THQ Nordic publishes Q3 2018: EBIT INCREASED 278% TO SEK 90.8 MILLION
We had another stable quarter with continued momentum. The strategy of diversification is paying off. Net sales increased by 1,403% to a record SEK 1,272.7 million in the quarter. EBITDA increased by 521% to SEK 214.8 million and EBIT increased by 278% to SEK 90.8 million compared to the same period last year. The gross margin percentage decreased due to a large share of net sales with lower margin within Partner Publishing. Cash flow from operating activities in the quarter was SEK –740.1 million, mainly due to the decision to replace forfaiting of receivables with bank debt within Koch Media. Both THQ Nordic and Koch Media contributed to the group’s EBIT during the quarter.
Net sales in the THQ Nordic business area were up 47% to SEK 124.2 million. This was driven by the release of Titan Quest, Red Faction Guerilla Re-Mars-tered and This is the Police 2, in addition to continued performance of Wreckfest. Net sales of Deep Silver were SEK 251.8 million, driven by the release of Dakar 18 and a good performance of Pathfinder Kingmaker at the end of the quarter. The digital net sales of the back-catalogue in both business areas continued to have solid performances.
Our Partner Publishing business area had a strong quarter driven by significant releases from our business partners Codemasters, SquareEnix and Sega.
During the quarter, we acquired several strong IPs such as Alone in the Dark, Kingdoms of Amalur and Timesplitters. Additionally, we were happy to welcome our new family member, HandyGames, into the group.
Our PR, marketing and sales teams across the globe did an extensive work supporting and building the demand for our pipeline of upcoming releases. Looking towards the upcoming two quarters, we are all excited about our key releases of Darksiders 3 and Metro Exodus. By the end of the quarter, we had 55 games under development, of which 35 are still in the pipeline waiting to be announced.
We are patiently working on adding more great companies into the group, both developers and publishers. This is a daily proactive activity within the parent company, as well as within both operating groups. We are engaging with a large number of companies across the globe with respect to joining the group. I am confident about our strategy and capability to benefit from the ongoing shift in platforms and technologies.
– LARS WINGEFORS, FOUNDER & CEO
THQTHIRD QUARTER 2018
- Net sales increased by 1,403% to SEK 1,272.7 m (84.7).
- Owned titles represented SEK 187.9 m (62.6), or 50%, of business area Games sales in the quarter.
- EBITDA increased by 521% to SEK 214.8 m (34.6), corresponding to an EBITDA margin of 17%.
- EBIT increased by 278% to SEK 90.8 m (24.0), corresponding to an EBIT margin of 7%.
- Cash flow from operating activities amounted to SEK –740.1 m (29.2).
- Earnings per share were SEK 0.74 (0.26).
- 5 owned titles and 9 publishing titles were released in the third quarter.
INTERIM PERIOD JANUARY-SEPTEMBER 2018
- Net sales increased by 988% to SEK 2,743.0 m (252.1).
- Owned titles represented SEK 510.5 m (183.0), or 41%, of business area Games sales in the period.
- EBITDA increased by 457% to SEK 647.6 m (116.2), corresponding to an EBITDA margin of 24%.
- EBIT increased by 191% to SEK 250.5 m (86.2), corresponding to an EBIT margin of 9%.
- Cash flow from operating activities amounted to SEK 124.2 m (80.5).
- Earnings per share were SEK 2.17 (0.91).
- As of 30 September 2018, cash and cash equivalents were SEK 1,345.6 m. Available liquidity including credit facilities was SEK 2,244.2 m.
The full interim report is available via link below and on www.thqnordic-investors.com
For additional information, please contact:
Lars Wingefors, Founder and CEO
Tel: +46 708 471 978
About THQ Nordic
THQ Nordic acquires, develops and publishes PC and console games for the global games market. The company has an extensive catalogue of over 100 owned franchises, such as Saints Row, Dead Island, Darksiders, Metro (exclusive license), Titan Quest, MX vs ATV, Kingdoms of Amalur, Time Splitters, Delta Force, Destroy All Humans, Jagged Alliance, Alone in the Dark, SpellForce amongst others. THQ Nordic has a global publishing reach within marketing, sales and distribution, both online and offline. The company has a global presence, with its group head office located in Karlstad, Sweden and with operational offices in Vienna, Austria and Munich, Germany. The group has eleven internal game development studios based in Germany, UK, USA and Sweden and engages about 1,900 people.
THQ Nordic's shares are publicly listed on Nasdaq First North Stockholm under the ticker THQN B with FNCA Sweden AB as its Certified Adviser. For more information, please visit: http://www.thqnordic-investors.com.
This Interim Report is information that is mandatory for THQ Nordic to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 06:00 CET on 14 November 2018.