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P R ES E N TAT I O N M A R C H 2 0 1 9 F u n c o m i n b r i e f - PowerPoint PPT Presentation

May 01, 2023 •121 likes •302 views

I N V ESTO R P R ES E N TAT I O N M A R C H 2 0 1 9 F u n c o m i n b r i e f T H E C O M P A N Y S E G M E N T S S U C C E S S F U L T U R N A R O U N D USDm 45 Share of revenue (2018) Norway and US based games Revenue EBIT 34 35

  1. I N V ESTO R P R ES E N TAT I O N M A R C H 2 0 1 9

  2. F u n c o m i n b r i e f T H E C O M P A N Y S E G M E N T S S U C C E S S F U L T U R N A R O U N D USDm 45 Share of revenue (2018) Norway and US based games Revenue EBIT 34 35 developer and publisher focusing on 50% online games and massive open 23 25 world sandboxes for PC and consoles 15 10 10 7 7 2% Founded in 1993, listed on Oslo 5 49% Stock Exchange since 2005 -5 2015 2016 2017 2018 PC Console IP and sublease L O C A T I O N S A N D S T A F F G A M E S P O R T F O L I O O V E R V I E W Secret World Legends Conan Unconquered Relaunch: 2017 Release: Q2 2019 Funcom Oslo Trailer Funcom NV ZPX Employees Mutant Year Zero: Funcom Inc Road To Eden Age Of Conan 77 Release: 2018 Release: 2008 71 Trailer 15 Conan Exiles Anarchy Online Release: 2017 Release: 2001 Trailer Funcom locations Distribution/Local partners Development partners | 2

  3. 3 2 0 1 7 , 2 0 1 8 m o st p ro f i ta b l e ye a rs to d ate Revenue (USDm) and EBITDA margin • 2017, 2018 most profitable years to date 40 60% 33.8 52% 35 50% • Turn around successful 43% 30 40% 23.2 25 • Increased profitability 2014-16 despite 30% 20 falling revenue due to intense cost cutting 20% 12.6 15 10.2 10% 7.3 10 5% 4.3 3% 3% 0% 5 -5% 0 -10% 2013 2014 2015 2016 2017 2018 Revenue EBITDA | 3

  4. 4 D e bt f re e a n d st ro n g c a s h d e ve l o p m e nt • Last part of convertible bond converted on Cash and debt (USDm) 4 October 2018 19.9 19.2 • USD 3.9m invested in game development in 4Q18, USD 15.2m in 2018 13.6 • We will continue to invest heavily in new 7.7 games in 2019, mostly for 2020 launches 3.7 3.7 2.6 0.6 0.0 2013 2014 2015 2016 2017 2018 Cash Debt Debt is face value of interest bearing debt | 4

  5. 5 2 0 1 8 m o st p ro f i ta b l e ye a r to d ate USDm 2018 2017 Change • Highest annual EBITDA, EBIT and Revenue 33.8 23.2 + 46 % profit to date EBITDA 17.7 9.9 + 78 % EBIT 10.2 6.6 + 53 % • Significant increase in cash and equity Profit, pre-tax 7.7 6.7 + 14 % Cash 19.9 7.7 + 157 % • Debt free Equity 45.2 13.7 + 230 % Debt 1 0.0 3.4 -100% 1) Face value of interest bearing debt | 5

  6. 6 S t ro n g f i n a n c i a l d e ve l o p m e nt 12m rolling revenue (USDm) and EBITDA margin USDm 4Q 18 4Q 17 Change 40.0 60% 52% 35.0 Revenue 8.4 3.1 + 166 % 50% 44% 47% 46% 30.0 EBITDA 4.7 0.5 + 841 % 43% 41% 40% 39% 25.0 EBIT 1.4 -0.5 + 1.9 20.0 30% 22% Profit, pre-tax 0.4 -0.6 + 1.0 15.0 20% 10.0 • Key drivers this quarter 10% 5.0 7.3 16.2 17.5 21.8 23.2 14.9 27.1 28.6 33.8 3% 0.0 0% 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Revenue EBITDA margin | 6

  7. C o n a n E x i l e s • Conan Exiles is a PC/Console Multiplayer Survival game • Profitable within on week of the 31 January 2017 Early Access PC release • 0.5 million units sold first month • Sold 1 million units* before full launch on 8 May 2018 (including Xbox, launched on 16 August) • Sold 1.4 million units* including retail sell-in by 1Q18 report, two weeks after full launch Link to reveal trailer * PC refunds not excluded

  8. M u ta nt Ye a r Ze ro : Ro a d to Ed e n G R E A T R E V I E W S A W A R D S A N D Q U O T E S C O M M E N T S Released on December 4th on PC, Xbox One, and PlayStation 4 Good reception on all platforms “It is a superb tactical combat campaign that «Stalker Trials» free update you shouldn't let sneak past.” - Gamespot released on PC on the 26 of February, additional activities “…because the small, linear but smart, powerful and atmospheric Mutant Year Zero I got grabbed hold of coming me so completely.” - Rock Paper Shotgun Successful launch establishes “While it lasts, Mutant Year Zero is a tense, absorbing and atmospheric new member of the XCOM family. I Funcom’s reputation as a publisher suppose wanting more of it is a good problem to have.” - PC Gamer STEAM RATING: 81% Link to reveal trailer | 8

  9. S t rate g y o f m u l t i p l e re ve n u e s o u rc e s a n d re l e a s e s ADDITIONS / YEAR INVESTMENT SIZE MARGIN STRATEGIC VALUE • IP control INTELLECTUAL VERY • +1 - 4 VERY LOW Value creation by IP development PROPERTY LICENSES HIGH • Additional revenue sources • Frequent releases • NEW PUBLISHING Low fixed employee cost +2 - 3 LOW-MID MEDIUM GAMES impact • Finding long term partners • Large upside NEW INTERNALLY • +1 MID-LARGE HIGH Build and leverage DEVELOPED GAMES competitive advantages • Baseline cash contribution GAMES IN OPERATION • +3 VERY LOW HIGH IP Value maintenance & BACK CATALOGUE • Strengthen community PLATFORMS DEVELOPMENT TIME BIZ MODEL GLOBAL DISTRIBUTION For Publishing: PC, Xbox One, 1 to 2 years of Full Premium with NA and Europe: direct PlayStation 4, Switch production additional monetization Other regions: with For IP licenses: All partners | 9

  10. I n c re a s e d d i ve rs i t y i n h i g h q u a l i t y I P p o r t fo l i o O W N E D C O N T E N T 1 G A M E S I N O P E R A T I O N 2 ~30 GAMES RELEASED ~10 known IPs, ~20 minor IPs • IP rights ownership through Heroic Signatures Conan Exiles, Jan 2017, May 2018 Mutant YZ, December 2018 Conan Unconquered, Q2 2019 22,000 live viewers when 0.5M units sold first month • Royalty revenue, strategic control of key IPs, PCGAMER GAMEREACTOR revealed 81/100 8/10 strengthening publishing position 1.0M units sold before full +300K trailer views on launch 3 YouTube the following days • GAMESPOT GAMESTAR Negligible cost and high margins +450 sites wrote about the 1.4M units sold two weeks after 9/10 83/100 announcement launch 3 • Successful releases building strong franchises with loyal fanbase Note (1) Titles are owned 50% through the acquisition made in February 2018; (2) Games developed internally and externally; (3) PC refunds not excluded. | 10

  11. 11 Z PX a c q u i s i t i o n s e c u re s c o st e f f i c i e nt d e ve l o p m e nt S T R A T E G I C R A T I O N A L E T H E C O M P A N Y T H E D E A L Game development service supplier Secures cost efficient, highly Acquisition: 50.1% of ZPX shares situated in Lisbon, Portugal skilled development capacity Consideration: EUR 150k paid as 15 talented employees, hiring great Independent service provider – 102 363 shares and undisclosed secures capacity, but still variable talents to double the number cash amount cost Quality and client focused attitude, range ZPX was profitable in 2018 Has already successfully delivered of clients work on Funcom games for two years MULTI-PLAYER CO-OP SHOOTER | 11

  12. S t ro n g p i p e l i n e o f n e w ga m e s External PLATFORM : PC PLATFORMS : PC - XBOX ONE – PS4 RELEASE : Q2 2019 RELEASE : Halloween 2019 STATUS : In Production STATUS : In Production DUNE IP OPEN WORLD MULTI-PLAYER Internal MULTI-PLAYER CO-OP SHOOTER PLATFORMS : PC - XBOX ONE – PS4 PLATFORMS : PC - XBOX ONE – PS4 PLATFORMS : PC - XBOX ONE – PS4 RELEASE : 2020 RELEASE : 2020 RELEASE : TBA STATUS : In Production STATUS : In Pre-Production STATUS : In Concept FUNCOM OSLO AS FUNCOM INC FUNCOM OSLO AS 13 active projects in total – 5 new + 8 existing or prototype game projects | 12

  13. C o n a n U n c o n q u e re d re l e a s e i n 2 Q 1 9 • Game revealed on 8 December 2018 • First-ever strategy game set in the world of Conan • Single player and two-player co-op • Releasing in 2Q19 for PC • Published by Funcom and developed by Petroglyph • Inspired by Robert E Howard’s “Black Colossus” story | 13

  14. E xc l u s i ve a c c e s s to D U N E I P • Exclusive partnership with Legendary Entertainment for video games based on the works of Frank Herbert’s DUNE • Six year partnership for a minimum of three PC and Console games • One such game will be an “Open World Multiplayer” project developed in Funcom’s Oslo studio • Legendary Entertainment is working on a new high profile film adaptation, directed by Denis Villeneuve and scheduled for 20 November, 2020 | 14

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