Sales of SEK 325m (-2.6% vs. ABGSCe and -2.5% vs. Infront cons.). Growth in constant currency was -6%, vs. ABGSCe of 0%. EBIT of SEK 57 (-16% vs. ABGSCe and -7% vs. Infront cons.). Hidden City continued to lose ground, as expected, and new generation games did not manage to cover the lost ground as we expected. New generation games grew 26% y-o-y in Q4’21 vs. +34% in Q3’21. Management guided in the report for continued negative pressure from Hidden City in coming quarters, which we think the market could react negatively to with the slower than expected growth in new gen games this quarter. Despite a high gross margin, EBIT was negatively affected by higher than expected opex (although UA spending was in line with expectations, in relation to sales) and D&A. Due to the higher gross margin y-o-y, EBIT still increased 14% y-o-y, despite the miss on consensus estimates.
Expect negative revisions to consensus estimates
We expect consensus ‘22e EBIT to come down 2-4% on the back of this report, due to weaker growth expectations and somewhat higher opex.
Solid performance in new generation games
On the positive side, G5 continued to see strong performance in new generation games, which grew 26% y-o-y. It is now the biggest contributor in the portfolio, with 52% of revenue (vs. 40% last year). Sherlock is the biggest contributor of that, contributing with 13% of total revenue. For comparison, the licensed game Hidden City now made up 33% of total revenue.
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