<a id="bm-comp-3fe02643-dae6-4a02-84f0-71f5489ffcf4" name="bm-comp-3fe02643-dae6-4a02-84f0-71f5489ffcf4" class="BMCustomAnchor"></a><table><tr><td bm-component-id="3fe02643-dae6-4a02-84f0-71f5489ffcf4" style="vertical-align: top; width:100.000000%;"><ul><li>Q3 weaker, but entering Q4 with better momentum</li><li>EBIT estimates cut by 3% on '25e-'26e</li><li>Share is trading at 4x EV/EBIT and EV/FCF on 2025e</li></ul></td></tr></table><a id="bm-comp-71d61e64-1c74-4c85-9d63-f3f6abba274f" name="bm-comp-71d61e64-1c74-4c85-9d63-f3f6abba274f" class="BMCustomAnchor"></a><table><tr><td bm-component-id="71d61e64-1c74-4c85-9d63-f3f6abba274f" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Weaker sales but strong cash flow</h3><p>G5 delivered Q3 sales 6% below both our and FactSet consensus' expectation, which led to EBIT 11% below ABGSCe and consensus. Lower tax cost meant that net profit was more in line (SEK 24m, -3% vs. ABGSCe SEK 25m and 2% vs. cons. SEK 24m). The sales decline was driven by lower sales across the game portfolio, with a slightly accelerated decline for Sherlock. That said, we see that Sherlock has returned to the top-grossing lists in October and November, and management also said that the seasonal upswing at the start of Q4 from the low season in Q3 has been stronger than in recent years. As such, we expect sales to increase 6% q-o-q in Q4e. Free cash flow was strong at SEK 57m in Q3, leading to a LTM free cash flow of SEK 174m (135m), although this is boosted by SEK 31m in reduced working capital. This corresponds to a 170% conversion from LTM EBIT of SEK 102m. Given a slightly lower revenue base for 2025e and normalised working capital swings, we forecast SEK 117m FCF in 2025e (104% conversion from EBIT).</p><h3 class="bm-h3">Potential for growth trend to flatten out with new games</h3><p>We continue to expect a limited contribution from new games. G5 has hinted that it might be able to release one new game before year-end, but we do not include any contribution in our estimates. For next year (2025e), we see potential for new games to contribute to flatter sales growth, although we expect declines in the existing portfolio to outweigh potential gains from new games by a small margin, assuming -2% organic growth.</p><h3 class="bm-h3">4x EV/EBIT and EV/FCF on 2025e</h3><p>Even if sales growth remains negative, G5 has protected its free cash flow. The net cash position now stands at SEK 302m including SEK 58m in long-term investments. With a strong cash position, the share is trading at 4x EV/EBIT and 4x EV/FCF on 2025e.</p></td></tr></table>