Tinybuild Inc. · LSE:TBLD
Tinybuild — H1 2023 Earnings Presentation
29 slides from Tinybuild's earnings presentation, Sep 26, 2023
Slide 1: H1 2023 Results Presentation
H1 2023 RESULTS PRESENTATION
Slide 2: Disclaimer
DISCLAIMER IMPORTANT: You must read the following disclaimer before continuing. The following disclaimer applies to the following presentation and you are therefore advised to read this disclaimer carefully before reading, assessing or making any other use of the presentation. In accessing the prese
Slide 3: Presenting Today
PRESENTING TODAY Alex Nichiporchik - CEO, Founder 20+ years' industry experience. Pro-gamer, shipped over 20 titles as Producer, discovered pillar titles and built relationships with key influencers. Giasone (Jaz) Salati - CFO 20+ years’ finance experience. Top ranked equity research analyst, and Chie
Slide 4: Agenda - H1 2023
AGENDA - H1 2023 OPERATIONAL REVIEW FINANCIAL REVIEW STRATEGY APPENDIX 4
Slide 5: Operational Review
OPERATIONAL REVIEW Alex Nichiporchik, CEO
Slide 6: Resilient in a Difficult Market
RESILIENT IN A DIFFICULT MARKET ▪ Another challenging year, for different reasons ▪ Short term challenge opens long term opportunity ▪ Investment level adjusted to reduce cash burn ▪ Ongoing improvement of financial processes ▪ Paused M&A and focus on cash generation ▪ Potential for efficiencies and
Slide 7: H1 2023 Highlights
H1 23 HIGHLIGHTS $23.3m $6.6m >80 games portfolio consolidated revenues Cash from operations 65% 93% $14.3m of sales from Own-IP cash at the end of June ‘23 of sales from catalogue 7
Slide 8: Own IP Across Multiple Platforms
OWN IP ACROSS MULTIPLE PLATFORMS OVER 80 GAMES CREATING FRANCHISE POTENTIAL H123 FY17 65% OWN-IP AS % OF GAMING REVENUE 8
Slide 9: Balanced Mix Back Catalogue / Front List
BALANCED MIX BACK CATALOGUE / FRONT LIST 93% BACK CATALOGUE AS % OF GAMING REVENUES *Back catalogue is defined as any games released in the prior financial year and before 9
Slide 10: Financial Review
FINANCIAL REVIEW Giasone (Jaz) Salati, CFO
Slide 11: H1 23: A Period of Transition
H1 23: A PERIOD OF TRANSITION Net Game Revenues1 Adj. EBITDA2 Adj. Cash from Operations3 ▪ Net game revenue dropped over 20% ▪ Adj. EBITDA was negative in H1 23 as a ▪ Adj. Cash from Operations was positive y-o-y due to lower platform deals result of lower revenues base, a lower flow also thanks to a
Slide 12: Profit & Loss
PROFIT & LOSS ▪ Revenues from game sales stable in a difficult year as core tinyBuild titles offset a disappointing performance of Versus Evil ▪ Development revenues down sharply due to lower contribution from platform deals ▪ $18.3m non-cash impairment of development costs reflecting more competitiv
Slide 13: Platform Deal Rise and Fall
PLATFORM DEAL RISE AND FALL 2022 PEAK AND DROP IN 2023 ▪ Revenues from platform deals peaked in 2022 ▪ In H1 23 platform deals contribution is below 2020 as a % of sales ▪ Mitigating factors (lower cannibalisation) still difficult to quantify 13
Slide 14: Cash Flow
CASH FLOW ▪ Net cash generated from operations was $6.6m in H1 23, 26% lower y-o-y, as lower profit more than offset a positive Working Capital contribution ▪ The decrease in receivables and payables is mostly the result of timing differences relating to seasonality ▪ Cash income tax payment was $1m
Slide 15: Investments Peaked in 2022
INVESTMENTS PEAKED IN 2022 Software development Total investment ▪ Investments in new games peaked in H2 2022 ▪ Total investments (Software development + M&A) also peaked in 2022 15 * 2023E based on consensus for H2 23
Slide 16: Diversified Investments
DIVERSIFIED INVESTMENTS 50+ PROJECTS IN H123, BREAKDOWN OF DEV COSTS ▪ Over 20 projects with annualised spend of $500k+ in H1 23 ▪ No game accounted for more than 15% of total ▪ 10%+ invested in new tech, media & platforms ▪ Redoubled effort to optimise capital allocation among different projects 16
Slide 17: Balance Sheet
BALANCE SHEET ▪ Net cash position decreased to $14.3m at 30 June 2023, reflecting lower profit and continued investments in software development ▪ The decrease in Intangible assets primarily reflects the impairment of development costs and goodwill ▪ The decrease in receivables and payables is mostly t
Slide 18: Cash Utilisation in H1 23
CASH UTILISATION IN H1 23 $14.3m CASH AT 30 JUNE 2023 ▪ $16.9m investments in development of new games (including unannounced titles) ▪ Timing differences reversal in H1 equals $4.2m ▪ M&A investment limited to $1.2m ▪ Cash position at the end of December 2023 expected to be between $10-20m 18
Slide 19: Strategic Review
STRATEGIC REVIEW Alex Nichiporchik (CEO, Founder)
Slide 20: Five Year Plan
FIVE YEAR PLAN IP ORIGINATES FROM GAMES & ANIMATED SERIES GAAS, ANIMATED SERIES, INTERACTIVE MEDIA CO EXIST BIGGER TITLES AND TV SERIES 2023 2024 2025 2026 2027 MORE BIGGER TITLES COMING OUT, CROSS MEDIA FUELED BY LIVE ACTION MEDIA PROFITABLE FRANCHISES 20
Slide 21: 1000-Hour Game
1000-HOUR GAME ▪ Emergent gameplay: systems instead of levels ▪ User generated content ▪ Persistent procedurally generated worlds ▪ PvP, PvE, and base building multiplayer 21
Slide 22: Case Study 1: Franchise Creation
CASE STUDY 1: FRANCHISE CREATION ▪ Early start - Steam page up since mid-2021 ▪ Playable demo for Steam Next Festival ▪ Validation justifies game delay ▪ Early Access launch gets 90% +ve reviews -> Over $500k in sales + 200k wishlists 22
Slide 23: Case Study 2: Franchise Expansion
CASE STUDY 2: FRANCHISE EXPANSION ▪ Special build developed for live events ▪ Twitch to Play Punch Club ▪ Punch Club finally launched in 2016 ▪ Meticulous marketing plan ▪ Sim-launch of the sequel in July 2023 -> over 5,000 CCUs + 200k wishlists 23
Slide 24: Case Study 3: Hello Neighbor Franchise
CASE STUDY 3: HELLO NEIGHBOR FRANCHISE ▪ Hello Neighbor VR spinoff doing well ▪ Hello Neighbor 2 rating improvement ▪ Key updates coming to consoles ▪ New TV episodes drop on October 7th 24
Slide 25: Announced Pipeline
ANNOUNCED PIPELINE 1. Critter Cove – a cozy life sim adventure that takes places across a string of islands in a colorful open world 2. Tamarak Trail - A deck-building roguelike, with customisable dice 3. Lil' Gardsman - A deduction adventure where Lil is tasked with deciding the fate of over 100 un
Slide 26: Closing Remarks
CLOSING REMARKS Alex Nichiporchik (CEO, Founder)
Slide 27: Core Strategy
CORE STRATEGY …across Global …creating long …focused on IP multiple developer term scalable ownership… media publisher… franchises… formats 27
Slide 28: Outlook
OUTLOOK The Board remains confident the Company has adopted the right strategy and is on track to deliver results in line with recently-reset expectations 28
Slide 29: Q&A
Q&A