Ten Square Games Sa · GPW:TEN
Ten Square Games Sa — Q3 2019 Earnings Presentation
32 slides from Ten Square Games Sa's earnings presentation, December 2019
Slide 1: Company presentation December 2019
Company presentation December 2019
Slide 2: Ten Square Games – F2P Hobby Games leader
Ten Square Games – F2P Hobby Games leader 200 people F2P games > 90% STRONG TEAM 8 LARGE PROJECTS SALES OUTSIDE POLAND PLN 139 M PLN 11 M PLN 7 M 9M 2019 revenue 9M 2019 revenue 9M 2019 revenue 2
Slide 3: Fishing Clash – the biggest fishing game in the world
Fishing Clash – the biggest fishing game in the world Top Grossing Games on Google Play – monthly net revenue* 1 LINEAGE M $47m 10 RISE OF KINGDOMS $16m 100 MU AWAKENING $2,7m 8 bn FISH CAUGHT 330 m DUELS FISHING CLASH $2.5m 105 30 m PLAYERS 250 IDLE MINER TYCOON $0,9m 300 m LURE PACKS 160 k CLANS 4
Slide 4: Strategy – we are building a portfolio of games maintained for years
Strategy – we are building a portfolio of games maintained for years IPO Mobile First Let’s Fish 4
Slide 5: Wide, diversified pipeline of new projects
Wide, diversified pipeline of new projects Live Games for Product A women Number of projects Games for Product B women 2020 Soft Launch Global Launch Ideas Production Time 5
Slide 6: New titles in soft launch
New titles in soft launch 6
Slide 7: Dividend policy and shareholders
Dividend policy and shareholders Historic dividend payments 2015-2018 Shareholders (7,241k– total number of shares) Management intends to recommend 75% Nationale 37,0 Nederlanden payout from 2018 consolidated net profit 7,59% going forward 27,3 Others 28,83% 7,3 6,3 Shareholders’ Agreement 2,7 100%
Slide 8: 9M 2019 Results
9M 2019 Results 8
Slide 9: Q3 2019 – executive summary
Q3 2019 – executive summary • Record results in Q3 2019 • Another quarter in a row of record Fishing Clash revenues • PLN 67,6 M total revenues in Q3 2019 – increase by 91% y/y and 35% q/q • PLN 18 M net profit in Q3 – increase by 77% y/y and 39% q/q • Strengthened team - already 200 specialists on
Slide 10: Fishing Clash – constant improvement of results
Fishing Clash – constant improvement of results Payments (M PLN) • 34% increase of payments q/q in Q3 2019 57,9 • Successful Closed Beta tests on Chinese market, awaiting 43,1 34,8 37,5 full license 28,8 17,5 • Constant live-ops 7,6 2,7 • Constant development of the game by adding new fish, 4Q 1Q 2Q
Slide 11: Fishing Clash – effective marketing policy
Fishing Clash – effective marketing policy Payments and marketing expenditures (M PLN) 21,7 • Record setting months resulting from effective marketing policy 20,4 20,7 • In Q3 2019 almost PLN 21 M spent on Fishing Clash promotion 16,7 • Marketing expenditures scaled based on statistical models (high
Slide 12: Let's Fish – return to growth path
Let’s Fish – return to growth path Payments (M PLN) 4,3 4,7 • PLN 3,6 M revenues in Q3 2019 compared to PLN 4,3 M in 4,2 4,1 3,7 3,7 3,6 3Q 2018 – decrease by 16% y/y, increase by 9% q/q 3,3 • Challenging technology shift in Q2 2019 – transfer from Flash to Html5 • Stable MAU and ARPU in Q3 2019, de
Slide 13: Wild Hunt – ongoing good monetisation
Wild Hunt – ongoing good monetisation Payments (M PLN) 2,4 2,3 • 77 % revenue increase in Q3 2019 y/y 2,0 2,1 1,3 • PLN 2,3 M revenue in Q3 2019, compared to 0,9 PLN 1,3 M in Q3 2018 0,7 0,4 • Less than PLN 0,2M spent on promotion in 3Q 2019 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q • Stable development of the game b
Slide 14: Dynamic growth of sales revenues
Dynamic growth of sales revenues Szybki wzrost przychodów dzięki dobrej monetyzacji gier mobilnych, głównie Fishing Clash Sales revenues (k PLN) Geographic and product sales breakdown Fishing Clash Others 5% 14% North America x 1,9 r/r 67 650 Europe 42% Q3 2019 Asia Others 39% 49 878 45 304 41 551 3
Slide 15: Operations costs under control
Operations costs under control Operations costs excluding selling costs Selling costs Marketing • Operations costs increasing due to COGS Commissions gradual growth of team size (project Management costs teams, general departments) Revenue share 21,2 Others • Commission costs directly proportional S
Slide 16: Financial results
Financial results EBITDA Net profit • Best quarterly results in Company 22,1 history • EBITDA increased by 70% y/y 18,0 • Net profit increased by 77% y/y 16,7 16,4 • IPBOX – tax interpretation obtained 13,7 13,1 13,0 12,5 10,2 10,4 8,9 M PLN 7,5 M PLN 6,4 5,0 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'1
Slide 17: Good cash flow translates to balance sheet improvement
Good cash flow translates to balance sheet improvement Cash flow Balance sheet structure 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 • Operations cash flow resulting from great financial results – quick rebuilding of cash level after dividend payment 17,6 in Q
Slide 18: IR contact
IR contact BARTŁOMIEJ PIEKARSKI e-mail: bartlomiej.piekarski@tensquaregames.com tel. +48 667 872 742
Slide 19: Backup
Backup
Slide 20: Management team
Management team CEO COO CFO Maciej Popowicz Arkadiusz Pernal Magdalena Jurewicz * * * nk.pl – first large scale modern social network in Poland 20
Slide 21: Ten Square Games foundations
Ten Square Games foundations Start of Ten Square Games Let’s Fish success Start of Game Factory Hard launch of Fishing Browser games for social The game is available globally, Focus on mobile games Clash networks own distribution network 2011 2013 2015 2017 2012 2014 2016 2018 Start of Let’s Fish Le
Slide 22: 2018 figures – IPO targets delivered
2018 figures – IPO targets delivered Revenue EBITDA Net profit (PLN m) (PLN m) (PLN m) 115 x4 45 X4.5 36 PLN 26 m - MSOP target 27 17 11 8 5 3 2016 2017 2018 2016 2017 2018 2016 2017 2018 • Global success of Fishing Clash • Extended development pipeline • EBITDA target overdelivery 22
Slide 23: Market data
Market data Share price performance since IPO (PLN) Market data Data as of 22.11.2019 close 170 Market cap PLN 1 279 M (USD 329 M) Volume traded 5 days (% of capital) 53 991 shares (0,8%) Volume traded 1 month (% of capital) 443 071 shares (6%) 150 Turnover 5 days PLN 9,2 M (USD 2,4 M) Turnover 1 mo
Slide 24: Mobile games - the fastest-growing segment of entertainment market
Mobile games - the fastest-growing segment of entertainment market Mobile games in the entertainment market (USD bn) Mobile games in the video games market (USD b) 129 +6,2% 123 116 109 CAGR 2016-20F 101 39 Mobile Gry games mobilne 13,6% 65 64 +13,6% 59 21 52 Streaming Video wideo streaming 12,8% 46
Slide 25: Premium (AAA) vs Free 2 Play (F2P)
Premium (AAA) vs Free 2 Play (F2P) Successful AAA lifcycle* Successful F2P lifecycle* Digital distribution: 70/30 revenue share 1day 5days 10days 1month 1year 2year 3year 4year 5year 5days 10days 1month 1year 2year 3year 4year 5year Key KPI: number of copies sold, price per copy Key KPI: Daily avera
Slide 26: Results summary – P&L
Results summary – P&L Selected items of P&L in k PLN 4Q’17 1Q’18 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 3Q’19 q/q r/r Revenues from sales 10 012 14 400 23 871 35 436 41 551 45 304 49 878 67 650 +36% +91% - from Fishing Clash 2 732 7 560 17 527 28 846 34 831 37 524 43 147 57 896 +34% +101% - from Let's Fish 4
Slide 27: Results summary – balance sheet
Results summary – balance sheet Selected positions in k PLN 4Q’17 1Q’18 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 3Q’19 ASSETS Fixed assets 2 160 581 2 444 499 2 760 754 2 962 791 2 701 316 3 733 356 4 432 741 5 175 668 Trade receivables 4 551 180 6 684 397 8 734 138 12 228 250 10 671 417 16 249 070 15 651 927
Slide 28: Results summary – cash flows
Results summary – cash flows Selected positions in k PLN 4Q’17 1Q’18 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 3Q’19 OPERATING ACTIVITIES Profit before tax 3 956 293 6 228 989 9 302 427 12 633 103 16 684 655 12 674 129 15 944 337 22 316 356 Total adjustments -517 057 -1 504 724 -742 700 -641 523 1 100 238 -299
Slide 29: Geographic breakdown of revenues
Geographic breakdown of revenues In k PLN 4Q’17 1Q’18 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 3Q’19 q/q y/y North America 2 672 4 822 10 938 15 732 16 254 18 841 21 646 28 718 +33% +83% Europe 5 222 6 404 8 818 14 597 19 344 19 059 19 790 26 551 +34% +82% Poland 1 558 1 556 1 762 2 534 3 598 3 367 3 170 3 918
Slide 30: Changes in accounting principles
Changes in accounting principles Changes in booking revenues according to IFRS 15 „Revenue is recognized when the customers has received all the benefits associated with the performance obligation” • Payment -> a player purchases virtual currency Payment Revenue • Revenue -> the player uses the virt
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: Disclaimer
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 herein