Hello, and welcome to Embracer's Annual General Meeting 2024. My name is Erik Larsson, Equity Research Analyst at SEB, and I will be the moderator this afternoon. As for the agenda, I will hand over to Kicki Wallje-Lund, Chair of the Board, here in just a second, which will be followed by some presentations and a market update, including a presentation of the Embracer Games Archive. Finally, we will have a Q&A session before wrapping up the AGM. So with that said, I leave the word over to you, Kicki.
Thank you. Dear shareholders, once again, I would like to welcome you all to Embracer's. I said it last year, but I will say it again, it means a lot to us, all of us that representing Embracer, to have you all here. What I did say was that last year, I did say, and I would say it again, that it means a lot to all of us representing Embracer to have to get the chance to meet with all of you, our shareholders here today. Whether it is in real life here in Värmland, in beautiful Värmland, I should say, or if it is online. Why are we here? I have to have it this as well.
For one, it is to provide you, our shareholders, with an overview of our performance and our plans. I t's also, of course, to make some important decisions, but it's something else, too. We are here because we have a fundamental belief in the power of gaming. A fundamental belief that gaming provides unique experiences that unlocks connections, that it expands horizons, and that it fuels collective creativity. A lot has happened since we met here a year ago. I f we're looking back at the year, what is it that stands out? First, we have successfully completed our restructuring program, and we have divested Gearbox Entertainment and certain assets of Saber Interactive. It has been hard work in every part of our organization, and it has been painful at times, but the results are clear.
We have reduced our CapEx and OpEx, we have improved our cash flow, and we have reduced our net debt. We have created a much leaner foundation that we will now continue to build on. Another milestone during this past year is that we announced our intention to transform the group into three standalone, publicly listed companies. Three companies that are all well-positioned to deliver profitable growth and value to all stakeholders. This might have been a bit unexpected to some, but in the face of turbulence, new opportunities often arise. So the board, we are confident that this will help unlock additional value in all three companies. And why did we do it?
We have a fundamental belief in the power of gaming, and because we want to ensure that we can continue creating exceptional games that stand the test of time and shape the future of entertainment. It truly has been a transformative year for Embracer Group. I t has not only been a year of big decisions and transformative actions, it has also been a year of continued delivery by all our teams around the world. T hat point is important. We continue to deliver fantastic entertainment and experience to gamers and fans around the world every day. Gaming really is superpower entertainment, and with 3.4 billion players throughout the world, the influence of gaming can be seen everywhere. Gaming, the gamers take top positions in corporations across industries.
Gamers start companies that have become invaluable to the global e-economy, and notably, gamers' influence even makes large traditional corporations want to engage with these communities. Over the past few decades, gaming has connected people throughout the world and built inclusive communities, and I will also say very powerful communities that continue to grow. Communities that welcome you. It's a place where you can be you, is what gamers says. And gaming is engaging. It is truly engaging and accessible to people all over the world. A common misunderstanding is that it's mainly men and boys that play games, but that is not true. It is almost equally as many women nowadays.
In contrast to other entertainment activities, which can be, and often are, consumed while you're doing something else, like watching TV, for example, gaming is something that you immerse yourself in. And even if you're not playing or even if you're not engaging directly with gaming on a regular basis, people still take part in the experience by watching the content. The impact of games truly is one of a kind. I s this only for entertainment or only for fun? Well, of course, it's fun, but beyond that, there is also a case for using gaming to address both social and environmental challenges. Gaming's reach just goes beyond the market and even beyond the players. I said it before, but it's worth saying again, we have a fundamental belief in the power of gaming.
Having talked about the impact of gaming, I want to touch briefly on the future of gaming. The three point four figure that I just mentioned continues to grow, and today, the size of the video game market is bigger than that of video streaming, music streaming, and global box office receipts combined, as we have heard many times. Similarly, it is clear that tabletop games continue to be popular, addition to the immersive world of video gaming, perhaps more so than what some would think a decade ago. Who wants to sit around the table looking at cardboard paper when there is gaming for real? I mean, like video games. Well, in line with our own conviction, many, as it turns out. So the future of gaming is captivating, and the horizon is looking bright.
Artificial intelligence will, of course, bring even more immersive experience to players and become a useful tool for creators to take their creativity to new levels. As this development continues, players will increasingly demand high quality, but familiar content, content that is pushing the boundaries of what gaming experience can and should be. And it is our firm belief that our group's strong IPs, combined with the extraordinary talent and expertise of our teams around the world, will be key, will be key to delivering on these expectations. Gaming is superpower entertainment with an engaged audience and a unique market that continues to grow year by year. We know you win gamers' heart through quality and by providing worlds that can help mirror experiences players either had or for a second wish they had.
We believe that our three new companies are in an excellent position to be leaders in their respective fields, providing the experiences that truly embrace players. E ven if we will no longer be Embracer Group, the spirit of our mission will long outlast the former name. We have a fundamental belief in the power of gaming, and with that, I want to declare Embracer's 2024 Annual General Meeting open. Should I continue to use this one, or is this one not working? We have one question before we start, and that is, so that's good.
We have one question before we start, and that is, the board of directors, they have proposed, or we have proposed, that this meeting is to be held in English so that everyone will understand what we are saying, and I wonder if we can agree to have the meeting in English?
Good. Thank you very much. We will also hold a public Q&A session during the presentation later on the business activities in the group, and this Q&A session will be only open during the presentation of the business, just so that you know. We will now appoint who will act as the chair at today's annual general meeting. The nomination committee has proposed that I'm elected chair of the meeting, which has also been published in the notice on the nineteenth of August. Do we have any other proposals? No. Okay, can we elect me to chair today's meeting?
Thank you for your confidence. Due to, among other things, including the webcast, there are several unregistered shareholders and guests at the premises, participating remotely. Can we invite these to attend the meeting? Good. I would also 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 in the share register for the meeting have the right to speak, vote, and give proposals at the meeting. During the Q&A, we will, however, allow everyone that are present to be able to ask questions. Can we agree on that?
Thank you. Now, on my right-hand side here, I have Ian Gulam, as you all recognize by now, I guess, our Embracer Chief of Staff and General Counsel, as will keep the minutes for the meeting here today. I also would like to inform you which board members are here today. I n addition to me, we have Cecilia Qvist. You can't see it, so too dark. You will see later when we have some pictures. We have Jacob Jonmyren, and we also have Yasmina Brihi, and we have Bernt Ingman as well, and of course, Lars Wingefors. The company's authorized auditor, PwC, is also present through the company's main responsible auditor, Magnus Svensson Henryson, as you will also meet a bit later. We have the nomination committee's chair, Per Fredriksson, here.
We also have from the nomination committee, Anna Henriksson, Handelsbanken Fonder. We have Magnus Tell, Alecta. And do we have Henrik here as well? There you are. Couldn't see because it was too dark. We have Henrik Olsson, CPP, Canadian Pension Plan, here as well. Okay, we have come to item number three on the agenda. That is the preparation and approval of the voting list. I will now hand over to you, Ian.
Thank you, Kicki. N ow it's time to establish the voting list, and everyone that has been registered in the share register of the record date of, as of eleventh of September, and has followed the procedures as set out in the notice and notified their participation here at the meeting, have been included in a draft voting list that was prepared outside of the door here when everyone walked in, and everyone has been ticked off. T o summarize, my old favorite numbers, today we have a total of 810,475,305, shares, divided into 52,260,204 A shares, and 758,215,101 B shares. This corresponds to 1,280,817,14 votes.
Great. Thank you, Ian. Then we come to item number four, where we will appoint one or two persons-
Don't forget to ask them to approve.
Oh, sorry. Thank you, Ian. Can we approve the prepared voting list? Thank you. Now, we have come to item number four on the agenda, where we will appoint one or two persons to certify the minutes. D o we have any suggestions?
I propose that Erik Sprinchorn will confirm them.
Okay, thank you. Are there any more suggestions? Okay, I find that's not the case. Can the annual general meeting resolve to appoint one person to certify the minutes? Good. Now, Erik, there you are. Then I would like to ask you if you are prepared to undertake the responsibility to verify the minutes. Wonderful. Thank you. Will you also be available after the meeting to... Great, thank you. Can we resolve then to appoint Erik, together with the chairman, to certify today's minutes in accordance with the proposal. Great, Thank you very much. We have now come to item number five on the agenda, and that is question whether the meeting has been duly convened. Ian, could you please explain to us?
Yes, gladly. In accordance with the Articles of Association of the company, a notice must be published no earlier than six weeks prior to the meeting, and no later than four weeks prior to the meeting. This must be done through publication in the Swedish Official Gazette in Svenska Dagbladet, and on the company's website. All of this occurred as follows: on the nineteenth of September, we published the notice on our website. On the 22 of August, we published the notice in the Official Gazette, and the ad convening the meeting was published the same date, 22 of August. I said September, right? I mean August. Sorry.
Thank you. Does the meeting consider that the meeting has been duly convened? Thank you. Item number six on the agenda is approval of the same. Proposal for the agenda have been announced in the notice and distributed to the participants at the meeting here today. Can we resolve to determine the proposed agenda?
Great, thank you. I find that the agenda has been approved. It is now time for the most 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.
Thank you, Kiki. Pleasure, pleasure being here. To start, I would like to look at the group and the world map of today. When I was standing here a year ago, we were more than we are today in terms of headcounts, but still, we are more than 10,000 people engaged on a daily basis, whereof 6,000 developers. We are having in the pipeline one of the most interesting and most well-invested pipelines within the industry, with 127 projects, and still being developed across more than 100 studios. If you look at the map here, we still have many of the industry-leading companies in various fields.
Looking in North America, starting in the Northwest with Dark Horse Media, one of the leading comic book publishers in North America, and a large producer of content for streaming services. Further south in San Francisco, we have the management of Freemode that holds the rights to Middle-earth and The Lord of the Rings, and a lot of other retro gaming assets across the globe. Also, in San Francisco, we have Crystal Dynamics, one of the leading triple-A games developers in the world, that are working on several very interesting projects for the future. Also, in the north, within the same operating group, we have Eidos-Montréal, one of the leading triple-A games developers in the world.
Moving over to Europe, and in Paris, that I now often visit, we have the global leader in board gaming and trading cards, games, or tabletop, Asmodee, with global operations, but headquartered out from Paris. We have in Berlin, the headquarters of DECA, a leading mobile games group that continues building communities and content for many free-to-play and mobile games. Also, in Germany, we have one of Europe's leading groups within gaming of Plaion, active both in development, distribution, and publishing, and many other areas. South of Munich, we have the original company of THQ Nordic, that I was part of funding two thousand and eleven, that now became Embracer. THQ Nordic, headquartered out of Vienna, but with global operations within PC console. And further south, we have the global category leader within brain and puzzle games, Easybrain.
Finally, in Sweden, we have Coffee Stain with operations both in Skövde and Stockholm, and other cities, as well as Amplifier Game Invest. F inally, obviously, the fantastic headquarter in Värmland of Embracer. Now, looking at the year, it has been an eventful year, but I think it's worth highlighting that we still have a solid sales and earnings progression. We achieved sales of more than SEK 42 billion in the year, which is a 12% year-over-year growth, or 1% organic growth, roughly in line with the industry, with the adjusted earnings of close to 17% or SEK 7 billion in the year. In terms of content, we successfully released two very large titles in PC consoles: Dead Island 2 and Remnant II.
Both that contributed a lot in both, obviously top line, but also profit within the year. Both titles actually have more content coming through over the coming week or weeks. Also, as Kiki mentioned, it's been a very eventful year in terms of restructuring and divestment. W e successfully concluded the restructuring. It has been painful, and a lot of tough decisions has been made, but we achieved what we set out to achieve in terms of lowering our OpEx and CapEx. That restructuring did also include the divestments of two significant groups of the company, Gearbox and part of Saber Interactive. We also announced on April 22 what's to come in the future, and we are right now working almost 24/7 to execute on the future and the spin-offs of the group.
First out would be Asmodee, the global leading tabletop games publisher and distributor. If you look at that, the numbers on a pro forma basis, they achieved last year sales of SEK 14.6 billion, with a profitability of SEK 2.1 billion. Moving over to and when they are successfully listed, we will communicate and intensify the process of the spin-off of what we now call as a working name, Coffee Stain & Friends. That will be a global leader within indie games development and publishing, including very successful free-to-play games companies on mobile, with very high recurring margins. If you look at the numbers within those companies, they had sales of SEK 10.7 billion the past twelve months, with adjusted EBIT of SEK 3.1 billion.
Finally, Embracer Group, the listed entity of Embracer Group, will become Middle-earth & Friends. Phil is working on that name to be announced in the future. But it is a creative powerhouse of AAA games development and publishing for PC console, as well as the stewards of The Lord of the Rings, Tomb Raider, and many, many other IPs. Looking at those financials, they had net sales of SEK 12.1 billion last twelve months, with an adjusted EBIT of SEK 1.5 billion. That is a brief summary. I will come back later, but I would like to give Mygge, our new CFO, the opportunity to take you through the numbers. Please, Mygge.
Thank you, Lars. Hello, everyone. I'm very happy to be here today to join today's meeting. Let's take a look at the financial performance for the year ending March 2024 . Overall, the financial development was solid in absolute terms. Our net sales grew by 12%, reaching 42.2 billion SEK with an organic growth of 1%. We did see growth in all segments. Growth was primarily driven by the twelve-month contribution of previous year acquisitions of Middle-earth Enterprises, Crystal Dynamics, Eidos, and Tripwire. On an organic basis, we did see growth primarily from our tabletop segment, as well as entertainment and services segment. In the tabletop segment, the solid performance of trading card game segment performed very strongly.
When it comes to entertainment and services, Middle-earth Enterprises did enjoy a more than expected performance in the licensing revenue of our beautiful IP, Lord of the Rings. A relatively stable growth performance in our PC console segment was supported by a higher contribution of new releases. The main drivers of the new releases were Dead Island 2 and Remnant II. In the mobile segment, Easybrain saw a positive organic growth, while DECA, including CrazyLabs, saw a negative organic growth. This was primarily driven by a change in our business model, focusing more on higher profitability and cash flows. On a profit level, adjusted EBIT of SEK seven billion was within the forecast range, and it represented 11% growth year on year.
Profit margins remained stable, compared to last year at 17%. Cost savings from the restructuring program, of course, did contribute positively, as well as the improved profitability in our entertainment and services due to stronger contribution, like I said, from the licensing revenues. This has been positive as well. This was, however, offset by a softer performance for PC and console, with a higher proportion of amortization of costs due to a lower ROI of some release games. As Lars mentioned earlier, our restructuring program, which has run since June 2023, was successfully finalized in March 2024.
With the actions taken over the course of the program, we have built a strong foundation for improved profitability, cash flow, but also for future value creation. Turning to the balance sheet, as you can see, on these graphs, our balance sheet is actually relatively simple and light. On the left-hand side, we see that we have 11.8 billion SEK of operational assets. This consists primarily of investment in our games pipeline, which total 8.6 billion SEK. Of this, 6.2 represents cash invested in ongoing games development projects, which, when they mature and when those games are released, expect to contribute future profits and cash generation. Net other assets and liabilities of 2 billion SEK are primarily due to the net working capital of 2 billion SEK.
Our net working capital represents around 5% of our net sales, which, many of you would agree, is a very moderate level. Looking at the right side, we have SEK 59 billion in acquisition-related intangible assets, representing goodwill and IP rights. We also have SEK 4.7 billion in net assets held for sale, primarily related to the Gearbox Entertainment. Net other assets and liabilities amounting to SEK 2.7 billion relate primarily to the 2.1 billion SEK of promissory note related to the divestment of Saber. These assets have been financed by equity, by loans, and as well as provisions related to earn-outs.
Of the 9.6 billion SEK provisions for additional consideration and deferred tax, I shall say 4.1 relates to the deferred net tax liabilities. The remaining 5.5 billion SEK is the provision for additional consideration to be settled in cash or shares, depending on the financial and operational targets being set. Moving on to cash. Free cash flow for the year period was 1.5 billion SEK, which is a significant improvement and change versus last year, which was slightly negative. Operating cash flow of nine billion was generated in the year, with 6.4 billion SEK being invested in games development. Net working capital decreased slightly, generating 113 million SEK.
You would recall this is also a significant improvement versus last year, where we consumed over 2 billion SEK in working capital. This was driven by the significant efforts in the management of our inventory across the group, especially in our tabletop segment. As I mentioned earlier, in addition to improving profitability, the actions taken over the course of the restructuring program create a strong foundation and continuing to drive improvements in our cash flow generation. Having a look now at the operational development on the left-hand side, we can see the impacts of the restructuring program, including the divestment of Saber. Total headcount decreased by over 4,500 heads, around which 3,000 relates to divestment of Saber.
The number of internal studios also decreased by 30, again, around which 20 is a result of the divestment of Saber. The number of ongoing projects was also reduced to 141 projects at the end of March 2024. While the number of ongoing projects has reduced, thanks to the detailed review and the ranking process conducted during the restructuring program, the quality of the remaining pipeline has been improved. Finally, as you can see on the right side, we continued to invest in new game development at a similar rate to last year, around 1.8 times the investment in completed games. By being more focused in our investment strategy, through the updated greenlighting process that Phil is going to describe later, we are laying the foundation to more profitable future growth. Thank you.
Thank you, Mygge. That was great to have a deeper review of the numbers, so Karin, our star within sustainability, please welcome on stage.
Thank you so much, Lars. Hello, everyone. My name is Karin Edner Carlsson. I'm Group Sustainability Manager here at Embracer Group. My role includes coordinating and implementing our sustainability strategy within the group. At Embracer, sustainability is about creating long-term value for our stakeholders and acting in line with our values. Our goal is to create great entertainment, be a great company to work for, and to do good for society. Sustainability is important because it reflects our values, it involves managing risks, and seizing business opportunities. During the year, we have focused on preparing for reporting according to CSRD and other legal requirements. The group's climate goals were validated and approved by the Science Based Targets initiative, and we established an advisory sustainability council.
During the financial year, we launched mandatory annual training for all employees within the group on privacy and anti-corruption, and we rolled out an AI policy package across the group. We also continued to make donations from the parent company and support the people affected by the war in Ukraine. I would like to highlight one of our key tools for engaging with employees across the group, our annual employee survey. It's primarily a tool for our management at group and company levels to receive indications of strengths and potential for improvement, allowing them to take immediate action, and set long-term plans. Secondly, it's a reporting tool that enables us to be transparent to our stakeholders about employee satisfaction and engagement. As you can see, we have experienced a slight decrease from previous years.
We assess that the reduction is due to the restructuring program carried out during this year, and also the layoffs of employees. I'm pleased to see how important the well-being and development of our employees are to the board and to the management of Embracer Group, recognizing our great people as key to our success. Thank you so much for listening.
Thank you, Karen. So let's not welcome Chris on stage, but let's welcome Chris Stanton-Jones online. Hello, Chris.
Hello, Lars. Hi, greetings from London. Can you hear me and see me?
Yes, very well.
Oh, that's such a relief. Good afternoon, everyone. Yes, I have a short presentation here looking at the broader games market, its values and performance, as well as the players and trends. So a good place to start is the global games market values and year-on-year performance. The graph here looks at past values and future predictions in billions of dollars, and the good news is that the market trend line is showing low but steady growth, taking out, of course, the one-off pandemic peak. For this year, we're looking at about 2% year-on-year growth, and over the whole period, we're looking at that over double that, about 5% average CAGR. So what are the main influencing factors pushing growth going forward? Well, there are some tailwinds from the economic backdrop.
The IMF are predicting a slow but steady recovery in 2024. PC is the star format at the moment, showing very consistent growth, both past and future. And mobile is also bouncing back from a recent dip, doing particularly well in the emerging markets, in their large and growing populations, with rising incomes. What about the negative effects of the backdrop? Well, it's mainly on the games companies themselves. Well-publicised, many job layoffs in the industry as a whole. It's currently right-sizing after several years of high investment and hiring, after the pandemic. It's adjusting to the new normal, which involves higher costs, particularly from interest rates.
The consumer side, which is normally more resistant to downturns, there's some evidence of on the console's hardware side, it's a little bit soft. And I think this has been affected by the spending squeeze, which is particularly acute on more expensive items. L et's look at total market trends now. This is one of my favorite slides, and I think Kiki alluded to this as well. The games market compares really well to other entertainment sectors. This is one of my favorite charts. It's the largest entertainment sector, it's bigger than all the others: TV, box office, home entertainment, and music. Certainly a far cry from its very niche roots in the early nineties, when I joined the games business.
We know we don't have the Hollywood stars or the sector's profile, but we certainly have the market revenues, and there's increasing engagement. There's more players, more than ever before. It's growing every year, and this is a really good health barometer of the industry as a whole. There are fewer big games. There's focus on established IPs, many of which are supported by live services and in-game entertainment, and nostalgia-based games are doing really well. Interestingly enough, this is a similar trend to the other entertainment sectors, like music and films. There are fewer big new releases now, and the amount of big new releases is varying from quarter to quarter.
This can vary quite dramatically, meaning that if you're looking at industry figures or company figures, it's making the comparisons for year-on-year sales by quarter or by month more challenging. There are fewer platform exclusives now. Cross-platform release is the standard, and when games are on all formats, there's certainly a little bit more cannibalization between the different formats. And probably PC is benefiting more than some of the other sectors. Okay, so let's look at the players now. Who are they, and where are they? And in a nutshell, it's pretty much everywhere and everyone are playing games. Two charts here. The top one shows the engagement per age group, the bottom one, gender distribution. And I think we can say we've achieved mainstream popularity in games business.
Some data here from Newzoo shows that about 80% of the global population are playing games. I mean, this is a huge number compared to the old days. I think we can say that gaming has mass appeal across all age groups, as you can see in the top chart. What's the average age of the gamer? A recent study said that it's about 36 years old in the US, and this is much older than most people think, and a lot older than how it used to be. It 's not just about playing games. Over half of all gamers, 56%, according to Newzoo, are likely to explore other media related to their favorite games.
This could be they could be buying merchandise, watching Twitch, playing a board game, or watching a related film. And of course, the big relevance here is that it will certainly benefit companies such as Embracer Group, which have a solid strategy towards transmedia development. Kicki also mentioned the gender of gamers and how close it is, and I have some data here. The share of females in the bottom chart, you can see, is highest in most groups, but it's generally highest in the older groups, particularly the baby boomers. And if you look at by platform as well, if you look at the mobile sector, for example, it's above 50%. Yes, it's definitely everyone is playing games. And where are they playing? Well, there's an east-west split.
Generally, the mobile gamers, the spend and the users are in the east, and for console and PC, it's the opposite, it's in the west. Okay, let's have a dive into the PC and console sectors. What are the trends and breakdowns by platform? Certainly, if you look at where are the gamers and the spend, it's in the US and Europe. About two-thirds of the market, or the PC and console market is in the West. And this is relevant, of course, because this is where Embracer companies and presence is the strongest. If we look at PC sector, the PC ownership has increased significantly post-COVID. There are many more users with home PCs and laptops, and there are fewer platform exclusives now.
Most games come out on PC, adding to an already strong, very strong catalogue, and it's growing with the likes of support of publishers like Sony. Many of their key first-party titles are on PC now. And PC represents great value for money in the spending squeeze, when people are tight for cash, and there's evidence of PC success with Steam, the number one retailer. They keep breaking their own records with their number of concurrent players. Quick look at console. The good news is that users are spending more if you compare PS4 owners with PS5 owners, for example. About 26% higher average spend, according to Sony in the chart below. Although there is evidence of a slight lag in console upgrading, due to the spending squeeze.
Sony report that half of their monthly active users are still on PS4. But the positive side, I think, is that software sales generally peak for each console historically, one to two years after the hardware peak. We've just passed the hardware peak for most of the consoles now. Secondly, there's better economic conditions coming, and this will affect the more expensive machines, the consoles. Also I think we're gonna get a big boost from the launch of GTA VI next year. It's first on console, there's a big industry event, and I think it's really gonna drive hardware upgrades, attract lapsed and new players. B ottom line, I think the best is yet to come from the likes of PS5. Okay, quick word on AI. Hot topic, obviously.
The industry views are generally positive, I think, in the thought that it's gonna save time, it's gonna save development costs, and it's gonna enhance the overall development process. Who's using it? It's thought to be very widespread. Most developers, I think, are using it, but it's early days, it's in experimenting phase, and I think most have not really disclosed details of what they're doing. Timing-wise, I think most analysts are expecting it to start being visible in games, from the next year onwards. Of course, it does come with potential risks. Publishers will have to navigate certain challenges. There could be a backlash with gamers and artists. Could also be copyright infringement. No, no one really knows. Okay, lastly, let's just have a look at the mobile sector. How big is it? It's very big.
It's half of the total games market, 49%, according to Newzoo. Where is it? It's largely in the Asia-Pacific area. About 60% of the market comes from that area, and of course, that area is growing. It's growing its mobile network infrastructure, it's getting greater smartphone adoption, and these are the things that are driving it. G rowth is expected this year. Growth despite the challenges of adapting to changes in the privacy-related monetization and user acquisition. It's been driven also by better economic conditions, continuous strong performance of existing games, as well as some recent big hits. P layer growth of about 4% is expected in 2024. Big portion of this, as we said, will come from emerging markets.
For the first time ever, on iOS and Android, they're now opening up to other app stores and payment methods, and Epic Games Store, as we speak, is rolling out on iOS and Android. I think this will be a positive for our market. I think you'll start to see a greater variety of games and more ways to play. That's it, Lars. I'm gonna hand back to you.
Hopefully, improved margins.
Yes, indeed. Indeed.
Thank you, Chris. Thank you so much. Let's welcome up Phil Rogers.
Thanks, Lars. A ctually, I'm just going to move these. I get quite animated. I don't want to knock them off. E specially when I have,
Last time I checked, you were deputy CEO.
Oh, yeah. L et's skip to the next slide. So it's great to have an opportunity to talk with you today, our shareholders. And what a title to be given to talk about this passion for games. Firstly, on that passion point, just to call out this amazing backdrop. W e're flicking through a lot of slides, but let's just take a moment here to appreciate, this image. It comes from the world of our upcoming game, Kingdom Come: Deliverance II, and it's the fantastic medieval kingdom of Bohemia. W hat a wonderful backdrop.
To say my goal today is not only to help convey the passion of the people here in the room, the board and the executive, passion for our company, our goals, our games, of course, but also to convey and represent the passion of our coworkers and teams who are not here. Because really, passion runs throughout this group, and it really is part of our core DNA. Last year was, of course, a challenging time, but it's often said that turbulent times create new opportunities, and I think you're seeing that now through the earlier sections about how we're approaching those opportunities. I also love the expression that pressure makes diamonds, and this is very much the spirit with which we work with.
Over the past year, we've gained valuable insights and knowledge on how we build Embracer stronger for the future, and players must be top of mind for this. Now, we're fortunate to have very passionate players, players who spend their time and money in our worlds, in our games, fans who live for our comics, fans who love our merchandising. We're also fortunate to be working with some intellectual properties which resonate across multiple streams of entertainment. Now, intellectual properties, or we often call them just IPs, well, these have the power to delight, power to amaze, to create smiles, to create laughter, a sense of fun, and of course, a sense of play, and it really sets us up, I believe, in a very unique position.
Now, for the eagle-eyed among you, looking on the big screen, these images are taken from the recent game show in Cologne, Gamescom, where over 300,000 gamers from over 100 countries, I believe, landed in Germany to take part in what is probably the biggest gaming event now in the year, in the world. Now, there's nothing better than seeing lines of gamers, you know, eagerly waiting, sometimes hours, to get your hands on pre-release footage of your game code and to test it and play the game. Well, there actually is something better, and that's when all is said and done, and all the playtime is finished, that there's an award. And kudos to the team at our studio, Warhorse Studios, in Prague, for winning the Gamescom 2024 Best PC Game for Kingdom Come: Deliverance II.
There has been, of course, pressure over this year, but coming through this today, I really feel and believe that we are a company that is committed to build upon its status amongst the leadership in the games industry and to deliver even better experiences for our players, because we're passionate about games. Let's look at PC console, just, you know, briefly with this one slide. Now, you've seen just through Chris, independent consultant with analysis on how the PC console gaming world is performing, where it's growing, where it's shifting. D uring the year, we've taken the time to review and design how we should be set up to enable great teams to make great games, working within an aligned investment strategy to deliver high-quality hits predictably and profitably. E ssentially, there's three aspects to this.
Firstly, we want our studio teams to be increasingly focused on our own key IPs. Of course, these typically have better unit economics and project economics. But as we think about where the PC console gaming market is going and the broader entertainment landscape, focus on our IPs, where we believe we've got the longest and best long-term growth. Secondly, to talk to process. Now, we have great creative and production talents within our group, and as we think about the future, and perhaps on Middle-earth and Friends in particular, what we're now pushing for is greater collaboration and discipline to improve our ROIs, our returns on investments from higher quality games, giving gamers what they want and what they expect. Now, lower, more focused CapEx investments will positively impact our EBITDA and free cash flow generation and gradually improve our profit margins.
Now, the third point here may sound very general and very obvious, but it actually talks something really important. It's a DNA, a deep-seated drive and ambition to think differently and improve. Again, when we think about Middle-earth and Friends, in particular, and the road ahead, we must take responsibility to use our PC console size and diverse talents in smart ways to develop and scale services across that group. How do we better leverage solutions to common problems across studios and businesses, not reinventing in isolation? Building from each studio's success and expertise, and deep collaboration on franchise management for our global IPs. Now, it's always hard when you put up a list of intellectual property, because we obviously have to miss out on so many, and I think the first few slides you saw, the count was over a hundred.
I think this is a snapshot, really captures the strength of our portfolio, the breadth and the depth. From remakes of classic beloved games to new games such as Satisfactory, which just last week hit new highs in terms of player engagement with the game's full release on PC. The care and attention that the team at Coffee Stain put towards player relationships is truly best-in-class. I know Anton is here somewhere. Anton, yeah? He's here, and I'm sure he'd love, whether it's in Q&A or afterwards, to talk more about their approach to player relationships. 'Cause, again, as we look forward in PC console, that relationship between content provider and player is gonna be increasingly important. Now, in the top and the center and top right, we see The Lord of the Rings and Tomb Raider.
Now, Tomb Raider is actually an IP I've been working on or around since, I had to count this back, since 2007. So it's both scary and exciting in equal measures to think that's 17 years already. I fell in love with Tomb Raider and Lara Croft in 1996 on PlayStation One days, and the chance to provide direction, challenge, and resource to our fantastic Tomb Raider studios feels as motivating today as it did back then. The Lord of the Rings is simply one of the biggest IPs in the world. The Lord of the Rings, The Hobbit, both set in Middle-earth, became part of the Embracer Group in 2022.
A gain, if you can imagine it now, I'll put my Middle-earth and Friends hat on and say, such IP is rare, and the opportunity now to build within this world, being true to the works, is something which resonates massively across your, our shareholders, your studios, and your businesses. Last year was a pressure year, but to the point that pressure can create diamonds. For both Tomb Raider and The Lord of the Rings, we've been diligently working with our own creative teams, other creative teams around the world, and our passionate fans to lay the foundations and long-term planning for these franchises. On Tomb Raider, our strategic partnership with Amazon across their games and Prime teams is building well.
Netflix's animated series, Tomb Raider: The Legend of Lara Croft, releases in early October. For The Lord of the Rings, as previously announced, we've entered into a new collaborative long-term partnership with Warner Bros. and New Line Cinema for upcoming film projects, as well with Amazon Games again, to create an expansive MMO or massively multiplayer online game, all set in Middle-earth. Now, in addition to these major partnerships with our updated green light process, we're actively testing and prototyping multiple new game concepts, exploring a wide range of immersive and authentic gameplay, all within the Middle-earth world. An honest and tactical approach to world-building and authentic storytelling is at the heart of all these efforts. Again, true to the works. And we believe that engaging deeply and early with the community is essential to creating experiences that truly resonate. So in closing, what's left to say?
Hopefully you can sense some passion. What's left to say is that Embracer really is one of the leading groups of successful entrepreneurs, creative talents, and world-class IPs. As other speakers have said, we've got fantastic people, a great number of hidden gems, and amazing games from across the group. We aim to demonstrate the growing earnings power of this combination now over time. So to close, we're gonna have a quick show reel of some upcoming titles.
Come on, move it! Ah, goddamn amateur. Out of the way. Stop driving like my grandma. She's six feet under.
Wow! and thank you, Phil. I would like to take the moment to show you just a few slides on something I'm also very passionate about. I'm passionate about games, passion for fans, and something that are part of the ecosystem that the shareholders might not be aware of, that we are shareholders of. And it's four companies. To start, part of the group is the Limited Run Games, led by the founder, Josh Fairhurst, based in North Carolina, and they are a global leader in this field. They set the gold standard, how to physically publish and distribute editions direct to gamers across the world. And we are very excited about the future, but they are already contributing a lot to the success of the group and the synergies within, Embracer. Moving to Game Outlet, very close to my heart.
This was the company I was part funding, 1994, still based here in Karlstad. Nowadays, they are not a mail order company. They are many things, but for most, they are a provider of retro gaming, hardware, and accessories across Europe. To DPI, led by the founder and CEO, Angela, are one of the industry leaders to provide merchandise, either directly to the consumer on publishers, we provide web websites for publishers and IP holders, but also they are a significant provider of items for collector's editions. Those amazing collector's editions that you all have bought in here, haven't you? To the fantastic team at Plaion that are providing retro consoles to fans across the world.
They started off with the C64 Mini, now six years ago, and it's been a great success for us and for them, and they sold more than 780,000 consoles. We are all super excited about the release of the Spectrum and Atari 7800+ coming this Christmas. If you don't know what to buy for a Christmas gift, click online or visit a local game shop. Talking about retro consoles, we have something else within Embracer that are close not only to my heart, but to a lot of us, including many shareholders, and it's the Embracer Games Archive. We will have the opportunity to watch a very short video about the archive.
We are building the most comprehensive games archive in the world. We currently have more than 70,000 items in the database, covering more than 50 years of gaming history to preserve and share for future generations. We store more than 50 complete collections, such as Game & Watch, Mega Drive, and Xbox, just to name a few. They are cataloged and housed on more than 3,000 shelf meters, featuring rarities such as the Magnavox Odyssey from 1972, and much more. This is not just an archive, but an important resource for researchers, educators, developers, authors, and schools, which will aid in spreading knowledge beyond the gaming community. Cultural treasure for the love of games.
Wow! I always become really glad when we're visiting the games archive. I forgot to mention that the archive also has been contributing to the development of the retro games consoles. Just a few words from my side before we move over to, I believe, a Q&A session to shareholders and to all of you. It's been a long journey. It's been thirty-one years for me in games, and it's been eight years as a listed company, close to eight years, and that has been a journey on its own, telling you. We set out as THQ Nordic in November 2016.
We started a journey of allocating more capital to making more games, start making some small acquisition, and then 2018, we start making some larger acquisition, bringing leading entrepreneurs, such as Klemens at Plaion or Anton at Coffee Stain on board, under the roof of Embracer Group. We try to learn, not master, we try to learn the capital markets, and it's a beast. But we successfully have been able to raise $3.5 billion, roughly, over seven raisings, and we have been doing more than 100 acquisitions over the past seven years, and I told Johan the other day, that we should learn even more from this. Obviously, we are learning every day, we've been learning a lot, but from those 100 acquisitions, we have had many successes, luckily.
We also had processes or acquisitions that has not been performing or failed, or many acquisitions that we haven't been able to wait to complete, now thinking about the divestments we had to do, the past year. W e will bring all those learnings into the future, and I think we have a lot to take from this journey into the future. The past year has been difficult, sometimes more difficult than you can imagine, that you publicly could read. There is a lot of drama in media, but. Sometimes there is some truth, sometimes there is less truth to that. But one difficult thing I learned, I always promised not to borrow money, not at least of scale, and then the bank's calling me 2021, "Hey, you can borrow any amount, 0.75 interest rate, no security." Okay.
Then we took on a lot of debt, and then the war came. This was December 2021. The war came in February. We were to close the transaction of that debt in March, and then since then, it's been a process. Also learning lenders and banks, who are your friends and who are not your friends? And when you're acting together, you know, it could be some rough discussions sometimes. L uckily, the ones that don't want to be our friends, they left. And we have a refinancing. We've been repaying the debt. We've been refinancing in Asmodee and in Remanco. T oday, I feel we are on a solid financial basis to go into the future. Obviously, with everything else going on in terms of improving cash flow, focusing, and a strategy how to do all this.
I'm looking into the pipeline, and, you know, obviously, I would love to tell you about the pipeline, and I'm sure Phil would love it as well on stage. W e need to talk to gamers first, and we need to let the developers, and the publisher, and the team around the world talk to gamers when the things are ready. But I'm super excited, and for example, I was really glad that we were able to conclude divestment process last week with Saber Interactive, and we were able to actually keep 4A Games within the group. It's a fantastic studio that has two very important games. It's just a very good example that I can't wait to tell you, or I will not tell you, but someone will tell you in the future.
In the daily life of a CEO, a group CEO, there is a lot of different topics, and I've been spending a lot of time working on Asmodee and the spin-off. Spending lots of time in Paris, but also with everyone involved in that process. L ike telling you, it's going according to plan. We are very close, I feel, and we have many different work streams, and I'm very determined to get this going as soon as possible, and it's in line what we have been communicating before. Still open, whether that would happen in the end of this calendar year, in December, whether it would happen in February or March. But we are working as hard as we can, promising you. I'm still standing here.
I still believe in the vision we set out, to provide a home and support for entrepreneurs and creators, and to have them working together in an ecosystem. A lot of that will survive these spin-offs. Collaborations, for example, between Middle-earth and other verticals, will still be there, and they might even be stronger at the time of spin-offs. Finally, I would like to thank you all, team members, all in this room, but all across the world, for your efforts. We are really a team, and we've been working hard together, making some difficult decisions, but also hopefully enjoying doing the daily job. I just would like to thank you all very much. I would like to thank all shareholders that are still in the room and still patient with the journey.
I know some of you came in as shareholders in the peak of 2021. We are still working hard to deliver back on that entry point, but we are confident. I'm very confident, and I'm long term in all the three spin-off companies as a shareholder, and I believe we will be able to create a lot of shareholder value in the coming decade. Thank you so much.
This is going to be tough.
What?
Are you tweaking your nose?
All right, let's begin the Q&A. Thanks for very good presentations. I note that you said something there on your closing remarks about banks. I just want to clarify, I only work with equities. I work at a bank.
SCB is a friend.
Sounds good. I have a bunch of questions myself. I'm gonna ask the audience for questions as well, and then everyone on the webcast can ask questions. I thought I'd start with you, David.
Yes.
CEO of the Games Archive. F irst of all, why is there an archive for all these games?
Good question. For the past 50 years, the video game industry has grown to very big. Today, it's huge, even bigger than film and movies. U nlike the other big industries, there hasn't been anyone who has taken on the mission to preserve physical video games. T his is something that we believe is very important, and it needs to be done. Just like any other culture forum, I think it will always be important to be able to look back and see how the culture has evolved over time. People love video games, and they want to look back and see where it all came from. W ith our unique archive that we are building, we can give great possibilities for people to explore this further.
How has it been received so far?
It's been received very good, and very positive, both from within the video game community and also, so it's been very, very, very well received.
It sounds to you like this archive can serve a broader purpose than just storing games.
Yeah. We just don't want the games to look nice in a shelf, and the archive is not only for the Embracer Group, it's for all who wants to get access to the games. And we really want the archive to be a helpful resource that can promote and support the video game culture and the video game industry. And this can be done in several ways. We have had close collaboration with the National Library here in Sweden, and also close collaboration with universities, researchers, schools, and teachers. And last year showed retro consoles from Plaion, and a guy from Plaion, Ben, was visiting us, like, two years ago or something, and he had to try the compatibility for the Atari 2600.
He brought the prototype to our archive, and we have, like, 400 Atari games. H e tried one, each at a time, to see the compatibility, and that was very helpful to them to make the console a success. W e also help book publishers with creating books about gaming history, and so on. A ctually, next week, a university going to be visiting us and give classes in gaming history in the archive, so I'm really looking forward to that next week.
Wow! Cool.
Yeah.
What's your dream vision for the archive?
First of all, I want the archive to be as extensive as possible of all, all the games. It's already a fantastic place, and I love being there, but this is just the beginning, and there's a longer road ahead of us. I have this, like, dream vision. Most of us know about this vault or archive in Norway, the Global Seed Vault in Norway, where they store all the seeds in the world. I want the archive to be like a similar landmark, so that people know about the important work that we do there, and people around the world know that in Karlstad, Sweden, there is an archive for all the video games, and that's, yeah, that's a good thing.
Sounds good.
Yeah.
For everyone here physically, I believe we have a showcase back here.
Yeah. After this, we have a small exhibition of some items from the archive, with some of the great IPs that are under Embracer. Not all of them, but some of them. P lease come and look, and also play some Giana Sisters on the Commodore 64. Yeah.
Great.
Yeah.
If I move over to this side, you know, just starting with this past fiscal year, it's been a lot of focus on short-term stuff, restructuring, divestments, now more recently, spin-offs. How do you look back on it? Just, you know, simply put, if I ask maybe all three of you.
Phil.
I think we look back with care, but we really try to look forward. I mean, I think to the learnings point, I think, you know, so on the games industry side, there's been con there's been a constant change sometimes than a need to reset and rethink. P ersonally, I think it's one of the most positive things about the games industry, is the confidence and can-do it takes on, to try new tech, to try new business models, try new markets, new genres. It really does push boundaries, but with that, sometimes you have these periods of reflection and correction, and I think that's what the industry has gone through, and that's what we've gone through.
Now we learn, and we move forward. I think with our, as I say, with the people, with the IPs, with the strategies now set, I think, you know, great times for the future, so we look forward.
Humbling. A humbling year.
Few words, but then says a lot. Mygge, do you have anything to add?
Well, very consistent with Phil and Lars looking back and connecting the dots. Things we've gone through, I find it very consistent with the move we're about to undertake. Taking us with more solid base, a lot more consciousness. Everything we have left behind us gives a lot of exciting, favorable, actually, future outlook.
Okay, and then just to follow up to you specifically, you're new in your role as Group CFO, coming from Asmodee initially. Has it been a big transition for you, going from Asmodee to a company like Embracer?
I shall say, since the change of control, the welcome overall has always been very warm. I have said it, several times, I didn't feel like being treated like a subsidiary, but by a valuable colleague, by all my colleagues, bosses, at Embracer. I think, I had the privilege to be a part of this family for now many years. I had the chance to actively participate in our restructuring program, serve as the deputy CFO. So having had the chance to get familiar with some businesses, work with colleagues, having had the chance to work closely with Johan. I think, I'm very grateful with everything I was exposed to so far. I'm just very happy with the process.
Great. I n terms of a special year like this, I assume it's a difficult balance when you as a company must, on the one hand, address costs, but at the same time, you still have a lot of developers that need to focus on developing good games. Phil, I thought I'd ask you how you navigate that balance, 'cause you played a key role in Embracer's restructuring, but you're also leading Crystal Dynamics.
Yeah, I think, I mean, it's all down to the teams. You know, even reflecting, you know, getting ready for these short notes today, thinking about, you know, the path with Kingdom Come: Deliverance II. The team, how they've kept their focus and can come out at the right times and showcase the world. I think that's across the group. There's lots of teams that have just kept their focus. They believe in what they want to try and do. They believe in the broader vision. I think step by step and team by team, but that's how we've kind of approached it, humbly and organically and just try to do the right thing.
We also have Anton here on stage from Coffee Stain.
Yeah. Is this on, yeah?
Yeah, it sounds like it works. What's been your role in this restructuring or transformation?
My role is changing a lot. It's a very interesting year for me, coming from building Coffee Stain to where we are today. Now trying to make sense of this new structure. And yeah, there's a lot of things going on. I think we are quite early, like, still. It's taking on some speed now, and yeah, it's been interesting. Like, this whole restructuring phase, I was part of the process where we went through all these games. It's been very eye-opening for me as well to even get more insights into all the other things that are going on in Embracer, and I think that I was very focused on Coffee Stain.
I'm still very focused on Coffee Stain, but it's also so many other good things in Embracer. I think it's a little bit of a shame that. Like, I think we will see more of that in the future, and I'm actually. It's been very nice experience for me so far. A lso now, obviously, like, just getting to know everyone else, it's a great group, a lot of great developers, great people. F eels good.
Great. I noted your shirt there earlier, Kingdom Come.
Yeah.
I can see it?
Yeah. Looks really good. And I, I thought, if we call that an upcoming success, I thought I had to ask you about the recent success. Yeah.
Yeah.
Satisfactory.
It's crazy. I must just say, I'm so happy the team has done such an amazing effort. It's crazy. Satisfactory is one of those games. I'm typically always skeptical about everything and like very harsh. I think when we worked on Satisfactory in the start, I was a little bit skeptical, but like over time it like the team just showed how great of a game it is. And I think last week launch was just a crazy testament to that, like seeing like over 200,000 concurrent players. We had like 185,000, I think, on Steam, and then at the same time a lot on Epic. That's a crazy amount. So it's a huge love for the game.
A lso, obviously that gives me a lot of confidence that we can keep delivering on Satisfactory. I t's also like, I think, a good proof of whatever we're doing in Coffee Stain; it's actually working very well. Like, working closely with the community, having this, like, very open and being very transparent, like, no tricks, very, like, open-minded. I think that's the way of the future, and, yeah, super happy about it.
That's the secret sauce, just transparency and-
To me, sounds easy, but, I think it's actually boils down to a lot of that. L ike s o much has changed if you, like, look at since even when we started Coffee Stain, with, like, marketing, with, like, how social media has grown to like this, like, players talk with each other. Like, it's so important to kind of have the trust in the players. I think this is one of the challenges which a lot of the, like, older and bigger companies maybe have to kind of go through and adapt to that new landscape, where it's very... you have to kind of be with the community in a different way than I think in the past.
I was going ask you what's next, but I guess that's console.
What's next? Yeah, we obviously have a lot of things going on. As you said, you saw here in the video, we're looking forward to launching Satisfactory on consoles. T hen after that, we're probably gonna do looking into DLC and more content. I think that goes for all our products. Y ou will see more. We have some stuff in our pipeline as well, but and then across the whole Coffee Stain and Friends group, there are plenty of cool things coming. M uch to look forward to.
Stay tuned. Do we have any questions from the physical audience? Just raise your hand. I believe there's a mic. Yes. Do we have a mic? Raise your hand again, maybe.
Hello. Thank you today for your presentations. My name is Mark Johnson, and I represent the Folksam Group. I have a question about cash compensation to senior executives, and I wonder if Lars or the chairman can comment on the link, if there is any, to performances in regarding sustainability. Thank you.
Thank you, Mats. It's a relevant question, and I think it's important in general to have incentives that are linked to the important KPIs of the business and not only financial. Obviously, this is a difficult science, and sustainability, even though there is many KPIs, you don't want to suboptimize incentives. T he reality is today that we don't have any cash incentives or share incentive plans to any executive, and that are linked to the sustainability or ESG matters, even though it's our ambition. Ian, I'm looking at you here because you are the expert on incentive program.
Thank you. I n short, as Lars alluded to, today, we don't have any share-based or variable remuneration, cash-based either for senior executive, and thus no KPIs whatsoever because there are no incentives, so-
It's the easy answer.
. The short answer.
Our .ambition is.
In the future, when we do, there will, of course, be sustainability, other relevant KPIs for our business, so.
Okay, any other question? Yes, one up here.
My name is Johannes Wingborg, and I represent Länsförsäkringar Fondförvaltning here at AGM. I have a question regarding the board's shareholding. Some of the board members have a very large shareholding. At the same time, a couple of board members who stand for re-election do not own any shares when I look at the material for the AGM. So I just wanted to ask if this has been a discussion regarding this in the... Yeah, what's your view on that? Thank you.
I could answer from my view. I think perhaps Per could give some color from the nomination committee, because basically, it's, you know, also a question for him and the nomination committee. But in general, I'm obviously in favor that I'm in the same boat with people, and people have incentives, and that they are shareholders. Now, even more important is that you have the right board members that are committed and engaged to the business. And the reality is that not everyone are millionaires or billionaires. And so I don't think I should force anyone to buy things or shares. People, I think in general, the pay in Swedish boards are very low, and they have a lot of responsibility, and they spend a lot, many hours every year.
In general, it's not a very well-paid job. So that's something I would like to bring back to the institutions. Perhaps if they were better paid, they could have more reasons to buy shares. That was a very long answer.
I can add some comments, actually. I'm chair of the nomination committee. As you can see, or maybe you have read, and you will learn from our proposal, we've had this, these kind of discussions, and we, of course, we can't, as the nomination committee, put any demands on the boards of directors, but we can make expectations, and as you will learn from the proposal we'll make.
Thank you.
All right, any other questions?
Yes. My name is Ole Hulteberg. I'm a shareholder, and I have a question regarding to the IPs. IPs has been mentioned numerous times, specifically Phil here in his presentation. And the IPs are, of course, I think we can agree, a platform for developing the games in multi-channels and on different platforms. Now, how in the restructuring will the IPs be utilized and shared, as historically, within Embracer, this has been a synergy effect that we could address to develop more games and more, yeah, merchandise and different things. Thank you.
I can certainly start with that. I mean, I think that, you know, even taking away the restructuring, there was sharing and collaboration between groups. You know, I talked to some of the expertise and how we use that. There's expertise in creating remasters, there's expertise in merchandising, as you correctly referenced. I think certain IPs have been done in ways that are, you know, set great examples, and I think from great examples, then we're driving better economics and results, and that will create a halo effect, and it will naturally create that, you know, barriers to reduce down further.
I'm quite optimistic about that, and I think the other aspect is—as I've alluded today, I mean, Lord of the Rings in particular is one of the world's biggest IPs, and there we have to really think beyond you know silos or historical. We have to bring teams together to create multiple-year plans, and then once you've established what it is how do we do it internally, externally? T his will really I think play to the point you're making. I'm really passionate about that, but also as we talk about that in the business today, I can feel the feedback is really positive.
That's what, you know, it's for an IP of that size and shape, and potential, that's what teams want to do, so I think we're beginning to move faster and further into that collaboration and really realize these synergies, and as the breadth shows in from retro to merchandise to all these specialist areas, Limited Run, they're experts in their domain, and so I'm really optimistic.
Just to give some color on that, you know, one thing it's important to remember that we own or control nine hundred IPs. S ome of them are the greatest in the world, some are very niche and not so well known globally. We have been lowering our CapEx from about $800 million a year to about $400-$450 million. And obviously, we have less capital to invest into all of those IPs. I think going forward, obviously, we will focus more on owned and controlled IPs in the investments we are doing. But I also believe we will, you know, give access to external companies to work on a number of IPs, including gaming companies, to provide future beloved products. It's something more on long-term planning to utilize the IP we own in the balance sheet.
Right now, we're very focusing on executing, you know, what we have on the plate, but I think it could create a lot of value for both gamers and shareholders on the long term, thinking that way. All right. Yes, I see a hand there.
Erik Sprinchorn, representing Tin Fonder. Question on AI, which is a topic that I've sensed some hesitation in, you know, in previous meetings and so far, but now we've heard that you've created a formed a policy on with respect to employees, and I've heard Kiki, I think, talk about tools being perhaps very valuable. I mean, I get a sense that you are slowly but surely getting your arms around this topic, and maybe you can share some general findings on potentials and risks, and is the organization embracing these. Oh, sorry about that pun. But these tools or what's your current view on AI and how it will be helpful for productivity, creativity, or not?
It's, it's a bit of sensitive topic, and I think it's a bit of unknown topic. I've been spending a lot of time with the leading AI companies in the world, the past month, trying to deeply understand how this is impacting our group and the industry and the wider society. Because if you're not deep into it, you could imagine that you push a button, and then out come a new Tomb Raider game. I'm happy to learn in a way that that is not true, and if that ever happens, it's decades or centuries away. It 's more of a tool to complement the current work streams. I think that's one thing I realize, yes.
It develops fast, but it's not a magic tool to create games without any humans in between. Phil, perhaps you can fill us in on-
Yeah, I mean, I think it's really exciting. First, I'd say AI, and it's great that—I mean, I actually went to a conference early this spring, where the first day was dedicated to excitement, and then the second day was handed over to lawyers. And it was, you know, "Oh, be careful!" So I think as a business, how we navigate that is common with many businesses. I wouldn't call it cautious necessarily, but I'd call it pragmatic. You know, I think we're trying to identify. And our teams, I mean, this is one of the advantages of being somewhat distributed. There's lots of individual pushes to find solutions to work faster or be more creative.
Now we're trying to pull those together, so we can learn and redeploy, looking through a very pragmatic lens. And I think from my own personal, you know, I did a deep dive a month or two ago about community management with AI, and I remember, you know, GDC, you know, attending some sessions and listening. I actually thought to myself, "How hard can it be?" You know, but then when you really read into the white papers that are coming, I think that was from a Microsoft team, and you realize the challenges that go deep into community management, and how you take profanities out of communities and make communities safe places for people to be.
Some of the notes that Kiki talked to earlier, there are now AI tools and technologies that are really winning there. It's probably when you think about AI, it's probably not the absolute cutting edge that you might imagine, but it's making communities safer. You think, "Well, why can't we just filter out profanity?" Well, if people are being profane, swearing and whatnot, in symbols, it's very hard for filters to do that. Y ou do need some element of machine learning and whatnot to provide those tools to make those communities safe. I t's a small aspect of one aspect of our overall ecosystem, how we have safe and productive forums for our games.
I think that's an example of where we do read in and we do learn and apply quite quickly.
One thing you also like, I think, this industry, we have some of the best programmers in the world, which are super excited about AI generally. L ike, I think all our teams are looking into, like, these tools and, so I mean, I think that's something to keep in mind. I think the games industry are gonna benefit a lot from this, and everyone is looking for, like, the next big thing. It's gonna take some time. Tools are gonna get much better. It's gonna increase efficiency. Ultimately, like, better products, I think, from us, and maybe faster. I t's with, like, all these technologies, it's like it takes a little bit of time to get them into practice.
All right, any other questions? I don't think I see any hands. All right, I'll take some questions from the web here. Actually, the first one here is not really a question, but it's worth mentioning. It's someone regarding the games archive, asking it to put some games online, so you can play them, and the person seems willing to pay for it, so it's a business idea. But another question here: Have you decided where 4A Games will sit within the Embracer structure?
Yeah, so it would be part of the future Middle-earth and Friends structure.
All right. And then a second question here from the chat regarding the release date of Kingdom Come, which is on the same date as a game called Civilization, which might be a bit competing, perhaps. How do you tackle that, or do you tackle it? Do you change the date, or?
We're looking at it. We're mindful of it, but I think we're confident on our plan. I think it's a constant thing that we do when we look at release dates is, you know, what else is coming out? When are other events taking place? I t's more day-to-day for us, and we'll do the best thing for the game.
Yeah. Sounds good. I think we'll have to wrap up the Q&A here, thinking about time. I'll ask you a final question. I know it's a lot of focus on spin-off, so I'm curious on, you know, the feedback you've gotten from external stakeholders, not meaning investors, 'cause I know there are different views there. But, you know, from industry partners, what has been the response in general, you would say?
No, I think they're very supportive. I think what we hear, and they want us to succeed. I think the spin-off process we're going through is one important thing to get us where we need to be. We need to be able to utilize our balance sheets. We need to be able to tap into the capital market, and if we do that, we will create better games and become more successful. W e are a public company with public shareholders, and we need to optimize for that to create operational success. P eople are very supportive from that perspective.
All right. I think we'll wrap the Q&A there, so thank you very much.
Thank you.
Thank you.
Okay, thank you, Lars and team. Now we have come to the even more exciting part of the annual general meeting, and that's now number eight on the agenda: presenting of accounting and documents. The annual report for the financial year has been published on the company's website on June the twentieth, and has also been available at the company's offices, and is available here today as well. Do we have any questions so far regarding the material that's been available? No, I can see that. So I would like now to ask our company's main responsible auditor, Magnus Svensson Henryson at PwC, to present the auditor's report. Welcome, Magnus.
Thank you, Kiki. Honored shareholders, ladies and gentlemen, as mentioned, my name is Magnus Svensson Henryson, and I'm representing PwC as the auditor in charge for the audit of Embracer Group AB. You shareholders engaged us to perform audit work in order for us to express an opinion on the financial statements and the management performed by the directors. The purpose of that opinion is to further support trust for the financial reporting and the management. Our audit has been performed throughout the year, and we have had extensive communication with management on matters relating to business operations and the financial reporting throughout that year. We have reported our work to the Audit and Sustainability Committee on five occasions, and we've met with the full board on three occasions during the year.
Our participation in those meetings allow the directors to ask us questions, on matters relating to the audit, the financial reporting, and other areas, and that opportunity has been used. We believe that the collaboration between, us as auditors and the management and the directors have worked very well. As you may remember, this is our first year as Embracer's auditors, and that means that we spent considerable amount of time to understand your business. We have also done work to understand what was done in last year's audit performed by, EY, and we did perform additional work, as we must do, around last year's closing balance sheet. In addition, we have evaluated significant business processes, systems, and controls for the financial reporting.
We spent time getting to know your people responsible for the financial reporting, both centrally here in Karlstad, and locally, around the world. Changing audit firms requires hard work, not only for us as auditors, and I'm not sure that's of importance to you, but what is important, it also requires a lot of work for Embracer's people. I speak now for the entire global audit team when I say that we have received great support from Embracer's staff, and we appreciate all the efforts made. Based on what we learned during this startup phase, we've made a plan to audit the business of the major entities within the group.
Our global team consists of local teams in various territories and a central team in Karlstad and Stockholm, supported by subject matter experts on various areas such as tax, IT, sustainability, valuation, accounting, and other areas. Our view is that Embracer overall has robust processes for the financial reporting, and that the business performance is presented transparently. These qualities are built on the expectations that have been communicated by the directors and management, and on the commitment, and competence of Embracer's employees. An audit, are based on concepts of materiality and risk, and those are our tools to focus our limited efforts on areas that are most significant. The audit report sets out four such areas that we have judged to be of greatest importance in our audit, and I thought I should mention a few words on each of those areas. First of all, revenue recognition.
The diverse nature of Embracer's business, and we've heard that today, of course, the diverse nature requires various business revenue streams that have inherent different characteristics depending on the type of business, products, and how they are distributed. Embracer is party to agreements with publishers, platforms, and other counterparties that may influence how revenues are recognized. We have tested the reporting of revenues, that it's consistent with Embracer's accounting principles by evaluating systems and controls, and testing selected key controls. And we have to also tested samples of transactions against supporting documents and payments. And we've done so for all operative groups of Embracer. We assess that revenues are reported correctly in accordance with Embracer's accounting policies, and that those accounting policies are consistent or compliant with IFRS. The second area is goodwill and other items relating to business acquisitions.
As mentioned before here today, Embracer has acquired many businesses in recent years, and that has led to the recognition of goodwill and other assets and liabilities, with significant amounts, I should add. Goodwill assets have indefinite useful life for accounting purposes, and they are held at cost without amortization. Instead, carrying amounts of individual assets are tested for impairment annually. Those impairment tests require estimates of future cash flows and other inputs that are inherently subjective. We have tested a sample of historic purchase price allocations against supporting documentation. We have examined a sample of the impairment test, the most significant ones, and we have evaluated those significant assumptions made that I just mentioned. We also tested the recognition of goodwill from assets sold or reclassified to assets held for sale.
We assess that goodwill and other intangible assets identified in business combinations have been measured correctly in accordance with the accounting principles of Embracer, and that those accounting principles are compliant with IFRS. The third area is divestment of subsidiaries, and we heard that Embracer has divested Saber Interactive and significant parts of Gearbox. These are very complex transactions, not the least because they are very sizable businesses. We've read the share purchase agreements and other documents and discussed the transactions with management to evaluate the presentation in the financial statements. And we have traced the agreed purchase prices to payment transactions, and the carrying amounts of sold assets and liabilities to the accounting records. We assess that the divestment have been presented in accordance with IFRS. And then the fourth and final area is restructuring program.
We have obtained an understanding of the program, and we have tested significant activities under the program, including impairment test of development costs and other assets. Our work also included tracing divestments and termination of contracts to accounting records, payments, and agreements. We assess that the activities under the restructuring program have been presented in accordance with IFRS. Before, during, and in connection with the completion of our audit, we evaluate our own independence. Any service beyond the statutory audit have been evaluated separately by ourselves and by Embracer before accepting. Embracer has a strict policy for non-audit services provided by its auditor. We meet all requirements on independence set out by regulators in Sweden and overseas, and we have reported that to the Audit and Sustainability Committee in connection with the issuance of our audit report.
I have now come to the conclusions of our audit. They can be read from our auditor's report that's included in the annual report. We recommend that the annual general meeting adopts the income statement and the balance sheet for the parent company and the group, that the profit be appropriated in accordance with the proposal in the statutory administration report, and that the directors and the managing director are discharged from liability for the financial year. Thank you.
Thank you very much, Magnus. I'm wondering, anyone having any questions to Magnus? No. Okay. I then find that the annual report and consolidated accounts, as well as the auditor's report, have been presented. Thank you, Magnus. As we heard, the auditor 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 statements and the balance sheets?
Yes. Yes.
Thank you. The board of directors' proposal regarding the allocation of the company's result is included in the annual report and has as well been included in the notice for this meeting. The board proposes that no dividend shall be paid for the financial year 2023-2024, and the board proposed that the funds available to the annual general meeting of approximately SEK 654.7 billion shall be carried forward. Does anyone want to comment on the board's proposal? As we have heard, the auditor also 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 results is allocated in accordance with the board's proposal, which was also endorsed by the auditor?
Thank you. We have previously heard also that the auditors support discharge from liability. I would like also 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.
Thank you. Considering the votes provided in advance... No, oof.
Yeah, considering t he vote provided in advance and present here today.
Yeah
The decision has been passed with sufficient majority.
Great. Now we have come to point ten to twelve, and this is where we should determine the number of Board of Directors and auditors, fees to the Board of Directors and the auditors, and also the election of the Board of Directors and auditors. T his proposal have also been available since the nineteenth of August on the company's website in the notice, and also available here today. B efore we will present the Board, go through all that, I would like to present the Board's work of the year. I would like to have some slides here. This year has been a busy year for the Board, to say the least.
As you probably, or as you have heard several times now, this has been the most challenging period in the history of the company. I would like just to take you through the process that we have that has taken us to where we are today from a board perspective. We have had, of course, the most focused, the most important thing for us to focus on was to make sure that Embracer becomes a leaner, stronger, more focused, and self-sufficient company. So if we look at the process that we have had that we worked through, we have had a very thorough process, and the most focus, I would say, has been on the restructuring program.
We actually were, of course, spending a lot of time to explore different options to maximize value for Embracer, and that all that work resulted in the proposal to transform Embracer into three standalone, publicly listed company. As you may remember, we announced that on the 22 of April. We have had, during this period of time, 54 recorded meetings of the board. We have an annual board calendar, where we have specified what we should do during our ordinary meetings through the year. There we can see what we must do during the year.
This year, it's been an extraordinary year, I would say, because we have, as you can see here, these are all the ordinary meetings we have had, but we have also had a number of extra meetings. Now, in the middle here, or actually in September last year, we had several new board members that joined the board, and I would say they got a real kick start, because to actually become involved and catch up in the middle of all this was quite an achievement, I would say. So if we add the extra board meetings that we had, physical or on Teams, we had 21 physical meetings or via Teams during the year. Most of them, as you may see here, actually relate to the restructuring program.
We followed up on each one of all the activities to make sure that we really that we make the progress we needed to do in order to deliver what we had promised. We also had a number of per caput meetings during the year. Actually, 34. You can see the small orange dots here. That's the per caput meetings that we did have. W e also had eight audit committee, audit and sustainability committee meetings, and five remuneration committee. So all in all, this actually resulted in 54 meetings through the year. Now, you can say that, as you probably already figured out, that the focus that we had was first of all, as I already said, on the comprehensive restructuring program. We also spent a lot of time on the structured divestment processes.
For example, as you see here, Saber and Gearbox, as we have mentioned several times today. And also that meant that we, you know, we terminated all our operations in Russia, so we spent a lot of time on that as well. And of course, last but not least, we spent a lot of time to the proposal to split the company into three new companies. Then if we talk about the reporting and the business performance, I would say that we do not just sit there and wait for information. We are quite we know what kind of information we would like to get from management. And if we look at the reporting and the that we get from, mainly, of course, from our CFO, it's a long list of reports.
Apart from all the business performance and the reports that we get from the CFO, we also have the CEO reports that we get from the different operative groups in the company, which I find extremely interesting to read, because there we can follow up, and we can read, you know, how the businesses are progressing, if they, you know, compare to budget, what they're doing, and on new things, and the pipeline of games and all that. So that's very exciting. If we look at when we talk about the ordinary course of business going forward now, as you know, we have, like, three trains standing, waiting to take off, and they're all on track, as you can see.
The first one out will be, as Lars mentioned, Asmodee, and it's extremely interesting to see how that business is now forming and take part. It's another thing as well, I would say, if you think about all the energy and the passion, we talked a lot about passion here today. The energy and the passion that the board puts into our work throughout the year. H ere comes the ultimate test now for you. Why do you think we put in so much energy and passion into our board work? Because we have a fundamental belief in the power of gaming . Any questions on the board work? Great, thank you. We had fifty-four meetings this year, but we had eighty-six the year before, so we're going in the right direction.
Now I would like to ask the Chair of our Nomination Committee, Per Fredriksson, to present the proposal for all these items that I mentioned before.
Okay.
Then I would like us to vote on all of them in one piece after Per has presented.
I will go through item ten to twelve then. I beg for your attention for another six minutes and fifty-four seconds, or something like that. The nomination committee, in respect of the annual general meeting 2024 , has been comprised of myself, appointed by Lars Wingefors AB, Ola Åhman, appointed by Savvy Games Group, Anna Henriksson, appointed by Handelsbanken Fonder, Henrik Olsson, appointed by Canada Pension Plan Investment Board, and Magnus Tell, appointed by Alecta. The Chairman of the Board, Kicki Wallje-Lund, has been attached to the nomination committee. Our work is described in the AGM documentation. We have held eight recorded meetings, all in good spirit, and I would say including passionate discussion, to add to the theme of the AGM, maybe.
In respect of this AGM 2024, the nomination committee has unanimously resolved to submit the following proposals. Item 10: proposal for candidates for the post of chair and other directors of the board. The nomination committee proposes that the board shall consist of seven directors without deputy directors, that Yasmina Brihi, Bernt Ingman, Jacob Jonmyren, Cecilia Qvist, Kicki Wallje-Lund, and Lars Wingefors shall be re-elected, and that Brian Ward shall be elected as new board member. That Kicki Wallje-Lund is re-elected as chair of the board. Information on all proposed board members is available on the company's website, as you might know. A recent statement regarding the proposed board. In preparing its proposal for the board, the nomination committee has focused on maintaining its composition and competencies, paying particular attention to the transformation of the company into three standalone publicly listed entities.
Furthermore, taking into account the board's ability to supporting the company's company's strategic position, development, international operations, governance, and financial controls. The Nomination Committee has applied rule four point one of the Swedish Code of Corporate Governance, the code, 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 general, in respect of skills, experience, and background, and to strive for an equal gender distribution. 43% of the proposed board members are women. In addition, the Nomination Committee has assessed the independence of the board members. The Nomination Committee's proposal regarding the composition of the board meets the requirements on the 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 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, in accordance with rule four point three of the code. With respect to the temporary, current, and anticipated extra workload of the board associated with the transformation of the company into three standalone publicly listed entities, the Nomination Committee would like to underline the importance of video game experience, industrial knowledge, and active ownership added by Brian Ward's candidacy.
David Gardner and Cecilia Driving are thanked for the contribution within the board of directors. Well, that concludes item ten. Item eleven, proposal for fees and other remuneration. The Nomination Committee proposes that remuneration of the board, excluding remuneration for committee work, shall be increased to an aggregate of SEK 7.5 million. The remuneration to the chairman of the board shall amount to SEK 2.2 million. The remuneration to each other member of the board not employed by the company shall amount to SEK 700,000. Moreover, given the additional board work, required with regards to the intention to transform into three standalone publicly listed entities, additional board remuneration is warranted until the listing have been completed.
Thus, the Nomination Committee proposes an additional fee of 200,000 SEK to the chairman and 150,000 SEK to board members who are not employed by the company. This is called a transformation fee. And now back to the question before. The board members are expected to use at least the part of the compensation that corresponds to the increased board remuneration and the transformation fee after any tax that burdens such part of the remuneration and transformation fee that has been paid to acquire shares in the company. The Nomination Committee recommends that the acquisition of the shares should be carried out as soon as possible after receipt of the remuneration from the company.
In addition, the Nomination Committee proposes that remuneration for work in the Audit Committee shall remain unchanged and 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. Reasoning regarding board fees. In the process of setting and proposing the board fees, the Nomination Committee has conducted a thorough benchmark of board remuneration levels based on Swedish and international peers, and has also sounded with former, present, as well as potential new board candidates in this effort.
With respect to the temporary, current, and anticipated extra workload of the board associated with the transformation of the company into three standalone publicly listed entities, the Nomination Committee considers it's reasonable to propose the transformation fee on top of ordinary remuneration, up until the completion of the company's transformation. That concludes item eleven. Item twelve, proposal for election and remuneration of company auditor. The Nomination Committee proposes that the registered audit company is appointed as auditor until the end of the next general meeting. Further, the Nomination Committee proposes, in accordance with the Audit and Sustainability Committee's recommendation, re-election of the registered audit company, PricewaterhouseCoopers, as auditor 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 remain the main responsible auditor.
Remuneration for the auditor shall be paid in accordance with approved invoices, and that concludes item twelve.
That was fast.
That was six minutes, fifty-four, maybe. I don't know.
Okay, do we have any questions on the proposal?... Okay. Now, Per, do you want to invite Brian to come up?
Yes, why not? Please, Brian, if you could make just a short presentation.
Thank you. I'll swap.
Yeah.
How about that? Thank you very much, Per. Thank you, Kiki, and thank you very much for the invitation to say a few words. I am slightly disappointed, having been born and raised in Northern Canada, that this meeting is not taking place in the middle of January, when, in a climate I'd be more familiar with, but thank you nonetheless. And congratulations to the company on its operational results, process improvements, the results of its restructuring and divestment programs. I know firsthand how difficult those decisions and communications can be.
Particularly, congratulations to the company on setting the foundation and roadmap for a stronger future, which we believe will unlock shareholder value, is an easier investment story, and I think also will provide additional motivation, clarity, and excitement to the employees of the broader group and the three units within it. Just briefly about my background, although I started my career as a lawyer, I've now been in this industry 28 years, having started at a very small studio owned by Electronic Arts in Vancouver in 1996.
Since that time, I've had the privilege of leading two of the largest M&A transactions in our industry's history, many other mergers and acquisitions, integrations, restructurings, and divestitures, as well as a number of process improvements that enabled and drove some substantial organic growth. At that small studio in Vancouver, which was 100 people when I joined, in four years, we grew that studio to 800 people, quadrupled revenue, and contributed 43% of the top line to Electronic Arts among a studio group of 13. After a couple of years at Microsoft and joining Activision, I had the opportunity to lead worldwide studios there. During that period of time, we were very fortunate to also quadruple revenue, I think over a five-year period.
tripled the size of the studio organization, posted the industry's leading margins, and overtook Electronic Arts as the number one pure play publisher. I now lead, as Group CEO, Savvy Games, which is a completely different type of entity and quite an unusual startup. We are now only two and a half years old, but we are 3,800 employees in 22 countries, and doing about $4 billion a year in top-line revenue. I am very excited about this opportunity to serve. I am grateful for your support. I think this is an exciting juncture and point of inflection for Embracer Group. We have extreme confidence in Lars and the leadership and management team.
I hope my experience over the last 28 years, facing and managing through a lot of the issues, challenges, and opportunities that the Embracer team will now be facing over the next couple of years. I hope my experience will be of value and will exceed expectations, and I look forward very much to working with Kiki, Lars, the other members of the board, and the broader Embracer employee group. Thank you.
Thank you very much, Brian. I can't say welcome yet because we haven't made a decision yet. We have to wait. Now that we have heard the proposals for item 10 to 12, I will ask the meeting that we can approve all these items together. But before we proceed to voting, are there any other proposals for item 10 to 12? Can the meeting resolve in accordance with the proposal?
Thank you. N ow, Brian, I can say a warm welcome to our becoming our new board member. And Brian, there's one thing I can promise you: it will never be boring. Okay, 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, it will be Bernt Ingman, that will be the chair of the committee, and Jacob Jonmyren and myself will be a part of that committee as well. We have the Remuneration Committee, and Yasmina Brihi will be the chair of that committee, and it will be Jacob Jonmyren and Cecilia Qvist, that will also be the members of the committee.
Now, even if Cecilia Driving and David Gardner couldn't make it here today, I would like to take this opportunity to express our great thanks for all their contributions and engagement in the board throughout the years. Now, the board has, after recommendation from the Remuneration Committee, proposed that the annual general meeting approves the remuneration report. And the proposal has been included in the notice for the meeting and has also been available on the company's website prior to the meeting, and has also been distributed here today. So therefore, I do not intend to go through this in detail. I n this context, I would like to point out that the auditor's statement regarding guidelines for remuneration for senior executives are available here today and has been available at the company's website.
In addition, the current guidelines are kept unchanged and will, unless adjusted in the future, remain in force until 2026. Do we have any questions regarding the report? Okay. Can the annual general meeting resolve in accordance with the proposal?
Yes.
Thank you. Number fourteen: the board of directors has proposed that the annual general meetings shall resolve on authorization for the board of directors to issue B shares, convertibles, and/or warrants. This proposal has also been made available in the same manner as noted for item thirteen, and I do not intend to go through this in detail either. 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. Based on the number of shares today, that is how many, Ian?
One hundred and thirty-four million nine hundred and ninety-four thousand four hundred and eighty-six.
Good. Thank you. Are there any questions regarding this proposal? No. Can the annual general meeting resolve in accordance with the proposal?
Yes.
Great, thank you. Can we, considering the votes provided in advance, note that the resolution is passed with sufficient majority of two-thirds of the votes cast and present at the meeting? 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 repurchase own B shares. Some procedure here as under item number 14, and I do not intend to go through this in detail 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 one-tenth of all shares in the company. In other words, the same number of shares as noted for the authorization to issue shares.
Oh, you want me to say it again? Okay.
You did say here that.
1,944,486.
Okay, great. Thank you. Are there any questions regarding the proposal? No. Can the Annual General Meeting resolve in accordance with the proposal?
Yes.
Thank you. C onsidering the votes-
We can note that it sufficient majority.
Good. Thank you. Sixteen, the Board of Directors has proposed that the Annual General Meeting shall resolve on authorization for the Board of Directors to transfer own shares. Same procedure as for the previous item for the final time today. Are there any questions regarding the proposal? No. Can the Annual General Meeting resolve in accordance with the proposal?
Good. Thank you very much. Considering the votes-
One final time, passed with sufficient majority.
Good. Thank you. Okay, well, dear shareholders, with this meeting now, we can put 2023 and 2024 behind us. I would like to take the opportunity to thank Lars and his team for all the hard work and energy, and all the passion, for God's sake, that you always put into the business. Then, of course, I would also like to thank you all here today for participating in our annual general meeting. I hope to see you all here next year again in sunny Karlstad. As we have no other questions reported, I hereby declare the meeting closed. Thank you very much.