THIRD QUARTER, OCTOBER-
> Net sales increased by 44% to
> Net sales of
> EBITDA increased by 70% to
> Operational EBIT increased by 100% 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 21% in the quarter.
> Total game development projects increased 56% to 150 (96). Total headcount increased 93% to 5,730 (2,970) where total game developers increased 92% to 4,325 (2,258).
Key performance indicators, Group | Oct-Dec 2020 | Oct-Dec 2019 | Apr-Dec 2020 | Apr-Dec 2019 | |
Net sales, SEK m | 2,168.1 | 1,508.5 | 6,620.0 | 3,910.3 | 5,249.4 |
EBITDA, SEK m | 878.7 | 518.4 | 2,812.9 | 1,326.1 | 1,821.3 |
Operational EBIT, SEK m | 603.1 | 302.1 | 1,967.6 | 747.0 | 1,033.0 |
Cash flow from operating activities, SEK m | 840.4 | 239.5 | 2,377.2 | 962.6 | 1,728.3 |
Free cash flow, SEK m | 309.1 | -207.3 | 824.4 | -275.8 | -0.1 |
Total investments in intangible assets, SEK m | 558 | 419 | 1,540 | 1,189 | 1,653 |
Total game development projects | 150 | 96 | 150 | 96 | 103 |
Total internal and external game developers | 4,325 | 2,258 | 4,325 | 2,258 | 2,365 |
Total headcount | 5,730 | 2,970 | 5,730 | 2,970 | 3,109 |
Sales growth, % | 44 | 9 | 69 | 12 | 3 |
EBITDA margin, % | 41 | 34 | 42 | 34 | 35 |
Operational EBIT margin, % | 28 | 20 | 30 | 19 | 20 |
CEO COMMENTS
STRONG ORGANIC GROWTH EXPECTED COMING YEARS
- The Company prepares for the next decades as public company by deciding on IFRS conversion and process to list on regulated market
We are pleased to announce another stable quarter driven particularly by our back catalogue's strong performance. Net sales increased by 44% to
As our operative groups are growing, we have continued to strengthen the parent company and implemented structured processes and management in order to ambitiously build
I am glad to announce that the Board of Directors has decided to convert to the reporting standard IFRS and thereby start the process towards being listed on a regulated market. The Board of Directors has already decided to establish an Audit Committee and a Remuneration Committee to be effective immediately. We estimate the process to become listed on a regulated market will take 18-36 months.
To constantly invest for long-term organic growth is a key strategic pillar across our operative groups. Reinvesting our underlying cashflow into scaling up existing studios, setting up new studios and making more great games. In the past quarter, investments in ongoing game development were a record
Our quality first approach means that we give the developers the required time or resources to release a quality product. Over time, we believe this approach in general makes the most sense for all stakeholders - the fans and gamers, developers and employees, our business partners and the shareholders. On
Looking ahead, we now expect the next financial year ending
During the current quarter, I am humbled to see the gamers' reception of the Early Access release on Steam of Valheim. The game is inspired by Viking culture, developed by our external partner Iron Gate and published by Coffee Stain. At the publication of this report, the game has already sold close to 3 million copies. The commercial impact follows Coffee Stain's typical partnership with external developers, including a minority ownership in the studio.
The M&A market is more vivid than ever and the number of entrepreneurs and creators wanting to join our group keeps growing. Across the group, we are having more dialogues than ever. Our ambition is to continue growing the number of mergers and acquisitions, as our ecosystem expands with additional operative groups where transactions are initiated and made. In my belief, a key factor to our success is that entrepreneurs who become part of Embracer maintain their creative and operative freedom while they can go faster and boost their growth by being docked into our growing eco-system and available resources.
Embracer just got started, and will over the coming decades continue the same strategy we started years ago. We are a truly independent platform for entrepreneurs and currently only represent around 1 percent of the global video games industry. Our competitors and industry peers are generally significantly larger companies.
Retaining and attracting the best talents are our most important mission to grow our group in the future. We are actively recruiting across most of our studios and grew headcount organically by 20% in 2020. A couple of weeks ago, we announced three transformative transactions when welcoming
I am grateful to see the willingness and engagement in maintaining our global group's business, despite the still on-going covid-19 pandemic. The working from home situation is challenging in many ways. It's a new challenge for our management to address and to find new creative solutions to handle the very best way possible to keep a work-life balance and prevent ambient stress. I want to sincerely thank each and every one for all the efforts that keep our business going, during the seemingly never-ending-pandemic. I am looking forward to when this is over, and we all can see each other again.
To conclude, I would like to send my thanks to all our colleagues, customers, business partners, and shareholders for contributing to our growing family's prosperity and success.
Co-founder & CEO
For more information, please contact:
Tel: +46 708 47 19 78
E-mail: lars.wingefors@embracer.com
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