Interim Report: October–December 2019

Key insights

6 takeaways

01
Embracer Group’s core games business revenue grew by 51% in Q4 2019, driving a 54% year-over-year increase in operational EBIT to SEK 302 million.See it on page 1
02
Total assets rose to SEK 10.7 billion from SEK 6.4 billion in the prior-year period, reflecting an aggressive, capital-intensive acquisition strategy.See it on page 17
03
The company scaled to 26 internal studios and over 2,200 developers, bolstered by the acquisitions of Tarsier Studios and Voxler and the launch of Amplifier Game Invest.See it on page 2
04
A 19% decline in the partner publishing and film segment was offset by the strong performance of internal game development, resulting in total net sales of SEK 1,508.5 million.See it on page 4
05
The organization ended 2019 with a pipeline of 96 titles in production to support its long-term content generation strategy.See it on page 3
06
Net profit was reported at SEK 33.6 million, with overall operating profit impacted by increased amortization of intangible assets from recent acquisitions.See it on page 16

Summary

Embracer Group demonstrated significant operational expansion and financial growth during the final quarter of 2019, driven primarily by a strategic shift toward digital sales and the ownership of intellectual property. The company achieved a 51 percent revenue increase within its core games business, which successfully offset a 19 percent decline in the partner publishing and film segment caused by a lighter release schedule. This performance resulted in an operational EBIT of SEK 302 million, marking a 54 percent year-over-year increase and underscoring the efficacy of the group’s focus on internal development.

The organization’s growth strategy centered on aggressive scaling, ending the year with 26 internal studios and a workforce exceeding 2,200 developers. This expansion was supported by the acquisition of Tarsier Studios and Voxler, alongside the establishment of Amplifier Game Invest as a fourth operative group. By the close of the period, the company maintained a robust pipeline of 96 titles in production, signaling a commitment to long-term content generation. Total assets grew substantially to SEK 10.7 billion, up from SEK 6.4 billion in the prior-year period, reflecting the capital-intensive nature of this acquisition-led model.

Despite the rise in net sales to SEK 1,508.5 million, overall operating profit faced downward pressure from increased amortization of intangible assets related to these acquisitions. While the company reported a net profit of SEK 33.6 million, management acknowledged inherent risks associated with the integration of new studios, the retention of key personnel, and the unpredictable nature of development success. Nevertheless, the firm entered 2020 with a strong release schedule and a solidified operational footprint, positioning itself to leverage its expanded development capacity across the global gaming market.