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Starbreeze Interim / Quarterly Report 2021
3204_ir_2021-08-18_76fb26d0-e117-4fb3-8cff-dbdad89ef32c.pdf
Interim / Quarterly Report
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2021
Second quarter 2021
- Net sales amounted to SEK 32.0 million (31.3). PAYDAY accounted for SEK 31.5 million (28.1).
- EBITDA* amounted to SEK -51.8 million (15.5).
- EBITDA**, adjusted for one-off effects related to PAYDAY Crime War license agreement, EBITDA amounted to SEK 16.8 million (15.5).
- Amortization, depreciation and impairments amounted to SEK 15.5 million (10.6).
- Profit before tax was SEK -80.0 million (-8.6).
- Basic and diluted earnings per share were SEK -0.11 (-0.02).
- The second chapter of PAYDAY 2: City of Gold was successfully launched during the quarter.
First half 2021
- Net sales amounted to SEK 59.9 million (53.3). PAYDAY accounted for SEK 58.4 million (49.7).
- EBITDA* amounted to SEK -29.3 million (32.3).
- EBITDA**, adjusted for one-off effects related to PAYDAY Crime War license agreement, EBITDA amounted to SEK 39.4 million (32.3).
- Amortization, depreciation and impairments amounted to SEK 30.0 million (20.9).
- Profit before tax was SEK -84.3 million (-105.9).
- Basic and diluted earnings per share were SEK -0.11 (-0.31).
- Cash and cash equivalents amounted to SEK 113.6 million (90.9).
| KEY FIGURES | 2021 | 2020 | 2021 | 2020 | 2020 |
|---|---|---|---|---|---|
| SEKk | Q2 | Q2 | JAN-JUN | JAN-JUN | JAN - DEC |
| Net sales | 32,010 | 31,281 | 59,933 | 53,318 | 118,006 |
| EBITDA* | -51,849 | 15,507 | -29,255 | 32,337 | 49,317 |
| EBITDA adjusted ** | 16,823 | 15,507 | 39,417 | 32,337 | 49,317 |
| Profit (-loss) before tax | -80,032 | -8,586 | -84,280 | -105,923 | -130,473 |
| Earnings per share, SEK | -0.11 | -0.02 | -0.11 | -0.31 | -0.28 |
| Cash flow from operations | 9,328 | 10,507 | 37,852 | 14,325 | -24,640 |
| Net sales per employee | 241 | 242 | 454 | 423 | 959 |
- See page 19 for definitions of key ratios.
** Adjusted for one-off effects related to PAYDAY Crime War license agreement.
Starbreeze in brief
Starbreeze is an independent developer, creator and distributor of games for PC and console with a global market focus and studios in Stockholm, Barcelona and Paris. Focusing on the successful PAYDAY brand, Starbreeze develops games based on proprietary and third-party rights, both in-house and in partnership with external game developers.
Starbreeze shares are listed on Nasdaq Stockholm under the tickers STAR A and STAR B with the ISIN codes SE0007158928 (Class A) and SE0005992831 (Class B).
More information: starbreeze.com
Starbreeze
Interim Report Q2 2021
CEO's comments
WE ARE CONTINUING TO GROW WITH PAYDAY
Interest in PAYDAY 2 is growing and we are gaining many new players every month, while development work on PAYDAY 3 is going according to plan.
During the quarter, we signed a license agreement with the Canadian mobile game publisher PopReach for the mobile game PAYDAY Crime War. PopReach has taken over all the remaining development of the game before the launch. The agreement reduces our development expenses, while we continue to see good opportunities for future licensing revenue. The team at PopReach has an impressive track record in the mobile games market, and we are excited about partnership with them in order to make Crime War a successful mobile version of PAYDAY 2.
Our sales on Steam continued to rise in the second quarter, and we saw a growth of 22% compared to the same period of the preceding year. Our growth was 38% adjusted for the negative impact of currency movements.
The profit for the quarter is partly affected by one-off effects related to the agreement regarding PAYDAY Crime War. Adjusted for these, we see an adjusted EBITDA of SEK 16.8 million, an increase of SEK 1.3 million during the quarter compared to same quarter previous year.
The number of monthly active users (MAU) peaked at 804,029 during the quarter, an increase of 35% on the second quarter of 2020. The number of daily active users (DAU) also increased, by 16%. This points to a growing commitment in our community and the creative work by our development organization in their efforts to continuously delivering high-quality experiences.
During the quarter, we successfully released the second add-on pack, Ukrainian Prisoner Heist, out of a total of four from the new City of Gold season. The strength of the PAYDAY IP in continuing to attract many new players while we are seeing increased sales of DLC (downloadable content) shows that we are developing the game in the right direction, which gives us great confidence for the future launch of PAYDAY 3.
Development of PAYDAY 3 is progressing, and we have reached the production phase, which means that the team is focused on creating the content that will be included in the game at launch. The Unreal engine provides us with a strong foundation thanks to our own and our co-publisher Koch Media's favourable experience of working on multiple hardware platforms simultaneously. We have continued to strengthen our development organization both in Paris and in Stockholm and so far, we have welcomed 37 new employees from 8 different countries in 2021.
Building brands that appeal to a broad and global market requires a team that, in addition to skill and experience, have relevant knowledge
PAYDAY 2
Source: Payday 2 game data through Starbreeze telemetry
Peak number of monthly active users (MAU)
804,029
for PAYDAY 2 during Q2
from different parts of the world and instinctively understands differences in cultures and expectations. We believe that to be part of the process of producing entertainment products for millions of different players, we need to be able to collaborate effectively and in the best possible way with all our colleagues. Only then can we create the very best gaming experiences. For Starbreeze, it's a matter of continuing to develop our inclusive and results-oriented culture and never resting on our laurels, but constantly striving to improve. The goal is for Starbreeze culture to be clear and attract new employees as well as new players.
To sum up, we are continuing to grow with PAYDAY and we are building a solid foundation for the launch of PAYDAY 3. The development of PAYDAY 3 along with our partner is going according to plan, and we look forward to all the exciting content we will be launching for PAYDAY 2 and the work on continuing to develop PAYDAY 3.
Tobias Sjögren
CEO Starbreeze
Starbreeze
Interim Report Q2 2021
SIGNIFICANT EVENTS DURING THE QUARTER
A summary of significant events during the quarter follows below. Please visit Starbreeze.com for detailed information about events during the quarter.
On April 14, Starbreeze signed a license agreement with PopReach Corporation for PAYDAY Crime War, the mobile game version of PAYDAY 2. Starbreeze receives a license fee based on future sales and an initial onetime payment in connection with the transfer of the source code.
Impact of COVID-19
Starbreeze is continuously monitoring the impact of the ongoing COVID-19 pandemic on the business. Ongoing revenue-generating operations have shown any disruptions because the majority of revenues are generated by a digital distribution model in which product availability and interaction among players is uninterrupted regardless of general public social distancing measures. All the employees are continuing to work from home. The company's assessment that the short-term impact on ongoing projects will be minor still stands, but the long-term effects on future business and the impact on the efficiency of the project organizations may result in delayed deliveries. The impact on the company's revenues has so far been positive.
Starbreeze
Interim Report Q2 2021
SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD
No significant events occurred after the end of the period.
Starbreeze
Interim Report Q2 2021
SALES AND PROFIT
The comparative period for sales and profit is the corresponding period of the preceding year.
Second quarter 2021
Sales
Net sales for the second quarter of 2021 amounted to SEK 32.0 million (31.3), of which PAYDAY accounted for SEK 31.5 million (28.1). Net sales for PAYDAY increased by 12.1% over the corresponding period of the preceding year. Net sales were SEK 26.9 million (22.1) for PC and SEK 4.6 million (6.0) for Console. Net sales for the base game PAYDAY 2 on Steam increased by 21% (SEK 1.4 million) compared to the second quarter of 2020, and net sales of DLC (sale of downloadable content) increased by 29% (SEK 3.8 million).
Console revenues are SEK 1.4 million lower than the corresponding period of the preceding year, where sales are mostly unchanged, but a weaker Swedish krona has a negative impact. Changes in the dollar exchange rate had a negative impact on net sales of SEK 3.0 million compared to the average exchange rate in the corresponding period of the preceding year. Adjusted for exchange rate fluctuations, the increase in sales on Steam was about 38%.
In the corresponding period of the preceding year, SEK 3.0 million of net sales was related to non-core activities.
Expenses
Direct costs amounted to SEK 14.2 million (6.3) and consist of expenses related to game production and game development. Direct costs include depreciation and amortization of SEK 10.5 million (6.1). The increase is mainly due to increased amortization of intangible assets as the depreciation plan for the company's assets has been revised for 2021 onwards.
Capitalized development expenditure reduced direct costs by SEK 22.1 million (19.7) and relates to the games PAYDAY 2 and PAYDAY 3.
Selling and marketing expenses amounted to SEK 3.0 million (2.3) and relate mainly to employee benefit expenses.
Administrative expenses amounted to SEK 12.6 million (19.4) and relate to items including office expenses and salaries of employees who do not work in game production or marketing, as well as external expenses related to legal work. The decrease in administrative expenses is mainly attributable to lower consultancy and legal expenses. Administrative expenses include amortization of SEK 5.0 million (4.4). Capitalized development expenditure reduced administrative expenses by SEK 7.9 million (5.4) and relates to the games PAYDAY 2 and PAYDAY 3.
Other revenue amounted to SEK -0.9 million (1.7). This item consists mainly of currency effects due to changes in the USD and EUR exchange rates against SEK. The currency effect had a negative impact on the individual quarter.
Other expenses amount to SEK -68.7 million (0.0) and relate to previously capitalized development expenditure related to PAYDAY Crime War, which were reversed with the signing of a license agreement with PopReach for launch of the game. These expenses are non-cash items.
Sales and profit
| SEKk | Q2 | Q2 | JAN-JUN | JAN-JUN |
|---|---|---|---|---|
| Net sales | 32,010 | 31,281 | 59,933 | 53,318 |
| EBITDA * | -51,849 | 15,507 | -29,255 | 32,337 |
| EBITDA adjusted ** | 16,823 | 15,507 | 39,417 | 32,337 |
| Profit (-loss) before tax | -80,032 | -8,586 | -84,280 | -105,923 |
| Net profit (-loss) for the period | -76,490 | -8,771 | -80,871 | -105,633 |
| Earnings per share, SEK | -0.11 | -0.02 | -0.11 | -0.31 |
| Net sales growth, % | 2.3 | -80.4 | 12.4 | -74.3 |
| EBITDA margin, % | -162.0 | 49.6 | -48.8 | 60.6 |
| EBITDA margin, % adjusted | 52.6 | 49.6 | 65.8 | 60.6 |
*See page 19 for the definitions of key figures
** Adjustment for on-off effects related to PAYDAY Crime War licence agreement
Starbreeze
Interim Report Q2 2021
8
Starbreeze
Interim Report Q2 2021
Net profit
Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to SEK 51.8 million (15.5). Adjusted for one-off effects related to the license agreement for PAYDAY Crime War, EBITDA was SEK 16.8 million (15.5).
The share of profit and loss in the joint venture StarVR Corporation amounted to SEK 0.0 million (-1.1).
Net financial income/expense was reduced during the quarter by interest on lease liabilities of SEK 0.3 million (0.4), an effect of the reporting standard IFRS 16.
Net financial income/expense
Net financial expense/expense amounted to SEK -12.6 million (-13.5). The expenses are attributable mainly to the company's convertible loan and associated liability of SEK -11.9 million (7.3).
Profit before tax and net profit for the period
Profit before tax for the quarter amounted to SEK -80.0 million (-8.6). Net profit for the quarter amounted to SEK -76.5 million (-8.8).
Basic and diluted earnings per share were SEK -0.11 (-0.02).
First half 2021
Sales
Net sales amounted to SEK 59.9 million (53.3), of which PAYDAY accounted for 58.4 million (49.7). Net sales were SEK 49.2 million (39.0) for PC and SEK 9.2 million (10.6) for Console.
Net sales for the base game PAYDAY 2 on Steam increased by 17% (SEK 1.8m) compared to the corresponding period in 2020 and net sales of DLC (sale of downloadable content bundles) increased by 34% (SEK 8.0m). Console revenue is SEK 1.4 million lower than the corresponding period of the preceding year.
The change in the exchange rate against the dollar had a negative impact on net sales of SEK 7.2 million compared to the average exchange rate for the corresponding period of the preceding year.
Expenses
Direct costs amounted to SEK 25.8 million (15.8) and consist of expenses related to game production and game development. The increase is mainly due to increased amortization of intangible assets of SEK 8.3 million as the depreciation plan for the company's assets has been revised for 2021 onwards. Direct costs include depreciation and amortization of SEK 20.7 million (12.4).
Capitalized development expenditure reduced direct costs by SEK 43.7 million (37.3) and relates to the games PAYDAY Crime War, PAYDAY 2 and PAYDAY 3.
Selling and marketing expenses amounted to SEK 5.3 million (4.4) and relate mainly to employee benefit expenses.
Administrative expenses amounted to SEK 23.4 million (38.9) and relate to items including office expenses and salaries of employees who do not work in game production or marketing, as well as expenses related to the reconstruction process. The decrease in administrative expenses is mainly attributable to lower consultancy and legal expenses, as well as costs of premises.
Administrative expenses include amortization of SEK 9.3 million (8.5). Capitalized development expenditure reduced administrative expenses by SEK 14.5 million (12.2) and relates to the games PAYDAY Crime War, PAYDAY 2 and PAYDAY 3.
Other revenue amounted to SEK 4.0 million (10.9). This item consists mainly of currency effects due to changes in the USD and EUR exchange rates against SEK. The comparative figure includes net profit attributable to divested subsidiaries of SEK 6.4 million.
Other expenses amount to SEK -68.7 million (0.0) and relate to previously capitalized development expenditure related to PAYDAY Crime War, which was reversed when a license agreement was signed with PopReach for launch of the game. These expenses are non-cash items.
Net profit
Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to SEK -29.3 million (32.3).
The share of profit and loss in the joint venture StarVR Corporation amounted to SEK 0.0 million (-1.4). Net financial income/expense was reduced during the period by interest on lease liabilities of SEK 0.6 million (-0.8), an effect of the IFRS 16 reporting standard.
Net financial income/expense
Net financial income/expense amounted to SEK -25.0 million (-117.4). The expenses are attributable mainly to the company's convertible loan and associated liability of SEK 23.5 million. In the corresponding period of the preceding year, we had a negative impact of SEK 90.9 million related to the renegotiation loss on convertible loan.
Profit before tax and net profit for the period
The profit/loss before tax for the period was SEK -84.3 million (-105.9). The profit/loss for the period amounted to SEK -80.9 million (-105.6).
Basic and diluted earnings per share were SEK -0.11 (-0.31).
Specification of net financial income/expense
| 2021 | 2020 | 2021 | 2020 | 2020 | |
|---|---|---|---|---|---|
| SEKk | Q2 | Q2 | JAN-JUN | JAN-JUN | JAN-DEC |
| Interest on convertible bonds | -6,679 | -5,747 | -13,312 | -10,281 | -22,766 |
| Net profit (-loss) from StarVR Corp. | 39 | -1,088 | 70 | -1,366 | -2,112 |
| Renegation loss convertible bond | - | - | - | -40,934 | -90,934 |
| Implicit interest | -5,223 | -1,559 | -10,161 | -6,873 | -19,148 |
| Interest on bank overdraft facility | - | -2,827 | - | -2,827 | - |
| Interest Nerdea | -508 | -1,737 | -1,035 | -3,534 | -3,974 |
| Interest on lease liability | -291 | -389 | -607 | -803 | -1,509 |
| Interest on non-current liabilities according composition proposal | - | -340 | - | -763 | -1,563 |
| Other items | 28 | 175 | 66 | 19 | 658 |
| Total | -12,634 | -13,312 | -25,001 | -117,363 | -141,348 |
9 Starbreeze Interim Report Q2 2021
OTHER FINANCIAL INFORMATION
The comparison period for financial information is the corresponding period of the preceding year.
Second quarter 2021
Cash flow
Cash flow from operating activities before changes in working capital amounted to SEK 9.3 million (10.5) in the period. Cash flow from operating activities for the period was impacted by interest expenses related to repayment of loans of SEK -3.4 million and a decrease in operating receivables of SEK -3.4 million.
Adjustments for non-cash items amounted to SEK 85.4 million (13.2), of which depreciation of assets is SEK 15.5 million and currency effects are SEK -1.1 million. The depreciation plan for the company's assets has been revised, with the result that depreciation for the period increased to SEK 15.5 million against SEK 10.6 million for the corresponding period of the preceding year. This item also includes an accounting loss on sale of fixed assets of SEK 68.7 million, which relates to previously capitalized development expenditure on PAYDAY Crime War. In connection with the signing of a license agreements for PAYDAY Crime War, the rights to the game are transferred to the licensee, with the consequence that previously made investments in development are to be expensed.
Cash flow from investing activities was SEK -27.6 million (-24.6), of which investments in proprietary game development amounted to SEK -30.0 million. This item also includes the one-off revenue received by Starbreeze in connection with the signing of the PAYDAY Crime War license agreement of SEK 2.1 million.
Cash flow from financing activities amounted to SEK -16.6 million (-2.5), of which the effect of IFRS 16 Leases amounted to SEK -4.8 million. Loans have been repaid to Nordea in the sum of SEK -51.0 million, which means that all Nordea loans have now been fully amortized. During the period, the company raised an overdraft facility with Nordea with a limit of SEK 15 million on market terms. During the quarter, SEK 1.1 million was used from the overdraft facility.
During Q2, the company received funding for the game development of Payday 3 from our co-publishing partner Koch amounting to SEK 37.8 million.
Total cash flow for the period was SEK -34.8 million (-16.5). Cash and cash equivalents at the end of the quarter amounted to SEK 133.6 million (90.9).
Investments
Consolidated investments in property, plant and equipment during the period amounted to SEK 0.1 million (0.0). Investments in proprietary game and technology development amounted to SEK 30.0 million (24.3).
Cash and cash equivalents
as of June 30, 2021
113.6 SEKm
Starbreeze
Interim Report Q2 2021
First half 2021
Cash flow
Cash flow from operating activities, before changes in working capital, amounted to SEK -37.9 million (14.3). The increase is mainly attributable to a better operating profit in the first quarter. Adjustments for non-cash items amounted to SEK 96.5 million (9.2) of which depreciation and amortization amounted to SEK 30.0 million and an accounting loss on sale of fixed assets to SEK 68.7 million, which is attributable to previously capitalized development expenditure on PAYDAY Crime War.
Cash flow from investing activities was SEK -55.5 million (-49.5), of which investments in proprietary game development amounted to SEK -58.2 million.
Cash flow from financing activities has decreased to SEK -26.2 million (43.1), mainly due to repayment of loans to Nordea of SEK -55.9 million and financing received for game development from Koch of SEK 37.8 million. In addition, the company has raised a new overdraft facility with Nordea with a limit of SEK 15 million, of which SEK 1.1 million had been drawn down at the end of the period. The impact of IFRS 16 Leases amounts to SEK -9.5 million. In Q1 2020, a new share issue of SEK 50.7 million was made, which had a positive impact in the corresponding period of the preceding year.
Total cash flow for the period was SEK -43.9 million (7.9). Cash and cash equivalents at the end of the period amounted to SEK 113.6 million (90.9).
Investments
Group investments in property, plant and equipment during the period amounted to SEK 0.3 million (0.0). Investments in proprietary game and technology development amounted to SEK 58.2 million (48.7).
Financial position
Non-current assets
Goodwill at the end of the period amounted to SEK 40.2 million (43.7). Intangible assets, which consist primarily of IP rights, amounted to SEK 214.2 million (233.3).
Capitalized expenditure on proprietary game and technology development amounted to SEK 154.3 million (128.8).
Investments in publishing projects amounted to SEK 4.0 million (4.0).
Amortization and impairments of intangible assets amounted to SEK 19.0 million (9.4) during the period.
Current assets
Trade and other receivables amounted to SEK 5.3 million (22.4).
Prepaid expenses and accrued income at the end of the period amounted to SEK 34.0 million (31.8), of which SEK 16.2 million (14.9) relates to receivables for digital sales, primarily through Steam, PlayStation Store, Xbox Live and Switch.
Equity
Group equity amounted to SEK 146.8 million (24.7) at the reporting date.
Non-current liabilities
Non-current liabilities amounted to SEK 372.4 million (332.6), of which convertible loans and related liability amounted to SEK 293.6 million and financing liability to Koch to SEK 37.8 million. The non-current component of lease liability amounted to SEK 29.1 million (46.2). Deferred tax liability amounted to SEK 0.0 million (8.5).
Starbreeze
Interim Report Q2 2021
12 Starbreeze Interim Report Q2 2021
Current liabilities
Current liabilities amounted to SEK 108.5 million (277.1). Trade payables and other liabilities at the end of the period amounted to SEK 61.6 million (214.5). Repayment of loans to Nordea including interest were made during the period in an amount of SEK 59.1 million. Current liability for lease contracts amounted to SEK 18.5 million (19.4). Accrued expenses and deferred income at the end of the period amounted to SEK 28.4 million (43.1).
Leases
IFRS 16 Leases has been applied since 1 January 2019. The deposit paid for the premises in Stockholm is recognized as a financial asset on the balance sheet.
In discounting future lease payments, Starbreeze has used the marginal lending rate per country as a discount rate. The incremental borrowing rate is based on the lessee's financial strength, country and the term of the relevant lease.
The parent company has prepared its parent company in accordance with the Swedish Annual Accounts Act (SFS 1995:1554) and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities.
The interim report for the parent company has been prepared using the same accounting policies and calculation methods as for the 2020 annual report (Note 1, pages 55-60) except that the parent company applies the exception permitted under RFR2 and recognizes all lease obligations as operating leases.
Share capital
Share capital at the end of the period amounted to SEK 14,492,185 (7,246,093) divided into 724,609,266 shares (362,304,633), of which 166,877,565 Class A shares (85,444,417) and 557,731,701 Class B shares (276,860,216).
Risks and uncertainties
The preparation of interim reports and annual reports in accordance with generally accepted accounting practices requires management to make estimates, judgments and assumptions that affect the value of assets, liabilities and revenue reported in the financial statements. Actual outcomes may differ from these estimates and judgments.
The short-term effect on profit and loss from fluctuations in exchange rates can be positive or negative, depending on the current currency exposure from trade receivables, bank balances and other assets and liabilities in foreign currency. However, a falling dollar rate in the longer term always has a negative impact on profit margins. As the Group includes foreign subsidiaries, there is also translation exposure.
The largest risks and uncertainties are low revenues in connection with game releases and project delays. These and other risks such as copyright infringements, loss of key individuals and exchange rate fluctuations are described in Starbreeze's Annual Report 2020 in the Report of the Board of Directors on page 46, and in Note 3. Furthermore, the value of certain assets and liabilities is based on expected outcomes. Consequently, these items have to be regularly remeasured and thus may affect future profit and loss.
The company continuously monitors the Group's liquidity and capital requirement for the next twelve months. The Board of Directors has assessed whether the assumption of going concern is fulfilled. The factors underlying the Board's assessment are described below: The Company has signed publishing agreements for PAYDAY 3 with Koch Media which mean that game development for PAYDAY 3 is funded until and after launch in 2023. The Company will receive ongoing revenues from sales linked to PAYDAY 2. Based on the above, the assumption of going concern is judged to be fulfilled.
Number of employees
| 2021 | 2020 | |
|---|---|---|
| Q2 | Q2 | |
| Employees | 136 | 125 |
| Men | 114 | 108 |
| Women | 22 | 17 |
136
employees at Starbreeze
13 Starbreeze Interim Report Q2 2021
Parent company
The Group's business was conducted during the quarter in the parent company Starbreeze AB (publ) and the following subsidiaries: Starbreeze Production AB, Starbreeze Studio AB, Starbreeze Publishing AB, Starbreeze VR AB, Starbreeze USA Inc, Starbreeze LA Inc, Starbreeze IP LUX, Starbreeze IP LUX II Sarl, Starbreeze Barcelona SL, Starbreeze Paris SAS, New Starbreeze Studios AB, New Starbreeze Publishing AB and Enterspace AB.
The parent company's net sales during the quarter amounted to SEK 5.3 million (7.2). Sales relate primarily to allocation of management fees.
Profit before and after tax was SEK -17.7 million (-24.5).
Cash and cash equivalents at the end of the quarter amounted to SEK 7.5 million (11.9) and parent company equity was SEK 757.6 million (590.4).
Non-current liabilities increased during the period to SEK 293.6 million (248.2).
Related-party transactions
There were no related party transactions during the period other than payment of salaries and other remuneration and intra-Group transactions.
Auditor's review
This report has not been reviewed by the company's statutory auditors.
14 Starbreeze Interim Report Q2 2021
Investor relations contact
Up-to-date information about Starbreeze is available on the company's website starbreeze.com. The company can be contacted by e-mail: [email protected], telephone: +46 (0)8-209 208 or mail: Box 7731, 103 95 Stockholm, Sweden.
For further information
Tobias Sjögren, CEO
Tel: +46 8-209 229
[email protected]
Mats Juhl, CFO
Tel: +46 8-209 229
[email protected]
The reports are published on the company's website, starbreeze.com.
The Board of Directors and the CEO offer their assurance that this interim report gives a true and fair view of the Group's and Parent Company's operations, financial position and results of operations and describes the significant risks and uncertainties facing the Group and the Parent Company.
Stockholm, August 18, 2021
Torgny Hellström
Chairman of the Board
Directors and CEO
Jan Benjaminson
Mike Gamble
Kerstin Sundberg
Anna Lagerborg
Thomas Lindgren
Tobias Sjögren
CEO
Starbreeze AB is required to disclose this information under the EU Market Abuse Regulation and the Securities Market Act. The information was provided by the above contact persons for publication on August 18, 2021 at 8.00 CET.
Financial calendar
Interim - Report Q3 2021...November 12, 2021
Year-end Report 2021...February 16, 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| SEKk | NOTE | 2021 Q2 | 2020 Q2 | 2021 JAN–JUN | 2020 JAN–DEC |
|---|---|---|---|---|---|
| Net sales | 3 | 32,010 | 31,281 | 59,933 | 53,318 |
| Direct costs | 4 | -14,201 | -6,281 | -25,791 | -15,789 |
| Gross profit (-loss) | 17,809 | 25,000 | 34,142 | 37,529 | |
| Selling and marketing costs | -2,957 | -2,334 | -5,343 | -4,353 | |
| Administrative expenses | -12,630 | -19,407 | -23,374 | -38,948 | |
| Other revenue | -948 | 1,667 | 3,968 | 17,212 | |
| Other expenses | -68,672 | - | -68,672 | - | |
| Operating profit (-loss) | -67,398 | 4,926 | -59,279 | 11,440 | |
| Financial income | 14 | 196 | 32 | 226 | |
| Financial expenses | -12,687 | -12,342 | -25,103 | -116,223 | |
| Share in profit or loss of holdings accounted for using the equity method | 39 | -1,366 | 70 | -1,366 | |
| Profit (-loss) before tax | -80,032 | -8,586 | -84,280 | -105,923 | |
| Income tax | 3,542 | -185 | 3,409 | 290 | |
| Net profit (-loss) for the period | -76,490 | -8,771 | -80,871 | -105,633 | |
| Other comprehensive income that may subsequently be reclassified to profit and loss | |||||
| Exchange differences | 727 | 2,957 | -853 | -3,283 | |
| Total comprehensive income for the period | -75,763 | -5,814 | -81,724 | -108,916 | |
| Total comprehensive income for the period attributable to: | |||||
| Owners of the parent | -75,763 | -5,814 | -81,724 | -108,916 | |
| Earnings per share attributable to owners of the parent during the period (SEK): | |||||
| - Basic | -0.11 | -0.02 | -0.11 | -0.31 | |
| - Diluted | -0.11 | -0.02 | -0.11 | -0.31 |
Starbreeze
Interim Report Q2 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| SEKk | NOTE | 2021-06-30 | 2020-06-30 | 2020-12-31 |
|---|---|---|---|---|
| ASSETS | ||||
| Intangible assets | ||||
| Goodwill | 40,188 | 43,736 | 38,827 | |
| Other intangible assets | 214,197 | 233,294 | 228,514 | |
| Capitalized development cost for own games and technology development | 154,312 | 128,815 | 171,435 | |
| Investments in publishing projects | 3,974 | 4,039 | 3,974 | |
| Financial assets | ||||
| Financial assets | 7,717 | 7,891 | 7,683 | |
| Investments in joint ventures | 5 | 1,153 | 1,828 | 1,083 |
| Non-current lease receivable | 1,918 | 4,259 | 2,612 | |
| Deferred tax assets | 4,390 | - | 161 | |
| Property, plant and equipment | ||||
| IT equipment and other equipment | 3,298 | 8,863 | 6,704 | |
| Right-of-Use asset-Buildings | 41,449 | 56,335 | 48,866 | |
| Total non-current assets | 472,596 | 489,060 | 509,859 | |
| Current assets | ||||
| Trades and other receivables | 5,321 | 22,488 | 4,061 | |
| Current lease receivable | 2,184 | - | 2,627 | |
| Prepaid expenses and accrued income | 34,046 | 31,827 | 34,736 | |
| Cash and cash equivalents | 113,581 | 90,891 | 157,423 | |
| Total current assets | 155,132 | 145,206 | 198,847 | |
| TOTAL ASSETS | 627,728 | 634,266 | 708,706 | |
| EQUITY AND LIABILITIES | ||||
| Equity attributable to owners of the parent | ||||
| Share capital | 14,492 | 7,246 | 14,492 | |
| Other contributed capital | 1,979,111 | 1,761,398 | 1,979,111 | |
| Reserves | 20,793 | 18,118 | 21,646 | |
| Retained earnings including net profit or loss for the period | -1,867,622 | -1,762,105 | -1,786,751 | |
| Total equity | 146,774 | 24,657 | 228,498 | |
| Non-current liabilities | ||||
| Non-current liabilities, earnouts | - | 64 | - | |
| Deferred tax liability | - | 8,468 | - | |
| Non-current lease liability | 29,123 | 46,261 | 37,147 | |
| Other non-current liabilities | 343,294 | 277,766 | 292,702 | |
| Total non-current liabilities | 372,417 | 332,559 | 329,849 | |
| Current liabilities | ||||
| Current liabilities, earnouts | - | - | 18 | |
| Trade and other payables | 61,638 | 214,553 | 103,345 | |
| Current lease liability | 18,472 | 19,440 | 19,135 | |
| Accrued expenses and deferred income | 28,427 | 43,057 | 27,861 | |
| Total current liabilities | 108,537 | 277,050 | 150,359 | |
| TOTAL EQUITY AND LIABILITIES | 627,728 | 634,266 | 708,706 |
16 Starbreeze Interim Report Q2 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| SEKk | Share capital | Other contributed capital | Reserves | Retained earnings | Total equity |
|---|---|---|---|---|---|
| Balance at 1 January 2021 | 14,492 | 1,979,111 | 21,646 | -1,786,751 | 228,498 |
| Net profit (-loss) for the period | - | - | - | -80,871 | -80,871 |
| Other comprehensive income for the period | |||||
| Translation differences | - | - | -853 | - | -853 |
| Total comprehensive income | - | - | -853 | -80,871 | -81,724 |
| Balance at 30 June 2021 | 14,492 | 1,979,111 | 20,793 | -1,867,622 | 146,774 |
| Balance at 1 January 2020 | 6,587 | 1,711,334 | 21,400 | -1,733,163 | 6,158 |
| Net profit (-loss) for the period | - | - | - | -130,280 | -130,280 |
| Translation differences | - | - | 246 | - | 246 |
| Total comprehensive income | - | - | 246 | -130,280 | -130,034 |
| Transactions with shareholders: | |||||
| New issue | 7,905 | 293,368 | - | - | 301,273 |
| Issue costs recognized in equity | - | -30,273 | - | - | -30,273 |
| Shareholders’ contributions from composition proposal | - | - | - | 76,692 | 76,692 |
| Other | - | 4,683 | - | - | 4,683 |
| Total contribution from and value transfers to shareholders, recognized directly in equity | 7,905 | 267,777 | - | 76,692 | 352,374 |
| Balance at 31 December 2020 | 14,492 | 1,979,111 | 21,646 | -1,786,751 | 228,498 |
| 2021 | 2020 | ||||
| CHANGE IN NUMBER OF OUTSTANDING SHARES | JAN-JUN | JAN - DEC | |||
| Number of shares at the beginning of the period | 724,609,266 | 329,367,849 | |||
| New issue | - | 395,241,417 | |||
| Total shares outstanding at the end of the period | 724,609,266 | 724,609,266 |
Starbreeze Interim Report Q2 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
| SEKk | NOTE | 2021 Q2 | 2020 JAN-JUN | 2021 JAN-JUN | 2020 JAN - DEC |
|---|---|---|---|---|---|
| Operating activities | |||||
| Cash flow from operations | -67,398 | 4,926 | -59,279 | 11,440 | 10,875 |
| Adjustment for non-cash items | 85,350 | 13,250 | 96,457 | 9,178 | 37,053 |
| Interest paid | -3,394 | - | -3,394 | - | -385 |
| Income taxes paid | -852 | - | -1,846 | - | - |
| Cash flow from (-used in) operating activities before changes in working capital | 13,706 | 18,176 | 31,938 | 20,618 | 47,543 |
| Cash flow from changes in working capital | |||||
| Increase (+)/decrease (-) in operating receivables | -3,422 | -5,863 | 1,070 | 73,800 | 66,851 |
| Increase (+)/decrease (-) in operating liabilities | -956 | -1,806 | 4,844 | -80,093 | -139,034 |
| Cash flow from (-used in) operating activities | 9,328 | 10,507 | 37,852 | 14,325 | -24,640 |
| Investing activities | |||||
| Purchase of property, plant and equipment | -145 | -17 | -266 | -32 | -944 |
| Sold non-current assets | 31 | -226 | 98 | -226 | 51 |
| Sold intangible assets | 2,103 | - | 2,103 | - | - |
| Divested subsidiaries | - | - | - | -480 | -472 |
| Investments in other financial assets | - | - | -39 | -86 | - |
| Change in other financial assets | 424 | - | 789 | - | - |
| Investments in own games and technology | -29,990 | -24,328 | -58,205 | -48,724 | -94,541 |
| Investments in publishing projects | - | - | - | - | -309 |
| Cash flow from (-used in) investing activities | -27,577 | -24,571 | -55,520 | -49,548 | -96,215 |
| Financing activities | |||||
| New issue | - | - | - | 50,723 | 301,273 |
| Costs related to new issues | - | - | - | - | -30,274 |
| Increase in non-current liabilities | - | 2,270 | - | 1,604 | -1,598 |
| Repayment of loans | -51,015 | - | -55,887 | - | -55,000 |
| Financing game development | 38,074 | - | 38,074 | - | - |
| Overdraft facility | 1,114 | - | 1,114 | - | - |
| Effect of financial lease | -4,761 | -4,755 | -9,512 | -9,244 | -18,802 |
| Cash flow from financing activities | -16,588 | -2,485 | -26,211 | 43,083 | 195,599 |
| Cash flow for (-used in) the period | -34,837 | -16,549 | -43,879 | 7,860 | 74,744 |
| Cash and cash equivalents at the beginning of the period | 148,463 | 107,936 | 157,423 | 82,787 | 82,787 |
| Exchange difference in cash and cash equivalents | -45 | -496 | 37 | 244 | -108 |
| Cash and cash equivalents at the end of the period | 113,581 | 90,891 | 113,581 | 90,891 | 157,423 |
18 Starbreeze Interim Report Q2 2021
KEY RATIOS, GROUP
| 2021 | 2020 | 2021 | 2020 | 2020 | |
|---|---|---|---|---|---|
| Q2 | Q2 | JAN–JUN | JAN–JUN | JAN - DEC | |
| Net sales, SEKk | 32,010 | 31,281 | 59,933 | 53,318 | 118,006 |
| EBITDA, SEKk | -51,849 | 15,507 | -29,255 | 32,337 | 49,317 |
| EBITDA adjusted, SEKk | 16,823 | 15,507 | 39,417 | 32,337 | 49,317 |
| EBIT, SEKk | -67,398 | 4,926 | -59,279 | 11,440 | 10,875 |
| Profit (-loss) before tax, SEKk | -80,032 | -8,586 | -84,280 | -105,923 | -130,473 |
| Profit (-loss) after tax, SEKk | -76,490 | -8,771 | -80,871 | -105,633 | -130,280 |
| EBITDA margin, % | -162.0 | 49.6 | -48.8 | 60.6 | 41.8 |
| EBITDA margin, % adjusted | 52.6 | 49.6 | 65.8 | 60.6 | 41.8 |
| EBIT margin, % | -210.6 | 15.7 | -98.9 | 21.5 | 9.2 |
| Profit margin, % | -250.0 | -27.4 | -140.6 | -198.7 | -110.6 |
| Equity to assets ratio, % | 23.4 | 3.9 | 23.4 | 3.9 | 32.2 |
| Closing price of A share for the period, SEK | 1.25 | 1.47 | 1.25 | 1.47 | 1.06 |
| Closing price of B share for the period, SEK | 1.26 | 1.45 | 1.26 | 1.45 | 1.09 |
| Basic earnings per share, SEK | -0.11 | -0.02 | -0.11 | -0.31 | -0.28 |
| Diluted earnings per share, SEK | -0.11 | -0.02 | -0.11 | -0.31 | -0.28 |
| Number of shares at end of period before dilution | 724,609,266 | 362,304,633 | 724,609,266 | 362,304,633 | 724,609,266 |
| Number of shares at end of period after dilution | 724,609,266 | 362,304,633 | 724,609,266 | 362,304,633 | 724,609,266 |
| Average number of shares before dilution | 724,609,266 | 353,437,037 | 724,609,266 | 344,569,441 | 469,754,144 |
| Average number of shares after dilution | 724,609,266 | 353,437,037 | 724,609,266 | 344,569,441 | 469,754,144 |
| Average number of employees | 133 | 129 | 132 | 126 | 123 |
| Number of employees at the end of the period | 136 | 125 | 136 | 125 | 124 |
Key ratios, Group
EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization.
EBITDA Adjusted
Operating profit before depreciation, amortization and impairment adjusted for one-off effects related to Payday Crime War license agreements.
EBIT
Earnings Before Interest and Taxes.
EBITDA margin
Operating profit before depreciation, amortization and impairments as a percentage of net sales.
Adjusted EBITDA margin
Operating profit before depreciation, amortization and impairment as a percentage of net sales adjusted for one-off effects related to license agreements with PopReach
Operating margin
Operating profit as a percentage of net sales.
Profit margin
Profit after net financial income/expense as a percentage of the sum of net sales.
Equity/assets ratio
Equity as a percentage of capital employed.
Earnings per share
Profit after tax divided by the average number of shares during the period.
Equity
Recognized equity including 78 percent of untaxed reserves.
19 Starbreeze Interim Report Q2 2021
RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES
| 2021 | 2020 | 2021 | 2020 | 2020 | |
|---|---|---|---|---|---|
| Q2 | Q2 | JAN–JUN | JAN–JUN | JAN - DEC | |
| EBITDA | |||||
| Operating profit (-loss), SEKk | -67,398 | 4,926 | -59,279 | 11,440 | 10,875 |
| Amortization of intangible assets, SEKk | 9,630 | 4,913 | 18,984 | 9,414 | 16,628 |
| Depreciation of property, plant and equipment, SEKk | 5,919 | 5,668 | 11,040 | 11,483 | 21,814 |
| EBITDA | -51,849 | 15,507 | -29,255 | 32,337 | 49,317 |
| EBITDA adjusted, SEKk | 16,823 | 15,507 | 39,417 | 32,337 | 49,317 |
| EBITDA margin, % | |||||
| EBITDA, SEKk | -51,849 | 15,507 | -29,255 | 32,337 | 49,317 |
| EBITDA adjusted, SEKk | 16,823 | 15,507 | 39,417 | 32,337 | 49,317 |
| Net sales, SEKk | 32,010 | 31,281 | 59,933 | 53,318 | 118,006 |
| EBITDA margin, % | -162.0 | 49.6 | -48.8 | 60.6 | 41.8 |
| EBITDA margin, % adjusted | 52.6 | 49.6 | 65.8 | 60.6 | 41.8 |
| EBIT margin, % | |||||
| Operating profit (-loss), SEKk | -67,398 | 4,926 | -59,279 | 11,440 | 10,875 |
| Net sales, SEKk | 32,010 | 31,281 | 59,933 | 53,318 | 118,006 |
| EBIT margin, % | -210.6 | 15.7 | -98.9 | 21.5 | 9.2 |
| Profit margin, % | |||||
| Profit (-loss) before tax, SEKk | -80,032 | -8,586 | -84,280 | -105,923 | -130,473 |
| Net sales, SEKk | 32,010 | 31,281 | 59,933 | 53,318 | 118,006 |
| Profit margin, % | -250.0 | -27.4 | -140.6 | -198.7 | -110.6 |
| Equity to assets ratio, % | |||||
| Total equity | 146,774 | 24,657 | 146,774 | 24,657 | 228,498 |
| Total equity and liabilities, SEKk | 627,728 | 634,266 | 627,728 | 634,266 | 708,706 |
| Equity to assets ratio, % | 23.4 | 3.9 | 23.4 | 3.9 | 32.2 |
Alternative Performance Measures (APMs) are financial indicators of performance, financial position and cash flow not defined in the applicable reporting framework (IFRS). These are considered to be important additional key figures for the Group's performance. Since not all entities calculate financial measurements in the same way, they are not always comparable to those used by other entities.
Starbreeze
Interim Report Q2 2021
PARENT COMPANY INCOME STATEMENT
| 2021 | 2020 | 2021 | 2020 | 2020 | |
|---|---|---|---|---|---|
| SEKk | Q2 | Q2 | JAN–JUN | JAN–JUN | JAN - DEC |
| Net sales | 5,305 | 7,208 | 10,334 | 17,126 | 29,762 |
| Other operating revenue | -2,352 | -9,995 | 2,694 | 924 | 8,542 |
| Total sales | 2,953 | -2,787 | 13,028 | 18,050 | 38,304 |
| Other external expenses | -3,029 | -7,321 | -6,072 | -15,760 | -24,374 |
| Employee benefit expense | -6,788 | -6,207 | -12,466 | -13,090 | -29,961 |
| Depreciation of property, plant and equipment | -60 | -36 | -140 | -96 | -188 |
| Other operating expenses | - | 579 | - | - | - |
| Operating profit (-loss) | -6,924 | -15,771 | -5,650 | -10,896 | -16,219 |
| Profit from holdings in group companies | - | - | 19 | 902 | - |
| Other financial income | 1,415 | 1,738 | 2,715 | 3,499 | 6,508 |
| Financial expenses | -12,184 | -10,475 | -24,050 | -111,662 | -134,561 |
| Profit (-loss) after net financial income/expense | -17,693 | -24,508 | -26,966 | -118,157 | -144,272 |
| Profit (-loss) before tax | -17,693 | -24,508 | -26,966 | -118,157 | -144,272 |
| Income tax | - | - | - | - | - |
| Net profit (-loss) for the period | -17,693 | -24,508 | -26,966 | -118,157 | -144,272 |
For the parent company, net profit or loss for the period corresponds to comprehensive income.
Starbreeze
Interim Report Q2 2021
PARENT COMPANY BALANCE SHEET
| SEKk | 2021-06-30 | 2020-06-30 | 2020-12-31 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | |||
| Computers and other equipment | 213 | 330 | 268 |
| Financial assets | |||
| Investments in group companies | 322,685 | 322,749 | 322,702 |
| Investments in associates | 4,656 | 4,656 | 4,656 |
| Other financial assets | 2,592 | 2,671 | 2,594 |
| Total non-current assets | 330,146 | 330,406 | 330,220 |
| Current assets | |||
| Trade and other receivables | 1,211 | 407 | 933 |
| Receivables from group companies | 1,339,086 | 1,123,937 | 1,332,388 |
| Prepaid expenses and accrued income | 439 | 582 | 524 |
| Cash and cash equivalents | 7,468 | 11,919 | 10,906 |
| Total current assets | 1,348,204 | 1,136,845 | 1,344,751 |
| TOTAL ASSETS | 1,678,350 | 1,467,251 | 1,674,971 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 14,492 | 7,246 | 14,492 |
| Share premium reserve | 1,912,127 | 1,699,097 | 1,912,127 |
| Retained earnings | -1,142,087 | -997,816 | -997,796 |
| Net profit (-loss) for the period | -26,966 | -118,157 | -144,272 |
| Total equity | 757,566 | 590,370 | 784,551 |
| Provisions | |||
| Other provisions | - | 31,937 | - |
| Total provisions | - | 31,937 | - |
| Non-current liabilities | |||
| Other non-current liabilities | 293,556 | 248,151 | 270,085 |
| Total non-current liabilities | 293,556 | 248,151 | 270,085 |
| Current liabilities | |||
| Trade payables | 1,227 | 6,787 | 1,013 |
| Liabilities to group companies | 619,497 | 366,107 | 576,975 |
| Other liabilities | 2,084 | 3,233 | 34,544 |
| Accrued expenses and deferred income | 4,420 | 220,666 | 7,803 |
| Total current liabilities | 627,228 | 596,793 | 620,335 |
| TOTAL EQUITY AND LIABILITIES | 1,678,350 | 1,467,251 | 1,674,971 |
Starbreeze
Interim Report Q2 2021
NOTES
Note 1: Accounting and measurement policies
This interim report has been prepared in accordance IAS 34, Interim Financial Reporting. The accounting policies and calculation methods are the same as those applied in 2020.
The report for the parent company has been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities.
No new or revised IFRS regulations have entered into force that are expected to have any material impact on the Group. The carrying amount of all financial assets and liabilities is a good approximation of fair value.
Note 2: Pledged assets
Consolidated pledged assets and contingent liabilities
Consolidated pledged assets relate to rent guarantees and pledged shares in subsidiaries and bank accounts related to loans from Nordea.
| SEKk | 2021-06-30 | 2020-06-30 | 2020-12-31 |
|---|---|---|---|
| Pledged assets | 585 | 585 | 585 |
Starbreeze Interim Report Q2 2021
Note 3: Net sales by category
| SEKk Q2 2020 | Starbreeze Games | Other | Total |
|---|---|---|---|
| PC | 26,934 | 333 | 27,267 |
| Consoles, Digital | 4,577 | 8 | 4,585 |
| Consoles, Retail | 38 | - | 38 |
| VR parks | 16 | 90 | 106 |
| Licensing | -14 | - | -14 |
| Other | 28 | - | 28 |
| Total net sales | 31,579 | 431 | 32,010 |
| SEKk Q2 2020 | Starbreeze Games | Other | Total |
| --- | --- | --- | --- |
| PC | 22,091 | 121 | 22,212 |
| Consoles, Digital | 5,922 | 27 | 5,949 |
| Consoles, Retail | 102 | - | 102 |
| VR parks | 52 | 6 | 58 |
| Licensing | - | 2,948 | 2,948 |
| Other | 12 | - | 12 |
| Total net sales | 28,179 | 3,102 | 31,281 |
| SEKk JAN-JUN 2021 | Starbreeze Games | Other | Total |
| --- | --- | --- | --- |
| PC | 49,275 | 575 | 49,850 |
| Consoles, Digital | 9,074 | -166 | 8,908 |
| Consoles, Retail | 98 | - | 98 |
| VR parks | 16 | 90 | 106 |
| Licensing | 221 | 682 | 903 |
| Other | 68 | - | 68 |
| Total net sales | 58,752 | 1,181 | 59,933 |
| SEKk JAN-JUN 2020 | Starbreeze Games | Other | Total |
| --- | --- | --- | --- |
| PC | 39,073 | 303 | 39,376 |
| Consoles, Digital | 10,468 | 47 | 10,515 |
| Consoles, Retail | 167 | - | 167 |
| VR parks | 12 | 56 | 68 |
| Licensing | - | 3,131 | 3,131 |
| Other | 61 | - | 61 |
| Total net sales | 49,781 | 3,537 | 53,318 |
Starbreeze
Interim Report Q2 2021
Note 4: Group depreciation and amortization by function
| 2021 | 2020 | 2021 | 2020 | 2020 | |
|---|---|---|---|---|---|
| SEKk | Q2 | Q2 | JAN–JUN | JAN-JUN | JAN-DEC |
| Depreciation and impairment of property, plant and equipment | |||||
| Direct costs | -954 | -1,574 | -1,901 | -3,161 | -5,302 |
| Selling and marketing costs | -4 | - | -5 | - | - |
| Administrative expenses | -4,961 | -4,093 | -9,134 | -8,322 | -16,512 |
| Total depreciation and impairment of property, plant and equipment | -5,919 | -5,668 | -11,040 | -11,483 | -21,814 |
| Amortization and impairment of intangible assets | |||||
| Direct costs | -9,561 | -4,728 | -18,848 | -9,278 | -16,353 |
| Administrative expenses | -69 | -185 | -136 | -136 | -275 |
| Total amortization and impairment of intangible assets | -9,630 | -4,913 | -18,984 | -9,414 | -16,628 |
| Total depreciation and amortization and impairment | -15,549 | -10,581 | -30,024 | -20,897 | -38,442 |
Note 5: Joint venture company StarVR Corporation
The company's joint venture with Acer, StarVR Corporation, is a sales and marketing company for the StarVR One headset. The company manages sales and marketing, primarily to the B2B market, as well as support and aftermarket support. Starbreeze owns the intellectual property, such as patents, source code and brands related to StarVR, while Acer is responsible for manufacturing the product. Development and reference design work for headsets is carried out jointly by Starbreeze and Acer. StarVR Corporation bears all expenses for marketing and sale of the StarVR headset. Starbreeze was responsible for R&D-related expenses until September 2018, but these have been transferred to StarVR Corporation. Production expenses are borne by Acer, which is also an exclusive supplier to StarVR Corporation.
The reconciliation below reflects adjustments made by the Group on application of the equity method, including adjustments to fair value at acquisition date and adjustments for differences in accounting policies.
The table below provides condensed financial information for the holding in the joint venture (StarVR Corporation) that the Group has deemed material. The information shows the amounts recognized in the financial reports for the joint venture and not Starbreeze's share of these amounts. The reconciliation of Starbreeze's participation is shown above.
| SEKk | 2021-06-30 |
|---|---|
| Balance sheet in summary: | |
| Current assets | 11,300 |
| Non-current assets | 62 |
| Current liabilities | -7,869 |
| Net assets | 3,493 |
| Statement of comprehensive income in summary: | |
| Sales | 171 |
| Net profit (-loss) for the period | 51 |
| Total comprehensive income for the period | 51 |
| SEKk | 2021-06-30 |
| --- | --- |
| Reconciliation of net carrying amount: | |
| Balance of net assets at 1 January | 3,282 |
| Net profit (-loss) for the period | 51 |
| Exchange differences | 160 |
| Closing balance net assets | 3,493 |
| Group's share | 33% |
| Group's share in SEKk | 1,153 |
| Net carrying amount | 1,153 |
Starbreeze
Interim Report Q2 2021
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