THQ Nordic is now officially Embracer Group
At the AGM yesterday in Karlstad THQ Nordic finally became Embracer Group which is the new name of the listed entity that soon are to be trade under the new ticker “EMBRACER”. The shares will be split 1:3 and a record date will be communicated in due time and as expected, a new 10% new equity issue mandate was granted adding additional SEK ~2.4 in M&A firepower. On M&A, the CEO once again said the group is having good dialogue with sizeable targets as well as smaller studios and that it would like to broaden its geographical footprint as well as be adding game niches were the group currently are not that strong in. Otherwise, the CEO held an overview presentation about was has been achieved over the past year and since IPO and the business strategy going forward which brought limited news to us. The new CFO clarified how working capital has been changing with the inclusion of Koch Media and that most cash flow is reinvested in the business to fuel future growth, hopefully will this end the recent discussion of potential bad receivables. Finally, when asked about recent releases like Wreckfest and Remnant the CEO said that both games are performing well (which also can be seen on official data and already reflected in our estimates) but stressed once again that the financial impact from Remnant will be small. Still, the success with Remnant highlight what quality studio Gunfire Games really are, an asset to be leverage for future growth. Buy TP SEK 275.
Contact analyst(s)
Analyst(s):
Lars-Ola Hellstrom, +46 8 402 5277, lars-ola.hellstrom@paretosec.com