A leading free-to-play powerhouse Interim report First Quarter 2020
TODAY´S PRESENTERS Andreas Uddman Jörgen Larsson CEO CFO jorgen@stillfront.com andreas@stillfront.com 2
STILLFRONT AT A GLANCE 9.8 A leading free-to-play powerhouse 9.8 million MAUs and 2.2 million of 14 gaming studios creating DAUs including Storm8 (one significant operational synergies month), excluding Candywriter million A diverse and evolving game portfolio Main markets by revenue are US, with two common themes; loyal users Germany, MENA, UK and France and long lifecycle games +750 Headquartered in Stockholm with a group of 14 studios operating in Australia, Bulgaria, Canada, Germany, Jordan, Malta, Romania, Sweden, United States and Vietnam. professionals 3
GLOBAL PRESENCE 14 GAME STUDIOS Europe 42% Asia 17% North Am 36% Africa 1% South Am 2% Oceania 2% Sales Offices 4 Note: Candywriter not included.
NET REVENUE, UAC DEVELOPMENT Net Revenue, MSEK UAC, MSEK 2240 UAC, % of Net Revenue 1967 691 1782 20% 1579 551 20% 21% 1428 517 20% 480 22% 418 19% 24% 16% 21% 26% 438 148 397 365 342 346 108 107 99 83 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 LTM LTM LTM LTM LTM Net revenue growth of UAC in relation to revenue • Revenue growth driven by 65% 21% • Acquired studios Kixeye and Storm8 • Solid organic growth – high gaming activity across the portfolio • High return on user acquisition, paired with record spending levels YoY 5
ADJ. EBIT DEVELOPMENT Adj. EBIT, MSEK Adj. EBIT, % of Net Revenue 732 645 213 604 33% 527 177 175 167 31% 33% 441 34% 126 32% 33% 34% 35% 31% 30% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 LTM LTM LTM LTM LTM Adj. EBIT growth of Adj. EBIT in relation to revenue • Adj. EBIT growth driven by 69% 31% • Acquired studios Kixeye and Storm8 • Solid organic growth and disciplined UA spending with good return • Gross margin and UAC % slightly lower resulting in improved Adj. EBIT YoY margin YoY 6
ACTIVE PORTFOLIO: TOTAL D A U (‘000) +62% Y oY +60% Y oY M A U (‘000) +73% Y oY M P U (‘000) 82% Y oY B ookings (M S E K ) -3% Y oY A R P D A U (S E K ) U A C (M S E K ) +42% Y oY U A C , % of B ookings 9785 365 2500 2214 20,0 664 18,0 537 2000 16,0 22% 504 232 5795 5669 5612 14,0 450 207 1363 415 5094 1351 200 1269 1262 20% 187 1500 12,0 16% 21% 10,0 25% 1000 8,0 4,3 4,3 3,9 148 6,0 3,4 3,3 104 107 95 80 500 4,0 2,0 0 0,0 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 COMMENTS 36 65% • A well diversified active portfolio consisting of 36 games in 3 product areas • Strategy: games with high degree of community and long-term GAMES MOBILE gameplay, very strong monetization, mid-core audience • Simulation, RPG & Action: economy and sports simulation games, AD BOOKINGS 48% high-paced action games and role-playing games cater to another 3% part of the mid-core audience • Casual & Mash-up: large audience tilting younger / female, STRATEGY monetization lower, but still very healthy compared to market • 3% of total bookings (21 MSEK) from games not in active portfolio 7
ACTIVE PORTFOLIO: STRATEGY D A U (‘000) -10% Y oY +10% Y oY M A U (‘000) -8% Y oY M P U (‘000) -2% Y oY B ookings (M S E K ) +21% Y oY A R P D A U (S E K ) U A C (M S E K ) +14% Y oY U A C , % of B ookings 3114 2985 700 20,0 2853 102 100 2712 588 96 94 93 322 2482 544 318 600 531 299 496 288 491 279 15,0 500 17% 20% 18% 19% 15% 400 10,0 6,5 6,6 6,6 300 6,2 5,4 200 63 56 53 54 5,0 41 100 0 0,0 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 COMMENTS 12 62% • Totals 48% of bookings in the active portfolio • Continued strong YoY growth in 3 rd year for Nida Harb 3 GAMES MOBILE • EMPIRE: continued stable performance, Age of Knights in global soft launch AD BOOKINGS 25% 0% • Strike of Nations: strong momentum YoY • Conflict of Nations soon to launch mobile version ASIA • Investment in updating Supremacy 1914 pays off – ATH bookings in its 10 th year since launch driven by mobile version 8
ACTIVE PORTFOLIO: SIMULATION, RPG & ACTION D A U (‘000) +26% Y oY +91% Y oY M A U (‘000) +41% Y oY M P U (‘000) +57% Y oY B ookings (M S E K ) +50% Y oY A R P D A U (S E K ) U A C (M S E K ) +40% Y oY U A C , % of B ookings 1200 20,0 3604 153 972 18,0 242 239 3083 136 225 1000 855 16,0 2626 2612 775 2555 114 771 725 14,0 22% 28% 800 17% 98 93 12,0 127 127 600 10,0 8,0 33% 38% 400 67 6,0 53 3,2 3,0 48 2,7 42 39 1,8 1,9 4,0 200 2,0 0 0,0 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 COMMENTS 17 52% • Totals 36% of bookings in the active portfolio • Continued strong YoY growth in 3 rd year for Big Farm: Mobile Harvest GAMES MOBILE • Ramp-up of marketing activity for WC: Rogue Assault in the quarter • War Storm (MENA-version of WC: Rogue Assault) launched after reporting AD BOOKINGS 47% 3% period • Strong YoY growth for Gemstone IV, strongest quarter since 1999 (launched EUROPE in 1988, oldest game in active portfolio) 9
ACTIVE PORTFOLIO: CASUAL & MASH-UP D A U (‘000) M A U (‘000) M P U (‘000) B ookings (M S E K ) A R P D A U (S E K ) U A C (M S E K ) U A C , % of B ookings 9982 335 2500 20,0 2132 105 105 2000 15,0 16% 16% 1500 10,0 112 3327 1000 711 17 17 5,0 500 1,6 1,6 0 0,0 Q4'19 Q1'20 Mar'20 Q4'19 Q1'20 Mar'20 Q4'19 Q1'20 Mar'20 Q4'19 Q1'20 Mar'20 COMMENTS 7 100% • All 7 games only included for one month in the first quarter • Totals 16% of bookings in the active portfolio GAMES MOBILE • Storm8 are ramping up marketing from March, with very good return • Strong development for Property Brothers AD BOOKINGS 65% 10% • Candywriter´s games part of Casual & Mash-up from May 1 2020 N.AMERICA 10
CANDYWRITER – A US BASED MOBILE GAMES DEVELOPER CANDYWRITER AT A GLANCE KEY PERSONNEL • Founded 2006, Candywriter is a pioneering mobile games developer and publisher focusing on casual and mash-up games with longevity Kevin O´Neil Nadir Khan Gabrielle Bradford • Candywriter has created several successful apps and casual games over CEO & COO & Director of Ad the years, including word games Letter Soup and Letter Fridge, Adult Co-founder Co-founder Operations Coloring Book, What’s the Difference? • BitLife, Candywriter´s latest unique mash-up game, launched in 2018 (iOS), 2019 (Android), contributed c. 85% of bookings 2019 Leads engineering team Manages Miami HQ Manages advertising • Lean and efficient team of 13 FTE:s with head office in Miami, US operations and third party relationships • Several functions outsourced e.g. marketing and back-end development • 100% owned by the founders: Kevin O’Neil, CEO and Nadir Khan, COO GAMES PORTFOLIO TRACK RECORD 42m ~70% 1 $26m 1.2m 2 Cumulative Organic FY 2019 Bookings DAU downloads to date Installs 13 1 $15m 7.8m 2 2006 Full-time employees FY 2019 EBIT MAU Founding year Source: 1) IFRS accounts 11 2) March 2020
STRATEGIC RATIONALES AND SYNERGIES Build size, diversify portfolio High development and and broaden market synergy potential • Adds USD 26m in Net Revenue and USD 15m EBIT 2019 • Localization & culturalization opportunities: the game is currently only available in English • In total 42m cumulative downloads to date, 7.8m MAUs, 1.2m DAUs as per March 2020 • Extensive IGA, in-game advertising expertise: • diversification of revenue sources • BitLife top 5 most downloaded games on iOS in 2019 and • opportunity to create IGA Centre of Excellence still in a growth phase with substantial upward potential • Marketing and analytics currently outsourced – • Innovative mash-up game concept with untapped opportunity to insource via Stillfront´s Centre of potential Excellence • Approx. 80% of BitLife´s audience are between 18-34 • Opportunity to expand live-ops – leveraging on years, partially complementing Stillfront´s current Stillfront´s expertise audience with young adults 18-25 • Impressive social media presence 12
FINANCIAL HIGHLIGHTS FIRST QUARTER Revenue growth of 65% - further Cash generative business with a cash increased revenue diversification, conversion ratio of 0.73 in the quarter paired with Adj. EBIT margin of 31%. Moderate leverage, continuously Debt financing secured in Q1 of 2.1bn 1.15x below the leverage target of 1.5x SEK. 1 bn SEK remains undrawn and despite recent M&A activity 472 MSEK of cash at end of Q1. Strong underlying financial performance and a strong financing platform creates financial flexibility for further growth. 13
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