Lord Of The Rings IP Performing Well Ahead Of Plan For New Owner Embracer Group
Lord of the Rings IP is performing “well ahead of business plan” for new owner Embracer Group, which grew sales by 50% last quarter while layoffs and division closures were being announced.
The Sweden-headquartered video game giant unveiled its first quarterly results today since revealing layoffs and a “painful” restructure, and the near-$400M acquisition of Lord of the Rings owner Middle-earth Enterprises was placed front and center of the financials.
Embracer’s Entertainment & Services segment grew 70% organically with a 15% adjusted EBIT margin for the three months to 1 July 2023, according to the group, which said this was “primarily explained by a strong contribution from Middle-earth Enterprises, driven by strong licensing revenue for The Lord of the Rings.”
Embracer Group Paid $396M For 'Lord Of The Rings' Rights
Layoffs To Come At 'Lord Of The Rings' IP Owner Embracer Group Following Restructure
Embracer said the performance is “well ahead of the business plan” developed at the time of acquisition a year ago from the Saul Zaentz Company, citing the success of trading card game The Lord of the Rings: Tales of Middle-earth, PC/Console survival-crafting game The Lord of the Rings: Return to Moria and “many other exciting new products that will grow the IP further.”
Overall, the group grew turnover by nearly 47% to 10.45B Swedish Krona ($960M) across the quarter, with adjusted EBIT up to nearly 1.7B SEK and EBIT margin of 4%.
“We now have increased confidence regarding earnings this year and we are on track to deliver on the restructuring program announced in June, with a series of initial actions now taken,” said CEO Lars Wingefors. “Even though it’s a challenging time for everyone impacted, I am confident we will emerge a stronger company.”
The group said “good progress” is being made with the restructuring program including meeting various adjusted targets, with positive growth combined with a more efficient cost structure anticipated beyond 2023/24.
The restructure has been divided into several phases over nine months and is focusing on “cost savings, capital allocation, efficiency and consolidation” at the 17,000-staff outfit.
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