Slide 1: Solid Clouds Investor Presentation
SOLID CLOUDS Nasdaq First North - IPO June 2021 INVESTOR PRESENTATION
Slide 2: Executive summary
Executive summary Company overview Market overview Financials Investment opportunity 2
Slide 3: Solid Clouds Introduction
Solid Clouds Introduction ● Solid Clouds is an Icelandic software game company. ● Founded 2013 by Stefan Gunnarsson (CEO) and Stefan Bjornsson (CFO) software developers and avid gamers. ● Talented development team of 17 with six additional hires being finalized. ● Development ongoing of FRONTIERS -
Slide 4: Company overview
Executive summary Company overview Market overview Financials Investment opportunity 4
Slide 5: Key Management
Key Management Leadership team with extensive industry knowledge and experience ● Key management and lead employees have a wealth of experience in the video game industry. ● Experience includes developers like CCP, Caoz, Lumenox Games, Radiant Games etc. Stefán Gunnarsson Stefán Björnsson ● All have
Slide 6: Board of directors
Board of directors Highly experienced board leadership ● Sigurlína, a veteran in game design with experience from CCP, Ubisoft and DICE, has worked on some of the largest games in world including Battlefront (Star Wars) and FIFA. ● Ólafur is a serial entrepreneur (Raw fury, Betware/Novomatic) and ho
Slide 7: History and Key milestones
History and Key milestones Solid Clouds was founded based on the success of CCP with EVE online Second product launch from technological base, 1.5 years from concept to market, underlines and proves Solid Clouds core business case. Listing on Sovereign Nasdaq First Space North. launched. Frontiers G
Slide 8: Strategic vision for 2026
Strategic vision for 2026 The five year plan 2021 2022 Q2 2026 Frontiers MVP Soft Launch Heir of Mercury A minimum viable Frontiers is launched Solid Clouds first fantasy product developed. on desktop and title. The aim is broad Game tested in mobile for the appeal which targets the closed groups du
Slide 9: Experienced game developer
Experienced game developer Borrowing engine, graphics and stories from Starborne Screenshots – Starborne: Sovereign Space ● Starborne: Sovereign Space - company’s first game, released in 2018. ● Grand-scale strategy game in which thousands of players scheme, haggle and fight for control of the galax
Slide 10: Frontiers' upcoming launch
Frontiers’ upcoming launch ● Frontiers is Solid Clouds upcoming game and is set to be soft launched Focus on large for both PC and Mobile by mid year 2022. but niche market Space MMO game with a clear target group ● Frontiers, is a Space MMO built on the Starborne concept, where players build bases,
Slide 11: Frontiers' to be launched mid-year 2022
Frontiers’ to be launched mid-year 2022 Investment to In progress After launch date ✓ Concept ❑ Game mechanics ❑ Scaling and Growth ✓ Infrastructure ❑ Art production ❑ Game flow and ✓ Store integration ❑ Server scalability content ✓ Pre-Production ❑ Marketing material ❑ Game optimization ✓ Prototype
Slide 12: Marketing
Marketing ● Frontiers will target a western demographic, mostly males, aged 25- 45, which is in line with other similarly themed strategy space games. ● A database of ~400,000 players previously interested in Starborne Target will be targeted. audience ● To reach a larger audience Solid Clouds will
Slide 13: Our Main Player Types
Our Main Player Types Achievers are the ideal player type Achievers Socializers Free spirits ● Motivated by mastery. ● Motivated by ● Motivated by relatedness. autonomy and self ● Love upgrading, expression. progressing and ● Want to interact with overcoming obstacles. others and create ● Want to cr
Slide 14: Strategic multiplayer space genre
Strategic multiplayer space genre Frontiers targeted at a lucrative space game niche with a large audience ● The “new stars” of the strategy mobile game space mix gameplay mechanics, adding features from multiple genres. ● RAID: Shadow Legends has demonstrated that there is a market for semi-realist
Slide 15: Market overview
Executive summary Company overview Market overview Financials Investment opportunity 15
Slide 16: The Icelandic gaming sector
The Icelandic gaming sector There is enthusiasm amongst investors and private investments are in an upswing Local & foreign investment in the Icelandic gaming industry Number of private investments in Icelandic gaming firms 7 6 Number of startups 4 4 3 3 2 2 2 2 1 1 Total investment in Icelandic gam
Slide 17: Gaming has outshined other major forms of entertainment
Gaming has outshined other major forms of entertainment Video game market value worldwide 2015 - 2023 11.2% YoY growth ● The video game industry has 210 boomed in recent years 180 because of the variety of 150 ways to play games. Billion USD 120 90 ● Video games are becoming 60 the largest pillar in
Slide 18: Solid Clouds address both the PC & Mobile platform
Solid Clouds address both the PC & Mobile platform… Market share by gaming platforms 2020 Games market growth $51.2Bn Fast >9% annually and Console $86.3Bn Mobile growing expected to exceed 218bn USD in 2023. +21% YoY +25.6% YoY 29% <60% of video game 2020 Total players in the US are $175 Bn 49% Fav
Slide 19: … with focus on the Western Market
… with focus on the Western Market Market share by region 2020 $6.2Bn Middle East & Africa ● The Western market share is $32.9Bn +30.2% YoY around $77.6Bn. Europe 3% +19.9% YoY ● The company’s focus is on the Western market, however 19% $6.8Bn future plans involve entering Latin America the Asia-Pac
Slide 20: Solid Clouds expanding into the strategy / RPG segment
Solid Clouds expanding into the strategy / RPG segment ● Strategy games is among the top three genres in which players are most likely to make an in-app purchase. ● 50% of gamers have made in-game purchases in the last year. ● Over 85% of industry revenue comes from Free to Play games. ● Compared to
Slide 21: Financials
Executive summary Market overview Company overview Financials Investment opportunity 21
Slide 22: Focus on the life-time value of players
Focus on the life-time value of players Free-to-play games with in-app purchases Discover Install Engagement Convert Monetize Retain Players There are no First time We aim to Our revenue Cultivate a discover the upfront fees user convert comes from loyal user game via or payments experience is aroun
Slide 23: Significant investments in the platform
Significant investments in the platform ● Total investment in the game developer‘s operations to date is ISK 1,117M. ● All funding has been used to design and develop computer games with primary focus on the strategy and role-playing genre. ● With the investment to date the company has built a solid
Slide 24: A growing market with significant revenue potential
A growing market with significant revenue potential Average Revenue Per Daily Active User (ARPDAU) -RPG and Strategy games- ● Solid Clouds estimates to 3,5 increase ARPDAU from $0.6 in 3,0 2021 to $1.6 in Q3 2022. 2,5 ● According to Game Analytics ARPDAU ($) 2,0 Mobile Gaming Benchmarks, there are t
Slide 25: Strong platform for future growth
Strong platform for future growth ● According to Solid Clouds’ financial Projected number of users and estimated revenue growth forecast the game developer will turn profitable in 2022. 1.400 1.251 70 1.175 Thousands of daily active users ● EBIT in 2022 is expected to be ISK 1.200 1.037 60 916 171m.
Slide 26: Investment opportunity
Executive summary Market overview Company overview Financials Investment opportunity 26
Slide 27: A unique growth opportunity
A unique growth opportunity Why Solid Clouds? 1 2 3 4 Scalability Timing Experience Infrastructure o Solid Clouds‘ o There is vacant space o Management team o Existing marketing infrastructure is built in a fast-growing has deep industry infrastructure and for scalability and market segment. knowled
Slide 28: The share offering
The share offering Offer book A Offer book B @Price 12,5 (mISK) Current number of 126,198,626 1,577 mISK issued shares* Offering size : new 40,000,000 500 mISK shares Additional 18,000,000 shares (up to a total of Upsize: 225mISK Right to increase size 58,000,000 shares.) Total: 725mISK Price 12.5 I
Slide 29: Potential tax benefits related to the share offering
Potential tax benefits related to the share offering • Individuals that are residents in Iceland for tax purposes and invest in Solid Clouds are applicable for tax deduction from their income tax/capital tax gains base of 75% of their investment. • The minimum investment is ISK 300 thousand and the
Slide 30: Current shareholders
Current shareholders Shareholder list % Previous equity & funds used in firm Stefán Gunnarsson, CEO 15.1% 1.200 mISK 1.000 Kjölur fjárfestingarfélag ehf. 9.7% 800 600 1,117 Sigurður Arnljótsson 6.0% 400 200 Stefán Þór Björnsson, CFO 5.0% 0 Tómas Sigurðsson 3.0% Vilano Capital 2.5% Valuation of Solid
Slide 31: Key dates
Key dates June 2021 Mo Tu We Th Fr Sa Su 28-30 June – Subscription period 1 2 3 4 5 6 1 July - Allocation 7 8 9 10 11 12 13 14 15 16 17 18 19 20 6 July - Date of payment 21 22 23 24 25 26 27 28 29 29 30 12 July - Delivery of shares July 2021 12 July - First day of trading Mo Tu We Th Fr Sa Su 11 2 3
Slide 32: Arion Bank - contact
Arion Bank - contact Corporate Finance Capital Markets Lydur Thorgeirsson Thorbergur Gudjonsson, CFA Þórarinn Óli Ólafsson Árni Ketilbjörn Jónsson Head of Corporate Finance Senior Vice President – Corporate Finance Head of Capital Markets Capital Markets lydur.thorgeirsson@arionbanki.is thorbergur.g
Slide 33: Disclaimer & Confidentiality
Disclaimer & Confidentiality This presentation is prepared by Arion Bank hf. (“the Bank”) regarding specific aspects of the operations of Solid Clouds ehf. (“the Company”). The presentation is made at the request of the Company and the company is the original recipient of the presentation. The recip
Slide 34: Appendix
Appendix 34
Slide 35: Financials – Income statement
Financials – Income statement Figures in ISK '000 2020 2019 Operating revenues 63,769 21,437 Grants VSMT and R&D tax credits 56,676 64,192 Capitalized development cost (51,008) (85,628) Total revenues 69,436 0 Development cost 82,015 49,939 Salaries and related expenditures 137,918 130,015 Office an
Slide 36: Financials – Balance Sheet
Financials – Balance Sheet Figures in ISK '000 2020 2019 Assets Capitalized development costs 545,677 395,317 Rental properties 13,428 18,795 Income tax credit 32,318 0 Total fixed assets 591,423 414,112 Receivables 1,305 0 Other receivables 6,466 28,723 Cash and cash equivalents 58,963 113,737 Tota
Slide 37: Financials – Statement of cash flows
Financials – Statement of cash flows Figures in ISK '000 2020 2019 Operating activities Net income (loss) (23,952) (37,788) Operating items not affecting cash flow Depreciation of development cost 27,050 0 Depreciation of rental properties 5,871 5.758 Cost of option agreements 2,654 593 Turnover fun
Slide 38: Comparable companies analysis
Comparable companies analysis EV/EBITDA in interactive home entertainment sector 25% Listed firms' 20% median multiples EV/EBITDA ~ 19 Fwd EV/EBITDA ~13 All firms in sector 15% 10% 5% 0% EV / EBITDA EV / fwd EBITDA 38 Source: S&P Capital IQ.
Slide 39: Comparable companies
Comparable companies Tier 1 comparables Nam e Description HQ EV/Sales Market Cap (USD) LTM EBITDA m argin % Vespa Inc. engages in the gaming business w orldw ide. Its character-collecting mobile RPG, x VESPA Inc. S-Korea 2,7x 174,9 (43,3%) King’s Raid game is offered in various language. The company