Good afternoon, ladies and gentlemen. Welcome to CLIQ Digital’s Third Quarter 2024 Results Presentation. My name is Sebastian McCoskrie and I’m responsible for CLIQ’s Investor Relations. Today, I will be your host for this earnings call. Our CEO, Luc Voncken, will present CLIQ’s most recent strategic and operational highlights. Thereafter, Ben Bos, Management Board member, will walk you through the quarterly financials. After the presentations, I will read out the questions you have kindly sent in via e-mail. Please take note of the disclaimer shown here and that this call is being recorded. The visual audio and/or transcription of this call may be published, including any of the data arising there from. If you have any objection, please disconnect at this time. So without further ado, let me now hand over to Luc, who will kick off today’s earnings call. Luc, the floor is yours.

Thank you, Sebastian, and good afternoon, ladies and gentlemen. The Dutch are famous for being direct. So let me be direct, our third quarter sales performance was disappointing. However, we were able to stabilize the EBITDA. Hence, we are progressing quite well on our restructuring program on a profitability focus and on our cash generation. Of course, it would have been really nice to have been able to present fast progress. It’s not an easy and quick fix to transform CLIQ to be better equipped and better prepared for future growth. Q3 did have positive highlights. As you can see here, we have already successfully grown our earnings, our cash flow and our liquidity in the third quarter this year. Conversely, sales and average lifetime value were down as expected because we had to reduce our target CPA further to protect our margins. Overall, we remain cautiously optimistic that we can still achieve our full year 2024 guidance. Even if meeting the sales target seems ambitious, I always say it’s important to reach high and set yourself challenging goals. Ladies and gentlemen, let me focus on the here and now and what the issues are hindering our sales growth and what countermeasures we are taking. CLIQ has successfully developed and grown very quickly over recent years. And this rapid growth was on the back of a highly successful business model. However, that model was reliant on three key factors that have limited us operationally. Firstly, and I’ve touched on this subject a few times in the past. We have been reliant on one sales channel. Our Magnificent Seven growth strategy will lead us into a new omnichannel sales ecosystem where we can increase and diversify our sales channels. And already today, we are seeing some positive results from tapping into new sales channels with search engine advertising and social media marketing. Secondly, we focused ourselves on selling one main product, streaming services. Without a doubt, a great product and one we shall continue selling, but the marketplace has become quite crowded and highly competitive, even for an outstanding bundled content offering. CLIQ is a true marketing expert rather than a streaming provider in the classical sense. We need to leverage the full power of our marketing know-how and expertise and offer more varied digital products. Furthermore, we see a great opportunity for data monetization from customer data obtained during the subscription process. Ladies and gentlemen, with the help of a dedicated and action-driven plan, we will bring CLIQ’s growth back on track. So what does our brand look like? What’s the CLIQ way forward? Customer acquisition is being considerably widened with an omnichannel approach and will enable us like a fisherman, to be able to throw out larger net to catch more fish. New digital products will also be great help to our diversification strategy and generate additional revenue streams. AVOD is named for advertising-based video-on-demand is a monetization model that CLIQ fully embracing and will roll out, starting with the U.S. in the very near future. Customers will be able to stream our bundled content services for free in return for watching ads, but also other customer-centric payment methods will be adopted. Altogether, strengthening and developing these strategic growth areas will provide the best possible setup for CLIQ and its future growth. Allow me now to present to you some of our third quarter operational highlights. Our transformation program Fit For The Future is making us more efficient and more productive. Our cost-cutting measures are already paying off and we’re making good progress. To improve our gross profit margin, we successfully reduced the target CPA and subsequently our customer acquisition costs as well as the other cost of sales. By closely reviewing the services provided by external support, we have also further decreased our personnel as well as our operating expenses to a much healthier level, also thanks to optimizing our tech landscape. Ben will explain more about our cost structure later on. All in all, our Fit For The Future program is delivering significant recurrent annual cost savings and streamlining our organization, making us leaner and meaner marketing machine. Today, we are more efficient and better prepared to fight fires and protect our company and our margins. By mantra, as always, profitability is first and foremost at CLIQ, but not only on the cost side, is Fit For The Future achieving very satisfactory results, also operationally. We have trialed as previously mentioned, new sales channels as part of our Magnificent Seven approach and realized already some really good results. Our search engine advertising is contributing very decent productivity gains and our learning’s from social media marketing are incredibly valuable for building up this very exciting and growing sales channel. We have tested and launched new products, and we have added some very attractive new content to our library. New content is for both our verticals and for hookups, paramount for attracting new customers to our service. The latest content licensing are with our partners, Shout and Ananda Media. For our current and future North American services, we have now added more movies, which include classics and box office hits like Point Break and Sin City-2. And for our multinational library, we have added some great documentaries and riveting series across various genres. Great new content to make our services more attractive for both new and existing customers. Ladies and gentlemen, despite the sales decline, we are confident that we can get back on our growth part. However, we need time to realize this. Going forward, innovations will assume a more important role at CLIQ, and will help broaden and diversify our customer outreach and offerings. So we still have a lot to do, but we will get there. On that positive note, let me now hand over to Ben to present the financials to you.

Many thanks, Luc and a warm welcome from my side. Our performance in Q3 reflected just what Luc said, we still have lots to do. Sales in the third quarter were again down, but our EBITDA before special items was up 2% quarter-on-quarter and the EBITDA margin was further expanded to a decent 11%. Since the launch of our austerity measures in the first quarter of this year, we have successfully increased our EBITDA before special items by 12%. Both external market conditions and internal reactionary measures impacted our revenue. The sales decline in Q3 was due to the higher churn rate as well as the reduction in customer acquisition cost, the CPA. And since the beginning of the year, the churn rate increased and as a result, the LTV dropped, the lifetime value. This in line with our group’s focus on profitability, and we decided to lower the CPA. And by doing so, we saw a decline in sales as we bid less for new subscribers, but it improves the margin. Going forward, one of our main goals is getting our sales up again with the strategic growth measures, Luc highlighted just now. So let us go to the sales breakout. In third quarter 2024, our bundled content sales totaled €52 million, making up 97% of our total €54 million of revenue generated. Of that, the €2 million single-content services sales constitutes just 3% and are just basically immaterial from a sales contribution perspective. Geographically, sales in North America and Europe in the third quarter this year declined quarter-on-quarter by 18% and 19%, respectively. As previously stated, the card scheme companies change in customer care tools has affected our churn rate everywhere, including North America, which resulted in lower average lifetime values, the so-called LTVs across the board. However, there is a regional variance in the payment flow between countries in Europe and North America, which affects both the LTV and conversions in general. Hence, our sales in Europe were impacted slightly more than our sales in North America. By the end of the third quarter, the total number of paying customers for bundled and single content streaming services decreased sharply by 30% quarter-on-quarter to €0.7 million as a result of the group’s stronger focus on profitability and the higher churn rate. However, the expected average lifetime value of our new customers was only down by 8%, and we, as we recorded €72 for the third quarter against the €78 in Q2 and €81 in Q1. This quarter-on-quarter decline was mainly due to the higher churn rate we have to suffer. In Europe, we previously saw customers with an above average lifetime value as European customers typically are willing to spend more on these types of services. European sales in the third quarter this year only made up 21% of total group sales. In Latin America, with sales fall quarter-on-quarter by 29% as our austerity measures took effect across all operating regions. Our dedicated goal is to revive sales and get back onto a sustainable growth path. So let us now go to the income statement. On a positive note, the EBITDA before special items in the third quarter increased sequentially by 2% to €6 million as a result of our focused and stringent reduction in the cost of sales. Customer acquisition costs in particular and as well in our operating expenses, all executed fully in line with the group’s stronger focus on profitability. Accordingly, our cost of sales and our OpEx before special items were successfully reduced by 23% and 21% thanks to the Fit For The Future cost-saving measures, gaining further traction and despite greater refund related costs from the higher customer churn. So ladies and gentlemen, please remember that our focus is to first and foremost on profitability, and we will always favor margin over sales growth. Consequently, our EBITDA margin before special items in the third quarter was up by over 230 basis points quarter-on-quarter and came in at 11%. To be clear, our income statement has been normalized by adjusting for special items to provide an accurate and transparent representation of our core performance. These normalizations account for cost linked to CLIQ Group’s wide transformation program Fit For The Future and also include temporary costs for consultants and contractors helping execute Fit For The Future as well as for personnel and other operational expenses. These temporary costs will be reduced after the completion of the transformation program, which is expected during the first quarter of 2025. The special items in Q3 amounted to €3 million on EBITDA level with the line items, other cost of sales, personnel and operating expenses, which were normalized accordingly. Bottom line, profit for the third quarter before special items came in 3% sequentially higher at €3 million and EPS was flat at €0.45. Now some words about the CAC, the customer acquisition cost. The decision to lower the target CPA, the cost per acquisition, was taken to continue to put a stronger focus on profitability. The CPA was aligned to the lower lifetime value of our customers, which consequently also led to less new and higher-value customer acquisitions. In the third quarter this year, we spent 60% less on acquiring customers than in Q2 and all the €10 million total customer acquisition cost amount was directly allocable to new subscribers to our subscription service and this accounted for and capitalized in the balance sheet as contract cost. The CAC for the period improved further quarter-on-quarter from 41% to 38% of total sales as a result of lowering the CPA and clearly focus again on the profitability. Some more words on Fit For Future, the cost savings. Here, we show you the effect of our cost savings from our Fit For The Future and transformation program since we start. Personnel expenses before special items were reduced by more than 30% between the first and the third quarter this year. And the other operating expenses were down by 23%, this is, for me, clear proof that the actions taken have had a positive effect on our cost structures. So ladies and gentlemen, another positive news item is on cash. And as I always love to say, cash is king, and very much so in the third quarter. Cash flow from operating activities during Q3 was significantly up by €3 million despite the corporate tax payment of over €8 million. The inflow totaled nearly €4 million compared to €0.8 million in Q2. This notable improvement was mostly as a result of the decrease in total customer acquisition costs. The cash outflow from investing activities in the third quarter was further reduced to €0.8 million due to less payments for investments in platform and technical developments. As a result, our operating free cash flow in the third quarter improved considerably quarter-on-quarter to €3.1 million against a minus €0.2 million in Q2. So our cash outflow from financing activities in the third quarter was €1.5 million and included €1.2 million for share buyback program. At the end of the quarter, our net cash position was €8.7 million, so almost €9 million. Now some words about the share buyback program. So we continue and will continue to proceed with repurchasing shares. On the maximum program volume of 650,000 shares, we have already repurchased approximately 84% in total. So that’s over 540,000 treasury shares at an average share price of around €9 and more than 8% of the total share capital issued. For the first of November, so last Friday, the number of our shares outstanding issued – so issued shares net from our buyback program was 5.96 million, almost 6 million. So let us show us a quick monthly breakdown of our share buyback program. As you probably know, our buyback program is executed in Xetra trading independently by an investment bank commission buyers. The bank makes its decisions on the timing and amount of the individual order placements. And thereby adhere strictly to training regulations for price fluctuations, both up and down and for the average trading volumes, which prevents repurchases at certain times. That’s also why you see here some months with less transactions. So including last week’s repurchases, we still have about 105,000 shares left to buy back. So under the assumption that we can maintain the recent weekly volume, the buyback program should be completed by early February next year. Now the balance sheet. Moving on. So overall, total assets shrunk to €131 million at the end of this quarter, and our equity ratio rose to 77%. The value of our intangible assets, predominantly our own technical developments and content licenses decreased because of the amortization thereof. And with total customer acquisition costs down, less customer acquisition cost was capitalized and this less contract cost were accounted for at the end of the second quarter. And as a result, the balance sheet valuation of the contract was reduced to €33 million. This, for me, is a clear example that the accounting method of capitalizing and amortizing the customer acquisition cost is showing the accurate and fair view of the group’s earnings. The amortized contract cost in the income statement for the period are higher that the capitalized customer acquisition costs resulting in a reduced balance sheet valuation. The increase in trade receivable was due to high rolling reserve balances and the decrease in payables was because of the lower customer acquisition costs for the period. As previously mentioned, our net cash position at the end of September was almost €9 million. This balance was after investing €4.8 million for share buybacks in the first 9 months which in turn visibly reduced our equity value to €100 million. The lifetime value of our customer base, our LTVCB, which represent future revenue expected to be generated by existing customers over their estimated individual remaining lifetime at the reporting date decreased in the third quarter due to the lower number of paying customers resulted from the higher churn range as well due to the decrease in new customer acquisitions, quite a long sentence. At the end of September, the LTVCB reported as an off-balance sheet item, €97 million expected future revenue. You see that on the right side of this slide. So to round off today’s presentation, a brief word on our outlook. As Luc previously mentioned, we are cautiously optimistic that we can achieve our guidance. Our Fit for Future program, it’s the side we chose and our cost efficiencies, our earnings – and the earnings have improved. Today, our organization is better streamlined and fully focused. All our operational action plans and countermeasures are showing good, albeit, gradual process. Our growth ambitions are unrelentless and strong. We can assure you of that. We need to grow sales again and that will be our chief tasks in the coming quarters. So ladies and gentlemen, that concludes our presentation today. We shall now commence our Q&A session. And Sebastian, could you please speak out of the first question.

Sure, thanks, Ben. [Operator Instructions] Our first questions today are from Olaf [indiscernible] and directed to Luc. You’ve mentioned that the Fit For Future program will be finished by Q1 2025. Furthermore, we’ve done a lot of optimizing in our Magnificent Seven marketing and sales channels. When will the marketing budget rise to capture the optimization in full and see results in the bottom line? How much marketing budget is planned over the next quarters once a marketing mix is researched to get back on profitable growth trajectory.

First of all, thank you Olaf [indiscernible] for the question. Well, 2024 is, of course, a year of transformation for CLIQ. That’s clear. And we are making the company more efficient and more effective. And that means at present, we are first and foremost focusing on protecting and growing our margins. And one important element thereof was reducing our target CPA and thus our marketing spend. And going forward, we shall indeed increase our marketing budgets, I just can’t say at the moment by exactly how much. Our 2025 guidance, which includes our marketing budget is typically disclosed at our full year 2024 presentation, which, by the way, is on the 20th of February.

Our next questions are from Ralph [indiscernible] for Ben regarding Fit For Future. Special items for your transformation and optimization program amounted to €9.1 million in the 9 months period. Are further extraordinary expenses to be expected in Q4?

Yes, unfortunately, but to a lesser extent than in the past quarter thereof. Our transformation program is expected to be finalized in the first quarter of 2025.

The next ones are for Luc. Ralph further asks. You mentioned that from three – from the third quarter 2024 on, the group has tested and successfully launched new digital products across various regions. Could you explain in more detail which products and markets these are?

Ralph, we always have to be cautious how much we say about new products as there are numerous copy cats in my world as they are looking to borrow out these. Our latest products offer some great entertainment and convenience. Sorry for being vague, but we need to do always be careful what we say about products.

Luc, furthermore, CLIQ is testing new monetization models, maybe you can explain this in more detail?

Yes, of course. As mentioned before, Ralph, we will be launching a new AVOD, advertising-based video-on-demand, monetization model in the U.S. in the very near future. Customers will be able to stream bundled content services for free in return from watching ads. It’s a really exciting model and a great entry opportunity for subscribers to first try out our services at leisure and then preferably opt in, of course, for the paid ad-free version later on. And in addition, we are looking closely into leveraging the customer data we collect during the subscription process, also for retargeting purposes.

And last but not least, during your Q2 earnings call, management explained that CLIQ is preparing to launch a new flagship portal targeting the U.S. market. Can you give us an update for this initiative?

Yes, we are in the very final stages for the go-live so. So the AVOD model will be launched pretty soon, and we will give you more insight into our learnings as we go.

Thank you. Our next questions were sent in by Andreas Masek at the SDK for Ben. Firstly, when is the Fit For Future program expected to be completed?

Thanks, Andreas, for asking these questions, but we expect will be Fit For The Future in the first quarter next year. That’s when the program is scheduled to be completed.

The second question, how high are the special items in Q3 on EPS in Euros?

The impact of the special items, EPS level amounting to €0.38. The EPS for special items came in at €0.45.

When does the management Board expect LTV and the number of subscribers to stabilize and at what level?

Well, Andreas, for us, as a marketing company, the number of subscribers is much less relevant than for streaming provider in the classical sense. So our business model focuses primarily on acquiring new customers and not necessarily on retaining them. As such, the reported number of customers is just a snapshot at a cut of that. So for us, it’s more importantly is the LTV and what we call the profitability index, which we use internally to navigate the business. The Africa LTV differs widely depending on which region and which country you look at. So Latin American LTV can be a mere fraction of an LTV in Europe, for example. So, if we either acquire 100 new customers with an LTV of 50 or 50 new customers with an LTV of 100, it does not matter. For us, it’s crucial what we can maximize the profit.

What ratio of CPA to LTV is planned by the management Board after completion of the transformation phase?

Well, basically, you are asking about the PI. Our goal is to maximize the margin between the CPA and expected lifetime value in the first 6 months after subscription. In the past, we reported this KPI as the profitability index. But as this KPI was not fully understood by our investors, we did not report on it anymore. But the goal was and is always to achieve at least a margin of 30% within the first 6 months on our CPA or, if you like, on every euro spent on marketing.

Our next questions for Luc are from Emilio Rodrigues Vita. Which digital products are you going to include in your offer to increase sales next year? And what percentage of sales do you estimate each of these new products will represent in relation to the total?

Well, our bread and butter business is selling subscriptions of bundled content streaming services. And yes, the new digital products I mentioned earlier will bring additional revenue. To what extent, we don’t elaborate on at this time.

What specific content has worked best this year in terms of attracting new customers and in terms of engagement?

Well, in general, movies series are always good hook-ups for acquiring new customers.

What actions are you going to take to increase the engagement of your users and to prevent churn from being so rapid after the change in the regulation on the operation of credit card cancellations?

Well, the higher churn rate is here to stay in the structural effects. And however, churn is not new for us already since started this company as we have always been faced with a high churn since the inception of our company. And as a fact, churn comes with our business model, as you know. We just need to acquire more new and profitable customers than we did previously. Remember, our analogy with a fast food restaurant, turning more tables per night than the fine dining establishments. That’s what we need to do, turn our tables more times during the meal service. And that’s why we have to have the Magnificent Seven and why we are introducing new attractive content and digital products.

Fiona from Edison, a following question for Luc, do you feel that the impact of the increasing churn is now starting to moderate?

Well, Fiona, we always focus on acquiring new customers more than on retaining them.

Next, she asks Ben, the impact has been much more marked in Europe. Does this reflect different policies by the credit card operators in this region? Or is it more to do with cliq.de?

I don’t know, Fiona. Unfortunately, cliq.de never contributes materially to our revenue. However, there is a general variance in the payment flow between the countries in Europe and North America, which affects both the LTV and conversions. Our sales in European market were therefore impacted more than our sales in North America.

And Fiona’s last question is one for Luc, your indicated levels of growth for full year 2025 and beyond imply reversing the reduction in customer base. When do you think it likely that you will be turning up the dial again on customer acquisition?

Well, first and foremost, we needed to get our company into a better shape, streamlined, efficient and diversified as we are progressing, but not finished yet. Once we have a new structure properly up and running, we will step up our customer acquisition again.

Our last question today are from Damian Schmides for Luc. Can you please tell us the date when it was decided to close the office in the UK. And what is the date when the office was finally closed?

Well, we have made the decision already close to the London office in January 2024, and the rental agreement expired by the end of March 2024.

Next, he asks, CLIQ wanted to grow in Japan and started into activities there. The financial statement for Q3 shows that the revenues in other regions where Japan is probably included are declining. What is the reason for the declining? And what is the plan for Japan in the next months?

Well, Damian, after a successful start in Japan, the profitability of the new customers was declining. And as a result, we have decided to reduce the marketing spend. And at the moment, the focus is not anymore in Japan.

CLIQ wanted to expand its activities to the Middle East. What is the status of these plans?

Well, the Middle East, of course, is an interesting region, but the opportunities in other regions are currently bigger. And the main focus regions are North America, Europe and Latin America. And if we see opportunities, we are ready to take them. And this counts not only for the Middle East region, of course, but for all regions and countries.

And last but not least, one for Ben. The number of employees declined from 173 to 144 people. How does it come that the personnel costs increased by over 10%. Can you please explain? Thank you, and I wish you more success in the last months of 2024.

Well, thank you. So the incidental cost in relation to our Fit For The Future program to reduce our workforce have been recognized in the period and explain the majority of increase in personnel expenses compared to the number of employees. However, if you look at the personnel expenses before special items, you clearly see a drop from Q1 to Q3 of 31%.

So as this was the last questions, ladies and gentlemen, thank you so much. But should you have any further questions, please do get in touch with Sebastian. Thank you for your kind attention and joining our third quarter 2024 earnings call today. Have a great day, and stay safe.