Sales growth of 317% during transformative quarter - Interim report 3 2020/2021
Financial highlights - 1 April 2021 - 30 June 2021
- Net sales amounted to MSEK 31.5 (MSEK 7.5), an increase of 317%, of which organic growth amounted to approximately 30%*.
- Adjusted EBITDA amounted to MSEK 6 (MSEK 3.9), an increase of 53%, and adjusted for currency effects and non-recurring costs related primarily to acquisitions**.
- EBITDA amounted to MSEK 3.6 (MSEK 3.6).
- Cash flow from operating activities before changes in working capital amounted to MSEK 3.5 (MSEK 2.7) during the quarter.
- Earnings per share before and after dilution during the quarter amounted to SEK 1.1 (SEK 1.1).
Financial highlights - 1 October 2020 - 30 June 2021
Net sales increased 112% and amounted to MSEK 49.2 (MSEK 23.2)*.
- Adjusted EBITDA amounted to MSEK 14.7 (MSEK 12.5), an increase of 18% and adjusted for currency effects and non-recurring costs related primarily to acquisitions.
- EBITDA amounted to MSEK 11.9 (MSEK 11.9).
- Cash flow from operating activities before changes in working capital amounted to MSEK 8.1 (MSEK 8.0).
- Earnings per share before and after dilution amounted to SEK 4.0 (SEK 3.9).
* Magic Find is consolidated from June 1, 2021
** As exchange rate differences and non-recurring costs in the two comparison quarters were significant, approximately TSEK 900 relates to foreign exchange expenses, and approximately MSEK 1.5 relates to non-recurring costs, normalization has been made to make it easier to compare the company's development.
Significant events during the period April 1 - June 30, 2021, in brief
The Company acquired Magic Find Inc. - a leading player in streaming on YouTube and owner of several well-known gaming communities. The acquisition is transformative and in line with the Company's strategy to broaden its revenue base, move into vertical streaming and grow with communities in new games. In 2020, Magic Find's sales amounted to approximately MSEK 296 with an EBITDA of approximately MSEK 24. The acquisition was consolidated on June 1, 2021.
- The Company carried out directed share issues of approximately SEK 110 million to finance the acquisition of Magic Find Inc.
- The Company received SEK 20 million in loan financing from a leading Nordic bank to promote M.O.B.A's future expansion and growth.
- The Company has entered into an agreement with ABG Sundal Collier ASA ("ABGSC") that ABGSC will act as a liquidity guarantor for M.O.B.A's share.
- The Company launched Creator1 - a company that offers our Content Creators a simplified process of conducting marketing campaigns with advertisers directly in our Creators YouTube channels. M.O.B.A. also broadens its offering by being able to offer access to in-demand platforms such as YouTube, Twitch, Facebook, and Twitter.
Significant events after the period April - June 2021
The Company held an extraordinary general meeting where decisions were made on a split of shares and change of financial year to reflect calendar year. The split of shares meant that each existing share was split into ten (10) new shares. The split means that the number of shares in the Company increases from 2,238,582 shares to 22,385,820 shares. The record date for the split was August 6, 202.
- To demonstrate Magic Find's impact on the Group, disclosing the revenue development in July is relevant. Revenues in July tentatively amounted to MSEK 23.5, an increase of 898% compared with the corresponding period last year, with organic growth of approximately 20%.
Sales growth of 317% during transformative quarter
M.O.B.A. Network delivers its best, and most eventful, quarter to date where revenues increased by 317% and adjusted EBITDA increased by 53%., M.O.B.A. completed a transformative acquisition financed by directed share issues of SEK 110 million and stepped into the huge streaming vertical for gaming through the acquired YouTube network Union For Gamers, run by the new subsidiary Magic Find.
Pro forma figures for the full year 2020 for M.O.B.A. Network including Magic Find show that revenues amounted to approx. SEK 331 million with an EBITDA of approx. 40 MSEK.
During the quarter, growth was accelerated through the acquisition of Magic Find. The acquisition means that we are now a significant player in video and streaming, where advertising revenues over time are expected to increase significantly and create higher revenues for M.O.B.A. In connection with the acquisition, a new share issue of SEK 110 million was carried out. I would like to take this opportunity to thank all investors, both new and existing, for your commitment that created the opportunity to complete the acquisition. The issue proceeds and the profits from the business contribute to us holding a strong financial position and, if the opportunity arises, making additional acquisitions from existing cash at hand.
All our business divisions delivered strong results during the quarter with organic growth of approximately 30% and sales in USD, the entire company's currency in terms of revenue, increased by 400% during the quarter compared to 2020.
Through the acquisition of Magic Find, M.O.B.A. delivered on its goal to strengthen our market position in video and streaming and broadened the portfolio of strong community brands such as well-known MMO-Champion.com and Hearthpwn.com. During the initial period with Magic Find, we have focused on integration, synergies and made plans for how the Group's products can be improved. Great focus has been placed on the YouTube network Union For Gamers (UFG), which in June had just under two billion video views from content produced by the "content creators" who belong to the network. During the summer, we have implemented a major change in UFG by replacing and implementing a completely new back-end system that will mean that we can offer our creators more revenue opportunities, such as direct partnerships and the opportunity to recover revenue that content thieves plagiarize, and other benefits that make UFG more attractive in the YouTube segment. When this implementation is completed and quality assured, we see great opportunities to expand the team that works with video and new revenue, mainly through direct sales on YouTube content, which is something we do not currently offer. We expect to be working on this during the last quarter of 2021 and that it will be a strong contributing growth area in 2022 and onwards.
New investments in creators
Together with Magic Find, we have created the new subsidiary Creator1, which was launched at the end of June. Creator1 will operate in symbiosis with the new investments in "content-creators". Creator1 will act as a marketer of “content-creators” and enter into direct partnership deals with relevant brands in collaboration with M.O.B.A Services direct sales. Creator1 has recruited creators who are currently active within UFG and has already completed a handful of direct deals with selected creators during the summer. Here, too, we see great opportunities to create a large business in the long run, and we will invest in the future to strengthen the organization.
With acquisitions and a stronger position in the market, we now have greater opportunities to use our size to improve agreements and collaborations in the advertising market. Through the acquisitions we have made, we have obtained agreements with various advertising networks (ad brokers) in connection with acquisitions. We have spent a lot of time evaluating these and created a plan for how we can optimize collaborations and increase revenue. We have seen increased earnings for each ad served during the quarter but are aware that there is still significantly much more growth to be had. Through our new size, we are now negotiating with advertising networks for better terms and see great interest in us as a company and the brands and products we have. We aim to improve our agreements continuously during the autumn to create further growth and profitability.
M.O.B.A. Network has built a strong position organically and through acquisitions and created market-leading communities in attractive gaming genres. We have a clear, proven effective growth strategy and a strong financial position. M.O.B.A. Network has also demonstrated its ability to create stable, new revenue streams while maintaining high profitability. Our goal remains to continue to deliver high, stable growth both organically and through acquisitions with good profitability.
This disclosure contains information that M.O.B.A Network AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 25-08-2021 07:00 CET.
Björn Mannerqvist, VD
FNCA Sweden AB | +46(0)8-528 00 399| firstname.lastname@example.org
M.O.B.A Network AB runs several global online communities for gaming - and esportfans.