Goodbye Kansas Group decides to restructure business after strategic review

background and reason
Goodbye Kansas Group was formed in 2019 after a merger between Blow and Goodbye Kansas Studiosin which studios had established a market position with growing sales in VFX and strong customers in the areas of gaming, film and TV, while Blow brought promising products and projects into development phases.

Covid-19 presented several challenges for Goodbye Kansas Group and studios were under pressure mainly due to weaker demand in the film and television segments, while products and projects in development required significant investments. The VFX markets have performed positively over the last year in which studios have shown a positive trend. The geopolitical situation, directly affecting the capital and M&A markets, has also impacted the Company’s ability to develop businesses and projects alongside the growing studio business. The balance sheet is strained and synergies between the studio business and other businesses are considered limited. The Executive Board and management have therefore carried out a thorough strategic review of the company’s orientation.

decision on restructuring
The board of Goodbye Kansas Group has made a strategic decision to focus on the studio business going forward. As previously communicated in some cases, this means that other non-core businesses will be sold.

The decision is based on a strong market position of the studio business and a scalable technical platform in structurally growing global markets. Studios also has strong leadership that is leading the business towards larger and longer recurring projects for large global clients and has identified growing segments in in-games and animation, segments where the platform and capabilities can be fully leveraged. In addition, we see exciting outsourcing of production processes from customers to suppliers such as studios, as well as consolidation of various sectors. With a stronger balance sheet and more resources, the conditions are good to find sustainable growth in the future.

Goodbye Kansas Group shows strong demand in all segments and the order situation for Q4 and the first half of 2023 I stronger than ever after a strong first half of 2022, but with a decline I Q3 due to postponed project starts. The guidance for the studio business in the current quarter shows growth in line with the company’s communicated financial targets and a positive result.

Divestments and strategic reviews of companies
The restructuring means that there are plans to divest a number of companies. We previously communicated a proposed sale of Sayduck and a strategic review of Vobling. In addition to these processes, we also examine the possibilities for sale Endless entertainment in the IP & Products division and Plotagon in the Games & Apps division. Proceeds from divestitures are reinvested in the studio business.

New financial goals
After restructuring measures and with the new, more focused business, the financial targets were revised. The deal is expected to have lower business risk and capital but strong growth potential. The growth target remains unchanged, while the target for the EBITDA margin is adjusted downwards after excluding high-risk divested businesses. Consequently, the group’s new financial targets are 20% average annual revenue growth and an EBITDA margin of over 10% by 2024 at the latest.

cost optimization program
At the same time, a new cost optimization program was initiated that has the potential to reduce operating costs 15-20 million SEK yearly. The focus of the cost optimization program is the optimization of office space, the reduced use of consultants and the more efficient use of freelance services. In addition to the announced cost savings, the company will invest in better system tools to ensure more efficient use of production resources and improve our ability to direct, manage and track projects

Further information, contact information:
Stefan DanieliCEO and VD, Goodbye Kansas Group
Email: [email protected]
Phone: +46 701 981049

Goodbye Kansas Group
Goodbye Kansas Group AB (publ) är en ledande provider of technologically driven visual content. Företaget skapar prisbelönta visual a upplevelser for alla media och hereditary producter asm kombinerar advanced teknologi med artists i världsklass. For that tillvarata tillväxtmöjligheter har koncernen strukturerat verksamheten in tre affärsområden: Visual Content & Brand, IP & Products and Games & Apps. Visual Content & Brand provides visual content for film, TV and data storage. IP & Products uses IP for film and TV, inheriting virtual training in VR and SaaS solutions for visualizing an e-commerce product in AR. Games & apps for kartbaserade mobilspel och erbjuder en app for 3D-animering. Goodbye Kansas Group is a reference to the Nasdaq First North Growth Market and its Verksamhet i Stockholm (headquarters), LondonHelsingfors, VilniusBelgrade, Los Angeles, Vancouver also Beijing.
Bolaget har Wildeco Economic Information AB som Certified Advisor, Kungsgatan 6, 103 87, StockholmEmail: [email protected], Tel: +46 8 545 271 00.

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