Consolidated financial statements as of June 30th, 2023
Digital Bros S.p.A.
Via Tortona, 37 - 20144 Milan, Italy
VAT number 09554160151
Share Capital: Euro 6.024.334,80 of which Euro 5.706.014,80 subscribed
Milan Companies House no. 290680-Vol. 7394 Chamber of Commerce no. 1302132
This report is available on the Company's website www.digitalbros.comInvestor Relations /
Financial Documents section
Please consider that this is an Italian to English translation: the Italian version shall always prevail in
case of any discrepancy or inconsistency
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Digital Bros Group Consolidated financial statements as of June 30th, 2023 | 2 |
Index | ||
2. | MAIN INTELLECTUAL PROPERTIES OWNED BY THE GROUP | 11 |
3. | THE VIDEO GAMES MARKET | 14 |
4. | ALTERNATIVE PERFORMANCE RATIOS | 16 |
5. | SEASONALITY EFFECTS | 16 |
6. | SIGNIFICANT EVENTS DURING THE REPORTING PERIOD | 17 |
7. CONSOLIDATED PROFIT AND LOSS STATEMENT FOR THE PERIOD ENDED JUNE 30TH, 2023 ..19
8. | CONSOLIDATED BALANCE SHEET AS OF JUNE 30TH, 2023 | 23 |
9. | FINANCIAL RATIOS | 25 |
10. | SEGMENT REPORTING | 26 |
Premium Games | 26 | |
Free to Play | 30 | |
Italian Distribution | 33 | |
Other Activities | 36 | |
Holding | 38 | |
11. | INTERCOMPANY AND RELATED PARTY TRANSACTION AND ATYPICAL/UNUSUAL | |
TRANSACTIONS | 41 | |
12. | TREASURY SHARES | 43 |
13. | RESEARCH AND DEVELOPMENT | 43 |
14. | OPERATIONAL RISKS, FINANCIAL RISKS AND FINANCIAL INSTRUMENTS | 43 |
15. | CONTINGENT ASSETS AND LIABILITIES | 48 |
16. | SUBSEQUENT EVENTS | 48 |
17. | BUSINESS OUTLOOK | 48 |
18. | OTHER INFORMATION | 49 |
EMPLOYEES | 49 | |
ENVIRONMENTAL ISSUES | 50 | |
19. | DISCLOSURE OF NON-FINANCIALINFORMATION | 50 |
20. | CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE REPORT | 50 |
21. | REMUNERATION POLICY AND FEES PAID REPORT | 50 |
Digital Bros Group Consolidated financial statements as of June 30th, 2023 | 3 |
Interim Report as of June 30th, 2023 | 52 | |
Consolidated balance sheet as of June 30th, 2023 | 53 | |
Consolidated profit and loss statement for the period ended June 30th, 2023 | 54 | |
Consolidated comprehensive income statement as of June 30th, 2023 | 55 | |
Consolidated statement of changes in equity as of June 30th, 2023 | 57 | |
Financial statements as of June 30th, 2023 | 58 | |
1. | INTRODUCTORY NOTE | 59 |
2. | ACCOUNTING POLICIES | 61 |
3. | DISCRETIONARY ITEMS AND SIGNIFICANT ESTIMATES | 79 |
4. | CONSOLIDATION CRITERIA | 81 |
5. | INVESTMENTS IN JOINT-VENTURES AND ASSOCIATED COMPANIES | 84 |
6. | 6. BUSINESS COMBINATIONS | 84 |
7. | RELATIONSHIPS WITH STARBREEZE | 85 |
8. RECONCILIATION OF CONSOLIDATED PROFIT FOR THE YEAR AND NET EQUITY TO THOSE
OF PARENT COMPANY | 88 | |
9. | 8. CONSOLIDATED BALANCE SHEET AS OF JUNE 30TH, 2023 | 90 |
CURRENT ASSETS | 97 | |
NET EQUITY | 100 | |
NON-CURRENTLIABILITIES | 102 | |
CURRENT LIABILITIES | 103 | |
NET FINANCIAL POSITION | 104 | |
PROFIT AND LOSS STATEMENT | 110 | |
10. | FINANCIAL INSTRUMENTS AND FINACIAL RISK MANAGEMENT (IFRS 7) | 117 |
11. | NON-RECURRINGITEMS | 126 |
12. INFORMATION BY OPERATING SEGMENT | 127 | |
13. | RELATED PARTY TRANSACTIONS | 132 |
14. | ATYPICAL OR UNUSUAL TRANSACTIONS | 136 |
15. | ASSET REVALUATION | 136 |
16. | LOANS GRANTED TO EXECUTIVES AND SUPERVISORY BODIES | 136 |
17. | AUDIT FEES | 136 |
STATEMENT PURSUANT TO ART. 154- BIS (5) OF THE T.U.F | 137 |
Digital Bros Group Consolidated financial statements as of June 30th, 2023 | 4 |
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE STRUCTURE
Board of Directors
Name | Office | Control & Risk | Remuneration | Nomination | ||
Committee | Committee | Committee | ||||
Sylvia Anna Bartyan | Director | I | M | M | P | |
Lidia Florean | Director | NE | ||||
Abramo Galante | Chairman and | E | ||||
CEO | ||||||
Davide Galante | Director | NE | ||||
Raffaele Galante | CEO | E | ||||
Susanna Pedretti | Director | I | M | P | M | |
Stefano Salbe (1) | Director | E | ||||
Laura Soifer (2) | Director | I | P | M | M | |
Dario Treves | Director | E | ||||
Key: | |||
(1) Financial Reporting Manager pursuant to | E: Executive Director | P: President of the Committee | |
Art. 154 bis of Legislative Decree 58/98 | NE: Non-Executive Director | M: Member of the Committee | |
(2) Lead Independent Director | I: Independent Director | ||
Board of Statutory Auditors | |||
Name | Office | ||
Gianfranco Corrao | Statutory auditor | ||
Carlo Hassan | Chairman | ||
Maria Pia Maspes | Statutory auditor | ||
Daniela Delfrate | Substitute statutory auditor | ||
Stefano Spiniello | Substitute statutory auditor | ||
The Shareholders' Meeting held on October 28th, 2020 appointed the Board of Directors and the Board of Statutory Auditors. The terms of the Directors and the Statutory Auditors will expire on the Shareholders' Meeting which will approve the financial statements as at June 30th, 2023.
On October 28th, 2020, the Shareholders' Meeting appointed Abramo Galante as Chairman of the Board of Directors. On the same date, the Board of Directors appointed Abramo Galante and Raffaele Galante as Chief Executive Officers. The Chief Executive Officers received appropriate powers of attorney.
On August 7th, 2007, the Board of Directors appointed the Executive Director Stefano Salbe as Financial Reporting Manager pursuant to Art. 154 bis of Legislative Decree 58/98 with appropriate powers.
Digital Bros Group Consolidated financial statements as of June 30th, 2023 | 5 |
Auditors
EY S.p.A.
On October 27th, 2021, the Shareholders' Meeting appointed EY S.p.A., based in Via Meravigli 12, Milan, as auditors of the Group consolidated annual and half year financial statements and Digital Bros S.p.A. annual financial statements until the approval of the financial statements as of June 30th, 2030.
Other information
The publication of Digital Bros Group's consolidated financial statements and the Digital Bros S.p.A. financial statements as of June 30th, 2023 was authorized by a resolution of the Board of Directors held on September 27th, 2023.
Digital Bros S.p.A. is incorporated and operating in Italy. The Company is listed on the Euronext STAR segment of the Euronext Milan market operated by Borsa Italiana S.p.A..
Digital Bros Group Consolidated financial statements as of June 30th, 2023 | 6 |
DIRECTORS' REPORT
1. GROUP ORGANIZATION
Digital Bros Group develops, publishes and distributes video games on international markets.
The Group is organized into five operational business segments:
Premium Games: main operations consist of the acquisition of video games intellectual properties from developers and the distribution of video games through an international retail sales network and digital marketplaces such as Steam, Sony PlayStation Network, Microsoft Xbox Live, Epic Game Store, etc..
The Group develops some video games through its internal studios. Video games developed by external studios are usually either acquired through an exclusive license or assigned to the Group with long-term worldwide rights.
The label used for worldwide publishing is 505 Games. A second label, Hook, publishes budget video games.
During the period, Premium Games operations were conducted by the subsidiary 505 Games S.p.A. which coordinates the operating segment, together with 505 Games France S.a.s., 505 Games Ltd., 505 Games (US) Inc., 505 Games Spain Slu and 505 Games GmbH which operate respectively on the French, UK, U.S., Spanish and German markets. Hook S.r.l. publishes budget videogames. 505 Games Interactive (US) Inc. provides consultancy services on behalf of 505 Games S.p.A..
The following studios are also incorporated in the Premium Games segment:
- the Italian company Kunos Simulazioni S.r.l., which developed and published the Assetto Corsa and the Assetto Corsa Competizione video games;
- the Czech company Ingame Studios a.s. (60% of which is held by the Group), a Brno-based studio acquired in July 2021 and developing Crime Boss: Rockay City, the intellectual propriety owned by Rasplata B.V.;
- the Italian company Avantgarden S.r.l., a development studio based in Milan;
- the Italian company Supernova Games Studios S.r.l., a development studio based in Milan;
- the Canadian company Chrysalide Jeux et Divertissement Inc. (75% of which is held by the Group) which is currently developing a brand-new video game.
A Spanish joint venture, MSE & DB S.L., was set up together with the development studio MercurySteam Entertainment S.L. in order to jointly create a new intellectual property.
Free to Play: main operations consist of the development and publishing of video games and/or applications that are available for free on digital marketplaces with in-app purchases features. Free to Play video games usually presents less technical complexity than Premium video games but, in case of success, will have a longer life cycle. Free to Play video games are continuously upgraded after the launch in order to retain players and enhance the video game's life cycle.
Digital Bros Group Consolidated financial statements as of June 30th, 2023 | 7 |
Worldwide Free to Play publishing is operated by 505 Mobile S.r.l., together with the U.S. company 505 Mobile (US) Inc., which provides consultancy services to Group companies, the UK company DR Studios Ltd. which is the developer of Free to Play video games and Hawken Entertainment Inc..
In January 2021, the Australian company 505 Games Australia Pty Ltd. acquired 100% of the shares of Infinite Interactive Pty. and Infinity Plus Two Pty.. The Australian companies own the intellectual property of the video games Puzzle Quest and Gems of War and provide the live support to such products.
In July 2022, 505 Games Mobile S.r.l. acquired 100% of D3Publisher of America Inc., now 505 Go Inc., an American publisher of Free to Play video games, including spin-offs of the Puzzle Quest series.
The labels used for Free to Play worldwide publishing are 505 Mobile and 505Go!.
Italian Distribution: consists of the distribution in Italy of video games purchased from international publishers. The operations are run by the Parent Company, Digital Bros S.p.A., under the Halifax brand.
Other Activities: all Group's remaining activities are consolidated together for reporting purposes under the Other Activities operating segment. It includes the operations of the subsidiary Digital Bros Game Academy S.r.l. which organizes video game training and professional courses. The Group also holds a 60% stake in the UK company Seekhana Ltd..
Holding: includes all the corporate functions provided by Digital Bros S.p.A. in finance, control and business development activities. The holding company has been supported by Digital Bros China Ltd., Digital Bros Asia Pacific (HK) Ltd. and 505 Games Japan K.K. which have operated as business developers for the Asian markets. Digital Bros Holdings Ltd. has been inactive during the period.
All the companies mentioned above are 100% owned, except for Rasplata B.V., Ingame Studios a.s. and Seekhana Ltd. which are controlled with a 60% interest and Chrysalide Jeux et Divertissement Inc. with a 75% interest.
The organization chart of the operating companies as of June 30th, 2023 was as follows:
Digital Bros Group Consolidated financial statements as of June 30th, 2023 | 8 |
Digital Bros Group Consolidated financial statements as of June 30th, 2023 | 9 |
During the reporting period, the Group operated in the following locations:
Company | Address | Activity | |
AvantGarden S.r.l. | Via Tortona, 37 Milan | Offices | |
Chrysalide Jeux et Divertissement Inc. (2) | 300 Rue Saint Paul - Bureau 410, Quebec City, Canada | Offices | |
Digital Bros S.p.A. | Via Tortona, 37 Milan | Offices | |
Digital Bros S.p.A. | Via Boccaccio 95, Trezzano sul Naviglio (Milan) | Logistics | |
Digital Bros Asia Pacific (HK) Ltd. | 33-35 Hillier Street, Sheung Wan, Hong Kong | Offices | |
Digital Bros China (Shenzhen) Ltd. | Wang Hai Road, Nanshan district, Shenzhen, 518062, | Offices | |
China | |||
Digital Bros Game Academy S.r.l. | Via Labus, 15 Milan | Offices | |
DR Studios Ltd. | 403 Silbury Boulevard, Milton Keynes, U.K. | Offices | |
Game Entertainment S.r.l. | Via Tortona, 37 Milan | Offices | |
505 | Games S.p.A. | Via Tortona, 37 Milan | Offices |
505 | Games Australia Pty Ltd. | 333 Collins Street, South Melbourne Victoria, Australia | Offices |
505 | Games France S.a.s. | 2, Chemin de la Chauderaie, Francheville, France | Offices |
505 | Games Japan K.K. | WeWork Jimbocho, 11-15, Kanda Jimbocho 2-chome | Offices |
Chiyoda-ku, Tokyo, Japan | |||
505 | Games Spain Slu | Calle Cabo Rufino Lazaro 15, Las Rozas de Madrid, Spain | Offices |
505 | Games Ltd. | 403 Silbury Boulevard, Milton Keynes, U.K. | Offices |
505 | Games (US) Inc. | 5145 Douglas Fir Road, Calabasas, California, U.S.A. | Offices |
505 | Games GmbH | Brunnfeld 2-6, Burglengenfeld, Germany | Offices |
505 | Games Interactive (US) Inc. | 5145 Douglas Fir Road, Calabasas, California, U.S.A. | Offices |
505 | Go Inc. | 5145 Douglas Fir Road, Calabasas, California, U.S.A. | Offices |
Hawken Entertainment Inc. | 5145 Douglas Fir Road, Calabasas, California, U.S.A. | Offices | |
Hook S.r.l. | Via Tortona, 37 Milan | Offices | |
Ingame Studios a.s. (1) | Moravské náměstí 249/8, Brno, Czech Republic | Offices | |
Kunos Simulazioni S.r.l. | Via degli Olmetti 39, Formello (Rome) | Offices | |
Infinity Plus Two Pty Ltd. | 333 Collins Street, Melbourne Victoria, Australia | Offices | |
Infinite Interactive Pty Ltd. | 333 Collins Street, Melbourne Victoria, Australia | Offices | |
505 | Mobile S.r.l. | Via Tortona, 37 Milan | Offices |
505 | Mobile (US) Inc. | 5145 Douglas Fir Road, Calabasas, California, U.S.A. | Offices |
Rasplata B.V. (1) | Churchill-laan 131 2, Amsterdam, Netherlands | Offices | |
Seekhana Ltd. (1) | 403 Silbury Boulevard, Milton Keynes, U.K. | Offices | |
Supernova Games Studios S.r.l. | Via Tortona, 37 Milan | Offices | |
- 60% consolidated
- 75% consolidated
- In dissolution
Rasplata B.V., Seekhana Ltd. and Ingame Studios a.s. are held at 60%. Chrysalide Jeux et Divertissement Inc. is held at 75%. They have been incorporated into the consolidated financial statements through full consolidation method, acknowledging the proportion of net equity and operating results belonging to minority shareholders.
Digital Bros Group Consolidated financial statements as of June 30th, 2023 | 10 |
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Digital Bros S.p.A. published this content on 27 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2023 09:34:39 UTC.