THQ NORDIC Q4 EBIT INCREASED BY 102%

THQ NORDIC AB

JAN – DEC 2017

THQ NORDIC AB PUBL REG NO.: 5565826558 YEAREND REPORT  1 JANUARY  31 DECEMBER 2017

SEK million Oct-Dec 2017 Oct-Dec 2016 Full year 2017 Full year 2016

Net sales 255.4 128.2 507.5 301.9

EBITDA 156.4 60.8 272.6 132.4

EBIT 102.0 50.6 188.2 95.0

Profit after tax 73.4 38.0 139.2 71.9

Earnings per share, SEK 0.93 0.59 1.88 1.18

Cash flow from operating activities 98.6 51.3 179.1 99.2

Sales growth, % 99 30 68 42

EBITDA margin, % 61 47 54 44

EBIT margin, % 40 39 37 31

Net sales split:

– Owned titles, %

82 73 77

– Publishing titles, % 18 27 23 29

KEY PERFORMANCE INDICATORS, GROUP

FOURTH QUARTER 2017

> Net sales increased by 99% to SEK 255.4 m

(128.2).

> Owned titles represented SEK 208.2 m (94.0),

or 82% (73), of net sales.

> EBITDA was SEK 156.4 m (60.8), corresponding

to an EBITDA margin of 61% (47).

> EBIT was SEK 102.0 m (50.6), corresponding to

an EBIT margin of 40% (39).

> Cash flow from operating activities amounted to

SEK 98.6 m (51.3).

> Earnings per share (diluted) were SEK 0.93 (0.59).

> Nine owned titles and two publishing titles were

released in the period.

FULL YEAR, JANUARYDECEMBER 2017

> Net sales increased by 68% to SEK 507.5 m

(301.9).

> Owned titles represented SEK 391.2 m (213.1), or

77% (71), of net sales in the period.

> EBITDA was SEK 272.6 m (132.4), corresponding

to an EBITDA margin of 54% (44).

> EBIT was SEK 188.2 m (95.0), corresponding to

an EBIT margin of 37% (31).

> Cash flow from operating activities amounted to

SEK 179.1 m (99.2).

> Earnings per share (diluted) were SEK 1.88 (1.18).

> As of 31 December 2017, cash and cash equiva-

lents were SEK 626.5 m (167.4). The Company

also had unutilized credit facilities of SEK

140.2m (71.2).

> The Board proposes no dividend for the financial

year 2017.

In this Report, all figures in brackets are for the corresponding period of the previous year, unless otherwise stated.

Fade to Silence

THQ NORDIC Q4 EBIT INCREASED BY 102%

I’m proud of the whole THQ Nordic organisation, including our contracting developers and business partners,

which has performed its most active quarter ever. We had a significant release activity in the quarter with

eleven releases of which nine on own IPs. 74% of net sales came from new releases in the quarter and 26%

from our back catalogue. I’m happy to note that 82% of net sales in the fourth quarter came from owned

titles and 18% from publishing titles.

During the quarter, we also delivered our first in-house developed sequels to the market. Their overall perfor-

mance has matched management expectations. Our new IP ELEX was well received by the fans but received

mixed reviews from various media outlets due to its unique character and harsh style.

Our business grew rapidly; net sales increased by 99% to SEK 255 million in the quarter, EBITDA was up 157%

to SEK 156 million and EBIT increased by 102% to SEK 102 million compared to the same period last year.

In November we acquired and welcomed the Stockholm based development studio Experiment 101 to the

THQ Nordic family. They are developing one of our upcoming key titles: Biomutant. THQ Nordic has a solid

growth strategy and a great position in the market which we will leverage over the coming years. I’m really

looking forward to 2018, we will keep the excitement going.

 LARS WINGEFORS, FOUNDER & CEO

THQ NORDIC AB

JAN – DEC 2017

FINANCIAL PERFORMANCE, FOURTH QUARTER 2017

CONSOLIDATED NET SALES

Consolidated net sales for the fourth quarter were up by 99% to SEK 255.4 m (128.2). The growth is

primarily sourced from new releases launched in the period.

Combined net sales of new releases during the fourth quarter amounted to SEK 190.2 m (46.2) or 74%

(36) of revenues.

CONSOLIDATED EXPENSES

Expenses were SEK 189.0 m (92.7) in the fourth quarter. Cost of goods sold was SEK 69.2 m (50.7).

Personnel expenses were SEK 33.5 m (17.2). The increase is mainly relating to increased headcount and

three development studios acquired that were not part of the group in the previous year. Depreciation

and amortization was SEK 54.4 m (10.2). The increase is mainly due to depreciation of games launched in

the period.

CONSOLIDATED EARNINGS

The group’s EBITDA for the fourth quarter 2017 increased by 157% to SEK 156.4 m (60.8). EBIT in the

quarter was SEK 102.0 m (50.6). Profit after tax was SEK 73.4 m (38.0).

DIVIDEND FOR 2017

The Board proposes no dividend for the financial year 2017.

CASH FLOW AND FINANCIAL POSITION

Cash flow from operating activities for the quarter was SEK 98.6 m (51.3). The difference is due to

improved operating profit, but negative progress of working capital in year-on-year terms. Cash flow from

investing activities was SEK –154.5 m (–67.6), mostly relating to investments in game projects and the

acquisition of the development studio Experiment 101. Cash flow from financing activities amounted to

SEK 14.7 m (171.5).

Cash and cash equivalents at the end of the period were SEK 626.5 m (167.4). The Company also had

unutilized credit facilities of SEK 140.2 m (71.2), the group’s total available cash and unutilized credit

facilities were SEK 766.8 m (238.6) as of 31 December 2017.

CAPITAL EXPENDITURE, DEPRECIATION AND AMORTIZATION

In the fourth quarter, the group’s investments in intangible assets amounted to SEK 103.8 m (67.0).

Investments relate mainly to capitalized expenditure for ongoing game development. Following the

acquisition of Experiment 101 the surplus value has been distributed as IP: SEK 15.0 m, development

studio: SEK 61.9 m and goodwill: SEK 13.4 m. These amounts are not included in the intangible asset

amount above. Amortization of intangible assets was SEK 52.7 m (9.9). Goodwill –1.0 (-). Depreciation of

property, plant and equipment amounted to SEK 0.8 m (0.3).

Darksiders III

THQ NORDIC AB

JAN – DEC 2017

FINANCIAL PERFORMANCE, FULL YEAR 2017

Net sales increased by 68% to SEK 507.5 m (301.9) for the period January-December 2017.

Combined net sales of new releases during 2017 amounted to SEK 306.9 m (124.2) or 61% (41) of net

sales.

EBITDA was SEK 272.6 m (132.4), a 106.0% increase. EBIT was SEK 188.2 m (95.0). Profit after financial

items was SEK 182.0 m (92.9) and profit after tax was SEK 139.2 m (71.9) for the full year.

Cash flow from operating activities was SEK 179.1 m (99.2). Cash flow before changes in working capital

was SEK 249.5 m and the working capital has had a negative impact on cash flow of SEK 70.4 m.

The group’s investments in intangible assets amounted to SEK 311.6 m (157.2). Investments in property,

plant and equipment were SEK 4.9 m (2.6). Amortization of capitalized expenditure for development work

in the period was SEK 61.9 m (36.4).

Cash flow from investing activities was SEK –375.4 m (–159.7), the majority relating to investments in

ongoing game projects. Cash flow from financing activities amounted to SEK 654.7 m (202.0), a rights

issue represented SEK 580.4 m, new borrowings were SEK 79.8 m, repayment of debt to credit institu-

tions was SEK –5.5 m.

Total investment for acquisitions of IPs during 2017 was SEK 3.8 m (22.6).

OPERATIONS

THQ Nordic acquires, develops and publishes PC and console games. The company has

a wide catalogue of 299 games, including 91 owned franchises, such as Darksiders,

Titan Quest, MX vs ATV, Red Faction, Destroy All Humans, Aquanox, ELEX, Biomutant,

Jagged Alliance, SpellForce and The Guild. THQ Nordic has a global publishing reach

within marketing, sales and distribution, both online and offline. The group’s head office

is based in Karlstad, Sweden and its publishing office in Vienna, Austria. THQ Nordic

employs and contractually collaborates with 462 people, including external developers,

and has seven internal development studios based in Germany, USA and Sweden.

NEW RELEASES IN THE FOURTH QUARTER

In the fourth quarter of 2017 the company released the following new products:

• The publishing title Battle Chasers: Nightwar for Sony’s PlayStation 4, Microsoft’s Xbox One and PC/

MAC. The title has been developed by the external studio Airship Syndicate in Austin, Texas.

• Our new IP ELEX for Sony’s PlayStation 4, Microsoft’s Xbox One and PC. The game was developed by

the external developer Piranha Bytes.

• The Asset Care title We Sing Pop for Sony’s PlayStation 4 and Microsoft’s Xbox One.

• The Asset Care title This is the Police for Nintendo Switch.

• The Asset Care title Sphinx and the Cursed Mummy for PC/MAC/Linux in digital channels only.

• The Asset Care title de Blob for Sony’s PlayStation 4 and Microsoft’s Xbox One.

• The Asset Care title Titan Quest – Ragnarök for PC. The game is an expansion pack for the owned IP

title Titan Quest and was developed by the newly acquired development studio Pieces Interactive AB.

• The owned IP sequel Black Mirror for Sony’s PlayStation 4, Microsoft’s Xbox One and PC/MAC/LINUX.

The game was the fourth iteration in the Black Mirror universe.

• The owned IP sequel SpellForce 3 for PC, which was developed by the company’s internal development

studio, Grimlore Games.

• The owned IP Fade to Silence for PC. It is currently available as an Early Access game on Steam. The

game is developed by the company’s internal development studio Black Forest Games.

• The mobile game The Muscle Hustle was released for both IOS and Android platforms. Early monetization

data shows positive signs but the number of daily installs is much lower than the company’s other mobile

title, Sniper vs Thieves. The title is published by the internal development studio Foxglove. The company

has not yet currently commenced paid marketing on large scale.

All new games released during the fourth quarter, except Battle Chasers: Nightwar and The Muscle

Hustle are based on owned IPs.

De Blob 2

THQ NORDIC AB

JAN – DEC 2017

TitanQuest

OTHER EVENTS DURING THE FOURTH QUARTER

In November THQ Nordic AB acquired the shares of Experiment 101 AB, a Swedish independent game

developer, currently developing Biomutant. The acquisition includes the development studio and the

intellectual property rights to Biomutant. The game is an open world, post-apocalyptic kung-fu fable

action role-playing game. Biomutant was first announced at Gamescom in August 2017, receiving

strong reception with fans and the gaming media. The initial consideration paid for all shares were

SEK 75.3 million of which SEK 10.0 million will be paid by issuance of new THQ Nordic B-shares, with a

3-year lock-up, to the co-founder Stefan Ljungqvist. An additional consideration may be paid depend-

ing on the financial performance.

THQ Nordic participated, among others, in the following events:

• Paris Gamesweek, Paris, France

• Poznan Games Arena, Poznan, Poland

• The Game Awards Show, Los Angeles, USA

EVENTS AFTER THE PERIOD

No significant events have occurred after the end of the period up until the announcement of this report.

ONGOING DEVELOPMENT

At the end of the fourth quarter, the company had 36 projects in development of which 12 had been

announced by the end of the quarter.

During the quarter, 9 new game developing projects were started. The projects are both Asset Care/

porting, remakes, new expansion packs as well as sequel development across both internal and external

development studios.

ANNOUNCED UPCOMING RELEASES AS OF FEBRUARY 14, 2018

Title IP Owner Platforms Channels

Aquanox Deep Descent THQ Nordic PC, Mac, PS4, XboxOne On- and Offline

Battle Chasers: Nightwar Airship Syndicate Nintendo Switch On- and Offline

Biomutant THQ Nordic PC, PS4, XboxOne On- and Offline

Darksiders 3 THQ Nordic PC, PS4, XboxOne On- and Offline

de Blob THQ Nordic Nintendo Switch On- and Offline

de Blob 2 THQ Nordic PS4, XboxOne On- and Offline

Fade to Silence THQ Nordic PC, PS4, XboxOne On- and Offline

Legend of Kay THQ Nordic Nintendo Switch On- and Offline

MX vs ATV - All Out THQ Nordic PC, PS4, XboxOne On- and Offline

Pillars of Eternity II - Deadfire Obsidian PC, Mac, LINUX, PS4, Xbox One,

Nintendo Switch

Offline

Rad Rodgers THQ Nordic PC, PS4, XboxOne On- and Offline

The Guild 3 THQ Nordic PC On- and Offline

The Raven HD THQ Nordic PC, Mac, PS4, XboxOne On- and Offline

This is the Police 2 THQ Nordic PC, Mac, PS4, XboxOne, Nintendo Switch On- and Offline

Titan Quest THQ Nordic PS4, XboxOne, Nintendo Switch On- and Offline

Wreckfest Bugbear PC, PS4, XboxOne On- and Offline

Latest release dates for the products can be found on www.thqnordic.com.

THQ NORDIC AB

JAN – DEC 2017

HUMAN RESOURCES

As of 31 December 2017, the Company had 193 employees (85). The average number of full-time employees

for the quarter was 180 (83). The increase in employee headcount relates mainly to acquired companies.

PARENT COMPANY

The Parent Company’s net sales for the fourth quarter were SEK 135,9 m (48.1) and profit before tax

was SEK 45.8 m (21.1). Profit after tax was SEK 35.4 m (16.2).

Cash and cash equivalents as of 31 December 2017 were SEK 571.8 m (148.0).

Investments in intangible assets in the period were SEK 142.6 m (29.1). The Parent Company’s equity

at the end of the quarter was SEK 971.3 m (286.2).

RELATED PARTY TRANSACTIONS

THQ Nordic GmbH has sold games to Game Outlet Europe AB during 2017 for a SEK 11.4 m. THQ Nordic

GmbH has bought services from Quantic Lab for a SEK 3.5 m. THQ Nordic has paid SEK 0.2 m in rent to

companies in the Lars Wingefors AB group. Nordic Games Group, Quantic Lab and Lars Wingefors AB are

companies owned by management and co-founders.

OWNERSHIP BY 31 DECEMBER 2017

Name

Class A

Class B

Share of

capital, %

Share of

votes, %

Lars Wingefors through company

6,501,467 29,523,732 45.5 59.0

Erik Stenberg through company

1,407,724 6,392,600 9.8 12.8

Swedbank Robur Funds

6,826,979 8.6 4.3

Handelsbanken Funds

4,899,700 6.2 3.2

Mikael Brodén through company

483,378 2,195,063 3.4 4.4

Didner & Gerge Funds 1,857,673 2.3 1.2

Pelle Lundborg with family through company

289,966 1,105,121 1.8 2.5

Familjen Olsson, trust 1,290,000 1.6 0.8

RAM One Funds 1,275,396 1.6 0.8

Chalex/Martin Larsson 1,270,944 1.6 0.8

Lundström Family 1,265,000 1.6 0.8

Avanza Pension 1,157,130 1.5 0.7

Klemens Kreuzer through company

201,784 916,321 1.4 1.8

Life Insurance Skandia 854,312 1.1 0.5

Reinhard Pollice through company

115,681 655,524 1.0 1.1

Fondita Funds 692,000 0.9 0.4

Michael Knutsson 600,000 0.8 0.4

Skandia Funds 435,509 0.5 0.3

Nordnet Pension Insurance 216,244 0.3 0.1

CM-CIC Asset Management 161,175 0.2 0.1

TOTAL TOP 20 9,000,000 63,590,423 91.6 96.0

OTHER 6,645,327 8.4 4.0

TOTAL 9,000,000 70,235,750 100.0 100.0

1) Lars Wingefors AB, controlled to 100% by CEO Lars Wingefors

2) Xagonus AB, controlled to 100% by CFO Erik Stenberg

3) Swedbank Robur consists of three funds; Småbolagsfond Sverige, Småbolagsfond Norden and Ny Teknik

4) Handelsbanken Funds consists of five funds; Sverige, Svenska Småbolag, Bosparfond Bostadsrätterna, Nordiska Småbolag and

MicroCap

5) CMB Holding AB, controlled to 100% by Mikael Brodén, co-founder of THQ Nordic

6) Lumarisimo AB, controlled by Pelle Lundborg with family, co-founder of THQ Nordic

7) Gerado AB, controlled to 100% by Klemens Kreuzer, MD THQ Nordic GmbH

8) Gigalomaniac Holding AB, controlled to 100% by Reinhard Pollice, Director of business and production development

The Hunter - Call of the Wild

THQ NORDIC AB

JAN – DEC 2017

INFORMATION ABOUT FIRST NORTH

Nasdaq First North (”First North”) is an alternative marketplace operated by the constituent exchanges

of Nasdaq Stockholm. It does not have the same legal status as a regulated marketplace. Companies

quoted on First North are subject to First North’s rules, rather than the legal requirements set for trading

on a regulated marketplace. An investment in a company trading on First North implies higher risk than

one in a listed company. Companies must apply to the exchange and gain approval before trading on

First North can commence. A Certified Adviser guides the company through the listing process and also

ensures that the company continuously satisfies First North’s standards.

FNCA Sweden AB is THQ Nordic’s certified adviser.

RISKS AND UNCERTAINTY FACTORS

The risks related to THQ Nordic’s operations are reviewed below.

DEVELOPING GAME PROJECTS

THQ Nordic develops games in-house via its own development studios and in collaboration with external

game developers. Delays to planned and ongoing game projects can have a negative impact on cash

flows, revenues and operating margins. Delays can occur to in-house and external development projects.

The completion of a game project may also consume more resources than originally estimated, and then

usually, and especially for in-house projects, the expense must be met by THQ Nordic.

LAUNCHES OF NEW GAME TITLES CAN GENERATE LOWERTHANEXPECTED REVENUES

When new game titles are launched, there is a risk that they are not well received by the market. This

can lead to revenue losses, lower margins and reduced cash flows. This applies to both self-financed

projects and games where the Company is the publisher and bears a significant share of finance. Capi-

talized development expenses are also subject to the risk of impairment.

THQ NORDIC IS DEPENDENT ON A SMALL NUMBER OF SIGNIFICANT DISTRIBUTORS OF ITS GAME TITLES

The Company’s sales of digital and physical game titles are largely through a small number of major

distributors. Distributors continuing to provide digital and physical distribution channels is a precondition

for THQ Nordic being able to keep generating revenue from them.

THQ NORDIC MAY BE UNSUCCESSFUL IN DEVELOPING AND ADAPTING TO NEW TECHNOLOGY AND CON

SUMER PREFERENCES AND STANDARDS, AS WELL AS ALTERED REGULATION

The evolution of the gaming industry is largely driven by the wants and needs of gamers, game compa-

nies and publishers, which means that operators must continuously offer new products and services

with the aim of attracting and retaining a broad spectrum of gamers. In a sector featuring the rapid

creation and development of new products, technologies and gamer behavior, it is important for the

Company to continuously update and develop new and existing products and technologies.

INTELLECTUAL PROPERTY

Like other operators active in the same sector as the Company, THQ Nordic is dependent on intellectual

property and its satisfactory protection. Disputes, mainly relating to intellectual property rights, do occur

in the game sector from time to time. Accordingly, there is a risk that THQ Nordic may become involved in

legal or administrative procedures in the future, which may relate to extensive damages claims or other

claims for payment including damages claims from customers or competitors.

THQ NORDIC IS DEPENDENT ON RETAINING AND BEING ABLE TO HIRE KEY INDIVIDUALS

THQ Nordic is dependent on specific key individuals and employees. The loss of these individuals or diffi-

culties in attracting new staff, may negatively impact on the Company’s operating activities and ability to

execute current and future strategies.

ACQUISITIONS

THQ NORDIC has executed, and may execute, acquisitions that may prove unsuccessful and/or put the

group’s resources under strain.

More detail on the risks related to THQ Nordic’s operations are stated in the most recent Annual Report

2016.

Biomutant

THQ NORDIC AB

JAN – DEC 2017

ACCOUNTING AND VALUATION POLICIES

This Year-End Report has been prepared in accordance with the Swedish Annual Accounts Act. The ac-

counting and valuation policies applied are consistent with the Swedish Accounting Standards Board’s

Category 3 (BFN K3) regulation and are unchanged since the latest published Annual Accounts.

The Company’s accounting policies are stated in its most recent Annual Accounts 2016.

Amounts are reported in Swedish kronor, rounded to the nearest thousand unless otherwise stated.

Rounding to the nearest thousand may mean that amounts are not consistent when added. Amounts

and figures stated in brackets are comparatives for the corresponding period of the previous year.

AUDITOR’S REVIEW

This Report has not been subject to summary review by the Company’s auditor.

ANNUAL GENERAL MEETING 2018

The Annual General Meeting will be held on 16 May 2018.

ANNUAL REPORT

The Annual Report will be published in week 16 (week ending 22 April) and will be available at

THQ Nordic’s investor relations web: www.thqnordic-investors.com.

FORTHCOMING REPORTS

THQ Nordic intends to publish financial reports on the following dates:

Annual General Meeting 16 May 2018

Interim Report, January-March 2018 16 May 2018

Interim Report, January-June 2018 and the Second Quarter 15 August 2018

Interim Report, January-September 2018 and the Third Quarter 14 November 2018

Year-end Report 2018 13 February 2019

FOR MORE INFORMATION

There is more information about the Company at its website:

www.thqnordic.com and www.thqnordic-investors.com.

If you have any questions on this report, please contact:

Lars Wingefors, Founder & CEO, [email protected].

Lars Wingefors

Chief Executive Officer

Karlstad, Sweden, 14 February 2018

This year-end report is information that is mandatory for THQ Nordic to make public pursuant to the

EU Market Abuse Regulation. The information was submitted for publication, through the agency of the

contact person set out above, at 06:30 CET on February 14, 2018.

MVA All Out

THQ NORDIC AB

JAN – DEC 2017

SEK 000’s

Oct-Dec

2017

Oct-Dec

2016

Full year

2017

Full year

2016

Net sales 255,399 128,162 507,526 301,878

Work performed by the Company for its own use and capitalized 32,927 12,431 79,556 36,199

Other operating income 2,697 2,699 2,697 8,747

Total operating income 291,023 143,292 589,779 346,824

Operating expenses

Goods for resale –69,156 –50,710 –147,678 –118,828

Other external expenses –33,069 –15,326 –75,159 –42,825

Personnel expenses –33,462 –17,196 –94,101 –52,315

Depreciation, amortization and impairment of property, plant and equipment

and intangible assets –54,436 –10,156 –84,416 –37,354

Other operating expenses 1,087 709 –224 –487

Total operating expenses –189,036 –92,679 –401,578 –251,809

Operating profit 101,987 50,613 188,201 95,015

Profit from financial items

Other interest income, etc 8 –5 11 1

Other interest expenses, etc –4,886 –1,049 –6,200 –2,120

Total financial items –4,878 –1,054 –6,189 –2,119

Profit after financial items 97,109 49,559 182,012 92,896

Profit before tax 97,109 49,559 182,012 92,896

Tax –23,708 –11,572 –42,843 –20,939

Net profit for the period 73,401 37,987 139,169 71,957

Attributable to:

Equity holders of the parent 73,401 37,987 139,169 71,957

Non-controlling interests – – – –

Earnings per share, SEK 0.93 0.59 1.88 1.18

Average number of outstanding shares 79,236 64,447 73,927 61,121

CONSOLIDATED INCOME STATEMENT

THQ NORDIC AB

JAN – DEC 2017

SEK 000’s

31 Dec

2017

31 Dec

2016

Intangible assets 571,064 228,699

Property, plant and equipment 8,102 3,592

Financial assets 2,781 194

Inventories 30,103 18,430

Current receivables 90,206 46,576

Cash and bank balance 626,523 167,445

Total assets 1,328,779 464,936

Share capital 660 600

Other capital reserves 811,120 226,945

Recognized profit including profit for the period 261,452 117,543

Provisions 40,737 11,460

Current liabilities 214,810 108,388

Total liabilities and equity 1,328,779 464,936

Interest-bearing assets amount to 626,523 167,445

Interest-bearing liabilities amount to 109,762 28,752

CONDENSED CONSOLIDATED BALANCE SHEET

TSEK SEK 000’s Share capital

Other paid-up

capital

Other equity

including net profit

Consolidated

equity

Amount as of 1 January 2017 600 226,945 117,543 345,088

Translation difference 4,740 4,740

Rights issue

60 584,175 584,235

Net profit 139,169 139,169

Amount as of 31 December 2017 660 811,120 261,452 1,073,232

1) Rights issue consist of rights issue SEK 597.810 m, cost for raising new equity SEK –17.480 m and tax effect of the cost SEK 3.846 m.

CONSOLIDATED STATEMENT OF EQUITY

SEK 000’s

Oct-Dec

2017

Oct-Dec

2016

Full year

2017

Full year

2016

Cash flow from operating activities before changes

in working capital 145,586 55,951 249,494 107,896

Change in working capital –46,993 –4,611 –70,395 –8,660

Cash flow from operating activities 98,593 51,340 179,099 99,236

Cash flow from investing activities –154,463 –67,560 –375,401 –159,732

Cash flow from financing activities 14,745 171,513 654,743 201,960

Cash flow for the period –41,125 155,293 458,441 141,464

Cash and cash equivalents at beginning of period 666,877 12,174 167,445 25,606

Translation difference in cash and cash equivalents 771 –22 637 375

Cash and cash equivalents at end of period 626,523 167,445 626,523 167,445

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

THQ NORDIC AB

JAN – DEC 2017

SEK 000’s

Oct-Dec

2017

Oct-Dec

2016

Full year

2017

Full year

2016

Net sales 135,854 48,128 244,915 121,036

Other operating income 3,332 3,246 3,332 8,031

Total operating income 139,186 51,374 248,247 129,067

Operating expenses

Goods for resale - –191 - –523

Other external expenses –3,516 –1,236 –8,280 –3,792

Personnel expenses –936 –1,109 –4,165 –1,348

Depreciation, amortization and impairment of property, plant

and equipment and intangible assets –45,714 –7,317 –69,074 –33,812

Other operating expenses 96 –2 - –45

Total operating expenses –50,070 –9,855 –81,519 –39,520

Operating profit 89,116 41,519 166,728 89,547

Result from participations in Group companies –1,400 –905 –1,400 –905

Interest income, etc. 8,046 337 15,643 413

Interest expenses, etc. –4,799 –1,091 –6,073 –2,092

Total financial income/expenses 1,847 –1,659 8,170 –2,584

Profit after financial items 90,963 39,860 174,898 86,963

Appropriations –45,127 –18,792 –45,127 –18,792

Profit before tax 45,836 21,068 129,771 68,171

Tax –10,452 –4,870 –28,930 –15,272

Net profit for the period 35,384 16,198 100,841 52,899

PARENT COMPANY INCOME STATEMENT

SEK 000’s

31 Dec

2017

31 Dec

2016

Intangible assets 171,336 51,447

Property, plant and equipment 18 71

Financial assets 240,104 712

Current receivables 225,898 177,734

Cash and bank balance 571,850 147,984

Total assets 1,209,206 377,948

Equity 971,314 286,238

Untaxed reserves 91,748 51,960

Provisions

3,600 -

Current liabilities 142,544 39,750

Total liabilities and equity 1,209,206 377,948

CONDENSED PARENT COMPANY BALANCE SHEET

THQ NORDIC AB

JAN – DEC 2017

Financial metrics defined or specified pursuant to

Swedish Accounting Standards Board standards (BFNAR)

Oct-Dec

2017

Oct-Dec

2016

Full year

2017

Full year

2016

Net sales, SEK 000’s 255,399 128,162 507,526 301,878

Operating profit, SEK 000’s 101,987 50,613 188,201 95,015

Profit before tax, SEK 000’s 97,109 49,559 182,012 92,896

Profit after tax, SEK 000’s 73,401 37,987 139,169 71,957

Number of shares at end of period, thousands 79,236 72,032 79,236 72,032

Average number of outstanding shares, thousands 79,236 64,447 73,927 61,121

Average number of full-time employees in the period 180 83 143 68

Number of employees at the end of the period 193 85 193 85

Alternative key performance indicators not

defined or specified pursuant to BFNAR

Oct-Dec

2017

Oct-Dec

2016

Full year

2017

Full year

2016

Net sales growth, % 99 30 68 42

EBITDA, SEK 000’s 156,423 60,769 272,617 132,369

EBITDA margin, % 61 47 54 44

EBIT, SEK 000’s 101,987 50,613 188,201 95,015

EBIT margin, % 40 39 37 31

Amortization of IP rights, SEK 000’s –3,773 –3,008 –14,114 –13,039

Equity/assets ratio, % 81 74 81 74

Earnings per share, SEK 0.93 0.59 1.88 1.18

Dividend per share, SEK - - - -

Derivation of the alternative KPIs and EBITDA

EBIT, SEK 000’s 101,987 50,613 188,201 95,015

Depreciation and amortization, SEK 000’s 54,436 10,156 84,416 37,354

EBITDA, SEK 000’s 156,423 60,769 272,617 132,369

SELECTED KEY PERFORMANCE INDICATORS, GROUP

DEFINITIONS OF ALTERNATIVE KPIs

DEFINITIONS OF KPIs, GROUP

Earnings per share Profit after tax divided by the average number of shares in the period

EBIT margin EBIT as a percentage of net sales

EBITDA Earnings before interest taxes, depreciation and amortization

EBITDA margin EBITDA as a percentage of net sales

Equity/assets ratio Equity as a percentage of total assets

Net sales growth Net sales for the current period divided by net sales for the corresponding period of the previous year

THQ Nordic’s definitions of a number of alternative KPIs used in this Year-End Report are stated below. Net sales

growth is reported by the Company because it regards this KPI as contributing to investor understanding of the

Company’s historical progress. EBITDA and EBITDA margin are reported because these are metrics commonly used by

certain investors, financial analysts and other stakeholders to measure the Company’s financial results. The equity/

assets ratio is stated because the Company regards this as a metric commonly used by certain investors, financial

analysts and other stakeholders to measure the Company’s financial position. Dividend per share is stated in the Year-

End Report to illustrate the dividend yield the Company’s shareholders receive.

THQ NORDIC AB

JAN – DEC 2017

QUARTERLY INFORMATION

2015 2016 2017

Q1 Q2 Q3 Q4

Full

year Q1 Q2 Q3 Q4

Full

year Q1 Q2 Q3 Q4

Full

year

Net sales 37.6 36.9 40.0 98.4 212.9 43.1 52.7 77.9 128.2 301.9 81.9 85.6 84.7 255.4 507.5

EBITDA 17.4 19.2 16.1 52.3 105.0 23.1 23.2 25.4 60.8 132.5 41.9 39.7 34.6 156.4 272.6

EBIT 9.3 12.5 9.6 35.2 66.6 14.2 14.2 16.0 50.6 95.0 31.9 30.3 24.0 102.0 188.2

Profit after tax 7.0 9.5 7.2 27.6 51.3 10.7 10.6 12.7 38.0 72.0 23.5 23.2 19.0 73.4 139.2

Earnings per share, SEK 0.12 0.16 0.12 0.46 0.86 0.18 0.18 0.21 0.59 1.16 0.33 0.32 0.26 0.93 1.88

Cash flow from operating activities N/A N/A 8.4 63.3 109.9 25.3 2.1 20.5 51.3 99.2 29.7 21.6 29.2 98.6 179.1

Number of shares (A&B), adjusted 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 64.4 61.1 72.0 72.0 72.3 79.2 73.9

Sales growth, % 9% 0% 12% 39% 20% 15% 42% 95% 30% 42% 90% 62% 9% 99% 68%

EBITDA, margin, % 46% 52% 40% 53% 49% 54% 44% 33% 47% 44% 51% 46% 41% 61% 54%

EBIT, margin, % 25% 34% 24% 36% 31% 33% 27% 21% 39% 31% 39% 35% 28% 40% 37%

Gross Margin (Net sales-COGS) 24.5 27.1 25.3 65.9 142.8 29.8 34.6 41.2 77.5 183.1 57.4 61.3 54.9 186.2 359.8

Gross Margin, % 65% 74% 63% 67% 67% 69% 66% 53% 60% 61% 70% 72% 65% 73% 71%

Net sales split

Owned titles, % 72% 77% 64% 85% 77% 86% 73% 56% 73% 71% 67% 76% 74% 82% 77%

Publishing titles, % 28% 23% 36% 15% 23% 14% 27% 44% 27% 29% 33% 24% 26% 18% 23%

Owned titles, SEK m 27.1 28.4 25.6 83.6 164.7 37.1 38.5 43.6 94.0 213.1 54.9 65.5 62.6 208.2 391.2

Publishing titles, SEK m 10.5 8.5 14.4 14.8 48.2 6.0 14.2 34.3 34.2 88.8 27.0 20.1 22.1 47.2 116.3

New releases current FY, % 7% 20% 44% 61% 41% 0% 24% 51% 56% 41% 36% 20% 48% 86% 61%

Backcatalogue, % 93% 80% 56% 39% 59% 100% 76% 49% 44% 59% 64% 80% 52% 14% 39%

New releases current FY, SEK m 2.6 7.4 17.6 60.0 87.6 0.0 12.6 39.7 71.8 124.2 29.5 17.1 41.5 218.8 306.9

Backcatalogue, SEK m 35.0 29.5 22.4 38.4 125.3 43.1 40.1 38.2 56.4 177.7 52.4 68.4 43.2 36.6 200.6

New releases sales by each quarter, % 7% 16% 37% 52% - 0% 24% 37% 36% - 36% 16% 39% 74% -

Backcatalogue, % 93% 84% 63% 48% - 100% 76% 63% 64% - 64% 84% 61% 26% -

New releases sales by each quarter, SEK m 2.6 5.9 14.8 51.2 - 0.0 12.6 28.8 46.2 - 29.5 13.7 33.7 190.2 -

Backcatalogue, SEK m 35.0 31.0 25.2 47.2 - 43.1 40.1 49.1 82.0

- 52.4 71.9 51.0 65.1 -

Physical sales, % 42% 33% 52% 57% 49% 48% 39% 49% 58% 51% 49% 31% 44% 60% 50%

Digital sales, % 58% 67% 48% 43% 51% 52% 61% 51% 42% 49% 51% 69% 56% 40% 50%

Physical sales, SEK m 15.8 12.2 20.8 56.1 104.9 20.7 20.6 38.2 74.4 153.8 40.1 26.6 36.1 149.9 253.2

Digital sales, SEK m 21.8 24.7 19.2 42.3 108.0 22.4 32.1 39.7 53.8 148.1 41.8 59.0 48.6 101.6 249.4

Depreciation

IP Acquisitions –3.0 –2.9 –3.2 –3.2 –12.3 –3.3 –3.3 –3.3 –3.0 –13.0 –3.4 –3.4 –3.5 –3.8 –14.1

Game development –5.2 –3.8 –3.3 –13.9 –26.2 –5.5 –5.6 –6.0 –7.1 –24.3 –6.3 –5.6 –6.5 –43.4 –61.8

Investments

IP Acquisitions - 0.3 4.4 –0.1 4.6 2.8 - - 19.8 22.6 - - 3.8 - 3.8

Game development & royalty advances 16.5 15.0 15.4 17.6 64.5 22.0 28.8 35.1 34.7 120.6 67.2 58.6 78.1 93.2 297.1

Capitalized internal development 1.7 1.7 1.7 3.3 8.4 5.7 7.9 10.2 12.4 36.2 13.0 14.4 19.2 33.0 79.6

Completed development - 1.1 - 31.3 32.4 - 1.4 - 12.6 14.0 0.8 1.9 39.8 133.9 176.4

Other KPIs

Total Game Dev projects N/A N/A N/A N/A N/A N/A 29 27 32 30 29 36

Announced Game Dev projects N/A N/A N/A N/A N/A N/A 8 7 14 13 13 12

Unannounced Game Dev projects N/A N/A N/A N/A N/A N/A 21 20 18 17 16 24

Total internal game developers N/A N/A N/A N/A N/A N/A 69 68 78 82 163 178

Total external game developers N/A N/A N/A N/A N/A N/A 270 264 282 306 261 229

Total internal overhead/publishing N/A N/A N/A N/A N/A N/A 38 40 44 44 45 55

Total number headcounts N/A N/A N/A N/A N/A N/A 377 372 404 432 469 462

THQ NORDIC AB PUBL

ÄLVGATAN 1

652 25 KARLSTAD

SWEDEN