Enad Global 7 Ab · OMXSTO:EG7
Enad Global 7 Ab — Q1 2022 Earnings Presentation
20 slides from Enad Global 7 Ab's earnings presentation, May 25, 2022
Slide 1: Investor Presentation Jan-Mar 2022
I N V E S T O R P R E S E N TAT I O N JAN-MAR 2022
Slide 2: An emerging gaming group with proven expertise
• An emerging gaming group with proven expertise in: • Games-as-a-service • Game development – live service and premium products • Publishing – expertise in physical with growing digital pipeline • Leader in AAA game marketing and asset development • Solid foundation of recurring revenue and profit
Slide 3: Financial Highlights from the Quarter
Financial Highlights from the Quarter • Strong results above expectations • Net Revenue of SEK 452.2 (303.6) million • 49% y-o-y growth • Solid organic growth of 25%, excluding Innova and Magic Online • Adjusted EBITDA of SEK 112.6 (80.7) million, representing a 25% margin • Third consecutive quarte
Slide 4: Operational Highlights from the Quarter
Operational Highlights from the Quarter • Growing live games portfolio and our foundation of recurring revenues • Live games portfolio up to 10 with Magic Online acquisition in Jan 2022 • Excluding 12 games on Innova platform • Increasing new game pipeline with Fireshine’s growing 3rd party indie ga
Slide 5: Russia Risks, Impact and Mitigation Plan
R U S S I A R I S KS , I M PAC T A N D M I T I G AT I O N P L A N
Slide 6: Business Impact from Russia related Risks
Business Impact from Russia related Risks • Innova primarily operates in Russia and the surrounding region • Facing significant challenges with the on-going conflict Business Impact on Innova Business Impact on EG7 • Loss of active player base • Impact is almost entirely isolated to Innova • Currenc
Slide 7: Equity Capital Markets Impact on EG7
Equity Capital Markets Impact on EG7 Stock Price and Valuation History Relative Impact Comparison Ukraine Q4 Earnings Innova Sale Plan 3.5x PF AEBITDA Invasion Beat Announcement As of 24-05-2022 Outsized impact compared to the actual business and financial Note: PF AEBITDA is for LTM 31-03-2022 excl
Slide 8: Innova Divestiture
Innova Divestiture Transaction Summary Pro Forma P&L • Sale to Innova’s existing leadership team MSEK Q1 2022 LTM Q1 2022 • Transaction value of EUR 32 million Amount % Group Amount % Group • Fully financed via a vendor loan from the group Group Total • Target closing summer 2022 Net Revenue 452.2 1
Slide 9: Post Transaction Outcome
Post Transaction Outcome • Relatively small setback with Innova carve out • Innova has not been core to our future plans since the management transition last fall • In Q1, contributed only 11.6% of Net Revenue and 5.4% of Adjusted EBITDA • No more Russia related risk and “baggage” • No negative impa
Slide 10: Q1 2022 Financial Discussion
Q1 2022 FINANCIAL DISCUSSION
Slide 11: Net Revenue and Adjusted EBITDA
Net Revenue and Adjusted EBITDA MSEK 1 819 QUARTERLY LTM 1 671 573 1 293 452 409 384 964 304 718 429 397 290 118 113 199 109 111 89 81 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 Net Revenue Adjusted EBITDA Net Revenue Adjusted EBITDA
Slide 12: Net Revenue by Segment
Net Revenue by Segment MSEK QUARTERLY NET REVENUE LTM NET REVENUE 759 866 342 159 197 582 168 90 503 470 912 953 216 250 231 256 711 214 462 248 1Q21 2Q21 3Q21 4Q21 1Q22 1Q21 2Q21 3Q21 4Q21 1Q22 Game Service Game Service QUARTERLY NET REVENUE MIX LTM NET REVENUE MIX 30% 39% 44% 43% 52% 45% 45% 48% 6
Slide 13: Game Segment – Q1 2022 Net Revenue and Adj EBITDA Mix
Game Segment – Q1 2022 Net Revenue and Adj EBITDA Mix MSEK 1Q22 Game Segment Net Revenue Mix 16 ; 6% 1 ; 1% 26 ; 10% Big Blue Bubble Daybreak Piranha Toadman + AMG 212 ; 83%
Slide 14: Service Segment – Q1 2022 Net Revenue and Adj EBITDA Mix
Service Segment – Q1 2022 Net Revenue and Adj EBITDA Mix MSEK 1Q22 Service Segment Net Revenue Mix 54 ; 27% 53 ; 27% Innova Fireshine Petrol 90 ; 46%
Slide 15: Target and guidance
2022 Mar. Incl: Target and guidance 20MSEK MTGO MSEK YoY Growth YoY Growth LTM Net Revenue, excluding Innova MSEK 1 549 28% 25% 1 801 QUARTERLY 1 601 1 423 573 1 401 1 201 452 409 384 1 001 304 801 601 401 118 113 109 89 201 81 1 Apr May Jun Jul Aug Sep Okt Nov Dec Jan Feb Mar 1Q21 2Q21 3Q21 4Q21 1Q
Slide 16: Strong balance sheet
Net Debt to EBITDA ratio and cash MSEK 1 000 0,8 Q1 cash flow 800 0,6 449 0,4 600 557 Cash OB 484 0,3 Operation +50 0,2 400 Investing - 38 - Financing - 48 200 Currency fluctuations +1 - 0,2 Delta Cash - 35 - - 0,4 Cash CB 449 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 - 200 - 0,6 Cash debt Cash at han
Slide 17: Looking Ahead
LO O K I N G A H EA D
Slide 18: Looking Forward
Looking Forward Short-term Medium-term Long-term Value Drivers Value Drivers Value Drivers • Innova divestiture and • Major updates to: • Diversified investments in Russia risk elimination • Magic Online new GaaS products with • Lord of the Rings Online core first party IPs • New game releases 2022
Slide 19: EG7 Investment Highlights
EG7 Investment Highlights • Attractive value – 3.5x LTM PF Adjusted EBITDA (excl. Innova contribution) • Proven track record of delivering on results – 3rd consecutive quarter of meeting or beating • Unique risk-reward balance especially at current depressed valuation • Strong growth, profitability
Slide 20: Q&A
Q&A