FINANCIAL PRESENTATIONMARCH 2017
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WE DEVELOP, PUBLISH ANDMARKET MULTICHANNEL VIDEOGAMES
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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
FISCAL YEAR ENDING 30TH JUNE
8
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%
FISCAL YEAR ENDING 30TH JUNE
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
FISCAL YEAR ENDING 30TH JUNE
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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
FISCAL YEAR ENDING 30TH JUNE
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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%
H1 FY 2017 H1 FY 2016 CHANGE CHANGE%
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.
H1 FY 17 H1 FY 16 CHANGE CHANGE%
GROSS REVENUES
NET REVENUES
EBITDA
EBIT
€/1000
FISCAL YEAR ENDING 30TH JUNE
FOCUS ON EXTERNAL CUSTOMERS VS INTERNAL DEVELOPMENT TRIPLED REVENUES AND INCREASED PROFITABILITY
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ITALIAN DISTRIBUTION – FY2017 H1 ACTUALS
SOURCE: DIGITAL BROS
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%
H1 FY 17 H1 FY 16 CHANGE CHANGE%
GROSS REVENUES
NET REVENUES
EBITDA
EBIT
€/1000
FISCAL YEAR ENDING 30TH JUNE
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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)
SOURCE: DIGITAL BROS
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%
H1 FY 17 H1 FY 16 CHANGE CHANGE%
GROSS REVENUES
NET REVENUES
EBITDA
EBIT
€/1000
FISCAL YEAR ENDING 30TH JUNE
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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
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