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G5 Entertainment Q3: Organic growth better than feared, slight relief - SEB

The Q3 report looks OK overall. Sales were SEK 327m (-9% y/y) and organic growth was -10%, 3pp better than our estimate of -13%. Cash flow was solid, operating cash flow of SEK 56m. Outlook of new games impacting top line later in 2024 was reiterated and is in line with our view. G5 store sales were up 125% y/y (in USD terms), supporting gross margin which grew 50bps y/y to reach 68.1% in Q3. We reiterate our mid-point equity value estimate of SEK 228.

The Q3 report looks OK overall. Sales were SEK 327m (-9% y/y) and organic growth was -10%, 3pp better than our estimate of -13%. Cash flow was solid, operating cash flow of SEK 56m. Outlook of new games impacting top line later in 2024 was reiterated and is in line with our view. G5 store sales were up 125% y/y (in USD terms), supporting gross margin which grew 50bps y/y to reach 68.1% in Q3. We reiterate our mid-point equity value estimate of SEK 228.
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