Slide 1: CD PROJEKT Group 2013 Financial Results
! CD PROJEKT Group 2013 Financial Results ! Adam Kiciński President of the Board ! Piotr Nielubowicz Vice President of the Board, CFO ! Adam Badowski Board Member, CD PROJEKT RED Studio Head 1
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is valid for March 2014 and reflects existing conditions which are liable to change. Any predictions and forecasts contained herein are based on subjective opinions and expectations regarding future events, and are therefore subject to uncert
Slide 3: Financial Results
CDPRGJEKT Financial Results
Slide 4: CD PROJEKT Group - financial results
CD PROJEKT Group - financial results 2012 2013 change Sales revenues 164 040 142 172 -13% COGS 93 264 88 827 -5% Sales profits 70 776 53 345 -25% Profitability of sales 43% 38% 4
Slide 5: Sales revenues of the CD PROJEKT Group by activity segment
Sales revenues of the CD PROJEKT Group by activity segment 2012 2013 1% 41% 26% 27% 1% Sales per segment 16% cdp.pl 46% 43% GOG Ltd. Videogame development 80% 80% 60% 60% Profitability of sales 40% 40% per segment 20% 20% 0% 0% 5
Slide 6: CD PROJEKT Group - financial results
CD PROJEKT Group - financial results 2012 2013 change Sales revenues 164 040 142 172 -13% COGS 93 264 88 827 -5% Sales profits 70 776 53 345 -25% Profitability of sales 43% 38% Other expenses minus revenues 42 489 36 155 -15% Gross profit 28 287 17 190 -39% CIT 162 2 339 1344% Net profit (parent ent
Slide 7: CD PROJEKT Group - P&L
CD PROJEKT Group - P&L Q1 Q2 Q3 Q4 2013 Sales revenues 27 814 35 244 40 153 38 961 142 172 COGS 17 207 21 497 25 124 24 999 88 827 Sales profits 10 607 13 747 15 029 13 962 53 345 Profitability of sales 38% 39% 37% 36% 38% Other expenses minus revenues 7 301 9 434 9 784 9 636 36 155 Gross profit 3 3
Slide 8: CDP.pl (Distribution and publishing activities in Poland) - results
CDP.pl (Distribution and publishing activities in Poland) - results excluding sale of brand name 2012 2013 change 2012 2013 change Sales revenues 76 895 61 255 -20% 76 895 61 255 -20% COGS 51 836 43 690 -16% 51 836 43 690 -16% Sales profits 25 059 17 565 -30% 25 059 17 565 -30% Profitability of sale
Slide 9: GOG.com (Global digital videogame distribution) - results
GOG.com (Global digital videogame distribution) - results GOG Poland GOG Ltd. 2012 2013 change 2012 2013 change Sales revenues 4 108 6 172 50% 42 250 57 634 36% COGS 3 656 5 696 56% 28 102 39 805 42% Sales profits 452 476 5% 14 148 17 828 26% Profitability of sales 11% 8% 33% 31% Other expenses minu
Slide 10: GOG - daily sales in 2013
GOG - daily sales in 2013 01 02 03 04 05 06 07 08 09 10 11 12 10
Slide 11: GOG.com - longterm growth dynamics
GOG.com - longterm growth dynamics 60 50 40 30 20 10 0 -10 2008 2009 2010 2011 2012 2013 net result sales revenue 11
Slide 12: CD PROJEKT RED (Videogame development) - results
CD PROJEKT RED (Videogame development) - results 2012 2013 change Sales revenues 47 478 23 579 -50% COGS 15 520 6 337 -59% Sales profits 31 958 17 242 -46% Profitability of sales 67% 73% 9% Other expenses minus revenues 7 387 11 174 51% Gross profit 24 571 6 068 -75% CIT 2 842 972 -66% Net profit (p
Slide 13: CD PROJEKT Group - other activities
CD PROJEKT Group - other activities excl. dividend 2012 2013 change 2012 2013 change Sales revenues 6 202 6 473 4% 6 202 6 473 4% COGS 549 654 19% 549 654 19% Sales profits 5 653 5 819 3% 5 653 5 819 3% Profitability of sales 91% 90% 91% 90% Other expenses minus revenues 3 677 -8 016 -318% 7 845 5 4
Slide 14: CD PROJEKT Group - asset class breakdown
CD PROJEKT Group - asset class breakdown 215 40,5 27,7 14,0 161 21,8 15,6 34,7 35,9 8,3 19,6 14,6 11,7 14,9 52,0 108 31,1 33,4 27,7 54 95,0 89,6 90,8 94,2 0 31.12.2010 31.12.2011 31.12.2012 31.12.2013 Fixed assets Inventories Accruals Receivables Cash assets + Investment fund shares 14 *all figures
Slide 15: Selected assets of the CD PROJEKT Group
Selected assets of the CD PROJEKT Group 2012 2013 50 40 40,3 30 20 15,6 17,0 10 12,7 9,3 2,9 2,6 4,2 0 inventories and accurals (licences) accurals (licences) finished products ongoing development CDP.pl GOG Ltd. CD Projekt RED (videogame development) 15 *all figures in PLN millions
Slide 16: CD PROJEKT Group - liability class breakdown
CD PROJEKT Group - liability class breakdown 250 50,2 200 46,6 48,5 0,0 56,7 4,7 150 54% 13,4 100 33,1 33% 50 25% 23% 78 123 152 167 0 31.12.2010 31.12.2011 31.12.2012 31.12.2013 Share capital Credits and loans Payables and provisions Total debt ratio 16 *all figures in PLN millions
Slide 17: CD PROJEKT Group - cash balance
CD PROJEKT Group - cash balance 45 40,5 24 23 3 15,6 14,0 0,6 27,7 40,5 -4,7 -0,0 -13,4 -19 -33,1 -17,5 -40 31.12.2010 31.12.2011 31.12.2012 31.12.2013 Credits and loans Cash assets and IF shares Balance 17 *all figures in PLN millions
Slide 18: CD PROJEKT Group – cash flows (part 1)
CD PROJEKT Group – cash flows (part 1) 2012 2013 Net profit/loss 28 125 14 851 Change in inventories * -2 255 -18 600 Change in receivables -2 586 14 264 Change in other liabilities ** -2 436 4 990 Other adjustments 5 107 7 442 Cash from operating activities 25 955 22 947 Income tax adjustments 740
Slide 19: CD PROJEKT Group – consolidated cash flows (part 2)
CD PROJEKT Group – consolidated cash flows (part 2) 2012 2013 Cash flows from operating activities 26 695 22 054 Inflows 4 418 880 Outflows* 4 543 5 007 Cash flows from investment activities -125 -4 127 Inflows 1 674 71 Outflows (mostly repayment of credits) 11 197 5 180 Cash flows from financial ac
Slide 20: Distribution and publishing in Poland
Distribution and publishing in Poland 20
Slide 21: CDP.pl - 2013 summary
CDP.pl - 2013 summary • Expansion of CDP.pl digital distribution catalogue with new entertainment product classes: e-books and e-comics (March); motion pictures and audiobooks (October). • Conclusion of digital distribution contracts with new partners: EA (FIFA, Battlefield, Dragon Age), Warner Bros
Slide 22: CDP.pl - plans for 2014
CDP.pl - plans for 2014 • Expansion of the CDP.pl platform with new content for Mac computers. • Videogame releases: Diablo III: Reaper of Souls; digital premieres by EA, Ubisoft, Codemasters, and Warner Bros. • Motion picture releases – Frozen, Planes 2, Captain America, Saving Mr. Banks, Thor 2. •
Slide 23: Global digital videogame distribution
Global digital videogame distribution 23
Slide 24: GOG.com - 2013 summary
GOG.com - 2013 summary • 80% year-to-year increase in number of users, following more than four years of continued growth. • New initiative targeted at indie developers: extending marketing and financial support to creators of promising games. Over 700 submissions received by the end of 2013, with t
Slide 25: GOG.com - expansion of product catalogue
GOG.com - expansion of product catalogue 220 No. of new items in the catalogue (aggregate) 165 2013 2012 110 55 0 January March May July September November 25
Slide 26: GOG.com - plans for 2014 (part 1)
GOG.com - plans for 2014 (part 1) • Transactions in local currencies: confirmed support for EUR, GBP, AUD, RUB; others may follow later in 2014. • Support for local payment methods popular in selected countries: Giropay (Germany and France), Sofort (Germany), Ideal (The Netherlands), MoneyBookers (w
Slide 27: GOG.com - expected outcome of deployment of new technology
GOG.com - expected outcome of deployment of new technology ! • Expansion of product catalogue with brand-new videogame releases (heretofore unavailable under the current GOG.com business model); • Attracting new clients who find the current GOG.com model lacking; • Increased user satisfaction throug
Slide 28: Videogame development
CDPRGJEKT: Videogame development
Slide 29: PlayStation 4 and Xbox One - units purchased by end users
PlayStation 4 and Xbox One - unit purchased by end users Previous generation (PS3 and X360) Current generation (PS4 and X One) 10 000 000 7 500 000 +141% 5 000 000 2 500 000 0 1 week 3 week 5 week 7 week 9 week 11 week 13 week 15 week Source: www.vgchartz.com 29
Slide 30: CD PROJEKT RED - 2013 summary
CD PROJEKT RED - 2013 summary • Cyberpunk 2077 teaser trailer released and viewed over 10 million times. • First presentations of The Witcher 3 gameplay enthusiastically received by gamers, international media and the business community. • New development studio in Kraków. • Distribution and promoti
Slide 31: The Witcher and The Witcher 2 - aggregate sales
The Witcher and The Witcher 2 - aggregate sales 7 MLN copies sold 31
Slide 32: The Witcher 3 – one of the world’s most anticipated games
The Witcher 3 – one of the world’s most anticipated games • Featured on the cover of authoritative international gaming magazines, including Game Informer, Edge, Canard PC, PC Gamer and GameStar. • Overbooked presentations and showcases – attended by over 2 thousand top media representatives and bus
Slide 33: The Witcher 3 - project status
The Witcher 3 - project status • All storylines completed and fully implemented • All dialogues and voiceovers completed and currently being recorded in various language versions • Game world fully fleshed out; all locations and significant gameplay mechanics in place • Graphic assets and animations
Slide 34: The Witcher 3 - remaining tasks
The Witcher 3 - remaining tasks • Implementation of final optional quests • Finalization of individual language versions; immersion testing of audio content and potential adjustments • Gameplay tests and balance changes to maximize playability and ensure that the game remains challenging until the v
Slide 35: The Witcher 3 - release in February 2015
The Witcher 3 - release in February 2015 • Fewer competing products scheduled for release at the same time • Increased impact of marketing campaign directed at motivated players (rather than at clients shopping for “random” presents) • Improved product quality – with the final 20% of effort translat
Slide 36: CD Projekt RED – plans for 2014 – The Witcher comic
CD Projekt RED – plans for 2014 – The Witcher comic First issue to appear in US bookstores tomorrow. Four more issued to follow in 2014. 36
Slide 37: CD Projekt RED – plans for 2014 – The Witcher Adventure Game
CD Projekt RED – plans for 2014 – The Witcher Adventure Game Renowned global publisher – Fantasy Flight Games Expected availability in 10 language versions Premium-class product (SRP: 60 USD) Release in Q3 2014 Concurrent release for iOS and Android tablets Online and offline multiplayer modes Tradi
Slide 38: CD Projekt RED – plans for 2014 – summary
CD Projekt RED – plans for 2014 – summary • Publication of paperback and digital editions of The Witcher comics • Further intensive promotional campaign supporting the upcoming release of The Witcher 3 – presence in respected gaming media and at key trade fairs • Final refinement, testing and optimi
Slide 39: CD Projekt RED – plans for 2014 – new project
CD Projekt RED – plans for 2014 – new project • Multiplatform mobile game exploiting the advanced technical capabilities of modern tablet devices and smartphones, developed in collaboration with an external studio • Groundbreaking gameplay and business model • Under development for over a year, in p
Slide 40: Thank you!
CD PROJEKT S.A. Contact: Karolina Gnaś karolina.gnas@cdprojekt.com +48 600 539 032 Thank you! 40