FINANCIAL PRESENTATION MARCH 2017 - Digitalbros · net financials over the last years (50,00)...

FINANCIAL PRESENTATIONMARCH 2017

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WE DEVELOP, PUBLISH ANDMARKET MULTICHANNEL VIDEOGAMES

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3

FREE TO PLAY ITALIAN DISTRIBUTIONPREMIUM GAMESDIGITAL & RETAIL

ORGANIZATION CHART

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TO REDUCE THE RELIANCE ON THE ITALIAN MARKET WE NEEDED TO GROW THE BUSINESS INTERNATIONALLY

TO EXPAND THE BUSINESS INTO BECOMING A GLOBALLY INTEGRATED PUBLISHING AND DEVELOPMENT COMPANY

TO INCREASE SIGNIFICANTLY THE PORTION OF DIGITAL REVENUES

IN THE LAST 5 YEARS THE STRATEGIC CHALLENGES WE FACED:

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EVOLUTION OF THE VIDEOGAME MARKETFROM TRADITIONAL RETAIL DISTRIBUTION TO DIGITAL, MOBILE & MULTICHANNEL

Game as a service is a community game that retains gamers through the continuous delivery of additional contents

Gamers now access content across the web through all available digital channels including consoles, smartphones and tablets

MULTICHANNEL

With the explosion in mobile devices everyone is now a gamer, the size of the market opportunity in Social and Mobile gaming has increased exponentially

MOBILE & SOCIALGAAS(GAME AS A SERVICE)

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EVOLUTION OF OUR CURRENT AND FUTURE PREMIUM GAMES

FY 2018FY 2016 FY 2017

FISCAL YEAR ENDING 30TH JUNE

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EVOLUTION OF OUR CURRENT AND FUTURE FREE TO PLAY GAMES

FY 2016 FY 2017 FY 2018

FREE TO PLAYGAMES’ LIFE ISSIGNIFICANTLYLONGER THANPREMIUM GAMES


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60%

GLOBALIZATION & DIGITALIZATION

REVENUES TRENDITALY VS INTERNATIONAL

REVENUES TRENDRETAIL VS DIGITAL/MOBILE

ITALY RETAIL

INTERNATIONAL DIGITAL/MOBILE

16%2%

33%14%

62% 72%

40%49% 42%

80% 82%

84%98%

67%86%

38% 28%51% 58%

20% 18%


85%

15%

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CONSOLIDATED FY 2017 REVENUESACTUAL + FORECAST BY OPERATING SEGMENT

14,5 %ITALIAN DISTRIBUTION

0,7 %OTHER ACTIVITIES

8,3 %FREE TO PLAY

70,5 %PREMIUM GAMES

6,0 %STUDIO


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CONSOLIDATED FY 2017 REVENUESACTUAL + FORECAST BY COUNTRY

15,2 %ITALY

5,6 %GERMANY

4,2 %IBERIA

2,5 %ASIA & PACIFIC

5,7 %FRANCE

48,0 %NORTH AMERICA

18,8 %UK


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NEW RELEASES & INVESTMENTS

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PLANNED INVESTMENTS

OUR SUCCESSFUL PRODUCTS GENERATED CASH

TO INVEST FOR GROWTHWE ENTERED INTO THE LARGEST INVESTMENT PLAN THROUGH STRATEGIC ACQUISITIONS ANDBRAND NEW PUBLISHING DEALS

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PREMIUM DIGITAL & RETAIL

SIGNIFICANT RELEASES FOR PREMIUM AND FREE TO PLAY

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2017 2018

FREE TO PLAY CONSOLE AND MOBILE

ASSETTO CORSA

PROMINENCE POKER

OVERKILL’S THE WALKING DEAD

BATTLE ISLANDS COMMANDERSHAWKEN

HOW TO SURVIVE 2

PORTAL KNIGHTS

BLOODSTAINEDDISTRIBUTION DEALS

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ASSETTO CORSA“Assetto Corsa is a shining masterpiece of virtual motorsport, a new standard for the future of driving simulators and an all-Italian pride” 95/100 IGN Italia

#1 PC RACING ON STEAM PLATFORM – OVER 1.4 MILLION DOWNLOADS

CRITICALLY ACCLAIMED FULLY-LICENSED NEXT GENERATION RACING SIMULATOR

100 FULLY LICENSED RACING CARS FROM THE WORLD’S TOP CAR MANUFACTURERS INCLUDING: FERRARI, LAMBORGHINI, MCLAREN AND PORSCHE

ACQUISITION OF 100% OF THE ITALIAN DEVELOPER KUNOS SIMULAZIONI S.R.L.ACQUISITION VALUE: 4.3 EUR MILLION

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PORTAL KNIGHTS

INTERNALLY DEVELOPED CONCEPT AND FULLY-OWNED IP

TERRARIA MEETS MINECRAFT MEETS LEGEND OF ZELDA

#1 SELLING GAME ON STEAM AT LAUNCH OF EARLY ACCESS END OF FEBRUARY 2016

NUMBER OF DOWNLOAD AT 31 DECEMBER 2016: 350 K

Release date:Spring 2017 for PC, Mobile and consoles

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OVERKILL’S THE WALKING DEAD

ALL-NEW WALKING DEAD STORYLINES WRITTEN BYORIGINAL AUTHOR ROBERT KIRKMAN

SMASH HIT COMIC SERIES AND TV SHOW (14.4M AVERAGE US VIEWERSHIP SEASON 5)

NARRATIVE-DRIVEN CO-OPERATIVE 1ST PERSON SHOOTER

DEVELOPED BY STARBREEZE OVERKILL (PAYDAY2) IN AN ALL-NEW CUSTOM BUILT GAME ENGINE

EXCLUSIVE WORLDWIDE PUBLISHING RIGHTS TO FULLY LICENSED CONSOLE GAME WITH OVERALL INVESTMENT OF USD 20 MILLION

Expected release date FY 2018 for PS4 and XBOX ONE

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BLOODSTAINED

THE SECOND LARGEST VIDEOGAME CROWDFUNDING KICKSTARTER CAMPAIGN IN 2015 WHICH HAS RAISED 5.5 USD MILLIONS TO DATE FROM 65K BACKERS

THE SPIRITUAL SUCCESSOR OF THE BELOVED CASTLEVANIA SERIES WHICH HAS BEEN A TOP SELLER GAME IN THE LAST TWO DECADES

EXCLUSIVE WORLDWIDE PUBLISHING RIGHTS ACROSS MULTIPLE FORMATS WITH A TOTAL INVESTMENT OF 4,4 USD MILLIONS

THE LATEST CREATION OF KOJI IGARASHI, THE FORMER SERIES PRODUCER OF CASTELVANIA FRANCHISE

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Expected release date on the first half of 2018 for PS4, XBOX ONE, PSVita, Wii U, PC Windows, Linux and OSX

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INTERNATIONAL CONSOLE RETAIL DISTRIBUTION DEALS

PUBLISHED BY CHUCKLEFISH GAMES - DEVELOPED BY CONCERNEDAPE LLCRELEASE DATE APRIL 2017 FOR PS4 AND XBOX ONE

DEVELOPED BY 34BIGTHINGSRELEASE DATE ON 2017 FOR PS4 AND XBOX ONE

PUBLISHED BY STARBREEZE AB - DEVELOPED BY BEHAVIOUR INTERACTIVERELEASE DATE WITHIN FY ENDING JUNE 2017 FOR PS4 AND XBOX ONE

PUBLISHED BY STARBREEZE AB - DEVELOPED BY LION GAME LIONRELEASE DATE SUMMER 2017 FOR PS4 AND XBOX ONE

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HAWKEN

LARGE AND DEVOTED PC COMMUNITY BUILT UP OVER 3+ YEARS

AVAILABLE ON PS4 AND XBOX ONE

OVER 3 MILLION DOWNLOAD ON STEAM PLATFORM

#1 FREE-TO-PLAY MECH SHOOTER ON PC STEAM

Released on July 2016 for PS4 and XBOX ONE

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FINANCIALS

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CONSOLIDATED P&L – FY2017 H1 ACTUALS

SALES DRIVEN BY NEW PRODUCTS LAUNCHED IN F2P AND PREMIUM GAMESROCKET LEAGUE PERSISTENTLY IN THE SALES CHART

65,142

61,689

7,510

3,911

10,673

7,395

45,290

42,893

2,498

870

1,977

1,250

19,853

18,796

5,013

3,041

8,696

6,145

43.84%

43.82%

n.m.

n.m.

n.m.

n.m.

H1 FY 2017 H1 FY 2016 CHANGE CHANGE%

GROSS REVENUES

NET REVENUES

EBITDA

EBIT

EBT

NET PROFIT

€/1000

SOURCE: DIGITAL BROSFISCAL YEAR ENDING 30TH JUNE

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PREMIUM GAMES – FY2017 H1 ACTUALS

47,535

45,201

9,485

8,271

28,218

26,890

6,459

5,884

19,317

18,312

3,026

2,387

68.5%

68.1%

46.9%

40.6%


GROSS REVENUES

NET REVENUES

EBITDA

EBIT

€/1000

FISCAL YEAR ENDING 30TH JUNE SOURCE: DIGITAL BROS

SIGNIFICANT BOOST OF NEW PREMIUM GAMES, ASSETTO CORSA (€9.1 M), ABZU (€2.9 M) AND ROCKET LEAGUE (€14 M)CONTINUOUS FLOW OF REVENUES FROM PREVIOUS YEARS’ BLOCKBUSTERS PAYDAY 2 (€7.5 M) AND TERRARIA (€7.4 M)

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STUDIO – FY2017 H1 ACTUALS

SOURCE: DIGITAL BROS

2,863

2,863

633

337

916

916

49

(252)

1,947

1,947

584

589

n.m.

n.m.

n.m.

n.m.


GROSS REVENUES

NET REVENUES

EBITDA

EBIT

€/1000


FOCUS ON EXTERNAL CUSTOMERS VS INTERNAL DEVELOPMENT TRIPLED REVENUES AND INCREASED PROFITABILITY

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ITALIAN DISTRIBUTION – FY2017 H1 ACTUALS


10,475

9,581

1,497

990

13,937

12,913

1,284

1,198

(3,462)

(3,332)

213

(208)

-24.8%

-25.8%

16,6%

-17.4%


GROSS REVENUES

NET REVENUES

EBITDA

EBIT

€/1000


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FREE TO PLAY – FY2017 H1 ACTUALS

NEW PRODUCT REVENUES POSITIVELY IMPACTED H1, PROMINENCE POKER (€547 THOUSAND) AND HAWKEN (€497 THOUSAND)THE EVERLASTING GEMS OF WAR REALIZED THE BEST PERFORMANCE (€1.5 M)


3,866

3,866

114

(1,175)

1,883

1,883

(630)

(1,126)

1,983

1,983

744

(49)

n.m.

n.m.

n.m.

4.4%


GROSS REVENUES

NET REVENUES

EBITDA

EBIT

€/1000


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NET FINANCIALS OVER THE LAST YEARS

(50,00)

(60,00)

(70,00)

(40,00)

(30,00)

(20,00)

(10,00)

0,00

10,00 35,00

5,00

10,00

15,00

20,00

25,00

30,00

Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17

CASH

FLO

W IN

VEST

MENT

S

NET F

INAN

CIAL

ASS

ETS

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OUTLOOK

PORTAL KNIGHTS IN PREMIUM GAMES AND BATTLE ISLANDS COMMANDERS IN F2P, FULLY OWNED GROUP’S IP, EXPECTED IN H2.

OPPORTUNISTIC RETAIL PUBLISHING AGREEMENTS WILL HAVE AN IMPACT ON A SHORT-TERM BASIS

STUDIO EXPECTS TO CONTINUE FOCUS ON PROJECTS FOR THIRD PARTY CUSTOMERS

EXPECTED IMPROVEMENT OF ITALIAN DISTRIBUTION AND F2P SEGMENTS RESULTS IN H2

THE DFS FANTASFIDA WILL REDUCE NEGATIVE MARGINS COMPARED WITH PREVIOUS FISCAL YEAR

INCREASED NWC REQUIREMENTS IN RESPECT OF HIGHER REVENUES WILL TEMPORARILY INTERRUPT THE INCREASE OF THE NET FINANCIAL ASSETS

INCREASED EXPECTATIONS AT FISCAL YEAR-END BUT STILL BELOW THE EXTRAORDINARY RESULTS OF PREVIOUS FY

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DIGITAL BROS INVESTMENT HIGHLIGHTS

LEADING INDEPENDENT INTERNATIONAL PUBLISHING AND DISTRIBUTION BUSINESS. INTERNATIONAL SALES & MARKETING INFRASTRUCTURE IN PLACE.

INCREASING AMOUNT OF FULLY OWNED IP BOTH IN PREMIUM (PORTAL KNIGHTS, INDIVISIBLE), F2P (BATTLE ISLAND)

GROWTH BEING DRIVEN BY NEW PRODUCTS CYCLE. LAUNCH ON NEW TITLES GIVE STRONG SALES VISIBILITY (OVERKILL’S THE WALKING DEAD)

GROWTH SUPPORTED BY ACQUISITION STRATEGY BASED ON AAA AND AA TITLES (OVERKILL’S THE WALKING DEAD, BLOODSTAINED) AND ALSO OPPORTUNISTIC DISTRIBUTION AGREEMENTS (DEAD BY DAYLIGHT, RAID, STARDEW VALLEY)

SIGNIFICANT FREE CASHFLOW GENERATION USED TO REDUCE DEBT AND SUPPORTING DIVIDEND POLICY AND ACQUISITIONS

MANAGEMENT ALIGNED WITH SHAREHOLDERS BY LONG TERM INCENTIVE PROGRAM

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APPENDIX

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OUR MILESTONES

1989FOUNDATION

2007RETAIL

PUBLISHING

2013MOBILE

PUBLISHING

2000MILANSTOCK

EXCHANGE

2012DIGITAL

PUBLISHING

2015MOBILE AND

CONSOLEDEVELOPER

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INTERNATIONAL PRESENCE245* PEOPLE WORLDWIDE

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OREGON

CALIFORNIA

FRANCE

SPAIN

UK

ITALY

CHINA

GERMANY

110.1 MREVENUES

2016

*31TH DECEMBER

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MARKET SIZETHE WORLDWIDE GAMES MARKET WILL REACH $118.6 BILLION BY 2019

SOURCE: NEWZOO GLOBAL GAMES MARKET REPORT Q2 2016

2015 2016 2017 2018 2019

28%

6%

30%

9%

24%

3%

27%

5%

29%

10%

27%

2%

26%

5%

28%

10%

30%

1%

26%

4%

27%

11%

32%

1%

25%

4%

26%

11%

34%

1%

$91.8Bn$99.6Bn

$106.5Bn $112.5Bn $118.6Bn

$30.4Bn

MOBILE $36.9Bn

MOBILE $42.5Bn

MOBILE $47.4Bn

MOBILE $52.5Bn

MOBILE

SMARTPHONE TABLET HANDHELD TV/CONSOLE CASUAL WEBGAMES PC/MMO

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CONSOLE DEVELOPER ACQUISITION - MARCH 2017KUNOS SIMULAZIONI S.R.L.

FOUNDED IN 2005

BASED IN ROME, ITALY

CREATOR OF SUCCESSFULL RACING SIMULATOR ASSETTO CORSA WHICH SOLD AROUND 1.4 MILLION COPIES WW SINCE ITS LAUNCH IN 2014

ACQUISITION OF 100% OF ASSETTO CORSA DEVELOPERFOR 4.3 EUR MILLION, OF WHOM:

EURO 1,375,000 ENTIRELY IN CASH ON THE CLOSING DATEEURO 1,375,000 ENTIRELY IN CASH WITHIN ONE YEAR FROM THE CLOSING DATEEURO 1,591,500 VIA THE ISSUE OF 150,000 NEW DIGITAL BROS

ORDINARY SHARES AT A PRICE OF €10.61

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PAYDAY RIGHTS SOLD BACK TO STARBREEZE

AS A DEFERRED CONSIDERATION DIGITAL BROS WILL BENEFIT FROM A 33% REVENUE SHARE ON FUTURE PAYDAY3 UP TO 40 MILLION USD

SOLD BACK FOR SEK 249.3 MILLION (APPROX. USD 30 MILLION) PAID IN 10.9 MILLION NEWLY ISSUED STARBREEZE B-SHARES

IMPACT OF THIS AGREEMENT ON THE FISCAL YEAR ENDING30 OF JUNE 2016 HAS BEEN:- REVENUES: €26.8 MILLION- EBT: €19.7 MILLION- NET FINANCIAL POSITION: €22.9 MILLION

THE GROUP WILL CONTINUE TO HOLD PUBLISHING RIGHTS FOR THE CONSOLE VERSIONS OF PAYDAY 2: CRIMEWAVE EDITION

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NET WORKING CAPITAL REQUIREMENTSNET WORKING CAPITAL REQUIREMENTS

RETAIL

MOBILE

DIGITAL

Overkill’s The Walking Dead• Long development time (24 - 36 months)• Manufacturing paid in advance• Inventories

Gems of War• Limited development process (2-9 months)• Development after money collection

Portal Knights• Medium development time (6-18 months)• No advance manufacturing neither inventories needed

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CASH FLOW CYCLES PER TYPE OF GAME

-80

-60

-40

-20

0

20

40

RETAIL

Q1

DIGITAL

MOBILE

Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q11 Q12Q10

-3,75 -7,5 -11,25 -15 -18,75 -22,25 -26,25 -67 -22 23 2323

0 -12,5 -25 -37,5 -22 -2 23 3312

0 -1 0 5,5 27,5 36,513

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MARGIN COMPARISON

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TERRARIA GOES TO CHINA

DIGITAL BROS WILL RECEIVE A 50% ROYALTY ON NET SALES

LICENSED TO IDREAMSKY GAMES THE EXCLUSIVE RIGHTS FOR TERRARIA FOR THE CHINESE MARKET

IDREAMSKY GAMES IS THE LARGEST INDEPENDENT MOBILE GAME PUBLISHING PLATFORM IN CHINA* LISTED ON NASDAQ (DSKY) - 253 USD MILLION CONSOLIDATED GROSS REVENUES AS AT DEC. 31ST, 2015*

HEADQUARTERED IN SHENZHEN

MARKET CAPITALISATION OF c$600 MILLION

1.3 BILLION REGISTERED USERS*

*source: iDreamSky

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FY2017 H1 ACTUAL REVENUES BY PRODUCT

Rocket League

Assetto Corsa

PAYDAY 2

Terraria

Sniper Elite V3

Abzu

Others

How to Survive

Portal Knights

Brothers

Virginia

Total

13,927

9,119

7,519

7,448

2,916

2,865

1,271

865

855

406

344

47,535

EURO THOUSAND EURO THOUSAND31 DEC 2016

Gems of War

Battle Ages

Battle Islands

Prominence Poker

Hawken

Others

Total

1,502

633

620

547

497

63

3,866

31 DEC 2016

PREMIUM PUBLISHING FREE TO PLAY

FINANCIAL PRESENTATION MARCH 2017 - Digitalbros · net financials over the last years (50,00)...

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Transcript of FINANCIAL PRESENTATION MARCH 2017 - Digitalbros · net financials over the last years (50,00)...