Asmodee shines while owner Embracer Group continues large-scale cost-cutting

Tabletop gaming giant Asmodee’s corporate owner Embracer Group is planning more big divestments, amid its ongoing struggle to pay down huge debt taken on to fund a string of acquisitions in recent years.

Embracer admitted in its latest financial report today that it is unlikely to bring its net debt down to its SEK8bn ($760m) target by the end of March, despite shuttering a string of video games studios and projects and cutting more than 1,300 jobs in the past few months.

Embracer CEO Lars Wingefors said the company, which owns video game franchises including Tomb Raider, Deus Ex and Borderlands as well as Asmodee, still has “a few larger structured divestment processes ongoing” which could significantly reduce its net debt, but did not reveal what those divestments could be.

He added, “Our overruling principle is to always maximize shareholder value in any given situation.”

Asmodee remains Embracer’s biggest earner after overtaking its PC and Console Games segment for net sales last year. The tabletop arm has avoided large-scale job losses so far, with its internal headcount falling by 82 to 2,500 people since Embracer began restructuring last summer.

The tabletop gaming business increased its Q3 net sales 7% year-on-year to about $420m, while PC and Console saw net sales fall 5% to $321m in the same time period. Embracer’s company-wide net sales in Q3 fell by 4% to $1.14bn.

Asmodee was also the biggest driver of net sales for Embracer across the first nine months of the company’s financial year – reaching $1.1bn in net sales from April to December, up 16% compared to the same period in 2022.

Embracer said Asmodee’s growth was driven by trading card games, with board games recording slightly negative growth for the last quarter. It added that growth in Europe outperformed growth in the US, and said that across the calendar year the tabletop mass market had seen slightly positive growth, “confirming the industry’s resilience to a difficult macroeconomic environment”.

Wingefors said Embracer’s diversity, driven by a strong quarter for Asmodee, Middle-earth Enterprises and its mobile games businesses, had delivered a stable quarter for results as it approaches “the final stretch” of its restructuring program, which is “focused on both possible divestments, and consolidation”.

He praised Asmodee’s continued organic growth as a testament to its “diversified revenue base, solid underlying market and consistent execution”.

Wingefors said, “For the calendar year, the tabletop mass market saw a slight growth, confirming the industry’s resilience, with Asmodee’s strong position key to its robust growth.

“After strong profitability in the preceding quarter, the Adjusted EBIT margin of 19 % in Q3 was somewhat lower YoY, mainly due to a product mix more geared towards trading card games.

“Asmodee delivered strong free cash flow in the quarter, with a notable inventory reduction in the seasonally strongest quarter of the year.

“Preparations for the launch of Star Wars: Unlimited are progressing well with strong pre-orders. We all look forward to the release on March 8, 2024.”

Embracer bought Asmodee in a €2.75bn deal in 2021, as part of a years-long acquisition which also included the buyouts of Middle Earth Enterprises, Dark Horse Comics and a string of video games studios.

Asmodee distributes trading card games such as Pokemon, Magic, Yu-Gi-Oh!, as well as publishing board games under 22 subsidiaries including Catan Studio, Days of Wonder, Fantasy Flight Games, Lookout Games and Z-Men Games.

Its biggest IPs include Ticket to Ride, Catan, Splendor, 7 Wonders, Azul, Exploding Kittens, Dobble/Spot It! and Star Wars: Legion.


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