Embracer Group Ab Class B · OMXSTO:EMBRAC_B
Embracer Group Ab Class B — Q3 FY21/22 Earnings Presentation
41 slides from Embracer Group Ab Class B's earnings presentation, Feb 17, 2022
Slide 1: Q3 FY21/22 Interim Report
Q3 FY21/22 Interim Report February 17, 2022
Slide 2: Financial and operational highlights Q3 (Oct-Dec)
Financial and operational highlights Q3 (Oct-Dec) FINANCIAL & OPERATIONAL KEY METRICS GAMES CONTINUED GROWTH Net sales – Group AAA projects Pipeline projects People 9500+ YoY growth SEK 5,085m +135% 25+ 216 planned for release until Organic growth 16% March 2026 Net sales – Games YoY growth Internal
Slide 3: Embracing and empowering great entrepreneurs
Embracing and empowering great entrepreneurs The Embracer model works, here is a few key learnings and a recap of the last years: Long-term mindset matters. We are on a long journey to build something substantial and sustainable. 106 out of 108 entrepreneurs that joined since 2016 are still part of
Slide 4: 1. Business areas
1. Business areas
Slide 5: THQ Nordic net sales
Net sales (SEK million) Games Released after the quarter Selected pipeline Quarterly New releases 669 380 355 374 352 Q3 Q4 Q1 Q2 Q3 FY20/21 FY21/22 Metascore Generally favorable reviews Main back Main backcatalog catalogue drivers drivers Steam Positive Reviews Trailing twelve months 1 971 1 742 1
Slide 6: Koch Media Publishing net sales
KOCH MEDIA PUBLISHING Net sales (SEK million) Games Selected pipeline Quarterly New releases 728 638 585 497 465 Q3 Q4 Q1 Q2 Q3 FY20/21 FY21/22 Trailing twelve months Main back catalog drivers 2 415 2 132 2 082 2 107 2 185 Q3 Q4 Q1 Q2 Q3 FY20/21 FY21/22 6
Slide 7: Coffee Stain net sales
Net sales (SEK million) Games Other Selected pipeline Internal studios Quarterly New releases 781 191 175 99 120 Q3 Q4 Q1 Q2 Q3 FY20/21 FY21/22 • Coffee Stain announced the launch of its new mobile-first game studio, Coffee Stain Main Malmö, Sweden. The new division will focus Main back catalogue ba
Slide 8: New studio: Building for long term growth
New studio Other Building for long term growth Green Tile Digital joined the Amplifier STUDIOS family, a development studio based in Skövde, Sweden. During the quarter, Amplifier Madrid Karlstad Vienna Newcastle Ravenna opened its new Spain Sweden Austria UK Italy headquarters and larger office in M
Slide 9: Net sales (SEK million) Games
Net sales (SEK million) Games Other Selected pipeline Quarterly New releases • 7 AAA titles in the pipeline currently planned NINTENDO SWITCH for release until March 2026. 463 476 New studios 307 271 305 NINTENDO SWITCH • Announced and closed the acquisition of US-based Shiver Entertainment Inc. + 2
Slide 10: About CrazyLabs
About CrazyLabs • Leading games publisher, developer and innovator. • Focus on casual and lifestyle role playing games. • Founded in 2010 as TabTale and lead today by Sagi Schliesser (CEO & Co Founder) and Guy Tomer (COO and GM HyperCasual). Founded in 2010 HQ in Tel Aviv, Israel • External & intern
Slide 11: Companies within DECA net sales
Net sales (SEK million) Companies within DECA Other Quarterly • CrazyLabs’ sales were ATH in December, driven by 661 improvements to ad monetization in the hyper-casual back-catalog and the scale of Multi Maze. ATH • After the quarter CrazyLabs reached a milestone of 5 PHONE CASE DIY billion accumul
Slide 12: Easybrain net sales
Net sales (SEK million) Net sales drivers in the quarter Other Quarterly • Games by Easybrain surpassed 1 billion cumulative downloads and reached record levels of daily revenue 878 and projected profits. BLOCKUDOKU ART PUZZLE NUMBER MATCH 576 607 ATH • Easybrain had 8 of the top-25 revenue titles i
Slide 13: Net sales (SEK million) Games
Net sales (SEK million) Games Other Selected pipeline Quarterly New releases • 10 AAA titles in the pipeline currently planned for release until March 2026. 437 434 455 New studios • Announced its acquisition of Perfect World Entertainment, a video game developer and publisher for PC and consoles, i
Slide 14: Partner Publishing / Film
Partner Publishing / Film Net sales (SEK million) Other Other Companies within PP/Film Quarterly • Koch Films acquired Spotfilm Networx GmbH in Berlin, a leading ad- 1 360 supported (AVOD) streaming operator in Germany. Koch Films plans for further expansion in the AVOD market internationally. 813 A
Slide 15: Market update
Market update • The games market is predicted to continue growing at D billion a CAGR of +9% (from 2019 to 2024) (Newzoo) +7,4% • The 2021 Games market was up +1.4% YoY, a great result considering the record high levels achieved in . bn 2020 (Newzoo). . bn . bn • Mobile gaming was the fastest growin
Slide 16: 2. Financial performance
2. Financial performance
Slide 17: Key PnL metrics
Key PnL metrics Quarterly Trailing twelve months (TTM) Q3 Q3 YoY YoY December 2021 December 2020 SEK million FY21/22 FY20/21 Change Change Net sales 5,085 2,168 135% 14,212 7,959 79% Net sales – Games 3,725 1,355 175% 11,492 5,377 114% Net sales – Partner Publ./Film 1,360 813 67% 2,720 2,583 5% Gros
Slide 18: Business area games net sales breakdown
Business area games net sales breakdown Net sales ~70% recurring revenues (Mobile + Premium Live Ops / Ongoing) * 4 000 3 725 75% SEKm 256 70% 70% 3 500 2 961 66% 65% = Quarterly = Trailing twelve months 11 492 3 000 64% 2 831 357 60% 334 1 610 9 122 2 500 55% 1 975 742 7 786 +114 YoY 2 000 50% 930
Slide 19: Cash flow statement
Cash flow statement The increased working capital is mainly related to FY21/22 FY20/21 TTM SEK million increased trade receivables in Partner Publishing / Q3 Q3 Q3 Film and is driven by increased net sales. EBITDA, adjusted* 1,490 879 5,446 Management expects to see a positive effect in the quarter
Slide 20: Investments, pipeline, development and capacity continue to grow
Investments, Pipeline, development and capacity continue to grow Investments in game development by quarter Internal capitalized development External game development and advances +77% 881 925 1000 SEKm 900 Completed games: 800 700 329 SEK 377m 522 (Total development cost of all games released in th
Slide 21: Project ROI (Contribution/Investment)
Project ROI (Contribution/Investment) • Based on reported numbers >50,0 10,0 until 31 December 2021 Average title project data: Sales SEK 251m, Contribution SEK 172m • Sample includes projects with 9,0 sales above SEK 40 mn or and Investment SEK 53m. investment above SEK 40 mn (45 projects) 8,0 SEK
Slide 22: Financial Leverage Policy
Financial Leverage Policy • The board of directors maintains a prudent financial leverage policy for the group, reiterating the existing target. Financial leverage can temporarily be allowed to exceed 1.0x net debt to operational EBIT, where operational EBIT is measured as management’s pro-forma exp
Slide 23: Business area - Games
Business area - Games Organic Growth Pro forma Growth +19% +16% • For organic growth we are excluding this years sales for companies that was not part of Embracer last year. • For the pro forma growth, we are adding last year’s net sales of acquisitions made. • Organic growth in quarter amounts to S
Slide 24: 3. Sustainability quarterly update
3. Sustainability quarterly update
Slide 25: Sustainability – Part of Our Business
Sustainability Sustainability – Part of Our Business Development and publishing Creating long term of games and entertainment value for stakeholders for the global market 25
Slide 26: Sustainability – Values, Risk and Business
Sustainability Sustainability – Values, Risk and Business Business Support Risk Management • Games/Products • Organisation Values • Legal • Collaborations • Diversity and Equality • Financial and Partnerships • Creativity • Reputational • Long-term 26
Slide 27: Smarter Business Framework: people, work, planet
Sustainability SMARTER BUSINESS FRAMEWORK We focus on our people, products and the planet GREAT SOLID GREENER PEOPLE WORK PLANET Our people are creative, Our products entertain and We will minimize our impact on dedicated and our most create feelings, based on the environment by limiting our importa
Slide 28: Sustainability Q3 2021-22
Sustainability Q3 2021-22 SUSTAINABILITY SUSTAINABILITY UN GLOBAL SESSIONS WITH WEBINARS COMPACT MEMBER OPERATIVE GROUPS • Management level • Open for all employees • The world’s largest initiative for sustainability in the • Establish a common ground • Raise awareness and share business sector rega
Slide 29: 4. Deep dives
4. Deep dives
Slide 30: Change of listing venue
Change of listing venue • The project for changing listing venue is progressing ahead of our original time plan. We now have the ambition to be ready for listing at the regulated Nasdaq Stockholm Main Market by the end of 2022, provided that certain milestones are reached as planned. • Large project
Slide 31: Accumulated M&A development
M&A Recap Accumulated M&A development 2016 2017 2018 2019 2020 2021 Full Full Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- M&A KPIs year year Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Acc. Additional operative groups 0 0 1 1 1 2 2 2 3 3 3 4 5
Slide 32: Acquisition follow-up – 2021-12-31
Acquisition follow-up – 2021-12-31 40 of 71 M&A deals been in Embracer > 1 year per 31 December 2021 At closing Q3 21/22 Operative units & • Operational EBIT SEK 1,4 Bn*) Standalone companies • Operational EBIT TTM SEK 2,1 bn. SEK • Adding to IP portfolio – 14 deals +0,7Bn or 52% Growth since acquis
Slide 33: Our publishers
Our 18 publishers Location / Country Mobile PC / PC / PC / Mobile PC / PC / PC / PC / PC / PC / PC / (Hyper Mobile PC / MMO / PC / Platforms Console / VR Movies Console / Console / Live Ops (Puzzle / Console Console Console Console Console Console Console Casual / (Casual) Console Console Mobile Mob
Slide 34: 5. Milestone
5. Milestone
Slide 35: Milestone
Milestone Info • Development Studio and Publisher specialized in racing games with over 27 years of experience. • One of the largest racing game developer and publisher in the world with an expert team renowned for creativity and experience and with immense passion for motor sports. • Since 2019 par
Slide 36: Milestone portfolio
Milestone portfolio 1994 2021 36
Slide 37: Milestone: company overview
Milestone: company overview Luisa Bixio CEO Development 5% Product based organization: one 10% vertical dedicated team for each 10% franchise/game 75% R&D Driving company tech evolution on different sides 10% Publishing Managing internally commercial and marketing life cycle of each product from the
Slide 38: Milestone: our latest success
Milestone: our latest success Press 6.000+ articles worldwide overall Esquire Polygon 2.000+ articles worldwide only in September (launch month) Kotaku Forbes Online views 50M+ views 12M+ views 10M+ views on the Announcement Trailer on the Launch Trailer (and counting) overall on all trailers 38
Slide 39: Milestone: solid organic financial performance
Milestone: solid organic financial performance At a glance: Selected KPI’s SEKm 586 • Solid revenue growth driven by new releases and back catalog where the recently released Hot Wheels stands out. 380 • Improved profitability through top-line growth 299 270 and increased share of digital sales. 244
Slide 40: Q&A
EMBRACER GROUP Q&A
Slide 41: Embracer Group
EMBRACER* GROUP