Regulatory Press release • November 17, 2021 • 06:00

Embracer Group publishes Interim Report Q2 2021: OPERATIONAL EBIT INCREASED 49% TO SEK 973 MILLION

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· Net sales increased by 38% to SEK 3,296.4 million (2,383.2).
· Net sales of the Games business area increased by 89% to SEK 2,831.1 million (1,495.4). THQ Nordic SEK 374.0 million (566.9), Koch Media Publishing SEK 584.7 million (506.8), Coffee Stain SEK 120.4 million (129.9), Saber Interactive SEK 462.9 million (259.1), DECA Games SEK 248.8 million (32.7), Gearbox Entertainment SEK 433.6 million (-) and Easybrain SEK 606.7 million (-).
· Net sales of Partner Publishing/Film business area amounted to SEK 465.3 million (887.8).
· EBITDA increased by 69% to SEK 1,640.0 million (969.0), corresponding to an EBITDA margin of 50% (41%). Remeasurement of participation in associated company Ghost Ship Games amounted to SEK 416.8 million in the quarter (and is included in reported EBITDA, but excluded from Operational EBIT).
· Operational EBIT increased by 49% to SEK 973.4 million (652.5) corresponding to an Operational EBIT margin of 30% (27%).
· Cash flow from operating activities amounted to SEK 1,024.0 million (804.7). Investments in intangible assets amounted to SEK 916.5 million (484.1). Free Cash Flow before change in working capital amounted to SEK 17.1 million (358.9).
· Adjusted earnings per share was SEK 0.65 (0.90). Adjusted EPS after exclusion of unrealized and realized fx gains/losses and discount interest effect on provisions was 0.81 (0.80).
· Organic growth in constant currency for the Games Business Area amounted to –9% in the quarter. Proforma growth in constant currency for the Games Business Area amounted to 11% in the quarter.
· Total game development projects increased 46% to 197 (135).
· Total headcount increased by 104% to 9,064 (4,445) and the total number of game developers increased by 108% to 7,470 (3,593). Organic growth for internal headcount in the Group was 25%.

Key performance indicators, Group Jul-Sep Jul-Sep Apr-Sep Apr-Sep Apr 2020–
2021 2020 2021 2020 Mar 2021
Net sales, SEK m 3,296.4 2,383.2 6,723.0 4,451.9 9,024.2
EBITDA, SEK m 1,640.0 969.0 3,172.3 1,934.0 3,985.3
Operational EBIT, SEK m 973.4 652.5 2,244.7 1,364.3 2,870.8
Cash flow from operating activities, SEK m 1,024.0 804.7 1,641.3 1,537.0 3,899.0
Free cash flow before change in working capital, SEK m 17.1 358.9 483.2 700.5 1,552.0
Total investments in intangible assets, SEK m 916.5 484.1 1,745.2 978.5 2,135.2
Total game development projects 197 135 197 135 160
Total internal and external game developers 7,470 3,593 7,470 3,593 5,115
Total headcount 9,064 4,445 9,064 4,445 6,325
Sales growth, %  38 89 51 85 72
EBITDA margin, % 50 41 47 43 44
Operational EBIT margin, % 30 27 33 31 32

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


The Group reports another stable quarter. Both net sales and operational EBIT grew in line with management expectations. We are 8 operating groups, 17 publishers, 82 studios, and are engaging over 9,000 people. Our pipeline includes 25 AAA releases until March 2026, and as we always put quality first, two of these are postponed from FY 21/22 to FY 22/23. We forecast Operational EBIT: FY 21/22 SEK 4,300-4,700 million, FY 22/23 SEK 7,000-8,500 million, FY 23/24 SEK 7,500-10,000 million. IFRS-reporting is scheduled to begin as of Q1 FY 22/23 and listing to Nasdaq Stockholm’s regulated main market to follow no later than June 2023.

Group net sales increased by 38% to SEK 3,296 million (2,383), whereof the Games business area contributed SEK 2,831 million (1,495), an 89% increase. Operational EBIT grew by 49% to SEK 973 million (652) with an increasing Operational EBIT margin of 30% (27%). Cash flow from operating activities amounted to SEK 1,024 million (805) and investments in game development amounted to a record SEK 881 million (445) to drive future organic growth.

25 AAA releases planned until March 2026 including two postponed releases from FY 21/22
Embracer Group is in better shape than ever before. We have eight scalable operating groups and within these, 17 publishers and more than 80 studios with amazing talents working on close to 200 ongoing game development projects. We are now more than 9,000 people engaged on a daily basis across the group – of which close to 7,500 games developers. Our organic growth strategy pays off and we have been able to grow the number of employees organically with 25% year over year. We have consistently invested in our project pipeline over the past five years and are well positioned to grow faster than the overall gaming market in the long term. We have one of the largest and most diversified portfolios of game franchises in the industry. This gives us a position of strength and enables our operative groups always to make the right longterm decisions. In order to put the product quality first and optimize the outcome for all parties – gamers, employees, shareholders – we have decided to postpone a number of releases from FY 21/22 to FY 22/23. This includes Saints Row and another unannounced but earlier expected AAA title in the fourth quarter.

Looking ahead in the current financial year, we are now expecting to complete games in the third quarter in the range of SEK 350-400 million followed by SEK 400-600 million in the fourth quarter. Our business has the past year changed notably with more revenues from Live Ops, mobile games and development/work for hire. This means that the forecasted completion value is a less relevant KPI to measure the business going forward. Hence, we have decided to cease to give a forecasted range of completed games from this quarterly and move over to Operational EBIT forecast going forward.

In the coming years, we are now expecting to release 25 AAA titles across the group until the end of the financial year ending March 2026. All these are all large premium game projects with development teams of between 100 and 250 at peak, and are all expected to be multi-million sellers backed with notable or significant marketing budgets. 11 of them are in full production, 6 under pre production and 8 in concept phase. 23 games are developed at internal studios.

Management forecasts higher profitability and significant growth the coming years
The management expects stronger profitability over the coming years than earlier, mainly driven by a greater pipeline of new products (including the delayed titles from FY 21/22), a continued strong back catalogue and live ops business within premium PC/console/VR segment as well as a healthy growth within the free-to-play mobile segment.

Operational EBIT forecast for the coming years:

FY 21/22 SEK 4,300-4,700 million
FY 22/23 SEK 7,000-8,500 million
FY 23/24 SEK 7,500-10,000 million

The forecast does not include any new M&A.

Stable performance from our mobile businesses growing 26%.
Our combined mobile business, with DECA Games, A Thinking Ape, IUGO, Easybrain and CrazyLabs (acquired in the quarter) had an impressive proforma sales growth of 26% during the quarter, despite the changes in Apple IDFA. Our mobile businesses combined had 32 million daily active users, 271 million monthly active users and 350 million total installs on a proforma basis. Easybrain announced that their titles reached the milestone of 1 billion total installs from App Store and Google Play with an all-time-high revenue of SEK 607 million in the quarter.

Despite growing the Games business with 89% in the quarter, we had an underlying negative organic CCY growth of –9% due to tough comps from THQ Nordic record quarter last year . Our acquired businesses the past year grow close to 30% resulting in proforma growth at +11%. Our premium PC/console/VR businesses primarily relied on back catalog sales in the quarter and only a few new releases contributed to sales. The most important new releases, Hot Wheels Unleashed, Insurgency Sandstorm (console) and World War Z Aftermath were successfully released during the last days of the quarter. Saber Interactive had a record performance in the quarter with net sales of SEK 463 million and strong Operating EBIT margin. Saber is intensively working on realizing synergies both within Saber group as well as across the wider group eco-system.

IFRS Conversion and listing on Nasdaq Stockholm
Our process to convert to the reporting standard IFRS is underway. We believe that this will facilitate investors’ understanding of our financial development as well as improve comparisons to peers while streamlining reporting procedures throughout the group. This is the most comprehensive step needed in the process to have the shares up-listed on a regulated market eventually. Significant progress has been made and the conversion date has now been set to 1 April 2022, which means the first quarterly report in August 2022 for FY 22/23 will be made under IFRS. The listing change will take place after the publication of our first quarterly report under IFRS, but no later than June 2023.

Review of long-term financial leverage
As a consequence of an expected improvement in absolute profits and free cash flow from our core business area Games in the coming years, the board of directors has initiated a review of the Group’s long-term financial leverage target, including likely cash payments for deferred M&A considerations. The outcome will be announced as soon as the review is concluded, but at the latest in connection with our Q3 report in February 2022.

Continued good pace on M&A
Acquisitive growth has been a strategic pillar for Embracer Group in the past and will remain so in the future. Currently, we have SEK 7.1 billion in net cash and SEK 16.2 billion in available cash, including credit facilities. Most of our contemplated transactions relate to talent and IP acquisitions with the purpose of strengthening our existing operating groups. We see increasing benefits from adding new studios to our growing ecosystem. We can create more content with a higher quality in a shorter time frame by cooperating across the Embracer network of studios and between operating groups.

We continue to have a number of active dialogues with entrepreneurs, management teams and owners across gaming and entertainment about larger, more transformative transactions, which would create new operating groups. We see benefits from adding additional scale and diversification across premium and free-to-play Gaming, but also adding capabilities to develop true transmedia IP’s. We are also intrigued by the prospect of strengthening our geographical reach and improving our technology capabilities. That said, our principles remains unchanged. We will never force a deal for the sake of making a deal, but rather let it take adequate time. It is no different from the quality comes first approach in making games. In the past 12 months, we have made 37 acquisitions and expect to do a similar amount of transactions over the coming 12 months. We currently have a large range of active processes and dialogues, including a good number of signed exclusive term sheets.

ESG-focus on people
Our current financial year focuses on social sustainability through our framework “Smarter Business” pillar Great People. Based on the materiality analysis, with external and internal stakeholders, our prioritized areas are Diversity & Inclusion, Worklife Balance, and Creativity & Independence. During this quarter, we have initiated different projects within that area.

To further strengthen the parent company capabilities within the sustainability area we are happy to welcome Emma Ihre as the Head of sustainability, starting early next year. Emma brings in senior experience in the area and has a relevant background to accelerate our efforts within ESG.

The still ongoing pandemic has to some extent had an adverse effect on productivity in studios due to a long-lasting period of work from home. Throughout the group, we try the best way forward in the “new normal” with home-office and hybrid solutions as societies slowly open up again.

We are humbled about that remote work has enabled new ways of talent recruitment, but also increased competition for talent globally. Talent scouting and recruitment within the industry are increasingly taking place online across countries and markets.

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.

November 17, 2021, 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 the parent company of businesses developing and publishing PC, console and mobile games for the global games market. The Group has an extensive catalogue of over 250 owned franchises, such as Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory, Wreckfest, Insurgency, World War Z and Borderlands, amongst many others.

With its head office based in Karlstad, Sweden, Embracer Group has a global presence through its eight operative groups: THQ Nordic, Koch Media, Coffee Stain, Amplifier Game Invest, Saber Interactive, DECA Games, Gearbox Entertainment and Easybrain. The Group has 86 internal game development studios and is engaging more than 9,000 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 November 17, 2021.


Arman Teimouri Head of External Relations +46 54 53 56 50
Oscar Erixon Head of Investor Relations +46 730 24 91 42


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 ten operative groups: THQ Nordic, PLAION, Coffee Stain, Amplifier Game Invest, DECA Games, Easybrain, Asmodee Group, Dark Horse Media, Freemode and Crystal Dynamics – Eidos. The Group has 106 internal game development studios and is engaging more than 11,000 employees in more than 40 countries.