Embracer Group Ab Class B · OMXSTO:EMBRAC_B
Embracer Group Ab Class B — Merger or Acquisition (December 2021)
30 slides from Embracer Group Ab Class B's merger presentation, Dec 16, 2021
Slide 1: Proposed acquisition of Asmodee
Proposed acquisition of Asmodee Subject to completion of legal and local social obligations. Management presentation, December 16, 2021 RESTRICTED December 2021
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION AND THE INFORMATION CONTAINED HEREIN IS CONFIDENTIAL AND MAY NOT BE REFERRED TO, QUOTED OR OTHERWISE DISCLOSED BY YOU NOR WHOLLY OR PARTLY. BY REVIEWING THIS INFORMATION, YOU ARE ACKNOWLEDGING THE CONFIDENTIAL NATURE OF THIS INFORMATION AND ARE AGREEING TO ABIDE BY THE T
Slide 3: Today's presenters
Today’s presenters Lars Wingefors Johan Ekström Randy Pitchford Matthew Karch CEO CFO CEO CEO Embracer Group Embracer Group Gearbox Entertainment Company Saber Interactive Stéphane Carville Marc Nunes Thomas Koegler Gaëlle d’Engremont CEO Head of Board Games Head of Strategy & Business Development P
Slide 4: Today's agenda
Today’s 1 Background to the transaction agenda 2 Asmodee presentation 3 The contemplated transaction 4 Key strategic rationale 5 Key financial rationale 6 Financing structure & directed share issue 7 Any other updates and Q&A RESTRICTED 4
Slide 5: Leading Publisher, Developer & Distributor of Games
Leading Publisher, Developer & Distributor of Games Board Games & Trading Card Games complement Embracer’s Gaming eco-system Shared DNA Joint opportunities Financially attractive Shared strong cultural fit Cross-fertilised IP across Gaming Enhances the new Group’s strong categories financial p
Slide 6: Key transaction terms
Key transaction terms Transaction overview Financing structure • The day one consideration is approximately EUR2.75bn1 in total • The acquisition would be financed by cash at hand, available credit facilities and new credit facilities from Nordea Bank, SEB and Swedbank, including a • EUR350m would b
Slide 7: Financial rationale
Financial rationale • Accretive to shareholders, adds approximately 30% in forecasted Operational EBIT with approximately 7.5% dilution • The combined group would have a forecasted Operational EBIT range of SEK9.0-11.0bn during FY 22/23 and SEK9.8-12.9bn during FY 23/241 • These forecasts exclude fu
Slide 8: Great games, amazing stories, infinite possibilities
Great games, amazing stories, infinite possibilities • Leading international Publisher & Distributor for Board & Trading Card Games and Video Games • Founded in 1995 • 22 fully owned studios and 300+ IPs • Sales and distribution in 50+ countries (of which 21 with direct presence) • Global team of 2,
Slide 9: Asmodee's journey into becoming a global innovative content group
Asmodee’s journey into becoming a global innovative content group Business sales (EUR) Business Sales in €m ~1.1bn ~500m 110m ~40m 2021 1995 2013 2018 2007 From a French specialised distributor A global Board Game publisher and An innovative Gaming and global content group to a European Board Game p
Slide 10: Asmodee is a leading independent global Board Game platform
Asmodee is a leading independent global Board Game platform Key financials Commercial KPIs € EUR1.1bn business sales in FY21PF 22 fully-owned studios +25% CAGR business sales over 17A-21PF 300+ owned IPs +18% CAGR organic business sales over 17A-21PF 970+ games 40+ bolt-on acquisitions performed sin
Slide 11: Asmodee's four complementary and synergistic platforms
Asmodee’s four complementary and synergistic platforms bring amazing experiences to consumers 25 years backbone platform 3 new emerging platforms Social Online board games Boardgames Interactive Strong growth on a resilient market Tabletop Growth acceleration platform Video games Kids IP Consumer Au
Slide 12: Large, growing and non-cyclical worldwide games market
Large, growing and non-cyclical worldwide games market 2015A-2026E RSP(2) (in €bn) Covid catalyst CAGR CAGR CAGR 2022- 17-21 22-26 2026: +6% +11% +6% 13.3 12.5 11.8 1.7 +7% +5% 11.1 1.6 CAGR 2015- 10.5 10.5 1.6 +9% +6% 1.5 1.8 2019: 1.7 +4% 1.4 1.4 1.6 8.6 1.5 1.4 1.4 7.3 1.3 6.7 7.0 6.3 6.5 5.3 +9%
Slide 13: Mainstream players
3 main categories of players with specific behaviors and purchasing patterns Rationale for Gamer profile # players(1) Key channel playing 1 35-40 y.o. Intellectual & Hobby competitive stores Boardgames fans “Playing is my main Buy 10+ games p.a. ~60m challenge hobby” Play on a weekly basis Beloved I
Slide 14: Covid has increased boardgame consumption from existing customers
Covid has increased boardgame consumption from existing customers… Covid pushed existing customers to increase yearly spendings: Acquisition of more games Acquisition of more complex and expensive games April 2021 consumer survey – All boardgame players(1) 1% 3% 1% 5 %1 % Once a week or more 1
Slide 15: Accelerated recruitment of first-time buyers, with high retention rates
… and accelerated recruitment of first-time buyers, with high retention rates Lockdowns pushed people to find new sources of entertainment Customer acquisition during lockdowns driving higher awareness, eventually leading to repeat purchases (e.g. people offering games to friends & family) and t
Slide 16: Asmodee is a global leading games publisher & go-to-market specialist
Asmodee is a global leading games publisher & go-to-market specialist Asmodee benefits from a unique virtuous dual-positioning on the value chain, with an integrated publishing and go-to-market model Authors Publishers Go-to-market Retailers Direct access to authors via online Develop, finance a
Slide 17: Rich portfolio of 300+ owned IP plus partnerships
Asmodee has a rich portfolio of 300+ owned IP plus partnerships with world leading franchises Best-in-class, young and modern IP published across 22 studios Go-to-publishing & distribution partner for other world leading franchises Other fully-owned studios Source: Asmodee RESTRICTED 17
Slide 18: Asmodee's development business model is a low risk model
Asmodee’s development business model is a « low risk » model since the Group generates profits within 1st print run Development costs 1st run print economics €30 MSRP(1) per game €15 sales per game €10.5 business margin (70%) €9 margin contribution after shipping & royalties Games designers' wages G
Slide 19: One single IP declined into multiple products
Asmodee’s development business model is a « low risk » model since the Group generates profits within 1st print run One single IP successfully declined into multiple products … … to continuously drive organic growth By Geographies Business sales(2) (€m) Selected awards Europe Nordic Germany Worldwid
Slide 20: Asmodee's brands are young & modern with potential for growth
Asmodee’s brands are young & modern and therefore offer significant potential for growth Focused on building global consumer brands Strong positive correlation between global awareness and sales Pillar brands + Current positioning of Number of units sold High-potential brands historical iconic Board
Slide 21: Asmodee's footprint is truly global
Asmodee’s footprint is truly global, with sales and distribution in 50+ countries Leading market positions1 Canada Consumer & Interactive Country Rank Nordics Benelux 1 UK Central Europe 1 France 2 South Germany United States Europe 3 Logo Studios/platforms Headquarters 2 Offices Own go-to-market Di
Slide 22: New emerging platforms for an IP group
3 new emerging platforms for an IP group to bring amazing experiences to consumers and foster organic growth, leveraging on a strong and resilient boardgame backbone IP Consumer Interactive Entertainment Audience engagement Growth acceleration IP development platform platform platform Platform Consu
Slide 23: Asmodee is a proven consolidation platform
Asmodee is a proven consolidation platform, with a broad and actionable pipeline of 50+ targets Value-accretive M&A acquisition strategy 2014 2015 2016 2017 2018 2019 2020 2021 Acquisition 3 3 8 2 7 8 3 5 IPs & Studios Local distribution Interactive Content & eCom
Slide 24: Attractive opportunity to cross-fertilise IP within Games
Attractive opportunity to cross-fertilise IP within Games Turbocharge Asmodee’s rich Board Game IP into Video Games Leverage Asmodee’s Board Game expertise across Embracer’s rich IP Embracer has access to a vast library of hit Asmodee IP ripe for interactive development Asmodee will have access
Slide 25: Asmodee becomes the ninth operating group of Embracer
Asmodee becomes the ninth operating group of Embracer, continuing to operate independently Corporate structure post transaction THE BOARD Klemens Kicki Klemens Anton Per-Arne Lars Snapshot of the combined Group Matthew + Ken Ken 1 Op. Group 8 1 9 Randy Studios2 86 22 108 Oleg IPs 260+ 300+ 560+ Empl
Slide 26: Great IP is valuable across multiple channels
Great IP is valuable across multiple channels The lines between media are blurring Embracer is embracing transmedia GAMES IP MEDIA GAME FILM Film TV Music $439M Box Office 76M Views (S1) 33M Views 71M+ Units Sold 2022 Release MEDIA IP GAMES FILM GAME Film TV Toys 7M+ Units Sold 10M+ Units Sold 6M+ U
Slide 27: Foundation in place for creation of transmedia IP
Foundation in place for creation of transmedia IP Video Games Books + Board Games Media Sources: Company, Asmodee RESTRICTED 27
Slide 28: Ecosystem for entrepreneurs within gaming and entertainment
Operating model Ecosystem for entrepreuners within gaming and entertainment Each Operative Group has its own unique culture, DNA and strategy. Decentralization philosophy empowering individuality, creativity and speed. Offering benefits of a large structure e.g. access to growth capital, knowledge s
Slide 29: Transaction solidifies Embracer Group's position as the leading independent Gaming eco-system
Transaction solidifies Embracer Group’s position as the leading independent Gaming eco-system This marks a transformative step in Embracer’s strategy within gaming and entertainment as outlined at the September AGM 1 Creates one of Europe’s largest Gaming and Entertainment groups and establishes an
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