Starbreeze AB (publ) interim report January-March 2024

"PAYDAY™ 3 evolves with 'Operation Medic Bag'"

First quarter 2024

• Net sales amounted to SEK 56.6 million (26.7).
  • PAYDAY 2 accounted for SEK 10.9 million (26.4).
  • PAYDAY 3 accounted for SEK 23.3 million (0).
  • Third-party publishing accounted for SEK 17.4 million (0).
• EBITDA* amounted to SEK 48.5 million (4.1), including items affecting comparability of 19.9 million.
• Cash flow from operating activities amounted to SEK 78.4 million (20.7).
• Depreciation, amortization and impairment amounted to SEK 71.8 million (15.6).
• Profit/loss before taxes amounted to SEK -21.0 million (-24.7).
• Basic and diluted earnings per share amounted to
  SEK -0.01 (-0.03).
• Cash and cash equivalents amounted to SEK 387.2 million (78.0).

Significant events during and after the quarter

• January 9, Starbreeze announced changes in Group management.
• January 10, the Starbreeze Nomination Committee announced the proposal to appoint Jürgen Goeldner as the new Chairperson of the Board of Directors at the 2024 Annual General Meeting.
• February 15, “Operation Medic Bag” was launched – a focused project to meet the expectations of the player community and improve PAYDAY 3. The game has seen three major updates since February 15.
• February 22, The Tribe Must Survive was released in Early Access on Steam.
• March 12, Board member Jürgen Goeldner was appointed interim CEO of Starbreeze. A process to recruit a permanent CEO is ongoing.
• April 15, a content update was released for Roboquest with new content, new functionality, and improvements.

CEO’s message

PAYDAY™ 3 evolves with 'Operation Medic Bag'

Starbreeze has been a force in the global games industry for more than 25 years and will continue to be so by developing and publishing games globally and leverage the strength of both the organization and the IP portfolio.
During my months as interim CEO my focus has been on PAYDAY 3 as well as business development aspects, for example our presence at the Game Developers Conference (GDC) in March, where we among other things met industry peers and new potential partners. We also showed a playable tech demo of Project Baxter and received high interest.

RESULTS AND FINANCIAL POSITION

Our cash position at the end of the quarter was SEK 387m, with a balance sheet light on debt. The underlying result for the quarter, adjusted for items affecting comparability, was strong thanks to revenues from multiple titles as well as cost control measures. The revenue streams show that we are no longer a one product company. Together with our co-publisher we are running a concerted effort to improve on PAYDAY 3 by reprioritizing and focusing the development based on players’ feedback with only a minor impact on planned investments.

PAYDAY 3

PAYDAY 3’s ‘Operation Medic Bag’ is a comprehensive initiative that covers both smaller initiatives as well as improvements to the games’ progression system. On top also matchmaking and server infrastructure and a solo/offline mode. We are going to increase both the cadence and scope of the patches, with several larger milestone releases planned, the first of which will launch in June. The team is working from feedback from our players and community, identifying the changes that we believe are the most impactful ones from a player perspective. We can already see the sentiment shift confirming that we are on the right track. “Operation Medic Bag” has meant that we’ve pushed some content DLCs in favor of adding new features. So, our pipeline for the summer months is very strong. Consequently, we expect to see an impact on sales from the third quarter onwards. The PAYDAY IP is strong, and the potential for the IP remains high, evident not only from our conversations in the industry.

PROJECT BAXTER

As previously mentioned, Starbreeze’ presence at GDC was in large part to talk to future partners about Baxter. While we will be the publisher of the game, we will enter partnerships where it makes sense. This will be for marketing, distribution in both the digital and physical sense or other support that increases the quality and potential of the project while at the same time lowering the project risk.
 
THIRD PARTY PUBLISHING

Roboquest continues to perform strongly, and we continue to work with the developer to expand the game. Roboquest follows a Games as a Service-model with four targeted updates slated for 2024, the first of which was published here in April. The game continues to enjoy a very high rating from both players and media.
During the quarter, The Tribe Must Survive launched in Early Access on Steam. The purpose of Early Access is to foster a collaborative relationship with the player community, gathering valuable feedback on all aspects of the game. The 1.0 version of the full game will launch on May 23rd, 2024.

ORGANIZATION

During the quarter, the number of employees decreased slightly. We continue to hire specific competency for positions on Project Baxter while keeping the organization efficient for all our projects.

CLOSING WORDS

The search for a permanent CEO is coming to an end. For that position many candidates were identified, interviewed and assessed.
With a “vertical slice” of Project Baxter as the next step of the project, interested parties will be invited to submit their offers and we will select the best partner and deal for the product, the brand and ultimately for the company.

JÜRGEN GOELDNER, interim CEO

Webcast

Time: 10.00 CEST
Participation: To connect to the webcast– click here.

For more information, please contact:

Jürgen Goeldner, interim CEO
Mats Juhl, CFO
Tel: +46 0(8) - 209 229
Email: [email protected]

This information is information that Starbreeze AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, via the contact persons set out above, at 6:45 am CEST on May 14, 2024.

About Starbreeze
Starbreeze is an independent developer, publisher, and distributor of PC and consoles 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.

Read more at www.starbreeze.com and corporate.starbreeze.com.