Digital Bros S.p.a. · MIL:DIB
Digital Bros — Investor Presentation (January 2020)
40 slides from Digital Bros's investor presentation, Jan 28, 2020
Slide 1: Presentation January 2020
PRESENTATION JANUARY 2020
Slide 2: Our Milestones
OUR MILESTONES 1989 2000 2007 2012 2013 2015 2017 2020 FOUNDATION LISTING RETAIL DIGITAL MOBILE MOBILE AND CONSOLE SHAREHOLDING PUBLISHING PUBLISHING PUBLISHING DEVELOPERS ACQUISITION ACQUISITION IN VIDEOGAME COMPANY M O B I L E JANUARY 2020 2 2
Slide 3: Market Value Chain
MARKET VALUE CHAIN RETAIL CONSOLE DEVELOPERS PUBLISHERS DISTRIBUTORS RETAILERS ENDCONSUMERS MANUFACTURERS DIGITAL DEVELOPERS PUBLISHERS MARKETPLACES ENDCONSUMERS DIGITALBROSGROUP JANUARY 2020 3
Slide 4: We Develop, Publish and Market Multichannel Videogames
WE DEVELOP, PUBLISH AND MARKET MULTICHANNEL VIDEOGAMES DISTRIBUTION Retail distribution (chains PUBLISHING and stores – global distribution network) IP scouting and selection Digital download (digital STUDIOS Production survey marketplaces, mobile and tablet store, social DR studios Marketing & pr p
Slide 5: Premium and Free to Play
PRODUCTS PREMIUM AND FREE TO PLAY THE GROUP OPERATES GLOBALLY IN THE PREMIUM AND FREE TO PLAY GAMES WITH THE 505 GAMES BRAND PREMIUM GAMES FREE TO PLAY acQuisition of contents Rights fRom development and publishing of developeRs (ip owneRship, long teRms videogames available foR fRee on agReement, t
Slide 6: Digital and Retail
CHANNELS DIGITAL AND RETAIL DIGITAL RETAIL DISTRIBUTION DISTRIBUTION retail digital Online Marketplaces : Main chains & stores Steam 100% Playstation Network e-commerce 2% 90% 14% Xbox Live Epic Games Store 80% 40% 42% 47% 70% 49% 60% 63% Game app download : 60% 72% mobile and tablet STORES 50% 60%
Slide 7: Worldwide Presence
WORLDWIDE PRESENCE HEADQUARTERS: MILAN 200* PEOPLE WORLDWIDE JANUARY 2020 7
Slide 8: New Releases & Investments
1 NEW RELEASES & INVESTMENTS 8
Slide 9: Planned Investments
PLANNED INVESTMENTS ouR successful pRoducts geneRated cash we enteRed into the laRgest investment plan thRough to invest foR gRowth stRategic acQuisitions and bRand new publishing deals JANUARY 2020 - NEW RELEASES & INVESTMENTS 9
Slide 10: IP Portfolio
IP PORTFOLIO JANUARY 2020 LONG TERM THIRD OWNED IP AGREEMENTS PARTY PARTNERSHIPS JANUARY 2020 - NEW RELEASES & INVESTMENTS 10
Slide 11: Significant Releases for Premium and Free to Play
SIGNIFICANT RELEASES FOR PREMIUM AND FREE TO PLAY PREMIUM DIGITAL & RETAIL 2019 2020 2021 FREE TO PLAY CONSOLE AND MOBILE JANUARY 2020 - NEW RELEASES & INVESTMENTS 11
Slide 12: Assetto Corsa
ASSETTO CORSA assetto coRsa is the #1 Racing simulatoR – 5.2 million copies sold and moRe than euRo 37 million Revenues new episode assetto coRsa competizione: official game of the blancpain gt seRies (3 yeaRs paRtneRship) Released on may 29th 2019 fully licensed gt caRs fRom top manufactuReR: feRRa
Slide 13: Bloodstained
BLOODSTAINED latest cReation of koji igaRashi, the foRmeR seRies pRoduceR of castelvania fRanchise spiRitual successoR of the castlevania seRies which has been a top selleR game in the pRevious decade second laRgest videogame cRowdfunding kickstaRteR campaign in 2015 ($5.5 million fRom 65k backeRs)
Slide 14: Control
CONTROL cinematic thiRd peRson action game built on Remedy’s pRopRietaRy noRthlight® technology developed by Remedy enteRtainment, developeR of aaa video games (maX payne, alan wake and Quantum bReak) woRldwide publishing Rights on pc, playstation 4 and XboX one publishing paRtneRship with epic game
Slide 15: Indivisible
INDIVISIBLE classically-influenced Rpg and platfoRmeR hybRid cReated by lab zeRo games (developeR of skullgiRls) cRowdfunded on indigogo in 2015 (moRe than us $2 million Raised) uniQue selling points of the game: mix of RPG action and platform huge character roster woRldwide publishing Rights on pc,
Slide 16: Journey to the Savage Planet
JOURNEY TO THE SAVAGE PLANET fiRst-peRson adventuRe game set in a bRight and coloRful alien woRld debut title fRom industRy veteRans aleX hutchinson, yassine Riahi and Reid schneideR’s new montReal-based development studio, typhoon studios woRldwide publishing Rights on pc, playstation 4 and XboX on
Slide 17: Hawken
HAWKEN mech genRe: collect, build and customize youR mech stRong f2p system with immeRsive pve elements laRge population of gameRs the actual pRoduction is not just a seQuel: new game design objective-based pve to maximize revenues without being ‘pay-to-win’ & to create sustainable longterm product
Slide 18: Death Stranding
DEATH STRANDING gRoundbReaking eXpeRience fRom legendaRy game cReatoR hideo kojima console veRsion published by sony inteRactive enteRtainment Released on November 8th, 2019 High Metacritic Score: avg. 83 woRldwide publishing Rights on pc foR digital bRos eXpected lifetime Revenue in eXcess of euRo
Slide 19: Financials
2 FINANCIALS 19
Slide 20: Market Size
MARKET SIZE THE WORLDWIDE GAMES MARKET WILL REACH $196 BILLION BY 2022 $196.0 Bn +9% TOTAL MARKET CAGR $178.2 Bn 2018-2022 $164.6 Bn 19% $148.8 Bn 20% 1% $138.7 Bn 21% 21% 1% 22% 2% 31% 2% 31% Boxed/Dowloaded PC 3% 31% 30% 8% Browser PC 31% 8% 8% Console 9% 9% 40% 41% Tablet 35% 37% 38% Smartphone 2
Slide 21: Consolidated P&L - Q1 2020 Actual
CONSOLIDATED P&L - Q1 2020 ACTUAL €/1000 FY 2020 YTD FY 2019 YTD CHANGE CHANGE % GROSS REVENUES 38,529 17,427 21,102 121% NET REVENUES 36,419 16,424 19,995 122% EBITDA 5,337 1,236 4,101 n.m. EBIT 3,192 (616) 3,808 n.m. EBT 3,899 (663) 4,562 n.m. NET PROFIT 2,876 (606) 3,482 n.m. FISICAL YEAR ENDING
Slide 22: Premium Games - Q1 2020 Actual
PREMIUM GAMES - Q1 2020 ACTUAL €/1000 FY 2020 YTD FY 2019 YTD CHANGE CHANGE % GROSS REVENUES 32,613 11,343 21,270 188% NET REVENUES 30,926 10,844 20,082 185% EBITDA 6,295 2,086 4,209 n.m. EBIT 5,063 866 4,197 n.m. FISICAL YEAR ENDING 30TH JUNE SOURCE: DIGITAL BROS GROSS REVENUE SIGNIFICANT INCREASE
Slide 23: Free to Play - Q1 2020 Actual
FREE TO PLAY - Q1 2020 ACTUAL €/1000 FY 2020 YTD FY 2019 YTD CHANGE CHANGE % GROSS REVENUES 1,673 1,638 35 2.1% NET REVENUES 1,673 1,638 35 2.1% EBITDA 428 538 (110) -20.5% EBIT (230) 48 (278) n.m. FISICAL YEAR ENDING 30TH JUNE SOURCE: DIGITAL BROS REVENUES INCREASED BY 2.1% DUE TO THE POSITIVE PERF
Slide 24: Revenue Breakdown by Segment
REVENUE BREAKDOWN BY SEGMENT CONSOLIDATED FY 2018 CONSOLIDATED Q1 ACTUAL + FY2020 FORECAST Premium Games Premium Games 71.2% 84,2% Italian Distribution Italian Distribution 20.3% 8,4% Free to Play Free to Play 7.6% 6,9% Other Projects Other Projects 0.9% 0,6% JANUARY 2020 - FINANCIALS 24
Slide 25: Globalization
GLOBALIZATION 100% 90% REVENUES TREND 16% 33% ITALY VS INTERNATIONAL 80% 70% 62% 60% 79% Italy 80% 50% 82% international 82% 91% 40% 84% 86% 30% 67% 20% 38% 10% 21% 20% 18% 14% 18% 9% 0% 2007 2010 2014 2015 2016 2017 2018 2019 2020 ACT ACT ACT ACT ACT ACT ACT ACT ACT JANUARY 2020 - FINANCIALS 25
Slide 26: Investments
NET FINANCIAL POSITION OVER THE LAST YEARS 20,00 45,00 10,00 40,00 0 35,00 NET FINANCIAL POSITION (10,00) 30,00 (20,00) 25,00 INVESTMENTS * (30,00) 20,00 (40,00) 15,00 (50,00) 10,00 (60,00) 5,00 (70,00) - Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16
Slide 27: Outlook
OUTLOOK significant Revenue gRowth eXpected in the cuRRent fiscal yeaR and impRovement of all financial maRgins video games Release plan fy2020: contRol Released in Q1, indivisible Released in Q2, jouRney to the savage planet will be launched in Q3 and the fRee to play videogame hawken will be Relea
Slide 28: Digital Bros - A Snapshot
DIGITAL BROS - A SNAPSHOT GLOBAL COMPANY, OPERATING ACROSS THE VIDEOGAME ENTERTAINMENT MARKET DEVEOLPMENT, PUBLISHING AND MARKETING MULTICHANNEL VIDEOGAMES COMBINING PREMIUM GAMES AND FREE TO PLAY TO MAXIMIZE THE BRAND PROFITABILITY ACQUISITION OF UNDERPERFORMING INTELLECTUAL PROPERTIES (I.E. ASSETT
Slide 29: Appendix
3 APPENDIX JANUARY 2020 - FINANCIALS 29 29
Slide 30: Evolution of the Videogame Market
EVOLUTION OF THE VIDEOGAME MARKET FROM TRADITIONAL RETAIL DISTRIBUTION TO DIGITAL, MOBILE & STREAMING GAAS (GAME AS A SERVICE) MULTICHANNEL MOBILE & SOCIAL game as a seRvice is a gameRs now access with the eXplosion in community game that content acRoss the web mobile devices eveRyone is Retains gam
Slide 31: Cloud & Streaming: The Future of Gaming
CLOUD & STREAMING: THE FUTURE OF GAMING CLOUD GAMING videogames can be played on any device without advantages: mobility constant upgrades owning a specific haRdwaRe and with no local/ ubiquity no expensive physical copy of the game itself. videogames aRe hardware stReamed fRom the cloud on demand.
Slide 32: Margin Comparison
MARGIN COMPARISON RETAIL DIGITAL RRp €49.99 €49.99 RRp VAT 20% 20% VAT DISCOUNT / COMMISSION 35% 30% DISCOUNT / COMMISSION GROSS REVENUES €27.08 €29.16 GROSS REVENUES PRICE PROTECTION & ADJ 10% 0.0% PRICE PROTECTION & ADJ NET REVENUES €24.37 €29.16 NET REVENUES COGS €6.07 -- COGS MARKETING 10% 10% M
Slide 33: Who Are Our Competitors
WHO ARE OUR COMPETITORS RETAIL PUBLISHING DIGITAL PUBLISHING F2P DEVELOPMENT FAR EAST FOCUS HOME INTERACTIVE FRONTIER GLU MOBILE PARADOX STARBREEZE AB THQ NORDIC AB TEAM 17 BIG BEN GROUP DIGITAL BROS SOURCE: DIGITAL BROS JANUARY 2020 - APPENDIX 33
Slide 34: Relations with Starbreeze AB
RELATIONS WITH STARBREEZE AB staRbReeze ab is a swedish videogame developeR and publisheR, owneR of the famous payday ip. digital bRos is the majoR stakeholdeR of the company having an eaRn out up to usd 40 mln on the futuRe payday 3 and the console publishing Rights of payday 2. in oRdeR to have a
Slide 35: Console Developer Acquisition March 2017
CONSOLE DEVELOPER ACQUISITION MARCH 2017 KUNOS SIMULAZIONI S.R.L. ACQUISITION OF 100% OF ASSETTO CORSA DEVELOPER FOR 4.3 EUR MILLION, OF WHOM: euro 1,375,000 entirely in cash on the closing date euro 1,375,000 entirely in cash within one year from the closing date euro 1,591,500 via the issue of 150
Slide 36: Payday Rights Sold Back to Starbreeze in May 2016
PAYDAY RIGHTS SOLD BACK TO STARBREEZE IN MAY 2016 sold back foR sek 249.3 million (appRoX. usd 30 million) paid in 10.9 million newly issued staRbReeze b-shaRes as a defeRRed consideRation digital bRos will benefit fRom a 33% Revenue shaRe on futuRe payday3 up to 40 million usd the gRoup will contin
Slide 37: Disposal of Pipeworks Inc.
DISPOSAL OF PIPEWORKS INC. sold to noRthen pacific gRoup, us pRivate eQuity fiRm, foR us $20 million of whom us $2.5 million on decembeR 21st, 2017 foR a 12.5% stake, us $5 million on febRuaRy 23Rd, 2018 foR eXeRcising the buy option, us $12.5 million in thRee instalments, as follows: US $2.5 millio
Slide 38: Italian Distribution - Q1 2020 Actual
ITALIAN DISTRIBUTION - Q1 2020 ACTUAL €/1000 FY 2020 YTD FY 2019 YTD CHANGE CHANGE % GROSS REVENUES 4,125 4,390 (265) - 6% NET REVENUES 3,702 3,886 (184) - 4.7% EBITDA 61 479 (418) - 87,3% EBIT 19 403 (384) - 95,3% FISICAL YEAR ENDING 30TH JUNE SOURCE: DIGITAL BROS INCREASE IN REVENUE FROM RETAIL VI
Slide 39: Other Activities - Q1 2020 Actual
OTHER ACTIVITIES - Q1 2020 ACTUAL €/1000 FY 2020 YTD FY 2019 YTD CHANGE CHANGE % GROSS REVENUES 118 56 62 n.m. NET REVENUES 118 56 62 n.m. EBITDA (21) (225) 204 -90.7% EBIT (45) (245) 200 -81.6% FISICAL YEAR ENDING 30TH JUNE SOURCE: DIGITAL BROS DIGITAL BROS GAME ACADEMY REVENUE JANUARY 2020 - APPEN
Slide 40: Digital Bros S.p.a. contact details
Digital Bros S.p.a. Via Tor tona, 37 20144 Milano, Italia www.digitalbros.com