Games roadmap fortified for future growth
Investments in game projects accelerated and new deals strengthened the portfolio with first of the major new game launches in sight for 2023
Figures in parentheses refer to the comparison period in the previous year, unless otherwise stated.
HIGHLIGHTS FROM OCTOBER-DECEMBER 2022
- Revenue decreased by 31.2% to
EUR 13.6 (19.8) million. -
EBITDA decreased to
EUR 2.8 (10.9) million, mainly due to a significantly lower level of revenue than in the comparison period. -
Operating profit (EBIT) was
EUR 2.1 (10.3) million, and operating profit margin was 15.6% (52.2%) of revenue. -
Cash flow from operations was
EUR -3.8 (-2.2) million. -
In November, Remedy signed a co-development and co-publishing agreement with
505 Games for Control 2.
HIGHLIGHTS FROM JANUARY-december 2022
- Revenue decreased by 2.5% to
EUR 43.6 (44.7) million. -
EBITDA was
EUR 1.9 (14.5) million. -
Operating profit (EBIT) was
EUR -0.6 (11.4) million, and operating profit margin was -1.3% (25.5%) of revenue. -
Cash flow from operations was
EUR 11.1 (6.1) million. -
In April, Remedy signed a development agreement with
Rockstar Games for a remake ofMax Payne andMax Payne 2: The Fall ofMax Payne video games. - In May, trading in Remedy's shares was transferred from the First North Growth Market Finland marketplace to the official list of Nasdaq Helsinki.
- In August, Remedy lowered its revenue and operating result outlook for 2022.
-
In November, Remedy signed a co-development and co-publishing agreement with
505 Games for Control 2. -
The Board of Directors proposes that a dividend of
EUR 0.10 (0.17) per share be paid for the year 2022.
KEY FIGURES
MEUR, |
10-12/2022 |
10-12/2021 |
1-12/2022 |
1-12/2021 |
Revenue | 13.6 | 19.8 | 43.6 | 44.7 |
Growth in revenue, % | -31.2% | 45.7% | -2.5% | 8.9% |
EBITDA | 2.8 | 10.9 | 1.9 | 14.5 |
Operating profit (EBIT) | 2.1 | 10.3 | -0.6 | 11.4 |
Operating profit, % of revenue | 15.6% | 52.2% | -1.3% | 25.5% |
Result for review period | 1.5 | 8.2 | -1.7 | 8.8 |
Result for review period, % of revenue | 10.8% | 41.3% | -4.0% | 19,7% |
Balance sheet total | 99.6 | 101.1 | 99.6 | 101.1 |
Cash flow from operations | -3.8 | -2.2 | 11.1 | 6.1 |
Net cash | 49.9 | 51.7 | 49.9 | 51.7 |
Cash position | 49.0 | 51.4 | 49.0 | 51.4 |
Net gearing, % | -56.4% | -59.1% | -56.4% | -59.1% |
Equity ratio, % | 88.8% | 86.4% | 88.8% | 86.4% |
Capital expenditures | 2.5 | 2.3 | 10.6 | 9.6 |
Average number of personnel during review period (FTE) | 323 | 282 | 307 | 280 |
Headcount at the end of period | 334 | 294 | 334 | 294 |
Earnings per share, E | 0.11 | 0.61 | -0.13 | 0.67 |
Earnings per share, E (diluted) | 0.11 | 0.61 | -0.13 | 0.65 |
Number of shares at the end of period | 13,448,600 | 13,298,450 | 13,448,600 | 13,298,450 |
COMMENTS BY CEO TERO VIRTALA
The year 2022 started a stronger investment phase for Remedy, which is evident in the financial figures of the fiscal year. Out of the five games in development, we are co-financing four games that are based on Remedy-owned brands and one game is fully funded by a publishing partner. When the projects advance to their next phases of development in 2023, our own investments will also increase. Our cash position at the end of the year was
In the fourth quarter of 2022, revenue declined from a strong comparable period. The fourth quarter of 2021 was exceptional, with individual revenue items, the agreement for codename Vanguard and the extended scope and budget related to the development of
In November, we announced the deal for Control 2 with
Codename Condor is a service-based game and as such a new type of game for Remedy. We are making sure the core gameplay is solid. We are building the right team and production model for the game and are patiently progressing with the development. Together with our partner
Codename Vanguard is also currently in the proof-of-concept stage. In the fall 2022, we chose to keep the game in the proof-of-concept phase longer and postpone the significant expansion of the development team until 2023. The Vanguard team has made progress and continues to work on core gameplay and meta game development as well as proving the application of Remedy-style narrative and world building. The development team has been strengthened by select key hires.
In our outlook for 2023, we expect revenue to decline from the previous year and to have a negative operating result. As described above, we are co-financing most of the projects together with our partners and all these projects are based on Remedy-owned brands increasing the value of our company in the long run. A greater number of co-financed projects results in a smaller amount of development fees. This also impacts our profitability in the short term, as a greater proportion of development costs are covered by us. However, such investment will increase the royalty potential for the upcoming years.
Since 2017, we have started the process to systematically develop our capabilities to be able to develop several high-quality games in parallel and to have successful game launches on a more frequent basis. We now have five
We have made significant technology and tool developments for Northlight in 2022. These development steps support in further enhancing the quality of our games, opening new creative opportunities, and improving the efficiency of our game development. In 2022, we almost doubled the number of new Remedians compared to 2021 and we also succeeded in retaining and developing our people. Looking ahead, we see the opportunity to keep on investing in personnel by hiring experienced, passionate and creative, challenge-driven individuals to drive our game projects onward. Our studio in
We have now gained a stronger position in the value chain in accordance with our strategic goals. Out of the five game projects, four of which are based on Remedy owned brand, Remedy is a co-publisher in three of these, giving us more influence on how the games will be commercialized. Our roadmap for the medium term is now set, and our full focus is on executing the projects in the current games pipeline. The investments in our teams, Northlight game engine and tool set, support functions and external development are the key enablers for our next growth leap during the coming years. We are planning to launch a new game per year starting from 2023, accompanied by additional free and paid content.
FUTURE OUTLOOK
Remedy expects its revenue to decline from the previous year and its operating result to be negative.
LONG-TERM BUSINESS PROSPECTS
We have several games in development, each with a world-class partner and agreed long-term development fees. These development fees form a strong and predictable revenue basis for many years. On top of these revenues, we have the less predictable but highly scalable revenue streams arising from game royalties.
Our assumptions for individual game royalties are inherently conservative, due to the amount and nature of the variables impacting game sales. However, each high-quality game that stands out in the market has the potential to succeed in a bigger way, which would drive significant revenue and operating profit growth. Our games and brands are transforming into longer-lasting experiences that typically continue to sell for years.
In relation to our longer-term game roadmap, we now have five game projects in development and will have major game launches starting from 2023. The timing of individual game launches and new game development agreements may cause variation from quarter to quarter and year to year. With several games out in the market accruing royalties and several new ones in development, this variation is expected to decrease in the coming years.
DIVIDEND PROPOSAL
The ex-dividend date will be
webcast and conference call
Remedy will host a webcast and conference call in English on its full year 2022 financial results for investors, analysts and media on
The Financial Statements Release 2022 will be available after publication on Remedy's Investor Relations website: https://investors.remedygames.com/announcements-and-releases/
Webcast details:
Register in advance for the webcast:
https://remedy.zoom.us/webinar/register/WN_S7fImKPaQ_ykZSOhxTUuHg
After registering, you will receive a confirmation email containing information about joining the webcast.
Conference call details:
Dial in by calling your local phone number a few minutes before the briefing begins. International numbers are available at: https://remedy.zoom.us/u/kWQMBp9zC
Webinar ID: 815 2631 0400
Passcode: 338475
A recording of the webcast will be available after the briefing at https://investors.remedygames.com/presentations/
More information
Veli-Pekka Puolakanaho, Corporate Development Director
Phone: +358 50 430 0936
Email: veli-pekka.puolakanaho@remedygames.com
Remedy in brief
The company employs over 330 game industry professionals from 34 different countries. Remedy's shares are listed on Nasdaq Helsinki's official list.
www.remedygames.com
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