Stillfront Group Q3 Report Presentation 2016

Key insights

6 takeaways

01
Stillfront Group achieved significant financial growth in 2016, reporting a 56% increase in net revenue over the previous 12 months and an 85% year-to-date growth rate compared to 2015.See it on page 15
02
The company maintained high operational efficiency with a 37% EBITDA margin in the third quarter of 2016.See it on page 11
03
Over 70% of the group's revenue is generated from self-published, owned brands, reducing reliance on third-party publishers.See it on page 2
04
The business model focuses on a diversified portfolio of long-lifecycle, free-to-play strategy games, including core titles such as Supremacy 1914 and ManagerZone.See it on page 6
05
The company is executing a systematic M&A strategy to consolidate the fragmented gaming market while maintaining operational agility across its five international studios.See it on page 5
06
Stillfront is preparing for a 2017 transition to the Nasdaq list, which includes adopting IFRS reporting standards to increase financial transparency.See it on page 13

Summary

Stillfront Group’s 2016 third-quarter report outlines a strategy focused on consolidating the fragmented gaming market by acquiring indie studios while maintaining their operational agility. The company’s primary thesis centers on balancing risk and reward through a diversified portfolio of long-lifecycle, free-to-play strategy games. By leveraging a mix of organic growth and strategic acquisitions, the group aims to achieve high profitability and lower volatility compared to industry peers.

Financial performance for the period was robust, characterized by a 56% increase in net revenue over the previous 12 months and an 85% growth rate year-to-date compared to 2015. The group maintained strong operational profitability, with EBITDA margins reaching 37% in the third quarter. This success is attributed to a high-margin revenue mix, where over 70% of income is derived from self-published, owned brands. Key assets include long-standing titles like Supremacy 1914 and ManagerZone, alongside newer successes such as Unravel, which contributed significant royalty payments during the quarter.

The group operates globally, with a consumer base spanning over 100 countries and a presence across five international studios. The business model relies on three strategic pillars: a portfolio of long-lifecycle games, a growth strategy driven by systematic mergers and acquisitions, and a market strategy focused on increasing the share of self-published titles. Looking forward, the company is prioritizing the development of its brand pipeline, including titles like Conflict of Nations and Siege: Titan Wars, while preparing to transition to IFRS reporting standards to improve transparency and facilitate a planned move to the Nasdaq list in 2017.