Ten Square Games Sa · GPW:TEN
Ten Square Games Sa — FY2021 Earnings Presentation
38 slides from Ten Square Games Sa's earnings presentation, Mar 31, 2022
Slide 1: 2021 Full Year Results
2021 full YEAR Results March 31st, 2022
Slide 2: Q4 2021 Highlights
O04 2021 HIGHLIGHTS
Slide 3: Q4 2021 Highlights
Q4 2021 HIGHLIGHTS 1 Business performance 2 Focus on key strategic pillars Q3/Q4 Bookings (PLN M) Core portfolio PLN +6% q-o-q PLN 157.7M 167.7M New games Fishing game Q3/Q4 Adj. EBITDA* (PLN M) M&A PLN +23% q-o-q PLN Analyzing a handful of interesting opportunities 54.9M 67.4M at different stages o
Slide 4: Performance update
Performance update
Slide 5: Performance of Clash games – Fishing & hunting
Performance of Clash games – Fishing & hunting Clash Family bookings (PLN M) 200 Fishing Clash Hunting Clash 3.0 12.2 150 26.8 • Hunting Clash 30.3 28.2 30.4 success was crucial M PLN 100 to diversification of 158.0 164.2 155.4 131.6 120.2 TSG Clash Family 50 84.7 114.6 113.1 57.8 67.7 • Following 3
Slide 6: Fishing Clash performance (excl. FC China)
Fishing clash performance (excl. FC china) Bookings and marketing expenses (PLN M) 60 Bookings Marketing expenses 50 40 M PLN 30 55.9 57.8 59.8 57.6 53.8 50.6 48.7 49.1 48.1 44.3 44.4 42.9 44.4 20 37.3 39.1 39.0 38.2 39.2 35.7 40.3 32.7 35.5 32.8 32.7 31.7 28.6 24.4 10 19.2 14.1 11.4 12.4 9.6 10.4 8
Slide 7: Fishing Clash China
Fishing clash China Expansion of Fishing Clash in China Successful Launch and Performance since then App store TOP sport GAMES IN CHINA (Jul 21’ – Feb 22’, APP ANNIE) • +3M downloads since 07 2021 FC China Launch launch • TOP 3 in terms of downloads on App Store in Sport Games category (Jul 21’ – Fe
Slide 8: Hunting Clash performance
Hunting Clash performance Bookings and marketing expenses (PLN M) Bookings 14 • Bookings in Q4 2021 returned to a growth Marketing expenses trajectory, achieving the best quarter and the best month (December) in game’s history 12 • Focus in Q4 – further team scale-up to 70 people, 11.1 11.1 11.3 11.
Slide 9: Hunting Clash – performance picking up
HUNTING CLASH – PERFORMANCE PICKING UP Average Revenue per Weekly Active User – first 80 weeks after global launch 7.0 Hunting Clash Fishing Clash 6.0 5.0 4.0 PLN 3.0 2.0 1.0 0.0 1 11 21 31 41 51 61 71 AI 9
Slide 10: Leading position with ca. 90% stake in our market segments
leading position with ca. 90% stake in our market segments FC market share HC market share 100% 100% 90% 90% 92% 80% 80% 88% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Fishing Clash Fish Island Hunting Clash Deer Hunter Classic Ace Fishing Let's Fish: Sport Fishing Fishing Strike
Slide 11: Rortos Q4 2021 Snapshot
RORTOS Q4 2021 Snapshot Rortos update • Acquired in June 2021, Rortos is the largest player in a highly Performance in line with our investment case – 2021 1 performance of Rortos was in line with our assumptions attractive mobile flight simulation segment • 3 main live titles and 1 title under deve
Slide 12: Growing product diversification
Growing product diversification Q4 2020 Q2 2021 Q4 2021 11.8% 6.2% 4.9% 4.2% 2.1% 19.6% 18.2% 74.2% 72.7% 86.1% Fishing Clash % Hunting Clash % Rortos games % Others % WG 12
Slide 13: Production pipeline update
PRODUCTION PIPELINE UPDATE Expected Game Description / Current status soft launch • Social based competitive game • Advanced final production preparing the game for the soft launch in the next few Q2 2022 weeks • Military flight simulator • Advanced final production preparing the game for the soft l
Slide 14: Investment in production capacity
investment in production capacity Dec 2019 Dec 2020 Dec 2021 Financials Bookings (PLN M) 242 626 650 Adjusted EBITDA (PLN M) 86 230 234 Headcount per team Doubling production Game Development 142 202 297 capacity since Dec 2019 Game Support 12 31 38 Improved Customer support Ability to accommodate B
Slide 15: Financial results
Financial results
Slide 16: Bookings breakdown and dynamics
Bookings breakdown and dynamics Bookings (PLN M) Bookings breakdown – geographies and products in Q4 2021 70 5% 60 North America 15% Europe 43% 50 Asia 40 37% Others 30 5% 20 Fishing Clash 4% 18% 10 Hunting Clash 0 Rortos games 73% Feb-21 Jan-20 May-20 Jun-20 Jul-20 Sep-20 Jan-21 May-21 Jun-21 Sep-2
Slide 17: Operating expenses analysis
Operating expenses analysis Operating expenses excluding selling costs1 Main selling costs1 50 8.8% 10% 140 100% 75% 45 8% 80% 120 55% 55% 59% 5.0% 53% 54% 40 6% 51% 47% 60% 3.6% 3.8% 2.6% 2.6% 3.1% 100 35 2.2% 4% 40% 30 2% 72.8 80 20% PLN M PLN M 25 0% 40.4 32.3 40.1 42.4 0% 13.8 60 33.9 23.0 20 5.
Slide 18: Standardized operating results
Standardized operating results Adjusted EBITDA Net profit IFRS 70 90 Adj. EBITDA Adj. EBITDA/bookings 60% • Adjusted EBITDA 60 amounted to PLN 67.4M 80 50% in Q4 2021 (+23% qoq) 70 43.5% 50 41.1% 41.4% 38.5% 40.2% • Adjusted EBITDA in 2021 60 40% 34.8% increased by 2% and 40 reached PLN 234.2M PLN M
Slide 19: Strong balance sheet with significant cash pool
Strong balance sheet with significant cash pool Balance sheet (M PLN) 600 fixed assets cash 81.8 other current assets equity 64.3 400 66.0 liabilities 82.9 107.6 139.6 71.0 • Rortos acquisition (PLN 200 73.2 210M) financed by cash 332.6 39.9 69.2 236.6 284.7 291.2 298.9 in Q3 2021, resulting in 153.
Slide 20: High profitability and cash generation
HIGH profitability and cash generation Cash flow (M PLN) Profitability and Cash Flow KPIs CF operating CF investment CF financial Adjusted EBITDA Free Cash Flow - Operations 250 Adj EBITDA/Bookings Adj EBITDA conversion ratio to FCF OP 300 100% • High profitability and 150 free cash flow 90% 193.7 2
Slide 21: Gamesture investment
Gamesture investment
Slide 22: Gamesture – Minority investment
Gamesture – Minority investment Business description Investment rationale • Poland-based ca. 70-person free-to-play mobile gaming studio specializing in Strong management and the wider team – ca. 70 the RPG genre founded in 2014 1 employees experienced in developing successful free- to-play games, w
Slide 23: Strategic overview
Strategic overview
Slide 24: Strategy status
Strategy status 2011 2017 2020 2021 2022 2023+ The Next Big Clashes Play Sports Wroclaw Core Game More Sims Development Additional International Studios Studios Expansion Expansion More New Games WARSZAWA BERLIN BUCHAREST Fishing game M&A More M&A Talent pool 110 215 318 503* ca. 600 Dec 2017 Dec 20
Slide 25: 2022 year of focus
2022 year of focus CORE PORTFOLIO Fishing Clash and Hunting Clash road-map execution after strengthening teams, allowing to further develop our core products. NEW PRODUCTS Further diversification of portfolio thanks to abundant development portfolio with 4 titles planned for launch in 2022. COST BAS
Slide 26: Investor's calendar
Investor’s calendar Company news flow: • Q1 2022 Sales Update – early April 2022 • Q1 2022 Financial Report – May 23rd 2022 (conference on May 24th) BP 26
Slide 27: Q&A session
Q&A session
Slide 28: Thank you!
Thank you! IR contact ir@tensquaregames.com
Slide 29: Backup
backup
Slide 30: Profit and loss report
Profit and loss report Selected positions in k PLN 2019 Q1’20 Q2’20 Q3’20 Q4’20 2020 Q1’21 Q2’21 Q3’21 Q4’21 2021 Revenues from sales 241,133 95,018 169,622 179,259 134,296 578,195 174,114 164,885 147,951 147,095 634,045 Fishing Clash 206,501 84,678 158,044 164,256 155,357 562,335 131,659 114,983 11
Slide 31: Balance sheet
Balance sheet Selected positions in k PLN Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 ASSETS Fixed assets 3,733 4,433 5,176 4,936 11,215 11,604 14,395 16,101 19,091 23,994 291,171 298,866 Receivables 16,249 15,652 24,012 20,738 34,447 58,724 57,205 47,589 57,331 45,946 50
Slide 32: Cash flow report
Cash flow report Selected positions in k PLN Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 OPERATING ACTIVITIES Profit before tax 12,674 15,944 22,316 33,691 39,192 28,814 65,849 37,091 58,432 37,034 31,291 35,225 Total adjustments -299 -1,589 -7,197 671 -7,735 -6,675 2,220
Slide 33: Results reconciliation
Results reconciliation Q4 2021 bookings to IFRS revenues (PLN M) Q4 2021 motivation scheme non cash costs (PLN M) 12 10 Pre 2021 motivation scheme 8 2021-2022 motivation scheme PLN M PLN M 6 General Administrative costs 4 Costs of services sold 2 Selling costs 0 Programme type PnL impact 33
Slide 34: Method of determining adjusted EBITDA
Method of determining adjusted EBITDA Selected items of the Profit and Loss Statement in k PLN Results Q4 2021 Operating profit IFRS 40,413 Amortisation +2,360 Write-down for impairment +0 EBITDA IFRS 42,773 Corrections: Non-cash impact of the incentive programs +10,023 Deferred result (unused virtu
Slide 35: Accounting principles for revenues – IFRS 15
Accounting principles for revenues – IFRS 15 Virtual currency • Payment -> a player purchases virtual currency Payment Sales revenue • Revenue -> the player uses the virtual currency to purchase a +/ - virtual goods (e.g. rods, lure packs) Deferred revenue/ Unearned revenue • Deferred revenue -> unu
Slide 36: Marketing expenses policy
Marketing expenses policy Marketing expenses „We invest in marketing provided we get positive returns throughout user lifetime” Marketing expenses model cumulative approach • The Group invests in marketing at point „0”. Cohort acquired in this period analyzed throughout user lifetime (period „0” to
Slide 37: Rortos recognition
RORTOS RECOGNITION Separate financial statement Amount Consolidated financial statement Amount Cash payment EUR 46,696k Goodwill EUR 34,936k Discounted earn-out payments EUR 9,153k Value of adjusted net assets EUR 20,913k Value of acquired shares EUR 55,849k Settlement value EUR 55,849k FX EURPLN ra
Slide 38: Legal disclaimer
Legal disclaimer • Neither this presentation (the “Presentation”, references to which shall be deemed to include any information which has been or may be supplied in writing or orally in connection herewith or in connection with any further enquiries) nor any copy of it nor the information contained