Embracer Group Q1 Interim Report: April–June 2021

Key insights

7 takeaways

01
Embracer Group reported a 66% increase in net sales to SEK 3,427 million and a 79% rise in operational EBIT to SEK 1,271 million for the quarter ending June 30, 2021.See it on page 1
02
The company recorded a net loss of SEK 606 million, driven by increased financial expenses and asset amortization related to recent acquisitions.See it on page 34
03
Growth was fueled by the release of Biomutant and strong performance from the back-catalog, including Valheim.See it on page 2
04
The group expanded to 136 studios and 247 owned franchises, supported by a pipeline of over 180 active projects and a workforce of more than 7,800 employees.See it on page 40
05
Key acquisitions during this period included Gearbox Entertainment and Easybrain, contributing to the company's aggressive inorganic growth strategy.See it on page 11
06
Embracer maintains a strong liquidity position of approximately SEK 17 billion to fund ongoing development and future earnout obligations.See it on page 8
07
The company has formalized a climate strategy aligned with the Paris Agreement, currently offsetting its operational carbon footprint by 1.5 times.See it on page 29

Summary

Embracer Group experienced a period of aggressive expansion and robust financial growth during the first quarter of the 2021 fiscal year, ending June 30, 2021. Net sales surged 66% to SEK 3,427 million, while operational EBIT climbed 79% to SEK 1,271 million. This performance was underpinned by the successful release of Biomutant and the sustained strength of the company’s back-catalog, including titles such as Valheim. Despite these gains, the group recorded a net loss of SEK 606 million, a result primarily attributed to increased financial expenses and the amortization of assets following a series of high-profile acquisitions.

The company’s strategy centers on rapid scaling through inorganic growth and heavy investment in internal development. By the end of the quarter, the organization had expanded to 136 studios and a portfolio of 247 owned franchises, supported by a workforce exceeding 7,800 individuals. Significant acquisitions, including Gearbox Entertainment, Easybrain, and several smaller studios, have bolstered the company’s development capacity, which now encompasses a pipeline of over 180 active projects. This expansion is further supported by a strong liquidity position of approximately SEK 17 billion, providing the necessary capital to sustain ongoing development investments and future earnout obligations.

Beyond financial and operational scaling, the group is transitioning toward a regulated market through IFRS conversion and formalizing its corporate responsibility initiatives. The company has implemented a climate strategy aligned with the Paris Agreement, successfully offsetting its operational carbon footprint by 1.5 times through sustainable energy investments. As global gaming demand begins to stabilize following the pandemic-induced surge of 2020, the group remains focused on operational integration and leveraging synergies across its diverse portfolio to maintain its competitive trajectory in the global interactive entertainment market.