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Equity Research - 18 August 2021 20:51 CET

Embracer Group Reason: Post-results comment

Beat in challenging quarter, outlook intact Company sponsored research

 Q1 adj. EBIT SEK 1,217m, +12% vs. ABG, +5% vs. cons. Not rated  We raise adj. EBIT by 5-6% for ‘21/22e-‘23/24e

 EV/adj. EBIT of ~15x ‘21/22e, ~21% below 5-year avg. Estimate changes (%) 2021e 2022e 2023e Games grow ~10% organically in a challenging quarter Sales 2.2% 3.0% 3.0% Embracer reported Q1 sales of SEK 3,427m, +6% vs. ABGSCe and +3% EBIT (rep) 21.9% -10.8% 1,541.7% vs. Infront consensus for a total y-o-y growth of 65.6%. Sales were EPS (rep) 20.0% -9.2% 103.3% driven by the Games business area, which generated 84.6% of group Source: ABG Sundal Collier sales, a new record, and grew ~10% organically in a challenging quarter. 18/08/2021 Adj. EBIT was SEK 1,271m, +12% vs. ABGSCe and +5% vs. cons. Adj. Share price (SEK) 190.0 EPS was SEK 2.30 per share, growing 53.7% y-o-y. Fair value range (per share) 230-355

Quarterly back catalogue of SEK +2bn will drive margins IT, Sweden We raise our adj. EBIT estimates by 5-6% for 21/22e-23/24e, EMBRACB.ST/EMBRACB ST respectively. This is driven both by the Q1 beat as well as by our increasing our gross margin assumptions. The gross margin will fluctuate MCap (SEKm) 94,515 depending on the performance of the “low-margin” Partner Publishing MCap (EURm) 9,240 segment, but following the consolidation of Gearbox, Easybrain and Net debt (EURm) -1,088 , Embracer now has a quarterly back catalogue that appears to generate SEK +2bn with a high percentage of digital and owned titles No. of shares (m) 497 sales, leading to a strong gross margin. This is partly offset by an Free float (%) 64 increase in opex, e.g. Easybrain’s heavy UA investments, but still has a Av. daily volume (k) 4,591 net positive effect on adj. EBIT. In terms of Q2’21/22e, Embracer is facing tough comparables from 2020 while at the same time having a Next event Q2 report: 17 Nov small new game pipeline (SEK 225-275m dev. cost). We think this could lead to slightly negative growth in Q2 (we are at around ~9%), but this Performance

ramps up to +40% in Q3 and even more in Q4 (see page 7). We also 300

think (25-27 August) could feature a reveal of the AAA titles 250

slated for release in Q4. 200

150

EV/adj. EBIT below historical levels despite strong outlook 100 Embracer is now trading at a ‘21/22e EV/adj. EBIT of 14x on our 50 estimates, which is ~25% below the five-year historical average, 0 18 19 20 18 19 20 19 20 21 19 20 21 19 20 21 according to FactSet. This is despite Embracer having a new game 18 19 20

Oct Oct Oct Apr Apr Apr Jun Jun Jun Feb Feb Feb Dec Dec Dec Aug Aug Aug pipeline with a SEK ~3bn development cost (~4x more than last year) OMX STH PI which we think will drive ~30% organic growth in a year where peers are 1m 3m 12m struggling for growth and there is plenty of M&A headroom (SEK +20bn). Absolute (%) -15.3 -16.3 21.1 We also raise our SOTP fair value range to 230-355 per share. Source: FactSet Analyst(s): [email protected], +46 8 566 286 13 [email protected], +46 8 566 286 37 SEKm 2019 2020 2021e 2022e 2023e 2021e 2022e 2023e Sales 5,249 9,024 17,263 20,169 22,391 P/E (x) -49.1 -67.6 7,608.5 EBITDA 1,821 3,985 7,737 9,393 10,505 P/E adj (x) 17.1 14.2 12.4 EBITDA margin (%) 34.7 44.2 44.8 46.6 46.9 P/BVPS (x) 2.62 2.63 2.64 EBIT adj 1,032 2,912 6,019 7,073 8,050 EV/EBITDA (x) 10.9 8.6 7.3 EBIT adj margin (%) 19.7 32.3 34.9 35.1 35.9 EV/EBIT adj (x) 14.0 11.4 9.6 Pretax profit 408 296 -1,346 -1,039 339 EV/sales (x) 4.87 4.01 3.44 EPS rep 0.91 -0.23 -3.87 -2.81 0.02 ROE adj (%) 16.7 18.6 21.4 EPS adj 3.11 6.38 11.10 13.39 15.36 Dividend yield (%) 0 0 0 FCF yield (%) -2.1 4.2 4.8 Sales growth (%) -8.8 71.9 91.3 16.8 11.0 Lease adj. FCF yld (%) -2.1 4.2 4.8 EPS growth (%) high -125.1 -1,601.1 27.5 100.9 Net IB debt/EBITDA -1.4 -1.5 -1.8 Source: ABG Sundal Collier, Company data Lease adj. ND/EBITDA -0.7 -0.8 -1.0 Analyst(s): [email protected], +46 8 566 286 13 [email protected],Please refer to important+46 8 566 286 disclosures37 at the end of this report This research product is commissioned and paid for by the company covered in this report. As such, this report is deemed to constitute an acceptable minor non-monetary benefit (i.e. not investment research) as defined in MiFID II. Embracer Group

Company description Risks Embracer Group acquires, develops and publishes PC and Despite Embracer Group’s broad portfolio, there are risks console games for the global gaming market. Its core associated with larger title releases as they have a business model consists of acquiring established gaming relatively large impact on sales right after launch. brands and gradually improving them. Much of Embracer Moreover, disappointing releases or reviews could dent Group’s soul stems from entrepreneur, founder and CEO end-customer enthusiasm and hurt the company's Lars Wingefors, who at the age of 16 founded Nordic finances, especially during the launch period. Delays in Games, which we today associate with Embracer Group. planned and ongoing gaming projects could adversely The game changer came in 2013 when most of today’s affect the group’s profitability. Acquiring established but brand portfolio was acquired from THQ Inc’s insolvency. At temporarily underperforming gaming brands and gradually the start of 2018, the company acquired , which improving them increases the potential risk of performing focuses on game development and gives Embracer Group below market expectations. a larger publishing business.

Annual sales and adj. EBIT margin Quarterly sales and adj. EBIT margin

25,000 45.0 7,000 40.0 40.0 6,000 35.0 20,000 35.0 30.0 5,000 30.0 15,000 25.0 25.0 4,000 20.0 20.0 3,000 10,000 15.0 15.0 2,000 10.0 5,000 10.0 1,000 5.0 5.0 0 0.0 0 0.0

2015 2016 2017 2018 2019 2020 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 2021e 2022e 2023e Q3'21e Q4'21e Q1'22e Sales (LHS) Adj EBIT margin % (RHS) Sales (LHS) Adj EBIT margin % (RHS) Source: ABG Sundal Collier, Company data Source: ABG Sundal Collier, Company data EPS estimate changes, 2021e, SEK EPS estimate changes, 2022e, SEK

2 3

1 2 0 1 -1 0 -2 -1 -3

-4 -2

-5 -3

Jul-21 Jul-21 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Aug-21 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Aug-21 ABGSC FactSet Consensus Mean ABGSC FactSet Consensus Mean Source: ABG Sundal Collier, FactSet Source: ABG Sundal Collier, FactSet Lease adj. net debt and ND/EBITDA

0 0.0 -2,000 -4,000 -0.5 -6,000 -8,000 -1.0 -10,000 -12,000 -1.5 -14,000 -16,000 -2.0 -18,000 -20,000 -2.5

2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Net IB debt excl. leasing (LHS) Net IB debt/EBITDA lease adj. (RHS) Source: ABG Sundal Collier, Company data

18 August 2021 ABG Sundal Collier 2 Embracer Group

Deviations Q1’21/22 Deviations Q1’21/22 vs. ABGSCe vs. Infront consensus Deviation to estimates (SEKm) Actual Actual ABGSC Deviation Consensus Deviation Net sales Q1'20/21 Q1'21/22 Q1'21/22e SEKm % Q1'21/22e SEKm % Games - THQ Nordic 488 669 636 32.7 5.1% 684 -15 -2.2% Games - 613 638 521 116.6 22.4% 516 122 23.6% Games - Coffee Stain 173 191 224 -33.3 -14.9% 253 -62 -24.6% Games - 349 305 308 -3.1 -1.0% 384 -79 -20.6% Games - DECA Games 146 175 -29.4 -16.8% 170 -24 -14.4% Games - Gearbox 437 311 126.0 40.5% 336 101 30.1% Games - Easybrain 576 453 123.4 27.2% 453 123 27.2% Games Total 1,622 2,961 2,628 332.9 12.7% 2,796 165 5.9% Partner Publishing/Film 447 466 621 -155.3 -25.0% 550 -84 -15.3% Group 2,069 3,427 3,249 177.6 5.5% 3,324 103 3.1%

COGS -760 -813 -1,305 492.0 - Gross profit 1,309 2,614 1,944 669.6 34.4% 2,191 423 19.3%

Operating costs -656 -1,639 -1,122 -517.2 - EBITDA 965 1,532 1,466 66.7 4.6% 1,541 -9 -0.6%

Depreciation & amortization -746 -2,057 -2,214 157.5 -

Adj. EBIT 712 1,271 1,137 134.7 11.9% 1,217 54 4.5%

EBIT 219 -524 -748 224.2 - -445 -79 -

Net financials -36 101 -6 107.4 - Taxes -93 -183 -189 5.6 n.a.

Adj. Net profit 560 1,143 915 228.4 25.0%

Net profit 90 -606 -943 337.2 -

EPS Adj. (SEK) 1.50 2.31 1.87 0.44 23.4% 2.04 0.27 13.2% EPS Basic (SEK) 0.24 -1.22 -1.93 0.7 - -1.14 -0.1 - Net sales grow th y-o-y Q1'20/21 Q1'21/22 Q1'21/22 Percentage point Q1'21/22e Percentage point Games - THQ Nordic 163.7% 37.1% 30.4% 6.7 pp 40.2% -3.1 pp Games - Deep Silver 64.3% 4.1% -15.0% 19.0 pp -15.8% 19.8 pp Games - Coffee Stain 107.8% 10.6% 29.9% -19.3 pp 46.7% -36.1 pp Games - Saber Interactive n.a. -12.7% -11.8% n.a. 46.7% n.a. Games - DECA Games n.a. n.a. n.a. n.a. n.a. n.a. Games Total 153.1% 82.5% 62.0% 20.5 pp 72.4% 10.2 pp Partner Publishing/Film -10.9% 4.3% 39.1% -34.8 pp 23.2% -18.9 pp Group 81.1% 65.6% 57.1% 8.6 pp 60.7% 5.0 pp Organic 50.6% 8.9% 19.5% -10.6 pp

Margins Q1'20/21 Q1'21/22 Q1'21/22 Percentage point Q1'21/22e Percentage point Gross margin 63.3% 76.3% 59.8% 16.4 pp 65.9% 10.4 pp EBITDA margin 46.7% 44.7% 45.1% -0.4 pp 46.4% -1.6 pp Adj. EBIT margin 34.4% 37.1% 35.0% 2.1 pp 36.6% 0.5 pp EBIT margin 10.6% -15.3% -23.0% 7.7 pp -13.4% -1.9 pp Adj. Net margin 27.1% 33.4% 28.2% 5.2 pp Net margin 4.4% -17.7% -29.0% 11.3 pp Source: ABG Sundal Collier, Infront, company data

18 August 2021 ABG Sundal Collier 3 Embracer Group

Estimate changes ABGSC estimate changes 21/22e-23/24e, (SEKm) Estimate changes (SEKm) Old forecast New forecast Change Net sales 2021/22e 2022/23e 2023/24e 2021/22e 2022/23e 2023/24e 2021/22e 2022/23e 2023/24e Games THQ Nordic 2,342 2,588 2,842 2,319 2,562 2,813 -1.0% -1.0% -1.0% Games Deep Silver 3,839 4,410 4,904 3,942 4,525 5,032 2.7% 2.6% 2.6% Games Coffee Stain 1,018 1,171 1,346 950 1,092 1,256 -6.7% -6.7% -6.7% Games Saber Interactive 1,697 1,945 2,140 1,657 2,068 2,275 -2.4% 6.3% 6.3% Games DECA Games 1,404 2,360 2,832 1,374 2,330 2,796 -2.1% -1.2% -1.2% Games Gearbox 1,569 1,749 1,951 1,804 2,011 2,243 15.0% 15.0% 15.0% Games Easybrain 1,991 2,230 2,498 2,274 2,547 2,853 14.2% 14.2% 14.2% Games Total 13,860 16,454 18,512 14,320 17,137 19,268 3.3% 4.2% 4.1% % of total 82.0% 84.0% 85.2% 82.9% 85.0% 86.1% 0.9 pp 1.0 pp 0.9 pp Partner Publishing/Film 3,040 3,131 3,225 2,944 3,032 3,123 -3.2% -3.2% -3.2% Group 16,900 19,585 21,737 17,263 20,169 22,391 2.2% 3.0% 3.0%

COGS -6,704 -7,420 -8,195 -5,167 -5,989 -6,572 -22.9% -19.3% -19.8% Gross profit 10,196 12,165 13,543 12,096 14,180 15,819 18.6% 16.6% 16.8%

Capitalized costs & other income 3,290 3,877 4,303 3,251 4,086 4,537 -1.2% 5.4% 5.4% Operating costs -5,991 -7,051 -7,825 -7,611 -8,874 -9,852 27.0% 25.9% 25.9%

EBITDA 7,496 8,992 10,021 7,737 9,393 10,505 3.2% 4.5% 4.8%

Depreciation & amortization -9,327 -9,912 -10,046 -9,167 -10,412 -10,146 -1.7% 5.0% 1.0% Operational -1,786 -2,320 -2,455 -1,718 -2,320 -2,455 -3.8% 0.0% 0.0% Non-operational -7,541 -7,592 -7,591 -7,449 -8,092 -7,691 -1.2% 6.6% 1.3%

Adj. EBIT 5,710 6,672 7,566 6,019 7,073 8,050 5.4% 6.0% 6.4%

EBIT -1,831 -920 -25 -1,430 -1,019 359 - - -

Net financials -24 -20 -20 83 -20 -20 -447.5% 0.0% 0.0% Taxes -522 -329 -326 -580 -364 -326 11.0% 10.6% 0.0%

Adj. Net profit 5,055 6,205 7,102 5,413 6,571 7,585 7.1% 5.9% 6.8%

Net profit -2,378 -1,269 -371 -1,926 -1,403 13 - - -

EPS Adj. (SEK) 10.29 12.58 14.34 10.88 13.15 15.12 5.7% 4.6% 5.5% EPS Basic (SEK) -4.84 -2.57 -0.75 -3.87 -2.81 0.02 - - - Net sales grow th y-o-y 2021/22e 2022/23e 2022/23e 2021/22e 2022/23e 2022/23e 2021/22e 2022/23e 2022/23e Games THQ Nordic 30.9% 10.5% 9.8% 29.6% 10.5% 9.8% -1.3 pp 0.0 pp 0.0 pp Games Deep Silver 84.5% 14.9% 11.2% 89.4% 14.8% 11.2% 4.9 pp -0.1 pp 0.0 pp Games Coffee Stain -13.9% 15.0% 15.0% -19.7% 15.0% 15.0% -5.8 pp 0.0 pp 0.0 pp Games Saber Interactive 43.1% 14.6% 10.0% 39.7% 24.8% 10.0% -3.4 pp 10.2 pp 0.0 pp Games DECA Games 538.0% 68.1% 20.0% 524.6% 69.6% 20.0% -13.4 pp 1.5 pp 0.0 pp Games Gearbox 13.4% 11.5% 11.5% 30.4% 11.5% 11.5% 17.0 pp 0.0 pp 0.0 pp Games Easybrain 6.4% 12.0% 12.0% 21.5% 12.0% 12.0% 15.1 pp 0.0 pp 0.0 pp Games Total 114.9% 18.7% 12.5% 122.1% 19.7% 12.4% 7.1 pp 1.0 pp -0.1 pp Partner Publishing/Film 18.0% 3.0% 3.0% 14.3% 3.0% 3.0% -3.7 pp 0.0 pp 0.0 pp Group 87.3% 15.9% 11.0% 91.3% 16.8% 11.0% 4.0 pp 0.9 pp 0.0 pp Organic 33.9% 9.3% 11.0% 37.0% 10.4% 11.0% 3.1 pp 1.1 pp 0.0 pp

Margins 2021/22e 2022/23e 2022/23e 2021/22e 2022/23e 2022/23e 2021/22e 2022/23e 2022/23e Gross margin 60.3% 62.1% 62.3% 70.1% 70.3% 70.6% 9.7 pp 8.2 pp 8.3 pp EBITDA margin 44.4% 45.9% 46.1% 44.8% 46.6% 46.9% 0.5 pp 0.7 pp 0.8 pp Adj. EBIT margin 33.8% 34.1% 34.8% 34.9% 35.1% 35.9% 1.1 pp 1.0 pp 1.1 pp EBIT margin -10.8% -4.7% -0.1% -8.3% -5.1% 1.6% 2.6 pp -0.4 pp 1.7 pp Adj. Net margin 29.9% 31.7% 32.7% 31.4% 32.6% 33.9% 1.4 pp 0.9 pp 1.2 pp Net margin -14.1% -6.5% -1.7% -11.2% -7.0% 0.1% 2.9 pp -0.5 pp 1.8 pp Source: ABG Sundal Collier, company data

18 August 2021 ABG Sundal Collier 4 Embracer Group

Pipeline estimates The key to understanding the financial estimates for Embracer lies in evaluating the company’s video game pipeline. This is true for its video game development and publishing segments and for its Partner Publishing division, which in turn is based on its partners’ – Square Enix and Capcom, to name two – video game pipelines. Estimated release dates for select titles Pipeline estimates - ABGSC

Apr-Jun '20 Jul-Sep '20 Oct-Dec '20 Jan-Mar '21 Apr-Jun '21 Jul-Sep '21 Oct-Dec '21 Jan-Mar '22 Apr '22-Mar '24 Games Segment Q1'20/21 Q2'20/21 Q3'20/21 Q4'20/21 Q1'21/22 Q2'21/22e Q3'21/22e Q4'21/22e 22/23e - 23/24e MotoGP20 Deep Silver X : The Third Remastered (Epic) Deep Silver X Outw ard - The Soroboreans (DLC) Deep Silver X Iron Harvest Deep Silver X Wasteland 3 Deep Silver X Windbound Deep Silver X Pathfinder: Kingmaker (Console) Deep Silver X Ride 4 Deep Silver X MXGP 2020 Deep Silver X Shenmue III () Deep Silver X Monster Energy Super Cross 4 Deep Silver X Exodus Enhanced edition (PC) Deep Silver X Metro Exodus Enhanced edition (Next gen consoles) Deep Silver X Saints Row : The Third Remastered (Steam release) Deep Silver X Maneater (Sw itch) Deep Silver X Hot Wheels Unleashed Deep Silver X Kings Bounty II Deep Silver X Cid The Snail Deep Silver X X (Remastered) Deep Silver X X (Remastered) Deep Silver X X Chorus Deep Silver X After the Fall Deep Silver X Evil West World () Deep Silver X X Shadow Warrior 3 Deep Silver X X 2 Deep Silver X Saints Row V Deep Silver X SpongeBob SquarePants: Battle for Bikini Bottom THQ Nordic X Desperados 3 THQ Nordic X Destroy All Humans! THQ Nordic X Remnant: From the Ashes - Sw amps of Corsus (DLC) THQ Nordic X Remnant: From the Ashes - Subject 2923 (DLC) THQ Nordic X Kingdoms of Amalur: Re-Reckoning THQ Nordic X Aquanox Deep Descent THQ Nordic X Chronos: Before the Ashes THQ Nordic X Lets Sing 2021 THQ Nordic X SpongeBob SquarePants: Battle for Bikini Bottom (Mobile) THQ Nordic X : Legendary Edition THQ Nordic X Kingdoms of Amalur: Re-Reckoning (Nintendo Sw itch) THQ Nordic X Little Nightmares II (published by Bandai) THQ Nordic X Monster Jam: Steel Titans 2 THQ Nordic X THQ Nordic X (PS5) THQ Nordic X Destroy All Humans! (Sw itch) THQ Nordic X Expeditions: Rome THQ Nordic X X Kingsdoms of Amalur: Re-Reckoning Fatesw orn (Exp Pack) THQ Nordic X X Elex 2 THQ Nordic X X Titan Quest 2 (Unconfirmed) THQ Nordic X X Satisfactory (Steam release) Coffee Stain X Huntdow n Coffee Stain X Deep Rock Galactic (Full release) Coffee Stain X Satisfactory (Update 4) Coffee Stain X Valheim (Early Access) Coffee Stain X Valheim content drop (ABGSCe) Coffee Stain X Midnight Ghost Hunt Coffee Stain X X Songs of Conquest Coffee Stain X X World War Z (Game of the Year Edition) Saber Interactive X Snow Runner Saber Interactive X WWE Battlegrounds Saber Interactive X Redout: Space Assault Saber Interactive X Pinball VR Saber Interactive X Snow Runner (Steam release) Saber Interactive X Snow Runner (Sw itch) Saber Interactive X World War Z: Aftermath (Exp Pack) Saber Interactive X X Insurgency: Sandstorm Saber Interactive X X Party Saber Interactive X X The Evil Dead Saber Interactive X Star Wars Knights of the Old Republic 3 (ABGSC Projection) Saber Interactive X Tiny Tina's Wonderlands Gearbox Softw are X Homew orld 3 Gearbox Softw are X

Partner Publishing Segment Q1'20/21 Q2'20/21 Q3'20/21 Q4'20/21 Q1'21/22 Q2'21/22e Q3'21/22e Q4'21/22e 22/23e - 23/24e Final Fantasy VII Remake Partner Publishing X Marvel's Avengers (PS4 & ) Partner Publishing X Marvel's Avengers (PS5 & Xbox Series X) Partner Publishing X Resident Evil 3 Remake Partner Publishing X F1 2020 Partner Publishing X 5 Strikers Partner Publishing X Resident Evil Village Partner Publishing X WW2: Vanguard (ABGSCe) Partner Publishing X 2 Partner Publishing X Stalker 2: Heart of Chernobyl Partner Publishing X Source: ABG Sundal Collier, company data

18 August 2021 ABG Sundal Collier 5 Embracer Group

Steam developments We estimate that ~40% of Embracer’s Games revenues stem from the sale of products for PC, where a majority (we think ~75%) is generated through the digital distribution platform Steam. As such, measuring the progression of Steam, and Embracer’s market share on Steam can reveal useful data regarding Embracer’s performance.

Steam concurrent players In terms of daily concurrent player peaks on Steam, we find that new records were set in Q2’20 with ~24.5m players due to the initial COVID-19 lockdown. We are now seeing a slowdown similar to the summer months of 2020, but note that the 2021 troughs are still ~20% higher than in 2020, pointing to the long-term increase in the player base on Steam.

Steam concurrent players 30,000,000

24,535,923 24,399,247 25,000,000

14,296,723 20,000,000

15,000,000

10,000,000 8,171,592 6,927,263 4,493,658

5,000,000

0

Steam - Concurrent players Twitch - Concurrent viewers

Source: ABG Sundal Collier, SteamDB, company data

Embracer’s market share on Steam In the graph below, we highlight Embracer’s share of revenues generated on Steam.

Embracer’s market share on Steam

14.0 1800.0%

12 1600.0% 12.0 11.4 1400.0%

10.0 1200.0%

1000.0% 8.0 6.9 800.0%

6.0 600.0% 4.6 4.1 4.2 4.0 400.0% 3.2 3.4 3.2 3.4 3 2.9 2.5 2.5 2.2 200.0% 2.1 2.0 2.1 1.9 1.9 1.6 1.7 1.8 1.8 2.0 1.5 1.4 1.4 1.4 1.3 1.4 1.5 0.9 0.0% 0.7 0.6 0.5 0.7 0.6 0.5 0.7

0.0 -200.0%

Marketplace share Average Growth

Source: ABG Sundal Collier, TIN Analytics, company data

18 August 2021 ABG Sundal Collier 6 Embracer Group

Quarterly overview Quarterly overview, Q1’17-Q1’21/22e (SEKm) Quarterly overview (SEKm) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q5'18 Q1'19/20 Q2'19/20 Q3'19/20 Q4'19/20 Q1'20/21 Q2'20/21 Q3'20/21 Q4'20/21 Q1'21/22 Q2'21/22e Q3'21/22e Q4'21/22e Games - THQ Nordic 82 86 85 255 135 146 124 352 143 185 330 333 307 488 567 380 355 669 423 492 735 Games - Deep Silver 0 0 0 0 257 338 252 187 794 373 442 467 515 613 507 497 465 638 502 801 2,001 Games - Coffee Stain 0 0 0 0 0 0 0 14 98 83 45 36 82 173 130 99 781 191 202 262 295 Games - Saber Interactive 0 0 0 0 0 0 0 0 0 0 0 0 0 349 259 307 271 305 305 410 637 Games - DECA Games 0 0 0 0 0 0 0 0 0 0 0 0 0 0 33 73 104 146 162 533 533 Games - Gearbox 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 437 420 472 475 Games - Easybrain 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 576 534 581 583 Partner Publishing/Film 0 0 0 0 242 354 897 828 596 501 444 673 436 447 888 813 429 466 510 1,121 847 Net Sales 82 86 85 255 633 837 1,273 1,381 1,631 1,142 1,260 1,509 1,339 2,069 2,383 2,168 2,404 3,427 3,058 4,672 6,106

Capitalized w ork 13 14 19 33 58 93 102 106 116 131 177 221 224 248 273 373 398 469 610 687 705 Other operating income 1 2 -3 3 34 29 64 90 116 45 67 72 122 65 106 59 100 88 153 234 305 Total operating income 96 102 101 291 725 960 1,439 1,576 1,862 1,318 1,503 1,801 1,685 2,381 2,762 2,600 2,902 3,984 3,821 5,593 7,117

COGS -25 -24 -30 -69 -320 -466 -895 -838 -741 -528 -635 -747 -666 -760 -1,034 -861 -963 -813 -841 -1,618 -1,895 Gross profit 57 61 55 186 313 371 377 542 889 614 625 762 673 1,309 1,349 1,307 1,441 2,614 2,217 3,054 4,211

Opex -29 -38 -37 -65 -179 -287 -329 -412 -503 -401 -450 -536 -524 -656 -759 -860 -766 -1,639 -1,565 -2,056 -2,351 Of w hich Other external expenses -11 -15 -16 -33 -75 -120 -158 -224 -291 -178 -192 -231 -183 -292 -360 -409 -304 -788 -703 -1,075 -1,343 Personnel expenses -18 -21 -22 -33 -104 -167 -171 -188 -211 -223 -258 -305 -344 -379 -399 -488 -576 -868 -872 -981 -1,008 Other operating expenses -1 -2 1 1 0 0 0 0 0 0 0 0 3 15 -1 38 113 16 10 0 0

EBITDA 42 40 35 156 226 207 215 326 619 389 418 518 495 965 969 879 1,172 1,532 1,415 1,919 2,871

D&A -10 -9 -10 -47 -118 -154 -124 -175 -446 -308 -342 -427 -399 -746 -796 -1,125 -1,227 -2,057 -2,199 -2,358 -2,645 Operational -6 -6 -7 -43 -101 -140 -116 -132 -223 -186 -178 -216 -209 -253 -275 -276 -269 -261 -284 -443 -730 Non-operational -3 -3 -4 -4 -18 -14 -8 -42 -224 -123 -164 -211 -189 -493 -521 -849 -958 -1796 -1915 -1915 -1915

Adj. EBIT 36 34 28 113 125 67 99 194 396 204 241 302 286 712 653 603 903 1,271 1,131 1,476 2,141

EBIT 32 31 25 109 107 53 91 152 172 81 76 91 97 219 174 -246 -55 -524 -784 -439 226

Non-recurring items 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Net financials 0 0 -1 -5 -9 -4 -3 -4 -9 2 3 -15 73 -36 90 9 140 101 -6 -6 -6

PTP 32 30 24 104 98 49 88 148 163 83 80 76 170 184 264 -237 85 -423 -790 -445 220

Taxes -8 -7 -4 -24 -17 -15 -23 -34 -60 -31 -15 -43 -37 -93 -36 -138 -126 -183 -198 -133 -66 Tax rate 25.0% 22.3% 18.4% 22.7% 17.2% 30.8% 25.7% 23.1% 36.6% 36.7% 19.0% 56.0% 21.9% 50.7% 13.6% -58.2% 148.5% -43.3% -25.0% -30.0% 30.0%

Net profit 24 24 20 81 81 34 65 114 103 53 65 34 132 90 228 -374 -41 -606 -988 -578 154 Adj. Net profit 27 26 22 84 96 45 72 153 291 160 206 218 306 560 725 449 887 1,143 900 1,310 2,042

EPS Basic (SEK) 0.33 0.33 0.27 1.02 1.03 0.43 0.74 1.32 1.10 0.51 0.23 0.12 0.42 0.24 0.59 -0.89 -0.10 -1.22 -1.99 -1.16 0.31 Adj. EPS (SEK) 0.37 0.37 0.31 1.06 1.21 0.56 0.81 1.78 3.09 1.55 0.73 0.78 0.98 1.50 1.88 1.07 2.08 2.31 1.81 2.63 4.10 Grow th Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q5'18 Q1'19/20 Q2'19/20 Q3'19/20 Q4'19/20 Q1'20/21 Q2'20/21 Q3'20/21 Q4'20/21 Q1'21/22 Q2'21/22e Q3'21/22e Q4'21/22e Sales y-o-y 89.9% 62.2% 8.8% 99.3% 672.7% 878.8% 1403.1% 440.6% 157.6% 36.4% -1.0% 9.3% -17.9% 81.1% 89.2% 43.7% 79.5% 65.6% 28.3% 115.5% 154.0% Organic growth 50.6% 66.0% 26.6% 61.5% 8.9% -10.4% 48.2% 91.3% EBITDA y-o-y 81.8% 71.2% 36.4% 157.4% 438.7% 421.1% 521.3% 108.6% 174.0% 88.2% 94.7% 58.8% -19.9% 147.8% 131.8% 69.6% 136.7% 58.8% 46.0% 118.3% 144.9% Adj. EBIT y-o-y 102.8% 93.9% 45.0% 110.6% 251.0% 96.2% 251.2% 71.6% 216.9% 204.5% 143.9% 55.7% -27.8% 249.2% 171.4% 99.8% 215.7% 78.6% 73.3% 144.7% 137.0% EBIT y-o-y 125.9% 114.9% 53.1% 115.6% 233.4% 73.3% 269.5% 39.0% 60.3% 52.2% -16.0% -40.1% -43.8% 170.5% 127.4% -370.2% -156.5% -339.3% -551.9% 78.7% -512.6% Net profit y-o-y 122.0% 121.6% 53.5% 112.0% 240.3% 44.9% 232.1% 41.3% 26.9% 53.7% -0.8% -70.5% 28.2% 72.4% 253.3% -1214.3% -131.1% -769.5% -533.3% 54.5% -473.3% Adj.Net profit y-o-y 98.5% 98.0% 45.4% 106.9% 259.3% 72.5% 220.4% 83.1% 204.2% 252.4% 187.5% 42.3% 5.1% 250.1% 251.4% 105.9% 190.2% 104.3% 24.3% 191.7% 130.1% EPS y-o-y 84.9% 84.6% 27.3% 72.4% 210.3% 29.9% 172.6% 29.9% 6.7% 19.9% -68.9% -90.9% -61.4% -52.3% 157.3% -846.5% -122.8% -603.6% -435.8% 30.1% -420.4% Adj. EPS y-o-y 65.4% 65.0% 20.6% 68.3% 227.6% 54.7% 163.0% 68.3% 155.7% 174.8% -9.7% -56.3% -68.3% -3.1% 155.9% 38.0% 112.0% 53.7% -3.7% 145.7% 97.5% Margins Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q5'18 Q1'19/20 Q2'19/20 Q3'19/20 Q4'19/20 Q1'20/21 Q2'20/21 Q3'20/21 Q4'20/21 Q1'21/22 Q2'21/22e Q3'21/22e Q4'21/22e Gross margin 70.1% 71.6% 64.9% 72.9% 49.5% 44.4% 29.7% 39.3% 54.5% 53.8% 49.6% 50.5% 50.3% 63.3% 56.6% 60.3% 59.9% 76.3% 72.5% 65.4% 69.0% EBITDA margin 51.2% 46.4% 40.8% 61.2% 35.7% 24.7% 16.9% 23.6% 37.9% 34.1% 33.2% 34.4% 37.0% 46.7% 40.7% 40.5% 48.8% 44.7% 46.3% 41.1% 47.0% Adj. EBIT margin 43.5% 39.9% 33.2% 44.3% 19.8% 8.0% 7.7% 14.0% 24.3% 17.8% 19.1% 20.0% 21.4% 34.4% 27.4% 27.8% 37.6% 37.1% 37.0% 31.6% 35.1% EBIT margin 39.3% 35.9% 29.0% 42.8% 17.0% 6.4% 7.1% 11.0% 10.6% 7.1% 6.1% 6.0% 7.2% 10.6% 7.3% -11.3% -2.3% -15.3% -25.6% -9.4% 3.7% Net margin 29.2% 27.6% 23.1% 31.6% 12.8% 4.1% 5.1% 8.3% 6.3% 4.6% 5.1% 2.2% 9.9% 4.4% 9.6% -17.3% -1.7% -17.7% -32.3% -12.4% 2.5% Adj. Net margin 32.5% 30.7% 26.4% 32.8% 15.1% 5.4% 5.6% 11.1% 17.8% 14.0% 16.4% 14.5% 22.8% 27.1% 30.4% 20.7% 36.9% 33.4% 29.4% 28.0% 33.4% Source: ABG Sundal Collier, company data

18 August 2021 ABG Sundal Collier 7 Embracer Group

Annual overview Annual overview, 2013-2022/23e (SEKm) Annual overview (SEKm) 2013 2014 2015 2016 2017 2018 2019/20 2020/21 2021/22e 2022/23e 2023/24e Games - THQ Nordic 102 178 213 302 508 899 1,155 1,789 2,319 2,562 2,813 Games - Deep Silver 0 0 0 0 0 1,828 1,796 2,081 3,942 4,525 5,032 Games - Coffee Stain 0 0 0 0 0 112 246 1,183 950 1,092 1,256 Games - Saber Interactive 0 0 0 0 0 0 0 1,186 1,657 2,068 2,275 Games - DECA Games 0 0 0 0 0 0 0 210 1,374 2,330 2,796 Games - Gearbox 0 0 0 0 0 0 0 0 1,804 2,011 2,243 Games - Easybrain 0 0 0 0 0 0 0 0 2,274 2,547 2,853 Partner Publishing/Film 0 0 0 0 0 2,916 2,054 2,576 2,944 3,032 3,123 Net Sales 102 178 213 302 508 5,754 5,249 9,024 17,263 20,169 22,391

Capitalized w ork 0 0 8 36 80 475 753 1,292 2,471 3,079 3,418 Other operating income 2 4 5 9 3 333 306 329 780 1,008 1,120 Total operating income 104 182 226 347 590 6,562 6,308 10,645 20,515 24,256 26,929

COGS -32 -58 -70 -119 -148 -3,261 -2,576 -3,618 -5,167 -5,989 -6,572 Gross profit 71 121 143 183 360 2,493 2,673 5,406 12,096 14,180 15,819

Opex -24 -29 -51 -96 -169 -1,709 -1,911 -3,041 -7,611 -8,874 -9,852 Of w hich Other external expenses -13 -15 -29 -43 -75 -868 -784 -1,365 -3,909 -4,538 -5,038 Personnel expenses -10 -14 -22 -52 -94 -841 -1,130 -1,842 -3,728 -4,336 -4,814 Other operating expenses -1 0 0 0 0 0 3 165 26 0 0

EBITDA 49 95 105 132 273 1,592 1,821 3,985 7,737 9,393 10,505

D&A 0 0 -39 -37 -76 -1,017 -1,476 -3,893 -9,167 -10,412 -10,146 Operational 0 -26 -24 -62 -712 -789 -1,073 -1,718 -2,320 -2,455 Non-operational 0 -12 -13 -14 -305 -687 -2,820 -7,449 -8,092 -7,691

Adj. EBIT 49 95 79 108 211 881 1,032 2,912 6,019 7,073 8,050

EBIT 49 95 67 95 197 575 345 92 -1,430 -1,019 359

Non-recurring items 0 0 0 0 0 0 0 0 0 0 0

Net financials -2 -1 -1 -2 -6 -29 63 203 83 -20 -20

PTP 47 94 66 93 191 546 408 296 -1,346 -1,039 339

Taxes 0 -15 -14 -21 -43 -149 -126 -393 -580 -364 -326 Tax rate 0.3% 15.9% 21.6% 22.5% 22.5% 27.2% 30.7% 132.9% -43.1% -35.0% 96.3%

Net profit 47 79 52 72 148 398 283 -97 -1,926 -1,403 13 Adj. Net profit 47 79 62 83 159 657 890 2,621 5,413 6,571 7,585

EPS Basic (SEK) 0.78 1.32 0.86 1.18 2.00 4.23 0.91 -0.23 -3.87 -2.81 0.02 Adj. EPS (SEK) 0.78 1.32 1.03 1.35 2.15 6.99 2.85 6.14 10.88 13.15 15.12 Grow th 2013 2014 2015 2016 2017 2018 2019/20 2020/21 2021/22e 2022/23e 2023/24e Sales y-o-y 74.0% 19.6% 41.8% 68.1% 1033.7% -8.8% 71.9% 91.3% 16.8% 11.0% Organic growth 50.3% 37.0% 10.4% 11.0% EBITDA y-o-y 95.3% 10.4% 26.0% 106.0% 484.1% 14.4% 118.8% 94.1% 21.4% 11.8% Adj. EBIT y-o-y 95.3% -17.2% 37.2% 94.9% 317.7% 17.2% 182.1% 106.7% 17.5% 13.8% EBIT y-o-y 95.3% -30.1% 43.1% 106.5% 192.5% -40.0% -73.2% -1649.1% -28.7% -135.2% Net profit y-o-y 68.4% -34.7% 39.6% 104.5% 169.3% -28.9% -134.4% 1881.8% -27.2% -100.9% EPS y-o-y 68.4% -34.7% 37.0% 69.1% 111.8% -78.6% -125.1% 1601.1% -27.5% -100.9% Adj. EPS y-o-y 68.4% -22.3% 31.6% 59.3% 225.0% -59.2% 115.2% 77.3% 20.9% 15.0% Margins 2013 2014 2015 2016 2017 2018 2019/20 2020/21 2021/22e 2022/23e 2023/24e Gross margin 69.0% 67.7% 67.1% 60.6% 70.9% 43.3% 50.9% 59.9% 70.1% 70.3% 70.6% EBITDA margin 47.7% 53.5% 49.4% 43.8% 53.7% 27.7% 34.7% 44.2% 44.8% 46.6% 46.9% Adj. EBIT margin 47.7% 53.5% 37.0% 35.8% 41.5% 15.3% 19.7% 32.3% 34.9% 35.1% 35.9% EBIT margin 47.7% 53.5% 31.3% 31.6% 38.8% 10.0% 6.6% 1.0% -8.3% -5.1% 1.6% Net margin 46.0% 44.5% 24.3% 23.9% 29.1% 6.9% 5.4% -1.1% -11.2% -7.0% 0.1% Adj. Net margin 46.0% 44.5% 28.9% 27.3% 31.3% 11.4% 17.0% 29.0% 31.4% 32.6% 33.9% Other metrics 2013 2014 2015 2016 2017 2018 2019/20 2020/21 2021/22e 2022/23e 2023/24e EV/Sales 2.5x 3.8x 1.4x 6.6x 9.2x 4.8x 4.0x 3.4x EV/EBITDA 5.6x 7.1x 5.2x 19.1x 20.8x 10.8x 8.5x 7.2x EV/Adj. EBIT 6.9x 9.2x 9.4x 33.7x 28.5x 13.9x 11.3x 9.4x EV/EBIT 7.8x 9.8x 14.4x 101.0x 898.6x -58.4x -78.5x 211.3x Adj. P/E 7.4x 8.9x 9.6x 40.3x 36.7x 17.5x 14.4x 12.5x P/E 8.4x 9.6x 15.8x 126.8x -988.4x -49.1x -67.4x 7,546.5x ND/EBITDA -0.2x -1.0x -1.9x -1.3x -0.6x -3.3x -1.4x -1.5x -1.8x ROE adj. 79.5% 36.8% 21.6% 17.5% 12.7% 13.9% 16.4% 18.2% 21.0% ROIC adj. 67.7% 49.8% 40.5% 30.9% 16.2% 20.0% 17.9% 16.6% 22.2% ROCE adj. 74.1% 34.5% 19.8% 15.1% 11.9% 14.5% 16.0% 17.4% 20.1% FCF yield -9.8% -9.5% -1.9% 0.0% 1.8% 2.3% 4.2% 4.8% Source: ABG Sundal Collier, company data

18 August 2021 ABG Sundal Collier 8 Embracer Group

Valuation We look at Embracer in terms of 1) three sum-of-the-parts valuations based on our ’21/22e EBITDA estimates and EV/EBITDA multiples based on relevant peers, 2) a peer group comparison, and 3) the historical 12-month forward multiples.

Sum-of-the-parts valuation We have identified potential valuation multiples for Embracer’s segments based on the valuation of relevant peers, which are included in the peer table on the next page. For example, when valuing Embracer’s THQ Nordic, Saber Interactive, Coffee Stain and Gearbox segments, we look at peers such as Paradox Interactive, Frontier Developments and Codemasters. The Deep Silver segment is trickier, as it has historically relied on licensed IPs and its earnings have been volatile; thus we think the valuation should be slightly lower. For DECA Games and Easybrain, we look at mobile game developer peers such as Stillfront and Zynga for valuation guidance. The Partner Publishing segment is considerably different from the rest of the group, as its core business is the physical distribution of video games, thus we look at peers such as Digital Bros, Focus Home Interactive and Thunderful Group. Below we highlight our EBITDA estimates and growth assumptions for ’21/22e, on which we base our SOTP valuation range. SOTP estimates overview (SEKm) SOTP (SEKm) EBITDA 21/22e Margin estimates EBITDA y-o-y grow th

THQ Nordic 1,322 57% 30% Deep Silver 2,050 52% 89% Coffee Stain 617 65% -20% Saber Interactive 994 60% 40% DECA Games 591 43% n.a. Gearbox 974 54% 30% Easybrain 819 36% 21% Partner Publishing 353 12% 14% Number of shares (m) 497.4 Source: ABG Sundal Collier, company data

Our three SOTP valuations produce a fair value range of SEK 230-355 (225-350) per share based on the following assumptions and our next FY EBITDA estimates.

SOTP valuation overview, (SEKm) SOTP (SEKm) Multiple Valuation Value per share Multiple Valuation Value per share Multiple Valuation Value per share

THQ Nordic 16x EV/EBITDA 21,147 43 24x EV/EBITDA 31,720 64 25x EV/EBITDA 33,041 66 Deep Silver 15x EV/EBITDA 30,745 62 22x EV/EBITDA 45,093 91 24x EV/EBITDA 49,603 100 Coffee Stain 17x EV/EBITDA 10,494 21 25x EV/EBITDA 15,433 31 27x EV/EBITDA 16,914 34 Saber Interactive 15x EV/EBITDA 14,912 30 23x EV/EBITDA 22,865 46 24x EV/EBITDA 24,257 49 DECA Games 10x EV/EBITDA 5,909 12 14x EV/EBITDA 8,272 17 16x EV/EBITDA 9,690 19 Gearbox 18x EV/EBITDA 17,048 34 25x EV/EBITDA 23,867 48 27x EV/EBITDA 26,692 54 Easybrain 10x EV/EBITDA 8,188 16 14x EV/EBITDA 11,463 23 17x EV/EBITDA 13,919 28 Partner Publishing 8x EV/EBITDA 2,826 6 9x EV/EBITDA 3,179 6 10x EV/EBITDA 3,674 7 Enterprise value 111,269 224 Enterprise value 161,892 325 Enterprise value 177,791 357 Net debt (21/22e) -11,039 -22 Net debt (21/22e) -11,039 -22 Net debt (21/22e) -11,039 -22 Market cap 122,308 246 Market cap 172,931 348 Market cap 188,830 380 WACC 7.0% WACC 7.0% WACC 7.0% Discounted MCAP 114,306 230 Discounted MCAP 161,618 325 Discounted MCAP 176,476 355 Source: ABG Sundal Collier, company data

18 August 2021 ABG Sundal Collier 9 Embracer Group

Relative valuation To obtain a comprehensive overview of the valuation and operational performance of companies in the video games industry, we compare Embracer across three peer groups of video game developers and publishers: large, mid-sized and mobile. The mobile peer group is included to highlight the valuation and operative performance differences among video game segments.

Valuation and operative performance across peer groups Large developers & publishers Mcap Share price P/E (x)* EV/EBIT (x)* EV/EBITDA (x) EBIT-margin (%)* EBITDA-margin (%) EV/Sales (x) ROIC (%)* CAGR '20-'23e Company (SEKm) Ccy SP 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e Sales EBIT

Activision Blizzard 566,067 SEK 727.9 22.0 19.1 17.7 15.7 12.8 11.0 15.2 12.4 11.1 41.9 43.2 44.7 43.3 44.5 44.5 6.6 5.5 4.9 13.9 14.0 13.3 7.7 11.7 350,422 SEK 1,231.4 22.0 19.6 17.2 16.3 14.6 12.6 14.7 13.3 11.8 32.0 32.5 33.9 35.5 35.6 36.3 5.2 4.8 4.3 18.8 20.1 22.3 11.7 12.4 Take-Tw o 166,293 SEK 1,427.2 31.5 26.6 20.3 22.8 17.9 13.2 20.4 16.4 12.5 20.6 22.3 23.9 23.0 24.3 25.2 4.7 4.0 3.2 15.1 14.9 17.5 11.2 7.5 Ubisoft 64,340 SEK 522.7 22.0 19.6 16.6 14.4 12.8 10.9 6.0 5.1 4.5 19.5 19.8 21.0 47.2 49.8 50.7 2.8 2.5 2.3 5.6 6.9 7.8 8.5 8.8 Bandai Namco 126,394 SEK 575.4 24.8 20.6 18.7 14.8 12.5 11.2 11.6 10.0 9.0 11.9 13.2 14.1 15.3 16.7 17.5 1.8 1.7 1.6 11.7 13.1 13.4 4.8 12.8 Nintendo 494,192 SEK 4,148.6 13.9 14.5 15.2 8.5 8.3 9.1 8.5 8.3 9.0 35.4 35.6 35.2 35.5 35.8 35.6 3.0 3.0 3.2 22.6 19.7 17.1 -3.5 -4.7 NCsoft 117,929 SEK 5,722.6 30.9 16.9 11.5 22.6 11.5 6.8 20.1 10.8 6.3 26.5 36.7 12.1 29.7 39.2 12.8 6.0 4.2 1.0 14.1 21.3 19.8 18.4 21.3 NEXON 152,197 SEK 171.1 20.6 16.7 15.6 13.6 9.2 7.8 12.2 8.7 7.4 35.0 39.4 40.3 38.7 41.8 42.8 4.7 3.6 3.2 11.4 12.4 11.8 7.7 9.8 Peer average 254,729 23.5 19.2 16.6 16.1 12.5 10.3 13.6 10.6 8.9 27.8 30.3 28.2 33.5 36.0 33.2 4.3 3.7 2.9 14.2 15.3 15.4 8.3 9.9 Peer median 159,245 22.0 19.3 16.9 15.3 12.7 11.0 13.5 10.4 9.0 29.3 34.1 28.9 35.5 37.5 36.0 4.7 3.8 3.2 14.0 14.5 15.3 8.1 10.8 Embracer Group (ABGSCe) 94,515 SEK 190 17.5 14.4 12.5 13.9 11.3 9.4 10.8 8.5 7.2 34.9 35.1 35.9 44.8 46.6 46.9 4.8 4.0 3.4 17.9 16.6 22.2 35.4 40.3 vs peer average -26% -25% -25% -14% -9% -9% -21% -20% -19% 25% 16% 28% 34% 29% 41% 11% 8% 15% 26% 9% 44% 325% 306% vs peer median -21% -26% -26% -9% -11% -14% -20% -18% -20% 19% 3% 24% 26% 24% 30% 2% 4% 7% 27% 15% 46% 336% 275% Mid-sized developers & publishers Mcap Share price P/E (x)* EV/EBIT (x)* EV/EBITDA (x) EBIT-margin (%)* EBITDA-margin (%) EV/Sales (x) ROIC (%)* CAGR '20-'23e Company (SEKm) Ccy SP 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e Sales EBIT

Konami 70,142 SEK 526.5 19.8 16.9 15.8 12.3 9.6 8.6 9.6 7.8 7.0 21.4 24.5 25.0 27.5 30.1 30.4 2.6 2.3 2.1 10.6 11.5 11.3 6.5 31.2 CD Projekt 38,606 SEK 383.2 35.5 25.6 32.3 25.5 22.9 25.7 21.5 18.3 20.3 48.3 49.1 46.9 57.2 61.7 59.3 12.3 11.3 12.0 20.2 22.1 17.2 -17.4 -21.4 Paradox Interactive 16,262 SEK 154.0 35.8 25.7 23.0 27.7 19.3 17.0 15.6 11.1 9.8 33.3 36.0 36.8 59.1 62.3 63.6 9.2 6.9 6.2 11.5 13.2 Frontier Developments 12,012 SEK 308.8 44.7 34.0 31.2 37.4 27.8 23.5 22.0 16.2 13.2 22.1 21.9 21.7 37.5 37.7 38.5 8.3 6.1 5.1 18.5 18.8 31.0 30.5 Focus Home Interactive 3,089 SEK 491.0 26.9 19.1 13.3 14.1 10.9 7.6 8.7 7.0 5.3 13.1 14.2 16.3 21.2 22.2 23.6 1.8 1.5 1.2 7.5 13.6 Team17 Group 12,388 SEK 95.7 41.3 37.3 34.5 32.5 28.3 26.5 29.5 25.8 23.5 33.4 33.3 31.7 36.8 36.6 35.7 10.8 9.4 8.4 9.6 7.9 Remedy Entertainment 5,523 SEK 422.5 43.3 46.2 27.2 30.3 31.9 28.1 27.6 33.7 29.9 36.3 36.3 34.6 50.4 10.2 9.6 18.4 23.3 11 Bit Studios 2,441 SEK 1,032.1 57.3 50.5 9.4 65.8 64.1 6.6 38.4 35.7 5.0 25.5 17.8 47.8 43.6 31.8 63.1 16.8 11.4 3.2 49.7 49.8 Digital Bros 3,463 SEK 242.8 18.6 18.0 13.2 12.1 6.6 6.3 17.2 17.8 34.0 34.3 2.3 2.2 2.7 15.2 Sumo Group 9,776 SEK 58.6 55.1 47.4 42.6 42.7 35.2 30.4 34.5 28.7 25.3 18.3 18.0 18.0 22.7 22.1 21.6 7.8 6.3 5.5 16.5 20.2 11.0 28.8 34.8 Koei Tecmo 59,170 SEK 356.1 22.1 20.7 18.2 21.8 20.4 14.8 44.9 48.6 45.0 7.1 5.9 5.2 25.0 28.7 Square Enix 60,319 SEK 505.0 24.1 21.6 19.6 12.7 11.4 10.3 11.2 10.1 9.2 15.0 15.6 16.4 17.1 17.5 18.3 1.9 1.8 1.7 12.2 12.5 12.6 2.9 8.5 TinyBuild 6,098 SEK 30.2 53.8 45.4 37.8 56.2 36.3 30.8 37.9 33.6 28.9 26.7 37.2 39.8 39.6 40.1 42.3 15.0 13.5 12.2 Capcom 47,603 SEK 223.0 21.0 18.9 17.9 16.5 14.3 12.9 15.1 12.9 11.4 39.0 40.2 40.6 42.5 44.4 45.8 6.4 5.7 5.2 20.8 19.8 18.2 9.7 13.9 Peer average 24,778 35.7 30.5 24.8 29.2 24.6 17.9 21.4 18.6 14.5 28.0 28.9 32.5 36.5 36.6 41.1 8.0 6.7 5.7 16.5 17.5 14.1 14.3 19.2 Peer median 12,200 35.6 25.7 23.0 26.6 21.7 15.9 21.5 16.2 11.4 26.1 27.2 36.3 36.8 34.6 40.4 8.0 6.2 5.2 17.5 19.3 12.6 9.7 15.2 Embracer Group (ABGSCe) 94,515 SEK 190 17.5 14.4 12.5 13.9 11.3 9.4 10.8 8.5 7.2 34.9 35.1 35.9 44.8 46.6 46.9 4.8 4.0 3.4 17.9 16.6 22.2 35.4 40.3 vs peer average -51% -53% -50% -52% -54% -47% -50% -54% -50% 25% 22% 11% 23% 27% 14% -40% -41% -40% 8% -5% 58% 147% 110% vs peer median -51% -44% -46% -48% -48% -41% -50% -47% -37% 34% 29% -1% 22% 35% 16% -40% -36% -35% 2% -14% 76% 264% 165% Mobile developers & publishers Mcap Share price P/E (x)* EV/EBIT (x)* EV/EBITDA (x) EBIT-margin (%)* EBITDA-margin (%) EV/Sales (x) ROIC (%)* CAGR '20-'23e Company (SEKm) Ccy SP 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e 2021e 2022e 2023e Sales EBIT

Com2us 9,016 SEK 749.7 12.0 8.7 7.5 6.2 3.1 2.0 5.8 3.0 1.9 18.7 23.5 24.9 20.2 24.7 25.9 1.2 0.7 0.5 12.2 17.4 21.7 Stillfront 20,266 SEK 55.9 16.0 13.5 12.4 14.3 11.9 10.4 11.6 9.6 8.3 30.3 31.3 32.0 37.4 38.5 39.9 4.3 3.7 3.3 19.3 20.4 Zynga 78,264 SEK 71.7 24.3 19.9 17.6 14.5 11.6 9.5 12.9 10.3 8.4 20.8 21.8 23.0 23.3 24.5 25.9 3.0 2.5 2.2 8.9 11.2 11.0 13.9 12.0 G5 Entertainment 3,796 SEK 434.6 16.8 13.1 10.2 13.7 9.8 6.9 8.8 6.4 4.9 18.0 20.6 23.8 27.9 31.6 33.7 2.5 2.0 1.6 11.0 32.7 Rovio Entertainment 4,797 SEK 64.5 19.4 15.6 14.3 11.5 9.2 7.9 9.1 7.9 6.8 12.1 13.6 14.4 15.1 16.0 16.6 1.4 1.3 1.1 4.5 -0.2 Ten Square Games 8,574 SEK 1179.8 22.1 22.5 19.7 15.6 13.1 11.2 17.0 14.4 14.0 32.4 33.6 35.1 29.8 30.6 28.1 5.1 4.4 3.9 13.4 15.5 Peer average 20,786 18.4 15.6 13.6 12.6 9.8 8.0 10.9 8.6 7.4 22.0 24.1 25.5 25.6 27.7 28.4 2.9 2.4 2.1 8.9 11.2 11.6 13.2 17.0 Peer median 8,795 18.1 14.6 13.3 14.0 10.7 8.7 10.4 8.7 7.6 19.7 22.7 24.4 25.6 27.6 27.0 2.7 2.3 1.9 8.9 11.2 11.6 13.6 17.9 Embracer Group (ABGSCe) 94,515 SEK 190 17.5 14.4 12.5 13.9 11.3 9.4 10.8 8.5 7.2 34.9 35.1 35.9 44.8 46.6 46.9 4.8 4.0 3.4 17.9 16.6 22.2 35.4 40.3 vs peer average -5% -8% -9% 10% 15% 18% -1% -1% -2% 58% 46% 41% 75% 68% 65% 67% 62% 60% 100% 48% 92% 167% 137% vs peer median -4% -1% -7% -1% 6% 8% 4% -3% -5% 77% 55% 48% 75% 68% 74% 77% 74% 77% 100% 48% 92% 160% 125% *Adjusted P/E, EV/EBIT, EBIT-margin and ROIC for Embracer Group to ease comparison to IFRS peers Source: ABG Sundal Collier (for Embracer), FactSet, company da

Mid-sized peers, EV/sales vs. EBIT margin, ’22e Large peers, EV/sales vs. EBIT margin, ’22e 16x 10x

9x 14x 8x 12x 11 Bit 7x Remedy Blizzard e

10x e 2 2 6x 2 2 ' '

Team17 Electronic Arts NCsoft s s e e l 8x Paradox l 5x a a S Sumo Group S Take-Two / Frontier / Embracer V V 4x E 6x Capcom E Koei Tecmo NEXON 3x 4x Square Enix Ubisoft Nintendo Embracer 2x 2x Konami 1x Bandai Namco Focus Home Digital Bros 0x 0x 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% EBIT margin '22e adj. EBIT margin '22e

Source: ABG Sundal Collier (for Embracer), FactSet Source: ABG Sundal Collier (for Embracer), FactSet

18 August 2021 ABG Sundal Collier 10 Embracer Group

Forward multiples Based on FactSet consensus, Embracer is currently trading at a f12m EV/adj. EBIT of approximately 15.4x, which is approximately 17.7% below the five-year historical average of 18.2x. Looking at the f12m adjusted P/E, we find that Embracer is trading at around 18.1x, which is 29.4% below the five-year historical average of 25.8x.

F12m EV/adj. EBIT F12m adj. P/E 100.0% 90.0% 50x 35x 80.0% 60.0% 30x 60.0% 40x 18.2 15.4 40.0% 25x 30.0% 30x 20.0% 20x 0.0% 0.0% 15x 20x -20.0% -30.0% -40.0% 10x 10x -60.0% -60.0% 5x -80.0% 0x -90.0% 0x -100.0%

Premium/Discount F12m EV/adj.EBIT Avg. EV/adj.EBIT Premium/Discount F12m P/E Avg. P/E

Source: ABG Sundal Collier, FactSet, company data Source: ABG Sundal Collier, FactSet, company data

18 August 2021 ABG Sundal Collier 11 Embracer Group

ESG profile

Sustainability framework rollout initiated… Key issues* ABGSC weight In conjunction with Embracer’s 2018/2019 annual report, the company Environment 25% announced that it had launched a sustainability framework to promote Financing environmental impact what it termed “Smarter business”. The framework seeks to create further Packaging material and waste long-term value for the company’s shareholders through four pillars: Climate change Business Sense, Solid Work, Great People and Greener Planet. Social 50% Embracer, like the gaming industry as a whole, is growing rapidly, adding Human capital revenues and employees at a rapid rate, which increases Embracer’s Health and safety responsibility and accountability. Labour management Governance 25% …with Karin Edner assuming responsibility Corporate behaviour The framework is structured in such a way that the Swedish parent Business ethics company is responsible for the smarter business framework at group Corporate governance level, and will produce a yearly sustainability report that highlights the Previous ESG incidents group’s progress. However, it is up to each subsidiary to appoint a None sustainability ambassador to lead and coordinate the work through Exposure to ESG Trends suitable activities and initiatives at subsidiary level. In brief, the Business Building energy efficiency, Recycling, Plastic waste, Sense pillar seeks to increase transparency, combat corruption and Renewable materials enhance consumer data protection. The Solid Work pillar promotes responsible gaming content and marketing, working against gaming addiction and to increasing the accessibility of Embracer’s games. The third pillar, Great People, will promote diversity, different perspectives and skillsets, while nurturing creative independence and work-life balance. Lastly, the Greener Planet pillar will seek to minimize the environmental footprint from Embracer’s operations and further investment in partnerships that focus on preventing and mitigating the company’s climate impact.

Social and governance data ESG Data ####### 2017 # No data available Women in workforce % 13 22 Women in management % 25 0 Women in board % 60 20 CEO salary, SEKm p.a. 1.1 1 Employee turnover % Employee absence %

Person responsible for sustainability: Karin Edner Senior management: No ESG quantified targets Today Target By No targets available

*based on the MSCI framework but not using all the parameters.

18 August 2021 ABG Sundal Collier 12 Embracer Group

Income Statement (SEKm) Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021e Q4 2021e Q1 2022e Sales 2,069 2,383 2,168 2,404 3,427 3,058 4,672 6,106 COGS -760 -1,034 -861 -963 -813 -841 -1,618 -1,895 Gross profit 1,309 1,349 1,307 1,441 2,614 2,217 3,054 4,211 Other operating items -344 -380 -428 -269 -1,082 -802 -1,135 -1,340 EBITDA 965 969 879 1,172 1,532 1,415 1,919 2,871 Depreciation and amortisation -746 -796 -1,125 -1,227 -2,057 -2,199 -2,358 -2,645 EBITA 219 174 -246 -55 -524 -784 -439 226 EO items -493 -521 -849 -958 -1,796 -1,915 -1,915 -1,915 Impairment and PPA amortisation 0 0 0 0 0 0 0 0 EBIT 219 174 -246 -55 -524 -784 -439 226 Net financial items -36 90 9 140 101 -6 -6 -6 Pretax profit 184 264 -237 85 -423 -790 -445 220 Tax -93 -36 -138 -126 -183 -198 -133 -66 Net profit 91 228 -374 -41 -606 -988 -578 154 Minority interest 0 0 0 0 0 0 0 0 Net profit discontinued 0 0 0 0 0 0 0 0 Net profit to shareholders 91 228 -374 -41 -606 -988 -578 154 EPS 0.29 0.73 -1.20 -0.13 -1.94 -3.17 -1.85 0.49 EPS Adj 0.29 0.73 -1.20 -0.13 -1.94 -3.17 -1.85 0.49 Total extraordinary items after tax -493 -521 -849 -958 -1,796 -1,915 -1,915 -1,915 Tax rate (%) 50.7 13.6 58.2 148.5 43.3 25.0 30.0 30.0 Gross margin (%) 63.3 56.6 60.3 59.9 76.3 72.5 65.4 69.0 EBITDA margin (%) 46.7 40.7 40.5 48.8 44.7 46.3 41.1 47.0 EBITA margin (%) 10.6 7.3 -11.3 -2.3 -15.3 -25.6 -9.4 3.7 EBIT margin (%) 10.6 7.3 -11.3 -2.3 -15.3 -25.6 -9.4 3.7 Pretax margin (%) 8.9 11.1 -10.9 3.5 -12.3 -25.8 -9.5 3.6 Net margin (%) 4.4 9.6 -17.3 -1.7 -17.7 -32.3 -12.4 2.5 Growth rates Y/Y Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021e Q4 2021e Q1 2022e Sales growth (%) 81.1 89.2 43.7 79.5 65.6 28.3 115.5 154.0 EBITDA growth (%) 147.8 131.8 69.6 136.7 58.8 46.0 118.3 144.9 EBIT growth (%) 170.5 127.4 -chg -chg -chg -chg -chg +chg Net profit growth (%) 72.4 253.3 -chg -chg -chg -chg -chg +chg EPS growth (%) 72.4 253.3 -chg -chg -chg -chg -chg +chg Adj earnings numbers Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021e Q4 2021e Q1 2022e EBITDA Adj 1,458 1,490 1,728 2,130 3,328 3,330 3,834 4,786 EBITDA Adj margin (%) 70.5 62.5 79.7 88.6 97.1 108.9 82.1 78.4 EBITA Adj 712 694 603 903 1,271 1,131 1,476 2,141 EBITA Adj margin (%) 34.4 29.1 27.8 37.6 37.1 37.0 31.6 35.1 EBIT Adj 712 694 603 903 1,271 1,131 1,476 2,141 EBIT Adj margin (%) 34.4 29.1 27.8 37.6 37.1 37.0 31.6 35.1 Pretax profit Adj 676 784 612 1,043 1,373 1,125 1,470 2,135 Net profit Adj 583 749 475 917 1,190 927 1,337 2,069 Net profit to shareholders Adj 583 749 475 917 1,190 927 1,337 2,069 Net Adj margin (%) 28.2 31.4 21.9 38.1 34.7 30.3 28.6 33.9 Source: ABG Sundal Collier, Company data

18 August 2021 ABG Sundal Collier 13 Embracer Group

Income Statement (SEKm) 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Sales 178 213 302 508 5,754 5,249 9,024 17,263 20,169 22,391 COGS -58 -70 -119 -148 -3,261 -2,576 -3,618 -5,167 -5,989 -6,572 Gross profit 121 143 183 360 2,493 2,673 5,406 12,096 14,180 15,819 Other operating items -25 -38 -51 -87 -901 -852 -1,420 -4,359 -4,787 -5,315 EBITDA 95 105 132 273 1,592 1,821 3,985 7,737 9,393 10,505 Depreciation and amortisation 0 -39 -37 -76 -1,017 -1,476 -3,893 -9,167 -10,412 -10,146 Of which leasing depreciation 0 0 0 0 0 0 0 0 0 0 EBITA 95 67 95 197 575 345 92 -1,430 -1,019 359 EO items 0 -12 -13 -14 -305 -687 -2,820 -7,449 -8,092 -7,691 Impairment and PPA amortisation 0 0 0 0 0 0 0 0 0 0 EBIT 95 67 95 197 575 345 92 -1,430 -1,019 359 Net financial items -1 -1 -2 -6 -29 63 203 83 -20 -20 Pretax profit 94 66 93 191 546 408 296 -1,346 -1,039 339 Tax -15 -14 -21 -43 -149 -126 -393 -580 -364 -326 Net profit 79 52 72 148 398 283 -97 -1,926 -1,403 13 Minority interest 0 0 0 0 0 0 0 0 0 0 Net profit discontinued 0 0 0 0 0 0 0 0 0 0 Net profit to shareholders 79 52 72 148 398 283 -97 -1,926 -1,403 13 EPS 0 0 0 0 0 0.91 -0.23 -3.87 -2.81 0.02 EPS Adj 0 0 0 0 0 3.11 6.38 11.10 13.39 15.36 Total extraordinary items after tax 0 -12 -13 -14 -305 -687 -2,820 -7,449 -8,092 -7,691 Leasing payments 0 0 0 0 0 0 0 0 0 0 Tax rate (%) 15.9 21.6 22.5 22.5 27.2 30.7 132.9 43.1 35.0 96.3 Gross margin (%) 67.7 67.1 60.6 70.9 43.3 50.9 59.9 70.1 70.3 70.6 EBITDA margin (%) 53.5 49.4 43.8 53.7 27.7 34.7 44.2 44.8 46.6 46.9 EBITA margin (%) 53.5 31.3 31.6 38.8 10.0 6.6 1.0 -8.3 -5.1 1.6 EBIT margin (%) 53.5 31.3 31.6 38.8 10.0 6.6 1.0 -8.3 -5.1 1.6 Pretax margin (%) 52.9 31.0 30.9 37.5 9.5 7.8 3.3 -7.8 -5.2 1.5 Net margin (%) 44.5 24.3 23.9 29.1 6.9 5.4 -1.1 -11.2 -7.0 0.1 Growth rates Y/Y 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Sales growth (%) na 19.6 41.8 68.1 1,033.7 -8.8 71.9 91.3 16.8 11.0 EBITDA growth (%) na 10.4 26.0 106.0 484.1 14.4 118.8 94.1 21.4 11.8 EBIT growth (%) na -30.1 43.1 106.5 192.5 -40.0 -73.2 -1,649.1 28.7 135.2 Net profit growth (%) na -34.7 39.6 104.5 169.3 -28.9 -134.4 -1,881.8 27.2 100.9 EPS growth (%) na na na na na high -125.1 -1,601.1 27.5 100.9 Profitability 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e ROE (%) na 66.8 32.2 20.1 10.6 4.0 -0.5 -5.8 -3.9 0.0 ROE Adj (%) na 82.7 38.0 22.0 18.8 13.8 14.5 16.7 18.6 21.4 ROCE (%) na 80.1 39.8 24.5 13.3 5.4 2.2 -3.6 -2.7 1.0 ROCE Adj(%) na 94.9 45.2 26.2 20.2 13.6 15.9 17.8 18.7 21.3 ROIC (%) na 87.0 51.8 37.6 16.8 4.4 -0.3 -7.7 -4.1 0.0 ROIC Adj (%) na 103.1 58.8 40.2 25.8 13.0 -8.2 32.5 28.5 1.0 Adj earnings numbers 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e EBITDA Adj 95 117 145 287 1,898 2,509 6,805 15,186 17,485 18,196 EBITDA Adj margin (%) 53.5 55.1 48.1 56.5 33.0 47.8 75.4 88.0 86.7 81.3 EBITDA lease Adj 95 117 145 287 1,898 2,509 6,805 15,186 17,485 18,196 EBITDA lease Adj margin (%) 53.5 55.1 48.1 56.5 33.0 47.8 75.4 88.0 86.7 81.3 EBITA Adj 95 79 108 211 881 1,032 2,912 6,019 7,073 8,050 EBITA Adj margin (%) 53.5 37.0 35.8 41.5 15.3 19.7 32.3 34.9 35.1 35.9 EBIT Adj 95 79 108 211 881 1,032 2,912 6,019 7,073 8,050 EBIT Adj margin (%) 53.5 37.0 35.8 41.5 15.3 19.7 32.3 34.9 35.1 35.9 Pretax profit Adj 94 78 106 205 851 1,096 3,115 6,102 7,053 8,030 Net profit Adj 79 64 85 162 703 970 2,723 5,522 6,689 7,704 Net profit to shareholders Adj 79 64 85 162 703 970 2,723 5,522 6,689 7,704 Net Adj margin (%) 44.5 30.1 28.2 31.9 12.2 18.5 30.2 32.0 33.2 34.4 Source: ABG Sundal Collier, Company data

18 August 2021 ABG Sundal Collier 14 Embracer Group

Cash Flow Statement (SEKm) 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e EBITDA 95 105 132 273 1,592 1,821 3,985 7,737 9,393 10,505 Net financial items -1 -1 -2 -6 -29 63 203 83 -20 -20 Paid tax -9 -12 -11 -22 -17 -123 -277 -422 -580 -364 Non-cash items 0 0 0 0 0 0 0 0 0 0 Cash flow before change in WC 85 93 119 244 1,546 1,761 3,911 7,398 8,793 10,121 Change in WC -25 17 -20 -65 -190 -30 -12 -883 216 38 Operating cash flow 60 110 99 179 1,356 1,731 3,899 6,515 9,009 10,159 CAPEX tangible fixed assets 0 -0 2 2 140 -42 -70 -173 -202 -224 CAPEX intangible fixed assets 36 69 157 312 1,335 -1,653 -2,139 -4,143 -4,840 -5,374 Acquisitions and disposals 0 0 0 -62 -1,071 -911 -4,591 -4,200 0 0 Free cash flow 96 178 258 430 1,761 -876 -2,900 -2,001 3,967 4,561 Dividend paid 0 0 0 0 0 0 0 0 0 0 Share issues and buybacks -10 -34 202 655 3,488 474 14,725 0 0 0 Lease liability amortisation 0 0 0 0 0 0 0 0 0 0 Other non cash items -76 -131 -346 -704 -3,772 -545 257 -11,231 1,443 0 Balance Sheet (SEKm) 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Goodwill 0 0 0 0 830 1,412 10,804 26,285 18,832 11,814 Other intangible assets 75 104 229 571 2,877 4,459 5,586 9,322 11,271 13,619 Tangible fixed assets 1 2 4 8 156 185 238 325 419 529 Right-of-use asset 0 0 0 0 0 0 0 0 0 0 Total other fixed assets 3 0 0 3 196 251 572 572 572 572 Fixed assets 78 106 232 582 4,059 6,307 17,199 36,503 31,093 26,533 Inventories 8 13 18 30 323 353 243 243 243 243 Receivables 26 31 47 90 1,297 1,468 2,010 2,010 2,010 2,010 Other current assets 0 0 0 0 0 0 0 0 0 0 Cash and liquid assets 18 26 167 627 2,929 2,510 14,300 12,208 15,710 19,942 Total assets 131 175 465 1,329 8,608 10,637 33,752 50,964 49,056 48,727 Shareholders equity 63 92 357 1,114 6,379 7,636 29,982 36,054 36,054 36,054 Minority 0 0 0 0 0 0 0 0 0 0 Total equity 63 92 357 1,114 6,379 7,636 29,982 36,054 36,054 36,054 Long-term debt 10 1 0 0 211 222 246 246 246 246 Pension debt 0 0 0 0 0 0 0 0 0 0 Convertible debt 0 0 0 0 0 0 0 0 0 0 Leasing liability 0 0 0 0 0 0 0 0 0 0 Total other long-term liabilities 0 0 0 0 0 0 0 11,140 9,232 8,903 Short-term debt 0 0 29 110 918 1,491 1,494 1,494 1,494 1,494 Accounts payable 58 82 80 105 1,100 1,288 2,030 2,030 2,030 2,030 Other current liabilities 0 0 0 0 0 0 0 0 0 0 Total liabilities and equity 131 175 465 1,329 8,608 10,637 33,752 50,964 49,056 48,727 Net IB debt -11 -24 -139 -520 -1,996 -1,049 -13,131 -11,039 -14,541 -18,773 Net IB debt excl. pension debt -11 -24 -139 -520 -1,996 -1,049 -13,131 -11,039 -14,541 -18,773 Net IB debt excl. leasing -11 -24 -139 -520 -1,996 -1,049 -13,131 -11,039 -14,541 -18,773 Capital invested 52 68 218 594 4,383 6,588 16,851 36,155 30,745 26,184 Working capital -23 -39 -15 15 521 532 223 223 223 223 EV breakdown 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Market cap. diluted (m) na na 676 1,953 4,525 22,083 83,948 94,515 94,903 95,291 Net IB debt Adj -8 -24 -139 -517 -1,800 -798 -12,560 -10,467 -13,970 -18,201 Market value of minority 0 0 0 0 0 0 0 0 0 0 Reversal of shares and participations 0 0 0 0 0 0 0 0 0 0 Reversal of conv. debt assumed equity 0 0 0 0 0 0 0 0 0 0 EV na na 538 1,436 2,725 21,286 71,389 84,048 80,933 77,090 Capital efficiency 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Total assets turnover (%) na 139.0 94.3 56.6 115.8 54.6 40.7 40.8 40.3 45.8 Working capital/sales (%) na -14.5 -8.8 0.1 4.7 10.0 4.2 1.3 1.1 1.0 Financial risk and debt service 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Net debt/equity -0.17 -0.26 -0.39 -0.47 -0.31 -0.14 -0.44 -0.31 -0.40 -0.52 Net debt/market cap na na -0.23 -0.37 -0.39 -0.05 -0.23 -0.12 -0.15 -0.20 Equity ratio (%) 48.2 52.3 76.7 83.8 74.1 71.8 88.8 70.7 73.5 74.0 Net IB debt adj./equity -0.12 -0.26 -0.39 -0.46 -0.28 -0.10 -0.42 -0.29 -0.39 -0.50 Current ratio 0.91 0.84 2.14 3.48 2.25 1.56 4.70 4.10 5.10 6.30 EBITDA/net interest 98.25 177.17 62.47 44.05 54.54 -28.72 -19.61 -92.77 469.64 525.23 Net IB debt/EBITDA -0.11 -0.23 -1.05 -1.91 -1.25 -0.58 -3.29 -1.43 -1.55 -1.79 Net IB debt/EBITDA lease Adj -0.11 -0.21 -0.96 -1.81 -1.05 -0.42 -1.93 -0.73 -0.83 -1.03 Interest cover 73.93 106.55 44.94 31.73 17.76 9.75 2.93 -16.15 -40.57 14.54 Source: ABG Sundal Collier, Company data

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Valuation and Ratios (SEKm) 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Shares outstanding adj. 60 60 61 74 94 312 427 497 499 502 Fully diluted shares Adj 60 60 61 74 94 312 427 497 499 502 EPS 0 0 0 0 0 0.91 -0.23 -3.87 -2.81 0.02 Dividend per share Adj 0 0 0 0 0 0 0 0 0 0 EPS Adj 0 0 0 0 0 3.11 6.38 11.10 13.39 15.36 BVPS 1.05 1.53 5.83 15.07 67.86 24.48 70.22 72.48 72.18 71.89 BVPS Adj -0.19 -0.21 2.09 7.34 28.43 5.66 31.83 0.90 11.92 21.18 Net IB debt / share -0.2 -0.4 -2.3 -7.0 -21.2 -3.4 -30.8 -22.2 -29.1 -37.4 Share price na na 11.07 26.42 48.13 70.78 196.60 190.00 190.00 190.00 Market cap. (m) na na 676 1,953 4,525 22,083 83,948 94,515 94,903 95,291 Valuation 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e P/E na na nm nm nm 78.1 -863.7 -49.1 -67.6 7,608.5 EV/sales na na 1.78 2.83 0.47 4.05 7.91 4.87 4.01 3.44 EV/EBITDA na na 4.1 5.3 1.7 11.7 17.9 10.9 8.6 7.3 EV/EBITA na na 5.6 7.3 4.7 61.7 773.4 -58.8 -79.4 215.0 EV/EBIT na na 5.6 7.3 4.7 61.7 773.4 -58.8 -79.4 215.0 Dividend yield (%) na na 0 0 0 0 0 0 0 0 FCF yield (%) na na 0 0 0 -4.0 -3.5 -2.1 4.2 4.8 Lease adj. FCF yield (%) na na 38.2 22.0 38.9 -4.0 -3.5 -2.1 4.2 4.8 P/BVPS na na 1.90 1.75 0.71 2.89 2.80 2.62 2.63 2.64 P/BVPS Adj na na 5.29 3.60 1.69 12.51 6.18 211.53 15.95 8.97 P/E Adj na na nm nm nm 22.8 30.8 17.1 14.2 12.4 EV/EBITDA Adj na na 3.7 5.0 1.4 8.5 10.5 5.5 4.6 4.2 EV/EBITA Adj na na 5.0 6.8 3.1 20.6 24.5 14.0 11.4 9.6 EV/EBIT Adj na na 5.0 6.8 3.1 20.6 24.5 14.0 11.4 9.6 EV/cap. employed na na 1.4 1.2 0.4 2.3 2.3 2.2 2.1 2.0 Investment ratios 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Capex/sales -20.2 -32.0 -52.7 -61.7 -25.6 32.3 24.5 25.0 25.0 25.0 Capex/depreciation nm -177.1 -428.8 -412.5 -145.1 114.9 56.7 47.1 48.4 55.2 Capex tangibles/tangible fixed assets 0 16.7 -55.7 -19.7 -90.2 23.0 29.3 53.2 48.1 42.4 Capex intangibles/definite intangibles -48.1 -65.6 -68.7 -54.5 -46.4 37.1 38.3 44.4 42.9 39.5 Depreciation on intangibles/definite intangibles 0 36.8 16.2 13.3 35.4 33.1 69.7 98.3 92.4 74.5 Depreciation on tangibles/tangibles 0 0 0 0 0 0 0 0 0 0 Source: ABG Sundal Collier, Company data

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Analyst certification I/We, Jesper Birch-Jensen, Stefan Knutsson, the author(s) of this report, certify that not withstanding the existence of any such potential conflicts of interests referred to below, the views expressed in this report accurately reflect my/our personal view about the companies and securities covered in this report. Analyst valuation methods ABG Sundal Collier analysts may publish valuation ranges for stocks covered under Company Sponsored Research. These valuation ranges rely on various valuation methods. One of the most frequently used methods is the valuation of a company by calculation of that company's discounted cash flow (DCF). Another valuation method is the analysis of a company's return on capital employed relative to its cost of capital. Finally, the analysts may analyse various valuation multiples (e.g. the P/E multiples and the EV/EBITDA multiples) relative to global industry peers. In special cases, particularly for property companies and investment companies, the ratio of price to net asset value is considered. Valuation ranges may be changed when earnings and cash flow forecasts are changed. They may also be changed when the underlying value of a company's assets changes (in the cases of investment companies, property companies or insurance companies) or when factors impacting the required rate of return change. Important Company Specific Disclosure The following disclosures relate to the relationship between ABG Sundal Collier and its affiliates and the companies covered by ABG Sundal Collier referred to in this research report.

Unless disclosed in this section, ABG Sundal Collier has no required regulatory disclosures to make in relation to an ownership position for the analyst(s) and members of the analyst's household, ownership by ABG Sundal Collier, ownership in ABG Sundal Collier by the company(ies) to whom the report(s) refer(s) to, market making, managed or co-managed public offerings, compensation for provision of certain services, directorship of the analyst, or a member of the analyst's household, or in relation to any contractual obligations to the issuance of this research report. ABG Sundal Collier has undertaken a contractual obligation to issue this report and receives predetermined compensation from the company covered in this report.

mo ABG Sundal Collier is not aware of any other actual, material conflicts of interest of the analyst or ABG Sundal Collier of which the analyst knows or has reason to know at the time of the publication of this report. Production of report: 18/08/2021 20:51 CET. All prices are as of market close on 17 August, 2021 unless otherwise noted.

Disclaimer This document has been prepared by ABG Sundal Collier which is the marketing name referring to all or any of ABG Sundal Collier ASA, ABG Sundal Collier AB or ABG Sundal Collier Partners LLP and any of their affiliated or associated companies and their directors, officers, representatives and employees.

This research product is commissioned and paid for by the company covered in this report. As such, this report is deemed to constitute an acceptable minor non-monetary benefit (i.e. not investment research) as defined in MiFID II.

This research product has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination.

This report is provided solely for the information and use of investors who are able to make their own investment decisions without undue reliance on this report. The information contained herein does not apply to, and should not be relied upon by, investors with no or limited experience and knowledge from investments in financial instruments. This report is for distribution only under such circumstances as may be permitted by applicable law. Research reports prepared by ABG Sundal Collier are for information purposes only. ABG Sundal Collier accepts no liability whatsoever for any losses arising from any use of this report or its contents. This report is not to be used or considered as an offer to sell, or a solicitation of an offer to buy. The information herein has been obtained from, and any opinions herein are based upon, sources believed reliable, but ABG Sundal Collier makes no representation as to its accuracy or completeness and it should not be relied upon as such. All opinions and estimates herein reflect the judgment of ABG Sundal Collier on the date of this report and are subject to change without notice. Past performance is not indicative of future results.

This research report does not, and does not attempt to contain everything material that there is to be said about Embracer Group.

The compensation of our research analysts is determined exclusively by research management and senior management, but not including investment banking management. Compensation is not based on specific investment banking revenues, however, it is determined from the profitability of the ABG Sundal Collier Group, which includes earnings from investment banking operations and other business. Investors should assume that ABG Sundal Collier is seeking or will seek investment banking or other business relationships with the companies in this report. The research analyst(s) responsible for the preparation of this report may interact with trading desk and sales personnel and other departments for the purpose of gathering, synthesizing and interpreting market information. From time to time, ABG Sundal Collier and its affiliates and any shareholders, directors, officers or employees thereof may (I) have a position in, or otherwise be interested in, any securities directly or indirectly connected to the subject of this report, or (II) perform investment banking or other services for, or solicit investment banking or other services from, a company mentioned in this report. ABG Sundal Collier relies on information barriers to control the flow of information contained in one or more areas of ABG Sundal Collier, into other areas, units, groups or affiliates of ABG Sundal Collier.

Norway: ABG Sundal Collier ASA is regulated by the Financial Supervisory Authority of Norway (Finanstilsynet); Sweden: ABG Sundal Collier AB is regulated by the Swedish Financial Supervisory Authority (Finansinspektionen); UK: This report is a communication made, or approved for communication in the UK, by ABG Sundal Collier Partners LLP, authorised and regulated by the Financial Conduct Authority in the conduct of its business. US: This report is being distributed in the United States in accordance with FINRA Rule 1050(f)(3)(B) by ABG Sundal Collier Inc., a FINRA member which accepts responsibility for its content. Research analysts are not registered/qualified as research analysts with FINRA or the NYSE, and are not associated persons of ABG Sundal Collier Inc. and therefore not subject to FINRA Rule 2241, the research analyst conflict rules. Research reports distributed in the U.S are intended solely for “major institutional investors”, as defined under Rule 15a-6 of the Securities Exchange Act of 1934. Each U.S major institutional investor that receives a copy of this research report by its acceptance represents that it agrees it will not distribute this research report to any other person. Any U.S. major institutional investor receiving this report who wishes to effect

18 August 2021 ABG Sundal Collier 17 Embracer Group

transactions in any securities referred to herein should contact ABG Sundal Collier Inc., not its affiliates. Further information on the securities referred to herein may be obtained from ABG Sundal Collier Inc., on request.

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