{"id":1520,"date":"2024-11-20T08:10:00","date_gmt":"2024-11-20T07:10:00","guid":{"rendered":"https:\/\/fragbitegroup.com\/mfn_news\/interim-report-for-the-period-january-september-2024\/"},"modified":"2024-11-20T08:10:00","modified_gmt":"2024-11-20T07:10:00","slug":"interim-report-for-the-period-january-september-2024","status":"publish","type":"mfn_news","link":"https:\/\/fragbitegroup.com\/en\/press\/interim-report-for-the-period-january-september-2024\/","title":{"rendered":"Interim report for the period January \u2013 September 2024"},"content":{"rendered":"
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Fragbite Group AB (publ) (\u201cFragbite Group\u201d or \u201cThe Company\u201d) hereby issues the interim report for the period 1 January to 30 September 2024.<\/strong><\/p>\n<\/div>\n

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Third quarter 2024<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n
Revenue<\/td>\nSEK 51.8 million<\/td>\n(61.3)<\/td>\n<\/tr>\n
EBITDA<\/td>\nSEK 2.2 million<\/td>\n(2.7)<\/td>\n<\/tr>\n
Adjusted EBITDA<\/td>\nSEK 2.2 million<\/td>\n(2.7)<\/td>\n<\/tr>\n
Operational EBIT (1)<\/td>\nSEK -0.6 million<\/td>\n(0.7)<\/td>\n<\/tr>\n
EBIT<\/td>\nSEK -21.0 million<\/td>\n(-21.5)<\/td>\n<\/tr>\n
Result after tax<\/td>\nSEK -23.4 million<\/td>\n(-19.7)<\/td>\n<\/tr>\n
Cash flow from operating activities<\/td>\nSEK -5.9 million<\/td>\n(16.9)<\/td>\n<\/tr>\n
Diluted earnings per share (2)<\/td>\nSEK -0.01<\/td>\n(-0.20)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

First nine months 2024<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n
Revenue<\/td>\nSEK 154.2 million<\/td>\n(176.8)<\/td>\n<\/tr>\n
EBITDA<\/td>\nSEK 0.7 million<\/td>\n(11.0)<\/td>\n<\/tr>\n
Adjusted EBITDA<\/td>\nSEK 6.2 million<\/td>\n(11.0)<\/td>\n<\/tr>\n
Operational EBIT (1)<\/td>\nSEK -7.6 million<\/td>\n(5.5)<\/td>\n<\/tr>\n
EBIT<\/td>\nSEK -101.8 million<\/td>\n(-60.1)<\/td>\n<\/tr>\n
Result after tax<\/td>\nSEK -86.0 million<\/td>\n(-71.6)<\/td>\n<\/tr>\n
Cash flow from operating activities<\/td>\nSEK -9.3 million<\/td>\n(2.7)<\/td>\n<\/tr>\n
Diluted earnings per share (2)<\/td>\nSEK -0.03<\/td>\n(-0.74)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

1<\/strong> Operational EBIT is defined as EBIT excluding non-operational amortisation and impairment of intangible assets<\/em>
2<\/strong> Per number of shares at the end of the period<\/em><\/p>\n

Invitation to information meeting<\/strong>
The company will hold an information meeting on 27 November via tele conference during which CEO Stefan Tengvall will present the report and upcoming activities as well as hold a Q&A session. Prior to the meeting, shareholders are invited to submit questions by email to ir@fragbitegroup.com. A separate invitation with more information and a link will be press released.<\/p>\n

CEO Stefan Tengvall comments<\/strong><\/p>\n

The third quarter of the year started with the Company completing the rights issue adopted at the end of May \u2013 an important component in restructuring and rebuilding Fragbite Group.<\/p>\n

During the quarter, the Group developed in the positive direction expected by the Board and management following the cost reduction programme. EBITDA and adjusted EBITDA for the quarter were SEK 2.2 million compared with the second quarter when they were both negative. It will take some more time for the Company to fully recover, but at this level we can see that improvements are yielding effect. All identified cost reductions are now fully implemented, but efforts to increase overall efficiency in the Group\u2019s subsidiaries and the Group as a whole continues.<\/p>\n

Revenue<\/strong>
Revenue for the quarter was SEK 51.8 million, which is lower than the same period in the previous year and below our forecasts. This is mainly attributable to the Gaming business area, for the most part due to a delayed release. The release plan for the year included the mobile version of one of the most prominent titles Playdigious has signed so far. Our team has been ready to release the game for some time, but due to requests from the IP owner, both the announcement and release of the game have been postponed until 2025, taking their pipeline into account. As this game was central to Playdigious\u2019 core business of porting, this has had a noticeable effect on the business area\u2019s overall revenue in the third and fourth quarters. Playdigious has worked with the IP owner to find solutions, and an advance payment was made in the fourth quarter as compensation \u2013 the first of three until release. We look forward to presenting this exciting game on the other side of the New Year.<\/p>\n

High activity at Playdigious<\/strong>
Playdigious had an intense quarter in terms of marketing campaigns, participating in several events. The highlight of the summer was the live presentation of Crown Gambit at Gamescom, the world\u2019s largest event for computer and video games. Crown Gambit is the third title that Playdigious Originals has signed. The game is planned for release in the first half of 2025, when the much-awaited Fretless \u2013 The Wrath of Riffson is also expected to reach the market.<\/p>\n

Playdigious has placed added focus on distribution during the quarter, particularly in regard to the Chinese market. Three applications, including one for award-winning title Spiritfarer, have been pending approval for some time. As it is the Playdigious team\u2019s assessment that there are other titles in the portfolio that would do well in China, negotiations are in progress with potential new partners with the objective of shortening the processing time for new applications. A contract for Loop Hero was recently signed which is very positive news.<\/p>\n

The total estimated net revenue of the Playdigious pipeline of new games remains between EUR 10 and 17 million. The estimate corresponds to a game\u2019s total net revenue over a period of three years from release, before licensing costs and platform fees. We aim to publish an update on the value of this pipeline during the first quarter of 2025. Despite the delay of the autumn\u2019s big title, the plan to further increase the release pace in 2025 still hold.<\/p>\n

The Swedish Cup establishes important partnerships<\/strong>
Sweden\u2019s largest national esports tournament began at the end of the third quarter. The tournament, played in Counter-Strike, is organised by subsidiary Fragbite AB whose business unit Config assists sponsors and partners with brand-building communication. A testament of last year\u2019s success is the fact that MAX Burgers, Tele2 and Spendrups have all returned as sponsors alongside the new sponsor Unibet. The team\u2019s success in in engaging global market leader FACEIT as a platform partner was a real feather in the cap and allowed for a broader distribution of the Swedish Cup. The final was held last weekend in front of a full arena and the first statistics show record viewing numbers and high levels of engagement across all channels. When the time comes to report on the fourth quarter, we will have a complete outcome of this year's tournament and with it plans for how to grow next year's Swedish Cup.<\/p>\n

An ecosystem takes shape<\/strong>
The Web3 business area has delivered a strong quarter in terms of revenue and EBITDA, while in terms of cash flow we continue to see a negative effect from the public launch of $KOBAN not having been carried out during the end of 2023 as initially planned.<\/p>\n

At Lucky Kat and Wagmi, work has been continuing in preparation for the upcoming public launch of $KOBAN. During the period, we were pleased to announce a partnership with DAO Maker \u2013 the world\u2019s leading launch pad. DAO Maker is highly sought after and accepts less than 1% of all partnership applications. This is a positive indication that the leading global launch pad sees the potential in $KOBAN\u2019s ecosystem.<\/p>\n

In late September, an NFT sale was carried out for a collection tied to Lucky Kat\u2019s new brand mascot Kumo. The aim of the campaign for Kumo was to build Lucky Kat\u2019s brand as a game developer and web3 studio, and to show the strength of the ecosystem of games and digital assets based on the $KOBAN. Initially, the plan was to release the NFT collection in three stages, all of them free, but with such a positive response after the first two stages and high NFT turnover in the market, we decided to make the third stage a sale. Kumo topped the list of the best-selling NFT collections for many weeks and currently has a market value of circa USD 800,000. I am impressed by how the team has successfully packaged, marketed and sold this collection.<\/p>\n

The business area has a strong pipeline of business opportunities. Over the period, Lucky Kat and Wagmi have taken several important steps to establish the foundations of a B2B business with commercial partnerships and services in connection with $KOBAN\u2019s ecosystem. We have started the development of $KOBAN as a protocol token, which enables not only added revenue models but also node sales \u2013 something we believe can increase the business area's financial upside. We expect 2025 to be a year of business growth.<\/p>\n

Work-for-hire strengthens revenue<\/strong>
FunRock & Prey Studios have continued the work-for-hire project which was initiated early in Q2, alongside their work on MMA Manager 2. As recently communicated, we have expanded the work-for-hire business with an additional assignment. Under the first projecct, the studio built a white- label game based on MMA Manager 2. This new assignment is also for a white-label game for which the subsidiary has utilised an inactive IP.<\/p>\n

The business has gradually become more efficient and was profitable in terms of EBITDA for most of the period. I am pleased to see an inactive IP from the Company\u2019s broad portfolio being utilised for new business \u2013 using our IPs as leverage is a key part of Fragbite Group\u2019s strategy. These assignments are profitable and provide a good cash injection, and we have a plan for how the subsidiary will take the next step and become profitable.<\/p>\n

Looking ahead<\/strong>
Our most important task remains to ensure that the healthy profitability that characterises much of the business is extended to the whole Group, at both individual subsidiary and Group level. When we put 2024 behind us, it will have been a turbulent year in many respects, but I am extremely proud of all the employees who have worked hard to turn things around to the much-improved point where we stand today. There is now just over a month of 2024 left, during which we expect a high level of activity in all areas. I look forward to closing the year and then starting 2025 with renewed vigour.<\/p>\n

Stockholm 20 November 2024<\/em><\/p>\n

Stefan Tengvall, President & CEO<\/p>\n

The report is attached to this press release and available for download from the Fragbite Group website:\u00a0www.fragbitegroup.com\/financial-reports<\/a><\/p>\n<\/div>\n

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For questions, please contact:<\/strong><\/p>\n

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Erika Mattsson, Chief Communications Officer
em@fragbitegroup.com<\/a>
Phone: +46 8 520 277 82<\/p>\n

Redeye AB is the Company\u2019s Certified Adviser.<\/p>\n<\/div>\n

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About us<\/strong><\/p>\n

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Fragbite Group (publ) is a Swedish corporate group with a portfolio of established subsidiaries that develop, adapt and publish games and esports content within GAMING, ESPORTS and WEB3. Our products are developed for both traditional platforms \u2013 PC, mobile and console \u2013 and modern platforms built on blockchain technology. The Group is headquartered in Stockholm and listed on Nasdaq First North Growth Market.<\/p>\n<\/div>\n

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This information is information that Fragbite Group 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 persons set out above, at 2024-11-20 08:10 CET.<\/em><\/p>\n<\/div>\n

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Attachments<\/strong><\/p>\n

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Fragbite Group Q3 2024 FINAL (eng)<\/a><\/p>\n<\/div>\n