Financial · January 1, 2020

Half-Year Financial Report 2020‑21

Summary

Focus Home Interactive demonstrated significant financial and operational growth during the first half of the 2020-21 fiscal year, ending September 30, 2020. Revenue increased by 30% year-over-year to €103.6 million, while EBITDA rose 38% to €35.5 million. This performance was primarily fueled by the commercial success of SnowRunner and an 81% surge in back-catalogue sales, largely driven by a shift toward digital distribution, which accounted for 91% of total revenue. Despite these gains, net income saw a slight decline to €8.89 million, impacted by a €3.1 million loss in extraordinary results—chiefly a provision for a European Commission antitrust fine—and increased currency losses. The period was defined by major strategic and structural transformations. The company underwent a significant governance overhaul following Neology Holding’s acquisition of a 35.48% stake, leading to the appointment of new leadership including Chairman Christophe Nobileau. Simultaneously, the acquisition of German developer Deck13 Interactive for €7.1 million marked a shift toward internalizing development capabilities, contributing to a workforce expansion from 125 to 195 employees. To improve financial transparency, the company restated its balance sheet, reclassifying €48.2 million in video game investments from receivables to intangible assets. Geographically, growth was concentrated in the EMEA and Americas regions. While the company maintained a robust liquidity position with €28.7 million in net cash, it also increased its financial commitments to studios and right holders to €61.1 million. Although remote work challenges led to some development delays, the successful million-copy milestone of GreedFall and the announcement of new titles like Evil West underscore a period of aggressive expansion and portfolio diversification within the global gaming market.

From the report

CONTENTS Responsibility statement by the certifying officer…………………………………………….….page 3 Management report on the half-year financial statements 2020/21……………………………page 4 Half-year consolidated financial statements 2020/21……………………………………………page 11

Responsibility statement by the certifying officer for the half-year financial report 2020-21 I hereby certify that, to the best of my knowledge, the financial statements for the past six months presented in this half-year financial report have been prepared in accordance with the applicable accounting principles and give a true and fair presentation of the assets, liabilities, financial position and income of the company and all companies within the scope of consolidation. I further certify that the half-year management report presents a fair review of the significant events that occurred during the first six months of the financial year, their effect on the accounts, the principal transactions between related parties, as well as a description of the main risks and uncertainties for the remaining six months of the year. A Paris, le 16 Feyrier 2uz1, Monsieur Christophe Nobileau Président du pirectoire

FOCUS HOME INTERACTIVE Public limited company with Management Board and Supervisory Board with share capital of €6,395,630.40 Parc Pont de Flandre “Le Beauvaisis” - Bâtiment 28 11, Rue de Cambrai - 75019 Paris RCS Paris B 399 856 277 MANAGEMENT REPORT ON THE HALF-YEAR FINANCIAL STATEMENTS FOR THE YEAR ENDING 31 MARCH 2021 1 April to 30 September 2020 In this document, “Focus Home Interactive” or “Company” refers to the French company registered in the Paris Trade and Companies Registry under number B 399 856 277. “Group” refers to Focus Home Interactive, its American subsidiary (Focus Home Interactive USA), and the German company Deck13 Interactive GmbH (Deck13) which was acquired in June 2020 along with its wholly owned subsidiary, Deck13 Production GmbH. I. BUSINESS SITUATION OF THE COMPANY AND GROUP Founded in 1995, Focus Home Interactive is a French video game publisher that aims to produce and distribute successful original video games across the globe on all platforms. Focus Home Interactive supports game developers in the production of games and ensures the proper publicity and marketing of those games by relying on the distribution networks of its partners, i.e. the wholesale and retail networks for the physical distribution channel and the download platforms for online distributions. Focus Home Interactive has sought and succeeded in establishing a durable ecosystem of partner studios around the world. The Company has also cultivated talented individuals who have proven their potential over the years through increasingly ambitious AA games.

r online distributions. Focus Home Interactive has sought and succeeded in establishing a durable ecosystem of partner studios around the world. The Company has also cultivated talented individuals who have proven their potential over the years through increasingly ambitious AA games. The company has 152 employees on the issue date of this document and the Group has 195 employees including those of the German subsidiary, Deck13. The shares of the Company have been admitted for trading on the Euronext GROWTH® Paris stock exchange since February 2015 (ticker: ALFOC). 1. Business and significant events in the first half of 2020-21 The principal events for the period were: External growth On 23 June 2020, the Group finalised its acquisition of 100% of the share capital of the German company Deck13 Interactive GmbH (“Deck13”).1 Deck13 is a leading German game developer and a long-time partner of Focus Home Interactive with which it developed The Surge franchise. The acquisition cost a total of €7.1 million (i.e. €6.5 million in cash from a new bank financing facility2 and €600k in the Company’s treasury stock) coupled with a

game developer and a long-time partner of Focus Home Interactive with which it developed The Surge franchise. The acquisition cost a total of €7.1 million (i.e. €6.5 million in cash from a new bank financing facility2 and €600k in the Company’s treasury stock) coupled with a 1 See the press release issued on 25 June 2020, available on the Company’s website. 2 As part of its development and acquisition strategy, Focus Home Interactive received a total of €46 million in financing from five bank institutes and BPIfrance Financement in early February 2020. For more details, see section 1.2.1 of the Company’s 2019-2020 annual report.

long-term incentive plan for the Deck13 directors as described in section 3.10 of the notes. The shares to be delivered at the end of the vesting period will be issued from a capital increase. Deck13 became the first studio to be fully integrated into the Group on 1 July 2020. Deposits, sureties and guarantees At its meeting on 23 June 2020, the Management Board authorised its chairman to give, in the name of the Company, any deposits, sureties or guarantees up to a limit of €23.5 million to bank institutes, subject to the condition precedent of the Company signing the share purchase agreement with Deck13 Interactive GmbH. Commercial success of SnowRunner and exceptional performance of the back catalogue With over one million copies sold in scarcely three weeks, SnowRunner gave the Group a spectacular and historic start to the year upon its release in April 2020, despite the extremely complicated health crisis as a backdrop. The “Game of the Year” edition of World War Z, along with strong sales from flagship licences of the back catalogue, such as A Plague Tale, The Surge, GreedFall and even Farming Simulator, enabled back-catalogue revenue to rise 81% compared with the first half of 2019- 20. Summer 2020 witnessed the successful releases of HardSpace: Shipbreaker on Early Access (Black Bird Interactive), Othercide (Lightbulb Crew), MudRunner Mobile (Saber) and Necromunda: Underhive Wars (Rogue Factor).

Pages: 45
Words: 16,430
Format: PDF
Type: Financial

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