PRESS RELEASE The BoD of the Digital Bros Group approves the draft financial statements for the year ending 30 June 2016 DIGITAL BROS GROUP: CONSOLIDATED GROSS REVENUES AT 110 MILLION (-9.1%) EBITDA AT 25 MILLION (+56.1%) NET PROFIT AT 12.5 MILLION COMPARED TO 9.1 MILLION REALIZED AT 30 th OF JUNE 2015 NET CASH AT THE END OF THE FISCAL YEAR AT 3.5 MILLION PROPOSED DIVIDEND OF 0.13 PER SHARE Consolidated Gross Revenues of 110 million, -9.1% from 121 million as at 30 th June 2015 EBITDA at 25.0 million from the 16.1 million as at 30th June 2015 EBIT at 20.8 million increased 69% from the 12.3 million realized at 30th June 2015 Pre-tax profit at 18.3 million compared to 14.2 million at 30 th June 2015 Net profit at 12.5 million +38% compared 9.1 million at 30 th June 2015 Net cash at the end of the fiscal year at 3.5 million compared to a net debt position of 8.3m as at 30th June 2015 Proposed dividend of 0.13 per share RESULTS FY 2015 2016 Amounts in EUR/000 30.06.2016 30.06.2015 Change Change % Revenues 110,192 121,244 (11,052) -9.1% EBITDA 25,095 16,076 9,020 56.1% EBIT 20,815 12,342 8,474 68.6% Pre-tax profit 18,338 14,254 4,085 28.7% Net profit 12,539 9,105 3,435 37.7% Milan, September 13th, 2016. The Board of Directors of the Digital Bros Group, a digital entertainment company listed in the Star segment of the Milan Stock Exchange, has approved today the Draft Financial Statement for fiscal year 2015-2016 (1st July 2015 30th June 2016).
The main results of the Digital Bros Group for FY 2015-2016, with comparative figures for the previous year are reported in the table below: Gross consolidated revenues of 110 million, -9.1% compared to 121 million of the previous fiscal year. EBITDA at 25 million increasing by 56.1% from 16 million on fiscal year 2014-2015. EBIT at 21 million growing by 68.9% compared to 12 million as at 30 June 2015. Pre-tax Profit at 18 million from 14 million as at 30 June 2015. Net profit equal to 12 million an increase compared to 9 million on fiscal year 2014-2015. PERFORMANCE BY BUSINESS SEGMENT During the year, the Group's organizational structure was redefined, from an organization based on distribution channels, international and Mobile Publishing, to an organization based on the type of published games, Premium and Free to Play. The organizational change was necessary to reflect the different mechanisms of production, product positioning, marketing and financial planning that the Free to Play games have against the traditional games (nowcalled Premium Games). For a comparison of economic performance information as at 30th June the results of the previous year were restated following the current breakdown to reflect the new organisational structure. Revenue breakdown by business segment at June 30, 2016 compared with the same period of the last year is as follows: Figures in EUR/000 Gross revenues Net revenues 2016 2015 Change 2016 2015 Change Development 1,736 1,565 171 10.9% 1,736 1,565 171 10.9% Free to Play 5,275 2,671 2,604 97.5% 5,275 2,671 2,488 97.5% Premium Games 83,204 92,190 (8,986) -9.7% 81,556 88,561 (7,005) -7.9% Italian Distribution 19,231 24,529 (5,298) -21.6% 17,958 23,044 (5,086) -22.1% Other project 746 289 457 158.1% 690 149 541 363.1% Total Revenues 110,192 121,244 (11,052) -9.1% 107,215 115,990 (8,775) -7.6% Although gross revenues declined, they were in line with expectations. This was due to lack of significant launches of new products which were postponed to the next fiscal year. On the other hand, revenues of the Free to Play segment have nearly doubled. The largest portion of the revenues realized by the Group came from the Premium Games segment. Here revenues declined by 8.9 million despite the sale of the rights of PAYDAY2 for 26.8 million. During the year, the only relevant launch of a new product has been Rocket League, distributed exclusively in the retail market starting from the last week of June and the sales of Portal Knights, launched in February in Early Access only on the Steam platform. There was a slight decrease in the revenues of Terraria while the large decrease has been in the sales coming from Sniper Elite V3 and PAYDAY2. The decrease in revenues in the Italian Distribution segment is determined by the significant decline in sales of the trading card game Yu-gi -Oh!, and also reflect an increase in gaming revenue distribution with the successful launch in the Italian market of the video game Metal Gear Solid V and PES 2016. Revenues of the Free to Play segment were 5.3 million, almost doubling from the 2.7 of the previous year. The videogame Battle Islands, developed by the subsidiary DR Studios Ltd. and launched in December 2013, contributed to revenues for the period of 2.5 million as a result of the release of the versions for all consoles in the Free to Play segment. Good performance from the console versions of the video game Gems of War which realized the greatest increase in revenues during the year. The table below shows the contribution to the Group's revenues and profit margins in the fiscal year 2014-2015 by business segment: EUR/000 Studios Free to Play Premium Publishing Italian Distribution Other Projects Holding Gross Revenues 1,736 5,275 83,204 19,231 746 0 110,192 EBITDA (250) (1,766) 34,479 705 (2,915) (5,158) 25,095 EBIT (867) (2,934) 33,263 (113) (3,190) (5,345) 20,815 Total
Cost of sales decreased by 26%, while operating costs increased by 11.6%, equal to 3.4 million, mainly due to the costs incurred related to the launch of Fantasfida for 3.1 million. EBITDA at 25 million, increasing by 56.1% compared to 16 million as at June 30th 2015. EBIT increased by 8.5 million, from 12.3 million to 20.8 million in this fiscal year. Pre-tax profit at 18.3 million compared to 14.2 million as at 30 of June 2015. Net profit at 12.5 million, an increase of 37.7% compared to 9.1 million as at 30 of June 2015. THE NET FINANCIAL POSITION The net financial position at 30 of June 2015 was positive 3.5 million, increasing by 11.8 million compared to the negative 8.3 million as at 30 June 2015. The change is due primarily to the increase in other current assets and financial liabilities of 27.1 million due to the Starbreeze A and the Starbreeze B shares held at the end of the fiscal year, the latter coming from the sales of PAYDAY2 rights. THE PARENT COMPANY DIGITAL BROS SPA On the 30 th of June the parent company Digital Bros S.p.A. realized gross revenues of 21 million, a decrease of 14.2% compared to 24.5 million realized in the previous fiscal year. EBITDA is negative 2.3 million, from negative 3.8 million of the previous fiscal year. EBIT amounted to negative 5.6 million, decreasing compared to positive 4.9 million of fiscal year 2014-2015 which benefited from 7.4 million dividends received from subsidiaries which has not occurred in the current fiscal year and the revaluation of the subsidiary 505 Games S.p.A. equal to 5.4 million. TREASURY SHARES According to Art. 2428 comma 2 n. 3 of the Italian Civil Code, Digital Bros S.p.A. at 30 June 2016 owns 130,247 treasury shares against the 400,247 owned as at 30 of June 2015. According to n.4 of the above-mentioned comma 2, the Company disposed 270,000 shares at an average price of 11.28 per share, for a total of 3.04 million. DIVIDEND The Board of Directors has decided to propose the distribution of dividend of 0.13 per share. The dividend will be paid out on December 14th, 2016 (record date December 13th), subject to Shareholders' resolution, excluding treasury shares held by clipping coupon number 8 on the 12th December 2016. CALLING OF THE ANNUAL GENERAL MEETING The Board of Directors has resolved to convene the Annual Shareholders General Meeting on the 28th October 2016 at 8.30 a.m.. The Shareholders approval will be requested: to approve the financial statements for the fiscal year 2015-2016; to propose the distribution of dividend of 0.13 per share, approve the remuneration report pursuant to article 123-ter of Legislative Decree no. 58/98 and appoint the statutory auditors. The Shareholders approval will also be requested: to authorize the Board of Directors, by the date of approval of the Financial Statements at June 30, 2017, to purchase and sale of own shares whose total cannot exceed 10% of share capital (equivalent to one million ordinary shares), in accordance with art.144 bis of the Issuers Regulation 11971/99. Any purchases, if authorized, shall be made at a price not higher than 20 per share and not lower than 0.40 per share, according with the laws and regulations of the Italian Stock Exchange and the Community provisions. The reasons of which Shareholders approval is requested are: business purposes such as, for example, exchange and / or barter to achieve strategic partnerships; investment purposes such as, for example, to be able to carry out operations for trading, hedging and arbitrage to intervene in the presence of abnormal fluctuations in the stock market or investment operations, liquidity in the service of any stock option plans that will be approved in the future. SIGNIFICANT EVENTS Significant events of the fiscal year 2014-2015: Digital Bros acquired 3,466,910 Starbreeze B shares for a value of 3.7 million and sold 4,667,601 shares for a value of 6.7 million. At the same time the Company acquired 2,068,133 ordinary shares of Starbreeze A for a total value of 2.3 million; During the months of August and September, Digital Bros SpA sold on the open market 270,000 treasury shares for a total value of 3.0 million Euros. At the end of the quarter, the number of treasury shares held is equal to 130,247 ordinary shares; On September 2, 2015 Digital Bros China (Shenzhen) Ltd. was established. The company is based in Shenzhen and and is focused on marketing and business development activities in the Chinese market in favour of The Group s companies. Share capital is equal to 100 thousand;
On 11 September 2015 the Group signed a commitment to subscribe to a capital increase of the Italian game developer Ovosonico S.r.l. After the fully subscribed capital increase of 720 thousand, Digital Bros S.p.A. will own 49% of the shares as December 31, 2016. The company is based in Varese, and has 25 employees. The company has developed games such as Murasaki Baby, a multi award-winning videogame published by Sony Computer Entertainment. During the period 420 thousand was paid, of which 28,583 as capital and 391,417 as additional-paid-in capital, this is equal to 28.58% of the share capital; On January 8 2016, the 133 W Broadway, Inc. was established. The Company, which is fully owned by Digital Bros S.p.A., is based in the United States of America and has a company stock capital of USD 100 thousand. In February the Company bought the building which is the headquarters of Pipeworks, Inc. taking over the lease; On January 11 2016, the Shareholders Meeting of 505 S.r.l. converted the Company into a limited company form. The company name is 505 Games S.p.A. The registered office, the terms and the financial years-end remain unchanged and the Board of Directors has been confirmed until its scheduled expiration. The Shareholders meeting has also increased the share capital by 900,000 free of charge, from 100,000 to 1,000,000 through the issue of n. 900,000 shares for a nominal value of 1, funded through partial retained earnings; On January 13 2016, the Digital Bros Holdings Ltd. was established. The Company, which is fully owned by Digital Bros S.p.A., is based in the United Kingdom and has a company stock capital of GBP 100 thousand. The Company will be the sub-holding company that will own the shares of some British companies owned by the Group; On May 30 2016, Digital Bros S.p.A. sold back to Starbreeze AB the rights of PAYDAY 2, with the exclusion of the rights for the PAYDAY2 console versions. The upfront compensation has been of 249.3 million SEK, equivalent to USD 30 Million, and has been paid through the issue of new 10,934,211 Starbreeze B-shares. SIGNIFICANT EVENTS AFTER YEAR-END On July 1 st 2016, Digital Bros sold 2,841,321 Starbreeze A shares for a value of 6,1 million, securing a gain capital of 3.1 million. On July 1 st 2016, Digital Bros acquired 2,841,321 Starbreeze B shares for a value of 6,1 million. On August 26 2016, Digital Bros sold 2,000,000 Starbreeze B shares for a value of 4,9 million, securing a capital gain of 699 thousand giving the buyer the opportunity to buy by June 30, 2017, the same amount of shares at the same price of 22.8 SEK. OUTLOOK The investment plan that the Group has previously disclosed, which has seen in the last 24 months the development of numerous new products, will begin to generate revenues starting from the first quarter of the next fiscal year. In particular, the launch of Assetto Corsa and Abzu for the Premium Games segment and Hawken and Prominence Poker for Free to Play segment. During the period PC and console versions of Portal Knights will be released in the Premium Games segment and the natural evolution of the successful videogames Battle Island, Battle Island Commander, will be released on console and Mobile versions for the Free to Play segment. Revenues of the Italian Distribution segment will decrease compared to the previous year, but the segment will benefit from significant cost savings as a result of cost containment policy already implemented in the current fiscal year. The Studio segment will continue working on projects started during the previous fiscal year and it is expected will still rely on significant contracts with customers outside the Group. The Daily Fantasy Sports Fantasfida will continue to have a negative profitability in the next fiscal year, although to a lesser extent than in the year of launch. Expectations for the next fiscal year are therefore positive, but it will not be possible to replicate the operating margin which have been realized during this fiscal year, which were also positively impacted by the sales of PAYDAY 2 rights. The higher expectations come from the Free to Play segment which is expected to grow significantly in terms of both revenues and operating margins during the upcomingfiscal year. The net financial position, which became positive thanks to the sales of PAYDAY2 rights, is expected to remain stable over the next year also due to the investments in new products, in particular Overkill's The Walking Dead which will be released in the fiscal year 2018.
ART. 154-BIS OF THE CONSOLIDATED FINANCE ACT As required by paragraph 2, Art, 154-bis of the Consolidated Finance Act, the financial reporting officer of the Digital Bros Group, Stefano Salbe, declares that the information contained in this press release corresponds to the Group's records, ledgers and accounting entries. Digital Bros - www.digitalbros.com The Digital Bros Group is listed on the Milan Stock Exchange since October 2000 and active in the videogame field since 1989. A close watcher of market trends, Digital Bros operates in the following different business areas: Distribution of video games and trading cards in Italy: through the brands Halifax, Game Service and Game Entertainment; Publishing and international publishing of video games: through the brand 505 Games active in publishing and international distribution, physical as well as digital, through direct operations in Los Angeles, London, Munich, Lyon and Madrid and deals with the main digital market places; Social Gaming: through the brand 505 Mobile the group operates as international publisher of videogames for the platforms Facebook, Apple, Amazon, Android and Windows Phone. Studios: the Group operates in the development of video games through the studio Pipeworks Inc. Contacts: Digital Bros SpA Stefano Salbe CFO tel. 02 413031
FINANCIAL STATEMENTS DIGITAL BROS GROUP CONSOLIDATED BALANCE SHEET AT 30 JUNE 2016 Thousands of Euro 30 June 2016 30 June 2015 Change Non-current assets 1 Property, plant and equipment 7,032 4,841 2,191 45.3% 2 Investment property 0 0 0 0.0% 3 Intangible assets 10,458 7,946 2,512 31.6% 4 Equity investments 898 1,274 (376) 0.0% 5 Non-current receivables and other assets 1,056 1,058 (2) -0.2% 6 Deferred tax assets 2,619 2,240 379 16.9% Total non-current assets 22,064 17,359 4,704 27.1% Non-current liabilities 7 Employee benefits (529) (486) (43) 8.8% 8 Non-current provisions (36) (170) 134-79.1% 9 Other non-current payables and liabilities (252) (722) 470-65.1% Total non-current liabilities (817) (1,378) 561-40.7% Net working capital 10 Inventories 11,933 12,881 (948) -7.4% 11 Trade receivables 34,840 36,350 (1,509) -4.2% 12 Tax credits 2,019 2,466 (447) -18.1% 13 Other current assets 5,034 6,148 (1,115) -18.1% 14 Trade payables (21,712) (26,929) 5,217-19.4% 15 Taxes payable (6,211) (3,029) (3,182) n.m. 16 Current provisions 0 0 0 n.m. 17 Other current liabilities (2,312) (1,726) (586) 33.9% Total net working capital 23,591 26,161 (2,570) -9.8% Capital and reserves 18 Share capital (5,644) (5,644) 0 n.m. 19 Reserves (20,804) (19,417) (1,387) 7.1% 20 Treasury shares 390 1,199 (809) -67.5% 21 Profit (losses) carried forward (22,290) (9,947) (12,343) n.m. Total capital and reserves (48,348) (33,809) (14,539) 43.0% Total net assets (3,511) 8,333 (11,844) n.m. 22 Cash and cash equivalents 2,785 4,339 (1,554) -35.8% 23 Short-term payables to banks (25,929) (12,738) (13,191) n.s. 24 Other current financial assets and liabilities 28,913 1,685 27,228 n.s. Current net financial debts 5,769 (6,714) 12,483 n.m. 25 Non-current financial assets 1,195 0 1,195 0.0% 26 Non-current payables to banks (1,558) (1,619) 61-3.7% 27 Other non-current financial liabilities (1,895) 0 (1,895) 0.0% Non-current net financial debts (2,258) (1,619) (639) 39.5% Total net financial debts 3,511 (8,333) 11,844 n.m.
DIGITAL BROS GROUP CONSOLIDATED INCOME STATEMENT AT 30 June 2016 Thousands of Euro 30 June 2016 30 June 2015 Change 1 Gross revenues 110,192 102.8% 121,244 104.5% (11,052) -9.1% 2 Revenue adjustments (2,977) -2.8% (5,254) -4.5% 2,278-43.3% 3 Total net revenues 107,215 100.0% 115,990 100.0% (8,775) -7.6% 4 Purchase of goods for resale (21,193) -19.8% (34,104) -29.4% 12,911-37.9% 5 Purchase of services for resale (5,580) -5.2% (5,374) -4.6% (207) 3.8% 6 Royalties (23,851) -22.2% (28,328) -24.4% 4,476-15.8% 7 Change in inventories of finished products (948) -0.9% (1,898) -1.6% 950-50.1% 8 Total cost of goods sold (51,572) -48.1% (69,704) -60.1% 18,132-26.0% 9 Gross profit (3+8) 55,643 51.9% 46,286 39.9% 9,357 20.2% 10 Other income 5,714 5.3% 2,295 2.0% 3,419 n.m. 11 Cost of services (13,425) -12.5% (11,660) -10.1% (1,766) 15.1% 12 Rent and leasing (1,555) -1.5% (1,548) -1.3% (7) 0.5% 13 Payroll costs (19,861) -18.5% (17,926) -15.4% (1,935) 10.8% 14 Other operating expenses (1,421) -1.3% (1,371) -1.2% (50) 3.6% 15 Total operating expenses (36,262) -33.8% (32,505) -28.0% (3,758) 11.6% 16 EBITDA (9+10+15) 25,095 23.4% 16,076 13.9% 9,020 56.1% 17 Depreciation and amortization (3,788) -3.5% (2,920) -2.5% (868) 29.7% 18 Provisions 0 0.0% 0 0.0% 0 n.m. 19 Asset impairment charge (1,080) -1.0% (1,455) -1.3% 376-25.8% 20 Impairment reversal 588 0.5% 641 0.6% (53) -8.3% Total depreciation, 21 amortization and impairment (4,280) -4.0% (3,734) -3.2% (547) 14.6% 22 EBIT (16+21) 20,815 19.4% 12,342 10.6% 8,474 68.6% 23 Financial income and interest income 3,093 2.9% 3,939 3.4% (847) -21.5% 24 Interest expense and financial expense (5,570) -5.2% (2,027) -1.7% (3,545) n.m. 25 Net financial result (2,477) -2.3% 1,912 1.6% (4,388) n.m. 26 Profit before taxes (22+25) 18,338 17.1% 14,254 12.3% 4,085 28.7% 27 Current taxes (6,644) -6.2% (3,897) -3.4% (2,746) n.m. 28 Deferred taxes 845 0.8% (1,252) -1.1% 2,097 n.m. 29 Total taxes (5,799) -5.4% (5,149) -4.4% (650) 12.6% 30 Net profit (26+29) 12,539 11.7% 9,105 7.8% 3,435 37.7% Earnings per share: 33 Basic earnings per share (in EUR) 0,90 0,67 0,23 34.9% 34 Diluted earnings per share (in EUR) 0,90 0,67 0,23 34.9%
DIGITAL BROS GROUP CONSOLIDATED INCOME STATEMENT OF THE FOURTH QUARTER OF FISCAL YEAR 2015/2016 Thousands of Euro 4 quarter 2015/2016 1 Gross revenues 48,911 2 Revenue adjustments (297) 3 Total net revenues 48,614 4 Purchase of goods for resale (4,820) 5 Purchase of services for resale (1,142) 6 Royalties (9,203) 7 Change in inventories of finished products 216 8 Total cost of goods sold (14,950) 9 Gross profit (3+8) 33,664 10 Other income 1,347 11 Cost of services 12 Rent and leasing 13 Payroll costs 14 Other operating expenses 15 Total operating expenses (3,578) (396) (5,260) (286) (9,520) 16 EBITDA (9+10+15) 25,492 17 Depreciation and amortization (990) 18 Provisions 0 19 Asset impairment charge (655) 20 Impairment reversal 0 21 Total depreciation, amortization and impairment (1,645) 22 EBIT (16+21) 23,847 23 Financial income and interest income 519 24 Interest expense and financial expense (4,349) 25 Net financial result (3,830) 26 Profit before taxes (22+25) 20,017 27 Current taxes 28 Deferred taxes 29 Total taxes (5,900) (289) (6,189) 30 Net profit (26+29) 13,828
DIGITAL BROS GROUP CONSOLIDATED INCOME STATEMENT SEPARATE OF THE FOURTH QUARTER OF FISCAL YEAR 2015/2016 Thousands of Euro 4 quarter 2015/2016 net of PAYDAY 2 rights sold back PAYDAY 2 Rights sold back 1 Gross revenues 22,079 26,832 2 Revenue adjustments (297) 0 3 Total net revenues 21,782 26,832 4 Purchase of goods for resale (4,820) 0 5 Purchase of services for resale (1,142) 0 6 Royalties (5,807) (3,396) 7 Change in inventories of finished products 216 0 8 Total cost of goods sold (11,553) (3,396) 9 Gross profit (3+8) 10,229 23,436 10 Other income 1,347 0 11 Cost of services 12 Rent and leasing (3,578) 0 13 Payroll costs (396) 0 14 Other operating expenses (5,260) 0 15 Total operating expenses (286) 0 (9,520) 0 16 EBITDA (9+10+15) 2,057 23,436 17 Depreciation and amortization 18 Provisions (990) 0 19 Asset impairment charge 0 0 20 Impairment reversal (655) 0 Total depreciation, 21 amortization and impairment 0 0 (1,645) 0 22 EBIT (16+21) 412 23,436 23 Financial income and interest income 24 Interest expense and financial expense 519 0 25 Net financial result (591) (3,758) (72) (3,758) 26 Profit before taxes (22+25) 340 19,678 27 Current taxes 28 Deferred taxes 279 (6,179) 29 Total taxes (289) 0 (10) (6,179) 30 Net profit (26+29) 330 13,499
DIGITAL BROS GROUP CONSOLIDATED CASH FLOW STATEMENT AT 30 JUNE 2016 Thousands of Euro 30 June 2016 30 June 2015 A. Opening net financial debts (8,333) (21,909) B. Cash flow from operating activities Group's share of net profit (loss) for the year 12,539 5,588 Depreciation, amortization and provisions: Provisions and impairment losses 0 332 Amortization of intangible assets 3,117 1.849 Amortization of tangible assets 671 334 Net change in other provisions (134) (17) Net change in employee benefit provisions 43 16 Net change in other non-current liabilities (470) 615 SUBTOTAL B. 15,766 8,717 C. Change in net working capital Inventories 948 1,898 Trade receivables 1,510 5,154 Tax credits 447 1,352 Other current assets 1,114 (2,782) Trade payables (5,217) 4,895 Taxes payable 3,182 (999) Current provisions 0 0 Other current liabilities 586 279 SUBTOTAL C. 2,570 9,797 D. Cash flow from investing activities Investments in intangible assets (5,629) (7,775) Investments in property, plant and equipment (2,862) (1,470) Investments in financial fixed assets (1) 117 SUBTOTAL D. (8,492) (9,128) E. Cash flow from financing activities Capital increases 0 0 SUBTOTAL E. 0 0 F. Movements in consolidated capital and reserves Dividends paid (1,818) (960) Change in treasury shares held 809 375 Increases (decreases) in other components of capital and reserves 3,009 (92) 2,000 (677) SUBTOTAL F. G. Cash flow for the period (B+C+D+E+F) 11,844 13,576 H. Final net financial debts (A+G) 3,511 (8,333)
SEGMENT REPORTING CONSOLIDATED INCOME STATEMENT AT 30 June 2015 Thousands of Euro Studio Free to Play Premium Publishing Distribution Italy Other Projects Holding Total 1 Gross revenues 1,736 5,275 83,204 19,231 746 0 110,192 2 Revenue adjustments 0 0 (1,648) (1,273) (56) 0 (2,977) 3 Total net revenues 1,736 5,275 81,556 17,958 690 0 107,214 4 Purchase of goods for resale 0 0 (8,135) (13,058) 0 0 (21,193) 5 Purchase of services for resale (468) (1,236) (3,610) (131) (135) 0 (5,580) 6 Royalties 0 (2,767) (20,975) 0 (109) 0 (23,851) 7 Change in inventories of finished products 0 0 (721) (227) 0 0 (948) 8 Total cost of goods sold (468) (4,003) (33,441) (13,416) (244) 0 (51,572) 9 Gross profit (3+8) 1,268 1,272 48,115 4,542 446 0 55,643 10 Other income 4,374 858 186 68 228 0 5,714 11 Cost of services (342) (779) (6,191) (1,981) (2,849) (1,283) (13,425) 12 Rent and leasing (95) (65) (596) (58) (20) (721) (1,555) 13 Payroll costs (5,333) (2,958) (6,591) (1,646) (647) (2,686) (19,861) 14 Other operating expenses (122) (93) (445) (220) (73) (468) (1,421) 15 Total operating expenses (5,892) (3,895) (13,823) (3,905) (3,589) (5,158) (36,262) 16 EBITDA (9+10+15) (250) (1,765) 34,478 705 (2,915) (5,158) 25,095 17 Depreciation and amortization (601) (1,330) (1,216) (179) (275) (187) (3,788) 18 Provisions 0 0 0 0 0 0 0 19 Asset impairment charge (16) (425) 0 (639) 0 0 (1,080) 20 Impairment reversal 0 588 0 0 0 0 588 Total depreciation, 21 amortization and impairment (617) (1,167) (1,216) (818) (275) (187) (4,280) 22 EBIT (16+21) (867) (2,932) 33,262 (113) (3,190) (5,345) 20,815
DIGITAL BROS S.P.A BALANCE SHEET AT 30 JUNE 2016 EUR/000 30 June 2016 30 June 2015 Change Non-current assets 1 Property, plant and equipment 3,357 3,335 22 0.6% 2 Investment property 0 0 0 n.m. 3 Intangible assets 399 322 77 23.8% 4 Equity investments 13,948 13,931 17 0.1% 5 Non-current receivables and other assets 644 644 0 n.m. 6 Deferred tax assets 531 517 14 2.8% Total non-current assets 18,879 18,749 130 0.7% Non-current liabilities 7 Employee benefits (495) (442) (53) 12.0% 8 Non-current provisions (36) (171) 135-79.0% 9 Other non-current payables and liabilities (252) (133) (119) 0.0% Total non-current liabilities (783) (746) (37) 5.0% Net working capital 10 Inventories 7,013 9,266 (2,253) -24.3% 11 Trade receivables 3,166 5,445 (2,279) -41.9% 12 Due from subsidiaries 33,155 14,131 19,024 n.m. 13 Tax credits 741 471 270 57.3% 14 Other current assets 510 499 11 2.2% 15 Trade payables (1,939) (2,104) 165-7.8% 16 Due to subsidiaries (5,407) (2,031) (3,376) n.m. 17 Taxes payable (3,965) (286) (3,679) n.m. 18 Current provisions (3,808) (1,491) (2,317) n.m. 19 Other current liabilities (797) (907) 110-12.1% Total net working capital 28,669 22,993 5.676 24.7% Capital and reserves 20 Share capital (5,644) (5,644) 0 0.0% 21 Reserves (20,129) (18,172) (1,957) 10.8% 22 Treasury shares 390 1,199 (809) -67.5% 23 Profit (losses) carried forward (3,323) (7,214) 3,891 n.m. Total capital and reserves (28,706) (29,831) 1,125-3.8% Total net assets 18,059 11,165 6,894 61.7% 24 Cash and cash equivalents 577 1,780 (1,203) -67.6% 25 Short-term payables to banks (22,900) (12,727) (10,173) 79.9% 26 Other current financial liabilities 5,877 1.401 4,476 n.m. Current net debt (16,446) (9,546) (6,900) 72.3% 27 Non-current financial assets 0 0 0 n.m. 28 Non-current payables to banks (1,558) (1,619) 61-3.7% 29 Other non-current financial liabilities (55) 0 (55) n.m. Non-current net debt (1,613) (1,619) 6-0.4% Total net debt (18,059) (11,165) (6,894) 61.7%
DIGITAL BROS S.P.A. INCOME STATEMENT AT 30 JUNE 2016 EUR/000 30 June 2016 30 June 2015 Change 1 Gross revenues 21,025 105.8% 24,538 106,4% (3.513) -14,3% 2 Revenue adjustments (1,156) -5.8% (1,485) -6,4% 330-22,2% 3 Total net revenues 19,869 100.0% 23,053 100,0% (3.184) -13,8% 4 Purchase of goods for resale (13,227) -66.6% (17,731) -76,9% 4.502-25,4% 5 Purchase of services for resale 0 0.0% 0 0,0% 0 0,0% 6 Royalties 0 0.0% 0 0,0% 0 0,0% 7 Change in inventories of finished products (2,253) -11.3% (541) -2,3% (1.712) n.m. 8 Total cost of goods sold (15,480) -77.9% (18,272) -79,3% 2.792-15,3% 9 Gross profit (3+8) 4,389 22.1% 4,781 20,7% (392) -8,2% 10 Other income 3,439 17.3% 1,824 7,9% 1.615 88,5% 11 Cost of services (3,752) -18.9% (3,484) -15,1% (267) 7,7% 12 Rent and leasing (779) -3.9% (825) -3,6% 47-5,6% 13 Payroll costs (4,884) -24.6% (5,474) -23,7% 590-10,8% 14 Other operating expenses (683) -3.4% (667) -2,9% (18) 2,5% 15 Total operating expenses (10,098) -50.8% (10,450) -45,3% 352-3,4% 16 EBITDA (9+10+15) (2,270) -11.4% (3,845) -16,7% 1.575 n.m. 17 Depreciation and amortization (373) -1.9% (359) -1,6% (14) 3,8% 18 Provisions 0 0.0% 0 0,0% 0 0,0% 19 Asset impairment charge (3,001) -15.1% (3,825) 7,1% 824 n.m. 20 Impairment reversal 0 0.0% 12,920 32,4% (12.920) n.m. Total depreciation, amortization and 21 impairment (3,374) -17.0% 8,736 37,9% (12.110) n.m. 22 EBIT (16+21) (5,644) -28.4% 4,891 21,2% (10.535) n.m. 23 Interest income 2,132 10.7% 2,353 10.2% (221) -9,4% 24 Interest expense (916) -4.6% (1,035) -4.5% 119-11,5% 25 Net interest income (expense) 1,216 6.1% 1,318 5.7% (102) n.m. 26 Profit before taxes (22+25) (4,428) -22.3% 6,209 26.9% (10.637) n.m. 27 Current taxes 820 4.1% 1,144 5.0% (324) -28,3% 28 Deferred taxes (87) -0.4% (407) -1.8% 319-78,6% 29 Total taxes 733 3.7% 737 3.2% (4) -0,6% 30 Net profit (26+29) (3,695) -18.6% 6,946 30.1% (10.641) n.m.
DIGITAL BROS S.P.A. CASH FLOW STATEMENT AT 30 JUNE 2016 EUR/000 30 giugno 2016 30 giugno 2015 A. Initial net cash and cash equivalents (11,165) (20,498) B. Cash flow from operating activities Net profit (loss) for the year (3,695) 6,946 Provisions and non-monetary costs: Provisions and impairment of assets 639 407 Intangible fixed assets 146 95 Tangible fixed assets 227 264 Net change to other provisions (135) (34) Net change to employee benefits 53 (59) Net change in other non-current liabilities 119 0 SUBTOTAL B. (2,646) 7,621 C. Changes in net working capital Inventories 2,253 541 Trade receivables 1,640 1,117 Due from subsidiarie (19,024) 11,262 Tax credits (270) 1,734 Other current assets (11) 112 Trade payables (165) 193 Due to subsidiaries 3,376 (5,969) Tax payables 3,679 (634) Current provisions 2,317 (7,028) Other current liabilities (110) (218) SUBTOTAL C. (6,315) 1,109 D. Cash flow from investing activities Net investments in intangible fixed assets (223) (219) Net investments in tangible fixed assets (249) (98) Net investments in financial fixed assets (31) 1,210 SUBTOTAL D. (503) 892 E. Cash flow from financing activities Capital increases 0 0 SUBTOTAL E. 0 0 F. Changes in shareholders equity Dividends distributed (1,818) (960) Changes in treasury shares held 809 375 Increases (decreases) in other items of shareholders equity 3,579 296 SUBTOTAL F. 2,570 (289) G. Period cash flow (B+C+D+E+F) (6,894) 9,333 H. Closing net financial position (A+G) (18,059) (11,165)