Ten Square Games Sa · GPW:TEN
Ten Square Games Sa — FY2023 Earnings Presentation
33 slides from Ten Square Games Sa's earnings presentation, Mar 26, 2024
Slide 1: 2023 Results
—_ Qu ten square games 2023 RESULTS March 26th, 2024
Slide 2: 2023 at a glance
2023 ATA GLANCE
Slide 3: 2023 at a glance
2023 at a glance Focus on Stable Adoption of a Focus Cost profitability of platform for Strategy optimization main products future growth Large updates in 3 main Positive effects of large Focus on development of Lay-offs products updates introduced in 3 main products (110 people) games Smaller numbe
Slide 4: Results of the revised strategy
results of the revised strategy Dividend payment PLN 52.3 M Sustainable growth and Q4 record high quarterly Adj. EBITDA in 2023 prove success of the focus strategy and restructuring Robust cash generation throughout 2023 showing resilience of TSG’s business model PLN M AI 4
Slide 5: Product performance update
PRODUCT PERFORMANCE UPDATE
Slide 6: Fishing Clash performance
Fishing clash performance ■ Q4’23 brought stable level of bookings ■ Main focus of the team was on improving user experience based on the users’ feedback i.a.: events’ offer, invitation window, translation M PLN feature in clan chats, matching of champions ■ UA activity focused on profitability of c
Slide 7: Hunting Clash performance
Hunting clash performance ■ Slight drop in bookings q-o-q in Q4’23 due to smaller number of locations in game – three in Q3’ 2023 vs two in Q4’2023 M PLN ■ Lower UA costs; strict focus on effectiveness of the campaigns ■ Dynamic increase in MAU and natural drop in ABPU before new players start purch
Slide 8: Wings of Heroes performance
Wings of Heroes performance ■ Growth of bookings and other main KPIs of the game q-o-q as a result of focus on improvement of events in the game and work on social aspects of the game M PLN ■ Increased UA spending due to improvement in monetization and we plan to increase it in coming months ■ All n
Slide 9: Innovations driving growth
INNOVATIONS DAIVING GROWTH
Slide 10: TSG Store - Sustainable Growth
TSG STORE - SUSTAINABLE GROWTH TSG Store % share in Group’s bookings 2 products from the Group portfolio in TSG Store 9.0 13.7% share of TSG Store bookings in FC Digital Markets Act opportunity or threat? Ready to scale the project since Q2’ 2024 JD 10
Slide 11: AI in TSG: innovation and efficiency of work
AI in TSG: innovation and efficiency of work 1 Game economy 4 Visuals and marketing creation 2 Automation and 5 Customer support optimization 3 Localization and 6 Gamesture translation JD 11
Slide 12: FY & Q4 2023 Update
FY & O04 2023 UPDATE
Slide 13: 2023 results
2023 results Impact of USD/PLN exchange rate on bookings in 2023 Bookings in USD M Slight growth of PLN 443.7 m USD 106 m bookings in Q4’23 in USD Bookings Bookings vs vs PLN 541.3 m in 2022 USD 121.7 m in 2022 Adjusted EBITDA in PLN M 2023 record PLN 15.2 m PLN 118.6 m high quarterly Adjusted EBITD
Slide 14: 2023 - Write-offs
2023 - wRITE-OFFS TEN SQUARE GAMES RORTOS GAMESTURE PLN 78.2M Stopped Write-off goodwill Write-off value of development of 2 associated with investment in non-core projects investment in Total amount of write- Gamesture Write-off of Rortos offs in 2023 PLN 5.4 m PLN 31.7 m PLN 40.8 m in TSG Group De
Slide 15: Buyback of Shares
BuyBACK of Shares December 19th, 2023 BUYBACK INFO Extraordinary Meeting of Shareholders adopts resolution to execute the buyback program in 2024 as a substitute of dividend payment; 954,166 February 9th, 2024 number of shares bought by TSG Invitation to participate in the buyback program PLN 120.0
Slide 16: Summary
SUMMARY
Slide 17: Summary
sUMMARY Financial safety & stability PLN 52.3 M Focus strategy yields positive results Dividend paid in Q2’23 PLN 114.5 M Stable growth based on key assets Sustainable growth from Record high buyback of PLN 114.5 M portfolio of main products executed in Feb’ 24 Consistent cash generation PLN 167 M E
Slide 18: Investor's Calendar
INVESTOR’S CALENDAR
Slide 19: Investor's calendar
Investor’s calendar Company news flow: ■ Q1 2024 Sales Update – early April 2024 ■ Q1 2024 Financial Report – 27th May, 2024 ○ Conference call on TSG’s performance in Q1 2024 - 28th May 2024 at 12:00 P.M. ○ Chat with individual investors on TSG’s performance in Q1 2024 - 28th May 2024 ■ May/June Gen
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: Financial Results
FINANCIAL RESULTS
Slide 23: Profit and loss dynamics
Profit and loss dynamics M PLN Q4’22 2022 Q1’23 Q2’23 Q3’23 Q4’23 2023 Revenues from sales 131.0 537.8 117.4 104.9 105.6 108.1 436.1 1• Slight decrease in bookings q-o-q, due to a weaker performance of Fishing Clash and 1 Bookings 138.6 541.3 123.6 101.2 110.4 108.5 443.7 Hunting Clash. Growth in Re
Slide 24: Profit and loss report
Profit and loss report Selected positions in k PLN Q1’22 Q2’22 Q3’22 Q4’22 2022 Q1’23 Q2’23 Q3’23 Q4’23 2023 Revenues from sales 150,335 124,143 132,913 131,167 538,558 117,450 104,932 105,572 108,122 436,076 Fishing Clash 95,827 84,385 88,774 86,980 355,966 72,558 63,194 69,738 68,743 274,232 Let’s
Slide 25: General and administrative costs
General AND administrative costs General administrative costs (PLN k) Q4’22 2022 Q1’23 Q2’23 Q3’23 Q4’23 2023 Recurring costs 8,135 40,126 10,573 7,510 6,454 6,860 31,398 Salaries, subcontractor services 4,457 18,497 4,535 3,683 3,207 3,070 14,495 Subsidiaries costs 44 7,033 1,613 1,135 1,074 ,972 4
Slide 26: Cash flow generation with a strong cash pool
Cash flow generation with a strong cash pool M PLN Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Adjusted EBITDA 35.3 27.6 21.9 33.7 35.3 Net Cash Flows from Operating Activities 22.3 29.9 28.6 32.5 30.5 Net Cash Flows from Investing Activities (8.4) (14.7) (9.5) (2.0) (0.3) Net Cash Flows from Financing Activities
Slide 27: Balance sheet
Balance sheet Selected positions in k PLN Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 ASSETS Fixed assets 320,497 326,192 340,728 314,138 297,613 279,861 285,980 215,779 Receivables 38,709 33,613 35,504 35,280 41,096 31,606 36,293 38,937 Cash and cash equivalents 149,281 90,931 113,267 126,595 1
Slide 28: Cash flow report
Cash flow report Selected positions in k PLN Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 OPERATING ACTIVITIES Profit/loss before tax 30,975 18,289 20,860 (6,685) (16,022) 10,049 23,205 (0,184) Total adjustments 26,739 19,970 14,147 33,332 49,203 9,273 11,372 27,985 Amortisation 2,789 3,968 3,742
Slide 29: Method of determining adjusted EBITDA
Method of determining adjusted EBITDA Selected items of the P&L Statement Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 in k PLN Operating profit IFRS 29,392 17,444 21,636 4,220 (14,414) 9,639 25,032 (16,739) Amortisation +2,742 +3,725 +3,414 +5,977 +4,978 +5,143 +4,969 +4,809 Write-down for impai
Slide 30: 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 31: 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 32: Profit distribution to shareholders
profit DiSTRIBUTION TO shareholders Pln 200 M* Of Dividend Paid Out By TSG 2022 Profit Distribution almost 100% of consolidated net profit for 2022 paid out to shareholders; (exceeding 75% threshold of TSG’s dividend policy**) 2023 Profit Distribution PLN 114.5 M buyback of own shares in February 20
Slide 33: 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