Starbreeze Interim Report January-March 2023

First quarter 2023

• Net sales totaled SEK 26.7 million (23.5). PAYDAY accounted for SEK 26.4 million (23.3).
• EBITDA* totaled SEK 4.1 million (4.6).
• Depreciation, amortization and impairment totaled SEK 15.6 million (14.5).
• Profit/loss before tax amounted to SEK -24.7 million (-23.8).
• Basic and diluted earnings per share totaled SEK -0.03 (-0.03).
• From January, Starbreeze will receive a higher share of PAYDAY 2 revenue for base games and add-on packs (DLC) from Steam, 80 percent compared to the previous 75 percent.
• On February 16, Starbreeze announced a partnership with Stockholm Syndrome to expand the PAYDAY universe to new media.
• On February 22, The Hostile Takeover Heist was released for PAYDAY 2, as part of the Hostile Takeover campaign.

Significant events after the end of the period

• On April 28, Starbreeze resolved on rights issue of SEK 450 million to accelerate growth initiatives and strengthen its balance sheet, and announced preliminary financial information for the first quarter 2023.

CEO’S MESSAGE

PAYDAY™ 3 to be launched in 2023, and we secure financing for future projects

The last several years, we have worked according to a clear strategy with the aim of building a strong and diversified Starbreeze with a broad and stable business model based on several revenue-generating products. As part of that strategy, we recently announced a rights issue, which aims to accelerate the adopted strategy. We will continue to do what we do best; cooperative multiplayer games with a Games as a Service-model and strong connection to our community and build on the unique skills and experience we possess. The rights issue is at a maximum of SEK 450 million, guaranteed to SEK 250 million by major owners and guarantors. SEK 300 million is intended for game development and growth initiatives. With the issue proceeds together with the proceeds from PAYDAY 3, we can finance the games we plan to release around 2025 and 2027, continue the development of PAYDAY as a franchise and continue the development of new proprietary IPs. We will also build up our publishing business to have the opportunity to publish our own games, as well as those of others – a big step up the value chain for us as a game developer. 

SEK 150 million will go towards strengthening our balance sheet through debt repayment and in connection to the transaction, our owner Digital Bros has undertaken to convert its convertible loan of approximately SEK 215 million into B shares. All in all, we are thus solving debt obligations of close to SEK 400 million. Following completion of the issue, Starbreeze will have a net cash position, very limited debt and be well positioned to deliver on our strategy.

PAYDAY 3 – CAMPAIGN START THIS SUMMER

2023 is the year of PAYDAY. Preparations for the launch continue with ever-increasing intensity. Summer marks the kick-off for our marketing campaigns, to create the biggest possible impression ahead of the game’s release. During April, we initiated our so-called transfer strategy. This means we are dropping clues inside PAYDAY 2 as to how the story of our heisters will continue in PAYDAY 3. It is an important step not only to tie together the story between the games but also to build expectations from the player base for the upcoming release. I, like all of Starbreeze, look forward to showing off what we've spent the last few years doing. In addition to development, which continues until the finish line, we are also working intensively on the steps required to launch simultaneously on PC and console, as well as the planning for DLC-content that will be launched at regular intervals during the game’s lifetime. We are also incredibly proud that there are already more than one million members on Steam who have added the game to their wishlists.

RESULTS

Revenue for the quarter increased by 14 percent compared to the same quarter last year, where underlying sales at Steam in US dollars increased by 8 percent. The result decreased slightly as we invested more in marketing and have recruited more key people to our team.

PAYDAY 2

The anticipation surrounding our upcoming game release is rooted in what we achieved with PAYDAY 2, both historically and in recent years. During the first quarter of the year, the team delivered three additional DLCs for PAYDAY 2 and we follow our strategy of frequent content, expansion and add-on packs to our games. This cadence is, and will continue to be, the key to increasing the lifetime value of our games, for players as well as for Starbreeze.

During the quarter, our peak MAU was 907,808 players. Our community on Steam continues to grow, and not least the number of members on our own portal, Starbreeze Nebula, is growing. Having our own portal is a key for us moving forward to enable added functionality in our games and owning the close dialogue that we maintain with our community.

We are building a Starbreeze for the future. By broadening our portfolio of games based on more IPs, our audience and our revenue streams. We are in a niche where we are an industry leader with unique competence, experience and passion as our leverage going forward. Starbreeze will continue to grow, and continue to deliver world-class experiences. More Starbreeze, to more people.

TOBIAS SJÖGREN, CEO

Webcast
Time: Monday, May 8, 10.00 CEST
Participation: To join the presentation – click here.

For more information, please contact:
Tobias Sjögren, VD
Mats Juhl, CFO
Tel: +46 0(8) - 209 229
E-mail: ir@starbreeze.com

About Starbreeze
Starbreeze is an independent developer, publisher and distributor of PC and console targeting the global market, with studios in Stockholm, Barcelona, Paris and London. 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 www.starbreeze.com

The information was submitted for publication at 07:30 CEST on May 8, 2023.

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