Asmodee Group AB (publ)

Good morning, everyone, and thank you for joining us for our presentation of Asmodee's first quarter results for the fiscal year 26-27. We have made a very strong start to the new fiscal year, delivering double digit growth in both sales and earnings while continuing to strengthen our profitability and generate healthy cash flow. What is particularly encouraging is the breadth of this performance. We deliver growth across categories, geographies, and our publishing portfolio with both our own studios and our publishing partners contributing to a very strong start to the year. With that, let's look at some of the commercial highlights from the quarter. Let me start with board games, which were one of the key contributors to our strong performance this quarter. We delivered double-digit growth with all continents contributing, reflecting the strength of our diverse portfolio. which combines evergreen franchises with successful new releases and expansions. Our evergreen franchises continue to perform very well, led by titers such as Catan and DoubleSpotIt with recent releases, including DINUP, The Lord of the Rings, Fate of the Fellowship, and Cozy Stickerville also contributing to growth. Expansions for Harmonies and Heat further supported the quarter, demonstrating our ability to continue growing both established franchises and new titles across multiple markets. Turning to trading card games, this category also delivered another very strong quarter with robust demand across our portfolio despite a demanding comparison with last year and the World Cup. Growth was supported by successful releases across several leading franchises. Pokémon once again delivered a very strong performance. Magic the Gathering continued its strong momentum alongside Riftbound, the League of Legends TCG, which also saw the rollout of its French edition. Star Wars Unlimited also contributed to the category. Last week, we had the second edition of the Galactic Championship, the international competition crowning the best Star Wars Unlimited players. The event saw over 3,000 visitors from more than 35 countries gathering and engaging with Star Wars Unlimited at the center of their experience in Las Vegas. For those interested, we've also included an overview of the Trading Card Games release schedule in the appendix. It provides a good illustration of the diversification of our catalog as well as the strong cadence of launches we've seen across the category over the past year. Alongside the strong operational performance, we continue to execute on our strategic priorities during the quarter. The integration of ATM gaming has started well and is progressing in line with our expectations. Beyond the acquisition itself, we have already begun deploying our distribution model across additional markets, and we're pleased with the initial commercial performance of the business. We also completed the acquisition of the full publishing rights of Time's Up, further strengthening our portfolio of our own intellectual properties. Our other recently acquired IPs also continue to perform well. We launched Zombicide's first crowdfunding campaign as part of Asmodee. Over 11,000 fans committed to the campaign for a total of more than 3 million euros. This demonstrates the continued strength and engagement of Zombicide's fan base and the first success of our crowdfunding team. Beyond our portfolio, we continued investing in the long-term development of the tabletop gaming category. During the quarter, we published the first Kantar Asmodee Board Game Barometer, providing new consumer insights that reinforce our confidence in the long-term attractiveness of the market. We also continued to broaden our trading card games portfolio through the new distribution partnerships and additional lines including the new Naruto trading card game from Bandai. These further diversify offering and reinforce our position as a leading partner for TCG publishers with additional new distribution opportunities expected in the span of the current fiscal year. Looking ahead, we remain excited about our upcoming release pipeline and continue to see attractive opportunities to grow both organically and through disciplined partnerships and acquisitions. Turning now to the quarter as a whole, we deliver net sales of 422 million euros representing a growth in excess of 20%. Performance was broad based across the business with growth across publishing mix, categories and continents. ATM gaming also delivered a strong start of the year in line with our expectations. The strong commercial performance translated into significantly improved profitability. Adjusted EBDA increased to €61.9 million, with the margin expanding by 330 basis points to 14.7%, reflecting the scalability of our business model together with continued cost and inventory discipline. At the same time, we generated healthy free cash flow, enabling us to further strengthen our balance sheet and credit profile, maintaining financial flexibility despite the acquisition activity made in the quarter. With that overview of the quarter, let me now hand over to Andrea, who will take you through the financial performance in more details.

Thank you, Thomas. Good morning, everyone. Let me begin with our sales performance for the first quarter. Net sales reached 422.1 million, representing growth of 20.9% or 20.2% organically. Exchange rates had no material impact during the quarter, whereas perimeter changes contributed to 0.7 percentage point, reflecting the addition of ATM gaming. Let me briefly explain the ATM contribution. As a reminder, we finalized the acquisition of ATM on 8th of April, triggering a change in perimeter. Since closing, our teams are taking care of the studio and the onboarding is moving on according to plan. For example, the internalization of the distribution in France was done in end of May and we have successfully entered in the Netherlands and in Belgium. From an accounting point of view, this is relevant because during the quarter, ATM primarily sold to Asmodee distribution entities rather than directly to external customers. Under consolidation rules, those intercompany sales are not recognized until the product reach the external customer. On a standalone basis, ATM generated around 10.5 million of revenue during the quarter, in line with our expectations. So, to summarize, around one-third of ATM Q1 sales was recognized in Asmodee consolidated net sales and around two-thirds is sitting in inventory within our distribution network and will flow through to consolidated net sales in the future. Importantly, this is a timing effect, not related to consumer demand. Sell out at retail of ATM product exceeded 60% in Q1 versus Q1 last year. So this inventory in our deals is expected to rotate quickly. Board game grew by 16% with around 40% of the growth coming from games published by Asmodee supported by evergreen titles, expansion and new releases. ATM gaming acquisition contributed approximately 20% of the growth and around 1 third came from distributed board games. Growth was broad-based across geographies and further supported by the continued normalization of retailer inventory levels in the US and growth in long sellers, including the release of Catan on the road. Trading card games deliver another very strong quarter with sales increasing by 23%. Looking at the mix, partner published games increased by 27%, driven by the continuous strength of distributed TCGs. Games published by Asmodee Studios increased by 1.8% on a reported basis and were broadly stable organically. The strong board game performance was offset by the timing of the latest Star Wars Unlimited release with the greater share of sales recognized in the second quarter of this fiscal year compared with the first quarter of last year. Finally, the other category benefited from growth on board game arena and licensing activities. Moving to profitability, we delivered another strong quarter with adjusted BDA increasing by 55% to 61.9 million. The primary driver was of course the strong sales performance, but at the same time we continued to benefit from scalability of our operating model as higher revenue translated efficiently into earnings. The addition of ATM gaming had a limited impact on EBITDA due to the temporary timing effect already mentioned. From a cost perspective, lower inventory allowances as a result of improved inventory management and lower royalty costs contributed positively during the quarter, while we maintained disciplined control over personal costs and other operating expenses despite continued investment in the business. As a result, the adjusted EBDA margin increased by 330 basis points, reaching 14.7% compared to 11.4% last year. Importantly, our last 12 months adjusted EBDA margin has now increased to 17.5%, moving us another step closer to our medium-term ambition of achieving an adjusted EBDA margin above 18%. Finally, below adjusted EBDA, items affecting comparability amounted to 1.3 million, reflecting tariff refunds on previously paid duties. We expect to benefit from additional tariff refunds in the coming quarters. Turning into cash flow, we generated 37.5 million of free cash flow after income tax and lease payment compared with 24.7 in the same period last year. This corresponds to a free cash flow conversion of around 61%, broadly consistent with last year. The improvement was primarily driven by higher adjusted BDA, partly offset by our income tax payment, reflecting the stronger earning performance. Working capital development is expected for this period of the year. We saw the usual seasonal inventory build up ahead of future sales, together with higher trade receivables reflecting the increase in revenue. This movement were substantially offset by higher trade payable resulting in an overall neutral working capital development for the quarter. Finally, let me turn to balance sheet. We ended the quarter with the net debt to adjust the BDA of 1.6 times before M&A commitment and 1.7 times after M&A commitment. both ratio improving compared with the same period last year. The improvement reflected the combination of higher last 12 months ABDA and continued healthy cash generation, which more than offset the cash outflows associated with the acquisition of ATM gaming and the remaining stake in exploding kittens. At quarter end, cash and cash equivalent amounted to 196 point five million euro. While lower than last year due to the acquisition activity, our liquidity position remains strong. During the quarter, we also further strengthen our financial flexibility by establishing a new 20 million unsecured committed credit facility alongside with our existing 150 million RCF. Following the end of the quarter, all three credit rating agencies upgraded our rating by one notch. We now hold the ratings of BB with stable outlook from both S&P and Fitch and BA3 with a positive outlook from Moody's. These upgrades reflect the continuous strengthening of our financial profile and provide further validation of the progress we have made over the past year. With that, let me hand back to Thomas to conclude today's presentation. Thank you Andrea.

To conclude, we've made a strong start to the 26-27 fiscal year. Growth was broad-based across both our own games and distributed games, across board games and trading card games, with all continents contributing to the performance. That again continues to demonstrate the strength of our diversified business model and the resilience of our portfolio. Alongside the strong commercial performance, we delivered a significant improvement in profitability, healthy cash generation, and continued to strengthen our balance sheet and credit profile. At the same time, the integration of ATM gaming is progressing well and in line with our expectations, with multi-territory deployment of our dual distribution playbook. Looking ahead, while we continue to monitor the macroeconomic situation closely, we believe we are well positioned to navigate the current environment. We continue to expect growth across both board game and trading card games, supported by a strong release pipeline and by new partnerships. We also look forward to the Pokémon's upcoming 30th anniversary activations. Finally, we remain firmly on track towards our medium-term ambition of delivering an adjusted EDA margin of above 18%. With that, thank you very much for your attention. Andrea and I would now be happy to take your questions.