DELÅRSRAPPORT, 2016-01-01 - 2016-03-31 omslag Year End Report AND QUARTERLY REPORT OCTOBER - DECEMBER 2016-01-01 - 2016-12-31 *Please note that this is a translation for information purposes only. in case of any discrepancies between this version and the Swedish, the Swedish version shall prevail. Paradox Interactive AB (publ) • Org.nr: 556667-4759 • Västgötagatan 5, 6 vån • 118 27 Stockholm • www.paradoxplaza.com 1 YEAR END REPORT, 2016-01-01 - 2016-12-31 Year End Report, 2016 FOURTH QUARTER FULL YEAR E Revenues for the fourth quarter amounted to SEK 198.4 (126.8) million, an E Revenues for the period amounted to SEK 653.7 (604.1) million, an increase by 56 % compared to the same period last year. increase by 8 % compared to the same period last year. E Operating profit amounted to SEK 85.9 (43.7) million, an increase by 96 %. E Operating profit amounted to SEK 308.0 (241.7) million, an increase by E Profit before tax amounted to SEK 86.0 (44.2) million, and profit after tax 27 %. amounted to SEK 68.1 (34.9) million. E Profit before tax amounted to SEK 308.6 (242.0) million, and profit after E Cash flow from operating activities amounted to SEK 90.6 (38.3) million, tax amounted to SEK 240.4 (188.8) million. and cash flow from investing activities amounted to SEK -58.8 (-69.0) E Earnings per share amounted to SEK 2.28 (1.79). million. E The Board of Directors proposes a dividend of SEK 1.00 (0.67) per sha- E By the end of the period cash and short term placements amounted to re for the financial year 2016. SEK 246.9 (159.8) million. E Earnings per share amounted to SEK 0.65 (0.33) per share. IMPORTANT EVENTS IN THE FOURTH QUARTER E Revenue from the fourth quarter of 2016 are mainly attributable to Cities: E The new game Tyranny, developed by Obsidian Entertainment was Skylines, Stellaris, Hearts of Iron IV, Europa Universalis IV and Tyranny. released November 10. E Four expansions were released during the period; Rights of Man for Europa Universalis IV, Leviathans Story Pack for Stellaris, Together for ABOUT PARADOX INTERACTIVE Victory for Hearts of Iron IV, and Natural Disasters for Cities: Skylines. E The Paradox Interactive group includes publishing and internal development of games Downloadable content Cities: Skylines - Stadiums: European Club and licensing of White Wolf’s brands. The publishing operation publishes both internally Pack, in collaboration with football clubs FC Barcelona, Chelsea Foot- developed titles and titles developed by independent studios as well as music and books. ball Club, Juventus Football Club and Paris Saint Germain, was relea- The game portfolio includes more than 75 titles and Paradox Interactive owns the most sed. important brands, including Stellaris, Europa Universalis, Hearts of Iron, Crusader Kings, E Cities: Skylines - Content Creator Pack: High Tech Buildings was relea- Cities: Skylines, Tyranny and Magicka. sed, which is a continuation of the collaboration with the community's players to produce and sell downloadable content. From the start over ten years ago, the company has published its games all over the world, E Steam Winter sale started on December 22 and lasted until January 2. initially through physical distribution using partners, but from 2006 digitally using its own publishing arm. The development platform is primarily PC, but the company has released games on console and mobile platforms as well. The largest markets today include the US, AFTER THE END OF THE PERIOD UK, Germany, France, Russia and Scandinavia. Today, more than one million gamers play a E White Wolf announced its partnership with Paris-based video game Paradox game each month and the number of Paradox registered users exceeds five million. publisher Focus Home Interactive for a licensed PC and console game set in the World of Darkness. Paradox Interactive AB (publ) • Org.nr: 556667-4759 • Västgötagatan 5, 6th floor • S-118 27 Stockholm • www.paradoxinteractive.com 2 YEAR END REPORT, 2016-01-01 - 2016-12-31 CEO says A STRONG FINISH TO THE YEAR We’ve reached years end and can now see that our fourth quarter has closed much in the same way as the year at large - with a steady growth in turnover and profit compa- red to last year. Steam, our largest distribution partners, released a top list in the end of December with the 100 best selling games of 2016. Paradox had no less than 5 titles on the list (Stellaris, Cities:Skylines, Hearts of Iron IV, Europa Universalis IV and Crusader Kings II), a clear indication of the strength and range in our portfolio. We are cash flow positive and al- ready have a good cash position, enabling us to do larger investments and look at interesting acquisitions. However, it’s important to stress that we are in no hurry, making the right decisions for Paradox of today and Paradox of tomor- row is the priority above all. After the IPO one of the most frequently asked questions I receive is “when are you planning to exit”? As an entrepre- neur and CEO it’s hard for me to understand that question. A more suitable question in my opinion would be “how do you plan to scale”? In many ways we are just getting started on our journey. During the fourth quarter we released several expansions to our existing titles. We also released a larger title on No- vember 10th, Tyranny. Tyranny is developed by Obsidian Entertainment and has received a very warm reception by critics and gamers all over the world. We believe Tyranny Paradox Interactive AB (publ) • Org.nr: 556667-4759 • Västgötagatan 5, 6th floor • S-118 27 Stockholm • www.paradoxinteractive.com 3 YEAR END REPORT, 2016-01-01 - 2016-12-31 YEAR END REPORT, 2016-01-01 - 2016-12-31 is a game where the sales will stretch over a longer media to show them our upcoming line-up. In 2017 period of time and where the positive reception we will open up the doors to the public for the will be a contributing factor. Just like with our other first time and judging from the speed at which the titles, the developers are continuing to develop the Golden Tickets sold out, there seems to be a large game in dialogue with its community, something interest to attend. that also contributes to its long-tail potential. 2017 has the makings of being just as exciting for We continuously release expansions and new us as 2016. The organisation and all its parts is te- content to our active game titles. During the 4th eming with ideas, passion and activity. Things we quarter we released the first two larger expansions can mention right now is White Wolf who recently for both Stellaris and Hearts of Iron IV. Stellaris: Le- announced that they have licensed the brand viathans and Hearts of Iron IV: Together for Victory “Werewolf: The Apocalypse” to publisher Focus have both contributed to an increased monthly Home Interactive, for a larger PC and console activity in their respective games while the active project. In addition to this they are working with se- dialogue between our development teams and the veral smaller licensing projects, like three smaller community has contributed to a general increase mobile projects with different developers. of engagement for Paradox in all of our channels. As communicated before, we will also continuously In November we gathered the entire company for look at new platforms and business models. We a four day conference. The focus of the conferen- recently recruited industry veteran Kim Nordström, ce was to discuss company direction, identify our with a background as studio manager at King, to internal goals and also put into words the company drive our work in these areas. culture we are so keen to keep as we continue to grow. We are very happy with the outcome of the I am by nature never satisfied since I can always conference and for me personally, after 13 years identify ways to do more and better things. As we at Paradox, it was very gratifying to recognize our close the books on 2016 I can conclude that I am Paradox DNA among so many new employees. A proud of our accomplishments but also that we are clear validation that we have the right team with us far from finished. Paradox will continue to aim high on the road ahead. and work hard. A heartfelt thanks to those of you who have chosen to accompany us on our journey. In December we gathered our fans for our annual FanGathering, an event where we also announced the start of the ticket sales for PDXCon this spring. Fredrik Wester, VD PDXCon has previously been a yearly media event where we have gathered developers, partners and Paradox Interactive AB (publ) • Org.nr: 556667-4759 • Västgötagatan 5, 6th floor • S-118 27 Stockholm • www.paradoxinteractive.com Tyranny 4 YEAR END REPORT, 2016-01-01 - 2016-12-31 YEAR END REPORT, 2016-01-01 - 2016-12-31 Releases during the quarter November 10 - 2016 TYRANNY In Tyranny, the grand war between good and evil is over – and the forces of evil, led by Kyros the Overlord, have won. The Overlord’s merciless armies dominate the face of the world, and its denizens must find their new roles within the war-torn realm... even as discord begins to rumble among the ranks of Kyros’ most powerful Archons. 88 % Steam user reviews 80 7,8 Metacritic score Paradox Interactive AB (publ) • Org.nr: 556667-4759 • Västgötagatan 5, 6th floor • S-118 27 Stockholm • www.paradoxinteractive.com 5 YEARYEAR END END REPORT, REPORT, 2016-01-01 2016-01-01 - -2016-12-31 2016-12-31 Releases during the quarter EUROPA UNIVERSALIS IV - RIGHTS OF MAN The latest expansion to Europa Universalis IV adds greater depth and detail to a host of game systems.