Sales SEK 317m (-4% vs ABGSCe 328m and -3% vs cons 326m), Adj. EBIT 25m (-21% vs ABGSCe 31m and -21% vs cons 31m), Net profit 9m (-70% vs ABGSCe 29m and -77% vs cons 39m). Organic growth -12% (vs ABGSCe -10%). The slightly lower sales explain the entire miss on adj. EBIT as both gross margin and other opex was in line with expectations. Net profit was impacted negatively by 14m FX effect (we adjust for this in adj. EBIT). Management highlights that the big games trended positively at the end of the year, which could support growth in Q1. In addition, layoffs in Q4 (~7% of staff) is expected to have a positive effect on margins in 2024.
Preliminary estimate changes
We expect consensus to cut EBIT estimates by 5% on lower sales, offset by lower opex in 2024.
Final thoughts
Management said on the conference call that Twilight Lands have been well-received by players and look good on metrics. Given its new launch process, games are released with limited content, which means that G5 now is working on development more content for the game to drive further engagement. We expect that new content releases in H1'24 will be combined with more UA spending, potentially driving accelerating growth for the game.
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