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.

Thank you, Onaya. So in conclusion, this was a year in which we made a strong delivery against all our medium-term targets. We delivered organic growth in excess of 25%, significantly above our target of mid-single digits. The strong sales growth and discipline cost control enabled us to increase our EBDA margin by 30 basis points to 17%, despite the less favorable sales mix, reflecting continued progress towards our medium-term target of above 18%. The net debt on EBITDA was reduced to 1.5 times, in line with our medium-term target of below 2 times. And finally, the Board proposes a dividend of €0.17 per share. Looking forward, we continue to actively source new M&A opportunities, with this quarter bringing the acquisition of ATM Gaming, Japon Brand, and now also the remaining stake in Exploding Kittens having been acquired. The impact in the fourth quarter from geopolitical and macroeconomic pressures was limited, and we are actively managing these dynamics through appropriate mitigation measures, leveraging our experience from similar situations in the past quarters. Overall, we continue to expect growth in the coming quarters, both in board games and in trading card games, supported by the strength of our portfolio and ongoing momentum across the business. And with that, I am now opening up the floor for questions.

The next question comes from Nicholas Langlet from BNP Paribas. Please go ahead.

Good morning, everyone. Hi, Thomas, Andrea, and congratulations on the strong results. I've got three questions, please, and I will go one by one, if that's okay. The first one is on the U.S. So can you quantify the residual channel inventory overhang you face for full year 27, and how many quarters do you think it could take for the U.S. selling to reaccelerate?

Well, first of all, as we did say, the sellout that was a bit tougher in Q3 is now growing, mid-single digits slightly above from what we see. So the first very strong news is that the market is healthy. Secondly, in terms of selling, we have seen the dynamic starting already in this quarter. So we expect it to pursue in the upcoming quarters and for our performance to be in line with this.

The level of stock, Thomas comment at retailer level has decreased based on the information provided by 20%. So it's much more healthier position than what it was at the end of the previous quarter. thanks to the appropriate measures and commercial initiatives that we outline with our key partners in the US.

Okay, now three-part question on the current geopolitical tension. So first, what has been your client reaction to the recent tensions? Second, are you already seeing inputs and transportation cost inflation pressure? And if not yet, when that might actually materialize? And can you remind us what are the key actions you can take to mitigate those impacts?

So if we look, first of all, market wise and from a consumer standpoint, in moments of tensions when there are rising costs, because games are an affordable leisure, we tend to suffer less and if not take some opportunities. That's what we've seen in previous crises over the past 10, 15 years. So consumer sentiment wise, we will see Although we are always cautious, there is also, I think, opportunities for us. Secondly, in terms of the cost impact, well, first of all, our mix is currently very favorable because trading card games are manufactured very close to where they are sold, like in Europe for European countries mainly. Some are manufactured in Asia, but it's a limited one in the US for the US, etc. So and plus they are cheap to transport. So the impact on those is relatively limited. And then we will see with our partners in terms of raw material increases. But again, in the overall cost of goods, they do not represent a very significant part. For board games, we have started to see some increase in transportation costs. They did not impact Q4. If we take an example, road freight did represent roughly 20% of the cost base, and they have increased by 10%. But again, I mean, all of this is quite manageable for us. Sometimes we work on our margins, sometimes we will work with our suppliers, and sometimes we will work also on commercial action clubs. So we expect to be able to mitigate the impact.

Okay, superb. And last question on the dividend announcement. So first, is the fork installment something you want to keep permanent going forward? And secondly, what's the formal dividend policy from here? How does it flex if leverage rise again on the next Volta acquisition?

So that's rather a question for the board. They will address those at the AGM. Again, currently it's what has been, what will be submitted and clarity will probably be provided at this occasion.

We can confirm that this is an ordinary dividend, not an extraordinary one. And it is to be seen as part of the previously communicated financial target, whereby we will distribute excess cash below the ratio of net debt to EBITDA of two times.

Okay, superb. Maybe one last follow-up and then I leave the floor. Are you eligible to any repayment of tariff in the US? And if that's the case, how big it could be?

Yes, so the process has started in terms of the call for eligible refunds. For the time being, there is uncertainty around both the timing and the final amount to be approved. So this is still a little bit foggy, blurred for us, but for many, many other companies out there. So let's wait for what's next on this topic.

Understood. Thank you very much. Thank you.

The next question comes from Jacob Edler from Danske Bank. Please go ahead.

Hi, Thomas, and hi, Andrea, and thanks for taking my questions. I have a first question on Star Wars Unlimited, which remained, obviously, a headwind here in Q4. But the product seems to be approaching a territory of easier comps here. But given your flavor here on product release schedule in Q2 and stuff, can we expect it to grow already here in Q1? Or will it be kind of gradual throughout the year as we approach even easier comps

at the at the later part of the year so yeah thank you very much for the question so as you rightly pointed out the dynamics currently are are strong i think consumer reception of set seven was very good uh we have just released twin suns which has also some strong momentum As Andrea has mentioned, in Q1, the sales from the release of Set 8, that last year the equivalent was in the first half of July, this year is in the second half of July. The more material part of the sales will be moving from June to July. So you should not expect an improvement in Q1. But again, it's just timing. The game performance is in line with what we expect. However, we do expect some positive news in the upcoming quarters beyond that. I'm sorry, just to complete that. It comes with everything that has been done by the team on the metagame, on the marketing activation. Yesterday, Mandalorian and Grogu was released. We had an activation. We have hundreds of thousands of cards that are distributed in theaters in partnership with AMC. So I would say that the franchise is also in a strong dynamic right now.

Very good. Then I just have two questions on distributed TCGs, starting with Magic. Last June, so Q1, there was a record release of Final Fantasy, which at least for Hasbro drew some pretty good growth. They're still guiding for continued growth in Magic here in fiscal Q1 and fiscal Q2. Do you see the same thing? Any flavor to add there?

Well, of course, they are the ones that have the best tap into the market. So we tend to follow their expectations on this. We've seen strong results on the TMNT in the low and eclipsed in the past quarter. The lineup is strong. The Hobbit is coming up. There is several new sets that drive some attention. So I would refer to what Hasbro has communicated in their quarterly.

Very good. And then just one question on Pokemon and how we should think about the volume during the year. Would you say it's fair to assume that Q2 will be a decent kind of volume quarter given the anniversary event in September?

Well, I think we expect strong performance throughout the year on Pokemon. There is still, we saw it in Q4, continued performance despite entering into tougher comparables or more challenging comparables in a certain way. So, in our opinion, it would be spread throughout the year.

Very good. Last question from my side and then I'll hop into the queue. Just, when it comes to the seasonality on the margins and I guess top line as well within ATM, would you say that's relatively comparable to how it looks in your overall board games category? Just so we get it right here in the, you know, it's a entering the group here in a low seasonal period. So we just get the margins right.

No, you're right, Jacob. It's in line with the other board game activities with respect to seasonality, Q2, Q3 mainly. So no big deviation from that respect.

Very good. Thank you so much for your answers.

Thanks, Jacob. Thank you.

The next question comes from Simon Johnson from ABG Sundahl Collier. Please go ahead.

Hello and good morning, Thomas and Andrea. Thanks for taking my question. First, I just want to follow up a little bit on the U.S. board game performance and mainly on sort of the market, looking at the sellout volume growth more specifically. If I remember correctly, you have said that it has been more flat or slightly negative in recent quarters. And it sounds like it's a bit more positive right now. But can you expand a bit more on the trend for market sellout volumes in the U.S.? ?

So what we've seen is that if you remember in Q3, there was a lot of tension because there was the shutdown, because there was all the decisions, because there was the rising pressure on prices, etc. Which did, from what we see, transform into a quarter that was slightly flattish, slightly in decline. at constant dollar because we need to add also on our impact, the FX impact. Now in our Q4, what we saw on the market is that there was mid-single digits or not mid-single digit growth. And our sellout was in line with this. So we kind of sellout-wise overperformed the market throughout the year, if you take the entire year.

All right. That's clear. Thank you. And looking on the same metrics in Europe, would you say that that is a market that continues to be growing at around the mid-single digits range as well in terms of sell-out volumes?

Yes, it's what we see. And it's the same for the US. I mean, the fundamentals remain extremely strong.

All right, that's clear, thanks. Then I have a final one here on Japan. I think it's an interesting move to expand in Japan. But how do you view the sort of competitive dynamics in that market compared to Europe, for example, and what opportunities they're seeing in publishing compared to distribution, for example, in that country?

Yes. So Japan, the first move we have done right now with Japan Brands and with setting up Nekuma is more of a sourcing move, right? The Japanese game designers and authors market is very dynamic. If you look, for instance, in recent very successful games, Bomb Buster, which is the Spiel des Jahres from 2025, was originated from Japan. um a game like dnap that we are releasing later in the year comes from japan so they're very good also at uh at small card games and we really wanted to to i would say bolster our publishing capabilities by creating those sourcing activities distribution wise for now we are still working with local partners we have not set direct foot yet all right but in general do you be with us more

Like a more competitive market, more fragmented or consolidated? Or how do you view it on sort of publishing and developing side compared to Europe?

It's a fragmented market. It's a very strong TCG market on the local market side. But yes, there are, as I said, it's a very vivid scene.

Yeah, all right. Okay, that's all from me now, so thanks for that and I'll get back into the queue.

The next question comes from Erik Larsen from Seb. Please go ahead.

Hi and thanks for taking my questions. I have a couple. So first, I just wanted some clarification on your internally published games. I understand, as you said, that the momentum from Q3 to Q4 supports general growth in internal games. Then you obviously discussed the timing effects there in Star Wars Unlimited. But should we see sort of the, I guess, the momentum going forward in internal games? Is that sort of a mix between Star Wars and, you know, games in general? Or how would you explain it?

What we expect to see is growth in board games throughout the entire year, as it has already started in Q4. And on Star Wars Unlimited, as we did say, we have a timing effect in Q1, where there is a timing effect between Q1 and Q2. And then we should be in a stronger position for the rest of the year. There are strong product releases, as I did say, Twin Suns. There is strong consumer momentum. Latest events, there hasn't been as many stars unlimited events ever. The latest regionals, qualifiers, whether in the US or in Europe, are with very high attendance, sold out. We look forward to the Galactics in July in Las Vegas. So, yeah.

Okay, thanks. That's very clear. And in terms of categories, are you still seeing consumers more cautious with the higher ticket items, preferring the cheaper ones? You know, any specific board game categories driving the growth currently?

Yeah, I think you see, first of all, for sure, there is still strong dynamics on social games and lower price point games. However, we are also adjusting. We are adjusting pricing on certain higher price point products. We are diversifying. And this does reflect in the sellout and the positive trends that we see in the sellout.

All right, and then a final more general question on OPEX. I mean, you clearly have positive business momentum, and the outlook here sounds good. So how do you reason around the cost side? Are you expecting any material investments, or could this be another year where we see some margin expansions on the back of growth? I mean, obviously, yeah.

No, we will pursue our investment strategy related to OPEX, mainly in marketing initiatives, supporting our gains, as well as some other key strategic topics that are important for Asmodee, such as AI, IT programs, etc. So it's still ahead of us in other strong investment here from a P&L point of view. Still, having in mind the North Star of creating scale effect as much as possible on OPEX, heading towards the goal of going beyond 18%, also thanks to a positive contribution of M&A, of course, that will help. So we're still trying to find and delivering profitable growth in this next fiscal year.

Great. That was all from me. Thank you.

Thank you. Thanks, Eric.

The next question comes from Martin Arnold from DNB Carnegie. Please go ahead.

Thank you. So my first question is, I'm not sure I heard you. correctly there before on the inventory levels began to normalize in the US. Did you see this throughout the full quarter or was it like a gradual change and you expect it to be more visible in the numbers in the coming quarters? Was that a correct interpretation?

Yeah, we saw it throughout the whole quarter when we compared to the previous one, and we saw it also on all the key retailers, brick and mortars and online retailers in the US.

So the conclusion is that you see the potential for more normal growth going forward, at least relating to this previous issue.

This would at least narrow down the difference between selling and sell-out by managing a healthy inventory position at each level of the industry value chain. Then sell-out, of course, is mainly driven by other external drivers and we are working to to overperform the market as much as possible in our key geographies.

Great, thank you. And on your performance in the different countries and markets, can you explain the improved progress in the German market, where I think you were at around 20% growth all of a sudden?

Yes, it's a very positive outcome that comes with a great effort made by the German team since the beginning of the year in diversifying the product catalog where we have key assets notably on the distributed TCG landscape in Germany as well as accessories through Game Genique so all of this is clearly the outcome of very disciplined and serious strategies implemented and is now generating nice outcomes and returns.

Okay, so there's no special one-off for anything in the quarter for that market?

No, it's not a one-off.

Okay, thank you. And just a final question. You touched upon the OPEX, but could you say what you're planning for in terms of SG&A and overhead? Do you see a risk near term for a setback in margin due to more unfavorable sales mix?

No, we don't see unfavorable margin evolution due to sales mix so far. The expansion of published line should have a positive impact on the margin going forward. So I think that this fiscal year, 25 to 26, was clearly the one when we have been most negatively impacted by the sale mix, actually, and by some provisions clearly in some published line, notably in the US.

i think that we look at the future from that perspective uh positively perfect thank you very much thank you thanks martin the next question comes from adrian elmlin from nordia please go ahead yes thank you hi guys and uh good morning uh i have two uh brief questions uh just quickly here firstly the regarding the board games like could you mention how how board games grew organically during the quarter. It looks like they grew sort of 3% year over year, but could you give us an organic number?

This is mainly an organic number, bearing in mind that the acquisition made during the fiscal year on Zombicide and other Simon assets were already part of our external sales, because we've been the preferred partner of the studios over the past, so there is no perimeter effect. So beyond that, the only impact that has hit that number is the FX that was described before. That was quite a materially negative impact on the organic growth.

But then organic growth in board games should be closer to 5%, correct?

It should be in line with the more mid-single-digit trend if this FX effect would have impacted the year. So on a constant rate, yes.

Right, perfect. Okay. And then one quick question on the IP, the impairment here. What triggered impairment at this point in time? And are there any other sort of, what should we call them, high-risk IPs that you have left in the portfolio?

Yeah, no. So it's, as we said, it's an IP that is part of the back catalog. We're not talking about any pillar games, core IP. It's related to the fact that the intangible allocation is something that comes from also from the past and the origin of Asmodee. even before spin-off. So it's part of some IP lives where the life cycle of the games sometimes is not as linear as the accounting rules expect it to be. So nothing to be worried about.

Okay, perfect. That was all for me. Thank you. Thanks, Adrian.

The next question comes from Ricardo Chanchilla from Deutsche Bank. Please go ahead.

Hi, thank you so much for taking my questions. Most of my questions have already been answered, but just have a quick one related to M&A. You know, pause the recent transactions how would you characterize your willingness to look for additional M&A opportunities in this space? What are the characteristics of those potential M&A opportunities? And regarding the interested buyers and sellers, have you seen any changes with regards to their willingness to engage in a transaction over the last three months? Thank you.

Well, I would say we are delivering on our M&A strategy and it's not because we have done significant moves in the recent months that we will not pursue. So yes, the general idea is that we will continue to pursue and with the same priorities that we have set in the past. So it's first on IP and publishing capabilities. I think that we have strengthened quite well our social games, but we will continue to look at opportunities across all play types that we have from social games to lifestyle games and tabletop games. And I would say that The discussions we have are still as active as they were. We have demonstrated our ability to do various sizes of deals, which is also a very strong signal to potential people that would like to join the Asmodee adventure. And so I would say that our M&A strategy continues and will continue to unfold the way we have been doing it for more than a decade, and we're very proud of having been able to reignite it in the past year.

Thank you. A follow-up with regards to leverage targets. Do you feel like the current environment makes you more confident to increase leverage on a potential M&A transaction that is strategic in nature or that is something opportunistic? Or do you feel like your current target you know, are aligning the sand that you would want to remain, you know, tied to, you know, these current, you know, leverage expectations. Thank you.

Well, what we've said is that two times leverage is our sweet spot, anything below that. But again, it doesn't prevent us from temporarily going beyond to fund some strategic investment, especially M&A, because we are a growth company and we would expect to deliver pretty rapidly afterwards. So the short answer is, is it a fixed rule? No, it's a general sweet spot. We can deviate from it when it makes industrial sense, knowing that we would expect to go back to the normative's ambition on this pretty rapidly. Thank you so much. Thank you very much.

The next question comes from Rasmus Engberg from Kepler Shoebrew. Please go ahead.

Yes, hi guys. Just one question really. Can you outline the bridge in ATM gaming where the revenues are growing last year at something like 34 million towards your expectation of 50 million this year? What are the components of that and how does it play out over the year?

But it's full organic growth based on the existing portfolio and the very strong sales dynamic that they have in the existing territories where they are, but also expanding their international reach with the support of Asmodee. And then... I would say that the dynamic is strong because if we compare, as Andrea said, the last 10 months, end of December, and the last 12 months, end of March, we already see a double-digit growth just with one quarter. So the dynamic remains extremely strong and will deliver throughout the entire year. Okay.

And that is, you know, that's only the existing plans to expand potential distribution. It's not any synergies at all in that, right?

There is nothing what we have communicated that's there organic. And then we do have on the, I would say, broader Asmodeus side some synergies, especially, for instance, the distribution in France that we have picked up at the end of April.

All right, thanks. That was my only question remaining. Thank you. Thank you very much.

There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Yes, we have a few written questions. The first one is, is Asmoday still primarily a board game publisher, or is it increasingly becoming an infrastructure company for trading card games, pop culture licenses, and social games? We have insisted a lot on the fact that one of the strengths of Asmodee is to be a publisher. But the first strength that we do have is our global reach across all categories from TCGs and board games. That's the superpower of Asmodee. And then being a very strong publisher is a way of accelerating performance. So I would say that there is no change. We continue to capture opportunities across the board wherever they come from. And I think that effectively looking first at an angle from board game dynamics overall linked to the market and TCG's dynamics is a good strong angle. And then the angle of who the publisher is, is more a question of margin contributions and margin evolutions. But again, our aim is to be a dominant player, bringing all games to the market anywhere they can. We have a second question, which is, considering that games published by partners account a lot, being the main commercial driver, can you give some more details about the legal framework of those relationships? So as we did say, in our industry, we sometimes have contracts. We sometimes do not have contracts, sometimes just have terms, et cetera. What's important to understand is that board games and games in general are not so much a commodity. What I mean by that is that the relationship between a publisher and its local distributor or distributors is usually a long-lasting relationship. It's quite seldom to move from one distributor to another unless there is strong disagreements. So, In short, I would tend to say that the contractual relationship is actually not a topic for us. The real topic is to continue performing and delivering on our promise to our partners. And this will continue to drive having existing partners continuing to work with us for decades and having new partners joining us in this relationship. And then there is a last question, maybe for you, Andrea, which is, is it possible to share the FX impact for games published by Asmodee, given the US presence?

Yes, of course. So games published by Asmodee Studios year to date decreased by 5.8%. of which two-thirds is due to FX. And on the quarter to date, minus 9.8%, of which almost half of it is due to FX. And in both cases, the split and the breakdown by currency is mainly driven by US dollar or Canadian dollar denominated currencies.

that's it for the questions before we close I want to sincerely thank our teams they are the heart of the business our players our partners across retail publishing and licensing for your contribution to a very successful year thank you for joining us today and we look forward to seeing you in various meetings in the upcoming days and weeks thank you very much