Continued strong growth

Third quarter 2021

• Net revenue for the third quarter amounted to SEK 44.1 (0.9) million.
• EBITDA for the third quarter amounted to SEK 2.9 million (-3.5) million. Items affecting comparability had an effect of SEK -0.2 million on earnings.
• Adjusted EBITDA (before items affecting comparability) amounted to SEK 3.1 (-3.5) million.
• Net result after tax was SEK -11.8 (-7.9) million.
• Earnings per share after dilution amounted to SEK -0.14 (-0.24).

First nine months 2021

• Net revenue for the first nine months amounted to SEK 63.7 (3.4) million.
• EBITDA for the first nine months amounted to SEK -4.2 (-7.9) million. Items affecting comparability had an effect of SEK -3.5 million on earnings.
• Adjusted EBITDA (before items affecting comparability) amounted to SEK -0.6 (-7.9) million.
• Net result after tax for the first nine months was SEK -36.3 (-21.4) million.
• Earnings per share after dilution amounted to SEK -0.42 (-0.66).

Significant events during the quarter

• The offering prior to listing on Nasdaq First North Growth Market was 788 percent subscribed and raised just over SEK 22 million before issue expenses. Trading in Fragbite Group’s shares commenced on 12 July 2021 under the ticker FRAG.

Significant events after the end of the period

• Lars Johansson appointed new CFO.
• Additional purchase consideration paid for the Playdigious acquisition of EUR 1.5 million, EUR 0.75 million of which in cash and EUR 0.75 million via 1,824,543 newly issued shares.

CEO’s comments
Fragbite’s net revenue during the third quarter amounted to SEK 44.1 million and adjusted EBITDA was SEK 3.1 million. Our business is therefore growing profitably while we have continued to invest in our business with a particular focus on acquisition-driven growth, new e-sports and game development projects and increased collaboration within the Group companies in order to leverage synergies. We have strengthened and expanded our growing portfolio of games and we are working hard with all our subsidiaries to achieve their full potential. We are confident that our strategy and our ability to harness the positive underlying market trends in gaming and e-sports will generate significant value over time. We are committed to providing highly attractive e-sports concepts and mobile games. Organic growth and carefully selected and executed acquisitions make up our growth strategy.
 
Developments during the third quarter
During the third quarter of 2021, the Group released two significant updates to existing games (Dead Cells and Northgard) and two games in a soft launch phase (MMA Manager 2: Ultimate Fight and Army Battle). Two of these games were produced in the Group’s own studios and the other two through the Group’s publishing operations in Playdigious. After the end of the quarter, one additional game, Sparklite, was released, also through Playdigious. During the quarter, we also announced that we are forming a chess e-sport league with Sveriges Schackförbund. Svenska Schackligan is scheduled for launch before the end of 2021 with a tournament format that will be played continuously throughout 2022. Chess is growing rapidly in Sweden, particularly due to the Netflix series “The Queen’s Gambit”, and the aim is that Sweden’s only official e-sport chess league will engage more chess players in the 18-35 year-old target group and establish chess as a real e-sport in Sweden, also attracting a new category of Fragbite AB customers and sponsors.
 
The Publishing and Indie Games (Playdigious) business area, which has been part of our group since May 2021, showed strong growth and has grown faster than the annual growth rate for our addressable market.

The Mobile Gaming business area experienced negative sequential growth for the third quarter, as expected. This was partly due to the studio’s reduced marketing of MMA Manager: Fight Hard as the sequel MMA Manager 2: Ultimate Fight is scheduled for a global launch in the fourth quarter. MMA Manager 2: Ultimate Fight is expected to drive positive organic growth for the business area in the coming years.
 
In the e-sports business area, which consists of Fragbite AB, the third quarter has presented some challenges, which are a direct effect of the pandemic. Cancelled live events and a customer base that has tightened its marketing have contributed to lower earnings in 2021 than in the previous year. However, we see a brighter outlook going into 2022 and I am very confident that our new growth initiatives and concepts in the coming year will contribute positively.
 
A clear sign that e-sports continues to grow is that the recent e-sports tournament PGL Major Stockholm 2021, held in a packed Avicii Arena, became the most successful CS:GO event of all time according to escharts.com.
 
First nine months of the year
Net revenue for the nine-month period amounted to SEK 63.7 million and adjusted EBITDA was SEK -0.6 million. We have made two acquisitions during the year – the Swedish company Fragbite and the French company Playdigious.
 
As we sum up the first nine months of the year, we are well positioned to deliver on our planned activities and goals for 2022 and beyond. Several promising game titles have entered soft launch, and further game releases are planned for the fourth quarter and next year. The focus is on executing on our acquisition strategy and supporting our business areas to further strengthen the Company in the long term. Our acquisition pipeline is strong and our long-term vision and goal to build one of the Nordic region’s leading e-sports and gaming entertainment groups stands firm. The fact that we are engaged in intense discussions with potential acquisitions, combined with our healthy cash position, leads me to believe that we have an exciting future ahead of us.

Stefan Tengvall, President and CEO

Interim report for the period January – September 2021 (Link)