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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.

As the total amount of revenue from fully owned games increases, stronger margins are expected due to the lower royalty costs that G5 today pays to external developers. As a market-leader within the hidden object game category, along with a strong fan base, newly launched games are easily adopted by the market. In addition, newly launched games within new gaming categories increase their list positions in app stores without significant marketing due to cross selling.

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 2021 2022e 2023e
Sales 1316 1384 1482
Sales growth (%) -3 5,2 7
EBITDA 349 318 440
EBITDA margin (%) 26,6 23 29,7
EBIT adj 216 182 299
EBIT adj margin (%) 16,4 13,2 20,2
Pretax profit 209 168 299
EPS rep 23,47 17,77 30,96
EPS growth (%) 21,6 -24,3 74,2
EPS adj 23,47 19,46 30,96
DPS 6,25 6,25 6,25
EV/EBITDA (x) 9,2 5,1 3,3
EV/EBIT adj (x) 14,8 8,8 4,9
P/E (x) 16,9 12,1 6,9
P/E adj (x) 16,9 11 6,9
EV/sales (x) 2,4 1,2 1
FCF yield (%) 5,6 7,1 12,1
Dividend yield (%) 1,6 2,9 2,9
Net IB debt/EBITDA -0,4 -0,6 -0,8
Lease adj. FCF yield (%) 5,3 6,5 11,4
Lease adj. ND/EBITDA -0,4 -0,7 -0,9
SEKm 2021 2022e 2023e
Sales 1316 1384 1482
COGS -505 -452 -474
Gross profit 810 933 1008
Other operating items -461 -615 -568
EBITDA 349 318 440
Depreciation on tangibles 0 0 0
Depreciation on intangibles -110 -126 -145
EBITA 216 168 299
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 216 168 299
Other financial items 0 0 0
Net financial items -7 0 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 209 168 299
Tax -11 -18 -37
Net profit 198 150 261
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 198 150 261
EPS 23,47 17,77 30,96
EPS Adj 23,47 19,46 30,96
Total extraordinary items after tax 0 -14,3 0
Tax rate (%) -5,2 -10,7 -12,5
Gross margin (%) 61,6 67,4 68
EBITDA margin (%) 26,6 23 29,7
EBITA margin (%) 16,4 12,1 20,2
EBIT margin (%) 16,4 12,1 20,2
Pretax margin (%) 15,9 12,1 20,2
Net margin (%) 15,1 10,8 17,6
Growth rates Y/Y 2021 2022 2023
Sales growth (%) -3 5,2 7
EBITDA growth (%) 12,2 -9 38,2
EBIT growth (%) 14 -22,2 77,7
Net profit growth (%) 18,4 -24,3 74,2
EPS growth (%) 21,6 -24,3 74,2
Profitability 2021 2022 2023
ROE (%) 46,3 31,4 41,4
ROE Adj (%) 46,3 34,4 41,4
ROCE (%) 48,1 34,7 46,5
ROCE Adj(%) 48,1 37,6 46,5
ROIC (%) 86,1 49,2 73,7
ROIC Adj (%) 86,1 53,4 73,7
Adj earnings numbers 2021 2022 2023
EBITDA Adj 349 332 440
EBITDA Adj margin (%) 26,6 24 29,7
EBITA Adj 216 182 299
EBITA Adj margin (%) 16,4 13,2 20,2
EBIT Adj 216 182 299
EBIT Adj margin (%) 16,4 13,2 20,2
Pretax profit Adj 209 182 299
Net profit Adj 198 164 261
Net profit to shareholders Adj 198 164 261
Net Adj margin (%) 15,1 11,9 17,6
Depreciation and amortisation -133 -150 -141
Of which leasing depreciation -14 -12 -12
EO items 0 -14 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 337 320 428
EBITDA lease Adj margin (%) 25,6 23,1 28,9
Leasing payments -12 -12 -12
SEKm 2021 2022e 2023e
EBITDA 349 318 440
Net financial items -7 0 0
Paid tax -11 -18 -37
Non-cash items 0 0 0
Cash flow before change in WC 332 300 402
Change in WC 29 -1 -1
Operating cash flow 361 299 401
CAPEX tangible fixed assets -10 -11 -12
CAPEX intangible fixed assets -163 -159 -170
Acquisitions and disposals 0 0 0
Free cash flow 188 129 219
Dividend paid -54 -54 -54
Share issues and buybacks -126 0 0
Other non cash items -92 0 -8
Decrease in net IB debt 65 136 162
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 205 253 298
Tangible fixed assets 15 21 28
Other fixed assets 58 103 133
Fixed assets 271 299 347
Inventories 0 0 0
Receivables 12 12 12
Other current assets 153 169 178
Cash and liquid assets 148 211 364
Total assets 584 691 901
Shareholders equity 425 531 732
Minority 0 0 0
Total equity 425 531 732
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 1 0 0
Other long-term liabilities 0 0 0
Short-term debt 0 0 0
Accounts payable 13 14 15
Other current liabilities 140 140 140
Total liabilities and equity 584 691 901
Net IB debt -142 -205 -350
Net IB debt excl. pension debt -142 -205 -350
Capital invested 283 326 383
Working capital 12 27 35
EV breakdown 2021 2022 2023
Market cap. diluted (m) 3351 1812 1812
Net IB debt Adj -142 -205 -350
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 3209 1607 1462
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 223,5 217,1 186,1
Capital invested turnover (%) 672,5 635,2 541
Capital employed turnover (%) 323,4 267,3 215
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 4,8 4,6 4
Payables / sales (%) 1,4 0,9 0,9
Working capital / sales (%) -0,6 1,4 2,1
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) -33,4 -38,5 -47,7
Net debt / market cap (%) -3,6 -11,3 -19,3
Equity ratio (%) 72,7 76,9 81,3
Net IB debt adj. / equity (%) -33,4 -38,5 -47,7
Current ratio (%) 198,7 247,8 331,5
EBITDA / net interest (%) 4966,2 706593,3 0
Net IB debt / EBITDA (%) -40,6 -64,4 -79,5
Interest cover (%) 0 0 0
Lease liability amortisation -12 -12 -12
Other intangible assets 248 269 311
Right-of-use asset 9 9 9
Total other fixed assets 0 0 0
Leasing liability 6 6 14
Total other long-term liabilities 0 0 0
Net IB debt excl. leasing -148 -211 -364
Net IB debt / EBITDA lease Adj (%) -43,9 -65,9 -85,1
SEKm 2021 2022e 2023e
Shares outstanding adj. 8 8 8
Fully diluted shares Adj 8 8 8
EPS 23,47 17,77 30,96
Dividend per share Adj 6,3 6,3 6,3
EPS Adj 23,47 19,46 30,96
BVPS 50,32 62,89 86,74
BVPS Adj 20,97 31 49,93
Net IB debt / share -16,8 -24,2 -41,4
Share price 463,26 214,6 214,6
Market cap. (m) 3912 1812 1812
Valuation 2021 2022 2023
P/E 16,9 12,1 6,9
EV/sales 2,44 1,16 0,99
EV/EBITDA 9,2 5,1 3,3
EV/EBITA 14,8 9,6 4,9
EV/EBIT 14,8 9,6 4,9
Dividend yield (%) 1,6 2,9 2,9
FCF yield (%) 5,6 7,1 12,1
P/BVPS 7,88 3,41 2,47
P/BVPS Adj 18,92 6,92 4,3
P/E Adj 16,9 11 6,9
EV/EBITDA Adj 9,2 4,8 3,3
EV/EBITA Adj 14,8 8,8 4,9
EV/EBIT Adj 14,8 8,8 4,9
EV/cap. employed 7,4 3 2
Investment ratios 2021 2022 2023
Capex / sales 13,1 12,3 12,3
Capex / depreciation 144,4 123,5 141,5
Capex tangibles / tangible fixed assets 66 52,7 42,5
Capex intangibles / definite intangibles 65,6 59,1 54,8
Depreciation on intangibles / definite intangibles 48,1 51,2 41,4
Depreciation on tangibles / tangibles 0 0 0
Lease adj. FCF yield (%) 5,3 6,5 11,4

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Media

G5 Entertainment - Company presentation with CFO Stefan Wikstrand
G5 Entertainment - Company presentation with CFO Stefan Wikstrand

Main shareholders - G5 Entertainment

Main shareholders Share capital % Voting shares % Verified
Avanza Pension 6.6 % 6.7 % 27 Jul 2022
Wide Development Ltd 6.5 % 6.6 % 31 Jul 2022
Purple Wolf Ltd 5.3 % 5.4 % 31 Jul 2022
Swedbank Robur Fonder 5.3 % 5.4 % 27 Jul 2022
Tommy Svensk 4.5 % 4.6 % 27 Jul 2022
G5 Entertainment AB (Publ) 6.0 % 4.3 % 1 Aug 2022
Proxima Ltd 3.6 % 3.7 % 7 Jun 2022
Lloyd Fonds AG 3.6 % 3.7 % 31 May 2022
Handelsbanken Liv Försäkring AB 3.0 % 3.0 % 27 Jul 2022
Argenta Asset Management SA 2.7 % 2.8 % 31 Jul 2022
Source: Holdings by Modular Finance AB

Insider list - G5 Entertainment

Name Quantity Code Date
Vladislav Suglobov + 824 BUY 2 Sep 2021
Vladislav Suglobov - 15 824 SELL 16 Jun 2021
Vladislav Suglobov - 10 000 SELL 20 May 2021
Aleksandr Tabunov - 10 000 SELL 20 May 2021
Aleksandr Tabunov + 10 000 ALTM 14 May 2021
Jan Stefan Wikstrand + 3 300 ALTM 14 May 2021
Vladislav Suglobov + 10 000 ALTM 14 May 2021
Aleksandr Tabunov - 782 SELL 17 Dec 2020
Aleksandr Tabunov - 19 218 SELL 16 Dec 2020
Aleksandr Tabunov - 15 509 SELL 14 Dec 2020

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