Enad Global 7 AB (publ)

Good morning and welcome to this Q1 earnings call with EG7. My name is Ludvig Andersson and I will be your moderator during this call. Together with me to present, we have the company's CEO, G. Hum, and Deputy CEO and CFO, Fredrik Ruden. After the presentation, we will have a short Q&A session, so please feel free to email your questions to the Investor Relations email. But now, without any further ado, over to you, G. Great. Thanks, Ludvig. Let's go to the first slide.

We're off to a great start this year. Q1 is off to a nice start with 455 million SEC of net revenues, which represents a 19% growth year over year from last year. Same thing for adjusted EBITDA, also grew by 19% to 74 million SEC, 16% margin, maintaining the same margin as last year. Next slide, please. Some of the highlight for the quarter, it's a great quarter for Fireshine leading the charge with net revenue coming in with 214% growth year over year, largely driven by the robust physical release state for the period. We have Sniper Elite resistance from Rebellion, I'm also the first berserker Kazan from next on both double a highly acclaimed titles that perform really well. That catalog portfolio portfolio for Firesharing continues to perform well with core people leading the way 70% growth year over year. Also completed successfully a placement of our bond offering raised 350 million sec of unsecured bonds three year term with a coupon of Stybor plus 625 basis points. and we have up to a billion SEC of potential borrowing there to the extent necessary, and we have an opportunity for use. It does improve our liquidity quite significantly and provides that flexibility that we've been looking for as we're searching to accelerate growth with M&A and investment targets. Additionally, we did complete our cost optimization across the organization with Todman, Petrol, and Piranha, and the annual savings here is expected to be approximately 88 million SEC. Next slide, please. A highlight after Q1, we have Paley app from Singularity 6 that successfully launched just two days ago on Tuesday. Now it's on PlayStation 5, Xbox Series X and S. Large expansion that came out with it called ElderWood, significant content update for the existing player base as well as the new. Now with this availability across all major platforms, we're looking forward to seeing a robust roadmap being rolled out to continue that long-term growth. We expect this game to be a long live service, similar to a lot of the existing live service games that Daybreak has. where we expect to build from here on out. So potential for nice revenue growth contribution going forward, as well as great profitability, where we have multiple years of potential success with this title. So we're very excited for this release. Next slide, please.

Over to you, Frederick. Thank you. Next slide, please. Net revenue in the first quarter was 455 million and adjusted EBITDA was 74 million, representing 14% FX neutral organic growth and 16% adjusted EBITDA margin. The net revenue over the past 12 months continued to increase and reached 1,787,000,000. which is the highest since q124 where q three quarters of our all-time high year 2023 was included ltm adjusted ebitda margin came in at 19 corresponding to past year's quarterly average next slide please As we said a few times, we do have a foundation of more predictable revenues and cash flows. More predictable revenues comes from the live service and back catalog titles. Net revenue from this portfolio was 390 million, corresponding to 70% of net revenue for the group. Over the last 12 months, net revenue amounted to 1,787,000,000, of which 1,269,000,000 derives from the more predictable revenue base. That portion of our revenue has been trading at 71% to 74% in the past five quarter. And if you don't fully recognize these figures, it's due to that we in Q1 slightly adjusted the definition and the comparable figures. Next slide, please. So Daybreak is the largest contributor to our net revenue and the largest contributor to this portfolio of more predictable revenues, generating 190 million in net revenue and the adjusted EBITDA came in at 30 million. corresponding to 16% EBITDA margin. First quarter 25 is a quarter with limited new releases for Big Blue Bubble, who generated 66 million in net revenue and is our largest contributor to the adjusted EBITDA of 33 million this quarter, corresponding to a 50% adjusted EBITDA margin. Next slide, please. Pirana delivered a net revenue of 19 million with an adjusted EBITDA at 3, corresponding to 17% margin. The cost savings measures initiated in the beginning of the year are expected to, on an annual basis, save 26 million. First quarter was a bit soft, but May 8, the last DLC for CLANS was successfully released. and the winding down for Toadman is underway and is expected to generate annual savings of 46 million including last year's savings we have on an annual basis saved approximately 100 million in Toadman to be recognized in full second half of 25. next slide please Following the continued active release pipeline, Fireshine delivered its highest net revenue over the past five quarters. Net revenue increased to 145 million and adjusted EBITDA was 22 million, corresponding to 15% adjusted EBITDA margin. And following the business optimization efforts executed in the beginning of the first quarter, petrol generated 36 million Next slide, please. So this is a new slide that we did for the bond investors to show the past two years, 23 and 24, capital generation and usage. And during these two years, we operationally delivered half a billion in cash operationally. And we invested 400 million in new growth initiatives and made us debt free by repaying the remaining 100 million in RCF, which we had in the beginning of 23. What we also show in this slide is that the maintenance investments in Daybreak's and BigBlueBubble's portfolios are as low as 1.1 to 1.4 percent of the net revenue. So investments to protect our more predictable revenues are fairly low. Next slide please. And during 24, our investment in these new growth initiatives, which is Clons, Pelia and the corporation we call Iron, peaked at 238 million. They are expected to be around half of that in 25. And in Q1, we invested 44 million in the two remaining projects. In addition to the investments in the new growth initiatives, we invested 35 million, of which 18 in Fireshine publishing activities. The maintenance investment in the old portfolios in BigBlueBubble and Daybreak is corresponding to 1.1% to compare with previous slide. During the quarter, we issued a 350 million unsecured bond, as Yi mentioned, which gave a cash box of 579 million by end of the first quarter. And looking at the cash flow from operation, it was fairly low at 18 million. And this is to a great extent explained by negative working capital movements of 38 million. And negative working capital movement each Q1 is normal seasonal pattern for us following a high activity quarter. And the royalties and platform fees that we need to pay after such quarters.