In This Article:
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Net Revenue: SEK1,545 million, reflecting an organic decline of 12%.
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EBITDAC Margin (North America): Improved from 1% in Q4 to 9.5% in Q1.
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Free Cash Flow: SEK1.1 billion over the last twelve months (LTM).
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Cash Flow from Operations: SEK388 million before working capital adjustments.
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Investment in Product Development: SEK132 million, representing 8.5% of net revenues.
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Leverage Ratio: Reduced to 1.9 from 2.1 in the previous quarter.
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Cost-Savings Program: Targeting SEK200-250 million, with SEK70 million realized in North America.
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Debt Reduction: Over SEK600 million reduction in total debt year-over-year.
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Stillfront Group AB (STLFF) is focusing on delivering strong profitability and cash flows, with a strategic shift towards key franchises in Europe.
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The company is launching new games in its Supremacy and Big Farm franchises, which are expected to drive growth in the second half of the year.
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Supremacy 1914, a major game in the Supremacy franchise, is receiving a significant upgrade, which could boost player engagement and revenue.
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The North American business area saw a significant improvement in profitability, with EBITDAC margins increasing from 1% in Q4 to 9.5% in Q1.
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Stillfront Group AB (STLFF) has initiated a strategic review to evaluate assets and strengthen the group, potentially unlocking shareholder value.
Negative Points
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Organic revenue declined by 12% due to reduced user acquisition (UA) spending, impacting top-line growth.
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The narrative games segment underperformed expectations, prompting repositioning and investment efforts.
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The North American business area experienced a revenue decline due to reduced UA, despite improved profitability.
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The integration of legacy titles in MENA and APAC is negatively impacting year-on-year growth for the business area.
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The company faces tough comparisons in Q2 due to a peak in Albion Online's performance last year, which may challenge organic growth.
Q & A Highlights
Q: Can we expect any improvement in the rate of year-on-year organic growth in Q2 compared to Q1? A: We do expect a slight improvement in Q2 due to Easter being in this quarter, but overall, Q2 will still be challenging in terms of top-line organic growth. We anticipate the bulk of the return to neutral organic growth to occur in the second half of the year. (Alexis Bonte, CEO)
Q: Regarding the strategic review, is there a possibility of selling well-performing assets if a good price is offered? A: Yes, we are open to selling certain assets, including those performing well, if the right price is offered. The review aims to align with our long-term strategy and potentially release shareholder value. (Andreas Uddman, CFO)