Ten Square Games Sa · GPW:TEN
Ten Square Games Sa — Q2 2023 Earnings Presentation
34 slides from Ten Square Games Sa's earnings presentation, Sep 7, 2023
Slide 1: Q2 2023 results
Q2 2023 results September 7th, 2023
Slide 2: Q2 2023 Performance
Q2 2023 PERFORMANCE
Slide 3: Q2 2023 Performance: weak core portfolio performance
Q2 2023 PERFORMANCE Weak core portfolio Decrease in financial Recovery measures performance performance -13% Q1’23 / Q2’23 Bookings Termination of 2 projects: of bookings q-o-q PLN -18% q-o-q PLN 123.6M 101.2M Q1’23 PLN 26.6 M -31% Q2’23 PLN 5.1 M of bookings q-o-q TOTAL COST OF IMPAIRMENT IN 1H 2023
Slide 4: Revised strategy, execution and first signs of rebound
Q2 2023 PERFORMANCE Focused efforts on main products and reduced cost base resulted in better KPIs and 2023 highest monthly Adjusted EBITDA level. Revised strategy Execution First signs of rebound ❖ FOCUS ON THE DEVELOPMENT OF MAIN PRODUCTS ❖ introduction of significant 11.0% 12.5% upgrades to the gam
Slide 5: Performance update
Performance update
Slide 6: Fishing Clash performance
Fishing clash performance ■ Q2’23 brought continuation of decline in bookings – down by 13% q-o-q M PLN ■ UA activity focused on profitability of campaigns ■ Lower UA spend in Q2’23 resulted in ABPU decrease, average MAU showed a decrease of 7.6% ■ Implementation of recovery plan and team strengtheni
Slide 7: TSG Store with Fishing Clash offer
TSG STORE with Fishing clash offer June 2023 July 21st, 2023 May 2023 TSG STORE TSG Store tested by VIP Players upgrade, loyalty program, TSG Store available for all FC further tests players ❖ TSG Store enables players to purchase in-game products and exclusive offers directly through the platform lo
Slide 8: Fishing Clash development
Fishing clash development May Technological optimization elimination of technological bugs and upgrade of graphics resulted in improved user experience and increase of organic registrations Progressive badge & Boss hunt features new features aimed at increased user engagement New Approach to LiveOps
Slide 9: Fishing Clash development
Fishing clash development Fishing Clash received two major feature upgrades (Power Score and Bingo) easily noticeable for players and massive behind the scenes work improving technical aspects of the game (user experience), retention and engagement of 8.0% 14.5% m/m in July m/m in August players as
Slide 10: Hunting Clash performance
Hunting clash performance ■ Decrease in the level of bookings q-o-q in Q2’23 comes from smaller number of event/locations in game – one in Q2’2023 vs M PLN three in Q1’2023 and decreased UA budget ■ Number of LiveOps (new locations) in game restored in the following months (one location per month) ■
Slide 11: Hunting Clash development
HUNTING clash development May Hunt box new feature for beginner players improving retention and engagement of players Hunting pass upgrade aimed at increased engagement of users New format of events in the game new premium format of events with dedicated sales offer improving engagement and monetizat
Slide 12: Hunting Clash development
Hunting clash development Hunting Clash team restored proper pipeline of LiveOps events which drive game monetization, introduced two major features - one for beginner level players (Hunt box) and one for advanced 25.3% 10.1% players (Hunt multiplier). The game underwent technical m/m in July m/m in
Slide 13: Wings of Heroes performance
Wings of Heroes performance Launch of the ■ Big slump in bookings q-o-q in Q2’23 due to cut of marketing game - October expenditure and decision to introduce major changes to the game 2022 M PLN ■ The team focus on rebuilding the engine of the game which was necessary to be able to build depth of th
Slide 14: Wings of Heroes overhaul
Wings of Heroes overhaul May Rebuilding the engine of the game to increase the depth of the game and ultimately make it the game for years to play Upgrade of the event system introduced improvements allowed for more events in the game - six in Q2 2023; it improved engagement and retention Upgrade of
Slide 15: Wings of Heroes overhaul
wings of heroes overhaul Wings of Heroes team rebuilt the engine of the game. It is the basis and investment in the future growth of the game. Introduced changes will allow to build the depth of the game and introduce monetization features. Introduced changes already improved retention and conversio
Slide 16: Financial results
Financial results
Slide 17: Profit and loss dynamics
Profit and loss dynamics M PLN Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 1• Drop in bookings, caused mainly by Revenues from sales 126.6 132.9 131.2 117.4 104.9 a weak performance of Fishing Clash (decline by 13% q-o-q). Other 1 Bookings 123.5 137.5 138.6 123.6 101.2 titles in portfolio also presented weaker nu
Slide 18: Cash flow generation with a strong cash pool
Cash flow generation with a strong cash pool M PLN Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Adjusted EBITDA 28.4 35.0 35.3 27.6 21.9 Net Cash Flows from Operating Activities 30.6 31.7 22.3 29.9 28.6 Net Cash Flows from Investing Activities (15.4) (8.0) (8.4) (14.7) (9.5) Net Cash Flows from Financing Activitie
Slide 19: 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**) Dividend Per Share *TSG became publicly listed company in May 2018. ** depe
Slide 20: Summary
SUMMARY
Slide 21: Summary
sUMMARY BUSY SUMMER IN TSG ■ Hard work and focus on strategic objectives bring first positive results in July and August. ■ Strengthened teams pursue clear development roadmaps for each of the product. ■ Leaner cost base and revised strategy with the prospects of sustainable revenue growth & profitabi
Slide 22: Investor's calendar
Investor’s calendar
Slide 23: Investor's calendar
Investor’s calendar Events we’re attending: ■ Emerging & Frontier Virtual Investor Conference - October 30th - November 3rd, 2023 ■ WOOD's Winter Wonderland EMEA Conference in Prague – December 7th, 2023 Company news flow: ■ Q3 2023 Sales Update – early October 2023 ■ Q3 2023 Financial Report – 20th,
Slide 24: Q&A session
Q&A session
Slide 25: Thank you!
Thank you! Contact details: Nina Graboś – IR & PR Director nina.grabos@tensquaregames.com
Slide 26: Profit and loss report
Profit and loss report Selected positions in k PLN 2021 Q1’22 Q2’22 Q3’22 Q4’22 2022 Q1’23 Q2’23 Revenues from sales 634,045 150,335 124,143 132,913 131,167 538,558 117,450 104,932 Fishing Clash 482,882 95,827 84,385 88,774 86,980 355,966 72,558 63,194 Let’s Fish 14,474 3,099 2,394 2,380 2,490 10,63
Slide 27: Balance sheet
Balance sheet Selected positions in k PLN Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 ASSETS Fixed assets 19,091 23,994 291,171 298,866 320,497 326,192 340,728 314,138 297,613 279,861 Receivables 57,331 45,946 50,624 62,041 38,709 33,613 35,504 35,280 41,096 31,606 Cash and cash equi
Slide 28: Cash flow report
Cash flow report Selected positions in k PLN Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q1’23 OPERATING ACTIVITIES Profit/loss before tax 58,432 37,034 31,291 35,225 30,975 18,289 20,860 (6,685) (16,022) 10,049 Total adjustments 5,172 22,152 16,339 12,481 26,739 19,970 14,147 33,332 49,203
Slide 29: Method of determining adjusted EBITDA
Method of determining adjusted EBITDA Selected items of the P&L Statement in k PLN Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Operating profit IFRS 55,919 38,696 31,192 40,413 29,392 17,444 21,636 4,220 (14,414) 9,639 Amortisation +941 +978 +3,305 +2,360 +2,742 +3,725 +3,414 +5,977 +
Slide 30: General administrative costs
General administrative costs General administrative costs (PLN k) Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Regular costs 11,764 9,197 8,135 10,573 6,513 Salaries, subcontractor services 4,675 3,902 4,457 4,535 3,683 Subsidiaries costs 3,363 1,968 44 1,613 1,135 Office rental and maintenance 1,012 1,032 1,157 1,1
Slide 31: 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 32: 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 33: Depth of the game
a clear strategic focus DEVELOPMENT OF KEY PRODUCTS INTEGRATION OF ACQUIRED ASSETS PROFITABIZLITY Technical mastery of our games First time user experience New approach to feature development DEPTH OF THE GAME New monetization options Longer New Social for long term players Live Ops game play planes
Slide 34: 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