Financial · June 3, 2024

Strong Earnings Growth in 2023/24

Published by Nacon

Summary

Nacon’s consolidated financial results for the 2023/24 fiscal year, ending March 31, 2024, demonstrate significant growth in profitability and operational efficiency. The company achieved a 45% increase in EBITDA to €70.9 million and a 37.3% rise in net income to €17.5 million. Total sales grew by 9.4% to €170.7 million on a non-IFRS basis, driven by a robust release schedule of 19 titles and a strong performance from the back catalogue. The accessories segment also returned to growth in the second half of the year, supported by new product launches and an expanding console install base. The financial position remains stable, characterized by a 54.4% increase in cash flow from operating activities, totaling €73.1 million. While net debt decreased slightly to €85.2 million, the company opted not to issue a dividend, prioritizing the reinvestment of cash flow into its development pipeline. Currently, Nacon has 45 games in development, representing a carrying value of €129.5 million. Operational margins improved across the board, with gross margin reaching 62.1% and operating income rising 20.5% to €20.9 million. Looking toward the 2024/25 fiscal year, the company anticipates continued growth in sales and operating income. The strategy focuses on "business convergence," specifically within the racing market through the creation of a dedicated racing department and the "Revosim by Nacon" brand. This initiative aims to integrate game publishing with premium peripherals like steering wheels and headsets. With approximately 15 games scheduled for release, including major titles like Test Drive Unlimited: Solar Crown and Greedfall II, the company expects to leverage its unified business model to strengthen its competitive position in the global gaming market.

From the report

Press release Lesquin, 3 June 2024, 6pm CET STRONG EARNINGS GROWTH IN 2023/24 • EBITDA: €70.9 MILLION, UP 45% • OPERATING INCOME: €20.9 MILLION, UP 20.5% • NET INCOME: €17.5 MILLION, UP 37.3% 2024/25: CONTINUING GROWTH IN BUSINESS LEVELS AND OPERATING INCOME NACON (ISIN FR0013482791) is today announcing consolidated results for its 2023/24 financial year (from 1 April 2023 to 31 March 2024) as finalised by the Board of Directors in its meeting of 3 June 2024. Consolidated IFRS figures (€ million) 2023/24 2022/23 Change Sales (non-IFRS) 170.7 156.0 +9.4% Adjustment for the partial disposal of Gollum (3.0) IFRS sales 167.7 156.0 +7.5% Gross profit 104.2 92.1 +13.1% % of sales 62.1% 59.1% Ebitda 70.9 48.9 +45.0% % of sales 42.3% 31.4% Operating income 20.9 17.3 +20.5% % of sales 12.5% 11.1%

70.9 48.9 +45.0% % of sales 42.3% 31.4% Operating income 20.9 17.3 +20.5% % of sales 12.5% 11.1% Net financial expense (4.8) (2.3) Pre-tax income 16.1 15.0 +7.0% % of sales 9.6% 9.6% Income tax 1.5 (2.2) Net income for the period 17.5 12.8 +37.3% % of sales 10.5% 8.2% Strong earnings growth in 2023/24 During the year, Catalogue sales (new games) were boosted by a heavy release schedule consisting of 19 games, including the highly successful Robocop: Rogue CityTM . Catalogue sales amounted to € 59.3 million (non-IFRS), up 21.2% relative to 2022/23. The Back Catalogue (games released in previous years) performed very well, with sales rising 7.4% to €44.7 million. The Accessories business generated sales of €62.7 million and returned to growth in the second half of the year, driven by an increase in the installed base of new consoles and new product releases (the RIG 600 PRO headset and the REVOLUTION 5 PRO controller).

h sales rising 7.4% to €44.7 million. The Accessories business generated sales of €62.7 million and returned to growth in the second half of the year, driven by an increase in the installed base of new consoles and new product releases (the RIG 600 PRO headset and the REVOLUTION 5 PRO controller). Gross margin was 62.1%, an increase of 3 points year-on-year. Ebitda rose by 45% to €70.9 million, giving Ebitda margin of 42.3% as opposed to 31.4% in the previous year. Operating income rose 20.5% to €20.9 million, equal to 12.5% of sales. The increase in net financial expense was due to higher interest rates. Exchange differences remained stable (foreign exchange loss of €0.8 million, as in the previous year).

Firm financial position at a time of major development At 31 March 2024, NACON had equity of €263.6 million as opposed to €242.6 million at 31 March 2023. It also had €26.2 million of cash and cash equivalents versus €47.6 million at 31 March 2023. Net debt amounted to €85.2 million as opposed to €88.6 million at 30 September 2023. The total amount of NACON’s new borrowings during the year was much lower than the amount of borrowings it repaid. Inventory management efforts and stocking operations reduced inventories by €8.2 million year-on-year to €27.1 million. With funds from operations rising by 27.3% to €58.0 million during the year and a €17.9 million decrease in the WCR, cash flow from operating activities totalled €73.1 million as opposed to €47.4 million in 2022/23, an increase of 54.4%. Currently, 45 games are under development, and the related assets have a carrying amount of €129.5 million. Dividend: in accordance with its policy of using cash flow to fund business development, the Board of Directors decided in its 3 June 2024 meeting not to propose a dividend with respect to the 2023/24 financial year in its upcoming Shareholders’ General Meeting. 2024/25: business convergence and continuing growth in sales and operating income

g cash flow to fund business development, the Board of Directors decided in its 3 June 2024 meeting not to propose a dividend with respect to the 2023/24 financial year in its upcoming Shareholders’ General Meeting. 2024/25: business convergence and continuing growth in sales and operating income The release schedule will be busy in 2024/25, with around 15 games due to be released during the year including Test Drive Unlimited: Solar CrownTM , scheduled for 12 September 2024, Tour de France 2024, Tiebreak, Ravenswatch (of which almost 500,000 copies have already been sold via early access on PC), Rugby24 and Endurance, along with Greedfall II: The Dying World and Terminator: SurvivorsTM , which will be released via early access. The Back Catalogue will automatically benefit from the large number of games released in 2023/24, including Robocop: Rogue CityTM , which should lead to significant growth.

, which will be released via early access. The Back Catalogue will automatically benefit from the large number of games released in 2023/24, including Robocop: Rogue CityTM , which should lead to significant growth. In Accessories, NACON will continue to reap the rewards of successful product launches in 2023, including the RIG 600 PRO headset and the REVOLUTION 5 PRO controller. The main development in 2024/25 will be the Group’s initiative to bring together its games and accessories activities in the Racing market, along with its new ambitions in this area: - Creation of the dedicated NACON Racing department and the ”Revosim by Nacon” brand, building on 10 years of expertise in this market; - Launches of new premium products (Revosim steering wheel, RIG 900 headset etc.); - New licences currently being negotiated. This will make NACON the only company in the world to offer a comprehensive range of games and accessories for motor racing fans. In 2024/25, because of the expected momentum in its two business areas, NACON is confident that it will continue to generate growth, accompanied by a further increase in operating income.

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