RightBridge Ventures Group AB interim Q1 2023 report
SOLID REVENUE GROWTH and IMPROVED EBITDA ON TWELVE ROLLING MONTHS BASIS DESPITE ADVERSE MACROECONOMIC CLIMATE.
|
Profit and loss, in summary, group |
Q1 | Full Year | |
|
SEK THOUSANDS |
2023 | 2022 | 2022 |
|
Revenue |
2.530 | 648 | 8.445 |
|
EBITDA |
(5.467) | (1.182) | (23.598) |
|
Adjusted EBITDA |
(2.521) | (1.182) | (12.219) |
|
Depreciation, amortisation and impairment |
(1.041) | (66) | (54.208) |
|
EBIT |
(6.510) | (1.253) | (77.828) |
|
Profit/loss for the year |
(6.993) |
(1.646) | (67.680) |
|
EPS |
-0,04 | -0,02 | -1,58 |
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GROUP CONSOLIDATED RESULTS
FIRST QUARTER 2023
REVENUES. The Group’s net sales have amounted to 2 530 KSEK (648 KSEK), an increase of 290% over the equivalent quarter of last year.
EBITDA. The Group’s EBITDA for the quarter amounted to – 5 467 KSEK (- 1 182 KSEK). Adjusted EBITDA amounted to – 2 521 KSEK(-1 182KSEK) excluding the EBITDA losses of Tricked and one-off items.
EARNINGS. The Group’s net results for the first quarter 2023 have been -6 993 KSEK (- 1 646 KSEK). Earnings per share* amounted to SEK -0.04 (-0.02).
The equity/assets ratio** as of 31 March 2023 was 79% (93.3% )
*Earnings per share: earnings are divided by the average number of shares for the period. The total number of shares in the company as of 31 March 2023 amounts to 161 363 454. The average number of shares for the first quarter 2023 was 157 448 971. The average number of shares for 2022 was 42 936 539.
**Equity ratio: adjusted equity (equity and untaxed reserves less deferred tax) as a percentage of the balance sheet total.
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Significant events during the period
- ESPL listed $ARENA token in the Korean regulated exchange ProBit Global Exchange as result of the high demand of the token in the tournaments launched on ESPL Arena.
- Team Singularity’s APEX Legend squad placed 11th in the world in the Apex Legends Global Series Playoffs in Copperbox Arena in London.
- Knacks scouts a new CS:GO roaster for Team Singularity.
- 1337 esport signs a sales and advisory services agreement with sports and augmented reality technology provider YBVR
- D11 Gaming Hub and RightBridge Venture Group signs contract to deliver Bahrain’s first esports and gaming creative hub.
- RightBridge Ventures Group AB and Dadabai Holding WLL Collaborate to develop Esports and Gaming in the Middle East and North African Region.
- RightBridge Ventures Group decides to carry a directed unit to raise credit facility and to issue warrants free of charge to their shareholders.
- RightBridge Ventures seeks fine payment due to breached lock-up agreement
Significant events after the period
- RightBridge Ventures Group decides to halt further investments in Tricked esports ApS resulting in foreclosure decision.
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ABOUT RIGHTBRIDGE VENTURES GROUP AB
RightBridge Ventures Group AB (“RightBridge Ventures Group” or the “Company”) is a Sweden based listed corporation with a portfolio of esports and gaming companies that entertain, distribute digital media, gaming and esports content and enable brands and corporations to access the esports and gaming consumer community.
The industry has ratified the Company’s initial investment thesis “esport and gaming is not just playing games”. Organisations that manage esports teams are increasingly developing media and entertainment companies or agencies. While ‘original’ business areas remain in the foreground of the activities, the revenue contribution of such areas is declining compared to ‘expanding’ business areas. In particular, content creation and influencer marketing play an important role. They enable esports teams to bridge the gap between video gaming, esports and streaming and authentically activate their players – and thus their most important assets – independent from the competitions, providing the opportunity to deepen the connection to their fan bases, in line with RightBridge developed synergies among the Company's portfolio firms.
Knacks Sp. Z.o.o. Is a marketing and talent agency is a full-service esports agency based in Poland. It offers marketing and talent management services to players, teams, and brands in the esports industry. The agency's services include influencer marketing, social media management, content creation, and event management. Knacks Esports Marketing and Talent Agency also provides consulting services to companies looking to enter the esports industry. RightBridge Ventures Group ownership: 59.18%
1337 eSports AB is an esport and gaming specialised corporate advisory firm founded by Rightbridge Ventures. The company provides solid business solutions and expertise for esports and gaming companies seeking to improve their existing operations, or/and seeking to monetise the social digital environment of esports, gaming and the Metaverse. RightBridge Ventures Group ownership: 100%
Esports Pte Ltd. (“ESPL” - Esports Players League) is an operator of a global esports and media network. The company's network specialises in creating a platform for gamers, game developers, game and other digital media and content publishers to compete in online and on-ground tournaments, as well as market and distribute their content. ESPL is the pioneer in User Generated Tournament - ESPL Arena. RightBridge Ventures Group ownership: 21.77%1
1 Direct ownership: 4,73%; Through 100% owned holding company iCandy Digital Pte. Ltd. 17.04%
KnotOK AB is the first corporate digital responsibility initiative that provides support to corporations and consumers to handle toxicity in the digital realm of the Metaverse. RightBridge Ventures Group ownership: 70%
Lilmix Esports AB is Lilmix is a professional esports organisation based in Sweden. It was founded in 2019 and currently fields teams in Counter-Strike: Global Offensive (“CS:GO”). Lilmix's CS:GO team has been particularly successful, with multiple top-three finishes in regional tournaments and online leagues. In addition to its competitive teams, Lilmix also has a content creation team that produces videos and streams on platforms like Twitch and YouTube. RightBridge Ventures Group ownership: 22%
Team Singularity is an international esport organisation that fields teams of RocketLeague CS:GO and Apex Legends. The organisation has achieved notable success in the esports industry, particularly in Apex Legends. Team Singularity also has a content creation team and is involved in esports talent development. RightBridge Ventures Group ownership: 89.99%
eSports Pulze AB (“ePulze”) is a top online platform for casual and professional esports players alike. This Swedish- based platform offers daily tournaments, leagues, and ladders in popular esports titles such as Dota 2, League of Legends, and CS:GO. With its user-friendly interface, players can easily find and join competitions at all skill levels, track their progress, and connect with other players and teams. Epulze Esports also hosts live events and tournaments worldwide, making it a must-visit platform for esports enthusiasts who are looking for an exciting and competitive gaming experience. RightBridge Ventures Group ownership: 7.25%
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CEO Letter
Dear shareholders,
The esports and gaming industry is shifting. We witness profound changes in the industry that reinforce our initial investment thesis: "esport and gaming is not just playing games." We have witnessed exciting progress that validates this thesis, as organizations managing esports teams are expanding their scope to become media and entertainment companies or agencies. While their original business areas continue to be crucial, the revenue contribution from these areas is gradually declining in comparison to the expanding business areas. Those esports organisations that are not embracing this new reality are perishing.
The RightBridge Venture Group is well prepared for this shift. We have methodically worked with our synergy puzzle to find costs optimization possibilities that have led to an EBITDA improvement of 7.5%, and of 17% on EBITDA adjusted basis on a 12 months rolling period
At RightBridge Ventures Group, our commitment to embracing esports and gaming-led social, economic, and technological changes has positioned us well in an industry that is reshaping itself and how people across the world connect, entertain, and interact. Thus, despite industry headwinds, adverse macroeconomic conditions and the ongoing portfolio transformation RightBridge Ventures Group is delivering a solid sales growth year-on-year of 290% and on a 12 months rolling basis close to 20% revenue growth.
Those results do not include the recently announced service contract in Bahrain.
Esports and gaming have emerged as powerful forces for social change, bringing people together from all over the world. Platforms like Discord and Twitch have created vibrant communities that transcend geographical boundaries. These communities unite individuals from diverse backgrounds who share a passion for gaming. Recognizing the significance of these communities, we are dedicated to fostering inclusivity and a sense of belonging within them.
Moreover, we understand that the industry is witness to significant shifts, with esports and gaming organizations capitalizing on user-generated games, in-game assets, micro-transactions, and the tokenization of digital assets. Gamers are no longer passive consumers; they have become creators, generating content, data, and user-generated content (UGC) that fuel a thriving gaming economy. Our strategic focus on monetizing the attention and data of esports and gaming consumers positions us at the forefront of this socio-economic transformation.
In tandem with these social and economic transformations, our portfolio companies and their partners are contributing to the technological advancements that underpin the esports and gaming industry. Technologies such as AI, blockchain, machine learning, virtual reality (VR), augmented reality (AR), big data analytics, cloud computing, virtualization, or 5G have unlocked a world of possibilities to enhance the gaming experience for gamers and esport content consumers and brands, creating immersive environments and personalized experiences.
Our portfolio companies and their partners, such as YBVR (www.ybvr.com), utilization of blockchain or AR technologies ensures e.g. enhanced security, transparency, and ownership of digital assets.
However, I must address a recent setback. We made the decision to invest in Tricked, a company that we believed would significantly contribute to our synergy strategy plan. Regrettably, the economic situation negatively affected Tricked transformation plan. Inflation, currency exchange and interest rates rapidly led to lower sales, increased costs and lower margins. Under those circumstances, and the lack of general adherence to execute on a crisis-oriented transformation plan, drove the RightBridge decision to halt investing in Tricked.
Continuing to support a venture that deviates from the transformation plan would not align with our commitment to creating value for our shareholders. Hence, as a responsible company, we made the difficult decision to halt any further investments in Tricked. As a result, Tricked filed for bankruptcy in mid-April, as several other Scandinavian esports organizations have done during the last few weeks.
While the situation with Tricked is disappointing, it does not diminish the incredible opportunities that exist in the esports and gaming industry. We remain steadfast in our dedication to driving social, economic, and technological transformations. We will learn from this experience and ensure that our future investments and partnerships align with our vision, strategy, and transformation plan. Our commitment to transparency, accountability, and delivering long-term value to our shareholders remains unwavering.
Our entire global team is motivated and dedicated to delivering the best experiences for gamers, brands and customers aligning with our growth factors:
- RBV is a dedicated and diversified roll-up investment company within gaming and espor
- RBV invests and acts as transformation catalyst in the development of an ecosystem of companies that develop esports and gaming to be more than “just playing games”
- RBV aims to achieve organic growth as well as growth through acquisitions, exponentially increasing revenues along with consumer reach.
I want to express my sincere gratitude to each and every one of you for your unwavering support during these challenging times. Your trust and confidence in our ability to navigate the ever- evolving landscape of esports and gaming are deeply appreciated.
Thank you for your continued trust and partnership.
Sincerely,
Carlos Barrios
CEO, RightBridge Venture Group AB
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CONSOLIDATED RESULTS
The group’s revenue for the first quarter amounted to 2 530 KSEK (648 KSEK). Tricked has contributed with 840 KSEK for the first two months of the year. Excluding Tricked, the revenues would have amounted to 1 689 KSEK (648 KSEK) which is a growth of 161%.
External expenses and staff costs amounted to 6 432 KSEK (1 774 KSEK), the increase is mostly due to costs in Tricked.
EBITDA for the period amounted to -5 467 KSEK (-1 182 KSEK) and adjusted EBITDA excluding Tricked amounted to
-2 521 KSEK (-1 182 KSEK). Tricked accounted for -2 633 in EBITDA losses for the first two months of the period.
Net result for the period amounted to -6 993 KSEK (-1 646 KSEK) and is related to losses in associated companies as well as goodwill amortization and depreciation.
LIQUIDITY AND CASH FLOW
First quarter 2023 (01/01/2023 - 31/03/2023)
Cash Flow from operating activities amounted to -4 537 KSEK(-722KSEK). Cash Flow from investing activities amounted to 0 (-850KSEK). Cash Flow from financing activities amounted to 6 703KSEK(1 000KSEK). The company raised in the period, 2 000 KSEK in equity and 4 703 KSEK in loans.
Net cash flow for the period amounted to 2 165 KSEK (-573 KSEK). Cash and cash equivalents at the end of the period amounted to 5 240 KSEK (1 071 KSEK).
The Company plans to continue enhancing its liquidity position for existing operations and additional acquisitions through a combination of subsequent rights issues, operational changes to improve the profitability of its subsidiaries and the use of additional efficient credit facilities where possible.
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PARENT COMPANY RESULTS
The Parent Company’s revenue for the first quarter amounted to 0 KSEK (0 KSEK). EBITDA for the quarter amounted to -540 KSEK (-1 686 KSEK) Net result for the period amounted to -2 875 KSEK (- 1 686 KSEK) which is related to impairment of shareholder loans towards Tricked.
LIQUIDITY AND CASH FLOW
First quarter 2023 (01/01/2023 - 31/03/2023) Cash Flow from operating activities amounted to 142 KSEK(-1 475 KSEK). Cash flow from investing activities amounted to -3 800 KSEK (-300 KSEK) which is related to shareholder loans to subsidiaries. Cash Flow from financing activities amounted to 5 932 KSEK (5 696 KSEK). The parent company raised in the period 2 000 KSEK in equity and 3 932 KSEK in loans.
Net cash flow for the period amounted to 2 274 KSEK (3 921 KSEK). Cash and cash equivalents at the end of the period amounted to 4 274 KSEK.
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CONSOLIDATION
In accordance with 7 kap §23 ÅRL the acquiring company of RightBridge Ventures Group AB is RightBridge Ventures AB because the owners of RightBridge Ventures AB gained control over RightBridge Ventures Group AB. This means that the controlling parent company is RightBridge Ventures AB even though the legal parent company is Rightbridge Ventures Group AB.
In the financial statements of RightBridge Ventures Group AB, the parent company will therefore be RightBridge Ventures AB and RightBridge Ventures Group AB will be seen as a subsidiary and included in the financial statements as per the date of the transaction.
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THE SHARE
RightBridge Ventures Group AB (Publ) has been listed since 28th February 2022 on Nasdaq Stockholm First North Growth.
The number of shares in Rightbridge Ventures Group AB as of 31st of March was 161 363 454.
Ticker First North – RIGHTB
ISIN code SE0019070749
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ACCOUNTING PRINCIPLES
This report is prepared in accordance with the Annual Accounts Act and BFNAR 2012:1(K3). The company is applying the same accounting principles and calculation methods which were applied to the 2022 Annual Report.
Auditors
Grant Thornton
Certified Adviser
Amudova AB
Postadress: c/o Nybrogatan Business Center
Box 5855, 102 40 Stockholm
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DECLARATION BY THE BOARD OF DIRECTORS
The Board of Directors and the CEO of Rightbridge Ventures Group AB (publ) hereby certify that this interim report provides a true and fair overview of the operations, financial position and performance of the Group and Parent company.
Stockholm, 31 May 2023
This interim report has not been reviewed by the Company’s auditor.
Magnus Leppäniemi Stefan Lindeberg Kenneth Arnström
Johan Rooth Carlos Barrios
Chairman of the board CEO
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FINANCIAL CALENDAR
16.06.2023 Annual General Meeting
31.8.2023 Q2 April - June 2023
30.11.2023 Q3 July - September 2023
28.02.2024 Q4 October – December 2023
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DISCLOSURE
This information is information that RightBridge Ventures Group AB (publ) is obliged to make public according to the EU's market abuse regulation (MAR). The information was provided, through the above contact person, for publication on 31.05.2023.
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For more information, please contact
Carlos Barrios, VD
Telephone: +46 70 511 25 79
E-post: c[email protected]
Johan Rooth, styrelseordförande
Telephone: +46 70 536 77 33
E-post: [email protected]
Address:
Rightbridge Ventures Group AB (publ)
Norrlandsgatan 24
111 43
Stockholm
