STRATEGIC PRESENTATION. September 2016

Transcription

1 STRATEGIC PRESENTATION Réunion SFAF 27 janvier 2016

2 Disclosure In this strategic presentation, the terms "Atari and/or the "Company" mean Atari. The term "Group" means the group of companies belonging to the parent Company and all companies within its consolidation s scope. This strategic presentation contains statements relating to ongoing or future projects, future financial and operating results, and other statements about Atari s managements future expectations, beliefs, goals, plans or prospects that are based on current expectations, estimates, forecasts and projections about Atari, as well as company s future performance and the industries in which Atari operate will operate, in addition to managements assumptions. Words such as expects, anticipates, targets, goals, projects, intends, plans, believes, seeks, estimates, variations of such words and similar expressions are intended to identify such forward-looking statements which are not statements of historical facts. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to assess. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. These risks and uncertainties are based upon a number of important factors including, among others: political and economic risks of our respective global operations; changes to existing regulations or technical standards; existing and future litigation; difficulties and costs in protecting intellectual property rights and exposure to infringement claims by others summarized in chapter 8 of the company s annual report registered to the AMF under the number D on August 4, For a more complete list and description of such risks and uncertainties, refer to Atari s annual report in its chapter 8. Except as required the rules and regulations of the AMF, Atari disclaim any intention or obligation to update any forward-looking statements after the distribution of this document, whether as a result of new information, future events, developments, changes in assumptions or otherwise. 2

3 Table of Contents 1. Atari at a glance : Much more than video games : Turnaround 3. Summary Financials / Cap Table 4. Products / Key Investment Considerations 3

4 1 Atari at a glance Much more than video games 4

5 Iconic Brands (Refer to full deck of games) More than $2 Billion of Historical Revenue $456 Million $391 Million $154 Million $525 Million $265 Million $85 Million $92 Million 5

6 There is much more than video games Flashback 250,000 unités 6

7 Strategic Priorities The Atari Group prioritizes the following business lines, combining direct exploitation and partnerships: Video games Online gaming Multimedia productions (TV, ) but only through coproduction agreements Connected devices The other business activities are conducted through licensing agreements. Also, the Atari Group capitalizes on the awareness of the Atari brand to promote Atari Ventures, by taking stakes in high-growth startups in exchange for an Atari brand license (example: ROAM). 7

8 : Turnaround 8

9 : Turnaround 2012 Atari ran into significant financial difficulties January : the US subsidiaries filed for bankruptcy protection (Chapter 11). February : Frédéric Chesnais and the Alden Capital fund took over. F. Chesnais, is the former Deputy- COO of the Atari Group, and CEO of Atari Interactive. He left Atari in Alden Capital, is a New York-based investment fund but not involved in the management of the Atari Group.. Décembre : F. Chesnais managed the exit of the US subsidiaries out of the Chapter 11 in the US 2014 From mid-2014, the new team relaunched game production and began implementation of a robust turnaround strategy. 9

10 : Turnaround Atari is a company implementing a turnaround phase. Atari owns iconic brands in the video game industry and can capitalize on new opportunities outside of the videogaming market Simplified organization (external studios, digital distribution ) Turnaround, improved financial structure Cap table simplified (Oranes reimbursed) Opportunities outside of the videogame industry casinos, TV, licensing March 2015, Atari is Back to Profitability 10

11 Today: A Simple and Very Efficient Structure Atari SA French listed entity on Euronext Paris Atari Europe 100%-owned subsidiaries Atari US Fred Chesnais, CEO, is the largest shareholder with approximately 22% of the Atari Group. A production team is based in New York City, with 3 rd party development studios in the US and in Europe. Products are primarily sold digitally, on a worldwide basis. The Atari group uses third parties to manufacture and distribute physical boxes. A streamlined and flexible cooperation structure based on a set of key partners. 11

12 Old Value Chain Integration of key functions; limited use of third party studios Rights Great dependence on physical distribution Prod / Dev Limited level of ancillary revenue (digital, licenses, merchandising, ) Publishing Distribution Atari is No Longer Operating Like This 12

13 Current Business Model Atari is a content production company aiming at maximizing the value of its brands and IP portfolio in the interactive entertainment industry Atari Capitalizes On: A huge IP portfolio Efficient production and operations Effective digital marketing management An experienced Management Team To Maximize Profits: Fixed costs are at the lowest levels and the production management is externalized Co-investments are favored with studios or third party Digital distribution is fully implemented and deployed 13

14 The New Value Chain Intensification of externalization Team The New Atari IPs Diversification of the distribution channel and sources of income Executive Production External Studios Digital Distribution Others (Casino,...) Digital Distribution Licensing Box distribution 14

15 3 Summary Financials / Cap Table 15

16 Successful financial turnaround Significant turnover growth Back to profitability Debt-free thanks to the July 2016 debt restructuring, save for a small 2020 convertible bond Positive shareholders equity 16

17 : Turnaround achieved ( million) Proforma Revenue 12,6 12,6 7,6 3,3 1,2 Current operating income 1,8 1,8 0,2 0,9 0,6 Operating income 0,4 0,4 1,5 1,3 (2,0) Net income (loss) 7,4 0,3 1,2 (2,5) (35,8) Shareholders' equity 2,3 (10,2) (13,1) (31,3) (34,9) Net financial debt (0,8) (13,3) (11,0) (24,8) (31,4) (Year end as at March 31) March 2013 to March 2016 : Revenue: From 1,2 M to 12,6 M From a net loss of (35,8) M to a net profit of 0,3 M Equity : From (34,9) M to + 2,3 M (proforma) From a net debt of (31,4) M to - 0,8 M (proforma) 17

18 Debt Repayment of July 2016 Alden loan of Euro 12.6 million repurchased for Euro 5.3 million Sources of funds (Euro 5.3 million): Euro 2.0 million in new shares issued to Financière Arbevel Euro 0.8 million in new shares issued to Alden Euro 2.5 million through a bridge loan with warrants purchased by Ker ventures (holding of F. Chesnais) and Alex Zyngier Atari has announced its intention to refinance the bridge loan by issuing shares 18

19 Full Year Consolidated Statements as of March 31, 2016 A positive net income for the second consecutive year. ( Million) 2015/ / /2014 Net revenue 12,6 7,6 3,3 Gross Margin 10,5 6,3 3,2 % of the net revenue 83,7% 83,4% 96,5% Current operating income 1,8 0,2 0,9 % of the net revenue 14,1% 2,3% 27,7% Operating income 0,4 1,5 1,3 Net income (loss) 0,3 1,2 (2,5) Net revenue: 12,6 M An increase of turnover of 66%, Current operating income: + 1,8 M R&D expenses: - 3,3 M Marketing costs: - 1,3 M Overhead costs: - 4,0 M Operating income: + 0,4 M Other operating expenses: - 1,3 M including 0,8 M for legal fees relating to Alden litigation. Net consolidated income: + 0,3 M Cost of debt: - 0,8 M Other financial income: + 0,1 M Impôt sur les sociétés : + 0,5 M 19

20 Full Year Consolidated Statements as of March 31, 2016 ASSETS ( million) March 31, 2016 March 31, 2015 Intangible assets 5,0 2,8 Property, plant and equipment 0,0 - Non-current financial assets 0,2 0,2 Deffered tax asset 0,5 - Non-current assets 5,7 3,0 Trade receivables 6,6 0,7 Current tax assets - 0,6 Other current assets 0,7 0,9 Cash and cash equivalents 1,2 3,7 Current assets 8,6 5,9 Total Assets 14,3 8,9 Development costs capitalized for 4,8 M including: RollerCoaster Tycoon World 3,6 M Trade receivables 6,6 M : Impact of the release of RCTW et Atari Vault in March 2016 Trade receivables licensing casino 2,3 M (see Other current liabilities) 20

21 Full Year Consolidated Statements as of March 31, 2016 EQUITY & LIABILITIES ( million) March 31, 2016 Proforma March 31, 2016 March 31, 2015 Total equity -10,2 2,3-13,0 Non-current financial liabilities 14,4 1,9 1,8 Other non-current liabilities 0,1 0,1 0,1 Non-current liabilities 14,5 2,0 1,9 Provisions for current contingencies and 1,2 1,2 1,2 Current financial liabilities 0,2 0,2 12,8 Trade payables 5,0 5,0 4,6 Current tax liabilities - - 0,3 Other current liabilities 3,6 3,6 1,1 Current liabilities 9,8 9,8 19,9 Total equity and liabilities 14,3 14,3 8,9 Equity: - 10,2 M as of March 31, ,3 M on a pro forma basis Net cash position: - 0,8 M after Alden Agreement Other current liabilities: 3,6 M including 1.8 M of deferred revenue of casino license fees. 21

22 A Very Significant Reduction of the Net Debt ( million) March 31, 2016 Proforma March 31, 2016 Net debt significantly reduced Net financial debt decreased from - 24,8 M in March 2014 to - 0,8 M in July 2016 after the Alden debt restructuring Debt-free save for a small 2020 convertible bond. March 31, 2015 March 31, 2014 OCEANEs (0,6) (0,6) (0,6) (0,6) OCEANEs 2019 (18,4) OCEANEs 2020 (1,3) (1,3) (1,2) - Others (0,2) (0,2) (0,7) Alden loan - (12,5) (12,1) (11,5) Gross financial debt (2,0) (14,5) (14,6) (30,5) Cash and cash equivalents 1,2 1,2 3,7 5,8 Net cash (Net financial debt) (0,8) (13,3) (11,0) (24,8) 22

23 Deferred Tax Assets Significant losses in the past: circa 735 million euros at the level of Atari SA, head of the tax consolidation. Potential tax savings: circa 245 million euros, subject to usual applicable tax limitations Potential tax savings: circa Euro 1.40 per share (calculated on the basis of shares outstanding as at June 30, 2016 less treasury shares) 23

24 Cap Table Simplified as at March 31,2016 All the Oranes have been reimbursed as at September 30, As at March 31, 2016 #Shares % Ownership Ker Ventures LLC ,8% F Chesnais Alex Zyngier ,6% Director Public ,7% Treasury shares ,0% TOTAL % Double voting rights: (no impact) Potential dilution : Océanes 2020 : 3,4 million shares ( 0,35 per oceane) Stock options : 5,5 million shares ( 0,20 per share) 24

25 Cap Table Simplified as at July 31, 2016 Cap Table after the Alden Agreement of July As at July 31, 2016 #Shares % Ownership Ker Ventures LLC ,6% F Chesnais Alex Zyngier ,5% Administrateur Financière Arbevel ,8% Public ,2% Treasury shares ,9% Double voting rights: (no impact) Potential dilution : TOTAL % Océanes 2020 : 3,4 million shares ( 0,35 per oceane) Stock options : 5,5 million shares ( 0,20 per share) Stock options : 2,5 million shares ( 0,17 per share) The warrants issued in connection with the shareholders' loan (5,1 million shares 0,17 per share) can be redeemed with the use of treasury shares or issuance of new shares 25

26 4 Products / Key Investment Considerations 26

27 Business Lines for The Atari Group will develop the following business lines: Video games Online gaming Connected devices Multimedia productions (TV, ) but only through co-production agreements Licensing 27

28 Products Additionnal games developpement under process, release expected in 2016 and High potential cross-media opportunities currently under evaluation. UNANNOUNCED SIMULATION TITLE 28

29 Broad, Diversified Platforms Strong positioning enables worldwide operations with a small team PC Download Digitaln Console Streaming Online Casino Advertising 29

30 Atari Iconic brand, with a worldwide appeal across generations Sector with strong growth and multiple opportunities. Much more than video games significant trans-media opportunities: Hardware (console, drones, ) TV (scripted series, unscripted series) Connected devices Web series Movies Comic books Merchandising Efficient business model: No fixed cost / Build portfolio value Highly skilled management, financially involved Non-operational assets (tax savings of up to Euro 1.40 per share) 30

31 Atari Thank you 31