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Treatment Leisure Plc | Inventory change launch | March 20, 2024, at 09:00 a.m. EET
Treatment Leisure Plc | Monetary Statements Launch 2023
Difficult yr ends in two established franchises after the profitable Alan Wake 2 launch
After the evaluation interval, Treatment acquired full rights for the Management franchise
Figures in parentheses confer with the comparability interval within the earlier yr, until in any other case acknowledged.
Highlights from October-December 2023
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Income decreased by 24.4% to EUR 10.3 (13.6) million.
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EBITDA decreased to EUR -3.9 (2.8) million.
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Working revenue (EBIT) was EUR -12.8 (2.1) million, and the working revenue margin was -123.9% (15.6%) of income.
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Money stream from operations was EUR 0.1 (-3.8) million.
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In September, the Board of Administrators selected a brand new possibility plan 2023.
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Alan Wake 2 launched October 27, 2023, with nice vital and participant reception.
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Alan Wake 2 received a number of awards together with Finest Recreation Route, Finest Narrative and Finest Artwork Route at The Recreation Awards on December 7, 2023.
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In November, Treatment made modifications to its core management crew. Markus Mäki assumed the position of Chief Product Officer and Mika Vehkala was appointed as Chief Know-how Officer.
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Treatment acknowledged an impairment cost of EUR 7.2 million for This fall and monetary yr 2023 outcomes, comprising the entire capitalized growth prices for codename Vanguard.
Highlights from January-December 2023
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Income decreased by 22.2% to EUR 33.9 (43.6) million.
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EBITDA was EUR -17.0 (1.9) million.
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Working revenue (EBIT) was EUR -28.6 (-0.6) million, and the working revenue margin was -84.4% (-1.3%) of income.
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Money stream from operations was EUR -16.0 (11.1) million.
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In September, The Board of Administrators selected a brand new possibility plan 2023.
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In November, Treatment made modifications to its core management crew. Markus Mäki assumed the position of Chief Product Officer and Mika Vehkala was appointed as Chief Know-how Officer.
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Treatment acknowledged an impairment cost of EUR 7.2 million for This fall and monetary yr 2023 outcomes, comprising the entire capitalized growth prices for codename Vanguard.
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The Board of Administrators proposes that no dividend can be paid for the yr 2023.
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After the evaluation interval, in February 2024, Treatment signed a contract modification with Tencent for codename Kestrel, ensuing within the Kestrel venture beginning contemporary.
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After the evaluation interval, in February 2024, Treatment introduced that Alan Wake 2 had bought 1 million models by the tip of December 2023, and 1.3 million models as of the start of February 2024.
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After the evaluation interval, in February 2024, Treatment acquired full rights to the Management franchise from 505 Video games. Upon the transaction, all publishing, distribution, advertising and different rights to Management, codename Condor, Management 2, and all future Management merchandise revert to Treatment.
Key Figures
+---------------------------+----------+----------+----------+----------+
|MEUR, IFRS, Group, |10-12/2023|10-12/2022|1-12/2023 |1-12/2022 |
|unaudited | | | | |
+---------------------------+----------+----------+----------+----------+
|Income |10.3 |13.6 |33.9 |43.6 |
+---------------------------+----------+----------+----------+----------+
|Development in income, % |-24.4% |-31.2% |-22.2% |-2.5% |
+---------------------------+----------+----------+----------+----------+
|EBITDA |-3.9 |2.8 |-17.0 |1.9 |
+---------------------------+----------+----------+----------+----------+
|Working revenue (EBIT) |-12.8 |2.1 |-28.6 |-0.6 |
+---------------------------+----------+----------+----------+----------+
|Working revenue, % of |-123.9% |15.6% |-84.4% |-1.3% |
|income | | | | |
+---------------------------+----------+----------+----------+----------+
|End result for evaluation interval |-9.9 |1.5 |-22.7 |-1.7 |
+---------------------------+----------+----------+----------+----------+
|End result for evaluation interval, %|-96.5% |10.8% |-66.8% |-4.0% |
|of income | | | | |
+---------------------------+----------+----------+----------+----------+
|Steadiness sheet whole |79.0 |99.6 |79.0 |99.6 |
+---------------------------+----------+----------+----------+----------+
|Money stream from operations |0.1 |-3.8 |-16.0 |11.1 |
+---------------------------+----------+----------+----------+----------+
|Web money |23.8 |49.9 |23.8 |49.9 |
+---------------------------+----------+----------+----------+----------+
|Money and money equivalents |20.1 |49.0 |20.1 |49.0 |
+---------------------------+----------+----------+----------+----------+
|Web gearing, % |-35.1% |-56.4% |-35.1% |-56.4% |
+---------------------------+----------+----------+----------+----------+
|Fairness ratio, % |85.5% |88.8% |85.5% |88.8% |
+---------------------------+----------+----------+----------+----------+
|Capital expenditures |1.5 |2.5 |10.0 |10.6 |
+---------------------------+----------+----------+----------+----------+
|Common variety of personnel|337 |323 |334 |307 |
|throughout evaluation interval (FTE) | | | | |
+---------------------------+----------+----------+----------+----------+
|Headcount on the finish of |352 |334 |352 |334 |
|interval | | | | |
+---------------------------+----------+----------+----------+----------+
|Earnings per share, € |-0.74 |0.11 |-1.68 |-0.13 |
+---------------------------+----------+----------+----------+----------+
|Earnings per share, € |-0.73 |0.11 |-1.66 |-0.13 |
|(diluted) | | | | |
+---------------------------+----------+----------+----------+----------+
|Variety of shares on the finish|13,490,151|13,448,600|13,490,151|13,448,600|
|of interval | | | | |
+---------------------------+----------+----------+----------+----------+
Feedback by CEO Tero Virtala
The final quarter of 2023 was a particular and memorable one for Treatment. Alan Wake returned after 13 years with the launch of Alan Wake 2 on the finish of October 2023. Alan Wake 2 is the most important and most formidable venture undertaken by Treatment. Finalizing the sport with a top quality was a precedence and required extra personnel throughout the yr than initially deliberate, which in flip delayed our different tasks shifting to the subsequent growth phases. The profitable launch of Alan Wake 2 freed up abilities for different sport tasks, leading to improved growth velocity.
We at Treatment are grateful for Alan Wake 2’s optimistic reception from each critics and gamers. The sport has a Metacritic rating of 89 inserting it among the many perfect sport launches of 2023, and it has received a number of awards together with Finest Recreation Route, Finest Narrative, and Finest Artwork Route at The Recreation Awards. With Alan Wake and Management we now have two established franchises, and our ambition is to develop them into franchises which have excessive model recognition, steadily rising person base, extra common cadence of sequels and a capability to generate revenues and earnings at a excessive stage.
The gross sales of Alan Wake 2 began nicely regardless of a aggressive launch window and an total distinctive variety of nice sport launches all year long. Alan Wake 2, as a digital solely launch, had bought over 1 million models by the tip of the fourth quarter of 2023 making it the quickest promoting Treatment sport. I wish to thank the event crew for his or her unbelievable effort in getting Alan Wake 2 achieved. As Management proved, an incredible high quality sport can have wonderful longtail gross sales and we anticipate this to be the case with Alan Wake 2 as nicely. Alan Wake 2 has already recouped a big a part of the investments made by Epic Video games Publishing, and we anticipate the sport to be a significant income and profitability driver for the yr.
In February 2024, we acquired full rights to the Management franchise from 505 Video games. It is a important optimistic step for us. Whereas 505 Video games was the fitting associate in 2017, the franchise and our ambitions have grown since. We see that the best way to develop the Management franchise is with a special enterprise mannequin and a associate.
Our full yr 2023 income and profitability have been impacted by considerably elevated investments in our personal sport tasks, and the impairment cost associated to codename Vanguard. Out of the 5 video games we had in growth throughout the yr, we co-financed 4 which might be based mostly on Treatment-owned manufacturers, whereas Max Payne1&2 remake is absolutely funded by the IP proprietor and publishing associate Rockstar Video games. Within the fourth quarter of 2023, income and profitability declined from the comparable interval.
In November we introduced a reboot to Codename Vanguard, renamed Codename Kestrel. The necessities for a profitable new free-to-play sport have clearly elevated throughout the previous years. Regardless of the promising progress throughout the first half of the yr, we determined with Tencent that the potential was not there. Kestrel returned to an idea stage. In consequence, we wrote off all of the capitalized Vanguard growth prices, impacting the profitability of the fourth quarter and full yr 2023 by EUR -7.2 million.
Management 2 continued within the proof-of-concept stage. Within the fourth quarter, the crew labored notably on world constructing and fight. Codename Condor continued within the manufacturing readiness stage and the crew targeted on fight and sport mechanics. Each video games have confirmed enjoyable and interesting sport play.
Max Payne 1&2 Remake additionally continued within the manufacturing readiness stage. The crew made appreciable progress all year long. Max Payne 1&2 remake goes to be a serious new sport with nice potential, enabled by an analogous growth funds as Alan Wake 2.
We anticipate Condor, Management 2 and Max Payne 1&2 remake tasks to advance to the subsequent phases of growth throughout the first half of 2024. With the refined multi-project mannequin in place, elevated give attention to Treatment core strengths and the dedication of just about 400 Remedians, we’re thrilled with an incredible lineup of upcoming sport launches.
I wish to thank all Remedians for his or her onerous work and dedication all year long. 2023 was a difficult but exceptional yr for Treatment. Having acquired the complete rights to Management, Condor and Management 2, we will now make the fitting product and enterprise choices specializing in long-term franchise development for each Alan Wake and Management. We proceed the yr 2024 with nice enthusiasm, extra focus, and loads of willpower, and we anticipate this to be an thrilling yr of development for Treatment.
Outlook 2024
Treatment expects its income to extend from the earlier yr and working revenue (EBIT) to enhance.
The income development price and EBIT enchancment are meaningfully depending on the selection between self-publishing and/or selecting a brand new publishing associate for the video games within the Management franchise (Codename Condor and Management 2).
We are going to specify the Outlook for 2024 when the choice for the enterprise mannequin and the potential agreements for Management 2 and Condor have been made.
Lengthy-term enterprise prospects
We have now two established personal franchises, Management and Alan Wake, that are linked by means of the Treatment Linked Universe. Rising and increasing these franchises can be a key a part of our future. As well as, we work with a associate franchise Max Payne that was initially created by Treatment.
Dividend proposal
On December 31, 2023, Treatment Leisure Plc’s non-restricted fairness was 48 020 705,23 euros, and the revenue for the monetary yr was -22 867 054,61 euros.
The Board of Administrators proposes to the Annual Basic Assembly that no dividend be paid based mostly on the steadiness sheet to be adopted for the monetary yr 2023.
Occasions after the tip of the reporting interval
On February 6, 2024, Treatment signed a contract modification with Tencent for codename Kestrel, ensuing within the Kestrel venture beginning contemporary.
On February 16, 2024, Treatment introduced that Alan Wake 2 had bought 1 million models by the tip of December 2023, and 1.3 million models as of the start of February 2024.
On February 28, 2024, Treatment acquired full rights to the Management franchise from 505 Video games. Upon the transaction, all publishing, distribution, advertising and different rights to Management, codename Condor, Management 2, and all future Management merchandise will revert to Treatment.
Webcast and convention name
Treatment will host a webcast and convention name in English on its full yr 2023 monetary outcomes for buyers, analysts and media on March 20, 2024, at 4:00 p.m. (EET). Treatment’s monetary outcomes can be introduced by CEO Tero Virtala and CFO Terhi Kauppi.
The Enterprise evaluation can be accessible after publication on Treatment’s Investor web site: https://investors.remedygames.com/financials-and-reports/financial-reports/.
Webcast particulars:
Register prematurely for the webcast:
https://remedy.zoom.us/j/89665290254?pwd=TjVNZmp6U0xtY3dXNnpLZFFPeHNaQT09
After registering, you’ll obtain a affirmation e-mail containing details about becoming a member of the webcast.
Convention name particulars:
Dial in by calling your native cellphone quantity a couple of minutes earlier than the briefing begins. Worldwide numbers can be found at: https://remedy.zoom.us/u/kbZXDFBZgc.
Finland: +358 9 7252 2471
Sweden: +46 850 539 728
United Kingdom: +44 330 088 5830
United States: +1 646 558 8656
Webinar ID: 896 6529 0254
Passcode: 487991
A recording of the webcast can be accessible afterwards on Treatment’s Investor web site: https://investors.remedygames.com/financials-and-reports/webcasts-and-presentations/.
Extra data
Veli-Pekka Puolakanaho, Company Improvement Director
Cellphone: +358 50 430 0936
E-mail:[email protected]
Treatment in short
Treatment Leisure Plc is a pioneering, globally famend online game firm based in 1995 and headquartered in Finland with an workplace in Stockholm, Sweden. Recognized for its story-driven and visually beautiful motion video games, Treatment has created a number of profitable, critically acclaimed franchises corresponding to Alan Wake, Management, and Max Payne. Treatment additionally develops its personal Northlight sport engine and instruments know-how that powers a lot of its video games. Treatment’s shares are listed on Nasdaq Helsinki’s official checklist. www.remedygames.com
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