Q4 20/21

May 20, 2021

Hello and a very warm welcome to embracer's fiscal Q4 report. Today, we have, as always, a lot to talk about. We have very strong sales for Valheim, 6,800,000 units sold. We have 5 days until the release of BiMutant, and we also have a pipeline to look forward to. So we are going to start today's presentation with a presentation by CEO and Founder Lars Bingerfoers and CFO, Johan Ekstrom. And then I will come back with a Q and A after that. So without further ado, I'll leave it over to you, Lars and Johan. Please go ahead. Thank you, Oskar. Hello and good morning, everyone, and very welcome to Karlstad Wurmeland. I'm really pleased to announce another stable quarter. I'm humbled to report this morning a record performance of the group with the net sales growing 80% year over year to SEK 2,400,000,000 And excellence in the games business area, reaching close to $2,000,000,000 in sales, driven by 85% organic growth. The Partner Publishing business was stable at a bit over SEK 400,000,000 Really pleased to see that profitability came in Strong. We have a 2 16% increase in the operation EBIT that now are above SEK 900,000,000 in the quarter. The free cash flow It came in at more than SEK 860,000,000 in the quarter, and that is more than SEK 5.85 €1,000,000 more than the same period last year. The record performance was driven mainly by a fantastic sales of Valheim. The game sold 6,800,000 copies in the quarter, and this morning, our reporting We are expecting the game to sell another 1,000,000 to 1,200,000 copies in the quarter ending June. But a lot of great titles performed during the quarter, a great continued performance of SnowRunner, Metro and many, many other titles that also delivered a strong back catalog sales. All in all, we have more than or we have 160 Game development projects under development end of the quarter. That is not including the pipeline from Gearbox and Aspire that came in April 1. All in all, we are engaging 126 game studios across the world, whereof about half are internal and half are external, engaging more than 5,000 game developers. We had a record investment into our pipeline. We invested SEK 5 and SEK 63,000,000 in the quarter, and that is close to 5x the value of the game released during the Q4. Looking ahead, we are looking in the current year to have the strongest year ever. We are expecting to complete more than 90 game development projects during the year for a value investment value of between SEK 2,800,000,000 to SEK 3,300,000,000. The Q1, we're expecting SEK 300,000,000 to SEK 350,000,000. As of today, we have more than SEK 17,000,000,000 in cash or available credit lines. That was, during the quarter, increased by the large ABB we made in March raising more than SEK 7,500,000,000. We have, during the past quarter and up until today, been engaging with a lot of fantastic entrepreneurs and creators and companies across the world. This is ongoing work we are doing. And we are reporting this morning, to give you a bit of color, that we are currently in about 20 late stage talks with those entrepreneurs and creators. We integrated gearbox, Isabrain and Aspire during the April May, And I'm happy to report that the Easy Brain performance are exceeding our expectation at the time of the merger. Also announcing this morning the reformation of a new studio, a game development studio in the UK, Free Radical Design that is headed up by the original founders of the studio Free Radical Designs, the makers behind Time Splitters. So with that said, I would like to leave over to Johan to take you through the financial numbers. Thank you, Lars. Yes. So let's start by looking at our P and L for the quarter and the full year. And we can I conclude that during the quarter had a solid sales performance where we are growing our top line with 80% Over last year, reaching SEK 2,400,000,000 in net sales? Sales is driven by mainly Business Area Games, where we had a Strong growth of 119 percent over last year and a relatively flat performance in the Partner Publishing film business area. The top line growth fell through to EBITDA, increasing EBITDA over last year with 137 percent, reaching SEK 1172,000,000 in the quarter. Operational EBIT in the period, NOK 903,000,000, which is 216% better than last year, yielding an operational EBIT margin of 38% for the quarter. Profitability was increased by the strong growth in the top line But also a gross margin expansion through the positive product mix shift from Partner Publishing Film to Business Area Games. And then also within Partner Publishing Film, We had a stable performance of the Film segment in the quarter. Looking at our adjusted EPS for the quarter, it amounts to SEK 2.07 per share, which is more than double what we had during the same time last year. Our full year performance is on the top line. We are Generating SEK 9,000,000,000 in net sales, which is 72% above the same period last year. And our operational EBIT reached close to SEK 2,900,000,000 For the full financial year, up 178% compared to the year before that, yielding a Operational EBIT margin of 32%. Looking at full year adjusted EPS, it reached SEK 6.44 per share, which is 129% over last year. And also interesting to note is that if you compare this with the EPS at the time of the IPO, it's actually 14x higher than it was at the time of the IPO. Turning to the amortizations. As you On now, we distinguish between operational and amortizations and acquisition related amortizations. The operational and amortization reached SEK 270,000,000 in the quarter and acquisition related amortizations SEK758,000,000 in the quarter. The operational amortizations is driven mainly by the amortizations on completed game development projects, Which was 202,000,000 in the quarter. Also other intangible assets mainly related to the Film segment added to the operational amortizations. If you look to the acquisition related amortizations, The majority is related to goodwill, 612 out of the 758, but also acquisition of IP rights. We had a solid cash flow generation in the quarter. The cash flow from operating activities increased 211% versus the same period last year, mainly driven by the increased EBITDA and the profitability. We also continue to invest into our business. The total investment in intangible assets was SEK 599,000,000 in the quarter, where EUR 563,000,000 is related to game development. We also had a cash flow related to acquisitions closed during the period of NOK 405,000,000. Cash flow from financing activities is positive, Close to SEK 6,900,000,000 net in the quarter. It's mainly driven by the Share issue that we made in March, but it's also reduced by the reduced utilization of credit facilities in Kochmelia. Free cash flow, SEK 861,000,000 in the quarter. Trailing 12 months, SEK 1685,000,000 in free cash flow. And if you look at the quarter, you should also bear in mind that we are investing more than ever into our games portfolio Taking a closer look at investments made during the quarter, they amount to SEK 599,000,000. As said, the majority is related to investment into our games portfolio, 563 Out of the SEK 563,000,000, SEK 398,000,000 or close to SEK 400,000,000 is investments made through internal studios And SEK 166,000,000 is investments made with external studios. I have a SEK 36,000,000 investment in other intangibles, which is mainly related to our Film segment. During the quarter, we finalized games of SEK 117,000,000. And This can be compared with the investments made into games during the quarter. If we look at the increase over last year's, We increased with 35% over last year. We had 4.17% a year ago in the quarter. Now it's SEK563,000,000. And you can see that we continue to have a higher degree of investments being made with our internal studios. The investments into the games development Portfolio also shows in the business related KPIs where we Have increased the amount of studios compared to last year. We have 126 studios by the end of March, not including M and A transactions that was closed in the beginning of April. The amount of developers that are engaged in our development projects is 5,100 and more than twice as much as we had in the same period last year. Projects in pipelines, 160%, up 60% approximately versus same period last year. If we look at the value of finalized game development, we expect for the Q1 of this 2020 1, 2022 fiscal year to complete and release games to a value of between SEK 300,000,000 and SEK 350,000,000. For the full year, we expect the amount to be between SEK 2,800,000,000 SEK 3,300,000,000. The completion will be back end loaded over the year where you can see that there's a Significant expected release value in Q4. And during the year ending March 2022, the ambition is to complete more than 90 game development projects, Summing up to this, between SEK 2,800,000,000 and SEK 3,300,000,000 in completed games value. Turning to our balance sheet. Total assets at the end of March was close to SEK 34,000,000,000. Sick. Looking at the assets, there are significant amounts in intangible assets At SEK 16,400,000,000 in total, this can be divided into operational and tangible assets, which is SEK 3,900,000,000 and acquisition related intangible assets, which amounts to SEK 12,500,000,000. Out of the operational intangible assets, the vast majority is related to our ongoing game development portfolio, which is SEK 3,200,000,000 or 82% of the SEK 3,900,000,000 operational intranible assets. Completed games is SEK 513,000,000 at the end of March. And acquisition related intangibles assets, the majority, dollars 10,800,000,000 is related to goodwill. We have a strong liquidity. And at the end of the quarter, The available funds amounted to SEK 20,500,000,000 and as per now, it's SEK 17,200,000,000. Looking at the non operational amortizations ahead of us. The forecast for This fiscal year is close to SEK 6,700,000,000. And for the next or for this quarter, April to June, we expect The amortizations on acquisition related intangibles to amount to SEK 1670,000,000. Worth noting here is that the forecast includes all transactions closed as per 31 March, But also Gearbox, Easy Brain and Aspire who were closed in the beginning of April. So to summarize, Johan, we will have SEK 30,000,000,000 in amortizations over the coming 5 years, Yes. Hitting the profitability the net profitability EBIT before the reported EBIT. Yes. And as we have a straight line amortization schedule for acquisition rated Amortizations, it's for the coming 5 years. And then, of course, at year 6, it will be 0. This is Arias. Thank you so much, Johan. So looking at the Games business area and the financial performance, we are, as a trailing 12 months basis, close to SEK 6,500,000,000 in sales. And the quarter, again, is close to SEK 2,000,000,000 Looking at the balance, new releases And back catalog, new leases only were 42%, even though we had Valheim in the quarter. So we really had a strong back catalog sales way above SEK 1,000,000,000. The share of digital sales are increasing, driven this quarter partly by Valheim. So 89% Of the sales were digital in the quarter for the games business area. And on a trailing 12 month basis, we are up to 80%. Owned share titles are now at 62%, And the rest is then publishing titles, also defining Valheim as a publishing title. So organic growth. Obviously, I'm very pleased this morning to report the full year organic growth of 70%, And we have been having a good organic growth past years. And I would like to highlight this morning that of the 160 ongoing game development projects, 2 thirds of them are based on either new IPs, entirely new IPs, or IPs that we reutilized that has not been with any new content or games the past 5 years. And we have more than 240 IPs in our within our group to work on. But still, the bottleneck for us and the rest of the industry is talents and games developers. So we still have more of dormant IPs, licenses and IDs across the group. Then we have talents to develop these 4. So meaning 1 third of the portfolio of games development are more on a recent established or released IPs. Now looking at each operational group. We have THQ Nordic that had a stable performance, about SEK 350,000,000 in the quarter. They are at all time high on a trailing 12 month basis as close to SEK 1,800,000,000 in sales. They had a few titles releasing in the quarter, Monster Jam Steel Titans 2 and kingdoms of Amalu re reckoning on Nintendo Switch. But the business mainly was driven by a continued strong performance of breakfast, SpongeBob and Destroyful Humans and many, many others. Glad to report this morning that the Destroy All Humans, the remake released last July, has sold now More than 1,000,000 copies and the remake of Spongebob Battle for Bikini Bottom Rehydrated releasing in June last year has sold way more than 2,000,000 copies. Looking ahead, finally, we are just 5 days to release Biomutant. Biomutant has been something that we have been talking every quarterly since the IPO, more or less. And I'm excited about that release and also happy to get the reports that are above our expectations in terms preorders. The title will be released globally on the PlayStation 4, Xbox 1 and PC on May 25. Also in the quarter, we are releasing an upgraded version of Wreckfest on PlayStation 5 and as well as Destroy All Humans on Nintendo Switch in the end of the quarter. So with that said about the operational performance, I think we have Clemens from Vienna with us On stream here, because, Clemens, you made some acquisitions a few days ago, and Rather than I'm talking about them, I would like you to tell us a bit more. So how are you doing in Vienna? Are you playing a bit of Biomutant this morning or We are playing Biomutant since years. Yes, we are thrilled that the release is next week and we are looking forward to How it will be received by the audience, finally. But today, I think I should talk a little bit about the 3 acquisitions we made The last weeks and then promised you. We have 3 slides here. I will here we can see the slide of appeal. So please go ahead. Okay. Okay. I promised you that I will not spend more than 5 minutes, although I could talk hours about those amazing studios. First of all, Appeal Studios. The main reason why we acquired Appeal Studios is definitely Yves Corley. His team of leads is the entire development team in the studio because those guys go always for the maximum possible. Worth mentioning is also that Yves has worked on 5th generation of consoles so far. So if you remember the early days of console development, you know those guys were handpicked by the platform holders because not everybody was allowed to develop a PlayStation 1 or PlayStation 2 game back in the 90s. But EVE was constantly among those group of developers. And this says something at least. They will work in the future on memorable open world games. They started already. So they have 2 games in development. 1 is an internal project based on a TGN Nordic IP, where luckily, appeal studios is extremely familiar with this IP and the other project is for another publisher. So it's a 3rd party project. So, yeah, can't wait to reveal the news about This game in development there. Keiko, we know Peter and the gang of Peter since 2014. They helped us a lot with SWIMASTERS, SWIMAKES and porting projects. An amazing story maybe to Tell about the porting project was definitely Dagsselders' definitive edition for the Xbox 1. It shows also the technical skills of the studio Because it took Peter and his team 6 weeks to support Darkseidder's Definitive Edition from PlayStation 4 to Xbox 1, including submissions. This is still a benchmark at the record of our porting history within the group. Currently, the work on FATEs 1, which is an add on to Kingdoms of Amalur Re Reckoning. After they have finalized this one, which is up for release this summer. They work on a sequel of 1 of our most valuable IPs we have in our portfolio, and it's based on an original THQ IP. I hope I can share some assets in 2022 about this project, but watch out. Last but not least, if you could make a slide turn, thank you, massive mini team. This studio was founded by Tim, Michael and Robert, and they worked together with Handy Games since a couple of years now. They helped with also with sporting projects, but also with a nice game called Spitlings. It's the first acquisition of Handy Games, which is making Teeter Nordic Team Beige a grandmother company. And I guess the right term for Embraiser Group would be a great grandmother company. So I'm really thrilled that Handy Games made This move and set the ratios to growth going forward. They work on internal and external projects at the moment. And the internal project, which I'm really thrilled to tell you, is based on an U. S. License from a major movie TV studio. This project is up for release in 2022, and this will lift Handy Games as well as massive mini team into new spheres. So watch out. This will be an amazing game for the summer season in 2022. That's it. I can talk for hours, but I will save you From too much. Well done. Thank you so much, and really pleased to welcome all the new team members at the Tissue Nordic and Hande games. Thank you so much and good luck for remaining 5 days. Thank you. Bye bye. Okay. So with that said from THQ Nordic, I'm moving over to our friends at Deep Silver That had a stable performance, reaching $465,000,000 sales in the quarter. On a trailing 12 month basis, they are quite stable at about SEK 2,000,000,000. Releases, The most successful release in the quarter was Supercross IV from our friends at Milestones. They also released Galsfield 4 during the quarter. But the quarter, as usual, was driven by a very strong back catalog of Metro Games, the Kingdom Come Deliverance, the Saints Row series, Outward and a continued performance of the Milestone's lineup. Also Milestone announced their most ambitious Game projects yet, Hot Wheels Unleashed that will due for release during the current financial year, And I'm pleased to see that it has been a great interest from fans of the Hot Wheels online. Our friends at Vertigo, they announced That co op first question title after the fall will be coming this summer. So really excited to finally have that game coming out. Flying Wild Hogs confirming this morning that they're having a very exciting pipeline with 4 titles that will be start releasing this financial year. Moving to Stockholm. I'm really happy that Clemens, Andreas and the team led by Tobias and many others at Starbase came to an agreement that Deep Silver will be the publisher of the upcoming Payday 3 for PC and console. So all in all, Deep Silver has a very interesting pipeline with some very exciting projects coming out, both this financial year as well as future years. Moving to our friends in Florida, New York, St. Petersburg and many other places around the world. Sabre Interactive, They had a continued performance, SEK 271,000,000 in sales in the quarter, Continued strong performance of SnowRunner and World War Z. Now SnowRunner, We are reporting has sold close to 2,000,000 copies as of end of March. They continued to Be very active within the market. CN Studios closed legally the acquisition of CN Studios closed legally during the quarter. And now during end of April, they released with really Favorable reviews, Star Wars Pinball VR. Also Really happy to see that Aspire closed early April, and they will That will help Sabre significantly to increase their presence in the U. S. Market. And Aspire already released a great remake of the old classic Star Wars, Republic Commando on PlayStation 4 and Nintendo Switch. Slow Runner, again, released 2 days ago on Switch and on finally on Steam, and both versions are the game of the year additions, And pleased to see that it's had a good start on steam. Looking ahead, they're having a very, very Pipeline, that is with lot big titles. I would say more in later or financial years post the current one, but they're having a good pipeline in the current year. Here you can see that the Evil Dead one is the one I can talk about today that are expected during the current financial year. Pekka Games had a stable Performance, dollars 104,000,000 in the quarter. In the mid quarter, Iogo and Thinking Ape, our friends in Vancouver Finally came legally into the group, and we had a bit of revenues from them in the end of the Q4. And the original business model of Deka to take care of great mobile games and continue operating them showed a strong performance, for example, here on Zombie Catchers that had a most solid quarter during its 7 years lifetime. Also, we briefed this morning about this IDFA change. Obviously, this is very early even though it has being announced and implemented. It's still very early, but So far, we have not seen any material change in the business, and we are not expecting that in terms of DECA. And I'm confident our friends at Easy Brain will adapt to that change well, and they are prepared for it for a very long period of time. Moving to Schrodder and Stockholm, coffee stain. Again, it's just an amazing performance. The quarterly Sales came in at SEK 781,000,000, which is an 8 51% increase year over year. And on a trailing 12 months basis, the coffee sales are up to SEK 1,200,000,000. With the revenue, the main revenue driver was Valheim, but again, a very solid continued performance of satisfactory and Deep Rock Galactic. They are very busy, And they are having a very interesting pipeline of future projects. The only 2 that are announced are Midnight Ghost Hunt and songs of conquest. Moving to our friends in around the world at Amplifier, led by the team in Stockholm. They had their largest studio, Tercea Air Studios releasing A Little Nightmares 2 During the quarter, I was really pleased to see well received by both gamers and critics alike. And during the quarter, we actually We're able to book a royalty from our publishing, our friends at Bandai Namco that are the publisher, that have done a great job of publishing this title. Also during the quarter and announced just a week ago, really happy to welcome Frame Break from Shrove into the group, And I can't wait to see what the future holds for that studio. Amplify continues to invest. They are really organic growth investments for the long term. They are setting up new studios, hiring talents and building new IPs. So I'm excited what Amplifier and their Amazion Studios will bring to the group over the coming years. Moving to the Partner Publishing and Film Business Area. We had a quarter that were in line with last year, about SEK 400,000,000 solid performance of the film business that are increasingly becoming digitally as well as They have been doing a number of good license deals with TV channels in Germany and Italy. We also launched our own YouTube channel, MoviDome, that has more than 100,000 subscribers the 1st 4 months. And continued solid performance from our friends at Sola Merja in Germany. Looking at the business, we have been stating we are the last man standing within physical distribution, not only because we love and understand and believe in that part of the games industry, also because we think it's a really relevant service to provide both for our internal studios as well as Our external partners within the industry and overall, embracer Group and especially Koch Media are really complementing the industry. That's why I was pleased to see that Koch Media Have signed another major game publisher for physical distribution for most countries within Europe. At the same time, we had another business partner moving out with the new releases from the business and that Publisher are then in sourcing that part of the business. The Cosmedia Physical and Partnered Publishing Business are growing. They opened offices in Hong Kong and Tokyo during the period as well as we have decided to invest in in Logistics Centre. It's already existing in Austria in Hafen, but now we are investing a good amount into expanding that capacity. So I think we're increasing the capacity with 60% and with the new robotic systems as well. So M and A. So just to recap a bit of numbers. So here you can see on the left hand the maximum consideration During the past 5 years, starting 2017, we had allocating SEK 100,000,000 into acquisitions, led by the acquisition of Experiment 101, the makers behind Biomutant. And then being continued building on this strategy. And this year, so far, now talking calendar year, we have, if you define them as maximum consideration, invested SEK 22,000,000,000 into new talents into the group. The absolute majority are investments within Business Area Games, with a few acquisitions within Partner Publishing and Film. Number of deals, we have done 50 deals since the IPO of acquisitions, not counting the assets or IP acquisitions, just counting companies. I'd also like to use the word acquisitions because I see that we more merge with fantastic talents in the industry. And even though the legal term is acquisition, I know that. And looking at the verticals and the bolt on acquisition mergers, We it's a good balance. And last year, for example, we invested SEK 7,000,000,000 into the new operating units, here defined as verticals, and SEK 6,300,000,000 in bolt on. Sorry for being a bit on this very financial terms when talking about people. Yes. And we continue to work on this topic across the group, both at the parent company, embracer here in Carlsbad, Stockholm as well, obviously, across our operating units. And We talked to we have been talking to at least way over 150 companies since the last quarterly. And currently, we are engaging with more than 20 late stage talks defined here, some under exclusive LOIs, some we believe that we will welcome to the group if concluded. But I would like to restate that Acquisitions could happen anytime, and we're trying to move the cycle of the whole business and the parent company away from announcing acquisitions at the quarterly reporting and then to have them more regularly integrated. Okay. Johan, I'm leaving over This is SpongeBob's slide here. Thank you very much. The sustainability quarterly update. A lot has been done during the quarter within the area, and we are really happy to say that we have done the 1st global Employee survey for embracer. And also very happy to see that we had a very high response rate From all of the people in the embracer group, 74%. So very happy about that. Of course, we are processing the information received, and we will get back with more Information around this in our sustainability report, which is part of the annual report. Another achievement during the quarter is that we have done a risk analysis and materiality analysis within the ESG area. This has been done together with an external Partner assisting us with this. And it has been Great work and the outcome is that we will be able to focus the areas within Sustainability that or ESG that matters most to all of our different stakeholders. We continue to work with the ambassador program. And the team there is really focusing on Spreading the word of the sustainability framework and also identifying Specific actions or initiatives and sharing these across the group. I would like to reiterate our smarter business framework, which is the 4 pillars that It underpins our look and view on sustainability. We have our Business sounds, solid work, great people and greener planet. And we really believe that these Four pillars in a good way also captures what's important for our stakeholders and the company as such and of course our employees. Can you just highlight that we during May have contributed to The Safer Together Fundraiser, donating, sharing knowledge within the Really important area of mental health. Lars? Thank you. So sustainability, part of that for me is The culture of gaming and part of that culture is the legacy of the industry. And as announced last quarterly, It's part of the culture here at embracer group level here in Sweden to build archive of all the fantastic industry products made the past 40 years. And happy to see that We now employed our first the guy on board, and he has actually acquired a bit of collections the past quarters or the past month. But now as of this morning, we're announcing to hire more people to build this archive. And here you can actually see a picture of one of our fantastic collections of Sager products. So really pleased about this, and this gives me a bit of joy sometimes in office as well as many of other people at the parent company. Happy to share more about this in the future. So deep dive, Johan, we define it as nonrecurring information. Yes. And we start off with looking at an interesting graph. It shows net sales in business area games during the last fiscal years by title. And The notion here is to see that we have a real diversified revenue base. Out of the total net sales within Business Area Games of 6,400,000,000, Top 10 titles amounts to 44%. And even if you Look at approximately the top 40 titles, you reached 74% of game sales. Interesting view. Also, I would like Give an update on the IFRS conversion on the regulated market. As communicated a quarter ago, The Board of Directors decided in mid February to convert to IFRS and thereby start the process of becoming listed on a regulated market. And the overall timeline for the project is estimated to be between 18 36 months from February. A lot has been achieved in the quarter. And we are very happy to say that we have signed with a senior resource that will Be instrumental for the overall process of listing on the regulated market. We have also strengthened the group finance team Here in Karlstad with a senior resource as Head of Financial Control, starts officially in June, but has already Been part of the early stage phases in the IFRS commercial. We made an evaluation and an agreement with an external partner to provide support and expertise Throughout this IFRS conversion project. 1 of the big fours. I would imagine you are. Yes, it is. Yes. So and also this quarter, we present you with Project RY scattergraph where we look at the contribution In relation to the investment for release games and the sample, As always, it includes titles where we have either had sales above SEK 40,000,000 or investments of SEK 40,000,000. And it's roughly it's a bit more than 30 projects in the sample. And of course, if you look down at You would have at 1.0, that will be the breakeven where the contribution is equal to the Investment. The weighted average for us is 3.3. And if you look at this in terms of return profile, if you have an investment period of Maybe 2 to 3 years and then you have a return period of 2 years. The internal rate of return on In average for organic investments looks very attractive, which is also why it's the key priority to continue to invest into organic growth. We were presented with a challenge this quarter in the graph. So to get all the scatters into the diagram, We needed to adopt the y axis here a bit. Yes. Last but not least, we will take time to go through our PPA process. And the reason is we got a bit of questions from stakeholders and shareholders past period. So I think it would be great to just revisit the topic of how we're doing the PPAs. So Yeah. So basically, It's a 5 step process. It starts with number 1, where you identify the purchase price. And of course, that will be then including upfront consideration and then a conditional consideration. Step number 2 is to identify the value of what you have purchased, which is the net asset value in the target company. The first step in this is to Obtain an opening balance sheet for the target. And that's basically the balance sheet at closing date of transaction according to the target's statutory principles. Then you perform a perform and document a GAAP analysis where you look at the statutory gap visavis the K3 and Embraiser gap. Then next after that, You can in part or when you look at the acquisitions that Embraiser makes, It's very common that you would need to look into the recognition of ongoing game development, Always taking into account that it needs to fulfill the criteria for capitalization On the K3, another thing to look at is recognizing completed games development project. They also need to fulfill the criteria of K3 to be able to be capitalized. And in that respect, you also need to take into account amortizations That will be related to the specific project. Could be other adjustments as well. If you acquire a company that Historically has had a more cash based accounting. Well, then you need to change it to accrual based accounting. Always when doing this, it's based on materiality and traceability, the availability of historical data. Once that's done, it's step 3, 4, 5, basically calculating the surplus value related to the transaction, Allocating the surplus value to other identifiable acquisition related Intangible assets. And then last but not least, you will have the residual, which is basically will be classified and reported as goodwill. When we look at this, We feel that by following the above 5 step process, it's our assessment that The operational EBIT presents a representative picture of embracer's operational and organic performance. We can have a bit of a deeper look into step number 2 on this slide, where you recognize ongoing game development. As said earlier, it needs to always fulfill the criteria for capitalization on the K3. And what you start to do is that you assess the type of commercial agreements that is linked to the relevant projects. Generally speaking, there will be 2 types of agreements, either an internal development agreement or a work for hire development agreement. And then for internal development agreements, you should Capitalized development expenses during the development period and start amortizations as the game is As the development is completed. For work for hire development projects, development expenses will be occurred or expensed as occurred and revenue will be recognized based on the percentage of completion method. Based on these rules, we can conclude that if you have a studio working with work for higher development projects, They would not recognize any intangible assets related to game development. Studios or publishers that fund their own development projects should recognize ongoing game development assets. If you have a publisher that applies K3 and it acquires a studio that is currently working on a Project funded by the same publisher. You will have at the closing date, the Publisher has already capitalized its investment into development project. Hence, there will be no additional Recognition of ongoing game development in the PPA relating to the acquisition of the studio. If you look at the financial year, we have SEK 162,000,000 has been recognized as either Ongoing game development or finalized game development in the acquisition that has been closed during 2021. Important here is to recognize that 2 companies has had important work for hire businesses. 1 is Sabre and the other is Flying Wild Hog. And looking at existing publishing relationships, At least there has been existing publishing relationships with 4A and Purple App. We have also made a simple example of operational EBIT, and it's 2 different cases. The underlying assumptions are the same. And on the Basically the assumption is that you are developing a game. The expenses are €10,000,000 per year and takes 3 years to do it. And the ROI expected is 3 times the investment and it's 2 thirds in year 4 and The last 4th in year 5. And the assumption is also that you released the game in the beginning of year 4. The first case on the top end slide shows an organic investment and its implication on operational EBIT per year on the left hand side and on the balance sheet to the right hand side. So basically, during the development phase, year 1, 2, 3, it's 0 impact on operational EBIT. Once the game is released, you will get Contributions, so the net sales from the game, and that's also when you start to amortize the development project. The second case shows a situation where the studio publisher is acquired at the end of year 2. And we also are assuming that the value of the ongoing game development fulfills the criteria of capitalization, And it's thereby recognized in the opening balance through the PPA, which is the yellow column on the lower right Hand the graph. What's interesting is that the operational profit impact during this time period is the same. So you would have a 0 impact year 1, 2, 3. And then you would have the same pattern as if it would have been an organic investment. Yes? Thank you so much, Johan. With that said, We would like to walk over to Oskar for Q and A. Great. Thank you. So let's start the Q and A. And I mean, I want to start by saying that, obviously, embracer is maturing as a company, and we just heard that embracer is now a great grandmother. So what does that make you, Lars? Good question, Oscar. Well, let's dive into Q4 to start here. And starting with Valheim, same as we did last quarter, 6,800,000 units sold and I would say one of the most played games in the world. What do you what can you say about the sort of guidance of 1 to 1,200,000 copies in Q1. Is it conservative? Is it realistic? And what do you see for the rest of the year? No. Again, this is a publishing project. So in the respect of the team at Iron Gate and the publishing team of Koffistein, Obviously, I've been talking to them before providing this number, and I'm happy to see it's still performing well on steam, even though the first craziness of the in February is obviously on a much lower level now. So I think it's hard to give a guidance about this quarter, but I would imagine it's a game that people will enjoy playing not only this year, but for the decade to come. And I know the team are working to bring out more content, and there is many other ideas for that game in the future. But keep in mind and with the respect of our philosophy and strategy of leaving great people, doing what they What to do, it's a team of 5 people. So but they made an amazing game, so I have the full trust they will Continue building on that. And I suspect, given the interest in this game, that there must also be interest from console platform owners from streaming platforms and what have you. So I mean what is the plan in terms of porting to console new content and how much is possible to scale up the team, both internally and also with the support from Koffiefstein and embracer? I'm quite certain there has been a lot of interest about that came on various platforms. But this is not about a short cash grab to just and do everything as quick as possible. It's all about building a long term franchise and letting the great people doing it taking their time. So even though I'm sure there is some short termness you can grab, I think the team they have a plan and they will communicate that plan when they are ready. So Yes. And looking at Q4, the report here, I think what stands out is, apart from Coffee Stain's Remarkable performance, I think, margins operating margins and gross margins, starting with gross margins. What is driving the strong gross margin performance? I guess it's high share of game sales and I think a record high digital share of sales as well. Johan? Yes. Yes, Sozka, it's of course the favorable product mix shift towards Business Area Games and also that the share of digital is high in the quarter. And also, as we mentioned, within Partner Publishing Film segment, Film has had a solid performance in the quarter. That's the main drivers. And also if we look at the specific business area games, we also see that, that's A bit better than last year, mainly driven by what we explained. Yes. Great. And so just, I mean, checking, but you spoke a little bit or indicated the gross margins for Wallheim of, I think 30%, 35%, excluding the ownership piece. Is that still sort of the case or Well, we haven't publicly announced I think Kofenstein has a business model of publishing margin, and then they invest in the minority into the game studios, and that's how they operate. And Iron Gate are in line with that. And I don't think there's change from what I've been stating before. Great. That's clear enough, at least. And I mean, I think it's quite obvious that you did receive a contribution from profits from associates from Valheim. So I guess we should think about it as probably lower contribution in Q1 as it came early. Is that the case? Yes. We were Happy now we had a financial year end to recognize that. And do you want to know if you have more color on that? No. So it's recognized and up until the end of March. And then what it will be Going forward, it's basically depending on the performance of the title. Yes. And just on the drivers apart from Valheim in the quarter. I guess it's quite a broad back catalog performance. You mentioned Metro, SnowRunner, Wreckfest and the Kingdom Come. Anything that stands out in Q4? Well, you saw the slide of the very diverse range of Title is performing and titles like you always see titles like SnowRunner now and Metro and Spongebob and World War Z and Satisfactory, Deep Frog, there is 10, 20 titles constantly performing every quarter. And obviously, that is driving a stability in the back catalog revenues. And a little bit of a boring question, but other external costs, if I may, I mean quite low in the quarter. Is that due to few releases and quite low marketing spend or anything else Yes. So it's basically lower marketing spend, as there are no Or fewer audio releases and then that's the main driver. Great. And then quite a lot of acquisitions announced in conjunction with Q2, I believe it was, which is, I mean, a little bit hard to sort of keep track of. Can you just talk a little bit about, perhaps for you, Johan, about the M and A contribution compared to Q3, what has sort of been added sequentially here? I'll start with that. For you mean in Q4? Yes, in Q4 compared to Q3. I know you signed finalized on some acquisitions mid quarter. Yes. So the acquisition that has been added to the reported numbers for Q4 It's basically the ones closed during the quarter, which is ATA and IUGO and SEM. Yes. And in the greater scheme of things, it's not any significant revenues. Even though every revenue is important. Yes. And then I think also important here, capitalized development sequentially, not a huge increase compared to what previous Acquisitions have sort of added. I guess, is that an effect of these studios partly being more work for hire with less capitalized development? Yes. Yes. That's the effect. And we mentioned it in the quarterly report also that Specifically for flying WildHog, it's work for hire contracts. So that's So we actually we revisit the PPA. Yes. So during the 4th, Flying Wild Hogues was announced in the end of Q3. And then During the final quarter here, the team has spent a lot of time on looking through and assessing these commercial agreements. It's Sometimes difficult, take time. And the conclusions together with external expertise is that They are work for hire contracts, and that basically means that what was originally added To ongoing game development in Q3 is not there anymore. And the subsequent So subsequently, you will have an increase in goodwill. And you can also see that in the ongoing capitalized development, which didn't increase very much here in Q4. And then turning over to Q1 and the next fiscal year, starting with the raised guidance, SEK 2,800,000,000 to SEK 3,300,000,000 in completed development, which is, yes, SEK 300,000,000 higher, the range. So is that fully a result of the addition of Aspire and more importantly, Gearbox? Mainly driven by that. There is a bit of other additions as well. Okay. So there is always additions to the coming periods. If you are early in the financial year, you can still sign publishing projects coming out in the financial year. Obviously, the later you come into the year, the harder it is to sign new publishing releasing in the same year. We are still in that phase. We are adding new projects for publishing at least that we'll be releasing in the current financial year. Important to state, now we're providing this guidance and we had discussions. We Now we are this guidance is based on the best assessment of the management teams across the world and their expectations of their pipelines as of today or yesterday. So yes, so that's how this forecast works. Yes. And a little bit more short term Q1, And I can just start off by saying that it seems like you have a really strong market share on Steam, an important platform right now. So with that in mind, you guide for SEK 300,000,000 to SEK 350,000,000 in completed development in Q1, which is, I mean, relatively low given the size of the company now and despite, of course, Biomutant. What can you sort of say about the mix there between large and small titles? Well, if you compare that number to the 117 we had in Q4. It's a quite healthy increase. So but a good chunk of it is Biomutant. And then there is a number of other releases. But obviously, Many of the product releases are not that costly that we are releasing. And obviously, the switch project they've been working on the past year or so, It's important, but it's obviously not any significant amounts. So that's why the overall number is what you see here as a bit lower than you expect, but that's the way it is. We're stating, we've also been acquiring in the past year years companies that are very efficient, kind of having a quite low cost base and a very high revenue potential of the projects. So that is also lowering that number of completion value. Yes. Very clear. And Biomutant, I mean, Finally, it's time in 5 days. And you wrote in the report and talked about it on stage here, Strong preorders above management expectations. So I mean the key question here is what are the management's expectations? Well, you always have a this is a title that is also physical. So there is an expectation of preordering. We had collector's editions, Atomic additions and so on made for years. Happy to see that they are more or less sold out, so you should be glad to find 1. Also happy to see that there is a lot of love, seems to be a lot of love in Japan for the game. So there is also a healthy addition from preorderings in Japan. So well, I'm excited as most others to see how, first of all, the gamers will enjoy the game. So the reviews from gamers, obviously, will be very important, but also the reviews from our well respected critics around the world. So I will expect a lot of reviews coming in and released the night before release. Great. And in terms of Metacritic, the critic reviews and steam reviews, What is most important? What are you happy with? And any first indications at all? No, I don't want to step ahead here. Stefan and the great team at Experiment have worked 20 fourseven almost, partly to make this happen. And now All people across the publishing team and Stefan and the team are working to with the critics and others to Explain the game, talk about the game, so it's not my job to sit here to tell anything. And to be honest, I don't really have any information about that. And I suppose reviews will come out from critics the night before that. That's the public information I have. I guess that's great. So okay, great. And a few more questions from me before turning over to some questions from the web here. Also looking at the guidance, turning back to that per quarter, it's notable that I suspect that The largest chunk of the projects in terms of value comes in Q4. So first of all, is it correct that The 2 the at least 2 AAA releases will come in Q4, starting with that. That could be an assumption, Askel. It's very delicate by me here and in the respect of the philosophy of letting Our great teams talking about the projects and now there's a lot of interest from gamers around the world. So In that respect, I like to have them talking when they are ready. Yes. And I mean, You are definitely guiding for, I mean I'm talking through the numbers, Oskar. Yes, absolutely. But I think it was SEK 1,600,000,000 in Q4. So assuming that it's 2 AAA titles, what would be sort of the consideration looking at Q3 versus Q4 for AAA title in terms of competition, in terms of the volumes of new consoles sold, etcetera? I think, obviously, it's I'm pleased to see there is a strong demand of the new consoles. So there will be more consoles on the market. We expect the new level of gaming to be stable and to increase over the coming years. And obviously, that will also help to when releasing fantastic projects. But in the end of the day, it's all about putting out quality products. So quality comes first It's really the philosophy. And I'm really confident about the pipeline for the year, and I've been Seeing a lot of these products myself, and we have external companies doing reviews, mock up reviews and other things. So Yes, it looks very solid. Okay. Great. And then I see we have some overlapping questions with the web cast here. So I'll go over to that. And starting with a question here from, Let's see, Benjamin May from Berenberg. Is the big Q4 weighted release schedule a function of waiting Well, actually, I just asked that, so I'll skip that. The second question is that Take 2 indicator in the Q4 on Tuesday night, a major new release from Gearbox will come this financial year. Can we make an assumption that this will feature in the larger Q4 period? In respect to Type 2 and Gearbox, I don't really have any comments, so I'll let them speak. I'm just pleased and excited what they're doing together. Great. I'll view that as Confirmed. Just kidding. But next question here on, I mean, the market conditions, I suppose. We have from Benjamin May again. We have begun to see a decline in U. S. Spend on video games in April given the tough comparable of last year when consumers were staying home. Have you seen any notable trends that would suggest this is continuing or reversing? And do you anticipate this to impact your back catalog growth? I know we had a bump in April, May and then It came down last year. But to be honest, I think we have many titles performing well on the platforms right now, and Easybrain's are reporting good performance. And so it's a bit being in premium mainly, It's a bit lumpy in that sense. It's you don't have the daily you don't have the data by the minute as you have in free to play and mobile. So I think those companies could talk more about that thing. In Premium and within embracer and with all the organic growth we're having, it's all about putting out great quality content. So I've been stating I'm expecting with us grow organically solidly solid this year. So that's really the comment I could have on that. Very good. And then turning over to a question from Ken Rump. Hope I pronounced that correctly. Can you comment on the largest projects within the SEK 3,000,000,000 guidance this year, not by name, but for instance, the largest in absolute numbers or the total of the top 3, top 5 or top 10 games? Any sort of input on that? No, I think I provided guidance previously about We have been talking previously about some big projects in the previous quarterly reporting, and there is no change to that. And I just see a very wide range of fantastic projects. And obviously, we could have projects with a quite low investment breaking out, and then you have projects the other way around. So I'm sorry, Ken, I don't have a top 3 guidance here for you. Understood. And then turning over to a question from Erik Lindholm Rejestahl from Nordea. With Easybrain performing above management expectations with limited IDFA impact, is it fair to assume that you're leaning towards the higher end of guidance range that you gave in conjunction with the acquisitions. No. First of all, you need to remember, Easy Brain, they are really data driven and quite conservative. So we had an expectation entering with a quite low number in the current quarter and then growing over the year. Now they are a bit above that number. It's not massively, but forming above that number, which really pleases me, obviously, just having them on board. I think the IDFA is Super early, and I think the implementation is on very small amount of Phones. So it's very early to say. But so far, we have not seen any Change in the numbers. Yes. And I think this is, I mean, an interesting topic. And My impression is sort of that the different players in the ecosystems, consultants, ad agencies and so far and so forth are sort of managing to go around the system a bit. But the fear is, I guess, that Apple will sort of strike down on that to which may have a bigger impact in due course. Is that also what you're hearing? Or do you have a view there? There is so many different views on this. In the end of the day, If we have the world leading team doing what they're doing, I'm confident they will manage this as good as and or the best as anyone could do. So that just gave me confidence about the long term of Easy Brain. Great. And then a question from Nick Dempsey with Barclays. With the amortization flowing through from gains released in Q4 2022 in particular, should we expect operational EBIT margins to be clearly lower in full year 2023 than in full year 2022 as it comes late in this current fiscal year. I think it's Too early to start talking about those margins. I think in general, when we're looking at the long term business plans across the group, we see a healthy organic growth, not only this current financial year, but also the years thereafter. Yes. Then I have some questions that were forwarded to me here. In Q3 'twenty, I believe, the report, it was mentioned that embracer would be working towards being listed on a regulated exchange. I mean, what can you what exchanges are being discussed? Does the company already meet the regulatory requirements of the exchanges being discussed? And where are you on the time line there? It's quite a long time period. Any update there? I think the main focus right now is the IFRS project and the financial control. I've been talking to Nasdaq, and we now hired a senior resource coming in. I'm confident we will find its way. I'm interested to talk to the other stock exchanges and to have a discussion whether it's It's relevant to have a dual listing or but in the end of the day, I think Stockholm would be the main That's my assumption, but I'm open minded as always. So It's many factors. One factor I would like to talk to our shareholders about this, what they think. It's also about the liquidity of the share. If you split it to too many stock exchanges, that could hurt you. But also our stakeholders, outside Swedish, Shareholders, but also the entrepreneurs, remember, more than half the companies owned by the entrepreneurs and creators that joined the group, And perhaps there is a demand and wish to have local public market trading share as well. So there's many factors, and we will take our time to do this the best absolute way we can. Understood. Another question here. Someone wondering what's happening with all the content deals that are done within the group and how these are recognized as revenue. Is the wholesome recognized immediately when a game is released? Or do you portion it out over, yes, I guess, the contract length? Johan, Johan. It depends on the you need to assess the Individual agreement to see if you fulfill the criteria of being able to recognize this That's revenue? Yeah. So the answer is that it depends. Of course, if and one of the criteria is that you need to fulfill the performance obligations to be able to recognize the revenue. And you need to assess if you have done that. And that depends on each individual agreement. And for example, just to add on there, if you sign, let's say, 12 month agreement with Epic Games, I suppose there are a lot of sort of minimum guarantee agreements. Would that be recognized upfront or over time? Or does that depend as well? Of course, you need to look into the specific agreement relating to that Specific game. And then in general, if you have a Minimum guarantee, it would be recognized over The time period and not upfront. Okay. Got it. Another question here on flying WildHog. What you went through this a bit, but maybe it could be good to go into detail. What happened to the company's project on the balance sheet? Why is $29,000,000 going to IP rights and other and SEK 96,000,000 to goodwill. Yes. So I think we touched on it earlier. But In the preliminary PPA that we had in it was closed late in Q3. And in the Preliminary PPA we had there. The agreements or the development projects We're deemed to be internal development projects at that time, and the effect It was minimum because it was late closing in Q3. And now as the work has been Through the onboarding, when you work with the PPA, the assessment is that these agreements are work for hire agreements. And if it's a work for hire agreement, you cannot capitalize an intangible asset in terms of ongoing game development. So Then we need to remove it, and it will be a goodwill. Great. And that means going forward, the same deals or agreements will not be capitalized either, Gokhav? Yes. And as you said, of course then, There is no capitalization in Q4 related to that because you don't capitalize the development spend. Instead, you expense it as it occur And you recognize the development income according to the percentage of completion method. Very clear. Thank you. And then we have a question from Matti Littonen at Bernstein. Thank you for the game's cost value guidance by quarter. Could you tell us roughly how much Biomutant is of the Q1 total? No, I can't tell you exactly, but it's a healthy share of it. Okay. I think we'll have to settle for that. And we discussed that on M and A, you've now stopped Back to my questions now. You stopped announcing acquisitions in conjunction with reports, so more focus on We're trying to avoid it, To focus on the actual report rather than the M and A announcement. Trying to avoid interesting going forward. But looking at the comments on M and A, what can you say about the mix there between new potential operating units in the group and smaller sort of add on acquisitions in the operating units. No, but there is it's hard to give you a color on that. I think in general, most transactions you will see is when we merge with game developers and bolt ons to the existing operating units, building for the future. And then but there is We've been talking to quite a few very sizable potential new verticals during the past period. Of that mentioned, 20 plus dialogues. There is a wide range on that 20. I don't want to provide more color on that. Okay. And the comments in the report about being patient about focusing on quality first, also in M and A. What I mean, what do you want to say, what you mean really there? I think For us, it's important to have quality in the process, due diligence, SBA, dialogue, talking to the team, assessment of the games development pipelines, understanding the business. That needs to take some time. And there is a lot of stakeholders, some shareholders pushing, why don't you do more deals? But this is not about doing deals like every morning. It's about the decade to come. So we need to Really get together with the right company, and we need to have the right processes. And now having A fair sizable more sizable business than we had 5 years ago. It's important that Johan and the team also having Good process to integrate all this. And they've done a fantastic job, and I'm really happy now to have to hear the green lights from also external parties about the processes you've been doing and auditing and all that. But I don't want to destroy that by just throwing things in here overnight. Understood. And then I had a question from the web there on Gearbox and Take 2. But looking at the movie instead, I saw that it's supposedly coming out in 2022, the Borderlands movie. In general, what is it higher potential to release a game in conjunction with a movie coming out. Is that reasonable given that the last Borderlands come out? I know both the Gearbox and Tekzu has a lot of great plans for the IP and a big love for the IP. So but I will let them communicate their plans whenever. So in the respect of them, it's that's operating thing for them to Communicate. And what are you seeing? It hasn't gone very long since the acquisitions were confirmed or closed. What can you say about the dialogue between the different studios and groups? And what how are the plans progressing and potential synergies as well? Well, Again, I think we are one of the companies that has the most synergies within the industry. That's because most of the mergers and acquisitions are done within each operating units that are fully integrated. Across the group, there is more Ongoing projects than ever, I would say, and really good dialogues about both technology, publishing and distribution, marketing, business intelligence. So I think that is a real interesting upside or potential over the coming decade, what the wider ecosystem of embracer could do both financially for us but also for everyone joining. And I think that's why it makes sense to continue our strategy to build a greater and bigger company is The more fantastic people and companies and talents we get on board, the more it makes sense to join. And on that note, are you seeing an impact from, I mean, the Gearbox acquisition, Easy Brain and Aspire as well in discussions? Yes, sure. Randy and the team is way well into the discussions. And so yes, Great. And the notable signing for Koch Media's part of publishing business announced, think it was yesterday on Twitter at least. Activision Blizzard for most EMEA EMEA Markets, excluding Italy and U. K. What is the impact of that and some context as well, if possible. No, but I think Kors and Klemens have been talking about consolidation in terms of some bigger players are start using their services over time. And he talked about that already 3 years ago, and I'm pleased to see that start happening now. Doing such a thing is a big thing. So it will take a while into such a thing as fully integrated and it's happening. And So again, this is a long term thing. It's a long term relationship. It's not about rushing in this quarter. So I think with patience, you will see a gradual top line revenue coming in from potentially that contract with other contracts in the future. At the same time, we had another partner moving out from because They were in sourcing. So I think the margins Mix between them is over time, we will Clemens, I've been stating, you can see the growth. I've been stating to you, Oskar and the marketeer, we see a stable Partner Publishing business. So I think as a financial analyst, you should not Be carried away. But with that said, I mean, I expect that Some of the title activation Blizzard's has is maybe bigger than Codemasters, for example. Is that a fair assumption? Or is there anything I'm missing in the respect of the partners. I don't want to talk about titles. And in terms of phasing during a typical year, I mean, I guess the seasonality may change a little bit from F1 titles coming out over the summer to perhaps Call of Duty being a key title in fiscal Q3, for example. Is that Again, I don't want to talk about the details. I think that's why we have such brilliant people like you and other analysts to do this Merck? Fair enough. Fair enough. Let's see if we have any more questions from the web. I mean, some of an interesting short video with or talk by Clemens on video link there. Any hints on Caicos project at all you want to share? One of the biggest IPs in THQ. Kalko is a well trusted partner to the team since 7 years. So I'm sure they are entrusting interesting things to them. So I don't have anything more to disclose, sorry, Hosk. Understood. And Looking a bit further out, I mean we have the guidance for this fiscal year coming now, which has seemed quite exciting. But what can you say about the coming years if you compare it to this year? Should we expect higher value of completed development? Or should this be seen as a remarkable year in terms of releases. The thing I've been stating, we see on top line a health organic growth, the current year, and I expecting that a growth organic growth to continue the years to come. I think that's the color I can give you at the moment. Okay. And I think actually another question here. Just an update on the progress of acquired companies. And I think one important example being Sabre Interactive. If you could just talk a little bit about how when you acquire a company, how you sort of change the focus from work for hire to internal development and what effects that have over time and just do that for some key acquisitions would be interesting to hear. Every company joining are accessing the ecosystem and Smorgas Board of optionalities, how they could how they potentially could change their business, how they could use synergies, how they can use publishing capacities. At the same time, with respect of their culture, mindset and entrepreneurship, They have the operational freedom if they want to continue working with external parties and if they want to continue working with our fantastic external work for hire clients, it's really their decision. So I'm really pleased to see the performance of all our companies post integration. But also it's important to say that they are different in mindset and how they operate and the business models. So and I don't believe in that I should tell them here's the way you should operate. That's my way or no way. That is not the way I operate. Great. And then I think time to wrap it up. So I'll ask a final question from the web here, Quite classic question. Where do you see yourself and embracer in 10 years? The most common question actually is since the IPO. And I've been stating since the IPO, I want to build a sizable Sizable business with a long term mindset complementing the industry with a good business, with a Strong financials with the stability and diverse. And I think we are on that path, and God knows how what that path will look like in 10 years. I think it's important as an operator and entrepreneur to make the right daily decisions along the way. And my experience, if you obviously, I have in mind where I'm going and we are what where we are going as a group. But if you start, you need to be adaptive and flexible. And there is a lot of things happening within the industry. I was stating, for example, this morning that realizing that the economic value of the games released Past year was about $100,000,000 but we the platform holders take $200,000,000 Is that fair or is it over time? I think there There's things that hopefully will play our way as content creators over the coming decade, and I would like to highlight that this morning. If part of that fees could come to create greater games for our fantastic gamers and customers. That is really what I would like to see. Great. I think that's a good ending note. So yes, thank you, everyone, for listening in. That's it for the Q4 presentation. Thank you.