ad pepper media International N.V.

ANNUAL

REPORT

CONTENT

01 Letter from the Board of Directors

02 Report of the Supervisory Board

03 Remuneration Report

04 Report of the Board of Directors

04.1 Governance

Our Governance Structure

Comply or Explain

Decree Article 10 Takeover Directive (Besluit Artikel 10 Overnamerichtlijn)

04.2 The ad pepper Share

04.3 Business Activity

Disclaimer regarding Forward-looking Statements

The ad pepper Group

Segments of the ad pepper Group

Employees and Values

04.4 Economic Development

Macroeconomic Framework

Presentation of Earnings Position

Presentation of Financial and Net Asset Position

04.5 Risk Report

Foreword

Risk Classiﬁcation

Operational risk

Strategic risk

Financial risk

Compliance risk

Risk Appetite

Evaluation of Risk Management System Effectiveness

Opportunities and Outlook

04.6 Responsibility Statement

05 Consolidated Financial Statements

06 Notes to the Consolidated Financial Statements

07 Statutory Financial

130

08 Other Information

146

09 At a Glance

160

10 Glossary

166

KEY FIGURES AT A GLANCE

2023

2022

Gross sales¹ (kEUR)

85,988

98,229

Revenue

21,749

24,868

Gross proﬁt (kEUR)

20,876

23,704

Gross margin (percent) in relation to gross sales

24.3

24.1

Gross margin (percent) in relation to revenue

96.0

95.3

EBITDA² (kEUR)

1,275

EBIT³ (Operating proﬁt) (kEUR)

-994

187

EBT⁴(Income before taxes) (kEUR)

-631

Net income (kEUR)

-699

-250

Earnings per share (basic, EUR)

-0.05

-0.04

Total assets (kEUR)

42,941

43,954

Shareholders‘ equity (kEUR)

18,881

15,666

Equity ratio⁵(percent)

44.0

35.6

Liquid funds⁶(kEUR)

23,365

23,084

Number of employees (as at 31 December)

217

249

2023

2022

2023

2022

2023

2022

Gross sales

EBITDA

Liquid funds

Gross sales represent the total amount billed and billable to clients by the Group, net

EBIT (earnings before interest and taxes) is an alternative performance measure and

of discounts, VAT and other sales-related taxes. Disclosure of gross sales information

serves to present a Company’s performance while eliminating the effects of differences

is not required under IFRS; however, it is voluntarily disclosed from 1 January 2018

among local taxation systems and different ﬁnancing activities.

onwards in the Consolidated Income Statement since management has concluded that

the information is useful for users of the ﬁnancial statements. Please refer to Note [6].

Earnings before Tax.

EBITDA is an alternative performance measure. It is deﬁned as earnings before

Shareholders’ Equity/Total Assets.

interest, taxes, depreciation and impairment losses/loss reversals on property, plant

and equipment, impairment losses on goodwill, and amortisation and impairment

Liquid funds is an alternative performance measure and includes cash

cash

losses/loss reversals on other intangible assets. This performance measure neutralises

equivalents and listed debt and marketable securities and securities and deposits with

the effects of the ﬁnancial result along with distortions of operational performance

maturity over three months.

that result from divergent depreciation and amortisation methods and the exercise of

measurement discretion. EBITDA is EBIT plus the amortisation of intangible assets and

the depreciation of property, plant and equipment, plus impairment losses and minus

impairment loss reversals, recognised in proﬁt or loss during the reporting period.

2023

2022

Cash and cash equivalents

19,842

17,008

2023

2022

Listed debt and marketable securities

3,523

6,076

Liquid funds

23,365

23,084

EBIT

-994

187

Depreciation & Amortisation

1,018

1,088

EBITDA

1,275

LETTER FROM THE

BOARD OF DIRECTORS

LETTER FROM BOARD OF DIRECTORS

DEAR STAKEHOLDERS,

Strong balance sheet and ﬁnancial resources

Our balance sheet is strong, and our ﬁnancial resources are substantial: our cash balances are at a comfortable level and even exceed last year’s

level. Our equity ratio is at a solid 44 percent, and the Company continues to have no external loans. This sets us apart from many of our peers. We

As we reﬂect on the ﬁnancial year 2023, we ﬁnd ourselves once again navigating through turbulent times. Our Group, along with the broader market,

plan to continue ﬁnancing our growth from our cash reserves and operating cash ﬂow in the next ﬁnancial year. Based on the strong balance sheet

has been subject to the ongoing effects of macroeconomic change, persistent inﬂationary pressures and geopolitical complexities. Rising inﬂation

and the ﬁnancial expectations for 2024, we therefore believe it is justiﬁed to assume that the Company’s continued existence as a going concern is

and high interest rates have continued to dampen consumer conﬁdence and spending across Europe. Higher costs in key areas such as energy and

assured. We carefully review acquisitions and are more inclined to pursue them if they offer potential synergies.

food carried over from the previous year further impacted consumer behaviour. Supply chain disruptions remained a challenge, although less severe

than during the peak of the COVID-19 pandemic, but still contributing to an atmosphere of unpredictability and economic constraint.

At the end of ﬁnancial year 2023, the Group’s headcount stood at 217 employees, which is 32 fewer than at the end of 2022, reﬂecting the adjustments

in our operating expenses which where necessary in light of the results achieved, especially during the ﬁrst six month of the past ﬁnancial year.

In facing these challenges, our strategic focus has been twofold: investing in new and emerging themes and simultaneously undertaking signiﬁcant

cost-saving and restructuring measures. This balanced yet bold approach is integral to our ambition of transforming our Group into a stronghold of

The ﬁnancial year behind us has not been an easy one. We would therefore like to take this opportunity to thank you, our stakeholders and

innovation and sustainability for the future.

shareholders, for your perseverance and patience. A very special thank you goes to our employees and their families who have actively supported us

and are highly motivated in their commitment to the future of the ad pepper Group. Our thanks also go to the Supervisory Board for its constant and

Such strategic decisions include, for example, our 2023 investment in solute Holding GmbH & Co. KG. The ad pepper Group has successfully acquired

constructive support. And despite signiﬁcantly lower proﬁtability levels compared to the previous year, we can be proud of what we have achieved,

a 25.64 percent stake in the Germany-based solute GmbH, a pioneer in the e-commerce sector and operator of the renowned price comparison portal

and this would not have been possible without our many long-standing and new clients, for whom we give our best every day. Thank you for the trust

“billiger.de”. The synergy between our companies extends to complementary business models, technological capabilities, customer relations, and

you have placed in us and for our excellent working relationships.

geographic orientation. This acquisition is a pivotal step in collaborating with the solute GmbH to forge a dynamic, innovative, and ﬁnancially robust

publicly listed leader in performance marketing and digital marketplaces.

Yours faithfully,

Despite ongoing challenges, our company has maintained its resilience and agility. Although not all ﬁnancial targets were met, we have

strengthened our standing as a preeminent force in performance marketing across Europe, continually adapting our strategies to meet the dynamic

The Board of Directors

shifts in market dynamics.

ad pepper media International N.V.

Throughout the year we were able to show ongoing progress of our ﬁnancial results, demonstrating a positive trend of improvement over consecutive

quarters. Overall, we managed to generate revenues of EUR 21,749k (2022: EUR 24,868k) for the full year 2023 with an EBITDA of EUR 24k (2022:

EUR 1,275k), which – despite the improvement in the second half of the past ﬁnancial year – unfortunately fell short of our own expectations.

Dr Jens Körner, CEO

The development of the three operating segments in detail

Nuremberg, 10 April 2024

If we look at the performance of the individual segments, we see a similar pattern: for the reasons stated above, all three segments showed

revenues below previous year level. The Webgains segment generated revenues of EUR 11,968k, which represents a year-on-year decline of 9.5

percent. The ad pepper segment showed revenues of EUR 2,292k and ad agents segment of EUR 7,489k, which represents a decline of 21.6 and 14.1

percent versus 2022 respectively. However, in the last two quarters of the 2023 ﬁnancial year, the Group was able to improve its ﬁnancial results in

all segments compared to H1 2023, which makes us conﬁdent for the ﬁnancial year ahead.

REPORT OF THE

SUPERVISORY BOARD

REPORT OF THE SUPERVISORY BOARD

DEAR SHAREHOLDERS,

as of 1 January of the respective year. The variable compensation component is pegged to previously agreed, measurable and controllable targets. The

target is the consolidated EBITDA budgeted for the following year. Members of the Board of Directors do not receive any guaranteed minimum bonus

payments. Variable bonuses are usually paid during the ﬁrst quarter following publication of the consolidated annual results.

In the 2023 ﬁnancial year, the Supervisory Board performed its duties pursuant to the law and the Articles of Association. It advised the Board of Directors

In 2000, the ad pepper Group introduced a long-term incentive model in the form of stock option plans for employees in key positions, including

on a regular basis, monitored the Board of Directors in its management of the business, and was involved in decisions of key importance for the Company

members of the Board of Directors. Company stock options become exercisable once ad pepper’s share price exceeds a certain threshold, but only vest

and the Group.

one year after issue. Option plan tranches were issued to members of the Board of Directors in 2000, 2001, 2002, 2003, 2008, 2013, 2017, 2020 and

2023. The ad pepper Group has no pension obligations to members of the Board of Directors.

Meetings in 2023

The total sum and structure of the Board of Directors’ compensation are designed to enable the Company to attract and retain suitably qualiﬁed

executives. The compensation structure, pension scheme payments, and other ﬁnancial obligations are designed to promote the Company’s medium

The Supervisory Board held four meetings in 2023. Moreover, we collectively and individually interacted with the CEO and with the senior management

to long-term interests. The details of the compensation structure disclosed in this Annual Report reﬂect the size of the Company and take into

outside the formal Supervisory Board meetings. The Chairman of the Supervisory Board and the CEO met regularly for bilateral discussions virtually

consideration the fact that the Board of Directors currently consists of only one member (see Note 39). Consequently, the Supervisory Board did not

and in person about the progress of the Company on a variety of matters. The Supervisory Board meetings were well attended in 2023 with an

conduct a scenario analysis whereby different performance assumptions and corporate actions were examined. The compensation policy is expected

attendance rate of 100 percent of each Supervisory Board member. On 5 December 2023 the audit committee reported to the Supervisory Board on

to remain largely unchanged in 2024.

the functioning, and the development of, the relationship with the external auditor. The Board of Directors kept the Supervisory Board informed about

the status of discussions around the development and implementation of the strategy for 2023 and beyond. The Supervisory Board discussed the

status of the implementation with the Board of Directors in its meetings and also discussed it with the senior management on a regular basis, e.g.

Composition of the Supervisory Board

after a meeting of the Supervisory Board. The Supervisory Board discussed the manner in which the Board of Directors implemented the long-term

value creation strategy, i.e. improving our ﬁnancial performance, and the principal risks associated with it and hence complied with 1.1.3 of the Dutch

The proﬁle and composition of the Supervisory Board as a whole must be aligned with the proﬁle and strategy of the Company. The Supervisory

Corporate Governance Code (“Code”). The Supervisory Board approved the ﬁnancial planning for 2023 and discussed (potential) acquisitions with the

Board strives for a balanced distribution of speciﬁc expertise in relation to the business activities, strategy and long-term goals of the Company.

Board of Directors, e.g. the acquisition of a minority stake in solute Holding GmbH & Co KG. Topics discussed included annual and interim results,

Each member of the Supervisory Board must be capable of assessing the broad outline of the Supervisory Board’s overall policy objectives. Given the

the prolongation of the service agreement with the CEO, technological developments, the organisation of sales and marketing activities, Corporate

size of the Company, the proﬁle of the Supervisory Board provides, that the Supervisory Board, shall at least have three members. Since the General

Governance, investor relations, compensation and human resources. The Supervisory Board also met and engaged Ernst & Young Accountants LLP,

Meeting of Shareholders held on 19 May 2020, at which Mrs Dagmar Bottenbruch was elected as an additional member of the Supervisory Board,

appointed as independent auditor for the ﬁnancial year 2023 by the Annual General Meeting of Shareholders (the “General Meeting”) held on 13

the Supervisory Board has consisted of four members. One Supervisory Board member holds long-term share positions. The current composition of

June 2023 and discussed the outcome of the 2022 audit procedures on 30 March 2023.

the Supervisory Board is as follows:

In addition, the Supervisory Board discussed the general and ﬁnancial risks of the business and the ﬁndings of an assessment of the internal risk

• Michael Oschmann (male, born 1969; German citizen)

management and control systems. Consistent with the requirements of the Dutch Corporate Governance Code, the work of the Supervisory Board and

Supervisory Board Chairman throughout the entire ﬁnancial year up to and including 31 December 2023

of the Board of Directors, as well as the work of the individual members of both boards, was discussed in the absence of the members of the Board

Graduate in Business Administration, Managing Director of Telefonbuchverlag Hans Müller GmbH & Co. KG, Nuremberg

of Directors.

Supervisory Board member since 10 January 2000; appointed until General Meeting 2025

The evaluation of the Supervisory Board is carried out by following a detailed questionnaire. The review and discussion included reviews of the

• Thomas Bauer (male, born 1963; German citizen)

composition and expertise of the Supervisory Board, its time management, its effectiveness, its dynamics and succession planning, as well as its

Supervisory Board member throughout the entire ﬁnancial year up to and including 31 December 2023

organisation and meeting procedures, provision of information and performance of the Chairman and the individual members. The evaluation has

CEO of Apotheker Walter Bouhon GmbH, Managing Director of Thomas Bauer GmbH, Nuremberg

shown that the Supervisory Board is functioning well and will continue to also regularly discuss its own effectiveness and value for the Company. The

Supervisory Board member since 20 March 2013; appointed until General Meeting 2027

evaluation of the Board of Directors is based on an individual evaluation and discussion of its strength and weaknesses among the members of the

Supervisory Board, including core abilities, risk assessment, business culture and human resources management.

• Dr Stephan Roppel (male, born 1964; German citizen)

Supervisory Board member throughout the entire ﬁnancial year up to and including 31 December 2023

As in previous years, the Supervisory Board decided to be informed in greater detail by the management of each business unit (who attended the

Managing Director of baby-walz GmbH, Munich

meetings of the Supervisory Board in rotating order) – among other things – about technical matters, clients, market trends and, once a year, by a

Supervisory Board member since 20 March 2013; appointed until General Meeting 2024

Dutch law ﬁrm about the requirements of the Dutch Corporate Governance Code.

• Dagmar Bottenbruch (female, born 1960; German and US citizen)

Supervisory Board throughout the entire ﬁnancial year up to and including 31 December 2023

Remuneration of the Board of Directors (see also Remuneration Report)

Managing Director of Silicon Valley Bank AG Frankfurt/Main

Supervisory Board member since 19 May 2020; appointed until General Meeting 2024

In accordance with the Company’s Articles of Association in their current version, the compensation paid to members of the Board of Directors is

determined by the General Meeting following submission of corresponding proposals by the Supervisory Board. The Board of Directors’ compensation

The required Dutch gender diversity quota of 30 percent within the Supervisory Board is currently not met. In case of new appointments, the required

consists of ﬁxed and variable components. Variable compensation consists of annual performance-based payments (bonus), as well as long-term

quota will be taken into consideration.

incentives such as stock options. The ﬁxed compensation component is regularly determined in January/February of each year with retrospective effect

REPORT OF THE SUPERVISORY BOARD

Corporate Governance

The Supervisory Board is a separate corporate body that is independent of the Board of Directors. Its independent character is also reﬂected in

the requirement that members of the Supervisory Board can be neither a member of the Board of Directors nor an employee of the Company. In

accordance with best practice provision 2.1.10 of the Dutch Corporate Governance Code, the Supervisory Board declares that the independence

ad pepper media International N.V. is a Company under Dutch law with subsidiaries in various countries. All business activities are performed in

requirements in best practice provisions 2.1.7 to 2.1.9 have been fulﬁlled, except that one of its members, Michael Oschmann, is not independent

accordance with Dutch company law and German capital market law, in particular the German Securities Trading Act (WpHG). Common shares are

pursuant to best practice provision 2.1.8 vii. because he is Director of EMA Electronic Media Advertising International B.V., which holds more than

admitted to trading on the Prime Standard of Frankfurt Stock Exchange. The Supervisory Board is committed to increasing shareholder value in the

10 percent of the Company’s share capital. On 30 March 2018, the Supervisory Board formed an audit committee currently consisting of Michael

interests of all shareholders and has always set the highest standards for the Company’s Corporate Governance principles. Although, consistent

Oschmann, Dr Stephan Roppel and Thomas Bauer (Chairman). The Supervisory Board is aware of the fact that the ad pepper Group does not have

with its proprietary guidelines, the Company generally applies the requirements laid down in the Dutch Corporate Governance Code, deviations may

an internal audit function and has discussed this with the Board of Directors. The Supervisory Board came to the conclusion that due to the size of

nevertheless occur on account of the legal requirements applicable to the ad pepper Group. In the Governance section of this Annual Report, the ad

the Company and the size of the Supervisory Board, the Company currently does not need an internal audit function, which may change in the future,

pepper Group reports in detail on compliance with the Dutch Corporate Governance Code.

however, depending on further Company growth. The Supervisory Board reviews annually the need to establish an internal audit function.

The Supervisory Board has played a key role in supporting ad pepper Group’s growth strategy during the year, as deﬁned by the Board of Directors.

We have assisted in evaluating acquisitions and reﬁning the long-term value creation strategy. On behalf of the Supervisory Board, I would like to

Unqualiﬁed independent auditor’s report on the Financial Statements

express our appreciation to all ad pepper employees for their efforts and achievements throughout 2023.

The independent auditor Ernst & Young Accountants LLP audited the Consolidated Financial Statements of ad pepper media International N.V. for the

For the Supervisory Board

2023 ﬁnancial year and issued an unqualiﬁed independent auditor’s report.

Michael Oschmann,

The Consolidated Financial Statements, the Report of the Board of Directors and the independent auditor’s report were made available to the

Supervisory Board Chairman

Supervisory Board for review. Meetings were held between the Company’s audit committee and the auditor, who presented their audit plan, key

ﬁndings of their audit and answered related questions. The Supervisory Board acknowledged and approved the ﬁndings of the audit. The Supervisory

Nuremberg, 10 April 2024

Board acknowledged and approved the audit results.

On 10 April 2024, the Supervisory Board discussed and approved the Consolidated Financial Statements prepared by the Board of Directors for the

2023 ﬁnancial year.

REMUNERATION

REPORT

REMUNERATION REPORT

General

Severance payment

The remuneration system is based on three pillars: ﬁrstly, a periodically

The performance-based variable remuneration consists of two parts;

paid remuneration designed to attract, retain and motivate the members

a lump-sum part in the range of EUR 70k – EUR 110k based on the

The Supervisory Board carefully studied the Dutch Act aimed to

of the Board of Directors as top-tier managers of an international

Company reaching the pre-set EBITDA target and a variable part,

If the current CEO‘s service agreement is terminated by the Company

implement the Shareholder Rights Directive, as adopted by the

company in a fast-moving commercial environment. Secondly, a clear

which is a percentage of EBITDA (starting from the ﬁrst EUR). The pre-

without cause, the CEO is entitled to receive 75 percent of the base

Dutch Senate in November 2019, to identify any potential gap in

performance-based remuneration and a highly detailed assessment

set EBITDA target for 2023 was missed and, as a result, based on the

salary (i.e. without any performance-related components to which

our remuneration policy. The current remuneration policy has been

based on ambitious internal ﬁnancial targets ensure the focus is on

performance in 2023, no variable part was awarded.

he would be entitled for the remainder of the term of his service

accepted during the 2020 General Meeting.

the Company’s goal of proﬁtable growth on a long-term basis. Thirdly,

agreement). No severance payment shall be made if the service

a stock option-based remuneration system that promotes a strong,

The remuneration of the Board of Directors complied with the

agreement is terminated early at the initiative of the CEO, or in the event

The Supervisory Board is also mindful of the recommended changes

long-term equity culture and, in this way, helps align the interests of

remuneration policy.

of seriously culpable or negligent behaviour on the part of the CEO.

to remuneration disclosure that form part of the Guidelines to the

shareholders, management and other stakeholders.

Shareholder Rights Directive. These changes are intended to drive

In line with the Dutch Corporate Governance Code, the members of the

Medium- and long-term performance-related

greater transparency and consistency of reporting regarding executive

The present remuneration policy also takes account of the identity,

Board of Directors are appointed for a period of four years. The CEO’s

variable remuneration (stock options)

remuneration and may result in further updates to our remuneration

mission and values of the Company and public support, by designing

current term ends on 31 December 2026.

disclosure in the Remuneration Report once the Guidelines are

the policy and its implementation in such a way that the members of

ﬁnalised. During the 2023 General Meeting, the Remuneration Report

the Board of Directors receive a remuneration that is in accordance with

The Company aims for a business policy which takes into account the

Change of control

received a positive advisory vote of 100 percent. No questions were

the identity of the Company, with the main focus being the creation of

interests of the shareholders and its other stakeholders. The Company

raised concerning its contents and none of our shareholders expressed

long-term value for all stakeholders involved in the Company. In doing

wishes to promote commitment of the members of the Board of

any concern about the clarity or transparency of the Remuneration

so, an explicit focus is placed on the social context and the society

Directors to build the shareholders’ value on a long-term basis. The

In the event of a change of control, the CEO has the option of

Report. Based on the positive advisory vote and the absence of any

of which the Company is a part, taking into account the required

Company may therefore introduce one or more stock option plans

extraordinary termination of his employment contract for a period of

shareholder feedback, we have not proposed any changes to the

competitiveness of the Company.

for the members of the Board of Directors, which may or may not be

12 months after the change of control takes effect. In the event of

structure and contents of the Remuneration Report this year.

linked to the performance of the Company. The exercise price of the

extraordinary termination of his contract, the CEO is entitled to receive

stock options, the number of stock options and the other terms and

payment of compensation amounting to his respective annual target

Periodically paid ﬁxed remuneration (base salary)

The 2023 remuneration report will be submitted to the 2024 General

conditions shall be laid down in the stock option plans. Three new

income through to the end of the contractually agreed term, amounting

Meeting for their advisory vote.

stock option plan were granted in 2023 for Supervisory Board and key

to a minimum of 150 percent of his current annual target income. A

The members of the Board of Directors receive a ﬁxed base salary,

staff members as well as the CEO. The number of options granted to

change of control in this respect arises when a shareholder gains

In the absence of a remuneration committee, the Supervisory Board

which is payable in twelve equal monthly instalments. The ﬁxed

the CEO under the 2023 plan amounts to 187,500.

control over the Company as deﬁned by Paragraph 29 of the German

in its entirety evaluates the remuneration policy on a routine basis to

remuneration is determined by the Supervisory Board, usually within

Securities Acquisition and Takeover Act (WpÜG), i.e. acquisition of at

review its efﬁciency and effectiveness in supporting ad pepper’s long-

the ﬁrst three months of each calendar year and with retrospective

least 30 percent of the voting rights in the Company.

Other beneﬁts

term strategy compared to relevant market practices and adjusts if and

effect as of 1 January of that year. The ﬁxed remuneration is typically

where appropriate. On an annual basis, the Supervisory Board sets the

increased in line with the inﬂation rate, but the Supervisory Board may

Loans

performance targets for the members of the Board of Directors, reviews

decide otherwise.

The Company shall indemnify each (former) member of the Board of

their performance against these predetermined targets and determines

Directors who was or is involved, or threatens to become involved, in

the remuneration and beneﬁts in line with contractual terms. The

his/her capacity as (former) member of the Board of Directors, as a

Members of the Board of Directors and Supervisory Board have not

Performance-based variable remuneration (bonus)

structure of the remuneration package for the Board members is

party to any past, present or anticipated future actions or proceedings

been granted any loans.

designed to balance incentives for short-term operating performance

of any nature whatsoever, against all conceivable ﬁnancial loss or harm

with incentives for long-term sustainable value creation while taking

The bonus payment for the members of the Board of Directors is

that he/she has in fact and in all reasonableness suffered in connection

Clawback Provisions

into account the interests of shareholders and other stakeholders.

determined by the Supervisory Board. Consistent with the Board of

with the actions or proceedings. In addition, the Company has taken

The remuneration policy is clear and understandable, focuses on long-

Directors remuneration policy, the Supervisory Board can choose from a

out insurance cover for them, such as personal accident insurance and

term value creation for the Group, and takes into account the internal

number of ﬁnancial as well as non-ﬁnancial targets to use as measure

directors and ofﬁcers (D&O) insurance.

Performance-based variable remuneration is subject to claw back

pay ratios within the Company. The full policy can be found on the

for performance-based variable remuneration. For 2023, in-line with

provisions pursuant to Dutch law.

Company’s website.

the service agreement entered into with the Board of Directors, the

Other beneﬁts may include but are not limited to life insurance,

Supervisory Board decided to use earnings before interest, taxation,

disability insurance, long-term health care insurance, company vehicle

depreciation and amortisation (EBITDA) as sole measure. By using

(with the tax on the pecuniary beneﬁt from personal use being payable

EBITDA, the Supervisory Board has now opted for a key performance

by the member concerned), cell phone usage and contributions to

indicator (KPI) that more closely reﬂects the Company’s ability to

private pensions. The ad pepper Group has no pension obligations

generate operating cash ﬂows.

towards members of the Board of Directors.

REMUNERATION REPORT

Total Director’s remuneration,

Five-Year Comparison

Remuneration in Share Options to Board of Directors and members of Supervisory Board

broken down into its various components

The main conditions of stock option plans

Information regarding the reported ﬁnancial year

Annual change

J. Körner,

Plan

Grant date

Exercise

Number

2019

2020

2021

2022 2023 2023

CEO (2023)

CEO (2022)

options

price (EUR)

of options

of options of options

vs vs

granted

outstanding

awarded

forfeited

exercised outstanding

2018

2019

2020

2021 2022 kEUR

kEUR

Fixed remuneration

01/01/2023

2023

31/12/2023

Director’s

Board of

Base salary

299

291

remuneration

Directors

Fees

J. Körner,

J. Körner

BoD 2023

01/2023

187,500

1.86

187,500

CEO

+226% +29%

-18%

-48%

32% 387

Other benefits¹

Remuneration

Variable remuneration

Supervisory

of the

On-year variable

Board

Supervisory

Multi-year variable²

Board

0% -8.33% +9.10%

+0% +0%

S. Roppel

SB 2017

04/2017

10,000

1.9751

5,000

Extraordinary items

Company's

SB 2023

01/2023

18,000

1.86

18,000

performance

Pension expenses

T. Bauer

SB 2023

01/2023

18,000

1.86

18,000

EBITDA

+158% +87%

-33%

-71% -98%

Total remuneration

387

333

D. Bottenbruch

SB 2023

01/2023

18,000

1.86

18,000

Proportion of ﬁxed and

variable remuneration³

82%/18%

92%/8%

The options granted under the SB 2017 plan expire 7 years after granting. The options grant the right to purchase shares at the exercise price (EUR

Year

1.9751). These options may be exercised over a period of four years at 25 percent each year, but at the earliest one year after being granted. The

Contributions to private pension plan and health insurance.

options forfeit, if the holder terminates his employment contract with the Company for whatever reason, or if the employment contract is expiring

Board of Directors holds SOP which are measured at the end of each reporting period at

2018

2019

2020

2021 2022 2023

and will not be prolonged by the parties. The options also forfeit, if the Company terminates the employment contract for an important reason or if a

the fair value, see also Note [38].

member of the Supervisory Board resigns. The options granted under the SB 2023 and BoD 2023 plan expire 7 years after granting. The options grant

Lower share of 2023 variable remuneration is driven by the signiﬁcantly lower EBITDA

Average

achieved in 2023, see also table “Five-Year comparison”.

the right to purchase shares at the exercise price (EUR 1.86). These options may be exercised over a period of four years at 25 percent each year, but

employee

at the earliest one year after being granted. The options forfeit, if the Company terminates the employment contract for an important reason.

The amounts shown in the tables are those recognised in proﬁt or loss

remuneration

during the reporting period. Income resulting from the share-based

Ratio CEO

In the ﬁnancial year 2023 0 shares (2022: 0 shares) have been issued in relation to exercise of the aforementioned rights.

payments is due to the decreased fair value of the cash-settled stock

and average

option plan and the corresponding adjustment of the liability through

employee*

3.3

8.6

11.7

11.8

6.2

5.4

proﬁt or loss.

Supervisory Board Compensation

Employees of

2023

2022

the company**

EUR

Michael Oschmann

6,000

*Pay ratios peaked during the pandemic (relatively high EBITDAs/pay-outs to CEO) and are

Thomas Bauer

6,000

back to pre-pandemic levels since 2022.

**ad pepper media International N.V.

Dr Stephan Roppel

6,000

Dagmar Bottenbruch

6,000

The average employee remuneration is obtained by dividing the total

personnel expenses as stated in the notes of the respective Company’s

Annual Report (after subtracting the CEO’s remuneration) by the

Total remuneration for members of the Supervisory Board amounted to EUR 24k in the past ﬁnancial year (2022: EUR 24k). The annual amount paid to

reported average number of Full Time Equivalents (“FTE”) (minus one).

Supervisory Board members is unchanged for at least ﬁve years.

REPORT OF THE

BOARD OF DIRECTORS

04.1

GOVERNANCE

04.1

GOVERNANCE

OUR GOVERNANCE STRUCTURE

Members of the Board of Directors are appointed by the General

The Supervisory Board passes its resolutions, inside as well as outside

Furthermore, General Meetings shall be held in the event referred to in

Meeting, subject to the right of the Supervisory Board to make a binding

meetings, with an absolute majority of the votes of all the members

Article 2:108a of the Dutch Civil Code and as often as a member of the

nomination to appoint a Board of Directors member in accordance with

of the Supervisory Board in ofﬁce. In the event of an equal division of

Board of Directors or a Supervisory Board member considers it necessary.

the relevant best practice provisions of the Dutch Civil Code and the

votes, the Chairman of the Supervisory Board has the casting vote.

Corporate information

articles of association (the “Articles of Association”). Since 28 February

The resolutions proposed in the agenda were adopted at the General

2017, the Company’s Board of Directors consists of one “Director”

The Chairman of the Supervisory Board determines the agenda and

Meeting of ad pepper media International N.V. held in Amsterdam on

ad pepper media International N.V. is a “naamloze vennootschap”

(Chairman of the Board of Directors and CEO). The CEO has powers to

chairs the meetings of the Supervisory Board, monitors the proper

13 June 2023. In all, 10,042,575 voting rights, or 46.71 percent of the

(N.V.), a Dutch limited liability Company, and is the parent Company

represent the Company. However, in addition to the cases that legally

functioning of the Supervisory Board, arranges for the adequate

issued share capital were represented at the General Meeting.

of the ad pepper Group (the “Group”). The Company’s registered ofﬁce

require the approval of the Supervisory Board, certain resolutions of

provision of information to the members of the Supervisory Board and

address is Frankenstrasse 150C, 90461 Nuremberg, Germany. Its

the Board of Directors as laid out in the rules governing the internal

acts on behalf of the Supervisory Board as the main contact for the

Alongside the presentation of the annual ﬁnancial statements for the

registration number with the Dutch trade register is 27182121.

organisation of the Board of Directors also require approval of the

Board of Directors. Important topics and upcoming decisions are also

2022 ﬁnancial year, key agenda items also included the discharge of the

Supervisory Board. Resolutions of the Board of Directors that require

dealt with in regular discussions and meetings between the Chairman

members of management and the Supervisory Board, the re-election

The Company’s Corporate Governance structure is based on the

the approval of the Supervisory Board are only adopted after the

of the Supervisory Board and the CEO. The Chairman of the Supervisory

of Thomas Bauer as member of the Supervisory Board, the adoption

requirements of Dutch corporate law, the Dutch Act on Financial

Supervisory Board has given its approval to such proposed resolution.

Board informs the other members of the Supervisory Board regularly

of the amendments to the Company’s Articles of Association Board of

Supervision and the Dutch Corporate Governance Code (the “Code”).

on the outcome of his discussions and meetings. He also initiates the

Directors, the approval of the SB 2023 and BoD 2023 stock option plan

Dutch law provides that a member of the Board of Directors of a Dutch

evaluation of the functioning of the Supervisory Board and the Board

as well as the authorisation to buy back treasury stock.

The Company has a two-tier board structure consisting of a Board of

public limited liability Company may not participate in the adoption

of Directors. All members have had sufﬁcient time available for their

Directors and a Supervisory Board. It is in the interest of the Group and

of resolutions (including deliberations in respect hereof) if he or she

duties relating to their membership of the Supervisory Board. Their

all of its stakeholders that there is a clear division of responsibilities

Proposed appropriation of the

has a direct or indirect personal interest conﬂicting with the interests

availability for ad hoc calls, prompt response on emails and the fact

between the Board of Directors, the Supervisory Board and the General

result for the ﬁnancial year 2023

of that Company or its enterprise. Pursuant to the Board of Directors

that the members prepared the meetings well, regardless of their

Meeting in a well-functioning system of checks and balances.

by-laws, each member of the Board of Directors must immediately

attendance at the meetings, and actively participated in the meeting

report any (potential) personal conﬂict of interest to the Supervisory

discussions, demonstrate that they were all able to devote adequate

The Board of Directors, with the approval of the Supervisory Board,

In this section, we address our overall Corporate Governance, and

Board and to the other members of the Board of Directors and must

attention to the Company.

proposes to allocate the result for the ﬁnancial year 2023 amounting to

provide information on our compliance with the best practice provisions

provide all information relevant to the conﬂict. The Board of Directors

EUR -944k to the accumulated deﬁcit without payment of dividend. The

of the Code. Occasional deviations from the Code are explained and

by-laws provide detailed rules under which circumstances a conﬂict of

On 10 December 2019, the Supervisory Board formed an audit committee

ﬁnancial statements reﬂect this proposal.

information on the reasons for any such deviations are provided at

interest of a member of the Board of Directors exists and determines

currently consisting of Michael Oschmann, Dr Stephan Roppel and

the end of this section. In the event of any substantial changes to the

that the Board of Directors member may not be present at the meeting

Thomas Bauer (Chairman). No changes occurred in the year under review.

Corporate Governance structure of the Company and its compliance with

Long-term value creation and Sustainability

discussing such matters. During 2023, no conﬂicts of interest were

the Code, the shareholders shall be informed at the General Meeting.

reported. There were furthermore no transactions as referred to in the

General Meeting

best practice provisions 2.7.4 and 2.7.5.

By bringing together three individual, strong segments in the area of

performance marketing – each focused on advising, supporting and

Board of Directors

At least one General Meeting shall be held each year, at the latest

enabling its clients in their digital marketing strategy – and further

Supervisory Board

six months after the close of the ﬁnancial year. The agenda and the

developing these assets into relevant players, the Company focuses

The Board of Directors is entrusted with the management of the

explanatory notes to the agenda are published in advance and posted

on above-market-average organic growth of these existing business

Company, which means that, among other responsibilities, it deﬁnes

The Supervisory Board should supervise the policies carried out by

on the Company’s corporate website. The explanatory notes to the

lines and expanding the footprint of new services and products offered

the strategic direction, establishes the policies, and manages the

the Board of Directors and the general affairs of the Company and its

agenda contain all relevant information with respect to the proposed

by those segments. Our long-term strategy is to maximise value for

Company’s day-to-day operations under the supervision of the

afﬁliated enterprise. In doing so, the Supervisory Board should also focus

resolutions. All resolutions are made on the basis of the “one share,

our shareholders and other stakeholders and create a strong cash

Supervisory Board. The members of the Board of Directors collectively

on the effectiveness of the Company’s internal risk management and

one vote” principle. The General Meeting reviews the Annual Report

ﬂow generation by driving relative market share leadership with

manage the Company and are accountable to the Supervisory Board

control systems and the integrity and quality of the ﬁnancial reporting.

and decides on adoption of the ﬁnancial statements and the dividend

proﬁtable growth and exceeding customer expectations. We are

and to the General Meeting. In performing its duties, the Board of

It offers advice to the Board of Directors. In discharging its duties, the

proposal, as well as on the discharge of the members of the Supervisory

committed to innovating for a better tomorrow for our customers,

Directors is guided by the interests of the Company and its enterprise.

Supervisory Board has regard for the interests of the Company and the

Board and the Board of Directors. The Board of Directors may add other

employees, communities, and society as a whole. As mentioned above,

The Board of Directors follows its own rules determined in the proﬁle

business enterprise connected with it. The Supervisory Board meets at

items to the agenda of the General Meeting.

macroeconomic headwinds resulted in declining revenues and lower

of the Board of Directors, which deﬁnes responsibilities, competencies

least four times a year and whenever a majority of its board members

proﬁtability in the past ﬁnancial year. However, we successfully navigated

and decision-making processes.

or its Chairman considers this to be necessary. Resolutions of the

The Board of Directors shall be obliged to convene a General Meeting

our Company through another unprecedented ﬁnancial year, and although

Supervisory Board may, instead of at a meeting, be passed in writing

if one or more of the persons with meeting rights who alone or jointly

we did not meet our ﬁnancial targets, we successfully sharpened our

The Board of Directors provides the Supervisory Board with information

– including by telegram, facsimile or telex transmission, or in the form

represent(s) at least 10 percent of the issued share capital request(s)

proﬁle as one of the leading performance marketing companies in Europe

in a timely manner and, if necessary, consults with the Supervisory

of a message transmitted by any accepted means of communication

this in writing, stating the issues to be discussed. An extraordinary

and therefore believe that 2023 has also contributed to the Company´s

Board on important matters and submits certain important decisions to

and received or capable of being produced in writing – provided that

General Meeting may be convened by the Supervisory Board or the

long-term value target.

the Supervisory Board for approval.

all Supervisory Board members are familiar with the resolution to be

Board of Directors if deemed necessary.

passed and none of them objects to this decision-making process.

04.1

GOVERNANCE

Insider trading policy

Internal audit function

During 2023, we continued to increase our focus on environmental,

gender diversity into account for future appointments, as required by

social and governance topics. We also set up a dedicated Environmental,

law, without compromising our commitment to hiring the best qualiﬁed

Social and Governance (ESG) reporting team as part of our Accounting

individuals for positions. In any future vacancies that arise, however,

The ad pepper Group has a strict Code of Conduct on insider trading.

The Supervisory Board annually reviews the need to establish an

and Reporting department. This team will improve ESG reporting

gender diversity will subsist to be one of the criteria in the selection

The insider trading policy with regard to inside information and

internal audit function and following these discussions makes a

going forward and implement the EU taxonomy and the EU Corporate

process, and the Company shall continue to strive towards achieving a

securities trading was adopted by the Board of Directors. This policy

recommendation to the Board of Directors. Considering the current

Sustainability Reporting Directive requirements (which will be reported

diverse composition of its boards within the coming years.

is publicly available on the Company’s website. In accordance with

size of the operations of the Company and taking into account its risk

from next year onwards).

applicable law and regulations (including the EU Market Abuse

proﬁle, the Supervisory Board advised to the Board of Directors that it

In the Netherlands, an important milestone was reached on 1 January

Regulation), the Company maintains insider lists and exercises controls

does not deem it necessary to create an internal audit function.

EU Taxonomy is a cornerstone of the EU’s sustainable ﬁnance framework

2022. With effect from this date, new legislation became effective

around the dissemination and disclosure of potentially price-sensitive

and an important market transparency tool. It helps direct investments

to achieve a more balanced ratio of seats between men and women

information. Transactions in the Company’s shares carried out by the

Auditor

to the economic activities most needed for the transition to a low-

on the supervisory boards of publicly traded companies and large

Board of Directors and the Supervisory Board members (including their

carbon economy, in line with the European Green Deal objectives. The

companies. While the obligations arising from the legislation applies

closely associated persons) are as and when required notiﬁed to the

Taxonomy is a classiﬁcation system that deﬁnes criteria for economic

to large companies only (and the Company did not fall under the

Dutch Authority for the Financial Markets (AFM), in accordance with

The independent auditor is appointed by the General Meeting. The

activities that are aligned with a net zero trajectory by 2050 and the

respective criteria in the past ﬁnancial year) and the Supervisory Board

the applicable provisions of the EU Market Abuse Regulation.

Supervisory Board can nominate a candidate for this appointment, for

broader environmental goals other than climate. It is a key part of the EU

had only one female member in the ﬁnancial year under review, we

which purpose the Board of Directors advises the Supervisory Board.

Corporate Sustainable Reporting Directive (CSRD).

take good note of the recent changes to the Code and aim for a higher

The compensation of the independent auditor and any commissioning

Substantial shareholdings

share of female members in the Company’s key roles. For instance, the

of the external auditor must be approved by the Supervisory Board

Under the Taxonomy, economic activities that qualify as environmentally

Company’s so-called Executive team, which consists of employees in

following consultation with the Board of Directors. The independent

sustainable are those that: (i) contribute substantially to any one of six

key positions across all segments, already today consists of 40 percent

Shareholders owning 3 percent or more of the issued share capital of

auditor is required to attend the General Meeting and the Supervisory

environmental objectives using science-based criteria; (ii) cause no

female members and we aim to hold this threshold and strive to

a listed company (a substantial shareholding or short position) must

Board meeting at which the independent auditor’s report on its audit of

signiﬁcant harm to any of the other environmental objectives; (iii) ensure

increase it (e.g. to 50 percent) in the long-term.

report this to the AFM as soon as this threshold is reached or exceeded.

the ﬁnancial statements is discussed.

compliance with minimum social safeguards and (iv) meet the technical

Subsequently, notiﬁcations to the AFM must be made as soon as a

eligibility screening criteria that have been set by the Commission.

substantial shareholding or short position reaches, exceeds or falls

Conﬂicts of interest

Statement by the Board of Directors

Companies must disclose speciﬁc KPIs – revenue, capital expenditure

below set thresholds. The thresholds are 3 percent, 5 percent, 10

(Dutch Corporate Governance Code)

(capex) and operating expenditure (opex) – which indicate the portion of

percent, 15 percent, 20 percent, 25 percent, 30 percent, 40 percent, 50

their economic activities which are environmentally sustainable.

Under the criteria set out in the Dutch Corporate Governance Code,

percent, 60 percent, 75 percent and 95 percent of the company’s issued

three of the four current members of the Company’s Supervisory Board

share capital. Shareholder’s disclosures can be inspected in the register

For the purpose of complying with best practice provision 1.4.3 of the

We believe our commitment to conducting business in an environmentally

count as independent. Michael Oschmann, Supervisory Board Chairman

kept by the AFM, and for the ad pepper Group the shareholdings as at

Code the Board of Directors believes that, to the best of its knowledge:

sustainable way, as described in this section, enables the Group to make

of the Group, is not counted as independent in this respect as he is

31 December 2023 are also disclosed on page 34 of this Annual Report.

a broader contribution to the EU’s environmentally sustainable objectives.

Managing Director of EMA Electronic Media Advertising International

• the Company’s internal risk management and control organisation

It should be noted that the Taxonomy is subject to periodic revisions,

B.V., which holds more than 10 percent of the Company’s share capital.

provides reasonable assurance that its ﬁnancial reporting does not

Publication requirements under German law

which in the future may deﬁne a separate category and speciﬁc technical

contain any errors of material importance;

qualiﬁcation criteria for performance-marketing activities.

On 2 October 2023, ad pepper and seven shareholders of solute Holding

• the internal risk management and control processes in relation to

GmbH & Co. KG (“solute”), Hannover, signed a purchase agreement for

In accordance with Section 26 (1) of the German Securities Trading Act

ﬁnancial reporting functioned properly in 2023;

25.64 percent of the shares in solute. As consideration, 1,693,244 new

(“Wertpapierhandelsgesetz”), the Company, in its capacity as a so-

• the report provides sufﬁcient insights into failings, if any (no failings

Diversity

shares in ad pepper have been issued without subscription rights of

called domestic issuer (“Inlandsemittent”) under the German Securities

in 2023), in the effectiveness of the internal risk management and

the current shareholders against contribution in kind. The purchase is

Trading Act, must publish any shareholding notiﬁcations under Dutch

control systems;

We aim for diversity at every level. We do not see diversity as

regarded as a so-called related party transaction according to Dutch

law immediately, but no later than three trading days after receiving

• the aforementioned systems provide reasonable assurance that the

merely a matter of gender or ethnicity but also of personality, skills

corporate law. Michael Oschmann, the Chairman of the Supervisory

them, via qualiﬁed media outlets. The Company must also transmit the

ﬁnancial reporting does not contain any material inaccuracies;

and knowledge. We need men and women, people from different

Board of ad pepper, held (i) an indirect interest of 46.71 percent in the

notice to the German Federal Financial Supervisory Authority (BaFin)

• based on the strong balance sheet it is justiﬁed that the ﬁnancial

backgrounds and cultures. The ad pepper Group values this diversity

share capital of ad pepper before the transaction and (ii) participating

and to the German Company Register (“Unternehmensregister”).

reporting is prepared on a going concern basis; and

and believes it contributes positively to the way we evaluate situations

interests in excess of 20 percent in each of the selling entities as

• the report states those material risks and uncertainties that are

and make decisions. The more we utilise the differences between

regards to the 25.64 percent of the shares in solute. Therefore, Michael

relevant to the expectation of the Company’s continuity for the

us and the more we can cooperate and learn from each other, the

Oschmann did not and will not participate in the decision-making in

period of twelve months after the preparation of the report.

stronger we will be as a company that serves a highly diverse society

the Supervisory Board of ad pepper concerning the acquisition by ad

and stakeholders. The Supervisory Board and the Board of Directors

pepper of the interest in solute. This has been discussed and disclosed

The Board of Directors is responsible for the establishment and

are fully aware that both boards currently lack gender diversity; we

during Supervisory Board meetings accordingly.

adequate functioning of a system of governance, risk management and

do not have an even distribution of seats between men and women

internal controls in the Company. It reports on and is accountable for

and we do not have a diversity policy. We will take greater board-level

No other conﬂicts of interest were reported in the 2023 ﬁnancial year.

internal risk management and control systems to the Supervisory Board

and its Audit Committee.

04.1

GOVERNANCE

The Company has implemented a risk management and internal

Periodically paid ﬁxed remuneration (base salary)

Other beneﬁts

The following provides an overview of exceptions that we have

controls designed to provide reasonable assurance that strategic

identiﬁed:

objectives are met by creating focus, integrating management control

The base salary of the members of the Board of Directors is determined

The Company shall indemnify each (former) member of the Board of

over the Company’s operations, ensuring compliance with applicable

on an annual basis by the Supervisory Board. The ﬁxed remuneration

Directors who was or is involved, or threatens to become involved, in

Principle 1.3 Internal audit function

laws and regulations and by safeguarding its assets and the reliability

is determined by the Supervisory Board, usually within the ﬁrst three

his/her capacity as (former) member of the Board of Directors, as a

of its ﬁnancial reporting and its disclosures. The Company’s risk

months of each calendar year and with retrospective effect as of 1

party to any past, present or anticipated future actions or proceedings

Given the size of the Company and its risk proﬁle, the Company does

management approach is embedded in its periodic business planning

January of that year. The ﬁxed remuneration is typically increased in line

of any nature whatsoever, against all conceivable ﬁnancial loss or harm

not have an internal audit function of its own. Nevertheless, the Board

and review cycle and forms an integral part of business management.

with the inﬂation rate, but the Supervisory Board may decide otherwise.

that he/she has in fact and in all reasonableness suffered in connection

of Directors and the Supervisory Board may implement internal audits

with the actions or proceedings.

on a case-by-case decision using internal and external resources. This

With respect to ﬁnancial reporting a structured self-assessment and

has not occurred during 2023. The Company thus does not fully comply

monitoring process is used Company-wide to assess, document, review

Short-term performance-related variable remuneration (bonus)

Other beneﬁts may include but are not limited to life insurance,

with best practice provisions 1.3.1, 1.3.2, 1.3.3, 1.3.4, 1.3.5, 1.3.6 and

and monitor compliance with internal control over ﬁnancial reporting.

disability insurance, long-term health care insurance, Company vehicle

2.6.4 of the Code.

Due to the business environment of the Company, it is difﬁcult to link the

and cell phone usage.

It should be noted that the above does not imply that these

variable remuneration to previously determined and inﬂuenceable long-

systems and procedures provide certainty as to the realisation of

term targets. The short-term variable remuneration for members of the

In general, the Company, its subsidiaries and the companies whose

Principle 2.1 Composition and size

operational and ﬁnancial business objectives, nor can they prevent all

Board of Directors should in principle consist of an annual performance-

ﬁnancial details are consolidated by the Company shall not grant

misstatements, inaccuracies, errors, fraud and non-compliance with

related bonus. The bonus is determined by the Supervisory Board on the

loans, advances or guarantees to members of the Board of Directors,

Provision 2.1.1. states that the Supervisory Board should strive for a diverse

rules and regulations.

basis of measurable and controllable targets such as the Company’s

but the Supervisory Board may resolve that the Company shall do so

composition with respect to nationality, age, gender, and educational

income before taxation (i.e. EBITDA to be more precise) or other ﬁnancial

if the Supervisory Board deems that the granting of loans, advances or

and work background and should deﬁne speciﬁc targets to achieve this.

or operational targets, as determined by the Supervisory Board.

guarantees is in the interest of the Company.

The Supervisory Board believes that both the Board of Directors and the

Remuneration Policy

Supervisory Board are and will be composed in such a manner that the

(see also chapter Remuneration Report)

During 2023, the Company was in compliance with the remuneration

combination of experience, expertise and independence of its members

Medium- and long-term performance-related

policy.

satisﬁes the requirements set out in its proﬁle. We believe that the

General

variable remuneration (stock options)

composition of our boards allows them to properly and effectively carry

out their duties. Our focus for new board members is on experience and

The remuneration and the contracts between the Company and the

The Company aims for a business policy which takes into account the

education instead of explicit gender, age or nationality diversity targets.

members of its Board of Directors are determined by the Supervisory

interests of the shareholders and its other stakeholders. The Company

We therefore do not comply with best practice provision 2.1.1 of the Code.

COMPLY OR EXPLAIN

Board within the scope of the remuneration policy that has been

wishes to promote commitment of the members of the Board of

Finally, Michael Oschmann, Chairman of the Supervisory Board of the

adopted by the General Meeting.

Directors to build the shareholders’ value on a long-term basis. The

Group, cannot be regarded as independent as he is Managing Director of

Company may therefore introduce one or more stock option plans

EMA Electronic Media Advertising International B.V. This company holds

The objective of the remuneration policy is to attract, retain and

for the members of the Board of Directors, which may or may not be

more than 10 percent of the Company’s share capital.

Introduction

motivate the members of the Board of Directors as top-tier managers

linked to the performance of the Company. The exercise price of the

of an international Company in a fast-moving commercial environment,

stock options, the number of stock options and the other terms and

According to provision 2.1.5 and 2.1.6 the Company should have a

The Corporate Governance structure and compliance with the Code is

while protecting and promoting the objectives of the Company and

conditions shall be laid down in the stock option plans.

Diversity and Inclusion (D&I) policy for the enterprise and should explain

the joint responsibility of the Board of Directors and the Supervisory

shareholders’ value.

the D&I policy and the way in which it is implemented in Practice. ad

Board. They are accountable for this responsibility to the General

pepper had 217 employees at the end of the business year under review

Meeting. We continue to seek ways to improve our Corporate

The remuneration for the members of the Board of Directors may

Remuneration payable in instalments

and may introduce such policies at a later stage, i.e. when the Group has

Governance by measuring it against international best practice. The

consist of the following items:

grown big enough.

Code was last amended on 20 December 2022. The new Code took

The members of the Board of Directors have entered into part-time

effect on 1 January 2023 and can be found at www.mccg.nl.

• Periodically paid remuneration (ﬁxed base salary)

employment contracts with the Company. Upon dismissal of a member

• Short-term performance-related variable remuneration (bonus)

of the Board of Directors, the Company is in principle obliged to pay

Principle 2.2 Appointment, succession and evaluation

Non-application of speciﬁc best practice provisions is not per se

• Medium- and long-term performance-related

his/her ﬁxed and variable salary and other beneﬁts for the remaining

considered objectionable by the Code and may well be justiﬁed

variable remuneration (stock options)

term of the contract, but the Supervisory Board is authorised to deviate

Members of the Supervisory Board are appointed for a term of four

because of particular circumstances relevant to a company. In

• Other beneﬁts

from this principle.

years and can be reappointed. The Company has adopted a policy of

accordance with Dutch law, we disclose in our Report of the Board

remaining open to the possibility that a Supervisory Board member will

of Directors the application of the Code’s best practice provisions. To

be reappointed after the maximum term contained in provision 2.2.2

the extent that we do not apply certain best practice provisions, we

due to his or her great knowledge of the Company and high level of

state the reasons. We take a positive view of the Code and apply

involvement. In addition, the Supervisory Board will retire by rotation

most of the best practice provisions.

and may be reappointed in order to ensure that the lowest possible

04.1

GOVERNANCE

number of Supervisory Board members retire from the Board at the

Principle 3.1 Remuneration policy – Management Board

Principle 3.4 Accountability for implementation

to EUR 1,159,662 and is divided into 23,193,244 common bearer shares

same time. The latter is not posted on the Company’s website. The

of remuneration policy

with a nominal value of EUR 0.05 each.

Company therefore does not comply with best practice provisions 2.2.2

In deviation of best practice provision 3.1.2 of the Code, options granted

and 2.2.4. The Company does not have a selection and appointment

to members of the Board of Directors under stock option plan do not

The existing contract with the Board of Directors does not contain any

Obligation of shareholders to

committee and does not comply with provision 2.2.5. As the Supervisory

contain performance conditions and can be partly exercised after a

extraordinary elements; the remuneration essentially consists of ﬁxed

disclose share ownership

Board currently has just four members, the number of committees must

period of one year. Although deviating from the Code, the Company

and variable remuneration. In the event of more complex contracts

be reduced to the minimum required.

believes that the structure of the stock option plans serves its purpose

being concluded in the future, the Company will consider publishing a

to retain members of the Board of Directors and to align the interests of

disclosure on its website.

The AFM has to be notiﬁed of major shareholdings in respect of the

shareholders, management, Board of Directors and other stakeholders.

Company in accordance with the Financial Market Supervision Act

Principle 2.3 Organisation of the Supervisory Board and reports

In addition, the Supervisory Board did not conduct scenario analyses

(Wet op het ﬁnancieel toezicht) and the Ordinance to Disclose Major

whereby the impact of different performance assumptions and

Principle 4.2 Provision of information

Shareholdings and Capital Investments in Institutions Issuing Securities

If the Supervisory Board considers it necessary, it can, according to

corporate actions on variable remuneration of the Board of Directors

(Besluit melding zeggenschap en kapitaalbelang in uitgevende

the Company’s Articles of Association, install committees from among

was examined. The Supervisory Board concluded this is not necessary

While the Company focusses on the corporate calendar that covers

instellingen).

its members, such as an audit committee, remuneration committee,

due to the simple structure of variable compensation.

all publication dates and planned conferences and will update

and a selection and appointment committee and shall draw up a set

investor presentations posted on the Company’s website whenever

Due to the listing of the shares on the German Frankfurt Stock

of regulations for each committee. The Supervisory Board consists

new information is available so that no single investor can gain an

Exchange, the Company must also in its capacity as a so-called

of four members. The Company decided to not form a remuneration

Principle 3.2.1 Remuneration committee proposal

information advantage, due to the size of the Company and owing

domestic issuer (“Inlandsemittent”) under the German Securities

committee and a selection and appointment committee, and it is instead

to the large number of meetings not every single meeting with or

Trading Act publish any shareholding notiﬁcations under Dutch law

the collegiate responsibility of the Supervisory Board to prepare the

A remuneration policy has been implemented and approved by the

presentation to analysts, investors and institutional investors can be

immediately, but no later than three trading days after receiving them,

decision-making of the Supervisory Board and perform the tasks of these

General Meeting. However, given the size of the Company and the

made available to follow in real time. The Company also does not post

via qualiﬁed media outlets in accordance with Section 26 (1) of the

committees as set out in the Code, unless stated otherwise herein.

Supervisory Board, a remuneration committee has not been and is not

a policy on bilateral contacts with the shareholders on its website. This

German Securities Trading Act (“Wertpapierhandelsgesetz”). The

intended to be established.

is in deviation from best practice provisions 4.2.2 and 4.2.3.

Company must also transmit the notice to the German Federal Financial

The Company does therefore not fully comply with best practice

Supervisory Authority (BaFin) and to the German Company Register

provisions 2.3.2, 2.3.3, 2.3.4 and 2.3.5. The Supervisory Board, due to

(“Unternehmensregister”).

its size, did not nominate a vice-chairman and does therefore not fully

Principle 3.2.3 Severance payments

comply with best practice provisions 2.3.6 and 2.3.7.

On 3 November 2023 Michael Oschmann informed us via a release

DECREE ARTICLE 10 TAKEOVER

The compensation paid in the event of dismissal of Mr Körner may

according to art. 40, section 1 of the WpHG about a substantial

exceed one year’s salary, however, severance pay will not be awarded if

holding in the Company. According to this release, he indirectly holds

DIRECTIVE (BESLUIT ARTIKEL 10

Principle 2.4 Decision-making and functioning

the agreement is terminated early at the initiative of the Board member,

11,720,668 shares in ad pepper which is equivalent to 50.53 percent of

OVERNAMERICHTLIJN)

or in the event of seriously culpable or negligent behaviour on the part

the total voting rights.

Due to its size, the Supervisory Board did not nominate a vice-chairman

of the member of the Board of Directors. In the event of his contract

and does therefore not fully comply with best practice provision 2.4.3.

being terminated without cause as deﬁned by the applicable law, the

Share ownership as at 31 December 2023*:

Company would remain obliged to compensate such member for the

Introduction

remaining term of his employment agreement. The Company believes

Principle 2.6 Misconduct and irregularities

that the contractual arrangement is well justiﬁed due to the long tenure

In accordance with Article 10 of the Takeover Directive (Dertiende

of this board member. The Company does therefore not comply with

Richtlijn), companies with securities that are admitted to trading on

The Company has no plans to establish “whistleblower” guidelines

best practice provision 3.2.3. See also page 35 “Payments to employees

Number

Percentage

a regulated market are obliged to disclose certain information in their

governing the reporting of misconduct by Company employees. Given

on termination of employment in connection with a public takeover bid”.

EMA Electronic Media

board reports. This obligation has been implemented in Dutch law

Advertising International B.V.

9,486,402

40.90

the Company’s small size, there are short lines of communication and

through Decree Article 10 Takeover Directive. The Group must disclose

the Board of Directors is highly involved in the day-to-day business

Treasury stock

1,242,128

5.36

certain information that might be relevant for companies considering

and employees already have the possibility of reporting suspected

Principle 3.3 Remuneration Supervisory Board

Euro Serve Media GmbH

1,641,786

7.08

making a public offer with respect to the Group. The information that

irregularities at the Company on a general, operational and informal

the Group is required to disclose, including a corresponding explanatory

Free ﬂoat

10,822,928

46.66

level without jeopardising their legal position. The Company

Supervisory Board members have been granted stock options, e.g.

section, is presented below.

therefore does not fully comply with best practice provision 2.6.1.

under the newly issued 2023 plan. The Company does not comply with

Total

23,193,244

100

However, a Code of Conduct, setting out business principles for our

best practice provision 3.3.2 of the Code and deems this appropriate

employees and rules of conduct, was adopted in 2007 which allows

given the size of the Group and long-term involvement of the members

Capital structure

*Table shows shareholders holding >3 percent in the Company’s share capital.

for the possibility of anonymously reporting concerns about actual or

of the Supervisory Board. Furthermore, the grant of 18,000 options for

suspected non-compliance with the Company’s standards stipulated

three Supervisory Board members (i.e. excluding the Chairman of the

The Company has only one class of shares (ordinary shares) which carry

in its Code of Conduct.

Supervisory Board) in connection with the 2023 plan is regarded to be

equal rights. As at 31 December 2023, the issued share capital amounts

more symbolic rather than part of a regular remuneration.

04.1

GOVERNANCE

Appointment and dismissal

deﬁned in writing by the Supervisory Board and may be reappointed

of members of the Board of Directors

in line with the respective legal requirements. In principle, the lowest

possible number of Supervisory Board members should retire from the

The members of the Board of Directors are appointed on the basis

Board at the same time.

of a binding nomination by the Supervisory Board. Where no binding

nominations have been made, the General Meeting is free to select.

Amendments to Articles of Association

The General Meeting may at any time resolve that the list of candidates

is not binding by adopting a resolution passed with an absolute

majority of the votes cast, representing more than one-third of the

The Articles of Association may only be amended by a resolution of the

issued capital. If at least an absolute majority of the valid votes cast

General Meeting in response to a proposal submitted by the Board of

supports the resolution to render the nomination non-binding, but the

Directors with the approval of the Supervisory Board. Where the Board

required quorum of one-third of the issued capital is not represented,

of Directors has not submitted any such proposal, any resolution to

then this resolution may nevertheless be adopted at a second meeting

amend the Articles of Association may only be adopted with a majority

to be convened. At such meeting, the resolution may then be adopted

of at least two-thirds of the votes validly cast in a meeting in which at

with at least an absolute majority of the valid votes cast, but without

least three quarters of the issued share capital is represented.

any quorum requirement.

Buyback of treasury stock by the Company

The General Meeting may at any time suspend or dismiss any member

of the Board of Directors. The Supervisory Board is entitled to suspend

any member of the Board of Directors and is obliged to notify the

On 16 June 2023, the General Meeting authorised the Board of

member of the Board of Directors in writing and without delay of

Directors for a period of 18 months to buy back stock shares up to a

this suspension, stating the reasons for such move. Furthermore, the

maximum amount of 50 percent of the share capital outstanding at that

Supervisory Board is then obliged to convene a General Meeting to

time. The purchase price per share must amount to no less than 80

pass a resolution either on lifting the suspension of the member of the

percent and no more than 120 percent of the opening share price on the

Board of Directors or on the member’s dismissal.

date of the respective buyback.

No shares have been bought back in the ﬁnancial year 2023 (2022:

Shareholders’ agreement on limitations

233,325 shares).

on exercise of voting rights

Payments to employees on termination

Each share issued by the Company entitles its bearer to one vote. There

of employment in connection with

are no special statutory rights attached to the shares of the Company

a public takeover bid

and no restrictions on the voting rights of the Company’s shares exist.

There is also no employee participation in capital that does not allow

employees to directly exercise their controlling rights. As far as is

In the event of a change of control, there is the option of extraordinary

known to the Group, there is no agreement involving a shareholder of

termination for Mr Körner 12 months after the change of control takes

the Group that could lead to any restriction on the transferability of

effect. In the event of extraordinary termination of his contract, Mr

shares or of voting rights on shares.

Körner is entitled to receive payment of compensation amounting to his

respective annual target income through to the end of the contractually

agreed term, amounting to a minimum of 150 percent of his current

Appointment and suspension of

annual target income. A change of control in this respect arises when

Supervisory Board members

a shareholder gains control over the Company as deﬁned by Paragraph

29 of the German Securities Acquisition and Takeover Act (WpÜG), i.e.

The General Meeting appoints Supervisory Board members and

acquisition of at least 30 percent of the voting rights in the Company.

is entitled at any time to suspend or dismiss any Supervisory Board

member. The appointment, dismissal, or suspension of a Supervisory

In 2000, the ad pepper Group introduced a long-term incentive model in

Board member is decided by the General Meeting by way of an absolute

the form of stock option plans for employees in key positions, including

majority of votes cast. The Supervisory Board consists of no fewer than

members of the Board of Directors.

three members, including a Chairman, who will retire by rotation as

04.2

THE AD PEPPER SHARE

04.2

THE AD PEPPER SHARE

General Meeting

On 2 October 2023 the Board of Directors made use of this authorisation

The ad pepper share started the year with a share price of EUR 1.86

by issuing 1,693,244 new shares. As of 31 December 2023 the issued

and reached an annual high of EUR 2.62 on 14 February 2023. The

capital therefore amounts to 1,159,662 and is divided into 23,193,244

closing price at year end was EUR 2.44 and thus well above the annual

The resolutions proposed in the agenda were adopted at the General

common bearer shares with a nominal value of EUR 0.05 each. The

low of EUR 1.84. All in all, the ad pepper share oscillated in a relative

Meeting of ad pepper media International N.V. held in Amsterdam on

Capital structure

Board of Directors is therefore authorised to issue 16,806,756 new

narrow band between EUR 2.00 and EUR 2.50.

16 May 2023. In all, 10,042,575 voting rights, or 46.71 percent of the

ordinary shares with a nominal value of EUR 0.05 each.

issued share capital were represented at the General Meeting.

The Company’s shares are traded on the Prime Standard of the

Frankfurt Stock Exchange under the symbol “APM” and the ISIN code

Shareholder Engagement

As of 31 December 2023, the Company held 1,242,128 own shares

Alongside the presentation of the annual ﬁnancial statements for the

NL0000238145.

(2022: 1,242,128).

2022 ﬁnancial year, key agenda items also included the discharge of the

The Board of Directors values the insight gained from shareholder

members of management and the Supervisory Board, the re-election of

The authorised share capital of the Company amounts to EUR 4,000,000,

engagement and places signiﬁcant importance on maintaining close

Thomas Bauer as member of the Supervisory Board, the adoption of the

2023

2022

divided into 80,000,000 shares, with a par value of EUR 0.05 each.

Key share ﬁgures

relationships with shareholders, taking account of and responding

amendments to the Company’s Articles of Association, the approval of

Article 28(1) of the Company’s articles of association (the “Articles

to their views. The Group’s CEO and investor relations team

the SB 2023 as well as the BoD 2023 stock option plan as well as the

of Association”) provides that the Board of Directors, after approval

Outstanding shares*

23,193,244

20,257,872

communicate on a regular basis with shareholders and analysts and

authorisation to buy back treasury stock.

from the Company’s Supervisory Board, is authorised to issue ordinary

Market capitalisation (in EUR)

56.59m

40.85m

endeavour to facilitate open engagement. In 2023, frequent investor

shares in the Company up to the point that the issued share capital of

meetings were held. The Group has an investor relations website at

Year end (in EUR)

2.44

1.90

the Company reaches EUR 2,000,000. At the beginning of the ﬁnancial

www.adpeppergroup.com where all regulatory news as well as other

year 2023 the issued share capital amounted to EUR 1,075,000, meaning

Year high (in EUR)

2.62

5.94

information on the ad pepper Group is available. We aim to maintain

the Board of Directors was authorised to issue up to 18,500,000 new

Year low (in EUR)

1.84

1.53

strong dialogue with our shareholders and regularly collect feedback.

ordinary shares with a nominal value of EUR 0.05 each.

Please contact ir@adpepper.com.

*Total number of issued shares less own shares.

Furthermore, article 28(2) of the Articles of Association provides that

the Board of Directors, after approval from the Supervisory Board, is

authorised to exclude or restrict pre-emption rights with regard to the

issue of shares in the Company.

Share price performance in past 12 months (Xetra)

4.0

3.5

3.0

2.62

2.5

2.0

1.84

1.5

1.0

January

February

March

April

May

June

July

August

September

October

November

December

January

04.3

BUSINESS ACTIVITY

04.3

BUSINESS ACTIVITY

DISCLAIMER REGARDING

The ad pepper Group focuses on long-term value creation through

organic growth in its existing businesses, while also evaluating

FORWARD-LOOKING

inorganic growth opportunities through value-accretive acquisitions.

STATEMENTS

The Group is divided into three reporting segments, which work in

close cooperation with the holding company and operate independently

in the marketplace: ad pepper (performance marketing company),

ad agents (digital marketing agency) and Webgains (afﬁliate

This report of the Board of Directors includes forward-looking

marketing network). The holding company assumes responsibility for

statements that are based on management estimations, which are

the transfer of know-how between the segments, the strategic focus,

valid at the time when this management report was prepared. Such

as well as ﬁnancing and liquidity as part of the overall governance and

statements relate to future periods, or are characterised by terms

administration of the Group. The ad pepper Group’s overall strategy is

such as “expect”, “forecast”, “predict”, “intend”, “plan”, “estimate”

to support and strengthen each segment individually, as each business

and “anticipate”. Forward-looking statements can entail risks and

has its own distinctive culture, clients, product range and regional

uncertainties. Many such risks and uncertainties are determined

focus. All three business segments offer their clients performance-

by factors that cannot be inﬂuenced by the ad pepper Group. As

based solutions. This means that the advertiser only pays if there are

a consequence, actual results may differ signiﬁcantly from those

measurable results (completion of speciﬁc actions). The most common

described below.

models in performance-based marketing are: CPM (cost-per-mile), CPC

(cost-per-click), CPL (cost-per-lead) and CPA (cost-per-acquisition).

The ad pepper Group also offers a broad range of services, such as

consulting and the development of strategies for the use of digital

THE AD PEPPER GROUP

Digital performance

technologies, the design, implementation and execution of digital

marketing

marketing and communication solutions as well as consulting on digital

media strategies and digital media technologies and tools. The ever-

ad pepper media International N.V. is the holding company of one

increasing importance of digital processes for businesses leads to an

of Europe’s leading international performance marketing groups.

increase in the corresponding budgets, and the vast amounts of data

Founded in 1999, the ad pepper Group is one of the pioneers in the

thus generated require thorough analysis (preferably in real time). To be

online marketing business. With eleven ofﬁces in Germany, Italy,

successful in the ﬁeld of digital marketing, companies therefore need to

France, Spain, Switzerland, the United Kingdom and the Netherlands,

develop competencies that go beyond an effective allocation of digital

Lead generation

Digital marketing agency

the ad pepper Group develops performance marketing solutions for its

media spend across multiple channels and managing the respective

Audience targeting

customers around the world.

campaigns. And they need help to achieve this. It is therefore not

Germany / Switzerland

surprising that – in some areas of our business – the ad pepper Group is

Germany / Spain

The ad pepper Group operates in the highly dynamic digital commerce

competing more and more with well-known strategy and IT consultancies

Afﬁliate network

market, which is characterised by dynamic growth in both consumer

that offer consulting services in the digital marketing space.

and advertising expenditure. Channels such as social media, search,

UK / Germany / France / Spain / Italy / Netherlands

video and mobile – to name just a few – continue to expand their

market share.

The ad pepper Group provides services to for large corporations

and major SMEs based in Europe and abroad. Our clients operate

primarily in the “Trade & Consumer Goods“, “Financial Services“,

“Telecommunications & Technology“ and “Transport and Tourism“

sectors. The ad pepper Group strives for long-term client relationships

and has been working with some of its clients for more than a decade.

04.3

BUSINESS ACTIVITY

SEGMENTS OF THE

Webgains

strategies for their budget. Taking local conditions into account, ad

Furthermore, Webgains has recently launched the Afﬁliate Discovery

pepper is able to optimise campaigns for the target markets. Whether

product to create smarter connections, as well as The Tag for seamless

AD PEPPER GROUP

working with an agency or a direct client, the aim is always to deliver

Webgains has been part of the ad pepper Group since 2006. Today,

integration of technology partners.

the best possible result. What sets ad pepper apart from its competitors?

the registered and approved afﬁliate network serves over 1,800

Many years of experience – and iLead. This unique platform enables

clients worldwide, from start-ups to global brands, in more than 170

The current strategy focuses on a service-oriented and performance-

the agency to generate customised campaigns that are adapted to

global markets. When it comes to designing local and international

differentiated approach. By investing in talent and technology,

ad pepper

the speciﬁc markets of their clients in next to no time. And the iLead

campaigns, Webgains not only beneﬁts from its strong publisher

Webgains has created the optimum blend of human and artiﬁcial

platform was developed in-house. With the help of iLead, over 30,000

network, but also from the extensive experience of over 100 highly

intelligence. High-tech advances make it easy to quickly roll out

The Group’s success story began with ad pepper in 1999. As a leading

campaigns have been successfully launched and managed worldwide

motivated experts with excellent market knowledge, which they

scalable, international campaigns. Meanwhile, customers can count on

performance marketing company, ad pepper specialises in lead

and millions of qualiﬁed leads have been generated.

continuously develop. Webgains became the world’s ﬁrst certiﬁed

outstanding data security at all times and beneﬁt from near real-time

generation and targeting speciﬁc audiences. ad pepper works with its

B-corp afﬁliate Network in 2023, balancing globally aligned standards

performance reporting.

clients to develop online marketing strategies for over 50 countries

Ofﬁces: Nuremberg / Madrid

with hi-performance and proﬁts.

worldwide and uses the latest technologies for each project. Whether at

Ofﬁces: Nuremberg / Madrid /Bristol /

the local, national or international level, ad pepper helps its customers

Thanks to partnerships with over 250,000 publishers, Webgains’

London / Paris / Milan / Amsterdam

meet their goals by developing the most efﬁcient online marketing

clients have access to one of the world’s leading, performance afﬁliate

marketing networks, offering the widest possible reach.

Iñigo Abrisqueta

Susanne Pilz

Iñigo Abrisqueta

Ami Spencer

Samuel Rodman

Chief Executive Ofﬁcer

Managing Director

Chief Executive Ofﬁcer

Chief Operating Ofﬁcer

Chief Technology Ofﬁcer

ad pepper Spain

ad pepper Germany

Webgains

04.3

BUSINESS ACTIVITY

ad agents

EMPLOYEES AND VALUES

As a full-service performance marketing agency, ad agents has a sixth

• Respect for people. We respect people, honour diversity, and treat

sense for trends, extensive experience and transparent reporting

each other fairly. These are the cornerstones of our culture and key

ad agents joined the ad pepper Group in 2007. Today, it is one of

structures. They advise and support national and international

to our ability to work successfully as a global team.

Germany’s most successful online and performance marketing

companies from virtually every industry who partner with ad agents to

• Integrity. We operate with the highest standards of honesty and

A total of 217 employees work in the three business segments at

agencies – and for a good reason. Their strategies are as unique

create exceptional and successful performance marketing campaigns.

responsibility – as individuals and as a corporation – to be a role

December 2023 which is 32 less compared to the ﬁgure at the end of

as their personalised consulting and support services, which are

model through our business practices, community involvement and

December 2022 (249). Given the prevailing revenue levels, we had to

always optimised to suit the situation and the speciﬁc requirements

Exceptional quality always pays off: ad agents is a certiﬁed Google

environmental stewardship.

adjust the headcount especially in the fourth quarter. While headcount

of ad agents’ clients. ad agents maintains an overview of the entire

Premier Partner, Microsoft Advertising Elite Agency as well as a

• Our customers’ success. We ensure our customers’ continuous

in the adminstration and ad pepper segment remained more or less

digital advertising market and adapts its comprehensive service

Meta (Platform) Business Partner and maintains strong partnerships

success by forging deep relationships founded on our commitment

stable, we had to adjust our workforce in the Webgains and ad agents

portfolio accordingly, thus supporting its clients with planning

with leading-edge technology providers.

to meeting their diverse technology needs and a shared passion for

segment respectively.

and implementing efﬁcient and effective online and performance

excellence.

Ofﬁces: Herrenberg / Zurich

marketing strategies. ad agents’ digital marketing experts always

• Initiative and accountability. We deliver on our promises to our

ﬁnd the perfect strategy to increase our clients’ brand awareness and

customers, stakeholders, and to each other by taking risks, seeking

Number of employees

31/12/23

31/12/22

sales – across all digital channels and on all devices.

proactive solutions, and assuming ownership of the results.

Number

The Board of Directors promotes and applies these values thoroughly

ad pepper

in all personnel related processes such as hiring, promotions and the

Webgains

104

review of employee performance.

ad agents

106

To the best of our knowledge, we have not identiﬁed any incidences of

Administration

non-compliance to local law.

ad pepper Group’s employees are the key to the Company’s success. ad

pepper strives to attract, develop and retain qualiﬁed and motivated

people in a professional, safe and healthy work environment. ad pepper

complies with all local laws relating to working hours, vacation laws

and occupational health laws, also taking into account the psychosocial

work environment. Regular team activities as well as physical activity

are encouraged.

In our Code of Conduct, ad pepper deﬁned a set of joined, equally

important values that best express our focus on service/product

leadership through innovation, long-term value creation and the

creation of a fair, inspiring work environment for all our employees:

Dirk Lajosbanyai

Wolfgang Schilling

Managing Director

ad agents

04.4

ECONOMIC

DEVELOPMENT

04.4

ECONOMIC DEVELOPMENT

MACROECONOMIC

Evolution of (Net) Advertising Expenditure

PRESENTATION OF

EBIT, EBITDA, and EBT

at Global and National Levels

(for deﬁnitions please see page 165)

FRAMEWORK

EARNINGS POSITION

EBT, EBIT and especially EBITDA are widely used in our industry and are

2023f*

2024f*

the most common ﬁnancial metric to measure ﬁnancial performance

Development in gross sales, revenue and gross proﬁt

According to a study published by the Organisation for Economic Co-

within our peer group. The Group’s earnings before interest and taxes

Percent

operation and Development (OECD) end of November 2023, the global

(EBIT) amounted to EUR -994k in the past ﬁnancial year (2022: EUR

Global

2.7

4.6

economy continues to confront the challenges of inﬂation and low

The ad pepper Group achieved gross sales of EUR 85,988k in the

187k). Earnings before taxes (EBT) amounted to EUR -631k (2022: EUR

Americas

2.5

5.8

growth prospects. GDP growth has been stronger than expected so far in

2023 ﬁnancial year (2022: EUR 98,229k), equivalent to year-on-year

56k). Earnings before interest, taxes, depreciation and amortisation

2023 but is now moderating on the back of tighter ﬁnancial conditions,

North America

2.2

5.7

decline of -12.5 percent. Revenue amounted to EUR 21,749k in 2023

(EBITDA) at the Group came to EUR 24k in the past ﬁnancial year (2022:

weak trade growth and lower business and consumer conﬁdence. Risks

(2022: EUR 24,868k). Gross proﬁt – alongside revenue our second most

EUR 1,275k).

USA

2.2

5.8

to the near-term outlook remain tilted to the downside and include

important key ﬁgure – showed a group-wide decline of -11.9 percent

Canada

3.5

3.6

heightened geopolitical tensions, for example due to the evolving

and amounted to EUR 20,876k in 2023 (2022: EUR 23,704k).

Looking at the individual segment, ad agent’s EBITDA fell by 84.7

conﬂict following Hamas’ terrorist attacks on Israel; and a larger-than-

EMEA

1.9

2.7

percent to EUR 209k (2022: EUR 1,358k), largely due to lower levels of

expected impact of monetary policy tightening. On the upside, growth

Webgains saw revenue decline of -9.5 percent to EUR 11,968k (2022:

revenue / cautious spending on our client’s side as well as severance

Western Europe

1.6

2.6

could also be stronger if households spend more of the excess savings

EUR 13,227k) while this segments’ gross proﬁt came to EUR 11,477k

payments at year end.

accumulated during the pandemic. According to OECD, global growth

1.4

3.5

in the past ﬁnancial year (2022: EUR 12,496k), equivalent to a decline

is projected to be 2.9 percent in 2023, and weaken to 2.7 percent in

Germany

0.6

1.8

of -8.2 percent. Main reason for the decline was the reduced booking

Moving on to the next segment, Webgains achieved an EBITDA of EUR

2024. As inﬂation abates further and real incomes strengthen, the world

volume of big clients in 2023.

2,060k and thus signiﬁcantly higher than the previous year (2022: EUR

France

2.1

2.4

economy is projected to grow by 3 percent in 2025. Global growth

871k). Strict cost discipline helped achieving this result despite overall

remains highly dependent on fast-growing Asian economies.

Italy

2.8

3.1

The ad pepper segment reported a decline in revenue to EUR 2,292k

lower revenue ﬁgures in the business year under review.

Spain

2.3

1.8

(2022: EUR 2,924k). Gross proﬁt was lower too compared to last year

with EUR 2,056k (2022: EUR 2,592k). The reduced booking volume from

The third operating segment, ad pepper, achieved an EBITDA of EUR

Online advertising market

Central & Eastern Europe

1.6

0.8

a number of clients and subdued booking behaviour in general during

-483k (2022: EUR -108k). The EBITDA achieved in 2023 is a reﬂection of

Asia-Paciﬁc

3.5

4.0

2023 is the main reason for this development.

a business year which saw budget cuts and cautious booking behaviour

The latest Dentsu Global Ad Spend Report projects a 4.6 percent increase

Australia

0.5

2.3

mainly in the last quarter of 2023 especially in the German market.

in worldwide advertising investments with a net investment ﬁgure of

Revenue in the ad agents segment decreased by EUR 1,229k or 14.1

China

4.9

4.7

approximately USD 752.8 billion by the end of 2024. Further examination

percent to EUR 7,489k (2022: EUR 8,718k). In terms of gross proﬁt EUR

of the continued growth forecast reveals that these dynamics are

India

8.6

9.0

7,157k for the 2023 ﬁnancial year is posted in the ad agents segment.

facilitated by ongoing media price inﬂation. However, the main drivers

Japan

2.2

2.5

This corresponds to a decrease of 14.5 percent compared with the

behind the rise in global advertising spending in 2024 are major

PRESENTATION OF FINANCIAL

previous year (2022: EUR 8,375k).

Latin America

6.1

7.9

sporting events like the UEFA European Championship as well as the US

AND NET ASSET POSITION

Presidential Election.

Brazil

6.0

8.1

Development in operating expenses

Dentsu anticipates growth across all regions of the global advertising

*(f) The percentage values are forecasts.

market. In Germany, for instance, advertising spend is expected to further

Ad Spend Forecast per Region Top Markets 2023-2024 by Dentsu.

Cash ﬂow

Operating expenses at the ad pepper Group decreased by 7 percent to

recover from a modest 0.6 percent in 2023 to moderate growth of 1.8

EUR 21,870k (2022: EUR 23,517k). Operating cost at ad pepper Group

percent in 2024. Compared to other major Western European markets,

largely consist of employment cost typically amounting to around 75

The gross cash ﬂow amounted to EUR -790k (2022: EUR 545k) while

Germany lags behind the UK (3.5 percent), France (2.4 percent), and Italy

percent of total cost. Consequently, the costs decreased - in all three

a ﬁgure of EUR 1,239k (2022: EUR 1,931k) was reported for cash ﬂow

(3.1 percent) in terms of the growth forecasts for 2024. Overall, the EMEA

operating segments - mainly due to reduced numbers of employees

from operations. The gross outﬂow of funds is particularly due to the

region is expected to experience growth of 2.7 percent in 2024, which is

during 2023. The increased costs in the admin segment include EUR

decrease in net income for the period. The net cash ﬂow from investing

a signiﬁcant increase compared to 2023 with 0.8 percent. The Americas

460k one-off expenses in connection with the acquisition of a (minority)

activities came to EUR 2,456k in the past ﬁnancial year (2022: EUR

region is expected to outperform Asia/Paciﬁc (growth forecast of

stake in solute Holding GmbH & Co. KG.

-3,281k), mainly for sale of securities as well as investments in short

4 percent) in terms of advertising expenditures, with a projected growth

term deposits. The cash ﬂow from ﬁnancing activities amounted to

rate of 5.8 percent.

EUR -893k in 2023, as against EUR -2,356k in the 2022 ﬁnancial year.

It included outgoing cash of EUR -286k (2022: EUR -539k) occurred for

Source: Dentsu Ad Spend Report 2024. Dentsu has published its Ad Spend Report for 2024

with forecasts on the development of net advertising investments, based on data from 58

dividends paid to non-controlling interests and lease payments of EUR

markets in North and South America, Asia-Paciﬁc, and EMEA.

-595k (2022: EUR -585k).

04.4

ECONOMIC DEVELOPMENT

Balance sheet structure

Total assets decreased by EUR 1,013k to EUR 42,941k (31 December

2022: EUR 43,954k). Current assets decreased by EUR 4,472k to EUR

37,297k (31 December 2022: EUR 41,769k) and non-current assets

increased by EUR 3,459k to EUR 5,644k (31 December 2022: EUR

2,185k). Right-of-use assets for capitalised leasing contracts for ofﬁces

and vehicles amount to EUR 1,184k (31 December 2022: EUR 1,318k).

Cash and cash equivalents amount to EUR 19,842k (31 December

2022: EUR 17,008k) and securities and deposits amount to EUR 3,523k

(31 December 2022: EUR 6,076k). Trade receivables decreased by EUR

4,444k to EUR 13,124k (31 December 2022: EUR 17,568k).

On the equity and liabilities side, the Company’s equity showed an

increase of EUR 3,215k to EUR 18,881k (31 December 2022: EUR

15,666k) which corresponds to an equity ratio of 44 percent (2022: 35.6

percent). Trade payables decreased by EUR 3,179k to EUR 17,657k (31

December 2022: EUR 20,836k). Long-term liabilities amount to EUR 822k

(31 December 2022: EUR 840k) and consists mainly of lease liabilities for

capitalised right-of-use asset. Current liabilities amount to EUR 23,238k

(31 December 2022: EUR 27,448). Of these, EUR 1,996k (2022: EUR

2,495k) relate to the written put option over the non-controlling interest

in ad pepper media Spain S.A. and Webgains S.A. Further EUR 536k (31

December 2022: EUR 523k) relate to the lease liability for capitalised

right-of-use assets.

The ad pepper Group was internally ﬁnanced as of the balance sheet

date. Its liquid funds (including current securities and deposits) totalled

EUR 23,365k at the end of December 2023 (31 December 2022: EUR

23,084k). The Company still has no external loans.

04.5

RISK REPORT

04.5

RISK REPORT

FOREWORD

to successfully implement mitigation actions. The results of the risk

This could lead to a loss of members in our advertising network as well

Finally, our systems are extremely dependent upon power supply. In the

assessment and any updates are reported to the Supervisory Board

as advertising customers, and ultimately to increasing costs. This could

case of major power outage (which cannot be excluded also in the light

on a regular basis. A detailed review of all underlying business risks

impair our ability to win new users and advertising customers and

of the current energy crisis), we would have to resort to emergency

is completed every year. At least once a year, the Supervisory Board

thereby adversely affect our revenues and our growth. The availability

power units. It may happen that such emergency power units do not

The German Corporate Sector Supervision and Transparency Act and

discusses the corporate strategy and business risks as well as the

of our products and services is dependent on the uninterrupted

work correctly and that they are insufﬁcient in the case of a major

the Dutch Corporate Governance Code lay down key requirements and

results of an assessment by the Board of Directors of the structure

operation of our IT and communication systems. Any damage to or

power outage.

obligations regarding risk management and control systems. In line

and operations of the internal risk management and control systems,

failure in our systems could interrupt our services, which could reduce

with these requirements applicable in Germany and the Netherlands,

including any signiﬁcant changes.

our revenues and proﬁts, and damage our brand. Our systems could

the ad pepper Group operates a comprehensive and adequate risk

Technology risk

be damaged by ﬂood, ﬁre, power outage, telecommunication failure,

management system. The regulations require the Board of Directors

In addition to the dedicated risk management system outlined above,

computer viruses, terrorist attacks, attacks from cybercriminals,

to ensure that the Company complies with all applicable laws and

the following elements also serve to identify risks within the Group:

attacks preventing computers from accessing services, and other forms

It is conceivable that technologies will be developed that block or

requirements, and to report to the Supervisory Board regularly on the

of attack on our systems. Our data centres could become the target

suppress the display of our advertising on the internet. Most of our

internal risk management and control systems. The risk management

• Operational planning, including updated intra-year forecasts

of intrusion, sabotage or wilful vandalism, or they could be affected

revenues are generated in such a manner that advertising customers

system at the ad pepper Group identiﬁes signiﬁcant risks which could

• Quarterly ﬁnancial statements

by faults occurring as a result of ﬁnancial difﬁculties on the part of

pay for their advertising to appear on websites. Technologies designed

have adverse implications for the Company. These risks are quantiﬁed

• Monthly and quarterly reporting by subsidiaries

operators of data centres. Not all our systems are fully redundant and

to block or suppress internet advertising could thus have an adverse

and evaluated in terms of their potential implications. Finally, suitable

(comparing target and actual results) to the Group

our natural disaster recovery plans cannot account for all eventualities.

effect on our operating results. For instance, major players in the market

measures are identiﬁed in order to counteract the identiﬁed risks.

Natural disasters of this kind or operators of facilities we use deciding

such as the mobile operators or the providers of application ecosystems

to shut down for ﬁnancial reasons without reasonable notice and/or

such as Apple and Google may decide to introduce ad blockers to their

other unexpected problems at our data centres could lead to prolonged

systems or to the mostly used internet surﬁng browsers. These could

Internal risk management and control system

interruptions to our services.

seriously obstruct the delivery of advertisements to users and thus

RISK CLASSIFICATION

harm the business of the ad pepper Group.

The ad pepper Group is managed by a Board of Directors and Supervisory

In order to be successful, our network infrastructure must be efﬁcient

Board appointed by the General Meeting. The Supervisory Board

and reliable. The higher the user frequency and the complexity of our

In general, the market for internet advertising is characterised by

responsibility is the oversight of the risk management system. Consistent

products and services, the more CPU performance we will need. We

rapid technological change, developing industry standards, frequent

with the requirements of the Dutch Corporate Governance Code, the

Risks are classiﬁed as operational, strategic, ﬁnancial risks, compliance

have invested heavily in acquiring and leasing data centres as well

introduction of new products and services, and changing customer

Company has established a procedure for reporting actual or suspected

and assessed according to their probability of occurrence and their

as cloud services and updating our technology and the infrastructure

behaviour. The introduction of new products and services, and the

irregularities within the Company and its afﬁliated enterprises. In addition,

potential ﬁnancial impact. The major risks for each classiﬁcation are

of our network in order to cope with growing trafﬁc and the launch of

emergence of new industry standards can render existing products

the Board of Directors has developed and implemented strategies,

described below:

new products and services, and we expect to continue doing so. These

and services obsolete and impossible to sell or require unexpected

controls and mitigation measures to identify current and developing risks

investments are costly and complex and can lead to efﬁciency losses

investment in new technology. Our success will depend on our ability

as part of the risk management system. Risk management policies and

or downtime. If we fail to expand successfully or if efﬁciency losses

to adapt to rapid technological changes, to improve existing solutions,

procedures are embodied in our Corporate Governance, Code of Conduct,

or downtime occur, the quality of our products and services as well as

and to develop and launch a host of new solutions in order to meet our

and ﬁnancial reporting controls and procedures. A variety of functional

customer satisfaction could suffer. This could damage our reputation

customers’ and partners’ continuously changing demands. Advertising

OPERATIONAL RISK

experts evaluate these business risks and aim to mitigate and manage

and result in a loss of existing and potential customers, advertising

customers, for instance, are increasingly demanding online advertising

these risks on an ongoing basis.

clients, and members of our network. Cost increases, a lower frequency

networks and advertising that go beyond pure stills, integrating “rich

of use on the part of our partners in the advertising network, failure

media”, such as audio and video, interactivity and methods for more

Identiﬁed risks are divided into four types:

Infrastructure risk

to adapt to new technologies, or changed business requirements could

accurately targeted consumer contacts and behaviours.

adversely affect our revenue and ﬁnancial strength.

• Catastrophic (loss of ability to achieve business objectives, e.g.

Our products and services are dependent on users having access to the

Our systems do not support all types of advertising formats. Equally,

worst-case scenario)

internet and in some cases also require substantial bandwidth. This

We also use other IT suppliers, including data centres, cloud services

certain website operators within our network do not accept all of

• Major (reduced ability to achieve business objectives)

access is at present made available by companies that have signiﬁcant

and broadband providers. Any disturbance in network access or

the advertising formats offered by us. Moreover, a further increase in

• Moderate (disruption to normal planning with a limited effect on

and growing inﬂuence on the market for broadband and internet

colocation services by these providers, or their inability to process

fast and powerful internet access could generate new products and

achievement of business strategy and objectives)

access, such as telephone companies, cable companies, and mobile

current or larger data volumes could seriously damage our business.

services which are only possible with increasing bandwidth. If we fail

• Low (no material impact on the achievement of business strategy

communication providers. Some of these providers could start adopting

to successfully adapt to such developments, there is a risk that we

and objectives)

measures to interrupt or impair user access to certain products, or they

Furthermore, ﬁnancial or other difﬁculties on the part of our providers

could lose customers and/or parts of the advertising space marketed

could increase the costs of user access to such products by limiting or

could have an adverse impact on our business. We have witnessed

by us. We procure most of the software used at our Company externally

All identiﬁed risks are evaluated based on their likelihood of occurring

forbidding the use of their infrastructure for our products and services,

interruptions and delays in these services and in these the availability

and we plan to continue buying technologies from third-party suppliers

and their potential impact (estimated in monetary terms) in disrupting

or they could charge us or our users higher fees. In addition, it cannot be

of IT infrastructure and expect these in future, too. Faults, interruptions

in future as well. We cannot deﬁnitively say whether such technologies

our progress toward achieving our business objectives. The overall

excluded that the side effects of the war in Ukraine could impair a proper

or delays in conjunction with these technologies and information

will continue to be available in future either at all or on commercially

risk management goal is to identify risks that could signiﬁcantly

functioning of the internet infrastructure in the European continent.

services could harm our relations with users, adversely affect our

reasonable terms.

threaten our success and to allow management sufﬁcient opportunity

brand, and expose us to liability risks.

04.5

RISK REPORT

Sustainability

It is also possible that the trend towards marketing online advertising

do not own content, we rely in part on publishers for controls with

A lack of qualiﬁed and motivated personnel could negatively impact our

space via automated so-called ad exchanges will intensify further.

respect to such activities. If fraudulent or other malicious activity is

development and growth, increase our costs and harm our reputation.

By establishing and optimising artiﬁcial intelligence (AI) solution in

perpetrated by others, and the Group fails to detect or prevent it, the

There is a risk of failure to address the growing needs and expectations

We face competition for qualiﬁed personnel, for example those in IT and

combination with demand- side platforms (DSPs) and/or supply-side

affected advertisers may experience or perceive a reduced return on

from society if the Group does not meet its ESG goals, resulting in

marketing positions. In addition, to attract or retain qualiﬁed personnel,

platforms (SSPs), online networks such as the ad pepper Group may

their investment resulting in dissatisfaction with the Group’s solution,

reputational damage and potentially reduced customer demand for our

we might have to offer more competitive compensation packages and

in future lose further relevance or even lose the basis of their business

refusal to pay, refund demands or loss of conﬁdence of advertisers or

services.

other beneﬁts, which could lead to higher personnel costs.

operations. We may also encounter problems which delay or prevent

publishers and ultimately withdrawal of future business.

the successful design, development, introduction, or marketing of

We take ESG matters seriously with a commitment to high standards.

We try to mitigate this risk through personnel development programmes

new solutions. Any solutions or improvements newly developed by

For instance, we achieved a group-wide so-called “b corp certiﬁcate”

in the respective segments as well as incentive systems. Supporting this

Intellectual property rights risk

us will have to fulﬁl the requirements of our present customers and

for the Webgains segment. B Corp Certiﬁcation is a designation

is an established, thorough annual review process from which we derive

prospective clients, and there is a risk that these will not meet with

that a business is meeting high standards of veriﬁed performance,

individually tailored and future-variable qualiﬁcation programmes as

the desired acceptance on the market. If we fail to keep pace with

Our patents, trademarks, business secrets, copyrights, and other

accountability, and transparency on factors from employee beneﬁts

well as performance-related remuneration systems.

technological developments and the launch of new industry standards

intellectual property rights constitute important assets for us. Various

and charitable giving to supply chain practices and input materials. In

at a reasonable cost, there is a risk that our expenditure will increase

events beyond our control constitute a potential risk for our intellectual

order to achieve certiﬁcation, a company must demonstrate high social

Market risk

and that we will lose customers and advertising space.

property rights. The same applies to our products and services.

and environmental performance by achieving a B Impact Assessment

score of 80 or above and passing our risk review. Multinational

The number of people accessing the internet using devices other

Effective protection of intellectual property may not be available in

corporations must also meet baseline requirement standards, make a

Our offering for advertisers and web publishers on the internet covers

than PCs, including mobile phones, PDAs and e-mail assistants, as

every country where our products and services are distributed or

legal commitment by changing their Corporate Governance structure

products and services where pricing is largely based on cost per

well as TV receivers, has grown dramatically in recent years. If we do

offered via the internet. Furthermore, the efforts which we have made

to be accountable to all stakeholders, not just shareholders, and

action (CPA), cost per lead (CPL), cost per download (CPD), cost per

not succeed in future in securing an appropriate number of users of

to protect our property rights may be insufﬁcient or ineffective. Any

achieve beneﬁt corporation status if available in their jurisdiction, and

thousand impressions (CPM), or cost per click (CPC). Every ﬁeld of our

alternative devices and gaining the loyalty of these users through our

signiﬁcant impairment of our intellectual property rights can adversely

exhibit transparency by allowing information about their performance

business is exposed to strong competition, mainly from large media

products and services, or if we are too slow in developing products and

affect our business or our competitiveness. Moreover, the protection

measured against B Lab’s standards to be publicly available on their B

and/or performance (digital) agencies or other advertising and afﬁliate

technologies compatible with communication devices other than PCs,

of our intellectual property rights is costly and time-consuming. Any

Corp proﬁle on B Lab’s website.

networks offering similar online services and products. Beside this

we will miss out on an increasingly important share of the market for

increase in the unauthorised use of our intellectual property could

group of companies, we also compete with search engine providers,

online services.

lead to increased administrative costs and work, and adversely affect

social media channels and marketplaces, such as Google, Facebook

our results. Although we aim to obtain protection for our intellectual

and Amazon, as well as large ad exchanges, i.e. marketplaces in

property, it is conceivable that we may not be able to adequately

which advertising space is auctioned in real time, similar to other

Cybercrime, hacking, identity theft and risk of fraud

STRATEGIC RISK

protect some of our innovations. In view of the often-considerable

market exchanges. Apart from this, we also compete with traditional

costs of patent and/or intellectual property protection, we may refrain

advertising channels, such as direct marketing, TV, radio, cable, and

Increasing international networking and the related possibility of

from protecting certain innovations and/or intellectual property which

print media, which are all striving to win a share of the total advertising

IT system abuse are resulting in cybercrime risks for the ad pepper

could prove to be important at a later date.

budget for themselves.

Personnel risk

Group, such as the failure of central IT systems, the disclosure or loss

of the data integrity of conﬁdential data from business activities, the

It is also possible that the scope of patent and/or intellectual property

Many existing and potential advertisers have competitive advantages

Our future success is to a signiﬁcant degree dependent on the

manipulation of IT systems in process control, or an increased burden

protection could turn out to be insufﬁcient or that a previously

over our Company due to such factors as longer company histories,

continued service of the (single) member of our Board of Directors

or adverse impact on IT systems as a result of virus attacks. In addition,

granted patent is deemed to be invalid or non-enforceable. As our

higher public awareness levels, larger customer bases, better access

and of the directors of our major segments. If we lose the service

complications with the changeover of IT systems could negatively

Company grows, there is a growing probability that lawsuits related to

to popular websites and signiﬁcantly larger resources in terms of staff,

of such persons, we may not be able to recruit suitable or qualiﬁed

impact the earnings situation.

intellectual property issues will be ﬁled against us.

ﬁnance, equipment, sales and marketing. These companies use their

replacements and may incur additional expenses to recruit and train

experience and resources in competition with us in different ways, such

new staff, which could severely disrupt our business and growth.

Cyber incidents, in general, may cause disruption and impact business

Our products, services, and technologies may fail to fulﬁl the demands

as pursuing more active M&A strategies, investing more in research

operations, potentially resulting in ﬁnancial losses, impediments of

of third parties, and irrespective of their validity, defending such claims

and development, or competing more aggressively for advertising

In general, highly qualiﬁed employees and management staff form the

trading, violations of applicable privacy and other laws, regulatory

can be time-consuming and costly, whether in or out of court. In the

customers and websites. If our competitors succeed in offering similar

basis of any company’s long-term economic success. Retaining key-

ﬁnes, penalties, reputational damage, reimbursement of other

event that claims against us are successfully upheld, we may have to

or better services or more relevant advertising, this could lead to a

employees at the Company on a long-term basis is a factor of the utmost

compensation costs, or additional compliance cost.

pay signiﬁcant damages, or discontinue services or practices, which

signiﬁcant loss of advertisers and web publishers and hence adversely

importance for the ad pepper Group, as is attracting new, highly qualiﬁed

may result in be violations of third-party rights. We may also need to

affect our revenues.

employees. Any departure of large numbers of these employees over a

The Group may be subject to fraudulent and malicious activities

obtain licenses to continue our existing business operations; this may

short period and subsequent inability to ﬁnd adequate replacements may

undertaken by persons seeking to use its platforms to divert or

also involve considerable additional costs.

Likewise, there is a risk to the Group’s business (or parts thereof) if any

inhibit the Company’s business performance. Speciﬁcally, the Company

artiﬁcially inﬂate the buyer purchases through its platform, mainly

or all of Google, Amazon, Facebook, Apple and other relevant players

cannot guarantee that it will be able to retain key top performers in the

through fraudulently generated advertising impressions, leads, and

(i) cease to be a market leader in the online advertising industry, (ii)

event of any further intensiﬁcation in the competition for highly qualiﬁed

other user behaviours overstating the actual performance. As we

were subject to adverse publicity or action impeding its provision of

employees, especially in the IT and internet sectors.

04.5

RISK REPORT

advertising services and infrastructure, (iii) were to cease to regard the

ad pepper Group to a material adverse effect if one or more of our large

• give priority to long-term goals over short-term results when

support, research and development, buildings, information systems,

Group as a preferred partner, (iv) were to expand their operations such

customers were to signiﬁcantly reduce their business with us for any

necessary

accounting, human resources and other integration aspects, and may

that it competed directly with the Group, or (v) otherwise cease to be

reason, or to favour competitors or new entrants. Customers do not

• adapt to technological changes designed to obfuscate or block

delay or threaten the complete integration of the businesses acquired.

available as a technology provider to the Group.

make binding long-term commitments to the ad pepper Group regarding

online advertising on desktop PCs or mobile devices

booking volumes and could seek to materially change the terms of their

• adapt to changes in the competitive environment

Likewise, divestment of companies and/or businesses can lead to

Moreover, since 2022 Google has blocked third party cookies in

business relationship at any time. Any such change could signiﬁcantly

• achieve sufﬁcient proﬁtability and reputation in the market on

liability vis-à-vis the buyer, or additional expenses, for instance through

Chrome. As a result, third-party cookies became sometimes unusable

harm the ad pepper Group’s business and operating results.

the basis of our investments in new technologies and related

indemnity clauses and guarantee commitments or long-term supply

for advertising measurement and many forms of third-party data

products/services.

contracts.

already challenged by GDPR since May 2018, will cease to exist.

Platform technology risk

While we expect the vast majority of our services and products to be

Should we fail to successfully handle these risks and uncertainties, this

Currency risk

unaffected, it can therefore not be excluded, that some of our business

could have signiﬁcantly adverse consequences for our revenue as well

activities will not work beyond the coming years. Unless we adapt to

The Group’s revenue growth depends partly on the ability to develop a

as our asset and ﬁnance position, see also Note [40].

these changes, these businesses will be negatively affected.

reliable, scalable, secure, high-performance technology infrastructure that

Since the ad pepper Group conducts a signiﬁcant share of its business

can efﬁciently handle increased usage globally. The platforms are scalable

outside the euro area, exchange rate ﬂuctuations can have a signiﬁcant

Risks of our M&A strategy

The possibility of in-house handling of advertising network functions can

in principle. However, only the actual future expansion of the business

impact on results. Currency risks from ﬁnancial instruments can impact

represent a possible risk for the ad pepper Group both at the level of

will prove whether there is enough business available and the platforms

accounts receivable, accounts payable, as well as cash and cash

the attractiveness of its offering vis-à-vis advertisers as well as to its

scales well enough to cover the ﬁxed cost base that has been built.

Historically, part of our Company’s growth has resulted from mergers

equivalents in a currency other than a Company’s functional currency.

negotiating power vis-à-vis the providers of online advertising inventory.

Inability to develop a scalable platform may have signiﬁcantly adverse

and acquisitions, and we will continue to consider acquisitions in

For the ad pepper Group, the currency risk from ﬁnancial instruments is

consequences for our revenue as well as our asset and ﬁnance position.

future as well. Furthermore, we will continually review our portfolio

particularly relevant for GBP and, to a lesser extent, USD. No ﬁnancial

Online advertising markets are characterised by rapid technological

of shareholdings to assess whether Company acquisitions might be

instruments are used to hedge currency risks.

change, the establishment of new industry standards, regular launches of

appropriate. Every acquisition or sale can have material consequences

new products and services, and rapidly changing customer requirements.

for our revenue and ﬁnancial position. Furthermore, the integration of

Tax risk

The introduction of new products and services based on innovative

an acquired business or technology can cause unforeseen operational

FINANCIAL RISK

technologies and the resultant establishment of new industry standards

problems, expenditure, and risks. Areas in which we may face risks in

could mean that our existing products and services become obsolete

this context include:

Our future income tax payments may be adversely affected by lower-

and unsellable, thus forcing us to make unforeseen and unplanned

than-expected proﬁts in jurisdictions with lower tax rates and higher

investments. Insufﬁcient ﬂexibility in adapting to these changes can have

• implementation or modiﬁcation of controls, processes, and

proﬁts in jurisdictions with higher tax rates. If the valuation of our

Low proﬁtability

adverse effects on our revenue, ﬁnance and asset position.

strategies of acquired businesses

deferred tax receivables and payables changes this could also mean

• diversion of management attention away from other business

additional tax expenditure.

We are exposed to risks that could prevent us from generating net

In general, we expect our sales growth to decline over the course of

matters

proﬁts in the future. These risks depend on several factors, including

time as a result of base effects and increasingly tough competition. We

• overvaluation of businesses acquired, acceptance of the acquired

The determination our tax provisions and other tax liabilities worldwide

our ability to:

also expect growing pressure on our operating margins as a result of

business‘ products and services by our customers

is a complex process, and in many instances the ﬁnal amount of tax

increasingly tough competition and a general increase in expenditure

• cultural problems associated with the integration of the staff of

to be paid is uncertain. Although we consider our estimates to be

• maintain and expand our existing advertising space on websites

in other areas of our business. Furthermore, the margin could fall as a

acquired businesses into our Group

realistic, the actual tax result can differ from the amounts shown in

of publishers and afﬁliates, owners of e-mail lists and newsletter

result of our Company having to pay a higher share of our advertising

• continued employment of staff companies which we acquire

our ﬁnancial statements and signiﬁcantly inﬂuence our ﬁnancial results

publishers

revenue to our website partners within our website portfolio and/or

• integration of the accounting, management, and information

in the period or periods to which such tax assessment applies. Our tax

• maintain and increase the number of advertising customers who

afﬁliate network.

systems as well as of the human resources administration and

liability forecast can be examined by the responsible tax authorities

use our products and services

other administration systems of acquired businesses.

at any time. Any negative outcome of such an examination can have

• increase the number of products and services we offer

an adverse effect on our ﬁnancial, revenue, and asset situation. All

• adjust to changes in needs and habits of online advertising

Dependency risk

The integration of companies, products and personnel can constitute

of our tax positions are subject to changes in tax laws, regulations,

customers, also with a view to the technologies in demand on the

a considerable burden to our management and our internal resources.

jurisdiction as well as tax-related accounting standards and their

market

The ad pepper Group and its segments have signiﬁcant customer

Acquisitions of foreign companies, in particular, are subject to

interpretations.

• respond to challenges resulting from the large and growing number

concentration, in terms of both advertisers and publishers (website

additional risks. These include risks associated with integrating

of competitors in the industry

owners), so economic difﬁculties or changes in the purchasing policies

companies with different cultures and languages, exchange rate risks,

• adapt to legal or regulatory changes with a view to the internet as

or patterns of its key customers could have a signiﬁcant impact on

and other country-speciﬁc economic, political and legal risks. In view of

far as these concern data privacy, use, advertising, and trade

the ad pepper Group’s business and operating results. While the

the number of acquisitions which we have completed in past years, the

• achieve sales targets for partners with whom we have agreed

concentration of our business on a relatively small number of customers

different customers and technological functionalities of the products

minimum guarantees

may provide certain beneﬁts to us, such as potentially more efﬁcient

and services acquired, future acquisitions may pose signiﬁcantly

• generate revenue from services in which we have invested

handling/decreased cost of sales, this concentration may expose the

bigger challenges with respect to products, sales, marketing, customer

signiﬁcant time and resources

04.5

RISK REPORT

New accounting standards

and trafﬁc, the Group’s platforms must be able to support increased

ability to inﬂuence Company matters and affects the liquidity of the ad

user’s data. Therefore, the effectiveness of our technology may be

trafﬁc volumes and variety of advertising formats whilst maintaining

pepper share traded on the stock exchange. In view of this, we may

impaired by regulations limiting or prohibiting the use of cookies and

The International Accounting Standards Board (IASB) or other

a stable and effective infrastructure and reliable service to customers.

implement measures that our shareholders do not deem expedient.

cookie consent of data subjects. On the basis of the requirements set

organisations may publish new or revised directives, interpretations, or

This ﬂexibility and stability require signiﬁcant investments in both the

This in turn may have a lasting negative impact on our share price.

up by data privacy regulators, software manufacturers may provide

other guidelines which could inﬂuence International Financial Reporting

Company’s organisation and technology, which increase the cost base.

new internet browsers bearing default settings where cookies are not

Standards (IFRS). As a result, it may happen that an accounting rule is

accepted and the user has to actively change such settings to accept

adopted for which no rules previously existed, or that an accounting

cookies (“privacy by default“). If the use or effect of cookies were

Capital risk

rule previously open for interpretation is declared to be generally

restricted, we would have to switch to other technologies in order to

COMPLIANCE RISK

valid or is applied in a speciﬁc manner. It is also conceivable that valid

collect geographic or behaviour-related information.

methods may be replaced entirely. Such IFRS-related changes can

The price of our share at times experienced considerable ﬂuctuation

have a signiﬁcant impact on our ﬁnance, revenue and asset positions.

since its initial listing and will continue to remain volatile in the future.

Although such technologies exist, they are far less effective than

Moreover, inability to adopt new accounting standards in time may

The share price may move rapidly in response to factors beyond our

cookies. We would have to develop or buy new technologies in order

Governance risk

severely damage our reputation.

control, including:

to prevent fraud in our networks. Replacing cookies could become time-

consuming and requires considerable investment. Their development

Besides operational and ﬁscal risks, our business activity harbours

• ﬂuctuations in our quarterly results or in the results of our

could turn out to be economically pointless or it may not be possible to

a wide range of legal risks. Legal disputes, authority ﬁnes and other

Liquidity and cash ﬂow risk

competitors

implement them early enough in order to prevent the loss of customers

proceedings may cause considerable damage to our business, our

• announcements of Company sales and takeovers, new products,

or advertising space. The use of cookie technology or a comparable

reputation or our brands, and entail high costs. We are subject to a

All of the Company’s liquid funds and short-term marketable securities are

major contracts, business relationships or provision of capital

technology to collect information about internet usage patterns may

variety of laws and regulations, many of which are not yet ﬁrmly

essentially managed by ﬁnancial institutions. Based on the development

• recommendations by equity analysts or changed proﬁt expectations

lead to lawsuits or investigations in future. Many jurisdictions have

established or are still developing. This includes wide-reaching

of our business, the liquidity of ad pepper media International N.V. can

• publication of proﬁts inconsistent with analysts’ expectations

detailed provisions concerning both the collection of personal data and

legislation covering consumer protection, data protection, e-commerce

at present be regarded as secure and, despite future investment in new

• number of shares outstanding

the use of such data for direct marketing campaigns.

and competition. Antitrust and competition claims or investigations

companies, sufﬁcient to meet all future payment obligations. A decline

• share sales by us or our shareholders

may also require changes to our business operations. Any such risks

in liquid funds may arise if further investments are required in the future.

• short-selling, hedging or other derivative transactions with shares

Since 1 December 2021 the Telecommunications Telemedia Data

are counteracted by internal and external law experts who thoroughly

The Company is dependent upon its customers’ payment discipline. Our

Protection Act (Telekommunikation-Telemedien-Datenschutz-Gesetz,

examine all contractual and regulatory matters. We endeavour to fulﬁl

receivables are typically unsecured and result from sales which are

The stock market in general and the market for technology companies

TTDSG) is applicable replacing the data protection requirements in the

our obligations through constant monitoring and by avoiding conﬂicts

predominantly generated with customers based in Europe. The Company

in particular have witnessed extreme share price and trading volume

Telemedia Act. The TTDSG introduces a strict cookie opt-in requirement

arising from the violation of third-party rights or breach of regulatory

checks its customers’ creditworthiness on an ongoing basis and has

ﬂuctuations often unrelated or disproportionate to the operational

very much in line with the preconditions in the EU Privacy and Electronic

provisions. No substantial litigation risks currently exist within the

made provisions for potential cases of default. Negative developments

performance of these companies. These general market and industry

Communications Directive. Prior to this the German High Court has

ad pepper Group.

on the capital markets can restrict our ability to obtain ﬁnancing. Past

factors can seriously damage the price of our share irrespective of our

outlined in 2020 consent requirements for storing cookies on devices

economic and ﬁnancial crisis led to certain restrictions on the availability

actual performance.

following a decision of the European Court of Justice on this issue.

of corporate ﬁnance and created a scenario such as that outlined above.

Data risk

Looking ahead, it is not possible to completely exclude future restrictions

Lower (or volatile) share prices may lead to an inability to attract strong

According to these decisions, companies need consent for storing

on our liquidity situation, especially in the case of a return to a scenario

long-term investors and limit our ability to raise new equity and attract

cookies on user devices irrespective whether this Cookie-ID is personal

Websites usually install small ﬁles with an ID to identify a user, generally

described above. Should one or more ﬁnancial institution go bankrupt in

key personnel.

data or not. These verdicts are the main reason why the German

called “cookies”, on a device. Cookies usually collect information about

such a scenario, this may have severe consequences for the Company’s

legislator has introduced a strict consent requirement for storing data

users so that websites can adapt their contents to user needs.

assets and ﬁnancial position.

In the past, lawsuits have been ﬁled against such companies after

in an end-user’s device. All in all, this leads to stricter data protection

times of high price ﬂuctuations on the overall market or in individual

requirements that may have a negative impact on our business model.

The internet user’s browser software forwards the cookie information

shares. In the event that such lawsuits are ﬁled against us, this could

Namely, the upcoming European ePrivacy-Regulation may introduce

to the website. Our business depends on the use of cookies to track the

Working capital risk

lead to signiﬁcant costs and distract management time and resources.

stricter requirements. If adopted, such regulations would have a

trafﬁc of internet users on the websites of our advertising customers,

thorough impact on our business model.

and to monitor and prevent fraud in our networks. Most of the latest

The Group’s operating results and cash ﬂow vary from quarter to

As of 31 December 2023, Michael Oschmann, Chairman of the

internet browsers enable internet users to change their browser

quarter due to the seasonal nature of advertising spending. In contrast

Supervisory Board, directly or indirectly owns shares representing

In addition to this, the EU-Commission has started the so-called

settings to prevent the storage of cookies on their hard disks. internet

to the higher advertising budgets spent during the fourth quarter, the

50.53 percent of the share capital and typically more than 80 percent

Cookie-Pledge initiative in order to better empower consumers to

users can also remove cookies from their hard disks at any time.

third quarter of the calendar year is typically the slowest in terms

of the voting rights at the General Meeting. For the foreseeable

make effective choices regarding tracking-based advertising models

of advertising spend (summer quarter). This affects the Group’s

future, Michael Oschmann will therefore continue to have signiﬁcant

using cookies and/or similar techniques of getting access to end user’s

According to the General Data Protection Regulation (“GDPR”), which

operating results, cash ﬂow and cash requirements. In addition, digital

inﬂuence on the management and on all matters requiring approval by

devices. This covers to a certain extent the storing of cookies on end

came into effect in May 2018 in Europe, and to the EU Privacy and

advertising spend is volatile and unpredictable. In periods of lower

the shareholders, including the election of board members, important

user’s devices that are necessary for our business model. As the storing

Electronic Communications Directive, consent of data subjects is

advertising spending this may have a material adverse effect on the

Company transactions, such as mergers or the sale of the Company as

of cookies is not strictly necessary to deliver the service requested by a

required for storing information like cookies for tracking or targeting

Group’s revenue. Similarly, if faced with spikes in advertising spend

a whole or in part. This concentration of control limits our shareholders’

data subject, consent of data subject is required.

purposes on an end-user’s device and for further processing of end

04.5

RISK REPORT

It might be more difﬁcult to get consent of a data subject for storing

enforcement proceedings, ﬁnes and/or criminal prosecution in one or

Operational risks are managed through the ongoing budgeting,

reach help to mitigate our exposure to any particular localised risk. We

cookies due to this initiative.

more jurisdictions. These monetary damages may not be subject to

forecasting and reporting process as well as training activities to

monitor proposed changes in taxation legislation and new accounting

contractual limit of liability or exclusion of consequential or indirect

constantly improve and update employees’ skills. Infrastructure risks

standards to ensure these are taken into account when we consider

We depend on an easy way to transfer personal data from the EU to

damages and could be substantial. Our liability insurance may not

are mitigated by regular backups, redundant server structures and

our future business plans. We try to manage the working capital risk

UK. At the end of June 2021, the European Commissions adopted an

cover us against claims related to security breaches, cyber-attacks or

moving to the cloud. To reduce fraud risk, anti-fraud teams are tasked

by increasing and diversifying our client base in a way, which allows

adequacy decision for the United Kingdom under GDPR. This decision

other breaches.

with identifying unusual patterns, ideally in the design phase of

us to become less dependent on fourth quarter gross sales. While the

facilitates a data transfer between EU and UK. Otherwise, our clients

advertising campaigns.

Group continues to be independent on external funding, the risk of not

will have to agree on Standard Contractual Clauses to legalise a data

ﬁnding these funds is not regarded as imminent. Matters of substantial

Violations of other legal requirements

transfer to UK. The duration of this decision is limited to four years. As

The cost of these measures and control systems must be commensurate

signiﬁcance are also reviewed with the Supervisory Board through the

the UK-Government has already announced to review the UK-GDRP and

with the beneﬁts achieved. Management generally considers the

two-tier board structure. Management realises that the expansion

to lower burdens for companies it is yet unclear whether this adequacy

The aim of compliance is to ensure irreproachable business conduct

likelihood of risks in the operational and technology area as moderate

of the business does require some risk taking and evaluates its risk

decision has a bright future. In 2024 the European Commission will

at all times and in all respects. Any failure to fulﬁl legal requirements

while evaluating the ﬁnancial impact of each event depending on

appetite as medium. Management therefore estimates this overall

start reviewing UK’s laws and systems for protecting personal data and

and report obligations, any violation of the Corporate Governance

the speciﬁc risk ﬁeld. Management’s risk appetite in this ﬁeld is

ﬁnancial risk to be low.

decide whether to extend the adequacy decision for another four years.

Code or insufﬁcient management transparency may pose a risk to the

moderate and we seek to mitigate risks through contracts, service level

required compliance. For this reason, the ad pepper Group established

agreements, insurance and cooperation with established partners.

As far as compliance risks are concerned as the Group is growing in a

Although we abide by the applicable laws in the different jurisdictions,

a Group-wide Code of Conduct as well as an insider trading policy,

complex and rapidly changing environment and is in an ongoing process

we cannot rule out the possibility that changes in legislation may have

which provides for the safety and support of employees in various

As far as strategic risks are concerned, we try to mitigate the personnel

of establishing and improving its processes, regulatory violations may

signiﬁcant repercussions for our business models and revenues. Any

professional situations. Despite comprehensive measures taken within

risk by providing attractive remuneration package, creation of a positive

occur. Management’s risk appetite is generally low and matters of

litigation or governmental action against us could become costly and

the realignment of the compliance programme and our compliance

working environment and structured individual development plan. We

substantial signiﬁcance are also reviewed with the Supervisory Board

time-consuming, or compel us to change our business practice and

organisation, it is impossible for us to protect us against all risks.

try to manage the dependency risks and platform risks by building and

through the two-tier board structure. The ad pepper Group is committed

divert management attention away from other business ﬁelds.

maintaining customer relationships. We develop online advertising

to complying with the laws and regulations of the countries in which

More generally, from time to time we are or may become involved in

strategies and regularly monitor progress for existing clients and

we operate. However, with the General Data Protection Regulation and

The regulatory environment in Europe is ever changing. With the

private actions, investigations and various other legal proceedings by

identify and build relationships with new customers.

ePrivacy Regulation, compliance obligations and ﬁnancial penalties for

GDPR, which came into effect in May 2018 in Europe, as well as

employees, suppliers, competitors, government agencies or others.

noncompliance are increasing signiﬁcantly. Should the risk materialise,

the EU e-commerce Directive, compliance obligations and ﬁnancial

Failure to comply with laws and regulations can damage our reputation

In general, management addresses market risks by actively monitoring

it would have a very high, potentially critical impact. We mitigate the

penalties for non-compliance are increasing signiﬁcantly and could

and have negative ﬁnancial and operational consequences.

the developments and evaluating the actual exposure to these risks.

risk by working with well-established external partners such as tax,

potentially harm our business. The ad pepper Group has set up working

This includes participation in industry events, gaining information from

legal and audit advisors in all countries we are operating, as well

groups in close cooperation with its external data protection ofﬁcer

analysts and research ﬁrms as well as creating business cases for new

as building in-house capabilities through training and qualiﬁcation

to continuously identify adjustment needs to ensure compliance with

product developments.

measures for existing staff.

GDPR requirements. Nevertheless, the security measures which have

RISK APPETITE

been or will be implemented may not be effective, and ad pepper’s

The ad pepper Group has a track record of identifying market changes

systems may be vulnerable to theft, loss, damage or interruption from a

early and investing into winning products and services ahead of time.

number of potential sources or events, including unauthorised access or

We will, however, not pursue growth at all costs and expect sufﬁcient

security breaches, cyber-attacks, computer viruses, power loss, or other

margins. We will primarily pursue organic growth strategies to meet

This section highlights those risks that the Group is willing to take,

disruptive events. The ad pepper Group may not have the resources or

our growth objectives. We aim for sufﬁcient operating margins

as well as those that are unacceptable. It includes a series of risk

technical sophistication to anticipate or prevent rapidly evolving forms

whilst protecting the long-term viability of the Group. In general,

assertions which are aligned to our strategy, together with the risk

of cyber-attacks.

management’s risk appetite in this ﬁeld is moderate.

parameters within which we expect to work. The Group operates in

markets with high growth potential that are subject to volatility and

Moreover, GDPR not only imposes new compliance obligations

In the ﬁeld of ﬁnancial risks, management addresses the low

intense competition. We will pursue ambitious growth targets and we

regarding the handling of personal data, it has also signiﬁcantly

proﬁtability risk mainly through transparency and the permanent

are willing to accept certain levels of risk to increase the likelihood

increased ﬁnancial penalties for non-compliance. Failure to comply

review process in connection with monthly results, forecasting and

of achieving or exceeding our strategic objectives, subject to the

with GDPR may lead to regulatory enforcement proceedings, which

budgeting. In the event of M&A, a dedicated programme management

parameters below.

can result in monetary penalties of up to 20 percent of worldwide

team will be established for the accelerating shareholder value

revenue, orders to discontinue certain data processing operations,

creation transformation. Through strong due diligence processes

The Board’s appetite for risk varies depending on the risk type. The

private lawsuits, or reputational damage. If any person, including any

and closely managed integration processes, we seek to reduce the

Group measures risk by estimating the potential for loss of proﬁt, staff

of our employees, negligently disregards or intentionally breaches

probability of M&A-related risk. Currency risks, on the other hand,

turnover and reputational damage. The Board has a low tolerance

our established controls with respect to client or ad pepper data,

are sought to be minimised through natural hedging by increasing the

for ﬁnance- and compliance-related risk. Conversely, it has a higher

or otherwise mismanages or misappropriates that data, we could

Company’s cost base in EUR. As far as political instability, in general,

tolerance for operational and strategic risk.

be subject to signiﬁcant litigation, monetary damages, regulatory

is concerned, the breadth of our service portfolio and our geographic

04.5

RISK REPORT

EVALUATION OF RISK

The following overview table shows a summary of risk type and

In the past ﬁnancial year, the ad pepper Group and its external data

respective risk appetite:

privacy ofﬁcer worked closely to ensure fulﬁlment of the obligations

MANAGEMENT SYSTEM

imposed by the European legislator through the GDPR. Regular

EFFECTIVENESS

meetings were held and results presented to the Board of Directors as

well as the Supervisory Board.

Risk category

Risk

Appetite

The ad pepper Group operates an information protection management

The ad pepper Group’s long-term strategy is focused on creating value

Operational risk Infrastructure risk

Moderate

system based on ISO 27001 comprising security guidelines as well

for our shareholders and stakeholders through proﬁtable growth. In

as organisational and technical measures to prevent and address IT

Technology risk

Moderate

implementing this strategy, the Company has evaluated the relevant

security incidents. Also in 2023, ad pepper Group offers regular cyber

Cybercrime, hacking, identity

Low

operational, strategic, ﬁnancial and compliance risks as well as the

security awareness trainings for all Group staff due to higher frequency

theft and risk of fraud

risks and opportunities of future market trends for e-commerce in

of so-called fake-president-fraud attempts. The Group repeatedly

general and for digital advertising providers in particular. The Board

Intellectual property rights risk Low

pointed out that no employees, including Board of Directors members,

of Directors is responsible for identifying and managing risks with

are allowed to ask for payments/money transfers via email and nobody

Sustainability

Moderate

appropriate measures. Signiﬁcant issues are also reviewed with

in the Group is allowed to circumvent the four-eyes-principle. As

Strategic risk

Personnel risk

Low

the Supervisory Board through the two-tier board structure. Internal

mistakes are always possible, the Company is aware that there is a

controls have a high priority and are continuously assessed and further

Market risk

Low

risk that an employee might execute a payment within the maximum

improved. Separation between executive and controlling functions and

available overdraft limit.

Dependency risk

Moderate

compliance with directives and operating instructions are an integral

Platform risk

Moderate

part of the internal control system and no risk with a signiﬁcant impact

were identiﬁed. The risk management and internal control systems,

Financial risk

Low proﬁtability

Low

however, do not provide absolute assurance that errors, fraud losses,

Risks of our M&A strategy

Low

or unlawful acts will not occur. During the 2023 ﬁnancial year, no

OPPORTUNITIES AND OUTLOOK

Energy supply risk

Low

signiﬁcant shortcomings were found in the internal risk management

and control system, and no risk with a signiﬁcant impact were

Currency risk

Moderate

identiﬁed. From a current perspective, we foresee no risks that, even in

Tax risk

Low

conjunction with other risks, could threaten the continued existence of

2023 was a difﬁcult year impacted by volatile macro conditions and,

New accounting standards

Low

the ad pepper Group. Please also refer to the disclosure on page 120 in

consequently, cautious spending from clients, particularly those in the

the Consolidated Financial Statements.

ad agents and ad pepper business. While it is early in the year, we are

Liquidity and cash ﬂow risks

Low

not expecting 2024 to show signiﬁcant macro-economic improvement,

Working capital risk

Moderate

We are convinced that risk management has to be part of the mindset

and client caution on marketing spend will likely persist, although not

Capital risk

Low

and working methods of our staff, and retaining control is of prime

at last year’s level given interest rates are likely to fall over time. At

importance to us. The Company continued to work on optimising its risk

the same time, initial indications are for an improvement in our client’s

Compliance risk Governance risk

Low

management and internal control systems in 2023 while acknowledging

appetite for booking campaigns with us and ﬁrst pitches could be won

Data risk

Low

that such systems cannot offer absolute assurance against errors

in our favour. In these unpredictable times, we are therefore focused on

Violations of other legal

Low

of material importance. The Board of Directors is conscious that

positioning the Company for medium term growth, improving our cost

requirements

the Company does not yet have an internal audit function and has

structure and proﬁtability as well as fostering our relationships with

discussed this with the Supervisory Board. After an in-depth discussion

our clients.

the Board of Directors and the Supervisory Board concluded that

the Company does not currently require an internal audit function,

although this may change in future depending on further Company

growth. From its evaluations, the Board of Directors concludes that

the risk management system as well as the control of the business

processes and the internal control within the Company are sufﬁcient,

professional, appropriate and effective. The Board of Directors is of

the opinion that the risk management system with its controls and

processes provides an adequate level of assurance on the reliability

of ﬁnancial information and control information in accordance with

relevant laws and regulations.

04.6

RESPONSIBILITY

STATEMENT

04.6

RESPONSIBILITY STATEMENT

In accordance with the EU Transparency Directive, as incorporated

in Chapter 5.1A of the Dutch Financial Supervision Act (Wet op het

ﬁnancieel toezicht), the Board of Directors declares that, to the best of

its knowledge:

• The Consolidated Financial Statements for the year ended 31

December 2023 give a true and fair view of the assets, liabilities,

ﬁnancial position and proﬁt or loss of ad pepper media International

N.V. and its consolidated Companies.

• The report of the Board of Directors gives a true and fair view of the

position as of the balance sheet date and the state of affairs during

the 2023 ﬁnancial year of ad pepper media International N.V. and

its afﬁliated companies, of which the data has been included in the

Consolidated Financial Statements.

• The report of the Board of Directors describes the principal risks

that ad pepper media International N.V. faces.

Board of Directors

ad pepper media International N.V.

Dr Jens Körner, CEO

Nuremberg, 10 April 2024

CONSOLIDATED

FINANCIAL STATEMENTS

05 CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

1ꢀ/ꢀ1 -

31ꢀ/ꢀ12ꢀ/ꢀ2023

31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Gross sales¹

85,988

98,229

[6]

Media cost²

-64,239

-73,361

[8]

Revenue

21,749

24,868

[5]

Cost of sales

-873

-1,164

[8]

Gross profit

20,876

23,704

Selling and marketing expenses

-14,867

-16,638

[9]

General and administrative expenses

-7,785

-7,164

[10]

Other operating income

966

937

[11]

Other operating expenses

-184

-651

[12]

Operating profit

-994

187

Financial income

210

[13]

1ꢀ/ꢀ1 -

31ꢀ/ꢀ12ꢀ/ꢀ2023

31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Financial expenses

-46

-192

[13]

Share of profit of an associate

199

[4]

Income before taxes

-631

Income taxes

-68

-306

[14]

Net income

-699

-250

attributable to shareholders of the parent company

-944

-893

attributable to non-controlling interests

245

643

Basic and diluted earnings per share on net income for the

year

attributable to shareholders of the parent company

-0.05

-0.04

[15]

Weighted average number of shares outstanding (basic and

diluted)

20,676,531

20,278,249

[15]

Gross sales represent the total amount billed and billable to clients by the Group, net of discounts, VAT and other sales-related taxes. Disclosure of gross revenue information is not

required under IFRS; however, it is voluntarily disclosed from 1 January 2018 onwards in the Consolidated Income Statement as management has concluded that the information is useful for users

of the financial statements. Please refer to Note [6].

Media cost relates to payments made to suppliers of ad inventory (commonly referred to as media buys and publishers). Disclosure of media cost information is not required under IFRS;

however, it is voluntarily disclosed from 1 January 2018 onwards in the Consolidated Income Statement as management has concluded that the information is useful for users of the financial

statements. Please refer to Note [8].

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2023 1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2022

kEUR

Net income

-699

-250

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Currency translation differences

Revaluation of listed debt securities

-15

Other comprehensive income, net of tax

Total comprehensive income

-640

-237

Attributable to non-controlling interests

266

662

Attributable to shareholders of the parent company

-906

-899

CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS

31ꢀ/ꢀ12ꢀ/ꢀ2023

31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Non-current assets

[16],

Intangible assets

168

374

[17]

Property, plant and equipment

173

230

[17]

Right-of-use assets

1,184

1,318

[42]

Investment in associate

3,687

[4]

Other financial assets

249

184

[19]

Deferred tax assets

183

Total non-current assets

5,644

2,185

Current assets

Securities and deposits with maturity over three months

3,523

6,076

[20]

31ꢀ/ꢀ12ꢀ/ꢀ2023

31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Trade receivables

13,124

17,568

[21]

Other receivables

400

309

[22]

Income tax receivables

310

549

[23]

Other financial assets

258

[24]

Cash and cash equivalents

19,842

17,008

[25]

Total current assets

37,297

41,769

Total assets

42,941

43,954

CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY AND LIABILITIES

31ꢀ/ꢀ12ꢀ/ꢀ2023

31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Equity attributable to shareholders of the parent company

Issued capital

1,160

1,075

[26]

Share premium

67,173

63,782

[27]

Reserves

-50,669

-50,367

[28]

Total

17,664

14,490

Non-controlling interests

1,217

1,176

[29]

Total equity

18,881

15,666

Non-current liabilities

Other liabilities

822

840

[30], [42]

Total non-current liabilities

822

840

Current liabilities

Trade payables

17,657

20,836

[31]

Contract liabilities

382

465

[32]

31ꢀ/ꢀ12ꢀ/ꢀ2023

31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Other liabilities

1,990

2,231

[33], [41]

Other financial liabilities

3,006

3,551

[34], [42]

Income tax liabilities

203

365

[14]

Total current liabilities

23,238

27,448

Total liabilities

24,060

28,288

Total equity and liabilities

42,941

43,954

CONSOLIDATED STATEMENT OF CASH FLOWS

1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2023 1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Net income

-699

-250

Adjustments for:

Depreciation and amortisation

1,018

1,088

[16], [17], [42]

Gainꢀ/ꢀloss on sale of fixed assets

-6

[11], [12]

Share-based compensation

235

-76

[39]

Gainꢀ/ꢀloss on sale of securities and other investments (after bank

charges)

-2

120

[13], [18], [20]

Other financial income and financial expenses

-163

Share of profit of an associate

-199

Income taxes

306

[14]

Income from the release of accrued liabilities

-1,016

-1,094

[11], [38]

Other non-cash expenses and income

-25

386

Gross cash flow

-790

545

1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2023 1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Change in trade receivables

4,362

1,303

[12], [21]

Change in other assets

-21

Change in trade payables

-2,287

1,583

[31]

Change in other liabilities

-107

-391

Income taxes received

476

Income taxes paid

-578

-1,073

Interest received

202

Interest paid

-46

-77

1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2023 1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Net cash flow fromꢀ/ꢀused in operating activities

1,239

1,931

Purchase of intangible assets and property, plant and equipment

-114

-219

[16], [17]

Proceeds from sale of intangible assets and property, plant and

equipment

Proceeds from sale of securities and maturing fixed deposits

6,085

1,935

Purchase of securities

-3,521

-5,000

Net cash flow fromꢀ/ꢀused in investing activities

2,456

-3,281

Payment of lease liabilities

-595

-585

[42]

Purchase of treasury shares

-1,232

Dividends to non-controlling interests

-286

-539

[29]

Transaction costs on issue of shares*

-12

[27]

Net cash flow fromꢀ/ꢀused in financing activities

-893

-2,356

Net decreaseꢀ/ꢀincrease in cash and cash equivalents

2,802

-3,706

Cash and cash equivalents at beginning of period

17,008

20,704

1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2023 1ꢀ/ꢀ1 - 31ꢀ/ꢀ12ꢀ/ꢀ2022

Note

kEUR

Effect of exchange rates on cash and cash equivalents

Cash and cash equivalents at end of period

19,842

17,008

[25]

* in conjunction with the investment in solute Holding GmbH & Co. KG. For further information please refer to Note [4].

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 2023

Balance at Profit for the

Other

Total

Share- Dividends Purchase of Issuance of

NCI put

Balance at

Transaction

1ꢀ/ꢀ1ꢀ/ꢀ2023

31ꢀ/ꢀ12ꢀ/ꢀ2023

period comprehensi comprehensi

-based

treasury

liability

costs related

ve income

payment

to issue of

share capital

Note

Issued capital (kEUR)

[26]

1,075

1,160

Share premium (kEUR)

[27]

63,782

3,403

-12

67,173

Reserves

[28]

Treasury reserve (kEUR)

-6,138

For employee stock

[39]

option plans (kEUR)

2,906

167

3,073

Accumulated deficit

(kEUR)

-43,910

-944

-44,854

Currency translation

basis of preparation

differences (kEUR)

-1,153

-1,120

Balance at Profit for the

Other

Total

Share- Dividends Purchase of Issuance of

NCI put

Balance at

Transaction

1ꢀ/ꢀ1ꢀ/ꢀ2023

31ꢀ/ꢀ12ꢀ/ꢀ2023

period comprehensi comprehensi

-based

treasury

costs related

liability

ve income

payment

to issue of

share capital

Note

Revaluation of listed

[20]

debt securities (kEUR)

-3

Other reserves (kEUR)

-2,070

437

-1,633

Subtotal reserves (kEUR)

-50,367

-944

-906

167

437

-50,669

Equity attributable to

shareholders

of the parent company

(kEUR)

14,490

-944

-906

167

3,488

-12

437

17,664

Non-controlling interests

[29]

(kEUR)

1,176

245

266

-286

1,217

Total equity (kEUR)

15,666

-699

-640

167

-286

3,488

-12

499

18,881

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 2022

Balance at Profit for

Other

Total

Share- Dividend Purchase Issuance

NCI put

Balance at

1ꢀ/ꢀ1ꢀ/ꢀ2022 the period comprehe comprehe

liability 31ꢀ/ꢀ12ꢀ/ꢀ2022

-based

of of shares

Transaction

nsive

nsive payment

treasury

costs related

income

to issue of

share capital

Note

Issued capital (kEUR)

[26]

1,075

Share premium

[27]

(kEUR)

63,782

Reserves

[28]

Treasury reserve

(kEUR)

-4,906

-1,232

-6,138

For employee stock

[39]

option plans (kEUR)

2,827

2,906

Accumulated deficit

-893

(kEUR)

-43,017

-893

-43,910

Balance at Profit for

Other

Total

Share- Dividend Purchase Issuance

NCI put

Balance at

1ꢀ/ꢀ1ꢀ/ꢀ2022 the period comprehe comprehe

liability 31ꢀ/ꢀ12ꢀ/ꢀ2022

-based

of of shares

Transaction

nsive

nsive payment

treasury

costs related

income

to issue of

share capital

Note

Currency

translation basis of

preparation

differences (kEUR)

-1,162

-1,153

Revaluation of

listed debt

[20]

securities (kEUR)

-15

-3

Other reserves

(kEUR)

-2,812

742

-2,070

Subtotal reserves

(kEUR)

-49,058

-893

-6

-899

-1,232

742

-50,367

Equity attributable

to shareholders

of the parent

company (kEUR)

15,798

-893

-6

-899

-1,232

742

14,490

Balance at Profit for

Other

Total

Share- Dividend Purchase Issuance

NCI put

Balance at

1ꢀ/ꢀ1ꢀ/ꢀ2022 the period comprehe comprehe

liability 31ꢀ/ꢀ12ꢀ/ꢀ2022

-based

of of shares

Transaction

nsive

nsive payment

treasury

costs related

income

to issue of

share capital

Note

Non-controlling

[29]

interests (kEUR)

958

643

662

-539

1,176

Total equity (kEUR)

16,756

-250

-237

-539

-1,232

837

15,666

06 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CORPORATE INFORMATION [1]

The Consolidated Financial Statements of ad pepper media International N.V. (the “Company”) for the year ended 31 December 2023 were authorised for issue by the Board of Directors on 10 April 2024. ad pepper media International N.V. is a public Company incorporated in the Netherlands , domiciled at Frankenstrasse 150 C, 90461 Nuremberg, Germany and is the ultimate parent and controlling party of the ad pepper Group (the “Group”). The Company’s shares are publicly traded under WKN 940883 (ISIN NL0000238145) on the Prime Standard of the Frankfurt Stock Exchange. The business activities of ad pepper media International N.V. involve holding investments in other entities whose objective is to market advertising space on the internet and providing services for the subsidiaries. Since its formation, the Group has been geared towards acting flexibly to meet the requirements of a whole range of different markets as an international Group.

The ad pepper Group is an international provider of interactive products and services for websites and advertisers. The Company currently markets campaigns and websites worldwide and operates from eleven offices in Europe. The ad pepper Group uses state-of-the-art technology to link thousands of small, medium, and large websites to form a top-quality advertising network with global reach and a precise focus on its target groups. In addition to a regional, national, and international marketing presence, website partners receive a large number of other important products and services such as traffic analysis and performance optimisation, provided by the ad pepper Group and its affiliated entities in a localised form.

MATERIAL ACCOUNTING PRINCIPLES [2]

Basis of preparation

The Consolidated Financial Statements have been prepared on a historical cost basis, except for employee benefit liabilities and current investments in securities, which have been measured at fair value. The Consolidated Financial Statements are presented in EUR. All values are rounded up or down to the nearest thousand euro (kEUR) or million euro (mEUR) except where indicated otherwise. Due to rounding, individual figures may not add up exactly to the totals stated. Based on the requirements of the Dutch Civil Code, a full Annual Report comprises reports from the Board of Directors and the Supervisory Board, Consolidated Financial Statements, Company Financial Statements, and other information.

This report includes the reports from the Board of Directors and the Supervisory Board, Consolidated Financial Statements, Company Financial Statements, and other information.

Statement of compliance

The Consolidated and Company Financial Statements of ad pepper media International N.V. and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), in conjunction with Part 9 of Book 2 of the Dutch Civil Code. The same accounting principles may be applied in the Company’s Financial Statement and the Consolidated Financial Statements. If the accounting principles of the Company’s Financial Statements differ from the accounting principles applied in the Consolidated Financial Statements, this is disclosed.

Basis of consolidation

The Consolidated Financial Statements comprise the financial statements of ad pepper media International N.V. and its subsidiaries as at 31 December each year. The financial statements of the subsidiaries are prepared for the same reporting year as those of the parent company, using consistent accounting policies. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. All business combinations are accounted for under the acquisition method. In accordance with this method, the purchase price has been allocated to the fair value of the interest held in the net assets of the consolidated subsidiaries at the time of acquisition.

In doing so, all identifiable assets, liabilities and contingent liabilities are recognised at fair value and measured accordingly in the consolidated balance sheet. Following adjustments to the fair values of assets acquired and liabilities assumed, any resulting positive difference is capitalised in the balance sheet as goodwill. Situations in which the fair value of net assets is greater than the purchase price paid result in a negative difference. In the event that such difference remains following reassessment of the allocation of the purchase price or determining the fair value of acquired assets, liabilities, and contingent liabilities, this is recognised immediately as income. The proportion of assets, liabilities, and contingent liabilities of the subsidiary applicable to non- controlling interest is also recognised at fair value. All intra-group balances, transactions, income and expenses, and profits and losses resulting from intra-group transactions that are recognised in assets are eliminated in full.

Consolidated Group

The subsidiaries included in consolidation are as follows:

Entity	31/ 12/ 2023	31/ 12/ 2022
	Share in percent	Share in percent
ad pepper media GmbH,
Nuremberg, Germany	100	100
ad pepper media France S.A.R.L.,
Paris, France	100	100
ad pepper media USA LLC,
New York, USA	100	100

Entity	31/ 12/ 2023	31/ 12/ 2022
	Share in percent	Share in percent
ad pepper media Spain S.A.,
Madrid, Spain	65	65
Webgains S.L.,
Madrid, Spain	65	65
Webgains Ltd.,
Bristol, United Kingdom	100	100
ad agents GmbH,
Herrenberg, Germany	60	60
ad agents AG,
Zürich, Switzerland	60	60
Webgains Italy S.r.L. SB,
Milan, Italy	100	100
Webgains GmbH,
Nuremberg, Germany	100	100
Webgains B.V.,
Amsterdam, Netherlands	100	100

Associate

Since October 2023 the Group holds a 25.64 % share in solute Holding GmbH & Co. KG. For more details, refer to Note [4].

Summary of new accounting policies

The accounting policies adopted in the preparation of the Group’s annual Consolidated Financial Statements are consistent with those followed in the preparation of the Group’s annual Consolidated Financial Statements for the year ended 31 December 2022 except for the adoption of new standards effective as of 1 January 2023. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Several amendments and interpretations apply for the first time in 2023, but do not have an impact on the Consolidated Financial Statements of the Group.

The following amendments, improvements and interpretations to existing standards require first-time application in the financial year beginning 1 January 2023:

•

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement: Disclosure of Disclosure of Accounting policies

•

Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors, Definition of Accounting Estimates

•

Amendments to IAS 12 International Tax Reform – Pillar Two Model Rules*

•

Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction

•

Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information

•

IFRS 17 Insurance Contracts

* Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates. However, this legislation does not apply to the Group as its consolidated revenue is lower than €750 million.

New amendments and interpretations requiring application in financial years beginning 1 January 2024:

•

Amendment to IAS 1 Presentation of Financial Statements- Classification of Liabilities into current and non-current. This amendment should clarify the criteria for the

classification of a liability as either current or non-current. The proposed amendments intend to

Clarify that the classification is based on the entity’s rights at the end of the reporting period, and

Make clear the link between the settlement of the liability and the outflow of resources from the entity.

The amendment is not expected to have an impact on the Group.

•

Amendment to IFRS 16 Leases: Lease Liability in a Sale and Leaseback: The amendments specify how a seller-lessee measures the lease liability arising in a sale and

leaseback transaction in a way that it does not recognise any amount of the gain or loss that relates to the right of use retained. The amendment is not expected to have an

impact on the Group.

•

Amendment to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: These amendments require an entity to provide information about the impact

of supplier finance arrangements on liabilities and cash flows. The amendment is not yet endorsed by EU and is not expected to have an impact on the Group.

New amendments and interpretations requiring application in financial years beginning 1 January 2025:

•

Amendments to IAS 21: The effects of changes in Foreign Exchange Rate: Lack of Exchangeability. The amendments specify how an entity should assess whether a currency

is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendment is not yet endorsed by EU and is not expected to have

an impact on the Group.

Significant accounting judgements, estimates and assumptions

In the application of the Group’s accounting policies, which are described below in Note [3], the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Judgements, estimates and assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date have been applied in particular to the assessment of revenue from contracts with customers (Note [5]), accrued liabilities for outstanding affiliate payments (Note [31]), incremental borrowing rates of right-of-use liabilities (Note [42]), the provision for expected credit losses of trade receivables (Note [41]), share based payments (Note [39]) and on the measurement of deferred tax assets on losses carried forward (Note [14]).

A) Judgements

Preparing the financial statements in accordance with the IFRS requires the Group management to make judgements in respect to the recognised amounts of revenue in all three operational segments. The Company assesses its revenue arrangement in its business units against specific criteria in order to determine if it is acting as principal or agent. The factors specified by IFRS 15 indicate that the Group does not control services before they are transferred to customers. Therefore, the Group determined that it is an agent in all its customer contracts and is recognising its revenue on a net basis, consequently excluding media cost owed to delivery partners from revenue and cost of sales respectively.

B) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Accrued liabilities

In measuring accrued liabilities for affiliate credits not yet disbursed in the Webgains segment, reference has been made to assumptions determined with the assistance of various controlling and reporting tools. Based on various evaluations, the ad pepper Group assesses the disbursement of credits for confirmed transactions that have not been called up more than one year after the closure of the programme as well as of credits of inactive publishers as unlikely and has reduced the accrued liability by the resultant amounts.

The provision for expected credit losses of trade receivables

An impairment analysis is performed at each reporting date using a matrix to calculate expected credit losses (ECL) for trade receivables. The provision is initially based on the Group’s historical observed default rates and potentially adjusted with forward-looking information. At every reporting date, the historical observed default rates are updated, changes in the forward-looking estimates and evidence for impairment are analysed.

Share based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield, and assumptions about them. For the measurement of the fair value of equity-settled and cash settled transactions with employees at the grant date, the Group uses a Monte Carlo simulation model. For cash-settled share-based payment transactions the liability must be remeasured at the end of each reporting period up to the date of settlement, with any changes in fair value recognised in profit or loss. The assumptions and models used for estimating fair value for share-based payment and cash-settled transactions are disclosed in Note [39].

Deferred tax assets

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available, against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits together with future tax planning strategies. Further information is presented in the note on incomes taxes (Note [14]).

Leases – Estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease contracts for offices and cars. Therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group “would have to pay”, which requires estimation when no observable rates are available. The Group estimates the IBR using the market interest rate provided by its bank.

SUMMARY OF MATERIAL ACCOUNTING POLICIES [3]

Foreign currency translation

The Consolidated Financial Statements are presented in EUR, which is the Company’s functional and presentation currency. Each entity in the Group determines its own functional currency, and items included in the financial statements of each entity are measured using that functional currency.

Transactions of foreign currencies are initially recorded at the functional currency rate applicable at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange applicable at the balance sheet date. All differences are applied as either profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate applicable on the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate applicable on the date when the fair value was determined.

As at the reporting date, the assets and liabilities of those subsidiaries that have a functional currency other than the EUR are translated into the presentation currency of ad pepper media International N.V. (EUR) at the rate of exchange applicable at the balance sheet date, and their income statements are translated at the weighted average exchange rates for the year. The exchange differences arising from the translation are applied directly to other comprehensive income (OCI). On disposal of a foreign entity, the deferred cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in the income statement.

The significant foreign currency exchange rates developed as follows:

Foreign currency	Closing	Closing	Average	Average
per EUR 1	rate	rate	rate	rate
	31/ 12/	31/ 12/	2023	2022
	2023	2022
USD	1.1114	1.0648	1.0647	1.0527
GBP	0.8706	0.8855	0.8877	0.8514
CHF	0.9302	0.9840	1.0441	1.1901

Property, plant and equipment

Property, plant and equipment are stated at historical cost, excluding the costs of day-to-day servicing, less accumulated depreciation and accumulated impairment in value. Subsequent costs are included in the asset’s carrying value or recognised as separate asset, as appropriate, only when it is probable that future economic benefits associated with the line item will flow to the Group and the cost of the item can be reliably measured. Depreciation is calculated on a straight-line basis over the useful life of the assets. The estimated useful lives of the assets are between three and ten years. An item recorded under property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognised.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. All intangible assets have finite lives and are amortised using the straight-line method over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset are reviewed at least at each financial year-end. Gains or losses arising from derecognising an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised.

Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

•

Office space 1 to 5 years

•

Cars 3 years

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment.

Investment in associates

The group holds an interest in an associate, solute Holding GmbH & Co. KG.

The financial statement of solute Holding GmbH & Co. KG is prepared for the same reporting period as the Group. The accounting policies are aligned with those of the Group. Therefore, no adjustments are made when measuring and recognising the Group’s share of the profit or loss of the investee after the date of acquisition.

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. In general, significant influence can be assumed when the interest in an associate is higher than 20 percent and lower than 50 percent of the voting rights.

The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries. The Group’s investment in its associate is accounted for using the equity method.

The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the statement of profit or loss outside operating loss and represents profit or loss after tax and non- controlling interests in the subsidiaries of the associate.

Under the equity method, the investment in an associate is initially recognized at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets or the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested separately.

The statement of profit or loss reflects the Group’s share of the results of operations of the associate. Any changes in OCI are presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate. Once a year, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and it’s carrying value and then recognises the loss, if any, within “Share of profit of an associate” in the statement of profit or loss.

Upon gaining of control over the associate, the Group fully consolidates the subsidiary and accounts the business combination under the acquisition method. In accordance with this method, the purchase price is allocated to the fair value of the interest held in the net assets of the consolidated subsidiaries at the time of acquisition.

Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Group’s lease liabilities are included in other long-term and short-term financial liabilities.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of office space and cars (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option).

It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be of low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.

Research and development costs

Research costs are expensed as incurred. An intangible asset resulting from the development of an individual project is only capitalised when it cumulatively meets the criteria for recognition stipulated in IAS 38. During the period of development, the asset is tested for impairment annually. Following the initial recognition of the development expenditure, the cost model is applied

requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete, and the asset is available for use.

Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that a non-monetary asset (property, plant and equipment; intangible assets, right-of-use assets) may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of the fair value of the asset or cash-generating unit less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. The valuation model is based on a discounted cash flow method.

Impairment losses are recognised in the income statement in those expense categories consistent with the function of the impaired asset. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of the recoverable amount.

A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If this is the case, the carrying amount of the asset is increased to its recoverable amount. This increased amount shall not exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised on the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase. Impairment losses recognised for goodwill are not reversed for subsequent increases in its recoverable amount.

Other receivables

Other receivables consist mainly of advance payments. Upon initial recognition, other receivables are measured at fair value. Subsequently, they are measured at amortised cost, after deduction of any write-downs. A write-down is applied when objective indications suggest that the receivable may not be fully collectible.

Investments and other financial assets

Financial assets within the scope of IFRS 9 Financial Instruments are classified and subsequently measured at fair value through profit or loss, amortised cost, or fair value through OCI, as appropriate. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are “solely payments of principal and interest (SPPI)” on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at instrument level. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

For purposes of subsequent measurement, financial assets are classified in four categories:

•

Financial assets at amortised cost (debt instruments)

•

Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)

•

Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

•

Financial assets at fair value through profit or loss

Currently the most relevant to the group categories are:

•

Financial assets at amortised cost (debt instrument), which includes trade receivables

•

Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

Financial assets at fair value through other comprehensive income are carried in the statement of financial position at fair value with net changes in fair value recognised in the other comprehensive income. This category includes listed debt investments.

A financial asset is primarily derecognised (i.e., removed from the Group's consolidated statement of financial position) when:

•

The rights to receive cash flows from the asset have expired

•

The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third

party under a 'pass-through' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither

transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Fair value

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance sheet date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current

market value of another instrument which is substantially the same; discounted cash flow analysis or other valuation models. If the fair value of an unquoted equity instrument cannot be measured reliably, it is carried at cost.

Impairment of financial assets carried at amortised cost

The Group recognises an allowance for expected credit losses (ECL) for all debt instruments not held at fair value through profit or loss. For trade receivables and contract assets, the Group applies a simplified approach in calculating ECL in line with IFRS 9. A default on receivables expected over the respective term (stage 2 of the impairment model) is determined for trade accounts receivable based on historical default rates for a respective customer portfolio, adjusted for forward-looking factors specific to the debtors and the economic environment, based on segment and geographic allocation.

When actions such as insolvency or comparable proceedings have been initiated or other substantial indications that receivables are impaired become apparent like a deterioration of the payment behaviour, the receivables are individually tested for impairment (stage 3 of the impairment model). All receivables more than 90 days overdue are tested for impairment. Impaired debts are written off when they are deemed uncollectable. In the reporting year, bad debt allowance on trade receivables was applied at a rate of 50 percent after 120 days overdue, 75 percent after 240 days overdue, and 100 percent after one year overdue. However, in certain cases the Group may also consider a financial asset to be uncollectable when external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full, before taking into account any credit enhancements held by the Group.

The carrying amount of the asset is reduced through use of an allowance account. The amount of the loss is recognised in profit or loss. If the amount of the impairment loss decreases in a subsequent period and the decrease can be related objectively to an event occurring after the recognition of impairment, the impairment loss previously recognised is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

Treasury shares

The Group’s own equity instruments that are repurchased (treasury shares) are deducted from equity. No gain or loss is recognised in the income statement on the purchase, sale, issue, or cancellation of the Group’s own equity instruments.

Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at banks and in hand and short-term highly liquid deposits with a maturity of three months or less, that are held for the purpose of meeting short-term cash commitments and are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value. For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above.

Provisions and accrued liabilities

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation although the respective due date or amount is still uncertain. If the effect of the time value of money is material, long-term provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.

Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Accrued liabilities are obligations to pay for goods or services received or delivered that have neither been paid, nor invoiced by the suppliers. Even though estimates are occasionally required to determine the amount or timing of accrued liabilities, the degree of uncertainty is generally much lower than for provisions. Accrued liabilities are recognised under trade payables.

Contract liabilities

A contract liability is recognised if a payment is received, or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the contract.

Current financial liabilities

Current financial liabilities are liabilities, that must be settled in cash or other financial assets. Based on their nature, financial liabilities are measured at amortised costs and are derecognised upon settlement or cancellation.

The Company accounts for a written call / put option over the 35 percent non-controlling interest in ad pepper media Spain S.A. by considering a financial liability with the present value of the exercise price of the option. The Company assessed that the prerequisites for the transfer of the shares are fulfilled at the balance sheet date and therefore assumes the exercise of the put option by the holder in the exercise window during the coming financial year, classifying the liability as current. The attributable changes in the value of the financial liability are recognised in the equity component “other reserves”.

Share-based payment transactions

Equity-settled transactions

Employees (including senior executives) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (“equity-settled transactions”). The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are granted. The fair value is determined using an appropriate pricing model, further details of which are given in Note [39]. The cost of equity-settled transactions (remuneration cost) is recognised, together with a

corresponding increase in equity, over the period in which the performance and / or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the “vesting date”).

The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share (further details are provided in Note [15]).

Cash-settled transactions

Board of Directors are granted share appreciation rights (SAR’s), settled in cash. The options may be exercised over a period of four years at 25 percent each year, but at the earliest one year after being granted.

A liability is recognised and measured initially and at the end of each reporting period until settled, at the fair value of the share appreciation right, by applying an option price model, taking into account the terms and conditions on which the share appreciation rights were granted, and the extent to which the director has rendered services to date. Fair value changes are recognised in employee benefits expense included in the general & administrative costs.

Revenue from contracts with customers

The Group is in the business of providing performance marketing services, in which third parties provide services to its customers. When another party provides goods or services to its customers, the Group determines whether it is a principal or an agent in these transactions by evaluating the nature of its promise to the customer. The Company has concluded that it is acting as an agent in all of its revenue arrangements, as its role is restricted to arranging a third party that supplies ad inventory to deliver the ad to the end customer. Consequently, the Group records revenue at the net amount that it retains for its services, which is limited to campaign management, while media cost for ad inventory used is excluded from the revenue definition. For further explanations, please refer to Note [2].

Revenue from contracts with customers is recognised when the service is rendered. Depending on the requirements of the specific product, this usually occurs when successful transactions result from user action (CPA), ad impressions are generated (CPC) or personal data is provided (CPL). Gross sales represent the total amount billed and billable to clients by the Group, net of discounts, VAT and other sales-related taxes. Disclosure of gross sales information is not required under IFRS, however, it is voluntarily disclosed in the Consolidated Income Statement, as management has concluded that the information is useful for users of the financial statements.

As all performance obligations have an original expected duration of less than one year and meet the requirement of the right to invoice practical expedient in IFRS 15.B16, the Company does not disclose the amount of the remaining performance obligations.

Rendering of services

Webgains

Revenue in this segment is generated by placing the merchant’s advertising on publishers’ websites (affiliate marketing). By using the Webgains technology platform, appropriate publishers are selected for placement of the advertisements on websites likely to drive traffic back to the merchant’s website and consequently enhance the merchant’s transaction values. The merchant pays us on a cost-per-action basis (CPA), which means that the merchant only pays when successful transactions result from the traffic. The price billed to the merchant consists of an override and a commission. The override is considered the amount the Group is entitled to for its services.

The commission is the amount paid to our publishers and is excluded under IFRS 15 from the revenue definition. Consequently, commission to publishers is also not included in the Group’s cost of sales. The contractual agreement provides the customer with a recall period, where every occurred transaction can be cancelled within a certain period.

Depending on the industry the transaction occurred in, the recall periods range from 30 days in the fashion and beauty industry up to 360 days for insurance, travel and mobile sales. Based on historical data, the Group calculates at year-end the amount to be recognised as return assets and refund liabilities for transactions in the recall period.

ad pepper

Revenue in the ad pepper segment is generated by marketing internet advertising space. Advertising customers book units (ad impressions, ad clicks, registrations, mail-outs, transactions) via the Company, and these are then supplied over a period defined by the customer. ad pepper customers pay us on the basis of cost per click (CPC), cost per lead (CPL) or cost per impression (CPM). All of the three billing methods consist of media costs owed to ad pepper’s delivery partners and a service charge as an amount levied by the Group for its services. The media cost is the amount paid to the delivery partners and is excluded under IFRS 15 from the revenue definition. Consequently, media costs are also not included in the Group’s cost of sales.

In cases in which the campaign starts before the balance sheet date and lasts beyond this date, revenue is accounted proportionately based on the stage of completion at the end of the reporting period. Stage of completion is determined as the proportion of the costs incurred until the end of the reporting period in the total costs of the campaign, which can be reliably estimated.

ad agents

Revenue in the ad agents segment is mainly generated by providing search engine advertising. In these contractual agreements with clients where search engine providers are contracted by ad agents, and on its behalf the amounts billed to customers consist of media costs owed by ad agents to the search engine providers and a fee as a percentage of the media cost, the Group levies for its services. In other contractual arrangements, the search engine provider enters a direct contractual agreement with ad agents’ client, so that media costs are not invoiced by ad agents but are charged from search engine provider to client directly. In this case, the amount billed to the customer consists only of the fee as a percentage of the media cost.

In both cases, the Group is only entitled to the service charge as a percentage of the media budget. Media costs billed to clients and owed to search engine providers for indirect billing agreements do not constitute revenue according to IFRS 15 and are consequently excluded from cost of sales.

Interest income

Interest income is recognised as it accrues using the effective interest rate method.

Current income tax

Current taxes are determined on the basis of annual earnings with due reference to national tax rates and tax legislation in the various tax jurisdictions valid as of the balance sheet date. Current income tax relating to items recognised directly in other comprehensive income is only recognised there and not in the income statement.

Deferred income tax

Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences, except for goodwill, whereon the recognition is not permitted. Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available

against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Deferred income tax relating to items recognised directly in other comprehensive income is only recognised there and not in the income statement. Deferred income tax assets and deferred income tax liabilities are offset if there is a legally enforceable right to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

BUSINESS COMBINATIONS & INVESTMENTS IN AN ASSOCIATE [4]

As in 2022, no business combinations occurred in the 2023 financial year.

On 2 October 2023 the Group signed a purchase agreement of a 25.64 percent interest in solute Holding GmbH & Co. KG, Hanover, Germany, which is the Holding Company of solute GmbH, an operator of price comparison portals in Germany. Significant influence over the associate was obtained on 30 October 2023, the registration day of ad pepper as shareholder. From this day onward ad pepper can actively participate in all shareholders meetings of solute Holding GmbH & Co.KG.

ad pepper and solute operate complementary business models with adjacent technical capabilities, customer relationships and geographic footprints. The objective of the transaction is to create a dynamic, innovative and well-capitalized listed market leader in performance marketing and digital marketplaces (price comparison).

Solute Holding GmbH & Co. KG is a private entity that is not listed on any public exchange. The Group’s interest in solute Holding GmbH & Co. KG is accounted for using the equity method in the consolidated financial statements. There are no restrictions arising from agreements, regulatory stipulations or contract amongst investors who exert significant influence on the associate.

The following table illustrates the summarised financial information of the Group’s investment in solute Holding GmbH & Co. KG. The associate is not subject to any contingent liabilities or restrictions.

	31 / 12 / 2023
	kEUR
Current assets	10,734
Non-current assets	8,975
Non-current liabilities	462
Current liabilities	4,438
Provisions	1,391
Equity	13,418
Groups Share in Equity (25.64 %)	3,440
Group’s carrying amount of the investment	3,687

	1 / 1 - 31 / 12 / 2023
	kEUR
Revenue	35,537
Cost of Sales	-25,893
Gross profit	9,644

	1 / 1 - 31 / 12 / 2023
	kEUR
Selling and marketing expenses	-2,277
General and administrative expenses	-6,649
Other operating income	1,116
Other operating expenses	-218
Finance income	90
Finance expense	-79
Profit before tax	1,627
Income taxes	-444
Profit of the period	1,183
Other comprehensive income	0
Total comprehensive income of the period	0
Group’s share of profit for the period	199

REVENUE FROM CONTRACTS WITH CUSTOMERS [5]

Disaggregated revenue information

The following is a breakdown of the Group’s revenue from contracts with customers, which is based on the invoicing country:

	For the year ended 31 December 2023
Segments	ad pepper	Webgains	ad agents	Total
	kEUR	kEUR	kEUR	kEUR
Geographical markets
Germany	926	2,640	5,569	9,134
United Kingdom	0	6,135	0	6,135
Spain	1,366	1,992	0	3,359
Other*	0	1,201	1,920	3,121
Revenue	2,292	11,968	7,489	21,749

	For the year ended 31 December 2022
Segments	ad pepper	Webgains	ad agents	Total
	kEUR	kEUR	kEUR	kEUR
Geographical markets
Germany	1,546	2,815	7,044	11,405
United Kingdom	0	7,824	0	7,824
Spain	1,378	1,714	0	3,092
Other*	0	874	1,673	2,547
Revenue	2,924	13,227	8,717	24,868

*includes Switzerland, France, Italy and the Netherlands.

Contract balances

	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
Contract liabilities	382	465

Contract liabilities include short-term advances received from customers during 2023 to render SEA (Search Engine Advertising) services in the ad agents segment.

Performance obligations

Information about the Group’s performance obligations is summarised below:

ad pepper

Service orders received from clients in accordance with framework agreements are generally short term in nature. The performance obligation is satisfied over time and usually occurs when the user provides personal data or when an impression is generated on the user’s device. Revenue therefore accrues each time the ad is displayed or personal data is entered by the user. Clients are invoiced monthly for the service delivered during the month based on the agreed transaction price multiplied by the delivered amounts. Payment is generally due within 14 days of invoicing.

As all ads are placed on third-party ad inventory properties, the Group has no control over the advertising inventory before it is transferred to its customers, with the Group acting as an agent in all contractual arrangements.

ad agents

Service orders received from clients in accordance with annual framework agreements are generally short term in nature. The performance obligation resulting from each service order is satisfied over time and occurs when the user clicks on the phrase created and placed by ad agents on search engines. The customer pays on a CPC basis, which means that the customer pays ad agents only when a user clicks on the ad in the search engine. Clients are invoiced monthly for the services provided during the month as a percentage fee of the media budget used during the month or in case of indirect billing contracts as media budget used for third-party delivery partners plus a percentage fee of the media budget. The payments are due within 0 to 90 days from invoicing.

As all ads are placed on third-party ad inventory properties, the Group has no control over the advertising inventory before it is transferred to our customers, with the Group acting as an agent in all contractual arrangements.

Webgains

The performance obligation is satisfied over time and occurs when successful transactions result from traffic. Contracts with clients are generally concluded for periods of 12 months or less. The invoicing is transaction-based and is carried out monthly.

The contract provides the customer with a recall period, in which any transaction can be cancelled within a certain period. Depending on the industry, the recall periods range from 30 days in the fashion and beauty industry and up to 360 days for insurance, travel and mobile sales. Based on historical data, at year-end the Group calculates the amount to be recognised as return assets and

refund liabilities for transactions in the recall period. As at 31 December 2023 and 31 December 2022, the Group’s calculation resulted in amounts that have no material impact on the revenue recognised in the financial year.

SEGMENT REPORTING [6]

IFRS 8 requires entities to report financial and descriptive information on their reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specific criteria. Operating segments are components of an entity for which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance.

Generally, financial information must be reported on the same basis as it is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments. Financial information reported to the Group’s chief operating decision-maker for the purposes of resource allocation and assessment of segment performance is focused on the category Segment profit, reflecting the EBIT (Earnings before interest and taxes) or EBITDA (Earnings before interest, taxes, depreciation and amortisation) earned by each segment as stipulated by the IFRS.

This is the measure reported to the chief operating decision-maker for the purposes of resource allocation and assessment of segment performance. The basis of accounting for intersegment transactions is the “dealing at arm’s length” principle.

Financial year 2023	ad pepper	Webgains	ad agents	Admin	Intersegm	Group
					ent
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Gross sales*	4,643	55,547	25,797	186	-186	85,988
Thereof external	4,643	55,547	25,797	0	0	85,988
Thereof intersegment	0	0	0	186	-186	0
Revenue	2,292	11,968	7,489	186	-186	21,749
Thereof external	2,292	11,968	7,489	0	0	21,749

Financial year 2023	ad pepper	Webgains	ad agents	Admin	Intersegm	Group
					ent
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Thereof intersegment	0	0	0	186	-186	0
Gross profit	2,056	11,477	7,157	186	0	20,876
Expenses (including cost of sales)	-2,886	-10,375	-7,516	-2,151	186	-22,743
Thereof amortisation and	-111	-467	-236	-204	0	-1,018
Thereof other non-cash	-162	0	0	-47	0	-209
Thereof other non-cash	91	1,137	19	4	0	1,251
EBITDA	-483	2,060	209	-1,762	0	24
Operating profit	-593	1,593	-27	-1,967	0	-994
Financial income	0	19	4	236	-48	210
Financial expenses	-12	-55	-15	-11	48	-46
Share of profit of an associate	0	0	0	199	0	199
Income taxes	-59	-95	86	0	0	-68
Net income for the year	-665	1,461	47	-1,542	0	-699

Financial year 2022	ad pepper	Webgains	ad agents	Admin	Intersegment	Group
					elimination
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Gross sales*	6,066	64,009	28,155	243	-244	98,229
Thereof external	6,066	64,009	28,154	0	0	98,229
Thereof intersegment	0	0	1	243	-244	0
Revenue	2,924	13,227	8,718	243	-244	24,868
Thereof external	2,924	13,227	8,717	0	0	24,868
Thereof intersegment	0	0	1	243	-244	0
Gross profit	2,592	12,496	8,375	243	-1	23,704
Expenses (including cost of sales) and other income	-3,172	-12,801	-7,634	-1,317	243	-24,681
Thereof amortisation and depreciation	-140	-445	-273	-230	0	-1,088
Thereof other non-cash expenses	-7	-483	0	-55	0	-545
Thereof other non-cash income	209	984	7	53	0	1,254
EBITDA	-108	871	1,358	-845	-1	1,275
Operating profit	-248	425	1,085	-1,074	-1	187
Financial income	0	16	0	60	-15	62
Financial expenses	-7	-31	-17	-152	15	-192

Financial year 2022	ad pepper	Webgains	ad agents	Admin	Intersegment	Group
					elimination
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Income taxes	-99	-27	-180	0	0	-306
Net income for the year	-355	383	888	-1,166	-1	-250

*Gross sales represent the total amount billed and billable to clients by the Group, net of discounts, VAT and other sales-related taxes. Disclosure of gross revenue information is not required under IFRS; however, it is voluntarily disclosed from 1 January 2018 onwards in the Consolidated Income Statement since management has concluded that the information is useful for users of the financial statements.

Geographical information

The Group operates in three principal geographical areas – the United Kingdom, Germany and Spain. The Group also operates in Switzerland, France, Italy and the Netherlands, which are grouped in the table below under “other”. The Group’s revenue from continuing operations from external customers and information about its non-current assets by geographical locations are detailed below whereby non-current assets are shown exclusive of financial instruments and investments.

	Revenue from external		Non-current assets		Investment in an associate
	customers
	Year ended	Year ended	2023	2022	2023	2022
	2023	2022
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Germany	9,134	11,405	420	775	3,687	0
United Kingdom	6,135	7,824	876	795	0	0
Spain	3,359	3,092	164	244	0	0

	Revenue from external		Non-current assets		Investment in an associate
	customers
	Year ended	Year ended	2023	2022	2023	2022
	2023	2022
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Other	3,121	2,547	64	108	0	0
Total	21,749	24,868	1,524	1,922	3,687	0

NOTES TO THE INCOME STATEMENT [7]

The income statement was prepared using the function of expense method. The expenses include personnel expenses of EUR 16,423k (2022: EUR 17,533k) as well as depreciation and amortisation of EUR 1,018k (2022: EUR 1,088k), thereof EUR 638k (2022: EUR 570k) depreciation on right-of-use assets. Amortisation of intangible assets is included in selling expenses EUR 249k (2022: EUR 312k) and administration expenses EUR 22k (2022: EUR 35k). The personnel expenses include the employer’s contribution to state pension schemes amounting to EUR 716k (2022: EUR 1,003k), which must be disclosed as employer’s contribution to a defined contribution plan.

MEDIA COST AND COST OF SALES [8]

Media cost	2023	2022
	kEUR	kEUR
ad pepper	2,351	3,142
ad agents	18,309	19,437
Webgains	43,579	50,782
Total media cost	64,239	73,361
COS	873	1,164
Total	65,112	74,525

Cost of sales predominantly comprises third-party data center services, professional fees, and other purchased services.

SELLING AND MARKETING EXPENSES [9]

This item comprises all costs associated with attracting customers and orders. The expenses are broken down as follows:

	2023	2022
	kEUR	kEUR
Personnel costs	12,008	13,165
Facility costs	80	96
Advertising and sales promotion	330	337
Professional and other services	927	1,236
General operating costs (communication, travel, other supplies)	1,248	1,475
Other	274	329
Total	14,867	16,638

GENERAL AND ADMINISTRATIVE EXPENSES [10]

The expenses are broken down as follows:

	2023	2022
	kEUR	kEUR
Personnel costs	4,415	4,369
Depreciation on right-of-use assets	606	548
Other facility costs	570	559
Professional and other services	1,482	947
General operating costs (communication, travel, other supplies)	647	689
Other	65	52
Total	7,785	7,164

OTHER OPERATING INCOME [11]

Other operating income consists of the following:

	2023	2022
	kEUR	kEUR
Gains on sale of property, plant and equipment	6	0
Income from the release of accrued liabilities	865	894
Other	95	42
Total	966	937

Income from the release of accrued liabilities includes an amount of EUR 706k (2022: EUR 735k) relating to reversals of non-disbursed affiliate credits in the Webgains segment that the ad pepper Group believes are unlikely to be paid out and reversals of EUR 159k in connection with time-barred claims (2022: EUR 159k).

OTHER OPERATING EXPENSES [12]

Other operating expenses consist of the following:

	2023	2022
	kEUR	kEUR
Losses on sale of property, plant and equipment	0	54
Foreign exchange losses	82	35
Expected credit losses on trade receivables	82	448
Other	20	114
Total	184	651

FINANCIAL RESULT, NET [13]

Net financial result consists of the following:

	2023	2022
	kEUR	kEUR
Interest income	208	62
Realised gains from securities measured at ”fair value through other comprehensive income“*	2	0
Financial income	210	62
Interest expenses	-6	-40
Interest on lease liabilities	-40	-33
Losses from sale of securities	0	-115
Other	0	-4
Financial expenses	-46	-192
Net financial result	164	-130

*net of expenses related to the trade of securities amounting to EUR 4k

INCOME TAXES [14]

Income tax expenses	2023	2022
	kEUR	kEUR
Current income tax expenses	-172	-464
Deferred income tax income / (expense)	104	158
Total	-68	-306

The current income taxes reported relate to the taxes paid or payable by individual local entities. The calculation of the deferred taxes was based on the country-specific tax rates. Due to the existing

unused tax losses in ad pepper media International N.V., ad pepper media France S.A.R.L. and ad pepper media USA LLC, deferred tax assets of EUR 10,954k (2022: EUR 10,551k) were calculated on

the basis of the unused tax losses of EUR 36,046k (2022: EUR 34,416k). Deferred tax assets from unused tax losses were recorded to the extent that it is probable that future taxable profit is available against which they can be utilised within a foreseeable planning period.

Thus, an amount of deferred tax assets of EUR 165k (2022: EUR 76k) has been recognised for the tax loss carry forwards. All of the available tax loss carry forwards are non-expiring. The deferred

tax asset for the tax loss carry forward is calculated with the local substantially enacted future tax rate on the budgeted taxable income for the following financial year.

In addition to the unused tax losses, the following significant deferred tax liabilities result from temporary differences:

Deferred tax liabilities	2023	2022
	kEUR	kEUR
Other	0	0
Total	0	0

Changes in deferred tax liabilities on temporary differences recognised in profit or loss amount to EUR 0k (2022: EUR 79k). The change in deferred tax assets on temporary differences recognised in profit or loss amounts to EUR 18k (2022: EUR 3k). Deferred tax assets and liabilities are netted if the Company has the legally enforceable right to set off current tax assets against current tax liabilities and if they relate to the same tax authorities and the same taxable entity.

As a result, deferred tax assets of EUR 183k (2022: EUR 79k) and deferred tax liabilities of EUR 0k (2022: EUR 0k) were recognised in the statement of financial position. Deferred tax assets and liabilities are classified as non-current. Deferred tax assets of EUR 0k (2022: EUR 0k) on tax losses are recognised for companies with a history of losses. No deferred tax liabilities were recognised as of 31 December 2023 (2022: EUR 0k) for taxes on non-distributed profits of subsidiaries. If deferred taxes were to be recognised for these temporary differences, only the source tax rates applicable in each case, where appropriate taking into account the German tax of 5 percent on the distributed dividends, would have to be applied for the computation.

ad pepper media International N.V. has its tax domicile in Germany and forms a fiscal unity with ad pepper media GmbH and Webgains GmbH. The reconciliation between expected income tax expense and actual income tax expense based on the German statutory tax rate (combined corporate income tax and trade tax on income) of 32.17 percent (2022: 32.17 percent) is as follows:

	2023	2022
	kEUR	kEUR
Expected income tax	203	28
Effect of lower tax rate in other jurisdiction	150	184
Tax-free gains	1	4
Prior year income tax	58	-7
Gains on databases sold intercompany	0	-53
Amortisation on databases sold intercompany	0	18

	2023	2022
	kEUR	kEUR
Utilisation of previously unrecognised tax losses	5	48
Current year tax losses not recognised	-525	-524
Non-deductible stock option income / (expense)	-76	-27
Deferred taxes on losses prior year	69	76
Current taxes on investment in associates	64	-
Non-tax-deductible expenses and other	-17	-53
Actual income tax expenses	-68	-306

EARNINGS PER SHARE [15]

Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The income and share data used in the computations of basic and diluted earnings per share are as follows:

	2023	2022
Net income / (loss) attributable to shareholders of the parent company in kEUR	-944	-893
Number of shares at the beginning of the period	20,257,872	20,491,197
Number of shares at the end of the period	21,951,116	20,257,872
Weighted average number of shares outstanding (basic & diluted)	20,676,531	20,278,249
Earnings per share in EUR (basic & diluted)	-0.05	-0.04

The weighted average number of shares outstanding in 2023 was calculated on a daily basis. In 2023 as in 2022, the options granted resulted in no dilution. 1,693,244 new shares in ad pepper media International N.V. have been issued in conjunction with the purchase of the 25.64 percent interest in solute Holding GmbH & Co. KG. and have been transferred as consideration of the purchase. The new issued shares are admitted for trading on the Frankfurt Stock Exchange (2022: no new shares have been issued).

No treasury shares (2022: no shares) were sold in connection with the exercise of employee stock options. Diluted earnings per share are computed based on the weighted average number of ordinary shares outstanding, including the dilutive effect of shares to be issued in the future under certain arrangements such as option plans.

NON-CURRENT ASSETS

INTANGIBLE ASSETS [16]

In 2023 and 2022, no software IT solutions were developed in-house for the Company’s own use, and therefore none were capitalised. Expenses were related to maintenance. Additions mainly relate to an amount of EUR 61k in connection with the purchase of additional software for operational and administrative purposes. Software and databases are amortised over a useful life of three to five years.

MOVEMENT SCHEDULE OF INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT [17]

	Historical cost					Accumulated depreciation / amortisation / impairment					Book value
Financial year 2023	Balance at	Additions	Disposals	Exchange	Balance	Balance at	Depreciation/	Disposals	Exchange	Balance	Financial	Previous
	1/1/2023			differenc	at	1/1/2023	amortisation		differences	at	year	year
				es	31/12/					31/12/	31/12/2023	31/12/2022
					2023					2023
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Intangible assets
Software	3,081	61	0	19	3,161	-2,709	-271	0	-14	-2,994	167	372
Brands and customer bases	644	0	0	0	644	-642	-1	0	0	-643	1	2
Total	3,725	61	0	19	3,805	-3,351	-272	0	-14	-3,637	168	374
Property, plant and equipment
Other equipment, operational and office equipment	1,128	53	-93	3	1,091	-898	-108	90	-2	-918	173	230
Total	4,853	114	-93	22	4,896	-4,249	-380	90	-16	-4,555	341	604

	Historical cost					Accumulated depreciation / amortisation / impairment					Book value
Financial year 2022	Balance at	Additions	Disposals	Exchange	Balance	Balance at	Depreciation/	Disposals	Exchange	Balance	-Financial	Previous
	1/1/2022			differenc	at	1/1/2022	amortisation		differenc	at	year	year
				es	31/12/2022				es	31/12/	31/12/2022	31/12/2021
										2022
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Intangible assets
Software	3,030	108	0	-57	3,081	-2,404	-347	0	42	-2,709	372	626
Brands and customer bases	644	0	0	0	644	-642	0	0	0	-642	2	2
Total	3,674	108	0	-57	3,725	-3,046	-347	0	42	-3,351	374	628
Property, plant and equipment
Other equipment, operational and office equipment	1,562	111	-512	-33	1,128	-1,216	-168	459	27	-898	230	346
Total	5,236	219	-512	-90	4,853	-4,262	-515	459	69	-4,249	604	974

NON-CURRENT SECURITIES [18]

Overview about debt and marketable securities:

2023	Debt	Marketable	Total
	securities	securities
kEUR		kEUR	kEUR
Book value 1 / 1	0	0	0
Purchase	0	0	0
Realised gains	0	0	0
Reclassification into current securities	0	0	0
Book value 31 / 12	0	0	0

2022	Debt	Marketable	Total
	securities	securities
	kEUR	kEUR	kEUR
Book value 1 / 1	1,007	2,050	3,057
Reclassification into current securities	-1,007	0	-1,007
Sale	0	-1,935	-1,935
Realised gains / losses (-)	0	-115	-115
Book value 31 / 12	0	0	0

	Securities classified at
	“fair value through profit & loss”
	2023	2022
	kEUR	kEUR
Book value 1 / 1	0	2,050

	Securities classified at
	“fair value through profit & loss”
	2023	2022
	kEUR	kEUR
Sale	0	-1,935
Realised gains / losses (-) recognised in profit or loss	0	-115
Book value 31 / 12	0	0

OTHER FINANCIAL ASSETS [19]

Other financial assets consist of the following and are measured at amortised cost:

	31/ 12/ 23	31/ 12/ 22
	kEUR	kEUR
Deposits	249	184
Total	249	184

The maturities of the other financial assets as at the end of the period are as follows:

	31/ 12/ 22	31/ 12/ 21
	kEUR	kEUR
Due in between one and five years	249	184
Due in more than five years	0	0
Total	249	184

CURRENT ASSETS

CURRENT SECURITIES [20]

Overview about current securities:

2023	Debt	Deposits	Total
	securities
	kEUR	kEUR	kEUR
Book value 1/1	991	5,085	6,076
Purchase	1,983	0	1,983

2023	Debt	Deposits	Total
	securities
	kEUR	kEUR	kEUR
Investment in time deposits	0	2,538	2,538
Reclassification into cash & cash equivalents	0	-6,085	-6,085
Sale	-1,000	0	-1,000
Realised gains / losses (-)	6	0	6
Unrealised gains / losses (-)	5	0	5
Book value 31/ 12	1,985	1,538	3,523

2022	Debt	Deposits	Total
	securities
Book value 1 / 1	0	0	0
Reclassification into current securities	1,007	85	1,092
Purchase	0	5,000	5,000
Unrealised gains / losses (-)	-16	0	-16
Book value 31 / 12	991	5,085	6,076

	Securities classified at “fair value
	through other comprehensive
	income”
	2023	2022
	kEUR	kEUR
Book value 1 / 1	991	0

	Securities classified at “fair value
	through other comprehensive
	income”
	2023	2022
	kEUR	kEUR
Reclassification into current securities	0	1,007
Purchase	1,983	0
Sale	-1,000	0
Realised gains	6
Unrealised gains / losses (-) in other comprehensive income	5	-16
Book value 31/12	1,985	991

TRADE RECEIVABLES [21]

Trade receivables are initially measured at fair value and subsequently carried at amortised cost. Trade receivables consist of the following:

	31 / 12 /23	31 / 12 / 22
	kEUR	kEUR
Trade receivables, gross	13,742	18,481
Provision	-618	-913
Trade receivables, net	13,124	17,568

Trade receivables are only due from third-party customers, are non-interest bearing and generally have a term of 0 to 90 days.

The provision is calculated based on all information available to the Company and includes all expected credit losses on receivables as of 31 December 2023. For further information, please refer to Notes [3] and [41].

As at 31 December 2023, all campaigns were billed to the extent that revenue was recognised. Consequently, the amount of contract assets is nil.

OTHER RECEIVABLES [22]

Other receivables consist of the following:

	31 / 12 / 23	31 / 12 /22
	kEUR	kEUR
Value-added tax receivables	53	67

	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
Prepayments	347	242
Total	400	309

INCOME TAX RECEIVABLES [23]

Income tax receivables include tax prepayments on capital gains of EUR 113k (2022: EUR 549k).

OTHER CURRENT FINANCIAL ASSETS [24]

Other current financial assets consist of the following:

	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
Bonus payments from delivery partners	60	109
Rental deposits*	0	98
Other	38	51
Total	98	258

*Reclassified from non-current into current financial assets.

CASH AND CASH EQUIVALENTS [25]

This item includes cash at banks and cash in hand. For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise cash at banks and on hand of EUR 19,842k (2022: EUR 17,008k).

EQUITY

ISSUED CAPITAL [26]

Ordinary Shares issued and fully paid
	Shares	kEUR	Nominal value per
			share in EUR
At 1/1/ 2022 and 31/12/2022	21,500,000	1,075	0.05
Issued for acquisition of the investment in solute Holding GmbH & Co. KG	1,693,244	85	0.05
At 31/12/2023	23,193,244	1,160	0.05

The new shares in ad pepper media International N.V. were issued in 2023 and admitted for trading on the Frankfurt Stock Exchange on 6 February, 2024 (2022: 0 shares).

SHARE PREMIUM [27]

	kEUR
At 1/1/ 2022 and 31/12/2022	63,782
Issuance of share capital for the acquisition of the investment in solute Holding GmbH & Co. KG	3,403
Transaction costs for issued share capital	-12
At 31/12/2023	67,173

The capital reserve mainly comprises the premium paid upon share issued. In 2023 EUR 2.01 per issued share has been paid into the share premium.

RESERVES [28]

Reserves include treasury reserves with a value of EUR -6,138k (2022: EUR -6,138k).

By a shareholders’ resolution dated 13 June 2023, the Board of Directors was authorised to repurchase treasury stock of up to 50 percent of the issued capital within the following 18 months. There is currently no active share repurchase programme.

As of 31 December 2023, the Company held 1,242,128 treasury shares (2022: 1,242,128) at a nominal value of EUR 0.05 each, which equals 5.36 percent (2022: 5.78 percent) of the share capital. According to a shareholder resolution, those shares can only be used for a stock option plan (“SOP”) or the cancellation of shares. No shares were sold under the employee stock option plan (2022: no shares), no cash settlements of equity settled stock option plans occurred (2022: no shares).

The number of shares issued and outstanding as at 31 December 2023 totalled 21,951,116 (2022: 20,257,872). Each share has a nominal value of EUR 0.05.

Reserves include also the expenses incurred for stock option plans amounting to EUR 3,073k (2022: EUR 2,906k) and the currency translation reserve amounting to EUR -1,120k (2022: EUR - 1,153k).

Other reserves consist of the remaining amount of the revaluation of the financial liability for the written put option in ad pepper media Spain S.A., after reclassification of non-controlling interest considering ad pepper media Spain S.A.

The authorised share capital of the Company amounts to EUR 4,000,000, divided into 80,000,000 shares with a par value of EUR 0.05 each. The Board of Directors is authorised, upon approval by the Supervisory Board, to issue shares until 16 May 2027, or to grant rights to subscribe for shares until the issued share capital amounts to EUR 2,000,000.

Other comprehensive income

The total other comprehensive income recognised directly in equity and the corresponding income taxes are as follows:

2023	Before	Income	After
	income	taxes	income
	taxes		taxes
Currency translation differences	54	0	54
Revaluation of listed debt securities	5	0	5
Total other comprehensive income	59	0	59

2022	Before	Income	After
	income	taxes	income
	taxes		taxes
Currency translation differences	28	0	28
Revaluation of listed debt securities	-15	0	-15
Total other comprehensive income	13	0	13

NON-CONTROLLING INTERESTS [29]

Non-controlling interests comprise non-controlling interests in the following subsidiaries as at 31 December 2023 and 2022:

	Location	non-controlling interest
		in percent
ad pepper media Spain S.A.	Madrid / Spain	35
Webgains S.L.	Madrid / Spain	35
	Herrenberg /
ad agents GmbH	Germany	40
	Zürich /
ad agents AG	Switzerland	40

These result from the acquisition of 60 percent of the shares in ad agents GmbH and from the sale of a 35 percent share in ad pepper media Spain S.A. in recent years. Webgains S.L. and ad agents AG has been incorporated in 2020. The net income/loss for the year is allocated proportionately to the non-controlling interests. In 2023, non-controlling interests in ad pepper media Spain S.A. received a dividend payment of EUR 286k (2022: EUR 379k), while no dividend was paid to non-controlling interests of ad agents GmbH in 2023 (2022: EUR 160k).

Summarised financial information in respect of ad pepper media’s subsidiaries that have material non-controlling interest as at 31 December 2023, reflecting 100 percent of the underlying subsidiary’s relevant figures, is set out in the following table:

	ad agents GmbH		ad agents AG		ad pepper media		Webgains S.L.
					Spain S.A.
	31 / 12 / 23	31 / 12 /22	31 / 12 /23	31 / 12 / 22	31 / 12 / 23	31 / 12/22	31 / 12 / 23	31 / 12 /22
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Non-current assets	260	395	116	136	68	80	138	207

	ad agents GmbH		ad agents AG		ad pepper media		Webgains S.L.
					Spain S.A.
	31/12/23	31/12/22	31/12/23	31/12/22	31/12/23	31/12/22	31/12/23	31/12/22
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Current assets	7,437	6,861	1,197	2,135	896	1,098	1,877	1,816
Total assets	7,697	7,255	1,313	2,271	964	1,178	2,015	2,023
Non-current liabilities	41	788	0	0	0	2	63	130
Current liabilities	5,367	5,095	559	703	464	542	1,425	1,313
Total liabilities	5,408	5,883	559	703	454	544	1,488	1,443
Net assets	2,289	1,372	754	1,567	510	635	527	579
Equity attributable to owners of the Company	1,373	823	452	940	510	635	527	579

	ad agents GmbH		ad agents AG		ad pepper media		Webgains S.L.
					Spain S.A.
	31/12/23	31/12/22	31/12/23	31/12/22	31/12/23	31/12/22	31/12/23	31/12/22
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Non-controlling interests after reclassification into current liabilities in conjunction with put option	915	549	302	627	0*	0*	0*	0*
Non-controlling interests in percent*	40	40	40	40	35	35	35	35

*after reclassification into current financial liabilities. For further information on the written put option please refer to Note [2] and Note [34].

	ad agents GmbH		ad agents AG		ad pepper media		Webgains S.L.
					Spain S.A.
	2023	2022	2023	2022	2023	2022	2023	2022
		kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Revenue	5,569	7,046	1,920	1,673	1,366	1,378	1,281	1,175
Expenses	6,089	6,945	1,354	897	1,216	1,110	790	632

	ad agents GmbH		ad agents AG		ad pepper media		Webgains S.L.
					Spain S.A.
	2023	2022	2023	2022	2023	2022	2023	2022
		kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Net profit / (loss) for the year	-520	101	566	776	150	268	491	543
Profit attributable to owners of the Company	-312	61	340	465	98	175	319	353
Profit attributable to non-controlling interests	-208	40	226	310	52	93	172	190
Other comprehensive income attributable to owners of the Company	0	0	0	0	0	0	0	0
Other comprehensive income attributable to non-controlling interests	0	0	21	0	0	0	0	0
Total comprehensive income / loss for the year	-520	101	587	776	150	268	491	543
Net cash inflow / (outflow) from operating activities	978	1,731	401	1,023	329	328	525	508
Net cash inflow / (outflow) from investing activities	-14	-50	-2	-2	-3	-40	0	0

	ad agents GmbH		ad agents AG		ad pepper media		Webgains S.L.
					Spain S.A.
	2023	2022	2023	2022	2023	2022	2023	2022
		kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Net cash inflow / (outflow) from financing activities	523	-561	-1,408	0	-286	-467	-613	-692
Total net cash inflow / (outflow)	1,487	1,120	-1,009	1,021	40	-179	-88	-184

NON-CURRENT LIABILITIES

OTHER LONG-TERM LIABILITIES [30]

Other long-term liabilities consist of the following:

	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
Employee benefits liability	68	0
Lease liability	754	840
Total	822	840

The employee benefits liability relates to the obligation resulting from the cash-settled stock option plans. For further details on cash-settled stock option plans, please refer to Note [39]. During the year, lease liabilities including interests were paid for an amount of EUR 595k (2022: EUR 585k).

The maturities of the other long-term liabilities as of the end of the period are as follows:

	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
Due in between one and five years	822	840
Due in more than five years	0	0
Total	822	840

CURRENT LIABILITIES

TRADE PAYABLES [31]

Trade payables include accrued liabilities and are recognised at amortised cost. Accrued liabilities for affiliate credits not yet disbursed in the Webgains segment amount to EUR 11,883k (2022: EUR 15,207k).

CONTRACT LIABILITIES [32]

Contract liabilities consist of short-term advances for search engine advertising services from clients in the ad agents segment.

	2023	2022
	kEUR	kEUR
At 1/1	465	446
Deferred during the year	1,266	519
Recognised as revenue during the year	-1,358	-509
Exchange differences	9	9
At 31/12	382	465

OTHER LIABILITIES [33]

Other liabilities consist of the following:

	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
Value-added tax liabilities	1,349	1,416

	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
Liabilities for payroll tax and social security contributions	369	377
Employee holiday accrual	198	178
Other	74	260
Total	1,990	2,231

OTHER FINANCIAL LIABILITIES [34]

Other financial liabilities consist of the following:

	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
Liability for written put option	1,996	2,495
Bonuses and commissions	176	317
Accrued liabilities for outstanding invoices	297	213

	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
Current lease liabilities	536	523
Other	1	3
Total	3,006	3,551

RELATED PARTY DISCLOSURES [35]

Pursuant to the IAS 24 definition, the Board of Directors and members of the Supervisory Board have been identified as related parties. The compensation paid to all members of these boards is based exclusively on their functions as individuals in key positions. Further information about the compensation paid to these individuals can be found in Note [40]. All entities over which the Supervisory Board Chairman Michael Oschmann has significant influence are considered as related parties to the Company.

The purchase by ad pepper of 25.64 percent of the shares in solute GmbH & Co. KG is regarded as a so-called related party transaction. Michael Oschmann, the chairman of the Supervisory Board of ad pepper, held prior to the acquisition (i) an indirect interest of 46.71 percent in the share capital of ad pepper; and (ii) participating interests in excess of 20 percent in each of the selling entities as regards to the 25.64 percent of the shares in solute GmbH & Co. KG. Therefore, Michael Oschmann did not participate in the decision-making in the Supervisory Board of ad pepper concerning the acquisition by ad pepper of the interest in solute GmbH & Co. KG.

The following consideration has been transferred to selling entities, where Michael Oschmann has directly or indirectly control over:

Selling entity	Shares	Value
	transferred
	Amount	kEUR
Euro Serve Media GmbH	1,085,623	2,236
Josef Keller GmbH & Co.	336,463	693
BFB BestMedia4Berlin GmbH	133,476	275
Adolf Christ Verlag GmbH & Co.	101,787	210
KELMAR Telefonbuchverlag	11,615	24
KELSTA Telefonbuchverlag	9,139	19
Total	1,678,103	3,457

The following table provides the amount of operating transactions that have been entered into with related parties for the relevant financial year:

	Sales to		Amounts owed
	related parties		by related
			parties*
Entity with significant	2023	2022	2023	2022
influence over the Group:
Sellwerk GmbH & Co.	324	144	107	79

*The amounts are classified as trade receivables (Note [21]).

Terms and conditions of transactions with related parties

The sales to related parties are made on terms equivalent to those that prevail in at arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free, and settlement occurs in cash. As at 31 December 2023, the Group recognised no provision for expected credit losses in respect of amounts owed by related parties.

LITIGATION AND CLAIMS [36]

Neither the ultimate parent nor any of its subsidiaries are involved in any material litigation with third parties.

CONTINGENT LIABILITIES AND OTHER FINANCIAL OBLIGATIONS [37]

ad pepper media International N.V. has provided guarantees for all outstanding liabilities of its subsidiary, ad pepper media GmbH (register number: HRB 16494) as at 31 December 2023, until these are satisfied in full. As a result, the individual local statutory accounts of ad pepper media GmbH are exempt from audit under the requirements of Section 264 para. 3 of the German Commercial Code (HGB). As at 31 December 2023, ad pepper media GmbH’s outstanding liabilities amounted to EUR 407k (2022: EUR 613k).

ad pepper media International N.V. has provided guarantees for all outstanding liabilities of its subsidiary, ad agents GmbH (register number: HRB 16494) as at 31 December 2023, until these are satisfied in full. As a result, the individual local statutory accounts of ad agents GmbH are exempt from audit under the requirements of Section 264 para. 3 of the German Commercial Code (HGB). As at 31 December 2023, ad agents GmbH’s outstanding liabilities amounted to EUR 5,750k (2022: EUR 6,432k).

ad pepper media International N.V. has provided guarantees for all outstanding liabilities of its subsidiary Webgains GmbH (registered number: HRB 37198) that existed as at 31 December 2023, until these are satisfied in full. As a result, the individual local statutory accounts of Webgains GmbH are exempt from audit under the requirements of Section 264 para. 3 German Commercial Code (HGB). As at 31 December 2023, the outstanding liabilities of Webgains GmbH amount to EUR 3,639k (2022: EUR 4,261k).

Other financial obligations mainly result from short-term office leases and office equipment.

The future minimum payment obligations resulting from the contracts in place as at 31 December 2023 are as follows:

	< 1 year	> 1 year	> 5 years	Total
		to 5
	kEUR	kEUR	kEUR	kEUR
Other financial obligations	205	17	0	222

ADDITIONAL CASH FLOW INFORMATION [38]

The following information is provided to supplement the statement of cash flows: Other non-cash expenses and income comprises expenses for allocation to and income from the release of valuation allowances on trade receivables and expenses from writing down receivables. This item also includes write-downs of affiliate credits not yet disbursed and reversals of time-barred claims.

STOCK OPTION PROGRAMMES [39]

Options granted under the Ongoing SOP’s are subject to the following provisions:

An employee equity-participation program involving 440,000 options was launched for executive employees in 2020 (“SOP 2020 MD”). In January 2023 remaining options have been forfeited due to termination of employment of one of the participants, the other remaining options have been waived by the holders for no consideration. The Group accounted for the forfeited options using the forfeiture accounting acc. to IFRS 2 (i.e. reversal of expense previously recognized). For the waived options the Group considered an acceleration of vesting.

An employee equity participation program involving 600,000 options was granted for executive employees in January 2023 (“SOP 2023 MD”). The options may be exercised over a period of four years at 25 percent each year, but at the earliest one year after being granted. The valuation was carried out by simulation (Monte Carlo method). The volatility was calculated from the development of the Company's share price between 3 January 2017 and 2 January 2023. The fair value of the individual tranches at the time of granting is between EUR 0.369 and EUR 0.613 per issued option. The maximum cost of the program over the entire time is EUR 302k.

An employee equity participation program involving 54,000 options was granted for Supervisory Board members in January 2023. The plan retains the Company the right to fulfil its commitment to transfer shares by paying to the beneficiary a cash amount equal to the difference between the issue price and the average closing price on Xetra during the last ten trading days before exercising the option limited to EUR 7. The options may be exercised over a period of four years at 25 percent each year, but at the earliest one year after being granted. The valuation was carried out by simulation (Monte Carlo method). The volatility was calculated from the development of the Company’s share price between 3 January 2017 and 2 January 2023. The fair value of the individual tranches at the time of granting is between EUR 0.355 and EUR 0.564 per issued option. The maximum cost of the program over the entire time is EUR 26k.

A share appreciation rights program involving 187,500 options and settled in cash was granted for Board of Directors in January 2023. The options may be exercised over a period of four years at 25 percent each year, but at the earliest one year after being granted. The fair value of the individual tranches at the time of granting was between EUR 0.355 and EUR 0.564 per issued option. The fair value of the individual tranches as at 31 December 2023 is between EUR 0.581 and EUR 0.881.

An employee equity-participation programme involving 30,000 options was granted for Supervisory Board members (“Executive SOP 2017 SB”). The plan retains the Company the right to fulfil its commitment to transfer shares by paying to the beneficiary a cash amount equal to the difference between the issue price and the average closing price on Xetra during the last ten trading days before exercising the option. The valuation was carried out by simulation (Monte Carlo method). The volatility was calculated from the development of the Company’s share price between 1 February 2011 and 28 February 2017. The shares may be exercised over a period of four years, but at the earliest one year after being granted. The fair value of the individual tranches at the time of granting is between EUR 0.390 and EUR 0.654 per issued option. The maximum cost of the programme over the entire period is EUR 16k.

	SOP 2017	SOP 2023
	(SB)	(BoD, MD,
		SB)
Share price when granted, in EUR	1.94	1.86
Date of grant	11 / 4 / 17	3/1/23
Exercise price, in EUR	1.9751	1.86
Risk-free interest rate, in percent	-0.36	2.42

	SOP 2017	SOP 2023
	(SB)	(BoD, MD,
		SB)
Estimated term, in years	7	7
Future dividend, in EUR	0.05	0.05
Estimated volatility, in percent	51	42.85

The average share price during 2023 was EUR 2.31 (2022: EUR 2.90).

The personnel expense recognised for employee services received during the year is shown in the following table:

	2023	2022
Expense arising from equity-settled share- based payment transactions	167	174
Expense / (income) arising from the measurement of the liability for cash-settled share-based payment transactions	68	-250
Total expense / (income) arising from share- based payment transactions	235	-76

The following table shows the changes in the options during the financial year 2023:

	2023	2022	Weighted	Weighted
			average	average
			exercise price	exercise price
			2023	2022
Options outstanding at the beginning of the financial year	430,000	617,500
Options granted during the financial year	841,500	0
Options exercised during the financial year	0	0
Options forfeited during the financial year	-100,000	0
Options cancelled during the financial year	-325,000	-187,500
Options outstanding at the end of the financial year	846,500	430,000	1.86	3.48
Exercisable options as of 31 December	5,000	0
Range of exercise prices of outstanding options as of 31 December	1.86-1.94	1.9751-3.50

The weighted exercise price of stock options exercised during 2023 amounts to EUR 0 (2022: EUR 0). All outstanding stock option programmes have an expiration date with an average remaining contractual life of 6 years.

TOTAL REMUNERATION OF KEY MANAGEMENT [40]

	2023	2022
	kEUR	kEUR
Short-term employee benefits	299	316
Post-employment benefits (pensions and health insurance)	20	17
Stock options	68	0
Total remuneration of key management	387	333

The amounts shown in the table above are recognised as expenses during the reporting period. Income resulting from the share-based payments is due to the decreased fair value of the cash- settled stock option plan and the corresponding adjustment of the liability through profit or loss. Share appreciation rights held by the members of the Board of Directors have the following expiration dates and exercise prices:

	Expiration	Exercise	31 / 12 / 23	31 / 12 / 22
		price
		EUR	Number	Number
SOP
2023 (Share Appreciation Rights)	2/1/2030	1.86	187,500	0

FINANCIAL INSTRUMENTS [41]

The classes of financial instruments within the meaning of IFRS 7.6 are defined in accordance with the categories of financial instruments in IFRS 9. IFRS 9 contains three categories for classifying financial assets: “measured at amortised cost”, “measured at fair value through profit or loss” and “measured at fair value through other comprehensive income.”

1. Capital risk management

The Group manages its capital with the aim of optimising returns on investments in business entities by optimising the debt equity ratio and maximising its shareholder value by maintaining a high credit rating and a good equity ratio. At the same time, the Group ensures that entities can operate under the going concern assumption. The capital structure of the Group consists of liabilities other than borrowings, cash and cash equivalents, securities measured at fair value through other comprehensive income and the equity attributable to the parent company’s shareholders, consisting of issued shares in circulation, the capital reserve, retained earnings brought forward and other equity items.

Net indebtedness

The Group manages its capital structure and makes adjustments to it that take into account changes in the general economic environment. In order to maintain or adjust the capital structure, the Group can make dividend payments or pay back capital to the shareholders, issue new shares or buy back its own shares. No changes in the objectives, guidelines and procedures were made as at 31 December 2023 compared to 31 December 2022. Negative net indebtedness means that the Group is debt-free. Net indebtedness at the end of the year was as follows:

	31/12/23	31/12/22
	kEUR	kEUR
Current and non-current financial liabilities	21,485	25,227
Cash and cash equivalents	-19,842	-17,008
Listed debt and marketable securities	-3,523	-6,076
Net liabilities	-1,880	2,144
Equity per balance sheet including non- controlling interest	18,881	15,666

	31 / 12 / 23	31 / 12 /22
	kEUR	kEUR
Net indebtedness, in percent	-10	14

2. Material accounting policies

The rent and similar deposits referred to in Note [19], carried at their nominal amount of EUR 80k (2022: EUR 80k), are pledged as collateral for bank guarantees. The Group does not hold any collateral for credit facilities. Detailed information on the main accounting policies applied, including the recognition criteria, the measurement bases and the bases for the recognition of income and expenses, are presented separately for each category of financial assets, financial liabilities and equity instruments in the following section 3.

3. Categories of financial instruments

Carrying amount per category of financial instruments:

Financial assets	31 / 12 / 23	31 / 12 /22
	kEUR	kEUR
Debt instruments at amortised cost	35,298	40,102
Debt instruments at fair value through other comprehensive income	1,538	991
Total	36,836	41,093

Debt instruments at amortised cost include trade receivables (Note [21]), other non-current financial assets (Note [19]), deposits presented in current financial assets (Note [24]), cash deposits (Note [24]) and cash and cash equivalents (Note [25]). Debt instruments at fair value through other comprehensive income include current investments in listed debt instruments (Note [20]). Fair values of these instruments were determined by reference to published price quotations in an active market.

Financial liabilities	31 / 12 / 23	31 / 12 /22
	kEUR	kEUR
Other financial liabilities measured at amortised cost	21,417	25,227
Other financial liabilities measured at fair value	68	0
Total	21,485	25,227

Other financial liabilities measured at amortised cost include lease liabilities (Note [42]), trade payables (Note [31]) and other financial liabilities (Note [34]). Other financial liabilities measured at fair value include employee liabilities resulting from share appreciation rights granted to the Board of Directors (Note [39]).

Due to the short-term maturities of cash and cash equivalents, trade receivables and payables, current financial assets and liabilities, their respective fair values approximate their carrying amounts. The fair values of non-current financial liabilities relating to lease liabilities are based on carrying amounts, which are a reasonable approximation of fair value. The fair value of non- current financial liabilities relating to employee benefits for share appreciation rights are based on fair value as of December 31, 2023 (Note [39]).

Hierarchical classification of fair values of financial instruments pursuant to IFRS 7 as at 31 December 2023:

Fair Value

Level 1

Level 2

Level 3

31 / 12 / 23

Financial assets at fair

value through other

comprehensive income

1,538

Net gains and losses per category of financial instruments (IFRS 7.20 (a)):

Financial assets	31/12/23	31/12/22
	kEUR	kEUR
At fair value through profit and loss
Unrealised gains	0	0
Realised losses	0	-115
Total	0	-115
At fair value through other comprehensive income
Unrealised gains / losses (-)	5	-16
Realised gains / losses (-)	6	0
Total	11	-16

Unrealised losses result from the fair value changes of debt securities classified at fair value through other comprehensive income and realised losses result from the maturity of debt securities classified at fair value through other comprehensive income.

Interest income and expenses per category of financial instruments (IFRS 7.20 (b)):

Financial assets	31/12/23	31/12/22
	kEUR	kEUR
Measured at amortised cost	162	1
Measured at fair value through other comprehensive income	40	3
Measured at fair value through profit or loss	0	18

4. Objectives of financial risk management

The main financial liabilities used by the Group comprise trade payables and lease liabilities. The primary purpose of these financial liabilities is to finance the Group’s business activities. The Group has various financial assets, such as trade receivables, cash and securities.

Group management monitors and manages the financial risks of the Group. These risks include the market risk (including exchange rate risks, interest rate-related fair value risks and price risks), the credit risk, the liquidity risk and interest rate-related cash flow risks. In addition, the management decides on the utilisation of derivative and non-derivative financial transactions and the investment of surplus liquidity in securities and deposits. The Group does not enter into any contracts with or deal in financial instruments, including derivative financial instruments, for speculative purposes.

5. Market risk

The Group’s activities expose it primarily to financial risks from changes in exchange rates (see 6. below) and interest rates (see 7. below). Market risk positions are determined by means of sensitivity analysis. As no further investments in listed debt instruments are held by the Group, the market risk exposure in conjunction with interest rate risk of the Group decreased significantly. The nature and means of risk management and assessment, however, remain unchanged.

6. Foreign currency risk management

Certain transactions in the Group are denominated in foreign currencies. This can result in risk from fluctuations in exchange rate. The carrying amounts of the monetary assets and liabilities of the Group denominated in foreign currencies are as follows:

Financial assets	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
USD	303	326
GBP	8,174	10,599
CHF	1,307	2,135
Total	9,784	13,060

Financial liabilities	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
USD	6	0
GBP	7,704	1,835

Financial liabilities	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR
CHF	74	882
Total	7,784	2,717

Foreign currency sensitivity analysis

The Group is primarily exposed to exchange rate risk from the currencies USD and GBP. The following table shows the sensitivity from the point of view of the Group, assuming a 10 percent rise or fall in the EUR against the respective foreign currency. The 10 percent shift represents management’s assessment with regards to a reasonable possible change in the exchange rate. The sensitivity analysis only includes outstanding monetary positions denominated in foreign currency and adjusts their translation at the end of the period to reflect a 10 percent change in the exchange rates.

	Effect of USD	Effect of USD	Effect of GBP	Effect of GBP	Total	Total
	+10%	+10%	+10%	+10%
	31 / 12 / 23	31 / 12 / 22	31 / 12 / 23	31 / 12 / 22	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Net income for the year	-58	-98	-2	0	-60	-98

	Effect of USD -	Effect of USD -	Effect of GBP	Effect of GBP	Total	Total
	-10%	-10%	-10%	-10%
	31 / 12 / 23	31 / 12 / 22	31 / 12 / 23	31 / 12 / 22	31 / 12 / 23	31 / 12 / 22
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Net income for the year	71	119	-2	0	73	119

7. Interest rate risk management

Interest rate sensitivity analysis

The sensitivity analyses described below were determined on the basis of the interest rate risk exposure for non-derivative financial instruments on the balance sheet date.

In 2023, an increase or decrease in the interest rate of 50 basis points, which was assumed by the management for the interest rate risk, would have increased / decreased the other comprehensive income of the Group by EUR 11k/EUR -8k (2022: EUR 2k).

8. Credit risk management

Credit risk is the risk of loss for the Group should contractual parties not meet their contractual obligations. Business relationships are only entered into with creditworthy counterparties, and, where appropriate, the Group obtains collateral to reduce the risk of loss due to the non-fulfilment of obligations. The Group only enters into business relationships with entities that are rated “investment grade” or above. If such information is not available, the Group makes use of other available financial information and its own trading records to evaluate its major customers. The risk exposure of the Group and the credit ratings are continuously monitored. The Group has trade receivables with a large number of customers spread over various sectors and geographical territories. Continuous credit assessments are carried out with regard to the financial condition of the receivables.

An impairment analysis is performed at each reporting date to measure expected credit losses. The provision rates are based on days past due for every single customer, reflecting reasonable and supportable information that is available at the reporting date about past events and current conditions and customer-specific, forward-looking information from the client-facing account manager. If a customer defaults, all outstanding amounts relating to that counterparty are subject to an allowance calculation. The default is primarily determined based on individual assessment – prompted by noticeable changes in payment behaviour, or application for bankruptcy. Individual assessment is generally supported by the information provided by the client-facing account manager.

Generally, trade receivables are considered at 100 percent in the credit loss allowance if they are past due for more than one year. Trade receivables are written off and derecognised if there is good reason to assume that the outstanding amount is unrecoverable in part or in whole, for example after completion of insolvency proceedings.

The Group is not exposed to any significant credit risks relating to a single contractual party or group of contractual parties with similar characteristics. The reported carrying amount reflects the maximum credit risk of the Group. The Group defines contractual parties as those with similar characteristics if they are related parties. The concentration of credit risk from customer relationships did not exceed 5.7 percent (2022: 6.3 percent) of the financial gross asset values at any time during the reporting period. The carrying amount of the financial assets included in the Consolidated Financial Statements less any impairment losses represent the Group’s maximum credit risk. Any collateral is ignored. There are no credit derivatives for hedging outstanding amounts from customers, nor have there been.

The expected loss rates (stage 2 of the impairment model) amount to 0 percent for the segments ad agents and ad pepper media. The expected loss rate for the Webgains segment is 0.5 percent. The Company abstains from disclosing an ECL table, as the application of the expected loss rates results in immaterial amounts for the Group. The Company tests for impairment (stage 3 of the impairment model) if there are substantial indications that receivables may be uncollectable, e.g. deterioration of payment behaviour or initiation of insolvency proceedings. An account of individual value adjustments is only maintained for trade receivables.

The reconciliation of changes in the loss allowance is as follows:

Loss allowance	2023	2022
	kEUR	kEUR
Balance at beginning of year	913	532
Allowances in the period
Additions	691	764
Reversals	-600	-349
Consumption	-386	-34
Balance at end of period	618	913

The analysis shows that allowances were set up on a gross receivables amount of EUR 782k (2022: EUR 1,127k). For all other financial assets, no material credit losses are anticipated despite trade receivables that are subject to the impairment model according to IFRS 9.5.5.

9. Liquidity risk management

The Group monitors the risk of liquidity shortage on a continuous basis with the help of a liquidity planning tool. This tool takes into account the maturities of financial investments and financial assets (e.g., receivables, other financial assets) and expected cash flow from operating activities. The Group’s aim is to maintain a balance between continuous coverage of funding needs and the necessity of flexibility.

The maturities of the financial liabilities of the Group as at 31 December 2023 are presented below. The information is based on contractual, undiscounted payments.

Financial liabilities 31/ 12/ 23	< 1 mth.	> 1 mth.	3 mth. to 1	1 to 5 years	> 5 years	Total
		< 3 mth.	year
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Lease liabilities	51	92	393	754	0	1,290
Trade payables	17,290	367	0	0	0	17,657
Other financial liabilities measured at amortised cost	411	37	2,022	0	0	2,470
Other financial liabilities measured at fair value	0	0	0	68	0	68
Total	17,752	496	2,415	822	0	21,485

The lease liabilities disclosed in the above table are the gross amounts.

Financial liabilities 31/ 12/ 22	< 1 mth.	> 1 mth.,	3 mth. to 1	1 to 5 years	> 5 years	Total
		< 3 mth.	year
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Lease payables	45	83	395	720	0	1,243
Trade payables	20,570	267	0	0	0	20,836
Other financial liabilities measured at amortised cost	299	157	2,571	0	0	3,028
Total	20,914	507	2,966	720	0	25,107

LEASES [42]

The Group has lease contracts for office space (lease terms between 1 and 5 years) and cars (3 years). The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. There are several lease contracts that include extension and termination options, which are further discussed below.

The Group also has certain leases with terms of 12 months or less. The Group applies the “short-term lease” recognition exemptions.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:

	Right-of-use assets			Lease
				liabilities
	Office	Cars	Total
	space
	kEUR	kEUR	kEUR	kEUR
As at 1 January 2023	2,166	252	2,418	-1,361
Additions	426	66	492	-492
Disposal	-17	-72	-89	0
Exchange rate difference	12	0	12	9
Subtotal	2,587	247	2,834	-1,844
Depreciation expense as at 1 January 2023	-962	-138	-1,101	0
Depreciation expense	-557	-81	-638
Disposal	16	76	92
Exchange rate difference	-3	0	-3

	Right-of-use assets			Lease
				liabilities
	Office	Cars	Total
	space
	kEUR	kEUR	kEUR	kEUR
Depreciation expense as at 31 December 2023	-1,506	-144	-1,650
Payments				595
Interest				-40
As at 31 December 2023	1,081	103	1,184	-1,290

The amounts recognised in profit or loss, are as follows:

	2023	2022
	kEUR	kEUR
Depreciation expenses of right-of-use assets	638	570
Interest expense on lease liabilities	40	33
Expense relating to short-term leases (included in administrative expense)	113	263
Total amount recognised in profit or loss	791	866

Rental agreements for the office leases in Nuremberg, Herrenberg and Madrid contain extension options on automatic annual renewal terms. Due to uncertainties, these options have not been executed so far. Therefore, these options are not considered in the valuation process. There are no purchase options or restrictions imposed by lease arrangements.

EVENTS AFTER THE BALANCE SHEET DATE [43]

Up until the day of authorisation for issuance, there were no events that would have exerted substantial influence on the net assets, financial position or results of operations as at 31 December 2023.

APPLICATION OF SEC. 264 PARA. 3 OF GERMAN COMMERCIAL CODE (HBG) [44]

The following German subsidiaries in the legal form of capital corporation as defined in Section. 264a made use of the exemption clause included in Section 264 para. 3 of the German Commercial Code:

•

ad pepper media GmbH, Nuremberg

•

Webgains GmbH, Nuremberg

•

ad agents GmbH, Herrenberg

Nuremberg, 10 April 2024

The Board of Directors of ad pepper media International N.V. comprised the following members in the financial year 2023:

Dr Jens Körner,

CEO

Nuremberg, Germany

The Supervisory Board of ad pepper media International N.V. in the financial year 2023 consisted of:

Michael Oschmann (Chairman)

Thomas Bauer

Dr Stephan Roppel

Dagmar Bottenbruch

STATUTORY FINANCIAL

STATEMENTS AND NOTES OF THE HOLDING

COMPANY AD PEPPER MEDIA INTERNATIONAL N.V.

(THE “HOLDING COMPANY”)

BALANCE SHEET OF THE HOLDING COMPANY

(AFTER PROFIT APPRIOPRIATION) – ASSETS

(AFTER PROFIT APPRIOPRIATION) – EQUITY AND LIABILITIES

31/12/23

31/12/22

31/12/23

31/12/22

Note

kEUR

Note

kEUR

Non-current assets

Equity attributable to shareholders of the parent company

Intangible ﬁxed assets

Issued capital

1,160

1,075

[3]

[10]

Tangible ﬁxed assets

178

289

Share premium

67,174

63,782

[4]

[10]

Financial ﬁxed assets

9,442

6,588

Other reserves

-50,670

-50,368

[5]

[10]

Total non-current assets

9,662

6,944

Total equity

17,664

14,490

Current assets

Non-current liabilities

120

[11]

Marketable securities

1,985

991

Provisions

544

315

[6]

[12]

Receivables due from subsidiaries

948

1,107

Current liabilities

2,498

3,114

[7]

[13]

Prepaid expenses and other current assets

273

305

Total liabilities

3,115

3,549

[8]

Cash and cash equivalents

7,911

8,691

Total equity and liabilities

20,779

18,038

[9]

Total current assets

11,117

11,094

Total assets

20,779

18,038

131

132

STATUTORY FINANCIAL

PROFIT OR LOSS ACCOUNT OF THE HOLDING COMPANY

NOTES TO THE STATUTORY

Current ﬁnancial liabilities have been accounted for a written put

option over the non-controlling interest in ad pepper media Spain

FINANCIAL STATEMENTS OF

S.A. and reﬂect in analogy to the consolidated ﬁnancial statements an

THE HOLDING COMPANY

increase of the net asset value of the subsidiary to 100 percent.

1/1 - 31/12/23

1/1 - 31/12/22

Unrealised gains on transactions between the Holding Company and its

investments in consolidated subsidiaries are eliminated in full, based on

Note

kEUR

[1] Basis of preparation and

the consolidation principles. The Holding Company Financial Statements

Revenue*

186

243

material accounting policies

are presented in EUR, which is the Holding Company’s functional

Other operating income

1,240

1,013

[15]

currency. The amounts are in thousands of EUR (rounded to the nearest

The Company Financial Statements for ad pepper media International

thousand), unless otherwise stated. There have been no changes to the

Selling and marketing expenses

-806

-787

N.V. (Commercial Register No. 27182121) have been prepared in

accounting policies of the Holding Company. Due to rounding up or down,

General and administrative expenses

-2,436

-1,682

accordance with the statutory provisions of Part 9, Book 2 of the Dutch

individual ﬁgures may not add up exactly to the totals stated.

Civil Code. In accordance with subsection 8 of section 362, Book 2 of

Other operating expenses

-10

-20

the Dutch Civil Code, the same accounting principles may be applied

Earnings before interest and tax (EBIT)

-1,826

-1,233

in the Company’s ﬁnancial statement and the consolidated ﬁnancial

[2] Changes in Accounting policies

Interest income

435

statements. The Holding Company’s ﬁnancial data is included in

the Consolidated Financial Statements. The notes to the Company’s

Interest expenses

-11

-152

In 2023 no changes in accounting policies applied.

balance sheet and income statement are limited to items that differ

Loss before taxes

-1,403

-1,325

from the corresponding items in the Consolidated Financial Statements

Share in result of subsidiaries and participations

458

432

and that are of material signiﬁcance.

[3] Intangible ﬁxed assets

Net result for the year

-944

-893

The Holding Company applies the acquisition method to account for

Trade- Software

Total

acquiring subsidiaries, consistent with the approach identiﬁed in the

*Revenue relates solely to license fee charged to subsidiaries.

marks

Consolidated Financial Statements. The consideration transferred for

the acquisition of a subsidiary is the fair value of assets transferred

kEUR

to the Holding Company, liabilities incurred to the former owners of

Book value at 1/1/22

133

136

the acquired company, and the equity interests issued by the Holding

Additions

Company. The consideration transferred includes the fair value of any

asset or liability resulting from a contingent consideration arrangement.

Disposals

Identiﬁable assets acquired and liabilities and contingent liabilities

Amortisation

-1

-80

-81

assumed in an acquisition are measured initially at their fair values at

Book value at 31/12/22

the acquisition date and are subsumed in the net asset value of the

investment in consolidated subsidiaries. Acquisition-related costs are

Purchase value

643

1,738

2,381

expensed as incurred.

Accumulated amortisation

-641

-1,673

-2,314

Book value at 31/12/22

Investments in consolidated subsidiaries are measured at net asset

value. Net asset value is based on the measurement of assets, provisions

Additions

and liabilities, and determination of proﬁt based on the principles applied

Disposals

in the Consolidated Financial Statements. If the valuation of a subsidiary

Amortisation

-1

-55

-56

based on the net asset value is negative, it will be stated at nil. If and

insofar as the Holding Company has the ﬁrm intention of enabling the

Book value at 31/12/23

participation to settle its debts, a provision is recognised for this. When

Purchase value

643

1,771

2,414

the Holding Company ceases to have control over a subsidiary, any

Accumulated amortisation

-642

-1,730

-2,372

retained interest is remeasured to fair value, with the change in carrying

amount to be accounted for in the income statement. When parts of

Book value at 31/12/23

investments in consolidated subsidiaries are bought or sold, and such

transaction does not result in the loss of control, the difference between

Intangible assets are amortised over a useful life of three years.

the consideration paid or received and the carrying amount of the net

assets acquired or sold is directly recognised in equity.

133

134

STATUTORY FINANCIAL

[4] Tangible ﬁxed assets

The Group recognises right-of-use assets at the commencement date of

The movements during the year are as follows:

On 2 October 2023 the Group signed a purchase agreement of a 25.64

the lease (i.e., the date the underlying asset is available for use). Right-

percent interest in solute Holding GmbH & Co. KG, Hanover, Germany,

Tangible ﬁxed assets can be speciﬁed as follows:

of-use assets are measured at cost, less any accumulated depreciation

Subsidiary companies

which is the Holding Company of solute GmbH, an operator of price

and impairment losses, and adjusted for any re-measurement of lease

comparison portals in Germany. Signiﬁcant inﬂuence over the associate

liabilities. The cost of right-of-use assets includes the amount of lease

Invest-

Loans Financial

Total

was obtained on 30 October 2023, the registration day of ad pepper as

31/12/23

31/12/22

ments

assets

liabilities recognised, initial direct costs incurred and lease payments

shareholder. From this day onward ad pepper can actively participate in

including

invest-

made at or before the commencement date, less any lease incentives

all shareholders meetings of solute Holding GmbH & Co. KG.

kEUR

ments

received. Unless the Group is reasonably certain to obtain ownership of

Tangible ﬁxed assets

the leased asset at the end of the lease term, the capitalised right-of-

For further information on the investment made please refer to Note [4]

kEUR

Right-of-use assets

132

237

use assets are depreciated on a straight-line basis over the shorter of

of the Consolidated Financial Statements.

Book value

their estimated useful lives and the lease term. Right-of-use assets are

Total

178

289

at 1/1/22

5,645

500

119

6,264

subject to impairment.

Additions

1,000

The depreciation percentages used for tangible assets range from 12.5

Written put option

percent to 33.3 percent.

over the 35 %

Tangible ﬁxed assets

2023

2022

non-controlling in-

terest in ad pepper

kEUR

[5] Financial ﬁxed assets

media Spain S.A.

Book value at 1/1

and Webgains S.L.

-95

Additions

Dividends and

31/12/23

31/12/22

repayments

-949

-290

-85

-1,324

Disposals

kEUR

Share of net proﬁt

116

Depreciation

-16

-21

Subsidiaries at net asset value

5,011

5,344

Investments in

Book value at 31/12

subsidiaries

296

Loans

710

1,210

Purchase value

256

293

Other

3,721

Translation

Accumulated depreciation

-210

-241

adjustments

Total

9,442

6,588

Book value at 31/12

Book value

at 1/1/23

5,029

1,210

6,273

Written put option

Investments in subsidiary companies consist of the following:

over the 35 % non-

controlling interest

Right-of-use assets

2023

2022

31/12/23

31/12/22

in ad pepper

kEUR

media Spain and

kEUR

Book value at 1/1

237

313

Webgains S.L.

-62

Subsidiaries at net asset value

5,011

5,344

Additions

198

Additions

250

3,487

3,737

Provisions for subsidiaries

-544

-315

Disposals

-158

Repayments

-750

Total

4,467

5,029

Dividends and

Depreciation

-130

-116

repayments

-1,032

Book value at 31/12

132

237

Share of net proﬁt

459

200

659

Purchase value

360

342

Investments in

Accumulated depreciation

-228

-105

subsidiaries

104

Book value at 31/12

132

237

Translation

adjustments

-29

Book value

at 31/12/23

4,467

710

3,721

8,898

135

136

STATUTORY FINANCIAL

[6] Marketable securities

[7] Group companies

The receivables from Group companies mature within one year.

31/12/23

31/12/22

kEUR

[8] Prepaid expenses and other current assets

Due within one year

1,985

991

Due within one and ﬁve years

31/12/23

31/12/22

Due in more than ﬁve years

Total

1,985

991

kEUR

Income tax receivables

163

192

Other receivables

110

113

Securities measured at fair value

Total

273

305

through other comprehensive income

In the reporting period, securities measured at fair value through other

comprehensive income were acquired for EUR 1,983k (2022: EUR 0k)

[9] Cash and cash equivalents

and sold for EUR 1,000k (2022: EUR 0k). Unrealised gains of EUR 5k

were recognised in other comprehensive income (2022: unrealised

losses of EUR 15k). Realised gains of EUR 6k were recognised in

No restrictions on cash exist at balance sheet date.

ﬁnancial income (2022: EUR 0k).

Securities measured at fair value through proﬁt or loss

In the reporting period, securities measured at fair value through proﬁt

or loss were acquired for EUR 0k (2022: sale EUR 1,935k) and sold for

EUR 0k. Realised losses of EUR 0k (2022: realised losses EUR 115k)

were recognised in proﬁt or loss.

For further information on investments made please refer to Note [20]

of the Consolidated Financial Statements.

137

138

STATUTORY FINANCIAL

[10] Shareholders’ equity

Balance at 1/1/2023

Proﬁt for the period

Other comprehensive

Total comprehensive

Share-based

Purchase of

Cash settlement

Issuance of shares

Transaction costs

NCI put liability

Balance at

income

payment

treasury shares

of SOP's

related to issue of

31/12/2023

share capital

kEUR

Issued capital

1,075

1,160

Share premium

63,782

3,403

-12

67,173

Reserves

Treasury reserve

-6,138

For employee stock option plans

2,906

167

3,073

Accumulated deﬁcit

-43,911

-944

-44,854

Currency translation basis

of preparation differences

-1,153

-1,120

Revaluation of listed debt securities

-3

Other reserves

-2,070

437

-1,633

Subtotal reserves

-50,368

-944

-906

167

437

-50,669

Total Equity

14,490

-944

-906

167

3,488

-12

437

17,664

Balance at 1/1/2022

Proﬁt for the period

Other comprehensive

Total comprehensive

Share-based payment

Purchase of treasury Cash settlement of SOP‘s

Issuance of shares

NCI put liability

Balance at 31/12/2022

income

kEUR

Issued capital

1,075

Share premium

63,782

Reserves

Treasury reserve

-4,906

-1,232

-6,138

For employee stock option plans

2,827

2,906

Accumulated deﬁcit

-43,018

-893

-43,911

Currency translation basis

of preparation difference

-1,162

-1,153

Revaluation of listed debt securities

-15

-3

Other reserves

-2,812

742

-2,070

Subtotal reserves

-49,059

-893

-6

-899

-1,232

742

-50,367

Total Equity

15,798

-893

-6

-899

-1,232

742

14,490

139

140

STATUTORY FINANCIAL

Issued capital

Authorised capital

[13] Current liabilities

ad pepper media International N.V. has provided guarantees for all

outstanding liabilities of its subsidiary Webgains GmbH (registered

The authorised share capital of the Holding Company amounts to EUR

number: HRB 37198) that existed as at 31 December 2023, until these

4,000,000, divided into 80,000,000 shares, with a par value of EUR

31/12/23

31/12/22

are satisﬁed in full. As a result, the individual local statutory accounts

Ordinary Shares issued

and fully paid

0.05 each. The Board of Directors is authorised, upon approval by

of Webgains GmbH are exempt from audit under the requirements

kEUR

the Supervisory Board, to issue shares until 16 May 2027, or to grant

of Section 264 para. 3 German Commercial Code (HGB). As at 31

kEUR

Written put option

1,996

2,496

rights to subscribe for shares until the issued share capital amounts to

December 2023, the outstanding liabilities of Webgains GmbH amount

At 1/1/2022 and 31/12/2022

21,500,000

1,075

EUR 2,000,000.

to EUR 3,639k (2022: EUR 4,261k).

Accrued expenses

119

Issued for acquisition of the

Other current liabilities

253

490

investment in solute Holding

The future minimum payment obligations resulting from the contracts

GmbH & Co. KG

1,693,244

Lease liabilities

130

119

Proposed appropriation of the result for the

for short-term rent and other agreements in place as at 31 December

ﬁnancial year 2023

2023 are as follows:

At 31/12/2023

23,193,244

1,160

Total

2,498

3,114

The Board of Directors, with the approval of the Supervisory Board,

2023

2022

The new shares in ad pepper media International N.V. were issued and

proposes to allocate the loss for the ﬁnancial year 2023 amounting to

admitted for trading on the Frankfurt Stock Exchange in 2023 (2022: 0

EUR -944k to the accumulated deﬁcit. The ﬁnancial statements reﬂect

The put option liability relates to the obligation resulting from the

kEUR

shares).

this proposal.

written put/call option over the 35 percent non-controlling interest

No later than 1 year

138

in ad pepper media Spain S.A with no termination date. The amount

Later than 1 year and no later

of the ﬁnancial liability is the exercise price of the option based on a

than 5 years

Additional paid-in capital

[11] Non-current liabilities

contractually agreed EBIT multiple.

Later than 5 years

Proceeds from the issuance of shares increased the additional paid

Other current liabilities comprise mainly VAT payables and bonus

31/12/23

31/12/22

in capital by the amount by which they exceeded the par value of

accruals.

the shares. Furthermore, it also includes expenses incurred for stock

kEUR

[15] Other operating income

option plans.

Employee beneﬁts liability

[14] Contingent liabilities

Lease liability

120

Other operating income mainly includes management and shared

Contingent liabilities mainly result from rented ofﬁces and ofﬁce

services charged to subsidiaries of EUR 966k (2022: EUR 926k) and

kEUR

Total

120

equipment. The rent deposit for the ofﬁce facilities in Nuremberg,

other income resulting from the proﬁt distribution agreement with the

At 1/1/2022 and 31/12/2022

63,782

which is carried at its nominal value of EUR 33k (2022: EUR 33k), is

subsidiary ad pepper media GmbH of EUR -815k (2022: EUR -631k) and

Issuance of share capital for the acquisition of

The employee beneﬁts liability relates to the obligation resulting from

pledged as collateral for bank guarantees.

Webgains GmbH of EUR 952k (2022: EUR 568k).

the investment in solute Holding GmbH & Co. KG

3,403

the cash-settled option plan. For further details on cash-settled stock

Transaction costs for issued share capital

-12

option plans, please refer to Note [39] of the consolidated ﬁnancial

ad pepper media International N.V. has provided guarantees for all

At 31/12/2023

67,173

statements.

outstanding liabilities of its subsidiary, ad pepper media GmbH (register

number: HRB 16494) as at 31 December 2023, until these are satisﬁed

in full. As a result, the individual local statutory accounts of ad pepper

[12] Provisions

media GmbH are exempt from audit under the requirements of Section

Treasury reserves

264 para. 3 of the German Commercial Code (HGB). As at 31 December

2023, ad pepper media GmbH’s outstanding liabilities amounted to EUR

31/12/23

31/12/22

Purchase of treasury shares

407k (2022: EUR 614k).

By a shareholders’ resolution dated 13 June 2023, the Board of

kEUR

Directors was authorised to repurchase treasury stock of up to 50

ad pepper media International N.V. has provided guarantees for all

Subsidiaries

422

315

percent of the issued capital within the following 18 months. There is

outstanding liabilities of its subsidiary, ad agents GmbH (register

currently no active share repurchase programme.

Total

422

315

number: HRB 16494) as at 31 December 2023, until these are satisﬁed

in full. As a result, the individual local statutory accounts of ad agents

Number of shares outstanding

GmbH are exempt from audit under the requirements of Section 264

The number of shares issued and outstanding as at 31 December 2023

Provisions for subsidiaries relate to subsidiaries with a negative net

para. 3 of the German Commercial Code (HGB). As at 31 December

totalled 21,951,116 (2022: 20,257,872). Each share has a nominal value

asset value. For further information please refer to Note [5].

2023, ad agents GmbH’s outstanding liabilities amounted to EUR

of EUR 0.05.

5,750k (2022: EUR 6,432k).

141

142

STATUTORY FINANCIAL

[16] Employee information

[17] Information relating to the

Board of Directors and Supervisory Board

At the end of the ﬁnancial year, the Holding Company employed 17

people (2022: 19). All employees are employed outside the Netherlands.

Associated

Shares Stock

2023

2022

options

companies

kEUR

2023

2022

2023

2022

Wages and salaries

1,295

1,094

EMA Electronic

Media Advertising

Stock option expenses/income

235

Int. B.V.

9,486,402

Social security costs

242

212

Euro Serve Media

Other employment expenses

GmbH

1,641,786

556,163

Total

1,776

1,391

Josef Keller GmbH

The Board

& Co. Verlags-KG

336,463

BFB BestMedia-

Dr Jens Körner

These costs are included in the cost of sales, selling expenses, and

4Berlin GmbH

133,476

general and administrative expenses. Pension costs included in social

(Chief Executive Ofﬁcer)

security costs amount to EUR 85k (2022: EUR 73k).

Adolf Christ Verlag

Nuremberg, 10 April 2024

GmbH & Co. KG

101,787

The average number of personnel employed during the year was:

KELMAR Telefon-

buchverlag GmbH

11,615

KELSTA Telefon-

2023

2022

buchverlag GmbH

9,139

The Supervisory Board

Total

11,720,668

10,042,565

Michael Oschmann

Marketing

Thomas Bauer

The ultimate shareholders of both associated companies are Michael

Administration

Dagmar Bottenbruch

and Constanze Oschmann.

Dr Stephan Roppel

Total

[18] Independent auditor’s fees

Fee Ernst & Young Accountants LLP

2023

2022

kEUR

Audit of ﬁnancial statements

348

250

Other services

Total

348

250

[19] Events after the balance sheet date

Up until the day of authorisation for issuance, there were no events

that would have exerted substantial inﬂuence on the net assets,

ﬁnancial position or results of operations as at 31 December 2023.

143

144

OTHER INFORMATION

Statutory arrangements for appropriation of results

According to Article 15 of the Holding Company‘s articles of association,

the Annual General Meeting of shareholders determines the

appropriation of the Holding Company‘s net result for the year and the

previous year.

Independent auditor’s report

The independent auditor’s report on these ﬁnancial statements is

included on the following pages.

147

148

OTHER INFORMATION

INDEPENDENT AUDITOR’S REPORT

Information in support of our opinion

We designed our audit procedures in the context of our audit of the ﬁnancial statements as a whole and in forming our opinion thereon. The

following information in support of our opinion and any ﬁndings were addressed in this context, and we do not provide a separate opinion or

To: the shareholders and supervisory board of ad pepper media International N.V.

conclusion on these matters.

Our understanding of the business

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS 2023

ad pepper media International N.V. with its head ofﬁce in Nürnberg, Germany, is the head of a group of companies that provides online marketing

INCLUDED IN THE ANNUAL REPORT

services. We paid speciﬁc attention in our audit to a number of areas driven by the operations of the group and our risk assessment.

We determined materiality and identiﬁed and assessed the risks of material misstatement of the ﬁnancial statements, whether due to fraud or

error in order to design audit procedures responsive to those risks and to obtain audit evidence that is sufﬁcient and appropriate to provide a

Our opinion

basis for our opinion.

We have audited the ﬁnancial statements 2023 of ad pepper media International N.V. based in Amsterdam, The Netherlands. The ﬁnancial statements

comprise the consolidated and statutory ﬁnancial statements.

Materiality

In our opinion:

• The accompanying consolidated ﬁnancial statements give a true and fair view of the ﬁnancial position of ad pepper media International N.V. as at

Materiality

€210,000 (2022: €240,000)

31 December 2023 and of its result and its cash ﬂows for 2023 in accordance with International Financial Reporting Standards as adopted in the

Benchmark applied

Approximately 1% of revenue for 2023

European Union (EU-IFRSs) and with Part 9 of Book 2 of the Dutch Civil Code

Explanation

We have applied this benchmark based on our professional judgement and taking into account the expectations

• The accompanying statutory ﬁnancial statements give a true and fair view of the ﬁnancial position of ad pepper media International N.V.

of users of the ﬁnancial statements. Revenue was concluded to be the most appropriate measure as it is con-

as at 31 December 2023 and of its result for 2023 in accordance with Part 9 of Book 2 of the Dutch Civil Code

sidered to be reﬂective of the focus on growth in, and development of, the company’s activities. We determined

materiality consistent with last year.

The consolidated ﬁnancial statements comprise:

• The consolidated statement of ﬁnancial position as at 31 December 2023

• The following statements for 2023: the consolidated income statement, the consolidated statements of comprehensive income, changes in

We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the ﬁnancial

equity and cash ﬂows

statements for qualitative reasons.

• The notes comprising material accounting policy information and other explanatory information

We agreed with the supervisory board that misstatements in excess of €10,500, which are identiﬁed during the audit, would be reported to them, as

The statutory ﬁnancial statements comprise:

well as smaller misstatements that in our view must be reported on qualitative grounds.

• The balance sheet of the holding company as at 31 December 2023

• The proﬁt or loss account of the holding company for 2023

• The notes comprising a summary of the accounting policies and other explanatory information

Scope of the group audit

ad pepper media International N.V. is at the head of a group of entities. The ﬁnancial information of this group is included in the consolidated

Basis for our opinion

ﬁnancial statements.

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are

Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this

further described in the Our responsibilities for the audit of the ﬁnancial statements section of our report.

respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk

proﬁle of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete

We are independent of ad pepper media International N.V. (the company or the group) in accordance with the EU Regulation on speciﬁc requirements

set of ﬁnancial information or speciﬁc items.

regarding statutory audit of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit ﬁrms supervision act), the Verordening

inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect

We have assigned all group entities a full scope audit and performed the required audit procedures ourselves. By performing these procedures,

to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en

together with additional procedures at group level, we have been able to obtain sufﬁcient and appropriate audit evidence about the group’s ﬁnancial

beroepsregels accountants (VGBA, Dutch Code of Ethics).

statements to provide an opinion on the consolidated ﬁnancial statements.

We believe the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion.

149

150

OTHER INFORMATION

Teaming and use of specialists

Risk of the acquisition of the share in solute Holding GmbH & Co. KG not being at arms' length

We ensured that the audit team included the appropriate skills and competences which are needed for the audit of a listed client. We included

Fraud risk

In 2023 the Company acquired an interest of 25.64% in solute Holding GmbH & Co. KG. As this is a related party

specialists in the areas of IT audit, forensics, and income tax and have made use of our own experts in the areas of enterprise valuations and

transaction, we identiﬁed a fraud risk of the transaction not being at arms’ length.

share based payments.

Our audit

We refer to our key audit matter ‘Acquisition of the share in solute Holding GmbH & Co. KG’ that describes this fraud risk and

approach

our audit approach.

Our focus on fraud and non-compliance with laws and regulations

We considered available information and made enquiries of relevant executives, directors, legal, and the supervisory board.

Our responsibility

Although we are not responsible for preventing fraud or non-compliance and we cannot be expected to detect non-compliance with all laws

The fraud risks we identiﬁed, enquiries and other available information did not lead to speciﬁc indications for fraud or suspected fraud potentially

and regulations, it is our responsibility to obtain reasonable assurance that the ﬁnancial statements, taken as a whole, are free from material

materially impacting the view of the ﬁnancial statements.

misstatement, whether caused by fraud or error. The risk of not detecting a material misstatement resulting from fraud is higher than for one

resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Our audit response related to risks of non-compliance with laws and regulations

We performed appropriate audit procedures regarding compliance with the provisions of those laws and regulations that have a direct effect on

Our audit response related to fraud risks

the determination of material amounts and disclosures in the ﬁnancial statements. Furthermore, we assessed factors related to the risks of non-

We identiﬁed and assessed the risks of material misstatements of the ﬁnancial statements due to fraud. During our audit we obtained an

compliance with laws and regulations that could reasonably be expected to have a material effect on the ﬁnancial statements from our general

understanding of the company and its environment and the components of the system of internal control, including the risk assessment process

industry experience, through discussions with the board of directors, reading minutes, inspection of other relevant documents regarding compliance

and the board of directors’ process for responding to the risks of fraud and monitoring the system of internal control and how the supervisory board

with laws and regulations and performing substantive tests of details of classes of transactions, account balances or disclosures.

exercises oversight, as well as the outcomes. We refer to Section “04.5 Risk report” of the report of the board of directors for the board of directors’

(fraud) risk assessment.

We also inspected lawyers’ letters and correspondence with regulatory authorities and remained alert to any indication of (suspected) non-

compliance throughout the audit. Finally we obtained written representations that all known instances of non-compliance with laws and regulations

We evaluated the design and relevant aspects of the system of internal control and in particular the fraud risk assessment, as well as the code of

have been disclosed to us.

conduct and whistleblower guideline. We evaluated the design and the implementation of internal controls designed to mitigate fraud risks.

Our audit response related to going concern

As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to ﬁnancial reporting fraud, misappropriation of assets

and bribery and corruption in close co-operation with our forensic specialists. We evaluated whether these factors indicate that a risk of material

misstatement due to fraud is present.

As disclosed in section “01 Letter from the board of directors” and in the management statements in section “04.1 Governance” to the ﬁnancial

statements, the ﬁnancial statements have been prepared on a going concern basis. When preparing the ﬁnancial statements, the board of directors

We incorporated elements of unpredictability in our audit. We also considered the outcome of our other audit procedures and evaluated whether any

made a speciﬁc assessment of the company’s ability to continue as a going concern and to continue its operations for the foreseeable future.

ﬁndings were indicative of fraud or non-compliance.

We discussed and evaluated the speciﬁc assessment with the board of directors exercising professional judgment and maintaining professional

We addressed the risks related to management override of controls, as this risk is present in all companies. For these risks we have performed

skepticism. We considered whether the board of directors’ going concern assessment, based on our knowledge and understanding obtained through

procedures among other things to evaluate key accounting estimates for management bias that may represent a risk of material misstatement

our audit of the ﬁnancial statements or otherwise, contains all relevant events or conditions that may cast signiﬁcant doubt on the company’s ability

due to fraud, in particular relating to important judgment areas and signiﬁcant accounting estimates as disclosed in section ‘Signiﬁcant accounting

to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the

judgements, estimates and assumptions’ of the notes to the consolidated ﬁnancial statements. We have also used data analysis to identify and

related disclosures in the ﬁnancial statements or, if such disclosures are inadequate, to modify our opinion.

address high-risk journal entries and evaluated the business rationale (or the lack thereof) of signiﬁcant extraordinary transactions, including those

with related parties.

Based on our procedures performed, we did not identify material uncertainties about going concern. Our conclusions are based on the audit

evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as

The following fraud risks identiﬁed required signiﬁcant attention during our audit.

a going concern.

Presumed risks of fraud in revenue recognition

Our key audit matters

Fraud risk

We presumed that there are risks of fraud in revenue recognition. We evaluated that revenue for the segments ad pepper,

Key audit matters are those matters that, in our professional judgment, were of most signiﬁcance in our audit of the ﬁnancial statements. We have

ad agents and Webgains in particular give rise to such risks.

communicated the key audit matters to the supervisory board. The key audit matters are not a comprehensive reﬂection of all matters discussed.

Our audit

We describe the audit procedures responsive to the presumed risk of fraud in revenue recognition in our key audit matter

approach

“Risk in revenue recognition”.

Following the investment in an associate, a new key audit matter “Aquisition of the share in solute Holding GmbH & Co. KG” has been deﬁned.

151

152

OTHER INFORMATION

Risks in revenue recognition

Acquisition of the share in solute Holding GmbH & Co. KG

Risk

As disclosed in more detail in Note 5 “Revenue from contracts with customers” and section “Rendering of services” of the

Risk

As disclosed in note 4 “Business combinations & investments in an associate”, on 2 October 2023 the group signed a

Summary of material accounting policies in the consolidated ﬁnancial statements, revenue from contracts with customers

purchase agreement of a 25.64 percent interest in solute Holding GmbH & Co. KG, Hanover, Germany, which is the holding

consist of Webgains, ad pepper and ad agents services. As the group concluded that it does not control these services

company of solute GmbH, an operator of price comparison portals in Germany. Signiﬁcant inﬂuence over the associate was

before they are transferred to customers, the group determined that it is an agent in all its customer contracts and records

obtained on 30 October 2023, the registration day of ad pepper as shareholder.

revenue at the net amount that it retains for its services.

Incidentally, as disclosed the Related party disclosures (note 35), this transaction is regarded as a so-called related party

Revenue recognition is a routine process in which high volume of transactions are being processed. Judgement is required

transaction as the chairman of the supervisory board owns shares in each of the selling entities. As this is a related party

to determine the amount to be recognized as return assets and refund liabilities for transactions in the recall period of

transaction, we identiﬁed a fraud risk of the transaction not being at arms’ length and consider this a key audit matter.

Webgains, as well as to determine the stage of completion for an advertisement campaign in the ad pepper segment. As

Our audit

Our audit procedures included obtaining an understanding and evaluating the company’s policies and procedures relating to

revenue is considered a key performance indicator as well as a determinant of bonusses and share option value for the

approach

identifying related parties and mitigating the risks related to transactions with related parties. In relation to the acquisition,

board of directors, the supervisory board well as to others, we assess that revenue is subject to a higher likelihood of

as part of the required risk assessment procedures, we considered amongst others the background, nature of involvement,

manipulation. As a result, we consider this a key audit matter.

and the holding period of the prior interest held by the chairman of the supervisory board.

Our audit

Our audit procedures included an evaluation of the appropriateness of company’s revenue recognition policies in accordance

approach

with IFRS 15 “Revenue from Contracts with Customers” and understanding of the internal (IT) control environment includ-

Furthermore, through discussions with the board of directors and the supervisory board, reading minutes, inspection of other

ing the evaluation of design and implementation of control effectiveness in the area of automated revenue recognition of

relevant documents and written conﬁrmation, we evaluated the statement that the chairman of the supervisory board did not

Webgains in cooperation with our IT audit team members.

participate in the decision-making concerning the acquisition. Moreover, we inspected the underlying contracts supporting

the purchase price of the investment. We have reviewed the valuation report related to this transaction as prepared by a

We discussed with and challenged the board of directors in their evaluation of revenue arrangements and the related

management specialist and involved our own valuation specialists to assess the valuation and determine whether the trans-

analysis of recognizing revenue as principal or agent. We validated the board of directors’ analysis based on inspection and

action has been performed at arm’s length.

interpretation of agreements with both customers and suppliers.

Key observations Based on the audit procedures performed, we did not identify a reason to conclude that the acquisition was not an at arm’s

length transaction.

We applied a data-analytics driven audit approach to revenue in which we veriﬁed that revenue recognized during the year

subsequently resulted in cash receipts. We also performed testing of revenue related accounts such as trade receivables and

we tested whether revenue was recognized in the correct period (cut-off of revenue between 2023 and 2024). Furthermore,

we used data analysis to identify and address high-risk journal entries. We performed procedures to evaluate key accounting

estimates for management bias in respect of the judgment required in revenue recognition in the correct period related to

REPORT ON OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT

Webgains and the ad pepper segments.

Key observations Based on the audit procedures performed, we did not identify any material misstatements in the revenue recognized in 2023.

The annual report contains other information in addition to the ﬁnancial statements and our auditor’s report thereon.

Based on the following procedures performed, we conclude that the other information:

• Is consistent with the ﬁnancial statements and does not contain material misstatements

• Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and the other information as required by

Part 9 of Book 2 of the Dutch Civil Code and as required by Sections 2:135b and 2:145 sub section 2 of the Dutch Civil Code for the remuneration report

We have read the other information. Based on our knowledge and understanding obtained through our audit of the ﬁnancial statements or otherwise,

we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements

of Part 9 of Book 2 and Section 2:135b sub-Section 7 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is

substantially less than the scope of those performed in our audit of the ﬁnancial statements.

The board of directors is responsible for the preparation of the other information, including the management report in accordance with Part 9 of Book

2 of the Dutch Civil Code and other information required by Part 9 of Book 2 of the Dutch Civil Code. The board of directors and the supervisory board

are responsible for ensuring that the remuneration report is drawn up and published in accordance with Sections 2:135b and 2:145 sub section 2 of

the Dutch Civil Code.

153

154

OTHER INFORMATION

REPORT ON OTHER LEGAL AND

DESCRIPTION OF RESPONSIBILITIES REGARDING

REGULATORY REQUIREMENTS AND ESEF

THE FINANCIAL STATEMENTS

Engagement

Responsibilities of the board of directors and the supervisory board for the ﬁnancial statements

We were engaged by the supervisory board as auditor of ad pepper media International N.V. on 27 July 2018, as of the audit for the year 2018 and

The board of directors is responsible for the preparation and fair presentation of the ﬁnancial statements in accordance with EU-IFRSs and Part 9

have operated as statutory auditor ever since that date.

of Book 2 of the Dutch Civil Code. Furthermore, the board of directors is responsible for such internal control as the board of directors determines is

necessary to enable the preparation of the ﬁnancial statements that are free from material misstatement, whether due to fraud or error.

No prohibited non-audit services

As part of the preparation of the ﬁnancial statements, the board of directors is responsible for assessing the company’s ability to continue as a

going concern. Based on the ﬁnancial reporting framework mentioned, the board of directors should prepare the ﬁnancial statements using the

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on speciﬁc requirements regarding statutory

going concern basis of accounting unless the board of directors either intends to liquidate the company or to cease operations, or has no realistic

audit of public-interest entities.

alternative but to do so. The board of directors should disclose events and circumstances that may cast signiﬁcant doubt on the company’s ability to

continue as a going concern in the ﬁnancial statements.

European Single Electronic Reporting Format (ESEF)

The supervisory board is responsible for overseeing the company’s ﬁnancial reporting process.

ad pepper media International N.V. has prepared the annual report in ESEF. The requirements for this are set out in the Delegated Regulation (EU)

Our responsibilities for the audit of the ﬁnancial statements

2019/815 with regard to regulatory technical standards on the speciﬁcation of a single electronic reporting format (hereinafter: the RTS on ESEF).

In our opinion the annual report prepared in the XHTML format, including the (partially) marked-up consolidated ﬁnancial statements as included in

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufﬁcient and appropriate audit evidence for our opinion.

the reporting package by ad pepper media International N.V., complies in all material respects with the RTS on ESEF.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during

The board of directors is responsible for preparing the annual report, including the ﬁnancial statements, in accordance with the RTS on ESEF, whereby

our audit.

the board of directors combines the various components into a single reporting package.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to

Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package complies with the RTS on

inﬂuence the economic decisions of users taken on the basis of these ﬁnancial statements. The materiality affects the nature, timing and extent of our

ESEF.

audit procedures and the evaluation of the effect of identiﬁed misstatements on our opinion.

We performed our examination in accordance with Dutch law, including Dutch Standard 3950N, ”Assurance-opdrachten inzake het voldoen aan

We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on

de criteria voor het opstellen van een digitaal verantwoordingsdocument” (assurance engagements relating to compliance with criteria for digital

Auditing, ethical requirements and independence requirements. The Information in support of our opinion section above includes an informative summary

reporting). Our examination included amongst others:

of our responsibilities and the work performed as the basis for our opinion.

• Obtaining an understanding of the company’s ﬁnancial reporting process, including the preparation of the reporting package

Our audit further included among others:

• Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and designing and

• Performing audit procedures responsive to the risks identiﬁed, and obtaining audit evidence that is sufﬁcient and appropriate to provide a basis for

performing further assurance procedures responsive to those risks to provide a basis for our opinion, including:

our opinion

• Obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance

• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,

document and the XBRL extension taxonomy ﬁles, has been prepared in accordance with the technical speciﬁcations as included in the RTS on ESEF

but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control

• Examining the information related to the consolidated ﬁnancial statements in the reporting package to determine whether all required mark-

• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the

ups have been applied and whether these are in accordance with the RTS on ESEF

board of directors

• Evaluating the overall presentation, structure and content of the ﬁnancial statements, including the disclosures

• Evaluating whether the ﬁnancial statements represent the underlying transactions and events in a manner that achieves fair presentation

155

156

OTHER INFORMATION

Communication

We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and signiﬁcant audit ﬁndings,

including any signiﬁcant ﬁndings in internal control that we identify during our audit. In this respect we also submit an additional report to the audit

committee of the supervisory board in accordance with Article 11 of the EU Regulation on speciﬁc requirements regarding statutory audit of public-

interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.

We provide the supervisory board with a statement that we have complied with relevant ethical requirements regarding independence, and to

communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,

related safeguards.

From the matters communicated with the supervisory board, we determine the key audit matters: those matters that were of most signiﬁcance in the

audit of the ﬁnancial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the

matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.

Amsterdam, 10 April 2024

Ernst & Young Accountants LLP

signed by A.N.A. Drost

157

158

AT A GLANCE

ADDRESSES

The ad pepper Group subsidiaries operate

in the following countries:

ad pepper media International N.V.

France

Spain

Netherlands

Group headquarters Nuremberg

Webgains France SARL

ad pepper media Spain S.A.

Webgains B.V.

Frankenstrasse 150 C

21 Boulevard Haussmann

Avenida Alberto Alcocer 46A, 1ºA

Concertgebouwplein 15 H,

90461 Nuremberg

75009 Paris

28016 Madrid

1071LL

GERMANY

FRANCE

SPAIN

Amsterdam

NETHERLANDS

Phone +49 (0) 911 929057-0

Webgains, S.L.

Germany

Avenida Alberto Alcocer 46A, 4ºB

28016 Madrid

ad pepper media GmbH

SPAIN

Frankenstrasse 150 D

Webgains Ltd

90461 Nuremberg

70 Colombo Street

Italy

GERMANY

London SE1 8DP

UNITED KINGDOM

ad agents GmbH

Webgains Italy S.r.l.

Am Joachimsberg 10-12

Via San Giovanni Sul Muro, 18

Webgains Ltd

71083 Herrenberg

20121 Milan

The Quorum

GERMANY

ITALY

Bond Street

South Bristol BS1 3AE

Webgains GmbH

UNITED KINGDOM

Switzerland

Frankenstrasse 150 C

90461 Nuremberg

GERMANY

ad agents AG

Europaallee 41

Webgains GmbH

8021 Zürich

Frauenstraße 17

SWITZERLAND

80469 München

GERMANY

ad agents AG

Via Maistra 100

7504 Pontresina

SWITZERLAND

161

162

AT A GLANCE

DATES AND CONTACTS

Contact for investors

Disclaimer

Dr Jens Körner (CEO)

This Annual Report contains forward-looking statements which are

ad pepper media International N.V.

Company calendar

based on current assumptions and assessments made by the manage-

Frankenstrasse 150 C

ment of ad pepper media International N.V. These statements are not

90461 Nuremberg

All ﬁnancial and press data relevant for the capital market at a glance:

to be understood as a guarantee that such expectations will in fact

GERMANY

materialise. Future developments and the results actually achieved by

Phone: +49 (0) 911 929057-0

ad pepper media International N.V. and its afﬁliated companies depend

Annual Report 2023

10 April 2024

Fax: +49 (0) 911 929057-157

upon a number of risks and uncertainties and may therefore deviate

E-mail: ir@adpepper.com

signiﬁcantly from the forward-looking statements. Several of these

Annual General Meeting

factors are beyond ad pepper media’s control and cannot be precisely

(Amsterdam, The Netherlands)

18 June 2024

www.adpeppergroup.com

estimated in advance, such as the future economic environment and

Quarterly Report I/2024

24 May 2024

the actions of competitors and other market players. There are no plans

Quarterly Report II/2024

16 August 2024

to update the forward-looking statements nor does ad pepper media

Imprint

International N.V. undertake any separate obligation to do so.

Quarterly Report III/2024

19 November 2024

Editorial responsibility:

Headquarters Nuremberg, Germany

ad pepper media International N.V.

Frankenstrasse 150 C

90461 Nuremberg

GERMANY

Phone: +49 (0) 911 929057-0

Fax: +49 (0) 911 929057-157

E-mail: info@adpepper.com

www.adpeppergroup.com

Prime Standard, Frankfurt Stock Exchange

Our 2023 Annual Report as well as the Interim Financial Reports for

2023 are available at www.adpeppergroup.com under:

ISIN: NL0000238145

HRB Nuremberg 17591

Investor relations / Publications / Financial reports.

VAT-ID-No.: DE 210757424

Board of Directors:

Dr Jens Körner, CEO

163

164

GLOSSARY

Afﬁliate:

Display advertising:

Website that adds banners/buttons/text links that link through to

Delivery of ads to the target group, avoidance of waste coverage, and

merchant sites, in order to earn commission based on leads/sales

the efﬁcient management of digital advertising activities in accordance

generated.

with customer-deﬁned KPIs.

Non-IFRS ﬁnancial measures

Afﬁliate marketing:

e-commerce:

EBIT:

Afﬁliate marketing is a form of internet advertising where-by online

The electronic commerce describes every type of transaction on the

Income before Interest and Tax.

vendors (merchants) place advertising banners on partner websites

internet. The most well-known type of e-commerce is online shopping,

(afﬁliates) in order to reach more customers. Whenever a user clicks

although it is much more than marketing and sales online; various

EBITDA:

on the banner and buys the product or carries out a pre-deﬁned action,

online services, service and management of business transaction

Income before Interest, Tax, Depreciation and Amortisation.

the website operator who displayed the ad receives a commission. This

processes are also part of e-commerce.

commission is based on the sales rate of the products and services

EBT:

referred by the afﬁliate.

Lead:

Income before Tax.

A successfully established contact between a product or service

Afﬁliate network:

provider and a potential customer.

Equity ratio:

Afﬁliate networks facilitate cooperation between merchants and

Shareholders’ Equity/Total Assets.

afﬁliates, act as providers of technological and/or other services who

Lead generation:

take over tracking and invoicing on behalf of afﬁliates and merchants.

A successfully established contact between a product or service

Gross sales:

Also frequently known as afﬁliate platform.

provider and a potential customer. A ‘qualiﬁed lead’ signiﬁes that the

Gross sales represent the total amount billed and billable to clients

customer has conﬁrmed interest, for example through registering for a

by the Group, net of discounts, VAT and other sales-related taxes.

Audience targeting:

newsletter or submitting a contact form.

Disclosure of gross sales information is not required under IFRS;

Audience targeting is the ability to take your full audience of prospective

however, it is voluntarily disclosed from 1 January 2018 onwards in the

customers and segment it into groups based on different criteria,

Performance marketing:

Consolidated Income Statement since management has concluded that

including online behavioural characteristics, demographics, interests, and

Online marketing tools used to calculate success rates. Search engine

the information is useful for users of the ﬁnancial statements.

intent. Audience targeting helps more effectively deliver personalised

marketing, afﬁliate marketing, and e-mail marketing all fall under

and optimised experiences based on customer needs and interests.

the category of performance marketing, as do banner ads, which are

Liquid funds:

delivered in a targeted manner with fees based on success rates (‘cost

Cash & cash equivalents including listed debt securities.

Cookie:

per click,’ ‘cost per sale,’ ‘cost per lead’).

Small text ﬁle used to enhance the user experience of websites by

Media cost:

Publisher:

storing settings entered on site, for instance a country selection on an

Media cost relate to payments made to suppliers of ad inventory

entry page. Used on most programmes for tracking sales.

Website operators are generally known as publishers. They play a

(commonly referred to as media buys and publishers). Disclosure

particular role in afﬁliate marketing. This is where the publishers take

of media cost information is not required under IFRS; however, it is

CPA:

on the functions of distribution partners (afﬁliates).

voluntarily disclosed from 1 January 2018 onwards in the Consolidated

Cost per acquisition – a billing method whereby the advertising

ganisation being subject to fraudulent activity.

Income Statement as management has concluded that the information

customer only pays for their online ad when a user carries out a

is useful for users of the ﬁnancial statements.

SEA:

particular action that has been pre-deﬁned by the advertiser (user

makes purchase or registers for a newsletter, for example). Also known

Search Engine Advertising – Search engine marketing covers all

as pay per action.

marketing activities related to search engines. This includes paid

Business terms

keyword advertising, improved ranking within the search results, and

CPC:

afﬁliate marketing.

Ad:

Cost per click – billing unit for online advertising. Costs are calculated

Short for advertisement in print or on TV or otherwise.

SEO:

according to the number of times a user clicks on an ad (website

banner). Also known as pay per click.

Includes all measures designed to feature websites as high as possible

Ad spending:

on the result pages of search engines.

The amount of money spent on advertising for a product or activity.

CPL:

Cost per lead – fee per dataset. Also known as PPL (pay per lead).

Advertiser:

Advertisers/Merchants (providers and operators of the programme)

CPM:

advertise their products and services on the afﬁliates’ websites and

Cost per mile – shows the costs per 1,000 ad views (see ad impression)

pay them a commission on sales generated.

for an advertising booking.

167

168

ad pepper media International N.V.

Frankenstrasse 150 C

90461 Nuremberg

GERMANY