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G5 Entertainment

G5 Entertainment

G5 Entertainment: Interim report January-September 2011

08:39 / 15 November 2011 G5 Entertainment Press release

2011-11-15 PRESS RELEASE

• Consolidated revenue for the period is 31 207 KSEK (12 065 KSEK in Q3, 9 594 KSEK in Q2, 9 548 KSEK in Q1), up 112% compared to 14 707 KSEK for the same period of 2010. This is in line with previously communicated forecast of 31.2 MSEK.

• Operating result for the period is 11 468 KSEK (3 706 KSEK in Q3, 3 841 KSEK in Q2, 3 921 KSEK in Q1), up 96% compared to 5 841 KSEK for the same period of 2010. This result is 4% above previously communicated forecast of 11 MSEK. Earnings per share for the period is 1.26 Kr, in line with the previously communicated forecast of 1.26 Kr.

• During the period, the group had positive cash flow of 15 506 KSEK. Cash reserves on September 30th 2011 amounted to 20 398 KSEK. During the period of July-September, the group was actively investing for future growth, with the goal to achieve output of one game per week. As planned, the increased investment put pressure on the group’s profit margin in the short term, but it is expected to rebound once the group releases multiple games currently in development. Going forward, the management is going to continue maintaining the balance between having sufficient cash reserves, profitability, and actively investing for future growth.

• Current assets of the group as of September 30th 2011 were 25 958 KSEK. Current liabilities: 4 193 KSEK. Working capital (CA-CL): 21 765 KSEK. Current ratio (CA divided by CL): 6.2. The group does not have any long-term liabilities, and has strong liquidity position.

• For the period of January-December 2011, the management keeps the previously communicated forecast of 47 MSEK revenue, 16.5 MSEK operating result, and earnings per share of 1.9 Kr. This forecast corresponds to achieving 106% revenue growth and 88% operating result growth compared to the period January-December 2010.

• The management confirms the previously announced goal for the period January-December 2012 of 87 MKr revenue and 30 MKr operating result with EPS of 3.2 Kr. This is a forward-looking statement, and the actual result can be both above and below these numbers, depending on the performance of the group’s games and certain risk factors detailed further in this report. The management will update the forecast for January-December 2011 during the first days of January 2012.

• Special Enquiry Detail: The Hand That Feeds for iOS was released in July. The iPhone version has quickly topped charts around the world and reached #1 Top Grossing App position in the UK and #2 Top Grossing Game in France, becoming Top 10 Grossing Game in over 30 countries and Top 100 Grossing Game in 72 countries. The game was downloaded more than 700 000 times in two weeks after the release.

• During Q3, G5 released a number of Android games, bringing the total number of G5 games on Android Market to twelve: Mahjong Artifacts 1 and 2, Success Story, Paranormal Agency, Supermarket Management, Stand O’Food, Supermarket Mania, Virtual City, Stand O’Food 3, Supermarket Mania 2, Special Enquiry Detail, The Mystery of the Crystal Portal. These games achieved top grossing chart positions around the world, and were downloaded over 7 million times in a few months. G5 has once again proven that the company knows how to monetize casual games on mobile platforms.

• In August, G5 released Virtual City Playground on iPad. Virtual City Playground is a new game in Virtual City franchise, in a so-called “Freemium” format. Such format has achieved outstanding popularity on social networks such as Facebook and is increasingly popular on smartphones and tablet computers. Virtual City Playground is a free download and allows players to play for free for unlimited time, while offering to purchase virtual goods that enhance game play experience. Through the purchase of additional energy and in-game currency packs the player can enjoy longer game play sessions, and unlock additional content, including unique landmark buildings. The game has achieved success on iPad, becoming App Store’s #1 Top Grossing Game in 17 countries, Top 5 Grossing Game in 57 countries, and Top 10 Grossing Game more than 70 countries.

• During Q3, the group has also released a number of other games for Mac App Store, iPhone, and iPad, including Jack of All Tribes for Mac, Jane’s Hotel 2: Family Hero for iPhone, and Fix-it-up: Kate’s Adventure for iPhone and iPad.

• On July 28th, the extraordinary general meeting of shareholders has added two more board members: Peter Benson and Jeffrey Rose. The board of directors of G5 Entertainment AB consists of 5 people since then. More information about the board can be found at: www.g5e.com/corporate/management.

• On 19th August, G5 Entertainment announced the closing of the transaction with the investment company Traction. In accordance with the investment agreement signed earlier in July 2011, G5 Entertainment AB issued 580 426 new shares, and Traction purchased these shares from the company at the price of 21,5 Kr per share, for a total amount of 12.5 MKr. The total number of shares in G5 Entertainment AB became 8 000 000. Traction therefore has acquired 7.26% of the outstanding shares in this transaction.

• This interim report has not been reviewed by company’s auditor.

Important events after the end of the period

• G5 released Games Navigator – by G5 Games on Android and iOS. This application, available as free download on Apple App Store and Android Market, allows the players to stay up to date on G5’s latest game releases, news, discounts, and giveaways.

• Virtual City 2, the sequel to G5’s best-selling Virtual City simulation game, was released on Mac App Store in October, quickly rising to the Top Grossing charts of the Mac App Store around the world.

• In October, G5 released Virtual City Playground, its successful freemium/social debut game, on iPhone and Android Market. Virtual City Playground for Android quickly gained traction and climbed top charts worldwide, by 15th November achieving #5 Top Grossing App in Sweden, #4 Top Grossing App in France, #1 Top Grossing Game in Italy, #6 Top Grossing Game in Germany, #9 Top Grossing App in UK, #19 Top Grossing Game in USA, #2 Top Grossing App in Singapore, and top grossing positions in multiple other countries around the world. G5 will continue developing the Playground concept of freemium/social games further and plans to support the game with regular updates and launch more game in this format.

• G5 is preparing the initial 12 games to release on Amazon Appstore starting 15th November, when Kindle Fire from Amazon goes on sale in USA. Once approved and released on Amazon Appstore, G5’s games are going to be available to purchase and download by all Kindle Fire users.

• The total number of downloads of G5 games on iOS and Android (not counting update downloads) surpassed 28 million. To explain the dynamic of this number over time, it took G5 twelve months to achieve the first 3 million of downloads between Feb 2009 and Feb 2010, and it only took 1 month of October 2011 to achieve the last 3 million of downloads.

More information about the company can be found at: www.g5e.se/corporate For additional information please contact: mailto:

About G5 Entertainment AB (publ) G5 Entertainment AB is a developer and publisher of high quality downloadable games for iPhone, iPad, Android, PC, Mac, and portable game consoles like Sony PSP and Nintendo DSi. G5 develops and publishes games that are family-friendly, easy to learn, and targeted at the widest audience of experienced and novice players. G5 owns a number of popular game franchises like Virtual City, Supermarket Mania, Stand O’ Food, and Mahjongg Artifacts, and invests in creating new games and bringing established franchises to new gaming platforms.

G5 Entertainment

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