Embracer Group FY2024 Q1 Earnings Release

Aug, 2024 APRIL –JUNE 2024
Q1
FY 2024/25
EMBRACER GROUP
INTERIM REPORT

Disclaimer
Q1 FY 2024/25
IMPORTANT INFORMATION –PLEASE READ THE FOLLOWING BEFORE CONTINUING READING
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-looking, or subject to review/audit from the Company’s auditors.
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2

Q1 Interim Report FY 2024/25
HIGHLIGHTS FROM Q1
3 Source: as of June 30, 2024
Net Sales Group
SEK 7,933m
Adjusted EBITSEK
828m -24
%
YOY GROWTH
-51 %
YOY GROWTH
Growing profitability in Mobile and
Tabletop YoY
Significantly improved cash flow and lowered net debt
FY 2024/25 started in line with management expectations
Highlights Q1 FY 2024/25
Free cash flow
SEK
47m SEK ( -599m)
Transformation of PC/Console continues
Spin -off plans on track and Asmodeefirst
up with CMD during Q3 FY 2024/25
Q1 FY 2023/24

Operating segments
1.

26%
21%
5%
0% 5%
10% 15% 20%
25% 3 0% 35% 4 0% 0
1,000
2,000 3,000
4,000
5,000
Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
Back Catalog Sales New Releases Sales Other Adjusted EBIT Margin, %
PC/Console Games
5 Source: as of June 30, 2024
NEW RELEASES
BACK CATALOG SALES | SEK million NET SALES REVENUE SPLIT SEK million & ADJUSTED EBIT MARGIN
NET SALES
2,656
TOP 10 BACK CATALOG
ORGANIC GROWTH
PRO FORMA GROWTH
-30 %
– 30 %
Operative Groups: 5 | Internal Headcount: 5, 438 | Internal Studios: 66
ADJ. EBIT
138
1,450 1,589 1,665
0
500
1,000 1,500
2,000 2,500 Q1
Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25

0.02.0 4.0
6.0 8.0
10.0 12.0 14.0
0
510 1520 25
Project ROI (Contribution / Investment)
Quarter since Release
PC/Console Games
6 Source: as of June 30, 2024
•Based on reported numbers until June
30 , 2024
• Sample includes projects with sales
and/or investments above SEK 40
millions (91 projects).
• ROI = Contribution / Investment
• Contribution = Gross Profit less
marketing expenses from release to
June 30, 2024
• Investment = Capitalized Development
Expenses including follow -on
investment
• Projects released by divested
companies are excluded. The average
ROI for games released by divested
companies during last 2 years is 1.0x
PROJECT ROI (CONTRIBUTION/INVESTMENT) DETAILS
SEK 25.0 bn
in net Sales
SEK 17.5 bn
in Contribution
Average title project data: Sales SEK 275million,
Contribution SEK 192 million and Investment SEK 92million
SEK 8.4 bn
in Total
Investments
2.1x in average
1.0x in break even
> 50

PC/Console Games
7 Source: as of June 30, 2024 | *Gross investments in PC/Console game development
INVESTMENTS AND COMPLETED GAME DEVELOPMENT* | SEK million
Investments and completed game development
545
1,671
531 501
803
1,120
780
718
336
1,114
1,405
1,693
1,633 1,672 1,690
1,492
1,382
929 2.0x
0.8x
3.2x 3.3x
2.1x
1.3x
1.9x 1.9x
2.8x
0.0x
0.5x 1.0x
1.5x
2.0x
2.5x 3 .0x
3 . 5x
4 .0x 0
200 400
600 800
1,000 1,200 1,400
1,600 1,800
Q1 Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
Value of Completed Game Development Investments in Game Devlopment Investments in Game Development as X times Completed Games

PC/Console Games
8 Source: as of June 30, 2024| Release slates can be subject to change, and will in this case be communicated through their respective publisher
Solid pipeline for FY 2024/25
Deep Silver | PLAION
Warhorse Studios THQ Nordic
Purple Lamp Arc Games
Heart Machine Milestone
Milestone
THQ Nordic
Alkim ia Interactive Tripwire
Tripwire Coffee Stain Publishing
Coffee Stain Studios THQ Nordic
Grimlore Games

307 312
209
36 36 34 34 33 31 30 29 27
0 10
20
30 40 50
60
70
80 90
100 0
50
100 150
200 250300 350
Q1 Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
MAU DAU
Mobile Games
9 Source: as of June 30, 2024
DAILY ACTIVE USERS & MONTHLY ACTIVE USERS NET SALES DRIVERS
Sudoku.com
Nonogram.com
Number Match
Blockudoku
Art Puzzle Jigsaw Puzzle
USER ACQUISITION COST | SEK million
NET SALES SEK million & ADJUSTED EBIT MARGIN
Pixel Art
million
Alien Invasion
ORGANIC GROWTH
PRO FORMA GROWTH
-12 %
– 8 %
Operative Groups: 2 | Internal Headcount: 1,093 | Internal Studios: 11
Solitaire
1,488 1,438 1,389
19%
29%
37%
0% 10%
20% 3 0% 4 0%
50% 60% 70% 0
500
1,000 1,500
2,000
Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
Net Sales Adjusted EBIT Margin, % Adjusted EBIT
883
641
502 59%
45% 36%
– 10 % 10%
3 0%
50%
70% 90%
110% 1 30 % 150% 0
250
500 750
1,000
Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
UAC, SEK m UAC, % of Net Sales
ADJ. EBIT
518

Today’s speaker
EMBRACER GROUP INTERIM REPORT Q1 FY 2024-25
DEPUTY COO
THOMAS KŒGLER

Tabletop Games
Source: as of June 30, 2024
NET SALES SEK million & ADJUSTED EBIT MARGIN
NEW RELEASES
STRONG PIPELINE
Announced multi-year
partnership with the LEGO Group
ORGANIC GROWTH
PRO FORMA GROWTH
-3 %
-3 %
Operative Groups: 1 | Internal Headcount: 2,404 | Internal Studios: 23
11
STAR WARS : UNLIMITED – SHADOWS OF THE GALAXY
2,665
3,184 3,039
17%
6% 8%
0% 5%
10% 15% 20% 25%
3 0% 35% 4 0%
45% 50% 0
500
1,000 1,500
2,000 2,5003,000 3,500
4,000 4,500
Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
Net Sales Adjusted EBIT Margin, %
ADJ. EBIT
248

12 Source: as of June 30, 2024
Entertainment & Services
NET SALES SEK million & ADJUSTED EBIT MARGIN
After the quarter Netflix premiered the fourth season of Dark Horse’s hit series The Umbrella Academy
Adjusted EBIT
-54 %
– 54 %
ORGANIC GROWTH
PRO FORMA GROWTH
Operative Groups: 3 | Internal Headcount: 827 | Internal Studios: 3
671
1,832
848
3%
1%
8%
4%
15% 16%
12%
4%
– 2%
– 4% – 2%
0% 2% 4% 6%
8% 10% 12% 14%
16% 18% 0
500
1,000 1,500
2,000 2,5003,000
Q1 Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
Net Sales Adjusted EBIT Margin, %
ADJ. EBIT
-21
W e are actively testing and prototyping
multiple new game concepts, exploring a wide range of immersive and authentic gameplay within the Middle -earth world
©2024 New Line Cinema. The War of the Rohirrimand The Lord of the Rings and the characters, places, events, and items therein are
trademarks or registered trademarks of Middle -earth Enterprises, LLC, used under license by New Line Cinema. All rights reserved.

144179
193
183184188 199
207
2019
2020 20212022 202320242025 2026
Market update
13 Source: as of June 30, 2024 | 1Newzoo| 2Circanaand Asmodee
PC 1
expected to grow by
+4 %
in 2024
Mobile 1
expected to grow by
+3 %
in 2024
Console 1
expected to decline by
-1 %
in 2024
USD b illion Forecast
2019 –
2026 CAGR 5% Source: Newzoo
Tabletop 2
grew by
+1.1 %
in 2024 (Jan -June)
GLOBAL VIDEO GAMES MARKET REVENUE FORECAST GLOBAL MARKET
COVID PEAK
2 %

Financial performance
2.

Financial development
FINANCIAL PERFORMANCE | Q1
Source: as of June 30, 2024
GROSS MARGIN DEVELOPMENT | SEK million DEVELOPMENT OF MARKETING EXPENSES | SEK million
DEVELOPMENT OF OPERATING EXPENSES, NET | SEK million ADJUSTED EBIT | SEK million
15
7,118
10,450
7,933
65% 63% 64%
50% 55% 60%
65%
70% 75% 80%
85% 90% 95% 100% 0
2,000 4,000
6,000 8,000
10,000 12,000 14,000
Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
Net Sales Gross Margin
883 641502
221
444
258
16%
10% 10%
0% 5%
10% 15% 20% 25%
3 0% 35% 4 0% 0
200 400
600 800
1,000 1,200 1,400
Q1 Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
Marketing, UAC – Mobile Marketing, Non UAC, Net of Income Marketing as % of Net Sales
1,645
2,751
2,430
23% 26% 31%
0% 10% 20%
3 0%
4 0% 50% 60%
70%
80% 90% 100% 0
500
1,000 1,500
2,000 2,5003,000
Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
Operating Expenses, net Operating Expenses, net, as % of sales
1,322
1,673
828 19% 22%
17%
10%
16% 17% 18% 16%
10%
0
500
1,000 1,500
2,000
Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1
FY 22/23 FY 23/24FY 24/25
Adjusted EBIT Adjusted EBIT %

Cash flow and net debt
FINANCIAL PERFORMANCE | Q1
Source: as of June 30, 2024
SEKmFY24/25
Q1 FY23/24
Q1 FY 24/25
Q1 TTM FY 23/24
Q1 TTM
Adjusted EBITDA 1,8692,69710,549 10,696
Cash Tax -83 -229 -831 -951
Other items –
354
-319 –
1,399 -698
Operating Cash flow 1,4322,149
8,3199,047
Net investment in intangible assets -1,051 -1,911 -6,149 -6,703
Net investment in tangible assets -72 -103 -279 -524
Net investment in financial assets -67 -223 -218 -252
Net Investment -1,190 -2,237 -6,646 -7,479
Free Cash Flow before WC 242-88
1,673 1,568
Change in working capital –
195 -511 429-1,413
Free Cash Flow after WC 47-599 2,102 155
Cash Flow from financing activities -2,810 120-2,097 2,760
Net cash flow from acquired/divested companies 2,705-392 241-9,444
Cash effect IAC costs -197 –865 –
Cash Flow for the period -255 -871 -619 –
6,529 SEKm June 30,
2024 June 30,
2023
Cash 3,2213,952
Current investments -17
Current liabilities to credit institutions –
15,420 -17,962
Current account credit facilities -89 –
88
Non -current liabilities to credit institutions
-1,987 -2,671
Net Debt ( -) / Net Cash (+)
-14,275
-16,752
• Significant improved free cash flow generation on a trailing
twelve months basis . Net investment in Q1 2024/25 is SEK
1.0 billion lower versus previous year due to effects from
divestments and the completed restructuring program.
• Cash flow from divested companies in the quarter is mainly
related to net proceed from divestment of Gearbox
Entertainment.
• Net debt not considering short term interest- bearing
receivable SEK 2.1 billion related to divestment of assets in
Saber Interactive.
16

Pro forma financials
FINANCIAL PERFORMANCE | Q1
17 Source: as of June 30, 2024 | 1includes corporate (headquarters) pro forma financials, figures above are adjusted for acquired and divested entities | 2EBITDAC = Adjusted EBITDA less Gross investment in intangible and tangible assets | 3working name
Asmodee“Coffee Stain & Friends 3”“Middle-earth & Friends 3” Embracer Group 1
SEK, billion (TTM) FY
22/23 FY
23/24 Q1 FY
24/25 FY
22/23 FY
23/24 Q1 FY
24/25 FY
22/23 FY
23/24 Q1 FY
24/25 FY
22/23 FY
23/24 Q1 FY
24/25
Net sales 13.414.8 14.610.5 10.710.6 12.314.2 12.136.2 39.737.4
Adjusted EBITDA 2.32.42.5 3.84.5 4.73.2 4.63.59.211.310.5
Adjusted EBIT 2.02.12.12.6 3.13.11.62.4 1.56.0 7.36.5
Capex -0.3-0.3-0.3-2.2-2.0 -1.7-3.3 -2.7-2.5 -5.8 -4.9-4.6
EBITDAC
2 2.0 2.22.2 1.62.5 2.9-0.1 1.91.03.3 6.35.9

Net debt and earnout
FINANCIAL PERFORMANCE | Q1
18
SEK, billion
“Coffee Stain & Friends
2” 1.0
“Middle -earth & Friends
2” 1.9
Asmodee Group 1.1
Cash obligation 4.0
Earnout obligation (cash)
Pro forma Net debt SEK, billion
Pro forma Net debt 30/6 -2024 14.3
Estimated cash inflow from divestments (2.1)
Estimated pro forma Net debt range
1 12.2
Pro forma Net debt
No. of shares Expected range
No. of outstanding shares 1,349 million
Earnout shares to be issued expected range 10 million
No. of shares –dilution 1,360 million
Earnout obligation (shares)
Source: as of June 30, 2024 | 2working name
1
whereof approx. SEK 9.4m related to the ringfenced
Asmodeestructure

Update for the spin – off processes
3.

 Unlocking value in the high-quality assets of Embracer Group, e nablingeach entity to better
focus on their core strategies and to drive long-term value creation
Spin -off processes proceed according to plan
STATUS UPDATE ON SPIN -OFFS
1Working name TBD
EMBRACER GROUP ”MIDDLE-EARTH & FRIENDS 1”
ASMODEE (PLANNED FOR FY 2024/25)
”COFFEE STAIN & FRIENDS 1” (PLANNED FOR CY 2025)
FIRST SPIN -OFF
SECOND SPIN -OFF
Reminder
of rationale
Illustrative timeline
2
Asmodee progress
Andrea Gasparini appointed Asmodee Group CFO
Introductory meetings held with
Nasdaq and Listing Auditor
Formal kick -off with Nasdaq
planned for September
Detailed time plan in place and all advisors appointed
Work on governance structures &
company policies progressing well
Asmodee CMD planned for Q3 FY 2024/25
2For illustrative purposes, not to scale
INFORMATION
BROCHURE
ASMODEE
CAPITAL MARKET DAY
Q3 FY 2024/25
EXTRAORDINARY
GENERAL MEETING
NASDAQ LISTING
COMMITTEE DECISION
PROSPECTUS
INTENDED LISTING
NASDAQ
STOCKHOLM
20

Until ~10:00 CEST
Q&A

Appendix
5.

AsmodeeGroup
PRO FORMA FINANCIALS | Q1 FY 2024/25
1EBITDAC = Adjusted EBITDA less Gross investment in intangible and tangible assets
Asmodee Group
FY 2023/24 FY 2024/25
SEK, billion Q1Q2 Q3Q4 Q1TTM
Net sales 3.24.14.4 3.13.014.6
Adjusted EBITDA 0.3 0.80.9 0.5 0.32.4
Adjusted EBIT 0.2 0.70.8 0.40.2 2.1
Capex -0.1 -0.1 -0.1 -0.1 -0.1 -0.3
EBITDAC 1 0.2 0.70.8 0.40.32.2
23

“Coffee Stain & Friends”
PRO FORMA FINANCIALS | Q1 FY 2024/25
1EBITDAC = Adjusted EBITDA less Gross investment in intangible and tangible assets
“Coffee Stain & Friends”
FY 2023/24FY 2024/25
SEK, billion Q1Q2 Q3Q4 Q1TTM
Net sales 2.43.0 2.82.5 2.410.7
Adjusted EBITDA 0.9 1.31.2 1.11.14.7
Adjusted EBIT 0.6 0.90.9 0.70.6 3.1
Capex -0.6 -0.5 -0.4 -0.4 -0.4 -1.8
EBITDAC 1 0.3 0.8 0.8 0.70.72.9
24

“Middle-earth & Friends”
PRO FORMA FINANCIALS | Q1 FY 2024/25
1EBITDAC = Adjusted EBITDA less Gross investment in intangible and tangible assets
“Middle- earth Enterprises & Friends”
FY 2023/24 FY 2024/25
SEK, billion Q1Q2 Q3Q4 Q1TTM
Net sales 4.23.14.2 2.7 2.112.1
Adjusted EBITDA 1.6 0.9 1.20.9 0.53.5
Adjusted EBIT 1.00.4 0.70.4 0.11.5
Capex -0.8 -0.7 -0.6 -0.6 -0.6 -2.5
EBITDAC 1 0.8 0.2 0.6 0.3-0.1 1.0
25

Embracer Group 1
PRO FORMA FINANCIALS | Q1 FY 2024/25
1includes corporate (headquarters) pro forma financials | 2EBITDAC = Adjusted EBITDA less Gross investment in intangible and tangible assets
Embracer Group 1
FY 2023/24FY 2024/25
SEK, billion Q1Q2 Q3Q4 Q1TTM
Net sales 9.810.2 11.48.37.637.4
Adjusted EBITDA 2.7 2.9 3.32.5 1.910.5
Adjusted EBIT 1.7 1.92.3 1.50.8 6.5
Capex -1.4 -1.3 -1.1 -1.1 -1.0 -4.6
EBITDAC 1 1.2 1.62.2 1.40.8 5.9
26