DnB Markets - Embracer Group (EMBRAC B) Embracer Group (Buy, TP: SEK45.00) - Cash flow improvement started

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DnB Markets

Martin Arnell

EUR 92.25 For Business Accounts Only

Embracer Group (Buy, TP: SEK45.00) - Cash flow improvement started

We reiterate our BUY and SEK45 target price following a Q2 report with higher cash flow, maintained guidance for 2024/25e net debt, healthy execution of the restructuring so far, and likely further sequential improvements ahead. We have left our underlying EBIT forecasts fairly intact, while we have increased our 2024/25e FCF to better reflect the company’s ambition to lower run-rate capex.

17/11/2023 1 EN

Underlying

Embracer Group

Embracer Group AB, formerly THQ Nordic AB is a Sweden-based company engaged in the computer games development. The Company focuses on acquiring, developing and publishing personal computer (PC) and console games for Xbox and PlayStation platforms. The Company's game portfolio consists of owned franchises intellectual property (IP) and published titles, including Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory and Wreckfest, among others. It offers games through various distribution channels, including digital platforms, such as Steam, PlayStation Store and Xbox Live, as well as gaming conventions, and global retailers, such as Walmart, GameStop and Amazon. The Company has around 18 internal game development studios and operates in more than 40 countries.

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SE0013121589 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.

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Analysts

Martin Arnell

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Embracer Group (Buy, TP: SEK45.00) - Cash flow improvement started

Embracer Group (Buy, TP: SEK38.00) - Stormy but in a better position

Embracer Group (Buy, TP: SEK43.00) - Closing in on FCF delivery

Danske Bank (Buy, TP: DKK235.00) - Distributions slow, but approaching

Orkla (Hold, TP: NOK81.00) - Signs of light

Seafood - Fat Trout Weekly

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