Asmodee Group AB (publ)

Good morning, everybody. This is Thomas Kogler. I'm CEO of Asmodee. I am thrilled to present Asmodee's first interim report as an independent company following our successful listing on Nasdaq Stockholm last Friday. Today, I am pleased to be back in Stockholm alongside our CFO, Andrea Gasparini. I will begin with a brief overview of our quarterly highlights before handing it over to andrea who will take you through our financials after that i will return with some concluding remarks before we open the floor to questions so the third quarter was an eventful and milestone filled period for us in october we participated in essen spiel 2024 the world's largest tabletops game convention where Asmoday has the most significant presence, spanning over 4,000 square meters, This allowed players to experience close to 90 showcased games through an impressive 65,000 demo sessions held over four days. In November, we successfully hosted our first Capital Markets Day here in Stockholm, making a key step in strengthening our investor relations. And in December, we issued a 940 million in senior secured notes and continued advancing our listing readiness efforts. In terms of products, the third quarter was also marked by several successful releases on top, obviously, of a very strong performance of our long sellers. Those include the Lord of the Rings Duel for Middle-Earth, in partnership with Middle-Earth Enterprise, part of Embracer, Lego Monkey Palace, Star Wars Unlimited Set 3, Twilight of the Republic. As mentioned during our Capital Markets Day, we continue to leverage our IPs in other forms of entertainment, specifically movie and TV shows. Our great werewolves of Miller's Hollow IP saw two great successes. Netflix released a movie on the IP that achieved 40 million views by the end of December, while Canal+, French pay TV, successfully launched a TV game show based on the same IP. which reached 10 million views, driving a significant sale increase in France for the tabletop game in the quarter. Moving on to the highlights of the quarter, of this third quarter, where we saw net sales just shy of 430 million euros, an all-time record-breaking quarter. This reflects sales growth of 11.3%, of which 12.9% relates to organic growth. The growth was primarily driven by games published by Asmodee Studios, long sellers and new releases already mentioned in the previous slide. The adjusted EBDA increased by 12% to close to 90 million euros and was positively impacted by a more favourable product mix, partly offset by higher operational expenses. We deliver over the period a strong cash flow above 70 million in line with seasonality and a cash conversion on adjusted EBDA of 81%. Following the end of the quarter, we received, as expected, a 400 million euro capital injection from the Embracer Group. 300 million euros of the proceeds have been allocated to repaying gross debt, whilst the remaining 100 million euros will further strengthen our balance sheet and support the resumption of our acquisitions agenda. Adjusted for the capital injection, our net debt on adjusted EBITDA after M&A commitments would have been around two and a half times. In terms of full year management expectations, we still expect for the full year low single digit net sales growth and adjusted EBITDA and adjusted EBIT broadly in line with the previous year. in terms of percentage. I will now hand over to our CFO, Andrea Gasparini.

Good morning, everyone, and thank you, Thomas. Moving on to sales for the third quarter, where net sales amounted to Euro 429 million, an increase of 11.3% compared to the same period last year. Organically, sales increased by 12.9%. Last year, disposal of miniature market had an effect of minus two points, impacting the other items. And the impact of change in exchange rates was 0.4%. Splitting the games by publisher, we saw games published by Asmodee Studios increased by 29.1%. Games published by partners increased by 4.8%. And others decreased by 32%. The strong sales growth in games published by Asmodee was, as already mentioned by Thomas, primarily driven by new sales based on third-party IP supported by Star Wars Unlimited, where the last year had no sales, LEGO Monkey Palace, Lord of the Rings Duel for Middle-Earth, as well as pillar games such as Catan and Double Spotted. Within games published by partners, we saw a rebound in sales for distributed lines following headwinds faced during the first half of the fiscal year. Thanks to strong new releasings such as Scarlet and Violet, Surging Sparks for Pokémon, Foundations for Magic the Gathering, Emperors in the New World for One Piece, Trio and Bomb Buster from Cocktail Games, and heat stairs in the nordics we saw solid growth across both tcg and board games categories and this strong performance in q3 brings the year to date back on track to deliver low single digit on a year-to-date basis sales amounted to 1 billion 27 million an increase of 1.7 percent Compared to the same periods last year and organically sales increased by 3.3%. This is a great achievement and we are proud of the work made by the teams across all of our operations. We saw an increase in adjusted EBITDA of 12% up from €80 million to €89.3 million the same period last year. This corresponded to an adjusted BDA margin of 20.8% compared to 20.7% prior year. The increase in adjusted BDA was driven by higher gross profit from a favorable product mix, where games published by Asmodee have higher margins than partner published games, as well as higher volumes. The higher gross profit was partially upset by higher investment in marketing to drive long term growth, which include marketing campaigns and presence in key events such as Spill SN and Pax Unlimited Fairs. Higher royalty costs, which are variable and in line with sales development. Higher shipping costs due to higher cost per container. and ramp up of costs connected to becoming a standalone listed company. Items affecting comparability of 29.4 million, of which 28.6 million are related to listed process, also have been adjusted in our adjusted BDA. We also see 11.3 million of implementation cost of the bridge loan and revolving credit facility impacting the financial net in the quarter, so below the adjusted EBITDA in our P&L. The costs mentioned above related to the listing and refinancing are a reflection of the listing project being made in conjunction with implementation of our new long-term financial structure. Moving on to the cash flow, where the cash flow after tax and capitalized lease payment amounted to 72 million during the third quarter. This corresponds to a free cash flow conversion relative to adjusted EBITDA of approximately 81%. For your information, starting from Q1 2025, we are planning to introduce quarterly free cash flow disclosure to provide a greater visibility in our cash generation and financial performance. Year-to-date the free cash flow after tax and capitalized lease payment of euro 100 million 102 million corresponding to a free cash flow of 54 percent. Year-to-date free cash flow compared to last year was favorably impacted by higher adjusted EBITDA, offset by movement in working capital where last year working capital benefited from an exceptional inventory unwinding following the high inventory build-up during the post-COVID period. Looking at movement in working capital this year, this is pretty in line with the seasonality with the inventory reduction following the peak season, which has started as of end of Q3. And end of December, the increase in trade receivables and trade payable is still there, thanks to strong sales during the Q3. It should be noted that capital expenditure amounted to between 14 and 15 million in Q3, less than 2% of net sales in line with our CapEx Lite business model that we've described previously. Finally, net debt and balance sheet. So the net debt before M&A commitment was driven by the issuance of the 940 million senior secured notes in Q3, replacing the bridge facility established in April 2024. We have also access to 150 million revolving credit facility, totally undrawn as of today. and the ratio of net debt to adjusted EBITDA before and after a net commitment stands at 3.6 times and 4.2 times respectively. The capital injection from Embracer Group of €400 million was received on January 24 and €300 million has been allocated to repaying gross debt and the process is ongoing and should be finalized in the coming days. Net debt on EBITDA adjusted for capital injection before and after M&A commitment should land at approximately 2 and 2.5 times respectively. We have also included some further details in appendix with respect to the evolution of the net debt. And with that, I will hand over to Thomas.

Thank you, Andrea. So as a conclusion, as you have seen, we have delivered solid double digit growth in sales and profit. We have continued our strong cash flow generation and cash conversion. Our long-term financing is in place, strengthening our balance sheet. We had our first successful media developments with partners on Asmodee IPs in a quarter. Now, what do we look forward to? A strong product catalog and a strong pipeline of novelties. and we really believe we are well positioned for long-term profitable growth now being listed on nasdaq in stockholm and with this great picture from the nasdaq listing from last friday i am now opening up opening up the floor for questions