Remedy Entertainment Oy · OMXHEX:REMEDY
Remedy Entertainment Oy — H1 2018 Earnings Presentation
33 slides from Remedy Entertainment Oy's earnings presentation, Aug 14, 2018
Slide 1: Review of H1-2018
R E M E D Y E N T E R T A I N M E N T O Y J Review of H1-2018 1 4 . 8 . 2 0 1 8
Slide 2: Agenda
AGENDA 1. CEO Tero Virtala’s Review 2. Financial Results H1-2018 3. Questions & Answers
Slide 3: H1-2018 Review
H1-2018 REVIEW Tero Virtala C H I E F E X E C U T I V E O F F I C E R
Slide 4: H1-2018 Summary 1/3
H1-2018 SUMMARY | 1/3 • Revenue 9,2 million euros (+11.1%). • EBIT -0,4 million euros (-162.9%). • EBIT affected by investments to own IP (intellectual property), growing the size of the game development teams and moving to a new, custom built office. • Company does not activate product development
Slide 5: H1-2018 Summary 2/3
H1-2018 SUMMARY | 2/3 • Game projects have proceeded on planned schedules. • Remedy’s single player campaign for CrossFire 2 currently in the polishing stage of development. • Control (earlier known as codename P7) was announced at the notable game industry event E3 in Los Angeles and garnered notab
Slide 6: H1-2018 Summary 3/3
H1-2018 SUMMARY | 3/3 • Early research work on Northlight related to NVIDIA’s ray tracing technology was announced. • We moved to freshly renovated premises in Espoo, suited for our increasing headcount. • Newly appointed CFO Terhi Kauppi started working at Remedy. • Board decided on new option prog
Slide 7: We Are Remedy
WE ARE REMEDY
Slide 8: Remedy in a Nutshell
REMEDY IN A NUTSHELL • Video game company from Finland, founded in 1995. • AAA console and PC games that expand into long-lasting franchises. • Memorable characters and immersive stories with cinematic flavour. • Focused, highly polished action gameplay. • 185 professionals, 24 nationalities, 1 stud
Slide 9: Remedy Games
REMEDY GAMES Alan Wake’s American Quantum Break Death Rally Max Payne Max Payne 2 Alan Wake Nightmare 1996 2001 2003 2010 2016 2012 OVER 200 INDUSTRY AWARDS AND ACCOL ADES CURRENT PROJECTS CrossFire 2
Slide 10: Games Market
,— Se L_ —_ / GAMES MARKET © <
Slide 11: Remedy's Broad Market Focus
REMEDY’S BROAD MARKET FOCUS CONSOLES & PC BIG SCREEN GAMES for HARDCORE GAMERS GAMERS CASUAL PLAYERS MOBILE & TABLET
Slide 12: 2017 Global Games Market Exceeded Expectations
2017* | GLOBAL GAMES MARKET EXCEEDED EXPECTATIONS Total market $108.9Bn +7.8 % year-on-year growth North America $27.0Bn EMEA +4.0 % YoY $26.2Bn +8.0 % YoY APAC PC $29.3 Bn CONSOLE Latin $51.2Bn 27% $33.5 Bn America +9.2 % YoY 31% $4.4Bn MOBILE TABLET +13.9 % YoY $35.3 Bn $10.8 Bn 32% 10% 2020 marke
Slide 13: There Are Different Segments to Consider
THERE ARE DIFFERENT SEGMENTS TO CONSIDER Massive game services AAA - broad feature-set, strong multiplayer- FREE TO PLAY & long-term service approach BLOCKBUSTER GAME - for wide gamer audience SERVICES - giant budgets SERVICES Massive games AAA - broad feature-set BLOCKBUSTER - for wide gamer audien
Slide 14: Strategy
STRATEGY
Slide 15: Strategic Focus
STRATEGIC FOCUS Games that stand out in Multi-project Stronger position the market and expand in the value chain model into long-term frachises
Slide 16: Games That Stand Out and Expand into Franchises
GAMES THAT STAND OUT AND EXPAND INTO FRANCHISES • Memorable characters and immersive stories. • High quality, polished action gameplay. • Towards longer, unique games with longer- lasting gameplay mechanics and new storytelling techniques. • Games that always build basis for long-term franchises.
Slide 17: Scalability via Multi-Project Model
SCALABILITY VIA MULTI-PROJECT MODEL SINGLE PROJECT MODEL MULTI-PROJECT MODEL Project team Project team Project team 1 2 3 Project team (75 PERSONS) Shared services (25 PERSONS) (35 PERSONS)
Slide 18: Stronger Position in the Value Chain
STRONGER POSITION IN THE VALUE CHAIN CrossFire 2
Slide 19: Projects
PROJECTS CrossFire 2 • New IP created and owned by • Single-player campaign for the • A proprietary set of tools and Remedy. Gameplay-driven, sequel of the hit game from the Description technologies developed by supernatural third-person Korean developer & publisher Remedy for our games. action-adve
Slide 20: Our Current Status
OUR CURRENT STATUS y
Slide 21: Current State of Our Strategy
CURRENT STATE OF OUR STRATEGY 3rd project CrossFire 2 Released 04/2016 2015 2016 2017 H1-2018
Slide 22: CrossFire
• CrossFire, created and owned by Smilegate, is one of the world’s most popular first-person shooters. It has over 650 million registered players in 80 countries and over 8 million simultaneous players. • CrossFire generates over billion dollars in revenue yearly. • Remedy is developing a single pla
Slide 23: Control
• Master supernatural abilities in a deep and unpredictable world as you struggle to regain Control in this challenging 3rd-person action-adventure game. • Currently in full production mode, to be released by publisher 505 Games in 2019. • Game announcement part of Sony’s PlayStation media briefing
Slide 24: Third Game Project
THIRD GAME PROJECT • Based on our strategy of developing longer-lasting games and game brands with the multi-project model. • Currently in the early stages of planning. Negotiations ongoing with potential partners.
Slide 25: Talented and Motivated Personnel
TALENTED AND MOTIVATED PERSONNEL 57 % • Valued employer with a solid reputation Finns 164 • Over 1 300 applications received during H1-2018 • Career paths, personal development and 30.6.2018 (+18,0 %) balanced work-life 43 % 173 7.8.2018 20+ nationalities • Working methods and environment, leadershi
Slide 26: 2016–2018 Investments for the Future
2016–2018 INVESTMENTS FOR THE FUTURE 180 3rd project Headcount 170 160 150 CrossFire 2 140 Released 04/2016 130 120 110 2015 2016 2017 H1-2018
Slide 27: Financial Review
FINANCIAL REVIEW
Slide 28: Key Figures
KEY FIGURES Revenue 9,2 F A S (HALF-YEAR NUMBERS UNAUDITED) H1-2018 H1-2017 FY-2017 Revenue, 1 000 € 9 224 8 306 17 168 Revenue growth, % 11.1% 7.6% 4.6% EBIT, 1 000 € -388 617 2 006 % of Revenue -4.2% 7.4% 11.7% Result for interim period, 1 000 € -348 527 1 469 +11.1% % of Revenue -3.8% 6.3% 8.6% B
Slide 29: Financial Development
FINANCIAL DEVELOPMENT 20 30.0% 18 17.2 16.4 25.0% 16 15.5 13.7 20.0% 14 11.9 12 10.5 15.0% 10 9.2 10.0% 8 6 5.0% 4.7 4 3.8 0.0% 2 0 -5.0% 2010 2011 2012 2013 2014 2015 2016 2017 1H 2018 Revenue (M€) EBIT %
Slide 30: EBIT Analysis
EBIT ANALYSIS Net sales Staff expenses 10000 +11,1% 7000 24,5% • Revenue from two simultaneous 9000 6000 game projects. 8000 5000 7000 4000 • Staff expenses impacted by 6000 3000 5000 2000 increasing project headcount. 4000 1000 1H 2017 1H 2018 1H 2017 1H 2018 • Other operating expenses included EBI
Slide 31: Summary
SUMMARY • We’ve reached important milestones in 2018. • Single player campaign for CrossFire 2 has reached polishing stage and collaboration with Smilegate continues. • Control was successfully announced at E3 in Los Angeles with notable positive media and gamer attention. Control will launch in 201
Slide 32: Thank You! Questions?
THANK YOU! Questions?
Slide 33: @RemedyGames www.remedygames.com
@RemedyGames www.remedygames.com