Ten Square Games Sa · GPW:TEN
Ten Square Games Sa — Q3 2024 Earnings Presentation
32 slides from Ten Square Games Sa's earnings presentation, Nov 14, 2024
Slide 1: Q3 2024 Presentation
— & ten square games O03 2024 HH) PRESENTATION —s///
Slide 2: Q3 2024 at a Glance
Slide 3: Q3 2024 Highlights
Q3 2024 HIGHLIGHTS Q2’24 / Q3’24 Execution of the plan to unlock the growth potential of main titles Bookings PLN +6.3% q-o-q PLN Focus on anti-churn strategy 96.2M 102.3M Q2’24 / Q3’24 Focus on monetization strategy (LiveOps) Adj. EBITDA Acceleration of growth in Wings of Heroes PLN -3.0% q-o-q PLN
Slide 4: Product Performance Update
PRODUCT PERFORMANCE UPDATE
Slide 5: Fishing Clash: Growth of Bookings and No. of users
Fishing clash: Growth of Bookings and No. of users ■ Q3’24 bookings increased by 4.3% q-o-q. Main focus of the team was on improvement of quality of user experience and LiveOps operations based on feedback from users ■ Implementation of anti-churn strategy and tests of frequency of new fisheries in
Slide 6: Hunting Clash: Growth of bookings and profitability
Hunting clash: Growth of bookings and profitability ■ Bookings increased by 3.9% q-o-q in Q3’24. ■ Focus of the team was on implementation of changes in LiveOps operations to support game’s monetization. First positive results especially in quality & diversity of M PLN events, Also, new features sup
Slide 7: Wings of Heroes flying high with consistent growth
Wings of Heroes flying high with consistent growth ■ Growth of bookings by 61.4% q-o-q in Q3’24 ■ Focus on building monetization depth of the game and introduction of wheel of fortune feature ■ Increased UA spending due to improvement in monetization M PLN ■ Growth of bookings in October by 12.5% m-
Slide 8: TSG Store: new initiatives to further boost the growth
TSG STORE: new initiatives to further boost the growth TSG Store % share in Group’s bookings 14.0% share of TSG Store bookings (October 2024) Growth of revenues flow through TSG Store in both products Positive effects of tests and adjustments introduced in Q3 2024 Finalizing the tests of special cur
Slide 9: Update on Prototype Development
UPDATE ON PROTOTYPE DEVELOPMENT
Slide 10: Prototypes: Maximizing Chances of Success
PROTOTYPES: MAXIMIZING CHANCES OF SUCCESS Prototyping approach TROPHY HUNTER Flying Next fast & effective selection process of the most developed by Rortos Results of gameplay tests promising projects based on market KPIs testing game concepts with low financial risk team of 2-3 people good initial
Slide 11: Decision to stop further tests of Fishing Champions
Decision to stop further tests of Fishing champions After the tests of gameplay we decided to stop further work on TROPHY HUNTER Focus on the most prospective projects Fishing Champions due to unsatisfactory with the best KPIs retention KPI’s acquisition costs limiting the financial risk the most ef
Slide 12: Financial Results
FINANCIAL RESULTS
Slide 13: Profit and loss dynamics
Profit and loss dynamics PLN m Q1’23 Q2’23 Q3’23 Q4’23 2023 Q1’24 Q2’24 Q3’24 1 Increase in bookings (up by 6.3%) q-o-q, thanks to better performance in main titles 1.a Revenues from sales 117.4 104.9 105.6 108.1 436.0 100.1 98.0 94.0 and 4th consecutive quarter of growth in Wings of Heroes as well
Slide 14: Deferral of revenue is required by IFRS 15
Deferral of revenue is required by financial standards (ifrs 15) it means we need to recognise revenue according to players’ lifetime Step 1. Step 2. Step 3. Bookings Model calculation Deferred revenue recognized at the moment when a player TSG needs to estimate the average unused part of virtual go
Slide 15: Cash flow generation with a strong cash pool
Cash flow generation with a strong cash pool M PLN Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Adjusted EBITDA 27.6 21.9 33.7 35.3 27.5 27.3 26.5 Net Cash Flows from Operating 29.9 28.6 32.5 30.5 32.4 26.8 28.1 Activities Net Cash Flows from Investing (14.7) (9.5) (2.0) (0.3) (1.4) (12.5) (1.4) Activi
Slide 16: TSG's approach to distribution of profit to shareholders
TSG’s approach to DiSTRIBUTION of profit TO shareholders TSG’s dividend policy allocation of up to 75% of consolidated net profit depending on the needs in terms of liquidity and investment plans of the company (on condition that the standalone net profit allows payment of such an amount). Forms of
Slide 17: PLN 385 M distributed to shareholders
History of profit DiSTRIBUTION TO shareholders* PLN 385 M distributed to shareholders Total of: PLN 252 M of dividend PLN 133 M of buyback *TSG became publicly listed company in May 2018. Presented profit distribution does not include dividends paid out before TSG became listed company. MJ 17
Slide 18: Summary
SUMMARY
Slide 19: Summary: on the strategic path
sUMMARY: on the strategic path Focus on unlocking growth first positive results of anti-churn strategy in main products in Fishing Clash and Hunting Clash Acceleration of growth Wings of Heroes & TSG Store effective selection of the most prospective projects Prototyping for success in the second rou
Slide 20: Investor's Calendar
INVESTOR’S CALENDAR
Slide 21: Investor's calendar
Investor’s calendar Company news flow: ■ Q4 2024 Sales Update – early January 2025 ■ Reporting calendar for 2025 - early January 2025 Investors’ conferences: ■ Wood’s Winter Wonderland Investor Conference - December 5th, 2024 ■ 2025 Business Outlook by BoŚ - January 13th, 2024 NG 21
Slide 22: Q&A Session
O&A SESSION
Slide 23: Contact details
Contact details: Nina Graboś – IR, PR & ESG Director nina.grabos@tensquaregames.com
Slide 24: Financial Results
FINANCIAL RESULTS
Slide 25: Profit and loss report
Profit and loss report Selected positions in k PLN Q1’23 Q2’23 Q3’23 Q4’23 2023 Q1’24 Q2’24 Q3’24 Revenues from sales 117,450 104,932 105,572 108,122 436,076 100,118 97,998 93,979 Fishing Clash 72,558 63,194 69,738 68,743 274,232 61,219 59,597 62,158 Let’s Fish 2,172 1,852 1,614 1,890 7,529 1,732 1,
Slide 26: Balance sheet
Balance sheet Selected positions in k PLN* 31.03.23 30.06.23 30.09.23 31.12.23 31.03.24 30.06.24 30.09.2024 ASSETS Fixed assets 297,613 279,861 285,981 215,778 214,234 212,420 208,412 Receivables 41,096 31,606 36,293 38,937 36,253 33,742 32,760 Cash and cash equivalents 140,249 105,379 133,826 162,8
Slide 27: Cash flow report
Cash flow report Selected positions in k PLN Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 OPERATING ACTIVITIES Profit/loss before tax (16,022) 10,049 23,205 (0,184) 20,720 23,266 13,888 Total adjustments 49,203 9,273 11,372 27,985 13,803 (1,784) 16,397 Amortisation 5,289 5,143 4,969 4,809 4,506 4,429 3
Slide 28: Method of determining adjusted EBITDA
Method of determining adjusted EBITDA Selected items of the P&L Statement in Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 k PLN Operating profit IFRS (14,414) 9,639 25,032 (16,739) 19.108 23,278 15,607 Amortisation +4,978 +5,039 +4,969 +4,809 +4,506 +4,429 +3,953 Write-down for impairment +26,573 +5,11
Slide 29: General and administrative costs
General AND administrative costs General administrative costs (PLN k) Q2’23 Q3’23 Q4’23 2023 Q1’24 Q2’24 Q3’24 Recurring costs 7,510 6,454 6,860 31,398 6,288 6,905 6,453 Salaries, subcontractor services 3,683 3,207 3,070 14,495 3,039 3,011 3,081 Subsidiaries costs 1,135 1,074 ,972 4,794 926 1,024 1,
Slide 30: Accounting principles for revenues – IFRS 15
Accounting principles for revenues – IFRS 15 Virtual currency • Payment -> a player purchases virtual currency Bookings 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 -> un
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