Enad Global 7 AB (publ)

Good morning and welcome to this presentation of EG7's first quarter for 2023. My name is Ludvig Andersen and I will be your moderator here today. Together with me to present, we have the company's acting CEO Yiham and the company's deputy CEO and CFO Fredrik Ruden. After presentation, we will have a short Q&A session. So if you have any questions, please feel free to email them to the company's IR email. But now, without any further ado, over to you, Yi.

Thanks, Ludvig. Good morning, everyone. Thank you for joining us. We have some excellent results to share. Let's go to the next slide. Well, we started out the year very strongly for Q1, with Q1 net revenues coming in at 572 million SAC, representing 43% growth. And adjusted EBITDA was very strong with 190 million SAC, representing 33% margin and almost 80% growth year over year, and strong operating cash flows of 171 million SAC. And all of these results represent all-time highs for the group, which we're very excited to report. And the group is in its best financial position since inception, with significant cash on the balance sheet with $450 million in SEC. And additionally, we have fully paid down our debt, and we no longer have any bank debt remaining at the holdings level. Next slide. Big blue bubble continues to be a highlight for us with a solid performance throughout Q1. Additional growth on top of Q4 results with net revenues and EBITDA, 218 million SEC of net revenues and 133 million SEC of EBITDA representing 61% margin. In December 2022 was the peak, along with the viral uptick in My Singing Monsters, but we are seeing a nice follow through for Q1 with continuing momentum generating the additional growth from Q4 levels in Q1 this year. We do expect ultimately that My Singing Monsters will settle down. at a higher normalized baseline compared to pre-step up in this performance, which we will communicate further as we see additional data. Next slide, please. Some additional KPIs for My Singing Monsters to demonstrate the sustaining performance with strong user engagement. Over 7 million new users came in in Q1, representing all-time high daily active user base for Q1 with 1.63 million average for the quarter. And this higher average daily active user in Q1 does demonstrate this continuing solid engagement and retention trend for the title, which we're very happy about. And we have some exciting updates planned for the second half of the year with the anniversary and the holiday events that will be coming up. And the team continues to work very hard to deliver additional compelling content for all of its user base. to sustain and retain and engage the user base that has expanded along with this final update over Q4 as well as Q1. Next slide, please. On the segment side of things, a gaming segment operational highlights net revenue for the quarter came in at $475 million SAC, representing 86% growth. On an FX neutral organic basis, 69% growth. Adjusted EBITDA of $194 million SAC, which represented 129% growth year-over-year and 41% margin. As noted, my singing monster. 70% of adjusted EBITDA for the segment. Daybreak is continuing to perform very steady and stable with this portfolio of live service games. Net revenues came in at 201 million SEC, a slight decline from the year before, and adjusted EBITDA margin sustaining at 26%. And Piranha, since joining the group, delivered this best quarter ever with net revenues coming in at 51 million SEC. The fourth DLC that came out for Mac Warrior 5 in January was a nice success for the group. Along with that, Piranha continues to make nice progress on the work for hire strategy, recently signing a new contract with VLU in excess of 100 million SAC to be earned over the next 18 months. Next slide, please. On the service segment side, net revenue came in at 97 million SAC, representing a decline of 33%. Adjusted EBITDA was 8 million SEC, representing an 8% margin. Q1 net revenue decline compared to the year before was primarily due to two reasons. One was related to a different product lineup with Fireshine having delivered a nice success with CoreKeeper in Q1 2022, but no longer have that impact for 2023. and additionally for 2023 early part of this year a slower and lighter pipeline compared to last year having said that fireshine is performing according to plan no big releases were planned for q1 and the remainder of 2023 pipeline is strong and we're looking forward to getting additional products delivered throughout the year and then on the indie digital public side of things Fireshine released a game called Shadows of Doubt in April as an early access title on Steam, which has performed nicely, tracking a 92% positive rating on Steam, which is phenomenal. And we're looking forward to that title coming out, ultimately out of early access and contributing meaningfully to Fireshine and overall group's performance. On Petro's side, they do what they do best, continuing to work with top publishers and developers representing a mighty Doom launch in Q1 with over 10 million trailer views and more than 3.3 million units shipped for the first two weeks of release, and working closely with Digital Extremes on Warframe's 10th anniversary brand identity campaign. and of course, maintaining and working closely with Activision on Call of Duty franchise with the launch of the new season of Call of Duty Wars on 2. Next slide, please.

Over to you, Frederick. Thank you, Yi. Next slide, please. So as G said, the net revenue in Q1 was 572 million Swedish kronor, which is a growth of 43%. FX neutral organic growth is 31%. Based on the high margin revenue mix, the EBITDA margin was as high as 33%. The net revenue and EBITDA over the last 12 months continue to show constant increase from one consecutive quarter to the other. By end of Q1, LTM net revenue amounted to 2 billion 38 million, corresponding to an increase of 30%. This growth is driven mainly by strong operational performance, but also FX and M&A activities. The strong margins of Q4 and Q1 has had a natural positive effect on the LTM adjusted everyday margin, which came in at 28%. Next slide, please. Net revenue of the last 12 months in the game segment was nearly 1.5 billion Swedish kronor, corresponding to growth of 54%. explained again by strong organic growth from BigBlueBubble, but also M&A and FX. In this segment, we have our live games portfolio, which is the foundation for a more stable and predictable revenue and cash flow. Net revenue from these assets amounted to 423.8 million, corresponding to 74% of total net revenue in the quarter. In the last 12 months, net revenue from these assets amounted to 1.3 billion, corresponding to 64% in total net revenue. The last 12 months, net revenue in the service segment amounted to 575 million, corresponding to a decline. As previously communicated, the service segment is volatile. to some extent hit live and resulting in revenue fluctuations between quarters. Next slide, please. Looking at the more stable gain segment, we see a steady growth, which has been much stronger in Q1 and Q4, following the great success of Meisinger Monitors. Daybreak is normally the single largest contributor to the group and the largest contributor to our more predictable revenue base, generating 201 million in net revenue and 52 million in adjusted EBITDA, corresponding to 26% EBITDA margin. Big Blue Bubble generated 280 million in net revenue and 133 million in adjusted EBITDA. which is an EBITDA margin of 61%. Piranha has had its best quarterly performance ever, with a net revenue of 51 million and adjusted EBITDA of 23. This, as Ji mentioned, comes from successful launches of different DLCs to Macquarie 5, and the latest one was DLC 4 in January. Furthermore, Pirana successfully deliver on groups work for hire strategy and sign this new contract that will bring 100 million over 18 months. Toadman and Demeter gains also included in this segment, and they continue to pivot towards work for hire. But until further notice, they also conclude their ongoing activities. Next slide, please. The service segment is, as said, volatile. First half of the year, last year, the segment had a strong momentum, coming out from the pandemic delays and flavor with a successful digital hit that was released in 22. This gave a strong contribution, specifically in the first half of the year. Faishan had a stable quarter, mainly attributable to the continuity in the digital publishing success. The company generated 48 million in net revenue and 2 million in adjusted EBITDA. This corresponds to a lower than expected margin. Faishan continues to add to the strong pipeline. And as you mentioned, the shadow of doubt has been a success so far with over 90% positive reviews on Steam. But we anticipate Firesharing to mainly be dominated by lower margin physical releases in the second half of the year. Looking at petrol, they generated 49 million in net revenue and 6 million in adjusted EVTA. Next slide, please. And... April has started with 154.6 million in net revenue. We expect to reach 2.2 billion in the full year, with a margin around 23 to 25%. And there are some items that we write about in the report that you need to kind of understand here. And one is this rollover effect from high activity quarter. that is a seasonal natural effect that we always have specifically we see that in q1 and this q1 the effect is 35.6 million we also have 42 million positive fx effects in q1 and it's expected to turn negative throughout the remainder of the year Looking at net capitalization during the year, this is expected to be 18 million under last year's level, which negatively affecting our margins, but not the cash generation. And this is mainly explained by the transition to work for higher, but there are also other reasons for this. And then again, Firesharn will generate more physical revenues throughout the year, which has a lower margin. And as you see in the chart, Meisingen Monster had a very strong uptick in Q4 and Q1 with an activity peak in December. And we expect normalized baseline above the level prior to the viral uptick, so above the Q1 to Q3 level last year, but it's too early to judge exactly where that will show. So we will come back with that later. Next slide, please. Looking at the net debt and EBITDA ratio and cash, again, then fueled by the successful divestment of Innova and continued improved operational cash flow and lower investments uh we have had the positive cash situations in q3 and the net cash is 448 million excluding cash components for earners ifs 16 and some smaller items and including them we have this 365 that you see in the slide the strong operational cash flow continued to improve q1 following the great success of my singing monster them To further optimize the capital structure in the group, we repaid the remaining 100 million of our rolling credit facility in February. This improves our net for financial items with approximately 20 million on an annual basis. Meanwhile, we still have an attractive flexibility with an unutilized 400 million facility to be utilized if we want. We have also now in Q2 started to gain interest on our liquid funds through active low-risk capital deposits. Looking then in the Q1 cash flow, we see that from operation we have a strong cash flow of 171 million. The cash is drained by investments of 18. In those 18, we have a positive amount of 8. following the divestment of Innova. So it's a remaining purchase consideration that was settled. So the underlying investment is actually 8 million higher than those 18 that you see here. Financing then, minus 107, and then there you have those 100 that we repaid in February. So all in all, we increased the cash with 45 million up to 453. So we have a strong balance sheet with plenty of opportunities. And opportunities to use the cash. And we will come back on that topic later. But not in this presentation, though. So over to you again, Chi.