Embracer Group FY2024 Q2 Earnings Release

JULY –SEPTEMBER 2024
Q2
FY 2024/25
EMBRACER GROUP
INTERIM REPORT

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Q2 FY 2024/25
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2

Q2 Interim Report FY 2024/25
HIGHLIGHTS FROM Q2
3 Source: as of September 30, 2024
Net Sales Group
SEK
8,552m
Adjusted EBIT SEK
1,207m -21
%
YOY GROWTH
-33 %
YOY GROWTH
For PC/Console, we now expect lower
earnings this year partly due to delays
Asmodee showed solidearnings growth
YoY, softer quarter for our other segments
Highlights Q2 FY 2024/25
Free cash flow
SEK
– 473m ( SEK 387m)
Ongoing work to improve efficiency
and increase ROI
Q2 FY 2023/24
-14 % -14 %
PRO FORMA GROWTH
ORGANIC GROWTH
Asmodee spin
-off around the corner
with CMD on November 19

Operating segments
1.

34%
16%
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
Q2Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
Back Catalog Sales New Releases Sales Other Adjusted EBIT Margin, %
PC/Console Games
5 Source: as of September 30, 2024
NEW RELEASES
BACK CATALOG SALES | SEK million NET SALES REVENUE SPLIT SEK million & ADJUSTED EBIT MARGIN
NET SALES
2,121
TOP 10 BACK CATALOG
Operative Groups: 5 | Internal Headcount: 5, 205 | Internal Studios: 66
ADJ. EBIT
175
0
500
1,000 1,500
2,000 2,500
Q2Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
FY 22/23
FY 22/23

PROJECT ROI (CONTRIBUTION/INVESTMENT)
02 4
6 8
10 12 14
0 510 1520 25
Project ROI (Contribution / Investment)
Quarter since Release
PC/Console Games
6 Source: as of September 30, 2024
•Based on reported numbers until
September 30 , 2024
• Sample includes projects with sales
and/or investments above SEK 40
millions (94 projects).
• ROI = Contribution / Investment
• Contribution = Gross Profit less
marketing expenses from release to
September 30, 2024
• Investment = Capitalized Development
Expenses including follow -on
investment
• Projects released by divested
companies are excluded.
DETAILS
SEK 25.9 bn
in net Sales
SEK 18 .2bn
in Contribution
Average title project data: Sales SEK 276million,
Contribution SEK 194 million and Investment SEK 93 million
SEK 8.7bn
in Total
Investments
2.1x in average
1.0x in break even
> 50

PC/Console Games
7 Source: as of September 30, 2024 | *Gross investments in PC/Console game development
INVESTMENTS AND COMPLETED GAME DEVELOPMENT* | SEK million
Investments and completed game development
1,671
1,120
455
1,405
1,690
817
0.8x
3.2x 3.3x
2.1x
1.5x
1.9x 1.9x
2.8x
1.8x
– 0 . 4x
0.1x 0.6x
1.1x
1.6x 2.1x
2.6x 3 . 1x
3 . 6x
4 . 1x 0
200 400
600 800
1,000 1,200 1,400
1,600 1,800
Q2 Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
Value of Completed Game Development Investments in Game Devlopment Investments in Game Development as X times Completed Games
FY 22/23

PC/Console Games
8 Source: as of September 30, 2024 | Release slates can be subject to change, and will in this case be communicated through their respective publisher
Over 120 game development projects in the pipeline
Deep Silver | PLAION
Warhorse Studios
Q4
Aspyr
Crystal Dynamics
Q4
Arc Games
Heart Machine
TBA
THQ Nordic
Alkimia Interactive
TBA
Aspyr
Crystal Dynamics
Q3
THQ Nordic
Grimlore Games
TBA
Tripwire
Tripwire
TBA
Coffee Stain Publishing
Coffee Stain Studios | Fishlabs
TBA
CONSOLE

1,441 1,471 1,358
22% 25% 28%
0% 10%
20% 3 0% 4 0% 50%
60% 70% 80% 90%
100% 0
500
1,000 1,500
2,000
Q2Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
Net Sales Adjusted EBIT Margin, %
Mobile Games
9 Source: as of September 30, 2024
DAILY ACTIVE USERS & MONTHLY ACTIVE USERS NET SALES DRIVERS
Sudoku.com
Nonogram.com Blockudoku
USER ACQUISITION COST | SEK million
NET SALES SEK million & ADJUSTED EBIT MARGIN
Pixel Art
million
Alien Invasion
Operative Groups:
2 | Internal Headcount: 1,101 | Internal Studios: 11
Number Sums Adjusted EBIT
ADJ. EBIT
374
755 700
591
52% 48% 44%
0% 10%
20%
3 0% 4 0% 50% 60%
70% 80%
90% 100% 0
250
500 750
Q2 Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
UAC, SEK m UAC, % of Net Sales
FY 22/23
FY 22/23
300
253
214
36 31 27
0 10
20
30
40 50
60 70
80 90
100 0
50
100 150
200 250300 350
Q2 Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
MAU DAU
FY 22/23
Jigsaw Puzzle
Art Puzzle Number Match

Today’s speaker
EMBRACER GROUP INTERIM REPORT Q2 FY 2024/25CEO
THOMAS KŒGLER

3,247
4,070 3,826
14% 16% 18%
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
5,000
Q2Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
Net Sales Adjusted EBIT Margin, %
Tabletop Games
Source: as of September 30, 2024 | 1A game by Philippe des Pallières & Hervé Marly. Illustrations: Alexios Tjoyas © Asmodee Group. All rights reserved
NET SALES SEK million & ADJUSTED EBIT MARGIN
NEW RELEASES
STRONG PIPELINE
Operative Groups: 1 | Internal Headcount: 2,441 | Internal Studios: 23
11
STAR WARS : UNLIMITED – TWILIGHT OF THE REPUBLIC © & Lucasfilm Ltd
ADJ. EBIT
695
AFTER THE QUARTER AFTER THE QUARTER
FY 22/23
THE WEREWOLVES OF MILLER’S HOLLOW 1
Spin -off on
track for a
FY 2024/25 listing Capital
Markets Day 2024 on
November 19th Strengthening corporate
capabilities
with new hires
and EMT

784
1,381 1,247
1%
16%
2%
– 3% 2%
7% 12%
1 7% 22%
2 7% 0
500
1,000 1,500
2,000 2,5003,000
Q2 Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
Net Sales Adjusted EBIT Margin, %
12 Source: as of September 30, 2024
Entertainment & Services
NET SALES SEK million & ADJUSTED EBIT MARGIN
Adjusted EBIT
Operative Groups: 3 | Internal Headcount: 833 | Internal Studios: 3
ADJ. EBIT
29
FY 22/23
©2024 New Line Cinema. The War of the Rohirrim and 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.

Financial performance
2.

Financial development
FINANCIAL PERFORMANCE | Q2
Source: as of September 30, 2024
NET SALES & GROSS MARGIN DEVELOPMENT | SEK million DEVELOPMENT OF MARKETING EXPENSES | SEK million
DEVELOPMENT OF OPERATING EXPENSES, NET | SEK million ADJUSTED EBIT | SEK million
14
9,569
10,831
8,552
66% 63% 59%
0% 20%
4 0% 60% 80% 100%
120% 14 0% 160% 0
2,000 4,000
6,000 8,000
10,000 12,000 14,000
Q2Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
Net Sales Gross Margin %
755 700 591
523
431
295
13% 10% 10%
0% 5%
10%
15% 20% 25%
3 0% 35% 4 0% 0
200 400
600 800
1,000 1,200 1,400
Q2 Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
Marketing, UAC – Mobile Marketing, Non UAC, Net of Income Marketing as % of Net Sales
2,086
2,727
2,084
22% 25% 24%
0% 10%
20%
3 0% 4 0%
50% 60% 0
500
1,000 1,500
2,000 2,5003,000
Q2Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
Operating Expenses, net Operating Expenses, net, as % of sales
2,121
1,814
1,207 22%
17% 14%
0
500
1,000 1,500
2,000 2,5003,000
Q2Q3Q4 Q1Q2 Q3Q4 Q1Q2
FY 23/24 FY 24/25
Adjusted EBIT Adjusted EBIT %
FY 22/23
FY 22/23 FY 22/23
FY 22/23

Cash flow and net debt
FINANCIAL PERFORMANCE | Q2
Source: as of September 30, 2024
SEKmFY24/25
Q2 FY23/24
Q2 FY 24/25
Q2 TTM FY 23/24
Q2 TTM
Adjusted EBITDA 2,0552,923 9,68110,563
Cash Tax -416 -243 -1,004 -991
Other items –
317
-310 –
1,406 -846
Operating Cash flow 1,3222,370
7,2718,726
Net investment in intangible assets -945 -1,914 -5,180 -7,045
Net investment in tangible assets -46 -86 -239 -486
Net investment in financial assets -55 -65 -208 -322
Net Investment -1,046 -2,065 -5,627 -7,853
Free Cash Flow before WC 276305
1,644 873
Change in working capital –
749 82-402 605
Free Cash Flow after WC -473 3871,242 1,478
Cash Flow from financing activities -164 1,502 -3,763 1,063
Net cash flow from acquired/divested companies 1,633-121 1,999 -5,766
Cash effect IAC costs -114 -146 -837 -146
Cash Flow for the period 8821,623 -1,360 –
3,370 SEKm Sept. 30,
2024 Sept.
30,
2023
Cash 4,0525,520
Current investments -2
Current liabilities to credit institutions –
10,964 -1,396
Current account credit facilities -116 –
7
Non -current liabilities to credit institutions
-6,189 -18,743
Net Debt ( -) / Net Cash (+)
-13,217
-14,624
• Free cash flow after WC decreased in the quarter versus
previous year. This was mainly driven by lower Adjusted
EBITDA and normalized seasonal effects in AsmodeeWC
• Net investment in the quarter SEK 1 billion lower versus
previous year, due to effects from divestments and activities
made in the restructuring program
• Cash flow from divested companies in the quarter is mainly
related to net proceed from divestment of Saber Interactive
15

Easybrain Divestment
3.

Transaction highlights –Easybrain Divestment
EMBRACER GROUP DIVESTS EASYBRAIN TO MINICLIP FOR A CONSIDERATION OF USD 1.2 BILLION
17 Source: as of September 30, 2024
The buyer is Miniclip
 Purchase price on a cash and debt free basis
amounts to USD1.2 billion (SEK12.9 billion) to be
paid in cash at closing
 Expected net proceeds after transaction and other
costs amounts to SEK12.7 billion
 Strong value creation during past three years
 5,313,559 million B shares issued under clawback
will be released to satisfy earnout obligations
 Closing of the transaction expected to take place in
early 2025
Key components

Transforms Embracer’s financial position with
stronger position to drive value
 Enables the new entities to be separated with
strong balance sheets
 Miniclip will allow Easybrain to stay at the forefront
of the ad -driven mobile game industry
Transaction highlights –Easybrain Divestment
EMBRACER GROUP DIVESTS EASYBRAIN TO MINICLIP FOR A CONSIDERATION OF USD 1.2 BILLION
18 Source: as of September 30, 2024 | 2Adjusted EBITDAC = Adjusted EBITDA less Gross investment in intangible and tangible assets
Embracer net debt transforms:
SEK – 13.2 bn SEK -0.5 bn
 Pro forma net cash excluding Asmodeedebt
1:
SEK – 3.8 bn SEK +8.9 bn
 Financial performance FY 2023/24
Net sales | SEK 3,395 million
Adjusted EBIT |SEK 1,392 million
Adjusted EBITDAC
2| SEK 1,382 million
Financial performance YTD SepFY 2024/25
Net sales | SEK 1,576 million
Adjusted EBIT |SEK 628 million
Adjusted EBITDAC
2| SEK 636 million
Financial impact
1Embracer estimated pro forma net debt excluding the debt related to the
ringfenced Asmodee structure
Strategic rationale

Until ~10:00 CET
Q&A

Appendix
4.

Net debt and earnout post divestment of Easybrain
FINANCIAL PERFORMANCE | Q2
21
Net debt bridge SEK, billion
Reported Net debt 30/9 -2024 13.2
Estimated cash inflow from divestment of Easybrain (12.7)
Estimated pro forma Net debt
1 0.5
Net debt bridge
Source: as of September 30, 2024 | 2working names
1
whereof approx. SEK 9.4bn in debt is related
to the ringfenced Asmodee
structure
SEK, billion
“Coffee Stain & Friends
2” 0.8
“Middle -earth & Friends
2” 1.7
Asmodee Group 1.2
Cash obligation 3.7
Earnout obligation (cash –pro forma)
No. of shares Expected range
No. of outstanding shares 1,349 million
Earnout shares to be issued expected range 10 million
No. of shares –full dilution 1,359 million
Earnout obligation (shares –pro forma)

Pro forma financials excluding Easybrain
FINANCIAL PERFORMANCE | Q2
22 Source: as of September 30, 2024 | 1includes corporate (HQ) pro forma financials, figures above are adjusted for acquired and divested entities | 2Adjusted EBITDAC = Adjusted EBITDA less Gross investment in intangible and tangible assets | 3working names
Asmodee“Coffee Stain & Friends 3”“Middle-earth & Friends 3” Embracer Group 1
SEK, billion (TTM) FY
22/23 FY
23/24 Q2 FY
24/25 FY
22/23 FY
23/24 Q2 FY
24/25 FY
22/23 FY
23/24 Q2 FY
24/25 FY
22/23 FY
23/24 Q2 FY
24/25
Net sales 13.114.8 14.4 7.37.36.612.3 14.2 11.433.0 36.332.4
Adjusted EBITDA 2.32.42.5 2.8 3.12.8 3.24.6 3.18.2 9.88.2
Adjusted EBIT 2.02.12.2 1.61.8 1.31.62.4 1.25.0 6.0 4.4
Capex -0.3-0.3-0.3-2.2 -1.9-1.5-3.3 -2.7-2.4-5.8 -4.9 -4.2
EBITDAC
2 2.0 2.22.20.6 1.11.2-0.1 1.90.7 2.4 4.9 3.9