Information to the Shareholders of Embracer Group AB Regarding the Distribution of Shares in Coffee Stain Group AB

Embracer Group AB proposes to distribute its Coffee Stain Group shares to Embracer shareholders at an extraordinary general meeting on 3 November 2025. Each Embracer share (class A or B) would be exchanged for an equivalent Coffee Stain share of the same class, with no brokerage fee and no further action required beyond being a registered shareholder on the record date. The distribution is scheduled to precede Coffee Stain’s planned listing of its class B shares on Nasdaq First North Premier by the end of 2025.

The global gaming market is projected to grow 4.4 % year‑over‑year, reaching 3.6 billion players by 2025, with mobile dominating at roughly 83 % of the player base. PC, console and mobile segments are expected to grow at 4.1 %, 2.0 % and 2.7 % CAGR respectively from 2022 to 2025, while the rise of indie studios—operating with lean teams and lower budgets—continues to shape market dynamics. Coffee Stain’s community‑driven, early‑access model capitalises on these trends, maintaining a low‑cost, decentralised structure that has produced strong profitability and a portfolio where 90 % of sales derive from six long‑standing titles. ESG commitments, transparent governance and a focus on employee well‑being reinforce its competitive advantage.

Financially, Coffee Stain reported net sales of SEK 1.09 bn in FY 2023/24 and FY 2024/25, with EBIT declining from SEK 404 m to SEK 322 m and net profit falling from SEK 319 m to SEK 215 m. Operating cash flow rose modestly to SEK 847 m, while free cash flow after working capital increased to SEK 598 m. Adjusted EBIT and Cash EBIT margins of 50 % and 44 % respectively highlight core operating performance after excluding acquisition‑related items.

Governance will feature a six‑member board elected through 2026, with clear independence status and background details. Share capital is capped at SEK 25,000 (250 shares) split into class A (10 votes each) and class B (1 vote each), fully paid, freely transferable, and subject to preferential subscription rights for new issues. Embracer currently owns 100 % of the shares, holding over three million class B treasury shares that do not confer distribution rights.

The distribution will allocate one class A and one class B Coffee Stain share to each corresponding Embracer Group share, with no brokerage fee and no immediate Swedish tax liability under “Lex Asea.” As of the brochure date, Embracer holds 3 091 688 treasury class B shares that do not entitle holders to Coffee Stain shares, while the top ten shareholders collectively own 56.07 % of capital and 67.69 % of votes in Coffee Stain. The Board expects the split to unlock value by allowing Coffee Stain to focus on its core strengths, though risks include market reaction uncertainty and potential failure of the anticipated benefits.