Management's review
Beskrivelse af virksomhedens væsentligste aktiviteter:LETTER TO SHAREHOLDERS
In 2023, we consolidated our business further by selling off the majority of our LEC franchise rights in League of Legends, resulting in an EBITDA of DKK 146. 8 million for the year. The value increase of the rights re-affirms our ongoing investment and consolidation strategy around key assets, and even though it comes in DKK 3. 2 million below latest guidance, given the circumstances and investment in the Counter-Strike team, the result is overall satisfactory. The main contributors to the result, beside the sale of LEC Franchise rights, are a stabilization of the value of our Commercial Partnerships and League Revenues as well as further growth in thes B2B and B2C business in and around our gaming centre, Astralis Nexus. During the year, we invested significantly in our Counter-Strike teams and division. On the team side we added two high-profile players, both amongst the best in the world. We also welcomed a new Sports Director with the goal of securing long-term competitive success across our teams. The goal continues to be a permanent presence in the top of the world rankings. Despite the lack of top results, we continued to see a strengthening of our brand with a growing digital audience and media presence. We launched our own broadcast channel, Astralis Watch, which despite a limited budget has already shown promising viewership numbers and an extremely engaged audience. This confirms our strategy of creating a global gaming brand and media, independent of short-term team results. In a year of varied competitive success, the Astralis brand continued to strengthen within existing and new audiences. The fanbase continued the positive development measured in the number of followers on our digital channels, and compared to 2022, we registered a positive development in the total number of followers across all channels, providing a wider commercial platform for existing and potential commercial partners. Following a strategic review announced in March 2023, it was decided to delist from NASDAQ First North Growth Markets in August 2023. Despite the strong financial performance, the share price had dropped significantly since the listing in 2019 and the liquidity of the Company's share was very limited, providing little value for both the Company and its shareholders. Furthermore, the delisting will save the Company approximately DKK +2m in annual direct costs and an estimated addition of DKK +1m in annual indirect cost savings. The Company delisted on 25 October 2023. Leagues and Franchise Rights In October 2023, we announced a transfer of our Franchise rights in the League of Legends European Championship (LEC) at a total agreed valuation of DKK 194 million to a newly created French subsidiary AK-Game SAS. Subsequently, Karmine Corp SAS acquired 66,67 % of the shares in AK-Game SAS for DKK 129 million. The sale is completed in tranches from 2023-2025, and Astralis will retain a capital interest in AK-Game SAS of 33,33 % when all tranches are received. The Agreement contains provisions for Astralis to trigger additional share transfers, up to ceding 100% of the shares to Karmine Corp SAS by 2031 at the latest. The net gain before tax from the sale in 2023 was DKK 153. 6 million with aggregated cash flow effect from 2023-to 2025 of DKK 112 million. Brand, Media, and Partnerships The Astralis brand continues to grow, not just in gaming and esports, but also within the general youth culture, especially in Denmark. Even compared to a strong 2022, with high engagement and viewership, we managed to retain and even increase the number of followers across our digital channels. Our diverse and expanding media portfolio provides a strong commercial platform for existing and potential commercial partners. Across teams and Astralis Nexus, we extended key partnership agreements and entered eight new, significant partnership agreements in 2023. To further strengthen Astralis’ digital business and position as a Media Organization in the gaming entertainment industry, we launched a new broadcast platform, Astralis Watch, which has already become a key meeting place for the Danish gaming and Astralis community on Twitch. Having already reached +100. 000 unique viewers with peak viewership close to 10. 000, we see a significant commercial and brand potential in Astralis Watch. Organization To support our growing business and strengthen our position around media, retail, and esports performance, in 2023, we added key profiles in our commercial and sporting divisions. We also added a new business unit, Astralis Educational, which is responsible for our educational and sociøconomic activities online and physically. We are working together with a range of NGOs as well as regional and national authorities to promote and support education and health through facilitated gaming. Teams, Performance, and Development Following the sale of our LEC Franchise Rights, we ceased all League of Legends team activities. Today we focus our team activities around three Counter-Strike teams; the main team, the talent team, and the women’s team. In the summer of 2023, we changed the management of our sporting department, bringing in a new Sports Director, Kasper Straube, alongside Jan Ø. Jørgensen as Head of Performance. Counter-Strike We continued the investment in the teams. In November we announced the transfer of two new players for the main team, both young with high potential, but also with proven track records from the biggest tournaments in the world. EBITDA for Astralis CS was DKK -13. 6 million in 2023 (DKK 6. 6 million full year 2022). League of Legends Following the sale of our LEC Franchise Rights, we no longer have activities in League of Legends. We still hold part ownership of the rights through ownership of AK-Game SAS, but are not involved in the daily operations. EBITDA for Astralis LoL was DKK 157. 3 million in 2023 (DKK 1. 8 million full year 2022). Rainbow Six In February 2023, the competitive team was closed down and there has been very limited activity in 2023. EBITDA for Astralis US was DKK -0. 1 million in 2023 (DKK -2. 2 million full year 2022). FIFA We no longer have competitive activity in FIFA (EA Sports FC), and there has been very limited activity in 2023. Astralis FIFA ApS was merged into Astralis Management ApS on 19 February 2024 with retroactive effect from 1 January 2023. PIXEL. TV In May 2023, 41% of the shares in PIXEL. TV was sold. The remaining 10% ownership was sold in February 2024. EBITDA for PIXEL. TV was DKK -0. 3 million in 2023 (DKK -0. 6 million full year 2022). Astralis Nexus Astralis Nexus has been on a positive trajectory since opening in 2020. In 2023, we saw a further improvement in utilization of the gaming facilities and a continued positive development of interest from both the public and commercial brands. EBITDA for Astralis Nexus was DKK -5. 1 million in 2023 (DKK -6. 0 million full year 2022). Research and Development Activities There are no research and development activities in Astralis. Resources of Special Knowledge In Astralis, players and coaching teams can be considered resources of special knowledge that can affect future revenue. They are all under long term contracts, and replacements are available in the transfer market or ultimately within our own organization in the talent division. Environmental Effects of Our Business In general, we strive to minimize our effects on the environment through an active energy saving policy throughout the organization. With its more than 100 professional gaming stations, a retail store, and facade lighting, Astralis Nexus has an energy consumption above average. As a tenant in Tivoli, we are part of Tivoli's green energy policy and as such our energy consumption is expected to be covered by renewable energy sources. Treasury Shares As a result of reverse vesting of shares under the Group’s warrant program and acquisition of shares following the delisting of the company, Astralis A/S holds treasury shares of 714,517 of nominally DKK 0,01 each corresponding to 1. 2% of the share capital. In 2023, Astralis acquired 258,515 treasury shares. Results The result for 2023 is overall satisfactory following the sale of our franchise rights in the League of Legends European Championship (LEC) and despite the underlying difficulties in the market and our teams’ general performance in 2023. The full year net revenue for the Group was DKK 72. 3 million in 2023 – compared to DKK 87. 5 million in 2022 - which was in the middle of the financial guidance given in corporate announcement no. 19-2023 of DKK 70-75 million. A positive EBITDA of DKK 146. 7 million - compared to DKK 2. 6 million in 2022 - was DKK 3. 3 million below guidance given with a range between DKK 150 to 155 million. The result before tax for the year was DKK 137. 0 million which is in line with expectations. Uncertainty Relating to Valuation and Recognition The Group has assessed that no assets or liabilities are subject to significant uncertainty in relation to valuation or recognition. Unusual Matters in the Financial Statements Management has assessed that neither the consolidated financial statements nor the parent financial statements for 2023 are affected by unusual matters other than the gain from the sale of the franchise rights in the League of Legends European Championship (LEC). Outlook The projections of the financial targets for the Group for the financial year ending 31 December 2024 is a net revenue in line with 2023 and EBITDA of net DKK zero. Events After the Balance Sheet Date Astralis FIFA ApS was merged with Astralis Management ApS on 19 February 2024 with retroactive effect from 1 January 2023. 51% of PIXEL. TV ApS was acquired by Astralis A/S on 1 January 2022 and ownership was transferred to Astralis Management on 16 August 2022. On 16. May 2023 Astralis sold 41% of the ownership in PIXEL. TV ApS and the remaining 10% ownership was sold on 13 February 2024. On 9 January 2024 the now former CEO of Astralis, Anders Hørsholt, joined the Board and the founder and now former Chairman of the Board, Nikolaj Nyholm, joined as CEO. In the same connection, Claus Zibrandtsen replaced Nikola Nyholm as Chairman of the Board. Nikolaj Nyholm CEO
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