EG7 Q1 2024 Interim Report: Investor Presentation

Key insights

6 takeaways

01
EG7 aims to reach 3 billion SEK in net revenue and 1 billion SEK in Adjusted EBITDA by 2026 through a franchise-based model featuring two to four AA title releases annually.See it on page 13
02
Q1 2024 financial results included 382 MSEK in net revenue and 62 MSEK in Adjusted EBITDA, reflecting a quiet period due to a lack of major releases and normalized revenue from My Singing Monsters.See it on page 2
03
The company implemented cost-reduction measures at its Toadman and Petrol divisions, resulting in 45 staff layoffs and projected annual savings of 35 MSEK.See it on page 3
04
Management maintains its full-year financial targets, citing a back-loaded product schedule that includes the upcoming launch of MechWarrior 5: Clans.See it on page 5
05
EG7 reports a stable financial position characterized by excess liquidity, steady cash flows, and zero leverage to buffer against current industry volatility.See it on page 12
06
The company is currently navigating a transitional period marked by broader market weakness and industry-wide corrections.See it on page 6

Summary

The EG7 Q1 2024 interim report outlines a transitional period for the company, characterized by a quiet start to the fiscal year due to a lack of major content releases and the expected normalization of revenue from the My Singing Monsters franchise. Despite these factors, the company maintains its full-year financial targets, noting that the first quarter is not indicative of annual performance due to a back-loaded product release schedule, including the upcoming launch of MechWarrior 5: Clans.

Financial results for the quarter reflect the impact of broader market weakness, particularly within the company’s service-oriented business units. Net revenue reached 382 MSEK, with Adjusted EBITDA at 62 MSEK. To mitigate market pressures, the company implemented cost-reduction measures at its Toadman and Petrol divisions, resulting in a headcount reduction of 45 and estimated annual savings of 35 MSEK. The company maintains a stable financial foundation, characterized by excess liquidity, steady cash flows, and no leverage, which provides a buffer against current industry-wide volatility.

Looking toward 2026, the company is executing a long-term strategy to reach a scale of 3 billion SEK in net revenue and 1 billion SEK in Adjusted EBITDA. This growth plan relies on a transition to a franchise-based model with a predictable cadence of two to four middle-market AA title releases per year. While the current environment remains challenging—marked by industry-wide layoffs and market corrections—the company remains focused on its long-term objectives, utilizing its solid balance sheet to navigate the transition period while preparing for a heavier release slate in the latter half of 2024.