Investor Presentation
Andrew Day, CEO
Jon Hauck, CFO
November 20172019
Full Year Results
Andrew Day, CEODavid Broderick, CFO

9 April 2018

Contents2

 Keywords Studios Snapshot

Slide 3

 Industry Drivers

Slide 13 Strategy and Outlook

Slide 17

 AppendicesSlide 22

© 2019 Keywords Studios PLC - CONFIDENTIAL

Keywords Studios Snapshot
Slide 3© 2019 Keywords Studios PLC - CONFIDENTIAL© 2019 Keywords Studios PLC - CONFIDENTIAL

Expertise across the game development cycle
Art Services

Game Development

The creation of video game graphical art, including
concept art, 2D and 3D art asset production &animation. Marketing services including game
trailers, marketing art and materials.

Game development services including full game development, codevelopment, porting of games from one platform to anotherincluding remastering, tool development and consulting services ona work for hire basis. Also includes proprietary software solutions
for analytics, procedural generation of art assets and player
behaviour research consulting services.

Player Support

Audio Services

365/24/7, multilingual support for gamerswhen games are in live operation, forum
monitoring and moderation services & social
media engagement on behalf of the gamebrand.

Multi-language voiceover recording, original language
voice production, Hollywood production, music
management, sound effects and related services.

Game
development
cycle

Localization Testing

Functional Testing

Testing for out of context translations, truncations,overlaps, spelling, grammar, age rating issues,geopolitical and cultural sensitivities and console
manufacturer compliance requirements in over 30
languages using native speakers.

Quality assurance, including discovery and documentation ofgame defects and testing to verify the game’s compliance withhardware manufacturers’ and app stores’ specifications, as well
as focus group and user experience testing and consulting.

Localization
4© 2019 Keywords Studios PLC - CONFIDENTIAL

Translation of in-game text, audio scripts, culturaland local adaptation, accreditation packaging andmarketing materials in over 50 languages.

Better balanced business; higher up the value chain
Art Services

H1 Pro Forma Revenue
12.0%
13.0%

14.0%

Game Development

14.0%
7.0%

Audio Services

8.0%

HY 201817.0%€123.4m

19.0%

HY 201915.0%€154.4m

Functional Testing

17.0%

13.0%
12.0%
18.0%

Art Services

Game Development

Localization

21.0%

Localization Testing

Functionality Testing
Localization

Player Support

Player Support
Audio Services

5

Localization Testing© 2019 Keywords Studios PLC - CONFIDENTIAL

International scale & flexibility across markets is key
An average of c. 7,000 people
on the payroll at peak times
working in over 50 languages,
more than 50 studios, in 21
countries, on 4 continents
Art Services
Game Development
Audio Services
Functionality Testing
Localization
Localization Testing
Player Support

6© 2019 Keywords Studios PLC - CONFIDENTIALMarket leading position

We work with 23 of the top 25 games companies by revenue and 10 of the top 10 mobile games publishers byrevenue.*7© 2019 Keywords Studios PLC - CONFIDENTIAL* Newzoo, Top 25 Games Companies by Revenue, Dec 2018
and Sensor Tower, Top Apps Games publishers, July 2019

H1 Snapshot: Strong progress
Strong organic growth

17.3% increase in like-for-like revenue2

Considerable cross selling progress with a 14% increase in clients buying three or more services to 113 (FY 2018: 99)

Investment and expansion in response to demand

Invested in capacity, adding over 1,400 work stations across multiple studios to support organic growth in 2019 (only c.200 available in H1)

Increase in opex to strengthen management teams and support infrastructure across the business

Acquisitions expanded our platform and added new services

6 acquisitions since January 2019 so far completed and integrated, expanding new and existing service linesAnnounced acquisition of TV Synchron in September, a Berlin based dubbing and voice-over studio

Acquisitions added further scale and diversified marketing services, audio and game development services

Prior acquisitions supported strong growth in two largest service lines

Largest acquisition in 2018, Studio Gobo and Electric Square, outperformed expectations



Largest acquisition in 2017, VMC, brought scale, having been fully integrated in 2018
2 Like for like revenue at constant exchange rates is calculated by adjusting the prior year revenues comparison by adding pre acquisition revenues

for the corresponding period of ownership in the current year results and applying consistent foreign exchange rates in both years

8© 2019 Keywords Studios PLC - CONFIDENTIAL

Service Line Snapshot
HY 2019 progress

15.8% like for like growth

32.9% like for like growth

6.7% like for like growth9

Focus for H2 2019 and 2020

• 50% growth to €22.2m due to effect of 2018 and2019 acquisitions• Sperasoft Art now under Game Development• Three marketing services businesses now fullyreflected within Art• Further organic growth• Complemented by acquisitions• Marketing services businesses may become aseparate service line if more are acquired• Formerly called Engineering• Second largest service line
• 130% growth to €29.6m driven by demand andacquisitions• Demand continues to exceeded capacity• All 6 studios actively recruiting to meet demand• Expect strong growth in H2, at slightly slower rate
• Pricing increases will start to flow through• An active acquisition pipeline• Aim to add scale and geographic reach• H2 2019 – Finalisation of underperforming contract• Grew 31% to €17.8m including the contribution of 4
acquisitions in 2018 and DVW in 2019.
• Growth bolstered by added disciplines - music
management, sound design and voice production• London and Los Angeles audio studios granted
Netflix preferred supplier status• Typical seasonal spike not as pronounced in H2
due to transition to new consoles• Consider acquisitions in key locations• Securing Netflix vendor status for other studios• Scope to add further capabilities© 2019 Keywords Studios PLC - CONFIDENTIAL

Service Line Snapshot
HY 2019 progress•••

Focus for H2 2019 and 2020

Grew by 42% to €31.8m
Steep ramp up in staff increased costs
Established as the ‘go to’ in North America, with benefitof scale brought through VMC acquisition
New operations in Mexico City, Katowice and Tokyo•••

Grew by 8% to €23.1m
Benefitting from trend towards continuous content
generation for live games••

Continue to establish machine translation
Build on market leading position•••

Now just 7.0% of pro forma Group revenues
Grew by 7.3% to €10.3m
Established Localization Testing in Katowice•

Expect some growth but not the typicalpronounced seasonal spike in H2 due totransition to new consoles••

19.6% growth on HY18 to €18.3m
Manila and Katowice rapid expansions completed•

Aim to differentiate video games specificservices from other large providers in the wider
customer support market to consolidate ourprogress in this segment

33.3% like for like growth ••Expect further strong growth and improving
margins
Continue to consolidate market leadership in N.
America

4.6% like for like growth

4.7% like for like growth

11.3% like for like growth10© 2019 Keywords Studios PLC - CONFIDENTIAL

Strong growth across key metrics
Adjusted PBT – 68% CAGR FY 2015-2018

Revenue – 63% CAGR FY 2015-2018

40
35
30
25
€m
20
15
10
5
0

300
250
200
€m
150
100
50
0
2015

2016

2017

2018

2015

H1 2019

50
40
30

%

20
10
0
2015

11

2016

2017

2018

H1 2019 3© 2019 Keywords Studios PLC - CONFIDENTIAL

2017

2018

H1 2019

ROCE – 21.6% average FY 2015-2018

Adjusted EBITDA – 67% CAGR FY 2015-2018

€m

2016

30
25
20
15
10
5
0
2015

2016

2017

2018

Rolling
12m

3 On a pre IFRS 16 basis

Delivering consistent and diversified growth150

No of clients using 3 or more
services
93

100

60%

Limited customer concentration

113

99

40%

2

20%

1

64

51
50

0%

0
2015

2016

2017

2018

H1 19

0
2015

2016

% Revenue top 5 customers

Revenue and margin growth
300
250
200
€m
150
100
50
0

20
15

10

%

5
0
2015

2016

Revenue (€m)
12

3

2017

2018

H1 19

Adj. PBT Margin (%)© 2019 Keywords Studios PLC - CONFIDENTIAL

2017

2018

H1 2019

No of customers over 10% of revenue

Revenue by service line (€m)

60
50
40
€m 30
20
10
0
Art Services

Audio
Production

2015

Localization

2016

Functional
Testing

2017

Localization
Testing

2018

PlayerSupportH1 2019

Game
Development

Industry Drivers and Opportunities
Slide 1313

© 2019 Keywords Studios PLC - CONFIDENTIAL

Growing video games market driving more strategic outsourcing
Video games are a rapidly growing, almost $152bn, niche global market –with expected growth of 9%+ p.a•

Increased complexity, volume and speed of content generation has
driven the trend towards outsourcing - most of it on a tactical basis•

Expect more strategic outsourcing as publishers focus on what makes
their IP unique - vertically integrated models are a distraction•

Keywords has the scale, services and footprint to respond to thisacceleration in outsourcing, in an otherwise fragmented service market•

We estimate the services market to be worth over $6.5bn, with around
40% outsourced today; in film and TV, 90%+ is outsourced•

Cloud based gaming (Netflix of games) is a major theme for 2019•

The new console generation is expected in 2020•

Continued strong growth of both PC and Mobile gaming
Source: NewZoo Global Games Market Report, June 201914

© 2019 Keywords Studios PLC - CONFIDENTIAL

Acquisition opportunities in a highly fragmented market
Suppliers

Market size and proportion of outsourcing*
$1bn

50%

100+

$3bn

20%

50+ specialist

90%

50+

$150m

30%

10+

50+ including
large MLVs

85%

$800m
$200m
Percentage outsourced

10+

70%

$150m
In-house

Non specialist callcentre operators$1.2bn40%
0$0.5bnArt Services$1.0bnAudio Services$1.5bn$2.0bn$2.5bn$3.0bnLocalization Testing
LocalizationGame Development

15© 2019 Keywords Studios PLC - CONFIDENTIAL

Functionality Testing

Player Support* Based on management’s estimates

Keywords structural factors that power growth
Unique end to end global deliver service platform
Service lines as pillars for growthLand and expand strategies for studios in territory(Example: Montreal, Mexico, Tokyo, Katowice)

Relationships with all the top games companies
Close proximity to our clients
Access to talent pools (India, China, Manila)
16© 2019 Keywords Studios PLC - CONFIDENTIAL

Outlook – Andrew Day

Strategy and Outlook
Slide 1717

© 2019 Keywords Studios PLC - CONFIDENTIAL

Continuing to deliver on our strategy
Our strategy is to build the world’s leading technical and creative platform for the video games industry

18

Organic growth and cross-selling

Growing market share

Selective acquisitions

Expanding geographic reach

Extending our range of services

Gradually introducing technology© 2019 Keywords Studios PLC - CONFIDENTIAL

Managing growthGroup

RegionAndrew Day
CEOServiceLine

Igor Efremov
Chief Commercial
OfficerMike Wallen
Sales Director

Ashley Liu
Art

Andrea Ballista
Audio

Jamie Campbell
Game Development

Mathieu Lachance
FQA

Andrew Brown
Chief Marketing
Officer

Jaime Gine
Chief Customer
Officer

Jon Hauck
Chief Financial
Officer

Gerry Cleary
Global HR Director

P

Fabio Minazzi
Localization

Thommy Barth
LOC QAFred Arens
Player Support

Mark Rizzo
Global Operations
Director

Giacomo Duranti
Chief Operating
Officer

Nicolas Liorzou
RMD Americas

Kevin BadeenGroup IT Director• We continue to strengthen our operational management teams, support functions andinfrastructure to support our increasing scale• Considering consolidation of certain service lines in order to maximise synergies
19© 2019 Keywords Studios PLC - CONFIDENTIAL

Fulvio Sioli
RMD Europe

Chris Kennedy
RMD Asia

Outlook Trading in the second half has started well with expected high levels of activity coming
through Particularly strong trading in Game Development, Functional Testing and Art Creation
 Audio and Localisation Testing not expected to see their typical seasonal peak in activity due to console
transition

 Expect to benefit from strong growth across mobile and PC games, the new gamestreaming and subscription services, and earlier stage development of new console games H1 and H2 investments will enable us to capture growth opportunity from accelerating
trend towards outsourcing
 H2 and 2020 to see improved margins as we incrementally benefit from those investments
 Well placed to deliver FY revenues at the upper end of market expectations, with our profit
expectations broadly unchanged
 Continue to see strong cross selling opportunities across the business Actively reviewing a healthy pipeline of acquisition opportunities

A strengthened services platform from which to grow20

© 2019 Keywords Studios PLC - CONFIDENTIAL

Investment summary
Diversified access to a large, high growth market

Key drivers:
Market growth; continuous & higher definition content; outsourcing trend; streaming of games

Strong track record of growth, both organically and through acquisition
Significant opportunity to continue to grow our service capabilities, geographicalpenetration and client relationships
Culture, business model and management structure that supports growth21© 2019 Keywords Studios PLC - CONFIDENTIAL

Appendix

Appendix
Slide 2222

© 2019 Keywords Studios PLC - CONFIDENTIAL

HY 2019 financial highlights
Adj. EBITDA1 of €25.8m

Adj. PBT 1 of €18.4m

Up 19.5% on pre IFRS 16 basis
to €22.3m

Up 15.5% on pre IFRS 16 basis
to €18.6m(HY 2018: €18.7m)(HY 2018: €16.1m)

Adj. EPS1 of 18.36c

DPS up 10%

ROCE up 210 bps(18.71c pre IFRS 16)

0.58p

YE 30 June 19: 19.7%(HY 2018: 18.30c)(HY 2018: 0.53p)(YE 30 June 18: 17.6%)

HY Revenue up 39.3% to€153.2m(HY 2018: €110.0m)

LFL CC Revenue up 17.3%
to €146.4m(HY 2018: €124.8m)

1 Please note the prior year has been restated to be consistent with the presentation in the FY18 Annual Report23© 2019 Keywords Studios PLC - CONFIDENTIAL

Income statement
 Revenue up 39.3% to €153.2m
 Gross margin of 36.1% (HY 2018: 37.4%) resulting from: rapid recruitment and training; staffing of new facilities; and impact of one significant project brought in by acquisition
 Adjusted operating costs (excl. impact of IFRS 16) were 21.5%of revenue (HY 2018: 20.5%), as we invested in expansion andstrengthening management
 Adjusted EBITDA was €25.8m, on a pre IFRS 16 basis it was€22.3m (H1 2018: €18.7m)
 Adjusted profit before tax was €18.4m, or €18.6m on a pre IFRS
16 basis (HY 2018: € 16.1m)
 Adjusted effective tax rate increased to 19.8% (HY 2018: 19.2%)*Please note the prior year has been restated to be consistent with the presentation in the FY18 Annual Report^ Excluding the impact of IFRS 16 for H1 2019, Other administrative expenses would have been €0.1m higher, while Operating profit would have been €0.1m lower. Adjusted Profit before Tax, Profit before Tax and Net income
would all have been €0.2m higher. Hence IFRS 16 has had a minimal impact on the Income statement for the period ended 30 June 2019.

12© 2019 Keywords Studios PLC - CONFIDENTIAL

Balance sheet
H1 2019

H1 2018

FY 2018

Property, pl ant and equi pment

17,666

11,422

15,002

Ri ght of us e as s ets

20,410--163,372

123,471

154,202

23,06027,201

25,884

-

114

160

3,340

1,265

2,967

227,848

163,473

198,215

Trade recei vabl es

43,09436,22637,019Other recei vabl es

37,23830,11823,459Cas h and cas h equi val ents

37,76332,18439,871

118,095

98,528100,349€’000s•Net debt of €9.0m (HY 2018: net cash €0.1m) after: €7.0m net cash consideration for acquisitions (including deferred) €2.8m of acquisition costs and integration expenses (HY 2018: €2.0m).

Non-current assets

Goodwi l l
Intangi bl e as s ets
Inves tment i n as s oci ate•

Accrued MMTC* grant & VGTR** credits claims of €18.2m at period end.

Deferred tax as s ets
Current assets•€5.1m capital expenditure (HY 2018: €3.8m) included:
 Continued investment in software and computer equipment primarily
for Testing, Art and Game Development
 Investment in new and expanded facilities particularly in Manila,
Montreal, Mexico City and Katowice

Current liabilities
Trade payabl es

7,068

7,268

7,142

Other payabl es

50,64232,85041,153Loans and borrowi ngs

46,58432,08440,071

Corporati on tax l i abi l i ti es

6,249

2,877

6,665

Leas e l i abi l i ty

7,268

-

-

117,81175,07995,031Other payabl es NCL

1,496

1,035

1,062

Empl oyee defi ned benefi t pl ans

1,489

1,233

1,378

208

45

230

7,196

9,560

8,488

13,374--Non-current liabilities

Loans and borrowi ngs NCL
Deferred tax l i abi l i ti es
Leas e l i abi l i ty NCL*MMTC – ‘Multimedia Tax Credits’ are employment grants provided in Quebec Province**VGTR – ‘Video Game Tax Relief’ in the UK
25© 2019 Keywords Studios PLC - CONFIDENTIAL

Net Assets

23,763

11,873

11,158204,369

175,049

192,375

Cashflow€’000s•Net cash from operating activities of €9.2m (HY 2018: €6.1m)•

MMTCs & VGTR credits of €6.9m accrued in the period

Profit after tax•

Income and expens es not affecti ng operati ng cas h fl ows

2019 interim dividend of 0.58p (2018: 0.53p) in line with progressive
dividend policy, with a cash cost of €0.4m in H2 2019€’000s

H1 2019 H1 2018 FY 2018
46

49

47

H1 2018

FY 2018

3,040

7,750

14,903

23,34010,68529,033(13,378)(9,447)(5,452)(3,769)(2,891)(6,304)

9,233

6,097

32,180Acqui s i ti on of s ubs i di ari es(5,156)(10,625)(24,889)

Settl ement of deferred l i abi l i ti es on acqui s i ti ons(1,808)(1,011)(1,603)

-

(114)

(226)

(5,061)(3,791)(9,440)(332)-(1,599)(1,677)(2,006)(4,530)(14,034)(17,547)(42,287)

Loan to fi nance acqui s i ti ons

7,001

13,75531,850

Repayment of l oans

(500)

(853)

(10,835)

Changes i n operati ng as s ets and l i abi l i ti es
Income taxes pai d
Net cash provided by operating activities

Inves tment i n as s oci ate
Acqui s i ti on of property, pl ant and equi pment

Debtors Days

H1 2019

Inves tment i n IP
Acqui s i ti on and i ntegrati on cas h outl ay
Interes t recei ved

Work completion to cash collection days

55

60

55

Net cash used in investing activites

Share opti ons exerci s ed
Di vi dends pai dPayments of pri nci pal on l eas e l i abi l i ty

14

© 2019 Keywords Studios PLC - CONFIDENTIAL

-

547

1,203

174

(773)

(696)

(1,080)-(3,236)-

Interes t pai d on pri nci pal of l eas e l i abi l i ty

(338)

-

-

Interes t pai d

(394)

(144)

(502)

Net cash used in financing activites

2,307

13,265

19,607

Increase / (decrease) in cash and cash equivalents(2,494)

1,815

9,500

Exchange gain / (loss) on cash and cash equivalents

386

(5)

(3)

Opening cash

39,87130,37430,374

Closing Cash

37,76332,18439,871

Income Statement –Items excluded from Adjusted PBT
H1 2019 H1 2018 FY 2018€’000sCost of Acquisition & Integration

2,981

2,133

5,607

Share Option Expense

4,011

835

4,129

Amortisation of intangible assets

3,491

3,095

6,872

Foreign exchange (gain)/losses

1,159

(794)

(791)

92

n/a

n/a

11,734

5,269

15,817

Non Controlling interest27© 2019 Keywords Studios PLC - CONFIDENTIAL

Major Shareholders*Shareholder
Franklin Templeton

Shares5,670,381% Holding
8.7

Octopus Investment Partners

3,882,262

6.0

P.E.Q Holdings Limited

3,500,736

5.4

Andrew Day

3,296,573

5.1

T Rowe Price Global Investments

3,036,233

4.7

Liontrust Asset Management

2,323,774

3.6

Aberdeen Standard Investments

2,013,824

3.1* Based on available disclosures to company as at the 30th September 201928

© 2019 Keywords Studios PLC - CONFIDENTIAL

Alternative Performance Measures& IFRS 16 Impact Analysis€’000s

H1 2019(reported)

IFRS 16
H1 2019
adj Pre-IFRS 16

H1 2018
FY 2018(reported) (reported)

Adjusted Operating Costs

29,416(3,575)32,991

22,50252,013

EBITDA

18,917

3,575

15,342

15,81734,304

Adjusted EBITDA

25,824

3,575

22,24918,65843,729Adjusted profit before tax ^18,417(230)

18,647

16,10737,911

Adjusted effective tax rate

19.8%

0.3%

19.5%

19.2%

19.0%

Adjusted earnings per share *18.36(0.35)

18.71

18.30

41.80

Return on Capital Employed

19.7%

-0.1%

19.8%

17.6%

19.4%

Operating cash flow

7,941

3,575

4,367

5,197

29,044

Adjusted operating cash flow

9,834

3,575

6,260

6,516

33,168Adjusted operating cash conversion ratio

53%

19%

34%

40%

87%

* Adjusted Earnings per Share has been restated to adjust the Adjusted Profit after Tax for the tax impact of the Adjusted Operating Costs, as the directors have considered this to be a moremeaningful presentation. Please also note the comparative periods have been restated to be calculated on a consistent basis.
^ Adjusted Profit before Tax for HY18 has been recalculated to reflect the same methodology as presented in FY18 Annual Report, Alternative Performance M easures.

29© 2019 Keywords Studios PLC - CONFIDENTIAL

Acquisition HistoryYear

Art Services

2014

Audio

Functional
Testing

Localization

Localization
Testing

Lakshya Digital

Liquid Violet
Binari Sonori

Babel MediaBabel Media
Binari Sonori

Babel Media

2015

Liquid Development

ReverbKite Team2016

Mindwalk
Volta

Synthesis
Sonox

EnzymePlayer Research

Synthesis
Sonox

2017

SPOV
RedHotGameSimd3t
Sperasoft

La Marque Rose
Dune Sound
AsRec

VMC

VMC
XLOC
Around the Word
La Marque Rose
Dune Sound
AsRec
LOLA

2018

Fire Without Smoke
Trailer Farm

Snowed In
Studio Gobo
Electric Square
Yokozuna Data

MaximalCord
Laced
Blindlight2019

Sunny Side Up

GetSocial
Wizcorp

Descriptive VideoWorks
TV Synchron

30

Game
Development© 2019 Keywords Studios PLC - CONFIDENTIAL

ReverbKite Team

Player Support

Total Cost*€19.0mAlchemic Dream€10.9mSynthesis
EnzymeAnkama€32.6m

VMC

VMC€101.4m€61.7mAppSecTest*** Includes all cash, deferred and equity portions of consideration** 45% subsidiary interest€11.3m