CEO Marcus Teilman: “During the second quarter, Fragbite Group has advanced its positions in several significant areas and investments have begun to bear fruit. I look forward to an autumn characterized by more activities which will strengthen the business and market position of the Group.”
Second quarter 2023
- Revenue amounted to SEK 60.4 (54.2) million.
- EBITDA amounted to SEK 6.5 (-1.4) million.
- Adjusted EBITDA (before items affecting comparability) was SEK 6.5 (-0.6) million.
- Operational EBIT [1] amounted to SEK 4.7 (-4.1) million.
- Net result after tax was SEK -26.6 (-30.8) million.
- Earnings per share after dilution amounted to SEK -0.28 (-0.34).
First six months 2023
- Revenue amounted to SEK 115.6 (108.9) million.
- EBITDA amounted to SEK 8.4 (1.0) million.
- Adjusted EBITDA (before items affecting comparability) was SEK 8.4 (1.9) million.
- Operational EBIT [1] amounted to SEK 4.8 (-2.4) million.
- Net result after tax was SEK -51.9 (-52.5) million.
- Earnings per share after dilution amounted to SEK -0.55 (-0.57).
Significant events during the quarter
- Fragbite Group engages a market maker ahead of the sale of $KOBAN tokens, which will be used as the premium currency for Panzerdogs, Cosmocadia and future web3 titles.
- Fragbite Group is taking over publishing of MMA Manager 2: Ultimate Fight.
- MAX Burgers, Expressen/Bonnier and SPACE renew their confidence as partners ahead of the Swedish CS:GO Cup this autumn.
- Subsidiary Fragbite AB launches Config, a gaming and esports agency.
- Fragbite AB’s gaming and esports agency Config is nominated for “Campaign of the Year” by StockholmMediaAward.
- Lucky Kat and Wagmi release the web3 game Cosmocadia on the Sui blockchain, and sell NFTs for SEK 2.3 million in conjunction with the launch.
- Playdigious releases the game Legend of Keepers for mobile platforms.
- Lucky Kat cancels the publishing contract for hypercasual game Magic Finger and signs a new agreement for the sale of that title as well as another title to a third party.
- Playdigious launches a new business for publishing independent games under the label Playdigious Originals, and presents the first game title for release on PC: Fretless – The Wrath of Riffson.
- Abrial Da Costa is appointed CEO of Playdigious and joins Fragbite Group’s management team. Playdigious’ former CEO and founder Xavier Liard and founder Romain Tisserand are staying in the Group, assuming new roles.
- The Board of Directors of Fragbite Group decides on changing the accounting policies to IFRS.
Significant events after the end of the period
- Playdigious signs an agreement to port and publish eight game titles to mobile platforms and increases the release rate.
- Anders Rössel is appointed as new CFO and Head of M&A and takes up his appointment in August 2023.
- In-house marketing of MMA Manager 2 has been initiated.
CEO’s comments
The second quarter of the year was another stable quarter, with net revenue of SEK 60.4 million, compared with SEK 54.2 million for the same period in the previous year. EBITDA amounted to SEK 6.5 (-1.4) million, partly due to the sale of two game titles in Lucky Kat’s hypercasual portfolio and positive currency effects. Operational EBIT increased to SEK 4.7 (-4.1) million. We are now entering the second half of the year, during which we will reap the benefits of the hard work that has been put in so far this year.
Playdigious scaling up significantly
During the second quarter, Playdigious launched a new publishing label, Playdigious Originals, thereby expanding the business to include publishing games for PC and console. The first game, Fretless – The Wrath of Riffson, is scheduled to be released during the first quarter 2024. Playdigious Originals gives us further opportunities to expand into a larger market and we are engaged in several ongoing dialogues regarding additional game titles under this new label.
The expansion of Playdigious’ capacity and the intensive negotiations during the period have yielded results and we were recently able to present Playdigious’ extended pipeline. Agreements regarding porting and publishing to mobile platforms have been signed for eight additional game titles that are scheduled for release between Q4 2023 and Q2 2025. This means that Playdigious is expected to significantly increase its game release rate in 2024 and beyond. Given their impressive historical performance, this feels like an investment with good potential and limited risk.
We have appointed Abrial Da Costa as the new CEO of Playdigious. Having worked more than 30 years in the industry, he is highly experienced and has a large network of contacts. He is therefore another key component of our continued investment in Playdigious. Abrial’s experience and reputation will strengthen both Playdigious and Fragbite Group, while co-founders Xavier Liard and Romain Tisserand will continue to contribute operationally and strategically to Fragbite Group’s future development.
More milestones in web3
In May, Lucky Kat passed a significant milestone when they carried out a successful soft-launch of web3 game Cosmocadia, which has been well received by players so far. Ahead of the launch on the new Sui blockchain, an NFT avatar sale was carried out, raising approximately SEK 2.3 million. Although the total sales were below the level we had hoped for, they were an important acknowledgement of the game’s quality, as Lucky Kat managed to create interest in both the game and the NFTs, despite the current market situation. Cosmocadia is now undergoing game testing in which NFT owners are given the opportunity to provide important feedback for further development of the game, which is planned for full release in 2024.
Our first web3 game, Panzerdogs, was migrated to Sui at the end of the quarter, as this new blockchain’s technical conditions offer significantly greater opportunities for us as game developers to improve both the gaming experience and the game’s economy. Our close cooperation with, and support from, Mysten Labs has continued, and this has also played a key part in both our web3 games now being on Sui. Panzerdogs has recently entered a highly important phase, which involves promoting the game to a wider audience in order to increase activity in the game, thereby laying the groundwork for the upcoming launch and sale of our $KOBAN token. $KOBAN is a so called portfolio token that will be used in all current and future web3 games that Fragbite Group develops. The goal is to launch $KOBAN, and in conjunction also carry out further token sales, during the third quarter, but with the proviso that we also need to follow the market and work closely with our advisors.
MMA Manager 2 marketed in-house
Funrock & Prey Studios has resumed responsibility for publishing MMA Manager 2, and with the help of Lucky Kat’s data-driven marketing team, in-house marketing of the game has now been initiated. To begin with, this is carried out in select markets and channels to optimise ROI. The game has been refined, which has resulted in improved game KPIs. Reduced fees for the Apple App Store and Google Playstore gaming platforms result in improved margins. This project demonstrates clearly how we utilise internal resources and how experience is shared between the subsidiaries.
Fragbite AB entering an intensive period
Subsidiary Fragbite AB can look forward to an intensive period, with the Swedish Cup as the major highlight. So far, 2023 has been characterised by several newly established client partnerships under the new Config brand.
Intensive autumn awaits
Here at Fragbite Group, we are very pleased that our hard work on preparations ahead of autumn seem to be paying off. We remain active and prepared to make acquisitions that add evident value to the Group. The organisation is well adapted to give future acquisitions a good start. We are facing an intensive autumn with a host of activities that will strengthen the Group’s business and market position. I am therefore confident that Fragbite Group has a bright future.
Marcus Teilman, President & CEO
The report is attached to this press release and available for download from the Fragbite Group website: www.fragbitegroup.com/financial-reports
