Report

Q1 2020/21 Sales Results: 24.5% Sales Increase Despite a Strong Comparison Basis

Published by Nacon

Summary

Nacon reported a 24.5 % rise in first‑quarter sales for FY 2020/21, reaching €38.0 million against €30.5 million in the same period a year earlier, confirming its annual financial targets. The growth was driven primarily by accessories and digital game sales. Accessories surged 134.9 % to €22.5 million, propelled by the launch of the RIG premium headset line and a new U.S. subsidiary. Digital game sales, which accounted for 80.7 % of total game revenue, offset a decline in new releases; back‑catalogue sales jumped 340 % to €10.8 million, matching the entire previous year’s back‑catalogue volume. Game sales fell to €14.5 million from €20.0 million due to a strong comparison base of major titles released in the prior fiscal year, but the accelerated digital channel and successful releases such as *Hunting Simulator 2* and *Pro Cycling Manager/Tour de France 2020* mitigated the impact. Other revenue categories remained flat. Geographically, Nacon operates through 16 subsidiaries and a distribution network spanning 100 countries, with recent expansion into the United States. The company’s outlook for Q2 and the remainder of FY 2020/21 remains positive, citing upcoming releases (*WRC 9*, *Tennis World Tour 2*, *Monster Truck Championship*), continued digital momentum, and a new partnership with Microsoft for console‑compatible controllers. Nacon projects FY 2020/21 sales between €140–€150 million and a 18 % operating margin, while maintaining its 2023 plan targets of €180–€200 million sales and over 20 % margin for FY 2022/23.

From the report

Press release Lesquin, 27 July 2020 18:00 hrs 24.5% SALES INCREASE IN Q1 DESPITE A STRONG COMPARISON BASIS ROBUST GROWTH OF GAMING ACCESSORIES : +134.9% STRONGER DIGITAL SALES : 80.7% OF GAME SALES SURGE OF BACK CATALOGUE : +340% CONFIRMATION OF FINANCIAL TARGETS FOR FY 2020/21 IFRS – M€ Sales 2020/2021 2019/2020 Change 1st Quarter 38.0 30.5 + 24.5% Games 14.5 20.0 - 27.4% Accessories 22.5 9.6 + 134.9% Others(1) 0.9 0.9 + 1.1% Non audited data (1) Mobile and Audio sales. Success of the RIG premium headset range and solid performance of digital gaming sales In the first quarter of the 2020/21 fiscal year (April 1 to June 30, 2020), Nacon's sales were up by 24.5%, driven by the success of premium headsets which contributed to a sales upturn in Accessories and by the acceleration of digital sales of Games. GAMES Due to a strong comparison basis resulting from the release of several major titles at the beginning of the previous fiscal year, Games were down at 14.5 M€ (compared to 20.0 M€ for Q1 2019/20). Thanks to the acceleration of digital sales during the lockdown period, Nacon was able to offset the reduction in the number of new game releases with a 340% surge in back catalogue sales to 10.8 M€, an amount already equivalent to back catalogue sales for the entire 2019/20 fiscal year. Digital sales accounted for 80.7% of Games turnover. The releases of Hunting Simulator® 2 and Pro Cycling Manager/Tour de France® 2020 over the period under review fulfilled expectations. ACCESSORIES

10.8 M€, an amount already equivalent to back catalogue sales for the entire 2019/20 fiscal year. Digital sales accounted for 80.7% of Games turnover. The releases of Hunting Simulator® 2 and Pro Cycling Manager/Tour de France® 2020 over the period under review fulfilled expectations. ACCESSORIES Accessory sales were supported by a thriving market. With a reinforced range of accessories (Controllers, Headsets, etc.) Nacon was fully capable of meeting consumer expectations. In particular, the headset segment grew strongly thanks to the success of the RIG premium brand acquired in March 2020 and the opening of a subsidiary in the United States.

Outlook The 2nd quarter of FY 2020/21 should confirm the upward trend in Nacon's activity. - the expected releases of 2 new games (WRC®9 and Tennis World Tour®2) will contribute to the growth of Games sales and digital sales should maintain their momentum; - gaming accessories should confirm their growth potential thanks to restocking from customers (RIGs and controllers) generating a large order backlog. Prospects for the second half are equally promising: - the momentum of digital sales and the releases of new games (Monster Truck Championship™, Warhammer Chaosbane® on PS5TM , Handball 21TM,Werewolf: the Apocalypse® - EarthbloodTM , Rogue LordsTM and Vampire: The MasqueradeTM - Swansong) are expected to make a positive contribution to the Group's sales growth; - the new partnership with Microsoft will also enable Nacon to launch a range of controllers compatible with their new console over this period. For the full 2020/21 fiscal year, the Group is confident in its ability to meet its annual financial targets. Therefore Nacon confirms that it will achieve sales of between €140 and €150 million and a 18% Current Operating Income(2) rate. The Group also reiterates the financial targets of its Nacon 2023 plan, with sales for the 2022/23 fiscal year ranging between 180 M€ and 200 M€ and a Current Operating Income(2) rate in excess of 20%. (2) Current Operating Margin = Current Operating Income rate = Current Operating Income as a percentage of sales. Next publication: Sales for 2nd quarter of FY 2020/2021 : 26 October 2020 Press release after close of the Paris stock exchange ABOUT NACON

come(2) rate in excess of 20%. (2) Current Operating Margin = Current Operating Income rate = Current Operating Income as a percentage of sales. Next publication: Sales for 2nd quarter of FY 2020/2021 : 26 October 2020 Press release after close of the Paris stock exchange ABOUT NACON 2019-20 ANNUAL SALES NACON is a company of the BIGBEN Group founded in 2019 to optimize its know-how through strong 129.4M€ synergies in the video game market. By bringing together its 8 development studios, the publishing of AA video games, the design and distribution of premium gaming devices, NACON focuses 20 years of expertise at the service of players. This new unified business unit strengthens NACON's position in the market, HEADCOUNT enables it to innovate by creating new unique competitive advantages. Close to510 employees Company listed on Euronext Paris, compartment B INTERNATIONAL ISIN: FR0013482791; Reuters: NACON.PA; Bloomberg: NACON:FP 16 subsidiaries and a distribution network across 100 countries PRESS CONTACT https://corporate.nacongaming.com/ Cap Value–Gilles [email protected]+33 1 80 81 50 01

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Type: Report

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