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Investor FAQ

Starbreeze Investor Relations

Investor Relations Frequently Asked Questions

Index
  1. Corporate information
  2. Financial Information
  3. The Starbreeze Share
  4. Reconstruction
  5. Other

 

Corporate Information

Where Can I find more information about the company?

You can find more information about the company on our website, and in our investor presentations.

 

 

Financial Information

Who are the auditors of Starbreeze?

The auditors for Starbreeze are PWC.

 

Where can I find the latest Annual Report?

The 2016 Annual Report can be found here: https://www.starbreeze.com/sbz-media/2014/06/Starbreeze_Arsredovisning_2016.pdf

 

What’s Starbreeze financial year?

Starbreeze financial year runs from January to December.

 

Does Starbreeze release quarterly reports?

Yes, you can find the latest quarterly reports here: https://www.starbreeze.com/investor-relations/financial-reports/

 

The Starbreeze Share

Where are Starbreeze shares listed?

Starbreeze shares are listed on Nasdaq Stockholm Main Market.

 

Starbreeze changed lists from Nasdaq Stockholm First North Premiere to the Main Market on October 2nd, 2017. More information here: https://www.starbreeze.com/2017/09/starbreeze-approved-for-listing-on-nasdaq-stockholm/

 

What is the Starbreeze ticker and ISIN code?

Starbreeze is traded on Nasdaq Stockholm Main Market, under the tickers STAR A and STAR B with the ISIN codes SE0007158928 (A share) and SE0005992831 (B share)

 

Where can I follow the Starbreeze share?

 

What is the difference between the A and B share?

The A-share carries ten (10) votes, and the B-share one (1). Otherwise, Class A shares and Class B shares carry equal rights to a share in the Starbreeze assets and profits.

 

When was Starbreeze first listed on Nasdaq First North?

Starbreeze was first listed on Nasdaq First North May 28th, 2014.

 

Recontruction 

Why did you apply for reconstruction?

The decision is based on shortfall of cash and is deemed necessary to give the Company the time needed to negotiate for a long-term financial solution and implement operational and organizational changes.

 

Why did Starbreeze end up in reconstruction?

As we announced on November 23, lower sales revenue for OTWD has led the board to initiate a cost-cutting program. On November 29, we lowered the price of OTWD, which we expected would have an impact on sales primarily in the US / Europe. In the short term, the expected effect was less than projected. This means that short-term cash flow is adversely affected for the company. Despite initiated cost savings, we are unable to fully counteract the loss of revenue.

 

In the past 2 years, Starbreeze has been in an investment phase and thus dependent on ongoing funding. When the company was listed on Nasdaq Stockholm, in October 2017, we communicated financial targets, which included the company being profitable at EBITDA level from Q4 2018 when OTWD was to be launched.

 

You stated that you had going concern in the interim report for Q3 2018, what has changed?

Going concern for Q3 was based on the 12-month forecast we had at the time. With the revised forecast, based on actual outcomes, we have now adjusted the revenue projections, and despite initiated cost savings we fail to counteract the loss of revenue, which resulted in expected liquidity shortage in January 2019.

 

You have submitted your application to the District Court, what happens next?

We are awaiting the district court’s approval of the reconstruction and that they appoint our recommended Administrator Lars Söderqvist, which is expected to be completed during the day.

 

Then, the reconstruction work is initiated under the direction of the administrator. The company’s board and management have unchanged responsibility for the company and its operations.

 

What happens to the listing of the share?

The company has an ongoing dialogue with Nasdaq Stockholm and the stock continues to be traded as usual but under the observation listing.

 

How likely is reconstruction to be successful?

We believe that the reconstruction has good prospects for success, otherwise the application would not have been submitted.

 

How long can you be under reconstruction?

We do this in order to conduct negotiations on a long-term financial solution and implement operational and organizational changes. Reconstruction is granted for three months at a time.

 

What if it does not succeed?

We have initiated this process and have good faith in reaching a long-term financial solution while also conducting operational and organizational changes.

 

Why will you succeed in reconstruction?

We apply for reconstruction due to shortfall of cash. There are significant values ​​in the company. We believe that the reconstruction has good prospects for success, otherwise the application would not have been submitted.

 

Who are your lenders?

The largest lenders are Nordea, Acer and Smilegate.

 

How big are your debts?

The long-term debt per 2018-09-30 amounted to 512 MSEK and short-term debt amounted to 97 MSEK. The exact debt on December 3 that will be included in the reconstruction will be determined in the coming weeks.

 

Who are you negotiating with?

We have submitted an application for reconstruction today. Negotiations will be held with all major lenders, ie Nordea, Acer and Smilegate, in order to find a long-term financial solution for the company.

 

How long do you expect the negotiations to take?

We expect to be able to conduct the negotiations during the reconstruction period. Reconstruction is granted for three months at a time.

 

What does operational and organizational change mean?

We have already said that we are working to reduce our costs and focus on core business. This means that we will take action that reduces our costs, especially in areas that are not part of our core business. We carry out the reconstruction with the Administrator and the process will indicate what actions will be taken. We will tell you what actions we take as they take place.

 

 

Change of CEO

Why does Starbreeze change the CEO?

The Board believes that the company in this phase needs a new leadership.

 

Is the board and CEO in a disagreement?

The Board and Bo Andersson have mutually agreed on this action.

 

What compensation does he receive?

The notice period is a maximum of 9 months according to agreement. As announced, the CEO will resign immediately.

 

Why did not you not change CEO when you announced the cost savings on November 23?

We communicate decisions once they have been taken.

 

Will Bo stay working within the company?

He will leave his position immediately.

 

Why does Bo leave the board?

It was a personal decision; the board received his resignation. The company cannot speculate as to why.

 

Why does Kristofer Arwin leave the board?

It was a personal decision; the board received his resignation. The company cannot speculate as to why

 

Why did you appoint Mikael Nermark as CEO?

Mikael Nermark is the company’s deputy CEO and has worked at Starbreeze since 2009 and is a strong leader internally. He has been the CEO of the company once before where he took the company through a restructuring.

 

 

Continued business

What happens to PAYDAY / OTWD / Crossfire, etc?

The purpose of the reconstruction is to create conditions for taking the company further. Now the reconstruction work begins under the direction of the administrator. The company needs to strengthen its financial position and take operational and organizational changes to focus on core business and has now initiated several parallel processes to do so. We will communicate on this further as decisions are made. The company’s board and management have unchanged responsibility for the company and its operations.

 

 

Financing

How long will the money last?

The company’s existing cash is estimated to last to January, where the reconstruction will give us the time needed to make negotiations for a long-term financial solution, as well as take operational and organizational measures that reduce our costs.

 

Will suppliers be paid for outstanding claims?

Suppliers are not paid for work and materials for the period until the application is submitted. On the other hand, suppliers will be paid for work done during the reconstruction period.

 

Is the objective of positive EBITDA for Q4 missing and the target of reaching 2 billion in revenue in 2020?

The financial targets for Q4 2018 and 2020 no longer applies.

 

Are you considering opportunities to strengthen funding with for example new issues?

It is one of several things we evaluate as possibilities for long term financing, but any decisions will be pending the process now initiated.

 

The cost reduction program

How far have you arrived with the program?

We have identified several possible ways of lowering costs and also initiating multiple processes.

 

How much should the costs be reduced?

We expect significant cost savings. Starbreeze will focus on its core business, which means that we primarily look beyond what is not considered core business.

 

What is core business?

Game development is of course central to us where we have internal development and games developed by our external studios.

 

Is VR core business?

Major parts of our VR team recently moved to StarVR, which is a sign that VR technology development is not part of our core business.

 

Is there more than VR that is not a core business?

We will review the company’s entire cost base and structure and communicate on any changes as they take place.

 

Other Q&A:s