Regulatoriskt pressmeddelande

Embracer Group intends to contribute EUR 400m to Asmodee and presents Asmodee’s financial targets, dividend policy and net financial debt

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INSIDE INFORMATION: On 22 April 2024 Embracer Group AB (“Embracer Group”) announced its intention to list its subsidiary Asmodee Group AB (“Asmodee”) as a separate entity through a spin-off to the shareholders of Embracer Group (the “Distribution”). As part of Embracer Group’s previously announced divestment of Easybrain, Embracer Group intends to contribute EUR 400 million to Asmodee through an equity investment upon the closing of the divestment (the “Equity Investment”). The proceeds from the Equity Investment are intended to mainly be used to repay gross debt. In conjunction with Asmodee’s capital markets day being held today, on 19 November 2024, Embracer Group also announces Asmodee’s financial targets, which are aimed at driving profitable growth and maximizing shareholder value, Asmodee’s dividend policy and net financial debt position as of 30 September 2024, including Asmodee’s intention to refinance its EUR 900 million bank bridge through a debt capital markets transaction.

Financial targets
Ahead of the Distribution and the contemplated listing of the shares of Asmodee on Nasdaq Stockholm, the Board of Directors of Asmodee has resolved to adopt the following financial targets.

Growth: On average mid-single digit annual organic growth over the medium term[1], further enhanced by M&A.

Profitability: Achieve an Adjusted EBITDA margin[2] in excess of 18 percent in the medium term.

Leverage ratio: Target Leverage Ratio on net debt below 3.0x Adjusted EBITDA in the medium term and below 2.0x Adjusted EBITDA in the long term[3].

“Asmodee is well-positioned for the future and we are now setting financial targets to reflect our confidence in our growth trajectory. Our aim is to achieve mid-single-digit organic revenue growth over the medium term and an Adjusted EBITDA margin in excess of 18 percent in the medium term. With favorable market dynamics and our focus on innovation and operational efficiency, we are confident in our ability to enhance our products and deliver sustainable value to our stakeholders”, says Thomas Kœgler, CEO of Asmodee.

Dividend policy
Ahead of the Distribution and the listing of the Asmodee shares on Nasdaq Stockholm, the Board of Directors of Asmodee has also resolved to adopt the following dividend policy:

Dividend policy: Distribution of excess liquidity to shareholders after reaching long term Target Net Leverage Ratio below 2.0x Adjusted EBITDA.

Net financial debt
As disclosed in the below table, Asmodee’s net financial debt as of 30 September 2024 was EUR 893 million. In April 2024, a EUR 900 million bank bridge, provided by BNP PARIBAS, J.P. Morgan, Skandinaviska Enskilda Banken, Société Générale and Swedbank, was obtained by Asmodee, with funds distributed to Embracer Group through a dividend. Prior to the Distribution, Asmodee intends to refinance its current bank bridge through a debt capital markets transaction led by BNP PARIBAS and J.P. Morgan. The refinancing process will include public ratings being issued by rating agencies and will be marketed to institutional investors.

Following the closing of Embracer Group’s divestment of Easybrain, which is expected to take place in the first months of calendar year 2025, Embracer Group intends to make a EUR 400 million equity investment in Asmodee. Asmodee is expected to use EUR 300 million of this equity investment to repay gross debt and the remaining EUR 100 million to further strengthen its balance sheet ahead of the listing and allow it to resume its value accretive M&A strategy. On a pro-forma basis for the Equity Investment, Asmodee’s net financial debt amounted to EUR 493 million as of 30 September 2024, resulting in a net leverage ratio of 2.2x. [4]

EUR million	Sep-24
Cash & cash equivalents	88
Liabilities to credit institutions	(929)
Other financial liabilities	(1)
Lease liabilities	(51)
Net financial debt	(893)
Net leverage ratio [4] [5]	4.1x
Equity Investment	400
Pro forma net financial debt adjusted for the Equity Investment	(493)
Pro forma net leverage ratio adjusted for the Equity Investment [4] [6]	2.2x

Additional information

Before the end of December 2024, Embracer Group intends to call for an Extraordinary General Meeting (EGM) to resolve on the Distribution of Asmodee to the shareholders of Embracer Group.

The Distribution of Asmodee is expected to be completed during the first quarter of 2025 ending March. BNP PARIBAS, J.P. Morgan SE, Skandinaviska Enskilda Banken and Société Générale are acting as financial advisors on the Distribution.

[1] “Medium term” refers to 3-5 years.
[2] Adjusted EBITDA is an alternative performance measure applied by Asmodee and defined as EBITDA excluding specific items related to historical acquisitions and items affecting comparability.
[3] “Long term” refers to +5 years.
[4] Post IFRS-16 and based on LTM Adjusted EBITDA of EUR 220 million.
[5] Excluding M&A commitments of EUR 107 million. Including M&A commitments would imply a net leverage ratio of 4.5x.
[6] Excluding M&A commitments of EUR 107 million. Including M&A commitments would imply a net leverage ratio of 2.7x.

For more information, please contact:
Arman Teimouri
Head of Media & Public Affairs | Embracer
Phone: +46 793 33 05 60
Email: arman.teimouri@embracer.com

Mathilde Delmaire
Global Corporate Communications Director | Asmodee
Phone: +33 6 40 18 01 20
Email: m.delmaire@asmodee.com

About Embracer Group
Embracer Group is a global group of creative and entrepreneurial businesses in PC/console, mobile and tabletop games and other related media. The Group has an extensive catalog of over 900 owned or controlled franchises. With its head office based in Karlstad, Sweden, Embracer Group has a global presence through its ten operative groups: THQ Nordic, PLAION, Coffee Stain, Amplifier Game Invest, DECA Games, Easybrain, Asmodee, Dark Horse, Freemode and Crystal Dynamics – Eidos. The Group has 103 internal game development studios and is engaging more than 10,000 employees in more than 40 countries.

Embracer Group’s shares are publicly listed on Nasdaq Stockholm under the ticker EMBRAC B.

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About Asmodee
Asmodee is an entertainment leader specialized in tabletop games, committed to bringing people together through great games and amazing stories. Thanks to its global and passionate workforce of over 2,200 people, players around the world enjoy one of the largest tabletop game IP catalogs with CATAN, Ticket to Ride®, Dobble/Spot it!, Exploding Kittens and hundreds more across a variety of digital and physical platforms. With its operational headquarters in France, Asmodee operates across Europe, North America, South America, Asia and Oceania.

IMPORTANT INFORMATION
The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Embracer Group or Asmodee in any jurisdiction, neither from Embracer Group or Asmodee nor from someone else.

This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in Embracer Group or Asmodee. The financial advisers are acting for Embracer Group in connection with the transaction and no one else and will not be responsible to anyone other than Embracer Group for providing the protections afforded to its clients nor for giving advice in relation to the transaction or any other matter referred to herein.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into United States of America (including its territories and possessions), any State of United States including the District of Columbia, Australia, Belarus, Canada, Hong Kong, Japan, New Zealand, Russia, Singapore, Switzerland, South Africa, South Korea or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures in addition to those required by Swedish law, is prohibited, or otherwise is unlawful or cannot be made without the application of an exemption from such action. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

Forward-looking statements
This press release contains forward-looking statements that reflect Embracer Group’s intentions, beliefs, or current expectations about and targets for Embracer Group’s future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which Embracer Group operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, “could”, “aim” or “might”, or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Embracer Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Embracer Group does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither Embracer Group nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is not required by law or Nasdaq Nordic Main Market Rulebook for Issuers of Shares.

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