Stillfront Group Ab · OMXSTO:SF
Stillfront Group Ab — Investor Day (2021)
67 slides from Stillfront Group Ab's investor day presentation, 2021
Slide 1: Taking Stillfront to the next level
Taking Stillfront to the next level
Slide 2: Our mission
OUR MISSION To make a positive impact on people’s life through games
Slide 3: Stillfront Group
STILLFRONT GROUP
Slide 4: “ Pesbabuessbesesea |
“ Pesbabuessbesesea |
Slide 5: Building the leading free-to-play powerhouse
Building the leading free-to-play powerhouse
Slide 6: What we have achieved during the past two years
WHAT WE HAVE ACHIE VED DURING THE PA ST T WO YE ARS Built a ~3x larger Broadened Broadened Diversified company our audience our genres revenue streams Extensive ESG Accelerated Increased # of Market reach program across synergies and new game and Stillops studios collaborations releases platform
Slide 7: Stillfront: A leading free-to-play powerhouse
THE STILLOP S PL ATFORM Stillfront: A leading free-to-play powerhouse STILLBA SE STILL SUITE STILLHUBS STILLFORCE STILLRE ACH Knowledge Shared Tools Distributed Collaborations Global Organic Exchange & Technology Expertise & & Distributed Marketing Growth Platform Services Growth Reach & Initiatives
Slide 8: Reaching our 2023 financial targets
RE ACHING OUR 2023 FINANCIAL TARGETS 100 100 games channels 10bn 35% SEK in revenues adjusted EBIT margin 100 100 million MAUs markets
Slide 9: STILLFRON
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Slide 10: Capital Markets Day 2021 - Moonfrog Labs, India
Capital Markets Day 2021 Moonfrog Labs, India
Slide 11: The Indian Gaming Market
The Indian Gaming Market • One of the fastest growing gaming markets in the world • Estimated to be at 1.88 billion USD out of which mobile gaming accounts for 1.5 billion USD (88%) • Gaming is expected to grow to 5 billion USD by 2025 India Gaming Report - Boston Consulting Group & Sequoia Capital,
Slide 12: The Indian Gaming Market
The Indian Gaming Market Three main factors fueling growth: 1. Large user base – 300m mobile gamers and growing 2. Gaming friendly devices - Average of 2 smartphones/household 3. Cheaper, faster, better internet - 46% users connect at > 12 Mbps India Gaming Report - Boston Consulting Group & Sequoia
Slide 13: Moonfrog's Successful Journey
Moonfrog’s Successful Journey Oct ‘13: Moonfrog founded TPG Between Jan-Dec ’16: July ‘18: Acquired Jalebi (since 2020: May ‘14: Teen Patti Gold • 3x MAU to 6.5m scaled to c.4m MAU) Continued released • 3.5x paying players growth across titles 2013/14 2015 2016 2017 2018 2019 2020 2021 Apr ‘15: $15m
Slide 14: Moonfrog Overview
Moonfrog Overview • Founded in 2013, one of India’s fastest growing gaming companies and social businesses • Moonfrog is a team of c.160 with offices in India and Bangladesh • A portfolio of core top-tier games, with approx. 6m DAU in top two titles: • Ludo Club: a high-growth global board game titl
Slide 15: Popular Titles
Popular Titles
Slide 16: Greetings from Team Moonfrog
Greetings from Team Moonfrog
Slide 17: Stillfront's model
Stillfront’s model From acquisitive to organic growth
Slide 18: Acquired since 2019
ACQUIRED SINCE 2019 CRUSH THEM ALL
Slide 19: Continued solid M&A pipeline
Continued solid M&A pipeline with initially assessed ~120 good fit, with potential for an acquisition in the near/mid-term studios Genre, audience and platform broadening to improve diversification and further strengthen our portfolio with initially assessed Current market sentiment ~110 good fit, w
Slide 20: M&A sourcing and project execution
M&A SOURCING Often the discussions with new studios have been ongoing for a long time Network of Opportunities Networking at Screening for members from the from sell-side gaming fairs and new studios Stillfront family advisors events Project execution phase typically 3-6 months in total M&A PROJECT
Slide 21: Our organic studios since 2019
OUR ORGANIC STUDIOS SINCE 2019 Last two years: +27% The 11 studios that made up Stillfront (Total games market: +18%)* going into 2019 have had combined growth that is significantly faster than the underlying market. Q3’21 Q3’19 Growth driven by stable and strong performance from evergreen titles an
Slide 22: Case study: ERepublik Labs
C A SE STUDY: EREPUBLIK L ABS Last two years: +77% Q3’21 • Acquired by Stillfront in May 2017 • Successfully focused on scaling key title War & Peace Q3’19 • Benefited from knowledge-sharing on live ops and marketing • Further developed the War & Peace engine • Working on additional titles • Potenti
Slide 23: Case study: Playa Games
C A SE STUDY: PL AYA GAME S Last two years: +157% Q3’21 • Acquired by Stillfront in December 2018 • Shakes & Fidget delivering at all-time-high levels in its 12th year Q3’19 • Successfully scaled mobile version since joining Stillfront • Evaluating new potential game projects on group engines 2019Q1
Slide 24: Case study: Dorado Games
C A SE STUDY: D OR AD O GAME S Last two years: +279% Q3’21 • Acquired by Stillfront in June 2014 • Difficulties reaching scale with its game portfolio • Partnered with Bytro Labs, launched mobile version of Conflict of Nations: WW3 on Bytro’s grand strategy game engine Q3’19 • CoN: WW3 has since its
Slide 25: Cross-platform product strategy and evergreen games
revenues user acquisition funnel original platform revenues Mobile enables targeting new Mobile increases engagement in browser and adds additional players and creates a profitable Rarely causes cannibalization of Offering games across platforms is a key component in Stillfront’s product strategy an
Slide 26: STILLFRON
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Slide 27: Candywriter, LLC | November 2021
Candywriter, LLC | November 2021
Slide 28: Candywriter & Stillfront growth journey
Candywriter & Stillfront 2020/2021 Growth Journey Bearing fruit Develop BitLife Initial into an extensible, Use newly Use engine to 2022 and beyond: cross platform text- developed engine develop and acquisition to deliver first Repeat pattern of based narrative deliver new engine localized version s
Slide 29: Inbound Synergies
Inbound Synergies Goodgame Studios We’ve leaned on Goodgame Studios to lend their localization expertise and project management capabilities to make the monumental task of translating a text- based game a reality Kixeye Kixeye has removed the accounting burden from our internal team, while Result: A
Slide 30: Outbound Synergies
Outbound Synergies Moonfrog We have started to provide our expertise in the area of IGA to the rest of the group starting with Moonfrog. We are making our knowledge and skill available to the group ranging from consultation to full waterfall management Goodgame Studios Candywriter: a contributing st
Slide 31: Partnerships that flow
Partnerships that flow
Slide 32: Countless opportunities across 21 studios
More to come! Countless opportunities across 21 studios!
Slide 33: CPO Update
= CPO Update Lad © ¢ o. : a
Slide 34: Sustainable organic growth through product pipeline
Sustainable organic growth through product pipeline Game development projects fuelled by the Stillops platform New game Platform & region Engine shares development expansion
Slide 35: New game development
NEW GAME DE VELOPMENT Soft Launch games genre split >40 ~15% new games worked of internal game on in 2021 developments were canceled Spinoffs & 24% 15 Engine shares 36% games in different Significantly increased the phases of amount of new games soft launch in Q4 and reduced the average cost for dev
Slide 36: Stillfront's support
STILLFRONT’S SUPP ORT Access to reference Support all phases of KPIs in all genres, soft launch and channels and stores sharing of best on mobile, browser practices for common and PC-client challenges Conduct peer reviews Access to 21 studios with group HQ and for collaborations on studio experts in
Slide 37: Spin-off games
DogLife New Match-3 + Build project Iron Order 1919 RPG spin-off game by Candywriter Mash-up spin-off game by Storm8 Strategy spin-off game Bytro Labs
Slide 38: Engine share
ENGINE SHARE • Stillfront is developing and acquiring game engines for sustainable long-term success • A game engine consists of reusable features, tool sets and infrastructure • Using a game engine increases the probability of success and reduce costs, time to market • In Stillfront studios are set
Slide 39: Engine share games
Love and Passion SIEGE: Apocalypse Engine share developed on Nanobit’s narrative engine Engine share developed on Simutronics’ SIEGE engine
Slide 40: Platform & region expansion
PL ATFORM & REGION E XPANSION In 2021, Stillfront further expanded its ability to enable our Studios to grow organically by localizing to new markets and porting to new platforms >100 collaborations Moonfrog is a leading player in India, the world's biggest mobile market in terms of downloads Jawake
Slide 41: Platform and region expansion titles
Albion Online The General Naval Action Mobile version launched in June 2021 Arabic version of Conflict of Nations Free2Play version soft launch planned currently in soft launch for 2022
Slide 42: STILLFRON
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Slide 43: Financial model and set-up
( . Financial mode and set-up.
Slide 44: Stillfront's growth journey
STILLFRONT’S GROW TH JOURNE Y Net revenue per as reported per quarter (MSEK) Q4 2021* IPO 2015 *Mid-point of Q4 2021 guidance
Slide 45: A history of value accretive acquisitions
A HISTORY OF VALUE ACCRE TIVE ACQUISITIONS 1 REVENUE UPFRONT E ARNOUT E ARNOUT YE AR GROW TH 2 CONSIDER ATION PERIOD PAID 3 2013 9-10X Undisclosed N/A N/A 2014 >10X Undisclosed N/A N/A 2016 2-3X 0.9 MUSD 1 year 0.8 MUSD 2016 >10X 4.5 MUSD 3 years 12.5 MUSD 2017 3-4X 7.5 MEUR 3 years 3 MEUR 2017 1-2X
Slide 46: M&A at attractive multiples
M&A AT AT TR ACTIVE MULTIPLE S Studios acquired after 2013 with earnout periods not extending beyond 2021 (at latest) 1 4.9x2 Total consideration paid in equity Total consideration paid in cash Total LTM EBITDA LTM Q3 Q3 2021 from the EBITDA same studios 1. Goodgame Studios not included, 2. The expe
Slide 47: Stillfront's financing model
STILLFRONT’S FINANCING MODEL: HOW WE FINANCE OUR GROW TH $ Cash Debt Earnout generation financing considerations
Slide 48: How we finance our growth: cash generation
HOW WE FINANCE OUR GROW TH: C A SH GENER ATION Rapid growth in Free Cash Flow… …with limited dilutive impact to shareholders MSEK, LTM LTM 4.8x 3.0x 0,52 0,50 2,77 0,46 0,45 2,45 2,37 2,35 0,40 0,34 0,29 0,30 1,74 0,25 991 1,30 865 773 810 0,85 0,92 0,69 532 373 216 238 171 Q3 2019 Q4 2019 Q1 2020 Q
Slide 49: How we finance our growth: debt
HOW WE FINANCE OUR GROW TH: DEBT Access to Bond market with improved terms… …and 3.75 SEKbn bank facility create financial flexibility Bonds, MSEK RCF, MSEK 5,00% 1 500 4,75% 3 750 3,47% 2,75% 600 1 600 500 500 (Tap issue) 900 2018 - 2022 2019 - 2024 2019 - 2024 2021 - 2025 2019 2020 Jan 2020 Dec In
Slide 50: How we finance our growth: the earnout model
HOW WE FINANCE OUR GROW TH: THE E ARNOUT MODEL Q2 2021 LTM Q2 2021 LTM cash EBITDA 1 Tax FCF Equity earnout - Tax paid Total earnout paid Cash EBITDA from studios in Q2 2021 with 2021 = Free cash Cash (for the year earnouts flow earnout 2020) 1. Cash EBITDA is defined as EBITDA excluding capex and d
Slide 51: Stillfront's finance hubs
Stillfront’s finance hubs
Slide 52: The role of finance hubs
THE ROLE OF FINANCE HUBS STILLFRONT’S 3 FINANCE HUBS • The finance requirements of a listed company is the biggest change for a studio acquired by Stillfront • Stillfront’s finance hubs handle: • IFRS and local GAAP reporting including internal controls • FP&A • Taxation • Leading/support on group a
Slide 53: Key benefits of the distributed finance hub model
KE Y BENEFITS OF THE DISTRIBUTED FINANCE HUB MODEL 1. Distributed model with regional hubs enables the studios to free up time to focus on core business 2. Hub structure creates scalability of finance expertise 3. Efficient reporting and control processes enable for efficient M&A processes and fast
Slide 54: Finance hubs' key role in M&A processes
Finance hubs’ key role in M&A processes • The regional finance hubs play active roles in Stillfront’s M&A projects across the globe • Finance deal lead • Pro forma • Integration • Example of merger integration: Acquisition of Sandbox Interactive • Three simultaneous ongoing M&A processes (Sandbox, S
Slide 55: STILLFRON
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Slide 56: Building a leading hub for performance marketing
Building a leading hub for performance marketing
Slide 57: Stillhubs: Leveraging expertise within the Group
STILLFRONT: Stillhubs: Leveraging A leading free-to-play- powerhouse expertise within the Group S T I L L B AS E STILLSUITE S T I L L HU B S S T I L L F OR C E S T I L L R E AC H VISION Knowledge Shared Distributed Collaborations Global Exchange Tools& Expertise & & Distributed Marketing • inhouse f
Slide 58: Marketing hub scale metrics
Used to manage complexity >1 $m 5 platforms million installs per month ad spend per month (Desktop, Android, iOS, Windows, Steam) +10 games currently World wide 30+ marketing traffic partners 109 marketing art tickets per month >150 data sources 109 impressions per month
Slide 59: Broad experience in relevant traffic sources
Broad experience in relevant traffic sources
Slide 60: We love great ads
We ❤ great ads.
Slide 61: Specialist departments while maintaining scalability with game teams
Specialist departments while maintaining scalability with game teams. Shared Teams Mkt Analytics Influencer & Paid user AppStore Marketing Art / Data Content acquisition Relations Science Marketing Game Studios The Stillfront Teams Marketing RTB & Re- Conversion BizDev Studio Tech engagement Network
Slide 62: Full marketing service
Full marketing service CORE SERVICES ADDITIONAL SERVICES Scale UA for a live game Soft launch a new game Make creative work • Strategy: channels, geographies, • SL planning • Creative strategy & ideation creatives, messaging • Click and asset testing • Creative performance analysis • Network / campa
Slide 63: Unlocking great benefits for each studio
Unlocking great benefits for each studio Top results Time to market Economy of scale Collaboration • Studios can focus on • Fast & accessible • Standardized data & • Benchmarks making great games scaling for studios analytics, e.g. LTV modelling • Group knowledge • Performance • Experience leads to
Slide 64: How Goodgames managed the iOS14.5+ well
How Goodgames managed the iOS14.5+ well • Healthy mix of Android and iOS: 65% NOT directly affected • Impact on networks differs – diversification helps • last 6m we had 30+ networks active • top network has ‘only’ 35% of spend • Best practice setups • Embrace the new reality – there still is data:
Slide 65: Future
Future Grow the team with experts from the industry Cover multiple time zones Further data standardization between studios Gaming’s best creative production team Scale our expertise in organic growth, in particular influencer marketing Roll-out to more games for more success
Slide 66: Thank you
THANK YOU
Slide 67: Wrap up and summary
( <x Wrap up and summary | 4