Ten Square Games Sa · GPW:TEN
Ten Square Games Sa — Q1 2023 Earnings Presentation
28 slides from Ten Square Games Sa's earnings presentation, May 23, 2023
Slide 1: Q1 2023 Results
—_ Qu ten square games O01 2023 RESULTS May 234, 2023
Slide 2: Performance
O01 2023 PERFORMANCE
Slide 3: Q1 2023 Performance
Q1 2023 PERFORMANCE Decrease in Q1’23 Core portfolio 1 performance 2 performance 3 One-off events Q4’22 / Q1’23 Bookings -17% Write-down of 2 projects of bookings Q1’23 q-o-q PLN -11% q-o-q PLN TOTAL: PLN 26.6 M 138.6M 123.6M -1% of bookings PLN 11.7 M PLN 14.9 M Q4’22 / Q1’23 Adj. EBITDA q-o-q Empl
Slide 4: Performance Update
PERFORMANCE UPDATE
Slide 5: Fishing Clash performance
Fishing clash performance Bookings and marketing expenses (PLN M) 100 80 60 M PLN 96 84 89 87 ■ 16.6% decrease in bookings q-o-q in Q1’23, due to issues with 40 73 16 13 19 15 technology, Live Ops and user enagagement. 20 11 0 ■ Negative trend continued in April’23 with bookings at the level of 1Q 2
Slide 6: Hunting Clash performance
Hunting clash performance Bookings and marketing expenses (PLN M) 40 30 ■ Stable level of bookings q-o-q in Q1’23 M PLN 20 14 14 33 13 33 32 10 32 11 ■ Smaller amount of new content and number of Live Ops in game in 25 10 April’23 led to continuation of drop in bookings - PLN 7.9 M. 0 ■ New features
Slide 7: Wings of Heroes performance
Wings of Heroes performance Bookings and marketing expenses (PLN M) 8 6 6 5 4 ■ 28% increase in bookings q-o-q in Q1’23 due to high marketing M PLN 4 expenditure, 2 2 1 ■ Increased marketing allowed for thorough tests of product’s 0 0 0 0 0 0 potential 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 ■ Final
Slide 8: Gamesture performance
Gamesture performance 37% stake in Gamesture Gamesture bookings (PLN k) 6 000 +106% March’22 January’23 5 084 1 5 000 25% 12% USD 3.5 M USD 2.7 M 4 097 4 000 3 839 3 599 Gamesture used the resources to invest in marketing 2 which translated into the growth of bookings by 32%vs Q4’22 and by 106% vs Q
Slide 9: Financial Results
FINANCIAL RESULTS
Slide 10: Profit and loss dynamics
Profit and loss dynamics M PLN Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Revenues from sales 150.3 126.6 132.9 131.2 117.4 •1 Drop in bookings, caused mainly by Bookings 142.6 123.5 137.5 138.6 123.6 a weak performance of Fishing Clash which dropped by 16.6% q-o-q 1 Gross profit on sales 134.5 106.5 115.7 111.8
Slide 11: General administrative costs
General administrative costs General administrative costs (PLN k) Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 One-off costs MSOP 7,291 7,294 7,294 9,361 11,305 761 6,033 5,930 6,033 M&A 0 0 3,669 18 1,760 3 1 -3 2 Croatia costs 0 0 2,054 0 0 0 0 0 0 Normal costs Salaries 1,872 3,097 2,284
Slide 12: Structure of bookings
STRUCTURE OF BOOKINGS by product by geography 100% 6% 10% 90% 16% 5% 80% 5% 70% 26% 11% 60% 50% 46% 40% 78% 38% 30% 59% 20% 10% 0% North America Europe Asia Others 1Q'2021 Bookings 1Q'2023 Bookings Fishing Clash Hunting Clash Other Rortos • Portfolio diversification thanks to acquisition of Rortos a
Slide 13: Cash flow generation with a strong cash pool
Cash flow generation with a strong cash pool M PLN Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Adjusted EBITDA 42.1 28.4 35.0 35.3 27.6 Net Cash Flows from Operating Activities 53.4 30.6 31.7 22.3 29.9 Net Cash Flows from Investing Activities (23.7) (15.4) (8.0) (8.4) (14.7) Net Cash Flows from Financing Activiti
Slide 14: Profit distribution to shareholders
profit DiSTRIBUTION TO shareholders PLN 200 M* OF DIVIDEND PAID OUT BY TSG 2022 PROFIT DISTRIBUTION RECOMMENDATION 80.0 72.7 72.3 allocation of almost 100% of consolidated net profit to be paid to shareholders; exceeding 75% threshold of TSG’s dividend policy) 70.0 Proposal of 2022 profit distributi
Slide 15: Current Focus
CURRENT FOCUS
Slide 16: Current focus
Current focus PORTFOLIO PERFORMANCE Focus on the growth of current portfolio: ❖ Fishing Clash – new approach to feature development ❖ Hunting Clash – continuation of successful experiments with Live Ops and new monetization features ❖ Wings of Heroes – coming several months dedicated to building the
Slide 17: A clear strategic focus
a clear strategic focus DEVELOPMENT OF KEY PRODUCTS INTEGRATION OF ACQUIRED ASSETS PROFITABILITY Technical mastery of our games First time user experience New approach to feature development DEPTH OF THE GAME New monetization options Longer New Social for long term players Live Ops game play planes
Slide 18: Investor's Calendar
INVESTOR’S CALENDAR
Slide 19: Investor's calendar
Investor’s calendar Events we’re attending: ■ 7th edition of Future in CEE - ERSTE Consumer & Technology – 1st June ■ 2nd edition Pekao Technology Conference – 6th June ■ Ipopema CEE Conference – 13th June ■ Annual General Meeting of Shareholders – 14th June Company news flow: ■ Q2 2023 Sales Update
Slide 20: Q&A Session
O&A SESSION
Slide 21: Contact details
Contact details: Nina Graboś – IR & PR Director nina.grabos@tensquaregames.com
Slide 22: Profit and loss report
Profit and loss report Selected positions in k PLN 2020 Q1’21 Q2’21 Q3’21 Q4’21 2021 Q1’22 Q2’22 Q3’22 Q4’22 2022 Q1’23 Revenues from sales 578,195 174,114 164,885 147,951 147,095 634,045 150,335 124,143 132,913 131,167 538,558 117,450 Fishing Clash 562,335 131,659 114,983 114,371 121,868 482,882 95
Slide 23: Balance sheet
Balance sheet Selected positions in k PLN Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 ASSETS Fixed assets 11,215 11,604 14,395 16,101 19,091 23,994 291,171 298,866 320,497 326,192 340,728 314,138 297,613 Receivables 34,447 58,724 57,205 47,589 57,331 45,946 50,624 6
Slide 24: Cash flow report
Cash flow report Selected positions in k PLN Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 OPERATING ACTIVITIES Profit/loss before tax 39,192 28,814 65,849 37,091 58,432 37,034 31,291 35,225 30,975 18,289 20,860 (6,685) (16,022) Total adjustments -7,735 -6,675 2,220 4
Slide 25: Method of determining adjusted EBITDA
Method of determining adjusted EBITDA Selected items of the P&L Statement in k PLN Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Operating profit IFRS 55,919 38,696 31,192 40,413 29,392 17,444 21,636 4,220 (14,414) Amortisation +941 +978 +3,305 +2,360 +2,742 +3,725 +3,414 +5,977 +4,978 Write
Slide 26: 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 27: 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 28: 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