Remedy Entertainment FY2018 Financial Review

Key insights

7 takeaways

01
Remedy Entertainment transitioned to a multi-project development model in 2018, supported by scaling its internal Northlight engine and shared services to manage concurrent pipelines.See it on page 7
02
Annual revenue reached 20.1 million euros in 2018, a 17.3% increase over the previous year driven by major projects entering full production.See it on page 3
03
EBIT declined by 69.6% to 0.6 million euros due to deliberate investments in personnel and infrastructure, combined with a conservative accounting policy that does not capitalize development costs.See it on page 19
04
The company expanded its workforce to 200 employees by the end of 2018 to support the development of Control, the CrossFire 'Operation Frost' campaign, the Vanguard project, and an unannounced third title.See it on page 4
05
Management set a new strategic objective to launch at least one game or expansion annually starting in 2019.See it on page 20
06
Despite the significant drop in EBIT, the company remained profitable and proposed a dividend of 0.10 euros per share.See it on page 3
07
Financial projections for 2019 anticipate growth in both revenue and EBIT, with the majority of performance gains expected in the second half of the year.See it on page 3

Summary

The 2018 financial review for Remedy Entertainment outlines the company’s successful transition from a single-project development model to a multi-project structure designed to foster long-term franchise growth. By scaling its internal Northlight engine and shared services, the company has positioned itself to manage multiple concurrent game development pipelines. This strategic shift is intended to improve the company's standing within the industry value chain, allowing for greater control over intellectual property and more consistent revenue streams.

Financially, the company reported 20.1 million euros in revenue for 2018, representing a 17.3% increase over the previous year, driven by the progression of major projects into full production. However, EBIT declined by 69.6% to 0.6 million euros, a result of deliberate investments in personnel, infrastructure, and support functions, alongside a conservative accounting policy that does not capitalize product development costs. Despite this, the company maintained profitability and proposed a dividend of 0.10 euros per share.

Operational highlights for the period included the completion of the Operation Frost campaign for the CrossFire franchise, the announcement of the title Control, and the initiation of a new, unannounced third project and the multiplayer-focused Vanguard project. The company significantly expanded its workforce, reaching 200 employees by the end of 2018, and maintained high internal engagement scores. Looking ahead to 2019, the company expects revenue and EBIT growth, supported by the release of Control and a new strategic objective to launch at least one game or expansion annually. The outlook remains positive, with the majority of growth anticipated to materialize in the second half of the year.