Stillfront Group Ab · OMXSTO:SF
Stillfront Group Ab — Investor Day (2023)
52 slides from Stillfront Group Ab's investor day presentation, 2023
Slide 1: Agenda
STILLFRONT CMD 2023 Agenda Welcome and agenda Studio deep dive: 6waves › Alexis Bonte, COO › Alexis Bonte, COO with Rex Ng, President 6waves Entering a new phase Outgrowing a challenging market › Jörgen Larsson, CEO & Founder › Phillip Knust, CPO Breaking down Stillfront’s financials Studio deep div
Slide 2: Stillfront's next phase
Stillfront’s next phase Jörgen Larsson, CEO & Founder
Slide 3: Stillfront's mission
WHY WE D O WHAT WE D O Stillfront’s mission: We strive to make a positive impact in our gamers’ everyday lives
Slide 4: Stillfront's vision
WHAT WE WANT TO ACHIEVE Stillfront’s vision: We want to build the best games company in the world
Slide 5: Stillfront's fourth phase
STILLFRONT’S GROWTH JOURNEY Stillfront’s fourth phase Move to main market Nasdaq Stockholm 2023- Phase IV: The Stillops platform The synergy established Geographic phase expansion Genre broadening and diversification Market position IPO on Nasdaq in strategy games First North Stillfront 2019-2022 fo
Slide 6: Our key corporate pillars
OUR KEY CORPORATE PILL ARS SYNERGIES Stillops platform SCALE STRUCTURE Network of studios & talent ENTREPRENEURSHIP 6
Slide 7: We did not fully reach our ambitious scale targets
FINANCIAL TARGETS 2021-2023 We did not fully reach our ambitious scale targets The financial targets The updated financial targets from November 2019: from September 2020: 4bn 35% 10bn 35% SEK in revenues adjusted EBIT SEK in revenues adjusted EBIT by 2024 margin by 2023 margin
Slide 8: 2022 was a difficult year for the mobile games industry
THE MARKET IN 2022 2022 was a difficult year for the mobile games industry › The global mobile games market declined in 2022 following several years of strong growth 92 › Weak second half of 2022 expected to impact first 87 half of 2023 81 › Market expected to return to growth in coming 66 years, wi
Slide 9: There have been headwinds, but we could also have done things better in 2022
STILLFRONT IN 2022 There have been headwinds, but we could also have done things better in 2022 › Certain product investments in the past year have not lived up to our ROI requirements › One-time amortization related to specific products communicated in Q4 › Insufficient focus on growing margins in
Slide 10: A stable business with high margins and strong cash generation
STILLFRONT IN 2022 A stable business with high margins and strong cash generation › Stillfront significantly outgrew the mobile games market in 2022 › Generated strong free cash flow despite elevated product investments › Maintained strict payback requirements on user acquisition spend with a 180-da
Slide 11: Successful game franchises are important for continued growth and profitability
Successful game franchises are important for continued growth and profitability › Stillfront has a diversified portfolio of major game franchises › Five game franchises >500 MSEK in bookings in 2022 › Twelve game franchises >200 MSEK in bookings in 20221 › Existing game franchises have large and loy
Slide 12: Core strategy: connect and empower the best game teams
STILLFRONT’S UNIQUE OPERATING MODEL Core strategy: We connect and empower the best game teams around the world through our unique Stillops platform
Slide 13: Stillops unlocks value for our studios
STILLFRONT’S UNIQUE OPERATING MODEL Stillops unlocks value for our studios Building the best games company in the world COLLABS HUBS TECH & DATA Studio-to-Studio Expertise & Services Shared Tools & Technology Collaborations Provided by Hubs Provided by Group SYNERGIES › Knowledge sharing › Global ma
Slide 14: We will continue to grow with high margins and strong cash generation
ACTIONS GOING FORWARD We will continue to grow with high margins and strong cash generation to deliver value for our shareholders › Leverage our diversification › Continued strict payback targets on user acquisition enabled by dynamic allocation across our diversified portfolio › Leverage our franch
Slide 15: A new phase requires new financial targets
FINANCIAL TARGETS FROM 2023 A new phase requires new financial targets 1. 2. 3. Annual organic revenue Annual adjusted Leverage ratio3 below growth above EBITDAC2 margin in the 2.0x addressed market1 range 26-29% Including cash earnouts Supported by selective next 12 months and accretive M&A Stillfr
Slide 16: Breaking down Stillfront's financials
Breaking down Stillfront’s financials Andreas Uddman, CFO
Slide 17: Stillfront has scaled to a global games company
A GLOBAL GAMES COMPANY Stillfront has scaled to a global games company Net revenue 2022 Adjusted EBIT 2022 CFFO 2022 23 studios >7 billion SEK >2 billion SEK >2 billion SEK 2022 3.6x 3.1x 4.2x +10 in 3 years1 in 3 years in 3 years in 3 years 1 Full-year 2022 compared to full-year 2019
Slide 18: A diversified portfolio enables efficient capital allocation of user acquisition
ALLOCATION OF USER ACQUISITION A diversified portfolio of games and studios enable for efficient capital allocation of user acquisition Adjusted EBITDA margin per studio1 in 2022 100% 80% 60% Group 40% Adjusted EBITDA margin 20% 0% Games and studios +110% move in and out of +10% different growth pha
Slide 19: A profitable and growing business
STILLFRONT’S PROFITABILIT Y A profitable and growing business Stillfront Group adjusted EBITDAC LTM quarterly 2018-2022 › New financial target to reach Adj EBITDAC1 at 8000 35.0% between 26 and 29 percent 7000 30.0% › Adj EBITDAC a good measure of underlying value creation in the business 6000 25.0%
Slide 20: Clear path to further strengthened profitability
STILLFRONT’S PROFITABILIT Y Clear path to further strengthened profitability +3.0pp +1.0pp +5.0pp +1.0pp +/- 0pp • Increase share of • Highly variable • Utilize group • Focus product advertising cost purchasing power investments on revenues • Maintain strict • Standardize and established game • Lowe
Slide 21: Strong growth in cash flow generation
STILLFRONT’S CASH FLOW GENERATION Strong growth in cash flow generation Total FCF 4.6x › Stillfront has grown FCF by 4.6x since 2019, driven by a combination of organic growth and acquisitions › Acquisitions have been partly financed with 996 earnout component, where earnouts are based on the acquir
Slide 22: Continued conservative leverage and well-balanced maturity profile
STILLFRONT’S FINANCING PL ATFORM Continued conservative leverage and well-balanced maturity profile Continued conservative leverage ratio in line with Well-balanced maturity profile with no interest-bearing historic levels debt maturing in the coming twelve months 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 1.8
Slide 23: Strong balance sheet and cash flow generation creates financial flexibility
FINANCIAL SUMMARY Strong balance sheet and cash flow generation creates financial flexibility › New financial targets communicated today with a clear outlined path to reach them › Strong cash generation, following several years of building scale › Good financial position with a diversified financing
Slide 24: Building a sustainable gaming business
Building a sustainable gaming business Sofia Wretman, EVP Communications & Sustainability
Slide 25: The world loves to play digital games
EVERYONE IS PL AYING The world loves to play digital games >3bn More than 3 billion people play digital games globally, with almost 2.7 billion playing on mobile gamers Everyone is playing. Average age of a gamer in the US is 33 years old (almost 80% >18) and ~60m monthly active users means female g
Slide 26: Our mission
OUR MISSION We want to make a positive impact in our gamers’ everyday lives. To achieve this, we create social, entertaining and affordable games that can be enjoyed in a sustainable way. 26
Slide 27: Our sustainability roadmap
STILLFRONT’S ESG PL AYBO OK Our sustainability roadmap The roadmap presents the way forward for Stillfront studios to advance the sustainability commitment in the operations. The roadmap is divided into three phases: 1. Comply 3. Integrate 2. Develop The studio works with sustainability as an Maturi
Slide 28: Sustainability achievements up until 2022
ESG POSITION Sustainability achievements up until 2022 2019 2020 2021 2022 Environmental Environmental Environmental Environmental Initiated data collection Climate forum established Climate reduction impact analysis Commitment to Science Based Climate neutral since 2019 Climate neutral 2020 Climate
Slide 29: Focus areas for 2023
LOOKING AHE AD Focus areas for 2023 Implement a reduction plan Continue strengthening our Increase our focus on talent and targets according to the data privacy controls management across the Science Based Targets throughout the group group initiative (SBTi)
Slide 30: Operationalizing Stillops to level up synergies
Operationalizing Stillops to level up synergies Amy Lee, SVP, Synergies & Operations
Slide 31: Amy Lee - SVP, Synergies & Operations
OPERATIONALIZING STILLOPS TO LEVEL UP SYNERGIES Amy Lee - SVP, Synergies & Operations › Joined Stillfront in 2021. Focused on maximizing the value of Stillfront’s ecosystem of growing game studios, while providing support and governance to designated studios › 15+ years of experience in the gaming i
Slide 32: Structured approach to expanding and operationalizing the Stillops platform
OPERATIONALIZING STILLOPS TO LEVEL UP SYNERGIES Stillfront has taken a structured approach to expanding and operationalizing the Stillops platform in 2021-2022 1. 2. 3. 4. 5. Determine studios’ Determine Prioritize 2023 Define clear Track and key capability approach to focus areas success metrics co
Slide 33: Studio capability areas assessed
STUDIO CAPABILIT Y ARE AS ASSESSED A comprehensive capabilities assessment was conducted to determine key strengths and gaps across Stillfront studios Product Paid user Game Game data/ Player First party/ Non-dev In-game ads Live ops Biz dev support marketing acquisition development Insights engagem
Slide 34: Key capability areas in 2023
KEY CAPABILIT Y AREAS IN 2023 Guided by the assessment results, Stillops is being leveled up to close key capability gaps and amplify existing strengths Track & communicate Revenue generated Costs saved impact Key New game capabilities User In-game Soft-launch Market Go-to- Cross dev Live ops focus
Slide 35: Prioritized areas in 2023
PRIORITIZED AREAS IN 2023 Stillops accelerates synergies by leveraging our assets and capabilities to maximize cost efficiency and growth Stillops Collaborations Hubs Tech & Data Process People Tools Deliberately organized knowledge Productized services offering Data platform to standardize sharing
Slide 36: 6waves
6waves A leading mobile game publisher in Asia
Slide 37: Operation Offices in Key Asian Markets
Operation Offices in Key Asian Markets Established in 2011 Tokyo 东京 • Full publishing and operation support in Japan • Local marketing, community and customer services • 25 Headcount Established in 2011 Beijing 北京 • Game development: in-house development team • Publishing: Business Development in Ch
Slide 38: Top Games
Top Games Leader in 4X strategy games in Japan 3K SLG - Mar 2018 Tenchi - Mar 2019 Shishi - Aug 2019
Slide 39: Remake of Home Design Makeover for Asia
Remake of Home Design Makeover for Asia Japanese style characters, high saturation graphics, colorful text
Slide 40: Outgrowing a challenging market
Outgrowing a challenging market Phillip Knust, CPO
Slide 41: Stillfront outgrew a challenging market in 2022
STILLFRONT IN 2022 Stillfront outgrew a challenging market in 2022 Stillfront vs. mobile games market in 2022 › The gaming market was under pressure in 2022 due to tough comparison with the COVID years and a challenging market environment 1.4% 0.7% › Stillfront consistently outgrew our peers in 2022
Slide 42: Stillfront's diversification a competitive advantage during 2022
PERFORMANCE MARKETING IN 2022 Stillfront’s diversification a competitive advantage during 2022 › 2022 was the first post-pandemic year with no lockdowns in our target regions, high spring/summer seasonality and the FIFA World Cup in the fall › Apple’s privacy changes affected most of our marketing p
Slide 43: Boosting hybrid monetization to grow bookings
AD MONETIZATION IN 2022 Boosting hybrid monetization to grow bookings Candywriter’s quarterly bookings 2021-2022 › The economic uncertainty caused brand marketers to cut back on their spending in 2022, negatively affecting ad monetization › For ad monetization partners who prioritize brand marketing
Slide 44: Significant investments in new game development
NEW GAME DEVELOPMENT IN 2022 Significant investments in new game development Bookings new games1 Bookings all games² Total capex3 › Scaling new games was especially difficult in 2022, but we +220% +29% +60% saw success with launching new games in our franchises, while cutting back on less promising
Slide 45: Stillfront's diversified portfolio of major game franchises
STILLFRONT’S PRODUCT PORTFOLIO Stillfront’s diversified portfolio of major game franchises › Stillfront has a diversified active portfolio of 78 game titles across three product areas › The portfolio includes large, established franchises, as well as smaller, niche products >200 MSEK Bookings genera
Slide 46: Highlighted franchises
HIGHLIGHTED FRANCHISES Home Design Empire Supremacy >820 MSEK in bookings in 2022 >11 billion SEK in lifetime 5 studios working on franchise, bookings achieving a >100% YoY growth Jawaker Albion BitLife #1 classic games in MENA Expanded to mobile in 2021 and #1 life simulator worldwide¹ region² laun
Slide 47: Growing by leveraging Stillfront's franchises
Growing by leveraging Stillfront’s franchises Allocating capex in Co-development with Regional expansion with profitable franchises to multiple studios for culturalized games optimize return on features and new games investment Marketing channel and Special projects focused on IP licensing and audie
Slide 48: Studio deep-dive: Jawaker
Studio deep-dive: Jawaker Alexis Bonte, COO Stillfront Group Mohamad Haj Hasan, CEO Jawaker
Slide 49: What is Jawaker
sy. What is Jawaker e Jawaker is a social card gaming platform hosting over 40 of the most popular Middle Eastern social and cultural games under “one roof”. Jawaker is a technical company at its core. We develop all our games completely in house. Over 40 Games! Including Tarneeb, Trix, Baloot, Domi
Slide 50: Summary & wrap-up
Summary & wrap-up GROUP
Slide 51: Stillfront in a strong position to continue its growth journey
SUMMARY Stillfront in a strong position to continue its growth journey for many more years to come › We will leverage our scale and diversification, to continue to build the best games company in the world › Focus on strengthening and growing existing game franchises › Continued strict payback targe
Slide 52: Stillfront Group
STILLFRONT GROUP