Embracer Group AB (publ)

Hello and a very, very warm welcome to the presentation of Embracer Group's fiscal Q4 results. We have a lot to talk about today, including the successful release of Tiny Tina's Wonderlands, a pipeline of over 30 AAA titles, as well as the consolidation and strong growth for Asmodee here in Q4. We also have quite some familiar faces with us here today and some distinguished guests from France and the US. We'll start with the presentation of the Q4 results. Then we'll have a presentation by Asmodee's management. and I will come back for a Q&A after that. But without further ado, I'll leave it over to Group CEO and Founder Lars Wingefors and CFO Johan Ekström. Please go ahead, guys.

Thank you, Oskar, and good morning, everyone, and very welcome to Karlstad Värmland. To start, it's not possible to talk about the quarter without mentioning the darkest chapter of the European history in modern times. I'm deeply saddened of the inhumane and aggressive war in Ukraine. It's an inconceivable act of cruelty that overshadowed our everyday progress in the quarter. All of our employees are part of our family. And our first priority has been and it still is to provide the safety of our staff and their families in the affected regions. We are stand firm in support of our employees wherever they are located. By the end of 2021, we engage approximately 250 people in Ukraine, a thousand in Russia and about 250 in Belarus. Our priority has been and still is to support our employees in the affected regions. We have been working hard to support the relocation and safety of many of our employees and family members who are willing to leave and has as of today been relocated. And today we have been relocating hundreds of people. So back to the quarter and the financials. Yes, we are pleased to announce another stable quarter. with net sales exceeding five billion in a back catalog driven quarter with only a few new releases and the continued organic growth in our mobile business. Our operational EBIT for the reporting quarter increased 17 percent to one billion fifty two million, concluding a financial year within our forecasted range. The operation EBIT in the quarter includes 50 million in costs relating to the situation in Ukraine, as well as 74 million in operation EBIT contribution from Asmodee and Dark Horse. The organic growth came in at minus 34 percent and seven percent on the full year. And we are we have been in the quarter been facing the breakaway success of Valheim in the previous quarter last year. But looking at the organic numbers just makes up about one third of our combined business. So we believe to measure the actual business performance of all businesses we owned as of end of March, we need to look at the performer growth and the performer growth in the fourth quarter were 3% and on the full year basis, 18%. The mobile performer growth for 43% in the quarter. The free cash flow came in at 430 million. We have been reiterating our operational EBIT forecast this morning. So we are expecting an operational EBIT in the current financial year ending March 2023 in the range of 9.2 to 11.3 billion. And we're expecting that this year to be driven by a great pipeline of new games to be released. We're expecting the value of the completed games to be more than three times the games we released the past year. This forecast is not including any minor impact from the acquisition of Beamdog, Lost Boys, Crystal Dynamics, Eidos, and Square Enix Montreal. But that takes into account the possible indirect impacts from the war in Ukraine. Looking at the operational highlights in the quarter, we currently have 223 game development projects in pipeline, whereof 159 projects are unannounced. We are reiterating that we are expecting to release more than 25 AAA games up until March 2026. In the quarter, we invested a record of 950 million into the pipeline, and that is more than 3.6 times the value of the game we released in the fourth quarter. That's worth 262 million. Looking at the mobile KPIs, even with having the first quarter in the calendar year being, in general, less good for mobile games, because normally the holiday season is the strongest, we saw growth. And mobile monthly active users were more than 300 million, and we are now at daily active use of 35 million players. We ended quarter having 118 studios across the group, and including the announced acquisitions that is yet not closed, we have 124 games development studios within the group. The quarter was driven by a strong back catalog performance. Risk of Rain 2, Deep Rock Galactic, Borderlands 3, Insurgency Sandstorm, Valheim, and many, many other titles. On the new release segment, we had a very strong release from Gearbox with Tiny Tina Wonderlands through our publishing partner, 2K. We also had the release of LX2 that financially did not meet the management expectations. However, we believe we will make a reasonable return of investment over time. We also had King of Fighters releasing through Koch Media. So let's jump into the business areas. So looking at the THQ Nordic, they had a stable performance of the back catalog. Again, SpongeBob, Battle of Bikini Bottom, Wreckfest, Biomutants, or Evergreen titles continuing to perform. Again, in the quarter, they released LX2, but also Expedition Storm and a number of other titles through Handy Games. We believe both LX2 and Expeditions Rome will have a positive return of investment over time. However, in the quarter, it did not really achieve the expectations. Currently, there are 21 studios across THQ Nordic and are close to 1000 people in headcounts. During the quarter, they announced the acquisition of the Frankfurt-based Metric Mines, a renowned service provider of animated content. They also announced the opening of an office in THQ Nordic Singapore. Looking ahead, they have a very busy schedule of new games, including Way of the Hunter, a new SpongeBob game, MX vs. ATV in the end of the quarter, Outcast 2, Jagged Alliance 3, and an amazing remake of Destroy All Humans 2. Our friends at Koch Media Publishing had, as usual, a strong quarter driven by the back catalog. They received 543 million in sales. And again, the main back catalog drivers were Metro Exodus. But also we see a strong continued performance of Hot Wheels and Arizona Sunshine. New releases in the quarter were After the Fall, Supercross 5 from Milestone, and King of Fighters. Currently, they are 13 studios and are engaging closer to 2,300 people. Chorus won the Best German Game Award. Congratulations to the team in Hamburg. Dixart in France won five awards. and looking into the future just looking into this quarter we we had a number of releases so far let's get fit for voxler we have moto gp22 from milestone trek to jumani from flying wild hogs and more content coming for hot wheels hot wheels unleashed So looking ahead through all the publishing businesses at Koch Media, they're having a very interesting pipeline, including Saints Row, Dead Island, Gungrave, Evil West, System Shock, Dolmen, Crossfire Legion, and Payday 3. And I would like to give a warm welcome to Brian and Rob from Deep Silver Volition, who will tell us more about the much anticipated game Saints Row. So welcome.

Thank you, Lars. It is good to be here. And we couldn't be more excited to talk about Saints Row and our upcoming release. Right now, we're putting the finishing touches on what we believe will be the biggest and best Saints Row game yet. We're rebooting the franchise, and that means a new cast of characters and an all new city to explore. This is an amazing opportunity to welcome a brand new audience to the IP, and we're happy to preview it here for you all. Let's roll the trailer.

Welcome to the biggest, the boldest, the brassiest, the ballsiest Saints Row video game in the history of the fucking universe.

Although we're rebooting the franchise, this remains a pure Saints Row game, a wild criminal sandbox featuring moments only possible within the world of Saints. Take a jet on a joyride, crush cars with a monster truck, or wings to pass skyscrapers wearing nothing but socks. Saints Row means fun, energized, amped up, thrilling open world action with the power to take over the city. And speaking of the city, this is the most vibrant and imaginative setting for Saints Row to date. We've created an amazing fictional playground where you get to be your own boss. In addition, customization and player expression is a hallmark of the franchise. We've recently revealed our best ever customization feature to the delight of longtime fans and newcomers alike. You can create your own unique look or go with something more imaginative, whatever suits your play.

And as we look forward to our release, the marketing campaign is only getting started. And we have some massive beats happening each month leading up to launch. Something our fans are looking forward to is the release of our character customization demo. This is a major beat in the campaign and has been incredibly successful for previous Saints games. But in today's more mature landscape of social media, user-generated content, we think this demo will be bigger than ever. It's coming soon. But that's all we can say for now. And just yesterday, we saw a wave of previews from the press who were given a deep look at the game and were thrilled with the reaction. I'll just read a few quotes here. IGN said it was filled with the wackiness, carnage, and humor you'd expect. GameSpew called it our most anticipated release of the year, the biggest, boldest, and ballsiest entry in the series yet. And VG247 said, this is a reset that's actually worth it. We're excited to see that the reboot of the series is resonating with the gaming media and fans alike. We are so looking forward to this release. This is the culmination of everything we've learned about making great open-world sandbox games. In partnership with Deep Silver and Embracer, we've taken the time needed to hit our creative goals with Saints. We love this franchise, and we can't wait to show it off to the world on August 23rd.

Thanks, guys. Brian, Rob, so what do you think is the most exciting feature of the game that sets Saints Row apart?

It's tough to choose just one. The game is so large, but if I were to choose, it's gotta be customization. Our customization feature set is just best in class. We offer a huge amount of choice and the opportunity for self-expression. It's certainly greater, the likes of which you haven't seen in any other game, really.

Yeah, for me, it's our co-op feature. We offer untethered co-op throughout the game, which means two players can play through the story together. You can indulge in all the side content, all the diversions in the world, or just go out and cause chaos in our great sandbox with all the toys we offer players. There's no game in the genre that does it as we do, and it's just an incredibly fun way to experience the game.

Thank you so much, guys. We are super excited. Thank you so much for keeping awake. Thank you. Thank you. So that was America calling and let's jump into our friends at coffee stain and ghost ship. So Koffersheim Ghost Ship had another stable quarter. Obviously, it was a tough comparison quarter to the previous year's Valheim. However, the quarter saw a continued stable performance of Valheim, Satisfactory and Deep Rock, achieving a net sales of 171 million in the quarter. They also, in the last five hours of the quarter, had a release of Midnight Ghost Hunt. to, I would say, a good start with the community heavily engaging in the product. So I can't wait to see what that game could deliver over the coming year and years. So also in this quarter, ending in June, they have been releasing songs of conquest from our friends in Gothenburg. And so far it has been to, I would say, a great success. All the fans, I still remember myself of the Heroes of Mighty Magic. And there's tons of fans out there. And I think this is a true successor of that franchise. They also announced that Valheim now sold more than 10 million copies during the quarter. And again, they've been awarded. Deep Rock Galactic was awarded Best Live Game in Denmark. And it now has reached more than 10 million downloads. Amplify, our friends in Stockholm. Do we have Per Arne online? Yes, good morning. Good morning. Welcome to Värmland. I give it over to you, Per-Arne. How are you doing at Amplifier?

Amplifier is doing good. We are still in investment mode, as you will know. I'm in Copenhagen today with Nils at Invisible Walls. Yeah, with Amplifier, we are 19 studios at the moment. Lion's part in pre-production or full production. But you can expect to see a lot more coming from our studios over the years. And we are extremely excited about the upcoming new IPs that comes out of Amplifier as we go along. Worth noting now is also, of course, that during the quarter, we still have a solid performance from Lit Nightmares for us here. But during the quarter, we also were able to acquire two more companies and join them to the family of Amplifier. It's the Creative Endeavour, which is a studio from Gothenburg founded by Martin Erasmus. They create idle casual and the hyper-casual mobile games. I've been part of working with the ACE studio for well over 10 years, part of actually shaping that studio in Skövde from the beginning. So I'm very, very excited, very happy to have them join in the group. And last but not least, we also have Invisible Walls. We met with Niels in San Francisco a couple of years ago, and we immediately fell in love with their title First Class Trouble. And keeping in touch over the years, we finally got to to invite them into our family, which we are extremely happy about as well. They released their game First Class Trouble last year with a successful launch and great success also. Actually awarded the best debut game by the Danish Game Awards. And now they are, I wouldn't say needy, but they are working on their next game, a character game from within social strategy also. um set in a typical american 1950s neighborhood but i think it's better to let nils talk about invisible walls rather than me so take it away news thank you

Yeah, I'm really excited to be part of, we are really excited to be part of Amplifier Group and Embracer Group, especially because I think we're on a very fun and interesting journey to try to capture a new space in gaming. When we started up Invisible Walls in 2017, we really wanted to, we had this vision of trying to do for gaming what reality TV did for television, which is create interactive spaces which are really emotional and where the games are as fun to watch as they are to play. And with more than 3 million hours watched on Twitch and 30 million views on YouTube and more than a million players across console and PC, I believe our first game, First Class Trouble, has really set us up for a great beginning with Invisible Walls, becoming a leader in this sort of new space called social strategy. That's also why we're so excited to be part of Embracer because it allows us to pursue creating these great games, but also make an organization and create the tools that really make us able to become a leader in this new space. So we're really, really excited.

you will be yes i was super excited to meet you in stockholm and hear your background i think your background from film and television is super interesting and i can't wait to see what you can bring in the future thank you thank you lars thank you perona so with that said about amplifier let's jump to our friends at sabre And I think we have Matt here physically in the room. So, Matt, why don't you come on stage and tell us about how you're doing at Sabre? All the way from New Jersey.

Upping your performance here. I like it. So, what do I stand next to you?

Yeah, no, stand here.

Should I put my arm around you? It's like we're an old family. So, it's good to be here. Is my slide up? My slide is up. So I actually have filming me now, Andre and Tim and Corey in the audience. It's very good to be traveling again. I could say that first and foremost. And it's good to meet new friends from Asmodee who, do I pronounce that correctly? Yeah. Is it Asmodee or is it Asmodee? Everyone says it differently. I don't want to say it wrong because I sound stupid when I say it wrong. So just a few words briefly about Sabre. We have obviously had a challenging quarter, to say the least, with having employees in Eastern Europe and Russia and Ukraine. But I can say confidently that we've been able to overcome those to the best of our ability. Our games are on track. Our people are safe. We're supporting our employees. And it's been, while it's been a challenge, probably the biggest challenge we've had in the 20 years we've been doing this, it's been something that we've been able to deal with, I think, relatively effectively, and we're feeling pretty confident about that. So production has not really been impacted, and everyone is in a good place. In terms of what we're doing at Sabre, well, we're doing a lot. I mean, this is just the tip of the iceberg. We have about 50 games or so plus under development in various stages. I don't really go through the financial stuff. Oh, you don't. All right, good. I can support you on that. Don't worry. I just make up the numbers and they'll correct me later.

If you look at that screen, Matt... Oh, it's right there.

But I don't have to look at myself if I'm looking at that screen. So one of the highlights we've had in this quarter is actually we released Evil Dead last Friday. And this was a game that was our first... developed and published title for Sabre's new publishing unit. And we've released, we've sold approximately 500,000 copies of this game in five days. So I don't remember what our traditional projections were. Thank you. Yeah, yeah, you're welcome for that.

All right.

You know, it was really nice when I actually got to take that money and put it into my pocket. But now... Now it goes to the great Swedish shareholders, which is awesome. But we actually are tracking with World War Z better than we did with World War Z. With Evil Dead better than we did with World War Z. And so we have very high anticipations for the future on this game. We feel that if we continue to support it, it's going to just continue to kick butt. I mean, we... We have a support plan in place for operations, and the game just is fantastic. The reviews are literally 10, 15 points higher than they were for World War Z. I guess you could say there's a game called Dead by Daylight, which was one of the inspirations, and we're scoring about 15 or 17 points higher than they did on Metacritic upon release. I know, I have to be humble. You always tell me I have to be humble. So I will humbly say that we are going to kick ass on this game and it's going to make a lot of money for everybody and it's the first in a new franchise for Saber. But that's not it. We also have a ton of other products under development, as you can see. I think one of the highlights that I would mention is Space Marine 2. We really sincerely believe that that's the best game that Saber has ever done. The response to that when we announced it last year at the Game Awards was just mind-blowing. And that should be out. Did we announce when that's coming out? No. We did not announce when that's coming out, so that should be out in my lifetime. That's all I can say about that game, apparently. So anyway, we have a lot going on at Sabre. One of the things that's also worth mentioning, and I think I mentioned this a couple of years ago when I initially joined the group, is that for me, one of the focuses has always been connecting the dots between the various groups with an Embracer. And we've been starting to do that in a significant way. I've learned over time that Embracer... is one of the few good guys in the industry. And I'll clarify what I said. What I mean by that is everybody looks at Embracer, whether it's Microsoft or whether it's Sony or whether it's Nintendo or whether it's Google. or Amazon, any of the major content creators and looks at us as kind of a friend. We're on everybody's side. We're neutral. And maybe that's a Swedish trait more than anything else. I don't know. The Americans don't seem to be successful at that, but we are able to work with everybody. And that's opened up a lot of doors for us for negotiation, for contracts that we've been able to sign. Just the attitude towards Embracer is just incredible. And to add to that, because we're so big right now in terms of the number of IP that we have, we've really had an opportunity to gain some leverage. But that leverage can only be in terms of our negotiations with our partners. And we're strong. We have a tremendous amount of IP. Now we have Asmodee, right? So, okay, you'll correct me later. So we have Asmodee, and Asmodee has a ton of IP as well, and I think we're finally able to leverage the collective strengths of the group in our negotiations and in our dealings with our partners on all fronts. We have a tremendous amount of data. regarding the games that we've developed, which helps us with projections for future titles and making the right business decisions. We have tremendous back catalog, which means that our content pipelines are super interesting. And then we have just... I know I'm off script, but you told me to talk about Synergies a little bit. And then we also have... We're seeing... what all the other studios and all the other development groups or operative groups, what their needs are, and they're seeing what our needs are, and we're really able to work effectively now together. And so one of the things I love about this company over the last 25 months or so that I've been part of it is I'm watching and I'm part of the evolution, and the evolution is just incredible. We're really kind of gelling as a group. I feel like we're one big family. I think we're all not only just... cheering for each other on the sidelines but were actively engaged and involved in finding ways to work together um you know there was a misconception early on i believe that embracer was a roll-up company and that we would buy a bunch of studios and those studios would not be connected to one another and that is absolutely not the case i can tell you personally that sabre is working at the moment with in some capacity and significant in some and at the moment less significant but soon to be more significant with every other operative group within the company and i feel that that's only going to accelerate as time goes on whether it's creating games whether it's producing content correctly i mean jointly whether it's starting to get our acquisition digit it's one of the best cg companies in the world involved in creating content um on the on the digital animation side for some of the other games whether it's taking great IP that's within our group and making pinball games out of it with Zen, or whether it's us taking products from others and turning those products into switch ports or even new products like VR. And the last thing I'll say is I'm super excited about what I consider to be the steal of the century with our recent deal to acquire Square. We need to be humble, Matt. Yeah. Listen, you did the deal, so you have to be humble. I just have to brag about it. I really believe we just acquired one of the best IP in the history of games. I don't think it's debatable. We acquired great teams in the process that I've had an opportunity to meet with already to get to know on a very basic level, obviously, prior to the closing, because I'm not going to get you in trouble on myself. But it's been good to get to know them. And I'm super, super excited about what we can do with them in the future. And if you just look at Embracer and you look at our catalog of games from Borderlands to Space Marine to Goat Simulator, it's a fan favorite. to Tomb Raider, and now Tiny Tina's, which has really just taken the world by storm, and Evil Dead. I think that we're very, very well positioned as one of the best content players in the world, and I think that's very much to do with what Lars has been able to accomplish, which is to bring a bunch of diverse studios run by entrepreneurs together. So that was a little bit on synergies, which you asked for in a very long-winded way. Thank you so much, Matt.

I'm really happy to have you here in Calstead.

It's good to be here. It's good to be here. I've walked down the street. It's a really cool street.

Not like Jersey, though. Not like Jersey. Can I go now? Please have a seat in the sofa here. Oscar might have a few questions for you later. Well, so with that said, I think we are excited to see the performance of Sabre Interactive in the quarter. They had a stable quarter of revenues of $448 million, driven by, again, the catalog, Insurgency, SnowRunner, World War Z Aftermath. I just love that they are able to add more and more of those evergreen, live-operated franchises into the portfolio. They're also growing inorganically and organically. I was pleased to meet Martin, and he is actually coming to Cal State here in a week from Argentina, and that is the entrepreneur behind Nimble Giant. And he told me they set up three new South American studios in Peru, Chile, and Uruguay to tap the talents in games development. Super excited what they can bring in the future. And our friends in Austin at Aspire continue to grow. They brought in Beamdog, one of the iconic companies in Canada that has been working on Dungeons & Dragons franchises for the past decade. Sabre, you're definitely progressing. Moving over to DECA. So DECA, year over year, obviously, now having the inclusion of Crazy Labs in the numbers, which is the key driver of the revenues coming in at 615 million in the quarter. They had across the DECA group, mainly Crazy Labs, more than 21 million daily activist users in the quarter and 230 million monthly users. So Crazy Labs is growing. I think they built an amazing team across the world, driven out from Israel. And I can't wait to see what they can deliver in the future. And again, easy brain. Our friends in Cyprus and Belarus had another record quarter. Revenues coming in at over 1.1 billion SEK in the quarter. Strong performance explained by one ads monetization platform deal. You can partly compare that to deals we're doing with Game Pass, leveraging all the content we're having. and very strong sales of existing live-operated titles, such as Blockadookoo, Sudoku, Jigsaw Puzzles, Nanogram, and Art Puzzles, and many others. Numbers Match, actually, is my personal favorite. So looking at our portfolio of products, eight of our 25 top revenue titles is from EasyBrain in the quarter. So, Gearbox, do we have someone online here from Dallas? Hi, Lars. Morning, Randy. Thank you for keeping awake.

Happy to be here. Thanks for having me. And yes, thanks for the introduction. Before I begin, I want to compliment you and everyone at Embracer HQ. And in fact, all the companies that are part of the Embracer group on our progress. It's just awesome to be a part of.

Thank you, Randy. So why don't you give us an update? How are you guys doing at Gearbox?

Well, I'm happy to report that Gearbox is flourishing. I am more convinced than ever that our merger with the Embracer Group was a great move for our team and for the future we're building with the Gearbox Entertainment Company. Obviously, we've had a lot of really great organic growth, successful title launches, and we've got an incredibly promising runway for expansion that I've set up and put in place. And of course, you can see some of the beginnings of this with our Q4 results of defining time for Gearbox, I think. I'll have more to say about our titles shortly, but I want to highlight a few games at the onset. This past quarter, of course, we saw an incredible success with the launch of Tiny Tina's Wonderlands. And we know that Take-Two, in their own investor call earlier this week, shared that Wonderlands was the best new franchise launch from 2K. And they noted that 30% of Wonderlands players have never played a Borderlands title before. So we are truly accomplishing our goal of reaching new audiences and markets with our entertainment. We also saw really awesome, great interest from consumers with Have a Nice Death, which is a new title from the newly established Gearbox Publishing San Francisco. And they just had their early release, this early access this past quarter. And it's really been inspiring to see how that's been going. Additionally, of course, Gearbox Publishing released a long awaited expansion for Risk of Rain 2, which is just an incredible game, continues to exceed all of our expectations for sales and community engagement. And if you haven't played it yet, it's a blast. There's a reason why it's punching so high above its weight class, and that's because it's just a fun, fun game. And our customers are now to the point where they're selling it for us. One point I want to note before I get into the rest of the presentation is that there's a strong pipeline we've got coming up. We have the largest number of unannounced titles that are in development in our history, including a whole bunch of AAA games. And I'm very, very eager for when the time comes to share these titles publicly. And of course, there are some titles that we have announced. We can see some of them here, including titles from Gearbox Publishing, such as Hyper Light Breaker, Eyes in the Dark, and the long away that I've been waiting this, I think, my entire career, Homeworld 3, and of course, Homeworld Mobile. And each of these games represent really incredible advancements in art design, gameplay, and reimagining what's possible for entertainment at the intersection of player and content. When the Embracer group and Gearbox Entertainment first joined, when we first became part of your company, Lars, we had two key verticals. We had the Gearbox software business unit and the Gearbox publishing business unit, and we could have rested on the success of our commercially and critically successful IPs, and our reputation as the most developer-friendly publishing business in the world, and we would have been just fine, but we're not content resting. As you know, Lars, one of the reasons why we became part of the Embracer Group is to fulfill an ambition to build the gearbox we always want it to be. And this merger with Embracer has been a catalyst for our ambitions and growth that propels those ambitions towards our mission to entertain the world. And we're at the beginning of this. Of course, we can't talk about everything yet, but you can already see some movement with the establishment of some new verticals, two additional verticals, including Gearbox Studios, which has been overseeing and guiding the full maximization of our IP in transmedia, including the development of television, motion picture, and other related adaptations of our intellectual property. Some of this stuff has already been announced, of course. We have a Brothers in Arms television series that's been announced, and it's in development. And of course, there's a Borderlands motion picture, big blockbuster film currently in post-production. We finished principal photography and we're in post-production with Lionsgate and Arad Productions. And this is a massive film, you know, starring Cate Blanchett and Kevin Hart and Jamie Lee Curtis and Jack Black and just incredible stars making a beautiful film that I can't wait to launch. These early successes give us much confidence as we pursue the vision of Gearbox Studios down the road ahead. And to support that, we created Gearbox Properties, which is here to guide the sort of, collective vision the creation growth and strategy of gearbox entertainment universes characters fiction and products and it serves as a central hub for the coordination across mediums and business units with our valuable intellectual property its mandate is to explore expand and exploit new and existing gearbox ip and assimilated ip from other sources and the new vertical is led by an experienced and seasoned gearbox veteran i'm talking about randy varnell who's the president of gearbox properties and randy has been a creative director and a senior producer on many titles uh for for longer than i can remember part of the gearbox entertainment company he's just an incredible leader who has the vision and ability to deliver results with the new gearbox verticals element of our company. Let's go to the next slide. Look, the strength of our history and our recent growth gives us a wide stable of titles that continue to engage players and reach new audiences. Obviously, I think center to what a lot of people think of when they think of Gearbox is the Borderlands franchise. And even with our most recent entry, Borderlands 3, this is the fastest selling game in the history of the 2K publishing label, Take-Two's publishing label. And we have... People are starting to catch on. We have a robust franchise plan. Earlier I teased the upcoming release of a new Tales from the Borderlands game, and we have more in store for Borderlands fans, of course. We've got Risk of Rain 2 from Gearbox Publishing, and this is a title that continues to delight and inspire new customers and engage them with ongoing content. Trials of Midgar is another great success. It's another one of the publishing titles. It's an example of many games that we publish that showcase our ability to bring new entertainment to the market with a high degree of replayability and community excitement. And we're proud of Gearbox's future, including Have a Nice Death, which just experienced a successful early access release. But of course, if you move to the next slide, We just knocked it out of the park with Tiny Tina's Wonderlands. It is exceeding all expectations. We are 2x the engagement of our comps and our targets, literally 2x engagement. And it's just been an incredible response to Wonderlands. Critics loved the game. Fans loved the game. They're all celebrating its direction, its humor, its storyline, the incredible cast of voiceover talent. wanda sykes and will arnett and uh and and we've got uh we've got something here we've got a franchise and we're building on it and you'll hear more about that later you know it's it's awesome to be able to take the successful lands style shooter looter you know the gameplay that we first introduced to the world with borderlands and to take it in an entirely new direction and that's what wonderlands does and it represents a fun and exciting opportunity for gearbox as we look further to develop Wonderlands into a franchise. And you'll hear more about that soon. But let's take a moment and let's see the game in action for a little bit and share some of the additional positive feedback that we received from the launch of Wonderlands. You want to roll that video?

Dragon Adventure, baby! Come get it! You see the walls of the mighty, bright home. A massive skeleton army! Come on, let's kill these idiots!

Good stuff. Next slide. You know, since we joined the Embracer Group, the Gearbox Entertainment Company has been able to employ a new strategy that had not been on the table for us before. And I'm talking, of course, about mergers and acquisitions. So in addition to strong growth of our headquarters in Frisco, our creative teams there, strong growth of our development studio in Quebec City and our newest native studio in Montreal, we have managed through M&A to bring more incredible talent and horsepower to the Gearbox Entertainment family. The acquisition of Perfect World Entertainment, which is now part of Gearbox Publishing and also includes the MMO guys. This has just been a huge addition. Cryptic's incredible games are alive and well and are better than ever. And now we've announced, of course, Lost Boys Interactive. is joining the Gearbox Entertainment Company. And you mentioned it earlier, that deal will close soon. And these guys are awesome. And they create remarkable opportunities for Gearbox Entertainment and for the Embracer Group. And together, we're really well positioned for creating new IP faster and better and accelerating that creative engine that Gearbox is known for. We can maximize our existing consumer favorite titles with transmedia strategies, and we can utilize our self-publishing models where appropriate to keep 100 percent of the value creation revenue within the Embracer group that comes from the Gearbox Entertainment Company. Of course, with Lost Boys, this has been an incredible win from our experience developing Wonderlands. Lost Boys helped out, and so we got to work with these guys directly and developed an awesome relationship. And Lost Boys is a proven studio. They've got over 220 team members with operations in Austin and Wisconsin. And we announced, of course, in April our intent to invite the Lost Boys to be a part of our broader Gearbox and Embracer family. And they're, of course, going to continue to enthusiastically provide work for hire services across the larger industry. And this is really exciting for us because it's kind of how Gearbox got started. But it's also part of our strategic plan that the talent from Lost Boys are immediately joining Gearbox Entertainment projects, accelerating and bolstering development of our current and unannounced titles. So why don't we take a moment and share a quick video of some of the work from Lost Boys. Well, thanks a lot, Lars, for letting me brag about the Gearbox Entertainment Company and all the incredible talent that's kicking ass for Embracer Group. I'll be around. I don't know if you want me for the Q&A, but I'm excited to stick around for the reports from the other members.

I think it's okay. I know it's the middle of the night, Randy, so I'll try to answer up on any Q&A for you. You're a hero.

Well, then maybe I'll slip into my PJs, but I'm still going to watch the rest of it because we've got so much exciting news. I want to see how it all goes.

Okay. Thanks, Randy. Cheers.

Thank you.

So with that said, from Gearbox and Randy, why don't we introduce, or I would like to say I'm really happy to have the fantastic team of Asmodee here today in Karlstad and to present their business. So Stefan, Simon, Thomas, Mygge, the stage is yours.

Thank you, Lars. Thank you. Thank you, Lars. Good morning, everybody. I'm Stéphane Carville, Asmodee Group CEO. Very happy to be here today for our first interim report since we've joined the Asmodee family. Nice seeing you, Matt, at least at last, sorry, yesterday, and sharing some glasses of wine this evening. And by the way, it's Asmodee. So, as I said, happy to be here today. Today, we'll be presenting with Thomas Kugler, head of strategy, Muguet Bouillon, our group CFO, and Simon Vivien, head of consumer and marketing. Today, I would like to take you through, first, a quick overview of our business and metrics. Then, with Muguet, we looked at our pro forma 21-22 financials. And finally, we'll be happy to share with you an update about our key activities to be launched in Q1-22 and beyond, as well as, I'm very happy about that, our first synergies within the Embracer operating units, and I'll comment on that later on. So just starting with our key business and metrics. With our IP broad portfolio at the core, our strategy is to deploy our IPs across various forms of entertainment, board games, interactive games, books, media, etc. to become an innovative gaming and global content player. In order to do so, we've structured our group around four platforms. The first one is the board game platform. It's about board games and this is where basically we do publish board games throughout our 22 studios and then we distribute them throughout our 21 distribution units and this board game platform obviously remains at the backbone of our group. Then we have a second platform called the interactive platform which is focused around interactive gaming through Asmodee Digital, our little video game studio and board game arena, our online board gaming platform. The third platform being the entertainment platform and it is about to deploy our IPs to non-gaming forms of entertainment such as books, media, TV, movies and merchandising. And finally, the consumer platform to better engage our consumers with our IPs. Moving to some highlights and numbers. On a pro forma basis, Asmodee will represent 38% of embracer group net sales in 2021-2022. We have a total workforce of 2,346 people spread across the globe from Europe, US to Asia. We have 22 studios across the globe and 21 distribution units and in terms of IP we own more than 350 IPs. Before I hand over to you, Muguet, on the financials, one highlight for the financial year ended up 2021-22. Asmodee did generate 11.7 billion sec of net sales. As you can see on the right-hand side of the slide, one of our strengths is our diversity, be it geographically, in terms of activities, and in terms of channels. The fact that we're not overly reliant on any one market title or sales channels is an important factor in the robustness of our long-term business model. Now I'm handing over to you, Thomas.

Thank you, Stéphane. The business that Stéphane just outlaid represents close to 44 million board games sold last year, and that's including trading card games. In addition to board games, we are also continuing to deploy our transmitter strategy through interactive and entertainment platforms. A great example of that is Gloomhaven. It's a board game that is published by Cephalofare Games, distributed across the world by Asmodee business units, and Asmodee Digital is the publisher of the video game adaptation of Gloomhaven that was released on PC end of last year, and today Gloomhaven has sold over 500,000 copies. Also, through Asmodee Entertainment, we have close to 30 IP licensing out options and ongoing discussions that have been signed to adapt some of our most successful IPs to TV shows, movies, scripted or unscripted, comics, interactive games, consumer products, and Simon will share more about those deals in a couple of minutes. Through Akonite, our fiction novels publishing imprint, we have released last year 30 new books. Most of the novels are on Asmodee's own IPs. It allows us to develop our universes, our storytelling, our characters, laying the grounds to bring those IPs to media, movies, or TV shows. And as we do in board games, we are also on top of our own IPs. We work with leading third-party franchises, such as Marvel or other successful franchises from video games. In terms of M&A, our acquisition portfolio illustrates the diverse approach we have that is centered around board games, builds IPs, and expands into new forms of entertainment. During the last year, we have continued to broaden our IP portfolio and creative talents by the acquisition, for instance, of Plan B, the publisher of the hit game Azul. We have also taken a majority stake in Exploding Kittens Studio, makers of the Exploding Kittens board game that has sold over 18 million copies worldwide. We acquired Board Game Arena, a leading digital online board gaming platform, which allows 8 million players across the globe to play their favorite board games instantly with players all around the world. We have also completed the acquisition of Miniature Markets, a leading e-commerce specialist for board games in North America, to engage even further with our consumers. We did this one year after completing a similar acquisition in France.

Thanks, Thomas.

We do also have a very strong pipeline of future acquisitions with dozens of active discussions ongoing.

Yes, for sure. You're right. Thank you very much. I also would like to take the opportunity of this invitation to thank all the employee teams composed of highly talented people who have made all of that possible. Turning now to an overview of our performance for the financial year 2021, I'm very happy to hand over to you, Miguel.

Thank you. Thank you, Stéphane. All figures shown here and on the following slides are presented on a pro forma basis. As you can see, Asmodee had a very good solid Q4 performance, outperforming the market with net sales increasing by 19% to 2.6 billion SEC. This is noteworthy in particular given the uncertainty created globally by the events in Ukraine. Growth was driven across all regions, with trading card games in particular performing very strongly. You will notice that while the quarter had a very solid growth, it was below the full year growth performance that I will be explaining on the next slide. To provide some context, I think it is important that I take a minute here to talk about the seasonality of our business. Compared to certain segments of video game business, The phasing of our top line delivery is significantly less impacted by the timing of new releases. Instead, it typically follows a largely predictable seasonal pattern. Q3 is the highest contributor to the full year sales, driven by the high demand during holiday period. while quarters Q4 and Q1 are generally our weakest periods and the lowest contributors to the net sales. Moving on to the full year performance, this was a very successful year for Asmoday with strong growth delivered both on the top and bottom line. Net sales for the year grew by 34% to 11.7 billion SEG. I'll go into a bit more detail on the following slide of our top line performance drivers. But on an operating EBIT level, we delivered just over 2 billion SEC for the financial year, an increase of 31% versus prior year. Operating EBIT was driven by the margin benefit of revenue growth combined by a well-balanced cost base. While we continue to invest in people and the structure to have the right talent in place and that we scale with the growth of our business, total operating cost as a percentage of net sales decreased by 2.3 points versus the prior year. Let's take a closer look now at the different drivers of our 34% growth. We've already mentioned that one of the strengths is the diversification across geographies, channels, activities. As you can see here, the net sales for the financial year was driven by the strong growth across the board. Our three largest geographies, the UK, France and the US combined represent around 50% of our total sales and they all delivered double digit satisfactory growth throughout the year. Growth was driven by the strong performance of both board and trading card games. As a reminder, board games represent over 50% of our activity. And it grew 13% and trading cards around 79% versus prior year. The board game growth came also across the portfolio with notably franchises such as Ticket to Ride, like Marvel licensed games, like Seven Wonders performing very well. Growth in emerging markets came in particular by Board Game Arena, one of our recent online board gaming platforms that Thomas mentioned earlier, as well as the online B2C operations we have had in the US and in France. In terms of sales channels, the hobby channel showed the growth quite satisfactory, a solid growth, while the toy multi-specialist channel rebounded strongly.

Thank you, Maggie. As you just laid out, the performance of 2021, the financial year 2021, was obviously propelled by the quality of our entire lineup, obviously ranging from our best-selling titles, such as Ticket to Ride, but also all the way down to our new releases. A good example of the quality of our new releases has been the fact that recently it was announced that two of our most recent releases, Seven Wonders Architects from EPO Studios and A Game of Cat and Mouse from the Exploding Kitten Studios, both were awarded Game of the Year awards. We've also been able to share exciting news lately. The Exploding Kitten Studios announced that a new adult animated TV series will be broadcast on Netflix starting 2023. Pretty much at the same time, Asmodee announced that our very own original Werewolf license has been signed into a movie option with Media One and the director being Netflix global hit Lupin. And finally, obviously all throughout the year and in the years to come, we've been able to and proud to extend our long-standing relationship with key franchises such as Disney, Marvel and Lucasfilm to continue publishing board games and other franchises. Furthermore, we've been able to sign in 2021 new licenses with Netflix and Ben E.J. to publish board games respectively on Strands of Things, Squid Game and Survivor.

Thanks, Simon. Thanks, Muguet. Now that we looked in depth into 2021, 2022, I would like to tell you more about our exciting road ahead for our first full quarter of operation within Embraer and beyond. I think I'm reverting to you, Simon. Oh, sorry. Yeah, sorry. I'm so excited about the activities and the project that I forgot to mention something which is also important, which is our financial outlook for 2023 and 2024. So the operating EBIT outlook for the coming two financial years was provided in the press release announcing our acquisition. I should say us joining the family more than acquisition. And I would like to take this opportunity today to reiterate that guidance. So from 2 to 2.5 billion SEC for 2022-23 and from 2.3 to 2.9 billion SEC for 2023-24. So now I can revert on to you.

Yes, so we talked a bit just earlier about our most recent releases and our performance for the first time here, but we have an exciting Q1 ahead, and obviously the year has already started, so all the teams are, I would say, fully active on those new releases. So let me take a moment to tell you a bit about our Q1 releases, and obviously we'll explore some of the later ones. On the board game front, Asmodee will release a new version of our best-selling Ticket to Ride franchise, focused on San Francisco in the 70s. We will also distribute the Skyrim board game from our partner publisher Modiphius. The game has already been a massive success on Kickstarter, with 1.5 million euros raised. And also, you can expect to see numerous new releases coming on our successful Marvel and Star Wars range, as well as new iterations on our own IPs, such as, for instance, Arkham Ore. But during Q1, we will also be active on the video game side, starting with Exploding Kittens, the game, which has just been announced to be part of Netflix's gaming offer for their Netflix game offer, available free of charge to all of 222 million Netflix subscribers. Catan, one of our best-selling franchises with up to 80 million players worldwide, will launch on Board Game Arena this summer. The launch of Catan on Board Game Arena will even further consolidate the lineup and the value that we have of all the games on Board Game Arena, which is extremely important for a subscription-based service that is now part of Asmodee. Furthermore, Ember Knights, which is a PC action roguelite for 1-4 players, has just been launched on Early Access and has sold to date more than 30k copies, materializing a very promising start and we're anxious to see what it will become when it fully opens to the public. Finally, on the books side, we also have a very strong activity in the next few months with 40 new novels releasing, not only on Asmodee IPs, such as Descent, Legend of the Five Rings, or Twilight Imperium, also on third-party board game IPs, such as Terraforming Mars, from our Swedish friends at Fricks Games. but also other books based on Marvel and other highly successful franchises. This will bring us to a total of 65 books published by Iconite since its setup in 2020. Further down the line, in the years to come, all of Asmodeus 22 studios and 21 distribution units will accelerate their output in terms of new releases and new IPs. We are slated to release over 125 new releases per year in the years to come. And starting 2023, we expect to launch at least 25 new IPs every year.

Thanks Simon. Moving now to another topic which is very important for us that we care a lot is I often say that games bring people together and at Asmodee it is really at the heart of our social and CSR commitment. And this is why I'm super proud that we've been able to announce recently the launch of Access Plus, which is the first board game studio dedicated to adapting our iconic titles for children, adults and elderly living with cognitive or neuropsychiatric disorders. The first titles, Double Spotted, Timeline and Cortex, have been developed with medical professionals for players with cognitive disorders. Those games will be firstly available in France, Canada and Belgium this autumn and will gradually become available globally in the coming years. In addition to that, we've also committed to the financing of the first chair studying creativity in the well-known Paris City University for Health and Social Studies during the next three years. Finally, and to end up the presentation, I'm more than excited and super happy to share with you that I've been able to witness firsthand all the common excitement around synergies between not only our teams, but all the Embrace operating Unique teams, starting with your teams, Matt, because we've been joining for more than two months. And we've already been able to develop two fantastic projects with your teams. The first one on Gloomhaven, our PC adaptation that Thomas just mentioned. And Gloomhaven is going to be ported on consoles by Saber. Second, Saber will also be working and publishing a video game based on our medieval fantasy dungeon crawling Descent universe. And thirdly, we will be distributing in the retail channel the Deep Rock Galactic board game, published by Gobsheet, which is part of Kofferstein, and that successfully raised an amazing 2.5 million on Kickstarter. More to come. So we're exploring many other activities, but I'm very happy and it's a very good start. So now I'm turning back to you, Lars.

Thank you so much, Stefan and the team. So I'm super excited to have you on board. Yeah, so as we do. So let's continue. Jump into our friends in Oregon at Dark Horse Media, our most recent vertical that joined at a fairly similar time as Asmodee. So Dark Horse is a leading entertainment company with the West Content Library and is one of the largest comics publishers in America. So they own and operate more than 300 IPs, publish 500 books every year. They publish more than 30 new comic books every month. And they have 40 films and TV adaptions in pipeline, primarily based around their own or controlled IPs. And they're having an amazing network of creative talents of more than 2,000 people. So I can't wait to meet the team in America and perhaps one day to bring Mike and his team to Karlstad and to have a similar presentation as Asmodee just had. Finally, partner publishing film business segment. They had a good quarter, fourth quarter, driven by the release of Dying Light 2 from our friends at Techland. They had revenues of 737 million. On a trailing 12-month basis, they are actually now about 3 billion. They also announced the acquisition of the Merchandise Specialist DPI Logistics in North America. That has been what I hear very well integrated into the group and finding a lot of synergies based around IEPs. Also, we have seen a solid performance from our friends here in Värmland at Game Outlet, our friends in Romania with Quantic Labs and our friends at Grim Frost, the leading Viking merchandise business. little bit of the market. So obviously now being in a post pandemic, there is a huge interest how the market will look in the future. We are bullish in general about gaming. I think it will just continue to grow. But looking at the actual numbers, there is a lot of different data points coming in. But we believe and knew so here with the source being one of the leading research institutes. They believe in the 5% growth in the global games market to grow to 203 billion US dollars in 2022. Looking at the global board games and collectible cards market, they see a similar performance this year as last year, but ahead they see a 6% CAGR between 2022 and 2026. There's some amazing data points coming out from these institutes. For example, look at this, 3 billion video games players 2021 across the world. 42 years old is the average gamer. Half the population plays video games. And 47% of gamers are female today. Finally, we have Johan. Welcome.

Yes, so let's take a look at our financial performance. And we start by looking at our P&L. As said, we arrived at 5.2 billion sec of sales for the quarter, which is up 117% over last year. Growth is primarily driven by business area games. We were growing with 124%. We also have a solid performance within partner publishing film, growing with 72% in the quarter. Gross profit for the quarter amounted to 3.8 billion SEK, yielding a gross margin of 73%, which is more than what we had in the corresponding period last year. And it's mainly explained by a favorable product mix shift towards business area games. Looking at our operational EBIT, we arrive at 1 billion 52 million in the quarter. growing with 17% over last year, resulting in an operational EBIT margin of 20%. It should be noted that we within our operational EBIT have a positive contribution from Asmodee and our course of 74 million. Also, we have a negative effect from the humanitarian relief and employee support related to the war in Ukraine of 50 million SEK. Further on our operational EBIT margin. It should be noted that we have added businesses during the year in Crazy Lab, also in the last three weeks of March, with Asmodee and our course that has a lower margin profile, explaining the reduction in operational EBIT margin in the quarter. Looking at adjusted EPS, it was 0.81 in the quarter, which is approximately 20% below last year. The main reason for this is that we have very tough comps last year with the success of Wallheim, as well as that for the new companies joining, we get about three weeks of P&L, but you get a immediate effect on the share count. On a full year basis, we have net sales of 17 billion, growing 89% over last year. It reached an operational EBIT of 4.4 billion SEC, which is well within the previously communicated forecast for this year. Taking a closer look into our net sales within PC console and mobile gaming, we can conclude that we are continuing the growth journey, growing with one hundred ninety five percent in the quarter, reaching thirteen point four billion approximately for the full year. We continue to see a high share of digital sales topping up in the quarter of 94%. In the absence of lawyer releases in the quarter, we have a solid back catalog contribution reaching 93% in the quarter. We have a well-diversified revenue base. For the full year, there is no single title that amounts to more than 4% of total sales. We continue to see an increase in recurring revenues. And in this fourth quarter, recurring revenues amounted to 72%, defined as revenues in the mobile segment and also within PC console for live ops and ongoing games. Looking at our cash flow and financing, we have a free cash flow in the quarter of 430 million, despite having record high investments into our business. We invested approximately 1.2 billion into the business, where the vast majority is going into our games development portfolio, 950 million. Looking at the financing activities in the quarter, we have a positive inflow of 18 billion, which is related to utilization of facilities in relation to M&A activities. And also net investment in acquired companies, 28 billion in the quarter, mainly related to the closing of Asmodee and also Dark Horse. At the end of March, we had a net debt of 14.4 billion in our balance sheet. As we have previously communicated, our target is to have a net debt to operational EBIT of 1x, where operational EBIT is valued on a 12-month forward-looking basis. Looking ahead, we expect a strong cash flow for the coming 12 months, and we also expect a strong growth in operational EBIT. We believe that we will achieve our target of 1x in the medium term, which is then in line with our financial leverage policy. Looking at our financing, we have significant headroom on the covenants in the loan agreements. And we have also recently, now in May, prolonged the maturity of our loans with our Nordic partnership banks. And as per today, we also have available cash and unutilized credit facilities of 11 billion. If we take a closer look at how the 950 million invested into our games portfolio look like, we can conclude that we are growing with 69% over last year. We also see that the trend of investing more through our internal studios increase. As Lars mentioned in the beginning, we are also in this fourth quarter investing a lot more into our games portfolio than what we are completing. So 3.6 times the completion value has been invested into the games portfolio. This is also shown in the business related KPIs. where we have a strong pipeline of projects, 223 projects at year end, which is up 39% over last year. We have more than 8,500 developers engaged in our ongoing game development projects. The majority through internal studios. And the number of studios that we're working with in our project has increased 44% compared to last year, reaching 181, of which 118 is internal studios. We take a look at our cash flow return on investment scatter. And as per the end of March, we have now 49 titles in the scatter. The titles that come in here are titles that has either had a cost of 40 million SEK or more or generated 40 million SEK or more in sales. The weighted average contribution or return on investment for these 49 projects are 3.22x. The combined sales generation of these projects is 12.1 billion in net sales, 8.4 billion in contribution, where contribution is the gross profit generated less marketing expenses. And the cost for making this happen has been 2.6 billion. This attractive return profile is also a main reason for us going after organic growth investments from a strategic perspective. If we talk about growth, on the left-hand side, we have organic growth, and on the right-hand side, we have pro forma growth. As said, organic growth was negative in the quarter, minus 34%, as we had very tough comps with the Valheim success from last year. It's also interesting to note that when we look at organic growth, you're excluding sales for companies that has not been part of Embracer for the whole year. This means that sales generated by Gearbox, Easy Brain, Crazy Labs, and also bolt-on acquisitions made within Sabre and Coach Media are excluded. So you're really calculating the growth rate on a third or 32% of what our business is as per today. If you look at the performer growth, it's 3%. Here we are instead adjusting last year's number to include the performance of companies acquired during the year and compare that on a like-for-like basis, thereby capturing basically the whole part of our business as it stands today. And that was up 3% despite tough comps. And the difference between the 34 and the plus 3 is that the companies that have joined us this year has had a fantastic performance. Yes, sustainability, our journey continues. A lot of work has been done in this fourth quarter. We are continuing to improve ourselves in the areas and we have made a lot of activities in the quarter and we have selected a few of them to look at in this slide. so we have adapted new policies mainly on the back of the project for also changing listing venue there's an enterprise risk management policy internal control policy information security policy adapted we are also happy to see that there was a 79 participation in our yearly code of conduct training Excited also to see that our second annual global employee survey came out with good results, but also that response rate is even higher this year than what it was last year. So 80% in response rate, so very proud of that. We continue also to educate and create awareness within the group through sustainability webinars, as well as also continuing our collaboration with Solvatten, where we have supported over 3,000 people with safe and warm water through our partnership with them. We have done a lot of work with setting the goals for sustainability during the quarter, and we will communicate the goals no later than our quarterly report in Q1.

Thank you, Johan.

So we have also rolled forward the follow up of M&A activities as per to the 31st of March. Embracer has done 79 M&A deals. 45 of these have been part of the Embracer group for more than a year, as per 31st of March this year, and will be part of this evaluation. On the left-hand side, we have what we call operative units or standalone companies. That's 18 deals. And on the right-hand side, we look at studios. That's 29 of the 47 deals. Starting with the operating companies, the day one enterprise value for acquiring or for making this happen was $12.9 billion. They had on a yearly basis at time of acquisition a combined operational EBIT of $2.5 billion. Also, except for adding the operational EBIT into our business, it's also extremely important that we get development capabilities, publishing capabilities, also access to studio networks. If we fast forward and look at where we are today, the same companies generate 3.4 billion in operational EBIT. So it's 38% growth. And we should bear in mind that there were no AAA games released in the fiscal 2021-2022. It's also interesting to note that we have the ambition that we continue to invest into the companies that become part of the Embracer family. So all in all, we have added 1200 people approximately for the operating companies. So from 3400 people to 4600 people. Looking at studios, the enterprise value on day one was less. It's 4.1 billion. Of course, adding a studio will have great benefits in terms of IPs and also development capabilities. At time of acquisition, these 29 studios had 1,500 people employed. And if we look at where we are today, we have continued to grow the development capabilities and resources, adding 525 people or 34%. You should give a studio acquisition time before you do a financial evaluation because it's really about when the games are released. But we can already now point out a couple of examples where we see that we are clearly exceeding our financial expectations at the time of the deal. Experiment 101, Warhorse, Bugbear, 4A to mention a few. Taking a look at the whole 47 deals, we can conclude that they have either met or exceeded our expectations at the time of the acquisition, with one exception. We are also in a relatively large project to change listing value and to change our accounting standards to IFRS. The project is progressing according to plan and we have the ambition to ready for a listing at the end of 2022. provided that we meet the milestones that we have in front of us, of course, as planned. We would like, however, to give a bit of a preview on segment reporting. We have identified four segments. It's PC, console games, mobile games, tabletop games, and also entertainment and services. And the first three is basically what we today call business area games. On a pro forma basis, The full year of our full year net sales amounts to thirty one billion. Twenty seven of that is from. PC console games, mobile games and tabletop games have four or eight twelve percent from entertainment services. PC console amounts to 30%. Mobile games, 20%. Tabletop games, 38%.

Thank you, Johan. So looking into the current year, I would like to share a little bit of more color of the PC, mainly the PC and console games that will due during the year. It's worth noting that running a group like this, you always make assumptions of the future and obviously we have been deep into how we forecast our operational EBIT. And then you need to make assumptions on the commercial performance of the titles as well as potential delays. But when I'm asking all my fantastic teams out there in the world, they telling me today that we have 110 game development projects due this financial year. Now I'm talking again, mainly premium console games. Those games are engaging roughly 3000 people in development. Of those 110 games, there is 82 full main games to be released. There is nine major DLC and new content coming to the market. And there is 19 porting projects into new platforms. Out of the 82 main games, There is 46 based on new IPs. And there is 36 SQLs on established IPs or licenses. That's one data point makes up to 82. Another interesting data point is that 44 of those 82 games are group-owned IPs. 21 of them are externally-owned IPs. And 17 are licensed or by group-controlled IPs. Of the 82, again, 47 comes from internal development team and 35 comes from external development team 42 of them are announced as of today and 40 of them is not announced as of today the average development team size is 42 people but the median development team size is 20. 10 of the projects has a development budget about 10 million euros and 34 of them has forecasted sales of more than 10 million euros over the 24 months period we are forecasting Looking at the capital allocation, we see 80% going against owned IPs, 7% goes to external IPs, and 13% goes to licensed or controlled IPs. As we mentioned when talking about our operation EBIT forecast, we see at least three times the amount of value in value of completed games coming to the market this financial year but looking at this 110 games that is actually a lot more than three times But we are assuming that there will be a number of delays in this pipeline because there is always delays in the games industry and the quality of our products always comes first to polish and to find the right timing for release. But I think it was interesting to share a little bit data points. This data is not including anything from the tabletop gaming, and it's not including... There is actually a very few handful of mobile games projects, but in general, mobile games is not capitalized. For example, the EasyBrain titles and Crazy Labs. Crazy Labs, hyper-casual, I would say. Johan, let me start with this. So looking into some notes for our operational EBIT forecast. First of all, the market. We are in a growing market and the need for high quality content and development resources are enormous. It's greater than ever. And we can hear from our platform partners. They want more development resources. They want more new products coming through. That is a key driver. The strong organic growth expected is driven by at least three times higher accumulated investment value of games planned for release this financial year compared to last year. In the PC console, we also have multiple platform deals driving profitability as well as predictability of revenues and profits. In the mobile segment, we see organic growth notably above the overall market, driven by increased utilization of existing platforms, fueled by current and future investment in user acquisition and planned releases. And in the tabletop segment, we expect to deliver according to plan with operational EBIT growth of at least 10% versus last year. Johan?

Yes. So if you look at the facing of the forecast over the financial year, we expect to see a notable seasonality facing for board games, mobile and PC console back catalog products. We believe that the completed investment value for PC console content will be the strongest in Q2 and Q4. If we look at the phasing of the operational EBIT, In Q2 to Q4, it's relatively similar, but with a slight favor of Q3 and Q4 over Q2. Looking at this current quarter Q1, it will amount approximately to one seventh of the full year forecast for this current financial year, driven only by a handful of new releases.

Thank you. So with that said, I would like to just give a very short update on the M&A and investments. So we believe it's important to continue expanding and investing into the ecosystem that attracts and retain talents. Organically, we have been able to grow 14% year over year. And all this creates synergies and enables great people to realize their very high ambitions by joining the group. But we will continue working with bolt on acquisitions when it makes sense. We see the M&A market in general. The valuations has notably been decreased the past week, weeks and month. And there is and a great opportunity obviously for us being one one key player in in this market to continue executing and to deliver even greater shareholder value by welcoming new family members over this and coming years um so We recently announced the acquisition of Crystal Dynamics, IDOS Montreal, and Square Enix Montreal, including Tom Raider, DevSecs, Thieves, and Legends of Kain, and other IPs. The announcement got an overwhelming and positive response. We see great potential, not only in sequels, but also remakes, remasters, spin-offs, as well as transmedia projects across the group. We expect the transaction to close in the July to September period. But with all this said, I would like to state that Embracer is still a small fish in a big pond. And we currently represent approximately one and a half percent of the overall gaming market. So and we are just in the beginning of our journey. It's important for me as a founder and major shareholder to have commit to have committed long term shareholders that share the same long term horizon. I'm humble and grateful to all of our current loyal shareholders for their commitment and long term support. We are actively pursuing multiple conversations with additional potential shareholders among high-profile large institutions and industrial partners that would support our long-term strategy. We are confident that some of these conversations will mature into investments or and partnerships. Before the Q&A starts, and I would like to welcome the Asmodee team here on stage to have questions with Oskar as well. I'd love to share a picture with you of the Embracer Games Archive, something that we have an enormous positive response from key stakeholders, both within and outside the group and this makes me smile when doing the everyday business and actually I was really glad to see the first commercial output from this that they are looking to do retro console on one of the iconic formats within the group and they asked the archive to actually provide the physical copies because they were not existing elsewhere. So let's see how this will develop over the coming years. There is a huge excitement around this. So with that said, I would like to hand over to Oscar.

Thank you very much, Lars, and welcome back to the audience for Q&A. I have a lot of company today, which is very nice and a ton to discuss, I think. Let's start with some questions on Q4, so Lars and Johan. Relatively few in-house published titles of substantial size in Q4. And quite tough comparisons, obviously, with Valheim, but 3% pro forma growth. But I want to start by asking just on the back catalogue, anything that really stands out on the back catalogue? Any positive surprises, negative surprises?

I'm just amazed by the diversity of the catalog and the stability of key titles like Metro Exodus, SpongeBob, Borderlands, and many, many others. As Johan stated, looking at the year, the largest title only represented 4%, and that includes new releases. So we have hundreds, or I would say thousands, of revenue lines. That is not including the thousands coming from Asmodee, you know coming through the group every every day so i think that is a solid foundation of having us everyday business great and i mean let's talk a little bit about the releases in the quarter the new the new titles

And I mean, the big release, Tiny Tina's Wandlance from Gearbox, obviously Randy and his team seems very happy. And I think Take-Two reported in its Q4 report that they have $84 million in sales in the first sort of week, I suppose. And you mentioned in the report that it continues to perform strongly. Randy seems really happy. Can you share some details on when you expect royalties? Are you generating royalties now? Some input there would be helpful.

It's complex. Obviously, each and every agreement is different. first of all, without saying anything about this agreement. The agreement depends, is it recouped against royalties? Is it recouped against investment? So there is a different mathematical formula before royalties kicks in. So then there is further investment into marketing and into new content. But we expect, regardless of the underlying agreement, to recoup and that we will start seeing some royalties coming through. Whether we will see summer royalties coming through earlier in the year or whether it will be later in the year remains to be seen. But I think with the current pace of engagement from players, I'm quite positive that we will see summer royalties coming sooner rather than later. You know, it depends on the continued performance and obviously it's a bit sensible for me. Our friends at Take-Two is really driving this commercially together with Gearbox. So I'm a bit in the backseat here to disclose too much color.

Understood. And I mean, Randy is maybe sitting at home in his PJs listening, so I can't ask the question to him. But I mean, could you say something about, you know, how important is this for the overall Borderlands franchise? We have a movie coming up later this year, possibly next year as well. But just tell me a little bit about that dynamic as well.

I think Tiny Tina stands on its own leg. It's a new established franchise, it's a new IP, even though you can argue it's coming out from Borderlands. At Tiny Tina, as Randy said, 30% new players that have not played Borderlands before. So it's basically a new franchise. I'm super excited what Tiny Tina could bring in the future. But I'm as excited about Borderlands... And I think it's critical for the success of Gearbox, obviously, being able to produce this high quality AAA content. So I think the future looks bright for Gearbox.

And Randy and his team have been very busy and delivered here in Q4. The Risk of Rain expansion also seems very successful. What do you see ahead for that franchise?

No, I think that success took me a bit of a surprise, you know, that releasing this DLC content actually was stopping the Steam charge and being there for quite some time. And actually, you know, generating some really nice numbers. I think they will continue work on Risk of Rain together with a developer that owns the IP and in close relationship with Gearbox Publishing. So... Obviously, I don't want to disclose anything today about future content, but you just heard me saying there's 110 things teams telling me will come, so...

Fair enough. Very good. And then on, I mean, what, for me, at least was a bit of a disappointment in terms of reception from, yeah, especially perhaps sales. Elex two from THQ Nordic. Quite tough competition in the quarter, perhaps that other companies in the industry have spoken about with Elden Ring coming out being a huge success. Has that had an impact?

I think Elden Ring, first of all, I'd like to congratulate the developers and Bandai Namco for the success. I'm really glad to see that you're able to create such success on a new IP. Selling that amount of copies is just amazing. And I think that tells for the industry and for us in the future. Obviously, when that came out, it was more like a GTA moment of capturing the dollars in the marketplace, especially if you had a product that goes into the same player base. And LX2, I think, came out a week after Elden Ring. So even I know the analysts of Embracer, they play Elden Ring about LX2. So that tells a bit of, you know... But I think ELYX has a strong fan base, and the game is in line with the expectation of that fan base. So looking at ELYX 1, it's actually commercially viable and it's continuing to perform. And I'm sure ELYX 2 will be a good investment over time. And most importantly, they deliver the a quality product to their fan base, then you can argue whether they expanded it further, but to that core fan base they did deliver.

Perfect. And going over a bit to Matt for some questions. I mean, after the quarter you released Evil Dead, the game. You mentioned before here that the game has sold 500,000 copies in five days. What do you think about the longevity of the game, the roadmap for new content? What do you think of the ratings, which are not fantastic, I would say, but perhaps for the genre it's quite solid?

Well, I'll take your last comment first. Actually, we're pleasantly surprised by the reviews that we've gotten for the game. An asymmetrical game, which is primarily multiplayer in nature, to score what it scored is a true sign of quality. And actually, it exceeded our internal targets for how we thought it would perform. And so we feel really, really good about that. The other thing we've learned is that the day of Metacritic determining how well a game sells is long gone. Games are sold by social media, they're sold by influencers, they're sold by buzz, and they're sold by the quality of the product itself. irrespective of how well the game performs. I mean, I can name numerous titles to you that have scored in the eights and the nines that publishers or developers have wished they never released because it's nice to put a plaque on your wall, but if you can't buy the nail to hang the plaque on, then what's the point of having the plaque in the first place? And so in our case, the game has reviewed well, better than we thought it would review, and it's selling better than we expected. Obviously, we've been down this road before. SnowRunner was an unexpected success. I guess we should start expecting our success because we seem to keep having them, but we were prepared with downloadable content that we had available right after launch, and we continue to support that game to this day. The same thing applies to World War Z. And the same thing applies to Evil Dead. We have a full content plan in place to continue to support the game. What we've learned is that games have long tails. And then when a game has a long tail, it needs to be supported in order to have that long tail. And so we have comprehensive plans in place to support that. And to add to that, we have plans to create, and I think some of these have been announced, similar games that rely on kind of past horror licenses as well. So we think that there's an entirely new area for us to explore here. And just to comment really quickly, even though this question wasn't for me, on Alyx, I would say that sometimes it's hard to release a game in a quarter where there's such a juggernaut. And it makes it very difficult to immediately monetize. But what we've learned is that even games that have slow starts can have strong finishes. And there's plenty of ways to monetize product after launch. I mean, whether it's a subscription-based deal or whether it's... a free week or a free weekend on another platform. Games are no longer, even premium titles are no longer about putting them in a box, hoping the first month goes well and then forgetting about it. And so there is an absolutely voracious demand for content right now amongst all the competing platforms. And so any game, even games like Alex with slow starts or games that are with fast starts like Evil Dead can have long legs and tremendous success over the long term.

Very good. Thank you, Matt. And then, I mean, Ukraine, Russia, it's a sad topic in a sense. You talked about it a little bit before, but what's been the biggest challenge for you in the quarter related to the war in Ukraine?

Well, you know, look, we have offices in both Ukraine and in Russia. I can speak for almost everybody in the company that when I say, and probably for everybody, but I just haven't spoken with everybody, that there's a universal abhorrence to what's going on. And although in certain of our territories, people might not be able to speak as freely about that because of potential reprisals, It hasn't been easy. It hasn't been easy in Russia, and it certainly hasn't been easy in Ukraine. We've done everything that we can to support our employees, employees that have been with us for over two decades that we love and that we consider to be part of our family, and that are certainly, in most respects, put in terrible positions on both sides of the border. So all I can say right now is, as part of Embracer, our first and foremost obligation is to our employees and to support them, which we've done. We've actually relocated some of our employees from Russia that have had that ability and that have wanted to move, and that's an open offer. whenever it's possible. Obviously, it's not necessarily so easy to get a visa, and it's certainly not easy just to get out of certain territories these days. And so, you know, we're just... We hope and we think... The worst of it is beyond us. Our employees in Kyiv are all safe. We've had employees that we've helped relocate to other territories. I know Kiki has been extremely active in helping to help families relocate out of Ukraine during this crisis and helping refugees. And so I'm actually very proud of the efforts that our teams have made, not just not just at Sabre, but at Embracer as a whole. I know Crazy Labs has done some amazing things as well, as has Easy Brain with their studios in Belarus. It's absolutely been a challenge and it's been very difficult for us, especially because we're accustomed to traveling to that part of the world. every six weeks. But our hope is, as I'm sure everyone else is, that we're on the tail end of this and can start to resume our normal lives. But in terms of the production aspects, I think we've done a really good job of keeping that as under control as we possibly can. And so even though that's the less relevant question at the moment, I would say that there's been a minimal financial impact on... on the games that we're developing and on timelines generally. And if I said too much, Lars, you'll get me paid for it.

I think it's worth highlighting the efforts. This took a lot of effort from everyone within the group, and we have invested into a lot of humanitarian support across the group.

It was our sole focus for a good month, just figuring those things out.

Thank you, Matt. Understood. And then heading over to some questions from the audience here. Before I come back to more questions on Asmodee. And please remember that you can ask questions in the chat. I will get them here and try to ask as many as I can. So starting here, it will be a mix of questions. Starting with a question from Jesper Birch Jensen from SEV. As Modif figures seem very strong with last financial year revenues being quite above expectations, a strong organic growth in Q4. What's the main driver here and what type of growth are you expecting in the current financial year? I guess the question for maybe... On Asmodee?

On Asmodee, yeah. So what we communicated, we're expecting a 10% growth in operational EBIT. I would hand over to Asmodee to answer that question a bit more.

thanks for the question oscar yes we're very proud about and happy about the performance that we have let's look at the pro forma basis over the last 12 months and also during q4 knowing that you know obviously since since march the world has changed a little bit, but I think I will say that this is the continuity of our strategy, working on our IPs, developing very strong relationship with our communities, our fan-based communities, improving our knowledge of consumers, basically, and as much as possible, try to improve the way we serve our retail channels. so i will say it's if this is the continuity what we've done for many years we are growing company the market is growing historically wise we used to outperform the market if we had to look q4 and calendar year okay since since jan what we see and this is what we were expecting because when I was presenting Asmodee for the first time back in December, we talked about the market. Our view was that the market is going to be flat for the year to come, which is currently what we can see. And in this situation, we are, to some extent, outperforming the market. And we expect it to continue. And the way to continue to do that is for us to continue work on the IPs, make sure that we can deploy, be innovative as well. As Simon showed, we're going to present a launch in the coming years more than 100 new games but you know our business model our revenue is not dependent on the new releases because the way we work is it's long term business we are kind of a ramping up business because When we launch a new IP on the market, it's what we call very small quantities, volumes. So on average, when we put a new game on the market across the globe, it would be between 40 to 60, 70K units. So it's not a lot because, as we mentioned, we sold more than 40 million games. games last year. So basically what we are doing is every year we are adding up on our catalog new IPs and what we try is to have this ramp up year after year that basically brings some incremental revenues.

Excellent. And another question for you, Stefan, from Tom Singlehurst with Citi. So within Asmodee, there's a general perception that the unwind of the pandemic effect will dampen demand. Can you talk in particular about the outlook for trading card games and what the growth drivers and outlook are for that element of the portfolio?

Just what I've just said, some months ago, when we presented the numbers and we reviewed the consumer market analysis after 2021 and the COVID impact, we were expecting, the market was expecting our business to be flat. And then from 2023 to start again on a kind of a 3% to 5% growth curve, which is what we expect. As I just said, year to date, calendar year, the market is flat as expected. In this context, we overperform. Games are overperforming and TCG's trading card games as well. We expect the trading card game to stay quite high because it's a fantastic franchise. We are lucky to be a very strong long-term partner to a fantastic franchise such as Pokemon and Magic. We know that those brands are really... booming and it does a very long-term brand with very strong communities. So I will say, okay, we expect this market to be flattish this year and from 23 to the growth to come back at the pace we knew on the past years.

Perfect. Thank you, Stéphane. And then a question for you, Lars, here from Nick Dempsey. Across the industry, PC and console games have been seeing delays. Your approach is not to force games to be released before they are ready. So when setting the guidance here for full year 23, have you factored in a number of likely delays into your thinking? Or is the range just based on the slate that you have in front of you for the year?

Well, we are assuming delays when we are doing our forecast. to major games as well or the ones with a budget above sort of 10 million euros as well there has been a little bit of movement within the guided range with our forecasting mainly i would say in the next financial year there is things moving in and there is things moving out so

So for 2023 and 2024 primarily? Okay.

As I stated, I gave a little bit of color. We have 110 games projects being released. The only thing I know today is we will not release those 110, but I don't know what titles that will be delayed. So we have made financial assumptions of delays, but I can't pick what title.

Okay. Of course. But I mean, a follow up on the guidance from me here. Obviously, things change in three months. A lot happened. Ukraine, Russia, the war has happened. FX has moved significantly, positively. And you've also done some minor acquisitions. We're seeing increased inflation. Could you talk a little bit about the dynamics and the moving parts for the guidance for this year and next year?

I think we talked around it at the presentation, how we see the facing of the operation EBIT in the year. I don't know, Johan, if you have some repeating messages on that, but

No, but I think the key message is that we are first overall reiterating the guidance that we have given for the two this year and the next financial year. Also, as said, factoring into what has happened since we last disclosed the forecast. And we spent a bit of time on the presentation now to talk about seasonality because of course we have the releases where the just the release schedule has a big impact on on especially within pc console but also when you look at asmodee being a new business for us where you have clear seasonality and I think Miguel explained that really well in the presentation so that's been part of or taken into account when discussing the phasing so one seventh one seventh for the Q1 approximately of the forecast in this current quarter

Then there is fairly similar Q2 Q3 Q4 little bit more into Q3 and Q4.

And a question on the topic from Martin and now at DMV markets. Considering your comments on the quarterly outlook for this year? Have you postponed certain game releases from Q2 Q3 to Q4? And if so, which titles and for what reasons?

We just said that we are expecting the most completion value in Q2 and Q4.

enough said. And then, I mean, obviously, EasyBrain will be a strong driver of organic growth. I mean, I thought there was some seasonality, but there does not appear to be. They just continue growing fantastically. But it's fair to say here, another question from Martin Anel, is it fair to say that strong EasyBrain revenue came at the expense of a lower EBIT margin? What about, if you could say something about the quality of new mobile users and your ability to capitalize on these in coming quarters?

I think Easy Brain in general continues to surprise us with a very strong performance. I think it's their execution of what they're doing and focus around being number one in the world. They just continue to outperform the competition and find new audiences. They, as all our businesses, they invest as much as they can organically when it makes sense. They have been aggressively investing into user acquisition and that is paying off. And I expect them to continue doing that. It's really hard for me to forecast the user acquisition costs in the marketplace. But being one of the biggest players in the world, I think they're well positioned to understand that and grab all opportunities every minute and day to find new users in combination of organic user and inorganic users. So I'm expecting the user acquisitions spend to be in a fairly similar level. Then in this quarter, they made a platform deal with an ad platform that came on top of their business. And obviously, we can't expect to have platform deals just that we can't have that in every premium games business. We can't expect to have that every quarter or even year. But there is value in what they have and the volume of players. So I think that platform deal itself showed that value.

Great. And then a question on this topic as well. Final question on EasyBrain. Strong performance by EasyBrain. Could you please expand on what the ads mediation platform has meant for EasyBrain? And does this opportunity exist for your other mobile game publishers? Question from Jesper Bertsjansson at SEB.

Yeah, I think it's hard to predict. It's the same as Matt, it's hard to predict what kind of platform deals we're doing on the premium games business. I think there is more opportunities, but for me, the mobile games, it's a bit... It's different from premium games. But I'm just amazed by the success they're having and the interest they're getting from industry partners, the ads monetized platforms. And there is, what I understand, a huge competition against various platforms. So I think as there is competition in the premium game segment between platforms, being a content provider or ads provider, I guess we are well positioned.

Definitely. Then a few questions from Marlon Wernick at Nordia Markets. Take them one by one a little bit. First of all, from what date was Asmodee and Dark Horse respectively consolidated and contributed to the group? Maybe a question for Johan.

Yeah. So Asmodee from 8th of March.

Right.

And for Dark Horse. Roughly the same. Roughly the same. Yeah.

Excellent. And then a follow-on question here. You have an acquisition-related amortization expense of roughly 1.2 billion in the quarter related to amortization of IP rights. Can you comment on this? What has triggered this?

You mean the amortization expenses in the month or in the quarter? Yeah, for IP rights, yeah. Yeah, so just looking at the acquisition related amortization, the gap between the forecast that we had in our Q3 report, it's basically explained by the addition of Dark Horse and Asmodee coming in earlier than what we expected. And then, as stated in the report, we have also finalized PPAs. That was preliminary earlier during the year, which has inhibited a shift between goodwill and IP rights.

Any specific acquisition that it relates to or just general?

Now I would say general and also fine tuning of the allocation between other intangible assets that you do when you finalize the PPA.

Okay, understood. And excellent. Then let's go back a little bit to the pipeline, my favorite topic and Lars's least favorite topic, I think. But starting with with Matt, actually. I mean, my favorite person to answer as well. So I mean, you have the group has, I think maybe I expect for AAA releases this year. And I think Sabre has two of them. So Space Marine two, what's the status there? What's the is there any hype? Is there a lot of interest in the franchise? What can you say about it?

Well, what can I say about it and what should I say about it?

You can talk about the product. When the product is coming, that's something for the publisher.

I got it. Don't worry about it. I promise. I'm older than you, so certain things I've figured out over the last 50 years. Although he is my conscience, he's like standing on my shoulder all the time, so I always have to make sure what I say... In terms of when it's coming out, we haven't announced a release date yet, I don't believe. And when we do, you will be the first to know. I can tell you that there's a tremendous amount of excitement in the game. Obviously, the license holder in this is Games Workshop. I can speak pretty freely when I say that I think this is the game that Games Workshop is most excited about in the history of every game they've ever made. I can mirror those comments for many of the people that work within our company. Not that I want to hype the game up too much, But we've put a lot of effort, a lot of money, and a lot of love into this product, and it's certainly showing in the results. The buzz on this when it initially got announced was just fantastic. It exceeded our expectations. We knew it was going to be good. We didn't realize it was going to be bad. this good and um that's been reflected in the interest that we've gotten from platform holders um in making sure that it gets on their title and maybe you know uh it with with some exclusivity which we haven't announced or agreed to at the moment um but we have a tremendous amount of excitement for that title and i think that it's well warranted given what we've seen and so uh

I think you're doubling down basically on that project. That could also impact the timeline. So I don't think there is any official release date saying it should come this year, Oskar.

Well, I didn't say when it was coming, but I said it was really good. Once again, it's worth just reiterating here that for us, you wait a few months and a game which is going to score a five can score an eight. And so when we have a long-term approach the way we have, we're not going to release a game just to hit a quarter. If you can wait three months and all of a sudden the game is going to double or triple or quadruple in value, we've seen it with Evil Dead. I mean, our The mock reviews we were getting on Evil Dead were, you know, and Tim Willits and his team took charge and basically said, we're going to take this and we're going to turn this into a really, really good game. And we gave it just three extra months. And those three extra months moved us out of a quarter, but it just made all the difference in this game. I really believe that. And so why would we have released it three months earlier just to put a number into the books? It just wouldn't have made sense for us. It's It's got to be quality first. That does not mean we're slipping on Space Marine. But it just means that our focus is on quality. But obviously, we always have an eye on budget. We want to make sure that the games are going to be profitable. And I think we've discussed this in Sabre's case where we have a pretty good grasp over how to keep things under control on a budgetary basis. And I think we're fairly confident that in our deliverables, our timelines, and the quality that we can deliver at.

And going to the next big title that I expect in the foreseeable future, Knights of the Old Republic remake. I mean, that certainly purely objectively received a lot of hype when the trailer came out six, eight months ago. What can you say about Aspyr's progress there? How much is Saber helping from other studios? What's the interest and the progress there?

You're absolutely right that the interest in the project is just immense. It's one of the most beloved franchises of all time. Aspyr has gone full in to make this the best game that they can make. When we acquired Aspyr, we knew from the start that they were going to require our assistance. Saber has tremendous expertise in creating these types of products. We've done it on Halo, on multiple Halo products. We've done it on other titles that we've remastered or brought over onto other platforms. We've been spending a lot of time and effort working with them to bring this title over. I don't think we've announced a release date on that one yet. I do know that there's been announcements in a collaboration with Sony And we're fully confident that the game is going to be fantastic. But it's a massive, massive product. And massive products require a lot of effort and a lot of time to make good. And especially when you're talking about a game which is already... very old, we've had to basically remake that game from scratch. And so I would say within the next several months, you'll be hearing more from us about it. I'm feeling very, very positive about where we're going to end up with it. But once again, we're taking our time to make sure we do it right because this is a game that we think could be one of the biggest sellers the year that it comes out. But so far, so good. Excellent. Thank you, Matt. And then... Humble. One of the biggest sellers in Sweden.

And so heading over to the closest release. I mean, the closest... to date release of a AAA game, Saints Row, which we had a good presentation of. I think I read maybe seven or eight reviews this week on the game. But what do you think, Lars, what are the game's strengths, weaknesses? What's the interest like?

As you saw on stage here, I think the team has been working really hard. We've given them extra time and resources to really polish and to deliver a high quality product in line with the Saints Row franchise. And I'm confident they will deliver the best Saints Row game ever. So without further commenting on that, I feel confident about the product, the quality and release.

Was that more humble than the way I put my thing?

I would say maybe a little bit more humble. But I mean, I think in my view at least, it seemed like you dodged a bullet a bit on the competition in February and March. What do you see in terms of competition in August currently?

It's still a bit early. Let's see. I think it looks, you know, it's hard to comment on the competition.

There is no competition. That's what he really wants to say. There's no competition. But sometimes now you understand why you delay games. You've got to get it in the right window.

Absolutely. It's good with the interpreter here.

That's why they bring me in from America.

Excellent. And then, I mean, stepping back to Stefan and Moge, is it? uh so uh we talked a bit about the the growth here in q4 the outlook uh what can you say about uh the progress in the us uh it seemed like other markets were growing quicker uh currently i mean in 2021 was the progress in the us how large is it as a percent of sales and what's the opportunity there

Yeah, so maybe I'll comment and you can jump on. First, the US is, in our opinion, progressing very well because, if I'm correct, the US is a double-digit growth. The catalog there is only board games. We don't distribute TCGs. So also as you have seen, there is also an acceleration in the growth of TCGs in Europe. So if we are to compare Apple to Apple's overall growth, the game is growing by 13%. I think the U.S. is growing by 16%. So I think the U.S. is overperforming the average. growth that we have in the group so we're super happy about our performance in the US and specifically since last year when we basically implement our direct to hobby program where we invest a lot in terms of our teams our infrastructure and as I said what we want to do is to be closer to our sales channel and partner and better serve our customers so I would say that the performance in the US is great

Okay. And other strategic priorities as you see it, the top two priorities in the next sort of one, two years?

are going to be not very innovative. It's to continue what we do, IP first, continue to enlarge the quality of our catalog and make sure that we can continue to serve our customers the way we do it.

Excellent. And then a question for you, Miguel. On the seasonality here, I mean, sales, I think we've received some input from the time of acquisition. But in terms of margins, is it very much stronger margins in Q3, fiscal Q3, or how much does it vary?

Well, as I said, sales-wise, Q3 remains our highest period in terms of contribution, and Q1 and Q4 are the lowest. In terms of margin, the seasonality follows a similar pattern, so there is coherence in terms of seasonality.

understood. And what I mean, very exciting to see all the releases that have come out and are coming out. And I mean, a lot of licenses renewed, important licenses from prestation there. Are there any licenses that were not renewed? And is that common sort of in the group?

No, we don't have any. I mean, all our licenses are renewed. We have a very long-term partnership. We have very long-term partners with the licensor with whom we are working with. So it's super happy about the relationship with them. We really work as a business partner. We've been able to dedicate a team and invest a lot of money to work with them. And I think this is one of the reasons for the success and the ongoing continuation of the relationship. And also, we are super happy to see new partnerships, as we mentioned today, with Netflix, with Ben and so on, because they also, I think, appreciate the quality of our job, the investment that we put, the motivation of our team to work on various fantastic franchises, even if they don't belong to us, basically.

I'm very much looking forward to the Squid Game myself. And just one final question. I just want to ask about, for example, this Exploding Kittens movie or series with Netflix. Can you just remind me or us about your role and your involvement in that financially and operationally?

So basically, such as the Ambruster Group, we are a highly decentralized company, so the TV animation, which is currently on production and is going to be released in 2023, Netflix was already a discussion that the Netflix studio started to have before they joined the Asmodee. Before we take a majority stake into the company. And this is how we work, basically. So we work with highly successful entrepreneurs that have joined the group and that basically have developed their own strategy and we're here to help them we have to back them we have to provide them with the means whatever in terms of human resources and sometimes financial means to be able to develop or extend accelerate basically their development and that's also the reason why the i mean studios are willing to join us is because you know when you are successful studios you're independent And you know you have many things to face and we're here to help them. We're here to tell them, guys, you're going to focus on what you are very good at, i.e. innovation, development, publishing. And we're here to provide you with a lot of shared services and support.

Oscar, I think we need to wrap up.

Yeah, excellent. And I mean, just final topic before wrapping up, actually, because we have I don't think I've ever received so many questions on one topic before regarding the ADOS and Crystal Dynamics and Square Enix acquisition. So I won't ask them all for sure, but perhaps some sort of quick questions there. First of all, will it be reported as an own unit or part of one? What's...

Yes, so we are in the process of between signing and closing and we are in the process to decide upon the exact structure how those companies and assets will be reported and operationally be integrated into the group. So we are working around the clock to understand and to look at various opportunities. But I would like to point out that they are fantastic teams and very autonomous studios that has built over decades. So whatever structure they end up with within Embracer, they would have a lot of autonomy and trust from our side to deliver on their key expertise in the future. So I can't disclose any new information regarding that structuring, but there is obviously a lot of different options. Even though we have a base case here and regardless, there is huge excitement also within the group about this opportunity.

And I mean, you have announced some of the IPs in the deal. We have a ton of questions on every single IP that could be part of this deal. I think I'll save those for when the deal is closed. But then just wrapping it up with the final question, a lot of questions on this final comment in the presentation on partnering with industrial partners, financial partners, what you spoke about there. If you have to choose, this question for Martin and Elle at D&B Markets, if you had to choose, what's the most interesting for you? One, a partner facilitating your graphical expansion, or two, diversification of your content and development? And if you could discuss that, give some flavor on the things you said there.

The most important for us is that we get long-term partners believing in Embracer and the strategy we set out and that we could remain an independent player within the gaming market. We are working with all platforms and players and we are part of this ecosystem. So I think we should be careful of entering partnerships where we're locking too much of our business into one group of people or one platform, for example. With that said, we don't mind to work closely with some larger companies so we can support each other. But key for me that, you know, we could continue operate as we do, and adding further strength to that, to a partner, what it's important that, you know, we are rowing in the same boat together. So you don't have someone distracting and trying to take us on a different course. It's complex, but I'm sure we will be successful.

Very good note to end on, I think. Thank you, everyone, for all the questions. Sorry I couldn't ask all of them. Thank you, everyone, for giving good answers.

Thank you.