<a id="bm-comp-ffbd732c-a271-4a9b-9c93-e09bb31a6b86" name="bm-comp-ffbd732c-a271-4a9b-9c93-e09bb31a6b86" class="BMCustomAnchor"></a><table><tr><td bm-component-id="ffbd732c-a271-4a9b-9c93-e09bb31a6b86" style="vertical-align: top; width:100.000000%;"><ul><li>Negative trend sustained, but there are a few growth options in H2</li><li>We cut adj. EBIT 12-8% on 2025e-2027e</li><li>Trading at 5x EV/FCF '25e; half of market cap in net cash</li></ul></td></tr></table><a id="bm-comp-091fea56-da4a-4841-8023-5e629a863f52" name="bm-comp-091fea56-da4a-4841-8023-5e629a863f52" class="BMCustomAnchor"></a><table><tr><td bm-component-id="091fea56-da4a-4841-8023-5e629a863f52" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Organic growth improving, but slower than expected</h3><p>The organic growth improved somewhat q-o-q but at a lower rate than we expected, from -15% to -11% y-o-y (vs. ABGSC -5%). There were some positive aspects of the report, including the biggest title, Sherlock, growing q-o-q (+2%) and continued high growth for G5 Store (+39% y-o-y and +8% q-o-q measured in USD). The conversion of sales through G5 Store gives a higher gross margin. G5 Store now comprises 23% of sales (15%), and we expect it will continue to increase. Interestingly, management said it will open up G5 Store to external developers, which could add another high-margin revenue stream with revenues potentially starting already in 2025. This, combined with a positive trend for Sherlock and the new release of Twilight Land in H2, we think could significantly improve the organic growth trend, although we expect the core portfolio to continue declining near-term.</p><h3 class="bm-h3">Mid-single-digit org. decline in H2e</h3><p>We expect more negative organic growth in H2 (-7% in Q3 and -3% in Q4) but see potential for growth to flatten even more (and potentially turn positive) in H1'26, depending on the release of Twilight Land. Lower Q2 sales (-5% vs ABGSCe, -8% vs FactSet cons.) was the sole driver of the miss on adj. EBIT (-27% vs ABGSC, -28% vs. cons.), and we cut '25e-'27e sales by 5% as a result, leading to a 12-8% cut to adj. EBIT.</p><h3 class="bm-h3">Almost half of market cap in net cash</h3><p>In Q2, the net cash position including investments was SEK 288m and the lease adj. FCF was SEK 26m. We predict SEK 82m FCF in 2025, corresponding to a valuation of 5x EV/FCF. Excluding the cash position, the share is trading at 8.6x FCF (12% yield, of which 9% is the dividend yield). In addition to the aforementioned potential operational triggers in H2, we also think it is likely that management will resume share buybacks.</p></td></tr></table>