It’s 08:57 and on a stage at the Nasdaq building, Embracer’s CEO, Lars Wingefors, stands ready to ring the bell alongside Asmodee’s CEO, Thomas Kœgler, marking the beginning of the stock market trading day.
The room is adorned with several of the board game company’s most popular products, including Ticket to Ride, Catan, Hitster, and various board games with Star Wars and Lord of the Rings themes.
In the audience are several players in the finance industry who have been advisors during the listing process. Two men in suits are overheard whispering:
“Have you placed any support buys?”
“No, I don’t think they will be needed.”
As the stock trading begins three minutes later, the price bounces around 110-115 SEK, valuing Asmodee at around 26 billion SEK.
“It’s a pretty good result,” says CEO Thomas Kœgler to Placera shortly after.
“No quick exit”
Asmodee’s chairman and largest owner, Lars Wingefors, declines to comment on the day’s stock price. However, he says that the feeling is “very good” now that the first division of the Embracer group has been completed. Wingefors emphasizes that his intention is to remain a long-term owner and that there is no “quick exit” in sight.
“If I wanted to do that, I would have sold Asmodee to a private equity firm. Most of the world has contacted us and wanted to buy it. But I have been very keen on remaining as an owner and listing it on the Stockholm Stock Exchange.”
Why?
“One could say that I have ‘fallen in love with’ Asmodee. There is no other company like this to buy. It is a unique serial acquirer that can grow both organically and through acquisitions. The cash flow is strong enough to finance the acquisitions and still have capital left for the shareholders.”
Neither Wingefors nor Kœgler provides any indication of when the first dividend may become a reality. Both emphasize that the debt level must first be reduced from around 2.5 times adjusted EBITDA to below 2.0.
Despite the ambition to reduce the debt level, Wingefors is clear that he wants to see an aggressive strategy going forward.
“I hope, of course, that we can now accelerate with acquisitions,” he says.
“Many favorites”
Asmodee has made a total of about 40 acquisitions, according to Thomas Kœgler, who expects “a few” per year. In 2014, Ticket to Ride was acquired, which was already an established game at the time. Since then, it has grown further, and today, the board game is one of the company’s biggest cash cows.
Kœgler is brief when it comes to the company’s acquisition plans. But he says that the focus is on promising games as well as those that are already top sellers.
“I won’t mention any names. But sometimes we acquire games with potential and sometimes games that have already proven themselves. Often, we also buy entire studios that can continue to grow within Asmodee.”
The Frenchman has worked for Asmodee for ten years and will lead the company from its operational headquarters in Paris. He describes himself as a dedicated player, with at least 50 different board games in his home.
“I have many favorites. But I am particularly fond of 7 Wonders, as it revived my and my brothers’ interest in games 15 years ago. Right now, I have a passion for Forest Shuffle,” he says.
New spin-off awaits
According to Kœgler, there has been a shift in the perception of board games over the past decade. Ten years ago, it was seen as a bit nerdy among young people, but the pandemic was a clear turning point.
“Now everyone plays. During the pandemic, many new households started playing, and they have continued. It is a cheap pleasure compared to many other things,” says Kœgler.
How concerned are you that interest in your top sellers will fade?
“Just look at some iconic games from our competitors. Monopoly is celebrating its 90th anniversary and is still popular. Catan has been around for 30 years, and there is no reason to believe that it won’t be just as strong in 30 years.”
In its prospectus, Asmodee writes that the board game market is expected to grow by around 4% per year during the period 2023-2028. The company’s goal is to achieve a “medium-high single-digit” organic growth and to add acquisitions and margin improvements beyond that.
“What is important is to grow the business over time. Hopefully, the stock price will grow with it,” says Lars Wingefors, who holds 18.72% of the capital.
Embracer has previously announced that Coffee Stain & Friends will also be spun off by 2025. After that, the plan is for Embracer to change its name to Middle-earth Enterprises. Whether Lars Wingefors will continue as CEO at that time is unclear.
“I am a committed Värmland native in my companies. That’s all I can comment on,” he says.
But how long will you stay on as CEO?
“Well, that’s how it works when you’re listed. As long as you are the CEO, you are the CEO.”