Digital Bros S.p.a. · MIL:DIB
Digital Bros — Investor Presentation (May 2020)
39 slides from Digital Bros's investor presentation, May 26, 2020
Slide 1: Presentation May 2020
digital entertainment
Slide 2: COVID-19 Update
COVID-19 UPDATE The world is currently undergoing a harrowing and unprecedented event: the COVID-19 pandemic. The health and well-being of our employees is our greatest priority. The precautionary measures adopted by governments around the world, to contain the spread of the contagion, locked people
Slide 3: Our Milestones
OUR MILESTONES 1989 2000 2007 2013 2015 2017 2020 FOUNDATION LIS TING RETAIL MOBILE MOBILE AND CONSOLE LAUNCH OF P UBLIS HING P UBLIS HING DEVELOPERS ACQUISITION BRAND NEW IP M O B IL E 3
Slide 4: We Develop, Publish and Market Multichannel Videogames
WE DEVELOP, PUBLISH AND MARKET MULTICHANNEL VIDEOGAMES STUDIOS PUBLISHING DISTRIBUTION DR Studios IP scouting and selection Retail Distribution Kunos Simulazioni Production Survey (Chains and Stores – Global Distribution Avantgarden Marketing & PR Network) Sales and Promotions Avantgarden Customer S
Slide 5: Market Structure
MARKET STRUCTURE CONSOLE END DEVELOPERS PUBLISHERS MANUFACTURERS DISTRIBUTORS RETAILERS CONSUMERS RETAIL CONSOLE END DEVELOPERS PUBLISHERS MARKETPLACES CONSUMERS DIGITAL MAY 2020 5
Slide 6: Digital Channels Driving Growth and Margins
DIGITAL CHANNELS DRIVING GROWTH AND MARGINS 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 RETAINS GAMER
Slide 7: Market Size
MARKET SIZE THE WORLDWIDE GAMES MARKET WILL REACH $200.8 BILLION BY 2023 +8.3% $200,80 Bn TOTAL MARKET CAGR $187,80 Bn 2019-2023 $174,20 Bn $159,30 Bn $145,70 Bn 2019 2020 2021 2022 2023 SOURCE: NEWZOO MAY 2020 MAY 2020 77
Slide 8: Premium and Free to Play
PREMIUM GAMES • Internal development/acquisition of contents rights from developers (IP ownership, long term agreements) • Distribution of the videogames through traditional international sales network and digital marketplaces (Steam, Sony Playstation Network, Microsoft Xbox Live and Epic Games Stor
Slide 9: Digital and Retail Channels
CHANNELS DIGITAL ANDRETAIL REVENUES TREND RETAIL VS DIGITAL DIGITAL RETAIL DISTRIBUTION DISTRIBUTION Online Marketplaces : Main Chains & Stores Steam Playstation N etwo r k E-commerce Xbox Live Epic Games Store 69% 72% 60% Game App Download : 40% 49% 42% 47% Mobile And T a b l e t Stores 2% 14% FY 2
Slide 10: Financials
1 FINANCIALS
Slide 11: Consolidated P&L – Q3 FY19/20 YTD
CONSOLIDATED P&L – Q3 FY19/20 YTD Euro million 31.03.20 31.03.19 Change Change % Gross revenue 99.1 42.6 56.5 132.7% Gross operating margin (EBITDA) 20.6 (1.6) 22.2 n.m. Operating margin (EBIT) 10.2 (7.6) 17.8 n.m. Profit/(loss) before tax 9.9 (7.5) 17.4 n.m. Net profit/(loss) 6.4 (5.9) 12.3 n.m. Re
Slide 12: Globalization
GLOBALIZATION 100% 90% 16% REVENUES TREND 33% ITALY VS INTERNATIONAL 80% 70% 62% 60% 79% 80% Italy 50% 82% 82% 93% International 40% 84% 86% 30% 67% 20% 38% 10% 21% 20% 18% 14% 18% 7% 0% 07/08 09/10 13/14 14/15 15/16 16/17 17/18 18/19 19/20 ACT ACT ACT ACT ACT ACT ACT ACT ACT + FORE MAY 2020 - FINAN
Slide 13: Revenue Breakdown by Segment
REVENUEBREAKDOWN BY SEGMENT CONSOLIDATED FY 18/19 CONSOLIDATED Q3 YTD ACTUAL + FY19/20 FORECAST Premium Games Premium Games 71.2% 88,8% Italian Distribution Italian Distribution 20.3% 6,5% Free to Play Free to Play 7.6% 5,2% Other Projects Other Projects 0.9% 0.5% MAY 2020 - FINANCIALS 13 13
Slide 14: Premium Games – Q3 FY19/20 YTD
PREMIUM GAMES – Q3 FY19/20 YTD Euro million 31.12.19 31.12.18 Change Change % Gross revenue 86.8 25.7 61.0 n.m. Net revenue 81.3 24.3 57.0 n.m. Gross operating margin (EBITDA) 24.8 1.6 23.2 n.m. Operating margin (EBIT) 16.6 (2.1) 18.7 n.m. FI S I CAL YEAR ENDING 30TH JUNE SOURCE: DIGITAL B RO S PREM
Slide 15: Revenue by Brand – Q3 FY19/20 YTD
REVENUE BY BRAND – Q3 FY19/20 YTD Euro million 31.03.20 % on total Control 30.0 34.6% Journey to the Savage Planet 10.9 12.6% Bloodstained 9.9 11.4% Terraria 9.7 11.2% Assetto Corsa 6.1 7.0% Indivisible 4.0 4.7% PAYDAY 2 3.1 3.6% Other Products 7.0 8.1% Retail Products 5.9 6.8% Premium Games 86.8 10
Slide 16: Free to Play – Q3 FY19/20 YTD
FREE TO PLAY – Q3 FY19/20 YTD Euro million 31.03.20 31.03.19 Change Change % Gross revenue 5.1 4.8 0.4 7.6% Net revenue 5.1 4.8 0.4 7.6% Gross operating margin (EBITDA) 1.2 1.4 (0.2) -14.2% Operating margin (EBIT) (0.08) (0.3) 231 73.8% FI S I CAL YEAR ENDING 30TH JUNE SOURCE: DIGITAL B RO S REVENUE
Slide 17: Net Financial Position and Investments
NET FINANCIAL POSITION OVER THE LAST YEARS * (70,00) 70 (60,00) 60 (50,00) 50 (40,00) 40 NET FINANCIAL INVESTMENTS ° (30,00) 30 POSITION (20,00) 20 (10,00) 10 - 0 10,00 -10 20,00 -20 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 H1Q3 Outlook * ADVANCES PAID FOR IPs AND L I C ENS ES + TANGIBLE AND INTAGIBL
Slide 18: Starbreeze AB Investment
STARBREEZE AB INVESTMENT SUCCESSFUL PROTECTION OF INTEREST IN PAYDAY – Starbreeze AB (SB) is a Swedish videogame developer and publisher owner o f the famous PAYDAY IP t h a t s u c c e s s f u l l y exited a reconstruction period on 6th December 2019. – Digit al B ros is a major stakeholder o f S t
Slide 19: Outlook
OUTLOOK – REVENUES GROWTH AT THE END OF THE FISCAL YEAR – EXPECTED IMPROVEMENT OF FINANCIAL MARGINS RESULTING FROM INCREASED DIGITAL SALES – LAUNCH OF ASSETTO CORSA COMPETIZIONE CONSOLE VERSIONS AND NINTENDO SWITCH VERSIONS OF INDIVISIBLE AND JOURNEY TO THE SAVAGE PLANET IN Q4 – DEATH STRANDING PC L
Slide 20: IP Portfolio
2 IP PORTFOLIO
Slide 21: What Happened in Recent Years
WHAT HAPPENED IN RECENT YEARS Our successful products generated cash We entered into the largest investment plan through To invest for growth strategic acquisitions and brand- new publishing deals MAY 2020 – IP PORTFOLIO 21
Slide 22: IP Portfolio
IP PORTFOLIO MAY 2020 LONG TERM THIRD AGRE E M E NTS PARTY PARTNERSHIPS OWNED IP 22
Slide 23: Large Quality IP Portfolio
LARGE QUALITY IP PORTFOLIO Metacritic's #1 Publisher of the Year Scored Distinct Average Metascore Points Products Titles Metascore Distribution 5 8 80.0 306.7 17 8 79.9 301.4 24 24 80 299.2 10 7 77.8 296.8 24 13 79.1 291.1 BAFTA Nominations 11 out of 11 nomination 11 out of 11 nomination 23
Slide 24: Significant Releases by Fiscal Year
SIGNIFICANT RELEASES BY FISCAL YEAR PREMIUM AND FREE TO PLAY PREMIUM DIGITAL & RETAIL TBA 1 TBA 2 FY18/19 FY19/20 * Console FY20/21 TBA 3 TBA 4 FREE TO PLAY CONSOLE AND MOBILE MAY 2020 – IP PORTFOLIO 24
Slide 25: 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, PS4 AND XBOX ONE – PUBLISHING PARTNERSHIP WITH EPIC GAMES
Slide 26: Bloodstained
BLOODSTAINED – LATEST CREATION OF KOJI IGARASHI, THE FORMER SERIES PRODUCER OF THE CASTELVANIA FRANCHISE – THE GAME IS AVAILABLE FOR PS4, XBOX ONE, PC WINDOWS, LINUX AND OSX – HIGH METACRITIC SCORE (AVG. ABOVE 83) – EURO 23.8 MILLION LTD REVENUES – EXPECTED LIFETIME REVENUES OF AT LEAST EURO 30 MILL
Slide 27: 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 (ACQUIRED BY GOOGLE DEC 2019) – WORLDWIDE PUBLISHING RIG
Slide 28: Assetto Corsa
ASSETTO CORSA – ASSETTO CORSA IS THE #1 RACING SIMULATOR – 6.9 MILLION COPIES SOLD AND MORE THAN EURO 42.2 MILLION REVENUES – NEW EPISODE ASSETTO CORSA COMPETIZIONE: OFFICIAL GAME OF THE BLANCPAIN GT SERIES (3 YEARS PARTNERSHIP) – FULLY LICENSED GT CARS FROM TOP MANUFACTURERS: FERRARI, LAMBORGHINI,
Slide 29: Death Stranding
DEATH STRANDING – GROUNDBREAKING EXPERIENCE FROM LEGENDARY GAME CREATOR HIDEO KOJIMA – CONSOLE VERSION PUBLISHED BY SONY INTERACTIVE ENTERTAINMENT – Released on November 8, 2019 – High Metacritic Score: avg. 83 – WORLDWIDE PUBLISHING RIGH TS ON PC FOR D I G I T A L BROS – EXPECTED LIFETIME REVENUE F
Slide 30: Hawken
HAWKEN – MECH GENRE: COLLECT, BUILD AND CUSTOMIZE YOUR MECH – STRONG F2P SYSTEM WITH 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 long-term produ
Slide 31: Digital Bros - A Snapshot
DIGITAL BROS - A SNAPSHOT • GLOBAL COMPANY, OPERATING ACROSS THE VIDEOGAME 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. ASSETTO CORS
Slide 32: Appendix
3 APPENDIX APPENDIX 29 29 29 29
Slide 33: Worldwide Presence
WORLDWIDE PRESENCE HEADQUARTERS: MILAN * PEOPLE WORLDWIDE 216 PEOLE WORLDWIDE MAY 2020 - APPENDIX 33
Slide 34: Cloud & Streaming: The Future of Gaming
CLOUD & STREAMING: THE FUTURE OF GAMING CLOUD GAMING Videogames c a n be played on any device without adv a n t a ges: mobility constant upgrades owning a specific hardware and with no l o c a l / ubiquity no expensive physical copy o f the game it self. Videogames are hardware streamed from the clo
Slide 35: Who Are Our Competitors
WHO ARE OUR COMPETITORS RETAIL DIGITAL F2P DEVELOPMENT FAR EAST PUBLISHING PUBLISHING FOCUS HOMEINTERACTIVE FRONTIER GLUMOBILE PARADOX STARBREEZE AB THQ NORDICAB TEAM 17 BIG BEN GROUP DIGITALBROS S O U R C E : D I G I TA L B R O S , MAY 2020 - APPENDIX 35
Slide 36: Italian Distribution – Q3 FY19/20 YTD
ITALIAN DISTRIBUTION – Q3 FY19/20 YTD Euro million 31.03.20 31.03.19 Change Change % Gross revenue 6.8 11.7 (4.9) -41.7% Net revenue 6.3 10.3 (4.0) -38.7% Gross operating margin (EBITDA) (1.2) 0.1 (1.3) n.m. Operating margin (EBIT) (1.3) (0.2) (1.1) n.m. F I S ICA L YEAR ENDING 30TH JUNE SOURCE: DIG
Slide 37: Other Activities – Q3 FY19/20 YTD
OTHER ACTIVITIES – Q3 FY19/20 YTD Euro million 31.03.20 31.03.19 Change Change % Gross revenue 0.5 0.4 0.1 10.4% Net revenue 0.5 0.4 0.1 10.4% Gross operating margin (EBITDA) 0.0 (0.2) 0.3 n.m. Operating margin (EBIT) 0.1 (0.3) 0.2 82.5% F I S ICA L YEAR ENDING 30TH JUNE SOURCE: DIGITAL BROS DIGITAL
Slide 38: 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 RIG
Slide 39: Digital Bros S.p.A. contact details
Digital Bros S.p.a. Via Tortona, 37 20144 Milano, Italia www.digitalbros.com