Tomb Raider Chronicles - EMBRACER GROUP PUBLISHES Q1 24/25 INTERIM REPORT

Embracer Group has published the interim report for Q1 2024/25, the period April-June 2024. Embracer Group has an extensive catalog of over 900 owned or controlled franchises including Tomb Raider and 106 internal game development studios including Crystal Dynamics and Eidos.

"Q1 total net sales were SEK 7.9 billion, with Adjusted EBIT of SEK 0.8 billion and a SEK 0.7 billion free cash flow improvement YoY. For the first time ever, on a trailing 12-month basis, free cash flow exceeded SEK 2 billion. Excluding the divested assets from Saber Interactive and Gearbox Entertainment, the pro forma EBITDAC was above SEK 5.9 billion." says Lars Wingefors, CEO and co-founder of Embracer Group.

"The transformation of our PC/Console business continues, and the pipeline of games looks solid. We still expect to release completed games with a value of SEK 3.9 billion for the financial year. Our highly anticipated game Kingdom Come: Deliverance II, is now confirmed for global release on February 11, 2025."

Embracer Group said in the quarter "net sales decreased by -24% YoY to SEK 7.9 billion (organic growth of -23%), in line with management expectations. The YoY decline is primarily due to tough comparisons and few new product releases within PC/Console Games and Entertainment & Services. Adjusted EBIT amounted to around SEK 0.8 billion. Free cash flow was positive despite fewer new releases and was supported by lower capex."

The PC and Console Games segment saw organic growth -30% in the quarter. "Excluding the release of Dead Island 2 in the comparison quarter, the organic growth was 15% in Q1."

The Tabletop Games segment saw "adjusted EBIT grow by 20% YoY to around SEK 250 million in Q1, with a notably improved margin YoY supported by a better product mix and with an improved free cash flow."

The Mobile Games segment "had another strong quarter, with over 20% Adjusted EBIT growth YoY to SEK 518 million. The Adjusted EBIT margin came in at 37%, again with stronger-than-expected profitability, driven by a product mix shift, lower user acquisition costs and optimization of the balance between current and future potential profits."

The Entertainment and Services segment "had a soft quarter with organic growth amounting to around -50% YoY as a result of fewer new releases and products, for both PLAION Partner Publishing & Film and Freemode. "

Embracer Group said the process to transform into three standalone publicly listed entities "is progressing according to plan. It will enable each entity to better focus on their respective core strategies and offer more differentiated and distinct equity stories for existing and new shareholders."