30 March 2022
Keywords Studios PLC ("Keywords Studios", “Keywords”, the “Group”)
Full year results for the year to 31 December 2021
Strong growth supported by a buoyant video games industry
Keywords Studios, the international technical and creative services provider to the global video games
industry, today announces its full year results for the year to 31 December 2021.
Financial Overview:
Results for the year to 31 December 2021

2021

2020

% change

Group revenue
Organic Revenue growth1€512.2m+19.0%€373.5m+11.7%+37.1%

Adjusted EBITDA2
Adjusted EBITDA margin
EBITDA2€110.1m
21.5%€85.7m€74.2m19.9%€66.8m

+48.4%

Adjusted profit before tax3
Adjusted profit before tax margin
Profit before tax€86.0m
16.8%€48.0m€55.0m14.7%€32.5m+56.4%

Adjusted earnings per share4
Earnings per share

89.24c45.16c60.93c30.32c+46.5%+48.9%

Total dividend per share

2.15p

0.00p

Adjusted cash conversion rate5

107.3%

97.2%

Net cash / (net debt)€105.6m€102.9m+28.3%+47.7%

Highlights:
Strong revenue growth (+37.1% to €512.2m) supported by a buoyant video games industry

Organic Revenue up 19.0% (H1 2021: 22.9%, FY 2020: 11.7%) with all service lines performing
well against the comparative period, when a number were held back by COVID-19 related
production delays and disruption
Performance driven by high levels of demand, supported by a buoyant video games market
refocused on new content creation and a continued trend towards external service provision

Continued profitability growth and strong cash generation provides a balance sheet able to support
investment and shareholder returnsAdjusted profit before tax up 56.4% to €86.0m, with margin up 2.1% pts to 16.8% (2020: 14.7%)
Strong cash conversion with Adjusted Free Cash Flow6 of €92.3m (2020: €53.4m) and an Adjusted
Cash Conversion rate of 107.3% (2020: 97.2%)
Net cash of €105.6m (2020: €102.9m), after €65.5m net cash spend on acquisitions in 2021, and arenewed €150m undrawn Revolving Credit Facility
As part of our progressive dividend policy, the Board has recommended a final dividend of 1.45p
per share, which will make the total dividend for 2021 of 2.15p per share (2020: nil)

Acquisition strategy delivering expanded geographical reachCompleted six high quality acquisitions in Australia, UK, Romania, and the US in 2021, for a total
maximum consideration of up to €126m:

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Climax Studios, Heavy Iron Studios, Tantalus and Wicked Witch add substantial scale andcapabilities to Game Development, while expanding our presence into Australia
 AMC adds significant expertise to Art Creation and a new presence in Romania for the Group Waste Creative brings player acquisition and community management expertise to Marketing
Our near term strategy remains strengthening Game Development and Marketing Services andbecoming the external provider of choice for our global client base, while selectively acquiring inother service lines
Exited the year with Pro Forma Revenue7 of €528.5m (2020: €409.2m)
We continue to actively review a healthy pipeline and our strong financial resources enables
Keywords to comfortably support further acquisition opportunities

Making good progress with our Responsible Business agenda
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2021 MSCI ESG Ratings assessment improved to a rating of ‘A’, up from BBB previously
Established a new partnership with Women in Games, a not-for-profit organisation that seeks agame industry, culture and community free from gender discrimination. Planning a number of
initiatives to leverage our global platform and client relationships in 2022
Developed our first Group Environmental policy covering our energy and recycling practices, which
will further develop our Sustainable Studios programme
Hardship fund available to help affected employees of the unfolding humanitarian crisis in Ukraine
and Keywords Care CSR fund increased

CEO Update: Evolving our strategyAfter a rigorous selection process, Keywords appointed Bertrand Bodson as the Group’s new CEO,with effect from 1 December 2021
Together with 60 leaders from across every service line, five workstreams have been put in place tokick-start the process for taking Keywords to the next level in the following areas: Developing strategic partnerships; harnessing technology; addressing adjacent markets;
supporting our “One Keywords” culture; and attracting and nurturing talent
A further update on these strategic workstreams will be provided at our Capital Markets Day in
London on 8 June

Current trading and outlook
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Trading in the first quarter has started well with strong demand across all of our service lines
Expect to continue to benefit from an underlying video games market that remains buoyant, with 2022
expected to be a particularly strong year for new game launches
While we are not immune to the inflationary pressures and competition for talent, we continue toenhance our position as an attractive employer and to take account of our costs as we agree projects
with our clients, who are well aware of the industry-wide talent challenge
We are monitoring the situation in Russia, where our teams continue to work but entirely focused on
critical work for non-Russian clients. In parallel, and in close partnership with our clients, we havebeen actively looking at relocating work to other locations across the Group, benefiting from our global
footprint
We are confident of delivering a performance for the full year towards the top end of current market
expectations8, notwithstanding the situation in Russia, given the strong underlying trading across theGroup aided, in part, by favourable currency movements
Well-funded to continue to invest in our platform and people and actively reviewing acquisitions thatwould add expertise, particularly in Game Development and Marketing, whilst retaining an interest in
adjacent markets such as media and entertainment

Bertrand Bodson, Chief Executive Officer of Keywords Studios, commented:

“I am delighted to have joined Keywords at a time when the business is performing so well. The Group hasdelivered strong organic growth, driven by high levels of demand for our services, and further extended ourcapabilities, reach and scale through selective acquisitions.
“The underlying video games market remains buoyant, with 2022 expected to be a particularly strong year for
new game launches, as developers and publishers look to capitalise on higher player numbers and create evermore sophisticated content to engage players in their games for longer.
“Trading in the first quarter has started well, and we continue to see strong demand across all of our service
lines, underpinning our confidence in delivering a performance for the full year towards the top end of current
market expectations8. We expect the Group’s trading momentum to continue through 2022, with the increased
flow of content to our later stage service lines seen in the second half of 2021 continuing into this year, alongsidefurther strong demand for our earlier stage services such as Game Development, Art Creation and Marketing.
“We are confident Keywords remains well placed to continue its rapid growth and in its long-term successthanks to its strong position in a buoyant video games market, its increasingly sought after 10,000-people strong
resource base, its robust business model with a diversified range of services that are well balanced across thevideo games development cycle, and the financial strength to invest in our platform and people to build further
on the Group's successful organic and acquisitive growth track record.”
A presentation of the full year results will be made to analysts at 9.30am this morning and the live webcast
can be accessed via this link: https://webcasting.brrmedia.co.uk/broadcast/6227906361bd9a4d10286ff6. To
register for dial in access, or for any enquiries, please contact MHP Communications on
keywords@mhpc.com.
For further information, please contact:
Keywords Studios (www.keywordsstudios.com)
Bertrand Bodson, Chief Executive Officer
Jon Hauck, Chief Financial Officer
Joseph Quinn, Investor Relations+353 190 22 730

Numis (Financial Adviser, Nominated Adviser and Corporate
Broker)Stuart Skinner/Kevin Cruickshank/Will Baunton+44 20 7260 1000

MHP Communications (Financial PR)
Katie Hunt/Charles Hirst+44 20 3128 8193
keywords@mhpc.com

About Keywords Studios ( www.keywordsstudios.com )Keywords Studios is an international technical services provider to the global video games industry.
Established in 1998, and now with over 70 facilities in 23 countries strategically located in Asia, Australia, theAmericas and Europe, it provides integrated art creation, marketing services, game development, testing,
localization, audio and player support services across more than 50 languages and 16 games platforms to ablue-chip client base of over 950 clients across the globe.
Keywords Studios has a strong market position, providing services to 23 of the top 25 most prominent games
companies. 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 Anthem, Star Wars Jedi: Fallen Order,
Valorant, League of Legends, Fortnite, Clash Royale and Doom Eternal. 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 thebusiness which are not GAAP measures as defined by International Financial Reporting Standards (IFRS). The

Directors believe these measures provide valuable additional information for the users of the financial information tounderstand the underlying trading performance of the business. In particular, adjusted profit measures are used toprovide the users of the accounts a clear understanding of the underlying profitability of the business over time. For fulldefinitions and explanations of these measures and a reconciliation to the most directly referenceable IFRS line item,
please refer to the APMs section at end of the statement.
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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 prior year foreign exchange rates to both years.
EBITDA comprises Operating profit as reported in the Consolidated statement of comprehensive income, adjusted foramortisation and impairment of intangible assets, depreciation, and deducting bank charges. Adjusted EBITDA comprises
EBITDA, adjusted for share option expense, costs of acquisition and integration and non-controlling interest. In order topresent the measure consistently year-on-year, the impact of COVID-19 government subsidies claimed and investment
income are also excluded.
Adjusted profit before tax comprises Profit before taxation as reported in the Consolidated statement of comprehensive
income, adjusted for share option expense, costs of acquisition and integration, amortisation and impairment of intangible
assets, non-controlling interest, foreign exchange gains and losses, and unwinding of discounted liabilities. In order topresent the measure consistently year-on-year, the impact of COVID-19 government subsidies claimed and investment
income are also excluded.
Adjusted earnings per share comprises the adjusted profit after tax divided by the non-diluted weighted average number ofshares as reported. The adjusted profit after tax comprises the adjusted profit before tax, less the tax 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.
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). In order to present the measureconsistently year-on-year, the impact of COVID-19 government subsidies claimed is also excluded.
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 for a full financial year.
As at 28 March 2022, company compiled analysts' forecasts gave a consensus for FY 2022 of €597m of revenue (range:€587-610m) and €92m of adjusted profit before tax (range: €90-95m).

Chairman's Statement 2021
This, my ninth Chairman's statement since Keywords’ IPO in July 2013, looks back on another year of strong
results and delivery on our strategy, and looks forward to one of re-energisation with new ambition.
The increase in revenues to €512.2m represented actual growth of 37.1% and Organic Revenue growth of
19.0%. Adjusted EBITDA grew 48.4% versus 2020, albeit assisted by a low level of costs as a result of COVID19. While the final Adjusted PBT margin of 16.8% benefitted from these reduced costs, it nonetheless evidences
our medium to long-term margin expectations of c.15% is very achievable.
The Group completed six high quality acquisitions in Australia, UK, Romania, and the US in 2021, extending
its scale and capabilities to Game Development, Art Creation and Marketing, in line with our strategy to
become the external provider of choice across all our service lines for our global client base and giving theGroup Pro Forma Revenue7 of €528.5m as it exited 2021 (2020: €409.2m).
In the context of the Group’s ongoing strong financial performance we are recommending a final dividend of
1.45p, giving a total dividend of 2.15p for the full year (having suspended our dividend programme in 2020).
Following the early retirement for health reasons of Andrew Day, I would like to express the Board’s gratitude
to all of Keywords’ Senior Management Team for ensuring that the Group continued to deliver exceptional
results in 2021 and for enabling a smooth transition to the appointment of Bertrand Bodson as the Group’s new
CEO in December 2021. In Bertrand, the Group has a new CEO whose talents, expertise and leadership skills
are uniquely tailored to take Keywords forward for the next phase of its remarkable journey. Indeed, it istestimony to the unparalleled positioning of Keywords in the video games world that we have been able toattract someone of Bertrand's calibre.
My fellow Non-Executive Directors also deserve my thanks for their support in directing the business during thetransition to a new CEO, and ensuring we had an effective CEO recruitment process. In addition, we haverecruited two new Non-Executive Directors in anticipation of the retirements of David Reeves (Senior
Independent Director and Chair of the Remuneration Committee) at the next AGM and of Giorgio Guastalla,
the Keywords founder, as announced recently. In Marion Sears, who is going to take over the role of Chairmanof the Remuneration Committee, and Neil Thompson we have, I believe, found two exceptional Directors whowill be well able to provide the necessary support to the Executives. When David Reeves stands down at thenext AGM, Charlotta Ginman will be appointed as Senior Independent Director; she has served with distinction
on the Keywords Board for four years and is Chair of the Audit Committee. On behalf of the Board, I would liketo thank David for his considerable contributions to the Group and to Giorgio; without him and his wife Teresa
there would not be a Keywords. Given the changes to the Board during the year, the Board has requested, andI have agreed, that I extend my chairmanship by a year beyond a nine-year term, with the view to retiring at the2023 AGM.
In a year when we have seen the transition of CEOs, the Keywords staff of some 10,000 have also very much
put their collective "shoulder to the wheel". My thanks go to each and every Keywordian who has supported thebusiness in the last 12 months.
In October 2021, an Executive Summit took place which was designed to act as a celebration of theachievements of Keywords over the last few years and to re-calibrate the strategic direction of the business.
We were fortunate that Bertrand was able to attend the Summit and have his first taste of the culture, talent andambition within the Senior Management Team. A further strategy conference is planned in the near future tobuild on the actions from the Executive Summit and to act as a springboard for Bertrand’s vision on how thebusiness should evolve.
As the Group continues to grow, Bertrand and the executive team will be focussed on driving operational
efficiency, making better use of technology in the way services are delivered, and establishing a more strategic
relationship with the major publishers, our clients.

Having completed his first 100 days at the helm of Keywords, Bertrand has already earned the respect of staff
and customers alike. He is incredibly excited and enthused by the prospects for, and opportunities available to,the business and I share that enthusiasm. These opportunities are not limited to the video games industry,where Keywords now has a pivotal role in the way services are delivered, but also in adjacent markets where“gamification” know-how and expertise in effectively delivering content to multiple markets can have a real
influence. Indeed, I believe that Keywords has really only just started its remarkable story and will continue togo from strength to strength as it builds on its strong platform to grow organically and by acquisition.
Since the year end Sonia Sedler, our COO, has left the business and her role on the Board for personalreasons. Having joined the business as COO during the COVID-19 pandemic, Sonia became joint interim
CEO with Jon Hauck at short notice when Andrew Day retired early. We are grateful for her contribution andshe leaves with our best wishes for the future.
Summary
We have a strong and energized leadership team in place and are well positioned to continue to execute on
our clear opportunities in the buoyant video games market, as we capitalize on the Group's unique full service
platform, powered by our incredibly talented team of Keywordians. Our strong balance sheet will enable us tocontinue to execute on a healthy pipeline of acquisition opportunities, complementing our ongoing organic
growth.
Ross Graham
Chairman

CEO Review
I am delighted to have joined Keywords at a time when the business is performing so well. The Group hasdelivered strong organic growth, driven by high levels of demand for our services, and further extended ourcapabilities, reach and scale through selective acquisitions.
While it is early days for me as a Keywordian, I have spent a great deal of my time meeting people across thebusiness, visiting studios around the world and speaking to our clients and it has made a few things abundantly
clear.
First, Keywords is full of incredibly talented, experienced and entrepreneurial leaders who have a serious
passion for video games and a clear desire to take the business forward.
Second, the Group is in an enviable market leading position, in a high growth industry that continues to movetowards external service provision and for which access to talent is becoming ever more critical. Keywords isproud to count almost all the leading publishers and developers as its clients and proud also that theselongstanding clients put their trust in Keywords to get their ever-advancing content to market and to meet andexceed the exacting standards of video gamers today.
Third, while Keywords already has scale with over 10,000 talented people across the business there are clear
opportunities to capitalise on the Group's unique full service platform to continue to drive significant andsustainable growth.
I’ll come on to set out some initial thoughts on ways in which we can continue to deliver an ever-more compelling
proposition globally for our partners in the buoyant video games market, and adjacent content industries, andto invest in the platform and our people to build further on the Group's successful organic and acquisitive growth
track record.
We are very mindful of the tragic events in Ukraine, which we are deeply saddened by and our thoughts arewith all those affected. While we have no operations in Ukraine, our US Game Development business,
Sperasoft, continues to operate from Russia but entirely focused on critical work for non-Russian clients. Inparallel, and in close partnership with our clients, we have been actively looking at relocating work to otherlocations across the Group, benefiting from our global footprint (including in Poland, across Europe, and the
KWS network more broadly). We are monitoring the situation very closely, and I will come on to provide moredetail on our support for both our people and others that have been affected in the region. Our colleagues
across the region are all valued members of Keywords and our priority is to do all that we can to support ourpeople, and freelancers, wherever they are located, while contributing to wider humanitarian efforts in theregion.
The Group has started 2022 well, with strong demand across all of our service lines. We are very confident
in the Group's opportunity for growth as we continue to capitalise on our clients’ focus on selecting the rightexternal services provider, increased expenditure on content creation in a growing video games market, andour ability to increase our market share both through organic growth and the execution of our acquisition
strategy.
Excellent growth supported by a buoyant video games market
Keywords delivered a strong performance in FY2021, with revenues up by 37.1% to €512.2m. Organic
Revenue for the Group, which excludes the impact of acquisitions and currency movements, grew by 19.0% in
2021 (FY 2020: 11.7%), with all service lines performing well against the comparative period. This strong
performance reflects the high levels of demand for all service lines, driven by the buoyant video games market,
the industry's focus on new content creation, the continued trend in the industry towards external service
provision supported by a softer comparative in the first half of 2020 when the Group experienced disruption to
our services at the earlier stages of the COVID-19 pandemic. The Group’s strong organic growth wascomplemented by contributions from the six acquisitions we completed through the year.
While all of our service lines experienced growth, our Marketing and Game Development service lines delivered
exceptional growth, of 151.1% and 73.6% respectively, reflecting strong organic performances (33.7% and16.0% respectively) complemented by contributions from acquisitions. These service lines have been aparticular focus of our acquisition strategy in recent years and, as they have a significant role at the earlier
stages of a video game’s development cycle, have benefitted through the year from the industry returning tofocus on creating new content to keep its expanding player base engaged in exciting new games. The
performance by each service line is set out in more detail later in this review.
The Group's Adjusted PBT increased by 56.4% to €86.0m, representing a 2.1% pts improvement in margin to
16.8%. This reflected operational leverage and continued good cost control, and the benefit of reduced costs
due to COVID-19, primarily relating to remote working and reduced property, travel and business development
costs, which we expect to return with the anticipated easing of restrictions in 2022, alongside further investment
in our platform and people.
Our robust business model has ensured this profit performance translated into strong cash generation, with
€92.3m of Adjusted Free Cash Flow (FY 2020: €53.4m) representing a 107.3% Adjusted Cash Conversion ratein the period (FY 2020: 97.2%). This demonstrates the strong cash-generating characteristics of the businessand provides the Group with further resources to continue to invest in the business and fund our acquisition
strategy.
We are exceptionally proud of the efforts of our talented Keywordians who have worked tirelessly throughout
this period to support our clients while continuing to deliver the excellent quality of service for which we are
known.
Delivering on our strategy
The continued buoyant demand for video games, our clients' renewed focus on content creation and theimpetus for external service provision have only accentuated the opportunities afforded by our strategy.
In a fragmented market characterised by predominantly local, single-service providers, Keywords continues tobuild its market-leading services platform and cement its position as the partner of choice for games publishersand developers when looking for global reach and deep expertise in video games. This, together with the scale
to deliver the quality, flexibility and security of service required to meet high levels of demand for ever moresophisticated and immersive content, differentiates Keywords from its competitors. We continue to leverage theunique breadth of our platform by bringing the right combination of capabilities to support customers' individual
objectives, enabling us to cross-sell a broader range of our services.
The strength and breadth of our platform is enabling us to capitalise on increased demand for our services due
to a number of key trends in our market:
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The industry’s focus returning to content creation in 2021, having had to concentrate on the monetisationof existing content due to production constraints across the industry in the earlier stages of the pandemicThe number of players and amount of game play having expanded during the pandemicThe shift towards “Games as a service”, which requires ongoing content expansion to continuously
deepen the gaming experience and extend the lifespan of a game, creating higher levels of continuous
activityThe launch and subsequent maturing of the next generation games consoles, PlayStation 5 and Xbox
Series X/S. While the launch of the new consoles has been held back by supply constraints, we areseeing a refresh of the entire console-based gaming sector after a seven-year run of the PS4 and XboxOne console generation, which we expect to result in an enlarged market for video games content overthe coming years and an associated demand for new content creation

Further development of new and existing video games streaming platforms increasing demand for bothcontent generation and ongoing in game support

We continue to invest in the business, both organically and through targeted acquisitions to position the Groupas an increasingly strategic partner to our clients and as the “go to” provider to the video games industry acrossour service lines and key geographies.
During the year, we have invested in new studios in Bangalore and Manila, as well as in two new studios insecond-tier cities in China, and refurbished some of our sites while the studios have been quieter, to support
our growth today and into the future. We have upgraded and expanded studios in a number of locations
including Quebec, Austin, Los Angeles and Tokyo and brought together certain studios where consolidation
into one, larger space made sense, in Los Angeles and Milan. We also agreed leases for new, expandedfacilities in Katowice, Warsaw and Ottawa that will support expansion in the current financial year.
We are also delighted to have welcomed six new businesses to the Keywords family in 2021. Heavy Iron
Studios, Tantalus, Climax Studios and Wicked Witch add substantial scale and capabilities to our Game
Development service line as well as reach into, and access to talent in, the US West Coast and Australia. AMC
adds significant expertise to Art Creation and a new presence in Romania for the Group, from which we canaccess a new talent pool and build out our other service lines. We have also continued to enhance ourMarketing service line, which we split out as a standalone service line for the first time at the interim results in
September, having completed the acquisition of Waste Creative, a London-based studio, at the end of the year.
Waste Creative brings expertise in strategy and creative production services, including player community
management, for mobile video game creators, which will help us meet the growing demand from our clients forgames as a service marketing support with a focus on community growth and fan retention. We continue toactively review a healthy pipeline of further acquisition opportunities.
Evolving our strategy
One of the things that attracted me to Keywords was the Board’s vision for the business; I share its plan to growthe platform on a global scale and I believe Keywords has huge potential in the video games industry, and thatit can also operate just as effectively in many adjacent content sectors.

I am privileged to have joined a business that has such strong foundations in that it is already a proven market
leader with unrivalled scale, reach and range of capabilities across its 74 studios in 23 countries. It also alreadysupplies almost all of the major developers in a sector that has huge growth potential.
The quality of the platform that has been built, and its attractiveness to potential partners and acquisition targets,provides the Group with a clear opportunity to continue to grow its services and scale in a global market for
which service provision remains highly fragmented.
I'm looking forward to leading the Group's ambitious team to deliver an ever more compelling proposition forthe buoyant video games market, and beyond.
As part of my first 100 days programme in the business, I have been looking at how we build on the Group’s
incredibly strong foundations to take it forward to new levels of scale and success.
Right at the start of this process, I brought 60 leaders from across the business together as part of my induction,
to ensure we drive the evolution of the strategy together. Working closely with them, we have launched five
workstreams across the business to kickstart the process for taking Keywords to the next level, as follows:

1. Strategic partnerships: As we enter 2022, Keywords has over 900 clients and 23 of the top 25
publishers are our customers. Moving forward, we will look to build on these relationships so we cancreate and capture more value together. To do this, we will ascertain the areas in our service line offeringthat are currently missing so we can continue to build the platform of choice for our clients and learn
how Keywords can be an increasingly attractive strategic partner which should in turn enable us tocapture more value. Also, we are re-examining our various “customer propositions” to ensure a propercorrespondence between the services we can provide and the value customers should expect.
2. Technology: We will explore how to deploy the right tools and technology to enable our studios tocontinue to enhance their performance so that they can bring more value to our clients, while at thesame time ensuring our internal operational structures can scale to support Keywords’ growthambitions.
3. Adjacent markets: We continue to examine opportunities in adjacent sectors and our work in the
broader media and entertainment sector with Netflix and others has increased accordingly. We willcontinue to review opportunities that supplement our growth in video games to ensure we takeadvantage of the increasing convergence of content and leverage our mastery of this most interactiveof all mediums, as gamification is increasingly seen as a route to delivering content in a more engaging
way for a whole range of applications including education, retail and construction, and, of course, forthe many potential applications in the metaverse.
4. One Keywords: Keywords has a unique and entrepreneurial culture and is full of highly talented, driven
people across many different geographies. It remains vital that we retain this core of “One Keywords”
that will help us to keep growing. So, we are looking at how we can preserve this entrepreneurial culture,
while continuing to build an operational backbone that supports the growth of the business into the
future thereby enabling us to take advantage of all the different skill sets across the business.
5. Talent: In 2021, we grew the number of people in this business to over 10,000 at the end of the year,
which makes it clear that this business is able to attract talented people. Our employee net promoter
score (eNPS) increased to 42 last year (from 22 in 2020), demonstrating high levels of engagement andsatisfaction. Despite this, there has never been demand like there is today for talent in this industry. As
such, we are looking at how we can continue to be an attractive destination for talent, what we can doto enhance career journeys at Keywords and how we can elevate the right people across our service
lines to help propel us forward.

We will provide a further update on our progress with these five strategic work streams, as well as some of theoutcomes, at our Capital Markets Day in London this Summer.
Evolving our ways of working
Our remote working capabilities remain highly effective, enabling us to support customers for as long as remote
working is needed, and where returning to studios is not feasible. As restrictions lift around our geographies
and, having consulted those who really matter– our Keywordians – we are now adopting a hybrid model ofoffering vibrant, engaging and safe studio space, while also enabling our people to work securely andconstructively from home.
There remains a clear role for physical studios for the Group, particularly to support a strong, collaborative
culture and enhance the exchange of creative ideas, for training, and in our Testing and Audio service lines,
where certain clients continue, for reasons of security, to prefer a studio-based service. We have, therefore,
continued to invest in new studios and to refurbish some of our sites while the studios have been quieter, toensure our studios remain attractive places for our people to come together.
Responsible Business
We remain committed to conducting our business responsibly and operating to the highest levels of honesty,
integrity and ethical conduct.
Having set out in 2020 our five priority areas of People (including DE&I), Customer Centricity & Innovation,
Communities and the Planet, underlined by Corporate Governance and Business Ethics, we have continued tomake progress with these in 2021.
We have received a rating of ‘A’ (on a scale of AAA-CCC) in our 2021 MSCI ESG Ratings assessment, which
has improved from BBB previously. This rating, which analyses our resilience to long-term, industry material
environmental, social and governance risks, was pleasing but clearly shows there is more we can do if we are
to become a leader within the industry.
Leading this work is our ESG Committee and we were pleased to announce in 2021 that in addition to Bertrand
Bodson, both of our most recently appointed Non-Executive Directors, Marion Sears and Neil Thompson, havejoined the Committee, bringing strong expertise and experience to this important area of focus for the Group.
The gender diversity of our business is a focus for the Board and we monitor appointments by gender. The
diversity of our Board changed in 2022 due to changes to the Board’s composition. Following the departureof Sonia Sedler, female directors now represent 25% of the Board but this percentage will rise to 29% whenDavid Reeves retires at the forthcoming AGM and we will continue to consider diversity as part of our decision
making in any future appointments.
We have also shown our commitment to improving diversity across the video games industry by entering intoa partnership with Women in Games in 2021, which sees Keywords help power their 500 strong Ambassador
programme across 52 countries, allowing us to be more active in addressing the underrepresentation of womenin our industry. Women in Games is a not-for-profit organisation founded in 2009, with the mission to identify
and effect the lasting change needed to bring about full gender equality, equity and parity of opportunity within
the gaming sector and to encourage more women to consider games and eSports as a career.
With this partnership now established, we have a number of planned initiatives to leverage our global platform
and client relationships in 2022 and beyond to enhance and accelerate the popular ambassador initiative,
enabling it to scale through additional projects and research, events, exclusive materials and services for
Women in Games ambassadors.
Following the quantification of our greenhouse gas emissions for the first time in 2020, in 2021 we havedeveloped the Group's first Environmental Policy covering our energy and recycling practices. The policy will

help further develop our Sustainable Studios programme and support our studios in their efforts to minimise
energy usage and to reduce, recycle and reuse wherever possible.
As we look to achieve net zero, we recognise these initiatives for Sustainable Studios will take time. Therefore,
we will initially offset our carbon impact with credits towards the Ntakata Mountains REDD+ project, which
protects forests. The revenue earned from the sale of certified carbon credits is paid directly to forest
communities in Tanzania, empowering them to manage their own development needs.
We continue to work hard to make Keywords a great place to work, with some of our initiatives recognised
through accolades such as Manila having been certified by Great Place To Work® Philippines, Keywords being
named among Ireland’s 150 Best Employers for 2021 and a number of our UK studios winning UK
GamesIndustry.biz Best Places To Work Awards during the year. Since the year end, we were delighted that
Keywords Studios in Mexico has been awarded the Socially Responsible Company (SRC) badge.
We also launched various initiatives to help support colleagues, including through COVID-19 vaccine clinics
which, for instance, have provided vaccines for colleagues and their families in India, support for colleagues
impacted by the hurricane in New Orleans, including re-housing some of our colleagues, and through thehardship fund that we launched at the beginning of the pandemic to support colleagues experiencing financial
hardship as a result of COVID-19.
Following recent events, supporting our people as the humanitarian crisis unfolds in Ukraine is our top priority.
We have established an employee hardship fund to provide support to the small number of colleagues directly
impacted by this crisis.
We are also doing all that we can to provide broader support to those affected by the tragic situation in Ukraine.
We have boosted our corporate social responsibility (CSR) fund to €250k, which we will dedicate tohumanitarian causes in support of Ukraine. We are also creating jobs for refugees as they move intoneighbouring countries, and we are providing support at the Ukrainian border through the donations of essential
items.
Further updates will be made on the progress we are making against our six priority areas at our Capital Markets
Day later this year.
Service line review
All our service lines grew well during 2021, despite the ongoing impact of the pandemic and the operational
challenges it continues to present. The following table provides a summary of our revenues by service line, withgrowth rates on a reported and Organic Revenue growth basis.

2021
2021
AverageOrganic
2021 number of
Revenue Pro Forma operational
growthRevenue
staff by%€m service line

% of 2021Group
revenue

2021
Revenue€m

2020
Revenue€mChangefrom 2020%

Art Creation*

9.6%

49.3

38.9

26.7%

24.4%

50.9

1,309

Marketing*

9.0%

46.2

18.4

151.1%

33.7%

52.4

189

Game
Development

27.1%

73.6%

16.0%

147.4

Revenue

138.9

80.0

1,396

Audio12.0%

Functional
Testing

18.1%

Localization

9.9%

Localization
Testing

5.3%

Player Support

9.0%

45.9

Total

100.0%

512.2

61.3

92.7

50.8

27.1

29.9%

27.4%

61.3

18.1%

17.2%

92.7

11.9%

12.2%

50.8

16.3%

16.7%

27.1

41.8

9.8%

12.7%

45.9

373.5

37.1%

19.0%

528.5

47.2

78.5
45.4

23.3

245

2,996
382

646
1,702

*The prior year comparatives have been re-classified to separately report Marketing services, previously
reported within the Art Creation service line.
Art Creation (9.6% of Group revenue for the year)
Our Art Creation service line creates graphical art assets for video games including concept art creation, 2D
and 3D art asset production and animation.
FY 2021 performance
Art Creation performed well with revenues up by 26.7% to €49.3m (FY 2020: €38.9m). Organic Revenue, which
excludes the impact of currency movements and acquisitions, grew by 24.4% for Art Creation, following acontinuation of strong underlying client demand across all art studios.
This strong performance was driven by exceptional growth in India where the studios were able to effectively
manage the increased demand by rapidly hiring new talent, something that is not as easily replicated in othermarkets. In other territories, our North American studios also benefitted from remote working and the ability toextend remote teams through freelancers and sister studios, which enabled studios to meet the increased
demand in the market.
We have continued to expand this service line, with the addition of two new studios in second-tier cities in China
and new studios in Bangalore and Manila, which provide us with additional access to talent to support the workfor our clients.
In August, we added the Group's first presence in Romania through the acquisition of AMC. AMC is a longestablished, high-quality specialist art studio servicing both US and European clients and we believe it will add
significant expertise and experience to this service line, as well as access to an attractive market for talent inRomania.
The market opportunity and outlook
Art Creation operates in a large addressable market, which remains highly fragmented. Increasingly, clientsseek partners who are able to deliver higher value solutions through more creative, technical, and managed
services.
Our clients’ needs also continue to evolve and we expect the demand for real-time 3D art to grow through theyear ahead and beyond. While it is very early days we expect that the development of the metaverse will drive
even more demand for digital and related content and we are committed to helping our clients navigate throughthis opportunity.

This year, we have already seen many more cross studio and cross-service line collaborations and we expect
Art Creation to continue to deliver strong growth in 2022 with our global platform positioning Keywords in astrong position to scale up to meet continued buoyant client demand.
Marketing (9.0% of Group revenue for the year)
Following its recent growth and scale within the Group, Marketing was reported as a standalone service line forthe first time at the interim results in September 2021, so this represents its maiden year as a separately
reported service line.
Marketing services includes PR and full brand campaign strategies, game trailers and marketing art andmaterials, which we are building through acquisitions, and subsequent organic growth.
FY 2021 performance
FY 2021 was a transformational year for our Marketing service line. Revenues grew by 151.1% to €46.2m (FY
2020: €18.4m) in 2021 following a period of fantastic growth. On an organic basis, which excludes the impactof currency movements and acquisitions, revenues were up 33.7% during the year.
The service line performed exceptionally well despite the absence of in-person events and a more limited
number of game launches due to delays. In 2021, Marketing also benefited from the successful integration of
the acquisitions of Maverick Media and g-Net, now the two largest studios in the service line, and Indigo Pearl,
which was completed in the second half of 2020.
During the year, we continued to add scale to our Marketing services line through the acquisition of Waste
Creative, a digital creative marketing agency based in London. The studio expands our mobile marketing
capabilities in player acquisition and retention, community management and rapid, high quality content creation.
The market opportunity and outlook
Having transformed the scale of our Marketing services business, it has already become the provider of choicefor games publishers and developers looking for a partner with deep specialist expertise in the sector, a broad
range of the services that will enable the success of their games, and the global reach to execute acrossdifferent time zones and cultures.
In a highly fragmented industry, this scale and reach will provide real competitive advantage as we bring
together more of our services to meet our client’s objectives. As many of the marketing services help clients atthe very early stages of game development, when concepts are being developed and positioned forgreenlighting, our marketing colleagues also have the opportunity to offer and cross-sell other Keywords’
services, as appropriate, at the outset for new titles.
An extensive range of marketing services are currently provided in this fragmented market both internally andexternally from key art, trailer creation, advertising, PR, branding, campaign management, influencer marketingand social media management through to marketing analytics and community management. So, while 2021
represented a transformational year in building out our Marketing services platform, there is a substantial
opportunity to build further, so we will continue to seek to grow the business through selective acquisitions inorder to enable us to provide a full suite of services at scale and across different time zones.
We expect Marketing will continue to grow strongly in FY 2022, albeit with growth rates moderating from theexceptionally high levels of growth seen in 2021.
Game Development (27.1% of Group revenue for the year)
Our largest service line, Game Development, provides external development services to game developers andpublishers including full game development, co-development, porting and general software engineering
consultancy.

FY 2021 performance
Game Development increased revenues by 73.6% to €138.9m (FY 2020: €80.0m). This increase partly
reflected contributions from acquisitions made in 2021, including Heavy Iron, Tantalus, and Climax, with Wicked
Witch having been acquired at the very end of the year. Game Development remains our largest service linewith 16 studios in nine countries and over 1,500 developers.
Organic Revenue (which excludes the impact of currency movements and acquisitions) grew by 16.0% driven
by the renewed focus on content creation, meaning strong demand for our services around the world despite
the curtailment of our usual tradeshow-centric, business development activities. With game lifecycles now
extending through downloadable content and live- ops and the next generation of consoles now maturingfollowing the late 2020 release, there is an ever-increasing variety of opportunities for our Game Development
studios.
While our ability to meet demand is constrained by a challenging recruitment climate, we were able to continue
to recruit skilled professionals who are attracted to the range of high profile, exciting projects we work on forour clients.
In FY 2021, we completed the acquisition of four high quality businesses to grow and diversify our Game
Development offering further:

Heavy Iron - based in Los Angeles, California, the industry veteran’s team of 43 developers has
provided full game development, co-development, live operations and porting services for the video
games industry since 1999.



Tantalus - a leading and prolific developer of high quality, multi-platform titles based in Melbourne,
Australia which provides us with access to a new talent pool and offers an excellent entry point into
the Australian market for further expansion in the Pacific region, both organically and throughacquisitions.



Climax - one of the longest established game development businesses in the UK, offering full gamedevelopment, co-development, porting and technical consulting services to some of the world's
largest games publishers through a team of 109 talented developers.



Wicked Witch - our second acquisition in Melbourne, Australia, Wicked Witch is a 73-person video
game development studio which has an established track record in video game and graphic
application development on a range of platforms including PC, mobile, PlayStation, Xbox and Switch.

The market opportunity and outlook
Game Development is our largest addressable market. The market is growing strongly and, of all of the Group's
service lines, this market has the lowest proportion of external service provision. There is a high level of demand
for talented developers and our studios will remain focused on recruitment and retention throughout 2022.
We remain a highly attractive prospect for game developer talent, who recognise the opportunities that
Keywords provides for a sustainable variety of exciting work, as well as good career advancement, including
the option to work across our expanding international footprint, and to be part of a strong culture amongst likeminded, games-passionate colleagues. Given the strong demand for talent, we expect to see some wage
inflation and we will continue to take account of our cost structure as we agree each project with our clients,
who are only too aware of the talent challenge themselves.
Our US Game Development business, Sperasoft, is the only studio within Keywords to operate in Russia
with locations in St Petersburg, Volgograd and Moscow. Revenues from these studios are entirely from nonRussian clients. We continue to monitor the situation closely and in close partnership with our clients, wehave been actively looking at relocating work to other locations across the Group, benefiting from our global
footprint (including in Poland, across Europe, and the KWS network more broadly).
Demand remains very strong and we entered 2022 with a higher than normal level of confirmed revenue, so
we expect continued growth for Game Development during the year as we use our global platform to enable
the business to service as much of that demand as possible.
As previously communicated, Game Development remains an area of particular focus in our M&A programme,
where we continue to assess companies that provide access to strong pools of talent to help support the fast
pace of organic growth.
Audio (12.0% of Group revenue for the year)
Our Audio service line provides multi language voice-over, original language voice recording, music, sounddesign, accessibility and related services to the video games and film and TV industries.
FY 2021 performance
Audio revenues rose by 29.9% in the period to €61.3m (FY 2020: €47.2m), with Organic Revenue, which
excludes the impact of currency movements and acquisitions, increasing by 27.4% compared to FY 2020.
Despite the challenges presented by the global pandemic and the need for our studios to adapt to various
lockdowns and changes in local health and safety guidelines, our Audio services business saw a strong
performance in 2021. This performance was delivered across all the studios and the business was able toexpand through the addition of new clients and the growth of all its core services (subtitling, accessibility,
dubbing, voice over, audio post and music).
Our music management services, sound design and sound effects businesses have continued to grow, as did
our work in subtitling and dubbing of film and TV content where we serve clients such as Netflix, as well as
many of the other key streaming providers, which have invested heavily in their original content strategy which
helped to drive higher demand for our services.
The market opportunity and outlook
Our Audio services business has started 2022 well, with high levels of demand for our studios continuing into
the first quarter. Our ability to produce industry leading quality for our clients means Keywords remains thepartner of choice for video games clients seeking partners who can support them on all of their audio needs.
We expect the streaming platforms to continue to drive strong demand for our Audio services line too.
Beyond the near term, we expect our Audio business to continue to be in high demand and the market remains
highly fragmented in terms of service provision, with clients and voice actors favouring professional, high quality
sound studios for optimal voice recording. This represents an opportunity for us to grow our market shareorganically, as well as make select acquisitions over time, as we seek to expand into new geographies to meetthe growing demand, as audio content increases for both console and mobile games.
Functional Testing (18.1% of Group revenue for the year)
Functional Testing is our second largest service line and provides quality assurance, including discovery anddocumentation of game defects and testing to verify the game's compliance with hardware manufacturers' anddistribution platforms' specifications, as well as test automation tools and services, crowd-based and focus
group testing solutions.
FY 2021 performance
Functional Testing revenues increased by 18.1% to €92.7m (FY 2020: €78.5m) and Organic Revenue, which
excludes the impact of currency movements and acquisitions, increased by 17.2%. The growth was supported

by a weaker comparative in H1 2020 which was particularly disrupted at the early stages of the COVID-19
pandemic. Demand for our Functional Testing services improved as we moved through the year, as this service
line started to benefit more fully from content flowing to the later stage service lines in the second half of 2021,
following the industry’s return to focus on new content creation in the first half of 2021.
We have built out our Functional Testing operations over time, beyond Montreal, to include Tokyo, New Delhi,
Singapore, Katowice, Saint Jerome (Canada), Mexico City and Seattle, giving us a well-diversified production
base, with “follow the sun” time zones and some lower cost production sites.
Our strong relationships with clients and the optimisation of capacity across these studios enabled the
Functional Testing business to meet growing demand and it was pleasing to see volumes in studios acrossPoland, India and Mexico double in 2021.
The market opportunity and outlook
As the newer generation of consoles mature, the industry’s drive to create new content for this generation is
expected to increase further, something that will continue to benefit our Functional Testing business which
operates at the later stages of the game development cycle.
In 2022, we expect our global footprint with studios in the key locations for talent around the world will continue
to appeal to our clients, as we are able to offer flexible solutions depending on our customer needs, timelines
and budgets.
We remain a leading player in this large and growing area of the market that is seeing an accelerating trend
towards external service provision. Our scale, flexibility, geographical spread and proven robustness, even in
the most challenging of circumstances, positions us well as games companies continue to increase theproportion of functional testing that they work with external providers on.
We expect to deliver continued growth into 2022 as more content flows to our later stage service lines following
the return to new content creation in 2021 and as we see more new content being launched during the year.
Localization (9.9% of Group revenue for the year)
Our Localization service line provides translation of in-game text, audio scripts, cultural and local adaptation,accreditation, packaging and marketing materials in over 50 languages. It includes our proprietary technologies
for content management, machine translation, crowd sourcing and workflow management.
FY 2021 performance
Localization revenues were up 11.9% to €50.8m (FY 2020: €45.4m) and Organic Revenue, which excludes theimpact of currency movements and acquisitions, was up by 12.2%. This reflected a higher level of demand for
our Localization services as we moved through the year, as this service line started to benefit more fully fromcontent flowing to the later stage service lines in the second half of 2021, following the industry’s return to focus
on new content creation in the first half of 2021.
In October, we announced that Romina Franceschina joined Keywords to lead our Localization service line,
bringing more than 20 years’ experience in the localization industry and in delivering operational excellence andinnovation, across a number of industries.
In 2021, Localization launched KantanStream, a crowd-sourced machine translation management platformthat combines artificial intelligence and our global community of professional translators to deliver the speed
and flexibility of machine translation with the quality only native speakers can deliver.
Localization’s strong relationships with clients and exceptional output saw it receive awards from Tencent andYozoo for being the best audio services provider and the business also won the Best Localization and QAProvider at Star Awards 2021.

The market opportunity and outlook
The Localization market remains highly fragmented and characterized by most competitors being single
language providers without the scale to deliver simultaneous multi-jurisdictional localization projects for our
global video games customer base.
Our clients are increasingly looking to Keywords for a more streamlined and distributed production process sointernal innovation to introduce workflow efficiencies and automation will be a key area of focus for Localization.
Clients are already adopting our game asset management system, XLoc, which in turn ensures we are evermore integrated into their workflows. Combining the market leading expertise we have built up in localization
over the past 20 years, with proprietary software tools, like XLoc, and artificial intelligence (AI) and machinelearning (ML) technology from Kantan, will enable us to effectively manage a greater volume of content for ourclients, at a greater speed, and in more languages.
We expect to deliver continued growth into 2022 as more content flows to our later stage service lines following
the return to new content creation in 2021, alongside the underlying momentum in a video games market thatis producing an ever increasing level of content, that is localised to a greater degree, for communities of video
game players that reside in every corner of the world.
Localization Testing (5.3% of Group revenue for the year)
Our Localization Testing service line identifies out of context translations, truncations, overlaps, spelling,grammar, age rating issues, geopolitical and cultural sensitivities, and console manufacturer compliancerequirements in over 30 languages using native speakers.
FY 2021 performance
Localization Testing revenue increased by 16.3% to €27.1m (FY 2020: €23.3m). On an organic basis, which
excludes the impact of currency movements, Localization Testing was 16.7% higher compared to FY 2020.
As in the case of Functional Testing, Localisation Testing started to benefit more fully from content flowing into
our later stage services in H2 2021, following the industry’s return to focusing on new content generation in H1
2021 after the disruption to game production cycles caused by the pandemic in 2020.
Localization Testing benefitted from improvements to its global resourcing market, an increasingly flexible teamstructure and a higher proportion of work being shared across multiple studios in different geographies, which
aided capacity and enabled the service line to meet heightened demand in a timely, flexible manner.
The market opportunity and outlook
In this service line, we continue to develop our operations in Tokyo, Singapore, Katowice, Milan, Dublin,
Montreal and Ottawa, which gives us the scale, breadth of languages, multi-location and time zone operations,and resourcing agility to enable it to offer a flexible, high quality and cost-effective service which is difficult forcompetitors to replicate.
With our offering well established as a leading global player, we expect the Localization Testing service line tobenefit from the strong underlying market, a continued rise in external service provision, and an increased flowof content to our later stage services in 2022. We are already receiving ever larger opportunities from our clients
who recognise Keywords as a global partner of choice.
Player Support (9.0% of Group revenue for the year)

Our Player Support service line provides multi-lingual, cost effective and flexible customer care services,
including managing communities of gamers across all forms of social media, within the games themselves andon the official game forums, ensuring our customers have a safe player environment.
FY 2021 performance
Player Support increased revenue by 9.8% to €45.9m (FY 2020: €41.8m) and Organic Revenue, which is on aconstant currency basis, by 12.7%.
Player Support brought on a significant number of new clients and continued to strengthen its services in areas
such as social media, quality control and consulting. It has continued to grow revenues from its social media
services in particular, which have a high level of synergy with the Group’s Marketing Studios. For instance, ouracquisition of Waste Creative in December 2021 provides particular opportunities for synergies with Player
Support due to its focus on player community management and retention for mobile video game creators.
Together, our services offer a compelling and highly differentiated proposition to our clients who are ever more
focused on keeping gamers happy and engaged with their games.
Our remote working arrangements have continued to prove highly effective, enabling us to seamlessly supportclients across the world without any disruption, and Player Support has above industry average levels of
employee retention, with the strength of its culture also borne out in a strong employee net promoter score.
The market opportunity and outlook
Player Support growth is expected to continue in 2022, with the benefit of an expanded client base and morediverse services.
As gaming becomes ever more social, our capacity to moderate user generated content is becoming critical forour clients. In this context, social media is expected to continue its progression in 2022, while adding trust &safety services to our unique offer will address increasing demand from our clients.
Having launched consulting services in 2021, we plan to support more of our clients with this, to help themshape how customer support can be better integrated to their upcoming games and be supported by the most
relevant tools available.
Keywords’ deep games knowledge and focus, combined with its global footprint, means we remain the mostappropriate cultural fit for our clients for these services.
Our capacity to recruit from more countries will improve our recruitment pipeline and enable us to help ourclients scale in their desired languages, while our machine translation engine, Kantan, provides an effective
and efficient tool to support people-driven services.
Outlook
Trading in the first quarter has started well, and we continue to see strong demand across all of our service
lines. We expect the Group’s trading momentum in the second half of 2021 to continue through 2022, with theincreased flow of content to our later stage service lines alongside further strong demand for our earlier stage
services such as Game Development, Art Creation and Marketing.
The underlying video games market remains buoyant, with 2022 expected to be a particularly strong year for
new game launches, as developers and publishers look to capitalise on higher player numbers and create evermore sophisticated content to engage players in their games for longer.
While we are not immune to the inflationary pressures and competition for talent being seen in some of ourearlier stage services lines, we are well positioned to continue to attract skilled professionals due to theunrivalled, sustained variety of exciting work we do for our clients and the opportunities for career advancement
and working internationally we are able to offer, and we will continue to take account of our costs as we agree
projects with our clients, who are well aware of the industry-wide talent challenge.

Our flexible hybrid working model is now well established across all of our service lines and 70+ locations, andwith the lifting of restrictions around the world, we will see studios reopen and the previously experienced
limitations in some service lines removed. We are encouraged by the number of Keywordians returning tostudios around the world and look forward to seeing levels increase in the months to come.
Notwithstanding the situation in Russia, given the strong underlying trading across the Group aided, in part,by favourable currency movements, we are confident of delivering a performance for the full year towards the
top end of current market expectations.
As we continue to build our platform, we are actively reviewing acquisitions that would add expertise, particularly
in Game Development and Marketing, access to talent or technology, while retaining an interest in adjacentmarkets such as media and entertainment, which are increasingly converging with video game development
technology and marketing strategies.
The Board is confident Keywords remains well placed to continue its rapid growth and in its long-term successthanks to its strong position in a buoyant video games market, its increasingly sought after 10,000-people strong
resource base, its robust business model with a diversified range of services that are well balanced across thevideo games development cycle, and the financial strength to invest in our platform and people to build further
on the Group's successful organic and acquisitive growth track record.
Bertrand Bodson
Chief Executive Officer

Financial and Operating Review
Resilient performance in a period of significant disruption
Revenue
Revenue for 2021 increased by 37.1% to €512.2m (2020: €373.5m). This growth was supplemented by the fullyear impact of acquisitions in 2020 and the acquisitions made in 2021, but offset by the impact of currency
movements, particularly the weakening of the US dollar in the second half of the year.
Organic Revenue growth (which adjusts for the impact of currency movements and acquisitions) was up 19.0%(H1: 22.9%, H2: 15.5%, 2020: 11.7%). This was driven by a robust performance across all service lines, against
a comparative period where, in H1 2020, certain service lines were more severely held back at the early stagesof COVID-19, particularly in our Testing and Audio businesses. Further details of the trading performances ofeach of the service lines are provided in the CEO Review.
Gross margin
Gross margin in 2021 was €200.1m (2020: €141.8m) representing an increase of 41.1%. The gross margin
improved by 1.1% pts to 39.1% (2020: 38.0%) driven by certain cost savings as a result of working from homemeasures and the revenue shortfalls in the early stages of the pandemic in the prior year, particularly in our
Testing, Audio and Localization service lines that held back margins in 2020.
Operating costs
Adjusted operating costs increased by 33.1% to €90.0m (2020: €67.6m), reflecting a larger Group, but reduced
to 17.6% of revenue versus 18.1% in 2020. This reduction was driven by continued good cost control, together
with reductions in certain costs due to COVID-19, primarily resulting from remote working and lower travel,business development and marketing costs.
Adjusted EBITDA
Adjusted EBITDA increased 48.4% to €110.1m compared with €74.2m for 2020. The Adjusted EBITDA margin
in 2021 reflects the improved revenue noted above and this, combined with the benefit of ongoing reduction incertain costs due to COVID-19, resulted in an improvement in Adjusted EBITDA margin of 1.6% pts to 21.5%(2020: 19.9%).
Net finance costs
Net finance costs reduced by €6.2m to €2.4m (2020: €8.6m), largely driven by a €8.1m swing in the net foreignexchange loss which is described in more detail below. Underlying interest costs on bank debt (excluding IFRS
16 interest, deferred consideration discount unwind, bank charges and foreign exchange) remained in line withthe prior year at €1.0m (2020: €1.0m).
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 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 accounts a clear understanding of theunderlying profitability of the business over time. A breakdown of the adjusting factors is provided in the tablebelow:

Share option expense
Acquisition and integration costs
Amortisation and impairment of intangible assets
COVID-19 government subsidies claimed
Foreign exchange and other items

2021
€m
16.4
8.0
13.7
38.1

2020
€m
15.4
2.6
8.8
(9.2)
4.9
22.5

1.58m of options were granted under the Share Option Scheme and Long-Term Incentive Plan in 2021. This,
together with grants from previous years, has resulted in a non-cash share option expense of €16.4m in 2021
(2020: €15.4m). The increase is largely due to an increase in the fair value charge for the more recent grantscompared to previous years reflecting the increase in the share price.
One-off costs associated with the acquisition and integration of businesses amounted to €8.0m (2020: €2.6m).
This includes a one-off charge for fair value movements in respect of deferred consideration of €5.6m that isrequired to be taken through the profit and loss account (and therefore the cash outlay is €2.4m). Amortisationand impairment of intangible assets charge increased by €4.9m to €13.7m (2020: €8.8m), reflecting the recent
increased levels of acquisition activity.
Foreign exchange and other items amounted to a net charge of zero (2020: €4.9m). This includes €1.9m forthe unwinding of discount liabilities on deferred consideration (2020: €0.1m) offset by a net foreign exchange
gain of €2.0m (2020: €6.1m loss). Keywords does not hedge foreign currency exposures. The effect on theGroup’s results of movements 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 statement.
Profit before taxation
Profit before tax increased by €15.5m (+47.7% year on year) to €48.0m (2020: €32.5m). Adjusted Profit Before
Tax, which adjusts for the items described in the APMs section above increased by €31.0m (+56.4% year onyear) to €86.0m compared with €55.0m in 2020. This represents an improvement in Adjusted profit before tax
margin of 2.1% pts to 16.8% (2020: 14.7%). This is above the Group’s historical margin delivery of between
14% and 15% and partly reflects the short-term benefit from certain costs savings as a result of COVID-19
noted earlier that are not expected to continue.
Taxation

The tax charge increased by €2.9m to €13.9m (2020: €11.0m), largely reflecting the increase in the profit before
tax of the business. After adjusting for the items noted in the APMs section above and the tax impact arising on
the bridging items, the Adjusted Effective Tax Rate for 2021 was 21.6% compared with the rate of 21.5% in
2020.
Earnings per share
Basic earnings per share increased by 48.9% to 45.16c (2020: 30.32c), reflecting the increase in the statutory
profit after tax of 58.9%, partially offset by an 6.7% increase in the weighted average number of shares reflecting
the full year impact of the 10.5% equity placing in May of 2020. Fully diluted earnings per share, reflecting theimpact of unvested share options, increased by 49.7% to 42.98c (2020: 28.71c).
Adjusted earnings per share, which adjusts for the items noted in the APMs section and the tax impact arisingon the bridging items above, was 89.24c, representing an increase of 46.5% (2020: 60.93c).
Cash flow and net debt

2021

2020

ChangeCash flow statement

€m

€m

€m

Adjusted EBITDA

110.1

74.2

35.9

MMTC and VGTR

(4.5)

0.6

(5.1)

Working capital and other items

11.3

(2.2)

13.5

Capex - property, plant and equipment(PPE)(19.4)(13.9)(5.5)

Capex - intangible assets

(0.3)

(0.3)

0.0

Payments of principal on lease liabilities(10.0)

(8.2)

(1.8)

COVID-19 employment support subsidies

-

9.2

(9.2)

Operating cash flows

87.2

59.4

27.8

Net Interest paid

(2.7)

(1.6)

(1.1)

Free cash flow before tax

84.5

57.8

26.7

Tax

(23.9)(4.5)(19.4)

Free cash flow

60.6

53.3

7.3

M&A - acquisition spend(63.1)(39.9)(23.2)

M&A - acquisition and integration costs

(2.4)

(2.3)

(0.1)

-

1.4

(1.4)

Dividends paid

(0.6)

-

(0.6)

Shares issued for cash

5.3

111.7

(106.4)

Underlying increase / (decrease) in net
cash / (debt)

(0.2)

124.2

(124.4)

FX and other items

2.9

(3.4)

6.3

Investment income

Increase in net cash / (debt)

2.7

120.8

Opening net cash / (debt)

102.9(17.9)

Closing net cash / (debt)

105.6

102.9

(118.1)The Group generated Adjusted EBITDA of €110.1m in 2021, an increase of €35.9m from €74.2m in 2020.
There was a €5.1m decrease in respect of the amounts due for Multi-Media Tax Credits (MMTC) that are earnedin the year of production and are collected a year in arrears, and Video Games Tax Relief (VGTR). Working
capital and other items resulted in an increase of €13.5m compared to 2020 with working capital increasing by€6.7m, mainly due to lower accrued income, while other items improved by €6.8m from phasing differences.
Investment in property, plant and equipment amounted to €19.4m (2020: €13.9m), reflecting a 39.60% increase
and reflecting a return to more normal levels of spending following the COVID-19 disruption in the prior periodthat resulted in a reduction in both the level of equipment expenditure and expansionary capex. Property lease
payments of principal of €10.0m were 22.0% higher than the prior period (2020: €8.2m), mainly related toacquisitions in the period.
The Group received no COVID-19 government employment retention subsidies in 2021, resulting in operating
cash flows of €87.2m (2020: €59.4m), and an increase of €27.8m on 2020.
Net interest payments were €2.7m, an increase of €1.1m on 2020 as a result of the fees associated with therefinancing of the Revolving Credit Facility which is discussed further below. Tax payments amounted to €23.9m(2020: €4.5m) an increase of €19.4m on the same period when the Group benefitted from timing differencesthat resulted in fewer payments in the period in respect of the 2020 tax payable which were subsequently settled
in 2021.
This resulted in Free Cash Flow of €60.6m (2020: €53.3m), an increase of €7.3m on the prior period. Adjusted
Free Cash Flow before tax, which adjusts for capital expenditure that is supporting growth in future periods andthe COVID-19 government employment retention subsidies in the prior year, was €92.3m in 2021, an increaseof €38.9m (+72.8%) on the levels delivered in 2020. This resulted in an Adjusted Cash Conversion rate of
107.3% (2020: 97.2%). A reconciliation of Free Cash Flow to Adjusted Free Cash flow before tax is provided
in the Alternative Performance Measures (APMs) note.
Cash spent on acquisitions totalled €65.5m of which €63.1m was in respect of the cash component of bothcurrent and prior year acquisitions and €2.4m was in relation to acquisition and integration costs.
These items, together with foreign exchange movements of €2.9m resulted in an increase of net cash of €2.7m
in 2021 (2020: increase in net cash: €120.8m) and a closing net cash of €105.6m (2020: net cash €102.9m).
Balance sheet and liquidity
The Group funds itself primarily through cash generation and a Revolving Credit Facility (RCF). In December
2021, the Group entered into a new €150m unsecured multicurrency RCF with a syndicate of four lenders,which replaces the Company’s previous €100 million secured RCF. The lender group is made up of Citi
Commercial Bank, Fifth Third Bank, National Association, HSBC Continental Europe and ING Bank N.V., Dublin
Branch. The new facility is for an initial three-year tenor to December 2024, with an option to extend the termby two further one-year periods at the Company's request, subject to lender consent. The new RCF
has financial covenants that are consistent with the previous facility and has an accordion feature that allows it
to be increased by a further €50 million again subject to lender consent. The RCF is subject to two financial
covenants that are calculated in accordance with the facility agreement:
Leverage: Maximum Total Net Borrowings to Adjusted EBITDA ratio of 3 times; andInterest cover: Minimum Adjusted Operating Profit to Net Finance Costs ratio of 4 times.

The Group entered the year with a strong balance sheet, with net cash (excluding IFRS 16 leases) of €102.9m
as at 31 December 2020. Following €65.5m of cash deployed in the period to support the Group’s value
accretive M&A programme, at the end of 2021, the Group had net cash (excluding IFRS 16 leases) of €105.6m
and undrawn committed facilities of €150m.
Dividend
The Board's progressive dividend policy seeks to reflect the Group's continued growth in earnings and strong
cash generation, balanced with the need to retain the resources to fund growth opportunities, in line with ourstrategy.
Following the interim dividend payment of 0.70p per share in October 2021, the Board has recommended a
final dividend of 1.45p per share, which will make the total dividend for the year ending 31 December 2021,
2.15p per share, an increase of 10% per annum over the 2018 full year dividend (2018: 1.61p per share).
Subject to shareholder approval at the Annual General Meeting, the final dividend will be paid on 17 June 2022
to all shareholders on the register at 27 May 2022 and the shares will trade ex-dividend on 26 May 2022. The
cash cost of the final proposed dividend will be an estimated €1.3m, subject to currency fluctuations.
Guidance for 2022
We have made a good start to the year with the Organic Revenue growth momentum in the second half of 2021
flowing into 2022, and total revenue benefitting from favourable currency movements compared to 2021.
2021 Adjusted profit before tax margins have benefitted from certain COVID-19 costs savings that are notsustainable and are hence expected to move back towards the 14–15% historical range during 2022 and the
Adjusted Effective Tax rate is expected to be in line with the 2021 rate of ~21%.
We are anticipating capex in line with 2021 relative to revenue, reflecting continued expansionary capex andinvestment in equipment to support the new console cycle and an overall Adjusted Cash Conversion rate of~80%, representing a reduction on 2021 as some of the phasing benefits in 2021 unwind.
Notwithstanding the situation in Russia, given the strong underlying trading across the Group aided, in part,by favourable currency movements, we are confident of delivering a performance for the full year towards the
top end of current market expectations*.
Jon Hauck
Chief Financial Officer* As at 28 March 2022, company compiled analysts' forecasts gave a consensus for FY 2022 of €597m of revenue(range: €587-610m) and €92m of adjusted profit before tax (range: €90-95m).

Consolidated statement of comprehensive income

Revenue from contracts with customers
Cost of sales
Gross profit
Investment income
Share-based payments expense

Note
4
5
5
23

Years ended 31 December
2021
2020
€'000
€'000
512,200
373,538(312,086)(231,766)
200,114141,772
1,437(16,394)(15,350)

Costs of acquisition and integration
Amortisation and impairment of intangible assets
COVID-19 government subsidies claimed
Total of items excluded from adjusted profit measures
Other administration expenses
Administrative expenses
Operating profit

5
11(7,972)(13,688)(38,054)(111,695)(149,749)
50,365(2,650)(8,808)9,231(17,577)(84,513)(102,090)
41,119Financing income
Financing cost
Profit before taxation
Taxation
Profit after taxation

6
6

2,045
(4,427)47,983(13,875)
34,10876(8,701)32,494(11,027)
21,467

27

(421)

8,228

(4,909)14,581
56,944(10,843)
5,294

34,175(67)
34,10821,552(85)
21,46757,011(67)
56,944

5,379
(85)
5,294

€ cent45.16
42.98€ cent
30.32
28.71

7

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 orloss
Exchange gain / (loss) in net investment in foreign
operations
Exchange gain / (loss) on translation of foreign
operations
Total comprehensive income / (expense)

20

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

Total comprehensive income / (expense) attributable to:
Owners of the parent
Non-controlling interest

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

The notes form an integral part of these consolidated financial statements.
On behalf of the Board
Bertrand Bodson
Director
30 March 2022

Jon Hauck
Director

Consolidated statement of financial position

Note
Non-current assets

At 31 December
2021
2020
€'000
€'000

Intangible assets
Right of use assets
Property, plant and equipment
Deferred tax assets
Investments

11
12
13
21
14

Current assets
Cash and cash equivalents
Trade receivables
Other receivables
Corporation tax recoverable

353,943
35,99136,01821,468175
447,595

240,81027,807
26,41914,649309,685

105,71068,067
49,1106,764
229,651

103,070
47,832
38,665
189,567

11,122
108,423
81
12,635
11,217
143,478
86,173

8,170
62,95873
12,568
7,361
91,13098,437

17
20
18
21
19

18,254
3,088
48
13,84026,41861,648472,120

1,994
2,693
122
10,57521,50336,887371,235

22
22
22
22

904
2,185
38,549273,677
12,821(1,997)48,19397,905472,237(117)
472,120879
13,047
22,951
250,276(9,988)(1,997)31,79964,318371,285(50)
371,235

15
16

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

17
18
19

Net current assets / (liabilities)
Non-current liabilities
Other payables
Employee defined benefit plans
Loans and borrowings
Deferred tax liabilities
Lease liabilities
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 payment reserve
Retained earnings
Non-controlling interest
Total equity

22

The notes form an integral part of these consolidated financial statements. The financial statements were approved
and authorised for issue by the Board on 30 March 2022.
On behalf of the Board

Bertrand Bodson
Director
30 March 2022

Jon Hauck
DirectorConsolidated statement of changes in equity

Mergerreserve

Foreignexchangereserve

Sharesheld in
EBT

Sharebased
payments
reserve

Retainedearnings

Total
attributableto ownersof parent

Noncontrollinginterest

Total
equity

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

5,310

20,718132,712

5,764(1,997)

16,44943,187

222,92335

222,958

-

-

-

-

-

-

-

-

-

-

-

21,552

21,552(85)

21,467(15,752)

-

-

(421)

(16,173)-(16,173)

-

-

-

-

(15,752)--

21,131

5,379

(85)

5,294

Shares issued for cash
Share-based payments
expense77--

109,372

-

-

-

-

109,449-

109,449--

Share options exercised
Acquisition-related issuance ofsharesContributions by andcontributions to the owners

16

-

-

-

-

-

15,350-15,350-15,350

2,233

-

-

-

-

-

2,249

-

2,249

6

7,737

-

8,192

-

-

-

-

15,935-

15,935

99

7,737

2,233

117,564

At 31 December 2020

879

13,047

22,951

250,276--

15,350-142,983-

142,983(9,988)(1,997)31,79964,318371,285(50)

371,235

Profit / (loss) for the period

-

-

-

-

Other comprehensive income
Total comprehensive income
for the period
Contributions by andcontributions to the owners:
Share-based payments
expense

-

-

-

-

-

-

-

34,17534,175(67)

34,10822,809--27

22,836-

22,836----22,809--34,20257,011(67)

56,944

SharecapitalSharecapital - tobe issued

Sharepremium

€'000

€'000

780

Profit / (loss) for the period
Other comprehensive income
Total comprehensive income
for the period
Contributions by andcontributions to the owners:

At 01 January 2020

-

-

-

-

-

-

16,394-

16,394-

16,394

11

-

4,929

-

-

-

-

-

4,940

-

4,940

Employee Share Purchase Plan

-

-

398

-

-

-

-

-

398

-

398

Dividends
Acquisition-related issuance ofsharesContributions by andcontributions to the owners

-

-

-

-

-

-

-

(615)

(615)

-

(615)

14

(10,862)

10,271

23,401----

22,824-

22,82425(10,862)

15,59823,401--

16,394(615)

43,941-

43,941

At 31 December 2021

904

2,185

38,549273,677

12,821(1,997)48,19397,905472,237(117)

472,120

Share options exercised

Consolidated statement of cash flows

Note
Cash flows from operating activities
Profit after taxation
Income and expenses not affecting operating cash flows
Depreciation - property, plant and equipment
Depreciation - right of use assets
Amortisation and impairment of intangible assets
Taxation
Share-based payments expense
Fair value adjustments to contingent consideration
Fair value adjustments to right of use assets
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
12
6
6
6
20
6

Years ended 31 December
2021
2020
€’000
€’000
34,10821,467

11,661
10,473
13,68813,875
16,394
5,567
1,882
985
(62)
419
1,040
583
76,505

8,983
8,402
8,808
11,027
15,350
(66)
434
132
843
(76)
354
1,071
1,874
57,136

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
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
Other investment
Interest received
Net cash generated by / (used in) investing activities
Cash flows from financing activities
Repayment of loans
Drawdown of loans
Payments of principal on lease liabilities
Interest paid on principal of lease liabilities
Dividends paid
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(15,117)(4,502)
3,341
20,1583,880(23,948)
90,545(4,255)555(3,902)9,878
2,276(4,459)76,420

27
17
13
11

(48,697)(14,393)(19,360)
(315)
(175)
62
(82,878)(37,447)(2,489)(13,908)(259)
76(54,027)

18
18

(80)
(9,953)
(985)
(615)
5,338
(1,753)(8,048)(381)
3,021
103,070
105,710(64,030)
4,500(8,170)(843)
111,698(879)
42,27664,669(3,426)
41,827103,070

622

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 the financial statements of the Company and its subsidiaries (the “Group”) made up to 31
December 2021.
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) and the financial statements
are presented in euro (€) which is the functional currency of the Group.
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 and Company financial statements. In doing so, the Directors have considered the uncertain natureof the Ukranian crisis and the COVID-19 pandemic, but have noted:
 The net 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 and to move work to other locations
where studios are temporarily closed;
The historical resilience of the broader video games industry in times of economic downturn; andThe 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 net cash of €105.6m as at 31 December
2021, and committed undrawn facilities of €150m under the Revolving Credit Facility (“RCF”).
The Directors have applied downside sensitivities to the Group’s cash flow projections to evaluate the Group’s ability
to withstand a further prolonged period of studio closures as a result of the COVID-19 pandemic, leading to a
reduction in production capability and a worst case scenario where all Russian production capacity was excluded
from the projections. Under this 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 the foreseeable future, a period considered to be atleast twelve months from the date of these financial statements and therefore the going concern basis ofpreparation continues to be appropriate.
New Standards, Interpretations and Amendments effective 01 January 2021

A number of new amendments and interpretations to accounting standards are effective from 01 January 2021,
including:

COVID-19-Related Rent Concessions - further amendment to IFRS 16;
Interest Rate Benchmark Reform - further amendments to IFRS 9, IAS 39 and IFRS 7.

These amendments and interpretations have not resulted in any Group accounting policy changes, and have not had
a material effect on the Group’s financial statements.
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 future accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 01 January 2022:


Onerous Contracts - Cost of Fulfilling a Contract - amendments to IAS 37;
Property, Plant and Equipment: Proceeds before Intended Use - amendments to IAS 16;
Annual Improvements to IFRS Standards 2018-2020 - amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41; andReferences to Conceptual Framework - amendments to IFRS 3.

The Group does not expect these amendments or any other standards issued by the IASB, but not yet effective, tohave a material impact on the Group.

2

Significant 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 to affect those variable returns. Control is reassessed whenever facts
and circumstances indicate that there may be a change in any of these elements of control.
De-facto control exists in situations where the Company has the practical ability to direct the relevant activities of theinvestee 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; andHistoric 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 the reporting
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 and circumstances which would have affected the amounts recognised
as of that date, and any adjustments to the provisional values allocated to the consideration, identifiable assets or
liabilities (and contingent liabilities, if relevant) are made within the measurement period, a period of no more than
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. The fair value of contingent consideration at acquisition
date is arrived at through discounting the expected payment (based on scenario modelling) to present value. In
general, in order for contingent consideration to become payable, pre-defined profit and / or revenue targets must be
exceeded. At each balance sheet date, the fair value of the contingent consideration is revalued, with the expected
pay-out determined separately in respect of each individual acquisition and any change recognised in the statement ofcomprehensive income.
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 deferred consideration is classified
as an equity arrangement and the value of the shares is fixed at the date of the acquisition. Deferred consideration may
also be in the form of cash consideration payable at a future defined date. Such consideration is recognised at fair value
at the acquisition date and is split between current liabilities and non-current liabilities depending on when it is due.
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 theidentifiable assets, liabilities and contingent liabilities acquired. The cost comprises the fair value of assets given,liabilities assumed and equity instruments issued, plus the amount 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. Acquisition-related costs arerecognised immediately as an expense in the periods in which the costs are incurred and the services are received.
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 at fair value. The fair value attributed is determined by discounting the expected future
cash flows generated from the net margin of the business from the 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 isdeemed 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 are recognised as assets where it is probable that the use of the asset will generate future economic
benefits and where the costs of the asset can be determined reliably. Other intangible assets that are acquired by theGroup are stated at cost less accumulated amortization (see below) and impairment losses, if any. Subsequent
expenditures on capitalised intangible assets are capitalised only when they increase the future economic benefits
embodied in the specific assets to which they relate. All other expenditure is expensed as incurred. Other intangible
assets with definite useful lives are amortised from the date they are available for use on a straight-line basis over theiruseful lives, being the estimated period over which the Group will use the assets. Residual amounts, useful lives and theamortization methods are reviewed at the end of every accounting period.
Development costs are capitalised as an intangible asset if all of the following criteria are met:








The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
The asset will generate probable future economic benefits and demonstrate the existence of a market or the usefulness of the intangible
asset if it is to be used internally;
The availability of adequate technical, financial and other resources to complete the development and to use or sell it; andThe ability to measure reliably the expenditure attributable to the intangible asset during its development.

Following initial recognition of the development expenditure as an intangible asset, the cost model is applied
requiring the intangible asset to be carried at cost, less any accumulated amortization and accumulated impairment
losses. The intangible asset is amortised on a straight-line basis over the period of its expected benefit, starting fromthe date of full commercial use of the product. 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 annuallyat the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes incircumstances 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 to sell), the asset is written down
accordingly.
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 initial recognition to each of the Group’s CGUs that are expected tobenefit from a business combination that gives rise to the goodwill.
The Group has one CGU. This CGU represents the lowest level at which goodwill is monitored by the Group and thelowest level at which management captures information for internal management reporting purposes about thebenefits of the goodwill. Impairment charges are included in profit or loss, except to the extent they reverse gains
previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed.
Investments
Investments are held at cost where the Group does not have control and is not able to exercise significant influence
over the investee.
Cash and Cash Equivalents

For the purpose of presentation in the Statements of financial position and on the Statements of cash flows, cash andcash equivalents include cash on hand and on call deposits with financial institutions.
Foreign Currency

The consolidated financial statements are presented in euro, which is the presentation currency of the Group and thefunctional 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 are translated at the rates ruling at the reporting date. Exchange
differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit
or loss.
On consolidation, the results of overseas operations are translated into euro at rates approximating when thetransactions took place. All assets and liabilities 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 are recognised in othercomprehensive 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 part of the Group’s net investment in the overseas operation concerned are classified to othercomprehensive income and accumulated in the foreign exchange reserve on consolidation. On disposal of a foreign
operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation
up to the date of disposal are transferred to the consolidated statement of comprehensive income as part of the profit
or loss on disposal.

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 is separately assessed, the transaction
price is allocated to each obligation, and related revenues are recognised as services or assets are transferred to thecustomer. 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 to separate 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 theservice is delivered and projects are managed with the customer. For time-and-materials contracts, other than tracking
and valuing time expended, significant judgement is not normally involved. For milestone based contracts, progress isgenerally 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 the performance obligations. In such circumstances estimates
are revised. These revisions may result in increases or decreases in revenue or costs and are 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 isrecognised as a contract liability (Deferred Revenue), until either revenue is recognised or the consideration isrefunded.
Revenue is derived from eight main service groupings:








Art Creation – Art Creation 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 isused 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 satisfactionof 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.
Marketing – Marketing services include game trailers, marketing art and materials, PR and full brand campaign strategies. Contracts can beeither time-and-materials based or milestone based, with performance obligations satisfied over time. Contracts are generally short term induration; however, for longer contracts the input method is used to measure progress. Time-and-materials based contract revenue isrecognised 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 bemeasured 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 and talentmanagement through pre-production, audio direction, recording, and post-production, including native language quality assurance of therecordings. Audio contracts may also involve music licensing or selling music soundtracks. Audio service contracts are typically milestone
based, with performance obligations satisfied over time. Audio services contracts are generally short term in duration; 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, and related 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 shortterm 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 term in duration.
Revenue is recognised as the related services are rendered.
Player Support – Player Support relates to the live operations support services such as community management, player support andassociated services provided to producers of games to ensure that consumers have a positive user experience. Contracts are typically timeand-materials based and performance obligations are satisfied over time. Contracts are generally long term in duration. Revenue isrecognised as the related services are rendered.

Multimedia Tax Credits / Video Game Tax Relief

The multimedia tax credits (“MMTC”) received in Canada and video games tax relief (“VGTR”) in the UK are tax credits
related to staff costs. Tax credits are recognised as income over the periods necessary to match the credit on asystematic 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), attheir fair value when there is a reasonable assurance that the grant will be received and all attaching conditions havebeen complied with.
Share-based Payments

The Company issues equity-settled share-based payments to certain employees and Directors under a share options
plan and a Long-Term Incentive Plan (“LTIP”). In 2022, a number of Executive Directors also received conditional awards
under the rules of the LTIP Plan (“Salary Shares”).
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period. Other thancontinuous service, grants do not have 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 toequity reserves. The Company has no legal or constructive obligation to repurchase or settle the options in cash.
Additional employer costs, including social security taxes, in respect of options and awards are expensed over thevesting period with a corresponding liability recognised. The liability recognised depends on the number of options thatare expected to be exercised, and the liability is adjusted by reference to the fair value of the options at the end of eachreporting period.
Where share-based payments are issued to employees of subsidiary companies, the annual cost of the options arerecharged to the subsidiary company through an inter-company recharge.
Employee Share Purchase Plan
In 2021, the Group introduced an Employee Share Purchase Plan (“ESPP”). The ESPP allows individual employees thepossibility to save up to €500 monthly and acquire KWS shares discounted by 10% on the market price at the date ofpurchase. The plan has bi-annual purchase periods, with share-based benefits expensed within the period.
Share Option Plan

These are measured at fair value on the grant date using a Black-Scholes option pricing model which calculates the fairvalue of an option by using the vesting period, the expected volatility of the share price, the current share price, theexercise price and the risk-free interest rate. The fair value of the option is amortised over the vesting period, with onethird 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 the Company's share price (stock symbol: KWS) performance versus thedesignated Share Index in terms of shareholder return over a three-year period. For the awards granted up to 2015, onethird of the share options vested if the Company 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 pro-rated return between 10% if the TSR matches the Index, to 100% if the TSR exceeds
the Index by 45%. The scheme was further amended in 2018 to 100% vesting if the TSR exceeds the Index by 20%, and a
pro-rated 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 pro-rated 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.
Salary Shares
Salary shares are measured at fair value on the grant date. As the only vesting condition is continuous service, thefair value of the shares is amortised over the vesting period.
Dividend Distribution

Final dividends are recorded in the Group’s financial statements in the period in which they are approved by theGroup’s shareholders. Interim dividends are recognised when paid.
Income Taxes and Deferred Taxation

Provision for income taxes is calculated in accordance with the tax legislations and applicable tax rates in force at thereporting 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 position differs 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; andInvestments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it isprobable 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 the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:The same taxable Group company; orDifferent Group entities which intend either to settle current tax assets and liabilities on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts ofdeferred tax assets or liabilities are expected to be settled or recovered.

Government Subsidies

Government subsidies are recognised at their fair value when there is a reasonable assurance that the subsidy will bereceived and all attaching conditions have been complied with. Subsidies are recognised in the period the subsidy isdesignated to compensate.
Property, Plant and Equipment

Property, plant and equipment comprise computers, leasehold improvements, and office furniture and equipment, andare stated at cost less accumulated depreciation. Carrying amounts are reviewed for impairment whenever events orchanges in circumstances indicate that their carrying amount may not be recoverable. Where the carrying amount ofan 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 ofacquisition.
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 thelease

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in theConsolidated statement of comprehensive income.

Financial Assets

The Group’s most significant financial assets comprise trade and other receivables and cash and cash equivalents in theConsolidated statement of financial position, whereas the Company’s most significant financial assets comprise intergroup receivables.
Trade Receivables
Trade receivables, which principally represent amounts due from customers, are recognised at amortised cost as theymeet 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 trade receivables, which requires the use of alifetime expected loss provision.
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.
Accrued Income from Contracts with Customers
Accrued income from contracts with customers, arising from Revenue from Contracts with Customers, is recognised inaccordance with our Revenue Recognition policy, as discussed separately in this note. The Group applies the simplified
approach to assessing expected credit losses in relation to such assets, as their maturities are less than twelve months.
Based upon the recoverability of contract assets at year end, no significant expected credit loss provision has been
applied.
Share Capital

Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definitionof a financial liability. The Group’s ordinary shares are classified as equity instruments.
Financial Liabilities

Contingent consideration is initially recognised at fair value and subsequently re-measured through the profit and loss.
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.
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 aperiod 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 is measured 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 of any incentives received).
The Group depreciates the right of use assets on a straight-line basis from the lease commencement date to the earlierof the end of the useful life of the right of use asset or the end of the lease term. The Group also assesses the right ofuse asset for impairment when such indicators exist. At the commencement date, the Group measures the leaseliability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in thelease 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 insubstance 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 isremeasured to reflect any reassessment or modification, or if there are changes to in-substance fixed payments. Whenthe 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 right of 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 of use 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 deducted from equity on the face of the Consolidated statement of financial position. No gain orloss is recognised in relation to the purchase, sale, issue or cancellation of the parent company’s ordinary shares.

3

Critical Accounting Estimates and Judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually
evaluated based on historical experience and other factors, including expectations of future events that are believed tobe reasonable under the circumstances. In the future, actual experience may differ from these estimates andassumptions.
Judgements
The judgements, apart from those involving estimations, that management have made in the process of applying theGroup’s accounting policies and that have the most significant effect on the amounts recognised in the financial
statements, are outlined below.
Groupo Functional Currency: The Directors have considered the requirements of IAS 21 in determining thecurrency that most faithfully represents the economic effects of the underlying transactions, eventsand conditions to determine the Group's functional currency. Detailed consideration has been given toboth the Primary and Secondary Indicators in forming this conclusion. The Primary Indicators relate torevenues, regulation, competitive forces and costs, while the Secondary Indicators are primarily
concerned with financing the business and the currency in which receipts from operating activities areusually retained. With a mix of currencies dominating the indicators, there is no clear single currency
that influences the Group; however, the euro remains marginally the most dominant when all factors
are considered. Therefore, the Directors consider the euro as the currency that most faithfully
represents the economic effects of the underlying transactions, events and conditions.
o 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 ofjudgement. Acquisitions may also result in intangible benefits being brought into the Group, some ofwhich 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 are recognised as
separate assets where revenues are recurring in nature and material revenues have been generated
with the customer for a continuous period of three years. For the Game Development service line, thekey 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 thanrelationship based. Therefore, neither customer contracts nor customer relationships are typicallyrecognised on the acquisition of a Game Development business.
o IFRS 16 Leases: The Group has determined that the Group’s incremental borrowing rate is theappropriate rate to use to discount lease liabilities. The Group has applied judgement to determine thelease 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 of use assets recognised.
o 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 purchase agreement) includes put and call options (“theForward”) that require the sellers to sell, or require the Group to buy, the remaining 15% shareholdingin 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 acquisition date, with deferred contingent consideration payable at afuture date. In doing so, the Board considered whether the risks and rewards 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 other conditions 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 asingle linked transaction in which 100% control is gained, with the Forward recognised at fair value, asa financial liability within Deferred and contingent consideration (note 17), and no Non-controllinginterest recognised on the acquisition. Any subsequent re-measurement required due to changes in
the fair value of the liability will be recognised in the Consolidated statement of comprehensive
income.
Estimates and Assumptions
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually
evaluated based on historical experience and other factors, including expectations of future events that are believed tobe reasonable under the circumstances. In the future, actual experience may differ from these estimates andassumptions.
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 game tax relief, leasing and the valuationof 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 to thecarrying value of the associated balances in the subsequent financial year.

4

Revenue from Contracts with Customers and Segmental Analysis

Revenue from Contracts with Customers
Revenue recognised in the reporting period arises from contracts with customers, and is predominantly recognisedover time. There were no significant amounts of revenue recognised in the reporting period that were included in acontract liability balance at the beginning of the reporting period, or from performance obligations satisfied in theprevious reporting period.
Revenue by line of business

Art Creation*
Marketing*Game Development
Audio
Functional Testing
Localization
Localization Testing
Player Support

2021
€'000
49,326
46,183
138,852
61,33392,68650,791
27,09145,938512,200

2020€'000
38,903
18,42180,01747,23278,47945,35723,32341,806
373,538*The prior year comparatives have been re-classified to separately report Marketing services, previously reported within the Art Creation service line.

For many contracts, operations are completed across multiple sites. Analysis of revenues by geographical regions ispresented by producing location, which may not reflect the jurisdiction from which the final invoice to the client israised, or the region of the Group’s customers, whose locations are worldwide.
Geographical analysis of revenues, by producing location *CanadaUnited States
United Kingdom

2021
€'000
97,74896,06094,4262020€'000
88,71350,50458,645

ItalyRussiaJapan
PolandChina
India
Ireland
Philippines
Spain
FranceSingapore
Australia
Other32,44829,424
21,89821,397
20,35018,64013,94813,461
10,331
8,436
7,856
7,408
18,369512,200

25,21027,987
20,944
12,121
18,42911,36912,291
12,021
7,642
7,771
6,798
13,093
373,538*The prior year comparatives have been re-classified from billing entity location to producing entity location to align to the current year presentation, as the Directors consider this measure to be more meaningful.

No single customer accounted for more than 10% of the Group’s revenue in either year presented.
Revenue Expected to be Recognised
For Game Development, games are developed to an agreed specification and time schedule, and often have delivery
schedules and / or milestones that extend well into the future. The following are Game Development revenues
expected to be recognised for contracts with a schedule of work that extends beyond one year, representing theaggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partiallyunsatisfied) as at the end of the reporting period:

Revenue expected to be recognised
At 31 December 2021
At 31 December 2020

Total
undelivered€'000
55,294
13,538

Scheduledcompletion
within 1
year€'000
44,973
12,991

Scheduledcompletion
1-2 years
€'000
9,319
547

Scheduledcompletion
2-5 years
€'000
1,002
-

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 also availed of for Game Development contracts ofless than one year in duration.
Segmental Analysis
Management considers that the Group’s activity as a single source supplier of services to the gaming industry
constitutes one operating and reporting segment, as defined under IFRS 8.
Management reviews the performance of the Group by reference to Group-wide profit measures and the revenues
derived from seven main service groupings.
There is no allocation of operating expenses, profit measures, assets and liabilities to individual product groupings.
Accordingly, the disclosures above are provided on a Group-wide basis.
Activities are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker. The chief operating decision-maker has been identified as the executive management team made up of the
Chief Executive Officer and the Chief Financial Officer.
Geographical analysis of non-current assets from continuing businesses *

2021
€'000
171,126
114,871
45,52831,096
15,612
10,025
7,548
8,296
8,422
5,336
4,988
6,955
4,001
2,763
3,275
2,452
5,301
447,595

2020€'000
133,026
58,41427,882
13,928
10,117
7,302
7,492
22,860
5,391
5,502
6,359
2,379
1,839
1,958
5,236
309,685

2021€'000
320,159(20,966)
12,893312,086

2020€'000
238,664(15,593)
8,695
231,766

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
Investment income

2021
€'000
11,661
10,473
13,688
7,972
605
1,531
-

2020
€'000
8,983
8,402
8,808
2,650
553
1,747
(1,437)

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
Acquisition team and related costs

2021
€'000
1,099
191
5,567
454
313

2020
€'000
307
743
(66)
649
247

United States
United Kingdom
Australia
CanadaItaly
Switzerland
FranceChina
IrelandGermany
Spain
Japan
India
Romania
PolandMexicoOther*The prior year comparatives have been re-classified to align to the current year presentation, as the Directors consider this measure to be more meaningful.

5

Cost of Sales and Operating Profit

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

Fair value adjustments to right of use assets (note 12)
Other re-organisation and restructuring costs

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

Investment income
Gain on disposal of investment

348
7,972

434
336
2,650

2021
€'000

2020
€'000

314
278

290
250

13
605

13
553

2021
€'000
-

2020
€'000
(1,437)(1,437)

The Group acquired a minor holding in Hutch Games Limited, when Keywords purchased Liquid Development studio in
2015. During 2020, Hutch Games was acquired and the Group received proceeds of USD$1.7m (€1.4m) in December
2020, and will become entitled to receive further consideration of up to USD$450K over the period 2022 through 2025,
subject to earnout targets being met.

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

2021
€'000

2020
€'000

62
1,983
2,045

76
76

(520)
(1,040)(985)(1,882)(4,427)(2,382)(552)(1,071)(843)(132)(6,103)(8,701)(8,625)

2021
€'000

2020
€'000

17,632(3,757)
13,875

13,899(2,872)
11,027

Taxation

Current income tax
Income tax on profits of subsidiaries
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 intax 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

2021
€'000
47,983
10,527
(261)

2020
€'000
32,4948,071(1,302)

148
3,430
(174)
(951)
(363)
204
658
657
13,875

402
3,846
258
(892)
(3)
477
548
(378)
11,027

21.9%

24.8%

The Group’s subsidiaries are located in different jurisdictions and are taxed on their residual profit in those jurisdictions.
The effective tax rate will vary 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

2021
€'000

2020
€'000

Exchange gain / (loss) in net investments foreign operations
Tax (expense) / benefit
Net of tax amount

8,228(1,029)7,199(4,909)614(4,295)

27
27

(421)
(421)

14,581
14,581(10,843)(10,843)

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 amount8

Earnings per Share

Basic
Diluted2021€ cent
45.16
42.98

2020
€ cent30.32
28.71

Earnings
Profit for the period from continuing operations€'000
34,108€'000
21,467

Weighted average number of equity shares
Basic (i)Diluting impact of share options (ii)
Diluted (i)Number
75,526,296
3,826,990
79,353,286

Number
70,800,455
3,959,878
74,760,333

Number219,146

Number
242,077(i) Includes (weighted average) shares to be issued:(ii) Contingently issuable ordinary shares have been excluded where the conditions governing exercisability have not beensatisfied:
NumberNumber
LTIPs
903,656
Share options
903,656-

Details of the number of share options outstanding at the year-end are set out in note 23.

9

Dividends

Dividends paid
Interim
Dividends paid to shareholders 2021

Recommended
Final

In
respect Approval
of
date
2021
Sep-21€ cent
per
share
0.81
0.81

ExpectedIn€ centrespect Approval
per
of
date
share
2021
Mar-22
1.72

Pence
STG
per
share
0.70
0.70

Total
dividend
€'000
615
615

Pence Expected
STG
total Expect
per dividend payme
share
€'000
da
1.45
1,299
Jul-

At 31 December 2021, Retained earnings available for distribution (being Retained earnings plus Share-based payments
reserve) in the Company were €47.7m (2020: €25.5m). In addition, certain amounts within Merger reserve areconsidered distributable (see note 22).
In light of COVID-19, the Directors did not recommend any dividend payments for 2020. Dividend payments wereresumed in 2021, and 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 (asdividends) are only remitted where there are minimal or no tax consequences.
10 Staff Costs

Total staff costs (including Directors)
Salaries and related costs
Social welfare costs

Payme
da
Oct-

2021
€'000
263,036
30,4552020€'000
198,064
21,623

Pension costs
Share-based payments expense

6,685
16,394
316,570

5,212
15,350240,249

Average number of employees
Operations
General and administration

2021
8,821
672
9,493

2020
7,768
585
8,353

2021
€'000
1,569
201
25
698
2,493

2020
€'000
1,188
366
45
1,604
3,203

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

The key management compensation comprises compensation to eleven Directors of Keywords Studios plc during theyear (2020: seven).

11 Intangible Assets

Intellectual
property /Customer Development
Goodwill relationships
costs
€'000
€'000
€'000
Cost
At 01 January 2020
Recognition on acquisition of subsidiaries
AdditionsExchange rate movement
At 31 December 2020
Recognition on acquisition of subsidiaries
AdditionsExchange rate movement
At 31 December 2021
Accumulated amortisation
At 01 January 2020
Amortisation charge
Impairment charge
Exchange rate movement
At 31 December 2020
Amortisation charge
Exchange rate movement
At 31 December 2021
Net book value
At 01 January 2021
At 31 December 2021
* Please note: fully depreciated Music licences have been removed from the prior year comparatives.

Total*€'000

175,639
47,112(10,587)
212,164
97,918
14,955325,037

37,62017,673(2,870)52,423
11,502
4,400
68,325

3,527
259
13
3,799
315
4,114

216,786
64,785259(13,444)
268,386
109,420315
19,355
397,476

147
147
147

20,0186,421(1,261)
25,17813,261
2,269
40,708

327
1,913
11
2,251
427
2,678

20,0186,748
2,060(1,250)27,576
13,6882,269
43,533

212,017324,890

27,24527,617

1,548
1,436

240,810
353,943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 is launched.
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 one to five year growth rate and a terminal value calculated using a long-term growth rate
projection. The discount rate used of 12.5% (2020: 12.5%) is based on the Board’s assessment of the weighted average
cost of capital (“WACC”) of the Group. The WACC assessment is supported by an annual independently calculated
report, using the Capital Asset Pricing Model. However, the Board has excluded the impact of short-term market
volatility on these calculations in determining the Group WACC.

Key assumptions

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

Actual2021

Sensitivity analysis
2020
2021

2020

2021

10%

10%

15%

15%

5%

5%

2%
792
325

2%
532
212

2%
947

2%
636

2%
673

2%
452

2020

The value in use calculations were consistently calculated year over year, with no significant changes in theassumptions made. The result of the value in use calculations was that no impairment is required in this period. The
Directors consider that no reasonably probable change in the assumptions would result in an impairment.
Specific impairment reviews
In the prior year, due to the uncertainty caused by COVID-19, an impairment charge of €2,060k was recognised, related
to intangible assets in certain early technology pre-revenue businesses, fully impairing their carrying value.
12 Right of Use Assets

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

Cost
At 01 January
Additions
Recognition on acquisition of subsidiaries
Exchange rate movement
At 31 December
Accumulated depreciation
At 01 January
Depreciation charge
Impairment charge
Exchange rate movement
At 31 December

2021
€'000

2020
€'000

44,092
15,392
1,402
2,954
63,84029,38415,0352,376(2,703)44,092

16,285
10,473
1,091
27,849

7,915
8,402
434
(466)
16,285

Net book value
At 01 January
At 31 December

27,80735,991

21,46927,80713 Property, Plant and Equipment

Computers
andsoftware€'000
Cost
At 01 January 2020
Exchange rate movement
Additions
Acquisitions through business combinations atfair value
Disposals
At 31 December 2020
Exchange rate movement
Additions
Acquisitions through business combinations atfair value
Disposals
At 31 December 2021
Accumulated depreciation
At 01 January 2020
Exchange rate movement
Depreciation charge
Disposals
At 31 December 2020
Exchange rate movement
Depreciation charge
Disposals
At 31 December 2021
Net book value
At 01 January 2021
At 31 December 2021

Officefurniture
andLeaseholdequipment improvements
€'000
€'000

Total
€'000

24,843(2,058)
8,338

6,747
(155)
541

11,161(1,339)5,029

42,751(3,552)
13,908523(2,440)29,2062,877
13,492

125
(352)
6,906
783
1,444

197
(136)
14,912
1,289
4,424

845
(2,928)51,024
4,949
19,360304(2,830)43,049

266
(185)
9,214

2
(5,699)14,928572(8,714)
67,191

14,725(1,378)5,979(2,440)16,8862,342
8,170(2,830)24,568

2,751
35
868
(352)
3,302
603
590
(185)
4,310

3,112
(695)
2,136
(136)
4,417
676
2,901
(5,699)2,295

20,588(2,038)
8,983(2,928)24,605
3,621
11,661(8,714)
31,173

12,32018,481

3,604
4,904

10,495
12,633

26,41936,018

2021
€'000
175

2020
€'000
-

14 Investments

Investments

From time to time, the Group (via Keywords Ventures Limited) has made modest investments in businesses developing
innovative technologies and services that will benefit its clients, while further accelerating the success of investee

companies through access to its global platform and relationships.

15 Trade Receivables

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

2021
€'000
69,835(1,768)68,0672020€'000
49,814(1,982)
47,832

2021
€'000
9,997
7,114
4,203
22,8604,936
49,110

2020
€'000
9,202
4,608
4,816
16,6683,371
38,665Trade receivables arise from revenues derived from contracts with customers.

16 Other Receivables

Current
Accrued income from contracts with customers
Prepayments
Rent deposits and other receivablesMultimedia tax credits / video games tax relief
Tax and social security

Accrued income from contracts with customers represent mainly contract assets in process and related items. The
movement in the year comprises transfers in and out as items are accrued and subsequently invoiced to customers,
with no significant amounts written off or impaired in the period, or no significant amounts recognised on theacquisition of subsidiaries.
17 Other Payables

Current liabilities
Accrued expenses
Payroll taxes
Deferred and contingent consideration (i)Other payables (ii)
Non-current liabilities
Deferred and contingent consideration (i)

(i)

2021
€'000

2020
€'000

53,5262,666
35,88816,343
108,423

31,0862,563
18,80810,501
62,95818,254
18,254

1,994
1,994

The movement in deferred and contingent consideration during the financial year was as follows:

Carrying amount at the beginning of the year
Consideration settled by cash

2021
€'000
20,802(14,393)

2020
€'000
6,035
(2,489)

Consideration settled by shares
Unwinding of discount (note 6)
Additional liabilities from current year acquisitions (note 27)
Adjustment arising from prior year business combinations
Fair value adjustments
Exchange rate movement
Carrying amount at the end of the year

(2,838)1,882
40,0595,567
3,063
54,142(3,321)
132
21,131(66)(620)
20,802

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 of judgement (Level 3 input in the fair value hierarchy). A 10% increasein expected performance would increase the carrying value of contingent consideration by €1.7m, while a 10%
reduction in expected performance would decrease the carrying value by €6.3m. On an undiscounted basis, theGroup may be liable for deferred and contingent consideration ranging from €0.2m to a maximum of €61.2m.

(ii)

Other payables includes deferred income from contracts with customers of €3,470k (2020: €2,967k), whichmainly comprise items invoiced prior to services being delivered. The movement in the year comprises
transfers in and out as items are deferred and subsequently recognised as revenue.

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
Euro
Canadian dollars

2021
€'000

2020
€'000

-

-

129
129

195
195

129

195

129
129

195
195

In December 2021 the Company put a new unsecured revolving credit facility (“RCF”) in place with a syndicate of four
lenders, which replaced its previous €100m secured revolving credit facility. The new RCF is a committed facility thatallows financing of up to €150m, which may be drawn down in euro, sterling, US dollars or Canadian dollars, with an
option (subject to lender consent), to increase the facility by up to €50m to a total of €200m, at interest rates based ona margin over currency benchmark rates, plus a separate margin charged for the unutilised facility. The new RCF
extends to December 2024, with an option to extend the term by two further one-year periods.
Under the previous RCF, security was granted over the major subsidiaries of the Group. As part of putting the new
unsecured RCF in place, all security arrangements relating to the previous revolving credit facility have now beenreleased.
In connection with the financial covenants of both the new and previous RCF, the Group are required to comply withand report certain interest cover and leverage ratios. Non-compliance with RCF terms could result in lenders refusing toadvance funds under the facility or, in the worst case, calling in outstanding loans. Throughout the period, the Groupoperated well within the applicable ratio terms of both the new and previous RCF agreements.
While technically any borrowings are repaid and re-borrowed multiple times during the term of the RCF, so long as theGroup 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 any RCF liabilities as non-current.
The movements in Loans and borrowings are as follows:

At 01 January 2020
Cash flows:
Drawdowns
Repayments
Non-cash flows:
Exchange rate movement
At 31 December 2020
Cash flows:
Repayments
Non-cash flows:
Exchange rate movement
At 31 December 2021

Current€'00080Noncurrent€'000
59,671

Total€'000
59,751-

4,500(64,030)

4,500(64,030)

(7)
73

(19)
122

(26)
195

-

(80)

(80)

8
81

6
48

14
129

Following the share placing in May 2020, the balance of the previous RCF was repaid in June 2020, with the residual
balance being loans owed by Keywords Studios QC-Interactive Inc.
Loans and borrowings (classified as financial liabilities under IFRS 9), are held at amortised cost. Interest expenses
which are calculated using the effective interest method are disclosed in note 6.

19 Lease Liabilities

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

2021
€'000
28,864
1,402
15,392985(10,938)
1,930
37,635Carrying 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

2020
€'000
21,9072,376
15,035843(9,013)(2,284)
28,864The value of leases not yet commenced to which the lessee is committed, which are not included in lease liabilities at
31 December 2021, was €nil (2020: €10.3m).

Maturity analysis of leaseliabilities

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

At 31 December

2021

2021

2021

2020

2020

2020

€'000
Lease
payments€'000
Financecharges

€'000
Lease
liabilities

€'000
Lease
payments€'000
Financecharges

€'000
Lease
liabilities

12,059842

11,217

8,291

930

7,361

21,2997,000
28,299

1,488
393
1,881

19,811
6,607
26,41818,715
5,307
24,022

1,013
1,506
2,519

17,702
3,801
21,50340,3582,723

37,63532,3133,449

28,864The 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 not included 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

2021
€'000

2020
€'000

1,531
1,531

1,747
1,747

516
-

991
-

Later than five years

516

991

The effect of variable lease payments and re-instatement costs on future cash outflows arising from leases is notmaterial for the Group.

20 Employee Defined Benefit Plans

In line with statutory requirements in France, Italy and India, we are required to maintain employee defined benefit
termination payment schemes.
In France, employees are entitled to a lump-sum on retirement or early termination, based on salary and length ofservice (“Indemnité de Fin de Carrière” or “IFC”), entitling the Group's French employees to benefits of up to twomonths’ salary per year of service.
In Italy, on leaving employment, each employee is entitled to 1/13.5 of their final salary for each year of service(“Trattamento di Fine Rapporto” or ”TFR”).
In India, in compliance with statutory requirements, employees with over five years’ service are entitled to atermination benefit of 15/26 of monthly salary for each year of service (“Gratuity” benefits).
The Group commissions an actuarial valuation of the related liabilities in each jurisdiction annually.
The liabilities at year end are recorded as long term. The actuarial gain or loss is recorded separately within Other
comprehensive income. The movements through the year are as follows:

Opening liabilities at 01 JanuaryService cost
Interest cost
Benefits paid
Actuarial (gain) / loss
Exchange rate movement
Closing liabilities at 31 December

2021
€'000
2,693
419
33
(141)
(27)
111
3,088

2020
€'000
2,049
354
30
(110)
421
(51)
2,693

The Directors have considered the key specific risk factors which the Group faces due to the employee defined benefit
plans which are in place. Having fully considered all specific elements of these plans, the Directors believe that the key
issues faced are as follows:

The plan is currently 100% unfunded, there are no specific assets to meet the future liabilities as they fall due; as such, there will be a cash
flow impact as the liabilities must be met with current working capital as they fall due.

The Group has taken no specific actions to mitigate these factors as due to the long-term nature of the plans it isexpected 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 is 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.
In 2022, the Group expects the costs of the employee defined benefit plan to be in line with current year levels, as staff
levels are not anticipated to change significantly in the period.
The actuarial valuation is based on the Projected Unit Credit Method, in line with IAS 19.

Cost for year
Service cost
Interest cost
Actuarial (gain) / loss

2021
€'000
419
33
(27)
425

2020
€'000
354
30
421
805

2021

2020

Actuarial (gain) / loss
Change due to experience
Change due to demographical assumptions
Change due to financial assumptions

€'000
41
(9)
(59)
(27)

€'000
98
(93)
416
421

Assumptions Underlying the Actuarial Valuations and Sensitivities of the Assumptions
For the actuarial valuations, the following demographic and economic and financial assumptions were applied:Mortality probabilities were derived from the population demographics, as recorded by the government statistics offices in each jurisdiction.
Disability, retirement age and other relevant demographic assumptions were taken from relevant life assurance statistics.
Certain inputs were estimated by management, including:oEmployee attrition rates, estimated based on company experience in each jurisdiction.
o
In Italy, TFR rules allow for early drawdown of benefits in certain circumstances. Such advances were estimated on the basis ofcompany experience.

Economic and financial assumptions
Staff salary increase rate
Inflation rate
Discount rate

2021
4.07%
3.04%
1.67%

2020
3.63%
2.93%
1.23%

Key statistics
Staff (number)
Average age (years)
Average service (years)

2021
874
31
4

2020
782
31
4

Interest rate sensitivities(0.25)%
0.25%

2021
€'000
3,176
2,880

2020
€'000
2,842
2,568

Mortality rate sensitivities(0.025)%0.025%

2021
€'000
3,018
3,015

2020
€'000
2,696
2,693

Staff turnover rate sensitivities(0.50)%
0.50%

2021
€'000
3,049
2,985

2020
€'000
2,726
2,664

Staff salary increase rate sensitivities(0.50)%
0.50%

2021
€'000
2,976
3,072

2020
€'000
2,703
2,745

21 Deferred Tax

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

Defined benefit termination payments
Available losses
Rent-free period provisions
Fixed asset tax base versus accounting bookvalue
Deferred tax related to tax credits
Deferred tax arising on items deductible on apaid basis
Recognition on acquisition of subsidiaries
Deferred tax arising on intangibles
Net tax assets / liabilities
Impact of change in tax rates
Prior year (over) / under provision
Total (credited) / charged to income statement

Defined benefit termination payments
Available losses
Rent-free period provisions
Fixed asset tax base versus accounting bookvalue
Deferred tax related to tax credits
Deferred tax arising on items deductible on apaid basis
Recognition on acquisition of subsidiaries
Deferred tax arising on intangibles
Net tax assets / liabilities
Impact of change in tax rates
Prior year (over) / under provision
Total (credited) / charged to income statement

2021
€'000

2021
€'000

2021
€'000

Assets
328
1,817
222

Liabilities
-

Net
328
1,817
222

2021
€'000
(Credited) /charged toincomestatement
(259)
(660)
(147)

1,818
-

1,702
3,570

116
(3,570)

(217)
1,464

5,557
2,539
9,187
21,468

1,761
3,006
3,801
13,840

3,796
(467)
5,386
7,628

(1,857)(2,345)(4,021)
189
75(3,757)

2020
€'000

2020
€'000

2020
€'000

Assets69
1,157
75

Liabilities
-

Net
69
1,157
75

2020
€'000
(Credited) /charged toincomestatement
(19)
293
(64)

603
38

704
2,144

(101)
(2,106)104(1,057)

3,344
9,363
14,649

1,405
3,970
2,352
10,5751,939
5,393(2,352)
4,074

(949)
(1,451)(3,143)289(18)(2,872)The deferred tax asset not recognised on available losses at the period end is €3.2m (2020: €3.2m).

22 Shareholders’ Equity
Share Capital

Issue date

At 01 January 2020
Acquisition-related
issuance of shares:
Sunny Side Up
Laced
Cord Worldwide
Descriptive Video Works
Coconut Lizard
Studio Gobo and Electric
SquareMaverick MediaTV+SYNCHRON
G-Net Media
Ichi
Jinglebell
High Voltage Software
Indigo Pearl
KantanAcquisition-related
issuance of shares
Share placing
Exercise of share options
At 31 December 2020
Acquisition-related
issuance of shares:
High Voltage Software
Heavy Iron
Tantalus
Tantalus
Climax Studios
Climax Studios
Ichi
Coconut Lizard
Kantan06-Jan-20
14-Apr-20
14-Apr-20
12-Jun-20
25-Jun-20
19-Aug20
26-Aug20
05-Oct-20
24-Nov20
02-Dec20
10-Dec20
14-Dec20
15-Dec20
22-Dec20

20-May20

12-Jan-21
12-Jan-21
18-Mar21
15-Apr-21
21-Apr-21
17-May21
28-May2125-Jun-21
02-Jul-21

Number of ordinary£0.01 shares

Number ofordinary£0.01 shares - tobe issued

Share capital€’000

Share capital to be issued€'000

65,212,515

349,721

780

5,310

12.46
17.48
17.48
17.93
20.23

60,1798,194
65,55035,560-(60,179)(8,194)(65,550)(35,560)
19,739

1
1
-

(750)
(143)
(1,145)
(638)
399

-

749
143
1,145
637
-

16.72

198,576

-

2

-

-

3,319

24.63
13.12

68,608

13,579(68,608)

1

334
(900)

-

899

23.26

-

130,448

-

3,034

-

-

15.95

55,612(55,612)

1

(886)

-

886

25.94

-

11,564

-

300

-

-

26.06

-

307,597

-

8,017

-

-

26.27

-

20,125

-

529

-

-

15.86

26,085(26,085)

-

(414)

-

414

518,364

183,264

6

7,737

-

8,192

16.23
0.96

6,900,000
1,448,364
74,079,243

532,98577
16
879

13,047

26.06
31.84

307,597-(307,597)
12,914

4-(8,017)
411

-

8,013
-

27.87
27.87
33.53

368,750-

368,750(368,750)
232,517

10,2754 (10,275)
7,797

10,271--

33.53

232,517(232,517)

3(7,797)

-

7,794

15.94
18.24
15.86

14,635
19,73912,614(14,635)(19,739)(12,614)

-

(233)
(399)
(200)

-

233
399
200

Per share €Sharepremium€’000

Mergerreserve€’000

20,718 132,712- 109,372
2,233
22,951 250,276

Kantan related
adjustment
AMC
Maverick Media
Coconut Lizard
G-Net Media
G-Net Media related
adjustment
Waste
Indigo Pearl
High Voltage Software
Acquisition-related
issuance of shares
Employee Share
Purchase Plan
Exercise of share options
At 31 December 2021

02-Jul-21
11-Aug21
27-Aug21
07-Sep21
06-Dec21
06-Dec21
16-Dec21
22-Dec21
24-Dec21

15.86-(2,683)

-

-

-

-

33.49

-

25,080

-

840

-

-

25.35

36,211(13,579)

-

(334)

-

918

28.44

7,962

-

-

-

-

227

23.26

130,410(130,410)

2(3,034)

-

3,032

23.26

-

(38)

-

(1)

-

-

30.78

-

20,585

-

634

-

-

26.27

20,125(20,125)

-

(529)

-

528

29.77

69,130

-

1

-

-

2,057

1,219,690 (462,841)

14 (10,862)

10,271

23,401

13,982962,860
76,275,775

11
904

398
4,929
38,549 273,677

70,1442,185

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 on such shares. In the context of the Company’s general
meeting authorities, at the Company’s AGM on 26 May 2021 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 3,723,243 shares in respect of the Company’s Long Term Incentive Plan and Share Option Plan (5% of theCompany’s issued share capital as at 8 April 2021); andb) Otherwise, up to 24,796,802 shares (33.3% of the Company’s issued share capital as at 8 April 2021).
This authority is considered prudent as it gives the Company flexibility to take advantage of possible opportunities
which may arise from time to time. The authority granted at the 2021 AGM will expire on the earlier of (i) fifteen
months after 26 May 2021; and (ii) the conclusion of the 2022 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.

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

2021
Ordinary shares held in the EBTShares335,425

2020
€'000
1,997

Shares335,425

€'000
1,997

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 ofComprehensive 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 theirnominal value, net of share issuance costs.

Share-based payments reserve The Share-based payments reserve is the credit arising on share-based payment
charges in relation to the Company’s share and share option schemes.
Shares to be issued

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

Merger reserve

The merger reserve was initially created following the Group reconstruction, when
Keywords Studios plc acquired the Keywords International Limited group ofcompanies.
When the Group uses Keywords Studios plc shares as consideration for the acquisitionof an entity and has secured at least a 90% equity holding in the acquisition, the valueof 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 shareplacements in 2015 and 2020, of €14.4m and €109.5m respectively, both completed
via a cash box structure, with the Company acquiring the net proceeds via a share forshare exchange. In both cases, the share premium on the issuance of new shares wascredited 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 acquisitionor specific purpose, and thus, amounts totalling €123.9m included in the Merger
reserve are considered distributable.

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:
2021
€'000
3,446
12,90444
16,394

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

2020
€'000
2,576
12,774
15,350Of the total Share-based payments expense, €698k relates to Directors of the Company (2020: €1,007k).
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 price of the shares at the time of the award of the options. The Company has no legal orconstructive 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:

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

2021
Average
exercise
price in £Number ofper share
options
12.66
2,345,238
25.48
616,000
18.96(163,791)
11.46(373,879)
15.68
2,423,568
6.74
668,734

2020
Average
exercise
price in £ per
Number ofshareoptions
9.97
2,148,102
15.93
822,000
15.64(179,151)
4.55(445,713)
12.66
2,345,238
4.39
638,238

27.42

17.91

Summary by year
Year of Option
Exercise price
Outstanding at the
beginning of the period
Granted
LapsedExercised
Outstanding at the endof the period
Exercisable at 31
December 2021
Exercisable 2022

2015
£1.58

2016
£2.54

2017
£7.76

2018
£17.102019£15.882020£15.932021£25.48

Total

458,613
34,296 127,034
374,982 588,000 762,313- 2,345,238- 616,000
616,000(500) (11,000) (37,000) (64,291) (51,000) (163,791)(73,318) (13,719) (69,534) (119,058) (98,250)- (373,879)
385,295

20,57757,000244,924452,750

698,022385,295-

20,577-57,000-111,590
133,334

93,750179,500

522
232,500

565,000 2,423,568-

668,734
545,334

Exercisable 2023
Exercisable 2024
Exercisable 2025

-

-

-

-

179,500-

232,500
232,500-

188,333
188,333
188,334

600,333
420,833
188,334

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

Weighted
2021 average

2015

2016

2017

2018

2019

2020

£1.64

£2.54

£7.75

£17.22£16.09£16.00£26.42

£1.58

£2.54

£7.76

£17.10£15.88£15.93£25.48€0.56
4 Years
28.03%
0.90%€0.40
4 Years
27.17%
0.58%€1.13
4 Years
24.79%
0.16%€3.79
4 Years
35.87%
0.89%€5.72
4 Years
45.23%
0.81%€6.06
4 Years
50.15%
0.07%€9.32
4 Years
47.70%
0.15%

0.75%

0.55%

0.21%

0.10%

0.10%

0.10%

0.10%

-

-

-

5

17

29

41

22

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 behaviouralconsiderations.

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:

2021
Average
exercise
price in £Number ofper share
options
0.01
3,692,817
0.01
932,6560.01(312,006)
0.01(608,569)
0.01
3,704,898
0.01
559,506

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

2020
Average
exercise
price in £ per
Number ofshareoptions
0.01
3,445,868
0.01
1,428,000
0.01(178,400)
0.01(1,002,651)
0.01
3,692,817
0.01
373,648

27.62

17.34

Summary by year

Year of Option
Exercise price
Outstanding at the
beginning of theperiodGranted
LapsedExercised
Outstanding at theend of the period
Exercisable at 31
December 2021
Exercisable 2022
Exercisable 2023
Exercisable 2024

2015
£0.01

2016
£0.01

2017
£0.01

2018
£0.01

2019
£0.01

2020
£0.01

2021
£0.01

Total

47,358 132,293 196,030
799,000 1,133,936 1,384,200- 3,692,817- 932,656
932,656(6,606) (115,400) (161,000) (29,000) (312,006)(8,358) (46,405) (90,994) (462,812)- (608,569)
39,00085,888105,036

329,582 1,018,536 1,223,200

903,656 3,704,898

39,000-85,888-105,036-

329,582- 1,018,536- 1,223,200-

559,506- 1,018,536- 1,223,200
903,656
903,656

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

Weighted
2021 average

2015

2016

2017

2018

2019

2020

£1.60

£2.56

£7.75

£17.24£16.05£16.00£26.42

£0.01

£0.01

£0.01

£0.01

£0.01

£0.01

£0.01

€1.38
3 Years€1.74
3 Years€4.96
3 Years€11.83
3 Years€13.98
3 Years€13.28
3 Years€16.73
3 Years

Expected volatility
Risk-free rates
Weighted average remaining
life of options in months

28.21%
0.88%

27.11%
0.54%

24.79%
0.16%

35.87%
0.89%

45.26%
0.81%

50.15%
0.07%

47.70%
0.13%

-

-

-

-

5

17

29

14

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 andbehavioural considerations. As any dividends earned are to be re-invested into the business, the impact of dividends
has been ignored in the calculation of the LTIP share option charge.
LTIP’s vest on the third anniversary of the grant, if the market performance criteria are met. LTIPs must be exercised
before the seventh anniversary of the grant.
Salary Shares
In 2021, a total of 26,738 Salary Shares were granted to a number of Executive Directors under the LTIP plan, with
2,462 shares vesting two years after the grant date, and 24,276 shares vesting three years after the grant date. The
average fair value of the shares at the grant date was €32.08.

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 and operating cash flows are substantially independent of changes in market interest rates. The
management monitors interest rate fluctuations on a continuous basis and acts accordingly.
Where the Group has a significant amount of surplus cash, it invests in higher earning interest deposit accounts. Due tointerest rate conditions, the interest 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%
Strengthenin
g
2021

1%
Weakening
2021

1%
Strengthenin
g
2020

1%
Weakening2020€'000-Interest expense

€'000
-

€'000
(290)

€'000
257

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. Credit risk arising in the context of the Group’s operations
is not significant with the total bad debt provision at the balance sheet date amounting to 2.5% of net tradereceivables (2020: 4%). Customer credit risk is managed at appropriate Group locations according to establishedpolicies, procedures and controls. Customer credit quality is assessed and credit limits are established whereappropriate. 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 eachreporting date. Significant balances are reviewed individually while smaller balances are grouped and assessedcollectively. Receivables balances are unsecured and non-interest-bearing. The trade receivables balances disclosed
comprise a large number of customers spread across the Group’s activities and geographies with balances classified
as “Not past due” representing 77.5% of the total trade receivables balance at the balance sheet date (2020: 79%).
Trade and other receivables are carried on the Consolidated statement of financial position net of bad debt provisions.
The ageing of trade receivables can be analysed as follows:

At 31 December 2021
At 31 December 2020

Total
€'000
68,067
47,832

Not past
due€'000
52,75337,936

1-2 months
past due€'000
14,192
7,678

More than
2 months
past due
€'000
1,122
2,218

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 toadministration expenses
Foreign exchange movement in the year
Utilised
Provision at the end of the year

2021
€'000
1,982

2020
€'000
1,283

821
63
(1,098)
1,768

1,293
(284)
(310)
1,982

Trade receivables loss allowance is estimated using a practical expedient to arrive at lifetime expected credit losses.
Overdue receivables are evaluated to calculate an expected credit loss using a historical credit loss experience of 1.0%
(2020: 0.5%). 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, and impaired balances are removed from the expected credit loss
calculation.

Trade receivables grossCredit impaired
Expected credit losses
At 31 December 2021

Trade receivables grossCredit impaired
Expected credit losses
At 31 December 2020

Total
€'000
69,835(1,070)(698)
68,067Total€'000
49,814(1,733)(249)
47,832

Not past
due€'000
53,286(533)
52,753

Not past
due€'000
38,150(23)(191)
37,936

1-2 months
past due€'000
14,502(165)(145)
14,192More than
2 months
past due
€'000
2,047
(905)
(20)
1,122

1-2 months
past due
€'000
7,887
(170)
(39)
7,678

More than
2 months
past due
€'000
3,777
(1,540)(19)
2,218

There were no related party receivables at the end of either period presented.
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 risk arises for the Group where assets and liabilities arise in a currency other than thefunctional 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 theirfunctional currency with cash generated from their own operations in that currency. Where Group entities haveliabilities denominated in a currency other than their functional currency (and have insufficient reserves of thatcurrency 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 andthe exposure is concentrated in the movement of the US dollar, sterling and Canadian dollar against the euro. The effectof a strengthening or weakening of 10% in those currencies against the euro at the reporting date on the working capitalbalances would, all other variables held constant, have resulted in the following pre-tax profit / (loss) impact for the year:

2021
€'000
10%

US dollar to euro
Sterling to euroCanadian dollar to euro

Strengthening
5,545(1,333)
169

2021
€'000
10%
Weakening

2020
€'000
10%
Strengthenin
g

2020
€'000
10%
Weakening(4,536)
1,091
(138)

4,712
835
594

(3,855)
(683)
(486)

Total Financial Assets and Liabilities

The carrying amount of the financial assets and liabilities shown in the Consolidated and Company Statements offinancial position are stated at amortised 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 €229.7m of current
assets, including cash of €105.7m 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 2021
Trade payables
Deferred and contingent
consideration (i)Other payables
Loans and borrowings
Loan interest
Lease liabilities
Total

At 31 December 2020
Trade payables
Deferred and contingent
consideration (i)Other payables
Loans and borrowings
Loan interest
Lease liabilities
Total

Carrying
value
Total

Contractual cash flows
Total

€'000
11,122
54,142
72,535
129
37,635
175,563

1-2 years

2-5 years€'000
11,122

Within 1
year€'000
11,122

€'000
-

€'000
-

Over 5
years
€'000
-

61,22372,535129
640,358185,373

37,95372,53581
412,059133,754

14,00848
2
8,257
22,315

9,262
13,042
22,304

7,000
7,000

Carrying
value
Total

Contractual cash flows
Total

€'000
8,170
20,80244,150195
1028,864102,191

1-2 years

2-5 years

€'000
8,170

Within 1
year
€'000
8,170

€'000
-

€'000
-

Over 5
years
€'000
-

26,44244,150195
1032,313111,280

20,69944,15073
58,291
81,388

5,743
122
5
7,153
13,023

11,562
11,562

5,307
5,307

(i) Deferred and contingent consideration at 31 December 2021 has arisen on business combinations, and is based oncontracted amounts to be paid in the future to sellers under share purchase agreements. In general, in order forcontingent 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€61.2m.
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

2021
€'000
129
(105,710)(105,581)
472,120(22.4)%

2020
€'000
195
(103,070)(102,875)
371,235(27.7)%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 wellas information regarding cash balances. The Group's strategy is to preserve a strong cash base and secure access tofinance at reasonable cost by maintaining a good credit rating.

26 Related Parties and Shareholders

Italicatessen Limited, a company registered in Ireland, is related by virtue of a common significant shareholder. P.E.Q.
Holdings Limited is 100% owner of Italicatessen Limited. At 31 December 2021, P.E.Q. Holdings Limited owned 0.66%(2020: 4.73%) of the Company. In addition, Mr. Giorgio Guastalla is a Director of Italicatessen Limited, P.E.Q. Holdings
Limited and the Company, and owns, or controls, 90% of the share capital of P.E.Q. Holdings Limited. Mr. Giorgio
Guastalla retired from the Board of the Company in January 2022.
There were no transactions in the period with Italicatessen Limited (2020: €13k), who provided canteen services to
Keywords International Limited on an arm’s length basis. This activity ceased in 2020, and there were no balances
owing to Italicatessen Limited at the end of either period presented.
In addition, on an arm’s length basis, the Group paid rent of €22k in 2020, in respect of premises occupied by
employees of the Group in Dublin to Mr. Giorgio Guastalla, Director of the Company, and shareholder of P.E.Q.
Holdings Limited. This activity also ceased in 2020, and there were no balances owing at the end of either period
presented in respect of this activity.
The details of key management compensation (being the remuneration of the Directors) are set out in note 10.

27 Business Combinations

2021
€'000

2020
€'000

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
Lease liabilities
Book value of identifiable assets and liabilities acquired
Fair value adjustments:
Identifiable intangible assets
Identifiable tangible assets
Deferred tax assets
Trade and other payables
Deferred tax liabilities
Total fair value adjustments
Net assets acquired
Goodwill from current year acquisitions
Total purchase consideration

572
1,402
7,439
(7)
10,618(8,245)(1,402)
10,377

872
2,376
4,069
9,477
(4,904)(2,376)
9,514

11,502
2,539(3,006)
11,035
21,412
97,918
119,330

17,673
(27)
9,363
1,003
(3,970)24,04233,556
47,11280,668

Details of purchase consideration and outflows from current acquisitions
Cash
Deferred cash
Deferred consideration contingent on performance
Combination put / call options to acquire residual 15% of Tantalus
Shares to be issued
Total purchase consideration

59,314
1,565
33,726
4,768
19,957
119,330

46,92441
21,09012,61380,6681,099

307

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

621,852
37,994503,052

Net cash outflow arising on acquisition:
Cash paid in the period
Less: cash and cash equivalent balances transferred
Net cash outflow arising on acquisition

59,314(10,617)
48,69746,924(9,477)37,447

Details of pro forma revenues and profitability of current acquisitions
Pre-acquisition revenue
Pre-acquisition revenue with Keywords Group
Post-acquisition revenue
Pro forma revenue

16,345(1,908)24,99039,42735,7297,208
42,937

Related acquisition costs charged through to the Statement of comprehensive
income:Pre-acquisition profit before tax
Post-acquisition profit before tax
Pro forma profit before tax

2,573
9,653
12,226

9,399
2,561
11,960During the period, the Group completed six acquisitions, Heavy Iron, Tantalus, Climax Studios, AMC, Waste andWicked Witch, purchasing 100% of the share capital of these businesses, except in the case of Tantalus where theGroup acquired an 85% interest. A combination of put and call options are in place requiring the sellers to sell, or theGroup to buy, the remaining 15% shareholding in three years. The Group has recognised a contingent consideration
liability at fair value, being the Group’s estimate of the present value of the amount required to settle the liability,and has accounted for the acquisition as if a 100% interest was acquired on acquisition (see note 3).
The aggregate amounts recognised in respect of the identifiable assets acquired and liabilities 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.
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 fortax purposes was €9.1m.

28 Subsidiaries

The results and financial position of all the subsidiaries are included in the consolidated financial statements. Details of
the Company’s direct and indirect subsidiaries as at 31 December 2021 are set out below:

Name3455 Productions, LLC

Country ofincorporation
USA

Date of incorporation/ acquisition
24-Nov-20

9409-2954 Québec Inc.

Canada04-Dec-19

Alset Limited

UK

17-Aug-18

100%

Appsectest Limited

UK

22-Jan-19

48.8%

Babel Media India Private Limited

India

17-Feb-14100%

Babel Media Limited *UK

17-Feb-14

100%

Unit 13 Orton Enterprise Centre, Bakewell Road, Peterborough,Cambridgeshire, PE2 6XU, UK
3rd floor, Vardhman Orchard Plaza, Plot No 4, LSC, West Enclave,
Pitampura, New Delhi, 110034, India
1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Babel Media USA, Inc.

USA

17-Feb-14

100%

251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA

Bitsy SG Limited

UK

17-Aug-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Blindlight, LLC

USA

08-Jun-18

100%8335 Sunset Blvd, Ste 307, West Hollywood, CA 90069, USA

Climax Development Limited

UK

22-Apr-21

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Climax Studios Limited

UK

22-Apr-21

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Coconut Lizard LimitedUK

25-Jun-20

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Cord Worldwide Limited

UK

07-Apr-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

d3t Development Limited

UK

30-Aug-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

d3t LimitedUK

19-Oct-17

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Descriptive Video Works Inc.

Canada11-Jun-19

100%

Eastern New Media Limited

Hong Kong

19-May-17

100%

Edugame Solutions Private LimitedIndia

09-Oct-14

100%

400-725 Granville Street, PO Box 10325, Vancouver BC V7Y 1G5,
Canada4404, 44/F Hopewell Centre, 183 Queen’s Road East, Wanchai, HongKong
D - 3/C, Munirka Flats, New Delhi, 110067, India

Electric Square Limited

UK

17-Aug-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Fire Without Smoke Inc

USA

29-May-18

100%

251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA

Fire Without Smoke Limited

UK

29-May-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

GameSim Inc.

USA

16-May-17

100%13501 Ingenuity Drive, Suite 310, Orlando, FL 32826, USA

g-Net Media, Inc.

USA

24-Nov-20

100%

251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA

High Voltage Software, Inc.

USA

14-Dec-20

100%2345 Pembroke Ave., Hoffman Estates, IL 60169, USA

HVS Nola LLC

USA

14-Dec-20

100%

201 St. Charles Ave., Suite 2220, New Orleans, LA 70170, USA

Ichi Creative LimitedUSA

26-Nov-19

100%

251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA

Ichi Limited

UK

26-Nov-19

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Indigo Pearl LimitedUK

15-Dec-20

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Itsy SGD Limited

UK

17-Aug-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Jinglebell S.r.l.

Italy

10-Dec-20

100%

Via Marco d’Oggiono 12, Milan, Italy

Jurango Pty Limited ~~Australia

20-Dec-21

100%

29 Thornton Crescent, Mitcham, VIC 3132, Australia

Keywords (Shanghai) Information Technology
LimitedKeywords Asia Private Limited

China

02-Apr-15

100%

Singapore

15-Mar-16

100%

Keywords Australia Holdings Limited

UK

17-Mar-21

100%

7th Floor, Building A, Dong Ti YuHui Road, Hongkou District, Shanghai,
China
20 Kallang Avenue, #06-6A, Lobby B, Pico Creative Centre, 339411,
Singapore
1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Keywords Australia Pty Limited ~Australia

18-Mar-21

85%

12 Spring Street, Fitzroy, Victoria, 3065, Australia

Keywords Canada Holdings Inc.

Canada27-Oct-17

100%

1751 Richardson Street Suite 8400, Montreal QC, H3K 1G6, Canada

Keywords do Brasil Localização e Tradução Ltda

Brazil

18-Jan-15

100%

Keywords Germany Holdings GmbHGermany

06-Sep-19

100%

Av. Churchill, 109 - Sala 204 - Centro, Rio de Janeiro-RJ, CEP: 20020050, Brazil
Moriz-Seeler-Strasse 5-7, Franz Ehrlich Haus,12489 Berlin, Germany

Keywords International Co., Limited.

Japan

30-Nov-10100%

2-3-1 Kudanminami, Chiyoda-ku, Tokyo 102-0074, Japan

Keywords International Limited

Ireland13-May-98

100%

Whelan House, South County Business Park, Dublin 18, Ireland

Keywords International Pte. Limited

Singapore

24-Apr-14

100%

Keywords International, Inc.

USA

26-Sep-12

100%

20 Kallang Avenue, #06-6A, Lobby B, Pico Creative Centre, 339411,
Singapore
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA

Keywords Studios B.C., Inc.

Canada27-Oct-17

100%

1700-1075 West Georgia Street, Vancouver, BC, V6E 3C, Canada

Keywords Studios France SAS

France08-Jun-16

100%

59 Boulevard Exelmans, 75016 Paris, France

Keywords Studios Italy S.R.L.

Italy

08-May-14

100%

Via Egadi 2, Milano, MI, 20144, Italy

Keywords Studios Korea Corporation

South Korea

11-Jan-21

100%

Keywords Studios Los Angeles, Inc.

USA

08-May-14

100%

16th Floor, Gangnam Building, 1321-1, Seocho-dong, Seocho-gu,
Seoul 137-070, South Korea
1115 Flower Street, Burbank, CA 91502, USA

Keywords Studios Limited *Ireland27-Mar-18

100%

Whelan House, South County Business Park, Dublin 18, Ireland

Keywords Studios México, S. de R.L. de C.V.

Mexico16-Jul-15

100%

Keywords Studios Netherlands B.V.

Netherlands

05-Feb-19

100%

Torrente #75, Colonia Ampliación Alpes, Del. Álvaro Obregón, CP.
01710, Ciudad de México, México
Wilhelmina van Pruisenweg 35, 2595AN The Hague, The Netherlands

Keywords Studios Poland Spolka z.o.o.

Poland04-Feb-21

100%

11 Ul. Na Zjezdzie, Krakow 30-527, Poland

Keywords Studios QC-Games Inc.

Canada17-Feb-14

100%

1751 Richardson, suite 8400, Montréal, Québec, H3K1G6, Canada

Keywords Studios QC-Interactive Inc.

Canada16-Nov-16

100%

1751 Richardson, suite 8400, Montréal, Québec, H3K1G6, Canada

Keywords Studios QC-Tech Inc.

Canada06-Jan-15

100%

1751 Richardson, suite 8400, Montréal, Québec, H3K1G6, Canada

Keywords Studios Spain SLU

Spain

16-Jul-15

100%

Julián Camarillo 6A, 3B, 28037 Madrid, Spain

Keywords UK Holdings Limited

UK

28-Mar-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Keywords US Holdings Inc.

USA

23-Oct-17

100%

251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA

Keywords Ventures Limited

UK

06-Apr-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Laced Music Limited

UK

07-Apr-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Ownership ^
100%
100%

Registered office
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
1751 Richardson Street, Suite 8400, Montreal, Quebec, H3K 1G6,
Canada
1st Floor, 39 Earlham Street, London, WC2H 9LT, UKLakshya Digital Private Limited *India

09-Oct-14

100%

Lakshya Digital Singapore Pte. Limited

Singapore

09-Oct-14

100%

Liquid Development, LLC

USA

19-Aug-15

100%

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

Liquid Violet Limited *UK

15-Jan-14

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Lonsdale Miller LimitedUK

15-Dec-20

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Marching Cube, LLC

USA

22-Jan-20

100%

815A Brazos #334, Austin, TX 78701, USA

Maverick Media LimitedUK

27-Aug-20

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Paleblue Limited

UK

07-Apr-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Player Research Limited

UK

26-Oct-16

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

PT Limitless Indonesia

Indonesia

19-May-17

100%

JI. Timoho II, No. 32, Yogyakarta, Indonesia

Snowed In Studios, Inc

Canada19-Jul-18

100%

400-981 Wellington Street West, Ottawa, Ontario, K1Y 2Y1, Canada

Sperasoft Poland Spólka z.o.o.

Poland13-Dec-17100%

Ul. Na Kozłówce 27, 30-664 Kraków, Poland

Sperasoft Studios LLC

Russia13-Dec-17

100%196084, Russia, Saint-Petersburg, Kievskaya street, 5 - building

Sperasoft, Inc.

USA

13-Dec-17

100%

251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA

SperaSystems LLC

USA

13-Dec-17

100%2033 Gateway Pl Ste 500 San Jose, CA 95110-3712, USA

SPOV LimitedUK

16-Feb-17

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Strongbox Limited

Seychelles

19-May-17

100%

306 Victoria House, Victoria, Mahe, Seychelles

Studio Gobo Limited

UK

17-Aug-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Sunny Side Up Creative Inc.

Canada03-Jan-19100%

Synthesis Deutschland GmbH *Germany

12-Apr-16

100%

410 Boulevard Charest Est, Suite 410, Québec, Québec, G1K 8G3,
CanadaHolstenkamp 46 A, Bahrenfeld, 22525 Hamburg, Germany

Synthesis Global Solutions SA *Switzerland

12-Apr-16

100%

Corso Elvezia 16, 6900 Lugano, Ticino, Switzerland

Tantalus Media Pty Limited ~Australia

18-Mar-21

100%

13 Spring Street, Fitzroy, Victoria, 3065, Australia

The Trailerfarm Limited

UK

13-Sep-18

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

TV+SYNCHRON Berlin GmbHGermany

01-Oct-19

100%

Moriz-Seeler-Strasse 5-7, Franz Ehrlich Haus, 12489, Berlin, Germany

VMC Consulting CorporationUSA

24-Oct-17

100%

251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA

Waste Creative LimitedUK

16-Dec-21

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Waste Holdings LimitedUK

16-Dec-21

100%

1st Floor, 39 Earlham Street, London, WC2H 9LT, UK

Wicked Witch Software Pty Limited ~~Australia

20-Dec-21

100%

29 Thornton Crescent, Mitcham, VIC 3132, Australia

Wizcorp Inc.

Japan

18-Apr-19

100%

Xcelerator Machine Translations Limited

Ireland12-Dec-19

100%

3-10-14, Higashi-Nihonbashi 3-chome, Sunrise Tachibana 6F, Chuo-ku,
103-0004, Tokyo, Japan
Invent, Dublin City University, Glasnevin, Dublin 9, Ireland

Xloc, Inc.

USA

08-May-17

100%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+ The registered office address was changed from 201 Temple Chambers, 3-7 Temple Avenue, London, EC4Y 0DT , England, on 26 January 2022
~ A combination of put and call options are in place requiring the sellers to sell, or the Group to buy the remaining 15% shareholding in three years. The Group has accounted for the acquisition as if a 100%interest was acquired on acquisition (see note 3).
~~ Acquired by Keywords Australia Pty Limited

Post-acquisition, the Group reviews entities to streamline activities and close any dormant entities acquired or restructured entities. Restructuring details are set out below:

Name
Ichi Holdings Limited

Country ofincorporation
UK

Date ofincorporation /acquisition
26-Nov-19

Keywords International Barcelona SL

Spain

09-Jan-15

Red Hot Software (Shanghai) Limited

China

19-May-17

Red Hot Software (Zhengzhou) Limited

China

19-May-17

Ownership
100%

Date of re-structuring
16-Dec-21

Re-structuring details
Liquidated

100%

23-Nov-21

Merged100%30-Jun-21

Dissolved

100%

21-Oct-21

Dissolved

29 Events after the Reporting Date

Crisis in Ukraine
Since the year end, the Group’s operations have been impacted by the tragic events in Ukraine. While the Group does
not have operations in Ukraine, the Group does have Game Development teams in a number of locations in Russia
working exclusively for customers located outside of the country. The Group also works with a number of freelance
suppliers in Ukraine. Our immediate priority has been to do all that we can to support our people and our freelance
suppliers in the territory, while contributing to the wider humanitarian efforts in the region.
Revenues delivered from the Group’s operations in Russia are presented in note 4. In 2021, the Group delivered€29.4m of revenue in Russia, up from €28.0m in 2020, and represents approximately 5.7% of Group revenue. While wecontinue to focus on serving our customers, we are also focused on mitigating any potential business interruption orother risks associated with this activity.
Geographical analysis of non-current assets from continuing businesses is also presented in note 4. Approximately€1.4m of the amount presented within the “Other” category relates to Russian located property, plant and equipment,
being mainly computer equipment. The Group does not have significant receivables exposure in Russia, as work
produced in Russia is contracted and collected in other territories. In addition, the Group does not have significant
amounts of other current assets or right of use assets located in Russia. Thus, any exposure to impairment of assets
located in Russia is not considered material.
The Directors have applied downside sensitivities to the Group’s projections to evaluate any potential goodwill
impairment resulting from the crisis. The result of the value in use calculations was that no impairment would be
required even in a worst case scenario where all Russian located production capacity was excluded from projections.

Alternative performance measures
The Group reports a number of alternative performance measures (“APMs”) to present the financial performance ofthe business, that are not GAAP measures as defined under IFRS. The Directors believe that these measures, inconjunction 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 and operating 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.
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 growthmeasures are used to help understand the underlying trading performance of the Group excluding the impact ofacquisitions. Organic revenue growth is calculated by adjusting the prior year revenues, adding pre-acquisition
revenues for the corresponding period of ownership to provide a like-for-like comparison with the current year, andapplying the prior year’s foreign exchange rates to both years.
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’sreporting currency, the euro. In order to understand the underlying trading performance of the business, revenue isalso presented using rates consistent with the prior year in order to provide year over year comparability.
Adjusted profit and earnings per share measures – Adjusted profit and earnings per share measures are used toprovide management and other 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 onacquisition, whereas intellectual property / development costs amortisation commences when the productis launched. These costs, by their nature, can vary by size and amount each year. As a result, amortisation of
intangibles is added back to assist with the understanding of the underlying trading performance of thebusiness and to allow comparability across regions and categories.
Costs of acquisition and integration – The level of acquisition activity can vary each year and therefore thecosts associated with acquiring and integrating businesses are added back to assist with the understandingof the underlying trading performance of the Group.
Share-based payments – The Group uses share-based payments as part of remuneration to align the interestsof senior management and employees with shareholders. These are non-cash charges and the charge is basedon the Group’s share price which can change. The costs are therefore added back to assist with theunderstanding 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.
COVID-19 government subsidies claimed – In 2020 the Group applied for COVID-19 government subsidies invarious jurisdictions, introduced in response to the global pandemic. These subsidies have been added backin order to present adjusted profit and cash flow measures consistently year-on-year.
Investment income – The Group acquired a minor holding in Hutch Games Limited, when Keywords
purchased Liquid Development studio in 2015. In 2020, Hutch Games Limited was acquired and the Group
received €1.4m proceeds in December 2020. As the gain has arisen outside the normal 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 program and to 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, but before acquisition and integration cash outlay, investment 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 of depreciation). In the prior year, the measure
has also been adjusted for COVID-19 subsidies claimed given the one-time nature of this income.
Net debt – The Group manages capital by monitoring debt to capital and net debt ratios. Net debt is calculated as Loans and borrowings less Cashand 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.

Service line analysis

The following table presents revenue growth by service line at both actual exchange rates (“AER”) and constantexchange rates (“CER”). Constant exchange rates are calculated by retranslating current year reported numbers at
the corresponding 2020 foreign exchange rates, in order to give management and other users of the financial
statements better visibility of underlying trading performance against the prior year.

2021
2021
2020
Revenue Revenue Revenue
AER
CER
AER
€m
€m
€m
49.3
49.5
38.9
46.2
46.4
18.4
138.9
140.0
80.0
61.3
61.9
47.2
92.7
92.0
78.5
50.8
51.4
45.4
27.1
27.2
23.3
45.9
47.1
41.8
512.2
515.5
373.5

Art Creation*
Marketing*Game Development
Audio
Functional Testing
Localization
Localization Testing
Player Support

2021
GrowthAER%
26.7%
151.1%
73.6%
29.9%
18.1%
11.9%
16.3%
9.8%
37.1%

2021
GrowthCER%
27.2%
152.2%
75.0%
31.1%
17.2%
13.2%
16.7%
12.7%
38.0%

*The prior year comparatives have been re-classified to separately report Marketing services, previously reported within the Art Creation service line.

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.

2021

Revenue
AER
€m
49.3
46.2
138.9
61.3
92.7
50.8
27.1
45.9
512.2

Art Creation
MarketingGame Development
Audio
Functional Testing
Localization
Localization Testing
Player Support

2021
2021
PreProacquisition
forma
revenue Revenue
AER
AER
€m
€m
1.6
50.9
6.2
52.4
8.5
147.4
61.3
92.7
50.8
27.1
45.9
16.3
528.5

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 the corresponding period of ownership, and applying the 2020 foreign exchange rates to both years.
2020

2020

2020

2021

2021

2021

Art Creation*
Marketing*Game Development
Audio
Functional Testing
Localization
Localization Testing
Player Support

Revenue
AER
€m
38.9
18.4
80.0
47.2
78.5
45.4
23.3
41.8
373.5

Preacquisition
revenue
AER
€m
0.9
16.3
40.7
1.4
0.4
59.7

Like forlike Revenue
revenue
growth Revenue
AER
CER
CER
€m
€m
€m
39.8
9.7
49.5
34.7
11.7
46.4
120.7
19.3
140.0
48.6
13.3
61.9
78.5
13.5
92.0
45.8
5.6
51.4
23.3
3.9
27.2
41.8
5.3
47.1
433.2
82.3
515.5

Organic
revenue
growth
CER
%
24.4%
33.7%
16.0%
27.4%
17.2%
12.2%
16.7%
12.7%
19.0%

* The prior year comparatives have been re-classified to separately report Marketing services, previously reported within the Art Creation service line. The equivalent 2020 organic growth rates were 30.8% forMarketing and 13.0% for Art Creation respectively.

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 and impairment of intangible
assets, depreciation, non-controlling interest and deducting bank charges. In order to present the measureconsistently year-on-year, the impact of COVID-19 government subsidies claimed is also excluded.

2021
€'000

Calculation
Administrative expenses
Share-based payments expense
Costs of acquisition and integration
Amortisation and impairment of intangible
assetsDepreciation - property, plant andequipment
Depreciation - right of use assets
Non-controlling interest
Bank charges
COVID-19 government subsidies claimed
Adjusted operating costs
Adjusted operating costs as a % of revenue

Consolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeNote 13
Note 12
Consolidated statement of comprehensive
incomeNote 6
Consolidated statement of comprehensive
income2020€'000(149,749) (102,090)
16,394

15,350

7,972

2,650

13,688

8,808

11,661
10,473

8,983
8,402

67
(520)

85
(552)

(90,014)17.6%(9,231)(67,595)
18.1%

Adjusted operating profit

The 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 and integration, andamortisation and impairment of intangible assets. In order to present the measure consistently year-on-year, theimpact of investment income and COVID-19 government subsidies claimed are also excluded.

Calculation
Operating profit
Share-based payments expense
Costs of acquisition and integration
Amortisation and impairment of intangible
assetsInvestment income
COVID-19 government subsidies claimed
Adjusted operating profit
Adjusted operating profit as a % of revenue

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

2021
€'000

2020
€'000

50,365

41,11916,394

15,350

7,972

2,650

13,6888,808-(1,437)88,41917.3%(9,231)
57,25915.3%

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

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

Consolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeNote 13
Note 12Note 6

2021
€'000

2020
€'000

50,365

41,11913,688
11,661
10,473(520)
85,667

8,808
8,983
8,402
(552)
66,760Adjusted EBITDA

Adjusted EBITDA comprises EBITDA, adjusted for share-based payments expense, costs of acquisition and integrationand non-controlling interest. In order to present the measure consistently year-on-year, the impact of investment
income and COVID-19 government subsidies claimed are also excluded.

Calculation
EBITDA
Share-based payments expense
Costs of acquisition and integration
Non-controlling interest
Investment income
COVID-19 government subsidies claimed
Adjusted EBITDA
Adjusted EBITDA as a % of revenue

As above
Consolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeConsolidated statement of comprehensive
income2021€'000
85,6672020€'000
66,76016,394

15,350

7,972

2,650

67

85

-

(1,437)110,100
21.5%(9,231)
74,177
19.9%

Adjusted profit before tax

Adjusted profit before tax comprises Profit before taxation as reported in the Consolidated statement ofcomprehensive income, adjusted for share-based payments expense, costs of acquisition and integration,amortisation and impairment of intangible assets, non-controlling interest, foreign exchange gains and losses, andunwinding of discounted liabilities. In order to present the measure consistently year-on-year, the impact ofinvestment income and COVID-19 government subsidies claimed are also excluded.

Calculation
Profit before taxation
Share-based payments expense
Costs of acquisition and integration
Amortisation and impairment of intangible
assetsNon-controlling interest
Foreign exchange (gain) / loss
Unwinding of discounted liabilities - deferredconsideration
Investment income
COVID-19 government subsidies claimed
Adjusted profit before tax

Consolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeConsolidated statement of comprehensive
incomeNote 6Note 6
Consolidated statement of comprehensive
incomeConsolidated statement of comprehensive
income

2021
€'000

2020
€'000

47,98332,494

16,394

15,350

7,972

2,650

13,6888,808

67(1,983)

85
6,103

1,882

132

-

(1,437)86,003(9,231)
54,954

Adjusted profit before tax as a % of revenue

16.8%

14.7%

Adjusted effective tax rate

The Adjusted effective tax rate is 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, as a percentageof 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
incomeTaxation / Adjusted profit before tax

Adjusted taxation / Adjusted profit before
tax

2021
€'000
86,0032020€'000
54,954

13,875

11,027

16.1%

20.1%

4,729
18,604785
11,812

21.6%

21.5%

^Being mainly the tax impact of share-based payments expense €2.8m, amortisation of intangible assets €2.1m, less foreign exchange €0.2m, with the prior year being mainly the tax impact of amortisation of
intangible assets €1.8m, foreign exchange €1.2m, share-based payments expense €0.7m, less COVID-19 government subsidies claimed €2.6m and investment income €0.3m.

Adjusted earnings per share

The Adjusted profit after tax comprises the Adjusted profit before tax, less the Taxation expense as reported in theConsolidated statement of comprehensive 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 non-diluted weighted average
number of 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
Denominator (weighted average number of
equity shares)

As above
Consolidated statement of comprehensive
incomeNote 8Adjusted earnings per share
Adjusted earnings per share % growth

2021
€'000
86,0032020€'000
54,954(13,875)(11,027)(4,729)67,399(785)
43,14275,526,296 70,800,455
€c
€c
89.24
60.93
46.5%
24.9%

^Being mainly the tax impact of share-based payments expense €2.8m, amortisation of intangible assets €2.1m, less foreign exchange €0.2m, with the prior year being mainly the tax impact of amortisation of
intangible assets €1.8m, foreign exchange €1.2m, share-based payments expense €0.7m, less COVID-19 government subsidies claimed €2.6m and investment income €0.3m.

Return on capital employed (ROCE)ROCE represents the Adjusted profit before tax (excluding net interest costs, unwinding of discounted lease liabilities
and bank charges, and also adjusted to include pre-acquisition profits of current year acquisitions), expressed as apercentage 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 eachyear 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 - leaseliabilities
Pre-acquisition profits of current year
acquisitions
Adjusted profit before tax including preacquisition profit and excluding net interest
Total equity
Employee defined benefit plans

As above
Note 6Note 6Note 62021€'000
86,003
(62)
520
1,040

2020
€'000
54,954
(76)
552
1,071

Note 6985

843

Note 27

2,573

9,399

91,05966,743472,1203,088

371,235
2,693

Consolidated statement of financial position
Consolidated statement of financial position

Cumulative amortisation of intangibles assets(customer relationships)
Deferred and contingent consideration
Loans and borrowings
Cash and cash equivalents
Capital employed
Return on capital employed

Note 11
Note 17
Note 18
Consolidated statement of financial position

Adjusted profit before tax including preacquisition profit and excluding net interest
expense / capital employed

40,70825,17854,14220,802129
195(105,710) (103,070)
464,477
317,033

19.6%

21.1%

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, net interest paid,
payments of principal on lease liabilities and is presented both before and after taxation paid. In order to present themeasure consistently year-on-year, the impact of investment 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
Fair value adjustments to right of use
assetsAcquisition of property, plant and equipment
Investment in intangible assets
Investment income
Interest received
Interest paid
Payments of principal on lease liabilities
Free cash flow after tax
Taxation paid
Free cash flow before tax

2021
€'000

2020
€'000

Consolidated statement of cash flows

90,54576,420Consolidated statement of comprehensive
income

7,972

2,650

Consolidated statement of cash flows(5,567)66

Consolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of comprehensive
incomeConsolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of cash flows(19,360)
(315)

(434)
(13,908)(259)

62(2,738)(9,953)60,64623,94884,594(1,437)76(1,722)(8,170)53,282
4,459
57,741

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 by capital expenditure in excess of maintenance capital expenditure). In order to present themeasure consistently year-on-year, the impact of COVID-19 government subsidies claimed is also excluded.

Calculation
Free cash flow before tax
Capital expenditure in excess ofdepreciation:
Acquisition of property, plant and equipment
Depreciation - property, plant andequipment
Capital expenditure in excess of depreciation
COVID-19 government subsidies claimed
Adjusted free cash flow

As above

2021
€'000
84,5942020€'000
57,741

Consolidated statement of cash flows

19,36013,908

Consolidated statement of cash flows(11,661)
7,699(8,983)
4,925

92,293(9,231)53,435

Consolidated statement of comprehensive
income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 in excess of depreciation, as a %of Adjusted profit before tax

2021
€'000
92,29386,0032020€'000
53,43554,954107.3%

97.2%

Net debt

The Group manages capital by monitoring debt to capital and net debt ratios. Net debt is calculated as Loans andborrowings (as shown in the Consolidated statement of financial position) less Cash and cash equivalents, andexcludes Lease liabilities.

Calculation
Loans and borrowings
Cash and cash equivalents
Net debt / (net cash) position

Note 18
Consolidated statement of financial position

2021
2020
€'000
€'000
129
195
(105,710) (103,070)(105,581) (102,875)