DGAP-Adhoc

Media and Games Invest envisaged to close Smaato acquisition on September 1, 2021. Board decides to focus on scalable Media SaaS business and close the low-margin influencer- and performance business - Seite 2

Within MGI's media segment Verve Group, which represented 51% of MGI's total revenues in Q2 2021, MGI is building a global transparent vertical omnichannel programmatic SaaS platform covering the entire value chain in the media sector from advertiser to publisher, using a buy and build strategy. Due to the programmatic media business being based on a software as a service (SaaS) principle, the business is very well scalable and creates high margins and retention rates, which is also proven by the past track record of MGI.

Following the acquisition of Smaato as well as the strong development of the programmatic business of Verve Group and taking into consideration the continuing weak performance of the influencer- and manually based performance-marketing activities, the board of MGI has taken the decision to fully focus within the media segment on the programmatic business and run off the influencer and performance marketing unit. Growth and EBITDA-margins were single digit to zero in these activities, and could not keep pace with the scalable, fast growing and high margin-business of the programmatic business of Verve Group, which posted a growth-rate of 159% in sales in Q2' 2021 compared to Q2'2020, and an accelerated growth of adj. EBITDA-margin to 16% in Q2'2021 (Q2 2020: 11%) (these numbers do not even include Smaato acquisition yet). Influencer- and manually based performance-marketing are businesses which have proven to be not as scalable as the programmatic SaaS-business of Verve Group, as it requires intensive manual work and therefore also has a lower margin profile compared to the Games and Media SaaS businesses. The discontinuation of the German influencer- and performance-marketing unit affects app. 6.5% of MGI's revenues (based on Q2 2021 financials which do not include Smaato) and will affect around 10% of the worldwide MGI employees which will be made redundant as a consequence of the discontinuation. As the unit includes massive manual workstreams the number of employees is relatively high compared to the amount of revenues which results in the low margin profile of the business.