Separate Financial Statement of CD PROJEKT S.A. for 2020

Key insights

6 takeaways

01
CD PROJEKT S.A. reported a massive revenue increase to PLN 1.88 billion in 2020, up from PLN 361.4 million in 2019, driven largely by international digital distribution.See it on page 3
02
The company achieved a net profit of PLN 1.13 billion and earnings per share of PLN 11.74, bolstered by a 0.58% effective tax rate due to the IP BOX tax relief program.See it on page 3
03
Financial results for 2020 include PLN 474.9 million in provisions specifically allocated to address costs related to the launch of Cyberpunk 2077.See it on page 64
04
Total assets grew to PLN 2.75 billion by the end of 2020, with the company maintaining a liquidity position of PLN 422.9 million in cash and cash equivalents.See it on page 3
05
The company successfully concluded its 2016–2019 incentive program and initiated a new 2020–2025 performance-based incentive scheme for employees.See it on page 70
06
Post-balance sheet challenges include a significant cybersecurity breach and ongoing class-action litigation resulting from the Cyberpunk 2077 release.See it on page 74

Summary

CD PROJEKT S.A. achieved substantial financial growth during the 2020 fiscal year, characterized by a dramatic surge in sales revenues to PLN 1.88 billion from PLN 361.4 million in 2019. This performance, driven primarily by international digital distribution, resulted in a net profit of PLN 1.13 billion and a significant increase in total assets to PLN 2.75 billion. The company’s earnings per share rose to PLN 11.74, supported by a favorable effective tax rate of 0.58% facilitated by the IP BOX tax relief program. Despite rising operating expenses and the recognition of PLN 474.9 million in provisions related to the release of Cyberpunk 2077, the company maintained a strong liquidity position, ending the year with PLN 422.9 million in cash and cash equivalents.

The financial statements, prepared in accordance with International Financial Reporting Standards, reflect a period of intense development and corporate transition. The company successfully completed the 2016–2019 incentive program, which led to a share capital increase, and subsequently launched a new 2020–2025 incentive scheme tied to performance and loyalty metrics. Accounting practices remained consistent with previous periods, utilizing straight-line depreciation for assets and rigorous impairment testing for intangible assets, including capitalized development expenditures for major titles.

Operational risks and post-balance sheet developments remain a focal point for the organization. While the company reported no outstanding bank loans, it faced increased trade liabilities and contingent obligations. Significant post-balance sheet events, including a cybersecurity breach and class-action litigation stemming from the Cyberpunk 2077 launch, underscore the complex environment in which the company operates. Nevertheless, the company maintains its status as a going concern, supported by robust cash flows and a strategic commitment to long-term intellectual property development.