Earnings Call: Q1 2021

Apr 26, 2021

Yes, good morning. I would like to welcome our investors, analysts and all others who have dialed in to the Media and Games Invest Earnings Call for Q1. We released our financials early this morning, and we are very happy and proud regarding the great performance we showed in Q1 2021. Yes, it's continuing our fast profitable growth strategy and giving us a very good start into the year 2021. And we will run you through the headlines today, And this will be done by Paul Ekst and myself. And I would like to start on Page number 4, where there's a short picture of Paul and myself. And won't go into detail. I think everybody knows it by now. And just giving a short overview of the shareholdings, we talked about in total of 128 700,000 shares outstanding where, let's say, I'm holding still 33% and the rest is free float where we highlight here Oaktree as one of our cornerstone investors. Yes. We'd like to go to the presentation, Page number 6. Here we show our financial highlights for Q1 2021. And yes, really happy about these numbers. Good start into the year. We did €51,900,000 revenues, which is a 96% year on year growth, so compared to Q1 2020. And we did this with a 26% EBITDA margin. So we realized €13,500,000 adjusted EBITDA, which is 127% increase versus the EBITDA of Q1 2020. What were the highlights of Sales per quarter, 2 M and A transactions that we did early in the quarter, Kingsisle, transforming transactions, getting 2 great games into our portfolio, also adding very nicely to the revenues already in Q1 and Liquid, a company that we acquired from Nexstar Digital, a large or from Nexstar, a large TV company, a digital TV company in the U. S, which also added a lot of assets to our media side, also growing very substantially. Going to the next slide, Slide number 7, which gives an overview of who we are, a bit of our yes, over. The one slide that shows the main things, characteristics of the company. We did over 30 M and A transactions, just going through from on the left side in the last year. So M and A has been really very strong in building our critical mass. I mean, that's We started with a small game company, Gamigo, where we said, okay, that's too small. Let's really build Critical Mass. And with Critical Mass, you can also do strong organic growth, which we are now also showing. Market cap over €600,000,000 now, we are listed on Frankfurt Stock Exchange since early 2018, also on NASDAQ First North Premier since October last year, over 800 employees. The gaming side, I mean, name fest already to Media and Games. The gaming The majority of our revenues is coming from so called massive multiplayer games, games where people are playing together, are building up the character or the city and are very loyal and also very loyal paying players. Also, casual games, over 5,000 casual games. And what really is common on Everything that we do on the gaming side is we are looking for sustainable long term revenue streams, so games or game subscriptions or game categories where people are in for a long time so that our user acquisition costs are relatively low in comparison to the lifetime revenues that those games generate. Over €100,000,000 registered gamers by now. And on the media side, yes, we delivered 111,000,000,000 ads in the last 12 months, which is, if you looked at December, we announced that we did €83,000,000,000 over 2020. So we had a strong growth in that and working for over 5,000 advertisers, getting a bit more detail later into the segments. Then on the right upper side, a bit of the regions. Yes, in Q1, we did 61% of our revenues in North America. So we further strengthened our position in North America, which had to do a lot or had a lot to do with KingsIsle. Last year, full last year, we did 54% just as a comparison search shows really strong growth in North America. Also happy to see that Asia and the other parts of the world have also been growing. Let's say everything has basically been growing. And also Europe has been growing, although the percentage wise Europe has gone down a bit. Yes, in the segments, roughly fifty-fifty, so 53% games, 47% Media. And on the bottom left side, you see that, yes, we have really been able to grow substantially year on year. But now the last bit over 2 years, we had a CAGR of 76%, yes, which has also continued very strongly as you saw with a 96% growth quarter on quarter in Q1. Coming to the next slide, Slide 8. And we're going into the 2 segments. For the gaming part, €27,400,000 revenues in Q1, which was a 97% growth. The Media side on the right side, €20 €4,500,000 revenues, which was a 94% growth. So gaming grew a little bit faster, but I mean both have extremely fast growth. Yes, EBITDA, €10,900,000 on the gaming side, which is 40%. So it's extremely very strong EBITDA, which is realized that we have been able to improve our EBITDA by economies of scale, further cost savings and of course also KingsIsle added a lot to more substantial EBITDA. Most money coming on the gaming side still from in game purchases, but also game subscriptions and advertising revenues. On the media side, €2,600,000 EBITDA, which is much lower at 11% of the revenue, which is, let's say, compared to the gaming sites below. But also, we need to realize that the media side, we're only doing integrations and have been building up the segments since That's the 4 years on the gaming side. We've been doing it over 8 years. So on the media side, we are not into our target margin. Target margin is 50% to 20%, which we also expect to reach soon and also here to realize in 2020, we had an EBITDA margin of 9% over the full year. So Q1, which is not the strongest one in Media. Media Q1 normally is the weakest quarter. We did already 11% and expect to lift that up further in the year. Revenues in the Media side coming from SaaS fees, agency fees and ad commissions, but the majority now with SaaS fees. Coming to the next slide, Slide 9. Yes, also to show a bit that we are working in growing markets. Games as well as media have showing strong growth. So 2020 revenues worldwide, annual revenues are expected to be 175 €1,000,000 in the sorry, on the gaming side and €323,000,000 on the media side with strong growth expected in the next years, 12% CAGR is expected. Jan, we are very happy that with our 38% organic growth that we did now in Q1 that we're really far above that. So the markets are growing, which makes our lives a lot easier. But with our strategy, where we in the beginning only did acquisitions, but now a really strong organic growth, we've shown that we can outbeat the market by organic growth. Coming to next slide, Slide 10. Yes, that's also the reason that we're combining the 2 and I think that's a big part of our organic growth is really combining Gaming and Media. We are not unique in this. I don't know for those that watched, Applovin has announced its IPO, IronSource has announced its spec deal. Those are companies that originally were media companies that started to get into gaming, so they also do the combination like we do. And yes, what you see here on the slides, with us now going in every detail, The combination of media and gaming makes a gaming company much more effective, much more efficient and also a media company gets more efficient by having the gaming side. So that's a really big win and we're really starting to show that more and more in our combination. Coming to Slide 11 and highlights for Q1 on our products. On the gaming side, yes, acquisition of Kingsville already mentioned before, we added 2 strong games to our portfolio, Wizards 101 and Pirates 101, they both performed in Q1 above the plan that we made when we acquired the company. We're really happy with it. There's, of course, always when you do acquisition, there's certain risks of the let's say, in the handover phase, But it was really extremely smooth transaction and the team is extremely motivated, has been integrated in the total team of the gaming part And it's extremely enthusiastic and a lot more to come. Then TropSouth Korea, yes, we have, let's say, a lot of IPs that we where we own the IP worldwide fully. And here also, let's say, in certain markets, we don't want to publish the games ourselves because of the market risk, but the political risk. And one of those markets, South Korea, also a very competitive market. And here we found Appergan Games, a strong publisher in the Korean market who, yes, we closed a partnership with to publish Trove in that market. The open beta has been finished. The game is now being live. And let's say, yes, it looks very promising. So we expect quite something from the Korean market. Then the 3rd one, Echo of Soul, another of our games that we have, we had a massive 3.0 update, which brought a lot of extra levels to the players. So they can now play altogether 99 levels, which is a big yes, upgrade on the game. And that's also typical on massive multiplayer games. At a certain point, people are at a level cap, which means they have reached the highest level. And then if you open new more levels, new levels, people get much more active again and of course, that's good for the revenue. So that's what we saw in Q1. And then ARCHH, one of our other strong games, ACash Innovation was a big update that we did, which gives access to gunslinger skill sets and also, let's say, a lot of new things to explore and to further elaborate on the game. So those things have been driving strong organic growth on the gaming side. Then on the media side, We had sorry, strong organic and inorganic verticals came out also on the list. Then on the media side, also here to start with the non organic part, which the acquisition of Liquid, as already mentioned before, which is a digital video platform, video is becoming more and more important for advertising. Lot of traditional TV is moving to digital TV, more and more is on video screens and for that They are very important as a gaming company also to have the capability to advertise the games on these media. So with that, we are really happy with the acquisition. Liquid is fully focused on the U. S. Market. So that's one thing that the Werf team is now working on to also expand outside of the U. S. Then the launch in Japan. Japan is a very important market for gaming, but also for media. So also very happy to have an office there on the WERF Group and Also, let's say, starting to roll out our products and advertising services there. Then very important, having done also several acquisitions On the media side, where a lot of them were still working with their own brands, we have now decided to take everything under the Verb brand. The Verb Group brand has also a new logo, which was released and we are now rolling out to all the companies, to all the group companies this logo. So the integration that we have with teams, it happened already before, but we also want to show this now to the market to also have a single offering to add to the market. Then, yes, very important also being a gaming company, the Media part did last year 60 percent of their revenues with game companies. We've increased that now by 10%, so to 70%. We see that the know how that we have on the gaming side and also the properties and everything is really very attractive offering for other game companies. So also there we saw a strong growth. So yes, 94% revenue growth on the media side, 97% revenue growth on the gaming side. So really proud and happy with these results. Then going to Slide 13, the strategy we'll quickly go over because this has not changed in the last 8 years. We buy companies, we integrate the companies and then we build and improve. So by, yes, as part of the strategy, looking for targets, there's so many targets out in the market. Then integrating, that's a bit special. I mean, that's a lot of other buying build stories in the market are not integrating the companies they buy. We strongly believe that when we integrate them that we get more efficient and that it's easier to manage those companies and if you get larger cost savings because of that, which we also can prove. And then with that, of course, when we have those integrated groups, which is the media part and the gaming parts of Amigo and Wirth, we really work on improving the products, on extending the user base on internationalization and yes, altogether further growth of the groups. Page 14, a bit more about the M and A side. Also same here, this is the principles we are working on, on the M and A side. So I've done over 30 acquisitions In the last years, typically, we target 2 kinds of targets. The one is more the distressed side, where we typically look at a payback of below 24 months, which means the purchase price plus burn rate plus restructuring costs, which has so far been happening. And on the EBITDA positive side, we look to pay not more than 6 times EBITDA, which sounds like extremely low because at the moment, we see that certain acquisitions really people paying 15%, 20% 20 times and over EBITDA multiples. That's the reason we are targeting a bit smaller targets because if you target the large targets, they really get more expensive. And the other thing, of course, because we integrate the targets, we have a lot of synergies there. So it might be that we pay also 10 times or even a bit more than that as a notable, but then there must be enough synergy to really come up in the end at this purchase price of the 6 months EBITDA. Target size, as just mentioned, if you target Game companies between €5,000,000 €40,000,000 that's in, yes, let's say, a level where you could still get good multiples, Gaming companies with €50,000,000 in over revenues are really there's a lot of bidding on them, a lot of competition and that's the reason we try to steer away from that. But we will rather do a bit more M and A in the next year, so more M and A cases instead of moving towards too much larger cases. On the right bottom side, you see that we have a well filled pipeline of targets. And on the left side, yeah, we have well defined processes for integrating the companies, for tying the companies, but also integrating the companies. Next page, Page 15, KingsIsle. This is the slide from the old presentation. So we acquired the company in January with €32,000,000 expected the revenues expected €21,000,000 EBITDA, which is a 66 percent EBITDA margin, Purchase price of €126,000,000 and an EV EBITDA of 6x. It looks like the performance of this company is much stronger than we expected. We haven't raised the targets yet. But, yes, Games Health did 17% of our MGI Group revenues in the Q1 from well above plan. Revenues, as you see on the left side, it's mostly still U. S. So we're working on also internationalizing that more, but having it just acquired in January, this will take a bit more time to really see those effects. And on the right side, you see the split of where the revenues come from, which is very interesting because Most of our M and A MMOs do only in game revenues, but subscription revenues are not so strong in the MMOs. Here we have 2 games with subscription revenues, which is an interesting model, which we also might roll out partly on some of our other games to make some additional revenues. So interesting case, very happy with this. And as I said before, the team has integrated very nicely And that's, of course, a good start for it. Next slide, Page 16. An overview of the M and A pipeline. Nothing changed here since our last presentation, which was not so long ago. So we have very substantial targets lined up. We have also smaller targets lined up and other targets that are a bit earlier in the pipeline. We wouldn't like to buy all five targets of this, but yes, pretty confident that we can close 2 or 3 out of this list in the coming 6 months, maybe a bit earlier already, and that's what we are focusing on to further grow on the M and A side. But not only M and A, as I showed before, also organic is growing very nicely. Then I would like to hand over to Paul to present the financials, to go through the financials. Paul, if you take over to Page 18. Yes. So starting here on Page 18, this is the Q1 financial highlights. Here we can see that we increased net revenues to €51,900,000 compared to €26,500,000 last year, which is an increase of 96% with a strong underlying organic growth of 38% and the M and A growth of 58%, while the adjusted EBITDA increased to 13,500,000 compared to 5,900,000 last year, which is an increase of 127 percent due to the KingsIsle acquisition but also increased EBITDA margins on the media side. The adjusted EBIT increased to NOK 9,300,000 compared to NOK 3,400,000 last year, which is an increase of 173 percent and the operating cash flow increased to NOK 11,300,000 compared to CHF 6,200,000 last year, which is an increase of 83% and has been mitigated a bit compared to the EBITA SUELL working capital effect. Coming now to Page 19, the summary of the financial performance. And here we see that we have now reached 166,000,000 revenues and €37,000,000 adjusted EBITA on a last 12 months basis, with 96% total growth in Q1 versus Q1 last year with a strong organic growth of 38%, while the EBITDA margins for the group have been increased from 20.8% to 22.2%. And as Kinta has just here, 1 quarter included, we will also see strong increase in EBITDA margins over the coming 3 months, But also in combination with increased organic growth, economy of scale and then also overall increasing EBITDA margins In our game segment, but especially also coming from the media segment, we are, as Remco mentioned, already expect 15% to 20% It's in the second half year. And therefore, we expect to go to the 25% to 30% EBITA margins we have set as a financial target during 2021. Coming now a bit more into the Q1, revenue and EBITDA development on Page 20. On the left side, we see the revenue where we have increased revenues in the Q1 from €27,000,000 last year to €52,000,000 this year, which is again 96% year over year revenue growth. But on a last 12 month basis, we increased revenues from 97,000,000 to €266,000,000 On the right side, you see the adjusted EBITDA. And here, we have actually increased EBITDA from €6,000,000 to now €14,000,000 In Q1 2021, while we increased on a quarter basis, the EBITA margin pretty strong, strongly from 22% to 26% And on a last 12 months basis, increased EBITDA from €29,000,000 to €37,000,000 So an overall very strong increase in revenues in combination with Strong increase of EBITA and also overall increased EBITA margins for the group. Coming now to Page 21, a bit more in detail also the segment performance. And as we started in the Q1 of 2020 also with the segment reporting for Games and Media segment, we are able now for the first time to show also year over year comparison. So on the left side, you see the Games segment year over year. So Q1 of 2020, we reached €40,000,000 revenues and in the Q1 of 2021, €27,000,000 revenues, which is a 97% Revenue increased for the Games segment, where we were growing the EBITA from €5,000,000 to €11,000,000 now, which is a strong increase also in EBITA margins from 36 to 40%, while on the right side, you see the Media segment where we also increased the revenue substantially from €13,000,000 to €25,000,000 Well, we increased the EBITA from €1,000,000 to €3,000,000 and also see a very strong EBITA margin increase from 7% to 11%. We are not at the 15% to 20%, as Remco mentioned at the beginning yet. But as mentioned as well already, we expect to be there within the second half of twenty twenty one, so 15% to 20% and already see here a very strong increase in overall EBITA margins in line with also very strong increase in revenues. Coming now to Page 22, the operating cash flow and CapEx development. And here we see that in line with also the previous years and quarters, we have increased on the left side our operating cash flow substantially to more than €30,000,000 now with a very strong underlying free cash flow of almost €25,000,000 which is Chief to a very limited maintenance CapEx, what we see on the right side, so 5,700,000. That has increased compared to the 4,600,000 in 2020 As we also now have the investments for the Wizard101 IP, but it's also limited and therefore, we have a very strong free cash flow. And the expansion CapEx, which includes investments in M and A but also into new game IPs where we will pay a few more votes later in our outlook. And here we also see a very strong increase in expansion CapEx due to the purchase price of King's Isle and Liquids and again also some organic growth investments. So we are well prepared for also further organic growth in combination with also strong increase in operating cash Flow and free cash flow during 2021. Coming now on Page 23 to the risk profile of MGI. And here we see That we have actually stayed between in our financial net leverage target rate between 23 despite the fact that we had a pretty Strong high cash out in the Q1 of 2021. So we increased our net debt from €62,000,000 to €98,000,000 And our net leverage ratio from 2.1 to 2.7, but it's super important to mention here that there's just 1 quarter of King's Isle included yet, And therefore, we will see a very strong deleverage over the coming quarters and they are will most likely be at our net lower net leverage Target range of 2% and 3% or even below the 2%, and therefore, yes, again, involve a risk diversified This profile of in China. Coming now to Page 24, our mid term financial targets. And as we mentioned in the last presentations, already we can tick the box for our 2021 year already and rather overachieve, And I think that's also what we can see now here in the Q1. So starting with the revenue pay of 25% to 30%, which we have set as a target, We overachieved that substantially with 96% total growth and 38% organic growth with an underlying 58% M and A growth. So 3 times higher than our financial targets, While we are in terms of the margins have been well within our target range of 25% to 30% with 26%, rather also increase that over time But our adjusted EBIT margin target of 50% to 20% here, we have achieved 18% in the Q1. So also, well, within This is target and on the net leverage side, 2% to 3% have been achieved 2.7%, which will further delevered over the coming quarters As King's Isle will contribute further strong to our group EBITA. And also, yes, the Media segment is also increasing in terms of EBITA margins currently, And therefore, we will now in overall, see deleverage over the coming quarters. Coming now to Page 25, and here, I would like to hand over to Remco For a brief outlook of our organic growth pipeline. Yes. Thanks, Mal. This is also the last page of our presentation. After that, there's time for questions and which we will happily answer. Now Page 25, yes, as mentioned before, we have a very strong organic growth and we will Want to continue this. We have the strongest organic growth pipeline in history. So going a little bit back in history, this company started really with a small acquisition of a distressed came a company called Camigo, which we then turned around and then started buying critical mass via M and A. And the last year, we have seen each year that we were able to grow our organic growth substantially year on year, which now in 2020 and it's also by the way, that we're complaining about where is your organic growth. We said, let's first build critical mass, but now we're really proud to show the organic growth. And yes, we have so much in how How to say it, we have so many iron in the fire at the moment, so much fireworks coming now. And it's gaming. I mean, it's difficult to say which games will really be successful and which will maybe not. But we do have a very strong preselection. We have a lot of good IPs. So with a lot of takes, we are more certain about success. New game launches are always a bit more risky, of course. We still don't do new game development. So developing a game from scratch is something that we don't touch. But what we do, of course, is in licensing games or in the case of Golf Champions, buying a game where, let's say, the last part of the development still has to be done, but where the game is already 90% ready. So those kind of things we do. And yes, I would like to run you through the highlights here. Heroes of Twilight, it's a new LP. It's going yes, it's we're expecting a lot of it. It's been made ready for launch. Testing is going on at the moment, and we expect it to be on the mobile front, Android and iOS in the summer this year. It's a mixed genre, so it's mixing different game genres. It's turn based tactical combat with combining with real time PVP battles to the person versus person. Yes, it's licensed from a top Canadian game studio, which is called BCOM, And we're looking forward to this launch. But that's coming up. Then Golf Champions, Swinkeblore just already mentioned. Yes, strong game. We expect a lot. Camigo has in its past also quite some experience already with Gold Games. It's a pretty nice niche segment with people, yes, spending quite good money and being very loyal. So also here, it's a competitive free to play game. People can compete in different leagues and they can, of course, improve their skills and which get a better golf swing, all those kind of things. So also here looking forward, this will be more a bit towards the end of the year as far as we expected at the moment. Then we have Descent Operations, one of our own strong IPs. Here we do what we do with more games, porting to other platforms. So that's operations extremely successful on PC. We worked on the mobile version. Yes, it's The early days we wanted to do a quick report. We have decided to really make it much more substantial to do it much more thorough. So this will take also a bit, but we also expect to launch this in 2021. So looking forward to that. The IP is strong and we have the user base, so that should also bring Quite some nice things on mobile. Then Skydome, that's a new name that was not or formally mentioned also in presentations. It's a PC game, 4 versus 4 Tower Defense Battle Arena and really very exciting game, which we licensed from Kinship Entertainment and will also be published for Europe and North America where we have the exclusive licenses. So also here preparations are ongoing, also expecting quite something nice from that. That's a bit about the gaming side, some highlights. There's much more on the gaming side, updates in existing games, so big DLCs, For example, porting other platforms or let's say other games to other platforms drove being transformed to Switch, which will also hopefully already be launched in end of Q2, but latest early Q3 as we see it now. So we expect a lot from that. So there's more and more much More coming on the gaming side. Yes, in licensing things we're preparing for the gaming side, but also out licensing deals. Too much to mention on the slide here. Then on the media side, also a lot of stuff happening, a lot going on. The first, a very obvious one, of course, adding more customers, adding more suppliers. Often suppliers and customers are the same in this field. Of course, a game company has, Let's say, placing ads or buying advertisements for user acquisition, but on the other hand, it also has a lot of ads in the games. So also here, we have a good task. There's Some game companies that only do the advertising via us or only sell their ads via us, and it's of course nice if we have them on both fields. So that's a very important thing also to make sure that somebody was maybe with liquid already buying CTV that we now is also starting to buy by our platforms. The other formats that we have like banners, like video ads, like etcetera, etcetera. So that's the very important thing for organic growth. Internationalization as before with Japan, also in South America, for example, we are expanding our reach, adding new countries. So that's important. And then also, of course, the technical side, the product side, Enterprise Solutions, as shown here on the slides, we have a full stack SaaS platform, which means that we cover the full advertising channel from DSP via DMP to SSP to SDKs, which means that advertisers have full transparency and also publishers in this whole chain, which is a very big asset in the market where a lot of identifiers are period. So that's what we are, let's say, leveraging at the moment and we're also using the data that we have from the gaming side to make the advertisements better and to target better. Yes, so focus on customer acquisition for the Stack Stack and further growing. Then IDFA, yes, Apple has now finally announced that IDFA will be out or let's say, will be fully implemented by end of this month, which means that a lot of companies that are advertising will be a little bit more blind than before or will be quite a lot more blind than before. And there are solutions for that. Our technology part of the media side has been working very hard on that. And there will be more formal announcements around it in the coming weeks. But we have pretty nice solutions, yes, to mitigate that and to even be able to target very nicely. So that's top of the highlights. There is much more in the pipeline, as mentioned already before, but we need to have something in our next presentation, of course, also to announce. So not giving all the facts here. But as always, a warning, new game launches are risky. I mean, there's over 2,000 game launches per month. We do our selection very carefully and we think that we have games that really have a lot of potential, but you never know what game launches. With own IPs, of course, the risk is much less. There we know already that the games are successful, that we have a user base which you can grow. And yes, building on our existing user base, we have, let's say, tons of registered gamers and tons of advertisers. Is, of course, also less risky than doing anything that's new, new. That brings me to the end of the presentation. Yes, Time for questions. So I hope you all like our numbers and would hand over to the moderator to organize questions. Thank you very much. Thank Our first question comes from the line of Erik Haklian of First Berlin. Please go ahead. Your line is open. Yes. Good morning, gentlemen. Thank you for the detailed information. That means I've just got one question at the moment. If you could maybe quantify the organic growth by segment for me, that would be much appreciated. Should I run go or Yes, please Paul, go ahead. Yes. So we saw here on a combined basis as there's a lot of Synergies between the segments where we could realize the organic growth, but you can almost cut it by half kind of for each segment. But therefore, we started now showing on a combined basis as it really depends also how much For you, the acquisition, you invest on the game segment, which means then further organic growth on that side, but it then also leverages Further organic growth on the media side and therefore, yes, we showed on a combined basis, which is, from our point, the most true and fair view, Therefore, but yes, to give a rough number, it's half by half, frankly. Okay. Thank you. Welcome. Thank you. And our next question comes from the line of Danish Sir of Freda. Please go ahead. Your line is open. Good morning, gentlemen. Congrats on a great quarter. Thank you. So Kingsisle, 17% of total revenues, really strong. Just to clarify, Did Kingdaion contribute to 2 months to the quarter? Or was it consolidated from January 1? It was consolidated from the January 1. So we made a very deep dive with the auditors and but the SBA was Structured in a way where we have set a target date for closing on the 1st January already and also the profit From the 1st January, it's 100% ours. Therefore, we could also go for the first time consolidation to the 1st January. So that's the reason Why also, yes, the 1st January we're choosing here despite the fact that the SBA was signed afterwards. Okay. Thanks for that. And you mentioned re increased marketing budgets Thank you, Media segment in a positive way due to the reopening of the economies. How does this affect the user acquisition cost And the gaming market, have you seen an increased budget for that? Ben, could you say or do you want? Yes. If you want, you can. Otherwise, I And go forward and then I maybe add one of the sentences. Okay. Now let's say what we saw last year in the media side is especially in Q2, there's a lot of parties either totally stopped advertising or were hesitant about advertising. Then after that, we saw the, let's say, the more digital companies like gaming companies, media companies already starting to further increase their budget, while we have now seen also from earlier this year that also, let's say, There's non digital companies, which also part of them are our customers, which are more traditional companies like the McDonald's and those kind of guys that they are also starting to further increase their budgets again. So that's basically what's happening in the overall media market. The What we also saw, of course, that if there's less demand, prices go down and prices go up, of course, if there's more demand. So we expect indeed, Let's say, also gaming companies will be implemented bit by upcoming by higher CPMs, higher CPCs, so called cost per click and that will affect the market a bit. But in the let's say also looking at the market that might mean that further budget increases will come up. So altogether, we expect further growth of the market. And of course, not to forget that there are still a lot of media coming from traditional media parts like traditional TV advertising and newspaper advertising where the numbers are further downtown, which is all going to digital. And I think also there, of course, the whole COVID helped a lot that people companies are realizing that they have to go digital or that they have to strengthen their digital. So that's, of course, helping the whole media part. And in terms of your user acquisition cost For the game segment, do you still push on the gas pedal when prices increase or do you dial that back a bit? In general, let's say, we look at efficient user acquisition. And let's say, that was the reason that we or let's say, that's first of all the reason that we are focusing on MMOs, where if you have a user, he is with you for many years. Secondly, that's the reason that we started to invest in the media side because said we need to become more efficient and more effective on the media side with user acquisition and we are not if we work with external parties that are sub optimizing the whole chain. So those two things are really working in our advantage. And with, let's say, closing cooperation between the media part and the gaming part where we still have a lot of potential, We are able to get more users for every dollar we spend basically. So it's becoming more efficient. But on the other hand, of course, working It against it would be higher prices. But so far, we are still, let's say, increasing our budgets because we see that by the efficiency gains that we have because of Yes, the tools that we have in hand now that we are still able to further increase our user acquisition. Okay, great. And then lastly, M and A firepower. So you're at the higher end of your net leverage ratio and you're in deep talks Several companies on the M and A front. How should we think about Basically the size of potential acquisitions when you're at the higher end of the net leverage ratio and We're a little bit tapping the equity markets basically. Maybe let me start, Remco, and you can. So on the net leverage, so that's based on reported numbers, right, the 2.7. But if we take into account the additional 9 months of KingsIs on a pro form a basis, we are at The lower end of the net leverage target is even below 2%. So therefore, actually, in terms of really taking into account also the full EBITA, which we acquired in the last 12 months. We are much lower on the net leverage. So therefore, we're feeling pretty comfortable on that end. And in terms of M and A, we have done the tap issue, so we have more than 50,000,000 Cash in bank. And as we are also pretty smart in the way to structure the deals when it comes to deferred purchase prices and also earn out Payments and these kind of things, we have quite some room to do further M and A and can also do contribution kinds and these kind of things. Not to say that we plan to do it on a short notice, but we have sufficient firepower also to take advantage of some additions on our M and A pipeline. And maybe to add, let's say, we don't need to do M and A. We have this growth target of 20% to 30% year on year, which I think with Q1, we almost have met already. So on the other hand, it's pretty relaxed. But if there are good opportunities out there and there are good opportunities, We would also be stupid to not do M and A. But yes, at top of that, I think mid sized smaller M and As we can finance easily from our existing cash now, also strong cash flow, of course. If you would do really a larger deal, it might be that we have to tap capital markets. But I don't yes, I don't expect it till it happens. And so in that sense, we are well positioned at the moment for further M and A. Okay. Thank you. Thank you. Once again, if there are any further questions, Okay. There seems to be no further Just one minute. There's one question coming in just as I start to say that. We just need to register that. So just one moment. Apologies for the delay there. We are unable To establish the name of the person in that Q and A queue, so we can't put them forward for a question. So as there are no further At this time, I'll hand back to our speakers for the closing comments. Great. I would like to thank everybody for participating in call. And as always, if there's more questions, we're also happy to do one to one sessions and to answer questions, of course. Yes, thanking everybody and Looking forward to Q2. Thank you very much. Thank you. Bye bye. Bye.