- Economic performance in line with the latest forecasts
- Growth of +13% in economic operating income
- Economic EBITDA growth of +33% to €5.8m
- Solid cash position strengthened to €58.4m
- Powerful line-up with 8 original creations over the period 2022-2025
- Dontnod strengthens its CSR commitment by creating a dedicated committee and publishing its first report
Dontnod Entertainment, an independent French studio for the creation, development and publishing of video games presents its 2021 consolidated annual results approved by the Board of Directors meeting on April 13, 2022. The Statutory Auditors have carried out their audit procedures and the 2021 financial report will be published in the coming days.
On this occasion, Oskar Guilbert, Chairman and CEO of Dontnod, declared:
The year 2021 has been particularly rich for Dontnod. We accelerated our strategic shift towards self-publishing, supported by the strengthening of our financial resources, the entry into the capital of Tencent and the signing of our first co-production and third-party studio publishing partnership with PortaPlay. Dontnod is present in a market undergoing profound change, where technical and editorial challenges are numerous. By focusing our efforts on creating and publishing quality content, we are ideally positioned for the coming years and we will continue to cultivate the differences that have been our strength since the creation of the studio, to offer new experiences. strong and unique to our communities. Our agreement with Tencent perfectly demonstrates our ability to take advantage of the opportunities offered by the effervescence of our market without giving up our independence.“
|Audited consolidated data in K€||2020||2021|
|– including Royalties||3,781||5,738|
|– including Publisher Royalties||9,725||4,763|
|Total Economic operating income2||23,574||26,669|
|Total operating expenses (excluding depreciation and provisions)||-23,417||-25,349|
|Tax credits (including CIJV)||4,211||4,411|
|Economic EBITDA3 (including tax credits)||4,377||5,831|
|Depreciation and amortization||-2,860||-9,275|
|Economic EBIT4 (including tax credits)||1,518||-3,541|
|Amortization of goodwill||-314||-314|
|Consolidated net income||949||-3,257|
Ramp-up of the 7 production lines at the end of 2021
For the 2021 financial year, Dontnod posted an increase in its economic operating income of 13% compared to 2020, to €26.7 million, which reflects:
- a strong increase in royalties of 52%, to reach a historic high of €5.7 million;
- publisher royalties, down 51% to €4.8 million in 2021, perfectly in line with the strategy geared towards co-production and self-publishing;
- capitalized production up 61%, to €16.2 million, illustrating the 7 self-published or co-produced projects at the end of 2021.
Economic EBITDA up +33%
The increase in economic operating income is accompanied by an improvement in the studio’s operational performance for the 2021 financial year thanks to control of operating expenses excluding allocations.
Personnel costs, at €18.7 million in 2021 compared to €17.2 million a year earlier, are up 9% under control and other operating expenses up 9% to €6.3 million in 2021 compared to €5.7 million in 2020, illustrate the ramping up of production chains.
Thus, 2021 economic EBITDA stands at €5.8 million compared to €4.4 million in 2020, i.e. an increase of 33%.
After taking into account allocations to amortization, depreciation and provisions, including, as announced, a depreciation of €4.4 million for the still capitalized development costs of Twin Mirror, economic EBIT stands at (3.5 ) M€ against 1.5 M€.
Finally, the net result of the consolidated group amounts to (3.3) M€ in 2021 compared to 0.9 M€ for the previous financial year.
A solid and strengthened financial structure
|Inventories, work in progress||–||–||Provisions||2,550||2,141|
|Customers, related accounts||2,643||1,381||Financial debts||4,028||4,106|
|Other receivables||5,626||6,370||Trade payables and related accounts||1,264||1,368|
|Availabilities & VMP||21,217||58,438||Other debts||4,042||2,845|
|Total||52 105||96,078||Total||52 105||96,078|
Dontnod generated a positive cash flow of €5.9 million in the 2021 financial year, a strong improvement (+€1.7 million compared to 2020) and cash flows related to activity of €5.2 million . Associated with the fundraising of €50 million carried out in January 2021, the cash flows generated during the financial year largely covered the investments made in 2021 (€16.4 million), mainly related to games in development on self-publishing and co-production models.
As of December 31, 2021, Dontnod’s financial structure is thus strongly strengthened with shareholders’ equity amounting to €85.6 million and available cash exceeding €58.4 million.
Financial debt, at €4.1 million, includes a State Guaranteed Loan of €3.6 million repayable at maturity in 2026.
Dontnod thus has solid financial resources enabling it to pursue its long-term growth ambition.
Building a strong asset portfolio
The year 2022 will be marked by:
- the enrichment of the line-up through a co-production with Studio Tolima around a future game for which Dontnod holds the majority of the rights;
- the release of Gerda: A Flame in Winter, developed in co-production with the PortaPlay studio on Nintendo Switch and PC;
- the creation of two new production lines, one in Paris on the buoyant action-RPG segment, at the heart of the success of Vampyr, with a new project and one in Montreal with a strong narrative component carried by the creators of the best-seller Life Is Strange.
Thus, in line with its ambition for long-term profitable growth, Dontnod will continue to develop a solid portfolio of assets made up of 8 intellectual properties whose releases are spread over 4 years.
After 2 years of investment and more than 320 high-level talents today, the creation of a studio in Montreal and the structuring of the marketing and publishing departments, the next few years will mark a turning point for the Group, with the release of a wave of self-published or co-produced games. It is through this acceleration in the pace of releases and the disintermediation initiated in 2020 that Dontnod will retain the majority of its royalties and intellectual property.
A committed and responsible company
As part of the strengthening of its CSR (Corporate Social Responsibility) policy, in 2021, Dontnod set up a CSR Committee, equal and representative of the Group’s two geographical sites, composed of members of the Management Committee and bringing together several skills from different departments (human resources, marketing and communication and finance). This Committee leads Dontnod’s CSR policy, articulated around the following 2022 objectives:
- Using games to promote sustainability and education:
– By accompanying us with experts to sincerely deal with social issues,
– By continuing the collaborative internal project dealing with our areas of commitment.
- Ensure a positive, collaborative, respectful and inclusive work environment, by massively deploying awareness-raising programs among the Group’s talents.
- Supporting the talents of today and tomorrow through:
– A policy of cooptation coupled with associative commitments,
– A doubling of the frequency of individual interviews,
– A strengthening of our employee share ownership.
- Guarantee an ethical and sustainable business model through the implementation of an ethics charter accompanied by an internal training program.
- Limit our environmental footprint in our activity, by carrying out a carbon footprint that will allow us to carry out concrete actions for the future.
Dontnod produced, for the 2021 financial year, its first CSR report which materializes its commitments, as well as its objectives for the future, in order to deliver a clear and ambitious roadmap in terms of social, societal and environmental policy.