MANAGEMENT BOARD REPORT ON THE
ACTIVITIES OF THE CD PROJEKT GROUPFOR THE PERIOD BETWEEN 1 JANUARY
AND 30 JUNE 2024

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Disclaimer
This English language translation has been prepared solely for the convenience of English-speaking readers.
Despite all the efforts devoted to this translation, certain discrepancies, omissions or approximations may
exist. In case of any differences between the Polish and the English versions, the Polish version shall prevail.
CD PROJEKT, its representatives and employees decline all responsibility in this regard.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)3

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Table of contents

4

Key highlights of the first half of 2024

5

Brief outline of the CD PROJEKT Group

6

Activity profile

11

Growth prospects of the CD PROJEKT Group12CD PROJEKT S.A. on the securities market

15

CD PROJEKT Group activity profile

16

Organizational structure of the CD PROJEKT Group18

Disclosure of business segments, products and services, outlets, suppliers and clients

30

Disclosure of external and internal factors affecting further growth of the CD PROJEKT Group32

Disclosure of factors which, in the Issuer’s opinion, will have an effect on its earnings during at least
the coming quarter

32

Disclosure of significant agreements

32

Key threats and risks related to the remaining months of the current financial year

33

Results of operations of the CD PROJEKT Group34

Discussion of the key economic and financial figures disclosed in the consolidated financial statements

52

Corporate governance

53

Entity contracted to audit financial statements

53

Shareholders controlling at least 5% of the vote at the General Meeting

55

Agreements which may result in changes in the proportions of shares held by shareholders and bondholders

57

Disclosure of the control system of employee share programs

57

Disclosure of the purchase and redemption of own shares

58

Company shares held by members of the Management Board and the Supervisory Board

58

Management structure

59

Composition of the Management Board of CD PROJEKT S.A.

61

Changes in the composition of the Management Board of CD PROJEKT S.A.

61

Composition of the Supervisory Board and Audit Committee of CD PROJEKT S.A.

62

Changes in the composition of the Supervisory Board and Audit Committee of CD PROJEKT S.A.

62

Disclosure of retirement benefits and similar compensation payable to former members of the Issuer’s
executive, supervisory or administrative bodies, and of any liabilities associated with such benefits, specifying
the aggregate amounts for each category of recipients

62

Agreements between the Issuer and members of its managing bodies concerning compensation in the eventof their resignation or dismissal, including dismissal or recall as a result of a merger

62

Changes in basic management practices at the Company and its Group

63

Applicable corporate governance policies

63

Disclosure of significant legal proceedings

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Key highlights of the first half of 2024

■ On 4 January the CD PROJEKT RED studio announced that over 5 million copies
of Phantom Liberty – the storyline expansion for Cyberpunk 2077 – had beensold between its release date (26 September 2023) and the end of 2023
■ On 11 April 2077 Cyberpunk 2077 triumphed in the “Evolving Game” category at the 20th BAFTA Games Awards gala. This award is presented to
the game with outstanding post-release support from the dev team■ On 21 May the studio released REDkit – a modding tool for
The Witcher 3: Wild Hunt, enabling users to create their own adventures set in the world of Geralt of Rivia

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)CD PROJE K T G ROUP

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BRIEF OUTLINE OF

THE CD PROJEKT GROUPC O R P O R AT E G O V E R N A N C E

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Activity profile

CD PROJEKT S.A. (also referred to as CD PROJEKT or the Company), headquartered in Warsaw, conducts
business activities in the dynamically growing global digital entertainment segment. These activities, carriedout since 1994 under the CD PROJEKT brand name, began by distributing foreign games in Poland. Pivotal
moments in the Group’s history came in 2002 with the establishment of the CD PROJEKT RED studio, which
initiated work on the Company’s first major RPG1 – The Witcher – as well as in 2008, with the launch of GOG.COM.
The CD PROJEKT Group currently conducts operating activities in two key global segments: CD PROJEKT RED
and GOG.COM.

1

Role Playing Game – a storyline-driven game based on a consistent narrative.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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CD PROJEKT RED
Development and publishing video games and managing the Company’s franchises, including through creationand production of tie-in products.

GOG.COM
Digital distribution of videogames via the Company’s proprietary GOG.COM platform and the GOG GALAXY application.
During the reporting periods 96.8% of the CD PROJEKT Group’s sales revenues were generated by exports.
Throughout the first half of 2024 North America and Europe accounted for 70.1% and 19.2% of the Group’s
sales respectively.
Map 1

The CD PROJEKT Group around the world

Warszawa
Wrocław

Seoul

BerlinVancouver

Paris
MadridKraków
Tokyo

BostonShanghai

Los AngelesSão Paulo Headquarters (CD PROJEKT RED, GOG.COM) Branch offices

 CD PROJEKT RED dev studio Media and community managers

 Publishing team representatives

 CD PROJEKT RED Inc. and The Molasses FloodManagement Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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GROWTH STRATEGY
Strategic directions related to development and support for the team, along with transformation of the videogame
development process are presented in the CD PROJEKT Group Strategy Update published in 2021 (including
the accompanying video commentary) as well as in our Strategy Update which focuses on long-term plans fordeveloping key projects and was published in 2022.
In the framework of its strategy, in the coming years the Studio intends to develop and publish the following
releases:■ A new Witcher trilogy, the first installment of which is the game codenamed Polaris;■ Project Sirius (a game with multiplayer features, developed by The Molasses Flood);■ The Witcher Remake (developed in collaboration with Fool’s Theory);■ Project Orion – upcoming game in the Cyberpunk universe.
Other than the projects revealed in the Strategy Update, the Studio also engages in other, unannounced projects, which will be publicized following positive verification of their commercial potential, or commencementof their associated informational campaigns, as appropriate.
In addition, CD PROJEKT RED is carrying out internal work on the third proprietary IP codenamed Hadar.

Management Board report on the activities of the CD PROJEKT Group between 1 January
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In line with the adopted strategy, in late 2023 CD PROJEKT RED launched a new hub in Boston (distinct fromThe Molasses Flood). This hub is tasked with work on the new game set in the Cyberpunk universe –Project Orion.
CD PROJEKT has also revealed that it was carrying on with the franchise flywheel concept, which involves
developing an ecosystem of mutually supporting products, rooted in the potential of the Studio’s franchises.
The Group collaborates with various external partners in order to create new ways to interact with its franchises.
CD PROJEKT further announced enrichment of its entertainment ecosystem with games offering multiplayer
features.
Details of the CD PROJEKT Group’s strategy are described in materials available on the Company website.
Chart 1CD PROJEKT Group – business modelPITAL

STAKEHOLDER VAINTELLECTUAL
PROPERTY

ITAL

pers, highly skilledcing games,
ed set of values

Management and protection of intellectual property
related to globally recognized franchises, beloved
by fans throughout the world

with experienceng campaigns,
les of our games

Maintaining control over the creative process– caring for the quality of products
which comprise our franchises

orting our operations

CAPITALer and Cyberpunk,
exploitation

FRANCHISEMANAGEMENT

Presenting gamers with ainnovative, high-quality

PRODUCTION

Supporting and harnessing synergies
in the context of our franchises

Games developed by experienced
teams which prioritize quality

Collaboration with experienced
quality-focused partners in expanding ourfranchises to new fields of entertainment

Parallel production by CD PROJEKT RED
development studios in Poland, USA
and Canada, and The Molasses Flood

CAPITALes and tools

IAL CAPITAL

nitiesur products

sed relations
artners

PITAL

and tie-in products

Parallel development p
supporting an ambitious
schedule

Offering unique develo
opportunities and ca
advancement options f
members while retacreative autonom

PUBLISHING
Carrying out global marketing andsales campaign – by internal PR, Marketing
and Biz Dev teams
Maintaining dialogue with gamersin 11 languages

TECHNOLOGY
Applying own tools and know-how todevelopment of open-world story-driven RPGs
Development of games in the context ofa strategic partnership which involves
the use of Unreal Engine
to support open-world gameplay

Development and expa
franchises by creating s
and supporting recogn
our brands beyond thevideogames

Steady stream of reveand earnings - enab
financial independe

PITAL

rves

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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EMPLOYMENTThe Group considers its team to be its greatest asset. We employ people who are passionate about developing world-class products and services. Their talent, involvement and motivation represent the human capitalof the CD PROJEKT Group. They, along with their creative ideas, are the force behind the Group’s success.
At CD PROJEKT, we are building a work environment based on acceptance, openness, and trust because webelieve it fosters the creativity of our teams and enhances the innovation and appeal of our creations. Thisbelief is enshrined in the CD PROJEKT S.A. Diversity Policy – an expression of basic values which apply to
the Company and guide relations among its team members, key managers and members of the Management
Board and Supervisory Board.
CD PROJEKT is also a signatory to the Diversity Charter – an international initiative organized under the auspices of the European Commission, which obligates us to institute non-discrimination policies at the workplace,take action to promote diversity and involve team members and business partners in these activities.
Chart 2

Employment structure at the CD PROJEKT Group at the end of 2023 and at the end of H1 2024

1165
Total employee count1134
Total employee countas of 31.12.2023

as of 30.06.2024

Women (31%)
Men(69%)

Women (31%)
Men (69%)

972
1 000

CD PROJEKT RED
133
141

GOG.com

The Molasses Flood

29
24
705
735

Developers
234
235

Back oﬃce

Publishing*

195
195

30.06.2024
31.12.2023* The Publishing branch comprises, among others, Marketing, PR, Business Development, Customer Relations and Game
Releases teams.

At the close of the first half of 2024 the CD PROJEKT Group employed 1 134 persons.

Management Board report on the activities of the CD PROJEKT Group between 1 January
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Growth prospects of the CD PROJEKT GroupThe CD PROJEKT Group conducts its business in the global videogame market which is one of the most dynamic branches of the global economy. Newzoo – respected analysts of the videogame and e-sports markets –estimate that by 2027 the volume of the global videogame market will reach 213 billion USD2, which implies
a cumulative annual growth rate (CAGR) of 3.7% for the 2023–2027 period. According to PWC’s “Global Entertainment & Media Outlook 2023–2027”3 report, the videogame and e-sports market is expected to grow by
7.9% annually during this period.
The global gaming community continues to grow each year, both quantitatively and in terms of engagement(i.e. time spent playing). Newzoo4 estimates that at the end of 2023 there were 3.3 billion gamers worldwide.
In 2027 the total figure is expected to reach nearly 3.8 billion, with a cumulative annual growth rate for 2021–2027
projected at 3.5%.
The growth outlook of the Group is affected by the increasing popularity of this form of entertainment as an
approachable and attractive mass market offering, and also by technological advancements which resultin increasing sophistication and realism of products offered, increasing availability and affordability of gaming
devices, along with further development of digital means of reaching potential gamers and new game distribution channels.

2

The Global Games Market Report 2024, Newzoo, 13 August 2024; accessed on 13 August 2024;
https://newzoo.com/resources/trend-reports/newzoos-global-games-market-report-2024-free-version

3 Perspectives from the Global Entertainment & Media Outlook 2023–2027, PwC, 21 June 2023, accessed on 1 August 2024;
https://www.pwc.com/gx/en/industries/tmt/media/outlook/insights-and-perspectives.html
4

The Global Games Market Report 2024, Newzoo, 13 August 2024; accessed on 13 August 2024;
https://newzoo.com/resources/trend-reports/newzoos-global-games-market-report-2024-free-version

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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CD PROJEKT S.A. on the securities market

The CD PROJEKT brand has been present on the Warsaw stock exchange since 2010. 99 910 510 Company
shares are traded on the Main Market of the Warsaw Stock Exchange under the continuous trading system.
Key shareholders of CD PROJEKT S.A. are its co-founders – Marcin Iwiński (incumbent Chairman of theSupervisory Board) and Michał Kiciński. Other major shareholders who are also members of the Company’s
Management Board are Piotr Nielubowicz – Chief Financial Officer and Adam Kiciński – Chief Strategy Officer.
Chart 3Company shareholding structure as of the publication date of this report

Marcin Iwiński
12.9%
Michał Kiciński*10.0%

Piotr Nielubowicz
6.9%

Remaining shares
60.8%

Founders andManagement Board
members

Adam Kiciński
4.0%
Nationale-Nederlanden PTE**
5.4%* According to a notification filed on 13 November 2023** According to a notification filed on 12 August 2024, the funds managed by Nationale-Nederlanden PTE S.A. collectively held 5.42% ofCompany shares, including 5.03% in possession of Nationale-Nederlanden OFE

Chart 4

CD PROJEKT S.A. stock price and the WIG20 index between 1 January and 30 June 2024

130

CD PROJEKT

WIG20

120

110

100

90

80

01.202402.2024

03.202404.2024

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)05.202406.2024

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Between 1 January and 30 June 2024 the Company stock price fluctuated between 99.20 PLN (19 January 2024)
and 145.00 PLN (22 May 2024). During this half-year period the stock price increased by 24.2%, to 138.95 PLN
at the end of the final trading day of H1 2024 (28 June 2024). Over the same period the WIG20 index gained
11,2% while the main WIG index gained 14.4%.
At the end of June 2024 the market capitalization of CD PROJEKT S.A. was 13.9 billion PLN.
Chart 5

Average daily value of trade in CD PROJEKT S.A. shares (by month) between 1 January and
30 June 2024 (PLN millions)

100
90
80
70
Average daily value of
trade; H1 2023
- 53 million PLN

60
50

Average daily value of
trade; H1 2024
- 48 million PLN

40
30
20
10
0

January

February

March

2023

April

May

June

2024

The aggregate value of trade for the first half of 2024 was 5.9 billion PLN, which is 10% less than during thereference period in 2023. The average daily value of trade was 47.9 million PLN, compared to 53.2 million
PLN the year before. An increase was, however, observed in the average number of transactions per trading
day – from 6 017 to 6 327.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Table 1

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

Key indicators of CD PROJEKT S.A. stock
H1 2024

H1 2023

Change

1.70

0.90

88.9%

99 910 510

99 910 510

0%Highest closing price during fiscal year (PLN)

145.00170.00-14.7%

Lowest closing price during fiscal year (PLN)

99.20

105.64-6.1%

Price at beginning of period (PLN)

111.90129.34-13.5%

Price at end of period (PLN)

138.95154.85-10.3%

Average price during period (PLN)

119.54128.03-6.6%

13 882 565

15 471 142-10.3%

Average number of transactions per trading day

6 327

6 017

5.2%

Average daily value of trade (PLN thousands)

47 97953 250-9.9%

Average daily trading volume (shares)

395 947407 967-2.9%

Net earnings per share (PLN)
Quantity of shares in trading (in thousands) at end of periodMarket capitalization at end of period (PLN thousands)

As of the publication date of this report 24 brokerage houses, both foreign and domestic, issue recommendations concerning Company stock. The full list of analysts and brokerage houses which issue recommendations concerning Company stock can be found on the CD PROJEKT website at https://www.cdprojekt.com/en/
investors/analysts/.

Management Board report on the activities of the CD PROJEKT Group between 1 January
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CD PROJEKT GROUPACTIVITY PROFILEC O R P O R AT E G O V E R N A N C E

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Organizational structure of the CD PROJEKT GroupAs of 30 June 2024, the CD PROJEKT Group consisted of the parent entity – CD PROJEKT S.A. – and fivesubsidiaries: GOG sp. z o.o., CD PROJEKT RED Inc., CD PROJEKT RED Vancouver Studio Ltd., The Molasses
Flood LLC and CD PROJEKT SILVER Inc.
Chart 6

CD PROJEKT Group at the end of the first half of 2024 (capital and voting share)

CD PROJEKT S.A.

GOG sp. z o.o.*100%

The Molasses Flood LLC
82%

CD PROJEKT RED Inc.*100%

CD PROJEKT SILVER Inc.
100%

CD PROJEKT RED Vancouver Studio Ltd.
100%

*Consolidated
companies*Spółki objęte
konsolidacją

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Table 2

BUSINESS ACTIVIT Y

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C O R P O R AT E G O V E R N A N C E

Basic activity profile of each member company of the CD PROJEKT Group as of 30 June 2024

Company

Scope of activity

CD PROJEKT S.A.

The principal scope of activity of the company, carried out through its CD PROJEKT RED
studio, involves development and publishing of videogames based on the Company’s IP,
selling the associated distribution rights, as well as manufacturing, selling, licensing andpublishing tie-in products. CD PROJEKT S.A. also serves as the holding company of the CD
PROJEKT Group, and coordinates the activities of subsidiaries which comprise the Group(offices in Warsaw, Kraków and Wrocław).

GOG sp. z o.o.

The company distributes videogames through online channels to customers from aroundthe world. The company also owns the GOG.COM proprietary global digital distribution platform and the GOG GALAXY application (office in Warsaw).

CD PROJEKT RED Inc.

The company coordinates development work on Project Orion and participates in publishingand promotional activities focused on CD PROJEKT Group projects (office in Boston).

CD PROJEKT RED
Vancouver Studio Ltd.

The company coordinates development in the framework of the CD PROJEKT RED studio(office in Vancouver).

The Molasses
Flood LLC

This gamedev studio is working on the project codenamed Sirius (office in Boston).

CD PROJEKTSILVER Inc.

A company established to participate in development of entertainment products tied to
CD PROJEKT brands.

No changes in the organizational structure and composition of the CD PROJEKT Group occurred during thereporting period.
The above member companies of the CD PROJEKT Group, incorporated as of 30 June 2024, except for
CD PROJEKT RED Vancouver Studio Ltd., The Molasses Flood LLC and CD PROJEKT SILVER Inc., were subject to full consolidation. Detailed information can be found in the Consolidated Financial Statement of the
CD PROJEKT Group for the first half of 2024.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Disclosure of business segments, products andservices, outlets, suppliers and clients

In the first half of 2024 the Group conducted business activities in two segments:■ CD PROJEKT RED,
■ GOG.COM.

CD PROJEKT RED SEGMENT
Target and scope of business activity

Activities within this segment focus on the Company’s franchises – The Witcher and Cyberpunk – and involvethe following:■ developing and publishing videogames;■ coordinating promotion, distribution and sales of own products;■ managing the Group’s franchises and IP;■ collaborating with external partners in the scope of creating, selling, licensing or publishing tie-in products
based on the Group’s franchises.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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C O R P O R AT E G O V E R N A N C E

Key productsVideogame development commenced in 2002 and initially focused on the studio’s RPG debut: The Witcher.
This game, set in Andrzej Sapkowski’s fantasy world, was released in 2007 to global acclaim, garnering over
100 awards and accolades.
The Studio’s key product portfolio currently includes the following videogames:■ The Witcher;■ The Witcher 2: Assassins of Kings;■ The Witcher 3: Wild Hunt with two expansion packs – Hearts of Stone and Blood and Wine;■ Cyberpunk 2077 with its expansion pack – Phantom Liberty.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Key sources of revenue
Sales of CD PROJEKT RED games are carried out under the following core business models:■ sales of territorial distribution rights (for box and digital editions), settled post factum on the basis of monthlyor quarterly sales reports / licensing reports submitted by the Company’s business partners;■ supplies of physical box editions to the Company’s business partners for retail resale;■ supplies of batches of activation codes which permit the game to be downloaded and installed;■ sales carried out through optional microtransactions in GWENT: The Witcher Card Game.
Digital distribution agreements concluded by the Company are typically settled in monthly cycles, while distribution of physical videogame editions follows quarterly reporting cycles. Depending on the specific partner
or contract, the Company also collects licensing reports – these are submitted 30, 45 or 60 days following theend of each reporting period (typically each month or quarter).
In the first half of 2024 the most important CD PROJEKT RED products from the point of view of revenues were:■ Cyberpunk 2077 together with its expansion – Phantom Liberty;■ The Witcher 3: Wild Hunt, together with its expansions – Hearts of Stone and Blood and Wine.
Revenues were also generated – to a lesser degree – by micropayments in GWENT: The Witcher Card Gameand Thronebreaker: The Witcher Tales. Additionally, the Company offered earlier instalments in The Witcher
franchise, including The Witcher and The Witcher 2: Assassins of Kings, both of which continue to attract players
and generate revenues.
The Company also obtained revenues from tie-in products (in the framework of the “franchise flywheel” concept)
associated with The Witcher and Cyberpunk franchises.
Key business partners and suppliers
Within the CD PROJEKT RED activity segment, the Group carries out active distribution of its games for various
hardware platforms, through leading digital distribution platforms (e.g. Steam, PlayStation Store, Xbox GamesStore, Epic Games Store, Nintendo, Apple App Store, Google Play and Humble Bundle, along with its own
proprietary GOG.COM platform) as well as traditional distribution channels, in cooperation with leading global
distributors (such as BANDAI NAMCO Entertainment Europe S.A.S., Warner Bros. Home Entertainment, Epicsoft
Asia PTE LTD, Bandai Namco Entertainment Australia PTY LTD, Cenega S.A., Spike Chunsoft Co., Ltd., GEEKAY,
U&I Entertainment LLC).
In the first half of 2024 sales to two clients exceeded 10% of the Group’s consolidated sales revenues andtotaled 167 899 thousand PLN and 71 999 thousand PLN respectively (39.5% and 16.9% of the Group’s sales
revenues respectively). These clients are not affiliated with CD PROJEKT S.A. or any of its subsidiaries.
The videogame development process relies on certain bought-in tools and technical solutions; however, these
do not result in significant concentration of supply. No CD PROJEKT RED supplier accounted for more than 10%of the consolidated revenues of the Group in the first half of 2024.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Communication
In the scope of its publishing activities, the Company is responsible for building promotional campaigns around
its proprietary products, and directly engages in communication with the player via using electronic channels,social media platforms and participation in events. This area of activity is guided by the “Always remember about
gamers” principle, which is one of the Studio’s core values. CD PROJEKT RED actively manages over 110 social
media profiles in more than a dozen languages, both global and local (such as the BILIBILI and Weibo platforms
in China, and the Naver Cafe platform in Korea).
Key corporate and marketing events
Cyberpunk 2077
In early 2024, on 4 January, CD PROJEKT RED announced that Phantom Liberty – the storyline expansion for
Cyberpunk 2077 – had sold over 5 million copies around the world between its launch on 26 September 2023
and the end of that year.
On 20 March Go On Board – creators of The Witcher: Old World board game – announced another projectin partnership with CD PROJEKT RED: a board game set in the Cyberpunk 2077 universe. The corresponding
crowdfunding campaign is set to launch on 3 September on the Gamefound platform.
On 28–31 March CD PROJEKT RED, in collaboration with Xbox and PlayStation, organized a free-of-charge trialof the base console edition of Cyberpunk 2077. Every owner of current-generation consoles could play thegame at no cost for five hours, experiencing all the extensions introduced in Updates 2.0 and 2.1.
On 11 April, at the 20th gala BAFTA Awards ceremony the Cyberpunk 2077 dev and support team took first prizein the “Evolving Game” category, which is awarded by the jury to games with outstanding post-release support.
On 20 May, at the Digital Dragons gala, awards were presented to the best Polish games of 2023, with Phantom
Liberty carrying “Best Polis Game” and “Best Polish Narrative” categories.
On 4 July, after the close of the reporting period, another Cyberpunk board game was announced. Cyberpunk:
Edgerunners Board Game, developed by No Loading Games in partnership with CD PROJEKT RED, is scheduled to retail in 2025.
On 22 August an official meetup of the local Cyberpunk 2077 community took place in the framework ofgamescom 2024 in Cologne, Germany. On that day, CD PROJEKT RED organizers invited guests to a joint
celebration in a recreated Dogtown setting, well known from Phantom Liberty.

Management Board report on the activities of the CD PROJEKT Group between 1 January
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The Witcher universe
On 31 January 2024, owing to collaboration between CD PROJEKT RED and Com2uS the mobile RPG – Summoners War: Sky Arena – was visited for a limited time by Witcher franchise characters – Geralt, Ciri, Triss andYennefer, marking that game’s 10th anniversary.
On 21 May the Company released REDkit – a modding tool for The Witcher 3: Wild Hunt, enabling users to create their own adventures in the world of Geralt of Rivia. The editor provides features for modifying characters,
their costumes, quests, locations, cutscenes and dialogue trees. To mark its release, the Studio also released
a set of tutorials, a video trailer, creator testimonials and a special episode of REDstreams entirely devoted tothe editor, prepared in partnership with professional modders from the Yigsoft group.
On 20 August CD PROJEKT RED announced that The Witcher 3: Wild Hunt was being offered to owners of
PlayStation 4 and PlayStation 5 as part of the PlayStation Plus Extra and Premium game catalogues.

Other events
On 18–22 March the Developer Conference (GDC) took place in San Francisco. During this six-day event
CD PROJEKT RED representatives organized 14 talks, sharing their experiences with developing Cyberpunk 2077
and the Phantom Liberty expansion with other game industry professionals.
On 19–21 the Digital Dragons conference was held in Kraków. This year’s edition featured talks, discussion
panels and workshops organized by nearly 20 CD PROJEKT RED representatives (13 activities in total) anddevoted to artwork, narration, design, audio and communication-related experiences.
On 14–16 June another edition of the Pyrkon festival took place in Poznań, with a range of activities preparedby CD PROJEKT RED. Studio members organized a cosplay competition for fans of The Witcher and V, andalso took part in a range of discussion panels.
Ticket sales for Art For All launched on 18 July, after the close of the reporting period. This event is aimed ateveryone wishing to develop their skills in the area of creative arts, and will take place on 7 September at EC1,alongside this year’s edition of the Promised Land Art Festival.

Management Board report on the activities of the CD PROJEKT Group between 1 January
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GOG.COM
Target and scope of business activity
The GOG.COM platform was launched in August 2008. Its initial mission was to revitalize major PC cult classics
and offer them for sale to international customers. In 2024 the platform was offered in English, French, German,
Russian, Chinese and Polish – this includes full website and game localizations, as well as integration withlocally popular payment channels, accepting payments in sixteen currencies. GOG.COM also carries releases
for the macOS and Linux operating systems.
Activities carried out in this segment focus on digital distribution of videogames via the Company’s proprietary
GOG.COM distribution platform and the GOG GALAXY application. The platform enables customers to purchasegames, remit payment and download game files to their personal devices, while the GOG GALAXY application
provides – among others – automatic updates, cloud saves, online and cross-play features.
Payments collected by GOG sp. z o.o. from customers are split with the Company’s suppliers as agreed upon in
distribution contracts. Typical contracts require the Company to submit sales reports to its suppliers in monthly orquarterly cycles, not later than 30 days following the close of the given reporting period. With regard to certain
older products the company may be contractually permitted to adapt them to the requirements of modern operating systems, or to enable multiplayer gameplay if such features were originally provided by the given game.
Key products
As of the publication date of this report, the GOG.COM digital distribution platform offers over 9000 products
from more than 1300 partners. This includes both timeless classics and fresh releases from such well-known
brands as Sony, Bethesda, Disney, Electronic Arts, Ubisoft, Konami and Warner Bros.
The key difference between GOG.COM and its competition is its strong customer focus and the “gamers first”
approach. This is evidenced, among others, by striving to ensure that single-player gamers are distributed in the
DRM-free model, free of restrictions which might otherwise prevent customers from enjoying their purchases.
Products offered on GOG.COM are also richly featured and usually include bonus content such as soundtracks,
maps and wallpapers.
In addition to the above, GOG.COM ensures compatibility of its games with current versions of MS Windows,
macOS and popular distributions of Linux, which is a particular advantage in the case of classic games andcontributes to preservation of videogame history.
The Group uses GOG.COM to market its own products directly to end users – this includes games set in The Witcher
universe, as well as Cyberpunk 2077 together with its expansion – Phantom Liberty.

Management Board report on the activities of the CD PROJEKT Group between 1 January
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Key sources of revenue
Revenues obtained in the GOG.COM segment are directly dependent on the popularity of the offered games
and their respective sales volumes. The Company continuously expands the scope of its cooperation with
suppliers and seeks access to new, attractive products. GOG.COM is also home to seasonal and one-off sales
campaigns, including summer, fall and Christmas bargain packages as well as other events which introduce
new ways to attract gamers.
Key product and marketing events
Digital distribution of videogames
In the first half of 2024 the GOG.COM catalogue was expanded – among others – by games such as Sinking
City, Robocop Rogue City, Sniper Ghost Warrior Contracts 2 Complete Edition, Tomb Raider I–III Remastered,
Alpha Protocol, God of War, Manor Lords, Resident Evil, and Riven.
Sales support
Sales support in the digital distribution segment focuses mainly on adding new attractive items to the catalogue
and carrying out seasonal promotional campaigns.
GOG.COM’s largest promotional campaigns of the first half of 2024 included the seasonal Spring and Summer
Sales. During the latter, over 6 thousand games were offered at bargain prices. The GOG team also organizedother promotional events, including a series of thematic sales focused, among others, on story-rich games,
horrors, strategy games or games featuring characteristic pixel art.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Key suppliers and clients
GOG sp. z o.o. markets games via online channels directly to millions of individual users worldwide. As such,the segment does not have key clients in the usual sense of the term.
Chart 7

Sales of products and goods by GOG.COM in the first half of 2024 and the first half of 2023,
by territory

Other territories
25%

Sweden1%

Other territories
23%

USA
32%

Spain
2%

H1 2023

Netherlands
2%

Canada4%
France5%

H1 2024

Australia
3%

Netherlands
2%
Australia
3%

USA
31%

Germany
14%

Canada4%

Germany
14%

France6%

Poland9%

United Kingdom
6%

United Kingdom
6%
Poland9%

In terms of territorial breakdown, sales in the first half of 2024 followed the pattern established in the preceding
years. During this period the largest group of GOG.COM customers came from the United States (31%), followedby Germany (14%), Poland (9%), the United Kingdom (6%) and France (6%).
As of 30 June 2024 no single supplier in the GOG.COM segment accounted for more than 10% of the Group’s
consolidated revenues.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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KEY CORPORATE EVENTSOn 20 February 2024, at an Extraordinary General Meeting of CD PROJEKT, the Earnings Condition (cumulative consolidated net earnings for the years 2024–2027) was set in the framework of Incentive Program B at
3 billion PLN for entitlements assigned in 2024. All materials related to this General Meeting, including resolutions adopted thereby, are available on the Company website.
On 28 March the Management Board of the Company recommended that 99,910,510.00 PLN from the net profit
obtained in 2023 be allocated towards a dividend (at 1 PLN per eligible share). The Management Board further
recommended that the remainder of the divisible net profit for the preceding year, at 344,177,050.72 PLN betransferred to the Company’s reserve capital. These recommendations were duly endorsed by the Supervisory Board on 16 April. On 14 June the Ordinary General Meeting voted to allocate the Company’s earnings inaccordance with the Management Board’s recommendation, setting the dividend record date to 21 June andthe dividend payment date to 27 June.
On 14 June 2024 the Ordinary General Meeting of CD PROJEKT also approved amendments to the Remuneration Policy of Members of the Management Board and Members of the Supervisory Board of the Company.
The full wording of resolutions adopted at the OGM is available on the Company website.

EVENTS FOLLOWING THE BALANCE SHEET DATE
No significant events affecting this report occurred after the balance sheet date.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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EFFECT OF THE ARMED CONFLICT IN UKRAINEON THE ACTIVITIES OF THE CD PROJEKT GROUP
Effect on earnings
In response to the Russian armed invasion of Ukraine, on 3 March 2022 the Management Board of CD PROJEKT
decided to suspend sales of CD PROJEKT Group products as well as games distributed on the GOG.COM platform on the territory of Russia and Belarus.
The Company estimates that throughout the 12-month period between March 2021 and February 2022 theaggregate share of Russia and Belarus in revenues from sales of products in the CD PROJEKT RED segment
and in GOG.COM sales revenues amounted to 5.4% and 3.7% respectively.
Risks associated with the armed conflict in Ukraine
The Company continually monitors the effects of the current political and economic situation in Ukraine, Russia
and Belarus upon the activities of the CD PROJEKT Group.
The Company has terminated collaboration with Russian and Belarussian suppliers. At the present time theCompany does not intend to initiate any further collaboration with such entities.
As of the publication date of this report the Group’s operating activities proceed unhindered, and the effect of theRussian armed invasion of Ukraine do not have a direct significant negative impact on the Group’s operations.
In the Management Board’s opinion, the armed conflict in Ukraine does not materially affect the quantitative
data contained in the financial statement, does not provide a reason to suspect impairment of assets, should
not have a significant negative effect on the Group’s earnings in 2024, and does not jeopardize continuationof the Company’s activities within 12 months of the end of the reporting period.
Insofar as possible, the above assessment of the effect of the armed conflict in Ukraine upon the Company’s
activities reflects the Company’s knowledge as of the publication date of this report. Consequently, it is liable
to change in the event of abatement or escalation of the conflict.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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DISCLOSURE OF SEASONAL OR CYCLICAL ACTIVITIESCD PROJEKT RED
The revenues and financial result of the CD PROJEKT RED segment are strongly affected by the videogame
release schedule. CD PROJEKT RED usually takes between 3 and 6 years to produce a game. Historically, theStudio had focused on a single large development project at a time, with initial conceptual work on a new gameoccurring before the previous game was complete and ready to be released.
Chart 8

Effect of new releases on the quarterly revenues from sales of products, goods and materials by
CD PROJEKT RED in 2011–2024 (PLN thousands)

1 600 000
1 400 000
1 200 000
1 000 000
800 000
600 000
400 000

0

Q1/2011"The Witcher 2" (PC) Q2/2011
Q3/2011
Q4/2011
Q1/2012"The Witcher 2" (X360) Q2/2012
Q3/2012
Q4/2012
Q1/2013
Q2/2013
Q3/2013
Q4/2013
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015”The Witcher 3” Q2/2015
Q3/2015
Expansion: ”Hearts of Stone” Q4/2015
Q1/2016
Expansion: ”Blood and Wine” Q2/2016
Q3/2016
Q4/2016
Q1/2017
Q2/2017
Q3/2017
Q4/2017
Q1/2018
Q2/2018
Q3/2018
Q4/2018
Q1/2019
Q2/2019
Q3/2019”The Witcher 3" (Nintendo Switch) Q4/2019
Q1/2020
Q2/2020
Q3/2020"Cyberpunk 2077" Q4/2020
Q1/2021
Q2/2021
Q3/2021
Q4/2021
Q1/2022
Q2/2022
Q3/2022
Q4/2022
Q1/2023
Q2/2023
Expansion: ”Phantom Liberty” Q3/2023
Q4/2023
Q1/2024
Q2/2024

200 000

CD PROJEKT RED also engages in smaller-scale projects – such as add-ons for its own games or adapting
existing products to work on new gaming platforms. Such projects may be carried out directly by the Company
or by its external partners.
Currently, the CD PROJEKT Group carries out parallel development of several games (including in collaboration
with external dev teams).
With regard to games which have already been released, their yearly sales breakdown is dependent on theschedule of periodic promotional activities. In most cases, strong sales are reported in the second and fourth
quarter, while the first and the third quarter (the latter of which overlaps with the summer vacation season) see
weaker sales.
In addition to pure development activities, the Company also actively manages its franchises in other fields,
working to continually expand its target audience, and exploring new media types and platforms.

Management Board report on the activities of the CD PROJEKT Group between 1 January
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GOG.COM
The digital videogame distribution market, which is the main area of activity of GOG.COM, is characterized
by seasonal fluctuations in revenues. On an annual basis, the highest revenues are typically obtained in the
fourth quarter while the lowest revenues correspond to the third quarter. Sales in Q2 and Q4 are boosted bypromotional activities organized in these periods.
The sales volume is also strongly dependent on the timing of new releases in each reporting period.
Chart 9

Sales of goods and materials in the GOG.COM segment in 2020–2024 (PLN thousands)

200 000

Cyberpunk 2077

160 000

120 000

80 000

Phantom
Liberty29

40 000

0

Q1

2020

2021

Q2

2022

2023

Q3

2024

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

Q4

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Disclosure of external and internal factors affecting
further growth of the CD PROJEKT Group

Future growth of the Company and its Group is critically dependent on the ability to retain world-class creatorsand specialists, and to attract a growing number of experts, both Polish and foreign, to work on the Group’s
future releases. Strategic directions related to talent acquisition, team development and support were presented
in the CD PROJEKT Group Sustainability Report for 2023.
Another important factor which may support the Group’s growth is effective implementation of CD PROJEKT RED’s
development plans announced in October 2022 as part of the Group’s Strategy Update, along with further
broadening of the recognizability and popularity of the Group’s franchises (including via cooperation withexternal entities), and enriching games based on the Group’s proprietary IP with multiplayer gameplay elements.
In addition to the above, the activities of CD PROJEKT Group member companies are affected by external
factors such as the macroeconomic outlook, legal reforms and changes in taxation. In this sense, CD PROJEKT
is in a similar position to many other companies conducting business on domestic and international markets.
Given the specific nature of the gamedev industry, the growth and activities of Group member companies arealso significantly affected by external changes in the scope of technologies which may assist and enhance thegame development process.
In the second half of 2024 the CD PROJEKT Group intends to focus on organic growth of its business activities.

CD PROJEKT RED
Key factors which determine the growth of the CD PROJEKT RED segment include ongoing projects, the scale ofdevelopment work associated with those projects and their perceived popularity among gamers. In this context,
the most significant factors shaping the current results of the CD PROJEKT Group include the popularity of previously published games set in The Witcher and Cyberpunk universe. In future periods the growth prospects andearnings posted by the Group will depend on the progress and market reception of new development projects.
Regarding the upcoming quarterly periods, a particularly important area of activity covers ongoing development of previously announced projects, along with upscaling of activities carried out by the newly established
CD PROJEKT RED dev team in Boston.
Another notable process at CD PROJEKT RED – in the context of the studio’s development – is the ongoing
deployment of Unreal Engine 5, improving the engine’s support for open-world games, as well as adaptationand optimization of parts of the engine to align it with the creative underpinnings of subsequent projects, which
is one of the main assumptions of the Company’s strategic collaboration with Epic Games. Use of this engine
should significantly streamline the game development process. The Company’s agreement with Epic GamesManagement Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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also provides for dedicated technical support for CD PROJEKT RED releases on the part of Epic Games. Working
with UE5 significantly broadens the Studio’s recruitment opportunities given that Unreal Engine is familiar to
many game developers.
Maintaining the observed growth dynamics of the CD PROJEKT RED segment will depend on further enhancement of its world-class videogame development skillset and on the capacity for effective communication withthe global gaming community. Both aspects are crucial for Studio’s ongoing transformation – labeled RED 2.0 –which aims, among others, to apply the agile methodology in the videogame development process, thereby
improving product quality. Migration to a dual franchise publishing model supported by several independent,
parallel projects paves the way for potential optimization of production and financial activities, increases thefrequency of releases along with the associated revenues, mitigates important risk factors and makes it easierfor Company employees to seek professional fulfillment.

GOG.COM
Sales in the GOG.COM segment have, in the recent years, benefitted from customers’ increasing tendency
to turn to online channels for purchases.
GOG.COM growth also depends on raising awareness of the platform among gamers and on seeking additional
brand-new products to add to its lineup. Accordingly, GOG sp. z o.o. actively communicates with leading global
developers and publishers of videogames, continually expanding its list of business partners and products
offered. Each new release on GOG.COM contributes to the platform’s popularity and drives up sales. Beyond
adding new products, GOG sp. z o.o. also seeks to expand its user base by attracting new gamers – those
who have not yet set up a GOG.COM account. During the recent years the Company has been successful
in this regard, owing to its PR activities and synergies resulting from cooperation with CD PROJEKT S.A. The
GOG.COM customer pool continues to grow at a steady pace.
Further growth of activities in the GOG.COM segment, including the potential to acquire unique know-how andexperience, and to fully leverage the Company’s technological expertise, will be influenced by developmentof features which support sales on the platform, including better integration of GOG GALAXY monetization
mechanisms with the GOG.COM storefront, as well as increased focus on expanding the GOG.COM catalogue
with classic games.

OTHER FACTORSThe growth of the CD PROJEKT Group will also be affected by development work carried out by its subsidiary –The Molasses Flood. In addition, the Boston studio is working on a separate game set in The Witcher universe,
codenamed Sirius.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Disclosure of factors which, in the Issuer’s opinion, will havean effect on its earnings during at least the coming quarter

The ongoing third quarter coincides with the vacation season and marks an annual low point in the intensity ofmarketing activities which affect sales volumes. In the current year one exception was the Steam Summer Sale,
which commenced on 27 June and ended on 11 July. The Group’s current release schedule foresees no new releases
in the remainder of the third quarter of 2024.

Disclosure of significant agreements 5

CD PROJEKT did not enter into any significant agreements during the reporting period.

Key threats and risks related to the remaining
months of the current financial year

The CD PROJEKT Group is exposed to a range of risks, both financial and non-financial, associated with its
operating activities. The goal of risk management at the Company is to ensure proper identification, assessment,
analysis and further handling of risks.
Persistent external and internal risk factors which may affect the Group’s activities and growth prospects, andare known to the Management Board, are described in the risk management section of the Management
Board Report on CD PROJEKT Group Activities in 2023, while financial risks are detailed in the Consolidated
Financial Statement of the CD PROJEKT Group for 2023. The Company perceives the risks identified therein
as applicable to the remaining months of the current financial year.

5

An agreement is regarded as significant if the projected total value of liabilities arising under the agreement exceeds 10% of theconsolidated assets of the Group.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)CD PROJE K T G ROUP

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03

R E S U LT S O F O P E R AT I O N S

OF THE CD PROJEKT GROUP

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Discussion of the key economic and financial figures
disclosed in the consolidated financial statements

CONSOLIDATED INCOME STATEMENT
Table 3

Consolidated income statement of the CD PROJEKT Group (in PLN thousands)
01.01.2024 –30.06.2024

01.01.2023 –30.06.2023*

changechange %424 812325 214

99 598

30.6%

Sales of products

342 829

238 084

104 745

44.0%

Sales of services

1 701

799

902

112.9%

Sales of goods for resale and materials

80 28286 331-6 049-7.0%

Cost of sales of finished goods,
services, goods for resale and materials

124 847

107 213

17 634

16.4%

Costs of products and services sold

65 68442 70122 983

53.8%

Cost of goods for resale and materials sold59 16364 512-5 349-8.3%

299 965

218 001

81 964

37.6%

Selling expenses

60 87585 106-24 231-28.5%

Administrative expenses, including:

106 034

60 06345 97176.5%

45 9183 273

42 645

1 302.9%

Other operating income

10 39633 708-23 312-69.2%

Other operating expenses

3 227

8 654

-5 427-62.7%

-2

4

-6

-

140 223

97 89042 333

43.2%

Finance income

43 46551 610-8 145-15.8%

Finance costs

8 831

29 970-21 139-70.5%

174 857

119 530

55 327

46.3%

Income tax

4 851

29 311-24 460-83.4%Net profit/(loss)

170 006

90 21979 787

88.4%

Sales revenue

Gross profit/(loss) on sales

cost of research projects(Impairment)/reversal of impairmentof financial instruments
Operating profit/(loss)

Profit/(loss) before tax*restated data

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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DESCRIPTION AND ASSESSMENT OF THE FACTORS AND UNUSUAL EVENTS AFFECTING
THE RESULTS OF OPERATIONS OF THE CD PROJEKT GROUP IN THE FIRST HALF OF 2024
The strong sale of Cyberpunk 2077 together with the Phantom Liberty expansion had the greatest impact on
the results of the CD PROJEKT Group for the first half of 2024. However, the sale of The Witcher 3: Wild Huntcontinued to be important for the Group’s results.
As part of the production of games, the most important capital expenditure on research and development
projects incurred during the reporting period related to the Polaris and Sirius projects, which are in thedevelopment phase, and the Orion and Canis Majoris projects, which are at an earlier phase of production,i.e. the research phase.
In the first half of 2024, there were no significant unusual events affecting the Group’s results of operations.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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DISCUSSION OF THE CONSOLIDATED INCOME STATEMENT OF
THE CD PROJEKT GROUP BY OPERATING SEGMENT
CD PROJEKT RED segment
Table 4

Income statement of the CD PROJEKT RED segment (in PLN thousands)
01.01.2024 –30.06.2024

01.01.2023 –30.06.2023*

changechange %344 946244 271

100 675

41.2%

Sales of products

339 667

236 595

103 072

43.6%

Sales of services

1 487

506

981

193.9%

Sales of goods for resale and materials

3 792

7 170

-3 378-47.1%

Cost of sales of finished goods,
services, goods for resale and materials

69 02850 92218 106

35.6%

Costs of products and services sold

65 68942 72522 964

53.7%

Cost of goods for resale and materials sold

3 339

8 197

-4 858-59.3%

275 918

193 349

82 56942.7%

Selling expenses

41 07764 931-23 854-36.7%

Administrative expenses, including:

101 21456 35444 86079.6%

45 9183 273

42 645

1 302.9%

Other operating income

8 991

34 089-25 098-73.6%

Other operating expenses

3 452

8 946

-5 494-61.4%

-2

4

-6

-

139 164

97 21141 953

43.2%

Finance income

39 94450 828-10 884-21.4%

Finance costs

5 680

28 482-22 802-80.1%

173 428

119 557

53 871

45.1%

Income tax

4 597

29 189-24 592-84.3%Net profit/(loss)

168 831

90 36878 463

86.8%

Sales revenue

Gross profit/(loss) on sales

cost of research projects(Impairment)/reversal of impairmentof financial instruments
Operating profit/(loss)

Profit/(loss) before tax*restated data

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

37

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

The total Sales revenue of the CD PROJEKT RED segment in the first half of 2024 was significantly higher
than in the comparative period, mainly due to strong sales of the Phantom Liberty, a feature expansion of the
Cyberpunk 2077 game, following its release on 26 September 2023.
Sales of products had the largest share in the sales revenue of the CD PROJEKT RED segment for the period
under review and primarily related to:■ royalties resulting from the sale of Cyberpunk 2077 and the Phantom Liberty expansion;■ royalties resulting from the sale of The Witcher 3: Wild Hunt with the Hearts of Stone and Blood and Wine
expansions;■ licence revenue from CD PROJEKT RED studio franchises;■ revenue related to other products of the segment.
In the first half of 2024, Sales of services comprised mainly revenue relating to services provided to related
entities.
Sales of goods for resale and materials of the CD PROJEKT RED segment in the period discussed comprised
mainly revenue from the sale of ready-made physical sets and elements of physical sets of own titles (media,
boxes, figurines, gadgets) to distributors.
The most significant component of the Cost of finished goods, services, goods for resale and materials
sold of the CD PROJEKT RED segment was the Cost of products and services sold, where mainly the cost ofamortization of expenditure on development projects (own games manufactured) is presented. The valueof the said item in the first half of 2024 and its increase compared with the corresponding comparative period
was affected mainly by the amortization of expenditure on the Cyberpunk 2077 game, including its expansion
Phantom Liberty.
In the first half of 2024, the Cost of sales of goods for resale and materials contained the cost of manufactureof ready-made physical sets of own titles sold to distributors and components of these sets.
The Cost of sales of the CD PROJEKT RED segment in the period discussed comprised:■ costs of promotion and sales support of the CD PROJEKT RED segment, mainly those relating to the promotionof Cyberpunk 2077, including the Phantom Liberty expansion;■ costs associated with product development as part of own franchises;
costs of maintenance and updating of the CD PROJEKT RED studio games being sold, mainly those relating toCyberpunk 2077 and the Phantom Liberty expansion.
Compared with the first half of 2023, the segment reduced both the total level of promotion and sales support
costs (mainly due to the absence of current and future promotional events) and the total costs of maintenanceand updates of the games released.
A significant surge in Administrative expenses of the CD PROJEKT RED segment in the first half of 2024 ismainly due to an increased scale of work on future games in the early stages of production (the research phase,
preceding the development phase and the start of their capitalization as part of Expenditure on development
projects forming part of Non-current assets), relating primarily to the Orion, Canis Majoris and Hadar projects,
and the work on the studio’s proprietary technologies.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

38

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

Moreover, the segment reports the following costs under Administrative expenses:■ fixed remuneration of the administrative teams and the external costs of third party services classified in thiscategory which, in step with an increase in the employment levels and the scale of operations of the segment’s companies, are growing gradually;■ performance-based remuneration of the management;■ the cost associated with the functioning of the Incentive Plans A and B which are based on entitlements to theCompany’s shares.
As regards Other operating income and expenses, the segment recognized mainly the revenue from utilizationof the tax relief for innovative employees and from the lease of office space (and the accompanying maintenancecosts) in the real estate complex located at ul. Jagiellońska 74 and 76 in Warsaw. In the comparative period,a significant and one-off impact on the value of these items came from a partial reversal of the write-down ofdevelopment expenditure incurred up to the end of 2022 (in the amount of PLN 21 531 thousand) associatedwith determination of a new framework for the Sirius project being developed by The Molasses Flood studio,
and the write-off of a part of the expenditure on the Project in the first quarter of 2023 (PLN 2 745 thousand).
In the first half of 2024, the CD PROJEKT RED segment showed an excess of Finance income over Financecosts higher than the one reported in the comparative period. This is mainly due to an increase in interest
income on bonds.
A significantly lower Income tax expense recognized in the income statement for the first half of 2024 compared with the comparative period was mainly due to re-estimation of the deferred tax performed in the firstquarter of the year, primarily with regard to the R&D tax relief available for utilization and an allowance fora part of the tax on licence receivables collected in other jurisdictions (the withholding tax), which was lower
than in the comparative period.
The consolidated Net profit of the CD PROJEKT RED segment for the first half of 2024 amounted to
PLN 168 831 thousand and was PLN 78 463 thousand (86.8%) higher than in the comparative period.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

39

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

GOG.COM segment
Table 5

Income statement of the GOG.COM segment (in PLN thousands)
01.01.2024 –30.06.2024

01.01.2023 –30.06.2023*

changechange %87 66984 522

3 147

3.7%

Sales of products

-

-

-

-

Sales of services

306

439

-133

-30.3%

Sales of goods for resale and materials

87 36384 083

3 280

3.9%

Cost of sales of finished goods, services,
goods for resale and materials

63 53559 752

3 783

6.3%

-

4

-4

-100.0%63 53559 748

3 787

6.3%

24 13424 770

-636

-2.6%

Selling expenses

19 85820 184

-326

-1.6%

Administrative expenses, including:

4 865

3 926

939

23.9%

-

-

-

-

Other operating income

2 081

691

1 390

201.2%

Other operating expenses

520

629

-109

-17.3%

-

-

-

-

972

722

250

34.6%

Finance income

3 521

782

2 739

350.3%

Finance costs

3 211

1 577

1 634

103.6%

1 282

-73

1 355

-

Income tax

251

68

183

269.1%Net profit/(loss)

1 031

-141

1 172

-

Sales revenue

Costs of products and services soldCost of goods for resale and materials sold
Gross profit/(loss) on sales

cost of research projects(Impairment)/reversal of impairmentof financial instruments
Operating profit/(loss)

Profit/(loss) before tax*restated data

The total Sales revenue of the GOG.COM segment comprises mainly Sales of goods for resale and materials
related to the digital distribution of games from GOG.COM’s external suppliers to final customers, carried out
via the GOG.COM platform and the GOG GALAXY application.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

40

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

Three seasonal promotions – the New Year Sale, Spring Sale and Summer Sale (taking place partly in July) had
the largest impact on the development of sales of goods for resale and materials of the GOG.COM segmentin the first half of 2024. During the promotions, players could choose from several thousands of products at
reduced prices, such as Cyberpunk 2077: Phantom Liberty and Baldur’s Gate 3.
Despite the number of new releases being lower than in the comparable period of the previous year,
GOG made several popular titles available for players to purchase in the first half of 2024, such as Manor Lords(early access), God of War and two classic titles that are vital to GOG’s mission: Alpha Protocol and the firstpart of Resident Evil. In addition, the effect of worldwide interest in the series based on the Fallout games wasevident during the period under review, which translated into higher sales of games from this particular series.
The Cost of sales of services, goods for resale and materials, which accompanies sales directly, increased compared with the comparative period in line with higher revenue.
In the period discussed, Selling expenses of the GOG.COM segment decreased slightly compared with 2023.
Among the Selling expenses reported in the GOG.COM segment, the following items have the most significant
share:■ the remuneration of the team responsible for operating, development and promotion of the GOG.COM platform,
as well as maintenance and further development of the GOG GALAXY application;■ transaction costs related to the processing of payments on the GOG.COM platform;■ the costs of the ICT infrastructure related to making sales;■ the costs of the marketing activities concerning the promotion of the GOG.COM platform and games available
on the platform;■ the costs of amortization, including amortization of completed development projects relating to technologies
used for handling sales and serving GOG’s customers.
The main components of the Administrative expenses of the GOG.COM segment are the remuneration of
the administrative teams, remuneration of the Company’s Management Board, as well as the costs of otherexternal services classified in this category. An increase in Administrative expenses in the period discussed inrelation to the comparative period was mainly due to an increase in the current costs of salaries and wages,
costs relating to external advisory services, and the occurrence of one-time costs of pre-implementation analyses in connection with the planned optimization and expansion of the systems supporting financial processes.
In addition, in the period discussed, the segment recorded an increase in other operating income relating
primarily to one-time revenue on integration of the GOG.COM shop with external services.
In the first half of 2024, the GOG.COM segment showed an excess of Finance income over Finance costs.
Finance income comprises mainly income on forward FX hedging contracts and interest on bank deposits,
whereas finance costs include mainly foreign exchange losses.
The Net profit of the GOG.COM segment for the first half of 2024 amounted to PLN 1 031 thousand.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

41

CD PROJE K T G ROUP

Table 6

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

Net profitability ratio – Alternative Performance Measure
01.01.2024 –30.06.2024

01.01.2023 –30.06.2023

CD PROJEKT GROUP

Net profit margin(Net profit / sales revenues)

40.0%

27.7%

01.01.2024 –30.06.2024

01.01.2023 –30.06.2023

CD PROJEKT RED

48.9%

37.0%

01.01.2024 –30.06.2024

01.01.2023 –30.06.2023

GOG.COM

1.2%

-0.2%

The Net profitability ratio presents additional information, indicating what part of Sales revenue remains within
the enterprise in the form of a Net profit after covering all the costs and tax charges shown in the Income statement. An increase in the value of this ratio means an increase in the effectiveness of the activities carried out,
related to the level of the Sales revenue earned. The ratio used is a standard and commonly used measurein financial analysis, and its usefulness was analysed in terms of the information provided to investors on theeffectiveness of the activities of the CD PROJEKT Group and its segments.
In the first half of 2024, the Group’s Net profitability ratio was 40.0% and was higher than in the corresponding
period of the prior year, both on the consolidated and stand-alone basis.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

42

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE CD PROJEKT GROUP
Table 7

Consolidated statement of financial position of the CD PROJEKT Group (in PLN thousands)
30.06.2024

31.12.2023*

changechange %1 525 159

1 450 685

74 474

5.1%

Property, plant and equipment

218 287

183 038

35 24919.3%

Intangible assets

70 96970 058911

1.3%

Expenditure on development projects

586 630

527 182

59 44811.3%

Investment properties

33 48234 245

-763

-2.2%

Goodwill

56 43856 4380

0.0%

Shares in non-consolidated
subordinated entities

38 79338 095698

1.8%

Prepayments and deferred costs

37 62541 906-4 281-10.2%

Other financial assets

426 048455 907-29 859-6.5%

Deferred tax assets

56 48143 43313 04830.0%

Other receivables

406

383

23

6.0%

CURRENT ASSETS

1 134 848

1 162 815

-27 967-2.4%

Inventories

3 319

3 576

-257

-7.2%

Trade receivables

83 928193 520-109 592-56.6%

Current income tax receivable

13 3081 128

12 180

1 079.8%

Other receivables

60 19257 741

2 451

4.2%

Prepayments and deferred costs

27 18227 872

-690

-2.5%

Other financial assets

457 094362 719

94 37526.0%

Bank deposits over 3 months

340 845338 205

2 640

0.8%

Cash and cash equivalents

148 980

178 054-29 074-16.3%

2 660 007

2 613 500

46 507

1.8%

NON-CURRENT ASSETSTOTAL ASSETS*restated data

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

43

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

30.06.2024

31.12.2023*

changechange %2 484 354

2 403 223

81 131

3.4%

99 911

99 9110

0.0%

2 069 034

1 714 604

354 430

20.7%

Share premium

116 700

116 700

0

0.0%

Other reserves

33 44323 16910 274

44.3%

-440

-1 202762-63.4%-4 300-30 797

26 497-86.0%

170 006

480 838-310 832-64.6%NON-CURRENT LIABILITIES

35 89038 774-2 884-7.4%

Other financial liabilities

18 62820 038-1 410-7.0%

Other liabilities

2 374

2 494

-120

-4.8%

Deferred income

1 989

2 315

-326

-14.1%

518

518

0

0.0%

12 381

13 409-1 028-7.7%

139 763

171 503-31 740-18.5%

Other financial liabilities

3 867

6 884

-3 017-43.8%

Trade payables

59 08158 835

246

0.4%

479

462

17

3.7%

Other liabilities

10 75715 201-4 444-29.2%

Deferred income

13 82313 170653

5.0%Provision for retirement and similar
benefits

9 428

6 743

2 685

39.8%

Other provisions

42 32870 208-27 880-39.7%

2 660 007

2 613 500

46 507

1.8%

EQUITY
Share capital
Supplementary capital

Foreign exchange differenceson translation
Retained earnings/(Accumulated losses)
Net profit (loss) for the period

Provision for retirement and similar
benefits
Other provisions
CURRENT LIABILITIESCurrent income tax liabilities

TOTAL EQUITY AND LIABILITIES*restated data

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

44

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

DISCUSSION OF THE CONSOLIDATED STATEMENT OFFINANCIAL POSITION OF THE CD PROJEKT GROUP
Assets
The item Expenditure on development projects, in which the Group recognizes expenditure on the developmentof new products and technologies, incurred and deferred, had the largest share in the value of the Group’s
Non-current assets as at the end of the first half of 2024, as well as the greatest impact on the increase in thebalance thereof. An increase in the item discussed is mainly due to expenditure incurred by the CD PROJEKT RED
segment on the production of future games in an advanced development phase (mainly Polaris and Sirius)
in the amount higher than the amortization of the productions completed (mainly Cyberpunk 2077 including
the Phantom Liberty expansion and The Witcher 3).
The balance of Property, plant and equipment primarily consists of:■ the value of the real estate complex at ul. Jagiellońska 74 and 76, the recognized part thereof being the partto be used by CD PROJEKT S.A. for its own purposes;■ expenditure on construction work on the CD PROJEKT campus in Warsaw (Assets under construction) which
contributed to an increase in the balance of the item compared with 31 December 2023;■ plant and machinery, where the Group recognizes, among other things, computers, servers and other electronic
devices used in its activities;■ assets in respect of the right of use of leased office space (with the corresponding value of Other financial
liabilities in respect of concluded contracts on the lease of space being recognized on the Equity and liabilities
side at the same time).
The most significant items recognized in Intangible assets are mainly the value of the CD PROJEKT corporate
brand and the The Witcher trademark, as well as the value of the copyright and computer software held by theGroup. The value of the item did not change materially in 2024.
Goodwill is composed of amounts resulting from accounting for the merger of the parent company with the
CDP Investment Group on 30 April 2010 and accounting for the acquisition of a development studio located in
Wrocław by CD PROJEKT S.A. from Strange New Things sp. z o.o. sp. k. on 18 May 2018. The Goodwill reported
did not change over the discussed period.
The balance of Investment properties consists of the values of the properties at ul. Jagiellońska 74 andul. Jagiellońska 76, the parts thereof classified as earmarked for lease.
The value of Shares in non-consolidated subordinated entities comprises mainly the shares in The Molasses
Flood LLC, Boston, CD PROJEKT RED Vancouver Studio Ltd. and CD PROJEKT SILVER Inc.
The value of Inventories as at the end of the first half of 2024 consists mainly of ready-made physical sets
and elements of physical sets of the editions of games of own production intended for CD PROJEKT RED’s
external distributors.
The consolidated balance of Trade receivables decreased in the period discussed mainly due to the receiptof royalties earned in the CD PROJEKT RED segment in the fourth quarter of 2023, especially royalties for thevery satisfactory first full quarter of distribution of the Phantom Liberty add-on to the Cyberpunk 2077 game.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

45

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

The balance of the Group’s Other receivables as at the end of June 2024 comprises mainly receivables inrespect of the withholding tax deducted by foreign recipients of the licences granted by the CD PROJEKT RED
segment, VAT settlements, settlements with the Social Insurance Institution (ZUS), advances to suppliers andsecurity deposits.
The consolidated value of the current and non-current Prepayments and deferred costs recognized as at theend of the analysed period and a decrease in these balances were mainly affected by the amount of the so-called minimum guarantees, i.e. advances and prepayments made by GOG.COM to its suppliers towards fees forthe distribution of the games offered on the GOG.COM platform, not recognized in the income statement by
the balance sheet date. In addition, the item includes, among other things, deferred fees for software, licences
and rights and prepayment related to marketing activities.
The consolidated balance of current and non-current Other financial assets as at the end of June 2024 comprises primarily the value of domestic and foreign Treasury bonds purchased by CD PROJEKT S.A. to diversify
credit risk, including the measurement of derivative financial instruments securing the value of bonds in foreign
currencies.
The total value of financial reserves in the form of Cash and cash equivalents, Bank deposits over 3 months
and liquid financial assets in the form of purchased Treasury bonds (recognized in total in current and non-current Other financial assets) held by the Group as at 30 June 2024 amounted to PLN 1 365 322 thousand
and increased by PLN 55 863 thousand during the first half of 2024.
Non-current assets accounted for 57.3% and Current assets for 42.7% of the total assets of the CD PROJEKTGroup as at the end of June 2024.
Equity and liabilities
As at 30 June 2024, the CD PROJEKT Group’s equity amounted to PLN 2 484 354 thousand and increased
by PLN 81 131 thousand compared with the end of 2023. An increase in equity due to the net profit for the firsthalf of the year exceeded a decrease due to the payment of a dividend for 2023.
In current and non-current Other financial liabilities, the Group recognizes mainly liabilities in respect of theperpetual usufruct of land at the Jagiellońska 74 and Jagiellońska 76 complexes in Warsaw and liabilities inrespect of the concluded agreements for the lease of office space.
The balance of the Group’s Trade payables did not change significantly during the first half of 2024. It comprised,among other things, liabilities of the GOG.COM segment relating to payments to the providers of the service
for the last sales period and the minimum guarantees contracted for new titles of the GOG.COM platform, as
well as current trade payables of the CD PROJEKT RED segment.
Other liabilities as at the end of June 2024 comprised mainly the Group’s liabilities in respect of VAT, social
security and future services.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

46

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

In Deferred income (current and non-current) as at the end of June 2024, the Group’s segments recognized
mainly:■ CD PROJEKT RED - prepayments received or due in respect of royalties related to pre-sale and sale in future
periods, including the so-called minimum guarantees from publishers and distribution partners;■ GOG.COM - the value of pre-orders for games with a release date in future periods, placed by customers;■ GOG.COM - deferred income relating to the company’s customers (GOG Portfolio);■ CD PROJEKT RED - deferred income concerning subsidies.
The balance of current and non-current Provision for retirement and similar benefits includes primarily
a holiday pay provision in the CD PROJEKT RED segment.
A decrease in the balance of Other provisions (current and non-current) of the CD PROJEKT Group resulted
mainly from a decrease in provisions for performance-based remuneration in the CD PROJEKT RED segment,
related to the payment of bonuses for 2023 in the period discussed.
In the Equity and liabilities of the CD PROJEKT Group as at 30 June 2024, Equity represented 93.4%, whereas
Current and Non-current liabilities represented 6.6%.
The consolidated statement of financial position broken down into individual business segments of the Groupis contained in the Interim condensed consolidated financial statements of the CD PROJEKT Group for theperiod from 1 January to 30 June 2024.
DESCRIPTION OF THE STRUCTURE OF ASSETS AND EQUITY & LIABILITIES OF THE CONSOLIDATED BALANCE SHEET, INCLUDING FROM THE PERSPECTIVE OF LIQUIDITY
As at the end of the first half of 2024, the CD PROJEKT Group had assets with a carrying amount of PLN 2 660
007 thousand. Within these assets, liquid financial reserves maintained in bank accounts in the form of bankdeposits and Treasury bonds (foreign and domestic) amounted to PLN 1 365 322 thousand and represented
51.3% of total assets. Assets with limited liquidity (Property, plant and equipment, Expenditure on development
projects, Investment properties and Shares in non-consolidated subordinated entities) totalling PLN 877 192
thousand represented 33.0% of total assets. As at 30 June 2024, the total of Trade receivables, Other current
receivables and Inventories amounted to PLN 147 439 thousand, whereas the total value of current and non-current liabilities amounted to PLN 175 653 thousand. As at the end of the first half of 2024, the Group did nothave any external liabilities in respect of loans or borrowings.
The accumulated cash and cash equivalents, deposits and Treasury bonds ensure the Group’s high liquidity
and may be used to secure the financing of the Group’s further development, including the financing of thedevelopment of future products and technologies, promotional support for scheduled premières, securing future
investment opportunities and ensuring provisions for possible unplanned situations or emerging opportunities.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

47

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

CONSOLIDATED STATEMENT OF CASH FLOWS OF THE CD PROJEKT GROUP
Table 8

Consolidated statement of cash flows of the CD PROJEKT Group (in PLN thousands)
01.01.2024 –30.06.2024

01.01.2023 –30.06.2023*

Net profit/(loss)

170 006

90 219Total adjustments:

102 248

22 345

Depreciation and amortization of property, plant and equipment, intangible
assets, expenditure on development projects and investment properties

7 082

6 611

Amortization of development projects recognized as cost of goods sold

52 73543 213Foreign exchange (gains)/losses(8 176)18 842

Interest and shares in profits(33 912)(25 225)(Gains)/losses on investing activities

5 849(43 042)

Increase/(Decrease) in provisions(28 755)(48 707)(Increase)/Decrease in inventories

257

4 583

(Increase)/Decrease in receivables

106 779

78 922

Increase/(Decrease) in liabilities, excluding loans and borrowings(17 008)(15 429)

Change in other assets and liabilities

5 177(8 112)Other adjustments

12 22010 689272 254

112 564966

13 351

Withholding tax paid abroad

3 885

15 960

Income tax (paid)/refunded(26 176)(20 276)

250 929

121 599491 746420 885

Sale of intangible assets and property, plant and equipment

167

514

Repayment of loans granted

292-

Expiry of bank deposits over 3 months

425 613329 970

Redemption of bonds

29 35356 411

Interest on bonds

7 536

6 479

Interest received on deposits

15 86517 195

Inflows from execution of forward contracts

12 784

10 273

136

43

OPERATING ACTIVITIESCash from operating activities
Income tax expense

Net cash from operating activities

INVESTING ACTIVITIESInflows

Other inflows from investing activities

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

48

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

01.01.2024 –30.06.2024

01.01.2023 –30.06.2023*

669 775

569 258

Acquisition of intangible assets and property, plant and equipment

36 73129 696

Expenditure on development projects

107 139

162 616

Expenditure on intangible assets

211

380

Acquisition of investment properties and capitalization of expenditure

11

98

-

4 215

Purchase of shares in a subsidiary

3 170

3 515

Purchase of bonds and cost of their purchase

96 20058 973

Placement of bank deposits over 3 months

426 313309 765(178 029)(148 373)

929

Settlement of lease receivables

728Interest received2

1

101 983

101 746

Dividends and other distributions to shareholders

99 911

99 911

Payment of lease liabilities

1 662

1 441

410

394

Net cash used in financing activities(101 974)(101 717)

Net increase/(decrease) in cash and cash equivalents(29 074)(128 491)

Change in cash and cash equivalents in the balance sheet(29 074)(128 491)

Cash and cash equivalents as at the beginning of the period

178 054277 827

Cash and cash equivalents as at the end of the period

148 980

149 336

Outflows

Loans granted

Net cash from investing activities

FINANCING ACTIVITIESInflows

Outflows

Interest paid

*restated data

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

49

CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

DISCUSSION OF THE CONSOLIDATED STATEMENT OF CASH FLOWS OF THE CD PROJEKT GROUP
Under Operating activities in the first half of 2024, the CD PROJEKT Group reported net cash inflows of
PLN 250 929 thousand, i.e. PLN 129 330 thousand higher than in the comparative period.
The consolidated net profit was adjusted for:I.

Non-cash items (a total increase):■ Amortization and depreciation (an increase);■ Amortization of development projects, recognized as the cost of sales, corresponding primarily to theamortization of expenditure on the development projects related to Cyberpunk 2077 together with the
Phantom Liberty expansion and The Witcher 3 edition for new generation consoles, Xbox Series X|S
and PlayStation 5;■ Foreign exchange gains/(losses), a decrease resulting mainly from the measurement of foreign Treasury
bonds and foreign currency deposits over 3 months;■ Gains/(losses) on investing activities, an increase resulting from transactions in bonds and derivative
financial instruments;■ Increase/(decrease) in provisions, a decrease resulting mainly from a decrease in the balance of provisions for performance-based remuneration;■ Other adjustments, an increase resulting mainly from the elimination of the accounting for costs of the
incentive plans and adjustments to amortization/depreciation recognized in the cost of sales and inother operating expenses;

II. Items related to changes in current assets and current liabilities (a total increase):■ (Increase)/decrease in inventories, an increase in the balance of cash flows as a result of a drop in
inventories;■ (Increase)/decrease in receivables, an increase in the balance of cash flows resulting primarily froma decrease in the balance of receivables in the CD PROJEKT RED segment, related to the inflow ofroyalties reported for the fourth quarter of 2023;■ Increase/(decrease) in liabilities, excluding loans and borrowings, a decrease in the balance of cash
flows in consequence of a decrease in the balance of the Group’s liabilities;■ Change in other assets and liabilities, an increase in the balance of cash flows resulting mainly from adecrease in the so-called minimum guarantees contracted by GOG.COM during the reporting period;
III. Item recognized in other sections of the statement of cash flows – Interest and shares in profits, resulting
in a decrease in the cash flows shown under operating activities;
IV. Difference between the corporate income tax recognized in the income statement (a decrease) and the tax
actually paid during the first half of 2024, taking into account settlements related to withholding tax.
The negative balance of Net cash outflows on investing activities in the first half of 2024 was mainly due tooutflows related to capital expenditure on assets, including primarily Expenditure on development projects(i.e. the work on new games) and Property, plant and equipment, as well as the negative balance of net cash
outflows related to bank deposits and Treasury bonds.
Negative Net cash from financing activities of the CD PROJEKT Group in the first half of 2024 was mainly due
to the payment of a dividend (PLN 99 911 thousand) for 2023.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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In total, in the first half of 2024, the CD PROJEKT Group generated negative Net cash outflows of
PLN 29 074 thousand, while at the same time it invested PLN 143 870 thousand in assets (expenditure on
development projects, property, plant and equipment and intangible assets), increased the balance of bondand bank deposits over 3 months by a total of PLN 84 937 thousand, and paid a dividend for 2023 to theshareholders of PLN 99 911 thousand.

INFORMATION ON LOANS AND BORROWINGS IN THE FIRST HALF OF 2024
In the reporting period, the CD PROJEKT Group did not have any external liabilities in respect of loans or
borrowings.

INFORMATION ON LOANS GRANTED IN THE FIRST HALF OF 2024
In the reporting period, none of the CD PROJEKT Group companies granted any loans to non-Group entities.
As at 30 June 2024, the debt resulting from a loan granted to The Molasses Flood LLC by CD PROJEKT S.A.
amounted to USD 734 thousand.

INFORMATION ON SURETIES AND GUARANTEES GRANTED IN THE FIRSTHALF OF 2024 AND OTHER MATERIAL OFF-BALANCE-SHEET ITEMS
Information on sureties and guarantees and other material off-balance-sheet items is presented in the Interim
condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to
30 June 2024.

TRANSACTIONS WITH RELATED ENTITIESWithin the activities of the CD PROJEKT Group in the first half of 2024, there were mainly the following typesof transactions between related entities:■ sale of licences between CD PROJEKT S.A. and GOG sp. z o.o., The Molasses Flood LLC, as part of the activities
carried out by the individual entities;■ sale relating to research and development projects involving the creation of games and technologies by
CD PROJEKT RED Inc., The Molasses Flood LLC and CD PROJEKT RED Vancouver Studio Ltd. for CD PROJEKT S.A.;■ provision of services such as: accounting, human resources and payroll management, legal, financial, administrative and management services rendered mainly by CD PROJEKT S.A. to related entities;■ lease of office space by CD PROJEKT S.A. to GOG.COM sp. z o.o., and sublease of office space between The
Molasses Flood LLC and CD PROJEKT RED Inc.;■ sale of CD PROJEKT RED Inc.’s services to CD PROJEKT S.A., related to the coordination of publishing andpromotional activities in North America;■ a loan granted to The Molasses Flood LLC by CD PROJEKT S.A.;■ other transactions arising from current operating activities, e.g. costs of employee relocation or reinvoicing of
jointly incurred costs.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Transactions between related entities are concluded on an arm’s length basis as part of the normal businessactivities carried out by the CD PROJEKT Group entities. Detailed information about the terms and conditionsof the transactions between related entities is contained in the Interim condensed consolidated financial
statements of the CD PROJEKT Group for the period from 1 January to 30 June 2024.

EXPLANATION OF THE DIFFERENCES BETWEEN THE FINANCIAL RESULTS SHOWN IN THE
SEMI-ANNUAL REPORT AND THE PREVIOUSLY PUBLISHED FORECASTS FOR A GIVEN YEARThe CD PROJEKT Group has not published any financial forecasts, therefore, no explanations are given for thedifferences between the financial results shown in the report.

DESCRIPTION OF THE UTILIZATION OF ISSUE PROCEEDS BY THE
COMPANY BY THE DATE OF PUBLICATION OF THE REPORTIn the period from 1 January to 30 June 2024, the Company did not issue any new shares.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

04

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

C O R P O R AT E G O V E R N A N C E

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Entity contracted to audit financial statements

On 4 July 2024 the Supervisory Board of CD PROJEKT S.A., acting on advice of the Audit Committee of theCompany’s Supervisory Board recommending extension of the Company’s contract with its licensed auditor,
decided to select Grant Thornton Polska PSA with a registered office in Poznań as the entity contracted to conduct
an audit and review of the separate and consolidated financial statements of the Company for 2024 and 2025.
Grant Thornton Polska PSA has also been contracted to audit the financial statement of GOG sp. z o.o.

Shareholders controlling at least 5% of the vote at the General Meeting

The Company’s share capital amounts to 99 910 510 PLN, divided into 99 910 510 shares with a nominal valueof 1 PLN per share. The shareholding structure is determined on the basis of formal notifications issued byshareholders who control at least 5% of the total number of votes at the General Meeting of Shareholders.
Table 9

Shareholders controlling at least 5% of the vote at the General Meeting as of the publication dateof this report
Number of
votes controlled

Percentage share of
total number of votes
at the GM (%)

Shareholder

Qty. of shares

Percentage sharein share capital (%)

Marcin Iwiński

12 873 520

12.89%

12 873 520

12.89%

Michał Kiciński*9 989 363

10.00%

9 989 363

10.00%

Piotr Nielubowicz

6 858 717

6.86%

6 858 717

6.86%

Nationale-Nederlanden
Powszechne Towarzystwo
Emerytalne S.A. (all funds
collectively)**

5 417 124

5.42%

5 417 124

5.42%

5 030 225

5.03%

5 030 22

5.03%

incl. Nationale-Nederlanden
Otwarty Fundusz
Emerytalny*** As disclosed in the most recent notification submitted to the Company on 13 November 2023** As disclosed in the most recent notification submitted to the Company on 12 August 2024

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Changes in ownership of major packages of Company stock
since the publication of the previous periodic report
According to notifications filed with the Company, the only changes in ownership of major stock packages occurring since the publication of the previous periodic report concern shares and votes controlled by investment
funds managed by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A., including Nationale-Nederlanden Otwarty Fundusz Emerytalny, as well as by The Goldman Sachs Group, Inc.
The Goldman Sachs Group, Inc.
During the reporting period the Company received four notifications concerning changes in ownership of stockand control of votes by funds managed by The Goldman Sachs Group, Inc.
According to the notification received on 8 August 2024, the total percentage share of votes controlled by
The Goldman Sachs Group Inc. from indirectly held shares and other financial instruments as of 5 August 2024
was 5.02%, including 3.52% of votes linked to other financial instruments (securities on loan and swap contracts).
According to the notification received on 19 August 2024, the total percentage share of votes controlled by
The Goldman Sachs Group Inc. from indirectly held shares and other financial instruments had dropped below
the 5% threshold, to 4.97%, on 14 August 2024, and subsequently, according to another notification received
on 20 August, again exceeded the 5% threshold on 15 August (rising to 5.09%, which includes 3.97% of votes
linked to other financial instruments, i.e. securities on loan and swap contracts).
According to the most recent notification, received on 22 August 2024, the total percentage share of votes
controlled by The Goldman Sachs Group Inc. from indirectly held shares and other financial instruments had
again dropped below the 5% threshold (to 4.59%) on 19 August.
Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. /Nationale-Nederlanden Otwarty Fundusz Emerytalny
During the reporting period the Company received two notifications from concerning changes in ownership ofstock and control of votes by funds managed by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne
S.A., including Nationale-Nederlanden Otwarty Fundusz Emerytalny.
According to a notification filed on 11 July 2024 the total number of shares held and votes controlled by funds
managed by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. increased from 4 986 246(i.e. 4.991% of the total number of votes) to 5 026 246 (i.e. 5.031% of the total number of votes).
According to a notification filed on 12 August 2024 Nationale-Nederlanden Otwarty Fundusz Emerytalny increased
the number of Company shares in its possession and votes under its control to 5 030 225, which corresponds to5.0347% of the total number of votes. As a result of the aforementioned transaction, the total number of shares
held and votes controlled by funds managed by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne
S.A. (including shares and votes controlled by Nationale-Nederlanden Otwarty Fundusz Emerytalny) increased
to 5 417 124, which corresponds to 5.4220% of the total number of votes.
The shareholding structure arising as a result of the above-mentioned notifications is presented in the above table.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Agreements which may result in changes in the proportionsof shares held by shareholders and bondholders

INCENTIVE PROGRAMS FOR 2023–2027
On 18 April 2023 the General Meeting of the Company voted to institute two new incentive programs for thefinancial years 2023–2027 replacing the 2020–2025 incentive program: Incentive Program A and Incentive
Program B respectively.
Incentive Program A
Incentive Program A is aimed at persons who are not members of the Company’s Management Board. According
to the adopted provisions, entitlements will be assigned under this program in each financial year belonging to the2023–2027 period (i.e. in five stages). The total number of entitlements assigned under Incentive Program A may
not exceed 1,500,000. Entitlements shall vest either by: (I) extending an offer to participants to claim subscription
warrants which incorporate the right to take up the equivalent number of shares issued in the framework of
a conditional increase in the Company share capital, or (II) extending an offer to participants to purchase from theCompany a certain number of own shares which the Company will have previously acquired in the framework of
a buy-back program instituted specifically for this purpose. The take-up and exercise of subscription warrants orpurchase of own shares from the Company, as appropriate, will require participants to fulfill the loyalty condition(which is defined as the existence of a legal relationship between the participant of Incentive Program A and theCompany or an affiliate thereof throughout the vesting period). The share take-up or purchase price in the exercise
of entitlements assigned under Incentive Program A will be equivalent to the nominal price of Company shares.
In each case, the vesting period is at least 3 years long.
As of the publication date of this report:I) 100 444 entitlements have been assigned at the first stage of Incentive Program A (in 2023), 92 197 ofwhich remain outstanding;II) 183 189 entitlements have been assigned at the second stage of Incentive Program A (in 2024), 177 513 ofwhich remain outstanding.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Incentive Program B
Incentive Program B is aimed at members of the Company’s Management Board as well as persons who do
not hold membership of the Management Board. According to the adopted provisions, entitlements will beassigned under this program in each financial year belonging to the 2023–2027 period (i.e. in five stages). The
total number of entitlements assigned under Incentive Program B may not exceed 3,500,000. Entitlements shallvest either by: (I) extending an offer to participants to claim subscription warrants which incorporate the rightto take up the equivalent number of shares issued in the framework of a conditional increase in the Company
share capital, or (II) extending an offer to participants to purchase from the Company a certain number of own
shares which the Company will have previously acquired in the framework of a buy-back program instituted
specifically for this purpose. The take-up and exercise of subscription warrants or purchase of own shares fromthe Company, as appropriate, will depend on confirmation by the Company of the fulfillment of the earnings
condition (for 70% of entitlements), the market condition (for 30% of entitlements), certain individual conditions
applied on a case-by-case basis, as well as – in all cases – the loyalty condition (which is defined as the existenceof a legal relationship between the participant of Incentive Program B and the Company or an affiliate thereofthroughout the vesting period). The base share take-up or purchase price in the exercise of entitlements assigned under Incentive Program B will be equivalent to the closing price of Company stock on the last trading
day preceding the adoption of a resolution enrolling the given participant in the program. The program provides
for a potential reduction in the take-up or purchase price coupled with a proportional reduction in the numberof entitlements exercisable by the given participant. The base vesting period is equivalent to four consecutive
financial years beginning with the year during which the given stage of the program began (with an option toshorten the vesting period to 3 years for entitlements linked to the earnings condition, should the four-year
earnings target be met within the corresponding three-year period).
As of the publication date of this report:I) 662 000 enitlements have been assigned at the first stage of Incentive Program B (in 2023), 656 000 ofwhich remain outstanding;II) 723 500 entitlements have been assigned at the second stage of Incentive Program B (in 2024), all ofwhich remain outstanding.
Earnings condition – applicable to 70% of entitlements assigned during each stage of Incentive Program B
The earnings condition is considered fulfilled if, during the given vesting period, the CD PROJEKT Groupposts sufficient earnings, which are defined as the consolidated net profit from continuing activities aggregated with the costs of estimating entitlements assigned during the given stage of Incentive Program B
as entered in the accounting records of CD PROJEKT Group member entities. For entitlements assigned
during the first stage of Incentive Program B (in the financial year 2023) the earnings condition for theyears 2023–2026 is 2 billion PLN, while for entitlement assigned during the second stage of Incentive
Program B (in the financial year 2024) the earnings condition for the years 2024–2027 is 3 billion PLN.
For each subsequent stage of Incentive Program B, associated with the financial years 2025, 2026 and2027 respectively, the corresponding four-year earnings condition will, in each case, be determined by theGeneral Meeting in the form of a resolution (on the Management Board’s request).

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Market condition – applicable to 30% of entitlements assigned during each stage of Incentive Program B
The market condition is defined as a as a change in the price of Company stock on the Warsaw Stock Exchange
in such a way that the percentage difference between the closing price of Company stock on the final trading
session of the final year subject to verification in the context of the above-mentioned earnings condition compared to the closing price of Company stock on the final trading session of the year preceding the year coveredby the given stage of Incentive Program B is equal to or greater than the corresponding percentage change inthe value of the WIG index increased by 10 percentage points over the same period.

Disclosure of the control system of employee share programs

The share-based incentive programs in force as of the publication date of this report, i.e. Incentive Program A
and Incentive Program B for the years 2023–2027 were introduced by the General Meeting of the Company
on 18 April 2023. Detailed regulations applicable to these programs were adopted by the Management Boardof the Company on 21 May 2023 and subsequently approved by the Supervisory Board on 23 May 2023.
The full wording of these regulations is available on the Company’s corporate website.
Implementation of both programs is overseen by the Supervisory Board and the Management Board of
CD PROJEKT S.A.

Disclosure of the purchase and redemption of own shares

The Company did not purchase any own shares during the reporting period.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Company shares held by members of the Management
Board and the Supervisory Board

Table 10

Shares held by members of the Management Board and Supervisory Board of the Company*
as of
28.08.2024

as of
30.06.2024

as of31.12.2023

Management Board Member,
Chief Strategy Officer

4 046 001

4 046 001

4 046 001

Piotr Nielubowicz

Management Board Member,
Chief Financial Officer

6 858 717

6 858 717

6 858 717

Adam Badowski

Management Board Member,
Joint Chief Executive Officer

692 640692 640692 640

Michał Nowakowski

Management Board Member,
Joint Chief Executive Officer

530 290

530 290580 290

Piotr Karwowski

Management Board Member,
Joint Chief Operating Officer

108 728

108 728

108 728

Paweł Zawodny

Management Board Member,
Joint Chief Operating Officer

18 50818 50818 508

Marcin Iwiński

Chairpersonof the Supervisory Board

12 873 520

12 873 520

12 873 520

Katarzyna Szwarc

Deputy Chairpersonof the Supervisory Board

10

10

10

Maciej Nielubowicz

Supervisory Board Member

51

51

51

Name

Position

Adam Kiciński*based on declarations and notifications filed with the Company

Persons discharging managerial and executive responsibilities at CD PROJEKT S.A. do not directly hold any
shares of CD PROJEKT S.A. subsidiaries which are members of the CD PROJEKT Group.

Management structure

In line with legal requirements stemming from the Code of Commercial Companies, official bodies of the Company
include, in addition to the General Meeting of Shareholders, the Management Board and the Supervisory Board.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

59

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Composition of the Management Board of CD PROJEKT S.A.

Michał Nowakowski – Joint Chief Executive Officer, Member of the Board
Jointly-responsible for the company’s long term vision, coordinates the company’s activities and its management. In particular responsible for the Company’s business strategy
and effective sales policy. Supports development of new product lines and manages theCompany’s back catalog (franchise flywheel). Shapes long-term business relations with key
partners. Represents company in relation with the investors.
Directly supervises the following:
Business development | Comic Book and Animation narrative | Investor Relations
Adam Badowski – Joint Chief Executive Officer, Member of the Board
Jointly-responsible for the company’s long term vision, coordinating the company’s activities
and its management. In particular responsible for the Company’s creative vision, and for
managing, developing and maintaining the Company’s creative teams. Develops and defines
the unique image and style which distinguish the Company and its products on the market.
Directly supervises the following:Game direction | Story | Global Art | Audio & Music | Localization & English adaptation
Adam Kiciński – Chief Strategy Officer, Member of the Board
Responsible for the Company’s strategy and for its implementation.
Directly supervises the following:
Strategy
Piotr Nielubowicz – Chief Financial Officer, Member of the Board
Responsible for the Company’s financial strategy, and for financial and non-financial reporting and legal area. Oversees strategic corporate projects, key investments and Company’s
climate and environmental policy.
Directly supervises the following:
Finance|

Accounting

|

Taxes

|

Legal

Piotr Karwowski – Joint Chief Operating Officer, Member of the Board
Responsible for the Company’s game development processes and optimization of its
operational capabilities, including in-house production, external games development andmanagement of the Group’s studios. Additionally oversees development of online anduser experience competencies.
Directly supervises the following:Game production | Studio operations | IT & Security | Online | UXManagement Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Paweł Zawodny – Joint Chief Operating Officer, Member of the Board
Responsible for shaping the Company’s tech strategy and optimization of its operational capabilities. Plays a pivotal role in driving both the technological and organizationaltransformation of CD PROJEKT RED. Oversees the Company’s activities in the scope of
employment, talent management and work methodology, ensuring they are aligned with
the Company’s broader transformation objectives.
Directly supervises the following:
HR | Culture, Diversity & Inclusion | Technologies (including R&D)
Jeremiah Cohn – Chief Marketing Officer, Member of the Board
Responsible for the Company’s global marketing strategy, product communication and branding in support of franchise development. Oversees efforts to build recognition of the Company,
its IP, and product releases by shaping engagement with fans and the gamers community.
Directly supervises the following:
Marketing | PR | Franchises
The Management Board manages all Company matters which are not otherwise reserved to the General Meetingand the Supervisory Board. In particular, the Management Board:■ works to ensure that Company matters are managed in a clear and effective manner, and in compliance withthe applicable laws;■ determines the Company’s strategy and its main business objectives, and is responsible for ensuring implementation thereof;■ manages Company matters and represents the Company in courts of law and otherwise;■ exercises due diligence in the decision-making process, acts within the boundaries of acceptable risk, andremains loyal to the Company.
Chart 10Tenure of incumbent members of the Management Board as employees at the Group’s member companies (in years)

Paweł Zawodny
Jeremiah Cohn
Piotr Karwowski

6
10
17

Michał Nowakowski
Adam Badowski
Piotr Nielubowicz
Adam Kiciński

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

19
22
25
30

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Changes in the composition of the Management
Board of CD PROJEKT S.A.

Since 1 January 2023 the Management Board of the Company consists of seven Members. No changes in
the composition of the Management Board occurred during the reporting period and up until the publication
date of this report.
The following changes in the description of roles and names of positions held by Members of the Management
Board took effect on 1 January 2024:■ since 1 January 2024 Adam Kiciński holds the position of Chief Strategy Officer (CSO);■ the position of Chief Executive Officer (CEO) is held jointly by Adam Badowski and Michał Nowakowski. Both Adam
Badowski and Michał Nowakowski officially introduce themselves as Joint Chief Executive Officers (Joint CEO).

Composition of the Supervisory Board andAudit Committee of CD PROJEKT S.A.

The following persons are incumbent Members of the Supervisory Board of CD PROJEKT S.A.:

MarcinIwiński

CHAIRPERSONOF THE SUPERVISORY
BOARD

Katarzyna
SzwarcDEPUTY CHAIRPERSONOF THE SUPERVISORY
BOARD

MaciejNielubowicz

SECRETARY
OF THE SUPERVISORY
BOARD

Michał
Bień

MEMBEROF THE SUPERVISORY
BOARD
INDEPENDENT MEMBER

The Audit Committee is composed of the following members:

Michał
Bień

CHAIRPERSONOF THE AUDITCOMMITTEE

MaciejNielubowicz

MEMBEROF THE AUDITCOMMITTEEJan Łukasz
Wejchert

MEMBEROF THE AUDITCOMMITTEEManagement Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

Jan Łukasz
Wejchert

MEMBEROF THE SUPERVISORY
BOARD
INDEPENDENT MEMBER

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Changes in the composition of the Supervisory Board
and Audit Committee of CD PROJEKT S.A.

No changes in the composition of the Supervisory Board and Audit Committee of the Company occurred during
the reporting period and up until the publication date of this report.

Disclosure of retirement benefits and similar compensation payable
to former members of the Issuer’s executive, supervisory or
administrative bodies, and of any liabilities associated with such benefits,
specifying the aggregate amounts for each category of recipients

As of 30 June 2024 and as of the preparation date of this report the Company had no such liabilities.

Agreements between the Issuer and members of its managing
bodies concerning compensation in the event of their resignation
or dismissal, including dismissal or recall as a result of a merger

As of 30 June 2024 and as of the preparation date of this report there were no provisions in force regulating compensation in the event of resignation or dismissal of members of the Company’s Management Board,
including when their dismissal or recall is due to a merger involving the Company.

Changes in basic management practices at the Company and its GroupNo significant changes in basic management policies affecting the Company and its Group occurred in thefirst half of 2024.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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Applicable corporate governance policies

CD PROJEKT S.A. is subject to corporate governance policies set forth in the 2021 Code of Best Practice for
WSE Listed Companies (annexed to Stock Exchange Council resolution of 13/1834/2021 of 29 March 2021).
Information regarding application of policies contained in the 2021 Code of Best Practice for WSE Listed Companies is available on our website under the Corporate Governance tab. Our statement regarding applicationof corporate governance policies in 2023 is part of the Management Board Report on CD PROJEKT Group
Activities for the Period Between 1 January and 31 December 2023.

Disclosure of significant legal proceedings

The following legal proceedings took place during the reporting period (the presented status is valid for the
publication date of this report):

CRIMINAL PROCEEDINGS IN WHICH CD PROJEKT S.A. IS RECOGNIZED AS THE VICTIM
Case against natural persons (including former members of the Management Board of Optimus S.A.)
In case no. XVIII K 126/09, following indictment filed by the District Attorney in the District Court for the City of
Warsaw, on 27 October 2016 the District Court convicted Mr. Michał L., Mr. Piotr L. and Mr. Michał D. of violating
sections 296 §1, 296 §3 and others of the Penal Code. The Company acted as an auxiliary prosecutor in the
court of first instance and will retain this status until the trial has concluded. Having found the defendants guilty,
the Court awarded the Company 210 thousand PLN in damages under Art. 46 of the Penal Code. According
to the operative part of the judgement total losses sustained by the Company as a result of the defendants’
actions were estimated at not less than 16 million PLN (this figure follows from standard regulations applicableto criminal trials). The Company subsequently filed an appeal against the judgment, contesting, among others,
the amount of damages awarded to the Company. An appeal against the full judgement was also filed by the
defendants’ attorneys. On 26 October 2017 the Appellate Court vacated the judgment of the court of first instanceand remanded the case to be retried in full. The District Court for the City of Warsaw subsequently filed thecase under no. XVIII K 316/17. The parent company continues to act in the capacity of an auxiliary prosecutor.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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LITIGATION INVOLVING THE COMPANY’S SUBSIDIARIES
Case brought by GOG sp. z o.o. before the District Administrative Court in Kraków
On 19 August 2022 the Head of the Małopolska Customs and Tax Office in Kraków issued a decision with regard
to corporate tax liabilities incurred by GOG sp. z o.o., a subsidiary of the Company, in 2016. The Management
Board of GOG sp. z o.o. discharged the liability arising under the aforementioned decision, which, as of thepayment date, amounted to 2 638 thousand PLN. Nevertheless, given its disagreement with the assessment
presented by the tax authority, it appealed the decision on 5 September 2022.
On 22 May 2023 the Head of the Małopolska Customs and Tax Office in Kraków, who also performs the functionof the appeal body in this case, issued a decision upholding the contested decision. On 4 July 2023, given its
continuing disagreement with the position expressed by the tax authority, the Management Board of GOG sp z o.o.
filed a complaint against the aforementioned decision in the District Administrative Court in Kraków. A trial
was held before the District Administrative Court in Kraków on 3 October 2023, as a result of which the Court
issued an injunction repealing the decisions of the Head of the Małopolska Customs and Tax Office in Kraków
of 19 August 2022 and 22 May 2023, and ordering that the matter be processed anew.
On 29 May 2024 the Head of the Małopolska Customs and Tax office in Kraków issued a new decision in which
the corporate tax liabilities due for 2016 were lowered by 116 226 PLN compared to the original decision of
19 August 2022. On 26 June 2024 the Management Board of GOG sp. z o.o., given its continuing disagreementwith the tax authority’s decision, filed a complaint thereagainst with the Director of the Fiscal Administration Authority in Kraków. As of the publication date of this report GOG sp. z o.o. has not received a reply to this complaint,
and the matter remains at the administrative appeal stage.
On 25 June 2024, in light of the injunction issued by the District Administrative Court in Kraków, GOG sp. z o.o.
was reimbursed 2 578 500 PLN by the First Mazovian Tax Office in Warsaw.

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)

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MANAGEMENT BOARD STATEMENT
Pursuant to the Finance Minister’s ordnance of 29 March 2018 concerning current and periodic information tobe published by issuers of securities, and conditions for regarding as equivalent the information required by
the laws of a non-member state the Management Board hereby declares that, to the best of its knowledge, thissemiannual report on activities of the CD PROJEKT Group presents an accurate description of the development,
achievements and condition of the CD PROJEKT Group, including basic threats and risks applicable thereto.

Michał Nowakowski

Adam Badowski

Adam Kiciński

Piotr Nielubowicz

Joint Chief Executive Officer,

Joint Chief Executive Officer,

Chief Strategy Officer,

Chief Financial Officer,

Management Board Member

Management Board Member

Management Board Member

Management Board Member

Piotr Karwowski

Paweł Zawodny

Jeremiah Cohn

Joint Chief Operating Officer,

Joint Chief Operating Officer,

Chief Marketing Officer,

Management Board Member

Management Board Member

Management Board Member

Management Board report on the activities of the CD PROJEKT Group between 1 January
and 30 June 2024 (all figures quoted in PLN thousands unless indicated otherwise)CD PROJE K T G ROUP

BUSINESS ACTIVIT Y

F I N A N C I A L R E S U LT S

C O R P O R AT E G O V E R N A N C E

CO NTAC T F O R I N V E S TO RS: I R@ C D P ROJ E K T.CO M
W W W.C D PROJ E K T.CO M