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Annual Report 11 Bit Studios S.A. for 2019

In 2019, 11 bit studios S.A. demonstrated a period of significant financial consolidation and strategic expansion, characterized by a transition toward a multi-project development and publishing model. The company reported sales revenues of 71.2 million PLN and a net profit of 21.7 million PLN. While these figures represent a decrease from the record-breaking results of 2018, the firm significantly strengthened its balance sheet, increasing total assets to 155.7 million PLN and growing its cash reserves and financial assets to nearly 100 million PLN. This robust liquidity was supported by the sustained monetization of core titles such as Frostpunk and Moonlighter, alongside the successful debut of Children of Morta. A key driver of profitability was the implementation of the IP Box tax relief, which reduced the effective tax rate from 21.94% to 13.26%. This fiscal efficiency, combined with the decision to allocate the previous year’s entire profit to reserve capital rather than dividends, has enabled the company to self-finance an ambitious growth strategy. This strategy involves expanding the internal workforce to 135 employees and establishing three distinct development teams to support a release cycle of one proprietary game every 12 to 18 months. Current internal investments are focused on "Project 8," "Project 9," and "Project 10," alongside the continued development of a proprietary game engine. The publishing division emerged as a critical pillar of the business, increasing its revenue contribution from 18% to 40% in 2019. To sustain this momentum, the company signed several new external publishing agreements and increased its investment cap for third-party projects. While the company faces risks related to currency fluctuations—with 90% of revenue denominated in USD—and the competitive global market for specialized talent, its operational stability remained high. Even with the onset of the COVID-19 pandemic in early 2020, the studio reported no material impact on liquidity or sales, having successfully transitioned to a remote work model.

investment market-analysis europe+1

11 bit studiosMar 2020

CV: Paweł Feldman

This professional profile details the career trajectory of Paweł Feldman, a senior executive in the Polish video game industry with over fifteen years of experience in business development, publishing, and marketing. The primary focus of the career history is a long-term tenure at 11 bit studios S.A., where the subject has transitioned through several leadership roles since 2012. Currently serving as the Director of Business Development, previous responsibilities at the firm included six years as Publishing Director and two years as Head of Business Development. This progression indicates a central role in the strategic growth and commercial expansion of the studio during its most formative years. The scope of the experience spans the broader European gaming landscape, with a particular emphasis on the Polish development sector. Prior to joining 11 bit studios, the professional background includes management positions at several prominent industry players, including City Interactive and CD Projekt RED. Early career milestones involved marketing management for major franchises and licensing roles at firms such as Breakpoint Ltd. and MNI Premium Ltd. This diverse background covers various industry segments, ranging from mobile and freelance business development at Aeria Games GmbH to large-scale PC and console publishing. Academic qualifications support this extensive practical experience, featuring a Master’s degree from the University of Warsaw’s Faculty of Management, completed in 2007. The chronological progression of roles demonstrates a consistent focus on the commercial and operational side of the gaming business, moving from specialized marketing and licensing tasks to high-level executive oversight of business development and publishing strategies. The overall profile reflects a deep specialization in the business mechanics of the international gaming market from a Polish corporate perspective.

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11 bit studiosJan 2020

Quarterly Report of 11 bit studios S.A. for Nine Months Ended September 30, 2019

During the first nine months of 2019, 11 bit studios S.A. transitioned into a phase of operational scaling and long-term investment following the high-performance benchmark set by major 2018 releases. Revenue for the period reached PLN 49.43 million, representing a 17.09% year-on-year decrease attributed to the high base effect of the previous year’s launches. Net profit fell to PLN 10.02 million from PLN 28.52 million in 2018, impacted by rising operating expenses, higher depreciation, and PLN 6.2 million in non-cash provisions for an internal incentive scheme. Despite these factors, the company maintained a strong financial position, with total assets growing to PLN 138.8 million and financial assets increasing to PLN 90.47 million. The financial stability of the period was underpinned by the continued monetization of established titles such as Frostpunk, This War of Mine, and Moonlighter, alongside the successful PC debut of Children of Morta. Operating cash flow remained resilient at PLN 36.63 million, a 5.48% increase year-on-year, even as net cash flow turned negative due to intensified investing activities. These investments focused on expanding internal development capacity and securing a new Warsaw headquarters, supported by a PLN 12.6 million investment loan. Strategic growth is currently driven by a significant expansion of the company’s production pipeline and publishing arm. Internal operations are scaling toward a three-team structure, with the budget for the upcoming Projekt 8 doubling to PLN 20 million and conceptual work beginning on two additional projects. Simultaneously, the publishing division has increased its scope to support third-party titles with budgets up to PLN 5.5 million. By expanding its workforce to a projected 200 employees and targeting more frequent release cycles, the company aims to mitigate revenue volatility and establish a more consistent growth trajectory within the global gaming market.

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11 bit studiosNov 2019

Half-Year Report of 11 Bit Studios S.A. for H1 2019

During the first half of 2019, 11 bit studios S.A. focused on transitioning from an indie developer to a larger-scale producer of proprietary and third-party titles. Financial performance for the period saw revenue reach PLN 30.7 million and net profit total PLN 6.4 million. While these figures represent a significant year-on-year decline from the record highs of H1 2018—driven by the initial launches of Frostpunk and Moonlighter—the company maintained a robust balance sheet. Total assets grew to PLN 126.6 million, supported by a strong cash and liquid asset position of approximately PLN 84 million, which allows for the self-funding of all current operations and future investments. The company’s stability is anchored by the continued monetization of its core portfolio, including Frostpunk, which reached 1.4 million copies sold, and Moonlighter, which surpassed 1 million players. These steady revenue streams are being reinvested into an ambitious expansion strategy. Internal development efforts have nearly doubled in investment to PLN 9.9 million as the studio progresses on "Project 8," a new title with a PLN 20 million budget. To support this growth, the company is expanding its headcount to 121 employees with the goal of maintaining three concurrent internal development teams to ensure an annual release cycle for proprietary games. Simultaneously, the publishing division is scaling its operations by increasing per-project investment caps from PLN 2 million to PLN 5 million, aiming for a release cadence of one third-party title per quarter. Looking toward the second half of 2019, growth is expected to be driven by the launch of Children of Morta and the console releases of Frostpunk. Despite the high base effect of the previous year and non-cash provisions for employee incentive schemes, the company’s market capitalization rose by over 60%, reflecting investor confidence in its long-term strategy of scaling production and publishing capabilities.

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11 bit studiosAug 2019