Spin Master Corp · TSX:TOY
Spin Master — Investor Day (August 2023)
51 slides from Spin Master's investor day presentation, Aug 31, 2023
Slide 1: Digital Games Investor Day Stockholm
Digital Games Investor Day Stockholm August 31, 2023 Confidential & Proprietary 1
Slide 2: Reimagining Everyday Play
REIMAGINING EVERYDAY PLAY Leading Global Children’s Entertainment Company with a Diversified Multi-Platform Portfolio 2 Confidential & Proprietary
Slide 3: Spin Master Global Footprint
Spin Master Global Footprint
Slide 4: Unique Ability to Deliver Play Experiences Across Three Creative Centres
Unique Ability to Deliver Play Experiences Across Three Complimentary Creative Centres Toys Leading Global Creating magical Children’s play experiences Entertainment Entertainment for kids & families Company Digital Games 4 Confidential & Proprietary
Slide 5: Three Creative Centres
Three Creative Centres Toys Entertainment Spin Master Entertainment creates With distribution in over 100 countries, Spin Master is best known and produces compelling for award-winning brands PAW Patrol®, Bakugan®, Kinetic Sand®, multiplatform content, through its Air Hogs®, Hatchimals®, Rubik’s Cub
Slide 6: Vision
Creative Centre Vision Toys Entertainment Digital Games Be a global leader in Be a leading global Create Toys by creating play creator of children’s exceptional digital experiences that entertainment, igniting play Vision spark creativity and imaginations and experiences for kids imagination in kids
Slide 7: Roles & Strategies
Creative Centre Roles & Strategies Each CC plays a distinct, yet interrelated role M&A is essential to our enterprise growth strategy Toys Entertainment Digital Games Provide a stable base of Create content and build Create digital games and Primary revenue/profit/FCF to build evergreen franchises th
Slide 8: Financial Model Overview
Financial Model Overview Distinct but complementary financial models Proven model for revenue, EBITDA and FCF generation TOYS Properties drive franchise growth - can be accretive to margins when monetized through Toys, Digital Games and Non-Toy Licensing & Merchandising revenue Entertainment •Potenti
Slide 9: Revenue
Revenue Traditional and evolving drivers across creative centres • Gross Product Sales (mid to high single digits organic) • Global retail distribution – brick & mortar and e-commerce TOYS • Producing and selling content to broadcasters globally • Royalty-based Non-Toy Licensing & Merchandising reve
Slide 10: Cost Structure
Cost Structure Focus on driving Operating Leverage • COGS • Sales allowances – sign of operating efficiency • Integrated Sales & Marketing and efficient Distribution/Supply Chain TOYS – critical to winning • Content production costs – Capitalized/Amortized (i.e. "COGS") • Once content produced, low
Slide 11: Capital Investments
Capital Investments Consolidated Capex: 6% - 7% total revenue • Capital Light: do not own factories - flexibility/less capex • Tooling - low as a proportion of revenue TOYS • Content production capital intensive but tax credits/pre-committed revenues from production advances lower net capital outlay
Slide 12: Aug 2023
Aug 2023 Confidential & proprietary
Slide 13: Our History
OUR HISTORY 2016 2021 2021 2021 2022 Acquired Toca Established Noid Acquired SMV minority Acquired Nordlight Boca and Sago Studio in Originator based investment in Mini based in Stockholm to in San Francisco, Nordlight based in Stockholm, Sweden develop digital CA Stockholm and Toronto, games for Sp
Slide 14: Release New IP - Expanding our Addressable Market
Release New IP - Expanding our Addressable Market
Slide 15: We create exceptional digital play experiences for kids of all ages
We create exceptional digital play experiences for kids of all ages around the world Create exceptional digital play experiences for kids Surprise and delight kids of all ages Deliver maximum consumer value
Slide 16: Our Values
OUR VALUES We’ve been able to establish a solid foundation of trust with both kids and parents, across our wide portfolio of Digital Games. Kids and parents first Transparent dialogue with players Nothing is hidden
Slide 17: Growth Drivers
GROWTH DRIVERS There are a number of growth drivers across the digital games group that we’re aiming to deliver over the next years. Let’s briefly touch on a few key areas of focus: Business New products and Spin Master development Subscription Model M&A and Ventures
Slide 18: Fueling Growth
FUELING Release New GROWTH IP - Expanding our Addressable Market GROW THE CORE GROW SUBSCRIBERS RELEASE NEW GAME IP Fueling growth by; growing our core, growing our subscribers and releasing new game IPs.
Slide 19: Where We Play
WHERE WE PLAY Create exceptional digital play experiences for kids Surprise and delight kids of all ages Deliver maximum consumer value
Slide 20: Global Games Market
GLOBAL Release GAMESour New IP - Expanding MARKET Addressable Market 2023 Global Games Market Per Platform Where we play **Source: Newzoo Global Games Market Report 2023
Slide 21: Our Addressable Market
OUR ADDRESSABLE MARKET $500M <8 yrs $7.62Bn $7.51Bn Adventure Simulation $983M Kids & Family $983M $9.07Bn Kids & Family Puzzle TODAY (1Bn) TOMORROW (25Bn) Building games for addressable market on mobile
Slide 22: Top Grossing Games Digital Roadmap
TOP GROSSING GAMES Digital Roadmap (data.ai, past 52wks) Entering new categories and aiming to expand our portfolio by building games and experiences for kids of all ages Entering categories where some games generate ~$1.25 Bn revenue per annum.
Slide 23: Our Diverse Portfolio & Expertise
OUR DIVERSE PORTFOLIO & EXPERTISE v 2 to 5 6 to 14 Kids Years old Years old All ages Confidential & Proprietary
Slide 24: How We Play
HOW WE PLAY Create exceptional digital play experiences for kids Surprise and delight kids of all ages Deliver maximum consumer value
Slide 25: Our Global Studios
OUR GLOBAL STUDIOS SP! _» DIGITAL GAMES @ DIGITAL GAMES
Slide 26: The Power of Spin Master's Creative Centers
THE POWER OF SPIN MASTERS CREATIVE CENTERS
Slide 27: Operating Leverage
OPERATING LEVERAGE Talent Game Production & Marketing <3 Business Performance Ecosystem
Slide 28: Our Business Models
OUR BUSINESS MODELS In App Purchases Subscriptions Premium Currency / Other Models
Slide 29: How We Generate Revenue
HOW WE GENERATE REVENUE Our Business Models Engagement 1 2 Conversion Spend 3 REVENUE
Slide 30: Engagement Is the New Strategic Imperative
ENGAGEMENT IS THE NEW STRATEGIC IMPERATIVE January March 2022 May Jyly September November January March May June 2022 2022 2022 2022 2022 2022 2023 2023 2023 More content releases lead to higher engagement & monetization opportunities in H1 2023
Slide 31: Our Players
OUR PLAYERS Create exceptional digital play experiences for kids Surprise and delight kids of all ages Deliver maximum consumer value
Slide 32: A New Generation of Gamers
A NEW GENERATION OF GAMERS 94% of kids 2 to 12 are playing digital games, connecting, creating, sharing content.
Slide 33: Strong Player Network
STRONG PLAYER NETWORK As of Q2 2023 As of Q2 2023 76M Monthly Active Users 58M Monthly Active Users Building an engaged global player network
Slide 34: MAU Trending Higher Than 2022/2021
MAU TRENDING HIGHER THAN 2022/2021 TLW’s engagement has improved sequentially since Q3 2022 to achieve levels seen during peak pandemic highs
Slide 35: Growing Ecosystem
AIPGROWING Release New ECOSYSTEM - Expanding our Addressable Market Sophie, 8 years old Sam, 12 years old Lex, 13 “The Creative Storyteller” “The Social Collector” “The Loyal Buddy”
Slide 36: Our Games
OUR GAMES Create exceptional digital play experiences for kids Surprise and delight kids of all ages Deliver maximum consumer value
Slide 37: Digital Games: New Games
DIGITAL GAMES New Games - Expanding our Addressable Market Entering new categories and aiming to expand our portfolio by building games and experiences for kids of all ages
Slide 38: Toca Days
TOCA DAYS “Toca Days is a game about 3D multiplayer game set in the Toca Boca Universe building meaningful relationships in an ever-evolving world through Entering a $7.5Bn simulation genre self-expression and open play” Early testing, In select markets Testing Ecosystem growth
Slide 39: Rubik's Match
RUBIK'S MATCH A casual puzzle game that celebrates creativity and learning Entering a $9.1Bn puzzle market Testing, iterating and proving out “switcher” Kpis Early testing in select markets
Slide 40: Cubric
CUBRIC Multiplayer 3D world builder game Entering a $7.5Bn simulation genre Kid safe, fun and educational Currently testing in select markets.
Slide 41: PAW Patrol Academy
PAW PATROL ACADEMY Comin g Soon Delivering the best mobile PAW app for the right age group, “bring the child into the show” $1Bn Kids & Family genre. Leveraging PAW entertainment content to deliver an immersive, fun and educational experience Launching in lockstep with the next movie release
Slide 42: Piknik
PIKNIK Comin g Soon Single subscription for full access catalog of play-to-learn digital games. $1Bn Kids & Family genre. Hundreds of interactive games and activities from Toca Boca, Sago Mini and Originator. Customers can choose single app subscriptions or the bundle subscription of $11.99/mo.
Slide 43: Unicorn Academy
UNICORN ACADEMY Curren t ly in P re Pro duction Mobile action adventure digital game that encapsulates the magic of the series Entering a $8Bn Adventure genre 51% of mobile gamers are women. Open space for girls 6-13yrs and built for an unserved demography
Slide 44: We create exceptional digital play experiences for kids of all ages
We create exceptional digital play experiences for kids of all ages around the world Create exceptional digital play experiences for kids Surprise and delight kids of all ages Deliver maximum consumer value
Slide 45: Release New IP - Expanding our Addressable Market
Release New IP - Expanding our Addressable Market
Slide 46: Thank You
THANK YOU SPIN MASTER’ DIGITAL GAMES
Slide 47: Release New IP - Expanding our Addressable Market
Release New IP - Expanding our Addressable Market
Slide 48: Global Games Market Per Region
GLOBAL Release GAMESour New IP - Expanding MARKET Addressable Market 2023 Global Games Market Per Region **Source: Newzoo Global Games Market Report 2023
Slide 49: Release New IP - Expanding our Addressable Market
Release New IP - Expanding our Addressable Market
Slide 50: Game Development Framework
Game Development Framework Gate 1 Gate 2 Gate 3 Gate 4 Gate 5 CONCEPT PROVING PRODUCTION LIVE SCALE SUNSET
Slide 51: Digital Games driving towards 20% Spin Master Total Revenue
We will continue to grow our core as TLW We will accelerate subscription We’ll reach kids of all ages with continues to generate the majority of our growth via the Piknik bundle, a single new games that enter us into new Digital Games revenue and is showing subscription to access full catalog of cat