Ten Square Games Sa · GPW:TEN
Ten Square Games Sa — Q3 2023 Earnings Presentation
34 slides from Ten Square Games Sa's earnings presentation, Nov 21, 2023
Slide 1: Q3 2023 Results
—_ Qu ten square games O03 2023 RESULTS November 21st, 2023
Slide 2: Q3 2023 Performance
O03 2023 PERFORMANCE
Slide 3: Q3 2023 Performance
Q3 2023 PERFORMANCE Strong core portfolio Improvement of financial performance performance Bookings Adjusted EBITDA +10.4% of bookings q-o-q 9.1% 53.4% +11.8% PLN PLN PLN of bookings 33.7M q-o-q PLN 110.4M 21.9M Highest 101.2M quarterly Adj. EBITDA in 2023 -16.3% of bookings q-o-q Q2 2023 Q3 2023 Q2
Slide 4: Performance Update
PERFORMANCE UPDATE
Slide 5: Fishing Clash performance
Fishing clash performance ■ Q3’23 brought growth of bookings – up by 10.4% q-o-q ■ Main focus of the team was on improving user experience and integration of multiple systems in the game ■ New strategy of Live Ops focused on long term effects and close cooperation M PLN with product team brings posi
Slide 6: Fishing Clash development
Fishing clash development New large features in Q3’ 2023 What’s ahead in Q4’ 2023 Bingo Main focus in Q3’ 2023: improvement of user experience Main focus in Q4’ 2023: game economy Introduction of bold, new features Web version of the game - Powe to make the game interesting November 2023 discovery a
Slide 7: Launch of the Fishing Clash web version
Launch of the Fishing Clash web version November, 13 2023 To reach new audience Traffic for TSG Store New immersive experience for users New marketing opportunities Web version of the Mobile game TSG Store game New business opportunities To experiment with cross play trend New elements supporting gr
Slide 8: Hunting Clash performance
Hunting clash performance ■ 11.8% growth in bookings q-o-q in Q3’23 comes from larger number of locations in game – three in Q3’ 2023 vs one in Q2’2023, M PLN engaging events and regular rollout of new features ■ Lower UA costs; strict focus on effectiveness of the campaigns ■ Dynamic increase in MA
Slide 9: Hunting Clash development
HUnting clash development New large features in Q3’ 2023 What’s ahead in Q4’ 2023 Main focus in Q3’ 2023: improvement of first user experience Main focus in Q4’ 2023: New revision of systems supporting weapon competitiveness in the game Introduction of new weapon system system improved conversion to
Slide 10: Hunting Clash offer enters TSG Store
Hunting clash offer enters tsg store May 2023 July, 2023 October 2023 TSG Store tested by TSG Store available for new graphic layout of VIP Players all FC players TSG Store June 2023 September 2023 October 2023 upgrade, loyalty Hunting Clash in event offers in program, further tests TSG Store Huntin
Slide 11: Wings of Heroes performance
Wings of Heroes performance ■ Bookings maintained at the similar level q-o-q despite further cut of marketing expenditure - first signs of stopping the downward trend M PLN ■ Changes in progression and economy of the game and introduction of LiveOps system at the end of Q3’ 2023 are the foundations
Slide 12: Wings of Heroes development
Wings of Heroes development Main developments in Q3’ 2023 New LiveOps system New content FTUE ■ introduced in September ■ 2 new maps to introduce players to ■ essential for development ■ 4 planes the game and explain of the game ■ over 200 scenarios mechanics of main ■ first effects will be of battl
Slide 13: Financial Results
FINANCIAL RESULTS
Slide 14: Profit and loss dynamics
Profit and loss dynamics M PLN Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Revenues from sales 132.9 131.2 117.4 104.9 105.6 1• Uptake in bookings, due to a strong performance of Fishing Clash (up by 10.4% q-o-q) and Hunting Clash (up by 11.8% q-o- 1 Bookings 137.5 138.6 123.6 101.2 110.4 q). Growth in Airline Co
Slide 15: General and administrative costs
General AND administrative costs General administrative costs (PLN k) Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Recurring costs 11,764 9,197 8,135 10,573 7,510 6,454 Salaries, subcontractor services 4,675 3,902 4,457 4,535 3,683 3,207 Subsidiaries costs 3,363 1,968 44 1,613 1,135 1,074 Office rental and m
Slide 16: Cash flow generation with a strong cash pool
Cash flow generation with a strong cash pool M PLN Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Adjusted EBITDA 35.0 35.3 27.6 21.9 33.7 Net Cash Flows from Operating Activities 31.7 22.3 29.9 28.6 32.5 Net Cash Flows from Investing Activities (8.0) (8.4) (14.7) (9.5) (2.0) Net Cash Flows from Financing Activities
Slide 17: Q4 Update
O4 UPDATE
Slide 18: Write-down of goodwill related to the acquisition of Rortos
Write-down of goodwill related to the acquisition of Rortos ■ Decision to write-down part of goodwill (EUR 9.4M) resulting from the acquisition of Rortos S.r.l. made on November 20th, 2023 ■ With the update of the Rortos financial forecasts, the estimated amount to be paid in earnout payments has de
Slide 19: Buyback of Shares
BuyBACK of Shares ■ In 2023 TSG’s net result is affected by one-off events as f.ex. December 19th 2023 non-cash write-downs of games and goodwill ■ Extraordinary Meeting of Shareholders to decide ■ These events are not related to cash generation potential of the about the motion of the TSG’s Managem
Slide 20: Summary
SUMMARY
Slide 21: Summary
sUMMARY PORTFOLIO PERFORMANCE BUILDING RESILIENT IMPROVED PERFORMANCE IN Q3 2023 Maintaining growth trajectory of current BUSINESS MODEL ■ Hard work and focus on strategic objectives bring portfolio of games with new features ■ TSG's Q3 2023 results highlight financial improvement of KPIs in Fishing
Slide 22: Investor's Calendar
INVESTOR’S CALENDAR
Slide 23: Investor's calendar
Investor’s calendar Events we’re attending: ■ WOOD's Winter Wonderland EMEA Conference in Prague - December 7th, 2023 ■ Bank Ochrony Środowiska: Development prospects in 2024 - January 8th, 2024 Company news flow: ■ Q4 2023 Sales Update – early January 2024 ■ 2023 Full Year Financial Report – March/
Slide 24: Q&A Session
O&A SESSION
Slide 25: Contact details
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 Q1’22 Q2’22 Q3’22 Q4’22 2022 Q1’23 Q2’23 Q3’23 Revenues from sales 150,335 124,143 132,913 131,167 538,558 117,450 104,932 105,572 Fishing Clash 95,827 84,385 88,774 86,980 355,966 72,558 63,194 69,738 Let’s Fish 3,099 2,394 2,380 2,490 10,634 2,172
Slide 27: Balance sheet
Balance sheet Selected positions in k PLN Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 ASSETS Fixed assets 291,171 298,866 320,497 326,192 340,728 314,138 297,613 279,861 285,980 Receivables 50,624 62,041 38,709 33,613 35,504 35,280 41,096 31,606 36,293 Cash and cash equivalents 107,632 139
Slide 28: Cash flow report
Cash flow report Selected positions in k PLN Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 OPERATING ACTIVITIES Profit/loss before tax 31,291 35,225 30,975 18,289 20,860 (6,685) (16,022) 10,049 23,205 Total adjustments 16,339 12,481 26,739 19,970 14,147 33,332 49,203 9,273 11,372 Amortisatio
Slide 29: Method of determining adjusted EBITDA
Method of determining adjusted EBITDA Selected items of the P&L Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Statement in k PLN Operating profit IFRS 31,192 40,413 29,392 17,444 21,636 4,220 (14,414) 9,639 25,032 Amortisation +3,305 +2,360 +2,742 +3,725 +3,414 +5,977 +4,978 +5,143 +4,969 Wr
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 80.0 shareholders; (exceeding 75% threshold of TSG’s dividend policy**) 72.7 72.3 70.0 60.0 Dividend Per Share 52.3 50.0 15 M PLN 40.0 10.00
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
Slide 34: Launch of the Fishing Clash web version
Launch of the Fishing Clash web version To reach new audience TSG Store Traffic for TSG Store New immersive experience for users New marketing opportunities Fishing Clash (mobile game) WEB version of the game New business opportunities To experiment with cross play trend New elements supporting grow