Financial · June 1, 2021

Half-Year Report 2021

Summary

The first half of 2021 marked a pivotal strategic transition for DON’T NOD as the studio shifted toward a self-publishing and co-production model. This evolution was underpinned by a significant strengthening of the company’s financial position, highlighted by a €50 million capital increase. A cornerstone of this funding was a €30 million investment from Tencent, intended to facilitate expansion into mobile gaming and the Asian market. By the end of June 2021, these maneuvers resulted in a robust cash position of €62.9 million and total shareholders' equity of €89.1 million, providing the necessary liquidity to support a pipeline of seven projects slated for release through 2025. Operating revenues rose 19% to €12.8 million, fueled by a tripling of royalty revenues to €2.7 million and a doubling of capitalized production to €7.8 million. While Operating EBITDA nearly doubled to €3.35 million, net income remained modest at €355,000 due to increased depreciation and amortization of capitalized assets. The studio’s economic performance was further bolstered by €2.3 million in video game tax credits, which helped offset a book operating loss and resulted in a positive economic operating EBIT of €623,000. This financial stability allowed the Group to manage its debt effectively, including the structured repayment of a €3.6 million state-guaranteed loan. Operationally, the company expanded its footprint by opening a Montreal subsidiary and launching a third-party publishing wing, beginning with a collaboration with PortaPlay. Despite the ongoing challenges of the global pandemic, the studio successfully transitioned to a permanent flexible teleworking model for its 245 employees across its Paris and Montreal locations. To align internal interests with this new growth phase, the Group implemented several new employee incentive programs and bonus share plans. These structural and financial developments collectively signal a move away from work-for-hire arrangements toward a strategy focused on owning intellectual property and diversifying global distribution channels.

From the report

DOTVIOU DON’T NOD ENTERTAINMENT Public limited company (Société Anonyme) with share capital of €168,018.74 Registered office: Parc du Pont de Flandre “Le Beauvaisis” 11 rue de Cambrai, 75019 Paris Paris Trade and Companies Register no. 504 161 902 (the “Company”) MANAGEMENT REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2021

1.<sub>FIRST </sub> HALF 2021 HIGHLIGHTS • Covid-19 update In view of the exceptional circumstances surrounding the coronavirus (Covid-19) health crisis and the ensuing government recommendations, DONTNOD has implemented a business continuity plan involving mass-scale teleworking arrangement. DONTNOD is striving to achieve optimum productivity in its production chains. However, as the duration of the Covid-19 health crisis is still unknown, release schedules in the video games industry could be adjusted depending on how the situation develops. Within the framework of government measures in France, in June 2020 the Company contracted a €3.6 million PGE state-guaranteed loan (“Prêt Garanti par l’Etat”). • Capital increase and business cooperation agreement with TENCENT On January 28, 2021, DONTNOD announced the success of its capital increase without shareholder preferential subscription rights (announced on January 27, 2021) through an accelerated bookbuilding process in favor of cer- tain categories of beneficiaries, for a total of €50 million (the “Private Placement”). The Private Placement was significantly oversubscribed, which allowed the Company to increase the Offering amount from €40 million to €50 million. The subscription price for the new shares was set at €16 per share, representing a discount of 0.9% on the last closing price.

he “Private Placement”). The Private Placement was significantly oversubscribed, which allowed the Company to increase the Offering amount from €40 million to €50 million. The subscription price for the new shares was set at €16 per share, representing a discount of 0.9% on the last closing price. TENCENT Holdings Limited (“TENCENT”), a leading global online service provider and video game publisher, sub- scribed shares in an amount of €30 million, thereby strengthening DONTNOD’s shareholding structure. This part- nership allows DONTNOD to bolster its positioning while stepping up its development plan focused on the self- publishing model, besides expanding its catalog to include mobile platforms and Asian markets. Principal terms of the Offering: The capital increase was carried out without preferential subscription rights in order to target qualified French and international investors through an accelerated bookbuilding process (the “Private Placement”). A total of 3,125,000 new ordinary shares (the “New Shares”) with a par value of €0.02 each were issued to qualified investors within the meaning of Article 2(e) of EU Regulation 2017/1129 of June 14, 2017 in accordance with the 7<sup>th</sup> resolution adopted by the Company’s Combined General Meeting of October 27, 2020, thereby increasing the share capital to €165,726.86.

Pages: 44
Words: 13,172
Format: PDF
Type: Financial

Topics

View this document on Game Industry Library.

Related Documents

Financial

Interim Financial Report for the Six Months Ended 30 September 2021

NACON experienced a transitional first half for the 2021/22 fiscal year, characterized by a strategic pivot toward long-term development despite immediate financial headwinds. Revenue for the period reached €73.0 million, representing a 15.7% year-on-year decline from a high comparison base established during the 2020 lockdowns. Net income fell to €3.8 million, down from €9.6 million in the prior year, as the company navigated a lighter release schedule and normalized operating expenses. Gaming accessories remained the primary revenue driver, accounting for 60% of total sales, while the hardware segment successfully mitigated global electronic component shortages through proactive stock procurement. The company aggressively expanded its internal development ecosystem through the total acquisition of Passtech Games, Big Ant Holding, Crea-ture Studios, and Ishtar Games. These business combinations, along with the full integration of RaceWard, increased total goodwill to €73.8 million and net intangible assets to €111.6 million. This expansionary phase led to a significant reduction in cash and cash equivalents, which dropped from €111.5 million to €57.3 million, reflecting heavy investment in studio acquisitions and rising game development costs. Financial liabilities were further impacted by earn-out structures totaling over €26 million, contingent on future performance and critical reception. Management adjusted its short-term outlook by lowering 2021/22 revenue guidance to €150–180 million following the strategic delay of four major titles. However, these delays are intended to ensure product quality and have resulted in an increased revenue target of €250–300 million for the 2022/23 fiscal year. Despite ongoing legal disputes regarding intellectual property and the operational uncertainties posed by the pandemic, the company maintains a robust financial position with no new provisions required. The focus remains on scaling internal production capabilities to drive future growth across the global gaming market.

mergers-acquisitions investment europe+1

NaconOct 2021

Financial

Half-Year Financial Report 2020‑21

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.

investment salary france

Focus Home InteractiveJan 2020

Financial

Half-Year Report of 11 Bit Studios S.A. for the First Half of 2021

11 bit studios S.A. reported a solid financial performance for the first half of 2021, characterized by a transition from immediate product launches to a period of intensive internal development. While revenue fell 28.7% year-on-year to PLN 35.8 million and net profit decreased 46.8% to PLN 13.3 million, these declines are attributed to a high comparative base in 2020 following major content releases and significant subscription contracts. Despite the lower year-on-year figures, the period represents the third-best first half in the company’s history, supported by the enduring commercial success of the Frostpunk and This War of Mine franchises. The company’s balance sheet remains exceptionally strong, with total assets growing to PLN 201.2 million and record-high cash resources and financial assets reaching PLN 114.6 million. This liquidity is being strategically deployed to fund an ambitious expansion of the studio’s production capabilities. 11 bit studios is currently managing three internal development teams working on major projects, including Frostpunk 2, Dolly, and Project 8, with a combined budget of approximately PLN 110 million. Simultaneously, the publishing division continues to scale, contributing 27% of H1 revenue and planning a PLN 50 million investment in third-party titles through 2023. Operational costs saw a notable shift during this period, with a 54% increase in salaries driven by a workforce expansion to 181 personnel and the implementation of a new 2021–2025 incentive scheme. This scheme sets aggressive five-year targets, including PLN 656 million in total revenue, signaling a long-term growth strategy. By leveraging IP Box tax relief and maintaining low-risk relationships with global distributors like Valve and Nintendo, the studio is well-positioned to transition from an indie developer into a larger-scale producer capable of annual proprietary releases.

investment market-analysis europe+1

11 bit studiosAug 2021

Financial

Interim Financial Report for the Six Months Ended 30 September 2020

Nacon achieved significant financial growth during the first half of the 2020/21 fiscal year, with consolidated revenue rising 35.9% to €86.6 million. This performance was primarily catalyzed by a 118% surge in gaming accessory sales, which now represent 60% of total revenue, alongside a robust increase in digital back-catalogue sales. The company’s transition into a high-growth phase is further evidenced by a 47.4% increase in recurring operating income to €15.7 million and a net income of €9.6 million. These results reflect a buoyant global market spanning two console generations and a strategic shift toward international exports, which now account for 83% of total turnover. The financial structure remains strong following a successful March 2020 IPO, providing a net cash position of €111.5 million. This liquidity has fueled an aggressive external growth strategy, including the acquisition of Neopica and a majority stake in RaceWard. To support these integrations, the company has implemented incentive programs such as bonus shares for studio managers to ensure creative continuity. Additionally, the accounting framework has been adjusted to reflect the digital evolution of the industry, specifically by extending the amortization period for game development costs to four years. Despite the complexities introduced by the global COVID-19 pandemic and minor provisions for historical legal disputes, the outlook remains positive. Management has upwardly revised full-year revenue guidance to between €160 million and €170 million, targeting a recurring operating margin of 18%. While the current business model lacks the deferred revenue complexities of live-service gaming, the increasing valuation of intangible assets to €81.0 million underscores a deepening commitment to internal IP development and the expansion of the publishing portfolio. This strategic trajectory positions the entity as a major integrated player in the global gaming and accessories market.

investment mergers-acquisitions market-analysis+1

NaconNov 2020