Starbreeze AB (publ) Year-End Q4 2019 report

Tue, Feb 11, 2020 08:00 CET

Fourth quarter 2019

Net sales amounted to SEK 51.1 million (82.5). PAYDAY accounted for SEK 50.8 million (20.4).

EBITDA* amounted to SEK 26.8 million (-73.7).

Depreciation, amortization and impairments totaled SEK 221.0 million (1428.6).

Costs related to the reconstruction amounted to SEK 8.6 million.

The loss before tax amounted to SEK -156.7 million (-1264.7).

Basic and diluted earnings per share were -0.30 (-3.96 SEK).

The Stockholm District Court approved the proposed composition arrangements in the reconstruction on 6 December 2019 and the ruling took legal effect on 27 December.

After the end of the period

Starbreeze held an extraordinary general meeting on 13 January 2020. The EGM resolved to amend the terms of the company’s outstanding convertible bond to extend the maturity of the bond to December 2024 and adjust the conversion price to SEK 2.25 per share.

Full year 2019

Net sales decreased by 20 percent to SEK 280.0 million (350.0). PAYDAY accounted for SEK 109.4 million (97.7).

EBITDA* amounted to SEK -116.5 million (-10.3).

Depreciation, amortization and impairments totaled SEK 387.9 million (1,567.5).

Costs related to the reconstruction amounted to SEK 36.5 million for the full year.

The loss before tax was SEK -452.4 million (-1,347.2).

Basic and diluted earnings per share were SEK -1.22 (-4.20).

Cash and cash equivalents at the end of the period amounted to SEK 82.8 million (69.3).

CEO Mikael Nermark remarks on the report: Full focus on PAYDAY

Successful completion of the reconstruction

On December 6, 2019 the reconstruction process came to a successful conclusion with composition agreements reached with all creditors. We are now fully focused on the core business – creating games, with PAYDAY front and center.

New DLC for PAYDAY2 generated higher than expected sales and player numbers

We released new material for PAYDAY 2 in October, which was enthusiastically received by our community, brought our concurrent players to the highest level in some time and generated high sales in the fourth quarter.

This is a good sign that confirms the interest in a future release of PAYDAY 3 and lays a stable foundation for continued efforts. Starbreeze will release additional updates to PAYDAY 2 in 2020. As of 3 January, sales will gain further momentum through the increase in Starbreeze’s share of sales via Steam from 70 to 75 percent.

Constructive discussions concerning a publishing agreement for PAYDAY 3

We are engaged in ongoing discussions of a publishing agreement for PAYDAY 3 and intend to present one before the end of the first half of 2020. PAYDAY is the company’s most important brand and we are seeking a good partner that can provide financial stability and possesses the marketing and distribution resources required to power the best possible launch and further development of the product.

Discussions concerning a publishing agreement for PAYDAY: Crime War are ongoing in parallel and we are optimistic that we will be able to present a publishing agreement before the end of the first half of 2020 here as well.

Focus on building a successful organization

Throughout the quarter, we maintained sharp focus on developing and strengthening the organization. Efforts to reduce total costs and create a more efficient organization adapted to the current situation were successful. Above all, I am proud that some former employees have chosen to come back to Starbreeze.

With a clearer organizational structure in which each developer assumes product ownership, we are creating continuity in a more cohesive organization with the ultimate goal of building better games.

The company’s ongoing expenses have been significantly reduced since the reconstruction began on 3 December 2018. This has been achieved by cutting costs and boosting efficiency in human resources and purchasing, as well as actions including subletting a third of the office space at company headquarters in Stockholm.

With a successful conclusion to the reconstruction, keener interest in PAYDAY 2, promising discussions regarding publishing agreements for PAYDAY 3 and PAYDAY: Crime War and a more efficient organization, we are optimistic about our future as a company that is once again creating games in high demand.

Mikael Nermark

Starbreeze CEO

For more information, please contact:

Maeva Sponbergs, EVP Communication

Tel: +46(0)8-209 208, email: ir@starbreeze.com

Starbreeze AB is required to disclose this information under the EU Market Abuse Regulation and the Securities Market Act. The information was provided by the above contact person for publication on February 11, 2020 at 08:00 CET.

About Starbreeze

Starbreeze is an independent developer, creator, publisher and distributor of PC and console targeting the global market, with studios in Stockholm, Barcelona and Paris. Housing the smash hit IP PAYDAY, Starbreeze develops games based on proprietary and third-party rights, both in-house and in partnership with external game developers. Starbreeze shares are listed on Nasdaq Stockholm under the tickers STAR A and STAR B with the ISIN-codes SE0007158928 (A share) and SE0005992831 (B share). For more information, please visit starbreeze.com