CD PROJEKT Group FY 2021 Earnings Presentation

Key insights

6 takeaways

01
CD PROJEKT Group experienced a significant financial contraction in 2021, with sales revenues falling 58% to 888 million PLN and net profit declining 82% to 209 million PLN.See it on page 13
02
The company implemented the 'RED 2.0' transformation, restructuring into independent, cross-functional teams capable of managing multiple concurrent AAA projects.See it on page 2
03
Despite the earnings downturn, the company increased its liquid assets (cash, deposits, and bonds) by 32% year-over-year, ending 2021 with 1.15 billion PLN.See it on page 16
04
Future development will shift to Unreal Engine 5 through a strategic partnership with Epic Games, starting with the next installment in The Witcher series.See it on page 7
05
The company is expanding its global development footprint through the acquisition of The Molasses Flood and the establishment of CD PROJEKT RED Vancouver.See it on page 6
06
Strategic priorities for 2022 include ongoing support for Cyberpunk 2077, development of its expansion, and the release of the next-gen version of The Witcher 3: Wild Hunt.See it on page 10

Summary

The CD PROJEKT Group fiscal year 2021 earnings presentation outlines a period of significant internal restructuring and strategic realignment following the launch of Cyberpunk 2077. The primary objective for the year was the implementation of the RED 2.0 transformation, which focuses on building agile, cross-functional teams and enhancing internal technical competencies. This organizational shift includes the establishment of two independent development teams capable of managing multiple AAA projects simultaneously, supported by a strengthened executive leadership team and a renewed emphasis on employee well-being.

Financial performance for 2021 reflected a contraction compared to the previous fiscal year, with sales revenues declining by 58% to 888 million PLN and net profit falling by 82% to 209 million PLN. This downturn was largely attributed to the stabilization and support phase of Cyberpunk 2077, which involved significant service costs and the resolution of sales provisions. Despite these challenges, the company maintained a strong liquidity position, ending the year with 1.15 billion PLN in cash, bank deposits, and treasury bonds, representing a 32% increase in liquid assets over the previous year.

Strategic initiatives for 2022 and beyond center on technological modernization and franchise expansion. A key development is the formation of a strategic partnership with Epic Games to utilize Unreal Engine 5 for upcoming titles, including the next installment in The Witcher series. The company is also expanding its global footprint through new studio outposts, such as the acquisition of The Molasses Flood and the establishment of CD PROJEKT RED Vancouver. Production plans for the coming year prioritize the continued support of Cyberpunk 2077, including the development of its expansion, alongside ongoing research and development for unannounced projects and the next-gen version of The Witcher 3: Wild Hunt.