THQ Nordic Q5 earnings: full year sales of $596m, Op. EBIT of $93m, 80 games in dev, new AAA game by 4A Games coming

DarkDetective

Member
Oct 25, 2017
3,058
The Netherlands
THQ Nordic AB have published their Q5 earnings release, which covers 1 January 2019 through 31 March 2019.
The fiscal year 2018/2019 had five quarters, due to an adjustment to the broken bookyear of Koch Media.

Link to full report

JANUARY–MARCH 2019
(Compared to January–March 2018)
  • Net sales increased 158% to SEK 1,630.5 m (~$168.94 million) (632.9).
  • EBITDA increased 174% to SEK 618.6 m (~$64.09 million) (225.9), corresponding to an EBITDA margin of 38%.
  • Operational EBIT increased 217% to SEK 395.9 m (~$41.02 million) (124.9) corresponding to an Operational EBIT margin of 24%.
  • Cash flow from operating activities amounted to SEK 777.2 m (~$80.53 million) (699.8).
  • Earnings per share was SEK 1.10 (1.02).
Net sales of Deep Silver: SEK 794 million (~$82.2 million)
Net sales of Koch Media Partner Publishing: SEK 596 million (~$61.7 million)
Net sales of THQ Nordic GmbH: SEK 143 million (~$14.8 million)
Net sales of Coffee Stain: SEK 98 million (~$10.2 million)


JANUARY 2018–MARCH 2019, 15 MONTHS
(Compared to full year 2017)
  • Net sales increased to SEK 5,754.1 m (~$596.30 million) (507.5).
  • EBITDA increased to SEK 1,592.6 m (~$165.04 million) (272.6), corresponding to an EBITDA margin of 28%.
  • Operational EBIT increased to SEK 897.1 m (~$92.97 million) (202.3) corresponding to an Operational EBIT margin of 16%.
  • Cash flow from operating activities amounted to SEK 1,356.4 m (~$140.56 million) (179.1).
  • Earnings per share was SEK 4.68 (1.88).
  • As of 31 March 2019, cash and cash equivalents were SEK 2,929.1 million (~$303.54 million). Available cash including credit facilities was SEK 4,521.1 million (~$468.52 million).

Main performance drivers of Q5 sales were Metro Exodus (Deep Silver) and Satisfactory (Coffee Stain).
Unfortunately, no hard sales numbers were shared.

Human resources
Internal developers: 860
Total internal employees: 1353 (1218 on average in the quarter)
External developers: 807

Achievements during the quarter
Metro Exodus has been the largest game launch for the Group so far, and it is already making a profit.
Net sales of business area Deep Silver were SEK 794 million, largely driven by the release of Metro Exodus, the largest game launch so far in the history of the Group. Overall, the game has performed in line with management’s expectations and has recouped all investments in development and marketing.
Notable Partner Publishing releases:
  • Kingdom Hearts III by Square Enix
  • Resident Evil 2 by Capcom
  • Dirt Rally 2.0 by Codemasters
  • Devil May Cry 5 by Capcom
  • Monster Energy Supercross 2 by Milestone
  • Dead or Alive 6 by Koei Tecmo

The Group is working on content for streaming and digital subscription services.
We are operating in a dynamic market with increasing competition between new and established digital distribution platforms, which will benefit content producers, including THQ Nordic Group. Since the beginning of 2019, the Group has signed multiple deals with notable value relating to our content on digital subscription, streaming and download services on various platforms. As we look ahead over the coming years, these deals will help us create compelling content for our players while also reducing financial risk to the company. Revenue recognition will not begin until the games are released.
The Group has reached a new agreement with 4A Games on a new AAA project. 80 games are in development.
During the period we signed multiple new projects, among them a new development agreement with 4A Games, the developers of the Metro franchise, for their upcoming, still undisclosed, AAA-project. By the end of the quarter, THQ Nordic, Deep Silver and Coffee Stain had 80 games in development, of which 48 titles are currently unannounced.
We are looking forward to an exciting upcoming year. We have a well-positioned pipeline and many marketing activities ahead – including both E3 and Gamescom – that will be important events for the Group as we showcase our games to a global audience.
I would like to end by sending my true thanks to all of our customers, colleagues, and business partners that helped to make this past year our best ever. We are on a great journey to build something substantial and lasting together, and I’m confident the coming years will be even more exciting.

MAY 22, 2019, KARLSTAD, SWEDEN

– LARS WINGEFORS, FOUNDER & CEO
 

stealthyfrog

Avenger
Jan 6, 2019
11,075
Those 1353 employees still include the idiot who thought an 8chan AMA was a good idea? A bunch of those 80 games in development are probably just cheap remasters.
 
Oct 26, 2017
7,254
Is there an apology for hosting an AMA on 8chan in that report?
I assume not or else it'd have been mentioned in the OP. I can't help but notice that Coffee Stain aside, THQ Nordic GmbH had by far the least amount of profit. Are they actually taking a hit over the fuck-up? Most don't really associate the other companies since they're just owned by them, if they even are aware of THQ Nordic owning them.

They put out a lot of stuff, so I'm surprised they only made $14 million.
 
OP
OP
DarkDetective

DarkDetective

Member
Oct 25, 2017
3,058
The Netherlands
I assume not or else it'd have been mentioned in the OP. I can't help but notice that Coffe Stain aside, THQ Nordic GmbH had by far the least amount of profit. Are they actually taking a hit over the fuck-up? Most don't really associate the other companies since they're just owned by them, if they even are aware of THQ Nordic owning them.

They put out a lot of stuff, so I'm surprised they only made $14 million.
They've only released a bunch of really late Switch ports and the anniversary edition for MX vs ATV, so it's no wonder they didn't make much money compared to Deep Silver and Coffee Stain, who had brand new releases.
 

[redacted]

Member
Oct 25, 2017
2,010
They’re doing really well, buying up all those studios seem to already be paying off and anything by 4AGames has got me interested. 80 games in development is insane for any studio let alone a relatively small on like them.
 
OP
OP
DarkDetective

DarkDetective

Member
Oct 25, 2017
3,058
The Netherlands
Q5? Are them bending the time as we know now?
The fiscal year 2018/2019 had five quarters, due to an adjustment to the broken bookyear of Koch Media.
They merged bookyears of the existing company and Koch Media after the acquisition last year. A company is not allowed to have a bookyear of less than four quarters, so in order to merge bookyears, the existing company had to ask permission with the Swedish tax authority to extend its bookyear to five quarters for once. Next fiscal year will cover 12 months like normal, from 1 April 2019 through 31 March 2020.
 

Mentalist

Member
Mar 14, 2019
2,807
I assume not or else it'd have been mentioned in the OP. I can't help but notice that Coffee Stain aside, THQ Nordic GmbH had by far the least amount of profit. Are they actually taking a hit over the fuck-up? Most don't really associate the other companies since they're just owned by them, if they even are aware of THQ Nordic owning them.

They put out a lot of stuff, so I'm surprised they only made $14 million.
Their only notable release was Darksiders III which did "fine". As opposed to 2017 where they had Expedition: Vikings, Elex and Speelforce 3- not smash hits, but still a lot more than 2018

I'm pretty sure their latest (Fade to Silence) bombed pretty hard. It'll be interesting to see how Biomutant does- it's supposed to be a summer release, iirc.

The news of a new 4A game is intriguing. Given the content map for Exodus DLC< I guess we won't hear about it until next year?
 
THQ Nordic acquires Piranha Bytes
OP
OP
DarkDetective

DarkDetective

Member
Oct 25, 2017
3,058
The Netherlands
THQ Nordic acquires legendary game studio Piranha Bytes

THQ Nordic AB (publ) is today announcing the acquisition of the assets belonging to the group of companies doing business as Piranha Bytes (“Piranha”). Piranha is the developer behind the critically acclaimed game series Gothic ®, Risen® and ELEX® and is a long-term developing partner to THQ Nordic. Through the acquisition THQ Nordic adds a strong portfolio of existing intellectual properties (IPs) and an exciting new game pipeline.

The acquisition includes the development studio and all IP rights. The parties have agreed upon not disclosing the purchase price. However, the purchase price equals c. three years of what management’s estimated royalty payments to Piranha for upcoming titles would have been, if the acquisition had not occurred.

More at the link to press release

Dedicated thread: https://www.resetera.com/threads/thq-nordic-acquires-piranha-bytes-gothic-risen-elex.118371/
 
Last edited:

Wombat_Lover

Attempted to circumvent ban with alt account
Banned
Jan 20, 2019
527
2 of those unannounced games better be Timesplitters HD Trilogy and Timesplitters 4.
 

Mentalist

Member
Mar 14, 2019
2,807
THQ Nordic acquires legendary game studio Piranha Bytes

THQ Nordic AB (publ) is today announcing the acquisition of the assets belonging to the group of companies doing business as Piranha Bytes (“Piranha”). Piranha is the developer behind the critically acclaimed game series Gothic ®, Risen® and ELEX® and is a long-term developing partner to THQ Nordic. Through the acquisition THQ Nordic adds a strong portfolio of existing intellectual properties (IPs) and an exciting new game pipeline.

The acquisition includes the development studio and all IP rights. The parties have agreed upon not disclosing the purchase price. However, the purchase price equals c. three years of what management’s estimated royalty payments to Piranha for upcoming titles would have been, if the acquisition had not occurred.

More at the link to press release
Well then.
Does this mean Elex 2 will get more funding, or will it be a "budget mid-size release" a la Darksiders III?
 
Oct 25, 2017
3,325
Net sales of Coffee Stain: SEK 98 million (~$10.2 million)
This should put the Epic exclusive Satisfactory sales at about 300k-400k sales depending on how much their back catalog sold (I think people still buy Goat Simulator?). Can't really call it a failure, but Factorio has been much more successful.
 
OP
OP
DarkDetective

DarkDetective

Member
Oct 25, 2017
3,058
The Netherlands
Piranha Bytes too. Why would they agree on this?
From the press release, "the purchase price equals c. three years of what management’s estimated royalty payments to Piranha for upcoming titles would have been, if the acquisition had not occurred."

In other words, they were already working with THQ Nordic on their next project. It's probably hard to survive for a studio like theirs, so I think they just wanted stability. The purchase price isn't high. The company itself is almost worthless.
 
Apr 23, 2018
69
Hope they invest in the development studios they have more besides just buying companies. Would like Experiment 101 to work on a Kingdom of Amaleur game after Biomutant. Which is the only game from THQ I’m excited for besides whatever 4A announces.
 

Hope

Member
Oct 28, 2017
1,054
From the press release, "the purchase price equals c. three years of what management’s estimated royalty payments to Piranha for upcoming titles would have been, if the acquisition had not occurred."

In other words, they were already working with THQ Nordic on their next project. It's probably hard to survive for a studio like theirs, so I think they just wanted stability. The purchase price isn't high. The company itself is almost worthless.
Alright! I always thought they love their independence, but if it's being bought or going under, it's an easy decision.
 

peter42O

Alt Account
Banned
Apr 21, 2019
306
80 games in development with 48 unannounced???? Holy hell.

Nice. New game from 4A Games. Wonder if it will be a new Metro game or a new IP for next gen.
 

Paul

Banned
Oct 27, 2017
2,603
Almost 2000 developers, wow. Glad Metro is successful although I would like to see actual sales numbers, were those not included?

..wait holy shit Piranhas are now also under Lars? Wow. Some strong RPG stable. Would be great if Elex 2 got bigger budget.
 
OP
OP
DarkDetective

DarkDetective

Member
Oct 25, 2017
3,058
The Netherlands
Almost 2000 developers, wow. Glad Metro is successful although I would like to see actual sales numbers, were those not included?

..wait holy shit Piranhas are now also under Lars? Wow. Some strong RPG stable. Would be great if Elex 2 got bigger budget.
Unfortunately not. I was hoping they would include them. Estimates suggest the game should have sold over 1 million copies already. Hopefully they'll share more details during their presentation later this morning, but I don't think they want to, for some reason. They did state that development costs have been earned back, so that's at least good news.
 

Magicmilner

Alt account
Banned
Jan 7, 2019
242
Hoping for a Timesplitters HD collection followed by a brand new entry.

Really looking forward to Biomutant as well.
 

derFeef

Member
Oct 26, 2017
5,813
Austria
If those idiots who did the AMA are still there in their position it is really hard for me to buy/care about any of those upcoming games. For the sake of the industry and the developers they own, THQ should have gotten rid of them.
 

Rabalder.

Member
Dec 8, 2018
963
Glad 4A are already at work on a new game. I hope to fucking god we get the Timesplitters HD Trilogy and Kingdoms of Amalur remastered.
 

dex3108

Member
Oct 26, 2017
9,349
Unfortunately not. I was hoping they would include them. Estimates suggest the game should have sold over 1 million copies already. Hopefully they'll share more details during their presentation later this morning, but I don't think they want to, for some reason. They did state that development costs have been earned back, so that's at least good news.
I mean they did get money from Epic in advance. As far as I know Epic pays for guaranteed number of sales but can they count that number as sales if they didn't reach them yet? Because they are not getting any money from Epic Store before they reach that number of guaranteed sales.
 

Kemono

Member
Oct 27, 2017
2,478
If those idiots who did the AMA are still there in their position it is really hard for me to buy/care about any of those upcoming games. For the sake of the industry and the developers they own, THQ should have gotten rid of them.
That's not so easy sadly.

One of these asshats owns a somewhat big portion of the company stocks.

They simply can't fire him. And on top of that it would be a legal nightmare for THQ to do so with european worker-protection-laws.

The other two? I can't think their existence inside THQ is a niceo ne after they hurt the brand this much.

They deserve much worse but sadly we won't hear from this stuff any time soon.
 

derFeef

Member
Oct 26, 2017
5,813
Austria
That's not so easy sadly.

One of these asshats owns a somewhat big portion of the company stocks.

They simply can't fire him. And on top of that it would be a legal nightmare for THQ to do so with european worker-protection-laws.

The other two? I can't think their existence inside THQ is a niceo ne after they hurt the brand this much.

They deserve much worse but sadly we won't hear from this stuff any time soon.
Very true sadly.
Fighting with myself how I should handle the situation.