Financial · May 30, 2023

2022/23 Full-Year Results

Published by Nacon

Summary

NACON’s financial results for the 2022/23 fiscal year, ending March 31, 2023, reveal a period of strategic transition characterized by stable revenue and improved profitability despite a challenging macroeconomic environment. Total sales remained flat at €156.0 million, but the company achieved a significant 29.8% increase in operating income to €17.3 million. This growth in profitability was primarily driven by a shift in the product mix toward software; gaming sales surged by 66.3% to €90.5 million, while the accessories segment declined by 36.6% to €61.2 million due to global console shortages. The company’s gross margin improved substantially, rising from 49.9% to 59.1% of sales. This financial performance was supported by a growing back catalogue and the integration of new acquisitions, most notably Daedalic Entertainment. While operating expenses rose due to intensive development work and the full-year impact of recent acquisitions, EBITDA increased by 25.5% to €48.9 million. NACON maintained a solid balance sheet with €242.6 million in equity, though net debt rose to €67.3 million following €34.9 million in investment activities and the securing of new medium-term bank loans. Looking ahead to the 2023/24 period, the company anticipates strong growth driven by an aggressive release schedule of approximately 20 games, compared to 13 in the previous year. Key titles include The Lord of the Rings: Gollum and several major sports franchises. The accessories division is also expected to recover as console supply stabilizes and new products enter the market. Management remains committed to a growth-oriented strategy, electing to reinvest cash flow into development rather than issuing a dividend. The company currently manages 16 development studios and has 53 games in its production pipeline.

From the report

Press release Lesquin, 30 May 2023, 6pm 2022/23 FULL-YEAR RESULTS: • SALES: €156. 0 MILLION, STABLE COMPARED TO 2021/22 • OPERATING INCOME: €17.3 MILLION, UP 29. 8% STRONG, PROFITABLE GROWTH EXPECTED IN 2023/24 NACON (ISIN FR0013482791) today announces its consolidated results for the 2022/23 financial year (from 1 April 2022 to 31 March 2023) as approved by its Board of Directors on 30 May 2023. IFRS consolidated figures (€ million) 2022/23 2021/22 Change Sales 156.0 155. 9 +0.0% Gross margin 92.1 77.8 +18 .4 % % of sales 59.1% 49.9% Recurring operating income before IFRS 2 16.1 19.0 expense relating to the bonus share plan 10.3% 12.2% -15 .3 % % of sales Non-recurring items 1.2 (5.7) Operating income 17.3 13.3 +29 .8 % % of sales 11.1% 8.6% Net financial income/(expense) (2.3) 0.1 Pre-tax income 15.0 13.4 +12 .0 % % of sales 9.6% 8.6% Income tax (2.2) (3.4) Net income for the period 12.8 10.0 +28 .1 % % of sales 8.2 % 6.4%

+12 .0 % % of sales 9.6% 8.6% Income tax (2.2) (3.4) Net income for the period 12.8 10.0 +28 .1 % % of sales 8.2 % 6.4% 2022/23: pleasing performance in a complex operating environment Despite the release of several games being delayed, the Gaming business increased sales by 66. 3% to €90.5 million. The Accessories business saw sales fall 36.6% to €61.2 million, affected by the shortage of consoles that caused a sharp contraction in the global accessories market. Overall, NACON’s sales totalled €156.0 million, stable compared with the previous year. Gross margin rose sharply (+18.4 %) year-on-year. It amounted to €92.1 million, equal to 59.1% of sales (49.9% in the previous year). The improvement was due to the product mix, with Accessories making up a smaller proportion of sales (39% versus 62% in the previous year). Operating expenses rose because of the large amount of development work underway, but also due to the full-year effect of acquisitions made in 2021/22 and that of Daedalic Entertainment in April 2022.

cessories making up a smaller proportion of sales (39% versus 62% in the previous year). Operating expenses rose because of the large amount of development work underway, but also due to the full-year effect of acquisitions made in 2021/22 and that of Daedalic Entertainment in April 2022. Ebitda after IFRS 2 expense and non-recurring items was €48 .9 million, up 2 5.5% year-on-year (€39.0 million in 2021/22), and equalled 31.4% of sales (25.0% in 2021/22). Operating income rose by 29. 8% to €17.3 million, equal to 11.1% of sales. Net income was €12.8 million or 8.2 % of sales, as opposed to €10.0 million (6.4% of sales) in the previous year.

A financial position that reflects the Group’s growth strategy At 31 March 2023, NACON had equity of €242.6 million and €47.6 million of cash and cash equivalents. Investments related to acquisitions during the year, including that of Daedalic in April 2022, amounted to €34.9 million. By making these investments, NACON has strengthened its ability to develop high-quality games in- house. Currently, it has 53 games under development that are valued at €116.1 million on the balance sheet. Cash flow rose by 2.8% to €45 .5 million in 2022/23. To finance its strategy, NACON took out €46.5 million of new medium-term bank loans during the year, and its net debt amounted to €67.3 million at 31 March 2023. Dividend In accordance with its policy of reinvesting cash flow in developing the business, the Board of Directors decided at its meeting on 30 May 2023 not to propose a dividend in respect of the 2022/23 financial year at the next Annual General Meeting. 2023/24: major growth in business and earnings 2023/24 will feature a heavy release schedule, with around 20 games due to be released during the period as opposed to 13 in the previous year. The beginning of the financial year has already seen the release of The Lord of the Rings Gollum<sup>TM</sup> , TT Isle of Man: Ride on the Edge 3 and AFL23®, while Cricket24 and Rugby24, the official game of the Rugby World Cup, will come out in July and September respectively. The back catalogue will continue to grow with the addition of games released in 2022/23.

ide on the Edge 3 and AFL23®, while Cricket24 and Rugby24, the official game of the Rugby World Cup, will come out in July and September respectively. The back catalogue will continue to grow with the addition of games released in 2022/23. The Accessories business should benefit from several factors: - a more favourable base for comparison, - the end of pressures seen in 2022/23, with growth in the installed base of new consoles, - an offering that will grow in the next few months with the release of several high-potential products. Accordingly, NACON remains confident about its prospects of achieving strong growth in 2023/24. Next key events: Annual General Meeting: 21 July 2023 First-quarter 2023/24 sales announcement: 24 July 2023 after the market close ABOUT NACON 2023/23 FULL-YEAR SALES NACON is a company of the Bigben group. It was founded in 2019 to optimise its skills and take advantage €156.0million of major synergies in the video game market. With its 16 development studios, AA video game publishing and thedesign and distribution of premium gaming peripherals, NACON has 30 years of expertise in serving gamers.

e video game market. With its 16 development studios, AA video game publishing and thedesign and distribution of premium gaming peripherals, NACON has 30 years of expertise in serving gamers. The creation of this unified business unit has strengthened NACON’s position in the market and is WORKFORCE enabling it to innovate while creating new, unique competitive advantages. Over 1,000 employees Listed on Euronext Paris, compartment B–Index: CAC Mid&Small ISIN: FR0013482791; Reuters: NACON.PA; Bloomberg: NACON:FP INTERNATIONAL 23 subsidiaries and a distribution network CONTACT: across 100 countries Cap Value–Gilles [email protected]+33 (0)1 80 81 50 01 https://corporate.nacongaming.com/ GLOSSARY Back catalogue = Games released in previous financial years Gross margin: Sales - Purchases used. Ebitda: Operating income before depreciation, amortisation and impairment of property, plant and equipment and intangible assets

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