All right. Hello, and welcome everyone to Embracer's Annual General Meeting 2023. My name is Erik Larsson. I'm an equity research analyst at SEB, and I will be the moderator this afternoon. Also, of course, a very special welcome to everyone here attending physically to the sunny and beautiful city of Karlstad, hometown of Embracer, but also my hometown, so I'm very excited to be here as well. Anyways, as for the agenda, I will hand over to Kicki Wallje-Lund here in just a second, Chair of the Board, which will be followed by presentations of Embracer, including deep dives of Coffee Stain and Gunfire Games, as well as some market insights before we circle back to me for some Q&A. So with that said, I'll leave the floor over to you, Kicki.
Here I am.
There you are.
Well, I also, of course, would like to, on behalf of the board, welcome all of you to Embracer's 2023 Annual General Meeting, and I also would like to welcome everyone that participate via the web today. And with that, I want to declare the Annual General Meeting of Embracer Group opened. But before we start, we're having a question. The board of directors proposed that the meeting is to be held in English so that everyone can understand what would be said here today, and I'm wondering if we're all okay with that? Great, thank you. Also, what could be good to know, that we will have a public Q&A session during the presentation of the business activities later on. But in this Q&A session will only be open during the presentation of the business.
Now, it has been a year of extraordinary and unexpected turns since we last met. This is true on a global level, but also for Embracer. As a company, we have improved on our standing on several fronts, but we have also had to navigate the most challenging period in the history of Embracer. True to the restructuring commitment that we made back in June, we are becoming a leaner, more efficient company, and focused on creating world-class entertainment for our customers, and lasting value for our investors, who, like many of you here today, have been very loyal and stuck with us through good and less good times. I know that while hard, the steps we have taken and difficult decisions we have made during the past few months will ultimately build trust in our community.
They will strengthen our position as a leader in the gaming and entertainment industry, and they will lead us to a better future together. At the same time, there is so much instability in our world, from rising interest rates to continued Russian aggression in Ukraine. I'm reminded of a line from The Lord of the Rings, when Frodo expresses his concern to Gandalf about the quest and how he wishes none of it would have happened. Gandalf tells Frodo: "So do all who live to see such times, but that is not for them to decide. All we have to decide is what to do with the time that is given us." And that is a statement of trust and belief, both in the shared vision and in the power of working together to achieve a mission.
As chair of the board, I have the privilege of working with the exceptional artists, storytellers, and creators in our Embracer family all over the world, and see that trust and belief in action. In my conversations over the last, over the past several months with many, many Embracer team members, I have been inspired a lot by their confidence and commitment to the results we have achieved so far. They believe, as does Embracer's board and the leadership team, in the remarkable company we have built, in the unique Embracer model that has attracted so many industry-leading entrepreneurs, and in our future and what we're going to accomplish. I have been with Embracer for seven years now, and I believe now more than ever in what Lars said in 2016, that the best is yet to come.
In my heart, I know that is true, and I look forward to helping deliver on that promise. Now, market analysts report that the worldwide entertainment sector is expected to continue growing, and consumer spending will increase to more than $900 billion in 2027. And according to data recently released on two of our key markets, 53% of Europeans and 65% of Americans play video games. And If we just think about that for a second, this is a major point that is easy to miss in big numbers. While it is a testament to our innovation and creativity that we currently have scores of millions of players around the world, we are just now starting to tap into the total addressable market. And according to Embracer's internal data, our game have long tails that lead to incredible retention rates.
Speaking plainly, when someone starts playing our games, we know many stick with them and continue to purchase our content well after launch. So this is an exciting time for our industry. There are advancements in tech, yes, of course, including AI, that years ago could not have been imagined. At Embracer, we do not see these steps forward as threats to jobs. Rather, they create efficiencies that let our artists do what they love much faster and better. However, if one were to look only at our games, they would get an incomplete picture of our full Embracer potential, because the transmedia strategy that you have heard us speak about before, now is starting to take root and begun to bear fruit. What we have worked so hard to achieve is now tangible.
A moviegoer who enjoys the film adaptation of a video game IP can now become immersed in the video game itself. They can then go deeper into the world with a graphic novel or listen to a podcast about the lore. If they love the graphic novel or the concept, they can play a board game based on the IP, and then they can purchase the shirt to show the pride to the world about their new passion. This is the holistic experience we are driving toward. Embracer companies working together to maximize our IP and create an integrated experience for fans is real and starting to happen. All of this taking place while Embracer works nonstop to refine and improve our governance and sustainability standards. This will ensure transparency and meet the requirements of being a publicly traded company.
Our uplisting to Nasdaq Stockholm this past December was a great moment for Embracer. As part of the main market, Embracer has a future of greater visibility, liquidity, and access to capital markets, which can benefit all of us. To conclude, no doubt it has been a challenging year, but it has also been one of tremendous effort, filled with great games, created by extremely talented people. Our focus moving ahead is, of course, to build on that. We are taking the needed actions that will let us improve our financial and operational performance, so they are aligned with our restructuring program targets. The tough decisions we make today will make us stronger as a company in the long term.
I would be remiss if I closed without expressing thanks to our investors who have stuck with us, our gaming community that support us, and to our Embracer team members who make all this possible and believe in our future. True to our Swedish values and roots, Embracer continues to be humble in success, steadfast in adversity, and loyal to those which we work with so closely. Thank you. Now, next item on the agenda, we will now appoint who will act as the chair at today's annual general meeting. And the nomination committee has proposed that I am elected chair of the meeting, which has also been published in the notice on the August 22nd. So do we have any other proposals? No. Can we elect me to the chair of today's meeting, then?
Yes.
Thank you. As a clear yes. No, sorry, here. Thank you for the confidence. I have this wonderful schedule here what to say, and I sort of jumped over a sentence. Now, due to, due to among other things, including the webcast, there are several unregistered shareholders here and guests at the premises, and participating remotely as well. Can we invite this to attend this meeting?
Yes.
Good. I also would like to point out that in addition to the company's representatives and the auditor, only shareholders who are here in person by proxy or cast their vote in advance and are entered into the share register for the meeting, the representatives and assistants who are registered for the meeting have the right to speak, vote, and give proposals at the meeting. During the Q&A, we will, however, allow everyone present at the meeting and remotely to be ask, to be able to ask questions. Can we agree on that?
Yes.
That was a very long sentence you have written for me.
Maybe I can shorten down.
I have, of course, asked Ian, that is Embracer's Chief of Staff and General Counsel, to keep minutes from the meeting, from this meeting. I also would like to inform you about which board members are here today. In addition to myself, we have Jacob Jonmyren here, as you have probably met many times now. We have Cecilia Driving here as well, and of course, Lars. The company's auditor, EY, is also present through the company's main responsible auditor, Johan Eklund, also... Oh, there you are. And we also have the Nomination Committee Chair, Per Fredriksson, here. As well, Henrik, also from the Nomination Committee in the middle here, somewhere there. Yes.
Now, we have come to the item number three on the agenda, and that is preparation and approval of the voting list, so I will hand over to you, Ian.
Thank you. Thank you, Kicki. We have ticked off everyone that has passed into the room here today, and we have also received advanced votes, which are included in the voting list. Everyone included in the voting list has notified the company in accordance with the instructions in the notice for the general meeting, as well as being registered as a shareholder, on the record date, in the share register for the meeting. So to sum up the final result, of all everyone present here today and advanced votes that has been cast, we have, my tongue needs to... One second.
52,260,204 A shares presented here today, which corresponds to 3 ,022,000,642 votes. We have 604,402,459 B shares, which corresponds to the same number of votes. In total, we then have 600,566,263 shares present. A lot of sixes, as you can hear. In total, we have 1,127,004,499 votes present here. All of this represents the total of the shares. We have 49.04% of the shares in the company present here today, and we have 58%, 58.08% of the votes present here today of all the shares and votes in the company.
Thank you. Can we approve the voting list?
Yes.
We will remember the numbers by heart. Okay, we have now come to item number 4 on the agenda, where we will appoint one or two persons to certify the minutes. I'm wondering if we have any suggestions?
Carl Almfelt.
Carl Armfelt. Okay. Are there any more suggestions? Okay, I find it's not. Can the annual general meeting resolve to appoint one person to certify the minutes? Then I have to ask Carl. I think I've seen Carl's... Ah, there you are. Would you be prepared to verify the minutes, and will you be around after the minutes so we can sign after the minutes? You will be around. Thank you. Okay, number five on the agenda, a question whether the meeting has been duly convened. Ian, could you please inform the meeting regarding the notice to the annual general meeting?
Yes. Thank you. So the notice has been published on the company's website on the August 22nd, and at the same time, or rather two days later, on the August 24th, the notice was also published in the Swedish Official Gazette, Post- och Inrikes Tidningar in Swedish. At the same time, a notice in Svenska Dagbladet was published as well, notifying all shareholders about the meeting. All of this has been done within the time stipulated in the Articles of Association, which is no earlier than six weeks prior to the meeting, and no later than four weeks prior to the meeting. The prerequisite for a correct convened meeting is there.
Thank you. Does the meeting consider that the meeting has been duly convened?
Yes.
Good, thank you. Now, come to the item number six on the agenda, that is approval of the same. and the proposal for the agenda have been announced in the notice and distributed to the participants at the meeting here today as well. Can we resolve to determine the proposed agenda?
Yes.
Good, thank you. I find that the agenda has been approved. Now it's time for the more exciting part of the AGM, and that is the presentation of the operations within the group. I would like to ask our CEO, Lars Wingefors, to take the stage and start the presentation. And also, Johan will join us later.
Thank you, Kicki, and hello, everyone. I guess I will borrow that box. So great to be here in Karlstad, Värmland, for another annual general meeting, and happy to present what now seems long ago, the financial year of 2022-2023. First of all, I just would like to take a moment to reflect on what we have built at Embracer. Today, we consist of 12 operating groups, well above 100 game development studios, and more than 800 IPs, with a business that is well diversified between four operating segments. I firmly believe that our decentralized model that empowering entrepreneurs, creators, and our great people is the best model to drive long-term, profitable growth in a highly creative industry.
Now, looking into the highlights of the year, and as we close the books of fiscal year 2022-2023, we can conclude that it has been a challenging year. Characterized by a weaker consumer market, but also for Embracer, specifically, game delays and a high-profile deal that did not materialize. The financial and operational development was solid in absolute terms during the year. Net sales grew 121% year-over-year to SEK 37.7 billion, with a 2% organic growth. Adjusted EBIT grew 43% year-over-year to SEK 6.4 billion, corresponding to a margin of approximately 17%. Adjusted earnings per share increased to around SEK 4 from SEK 3.50 in the prior year. The strong earnings development was primarily driven by the addition of our tabletop games operating segment, Asmodee, and solid earnings performance for mobile games.
At the same time, the results are not nearly as strong as we expected heading into the year. This is largely due to PC console games operating segment, which saw solid organic growth, but notably lower margins year-over-year due to pipeline shifts, a lackluster reception for certain releases, and a weaker consumer purchasing power. It has, however, also been a year in which we have reaching several notable milestones, including the transition to IFRS and segment reporting, the listing change to main market as Nasdaq Stockholm, as well as setting our first group sustainability targets. Looking at game titles, our top revenue drivers in PC console segment during the year were Saints Row, Valheim, Goat Simulator 3, Deep Rock Galactic, and Star Trek Online. On the mobile game side, the top titles were Blockudoku, Sudoku.com, Jigsaw Puzzle, Art Puzzle, and Nonogram.
And when I asked, or when we asked, our operating groups if they have some interesting data to share, which is not purely financial as such, we got a lot of data the past, the past days here. On this slide, and I won't talk you through all that data, but I would like to show that the diversity of the group... and that we have millions and millions of consumers enjoying our products every day. And this is some numbers I think is worthwhile reflecting on if you take a longer perspective. For example, within Asmodee, there is more than 50 million board and trading card games sold from their business every year, or last year. Or from Dark Horse Comics, they have the number one manga series comic in the American market, Berserk.
Or the amount of minutes people have spent in Satisfactory, 19 billion minutes. Or the amount of years people have been spending in the Easybrain games, 1.5 million years. Or also from Easybrain, customers are finishing 100 million levels every day. Also encouraging to see that there's as many male and female enjoying our products across the world. And in a few hours, we are publishing together with the developer Starbreeze, a new title, PAYDAY 3. But we got the data, there is actually already 76 million enemies killed in that game. On this slide, the year in brief, you can see some highlights in, in the quarters of the year, both in terms of M&A and operationally, and I won't take you through all this.
But just to highlight something, I think the acquisitions of Middle-earth Enterprises and Crystal Dynamics, Eidos, has rendered a great excitement within the group and enabled notable partnership opportunities. Both has delivered ahead of their respective business plans at the time of acquisition. Apart from those two businesses, we have also acquired some incredible companies, such as Limited Run Games and Tripwire, that we feel confident will deliver great value in the years ahead. After reaching many operation and regulatory milestones during the year, and following that one major strategic partnership that did not materialize, we also initiated a restructuring program after year-end, and I will talk more about that very soon. Also, to give some perspective, I think it's worth seeing the development of Embracer since the IPO 2016.
During the past years, Embracer has invested significantly, both in acquisitions and into the strategy of accelerated organic growth. We have acquired some of the world-leading entertainment IPs. Through our transmedia strategy, we strive to build an even stronger ecosystem based on diversified IP portfolio, with an opportunity to cross-fertilize IPs and strengthen licensing partnerships across gaming categories, different content formats, and platforms. I am proud of what we have built over the past years, and I'm happy to see the positive reception for titles such as Dead Island 2 and Remnant II in our PC console game segment at the start of the current financial year. We have a business that is well diversified between four operating segments, and we have invested into one of the largest pipelines across the industry. We are now a full-scale gaming and entertainment company.
Looking ahead, we remain focused on executing on our games pipeline, partnership approach, and efficiency improvement initiatives. I'm confident that Embracer will come out stronger. As you all remember and noticed, and following our Q4 report, on June 13th, we presented a comprehensive restructuring program. The objective of the restructuring program is to deliver a set of operational and financial measures to increase cash conversion, improve efficiency, and reduce CapEx. The initiatives under the program can be grouped under three main focus areas: CapEx and OpEx savings, capital allocation, and efficiency improvements, which will be delivered in phases.... As difficult as some of the decisions that we will take will be, we are confident that we will emerge as a stronger, more efficient company, setting out on a stable future to build even greater value across many studios and uniquely diversified portfolio of IPs.
In the three months since the announcement, the targets announced have been translated into action. We aim to deliver savings of at least SEK 2.9 billion in CapEx, and at least SEK 0.8 billion in overheads on a full year basis by fiscal year 2024-2025. The outcome of the program is expected to nearly half the opening net debt position, reaching SEK 8 billion at the end of the current fiscal year. Today, we are in the middle of the implementation of this program, and there is a lot of different work streams and actions across all areas happening. We are confident and determined to deliver on the goals we set out by the end of the fiscal year. With that said, I would like to hand over to Johan.
Thank you. Thank you, Lars. Always a pleasure. So let us have a look at the financials for fiscal year ending March 2023. The growth journey continued during the year, with sales reaching approximately SEK 38 billion for the year. Growth was driven by full year contribution from acquisitions made late in the previous year, mainly Asmodee and Dark Horse. It was further fueled by acquisitions made during the year, mainly through Crystal Dynamics, Eidos, Middle-earth Enterprises, and Tripwire. The EBIT margin reached 17% for the full year, which is lower than previous years, and mainly explained by M&A activity, product mix shifts, and also a soft performance within the PC console segment due to lower ROI on release titles, as well as delays.
Worth pointing out is that there were key additions to our IP portfolio during the year, where Lord of the Rings and Tomb Raider stands out. These fantastic IPs strengthen, strengthen our overall IP portfolio and provides increased opportunities for the future. Turning to our balance sheet as per March 31st, 2023. It's worth noting that we have invested approximately SEK 11.4 billion into our games pipeline. Of these, SEK 9.3 billion is investments into ongoing game development projects. When our pipeline matures and games are released, we expect this to be a driver of future cash flows and profits. Approximately SEK 3 billion were invested in networking capital at the end of the year. This corresponds to roughly 8% of annualized net sales.
If you look at the right-hand side, we have SEK 82 billion invested in acquisition-related intangible assets, such as goodwill and IP rights. These have been financed predominantly with equity, but also bank loans and provisions for earn-outs. And looking at the provisions for additional considerations, approximately SEK 8.5 billion is expected to be settled in cash in the future, if certain operational and financial targets are met. If you look at our cash flow for the year, free cash flow was SEK -39 million for the year. The main reason for the negative cash flow is the continued high level of investments into our games portfolio. During the year, net investments into games CapEx was SEK 5.6 billion . We also had a large increase in working capital during the year, SEK 2.1 billion .
This is mainly related to the build-up of excess inventory at Asmodee. Also an increased number of co-publishing and co-development projects, with new projects weighted towards the end of the year, and a reduction in prepaid income related to a large game release. Looking at the M&A and financial cash flows, they are SEK -1.6 billion, as more cash was invested into M&A than was raised through equity and loan, net, on a net basis. If you look at operational growth and investment growth, the high level of investments also shows in the operational KPIs on the left-hand side. The number of studios increased during the year from 118 to 138. The overall headcount increased during the year, reaching more than 16,500 people at the year-end.
The number of ongoing development projects remained fairly constant, at around 220 projects. Over the last years, we have invested 2-3 times more than what has been completed, thereby growing the value of our games portfolio, setting the stage for future profitable growth. It's also worth noting that, there is a significant increase in completed games in the year compared to prior years, and the key driver for this is the release of, Saints Row. Saints Row had an ROI below expectations, for the year. With that, Oscar, welcome.
Thank you, Johan. The mic is working, good. So, we are—I'm happy to see so many shareholders here, and as Ian also noted, with a lot of the shares here today. I thought this would be a good opportunity to also discuss the share development and the shareholders, which we don't do that often. So we'll take you through just a few slides on that. So looking at the share price development and also the volume traded, you can see that from a stock market perspective, it has been quite a journey over the past seven years, with both ups and downs.
The past year, as you know, has been a very humbling one from a stock market perspective, with the shares down around 58% in the past year. As you all know as well, and as Lars and Johan have discussed today, it's been a year characterized by a weaker consumer market, as well as increased cost of capital. And for us specifically, we've also seen, as Johan said, a mixed reception for some of our key titles and notable game delays. These factors have impacted our earnings and our cash flow during the year, as well as, of course, our share price development.
Taking a longer-term perspective, which I think is worthwhile doing, of course, you can see that our share price since the IPO is up close to 700%. So, that's the longer-term perspective. Of course, as you can also see on the next slide, we'll go through our shareholders. But I think partly, looking at the right graph, partly as a result of the trends here in the financial markets, and for us, you can see that the active fund ownership has decreased in the past few years, while the passive fund ownership has increased, which is likely a result of both our growth in recent years, as well as our uplisting to Nasdaq main market in Stockholm.
Looking a little bit closer at our shareholders, and some interesting facts on our shareholders, you can here see a distribution of our known shareholders by age category in this bell curve-like graph. An interesting point on this graph, which I think is quite fun, is that we do actually have eight shareholders between the ages of 101 and 200. So I'm not sure if any of those are here today, but please let me know. Looking also at the number of known shareholders, very humble, of course, to see the strong development in recent years. Also, of course, focused on delivering shareholder returns in the coming years. Our focus is on maximizing long-term shareholder value for all shareholders.
As you know, we are a company that is run by entrepreneurs, and also partly owned by entrepreneurs. And I think we all truly believe that we have great assets and IP within Embracer, and our aim is, of course, to demonstrate the earnings and cash flow power of those assets over time. And with that, I'll leave it over to Emma, I believe.
Thank you. Thank you very much. I think my slides will be a bit less dramatic. My name is Emma Ihre, and I'm Head of Sustainability at Embracer Group, working together with Karin Edner-Karlsson and the rest of the team. So to put it short, our sustainability work is about acting in line with our values and creating long-term value to, to our stakeholders. And why? Why is this so important for us to create that value and to act in line with our values? It is important because we are human beings running this company, and human beings responsible for doing what's in our power, to support or to help the world in the right direction.
And I personally think it's never been more important to do everything in our power to do what we can, can do to support the world in the right direction. And the same holds for all companies, for Embracer, and for me, that is very, very important. But as well, our sustainability work is about risk management and business development. So it's about values, it's about risk management, and it's business development. And some of our most material issues of doing that is diversity and inclusion among our employees. It's diversity and inclusion in games and entertainment. It's the well-being of our employees, and it is to make games and entertainment accessible for all, regardless of abilities. So that's some of our most material issues. And some highlights from from the year that passed.
Our board of directors has set three sustainability goals for the whole group, which I know, Lars, you already mentioned that. And the first goal is about diversity, inclusion, and leadership, to double the number of female studio heads. That's one way of working on diversity and inclusion. The second goal is about reducing our climate footprint, and we signed up to a science-based target. And the third goal is to use our decentralized business model to promote sustainability in all markets and in all segments. So we we work the same way with sustainability as with everything else we do. As well, we have improved some of our ESG or sustainability ratings. We have a greater focus on team development and leadership.
We do this annual survey for all our employees, but then you have to do something with the result. And now we're putting lots of effort on developing our teams and supporting them with leadership coaching. And as well, we have supported the people affected by the war in Ukraine, or Russia's second or escalated invasion of Ukraine. So we try to do our best to support everyone affected. So what's the focus for this financial year? Because we actually already started the next year.
The focus now is integration and collaboration to integrate sustainability in everything we do in the company, within the group, but as well, collaborate with the rest of the industry and to collaborate with great NGOs like Women in Games, Global Compact, and other NGOs, and partnership we have. We will also focus on implementation. Our board of directors have set ambitious sustainability goals, and we have great policies in place, but now we kind of put lots of effort in the implementation and monitoring that we are on the right track. And as well, it's readiness work for new laws and regulations, regarding external reporting and due diligence or risk analysis.
And like, I think most of you know, there are many new laws about reporting, external reporting, and especially in the area of ESG or sustainability, and as well, that we have to do a risk analysis of our whole value chain. So that's gonna take much of our time. And I'm gonna end with these slides, but you know where to find us, you know where we live, and if you have questions, feedback, comments, please contact me or any of my colleagues. Thank you. And I don't know who's next on stage, but it's of course, Lars.
Well-
Yeah.
Thank you so much, Emma. Now, I would like to welcome just Chris, that we have online here from, I guess, London. Welcome, Chris.
Hey, Lars. Hi. Can you hear me?
I hear you well.
Good. Sorry, I can't be there in person.
We would like to hear a bit more about the gaming and entertainment market. So I guess you're ready to share some more data.
Absolutely. First of all, pleasure to join you. Good afternoon, everyone. We're gonna take a look at the both the market performance and the market trends in the video games and the tabletop market. But let's start with video games. Okay, so, I like this chart. This basically, it gives the market some perspective over a number of years, and it shows that the market trend line is very good. We see this shows the the market, including all three sectors, console, PC, and mobile, in $ billions globally, and it shows from 2019 to 2026, the market trend line has generally been positive. Next.
The data this year shows that in 2023, the market is expected to grow by about 3%, which I think is generally pretty good, considering the challenged macroeconomic environment. And it's also well up on the COVID peak, which happened in 2020 and 2021. And it just shows perspective that now we've got through—there's a certain normalization going on now, we can look at normal years after the two peak years. And if we look at the bottom there, the average CAGR is showing about 6% over the period from 2019 to 2026. So overall, I think the market is in good shape.
This kind of trend line is as seen by other analysts as well, not just Newzoo, who show us this data. And if we put some perspective on it from real-world company public quarterly reporting, we also see that most companies that are showing their reports are showing year-on-year revenue growth as well. And in terms of their releases, a lot of companies, a lot of major releases now are breaking records and selling more than previous versions. So what's driving this? First of all, we have a better comparable period now. Now we're over the hump that was the COVID peak in 2020 and 2021. There's more consoles available and more bigger games coming out, a lot of them delayed from the COVID period.
And of course, there's more people gaming, playing games than ever before, and we'll look a little bit more of that at a later time. One thing I do get asked a lot is what are the effects of the spending squeeze? How is it affecting games? It's hard to say, of course. No one knows for sure, but so far, so okay. I think there's certainly evidence that the gaming has, as in the past, in previous recessions, is not so affected by tough times as other categories. I think gaming is generally perceived as good value for money, and of course, there are many different ways and levels of playing and paying. You can buy some content for GBP 1 or 50 pounds.
Of course, furthermore, during tight spending times, people are gonna spend more time at home, which is, which is beneficial for games. Next. Okay, so now we're gonna look at the key market trends. The first trend we're noticing is that yeah, everyone's playing games, and basically, it's permeating the mainstream, and there's evidence of that from the recent Mario movie, which is currently number two in the box office rankings so far this year, second only to Barbie, and of course, many other IPs have had great success. HBO have had great success with Last of Us, which broke some records. We should also point out that Embracer have their own Borderlands movie coming out following the Gearbox IP, and that's out next year.
So there are more people playing than ever before. The player numbers continues to grow. Next, there are currently 3.4 billion playing, about 43% of the world, which is up 6% year-on-year. But of course, that's means great opportunity. That means there's another 57% of people who haven't played. This highlights the point that Kicki mentioned, where there are more people playing, but there's still opportunity for many more people to play as well. Another key trend is that the vast majority of revenue is now coming from in-game sales. Now, this is relevant for publishers from a couple of points of view.
First of all, it enables them to elongate their revenues and timelines that people are playing games, but it also makes games more profitable, you know, compared to, say, a business model where you're selling it in boxed forms. What it does mean is that there are fewer big games generally, though, as people focus on existing IPs and also extending the life of their IPs via in-game services. This, of course, is an opportunity. But it does mean that with fewer games, the re-release schedule can be a little bit patchy from time to time. So I would advise when looking at market data, that people should not look at one month on its own; we should look over a longer period. It seems that older gamers are taking increasing share of the market.
There are some surveys I saw in the U.S. and U.K., which showed that gamers in their 30s and 40s were actually playing more regularly than younger gamers, which was quite surprising. And this is relevant for the games publishers because older gamers generally will have higher income, and also, yeah, and that they will spend more. There was another study in the same territory where we saw that 50+ gamers were actually accounting for nearly a quarter of all gaming spend. What does this mean for games? Well, it means that the older games, like retro games, re-released IPs and sequels, will of course, do well. As we see, it's an opportunity for IP to extend its play.
Seems that IP is a sort of a common theme here, as, you know, through transmedia into the movies, et cetera. And also, IPs can be leveraged now across many different platforms. Whether you have a console game you put to mobile or mobile to PC or vice versa, et cetera. Next. Okay, we're just gonna take a quick dive into the main segment, starting with PC and console. The largest, this is the largest sector for, sorry, the largest market. Sorry. Next, next slide, please. If you look at it geographically, the PC and console is largest in U.S. and Europe. It makes up about 2/3, with the number two sector being Asia-Pacific, making up a 1/3.
And this, of course, is where Embracer's presence is strongest. Moving on to console. Console is having a great time at the moment, thanks largely, largely to next-gen consoles. Console is the fastest-growing sector, and usually report about plus 7% year-on-year growth, consistent with other analysts as well. Next. And we see in the chart here that Sony announced that PS5, in the first 2.5 years, people are spending about 30% more than they did on PS4 over the previous years. And they're doing that because, of course, it's digitally connected, and it's easier to buy digital content than it is boxed content. PS5 is also having success through console sales.
With free supply now, console sales have over doubled in the US and Europe in the first half of the year, and that, of course, will have benefits for software companies. So the PC market is very steady. We have an expression in England called Steady Eddie, and that's what the PC sector is. That, of course, doesn't suffer from the peaks and troughs that the console cycles come from. It's just very steady, and largely thanks as well to the large number of PC hardware that's been put into homes post-pandemic and during the pandemic, thanks to, well, not thanks to, but due to homeschooling and home working, et cetera. Of course, the market is split into two.
The free-to-play sector has had some headwinds in China, with the Chinese approval slowing down, but the premium sector is the star of the show. The premium full game sector has been seeing consistent growth over a five-year period, and that has been evident by games like Diablo, the recent game, which has been breaking all records on PC. Next. So lastly, the mobile sector. This is the largest game sector globally. Next. It's making up about half of all revenues, 49% of the $188 billion market, with console second on 30%. If we look regionally, where it's strongest, it's strongest in the Asia-Pacific region. Next.
And we see there that Asia-Pacific makes up about 61% of the market, with U.S., Europe making up about a 1/3. If the market is still in growth, although it is proving very unpredictable to forecast, and many analysts have changed their forecast down slightly to the recent numbers, most are saying between 1% and 3%. And of course, it's had some ongoing challenges, such as the privacy regulations, which have been ongoing for a while, the IDFA, as it's known, as well as rising acquisition costs. One last thing to mention is that ad revenues are not actually included in any of the data that the market analysts show.
It's proven very difficult to track, but anecdotal evidence, looking at certain companies, suggests that, ad revenues could be as much as the SEK 95 billion or even more, from, the traditional revenues. Okay, and last but not least, the tabletop games market. This is the segment, of course, where Asmodee operates, and looking at the markets in the US and EU. Next. We're seeing that the-- we're seeing about 2% market growth for the year. Just to add a little... That was in the, fiscal year ending March 2023. Just to add a little bit of color on that, the strongest category was, strategic trading cards. That was seeing the, the highest year-on-year growth. The market also had a really strong holiday period at the end of, 2022.
And similar to games, it's showing good compound average growth rates of about 10% from pre-pandemic to current times. And that's the end of the presentation. Thank you very much.
Thank you so much, Chris.
You're welcome. You're welcome, Lars.
Thank you. Let's welcome Anton on stage. One of our first entrepreneurs.
Thank you, Lars. Hi, everyone. All right, let's do this. So, I'm Anton. I am the CEO and one of the founders of Coffee Stain. We were the third operative group to join, and it's been a very interesting period. We've seen this group of companies. It was, I think, we felt it was big when we joined, but it's a totally different company today. So, I'm gonna give you a little bit of history on Coffee Stain, and then I'm gonna give you an update on where we are today. I'm gonna talk a little bit about how we work, and give you a little peek into our pipeline. So Coffee Stain, some of you have heard this before, but we started as a group of friends from University of Skövde, nine co-founders.
Skövde has this education for game development in the middle of Sweden, and, during the last year in school, we got together and formed a company. And there's an incubator there as well in Skövde, which was quite crowded, and to get into the incubator and get some office space, we had to pitch them something, so we said to them that we would make six mobile games in one year, which was a very naive plan, but this was 2010, and everyone wanted mobile games, so it worked, and they let us in. In the end, we made one mobile game in that year, which I'm still quite proud of. This is actually the first game that Coffee Stain launched.
And the incubator told us, being new developers, that, like, in order to devel—like, launch a game, you need to have a publisher. You need some marketing muscle, someone to help you out. So we went out and looked, and we managed to actually get a publisher, which was a very big name, and we were starstruck to set a deal with Atari, and we were like, "Wow!" Now, they were moving into mobile. It's like the stars were aligned, and we thought that this would be the next Angry Birds, but that didn't really happen, so that was a humbling experience. But for us, it was a very good start of the company, I think, and it made us think a lot.
So we went back to the drawing board, and we had this game that we had already started in school, which was a mod for Unreal Tournament called Sanctum, and this was really what we wanted to do, so we got back to focusing on this. And in 2010, Steam was very different compared to what it is today. There was no way to just get in on Steam like it is today, so we spammed, like, a mail address to Valve and finally got a response, and luckily they said, "Yes, you can, you can publish your game on Steam." So we got the distribution agreement set up, for this, and it turned out quite well. Sanctum launched in April 2011, and this top chart is a very old top sellers from Steam chart.
This is the first summer sale we had with Sanctum in 2011. Just a couple of weeks before the sale, and think about the time perspective, we launched in April, and we... The game was quite broken, and we added four-player co-op, we added a lot of stuff, server browser, lots of these features that typically take a long time, but we just threw it in there. And the timing was right, so we ended up on the top chart, number one, and I still remember we went into the office in the middle of the night when this happened, and was just celebrating.
It was crazy, but it's also funny to think back because, like, during these 24 hours, when the game was the first top seller on Steam, we made about $100,000, and it's like today, you're not gonna be number one on Steam with that revenue, so. But for us, it was, you know, good enough. We were about 10 people, and it gave us the money to keep working, and we did the natural things. We started working on the sequel, Sanctum 2, and we went out to try to go do more platforms, which was the natural thing. But at this time, to launch a game on Xbox and PlayStation, you actually needed a publisher or a kind of a recognition with the platforms.
So again, we had to get the publisher on board, and, well, luckily, we managed to-- we were smart enough to say, "We're gonna keep the PC rights." So we self-published on PC, and we had the publisher publish it on Xbox and PlayStation. And in the end, we made about 95% of the revenue from PC, and Sanctum 2 was quite well-received. It's a good game. But then this happened, which probably most of you know. In 2014, we launched Goat Simulator, and this was the big break for Coffee Stain, and it went crazy. It was like, it was a game project, game jam thing that we just did in a couple of weeks, and once we put it out on YouTube, it just exploded. And I, I think overnight, we had 100,000 views on our channel.
We had no subscribers, and it just got picked up everywhere. So these are some examples. Wall Street Journal, I think we were on the front page with some article related to goats and stuff, and, like, this is another example of how YouTube at that point it was kind of starting to blow up. PewDiePie was in his kind of growth, and, like, all the big streamers wanted to play Goat Simulator, so we got so much visibility. This is another fun thing. We were actually one of the most pirated games as well. So this is Pirate Bay back in 2014. I guess we can debate on whether that's good or not, but I think we were quite happy at least, so I think it's a testament on how, how popular the game was.
So looking at the numbers, I just wanted to give you a little bit of perspective of, like, these game launches. Sanctum, back there in 2011, the revenue that year was about $1 million. Good for a bunch of students. Sanctum 2, I think we did SEK 2 million-SEK 3 million in total on that game in, like, the first years. And then Goat Simulator happened, and, like, it was this huge break. And we made about SEK 90 million of revenue in 2014. But then you can see the interesting thing here after that, like the, like the graph, it's quite steady.
This was when we started to get a little bit more serious about the business, and we were starting to think, like, "Okay, this is actually working out really well." And we did a lot of content updates, and we got Goat Simulator out on more and more platforms, and actually started to build the Coffee Stain that is today. So Goat Simulator had a very steady performance for, I would say, about five years, and this is kind of closing up on the point where we actually became part of Embracer. So but, you know, we came into Embracer in 2018. And I wanted to give you a little bit of a picture of how things have went since we went into Embracer.
This graph shows when we got acquired by Embracer in 2018. And we had Satisfactory already in production. It was rather far into production, but we didn't really know how well it would do. For us as developers, it was a title that I think we were really keen on making a real game, because Goat Simulator was this kind of weird, you know, making fun of games game, that no one took really serious. So it was really cool to launch Satisfactory in 2019, and it became a really big success. And it kind of makes, like, even Goat Simulator look tiny compared to it. And then, if you extract the graph a little bit further, you have Valheim launching in 2021, and it makes it even more crazy.
And in between here, we also have, which is a bit hard to see in this graph, but we also have, Deep Rock Galactic, which we launched in 2018, and that's been a very steady revenue driver, and actually growing year over year, which has been super interesting. So yeah, these are our biggest products today. They are some of the most successful on Steam, and we are gonna keep working very actively with just supporting these games. It's... They are very well received. As you can see, the review scores are extremely high. And this is one of the things we work a lot on making our games really good, which is paying off in the long term. We have... I'm gonna talk a little bit more about that in the coming slides.
And then we have this little guy, which probably not a lot of you know about. It's been a little bit undercover, but last year, we acquired one of the biggest games on Roblox, and for us, this is a very new thing. This game was developed by a super smart guy. He had worked on it for a very long time, and what we did was basically help him to build a new home for this game. So we have built a new team, which is now in Gothenburg, about 15 people working with this now. And it's starting to pick up some pace. And the idea here is to, hopefully, by supplying more content and being more active with the community, and like...
I mean, he was a one-man show, so but it's a little bit early to say how this is gonna turn out, but it's a very big game, and it's actually one of our biggest games now, both by player numbers, but revenue as well. So hopefully more about this in the future. So this slide shows a little bit of how the group looks today. I usually say that Coffee Stain is about 150 people. So we've come quite far from when we started, nine people, now we're 150 people. Like, all these teams are quite small. So they range from five to 30-ish people. And you probably know most of these companies. You have Ghost Ship there on the right side, which is a company that we worked with for some time.
When we got into Embracer, we had a minority investment and a publishing deal with them. They later became part of Embracer, and they live as a sister company to us. And they are a great example of what we try to do, where we want to empower the developers to a point where they can actually do the business themselves. And now they are actually even starting up their own publishing, and they have a really... I am super excited to see their coming games. It's they are really, really good developers. And then on the right side there, you have Iron Gate as well, the developer of Valheim, and we own a minority investment there. So they're. All right, wanted to touch a little bit on how we do things.
We do a lot of things. We're 150 people. We work with about 10 games or a little bit more, depending on how you look at it. And we have had this very big success. So, it's very hard to say exactly what we're doing, but I've tried to summarize it into a couple of points here. So I'm gonna go through them one by one. So small and independent teams, I think this is kind of the most important thing for us, is that we keep all our teams very small. And the idea here is that if we have tiny teams, we work with something very creative, everyone can be very involved and feel that they have a big impact on the products themselves.
And ultimately, it's this idea as well of if you want to build a decentralized organization, like, people have to, like, own what they're working on. And I think the only way to do that is just to empower people, a little bit similar to what Embracer tries to do with, like, empowering entrepreneurs. We want to empower developers, and, like, to add all the skill that we have acquired within Coffee Stain and share that with the people that we work with. So, with Ghost Ship, for example, they've come to a point now where they can take that and publish things themselves, and starting investing and things. And we have a very agile business approach, and this comes back even from when we started the company, but it was not very intentional at that point.
As I mentioned with Sanctum 1, it was very broken when we launched it, and that was more out of our inexperience and not knowing what we were doing. But what we did was we improved the game over time, and it actually works. And now we work mostly with Early Access and Steam as our main platform, because there you can launch a game much earlier. It can be a little bit broken, and then you can continuously develop it together with the community and the players. And that kind of reduces the risk, because you don't have to figure everything out by yourself. And I think in the end, it makes for better games. And then finally, we also usually add platforms later, so we typically don't do sim- ship.
There are some exceptions to that, but adding platforms right away adds so much complexity. So for us, it's more about we focus on the games, try to get them out quick. If they do, if they do well, then we bring them out to more platforms. And yeah, this is maybe comes back to all the things with keeping teams small, but we are a very decentralized organization, and we try to stay as flat as possible and over, you know, avoiding overhead when possible. And yeah, that's what we're gonna keep doing. So we have our challenges as well. Being this type of organization, I think some of our biggest challenges the last years has actually been, being part of a public listed company is, is a challenge.
Happy, though, that we have great support from Embracer, and before we joined Embracer, we were considering to do it ourselves. Like, and I'm so happy that we didn't do that, because then I wouldn't be involved in games at all. I struggle with it as it is, but, but we're getting through it, and I'm really confident that we can do this. And I'm a strong believer that, like, we need to find ways to allow this to... it is kind of a little bit of a problem to be this very super creative indie developer in a, in a public environment, but I think there's ways to do it. So, and we are doing it, and we're gonna keep doing that.
Then the other here is growing while maintaining quality and focus. It is super hard to grow our organization, so we have to do it slowly. We have grown a lot, though. When we joined Embracer, we were about 50 people, and now we're 150 people, over a couple of years. But now we're at the point where we are focusing a lot, and we're gonna... We need to work out more some of the processes, and like, yeah, we have felt a little bit of that that growth. It's taking a toll. So and finally, like, finding, creating the right products is super hard for us and everyone else in this industry, and it's becoming more and more competitive.
But at the same time, it's a very cool industry to be in because, like, the upside when you hit the right games is bigger than ever. So, yeah. And finally, I wanted to give you a little bit of a peek into our pipeline. We have a lot of things going on for being a rather small operative group. Coffee Stain has a couple of unannounced titles, and then you also have Ghost Ship, our sister company, that is having their own publishing. And it's some exciting time ahead of us, and I can't wait to announce more of this stuff once once it's ready, but you never know. We'll see when that happens. Thank you.
Thank you, Anton. Thank you so much. I think from Texas, we have another entrepreneur and creator online.
Yes. Hi, Lars.
Hey. Hey, Dave. You were one of the first, first entrepreneurs joining as well, not as-
Yeah
... early as Anton, but a year later, I think. So happy-
That's true, yeah.
You're taking the time to present a little bit more about yourself and Gunfire, so the stage is yours.
Thank you. Good to be here. I'm David Adams. I'm one of the co-founders and the CEO of Gunfire Games. Gunfire Games was founded in 2014. There were about, I think, 12 or 13 of us initially, and we had all worked together for many years. We worked and created the Darksiders IP for the old THQ, and we just liked working together, so we decided to start Gunfire Games to continue to work. For several years, we worked on a lot of VR stuff, so we did some titles not on this slide. You know, we did a game called Herobound. We did another game called Dead and Buried, and then one of the big things we wanted to do with our studio was we wanted to develop and create our own IP.
So the first one we did was Chronos, which was initially a VR title, although it's been later released on PC, and that was a launch title for the Oculus Rift. It did really well. It was, like, the number one selling Rift title for a while. And then we moved on and did From Other Suns, which is another original IP. Another thing we've always done with... Even though we've worked with various publishers when we were independent, we insisted on owning our own IP, so we owned all these IPs, which is really nice. And somewhere along the way, along the way because we'd been in contact with, you know, THQ Nordic, which is, I guess, before it was called, before Embracer, the name existed, and because we had worked on Darksiders I and II, they really wanted to work with us.
So we started initially, and we did the port for Darksiders II to current-gen consoles at the time, called the Definitive Edition, and that sort of morphed into us also working on Darksiders III. And this is all. We were still pretty small at this point. I think we still only had, like, I mean, at the time, 30 people, 20-30 people. But the whole time we had been working on our own IP, another original IP in the background, and, you know, as a studio, we really specialize in first-person, action-adventure, shooters, RPGs, you know, having worked on Darksiders, even Chronos and other VR scenes.
You know, we wanted to maintain a certain style to our games, and it gives us a certain amount of synergy when we're working on projects that we tend to work on things along the same lines and within the same genres. So the next probably two weeks after we got acquired, we got acquired in 2019, August of 2019. I think it was two weeks later that Remnant I came out, which we had been working on for maybe two, 2.5 years prior to that. So Remnant I came out, did really well, a lot better than we - I mean, we, we'd hoped it would do well, but we weren't sure, so we were really surprised by the perception of that.
Came out strong, was number one seller on Steam, even in our early access period, and we went on to make several DLCs for that game, culminating in a pretty big expansion pack called Subject 2423. And pretty much from that point, from acquisition in 2019 until now, really, we were working on Remnant II. So Remnant II was kind of what we had always wanted to do with Remnant I, because we partially funded Remnant I ourselves, and, you know, it had a pretty, a relatively small budget. It was published by Perfect World, and so was Remnant II, which later got acquired by Embracer, so that was convenient that our publisher came under the same umbrella as Gearbox.
And you know, Remnant II came out this past July 25th, and it's so far pretty much exceeded all our expectations, did really well. Between the two titles, we've sold around 7 million copies. It's got a combined revenue of $200 million. Remnant II hit a peak of 110 concurrent users on Steam and was number one on the sales chart for quite a while until Baldur's Gate III came out. But yeah, we've been really proud of the game. It's done really well, and we continue to support it over time. We've got three major DLC packs already announced for the game that we're well underway working on.
We've done a few quality-of-life patches already, but we plan to continue to support and update the game over time and really see where we can drive the install base and the player base by continuing to support the game. But that's it. That's us in a nutshell.
Thank you so much, David.
Thank you.
It was great to have you here, and thank you so much, and please send best regards to the team and thank you so much for contributing to the group.
Thank you, Lars.
Thank you. So, with these presentations, I would like to give some final remarks before heading over to Q&A. So to wrap up, it has been a challenging year, yet a very eventful year where we took many strategic steps to build a stronger and more resilient group. This has been made by hard work from our great people, and for that, I would like to say thank you. It's, however, the most challenging time of Embracer's history, and we are now adjusting to a new reality. We need to continue making tough decisions following the restructuring program initiated in June, and it's challenging time for everyone impacted. But it's important to remember that it's needed, and we are becoming a leaner, more efficient company, focused on creating world-class entertainment on a global market for the long term.
The long-term ambition for Embracer is to continue to build something significant and long-lasting, and to do it together with successful entrepreneurs like David and Anton and other creators. We have a solid foundation with predictable, profitable, and cash-generative businesses, including a roster of renewed PC console franchises that gradually grows stronger. The demand for content has never been greater, and we are well positioned to leverage on that demand. We have fantastic people and many world-class IPs. We aim to demonstrate the growing earnings power of this combination over time. We have had a great start of this fiscal year that gives me and the management team great confidence to deliver what we set out to do. Looking ahead of this year, we will still see growth for the years to come, driven by a more focused pipeline of investments.
To shareholders, I want to make clear that we will continue the focus on delivering long-term growth of both adjusted earnings per share and free cash flow per share. I would like to send my thanks to all our shareholders, employees, customers, and business partners for the support and contributing to the continued success of Embracer.... Thank you. Erik?
All right, let's start the Q&A. The physical audience will be able to ask questions as well. I think we have a microphone somewhere, but I thought I'll start, and I would start by asking you to summarize the year, but you just did that very good. So maybe I'll ask you the same question, Johan: how would you summarize this past year from your perspective with the IFRS conversion, change of listing, and all those milestones?
Yeah. No, I think it's... I mean, obviously, it was a big project for the year, and I'm very happy that we have done it. I'm also happy that it's done. So, and obviously, a benchmark improvement and a very good opportunity for us to improve in the areas that are relevant and highlighted in the process of uplisting. But a lot of hard work involved, and I also thank everyone that has been participating in the project.
I think hard work is good work, good word.
Yeah.
Yeah. So any questions from the physical audience to, to begin with? Raise your hand. We have a raised hand over here.
Hi, Lars. My name is Fredrik Berghel, and I'm quite interested on this Adjusted EBIT, you know? Almost the whole Adjusted EBIT is the EBIT. So what is the logic behind this measurement now when you are IFRS, and it's also very close to EBITDA? Can you explore and explain to me, exemplify maybe what's in these SEK 6 billion?
Thank you, Fredrik. Appreciating your coming to the AGM. Great to have questions. Johan, would you like to start, adjusted EBIT? Why not just EBIT?
Yeah, I think, well, to get a good, good understanding for why we are presenting alternative performance metrics, APMs, which Adjusted EBIT is, it is described in our quarterly report more in detail, as well as in the annual report. To keep it short, it is, it is what we internally use to measure operational profitability of entities within the group. The main reason for it, for why it is needed is that in an entity that makes a lot of acquisitions, you will have t he accounting becomes quite complex, and it's difficult to see the operational performance in the reported EBIT. So basically, what this, what we do is that we remove non-operational items from EBIT to arrive at the Adjusted EBIT, to give a better view of the underlying operational performance.
All right. Perfect. My turn. Should we talk some PAYDAY, maybe? I think it's less than an hour until release, actually. And it's a very well-anticipated game for Embracer and for the PAYDAY community as a whole. And I'm just curious how your expectations have trended over the last few months going into the release today.
No, I think PAYDAY 3 is one of, you know, one of a handful, important titles for the year. You know, we had 2 so far, Dead Island and Remnant II, that has been performing well for us early in the year, which is good. Now, we have PAYDAY 3, fairly early or mid-year. You know, I feel confident that, you know, it will be a good experience, but this is a live operated games with a lot of content and, you know, service structures and. So I know that there will be, you know, a game that will be built over long time. So I hope, and I believe, a lot of players will enjoy the game tonight. I got some early data.
I'm sorry I can't share the data on pre-orders and so on, but, you know, I, I feel confident that it would deliver. Now, it's important that Starbreeze and, and, and our publishing team continues to work on this, and bring more content, and listen to the community, and, you know, do all, do, do all that. But obviously, they've been doing this before with PAYDAY 2. So if there is anyone in the world being able to ship this and successfully, it should be Starbreeze.
And it's interesting that you have with PAYDAY, you have a Game Pass deal with Microsoft-
Mm-hmm
... on day one, and we could talk about that, but I think it's also a very good segue into a discussion on the broader market. We heard some insights here previously, but I think if we could talk from the platform provider's perspective, being Microsoft, Sony, Epic, and so forth. Besides the consumer sentiment weighing on the market, how do you perceive these platforms' investment appetite in, you know, when they need to secure their content? Have they affected this software market in any way?
Well, it was a bit of craziness, a few years ago, you know, with platforms signing, you know, a lot of titles and and potentially titles that, you know, didn't have the success rate as a standalone game, justifying that, you know, the price some platforms paid. I wouldn't say we used that to a very high degree. Obviously, we had a few titles, but I think it's for pretty different kind of companies, partly. But in general, there is a great demand from consumers, and there is many platforms that the big companies, platform companies, are trying to build, and they need content, you know. Would it make sense for us to, you know, to sign more content onto these services? I think we need to look in each and every, you know, game.
Is it suitable for the audience, and so on. So now on, on PAYDAY 3, you know, I have full confidence in Klemens and the PLAION and, and Starbreeze in their analysis of if this is right for PAYDAY 3. I'm sure it will bring a lot of players, which is good in, in a game like PAYDAY, so.
And another change quite recently was Epic changing their exclusivity, call it arrangement, where you, in such a case, would get 100% of the revenues the first six months, I think. You've used Epic as a partner a few times. Have you had any early reflections of this change?
Yeah. Well, I think that's a longer conversation, you know. In the end of the day, I think it's good with competition to Steam as well, because it, you know, put them on their toes to deliver the best experience. Obviously, we would like to pay less, less fees to platforms. I mean, in reality, we are paying more fees to platforms than we spend on games development every year, and if you just think about that number, it's crazy. So there is margins with the platforms that I would preferably have within, you know, building more games and, and, and, and some more margins, but... And that's, I think, is great that Epic is there, trying, trying to, to build a, a competitive platform. At the same time, you know, consumers are, are, are perhaps looking at things differently.
You know, that they want to, they want to be able to pick their platform. So there is many different perspectives in this, and I don't wanna go too deep into that, but-
Mm
... I think competition in general is great.
Mm. And w e have a question from the, from the stream, and I'll just read it here. "But regarding your slightly more centralized green-lighting process of game projects going forward, that you talked about a few months ago, are you also adjusting your risk profile in how much development time you spend on trying innovative features or experimental elements, or will this be unchanged on, on an aggregate level?
Well, I prefer to use the word group-wide rather than centralized, because it won't be a centralized thing here in Karlstad. It would be a group-wide effort. But in general, I think it's good that more eyes are looking at investments and games, and also give inputs to the teams and, you know, use their combined intelligence to making sure that we are investing and putting perhaps more effort into certain games, and then we might be deciding not to do some games. In the end of the day, I believe that will bring greater products to the consumers and ultimately a better financial return as well. You know, I'm sure there will be very high creativity that remains within the groups, you know, Anton and many, many others, David here. So I am not worried about the level of creativity will be damaged.
Hmm. And on the topic of the restructuring, it's been about three months since you announced it, and I assume it is a tough process, and I'm not sure if this is the right word to use, but are you satisfied with the progress so far?
It's definitely the wrong word to use. It's tough. You know, it's tough from many, from many, standpoints. You know, obviously. But we are determined to deliver on this. But the way there is, is different, you know. Preferably, I would like to find, or we would like to find, you know, new opportunities for the employees, even if it's outside of Embracer Group, potentially through sometimes a divestment. Or that we are working with partners to finance some projects, so we don't have that CapEx, and we get that cash flow, so we could still have the employees. But ultimately, we are making decisions to either restructure, to downsize some teams, or and there will be a few cases of closures.
Mm.
But it's difficult, and it, you know, it takes time. But we announced this in June, and now we are in end of September, and we are confident to deliver on the targets we set out for end of the fiscal year.
Mm. And thinking about the long term, you have your debt target by March of next year. But long term, I guess, hypothetically speaking, do you see Embracer as a company that will utilize debt at all, arguably as a function?
I think it's wrong by me to set out any new information regarding that, but I don't think there's a secret that I'm quite conservative to debt in general. But the group has a debt target, which is one time forward-looking, adjusted a bit. Correct me if I'm wrong here, Johan.
No, that's correct.
So and we will, you know, we will reach that roughly by end of this fiscal year. But in general, I don't think you should carry too much... In this industry, in general, you don't see too much of debt. And in general, I don't think you should carry too much debt as a gaming company.
Mm
... because of the volatility of game releases sometimes, which is one reason.
And it come, when it comes to these other initiatives needed, such as potential divestments or publishing agreements, when you need to balance sort of getting good commercial terms with the timeline, is that a sort of trade-off there?
Yes. It's sometimes difficult, and sometimes, sometimes it's you need, you need to put deadlines and work against those deadlines, and if there is nothing on the table, you ultimately need to make a different decision. I think on the divestment side, that there is a, there is a strong, vibrant market with many many active players, both financial sponsors and big industry players. But it's easier to run proper processes for, I would say, more high-value assets than smaller assets.
Mm.
And I think that's what we have experienced now as well.
Great. I think we are a bit behind schedule, so I'll see if there are any final questions from the audience. Here.
Hello, hello. My name is Fredrick, and I have a question about the financial target that you set. You realized that you made a mistake with setting, like, a forecast for the sales the last year, and isn't this like a similar forecast for the cash flow, and isn't it a risk that you make the same mistake?
You mean the net debt target-
Yeah
... we put out? Well, you can debate whether it's a mistake or not, but we had obviously the conversations around it, if it makes sense to be very firm on a net debt target. It has some pros, it has some cons. And and I've been hearing from shareholders, "You don't really need to reach that debt level, and why do you put that target?" At the same time, I think it drives the whole organization against one goal here, to reduce the net debt to a certain target, and there is different ways to achieve that. And you know, as I state today, you know, we feel determined and confident in that.
But to your point, you know, we started out as a public company without providing guidance and forecasts. And if you ask me, you know, philosophically, long term, is it easier to manage a company without having such promises? Yes, in theory, it would be, because you are more flexible. At the same time, you have analysts like Erik calling you or us every day, chasing, and when you have 19 of them, it's becoming very complex. And as a public company, you don't own that expectations anymore. So it's a complex matter.
Isn't it a risk that you make short-term decisions if you have such a thing?
I wouldn't say necessarily short term. We, we decided, as you noticed in July, to raise some more capital in order to avoid bad short-term decisions during this restructuring phase. That was one reason. So I think we, we have, we have what we need to make the right decisions. I, I, I think that's that's my view on that. So we are not in a situation where we need to make stupid decision that destroys, you know, a lot of shareholder value. And, and when we are in the end of this program, I, I, I would like to. I'm happy to answer questions, you know, why did you do that, or why did you do that? There is a lot of color, and sometimes the perspective in media, and especially on social media, is a bit, but people doesn't have all the information.
All right. A final question from me then, before going to the, the rest of the AGM. But I think it's an interesting one here, so buckle up. At the AGM two years ago, you mentioned transmedia several times, and a few months later, you acquired Asmodee and Dark Horse, among other things. And last year, you mentioned cost of capital a lot of times, and a lot of things have happened since then. So are there any words you would like to emphasize extra today?
Well, it's not for me to, it's not for me to disclose that word. We are trying not to give any new information today that we should not be giving, you know. Obviously, our quarter reporting is, that's the day we're giving new information.
Fair enough. Okay, I think it's part of the second part of the AGM.
Thank you, Erik.
Thank you.
Thank you.
Thank you.
Thank you very much. Okay. Oh, Burken. Put it here, so you can reach it. Okay, we have now come to item number eight on the agenda. That is the presentation of accounting documents. The annual report for the financial year 2022-2023 has been published on our website since June 21st, and it's also been available here today. And I wonder if we have any questions about the annual report? No. Then I would like to ask the company's main responsible auditor, Johan Eklund, from EY, to present the auditor's report. Welcome, Johan.
Thank you. Not so fancy slides, perhaps. Okay, thank you, Kicki. My name is, as Kicki said, Johan Eklund, and I am the main responsible partner, representing EY. I've been the auditor for Embracer Group during the last year. I thought I'd first give you a short briefing around our audit work that we have performed, and then I will take you through the most important parts of the recommendations that actually are in the audit report for you at this AGM. So, we have performed the audit according to international standards of audits, and also standards, and we have also performed it according to Swedish audit standards. The group audit has been coordinated through a primary team here in Karlstad and Stockholm.
And the primary team work has been mainly to give instructions to and receive reporting from our different group entities around the world. And of course, handling a lot of central figures and issues. And as you have heard earlier here, we have had interesting issues during the year. For example, the transfer to IFRS is one part that we have spent a lot of work around. And we have also had a lot of meetings, both with the group management, of course, but also with our component audit teams around the world. We have also had meetings and attended meetings with the audit committee and the board.
And as you also have seen, related to what Johan and Lars has presented here earlier, we had a balance sheet and an income statement that are having a lot of interesting position in it, and we have done a lot of work around it. And two of the main parts has been described in the audit report as key audit matters. And one of the key audit matters is related to accounting for business combinations. And this relates, of course, to, for us as auditors, to evaluate the processes that Embracer has around the accounting for this.
And we also examine purchase agreements, we test the purchase price allocations, we evaluate the method and models that are used, and we also assess the material assumptions and judgment that the company actually do. And for this, we use for also internal expertise. The second key audit matters that also are stated in the annual report, or the audit report, is the valuation of goodwill. And and the important part there is of course, the impairment test. And audit procedures related to that are strongly connected to that we evaluate the process around the impairment test that the company has. We evaluate also there the methods and the models that are used. We assess the material assumptions and judgments that the company does, and we also review sensitivity analysis.
So based on the audit work performed, we have issued this formal audit report that you have had been published in June. In there, you can see two specific recommendations to this AGM. And first, we recommend that the general meeting adopts the income statement and balance sheet for both the group and the parent company. And second, we also recommend that the annual meeting appropriates the profit in accordance with the suggested proposal, and also that the members of the board and the managing director shall be discharged from liability for the financial year. And in addition to this, we have also examined the ESEF report that's new for Embracer this year. Our opinion there is that the ESEF report has been prepared in a format that enables electronic reporting.
Then, outside the ordinary audit report, we have also, on page 71 in the annual report, released our audit opinion regarding the sustainability reporting with no remarks. And on page 93, we have also released our audit explanation of the corporate governance statement, also with no remarks. So that was the total.
Great. Thank you very much, Johan.
Yes.
Do we have any questions regarding the audit report from the audience? Okay. I then find that the annual report and consolidated accounts, as well as the auditor's report, have been presented. Thank you. As we heard, the auditors support that the annual general meeting approves the presented income statement and balance sheet, as well as the consolidated income statement and consolidated balance sheet. Can the annual general meeting approve the presented income statement and balance sheets?
Yes.
Thank you. The board of directors' proposal regarding the allocation of the company's results is included in the annual report and has been included in the notice for the meeting as well. The board proposed that no dividend shall be paid for the financial year 2022-2023. The board proposed that the funds available at the annual general meeting of approximately SEK 59.6 billion shall be carried forward. Does anyone want to comment on the board's proposal? And as we heard, the auditors support that the annual general meeting resolves to allocate the company's profits in accordance with the board's proposal. Can the annual general meeting resolve that the approved result is allocated in accordance with the board's proposal, which was also endorsed by the auditor?
Yes.
Great. Thank you very much. We have previously heard that the auditors support discharge from liability. I would also like to inform the Annual General Meeting that the Board members and the CEO may not participate in the resolutions concerning each of themselves. Can the Annual General Meeting, in accordance with the auditor's endorsement, approve discharge from liability to the directors of the Board and the managing director for the past financial year?
Yes.
Great. Thank you very much. Thank you. Considering the votes provided in advance, we can note that the resolution is passed with sufficient majority. Then we have now come to the item where we should determine the number of Board of Directors and auditors, fees to the Board of Directors and the auditors, and the election of Board of Directors and auditors. And again, the proposal has, the proposals have been available, available since the 21st of—no, the August 22nd, actually, on the company's website. Also, it was included in the notice, and it has been available here today. So by that, I would like to ask our Chairman of the Nomination Committee, Per Fredriksson, to present the proposals for all these items, and then later we will manage to vote on all of them together, if that's okay. Good. Thank you.
Hi, everyone, and I appreciate to be here. I realized, listening to David and Anton, that this is the more formal and may be boring part of the AGM, but still bear with me. I will go through the Nomination Committee's proposal and recent statement. In accordance with the principles for the Nomination Committee, which were established at the Embracer Group AGM last year, the Nomination Committee shall consist of representatives of the five largest shareholders registered in the register of shareholders held by Euroclear Sweden AB at the end of November each year, with the chairman of the board as an adjunct to the Nomination Committee.
The nomination committee in respect of the AGM, this AGM, has been comprised by myself, appointed by Lars Wingefors AB, Michael Levy, appointed by S3D Media Inc., Ola Åhman, appointed by Savvy Games Group, Lennart Francke, appointed by Swedbank Robur Fonder, and Henrik Olsson, appointed by Canada Pension Plan Investment Board. Chairman of the board, Kicki Wallje-Lund, has been adjunct to the nomination committee, and I have been chairman of the nomination committee. A few words on the work we have done. Ahead of this AGM, the nomination committee has held 12 recorded meetings and has had regular contacts in between. 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 and interviewed all individual members of the board. The task of the nomination committee, as you might know, is to submit proposals to the AGM concerning the election of chairman of the general meeting, the election of members of the board and the chairman of the board, the election of auditor, as well as remuneration for the chairman and other members of the board, including remuneration for committee work, as well as remuneration to the company's auditor. In respect of the general meeting, 2023, the nomination committee has unanimously resolved to submit the following proposals. Now, I relate to item 10, 11, and 12, as Kicki said. The nomination proposal for candidates for the post of chair and other directors of the board.
The nomination committee proposes the following: that the board shall consist of eight directors without deputy directors, that Kicki Wallje-Lund, Lars Wingefors, Jacob Jonmyren, Cecilia Driving, and David Gardner shall be reelected, and that Yasmina Brihi, Cecilia Qvist, and Bernt Ingman shall be elected as new board members, and that Kicki Wallje-Lund is reelected as chair of the board. Our reasoning behind this. In preparing its proposal for the board, the nomination committee is focused on strengthening the board as a whole, paying particular attention to its composition and competencies with respect to the company's strategic position, development, international operations, governance, and financial controls. The nomination committee has also taken into account the board's need for versatility and breadth in terms of skills, experience, and background, while maintaining the continuity in the work of the board.
The nomination committee has applied rule 4.1 of the Swedish Code of Corporate Governance as diversity policy, entailing that the board of directors shall, with regards to the company's business, phase of development, and other relevant circumstances, have an appropriate composition of board members elected by the general meeting that collectively display diversity and breadth in respect of skills, experience, and background, and strive for an equal gender distribution. As you might have noticed, half of the proposed board members are women. In addition, the nomination committee has assessed the independence of the board members. The nomination committee proposal regarding the composition of the board meets the requirements of independence as stipulated in the code.
In preparing its proposal, the nomination committee has considered that the majority of the proposed directors are to be regarded as independent in relation to the company and the executive management, and that at least two of the board members who are independent of the company and the executive management shall also be independent in relation to the company's major shareholders. Furthermore, no more than one elected member of the board may be a member of the executive management of the company or a subsidiary. That is in accordance with rule 4.3 of the code. Consequently, Erik Stenberg and Matthew Karch are thanked for their contributions within the board of directors. And the new board members proposed for new election, they are Yasmina Brihi, Bernt Ingman, and Cecilia Qvist, and they will be presented shortly.
I move on to item 11, which is proposal for fees and other remuneration. The nomination committee proposes that the level of remuneration for the board, excluding remuneration for committee work, shall remain unchanged and be paid with a total of SEK 6.3 million, of which SEK 2.1 million is remuneration for the Chairman of the Board of Directors, and SEK 600,000 to every other member of the board which are not employed by the company. And in addition, the nomination committee proposes remuneration for work in the Audit Committee shall remain unchanged and will be paid with SEK 275,000 to the Chairman of the Audit Committee and SEK 175,000 to every other member of the Audit Committee.
Remuneration for work in the Remuneration Committee shall remain unchanged and be paid with SEK 150,000 to the chairman of the Remuneration Committee and SEK 100,000 to every other member of the Remuneration Committee. Our reasoning behind this: the Nomination Committee has done a thorough benchmark of remuneration levels from a Scandinavian and international point of view. Swedish remuneration levels for board assignments are relatively low from an international perspective. The Nomination Committee decided not to adjust existing levels of remuneration for the upcoming term at Embracer Group. However, the Nomination Committee advises Embracer Group and the future nomination committee to initialize a review, to initialize a review of future remuneration structure in anticipation of the AGM 2024, and to consider a compensation structure that includes higher levels of remuneration and the requirements, possibilities for board members to receive shares in the company.
And then in the relation to item 12, proposal for election and remuneration for company auditor. The Nomination Committee proposes that the registered audit company is appointed as auditor until the end of the next Annual General Meeting. Further, the Nomination Committee proposes, in accordance with the Audit and Sustainability Committee's recommendation, election of the registered audit company, PricewaterhouseCoopers AB, as auditors in the company for the period until the end of the next Annual General Meeting. PwC has informed that authorized public accountant, Magnus Svensson Henryson, shall be the auditor in charge. He's also present here. Remuneration for the auditor shall be paid in accordance with the approved invoices. That is what we have in relation to items 10, 11, and 12. However, I'd like to also express my thanks to my fellow members of the Nomination Committee.
Thanks for your availability, hard work, and for fruitful discussions. Finally, this is a sort of a wish from my personal side, but also a piece of advice to the five largest shareholders of Embracer Group in the future. There is still one thing for you to improve, and that would be gender distribution of future nomination committees. Thank you very much.
Thank you very much, Per. Just before we continue, I will give you just a short presentation of the board's work during last year. We did have 86 recorded meetings last year. It's quite a lot. Lars always said he wanted an engaged board, and I think he got it. Now, last year, you know, we have a what we call an annual board calendar, where we have all the different tasks that a board must, that the board must perform during the year. But the last year, I would say, it was a very an extraordinary year, to say the least. Now, so we did have 86 recorded meetings, but only 15 of those were physical or video conferences, and 71 per capsulam. Now, almost...
I think it was, I know it was 64 of those 71 that all related to acquisitions that we had made. But still, it's quite a lot of meetings taking place. Now, we did have also 11 Audit and Sustainability Committee meetings. That's also more than normal. We-- that is, of course, also extraordinary, but it was because of the IFRS conversion and the listing change that we did last year. Now, and four Remuneration Committee meetings as well. The process for us to become listed on the regulated market was a huge, I mean, it was a big milestone for us. But if we keep in mind that it was Nordic's biggest listing change, it was, and also the largest IFRS conversion ever, you can imagine how much time this took for us.
Not to talk about Johan and his team, and also from all the operative groups, that they were also very much involved in the task to make this happen. Now, just one example of all the things that we went through during this process. These are the things that are listed here, are the things that happened during this process. I mean, we got three new operating groups. We increased the headcount, as you see, with more than 6,000 people. We made 27 acquisitions since start of this project. And, of course, the IFRS conversion was successfully completed, just that. We had 120 milestones completed in the different work streams, and thousands of controls that were implemented. And there were seven reviews performed on Embracer during this period of time. As you see, they're listed here.
And the board, we were more or less involved in all these activities. Now, of course, also because of the macroeconomic conditions, the geopolitical changes and all that happening, we also had to adapt to this new reality. So focus was also on all the things that you see here on the list. And those were, of course, we wanted to improve our businesses, and we spent a lot of time on that. Especially if you look at... We have talked a lot about the targets we have set up for project, for the restructuring project. I mean, it relates very much back to these things that we started to work on during the year. Now, also, when we look at the regular board meetings that we have, there are a lot of reporting that we receive from management.
and also one thing I would just like to highlight here that I think adds a lot of value to the board, is actually the reports and the information we get from all our operative group. What's happening in each and one of the operative groups. There is so much information that we get in these reports, and those are also the most exciting ones, I would say, because that's what's really happening out in the group. Also, ordinary course of business is, of course, we have our strategy reviews. We have had a number of acquisitions and two transformative acquisitions, as you probably recognize here. And of course, the M&A process is a well-established part of our governance model.
We continue to focus a lot on our on our corporate governance, and also on sustainability, as it is an integral part of our strategy of the Embracer Group. And of course, risk management, internal control, lots of focus on that as well. We have spent a lot of time on the issues relating to the war in Ukraine, and also, as you very well know by now, on partnership deals. That was the part, the description of the work in the, in the board during the year. Now, to come back to the decisions we have to make now, it is proposed that the board of directors shall consist of eight directors without any deputies, and that the number of auditors shall be one registered audit firm.
It is further proposed that the remuneration to the board of directors shall be SEK 600,000 to each non-employed director. SEK 2.1 million to the chair of the board. SEK 175,000 for members of the Audit and Sustainability Committee. SEK 275,000 for members of the Audit and Sustainability... Did I say that already? There's so many lists. No. SEK 275,000 to the chair of the Audit and Sustainability Committee. SEK 100,000 for members of the Remuneration Committee, and SEK 150,000 to the chair of the Remuneration Committee. It is further proposed that the remuneration to the auditor is to be paid according to approved invoice.
And it is proposed to re-elect Cecilia Driving, David Gardner, Jacob Jonmyren, Kicki Wallje-Lund, and Lars Wingefors. It is also proposed to elect three new directors: Yasmina Brihi, Bernt Ingman, and Cecilia Qvist. Matthew Karch and Erik Stenberg do not run for re-election. Kicki Wallje-Lund is proposed to be re-elected as Chairman of the Board of Directors. And finally, it is proposed to elect the registered audit firm, PwC, as new auditors for the period until the end of the Annual General Meeting, 2024. PwC has announced its appointment of Magnus Svensson Henryson as main responsible auditor. Now, I wonder, are there any questions regarding the proposal? Proposals. No. Thank you. Now that we then have heard the proposals for item 10 to 12, I will ask the meeting to approve all these items together.
Before we proceed to voting, are there any other proposals for item 10-12? Okay, can the meeting then resolve in accordance with the proposals?
Yes.
Thank you. I therefore find, the directors and auditors, and fees to each one of them, have been approved in accordance with the proposals presented. I also would like to inform the meeting, who our Audit and Sustainability Committee and Remuneration Committee will be composed. The Audit and Sustainability Committee, will be chaired by Bernt Ingman, and, Jacob Jonmyren and Kicki Wallje-Lund will be members of the committee. The Remuneration Committee will be chaired by Cecilia Driving, and, together with David Gardner and Yasmina Brihi, will be members of the committee. Before we go to the next item on the agenda, I now can say a warm welcome to our new members of the board. And also, I would like to welcome our new main responsible auditor, Magnus. Magnus is here with us.... So that's Magnus.
and of course, it's very important as well to say a big thank you to our previous main responsible auditor, Johan Eklund, and to your whole team, Johan. I have to say, we have all been extremely impressed and thankful for all the hard work that you always put in to support us and help us. I would say day and nights, and weekends sometimes. Thank you so much, and I think if you come here, I think Johan maybe would like to say a few words or?
Oh, very short. Thank you very much,
Thank you
Johan. It's been a pleasure, and here you have some nice flowers. Thank you.
Thank you, Johan. I also would like to take this opportunity to turn to Matt, Matt Karch, that you not run for re-election. Well, Matt is up, unfortunately not here today, but I do know that he's watching us, so I'm looking into the camera now. And I would like Matt, on behalf of the board, express our great thanks for your contribution, and also for your deep passion in our business. And you have always created a lot of dynamic in the board, and you have and also to say, that's to say the least. And it will be so extremely boring when you're not there. We will miss you a lot, but you're still with us in the company, so we will continue to work together in one way or another. Thank you, Matt.
Now, I would like also to turn to Erik. He is not here today. He couldn't make it, unfortunately, but I do know that many of you here today know Erik very well. Erik is the co-founder of Embracer, together with Lars, and so he's been with us on this journey from the very start. Now, it would be difficult to imagine a board meeting without Erik's smile and wits, you know. He had a great humor, and he also contributed a lot with lots of his experience and competence, of course. So, I know that we will be many that will be missing him deeply. Also, out in the organization because he always traveled a lot and met with many of our members in the whole Embracer Group.
Now, the good thing is that, Erik will actually be a senior advisor to us and to the board, so that we could continue to work with him or to use his experience going forward when needed. Okay, Per, I think maybe you would like to come up again and ask our new board members to come and present themselves.
Please, we can have all three of you at the same time, I guess, just to make it do it quicker. It's my pleasure just to present you, and let's take... You can start, Cecilia.
No, I think we have to be very diversified here, so.
Okay.
We do it too.
You can do it.
You go first. You go first.
Whatever way you like, please.
Okay. You have got quite a lot of information regarding me earlier, so maybe I should just add some things here. I've been involved in a number of companies as a CFO. First of all, it's seven different companies which were not listed, so it was private companies. Then I had the pleasure to introduce or be responsible for introducing Munters. I hope you know what Munters is, what kind of company it is. It was a part of the Incentive Group, and we put that on the stock exchange. It was very interesting and a very nice company to work with. And after that, I think I was six years in Munters.
After that, it was the next time to put the company in the stock exchange, and that was Husqvarna. And as you know, Husqvarna is making boy toys, and it's very, very fun things. I have a garage up in my summer cottage, which is full of Husqvarna items. During the last few years, I've also tried other, like the competitors, Stihl and Ryobi, and these kind of companies. Then I have, during a number of years, been engaged in different boards, never with 86 board meetings during a year, I can assure you that. And I hope I'm not going to travel here 86 times during the coming year, but we will see.
The companies which I've been involved in, which has been on the stock exchange, is SCB-... which is a service company for Bostadsrättsförening. I don't really know the, I don't know if there is an English word for it. Beijer Ref, which I was in from 2006 - 2021, and during the last seven years as a chairman, and before that, as a board member. Then Micro Systemation, you know, the company which is, if you are doing something bad, they will take or they will use Micro Systemations things for taking out the information from from your from mobile phone.
So that was an interesting place to be in the board there. It's a lot of things which happens on that side throughout the world. And then another company was Pricer. I was earlier in Pricer between 2014 and 2001. And then I was during four years at the end there, I was the chairman. I was out of the board for two years, but now they asked me this year to come back as a chairman, and I've started that job, too. And then the last company, which are publicly quoted, is TagMaster, which I also are the chairman of the board there. So that's my background really on this side.
Thank you. Quite impressive, I have to say. So, Cecilia Qvist is my name. First and foremost, I wanna say thank you so much for this opportunity. As a Swede living abroad, I keep quite a lot of track on the global brands that I think will make it. I'm super excited to be part of Embracer and the future. I have had the fortune to work with a few brands out there that have had incredible journeys, both as listed assets and non-listed assets. So I'm really looking forward to hopefully contribute as we move forward here. Thank you.
Hi, everyone. I'd like to echo that. Thank you so much for the opportunity. I'm both honored and very excited to be here with you. I'll maybe give you a bit about my professional background. Most of it is captured here. So I started out in strategy consulting, at the time where I just wanted to discover as many industries and businesses as possible. Spent about six years there, and then after my MBA, decided that I wanted to discover the more fun side of the business world. So I joined WPP, in their marketing fellowship program. It was supposed to be a three-year program. I sort of got interrupted halfway, by what looked to me like a small search engine, and I met the team, and I actually loved the team.
I often realized that the decisions I make really have to do with the people that I, that I meet, and that's very relevant to the people I've, I've met as part of Embracer. And so I loved the team, I loved the culture, joined Google, and I ended up spending over 16, almost 17 years, building and scaling, high-growth businesses, across Europe, the Middle East, and Africa. And the businesses spanned, hardware, software, apps, e-commerce, as well as, you know, across mobile, fitness, smart home, gaming. You may recognize some of those businesses, so they include the likes of Android, Chromebooks, the Chrome browser, Google Play, Fitbit, Pixel, Nest, and, and Stadia. So, so that's my, my background in terms of where I've been.
In terms of the skills that I have, I have obviously deep experience in tech, and I've got experience in product, strategy, marketing across all the disciplines of it, and partnerships. As it says there, I've got quite a lot of experience building and scaling organizations, transforming cultures, even especially in difficult times, and managing and leading across large, diverse, complex, decentralized organizations with silos, spanning geographies. So that's me on the professional side. In terms of my personal side, I am born and raised in Lebanon. I've lived in France, the US. I'm currently based in London. I love skiing, I love swimming. I love hiking, and I have a slight addiction to sci-fi, but that's maybe oversharing a bit, so I'll stop here.
Thank you very much.
Thank you.
Thank you very much, and good luck.
Okay, Per?
Yep.
I think you have to tell us a little bit about the principles for the nomination committee.
Yeah. That's item 13, then.
Yes, exactly. Yeah. Oh, now you again. Sorry.
The nomination committee has proposed that the annual general meeting resolves to adopt principles and instructions for the appointment of a nomination committee. Only minor adjustments, as you might have seen, are proposed, and the proposal has been included in the notice for the meeting and has been available on the company's website prior to the meeting, and also has been distributed here today. I therefore don't intend to go through it in detail. Are there any questions on this? No.
No question. Can the meeting then resolve in accordance with the proposal? Great. Thank you very much. Only a few more items to go now. Number 14: The board of directors has, after recommendation from the remuneration committee, proposed that the Annual General Meeting approves the remuneration report. The proposal has been included in the notice-
... for the meeting, and it has been available on our website. So I will not, I will not intend to go through it here in detail. In this context, I would like to point out that the auditor statement regarding guidelines for remuneration for senior executives are available here today, and has been available as well on our website. In addition, the current guidelines are kept unchanged and will, unless adjusted in the future, remain in force until 2026. Are there any questions regarding the report? No. Can Annual General Meeting resolve in accordance with the proposal?
Yes.
Great, thank you. Number 15: the board of directors has proposed that the annual general meeting shall resolve on authorization for the board of directors to issue shares, convertibles, and/or warrants. The proposal has been included as well in the notice of the meeting and on our website. So therefore, I do not intend to go through this either in detail. It can be noted that the authorization may comprise a maximum of 10% of the total number of shares in the company per day when the authorization is first used, i.e., based on the number of shares today. How many?
Do you want me to say it?
Yes.
Okay, the numbers guy. 100 million, 133 million, 944,000, 860 B shares.
Thank you, Jan. Are there any questions regarding the proposal? No. Can the Annual General Meeting resolve in accordance with the proposal?
Yes.
Considering the votes provided in advance, Jan, can we then note that the resolution is passed with sufficient majority of 2/3 of the votes cast and present at the meeting?
Yes.
Yes. Thank you. I'm now in charge of this session, so I learned. Number 16: the board of directors has proposed that the annual general meeting shall resolve on authorization for the board of directors to repurchase own B shares. The proposal has been included in the notice and have been on our website as well. So I will not intend to go through these details either. It can be noted that the authorization may be made up to a maximum number of B shares that the company's holding of own shares corresponds to no more than 1/10 of all shares in the company. Do we have any questions regarding the proposal? Can the annual general meeting then resolve in accordance with the proposal?
Yeah.
Great, thank you. Considering the votes provided in advance, we can note that the resolution is passed with sufficient majority of two-thirds of the votes cast and present at the meeting. The board of directors has also proposed that the Annual General Meeting shall resolve on authorization for the board of directors to transfer own shares. And this proposal has also been included in the notice for the meeting and been on our website prior to the meeting. So therefore, I will not go through this in detail either. So do we have any questions regarding this proposal? No. Can the Annual General Meeting resolve in accordance with the proposal?
Yes.
Great, thank you. Considering the votes provided in advance, we can note that the resolution is passed with sufficient majority of 2/3 of the votes cast and present at the meeting. Well, dear shareholders, with this meeting, we can put 2022 behind us. And I would like to take this opportunity to ask Lars to come up, he's already here, to say a few final words.
Yeah.
Before-
No, well, I don't have any final words, but I would like to invite, and I guess all of you here are Swedish, but I will continue to talk English. Outside, there is a bit of drinks, I guess, and snittar. But for most, there is a complete collection of all Tomb Raider games made and the Lord of the Rings games. So please enjoy the... It's an exhibition set up in a short notice by Embracer Game Archive. So enjoy, enjoy the games. Thank you.
Thank you, Lars. And also thank you for all participating in our annual general meeting. And of course, we hope to see you here in sunny Karlstad next year again. So if, as we have no other questions, I'm hereby declare the meeting closed. Thank you.
Thank you, Kicki.
Thank you.