Tomb Raider Chronicles - EMBRACER GROUP PUBLISHES Q3 2024/25 INTERIM REPORT

Embracer Group has published the interim report for Q3 2024/25, the period October-December 2024. Embracer Group has an extensive catalogue of over 450 owned or controlled franchises including Tomb Raider and 75 internal game development studios including Crystal Dynamics and Eidos.

"In Q3, net sales amounted to SEK 7.4 billion, with Adjusted EBIT of SEK 1.2 billion and a free cash flow of SEK 0.9 billion. The spin-off of Asmodee has been successfully completed and the separately listed company is now trading on Nasdaq Stockholm. With a pro forma net cash position of around SEK 5 billion as of Q3, we will accelerate our efforts to find the best allocation of companies and assets as part of our next spin-off. This process aims to maximize operational efficiency and unlock value. We are immensely proud of the teams involved in the successful release of Kingdom Come: Deliverance II, which has significantly outperformed our expectations so far." says Lars Wingefors, CEO and co-founder of Embracer Group.

"In the quarter, Embracer's organic growth for continued operations (i.e., excluding Asmodee) amounted to 7%, with net sales of SEK 7.4 billion. Adjusted EBIT was relatively stable YoY at SEK 1.2 billion with a notably improved free cash flow of SEK 0.9 billion from continued operations. The profitability was supported by a resilient performance in PC/Console Games despite limited new releases in the quarter, while the organic growth was driven by Entertainment and Services and an improved organic growth trend for Mobile."

In the PC and Console Games segment, Embracer Group said "organic growth amounted to -1% with limited new releases in the quarter, as well as in the preceding quarters. Adjusted EBIT increased by 17% YoY in Q3. The Adjusted EBIT margin improved to 21%, driven by strong execution across many of the key businesses. The quarterly performance was supported by profitable external development projects, a few subscription deals, primarily related to the Goat Simulator franchise and Dead Island 2, as well as a strong holiday catalog performance for many of our games."

Other revenue amounted to SEK 588 million (843) in the quarter, a decrease of -30% YoY, driven by the divestment of Gearbox and Saber. In the corresponding quarter last year, divested assets contributed SEK 344 million. Crystal Dynamics - Eidos had a strong contribution, supported by several ongoing and recently signed external development projects.

Net sales in the quarter for Mobile Games "amounted to SEK 1,669 million, an increase of 2% compared to the same period last year, or 3% organically and 3% pro forma. DECA Games saw a return to solid high single-digit organic growth, while divested mobile assets had a slightly negative growth. Underlying market trends were largely stable compared to the previous quarter, with normal seasonal trends."

Net sales in the The Entertainment and Services segment "amounted to SEK 3,093 million, an increase of 19% compared to the same period last year, or 19% organically and pro forma. The positive organic growth is explained primarily by PLAION Partner Publishing, with several successful releases from partners, including the boxing game Undisputed as one of the key top line drivers."

With the Asmodee spin-off now complete, Lars Wingefors said Embracer Group will "remain dedicated to creating additional publicly listed companies, with the separation of 'Coffee Stain and Friends' from 'Middle-earth and Friends' during the calendar year 2025. We continue to dedicate time to arrive at the best allocation of companies and assets to maximize operational efficiency and unlock value."