Dear shareholders, it is a great pleasure to welcome you all to this year's annual general meeting in Asmodee Group. It is certainly a busy AGM day here in Karlstad, with Coffee Stain, Embracer, and Asmodee all holding their meetings here today. I do know that many of you here in the room also attended the Embracer AGM. So this is my second opportunity to welcome you to Karlstad. By now, you should all feel very much all home here in Karlstad. Whether you are in the room or joining us online, a warm welcome. With that, I hereby declare the meeting open. Now I thought I would start with a picture. This picture was taken very late night in Paris in December 2021, five years ago now. I had just spent a very long weekend negotiating the acquisition of Asmodee.
The next day, we signed the deal. My interest in Asmodee had actually started several years earlier. I remember when the previous owner, PAI, acquired the company. That was back in 2018. I remember thinking, hmm, I would really have liked to buy that company. There was just one problem. I could not afford it. A few years later, things were different. What attracted me to Asmodee was not only my own passion for board games, it was a business I could understand. It was close to the world of video games that I know very well. What really caught my attention was Asmodee's distribution. I thought about it a bit like Steam in PC gaming. If you understand how important Steam is for PC games, you do understand why I found Asmodee's position so interesting. It was not only distribution.
Asmodee had gamers and IPs, studios, publishing, and distribution, and I could see how those pieces worked together. That was a company I wanted to bring to the family. As you can see, quite a lot happened in those seven years. There is also something rather fantastic about making money or a business from games that bring people together around a physical table. People play, compete, laugh, and sometimes argue a bit. Even though we spend more and more time in front of our screens, people still want to sit down together and play. The relationship doesn't end at the table. Distribution is the foundation. It gets our games to players around the world. Then, of course, we have the games and IPs. Without great games, none of the rest matters. Around those games, there are communities.
Then we also have our Board Game Arena, with millions of people playing board games online. With new technology, including AI, we can develop it much further, finding completely new ways to reach, understand, and engage those communities. Then there is transmedia. As many of you know, this is something I have believed in for a long time. Our games and IPs can move beyond tabletop into film, TV, and other forms of entertainment. That introduces them to new audiences, and some of those people will find their way to the games. You can see how all this comes together if you look at trading card games, for example. The TCG market is booming. We all know that, but what I find most interesting is what sits behind these games, namely very dedicated communities.
Pokémon has its own community, Magic: The Gathering has another, and our own Star Wars: Unlimited has another. New games can bring entirely new players into the category. For Asmodee, we can distribute some of the world's biggest trading card games, while at the same time continuing to grow our own portfolio of TCGs. This is just one example. Then think about M&A. When we acquire a great game, an IP, or a company, we are not only adding what we buy. We can bring it to more markets, reach more players, connect it with new communities, and sometimes find completely new ways to develop the IP. At the same time, every acquisition brings something new into Asmodee. Another game, another IP, another capability, another community. So we can make more of what we acquire, and every acquisition gives us more to build on.
When I walked home in Paris that night in 2021, I thought I knew what I wanted, why I wanted Asmodee, and I did. But five years later, I see so much more we can do. More we can do with our games and IPs, more ways we can reach players and communities, more opportunities to grow organically and through acquisitions. I like very much what I see ahead, and I want to keep owning it. With that, let's move on to the formal business of today's meeting. The second item on the agenda is the election of the chair of the meeting. The nomination committee has proposed Ian Gulam. Can the meeting approve the proposal?
Yes.
Thank you. With that, Ian, I hand over to you to take us through the rest of the meeting.
Thank you, Lars. Thank you all for the confidence. Let's move on. A few formalities to start with. Please put your phone from silent mode if you haven't done that for the webcast. We will do the meeting in English today, but I would like to ask the meeting to approve that we do that before continuing in English.
Yes.
Thank you very much. We will also hold a Q&A session during the part when we present the business. Then we will open up the floor for questions, both here in the room and through the webcast. There will be, through the webcast and also here in the room, a few participants that are here as guests and not registered shareholders. I therefore would like to ask the meeting if we can accept them to be part of the meeting.
Yes.
Perfect. Thank you very much. My colleague here to my right will keep the minutes here today. I also would like to take the opportunity to let everyone know that today we have the full board here except Marc. That means that Stéphane, Linda, Lars, Jacob, Eugene, and Kicki is here. Thomas, CEO, is here as well. Andrea as well, CFO. We also have the chair of the nomination committee in the room today, Per. To sum up, we also have the main responsible auditor, Magnus, in the room as well. That was that. Move on to item number three, preparation and approval of the voting list. We have, when everyone walked into the room, ticked off you against the list that we prepared in advance, which also includes all the advance votes for the meeting that has been submitted by shareholders.
The voting list is here with me. Any questions on that, please let me know after the meeting if you want to see it or anything else. Based on what we have prepared and after the adjustments following the entrance, today we have nine million A shares. Surprise. We have 158,755,873 B shares. That gives us a total of 167,755,873 shares here today, corresponding to 248,755,873 votes. That translates into 70.86% of the total shares in the company and 78.29% of the votes in the company. With all this said, can the meeting approve the voting list?
Yes.
Thank you for that. Now we have come to item number four, which is election of one or two persons to certify the minutes. We have a proposal that one person is to certify the minutes. We also have a proposal for the person to do it, which is Henrik Sandell from Alecta. Perfect. Then I would like to ask you if you will be available after the meeting to adjust or certify? Yes. Perfect. Thank you very much. Can we then appoint Henrik to be the certifier today? Yes. Excellent. Thank you. Item number five, which is the question if the meeting has been duly convened. I leave over to you, Mattia. Please go.
Thank you. Okay, in accordance with the company's articles of association, notice to the AGM shall be given by publishing the notice on the company's website and in the Swedish Official Gazette, no earlier than six weeks and no later than four weeks before the meeting is to be held. At the time of the notice, information of the notice must also be announced in Svenska Dagbladet. The notice to today's general meeting has been published on the company's website on August 24, 2026 and in the Swedish Official Gazette on August 27, 2026. The information of the notice has also been announced in Svenska Dagbladet on August 27, 2026. We can state that the notice has been made in accordance with legislation and the company's articles of association.
Thank you, Mattia. Does the meeting consider itself duly convened? Yes. Excellent. Thank you. Item number six, approval of the agenda. It has been included in the notice for the meeting. I will simply ask you all here in the room if you want to approve the agenda. Yes. Perfect. Thank you very much. I would like to welcome Thomas and Andrea to the stage.
Thank you, Ian. Thank you all for being here and good afternoon. I would like to begin by looking back at the key highlights of our fiscal year 2025, 2026 by showing you a video.
Yeah, it gets real competitive. I'm a huge Catan though.
Yeah, I'm the best player.
Yeah.
What a year. Overall, fiscal year 2025, 2026 was a new record year for Asmodee, and none of this could have ever happened without our teams. I would first like to thank everybody at Asmodee for your dedication, for your commitment from the studios to the distribution units, from the local teams to the corporate functions, and especially for the people in the warehouse, for the clerks at the welcome desks and for the janitors. Without you, none of this would happen. We delivered double-digit growth, both in sales and adjusted EBITDA, expanding our margin and generated healthy cash flow. Starting with sales, net sales reached EUR 1.7 billion, around EUR 300 million more than the previous year, representing an organic growth of 25.9%. In total, our teams have sold and shipped 157 million units last year.
This strong performance was driven primarily by Europe and the continued momentum in trading card games. This strong sales performance translated into adjusted EBITDA of EUR 285 million and an adjusted EBITDA margin of 17%. We also generated EUR 199 million in free cash flow, supporting a further reduction in leverage to 1.5 times net debt to adjusted EBITDA after M&A commitments, and two times on a pro forma basis, including the acquisition of ATM Gaming. Andrea Gasparini, CFO of Asmodee, will detail those later in the presentation. I wanted to illustrate the diversification of our business across categories, publishing models, and geographies. This diversification enables us to capture growth wherever opportunities arise. In 25/26, trading card games accounted for 60% of sales, and board games for around 30% of our sales.
Games published by partners represented almost three-quarters of sales, while games published from our own studios accounted for around one quarter. However, as our own published games generate approximately twice the gross margin, the contribution is much more balanced from a profitability perspective. We also have a broad geographic presence across the world's key tabletop markets, including important emerging markets. I would like now to share four key business highlights of the year that I believe are demonstrating the strength of our position now and for tomorrow. If I had to choose one highlight from the first quarter, it would be the public launch of our new brand identity, revealed to celebrate Asmodee turning 30. It connected all of us at Asmodee, but also with our partners and with the players.
This new branding is a springboard guiding players towards high-quality games and also allowing Asmodee to stand up for an entire industry. As we look ahead, I think first and foremost of our teams, rallying under the same banner and purpose to be inspired by players. In Q2, what struck me the most was the scale of our TCG growth. Trading card games had a remarkable year overall, and we were fortunate to sit at the heart of the ecosystem, both with the game we own and the games we distribute. The scale is striking. TCG sales globally have multiplied by more than three times over the last eight years from a market perspective. We are fortunate to have strongly contributed thanks to our operations and the partnerships we have built over decades with names like Pokémon, One Piece, Riftbound, Magic: The Gathering, or Star Wars: Unlimited.
Our TCG Village, on the road since Cannes in 2025, and which acts as a hub for players to connect with our communities, is one of the several ways of showing players and partners that Asmodee is the best home for the TCG experience. This past year, and during Q3 especially, our games began moving beyond the table, starting their journey to become franchises. Werewolves of Miller's Hollow led the way with the show now in Germany, a second season in France that drew more than 10 million viewers, and Banijay taking the format internationally to more than 10 countries, and a second Netflix film that wrapped up. It does not stop there. As we announced with Netflix that Catan and Ticket to Ride are coming to the platform. The ambition is simple.
Take our biggest universes and let them live far beyond the gaming table, turning Asmodee into a house of IPs. Because every fan we win through these worlds is, in the end, a player that will join the table. We concluded this year with not only a record fourth quarter, but also serious evidence that Asmodee reignited its second growth engine through acquisitions in a deliberate and disciplined way. The biggest move, but not the only one, as I mentioned before, was ATM Gaming, announced in Q4. It marked an important step in social games that bring strong titles, entrepreneurial teams, and a strong go-to-market strategy in one of the most dynamic categories in our industry. Alongside Exploding Kittens, Zygomatic, and Bezzerwizzer, and our other social game studios, it gives us genuine strength in this highly dynamic category. The market is still very fragmented, which means opportunities.
In parallel of pursuing our M&A agenda, we will also take good care of the teams, the brands, and the IPs that have joined us in this past year. Another key topic of focus for us this year has been sustainability. We invested in it to support our long-term success. It is how we manage financial and regulatory risk before they arise, and how we open new market opportunities as they emerge in a sustainable way. The case is not only financial. A company of our scale, reaching players in over 100 countries, has both the responsibility and the ability to contribute, and players increasingly expect it of us. This is why sustainability isn't a program that sits alongside our strategy.
It is built into it. From how we design and source our games to how we produce and distribute them, responsible choices are how we create value, not a cost of doing business. During fiscal year 2025/2026, we retooled our sustainability strategy around a new framework built around three pillars: planet, players, and stewardship. Within that, we set five sustainability goals for the company, not as a compliance exercise, but as the output of genuine engagement across the organization, and frankly, no shortage of internal debate about what would actually move the needle. The board reviewed and endorsed them, and they now give us something concrete to steer by and be held to address our environmental footprint, how we design and produce our games, and how we run our operations day by day.
Two are about people, making play more accessible to more players, and making Asmodee a place our own people will want to build a career in. The fifth is about governing the business responsibly, which is what ties the other four together. What did this look like in practice this year? We didn't just set the strategy, we started acting on it. We completed our first double materiality assessment and published our first CSRD compliance sustainability report. The assessment showed us where our impacts and risks actually sit, not where we assumed they were. We published a climate transition plan, setting out a concrete path to significantly reduce our Scope one and Scope two emissions by 2035. We also began work on Scope three and game accessibility targets, both due before the end of this year.
On the player side, we refocused our Access+ program by building accessibility features directly into core game titles. We also continued and expanded the focus of our Game in Lab research program, which is building the evidence base for what tabletop games actually do for learning and social connections. This is the work that matters not just to us, but to our industry as a whole, and well beyond any sustainability reporting cycle. I will now hand over to Andrea, who will give a financial update. Andrea, the floor is yours.
Thank you, Thomas. Good afternoon, everyone. It is a real pleasure to be with you all today here in Karlstad and for those joining us via webstream. This latest fiscal year was a major one. We saw major progress in our financial performance. Even though I'm sure you all know this number by heart, let's give them a final rewarding moment and deep dive into the last fiscal year, 2025/2026. Let's start with the net sales that last year reached EUR 1,684,000,000 compared to EUR 1,369,000,000 the previous year, representing an increase of 23% or 26% on an organic basis.
The growth was primarily driven by games published by partners that increased by 40%, thanks mainly to the success of the TCGs, thanks to, among others, Pokémon, Magic: The Gathering, One Piece, and Riftbound. Looking at games published by Asmodee Studios, this category decreased by -5.8%, driven by negative foreign exchange effect and the lower sales of Star Wars: Unlimited compared to a stronger performance during the year of its launch, which was the fiscal year 2024/2025. This growth momentum continued in Q1 2026, where we also saw board games and our own games back to growth. The strong top line enabled also our adjusted EBITDA to grow by 25%, reaching EUR 285,000,000. Margin increased by 30 basis points to 17%, driven by lower relative personnel cost and other operating expenses. This is a solid achievement considering the unfavorable sales mix that we observed during the entire last year.
To be noted that on a 12-months rolling basis as of end of June, the adjusted EBITDA in percentage of sales reached 17.4%, reflecting our continued progress towards our medium-term targets of above 18%. Free cash flow after tax and capitalized lease payment amounted to EUR 199,000,000, resulting in a free cash flow conversion as a percentage of adjusted EBITDA of 70%, compared to 60% on average over the previous four years. The free cash flow was positively impacted by the development of the adjusted EBITDA described earlier, and it was partly offset by higher income tax paid. Movement in working capital were neutral on a yearly basis, which is a fantastic achievement considering the very strong growth of the top line and of the business.
Thanks to the positive development of both the adjusted EBITDA and the cash position, the leverage before and after M&A commitment were below our medium-term target of two times as per end of fiscal year 2025/2026. Adjusting even for the ATM Gaming acquisition, the net debt to EBITDA stood at two times at the end of the fiscal year. As of end of Q1, the ratio had declined again below two times. In light of this strong financial position and the free cash flow generation, the board proposes a dividend of EUR 0.17 per share for fiscal year 2025/2026 to be paid in four installments. In conclusion, this year was a year in which we made a strong delivery against our medium-term targets. Just to summarize, strong organic growth in excess of 25%, significantly above the medium-term target.
Strong sales also translated into an EBITDA expansion in absolute value and as a percentage of sales, despite a less favorable sales mix. Again, as I said before, in good progress towards the medium-term goal of above 18%. The net debt was reduced to 1.5, and capital expenditures for last year amounted to EUR 23 million, representing 1.54% of net sales. This ratio remained below the target, primarily due to very strong sales growth and higher contribution of games published by partners, which incur less development cost eligible for capitalization. Finally, as I said before, the board proposes a dividend of EUR 0.17 per share. To conclude, all this financial performance is sustained by the strength of the underlying tabletop market and our ability to serve them through operational excellence and operational excellence.
At the heart of this trend is the everlasting social connection of the games that are brought forward thanks to Asmodee. These trends have been identified and revealed earlier this year by Kantar in their first board game barometer. We would like to invite Christina Bornas on stage to talk more about these trends.
Yeah. Thank you so much. Yeah, thank you, Andrea. My name is Christina Bornas, and I come from Kantar. It is a marketing research company, and we had the honor of doing a very interesting study for Asmodee. It was a study that was carried out in five different countries: in France, Germany, the U.K., the U.S., and not the least, Sweden. We interviewed 5,000 people, 1,000 in each country, and they were 18 years or older. We asked 15 different questions. What is even more interesting is that this will be an annual tracking, so we will be able to follow the results from one year to another. Oh, sorry. Okay, it is a little bit slow. Okay, so I will start this presentation by showing you three different interesting but also quite sad figures.
This is to set the scene a little bit about board games and the importance of board games. What we can see is we have never been more connected, and yet roughly one in four adults worldwide report feeling fairly or very lonely. Two-thirds of adults say they would like to spend less time on their devices, and more than eight in 10 say phone usage in social settings damages the quality of conversations and interactions. If we look at these three numbers, you get a very clear cultural signal. People are not negative to technology, but they are actively looking for counterweights. We are always on, but less together, and that is the setting every leisure category now operates in. We have to bear that in mind. The question we set out to answer is quite simple, actually.
In this context, what role do board games actually play in society today? The more we work the data and the more we dig into the figures, the clearer it became that we are not looking at just another leisure occasion. Board games show up at the intersection of several needs at once. It is family time, friendship rituals, a break from screens, and not the least, shared emotions. What people describe is closer to a meaningful experience than to entertainment consumption. That is much more deep emotionally, of course. It offers a way to connect, to feel something, to belong, and crucially, to take something away from the time spent together. This is a very unique value proposition. From the data, five distinct meanings emerge. The word meaning here matters in two different senses.
What playing says about us, and also where playing takes us. First, board games work as an antidote to digital overload, as a breathing space. Second, as a ritual of presence, not simply sharing a room. When you are sharing a room, you are sitting together, but you always have one screen each, so you will not actually spend time together. With board games, you can put the phone down and then generally spend time together. Third, as a social reconnector, restoring complicity and common grounds between people. Fourth, as a form of cultural expression, a way of signaling identity and finding your community, and you were talking about that, Lars, before. Fifth, as a more mainstream form of shared entertainment, increasingly important. These five meanings are the basis of everything that will follow in my presentation.
If we start with the first meaning, board games as an antidote to digital overload. Our days are now punctuated by notifications everywhere, the phone, the clock, micro interruptions, and continuous partial attention. Board games, on the other hand, does something unusual. It demands that everyone puts their phone down with the screen down. It is not framed by consumer as a rejection of digital life. It is framed as a counterweight to it, a deliberate change of rhythm. That is a very interesting position because it does not rely on people being negative to technology. It relies on people wanting balance, which is exactly what the numbers show. I will show on this slide, we have two figures that could seem as contradictory.
The first one shows that the average global internet user now spends six hours and 38 minutes every day online, and that is close to half of the time you are awake. The other figure shows that more than half of the population plays board games at least once a month. Those two facts coexist, and that is what is so interesting. The table has not been replaced by the screen. It now functions as its counterweight. In a market where attention is a scarce resource, an activity offering undivided attention for an hour or two is a strategic asset, and that is exactly what you offer. To understand the underlying demand, we asked a deliberately broad question. In your everyday life, what would you like more of? The order of importance is very consistent across the five markets.
At the top, spending more quality time with the people who matter the most is at around 80%. Then, feeling more financially at ease, feeling more relaxed, and less mentally overloaded at roughly three-quarters. Being fully present with others follow closely. If you notice the pattern, this is not a demand for more stimulation. It is a demand for rebalancing. Quality of interaction over quantity of connections. If board games speak to almost everyone, it is because it answers three quite different needs simultaneously, and each person picks the one they need the most in total or at a specific occasion. So it helps people switch off from the noise, offering a healthy alternative to screens and a moment to slow down. It helps them find their way back to each other, bridging generations and reviving shared memories.
It makes time together easier, because if you have a shared focus, it takes the social pressure off and opens the door to more natural conversations. One activity, three jobs are done, and that is quite impressive, isn't it? That brings us to our second meaning, board games as a ritual of presence. The distinction I would like you to hold onto is between proximity and presence. Plenty of activities put people in the same room, but they are often looking at one screen each and not the same. Very few activities force them to be genuinely available to another with attention that does not get distracted. The board game does that structurally because the game only works if everyone stays in it, of course. The word ritual is chosen carefully. What we observe is not spontaneous. It is recurring, anticipated, and often codified within families and friendship groups.
I am sure you recognize that when you play a familiar game, every setting has their own set of rules that are slightly different from one family to another, from one group of friends to another. Rituals are habits with meanings attached, and habits are what builds categories. The context here is generational. 74% of Gen Z say in-person experiences matter more to them than digital ones, and that is something I do not think we would predict, any of us here. What we add to the picture is even more surprising. More than half of the people would rather spend a Saturday night playing a board game at home than going out, and the figure is even higher among Gen Z. The strategic implication is significant. Game night has moved from a plan B when nothing better comes up, to a plan A, a chosen activity.
That reframes the competitive set. Board games now compete with restaurants, bars, et cetera, and not just old jigsaw puzzles. Our third meaning takes us from presence to connection, board games as a way of connecting to others. The nuance here matters. We are not only talking about maintaining existing bonds, we are talking about reestablishing them, and in many cases, even creating new ones. We live in a period where loneliness has become a genuine public health threat across all of our markets. Therefore, an activity that lowers the barrier to entry for social contact has value well beyond the entertainment sector. What the data shows is that this works at two levels at once. It strengthens the inner circle of friends and people you already know, but it also opens the door to people outside coming in. The framing evidence is clear.
64% of people use tabletop games specifically to bring their families together, and that we already knew before the study. What this barometer adds to the insight is that board games also help when meeting new people, and this is said by 73 people we were talking to. Board games are not only a tool for strengthening the circle you already have, as I said before, it is a way of making it wider. That is precisely why the category deserves a seat in the conversation about loneliness, and why retail, club, and event formats matter so much. The product creates the moment, but the social infrastructure around it is what converts that moment into a relationship. The fourth meaning moves from connection to identity, and I know that you were talking about that as well before, Lars. So far, we talked about presence, reconnections, and sociability.
But games also allow people to express who they are and to find a community that also shares the common interests. And that is where playing also becomes a marker, something you display, discuss, and organize part of your life around. It is particularly visible if you look at the activity of trading card games, where the practice is genuinely multilayered. You collect, you trade, you play, and you follow releases, and also you meet people who share the same passion. That combination is what turns a product into a culture and a customer into a member. The wider evidence on fandom is very clear. 64% of fans say their fandom is a defining part of their identity.
What our barometer shows is that board games has a place in the center of that identity and experience economy. This is a significant shift in how we should think about the category.
When a consumer say that a hobby defines who they are, you are no longer competing on price, features, and convenience. You are actually competing on belonging and culture. And that changes the question a brand needs to answer. Not just what do we sell, but instead, what community can we create, and how do we serve it? If we go back and look more specifically at trading card games, we see that identity dimension perfectly. When asked what they enjoy most, players cite playing the game first at 40%- 52%, depending on the market, followed by collecting cards at roughly one-third. But we can see interesting variation depending on the countries. Discovering new cards and expansions, and index is highest in France, opening packs in Germany, and being part of a community in the U.K., the U.S., and Sweden at around 30%.
So the same product supports four distinct value proposition: playing, collecting, belonging, and trading. And how many different categories could actually say that? So this brings us to our fifth and final meaning. Board games as a more mainstream kind of shared entertainment. Everything we have covered so far, presence, connection, identity, could in principle apply to a passionate minority, only a few, but that is not true. The defining feature of this category today is its breadth. It is played by most people across ages, genders, and social profile, and it is increasingly seen as a totally legitimate, socially valued way to spend an evening. That is a meaningful shift in status. What was once framed as a family fallback or a hobbyist pursuit now belongs to the normal leisure repertoire, and of course, expectations rise with it.
As you see on this slide, 94% of people agree that play matters regardless of age. And being a marketing researcher, I can say that that figure is very, very high and quite unusual. It removes the old age barrier that used to define the category. Most players say that board games convert spectators into active participants. In other words, the category has demonstrated conversion mechanism built into the product itself. Games will keep opening up to people who do not play yet because the experience recruits them at the table rather than through advertising alone. So it is very much, not word of mouth, but you are recruited by your friends. So finally, if we look at the five meanings again, which we started with. I show them again because I want you to have them in your mind after this presentation. Okay.
Board games are an antidote to digital overload against three hours and 38 minutes online every day. They are a ritual of presence with 74% of Gen Z prioritizing in-person experiences and game nights now has become a genuine plan A. They are a social reconnector used by 64% to bring families together and by 73% of gamers to meet new people. They are a form of cultural expression in a world where 64% of fans say fandom defines them. And they are mainstream entertainment, with 94% agreeing that play matters at every age. That was the end of this presentation. Thank you for having me.
Thank you. Now time for the Q&A session.
Awesome. Watch out for the ladder.
Great. Now we will kick off the Q&A. For those that did not listen in to Embracer's AGM here priorly, my name is Jacob Edler. I am an equity analyst at Danske Bank in Stockholm. I will start with a few questions on my own, and then I will ask the physical audience for any questions, and then moving on to the webcast as well. Thank you guys for having me. I will actually start with one question to Lars. You talked a bit about that night, 13th of December 2021, and looking back now, four and a half years or almost five years into the future, what has been the most positive surprise from your angle with Asmodee? You identified early on the powerhouse within distribution that Asmodee is, but just have it to your thoughts.
Well, surprise, I think just the continued growth in the market and the explosion, obviously, of TCG. I do not think anyone expected that numbers. I think the rest has really delivered positively. The people, the market, the stability, resilience of the business, and cash flows. Even though it was a game changer back then for us doing the acquisition, I think as a shareholder, I am very happy today that I am shareholder of Asmodee.
Very clear. Just coming to you guys and speaking a bit about the board games market, it has been very dynamic since the pandemic. Your board game sales, you have been taking market share. I would just like to dig in a bit, how much of the growth that you have seen in board games has been the general market versus market share gains that you have taken? If you can just give some color on that.
Well, it is true that the market has grown very fast.
Yeah.
Every year when you look at Asmodee's performance in comparison to the market, we have consistently overperformed the market.
Yeah.
I would say that we win market share, and we do win market share everywhere. Of course, during the first years of the pandemic, because of the strength of the games that we publish, Catan, Ticket to Ride, they all breached into so many new households that we won a lot of the market there. Then we are at the center of the TCG ecosystem, and the very strong dynamics of the TCG ecosystem comes, of course, from the quality of the products and the brands that we work with, but I have to say also by the remarkable capabilities of our own teams to bring products to the market.
Yeah. And, obviously, as we heard from the Kantar study here, the kind of offline trend and people not only being on their digital devices has also been a tailwind. And of these new consumers that have kind of come into the market, how are the kind of consumer trends differing there compared to kind of long-term enthusiasts who may have been playing board games for a longer time?
Well, what's interesting is that it's an addition, it's on top.
The average age of a board game buyer is 38, closing on 39. It's not because the players are becoming older, it's because the players of yesterday are still players, and we have new players coming in. If we look also, we were talking about the Gen Z using games as an icebreaker in a social moment to fight social anxiety and start to get the moment rolling. It's also one of the reasons why the social games category is so strong or has been so strong in the past years and one of the most dynamic, it's because these types of games are an easy way to start the moment. Then, as Kantar highlighted, we live in a world that's very fragmented, and people look for a sense of belonging.
It can be within the family, but it can also be within communities, and this is the real drivers that are behind the strength of our industry. Lastly, Asmodee, with everything we do every single day, and I think the new branding expresses this, inspired by players, it is not just a tagline, it is not just to look nice, it is because it is what inspires us every single day, everywhere in the company, from the decision levels to the people that work in the warehouse and do also play board games.
Clear. In your presentation, you also talked about taking Catan and Ticket to Ride to the screen, and that partnership that was announced last year. What type of opportunities do you see in that creating revenue uplift for the physical product once that releases on screen?
So, a few examples. Proof just by the example, when the first season of The Werewolves TV show came out in France, in the following week, sales lifted by 150%. So it does mean that it brings tremendous visibility. So yes, of course, we will be very happy with the royalties that come from those kind of deals because they are straight into margin, so of course, it is very important. But at the same time, there is a second effect that is probably even stronger, which is the increase in sales of physical products that we see because people enter into a relationship with the brand and then realize it is a game.
The greatest example I received is meeting people outside of the Had seen the movie that came out on Netflix for Werewolves too, and said, "I did not know about the game, and now I want to try the game." Well, that is the greatest example of the benefit.
Do we have any questions in the audience at this point? Yeah, there is a question up there.
Thank you. Carl Bokvist at ABG Sundal Collier. When you were first listed, you showed some long-term data that you have been able to grow above market for many, many years. Your target right now is to grow high single digits medium term. It is a two-parter, really. How do you define the medium term? Did you set a starting point, or do you look at it from a kind of rolling perspective?
There are a few elements to this. The first one is that we are cautious people. We set our expectations for them to be realistic and to enable us to overperform them, because we like to overdeliver. The second one is, of course, nobody would have foreseen the arrival of the pandemic and the acceleration of the market related to this or the acceleration of trading counts. We base our investment profile based on reasonable assumptions, and then we overdeliver. If we look forward, the long-term fundamentals, if you look back 20 years, on board games has been a 4%-5% market growth every year. Is it linear? No. Some categories one year are stronger with stronger tailwinds, and another year it is the others. What we look at is the overall category.
The unique position of Asmodee is that because we are a publisher and a distributor, because we are in board games and in TCG, we are able to capture the opportunities when they arise.
Thank you. A follow-up, more on the profitability side. You are also trending very nicely here towards the 18% target. What things do you want to keep track of on the risk side that would
prevent you or cause you to have a bit of a longer time before you reach that target?
I think we are in a strong dynamic on the target. What I think is very positive also is that we have seen in the past year, even with unfavorable sales mix, we were able to improve the profitability profile. Do we have confidence in our ability to meet our target in the upcoming future? I would say yes, rather sooner than later.
Good. I will continue with a sneak in two questions on TCG. Last week, we had the 30-year anniversary for "Pokémon," which has been a huge event. It has been described as, I think, even one of the biggest toy launches, according to one news source at least. Compared to historical anniversaries, and I know you might not give me the answer here, but can you frame it in any way compared to historical anniversaries?
The Pokémon company has this unique ability of addressing communities in a fantastic way. The 30th anniversary is not just trading cards, of course, it is also video games. It is also many types of activations, and as Lars highlighted, it is all about community. If we look, 30th anniversary is probably set to be as successful as the other anniversaries that we have seen. The one thing I want to highlight is on two areas. The first one, of course, people focus on the lines outside the shop, and the consumer being highly engaged and excited about the content. This comes with what the Pokémon company has set and put in place, which is a high desirability on the products, but also a higher level of product availability. This came through a feat from our teams.
Just to illustrate, 30th anniversary, it is 10,000 pallets and 1,000 trucks shipping from our warehouses in less than eight days for every product to be delivered within two days before the launch.
It is a tremendous feat from our teams that have been building for months and months and months, with our partners all across the business to deliver on that.
In the future, you are launching new TCGs as well, including Naruto and Hellbreak. Is there any kind of cannibalization risk that you see when you launch new games, or is it mainly bringing in new fans of Naruto into the mix?
From a consumer perspective, it is mainly adding new communities. There is probably some cannibalization, because some people are fans of a few IPs. The biggest limit is probably around retail, and cash allocation for retailers across the various games. But again, in the end, we are here to serve the market. We are here to find the right ways of helping the stores getting products in a way of allocating that is fair for everybody. Our job then is to make sure with our partners that the consumers get the products that they would like.
Very clear. Do we have any more questions in the audience? Yeah. Over here.
Hello. Thank you. I am Erik Granström, I represent Folksam. I just had a follow-up question on the incentives around the sustainability targets that you, Thomas, mentioned in the presentation. I guess what I wanted to ask is if progress against these targets in any way is sort of reflected in compensation. I am primarily thinking about CEO and senior management compensation, but also across other relevant employees in the company. Thank you.
Thank you. Erik, I think it is my role as chairman to try to give some color on this. It is obviously a topic being discussed, but it is still too early to incorporate sustainability targets into the executive remuneration. Some targets, including the Scope three targets, remain to be established, which we have communicated doing before the end of this calendar year. Once the targets and related strategies are fully in place, looking at you, Thomas, and have been appropriately tested, we can consider how they might be incorporated into remuneration in a way that is both meaningful and fair. While we are not yet ready to do so, we recognize that this is an important consideration going forward. With that answer, Erik, there is some hopes that this will be done in the future. Good. Do we have any other questions? Yeah, over here.
Joachim Spetz, Swedbank Robur Fonder. Could you talk a little bit about how you view your acquisition perspectives, let's say in medium term, and also what kind of geographies you want to especially focus on in that case?
I would say that our M&A strategy continues to be the same that we have shared at our capital markets day, what, two years ago. We look mainly for studios and IPs. That's the first thing. The market remains very fragmented and will always be fragmented because there are new players emerging every day. There are new enthusiasts creating new games, new studios, et cetera. So we will continue to leverage our strength. Lars insisted on the importance of distribution. It's a powerhouse to reach markets, but also because we distribute games from partners, it's a fantastic sourcing system for opportunities, products, and teams to join the Asmodee adventure along the way. If you look back on the 40 something acquisitions we have done in the past 15 years, most, if not all of them, came from people we were working with in one way or another.
We will continue to deploy capital. We have deployed slightly above EUR 300 million capital in the recent months, still with a very strong balance sheet. So we will continue. We will continue to be selective. That's something that's very important. We will focus also, looking at studios and IPs in priority, it's a bit irrelevant where they are because they talk to people all around the world. Of course, we continue to build our stronghold in Europe, but we want to be also stronger on the U.S. market. Then hopefully look also into opportunities that would open new emerging markets that might be looking for more local content.
Thank you.
Good. On M&A, I will add a last question. The ATM acquisition really shows how profitable it can be to be own publisher within this industry with 50% EBITDA margins. When you look at the M&A landscape, does ATM really stick out in their margin profile, or are there other candidates that have anywhere close to that margin profile?
ATM has a specificity, which is that they handle directly the relationship to online sales. It is a dual model. It is a hybrid model that works very well for social games. Meaning that by engaging directly, mainly with Amazon as an Amazon seller or selling on Amazon, enables them to capture much more margin. However, if you look, and it has been the history with ATM, as soon as a publisher wants to reach brick-and-mortar retail to reach other communities, because the communities are built in brick-and-mortar retail, in the hobby shops everywhere around the world, they are the ones that are crafting the communities.
They started working with a distributor, and the distributor name in Spain and Italy was Asmodee, and that is how we started working on. Now since the acquisition, we are taking over the distribution in France, we are opening distribution elsewhere in our global network.
As a short answer, ATM is probably an exception, but it is an exception that we will make continue thrive.
Very good answer. I think to keep the time for the rest of the agenda, we will wrap up the Q&A there. Thank you so much.
Thank you very much.
Guys. Great. Let's move on with the agenda. We have the presentation of the annual report and the auditor's report and the corresponding for the group. They are here today with me, been available on the company's website since June 29 this year and also been available with the company. Any questions on the annual report? No. That's good. Magnus, welcome.
Thank you, Ian. My name is Magnus Henryson. I'm the auditor in charge from PwC responsible for the audit of Asmodee. You shareholders engaged us to express our opinion on Asmodee's financial reporting and management's administration performed by the directors and management. Our audit has been performed throughout the year, and we've had extensive communication with the management and the directors. We have reported our work to the Audit and Sustainability Committee, and we have met with the full board of directors during the year. We think overall that the collaboration with management as well as with the directors has worked very well. Our global team consists of a central team in Stockholm and in Paris. The Paris team is led by my colleague, Pierre Etienne. We are also supported by local teams in various territories that report their work to the central team.
We have also several experts included in our team in areas such as tax, IT, sustainability, accounting, and compliance. Our view is that Asmodee overall has very robust processes for the financial reporting and that the business performance is presented transparently in the financial statements. These qualities come from the expectations set out by the directors and management and also from the commitment and competence of the Asmodee employees, particularly on the finance team that we work with. Our audit is based on the concepts of materiality and risk, and those concepts guide us to put our resources that are limited into the areas that we believe are the most important for the audit. The audit report sets out those key areas that we judge to be of greatest importance. I thought I should mention a few words on each of these. The first area is around revenue recognition.
As we have heard, Asmodee's business generates revenues from sale of board games and trading cards. The revenue is recognized at the point in time when risks and rewards have been passed on to the customers or retailers. Our view is that revenues are reported consistently with Asmodee's accounting principles, and that those accounting principles are consistent with IFRS. The second area is measurement and valuation of goodwill and the publication and distribution rights acquired in business acquisitions. There are significant intangible assets on the balance sheet. Goodwill assets have indefinite useful life and are held at cost without amortization, while publication and distribution rights are amortized over their useful lives. Both these line items have been subject to impairment tests, and we have tested those impairment tests in our audit. That includes, for example, choice of models, testing of input data, and evaluation of the key assumptions made.
Our view is that the goodwill items and intangible assets have been measured correctly in accordance with the accounting principles that are consistent with the IFRS. Thomas mentioned the CSRD sustainability report. It is a very comprehensive report, and there is a lot of work that has gone into preparing that report. It is the first time it has been presented, as mentioned. It is consistent with the European Standards for Sustainability Reporting and the EU Taxonomy. Our opinion from the review work around that report can be found in the annual report on pages 72 and 73. I have now come to the conclusions from our audit.
As can be read from the auditors report, also included in the annual report, the conclusions are that we recommend the annual general meeting to approve the income statement and the balance sheet for the parent company and for the group, that the profit be appropriated in accordance with the proposal set out in the statutory administration report, and that the directors and the managing director be discharged from liability for the financial year. Thank you.
Thank you, Magnus. Any questions in the room for Magnus? No. Great. Thank you, Magnus. Then we can conclude that annual report and the consolidated annual report for the group is presented. Next item on the agenda is item nine, A, B, and C, which relate to adoption of the income statements and the balance sheets for both the parent company and the group. We have the decision regarding the profit allocation, and we have the decision about discharge from liability for the board of directors and the CEO. If we start with the first one, can the general meeting adopt the presented income statements and balance sheets?
Yes.
Thank you very much. As included in the notice, just to note, like Andrea did before as well, the dividend will be EUR 0.17 per share and be divided through four quarters. Can the general meeting approve and resolve in accordance with the proposal for the dividend?
Yes.
Thank you. For the discharge, can the meeting grant that to the directors and the CEO?
Yes.
Thank you. I will just note as well that none of the directors or the CEO have voted for themself in this question or rather granting themself discharge. We can also note that it has been passed with sufficient majority for granting the discharge. Now, Per, welcome up for the items 10 through 12.
Thank you. The nomination committee in respect of this AGM has been comprised of myself, appointed by Lars Wingefors AB, Kristian Åkesson, appointed by Carnegie Fonder, Joachim Spetz, appointed by Swedbank Robur Fonder, and Magnus Tell, appointed by Alecta. Once again, I will assume that everyone has had the opportunity to review the recent statement and our proposals. I will not go into this in detail. I just give some brief comments. Firstly, ahead of this AGM, we have had eight recorded meetings and has had regular contacts in between. For its work, the nomination committee has reviewed and considered the internal evaluation of the work that has been conducted by the board of directors and the chairman's statement regarding the board's work.
The nomination committee has also reviewed the company's strategies again and interviewed the company's auditor as well as all individual members of the board. Comment on remuneration. The fees have been increased slightly, as you might have noticed, across the board. Furthermore, once again, I would like to underline that the nomination committee encourages directors to hold shares in the company. Composition of the board of directors. Marc Nunes has declined re-election, and as you probably noted, the nomination committee proposes Anna Mossberg as a new member of the board, which we believe will bring both fresh perspectives and additional expertise to the board. The proposed composition of the board meets all requirements of the Swedish Code of Corporate Governance. Finally, I would like to once again thank my fellow members of the nomination committee, Magnus, Joachim, and Kristian, for their commitment and for our excellent cooperation.
Valid for all nomination committees, good teamwork doesn't mean agreeing on everything. If it did, our meetings would have been considerably shorter. Questions?
Anna is new to the board.
Yes.
I think there are some who are interested.
Yes. Let's take the opportunity for Anna to give a few words on herself.
Maybe I can use this.
Yes.
Hi, everyone. My name is Anna Mossberg. I am Swedish, and I spent the last 30 years doing international business based on tech. The last nine years, I have pivoted more and more to board work and investments, and I am currently on the boards of Swedbank, Swisscom, and Ringier. Now, as Thomas said, I hope to be a player by the table at Asmodee. As a person, I am passionate about learning new things, continuous learning, and creation of value. I hope to bring that in this position as well. That is all.
Thank you.
Perfect. As Per said, everything has been available in the notice and on the website, so I won't go through the proposals. I'll just ask the meeting here if we can decide in accordance with the proposals for item 10, 11, and 12.
Yes.
Thank you very much. Item number 13, which is presentation and approval of the Board of Directors' remuneration report. It's been available on the website, here today as well. Any questions about the report? I think good. Then I will also note that auditor's statement about the guidelines for remuneration has been available at the company's website as well since August 24. Can the meeting decide to adopt the report, approve the report?
Yes.
Thank you very much. Then we have the resolution regarding the guidelines for senior executives. Again, I won't go through them. I just ask, any questions? No? Good. Can the meeting decide in accordance with the proposed guidelines?
Yes.
Thank you very much. Then we have a trio of authorizations here. So I'm just, due to some time constraints, ask, any questions on any of them? No. Okay. Then, can we just say yes to all of them?
Yes.
Excellent. Then I note that item 15, 16, and 17 has been adopted as proposed, and that all of them has passed with sufficient majority. I want to welcome Lars up to the stage to say a few words before we conclude.
Thank you, Ian, for the swift making here. Before we conclude today's meeting, I also want to say a few words about Marc, who is leaving our board today after two years as a board member. Marc's history with Asmodee goes back much further than that. More than 30 years ago, he founded the company. He saw that players were changing, that they expected more from board games, and that games needed to change with them. From the beginning, he put innovation at the heart of Asmodee. New games, new ways to play, but also new ways to bring those games to more people. Marc understood early that distribution would be an important part of that. First in France, then across Europe. That combination, great games and the ability to bring them to a much wider audience, became an important part of what Asmodee is today.
Marc has been part of Asmodee in many different roles. First as a founder and CEO, later as a COO under Stéphane, or aside Stéphane. For the past two years as a member of our board. That is quite a journey. On behalf of the whole board, I want to thank him for his enormous contribution he has made. Without him, we wouldn't be here today. I would also like to add my own personal thanks to Marc. It has been a real pleasure working with him, and I can't forget the first dinner we had at Thunes with the acquisition 2021. Since then, and I hope even though he's now quitting at the board, I will have many more opportunities to engage and have dinners or playing board games with him. I wish him all the best for the future.
Unfortunately, he's not here, but I have a strong feeling I will meet him soon again. Thank you, Marc, and thank you, Ian.
Thank you, Lars.