Starbreeze AB (publ) Interim report Q1 2021

First quarter 2021

•     Net sales amounted to SEK 27.9 million (22.0). PAYDAY accounted for SEK 26.9 million (21.7).

•     EBITDA amounted to SEK 22.6 million (16.9).

•     Amortization, depreciation and impairments amounted to SEK 14.5 million (10.4).

•     Profit before tax was SEK -4.2 million (-97.3).

•     Basic and diluted earnings per share were SEK -0.01 (-0.28).

•     Cash and cash equivalents amounted to SEK 148.5 million (107.9).

•     Starbreeze has entered into a global co-publishing agreement with the leading European publishing partner Koch Media for PAYDAY 3.

•     The first chapter of PAYDAY 2: City of Gold were successfully launched during the quarter.

•     Tobias Sjögren was appointed permanent CEO of Starbreeze AB.

CEO Tobias Sjögren remarks on the report: Publishing partner for PAYDAY 3 - the road ahead is clear

I am most proud of our achievement during this first part of the year, a continued increase of the PAYDAY 2 results and two publishing agreements signed. During the quarter we made a co-publishing agreement with Koch Media for the launch of PAYDAY 3 during 2023.

Thanks to this co-publishing agreement and together with the money we already put into the game, PAYDAY 3 is fully funded. The planned investment in development and marketing can range over 50 MEUR up until 18 months after the release of the game, but our plans for how to service the PAYDAY 3 customers obviously extends much longer than that.  Starbreeze will continue to own the PAYDAY IP and to develop the PAYDAY 3 game. The co-publishing structure means that while we co-invest into the game we also have a revenue share that will be great for Starbreeze over the games lifetime.

Operating a game on the global market today is all about the ability of reaching a wide audience while adapting to local variances and needs. Koch Media’s long track record of international publishing will enable us to reach local communities around the world much easier than we ever could achieve on our own. Our own international and diverse team ensures an understanding of our audience and their varying expectations. Combined with Koch Media’s long track record of international publishing and local presence around the globe we build a strong foundation for a growing PAYDAY community.

Our Steam sales in Q1-2021 increased with 53% in compared to the same period last year and EBITDA increased to 22.6 MSEK compared to 16.9 MSEK previous year. This proves not only that our PAYDAY IP has a bright future but also that our team has performed exemplary during the Corona restrictions and while working from home due. As planned, we have continued to strengthen our development organization and have onboarded 27 new team members so far in 2021.

Our focus is set on creating games that continuously monetize over long periods of time and PAYDAY 2 has certainly proved us very capable of just that. Since we launched our new DLC strategy in late 2019, PAYDAY 2 has grown significantly both in revenue and active player base. The fact that the game continuously is found on Steam’s top ranking over concurrent players, is proof that serving gamers with free updates and paid content builds a loyal community over time. During the quarter we successfully released the first DLC, Dragon Heist, of a total of four in the new season City of Gold.

After the end of the first quarter, we signed a licensing agreement with the Canadian mobile publisher PopReach for the mobile title PAYDAY Crime War. This is a game we have worked on internally for quite some time. With PopReach taking over the project and licensing the right to publish PAYDAY Crime War, Starbreeze has taken the first step to broaden our IP beyond our own production capabilities. We look forward to working with PopReach to ensure that PAYDAY Crime War brings the same action-packed gameplay to mobile devices as our players and community already know and love on other platforms.

Going forward we will continue to work with partners to increase the value of our IP’s creating new experiences and products. I believe that in the future, successful entertainment brands need to serve existing and new fans in various media formats to build engagement and long time loyal following. We are currently seeing many examples of this trend of exploring video game IP’s in other media and Starbreeze will certainly develop our own capabilities and work with the right partners to be a strong player in this field.

To summarize, Starbreeze has now put a strong foundation for further growth in place. We have signed two great deals for the PAYDAY franchise and PAYDAY 2 sales are better than in many years. I am confident in our team and our abilities to continuously update PAYDAY 2 with new exciting content and build a great new game in PAYDAY 3.

Tobias Sjögren

CEO Starbreeze

For more information, please contact:

Mats Juhl, CFO
Tel: +46(0)8-209 229, email: ir@starbreeze.com

This information is information that Starbreeze AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on May 11, 2021.

About Starbreeze

Starbreeze is an independent developer and creator 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