Sales SEK 5,085m (16.8% vs ABGSC 4,355m and 20.8% vs cons 4,210m), Adj. EBIT SEK 1,119m (1.4% vs ABGSC 1,104m and 3.8% vs cons 1,078m). Pro forma organic growth in Games was +19%. This is a strong report with a significant beat on sales, mainly driven by strong performance in the mobile segment which reported pro-forma organic growth of 34% in the quarter – significantly higher than peers. Adj. EBIT margin was muted by significant investments in UA (57% of mobile sales) which should be viewed positively as it is growth accretive. IFRS-conversion and listing on Nasdaq is ahead of schedule. It also reiterates its guidance for 21/22 adj. EBIT and updates 22/23 and 23/24 adj. EBIT to include recent acquisitions. Mid-point of new guidance is 5% above consensus (see table below).
Expect consensus to raise adj. EBIT by 2-3%
We expect consensus to raise its ‘21/22e-‘23/24e adj. EBIT by 2-3% following the stellar growth in mobile. Sentiment has been weak leading up to the report, and we think it is very interesting to see Embracer reporting such strong growth numbers when most peers are struggling to find growth right now.
106 of 108 entrepreneurs still with the company
On a final note, it was very encouraging to see Embracer reporting that 106 of 108 entrepreneurs that have joined the company since the IPO 2016 are still part of the group, indicating that its strategy of empowering entrepreneurs seems to work. Conference call at 9:00 CET, link: https://tv.streamfabriken.com/embracer-group-q3-2021-2022
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