Enad Global 7 AB (publ)

to EG7 second quarter earnings release. My name is Fredrik Rydén, Deputy CEO and CFO. And with me, I have the company CEO, Ji Ham. We will start this session with a presentation and end it with a Q&A. And I hand it over to you, Ji. Thanks, Fredrik.

Thank you all. Good morning for joining us. We'll start with the key performance figures. Next slide, please. For the second quarter, net revenues came in at 379 million SEC with adjusted EBITDA of 38 million. Performance improved year over year. Net revenue grew by 7.4%. Currency movement has impacted our result pretty significantly this year. Without the FX effect, net revenue grew by 17.2%, and organic growth came in at 6.7% when you exclude FX as well as the contribution from Talia. Adjusted EBITDA grew by 12% year-over-year, and margin came in around 10%, a small increase from last year. Next slide, please. Paleo release was the main highlight for the period. A successful release on PlayStation 5 and Xbox on May 13 contributed 38 million SEC of net revenue for the second quarter, and that represents around 200% increase quarter to quarter. All the major KPIs saw significant increases, live-to-date downloads of over 8 million. and 215,000 peak daily active users representing more than three times the level before release, and 1.2 million peak monthly active users. For July, average daily revenue came in at three times the 30-day average before the update. The team has an exciting roadmap ahead with continuing build of the momentum for the game. We have Animal Husbandry feature releasing shortly in September, multiplayer co-op housing feature targeted for the first half of 2026. Content update will also see a more robust update going forward. Currently, monthly updates are going out, but we will be including larger quarterly content as well, which will reflect the seasonal changes. And just as we just released the Elderwood content update together with the console release, we intend to have big annual expansions during spring summertime going forward. And with the right approach and execution, we are very excited that we have an opportunity here to be able to establish Palia as one of the leading cozy games globally. So far, Palia has attracted over 8 million users. And we have some big titles in the genre with Animal Crossing New Horizons, a cozy game from Nintendo, which sold over 48 million units just on the Nintendo Switch. And you have Stardew Valley, a multi-platform indie title that has sold over 41 million copies. And then The Sims 4 from EA, which had over 85 million players live to date as of last year, which is likely higher now. So based on the player base of these titles, this illustrates the overall market potential for the genre and combining Paleo's quality gameplay with the unique differentiation that Paleo brings, which is the it's the only large scale multiplayer online cozy game in the marketplace. And our aspiration is to be able to take Paleo out and then establish it as one of the biggest and the best in the genre going forward. Next slide, please. Additional updates for the period. We have Piranha successfully releasing its first DLC for MechWarrior 5 plans. Performance was good in line with expectations. Early trends are on target compared to prior DLCs for MechWarrior 5 Mercenaries. Next up is the DLC 7 for Mercenaries coming up in September and future plans for additional DLCs for both clans as was Mercenaries will be announced thereafter. Cold Iron Project. Project is making good progress, steady, positive progress. It's in the final stages of development and subject to progress. We're aiming to share official announcement around the timing of the release in the near future. On the strategic M&A front, we're continuing to see a flow of special situation opportunities in the marketplace. To date, we have evaluated several, but passed on most of them. Interesting opportunities, but we haven't liked the balance of risk and reward profile for most. And current marketplace, when you look at the climate, it's a tale of haves and have nots. So at the very top of the markets, when there's headlines relating to the biggest guys, they are showing good performance and they're doing very well, benefiting from their established franchises. But when you look at the mid to lower end of the market, the market remains quite challenging. Still too much supply and volume. And currently there's just not enough capital availability to fund a lot of these games to completion. As a result, we do expect additional rationalization in the marketplace, especially in the mid to lower end of the market over the near term. And EG7 as a group, we feel like we have a good position currently to be able to target opportunities as they come up, given our solid financial standing as the market continues to rationalize over the coming quarters. Next slide, please.

Over to you, Fredrik. Thank you, Ji. Next slide, please. Net revenue in the quarter was 379 million, up from 353 in the comparable figure last year, representing 70% FX-neutral organic growth. Adjusted EBITDA was 37 million, which gave a 10% adjusted EBITDA margin. LTM net revenue over the past year shows steady improvement and reached 1 billion, 830 million, 13 million, sorry, representing growth over the past four consecutive quarters. The LTM margins are stable and the adjusted EBITDA margin was 19%, which is what we've had over the past five quarters on average. Next slide, please. We 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 290 million. corresponding to 77% of the net revenue for the group. And over the last 12 months, net revenue amounted to 1,813,000,000, of which 1,276,000,000 derives from this portfolio. The portion of revenue has been stable at 70 to 74% in the past five quarters. Next slide, please. Both Daybreak and Bibliobubble are negatively impacted by currency fluctuations. If adjusting for it, they would both show an increase from Q1. I will get back to this later in the presentation. So Daybreak is the largest contributor to the net revenue, generating 190 million. The adjusted EBITDA came in at 2 million, corresponding to a low 1% EBITDA margin. The lower margin was primarily driven by 37 million additional cost of the capitalization from acquired entity of which 10.5 million was marketing expenses in conjunction to the release of elderwood expansion. Singularity VI capitalized a significant part of their cost up to the release date of elderwood. We expect capitalization to increase in the preparation of the next major upgrade for Palia. Second quarter included the full eastern campaign for Big Blue Bubble, who generated 61 million in net revenue and contributed 25 million to the adjusted EBITDA, corresponding to 41% adjusted EBITDA margin. Next slide, please. Piranha delivered a net revenue of 23 million with an adjusted EBITDA at 13 million, corresponding to 55% margin. The executed cost savings measures had a positive effect on margin. Meanwhile, net revenue was helped by the successful release of the first DLC for clones, which came out May 8. The winding down of Todman was completed according to plans in the beginning of the third quarter. Next slide, please. The strong release pipeline for Fireshine in the first quarter was followed by a fairly slow second quarter. Net revenue in Fireshine was 74 million and adjusted EVTA was 3 million. Petrol has been profitable following the business optimization efforts executed in the beginning of the year. Petrol generated 30 million in net revenue with a 3% adjusted EBITDA margin. Next slide, please. We have experienced some strong currency fluctuations in the second quarter. and they totally amounted to 36 and a half million mainly hitting daybreak and big blue bubble and what I would like to highlight here is that we consolidate on accumulated figures which means that we will see a revaluation effect on previous quarters to be recognized in the most recent quarter So what we see in 2025 is that we have a positive FX effect in Q1 of six that will then be revalued in Q2 to 36.5 million. So for the full period, the first six months, the effect is 30 million negative. But the effect is stronger in Q2. That is what I'm trying to show here. Next slide, please. After issuing a 350 million unsecured bond in Q1, we started the quarter with a strong 579 million opening cash balance. The working capital movement has so far for the year, and for several different reasons, been negative. We expect this to balance out over time. During 2024, our investment in what we call new growth initiatives, clones and paleo, and Cold Iron peaked at 238 million. And now we invested 49 million in Palia and Cold Iron, who are the two remaining projects here. And second quarter ended with a cash of 455 million and a net cash position of 102 million. And then I hand it over back to you, Jim. Thanks very much.