REMEDY ENTERTAINMENT PLC: STRONG YEAR WITH NEW PARTNERSHIPS AND GAME LAUNCHES

Strong year with new partnerships and game launches

Excellent visibility to games roadmap

Revenue was 19 796 (14 201) thousand euros and increased +39.4 % year on year.

Operating profit (EBIT) was 11 262 (6 640) thousand euros. Operating profit margin was 56.9 % (46.8 %).

Alan Wake Remastered was launched.

Crossfire HD single-player story mode launched in China.

Alan Wake 2 was announced and will be published by Epic Games Publishing in 2023.

Remedy Entertainment signed a global development, license and distribution agreement with Tencent for the co-operative multiplayer game codenamed Vanguard.

HIGHLIGHTS FROM JANUARY–DECEMBER 2021

• Revenue was 44 726 (41 086) thousand euros and increased +8.9 % year on year.
• Operating profit (EBIT) 14 708 (13 245) thousand euros. Operating profit margin was 32.9 % (32.2 %).
• In February, Remedy raised 41 500 thousand euros through a directed offering of new shares to a limited number of domestic and international institutional investors in an accelerated book-building process.
• In February, Control Ultimate Edition was released on PlayStation 5 and Xbox Series X|S.
• In June, Remedy signed a co-publishing and development agreement with 505 Games for a multiplayer spin-off game of the award-winning Control. Collaboration terms for a future, bigger-budget Control-game (codename Heron) were also agreed.
• In October, Alan Wake Remastered was launched.
• In November, the Crossfire HD single-player story mode launched in China.
• In December Alan Wake 2 was announced and will be published by Epic Games Publishing in 2023.
• In December Remedy Entertainment signed a global development, license and distribution agreement with Tencent for the co-operative multiplayer game codenamed Vanguard.
• Increasing presence in Stockholm with the plan to establish a new studio in the city in 2022.
• Board of Directors proposes a dividend of 0.17 (0.15) euros per share.

2021 was a strong year for Remedy. We achieved excellent financial results and we successfully carried out many significant developments supporting our ambitious long-term growth plans. Some of these developments could be seen already in the fourth quarter 2021, which was a busy quarter on an operational level.

The fourth quarter’s financial performance was the pinnacle of the year. Both revenue and profitability increased significantly y-o-y, driven by an increase in development fees from our partners. Game royalties decreased y-o-y. This can be attributed to the high amount of Control-related B2B deals made in the comparison period, and to our new Q4 2021 game launches not yet having recouped their development costs and therefore not generating royalties.

One of our key objectives during the past years has been to develop our organization and capabilities so that we can more predictably develop in parallel several high-quality games and have successful game launches with our partners on a more frequent basis. The fourth quarter was a strong demonstration of this capability.

In November Smilegate’s Crossfire HD, with the single-player story mode developed by Remedy, was launched in China.  As part of a wider service-based Crossfire experience, it is still too early to evaluate the game’s success, but the early player reception has been positive. Smilegate revealed at The Game Awards (TGA) that CrossfireX will launch on February 10th 2022. A dedicated team at Remedy continues to support these launches.

Alan Wake Remastered was launched at the beginning of the fourth quarter with good reception from fans and critics. At The Game Awards in December 2021, we announced with Epic Games Publishing that Alan Wake 2 will launch in 2023. TGA has grown to be the industry’s biggest event in terms of viewership, and Alan Wake 2 was one of the highest trending games of the event, with a very positive sentiment. Alan Wake 2 is in full production.

We ended the year by signing a global development, license and distribution agreement with Tencent for the co-operative multiplayer game codenamed Vanguard. Forming this partnership is an important next step for Remedy towards becoming a game publisher with select future games. This also takes us a step further in our ambition to create longer-lasting games for our fans across the globe. Vanguard’s development continues in the proof-of-concept stage and the team is gradually being ramped up.

Overall, we advanced our long-term growth plans significantly during 2021. We now have three Remedy-owned franchises that are expanding into new games with world-class partners. In addition to story-focused single-player games, our ambition to also create longer lasting games is materializing in two multiplayer service-based games: codenamed Condor and Vanguard. The new deals we announced for these two games in 2021 with 505 Games and Tencent, respectively, are concrete steps towards becoming a game publisher and building a stronger position in the value chain.

In 2021, we made several significant developments to our proprietary Northlight-technology, which will benefit our future games and game teams. We have improved the ways we work in game projects and how game teams collaborate with the Northlight team. We have formed new external development partnerships and developed the ways of working with these partners.

We are entering the next phase of our growth plans. We now have multiple games launched and selling, and a number of promising games in development, supported by our great, global partners. The visibility to our future game roadmap is excellent, and our ability to execute that roadmap successfully is stronger than ever before. In 2022 we will continue investments in our personnel and technology to support our game projects as they are moving into the next stages of development. While these investments may have a short-term headwind on profitability, they enable major game launches between 2023 and 2025 and are essential in driving revenue and EBIT growth in the future. As a part of this next phase, we are aiming to transfer to Nasdaq Helsinki’s official list during 2022. We expect this to increase Remedy’s brand awareness, improve the liquidity of our shares, and help us reach a broader owner base. We are excited about the opportunities that lay ahead.

Source：Remedy