Everplay Group Plc

Good afternoon ladies and gentlemen and welcome to the Everplay Group plc full year results investor presentation. Questions are encouraged they can be submitted at any time via the Q&A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself however the company can review all questions submitted today and will publish responses where it's appropriate to do so on the investor meet company platform. Before we begin, we would just like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from Everplay Group, PLC. Mikel, good afternoon, sir.

Good afternoon, and thank you very much. And welcome, everyone, to this 2025 results presentation. I am, as mentioned, Mikel Weider. I'm the CEO of Everplay, and with me is Rashid Farasha, our CFO. We'll take you through the year of 2025 and look a little ahead. But since most of you probably haven't met me before, I should probably say just a few words about myself. So I have started several gaming companies during my life, including Nordisk Games, which grew to 1300 employees via M&A and organic growth. I was the founder and CEO for seven years. So we invested in or acquired nine different game studios, including Avalanche, Supermassive, Warfury, and Mercury Steam. I have been at something like 15 different boards, mostly game companies, and worked with games of all sizes, from indie games and UGC to AAA. So when they called last year from Everplay, I was engaged with a handful of different game companies, but I thought the opportunity sounded a little too exciting. So I really liked the strategy and the people I met during the process, so I said yes. And I started on January 5, just a couple of months ago, and I will talk a little about my early findings and thoughts later in the presentation. But first, let's look at 2025. So 2025 saw solid revenues of £166 million, which is up 5% when excluding physical distribution, and the performance of our new releases were really good. We saw an 11% growth in adjusted EBITDA for the year, reaching £48.5. Million, of course, which represent a 29% margin, which is up 3.1% from the previous year. We will pay a total dividend for the year of 2.9 pence per share, representing a payout of 4.2 million pounds in total. We ended the year with almost 52 million in cash, despite active M&A activities and dividend payouts. Overall, we are set to grow. We have a very nice pipeline of games coming out, many new partnerships and a strong back catalog. So our strategy remains on track. So what happened more in 2025? Well, we launched 11 new titles. They overall performed very well. They actually generated 80% more revenues than all the new titles the past year. We signed several new large partnerships. We took a minority stake in SuperMedia Group, connected to a strategic partnership with Bulkhead. We acquired the rights of the popular Hammerwatch franchise, including a range of long-term publishing rights. Now, if we look a little at the specific companies, Team17, our largest company, had a very nice year. reached more than 100 millions in revenue and 20 million units sold. I would also say the quality of our new releases in 2025 were a lot higher than the previous year, reaching an average user score of 87% compared to only 61% the year before. So a big shout out from me to everyone who worked on these games. Date Everything was the breakaway hit of the new releases, with more than 750,000 copies sold. Yet our back catalog still accounted for 75%, which I think is really good, and very high compared to most game studios out there. And I would say it's fair to say that 2026 looks even better, with more than 10 new games coming out, which is more than twice the releases of last year. and also including some really big ones, Hell Let Loose, Golf With Your Friends 2, and War Dogs. It's worth mentioning that the brand of releases will come out in the latter part of the year. Now, Astrogon, on the other hand, had a less good year than Team17. We terminated the physical distribution business, which had the top line, but streamlined our business. But we also saw underwhelming launches of the two main new titles during the year. Seafarer had a rocky launch in Early Access with several bugs and issues, and firefighting simulator Ignite was a better launch, but still saw less traffic and sales than we hoped for. So we are currently improving and adding content to both games. Seafarer will come out of Early Access and into full launch at the end of the year, and should be in a much better shape at that point. We also lack important large updates for our main titles, which we are changing now onwards. In 2026, we look forward to several new releases, whereas not all have been announced yet. We are cautiously optimistic for the year. Lessons have been learned and more content is coming out. As for Team17, the larger launches will also fall in the second. So, of course, when one company is under delivering, it's, of course, nice to have a portfolio of companies so we are not too dependent on a few launches. And Storytoys had a really, really great year. Revenues rose an impressive 25% to 30 million pounds. And Storytoys did 740 updates during the year, which is about three launches per workday and 40% more than the previous year. And we ended the year with 376,000 active subscribers. Growth came from several places. Story Choice had a highly successful launch of the LEGO Duplo app, LEGO Bluey app, which had more than 1 million downloads in the first month and also reached number one in the app stores. Storytos also secured several new partnerships and license agreements, including some large partnership with both Netflix and Apple. If we look ahead, 2026 has started well. We crossed 300 million downloads in the beginning of the year. We have a lot of content coming out, mostly on existing apps, but also a couple of new and unannounced apps. And now over to Rashid for a more financial review.

Lovely. Thank you, Michael. Hi, everyone. So group revenues were broadly flat year on year at 166 million, but excluding the physical distribution, which we exited during the year, there were 5% up year on year. And the growth drivers coming from the success of our new title releases, such as Date Everything, Bluey, Wands Across Worlds on Apple Arcade, and then a new strategic partnership deals with Netflix Games. Team17, as mentioned by Mikel, was 8% up year-on-year, reaching a record 106 million with 20 million units sold. Six new games drove a 700% increase in new release revenues, an outstanding performance from titles such as Date Everything. Other titles included Swarm and Worms Across the World on Apple Arcade. Back catalog contracted by 13%, mainly due to strong performance from Dredge in 2024 and revenue generated from fewer new title releases in the prior year. Astrogon was the only division which contracted with a decline of 33%, in part driven by a strategic decision to exit low margin direct physical distribution. Excluding physical distribution, Astrogon revenues decreased by 18%. Two new titles were released during the year, Firefighter Sim, Ignite and Seafarer, both performing, unfortunately, below expectations. But we expect the business to bounce back in 2026. And then finally, on Storytoys, outstanding performance, where revenues were up 25% to 30.4 million. They released 740 app updates. Subscriber numbers increased to 376,000, with peak monthly active users of 12.9 million, reaching 286 million lifetime downloads. Performance driven by a major new Netflix and Apple game partnerships, including Lego Duplo World and Barbie Color Creations, along with three launches on Apple Arcade Greats. Next slide, please. Yeah, thank you. New release revenue increased 80% to £41 million versus £23 million in FY24 due to an increased number of titles and stellar performance of Team17 titles and Lego Bluey from Story Choice. Our back catalogue contributed 75% of group revenues, which was in line with its five-year average. The total back catalogue revenue were 125 million, which was a 13% decline versus prior year. This was on the back of an exceptionally strong FY24, which grew by 27%. First-party IP revenue declined 9% to 56 million, reflecting a softer performance at Astrogon. Team17 was up 2% supported by Hell Let Loose and Goal Feed Your Friends. And finally, on this slide, third-party revenue grew 4% to 110 million, with strong contributions from the Overcooked franchise, Date Everything, Dredge, and Lego Duplo World. Gross profit increased significantly by 10% to 76.3 million, where gross margins increasing by 4.4% to 46%. mainly due to exit from physical distribution business and no material impairments. And just as a reminder, during FY24, a 4.6 million charge was booked for title impairments. Overall, royalty payments were lower year-on-year due to a favourable sales mix at Team17 and a higher rating of storage storage revenue, which carry lower royalty levels. And finally, expense development costs increased modestly to support expansion onto new subscription services. For example, Worms Across Worlds on Apple Arcade and Lego Duplo World. Significant improvements on adjusted EBITDA, which grew just over 11% to £48.5 million. Adjusted EBITDA margin also increased 3.1%, reflecting higher gross margin and flat admin costs. Acquisition related adjustments declined from 13.8% to 12.1 million due to the end of acquisition related incentive payments. And net finance income increased over 1.2 million, and the effective tax rate increased from 24% to 25.5%. And then finally, adjusted EPS increased 7% to 25.7%. There was an £8.2 million increase to £33.3 million on capitalised development costs. This was due to Team17 and the new titles such as Golf With Your Friends 2, Hell Let Loose Vietnam and Astrogon, both Police Sim and Rangers Path. The current year for CapDev in terms of FY26 is forecasted to be 45 million. Again, this is mainly due to the investments in first party IP, such as Wardogs, the Hell Let Loose franchise, which we have much better visibility over. However, this has led to an increase in terms of CapDev. And then finally on cash, our cash position was 51.9 million versus last year. And increases were driven by our dividend payments during the year, increased tax, and then also increase of acquisition related payments But overall, our variances included working capital and capital developments. And as mentioned earlier by Michal, I'm pleased to announce a 2.9 pence per share dividend.