Embracer Group Ab Class B · OMXSTO:EMBRAC_B
Embracer Group Ab Class B — Q2 2023 Earnings Presentation
24 slides from Embracer Group Ab Class B's earnings presentation, Nov 17, 2022
Slide 1: Embracer Group Interim Report July–September 2023
Q2 FY 2023/24 EMBRACER GROUP INTERIM REPORT JULY – SEPTEMBER 2023
Slide 2: Disclaimer
INTERIM REPORT Q2 FY 2023/24 Disclaimer IMPORTANT INFORMATION – PLEASE READ THE FOLLOWING BEFORE CONTINUING READING representation or warranty, express or implied, is made by the Company or any of its affiliates, directors, advisors, employees and representatives as to the accuracy, completeness or
Slide 3: Interim Report Q2 FY 2023/24
Interim Report Q2 FY 2023/24 Net Sales Group YOY GROWTH Stable Q2 performance and SEK 10,831m 13% improved cash flow GROUP ORGANIC GROWTH GROUP PRO FORMA GROWTH -2% -3% Key internal IPs and studios performing well Adjusted EBIT YOY GROWTH Good progress on the SEK 1,814m -14% restructuring program Fr
Slide 4: Operating segments
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Slide 5: PC/Console Games
PC/Console Games NET SALES REVENUE SPLIT SEKm & ADJUSTED EBIT MARGIN BACK CATALOG SALES SEKm TOP 10 BACK CATALOG 3,909 4,500 60% 2,250 4,000 2,000 50% 3,500 1,750 1,883 3,000 1,500 1,612 40% 2,500 35% 34% 1,250 30% 2,000 1,000 1,173 1,500 20% 750 1,000 16% 500 621m 10% 500 250 0 0% 0 Q2 Q3 Q4 Q1 Q2
Slide 6: Pipeline ahead for FY 2023/24
PC/Console Games Pipeline ahead for FY 2023/24 Source: as of September 30, 2023 | Release slates can be subject to change, and will in this case be communicated through their respective publisher 6
Slide 7: Project ROI (Contribution / Investment)
PC/Console Games PROJECT ROI (CONTRIBUTION/INVESTMENT) DETAILS 14.0 >100 Average title project data: • Based on reported numbers until 13.0 Sales 289 SEKm, Contribution 203 SEKm September 30, 2023 and Investment 89 SEKm. 12.0 • Sample includes projects with sales SEK 22.8 bn above 40 SEKm or investm
Slide 8: Investments and completed game development
PC/Console Games INVESTMENTS AND COMPLETED GAME DEVELOPMENT SEK 10,031m 1,800 in capitalized development as of Q2* 4.0x 1,600 1,671 1,690 3.5x 1,400 3.1x 1,405 3.0x 1,200 2.5x 1,120 1,000 2.0x 800 882 1.5x 1.5x 600 1.0x 400 0.8x 200 281 0.5x 0 0.0x Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY 21/22 FY 22/23 FY 23/
Slide 9: Mobile Games
Mobile Games NET SALES SEKm & ADJUSTED EBIT MARGIN DAILY ACTIVE USERS & MONTHLY ACTIVE USERS NET SALES DRIVERS 2,000 60% 350 120 million 1,800 300 100 1,600 300 50% 1,400 250 1,441 1,471 253 Sudoku.com Blockudoku Number Match 80 40% 1,200 200 1,000 29% 30% 60 800 25% 150 864 22% 142 600 372m 36 20%
Slide 10: Tabletop Games
Tabletop Games NET SALES SEKm & ADJUSTED EBIT MARGIN STRONG PIPELINE 4,500 30% 4,000 4,070 25% 3,500 3,000 3,247 20% 2,500 16% 14% 15% 2,000 661m RELEASED AFTER THE QUARTER RELEASED AFTER THE QUARTER RELEASED AFTER THE QUARTER 1,500 10% 1,000 NEW RELEASES 5% 500 0 0% Q2 Q3 Q4 Q1 Q2 FY 22/23 FY 23/24
Slide 11: Entertainment and Services
Entertainment and Services NET SALES SEKm & ADJUSTED EBIT MARGIN 2,500 50% 45% 2,000 40% 35% 1,500 30% 1,381 25% 1,000 20% 14% 16% 15% 784 500 216m 10% 465 5% 0 1% 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY 21/22 FY 22/23 FY 23/24 Net Sales Adjusted EBIT Margin, % Adjusted EBIT THE LORD OF THE RINGS: RETURN T
Slide 12: Market update
OPERATING SEGMENTS Market update GLOBAL VIDEO GAMES MARKET REVENUE FORECAST GLOBAL MARKET USD billion Forecast PC1 Console1 expected to grow by expected to grow by 193 1% 190 197 206 +4% +2% 183 184 in 2023 in 2023 179 COVID PEAK 144 Mobile1 Tabletop2 expected to decline by grew in H1 FY 23/24 by -2
Slide 13: Financial performance
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Slide 14: Financial development
FINANCIAL PERFORMANCE | Q2 Financial development GROSS MARGIN DEVELOPMENT SEKm DEVELOPMENT OF MARKETING EXPENSES SEKm 14,000 120% 1,400 25% 12,000 1,200 100% 755 20% 10,000 10,831 1,000 700 76% 80% 17% 8,000 800 15% 66% 63% 60% 13% 6,000 600 10% 9,569 10% 399 40% 4,000 400 2,000 3,305 20% 200 523 43
Slide 15: Cash flow and net debt
FINANCIAL PERFORMANCE | Q2 Cash flow and net debt FY23/24 FY22/23 TTM Sept. 30, Sept. 30, March 31, SEKm SEKm Q2 Q2 Q2 2023 2022 2023 Adjusted EBITDA 2,923 3,056 10,563 Cash 5,520 8,879 4,662 Cash Tax -243 -203 -991 Current investments 2 - 18 Other items -310 -162 -846 Current liabilities to credit
Slide 16: Forecast
FINANCIAL PERFORMANCE | Q2 Forecast FORECAST ADJUSTED EBIT Financial Year 2023/24 SEK 7,000 – 9,000 million We remain confident in our forecast range. The H2 outlook for the PC/Console and Mobile segments has however softened somewhat compared to our assessment in Q1. For PC/Console, it is due to
Slide 17: Update on restructuring program
3. Update on restructuring program
Slide 18: Today's speakers
UPDATE ON THE RESTRUCTURING PROGRAM | Q2 Today’s speakers MÜGE BOUILLON PHIL ROGERS FINANCE WORKSTREAM LEAD – RESTRUCTURING PROJECT PC/CONSOLE WORKSTREAM LEAD – RESTRUCTURING PROJECT GROUP CFO, ASMODEE INTERIM CHIEF STRATEGY OFFICER GROUP CEO, CRYSTAL DYNAMICS-EIDOS
Slide 19: Reminder
UPDATE ON THE RESTRUCTURING PROGRAM | Q2 Reminder Objective: Improve efficiency and cash generation, transforming Embracer into a leaner, stronger, more focused and cash self-sufficient company Targets Timing Capex Opex Net debt 13 June 31 March SEK 2.9bn+ SEK 0.8bn+ Below 2023 2024 annual savings a
Slide 20: Progress update
UPDATE ON THE RESTRUCTURING PROGRAM | Q2 Progress update Making good progress on the restructuring program • First phase of capex reductions complete – currently deep into implementation of second phase of reductions • Opex savings well on track delivering reductions in both headcount and overhead c
Slide 21: Progress update
UPDATE ON THE RESTRUCTURING PROGRAM | Q2 Progress update Making good progress on the restructuring program • In the past months we accelerated processes to divest assets relative to increasing external funding of game development projects Capital • We are now running a few structured divestment proc
Slide 22: Embracer Group
EMBRACER* GROUP
Slide 23: Q&A
Q&A Until ~10:00 CET
Slide 24: Embracer Group
EMBRACER* GROUP