STOCKHOLM, Feb. 18, 2021 /PRNewswire/ --
THIRD QUARTER, OCTOBER-DECEMBER
2020 (COMPARED TO OCTOBER-DECEMBER
2019)
> Net sales increased by 44% to SEK
2,168.1 million (1,508.5). Net sales of the Games business
area increased by 62% to SEK 1,355.6
million (835.7). THQ Nordic SEK 379.8
million (333.0), Deep Silver SEK
496.9 million (466.6), Coffee Stain SEK 99.2 million (36.1), Saber Interactive
SEK 307.0 million (-) and DECA Games
SEK 72.7 million (-).
> Net sales of Partner Publishing/Film business area
increased by 21% to SEK 812.5 million
(672.9).
> EBITDA increased by 70% to SEK 878.7
million (518.4), corresponding to an EBITDA margin of
41%.
> Operational EBIT increased by 100% to SEK 603.1 million (302.1) corresponding to an
Operational EBIT margin of 28% (20%).
> Cash flow from operating activities amounted to
SEK 840.4 million (239.5).
Investments in intangible assets amounted to SEK -557.7 million (-419.0). Free Cash Flow
amounted to SEK 309.1 million
(-207.3).
> Adjusted earnings per share was SEK
1.06 (0.68).
> Organic growth in constant currency for the Games Business
Area amounted to 21% in the quarter.
> Total game development projects increased 56% to 150 (96).
Total headcount increased 93% to 5,730 (2,970) where total game
developers increased 92% to 4,325 (2,258).
Key performance
indicators, Group
|
Oct-Dec
2020
|
Oct-Dec
2019
|
Apr-Dec
2020
|
Apr-Dec
2019
|
Apr 2019-
Mar 2020
|
Net sales, SEK
m
|
2,168.1
|
1,508.5
|
6,620.0
|
3,910.3
|
5,249.4
|
EBITDA, SEK
m
|
878.7
|
518.4
|
2,812.9
|
1,326.1
|
1,821.3
|
Operational EBIT, SEK
m
|
603.1
|
302.1
|
1,967.6
|
747.0
|
1,033.0
|
Cash flow from
operating activities, SEK m
|
840.4
|
239.5
|
2,377.2
|
962.6
|
1,728.3
|
Free cash flow, SEK
m
|
309.1
|
-207.3
|
824.4
|
-275.8
|
-0.1
|
Total investments in
intangible assets, SEK m
|
558
|
419
|
1,540
|
1,189
|
1,653
|
Total game
development projects
|
150
|
96
|
150
|
96
|
103
|
Total internal and
external game developers
|
4,325
|
2,258
|
4,325
|
2,258
|
2,365
|
Total
headcount
|
5,730
|
2,970
|
5,730
|
2,970
|
3,109
|
Sales growth,
%
|
44
|
9
|
69
|
12
|
3
|
EBITDA margin,
%
|
41
|
34
|
42
|
34
|
35
|
Operational EBIT
margin, %
|
28
|
20
|
30
|
19
|
20
|
CEO COMMENTS
STRONG ORGANIC GROWTH EXPECTED COMING YEARS
- The Company prepares for the next decades as public company by
deciding on IFRS conversion and process to list on regulated
market
We are pleased to announce another stable quarter driven
particularly by our back catalogue's strong performance. Net sales
increased by 44% to SEK 2,168.1
million (1,508.5) whereof the Games business area
contributed SEK 1,355.6 million
(835.7) driven by 21% organic CCY growth (YTD CCY 54%). The
proforma CCY growth in the quarter is estimated to 33%.
Operational EBIT grew by 100% to SEK 603.1
million (302.1).
As our operative groups are growing, we have continued to
strengthen the parent company and implemented structured processes
and management in order to ambitiously build Embracer Group for the
next decades.
I am glad to announce that the Board of Directors has decided to
convert to the reporting standard IFRS and thereby start the
process towards being listed on a regulated market. The Board of
Directors has already decided to establish an Audit Committee and a
Remuneration Committee to be effective immediately. We estimate the
process to become listed on a regulated market will take 18-36
months.
To constantly invest for long-term organic growth is a key
strategic pillar across our operative groups. Reinvesting our
underlying cashflow into scaling up existing studios, setting up
new studios and making more great games. In the past quarter,
investments in ongoing game development were a record SEK 523 million corresponding to more than three
times the value of completed (released) games. Despite these growth
investments, our free cash flow reached SEK
309 million (-207) during the quarter and on a trailing 12
month-period it is exceeding SEK 1
billion.
Our quality first approach means that we give the developers the
required time or resources to release a quality product. Over time,
we believe this approach in general makes the most sense for all
stakeholders - the fans and gamers, developers and employees, our
business partners and the shareholders. On May 25, long-awaited Biomutant from our internal
studio Experiment 101 will be released by THQ Nordic on multiple
platforms. We are well aware that it has been quite a delay, but we
are confident that it has been delayed for the right reasons. To
give some idea of our processes, during the current year we have
decided to move more than ten releases into the next financial
year, mainly due to our quality first approach.
Looking ahead, we now expect the next financial year ending
March 2022 to become the strongest in
our history driven by numerous significant releases towards the
second half of the year. In total, we expect to complete more than
70 premium game development projects with a total completion value
in the range SEK 2,500-3,000 million,
according to management estimates at the time of this report. This
excludes any additions from the announced transactions on
February 3 with Gearbox, Aspyr and
EasyBrain. Consequently, we now expect Q4, the current quarter
ending March, to have lower activity in terms of new releases. The
value of completed (released) games in Q4 is estimated to be in the
range of SEK 120 - 140 million and
between SEK 840 - 860 million for the
fiscal year.
During the current quarter, I am humbled to see the gamers'
reception of the Early Access release on Steam of Valheim. The game
is inspired by Viking culture, developed by our external partner
Iron Gate and published by Coffee Stain. At the publication of this
report, the game has already sold close to 3 million copies. The
commercial impact follows Coffee Stain's typical partnership with
external developers, including a minority ownership in the
studio.
The M&A market is more vivid than ever and the number of
entrepreneurs and creators wanting to join our group keeps growing.
Across the group, we are having more dialogues than ever. Our
ambition is to continue growing the number of mergers and
acquisitions, as our ecosystem expands with additional operative
groups where transactions are initiated and made. In my belief, a
key factor to our success is that entrepreneurs who become part of
Embracer maintain their creative and operative freedom while they
can go faster and boost their growth by being docked into our
growing eco-system and available resources.
Embracer just got started, and will over the coming decades
continue the same strategy we started years ago. We are a truly
independent platform for entrepreneurs and currently only represent
around 1 percent of the global video games industry. Our
competitors and industry peers are generally significantly larger
companies.
Retaining and attracting the best talents are our most important
mission to grow our group in the future. We are actively recruiting
across most of our studios and grew headcount organically by 20% in
2020. A couple of weeks ago, we announced three transformative
transactions when welcoming The Gearbox Entertainment Company,
Easybrain and Aspyr Media to the Embracer family. After the closing
of the announced deals, Embracer Group will maintain a strong
balance sheet with a financial net cash position and approximately
SEK 10 billion in cash and available
funds to support further M&A.
I am grateful to see the willingness and engagement in
maintaining our global group's business, despite the still on-going
covid-19 pandemic. The working from home situation is challenging
in many ways. It's a new challenge for our management to address
and to find new creative solutions to handle the very best way
possible to keep a work-life balance and prevent ambient stress. I
want to sincerely thank each and every one for all the efforts that
keep our business going, during the seemingly
never-ending-pandemic. I am looking forward to when this is over,
and we all can see each other again.
To conclude, I would like to send my thanks to all our
colleagues, customers, business partners, and shareholders for
contributing to our growing family's prosperity and success.
February 18, 2021, Karlstad,
Värmland, Sweden
Lars Wingefors
Co-founder & CEO
For more information, please contact:
Lars Wingefors, Co-founder and Group CEO, Embracer Group
Tel: +46 708 47 19 78
E-mail: lars.wingefors@embracer.com
About Embracer Group:
Embracer Group is the parent company of businesses developing
and publishing PC, console and mobile games for the global games
market. Embracer Group has an extensive catalogue of over 200 owned
franchises, such as Saints Row, Goat Simulator, Dead Island,
Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters,
Satisfactory, Wreckfest, Insurgency and World War Z, amongst many
others.
With its head office based in Karlstad, Sweden, Embracer Group has a global presence
through its six operative groups: THQ Nordic GmbH, Koch Media
GmbH/Deep Silver, Coffee Stain AB, Amplifier Game Invest, Saber
Interactive and DECA Games. Embracer Group has 57 internal game
development studios and is engaging more than 5,500 employees and
contracted employees in more than 40 countries.
Embracer Group's shares are publicly listed on Nasdaq First
North Growth Market Stockholm under the ticker EMBRAC B with FNCA
Sweden AB as its Certified Adviser; info@fnca.se +46-8-528 00
399.
Subscribe to press releases and financial information:
https://embracer.com/investors/subscription/
For more information, please visit: http://www.embracer.com
This Interim Report is information that is mandatory for
Embracer Group 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 06:00 CET on February 18,
2021
This information was brought to you by Cision
http://news.cision.com
https://news.cision.com/embracer-group-ab/r/embracer-group-publishes-interim-report-q3--october-december-2020--operational-ebit-increased-100--t,c3289146
The following files are available for download:
https://mb.cision.com/Main/15049/3289146/1374781.pdf
|
Embracer Group
Interim Report Q3 2020
|