Embracer Group is currently in the process of selling off some of its larger subsidiary game studios, based on the latest information.
In its interim report for the third quarter (October-December 2023), Embracer Group has revealed it is currently in the process of selling off some of its larger subsidiary game studios in an effort to strengthen its balance sheet and further reduce capex.
According to Embracer, the aforementioned larger structured divestment processes are currently in mature stages. Certain companies might initiate restructuring before any divestment is announced. The company’s overruling principle is to always maximize shareholder value in any given situation. It is unlikely to reach the restructuring program target of below SEK 8 billion in net debt by March 31. Certain divestments could significantly reduce net debt post March 31, 2024. The company stated that its group leverage target of net debt to Adjusted EBIT of 1.0x on a 12-month forward looking basis remains unchanged.
The company stated that the performance of its strongest franchises in PC/ Console is stable. In general, it sees a more selective consumer and reduced levels of platform content investment. Looking ahead, Q4 will be a quarter with higher activity, as per Embracer, with a range of new games including Alone in the Dark, Outcast – A New Beginning, SOUTH PARK: SNOW DAY!, Expeditions: A Mudrunner game, Tomb Raider I–III Remastered, as well as Deep Rock Galactic: Survivor and Lightyear Frontier.
Embracer stated that the key objectives of its ongoing restructuring program are to improve efficiency and cash generation, transforming Embracer into a leaner, stronger, more focused and cash self-sufficient company. While it has seen solid delivery across three out of our four segments throughout the year, the company mentioned that there is room for further improvements of its financial performance, primarily within PC/Console. In Q3, EBITDA less capex in the last twelve months was 3.0 billion on a group level.
