Financial · October 1, 2020

Focus Home Interactive Annual Financial Report 2019/20

Summary

Focus Home Interactive achieved record financial performance during the 2019/20 fiscal year, characterized by a 13% increase in consolidated revenue to €142.8 million and a 63% rise in net income to €13 million. This growth was underpinned by the commercial success of key titles such as World War Z, which sold over two million copies, and million-selling releases including A Plague Tale: Innocence, Greedfall, and SnowRunner. A robust back catalogue further stabilized the business, accounting for 40% of total sales. Geographically, the Americas emerged as a primary growth driver, while the revenue mix shifted decisively toward digital distribution, which rose from 66% to 82% of total turnover. The Group utilized this period of profitability to accelerate its "Enhance-Evolve-Explore" (EEE) long-term strategy. To secure greater control over intellectual property and development capacity, the company completed the €7.1 million acquisition of Deck13 Interactive and renewed strategic partnerships with Saber Interactive and DONTNOD. Financial flexibility was significantly enhanced through the procurement of €46 million in new credit facilities, intended to fund future acquisitions and IP development. Consequently, advances to development studios rose to €48 million, with future commitments to partners doubling to €78.4 million. Despite the challenges posed by the COVID-19 pandemic, the Group maintained a solid financial structure with a net cash position of approximately €19.6 million and consolidated equity of €54.7 million. Operational risks were managed through digital sales strategies that mitigated physical retail disruptions and currency hedging to address the fact that 61% of sales are denominated in US dollars. While the Group faces an ongoing European Commission antitrust investigation regarding Steam distribution, the overall fiscal health remains strong, supported by an unqualified opinion from statutory auditors and a successful transition to remote work.

From the report

CONTENTS 1. FOCUS HOME INTERACTIVE presentation pages 5 to 9 2. Declaration by the person responsible page 11 3. Management Board’s report pages 15 to 33 4. Supervisory Board’s report pages 37 to 41 5. Statutory auditors’ report on the consolidated financial statements - Year ended 31 March 2020 pages 45 to 46 6. Consolidated financial statements pages 51 to 71 7. Statutory Auditors’ report on the financial statements - Year ended 31 March 2020 pages 75 to 76 8. Parent company’s financial statements pages 81 to 97 9. Statutory auditors’ special report on regulated agreements - Annual General Meeting held to approve the financial statements for the year ended March 31, 2020 pages 101 to 102

A MESSAGE FROM THE CHAIRMAN OF THE MANAGEMENT BOARD The 2019/20 financial year marked an important step on our road to achieving our 2022 targets. We showed our ability to reach a milestone by significantly increasing our revenue and profitability. This was possible thanks to our investment strategy aimed at improving the quality of our games and the continuous commitment of our teams. In the final part of the year, we also demonstrated our ability to adapt to a major health crisis by successfully implementing work-from-home measures while maintaining our release schedule. The past year clearly validated our Enhance – Evolve – Explore strategy. We “Enhanced” our investments in quality content, “Evolved” by increasing our control over intellectual property and “Explored” by developing our sales model and our content on new platforms. The last financial year was a very energetic year filled with major releases. It began with some historic commercial successes. The worldwide distribution of World War Z achieved significant sales and highlighted our marketing and sales teams’ unrivalled expertise, which also enabled us to break into the Asian market. The release of Greedfall and A Plague Tale: Innocence confirmed our strategy in focusing investments in the quality of our games. These two video games were fervently received by players and critics alike, especially A Plague Tale: Innocence, which earned Focus Home Interactive its first nomination from The Game Awards. We are proud to have established new powerful brands in a highly competitive market.

quality of our games. These two video games were fervently received by players and critics alike, especially A Plague Tale: Innocence, which earned Focus Home Interactive its first nomination from The Game Awards. We are proud to have established new powerful brands in a highly competitive market. The latter half of the year saw the release of The Surge 2; this eagerly awaited sequel garnered outstanding reviews from the press. The year 2019/20 also exhibited our capacity to develop a regular and recurrent income stream by leveraging the exceptional growth in our back catalogue. Our major sales success provided us with a significant growth of 13% in our top line, reaching a record of €143 million. At the same time, we continued to improve our profitability, raising our operating margin two points to 13% from last year’s 11%. All the while, we invested heavily in our future developments and successfully crossed a threshold in video game quality. The result has been an increase of 63% in our net income compared with the year before. In relation to sales development, we are now working with 17 different studios, 11 of which entered into partnership with us only this year. We also expanded our business to new platforms and laid the foundations to launch our first mobile game: Mudrunner. The end of the financial year saw countries lock down due to the COVID-19 pandemic, yet I am very proud of the responsiveness and exceptional efficiency shown by our teams.

this year. We also expanded our business to new platforms and laid the foundations to launch our first mobile game: Mudrunner. The end of the financial year saw countries lock down due to the COVID-19 pandemic, yet I am very proud of the responsiveness and exceptional efficiency shown by our teams. Focus Home Interactive established a work-from-home policy even before it became mandatory because the Group anticipated such restrictions and had prepared to ensure everyone would spend this time efficiently and in safety. While the coronavirus impacted retail sales, the digital strategy adopted by the Group enabled us to quickly reallocate resources to galvanise and maximise online sales and digital communications. Consequently, the Group saw significant boosts in its digital sales during the final quarter. Moreover, the development continued at a very efficient pace and the majority of release dates proved not to be severely affected by the lockdown. In conclusion, 2019/20 was a very successful year and it allowed us to reaffirm our ambition for the coming years. It confirmed our choices in both partner studios and our publication line. Looking toward the future, this year has again bolstered our confidence in attaining our objectives for the next two years. Such confidence is based on our solid pipeline, the incredible commitment shown by our teams and the high quality produced by our game development partners. Next year, we will sustain our largest franchises by releasing sequels or new content to our community of dedicated gamers. There are also nine high-potential games to be launched.

pipeline, the incredible commitment shown by our teams and the high quality produced by our game development partners. Next year, we will sustain our largest franchises by releasing sequels or new content to our community of dedicated gamers. There are also nine high-potential games to be launched. By 2022, we have every intention to have achieved our ambitious targets that are set down in our Enhance – Evolve – Explore strategy.

FOCUS HOME INTERACTIVE | Continuous, steady growth Focus Home Interactive, a French video games publisher, is a leader in its industry. Its expertise lies in identifying, funding, marketing and selling video games. The Group collaborates with French and international studios as well as over one hundred REVENUE retailers and digital distribution platforms. Focus games occupy various video game €142.8m segments and genres, from adventure and simulation to FPS and RPGs, and are available on 2014-2020 €126.0m all game platforms (PC, consoles, mobiles, etc.). 22% CAGR €89.9m €69.2m €75.6m VA YR M P €43.8m This role playing game from the French studio DontNod has captured the minds of the press and gamers around the world, selling over one million copies. Farming 2014 2015 2016 2017/18 2018/19 2019/20 Simulatop OPERATIONAL RESULT The 19th edition of this phenomenal franchise created by the Swiss studio GIANTS Software has sold over two million copies to date. €19.2m 2014-2020 21% CAGR €14.1m SNOW RUNNER €8.9m €9.2m €9.5m Saber’s ambitious sequel to its best-selling series sold over one million copies in under a month. €6.0m 2014 2015 2016 2017/18 2018/19 2019/20 The Group’s first game after its IPO became a symbol of *Change of financial year close in 2018 from 31/12 its catalogue’s rise in quality. The game was developed to 31/03. 2017/18 comprised 15 months by Deck13 and in 2020 became the first studio acquired by Focus.

Pages: 83
Words: 35,861
Format: PDF
Type: Financial

Topics

View this document on Game Industry Library.

Related Documents

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

Annual Financial Report & Corporate Social Responsibility Report 2020/21

Focus Home Interactive achieved record-breaking financial results for the 2020/21 fiscal year ending March 31, 2021, characterized by a 20% increase in consolidated revenue to €171 million and a 29% rise in operating profit to €24.8 million. This performance was primarily driven by the commercial success of the million-selling title SnowRunner and a 63% surge in back-catalogue sales from established franchises like World War Z and Farming Simulator. A critical driver of this growth was the continued shift toward digital distribution, which accounted for 89% of total revenue. The period represented a transformative strategic pivot from a pure publishing model toward internal development and "AA" title production. This transition was marked by the acquisitions of Deck13 Interactive and Streum On Studio, alongside a significant overhaul of the Group’s governance and ownership. Neology Holding emerged as the primary shareholder, and the company restructured its Management and Supervisory Boards to enhance oversight and achieve gender parity. To fund future external growth, the Group successfully executed a €70.35 million capital increase post-closing, significantly strengthening its liquidity position. From a corporate responsibility perspective, the Group launched its inaugural CSR strategy focused on player safety, environmental commitment, and responsible employment. While the company reported a solid gender equality index of 84/100 and transitioned to 100% renewable electricity, it faced a €2.9 million European Commission fine related to historical geo-blocking restrictions. Despite pandemic-related risks and a competitive market for talent, the Group maintained a robust balance sheet with €68.5 million in equity and a net cash position of €7 million, opting to retain all annual profits to fuel its ambitious expansion pipeline.

investment mergers-acquisitions france

Focus Home InteractiveJan 2021

Financial

Rapport Financier Semestriel 2021-22

Focus Home Interactive experienced a transformative first half of the 2021-22 fiscal year, characterized by a strategic shift toward internalizing development capabilities and strengthening its financial foundation. While revenue declined 18% year-over-year to €85.1 million and net income fell to €5.5 million, these figures reflect a transitional period impacted by pandemic-related production delays and the underperformance of specific titles like Hood: Outlaws & Legends. Despite these headwinds, the back-catalog remained resilient, driven by the sustained success of SnowRunner and Insurgency: Sandstorm, with digital sales accounting for 88% of total revenue and the Americas serving as the primary market at 49%. The period was defined by an aggressive external growth strategy and a significant expansion of the corporate balance sheet. The acquisitions of Streum On Studio, Douze-Dixièmes, and a 77.5% stake in Dotemu for €53.5 million substantially increased the Group’s headcount and net goodwill. To fund this expansion, the company completed a €70.35 million capital increase and secured a €140 million financing package. These actions resulted in a robust cash position of €82.5 million and total assets growing to €264.6 million, providing the liquidity necessary to support a doubling of financial commitments to studios and rights holders. Operational highlights included the renewal of a long-term partnership with Saber Interactive for five upcoming titles and the global reveal of Warhammer 40,000: Space Marine 2. The Group also demonstrated progress in corporate governance, doubling its ESG rating and resolving a legacy European Commission investigation. With €61.5 million currently invested in games under development, the company maintains its full-year revenue guidance of €120 million to €150 million, signaling confidence in its long-term pivot toward a more integrated developer-publisher model.

investment mergers-acquisitions france

Focus Home InteractiveJan 2022

Financial

Focus Entertainment Annual Financial Report & CSR Report 2022/23

Focus Entertainment achieved record-breaking financial results for the 2022/23 fiscal year, reporting a 36.2% increase in revenue to €194.1 million and a significant rise in net income to €7.3 million. This performance was driven by the commercial and critical success of major releases such as *A Plague Tale: Requiem*, *Atomic Heart*, and *Evil West*, alongside the steady performance of live-service titles. The Group’s strategic thesis centers on transitioning from a traditional publisher to a vertically integrated "federation of talent," marked by a 95% international sales mix and a goal to release 46 games over the next three years. To support this expansion, the Group nearly doubled its investment in game development to €65.1 million and aggressively expanded its internal studio capacity. Key structural milestones included the acquisition of majority stakes in BlackMill Games, Black Soup GmbH, and simulation specialist Dovetail Games, as well as the launch of Focus Production. These moves increased the Group’s net intangible assets to €118.3 million and expanded its workforce to nearly 400 employees. While net debt rose to €27.3 million to fund these acquisitions, the Group maintains a strong liquidity position with €72.2 million in cash and substantial undrawn credit lines. The period was also defined by a significant governance reorganization. Following the transition to a Board of Directors structure and the subsequent resignation of CEO Sean Brennan, Fabrice Larue assumed the consolidated role of Chairman and CEO. Alongside financial growth, the Group formalized its Corporate Social Responsibility (CSR) framework, focusing on player safety, environmental impact—highlighted by a 54.4% shift to renewable electricity—and employee engagement. Despite challenges such as talent retention and a declining gender equality index, the Group remains focused on diversifying its portfolio through owned intellectual property and "Games as a Service" (GaaS) projects to ensure long-term stability.

market-analysis investment france

Focus EntertainmentMar 2023