium-term financial outlook, we have adjusted our previous sales and earnings forecasts for the current financial year 2024 and also for the following years upwards. For the current financial year, we now expect consolidated sales of € 401.24 million (previously: € 380.12 million) and EBITDA of € 119.29 million (previously: € 108.92 million). Based on conservative assumptions, we expect sales of € 502.11 million (previously: € 475.91 million) and EBITDA of € 156.84 million (previously: € 148.77 million) for the following financial year 2025. Overall, we continue to assume that the In light of our increased sales and earnings forecasts, we have raised our previous price target to € 6.60 (previously: € 6.00) per share. The onset of the roll-over effect (price target based on the following financial year 2025 instead of 2024) also had the effect of increasing the price target. In view of the current share price level, we therefore assign a 'BUY' rating and continue to see significant upside potential in the Verve share. You can download the research here: http://www.more-ir.de/d/30731.pdf Contact for questions: Halderstrasse 27 86150 Augsburg 0821 / 241133 0 research@gbc-ag.de ++++++++++++++++ Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung +++++++++++++++ Date (time) of completion: Date (time) of first distribution:
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1983363 09.09.2024 CET/CEST
