2024-05-24 10:38:09 ET
Embracer Group AB (publ) (THQQF)
Q4 2024 Earnings Conference Call
May 23, 2024 03:00 AM ET
Company Participants
Lars Wingefors - CEO
Johan Ekstrom - CFO
Muge Bouillon - Deputy Group CFO
Conference Call Participants
Jacob Edler - Danske Bank
Nicolas Langlet - BNP
Erik Larsson - SEB
Nick Dempsey - Barclays
Martin Arnell - DNB Markets
Thomas Singlehurst - Citi
Presentation
Jacob Edler
Good morning, and welcome to Embracer's Q4 Report Presentation. My name is Jacob Edler. I'm an equity research analyst with Danske Bank in Stockholm, and I'll be moderating this Q4 presentation here today. We will start with a handful of presentations from Embracer's management team, including some reflections on the recently finalized restructuring program and some comments on the spin-off events that are yet to happen, so to speak.
And I think, with that word, I'll leave the stage to you, Lars. Thank you.
Lars Wingefors
Thank you, Jacob, and hello, and warm welcome to this Q4 presentation in Stockholm. Let's dive straight into the business highlights for the fourth quarter. So net sales came in close to SEK9 billion, which is a 5% decline year-over-year, mainly impacted by a weaker revenue within entertainment and services compared to last year.
Looking at the profitability, I'm glad to see that we are making more money, 56% in adjusted EBIT growth to SEK1.4 billion in the quarter, driven by an excellent performance within Mobile, solid performance within Tabletop and in line expectations within PC/Console. Worth noting this is despite a significant negative contribution from the divested companies to adjusted EBIT.
Looking at the free cash flow, came in at SEK500 million, which is a significant improvement over a flat cash flow last year despite, again, negative impacts from divested assets of SEK500 million EBITDA minus investments. Looking at the year -- full year, we have a double-digit growth, both in sales and adjusted EBIT to SEK42 billion and adjusted EBIT just over SEK7 billion in the year.
Worth noting that the pro forma sales, excluding Saber and Gearbox were SEK40 billion, with a higher adjusted EBIT of SEK7.3 billion and EBITDA minus CapEx of SEK6 billion, or EBITDAC of SEK6.3 billion. The full year cash flow were SEK1.5 billion despite a negative SEK2.2 billion EBITDAC contribution from the divested assets. End of March, we had our annual or the year end, and we're doing impairments.
And this morning, we reported a significant amount that I'm very respectful of, SEK20 billion impacting our reported EBIT in Q4, and it's important for all shareholders to understand what that is. SEK11.4 billion is relating to the divestments of Saber and Gearbox. SEK1 billion is relating to the finalized -- now finalized restructuring program in the fourth quarter.
And then, we have an annual impairment of all our goodwill across the group. And this year, we have decided to -- and which also resulted in a SEK6.7 billion impairment of as Moody, which equates to around 20% of the SEK34.4 billion that we paid in consideration 2021. The actual cash effect of all this is SEK265 million....
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Embracer Group AB (publ) (THQQF) Q4 2024 Earnings Call Transcript