FOURTH QUARTER, JANUARY-
> Net sales increased by 80% to
> Net sales of the Games business area increased by 119% to
> Net sales of
> EBITDA increased by 137% to
> Operational EBIT increased by 216% to
> Cash flow from operating activities amounted to
> Adjusted earnings per share was
> Organic growth in constant currency for the Games Business Area amounted to 85% in the quarter.
> Total game development projects increased 55% to 160 (103). Total headcount increased 103% to 6,325 (3,109) where total game developers increased 116% to 5,115 (2,365).
FULL YEAR, APRIL 2020-MARCH 2021 (Compared to APRIL 2019-MARCH 2020)
> Net sales increased by 72% to
> Net sales of the Games business area increased by 102% to
> Net sales of
> EBITDA increased by 119% to
> Operational EBIT increased by 170% to
> Cash flow from operating activities amounted to
> Adjusted earnings per share was
> Organic growth in constant currency for the Games Business Area amounted to 70%.
> Total game development projects increased 55% to 160 (103). Total headcount increased 103% to 6,325 (3,109) where total game developers increased 116% to 5,115 (2,365).
Key performance indicators, Group | Jan-Mar 2021 | Jan-Mar 2020 | ||
Net sales, SEK m | 2,404.2 | 1,339.1 | 9,024.2 | 5,249.4 |
EBITDA, SEK m | 1,172.5 | 495.2 | 3,985.3 | 1,821.3 |
Operational EBIT, SEK m | 903.2 | 286.0 | 2,870.8 | 1,033.0 |
Cash flow from operating activities, SEK m | 1,521.8 | 765.7 | 3,899.0 | 1,728.3 |
Free cash flow, SEK m | 860.5 | 275.7 | 1,684.8 | -0.1 |
Total investments in intangible assets, SEK m | 598.9 | 464.4 | 2,135.2 | 1,653.4 |
Total game development projects | 160 | 103 | 160 | 103 |
Total internal and external game developers | 5,115 | 2,365 | 5,115 | 2,365 |
Total headcount | 6,325 | 3,109 | 6,325 | 3,109 |
Sales growth, % | 80 | -18 | 72 | 3 |
EBITDA margin, % | 49 | 37 | 44 | 35 |
Operational EBIT margin, % | 38 | 21 | 32 | 20 |
In this report, all figures in brackets refer to the corresponding period of the previous year, unless otherwise stated.
CEO Comments
STABLE QUARTER WITH 85% ORGANIC GROWTH
The Group had another stable quarter. We are humbled to report record financial performance, both for the quarter and the financial year 2020/21. Our strategy to build a diverse business that stands on many revenue streams driven by a diverse portfolio of development is increasingly paying off.
The quarter was driven by the release of Valheim, selling more than 6.8 million copies during the period. This truly amazing game continues to find new players globally and we expect another 1.0-1.2 million copies to be sold before the close of the current quarter ending June. Group net sales increased by 80% to
Organic growth
Since the financial year 2016, when we completed the IPO, our adjusted earnings per share have increased 14x.
Organic growth is the first priority for all operating groups. Since the IPO, the Group has reinvested most of its underlying free cash flow into organic growth. We are pleased with the 70% strong organic growth delivered in the past financial year ending in March, primarily driven by numerous successful launches of high-quality games, but also thanks to a solid back-catalog. Notable sales performances of new releases during the year, other than Valheim, include close to 2 million copies of SnowRunner, more than 2 million of Spongebob Squarepants: Battle for Bikini Bottom Re-Hydrated and more than 1 million copies of Destroy All Humans!.
We are increasingly excited about the potential for organic growth in the coming years. In 2020/21, the Group invested
In the current financial year ending
During the past financial year, the actual fees paid to platform-holders (console and Steam) for digital sales alone are estimated to be a least 2x the actual costs spent on game development during the past fiscal year. We will continue to challenge these paradigms and pursue opportunities to reduce costs and increase the relative investment into content creation.
Reformation of Free Radical Design
We have more market-demand driven opportunity via innovative concepts, dormant IP's, licenses and other business opportunities than we have the development capability to execute. Thus, the ambition is to further expand our creative engine through increased headcount, both organically through scaling up existing studios and also by adding new talented studios to the Group. In this context, we are happy to announce the formation of a new studio, Free Radical Design, based in
We recently announced the addition of five development companies to the group;
We raised
In March, we completed the Nordics' largest ever direct share issue by an accelerated book building, raising
Interest among gaming entrepreneurs and creators to join the Embracer family is ever-growing and we have seen the most active quarter in this respect thus far. Our strategy to empower great people to make their own operative decisions has proven very attractive. We offer them access to a growing eco-system of independent resources while supporting them with a long-term mindset. The determination not to become a "corporate machine" is as strong as ever. Our philosophy is and will continue to be one that encourages founder creativity. During the quarter, we have engaged with more than 150 companies about joining the Group, including larger companies that could form additional operating groups and have a significant impact on the Group as a whole. Currently, across the Group, we are in more than 20 late-stage talks. These include several signed exclusive LOI's that would, if concluded, strengthen the operating groups and further improve the outlook of the Group. Acquisitions will be announced in due course when they occur. It is important that we stay prudent in our M&A strategy and not rush into closing a transaction before it is ready. In M&A as in game development, quality comes first.
Acquisition of Aspyr, Easybrain and Gearbox
In early April we had the pleasure to finally onboard Aspyr,
Upcoming - our first Statutory Sustainability Report
During this year, we have invested resources in gathering valid, qualitative and quantitative ESG-data from across
I am impressed and proud to see the dedicated work being performed on a daily basis across our global group, despite the on-going covid-19 pandemic. As countries and communities are slowly starting to look ahead towards normalization, many of our co-workers continued working from home during the past quarter. I want to sincerely thank each and every one for all the efforts that keep our business going. Let's hope that we can all meet again soon. To conclude, I would like to send my thanks to all of our shareholders, customers, colleagues and business partners for contributing to the prosperity and success of our growing family. We are all looking forward to our strongest and most busy year ever!
I wish you all a safe and relaxing upcoming holiday period.
Co-founder & CEO
For more information
For any questions on this report, please contact:
Johan Ekström, Group CFO, johan.ekstrom@embracer.com , +46 761 33 82 76
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