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 year-end results presentation for the fiscal year 25-26, where I am happy to report a new record year for Asmodee with double-digit growth in sales, NABDA alongside margin expansion, healthy cash flow generation, and a solid financial position. With respect to the fourth quarter, looking at games published by partners sales increased by 31.6 percent and were driven by successful tcg releases including mega evolution ascended heroes and perfect order the latest pokemon trading card game expansions this was further supported by strong momentum around pokemon day on february 27th and the launch of celebrations for the franchise's 30th anniversary TCGs published by Bandai also performed well with their One Piece game, including the latest set, the Azure Seas 7, distributed in English and French by Asmodee across several geographies. The second set of Riftbound, the TCG set in the League of Legends universe, also launched successfully. This continues the diversification of the TCG portfolio that we distribute. Finally, we saw a strong reception of Magic the Gathering Teenage Mutant Ninja Turtles and Magic the Gathering Lorwyn eclipsed, the latter being further supported by a range of new accessories from our game Genic Studios as part of our strategic agreement with Hasbro Wizard of the Coast announced in Q2. Sales of games published by Asmodee Studios decreased by 9.8%. This reflects a combination of factors. First of all, mid single digit growth in board games and positive developments in all regions with a continued strong dynamic within social games. The growth was offset by foreign exchange effects, primarily related to the US dollar, and lower sales of Star Wars Unlimited compared to a strong post-launch period last year. During the quarter, several of our games received major industry recognition. For example, Toy Battle won the prestigious ASDOR Game of the Year at the Festival International des Jeux in Cannes. We announced a new partnership between Netflix and Ticket2Ride following the recent Catan announcement, which further illustrates the transmedia potential of our IP portfolio. We also acquired ATM Gaming, a leader in social games, the fastest growing category within the board game market. In addition, we welcomed Japon Brand and launched our new creative entity, Nekoma Studio, making it an important step in building our presence in Japan and expanding access to talented game authors for upcoming global releases. Turning to the highlights of the fourth quarter, performance remained strong and net sales reached above 400 million euros with an organic growth in excess of 20%, despite tougher comparables last year. This was primarily driven by continued strong TCG dynamics in Europe, alongside growing board game performance in all regions. We saw a limited impact during the quarter from higher transportation and energy costs linked to the geopolitical pressures. We are taking appropriate measures to mitigate any further effects drawing on our experience from managing similar situations in the past. It is also worth noting that our current product mix is supportive in this environment as trading card games are less costly to transport. The strong sales growth combined with disciplined cost control enabled a 35% increase in our adjusted EBITDA and with the adjusted EBITDA margin increasing by 160 basis points to 13.5% despite a less favorable mix. We delivered strong free cash flow generation in the quarter with net debt to EBITDA reduced to 1.5 times from 2.3 times last year. And if we include the ATM gaming acquisition on a performer basis, the leverage would have been two times. After the end of the quarter, we finalized the acquisition of ATM Gaming and have since then focused on a smooth onboarding. ATM Gaming will continue to operate in its independent studio while beginning to benefit from Asmodee's global scale and distribution capabilities. This includes the internalization of their distribution in France, a market we did not previously distribute directly, which is now in effect. ATM Gaming has delivered very strong growth in the recent years and the momentum has continued into 2026 with last 12 months sales at the end of March showing a double digit growth in line with our expectations. After the end of the quarter, we also acquired the remaining 45% minority stake in Exploding Kittens at a purchase price of 151 million euros. The purchase price is broadly in line with the valuation of Exploding Kittens in our Q3 report and reflects its strong operational performance. And with these words, I will now hand over to our CFO, Andrea Gasparini.

Thank you, Thomas. Good morning, everyone. Let's now take a closer look into sales for the fourth quarter. Net sales reached 407 million compared to 341 million last year, representing an increase of 19.2%. On an organic basis, sales grew by 22.3%. Perimeter changes related to the divestment of twin sales interactive had a negative impact of 0.5%, while foreign exchange remained a material headwind, reducing reported growth by 2.6%. Breaking down sales by publisher, sales of Asmodee published games decreased by 9.8%, games published by partners increased by 31.6%, and the other category declined by 12.7%, impacted by twin sales. The continuous strong performance of games published by partners was driven by the TCG releases, as Thomas highlighted earlier, thanks to Pokemon, Magic the Gathering, One Piece and Riftbound. Also, on the positive side, board games say it's increased mid-single digit with growth in all regions this quarter, with continued strong momentum in social games. In the US, sell-in to retailers was recovering progressively throughout the quarter, as their inventory levels began to normalize, supported by the commercial action plans we outlined last quarter. Looking at sell-out trends, the market remained solid during the period, with Asmodee products performing broadly in line with the category. The growth was supported by both Evergreen's titles and recent releases, including D1, Cozy Stickerville, the game that is nominated for the Spiel des Jahres 2026. The Two Towers trick-taking game of Lord of the Rings. Bloops and Dixit Kids. This positive performance was offset by two factors, down from three in the prior quarter. First, foreign exchange had a significant impact and accounted for roughly half of the decrease. Second, the normalization of Star Wars Unlimited, mainly set seven, which performed in line with our expectations. Despite a challenging year-on-year comparison base, the franchise continues to generate a substantial and recurring level of sales at each new set release and it remains a strong profitable line. We expect Comparable to normalize progressively from Q1 26-27 onwards. And please also note that the upcoming July release of Set 8 is scheduled slightly later than last year, creating a timing effect between quarters with a relatively larger contribution expected in Q2. So, to conclude, Q4 delivered an encouraging momentum compared to Q3, which should benefit games published by Asmodee going forward. Looking at the full year performance, sales reached almost 1.7 billion compared to 1,369,000,000 last year, representing an increase of 23%. On an organic basis, sales grew by 26%, driven by our diversified product portfolio and broad geographical footprint, which allow us to capture growth opportunities wherever they emerge. Moving on the profit side, we saw strong profit expansion combined with improved margins both in the quarter to date and in the year to date. Adjusted EBITDA grew by 35% in the fourth quarter, reaching almost $65 million compared to $40.8 million last year. The increase reflects the combination of factors, higher volumes, discipline cost management with personal costs increasing only by 4.2 million due to high activity but still well below the top line growth and other operating expenses increasing by 4.6 million as continued investment in marketing were partially offset by lower other operating expenses. From a profitability point of view, the adjusted ABDM margin increased by 160 basis points to 13.5, driven by lower relative operating expenses and personal costs, due to both scale effect and the timing of planned recruitment. And this was partly offset by less favorable seismics. Following an assessment of the carrying value of publishing and distribution rights, we recognize an impairment of 23.6 million, which is classified within items affecting comparability. This is a non-cash adjustment related to mainly one AP in the back catalog and reflect the regular review of carrying values across a broad portfolio of titles. Looking at our full year performance, adjusted EBDA grew by 25%, reaching 285.4 million, with margin expansion to 17%, which is a solid achievement considering the unfavorable six-mix impact observed during the entire last year, and reflecting continued progress towards our medium-term target above 18%. On a non-adjusted basis, meaning including all expenses that are part of items affecting comparability, the operating profit, the EBIT, is increasing from 117 million to 168 million euros. Moving into cash flow, free cash flow after income tax and capitalized lease payment amounted to 121 million in the fourth quarter compared to 95 in the same period last year with a cash flow conversion of 221 in line with the seasonality. Looking more closely at the working capital movement, inventory decreased by 7 million in line with seasonality, and the inventory level remained under strict control, declining from 16 to 15% in percentage of sales. And this is a quite strong achievement when we look backward to what happened during the year, including tariffs, including overstock in the US market, including Star Wars normalization. Receivables decreased by 71 million in line with the seasonality. And there as well, the ratio of receivable and prepaid expense in percentage of sales decreased from 14 to 13%, reflecting our continued focus on cash collection. Payable increased by 10 million compared to a decrease last year. This year increase is rather normative for seasonality of our business, higher activity in distributed TCGs, while last year it was impacted by items affecting comparability related to the listing, as well as some other prepayment. The capex for the quarter is minus 5 million, representing 1.1% of sales in light with the capex light model of Asmoday. So the year to date free cash flow after tax and capitalized payment amounted to 200 million, resulting in a free cash flow conversion to adjusted EBITDA of 70% compared to 60% on average over the previous four years. And as a reminder, in Q1, we will see cash outflows related to acquisitions. So first, the outflow for ATM gaming, which will result in cash outflows of 120 million. and the acquisition of the 45% of expert in Kittenza for 151 million, which will also impact the Q1 cash flow. Lastly, moving to balance sheet and net debt, thanks to the positive development of adjusted EBDA and free cash flow, the cash position reached $437 million in Q4 compared to $322 million last year. In Q3, both leverage ratio before and after M&A commitment are now below the medium term target of two times and adjusting for ATM gaming, the ratio standards two times. We still have access to the RCF by 150 million. And in light of the strong financial position and strong free cash flow generation, the board proposes a dividend of 0.17 euro per share for the fiscal year 2025-2026. And with these positive words, I'll hand back to Thomas.