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Third party research

G5 Entertainment: Needs new games for growth to stabilise - ABG

G5 Entertainment

This is a third party research report and does not necessarily reflect our views or values

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Growth remains soft while we wait for new releases
EBIT ests. down, but we maintain the FCF ests.
13% FCF yield on '24e, SEK 215m net cash end of '23


Weaker sales behind Q4 miss, but FCF solid

Sales surprised slightly negatively in Q4 (-4% vs. ABGSCe, -3% vs. FactSet consensus), primarily due to weaker sales for older games that are put in harvest mode, while Hidden City grew slightly q-o-q and Sherlock was more stable. Because of its relatively fixed opex base, the lower sales drove a significant miss on adj. EBIT (-21% vs. ABGSCe, -21% vs. consensus). EBIT adjusted for a SEK 14m FX loss was SEK 25m compared to a FCF of SEK 26m before working capital changes. We have revised down '24e-'25e sales by 2-3% and adj. EBIT by 12-8% after the report.
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