15 March 2023

Keywords Studios PLC ("Keywords Studios", “Keywords”, the “Group”)
Full Year Results for the year to 31 December 2022

Strong growth and cash generation
Keywords Studios, the international technical and creative services provider to the global video games andentertainment industries, today announces its full year results for the year to 31 December 2022.
Financial Overview:
Results for the year ended 31 DecemberGroup revenue
Organic Revenue growth1

Adjusted EBITDA
Adjusted EBITDA margin
EBITDA

2

Adjusted operating profit
Adjusted operating profit margin
Operating profit

3

Adjusted profit before tax
Adjusted profit before tax margin
Profit before tax

4Adjusted earnings per share
Earnings per share

5

2

Final dividend per share
Adjusted cash conversion rate

6

Net cash / (net debt)

2022

2021

Change€ 690.7m+ 21.8%€ 512.2m+ 19.0%+ 34.8%€ 146.9m
21.3%€ 120.9m€ 110.1m
21.5%€ 85.7m+ 33.4%€ 114.6m
16.6%€ 71.8m€ 88.4m
17.3%€ 50.4m+ 29.6%€ 112.0m
16.2%€ 68.0m€ 86.0m
16.8%€ 48.0m+ 30.2%113.50c61.54c89.24c45.16c+ 27.2%+ 36.3%

1.60p

1.45p

100.1%

107.3%€ 81.8m€ 105.6m+ 41.1%+ 42.5%+ 41.7%

Finance and Operating Highlights:
Strong 2022 performance reflecting healthy underlying demand
•
•
•

•
•
•

Group revenue up 34.8% to €690.7m (2021: €512.2m), driven by sustained demand for high quality content
and a continuing trend towards external service provision.
Organic Revenue growth of 21.8%, with good contributions across all service lines.
Adjusted profit before tax rose 30.2% to €112.0m, with Adjusted PBT margin of 16.2% (2021: 16.8%), in linewith guidance, as foreign exchange benefits were offset by the cost of the transition out of Russia andpost-COVID-19 costs.
Adjusted Cash Conversion rate of 100.1%, lower than 2021 (107.3%), but ahead of guidance.
Adjusted Free Cash Flow7 of €112.1m (2021: €92.3m) resulted in net cash of €81.8m (2021: €105.6m),
despite €116.4m net cash spend on acquisitions.
Final dividend of 1.60p per share, an increase of 10% (2021 final dividend: 1.45p), bringing the total dividendin respect of 2022 to 2.37p, an increase of 10% (2021 total dividend: 2.15p)

Strategic Highlights:
Delivering against strategy to drive long-term sustainable growth•••

Enhancing our technology platform through both acquisition and increased adoption of technologies
across the business, supporting the scalability of the business over time.
Excellent progress on developing strategic partnerships with key clients.
Simplified organisation structure supporting employee engagement, collaboration and talent acquisition.
1••

Delivered five acquisitions for a total maximum consideration of €140 million, strengthening our Create,
Engage and technology offerings and capabilities.
Tangible progress against responsible business goals, renewing partnership with Women in Games,
enhancing employee engagement, formalising our diversity, equity, inclusion and belonging roadmap andreducing GHG intensity by 16%

Current trading and outlook••••

Trading in the current year has started well, in line with our outlook for the year.
Expect robust demand for content generation, with our diversified client base, geographical reach, andskew to high-quality games, positioning us well to navigate volatility in the scheduling of certain projects.
Well placed to increase market share, with the potential for the current industry backdrop to accelerate
the trend to external service provision.
Well-funded to continue to deliver on our value accretive acquisition strategy with a healthy number of
M&A opportunities in the pipeline.

Bertrand Bodson, Chief Executive Officer of Keywords Studios, commented:“We delivered an excellent performance in 2022, demonstrating the strength of our platform and the dedicationand hard work of the 12,000 people within Keywords. Whilst mindful of the increasing uncertainty within the
broader industry and potential for foreign exchange movements, we are excited about the opportunity ahead withour business model, highly diversified client base, adoption of technology and geographic reach. We are
increasingly well positioned to support our clients in generating engaging content for their leading franchises andtrading has started well, in line with our expectations for the year.
We expect to continue to see robust demand for content generation as our clients seek to capture the imaginationof the three billion gamers globally. We continue to have a healthy pipeline of acquisition opportunities to broaden
our capabilities, geographic footprint and service offerings. This, together with our organic growth, will enable us
to continue to grow market share, and build upon our position as the partner of choice for the global video games
industry, and beyond.”

Presentation and Webcast
A presentation of the full results will be made to analysts at 9.00am this morning and the live webcast can beaccessed via this link:
https://brrmedia.news/Keywords_Studios_FY
To register for dial in access, or for any enquiries, please contact MHP Group on keywords@mhpgroup.com.

2For further information, please contact:

Investor Contacts:

Media Contacts:

Keywords Studios

MHP Group

Giles Blackham
Director of Investor Relations+44 7714 134 681
gblackham@keywordsstudios.com

Katie Hunt / Eleni Menikou /Charles Hirst+44 20 3128 8794
keywords@mhpgroup.com

Numis Securities
Nominated Adviser & Broker
Stuart Skinner / Will Baunton+44 20 7260 1000
About Keywords Studios (www.keywordsstudios.com)
Keywords Studios is an international technical and creative services provider to the global video games andentertainment industries. Established in 1998, and now with over 70 facilities in 26 countries strategically located in
Asia, Australia, the Americas, and Europe, it provides services across the entire content development life cycle
through its Create, Globalize and Engage service lines to a large blue-chip client base across the globe.
Keywords Studios has a strong market position, providing services to 24 of the top 25 most prominent games
companies. 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 Elden Ring, Star Wars Jedi: Fallen Order, Valorant, League ofLegends, 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 ofthe business 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
to understand the underlying trading performance of the business. In particular, adjusted profit measures are used
to provide the users of the financial statements a clear understanding of the underlying profitability of the businessover time. For full definitions 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.
1

2

3

4

5

Organic revenue at constant exchange rates is calculated by adjusting the prior year revenues, adding preacquisition revenues for the corresponding period of ownership, and applying the 2021 foreign exchange
rates to both years, when translating studio results into the euro reporting currency.
EBITDA comprises Operating profit as reported in the Consolidated statement of comprehensive income,adjusted for amortisation of intangible assets, depreciation and impairment, and deducting bank charges.
Adjusted EBITDA comprises EBITDA, adjusted for share-based payments expense, costs of acquisition andintegration and non-controlling interest. In order to present the measure consistently year-on-year, theimpact of other income is also excluded.
Adjusted operating profit consists of the Operating profit as reported in the Consolidated statement ofcomprehensive income, adjusted for share-based payments expense, costs of acquisition and integration,
and amortisation of intangible assets. In order to present the measure consistently year-on-year, theimpact of other income is also excluded.
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 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 ofother income is also excluded.
The Adjusted earnings per share comprises the Adjusted profit after tax divided by the non-diluted
weighted average number of shares as reported. The Adjusted profit after tax comprises the Adjusted
profit before tax, less the Taxation expense as reported in the Consolidated statement of comprehensive
income, adjusted for the tax impact of the adjusting items in arriving at Adjusted profit before tax.
3

6

7

8

The Adjusted cash conversion rate is the Adjusted free cash flow as a percentage of the Adjusted profit
before tax.
Adjusted free cash flow is a measure of cash flow adjusting for capital expenditure that is supporting
growth in future periods (as measured by capital expenditure in excess of maintenance capital
expenditure).
As at 14 March 2023, company compiled analysts' forecasts gave a consensus for FY 2023 of €816m ofrevenue (range: €809-827m) and €123m of adjusted profit before tax (range: €122-125m).

4Chairman’s Statement
This is my tenth and will be my last Chairman's statement since I joined Keywords just before the IPO in July 2013,
and what a journey it has been!
I can look back on those 10 years with a combination of pride and respect – pride for having overseen such aremarkable journey from a small company with three studios and a turnover of just €16m to where it is today at thevery centre of the video games industry, and respect for all the people who made it happen.
This last year, 2022, has, in many ways, been the most rewarding of all. Finding a new CEO is always a hazardous
enterprise, especially given the unplanned circumstances of the retirement of Andrew Day, who had been thedriving force behind the growth of Keywords until ill-health forced him to stand down. We were fortunate to havereal strength in depth across our leadership team, allowing time to undertake a comprehensive process to appointa high calibre successor with the requisite experience and expertise.
In Bertrand Bodson we have found the embodiment of everything for which I was looking for, with the enthusiasm,
energy, understated charisma and ambition to lead Keywords through the next phase of its development; the aim
is simply for Keywords to become an ever more integral part of the industry which it serves. Rarely has the passingof a mantle been achieved with such panache.
For many companies 2022 was a difficult year. I think it says much for the resilience of the video games industry andKeywords’ positioning within it that we are able to report another record year of results, with revenue growth of ~35%
and with the cash generation of the business continuing to impress. For an acquisitive business this crucial dynamic
is a fundamental aspect of the business model.
Acquisition activity continued apace with five high-quality acquisitions spread across each of our service lines.
Perhaps to me the most pleasing aspect of the acquisitions was the greater influence of technology, which willcontribute to keeping us at the forefront of our industry.
Earlier, I referred to the major influence of Bertrand in creating a new sense of ambition within the business. The
areas identified in collaboration with senior management formed the basis for the evolved strategy set out at thecapital markets day in June 2022, and involves:•

A shift to more of a strategic partner relationship with clients.

•

A focus on enhancing service delivery through greater use of technology.

•

Increased coordination of activities between service lines through the concept of a "One Keywords"
mindset.

•Talent management.

Also more analysis has been undertaken on attractive adjacent industries where gaming technologies are already,or likely to have a major future role and where the technology/expertise is already embedded throughout
Keywords. Media and Entertainment is a natural area to target but the management team has been careful tobalance the natural attraction of expanding our overall target market with opportunities to extend its position as
the leading service provider to the video games industry. As Keywords still represents less than 10% of the growing
market of provision of external services to the video games industry, there remains ample scope for Keywords tocontinue its own exciting growth trajectory, within this market.
From the foregoing it will be apparent that, in my opinion, the Keywords business is better positioned than it was ayear earlier, with a clear strategy to take the business forward. What is more, the senior leadership team under
Bertrand has a far stronger sense of cohesion and common purpose. As already announced, Jon Hauck is taking on
the position of COO having operated alongside Bertrand for most of the year and assisted in the streamlining of
the operational structures at the senior management level. During this period Jon has also continued as CFO(helped immensely by the finance team) and has been in charge of M&A. Our search for a CFO continues, and thecomprehensive process has identified a range of highly qualified candidates for the role.
Success doesn’t happen by chance and during 2022 some hurdles have had to be overcome. Not least of these has
been the necessary relocation of our Russian-based game development operation – now largely completed withnew centres established in Serbia, Armenia and Malta – a major accomplishment. For all that has been achieved
overall, great credit must go to the senior management personnel throughout the organisation and, of course,
every employee who has put in such effort. My thanks are extended to you all.

5

I also want to pay tribute to my fellow Directors who have been a great support to the executives under Bertrand
and to me as Chairman. Working with these talented and hard-working people has been immensely satisfying andgreat fun. Together we have visited a number of studios, including Dublin, Milan and Tokyo, and benefited from theinsights provided by the local teams – in turn, I hope we have given something back.
Finally, and with a certain sense of sadness (but knowing the time is right for a change), I hand over the Keywords
torch to Don Robert, my successor as Chairman. I pass to him, Bertrand, and all Keywordians, my good wishes andall good fortune for the next phase in the life of Keywords, now in its 25th year. During my 10-year tenure as
Chairman most of the relevant statistics have multiplied by at least 20 times – so no pressure, Don!

Ross Graham
Chairman

6

CEO Statement
2022 marked my first full year as CEO of Keywords, and what a year it was. We delivered extremely strong growthand continued to build out our platform, furthering our position at the forefront of the industry and delivering thesolutions our clients require to support the success of their games.
In June, we set out our evolved strategy to take the business to the next level, and have made great initial progressdelivering against those ambitions. We also unveiled a new, simplified structure to strengthen collaboration acrossour Group, sharpened our focus on technology, and welcomed five high-quality businesses with over 300 employees,
providing further scale and new capabilities to build out our platform. None of this would have been possible without
the tireless efforts of our 12,000 Keywordians who consistently Imagine More to deliver high-quality, engaging
content and services for our clients.
I spent a considerable part of 2022 visiting our studios across the world with other members of the management
team; between us, we have been to Keywords businesses across four continents. Having the opportunity to visit
the vast majority of our teams has confirmed to me the fantastic culture and leadership across the organisationand given me great insight into the incredible energy and enthusiasm of our people across the globe. I've also
immersed myself in the industry, as coming from a digital but non-gaming background, it was important for me todevelop a deeper understanding of the complexities of such a vibrant industry. I thank those who have given theirtime to support me in this endeavour, and of course, our clients for trusting us to work on their precious content.
I also wholeheartedly extend my thanks to Ross Graham, our departing Chairman, who has offered tremendous
guidance to me in my first 12 months. Ross has been with Keywords since the very beginning of our life as a publiccompany, and it is with sadness that we see him retire. Ross has been an exemplary guardian of the business, andwe cannot thank him enough for all that he has given to Keywords over the last 10 years. We wish him a long andhappy retirement. Whilst we are sad to see Ross go, we are delighted that he is being replaced by someone as
experienced and talented as Don Robert. His success in scaling global technology businesses will be invaluable forus as we look to imagine more for this business. I look forward to working with him over the coming years.
Performance
2022 was another exceptional year. We delivered revenues of €690.7m, representing growth of 34.8%, withorganic revenue growth of 21.8%, helped by foreign exchange movements. We also saw a good margin
performance with adjusted profit before tax of €112.0m (profit before tax was €68.0m), a margin of 16.2%. As
guided, this margin was lower than the 16.8% that we delivered in 2021, as a number of cost savings made due to
COVID-19 naturally dissipated, and we incurred meaningful costs relating to the change in operating environment
around our single Russia based business, and our subsequent relocation of staff and operations out of the country.
Together, these costs offset the benefit from the strong US dollar on our margins.
During the year we consolidated our eight service lines into a more simplified structure of just three; Create, Globalize
and Engage. All three service lines, which will be discussed in more detail later in this report, demonstrated good
growth against the previous year which had benefited strongly from post COVID-19 trends. Organic growth wasparticularly pleasing in our Create and Globalize businesses, driven by strong demand for our services. We alsodelivered excellent cash generation in the year, which supported our ongoing M&A activities. Our adjusted free cash
flow of €112.1m meant that despite spending €116.4m on acquisitions, the total of the cash component of both thecurrent and previous years’ transactions, we ended the year with net cash of €81.8m, providing a solid foundation for
future M&A. This demonstrates the highly cash generative nature of this business, with cash conversion of 100.1% for
the year, ahead of our guidance of 80%.
Market opportunity
Whilst 2023 has so far seen mixed news from the video games industry, we must not forget the industry’s journeyin recent years. The video gaming sector is larger than the media and entertainment industry and has grown by
over 25% since the start of the pandemic.
In 2022, the industry consolidated gains it had made and, due to a lighter release schedule, changes to mobile
privacy and the availability of out-of-home entertainment once again, shrank slightly compared to 2021. Despite
this, we continue to see industry forecasts for strong growth over the medium term, with video games continuing
to offer incredibly good value on a per-hour of entertainment basis, compared to other forms of entertainment.
In the content generation segment of the industry, where we focus, we believe demand remains robust as ourclients seek to continue to engage and captivate consumers. Demand for high quality, engaging games, which ourbusiness is skewed towards, is still very strong as evidenced by record sales across some of the industry's key
franchises over the important holiday period.
7

The ongoing shift towards live operations, where games are nurtured through regular content updates, will alsomean there will be increasing demand for new content from consumers that publishers and developers will have tomeet; we will be there to support them.
The trend towards external partnering within the industry is ongoing as it becomes increasingly complex andchallenging to bring a game to market. This growing complexity, combined with a shortage of industry talent,means that publishers are increasingly leaning on trusted large-scale partners like us to help them.
We are by far the largest player in our space, and yet remain at only a 6% share of a highly fragmented market. We
believe that we have a significant opportunity to continue to take market share organically, as larger developers
and publishers will want to work with larger providers with geographic scale, and to consolidate through our
successful acquisition programme.
Delivering against evolved strategy
As I detailed at our capital markets day in June, we have set out an evolved strategy which seeks to build on thehighly successful platform created over the last few years. The aim of this is to better position the business to serve
our clients by enhancing collaboration and the use of technology across our platform.
In addition, we are seeking to build our talent pool, not only by attracting some of the best talent in the industry,
but also by retaining and developing key talent ourselves.
We also believe that there is a significant opportunity in markets closely adjacent to gaming in which thetechnologies we already use are increasingly being deployed; with a key focus on the media and entertainment
space.
Across each of these areas we have dedicated project teams who are embedding key initiatives and workstreams
across the organisation in collaboration with our leaders. Taking the core elements of the evolved strategy in turn:

Strategic partnerships
We are working hard to shift our relationships with key clients from tactical to strategic partnerships. In this way,
we can provide more value for our clients and expand the range of services that they utilise from across ourbusiness.
During the year, we initiated strategic partner reviews with our key clients, where senior members from eachside can come together for open discussions about how we can work together over the longer term. This
process, which is ongoing, has already significantly improved our clients' understanding of how we can support
their growth, and in turn is improving our visibility of activity.
We have also increased our specialist resourcing within the service lines, so that we are better able to respond toclient needs with a more holistic offering. I have spent a significant portion of my time obsessively getting to know
our clients and their leadership teams. We believe that having both a bottom-up, as well as a top-down approach,will best support long-term relationship building and value creation.

Technology
The technology landscape continues to evolve at a rapid pace, and we must continue to adopt new technologies
into our workstreams to remain at the forefront of the industry. Having a background in digital, it was immediately
clear to me that Keywords has an opportunity to better utilise the technology that exists within the business, bothto enhance its internal systems and provide more comprehensive customer solutions. This will also support thescalability of the business longer-term and ensure we maintain our leadership in the industry. Through utilisingexisting technologies more, as we have with the KantanAI partnership with Microsoft, and bringing exciting newtechnologies into the Group through the acquisitions of Mighty Games and Helpshift, we have already made real
progress. Both of these acquisitions complement our existing offerings and enable us to broaden our solutions forour clients.
To support our adoption of technology, we have created a standalone innovation team, which is scouring both ourbusiness to surface innovations within individual studios, and the broader industry, to ensure that we are able tocontinually enhance our client offering and ways of working within our business.

One Keywords
Through our One Keywords initiative we are seeking to galvanise and leverage the Group's culture ofentrepreneurism and collaboration. We have already seen tangible benefits from the simplification of ourstructure, which helps us to serve our clients more effectively and ensure employees get the full benefit of being
part of the wider Group.
8With the support of our new solution architects, we have been able to go to our clients with broader offerings fromacross many studios, something that was previously difficult to achieve. We have also refreshed our executive
team and brought in new talent to lead our Engage business, drive our technology strategy and hired our first
Chief People and Culture Officer. In addition, we have launched a studio hub model to allow studio heads toparticipate in and have a voice at leadership events.
We have also refreshed our previous set of company values, by putting in place a simple set of five leadershipprinciples, which are designed as a practical tool to be applied to everyday working life:•

Power of Partnership•

One Keywords•

Raise the Game•

Embrace an Open World•

Trust through Transparency

These are guiding actions which create the conditions for us to collaborate, and Imagine More for our partners,
ourselves, the games industry and beyond, whilst supporting the individual cultures that exist within each of ourstudios and service lines.

Talent and capabilities
We have enhanced our engagement with our 12,000 employees, establishing global town halls, a key
communicators network to empower regional management and consistent messaging across the group. We havealso added dedicated resource to address some of the industry’s key issues, such as diversity, equity, inclusion
and belonging.
We have also put in place dedicated teams to support talent acquisition in an industry where this remains achallenge, yet is critical to our growth trajectory. Internally, we are seeking to develop our talent by expanding our
in-game academies and boot camps which offer the opportunity for people to enter or progress within theindustry. Longer-term, we are building a pipeline of talent, specifically in India, where we have an agreement withthe government to expand our Academy, which is currently focused on art, into game development, taking
advantage of the quantity of high-quality engineering talent emerging from Indian universities.

Adjacent markets
Gaming remains our core market, and one in which we see huge opportunity for growth over the coming years. It is
still a highly fragmented market, and our focus remains on ensuring we grow our market leading position.
However, gaming technologies are increasingly being utilised in other industries, primarily media andentertainment, where virtual production and visual effects (VFX) are increasingly using game engine technology.
We believe this shift will present opportunities for us and we are looking at ways to capture these opportunities
over time. We already serve elements of this market through our Globalize business, primarily providing dubbing
and subtitling services to companies such as Netflix, and have seen strong growth during the year.
The trend towards live operations, with the aim of keeping a game live and engaging consumers for as long as
possible, has continued during the year. Across Keywords, we are able to support clients as they nurture games tostay live, and we continue to augment the Group to deliver the right offering for clients in this regard. We have also
started to explore ways in which we can service clients in respect of longer-term opportunities such as themetaverse where we see emerging opportunities for the Group.
M&A
Complementary to the five pillars of our strategy is our M&A approach, which has added significant value to thebusiness over the past ten years and something we believe is a key differentiator for us. In 2022, we completed fivehigh-quality acquisitions in the US, Australia, Canada and Italy, meaning we have now completed over 60
transactions in the past 10 years. In that time, we have carefully deployed almost €600m on M&A, predominantly
funded from free cash generation, systematically expanding our initial localization and testing offering, into the
only service provider able to deliver across the full game development cycle.
We continue to take a strategic approach to M&A and are looking to extend our capabilities and geographicalreach in our Create and Engage service lines, as well as scaling our technology offering and exploring opportunities
to enter adjacent markets. During 2022, three acquisitions were game development studios (Forgotten Empires,
Smoking Gun and Mighty Games), with Mighty Games also bringing an automated testing technology solution, andone in marketing (LabCom). We also acquired Helpshift, which has developed a market leading software-as-a9

service customer support automation tool to resolve customer issues in real-time within its clients’ mobile apps andcomplements our Player Support offering within the Engage service line. In early 2023 we acquired 47
Communications, a leading US-based PR and communications agency to further enhance Engage’s marketing and
PR offering.
RussiaSadly, the humanitarian crisis in Ukraine is ongoing. At the start of 2022, we had one game development studio,
Sperasoft, with offices in Russia and Poland, which was purely working for international gaming businesses, rather
than serving domestic Russian clients. In discussion with our clients and to support colleagues, in the first half of 2022
we commenced relocating the majority of our people and work from Russia to alternative locations, including Poland,
together with Serbia, Armenia and Malta, where we have established new operations.
This was a major project, requiring cross functional support and a project team which has dedicated considerable
time and resource to making this transition as smooth as possible for all, with the second half of 2022 having been
the key transition phase. Their efforts enabled us to relocate over 400 people from Russia by the year-end to the
new locations in Europe, a true example of what is possible when teams come together in adversity and look forlong term solutions. We have already started to organically grow our headcount in the new locations, with client
work having transitioned to alternative locations successfully. In H1 2023, we will continue to look to transition
further staff out of Russia, before closing our operations.
Responsible BusinessOur responsible business agenda is centred around five key areas; our people, planet, community and our clients,
underpinned by our commitment to good governance and ethics.
During the year we continued to make good progress with these priorities. In an organisation of over 12,000
people, our people are our largest and most valuable asset and rightly have high expectations of us. A good
culture, in which our people feel rewarded, trusted, and included, is critical for our long-term success. We believethat having a diverse workforce is the best way to provide highly creative solutions for our clients and have mademeaningful progress in establishing this. We have renewed our partnership with Women in Games after asuccessful first year of our ambassador programme and have a full schedule of events planned for 2023.
In 2022, the Group was composed of 26% women, 73% men, with according to current data, a collective 1% ofcolleagues identifying as non-binary or declining to disclose their gender (2021: 25%/74%/1%). Our support
functions have a more balanced split of women and men (44% and 55%, respectively, with 1% non-binary/not
disclosed).
Gender diversity, and addressing under-representation remain a focus for the Group and Board both across ourbusiness and the wider industry. Following changes to Board composition during the year, the percentage ofwomen Directors on the Board at year-end of 29% was marginally lower than in 2021 (30%). We continue to apply
inclusive appointment processes, in line with our Board Diversity Policy.
Internally we have created a three-year roadmap with dedicated resourcing to provide more structure to ourdiversity, equity, inclusion and belonging (DEIB) initiatives and believe we will start to see tangible benefits from thisas we go forward. We have also continued to win best workplace awards across the globe, demonstrating theefforts made to make sure Keywords is a great place to work for all.
We have made positive steps in our Sustainable Studios initiative to identify the areas where we can reduce our
impact on the planet, something of importance to all our stakeholders. During our review, we identified moving
to renewable energy supplies, wherever possible, as having the most significant positive impact, and we are
exploring this on a studio-by-studio basis. We made progress in switching tariffs to renewable providers, with 16of our studios now on green tariffs. Going forward, we will also ensure that all new office and studio space meetsmodern environmental building requirements.
We are working towards a target of reducing the intensity of our emissions (tonnes of CO2e per €m of revenue) by
50% by 2030 and in 2022, achieved a 16% reduction. In the meantime, we have continued to expand thegreenhouse gas inventory that we report against and during the year, we have offset our 2021 operationalemissions through a highly respected carbon offset project in Tanzania.
We have also continued to make a positive impact through our Keywords Cares initiative, which is an annual central
fund which can be applied to match funds raised by our local teams. This year our teams raised over €45,000 for arange of causes across the globe, undertaking our first global initiative in November. It was great to see so many10

different activities taking place across the Group, with over 35 different charitable and community activities being
completed, more than double the number in 2021.
Outlook
We delivered an excellent performance in 2022, demonstrating the strength of our platform and the dedicationand hard work of the 12,000 people within Keywords.
Whilst mindful of the increasing uncertainty within the broader industry and potential for foreign exchange
movements, we are excited about the opportunity ahead with our business model, highly diversified client base,adoption of technology and geographic reach. We are increasingly well positioned to support our clients ingenerating engaging content for their leading franchises and trading has started well, in line with our expectations
for the year.
We expect to continue to see robust demand for content generation as our clients seek to capture the imaginationof the three billion gamers globally. We continue to have a healthy pipeline of acquisition opportunities to broaden
our capabilities, geographic footprint and service offerings. This, together with our organic growth, will enable us
to continue to grow market share, and build upon our position as the partner of choice for the global video games
industry, and beyond.
Bertrand Bodson
Chief Executive Officer

11

Service Line Review
CreateThe Create service line combines Art Services and Game Development to deliver a range of services to clients andpartners globally. It represents around 3,500 people in 23 studios across 42 cities.

Revenue €m

2022

2021

Change

275.5

188.2

46.4%

Organic Revenue growth %Adjusted EBITDA €m
Adjusted EBITDA margin %

25.9%
69.7

49.7

25.3%

26.4%

40.2%

2022 Performance
Create performed strongly during the year, with total revenues up by 46.4% to €275.5m (2021: €188.2m). Organic
Revenue, which excludes the impact of acquisitions, grew by 25.9%, as the service line continued to benefit fromthe strong industry demand for new content creation and the increasing complexity of games.
The performance was driven by strong growth in a number of Create studios, with increased headcount enabling
our game development studios to take on more work and meet demand, with the UK and Australia seeing strong
growth in particular. In Art Services, we continued to experience very strong performance in Quebec and in our
Indian business. We have also begun to benefit from the increased collaboration between Art Services and Game
Development, with studios increasingly utilising each other's services to support the needs of clients.
Due to the industry-wide shortage of talent within the game development and art sectors, we have established a
dedicated talent acquisition team to complement local efforts and have started a number of local talentdevelopment initiatives. These combined efforts, together with our extensive geographic footprint allowing us tohire from around the world, has meant that we have been able to meaningfully grow our Create team during theperiod, and better support our clients.
Despite Game Development being the most directly affected by the situation in Ukraine, the scale and broad
footprint of the business has meant that the service line continued to perform well during the period. During theyear, we started to relocate people and work from our single Russia-based business, Sperasoft, to alternative
locations in Europe. Sperasoft purely works for international gaming businesses, rather than serving domestic
Russian clients. The majority of this transition took place in the second half of the year, and in total we have moved
over 400 people to new locations as of the year end. The situation in Ukraine meant that our initial growth plans for
Sperasoft, that had been resourced, could not be fulfilled, and the focus for the year was on completing existing
projects and undertaking the transition. This had a meaningful impact on profitability of the business. Due to thesuccessful transition, and pace of new hires in the new locations, we are now able to start to take on new projects
and as well as continuing to support our existing clients. In H1 2023, we will continue to look to transition further
staff out of Russia, before closing our operations. As a result, we will continue to incur costs from the transition
into the year, as well as a modest one-off charge relating to the closure.
Revenues derived from Russia represented 3.8% of Group revenues (€26.3m), down from 5.7% in 2021 and in
December 2022 represented just 1.7% of Group revenues.
Adjusted EBITDA in Create grew 40.2% to €69.7m in 2022 (2021: €49.7m), with the Adjusted EBITDA margin of
25.3% in 2022 lower than the previous period (2021: 26.4%) due to the impact of the transition of people and workfrom Russia in the second half of the year. This was largely offset by the benefit of foreign exchange movements.
We welcomed three new Game Development studios this year, Forgotten Empires, the small game development
team at Mighty Games and Smoking Gun Interactive. Each of the acquisitions bring different skills and capabilities
to our business. Forgotten Empires brings extensive experience in real-time strategy games. Smoking Gun has along track record in developing highly rated, cross platform games and gives access to talent in Vancouver, a gamedevelopment hub. The Mighty Games team also support the scaling of our broader Australian business.
12

The market opportunity and outlook
The video games market remains robust, with strong player engagement on major platforms and titles. Whilst
there is potential for large publishers to have a narrower focus on major titles, we continue to believe there will bea focus on the generation of new content to ensure that players remain engaged for longer.
We expect continued robust demand across our Create service line, as the industry remains capacity constrainedin terms of access to highly-skilled talent as games continue to increase in complexity. This has meant that clientsare increasingly seeking external support to deliver the required, engaging content for their projects. While we arestarting to see a more cautious approach to investment in new games at the beginning of the year, the Create
service line remains resilient, due to the quality of our studios and talent, its strong client relationships globally, andthe mix of franchises we work on.

Globalize
Globalize brings together our Audio, Testing and Localization businesses to create a global business with around
5,000 people in 32 studios across 27 cities.

Revenue €m

2022

2021

Change

300.9

231.9

29.8%

Organic Revenue growth %Adjusted EBITDA €m
Adjusted EBITDA margin %

23.4%
61.6

47.4

20.5%

20.4%

30.0%

2022 Performance
Globalize performed well in 2022 with total revenues up by 29.8% to €300.9m (2021: €231.9m). Organic Revenue,
which excludes the impact of acquisitions, grew by 23.4%.
Each of the lines of business within Globalize performed well during the year, and our increased scale and footprint
meant we were well positioned to capitalise on the industry’s healthy demand for post-production services, despite
it being a slower period for new launches.
In Functional Testing we saw strong growth, as our Polish operations relocated to a new state-of-the-art facility
enabling increased recruitment, and Montreal performed well. We also benefitted from several large testing
contracts in the second half of the year that we were able to fulfil due to our scale and footprint. Our broad
footprint across different time zones allows clients access to a global workflow, and access to different cost toserve models. This enables us to continue to mitigate the impact of increasing costs, with considered pricing
adjustments. Our footprint also provides the opportunity to grow our talent base and maintain high-quality output
for our clients.
Mighty Games was added to the portfolio to be able to offer automated games testing solutions and expertise to
our clients. This acquisition illustrates our commitment to utilise technology to provide more value-added services
to our client base and stay at the forefront of our industry.
In Localization, performance was also strong as we benefited from the deployment of a specific AI driven text
localization workflow in H1 for a key client. Audio localization saw a good second half of the year, which offset
weaker H1 performance from delays to certain projects. Our Audio media and entertainment business continued to
grow rapidly as we expanded our capabilities and relationships with several large industry players, including Netflix.
Adjusted EBITDA in Globalize grew 30.0% to €61.6m in 2022 (2021: €47.4m), with the Adjusted EBITDA margin
maintained at 20.5% in 2022 compared to 20.4% in 2021.
The market opportunity and outlook
During the year we saw the trend towards external service provision continue across each of our Globalize lines ofbusiness. We believe that even in a more constrained market environment this trend will continue over the medium
13term, as the opportunity to move from fixed to variable costs for certain functions will become more attractive forclients. Due to the scale of the service line we are now able to meet the needs of our largest clients, across theglobe, and in a rapid manner, which should further enable us to capture increasing demand across the service line.

EngageOur Engage service line brings together our Marketing Services and Player Support businesses to create a holisticoffering focused on player engagement, encompassing around 2,500 people in 29 studios across 23 cities.

Revenue €m

2022

2021

Change

114.3

92.1

24.1%

Organic Revenue growth %Adjusted EBITDA €m
Adjusted EBITDA margin %

9.7%
15.6

13.0

13.6%

14.1%

20.0%

2022 Performance
Engage saw robust growth during the year, with revenues up by 24.1% to €114.3m (2021: €92.1m). Organic
Revenue, which excludes the impact of acquisitions, grew by 9.7%.
Player Support performed strongly across the year, with the addition of a number of new clients and healthy
growth across our top clients. Social Media and Trust and Safety Services also continue to grow and are developing
into a key part of our offering. In December, we were delighted to announce the acquisition of Helpshift, which willtransform our player support business into a unique market leading holistic offering for our clients. Helpshift,brings a market leading customer support automation tool to resolve customer issues in real-time within its clients’mobile apps, which together with our existing player support capabilities, and KantanAI machine translation
capability, will create an unrivalled player support offering for customers.
Our Marketing studios delivered a more modest performance, in part due to the exceptional performance in 2021,
during which the business experienced significant growth of over 150% and organic growth of ~34%. In addition,
the 2022 performance was impacted by some client-specific project delays and cancellations, particularly in our
North American studios. In December, we were pleased to extend the geographic spread of our PR offering, withthe acquisition of LabCom in Italy, complementing our UK-based PR agency, Indigo Pearl and the January 2023
acquisition of 47 Communications in the US opens up opportunities in the world’s largest gaming market.
Increasingly, our marketing studios are collaborating to provide broader solutions to clients as well as working withplayer support to provide a holistic offering.
Adjusted EBITDA grew 20.0% to €15.6m in 2022 (2021: €13.0m), with the 2022 Adjusted EBITDA margin of 13.6%
slightly behind the previous year period (2021: 14.1%).
The market opportunity and outlook
Our ambition for Engage is to create the next generation of connected companies that encompass the marketing,communications, and player-centred aspects of the games industry. This will enable us to offer a holistic solution
focused on driving and maintaining player engagement with our clients’ games. We will continue to broaden ourmarketing offerings, both geographically and to ensure that we have all of the capabilities our global clients need.
In Player Support, the nature of the business means that clients need to focus on keeping players engaged andsupported within their games. The Helpshift acquisition, whilst early in its integration, provides an exciting
opportunity to scale our business, by providing a market-leading solution for clients, although it will take themajority of 2023 before we believe we will be able to demonstrate meaningful traction with clients due to thelonger sales cycle in this segment. As highlighted previously, the successful integration of KantanAI, our MachineTranslation solution, into Player Support, provides further opportunities for the business to provide cost effective
and high-quality solutions to meet industry needs.

14Financial and operating overview
Revenue
Revenue for 2022 increased by 34.8% to €690.7m (2021: €512.2m). This performance included the impact ofacquisitions in 2021 and 2022 and an ~8% benefit from the impact of currency movements, when translating studioresults from local currency into the euro reporting currency, and particularly the strengthening of the US dollar.
Organic Revenue growth (which adjusts for the impact of acquisitions) was 21.8%. This was driven by a strong
performance across all service lines, against the comparative period in 2021, particularly in our Create andGlobalize Service Lines. Excluding the impact of currency, when converting amounts billed by studios in US dollars
into local currency, organic revenue growth would have been approximately 3% lower. Further details of the
trading performances of each of the Service Lines are provided in the Service Line Review.
Gross profit and margin
Gross profit in 2022 was €267.3m (2021: €200.1m) representing an increase of 33.6%. The gross margin of 38.7%
was broadly in line with 2021 (39.1%). While currency movements mentioned above were also supportive tomargins, the uplift was predominantly offset by the cost and disruption of building up our capacity in new locations
to migrate work previously performed within Russia, to outside of the country.
Operating costs
Adjusted operating costs increased by 33.8% to €120.4m (2021: €90.0m), reflecting the larger Group, but at 17.4%
of revenue were slightly lower than 2021 (17.6%). This was driven by continued good cost control, as the Group
looked to manage the impact of increased travel and business development costs as these activities increased withthe easing of COVID-19 restrictions.
EBITDAEBITDA increased 41.1% to €120.9m (2021: €85.7m). Adjusted EBITDA increased 33.4% to €146.9m comparedwith €110.1m for 2021. The Adjusted EBITDA margin in 2022 of 21.3% was marginally lower than 2021 (21.5%)
reflecting the lower gross margin.
Net finance costs
Net finance costs were €1.4m higher at €3.8m (2021: €2.4m), primarily driven by a €1.0m increase in the unwindingof discounted liabilities relating to deferred consideration.
Alternative performance measures (APMs)
The Group reports a number of APMs to present the financial performance of the business which are not GAAP
measures as defined by IFRS. The Directors believe these measures provide valuable additional information for theusers of the financial information to understand the underlying trading performance of the business. In particular,
adjusted profit measures are used to provide the users of the financial statements a clear understanding of theunderlying profitability of the business over time. A breakdown of the adjusting factors is provided in the tablebelow:
2022
€m

2021
€m

Share-based payments expense

18.7

16.4

Costs of acquisition and integration

8.4

8.0

Amortisation of intangible assets

16.8

13.7

Foreign exchange and other items

0.1

-

44.0

38.1

Total

1.14m options were granted under incentive plans in 2022. This, together with grants from previous years, hasresulted in a non-cash share-based payments expense of €18.7m in 2022 (2021: €16.4m).

15

One-off costs associated with the acquisition and integration of businesses amounted to €8.4m (2021: €8.0m).
Amortisation of intangible assets increased by €3.1m to €16.8m (2021: €13.7m) reflecting the recent levels ofacquisition activity.
Foreign exchange and other items amounted to a net loss of €0.1m (2021: €nil). This includes €2.9m for theunwinding of discounted liabilities on deferred consideration (2021: €1.9m) offset by a net foreign exchange gain of€1.7m (2021: €2.0m) and other income of €1.1m (2021: €nil). Keywords does not hedge foreign currency exposuresin relation to net current assets. While more material movements in foreign exchange can be impactful onrevenues and expenses, the net impact on the Group's results of movements in exchange rates and the foreignexchange gains and losses incurred during the year mainly relate to the effect of translating net current assets
held in foreign currencies.
A more detailed explanation of the measures used together with a reconciliation to the corresponding GAAP
measures is provided in the APMs section at the end of the report.
Profit before taxation
Profit before tax increased by €20.0m (+41.7% year-on-year) to €68.0m (2021: €48.0m). Adjusted profit before tax,
which adjusts for the items described in the APMs section above increased by €26.0m (+30.2% year-on-year) to€112.0m compared with €86.0m in 2021. This reflects a small reduction in Adjusted profit before tax margin of
0.6% points to 16.2% ( 2021: 16.8%). This was due to costs and disruption associated with the relocation of ourRussia-based operations to outside of the country, which impacted margins by ~2% points, together with thereturn of travel, business development and return to office costs (~1%) post COVID-19. Largely offsetting these wasa ~2.5% point margin benefit from foreign exchange, particularly the strong US dollar during the period as we
invoice more than 50% of our sales in US dollars.
Taxation
The tax charge increased by €6.7m to €20.6m (2021: €13.9m) 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 onthese items, the Adjusted effective tax rate for 2022 was 22.0%, slightly higher than the rate of 21.6% in 2021.
Earnings per share
Basic earnings per share increased by 36.3% to 61.54c (2021: 45.16c) primarily reflecting the 38.9% increase in thestatutory Profit after tax. Adjusted earnings per share which adjusts for the items noted in the APMs section above
and the tax impact arising on these items was 113.50c (2021: 89.24c), representing an increase of 27.2%, with therise in Adjusted profit before tax of 30.2% partially offset by a 1.9% increase in the basic weighted average numberof shares.

Cash flow and net debt
The Group generated Adjusted EBITDA of €146.9m in 2022, an increase of €36.8m from €110.1m in 2021. There
was a €3.6m outflow in respect of the amounts due for Multi-Media Tax Credits (MMTCs) and Video Game Tax
Credits (VGTRs), lower than 2021, as we saw a return to more normal phasing of payments in H2 2022. MMTCs and
VGTRs are subsidies that are recognised as work is performed but are typically paid in the second half of thefollowing year. Other working capital saw an inflow of €0.6m, a €10.7m change from 2021, mainly due to anincrease in accrued income associated with the strong performance of the business at the end of the year offset
by a reduction in debtor days.
Investment in property, plant and equipment increased by €7.6m to €27.0m (2021: €19.4m) as we continued toinvest in growing the business. Property lease payments of principal of €11.4m were 14.0% higher than the priorperiod (2021: €10.0m) mainly related to acquisitions in the period.
Operating cash flows of €105.0m were ahead of 2021 (€87.2m), primarily due to the €36.8m increase in Adjusted
EBITDA, partially offset by the change in working capital.

16

2022
€m

2021
€m

Change€m

Adjusted EBITDA

146.9

110.1

36.8

MMTC and VGTR

(3.6)

(4.5)

0.9

Working capital and other items

0.6

11.3

(10.7)

Capex – property, plant and equipment (PPE)(27.0)(19.4)(7.6)

Capex – intangible assets

(0.5)

(0.3)

(0.2)

Payments of principal on lease liabilities(11.4)(10.0)(1.4)

Operating cash flows

105.0

87.2

17.8

Net interest paid

(1.5)

(2.7)

1.2

Free cash flow before tax

103.5

84.5

19.0

Tax

(17.5)(23.9)

6.4

Free cash flow

86.0

60.6

25.4

(113.3)(63.1)(50.2)

M&A – acquisition and integration costs

(3.1)

(2.4)

(0.7)

Other income and other items

1.6

–

1.6

Dividends paid

(2.0)

(0.6)

(1.4)

Shares issued for cash

6.8

5.3

1.5

(24.0)(0.2)(23.8)

0.2

2.9

(2.7)

Increase in net cash / (debt)(23.8)

2.7(26.5)

Opening net cash / (debt)

105.6

102.9

Closing net cash / (debt)

81.8

105.6

M&A – acquisition spend

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

There was a €6.4m reduction in cash tax paid to €17.5m (2021: €23.9m) as payment schedules return to a morenormal pattern following pandemic related timing differences in 2021. Net interest payments, which largely relate
to fees on the Revolving Credit Facillity (RCF), were €1.5m compared to €2.7m in 2021.
This resulted in Free cash flow of €86.0m, €25.4m ahead of 2021 (€60.6m). Adjusted free cash flow, which adjustsfor capital expenditure that is supporting growth in future periods was €112.1m in 2022, ahead of 2021 (€92.3m).
The Adjusted cash conversion rate of 100.1% was below 2021 (107.3%), but ahead of our guidance for the year of
80%.
Cash spent on acquisitions totalled €116.4m, of which €25.8m was in respect of the cash component of prior year
acquisitions and €3.1m was in relation to acquisition and integration costs. This was €50.9m higher than the spend
in 2021 due to the timing of acquisitions.
This resulted in a reduction in net cash of €23.8m in 2022, leading to closing net cash of €81.8m (2021: €105.6m).

17Balance sheet and liquidity
The Group funds itself primarily through cash generation and a syndicated RCF of €150m that matures in
December 2024. The RCF includes an accordion option to increase the facility up to €200m and an option toextend the term by two further one-year periods (both subject to lender consent). During the year the first oneyear extension was exercised. The majority of Group borrowings are subject to two financial covenants that arecalculated in accordance with the facility agreement:
Leverage: Maximum Total Net Borrowings to Adjusted EBITDA ratio of three times; andInterest cover: Minimum Adjusted Operating Profit to Net Finance Costs ratio of four times.
The Group entered the year with a strong balance sheet, with net cash (excluding IFRS 16 leases) of €105.6m as at
31 December 2021. Following €116.4m of cash deployed in the period to support the Group’s value accretive M&A
programme, at the end of 2022, Keywords had net cash (excluding IFRS 16 leases) of €81.8m and undrawn
committed facilities of €150m. The Group has no exposure to Silicon Valley Bank.
Capital Allocation
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, particularly M&A, in linewith our strategy.
Following the interim dividend payment of 0.77p per share in September 2022, the Board has recommended a final
dividend of 1.60p per share, which will make the total dividend for the year ended 31 December 2022 of 2.37p per
share, an increase of 10% over the 2021 full year dividend (2021: 2.15p per share).
Subject to shareholder approval at the 2023 Annual General Meeting, the final dividend will be paid on 30 June
2023 to all shareholders on the register at 2 June 2023 and the shares will trade ex-dividend on 1 June 2023 The
final dividend payment will represent a total cost of approximately €1.4m of cash resources subject to currency
fluctuations.
Keywords has authorised the Link Market Services Trustees Limited (‘Link’) to operate a Dividend Reinvestment
Plan (DRIP) for the Group’s shareholders for the final dividend and going forward, to provide greater flexibility forshareholders to manage their dividends. Instructions for shareholders on how to apply for the DRIP will be included
in communications regarding the final dividend, and any queries regarding the DRIP should be directed to Link.
The Group also intends to use its Employee Benefit Trust to undertake market purchases of Company shares in H1
2023, amounting to an aggregate of up to €5m, in order to satisfy future exercises of LTIPs or stock options
pursuant to the relevant share plan.
Guidance for 2023
We have made a good start to 2023, with trading in line with our expectations for the year. As previously guided,
we continue to expect organic growth to moderate from 2022 levels but remain above the medium-term guidanceof 10%+.
Adjusted profit before tax margin normalised during 2022 and is expected to remain around 15% in 2023 aspreviously guided, excluding the potential impact of any debt we take on in the future to fund acquisitions. Moving
forward, and against a backdrop of higher interest rates globally, we will focus future guidance on Adjusted
Operating Profit, which historically has been very similar to Adjusted PBT, and we expect this to be around 15% in
2023.
During 2022, we benefited from the strength of the US dollar and are mindful that there remains potential volatility
in the foreign exchange markets beyond our control that may impact on our performance through the year. The
transition out of Russia will also continue during 2023 and will result in a modest one-off charge relating to theclosure of our operations in the country.
The Adjusted Effective Tax rate is expected to be in line with the 2022 rate of ~22%. We are anticipating capex tobe slightly ahead of 2022 relative to revenue, reflecting continued expansionary capex and investment in ourplatform to support future growth, with an overall Adjusted Cash Conversion rate of at least 80%.

Jon Hauck
Chief Financial Officer
18

Consolidated statement of comprehensive income

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

Note
4
5
5
23
5
11

6
6
7

Years ended 31 December
2022
2021
€'000
€'000
690,718
512,200(423,452)(312,086)
267,266
200,114
1,098(18,678)(16,394)(8,413)(7,972)(16,810)(13,688)(43,901)(38,054)(152,653)(111,695)(196,554)(149,749)
71,81050,365
1,986(5,814)
67,982(20,612)47,3702,045(4,427)47,983(13,875)
34,108286

27(7,947)
6,144
162
46,0158,228
14,581
56,94447,415(45)
47,37034,175(67)
34,10846,01546,01557,011(67)
56,944€ cent61.54
58.86€ cent45.16
42.98

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

Items that may be reclassified subsequently to profit or loss

20

Exchange gain / (loss) in net investment in foreign operations
Exchange gain / (loss) on translation of foreign operations
Non-controlling interest; recycled on disposal of subsidiary
Total comprehensive income / (expense)
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 1 to 29 form an integral part of these consolidated financial statements.
On behalf of the Board

Bertrand Bodson
Director
15 March 2023

Jon Hauck
Director

19

Consolidated statement of financial position

Note
Non-current assets
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

15
16

2022
€'000

2021
€'000

469,953
37,672
44,78422,757
175
575,341

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

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

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

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

11,122
108,423
81
12,635
11,217
143,478
86,173Current liabilities
Trade payables
Other payables
Loans and borrowings
Corporation tax liabilities
Lease liabilities

19

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

17
20
18
21
19

18,308
2,861
6
8,617
30,10559,897557,091

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

22
22
22
22

924
2,467
47,021
286,655
11,01865,379143,627
557,091
557,091

904
2,185
38,549273,677
12,821(1,997)48,19397,905472,237(117)
472,120

17
18

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

22

The notes 1 - 29 form an integral part of these consolidated financial statements. The financial statements were approved and authorised for issue
by the Board on 15 March 2023.
On behalf of the Board

Bertrand Bodson
Director
15 March 2023

Jon Hauck
Director

20

Consolidated statement of changes in equity

Share
capitalSharecapital to beissuedSharepremium

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

€'000

€'000

879

13,047

22,951

250,276(9,988)(1,997)31,79964,318371,285(50)

371,235

Profit / (loss) for the period
Other comprehensive
incomeTotal comprehensive
income for the period
Contributions by andcontributions to theowners:Share-based payments
expense

-

-

-

-

-

-

-

34,17534,175(67)

34,108----22,809--27

22,836-

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

56,944

-

-

-

-

-

-

16,394-

16,394-

16,394

Share options exercised
Employee Share Purchase
Plan

11

-

4,929

-

-

-

-

-

4,940

-

4,940

-

-

398

-

-

-

-

-

398

-

398

Dividends
Acquisition-related
issuance of shares
Contributions by andcontributions to theowners

-

-

-

-

-

-

-

(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

Profit / (loss) for the period
Recycled on disposal ofsubsidiary
Other comprehensive
incomeTotal comprehensive
income for the period
Contributions by andcontributions to theowners:Share-based payments
expense

-

-

-

-

-

-

-

47,41547,415(45)

47,370

-

-

-

-

-

-

-

-

-

162

162

-

-

-

-

(1,803)--286(1,517)-(1,517)

-

-

-

-

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

46,015

-

-

-

-

-

-

18,577-

18,577-

18,577

Share options exercised
Employee Share Purchase
Plan

14

-

5,862

-

-

1,997

(1,492)

-

6,381

-

6,381

-

-

909

-

-

-

101

-

1,010

-

1,010

Dividends
Acquisition-related
issuance of shares
Contributions by andcontributions to theowners

-

-

-

-

-

-

-

(1,979)(1,979)-(1,979)

6

282

1,701

12,978----

14,967-

14,967

20

282

8,472

12,978-

1,997

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

38,956

At 31 December 2022

924

2,467

47,021

286,655

11,018-65,379143,627

557,091-

557,091

At 01 January 2021

21

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 and impairment - right of use assets
Amortisation and impairment of intangible assets
Taxation
Share-based payments expense
Fair value adjustments to contingent consideration
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

47,37034,10818,365
14,585
16,81020,612
18,678
2,282
2,922
969
(309)
514
1,261
766
97,455

11,661
10,473
13,68813,875
16,394
5,567
1,882
985
(62)
419
1,040
583
76,505(11,771)(3,591)(6,457)
18,785(3,034)(17,505)
124,286(15,117)(4,502)
3,341
20,1583,880(23,948)
90,545

27
17
13
11
14

(87,494)(25,800)(27,007)(501)
309(140,493)(48,697)(14,393)(19,360)
(315)
(175)
62
(82,878)

22
18

505
(79)
(11,361)(969)(1,979)6,785(828)(7,926)(24,133)
309
105,71081,886(80)(9,953)
(985)
(615)
5,338
(1,753)(8,048)(381)
3,021
103,070
105,710

13
12
11
7
23
5
6
6
6
20
6

Changes in operating assets and liabilities
Decrease / (increase) in trade receivables
Decrease / (increase) in MMTC and VGTR receivable
Decrease / (increase) in other receivables(Decrease) / increase in accruals, trade and other payables
Taxation paid
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
Cash proceeds, where EBT shares were utilised for the exercise of share options
Repayment 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

Years ended 31 December
2022
2021
€’000
€’000

6
22

22

Notes forming part of the consolidated financial statements
1

Basis of Preparation

Keywords Studios plc (the “Company”) is a company incorporated in the United Kingdom. The consolidated financial statements include thefinancial statements of the Company and its subsidiaries (the “Group”) made up to 31 December 2022.
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 Company.
Going Concern Basis of Accounting
After making enquiries, the Directors consider it appropriate to continue to adopt the going concern basis in preparing the Consolidated andCompany financial statements. In doing so, the Directors have considered the following:•
The 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 where studios are temporarily closed;•
The historical resilience of the broader video games industry in times of economic downturn; and•The ability of the Group to flex its cost base in response to a reduction in trading activity.
The Directors have also considered the Group’s strong liquidity position with net cash of €81.8m as at 31 December 2022, 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 assess the Group’s resilience to adverse outcomes.
This assessment included a reasonable worst-case scenario in which the Group’s principal risks manifest to a severe but plausible level. Even
under the most severe case, the Group would have sufficient liquidity and remain within its banking covenants. The Directors have a reasonable
expectation that the Company and the Group have adequate resources to continue to operate and meet liabilities as they fall due for theforeseeable future, a period considered to be at least twelve months from the date of these financial statements and therefore the going
concern basis of preparation continues to be appropriate.
New Standards, Interpretations and Amendments effective 01 January 2022
A number of new amendments and interpretations to accounting standards are effective from 01 January 2022 including:••••

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.

These amendments and interpretations have not resulted in in any Group accounting policy changes, and have not had a material effect on theGroup’s financial statements.
Other accounting pronouncements which have become effective from 01 January 2022 have not had a material impact on the Group.
New Standards, Interpretations and Amendments not yet effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in futureaccounting periods that the Group has decided not to adopt early.
The following amendments effective for the period beginning 01 January 2023 are expected to be impactful on the Group moving forward:••

Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2): These amendments relate to the applicationof materiality in relation to the disclosure of accounting policies, requiring companies to disclose their material accounting policies
rather than their significant accounting policies, clarifying that accounting policies related to immaterial transactions, other events orconditions are themselves immaterial and as such need not be disclosed; and clarifying that not all accounting policies that relate tomaterial transactions, other events or conditions are themselves material to a company’s financial statements. The Board will consider
these amendments in the context of the 2023 Annual Report.
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12): Amendments effective 01
January 2023, narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal andoffsetting temporary differences e.g. Right of use assets and Lease liabilities. As a result in 2023, deferred tax assets and liabilities
associated with leases will need to be recognised gross from the beginning of the earliest comparative period presented, with any
cumulative effect recognised as an adjustment to retained earnings or other components of equity at that date. The estimatedimpact of adoption based on the carrying value of Right of Use Assets and Lease Liabilities at 31 December 2022 would result in
additional Deferred tax assets of €9.6m and Deferred tax liabilities of €8.4m being recognised.

Other amendments effective for the period beginning 01 January 2023:••

Classification of Liabilities as Current or Non-current – Amendments to IAS 1;
Definition of Accounting Estimate – Amendments to IAS 8

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

23

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 toaffect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elementsof control.
De-facto control exists in situations where the Company has the practical ability to direct the relevant activities of the investee without holding the
majority of the voting rights. In determining whether de-facto control exists, the Company considers all relevant facts and circumstances, including:•
The size of the Company’s voting rights relative to both the size and dispersion of other parties who hold voting rights;•
Substantive potential voting rights held by the Company and by other parties;•
Other contractual arrangements; and•Historic patterns in voting attendance.
The consolidated financial statements present the results of the Company and its subsidiaries (“the Group”) as if they formed a single entity.
Intercompany transactions and balances between Group companies are eliminated in full.
Business Combinations
The consolidated financial statements incorporate the results of business combinations using the purchase method. The results of acquired
operations are included in the consolidated financial statements from the date on which control is obtained. They are consolidated until the date on
which control ceases. In the Consolidated statement of financial position, the acquired identifiable assets, liabilities and contingent liabilities are
initially recognised at their fair values at the acquisition date. If the initial accounting for a business combination is incomplete by the end of thereporting period in which the combination occurs, the Group reports provisional amounts for the items for which the valuation of the fair value of
assets and liabilities acquired is still in progress. Those provisional amounts are adjusted when additional information is obtained about facts andcircumstances which would have affected the amounts recognised as of that date, and any adjustments to the provisional values allocated to theconsideration, identifiable assets or liabilities (and contingent liabilities, if relevant) are made within the measurement period, a period of no morethan one year from the acquisition date.
Any contingent consideration payable is recognised at fair value at the acquisition date and is split between current liabilities and long-term liabilities
depending on when it is due. 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 / orrevenue targets must be exceeded. At each balance sheet date, the fair value of the contingent consideration is revalued, with the expected payout determined separately in respect of each individual acquisition and any change recognised in the statement of comprehensive 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 isfixed at the date of the acquisition. Deferred consideration may also be in the form of cash consideration payable at a future defined date. Suchconsideration 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 the identifiable assets, liabilities
and contingent liabilities acquired. The cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus theamount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity
interest in the acquiree. Contingent consideration is included at fair value on the acquisition date and, in the case of contingent consideration
classified as a financial liability, re-measured subsequently through the profit and loss. Acquisition-related costs are recognised 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 atfair value. The fair value attributed is determined by discounting the expected future cash flows generated from the net margin of the business fromthe main customers taken on at acquisition. The assets are amortised on a straight-line basis (to administration expenses) over their useful economic
lives (typically five years is deemed appropriate, however, this is re-examined for each acquisition).
Other Intangible Assets
Other intangible assets include Intellectual Property and Music Licences, both acquired and internally developed. Other intangible assets arerecognised 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 the Group 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 their useful lives, being the estimated period overwhich the Group will use the assets. Residual amounts, useful lives and the amortization 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; and•The ability to measure reliably the expenditure attributable to the intangible asset during its development.
24

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 from the date of full commercial use of the product. During the period of development, theasset is tested for impairment annually. If specific events indicate that impairment of an item of intangible asset may have taken place, theitem’s recoverability is assessed by comparing its carrying amount with its recoverable amount. The recoverable amount is the higher of the fairvalue net of disposal costs and the value in use.
Impairment
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end.
Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may
not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs tosell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets
to which it belongs for which there are separately identifiable cash flows; its cash generating units (“CGUs”). Goodwill is allocated on initialrecognition to each of the Group’s CGUs that are expected to benefit from a business combination that gives rise to the goodwill.
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 and cash equivalents include cashon 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 the functional currency of the
Parent Company.
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate(their “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities aretranslated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities arerecognised immediately in profit or loss.
On consolidation, the results of overseas operations are translated into euro at rates approximating when the transactions took place. All assets andliabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the reporting
date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate arerecognised in other comprehensive income and accumulated in the foreign exchange reserve.
Exchange differences recognised in profit or loss in Group entities’ separate financial statements on the translation of long-term items forming partof the Group’s net investment in the overseas operation concerned are classified to other comprehensive income and accumulated in the foreignexchange reserve on consolidation. 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 isseparately assessed, the transaction price is allocated to each obligation, and related revenues are recognised as services or assets are transferredto the customer. Performance obligations are typically satisfied over time, as the majority of contracts meet the criteria outlined in IFRS 15
paragraph 35 (a) and (c).
Due to the nature of the services provided and the competitive nature of the market, contracts generally allocate specific transaction prices toseparate performance obligations. Individual services or individual milestones generally involve extensive commercial negotiation to arrive at the
specific agreed-upon tasks, and the related pricing outlined in the contract. Such negotiations extend further for milestone based contracts to also
include the criteria involved in the periodic and regular process of milestone acceptance by the customer. Such criteria may involve qualitative, as
well as quantitative measures and judgements.
In measuring progress towards complete satisfaction of performance obligations, the input method is considered to be the most appropriate
method to depict the underlying nature of the contracts with customers, the interactive way the service is delivered and projects are managed withthe customer. For time-and-materials contracts, other than tracking and valuing time expended, significant judgement is not normally involved. For
milestone based contracts, progress is generally measured based on the proportion of contract costs incurred at the balance sheet date, (e.g.
worked days) relative to the total estimated costs of the contract, involving estimates of the cost to completion etc. Added to this, significant
judgement can be involved in measuring progress towards customer acceptance of the milestone. Significant judgement may also be involved
where circumstances arise that may change the original estimates of revenues, costs or extent of progress towards complete satisfaction of theperformance obligations. In such circumstances estimates are revised. These revisions may result in increases or decreases in revenue or costs andare reflected in income in the period in which the circumstances that give rise to the revision became known. When the outcome of a contract
cannot be measured reliably, contract revenue is recognised only to the extent that milestones have been accepted by the customer. Contract
costs are recognised as incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised
immediately.
Revenue recognised represents the consideration received or receivable, net of sales taxes, rebates discounts and after eliminating intercompany
sales. Revenue is recognised only where it is probable that consideration will be received. Where consideration is received and the related revenue
has not been recognised, the consideration received is recognised as a contract liability (Deferred Revenue), until either revenue is recognised or
the consideration is refunded.
25

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,with performance obligations satisfied over time. Contracts are generally short term in duration; however, for longer contracts the input
method is used to measure progress (e.g. worked days relative to the total expected inputs). Time-and-materials based contract revenue
is recognised as the related services are rendered. For milestone based contracts where progress can be measured reliably towards
complete satisfaction of the performance obligation, revenue is recognised using the input method to measure progress. Where
progress cannot be measured reliably, revenue is recognised on milestone acceptance.
•
Marketing – Marketing services include game trailers, marketing art and materials, PR and full brand campaign strategies. Contracts canbe either time-and-materials based or milestone based, with performance obligations satisfied over time. Contracts are generally shortterm in duration; however, for longer contracts the input method is used to measure progress. Time-and-materials based contract
revenue is recognised as the related services are rendered. For milestone based contracts where progress can be measured reliably
towards complete satisfaction of the performance obligation, revenue is recognised using the input method to measure progress. Where
progress cannot be measured reliably, revenue is recognised on milestone acceptance.
•
Game Development – Game Development relates to software engineering services which are integrated with client processes to develop
video games. Contracts can be either time-and-materials based or milestone based, with performance obligations satisfied over time.
Contracts are generally longer term in duration. Time-and-materials based contract revenue is recognised as the related services are
rendered. For milestone based contracts where progress can be measured reliably towards complete satisfaction of the performanceobligation, revenue is recognised using the input method to measure progress. Where progress cannot be measured reliably, revenue isrecognised on milestone acceptance.
•
Audio – Audio services relate to the audio production process for computer games and includes script translation, actor selection andtalent management through pre-production, audio direction, recording, and post-production, including native language quality assuranceof the recordings. Audio contracts may also involve music licensing or selling music soundtracks. Audio service contracts are typicallymilestone based, with performance obligations satisfied over time. Audio services contracts are generally short term in duration;
however, for longer contracts where progress towards complete satisfaction of the performance obligation can be measured reliably,revenue is recognised using the input method to measure progress. Where progress cannot be measured reliably, audio services revenue
is recognised on milestone acceptance. Music licensing and music soundtracks performance obligations are assessed separately, andrelated revenue is recognised on licence inception and on delivery of the soundtracks, respectively.
•
Functional Testing – Functional Testing relates to quality assurance services provided to game producers to ensure games function as
required. Contracts are typically time-and-materials based and performance obligations are satisfied over time. Contracts are generally
short term in duration. Revenue is recognised as the related services are rendered.
•
Localization – Localization services relate to translation and cultural adaptation of in-game text and audio scripts across multiple gameplatforms and genres. Contracts are typically time-and-materials based and performance obligations are satisfied over time. Contracts
are generally short term in duration; however, for longer contracts the input method is used to measure progress. Localization contracts
may also involve licensing translation software as a service. Such revenue is assessed separately. Revenue is recognised as the related
services are rendered.
•
Localization Testing – Localization Testing involves testing the linguistic correctness and cultural acceptability of computer games.
Contracts are typically time-and-materials based and performance obligations are satisfied over time. Contracts are generally short termin duration. Revenue is recognised as the related services are rendered.
•
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 typicallytime-and-materials based and performance obligations are satisfied over time. Contracts are generally long term in duration. Player
Support contracts may also involve digital support platform software as a service. Revenue is recognised 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 a systematic basis with the costs that it is intended tocompensate. Thus, credits are taken as a deduction against direct costs each period, but typically paid in the following financial year once theclaims have been submitted and agreed. The nature of the grants is such that they are not dependent on taxable profits, and are recognised (under
IAS 20), at their fair value when there is a reasonable assurance that the grant will be received and all attaching conditions have been complied with.
Share-based Payments
The Company issues equity-settled share-based payments to certain employees and Directors under a Share Option Scheme and a Long-Term
Incentive Plan (“LTIP”). Conditional awards under the rules of the LTIP Plan (“Salary Shares”) are also issued to certain employees and Directors.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period. Other than continuous service, grants do nothave non-market-based vesting conditions. At each reporting date the Company adjusts for unvested forfeitures and the impact is recognised in
profit or loss, with a corresponding adjustment to equity reserves. The Company has no legal or constructive obligation to repurchase or settle theoptions in cash.
Additional employer costs, including social security taxes, in respect of options and awards are expensed over the vesting period with acorresponding liability recognised. The liability recognised depends on the number of options that are expected to be exercised, and the liability is
adjusted by reference to the fair value of the options at the end of each reporting period.
Where share-based payments are issued to employees of subsidiary companies, the annual cost of the options are recharged to the subsidiarycompany through an inter-company recharge.
Employee Share Purchase Plan
In 2021, the Group introduced an Employee Share Purchase Plan (“ESPP”). The ESPP allows individual employees the possibility to save up to €500
monthly and acquire KWS shares discounted by 10% on the market price at the date of purchase. The plan has bi-annual purchase periods, withshare-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 fair value of an option by using
the vesting period, the expected volatility of the share price, the current share price, the exercise price and the risk-free interest rate. The fair value
26

of the option is amortised over the vesting period, with one-third of the options vesting after two years, one-third after three years, and the balance
vesting after four years. The only vesting condition is continuous service. There is no requirement to revalue the option at any subsequent date.
LTIP
The exercise of LTIP awards is subject to the Company's share price (stock symbol: KWS) performance versus the designated Share Index in terms ofshareholder return over a three-year period. For the awards granted up to 2015, one-third 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 thesame performance conditions as 2018. In 2021, the benchmark Index was amended to be the FTSE250 Index (excluding investment trusts) andthreshold 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, the fair value of the shares isamortised 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 the Group’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 the reporting date in the countries
in which the Group companies have been incorporated.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial positiondiffers from its tax base, except for differences arising on:••

The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects
neither accounting or taxable profit; andInvestments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference
and it is probable that the difference will not reverse in the foreseeable future.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are
expected to apply when the deferred tax liabilities / (assets) are settled / (recovered).
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and thedeferred tax assets and liabilities relate to taxes levied by the same tax authority on either:••

The same taxable Group company; orDifferent Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle theliabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled
or recovered.

Property, Plant and Equipment
Property, plant and equipment comprise computers, leasehold improvements, and office furniture and equipment, and are stated at cost lessaccumulated depreciation. Carrying amounts are reviewed for impairment whenever events or changes in circumstances indicate that theircarrying amount may not be recoverable. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written
down immediately to its recoverable amount.
Property, plant and equipment acquired through business combinations are valued at fair value on the date of acquisition.
Depreciation is calculated to write off the cost of fixed assets on a straight-line basis over the expected useful lives of the assets concerned. The
principal annual rates used for this purpose are:
Computers and software
Office furniture and equipment
Leasehold improvements

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

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in the Consolidated statement ofcomprehensive income.
Financial Assets
The Group’s most significant financial assets comprise trade and other receivables and cash and cash equivalents in the Consolidated statement offinancial position, whereas the Company’s most significant financial assets comprise inter-group receivables.
Trade Receivables
Trade receivables, which principally represent amounts due from customers, are recognised at amortised cost as they meet the IFRS 9 classification
test of being held to collect, and the cash flow characteristics represent solely payments of principal and interest. The Group’s impairment
methodology is in line with the requirements of IFRS 9. The simplified approach to providing for expected credit losses has been applied to tradereceivables, which requires the use of a lifetime expected loss provision.

27

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

3

Critical Accounting Estimates and Judgements

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

Group
o

o

Functional Currency: The Directors have considered the requirements of IAS 21 in determining the currency that mostfaithfully represents the economic effects of the underlying transactions, events and conditions to determine the functional
currency. Detailed consideration has been given to both the Primary and Secondary Indicators in forming this conclusion. The
Primary Indicators relate to revenues, 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 are usually retained. With amix of currencies dominating the indicators, there is no clear single currency that influences the Group; however, the euroremains marginally the most dominant when all factors are considered. Therefore, the Directors consider the euro as thecurrency that most faithfully represents the economic effects of the underlying transactions, events and conditions.
Business Combinations (Customer relationships): When acquiring a business, the Group is required to identify and recognise
intangible assets, the determination of which requires a significant degree of judgement. Acquisitions may also result in
intangible benefits being brought into the Group, some of which qualify for recognition as intangible assets while other such
benefits do not meet the recognition requirements of IFRS and therefore form part of goodwill. Customer relationships are
28

o

o

o

o

recognised as separate assets where revenues are recurring in nature and material revenues have been generated with thecustomer for a continuous period of three years. For the Game Development service line, the key asset acquired is typically“know-how”, an asset that is not readily measurable and thus intrinsically linked to goodwill. Relationships are typically fixed
term contract based rather than relationship based. Therefore, neither customer contracts nor customer relationships are
typically recognised on the acquisition of a Game Development business.
IFRS 16 Leases: The Group has determined that the Group’s incremental borrowing rate is the appropriate rate to use to
discount lease liabilities. The Group has applied judgement to determine the lease term for contracts in which it is a lessee that
include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the leaseterm, which significantly affects the lease liabilities and right of use assets recognised.
Business Combinations (Put and call options over Non-controlling interest): The Group acquired an 85% interest in Tantalus in
March 2021, with the sellers retaining a minority shareholding. The shareholder agreement (signed with the purchaseagreement) includes put and call options (“the Forward”) that require the sellers to sell, or require the Group to buy, theremaining 15% shareholding in three years using a pre-determined valuation methodology linked to post-acquisition
performance. IFRS 3 does not provide specific guidance on how such contracts should be accounted for in a businesscombination. The Board determined, taking into consideration all the contracts’ terms and conditions, that the impact of the
Forward put the Group in a similar position as if the Group had acquired a 100% interest in the subsidiary on the acquisitiondate, with deferred contingent consideration payable at a future date. In doing so, the Board considered whether the risks andrewards of ownership reside with the Non-controlling interest or had effectively transferred to the Group, and concluded that
the Non-controlling interest arising on the acquisition had been extinguished by a combination of the Forward and otherconditions in the agreements. Therefore, the Group has accounted for the acquisition as if a 100% interest was acquired on
acquisition, accounting for the initial investment and the Forward as a single linked transaction in which 100% control is gained,with the Forward recognised at fair value, as a financial liability within Deferred and contingent consideration (note 17), and no
Non-controlling interest recognised on the acquisition. Any subsequent re-measurement required due to changes in the fairvalue of the liability will be recognised in the Consolidated statement of comprehensive income.
Operating Segments: While previously it was considered that the Group’s activity, as a single source supplier of services to thegaming industry, constituted one operating and reporting segment (as defined under IFRS 8 Operating Segments), following on
recent executive and organisational changes, the Board consider it more meaningful to present information by segmentaligning to the new organisational and reporting structures:
Create – Game Development and Art Creation;
Globalize – Functional Testing, Localization Testing, Audio and Localization; and,
Engage – Marketing and Player Support.
The Operating segments are reported in note 4, in a manner consistent with the new internal organisational and management
structure, and the internal reporting information provided to the Chief Operating Decision Maker (“CODM”) who is responsible
for allocating resources and assessing performance of the operating segments. The CODM has been identified as the executive
management team made up of the Chief Executive Officer and the Chief Financial Officer. As a corollary, the Board also
considered how the change in segmental reporting impacted the Group’s cash generating units (“CGUs”). CGUs represent thelowest level at which goodwill is monitored for internal management purposes and are not larger than the operating segments
determined in accordance with IFRS 8. While previously the Group was considered to have one CGU, the change in segmental
reporting requires the Group’s CGU’s to be re-considered. The Board determined that monitoring goodwill for impairment at
the line of business level (i.e. Art Creation, Game Development etc.) would be the most appropriate (see note 11).
Goodwill: Goodwill is required to be tested for impairment at least annually or more frequently if changes in circumstances or
the occurrence of events indicating potential impairment exist. The Group uses the present value of future cash flows todetermine recoverable amounts. In calculating the value in use, significant judgement and estimation is required in forecasting
cash flows of CGUs, in determining terminal growth values and in selecting an appropriate discount rate.

Estimates and Assumptions
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historicalexperience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future,
actual experience may differ from these estimates and assumptions.
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 valuation of defined retirement benefits. The Directors consider that no reasonably possible changes
to any of the assumptions used in the estimates would in the view of the Directors give rise to significant risk of a material adjustment to thecarrying value of the associated balances in the subsequent financial year.

29

4

Segmental Analysis and Revenue from Contracts with Customers

Segmental Analysis*

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

2022
€'000

2021
€'000

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

188,178
231,901
92,121
512,200

69,74861,577
15,576
146,901

49,73047,383
12,987110,100

146,901(18,678)(8,413)
1,098(16,810)(18,365)(14,585)662
71,8101,986(5,814)
67,982

110,100(16,394)(7,972)(67)(13,688)(11,661)(10,473)520
50,3652,045(4,427)47,983*The prior year comparatives have been re-classified to present information by segment, aligning to the new organisational and reporting structures (see note 3).
^ The Group reports a number of alternative performance measures (“APMs”), including Adjusted EBITDA, to present the financial performance of the business, that are not GAAP measures
as defined under IFRS. Segmental results are reported in a manner consistent with these measures. A reconciliation of Adjusted EBITDA to the relevant GAAP measure is presented in the
APM’s section.

Operating segments are reported in a manner consistent with the internal organisational and management structure, and the internal reporting
information provided to the Chief Operating Decision Maker (“CODM”) who is responsible for allocating resources and assessing performance of theoperating segments. The CODM has been identified as the executive management team made up of the Chief Executive Officer and the Chief
Financial Officer.

Geographical analysis of non-current assets from continuing businesses

United States
United Kingdom
CanadaAustralia
Italy
PolandIreland
Switzerland
China
France
Other

2022
€'000
264,117
121,556
57,652
51,86916,471
12,561
10,311
10,0259,296
7,150
14,333575,341

2021€'000
171,126
114,871
31,09645,52815,612
3,275
8,422
10,025
8,296
7,548
31,796447,595*The prior year comparatives have been re-classified to align to the current year presentation and ranking, as the Directors consider this measure to be more meaningful.

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

Geographical analysis of revenues, by production location*

2022
€'000
155,509
120,722
115,01742,73139,19526,75926,281
25,29022,71622,211
94,287690,718

CanadaUnited States
United Kingdom
PolandItaly
China
RussiaIndia
Japan
Australia
Other

2021
€'000
97,74896,06094,426
21,39732,44820,35029,424
18,64021,898
7,408
72,401
512,200*The prior year comparatives have been re-classified to align to the current year presentation and ranking by production location.

For many contracts, operations are completed across multiple sites. Analysis of revenues by geographical regions is presented by production
location, which may not reflect the jurisdiction from which the final invoice to the client is raised, or the region of the Group’s customers, whose
locations are worldwide.
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 / ormilestones that extend well into the future. The following are Game Development revenues expected to be recognised for contracts with aschedule of work that extends beyond one year, representing the aggregate amount of the transaction price allocated to the performanceobligations that are unsatisfied (or partially unsatisfied) as at the end of the reporting period:

Revenue expected to be recognised
At 31 December 2022
At 31 December 2021

Total
undelivered€'000
82,06055,294

Scheduledcompletion
within 1 year€'000
77,44844,973

Scheduledcompletion
1-2 years
€'000
4,612
9,319

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 alsoavailed of for Game Development contracts of less than one year in duration.

31

5

Cost of Sales and Operating Profit

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

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

Costs of acquisition and integration
Acquisition and integrations costs re: current year acquisitions (note 27)
Acquisition and integrations costs re: prior acquisitions
Fair value adjustments to contingent consideration (note 17)
Deferred consideration related to continuing employment
Acquisition team and related costs
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

Other income
Gain on disposal of investment

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

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

2022€'000
18,365
14,585
16,810
8,413
671
2,140
(1,098)2021€'000
11,661
10,473
13,688
7,972
605
1,531
-

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

2021
€'000
1,099
191
5,567
454
313
348
7,972

2022
€'000

2021
€'000

318
358

314
278

13
689

13
605

2022
€'000
(1,098)(1,098)

2021
€'000
-

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

32

6Financing 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
Net financing income / (cost)

7

2022
€'000

2021
€'000

309
1,677
1,986

62
1,983
2,045

(662)
(1,261)(969)(2,922)(5,814)(3,828)(520)(1,040)(985)(1,882)(4,427)(2,382)

2022
€'000

2021
€'000

25,844(5,232)
20,612

17,632(3,757)
13,8752022€'000
67,982
12,156
(653)
(204)
7,468
(72)
(924)
(250)
346
932
1,813
20,612
17.9%

2021
€'000
47,983
10,527
(261)
148
3,430
(174)
(951)
(363)
204
658
657
13,875
21.9%

Taxation

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

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

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

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

Tax effects relating to each component of other comprehensive income

2022
€'000

2021
€'000

Exchange gain / (loss) in net investment in foreign operations
Tax (expense) / benefit
Net of tax amount(7,947)993(6,954)8,228(1,029)
7,199

286
286

27
27

6,144
6,144

14,581
14,581

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 amount33

8

Earnings per Share

Basic
Diluted2022€ cent
61.54
58.86

2021
€ cent
45.16
42.98

Earnings
Profit for the period from continuing operations€'000
47,370€'000
34,108

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

Number
75,526,296
3,826,990
79,353,286

Number
67,802

Number219,146

Weighted average number of equity shares
Basic (i)Diluting impact of share options (ii)
Diluted (i)(i) Includes (weighted average) shares to be issued:(ii) Contingently issuable ordinary shares have been excluded where the conditions governing exercisability have not been satisfied:
NumberNumber
LTIPs
409,728
903,656
Share options
511,411921,139
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
Final
Interim
Dividends paid to shareholders 2022

Recommended
Final

In
respectof2021

Approval
date
Sep-21

2021
2022

Mar-22
Sep-22Inrespectof2022

Approval
date
Mar-23€ centper share
0.81
0.81
1.70
0.90
2.60

Pence
STG
per
share
0.70
0.70
1.45
0.77
2.22

Total
dividend
€'000
615
615
1,305
674
1,979

Expected€ centper share
1.80

Pence
STG
per
share
1.60

Expected
total
dividend
€'000
1,406

Payment
date
Oct-21
Jun-22Oct-22

Expected
payment
date
Jun-23

At 31 December 2022, Retained earnings available for distribution (being Retained earnings plus Share-based payments reserve) in the Company
were €77.6m (2021: €47.7m). In addition, certain amounts within Merger reserve are considered distributable (see note 22).
In light of COVID-19 the Directors did not recommend any dividend payments for 2020. Dividend payments were resumed 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 (as dividends) are only remitted where
there are minimal or no tax consequences.

34

10 Staff Costs

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

Average number of employees
Operations
General and administration

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

2022
€'000
345,857
27,788
7,222
18,678399,5452021€'000
263,036
30,455
6,685
16,394
316,5702022
10,272869
11,141

2021
8,821
672
9,493

2022
€'000
2,258
431
54
1,142
3,885

2021
€'000
1,569
201
25
698
2,493

The key management compensation comprises compensation to ten Directors of Keywords Studios plc during the year (2021: eleven).

11

Intangible Assets

Cost
At 01 January 2021
Recognition on acquisition of subsidiaries
AdditionsExchange rate movement
At 31 December 2021
Recognition on acquisition of subsidiaries
Additions
Disposals
Exchange rate movement
At 31 December 2022
Accumulated amortisation
At 01 January 2021
Amortisation charge
Exchange rate movement
At 31 December 2021
Amortisation charge
Disposals
Exchange rate movement
At 31 December 2022
Net book value
At 01 January 2022
At 31 December 2022

Goodwill€'000

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

212,164
97,918
14,955325,037
70,482(159)
1,373
396,733

52,423
11,502
4,400
68,32534,695
1,317
104,337

3,799
315
4,114
25,914501(134)
30,395

268,386
109,420315
19,355
397,476
131,091
501
(159)
2,556
531,465

147
147
(147)
-

25,17813,261
2,269
40,70816,285
1,308
58,301

2,251
427
2,678
525
8
3,211

27,576
13,6882,269
43,533
16,810(147)
1,316
61,512324,890396,733

27,61746,036

1,436
27,184353,943
469,953

Total
€'000

Customer relationships and intellectual property / development costs are amortised on a straight-line basis over five years. Customer relationships
amortisation commences on acquisition, whereas intellectual property / development costs amortisation commences when the product islaunched.

35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 (pre-tax) discount rate used of 10.0% (2021: 12.5%) isbased on the Board’s assessment of the weighted average cost of capital (“WACC”) of the Group.
A cash-generating unit (“CGU”) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash
inflows from other assets or group of assets. The CGU’s represent the lowest level within the Group at which the associated goodwill is assessed forinternal management purposes and are not larger than the operating segments determined in accordance with IFRS 8 Operating Segments. As
outlined in note 3, the Board have determined the lines of business as CGU’s, and Goodwill acquired in business combinations has been allocated to
the CGUs that are expected to benefit from business combinations to date.
A summary of the allocation of the carrying value of goodwill by segment and by CGU is presented below:

Segment
Create:Globalize:

Engage:

2022
€m
218
19
15
14
33
19
35
44
397

CGU
Game Development
Art Creation
Functional Testing
Localization Testing
Audio
Localization
MarketingPlayer Support

2021
€m
177
19
14
13
32
17
42
11
325

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

Key assumptions

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

Actual
2022

2021

2022

10%
2%
1,295
397

10%
2%
792
325

15%
2%
1,552

Sensitivity analysis
2021
2022

2021

5%
2%
1,096

5%
2%
673

15%
2%
947

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

36

12 Right of Use Assets

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

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

2022
€'000

2021
€'000

63,84015,249580(14,186)366
65,84944,092
15,392
1,402
2,954
63,84027,84911,753(14,186)
2,832(71)
28,177

16,285
10,473
1,091
27,84935,99137,67227,80735,99113 Property, Plant and Equipment

Cost
At 01 January 2021
Exchange rate movement
Additions
Acquisitions through business combinations at fair value
Disposals
At 31 December 2021
Exchange rate movement
Additions
Acquisitions through business combinations at fair value
Disposals
At 31 December 2022
Accumulated depreciation
At 01 January 2021
Exchange rate movement
Depreciation charge
Disposals
At 31 December 2021
Exchange rate movement
Depreciation charge
Disposals
At 31 December 2022
Net book value
At 01 January 2022
At 31 December 2022

Computers
and software€'000

Officefurniture andequipment€'000

Leaseholdimprovements
€'000

Total
€'000

29,2062,877
13,492304(2,830)43,049(94)
21,962243(1,132)64,028

6,906
783
1,444
266
(185)
9,214
(109)
1,129
131
(490)
9,875

14,912
1,289
4,424
2
(5,699)14,928
105
3,916
48
(828)
18,16951,024
4,949
19,360572(8,714)
67,191(98)
27,007422(2,450)92,072

16,8862,342
8,170(2,830)24,56847
12,539(1,133)36,021

3,302
603
590
(185)
4,310
71
799
(490)
4,690

4,417
676
2,901
(5,699)
2,295
82
5,027
(827)
6,577

24,605
3,621
11,661(8,714)
31,173200
18,365(2,450)47,28818,481
28,007

4,904
5,185

12,633
11,59236,01844,78437

14 Investments

2022
€'000
175

Investments

2021
€'000
175

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

15 Trade Receivables

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

2022
€'000
85,012(3,449)81,5632021€'000
69,835(1,768)68,0672022€'000
25,756
13,22010,527
6,538
5,374
61,4152021€'000
22,860
9,997
7,114
4,936
4,203
49,110Trade receivables arise from revenues derived from contracts with customers.

16 Other Receivables

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

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

38

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)

2022
€'000

2021
€'000

64,734
3,577
44,94526,099139,355

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

2022
€'000

2021
€'000

18,30818,30818,254
18,2542022€'000
54,142(25,800)(8,040)2,922
37,9502,282(203)
63,2532021€'000
20,802(14,393)(2,838)1,882
40,0595,567
3,063
54,142The 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
Consideration settled by shares
Unwinding of discount (note 6)
Additional liabilities from current year acquisitions (note 27)
Adjustment arising from prior year business combinations
Exchange rate movement
Carrying amount at the end of the year

In general, in order for contingent consideration to become payable, pre-defined profit and / or revenue targets must be exceeded. The
valuation of contingent consideration is derived using data from sources that are not widely available to the public and involves a degree ofjudgement (Level 3 input in the fair value hierarchy). A 10% increase in expected performance would increase the carrying value of contingent
consideration by €1.0m, while a 10% reduction in expected performance would decrease the carrying value by €4.0m. On an undiscounted
basis, the Group may be liable for deferred and contingent consideration ranging from €7.7m to a maximum of €66.6m.
(ii)

Other payables includes deferred income from contracts with customers of €9,127k (2021: €3,470k), which mainly comprise items
invoiced prior to services being delivered. Excluding amounts recognised on acquisition of subsidiaries (€3,461k, see note 27), themovement in the year comprises transfers in and out as items are deferred and subsequently recognised as revenue.

39

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
Canadian dollars

2022
€'000

2021
€'000

-

-

51
51

129
129

51

129

51

129

The Company has an unsecured revolving credit facility (“RCF”) in place with a syndicate of four lenders. The RCF is a committed facility that allows
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), toincrease the facility by up to €50m to a total of €200m, at interest rates based on a margin over currency benchmark rates, plus a separate margin
charged for the unutilised facility. The RCF agreement extends to December 2024, with an option to extend the term by two further one-year
periods. The first extension (to 2025) was triggered during 2022.
Loans and borrowings (classified as financial liabilities under IFRS 9), are held at amortised cost. Interest expenses which are calculated using theeffective interest method are disclosed in note 6. While technically any borrowings are repaid and re-borrowed multiple times during the term of
the RCF, so long as the Group remains compliant with the financial covenants and certain other terms of the RCF, any debt is rolled from one period
to another, with the legal and commercial substance of a multi-year committed facility. Hence the Group presents any RCF liabilities as non-current.
In connection with the financial covenants of the RCF, the Group is required to comply with and report certain interest cover and leverage ratios.
Non-compliance with RCF terms could result in lenders refusing to advance funds under the facility or, in the worst case, calling in outstandingloans. Throughout the period, the Group operated well within the applicable ratio terms of both the new and previous RCF agreements.
The movements in Loans and borrowings are as follows:

At 01 January 2021
Cash flows:
Drawdowns
Repayments
Non-cash flows:
Exchange rate movement
At 31 December 2021
Cash flows:
Drawdowns
Repayments
Non-cash flows:
Recognition on acquisition of subsidiaries (note 27)
Exchange rate movement
At 31 December 2022

Current€'000
73Noncurrent
€'000
122

Total
€'000
195

-

(80)

(80)

8
81

6
48

14
129

(37)

(42)

(79)

1
45

6

1
51

There were no drawdowns on the RCF during 2022. Loans outstanding refer to amounts owed by Keywords Studios QC-Interactive Inc.

40

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

2022
€'000
37,635580
15,244969(12,330)421
42,519Carrying 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

2021
€'000
28,864
1,402
15,392985(10,938)
1,930
37,635The value of leases not yet commenced to which the lessee is committed, which are not included in lease liabilities at 31 December 2022, was €nil
(2021: €nil).

Maturity analysis of leaseliabilities

2022

2022

2022

2021

2021

2021

€'000
Lease
payments€'000
Financecharges

€'000
Lease
liabilities

€'000
Lease
payments€'000
Financecharges

€'000
Lease
liabilities

12,740326

12,414

12,059842

11,217

26,491
5,317
31,808

1,447
256
1,703

25,044
5,061
30,105

21,2997,000
28,299

1,488
393
1,881

19,811
6,607
26,41844,5482,029

42,51940,3582,723

37,635Current
Not later than one year
Non-current
Later than one year and not later than
five years
Later than five years

At 31 December

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

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

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

2022
€'000

2021
€'000

2,140
2,140

1,531
1,531

1,282
1,282

516
516

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

41

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 of service (“Indemnité de Fin de
Carrière” or “IFC”), entitling the Group's French employees to benefits of up to two months’ 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 a termination 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

2022
€'000
3,088
514
51
(155)
(286)
(351)
2,861

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

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 is expected that there will be no
sudden financial impact on the Group’s results caused by any of these factors. A maturity profile of the obligation 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 2023, 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 tochange 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

2022
€'000
514
51
(286)
279

2021
€'000
419
33
(27)
425

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

2022
€'000
80
(89)
(277)
(286)

2021
€'000
41
(9)
(59)
(27)

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 eachjurisdiction.
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.

42

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

2022
4.87%
4.87%
3.62%

2021
4.07%
3.04%
1.67%

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

2022
945
32
4

2021
874
31
4

Interest rate sensitivities(0.25)%
0.25%

2022
€'000
2,987
2,782

2021
€'000
3,176
2,880

Mortality rate sensitivities(0.025)%0.025%

2022
€'000
2,876
2,875

2021
€'000
3,018
3,015

Staff turnover rate sensitivities(0.50)%
0.50%

2022
€'000
2,886
2,863

2021
€'000
3,049
2,985

Staff salary increase rate sensitivities(0.50)%
0.50%

2022
€'000
2,849
2,916

2021
€'000
2,976
3,072

43

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

Defined benefit termination payments
Available losses
Rent-free period provisions
Fixed asset tax base versus accounting book value
Deferred tax related to tax credits
Deferred tax arising on items deductible on a paid basis
Recognition on acquisition of subsidiaries
Deferred tax arising on intangibles
Offset where legally enforceable right of set off exists
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 book value
Deferred tax related to tax credits
Deferred tax arising on items deductible on a paid basis
Recognition on acquisition of subsidiaries
Deferred tax arising on intangibles
Offset where legally enforceable right of set off exists
Net tax assets / liabilities
Impact of change in tax rates
Prior year (over) / under provision
Total (credited) / charged to income statement

2022
€'000

2022
€'000

2022
€'000

Assets
308
2,830
258
1,092
(2)
8,879
15,393
11,293(17,294)
22,757

Liabilities
124
13
1,983
3,877
2,091
13,341
4,482(17,294)
8,617

Net
184
2,817
258
(891)
(3,879)
6,788
2,052
6,811
14,140

2021
€'000

2021
€'000

2021
€'000

Assets
328
1,817
222
1,818
5,557
2,539
9,187
21,468

Liabilities
1,702
3,570
1,761
3,006
3,801
13,840

Net
328
1,817
222
116
(3,570)
3,796
(467)
5,386
7,628

2022
€'000
(Credited) /charged toincomestatement
144(1,000)
(36)
1,007
309
(2,992)(1,892)(4,460)13(785)(5,232)

2021€'000(Credited) /charged toincomestatement
(259)
(660)
(147)
(217)
1,464
(1,857)(2,345)(4,021)
189
75(3,757)The deferred tax asset not recognised on available losses at the period end is €3.8m (2021: €3.2m). Deferred tax assets anddeferred tax liabilities are offset where a legally enforceable right to offset the recognised amounts exists, the deferred tax
assets and deferred tax liabilities relate to taxes levied by the same taxation authority, and the Group anticipates they will besettled either at the same time or, on a net basis.

44

22 Shareholders’ Equity
Share Capital

Issue date

At 01 January 2021
Acquisition-related issuance ofshares:High Voltage Software
Heavy Iron
Tantalus
Tantalus
Climax Studios
Climax Studios
Ichi
Coconut Lizard
KantanKantan related adjustment
AMC
Maverick Media
Coconut Lizard
G-Net Media
G-Net Media related adjustment
Waste
Indigo Pearl
High Voltage Software
Acquisition-related issuance ofsharesEmployee Share Purchase Plan
Exercise of share options
At 31 December 2021
Acquisition-related issuance ofshares:
Waste
Heavy Iron
Heavy Iron related adjustment
Jinglebell
Tantalus Media
Forgotten Empires
Forgotten Empires
Mighty Games
ClimaxAMC
Smoking Gun
Mighty Games
Smoking Gun
G-Net MediaAcquisition-related issuance ofsharesEmployee Share Purchase Plan
Exercise of share options
At 31 December 2022

12-Jan-21
12-Jan-21
18-Mar-21
15-Apr-21
21-Apr-21
17-May-21
28-May-21
25-Jun-21
02-Jul-21
02-Jul-21
11-Aug-21
27-Aug-21
07-Sep-21
06-Dec-21
06-Dec-21
16-Dec-21
22-Dec-21
24-Dec-21

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

Per share €

26.06
31.84
27.87
27.87
33.53
33.53
15.94
18.24
15.86
15.86
33.49
25.35
28.44
23.26
23.26
30.78
26.27
29.77

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

Number ofordinary£0.01 shares

Number ofordinary£0.01
shares - tobe issued

Sharecapital
€’000

Share
capital - tobe issued
€'000

Share
premium€’000

Mergerreserve€’000

74,079,243

532,985879

13,047

22,951

250,276

307,597368,750
232,517
14,635
19,73912,61436,211
7,962
130,410
20,125
69,130(307,597)
12,914
368,750(368,750)
232,517(232,517)(14,635)(19,739)(12,614)(2,683)25,080(13,579)(130,410)(38)
20,585(20,125)
-

4
4
3
2
1

(8,017)411
10,275(10,275)
7,797(7,797)
(233)
(399)
(200)
840
(334)
(3,034)
(1)
634
(529)
-

10,271
-

8,013
7,794
233
399
200
918
227
3,032
528
2,057

1,219,690
13,982962,860
76,275,775(462,841)
70,14414
11
904(10,862)
2,185

10,271
398
4,929
38,54923,401
273,677

20,585
12,91453
11,56428,473
135,559
25,081
28,443
107,025
114,038(20,585)(12,914)(11,564)
60,857
26,881
28,443(25,081)
107,025(28,443)(107,025)
-

2
2
2

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

884
817
-

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

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

17,59487,738

6
14
924

282
2,467

1,701
909
5,862
47,021

12,978286,655

Subject to applicable law, the Company’s articles of association and any relevant authority of the Company passed by the shareholders in general
meeting, there is no limit to the number of shares which the Company can issue, nor are there are any restrictions on dividends or distributions onsuch shares. In the context of the Company’s general meeting authorities, at the Company’s AGM on 20 May 2022 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)b)

Up to 3,818,215 shares in respect of the Company’s Long Term Incentive Plan and Share Option Plan (5% of the Company’s issued sharecapital as at 4 April 2022); andOtherwise, up to 25,454,768 shares (33.3% of the Company’s issued share capital as at 4 April 2022).

This authority is considered prudent as it gives the Company flexibility to take advantage of possible opportunities which may arise from time totime. The authority granted at the 2022 AGM will expire on the earlier of (i) fifteen months after 20 May 2022; and (ii) the conclusion of the 2023
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.
45

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

Shares-Ordinary shares held in the EBT

2022

€'000
-

Shares335,425

2021

€'000
1,997

During the period all of the shares held in the EBT were utilised for the exercise of share options.
Reserves
The following describes the nature and purpose of each reserve within owners’ equity:

Reserve

Description and purpose

Retained earnings

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

Foreign exchange reserve

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

Share premium

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

Share-based payments reserve

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

Shares to be issued

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

Merger reserve

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

46

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:
2022
€'000
2,689
15,888101
18,678

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

2021
€'000
3,446
12,90444
16,394Of the total Share-based payments expense, €1,142k relates to Directors of the Company (2021: €698k).
Share Option Scheme
Share options are granted to Executive Directors and to permanent employees. The exercise price of the granted options is equal to the market priceof the shares at the time of the award of the options. The Company has no legal or constructive obligation to repurchase or settle the options in cash.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

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

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 pricein £ per share
12.66
25.48
18.96
11.46
15.68
6.74
27.42

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

Number ofoptions
2,345,238
616,000(163,791)(373,879)
2,423,568
668,734

Summary by year

Year of Option
Exercise price
Outstanding at the beginning of
the period
Granted
LapsedExercised
Outstanding at the end of theperiodExercisable at 31 December 2022
Exercisable 2023
Exercisable 2024
Exercisable 2025
Exercisable 2026

2015
£1.58

2016
£2.54

2017
£7.76

2018
£17.102019£15.882020£15.932021£25.48

2022
-

Total

385,295(4,442)(380,853)

20,577(6,238)57,000(15,450)

244,924(8,000)(85,405)

452,750(11,270)(120,830)

698,022(56,022)(95,650)

565,000(53,589)--

2,423,568(133,323)(704,426)-

14,33914,339-41,55041,550-151,519
151,519-

320,650
153,150
167,500-

546,350
120,350
213,000
213,000-

511,411411
170,333
170,333
170,334--

1,585,819
481,319
550,833
383,333
170,334-

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

2015
£1.64
£1.58
€0.56
4 Years
28.03%
0.90%
0.75%

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

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

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

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

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

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

2022
-

-

-

-

-

5

17

29

-

Weighted
average

16

Expected volatility was determined by reference to KWS volatility. The expected life used in the model has been adjusted based on management’s
best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
47

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:

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

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 pricein £ per share
0.01
0.01
0.01
0.01
0.01
0.01
27.62

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

Number ofoptions
3,692,817
932,656(312,006)(608,569)
3,704,898
559,506

Summary by year

Year of Option
Exercise price
Outstanding at the beginning of
the period
Granted
LapsedExercised
Outstanding at the end of theperiodExercisable at 31 December 2022
Exercisable 2023
Exercisable 2024
Exercisable 2025

2015
£0.01

2016
£0.01

2017
£0.01

2018
£0.01

2019
£0.01

2020
£0.01

2021
£0.01

2022
£0.01

Total

39,000(39,000)

85,888(64,200)

105,036(60,293)

329,582(143,582)

1,018,536(8,656)(521,099)

1,223,200(52,410)-

903,656(58,349)-

901,690(10,826)-

3,704,898
901,690(130,241)(828,174)-

21,68821,688-44,74344,743-

186,000
186,000-

488,781
488,781-

1,170,790
1,170,790-

845,307845,307-890,864
890,8643,648,173
741,2121,170,790
845,307890,864

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

2015
£1.60
£0.01
€1.38
3 Years
28.21%
0.88%

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

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

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

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

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

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

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

-

-

-

-

-

5

17

29

Weighted
average

13

Expected volatility was determined by reference to KWS share price volatility. The expected life used in the model has been adjusted based on
management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. As any dividends earned
are to be 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 anniversaryof the grant.

48

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

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

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

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

2021
Average
exercise pricein £ per share
0.01
0.01

Number ofoptions
26,73826,738

Summary by year

Year of Option
Exercise price
Outstanding at the beginning of theperiodGranted
LapsedVestedOutstanding at the end of the period
Vesting 2023
Vesting 2024
Vesting 2025

2021
£0.01

2022
£0.01

Total

26,738(953)(1,638)24,147
24,147-

237,676(2,200)235,476
5,928
225,740
3,808

26,738
237,676(953)(3,838)259,623
5,928
249,887
3,808

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

2021£27.40£0.01€32.08
3 Years2022£22.41£0.01€26.47
2 Years20

17

Weighted
average

1749

24 Financial Instruments and Risk Management
Interest Rate Risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group’s income andoperating cash flows are substantially independent of changes in market interest rates. The management monitors interest rate fluctuations on acontinuous basis and acts accordingly.
Where the Group has a significant amount of surplus cash, it invests in higher earning interest deposit accounts. Due to interest rate conditions, theinterest rates for short-term deposits are at similar levels to those achieved for longer terms.
As there were no drawdowns on the RCF in either period presented, any strengthening or weakening of interest rates would not have been impactfulon the pre-tax profit / (loss) reported for the year.

Credit Risk
The Group’s main financial assets are cash and cash equivalents, as well as trade and other receivables which represent the Group’s maximum
exposure to credit risk in connection with its financial assets.
Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial
assets on hand at the reporting date. Customer credit risk is managed at appropriate Group locations according to established policies,
procedures and controls. Customer credit quality is assessed and credit limits are established where appropriate. Outstanding customer
balances are regularly monitored and a review for indicators of impairment (evidence of financial difficulty of the customer, payment default,
breach of contract, etc.) is carried out at each reporting date. Significant balances are reviewed individually while smaller balances are groupedand assessed collectively. Receivables balances are unsecured and non-interest-bearing.
Credit risk arises on trade receivables and accrued income from contracts with customers (reported within other receivables). Trade and otherreceivables are carried on the Consolidated statement of financial position net of provisions.
Trade Receivables
The trade receivables balances disclosed comprise a large number of customers spread across the Group’s activities and geographies withbalances classified as “Not past due” representing 73.0% of the total trade receivables balance at the balance sheet date (2021: 77.5%).
The ageing of trade receivables can be analysed as follows:

At 31 December 2022
At 31 December 2021

Total
€'000
81,56368,067

Not past due€'000
59,53252,753

1-2 months
past due€'000
16,803
14,192More than 2months past
due
€'000
5,228
1,122

2022
€'000
1,768

2021
€'000
1,982

1,733
79
(131)
3,449

821
63
(1,098)
1,768

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

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

50

Trade receivables loss allowance is estimated using a practical expedient to arrive at lifetime expected credit losses. Overdue receivables areevaluated to calculate an expected credit loss using a historical credit loss experience of 1.0% (2021: 1.0%). Taking into account internal and external
information, the historical credit loss experience may be adjusted where it is determined that there has been a significant increase in credit risk.
Where a receivable is credit impaired, the impairment is recognised immediately.

Trade receivables grossCredit impaired
Expected credit losses
At 31 December 2022

Trade receivables grossCredit impaired
Expected credit losses
At 31 December 2021

Total
€'000
85,012(2,598)(851)
81,563Total€'000
69,835(1,070)(698)
68,067

Not past due€'000
60,134(602)
59,532

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

Not past due€'000
53,286(533)
52,753

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

Accrued income from contracts with customers
Accrued income from contracts with customers balances comprise a large number of projects in process spread across the Group’s activities
and geographies, with balances classified as aged “0-30 days” representing 76.6% of the balance at the balance sheet date (2021: 74.1%).
The ageing of accrued income from contracts with customers can be analysed as follows:

At 31 December 2022
At 31 December 2021

Total
€'000
13,2209,997

0-30 days€'000
10,1247,412

31-60 days
€'000
3,096
2,162

60+ days€'000
423

Accrued income from contracts with customers loss allowance is estimated using a practical expedient to arrive at lifetime expected credit losses
using a historical credit loss experience of 1.0% (2021: 1.0%). Taking into account internal and external information, the historical credit loss
experience may be adjusted where it is determined that there has been a significant increase in credit risk. Where a receivable is credit impaired,
the impairment is recognised immediately.

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

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

60+ days
€'000
2,528
(2,503)(25)-

Accrued income from contracts with customers grossCredit impaired
Expected credit losses
At 31 December 2021

Total
€'000
12,582(2,459)
(126)
9,997

0-30 days
€'000
7,487
(75)
7,412

31-60 days
€'000
2,663
(474)
(27)
2,162

60+ days
€'000
2,432
(1,985)(24)423

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

51

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

2022
€'000
10%
Strengthening
5,981
365
591

US dollar to euro
Sterling to euroCanadian dollar to euro

2022
€'000
10%
Weakening

2021
€'000
10%
Strengthening

2021
€'000
10%
Weakening(4,894)
(299)
(483)

5,545
(1,333)169(4,536)
1,091
(138)

Total Financial Assets and Liabilities
The carrying amount of the financial assets and liabilities shown in the Consolidated and Company Statements of financial position are stated atamortised costs, with the exception of contingent consideration held at fair value.
Liquidity Risk
Liquidity risk arises from the Group’s management of working capital and the financial charges on its debt instruments.
The Group’s policy is to ensure that it will have sufficient cash to allow it to meet its liabilities when they become due. The Directors consider
liquidity risk is mitigated by the strong working capital position, with €44.6m of current assets, including cash of €81.9m available to settle
liabilities as they fall due.
The following are the contractual maturities (representing undiscounted contractual cash flows) of the Group’s financial liabilities:

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

At 31 December 2021
Trade payables
Deferred and contingent consideration (i)Other payables (ii)
Loans and borrowings
Loan interest
Lease liabilities
Total

Carrying
value
Total

Contractual cash flows
Total

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

Carrying
value
Total

Total

€'000
11,122
54,142
72,535
129
37,635
175,563€'000
11,122
61,22372,535129
640,358185,373

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

1-2 years

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

€'000
1,452
5,000
17,224
23,676

Over 5
years
€'000
5,317
5,317

Contractual cash flows
Within 1
year€'000
11,122
37,95372,53581
412,059133,754

1-2 years

2-5 years€'000
14,00848
2
8,257
22,315€'000
9,262
13,042
22,304

Over 5
years
€'000
7,000
7,000

(i)

Deferred and contingent consideration at 31 December 2022 has arisen on business combinations, and is based on contracted amounts to be
paid in the future to sellers under share purchase agreements. In general, in order for contingent consideration to become payable, pre-defined
profit and / or revenue targets must be exceeded. On an undiscounted basis, the Group may be liable for deferred and contingent
consideration up to a maximum of €66.6m.
(ii) Other payables contractual cash flows include liabilities of €15.0m (2021: €8.0m), for Deferred and contingent consideration related tocontinuous employment at Helpshift and Waste, where the purchase agreement for those acquisitions included deferred consideration
contingent on both pre-defined profit and / or revenue targets being exceeded and also tied to the retention of key staff, that are considered
post-acquisition expenses under IFRS 3.
52

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

2022
€'000
51
(81,886)(81,835)
557,091(14.7)%

2021
€'000
129
(105,710)(105,581)
472,120(22.4)%The Group manages capital by monitoring debt to capital and net debt ratios. This debt to capital ratio is calculated as net debt to total equity. Net
debt is calculated as loans and borrowings (as shown in the Consolidated statement of financial position) less cash and cash equivalents. The
liquidity risk and cash management for the Group is managed centrally by the Group Treasury function. Group Treasury manage bank balances
centrally, and monitors the credit rating and stability of the institutions the Group banks with. The Board receives projections on a monthly basis as
well as information regarding cash balances. The Group's strategy is to preserve a strong cash base and secure access to finance at reasonable costby maintaining a good credit rating.

26 Related Parties and Shareholders
The details of key management compensation (being the remuneration of the Directors) are set out in note 10.

53

27 Business Combinations

Details of goodwill and the fair value of net assets acquired

2022
€'000

2021
€'000

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

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

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

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

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

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

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

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

1,177

1,099

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

135,468
87,738621,852
37,994

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

92,895(5,401)87,49459,314(10,617)
48,697

Details of pro forma revenues and profitability of current acquisitions
Pre-acquisition revenue in H1
Pre-acquisition revenue in H2
Pre-acquisition revenue
Pre-acquisition revenue with Keywords Group
Post-acquisition revenue
Pro forma revenue
Pre-acquisition profit before tax
Post-acquisition profit before tax
Pro forma profit before tax

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

10,7795,566
16,345(1,908)24,99039,4272,573
9,653
12,226

Related acquisition costs charged to the Consolidated statement of comprehensive income:Disclosures required by IFRS 3 Business Combinations are provided separately for those individual acquisitions that are considered to bematerial, and in aggregate for individually immaterial acquisitions. Acquisitions are considered individually material if the impact on the Group’s
Revenue and Adjusted Profit Before Tax measures (on an annualised basis) is greater than 5%*. None of the business combinations completed
during the period were considered individually material and therefore warrant separate disclosure.
During the period, the Group completed five acquisitions, Forgotten Empires, Mighty Games, Smoking Gun, LabCom, and Helpshift, purchasing
100% of the share capital of these businesses. 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 other information
relevant to the evaluation of the financial effect of the acquisitions are also presented.
Total purchase consideration of €136.9m includes amounts attributable to Forgotten Empires €35.0m, Mighty Games €6.5m, Smoking Gun€30.2m and Helpshift €63.0m, while Goodwill from current year acquisitions of €70.5m includes amounts related to Forgotten Empires€11.8m, Mighty Games €6.1m, Smoking Gun €22.4m, and Helpshift €29.3m. Identifiable intangible assets - Customer relationships of €34.7m
54

includes amounts attributable to Forgotten Empires €17.8m, Smoking Gun €9.1m and Helpshift €7.8m, while Identifiable intangible assets Intellectual property of €25.9m is mainly attributable to Helpshift.
Total purchase consideration, excludes €6.0m of Deferred and contingent consideration related to continuous employment at Helpshift, where
the purchase agreement includes deferred consideration contingent on both pre-defined profit and / or revenue targets being exceeded andwhich is also tied to the retention of key staff, that are considered post-acquisition expenses under IFRS 3 (note 24).
The main factors leading to the recognition of goodwill on the acquisitions are the presence of certain intangible assets in the acquired entities,
which are not valued for separate recognition. These include expertise in the acquired entities, enhancing and growing our service capabilities,
broadening our service offering, and extending our geographical footprint, further building out our global platform.
The goodwill that arose from business combinations completed in the period that is expected to be deductible for tax purposes was €30.3m(for which a deferred tax asset has been recognised of €7.2m).
*The Group reports a number of alternative performance measures (“APMs”), including Pro forma revenue and Adjusted Profit Before Tax, to present the financial
performance of the business, that are not GAAP measures as defined under IFRS. A reconciliation of these measures to the relevant GAAP measure is presented in
the APM’s section.

28 Subsidiaries
The results and financial position of all the subsidiaries are included in the consolidated financial statements. Details of the Company’s direct andindirect subsidiaries as at 31 December 2022 are set out below:

Name3455 Productions, LLC
9409-2954 Québec Inc.
Alset Limited
AMC RO Studios S.R.L
Babel Media Limited *Babel Media USA, Inc.
Bitsy SG Limited
Blindlight, LLC
Climax Development Limited
Climax Studios Limited
Coconut Lizard Limited
Cord Worldwide Limited
d3t Development Limited
d3t Limited
Descriptive Video Works Inc.
Eastern New Media Limited
Edugame Solutions Private Limited

Country ofincorporation
USA
CanadaUK
Romania
UK
USA
UK
USA
UK
UK
UK
UK
UK
UK
CanadaHong Kong
India

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

Electric Square Limited
Fire Without Smoke Inc
Fire Without Smoke Limited
Forgotten Empires LLC
Forgotten Software S.L.U
GameSim Inc.
g-Net Media, Inc.
Heavy Iron Studios, Inc

UK
USA
UK
USA
Spain
USA
USA
USA

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

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

Helpshift Inc
Helpshift Information Technology (Shanghai)
Co. Ltd
Helpshift Technologies Private Limited

USA
China

15-Dec-22
15-Dec-22

100%
100%

India

15-Dec-22

100%

Helpshift UK Ltd

UK

15-Dec-22

100%

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

USA
USA
UK
UK
UK
Italy
Australia
China

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

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

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

100%
100%
85%
100%
100%

GermanyJapan
Ireland06-Sep-19
30-Nov-10
13-May-98

100%
100%
100%

Keywords International Pte. Limited
Keywords International, Inc.
Keywords Sperasoft LLC
Keywords Studios B.C., Inc.
Keywords Studios d.o.o. Beograd

Singapore
USA
Armenia
CanadaSerbia24-Apr-14
26-Sep-12
07-Apr-22
27-Oct-17
18-May-22

100%
100%
100%
100%
100%

Keywords Studios France SAS

France08-Jun-16

100%

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

Registered office
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
110 High Holborn, London, WC1V 6JS, UK+
Stirbei Voda 36, etaj 1, sector 1, Bucharest, Romania
110 High Holborn, London, WC1V 6JS, UK+
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
110 High Holborn, London, WC1V 6JS, UK+
1111 South Flower Street, Suite 101, Burbank, CA 91502,USA
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
400-725 Granville Street, PO Box 10325, Vancouver BC V7Y 1G5, Canada
4404, 44/F Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong
3rd floor, Vardhman Orchard Plaza, Plot No 4, LSC, West Enclave, Pitampura, New
Delhi, 110034, India
110 High Holborn, London, WC1V 6JS, UK+
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
110 High Holborn, London, WC1V 6JS, UK+8730 Cincinnati Dayton Rd. #1072, West Chester, OH 45071, USA
nº 1 - La Cala Del Moral Rincon De La Victoria calle Murillo
13501 Ingenuity Drive, Suite 310, Orlando, FL 32826, USA
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
1600 Rosecrans Ave., Bldg 7 Ste 300, MBS Media Campus, Manhattan Beach CA,
90266, USA
343 Sansome Street, Suite 500, San Francisco, California, 94104, USA
Southwest Area, 3rd Floor, No. 2123 Pudong Avenue, Shanghai, China
3rd floor, Vardhman Orchard Plaza, Plot No 4, LSC, West Enclave, Pitampura, New
Delhi, 110034, India
New Penderel House 4th Floor, 283 - 288 High Holborn, London, WC1V 7HP, United
Kingdom
2345 Pembroke Ave., Hoffman Estates, IL 60169, USA
201 St. Charles Ave., Suite 2220, New Orleans, LA 70170, USA
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
Via Marco d’Oggiono 12, 20123, Milan, Italy
29 Thornton Crescent, Mitcham, VIC 3132, Australia
Room 701, Building 5, No.860 Dong Ti Yu Hui Road, Hongkou District, Shanghai,
China
20 Kallang Avenue, #06-6A, Lobby B, Pico Creative Centre, 339411, Singapore
110 High Holborn, London, WC1V 6JS, UK+
12 Spring Street, Fitzroy, Victoria, 3065, Australia
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
Rua Professor Aprígio Gonzaga, 35 – 7º andar - São Judas - São Paulo - SP CEP:
04303-000, Brazil
Moriz-Seeler-Strasse 5-7, Franz Ehrlich Haus, 12489, Berlin, Germany
1-22-19 Izumi, Suginami-ku, Tokyo, 168-0063 Japan
Whelan House, South County Business Park, Leopardstown, Dublin 18, D18 T9P8,
Ireland
20 Kallang Avenue, #06-6A, Lobby B, Pico Creative Centre, 339411, Singapore
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
18/1 Vardanants str., 3rd floor, Yerevan 0010, Armenia
1700-1075 West Georgia Street, Vancouver, BC, V6E 3C, Canada
Belgrade, BULEVAR MIHAJLA PUPINA 10L, floor 9, Belgrade-New Belgrade, NEW
BELGRADE, 11070, Serbia
59 Boulevard Exelmans, 75016 Paris, France

55

Name
Keywords Studios India Private Limited

Country ofincorporation
India

Date ofincorporation /acquisition
17-Feb-14

Keywords Studios Italy S.R.L.
Keywords Studios Korea Corporation

Italy
South Korea

08-May-14
11-Jan-21

100%
100%

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

USA
Malta
Mexico08-May-14
04-May-22
16-Jul-15

100%
100%
100%

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

Netherlands
PolandCanadaCanadaCanadaRomania

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

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

Keywords Studios Spain SLU
Keywords Studios Texas, LLC
Keywords Studios Unlimited Company *

Spain
USA
Ireland16-Jul-15
22-Jan-20
27-Mar-18

100%
100%
100%

Keywords Studios US Inc
Keywords Treasury Holdings Limited

USA
Ireland24-Oct-17
30-Nov-22

100%
100%

Keywords UK Holdings Limited
Keywords US Holdings Inc.
Keywords Ventures Limited
Laboratorio Comunicazione S.r.l.
Laced Music Limited
Laced Publishing Limited
Lakshya Digital Private Limited *

UK
USA
UK
Italy
UK
UK
India

28-Mar-18
23-Oct-17
06-Apr-18
04-Nov-22
07-Apr-18
07-Apr-18
09-Oct-14

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

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

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

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

Sperasoft Studios LLC
Sperasoft, Inc.
SperaSystems LLC
SPOV Limited
Strongbox Limited
Studio Gobo Limited
Sunny Side Up Creative Inc.
Synthesis Deutschland GmbH *Synthesis Global Solutions SA *Tantalus Media Pty Limited ~The Trailerfarm Limited
TV+SYNCHRON Berlin GmbH
Waste Creative Limited
Waste Holdings Limited
Wicked Witch Software Pty Limited ~~Wizcorp Inc.
Xcelerator Machine Translations Limited
Xloc, Inc.

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

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

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

Ownership ^100%

Registered office
3rd floor, Vardhman Orchard Plaza, Plot No 4, LSC, West Enclave, Pitampura, New
Delhi, 110034, India
Via Egadi 2, Milano, MI, 20144, Italy
16th Floor, Gangnam Building, 1321-1, Seocho-dong, Seocho-gu, Seoul 137-070,
South Korea
1115 Flower Street, Burbank, CA 91502, USA
Level 3, Valletta Buildings, South Street, Valletta VLT 1103, Malta
Torrente #75, Colonia Ampliación Alpes, Del. Álvaro Obregón, CP. 01710, Ciudad de
México, México
Wilhelmina van Pruisenweg 35, 2595AN The Hague, The Netherlands
11 Ul. Na Zjezdzie, Krakow 30-527, Poland
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
1751 Richardson, Suite 8400, Montreal, QC H3K 1G6, Canada
6-8 Corneliu Coposu Bvd., Unirii View Building, office 103, 1st floor, 3rd district,Bucharest, Romania
Julián Camarillo 6A, 3B, 28037 Madrid, Spain
7800 Shoal Creek Blvd. Suite 240S, Austin, Texas 78757, USA
Whelan House, South County Business Park, Leopardstown, Dublin 18, D18 T9P8,
Ireland
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
Whelan House, South County Business Park, Leopardstown, Dublin 18, D18 T9P8,
Ireland110 High Holborn, London, WC1V 6JS, UK+
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
110 High Holborn, London, WC1V 6JS, UK+
Via Lazzaro Spallanzani 6, 20129 Milan, Italy
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
3rd floor, Vardhman Orchard Plaza, Plot No 4, LSC, West Enclave, Pitampura, New
Delhi, 110034, India
20 Kallang Avenue, #06-6A, Lobby B, Pico Creative Centre, 339411, Singapore
411 SW 2nd Ave Ste 300, Portland, OR 97204, USA
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
29 Thornton Crescent, Mitcham, VIC 3132, Australia
29 Thornton Crescent, Mitcham, VIC 3132, Australia
29 Thornton Crescent, Mitcham, VIC 3132, Australia
110 High Holborn, London, WC1V 6JS, UK+
JI. Timoho II, No. 32, Muja Muju, Kota Yogyakarta, Indonesia
1100-333 Seymour St, Vancouver, BC V6B 5A6, Canada
400-981 Wellington Street West, Ottawa, Ontario, K1Y 2Y1, Canada
Kraj Polska, woj. Małopolskie, powiat Kraków, miejsc. Kraków, ul. Na Kozłóce 27 30664 Kraków, Poland
196084, Russia, Saint-Petersburg, Kievskaya street, 5 - building
251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA
2033 Gateway Pl Ste 500 San Jose, CA 95110-3712, USA
110 High Holborn, London, WC1V 6JS, UK+
306 Victoria House, Victoria, Mahe, Seychelles
110 High Holborn, London, WC1V 6JS, UK+
410 Boulevard Charest Est, Suite 410, Québec, Québec, G1K 8G3, Canada
Holstenkamp 46 A, Bahrenfeld, 22525 Hamburg, Germany
Corso Elvezia 16, 6900 Lugano, Ticino, Switzerland
12 Spring Street, Fitzroy, Victoria, 3065, Australia
110 High Holborn, London, WC1V 6JS, UK+
Moriz-Seeler-Strasse 5-7, Franz Ehrlich Haus, 12489, Berlin, Germany
110 High Holborn, London, WC1V 6JS, UK+
110 High Holborn, London, WC1V 6JS, UK+
29 Thornton Crescent, Mitcham, VIC 3132, Australia
1-22-19 Izumi, Suginami-ku, Tokyo, 168-0063 Japan
Invent, Dublin City University, Glasnevin, Dublin 9, Ireland
8801 Fast Park Drive, Suite 301, Raleigh, NC 27617, USA* Indicates a direct subsidiary (all other holdings are indirect, being subsidiaries of various intermediate group holding companies)^ Proportion of voting rights and ordinary share capital ultimately held by Keywords Group+ The registered office address was changed on 1 February 2023
~ A combination of put and call options are in place requiring the sellers to sell, or the Group to buy the remaining 15% shareholding three years from acquisition. The Group has accounted for theacquisition as if a 100% interest was acquired on acquisition (see note 3).
~~ Wholly owned subsidiary of Keywords Australia Pty Limited. The Group has accounted for the company as if a 100% interest was held (see note 3).

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

Name
AppSecTest Limited
Ichi Creative Limited

Country ofincorporation
UK
USA

Date ofincorporation /acquisition
22-Jan-19
26-Nov-19

Ownership
49%
100%

Date of restructuring
13-Apr-22
15-Dec-20

Re-structuring
details
Dissolved
Dissolved56

29 Significant Events and Events after the Reporting Date
Crisis in Ukraine
In 2022, the Group’s operations have been impacted by the tragic events in Ukraine. Whilst the Group do not have operations in Ukraine, the Group
does have Game Development teams in Russia, and also works with a number of freelance suppliers in Ukraine. Our priority has been to support ourpeople and our freelance suppliers in the territory, whilst contributing to the wider humanitarian efforts in the region.
In the period, the Group produced €26.3m of Revenue in Russia, down from €29.4m in 2021, and represents approximately 3.8% of Group revenue,
down from 5.7% in 2021. During the period, a significant number of projects supported in Russia have been transferred to other parts of the Group,
as we ramp up production capacity in these locations with a combination of employees relocating from Russia and local hires. As a consequencerevenues produced in Russia were approximately 1.7% of Group revenue in December 2022.
We continue to work with our customers supporting their preferences for where their work should be performed. We also remain focused on
mitigating any potential business interruption or other risks associated with our activities in Russia. As a consequence, we expect the volume ofwork produced in Russia to continue to reduce over time.
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 net current assets or non-current assets located in Russia. Thus any exposure to
impairment of assets located in Russia is not considered material.
As a consequence of the crisis, an additional impairment assessment was performed in the Game Development CGU, 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 the contribution from all Russian located production capacity was excluded from projections, assuming no further work is able
to be transferred to other parts of the Group.

Acquisition of 47 Communications
On 1 February 2023, the Group announced the acquisition of 47 Communications LLC (“47”), a leading US-based PR and communications agency
with expertise in the video game, technology, entertainment and digital lifestyle sectors. For the twelve months to 30 September 2022, 47
generated revenues of approximately USD $11 million. The consideration payable for the Company is in line with Keywords' targeted valuation range.
The terms of the transaction include contingent consideration payable in a mix of cash and new ordinary shares depending on the future
performance of the Company over the three years from completion. The new ordinary shares to be issued will be subject to orderly market
provisions for a year.

57

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

•

•

•

•

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

Free cash flow measures – The Group aims to generate sustainable cash flow (free cash flow) in order to support its acquisition 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, otherincome and dividend payments. Adjusted free cash flow is a measure of cash flow adjusting for capital expenditure that is supporting growth infuture periods (represented by capital expenditure in excess of depreciation).
Net debt – The Group manages capital by monitoring debt to capital and net debt ratios. Net debt is calculated as loans and borrowings lesscash and cash equivalents, and excludes lease liabilities. The debt to capital ratio is calculated as net debt as a percentage of total equity.
The remainder of this section provides a reconciliation of the APMs with the relevant IFRS GAAP equivalent.

58Service line analysis*
The following table presents revenue growth by service line at both actual exchange rates (“AER”) and constant exchange rates (“CER”).
Constant exchange rates are calculated by retranslating current year reported numbers at the corresponding 2021 foreign exchange rates, inorder to give management and other users of the financial statements better visibility of underlying trading performance against the prior
year.

2022
Revenue
AER
€m
275.5
300.9
114.3
690.7

CreateGlobalize
Engage2022
Revenue
CER
€m
255.9
286.2
108.9
651.0

2021
Revenue
AER
€m
188.2
231.9
92.1
512.2

2022
Growth
AER
%
46.4%
29.8%
24.1%
34.8%

2022
Growth
CER
%
36.0%
23.4%
18.2%
27.1%

*The prior year comparatives have been re-classified to present information by service line in alignment with the new organisational and reporting structures (see note 3).

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.

2022

CreateGlobalize
EngageRevenue2022
Preacquisition
revenue

2022
Pro forma
revenue

AER

AER

AER

€m
275.5
300.9
114.3
690.7

€m
14.0
17.4
31.4

€m
289.5
300.9
131.7
722.1

Organic revenue at constant exchange rates*
Organic revenue at constant exchange rates is calculated by adjusting the prior year revenues, adding pre-acquisition revenues for thecorresponding period of ownership, and applying the 2021 foreign exchange rates to both years, when translating studio results into the euro
reporting currency.

2021

CreateGlobalize
EngageRevenue
AER
€m
188.2
231.9
92.1
512.2

2021
Preacquisition
revenue
AER
€m
15.0
7.2
22.2

2021
Like forlikerevenue
AER
€m
203.2
231.9
99.3
534.4

2022

2022

Revenue
growth
CER
€m
52.7
54.3
9.6
116.6

Revenue
CER
€m
255.9
286.2
108.9
651.0

2022
Organic
revenue
growth
CER
%
25.9%
23.4%
9.7%
21.8%

*The prior year comparatives have been re-classified to present information by service line in alignment with the new organisational and reporting structures (see note 3).

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

Calculation
Administrative expenses
Share-based payments expense
Costs of acquisition and integration
Amortisation of intangible assets
Depreciation - property, plant and equipment
Depreciation and impairment - right of use assets
Non-controlling interest
Bank charges
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

2022
€'000

2021
€'000

(196,554)(149,749)

18,67816,394

8,413

7,972

16,81018,365
14,585

13,688
11,661
10,473(662)(120,365)
17.4%

67
(520)
(90,014)
17.6%

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

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

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

2022
€'000

2021
€'000

71,81050,365

18,67816,394

8,413

7,972

16,81013,688(1,098)
114,613
16.6%

88,41917.3%

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

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

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

2022
€'000

2021
€'000

71,81050,365

16,81018,365
14,585(662)
120,908

13,688
11,661
10,473(520)
85,66760

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

Calculation
EBITDA
Share-based payments expense
Costs of acquisition and integration
Non-controlling interest
Other income
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
income2022€'000
120,908

2021€'000
85,667

18,67816,394

8,413

7,972

-

67

(1,098)146,901
21.3%

110,100
21.5%

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

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

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

2022
€'000

2021
€'000

67,982

47,983

18,67816,394

8,413

7,972

16,81013,688(1,677)67(1,983)

2,922

1,882

(1,098)112,030
16.2%

86,00316.8%

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

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

As above
Consolidated statement of comprehensive
incomeTaxation / Adjusted profit before tax

Adjusted taxation / Adjusted profit before tax

2022
€'000
112,030

2021€'000
86,003

20,612
18.4%

13,87516.1%

4,043
24,65522.0%

4,729
18,604
21.6%^Being mainly the tax impact of share-based payments expense €0.4m and amortisation of intangible assets €4m less foreign exchange €0.4m, with the prior period being mainly the tax
impact of share-based payments expense €2.8m, amortisation of intangible assets €2.1m, less foreign exchange €0.2m.

61Adjusted earnings per share
The Adjusted profit after tax comprises the Adjusted profit before tax, less the Taxation expense as reported in the Consolidated statement ofcomprehensive income, adjusted for the tax impact of the adjusting items in arriving at Adjusted profit before tax.
The Adjusted earnings per share comprises the Adjusted profit after tax divided by the non-diluted weighted average number of shares asreported in note 7.

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

2022
€'000
112,030

2021€'000
86,003(20,612)(13,875)(4,043)87,375(4,729)67,39976,979,596€c113.5027.2%

75,526,296
€c
89.24
46.5%

^Being mainly the tax impact of share-based payments expense €0.4m and amortisation of intangible assets €4m less foreign exchange €0.4m, with the prior period being mainly the tax
impact of share-based payments expense €2.8m, amortisation of intangible assets €2.1m, less foreign exchange €0.2m.

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

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

Return on capital employed

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

2021
€'000
86,003
(62)
520
1,040
985
2,573

116,21491,059Consolidated statement of financial position
Consolidated statement of financial position

557,091
2,861

472,120
3,088

Note 11
Note 17
Note 18
Consolidated statement of financial position

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

40,70854,142
129(105,710)
464,477

19.4%

19.6%

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

Adjusted profit before tax including preacquisition profit and excluding net interest
expense / capital employed62

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, non-cash movements in deferred and contingent consideration related
to continuous employment, net interest paid, payments of principal on lease liabilities and is presented both before and after taxation paid. Inorder to present the measure consistently year-on-year, the impact of other income is also excluded.
Calculation
Net cash generated by / (used in) operating activities
Acquisition and integration cash outlay:
Costs of acquisition and integration
Fair value adjustments to contingent consideration
Non-cash movements in deferred and contingent
consideration related to continuous employment
Acquisition of property, plant and equipment
Investment in intangible assets
Other income
Interest received
Interest paid
Payments of principal on lease liabilities
Free cash flow after tax
Taxation paid
Free cash flow before tax

Consolidated statement of cash flows

2022
€'000
124,286

2021€'000
90,545

Consolidated statement of comprehensive
incomeConsolidated statement of cash flows

8,413(2,282)

7,972(5,567)(3,000)(27,007)(501)(19,360)(315)(1,098)309(1,797)(11,361)
85,962
17,505
103,46762(2,738)(9,953)60,64623,94884,594

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
Consolidated statement of cash flows

Adjusted free cash flow
Adjusted free cash flow is a measure of cash flow adjusting for capital expenditure that is supporting growth in future periods (as measured bycapital expenditure in excess of maintenance capital expenditure).

Calculation
Free cash flow before tax
Capital expenditure in excess of depreciation:
Acquisition of property, plant and equipment
Depreciation - property, plant and equipment
Capital expenditure in excess of depreciation
Adjusted free cash flow

As above
Consolidated statement of cash flows
Consolidated statement of cash flows

2022
€'000
103,467

2021€'000
84,59427,007(18,365)
8,642
112,109

19,360(11,661)
7,699
92,293Adjusted 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

2022
€'000
112,109
112,030

2021€'000
92,29386,003100.1%

107.3%

63

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

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

Consolidated statement of financial position
Consolidated statement of financial position

2022
€'000
51
(81,886)(81,835)

2021
€'000
129
(105,710)(105,581)

64