Fourth quarter, 1 October - 31 December 2024
- Net sales increased by 43 percent to SEK 70.8 million (49.5), mainly due to strong new sales of gaming projects.
- Operating profit before depreciation and amortization (EBITDA) amounted to SEK 8.1 million (7.3). The improvement in earnings is due to increased sales, increased gross margins in combination with maintained cost discipline.
- Adjusted operating profit before depreciation and amortization (adjusted EBITDA) amounted to SEK 14.1 million (-4.6). Adjusted EBITDA excludes non-recurring costs and revenues of SEK -6.0 million (11.8). The corresponding period last year includes non-recurring revenues of SEK 17.2 million.
- Operating profit (EBIT) amounted to SEK 7.8 million (-9.6).
- Profit before tax amounted to SEK 7.7 million (93.6).
- Earnings per share before dilution amounted to SEK 0.35 (429.7) and after dilution to SEK 0.24 (415.2).
- Cash and cash equivalents amounted to SEK 17.5 million (3.0) as of December 31, 2024.
Full-year, 1 January - 31 December 2024
- Net sales decreased by 38 percent to SEK 172.6 million (278.7), mainly due to weak new sales during the first half of the year for both VFX and gaming projects.
- Operating profit before depreciation and amortization (EBITDA) amounted to SEK -42.7 million (-16.9). The loss for the full year is mainly due to a sharp decline in sales during the first half of the year.
- Adjusted operating profit before depreciation and amortization (adjusted EBITDA) amounted to SEK -34.2 million (-19.8). Adjusted EBITDA excludes non-recurring costs and revenues of SEK -8.5 million (2.9). The corresponding period last year includes non-recurring revenues of SEK 17.2 million.
- Operating profit (EBIT) amounted to SEK -49.9 million (-216.3).
- Profit before tax amounted to SEK -52.5 million (-114.2).
- Earnings per share before and after dilution amounted to SEK -2.28 (-492.02).*
- Cash and cash equivalents amounted to SEK 17.5 million (3.0) as of December 31, 2024.
* Comparative figures for earnings per share have been adjusted to reflect the reverse split 1:200 that was decided by the AGM on April 13, 2023 and the reverse split 1:100 that was decided by an EGM on January 2024.
Significant events during the fourth quarter
- On October 1, 2024, Goodbye Kansas Studios received an order for the production of a cinematic game trailer for a game project. The order comes from a new strategic, international customer and the value of the order amounts to approximately SEK 17 million. Production will last until early 2025.
- On October 22, 2024, Goodbye Kansas Group reached a settlement with the bankruptcy trustee regarding a claim for recovery directed against the company. Under the settlement, the company pays a significantly lower amount than the bankruptcy trustee's original demand. This payment to the bankruptcy estate has the consequence that the company in turn receives the corresponding amount from one of the bankruptcy estate's priority creditors. The settlement will have no net effect on the company's costs or cash flow. Following the settlement, the bankruptcy trustee has no further claims against Goodbye Kansas Group.
- On October 31, 2024, Goodbye Kansas Studios received another order for pre-production of cinematic game trailers for a game project. The order comes from an international customer and the value of this order amounts to approximately SEK 27 million. Production began immediately and lasted until the end of 2024.
- On November 4, Stefan Danieli announced to the Board of Directors of Goodbye Kansas Group that he wishes to step down from his position and hand over to a new growth-oriented leader. The Board of Directors is well prepared to establish a new management team for the next phase of the company's development with a dynamic commercial growth plan and the recruitment process has been initiated.
Significant events after the period
- On January 18, 2025, Goodbye Kansas Studios received another large order from an existing international customer for the production of a game trailer for a game project. The total value of the order amounts to approximately SEK 39 million. The project will start immediately and will run until the third quarter of 2025.
CEO comments
Dear shareholders,
In the final quarter of the year, Goodbye Kansas turned to profit after a significant increase in revenue, combined with focused cost control. During the quarter, we also reported a positive cash flow from operations. The outcome is in line with the outlook that has previously been communicated and thus expected, but it is nevertheless an important milestone. At the same time, it is worth noting that we can also sum up a positive result for the second half of the year. The quarter was an important step in the right direction, and the first clear proof that our implemented measures are paying off. In addition, we have continued to strengthen the order book with new wins, especially in gaming projects, so we enter the full-year 2025 with high hopes. After a lengthy period with weak market conditions, we now see also in the VFX market that projects are going into production and concrete negotiations are starting to take shape, where we are well positioned to take on new assignments. As we conclude the year, I can state that the strategic restructuring has created a stronger company with the right conditions to achieve long-term profitable growth.
Game projects drive profitable growth
We have previously communicated that the order situation for gaming projects has improved significantly thanks to focused sales efforts, deepened customer relationships and increased demand in the market. In the fourth quarter, we saw a positive development with significantly increased revenues, driven by gaming-related projects for both existing and new customers.
The VFX market has not yet generated any new assignments, but customer activity has increased significantly. Concrete project procurements have begun to take shape and we are now once again conducting concrete dialogues with a number of international customers, where we perceive that we have good opportunities to win new orders. The individual assignments are so far smaller than the large orders that we have recently secured in the gaming market, but overall we see significant revenue potential for VFX, in projects of different sizes.
Sales in the fourth quarter amounted to SEK 71 million and adjusted EBITDA to SEK 14 million, while cash flow totaled SEK 11 million. This is undeniably a turning point for the company. Our focus on sales continues while we have started to deliver on the important orders received during the quarter, from both existing and new customers, in addition to continued good control over production costs as well as fixed costs. During and after the period, we have received orders with an order value of approximately SEK 90 million, several of these projects will run over multiple quarters. We also see good opportunities to further expand the collaboration in 2025 with one of the customers we contracted during the quarter.
Important breakthrough for our Animation offering
In this report, we also draw attention to our production of an episode of Secret Level, which was released on Amazon Prime in December 2024. Our episode ("The Company We Keep") is an outstanding testament to our capabilities in many respects and an important milestone as it was our first project in the Animation segment, as well as one of our largest projects ever. We have great ambitions to continue to develop and grow the business in this segment that is new to us. All the positive attention that the show has received is of great value to our brand and our sales efforts.
Positive development for VFX in the coming year
The market for VFX services has been weak for some time, but we are now seeing clear signs of a change. The dialogue with many customers is now again about concrete projects. During the year, we strengthened the sales organization internationally in North America and the UK, which taken together means that I am hopeful that our sales initiatives will yield results this year. Shogun was awarded an Emmy Award for VFX during the year and this is a clear testament to our capabilities and also contributes positively to our sales efforts.
At the same time, we are making progress in establishing our joint venture with NY VFXWAALA in India. Our JV company is now in place, which will contribute positively to our competitiveness and provide room for further margin improvements. An increased production capacity in Mumbai is crucial for us to be able to meet growing demand in a market with significant competition. It is also clear that our establishment of Goodbye Kansas Asia has created great interest among customers in the region as well.
A stronger Goodbye Kansas Group
In 2024, we completed a restructuring and strategic streamlining of the Group's operations. The streamlining has meant that we can focus our efforts on the studio business, where we have a strong market position, a competitive customer offering and where we can create the greatest value in the long term. The outcome in the fourth quarter shows that we have created a stronger Goodbye Kansas with potential to grow profitably.
We see more stability and activity in existing markets going forward, both in the US and Europe. The gaming market is still partly turbulent but with strong underlying demand and growth. We clearly see that the film and TV companies will demand more VFX services in the coming year, while we exit a period where several VFX companies have undergone structural changes, downsizing and in some cases been forced to close down. In the animation segment, we also believe that there will be good opportunities for us to grow considering our proven ability to deliver and a positive market development.
In light of our current order book and continued focus on sales in a market that is increasingly normalizing, we maintain our financial targets for the full-year 2025. In light of this, the company's working capital is deemed to be sufficient to finance the continued operation of the business.
The company is well equipped to begin a new phase of growth and it is the right time to hand over to new forces, which is why I announced my intention to resign this year during the quarter. With our competitive customer offering, focus on delivering high-quality projects and our lean cost structure, Goodbye Kansas is well equipped to take on opportunities in existing and new markets.
Stefan Danieli
CEO
Goodbye Kansas Group
For more information, please contact:
Stefan Danieli, CEO, Goodbye Kansas Group
E-mail: stefan.danieli@goodbyekansas.com
Tel: +46 701 981049
Goodbye Kansas Group
Goodbye Kansas Group AB (publ) is a leading supplier of technology-driven visual content and develops solutions for visual effects (VFX), animation, game trailers and In-Game. The Group has some of the world's leading entertainment companies as customers. Goodbye Kansas Group has its head office in Stockholm and is listed on Nasdaq First North Growth Market with Wildeco as Certified Adviser.
This information is information that Goodbye Kansas Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-02-07 08:00 CET.
