Continued growth and stable profit during Q3 in M.O.B.A. Network, despite the prevailing global conditions

FINANCIAL – 1 JULY 2022 – 30 SEP 2022

  • Net sales amounted to MSEK 71.3 (MSEK 70.8), an increase of 1%.
  • EBITDA amounted to MSEK 7.2 (MSEK 8.9), a decrease of 18%.
  • EBIT amounted to MSEK 5.8 (MSEK 8.2), a decrease of 29%.
  • Profit before tax amounted to MSEK 5.5 (MSEK 8.3), a decrease of 34%.
  • Cash flow from operating activities before changes in working capital amounted to MSEK 4.4 (MSEK 6.6) during the quarter.
  • Earnings per share during the quarter amounted to SEK 0.2, normalized for the split of shares that took place last financial year of 1/10 earnings per share were SEK 2 (SEK 2).

FINANCIAL – 1 JAN 2022 – 30 SEP 2022

  • Net sales amounted to MSEK 209.5 (MSEK 109.7), an increase of 91%.
  • EBITDA amounted to MSEK 24.5 (MSEK 20.7), an increase of 55%.
  • EBIT amounted to MSEK 21 (MSEK 14.1), an increase of 49%.
  • Profit before tax amounted to MSEK 19.3 (MSEK 14.2), an increase of 37%.
  • Cash flow from operating activities before changes in working capital amounted to MSEK 23.5 (MSEK 12.6) during the quarter.
  • Earnings per share during the period amounted to SEK 0.7, normalized for the split of shares that took place last financial year of 1/10 earnings per share were SEK 7 (SEK 4).

CEO-comment

Continued growth and stable profit during Q3 in M.O.B.A. Network, despite the prevailing global conditions

M.O.B.A. Network had a turnover of SEK 71.3 million (+1%) with an EBITDA of SEK 7.2 million during the third quarter of the year under challenging market conditions and with a tough comparative quarter. At the same time, it is positive that we operate in gaming, an industry that is attractive to advertisers and growing, and that we continue to deliver growth, profit, and positive cash flow from ongoing operations.

During the third quarter, the prevailing macroeconomic conditions also became felt for M.O.B.A. Network, which affected us through increased costs. We also entered quarter three with a very satisfactory order book, but during the summer received cancellations in one of our segments to the value of one million Swedish kronor on the margin, which reduced our profit for the quarter. Within the same segment, we are fully booked in Q4 and have acted to mitigate late cancellations in the future.

Despite this event, it is pleasing that we continue to deliver profit, positive cash flow, and earnings per share. It empowers us to continue our internal investments and acquisition strategy to provide high-quality content to fans worldwide. Given the global economy, we do not experience any direct concern in the industry, and we can continue our long-term strategy, which we believe is sustainable even in less good times.

Successful investment in Mobafire LoL Fantasy

We carried out a long-awaited investment in Mobafire LoL Fantasy, the world's largest League of Legends tournament – Worlds, which we see as a very successful investment and intend to continue the cooperation with E-go App during the following year. We now have good content and data to sell to sponsors and advertisers who, in our first tournament, were more cautious with their bets.

Strengthened organization

During the quarter, we have continued to invest in the organization as previously communicated and have recruited a Partner Manager for the content creator network UFG, and last quarter we strengthened the organization with a Head of Content/SEO Manager who works centrally across all our brands with the aim of further improve our SEO position. This is long-term work that we believe will generate results in the future. We will continue to strengthen the organization in areas where we see the potential for further growth, which can increase our results in the long run.

New acquisition strengthens our product portfolio

During the quarter, the company acquired LoLwiz. LoLwiz is an application that integrates with the game League of Legends and provides the player with real-time tips during the game. LoLwiz is distributed through the largest platform for in-game applications, Overwolf. The business model refers to advertisements in the application. With over two million downloads and growing, LoLwiz is one of the largest League of Legends applications on Overwolf. The intention is to integrate more League of Legends data and community features into the app. LoLwiz is a perfect complement to the product portfolio as we want to be present with our services and products on the platforms where our audience is.

Collaborations and partnerships

The operational focus is on growing our audience, optimizing our sales, and creating stable conditions for a more significant share of direct sales through collaborations and partnerships. We have, therefore, for some time held dialogues regarding interesting collaborations. During our fourth quarter, we intend to launch a new platform via a partnership for "content creators" that takes advantage of streamers on platforms other than YouTube, such as Twitch. We are also in close dialogue with several partners who can strengthen our direct sales to our "content creators," We will launch this during the fourth quarter. During quarter three, we had a few late cancellations on advertising as a result of the market situation, where we were initially fully booked. We have secured an agreement with an external party that buys late cancellations which balances sales going forward.

Looking ahead

The entire global team is motivated and works together to deliver the best gaming experiences worldwide. Being profitable in a shaky market and having a solid cash position of SEK 45 million means that we can focus on what we do best, develop the best community meeting places for gamers all over the world and invest in further strengthening our organization and act on attractive acquisitions that meet our criteria. The team and I look forward to the coming quarters and years confidently!

Significant events during the period 1 July 2022 – 30 September 2022, in brief

  • M.O.B.A. launched its first activation for fantasy esports tournaments for MOBAFire community mem-bers. The first tournament took place in conjunction with the LoL Worlds Championship and started on September 29. MOBAFire Fantasy is a global virtual "Coach Competition" where participants compete by creating the best lineup based on match data from a major real world esports tournament.
  • M.O.B.A. acquired LoLwiz, one of the largest in-game applications for League of Legends. The acquisi-tion strengthens M.O.B.A's position and offer for League of Legends players and opens up a new busi-ness area for in-game ads within the group. LoLwiz is an application that seamlessly integrates with the game League of Legends and provides the player with real-time tips during the game. LoLwiz is distrib-uted via the largest platform for in-game applications, Overwolf. LoLwiz is monitized via in-game ads in the application. with over 2 million downloads to date, LoLwiz is one of the largest League of Legends applications on Overwolf.

Significant events after the period 1 July 2022 – 30 September 2022

  • M.O.B.A. has submitted an application to be listed on the OTCQX in the United States of America. The Company expects to receive approval in the first quarter of 2023.OTCQX is a US trading platform operat-ed by OTC Markets Group for securities not listed on a national exchange. The purpose of a listing on OTCQX is to satisfy an increasing interest from American investors and to increase accessibility to the American capital market. Upon possible approval, M.O.B.A.'s shares will be traded with an American ticker symbol and a share price in USD.

This disclosure contains information that M.O.B.A Network AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 16-11-2022 07:30 CET.

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