Bli medlem
Bli medlem

Du är här

2016-11-24

Starbreeze AB: Starbreeze AB (publ) Q3 report July 1 2016 - September 30 2016

The full Q3 report in Swedish is available at
www.starbreeze.com/investor-relations/. The English version of the
report will be available within a week. Financial statements in
English are available at the end of the attached PDF.

CHANGED FISCAL YEAR

Note that in accordance with the decision taken on the Annual General
Meeting in November 2015, this is the third quarterly report after
changing the company's fiscal year to calendar year. The comparative
period Q3 2015 corresponds to July-September 2015, previously named
Q1 2015/2016.

The next report to be issued will thus be Q4 2016 and released on 16
February 2017.

THIRD QUARTER (JULY - SEPTEMBER 2016)

· Net revenue amounted to SEK 102.7 million (SEK 49.9 million),
representing a growth of 106 percent. Total revenue amounted to SEK
147.4 million (SEK 75.9 million).

· Net revenue includes a minimum guarantee of SEK 32.5 million
relating to RAID: World War II.

· During the quarter, PAYDAY 2 represented SEK 20.2 million (SEK
48.4 million) of net revenue.

· During the quarter, Dead by Daylight represented SEK 49.2 million
(SEK 0.0 million) of net revenue.

· Operating income before depreciation and amortization, EBITDA,
amounted to SEK 19.2 million (SEK 8.4 million), implying a margin of
13.0 percent.

· Pretax income amounted to SEK 11.0 million (SEK 7.2 million).
· Net income amounted to SEK 20.4 million (6.4 million).
· Earnings per share before dilution were SEK 0.08 (SEK 0.03) and
earnings per share after dilution were SEK 0.08 (SEK 0.03).

· Cash flow from operating activities amounted to SEK 37.0 million
(SEK 49.5 million).

· As of September 30, cash and cash equivalents totaled SEK 376.0
million (SEK 123.7 million).

INTERIM PERIOD (JANUARY - SEPTEMBER 2016)

· Net revenue amounted to SEK 246.1 million (SEK 169.5 million),
representing growth of 45 percent. Total revenue amounted to SEK
357.6 million (SEK 229.9 million).

· Operating income before depreciation and amortization, EBITDA,
amounted to SEK 42.4 million (SEK 34.3 million) equivalent to an
EBITDA margin of 11.9 percent.

· Pretax income amounted to SEK 23.6 million (SEK 29.1 million).
· Net income amounted to SEK 26.9 million (24.0 million).
· Earnings per share before dilution were SEK 0.11 (SEK 0.11) and
earnings per share after dilution were SEK 0.11 (SEK 0.10).

KEY EVENTS DURING THIRD QUARTER (JULY - SEPTEMBER 2016)

· In September, Starbreeze and Digital Bros reached an agreement on
worldwide and exclusive distribution rights relating to RAID: World
War II for consoles. The rights only cover physical console games and
are granted to 505 Games, a subsidiary of Digital Bros. Accordingly,
Starbreeze retains the digital distribution rights for both PC and
Console. The agreement includes payment of a minimum guarantee,
relating to royalties of USD 4 million (SEK 32.5 million) in total
that will accrue in full to Starbreeze. Besides the distribution
agreement signed with Digital Bros, it was also announced that the
game will be released on PC, Xbox One and Playstation 4 during summer
2017.

· Starbreeze has come to an agreement with Smilegate Holdings Inc., the holder of the convertible bond of SEK 215 million that was issued in February 2016, to modify the terms of the bond to increase financial transparency for Starbreeze. The agreed changes are of a technical nature and does not alter the original commercial agreement. This information was earlier presented in the half-year report.
· During the quarter Starbreeze held an extraordinary general
meeting. The meeting decided to issue a convertible loan of SEK 75.5
million to Acer. Given that the general issue authorization, which
the Board received at the Annual General Meeting on May 25 2016, had
essentially been used in significant part due to technical reasons
surrounding the Smilegate convertible bond, the meeting also decided
to give the Board a renewed authorization to issue shares not
exceeding ten percent of outstanding shares at each time.

· In August during Acer's product presentation in Berlin, Starbreeze
and Acer announced that the first delivery of StarVR HMD to IMAX had
been shipped, in preparation for the opening of the first IMAX VR
Center in Los Angeles.

AFTER THE PERIOD

· In October, revenue from PAYDAY 2 sales via the PC platform Steam
amounted to SEK 16.3 million (SEK 10.9 million). Note that
Starbreeze, after the changed terms of the contract with 505 Games,
now receives 100% of revenues generated by PAYDAY 2 on Steam.

· During October, revenue from Dead by Daylight sales via the PC
platform Steam amounted to SEK 17.8 million (SEK 0.0 million).

· In October Starbreeze conducted a directed share issue targeted
towards institutional investors, where Första AP-fonden acquired the
majority of the shares issued. A total of 16,452,991 shares were
issued at a price of SEK 23.40, equivalent to a total amount issued
of SEK 385 million.

· In October, Starbreeze announced the acquisition of Nozon, a
Belgian Visual Effects (VFX) studio and the developer behind the
PresenZ technology. The consideration amounted to EUR 7.1 million, of
which EUR 4.6 million was in cash (about SEK 44.6 million) and EUR
2.5 million in Starbreeze B shares. In addition, the parties also
agreed on a 10-year earnout, based on PrezenZ's financial
performance, which only takes effect after Starbreeze has recouped
EUR 2 million of the consideration.

· After the period's end Starbreeze chose Carnegie Investment Bank
as advisor for its relisting to Nasdaq Stockholm's main list.
Starbreeze intention is to complete the relisting during 2017.

· In November, a new brand was announced in the Publishing division.
The new label "Starbreeze IndieLabs" aims to help projects, which are
smaller in scope to reach the market. Together with the Croatian
studio Lion Game Lion, Starbreeze has agreed that the company will
invest USD 300,000 to bring the game "AntiSphere" to PC and other
platforms. The agreement means that Starbreeze will receive 30
percent of the sales revenues, after the initial investment has been
fully recouped. Lion Game Lion and Soap Interactive in turn will
retain 100 percent of the IP rights. Antisphere is a top-down
competitive arena battle game in which players use their skills in
order to catch each other out, and win the match.

· During New York Comic Con, Starbreeze and Lionsgate showcased the
upcoming VR first person shooter John Wick Chronicles. Attendees had
the opportunity to demo a 7-minute preview of the first mission. The
experience and game were very positively received with good reviews
from gamers and gaming journalists.

· The game John Wick Chronicles will be released on Steam in
February 2017 and is compatible with HTC Vive. It is already
available for pre-order for USD 19.99 via the platform.

REVENUE RECORD

CEO BO ANDERSSON KLINT GIVES HIS COMMENT

Starbreeze Publishing has completed its first sales pulses for Dead by
Daylight. We have successfully invested, published and marketed both
the base game and following DLCs including the tie in with famous
movie franchise "John Carpenter's Halloween". The game has now
generated over 20 MUSD in gross sales on Steam, which has given
Starbreeze and Behaviour a total return on investment of several
hundred percent.

This is a great first chapter for our Starbreeze Publishing business
unit. With investment in third party IP's such as RAID, Antisphere
and others, we see this as a growing and exciting segment for the
company. A segment that will bridge our cash flow between our own
future large scale releases such as OVERKILL's The Walking Dead,
CROSSFIRE, PAYDAY 3. We will continue to be on the lookout for new
projects, also under the new Starbreeze publishing label, IndieLabs.
With these smaller in scope IndieLabs projects to complement the
larger Publishing business, we will create the bedrock for a future
flow of content into our publishing business and overall eco systems.

The significance of this third quarter was even greater than the
release quarter for Dead by Daylight. Our PAYDAY business model has
been tested and proven on an external IP with our fantastic partner,
Behaviour. Today's industry has had a hard time adapting its mind-set
to this model, but we have created it, we are in the driving seat and
we are successful.

For us, it is now full steam ahead along the road we have staked out,
in collaboration with our many external partners for upcoming PC- and
console games, IMAX VR centers and mobile game efforts.

Starbreeze third quarter net revenues remain on a high-level amounting
to 102.7 MSEK, which is on par with Q2 and the highest net revenue
number in Starbreeze history. Compared to the corresponding quarter
last year, Starbreeze has more than doubled its net revenues. The
effect of an aggregated business is starting to show, and it serves
as an important reminder for the company to retain its long-term
focus when it comes to investment in its product strategy.

The main driver for the growth is the broadening of our revenue base
where RAID: World War 2 contributed with 32.5 MSEK from the minimum
guarantee received when we signed the agreement for the physical
console distribution rights to Digital Bros and their subsidiary 5050
Games. Another great footprint of how we can create financial
leverage of game IPs both pre- and post-release.

We have earlier announced that Dead by Daylight quickly reached over
1,000,000 units sold and the positive reception generated 49.2 MSEK
in revenue during the quarter as a whole. Last but not least, PAYDAY,
for which we after the repurchase from Digital Bros get full digital
distribution royalty on, contributed with 20.9 MSEK.

As we continue our growth, our operating expenses excluding royalties
to publishing partners has increased with 36.2 MSEK or 54 % compared
to Q3 2015. The incremental spend is in all material aspects derived
from employee related expenses as we're ramping up the teams for
delivering according to our ambitious plans for our own games, our
publishing business and our establishment in the VR industry. Despite
the increase in costs we stay positive on bottom line and the EBITDA
margin reaches 13 %.

Bold plans need the right partners and appropriate funding. Acer has
not only partnered with Starbreeze for the manufacturing, marketing
and sales of StarVR, they did also invest 75.5 MSEK during the third
quarter and we're exiting the period with a solid cash position of
376.0 MSEK.

After the end of the quarter Första AP-fonden, one of the major
Swedish Pension funds, amongst others participated in a new share
issue amounting to 385 MSEK, which leaves our total...

Författare WKR

Tala om vad ni tycker

Tala om vad ni tycker

Ni är just nu inne på en betaversion av nya aktiespararna. Lämna gärna feedback på vad ni tycker i formuläret nedan.