Embracer (EMBRACB SS) Sweden

Communications

Forensic Alpha

Contract Assets have been increasing much faster than sales - it seems strange that there should be such a sharp increase in the balance (from SEK 177m last year to SEK 790m) in the absence of a fundamental change in the business model. There is also an additional amount of SEK 1.2bn Accrued Income for which there is no description. The other interesting piece of disclosure in the accounts is around intangible assets, which highlights the sheer amount of internally generated development costs being capitalised in 2023 (SEK 12bn vs. SEK 3.7bn in 2022). For a company with an adjusted EBIT of SEK 6.4bn, this adjustment would turn the company from profit-making to heavily loss-making.

- 04 August, 2023