ad pepper media International N.V.

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Directive (Besluit Artikel 10 Overnamerichtlijn) 34 04.2 The ad pepper Share 37 04.3 Business Activity 41 Disclaimer regarding Forward-looking Statements 43 The ad pepper Group 43 Segments of the ad pepper Group 45 Employees and Values 48 04.4 Economic Development 49 Macroeconomic Framework 51 Presentation of Earnings Position 52 Presentation of Financial and Net Asset Position 53 04.5 Risk Report 55 Foreword 57 Risk Classiﬁcation 57 Operational risk 57 Strategic risk 60 Financial risk 61 Compliance risk 64 Risk Appetite 65 Evaluation of Risk Management System Effectiveness 67 Opportunities and Outlook 68 04.6 Responsibility Statement 69 05 Consolidated Financial Statements 73 06 Notes to the Consolidated Financial Statements 85 07 Statutory Financial 129 08 Other Information 145 09 At a Glance 157 10 Glossary 163 KEY FIGURES AT A GLANCE 2024 2023 Gross sales¹ (kEUR) 89,656 85,988 Revenue 21,450 21,749 Gross proﬁt (kEUR) 20,861 20,876 Gross margin (percent) in relation to gross sales 23.3 24.3 Gross margin (percent) in relation to revenue 97.3 96.0 EBITDA² (kEUR) 2,004 24 EBIT³ Operating proﬁt/(loss) (kEUR) 1,160 -994 EBT4 (Proﬁt/(loss) before taxes) (kEUR) 2,908 -631 Net proﬁt/(loss) (kEUR) 2,419 -699 Earnings per share (basic, EUR) 0.09 -0.05 Total assets (kEUR) 48,370 42,941 Shareholders’ equity (kEUR) 20,603 18,881 Equity ratio5 (percent) 42.6 44.0 Liquid funds6 (kEUR) 24,155 23,365 Number of employees (as at 31 December) 205 217 2024 2023 2024 2023 2024 2023 Gross sales EBITDA Liquid funds 1 Gross sales represent the total amount billed and billable to clients by the Group, net 3 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]. 4 Earnings before Tax. 2 EBITDA is an alternative performance measure. It is deﬁned as earnings before 5 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 6 Liquid funds is an alternative performance measure and includes cash and 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. 2024 2023 Cash and cash equivalents 24,155 19,842 2024 2023 Listed debt and marketable securities 0 3,523 Liquid funds 24,155 23,365 EBIT 1.160 -994 Depreciation & Amortisation 844 1,018 EBITDA 2,004 24 01 « LETTER FROM THE BOARD OF DIRECTORS 01 01 LETTER FROM 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, as mentioned above. Our equity ratio is at a solid 42.6 percent, and the Company continues to have no external loans. This sets us apart from many of our peers. We plan to continue As we reﬂect on the ﬁnancial year 2024, we ﬁnd ourselves once again navigating through a volatile environment. Our Group, along with the broader ﬁnancing our growth from our cash reserves and operating cash ﬂow in the next ﬁnancial year. Based on the strong balance sheet and the ﬁnancial market, has faced the prolonged impact of macroeconomic shifts, persistent inﬂationary pressure, and geopolitical complexities. Elevated costs expectations for 2025, we therefore believe it is justiﬁed to assume that the Company’s continued existence as a going concern is assured. We in key areas such as energy and food, carried over from the previous year, and sustained high interest rates have continued to suppress consumer carefully review acquisitions and are more inclined to pursue them if they offer potential synergies. conﬁdence and spending across Europe. At the end of the ﬁnancial year 2024, the Group’s headcount stood at 205 employees, which is 12 fewer than at the end of 2023, reﬂecting the In addressing these challenges, our strategic focus was twofold: to invest in emerging opportunities while simultaneously keeping our cost structure adjustments in our operating expenses which were necessary in order to present the turn-around in the business year under review. as lean as possible. This balanced yet bold approach is central to our ambition of transforming the Group into a stronghold of innovation and sustainability for the future. The ﬁnancial year behind us has again not been an easy one. We would therefore like to take this opportunity to thank you, our stakeholders and shareholders, for your perseverance and patience. A very special thank you goes to our employees and their families who have actively supported us One example of such strategic decisions was our 2023 investment in solute Holding GmbH & Co. KG. The ad pepper Group successfully acquired 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 24.64 percent of the Germany-based solute GmbH, a pioneer in the e-commerce sector and operator of the renowned price comparison platform constructive support. In the light of the progress presented in this report, we can be proud of what we have achieved, and this would not have been “billiger.de”. Here, we are aiming to secure a majority stake and believe we are making progress in that respect, which would truly represent a possible without our many long-standing and new clients, for whom we give our best every day. Thank you for the trust you have placed in us and for “game-changer”, not only from a business but also from a capital market point of view. As far as the potential operational beneﬁts of the envisaged our excellent working relationships. transaction are concerned, the beneﬁts are pretty much straightforward: The synergies between our businesses include complementary business models, technological capabilities, customer relationships, and geographic reach. The acquisition of solute GmbH represents a pivotal step in establishing a dynamic, innovative, and ﬁnancially robust publicly listed leader in performance marketing and digital marketplaces. Yours faithfully, Turning to our ﬁnancial results for the past business year, gross sales amounted to EUR 89,656k (2023: EUR 85,988k), while Group revenues totalled The Board of Directors EUR 21,450k (2023: EUR 21,749k). EBITDA showed an impressive turn-around and improved signiﬁcantly to EUR 2,004k, which compares with EUR ad pepper media International N.V. 24k in the previous year. The EBITDA achieved in 2024 on a Group level was once again largely driven by outstanding results from the Webgains segment. Here, the EBITDA increased signiﬁcantly from EUR 2,060k in the previous year to EUR 2,808k. Thanks to an excellent year-end rally in Q4 2024, a large portion of the EBITDA was generated in the ﬁnal quarter. Cash and cash equivalents stood at EUR 24,155k (31 December 2023: EUR 23,365k), and hence near historical peak levels. Dr Jens Körner, CEO The development of the three operating segments in detail Nuremberg, 30 April 2025 If we look at the performance of all individual segments, as mentioned above, Webgains’ performance stands out due to strong EBITDA contributions in all four quarters. All in all, this segment’s revenue increased by 3.2 percent to EUR 12,355k (2023: EUR 11,968k) and its EBITDA improved to EUR 2,808k (2023: EUR 2,060k). ad agents’ revenue decreased by 6.5 percent to EUR 7,000k (2023: EUR 7,486k), however, the EBITDA of this segment signiﬁcantly improved to EUR 722k (2023: EUR 208k). Finally, the ad pepper segment saw another transition year with revenue declining by 8.6 percent to EUR 2,094k (2023: EUR 2,292k) while the EBITDA improved to EUR -273k (2023: EUR -483k). 9 02 « REPORT OF THE SUPERVISORY BOARD 02 02 REPORT OF THE SUPERVISORY BOARD REPORT OF THE SUPERVISORY BOARD DEAR SHAREHOLDERS, effect 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 2024 ﬁnancial year, the Supervisory Board performed its duties pursuant to the law and the Articles of Association. It advised the Board of 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 Directors on a regular basis, monitored the Board of Directors in its management of the business, and was involved in decisions of key importance members of the Board of Directors. Company stock options become exercisable once ad pepper’s share price exceeds a certain threshold, but only for the Company and the Group. vest 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 2024 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 2024. Moreover, we collectively and individually interacted with the CEO and with the senior to long-term interests. The details of the compensation structure disclosed in this Annual Report reﬂect the size of the Company and take into management outside the formal Supervisory Board meetings. The Chairman of the Supervisory Board and the CEO met regularly for bilateral consideration the fact that the Board of Directors currently consists of only one member (see Note 39). Consequently, the Supervisory Board did not discussions virtually and in person about the progress of the Company on a variety of matters. The Supervisory Board meetings were well conduct a scenario analysis whereby different performance assumptions and corporate actions were examined. The compensation policy is expected attended in 2024 with an attendance rate of 100 percent of each Supervisory Board member. On 26 November 2024 the audit committee reported to remain largely unchanged in 2025. to the Supervisory Board on 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 2024 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 Composition of the Supervisory Board senior management on a regular basis, e.g. 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 The proﬁle and composition of the Supervisory Board as a whole must be aligned with the proﬁle and strategy of the Company. The Supervisory with it and hence complied with 1.1.3 of the Dutch Corporate Governance Code (“Code”). The Supervisory Board approved the ﬁnancial planning Board strives for a balanced distribution of speciﬁc expertise in relation to the business activities, strategy and long-term goals of the Company. for 2024 and discussed (potential) acquisitions with the Board of Directors, e.g. further acquisitions of stakes in solute Holding GmbH & Co Each member of the Supervisory Board must be capable of assessing the broad outline of the Supervisory Board’s overall policy objectives. Given the KG. Topics discussed also included annual and interim results, technological developments, the organisation of sales and marketing activities, size of the Company, the proﬁle of the Supervisory Board provides, that the Supervisory Board, shall at least have three members. Since the General Corporate Governance, investor relations, compensation and human resources. The Supervisory Board also met and engaged EY Accountants B.V. Meeting of Shareholders held on 19 May 2020 the Supervisory Board has consisted of four members. One Supervisory Board member holds long- appointed as independent auditor for the ﬁnancial year 2024 by the Annual General Meeting of Shareholders (the “General Meeting”) held on 18 term share positions. The current composition of the Supervisory Board is as follows: June 2024 and discussed the outcome of the 2023 audit procedures on 22 March 2024. • Michael Oschmann (male, born 1969; German citizen) In addition, the Supervisory Board discussed the general and ﬁnancial risks of the business and the ﬁndings of an assessment of the internal risk Supervisory Board Chairman throughout the entire ﬁnancial year up to and including 31 December 2024 management and control systems. Consistent with the requirements of the Dutch Corporate Governance Code, the work of the Supervisory Board and Graduate in Business Administration, Managing Director of Telefonbuchverlag Hans Müller GmbH & Co. KG, Nuremberg 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 Supervisory Board member since 10 January 2000; appointed until General Meeting 2025 of Directors. • Thomas Bauer (male, born 1963; German citizen) The evaluation of the Supervisory Board is carried out by following a detailed questionnaire. The review and discussion included reviews of the Supervisory Board member throughout the entire ﬁnancial year up to and including 31 December 2024 composition and expertise of the Supervisory Board, its time management, its effectiveness, its dynamics and succession planning, as well as its CEO of Apotheker Walter Bouhon GmbH, Managing Director of Thomas Bauer GmbH, Nuremberg organisation and meeting procedures, provision of information and performance of the Chairman and the individual members. The evaluation has Supervisory Board member since 20 March 2013; appointed until General Meeting 2027 shown that the Supervisory Board is functioning well and will continue to also regularly discuss its own effectiveness and value for the Company. The evaluation of the Board of Directors is based on an individual evaluation and discussion of its strength and weaknesses among the members of the • Dr Stephan Roppel (male, born 1964; German citizen) Supervisory Board, including core abilities, risk assessment, business culture and human resources management. Supervisory Board member throughout the entire ﬁnancial year up to and including 31 December 2024 Supervisory Board member since 20 March 2013; appointed until General Meeting 2028 As in previous years, the Supervisory Board decided to be informed in greater detail by the management of each business unit (who attended the meetings of the Supervisory Board in rotating order) – among other things – about technical matters, clients, market trends and, once a year, by a • Dagmar Bottenbruch (female, born 1960; German and US citizen) Dutch law ﬁrm about the requirements of the Dutch Corporate Governance Code. Supervisory Board member throughout the entire ﬁnancial year up to and including 31 December 2024 General Partner of Segenia Capital Management GmbH, Frankfurt/Main Supervisory Board member since 19 May 2020; appointed until General Meeting 2028 Remuneration of the Board of Directors (see also Remuneration Report) The required Dutch gender diversity quota of 30 percent within the Supervisory Board is currently not met. In case of new appointments, the required In accordance with the Company’s Articles of Association in their current version, the compensation paid to members of the Board of Directors is quota will be taken into consideration. determined by the General Meeting following submission of corresponding proposals by the Supervisory Board. The Board of Directors’ compensation consists of ﬁxed and variable components. Variable compensation consists of annual performance-based payments (bonus), as well as long-term incentives such as stock options. The ﬁxed compensation component is regularly determined in January/February of each year with retrospective 13 14 02 02 REPORT OF THE SUPERVISORY BOARD 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 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 in accordance with Dutch company law and German capital market law, in particular the German Securities Trading Act (WpHG) as well as the pursuant to best practice provision 2.1.8 vii. because he holds (indirectly) more than 50 percent in the Company. On 30 March 2018, the Supervisory Market Abuse Regulation (MAR) according to (EU) No. 596/2014. Common shares are admitted to trading on the Prime Standard of Frankfurt Stock Board formed an audit committee currently consisting of Michael Oschmann, Dr Stephan Roppel and Thomas Bauer (Chairman). The Supervisory Exchange. The Supervisory Board is committed to increasing shareholder value in the interests of all shareholders and has always set the highest Board is aware of the fact that the ad pepper Group does not have an internal audit function and has discussed this with the Board of Directors. The standards for the Company’s Corporate Governance principles. Although, consistent with its proprietary guidelines, the Company generally applies Supervisory Board came to the conclusion that due to the size of the Company and the size of the Supervisory Board, the Company currently does not the requirements laid down in the Dutch Corporate Governance Code, deviations may nevertheless occur on account of the legal requirements need an internal audit function, which may change in the future, however, depending on further Company growth. The Supervisory Board reviews applicable to the ad pepper Group. In the Governance section of this Annual Report, the ad pepper Group reports in detail on compliance with the annually the need to establish an internal audit function. Dutch Corporate Governance Code. 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. Unqualiﬁed independent auditor’s report on the Financial Statements We have assisted in evaluating acquisitions and reﬁning the long-term value creation strategy. On behalf of the Supervisory Board, I would like to express our appreciation to all ad pepper employees for their efforts and achievements throughout 2024. The independent auditor EY Accountants B.V. audited the Consolidated Financial Statements of ad pepper media International N.V. for the 2024 ﬁnancial year and issued an unqualiﬁed independent auditor’s report. For the Supervisory Board The Consolidated Financial Statements, the Report of the Board of Directors and the independent auditor’s report were made available to the Michael Oschmann, Supervisory Board for review. Meetings were held between the Company’s audit committee and the auditor, who presented their audit plan, key Supervisory Board Chairman ﬁndings of their audit and answered related questions. The Supervisory Board acknowledged and approved the ﬁndings of the audit. The Supervisory Board acknowledged and approved the audit results. Nuremberg, 30 April 2025 On 30 April 2025, the Supervisory Board discussed and approved the Consolidated Financial Statements prepared by the Board of Directors for the 2024 ﬁnancial year. 15 03 « REMUNERATION REPORT 03 03 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, which is 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 a percentage of EBITDA (starting from the ﬁrst EUR). The pre-set Group- 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 EBITDA target for 2024 was partly reached 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 2024, a bonus amounting to EUR 142k was awarded. he would be entitled for the remainder of the term of his service accepted during the 2024 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 2024 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 2024 remuneration report will be submitted to the 2025 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 plans 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 amounted to 187,500, of which 46,875 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 options have been exercised in 2024. No stock option plans were 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 granted in the year 2024. least 30 percent of the voting rights in the Company. 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 Other beneﬁts Loans performance targets for the members of the Board of Directors, reviews decide otherwise. their performance against these predetermined targets and determines the remuneration and beneﬁts in line with contractual terms. The According to the Company’s Articles of Association, the Company 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 shall indemnify each (former) member of the Board of Directors been granted any loans. designed to balance incentives for short-term operating performance who was or is involved, or threatens to become involved, in his/her with incentives for long-term sustainable value creation while taking The bonus payment for the members of the Board of Directors is capacity as (former) member of the Board of Directors, as a party to Clawback Provisions into account the interests of shareholders and other stakeholders. determined by the Supervisory Board. Consistent with the Board of any past, present or anticipated future actions or proceedings of any The remuneration policy is clear and understandable, focuses on long- Directors remuneration policy, the Supervisory Board can choose from a nature whatsoever, against all conceivable ﬁnancial loss or harm that 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 he/she has in fact and in all reasonableness suffered in connection Performance-based variable remuneration is subject to clawback pay ratios within the Company. The full policy can be found on the for performance-based variable remuneration. For 2024, in-line with with the actions or proceedings. In addition, the Company has taken provisions pursuant to Dutch law. Company’s website. the service agreement entered into with the Board of Directors, the out insurance cover for them, such as personal accident insurance and Supervisory Board decided to use earnings before interest, taxation, directors and ofﬁcers (D&O) insurance. depreciation and amortisation (EBITDA) as sole measure. By using EBITDA, the Supervisory Board has opted for a key performance indicator Other beneﬁts may include but are not limited to life insurance, (KPI) that more closely reﬂects the Company’s ability to generate disability insurance, long-term health care insurance, company vehicle operating cash ﬂows. (with the tax on the pecuniary beneﬁt from personal use being payable by the member concerned), cell phone usage and contributions to private pensions. The ad pepper Group has no pension obligations towards members of the Board of Directors. 19 20 03 03 REMUNERATION REPORT 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 2020 2021 2022 2023 2024 2024 Plan Grant date Share Exercise Number Number Number Number Number J. Körner, J. Körner, vs vs vs vs vs options price (EUR) of options of options of options of options of options CEO (2024) CEO (2023) 2019 2020 2021 2022 2023 kEUR granted outstanding awarded forfeited exercised outstanding kEUR kEUR Director’s 01/01/2024 2024 2024 2024 31/12/2024 Fixed remuneration remuner- Board of Base salary 299 299 ation Directors Other benefits¹ 20 20 J. Körner, J. Körner BoD 2023 01/2023 187,500 1.86 187,500 0 0 46,875 140,625 CEO +29% -18% -48% 32% 10% 425 Variable remuneration Remuner- On-year variable 142 0 Supervisory ation of the Board Multi-year variable² -36 68 Supervisory S. Roppel SB 2017 04/2017 10,000 1.9751 5,000 0 5,000 0 0 Extraordinary items 0 0 Board -8.33% +9.10% +0% +0% +0% 24 SB 2023 01/2023 18,000 1.86 18,000 0 0 0 18,000 Pension expenses 0 0 Company's performance T. Bauer SB 2023 01/2023 18,000 1.86 18,000 0 0 0 18,000 Total remuneration 425 387 EBITDA +87% -33% -71% -98% >100% 2.003 D. Bottenbruch SB 2023 01/2023 18,000 1.86 18,000 0 0 0 18,000 Proportion of ﬁxed and variable remuneration3 75%/25% 82%/18% Year An employee equity-participation programme involving 30,000 options was granted for Supervisory Board members (“Executive SOP 2017 SB”). The cost of the programme over the entire period was EUR 16k. The remaining 5,000 options have been forfeited with maturity of the plan on 11 April 1 Contributions to private pension plan and health insurance. 2019 2020 2021 2022 2023 2024 2 Board of Directors holds SOP which are measured at the end of each reporting period at 2024.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 the fair value, see also Note [38]. (EUR 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. 3 Higher share of 2024 variable remuneration is driven by the signiﬁcantly higher EBITDA Average The options forfeit, if the holder terminates his employment contract with the Company for whatever reason, or if the employment contract is expiring achieved in 2024, see also table “Five-Year comparison”. employee 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 remuneration 69 66 55 54 72 82 The amounts shown in the tables are those recognised in proﬁt or loss 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 during the reporting period. Income resulting from the share-based Ratio CEO 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 and average payments is due to the decreased fair value of the cash-settled stock at the earliest one year after being granted. The options forfeit, if the Company terminates the employment contract for an important reason. employee 8.6 11.7 11.8 6.2 5.4 5.2 option plan and the corresponding adjustment of the liability through * proﬁt or loss. In the ﬁnancial year 2024 0 shares (2023: 0 shares) have been issued in relation to exercise of the aforementioned rights. Employees of the company 11 13 12 15 14 12 ** Supervisory Board Compensation 2024 2023 Pay ratios peaked during the pandemic (relatively high EBITDAs/pay-outs to CEO) and are back to pre-pandemic levels since 2022. EUR EUR ad pepper media International N.V. Michael Oschmann 6,000 6,000 Thomas Bauer 6,000 6,000 The average employee remuneration is obtained by dividing the total personnel expenses as stated in the notes of the respective Company’s Dr Stephan Roppel 6,000 6,000 Annual Report (after subtracting the CEO’s remuneration) by the Dagmar Bottenbruch 6,000 6,000 reported average number of Full Time Equivalents (“FTE”) (minus one). Total remuneration for members of the Supervisory Board amounted to EUR 24k in the past ﬁnancial year (2023: EUR 24k). The annual amount paid to Supervisory Board members is unchanged for at least ﬁve years. 21 22 04 « REPORT OF THE BOARD OF DIRECTORS 04.1 « GOVERNANCE 04.1 04.1 GOVERNANCE 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 18 June 2024. In all, 11,128,188 voting rights, or 50.70 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 require the approval of the Supervisory Board, certain resolutions of provision of information to the members of the Supervisory Board and ofﬁce address is Frankenstrasse 146, 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 2023 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 Dagmar Bottenbruch and Dr Stephan Roppel as members of the 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 Supervisory Board, the adoption of the Supervisory and Management Supervision and the Dutch Corporate Governance Code (the “Code”). on the outcome of his discussions and meetings. He also initiates the Board’s remuneration policy as well as the authorisation to buy back 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 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 2024 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 2024 amounting provide information on our compliance with the best practice provisions provide all information relevant to the conﬂict. The Board of Directors to EUR 2,419k to the accumulated deﬁcit without payment of dividend. 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 The 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 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. above, macroeconomic headwinds resulted in declining revenues and of the Board of Directors, which deﬁnes responsibilities, competencies least four times a year and whenever a majority of its board members lower proﬁtability in the past ﬁnancial year. However, we successfully 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 navigated our Company through another unprecedented ﬁnancial year, 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 and although we did not meet our ﬁnancial targets, we successfully 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) sharpened our proﬁle as one of the leading performance marketing 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 companies in Europe and therefore believe that 2024 has also Board on important matters and submits certain important decisions to and received or capable of being produced in writing – provided that all General Meeting may be convened by the Supervisory Board or the contributed to the Company´s long-term value target. the Supervisory Board for approval. Supervisory Board members are familiar with the resolution to be passed Board of Directors if deemed necessary. and none of them objects to this decision-making process. 27 28 04.1 04.1 GOVERNANCE GOVERNANCE Internal audit function During 2024, we continued to increase our focus on environmental, and believes it contributes positively to the way we evaluate situations the Supervisory Board of ad pepper concerning the acquisition by ad social and governance topics. A key milestone in this context is and make decisions. The more we utilise the differences between us pepper of the interest in solute. This has been discussed and disclosed the EU Corporate Sustainability Reporting Directive (CSRD), which and the more we can cooperate and learn from each other, the stronger during Supervisory Board meetings accordingly. The Supervisory Board annually reviews the need to establish an requires large companies to disclose more extensive information on we will be as a company that serves a highly diverse society and internal audit function and following these discussions makes a environmental, social, and governance aspects. However, according stakeholders. The Supervisory Board and the Board of Directors are No other conﬂicts of interest were reported in the 2024 ﬁnancial year. recommendation to the Board of Directors. Considering the current to the latest proposals by the European Commission, the current fully aware that both boards currently lack gender diversity; we do not size of the operations of the Company and taking into account its risk legislation does not impose a sustainability reporting obligation on have an even distribution of seats between men and women and we do proﬁle, the Supervisory Board advised to the Board of Directors that it Insider trading policy our company. We are closely monitoring these developments and will not have a formalized diversity policy. We will take greater board-level does not deem it necessary to create an internal audit function. continue to engage in voluntary sustainability initiatives. gender diversity into account for future appointments, as required by law, without compromising our commitment to hiring the best qualiﬁed The ad pepper Group has a strict Code of Conduct on insider trading. The Auditor Given that we are not subject to CSRD reporting requirements, we have individuals for positions. In any future vacancies that arise, however, insider trading policy with regard to inside information and securities not established a dedicated ESG reporting team. However, we remain gender diversity will subsist to be one of the criteria in the selection trading was ﬁrst adopted by the Board of Directors in 2016. This committed to responsible business practices and continue to integrate process, and the Company shall continue to strive towards achieving a policy is publicly available on the Company’s website. In accordance The independent auditor is appointed by the General Meeting. The relevant ESG considerations into our operations where applicable. diverse composition of its boards within the coming years. with applicable law and regulations (including the EU Market Abuse Supervisory Board can nominate a candidate for this appointment, for Regulation), the Company maintains insider lists and exercises controls which purpose the Board of Directors advises the Supervisory Board. EU Taxonomy is a cornerstone of the EU’s sustainable ﬁnance In the Netherlands, an important milestone was reached on 1 January around the dissemination and disclosure of potentially price-sensitive The compensation of the independent auditor and any commissioning framework and an important market transparency tool. It helps direct 2022. With effect from this date, new legislation became effective information. Transactions in the Company’s shares carried out by the of the external auditor must be approved by the Supervisory Board investments to the economic activities most needed for the transition to achieve a more balanced ratio of seats between men and women Board of Directors and the Supervisory Board members (including their following consultation with the Board of Directors. The independent to a low-carbon economy, in line with the European Green Deal on the supervisory boards of publicly traded companies and large closely associated persons) are as and when required notiﬁed to the auditor is required to attend the General Meeting and the Supervisory objectives. The Taxonomy is a classiﬁcation system that deﬁnes criteria companies. While the obligations arising from the legislation applies Dutch Authority for the Financial Markets (AFM), in accordance with Board meeting at which the independent auditor’s report on its audit of for economic activities that are aligned with a net zero trajectory by to large companies only (and the Company did not fall under the the applicable provisions of the EU Market Abuse Regulation. the ﬁnancial statements is discussed. 2050 and the broader environmental goals other than climate. It is a respective criteria in the past ﬁnancial year) and the Supervisory Board key part of the EU Corporate Sustainable Reporting Directive (CSRD). had only one female member in the ﬁnancial year under review, we Substantial shareholdings Statement by the Board of Directors take good note of the recent changes to the Code and aim for a higher (Dutch Corporate Governance Code) Under the Taxonomy, economic activities that qualify as environmentally share of female members in the Company’s key roles. For instance, sustainable are those that: (i) contribute substantially to any one of six the Company’s so-called Executive team, which consists of employees Shareholders owning 3 percent or more of the issued share capital of environmental objectives using science-based criteria; (ii) cause no in key positions across all segments, already consists in 2024 of 45 a listed company (a substantial shareholding or short position) must For the purpose of complying with best practice provision 1.4.3 of the signiﬁcant harm to any of the other environmental objectives; (iii) ensure percent female members, representing a 5 percent increase compared report this to the AFM as soon as this threshold is reached or exceeded. Code the Board of Directors believes that, to the best of its knowledge: compliance with minimum social safeguards and (iv) meet the technical to 2023. We aim to maintain this level and strive to further increase it Subsequently, notiﬁcations to the AFM must be made as soon as a eligibility screening criteria that have been set by the Commission. (e.g., to 50 percent) in the long term. substantial shareholding or short position reaches, exceeds or falls • the Company’s internal risk management and control organisation Companies must disclose speciﬁc KPIs – revenue, capital expenditure below set thresholds. The thresholds are 3 percent, 5 percent, 10 provides reasonable assurance that its ﬁnancial reporting does not (capex) and operating expenditure (opex) – which indicate the portion of percent, 15 percent, 20 percent, 25 percent, 30 percent, 40 percent, 50 contain any errors of material importance; Conﬂicts of interest their economic activities which are environmentally sustainable. percent, 60 percent, 75 percent and 95 percent of the company’s issued • the internal risk management and control processes in relation to share capital. Shareholder’s disclosures can be inspected in the register ﬁnancial reporting functioned properly in 2024; We believe our commitment to conducting business in an Under the criteria set out in the Dutch Corporate Governance Code, kept by the AFM, and for the ad pepper Group the shareholdings as at • the report provides sufﬁcient insights into failings, if any (no failings environmentally sustainable way, as described in this section, enables three of the four current members of the Company’s Supervisory Board 31 December 2024 are also disclosed on page 34 of this Annual Report. in 2024), in the effectiveness of the internal risk management and the Group to make a broader contribution to the EU’s environmentally count as independent. Michael Oschmann, Supervisory Board Chairman control systems; sustainable objectives. It should be noted that the Taxonomy is subject of the Group, is not counted as independent in this respect as he is • the aforementioned systems provide reasonable assurance that the Publication requirements under German law to periodic revisions, which in the future may deﬁne a separate Managing Director of EMA Electronic Media Advertising International ﬁnancial reporting does not contain any material inaccuracies; category and speciﬁc technical qualiﬁcation criteria for performance- B.V., which holds more than 10 percent of the Company’s share capital. • based on the strong balance sheet it is justiﬁed that the ﬁnancial marketing activities. In accordance with Section 26 (1) WpHG, the Company, in its capacity reporting is prepared on a going concern basis; and During ﬁnancial year 2024, ad pepper negotiated with additional as a so-called domestic issuer (“Inlandsemittent”) under the German • the report states those material risks and uncertainties that are shareholders of solute Holding GmbH & Co. KG (“solute”), with one Securities Trading Act, must publish any shareholding notiﬁcations relevant to the expectation of the Company’s continuity for the Diversity representing a so-called related party according to Dutch corporate under Dutch law immediately, but no later than three trading days period of twelve months after the preparation of the report. law. Michael Oschmann, the Chairman of the Supervisory Board of after receiving them, via qualiﬁed media outlets. The Company We aim for diversity at every level. We do not see diversity as ad pepper, holds (i) an indirect interest of 50.53 percent in the share must also transmit the notice to the German Federal Financial The Board of Directors is responsible for the establishment and merely a matter of gender or ethnicity but also of personality, skills capital of ad pepper and (ii) participating interests in excess of 20 Supervisory Authority (BaFin) and to the German Company Register adequate functioning of a system of governance, risk management and and knowledge. We need men and women, people from different percent in one of the potential selling entities. Therefore, Michael (“Unternehmensregister”). internal controls in the Company. It reports on and is accountable for backgrounds and cultures. The ad pepper Group values this diversity Oschmann did not and will not participate in the decision-making in internal risk management and control systems to the Supervisory Board and its Audit Committee. 29 30 04.1 04.1 GOVERNANCE GOVERNANCE The Company has implemented a risk management and internal controls Periodically paid ﬁxed remuneration (base salary) his/her capacity as (former) member of the Board of Directors, as a Principle 1.3 Internal audit function designed to ensure that strategic objectives are met by creating focus, party to any past, present or anticipated future actions or proceedings integrating management control over the Company’s operations, The base salary of the members of the Board of Directors is determined of any nature whatsoever, against all conceivable ﬁnancial loss or harm Given the size of the Company and its risk proﬁle, the Company does ensuring compliance with applicable laws and regulations and by on an annual basis by the Supervisory Board. The ﬁxed remuneration that he/she has in fact and in all reasonableness suffered in connection not have an internal audit function of its own. Nevertheless, the Board safeguarding its assets and the reliability of its ﬁnancial reporting and is determined by the Supervisory Board, usually within the ﬁrst three with the actions or proceedings. of Directors and the Supervisory Board may implement internal audits its disclosures. The Company’s risk management approach is embedded months of each calendar year and with retrospective effect as of 1 on a case-by-case decision using internal and external resources. As in its periodic business planning and review cycle and forms an integral January of that year. The ﬁxed remuneration is typically increased in line Other beneﬁts may include but are not limited to life insurance, in 2023, this has not occurred during 2024. The Company thus does part of business management. with the inﬂation rate, but the Supervisory Board may decide otherwise. disability insurance, long-term health care insurance, Company vehicle not fully comply with best practice provisions 1.3.1, 1.3.2, 1.3.3, 1.3.4, and cell phone usage. 1.3.5, 1.3.6 and 2.6.4 of the Code. With respect to ﬁnancial reporting a structured self-assessment and Short-term performance-related variable remuneration (bonus) monitoring process is used Company-wide to assess, document, review In general, the Company, its subsidiaries and the companies whose Principle 2.1 Composition and size and monitor compliance with internal control over ﬁnancial reporting. Due to the business environment of the Company, it is difﬁcult to link the ﬁnancial details are consolidated by the Company shall not grant variable remuneration to previously determined and inﬂuenceable long- loans, advances or guarantees to members of the Board of Directors, It should be noted that the above does not imply that these systems and term targets. The short-term variable remuneration for members of the but the Supervisory Board may resolve that the Company shall do so Provision 2.1.1. states that the Supervisory Board should strive for a procedures provide certainty as to the realisation of operational and Board of Directors should in principle consist of an annual performance- if the Supervisory Board deems that the granting of loans, advances or diverse composition with respect to nationality, age, gender, and ﬁnancial business objectives, nor can they prevent all misstatements, related bonus. The bonus is determined by the Supervisory Board on the guarantees is in the interest of the Company. educational and work background and should deﬁne speciﬁc targets inaccuracies, errors, fraud and non-compliance with rules and regulations. basis of measurable and controllable targets such as the Company’s to achieve this. The Supervisory Board believes that both the Board income before taxation (i.e. EBITDA to be more precise) or other ﬁnancial During 2024, the Company was in compliance with the remuneration of Directors and the Supervisory Board are and will be composed in or operational targets, as determined by the Supervisory Board. policy. such a manner that the combination of experience, expertise and Remuneration Policy independence of its members satisﬁes the requirements set out in its (see also chapter Remuneration Report) proﬁle. We believe that the composition of our boards allows them to Medium- and long-term performance-related properly and effectively carry out their duties. Our focus for new board General variable remuneration (stock options) members is on experience and education instead of explicit gender, COMPLY OR EXPLAIN age or nationality diversity targets. We therefore do not comply with The remuneration and the contracts between the Company and the The Company aims for a business policy which takes into account the best practice provision 2.1.1 of the Code. Finally, Michael Oschmann, members of its Board of Directors are determined by the Supervisory interests of the shareholders and its other stakeholders. The Company Chairman of the Supervisory Board of the Group, cannot be regarded as Board within the scope of the remuneration policy that has been wishes to promote commitment of the members of the Board of independent as he (indirectly) holds more than 50 percent in the capital Introduction adopted by the General Meeting. Directors to build the shareholders’ value on a long-term basis. The of the Company. Company may therefore introduce one or more stock option plans The Corporate Governance structure and compliance with the Code is 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 According to provision 2.1.5 and 2.1.6 the Company should have a the joint responsibility of the Board of Directors and the Supervisory motivate the members of the Board of Directors as top-tier managers linked to the performance of the Company. The exercise price of the Diversity and Inclusion (D&I) policy for the enterprise and should Board. They are accountable for this responsibility to the General of an international Company in a fast-moving commercial environment, stock options, the number of stock options and the other terms and explain the D&I policy and the way in which it is implemented in Meeting. We continue to seek ways to improve our Corporate while protecting and promoting the objectives of the Company and conditions shall be laid down in the stock option plans. Practice. ad pepper had 205 employees at the end of the business Governance by measuring it against international best practice. The shareholders’ value. year under review and may introduce such policies at a later stage, i.e. Code was last amended on 20 December 2022. The new Code took when the Group has grown big enough. effect on 1 January 2023 and can be found at www.mccg.nl. Remuneration payable in instalments The remuneration for the members of the Board of Directors may consist of the following items: Non-application of speciﬁc best practice provisions is not per se The members of the Board of Directors have entered into part-time Principle 2.2 Appointment, succession and evaluation considered objectionable by the Code and may well be justiﬁed because • Periodically paid remuneration (ﬁxed base salary) employment contracts with the Company. Upon dismissal of a member of particular circumstances relevant to a company. In accordance with • Short-term performance-related variable remuneration (bonus) of the Board of Directors, the Company is in principle obliged to pay Members of the Supervisory Board are appointed for a term of four Dutch law, we disclose in our Report of the Board of Directors the • Medium- and long-term performance-related his/her ﬁxed and variable salary and other beneﬁts for the remaining years and can be reappointed. The Company has adopted a policy of application of the Code’s best practice provisions. To the extent that we variable remuneration (stock options) term of the contract, but the Supervisory Board is authorised to deviate remaining open to the possibility that a Supervisory Board member will do not apply certain best practice provisions, we state the reasons. We • Other beneﬁts from this principle. be reappointed after the maximum term contained in provision 2.2.2 take a positive view of the Code and apply most of the best practice due to his or her great knowledge of the Company and high level of provisions. involvement. In addition, the Supervisory Board will retire by rotation Other beneﬁts and may be reappointed in order to ensure that the lowest possible The following provides an overview of exceptions that we have identiﬁed: number of Supervisory Board members retire from the Board at the The Company shall indemnify each (former) member of the Board of same time. The latter is not posted on the Company’s website. The Directors who was or is involved, or threatens to become involved, in Company therefore does not comply with best practice provisions 2.2.2 31 32 04.1 04.1 GOVERNANCE GOVERNANCE and 2.2.4. The Company does not have a selection and appointment Principle 3.1 Remuneration policy – Management Board Principle 3.4 Accountability for implementation amounts to EUR 1,159,662 (31 December 2023: EUR 1,159,662) and committee and does not comply with provision 2.2.5. As the Supervisory of remuneration policy is divided into 23,193,244 (31 December 2023: 23,193,244) common Board currently has just four members, the number of committees must In deviation of best practice provision 3.1.2 of the Code, options bearer shares with a nominal value of EUR 0.05 (31 December 2023: be reduced to the minimum required. granted to members of the Board of Directors under stock option plan The existing contract with the Board of Directors does not contain any EUR 0.05) each. do not contain performance conditions and can be partly exercised after extraordinary elements; the remuneration essentially consists of ﬁxed a period of one year. Although deviating from the Code, the Company and variable remuneration. In the event of more complex contracts Obligation of shareholders to Principle 2.3 Organisation of the Supervisory Board and reports believes that the structure of the stock option plans serves its purpose being concluded in the future, the Company will consider publishing a disclose share ownership to retain members of the Board of Directors and to align the interests of disclosure on its website. If the Supervisory Board considers it necessary, it can, according to shareholders, management, Board of Directors and other stakeholders. the Company’s Articles of Association, install committees from among In addition, the Supervisory Board did not conduct scenario analyses The AFM has to be notiﬁed of major shareholdings in respect of the its members, such as an audit committee, remuneration committee, whereby the impact of different performance assumptions and Principle 4.2 Provision of information Company in accordance with the Financial Market Supervision Act and a selection and appointment committee and shall draw up a set corporate actions on variable remuneration of the Board of Directors (Wet op het ﬁnancieel toezicht) and the Ordinance to Disclose Major of regulations for each committee. The Supervisory Board consists was examined. The Supervisory Board concluded this is not necessary While the Company focusses on the corporate calendar that covers Shareholdings and Capital Investments in Institutions Issuing Securities of four members. The Company decided to not form a remuneration due to the simple structure of variable compensation. all publication dates and planned conferences and will update (Besluit melding zeggenschap en kapitaalbelang in uitgevende committee and a selection and appointment committee, and it is instead investor presentations posted on the Company’s website whenever instellingen). the collegiate responsibility of the Supervisory Board to prepare the new information is available so that no single investor can gain an decision-making of the Supervisory Board and perform the tasks of these Principle 3.2.1 Remuneration committee proposal information advantage, due to the size of the Company and owing Due to the listing of the shares on the German Frankfurt Stock Exchange, committees as set out in the Code, unless stated otherwise herein. to the large number of meetings not every single meeting with or the Company must also in its capacity as a so-called domestic issuer A remuneration policy has been implemented and approved by the presentation to analysts, investors and institutional investors can be (“Inlandsemittent”) under the German Securities Trading Act publish The Company does therefore not fully comply with best practice General Meeting. However, given the size of the Company and the made available to follow in real time. The Company also does not post any shareholding notiﬁcations under Dutch law immediately, but no provisions 2.3.2, 2.3.3, 2.3.4 and 2.3.5. The Supervisory Board, due to Supervisory Board, a remuneration committee has not been and is not a policy on bilateral contacts with the shareholders on its website. This later than three trading days after receiving them, via qualiﬁed media its size, did not nominate a vice-chairman and does therefore not fully intended to be established. is in deviation from best practice provisions 4.2.2 and 4.2.3. outlets in accordance with Section 26 (1) WpHG and article 17 MAR comply with best practice provisions 2.3.6 and 2.3.7. respectively. The Company must also transmit the notice to the German Federal Financial Supervisory Authority (BaFin) and to the German Principle 3.2.3 Severance payments Company Register (“Unternehmensregister”). Principle 2.4 Decision-making and functioning DECREE ARTICLE 10 TAKEOVER The compensation paid in the event of dismissal of Mr Körner may Share ownership as at 31 December 2024: Due to its size, the Supervisory Board did not nominate a vice-chairman exceed one year’s salary, however, severance pay will not be awarded if DIRECTIVE (BESLUIT ARTIKEL 10 and does therefore not fully comply with best practice provision 2.4.3. the agreement is terminated early at the initiative of the Board member, OVERNAMERICHTLIJN) Shares Shares or in the event of seriously culpable or negligent behaviour on the part of the member of the Board of Directors. In the event of his contract Number Percentage Principle 2.6 Misconduct and irregularities being terminated without cause as deﬁned by the applicable law, the EMA Electronic Media Company would remain obliged to compensate such member for the Introduction Advertising International B.V. 9,486,402 40.90 The Company has no plans to establish “whistleblower” guidelines remaining term of his employment agreement. The Company believes Treasury stock 1,242,128 5.36 governing the reporting of misconduct by Company employees. Given that the contractual arrangement is well justiﬁed due to the long tenure In accordance with Article 10 of the Takeover Directive (Dertiende the Company’s small size, there are short lines of communication and of this board member. The Company does therefore not comply with Euro Serve Media GmbH 1,641,786 7.08 Richtlijn), companies with securities that are admitted to trading on the Board of Directors is highly involved in the day-to-day business best practice provision 3.2.3. See also page 35 “Payments to employees a regulated market are obliged to disclose certain information in their Free ﬂoat 10,822,928 46.66 and employees already have the possibility of reporting suspected on termination of employment in connection with a public takeover bid”. board reports. This obligation has been implemented in Dutch law Total 23,193,244 100 irregularities at the Company on a general, operational and informal through Decree Article 10 Takeover Directive. The Group must disclose level without jeopardising their legal position. The Company certain information that might be relevant for companies considering therefore does not fully comply with best practice provision 2.6.1. Principle 3.3 Remuneration Supervisory Board Table shows shareholders holding >3 percent in the Company’s share capital. making a public offer with respect to the Group. The information that However, a Code of Conduct, setting out business principles for our the Group is required to disclose, including a corresponding explanatory employees and rules of conduct, was adopted in 2007 which allows Supervisory Board members have been granted stock options, e.g. section, is presented below. for the possibility of anonymously reporting concerns about actual or under the newly issued 2023 plan. The Company does not comply with Appointment and dismissal of suspected non-compliance with the Company’s standards stipulated best practice provision 3.3.2 of the Code and deems this appropriate members of the Board of Directors in its Code of Conduct. given the size of the Group and long-term involvement of the members Capital structure of the Supervisory Board. Furthermore, the grant of 18,000 options for The members of the Board of Directors are appointed on the basis three Supervisory Board members (i.e. excluding the Chairman of the The Company has only one class of shares (ordinary shares) which of a binding nomination by the Supervisory Board. Where no binding Supervisory Board) in connection with the 2023 plan is regarded to be carry equal rights. As at 31 December 2024, the issued share capital nominations have been made, the General Meeting is free to select. more symbolic rather than part of a regular remuneration. 33 34 04.1 04.1 GOVERNANCE GOVERNANCE 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 18 June 2024, 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 2024 (2023: nil Shareholders’ agreement on limitations 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 the Group that could lead to any restriction on the transferability of takes effect. In the event of extraordinary termination of his contract, shares or of voting rights on shares. Mr 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 Appointment and suspension of his current annual target income. A change of control in this respect Supervisory Board members arises when a shareholder gains control over the Company as deﬁned by Paragraph 29 WpÜG, i.e. acquisition of at least 30 percent of the The General Meeting appoints Supervisory Board members and 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 Board member is decided by the General Meeting by way of an absolute majority of votes cast. The Supervisory Board consists of no fewer than three members, including a Chairman, who will retire by rotation as deﬁned in writing by the Supervisory Board and may be reappointed in line with the respective legal requirements. In principle, the lowest possible number of Supervisory Board members should retire from the Board at the same time. 35 36 04.2 « THE AD PEPPER SHARE 04.2 04.2 THE AD PEPPER SHARE THE AD PEPPER SHARE THE AD PEPPER SHARE Furthermore, article 28(2) of the Articles of Association provides that The ad pepper share started the year with a share price of EUR 2.44 the Board of Directors, after approval from the Supervisory Board, is which also represented the annual high. The ad pepper share for a authorised to exclude or restrict pre-emption rights with regard to the better part of the past year oscillated around the EUR 2.0 mark and issue of shares in the Company. ﬁnally closed at EUR 1.98 as per end of 2024. Capital structure As of 31 December 2024, the Company held 1,242,128 own shares The Company’s shares are traded on the Prime Standard of the Shareholder Engagement (2023: 1,242,128). Frankfurt Stock Exchange under the symbol “APM” and the ISIN code NL0000238145. The Board of Directors values the insight gained from shareholder Key share ﬁgures engagement and places signiﬁcant importance on maintaining close 2024 2023 The authorised share capital of the Company amounts to EUR relationships with shareholders, taking account of and responding to 4,000,000, divided into 80,000,000 shares, with a par value of EUR Outstanding shares 23,193,244 23,193,244 their views. The Group’s CEO and investor relations team communicate 0.05 each. Article 28(1) of the Company’s articles of association on a regular basis with shareholders and analysts and endeavour to Market capitalisation (in EUR) 45.92m 56.59m (the “Articles of Association”) provides that the Board of Directors, facilitate open engagement. In 2024, frequent investor meetings after approval from the Company’s Supervisory Board, is authorised Year end (in EUR) 1.98 2.44 were held. The Group has an investor relations website at www. to issue ordinary shares in the Company up to the point that the adpeppergroup.com where all regulatory news as well as other Year high (in EUR) 2.44 2.62 issued share capital of the Company reaches EUR 2,000,000. As per information on the ad pepper Group is available. We aim to maintain Year low (in EUR) 1.66 1.84 end of 2024 the Board of directors is still authorised to issue up to strong dialogue with our shareholders and regularly collect feedback. 16,806,756 new ordinary shares with a nominal value of EUR 0.05 Please contact [email protected]. each (2023: 16,806,756). Total number of issued shares less own shares. Share price performance in past 12 months (Xetra) 3.00 3.00 2.75 2.75 2.44 2.50 2.50 2.25 2.25 2.00 2.00 1.75 1 . 7 5 1.66 1.50 1.50 1.25 1.25 1.00 1.00 January February March April May June July August September October November December January 39 40 04.3 « BUSINESS ACTIVITY 04.3 04.3 BUSINESS ACTIVITY 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 marketing network). This report of the Board of Directors includes forward-looking The holding company assumes responsibility for the transfer of know- statements that are based on management estimations, which are how between the segments, the strategic focus, as well as ﬁnancing valid at the time when this management report was prepared. Such and liquidity as part of the overall governance and administration of statements relate to future periods, or are characterised by terms the Group. The ad pepper Group’s overall strategy is to support and such as “expect”, “forecast”, “predict”, “intend”, “plan”, “estimate” strengthen each segment individually, as each business has its own and “anticipate”. Forward-looking statements can entail risks and distinctive culture, clients, product range and regional focus. All three uncertainties. Many such risks and uncertainties are determined business segments offer their clients performance-based solutions. by factors that cannot be inﬂuenced by the ad pepper Group. As This means that the advertiser only pays if there are measurable a consequence, actual results may differ signiﬁcantly from those results (completion of speciﬁc actions). The most common models in described below. 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 of increasing importance of digital processes for businesses leads to an Europe’s leading international performance marketing groups. Founded increase in the corresponding budgets, and the vast amounts of data in 1999, the ad pepper Group is one of the pioneers in the online thus generated require thorough analysis (preferably in real time). To be marketing business. With eleven ofﬁces in Germany, Italy, France, successful in the ﬁeld of digital marketing, companies therefore need to Spain, Switzerland, Poland, 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 / Poland video and mobile – to name just a few – continue to expand their market share. The ad pepper Group provides services 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. 43 44 04.3 04.3 BUSINESS ACTIVITY BUSINESS ACTIVITY SEGMENTS OF THE Webgains Taking local conditions into account, ad pepper is able to optimise Furthermore, Webgains has recently launched the Afﬁliate Discovery campaigns for the target markets. Whether working with an agency product to create smarter connections, as well as The Tag for AD PEPPER GROUP or a direct client, the aim is always to deliver the best possible Webgains has been part of the ad pepper Group since 2006. Today, seamless integration of technology partners. result. What sets ad pepper apart from its competitors? Many years the registered and approved afﬁliate network serves over 1,800 of experience – and iLead. This unique platform enables the agency clients worldwide, from start-ups to global brands, in more than 170 The current strategy focuses on a service-oriented and performance- to generate customised campaigns that are adapted to the speciﬁc global markets. When it comes to designing local and international differentiated approach. By investing in talent and technology, ad pepper markets of their clients in next to no time. And the iLead platform was campaigns, Webgains not only beneﬁts from its strong publisher Webgains has created the optimum blend of human and artiﬁcial developed in-house. With the help of iLead, over 30,000 campaigns 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 have been successfully launched and managed worldwide and millions motivated experts with excellent market knowledge, which they scalable, international campaigns. Meanwhile, customers can count leading performance marketing company, ad pepper specialises in of qualiﬁed leads have been generated. continuously develop. Webgains became the world’s ﬁrst certiﬁed on outstanding data security at all times and beneﬁt from near real- lead generation and targeting speciﬁc audiences. ad pepper works B-corp afﬁliate Network in 2023, balancing globally aligned standards time performance reporting. with its clients to develop online marketing strategies for over 50 Ofﬁces: Nuremberg / Madrid with hi-performance and proﬁts. countries worldwide and uses the latest technologies for each project. Ofﬁces: Nuremberg / Madrid / Bristol / Whether at the local, national or international level, ad pepper helps Thanks to partnerships with over 250,000 publishers, Webgains’ London / Paris / Milan / Amsterdam / Warsaw its customers meet their goals by developing the most efﬁcient online clients have access to one of the world’s leading, performance marketing strategies for their budget. 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 Webgains Webgains 45 46 04.3 04.3 BUSINESS ACTIVITY 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 205 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 2024 which is 12 less compared to the ﬁgure at the end as their personalised consulting and support services, which are model through our business practices, community involvement and of December 2023 (217). While headcount in the Webgains segment always optimised to suit the situation and the speciﬁc requirements Exceptional quality always pays off: ad agents is a certiﬁed Google environmental stewardship. has been slightly increased, we had to adjust our workforce in all 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 remaining segments in order to present a turn- around in the business 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 year under review. portfolio accordingly, thus supporting its clients with planning with leading-edge technology providers. to meeting their diverse technology needs and a shared passion and implementing efﬁcient and effective online and performance for excellence. Ofﬁces: Herrenberg / Zurich marketing strategies. ad agents’ digital marketing experts always • Initiative and accountability. We deliver on our promises to our Number of employees 31/12/24 31/12/23 ﬁnd the perfect strategy to increase our clients’ brand awareness and customers, stakeholders, and to each other by taking risks, seeking sales – across all digital channels and on all devices. proactive solutions, and assuming ownership of the results. Number Number ad pepper 16 23 The Board of Directors promotes and applies these values thoroughly Webgains 93 91 in all personnel related processes such as hiring, promotions and the ad agents 82 87 review of employee performance. Administration 14 16 To the best of our knowledge, we have not identiﬁed any incidences of 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 Managing Director ad agents ad agents 47 48 04.4 « ECONOMIC DEVELOPMENT 04.4 04.4 ECONOMIC DEVELOPMENT ECONOMIC DEVELOPMENT MACROECONOMIC Continuously increasing investments in online marketing. In • Data privacy and transparency: As data privacy concerns grow, Revenue in the ad agents segment decreased by EUR 488k or 6.5 2024, the German online display advertising market reached a volume consumers expect companies to be transparent about their data percent to EUR 7,000k (2023: EUR 7,489k). In terms of gross proﬁt EUR FRAMEWORK of over EUR 6 billion for the ﬁrst time, an increase of 11.7 percent practices and to protect their personal information (source: El País); 6,791k for the 2024 ﬁnancial year is posted in the ad agents segment. compared to the previous year. Further growth is forecast for 2025, • Search engine advertising and Google: Search engine This corresponds to a decrease of 6.5 percent compared with the mainly driven by programmatic advertising, online video advertising advertising is a vital component of online marketing, with Google previous year (2023: EUR 7,157k). According to IfW Kiel Institute for the World Economy (IfW) the German and afﬁliate marketing via high-quality sources (sources: BVDW, maintaining a dominant position in both search and search economy – still the most important market for the company – is stuck OnlineMarketing.de). advertising (source: Think with Google); Development in operating expenses in stagnation. There are no signs of a signiﬁcant economic recovery. • Social media: Platforms such as TikTok and Instagram continue to Instead, there are increasing signs that the economic weakness Globally, advertising spending is expected to have exceeded USD grow in importance, particularly through the integration of shopping is primarily structural rather than cyclical, which means there is 1 trillion in 2024, a year earlier than previously forecast. This increase features that enable direct purchases via social media (source: Wall Operating expenses at the ad pepper Group decreased by 10 percent to little room for improvement in economic activity in the short term. is driven largely by digital advertising formats such as programmatic Street Journal). EUR 19,701k (2023: EUR 21,870k). Operating cost at ad pepper Group There is also a risk of additional headwinds in 2025. If the new US advertising, afﬁliate marketing, Google search engine marketing and largely consist of employment cost typically amounting to around 75 administration follows through on its protectionist announcements, price comparison sites, which have a particularly signiﬁcant impact due In conclusion, both the e-commerce market and online marketing percent of total cost. Consequently, the costs decreased – in all three this will be a further drag on exports. Against this backdrop, IfW has to their targeted approach and high reach (source: Wall Street Journal). spending are projected to keep growing in the coming years, driven operating segments – mainly due to reduced numbers of employees lowered its forecast and expect GDP to stagnate in 2025. In 2026, by technological advancements, evolving consumer behaviour and the during 2024. economic output is expected to grow by 0.9 percent, whereby almost In the year 2024, the world of online marketing was rising signiﬁcance of afﬁliate marketing, search engine advertising and 0.3 percentage points are attributed to the additional number of characterised by several trends. The integration of artiﬁcial price comparison platforms. EBIT, EBITDA, and EBT working days. The economic weakness is leaving its mark on the labor intelligence (AI) has enabled personalised customer experiences (for deﬁnitions please see page 165) market. The unemployment rate is expected to rise from 5.7percent in and more efﬁcient data analysis. In addition, the use of short videos 2023 to 6 percent in 2024 and 6.3 percent in 2025. After a noticeable on platforms such as TikTok and Instagram has become even more increase this year, real disposable household income will barely grow widespread. Social commerce, i.e. direct sales via social media, EBT, EBIT and especially EBITDA are widely used in our industry and are PRESENTATION OF in the next two years. As a result, private consumption will not gain established itself as an important sales channel, while afﬁliate the most common ﬁnancial metric to measure ﬁnancial performance much momentum either, according to IfW. marketing and search engine advertising also gained further traction within our peer group. The Group’s earnings before interest and taxes EARNINGS POSITION (sources: businessinsider.com, OnlineMarketing.de). (EBIT) amounted to EUR 1,160k in the past ﬁnancial year (2023: EUR As far as the global economy is concerned, IfW is forecasting an -994k). Earnings before taxes (EBT) amounted to EUR 2,908k (2023: EUR expansion of 3.1 percent in 2025. The outlook for 2026 has deteriorated The following developments are expected for 2025: -631k). Earnings before interest, taxes, depreciation and amortisation Development in gross sales, revenue and gross proﬁt and IfW recently reduced its forecast by 0.2 percentage points to 3.1 • e-commerce: Global e-commerce revenue is forecast to reach (EBITDA) at the Group came to EUR 2,004k in the past ﬁnancial year percent. The decline in inﬂation has slowed down of late, and the lack around EUR 4,366 billion in 2025 (source: Digital Commerce 360); (2023: EUR 24k). of a year-on-year fall in energy prices and the expected further decline • Expanded use of AI: AI is increasingly being used to provide The ad pepper Group achieved gross sales of EUR 89,656k in the 2024 in inﬂation towards the target of 2 percent is likely to be sluggish personalised content and optimise marketing strategies (source: ﬁnancial year (2023: EUR 85,988k), equivalent to year-on-year increase Looking at the individual segment, ad agent’s EBITDA increased by 247 mainly due to the persistent rise in services prices. There is a risk eMarketer); of 4 percent. Revenue amounted to EUR 21,450k in 2024 (2023: EUR percent to EUR 722k (2023: EUR 209k), largely due to signiﬁcantly lower that monetary policy will remain restrictive for longer than currently • Price comparison engines: The use of price comparison sites is 21,749). Gross proﬁt – alongside revenue our second most important operating expenses with EUR 6,268k (2023: EUR 7,184k). expected. In addition, there are still major risks for the global economy growing in importance as consumers increasingly look for the best key ﬁgure – remained with EUR 20,861k stable compared to prior year from a possible escalation of geopolitical conﬂicts. Trade conﬂicts could deals, and companies use these platforms to attract new customers (2023: EUR 20,876k). Moving on to the next segment, Webgains achieved an EBITDA of EUR also escalate further, but they could also turn out to be less severe than (source: Digital Commerce 360); 2,808k and thus signiﬁcantly higher than the previous year (2023: EUR • Sustainability and value-centric marketing: Consumers assumed, according to IfW. Webgains saw a revenue increase of 3.2 percent to EUR 12,355k (2023: 2,060k). Slightly higher revenue and continuous strict cost discipline are increasingly prioritising sustainability and ethical business EUR 11,968k) while this segments’ gross proﬁt came to EUR 12,052k in helped achieving this result. practices, which prompts companies to adapt their marketing the past ﬁnancial year (2023: EUR 11,477k), equivalent to an increase Online advertising market messages accordingly (source: Digital Commerce 360); of 5.0 percent. The third operating segment, ad pepper, achieved an EBITDA of EUR • Afﬁliate marketing: On Cyber Monday, the online sales day of the -273k (2023: EUR -483k). The EBITDA achieved in 2024 is a reﬂection of The e-commerce market continues to show signiﬁcant growth. year 2024, social media inﬂuencers and other afﬁliate marketers The ad pepper segment reported a decline in revenue to EUR 2,094k a business year which saw budget cuts and cautious booking behaviour Global e-commerce revenue is forecast to reach around EUR 4,355 contributed to around 20 percent of e-commerce sales, an increase (2023: EUR 2,292k). Gross proﬁt was lower too compared to last year mainly in the last quarter of 2024 especially in the Spanish market. billion in 2025, an increase of 10 percent compared to 2024 (source: of 7 percent compared to the previous year. Products promoted via with EUR 1,846k (2023: EUR 2,056k). The reduced booking volume from Statista). In Germany, e-commerce revenue is expected to reach around afﬁliate links were six times more likely to result in a purchase than a number of clients and subdued booking behaviour in general during EUR 91 billion in 2025, representing an expected year-on-year growth content without such links, underlining the importance of afﬁliate 2024 is the main reason for this development. of 7 percent (source: Einzelhandel.de). marketing as an effective channel for acquiring new customers (source: businessinsider.com); 51 52 04.4 04.4 ECONOMIC DEVELOPMENT ECONOMIC DEVELOPMENT PRESENTATION OF FINANCIAL AND NET ASSET POSITION Cash ﬂow The gross cash ﬂow amounted to EUR 970k (2023: EUR -790k) while a ﬁgure of EUR 2,341k (2023: EUR 1,239k) was reported for cash ﬂow from operations. The gross inﬂow of funds is particularly due to the increase in net income for the period. The net cash ﬂow from investing activities came to EUR 3,389k in the past ﬁnancial year (2023: EUR 2,456k), mainly from maturing ﬁxed deposits. The cash ﬂow used for ﬁnancing activities amounted to EUR -1,321k in 2024, as against EUR -893k in the 2023 ﬁnancial year. It included outgoing cash of EUR -669k (2023: EUR -286k) occurred for dividends paid to non-controlling interests and lease payments of EUR -628k (2023: EUR -595k). Balance sheet structure Total assets increased by EUR 5,429k to EUR 48,370k (31 December 2023: EUR 42,941k). Current assets increased by EUR 3,960k to EUR 41,257k (31 December 2023: EUR 37,297k) and non-current assets increased by EUR 1,469k to EUR 7,113k (31 December 2023: EUR 5,644k). Right-of-use assets for capitalised leasing contracts for ofﬁces and vehicles amount to EUR 1,197k (31 December 2023: EUR 1,184k). Cash and cash equivalents amount to EUR 24,155k (31 December 2023: EUR 19,842k) and securities and deposits amount to EUR 0k (31 December 2023: EUR 3,523k). Trade receivables increased by EUR 2,894k to EUR 16,018k (31 December 2023: EUR 13,124k). On the equity and liabilities side, the Company’s equity showed an increase of EUR 1,722k to EUR 20,603k (31 December 2023 EUR 18,881k) which corresponds to an equity ratio of 43 percent (2023: 44 percent). Trade payables increased by EUR 2,953k to EUR 20,610k (31 December 2023: EUR 17,657k). Long-term liabilities amount to EUR 853k (31 December 2023: EUR 822k) and consists mainly of lease liabilities for capitalised right-of-use asset. Current liabilities amount to EUR 26,914k (31 December 2023: EUR 23,238k). Of these, EUR 1,996k (2023: EUR 1,996k) relate to the written put option over the non- controlling interest in ad pepper media Spain S.A. and Webgains S.A. Further EUR 476k (31 December 2023: EUR 536k) 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 24,155k at the end of December 2024 (31 December 2023: EUR 23,365k). The Company still has no external loans. 53 54 04.5 « RISK REPORT 04.5 04.5 RISK REPORT RISK REPORT FOREWORD implement mitigation actions. The results of the risk assessment and This could lead to a loss of members in our advertising network as Finally, our systems are extremely dependent upon power supply. In the any updates are reported to the Supervisory Board on a regular basis. well as advertising customers, and ultimately to increasing costs. This case of major power outage (which cannot be excluded also in the light A detailed review of all underlying business risks is completed every could impair our ability to win new users and advertising customers and of the current energy crisis), we would have to resort to emergency year. At least once a year, the Supervisory Board discusses the corporate thereby adversely affect our revenues and our growth. The availability of power units. It may happen that such emergency power units do not The German Corporate Sector Supervision and Transparency Act and strategy and business risks as well as the results of an assessment by our products and services is dependent on the uninterrupted operation work correctly and that they are insufﬁcient in the case of a major the Dutch Corporate Governance Code lay down key requirements and the Board of Directors of the structure and operations of the internal risk of our IT and communication systems. Any damage to or failure in our power outage. obligations regarding risk management and control systems. In line management and control systems, including any signiﬁcant changes. systems could interrupt our services, which could reduce our revenues with these requirements applicable in Germany and the Netherlands, and proﬁts, and damage our brand. Our systems could be damaged by the ad pepper Group operates a comprehensive and adequate risk Technology risk In addition to the dedicated risk management system outlined above, the ﬂood, ﬁre, power outage, telecommunication failure, computer viruses, management system. The regulations require the Board of Directors following elements also serve to identify risks within the Group: terrorist attacks, attacks from cybercriminals, attacks preventing to ensure that the Company complies with all applicable laws and computers from accessing services, and other forms of attack on our It is conceivable that technologies will be developed that block or requirements, and to report to the Supervisory Board regularly on the • Operational planning, including updated intra-year forecasts systems. Our data centres could become the target of intrusion, sabotage suppress the display of our advertising on the internet. Most of our internal risk management and control systems. The risk management • Quarterly ﬁnancial statements or wilful vandalism, or they could be affected by faults occurring as a revenues are generated in such a manner that advertising customers system at the ad pepper Group identiﬁes signiﬁcant risks which could • Monthly and quarterly reporting by subsidiaries result of ﬁnancial difﬁculties on the part of operators of data centres. pay for their advertising to appear on websites. Technologies designed have adverse implications for the Company. These risks are quantiﬁed (comparing target and actual results) to the Group Not all our systems are fully redundant and our natural disaster recovery to block or suppress internet advertising could thus have an adverse and evaluated in terms of their potential implications. Finally, suitable plans cannot account for all eventualities. Natural disasters of this kind effect on our operating results. For instance, major players in the market measures are identiﬁed in order to counteract the identiﬁed risks. or operators of facilities we use deciding to shut down for ﬁnancial such as the mobile operators or the providers of application ecosystems reasons without reasonable notice and/or other unexpected problems such as Apple and Google may decide to introduce ad blockers to their at our data centres could lead to prolonged interruptions to our services. systems or to the mostly used internet surﬁng browsers. These could Internal risk management and control system RISK CLASSIFICATION seriously obstruct the delivery of advertisements to users and thus In order to be successful, our network infrastructure must be efﬁcient harm the business of the ad pepper Group. The ad pepper Group is managed by a Board of Directors and Supervisory and reliable. The higher the user frequency and the complexity of our Board appointed by the General Meeting. The Supervisory Board products and services, the more CPU performance we will need. We In general, the market for internet advertising is characterised by responsibility is the oversight of the risk management system. Consistent Risks are classiﬁed as operational, strategic, ﬁnancial risks, compliance have invested heavily in acquiring and leasing data centres as well rapid technological change, developing industry standards, frequent with the requirements of the Dutch Corporate Governance Code, the and assessed according to their probability of occurrence and their as cloud services and updating our technology and the infrastructure introduction of new products and services, and changing customer Company has established a procedure for reporting actual or suspected potential ﬁnancial impact. The major risks for each classiﬁcation are of our network in order to cope with growing trafﬁc and the launch of behaviour. The introduction of new products and services, and the irregularities within the Company and its afﬁliated enterprises. In addition, described below: new products and services, and we expect to continue doing so. These emergence of new industry standards can render existing products the Board of Directors has developed and implemented strategies, investments are costly and complex and can lead to efﬁciency losses and services obsolete and impossible to sell or require unexpected controls and mitigation measures to identify current and developing risks or downtime. If we fail to expand successfully or if 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 occur, the quality of our products and services as well as to adapt to rapid technological changes, to improve existing solutions, procedures are embodied in our Corporate Governance, Code of Conduct, customer satisfaction could suffer. This could damage our reputation and to develop and launch a host of new solutions in order to meet our OPERATIONAL RISK and ﬁnancial reporting controls and procedures. A variety of functional and result in a loss of existing and potential customers, advertising customers’ and partners’ continuously changing demands. Advertising experts evaluate these business risks and aim to mitigate and manage clients, and members of our network. Cost increases, a lower frequency customers, for instance, are increasingly demanding online advertising these risks on an ongoing basis. of use on the part of our partners in the advertising network, failure networks and advertising that go beyond pure stills, integrating “rich Infrastructure risk to adapt to new technologies, or changed business requirements could media”, such as audio and video, interactivity and methods for more Identiﬁed risks are divided into four types: adversely affect our revenue and ﬁnancial strength. accurately targeted consumer contacts and behaviours. Our products and services are dependent on users having access to the • Catastrophic (loss of ability to achieve business objectives, internet and in some cases also require substantial bandwidth. This We also use other IT suppliers, including data centres, cloud services Our systems do not support all types of advertising formats. Equally, e.g. worst-case scenario) access is at present made available by companies that have signiﬁcant and broadband providers. Any disturbance in network access or certain website operators within our network do not accept all of • Major (reduced ability to achieve business objectives) and growing inﬂuence on the market for broadband and internet colocation services by these providers, or their inability to process the advertising formats offered by us. Moreover, a further increase in • Moderate (disruption to normal planning with a limited effect access, such as telephone companies, cable companies, and mobile current or larger data volumes could seriously damage our business. fast and powerful internet access could generate new products and on achievement of business strategy and objectives) communication providers. Some of these providers could start adopting services which are only possible with increasing bandwidth. If we fail • Low (no material impact on the achievement of business measures to interrupt or impair user access to certain products, or they Furthermore, ﬁnancial or other difﬁculties on the part of our providers to successfully adapt to such developments, there is a risk that we strategy and objectives) could increase the costs of user access to such products by limiting or could have an adverse impact on our business. We have witnessed could lose customers and/or parts of the advertising space marketed forbidding the use of their infrastructure for our products and services, interruptions and delays in these services and in these the availability by us. We procure most of the software used at our Company externally All identiﬁed risks are evaluated based on their likelihood of occurring 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 and we plan to continue buying technologies from third-party suppliers and their potential impact (estimated in monetary terms) in disrupting excluded that the side effects of the war in Ukraine could impair a proper or delays in conjunction with these technologies and information in future as well. We cannot deﬁnitively say whether such technologies our progress toward achieving our business objectives. The overall risk functioning of the internet infrastructure in the European continent. services could harm our relations with users, adversely affect our will continue to be available in future either at all or on commercially management goal is to identify risks that could signiﬁcantly threaten our brand, and expose us to liability risks. reasonable terms. success and to allow management sufﬁcient opportunity to successfully 57 58 04.5 04.5 RISK REPORT 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 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 expectations from society if the Group does not meet its ESG goals, 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, resulting in reputational damage and potentially reduced customer 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 demand for our 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 programs 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 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 this is an established, thorough annual review process from which we prospective clients, and there is a risk that these will not meet with that a business is meeting high standards of veriﬁed performance, derive individually tailored and future-variable qualiﬁcation programs 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 as 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. 59 60 04.5 04.5 RISK REPORT 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 • adapt to legal or regulatory changes with a view to the internet companies with different cultures and languages, exchange rate risks, Group as a preferred partner, (iv) were to expand their operations such customers were to signiﬁcantly reduce their business with us for any as far as these concern data privacy, use, advertising, and trade and other country-speciﬁc economic, political and legal risks. In view of that it competed directly with the Group, or (v) otherwise cease to be reason, or to favour competitors or new entrants. Customers do not • achieve sales targets for partners with whom we have agreed the number of acquisitions which we have completed in past years, the available as a technology provider to the Group. make binding long-term commitments to the ad pepper Group regarding minimum guarantees different customers and technological functionalities of the products booking volumes and could seek to materially change the terms of their • generate revenue from services in which we have invested and services acquired, future acquisitions may pose signiﬁcantly Moreover, since 2022 Google has blocked third party cookies in business relationship at any time. Any such change could signiﬁcantly signiﬁcant time and resources bigger challenges with respect to products, sales, marketing, customer Chrome. As a result, third-party cookies became sometimes unusable harm the ad pepper Group’s business and operating results. • give priority to long-term goals over short-term support, research and development, buildings, information systems, for advertising measurement and many forms of third-party data results when necessary accounting, human resources and other integration aspects, and may already challenged by GDPR since May 2018, will cease to exist. • adapt to technological changes designed to obfuscate or delay or threaten the complete integration of the businesses acquired. Platform technology risk While we expect the vast majority of our services and products to be block online advertising on desktop PCs or mobile devices unaffected, it can therefore not be excluded, that some of our business • adapt to changes in the competitive environment Likewise, divestment of companies and/or businesses can lead 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 • achieve sufﬁcient proﬁtability and reputation in the market on to liability vis-à-vis the buyer, or additional expenses, for instance these changes, these businesses will be negatively affected. reliable, scalable, secure, high-performance technology infrastructure the basis of our investments in new technologies and related through indemnity clauses and guarantee commitments or long-term that can efﬁciently handle increased usage globally. The platforms products/services. supply contracts. The possibility of in-house handling of advertising network functions can are scalable in principle. However, only the actual future expansion represent a possible risk for the ad pepper Group both at the level of of the business will prove whether there is enough business available Should we fail to successfully handle these risks and uncertainties, this Currency risk the attractiveness of its offering vis-à-vis advertisers as well as to its and the platforms scales well enough to cover the ﬁxed cost base could have signiﬁcantly adverse consequences for our revenue as well negotiating power vis-à-vis the providers of online advertising inventory. that has been built. Inability to develop a scalable platform may have as our asset and ﬁnance position, see also Note [40]. signiﬁcantly adverse consequences for our revenue as well as our Since the ad pepper Group conducts a signiﬁcant share of its business Online advertising markets are characterised by rapid technological asset and ﬁnance position. outside the euro area, exchange rate ﬂuctuations can have a signiﬁcant Risks of our M&A strategy change, the establishment of new industry standards, regular launches of impact on results. Currency risks from ﬁnancial instruments can impact new products and services, and rapidly changing customer requirements. accounts receivable, accounts payable, as well as cash and cash The introduction of new products and services based on innovative Historically, part of our Company’s growth has resulted from mergers equivalents in a currency other than a Company’s functional currency. technologies and the resultant establishment of new industry standards and acquisitions, and we will continue to consider acquisitions in For the ad pepper Group, the currency risk from ﬁnancial instruments is FINANCIAL RISK could mean that our existing products and services become obsolete future as well. Furthermore, we will continually review our portfolio particularly relevant for GBP and, to a lesser extent, USD. No ﬁnancial and unsellable, thus forcing us to make unforeseen and unplanned of shareholdings to assess whether Company acquisitions might be instruments are used to hedge currency risks. investments. Insufﬁcient ﬂexibility in adapting to these changes can have appropriate. Every acquisition or sale can have material consequences adverse effects on our revenue, ﬁnance and asset position. for our revenue and ﬁnancial position. Furthermore, the integration of All of the risks below are assessed as insigniﬁcant and therefore are Tax risk an acquired business or technology can cause unforeseen operational not quantiﬁed. Their impact on the ﬁnancial information of ad pepper is In general, we expect our sales growth to decline over the course of problems, expenditure, and risks. Areas in which we may face risks in considered immaterial. time as a result of base effects and increasingly tough competition. We this context include: Our future income tax payments may be adversely affected by lower- also expect growing pressure on our operating margins as a result of than-expected proﬁts in jurisdictions with lower tax rates and higher increasingly tough competition and a general increase in expenditure • implementation or modiﬁcation of controls, processes, proﬁts in jurisdictions with higher tax rates. If the valuation of our Low proﬁtability in other areas of our business. Furthermore, the margin could fall as a and strategies of acquired businesses deferred tax receivables and payables changes this could also mean result of our Company having to pay a higher share of our advertising • diversion of management attention away from additional tax expenditure. We are exposed to risks that could prevent us from generating net revenue to our website partners within our website portfolio and/or other business matters proﬁts in the future. These risks depend on several factors, including afﬁliate network. • overvaluation of businesses acquired, acceptance of the The determination our tax provisions and other tax liabilities worldwide our ability to: acquired business’ products and services by our customers is a complex process, and in many instances the ﬁnal amount of tax • cultural problems associated with the integration of the staff to be paid is uncertain. Although we consider our estimates to be • maintain and expand our existing advertising space on Dependency risk of acquired businesses into our Group realistic, the actual tax result can differ from the amounts shown in our websites of publishers and afﬁliates, owners of e-mail lists • continued employment of staff companies which we acquire ﬁnancial statements and signiﬁcantly inﬂuence our ﬁnancial results in and newsletter publishers The ad pepper Group and its segments have signiﬁcant customer • integration of the accounting, management, and information the period or periods to which such tax assessment applies. Our tax • maintain and increase the number of advertising customers concentration, in terms of both advertisers and publishers (website systems as well as of the human resources administration and liability forecast can be examined by the responsible tax authorities at who use our products and services owners), so economic difﬁculties or changes in the purchasing policies other administration systems of acquired businesses. any time. Any negative outcome of such an examination can have an • increase the number of products and services we offer or patterns of its key customers could have a signiﬁcant impact on adverse effect on our ﬁnancial, revenue, and asset situation. All of our • adjust to changes in needs and habits of online advertising the ad pepper Group’s business and operating results. While the The integration of companies, products and personnel can constitute tax positions are subject to changes in tax laws, regulations, jurisdiction customers, also with a view to the technologies in demand concentration of our business on a relatively small number of customers a considerable burden to our management and our internal resources. as well as tax-related accounting standards and their interpretations. on the market may provide certain beneﬁts to us, such as potentially more efﬁcient Acquisitions of foreign companies, in particular, are subject to • respond to challenges resulting from the large and growing handling/decreased cost of sales, this concentration may expose the additional risks. These include risks associated with integrating number of competitors in the industry 61 62 04.5 04.5 RISK REPORT RISK REPORT New accounting standards Group’s revenue. Similarly, if faced with spikes in advertising spend a whole or in part. This concentration of control limits our shareholders’ user’s data. Therefore, the effectiveness of our technology may be and trafﬁc, the Group’s platforms must be able to support increased ability to inﬂuence Company matters and affects the liquidity of the ad impaired by regulations limiting or prohibiting the use of cookies and The International Accounting Standards Board (IASB) or other trafﬁc volumes and variety of advertising formats whilst maintaining pepper share traded on the stock exchange. In view of this, we may cookie consent of data subjects. On the basis of the requirements set organisations may publish new or revised directives, interpretations, or a stable and effective infrastructure and reliable service to customers. implement measures that our shareholders do not deem expedient. up by data privacy regulators, software manufacturers may provide other guidelines which could inﬂuence International Financial Reporting This ﬂexibility and stability require signiﬁcant investments in both the This in turn may have a lasting negative impact on our share price. new internet browsers bearing default settings where cookies are not Standards (IFRS). As a result, it may happen that an accounting rule is Company’s organisation and technology, which increase the cost base. 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 rule previously open for interpretation is declared to be generally restricted, we would have to switch to other technologies in order to Capital risk valid or is applied in a speciﬁc manner. It is also conceivable that valid collect geographic or behaviour-related information. COMPLIANCE RISK methods may be replaced entirely. Such IFRS-related changes can have a signiﬁcant impact on our ﬁnance, revenue and asset positions. The price of our share at times experienced considerable ﬂuctuation Although such technologies exist, they are far less effective than Moreover, inability to adopt new accounting standards in time may since its initial listing and will continue to remain volatile in the future. cookies. We would have to develop or buy new technologies in order severely damage our reputation. The share price may move rapidly in response to factors beyond our to prevent fraud in our networks. Replacing cookies could become time- Governance risk control, including: consuming and requires considerable investment. Their development could turn out to be economically pointless or it may not be possible to Besides operational and ﬁscal risks, our business activity harbours a wide Liquidity and cash ﬂow risk • ﬂuctuations in our quarterly results or in the results of our implement them early enough in order to prevent the loss of customers range of legal risks. Legal disputes, authority ﬁnes and other proceedings competitors or advertising space. The use of cookie technology or a comparable may cause considerable damage to our business, our reputation or our All of the Company’s liquid funds and short-term marketable • announcements of Company sales and takeovers, new products, technology to collect information about internet usage patterns may brands, and entail high costs. We are subject to a variety of laws and securities are essentially managed by ﬁnancial institutions. Based major contracts, business relationships or provision of capital lead to lawsuits or investigations in future. Many jurisdictions have regulations, many of which are not yet ﬁrmly established or are still on the development of our business, the liquidity of ad pepper media • recommendations by equity analysts or changed proﬁt expectations detailed provisions concerning both the collection of personal data and developing. This includes wide-reaching legislation covering consumer International N.V. can at present be regarded as secure and, despite • publication of proﬁts inconsistent with analysts’ expectations the use of such data for direct marketing campaigns. protection, data protection, e-commerce and competition. Antitrust future investment in new companies, sufﬁcient to meet all future • number of shares outstanding and competition claims or investigations may also require changes to payment obligations. A decline in liquid funds may arise if further • share sales by us or our shareholders Since 13 May 2024 the Telecommunications Digital Services Data our business operations. Any such risks are counteracted by internal investments are required in the future. The Company is dependent • short-selling, hedging or other derivative transactions with shares Protection Act (Telekommunikation-Digitale Dienste Gesetz, TTDDG) and external law experts who thoroughly examine all contractual and upon its customers’ payment discipline. Our receivables are typically is applicable replacing the data protection requirements in the former regulatory matters. We endeavour to fulﬁl our obligations through unsecured and result from sales which are predominantly generated The stock market in general and the market for technology companies Telemedia Act, now Digital Services Act. The TDDDG introduces a strict constant monitoring and by avoiding conﬂicts arising from the violation with customers based in Europe. The Company checks its customers’ in particular have witnessed extreme share price and trading volume cookie opt-in requirement very much in line with the preconditions in of third-party rights or breach of regulatory provisions. No substantial creditworthiness on an ongoing basis and has made provisions for ﬂuctuations often unrelated or disproportionate to the operational the EU Privacy and Electronic Communications Directive. Prior to this litigation risks currently exist within the ad pepper Group. potential cases of default. Negative developments on the capital performance of these companies. These general market and industry the German High Court has outlined in 2020 consent requirements for markets can restrict our ability to obtain ﬁnancing. Past economic and factors can seriously damage the price of our share irrespective of our storing cookies on devices following a decision of the European Court ﬁnancial crisis led to certain restrictions on the availability of corporate actual performance. of Justice on this issue. Data risk ﬁnance and created a scenario such as that outlined above. Looking ahead, it is not possible to completely exclude future restrictions on Lower (or volatile) share prices may lead to an inability to attract strong According to these decisions, companies need consent for storing Websites usually install small ﬁles with an ID to identify a user, generally 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 called “cookies”, on a device. Cookies usually collect information about 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 users so that websites can adapt their contents to user needs. such a scenario, this may have severe consequences for the Company’s legislator has introduced a strict consent requirement for storing data 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 The internet user’s browser software forwards the cookie information times of high price ﬂuctuations on the overall market or in individual requirements that may have a negative impact on our business model. to the website. Our business depends on the use of cookies to track the shares. In the event that such lawsuits are ﬁled against us, this could Namely, the upcoming European ePrivacy-Regulation may introduce trafﬁc of internet users on the websites of our advertising customers, Working capital risk lead to signiﬁcant costs and distract management time and resources. stricter requirements. If adopted, such regulations would have a and to monitor and prevent fraud in our networks. Most of the latest thorough impact on our business model. internet browsers enable internet users to change their browser The Group’s operating results and cash ﬂow vary from quarter to As of 31 December 2024, Michael Oschmann, Chairman of the settings to prevent the storage of cookies on their hard disks. internet quarter due to the seasonal nature of advertising spending. In contrast Supervisory Board, directly or indirectly owns shares representing In addition to this, the European Data Protection Board (EDPB) issued users can also remove cookies from their hard disks at any time. to the higher advertising budgets spent during the fourth quarter, the 50.53 percent of the share capital and typically more than 80 percent guidance regarding the scope of the consent requirements in Art. 5 third quarter of the calendar year is typically the slowest in terms of the voting rights at the General Meeting. For the foreseeable ePrivacy Directive due to the development of new technologies used for According to the General Data Protection Regulation (“GDPR”), which of advertising spend (summer quarter). This affects the Group’s future, Michael Oschmann will therefore continue to have signiﬁcant tracking end-user. This broad interpretation of the consent requirement came into effect in May 2018 in Europe, and to the EU Privacy and operating results, cash ﬂow and cash requirements. In addition, digital inﬂuence on the management and on all matters requiring approval by principle may have a negative impact on the way we can process data Electronic Communications Directive, consent of data subjects is advertising spend is volatile and unpredictable. In periods of lower the shareholders, including the election of board members, important required for our business. required for storing information like cookies for tracking or targeting advertising spending this may have a material adverse effect on the Company transactions, such as mergers or the sale of the Company as purposes on an end-user’s device and for further processing of end 63 64 04.5 04.5 RISK REPORT RISK REPORT It might be more difﬁcult to get consent of a data subject for storing or otherwise mismanages or misappropriates that data, we could Operational risks are managed through the ongoing budgeting, reach help to mitigate our exposure to any particular localised risk. We cookies or other identiﬁer due to this interpretation. be subject to signiﬁcant litigation, monetary damages, regulatory forecasting and reporting process as well as training activities to monitor proposed changes in taxation legislation and new accounting enforcement proceedings, ﬁnes and/or criminal prosecution in one or 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 more jurisdictions. These monetary damages may not be subject to 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 contractual limit of liability or exclusion of consequential or indirect 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 damages and could be substantial. Our liability insurance may not 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 cover us against claims related to security breaches, cyber-attacks or 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 other breaches. ﬁnding these funds is not regarded as imminent. Matters of substantial 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 Violations of other legal requirements to lower burdens for companies it is yet unclear whether this adequacy 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 started while evaluating the ﬁnancial impact of each event depending on appetite as medium. Management therefore estimates this overall reviewing UK’s laws and systems for protecting personal data and The aim of compliance is to ensure irreproachable business conduct 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 at all times and in all respects. Any failure to fulﬁl legal requirements moderate and we seek to mitigate risks through contracts, service level by the end of June 2025. and report obligations, any violation of the Corporate Governance agreements, insurance and cooperation with established partners. As far as compliance risks are concerned as the Group is growing in a Code or insufﬁcient management transparency may pose a risk to the complex and rapidly changing environment and is in an ongoing process Although we abide by the applicable laws in the different jurisdictions, required compliance. For this reason, the ad pepper Group established As far as strategic risks are concerned, we try to mitigate the personnel of establishing and improving its processes, regulatory violations may we cannot rule out the possibility that changes in legislation may have a Group-wide Code of Conduct as well as an insider trading policy, risk by providing attractive remuneration package, creation of a positive occur. Management’s risk appetite is generally low and matters of signiﬁcant repercussions for our business models and revenues. Any which provides for the safety and support of employees in various working environment and structured individual development plan. We substantial signiﬁcance are also reviewed with the Supervisory Board litigation or governmental action against us could become costly and professional situations. Despite comprehensive measures taken within try to manage the dependency risks and platform risks by building and through the two-tier board structure. The ad pepper Group is committed time-consuming, or compel us to change our business practice and the realignment of the compliance programme and our compliance maintaining customer relationships. We develop online advertising to complying with the laws and regulations of the countries in which divert management attention away from other business ﬁelds. organisation, it is impossible for us to protect us against all risks. strategies and regularly monitor progress for existing clients and we operate. However, with the General Data Protection Regulation and identify and build relationships with new customers. ePrivacy Regulation, compliance obligations and ﬁnancial penalties for The regulatory environment in Europe is ever changing. With the More generally, from time to time we are or may become involved in noncompliance are increasing signiﬁcantly. Should the risk materialise, GDPR, which came into effect in May 2018 in Europe, as well as the private actions, investigations and various other legal proceedings by In general, management addresses market risks by actively monitoring it would have a very high, potentially critical impact. We mitigate the EU Regulation for the digital era like Digital Services Act or Data Act employees, suppliers, competitors, government agencies or others. the developments and evaluating the actual exposure to these risks. risk by working with well-established external partners such as tax, and Artiﬁcial Intelligence Act, compliance obligations and ﬁnancial Failure to comply with laws and regulations can damage our reputation This includes participation in industry events, gaining information from legal and audit advisors in all countries we are operating, as well penalties for non-compliance are increasing signiﬁcantly and could and have negative ﬁnancial and operational consequences. analysts and research ﬁrms as well as creating business cases for new as building in-house capabilities through training and qualiﬁcation potentially harm our business. The ad pepper Group has set up working product developments. measures for existing staff. groups in close cooperation with its external data protection ofﬁcer to continuously identify adjustment needs to ensure compliance with The ad pepper Group has a track record of identifying market changes GDPR and complementary requirements. Nevertheless, the security early and investing into winning products and services ahead of time. RISK APPETITE measures which have been or will be implemented may not be We will, however, not pursue growth at all costs and expect sufﬁcient effective, and ad pepper’s systems may be vulnerable to theft, loss, margins. We will primarily pursue organic growth strategies to meet damage or interruption from a number of potential sources or events, our growth objectives. We aim for sufﬁcient operating margins including unauthorised access or security breaches, cyber-attacks, whilst protecting the long-term viability of the Group. In general, This section highlights those risks that the Group is willing to take, as computer viruses, power loss, or other disruptive events. The ad management’s risk appetite in this ﬁeld is moderate. well as those that are unacceptable. It includes a series of risk assertions pepper Group may not have the resources or technical sophistication to which are aligned to our strategy, together with the risk parameters anticipate or prevent rapidly evolving forms of cyber-attacks. In the ﬁeld of ﬁnancial risks, management addresses the low within which we expect to work. The Group operates in markets with high proﬁtability risk mainly through transparency and the permanent growth potential that are subject to volatility and intense competition. Moreover, GDPR not only imposes new compliance obligations review process in connection with monthly results, forecasting and We will pursue ambitious growth targets and we are willing to accept regarding the handling of personal data, it has also signiﬁcantly budgeting. In the event of M&A, a dedicated program management certain levels of risk to increase the likelihood of achieving or exceeding increased ﬁnancial penalties for non-compliance. Failure to comply team will be established for the accelerating shareholder value our strategic objectives, subject to the parameters below. with GDPR may lead to regulatory enforcement proceedings, which creation transformation. Through strong due diligence processes can result in monetary penalties of up to 20 percent of worldwide and closely managed integration processes, we seek to reduce the The Board’s appetite for risk varies depending on the risk type. The revenue, orders to discontinue certain data processing operations, probability of M&A-related risk. Currency risks, on the other hand, Group measures risk by estimating the potential for loss of proﬁt, staff private lawsuits, or reputational damage. If any person, including any are sought to be minimised through natural hedging by increasing the turnover and reputational damage. The Board has a low tolerance of our employees, negligently disregards or intentionally breaches Company’s cost base in EUR. As far as political instability, in general, for ﬁnance- and compliance-related risk. Conversely, it has a higher our established controls with respect to client or ad pepper data, is concerned, the breadth of our service portfolio and our geographic tolerance for operational and strategic risk. 65 66 04.5 04.5 RISK REPORT 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 Risk category Risk Appetite well as the Supervisory Board. The ad pepper Group operates an information protection management Operational risk Infrastructure risk Moderate The ad pepper Group’s long-term strategy is focused on creating value system based on ISO 27001 comprising security guidelines as well for our shareholders and stakeholders through proﬁtable growth. In Technology risk Moderate as organisational and technical measures to prevent and address IT implementing this strategy, the Company has evaluated the relevant security incidents. Also in 2024, 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 Intellectual property rights risk Low general and for digital advertising providers in particular. The Board pointed out that no employees, including Board of Directors members, of Directors is responsible for identifying and managing risks with Sustainability Moderate are allowed to ask for payments/money transfers via email and nobody 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 Market risk Low controls have a high priority and are continuously assessed and further risk that an employee might execute a payment within the maximum improved. Separation between executive and controlling functions and Dependency risk Moderate available overdraft limit. 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 Financial risk Low proﬁtability Low were identiﬁed. The risk management and internal control systems, 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 Currency risk Moderate and control system, and no risk with a signiﬁcant impact were 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 2024 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 Liquidity and cash ﬂow risks Low the Consolidated Financial Statements. ad agents and ad pepper business. While it is early in the year, we are not expecting 2025 to show signiﬁcant macro-economic improvement, Working capital risk Moderate We are convinced that risk management has to be part of the mindset as also shown in chapter “macroeconomic outlook”. Client caution on Capital risk Low and working methods of our staff, and retaining control is of prime marketing spend will likely persist, despite the expected lower interest Compliance risk Governance risk Low importance to us. The Company continued to work on optimising its risk rate environment which represents a tailwind for consumer sentiment management and internal control systems in 2024 while acknowledging and activity. At the same time, we believe performance marketing is the Data risk Low that such systems cannot offer absolute assurance against errors right choice for any client especially in this market environment and are Violations of other legal Low of material importance. The Board of Directors is conscious that therefore optimistic that our client’s appetite for booking campaigns with requirements the Company does not yet have an internal audit function and has us will further improve. We therefore continue to focus on positioning discussed this with the Supervisory Board. After an in-depth discussion the Company for sustainable medium term growth, keeping our cost the Board of Directors and the Supervisory Board concluded that structure lean and further improving our proﬁtability as well as fostering the Company does not currently require an internal audit function, our relationships with our clients. 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. 67 68 04.6 « RESPONSIBILITY STATEMENT 04.6 04.6 RESPONSIBILITY STATEMENT RESPONSIBILITY STATEMENT 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 2024 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 2024 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, 30 April 2025 71 72 05 « CONSOLIDATED FINANCIAL STATEMENTS 05 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENT 1/1 - 31/12/2024 1/1 - 31/12/2023 Note kEUR kEUR Gross sales¹ [6] 89,656 85,988 Media cost² [8] -68,206 -64,239 Revenue [5] 21,450 21,749 Cost of sales [8] -590 -873 Gross profit 20,861 20,876 Selling and marketing expenses [9] -13,363 -14,867 General and administrative expenses [10] -7,235 -7,785 Other operating income [11] 1,110 966 Other operating expenses [12] -214 -184 Operating profit / (loss) 1,160 -994 Financial income [13] 317 210 Financial expenses [13] -69 -46 Share of profit of an associate [4] 1,501 199 Profit / (loss) before taxes 2,908 -631 Income taxes [14] -489 -68 Net profit / (loss) 2,419 -699 1/1 - 31/12/2024 1/1 - 31/12/2023 Note kEUR kEUR attributable to shareholders of the parent company 2,074 -944 attributable to non-controlling interests [28] 345 245 Basic earnings per share on net profit / (loss) for the year attributable to shareholders of the parent company [15] 0.09 -0.05 Diluted earnings per share on net profit / (loss) for the year attributable to shareholders of the parent company [15] 0.09 -0.05 Weighted average number of shares outstanding (basic) [15] 21,951,116 20,676,531 Weighted average number of shares outstanding (diluted) [15] 21,987,446 20,676,531 1 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]. 2 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 1/1 - 31/12/2024 1/1 - 31/12/2023 kEUR kEUR Net profit / (loss) 2,419 -699 Other comprehensive income Items that may be reclassified subsequently to profit or loss: Currency translation differences 50 54 Currency translation differences reclassified to profit or loss -146 0 Revaluation of listed debt securities -2 5 Other comprehensive income/(loss), net of tax -98 59 Total comprehensive income/(loss) 2,321 -640 Attributable to non-controlling interests 345 266 Attributable to shareholders of the parent company 1,976 -906 CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS 31/12/2024 31/12/2023 Note kEUR kEUR Non-current assets Intangible assets [16], [17] 336 168 Property, plant and equipment [17] 100 173 Right-of-use assets [41] 1,197 1,184 Investment in associate [4] 5,056 3,687 Other financial assets [18] 356 249 Deferred tax assets [14] 68 183 Total non-current assets 7,113 5,644 Current assets Securities and deposits with maturity over three months [19] 0 3,523 Trade receivables [20] 16,018 13,124 Other receivables [21] 305 400 Income tax receivables [22] 764 310 Other financial assets [23] 15 98 Cash and cash equivalents [24] 24,155 19,842 Total current assets 41,257 37,297 Total assets 48,370 42,941 CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY AND LIABILITIES 31/12/2024 31/12/2023 Note kEUR kEUR Equity attributable to shareholders of the parent company Issued capital [25] 1,160 1,160 Share premium [26] 67,149 67,173 Reserves [27] -48,600 -50,669 Total 19,709 17,664 Non-controlling interests [28] 894 1,217 Total equity 20,603 18,881 Non-current liabilities Other liabilities [29], [41] 853 822 Total non-current liabilities 853 822 Current liabilities Trade payables [30] 20,610 17,657 Contract liabilities [31] 223 382 Other liabilities [32] 2,433 1,990 Other financial liabilities [33] 3,471 3,006 Income tax liabilities [14] 177 203 Total current liabilities 26,914 23,238 Total liabilities 27,767 24,060 31/12/2024 31/12/2023 Note kEUR kEUR Total equity and liabilities 48,370 42,941 CONSOLIDATED STATEMENT OF CASH FLOWS 1/1 - 31/12/2024 1/1 - 31/12/2023 Note kEUR kEUR Net profit / (loss) 2,419 -699 Adjustments for: Depreciation and amortisation [16], [17], [41] 843 1,018 Gain on sale of fixed assets [11] -21 -6 Share-based compensation [38] 42 235 Gain on sale of securities and other investments (after bank charges) [13], [19] -17 -2 Other financial income -230 -163 Share of profit of an associate [4] -1,501 -199 Income taxes [14] 489 68 Income from the release of accrued liabilities [11], [37] -1,092 -1,016 Other non-cash expenses and (income) 38 -25 Gross cash flow 970 -790 Change in trade receivables [12], [20] -3,083 4,362 Change in other assets -21 7 1/1 - 31/12/2024 1/1 - 31/12/2023 Note kEUR kEUR Change in trade payables [30] 3,737 -2,287 Change in other liabilities 1,338 -107 Income taxes received 0 476 Income taxes paid -843 -578 Interest received 312 202 Interest paid -69 -46 1/1 - 31/12/2024 1/1 - 31/12/2023 Note kEUR kEUR Net cash flow from operating activities 2,341 1,239 Purchase of intangible assets and property, plant and equipment [16], [17] -303 -114 Proceeds from sale of property, plant and equipment [11] 21 6 Proceeds from sale of securities and maturing fixed deposits [19] 3,535 6,085 Purchase of securities [19] 0 -3,521 Proceeds from distributed dividends [4] 135 0 Net cash flow from investing activities 3,389 2,456 Payment of lease liabilities [41] -628 -595 Dividends to non-controlling interests [28] -669 -286 Transaction costs on issue of shares [26] -24 -12 Net cash flow used in financing activities -1,321 -893 Net increase in cash and cash equivalents 4,409 2,802 1/1 - 31/12/2024 1/1 - 31/12/2023 . Note kEUR kEUR Cash and cash equivalents at beginning of period 19,842 17,008 Effect of exchange rates on cash and cash equivalents -96 33 Cash and cash equivalents at end of period [24] 24,155 19,842 additional transaction costs in conjunction with the investment in solute Holding GmbH & Co. KG made in 2023 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 2024 Balance Net profit / Other Total Share- Dividends Issuance of Transaction costs NCI put Balance at at (loss) for the comprehensive comprehensive based shares related to issue of share liability 31/12/2024 1/1/2024 period income income payment capital Note Issued capital (kEUR) [25] 1,160 0 0 0 0 0 0 0 0 1,160 Share premium (kEUR) [26] 67,173 0 0 0 0 0 0 0 -24 67,149 Reserves [27] Treasury reserve (kEUR) -6,138 0 0 0 0 0 0 0 0 -6,138 For employee stock option plans (kEUR) [38] 3,073 0 0 0 0 0 0 0 94 3,167 Accumulated deficit (kEUR) -44,854 2,074 0 2,074 0 0 0 0 0 -42,780 Currency translation basis of preparation differences (kEUR) -1,120 0 -96 -96 0 0 0 0 0 -1,216 Revaluation of listed debt securities (kEUR) [19] 2 0 -2 -2 0 0 0 0 0 0 Other reserves (kEUR) -1,633 0 0 0 0 0 0 0 0 -1,633 Subtotal reserves (kEUR) -50,669 2,074 -98 1,976 9 4 0 0 0 0 -48,600 Balance Net profit / Other Total Share- Dividends Issuance of Transaction costs NCI put Balance at at (loss) for the comprehensive comprehensive based shares related to issue of share liability 31/12/2024 1/1/2024 period income income payment capital Note Equity attributable to shareholders of the parent company (kEUR) 17,664 2,074 -98 1,976 94 0 0 -24 0 19,709 Non-controlling interests (kEUR) [28] 1,217 345 0 345 0 -669 0 0 0 894 Total equity (kEUR) 18,881 2,419 -98 2,321 94 -669 0 -24 0 20,603 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 2023 Balance Net Other Total Share- Dividends Issuance of Transaction costs NCI put Balance at at profit/(loss) comprehensive comprehensive based shares related to issue of share liability 31/12/2023 1/1/2023 for the period income income payment capital Note Issued capital (kEUR) [25] 1,075 0 0 0 0 0 85 0 0 1,160 Share premium (kEUR) [26] 63,782 0 0 0 0 0 3,403 -12 0 67,173 Reserves [27] Treasury reserve (kEUR) -6,138 0 0 0 0 0 0 0 0 -6,138 For employee stock option plans (kEUR) [38] 2,906 0 0 0 167 0 0 0 0 3,073 Accumulated deficit (kEUR) -43,910 -944 0 -944 0 0 0 0 0 -44,854 Currency translation basis of preparation differences (kEUR) -1,153 0 33 33 0 0 0 0 0 -1,120 Revaluation of listed debt securities (kEUR) [19] -3 0 5 5 0 0 0 0 0 2 Other reserves (kEUR) -2,070 0 0 0 0 0 0 0 437 -1,633 Subtotal reserves (kEUR) -50,367 -944 38 -906 167 0 0 0 437 -50,669 Equity attributable to shareholders of the parent company (kEUR) 14,490 -944 38 -906 167 0 3,488 -12 437 17,664 Non-controlling interests (kEUR) [28] 1,176 245 21 266 0 -286 0 0 62 1,217 Total equity (kEUR) 15,666 -699 59 -640 167 -286 3,488 -12 499 18,881 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 2024 were authorised for issue by the Board of Directors on 30 April 2024. ad pepper media International N.V. is a public Company incorporated in the Netherlands (Commercial Register No. 27182121), domiciled at Frankenstrasse 146, 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, unless presented otherwise. 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 31/12/2024 31/12/2023 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 0 100 ad pepper media Spain S.A., Madrid, Spain 65 65 Entity 31/12/2024 31/12/2023 Share in percent Share in percent 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 Webgains Sp.z o.o., Warsaw, Poland 100 0 ad pepper media LLC, New York, USA has been dissolved as of December 31, 2024. Associate Since October 2023 the Group holds a 25.64 percent share and has significant influence 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 2023 except for the adoption of new standards effective as of 1 January 2024. 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 2024, 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 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 a) Clarify that the classification is based on the entity’s rights at the end of the reporting period, and b) Make clear the link between the settlement of the liability and the outflow of resources from the entity. The amendment has no 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 has no 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 has no 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. New amendments and interpretations requiring application in financial years beginning 1 January 2026: • Amendments to IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments. The amendments clarify “settlement date” for derecognition of a financial liability. Other clarifications include the classifications of financial assets with ESG linked features. Further disclosures are introduced for financial instruments with contingent features and equity instruments classified at fair value through OCI. The amendment is not yet endorsed by EU and is not expected to have an impact on the Group. • Annual Improvements Volume 11. A collection of amendments to IFRS’s to clarify guidance and wording or to correct for relatively minor unintended consequences, conflicts or oversights. The improvements are not yet endorsed by EU and are not expected to have significant impact on the Group New standards requiring applications in financial years beginning 1 January 2027: • IFRS 19 Subsidiaries without Public Accountability. The new standard has been issued on 9 May 2024 and is expected to be effective on 1 January 2027. The amendment is not yet endorsed by EU and is not expected to have an impact on the Group. • IFRS 18 Presentation and Disclosure in Financial Statements. The new standard replaces IAS 1 Presentation of Financial Statements. It has been issued on 9 April 2024 and is expected to be effective on 1 January 2027. The Group is evaluating the impact of the standard on the Group’s financial statement. 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 [30]), incremental borrowing rates of right-of-use liabilities (Note [41]), the provision for expected credit losses of trade receivables (Note [40]), share based payments (Note [38]) 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 recognizing 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 [38]. 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 31/12/24 31/12/23 2024 2023 USD 1.045 1.1114 1.045 1.0647 GBP 0.8295 0.8706 0.8524 0.8877 CHF 0.9435 0.9302 1.0341 1.0441 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 recognised 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 in a step acquisition, 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 recognised 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. The Group assesses whether climate risks, including physical risks and transition risks could have a significant impact. 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 of disposal 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 of disposal, 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. 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. An allowance for expected credit losses (ECLs) is a present value of the difference between the contractual cash flows due and all the cash flows expected to be received. 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 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. 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. An allowance for expected credit losses (ECLs) is a present value of the difference between the contractual cash flows due and all the cash flows expected to be received. 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 behavior, 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, 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 [38]. 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. Current tax assets and liabilities are only offset by each entity in the Group if: • It has a legally enforceable right to set off the recognised amounts, and • It intends to either settle on a net basis or realise the asset and settle the liability simultaneously. Entities in the Group typically have the right to offset a current tax asset against a current tax liability if both are related to income taxes levied by the same taxation authority and the authority allows for a single net payment. In the Consolidated Financial Statements, offsetting of current tax assets and liabilities across different entities in the Group is permissible only if the entities in the Group have a legal right to make or receive a single net payment and intend to do so, or plan to realise the asset and settle the liability at the same time. 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. Climate-related matters The Group considers climate-related matters in estimates and assumptions, where appropriate. This assessment includes a wide range of possible impacts on the group due to both physical and transition risks. Even though the Group believes its business model and products will still be viable after the transition to a low-carbon economy, climate-related matters increase the uncertainty in estimates and assumptions. Even though climate-related risks might not currently have a significant impact on measurement, the Group is closely monitoring relevant changes and developments, such as new climate-related legislation. The following item is most directly impacted by climate-related matters: - Useful life of property, plant and equipment. When reviewing the residual values and expected useful lives of assets, the Group considers climate-related matters, such as climate- related legislation and regulations that may restrict the use of assets or require significant capital expenditures. See paragraph “property, plant and equipment of Note [3] for further information. BUSINESS COMBINATIONS & INVESTMENTS IN AN ASSOCIATE [4] As in 2023, no business combinations occurred in the 2024 financial year. Since 30 October 2023 the Group has a 25.64 percent interest and significant influence in solute Holding GmbH & Co. KG, Hanover, Germany, which is the Holding Company of solute GmbH, an operator of price comparison portals in Germany. 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-capitalised 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 contracts 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. 31/12/2024 31/12/2023 kEUR kEUR Current assets 18,879 10,733 Non-current assets 8,153 9,729 Non-current liabilities 0 463 Current liabilities 4,974 4,438 Provisions 2,014 1,385 Equity 20,044 14,177 Groups share in equity 25.64 % (2023: 25.64 % for November and December 2023) 5,139 3,634 Distributed dividend -135 0 Notional goodwill 52 52 Group’s carrying amount of the investment 5,056 3,687 Due to a calculation error we adjusted 2023 balance sheet figures of solute within the comparative figures in this disclosure note. The adjustment has no material impact on the investment valuation as of 31 December 2023. 1/1/ – 31/12/2024 1/1/ – 31/12/2023 kEUR kEUR Revenue 44,707 35,537 Cost of Sales -33,327 -25,893 Gross profit 11,380 9,644 Selling and marketing expenses -2,622 -2,277 General and administrative expenses -6,275 -6,649 Other operating income 1,173 1,116 Other operating expenses -253 -218 Finance income 3,536 90 Finance expense -28 -79 Profit / (loss) before tax 6,913 1,627 Income taxes -1,045 -444 Profit / (loss) for the period 5,867 1,183 Other comprehensive income 0 0 Total comprehensive income for the period 0 0 Group’s share of profit / (loss) for the period 1,504 199 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 2024 Segments ad pepper Webgains ad agents Total kEUR kEUR kEUR kEUR Geographical markets Germany 1,026 2,566 5,102 8,695 United Kingdom 0 6,066 0 6,066 Spain 1,068 2,146 0 3,214 Other 0 1,577 1,898 3,476 Revenue 2,095 12,355 7,000 21,450 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 includes Switzerland, France, Italy and the Netherlands. Contract balances 31/12/24 31/12/23 kEUR kEUR Contract liabilities 223 382 Contract liabilities include short-term advances received from customers during 2024 mainly 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 2024 and 31 December 2023, the Group’s calculation resulted in amounts that have no material impact on the revenue recognised in the financial year. 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. 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. Intersegment Financial year 2024 ad pepper Webgains ad agents Admin elimination Group kEUR kEUR kEUR kEUR kEUR kEUR Gross sales 4,282 58,274 27,101 0 0 89,656 Thereof external 4,282 58,274 27,101 0 0 89,656 Thereof intersegment 0 0 0 0 0 0 Revenue 2,095 12,355 7,001 171 -172 21,450 Thereof external 2,095 12,355 7,000 0 0 21,450 Thereof intersegment 0 0 1 171 -172 0 Gross profit 1,846 12,052 6,792 171 -1 20,861 Intersegment Financial year 2024 ad pepper Webgains ad agents Admin elimination Group kEUR kEUR kEUR kEUR kEUR kEUR Expenses (including cost of -2,476 -9,895 -6,477 -1,613 171 -20,291 sales) and other income Thereof amortisation and depreciation -109 -347 -199 -188 0 -844 Thereof other non-cash -100 -75 -15 0 0 -190 expenses Thereof other non-cash income 177 1,053 63 -50 0 1,243 EBITDA -273 2,808 723 -1,254 -1 2,003 Operating profit (EBIT) -382 2,461 524 -1,442 -1 1,160 Financial income 0 54 9 299 -45 317 Financial expenses -24 -74 -14 -3 45 -69 Share of profit of an associate 0 0 0 1,501 0 1,501 Income taxes -50 -205 -228 -6 0 -489 Net profit/(loss) for the year -455 2,236 290 349 -1 2,419 Financial year 2023 ad pepper Webgains ad agents Admin Intersegment Group elimination 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 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 and other income Thereof amortisation and depreciation -111 -467 -236 -204 0 -1,018 Thereof other non-cash expenses -162 0 0 -47 0 -209 Intersegment Financial year 2023 ad pepper Webgains ad agents Admin elimination Group kEUR kEUR kEUR kEUR kEUR kEUR Thereof other non-cash income 91 1,137 19 4 0 1,251 EBITDA -483 2,060 209 -1,762 0 24 Operating profit (EBIT) -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 profit/(loss) for the year -665 1,461 47 -1,542 0 -699 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 customers Non-current assets Investment in an associate 2024 2023 31/12/2024 31/12/2023 31/12/2024 31/12/2023 kEUR kEUR kEUR kEUR kEUR kEUR Germany 8,695 9,134 850 420 5,056 3,687 United Kingdom 6,066 6,135 628 876 0 0 Spain 3,214 3,359 80 164 0 0 Other 3,476 3,121 74 64 0 0 Total 21,450 21,749 1,633 1,524 5,056 3,687 NOTES TO THE INCOME STATEMENT [7] The income statement was prepared using the function of expense method. The expenses include personnel expenses of EUR 15,404k (2023: EUR 16,423k) as well as depreciation and amortisation of EUR 750k (2023: EUR 1,018k), thereof EUR 631k (2023: EUR 638k) depreciation on right-of-use assets. Amortisation of intangible assets is included in selling expenses EUR 84k (2023: EUR 249k) and administration expenses EUR 12k (2023: EUR 22k). The personnel expenses include the employer’s contribution to state pension schemes amounting to EUR 648k (2023: EUR 716k), which must be disclosed as employer’s contribution to a defined contribution plan. MEDIA COST AND COST OF SALES [8] Media cost 2024 2023 kEUR kEUR ad pepper 2,187 2,351 ad agents 20,100 18,309 Webgains 45,919 43,579 Total media cost 68,206 64,239 COS 590 873 Total 68,796 65,112 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: 2024 2023 kEUR kEUR Personnel costs 11,118 12,008 Depreciation and amortisation 66 80 Advertising and sales promotion 315 330 Professional and other services 659 927 General operating costs (communication, travel, other supplies) 1,114 1,248 Other 90 274 Total 13,363 14,867 GENERAL AND ADMINISTRATIVE EXPENSES [10] The expenses are broken down as follows: 2024 2023 kEUR kEUR Personnel costs 4,286 4,415 Depreciation on right-of-use assets 608 606 Depreciation and amortisation 85 83 Other facility costs 454 510 Professional and other services 1,061 1,482 General operating costs (communication, travel, other supplies) 724 647 Other 17 43 Total 7,235 7,785 OTHER OPERATING INCOME [11] Other operating income consists of the following: 2024 2023 kEUR kEUR Foreign exchange gains 46 0 Gains on sale of property, plant and equipment 21 6 Income from the release of accrued liabilities 789 865 Other 254 95 Total 1,110 966 Income from the release of accrued liabilities includes an amount of EUR 620k (2023: EUR 706k) 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 168k in connection with time-barred claims (2023: EUR 159k). Other contains mainly a received settlement payment amounting to EUR 150k, closing a legal dispute with pepper.com. OTHER OPERATING EXPENSES [12] Other operating expenses consist of the following: 2024 2023 kEUR kEUR Foreign exchange losses 0 82 Expected credit losses on trade receivables 190 82 Other 24 20 Total 214 184 FINANCIAL RESULT, NET [13] Net financial result consists of the following: 2024 2023 kEUR kEUR Interest income 300 208 Realised gains from securities measured at ”fair value through other comprehensive income“ 17 2 Financial income 317 210 Interest expenses 0 -6 Interest on lease liabilities -69 -40 Financial expenses -69 -46 Net financial result 247 164 INCOME TAXES [14] Income tax expenses 2024 2023 kEUR kEUR Current income tax expenses -374 -172 Deferred income tax income/(expense) -115 104 Total -489 -68 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., Webgains Ltd. and Webgains Italy S.r.L. SB, deferred tax assets of EUR 10,222k (2023: EUR 10,954k) were calculated on the basis of the unused tax losses of EUR 33,206k (2023: EUR 36,046k). 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 41k (2023: EUR 165k) 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 2024 2023 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 (2023: EUR 0k). The change in deferred tax assets on temporary differences recognised in profit or loss amounts to EUR 9k (2023: EUR 18k). 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 68k (2023: EUR 183k) and deferred tax liabilities of EUR 0k (2023: 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 (2023: EUR 0k) on tax losses are recognised for companies with a history of losses. No deferred tax liabilities were recognised as of 31 December 2024 (2023: 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 considering 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 (2023: 32.17 percent) is as follows: 2024 2023 kEUR kEUR Expected income tax -936 203 Effect of lower tax rate in other jurisdiction 213 150 Tax-free gains 42 1 Prior year income tax -21 58 Gains on databases sold intercompany 0 0 Utilisation of previously unrecognised tax losses 0 5 Current year tax losses not recognised -244 -525 Non-deductible stock option income/(expense) -19 -76 (De) recognition of prior year losses 66 69 Tax-exempt income from investment in associates 485 64 2024 2023 kEUR kEUR Non-tax-deductible expenses and other -75 -17 Actual income tax expenses -489 -68 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: 2024 2023 Net profit / (loss) attributable to shareholders of the parent company in kEUR 2,074 -944 Number of shares at the beginning of the period 21,951,116 20,257,872 Number of shares at the end of the period 21,951,116 21,951,116 Weighted average number of shares outstanding (basic) 21,951,116 20,676,531 Weighted average number of shares outstanding (diluted) 21,987,446 20,676,531 Earnings per share in EUR (basic) 0.09 -0.05 Earnings per share in EUR (diluted) 0.09 -0.05 The weighted average number of shares outstanding in 2024 was calculated on a daily basis. In 2024 the options granted resulted in a dilution of 36,330 shares (2023: no dilution). No treasury shares (2023: 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 2024 and 2023, 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 of EUR 261k (2023: EUR 61k) ate to 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 2024 Balance at Additions Disposals Exchange Balance at Balance at Depreciation / Disposals Exchange Balance at Financial year Previous 1/1/2024 differences 31/12/2024 1/1/2024 amortisation differences 3/12/2024 31/12/2024 year 31/12/2023 kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR Intangible assets Software 3,161 261 0 56 3,478 -2,994 -96 0 -53 -3,143 335 167 Brands and customer bases 644 0 0 0 644 -643 0 0 0 -643 1 1 Total 3,805 261 0 56 4,122 -3,637 -96 0 -53 -3,786 336 168 Property, plant and equipment Other equipment, operational and office equipment 1,091 42 -332 10 811 -918 -116 332 -9 -711 100 173 Total 4,896 303 -332 66 4,933 -4,555 -213 332 -62 -4,498 436 341 Historical cost Accumulated depreciation / amortisation / impairment Book value Financial year Balance at Additions Disposals Exchange Balance at Balance at Depreciation/ Disposals Exchange Balance at Financial year Previous 2023 1/1/2023 differences 31/12/2023 1/1/2023 amortisation differences 31/12/2023 31/12/2023 year 31/12/2022 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 OTHER NON-CURRENT FINANCIAL ASSETS [18] Other financial assets consist of the following and are measured at amortised cost: 31/12/24 31/12/23 kEUR kEUR Deposits 356 249 Total 356 249 The maturities of the other financial assets as at the end of the period are as follows: 31/12/24 31/12/23 kEUR kEUR Due in between one and five years 356 249 Due in more than five years 0 0 Total 356 249 CURRENT ASSETS CURRENT SECURITIES [19] Overview about current securities: 2024 Debt securities Deposits Total kEUR kEUR kEUR Book value 1/1 1,985 1,538 3,523 Maturity -2,000 -1,538 -3,538 Realised gains/losses (-) 17 0 17 Unrealised gains/losses (-) -2 0 -2 Book value 31/12 0 0 0 2023 Debt securities Deposits Total kEUR kEUR kEUR Book value 1/1 991 5,085 6,076 Purchase 1,983 0 1,983 Investment in 0 2,538 2,538 time deposits Maturity 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 Securities classified at “fair value through other comprehensive income” 2024 2023 kEUR kEUR Book value 1/1 1,985 991 Purchase 0 1,983 Sale/Maturity -2,000 -1,000 Realised gains 17 6 Unrealised gains/ -2 5 losses (-) in other comprehensive income Book value 31/12 0 1,985 TRADE RECEIVABLES [20] Trade receivables are initially measured at fair value and subsequently carried at amortised cost. Trade receivables consist of the following: 31/12/24 31/12/23 kEUR kEUR Trade receivables, gross 16,555 13,742 Provision -537 -618 Trade receivables, net 16,018 13,124 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 2024. For further information, please refer to Notes [3] and [40]. As at 31 December 2024, all campaigns were billed to the extent that revenue was recognised. Consequently, the amount of contract assets is nil. OTHER RECEIVABLES [21] Other receivables consist of the following: 31/12/24 31/12/23 kEUR kEUR Value-added tax receivables 0 53 Prepayments 305 347 Total 305 400 INCOME TAX RECEIVABLES [22] Net income tax payments of EUR 841k were made in 2024 (2023: EUR 578k) . OTHER CURRENT FINANCIAL ASSETS [23] Other current financial assets consist of the following: 31/12/24 31/12/23 kEUR kEUR Bonus payments from delivery partners 0 60 Other 15 38 Total 15 98 CASH AND CASH EQUIVALENTS [24] 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 24,155k (2023: EUR 19,842k). EQUITY ISSUED CAPITAL [25] No new shares in ad pepper media International N.V. were issued and admitted for trading on the Frankfurt Stock Exchange in 2024 (2023: 1,693,244 shares). The issued capital of ad pepper media International N.V. comprises 23,193,244 (2023: 23,193,244) bearer shares each with a nominal value of EUR 0.05 and is fully paid in. SHARE PREMIUM [26] kEUR At 1/1/2024 67,173 Transaction costs for issued share capital -23 At 31/12/2024 67,150 kEUR At 1/1/2023 63,782 Issuance of share capital for the acquisition of the 3,403 investment in solute Holding GmbH & Co. KG Transaction costs for issued share capital -12 At 31/12/2023 67,173 The capital reserve mainly comprises the premium paid upon share issued. RESERVES [27] Reserves include treasury reserves with a value of EUR -6,138k (2023: EUR -6,138k). By a shareholders’ resolution dated 16 June 2024, 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 program. As of 31 December 2024, the Company held 1,242,128 treasury shares (2023: 1,242,128) at a nominal value of EUR 0.05 each, which equals 5.36 percent (2023: 5.36 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 (2023: no shares), no cash settlements of equity settled stock option plans occurred (2023: no shares). The number of shares issued and outstanding as at 31 December 2024 totalled 21,951,116 (2023: 21,951,116). Each share has a nominal value of EUR 0.05. Reserves include also the expenses incurred for stock option plans amounting to EUR 3,167k (2023: EUR 3,073k) and the currency translation reserve amounting to EUR -1,216k (2023: EUR -1,120k). 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: 2024 Before Income taxes After income taxes income taxes Currency translation differences 50 0 50 Currency translation differences reclassified into profit or loss -146 0 -146 Revaluation of listed debt securities -2 0 -2 Total other comprehensive income -98 0 -98 2023 Before Income taxes After income taxes income taxes Currency translation differences 54 0 54 Currency translation differences reclassified into profit or loss 0 0 0 Revaluation of listed debt securities 5 0 5 Total other comprehensive income 59 0 59 NON-CONTROLLING INTERESTS [28] Non-controlling interests comprise non-controlling interests in the following subsidiaries as at 31 December 2024 and 2023: Location non-controlling interest in percent ad pepper media Spain S.A. Madrid/Spain 35 Webgains S.L. Madrid/Spain 35 ad agents GmbH Herrenberg/Germany 40 ad agents AG Zürich/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 profit / loss for the year is allocated proportionately to the non-controlling interests. In 2024, non-controlling interests in ad pepper media Spain S.A. received a dividend payment of EUR 230k (2023: EUR 286k), while EUR 115k dividend was paid to non-controlling interests of ad agents GmbH in 2024 (2023: EUR 0k). Summarized financial information in respect of ad pepper media’s subsidiaries that have material non-controlling interest as at 31 December 2024, 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 Spain Webgains S.L. S.A. 31/12/24 31/12/23 31/12/24 31/12/23 31/12/24 31/12/23 31/12/24 31/12/23 kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR Non-current assets 322 260 229 116 58 68 65 138 Current assets 6,467 7,437 1,088 1,197 736 896 2,021 1,877 Total assets 6,788 7,697 1,317 1,313 793 964 2,086 2,015 Non-current liabilities 29 41 28 0 0 0 27 63 Current liabilities 5,223 5,367 605 559 308 454 1,492 1,425 Total liabilities 5,252 5,408 632 559 308 454 1,519 1,488 Net assets 1,536 2,289 685 754 486 510 566 527 Equity attributable to owners of the Company 922 1,373 411 452 486 510 566 527 Non-controlling interests after reclassification into current liabilities in conjunction 615 915 274 302 0 0 0 0 with put option Non-controlling interests 40 40 40 40 35 35 35 35 in percent after reclassification into current liabilities. For further information please refer to Note [2] and Note [34] ** due to immaterial abbreviation of EUR -4k in the current years valuation of the put liability, the Group abstained from the reclassification of the non-controlling interest effect of the year amounting to EUR 5k into current liabilities. ad agents GmbH ad agents AG ad pepper media Spain S.A. Webgains S.L. 2024 2023 2024 2023 2024 2023 2024 2023 kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR Revenue 5,102 5,569 1,898 1,920 1,068 1,366 1,275 1,281 Expenses -5,335 -6,089 -1,376 -1,354 -943 -1,216 -745 -790 Net profit/(loss) for the year -232 -520 522 566 125 150 530 491 Net profit/(loss) attributable to owners of the -139 -312 314 340 81 98 344 319 Company Net profit/(loss) attributable to non-controlling -93 -208 209 226 44 52 186 172 interests Other comprehensive 0 0 0 0 0 0 0 0 income attributable to owners of the Company Other comprehensive 0 0 0 21 0 0 0 0 income attributable to non-controlling interests Total comprehensive -232 -520 522 587 125 150 530 491 income/(loss) for the year Net cash inflow/(outflow) -1,249 978 582 401 -66 329 651 525 from operating activities Net cash inflow/(outflow) -14 -14 0 -2 -1 -3 0 0 from investing activities Net cash inflow/(outflow) -655 523 -616 -1,408 -190 -286 -524 -613 from financing activities Total net cash inflow/(outflow) -1,918 1,487 -34 -1,009 -257 40 127 -88 NON-CURRENT LIABILITIES OTHER LONG-TERM LIABILITIES [29] Other long-term liabilities consist of the following: 31/12/24 31/12/23 kEUR kEUR Employee benefits liability 13 68 Lease liability 840 754 Total 853 822 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 [38]. During the year, lease liabilities including interests were paid for an amount of EUR 698k (2023: EUR 595k). The maturities of the other long-term liabilities as of the end of the period are as follows: 31/12/24 31/12/23 kEUR kEUR Due in between one and five years 853 822 Due in more than five years 0 0 Total 853 822 CURRENT LIABILITIES TRADE PAYABLES [30] 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 12,875k (2023: EUR 11,883k). CONTRACT LIABILITIES [31] Contract liabilities consist of short-term advances for search engine advertising services from clients in the ad agents segment. 2024 2023 kEUR kEUR At 1/1 382 465 Deferred during the year 1,685 1,266 Recognised as revenue during the year -1,842 -1,358 Exchange differences -2 9 At 31/12 223 382 OTHER LIABILITIES [32] Other liabilities consist of the following: 31/12/24 31/12/23 kEUR kEUR Value-added tax liabilities 1,860 1,349 Liabilities for payroll tax and social security contributions 366 369 Employee holiday accrual 163 198 Other 44 74 Total 2,433 1,990 OTHER FINANCIAL LIABILITIES [33] Other financial liabilities consist of the following: 31/12/24 31/12/23 kEUR kEUR Liability for written put option 1,996 1,996 Bonuses and commissions 609 176 Accrued liabilities for outstanding invoices 390 297 Current lease liabilities 476 536 Other 0 1 Total 3,471 3,006 The put option liability relates to the obligation resulting from the written put/call option over the 35 percent non-controlling interest in ad pepper media Spain S.A with no termination date. The amount of the financial liability is the exercise price of the option based on a contractually agreed EBIT multiple. In 2024 the liability value remained unchanged to prior year, due to an immaterial adjustment value of EUR -4k. RELATED PARTY DISCLOSURES [34] 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 [39]. All entities over which the Supervisory Board Chairman Michael Oschmann has significant influence are considered as related parties to the Company. 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 by related parties related parties Entity with significant 2024 2023 2024 2023 influence over the Group: Sellwerk GmbH & Co. KG 374 324 94 107 The amounts are classified as trade receivables (Note [20]). Beside the operating transaction showed above, there were no other transactions with related parties. 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 2024, the Group recognised no material provision for expected credit losses in respect of amounts owed by related parties (31 December 2023: nil). LITIGATION AND CLAIMS [35] Neither the ultimate parent nor any of its subsidiaries are involved in any material litigation with third parties. In 2024 the company closed a pending trademark litigation with pepper.com and received a settlement payment of EUR 150k (Note [11]). CONTINGENT LIABILITIES AND OTHER FINANCIAL OBLIGATIONS [36] 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 2024, 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 2024, ad pepper media GmbH’s outstanding liabilities amounted to EUR 513k (2023: EUR 407k). 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 2024, 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 4,432k (2023: EUR 3,639k). 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 2024 are as follows: < 1 year > 1 year > 5 years Total to 5 years kEUR kEUR kEUR kEUR Other financial obligations 232 13 0 244 ADDITIONAL CASH FLOW INFORMATION [37] 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. In 2023 the Company issued 1,693,244 shares, which has been used for the acquisition of the investment in solute Holding GmbH & Co. KG. STOCK OPTION PROGRAMMES [38] Options granted under the Ongoing SOP’s are subject to the following provisions: An employee equity participation programme 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 programme over the entire time is EUR 302k. An employee equity participation programme 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 programme over the entire time is EUR 26k. A share appreciation rights programme 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 2024 is between EUR 0.148 and EUR 0.528 (31. December 2023: 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 cost of the programme over the entire period was EUR 16k. The remaining 5,000 options have been forfeited with maturity of the plan on April 11, 2024. SOP 2023 (BoD, MD, SB) Share price when granted, in EUR 1.86 Date of grant 3/1/23 Exercise price, in EUR 1.86 Risk-free interest rate, in percent 2.42 Estimated term, in years 7 Future dividend, in EUR 0.05 Estimated volatility, in percent 42.85 The average share price during 2024 was EUR 2.00 (2023: EUR 2.31). The personnel expense recognised for employee services received during the year is shown in the following table: 2024 2023 Expense arising from equity-settled share-based payment transactions 94 167 Expense/(income) arising from the measurement of the liability for cash-settled share-based payment transactions -15 68 Total expense/(income) arising from share-based payment transactions 79 235 The following table shows the changes in the options during the financial year 2024 and 2023: 2024 2023 Weighted average Weighted average exercise price 2024 exercise price 2023 Options outstanding at the beginning of the financial year 846,500 430,000 Options granted during the financial year 0 841,500 Options exercised during the financial year -46,875 0 1.86 Options forfeited during the financial year -5,000 -100,000 Options cancelled during the financial year 0 -325,000 Options outstanding at the end of the financial year 794,625 846,500 Exercisable options as of 31 December 163,500 5,000 Exercise prices of outstanding options as of 31 December 1.86 1.86 The weighted exercise price of stock options exercised during 2024 amounts to EUR 1.86 (2023: not applicable). All outstanding stock option programmes have an expiration date with an average remaining contractual life of 5 years. TOTAL REMUNERATION OF KEY MANAGEMENT [39] 2024 2023 kEUR kEUR Short-term employee benefits 441 299 Post-employment benefits (pensions and health insurance) 20 20 Stock options -15 68 Total remuneration of key management 445 387 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 price 31/12/24 31/12/23 EUR Number Number SOP 2023 (share appreciation rights) 2/1/2030 1.86 140,625 187,500 FINANCIAL INSTRUMENTS [40] 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 2024 compared to 31 December 2023. Negative net indebtedness means that the Group is debt-free. Net indebtedness at the end of the year was as follows: 31/12/24 31/12/23 kEUR kEUR Current and non-current financial liabilities 24,934 21,485 Cash and cash equivalents -24,155 -19,842 Listed debt and marketable securities 0 -3,523 Net liabilities 779 -1,880 Equity per balance sheet including non-controlling interest 20,603 18,881 Net indebtedness, in percent 4 -10 2. Material accounting policies The rent and similar deposits referred to in Note [18], carried at their nominal amount of EUR 98k (2023: 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 31/12/24 31/12/23 kEUR kEUR Debt instruments at amortised cost 40,544 35,298 Trade receivables (Note [20]) 16,018 13,124 Deposits (Note [18], [19]) 356 2,234 Other receivables (Note [23]) 15 98 Cash and cash equivalents (Note [24]) 24,155 19,842 Debt instruments at fair value through other comprehensive income 0 1,538 Securities (Note [19]) 0 1,538 Total financial assets 40,544 35,298 Total current 40,188 35,049 Total non-current 356 249 In 2023 fair values of these instruments were determined by reference to published price quotations in an active market. Financial liabilities 31/12/24 31/12/23 kEUR kEUR Other financial liabilities measured at amortised cost 24,921 21,417 Lease liabilities (Note [41]) 1,317 1,290 Trade payables (Note [30]) 20,610 17,657 Other payables (Note [33]) 998 474 Written put option (Note [33]) 1,996 1,996 Other financial liabilities measured at fair value 13 68 Share appreciation rights 13 68 Total financial liabilities 24,934 21,485 Total current 24,081 20,663 Total non-current 853 822 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, 2024 (Note [38]). Hierarchical classification of fair values of financial instruments pursuant to IFRS 7: Fair Value Fair Value Level 1 Level 2 Level 3 31/12/24 31/12/23 Financial assets at fair value through other comprehensive income 0 1,538 0 0 0 In 2023 fair values of these instruments were determined by reference to published price quotations in an active market (Level 1). Net gains and losses per category of financial instruments (IFRS 7.20 (a)): Financial assets 31/12/24 31/12/23 kEUR kEUR At fair value through other comprehensive income Unrealised gains/losses (-) -2 5 Realised gains/losses (-) 17 6 Total 15 11 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 31/12/24 31/12/23 kEUR kEUR Measured at amortised cost 258 162 Measured at fair value through other comprehensive income 42 40 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 and cash. 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). 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 the exchange rate. The carrying amounts of the monetary assets and liabilities of the Group denominated in foreign currencies are as follows: Financial assets 31/12/24 31/12/23 kEUR kEUR USD 0 303 GBP 10,662 8,174 CHF 1,286 1,307 Total 11,948 9,784 Financial liabilities 31/12/24 31/12/23 kEUR kEUR USD 0 6 GBP 9,818 7,704 CHF 176 74 Total 9,994 7,784 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 +10% Effect of USD +10% Effect of GBP +10% Effect of GBP +10% Total Total 31/12/24 31/12/23 31/12/24 31/12/23 31/12/24 31/12/23 kEUR kEUR kEUR kEUR kEUR kEUR Net profit/(loss) for the year -79 -58 0 -2 -79 -60 Effect of USD -10% Effect of USD -10% Effect of GBP Effect of GBP Total Total 31/12/24 31/12/23 -10% -10% 31/12/24 31/12/23 31/12/24 31/12/23 kEUR kEUR kEUR kEUR kEUR kEUR Net profit/(loss) for the year 97 71 0 2 99 73 7. 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 4.0 percent (2023: 5.7 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 Group recognises an allowance for expected credit losses (ECL) for all debt instruments not held at fair value through profit or loss. An allowance for expected credit losses (ECLs) is a present value of the difference between the contractual cash flows due and all the cash flows expected to be received. 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. 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 2024 2023 kEUR kEUR Balance at beginning of year 618 913 Allowances in the period Additions 275 691 Reversals -275 -600 Utilisation -274 -386 Balance at end of period 537 618 The analysis shows that allowances were set up on a gross receivables amount of EUR 681k (2023: EUR 782k). 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. 8. 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 2024 are presented below. Financial liabilities 31/12/24 < 1 mth. > 1 mth., 3 mth. to 1 year 1 to 5 years > 5 years Total < 3 mth. kEUR kEUR kEUR kEUR kEUR kEUR Lease liabilities 40 79 356 840 0 1,315 Trade payables 20,344 266 0 0 0 20,610 Other financial liabilities measured at amortised cost 488 483 2,025 0 0 2,996 Other financial liabilities measured at fair value 0 0 0 13 0 13 Total 20,871 829 2,381 853 0 24,934 The lease liabilities disclosed in the above table are the gross amounts. Financial liabilities 31/12/23 < 1 mth. > 1 mth., 3 mth. to 1 year 1 to 5 years > 5 years Total < 3 mth. kEUR kEUR kEUR kEUR kEUR kEUR Lease payables 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 LEASES [41] 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 space Cars Total kEUR kEUR kEUR kEUR As at 1 January 2024 2,587 247 2,834 -1,290 Additions 566 46 612 -612 Disposal -1,227 -25 -1,252 0 Exchange rate difference 47 0 47 -42 Subtotal 1,972 268 2,241 -1,944 Depreciation expense as at 1 January 2024 -1,506 -144 -1,650 Depreciation expense -566 -65 -631 Disposal 1,227 24 1,251 Exchange rate difference -12 0 -12 Depreciation expense as at 31 December 2024 -857 -185 -1,042 Payments 698 Interest expense -69 As at 1,115 82 1,197 -1,316 31 December 2024 Right-of-use assets Lease liabilities Office space Cars Total 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 Depreciation expense -557 -81 -638 Disposal 16 76 92 Exchange rate difference -3 0 -3 Depreciation expense as at -1,506 -144 -1,650 31 December 2023 Payments 595 Interest expense -40 As at 31 December 2023 1,081 103 1,184 -1,290 The total amount of lease payments including short term leasing in 2024 amounts to EUR 648k (2023: EUR 708k). The amounts recognised in profit or loss, are as follows: 2024 2023 kEUR kEUR Depreciation expenses of right-of-use assets 631 638 Interest expense on lease liabilities 69 40 Expense relating to short-term leases (included in administrative expense) 20 113 Total amount recognised in profit or loss 720 791 Rental agreements for the office leases in 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 [42] On 24 February 2025 ad pepper media International N.V. signed a purchase agreement for 18.73 % of shares in solute. The purchase price was approximately EUR 4.5m. As consideration, 2,305,195 new shares in ad pepper will be issued without subscription rights of the current shareholders against contribution in kind. On 24 April 2025 ad pepper media International N.V. signed another purchase agreement for 14.5 % of shares in solute, with an effective date as of 1 May 2025. The purchase price was EUR 3.5m. Both transactions will result in a total shareholding of 58.86 % and a majority of voting rights. ad pepper is in the process of assessing the date of the control transfer. Both transactions are regarded as related party transactions. In 2024, solute’s sales amounted to around EUR 44.7m with an EBITDA of approximately EUR 3.9m. APPLICATION OF SEC. 264 PARA. 3 OF GERMAN COMMERCIAL CODE (HBG) [43] 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 Nuremberg, 30 April 2025 The Board of Directors of ad pepper media International N.V. comprised the following members in the financial year 2024: Dr Jens Körner, CEO Nuremberg, Germany The Supervisory Board of ad pepper media International N.V. in the financial year 2024 consisted of: Michael Oschmann (Chairman) Thomas Bauer Dr Stephan Roppel Dagmar Bottenbruch 07 « STATUTORY FINANCIAL 07 07 STATUTORY FINANCIAL STATUTORY FINANCIAL STATEMENTS AND NOTES OF THE HOLDING COMPANY AD PEPPER MEDIA INTERNATIONAL N.V. (THE “HOLDING COMPANY”) BALANCE SHEET OF THE HOLDING COMPANY BALANCE SHEET OF THE HOLDING COMPANY (BEFORE PROFIT APPROPRIATION) – ASSETS (BEFORE PROFIT APPROPRIATION) – EQUITY AND LIABILITIES 31/12/24 31/12/23 31/12/24 31/12/23 Note kEUR kEUR Note kEUR kEUR Non-current assets Equity attributable to shareholders of the parent company Intangible ﬁxed assets 301 42 Issued capital 1,160 1,160 [3] [10] Tangible ﬁxed assets 345 178 Share premium 67,149 67,174 [4] [10] Financial ﬁxed assets 10,408 9,442 Legal reserves -1,216 -1,118 [5] [10] Total non-current assets 11,054 9,662 Other reserves -49,458 -48,607 [10] Current assets Net proﬁt/(loss) for the period 2,074 -944 [10] Marketable securities 0 1,985 Total equity 19,709 17,663 [6] Receivables due from subsidiaries 1,020 948 Provisions 960 544 [7] [11] Prepaid expenses and other current assets 485 273 Non-current liabilities 227 73 [8] [12] Cash and cash equivalents 11,152 7,911 Current liabilities 2,814 2,498 [9] [13] Total current assets 12,657 11,117 Total liabilities 3,041 3,115 Total assets 23,710 20,779 Total equity and liabilities 23,710 20,779 131 132 07 07 STATUTORY FINANCIAL 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 - 31/12/24 1/1 - 31/12/23 Unrealised gains on transactions between the Holding Company and its investments in consolidated subsidiaries are eliminated in full, kEUR kEUR [1] Basis of preparation and based on the consolidation principles. The Holding Company Financial Net Revenue 171 186 material accounting policies Statements are presented in EUR, which is the Holding Company’s Selling and marketing expenses -799 -806 functional currency. The amounts are in thousands of EUR (rounded to The Company Financial Statements for ad pepper media International the nearest thousand), unless otherwise stated. There have been no General and administrative expenses -1,988 -2,436 N.V. (Commercial Register No. 27182121) have been prepared in changes to the accounting policies of the Holding Company. Due to Total expenses -2,787 -3,243 accordance with the statutory provisions of Part 9, Book 2 of the Dutch rounding up or down, individual ﬁgures may not add up exactly to the Civil Code. In accordance with subsection 8 of section 362, Book 2 of Net operating result -2,616 -3,243 totals stated. the Dutch Civil Code, the same accounting principles may be applied Other operating income 1,430 1,240 in the Company’s ﬁnancial statement and the consolidated ﬁnancial Other operating expenses -6 -10 statements. The Holding Company’s ﬁnancial data is included in [2] Changes in Accounting policies the Consolidated Financial Statements. The notes to the Company’s Interest income 1,800 435 balance sheet and income statement are limited to items that differ Interest expenses -2 -11 In 2024 no changes in accounting policies applied. from the corresponding items in the Consolidated Financial Statements Result before taxes 606 -1,403 and that are of material signiﬁcance. Share in result of subsidiaries and participations 1,467 458 [3] Intangible ﬁxed assets The Holding Company applies the acquisition method to account for Net result for the year 2,074 -944 acquiring subsidiaries, consistent with the approach identiﬁed in the Trade- Software Total Consolidated Financial Statements. The consideration transferred for marks Revenue relates solely to license fee charged to subsidiaries. the acquisition of a subsidiary is the fair value of assets transferred to the Holding Company, liabilities incurred to the former owners of kEUR kEUR kEUR Book value at 1/1/23 2 65 67 the acquired company, and the equity interests issued by the Holding Company. The consideration transferred includes the fair value of any Additions 0 31 31 asset or liability resulting from a contingent consideration arrangement. Disposals 0 0 0 Identiﬁable assets acquired and liabilities and contingent liabilities Amortisation -1 -55 -56 assumed in an acquisition are measured initially at their fair values at the acquisition date and are subsumed in the net asset value of the Book value at 31/12/23 1 41 42 investment in consolidated subsidiaries. Acquisition-related costs are Purchase value 643 1,771 2,414 expensed as incurred. Accumulated amortisation -642 -1,730 -2,372 Investments in consolidated subsidiaries are measured at net asset Book value at 31/12/23 1 41 42 value. Net asset value is based on the measurement of assets, provisions Additions 0 261 261 and liabilities, and determination of proﬁt based on the principles applied Disposals 0 0 0 in the Consolidated Financial Statements. If the valuation of a subsidiary based on the net asset value is negative, it will be stated at nil. If and Amortisation -1 -2 -3 insofar as the Holding Company has the ﬁrm intention of enabling the Book value at 31/12/24 0 300 300 participation to settle its debts, a provision is recognised for this. When Purchase value 643 2,031 2,675 the Holding Company ceases to have control over a subsidiary, any retained interest is remeasured to fair value, with the change in carrying Accumulated amortisation -643 -1,731 -2,374 amount to be accounted for in the income statement. When parts of Book value at 31/12/24 0 300 301 investments in consolidated subsidiaries are bought or sold, and such transaction does not result in the loss of control, the difference between the consideration paid or received and the carrying amount of the net Intangible assets are amortised over a useful life of three years. assets acquired or sold is directly recognised in equity. 133 134 07 07 STATUTORY FINANCIAL STATUTORY FINANCIAL [4] Tangible ﬁxed assets [6] Marketable securities liabilities recognised, initial direct costs incurred and lease payments The movements during the year are as follows: made at or before the commencement date, less any lease incentives Tangible ﬁxed assets can be speciﬁed as follows: received. Unless the Group is reasonably certain to obtain ownership of Subsid- Loans to Financial Total 31/12/24 31/12/23 iaries at subsidi- assets the leased asset at the end of the lease term, the capitalised right-of- net asset aries including use assets are depreciated on a straight-line basis over the shorter of value invest- kEUR kEUR 31/12/24 31/12/23 ments their estimated useful lives and the lease term. Right-of-use assets are Due within one year 0 1,985 subject to impairment. kEUR kEUR kEUR kEUR kEUR kEUR Due within one and ﬁve years 0 0 Tangible ﬁxed assets 18 46 Book value The depreciation percentages used for tangible assets range from 12.5 Due in more than ﬁve years 0 0 at 1/1/23 5,344 1,210 34 6,588 Right-of-use assets 327 132 percent to 33.3 percent. Total 0 1,985 Additions 0 250 3,487 3,737 Total 345 178 Written put option [5] Financial ﬁxed assets over the 35 % Securities measured at fair value non-controlling in- Tangible ﬁxed assets 2024 2023 terest in ad pepper through other comprehensive income 31/12/24 31/12/23 media Spain S.A. In the reporting period, securities measured at fair value through other kEUR kEUR and Webgains S.L. -62 0 0 -62 comprehensive income were acquired for EUR 0k (2023: EUR 1,983k) Book value at 1/1 46 52 kEUR kEUR and matured for EUR 2,000k (2023: EUR 1,000k), realizing a gain of 17k Subsidiaries at net asset value 4,668 5,011 Repayments 0 -750 0 -750 Additions 10 10 (2023: realised gains EUR 6k), which was recognised in ﬁnancial income. Loans to subsidiaries 630 710 Dividends and Disposals 0 0 Unrealised gains of EUR 0k were recognised in other comprehensive repayments -142 0 0 -142 Financial assets including investments 5,110 3,721 income (2023: unrealised gains of EUR 5k). Depreciation -38 -16 Share of net Total 10,408 9,442 Book value at 31/12 18 46 proﬁt/(loss) -117 0 200 83 For further information on investments made please refer to Note [19] of Purchase value 65 256 the Consolidated Financial Statements. Translation Investments in subsidiary companies consist of the following: adjustments -12 0 0 -12 Accumulated depreciation -47 -210 Book value Book value at 31/12 18 46 [7] Group companies 31/12/24 31/12/23 at 1/1/24 5,011 710 3,721 9,442 Disposals -442 0 0 -442 The receivables from Group companies mature within one year. kEUR kEUR Right-of-use assets 2024 2023 Additions 0 0 20 20 Subsidiaries at net asset value 4,668 5,011 Repayments 0 -80 0 -80 Provisions for subsidiaries -960 -544 [8] Prepaid expenses and other current assets kEUR kEUR Dividends and Book value at 1/1 132 237 Total 3,708 4,467 repayments -700 0 -132 -832 Additions 342 25 31/12/24 31/12/23 Share of net Disposals - - proﬁt/(loss) 801 0 1,501 2,302 kEUR kEUR Depreciation -147 -130 Income tax receivables 384 163 Translation Book value at 31/12 327 132 adjustments -2 0 0 -2 Other receivables 102 110 Purchase value 369 360 Book value Total 485 273 at 31/12/24 4,668 630 5,110 10,408 Accumulated depreciation -42 -228 Book value at 31/12 327 132 Dissolution of ad pepper media LLC, USA. [9] Cash and cash equivalents 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- No restrictions on cash exist at balance sheet date. of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease 135 136 07 07 STATUTORY FINANCIAL STATUTORY FINANCIAL [10] Shareholders’ equity Other comprehensive income Balance at Appropriation Proﬁt/(Loss) Other Total Share-based Issuance of shares Transaction costs NCI put liability Balance at 1/1/2024 of proﬁt/(loss) for the period comprehensive comprehensive payment related to issue of 31/12/2024 income income share capital kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR Issued capital 1,160 0 0 0 0 0 0 0 0 1,160 Share premium 67,173 0 0 0 0 0 0 -24 0 67,149 Legal reserves Currency translation basis of preparation differences -1,120 0 0 -96 -96 0 0 0 0 -1,216 Revaluation of listed debt securities 2 0 0 -2 -2 0 0 0 0 0 Subtotal legal reserves -1,118 0 0 -98 -98 0 0 0 0 -1,216 Other reserves Treasury reserve -6,138 0 0 0 0 0 0 0 0 -6,138 For employee stock option plans 3,073 0 0 0 0 94 0 0 0 3,167 Reserve for written put option -1,633 0 0 0 0 0 0 0 0 -1,633 Accumulated deﬁcit -43,910 -944 0 0 0 0 0 0 0 -44,854 Subtotal other reserves -48,607 -944 0 0 0 94 0 0 0 -49,458 Net proﬁt/(loss) for the period -944 944 2,074 0 2,074 0 0 0 0 2,074 Total equity 17,663 0 2,074 -98 1,976 94 0 -24 0 19,709 137 138 07 07 STATUTORY FINANCIAL STATUTORY FINANCIAL Other comprehensive income Balance at Appropriation Proﬁt/(Loss) Other Total Share-based Issuance of shares Transaction costs NCI put liability Balance at 1/1/2023 of proﬁt/(loss) for the period comprehensive comprehensive payment related to issue of 31/12/2023 income income share capital kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR kEUR Issued capital 1,075 0 0 0 0 0 85 0 0 1,160 Share premium 63,782 0 0 0 0 0 3,403 -12 0 67,173 Legal reserves Currency translation basis of preparation differences -1,153 0 0 33 33 0 0 0 0 -1,120 Revaluation of listed debt securities -3 0 0 5 5 0 0 0 0 2 Subtotal legal reserves -1,156 0 0 38 38 0 0 0 0 -1,118 Other reserves 0 Treasury reserve -6,138 0 0 0 0 0 0 0 0 -6,138 For employee stock option plans 2,906 0 0 0 0 167 0 0 0 3,073 Reserve for written put option -2,070 0 0 0 0 0 0 0 437 -1,633 Accumulated deﬁcit -43,018 -892 0 0 0 0 0 0 0 -43,910 Subtotal other reserves -48,319 -892 0 0 0 167 0 0 437 -48,607 Net proﬁt/(loss) for the period -892 892 -944 0 -944 0 0 0 0 -944 Total equity 14,490 0 -944 38 -906 167 3,488 -12 437 17,663 139 140 07 07 STATUTORY FINANCIAL STATUTORY FINANCIAL Issued capital Proposed appropriation of the result for the [13] Current liabilities December 2024, the outstanding liabilities of Webgains GmbH amount ﬁnancial year 2024 to EUR 4,432k (2023: EUR 3,639k). No new shares in ad pepper media International N.V. were issued and 31/12/24 31/12/23 admitted for trading on the Frankfurt Stock Exchange in 2024 (2023: The Board of Directors, with the approval of the Supervisory Board, The future minimum payment obligations resulting from the contracts 1,693,244 shares). proposes to allocate the proﬁt for the ﬁnancial year 2024 amounting to for short-term rent and other agreements in place as at 31 December kEUR kEUR EUR 2,074k to the accumulated deﬁcit. 2024 are as follows: Written put option 1,996 1,996 Accrued expenses 151 119 Share premium 2024 2023 [11] Provisions Other current liabilities 537 253 Proceeds from the issuance of shares increased the additional paid Lease liabilities 130 130 kEUR kEUR in capital by the amount by which they exceeded the par value of The movements during the year are as follows: No later than 1 year 151 138 Total 2,814 2,498 the shares. Furthermore, it also includes expenses incurred for stock Later than 1 year and no later option plans. 2024 2023 than 5 years 4 8 The put option liability relates to the obligation resulting from the Later than 5 years 0 0 kEUR kEUR written put/call option over the 35 percent non-controlling interest Book value at 1/1 544 315 kEUR in ad pepper media Spain S.A with no termination date. The amount Capital Increases - -104 At 1/1/2024 67,174 of the ﬁnancial liability is the exercise price of the option based on a Dividends and repayments 1,084 891 [15] Other operating income contractually agreed EBIT multiple. Due to immaterial abbreviation of Transaction costs for issued share capital -24 EUR -4k in the current years valuation of the put liability, the Group Share of net proﬁt/(loss) At 31/12/2024 67,150 abstained from the reclassiﬁcation of the non-controlling interests Other operating income mainly includes management and shared of subsidiaries -666 -576 effect of the year amounting to EUR 5k into current liabilities. services charged to subsidiaries of EUR 1,049k (2023: EUR 966k) and Translation adjustments -2 18 other income resulting from the proﬁt distribution agreement with the *Additional transaction costs in conjunction with the investment in solute Holding GmbH & Co. KG made in 2023. Book value at 31/12 960 544 Other current liabilities comprise mainly VAT payables and bonus subsidiary ad pepper media GmbH of EUR -581k (2023: EUR -815k) and accruals. Webgains GmbH of EUR 819k (2023: EUR 952k). Treasury reserves Provisions for subsidiaries relate to subsidiaries with a negative net [14] Contingent liabilities [16] Employee information Purchase of treasury shares asset value. By a shareholders’ resolution dated 16 June 2024, the Board of Directors was authorised to repurchase treasury stock of up to 50 percent of the Contingent liabilities mainly result from rented ofﬁces and ofﬁce At the end of the ﬁnancial year, the Holding Company employed 15 [12] Non-current liabilities issued capital within the following 18 months. There is currently no equipment. The rent deposit for the ofﬁce facilities in Nuremberg, people (2023: 17). All employees are employed outside the Netherlands. active share repurchase programme. which is carried at its nominal value of EUR 52k (2023: EUR 33k), is pledged as collateral for bank guarantees. 31/12/24 31/12/23 2024 2023 Number of shares outstanding The number of shares issued and outstanding as at 31 December 2024 ad pepper media International N.V. has provided guarantees for all kEUR kEUR kEUR kEUR totalled 21,951,116 (2023: 21,951,116). Each share has a nominal value outstanding liabilities of its subsidiary, ad pepper media GmbH (register Employee beneﬁts liability 13 68 Wages and salaries 1,424 1,295 of EUR 0.05. number: HRB 16494) as at 31 December 2024, until these are satisﬁed Lease liability 214 5 in full. As a result, the individual local statutory accounts of ad pepper Stock option expenses/income 58 235 media GmbH are exempt from audit under the requirements of Section Total 227 73 Social security costs 233 242 Authorised capital 264 para. 3 of the German Commercial Code (HGB). As at 31 December Other employment expenses 0 4 2024, ad pepper media GmbH’s outstanding liabilities amounted to EUR The authorised share capital of the Holding Company amounts to EUR The employee beneﬁts liability relates to the obligation resulting from 513k (2023: EUR 407k). Total 1,716 1,776 4,000,000, divided into 80,000,000 shares, with a par value of EUR the cash-settled option plan. For further details on cash-settled stock 0.05 each. The Board of Directors is authorised, upon approval by option plans, please refer to Note [38] of the consolidated ﬁnancial ad pepper media International N.V. has provided guarantees for all the Supervisory Board, to issue shares until 16 May 2027, or to grant statements. outstanding liabilities of its subsidiary Webgains GmbH (registered These costs are included in the cost of sales, selling expenses, and rights to subscribe for shares until the issued share capital amounts to number: HRB 37198) that existed as at 31 December 2024, until these general and administrative expenses. Pension costs included in social EUR 2,000,000. are satisﬁed in full. As a result, the individual local statutory accounts security costs amount to EUR 85k (2023: EUR 85k). of Webgains GmbH are exempt from audit under the requirements of Section 264 para. 3 German Commercial Code (HGB). As at 31 141 142 07 07 STATUTORY FINANCIAL STATUTORY FINANCIAL [18] Independent auditor’s fees The average number of personnel employed during the year was: 2024 2023 Fee EY Accountants B.V. 2024 2023 HC HC kEUR kEUR IT 4 4 Audit of ﬁnancial statements 280 348 Marketing 1 1 Other services 0 0 Administration 11 13 Total 280 348 Total 16 18 [19] Events after the balance sheet date [17] Information relating to the Board of Directors and Supervisory Board On 24 February 2025 ad pepper media International N.V. signed a The Board purchase agreement for 18.73 percent of shares in solute. The purchase For the following associated companies Michael Oschmann, the price was approximately EUR 4.5m. As consideration, 2,305,195 new Dr Jens Körner Chairman of the Supervisory Board, has signiﬁcant inﬂuence. shares in ad pepper will be issued without subscription rights of the current shareholders against contribution in kind. (Chief Executive Ofﬁcer) Associated Shares held Stock Shares held Stock in ad pepper options in ad pepper options On 24 April 2025 ad pepper media International N.V. signed another Nuremberg, 30 April 2025 companies purchase agreement for 14.5 percent of shares in solute, with an 2024 2024 2023 2023 effective date as of 1 May 2025. The purchase price was EUR 3.5m. EMA Electronic Media Advertising Both transactions will result in a total shareholding of 58.86 percent Int. B.V. 9,486,402 0 9,486,402 0 and a majority of voting rights. ad pepper is in the process of assessing The Supervisory Board the date of the control transfer. Both transactions are regarded as Euro Serve Media related party transactions. In 2024, solute’s sales amounted to around GmbH 1,641,786 0 1,641,786 0 Michael Oschmann EUR 44.7m with an EBITDA of approximately EUR 3.9m. Josef Keller GmbH Thomas Bauer & Co. Verlags-KG 336,463 0 336,463 0 Dagmar Bottenbruch Dr Stephan Roppel BFB BestMedia- 4Berlin GmbH 133,476 0 133,476 0 Adolf Christ Verlag GmbH & Co. KG 101,787 0 101,787 0 KELMAR Telefon- buchverlag GmbH 11,615 0 11,615 0 KELSTA Telefon- buchverlag GmbH 9,139 0 9,139 0 Total 11,720,668 0 11,720,668 0 143 144 08 « OTHER INFORMATION 08 08 OTHER INFORMATION OTHER INFORMATION 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 08 08 OTHER INFORMATION 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 the 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 2024 ad pepper media International N.V. (the company, and, together with its consolidated subsidiaries, the group) with its head ofﬁce in Nürnberg, INCLUDED IN THE ANNUAL REPORT Germany, provides online marketing 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 Our opinion error in order to design audit procedures responsive to those risks and to obtain audit evidence that is sufﬁcient and appropriate to provide a basis for our opinion. We have audited the accompanying ﬁnancial statements 2024 of ad pepper media International N.V. based in Amsterdam, The Netherlands. The ﬁnancial statements comprise the consolidated ﬁnancial statements and the statutory ﬁnancial statements. Materiality In our opinion: • The consolidated ﬁnancial statements give a true and fair view of the ﬁnancial position of ad pepper media International N.V. as at 31 December 2024 and of its result and its cash ﬂows for 2024 in accordance with International Financial Reporting Standards as adopted in the European Materiality €210,000 (2023: €210,000) Union (EU-IFRSs) and with Part 9 of Book 2 of the Dutch Civil Code Benchmark applied Approximately 1% of revenue for 2024 • The statutory ﬁnancial statements give a true and fair view of the ﬁnancial position of ad pepper media International N.V. as at 31 December 2024 Explanation We have applied this benchmark based on our professional judgement and taking into account the expectations and of its result for 2024 in accordance with Part 9 of Book 2 of the Dutch Civil Code of users of the ﬁnancial statements. Revenue was concluded to be the most appropriate measure as it is con- sidered to be reﬂective of the focus on growth and development of the company’s activities. We determined The consolidated ﬁnancial statements comprise: materiality consistent with last year. • The consolidated statement of ﬁnancial position as at 31 December 2024 • The following statements for 2024: the consolidated income statement, the consolidated statements of comprehensive income, changes in equity and cash ﬂows We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the ﬁnancial • The notes comprising material accounting policy information and other explanatory information statements for qualitative reasons. The statutory ﬁnancial statements comprise: 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 balance sheet of the holding company as at 31 December 2024 well as smaller misstatements that in our view must be reported on qualitative grounds. • The proﬁt or loss account of the holding company for 2024 • The notes comprising a summary of the accounting policies and other explanatory information Scope of the group audit Basis for our opinion ad pepper media International N.V. is at the head of a group of entities spanning the consolidated segments ad pepper (lead generation, audience targeting), Webgains (afﬁliate network) and ad agents (digital marketing agency). The group accounts for the group’s interest in solute Holding GmbH We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are & Co. KG using the equity method. The ﬁnancial information of this group is included in the ﬁnancial statements. further described in the Our responsibilities for the audit of the ﬁnancial statements section of our report. We are responsible for planning and performing the group audit to obtain sufﬁcient appropriate audit evidence regarding the ﬁnancial information of We are independent of ad pepper media International N.V. in accordance with the EU Regulation on speciﬁc requirements regarding statutory audit the entities or business units within the group as a basis for forming an opinion on the ﬁnancial statements. We are also responsible for the direction, of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit ﬁrms supervision act), the Verordening inzake de onafhankelijkheid supervision, review and evaluation of the audit work performed for purposes of the group audit. We bear the full responsibility for the auditor’s report. van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants Based on our understanding of the group and its environment, the applicable ﬁnancial framework and the group’s system of internal control, we (VGBA, Dutch Code of Ethics for professional accountants). identiﬁed and assessed risks of material misstatement of the ﬁnancial statements and the signiﬁcant accounts and disclosures. Based on this risk assessment, we determined the nature, timing and extent of audit work performed, including the entities or business units within the group We believe the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion. (components) at which to perform audit work. For this determination we considered the nature of the relevant events and conditions underlying the 149 150 08 08 OTHER INFORMATION OTHER INFORMATION identiﬁed risks of material misstatements for the ﬁnancial statements, the association of these risks to components and the materiality or ﬁnancial The following fraud risk identiﬁed required signiﬁcant attention during our audit. size of the components relative to the group. Presumed risks of fraud in revenue recognition We have performed the audit work ourselves for all components in the consolidated segments and the ﬁnancial information from the group’s interest in solute Holding GmbH & Co. KG, including the (centralized) audit procedures in respect of revenue recognition. Fraud risk We presumed that there are risks of fraud in revenue recognition. We evaluated that revenue for the segments ad pepper, ad agents and Webgains in particular give rise to such risks. This resulted in a coverage of 100% of the proﬁt/(loss) before taxes, 100% of revenue and 100% of total assets. Our audit We describe the audit procedures responsive to the presumed risk of fraud in revenue recognition in our key audit matter approach “Risks in revenue recognition”. By performing the audit work mentioned above at the entities or business units within the group, together with additional work at group level, we have been able to obtain sufﬁcient and appropriate audit evidence about the group’s ﬁnancial information to provide an opinion on the ﬁnancial statements. We considered available information and made enquiries of relevant executives, directors, legal and the supervisory board. Teaming and use of specialists The fraud risks we identiﬁed, enquiries and other available information did not lead to speciﬁc indications for fraud or suspected fraud potentially materially impacting the view of the ﬁnancial statements. We ensured that the audit team included the appropriate skills and competences which are needed for the audit of a listed client in the digital performance marketing industry. We included specialists in the areas of IT audit, forensics, and income tax, and have made use of our own Our audit response related to risks of non-compliance with laws and regulations experts in the area of share-based payments. We performed appropriate audit procedures regarding compliance with the provisions of those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the ﬁnancial statements. Furthermore, we assessed factors related to the risks of non- compliance with laws and regulations that could reasonably be expected to have a material effect on the ﬁnancial statements from our general Our focus on fraud and non-compliance with laws and regulations industry experience, through discussions with the board of directors, reading minutes, inspection of other relevant documents regarding compliance with laws and regulations and performing substantive tests of details of classes of transactions, account balances or disclosures. 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 We also inspected lawyers’ letters and correspondence with regulatory authorities and remained alert to any indication of (suspected) non- and regulations, it is our responsibility to obtain reasonable assurance that the ﬁnancial statements, taken as a whole, are free from material compliance throughout the audit. Finally, we obtained written representations that all known instances of non-compliance with laws and regulations misstatement, whether caused by fraud or error. The risk of not detecting a material misstatement resulting from fraud is higher than for one have been disclosed to us. resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Our audit response related to going concern Our audit response related to fraud risks We identiﬁed and assessed the risks of material misstatements of the ﬁnancial statements due to fraud. During our audit we obtained an understanding of the company and its environment and the components of the system of internal control, including the risk assessment process As disclosed in Section 01 Letter from the board of directors and in the management statements in Section 04.1 Governance to the Report of 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 the board of directors, the ﬁnancial statements have been prepared on a going concern basis. When preparing the ﬁnancial statements, the exercises oversight, as well as the outcomes. We refer to “Operational Risk” in Section 04.5 Risk report of the Report of the board of directors for the board of directors made a speciﬁc assessment of the company’s ability to continue as a going concern and to continue its operations for the board of directors’ (fraud) risk assessment. foreseeable future. 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 We discussed and evaluated the speciﬁc assessment with the board of directors exercising professional judgment and maintaining professional conduct and whistle blower guideline. We evaluated the design and the implementation of internal controls designed to mitigate fraud risks. skepticism. We considered whether the board of directors’ going concern assessment, based on our knowledge and understanding obtained through our audit of the ﬁnancial statements or otherwise, contains all relevant events or conditions that may cast signiﬁcant doubt on the As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to ﬁnancial reporting fraud, misappropriation of assets company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our and bribery and corruption in close co-operation with our forensic specialists. We evaluated whether these factors indicate that a risk of material auditor’s report to the related disclosures in the ﬁnancial statements or, if such disclosures are inadequate, to modify our opinion. misstatement due to fraud is present. Based on our procedures performed, we did not identify material uncertainties about going concern. Our conclusions are based on the audit We incorporated elements of unpredictability in our audit. We also considered the outcome of our other audit procedures and evaluated whether any 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 ﬁndings were indicative of fraud or non-compliance. a going concern. We addressed the risks related to management override of controls, as this risk is present in all organizations. For these risks we have, among other Our key audit matters things, performed procedures to evaluate key accounting estimates for management bias that may represent a risk of material misstatement due to fraud, in particular relating to important judgment areas and signiﬁcant accounting estimates as disclosed in Section Signiﬁcant accounting judgements, estimates and assumptions of the notes to the consolidated ﬁnancial statements. We have also used data analysis to identify and address high-risk Key audit matters are those matters that, in our professional judgment, were of most signiﬁcance in our audit of the ﬁnancial statements. We have journal entries and evaluated the business rationale (or the lack thereof) of signiﬁcant extraordinary transactions, including those with related parties. communicated the key audit matter to the supervisory board. The key audit matter is not a comprehensive reﬂection of all matters discussed. 151 152 08 08 OTHER INFORMATION OTHER INFORMATION REPORT ON OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT The key audit matter “Acquisition of the share in solute Holding GmbH & Co. KG” which was included in our last year’s auditor’s report, is not considered a key audit matter for this year as it related to a 2023 transaction. Risks in revenue recognition The annual report contains other information in addition to the ﬁnancial statements and our auditor’s report thereon. Risk As disclosed in more detail in Note 5 Revenue from contracts with customers and Section Rendering of services of the Based on the following procedures performed, we conclude that the other information: Summary of material accounting policies in the notes to the consolidated ﬁnancial statements, revenue from contracts with • Is consistent with the ﬁnancial statements and does not contain material misstatements customers consist of Webgains, ad pepper and ad agents services. As the group concluded that it does not control these • 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 services before they are transferred to customers, the group determined that it is an agent in all its customer contracts and 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 records revenue at the net amount that it retains for its services. We have read the other information. Based on our knowledge and understanding obtained through our audit of the ﬁnancial statements or otherwise, Revenue recognition is a routine process in which high volume of transactions are being processed. Judgement is required we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements to determine the amount to be recognized as return assets and refund liabilities for transactions in the recall period of 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 Webgains, as well as to determine the stage of completion for an advertisement campaign in the ad pepper segment. As substantially less than the scope of those performed in our audit of the ﬁnancial statements. revenue is considered a key performance indicator as well as a determinant of bonusses and share option value for the board of directors, the supervisory board well as to others, we assess that revenue is subject to a higher likelihood of ma- 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 nipulation, including premature recognition of Search Engine Advertising service fees, incorrect allocation of media costs, or 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 discrepancies between invoiced amounts and actual clicks/conversions. As a result, we consider this a key audit matter. 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 Our audit Our audit procedures included an evaluation of the appropriateness of company’s revenue recognition policies in accordance Civil Code. approach with IFRS 15 Revenue from Contracts with Customers and understanding of the internal (IT) control environment including the evaluation of design and implementation of control effectiveness in the area of automated revenue recognition of Web- gains in cooperation with our IT audit team members. We discussed with and challenged the board of directors in their evaluation of revenue arrangements and the related REPORT ON OTHER LEGAL AND analysis of recognizing revenue as principal or agent. We validated the board of directors’ analysis based on inspection and REGULATORY REQUIREMENTS AND ESEF interpretation of agreements with both customers and suppliers. 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 Engagement we tested whether revenue was recognized in the correct period (cut-off of revenue between 2024 and 2025) through a test of details to verify timing of the revenues recorded, appropriate allocation of media costs and appropriate invoicing based 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 on clicks. Furthermore, we veriﬁed the appropriateness of credit memos issued after the balance sheet date, we used data have operated as statutory auditor ever since that date. analysis to identify and address high-risk journal entries, and we veriﬁed compliance with the presentation and disclosure requirements of IFRS 15. Key observations Based on the audit procedures performed, we did not identify any material misstatement in the revenue recognized in 2024. No prohibited non-audit services We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on speciﬁc requirements regarding statutory audit of public-interest entities. European Single Electronic Reporting Format (ESEF) 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) 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 the reporting package by ad pepper media International N.V., complies in all material respects with the RTS on ESEF. 153 154 08 08 OTHER INFORMATION OTHER INFORMATION The board of directors is responsible for preparing the annual report, including the ﬁnancial statements, in accordance with the RTS on ESEF, whereby We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards the board of directors combines the various components into a single reporting package. on Auditing, ethical requirements and independence requirements. The Information in support of our opinion section above includes an informative summary of our responsibilities and the work performed as the basis for our opinion. Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package complies with the RTS on ESEF. Our audit further included among others: • Performing audit procedures responsive to the risks identiﬁed, and obtaining audit evidence that is sufﬁcient and appropriate to provide a We performed our examination in accordance with Dutch law, including Dutch Standard 3950N, ”Assurance-opdrachten inzake het voldoen aan basis for our opinion de criteria voor het opstellen van een digitaal verantwoordingsdocument” (assurance engagements relating to compliance with criteria for digital • Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, reporting). Our examination included amongst others: but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control • Obtaining an understanding of the company’s ﬁnancial reporting process, including the preparation of the reporting package • Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the • Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and designing and board of directors performing further assurance procedures responsive to those risks to provide a basis for our opinion, including: • Evaluating the overall presentation, structure and content of the ﬁnancial statements, including the disclosures • Obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance • Evaluating whether the ﬁnancial statements represent the underlying transactions and events in a manner that achieves fair presentation document and the XBRL extension taxonomy ﬁles, has been prepared in accordance with the technical speciﬁcations as included in the RTS on ESEF • Examining the information related to the consolidated ﬁnancial statements in the reporting package to determine whether all required mark- Communication ups have been applied and whether these are in accordance with the RTS on ESEF 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- DESCRIPTION OF RESPONSIBILITIES REGARDING interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report. THE FINANCIAL STATEMENTS 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. Responsibilities of the board of directors and the supervisory board for the ﬁnancial statements From the matters communicated with the supervisory board, we determine the key audit matters: those matters that were of most signiﬁcance in the The board of directors is responsible for the preparation and fair presentation of the ﬁnancial statements in accordance with EU-IFRSs and Part 9 audit of the ﬁnancial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the 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 matter or when, in extremely rare circumstances, not communicating the matter is in the public interest. necessary to enable the preparation of the ﬁnancial statements that are free from material misstatement, whether due to fraud or error. 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 Amsterdam, 30 April 2025 going concern. Based on the ﬁnancial reporting framework mentioned, the board of directors should prepare the ﬁnancial statements using the EY Accountants B.V. going concern basis of accounting unless the board of directors either intends to liquidate the company or to cease operations, or has no realistic 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 signed by A.N.A. Drost continue as a going concern in the ﬁnancial statements. The supervisory board is responsible for overseeing the company’s ﬁnancial reporting process. Our responsibilities for the audit of the ﬁnancial statements 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. Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material misstatements, whether due to fraud or error during our audit. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these ﬁnancial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identiﬁed misstatements on our opinion. 155 156 09 « AT A GLANCE 09 09 AT A GLANCE 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 146 7 Rue Meyerbeer Avenida Alberto Alcocer 46A, 4ºA Concertgebouwplein 15 H, 90461 Nuremberg 75009 Paris 28016 Madrid 1071LL, Amsterdam GERMANY FRANCE SPAIN NETHERLANDS Phone +49 (0) 911 929057-0 Webgains, S.L. Germany UK Avenida Alberto Alcocer 46A, 4ºB 28016 Madrid ad pepper media GmbH SPAIN Webgains Ltd Frankenstrasse 146 70 Colombo Street FrankenCampus London Italy 90461 Nuremberg SE1 8DP GERMANY UNITED KINGDOM Webgains Italy S.r.l. SB ad agents GmbH Via Andrea Appiani, 3 Webgains Ltd Am Joachimsberg 10-12 20121 Milan The Quorum 71083 Herrenberg ITALY Bond Street GERMANY South Bristol, BS1 3AE UNITED KINGDOM Switzerland Webgains GmbH Frankenstrasse 146 90461 Nuremberg ad agents AG Poland GERMANY Kreuzstrasse 26 8021 Zurich Webgains Sp. z o.o. SWITZERLAND 6 Orzycka Street, Apt. 1B 02-695 Warsaw POLAND 159 160 09 09 AT A GLANCE 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 146 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 General Meeting Fax: +49 (0) 911 929057-157 upon a number of risks and uncertainties and may therefore deviate (Amsterdam, The Netherlands) 24 June 2025 E-mail: [email protected] signiﬁcantly from the forward-looking statements. Several of these factors are beyond ad pepper media’s control and cannot be precisely Quarterly Report I/2025 23 May 2025 www.adpeppergroup.com estimated in advance, such as the future economic environment and Quarterly Report II/2025 14 August 2025 the actions of competitors and other market players. There are no plans Quarterly Report III/2025 19 November 2024 to update the forward-looking statements nor does ad pepper media Imprint International N.V. undertake any separate obligation to do so. Editorial responsibility: Headquarters Nuremberg, Germany ad pepper media International N.V. Frankenstrasse 146 90461 Nuremberg GERMANY Phone: +49 (0) 911 929057-0 Fax: +49 (0) 911 929057-157 E-mail: [email protected] www.adpeppergroup.com Prime Standard, Frankfurt Stock Exchange Our 2024 Annual Report as well as the Interim Financial Reports for 2024 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 161 162 10 « GLOSSARY 10 10 GLOSSARY GLOSSARY 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 and 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. 165 166 ad pepper media International N.V. Frankenstrasse 146 90461 Nuremberg GERMANY www.adpeppergroup.com

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