Digital Bros S.p.a. · MIL:DIB
Digital Bros — Investor Presentation (March 2019)
37 slides from Digital Bros's investor presentation, March 2019
Slide 1: Presentation March 2019
digital entertainment PRESENTATION MARCH 2019
Slide 2: Our Milestones
OUR MILESTONES 1989 2000 2007 2012 2013 2015 2017 FOUNDATION LISTING RETAIL DIGITAL MOBILE MOBILE AND CONSOLE PUBLISHING PUBLISHING PUBLISHING DEVELOPERS ACQUISITION M O B I L E MARCH 2019 2 2
Slide 3: Market Value Chain
MARKET VALUE CHAIN RETAIL CONSOLE DEVELOPERS PUBLISHERS DISTRIBUTORS RETAILERS END CONSUMERS MANUFACTURERS DIGITAL DEVELOPERS PUBLISHERS MARKETPLACES END CONSUMERS DIGITAL BROS GROUP MARCH 2019 3
Slide 4: We Develop, Publish and Market Multichannel Videogames
WE DEVELOP, PUBLISH AND MARKET MULTICHANNEL VIDEOGAMES DISTRIBUTION Retail distribution (chains PUBLISHING and stores – global distribution network) IP scouting and selection Digital download (digital STUDIOS Production survey marketplaces, mobile and tablet store, social DR studios Marketing & pr p
Slide 5: Premium and Free to Play
PRODUCTS PREMIUM AND FREE TO PLAY THE GROUP OPERATES GLOBALLY IN THE PREMIUM AND FREE TO PLAY GAMES WITH THE 505 GAMES BRAND PREMIUM GAMES FREE TO PLAY acQuisition of contents Rights fRom development and publishing of developeRs (ip owneRship, long teRms videogames available foR fRee on agReement, t
Slide 6: Digital and Retail Channels
CHANNELS DIGITAL AND RETAIL DIGITAL RETAIL DISTRIBUTION DISTRIBUTION retail Online Marketplaces : Main chains & stores digital Steam 100% Playstation Network e-commerce 2% 90% 14% Xbox Live 80% 40% 42% 47% Game app download : 70% 49% 59% mobile and tablet STORES 60% 98% 86% 72% 50% Online social pla
Slide 7: Worldwide Presence
WORLDWIDE PRESENCE HEADQUARTERS: MILAN 180* PEOPLE WORLDWIDE MARCH 2019 7
Slide 8: New Releases & Investments
1 NEW RELEASES & INVESTMENTS 8
Slide 9: Planned Investments
PLANNED INVESTMENTS ouR successful pRoducts geneRated cash to invest foR gRowth we enteRed into the laRgest investment plan thRough stRategic acQuisitions and bRand new publishing deals MARCH 2019 - NEW RELEASES & INVESTMENTS 9
Slide 10: IP Portfolio
IP PORTFOLIO MARCH 2019 LONG TERM THIRD OWNED IP AGREEMENTS PARTY PARTNERSHIPS MARCH 2019 - NEW RELEASES & INVESTMENTS 10
Slide 11: Significant Releases for Premium and Free to Play
SIGNIFICANT RELEASES FOR PREMIUM AND FREE TO PLAY PREMIUM DIGITAL & RETAIL 2019 2020 FREE TO PLAY CONSOLE AND MOBILE MARCH 2019 - NEW RELEASES & INVESTMENTS 11
Slide 12: Assetto Corsa
ASSETTO CORSA assetto coRsa is the #1 Racing simulatoR – 4.1 million copies and moRe than euRo 32 million Revenues new episode assetto coRsa competizione: official game of the blancpain gt seRies in eaRly access on steam fRom 12th septembeR 2018 3 yeaRs paRtneRship with blancpain competition fully l
Slide 13: Indivisible
INDIVISIBLE classically-influenced Rpg and platfoRmeR hybRid cReated by lab zeRo games (developeR of skullgiRls) cRowdfunded on indigogo in 2015 (moRe than us $2 million Raised) uniQue selling points of the game: mix of RPG action and platform huge character roster woRldwide publishing Rights on pc,
Slide 14: Bloodstained
BLOODSTAINED latest cReation of koJi igaRashi, the foRmeR seRies pRoduceR of castelvania fRanchise spiRitual successoR of the castlevania seRies which has been a top selleR game in the pRevious decade second laRgest videogame cRowdfunding kickstaRteR campaign in 2015 which has Raised us $5.5 million
Slide 15: Control
CONTROL cinematic thiRd peRson action game built on Remedy’s pRopRietaRy noRthlight® technology developed by Remedy enteRtainment, developeR of aaa video games (maX payne, alan wake and Quantum bReak) woRldwide publishing Rights foR 505 games on pc, playstation 4 and XboX one the total investment in
Slide 16: Journey to the Savage Planet
JOURNEY TO THE SAVAGE PLANET fiRst-peRson adventuRe game set in a bRight and coloRful alien woRld debut title fRom industRy veteRans aleX hutchinson, yassine Riahi and Reid schneideR’s new montReal-based development studio, typhoon studios woRldwide publishing Rights foR 505 games on pc, playstation
Slide 17: Hawken
HAWKEN mech genRe: collect, build and customize youR mech stRong f2p system with immeRsive pve elements laRge population of gameRs the actual pRoduction is not Just a seQuel: new game design objective-based pve to maximize revenues without being ‘pay-to-win’ & to create sustainable longterm product
Slide 18: Financials
2 FINANCIALS 18
Slide 19: Market Size
MARKET SIZE THE WORLDWIDE GAMES MARKET WILL REACH $174 BILLION BY 2021 $148.1 Bn $160.5 Bn $174.0 Bn +9.3% $134.9 Bn 19% TOTAL MARKET CAGR $121.7 Bn 20% 2017-2021 21% 1% 22% 2% 23% 2% 27% 3% 27% 4% 28% 28% 9% Boxed/Dowloaded PC 27% 10% 10% Browser PC 10% 10% 43% Console 41% 39% 36% 37% Tablet Smartp
Slide 20: Consolidated P&L - FY 2019 H1 Actual
CONSOLIDATED P&L - FY 2019 H1 ACTUAL €/1000 2019 YTD 2018 YTD CHANGE CHANGE % GROSS REVENUES 30,216 44,062 (13,846) -31.4% NET REVENUES 28,174 40,698 (12,524) -30.8% EBITDA 136 3,660 (3,524) n.m. EBIT (4,122) (141) (3,981) n.m. EBT (3,943) 87 (4,029) n.m. NET PROFIT (3,160) 18 (3,178) n.m. FISICAL Y
Slide 21: Premium Games - FY 2019 H1 Actual
PREMIUM GAMES - FY 2019 H1 ACTUAL €/1000 2019 YTD 2018 YTD CHANGE CHANGE % GROSS REVENUES 19,787 30,584 (10,797) -35.3% NET REVENUES 18,633 28,293 (9,660) -34.1% EBITDA 2,527 6,090 (3,563) -58.5% EBIT (21) 3,919 (3,940) n.m. FISICAL YEAR ENDING 30TH JUNE SOURCE DIGITAL BROS ASSETTO CORSA REVENUES SL
Slide 22: Free to Play - FY 2019 H1 Actual
FREE TO PLAY - FY 2019 H1 ACTUAL €/1000 2019 YTD 2018 YTD CHANGE CHANGE % GROSS REVENUES 3,169 2,699 470 17.4% NET REVENUES 3,169 2,699 470 17.4% EBITDA 890 72 818 n.m. EBIT (344) (1,034) 690 -66.7% FISICAL YEAR ENDING 30TH JUNE SOURCE DIGITAL BROS REVENUES INCREASED BY 17.4% THANKS TO THE POSITIVE
Slide 23: Revenue Breakdown by Segment
REVENUE BREAKDOWN BY SEGMENT CONSOLIDATED FY 2018 CONSOLIDATED H1 ACTUAL + FORECAST 2019 Premium Games Premium Games 71,2% 73,1% Italian Distribution Italian Distribution 20,3% 18,0% Free to Play Free to Play 7,6% 8,0% Other Projects Other Projects 0,9% 0,9% MARCH 2019 - FINANCIALS 23
Slide 24: Globalization
GLOBALIZATION 100% 90% 16% REVENUES TREND 33% ITALY VS INTERNATIONAL 80% 70% 62% 79% 60% 80% Italy 50% 82% international 40% 84% 86% 30% 67% 88% 20% 38% 10% 21% 20% 18% 14% 12% 0% 2007 2010 2014 2015 2016 2017 2018 2019 ACT ACT ACT ACT ACT ACT ACT ACT + FORE MARCH 2019 - FINANCIALS 24
Slide 25: Investments
NET FINANCIAL POSITION OVER THE LAST YEARS 20,00 45,00 10,00 40,00 0 35,00 NET FINANCIAL POSITION (10,00) 30,00 (20,00) 25,00 INVESTMENTS * (30,00) 20,00 (40,00) 15,00 (50,00) 10,00 (60,00) 5,00 (70,00) - 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
Slide 26: Outlook
OUTLOOK eXpected pRofit in the second half, due to the launch of bloodstained and the pc veRsion of indivisible in the last QuaRteR of the financial yeaR net financial debt gRowth in the second half of the financial yeaR due to investments in new pRoducts followed by a maRked impRovement staRting fR
Slide 27: Digital Bros - A Snapshot
DIGITAL BROS - A SNAPSHOT GLOBAL COMPANY, OPERATING ACROSS THE VIDEOGAME ENTERTAINMENT MARKET DEVEOLPMENT, PUBLISHING AND MARKETING MULTICHANNEL VIDEOGAMES COMBINING PREMIUM GAMES AND FREE TO PLAY TO MAXIMIZE THE BRAND PROFITABILITY ACQUISITION OF UNDERPERFORMING INTELLECTUAL PROPERTIES (I.E. ASSETT
Slide 28: Appendix
3 APPENDIX MARCH 2019 - FINANCIALS 28 28
Slide 29: Evolution of the Videogame Market
EVOLUTION OF THE VIDEOGAME MARKET FROM TRADITIONAL RETAIL DISTRIBUTION TO DIGITAL, MOBILE & STREAMING GAAS (GAME AS A SERVICE) MULTICHANNEL MOBILE & SOCIAL game as a seRvice is a gameRs now access with the eXplosion in community game that content acRoss the web mobile devices eveRyone is Retains gam
Slide 30: Margin Comparison
MARGIN COMPARISON RETAIL DIGITAL RRp €49,99 €49,99 RRp VAT 20% 20% VAT DISCOUNT / COMMISSION 35% 30% DISCOUNT / COMMISSION GROSS REVENUES €27,08 €29,16 GROSS REVENUES PRICE PROTECTION & ADJ 10% 0,0% PRICE PROTECTION & ADJ NET REVENUES €24,37 €29,16 NET REVENUES COGS €6,07 -- COGS MARKETING 10% 10% M
Slide 31: Who Are Our Competitors
WHO ARE OUR COMPETITORS RETAIL PUBLISHING DIGITAL PUBLISHING F2P DEVELOPMENT FAR EAST FOCUS HOME INTERACTIVE FRONTIER GLU MOBILE PARADOX STARBREEZE AB THQ NORDIC AB TEAM 17 BIG BEN GROUP DIGITAL BROS SOURCE: DIGITAL BROS MARCH 2019 - APPENDIX 31
Slide 32: Console Developer Acquisition March 2017
CONSOLE DEVELOPER ACQUISITION MARCH 2017 KUNOS SIMULAZIONI S.R.L. ACQUISITION OF 100% OF ASSETTO CORSA DEVELOPER FOR 4.3 EUR MILLION, OF WHOM: euro 1,375,000 entirely in cash on the closing date euro 1,375,000 entirely in cash within one year from the closing date euro 1,591,500 via the issue of 150
Slide 33: Payday Rights Sold Back to Starbreeze
PAYDAY RIGHTS SOLD BACK TO STARBREEZE sold back foR sek 249.3 million (appRoX. usd 30 million) paid in 10.9 million newly issued staRbReeze b-shaRes as a defeRRed consideRation digital bRos will benefit fRom a 33% Revenue shaRe on futuRe payday3 up to 40 million usd the gRoup will continue to hold p
Slide 34: Disposal of Pipeworks Inc.
DISPOSAL OF PIPEWORKS INC. sold to noRthen pacific gRoup, us pRivate eQuity fiRm, foR us $20 million of whom us $2.5 million on decembeR 21st, 2017 foR a 12.5% stake, us $5 million on febRuaRy 23Rd, 2018 foR eXeRcising the buy option, us $12.5 million in thRee instalments, as follows: US $2,5 millio
Slide 35: Italian Distribution - FY 2019 H1 Actual
ITALIAN DISTRIBUTION - FY 2019 H1 ACTUAL €/1000 2019 YTD 2018 YTD CHANGE CHANGE % GROSS REVENUES 7,029 10,375 (3,346) -32.3% NET REVENUES 6,141 9,403 (3,262) -34.7% EBITDA (47) 1,080 (1,127) n.m. EBIT (292) 869 (1,161) n.m. FISICAL YEAR ENDING 30TH JUNE SOURCE DIGITAL BROS REDUCTION OF VIDEO GAMES S
Slide 36: Other Activities - FY 2019 H1 Actual
OTHER ACTIVITIES - FY 2019 H1 ACTUAL €/1000 2019 YTD 2018 YTD CHANGE CHANGE % GROSS REVENUES 231 404 (173) -42.8% NET REVENUES 231 303 (72) -24.0% EBITDA (244) (484) 240 -49.6% EBIT (284) (676) 392 -58.0% FISICAL YEAR ENDING 30TH JUNE SOURCE DIGITAL BROS DFS FANTASFIDA SALES AND DIGITAL BROS GAME AC
Slide 37: Digital Bros S.p.a. contact details
Digital Bros S.p.a. Via Tor tona, 37 20144 Milano, Italia www.digitalbros.com