Presentation Q1 Report May 18, 2016
Selected highlights Q1 report SF portfolio delivers the best everquarter Call of War: Continued growth with increased profit Quaterly Sales SEKm SEK 46m annualized New Bytro product sales in Q1 2016 ... 11,6 ATH ATH NWE 10,1 ... profitabilty rockets no of players Revenues of Release in June ‘16 still with high growth... 300.000 SEK 25m Dorado up at speed 4 ...and life-cycle to be on Bytro’s engine giving MAUs with for core years-long with strong boost to long tail increased products 0,4 recurring profits as a loyalty and faster development result. Q2 Q3 Q4 Q1 Strong growth with highest margin leap ever EA partnership expands Net Revenues SEKm uEBITDA Unravel sales during first ~7 weeks is most satisfying… 30 12 50% +113% 25,3 39,7% 25 10 ...have given us first royalty payments for Q1... 40% 19,7 20 8 24,3% 30% 14,7 21,8% 15 ...and further to come during next quarters. 6 +29% 20% 10 4 Unravel sequel agreed with EA . The ambition is high - to 10% 5 2 +34% 3,6 4,3 10,0 build a strong Unravel franchise over long time. 0 0 0% 2015Q3 2015Q4 2016Q1 2015Q3 2015Q4 2016Q1 2
Business Overview Strategy Contents Outlook 2016 Financials
Attractive and diversified games portfolio Launch in: 2009 Q2 2015 Q1 2016 Q2 2016 45% of group revenue Incl in Coldwood’s 30% of group revenue 19% of group revenue Still growing since launch in 2009 Most successful launch to date Launched February 9, 2016 New strategy game based on the Overwhelming response successful Bytro engine Release in June 2016 Most satisfying sales Undisclosed Q3 2001 Q2 2003 sequel Incl in Coldwood’s 30% of group revenue 1% of group revenue 5% of group revenue 14-year life-cycle – still stable revenues A sequel is signed in partnership w EA Details TBD 4
Portfolio Revenue Mix Systematic work with improving portfolio is key in our PLEX • strategy The Core Products The mix has significantly improved last five quarters • Increased by one product • Balanced on higher levels • All products increase or are stable in revenues • Profitabilty from core products significantly higher • Further improvements include adding the number of core • products Portfolio is managed both over revenue, profitability and risk • metrics Quarterly Revenues Core Products in SEKm Revenue Split Core Products Q1 '16 12 10 19% 30% 8 6 4 5% 2 46% 0 2010 2011 2011 2012 2013 2014 2015 2016 Supremacy 1914 Call of War ManagerZone Coldwood Supremacy 1914 Call of War ManagerZone Coldwood 5
Winner of 20+ awards at E3 and gamescom Winner Best Strategy Game
Coldwood and EA partnership expands Unravel enjoys strong sales and has opened the way for broadened partnership with EA Unravel was released February 9 with strong sales • Game launched Coldwood has delivered with high quality and on time • Very satisfying sales during first 7 weeks giving royalties accounted for in Q1 • Unravel royalty revenues EA has fully recouped during Q1 • Further royalties are expected coming quarters • Coldwood and EA has agreed to develop a new high profiled product – an Unravel sequel Coldwood and EA partnership • No product details are disclosed • expands – Unravel sequel The project has very high ambitions building a strong Unravel Franchise over long time • EA publishes games for a mere few independent studios annually Unique partnership with industry giant • The fact that Coldwood has been chosen again proves that • Coldwood capabilities are on international absolute top level Stillfront and Coldwood are proud of the partnership with EA • The partnership fits Stillfront Group perfectly as being an attractive • risk/reward business, now also being a long life product. 7
Still growing since launch in 2009 8
Supremacy 1914 – Revenue development Supremacy 1914 Revenue Development per single Q and rolling 4 Qs 5,0 Strongest rolling 4Qs 4,5 sales to date 4,0 are now Launched 3,5 7 years ago 3,0 (June 2009 ) 2,5 2,0 1,5 Strong growth 1,0 first 54 months 0,5 0,0 2010 2011 2012 2013 2014 2015 2016 Total cumulative sales since inception is SEKm 77.9 9
Stillfront’s most successful launch to date 10
Call of War – WW2 Strategy Game Quaterly Sales SEKm SEK 11.6m SEK 46.4m annualized sales 11,6 Still growing on high numbers 10,1 Call of War accounted for 46% of group revenues in Q1 2016 Profitability very high With growth and thus UACs held lower, 4 high volumes and high consumer loyalty make profitability rocket Designed for long life-cycle 0,4 Call of War is an immersive long-stay grand Q2 Q3 Q4 Q1 strategy game with the potential to sustain a high revenue over a long life-cycle SEK ~2m in initial development costs recouped in terms of sales after first four months. The cumulative sales amounts to SEK 26.1m 11
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New World Empire – both Concept, Engine and Product An additional Contains significant New World Empire - game concept added enhancements in engine The Game Territories Exploration Concept More extensive scenario “Terra incognita” and the Opens a partly new game genre Played over longer time in history exploration of it Multiple dimensional levels Can reach a broader audience Game scenarios includes more extensive mission Could be a used in Unit categories a series of products New dimension creates more sophisticated strategy challenges Multiple new unit categories adding dimension in game play Combined with existing strengths Opening larger market The Exploration Game Concept Battle System Enables attraction to partly is combined with the existing new audience along with Allowing other categories of battle oriented grand strategy existing user base for cross battles e.g. row battles war game concept, to leverage promotion our assets and knowledge SEK ~3m in total Investment until full Launch, whereof approximately 30-40% is in the Engine 14
Business Overview Strategy Contents Outlook 2016 Financials
Business strategy – 3 pillars 1 2 3 P P ortfolio of games IP↑ Sales L Sales L ong life cycle games Profits Profits E E ngines for scalability Organic + M&A Organic M&A X X (cross) platform Improve risk/reward Grow to higher profitability More IP ownership in Coldwood 16
Higher profitability by capitalizing on scalable business model with growth strategy Scalable + Growth = Increased business model strategy profitability Low marginal cost for New engines producing and distributing digital Sales content Profits …almost exclusively New games payment provider costs Scalable development Organic M&A ROI driven marketing with game engines Development costs decrease significantly with each game produced on an existing Organic & M&A engine 17 17
Business Overview Strategy Contents Outlook 2016 Financials
Financial & product targets Target net revenue by 2020: >SEK 300m Target mid-term Underlying EBITDA margin: 25–30% 2016: 2-4 Target game releases: 2017–2018: 4-6 per year 2019–2020: 5-7 per year 19
Current Position Scalable Step-by-step better risk/reward Our business model Low marginal cost on producing and distributing Portfolio strategy reduces risk and stabilizes digital content revenue growth while capturing synergies works… Scalable development with game engines Combining Contracting/Royalties with own publishing High growth High profitability Coldwood position Lower pace in establishing Continue to grow at high levels We can gear growth/margin …enabling important parallel teams than targeted efficiently depending on Increasing MAU with high marketing fROI achievements… retention Stronger development in Royalties on Contracting adds partnership with EA than Traction with new and long- to margins with low risk planned lived cash cow games Organic growth …making us hungry Acquisition strategy Resource optimization New games for further Target high quality gaming Gather long tail responsibility companies adding strategic, New engines Spread capability to develop on acceleration operational and financial value successful engines to gear up Performance based marketing mutually 20
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