Interim Report Q3 2015

Third quarter 2015 in summary 

  • A total of 13 340 new registered user during the quarter. Registrations and conversions to paying users increased significantly in September.
  • Sales during the quarter increased to MSEK 3.5, of which MSEK 2.9 is attributable to the consolidation of Ambientmedia. Sales within the core business more than tripled compared to the second quarter. 
  • Net income was MSEK - 28.9 (0.5). Adjusted for non-recurring effects and Ambientmedia, net income was MSEK -7.2 (3.0) compared to the previous quarters where net income result where MSEK - 11.9 (-15.2). 
  • Entered agreement with Abara Equities which guarantees new issues of MSEK 30. 
  • Incentive program of 10 million warrants were implemented.

CEO Letter
Our reboot of our operations have come off to a good start. The decision to refocus on the Filipino diaspora has allowed us to more effectively target our marketing efforts and achieve good results. We follow our subscriber data on a daily basis, which we evaluate and use to adjust our efforts accordingly to what the data tells us and how it changes over time. That our work is paying off is shown in the figures for Septembers when both the amount of new registered subscribers and the share of those who became paying Premium subscribers increased significantly, albeit from a low subscription base. After the quarter we continue to see and increased trend of new subscribers, which is very satisfying and an indication that are efforts are working.

We are now working on several fronts to increase interest for our service and therefore also the revenue generated from it. After analyzing user patterns, we decided to change our marketing mix and give social media significantly greater emphasis, which has brought increased traffic to our service in a very cost effective way. Our Filipino market group is very active on different social community channels, which allows for great opportunities to engage and build loyalty through social media and other activities. We are at the same time working on how we can better present and package the content available on the streaming service. We have promoted the TV-series #Jadine which has increased traffic to our service and raised enthusiasm at our social media channels. These efforts continued in October when we also released a new focus on entertainment for kids, which we believe has great potential, since our target market has a strong orientation towards family and friends. Next in line dedicated market drivers in connection with various holidays.

A large part of the sales were generated in the Middle East where we are now have entered into cooperation with leading telecommunication operators Etisalat and Du. Together with Etisalat, we conducted a test campaign at the end of the quarter which led to a large number of subscribers for our requiring 1-day subscriptions. This is a popular type subscription in the region where the subscriptions are renewed automatically on a daily basis, without customer necessarily using the service to any great extent. In the longer term it is essential that subscribers also use the service so that they want to continue to renew their subscriptions. We are now planning more and larger campaign efforts with both Etisalat and Du. These operators have slightly different profile. Etisalat has a wider customer base while Du focuses on specific customer segments.

To ensure a long-term business, we need to constantly renew the content of our services. Together with Ambientmedia, we began negotiations with content providers to have access to better content at the right cost. We invest primarily in TV-series with the goal of a seasonally release new episodes of several series on a weekly basis.

We also need to profile Mavshack and create loyalty amongst our customers. That's why we focus on Mavshack Orginal content and exclusive content. Even in this regard Ambientmedia with its production capabilities is playing an important part. At the launch of kids programming in October we launched our first Mavshack Orginal, an animated series for youngsters, "Journey with Terry the Tarsier". We are also the exclusive digital channels for the animated adventure movie Dayo that will be launched shortly. The ambition is that more Mavshack Originals and exclusive TV-series and movies will follow these releases.

Regarding our long-term financing, we entered into an agreement for with Abara Equities, which provide an underwriting guarantee. This agreement was signed to us under substantially better terms than those we agreed to with GEM Investment Ltd., which is why we chose to cancel it. The new agreement allows us to issue shares for a total of MSEK 30 million until the autumn 2016.

Overall, we are now on a stronger foundation, thanks to investments in our product, improved supply chain of content as well as smart and effective marketing with a focused sales strategy in the right markets. Much work remains to build a long-term profitable business and a strong brand, but we have taken the first important steps. We are now continuing full speed ahead now in full process of building a larger customer base and convert them into paying subscribers.

Stockholm 30th October 2015
Anders Lindén, CEO

Next report
Interim Report 4 for the financial year 2015 will be published on 26th February 2016.

Stockholm October 30, 2015

Mavshack AB (publ)
Board of Directors

For more information contact:
CEO Anders Lindén
Phone: +46 8 124 517 90
ir@mavshack.com

About Mavshack AB
Mavshack operates a global Internet TV services with Asian entertainment. The service, which is available through Internet connected devices, is genuinely global with users in over 80 countries. With the largest library of Filipino and Indian titles, as well as agreements with Asia's leading content providers, Mavshack is the obvious choice for Asian entertainment around the world. The company operates its business on a proprietary technology platform.

Mavshack AB (publ) is a traded company listed on Nasdaq First North under the ticker MAV. Certified adviser is Erik Penser Limited. More information about the company is available at www.mavshack.se

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