Stillfront Year-End Report 2018

Key insights

6 takeaways

01
Stillfront achieved a 44% year-over-year increase in adjusted EBIT for 2018, supported by a record 35% adjusted EBIT margin in the fourth quarter.See it on page 8
02
The company successfully integrated Playa Games and Imperia Online, contributing to a 29% year-over-year increase in proforma net revenue during Q4 2018.See it on page 4
03
As of year-end 2018, the group maintained a user base of 4.8 million monthly active users and 1.1 million daily active users across its strategy-focused portfolio.See it on page 6
04
With a net interest-bearing debt to adjusted EBITDA ratio of 0.91x, the company remains financially positioned to continue its strategy of combining organic growth with targeted M&A.See it on page 12
05
The group operates a decentralized model comprising eleven studios and approximately 500 employees, utilizing cash flow from established brands like Empire to fund emerging intellectual properties.See it on page 7
06
A primary operational focus throughout 2018 involved transitioning legacy game titles to HTML5 technology to ensure long-term cross-platform accessibility.See it on page 3

Summary

Stillfront Group’s 2018 year-end performance reflects a period of significant transformation and profitable expansion within the global free-to-play browser and mobile strategy game market. The company’s primary thesis centers on leveraging a diversified portfolio of long-lifecycle intellectual properties to generate high-margin, predictable growth. By integrating acquired studios and optimizing cross-platform game engines, the organization successfully scaled its operations while maintaining a focus on high-quality digital entertainment.

Financial results for the full year 2018 were characterized by strong growth, with adjusted EBIT increasing by 44% year-over-year. The fourth quarter proved particularly robust, yielding a 29% year-over-year increase in proforma net revenue and an all-time high adjusted EBIT margin of 35%. This profitability was supported by the successful acquisition and integration of Playa Games and Imperia Online, which bolstered the company’s core product segment. By the end of 2018, the group reported 4.8 million monthly active users and 1.1 million daily active users, demonstrating the resilience of its strategy-focused game portfolio.

The company operates a decentralized model with eleven studios across Europe, the Middle East, and North America, employing approximately 500 professionals. Its methodology relies on a balanced portfolio approach where cash-generative blockbuster titles, such as the Empire brand, fund organic growth and innovation in smaller, emerging IPs. The transition of legacy titles to HTML5 technology remained a key operational focus throughout the year, aimed at ensuring long-term cross-platform accessibility.

Looking toward 2019, the organization maintains a strategy of combining organic growth with targeted M&A activity to expand its footprint. With a net interest-bearing debt to adjusted EBITDA ratio of 0.91x, the company remains well-positioned to pursue further acquisitions. Strategic priorities include leveraging inter-studio synergies in marketing and technology, alongside a planned transition to the Nasdaq Stockholm main market to enhance corporate governance and scale.