Simon Jönsson

Simon Jönsson asked about the strategic options for the company's significant net cash position, how that cash might be allocated between Fellowship and the spun-off Coffee Stain, and the potential for increased monetization of Coffee Stain's existing IPs.

Answer

CEO Lars Wingefors stated that the SEK 5.4 billion net cash position provides flexibility for acquisitions, divestments, or capital returns. He indicated that Coffee Stain would be spun off in a strong position to execute its strategy, implying it would be appropriately capitalized, with significant cash remaining for Fellowship and its shareholders. On monetization, he expressed a preference for focusing on growing IPs through new content, leaving specific communication to Coffee Stain's future management.

Simon Jönsson of ABG Sundal Collier questioned if the Coffee Stain & Friends and Middle-earth & Friends entities were of sufficient size for a successful spin-off, and if M&A might be considered. He also asked for an update on the game and royalty pipeline for the Lord of the Rings IP.

Answer

CEO Lars Wingefors asserted that both entities possess the necessary scale to be successful standalone public companies and reiterated the company's commitment to the current base plan without commenting on potential M&A. Regarding the Lord of the Rings IP, he stated that the upcoming year would not be a significant growth year and that substantial royalties from new Embracer-developed games are still many years away.

Inquired about the sufficient size of the two entities planned for the next spin-off (Coffee Stain & Friends and Middle-earth & Friends) for public listing, and about the upcoming pipeline and royalties for the Lord of the Rings IP.

Answer

The company believes both entities have the necessary scale to be successful public companies. Regarding the Lord of the Rings IP, the upcoming year is not expected to be a growth year, and significant royalties or new Embracer-developed games are still many years away.

Simon Jönsson questioned the strategic vision for the remaining mobile assets, CrazyLabs and DECA, following the Easybrain sale. He also asked for confirmation that the Coffee Stain & Friends spin-off is still the base case and whether any specific Q3 releases would negatively impact amortization.

Answer

CEO Lars Wingefors confirmed there is no change to the plan for CrazyLabs and DECA to continue growing their businesses. He also reiterated that the spin-off plan remains the base case, though the Easybrain deal prompts deeper thought on asset allocation. He clarified that Q3 amortization burdens are from past releases, not new ones, and highlighted the Legacy of Kain remaster as a potential positive EBIT contributor.