Tomb Raider Chronicles - EMBRACER GROUP PUBLISHES 2022 Q2 INTERIM REPORT

Embracer Group, the parent company of Crystal Dynamics, Eidos Montreal, Gearbox Entertainment plus 124 internal game development studios, has published the interim report Q2, for the period July-September 2022. Embracer Group saw net sales increase by 190% and organic growth by 35%.

Lars Wingefors, Co-founder and Group CEO said: "We are pleased to announce another stable quarter for Embracer. The second quarter is the strongest quarter so far in terms of net sales and Adjusted EBIT for the Group, supported by a solid organic growth of 35 percent."

"As we are gearing up to meet an increasingly challenging market environment, we are working on a transformative content partnership and have separately also launched a special review of our business to further optimize our decentralized model, capture new opportunities and add strategic flexibility."

On new initiatives, Lars stated: "Over the past several years, we have invested significantly in creating one of the largest providers of PC/Console content in the industry. We have close to 10,000 developers creating games, many based on Embracer’s deep and growing catalog of IPs. Our efforts in this regard have created significant collective value which we are now starting to realize."

"One result of such efforts to capitalize on the value we have created is a transformative partnership and licensing deal, that we have worked on with several industry partners. This deal covers a range of large-budget upcoming games over the coming six years."

On organic growth, Lars stated: "The organic growth during the quarter of 35% was, as expected, primarily driven by new releases within PC/console, in particular supported by the reboot of Saints Row, which was released on August 23. The reception of Saints Row did not meet the full expectations and left the fanbase partially polarized. The game development studio, Volition, has been working hard to improve the player experience."

On creating new opportunities, Lars stated: "We continue our long-term mindset in building enduring, innovative and profitable businesses in a creative industry. I have a firm belief in our decentralized operating model, which is built around experienced and successful creators and entrepreneurs. That said, the world has changed for the worse in many areas, becoming darker in recent months. We need to adapt to the challenges of geopolitical and social issues around the world and the new macroeconomic reality."

"The increased cost of capital will impact our business going forward. The adjustments in the cost of capital will, compared to before, require current and future investments, both organic and in-organic, to have a higher minimum hurdle with a safety margin to justify the capital allocation. We need to continue our sharp focus on the execution of our ongoing business around the world."

A presentation "in connection with the publication of the interim report for the second quarter, the period July-September 2022" will be held on 17 November, 2022 in Stockholm, Sweden, with CEO Lars Wingefors, CFO and Deputy CEO Johan Ekstrom, and Head of sustainability Emma Ihre in attendance.

Embracer Group acquired development studios Crystal Dynamics, Eidos-Montreal, Square Enix Montreal, and a catalogue of IPs including Tomb Raider, Deus Ex, Thief, Legacy of Kain and more than 50 back-catalogue games from Square Enix earlier this year.