Capital Markets Day
Montreal
14th November 2019

“Keywords Studios
is becoming the ‘go to’
provider for external
development services”

Housekeeping items

Welcome to the Nordelec2© 2019 Keywords Studios PLC

9:30 - 12:30

Morning Session
Opening remarks
Tour of Keywords Montreal
Montreal: A journey of growth

Opening
remarks

Integration in action:mini case studies
12:30

Lunch on site

13:40 - 16:00

Afternoon Session
Integration in action:
in-depth case studies
Panel: Keywordians on integration
Closing remarks plus final Q&A

16:00

3

© 2019 Keywords Studios PLC

Food and drinks on siteIndustry growth drivers
for Keywords
R (2 0 1
G
A
C
0%

9.

8 -2 2 )

22%

21%

31%

31%
9%

4

31%

31%

32%

8%

9%

8%

38%

40%

35%

36%

2018

2019

2020

2021

Smartphone

Tablet© 2019 Keywords Studios PLC

Higher definition and complexity•

Games as a service requires continuous content•

Proliferation of platforms (new consoles / VR / AR
/ streaming and subscription models)

1%

1%

2%

2%

•

19%
20%

3%

Growing video games market$196.0Bn$152.1Bn
21%•$178.2Bn$164.6Bn$138.7Bn

Drivers of increasing content demand

8%

Structural growth drivers•

Trend towards outsourcing•

Availability of a highly professional providerof scale

41%

2022

Potential drivers from adjacent markets

Downloaded/Boxed PC•

Film and TV

Source: Newzoo Global Games Market Report, June 2019•

E-learning•

Enterprise

ConsoleBrowser PC

The Journey so far andplenty of road ahead* 2019 revenue estimate based off analyst complied forecasts. Provision of these
forecasts does not imply Keywords’ endorsement or concurrence with the analyst
information

Strategy: Keywords Studios is becoming the ’go to’ provider for external development services
Opportunity
2009

Proving the model
2009 – IPO

Building the platform
2013 – 2018
• Broadened service lines

5• Imbalanced landscape and industry• Started to expand internationally• Expanded geographically• Many small but good providers• Established key client relationships• Diversified our client base• No provider of scale• Decreased client concentration• Strengthened management team

Scaling for growth
2019 – onwards• Scaling the platform• Continued investment• Leveraging our position as the ‘goto’ provider for external gamedevelopment services

Service lines

2

7

People507500

Top 5 Clients

>80%

25%

Countries

1

21

Revenue€4m€317m*© 2019 Keywords Studios PLC

Better balanced business;higher up the value chain* 2019 revenue estimate based off analyst complied forecasts. Provision of these
forecasts does not imply Keywords’ endorsement or concurrence with the analyst
information

Art Services
Game Development
Audio Services

19%

7%

Functional Testing
10%

Localization
Localization Testing

2%

Player Support

6%

15%

8%
17%

14%

12%

13%

12%

17%
6%

17%

17%

33%

14%

57%

2013

26%

14%

13%

8% 2%

39%

32%

2014

9%

11%

33%

12%

30%

2015

€16m €37m €58m
6

28%

7%

2%

© 2019 Keywords Studios PLC

18%

2016

€97m

14%

17%

15%

20%
14%

20%

2017

2018

€151m

€251m

20%

2019 estimate*€317m

International scale &flexibility across markets
is keyArt Services
Game Development
Audio Services
Functional Testing
Localization
Localization Testing
Player Support

An average of c. 7,500 people
on the payroll at peak times
working in over 50 languages,
more than 50 studios,in 21 countries, on 4
continents
7© 2019 Keywords Studios PLC

Market leading position
We work with 23 of the top 25 games companies
by revenue and 10 of the top 10 mobile games
publishers by revenue.*8© 2019 Keywords Studios PLC* Newzoo, Top 25 Games Companies by Revenue, Dec 2018
and Sensor Tower, Top Apps Games publishers, July 2019

The structural market
opportunity* Based on management’s estimates

Market size and proportion of outsourcing*

Suppliers$3.0bn20%

50+ specialist
10+

40%

Non specialist call centre
operators$800m$1.2bn50%

Game Development$1.0bn50%100+Functional Testing
Player Support

70%

10+

85%
90%
0

9

Localization Testing

Percentage outsourced

50+ including large MLVs

50+

Art Services$150m© 2019 Keywords Studios PLC$200m

Localization
In-house$150m$0.5bn$1.0bn$1.5bnAudio Services$2.0bn$2.5bn$3.0bnAddressing our clients’needs with specialism
and scale
Increasing specialism

Keywords

External development services
on a global platform
Publisher A
Developer X

Developer Y

Developer Z

Publisher based modelA

B

C

Central services function
manages suppliers on a one to one basis
regardless of scale or capabilities

Developer A

Developer B

Developer C

Developer based modelGame Development
Audio Services

Localization
Localization Testing

Increasing scale benefits© 2019 Keywords Studios PLC

Art Services

Functional Testing

Complex and costly tasks
detracts from the core mission

10

Publisher B

Player Support

Themes for today• Benefits of scale– tour of facility, Keywords
Montreal growth story,
Functional Testing case study• Leveraging location
for access to talent andgrowth – case studies• Integration in action– case studies and tour

• Cross selling and crossdelivery – case studies“Keywords Studios is becomingthe ‘go to’ provider for external development services”
11© 2019 Keywords Studios PLC

Tour of
Keywords
Montreal
Please refer to your agenda badge

Prod: 592
Support: 97

Total: 689

Prod: 224
Support: 39

Total: 263

Prod: 257
Support: 30

Total: 287

Prod: 72
Support: 0

Total: 72

Red Group starts at 9:50
Tour leader: Nicolas Liorzou / Jon HauckBlue Group starts at 10:05
Tour leader: Michael Cartier / Andrew Day

12© 2019 Keywords Studios PLC

Seats:

Prod: 1145

Support: 166

Total: 1311

Montreal:
A journeyof growth
Key message

9:30 - 12:30

Morning Session
Opening remarks
Tour of Keywords Montreal
Montreal: A journey of growthIntegration in action:mini case studies

12:30

Lunch on site

13:40 - 16:00

Afternoon Session
Integration in action:
in-depth case studies

Revenue, platform, growth

Panel: Keywordians on integration
Closing remarks plus final Q&A
16:00

13

© 2019 Keywords Studios PLC

Food and drinks on siteA journey of growthand consolidation
A history of growth in the Americas
Organic
growth160

Indicative
revenue

140

120

LOLA
VMC
GameSim
Xloc

Million Euros

100

Acquired revenue
for each acquisitionin the Americas

80

Snowed In
Blindlight
MaximalDescriptive
Video Works
Sunny Side Up

Art Services
Game Development

60

40

20

Audio Services

EnzymeLiquid Development
Volta
Alchemic Dream
ReverbFunctional Testing
Localization
Localization Testing

Babel

Player Support

0
2014

14

© 2019 Keywords Studios PLC

2015

2016

2017

2018

2019

2012-20192019

Montreal in the Americas
Montreal’s regional centre of excellence:• Central regional management
for the Americas• Regional finance services centre
for the Americas• Regional IT management for the Americas• Regional HR management for Canada• Sales support centre – global sharedfunction15© 2019 Keywords Studios PLC

Montreal’s Journeyof GrowthMontreal's Keywords Hub - Full time equivalent staff
2012 - 2019

Acquisition of Sunny SideUp

Acquisition of Snowed In

2000

Opening of Player
Research Canada

Back-office Support
1500

Dec. 2010:
Incorporation of
Keywords International
Corporation Inc in
Canada1000

Operational Support

Acquisition of
Alchemic Dream. first
Player Support services
in Keywords

Art Services

Acquisition of Enzyme

Game Development
Acquisition of Volta

Functional Testing

Creation of operational
hub for the Americas

Localization
Localization Testing

500

Player Support

Acquisition of VMC

Acquisition of Babel© 2019 Keywords Studios PLC

Sep-19Jul-19

May-19Mar-19Jan-19Sep-18

Nov-18

Jul-18May-18Mar-18Jan-18

Nov-17

Sep-17

Jul-17Mar-17May-17Jan-17

Nov-16

Jul-16

Sep-16May-16

Mar-16

Jan-16

Sep-15

Nov-15

Jul-15May-15Jan-15Mar-15

Nov-14

Sep-14Jul-14Mar-14May-14Jan-14

Nov-13

Jul-13

Sep-13May-13Mar-13Jan-13

Nov-12

Sep-12

Jul-12

May-12

Jan-12

16

Mar-120

9:30 - 12:30

Integrationin action
Mini case studies

Morning Session
Opening remarks
Tour of Keywords Montreal
Montreal: A journey of growthIntegration in action:mini case studies

12:30

Lunch on site

13:40 - 16:00

Afternoon Session
Integration in action:
in-depth case studies

Key message
Integration and synergies

Panel: Keywordians on integration
Closing remarks plus final Q&A
16:00

17

© 2019 Keywords Studios PLC

Food and drinks on site

Claude Bordeleau

Why Keywords isthe ideal platform
for Volta to optimize
its potential
18© 2019 Keywords Studios PLC

What is VOLTA?

Philosophy:

VOLTA is a visualdevelopment studio
dedicated to creating
high-end 2D and 3D
visuals, as well as
cinematics for the video
game, toy and film
industries.

Decentralized leadershipbut centralized support
helping a strong focus onlong term and vision. We
can become the best of
our niche without losing
the “je-ne-sais-quoi” ofthe business.

Founded: 2006
Workforce: 150+ (in-house and external)
Location: Quebec City (Canada)19© 2019 Keywords Studios PLC

Growing the bottom linewith synergies
Reduction of downtime

Reduced churnShared resources & projects during short
downtimes

Stability, improved work conditions,better projects

Downtime reduction
since acquisition

69%

20

© 2019 Keywords Studios PLC

Before Keywords

After Keywords

34%

4%

Growing the top linewith synergies

21© 2019 Keywords Studios PLC••

How VOLTA fits into Keywords’ Art Services
Ability to sell in other services

Growing the top linewith synergies

Doubling revenues by 201922

© 2019 Keywords Studios PLC

The one-stop shop for art services

Video games are an art formin themselves.
Developers want to avoid theburden of coordinating multiple
vendors.
Through the synergies wecreate, we provide a range of
specialist expertise at thehighest level, with a single
point of contact.
23© 2019 Keywords Studios PLC

Louis-Étienne Beaupré24© 2019 Keywords Studios PLC

Sunny Side Up

Boutique marketing
agency working
exclusively in video
games

Founded: 2011
Location: Quebec City (Canada)25© 2019 Keywords Studios PLC

More than 50 games,
16 game developers and2 billion views on
Youtube alone.
Repeat work for Ubisoft,
EA, Google, Activisionand more.

Joining Keywords

Growth is a two way street
Sunny Side Up is uniquely
positioned early in thedevelopment process26© 2019 Keywords Studios PLC

Marketing services:A focal point for crossservice collaboration
•

Audio

•

Animation / Motion capture•

Modeling / Shading

•

VFX

•

2D Art•3D Art•Engineering

The Quebec Hub

•

•

•
•

27

Sunny Side Up and Volta- A natural fit
Sharing the samecommon space
Cost effective
Creative and business
opportunities© 2019 Keywords Studios PLC

The Quebec Hub
Ancestors:
the Humankind Odyssey

•

•

•

28

Key art request :Collaboration with Volta
Leveraging each others’
experience and strengths
Result:2 trailers + strong
relationship with
Private Division© 2019 Keywords Studios PLC

Fire Without Smoke
Carsten Myhill29© 2019 Keywords Studios PLC

Managing Director
Fire Without Smoke

Roles:•

Business development•

Account management•

Creative•

Producer

But also…

30

•

HR

•

Finance•

Credit control

•

IT

•

and everything else!

© 2019 Keywords Studios PLC

Since joining

The Keywords family

Recent examples of new business acrossservice lines:

E-gaming

Keywords Functional Testing
Roles:•

100% of time is now focusedon my strengths•

Leveraging expertise and relationships acrossmultiple disciplines•

Bringing Game Development
and Marketing opportunities together

Casting
BlindlightSound mixes
Liquid Violet

Music licensing/creation
Cord

Alpha build testing
Player Research

and…. localization of everything that
Fire Without Smoke produces31© 2019 Keywords Studios PLC

Q&A for mini case studies andjourney of growth

Nicolas Liorzou

32© 2019 Keywords Studios PLC

Claude Bordeleau

Louis-Étienne
Beaupré

Carsten Myhill9:30 - 12:30

Morning Session
Opening remarks
Tour of Keywords Montreal
Montreal: A journey of growthIntegration in action:mini case studies

Lunch

12:30

Lunch on site

13:40 - 16:00

Afternoon Session
Integration in action:
in-depth case studies
Panel: Keywordians on integration
Closing remarks plus final Q&A

16:00

33

© 2019 Keywords Studios PLC

Food and drinks on site

9:30 - 12:30

Morning Session
Opening remarks
Tour of Keywords Montreal

Integrationin action
In-depth case studies

Montreal: A journey of growthIntegration in action:mini case studies
12:30

Lunch on site

13:40 - 16:00

Afternoon Session
Integration in action:
in-depth case studies
Panel: Keywordians on integration
Closing remarks plus final Q&A

16:00

34

© 2019 Keywords Studios PLC

Food and drinks on site

Becoming the ‘go-to’
provider…
‘Go to’provider* Based on management’s estimates

Market size and proportion of outsourcing*$3.0bn

20%
$800m

40%

$1.2bn50%

Game Development$1.0bn50%Functional Testing
Player Support

70%
85%
90%
0

35

© 2019 Keywords Studios PLC

Art Services$150m

Localization Testing

Percentage outsourced$200m

Localization
In-house$150m$0.5bn$1.0bn$1.5bnAudio Services$2.0bn$2.5bn$3.0bnHow Keywords integrates
Preliminary stages during due diligence

36

Post acquisition•

Understand the chemistry of the company•

Share the Keywords vision and story•

Share our Integration Memorandum– a charter that governs our approach
to integration•

Consolidate financial reporting•

Introduce and blend policies•

Showcase opportunities for growth
for the company and the employees•

Integration within service lines, with businessdevelopment and across regional lines•

Build an integration plan•

Management transition plans discussed© 2019 Keywords Studios PLC

VMC Integration Case StudyVMC acquisition and integration － all about cost
reduction, systems integration, facilities consolidationand making us the go to Functional Testing provider

37

Status and challenges

Goals & Milestones

1,500 employees$57m in revenues•

Quick integration (less than 1 year)•

No impact to production•

4 Service lines•

2 Studios: Seattle and Montreal•

Stabilize client base•

Embedded Technical Services
and Global Beta Test Network•

Avoid key staff departures•

Strong client base but at risk•

Improve margins to Keywords norms•

Low staff morale© 2019 Keywords Studios PLC

VMC Integration Case StudyVMC Integration Plan

38

In Montreal

Deployment of all existing Keywords
processes to VMC, complete assimilation
into one single studio

In Seattle

Combine 4 facilities into 1 by moving
Keywords staff into VMC premise

Embedded Technical Services
and Global Beta Test Network

Limited disruption,
addition to our portfolio of services

Management and support functions

Integrated within existing Keywords
management structure in Montreal© 2019 Keywords Studios PLC

VMC Integration Case Study

Discovery

Quick wins
Integration plan
finalized
Redundancy
management

Meeting with all key
employees

Quality of life
bonuses

Salaryharmonization

HardwarerenewalBreak room

Cultural integration

Harmonization

All main systems
harmonized

Employeehandbook
Payroll integration

Service line
branding

2 locations, 1 studio

IT systems
mergedTraining room

Client communication and relationship management
Weekly and monthly integration communication
Cultural integration
November39© 2019 Keywords Studios PLC

DecemberJanuary

April

VMC Related Impact

Functional Testing– Primary objectives• Reinforce client communications• Manage service rebranding• Internal role alignment• Integrate tools and best practices• Common operating platform

40© 2019 Keywords Studios PLC

VMC Related Impact

Functional testing– Go to platform supporting
accelerated growthExpertiseCompatibility testing
Automation testing41© 2019 Keywords Studios PLC

PlatformBusiness
Development

Montreal volume

Increased scale

Embedded services

Enhanced quality

Community testing

Greater flexibilitySnowed in Studios
Jean-Sylvain Sormany42© 2019 Keywords Studios PLC

Snowed in Studios
Founded: 2010
Location: Ottawa (Canada)Core Focus: Engineering projects

Worked on renowned games:

43•

Deus Ex Human Revolution•

Shadow of Mordor•

The Sims•

The Elder Scrolls•

Fallout•

Dead By Daylight© 2019 Keywords Studios PLC

Snowed in Studios

Integrationin the Keywords group•••

Acquired by Keywords Studios in July 2018
Grew staff from 29 at acquisition to 59 in 2019
Significant revenue growth since acquisition

Snowed In Studios Headcount

Acquisition Year

140
120
100
80
60
40
20
0
2010
44

2011

© 2019 Keywords Studios PLC

2012

2013

2014

2015

2016

2017

2018

2019

2020

Joining Keywords:

Expansion of clients
Keywords’ platform enabled and accelerated our growth plans

Core support

Access to experts

Global sales

Internal studios

IT, HR, finance

GDPR, security, tax

Local to global

Strong collaboration

Existing clients45© 2019 Keywords Studios PLC

Access to new clients

Joining Keywords:

Internal collaboration

46•

Working with Lakshya to provide art
on a free to play card game•

Working in engineering partnershipwith GameSim on an EA engagement•

Provided strategic support in helping
GameSim win an engagement•

Being part of multi-studio offering(Functional Testing/Localization Testing/Localization/Engineering) with Keywords
Montreal working on a survival MMO
game (Scavenger Studio).

•

Supporting a Fire Without Smoke projectfor Ubisoft, by providing engineering efforts•

Being the catalyst to a collaboration between
Bethesda and SperaSoft for backend
development© 2019 Keywords Studios PLC

Keywords anddeveloping Ottawa
Leveraging a first existing territory
to build a new multi-service hub:•Localization Testing: Test bed started andexpansion ahead•

Art Services: Exploring this expansion option
with Volta•

Quickly became the largest game studioin Ottawa

Plans for 2020

47•

Expansion into new facilities•

Designated location for localization testing(5,000 square feet)•

Expansion on the engineering space•

Exploring opening second locations© 2019 Keywords Studios PLC

Snowed in Studios
is a land andexpand case study

Q&A for all presenters

Alexander Stokes

48© 2019 Keywords Studios PLC

Michael Cartier

Nicolas Liorzou

Jean-Sylvain
Sormany

Mathieu
Lachance

9:30 - 12:30

Morning Session
Opening remarks
Tour of Keywords Montreal
Montreal: A journey of growth

Panel:
Keywordians on
integration

Integration in action:mini case studies
12:30

Lunch on site

13:40 - 16:00

Afternoon Session
Integration in action:
in-depth case studies
Panel: Keywordians on integration
Closing remarks plus final Q&A

16:00

49

© 2019 Keywords Studios PLC

Food and drinks on siteMontreal Support Hubfor the Americas

Building a platform:• To provide back office support(HR, Finance and IT)• To support the business acrossmultiple locations• To deploy common tools and processes• To enable service lines to focus
on growth50© 2019 Keywords Studios PLC

Keywordians panel on integration

Julie MorinHR

51© 2019 Keywords Studios PLC

Viktoria Krasteva
Finance

Karl Baker
IT

Alexandre Major
Security

9:30 - 12:30

Morning Session
Opening remarks
Tour of Keywords Montreal
Montreal: A journey of growthIntegration in action:mini case studies

Closing remarks

12:30

Lunch on site

13:40 - 16:00

Afternoon Session
Integration in action:
in-depth case studies
Panel: Keywordians on integration
Closing remarks plus final Q&A

16:00

52

© 2019 Keywords Studios PLC

Food and drinks on site

Building a global service
delivery platform though M&A
and organic investments
Average organic
growth +15%

Rev €m* 2019 revenue estimate based off analyst complied forecasts. Provision of these
forecasts does not imply Keywords’ endorsement or concurrence with the analyst
information

43 targeted acquisitions across 18 geographies:
€94m

€317m

•

Building out global service line platform•

Achieving scale (e.g. Functional Testing inNorth America)•

Geographic proximity to customer and labour
pools

€207m

Disciplined and targeted investments - €207m of‘acquired’ revenue at ~1.1x revenue multiple
€16m
2013
53

© 2019 Keywords Studios PLC

Acquired
Revenue

Organic
Revenue

2019*

Complemented by strong organic revenue
growth through organic investments and benefitsof service platform

Closing Remarks• Benefits of scale• Integration in action• Leveraging location foraccess to talent and growth• Cross sellingand cross delivery“Keywords Studios is becomingthe ‘go to’ provider
for external development services”
54© 2019 Keywords Studios PLC - CONFIDENTIAL

Q&A for all presenters

Andrew Day

55© 2019 Keywords Studios PLC

Jon Hauck

Nicolas Liorzou

Mathieu
LachanceWelcome tostay for foodand drinks

9:30 - 12:30

Morning Session
Opening remarks
Tour of Keywords Montreal
Montreal: A journey of growthIntegration in action:mini case studies

12:30

Lunch on site

13:40 - 16:00

Afternoon Session
Integration in action:
in-depth case studies
Panel: Keywordians on integration
Closing remarks plus final Q&A

16:00

56

© 2019 Keywords Studios PLC

Food and drinks on site