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G5 Entertainment

G5 Entertainment

Free-to-play games for mobile devices

G5 Entertainment develops and publishes free-to-play games for smartphones and tablets. The games are family-friendly, easy to learn and target a wide audience of experienced and inexperienced players. Distribution is achieved digitally through the various app stores of Apple, Google, Amazon and Windows. In addition to its proprietary games, the company is also a publisher of games licensed by other developers, in which case a royalty is paid to the developer based on the game’s sales performance.

Sustainability information

Despite the business model's stickiness, the company faces the risk that users may stop playing certain games. Risks hence arise if the main driver games, which generate most of G5's revenues, start to lose their momentum. The scenario hence requires other games to drive revenue or else a higher amount of UA costs will be necessary. Also, having its distribution through different app stores, G5 is dependent on both the relationship with the distributers as well as their standard terms and conditions.

SEKm 2023 2024e 2025e
Sales 1320 1200 1183
Sales growth (%) -5,7 -9,1 -1,4
EBITDA 268 272 253
EBITDA margin (%) 20,3 22,6 21,4
EBIT adj. 124 118 128
EBIT adj. margin (%) 9,4 9,8 10,8
Pretax profit 137 134 135
EPS 16,07 15,37 15,08
EPS growth (%) 99,7 -4,4 -1,9
EPS adj. 16,07 15,37 15,08
DPS 8,24 13,98 13,98
EV/EBITDA (x) 3,1 2,8 3
EV/EBIT adj. (x) 6,8 6,5 5,9
P/E (x) 8,3 8,7 8,8
P/E adj. (x) 8,3 8,7 8,8
EV/sales (x) 0,64 0,64 0,64
FCF yield (%) 12,4 13,8 12,3
Le. adj. FCF yld. (%) 12,3 13,7 12,2
Dividend yield (%) 6,2 10,5 10,5
Net IB debt/EBITDA (x) -0,8 -1 -1,2
Le. adj. ND/EBITDA (x) -0,8 -1,1 -1,2
SEKm 2023 2024e 2025e
Sales 1320 1200 1183
COGS -428 -380 -365
Gross profit 892 820 819
Other operating items -624 -548 -566
EBITDA 268 272 253
Depreciation and amortisation -157 -144 -125
of which leasing depreciation -12 -12 -12
EBITA 111 127 128
EO Items -12 9 0
Impairment and PPA amortisation 0 0 0
EBIT 111 127 128
Net financial items 25 7 7
Pretax profit 137 134 135
Tax -9 -13 -16
Net profit 128 121 119
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 128 121 119
EPS 16,07 15,37 15,08
EPS adj. 16,07 15,37 15,08
Total extraordinary items after tax -12 8 0
Leasing payments -12 -12 -12
Tax rate (%) 6,7 10 12
Gross margin (%) 67,6 68,3 69,2
EBITDA margin (%) 20,3 22,6 21,4
EBITA margin (%) 8,4 10,6 10,8
EBIT margin (%) 8,4 10,6 10,8
Pre-tax margin (%) 10,4 11,2 11,4
Net margin (%) 9,7 10,1 10
Sales growth (%) -5,7 -9,1 -1,4
EBITDA growth (%) 16,3 1,2 -6,7
EBITA growth (%) 40,3 14,3 0,3
EBIT growth (%) 40,3 14,3 0,3
Net profit growth (%) 90,6 -5,2 -1,9
EPS growth (%) 99,7 -4,4 -1,9
Profitability N/A N/A N/A
ROE (%) 25,7 23,5 21,7
ROE adj. (%) 28,1 21,8 21,7
ROCE (%) 27,5 26 24,6
ROCE adj. (%) 29,9 24,1 24,6
ROIC (%) 35,5 42,8 43,7
ROIC adj. (%) 39,5 39,6 43,7
Adj. earnings numbers N/A N/A N/A
EBITDA adj. 281 262 253
EBITDA adj. margin (%) 21,3 21,8 21,4
EBITDA lease adj. 269 250 241
EBITDA lease adj. margin (%) 20,4 20,8 20,4
EBITA adj. 124 118 128
EBITA adj. margin (%) 9,4 9,8 10,8
EBIT adj. 124 118 128
EBIT adj. margin (%) 9,4 9,8 10,8
Pretax profit Adj. 149 125 135
Net profit Adj. 139 112 119
Net profit to shareholders adj. 139 112 119
Net adj. margin (%) 10,5 9,4 10
SEKm 2023 2024e 2025e
EBITDA 268 272 253
Goodwill 0 0 0
Net financial items 25 7 7
Other intangible assets 223 200 198
Paid tax -9 -13 -16
Tangible fixed assets 13 12 11
Non-cash items -7 -1 0
Right-of-use asset 0 0 0
Cash flow before change in WC 278 264 244
Total other fixed assets 34 34 34
Change in working capital -37 -3 1
Fixed assets 270 246 243
Operating cash flow 241 261 245
Inventories 0 0 0
Capex tangible fixed assets -4 -4 -4
Receivables 33 33 33
Capex intangible fixed assets -106 -112 -111
Other current assets 125 125 125
Acquisitions and Disposals 0 0 0
Cash and liquid assets 182 247 265
Free cash flow 131 145 130
Total assets 610 651 665
Dividend paid -65 -65 -110
Shareholders equity 491 539 553
Share issues and buybacks -54 -13 0
Minority N/A N/A N/A
Leasing liability amortisation -1 -1 -1
Total equity 491 539 553
Other non-cash items 10 3 -1
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Leasing liability 2 2 2
Total other long-term liabilities 4 0 0
Short-term debt N/A N/A N/A
Accounts payable 39 36 37
Other current liabilities 74 74 74
Total liabilities and equity 610 651 665
Net IB debt -215 -279 -297
Net IB debt excl. pension debt -215 -279 -297
Net IB debt excl. leasing -216 -281 -299
Capital employed 493 541 555
Capital invested 277 260 256
Working capital 44 48 47
Market cap. diluted (m) 1059 1049 1049
Net IB debt adj. -215 -279 -297
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity N/A N/A N/A
EV 844 770 752
Total assets turnover (%) 208,2 190,3 179,9
Working capital/sales (%) 2,4 3,9 4
Financial risk and debt service N/A N/A N/A
Net debt/equity (%) -43,7 -51,8 -53,7
Net debt / market cap (%) -20,3 -26,6 -28,3
Equity ratio (%) 80,5 82,8 83,1
Net IB debt adj. / equity (%) -43,7 -51,8 -53,7
Current ratio 3 3,69 3,82
EBITDA/net interest 10,6 39,5 36,2
Net IB debt/EBITDA (x) -0,8 -1 -1,2
Net IB debt/EBITDA lease adj. (x) -0,8 -1,1 -1,2
Interest coverage N/A N/A N/A
SEKm 2023 2024e 2025e
Shares outstanding adj. 8 8 8
Diluted shares adj. 8 8 8
EPS 16,07 15,37 15,08
Dividend per share 8,24 13,98 13,98
EPS adj. 16,07 15,37 15,08
BVPS 61,91 68,52 70,26
BVPS adj. 33,81 43,13 45,14
Net IB debt/share -27,04 -35,52 -37,75
Share price 133,4 133,4 133,4
Market cap. (m) 1059 1049 1049
P/E (x) 8,3 8,7 8,8
EV/sales (x) 0,64 0,64 0,64
EV/EBITDA (x) 3,1 2,8 3
EV/EBITA (x) 7,6 6 5,9
EV/EBIT (x) 7,6 6 5,9
Dividend yield (%) 6,2 10,5 10,5
FCF yield (%) 12,4 13,8 12,3
Le. adj. FCF yld. (%) 12,3 13,7 12,2
P/BVPS (x) 2,15 1,95 1,9
P/BVPS adj. (x) 3,95 3,09 2,96
P/E adj. (x) 8,3 8,7 8,8
EV/EBITDA adj. (x) 3 2,9 3
EV/EBITA adj. (x) 6,8 6,5 5,9
EV/EBIT adj. (x) 6,8 6,5 5,9
EV/CE (x) 1,7 1,4 1,4
Investment ratios N/A N/A N/A
Capex/sales (%) 8,4 9,6 9,7
Capex/depreciation 0,8 0,9 1
Capex tangibles / tangible fixed assets 31,3 33,7 36,8
Capex intangibles / definite intangibles 47,7 55,9 56,3
Depreciation on intang / def. intang 65 66 57
Depreciation on tangibles / tangibles 0 0 0

Equity research

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Media

G5 Entertainment - Company presentation with CFO & Deputy CEO Stefan Wikstrand
G5 Entertainment - Company presentation with Deputy CEO & CFO Stefan Wikstrand

Main shareholders - G5 Entertainment

Main shareholders Share capital % Voting shares % Verified
Wide Development Ltd 7.5 % 7.6 % 26 Apr 2024
G5 Entertainment AB (Publ) 8.6 % 6.9 % 28 Mar 2024
Avanza Pension 6.8 % 6.9 % 26 Apr 2024
Purple Wolf Ltd 5.3 % 5.4 % 26 Apr 2024
Tommy Svensk 4.7 % 4.8 % 26 Apr 2024
Nordnet Pensionsförsäkring 4.2 % 4.3 % 26 Apr 2024
Swedbank Robur Fonder 3.5 % 3.6 % 26 Apr 2024
Proxima Ltd 3.3 % 3.3 % 8 Feb 2023
Argenta Asset Management SA 2.9 % 3.0 % 31 Jan 2024
Daniel Eriksson 1.8 % 1.8 % 26 Apr 2024
Source: Holdings by Modular Finance AB