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Third party research

G5 Entertainment: Better organic growth on the horizon - ABG

G5 Entertainment

This is a third party research report and does not necessarily reflect our views or values

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We expect positive organic growth from H2'25
EBIT estimates cut 2%, mainly on FX
Share is trading at 6-5x and 10-11% FCF yields on '25e-'27e


Improved organic growth from Q2, positive in H2

Q4 saw sales in line with our expectations, for an organic growth (measured in USD) of -12% (vs. ABGSCe -12%). This corresponded to an organic q-o-q increase of 1% (4% in SEK), the first sequential increase since Q1'21, making it an important milestone. Own games continued to gain share compared to licensed games, which coupled with continued strong growth for G5 Store (+37% y-o-y, now comprising 19% of sales) drove an increased gross margin of 69% (68%). Sherlock and the Jewels of franchise drove the sequential increase in sales while we estimate that Hidden City saw a slight decline. We expect that Hidden City will continue to decline by low single digits in 2025 while Sherlock and Jewels of should remain more stable. For H1, we expect that organic growth will remain negative (similar in Q1, better in Q2), but turn slightly positive in H2 supported by contributions from new releases.
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