Asmodee Group AB (publ)

Welcome to Asmodee Q1 Report 2025-26. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Thomas Kogler and CFO Andrea Gasparini. Please go ahead.

Good morning and welcome to our Q1-25-26 results presentation. As many of you are joining us during the summer break, thank you for taking the time. I'm speaking to you today from our offices in sunny Paris. I will begin with a brief overview of the key highlights from the quarter, then Andrea will take you through the financials in more detail before I return with a few closing remarks and we open the floor for your questions. The activity in games published by Asmodee Studios in the quarter was driven by sales of Star Wars Unlimited, including continued demand for the Jump to Light speed set and early selling of the Legends of the Force ahead of its public release in July, with most board game sales driven by long-selling games. Notable board game releases in the quarter included the sixth edition of Catan, Toy Battle, and Double Spotted Stitch, which sold out at launch. During the quarter, we saw strong performance in games published by partners, driven by even stronger new releases than in Q1 last year, such as Scarlet and Violet, Glory of the Team Rocket, in the latest set of the Pokémon trading card game, Sales of this set were further boosted by official complementary Pokémon SKUs, including special boxes and gift items containing cards. The quarter also saw solid performance from other trading card games, including the continued success of One Piece, which Asmodee distributes in English and French across several territories. Additionally, the launch of the Magic the Gathering Final Fantasy set in June, also distributed by Asmodee in several geographies, was met with strong player demand. During the quarter, we reignited our value-creative M&A strategy with the acquisition of the iconic Zombicide IP While near-term financial impact is limited, this acquisition represents a strategic addition with long-term potential to drive innovation and growth. Following the successful launch of our new brand identity in June, with a preview at UK Games Expo, we are looking closely with retail and manufacturing partners to strengthen Asmodee's consumer visibility. With this brand evolution, we aim to make Asmodee a name that is recognized, trusted, loved, and sought out by players around the world. The Asmodee brand will, over time, become more and more visible to players in-store and at events, on game boxes, and on-site. During the quarter, we were honored to receive notable awards from leading industry website BoardGameGeek, with the Lord of the Rings Duel for Middle-Earth winning Best Two-Player Game, The Fellowship of the Ring trick-taking game awarded Best Cooperative Game, and Harmonies receiving the Medium Game of the Year award. We look forward in the next quarter to continued sales of our existing lines, sustained, for example, by the refresh of the original Ticket to Ride and the Galactic Championship Finals, which just closed for Star Wars Unlimited. This tournament of over 3,500 competitors started in October 2024 and saw over 350 organized play competitions until the finals. We also look forward to the highly anticipated releases of the new games, such as LEGO Brick Like This and Star Wars Battle of Hope. Moving on to the highlights of the first quarter, I'm happy to report a solid start of the fiscal year, where we delivered strong growth in sales and EBITDA. Net sales reached €349 million, representing an organic year-on-year growth of 34.4%. The number came in stronger than our expectations, thanks to our team's delivering, primarily driven by several distributed trading card games, in games published by partners, who increased by 50% in a continued very active market. The activity in games published by Asmodee was driven by both the new releases, such as Star Wars Unlimited Set 5, as just mentioned, and the continued performance of core titles. The adjusted EBDA margin increased by 20 basis points from 11.2 to 11.4%, positively impacted by lower relative personal costs, partly offset by less favorable seismics. The free cash flow increased from 15 million euros to 25 million euros due to higher adjusted EBITDA, with a free cash flow conversion of 62% compared to 50% last year. We ended the quarter with a net debt on adjusted EBITDA of 2.1 times after M&E commitments, down from 4.6 times last year. The direct impact of tariffs on margins in the first quarter was limited as we continued to sell inventory purchase prior to the new measures. That said, US sales, mostly composed of published games, were down partly due to softer consumer sentiment, some distribution friction linked to retail uncertainty and impact from foreign exchange. As part of our tariffs preparedness, we have adjusted pricing on selected titles, optimize supply chains, and postpone certain imports, which also contributed to the timing shift of several new releases only for the US. We continue to monitor the situation closely with tariff-related effects as well as the countermeasures we took expected to unfold in the coming quarters. I will now hand over to Andrea.

Thank you. Thank you, Thomas. Let's now turn to sales for the quarter, where net sales reached 349 million, year-on-year increase of 32%. On an organic basis, sales grew by 34.4%, structural changes relating to the divestment of twin sales interactive had an effect of minus 0.5%, and the impact of changes in exchange rates was minus 1.9%. Breaking down sales by publisher, reported sales of Asmodee published gain fell by 1% year over year, gains published by partners increased by 49.9%, and the other category declined by 12.4%, impacted by the disposal of twin sales interactive. Games published by Asmodee were impacted by foreign exchange, reflecting the high single digit appreciation of euro against US dollar during the quarter. Excluding this currency effect absent in the prior year, underlying sales were broadly in line with the prior year. In addition to this, games published by Asmodee were impacted by fluctuating customer sentiment in the US and high inventory levels at online retailers who maintained sell-out but placed fewer replenishment orders. The activity in this segment was, as already mentioned by Thomas, driven by both new releases such as Star Wars and the continuous strong performance from core titles. The strong performance in games published by partners was driven by continued momentum in major TCGs. Pokémon continues to benefit from strong demand, with the successful release of Scarlet and Violent, Glory of Team Rocket. Sales of this set were further boosted by official complementary Pokémon SKUs, including special boxes and gift items. We were also benefiting from the reprinting of older releases from the Pokémon Company. It is worth noting that we are now comparing to the period last year during which the franchise experienced a slowdown. Comparables for games published by partners remain favorable through the first half of the Q2 and then become more demanding. Looking forward, we are heading towards the end of Scarlet and Violet period, but will also compare to a more normative Pokémon performance in the second half of the fiscal year. The quarter also saw solid performance from other TCGs, including the continuous success of One Piece and the launch of Magic the Gathering Final Fantasy. we saw solid double-digit growth in the category TCGs, mainly driven by Star Wars and Pokemon, while board games were down by 5% in a seasonally softer board game quarter. Both game sales were negatively impacted by the same factors affecting Asmodee published games, namely the foreign exchange, the US consumer sentiment, and the high inventory levels among online retailers. In the first quarter adjusted EBDA increased by 35% from 29.6 million to 39.9 million quarter over quarter. This increase reflects the combination of factors adjusted EBDA was positively impacted by higher volumes driven by the strong sales development. The increase in personal cost was mainly due to volume-driven needs in our route-to-market operation, as well as in publishing activities and, to a lesser extent, in corporate functions. Other operating expenses have grown in absolute value due to short-term volume-driven costs, such as shipping, royalties and variable bank increase. as well as higher investment in marketing to support long-term growth, including attending major retailer events across the UK, the Nordics and Italy. From a margin perspective, the adjusted EBITDA increased by 20 basis points, positively impacted by the lower relative personnel cost, due to both the timing of recruitment where due to uncertain macro environment that we have decided to postpone some hiring decision resulting in lower personal costs in the short term and the top line growth this was partly upset by a sales mix which is less favorable on margin given the strong performance in game published by partners in the quarter Items affecting comparability below EBITDA amounted to 2.4 million and related to the disposal of twin sales interactive. In terms of free cash flow, the free cash flow after tax and capitalized lease payment amounted to 24.7 million compared to 14.9 last year. This resulted in a free cash flow conversion relative to adjusted EBITDA of 62% compared to 50% last year. The increase observed in this quarter was driven by cash flow from operation activities as a result of higher EBITDA. Looking closer to the working capital development, we saw some large movement offsetting each other. We saw a significant increase in payables, which was largely driven by strong sales, particularly in product line with the favorable cash cycle, where the sell-through velocity, thanks to our route to market operations and terms, tend to support the positive working capital dynamics. We also saw an increase in inventory levels due to the higher sales activity and in line with our seasonality of building inventories during the first half of the fiscal year. Capital expenditure for the quarter were at 6.7 million, representing 1.9 of the sales. In terms of balance sheet, net debt before and after M&A commitment at the end of the quarter amounted to respectively 404 million and 509 million, resulting in a net debt before and after M&A commitment ratio of respectively 1.7 and 2.1 times. Cash and cash equivalent at the end of the quarter amounted to $286.6 million. The increase in cash is due to the capital injection of $400 million from Embracer, out of which $300 million was used to repay gross debt, as well as the continued cash flow generation as described on the previous page. In addition to that, there is still the untapped RCF of $100 available in our balance sheet. And with that, I will hand back to Thomas.