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STRATEGY PRESENTATION 27 NOVEMBER 2018 1

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Page 1: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

STRATEGY PRESENTATION27 NOVEMBER 2018

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Page 2: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

EXPERIENCED AND MOTIVATED MANAGEMENT TEAM

FOCUS HOME INTERACTIVE STRATEGY | DIRECTOR’S COMMITMENT

▪ JOHN BERT CHIEF OPERATING OFFICER▪ THOMAS BARRAU NEW MEMBER OF THE MANAGEMENT BOARD▪ VINCENT CHATAIGNIER BUSINESS DEVELOPMENT DIRECTOR▪ AURELIE RODRIGUES SALES DIRECTOR▪ DESSIL BASMADJIAN CREATIVE DIRECTOR

NOMINATIONS

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Page 3: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

OUR PROVEN MODEL

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Page 4: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

DEVELOPMENT STUDIOS

PROJECTSELECTION

PRODUCTIONFOLLOW-UP

DIGITAL & OFFLINE MARKETING

SALES

PUBLISHING

Retail & Digital platforms

Fewer than 1%of projects selected

Nearly

100 distributorsworldwide

Over 50 production staff

Over 290 digital promotions in 2017

DESIGN DISTRIBUTION

A PROVEN MODEL

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Page 5: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

A PROVEN MODEL| GENERATING VALUE FROM HIGH-POTENTIAL LICENCES

ORIGINALGAMING

CONCEPTS

FARMING SIMULATOR 19

SPINTIRES: MUDRUNNER AMERICAN WILDS

NEWBRANDS

VAMPYR

POPULARLICENSES

CALL OF CTHULHU

SPACE HULK: DEATHWINGTHE SURGE

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Page 6: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

A PROVEN MODEL | DELIVERING RESULTS

43

69,275,6 75,9

100+

2014 2015 2016 2017-2018 2018-2019e

SALES(IN €M)

12 months

+ 3 months

REVENUE

CONSISTENT GROWTH IN SALES

6 MILLION GAMES SOLD IN 2018 VS

4 MILLION IN 2014

AVERAGE PRICE UNIT INCREASE: >30% VS 2014

A CAGR OF REVENUE: +22%

1

89,9

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Page 7: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

20,2

32,0

43,749,0

8,3

2014 2015 2016 2017-2018

DIGITAL SALES(IN €M)GLOBAL REVENUE

INCREASED BOTH FOR RETAIL AND DIGITAL

DISTRIBUTION

35%

65%

SPLIT RETAIL/DIGITAL September 30, 2018*

Retail Digital

A PROVEN MODEL | DELIVERING RESULTS

212

months

57,3

+3 months

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Page 8: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

35,5

56,564,9 67,1

12,7

2014 2015 2016 2017-2018

EVOLUTION OF INTERNATIONAL REVENUES (IN €M)

INTERNATIONAL REVENUE

10%

90%

SPLIT FRANCE/INTERNATIONALMarch 31, 2018*

France International

312

months

+3 months

A PROVEN MODEL | DELIVERING RESULTS

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Page 9: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

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8,9 9,2 9,5

2014 2015 2016 2017-2018

EVOLUTION OF OPERATING PROFIT(IN €M)

CAGR OF OPERATING PROFIT: +12,3%4

A PROVEN MODEL | DELIVERING RESULTS

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Page 10: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

A PROVEN MODEL | LOOKING AT THE PEERS

43,8

69,2 75,689,9 100+

19,5 22,8 31,952,7

473,8

19,4

64,6 69,0 84,5100+

116,0 107,2

135,4

70,4

163,3

2014 2015 2016 2017 2018e

PEERS REVENUES* FROM 2014 TO 2018 (IN €M)

Focus Home Interactive THQ Nordics Paradox Digital Bros

*Sources: FactSet as of 2018-11-26 adjusted for 2017/2018 revenues.

Focus delivers consistent revenue, some players show accelerated growth

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Page 11: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

A PROVEN MODEL | CREATING SHAREHOLDER VALUE

*Sources: FactSet as of 2018-11-26 adjusted for 2017/2018 revenues.

Peers earning per share*

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Page 12: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

15

20

25

30

35

40

45

COMPANY | SHARE PRICE AND CAPITAL BREAKDOWN

SHARE PRICE PERFORMANCE(FROM 4 JANUARY 2016 TO 23 NOVEMBER 2018)

31%

3%

8%

58%

CAPITAL ALLOCATION ON 23 NOVEMBER 2018

NabubotoInnelecManagers, employees and othersFree Float

Buy Back Program 2%November 2018

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Page 13: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

MARKET INSIGHT

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Page 14: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

MARKET INSIGHT | GROWTH OPPORTUNITIES

Sources: Newzoo – Global Games MarketRevenues 2018

GAME MARKET PER PLATFORM GAME MARKET PER REGION

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Page 15: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

Content is Key Multiplication ofDistribution Platforms

Emergence ofNew Technologies &

Business Models

Market inConsolidation

Growing Asian Market

1 52 3 4

MARKET INSIGHT | KEY FEATURES

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Page 16: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

WHERE WE ARE GOINGEEE STRATEGY

ENHANCE - EVOLVE - EXPLORE

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Page 17: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

ENHANCE EXPLOREEVOLVE

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Page 18: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

ENHANCE | EXTENDING AND BROADENING OUR STUDIO NETWORK

STILL A FRENCH CHAMPIONWIDENING THE SCOPE

AND MORE TO COME…18

Page 19: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

▪ Higher production value – Top tier AA quality.

▪ Solid content is key and can generate revenue through all distribution channels and on all platforms available in the market.

ENHANCE | IMPROVING THE QUALITY OF OUR CONTENT

2015 2017 FUTURE

1-3M1-7M

1-15M

DEV

ELO

PMEN

T BU

DG

ET

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Page 20: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

ENHANCE | ENGAGING GAMERS FOR A LONGER PERIOD

PREMIUMGAMES DLCs EXPANSIONS SEQUELS

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Page 21: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

ENHANCE | GREEN LIGHT PROCESS

ACQUISITION DATABASE

STAGE 1 STAGE 2 STAGE 3

GREENLIGHT STAGE

EXISTINGPARTNERS

TRADESHOWS

EXTERNALPROPOSALS

DIGITALSOURCING

COLLECT AND ORGANIZE

OVERVIEW PASS BYEVALUATION BOARD

VALIDATION BY EVALUATION BOARD

INTEREST PASS BY SPECIALIST SQUAD

IN-DEPTH ANALYSIS BYSPECIALIST SQUAD

VALIDATION BY EVALUATION BOARD

DECLINE THE PROPOSAL AND ARCHIVE THE PROJECT

PRODUCTION ANALYSIS FORECASTS

MEETINGS VISIT DEVELOPER’S OFFICES

NEGOTIATIONS

CONTRACT

FINAL APPROVAL PROJECTSIGNED

NO NO NOMAYBE MAYBE MAYBE

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Page 22: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

LUC HENINGER

Production Director -Management Board

Member

TRADE MARKETING

VINCENT CHATAIGNIERBusiness Development

Director

DESSIL BASMADJIAN Creative Director

EVENT MANAGERRELEASE

MANAGEMENT TEAM

PRODUCTION TEAM

SOCIAL MEDIA

ADVERTISING

BRAND MANAGER TEAM

AURELIE RODRIGUESSales Director

FINANCIAL TEAM EVALUATION TEAM

ART TEAM

SALES TEAM

SALES ADMINSTRATION

PRESS RELATION

MANUFACTURING EDITO TEAM

VIDEO TEAM

QUALITY ASSURANCE

WEB TEAM

ACCOUNTING

HUMAN RESOURCESINFORMATION SYSTEMS

THOMAS BARRAU

Marketing Director -Management Board

Member

JOHN BERT

COO - Management Board Member

DEBORAH BELLANGÉ

CFO - Vice Chairman of the Management Board

JÜRGEN GOELDNER

CEO - Chairman of the Management Board

NIRMALA CHANEMOUGAME

Deputy CFO

BUSINESS AFFAIRS BUSINESS DEV. TEAM

ENHANCE | ORGANIZATION CHART

PLAYTESTS

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Page 23: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

ENHANCE EXPLOREEVOLVE

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Page 24: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

EVOLVE | STRENGTHENING OUR TIES TO KEY STUDIOS

©Control over IP Improve margin Extra revenue with extended

exploitation of the brand

High potential partnersWith proven experience

Common vision Synergies

CRITERIA FOR POTENTIAL PARTNER

OBJECTIVES OF M&A

Create own franchises

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Page 25: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

CONTINUE CAPITALIZING ON OUR GLOBAL DISTRIBUTION NETWORK

(200+ TERRITORIES)

IMPROVE PRESENCE IN TERRITORIES WITH HIGH POTENTIALLIKE ASIA AND LATIN AMERICA

EVOLVE | TERRITORY EXPANSION

SETTING UP COMMUNICATION STRATEGY IN CHINA

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Page 26: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

ENHANCE EXPLOREEVOLVE

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Page 27: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

NEW OPPORTUNITIES FOR EXTRA REVENUETO BE EXPLORED WITH FOCUS’ APPROACH AND RESPECT OF VALUES

EXPLORE | MOBILE, LICENSING, MERCHANDISING, PLATFORMS, TECHNOLOGIES, BUSINESS MODELS

New Platforms New waysof licensing

New push towards Streaming

New distribution

models

1 2 3 4

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Page 28: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

LEVERAGE OPPORTUNITIES VIA LICENSING AND OUTSOURCING

ADDITIONAL PLATFORMS

EXPLORE | ADDITIONAL PLATFORMS

PREPARING FORTAKE-OFF

AR/VR MOBILE

SELECTION WITHIN FOCUS PORTFOLIO

1

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Page 29: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

LEVERAGE OPPORTUNITIES VIA LICENSING AND OUTSOURCING

EXPLORE | LICENSING & MERCHANDISING

TV SERIES & MOVIEADAPTATIONS

LICENSING

EXPLORE NEW OPPORTUNITIES

MERCHANDISING

NEW WAYS OF LICENSING

2

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Page 30: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

EXPLORE | NEW PUSH TOWARDS STREAMING

NEW PUSH TOWARDS

STREAMING3

▪ Instant access to a large catalog of video games

▪ No need to update hardware to access the latest titles

▪ New and attractive subscription models (Netflix/Spotify etc…)

▪ An increasing number of households equipped with fiber will help cloud gaming to become more accessible

THE BIG PLAYERS ARE ALREADY JUMPING IN

THE FUTURE OF GAMING IS IN THE CLOUD

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Page 31: Strategy Presentation Nov 27, 2018 - Focus Home Interactive€¦ · 2014 2015 2016 2017-2018 2018-2019e SALES (IN €M) 12 months + 3 months ... ENHANCE | GREEN LIGHT PROCESS ACQUISITION

OPPORTUNITIES

GAME ASA SERVICE

AMAZON

DATA DRIVEN

DECISIONS

CLOUD GAMING

(PLAYSTATION NOW…)

SUBSCRIPTION MODEL

(XBOX GAME PASS…)

NEWCOMERS (GAFA...)

SOLID CONTENT IS KEYAND DRIVES GROWTH

EXPLORE | ADDITIONAL OPPORTUNITIES

NEW DISTRIBUTION

MODELS

4

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