GlobeNewswire

Next Games Corporation Half-Year Review January-June 2020 - Publishing Profitability Doubled, Turning Company EBITDA Positive

Share

Next Games Corporation Company Release 28 August 2020 at 09:00 EEST

This release is a summary of the January-June 2020 Half-year Review. The full report is attached to this release and available at www.nextgames.com/reports

January-June 2020 in Short
The company has transitioned to reporting financial figures in millions of euros.

  • Revenue was EUR 14.4 (19.2) million
  • Gross profit was EUR 7.5 million, 52% of revenue (EUR 11.3 million; 59%)
  • EBITDA was EUR 0.3 (-1.5) million
  • EBIT was EUR -1.6 (-3.5) million
  • Adjusted Operating Profit was EUR 0.1 (-1.8) million
  • Publishing Operations EBITDA was EUR 3.4 (2.3) million, 24% of revenue (12%)
  • Product development costs were EUR 2.6 (3.3) million, 18% (21%) of revenue
  • At the end of the reporting period, the company had 108 (108) employees
  • Cash flow from operating activities turned positive and was EUR 1.3 (-0.7) million, and cash and cash equivalents at the end of the period were EUR 6.5 (4.7) million

(Numbers in brackets refer to the corresponding year-on-year period, unless otherwise mentioned)

Chief Executive Officer Teemu Huuhtanen: Significant Profitability Improvements Puts Us in a Good Position to Release New Games

The first half of 2020 was strong for Next Games. Our strategy to develop licensed games is working. Our business turned profitable due to the operational profitability of The Walking Dead games, and a cost level that remained at our target level.

We were able to significantly improve the company’s profitability and our Publishing Operations achieved a significant milestone by reaching an EBITDA level of 24 per cent (12%) amounting to EUR 3.4 (2.3) million. This achievement is already a strong indication of the relative profitability the company is capable of, and we believe that there are still additional opportunities to improve profitability in the longer term.

Continuing our significant investments into product development is still reflected in the company’s profitability profile: product development costs amounted to EUR 2.6. million (18% of revenue) during the reporting period, as many as 52 per cent of employees worked on new products. Thus, we can be extremely proud of the company’s EBITDA of EUR 0.3 million. This increased profitability was also reflected in cash flow from operating activities, which turned positive and was EUR 1.3 (-0.7) million. We believe that our investment in product development is worthwhile in the long run.  Although our operating result (EBIT) was still negative due to the effect of depreciations relating to previous investments made into technology and our common infrastructure, it also improved significantly by EUR 1.9 million to EUR -1.6 (-3.5) million.

Revenue during the first half of the year, EUR 14.4 million, was in line with our expectations. We aim to increase revenues through our new products and the company is now in an excellent position to stack revenue whilst continuing to invest heavily in new product development. Development of the Strange Things mobile game has proceeded as planned during the first half of 2020. The game’s concept has been tested, and with the addition of the latest features preliminary results are promising. We are planning to start bringing the game to the market and scaling in stages starting Q4 2020.

A key reason for the turnaround in profitability is our licensed games strategy: the appeal of well-known brands brings a strong organic uplift of players to our games. This free portion of players lowers our total user acquisition costs. Our advanced analytics enables us to continuously evaluate the organic user flow and to optimize the total cost of game-specific user acquisition. This is reflected in the improved profitability of our live games. Continued focus on development has resulted in the ARPDAU (Average per Daily Active User) of our “The Walking Dead” games to rise steadily from last year's first quarter average €0.24 to €0.33.

I’m extremely proud of our achievements during the first half of this year. I want to thank all the Next Games employees for their incredible work during the first months of 2020, despite the challenges presented by the COVID-19-pandemic. Even during exceptional circumstances, we were able to continue to operate our business almost normally and the development of our games proceeded as planned.

The achievements of the first half, combined with a well-functioning licensed game strategy and a strong product development pipeline, give us a good position to further develop our business during the second half of this year, and achieve our outlook for the full year.

Key Figures

EUR millionJan-Jun 2020Jan-Jun 2019ChangeJan-Dec 2019
Company
Revenue14.419.2-25%34.7
Gross Profit7.511.3-33%19.7
EBITDA0.3-1.5123%-3.5
Operating Result (EBIT)-1.6-3.554%-7.4
Adjusted Operating Result0.1-1.8104%-4.0
Gross profit %52%59%7ppt57%
EBITDA %2%-8%10ppt-10%
Operating Result (EBIT) %-11%-18%7ppt-21%
Adjusted Operating Result %1%-9%10ppt-11%
Publishing Operations Profitability
EBITDA3.42.349%3.8
EBITDA %24%12%12ppt11%
Research and Development Key Figures
Investments1.71.421%2.4
Expenditure3.34.0-17%7.6

Key Figures Per Quarter

EUR millionJan-Mar 2020Jan-Mar 2019ChangeApr-Jun 2020Apr-Jun 2019Change
Revenue7.39.8-25%7.19.4-25%
Gross Profit3.85.6-33%3.85.7-34%
EBITDA-0.2-1.488%0.5-0.1603%
Operating Result (EBIT)-1.2-2.452%-0.5-1.157%
Adjusted Operating Profit-0.3-1.378%0.4-0.5172%
Gross profit %52%57%5ppt53 %60 %7ppt
EBITDA %-2%-14%12ppt7 %-1 %8ppt
Operating Result (EBIT) %-16%-24%8ppt-7 %-12 %5ppt
Adjusted Operating Result %-4%-13%9ppt5 %-5 %10ppt

New Outlook for 2020

The Company expects revenues from already published games (The Walking Dead titles) to continue on a flat or declining trend. With recent profitability improvements, the company believes its publishing operations EBITDA from already published games (The Walking Dead titles) to improve clearly in 2020 compared to 2019 when it was EUR 3.8 million. We also expect to start scaling 1-2 games during 2020.

Previous Outlook (given on 28 February)

In 2020, Next Games expects to achieve moderate revenue growth. The potential growth will be weighed towards the end of 2020. The company believes its publishing operations EBITDA will continue to be profitable. The company expects the revenues from already published games to continue on a flat or declining trend.

Basis for Change in Outlook 2020

The games industry continues to change, leading to relevant industry adaptation. The company believes that under current market conditions, games are no longer launched in a binary manner, they are scaled and grown over time. The speed of scaling games is dependent on multiple factors. As a result, the Company has decided to remove its full year 2020 revenue guidance. The company intends to evaluate its guidance during the latter part of the year, when a reasonably reliable estimate of full-year revenue can be given.

Audiocast and Phone Conference

We will hold an audiocast and a phone conference in English. Next Games’ H1 2020 review will be presented by CEO Teemu Huuhtanen and CFO Annina Salvén.

The English audiocast starts on 28 August 2020 at 11.00 a.m. EEST. You can join by using the following link: https://nextgames.videosync.fi/2020-h1 or by phone.
Phone conference details:

Dial in by calling your location’s phone number a couple of minutes before the start. Confirmation code: 53717613#

Finland: +358 981 710 310
Sweden: +46 856 642 651
United Kingdom: +44 333 300 0804
United States: +1 855 85 70686

Additional information:

Annina Salvén
CFO
+358 (0) 40 588 3167
investors@nextgames.com

Certified Adviser: Danske Bank A/S, Finland branch, tel. +358 10 546 7938

Next Games in short

Next Games (Helsinki Nasdaq First North: NXTGMS) is the first publicly listed mobile game developer and publisher in Finland, specializing in games based on entertainment franchises, such as movies, TV series or books. The developers of the critically acclaimed The Walking Dead games redefines the way franchise entertainment transforms into highly engaging service-based mobile games. Currently, Next Games is working on multiple new games based on popular entertainment franchises including, Blade Runner Rogue, for the popular Blade Runner franchise and a mobile game based on Netflix’s Stranger Things. For more information head to www.nextgames.com


Attachments

About GlobeNewswire

GlobeNewswire
GlobeNewswire
One Liberty Plaza - 165 Broadway
NY 10006 New York

https://globenewswire.com

GlobeNewswire is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.

Subscribe to releases from GlobeNewswire

Subscribe to all the latest releases from GlobeNewswire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from GlobeNewswire

Incap Corporation: Notification in accordance with Chapter 9, Section 10 of the Securities Market Act on a Change in Holdings (Nordea Bank Abp)23.11.2020 20:30:00 CETPress release

Incap Corporation Stock Exchange Release 23 November 2020 at 9.30 p.m. (EET) Notification in accordance with Chapter 9, Section 10 of the Securities Market Act on a Change in Holdings (Nordea Bank Abp) Incap Corporation has on 23 November 2020 received a notification in accordance with the Securities Market Act, according to which the total holdings of shares and votes of Nordea Bank Abp and the entities controlled by it (Nordea Life Assurance Finland Ltd and Nordea Livförsäkring Sverige AB (publ)) in Incap Corporation (FI0009006407) has decreased below 10 percent threshold. Shareholder: Nordea Life Assurance Finland Ltd and Nordea Livförsäkring Sverige AB (publ) Position of previous notification: 14.7 % out of all shares and votes Date of change in holdings: 20 November 2020 Resulting situation on the date on which threshold was crossed: 581,835 shares, i.e. 10 % out of all shares and votes Incap Corporation's total number of shares amounts to 5,820,224 and each share has one vote. Af

EPH European Property Holdings Limited (EPH) announces plans to issue and offer up to 4,500,000 new ordinary shares23.11.2020 19:00:00 CETPress release

23 November 2020, Road Town, Tortola, BVI EPH European Property Holdings Ltd (the "Company"), an investment company listed on SIX Swiss Exchange which holds an extensive property portfolio with a total value of around USD 1.3 billion across Europe, announces its intention to issue and offer up to 4,500,000 new ordinary shares for a consideration equaling the last reported net asset value (as per 30 June 2020) in the amount of USD 38.82 per share (the "Offer Shares"). EPH will hold a virtual conference on Monday, 30 November 2020 at 3 pm CET to explain details of the capital increase and the company's strategy. You are welcome to register for this event. Please contact corporatefinance@valartis.chto receive dial-in data. The proceeds from the issue of the Offer Shares will be used for funding our future growth through, including, without limitation, the following: acquisition of additional income generating or to be developed commercial properties and investments in our existing real es

Idorsia announces positive results of the two Japanese registration studies with clazosentan23.11.2020 17:45:10 CETPress release

Clazosentan demonstrates significant reduction of vasospasm-related morbidity and all-cause mortality in patients following aneurysmal subarachnoid hemorrhage (aSAH)Clazosentan demonstrates significant reduction of all-cause morbidity and mortality in patients following aSAH in a pre-planned pooled analysis of data from both studies.Idorsia Japan to file New Drug Application (NDA) with the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) in the first half of 2021Global Phase 3 study “REACT” investigating the efficacy and safety of clazosentan for the prevention of clinical deterioration due to vasospasm-related delayed cerebral ischemia in adult patients following aSAH continues to actively recruit Allschwil, Switzerland – November 23, 2020 Idorsia Ltd (SIX: IDIA) today announced positive top-line results of the Japanese registration program investigating clazosentan in adult Japanese patients post-aSAH. The program consisted of two double-blind, randomized, placebo-controlle

Saniona rapporterar positiva topline-resultat från den öppna förlängningen av Fas 2-studien med Tesomet mot hypotalamisk fetma23.11.2020 17:00:00 CETPressemelding

PRESSMEDDELANDE 23 november 2020 Tesomet tolererades väl av patienterna med hypotalamisk fetma under hela den 48 veckor långa studien (24 veckor dubbelblind del följt av 24 veckor öppen förlängning). Inga kliniskt betydelsefulla skillnader kunde noteras avseende hjärtfrekvens eller blodtryck och samtliga patienter som påbörjade den öppna förlängningsstudien slutförde också studien.De patienter som fick Tesomet under hela den 48 veckor långa studietiden påvisades statistiskt signifikanta och kliniskt meningsfulla minskningar av kroppsvikt och midjeomfång från baseline till vecka 48, liksom förbättrad glykemisk kontroll. De förbättringar som observerades under den första dubbelblinda delen av studien bibehölls under hela den senare öppna förlängningsstudien. Även för de patienter som fick placebo under den dubbelblinda delen av studien och sedan Tesomet under den öppna förlängningsstudien påvisades minskningar av kroppsvikt och midjeomfång efter övergången till Tesomet.Saniona kommer att

Saniona Reports Positive Topline Results from Tesomet Phase 2 Open-Label Extension Study in Hypothalamic Obesity23.11.2020 17:00:00 CETPress release

PRESS RELEASE November 23, 2020 Tesomet was well-tolerated in hypothalamic obesity patients throughout the duration of the 48-week trial (24 week double-blind [DB] followed by 24 week open label extension [OLE]), with no clinically meaningful differences in heart rate or blood pressure observed. All patients who entered the OLE study completed it.Patients receiving Tesomet for the full 48 weeks of the study demonstrated statistically significant and clinically meaningful reductions in body weight and waist circumference from baseline to Week 48, as well as improvements in glycemic control. Improvements observed in the DB period of the study were maintained over the duration of the OLE period. Patients who received placebo in the DB period of the study and were subsequently switched to Tesomet for the OLE period also achieved reductions in body weight and waist circumference after being switched to Tesomet.Saniona to host webcast with Dr. Ulla Feldt-Rasmussen on Tuesday, 24 November 202

Incap Corporation: Notification in accordance with chapter 9, section 10 of the securities market act on a change in holdings (Oy Etra Invest Ab)23.11.2020 16:30:00 CETPress release

Incap Corporation Stock Exchange Release 23 November 2020 at 5.30 p.m. (EET) Notification in accordance with Chapter 9, Section 10 of the Securities Market Act on a Change in Holdings (Oy Etra Invest Ab) Incap Corporation has on 23 November 2020 received a notification in accordance with the Securities Market Act, according to which the total holdings of shares and votes of Erkki Etola and the entities controlled by him (Tiiviste-Group Oy and Oy Etra Invest Ab) in Incap Corporation (FI0009006407) has increased over 20 percent threshold. Shareholder: Erkki Etola and entities controlled by him Position of previous notification: 19.20 % out of all shares and votes Date of change in holdings: 20 November 2020 Resulting situation on the date on which threshold was crossed: 1,327,333 shares, i.e. 22.81 % out of all shares and votes Incap Corporation's total number of shares amounts to 5,820,224 and each share has one vote. After November 20, 2020, Erkki Etola's direct holding of shares and v