Embracer Group Q2 FY19/20 Interim Report

The Embracer Group’s Q2 FY19/20 interim report highlights a period of significant financial growth and strategic expansion, characterized by a 47% year-over-year increase in net sales to SEK 1,260 million. Operational EBIT rose by 133% to SEK 241 million, driven primarily by strong performance in the digital back catalog, particularly the Metro franchise, and the successful console release of Wreckfest. The company’s profitability was further bolstered by an increased share of digital sales and a higher proportion of revenue derived from owned intellectual property.

The organization maintains a robust development pipeline, currently managing 86 active projects, including at least two AAA titles slated for release in FY20/21. Strategic growth remains a core focus, evidenced by the acquisitions of Milestone and Gunfire Games during the quarter. These investments align with a broader strategy of reinvesting operating cash flow into organic development and studio expansion. As of September 30, 2019, the group reported intangible assets of SEK 5,522 million, reflecting substantial ongoing investment in game development projects.

Geographically and operationally, the group operates through a decentralized model that grants commercial autonomy to its various business areas, including THQ Nordic, Deep Silver, Coffee Stain, and Koch Media. While the physical market faces long-term decline, the company anticipates stable performance in this segment, supported by the upcoming transition to next-generation consoles. Looking forward, the group is initiating a transition to IFRS reporting standards and continues to scout for potential acquisitions to complement its existing portfolio, though it maintains that its growth strategy is not solely dependent on M&A activity.