Successful new releases and back catalogue drive est. beat
Embracer reported a strong Q1 report today, with adj. EBIT of SEK 712m, +65.2% vs. ABGSCe and +64.7% vs. consensus, growing 249.2% y-o-y. The good profitability was driven by a strong contribution from the Games segment, which contributed SEK 1,622m in revenues, or 78.4% of total sales, a new record, corresponding to organic y-o-y growth of ~71%. Approximately SEK 733m, or ~45%, of Games sales arose from new releases in the quarter, with a total development cost of SEK 253m, which we consider a strong return on investment compared to peers. The back catalogue as such contributed SEK 889m, or ~55%, driven by strong demand in Q2 aided by COVID-19 tailwinds.
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