Ten Square Games Sa · GPW:TEN
Ten Square Games Sa — Q3 2022 Earnings Presentation
32 slides from Ten Square Games Sa's earnings presentation, Nov 22, 2022
Slide 1: Q3 2022 results
Q3 2022 results November 22nd, 2022
Slide 2: Q3 2022 highlights
Q3 2022 highlights
Slide 3: Q3 2022 Highlights
Q3 2022 HIGHLIGHTS Improved Q3 to Q2 Wings of Heroes 1 performance 2 Core portfolio growth 3 global launch Q2’22 / Q3’22 Bookings Revenue (PLN k) +5% PLN +11% q-o-q PLN of bookings 123.5M 137.5M q-o-q 1,154 Q2’22 / Q3’22 Adj. EBITDA +30% of bookings 245 283 PLN +23% q-o-q PLN q-o-q 21 68 145 28.4M 3
Slide 4: Performance update
Performance update
Slide 5: Fishing Clash performance
Fishing clash performance Bookings and marketing expenses (PLN M, excl. FC China) 50 Bookings Marketing expenses 40 30 M PLN 48.1 44.4 42.9 44.4 20 39.1 39.0 38.2 39.2 40.3 35.7 35.5 32.7 32.4 32.7 31.9 29.5 30.0 28.8 28.2 27.8 29.5 24.4 10 8.4 6.9 7.3 8.3 8.2 8.2 8.2 6.3 6.6 7.1 6.2 7.4 7.0 7.0 6.2
Slide 6: Hunting Clash performance
Hunting clash performance Bookings and marketing expenses (PLN M) Bookings 12 Marketing expenses 9 M PLN 6 11.1 11.1 11.3 11.4 11.1 11.5 11.4 11.3 10.5 10.7 9.8 9.4 9.2 9.3 9.7 9.7 8.4 8.5 8.0 8.4 7.3 7.8 7.7 3 5.1 6.0 6.1 5.4 5.3 5.8 5.6 4.5 4.4 4.4 4.8 4.8 4.0 3.6 3.5 4.0 3.9 4.0 3.0 2.8 0.5 0 Jan
Slide 7: Rortos performance
Rortos performance Rortos gross revenue (PLN k) 4,500 +70% 4,000 Performance of acquired studio – Rortos’ revenue is 70% 1 higher than in Feb’22 3,500 3,000 Wings of Heroes global launched – promising early metrics 2,500 2 in the selected markets, with the global launch taking place in Oct’22 4,091
Slide 8: Wings of Heroes' global launch
Wings of heroes’ global launch Cumulative 28-days LTV of first week’s cohort after global launch • Global Launch taking place at the beginning of Oct’22 • The game has already become the #3 biggest title in Ten Square 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Games’
Slide 9: Production pipeline – Undead Clash
PRODUCTION PIPELINE – undead clash • Zombie shooter with a „clash” metagame • Testing players’ engagement on a bigger scale in the US • Increasing User Acquisition efforts • Adding content and additional mechanics to increase the monetization potential in order to move to the next phase of soft laun
Slide 10: Production pipeline – Fishing Masters
PRODUCTION PIPELINE – Fishing masters • Third game in the fishing segment, where Ten Square Games has strong competences • The aim is to reach more casual audience than Clash games • First external test is happening this month • Early KPIs supporting further development of the game WG 10
Slide 11: Production pipeline – Social Wars IP
PRODUCTION PIPELINE – Social Wars IP + • Gamesture has developed strong more Social Wars IP, that may be low- cost transferable into other potential themes themes • Both products, Slash & Roll and The Gang are in the early phase of development, with quality KPIs WG 11
Slide 12: Financial results
Financial results
Slide 13: Profit and loss dynamics
Profit and loss dynamics M PLN Q1’22 Q2’22 Q3’22 Revenues from sales 150.3 126.6 132.9 •1 Bookings, driven mainly by a 1 Bookings 142.6 123.5 137.5 good performance of core portfolio, increased by 11% Gross profit on sales 134.5 106.5 115.7 q-o-q margin 89% 86% 87% •2 User acquisition costs were Sel
Slide 14: Portfolio diversification
Portfolio diversification Bookings’ structure (%) • Portfolio diversification thanks Q3’21 Q1’22 Q3’22 to the organic (Hunting Clash) and inorganic initiatives 5% 4% (Rortos) 5% 5% 5% 7% • Development pipeline (Undead 18% Clash, Fishing Masters, Hero 23% 24% Legacy) as well as support of the current
Slide 15: Cash flow generation with a strong cash pool
Cash flow generation with a strong cash pool M PLN Q1’22 Q2’22 Q3’22 Adjusted EBITDA 42.1 28.4 35.0 1 Net Cash Flows from Operating Activities 53.4 30.6 31.7 1• Significant Net Cash Flows 2 Operating Cash Flow conversion ratio 127% 108% 91% from Operating Activities 2• Strong Operating Cash Flow con
Slide 16: Current focus
Current focus
Slide 17: Expansion
Strategy status 2011 2017 2020 2021 2022 2023+ The Next Big Clashes Wroclaw More Sims Core Game Development Studios More New Games Expansion Expansion WARSAW BERLIN BUCHAREST M&A More M&A MZ 17
Slide 18: Current focus
Current focus PORTFOLIO PERFORMANCE Focus on the growth of current portfolio. Recovery in Q3’22, but market uncertainty remains PIPELINE Wings of Heroes successfully global launched in Oct’22, while Undead Clash and Fishing Masters are moving to the next stages of development POST MERGER INTEGRATION
Slide 19: Investor's calendar
Investor’s calendar
Slide 20: Investor's calendar
Investor’s calendar Events we’re attending: • GPW Innovation Day – 2nd December • WOOD's Winter Wonderland EME Conference – 8th December Company news flow: • Q4 2022 Sales Update – early January 2023 • 2022 Full Year Financial Report – March/April 2023 (dates of reporting for 2023 will be published
Slide 21: Q&A session
Q&A session
Slide 22: Summary
Summary Return to a growth trajectory this quarter +11% Q3’22 to Q2’22 growth of bookings Wings of Heroes successful global launch, with a promising scaling potential Exciting pipeline of new titles entering final stages of the development process Strategy update during annual presentation in early
Slide 23: Thank you!
Thank you! Contact details: Nina Graboś – IR & PR Director nina.grabos@tensquaregames.com
Slide 24: Backup
backup
Slide 25: Profit and loss report
Profit and loss report Selected positions in k PLN 2020 Q1’21 Q2’21 Q3’21 Q4’21 2021 Q1’22 Q2’22 Q3’22 Revenues from sales 578,195 174,114 164,885 147,951 147,095 634,045 150,335 124,143 132,913 Fishing Clash 562,335 131,659 114,983 114,371 121,868 482,882 95,827 84,385 88,774 Let’s Fish 16,478 4,20
Slide 26: Balance sheet
Balance sheet Selected positions in k PLN Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 ASSETS Fixed assets 11,215 11,604 14,395 16,101 19,091 23,994 291,171 298,866 320,497 326,192 340,728 Receivables 34,447 58,724 57,205 47,589 57,331 45,946 50,624 62,041 38,709 33,613 35,504 C
Slide 27: Cash flow report
Cash flow report Selected positions in k PLN Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 OPERATING ACTIVITIES Profit before tax 39,192 28,814 65,849 37,091 58,432 37,034 31,291 35,225 30,975 18,289 20,860 Total adjustments -7,735 -6,675 2,220 49,366 5,172 22,152 16,339 12,481 2
Slide 28: Method of determining adjusted EBITDA
Method of determining adjusted EBITDA Selected items of the Profit and Loss Statement in Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 k PLN Operating profit IFRS 55,919 38,696 31,192 40,413 29,392 17,444 21,636 Amortisation +941 +978 +3,305 +2,360 +2,742 +3,725 +3,414 Write-down for impairment - +3,761
Slide 29: General administrative costs and one-offs
General administrative costs and one-offs General administrative costs (PLN k) Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 One-off costs MSOP 7,291 7,294 7,294 9,361 11,305 761 6,033 M&A 0 0 3,669 18 1,760 3 1 Croatia costs 0 0 2,054 0 0 0 0 Normal costs Salaries 1,872 3,097 2,284 4,117 5,463 4,675 3,
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: 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