Embracer Group Ab Class B · OMXSTO:EMBRAC_B
Embracer Group Ab Class B — THQ Nordic — Investor Day (May 2018)
41 slides from Embracer Group Ab Class B's investor day presentation, May 16, 2018
Slide 1: Capital Markets Day
Capital Markets Day May 16, 2018 1
Slide 2: Today’s agenda
Today’s agenda Section Time 1. Company update part 1 13:00-13:15 - Intro, welcome, agenda - Recap THQ Nordic, Koch Media acquisition, synergies 2. Koch Media presentation 13:15-14:00 3. Coffee break 14:00-14:15 4. Deep Silver – Line-up presentation 14:15-14:35 5. THQ Nordic – Line-up presentation 14
Slide 3: Today’s presenters
Today’s presenters LARS KLEMENS REINHARD EUGENIO WINGEFORS KUNDRATITZ GRATL VITALE Group CEO & Co-Founder CEO CFO Director Games Development THQ Nordic AB (publ) Koch Media Koch Media Deep Silver CRAIG REINHARD MARIO MCNICOL POLLICE GERHOLD Managing Director Northern Business & Product International
Slide 4: Recap of THQ Nordic history
Recap of THQ Nordic history What did we say at the IPO? Journey of THQ Nordic Accelerate business model and growth by utilizing the Revenue, SEKm 2018 Feb: THQ Nordic platform: Koch Media 2 933 acquired • Accelerate Asset Care and development and launch of sequels • Additional acquisitions of IPs •
Slide 5: THQ Nordic – A European player of great scale
THQ Nordic – A European player of great scale Additional operational leverage with the acquisition of Koch Media THQ Nordic group structure Diversified revenue base Net sales split for THQ Nordiq and Koch Media, 2017 9m Group HQ Karlstad, Sweden Games 5 Group CEO/CFO 36% Partner Operational HQ Opera
Slide 6: Rationale for Koch Media acquisition
Rationale for Koch Media acquisition ü AAA intellectual property rights Saints Row and Dead Island ü Long-term exclusive license within Games for “Metro” based on books by Dmitry Glukhovsky ü 4 AAA titles in production including announced Metro Exodus and Dead Island 2 ü 2 AAA studios Deep Silver Vo
Slide 7: Synergy potential with Koch Media
Synergy potential with Koch Media Operational synergies from combining two businesses – no cost cutting! → Distribution of → Implementing → Development → IP usage → Shared tech → Business THQ Nordic Asset care resources / and intelligence / titles across strategy on knowledge development business va
Slide 8: Dr. Klemens Kundratitz, Co-Founder and CEO Koch Media
Dr. Klemens Kundratitz Co-Founder and CEO Koch Media 8
Slide 9: 1. Introduction
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Slide 10: A Global Footprint
A Global Footprint Staff by region 221 102 783 6 5 Koch Media Koch Media Nordics Benelux 145 154 148 67 Deep Silver 116 Deep Silver Deep Silver Volition Dambuster Fishlabs 161 Studios 45 23 Germany Austria UK Koch Films Koch Media US Other Germany United Kingdom 131 18 Koch Media 6 Koch Media Deep S
Slide 11: 2. Games
2. GAMES 11
Slide 12: Deep Silver Business
Deep Silver Business ~350 internal developers ~415 external developers ~340 internal ~340 internal Digital ~340 internal developers developers Sales developers 15 IPs Retail Digital Own Products 14 Game development Partner Products projects Selected Own IP and long-term Licenses Selected Publishing
Slide 13: Deep Silver – Game History
200 9 201 0 201 201 1 2 201 3 Deep Silver – Game History 201 201 4 5 201 201 6 7 201 8 13
Slide 14: Deep Silver Development Landscape
Deep Silver Development Landscape INTERNAL STUDIOS SELECTED EXTERNAL STUDIOS Deep Silver Volition, Champaign, Illinois, USA 4A Games, Malta and Kiev / Ukraine • Headcount: 148 • Developers: 150 • Developers: 132 • Key Expertise: FPS, Core tech, VR, Story and Immersion expertise • Key Expertise: 3rd
Slide 15: Technology Landscape and Product Development Mission
Technology Landscape and Product Development Mission Development mission Technology • Deep Silver is engaged in the development Middleware Engines and global publishing of AAA digital games on • Ikinema • Unreal Engine console and PC platforms • Audiokinetics • Cry Engine • We aim to excite gamers a
Slide 16: Stage Gate Process for Deep Silver Games
Stage Gate Process for Deep Silver Games → Business process envelop for methods and tools to develop → Significant up front time devoted to research and → Supported by strong project management ensuring products product definition that the scope, timing, cost and quality project requirements are ach
Slide 17: Deep Silver GamesLab – User Research
Deep Silver GamesLab – User Research → Understanding player behavior through qualitative and quantitative research → This internal service is utilized during all AAA game developments in order to help understand gamer behavior UX RESEARCH TELEMETRY METHODOLOGY KNOWLEDGE EXCHANGE Locations: Biometric
Slide 18: 3. Partner Publishing & Film
3. PARTNER PUBLISHING & FILM 18
Slide 19: Partner Publishing
Partner Publishing Games Software – Partner Publishing Non-Games Software Partner Publishing • Koch Media – #1 European Publishing Partner • Product categories include retro gaming consoles, • 50+ Publishing Partners games merchandise, head-sets, games accessories, • Providing territorial publishing
Slide 20: Film Publishing
Film Publishing § Independent publisher and Cinema 49,0% distributor of films in GAS and Italy 11,3% § Active in all channels: Cinema, ~1,500 film titles Home Video Physical Video, Pay- and Free-TV, ~250 license partners Digital (TVOD / SVOD) A diversified film library TV ~ 15 theatrical releases §
Slide 21: Console Games – Physical Landscape
Console Games – Physical Landscape Digital as a % of Physical Full Games – Growing But Still Minority Physical Console Software Market in CY2017 in Koch 50% European Direct Countries* 35% 39% at Retail Value 27% 26% 21% 17% 19% 17% 20% 14% 16% 20% 18% 12% 14% 11% Total EUR 3.875bn 7% 2015 2016 2017
Slide 22: Vendor Base – The Waiting Game
Vendor Base – The Waiting Game Top 10 Publisher Segment (€) Top 11-20 Publisher Segment (€) Top 21-30 Publisher Segment (€) (Note 1) 4000 m 100% (Note 2) 60 m 100% 200 m 60% 50 m 80% 80% 3000 m 50% 150 m 40 m 60% 40% 60% 2000 m 30 m 40% 100 m 30% 40% 20 m 1000 m 20% 20% 50 m 10 m 20% 10% 0m 0% 0m 0%
Slide 23: Leading European Publishing Partner
Leading European Publishing Partner Northern Europe Central Europe Southern Europe • Own direct distribution in the UK, • Own direct distribution in Germany, • Own direct distribution in France, Benelux, Scandinavia Austria, Switzerland Spain, Italy • Offices in Theale (West of London), • Offices in
Slide 24: Complete Publishing for own IP and Partners
Complete Publishing for own IP and Partners Product related publishing tasks Commercial publishing tasks 360° Mastering the complexity of PC & Console global game publishing since Publisher more than 20 years PR / Social Development Localisation Digital Sales Media Support Deep Silver Studios Manufa
Slide 25: Complete Publishing for own IP and Partners
Complete Publishing for own IP and Partners Product related publishing tasks Commercial publishing tasks • Coordinate / maximize global pre- and day1 sales & • Localize text and voices marketing efforts • Support partner localisation • Leverage deep 1st Party relationships globally • Localisation QA
Slide 26: Digital Publishing Excellence
Digital Publishing Excellence Koch Media’s Digital Team is in charge of the growing digital segment of the publishing operation The role of the unit is to provide marketing & sales strategy, planning and execution. It coordinates all other functions to achieve the defined revenue & discoverability g
Slide 27: 4. Group Functions
KOCH MEDIA GROUP FUNCTIONS
Slide 28: Group Operations and Finance
Group Operations and Finance OPERATIONS CENTRAL FINANCE FUNCTIONS The Koch Media group is divided into Games and Partner Publishing & Films 330,425 • Controlling / reporting / IFRS consolidation customer orders CY2017 Koch Media Games will be reported as part of THQ Group Games and Partner • Treasur
Slide 29: Coffee Break
COFFEE BREAK 29
Slide 30: Deep Silver Line-up presentation
Deep Silver Line-up presentation Mario Gerhold International Marketing Director Games Koch Media 30
Slide 31: Placeholder – Line-up presentation
Placeholder – Line-up presentation 31
Slide 32: THQ Nordic Line-up presentation
THQ Nordic Line-up presentation Reinhard Pollice Business & Product Development Director THQ Nordic GmbH 32
Slide 33: Placeholder – Line-up presentation
Placeholder – Line-up presentation 33
Slide 34: Company update, part 2
Company update, part 2 Lars Wingefors CEO and Co-founder THQ Nordic AB (publ) 34
Slide 35: Growth strategy
Growth strategy ACQUISITION OPPORTUNITIES 1. IPs 2. Studios 3. Publishers ORGANIC GROWTH PILLARS: 1. Accelerate asset care 2. Execute AAA / sequel and publishing releases 3. Pro-active partnership agenda 4. Explore IP licensing and mobile IPO 2016 Future 35
Slide 36: Asset care strategy
Asset care strategy DISTRIBUTION EXPANSION ASSET CARE SEQUELS + Add digital channels + Port to new platforms + Release sequels First Game " Sequel I " Sequel II " Sequel III + Release remasters, new versions and patches Version " Remaster II + Add and reactivate physical channels Version Version " R
Slide 37: How we increase the value of an acquired game
How we increase the value of an acquired game Revenues and net contribution Revenues and net contribution Revenues and net contribution 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 • Acquired for EUR 2.2m in 2013, investments of • Acquired for EUR 0.6m in 2013, investme
Slide 38: Fragmented market brings consolidation potential
Fragmented market brings consolidation potential Competitive landscape Illustrative Global games market 2017 USD ~110bn (PC Size Internationally diversified and console stands USD ~58bn) developers and publishers Non-consolidated gaming market Many small and local independent studios with 1-2 IPs Co
Slide 39: Pro-active M&A agenda
Pro-active M&A agenda M&A is one of the core pillars of THQ Nordic Group’s growth strategy within within Group Level Development studios/products within console/PC-gaming with stickiness and recurring incomes ü ü ü Complementing development studios (with or without own IPs) ü ü ü Publishers or asset
Slide 40: Selected IPs with sequel or spin-off potential
Selected IPs with sequel or spin-off potential Above examples of IPs are illustrative and not confirmed for sequel, spin-off or any other development 40
Slide 41: Future financing of the Group
Future financing of the Group Conservative view of debt usage for the Group ü THQ Nordic Group will maintain a strong balance sheet to maximize flexibility for organic and inorganic growth opportunities ü The Group will operate with a gross debt, with optimal mix of short and long term financing to