Remedy Capital Markets Day 2020: Profitable Growth Company with Managed Risks

Remedy Entertainment’s strategic outlook centers on transitioning toward a multi-project business model designed to balance risk while driving profitable growth. By diversifying revenue streams through a combination of subcontracting, partner-published titles, and self-published intellectual property, the company aims to stabilize cash flow and maximize long-term value. This evolution is supported by a portfolio approach where each project contributes to the company’s broader creative capabilities, brand equity, and technological scalability.

Financial performance has shown a consistent upward trajectory, with revenue and operating profit margins expanding significantly between 2010 and 2019. Analyst estimates for 2020 projected continued growth, with revenue targets ranging between 39 million and 41 million euros and EBIT margins expected to remain robust, between 27% and 30.5%. The company emphasizes that profitability is fundamentally tied to favorable contract terms, including strategic budget sharing, effective recoupment structures, and tiered revenue-sharing agreements that mitigate the inherent volatility of game development.

The operational model relies on a sophisticated revenue recognition process that accounts for platform commissions, marketing costs, and localization expenses, ensuring that the company captures value across the entire lifecycle of a game. Looking forward, the strategy involves scaling the talent pool and production capacity to support multiple concurrent projects, including traditional AAA titles and Games-as-a-Service models. By increasing its capacity to self-finance and self-publish, the company intends to capture a larger share of the value chain. To improve transparency and investor communication, the company committed to expanding its financial reporting cycle to include business reviews for the first and third quarters starting in 2021.