Regulatory Press release • May 19, 2022 • 06:00

Embracer Group publishes Full Year Report and Q4, January-March 2022: OPERATIONAL EBIT INCREASED BY 17% TO SEK 1,052 MILLION

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· Net sales increased by 117% to SEK 5,228.5 million (2,404.2).
· Net sales for business area Games increased by 124% to SEK 4,417.5 million (1,975.2). THQ Nordic SEK 328.3 million (354.6), Koch Media Publishing SEK 543.3 million (464.9), Coffee Stain SEK 171.2 million (780.9), Saber Interactive SEK 448.0 million (270.7), DECA Games SEK 615.1 million (104.2), Gearbox Entertainment SEK 606.1 million (-), Easybrain SEK 1,134.2 million (-) and Asmodee SEK 571.2 million (-).
· Organic growth in constant currency for business area Games amounted to –34%. Pro forma growth in constant currency for business area Games amounted to 3%.
· Net sales for business area Partner Publishing/Film increased by 72% to SEK 736.5 million (429.0).
· EBITDA increased by 26% to SEK 1,472.7 million (1,172.5), corresponding to an EBITDA margin of 28% (49%).
· Operational EBIT increased by 17% to SEK 1,052.4 million (903.2) corresponding to an Operational EBIT margin of 20% (38%).
· Cash flow from operating activities amounted to SEK 1,589.5 million (1,521.8). Net investments in intangible assets amounted to SEK –998.3 million (598.9). Free cash flow before change in working capital amounted to SEK 378.6 million (531.3).
· Adjusted earnings per share was SEK 0.81 (1.03).

Key performance indicators, Group Jan-Mar
Apr 2021-
Mar 2022
Apr 2020-
Mar 2021
Net sales, SEK m 5,228.5 2,404.2 17,036.7 9,024.2
EBITDA, SEK m 1,472.7 1,172.5 6,135.1 3,985.3
Operational EBIT, SEK m 1,052.4 903.2 4,416.3 2,870.8
Cash flow from operating activities, SEK m 1,589.5 1,521.8 4,281.3 3,899.0
Free cash flow before change in working capital, SEK m 378.6 531.3 1,232.2 1,552.0
Net investments in intangible assets, SEK m 998.3 598.9 3,712.2 2,135.1
Total game development projects 223 160 223 160
Total internal and external game developers 8,586 5,115 8,586 5,115
Total headcount 12,760 6,325 12,760 6,325
Sales growth, % 117 80 89 72
EBITDA margin, % 28 49 36 44
Operational EBIT margin, % 20 38 26 32

In this report, all figures in brackets refer to the corresponding period of the previous year, unless otherwise stated.


We are pleased to announce another stable quarter in line with our forecasted operational EBIT. Today we reiterate our forecast for the current and next financial year. We now have diversified revenue streams from four complementary business areas that will form our primary segments as we implement IFRS at Group level starting April 1, 2022. The process to change the listing venue to Nasdaq Stockholm’s main market by the end of this calendar year is on track.

In the wake of the pandemic, we conclude a quarter facing one of the most difficult times in Europe; an inhumane and aggressive war in Ukraine. I am deeply saddened by the situation, it is an inconceivable act of cruelty that overshadowed our everyday progress in the quarter. All of our employees are part of our family and our first priority has been and still is to provide the safety of our staff and their families in the affected regions. By the end of 2021 we engaged approximately 250 people in Ukraine, 1,000 in Russia, and 250 in Belarus.

I think we all feel the duty to engage. If we fail to act with compassion and humanity, we will fail as a business and an employer. I’m proud of the unprecedented actions taken across our companies to aid those affected by the crisis. I want to sincerely thank each and every one in our ecosystem for all their efforts in handling this crisis together. We are stand firm in support of our employees wherever they are located. We have relocated hundreds of employees and their family members to other countries, while trying to help those that are still in Ukraine as much as we can.

All our internal development resources in the region are fully utilized whereas many key functions in development, tech, business intelligence and user acquisition have been relocated to operations outside the region.

We have donated, pledged or reserved SEK 50 million for humanitarian aid and support of our employees affecting our Operational Ebit in the quarter. Our consumer revenues from Russia, Belarus, and Ukraine were about one percent of our global net sales in the past 12 months.

Reiterating our operational EBIT forecast
The operational performance of our businesses is in line with expectations, as our diversified back-catalog continued its steady performance in a quarter with only few new releases and continued organic growth in our mobile business. Operational EBIT for the reporting quarter increased by 17% to SEK 1,052 million concluding a financial year within the forecast range. The Operational Ebit in the quarter includes SEK 50 million in costs relating to the situation in Ukraine as well as SEK 74 million in contribution from Asmodee and Dark Horse. For FY 21/22 the group had pro forma annual net sales of approx. SEK 31 billion.

Looking ahead, we expect to achieve substantial organic growth in FY 22/23 primarily driven by our premium games segment through multiple releases of games from our well-invested project pipeline. To put in perspective, we expect to release new content with at least 3x higher accumulated investment value in FY 22/23 compared to FY 21/22. We plan for a continued solid growth from our mobile segment, driven by increased utilization of existing platforms, fueled by current and future investment in UAC and planned releases. We expect Asmodee to grow its Operational Ebit organically by at least 10%. Based on these conditions, we reiterate our forecast for operational EBIT of SEK 9.2-11.3 billion in FY 22/23 and SEK 10.3-13.6 billion in FY 23/24. This excludes any minor impact from the recent acquisitions of Beamdog, Lost Boys and Crystal Dynamics/Eidos, but takes into account possible indirect impacts from the war in Ukraine.

Looking into the breakdown of the year we expect the Operational Ebit to look quite similar in Q2-Q4 with a slight favour of Q3 and Q4 over Q2. Q1 will be approx 1/7 of the Operational Ebit forecast of FY 22/23 driven by only a few releases. We expect a strong free cash flow generation throughout the year.

The release schedule in the current quarter ending June, 2022 is less busy. Nonetheless, we are eagerly looking forward to AA and indie releases, such as Evil Dead: The Game and Songs of Conquest in the current quarter.

The first major AAA release, which is expected to step change the pace of organic growth, is the much-anticipated reboot of Saints Row scheduled for release on August 23. Across 20 publishers, we have a vast and diversified pipeline of upcoming premium PC- and console games with 223 games to be released in the coming years, including more than 25 AAA games up until FY 25/26. We continue to emphasize our strategy for game development – quality comes first. Developers should have the required time and resources to release a quality product and games should be released when ready.

Performance in the fourth quarter
Our growth model is unchanged. Our main priority across all operative groups is to achieve profitable organic growth. In this respect, the full year 2021/22 has been a transition year. We increased the investments into our pipeline of ongoing game development projects, but still released only a small part of the games under development.

The fourth quarter organic growth in business area Games was as expected negative, as the breakout success for Valheim, published by Coffee Stain last year is a difficult comparison due to its breakway success. We hope and believe we have many more of those successes in the pipeline in the year to come. Steady back catalog from PC/Console contribution came from the evergreen titles Metro Exodus, Spongebob Squarepants: Battle for Bikini Bottom Re-Hydrated, Wreckfest, Biomutant, Deep Rock Galactic, Valheim, Satisfactory and Goat Simulator, as well as newly released Hot wheels unleashed. The main release of the quarter ELEX II did not live up to management’s financial expectations in the quarter but we are expecting a positive ROI over time.

On March 25, Gearbox and its publishing partner 2K Games released Tiny Tina’s Wonderlands. This AAA game has been very well received by critics and players. Despite that there were no royalties recognized in the quarter, we are confident that the game will generate royalties during this financial year, due to continued success. We are thrilled about Gearbox and its wholly owned IPs Borderlands and Tiny Tina’s Wonderlands and what they both will bring in the future.

Our mobile businesses continued to outperform our expectations, driven by the strong development for Easybrain who had a record quarter since joining the group and made the highest contribution of all operative groups within business area Games. The performance is explained by an ad mediation platform deal and a continued strong performance of existing live operated titles. The pro forma organic growth in our combined mobile business was 43% in the quarter. Investments in user acquisition remained at a healthy level as return on ad spend is attractive, and this should support continued growth.

Recently acquired Asmodee has a strong operational momentum coming into the group. With Asmodee we are adding a leading international publisher for board games, trading cards and digital board games, with an extensive distribution network across 50 countries. Through their 22 internal studios and 300+ IPs, Asmodee creates a dynamic transmedia experience for players across a variety of digital and physical platforms. Only the board games category is highly complementary to PC, console, VR, and mobile games and has an appealing long-term organic growth outlook. The integration of companies acquired the past year, including Asmodee, is progressing according to plan.

Asmodee continues to outgrow the underlying tabletop market and grew 19% pro forma organic year-over-year in the past quarter, driven by a strong demand within the trading-card business. Net sales were SEK 2,580 million, despite some supply chain challenges. SEK 571 million of the quarter’s sales were consolidated into Embracer in the quarter. The first half of the calendar year is traditionally seasonally weaker for Asmodee.

Summing up a transformative year
The past year has been the most transformative since the IPO in 2016, just over five years ago. Since then our adjusted earnings per share have increased 15x. During the year, we have made strategic acquisitions that grew the number of operative groups from six to ten: Gearbox, Easybrain, Asmodee and Dark Horse.

Today, Embracer Group is an independent and highly diversified global ecosystem of gaming and entertainment businesses with strong market positions across key verticals. The decentralized Embracer model is all about empowering our entrepreneurs and great people that makes up all our business. I’m a firm believer in giving great people trust to make their own decisions.

Becoming part of Embracer is intended to be about taking the next step in a long journey. Founders and managers that we join forces with have high ambitions for the future, and it is Embracer’s role to unleash the full potential of each team and support them with the resources needed to succeed. The entrepreneurs are setting even bolder targets and if we reach even close to those ambitions together, the group will be positively transformed in many regards and senses over the coming decade. Furthermore, it is gratifying to see that our companies continue to attract and retain great talent. The number of employees has grown 14% on an organic basis in the quarter.

After the end of the quarter, we further strengthened our development capabilities and IP-portfolio by entering into an agreement to acquire Crystal Dynamics, Eidos Montreal and Square Enix Montreal, including Tomb Raider, Deus Ex, Thief and Legacy of Kain and other IPs. The announcement got an overwhelming and positive response. We see a great potential, not only in sequels, but also in remakes, remasters, spinoffs as well as transmedia projects across the Group. We expect the transaction to close in the July-September period.

Small fish, big pond
We believe the gaming industry is one of the most attractive industries over the coming decades. In 2021, according to Newzoo, the global market generated USD 193 billion which represented an 8% year-on-year growth. The global market is expected to continue to grow with a forecast exceeding USD 200 billion in 2022. Embracer Group is still a small fish in this big pond and currently represents approx. 1.5% of the total combined games and tabletop market. We may be the largest gaming company in Värmland, but the world is still bigger and we are at the beginning of our journey.

Four primary segments and strengthened corporate governance going forward
Our strategy to build a diverse and decentralized group that stands on many revenue streams remains unchanged. We believe that the greater our independent ecosystem becomes, the greater output we will have over the long term. We see clear evidence that the model is working in the ever-increasing number of synergies through collaborations and initiatives across the group.

To better represent the business characteristics, position and governance structure of our business, we will introduce a new segment reporting as of this financial year with PC/ Console games, Mobile games, Tabletop games and Entertainment & Services as our four primary segments. This is part of our regulated market up-listing process that will encompass not only the transformation of our reporting to IFRS as of the next report, but also upgraded corporate governance structures, implementation of a number of new policies and the adoption of the Swedish Corporate Governance Code.

Strong balance sheet supporting further M&A-opportunities
We maintain a strong balance sheet, as the best opportunities arise in turbulent times. We have in recent months seen a notable correction in valuation expectations in the private M&A market. Needless to say, we do not need to make any further acquisitions to grow. Nevertheless, we continue to scout for selected additional M&A opportunities to support our long-term growth ambitions. We have an exciting funnel of targets, with emphasis on bolt on acquisitions within existing operative groups.

We have a prudent approach to debt. Our financial leverage target states that we are willing to exceed 1,0x net debt to operational EBIT on a forward twelve months basis for the right inorganic growth opportunity, but with the ambition to return to below 1,0x in the medium term. The acquisitions of Asmodee and Eidos are examples of opportunities where we are willing to use debt, as these offer significant financial and strategic potential for value creation and strengthen our group. Available cash and unutilized credit facilities amount to approximately SEK 11 billion at the time of this report.

It is important for me as a founder and major shareholder to have committed long-term shareholders that share the same long-term horizon. I’m humble and grateful to all of our current loyal shareholders for their commitment and long-term support. We actively pursue multiple conversations with additional potential shareholders among high profile, large institutions and industrial partners that would support our long-term strategy. We are confident that some of these conversations will mature into investments or partnerships.

Our sustainability work
Sustainability continues to be an important priority for the group and we are continuously developing our efforts within our sustainability framework. We currently work to put forward our first sustainability goals, at the latest in time for the Q1 interim report.

In the quarter, our global employee survey has been carried out across the group with an impressive 80% response rate. The conclusion of the survey is a broad improvement in all major areas and all employees are on a green level (on a scale between red – yellow – green). As a measure to implement our Code of conduct, 79% of our employees participated in a training program regarding the Code’s content and usage areas.

To conclude I would like to send my thanks to all our shareholders, employees, customers, industry colleagues and business partners for contributing to the prosperity and success of Embracer Group.

May 19, 2022, Karlstad, Värmland, Sweden

Lars Wingefors
Co-founder & Group CEO

For any questions on this report, please contact:
Lars Wingefors, Co-founder & , +46 708 47 19 78
Johan Ekström, Group CFO, , +46 761 33 82 76

About Embracer Group
Embracer Group is a parent company of businesses led by entrepreneurs in PC, console, mobile and board games and other related media. The Group has an extensive catalog of over 850 owned or controlled franchises.

With its head office based in Karlstad, Sweden, Embracer Group has a global presence through its ten operative groups: THQ Nordic, Koch Media, Coffee Stain, Amplifier Game Invest, Saber Interactive, DECA Games, Gearbox Entertainment, Easybrain, Asmodee, and Dark Horse. The Group has 119 internal game development studios and is engaging more than 12,500 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; +46-8-528 00 399.

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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 May 18, 2022.


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Embracer Group is a global group of creative and entrepreneurial businesses in PC/console, mobile and board games and other related media. The Group has an extensive catalog of over 900 owned or controlled franchises.

With its head office based in Karlstad, Sweden, Embracer Group has a global presence through its eleven operative groups: THQ Nordic, PLAION, Coffee Stain, Amplifier Game Invest, DECA Games, Gearbox Entertainment, Easybrain, Asmodee Group, Dark Horse Media, Freemode and Crystal Dynamics – Eidos. The Group has 111 internal game development studios and is engaging more than 12,000 employees in more than 40 countries.