Remedy Entertainment Financial Statement and Annual Report 2019

Key insights

7 takeaways

01
Remedy Entertainment achieved significant financial growth in 2019, with revenue increasing to 31.65 million EUR from 20.15 million EUR in 2018.See it on page 3
02
Operating profit rose to 6.53 million EUR in 2019, representing a 20.65% margin compared to 3.02% in the previous year.See it on page 3
03
Financial performance was bolstered by royalties from the game Control, development fees from projects like Crossfire, and a 2.5 million EUR one-time royalty payment from legacy titles.See it on page 3
04
The company transitioned to a new accounting strategy by capitalizing 1.51 million EUR in development costs for internal game brands, including Vanguard.See it on page 5
05
Operational scale expanded significantly as the average headcount grew from 169 employees in 2018 to 228 in 2019.See it on page 3
06
The company maintained a strong financial position with a 26.92% return on equity and a 73.50% equity ratio.See it on page 3
07
Future growth strategy centers on the development of three internally owned and financed game brands, while managing risks related to publisher reliance and talent retention.See it on page 4

Summary

The 2019 Annual Report for Remedy Entertainment Plc details a period of significant financial growth and operational expansion for the Finnish game development studio. The primary thesis of the report centers on the successful completion of the first phase of the company’s growth strategy, underscored by the release of the game Control and the transition toward capitalizing product development costs for internal game brands.

Financial performance in 2019 showed substantial improvement compared to previous years. Revenue reached 31.65 million EUR, a marked increase from 20.15 million EUR in 2018. Operating profit rose to 6.53 million EUR, representing a 20.65% margin, compared to 3.02% in the prior year. This growth was driven by royalties from Control, development fees from ongoing projects like Crossfire, and a one-time royalty payment of 2.5 million EUR from legacy titles. The company’s return on equity reached 26.92%, and it maintained a strong equity ratio of 73.50%. Personnel numbers also grew, with the average headcount increasing from 169 in 2018 to 228 in 2019.

The report highlights a strategic shift in accounting, as the company began capitalizing development costs for its own game brands, such as Vanguard, totaling 1.51 million EUR for the year. Looking forward, the company anticipates continued revenue and operating profit growth in 2020, primarily through organic expansion and the development of three internally owned and financed game brands. Key risks identified include potential failures in game development or commercial performance, reliance on publisher partnerships, and the challenge of retaining skilled talent. The company remains focused on long-term profitable growth while managing the inherent volatility associated with game release schedules and development fee cycles.