13 March 2024
Keywords Studios plc ("Keywords Studios", “Keywords”, the “Group”)
Full Year Results for the period to 31 December 2023

Resilient performance, extending our market leadership position
Keywords Studios, the global provider of creative and technology-enabled solutions to the video games andentertainment industries, is pleased to announce its results for the twelve months to 31 December 2023.
Financial Overview:
Results for the twelve-months ended 31 Dec
Group revenue
Organic revenue growth1

Adjusted EBITDA
Adjusted EBITDA margin
EBITDA

2

Adjusted operating profit
Adjusted operating profit margin
Operating profit

3

Adjusted earnings per share
Earnings per share

42

Final dividend per share
Adjusted cash conversion rate
Net cash / (net debt)

5

2023

2022

Change€ 780.4m€ 690.7m+ 13.0%+ 5.6%€ 158.3m
20.3%€ 109.2m€ 146.9m
21.3%€ 120.9m+ 7.8%€ 122.0m
15.6%€ 46.8m€ 114.6m
16.6%€ 71.8m+ 6.5%(34.8)%

112.9c25.3c113.5c61.5c(0.5)%(58.9)%

1.76p

1.60p

+ 10.0%82.3%

100.1%€ (67.5)m€ 81.8m(9.7)%

Finance and Operating Highlights:
•
•
•
•
•
•

Full year revenue growth of 13% to €780m (2022: €691m), 17% on a constant currency basis, driven by robust
organic growth and acquisitions.
Organic revenue growth1, excluding impact of US strikes and FX, of ~9% (6% on a reported basis).
Adjusted operating profit rose 6% to €122m (2022: €115m), with margin of 15.6%, ahead of guidance (2022:
16.6%), reflecting good cost control.
Good Adjusted free cash flow6 of €94m (2022: €112m) was driven by strong H2 cash generation, with
Adjusted cash conversion of 82%, in line with guidance.
Net debt of €68m (2022: net cash of €82m) primarily reflecting another year of strong acquisition activity.
Recommended Final dividend of 1.76p per share (2022: 1.60p), giving a total 2023 dividend of 2.61p (2022:
2.37p), an increase of 10%.

Strategic Highlights:••••

Continue to outperform the market due to our diversified, global platform, and strong strategic execution.
Strategic partnerships bearing fruit, with revenues from Top 25 clients increasing comfortably ahead of theGroup.
Good traction with clients as we further develop and scale our AI post-production technology platform
across Globalize and Engage.
Record year for M&A, with five high-quality acquisitions for maximum consideration of €225m, extending
high-value offerings in Create and Engage and adding €90m of pro-forma revenues.
1

••

RCF increased to $400m, with maturity extended to 2027, cementing our long-term liquidity and flexibility
to pursue our strong M&A pipeline.
Positive recognition of ESG practices, with rating increased to AA at MSCI.

Current trading and outlook
•
•
•

•

We expect to deliver strong revenue and profit growth and further extend our market leadership positionin 2024.
Driven by improving organic growth, recent M&A, and the maintenance of adjusted operating profit
margins above 15% as we continue to manage our cost base and drive efficiencies across the Group.
Our organic growth expectations are unchanged, progressively improving from H2 23 levels as we movethrough the year and as the industry’s appetite for new content returns, as well as allowing time for the
output from Hollywood to increase post the 2023 strikes.
Extensive M&A pipeline of opportunities in 2024 and confident of continuing our long track record ofadding significant value to our business and our clients through our highly value accretive acquisition
strategy.

Bertrand Bodson, Chief Executive Officer of Keywords Studios, commented:“In what was a difficult year for the industry, we delivered resilient performance in 2023 and continued to extend
our market leadership position, reflecting our role as a diversified enabler of the industry. Whilst the industry backdrop remains tough in the near term, our diversified technology-enabled offering and strong client relationshipsmeans that we are incredibly well-positioned to continue to grow our market share as we support clients in thecreation of ever more exciting and immersive experiences.
We made considerable progress against our strategic objectives and delivered a record year of M&A, bringing
greater exposure to higher growth and margin Create services, and have an extensive pipeline of acquisitions in
2024. We will continue to successfully navigate the current market conditions and are excited by the opportunities
that lie ahead as we deliver against our plans and become a +€1bn revenue business in the coming years.”Presentation and Webcast
A presentation of the full results will be made to analysts and investors at 9.00am this morning and the live webcast
can be accessed via this link: https://brrmedia.news/KWS_FYR23
To register for dial in access, or for any enquiries, please contact MHP Group on keywords@mhpgroup.com.

For further information, please contact:
Keywords Studios

Deutsche Numis

Giles Blackham

Nomad & Joint Corporate Broker

Director of Investor Relations

Stuart Skinner / Will Baunton+44 7714 134 681+44 20 7260 1000

gblackham@keywordsstudios.com
MHP Group

Barclays

Financial Communications

Joint Corporate Broker

Katie Hunt / Eleni Menikou / Charles Hirst

Tom Macdonald / Stuart Jempson+44 7884 494 112 / +44 20 3128 8100

+44 20 7029 8000

keywords@mhpgroup.com

2About Keywords Studios (www.keywordsstudios.com)
Keywords Studios is a global provider of creative and technology-enabled solutions to the video games andentertainment industries. Established in 1998, and now with over 70 facilities in 26 countries strategically located in
Asia, Australia, the Americas, and Europe, it provides services across the entire content development life cycle
through its Create, Globalize and Engage Divisions to a large blue-chip client base across the globe.
Keywords Studios has a strong market position, providing services to 24 of the top 25 most prominent games
companies and contributing to over 70% of the 2023 Game Awards winners. Across the games and entertainment
industry, clients include Activision Blizzard, Bandai Namco, Bethesda, Electronic Arts, Epic Games, Konami, Microsoft,
Netflix, Riot Games, Square Enix, Supercell, TakeTwo, Tencent and Ubisoft. Recent titles worked on include Starfield,
Baldur’s Gate 3, Diablo IV, Hogwarts Legacy, Elden Ring, Fortnite, Valorant, League of Legends and Clash Royale.
Keywords Studios is listed on AIM, the London Stock Exchange regulated market (KWS.L).
The Group reports a number of alternative performance measures (APMs) to present the financial performance of the business
which are not GAAP measures as defined by International Financial Reporting Standards (IFRS). The Directors believe thesemeasures provide valuable additional information for the users of the financial information to understand the underlying trading
performance of the business. In particular, adjusted profit measures are used to provide the users of the financial statements aclear understanding of the underlying profitability of the business over time. For full definitions and explanations of thesemeasures and a reconciliation to the most directly referenceable IFRS line item, please refer to the APMs section at end of thestatement.
1

2

3

4

5

6

Organic revenue at constant exchange rates is calculated by adjusting the prior year revenues, adding
pre-acquisition revenues for the corresponding period of ownership, and applying the 2022 foreignexchange rates to both years, when translating studio results into the euro reporting currency.
EBITDA comprises Operating profit as reported in the Consolidated statement of comprehensive income,adjusted for amortisation of intangible assets, depreciation and impairment, and deducting bankcharges. Adjusted EBITDA comprises EBITDA, adjusted for share-based payments expense, costs ofacquisition and integration and non-controlling interest. In order to present the measure consistently
year-on-year, the impact of other income is also excluded.
Adjusted operating profit consists of the Operating profit as reported in the Consolidated statement ofcomprehensive income, adjusted for share-based payments expense, costs of acquisition andintegration, and amortisation of intangible assets. In order to present the measure consistently year-onyear, the impact of other income is also excluded.
The Adjusted earnings per share comprises the Adjusted profit after tax divided by the non-diluted
weighted average number of shares as reported. The Adjusted profit after tax comprises the Adjusted
profit before tax, less the Taxation expense as reported in the Consolidated statement of comprehensive
income, adjusted for the tax impact of the adjusting items in arriving at Adjusted profit before tax.
The Adjusted cash conversion rate is the Adjusted free cash flow as a percentage of the Adjusted profit
before tax.
Adjusted free cash flow is a measure of cash flow adjusting for capital expenditure that is supporting
growth in future periods (as measured by capital expenditure in excess of maintenance capital
expenditure).

3

CEO Statement
Performance
The Group delivered resilient performance in 2023, with revenues growing 13% to €780m, despite a 4% headwind
from foreign exchange, further extending our market leadership position.
Reported organic revenue growth of 6% included a 3% combined impact from the US entertainment strikes on our
media and entertainment businesses, and foreign exchange movements. Excluding these factors, organic growthwould have been around 9%, slightly behind our medium-term guidance, reflecting the current market and macro
dynamics, which have led to pressures on certain parts of the business.
Operating margins were ahead of expectations at 15.6%, due to good cost control, which delivered adjusted
operating profit of €122m (reported operating profit was €47m). This was 6% higher than 2022, despite the higher
margin experienced in the comparative period.
The performance of each of the Group’s three Divisions reflected the varied conditions in the market. We
continued to see strong demand in Create, which now accounts for over 50% of Group profitability, offset by atemporary moderation of demand in our Globalize and, to a lesser extent, Engage Divisions, due to the current
market conditions.
Cash generation remained strong, and as normal, was H2 weighted, primarily due to the timing of working capital,
and we delivered adjusted free cash flow of €94m, giving an adjusted cash conversion rate of 82%.
We had another successful year of M&A, supported by our strong balance sheet, cash generation and expanded
revolving credit facility, adding three high-quality game development studios to Create, and broadening Engage’s
digital and PR offerings, with two new US studios. As a result of this activity, we moved from a net cash position of€82m at December 2022 to a year-end net debt position of €68m, with significant headroom remaining in ourfacilities for further selective acquisitions.
Market opportunity
After a number of extremely strong years of growth, in 2023, the video gaming industry saw a mixed performance.
Major titles that had been in production for a number of years were released to commercial success, such as
Hogwarts Legacy, Starfield, Diablo IV and Baldur’s Gate 3, but the broader industry saw publishers focus more on
profitability than on taking risks around new content. This meant that we saw a focus on core IPs and smaller
scopes for the launch of some titles, with an increase in the number of games being delayed or cancelled.
As we move into 2024, we expect a gradual improvement to market conditions and we remain confident in themedium-term market backdrop. Player numbers continue to rise, with another record year of average in-gameplayers on Steam, and games such as Fortnite have attracted their highest ever monthly average users during Q4,
demonstrating the popularity and longevity of high-quality games. The mobile market, which has been through adifficult period, also appears to be returning to growth after six consecutive quarters of declines. Hardware
challenges have eased, with the PS5 now readily available and there is a market expectation that when Nintendo
launches new hardware this will also drive further growth in content.
Industry forecasts point to continuing long term growth in the vast video-gaming market, with growth in thecontent creation segment expected to be above the overall market, with a five-year CAGR of 8%. External service
provision is still expected to be the fastest growing segment, with a five-year CAGR of over 9% (Source: IDG) andthis underpins our medium-term organic growth expectations.
Delivering against strategy
As the key player in this market, at more than 3x the size of the next largest competitor, yet with market share of
6%, we believe we remain incredibly well placed to grow our market share in a highly fragmented market. To do so,
we are making good progress against the five pillars of our strategy, including utilising the power of our platform todrive strategic partnerships with the key market players, and investing in leading technology solutions to better
serve our clients and enhance our economic and technology moat against competitors.
We have continued to work more closely with our largest clients as we seek to evolve our relationships to morestrategic partnerships. This has seen increased access to CXO suites, more in-depth strategic partner reviews, andsessions with key partners on developments around AI, strengthening our position as thought-leaders in this field.
These enhanced relationships are giving us the opportunity to partner with our clients on more projects, as well as
taking on larger, longer-term projects. During the year, we were pleased to see revenues from our Top 25 clients4grow meaningfully faster than the Group, demonstrating the power of the relationships and helping us tooutperform the market.
Technology, the second major pillar of our strategy, goes hand-in-hand with our strategic partnership initiatives, as
an important differentiator in the market, providing real benefits to clients, whether large or small. Our 4,500
dedicated engineers and technical experts in Create have a long track record of unlocking the benefits of multiple
generations of new technologies to support the industry’s “race to the top” to create the most immersive
experience for players and we continue to build on our focus on responsibly harnessing AI and other technologies
in recent years.
Through a combination of M&A and internal development, the business has also been building a post-production
platform of AI-enabled products to meet client needs, supported by over 250 product engineers, enhancing ourexisting Globalize and Engage services, and enabling us to do more, faster, and more efficiently whilst enhancing
quality for clients.
We saw good traction with Mighty Games’ innovative AI-based testing solution, Mighty Build & Test, who havescaled their footprint and product offering, so that they are now able to test on any game engine. Mighty is
increasingly becoming our internal testing solution, increasing automation across our game development studios
globally and has an exciting client pipeline and product development roadmap ahead.
Helpshift, our digital first customer support solution saw good growth, powered by its ability to swiftly scale
support for certain high performing mobile games in H2. The business has continued to broaden its offering whilstdelivering an average of over 60% AI automation to clients. It is integrating Gen AI to aid the customer support
journey, providing enhanced first contact resolution, delivering insights and providing sentiment analysis forclients. We were also excited to launch LanguageAI during the year, which is powered by KantanAI’s machinetranslation technology to enable more languages to be supported within the Helpshift solution, and in early 2024, a
VIP Services offering, utilising Helpshift’s data insights to better support high-spending players.
KantanAI has continued to grow its partnership with Microsoft, and due to the benefits of its unique AI-assisted
workflow with improved turn-around times and quality of service, has become increasingly embedded in service
delivery for other clients. We have also broadened the Kantan suite of products, with Kantan Audiomate, which
manages and stores audio digital assets, whilst automating and enhancing audio workflows, now in production withclients.
During the year, we recruited the former Head of Gaming AI from AWS Games to spearhead our AI Centre of
Excellence (“CoE”), as part of our Innovation at Keywords team, led by Jamie Campbell. The CoE is continually
mapping the landscape for AI tools that can be deployed in the game development cycle, knowledge sharing andcoordinating the many initiatives across our studios and building partnerships, so that we can help clients navigate
the fast-moving landscape and shape their AI strategies.
An example R&D initiative, sponsored by the Innovation team was Project Ava, where a team, initially from Electric
Square Malta, attempted to create a 2D game solely using Gen AI. Over the six-month process, the team shared
their findings across the Group, highlighting where Gen AI has the potential to augment the game development
process, and where it lags behind. Whilst the project team started small, it identified over 400 tools, evaluating andutilising those with the best potential. Despite this, we ultimately utilised bench resource from seven different gamedevelopment studios as part of the project, as the tooling was unable to replace talent.
One of the key learnings was that whilst Gen AI may simplify or accelerate certain processes, the best results andquality needed can only be achieved by experts in their field utilising Gen AI as a new, powerful tool in their creative
process. As a research project, the game will not be released to the public, but has been an excellent initiative torapidly spread tangible learnings across the Group, provide insights to clients and it demonstrates the power andlevel of cross-studio collaboration that currently exists. Alongside Project Ava, the team is undertaking a range of
Gen AI R&D projects, including around 3D assets, to ensure that we are able to provide current insights in an everevolving part of the market.
An important element of our technology journey has been to ensure we have a strong technology spine within theGroup. During the year, we have reshaped our internal teams to ensure we can support the different needs of each
Division better and have made targeted investments to consolidate systems and begin to create a global platformthat will, over time, enable enhanced customer experiences, data insights and increasingly frictionless customer
collaboration.
5

Whilst the initiatives I have picked out are not exhaustive, this gives a good flavour of the success of the One
Keywords pillar in driving collaboration and advantage across the Group. The consolidation of our service lines into
Divisions has been a foundational step, for example in the Create Division alone, over 30% of projects had multiple
studios working on them. With the support of operational excellence initiatives such as HR and IT business
partnering and cross-studio initiatives like Project Ava, increased collaboration across our global platform is set tocontinue and with it the unique advantages it brings. We have also continued to embed our new Leadership
Principles across the organisation, with a broad-ranging communications programme, and were very pleased withthe seamless transition of Sperasoft into four new operating hubs in Eastern Europe, with production in
Russia ceasing.
Even in a year of wide-spread job losses, it remains difficult to find high quality engineering talent and capabilities
across the industry. Despite this, Keywords continued to grow, with our talent acquisition programmes, supporting
good growth in this part of our business, with targeted efforts to identify and attract talent on a global basis. The
recruitment of Rob Kingston as CFO in July meant that Jon Hauck was able to move across to the COO role tosupport the long-term growth of the business and complete the evolution of the leadership team. I believe we arebuilding a leadership team and structure, with good strength in depth, to drive the future success of the business.
Our progress in adjacent markets has also been very encouraging with Lively, our dedicated LiveOps studio,
experiencing strong growth and demand from a wide variety of clients. We also believe there is a significant
opportunity within virtual production, both for turn-key services, and as a virtual art department within the broader
production process and have launched services to address this opportunity. Towards the end of the year, we won
virtual production and animation client mandates through both our Engage and Create Divisions.
We extended our media and entertainment offering in the US, through the acquisition of Digital MediaManagement, which works with some of the world’s biggest franchises, including the recent Barbie movie, toenhance their reach online and in social media. With the convergence of gaming and film and television, as
underscored by Disney’s recent $1.5bn investment in Epic Games, we see meaningful opportunities ahead for us
here.
M&A
A key and long-standing element of our strategy is to add significant value by reinvesting our free cash flow into
consolidating a fragmented market in four M&A focus areas: game development, marketing, technology andadjacent markets. We were pleased to deliver a record year of M&A, acquiring five studios for total maximum
consideration, including performance related contingent deferred consideration, of €225m. In 2023, the cash
component of both the current and previous years’ transactions amounted to €195m.
In line with our focus areas, three of the acquisitions broadened our game development capabilities, with The
Multiplayer Group bringing extensive multiplayer game expertise, Hardsuit Labs bringing a deep understanding of
Unreal Engine and Playboss Interactive providing one of our leading UK studios, Climax, a second location to growfrom. We also broadened our Engage offering in the US, the largest global market for gaming, with the acquisitionsof 47 Communications and Digital Media Management (DMM), with both enhancing our media and entertainment
offering, and DMM bringing market-leading social media capabilities and an innovative Creator-focused technology
platform.
The five acquisitions delivered pro forma revenues of €90m in 2023 (including pre-acquisition revenues), at
margins above the current Group, and are expected to grow strongly in the coming years as we continue to evolve
the Group towards higher-value services. We have a strong balance sheet and an extensive pipeline ofopportunities that will lead to further attractive acquisitions during 2024. We expect to continue our long trackrecord of adding significant value to our business and our clients through our highly value accretive acquisition
strategy for many years.
Responsible businessOur responsible business agenda is centred around five key areas; our people, planet, community and our clients,
underpinned by our commitment to good governance and ethics. We have made solid progress against our mainpriorities across the year, with a range of initiatives designed to enhance culture, employee engagement anddiversity and inclusion. These included the expansion of our employee engagement initiatives, together with thecontinuing roll-out of our Leadership Principles across the Group. We continued to make progress with ourdiversity, equity, inclusion and belonging agenda, increasing the proportion of women in the Group once again,
supporting the growth of the Women in Games Ambassador programme to more than 1,700 people, and hosting avery successful Women’s Summit in Asia. We also began to increase efforts around broader diversity, especially6given the prevalence of neurodiversity within the video gaming sector, and undertook training, and launched athriving affinity group - Brain Space - which is providing the opportunity for connections and support.
In May, we celebrated 25 years of Keywords by planting 25,000 trees across the world and have continued to win arange of Best Company to Work For awards in a number of locations. We have continued our climate journey,
expanding our emissions reporting, and enhancing our climate-related risk reporting, within our annual report. Our
progress against our priorities has been increasingly recognised by third party ESG rating agencies, with MSCI now
rating the business AA, the joint highest rating in our category.
US entertainment strikes
Whilst Keywords’ primary market is video gaming, it has an increasing exposure to the broader media andentertainment industry, with the crossover between the two industries growing. Both our Globalize and Engage
Divisions generate revenues from the media and entertainment industry, with a large proportion of this in postproduction audio services and marketing in the US. In May, the Writers Guild of America (WGA) union commenced
strike action following the failure of union negotiations around working conditions, residuals and AI usage. The
WGA was followed on strike by the SAG-AFTRA union in mid-July, which meant a near complete stoppage ofcontent generation in Hollywood.
These strikes continued for a number of months, with the WGA returning to work in September and SAG-AFTRA in
November. As a result, our US businesses saw substantially reduced work volume, leading to around €20 million inlost second-half 2023 revenue. Whilst the strikes are now over, there remains considerable uncertainty around thepace of ramp-up in 2024, as the industry returns to normal, given the logistics involved in each project. However,the Group believes it is very well placed to benefit from the surge in demand, as the industry looks to increase its
content output to meet viewer needs.
Driving efficiencies
2023 was a difficult year for our Globalize Division, and specifically for our Localization and Localization Testing
businesses, as clients were particularly cost conscious, and looked to manage budgets carefully by focusing solely
on those languages with the highest return on investment. During 2023, we carefully managed our cost base, moredeeply integrating technology and enhancing collaboration across our locations. This process is continuing in 2024
and regrettably, we have rightsized headcount in Globalize by around 5% as we look to balance our costs andlocations with meeting client requirements. It is expected that this programme, together with other changes, willlead to a one-time exceptional charge of €5m during 2024. Against this backdrop, and changes in post-Covid
working patterns, we have also taken a non-cash impairment charge of €10m relating to onerous right-of-use
leases, associated office improvements and historic IT investments. We have also launched a multi-year efficiency
programme to enhance our operating model as we continue to look to provide best-in-class delivery for our clientsand expect these actions to deliver meaningful annual savings, with the majority of the benefits being reinvested
into growth.
OutlookIn a challenging year for the industry, we delivered resilient performance in 2023, continuing to grow ourleadership position, reflecting our role as a diversified enabler of the industry. Whilst the industry back-drop
remains tough in the near term, our leading technology-enabled global platform and strong client relationshipsmeans that we are incredibly well-positioned to continue to grow our market share as we support clients in thecreation of ever more exciting and immersive experiences.
We had a record year of M&A in 2023, which has brought greater exposure to higher value Create services, andhave an extensive pipeline of acquisitions for 2024, with our expanded RCF providing enhanced flexibility to invest.
Having made significant strategic progress, we are better positioned than ever to benefit as content production in
the video games and entertainment industries re-accelerates. We remain confident in our medium-term targets,
expect to deliver strong revenue and profit growth in 2024 and are firmly on track to become a +€1bn revenue
business.
I am, therefore, convinced that our unique position at the heart of the largest entertainment industries in theworld, combined with our ongoing investments to augment our human creativity with leading technology, will
create significant value for clients and shareholders.
Bertrand Bodson
Chief Executive Officer
7

Divisional Review
CreateCreate combines Game Development and Art Services to deliver a range of content production services to clients andpartners globally. It represents around 4,500 people across 4 continents.

2023

2022

ChangeRevenue €m

3 3 6 .1

275.5

22.0%

Organic Revenue growth %17.3 %

25.9%

Adjusted EBITDA €m

9 4 .1

69.7

35.0%

28 .0 %

25.3%

2.7%

Adjusted EBITDA margin %2023 Performance
Create performed strongly during the year, with total revenues up by 22% to €336m (2022: €276m) and Organic
Revenue, which excludes the impact of acquisitions, growing by 17%, as we continued to see strong demand forour high-end services. H1 performance was exceptionally strong, with H2 normalising, as expected, given current
industry dynamics.
This growth was primarily driven by our Australian and UK game development hubs, as we continued to expand ourfootprint in each region through a combination of new satellite studios and headcount additions.
We also won a number of larger engagements with key clients, both single studio and wider collaborative efforts,
as we continue to demonstrate the benefits of working with a multi-studio or geographic set up to clients. Our art
studios also performed strongly across the period, with enhanced collaboration between our game development
and art studios supported our overall growth.
Aside from good execution at the studio level, which contributed to this success, we increased collaborations
within the Division as we reacted to the changes in the market dynamics, keeping our utilisation high by using
bench resources and managing recruitment cadence.
During the first half, Sperasoft completed its transition out of Russia into four new operating hubs in Eastern
Europe. This was a major undertaking, and we are delighted that we were able to complete this with limited
disruption to existing projects for our clients. Once the transition was complete, we were able to take on new work
and were pleased with the growth during the second half of the year as the team won a number of new projects.
Adjusted EBITDA in Create grew 35% to €94m in 2023 (2022: €70m), with the Adjusted EBITDA margin of 28.0% in
2023 higher than the previous period (2022: 25.3%). This was primarily due to the increased weighting of gamedevelopment in the Division, good central cost control and strong revenue growth.
We welcomed three new game development studios this year, The Multiplayer Group (“MPG”) in Nottingham,
Hardsuit Labs in Seattle, and Playboss Interactive in Liverpool. Together, these acquisitions broadened our service
offering, footprint and added nearly 450 high-quality game engineers and artists to the Division. MPG is a market
leader in providing multiplayer services, Hardsuit has deep expertise in Unreal Engine, and Playboss provides
Climax, one of our largest UK studios, with a second location from which to continue its growth trajectory.
Outlook
Our expanded Create Division remains well positioned to capitalise on the continuing demand for its high-end
services. We have good pipeline visibility into 2024 across both game development and art, with growth weighted
towards the second half of the year. The increasing scale and depth of our expertise in Create means we believe
we are uniquely placed to harness the benefits of Generative AI as a tool to support our clients if they wish to utilise
it. We are seeing limited utilisation to date, with copyright and quality concerns currently a barrier to adoption for
AAA publishers. Over time, we believe these technology advancements will be able to augment the creativity of ourclients and teams and enable the delivery of ever more content for our clients.
8

Globalize
Globalize brings together our Audio, Testing and Localization businesses to create a global provider, with around
5,000 people across 5 continents.

2023

2022

ChangeRevenue €m

279 .5300.9(7.1)%

Organic Revenue growth %(4 .3 )%

23.4%

Adjusted EBITDA €m

4 8 .5

61.6(21.3%)

Adjusted EBITDA margin %17.4 %

20.5%(3.1%)

2023 Performance
Globalize experienced more difficult trading conditions in 2023 and was impacted by the US entertainment strikes
and foreign exchange movements, with total revenues falling by 7% to €280m (2022: €301m). Organic Revenue
declined by 4% and excluding the impact of the strikes, organic growth would have declined slightly, significantly
outperforming the core gaming post-production market, which was estimated to have declined by 5% in 2023
(Source: IDG).
Whilst performance was below expectations at the start of the year, it was a resilient result given market
conditions, as there has been an elevated level of project cancellations, delays and reduced scopes which has
impacted the Division given its broad reach across the industry. In addition to this, the US entertainment strikes,
had a significant impact on our audio businesses during the second half of the year.
We were, however, pleased that Functional testing continued to deliver robust results, with the addition of somelarger scale contracts in lower cost locations such as Poland and with our operations in Mexico beginning to scale
up. This was offset by our embedded services testing business and our localization businesses which experienced atougher period. Localization clients were particularly cost conscious and looked to manage their budgets carefully,
by only focusing on key languages where the best returns could be generated. Audio faced tough comparators in
H1 and then was heavily impacted by the US entertainment strikes, which are now resolved.
We have continued to make good progress in developing and integrating our post-production technology
platform. As part of this we developed our Mighty Build and Test solution and significantly scaled the team and the
product offering during 2023. Mighty is now able to operate on Unreal, Unity and custom/proprietary gameengines and has expanded its external client base as well as operating as the QA tool at a number of our large
internal studios. We have an exciting pipeline of client opportunities as we move into 2024 and are continuing todeliver against our product development roadmap to broaden its functionality.
Adjusted EBITDA of €49m was 21% lower than 2022 (€62m), with Adjusted EBITDA margins of 17.4% moderately
lower than 2022 (20.5%). Margins were expected to normalise following exceptional demand in 2022 and were
impacted by the lower utilisation of resources compared to the 2022, with pricing more of a focus for clients.
During 2023, we carefully managed our cost base, whilst integrating technology more deeply and enhancing
collaboration across studios. This process is continuing in 2024, and, regrettably, we have rightsized the headcountin Globalize by around 5% as we look to balance our costs and locations with client demands. We continuously lookto enhance our operating model to generate efficiencies and provide best-in-class delivery for our clients,
reinvesting savings into growth.
OutlookGlobalize has a leading position with major publishers within the industry and is well placed to benefit when thecontent cycle turns and as Hollywood rebounds to previous output levels through the year. We also believe that
there is a significant opportunity over time to support clients moving from fixed to variable costs as they look to
manage their budgets and cost base. We will continue to carefully manage our cost base, enhancing our delivery
model and efficiencies across our global footprint, and will further integrate technology into our workflows todifferentiate our offering in the market.
9EngageOur Engage Division brings together our Marketing Services and Player Engagement businesses to create a holisticoffering focused on attracting, retaining, and supporting fans across the video games and entertainment
industries, encompassing around 2,500 people across 3 continents.

2023

2022

ChangeRevenue €m

16 4 .8

114.3

44.2%

Organic Revenue growth %

2.3 %

9.7%

Adjusted EBITDA €m

15 .7

15.6

Adjusted EBITDA margin %9 .5 %

13.6%

0.6%

2023 Performance
Engage saw a resilient performance during the year, with the higher revenue growth of 44% to €165m (2022: €114m)
driven by a number of acquisitions as we built out the capabilities of the Division. Organic Revenue, which excludes
the impact of acquisitions, grew by 2% despite the backdrop and the significant impact from the US entertainment
strike. Excluding the impact of the strikes, organic growth would have been around 9%.
Marketing delivered a robust performance, despite the macroeconomic environment leading to publishers reducing
their marketing activity, with lower budgets and delays to projects. The US entertainment strikes had a major impact
on organic revenue growth in H2, and despite the continued subdued level of activity, we still delivered strong
underlying organic growth, with large projects being delivered for clients during the period.
We continue to enhance collaboration across our studios, both in the UK and in the US, in order to provide a more
solution-based model for our clients' needs and enhance the cross-selling of multiple services. We were delighted tobring two high quality US studios into the service line during the period, with Digital Media Management (DMM) and 47
Communications greatly enhancing our social media, influencer and PR offerings respectively. We believe that DMM
in particular is exceptionally well placed to benefit from the increasing share of social media in overall marketingbudgets.
Player Engagement is primarily focused on the mobile market and was impacted by reduced player numbers andspend across the broader mobile market, although this stabilised during the second half. This meant that certain
clients reduced the scale of the teams working on their games to reflect the reduced activity, although new businesswins mitigated the reduced demand. We saw very good traction, despite the market, for our Helpshift AI solution,
which we acquired in late 2022, and fully integrated into our existing offering to create a unique end-to-end
technology enabled solution for clients. During the year we launched Language AI, to enhance our multi-lingual
support offering, made good progress with our trust and safety offering in tandem with a number of technology
partners and launched our VIP concierge service.
Adjusted EBITDA of €16m was slightly higher than 2022 (€16m), with the Adjusted EBITDA margin of 9.5% behind theprior year period (2022: 13.6%). Margins were impacted as the business has relatively fixed costs and was scaled for
growth, but experienced lower utilisation rates as projects were delayed and lower revenues due to the US strikes.
We have implemented cost control measures in certain studios and have reduced marketing headcount byapproximately 8%, whilst retaining our capacity to support growth in future periods, as well as rationalising ourfootprint into larger hubs in London and Los Angeles.
Outlook
We continue to scale the Engage Division, by building out the full-service capabilities of our marketing offering and bycreating a holistic technology-enabled player engagement offering through the addition of Helpshift’s automatedsolutions. Whilst the current market backdrop remains tougher, and it will take time for Hollywood to return to normal
output, our Marketing studios are increasingly well placed with clients, our collaborative solutions are gaining traction,
and we are exploring the use of AI and technology to support our client offerings. The technology first approach toPlayer Engagement, powered by Helpshift and a range of partnerships supporting offerings such as Trust & Safety
and VIP services, is expected to enable continuing growth.
10

Financial and operating overview
Revenue
Revenue for 2023 increased by 13% to €780m (2022: €691m). This performance included the impact of acquisitionsin 2022 and 2023 and a ~4% headwind from the impact of currency movements, when translating studio results fromlocal currency into the euro reporting currency.
Reported Organic Revenue growth (which adjusts for the impact of acquisitions) was 6%. However, adjusting for thesignificant impact from the US entertainment strikes and from foreign exchange movements, organic revenue
growth would have been 9%. Continuing strong performance in Create, was offset by more muted performance inEngage and difficult trading conditions in Globalize. Further details of the trading performances of each of theDivisions are provided in the Divisional Review.
Gross profit and margin
Gross profit in 2023 was €299m (2022: €267m), representing an increase of 12%. The gross margin of 38.3% was
broadly in line with 2022 (38.7%) as the increased weighting of the higher margin Create Division largely offset lower
margins in Globalize and Engage.
Operating costs
Adjusted operating costs increased by 17% to €141m (2022: €120m), reflecting the larger Group, but at 18.0% ofrevenue were slightly higher than 2022 (17.4%). This was due to continuing investment in the business, the larger
office footprint, and the post-Covid return to normal of travel and business development costs.
EBITDAEBITDA of €109m was 10% behind 2022 (€121m). Adjusted EBITDA increased 8% to €158m compared with €147m in
2022. The Adjusted EBITDA margin in 2023 of 20.3% was slightly lower than 2022 (21.3%), as expected, reflecting thelower gross margin and higher operating costs.
Net finance costs
Net finance costs of €12m compared to €4m in 2022. The €8m increase was primarily driven by interest costs due tothe drawdown on the RCF to fund acquisitions, together with a €3m negative year-on-year foreign exchange impact.
Alternative performance measures (APMs)
The Group reports a number of APMs to present the financial performance of the business which are not GAAP
measures as defined by IFRS. The Directors believe these measures provide valuable additional information for theusers of the financial information to understand the underlying trading performance of the business. In particular,
adjusted profit measures are used to provide the users of the financial statements a clear understanding of theunderlying profitability of the business over time. A breakdown of the adjusting factors is provided in the table below:

2023
€m

2022
€m

Share-based payments expense

22.0

18.7

Costs of acquisition and integration

27.1

8.4

Amortisation of intangible assets

26.1

16.8

Foreign exchange and other items

4.5

0.1

Total

79.7

44.0

A total of 1.37m options were granted under incentive plans in 2023. This, together with grants from previous years,
has resulted in a non-cash share-based payments expense of €22m in 2023 (2022: €19m).
Costs associated with the acquisition and integration of businesses amounted to €27m (2022: €8m). Of this, €10m
was related to Globalize restructuring costs associated with onerous leases, office improvements and historic IT
spend. The balance was primarily due to the accounting treatment of deferred consideration related to continuing
employment, which has led to a charge of €9m, and the costs associated with the exit from Russia of €4m.
11

Amortisation of intangible assets increased by €9m to €26m (2022: €17m) due to the increased acquisition activity inrecent years.
Foreign exchange and other items amounted to a net loss of €5m (2022: flat). This includes €3m for the unwinding of
discounted liabilities on deferred consideration (2022: €3m) and a net foreign exchange loss of €1m (2022: gain of€2m). Keywords does not hedge foreign currency exposures in relation to net current assets. Whilst more material
movements in foreign exchange can be impactful on revenues and expenses, the net impact on the Group's results ofmovements in exchange rates and the foreign exchange gains and losses incurred during the year mainly relate to
the effect of translating net current assets held in foreign currencies.
A more detailed explanation of the measures used together with a reconciliation to the corresponding GAAP
measures is provided in the APMs section at the end of the report.
Operating Profit
Reported Operating profit of €47m in 2023 was 35% lower than 2022 (€72m). Adjusted operating profit, which
adjusts for the items described in the APMs section above increased to €122m, 6% ahead of 2022 (€115m). Adjusted
operating profit margin of 15.6% was ahead of guidance, albeit slightly behind 2022 (16.6%) due to continuing
investment in the business, the larger office footprint, and the post-Covid return to normal of travel and businessdevelopment costs.
Profit before taxation
Reported Profit before tax of €35m in 2023 was 49% lower than 2022 (€68m). Adjusted profit before tax, which
adjusts for the items described in the APMs section above increased to €115m, 2% ahead of 2022 (€112m). This
reflects lower Adjusted operating profit margins and increased interest payments linked to acquisition activity.
Taxation
The tax charge reduced to €15m from €21m in 2022, largely reflecting the reduction in the Profit before tax of thebusiness. After adjusting for the items noted in the APMs section above and the tax impact arising on these items, theAdjusted effective tax rate for 2023 was 22.3%, in line with 2022 (22.0%).
Earnings per share
Basic earnings per share of 25 cents was lower than 2022 (62 cents), primarily reflecting the reduction in the statutory
Profit after tax. Adjusted earnings per share, which adjusts for the items noted in the APMs section above and the tax
impact arising on these items, was 113 cents (2022: 114c), broadly flat year-on-year, with both Adjusted profit before
tax and the basic weighted average number of shares increasing in similar proportions.

12Cash flow and net debt

2023
€m

2022
€m

Change€m

Adjusted EBITDA

158.3

146.9

11.4

MMTC, VGTR and similar incentives(11.3)

(3.6)

(7.7)

Working capital and other items

(4.3)

0.6

(4.9)

Capex - property, plant and equipment (PPE)(30.7)(27.0)(3.7)

Capex - intangible assets

(3.1)

(0.5)

(2.6)

Payments of principal on lease liabilities(15.0)(11.4)(3.6)

Operating cash flows

93.9

105.0

(11.1)

Interest paid net of received

(7.1)

(1.5)

(5.6)

Free cash flow before tax

86.8

103.5

(16.7)

Taxation paid

(20.9)(17.5)(3.4)

Free cash flow

65.9

86.0

(20.1)(194.7)(113.3)(81.4)

M&A - cost of acquisition and integration cash outlay

(7.8)

(3.1)

(4.7)

Cash proceeds arising from share-based payments

2.6

7.3

(4.7)

-

1.1

(1.1)

Company funded acquisition of shares by EBT(14.8)-(14.8)

Dividends paid

(2.2)

(2.0)

(0.2)

(151.0)(24.0)(127.0)

1.6

0.2

1.4

(149.4)(23.8)(125.6)

Opening net cash / (debt)

81.8

105.6

Closing net cash / (debt)(67.6)

81.8

M&A - acquisition spend

Other income

Underlying increase / (decrease) in net cash / (debt)
FX and other items
Increase in net cash / (debt)

The Group generated Adjusted EBITDA of €158m in 2023, an increase of €11m from €147m in 2022. There was an€8m increase in respect of the amounts due for Multi-Media Tax Credits (MMTCs) and Video Game Tax Credits(VGTRs), higher than 2022 (€4m), primarily due to timing of receipts under new incentive regimes in Australia andSerbia. Other working capital increased by €5m as we saw an outflow of €4m, compared to a small inflow in 2022,
mainly due to an increase in accrued income from work in progress.
Investment in property, plant and equipment increased by €4m to €31m (2022: €27m) as we continued to invest in
the footprint of the business, the new sites required to exit Russia, and took advantage of favourable pricing topurchase longer-term software licences. In addition, we incurred €3m of capitalised research and development costs13

as we developed our technology platform. Property lease payments of principal of €15m were €4m higher than theprior period (2022: €11m) mainly related to acquisitions in the period.
Operating cash flows of €94m were behind 2022 (€105m), primarily due to the change in working capital and theincreased capex during the period.
There was a €3m increase in cash tax paid to €21m (2022: €18m) as payment schedules return to a more normal
pattern. Net interest payments, which largely relate to interest from drawdowns on the RCF, and arrangement costs
for the facility, were €7m compared to €2m in 2022.
This resulted in Free cash flow of €66m, €20m behind 2022 (€86m). Adjusted free cash flow, which adjusts forcapital expenditure that is supporting growth in future periods, was €94m in 2023, behind 2022 (€112m), which
resulted in an Adjusted cash conversion rate of 82%, in line with guidance.
Cash spent on acquisitions totalled €203m, of which €34m was in respect of the cash component of prior year
acquisitions and €8m was in relation to acquisition and integration costs. This was €86m higher than the spend in
2022 due to the increased size and scale of acquisitions. The Group also spent €15m purchasing shares of behalf ofthe Employee Benefit Trust, to manage dilution at current share prices from long term incentive plans.
This resulted in an increase in net debt of €149m in 2023, leading to closing net debt of €68m (2022: net cash €82m).
Balance sheet and liquidity
The Group funds itself primarily through cash generation and a syndicated multi-currency Revolving Credit Facility. In
July 2023, the Group entered a new RCF of $400m that matures in July 2027, replacing the previous €150m facility.
The new RCF includes an accordion option to increase the facility up to $500m and an option to extend the expiry
date by a further one-year period (both subject to lender consent). The majority of Group borrowings are subject totwo financial covenants, minimum interest cover of 4x and maximum net leverage of 3x, that are calculated inaccordance with the facility agreement. The Group retained considerable headroom against both of these covenants
at year-end.
The Group entered the year with a strong balance sheet and deployed €195m of cash in the period to support its
value accretive M&A programme and made €15m of share purchases on behalf of the Employee Benefit Trust. At theend of 2023, Keywords had net debt (excluding IFRS 16 leases) of €68m (31 December 2022: net cash of €82m) andundrawn committed facilities of $260m. The undrawn facilities, together with strong cash generation, leaves us wellplaced to continue to execute on our M&A programme.
Capital allocation
The Group continues be disciplined as it allocates capital to drive shareholder value creation. Its key priorities are toinvest in driving organic growth, delivering value accretive M&A, whilst maintaining a strong balance sheet anddelivering shareholder cash returns.
The Board is pleased to recommend a final dividend of 1.76p per share (2022: 1.60p) representing an increase of 10%
on the 2022 final dividend. Together with the interim dividend of 0.85p this will bring the total dividend to 2.61p (2022:
2.37p). This is in line with the Board's progressive dividend policy which seeks to reflect the Group's continued growthin earnings and strong cash generation, balanced with the need to retain the resources to fund growth opportunities,
particularly M&A, in line with our strategy.
Payments will be made on 28 June 2024 to shareholders on the register on 24 May 2024 and the shares will go exdividend on 23 May 2024. The final dividend payment will represent a total cost of approximately €1.6m of cash
resources. Link Market Services Trustees Limited (Link) operates a Dividend Reinvestment Plan (DRIP) for the Group’s
shareholders and instructions for shareholders on how to apply for the DRIP will be included in communications
regarding the dividend, and any queries regarding the DRIP should be directed to Link.
Following the €15m of purchases for the Employee Benefit Trust in 2023, the Group intends to use its Employee
Benefit Trust to undertake further market purchases of Company shares in H1 2024, amounting to an aggregate of
up to €5m, in order to satisfy future exercises of LTIPs or stock options pursuant to relevant share plans, and may
look to increase this amount during the year.

14

Guidance for 2024
We continue to trade robustly across the Group in continuing tough markets and expect to deliver strong revenue
and profit growth in 2024, driven by improving organic growth, recent M&A, and the maintenance of adjusted
operating profit margins above 15% as we continue to manage our cost base and drive efficiencies across the Group.
Our organic growth expectations are unchanged, progressively improving from H2 23 levels as we move throughthe year and as the industry’s appetite for new content returns, as well as allowing time for the output from
Hollywood to increase post the 2023 strikes.
The adjusted Effective Tax rate for the full year is expected to be in line with 2023 at around 22%. We continue toanticipate capex to be between 4.5-5% of annual revenues, as we continue to invest in the business, but we still
expect a full year Adjusted Cash Conversion rate of around 80%. Net finance charges will fluctuate, depending on
scale and timing of acquisition activity, but based on the current debt profile, we would expect the charge to beapproximately €10m for the year.

Rob Kingston
Chief Financial Officer

15

Consolidated statement of comprehensive income

Revenue from contracts with customers
Cost of sales
Gross profit
Other income
Share-based payments expense
Costs of acquisition and integration
Amortisation of intangible assets
Total of items excluded from adjusted profit measures
Other administration expenses
Administrative expenses
Operating profit
Financing income
Financing cost
Profit before taxation
Taxation
Profit after taxation

Note
4
5
5
23
5
11

6
6
7

Years ended 31 December
2023
2022
€'000
€'000
780,445
690,718(481,340)(423,452)
299,105
267,266
1,098(21,964)(18,678)(27,140)(8,413)(26,060)(16,810)(75,164)(43,901)(177,111)(152,653)(252,275)(196,554)
46,83071,810614(12,450)
34,994(15,042)
19,952

1,986(5,814)
67,982(20,612)47,37012286(8,317)(2,518)1,238
10,367(7,947)
6,144
162
46,015

19,952
19,95247,415(45)
47,37010,367
10,36746,01546,015€ cent25.28
24.94€ cent61.54
58.86

Other comprehensive income:Items that will not be reclassified subsequently to profit or loss
Actuarial gain / (loss) on defined benefit plans

Items that may be reclassified subsequently to profit or loss

Exchange gain / (loss) in net investment in foreign operations
Exchange gain / (loss) on translation of foreign operations
Non-controlling interest; recycled on disposal of subsidiaryTax related to items taken to other comprehensive income
Total comprehensive income / (expense)

7

Profit / (loss) for the period attributable to:
Owners of the parent
Non-controlling interest

Total comprehensive income / (expense) attributable to:
Owners of the parent

Earnings per share
Basic earnings per ordinary share
Diluted earnings per ordinary share88

The notes 1 to 29 form an integral part of these consolidated financial statements.
On behalf of the Board

Bertrand Bodson
Director
12 March 2024

Rob Kingston
Director

16

Consolidated statement of financial position

At 31 December
2023

Non-current assets
Intangible assets
Right of use assets
Property, plant and equipment
Deferred tax assets
Investments
Current assets
Cash and cash equivalents
Trade receivables
Other receivables
Corporation tax recoverable

Note

€'000

2022
Restated(note 21)
€'000

11
12
13
21
14

632,176
41,95050,23732,751
175
757,289

469,953
37,672
44,784
31,157
175
583,741

59,862
89,94083,993
5,991
239,786

81,886
81,563
61,415
6,503
231,367

14,294
155,970
27,081
13,865211,210
28,576

15,878139,35545
22,02812,414
189,720
41,647

15
16

Current liabilities
Trade payables
Other payables
Loans and borrowings
Corporation tax liabilities
Lease liabilities

19

Net current assets / (liabilities)
Non-current liabilities
Other payables
Employee defined benefit plans
Loans and borrowings
Deferred tax liabilities
Lease liabilities

17
20
18
21
19

12,002
4,030
127,380
10,307
33,107
186,826
599,039

18,3082,861
617,01730,10568,297557,091

22
22
22
22

939
321
54,518306,837
183(6,774)80,416
162,599
599,039924
2,467
47,021
286,655
11,01865,379143,627
557,09117
18

Net assets
EquityShare capital
Share capital - to be issued
Share premium
Merger reserve
Foreign exchange reserve
Shares held in Employee Benefit Trust ("EBT")
Share-based payments reserve
Retained earnings
Total equity

22

The notes 1 to 29 form an integral part of these consolidated financial statements. The financial statements were approved and authorised for issue
by the Board on 12 March 2024.
On behalf of the Board

Bertrand Bodson
Director
12 March 2024

Rob Kingston
Director

17

Consolidated statement of changes in equity

Share
capitalSharecapital to beissuedMergerreserve

Foreignexchangereserve

Sharesheld in
EBT

Sharebased
payments
reserveSharepremium

€'000

€'000

€'000

€'000

€'000

€'000

904

2,185

38,549273,677

12,821

Profit / (loss) for the period

-

-

-

-

Recycled on disposal of subsidiary

-

-

-

Other comprehensive income

-

-

-

Total comprehensive income for the period
Contributions by and contributions to theowners:--At 01 January 2022

Share-based payments expense

Retainedearnings

Total
attributableto ownersof parent

Noncontrollinginterest

Total
equity

€'000

€'000

€'000

€'000

€'000

(1,997)48,19397,905472,237(117)

472,120---

47,41547,415(45)

47,370

-

-

-

-

-

-

162

162

-

(1,803)--286(1,517)-(1,517)--(1,803)--47,70145,898117

46,015

-

-

-

-

-

-

18,577-

18,577-

18,577

14

-

5,862

-

-

1,997

(1,492)

-

6,381

-

6,381

Employee Share Purchase Plan

-

-

909

-

-

-

101

-

1,010

-

1,010

Dividends

-

-

-

-

-

-

-

(1,979)(1,979)-(1,979)Acquisition-related issuance of shares
Contributions by and contributions to theowners

6

282

1,701

12,978----

14,967-

14,967

20

282

8,472

12,978-

1,997

17,186(1,979)38,956-

38,956

At 31 December 2022

924

2,467

47,021

286,655

11,018-65,379143,627

557,091-

557,091

Profit / (loss) for the period

-

-

-

-

-

-

-

19,952

19,952-

19,952Other comprehensive income

-

-

-

-

(10,835)

-

-

1,250

(9,585)-(9,585)

Total comprehensive income for the period
Contributions by and contributions to theowners:

-

-

-

-

(10,835)--

21,202

10,367-

10,367

Share-based payments expense
Cash proceeds arising from share-based
payments
Company funded acquisition of shares(note 22)

-

-

-

-

-

-

21,964-

21,964-

21,964

5

-

1,462

-

-

-

1,145

-

2,612

-

2,612

-

-

-

-

-

(6,774)(8,072)-(14,846)-(14,846)

Share options exercised

-

-

-

-

-

-

-

(2,230)(2,230)-(2,230)Acquisition-related issuance of shares
Contributions by and contributions to theowners10(2,146)

6,035

20,182----

24,081-

24,08115(2,146)

7,497

20,182-(6,774)15,037(2,230)31,581-

31,581

At 31 December 2023

939

321

54,518306,837

183(6,774)80,416

162,599

599,039-

599,039

Dividends

18

Consolidated statement of cash flows

Note
Cash flows from operating activities
Profit after taxation
Income and expenses not affecting operating cash flows
Depreciation and impairment - property, plant and equipment
Depreciation and impairment - right of use assets
Amortisation and impairment of intangible assets
Taxation
Share-based payments expense
Fair value movements in deferred and contingent consideration
Non-cash movements included in costs of acquisition and integration
Unwinding of discounted liabilities - deferred consideration
Unwinding of discounted liabilities - lease liabilities
Interest receivable
Fair value adjustments to employee defined benefit plans
Interest expense
Unrealised foreign exchange (gain) / loss

13
12
11
7
23
5
5
6
6
6
6

Changes in operating assets and liabilities
Decrease / (increase) in trade receivables
Decrease / (increase) in MMTC and VGTR receivable
Decrease / (increase) in other receivables(Decrease) / increase in accruals, trade and other payables
Taxation paid
Settlement of deferred and contingent consideration related to continuous employment
Net cash generated by / (used in) operating activities
Cash flows from investing activities
Current year acquisition of subsidiaries net of cash acquired
Settlement of deferred liabilities on acquisitions
Acquisition of property, plant and equipment
Investment in intangible assets
Interest received
Net cash generated by / (used in) investing activities
Cash flows from financing activities
Cash proceeds, where EBT shares were utilised for the exercise of share-based payments
Repayment of loans
Drawdown of loans
Payments of principal on lease liabilities
Interest paid on principal of lease liabilities
Dividends paidCompany funded acquisition of shares by EBT
Shares issued for cash
Interest paid
Net cash generated by / (used in) financing activities
Increase / (decrease) in cash and cash equivalents
Exchange gain / (loss) on cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period

17

27
17
13
11

18
18
19
19
9
22

Years ended 31 December
2023
2022
€’000
€’000
19,95247,37028,903
15,94826,06015,042
21,964
9,177
2,677
3,279
1,447
(614)
1,025
5,768
(4,559)126,117

18,365
14,585
16,81020,612
18,678
2,282
2,922
969
(309)
514
1,261
766
97,455(284)(11,260)(6,785)
7,470(10,859)(20,853)(3,900)110,457(11,771)(3,591)(6,457)
18,785(3,034)(17,505)
124,286(160,380)(30,428)(30,689)(3,052)614(223,935)(87,494)(25,800)(27,007)(501)
309(140,493)

1,145(97,379)
227,322(15,038)(1,447)(2,230)(14,846)1,467(6,282)
92,712(20,766)(1,258)81,88659,862505(79)(11,361)(969)(1,979)6,785(828)(7,926)(24,133)
309
105,71081,88619

Notes forming part of the consolidated financial statements

1

Basis of Preparation

Keywords Studios plc (the “Company”) is a company incorporated in the United Kingdom. The consolidated financial statements include thefinancial statements of the Company and its subsidiaries (the “Group”) made up to 31 December 2023.
The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards, and in conformity
with the requirements of the Companies Act 2006. Unless otherwise stated, the financial statements have been prepared in thousands (’000) andthe financial statements are presented in euro (€) which is the functional currency of the Company.
Going Concern Basis of Accounting
After making enquiries, the Directors consider it appropriate to continue to adopt the going concern basis in preparing the Consolidated andCompany financial statements. In doing so the Directors have considered the following:•
The cash position of the Group;•
The strong cash flow performance of the Group through the year;•
The continued demand for the Group’s services;•
The ability to operate most of its services in a work from home model where studios are temporarily closed;•
The historical resilience of the broader video games industry in times of economic downturn; and•The ability of the Group to flex its cost base in response to a reduction in trading activity.
The Directors have also considered the Group’s strong liquidity position with cash and cash equivalents of €60m as at 31 December 2023, andcommitted undrawn facilities of €237m under the Revolving Credit Facility (“RCF”).
The Directors have applied downside sensitivities to the Group’s cash flow projections to assess the Group’s resilience to adverse outcomes.
This assessment included a reasonable worst-case scenario in which the Group’s principal risks manifest to a severe but plausible level. Even
under the most severe case, the Group would have sufficient liquidity and remain within its banking covenants. The Directors have a reasonable
expectation that the Company and the Group have adequate resources to continue to operate and meet liabilities as they fall due for theforeseeable future, a period considered to be at least twelve months from the date of these financial statements and therefore the going
concern basis of preparation continues to be appropriate.
New Standards, Interpretations and Amendments effective 01 January 2023
The following amendments effective for the period beginning 01 January 2023 are expected to be impactful on the Group moving forward:•
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2): The Group has implemented amendments to
IAS 1 related to the application of materiality in relation to the disclosure of accounting policies, requiring companies to disclose theirmaterial accounting policies rather than their significant accounting policies, clarifying that accounting policies related to immaterialtransactions, other events or conditions are themselves immaterial and as such need not be disclosed; and clarifying that not all
accounting policies that relate to material transactions, other events or conditions are themselves material to a company’s financial
statements. Whereas all Significant Accounting Policies were disclosed in the past, the Group now discloses only material accounting
policies in note 2.
•
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12): Amendments effective 01
January 2023 narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal andoffsetting temporary differences e.g. Right of use assets and Lease liabilities. As a result in 2023, deferred tax assets and liabilities
associated with leases are now recognised gross from the beginning of the earliest comparative period presented, As outlined in note
21, the comparative periods presented have been re-stated to reflect the impact of adoption on the carrying value of Right of Use
Assets and Lease Liabilities, with any cumulative effect recognised as an adjustment to retained earnings or other components ofequity.
New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in futureaccounting periods that the Group has decided not to adopt early.
The following amendments effective for the period beginning 01 January 2024:•
Lease Liability in a Sale and Leaseback (Amendment to IFRS 16); and•IAS 1 Presentation of Financial Statements (Amendment – Classification of Liabilities as Current or Non-Current, with Covenants).
The Group does not expect these other amendments, or any other standards issued by the IASB but not yet effective, to have a material impact
on the Group.

20

2

Material Accounting Policies

Basis of Consolidation
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power toaffect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elementsof control.
De facto control exists in situations where the Company has the practical ability to direct the relevant activities of the investee without holding the
majority of the voting rights. In determining whether de facto control exists, the Company considers all relevant facts and circumstances, including:•
The size of the Company’s voting rights relative to both the size and dispersion of other parties who hold voting rights;•
Substantive potential voting rights held by the Company and by other parties;•
Other contractual arrangements; and•Historic patterns in voting attendance.
The consolidated financial statements present the results of the Company and its subsidiaries (“the Group”) as if they formed a single entity.
Intercompany transactions and balances between Group companies are eliminated in full.
Business Combinations
The consolidated financial statements incorporate the results of business combinations using the purchase method. The results of acquired
operations are included in the consolidated financial statements from the date on which control is obtained. They are consolidated until the date on
which control ceases. In the Consolidated statement of financial position, the acquired identifiable assets, liabilities and contingent liabilities are
initially recognised at their fair values at the acquisition date. If the initial accounting for a business combination is incomplete by the end of thereporting period in which the combination occurs, the Group reports provisional amounts for the items for which the valuation of the fair value of
assets and liabilities acquired is still in progress. Those provisional amounts are adjusted when additional information is obtained about facts andcircumstances which would have affected the amounts recognised as of that date, and any adjustments to the provisional values allocated to theconsideration, identifiable assets or liabilities (and contingent liabilities, if relevant) are made within the measurement period, a period of no morethan one year from the acquisition date.
Any contingent consideration payable is recognised at fair value at the acquisition date and is split between current liabilities and long-term liabilities
depending on when it is due. In general, in order for contingent consideration to become payable, pre-defined profit and / or revenue targets must
be exceeded. The fair value of contingent consideration at acquisition date is arrived at through discounting the expected payment (based on
scenario modelling) to present value. Where contingent consideration is dependent on the recipient remaining in employment, the payment isaccounted for as post-acquisition remuneration accrued over the retention period, as required under IFRS 3. At each balance sheet date, the fairvalue of the contingent consideration liabilities are revalued, with the expected pay-out determined separately in respect of each individualacquisition and any change recognised in the statement of comprehensive income. For deferred consideration which is to be provided for by theissue of a fixed number of shares at a future defined date, where there is no obligation on Keywords to offer a variable number of shares, thedeferred consideration is classified as an equity arrangement and the value of the shares is fixed at the date of the acquisition.
Acquisition-related costs are recognised immediately as an expense in the periods in which the costs are incurred and the services are received.
Intangible Assets
The Group’s Intangible Assets comprise Goodwill, Customer Relationships and Other Intangible Assets.
Goodwill
Goodwill represents the excess of the cost of a business combination over the total acquisition date fair value of the identifiable assets, liabilities
and contingent liabilities acquired. The cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus theamount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity
interest in the acquiree. Contingent consideration is included at fair value on the acquisition date and, in the case of contingent consideration
classified as a financial liability, re-measured subsequently through the profit and loss. Goodwill is capitalised as an intangible asset with any
impairment in carrying value being charged to the Consolidated statement of comprehensive income.
Customer Relationships
Intangible assets, separately identified from goodwill acquired as part of a business combination (mainly Customer Relationships), are initially stated atfair value. The fair value attributed is determined by discounting the expected future cash flows generated from the net margin of the business fromthe main customers taken on at acquisition. The assets are amortised on a straight-line basis (to administration expenses) over their useful economic
lives (typically five years is deemed appropriate, however, this is re-examined for each acquisition).
Other Intangible Assets
Other intangible assets include Intellectual Property and Music Licences, both acquired and internally developed. Other intangible assets arerecognised once they meet the criteria under IAS 38, and are amortised on a straight-line basis over the period of its expected benefit, startingfrom the date of full commercial use of the product. Residual amounts, useful lives and the amortisation methods are reviewed at the end of every
accounting period.
Following initial recognition of development expenditure as an intangible asset, the cost model is applied requiring the intangible asset to be
carried at cost, less any accumulated amortisation and accumulated impairment losses. During the period of development, the asset is tested
for impairment annually. If specific events indicate that impairment of an item of intangible asset may have taken place, the item’s recoverability
is assessed by comparing its carrying amount with its recoverable amount. The recoverable amount is the higher of the fair value net of disposal
costs and the value in use.
Impairment
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end.
Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may
not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs tosell), the asset is written down accordingly.
21

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets
to which it belongs for which there are separately identifiable cash flows; its cash generating units (“CGUs”). Goodwill is allocated on initialrecognition to each of the Group’s CGUs that are expected to benefit from a business combination that gives rise to the goodwill.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, deposits held on call with banks and other short-term highly liquid investments. Where cash is on
deposit with maturity dates greater than three months, it is disclosed as short-term investments.
Foreign Currency
The consolidated financial statements are presented in euro, which is the presentation currency of the Group and the functional currency of the
Parent Company.
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate(their “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities aretranslated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities arerecognised immediately in profit or loss.
On consolidation, the results of overseas operations are translated into euro at rates approximating when the transactions took place. All assets andliabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the reporting
date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate arerecognised in other comprehensive income and accumulated in the foreign exchange reserve.
Exchange differences recognised in profit or loss in Group entities’ separate financial statements on the translation of long-term items forming partof the Group’s net investment in the overseas operation concerned are classified to other comprehensive income and accumulated in the foreignexchange reserve on consolidation.
Revenue from Contracts with Customers
Contracts are typically for services, performing agreed-upon tasks for a customer and can be time-and-materials or milestone-based. Most
contracts are short term in duration (generally less than one month); however, milestone-based contracts can be longer term and extend to several
months (or in some cases over a year). Where there are multiple performance obligations outlined in a contract, each performance obligation isseparately assessed, the transaction price is allocated to each obligation, and related revenues are recognised as services or assets are transferredto the customer. Performance obligations are typically satisfied over time, as the majority of contracts meet the criteria outlined in IFRS 15
paragraph 35 (a) and (c).
Due to the nature of the services provided and the competitive nature of the market, contracts generally allocate specific transaction prices toseparate performance obligations. Individual services or individual milestones generally involve extensive commercial negotiation to arrive at the
specific agreed-upon tasks, and the related pricing outlined in the contract. Such negotiations extend further for milestone-based contracts to also
include the criteria involved in the periodic and regular process of milestone acceptance by the customer. Such criteria may involve qualitative, as
well as quantitative, measures and judgements.
In measuring progress towards complete satisfaction of performance obligations, the input method is considered to be the most appropriate
method to depict the underlying nature of the contracts with customers, the interactive way the service is delivered, and projects are managed withthe customer. For time-and-materials contracts, other than tracking and valuing time expended, significant judgement is not normally involved. For
milestone-based contracts, progress is generally measured based on the proportion of contract costs incurred at the balance sheet date (e.g.
worked days), relative to the total estimated costs of the contract, involving estimates of the cost to completion etc. Added to this, significant
judgement can be involved in measuring progress towards customer acceptance of the milestone. Significant judgement may also be involved
where circumstances arise that may change the original estimates of revenues, costs or extent of progress towards complete satisfaction of theperformance obligations. In such circumstances estimates are revised. These revisions may result in increases or decreases in revenue or costs andare reflected in income in the period in which the circumstances that give rise to the revision became known. When the outcome of a contract
cannot be measured reliably, contract revenue is recognised only to the extent that milestones have been accepted by the customer. Contract
costs are recognised as incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised
immediately.
Revenue recognised represents the consideration received or receivable, net of sales taxes, rebates discounts and after eliminating intercompany
sales. Revenue is recognised only where it is probable that consideration will be received. Where consideration is received and the related revenue
has not been recognised, the consideration received is recognised as a contract liability (Deferred Revenue), until either revenue is recognised or
the consideration is refunded. Revenue is derived from eight main service lines:•••

Art Services – Art Services relate to the production of graphical art assets for inclusion in the video game, including concept art creation
along with 2D and 3D art asset production and animation. Contracts can be either time-and-materials based or milestone-based, withperformance obligations satisfied over time. Contracts are generally short term in duration; however, for longer contracts the input
method is used to measure progress (e.g. worked days relative to the total expected inputs). Time-and-materials based contract revenue
is recognised as the related services are rendered. For milestone-based contracts where progress can be measured reliably towards
complete satisfaction of the performance obligation, revenue is recognised using the input method to measure progress. Where
progress cannot be measured reliably, revenue is recognised on milestone acceptance.
Game Development – Game Development relates to software engineering services which are integrated with client processes to develop
video games. Contracts can be either time-and-materials based or milestone-based, with performance obligations satisfied over time.
Contracts are generally longer term in duration. Time-and-materials based contract revenue is recognised as the related services are
rendered. For milestone-based contracts where progress can be measured reliably towards complete satisfaction of the performanceobligation, revenue is recognised using the input method to measure progress. Where progress cannot be measured reliably, revenue isrecognised on milestone acceptance.
Audio – Audio services relate to the audio production process for computer games and includes script translation, actor selection andtalent management through pre-production, audio direction, recording, and post-production, including native language quality assuranceof the recordings. Audio contracts may also involve music licensing or selling music soundtracks. Audio service contracts are typicallymilestone-based, with performance obligations satisfied over time. Audio services contracts are generally short term in duration;
22

•

•

•

•

•

however, for longer contracts where progress towards complete satisfaction of the performance obligation can be measured reliably,revenue is recognised using the input method to measure progress. Where progress cannot be measured reliably, audio services revenue
is recognised on milestone acceptance. Music licensing and music soundtracks performance obligations are assessed separately, andrelated revenue is recognised on licence inception and on delivery of the soundtracks, respectively.
Functional Testing – Functional Testing relates to quality assurance services provided to game producers to ensure games function as
required. Contracts are typically time-and-materials based and performance obligations are satisfied over time. Contracts are generally
short term in duration. Revenue is recognised as the related services are rendered.
Localization – Localization services relate to translation and cultural adaptation of in-game text and audio scripts across multiple gameplatforms and genres. Contracts are typically time-and-materials based and performance obligations are satisfied over time. Contracts
are generally short term in duration; however, for longer contracts the input method is used to measure progress. Localization contracts
may also involve licensing translation software as a service. Such revenue is assessed separately. Revenue is recognised as the related
services are rendered.
Localization Testing – Localization Testing involves testing the linguistic correctness and cultural acceptability of computer games.
Contracts are typically time-and-materials based and performance obligations are satisfied over time. Contracts are generally short termin duration. Revenue is recognised as the related services are rendered.
Marketing – Marketing services include game trailers, marketing art and materials, PR and full brand campaign strategies. Contracts canbe either time-and-materials based or milestone-based, with performance obligations satisfied over time. Contracts are generally shortterm in duration; however, for longer contracts the input method is used to measure progress. Time-and-materials based contract
revenue is recognised as the related services are rendered. For milestone-based contracts where progress can be measured reliably
towards complete satisfaction of the performance obligation, revenue is recognised using the input method to measure progress. Where
progress cannot be measured reliably, revenue is recognised on milestone acceptance.
Player Engagement – Player Engagement relates to the live operations support services such as community management, player
engagement and associated services provided to producers of games to ensure that consumers have a positive user experience.
Contracts are typically time-and-materials based and performance obligations are satisfied over time. Contracts are generally long termin duration. Player Engagement contracts may also involve digital support platform software as a service. Revenue is recognised as therelated services are rendered.

Multimedia Tax Credits / Video Games Tax Relief and other tax credits related to staff costs
The multimedia tax credits (“MMTC”) received in Canada, and video games tax relief in the UK together with similar reliefs in other jurisdictions(“VGTR”), are tax credits related to staff costs. Tax credits are recognised as income over the periods necessary to match the credit on a systematic
basis with the costs that it is intended to compensate. Thus, credits are taken as a deduction against direct costs each period, but typically paid in
the following financial year once the claims have been submitted and agreed. The nature of the grants is such that they are not dependent on
taxable profits, and are recognised (under IAS 20), at their fair value when there is a reasonable assurance that the grant will be received and all
attaching conditions have been complied with.
Share-based Payments
The Company issues equity-settled share-based payments to certain employees and Directors under a Share Option Scheme and a Long-Term
Incentive Plan (“LTIP”). Conditional awards under the rules of the LTIP Plan (“Salary Shares”) are also issued to certain employees and Directors.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period. Other than continuous service, grants do nothave non-market-based vesting conditions. At each reporting date the Company adjusts for unvested forfeitures and the impact is recognised in
profit or loss, with a corresponding adjustment to equity reserves. The Company has no legal or constructive obligation to repurchase or settle theoptions in cash.
Additional employer costs, including social security taxes, in respect of options and awards are expensed over the vesting period with acorresponding liability recognised. The liability recognised depends on the number of options that are expected to be exercised, and the liability is
adjusted by reference to the fair value of the options at the end of each reporting period.
Where share-based payments are issued to employees of subsidiary companies, the annual cost of the options are recharged to the subsidiarycompany through an inter-company recharge.
Share Option Plan
These are measured at fair value on the grant date using a Black-Scholes option pricing model which calculates the fair value of an option by using
the vesting period, the expected volatility of the share price, the current share price, the exercise price and the risk-free interest rate. The fair valueof the option is amortised over the vesting period, with one-third of the options vesting after two years, one-third after three years, and the balance
vesting after four years. The only vesting condition is continuous service. There is no requirement to revalue the option at any subsequent date.
LTIP
The exercise of LTIP awards is subject to certain vesting conditions. For the awards granted up to 2015, one-third of the share options vested if theCompany exceeded the Total Shareholder Returns (“TSR”) of the Numis Small Cap Index (excluding Investment Trusts) by 10%, two-thirds if the TSR
exceeded the Index by 20% and full vesting if the TSR exceeded the Index by 30%. This was amended for the 2016 and 2017 awards to 100% vesting if
the shareholder return exceeds the Index by 45%, and a prorated return between 10% if the TSR matches the Index, to 100% if the TSR exceeds theIndex by 45%. The scheme was further amended in 2018 to 100% vesting if the TSR exceeds the Index by 20%, and a prorated return between 10%
and 100% if the TSR exceeds the Index by between 0% and 20%. In 2019, the benchmark Index was amended for future grants to be the FTSE Small
Cap Index, with the same performance conditions as 2018. In 2021, the benchmark Index was amended to be the FTSE250 Index (excluding
investment trusts), and threshold vesting (25% of the award) will be earned for TSR in line with the Index and full vesting will be earned for exceeding
the Index TSR by 20% over the performance period. A prorated return will be earned between 25% and 100% if the TSR exceeds the Index by
between 0% and 20%.
These are measured at fair value, taking into account market vesting conditions but not non-market vesting conditions, at the date of grant,measured by using the Monte Carlo binomial model.

23

Salary Shares
Salary shares are measured at fair value on the grant date. As the only vesting condition is continuous service, the fair value of the shares isamortised over the vesting period.
Income Taxes and Deferred Taxation
Provision for income taxes is calculated in accordance with the tax legislations and applicable tax rates in force at the reporting date in the countries
in which the Group companies have been incorporated.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial positiondiffers from its tax base, except for differences arising on:•
The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects
neither accounting or taxable profit; and•Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference
and it is probable that the difference will not reverse in the foreseeable future.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are
expected to apply when the deferred tax liabilities / (assets) are settled / (recovered).
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and thedeferred tax assets and liabilities relate to taxes levied by the same tax authority on either:•
The same taxable Group company; or•Different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle theliabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled
or recovered.
Deferred tax assets and liabilities associated with leases and decommissioning liabilities are recognised on a gross basis, in accordance with IAS 12.
Property, Plant and Equipment
Property, plant and equipment comprise computers, leasehold improvements, and office furniture and equipment, and are stated at cost lessaccumulated depreciation. Carrying amounts are reviewed for impairment whenever events or changes in circumstances indicate that theircarrying amount may not be recoverable. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written
down immediately to its recoverable amount.
Property, plant and equipment acquired through business combinations are valued at fair value on the date of acquisition.
Depreciation is calculated to write off the cost of fixed assets on a straight-line basis over the expected useful lives of the assets concerned. The
principal annual rates used for this purpose are:
Computers and software
Office furniture and equipment
Leasehold improvements

3 - 5 years
10 years
over the length of the lease

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in the Consolidated statement ofcomprehensive income.
Financial Assets
The Group’s most significant financial assets comprise trade and other receivables and cash and cash equivalents in the Consolidated statement offinancial position, whereas the Company’s most significant financial assets comprise inter-group receivables.
Trade Receivables
Trade receivables, which principally represent amounts due from customers, are recognised at amortised cost as they meet the IFRS 9 classification
test of being held to collect, and the cash flow characteristics represent solely payments of principal and interest. The Group’s impairment
methodology is in line with the requirements of IFRS 9. The simplified approach to providing for expected credit losses has been applied to tradereceivables, which requires the use of a lifetime expected loss provision.
Accrued Income from Contracts with Customers
Other receivables include Accrued income from contracts with customers. The Group also applies the simplified approach to assessing expectedcredit losses in relation to such assets, as their maturities are less than twelve months.
Share Capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The
Group’s ordinary shares are classified as equity instruments.
Financial Liabilities
Trade payables, bank borrowings and other monetary liabilities are initially recognised at fair value and subsequently carried at amortised cost using
the effective interest rate method.

24

Leased Assets
A lease is defined as “a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange
for consideration”.
At lease commencement date, the Group recognises a right of use asset and a lease liability on the balance sheet. The right of use asset ismeasured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any
costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net ofany incentives received).
The Group depreciates the right of use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful lifeof the right of use asset or the end of the lease term. The Group also assesses the right of use asset for impairment when such indicators exist. At
the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using
the interest rate implicit in the lease if that rate is readily available or at the Group’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in-substance fixed), variable payments
based on an index or rate, amounts expected to be payable under a residual value guarantee, and payments arising from purchase and extension
options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any
reassessment or modification, or if there are changes to in-substance fixed payments. When the lease liability is remeasured, the corresponding
adjustment is reflected in the right of use asset, or profit and loss if the right of use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a rightof use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease
term.
The Group has applied judgement to determine the lease term for contracts in which it is a lessee that include renewal options. The assessment of
whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the lease liabilities and right ofuse assets recognised.
Employee Benefit Trust
Ordinary shares purchased by the Employee Benefit Trust on behalf of the parent company under the Terms of the Share Option Plan are deductedfrom equity on the face of the Consolidated statement of financial position. No gain or loss is recognised in relation to the purchase, sale, issue orcancellation of the parent company’s ordinary shares. Where such shares are utilised for employee share schemes, the cost of the shares istransferred to the Share-based payment reserve, with any cash proceeds credited directly to the Share-based payment reserve.

25

3

Critical Accounting Estimates and Judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historicalexperience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future,
actual experience may differ from these estimates and assumptions.
Judgements
The judgements, apart from those involving estimations, that management have made in the process of applying the Group’s accounting policies
and that have the most significant effect on the amounts recognised in the financial statements, are outlined below.
•

Group
o

o

o

o

o

Functional and Presentation Currency: The Directors have considered the requirements of IAS 21 in determining the currency
that most faithfully represents the economic effects of the underlying transactions, events and conditions to determine thefunctional currency of the Company. Detailed consideration has been given to both the Primary and Secondary Indicators informing this conclusion. The Primary Indicators relate to revenues, regulation, competitive forces and costs, while theSecondary Indicators are mainly concerned with financing the business and the currency in which receipts from operating
activities are usually retained. With a mix of currencies dominating the indicators, there is no clear single currency that
influences the Group when all factors are considered. The Directors have determined the euro as the most appropriate
presentation currency of the consolidated financial statements.
Business Combinations (Customer relationships): When acquiring a business, the Group is required to identify and recognise
intangible assets, the determination of which requires a significant degree of judgement. Acquisitions may also result in
intangible benefits being brought into the Group, some of which qualify for recognition as intangible assets while other such
benefits do not meet the recognition requirements of IFRS and therefore form part of goodwill. Customer relationships arerecognised as separate assets where revenues are recurring in nature and material revenues have been generated with thecustomer for a continuous period of three years. For the Game Development service line, the key asset acquired is typically“know-how”, an asset that is not readily measurable and thus intrinsically linked to goodwill. Relationships are typically fixed
term contract based rather than relationship based. Therefore, neither customer contracts nor customer relationships are
typically recognised on the acquisition of a Game Development business.
IFRS 16 Leases: The Group has determined that the Group’s incremental borrowing rate is the appropriate rate to use to
discount lease liabilities. The Group has applied judgement to determine the lease term for contracts in which it is a lessee that
include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the leaseterm, which significantly affects the lease liabilities and right of use assets recognised.
Business Combinations (put and call options over Non-controlling interest): The Group acquired an 85% interest in Tantalus in
March 2021, with the sellers retaining a minority shareholding. The shareholder agreement (signed with the purchaseagreement) includes put and call options (“the Forward”) that require the sellers to sell, or require the Group to buy, theremaining 15% shareholding after three years using a pre-determined valuation methodology linked to post-acquisition
performance. IFRS 3 does not provide specific guidance on how such contracts should be accounted for in a businesscombination. The Board determined, taking into consideration all the contracts’ terms and conditions, that the impact of the
Forward put the Group in a similar position as if the Group had acquired a 100% interest in the subsidiary on the acquisitiondate, with deferred contingent consideration payable at a future date. In doing so, the Board considered whether the risks andrewards of ownership reside with the Non-controlling interest or had effectively transferred to the Group, and concluded that
the Non-controlling interest arising on the acquisition had been extinguished by a combination of the Forward and otherconditions in the agreements. Therefore, the Group has accounted for the acquisition as if a 100% interest was acquired on
acquisition, accounting for the initial investment and the Forward as a single linked transaction in which 100% control is gained,with the Forward recognised at fair value, as a financial liability within Deferred and contingent consideration (note 17), and no
Non-controlling interest recognised on the acquisition. Any subsequent re-measurement required due to changes in the fairvalue of the liability are recognised in the Consolidated statement of comprehensive income.
Goodwill: Goodwill is required to be tested for impairment at least annually or more frequently if changes in circumstances or
the occurrence of events indicating potential impairment exist. The Group uses the present value of future cash flows todetermine recoverable amounts. In calculating the value in use, significant judgement and estimation is required in forecasting
cash flows of CGUs, in determining terminal growth values and in selecting an appropriate discount rate.

Estimates and Assumptions
A number of areas requiring the use of estimates and critical judgements impact the Group’s earnings and financial position. These include revenue
recognition, the computation of income taxes, the value of goodwill and intangible assets arising on acquisitions, the valuation of multimedia tax
credits / video games tax relief, leasing and the valuation of defined retirement benefits. The Directors consider that no reasonably possible
changes to any of the assumptions used in the estimates would in the view of the Directors give rise to significant risk of a material adjustment tothe carrying value of the associated balances in the subsequent financial year.

26

4

Segmental Analysis and Revenue from Contracts with Customers

Segmental Analysis

Revenue from external customers
CreateGlobalize
EngageSegment operating profit
CreateGlobalize
EngageReconciliation of Segment operating profit
Adjusted EBITDA^
Share-based payments expense
Costs of acquisition and integration
Amortisation of intangible assets
Depreciation - property, plant and equipment
Depreciation - right of use assets
Bank charges
Other income
Operating profit
Financing income
Financing cost
Profit before taxation

2023
€'000

2022
€'000

336,069
279,490
164,886
780,445

275,570
300,875
114,273
690,718

94,11848,477
15,710158,305

69,74861,577
15,576
146,901

158,305(21,964)(27,140)(26,060)(23,128)(13,907)724
46,830614(12,450)
34,994

146,901(18,678)(8,413)(16,810)(18,365)(14,585)
662
1,098
71,8101,986(5,814)
67,982^ The Group reports a number of alternative performance measures (“APMs”), including Adjusted EBITDA, to present the financial performance of the business,that are not GAAP measures as defined under IFRS. Segmental results are reported in a manner consistent with these measures, with Segment operating profit
equating to Adjusted EBITDA. A reconciliation of Adjusted EBITDA to the relevant GAAP measure is presented in the APMs section.

The Group is organised into three operating segments (as identified under IFRS 8 Operating Segments), and generates revenue across eight service
lines under three divisions:•
Create – Game Development and Art Services;•
Globalize – Functional Testing, Localization Testing, Audio and Localization; and•Engage – Marketing and Player Engagement.
Operating segments are reported in a manner consistent with the internal organisational and management structure, and the internal reporting
information provided to the Chief Operating Decision Maker (“CODM”) who is responsible for allocating resources and assessing performance of theoperating segments. The CODM has been identified as the executive management team made up of the Chief Executive Officer, the Chief
Operating Officer and the Chief Financial Officer.
Intersegment revenue is not material and thus not subject to separate disclosure.

Geographical analysis of non-current assets from continuing businesses*

United States
United Kingdom
CanadaAustralia
Italy
PolandSwitzerland
China
India
France
Other

2023
€'000
351,240
216,416
49,99749,17915,30812,859
9,786
9,573
7,495
7,044
28,392757,289

2022€'000
264,117
121,556
57,652
51,86916,471
12,561
10,025
9,296
4,974
7,150
28,070583,741*The prior year comparatives have been re-classified to align to the current year ranking.

27

Revenue from Contracts with Customers
Revenue recognised in the reporting period arises from contracts with customers, and is predominantly recognised over time. There were no
significant amounts of revenue recognised in the reporting period that were included in a contract liability balance at the beginning of the reporting
period, or from performance obligations satisfied in the previous reporting period.

Geographical analysis of revenues, by production location*
2023
€'000
174,550
158,199
130,016
40,98834,425
34,11429,061
27,872
21,237
20,591
109,392
780,445

United States
CanadaUnited Kingdom
PolandAustralia
Italy
China
India
Japan
Philippines
Other

2022
€'000
120,722
155,509
115,01742,731
22,21139,19526,75925,29022,716
20,074100,494
690,718*The prior year comparatives have been re-classified to align to the current year ranking by production location.

For many contracts, operations are completed across multiple sites. Analysis of revenues by geographical regions is presented by production
location, which may not reflect the jurisdiction from which the final invoice to the client is raised, or the region of the Group’s customers, whose
locations are worldwide.
One customer was above 10% of revenues in 2023, accounting for 19.1% of total revenue (2022: 13.4%), with revenues spread across all divisions andservice lines. The increase in concentration has been primarily due to the customer’s acquisition activity over the past year.
Revenue Expected to be Recognised
For Game Development, games are developed to an agreed specification and time schedule, and often have delivery schedules and / ormilestones that extend well into the future. The following are Game Development revenues expected to be recognised for contracts with aschedule of work that extends beyond one year, representing the aggregate amount of the transaction price allocated to the performanceobligations that are unsatisfied (or partially unsatisfied) as at the end of the reporting period:

Revenue expected to be recognised
At 31 December 2023
At 31 December 2022

Total
undelivered€'000
69,11382,060

Scheduledcompletion
within 1 year€'000
57,71277,448

Scheduledcompletion
1-2 years€'000
10,947
4,612

Scheduledcompletion
2-5 years
€'000
454
-

For all service lines excluding Game Development, contracts do not extend to more than one year, therefore information concerning unsatisfied
performance obligations are not disclosed, as allowed under the practical expedient exemption under IFRS 15. This practical expedient is alsoavailed of for Game Development contracts of less than one year in duration.

28

5

Cost of Sales and Operating Profit

Cost of sales
Operating expenses
Multimedia tax credits / video games tax relief
Other direct costs

Operating profit is stated after charging / (crediting):
Depreciation - property, plant and equipment
Depreciation - right of use assets
Amortisation of intangible assets
Costs of acquisition and integration
Auditor's remuneration
Short-term leases
Other income

Costs of acquisition and integration
Acquisition and integrations costs re: current year acquisitions (note 27)
Acquisition and integrations costs re: prior acquisitions
Fair value adjustments to contingent consideration (note 17)
Deferred consideration related to continuing employment
Costs associated with ceasing operations in Russia (note 29)
Acquisition team and related costs
Globalize restructuring - Right of use assets impairment
Globalize restructuring - Property, plant and equipment impairment
Globalize restructuring - Other provisions
Other reorganisation and restructuring costs

2023
€'000
499,186(38,215)
20,369481,340

2022€'000
430,475(21,540)
14,517423,452

2023€'000
23,12813,907
26,06027,140
870
2,550
-

2022
€'000
18,365
14,585
16,810
8,413
689
2,140
(1,098)

2023
€'000
2,345
390
300
8,877
3,893
593
2,041
5,755
2,677
269
27,140

2022
€'000
1,177
631
2,282
3,266
671
386
8,413

In December 2023, the Board approved an initiative to enhance the Globalize operating model, by managing its cost base, more deeply
integrating technology and enhancing collaboration across our locations to provide best in class service delivery for clients. Against thisbackdrop there was a charge of €10.5m relating to restructuring of the Globalize service line arising from €2.0m in Right of use assets, €5.8m
relating to property, plant and equipment and €2.7m of other related contracts that were identified as onerous or impaired.

Auditor's remuneration
Audit services:
Parent company and Group audit
Subsidiary companies audit
Non-audit services:
Audit-related assurance services

Other income
Gain on disposal of investment

2023
€'000

2022
€'000

387
496

318
358

11
894

13
689

2023
€'000
-

2022
€'000
(1,098)(1,098)Other income represents the gain on disposal of the Group’s investment in AppSecTest in April 2022 (including related Non-controlling interest recycled on disposal).

29

6

Financing Income and Cost

Financing income
Interest received
Foreign exchange gain
Financing cost
Bank charges
Interest expense
Unwinding of discounted liabilities - lease liabilities
Unwinding of discounted liabilities - deferred consideration
Foreign exchange loss
Net financing income / (cost)

7

2023
€'000

2022
€'000

614
614

309
1,677
1,986

(724)
(5,768)(1,447)(3,279)(1,232)(12,450)(11,836)(662)(1,261)(969)(2,922)(5,814)(3,828)

2023
€'000

2022
€'000

26,469(11,427)
15,042

25,844(5,232)
20,6122023€'000
34,994
6,582
1,524
(602)
11,82626(4,220)(17)
54869(1,000)15,042
18.8%

2022
€'000
67,982
12,156
(653)
(204)
7,468
(72)
(924)
(250)
346
932
1,813
20,612
17.9%

Taxation

Current income tax
Income tax on profits
Deferred tax (note 21)

The tax charge for the year can be reconciled to accounting profit as follows:

Profit before tax
Tax charge based on the Effective tax rate*
Income tax prior year (over) / under provision
Deferred tax prior year (over) / under provision and impact of change in tax rates
Items disallowed for tax purposes
Exempt and non-taxable income
Tax incentives
Current year tax losses utilised
Current year tax losses where deferred tax has not been provided
State and other direct taxes
Other differences - net
Total tax charge*Effective tax rate - being the statutory tax rate relative to the profit before tax in each jurisdiction

The Group’s subsidiaries are located in different jurisdictions and are taxed on their residual profit in those jurisdictions. The effective tax rate willvary year on year due to the effect of changes in tax rates and changes in the proportion of profits in each jurisdiction.

Tax effects relating to each component of other comprehensive income

2023
€'000

2022
€'000

Exchange gain / (loss) in net investment in foreign operations
Tax (expense) / benefit
Net of tax amount(8,317)1,238(7,079)(7,947)993(6,954)

12
12

286
286

(2,518)(2,518)

6,144
6,144

Actuarial gain / (loss) on defined benefit plansTax (expense) / benefit
Net of tax amount
Exchange gain / (loss) on translation of foreign operations
Tax (expense) / benefit
Net of tax amount30

8

Earnings per Share

Basic
Diluted2023€ cent
25.28
24.94

2022
€ cent61.54
58.86

Earnings
Profit for the period from continuing operations€'000
19,952€'000
47,370

Number
78,910,471
1,084,796
79,995,267

Number
76,979,596
3,502,301
80,481,897

Number
67,827

Number
67,802

Weighted average number of equity shares
Basic (i)Diluting impact of share options (ii)
Diluted (i)(i) Includes (weighted average) shares to be issued:(ii) Contingently issuable ordinary shares have been excluded where the conditions governing exercisability have not been satisfied:
NumberNumber
LTIPs
3,334,569
409,728
Share options
450,994
511,4113,785,563
921,139
Details of the number of share options outstanding at the year end are set out in note 23.

9

Dividends

Dividends paid
FinalInterim
Dividends paid to shareholders 2022
Final
Interim
Dividends paid to shareholders 2023

Recommended
Final

In
respect
of
2021
2022

Approval
date
Mar-22
Sep-22

2022
2023

Mar-23
Sep-23€ centper share
1.70
0.90
2.60
1.85
0.97
2.82

Pence
STG
per
share
1.45
0.77
2.22
1.60
0.85
2.45

Total
dividend
€'000
1,305
674
1,979
1,461
769
2,230

Pence
STG
per
share

Expected
total
dividend€'000

Expected
payment
date

1.76

1,609

Jun-24InrespectofApproval
date

Expected€ centper share

2023

Mar-24

2.03

Payment
date
Jun-22Oct-22Jun-23Oct-23

At 31 December 2023, Retained earnings available for distribution (being Retained earnings plus Share-based payments reserve) in the Company
were €94.5m (2022: €77.6m). In addition, certain amounts within Merger reserve are considered distributable (see note 22).
The Directors do not foresee any impediment in continuing to implement the dividend policy of the Group moving forward.
The Group does not recognise deferred tax on unremitted retained earnings, as, in general, retained earnings (as dividends) are only remitted where
there are minimal or no tax consequences.

31

10

Staff Costs

2023
€'000
414,818
37,926
8,167
21,964
482,875

2022€'000
345,857
27,788
7,222
18,678399,545

Operations
General and administration

2023
11,307
1,033
12,3402022
10,272869
11,141

Key management compensation
Salaries and related costs
Social welfare costs
Pension costs
Share-based payments expense

2023
€'000
2,452
323
75
2,025
4,875

2022
€'000
2,258
431
54
1,142
3,885

Total staff costs (including Directors)
Salaries and related costs
Social welfare costs
Pension costs
Share-based payments expense

Average number of employees

The key management compensation comprises compensation to nine Directors of Keywords Studios plc during the year (2022: ten).

32

11

Intangible Assets

Cost
At 01 January 2022
Recognition on acquisition of subsidiaries
Additions
Disposals
Exchange rate movement
At 31 December 2022
Recognition on acquisition of subsidiaries
Additions
Adjustment to the carrying value of prior year businesscombinations
Exchange rate movement
At 31 December 2023
Accumulated amortisation
At 01 January 2022
Amortisation charge
Disposals
Exchange rate movement
At 31 December 2022
Amortisation charge
Exchange rate movement
At 31 December 2023
Net book value
At 01 January 2023
At 31 December 2023

Goodwill€'000

Customer
relationships€'000Intellectual
property /Development
costs
€'000

325,037
70,482(159)
1,373
396,733
152,001-

68,32534,695
1,317
104,337
45,859-4,114
25,914501(134)
30,395
3,052

397,476
131,091
501
(159)
2,556
531,465
197,860
3,052(2,967)(7,352)
538,415(3,353)
146,843(899)
32,548(2,967)(11,604)
717,806

147
(147)
-

40,70816,285
1,308
58,301
20,142(1,826)
76,617

2,678
525
8
3,211
5,918
(116)
9,013

43,533
16,810(147)
1,316
61,512
26,060(1,942)
85,630396,733
538,415

46,03670,22627,18423,535469,953
632,176

Total
€'000

Customer relationships and intellectual property / development costs are amortised on a straight-line basis over five years. Customer relationships
amortisation commences on acquisition, whereas intellectual property / development costs amortisation commences when the product islaunched.
Adjustment to the carrying value of prior year business combinations
IFRS 3 allows a twelve-month measurement period from acquisition date to complete the initial accounting. When Keywords acquired Helpshift
in December 2022, a provisional estimate of deferred tax assets (“DTA”) was recognised related to pre-acquisition tax losses. As US regulations
limit the use of net operating losses in certain cases following ownership changes, an expert report was commissioned to clarify the availabilityof the pre-acquisition losses to offset future tax liabilities. Following this study, an uplift of €3.0m in Helpshift DTAs was recorded with acorresponding reduction in the Goodwill recognised on the Helpshift acquisition. As the adjustment is not significant the prior period has notbeen restated.

Impairment tests for goodwill
The Group assesses the carrying value of goodwill each year on the basis of budget projections for the coming year extrapolated using a 1 to 5 year
growth rate and a terminal value calculated using a long-term growth rate projection. The (pre-tax) discount rate used of 10.0% (2022: 10.0%) isbased on the Board’s assessment of the weighted average cost of capital (“WACC”) of the Group.
A cash-generating unit (“CGU”) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash
inflows from other assets or group of assets. The CGUs represent the lowest level within the Group at which the associated goodwill is assessed forinternal management purposes and are not larger than the operating segments, as outlined in note 4, determined in accordance with IFRS 8
Operating Segments. The Board have determined the service lines as CGUs, and Goodwill acquired in business combinations has been allocated to
the CGUs that are expected to benefit from business combinations to date.

33

A summary of the allocation of the carrying value of goodwill by segment and by CGU is presented below:

Segment
Create:Globalize:

Engage:

2023
€m
296
19
14
14
33
18
110
34
538

CGU
Game Development
Art Services
Functional Testing
Localization Testing
Audio
Localization
MarketingPlayer Engagement

2022
€m
218
19
15
14
33
19
35
44
397

The value in use calculations were consistently calculated year over year, with no significant changes in the assumptions made. The result of thevalue in use calculations was that no impairment is required in this period.

Key assumptions

1 to 5 year growth rate assumption
Long-term growth rate assumption
Value in use (€m) - all CGUs
Carrying value - goodwill (€m)

Actual
2023

2022

2023

10%
2%
1,369
538

10%
2%
1,295
397

15%
2%
1,641

Sensitivity analysis
2022
2023

2022

5%
2%
1,159

5%
2%
1,096

15%
2%
1,552

Sensitivity analysis has been performed across all the CGUs to flex the growth rate by 5% and separately to flex the discount rate by 1%. Under bothscenarios there would have been no requirement for the Group to recognise any impairment charge in either period presented, in any individual
CGU. The Directors consider that no reasonably probable change in the assumptions would result in an impairment.
12

Right of Use Assets

The Group has entered into leases, across the business, principally relating to property. These property leases have varying terms and renewal
rights.

Cost
At 01 January
Additions
Recognition on acquisition of subsidiaries
De-recognition of expired leases
Exchange rate movement
At 31 December
Accumulated depreciation
At 01 January
Depreciation charge
De-recognition of expired leases
Impairment charge (note 5)
Exchange rate movement
At 31 December
Net book value
At 01 January
At 31 December

2023
€'000

2022
€'000

65,84914,074
6,151(9,993)(389)
75,692

63,84015,249580(14,186)366
65,84928,177
13,907(9,993)2,041(390)
33,742

27,84911,753(14,186)
2,832(71)
28,17737,672
41,95035,99137,67234

13Property, Plant and Equipment

Cost
At 01 January 2022
Exchange rate movement
Additions
Acquisitions through business combinations at fair value
Disposals
At 31 December 2022
Exchange rate movement
Additions
Acquisitions through business combinations at fair value
Disposals
At 31 December 2023
Accumulated depreciation
At 01 January 2022
Exchange rate movement
Depreciation charge
Disposals
At 31 December 2022
Exchange rate movement
Depreciation charge
Impairment charge (note 5)
Disposals
At 31 December 2023
Net book value
At 01 January 2023
At 31 December 2023

14

Computers
and software€'000

Officefurniture andequipment€'000

Leaseholdimprovements
€'000

Total
€'000

43,049(94)
21,962243(1,132)64,028(1,509)25,974
2,792(3,757)87,528

9,214
(109)
1,129
131
(490)
9,875
(165)
2,136
393
(304)
11,935

14,928
105
3,916
48
(828)
18,169
(394)
2,579
277
(450)
20,181

67,191(98)
27,007422(2,450)92,072(2,068)30,6893,462(4,511)
119,644

24,56847
12,539(1,133)36,021(2,084)
18,255
3,572(3,757)52,007

4,310
71
799
(490)
4,690
(51)
1,276
(304)
5,611

2,295
82
5,027
(827)
6,577
(138)
3,597
2,203
(450)
11,78931,173200
18,365(2,450)47,288(2,273)23,128
5,775(4,511)
69,40728,00735,521

5,185
6,324

11,592
8,392

44,78450,237

Investments

Investments

2023
€'000
175

2022
€'000
175

From time to time, the Group (via Keywords Ventures Limited) has made modest investments in businesses developing innovative technologies andservices that will benefit its clients, while further accelerating the success of investee companies through access to its global platform andrelationships.

35

15 Trade Receivables

Trade receivables
Provision for bad debts (note 24)
Financial asset held at amortised cost

2023
€'000
94,189(4,249)89,9402022€'000
85,012(3,449)81,5632023€'000
37,081
18,307
14,362
7,263
6,980
83,9932022€'000
25,756
13,22010,527
6,538
5,374
61,415Trade receivables arise from revenues derived from contracts with customers.

16

Other Receivables

Current
Multimedia tax credits / video games tax relief
Accrued income from contracts with customers
Prepayments and rent deposits
Tax and social security
Other receivables

Accrued income from contracts with customers represent mainly contract assets in process and related items.

36

17

Other Payables

Current liabilities
Accrued expenses*
Deferred and contingent consideration (i)Other payables (ii)Deferred and contingent consideration related to continuous employment (i)*Payroll taxes
Non-current liabilities
Deferred and contingent consideration (i)

2023
€'000

2022
€'000

76,97036,55030,1057,273
5,072
155,970

61,15544,94526,0993,579
3,577
139,355

12,002
12,002

18,30818,308* Please note in 2022 Deferred and contingent consideration related to continuous employment was disclosed within Accrued expenses.

The movement in deferred and contingent consideration during the financial year was as follows:
2023
€'000

Carrying amount at the beginning of the period
Consideration settled by cash
Consideration settled by shares
Unwinding of discount (note 6)
Additional liabilities from current year acquisitions (note 27)
Fair value movements in contingent consideration
Fair value movements in deferred consideration related tocontinuous employment
Exchange rate movement
Carrying amount at the end of the period

2022
€'000

Deferred andcontingent
consideration
63,253(30,428)(11,716)
3,279
25,790
300€'000
Deferred andcontingent
consideration
related tocontinuous
employment
3,579(3,900)(1,238)315-

Deferred andcontingent
consideration
54,142(25,800)(8,040)2,922
37,9502,282€'000
Deferred andcontingent
consideration
related tocontinuous
employment-(1,926)48,552

8,562
(45)
7,273

(203)
63,253

3,579
3,579

In general, in order for contingent consideration to become payable, pre-defined profit and / or revenue targets must be exceeded. The
valuation of contingent consideration is derived using data from sources that are not widely available to the public and involves a degree ofjudgement (Level 3 input in the fair value hierarchy).
A 10% increase in expected performance would increase the carrying value of Deferred and contingent consideration by €5.8m, while a 10%
reduction in expected performance would decrease the carrying value by €7.7m. A 10% increase in expected performance would increase thecarrying value of Deferred and contingent consideration related to continuous employment by €0.3m, while a 10% reduction in expected
performance would decrease the carrying value by €0.8m.
On an undiscounted basis, the Group may be liable for deferred and contingent consideration ranging from €9.4m to a maximum of €89.3m.
(i)Other payables include deferred income from contracts with customers of €13.1m (2022: €9.1m), which mainly comprise items
invoiced prior to services being delivered. Excluding amounts recognised on acquisition of subsidiaries (€5,360k, see note 27), themovement in the year comprises transfers in and out as items are deferred and subsequently recognised as revenue.

37

18

Loans and Borrowings

Maturity analysis of Loans and borrowings
Current
Expiry within 1 year
Non-current
Expiry between 1 and 2 years
Expiry over 2 years

Currency denomination
US dollar
Sterling
Canadian dollar

2023
€'000

2022
€'000

-

-

127,380
127,38051
51

127,38051

35,12992,251
127,380

51
51

The carrying amount at the beginning of the period represents loans owed by Keywords Studios QC-Interactive Inc. These balances were repaid in
the period.
During July 2023, the Group negotiated a new unsecured multi-currency revolving credit facility agreement ("RCF") of US$400m that matures in July
2027. The new RCF includes an accordion option to increase the facility up to US$500m and an option to extend the expiry date by a further
one-year period (both subject to lender consent). The new facility is supported by a group of seven global lenders and replaces the Group's
previous €150m unsecured multi-currency revolving credit facility. The RCF's financial covenants remain consistent with the previous facility. The
new facility is denominated in US dollars to match the expected predominant currency of future borrowings.
The previous RCF allowed the Group to access financing of up to €150m, which could be drawn down in euro, sterling, US dollars or Canadiandollars, and included an option to increase the facility by up to €50m to a total of €200m (subject to lender consent), at interest rates based on amargin over currency benchmark rates, plus a separate margin charged for the unutilised facility.
Both the new and previous RCFs contain representations, warranties and financial covenants customary for facilities of this type. Non-compliancewith RCF terms could result in lenders refusing to advance funds under the facility or, in the worst case, calling in outstanding loans. In connection
with the financial covenants, the Group is required to comply with and report interest cover and leverage ratios, each half calendar year, calculated
in accordance with the lenders’ facility agreement. The covenants provide that Net debt to an adjusted EBITDA metric shall not exceed 3.0x andthat EBIT to Net Finance Charges will be a minimum of 4.0x. Throughout the period, the Group operated well within the applicable ratio terms ofboth the new and previous RCF agreements, with Net Debt to Adjusted EBITDA of 0.1x at the end of H1 and 0.4x at the end of H2, and with EBIT to
Net Finance Charges of 18.1x and 16.6x respectively.
Loans and borrowings (classified as financial liabilities under IFRS 9), are held at amortised cost. Interest expenses which are calculated using theeffective interest method are disclosed in note 6. While technically any borrowings are repaid and re-borrowed multiple times during the term of
the RCF, so long as the Group remains compliant with the financial covenants and certain other terms of the RCF, any debt is rolled from one period
to another, with the legal and commercial substance of a multi-year committed facility. Hence the Group presents RCF liabilities as non-current.
The movements in Loans and borrowings are as follows:

At 01 January 2022
Cash flows:
Repayments
Non-cash flows:
Exchange rate movement
At 31 December 2022
Cash flows:
Drawdowns
Repayments
Non-cash flows:
Exchange rate movement
At 31 December 2023

Current€'000
81Noncurrent
€'000
48

Total
€'000
129

(37)

(42)

(79)

1
45

6

1
51

(45)

227,322(97,334)

227,322(97,379)-(2,614)
127,380(2,614)
127,38038

19

Lease Liabilities

The Group has entered into leases, across the business, principally relating to property. These property leases have varying terms and renewal
rights. Management applies judgement in determining whether it is reasonably certain that a renewal or termination option will be exercised.
The movement in lease liabilities during the financial year was as follows:

2023
€'000
42,5196,151
14,074
1,447(16,485)(734)
46,972Carrying amount at the beginning of the year
Recognition on acquisition of subsidiaries (note 27)
Liabilities recognised on new leases in the period
Unwinding of discounted liabilities - lease liabilities
Payment of principal and interest on lease liabilities
Exchange rate movement
Carrying amount at the end of the year

2022
€'000
37,635580
15,244969(12,330)421
42,519The value of leases not yet commenced to which the lessee is committed, which are not included in lease liabilities at 31 December 2023, was€3.6m (2022: €nil).

Maturity analysis of leaseliabilities

Current
Not later than one year
Non-current
Later than one year and not later than
five years
Later than five years

At 31 December

2023

2023

2023

2022

2022

2022

€'000
Lease
payments€'000
Financecharges

€'000
Lease
liabilities

€'000
Lease
payments€'000
Financecharges

€'000
Lease
liabilities

15,164

1,299

13,865

12,740326

12,41430,5464,900
35,446

2,189
150
2,339

28,357
4,750
33,107

26,491
5,317
31,808

1,447
256
1,703

25,044
5,061
30,10550,6103,638

46,97244,5482,029

42,519The Group has elected not to recognise a lease liability for short-term leases (leases with an expected term of twelve months or less) or for leases of
low-value assets. Payments made under such leases are expensed on a straight-line basis. The expenses in the period relating to payments notincluded in the measurement of the lease liability were as follows:

Lease payments not recognised as a liability
Short-term leases
Leases of low value assets

The future minimum lease payments related to these leases
Not later than one year
Later than one year and not later than five years
Later than five years

2023
€'000

2022
€'000

2,550
2,550

2,140
2,140

1,081
1,081

1,282
1,282

The effect of variable lease payments and reinstatement costs on future cash outflows arising from leases is not material for the Group.

39

20 Employee Defined Benefit Plans
2023
€'000
4,030

Liabilities under Employee defined benefit plans

2022
€'000
2,861

In line with statutory requirements in France, Italy and India, we are required to maintain employee defined benefit termination payment schemes.
The Group commissions an actuarial valuation of the related liabilities in each jurisdiction annually. The liabilities at year end are recorded as longterm, while the actuarial gain or loss is recorded separately within Other comprehensive income.
The Group has taken no specific actions to mitigate these factors as due to the long-term nature of the plans it is expected that there will be no
sudden financial impact on the Group’s results caused by any of these factors. A maturity profile of the obligation and other disclosures required by
IAS 19 are not presented as the liability is not significant in the context of the Group, and due to the age profile of employees, a significant outlay is
not anticipated for the foreseeable future.
Substantially all of the pension costs of €8.2m (2022: €7.2m) disclosed in note 10 relate to the Group’s defined contribution pension plans.
21

Deferred Tax

Details of the deferred tax assets and liabilities, and amounts recognised in the Consolidated statement of comprehensive income are as follows:

2023
€'000

2023
€'000

2023
€'000

Assets125
13,417466
780
171
15,591
21,159
9,867

Liabilities
10
43
1,715
6,406
21,091
9,867(28,825)
32,751(28,825)
10,307

01 January
2022*

Recognisedin theincomestatement(note 7)*

Restated
€'000

Net
115
13,417423(935)(6,235)
15,591
21,159(21,091)
-

2022
€'000
Restated
Assets308
10,664
258
1,092
8,879
18,176
8,400

2022
€'000
Restated
Liabilities
124
13
1,983
3,879
2,091
17,147
8,400

2022
€'000
Restated
Net
184
10,651258(891)(3,879)6,788
18,176(17,147)-

22,444(16,620)
31,157(16,620)
17,017

14,140Recognisedin businesscombinations(note 27)*

31
December
2022*

Recognisedin theincomestatement(note 7)

Recognisedin businesscombinations(note 11, 27)

31
December
2023

Restated€'000

Restated€'000

Restated
€'000

€'000

€'000

€'000

328
1,077
222
116
(3,570)3,796
11,551(5,892)

(144)
1,000
36
(1,007)
(309)
2,992
(194)
2,086

8,574
6,819
(13,341)

184
10,651258(891)(3,879)6,788
18,176(17,147)

(69)
(201)
165
(44)
(2,356)
8,803(2,030)
7,159

2,967
5,013
(11,103)115
13,417423(935)(6,235)
15,591
21,159(21,091)

7,628

4,460

2,052

14,14011,427(3,123)22,444

Employee defined benefit plans
Unused tax losses
Provisions
Property, plant and equipment
Multimedia tax credits / video games tax relief
Share-based payments
Goodwill
Customer relationships
Right of use assets and Lease liabilities
Offset where legally enforceable right of set off
existsEmployee defined benefit plans
Unused tax losses
Provisions
Property, plant and equipment
Multimedia tax credits / video games tax relief
Share-based payments
Goodwill
Customer relationships
Other amounts recognised in the income statement:
Effect of tax rate change
Adjustment in respect of prior years

(13)
785
5,232

*The prior year has been restated to the current year presentation as the Directors believe this to be more meaningful.

The deferred tax asset not recognised on available losses at the period end is €3.3m (2022: €3.8m). Deferred tax assets and deferred tax
liabilities are offset where a legally enforceable right to offset the recognised amounts exists, the deferred tax assets and deferred tax liabilities
relate to taxes levied by the same taxation authority, and the Group anticipates they will be settled either at the same time or, on a net basis.
40

The Group has adopted Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) from 01 January
2023. These amendments narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equaland offsetting temporary differences e.g. Right of use assets and Lease liabilities. As a result for leases and decommissioning liabilities, an entity
is required to recognise the associated deferred tax assets and liabilities on a gross basis from the beginning of the earliest comparative period
presented, with any cumulative effect recognised as an adjustment to retained earnings or other components of equity at that date.
The Group previously accounted for the deferred tax on leases and decommissioning liabilities on a net basis. Following the amendments, theGroup has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right of use
assets. There was no impact on the opening retained earnings at 01 January in any period presented as a result of this change. The impact ondeferred tax assets and liabilities in each comparative period presented is detailed below.

At 31 December 2022 - as reported
Adoption of Deferred Tax related to Assets and Liabilities arising froma Single Transaction (Amendments to IAS 12)
At 31 December 2022 - as restatedDeferred tax
assets€'000
22,757

Deferred tax
liabilities
€'000
8,617

Retainedearnings€'000
143,627

8,400
31,1578,400
17,017

143,62741

22 Shareholders’ Equity
Share Capital

At 01 January 2022
Acquisition-related issuance ofshares:Waste Creative
Heavy Iron
Heavy Iron related adjustment
Jinglebell
Tantalus Media
Forgotten Empires
Forgotten Empires
Mighty Games
Climax Studios
AMC
Smoking Gun
Mighty Games
Smoking Gun
G-Net MediaAcquisition-related issuance ofsharesEmployee Share Purchase Plan
Exercise of share options
At 31 December 2022
Acquisition-related issuance ofshares:Heavy Iron
Climax Studios
Waste Creative
Digital Media Management
Digital Media Management
Hardsuit Labs
Hardsuit Labs
Tantalus Media
Playboss Interactive
Forgotten Empires LLC
Forgotten Empires LLC
Forgotten Software SL
Mighty Games
KantanAcquisition-related issuance ofsharesExercise of share options
At 31 December 2023

Issue datePer
share €

24-Jan-22
03-Feb-22
03-Feb-22
11-Mar-22
04-Jul-22
28-Jul-22
28-Jul-22
03-Aug-22
08-Aug-22
31-Aug-22
05-Oct-22
25-Oct-22
25-Oct-22
25-Nov-22

30.78
31.84
31.84
25.94
31.03
28.41
27.44
28.74
28.71
33.49
25.78
28.74
25.78
33.56

20-Jan-23
17-Feb-23
15-Mar-23
29-Mar-23
06-Apr-23
10-May-23
30-May-23
15-Jun-23
30-Jun-23
03-Aug-23
03-Aug-23
03-Aug-23
21-Nov-23
12-Dec-23

34.67
27.18
31.52
30.92
30.92
28.17
28.17
27.48
24.48
28.41
30.72
27.45
18.58
32.56

Number ofordinary£0.01
shares76,275,775

Numberofordinary£0.01
shares to beissued70,144

20,585
12,91453
11,56428,473
135,559
25,081
28,443
107,025
114,038

Sharecapital
€’000
904

Share
capital to beissued
€'000
2,185

Share
premium€’000
38,549Mergerreserve€’000
273,677(20,585)(12,914)(11,564)
60,857
26,881
28,443(25,081)
107,025(28,443)(107,025)
-

2
2
2

(634)
(411)
(300)
1,729
738
817
(840)
2,759
(817)
(2,759)
-

884
817
-

633
411
300
3,889
840
2,758
4,147

483,735
33,372
1,197,175
77,990,057

17,59487,738

6
14
924

282
2,467

1,701
909
5,862
47,021

12,978286,655

93,85621,42826,600301,170
53,482
191,72260,85659,55926,881
2,585
12,254

301,170(301,170)
53,482(53,482)
13,118(60,856)(26,881)
-

1
3
1
2
1
1
1

9,311
(9,311)
1,507(1,507)321(1,729)
(738)
-

5,986
49
-

3,254
582
838
9,308
1,506
1,728
1,828
738
400

850,393446,786
79,287,236(74,619)
13,11910
5939(2,146)
321

6,035
1,462
54,51820,182306,837

Subject to applicable law, the Company’s articles of association and any relevant authority of the Company passed by the shareholders in general
meeting, there is no limit to the number of shares which the Company can issue, nor are there are any restrictions on dividends or distributions onsuch shares. In the context of the Company’s general meeting authorities, at the Company’s AGM on 26 May 2023 its shareholders gave the
Directors the authority to allot the following number of shares (or grant rights to subscribe for, or convert any security into, shares) in the capital of
the Company:a) Up to 3,912,987 shares in respect of the Company’s incentive plans in place from time to time (5% of the Company’s issued share capital as at 24
March 2023); andb) Otherwise, up to 26,086,581 shares (33.3% of the Company’s issued share capital as at 24 March 2023).
This authority is considered prudent as it gives the Company flexibility to take advantage of possible opportunities which may arise from time totime. The authority granted at the 2023 AGM will expire on the earlier of (i) the close of business on 26 August 2024; and (ii) the conclusion of the2024 AGM.
Shares to be issued are valued at the share price at the date of acquisition and are recorded in accordance with IAS 32.16.

42

Shares held in the Employee Benefit Trust (“EBT”)

Carrying amount at the beginning of the year
Company funded acquisition of shares
Utilization for the exercise of share-based payment
plans
Carrying amount at the end of the year2023
Shares748,655€'000
14,846(340,170)
408,485(8,072)
6,774

2022
Shares
-

€'000
-

-

-

Reserves
The following describes the nature and purpose of each reserve within owners’ equity:

Reserve

Description and purpose

Retained earnings

Cumulative net gains and losses recognised in the Consolidated Statement of Comprehensive Income.

Foreign exchange reserve

Gains or losses arising on retranslation of the net assets of the overseas operations into euro.

Share premium

The share premium account is the amount received for shares issued in excess of their nominal value, netof share issuance costs.

Share-based payments reserve

The Share-based payments reserve is the credit arising on share-based payment charges in relation to theCompany’s share and share option schemes, net of the cost of EBT shares utilised for employee shareschemes less any related cash proceeds.

Shares to be issued

For deferred consideration which is to be provided for by the issue of a fixed number of shares at a future
defined date, where there is no obligation on Keywords to offer a variable number of shares, the deferredconsideration is classified as an Equity Arrangement and the value of the shares is fixed at the date of theacquisition.

Merger reserve

The merger reserve was initially created following the Group reconstruction, when Keywords Studios plc
acquired the Keywords International Limited group of companies.
When the Group uses Keywords Studios plc shares as consideration for the acquisition of an entity and has
secured at least a 90% equity holding in the acquisition, the value of the shares in excess of the nominal
value (net of share issuance costs) is also recorded within this reserve, in line with S612 of the Companies
Act 2006.
Within Merger reserve are balances related to the share premium on the share placements in 2015 and2020, of €14.4m and €109.5m respectively, both completed via a cash box structure, with the Company
acquiring the net proceeds via a share-for-share exchange. In both cases, the share premium on theissuance of new shares was credited to Merger reserve (in accordance with S610 of the Companies Act
2006). At the time of the placements, the proceeds were not allocated to a specific acquisition or specificpurpose, and thus, amounts totalling €123.9m included in the Merger reserve are considered distributable.

43

23 Share Incentive Schemes
In July 2013, at the time of the IPO, a Share Option Scheme and a Long-Term Incentive Plan (“LTIP”) was put in place, while in 2021, the Group
introduced an Employee Share Purchase Plan. The charge in relation to these arrangements is as follows:

2023
€'000
1,354
20,485125
21,964

Share option scheme expense
LTIP option scheme expense
Employee Share Purchase Plan
Share-based payments expense

2022
€'000
2,689
15,888101
18,678Of the total Share-based payments expense, €2,025k relates to Directors of the Company (2022: €1,142k).
Share Option Scheme
Share options are granted to Executive Directors and to permanent employees. The exercise price of the granted options is equal to the market priceof the shares at the time of the award of the options. The Company has no legal or constructive obligation to repurchase or settle the options in cash.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

2023
Average
exercise pricein £ per share
18.78
19.79
14.71
18.99
17.45
25.87

Outstanding at the beginning of the period
Granted
LapsedExercised
Outstanding at the end of the period
Exercisable at the end of the period
Weighted average share price at date of exercise

2022
Average
exercise pricein £ per share
15.65
19.17
7.88
18.78
15.19
23.57

Number ofoptions
1,585,819(125,282)(102,197)
1,358,340
873,025

Number ofoptions
2,423,568(133,323)(704,426)
1,585,819
481,319

Summary by year
Year of Option
Exercise price
Outstanding at the beginning of theperiodGranted
LapsedExercised
Outstanding at the end of the period
Exercisable at 31 December 2023
Exercisable 2024
Exercisable 2025
Exercisable 2026
Exercisable 2027

2016
£2.54

2017
£7.76

2018
£17.102019£15.882020£15.932021£25.48

2022
-

2023
-

14,339(6,938)(7,401)-

41,550(6,800)34,75034,750-151,519(22,845)
128,674
128,674-

320,650(9,500)(36,428)
274,722274,722-546,350(48,427)(28,723)
469,200
280,700
188,500-

511,411(60,417)450,994
154,179
148,408
148,407
-

-

-

Total

1,585,819(125,282)(102,197)
1,358,340
873,025
336,908
148,407-

The inputs into the Black-Scholes model, used to value the options, are as follows:Year of Option
Weighted average share price (£)
Weighted average exercise price (£)
Fair value at measurement date (€)
Average expected life
Expected volatility
Risk-free rates
Average expected dividend yield
Weighted average remaining life of
options in months

2016
£2.54
£2.54
€0.40
4 Years
27.17%
0.58%
0.55%

2017
£7.75
£7.76
€1.13
4 Years
24.79%
0.16%
0.21%

2018
£17.22£17.10€3.79
4 Years
35.87%
0.89%
0.10%

2019
£16.09£15.88€5.72
4 Years
45.23%
0.81%
0.10%

2020
£16.00£15.93€6.06
4 Years
50.15%
0.07%
0.10%

2021
£26.42£25.48€9.32
4 Years
47.70%
0.15%
0.10%

2022
-

2023
-

-

-

-

-

4

16

-

-

Weighted
average

7

Expected volatility was determined by reference to KWS volatility. The expected life used in the model has been adjusted based on management’s
best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

44

Long-term Incentive Plan Scheme
LTIP share awards are subject to KWS performance versus the designated share index over a three-year period.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

2023
Average
exercise pricein £ per share
0.01
0.01
0.01
0.01
0.01
0.01
21.96

Outstanding at the beginning of the period
Granted
LapsedExercised
Outstanding at the end of the period
Exercisable at the end of the period
Weighted average share price at date of exercise

2022
Average
exercise pricein £ per share
0.01
0.01
0.01
0.01
0.01
0.01
24.73

Number ofoptions
3,648,173
720,680(124,047)(615,373)
3,629,433
1,276,229

Number ofoptions
3,704,898
901,690(130,241)(828,174)
3,648,173
741,212

Summary by year

Year of Option
Exercise price
Outstanding at the beginning of
the period
Granted
LapsedExercised
Outstanding at the end of theperiodExercisable at 31 December 2023
Exercisable 2024
Exercisable 2025
Exercisable 2026

2016
£0.01

2017
£0.01

2018
£0.01

2019
£0.01

2020
£0.01

2021
£0.01

2022
£0.01

2023
£0.01

Total

21,688(21,688)

44,743(14,000)

186,000(51,572)

488,781(169,738)

1,170,790(25,400)(353,375)

845,307(49,500)(2,500)890,864(41,750)(2,500)720,680(7,397)-3,648,173
720,680(124,047)(615,373)-

30,74330,743-

134,428
134,428-

319,043
319,043-

792,015
792,015-

793,307793,307-846,614846,614-713,283
713,2833,629,433
1,276,229
793,307846,614713,283

The inputs into the Monte Carlo binomial model, used to value the options, are as follows:Year of Option
Weighted average share price (£)
Weighted average exercise price (£)
Fair value at measurement date (€)
Average expected life
Expected volatility
Risk-free rates
Weighted average remaining life of
options in months

2016
£2.56
£0.01
€1.74
3 Years
27.11%
0.54%

2017
£7.75
£0.01
€4.96
3 Years
24.79%
0.16%

2018£17.24£0.01€11.83
3 Years
35.87%
0.89%

2019£16.05£0.01€13.98
3 Years
45.26%
0.81%

2020£16.00£0.01€13.28
3 Years
50.15%
0.07%

2021£26.42£0.01€16.73
3 Years
47.70%
0.13%

2022£22.31£0.01€15.70
3 Years
41.22%
1.59%

2023£22.46£0.01€21.02
3 Years
38.05%
3.58%

-

-

-

-

-

4

17

29

Weighted
average

11

Expected volatility was determined by reference to KWS share price volatility. The expected life used in the model has been adjusted based on
management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. As any dividends earned
are to be reinvested into the business, the impact of dividends has been ignored in the calculation of the LTIP share option charge.
LTIPs vest on the third anniversary of the grant, if the market performance criteria are met. LTIPs must be exercised before the seventh anniversaryof the grant.

45

Salary Shares
Conditional awards under the rules of the LTIP Plan (“Salary Shares”), are issued to certain employees and Directors, where the only vesting
condition is continuous service.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

Outstanding at the beginning of the period
Granted
LapsedVestedOutstanding at the end of the period

2023
Average
exercise pricein £ per share
0.01
0.01
0.01
0.01
0.01

2022
Average
exercise pricein £ per share
0.01
0.01
0.01
0.01
0.01

Number ofoptions259,623
622,627(31,509)(8,150)842,591

Number ofoptions
26,738
237,676(953)(3,838)259,623

Summary by year

Year of Option
Exercise price
Outstanding at the beginning of theperiodGranted
LapsedVestedOutstanding at the end of the period
Vesting 2024
Vesting 2025
Vesting 2026

2021
£0.01

2022
£0.01

2023
£0.01

Total

24,147(953)
23,19423,194-

235,476(22,105)(7,197)206,174
203,635
2,539-

622,627(9,404)
613,223
573,342
39,881

259,623
622,627(31,509)(8,150)842,591
226,829575,881
39,8812021£27.40£0.01€32.08
3 Years2022£22.41£0.01€26.47
2 Years2023£22.08£0.01€25.41
3 Years8

523

Details of the awards by year are as follows:Year of Option
Weighted average share price (£)
Weighted average exercise price (£)
Fair value at measurement date (€)
Average expected life
Weighted average remaining life of
options in months

Weighted
average1846

24 Financial Instruments and Risk Management
Interest Rate Risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group’s income andoperating cash flows are substantially independent of changes in market interest rates. The management monitors interest rate fluctuations on acontinuous basis and acts accordingly.
Where the Group has a significant amount of surplus cash, it invests in higher earning interest deposit accounts. Due to interest rate conditions, theinterest rates for short-term deposits are at similar levels to those achieved for longer terms.
The effect of a strengthening or a weakening of 1% in interest rates charged during the reporting period on the interest expense would have resulted
in the following pre-tax profit / (loss) impact for the year:
1%
1%
1%
1%
Strengthening
Weakening
Strengthening
Weakening
2023
2023
2022
2022
€'000
€'000
€'000
€'000
Interest expense
1,274(1,274)
In 2022, there were no drawdowns on the RCF, therefore any strengthening or weakening of interest rates would have had no impact.
Credit Risk
The Group’s main financial assets are cash and cash equivalents, as well as trade and other receivables which represent the Group’s maximum
exposure to credit risk in connection with its financial assets.
Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial
assets on hand at the reporting date. Customer credit risk is managed at appropriate Group locations according to established policies,
procedures and controls. Customer credit quality is assessed and credit limits are established where appropriate. Outstanding customer
balances are regularly monitored and a review for indicators of impairment (evidence of financial difficulty of the customer, payment default,
breach of contract, etc.) is carried out at each reporting date. Significant balances are reviewed individually while smaller balances are groupedand assessed collectively. Receivables balances are unsecured and non-interest-bearing.
Credit risk arises on trade receivables and accrued income from contracts with customers (reported within other receivables). Trade and otherreceivables are carried on the Consolidated statement of financial position net of provisions.
Trade Receivables
The trade receivables balances disclosed comprise a large number of customers spread across the Group’s activities and geographies withbalances classified as “Not past due” representing 78.9% of the total trade receivables balance at the balance sheet date (2022: 73.0%).
The ageing of trade receivables can be analysed as follows:

At 31 December 2023
At 31 December 2022

Total
€'000
89,94081,563

Not past due€'000
70,99559,532

1-2 months
past due€'000
18,945
16,803More than 2months past
due
€'000
5,228

2023
€'000
3,449

2022
€'000
1,768

531
275
331
(337)
4,249

1,733
79
(131)
3,449

A provision for doubtful debtors is included within trade receivables and can be reconciled as follows:

Provision at the beginning of the year
Impairment of financial assets (trade receivables) charged to administration
expensesForeign exchange movement in the year
Recognition on acquisition of subsidiaries
Utilised
Provision at the end of the year

47

Trade receivables loss allowance is estimated using a practical expedient to arrive at lifetime expected credit losses. Overdue receivables areevaluated to calculate an expected credit loss using a historical credit loss experience of 1.0% (2022: 1.0%). Taking into account internal and external
information, the historical credit loss experience may be adjusted where it is determined that there has been a significant increase in credit risk.
Where a receivable is credit impaired, the impairment is recognised immediately.

Trade receivables grossCredit impaired
Expected credit losses
At 31 December 2023

Total
€'000
94,189(3,307)(942)
89,940Trade receivables grossCredit impaired
Expected credit losses
At 31 December 2022

Total
€'000
85,012(2,598)(851)
81,563

Not past due€'000
71,712(717)
70,995

1-2 months
past due€'000
19,680(538)(197)
18,945More than 2months past
due
€'000
2,797
(2,769)(28)-

Not past due€'000
60,134(602)
59,532

1-2 months
past due€'000
17,175(200)(172)
16,803More than 2months past
due
€'000
7,703
(2,398)(77)
5,228

Accrued income from contracts with customers
Accrued income from contracts with customers comprise a large number of projects in process spread across the Group’s activities andgeographies, with balances classified as aged “0-30 days” representing 67.4% of the balance at the balance sheet date (2022: 76.6%).
The ageing of accrued income from contracts with customers can be analysed as follows:

At 31 December 2023
At 31 December 2022

Total
€'000
18,307
13,2200-30 days€'000
12,34010,12431-60 days
€'000
4,134
3,096

60+ days
€'000
1,833
-

Accrued income from contracts with customers loss allowance is estimated using a practical expedient to arrive at lifetime expected credit losses
using a historical credit loss experience of 1.0% (2022: 1.0%). Taking into account internal and external information, the historical credit loss
experience may be adjusted where it is determined that there has been a significant increase in credit risk. Where a receivable is credit impaired,
the impairment is recognised immediately.

Accrued income from contracts with customers grossCredit impaired
Expected credit losses
At 31 December 2023

Total
€'000
19,651(1,147)(197)
18,3070-30 days€'000
12,465(125)
12,34031-60 days
€'000
4,176
(42)
4,134

60+ days
€'000
3,010
(1,147)(30)
1,833

Accrued income from contracts with customers grossCredit impaired
Expected credit losses
At 31 December 2022

Total
€'000
16,652(3,265)(167)
13,2200-30 days€'000
10,227(103)
10,12431-60 days
€'000
3,897
(762)
(39)
3,096

60+ days
€'000
2,528
(2,503)(25)-

Accrued income from contracts with customers represent mainly contract assets in process and related items. Excluding movements in theprovision, the movement in the year comprises transfers in and out as items are accrued and subsequently invoiced to customers, with nosignificant amounts recognised on the acquisition of subsidiaries.
Related Party Receivables
There were no related party receivables at the end of either period presented.

48

Currency Risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The foreign exchange riskarises for the Group where assets and liabilities arise in a currency other than the functional currency of the entity.
The Group’s policy, where possible, is for Group entities to manage foreign exchange risk at a local level by matching the currency in which revenue
is generated with the expenses incurred and by settling liabilities denominated in their functional currency with cash generated from their own
operations in that currency. Where Group entities have liabilities denominated in a currency other than their functional currency (and haveinsufficient reserves of that currency to settle them), cash already denominated in that currency will, where possible, be transferred from elsewhere
within the Group.
The Group is predominantly exposed to currency risk on the balances held within working capital across the Group and the exposure is concentrated
in the movement of the US dollar, sterling and Canadian dollar against the euro. The effect of a strengthening or weakening of 10% in thosecurrencies against the euro at the reporting date on the working capital balances would, all other variables held constant, have resulted in thefollowing pre-tax profit / (loss) impact for the year:
2023
€'000
10%

2023
€'000
10%
Weakening

2022
€'000
10%
Strengthening

2022
€'000
10%
Weakening(4,617)
(254)
(261)

5,981
365
591

(4,894)
(299)
(483)

Strengthening
4,182
174
301

US dollar to euro
Sterling to euroCanadian dollar to euro

Total Financial Assets and Liabilities
The carrying amount of the financial assets and liabilities shown in the Consolidated and Company Statements of financial position are stated atamortised costs, with the exception of contingent consideration held at fair value.
Liquidity Risk
Liquidity risk arises from the Group’s management of working capital and the financial charges on its debt instruments.
The Group’s policy is to ensure that it will have sufficient cash to allow it to meet its liabilities when they become due. The Directors consider
liquidity risk is mitigated by the strong working capital position, with €239.8m of current assets, including cash of €59.9m available to settle
liabilities as they fall due.
The following are the contractual maturities (representing undiscounted contractual cash flows) of the Group’s financial liabilities:

At 31 December 2023
Trade payables
Deferred and contingent consideration (i)Other payables
Loans and borrowings
Loan interest
Lease liabilities
Total

At 31 December 2022
Trade payables
Deferred and contingent consideration (i)Other payables
Loans and borrowings
Loan interest
Lease liabilities
Total

(i)

Carrying
value
Total

Contractual cash flows
Total

€'000
14,29455,825
112,147
127,380
46,972356,618€'000
14,294
89,347112,147
127,380
26,41850,609420,195

Carrying
value
Total

Total

€'000
15,87863,253
94,41051
42,519216,111€'000
15,87866,598106,41051
244,548233,487

Within 1
year€'000
14,29453,653112,147
8,806
15,164
204,064

1-2 years

2-5 years€'000
33,764
8,806
11,11753,687€'000
1,930
127,3808,806
19,428
157,544Over 5
years
€'000
4,900
4,900

Contractual cash flows
Within 1
year€'000
15,87845,115
94,41045
212,740168,190

1-2 years

2-5 years€'000
20,031
7,000
6
9,267
36,304

€'000
1,452
5,000
17,224
23,676

Over 5
years
€'000
5,317
5,317

Deferred and contingent consideration at 31 December 2023 has arisen on business combinations, and is based on contracted amounts to be
paid in the future to sellers under share purchase agreements. In general, in order for contingent consideration to become payable, pre-defined
profit and / or revenue targets must be exceeded. On an undiscounted basis, the Group may be liable for deferred and contingent
consideration up to a maximum of €89.3m. For further details see note 17.

49

25 Capital Management

Group
Loans and borrowings (note 18)
Less: cash and cash equivalents
Net debt / (net cash) position
Total equity
Net debt / (net cash) to capital ratio

2023
€'000
127,380(59,862)
67,518599,039
11.3%

2022
€'000
51
(81,886)(81,835)
557,091(14.7)%The Group manages capital by monitoring debt to capital and net debt ratios. This debt to capital ratio is calculated as net debt to total equity. Net
debt is calculated as loans and borrowings (as shown in the Consolidated statement of financial position) less cash and cash equivalents. The
liquidity risk and cash management for the Group is managed centrally by the Group Treasury function. Group Treasury manage bank balances
centrally, and monitors the credit rating and stability of the institutions the Group banks with. The Board receives projections on a monthly basis as
well as information regarding cash balances. The Group's strategy is to preserve a strong cash base and secure access to finance at reasonable costby maintaining a good credit rating.
26 Related Parties and Shareholders
The details of key management compensation (being the remuneration of the Directors) are set out in note 10.

50

27 Business Combinations

Digital MediaManagement
€'000

The
Multiplayer
Group
€'000

Other
acquisitions
€'000

2023
€'000

2022
€'000

608
5,714
3,321
(23)
14,296(1,340)(1,120)(5,714)
15,742

2,492
54
6,800
(308)
9,025
(2,928)(4,240)(54)
10,841

362
383
2,702
3,628
(787)
(383)
5,905

3,462
6,151
12,823(331)
26,949(5,055)(5,360)(6,151)
32,488

422
580
6,145
5,401
(4,762)(3,461)
(580)
3,745

22,148(4,994)
17,15432,89655,22988,125100%

21,200(4,982)
16,21827,05968,677
95,736
100%

2,511
5,013
(1,127)
6,397
12,30228,09540,397100%

45,8595,013(11,103)
39,76972,257152,001
224,258

34,69525,914
15,393(13,341)
62,661
66,40670,482
136,888

Details of purchase consideration and outflows fromcurrent acquisitions
Cash
Equity instruments
Deferred cash
Deferred consideration contingent on performance
Shares to be issued
Total purchase consideration

65,677
9,311
13,137
88,12593,7292,007
95,73627,923
1,507
914
9,732
321
40,397

187,329
10,8182,921
22,869321
224,258

92,895
8,993
28,957
6,043
136,888

Related acquisition costs charged to the Consolidated
statement of comprehensive income:

560

1,470

315

2,345

1,177

Number of shares:
Shares issued on acquisition
Fixed number of shares to be issued

301,170--

53,482
13,118354,652
13,118135,468
87,738Net cash outflow arising on acquisition:
Cash paid in the period
Less: cash and cash equivalent balances transferred
Net cash outflow arising on acquisition

65,677(14,296)
51,381

93,729(9,025)84,70427,923(3,628)24,295

187,329(26,949)
160,380

92,895(5,401)87,494

Details of pro forma revenues and profitability of current
acquisitions
Pre-acquisition revenue in H1
Pre-acquisition revenue in H2
Pre-acquisition revenue
Post-acquisition revenue
Pro forma revenue
Pre-acquisition profit / (loss) before tax
Post-acquisition profit / (loss) before tax
Pro forma profit / (loss) before tax

6,413
6,413
19,16525,578
1,650
2,154
3,804

19,64819,453
39,101
1,165
40,266
7,869
290
8,159

5,644
5,644
18,89424,538
136
5,144
5,280

31,705
19,45351,15839,224
90,382
9,655
7,588
17,243

19,32912,07031,3999,106
40,505
1,601
3,440
5,041

Details of goodwill and the fair value of net assets acquired
Book value:
Property, plant and equipment
Right of use assets
Trade and other receivables - gross
Bad debt provision
Cash and cash equivalents
Trade and other payables
Deferred income
Lease liabilities
Book value of identifiable assets and liabilities acquired
Fair value adjustments:
Identifiable intangible assets - Customer relationships
Identifiable intangible assets - Intellectual property
Deferred tax assets
Deferred tax liabilities
Total fair value adjustments
Net assets acquired
Goodwill from current year acquisitions
Total purchase consideration% Share capital acquired

51

Disclosures required by IFRS 3 Business Combinations are provided separately for those individual acquisitions that are considered to bematerial, and in aggregate for individually immaterial acquisitions. Acquisitions are considered individually material if the impact on the Group’s
Revenue and Adjusted Profit Before Tax measures (on an annualised basis) is greater than 5%*, or the impact on goodwill is greater than 10% of
the closing balance for the period. Two of the business combinations completed during the prior period were considered individually material
and therefore warrant separate disclosure.
During the period, the Group completed five acquisitions, 47 Communications, Digital Media Management, Hardsuit Labs, Playboss and The
Multiplayer Group purchasing 100% of these businesses. The aggregate amounts recognised in respect of the identifiable assets acquired andliabilities assumed on acquisitions completed in the period are set out in the table above. Details of the purchase consideration and otherinformation relevant to the evaluation of the financial effect of the acquisitions are also presented.
Total purchase consideration of €224.3m includes amounts attributable to Digital Media Management €88.1m, Hardsuit Labs €15.7m, The
Multiplayer Group €95.7m and other acquisitions €24.8m, while Goodwill from current year acquisitions of €152.0m includes amounts related
to Digital Media Management €55.2m, Hardsuit Labs €12.8m, The Multiplayer Group €68.7m and other acquisitions of €15.3m. Identifiableintangible assets - Customer relationships of €45.9m includes amounts attributable to Digital Media Management €22.2m and The Multiplayer
Group €21.2m. The consideration and goodwill for Playboss is deemed immaterial to the accounts.
Please note that Total purchase consideration excludes €22.9m of Deferred and contingent consideration related to continuous employment,
where the purchase agreement includes deferred consideration contingent on both pre-defined profit and / or revenue targets being
exceeded and which is also tied to the retention of key staff, that are considered post-acquisition expenses under IFRS 3 (note 17).
The main factors leading to the recognition of goodwill on the acquisitions are the presence of certain intangible assets in the acquired entities,
which are not valued for separate recognition. These include expertise in the acquired entities, enhancing and growing our service capabilities,
broadening our service offering, and extending our geographical footprint, further building out our global platform.
The goodwill that arose from business combinations completed in the period that is expected to be deductible for tax purposes was €22.2m(for which a deferred tax asset has been recognised of €5.0m).
*The Group reports a number of alternative performance measures (“APMs”), including Pro forma revenue and Adjusted Profit Before Tax, to present the financial
performance of the business, that are not GAAP measures as defined under IFRS. A reconciliation of these measures to the relevant GAAP measure is presented in
the APM’s section.

52

28 Subsidiaries
The results and financial position of all the subsidiaries are included in the consolidated financial statements. Details of the Company’s direct andindirect subsidiaries as at 31 December 2023 are set out below:

Country ofincorporation
USA
USA
CanadaUK
Romania
UK
USA
UK
USA
UK
UK
UK
UK
UK
UK
CanadaUSA
Hong Kong
India

Date ofincorporation /acquisition
24-Nov-20
31-Jan-23
04-Dec-19
17-Aug-18
11-Aug-21
17-Feb-14
17-Feb-14
17-Aug-18
08-Jun-18
22-Apr-21
22-Apr-21
25-Jun-20
07-Apr-18
30-Aug-18
19-Oct-17
11-Jun-19
29-Mar-23
19-May-17
09-Oct-14

Electric Square Limited
Fire Without Smoke Inc
Fire Without Smoke LTD
Forgotten Empires LLC
Forgotten Software S.L.U
GameSim Inc.
g-Net Media, Inc.
Hardsuit Labs, Inc
Heavy Iron Studios, Inc
Helpshift Inc
Helpshift Information Technology (Shanghai) Co.
Ltd
Helpshift Technologies Private Limited

UK
USA
UK
USA
Spain
USA
USA
USA
USA
USA
China

17-Aug-18
29-May-18
29-May-18
28-Jul-22
28-Jul-22
16-May-17
24-Nov-20
10-May-23
12-Jan-21
15-Dec-22
15-Dec-22

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

India

15-Dec-22

100%

Keywords UK Limited (formerly Helpshift UK Ltd)High Voltage Software, Inc.
HVS Nola LLC
Ichi LTD
Indigo Pearl Limited
Itsy SGD Limited
Jinglebell S.r.l.
Jurango Pty Limited ~~Keywords (Shanghai) Information Technology
LimitedKeywords Asia Private Limited
Keywords Australia Holdings Limited
Keywords Australia Pty Limited ~Keywords Canada Holdings Inc.
Keywords do Brasil Localização e Tradução Ltda

UK
USA
USA
UK
UK
UK
Italy
Australia
China

15-Dec-22
14-Dec-20
14-Dec-20
26-Nov-19
15-Dec-20
17-Aug-18
10-Dec-20
20-Dec-21
02-Apr-15

100%
100%
100%
100%
100%
100%
100%
85%
100%

Singapore
UK
Australia
CanadaBrazil15-Mar-16
17-Mar-21
18-Mar-21
27-Oct-17
18-Jan-15

100%
100%
85%
100%
100%

Keywords Germany Holdings GmbH
Keywords International Co., Limited.
Keywords International Limited *Keywords International Pte. Limited
Keywords International, Inc.
Keywords Sperasoft LLC
Keywords Studios B.C., Inc.
Keywords Studios d.o.o. Beograd

GermanyJapan
IrelandSingapore
USA
Armenia
CanadaSerbia06-Sep-19
30-Nov-10
13-May-98
24-Apr-14
26-Sep-12
07-Apr-22
27-Oct-17
18-May-22

100%
100%
100%
100%
100%
100%
100%
100%

Keywords Studios France SAS
Keywords Studios India Private Limited

FranceIndia

08-Jun-16
17-Feb-14

100%
100%

Keywords Studios Italy S.R.L.
Keywords Studios Korea Corporation
Keywords Studios Los Angeles, Inc.
Keywords Studios Malta Limited
Keywords Studios México, S. de R.L. de C.V.

Italy
South Korea
USA
Malta
Mexico08-May-14
11-Jan-21
08-May-14
04-May-22
16-Jul-15

100%
100%
100%
100%
100%

Keywords Studios Netherlands B.V.
Keywords Studios Poland Spolka z.o.o.
Keywords Studios QC-Games Inc.
Keywords Studios QC-Interactive Inc.
Keywords Studios QC-Tech Inc.
Keywords Studios Romania S.R.L.

Netherlands
PolandCanadaCanadaCanadaRomania

05-Feb-19
04-Feb-21
17-Feb-14
16-Nov-16
06-Jan-15
15-Jun-21

100%
100%
100%
100%
100%
100%

Keywords Studios Spain SLU
Keywords Studios Texas, LLC
Keywords Studios Unlimited Company *Keywords Studios US Inc
Keywords Treasury Holdings Limited
Keywords UK Holdings Limited
Keywords US Holdings Inc.

Spain
USA
IrelandUSA
Ireland
UK
USA

16-Jul-15
22-Jan-20
27-Mar-18
24-Oct-17
30-Nov-22
28-Mar-18
23-Oct-17

100%
100%
100%
100%
100%
100%
100%

Name
3455 Productions, LLC
47 Communications LLC
9409-2954 Québec Inc.
Alset LTDAMC RO Studios S.R.L
Babel Media Limited *Babel Media USA, Inc.
Bitsy SG Limited
Blindlight, LLC
Climax Development Limited
Climax Studios Limited
Coconut Lizard LTD
Cord Worldwide LTD
d3t Development Limited
d3t LTD
Descriptive Video Works Inc.
Digital Media Management Inc
Eastern New Media Limited
Edugame Solutions Private Limited

Ownership ^
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Registered office
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
5455 Wilshire Blvd, 22nd Fl, Los Angeles, CA 90036, USA
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
Stirbei Voda 36, etaj 1, sector 1, Bucharest, Romania
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
1111 South Flower Street, Suite 101, Burbank, CA 91502, USA
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
400-725 Granville Street, PO Box 10325, Vancouver BC V7Y 1G5, Canada
6555 Barton Ave., Suite 190 Los Angeles, CA 90038, USA
4404, 44/F Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong
3rd floor, Vardhman Orchard Plaza, Plot No 4, LSC, West Enclave, Pitampura, New Delhi,
110034, India
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
8730 Cincinnati Dayton Rd. #1072, West Chester, OH 45071, USA
nº 1 - La Cala Del Moral Rincon De La Victoria calle Murillo
13501 Ingenuity Drive, Suite 310, Orlando, FL 32826, USA
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
4025 Delridge Way SW, #210, Seattle 98106, United States
1600 Rosecrans Ave., Bldg 7 Ste 300, MBS Media Campus, Manhattan Beach CA, 90266, USA
343 Sansome Street, Suite 500, San Francisco, California, 94104, USA
Southwest Area, 3rd Floor, No. 2123 Pudong Avenue, Shanghai, China
3rd floor, Vardhman Orchard Plaza, Plot No 4, LSC, West Enclave, Pitampura, New Delhi,
110034, India
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
2345 Pembroke Ave., Hoffman Estates, IL 60169, USA
201 St. Charles Ave., Suite 2220, New Orleans, LA 70170, USA
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
Via Marco d’Oggiono 12, 20123, Milan, Italy
29 Thornton Crescent, Mitcham, VIC 3132, Australia
Room 701, Building 5, No.860 Dong Ti Yu Hui Road, Hongkou District, Shanghai, China
20 Kallang Avenue, #06-6A, Lobby B, Pico Creative Centre, 339411, Singapore
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
12 Spring Street, Fitzroy, Victoria, 3065, Australia
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
Rua Professor Aprígio Gonzaga, 35 – 7º andar - São Judas - São Paulo - SP CEP: 04303-000,
BrazilMoriz-Seeler-Strasse 5-7, Franz Ehrlich Haus, 12489, Berlin, Germany
1-22-19 Izumi, Suginami-ku, Tokyo, 168-0063 Japan
Whelan House, South County Business Park, Leopardstown, Dublin 18, D18 T9P8, Ireland
20 Kallang Avenue, #06-6A, Lobby B, Pico Creative Centre, 339411, Singapore
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
18/1 Vardanants str., 3rd floor, Yerevan 0010, Armenia
2700 Commerce Place 10155 - 102 Street, Edmonton, AB, T5J 4G8
Belgrade, BULEVAR MIHAJLA PUPINA 10L, floor 9, Belgrade-New Belgrade, NEW BELGRADE,
11070, Serbia
59 Boulevard Exelmans, 75016 Paris, France
3rd floor, Vardhman Orchard Plaza, Plot No 4, LSC, West Enclave, Pitampura, New Delhi,
110034, India
Via Egadi 2, Milano, MI, 20144, Italy
16th Floor, Gangnam Building, 1321-1, Seocho-dong, Seocho-gu, Seoul 137-070, South Korea
1115 Flower Street, Burbank, CA 91502, USA
Level 3, Valletta Buildings, South Street, Valletta VLT 1103, Malta
Torrente #75, Colonia Ampliación Alpes, Del. Álvaro Obregón, CP. 01710, Ciudad de México,
MéxicoVan Limburg Stirumstraat 19, Hilversum 1215HP, The Netherlands
11 Ul. Na Zjezdzie, Krakow 30-527, Poland
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
6-8 Corneliu Coposu Bvd., Unirii View Building, office 103, 1st floor, 3rd district, Bucharest,
Romania
Julián Camarillo 6A, 3B, 28037 Madrid, Spain
7800 Shoal Creek Blvd. Suite 240S, Austin, Texas 78757, USA
Whelan House, South County Business Park, Leopardstown, Dublin 18, D18 T9P8, Ireland
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
Whelan House, South County Business Park, Leopardstown, Dublin 18, D18 T9P8, Ireland
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA

53

Keywords Ventures Limited
Laboratorio Comunicazione S.r.l.
Laced Music LTD
Laced Publishing Limited
Lakshya Digital Private Limited *

UK
Italy
UK
UK
India

06-Apr-18
04-Nov-22
07-Apr-18
07-Apr-18
09-Oct-14

100%
100%
100%
100%
100%

Lakshya Digital Singapore Pte. Limited
Liquid Development, LLC
Liquid Violet LTD *Lonsdale Miller Limited
Maverick Media Limited
Mighty Developments Pty Limited ~~Mighty Games Group Pty Limited ~~Mighty Games Productions Pty Limited ~~Player Research LTD
Smoking Gun Interactive Inc
Snowed In Studios, Inc
Sperasoft Poland Spólka z.o.o.

Singapore
USA
UK
UK
UK
Australia
Australia
Australia
UK
CanadaCanadaPoland09-Oct-14
19-Aug-15
15-Jan-14
15-Dec-20
27-Aug-20
03-Aug-22
03-Aug-22
03-Aug-22
26-Oct-16
05-Oct-22
19-Jul-18
13-Dec-17

100%
100%
100%
100%
100%
85%
85%
85%
100%
100%
100%
100%

Sperasoft Studios LLC
Sperasoft, Inc.
SperaSystems LLC
SPOV Limited
Strongbox Limited
Studio Gobo Limited
Sunny Side Up Creative Inc.
Synthesis Deutschland GmbH *Synthesis Global Solutions SA *Tantalus Media Pty Limited ~The Multiplayer Games Group (Spain) S.R.L
The Multiplayer Group (Canada) Inc.
The Multiplayer Group Ltd
The Sound Lab LLC
The Trailerfarm Limited
TV+SYNCHRON Berlin GmbH
Waste Creative Limited
Waste Holdings Limited
Wicked Witch Software Pty Limited ~~Wizcorp Inc.
Xcelerator Machine Translations Limited
Xloc, Inc.

RussiaUSA
USA
UK
Seychelles
UK
CanadaGermany
Switzerland
Australia
Spain
CanadaUK
USA
UK
Germany
UK
UK
Australia
Japan
IrelandUSA

13-Dec-17
13-Dec-17
13-Dec-17
16-Feb-17
19-May-17
17-Aug-18
03-Jan-19
12-Apr-16
12-Apr-16
18-Mar-21
16-Dec-23
16-Dec-23
16-Dec-23
29-Sep-22
13-Sep-18
01-Oct-19
16-Dec-21
16-Dec-21
20-Dec-21
18-Apr-19
12-Dec-19
08-May-17

100%
100%
100%
100%
100%
100%
100%
100%
100%
85%
100%
100%
100%
100%
100%
100%
100%
100%
85%
100%
100%
100%

4th Floor, 110 High Holborn, London, WC1V 6JS, UK
Via Egadi 2, Milano, MI, 20144, Italy
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
3rd floor, Vardhman Orchard Plaza, Plot No 4, LSC, West Enclave, Pitampura, New Delhi,
110034, India
20 Kallang Avenue, #06-6A, Lobby B, Pico Creative Centre, 339411, Singapore
411 SW 2nd Ave Ste 300, Portland, OR 97204, USA
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
422 Brunswick Street, Fitzroy, VIC 3065, Australia
422 Brunswick Street, Fitzroy, VIC 3065, Australia
422 Brunswick Street, Fitzroy, VIC 3065, Australia
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
1100-333 Seymour St, Vancouver, BC V6B 5A6, Canada
400-981 Wellington Street West, Ottawa, Ontario, K1Y 2Y1, Canada
Kraj Polska, woj. Małopolskie, powiat Kraków, miejsc. Kraków, ul. Na Kozłóce 27 30-664
Kraków, Poland
196084, Russia, Saint-Petersburg, Kievskaya street, 5 - building
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
2033 Gateway Pl Ste 500 San Jose, CA 95110-3712, USA
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
306 Victoria House, Victoria, Mahe, Seychelles
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
Holstenkamp 46 A, Bahrenfeld, 22525 Hamburg, Germany
Corso Elvezia 16, 6900 Lugano, Ticino, Switzerland
12 Spring Street, Fitzroy, Victoria, 3065, Australia
Calle Ferraz 11, 2nd Floor, left, Madrid, 28008
2700-10155, 102 Street NW, Edmonton, Alberta, T5J 4G8.
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
3830 Monte Villa Parkway, Suite 200, Bothell, WA 98021
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
Moriz-Seeler-Strasse 5-7, Franz Ehrlich Haus, 12489, Berlin, Germany
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
4th Floor, 110 High Holborn, London, WC1V 6JS, UK
Level 5, 990 Whitehorse Road, Box Hill, Melbourne, VIC 3128, Australia
1-22-19 Izumi, Suginami-ku, Tokyo, 168-0063 JapanDCU Alpha Innovation Campus, Old Finglas Road, Glasnevin, Dublin 11, D11 KXN4, Ireland
8801 Fast Park Drive, Suite 301, Raleigh, NC 27617, USA* Indicates a direct subsidiary (all other holdings are indirect, being subsidiaries of various intermediate group holding companies)^ Proportion of voting rights and ordinary share capital ultimately held by Keywords Group~ A combination of put and call options are in place requiring the sellers to sell, or the Group to buy the remaining 15% shareholding three years from acquisition. The Group has accounted for the acquisition as if a
100% interest was acquired on acquisition (see note 3).
~~ Wholly owned subsidiary of Keywords Australia Pty Limited. The Group has accounted for the company as if a 100% interest was held (see note 3).

Post-acquisition, the Group reviews entities to streamline activities and close any dormant entities acquired or re-structured entities. Restructuring
details are set out below:
Name
PT Limitless Indonesia

Country ofincorporation
Indonesia

Date ofincorporation /acquisition
19-May-17

Ownership
100%

Date of restructuring
23-Aug-23

Re-structuring
details
Dissolved

29 Significant Events and Events after the Reporting Date
Crisis in Ukraine
Since the crisis in Ukraine began in 2022, our priority has been to support our personnel and freelance suppliers located in the affected area, while
also contributing to broader humanitarian efforts in the region. As our Group had no business operations in Ukraine, the crisis primarily impacted
our Game Development teams in Russia, as well as our collaboration with several freelance suppliers based in Ukraine.
Through this period, we have continued to work with our customers, supporting their preferences for where their work should be performed, while
also remaining focused on mitigating any potential business interruption or other risks associated with our activities in Russia. As a result, thevolume of work produced in Russia has continued to reduce over time and we have been scaling down our operations accordingly.
In the period, the Group produced €4.9m of Revenue in Russia, which represents approximately 0.6% of Group revenue, down from 3.8% in 2022.
During the year, we continued to transfer projects supported in Russia to other parts of the Group, as we further ramped up production capacity inthese locations with a combination of employees relocating from Russia and local hires. All production studios located in Russia have now beenclosed. Costs of acquisition and integration includes severance and rationalisation costs of €3.9m associated with ceasing operations in Russia.
The Group has never had significant receivables exposure in Russia, as work produced in Russia was contracted and collected in other territories.
The Group does not have significant amounts of working capital or non-current assets located in Russia. Thus, any exposure to impairment of assets
located in Russia is not considered material.
Events after the Reporting Date
There have been no significant events since the reporting date.

54

Alternative performance measures
The Group reports a number of alternative performance measures (“APMs”) to present the financial performance of the business, that are not
GAAP measures as defined under IFRS. The Directors believe that these measures, in conjunction with the IFRS financial information, provide
the users of the financial statements with additional information to provide a more meaningful understanding of the underlying financial andoperating performance of the Group. The measures are also used in the Group’s internal strategic planning and budgeting processes and forsetting internal management targets.
These measures can have limitations as analytical tools and therefore should not be considered in isolation, or as a substitute for IFRS measures.
APM’s may not be calculated uniformly by all companies and therefore may not be directly comparable with similarly titled measures anddisclosures of other companies. As these measures frequently exclude significant recurring transactions that impact financial performance (e.g.
share-based payments expense), the adjusted measures will typically be higher than the corresponding IFRS measures and should not be
regarded as a complete picture of the Group’s financial performance, which is presented in the Total comprehensive income / (expense) of theGroup.
The principal measures used by the Group are set out below:
Organic revenue growth – Acquisitions are a core part of the Group’s growth strategy. Organic revenue growth measures are used to help
understand the underlying trading performance of the Group excluding the impact of acquisitions. Organic revenue growth is calculated byadjusting the prior year revenues, adding pre-acquisition revenues for the corresponding period of ownership to provide a like-for-likecomparison with the current year, and applying the prior year’s foreign exchange rates to both years, when translating studio results into theeuro reporting currency.
Constant exchange rates (“CER”) – Given the international nature of the Group’s operations, foreign exchange movements can have an impact
on the reported results of the Group when they are translated into the Group’s reporting currency, the euro. In order to understand theunderlying trading performance of the business, revenue is also presented using rates consistent with the prior year in order to provide yearover-year comparability.
Adjusted profit and earnings per share measures – Adjusted profit and earnings per share measures are used to provide management andother users of the financial statements with a clear understanding of the underlying profitability of the business over time. Adjusted profit
measures are calculated by adding the following items back to the equivalent GAAP profit measures:
•

•

•

•

•

Amortisation of intangible assets – Customer relationships and music licence amortisation commences on acquisition, whereas
intellectual property / development costs amortisation commences when the product is launched. These costs, by their nature, canvary by size and amount each year. As a result, amortisation of intangibles is added back to assist with the understanding of theunderlying trading performance of the business and to allow comparability across regions and categories.
Costs of acquisition and integration – The level of acquisition activity can vary each year and therefore the costs associated withacquiring and integrating businesses are added back to assist with the understanding of the underlying trading performance of theGroup.
Share-based payments – The Group uses share-based payments as part of remuneration to align the interests of senior management
and employees with shareholders. These are non-cash charges, and the charge is based on the Group’s share price which can change.
The costs are therefore added back to assist with the understanding of the underlying trading performance.
Foreign exchange gains and losses – The Group does not hedge foreign currency translation exposures. The effect on the Group’s
results of movements in exchange rates can vary each year and are therefore added back to assist with understanding the underlying
trading performance of the business.
Other income – Other income comprises gains on investments or other non-trading income. As the gains have arisen outside thenormal trading activities of the Group, the income has been added back to assist with the understanding of the underlying trading
performance.

Free cash flow measures – The Group aims to generate sustainable cash flow (free cash flow) in order to support its acquisition programme andto fund dividend payments to shareholders. Free cash flow is measured as net cash generated by / (used in) operating activities after capital
expenditure, payments of principal on lease liabilities, interest and tax payments, settlement of deferred consideration related to continuous
employment but before acquisition and integration cash outlay, other income and dividend payments. Adjusted free cash flow is a measure of
cash flow adjusting for capital expenditure that is supporting growth in future periods (represented by capital expenditure in excess ofdepreciation).
Net debt – The Group manages capital by monitoring debt to capital and net debt ratios. Net debt is calculated as loans and borrowings lesscash and cash equivalents, and excludes lease liabilities. The debt to capital ratio is calculated as net debt as a percentage of total equity.
The remainder of this section provides a reconciliation of the APMs with the relevant IFRS GAAP equivalent.

55

Divisional analysis
The following table presents revenue growth by division at both actual exchange rates (“AER”) and constant exchange rates (“CER”). Constantexchange rates are calculated by retranslating current year reported numbers at the corresponding 2022 foreign exchange rates, in order togive management and other users of the financial statements better visibility of underlying trading performance against the prior year.

2023
Revenue
AER
€m
336.1
279.5
164.8
780.4

CreateGlobalize
Engage2023
Revenue
CER
€m
350.5
287.9
171.1
809.5

2022
Revenue
AER
€m
275.5
300.9
114.3
690.7

2023
GrowthAER%
22.0%(7.1)%
44.2%
13.0%

2023
GrowthCER%
27.2%(4.3)%
49.7%
17.2%

Pro forma revenue
Pro forma revenue is calculated by adding pre-acquisition revenues of current year acquisitions to the current year revenue numbers, to illustrate
the size of the Group had the acquisitions been included from the start of the financial year.

2023

CreateGlobalize
EngageRevenue2023
Preacquisition
revenue

2023
Pro forma
revenue

AER

AER

AER

€m
336.1
279.5
164.8
780.4

€m
43.8
1.0
6.4
51.2

€m
379.9
280.5
171.2
831.6

Organic revenue at constant exchange rates
Organic revenue at constant exchange rates is calculated by adjusting the prior year revenues, adding pre-acquisition revenues for thecorresponding period of ownership, and applying the 2022 foreign exchange rates to both years, when translating studio results into the euro
reporting currency.

2022

CreateGlobalize
EngageRevenue
AER
€m
275.5
300.9
114.3
690.7

2022
Preacquisition
revenue
AER
€m
23.2
52.9
76.1

2022
Like forlikerevenue
AER
€m
298.7
300.9
167.2
766.8

2023

2023

Revenue
growthCER€m
51.8(13.0)
3.9
42.7

Revenue
CER
€m
350.5
287.9
171.1
809.5

2023
Organic
revenue
growthCER%
17.3%(4.3)%
2.3%
5.6%

56

Adjusted operating costs
This comprises Administrative expenses as reported in the Consolidated statement of comprehensive income, adding back share-based
payments expense, costs of acquisition and integration, amortisation of intangible assets, depreciation and impairment, and deducting bankcharges.

Calculation
Administrative expenses
Share-based payments expense
Costs of acquisition and integration
Amortisation of intangible assets
Depreciation - property, plant and equipment
Depreciation - right of use assets
Bank charges
Adjusted operating costs
Adjusted operating costs as a % of revenue

Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Note 13
Note 12Note 62023€'000(252,275)
21,964
27,14026,06023,12813,907(724)(140,800)
18.0%

2022
€'000
(196,554)
18,678
8,413
16,81018,365
14,585(662)(120,365)
17.4%

Adjusted operating profit
The Adjusted operating profit consists of the Operating profit as reported in the Consolidated statement of comprehensive income, adjusted
for share-based payments expense, costs of acquisition and integration, and amortisation of intangible assets. In order to present the measureconsistently year-on-year, the impact of other income is also excluded.

Calculation
Operating profit
Share-based payments expense
Costs of acquisition and integration
Amortisation of intangible assets
Other income
Adjusted operating profit
Adjusted operating profit as a % of revenue

Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income

2023
€'000
46,83021,964
27,14026,060121,994
15.6%

2022
€'000
71,81018,678
8,413
16,810(1,098)
114,613
16.6%

EBITDAEBITDA comprises Operating profit as reported in the Consolidated statement of comprehensive income, adjusted for amortisation of intangible
assets, depreciation and impairment, and deducting bank charges.

Calculation
Operating profit
Amortisation of intangible assets
Depreciation - property plant and equipment
Depreciation - right of use assets
Bank charges
EBITDA

Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Note 13
Note 12Note 62023€'000
46,83026,06023,12813,907(724)
109,201

2022€'000
71,81016,81018,365
14,585(662)
120,90857

Adjusted EBITDA
Adjusted EBITDA comprises EBITDA, adjusted for share-based payments expense, and costs of acquisition and integration. In order to present
the measure consistently year-on-year, the impact of other income is also excluded.

Calculation
EBITDA
Share-based payments expense
Costs of acquisition and integration
Other income
Adjusted EBITDA
Adjusted EBITDA as a % of revenue

As above
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income

2023
€'000
109,201
21,964
27,140158,305
20.3%

2022
€'000
120,908
18,678
8,413(1,098)146,901
21.3%

Adjusted profit before tax
Adjusted profit before tax comprises Profit before taxation as reported in the Consolidated statement of comprehensive income, adjusted forshare-based payments expense, costs of acquisition and integration, amortisation of intangible assets, non-controlling interest, foreignexchange gains and losses, and unwinding of discounted liabilities. In order to present the measure consistently year-on-year, the impact ofother income is also excluded.

Calculation
Profit before taxation
Share-based payments expense
Costs of acquisition and integration
Amortisation of intangible assets
Foreign exchange (gain) / loss
Unwinding of discounted liabilities - deferredconsideration
Other income
Adjusted profit before tax
Adjusted profit before tax as a % of revenue

Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Note 6Note 6
Consolidated statement of comprehensive income

2023
€'000
34,994
21,964
27,14026,060
1,232

2022
€'000
67,982
18,678
8,413
16,810(1,677)

3,279
114,669
14.7%

2,922
(1,098)112,030
16.2%

Adjusted effective tax rate
The Adjusted effective tax rate is the Taxation expense as reported in the Consolidated statement of comprehensive income, adjusted for thetax impact of the adjusting items in arriving at Adjusted profit before tax, as a percentage of the Adjusted profit before tax.

Calculation
Adjusted profit before tax
Taxation
Effective tax rate before tax on adjusting items
Tax arising on bridging items to Adjusted profit before
tax^
Adjusted taxation
Adjusted effective tax rate

As above
Consolidated statement of comprehensive income
Taxation / Adjusted profit before tax

2023
€'000
114,669
15,042
13.1%

2022
€'000
112,030
20,61218.4%

Adjusted taxation / Adjusted profit before tax

10,53925,581
22.3%

4,043
24,65522.0%^Being mainly the tax impact of share-based payments expense €4.2m, amortisation of intangible assets €4.4m and acquisition related costs €1.5m, with the prior period being mainly the tax
impact of share-based payments expense €0.4m and amortisation of intangible assets €4.0m less foreign exchange €0.4m.

58Adjusted earnings per share
The Adjusted profit after tax comprises the Adjusted profit before tax, less the Taxation expense as reported in the Consolidated statement ofcomprehensive income, adjusted for the tax impact of the adjusting items in arriving at Adjusted profit before tax.
The Adjusted earnings per share comprises the Adjusted profit after tax divided by the either the basic or diluted weighted average number of
equity shares, as reported in note 8.

Calculation
Adjusted profit before tax
TaxationTax arising on bridging items to Adjusted profit before
tax^
Adjusted profit after tax
Weighted average number of equity shares
Basic
DilutedAs above
Consolidated statement of comprehensive income

Note 8Note 8Adjusted earnings per share
Basic% growth
Diluted% growth

2023
€'000
114,669(15,042)

2022
€'000
112,030(20,612)(10,539)89,088(4,043)87,375

Number
78,910,471
79,995,267

Number
76,979,596
80,481,897€c112.90(0.5%)
111.372.6%€c113.5027.2%
108.5627.8%^Being mainly the tax impact of share-based payments expense €4.2m, amortisation of intangible assets €4.4m and acquisition related costs €1.5m, with the prior period being mainly the tax
impact of share-based payments expense €0.4m and amortisation of intangible assets €4.0m less foreign exchange €0.4m.

Return on capital employed (ROCE)ROCE represents the Adjusted profit before tax (excluding net interest costs, unwinding of discounted lease liabilities and bank charges, andalso adjusted to include pre-acquisition profits of current-year acquisitions), expressed as a percentage of the capital employed. As the Group
continues to make multiple acquisitions each year, the calculation further adjusts the Adjusted profit before tax and the capital employed as if
all the acquisitions made during each year were made at the start of that year.
Capital employed represents Total equity as reported on the Consolidated statement of financial position, adding back employee defined benefit
plan liabilities, cumulative amortisation of intangible assets (customer relationships), acquisition-related liabilities (deferred and contingent
consideration), together with loans and borrowings, while deducting cash and cash equivalents.

Calculation
Adjusted profit before tax
Interest received
Bank charges
Interest expense
Unwinding of discounted liabilities - lease liabilities
Pre-acquisition profits of current year acquisitions
Adjusted profit before tax including pre-acquisition
profit and excluding net interest
Total equity
Employee defined benefit plans
Cumulative amortisation of intangibles assets(customer relationships)
Deferred and contingent consideration
Loans and borrowings
Cash and cash equivalents
Capital employed

Return on capital employed

2023
€'000
114,669
(614)
724
5,768
1,447
9,655

2022
€'000
112,030
(309)
662
1,261
969
1,601

131,649

116,214

Consolidated statement of financial position
Consolidated statement of financial position

599,039
4,030

557,091
2,861

Note 11
Note 17
Note 18
Consolidated statement of financial position

76,61755,825
127,380(59,862)803,029

58,301
63,25351(81,886)
599,671

16.4%

19.4%

As above
Note 6Note 6Note 6Note 6Note 27

Adjusted profit before tax including pre-acquisition
profit and excluding net interest expense / capital
employed59

Free cash flow
Free cash flow represents Net cash generated by / (used in) operating activities as reported in the Consolidated statement of cash flows,
adjusted for acquisition and integration cash outlay, capital expenditure, settlement of deferred consideration related to continuous
employment, net interest paid, payments of principal on lease liabilities and is presented both before and after taxation paid. In order to present
the measure consistently year-on-year, the impact of other income is also excluded.
Calculation
Net cash generated by / (used in) operating activities
Acquisition and integration cash outlay:
Costs of acquisition and integration
Fair value adjustments to contingent consideration
Non-cash movements in Deferred and contingent
consideration related to continuous employment
Fair value adjustments to property, plantand equipment
Fair value adjustments to right of use assets
Other fair value movements within Cost of
acquisition and integration
Acquisition of property, plant and equipment
Investment in intangible assets
Other income
Settlement of deferred and contingent consideration
related to continuous employment
Interest received
Interest paid
Payments of principal on lease liabilities
Free cash flow after tax
Taxation paid
Free cash flow before tax

Consolidated statement of cash flows

2023
€'000
110,457

2022€'000
124,286

Consolidated statement of comprehensive income
Consolidated statement of cash flows

27,140(300)

8,413(2,282)

Consolidated statement of cash flows(8,877)(3,000)Note 5Note 5(5,755)(2,041)-

Note 5
Consolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of comprehensive income(2,677)(30,689)(3,052)-(27,007)(501)(1,098)

Consolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of cash flows

3,900
614
(7,729)(15,038)
65,953
20,85386,806309(1,797)(11,361)
85,962
17,505
103,467

Consolidated statement of cash flows

Adjusted free cash flow
Adjusted free cash flow is a measure of cash flow adjusting for capital expenditure that is supporting growth in future periods (as measured bycapital expenditure in excess of maintenance capital expenditure).
Calculation
Free cash flow before tax
Capital expenditure in excess of depreciation:
Acquisition of property, plant and equipment
Depreciation - property, plant and equipment
Capital expenditure in excess of depreciation
Adjusted free cash flow

As above
Consolidated statement of cash flows
Note 52023€'000
86,8062022€'000
103,467

30,689(23,128)
7,561
94,36727,007(18,365)
8,642
112,1092023€'000
94,367
114,6692022€'000
112,109
112,030

82.3%

100.1%

Adjusted cash conversion rate
The Adjusted cash conversion rate is the Adjusted free cash flow as a percentage of the Adjusted profit before tax:
Calculation
Adjusted free cash flow
Adjusted profit before tax

Adjusted cash conversion ratio

As above
As aboveFree cash flow before tax and capital expenditure inexcess of depreciation, as a % of Adjusted profit beforetax

Net debt
The Group manages capital by monitoring debt to capital and net debt ratios. Net debt is calculated as Loans and borrowings (as shown in theConsolidated statement of financial position) less Cash and cash equivalents, and excludes Lease liabilities.
Calculation
Loans and borrowings
Cash and cash equivalents
Net debt / (net cash) position

Consolidated statement of financial position
Consolidated statement of financial position

2023
€'000
127,380(59,862)
67,518

2022
€'000
51
(81,886)(81,835)60