Embracer Group AB (publ) (STO:EMBRAC.B)

Q2 20/21

← View all transcripts

Nov 18, 2020

Fraser's fiscal Q2 report, we have CEO and Founder Lars Bingenpost presenting, Thiebouet and CFO, Johan as well in what I consider to be a very strong quarter with very strong back catalog sales and not the least 13 acquisitions, So very active, and I think I'm not only speaking for myself here, that will be very interesting to hear some more comments on the acquisitions and hopefully get some help in understanding all of the logic behind these many acquisitions and strong additions to the team, I would say. So without further ado, I'll leave it over to you, Lars and Johan. Please go ahead. Thank you very much, Oskar, and welcome, everyone, to Carlstad. I'm happy to announce another stable quarter. We had actually our best quarter ever in terms of revenue. Close to all time high at $1,500,000,000 Partner Publishing, including the film business, also had one of the best quarter ever with close to $900,000,000 revenues in the quarter. And profitability followed. We earned €653,000,000 in the quarter on our operational EBIT. Also happy to see that we're generating more cash, actually more cash than we could at the moment at least reinvest into further development. So we generated $312,000,000 in free cash flow. The business was generated through various factors. I would like to point out especially the strong back catalog sales. And the back catalog is defined as old titles not released in the quarter. And in the end of last quarter, we had Spongebob that did perform very well in the quarter. But we also had a continued performance from many of our defined as game as a service titles such as Satisfactory, Deep Rock Galactic, SnowRunner. SnowRunner actually yesterday, I think, now reached €1,500,000 in sell through. The Metro series continues to perform, Breakfast and many, many others. And looking at the releases in the quarter, we had a remake of Destroy All Humans in July, and it did perform also according to expectations or better, as well as the Kingdom of Ameluz rereconning in the end of the quarter did also perform well, Looking at the KPIs. We continue to get more products across the group. The end of the quarter, we had 135 games projects under development. That's coming out from 102 studios, including the external studios. As of yesterday, we had 46 internal studios. And we are engaging 3,500 more than 3,500 games developers across the group. And we continue to invest. And this quarter, we invested SEK445,000,000 dollars That you could compare to the value of the new leases that were 311,000,000 Also looking ahead a bit, we gave more details in the quarterly this morning that we have 2 more quarters to go this quarter in this financial year. The current Q3 ending in December will have lower activity on new releases. We expect new releases to be completed for €150,000,000 to €175,000,000 That will double in the next quarter, including a notable title from THQ Nordic that are expected to NOK 300,000,000 to NOK 350,000,000 So the financial year total will be, as it looks now, SEK 1,000,000,000 to SEK 1,100,000,000 I also commented that next year, we are looking to double that amount in the value of the completed games. The M and A outlook. This report are published before the acquisitions we made just starting 5 minutes later. So we did have a lot of activity up until the report, and I'm sure we'll have it after this report as well. But in the end of the quarter, we had SEK 4,700,000,000 available, and we raised another SEK 5,800,000,000 in the quarter on October 7. And on Monday this week, we got a new mandate from our shareholders to raise up to 10% in equity for mainly for acquisitions or for acquisitions. With that said, I would like to leave over to Johan, our CFO. Thank you, Lars. Thank you. So let's start by having a look at the P and L for this second quarter. We have net sales of close to SEK 2,400,000,000 in the quarter, which is 89% more than the corresponding period last year. Growth is driven by both Business Area Games and also part of publishing film. If you look at our gross margins, they are improved from 50% to 57% in the quarter. And it's driven by improved profitability within Business Area Games. And a main important contributor there is the inclusion of Sabre Interactive. The increased top line and improved margins fell through to our EBITDA, reaching SEK969,000,000 in the quarter, which is up 132% versus last year. It should be noted that in the reported EBIT, it's including a noncash, nonoperational accounting profit of SEK 41,000,000 related to a revaluation of participations in associated companies, and we'll come back to that more on the next slide. Operational EBIT reached SEK 653,000,000 in the quarter and yielding a operational EBIT margin of 27%, which is 8 percentage points better than the corresponding period last year. Adjusted earnings per share, SEK 1.8 per share, up 177% compared to last year. On a trailing 12 months basis, sales reached SEK 7,300,000,000. Operational EBIT reached close to SEK 2,000,000,000, which equals an operational EBIT margin of 27% on a trailing 12 months basis. Let's have a look at our amortizations. As usually, we distinguish between operational amortizations, which is SEK 275,000,000 in the quarter and acquisition related amortizations, which amount to SEK 5.21 dollars in the quarter. The majority of the operational amortizations are related to our game development. So amortization of finalized and released game projects. Further, there is amortizations of SEK 43,000,000 related to our mainly our film business segment. Also coming back to the SEK 41,000,000 that was mentioned, it's included in our reported EBITA and EBIT for the period. And as said, it's a revaluation of shares in associated companies, Palindrom, to be specific. And the profit is recognized according to Swedish GAAP K3, and it relates to Embracer's increased ownership in Palindrom during the quarter. The profit has no cash impact. It's not operational. Hence, we exclude it from our operational EBIT measure. But we can't exclude it from the EBITDA and the EBIT according to accounting rules? No, no. It needs to be within the reported EBITDA. Yes. Very strange in a way. Agree. And then for the acquisition related amortizations of EUR 521,000,000,000, the majority relates to goodwill. It's €400,000,000 And the 2nd largest is IP rights, it's €100,000,000 reaching the reported EBIT of SEK 173,000,000 for the period. I would also like to note here that we, in the report this morning, gave a guidance on acquisition related amortizations for Q3 and Q4 and going on for the next 5 years in the report. Looking at Q3 and Q4, the acquisition related amortizations is expected to reach SEK 630,000,000, SEK 34,000,000. And that's, of course, excluding anything that happened this morning. Turning to the cash flow statement. As we said in the beginning here, cash flow from operations were solid in the quarter. It's a growth of 134% versus the same period last year, and it's driven by our operational profit. There were limited changes in working capital. We closed a number of transactions in the quarter and the cash flow effect of these completed transactions amounted to SEK 774,000,000, mainly related to Vertigo 4A and also NWI. We continue to invest into our business, investing SEK 484,000,000 into intangible assets And also, we had a positive cash flow from financial activities of SEK 500,000,000, which is related to increased utilization of existing credit facilities. All in all, this sums up to a free cash flow in the quarter of SEK 312,000,000. Looking at the ZAR 484,000,000 is being is being invested into our games business area. And out of this, the majority is being invested through internal development versus external development studios. Another approximately SEK 40,000,000 is invested into our Film business segment. During the quarter, we also completed games development of SEK 311,000,000. And if you look a bit towards the historical development of investments into game development, we can see that we are continuing to increase. It's above 30% above what was invested in the same period last year. Of course, the investments that we make into our game portfolio affects KPIs. So as I said, we have 135 ongoing development projects at the end of the quarter. We have also increased the number of developers in the period, totaling almost 3,600, where 1,000 is external, 2,600 approximately is internal game developers. Worth pointing out is that we have grown our headcount organically 17% year over year. So there is a very active recruiting across our companies and studios. So we're not only growing by acquiring, but we're also growing by increasing the team sizes across the world. And at the end of the quarter, we had 102 development studios that we are working with and 46 of these are internal. Looking back at the value of completed game development projects, we can see a clear trend that it's increasing. If you look back over the last 2 years, and it reached the highest amount this quarter with EUR 311. 1,000,000. And as Lars said in the beginning, looking ahead, we expect the amount to be lower in Q3 due to fewer releases. And then going back up to $300,000,000 $350,000,000 in the last quarter of this fiscal year. On a trailing 12 month basis, the expected value of released games for this current year is in the span SEK 1,000,000,000 to SEK 1,100,000,000, and it's expected to be SEK5 as much in the next financial year. Looking at our balance sheet. We have total assets of more than SEK 20,000,000,000 in at the end of September. One big part of the balance sheet is our intangible assets, almost SEK 14,000,000,000 at the end of September. If we take a closer look at the intangible assets, we can divide them into operational intangible assets and acquisition related intangible assets, where the acquisition related intangible assets amount to SEK 10,000,000,000 and the operational intangible assets to approximately SEK 3,000,000,000. And of course, the ongoing game development projects at the end of September is the largest individual assets within the operational intangible assets. And looking at the acquisition related intangible assets, goodwill is the largest individual asset. We also have a we continue to have a solid cash situation. At the end of the quarter, we had SEK 4,700,000,000 in available funds. And in reported cash and bank balance, it was SEK 3,500,000,000. We can also note that we after the end of the quarter, we refinanced the loan from the sellers of Sabre. The loan was USD 101,000,000 and it was refinanced with the bank loan amounting $96,000,000 And the difference of $5,000,000 is a discount, which will have a positive effect on our financial net in Q3 of approximately SEK 44,000,000. But not the operational EBIT? No, it's below operational and reported EBIT and in the financial net, yes. Further, this refinancing allowed us to realize an unrealized exchange gain of approximately SEK 112,000,000. And the refinancing did not have any effect on the available funds. Because we borrowed that money much cheaper at the major bank major European bank. Good. Right. Thank you, Jan. Thank you. So let's look at the games or first of all, let's look at the breakdown of the sales. So first of all, looking at the back catalog or let's put it this way, let's look at the new releases. We're a bit lower than last quarter. It was 43%, meaning the back catalog was significant in this quarter. The digital share are steadily above 70% at 76%. And it's at 75% on a trailing 12 months basis. And in this quarter, we had 66% of the revenues in Games Business Area generated from owned titles, owned IPs or licenses, long term licenses. Looking at the breakdown of net sales. On a trailing 12 month basis, we are at SEK 4,900,000,000 in the games business area. And at the quarterly basis, we were at SEK 1,500,000,000. So let's start with Deep Silver. Deep Silver business area consists of the publishers of Deep Silver, Milestone, that is also a developer, and now Vertigo Games and Warhorse. And in the quarter, Deep Silver area business area had sales of €507,000,000 That is 15% increase year over year. And on the trailing 12 months basis, we are at SEK 2,100,000,000, which is actually an all time high. Key releases in the quarter were Waste Land, Iron Harvest and the indie title Windbound early in the quarter. And as mentioned, back catalog drivers were the Metro series, the Saints Row series and the Kingdom Come Deliverance continues to perform. Also, Milestone had a strong performance, especially on digital channels. And the Moto GP20 released in early quarter continued to perform in the quarter. We acquired Vertigo Games during the quarter and actually here in Karlstad, that's September 2016. They will be consolidated from 1st October. And looking to the pipeline, obviously, they're having a very wide pipeline here, and here is just a few titles we usually mention here that I don't want to get deeper into, I'm sure Oskar will. Moving slide to Tissue Nordic. We reached EUR 567,000,000 in revenues in the quarter, which is a 72% increase year over year. And the trailing 12 months, we've reached SEK 1,700,000,000 which is an all time high. Key releases were the mentioned Destroy All Humans and The Kingdom of Amalur. Both titles exceeded the management expectations. And the main catalog driver was Sponchbob, even though they're having a very wide range of titles at HQ Nordic that still generates notable revenues every quarter. And in the quarter, we established 2 new studios, Ashbourne Games in Brnoa And a new satellite studio, Rainbow Studios in Montreal, Canada. That will be a sister studio to Rainbow Studios doing the MX games in Phoenix. And in the quarter, we acquired Pow Pow Entertainment based in Vienna. And looking at the selected pipeline, we're having a Spongebob and the Stroekan for Stadia. And in the end of the quarter, we actually have a title coming from Gunfire called Kronos. It's a kind of a prequel to Remnant, and it's coming in early December on most formats. Biomutant, which is a dear topic every quarter. And Biomutant, I'm learning, and Biomutant is it's amazing when you look at it, but it's a huge game. I'm trying to learn more, give me the details. And I learned it's 8.8 kilometers of handcrafted open world, done of a team of 20 people. It's quite ambitious. And the ambition is also to offer a lot of replayability, and that puts a lot of efforts into additional requirements on Q and A or QA. Biomutant had a bug count because they're tracking bugs every day, 11,000, and they actually just have 1,000 remaining, roughly. The problem with bugs is they are could reappear. So they're getting there, and they are in the final completion of the game. I know I've been stating that before. And when they're ready, they will speak about release dates and about more details of the games. But I just want to give you a bit of color on why it's taking a bit of time. And it's currently localizing as well to 14 languages and having a voice over localization of 10 languages. And just to put that to perspective, there is a 200,000 word script, which is meaning 2 novel books basically. So that's bit of Biomutant. It will come when it's ready. Looking at our friends at Coffee Stain, they had another really good quarter, not as good as the Q1, but I would say the 3 titles continued to perform satisfactory, continued to perform very well on steam. Deep Rock Galactic continued to grow on steam as well. And the old good goat that are available on 7 platforms are actually very steady every quarter. So the revenues were SEK 130,000,000, which is 190% increase year over year. And on a trailing 12 months basis, there are up to SEK 420,000,000 in revenues. They made a bit of operational changes and put a co founder as new CEO at Studios doing the satisfactory initiative, Stefan Hahnne, replacing Johannes that are moving into a production role. And Albert, which is one of the cofounders of Publishing, became a new CEO of Kofenstein Publishing, and he's replacing Tim Budlak that are moving on to new ventures. And the good old Anton is still remains as Group CEO of Coffee Stain. Sabre, now they've been reporting the 2nd quarter into the group. I would say, it's been a quarter without any significant releases or basically any releases generating any significant new release sales because the WWE 2 ks Battlegrounds is published by 2 ks, and we are not getting royalties basically report in time to recognize annual revenue. But they had SEK 259,000,000 of revenues in the quarter. And the main driver of our SnowRunner continued performing quite well on all formats. And actually World War Z is also having, I would say, a higher engagement and revenues every day and quarter than we were expecting. Well, we're sad actually, I got the number, it sold like 13,000,000 copies. That's including Game Pass, but there is quite a few 1,000,000 sold as obviously various promotions and all that, but a lot of people have been playing that game. Matt, Andre, Tim and other gentlemen of management are very active. I have them every night in my SMS when they're waking up or on daytime. But they are engaging obviously with industry, and they are very active within M and A, as you can see this morning. And they are really good at engage with great developers because they are developers, and they know a lot of people. After the quarter, they opened up a new studio, also in Montreal, with New World Interactive. That will, start with, provide support for insurgency sandstorm development. And they are also strengthened their management team. And we discussed this morning they've been adding Todd, the former CEO of ID Software and Bradley Doan, the former or the current CEO of Sparesoft in St. Petersburg. I don't know Bradley myself, but I noticed that he has a long track record at Rainbow Studios and the year. Yes, and they're having a very interesting pipeline for the coming years. Obviously, we already know that when we acquire them, but they are adding new and very interesting projects. Deccia, Ken, Goh is also super active in M and A. We can talk more about M and A later and how that market is, but I think it's been very busy. And but we are super excited about his business. He seems to have an amazing team that are operating his titles. And during the quarter, he added 2 titles, Almost Hero and Gelsen Glory. And the main drivers in the quarter were Rehan, The Medgar and Dragon Vale, the title he acquired from Hasbro prior to the acquisition. Obviously, the revenues at the moment, until actually this morning, is not significant comparing to the other verticals. But for the 6 weeks, we were reporting into the group, he generated SEK 33,000,000 in profits or in revenues and with a healthy profit margin. And amplifier, they are expanding their own team as well as expanding with their strategy, the strategy to set up new studios around senior games developers across the world and or acquiring young studios that have products for the future. So basically, amplifier are currently not reporting any revenues. It's just an increased CapEx. So now looking 2, 3, 4, 5 years ahead, I think MD5 will be a very interesting contribution to the organic growth in the business At the speed they are moving and the interest they're having and the talents they are able to attract, I think this could become a very interesting business area. During the quarter, acquired Vienna Austrian based Rare Earth Games, as reported before. They acquired Madrid based Vermillion Studios. They acquired, as Johan said, the remaining 50% of Palindrome and increased the stake in Cavalry in Stockholm during the horse game. And actually, today, they are announcing that they're setting up a new studio in Karlstad that we didn't put on the press release, even though I was tempted. It's organically set up a new studio. It will be called Plucky Bites. And from my seat, from to start with 2 very senior people moving here. I promise you, I've not been engaged and I got notice about that just a few weeks ago actually. So yes. And finally, the business area of Partner Publishing. Sorry. So Party Publishing basically holds up of 3 businesses. It's the majority is Koch Media, the leading the number one European publishing partner for the games industry for physical products. And then they have the Quotch Films, and now here in Karlstad, Game Out at Europe, the original business of Embracer way back to 1993. But talking about the Partner Publishing, they had a good quarter, increasing revenues 100% to SEK 888,000,000. And on a trailing 12 months basis, they issued SEK 2,400,000,000, which is actually 3% year over year increase. The F1 2020 performed well early in the quarter, and also Marvell, Avengers had notable revenues in the quarter. The film business grows grow, especially on digital formats. They are setting up various channels, for example, the Anyverse on Amazon Prime. And obviously, because of the acquired KSM, the leading one of the leading NME film companies in Germany a year ago. But it's actually quite nice or very nice business with a fantastic team that are also very profitable. In the quarter, we're having, of course, many fantastic products coming out from a lot of our business partners. Now they've been adding Warner as a business partner in Germany, Austria and Switzerland. But the distribution of these partner titles varies. And in for example, Warner is only Germany, and that's why the actual revenues of that title is not significant for the group, for example, even though the title itself is significant. So in the quarter, the Q3, we are not expecting any major releases in that business area that will generate significant revenues. Johann? Yes. So looking at our quarterly update on our efforts and initiatives within Sustainability or ESG. We first would like to point out once again that we published our first sustainability report in the annual report that was made official at the end of August during the quarter. Also, we have started the compliance code training throughout the group. And we are very happy to see that there is a strong participation. And already now we are at 41% that has completed the training. So it's a good response and we think this is a great initiative to allow for all people in the group to get access and understand and really understand our compliance code. We continue to work within the space with our ambassador program, which we think is key to bring out the message of our Smart Business Framework throughout the organization, helping to support each of the verticals or platforms to roll out the initiatives and also concluding on key initiatives from each local area. We also launched a climate initiative in the quarter, Take Great Britain. And so we are making progress within the ESG area. And we will continue to have the quarterly updates. And I'm looking forward to many interesting initiatives planned for the remaining part of the year. I think the ESG team led by Karin here but engaging lots of other people are doing a fantastic work. And just worth pointing out that this matters for us. And when doing all these acquisitions as this morning, 13 of them, we're actually doing ESG due diligence. So we're kind of getting a sense of where each and every company are. I think that is very important in order to implement and integrate them into the group. Thank you, Johan. Now I think we're having a few entrepreneurs and leaders joining us. We will have M and A Medley with all the 13 companies, hopefully all the 13 companies we have been acquiring this morning. And it will work very quickly or as quickly as possible. Obviously, we will give them a bit of time and the CEO of the vertical, but it will not be a complete company presentation of 13 companies. So hopefully, this becomes a very dynamic conversation over the coming hour or so. So first, we have Ken and Kenshi, hopefully joining in from Vancouver and London. Ken is in. Hello, Ken. Hi, there. Hey. You had a long night sleep? Thank you for getting it all done. 20 minutes of 7, I got the last final green light from you. Well done. So we are waiting for Kenshi. And obviously, we're having lots of shareholders and others are that are very interested to hear about more about the thinking ape. And your plans can. Now you've been not sleeping for 24 hours or more. But hopefully, you have a bit of energy left to give a good overview of what you can bring us in the future. Yes. So Kenshi has joined. Hello? Hello, Kenshi. Welcome to Carlstad and Embraiser. Thank you. Very excited to join the group. Likewise. Very excited to have you on board. I remember talking to you like a while ago and super excited to have you here. Ken. And Kenshi, this is not a full company presentation, but I think it would be relevant for the shareholders just to get a brief understanding about Thinking Ape and your ambitions for the future. So I leave the word over to you, and feel free if you want me to lead any conversation here. Okay. I'll take it over. Well, here we go. Good to welcome aboard. Welcome to the family. Very excited to have you as well. First thing, I'd like to introduce you and the thinking So Kenshi and I have known each other for a couple of years now. We've kind of briefly discussed joining forces. Thinking Ape is one of the most respected mobile studios in the industry. It's been around for over a decade. It's one of the very few studios that I think without a doubt everybody in history highly respect. They've had success for a long, long time and it's also very unique. Kenshi, I'm sure, had a lot of suitors, the places that you could entwine. I know he's had a lot of different talks with a lot of different people about joining forces, and I'm really thankful that he's accepted the limitation to join us. But to get started, maybe Kenshin, maybe you could give us a little bit of background and some history on Thinking Excited that you're going to be joining us within the group, within the unit, and we're going to be building out a bigger core foundation from this. Maybe you could tell us a little bit about how you've been able to grow the games that you mentioned? I'm part of my dorm now until 10 years old. And how do you guys tackle growth in these games? Sure. I'm afraid the answer is quite simple. It's mostly because I think, Ken, like you mentioned, we spent a lot of time trying to understand our players and build these amazing communities. And once the community is established and players are playing their game for a long period of time, in some cases, 5 to 6 years, it forms a really great base to continue to build upon. And what I mean by that, because our players are so active for so long and they're generating revenue for a long period of time, it's very easy to justify reinvesting in the game. And so as a result, on top of that, we've had to sort of build up our expertise in terms of games as a service, in terms of doing live ops, in terms of monitoring our economy and making sure that we're monitoring the right social relationships with our players. And I think it's just I guess it's just at the end of the day, once we have an active community that we'll be investing in, we just figured out how to get way more sophisticated than LiveOps. Okay. About your team, I heard so many good things about the team you're having. Yes. I'm yes, and I can't so I can't take credit for any of our accomplishments. It's all pretty much our team. I'm mostly just the cheerleader at this point. But, yeah, I mean, you know, we spend, I think, a lot of time thinking about how we recruit people. We think a lot of spend a lot of talking about what our core values are, and we just try every day to make sure that we build the kind of environment that we would want to work in. Great. I'm super excited to have you on board, Kyung Shih. We have we can I don't know how much you've been informing Kenshi about the next company that are joining DECA this morning as well? Okay. So you're aware of it at least. Yes, I'm very happy. We're pretty much neighbors given that we're from the same city. Yes. Perhaps could we because we have a presentation, Ken, for a slide of the new deca, and perhaps we could is it possible to, Kanshu, that you stay online and we bring in the next entrepreneur? Perhaps I'm putting a challenge to the technical team here, but let's try. Ken, have you been having contact for him joining at the IEO Group? Yes, I think he's on. Looks like he's on now. Hong Yi is on, but no camera. Here we go. Hello. Hello. Hi, everyone. Hello. Hello, and very welcome to Embracer Group. Thank you very much, Lars. Thank you for inviting me to the group. I'm super excited to have you on board. It's been a very long night. And I guess you know Kenshi as well. [SPEAKER JEAN FRANCOIS VAN BOXMEER:] Well, definitely, very glad to see a fellow Vancouver. So why don't you tell me tell us about a little bit about yourself and Iyogo and why you decided to join DECA and Embracer? Absolutely, absolutely, love to do that. A bit of myself, so I think I have 2 lifetimes. I think in my past life, I was actually a research scientist. I was doing research with supercomputers and high end visualization systems. I taught in universities and I supervised grad students. So I did that for a few years and I had a lot of fun. And after a while, I I I think I got into a midlife crisis situation. So I left that, completely jumped out of that. I decided to start a game studio. I decided to start a game studio with 0 business knowledge, 0 business background and also 0 game development background, actually. So the reason is that, you know, I was really intrigued by the mobile phone at that time. Of course, it's early 2000. This 2,003 when I started Ayigo. And for those who remember, the mobile phones are really low powered, tiny screen. By that time, you know, I knew right at that time that that is going to be the most important electronic device, right, because that's a device that's going to be with you all the time. So I was focused on that. I wanted to do something on that and I love playing games. But, so I started to think, you know, let's try making games on this thing. So I found the studio. Very shortly, I got my current CEO, YK, to join to join the team. And we started learning games. Right? And, you know, fast forward to today, we've seen the device going from something very simple to the smartphones that we see now. It's huge improvement, of course. We've seen, how games are distributed. It used to be a carrier deck and we've seen it goes through the app stores and Google stores to how it is today. We've seen games going from, you know, premium games, you know, 9.97 games and all the way to free to play. Right? So we have remained very agile over the years and continue to build games. And 17 years later, you know, we're we're still enjoying what we do and and we still think that this is the beginning for us. We're still super enthusiastic about the volume. Now, I'm super excited to have you join as well. You know, it's good to have, multiple Canadians in the group as always. You know, the things that I saw that that were super unique about Ayuga and, you know, we've been I've been aware of Ayuga for a long time. You know, the we eventually took over Knights and Dragons and I think that's kind of how we first got introduced was when DECA took over Knights and Dragons which Ayuga originally developed with GREE. You guys have a long track record 17 years, which is kind of unheard of in the the mobile industry. You know, a lot of phones have barely existed 17 years ago. So that's one of the unique things. The other thing is, you're one of the few group of studios that have multiple top grossing hits. So I think that's amazing. I'm really excited to have that level of talent, your team, your experience coming to come into the DeCA units. What do you think has allowed you guys to to have this level of success? I think we're proud to call ourselves mobile first, mobile only. I think we started mobile. And not only mobile first doesn't mean starting mobile, but starting early in mobile. But it means when we think of games, we should be thinking mobile first, right? It's not games on other platforms and then sort of porting and moving to mobile. Then you're completely missing the idea of what mobile games represent. So I think we think mobile only. We're very focused on that. And since day 1, I think we started early, as I said before. We started with very low powered devices. So we needed to work very hard compared to other platforms to make our games look good. So we try to think that we are better programmers than others because we need to make our games look better on a lower powered device. So over the years, we have sort of keep accumulating these skills, the skill sets, these knowledge skill sets and we started to build technologies that grew together, started to build very strong engines that are very mobile optimized or mobile specific mobile optimized. And all recent games, they're all powered by our very unique engine. And it just you compare it to others, it loads faster, it looks better and generally it makes the game feel better, right? So of course, we all know making games is just not technology, right? I think how do we make games? I think in our recent successes like you mentioned Knights and Dragons, Walking Dead, we work very well with publishers. We also work very well with licensed IP. I think we know how to treat it very well, IP. We know how to start with IP, understand it and build a game around it, right, as opposed to the other way around. And building the game is one part, we launch it. The ongoing upkeep, the free to play game, games as a service kind of idea is that we have to continually improve the game, make new features, make engaging features, make new events to get players to be entertained all the time, right? So we want our players to be entertained every day, every month, every year. And as an example, I think, with Walking Dead game, Walking Dead Road to Survival, that game was launched in 2015, right? And with players, you know, enjoy the game right from launch. And of those places starting year 1 till now year 5 years later, we have 1,000 and 1,000 of players that are still playing the game starting from early on, right? So that's something we pride ourselves on. We understand we try to understand what players want, what entertains them and we continue to provide that value. So when we do that, I think naturally our games would become successful following that kind of philosophy that we have. Okay. Thank you. Ken, we are running a bit shorter time here because we have a few other online here waiting. But could you just kind of tell us a bit about what opportunity you see and what first of all, what you see the 3 of you together and what opportunity do you see going forward as a new mobile group within embracer? Yes. On the slides, you guys can see that DECA is the idea of DECA is expanding. We have a operating unit that was created 90 days ago. It was in that 90 days we decided to expand and broaden our horizons. So with bringing in Thinking Abe and Ayugo, Deka Games, as we introduced it before, still exists and still will continue to run as an independent company, still focused on live operations and mostly the asset care strategy that it started with. But now we are creating an ecosystem within the unit that will include game development studios, all of the necessary muscles that are important to be successful within mobile and free to play. Kenshi and Hong Yi are going to be very important parts of the team steering committee that will lead us going forward as we add even more studios, more stronger companies, stronger entrepreneurs. They will be independent. We will keep the same embracer models of decentralization and bringing in the best people, doing that within a smaller unit that is focused on mobile and free of play. Gentlemen, I'm super excited. I've never been to Vancouver. I love to go there, and I'd love to get to meet you one day if this, could I say a damn virus is over? Perhaps I'm getting there anyhow. You are very welcome to Embracy Group, and I'm super excited. Thank you very much for joining, and talk to you soon. Thank you very much. So thank you, Ken. I saw Matt and Andre here. Hello, gentlemen. How are you? We're sleepy. How are you? Sleepy. Then you should ask me. I know what you've been doing. Okay. Thank you for getting everything done over the night. I think at 4 o'clock, we were 4 deals out of 13 done. So then I were a bit nervous. But and online, we have Mel and Salt. That's the best. I want to hear your voice. Mel, are you in California or in Budapest? I'm in California, and you got a big echo of me. Of course, during the testing, everything's fine. And Sol, you're in Budapest or? Yes. I'm in Budapest. Good morning, Lars. Good morning, ladies and gentlemen. I'm super excited to have you on board finally, and thank you once again for coming to Carlstad a few weeks ago. It was a pleasure having you. Well, the question is all ours. It's a very, very critical and unique opportunity to introduce ourselves and spend some quality time together. So, Matt, basically, I'll leave it over to you. I struggle with public speaking on occasion, but I'll give it my best shot. First of all, hello, everybody. Once again, I'm sorry I can't be with you in Sweden. Instead, we're confined to America, which is in turmoil. But we are doing our best to expand our horizons beyond simply America by acquiring studios with headquarters in places like Budapest, Hungary. And in this case, we have Zen Studios, an absolutely fantastic studio that I've been a fan of for, not as long as I can remember. These guys have cornered, I would say, and owned the pinball market, the digital pinball market for as long as there has been a digital pinball market. And they've built an incredible business over the past decades, and I'm super excited that they're going to be joining the Sabre family. I can't wait to see what we can do moving forward. The opportunities are almost endless. And I know that every time I come on one of these calls, I come off as overenthusiastic and overexcited. But in this case, I don't think it's possible to be overenthusiastic and overexcited because I think this team is absolutely phenomenal, some of the best talent in the world. And I think we're going to hear some very big things you're going to hear some very big things from us in our collaboration over the next God, well, it'll be quickly. So you can see the slide here, a small bit about the team. I'm not going to do too much talking because I've been told by my good friends over in embracer that I talk too much, and I'm going to let the guys do a little bit of the speaking on their own. But you can the numbers really speak for themselves. This company has been around for a couple of decades. There's 100,000,000 plus lifetime players of their games. They have tons of amazing licenses. And they are a sizable team that's growing in an absolutely fantastic location that's primed for talent and growth. So, Melenzold, I'm going to stop talking now because I'll just take up all of our time. Why don't you guys just talk a little bit about yourselves and your thoughts about joining the group? Yes. Thank you very much, Matt, for this summary. Really, it means a lot for us. Zen was established in 2,003. And at first, we've been focusing on work for hire projects, then started to create and publish our own games. Over the last 17 years, we have learned 2 very important lessons. 1, we have to make great games and we have to make games, successful games, games that actually make money. I know it sounds obvious, but in this gaming business, not everyone automatically understands these two very important principles. Pinball has always been our passion. By 2000, the best days of classic physical pinball machines just started to be over. However, we strongly believe that pinball will have a place in gaming forever. So we focused on the new era on pinball in video games and this gave us an exciting opportunity. We started to develop our own pinball technology, unique ways to represent these physical machines in this digital environment and created and published our first pinball game, it's called Pinball FX in 2007 on Microsoft's Xbox 360 platform. And the game became an instant hit, becoming the best selling title on Xbox Live Arcade that year. We would like to believe that Zen is a smart, resourceful and creative game studio, working with the best talents and providing these talents the rewarding environment so they can do the best job. And well, this has been our top priorities over the last 17 years. We have solid foundations and a great portfolio of products. We believe that as part of the embrasure group, we will have the resources, the network and the know how to reach the maximal potential upside. Let me introduce Mark Kirk, our CEO. He's the best person to give you more details on our running projects. All right. Awesome. Thanks, Jolt. And hopefully there's no echo. How do I sound, okay? Good. You sound good. All right. Yes, it's been quite a journey here at Zen. I joined as well, Jolt, you and I met each other probably around 2007, right, when Pinball FX was coming on the scene. It's been quite a 13 year journey. Back in March of 2011, I think it was, we sat in a dark room, kind of what you might expect in a dungeon in Budapest. We decided that, hey, we have a successful pinball game. Digital stores are coming, more devices are coming. Let's take pinball everywhere. So we just kind of that became our mission. And we spent the last 13 years now, just focused on making sure that we're making the very best pinball games, with the very best licenses, working with the best creators in the world and really learning from them as well, the people at Lucasfilm, at Marvel, at NBCUniversal, Fox, movies go on. It's been just an extraordinary journey. And it's funny to think about all the innovative things we've done in the name of pinball. Think pinball is a simple game. Well, we found really creative ways to package it and to sell it and to reinvent our business model. And that's been a lot of fun. It's required us we've been scrappy, we've been resourceful and creative, done a lot of things, I'd just say sweat equity we've put into it. And we've gotten to a certain level of success. But the road that we have in front of us actually I think we're just getting started. There's so many avenues and areas for us to expand this game. We have a dedicated player base in North America and Europe, but we haven't even started to look towards Asia yet. And what that looks like, but we understand how to make a quality game, how to work with high quality IPs and how to treat those respectfully. And we're getting really good at data driven development. I think you put those together, we've got the game of pinball is older than I am and older than anybody on this call. It will live beyond us. It's demographic list. We got so many things to do with it. I think that that's why we're excited to be part of the embrasure group is because they're going to together we will accelerate this. And I have a crazy pinball vision, guys. I mean, nuts. I could talk about it for hours. I know we have a short amount of time and I'm definitely not going to give away the secret sauce. But pinball is going to be rad. We're going to do a lot with it. And of course, there's awesome IPs at Embracer Group within we could always make all sorts of pinball out of that. Beyond the pinball, Zen has also been working on RPGs for many years. We have guys who love pen and paper RPGs and we've made some really good ones, but we just have not been so good at telling the world about them. And so I call them the hidden gems, a game like Operencia, the stolen sun, which is a beautiful ode to classic first person dungeon crawlers, that embraces the Hungarian heritage and Central European folk tales. And, you know, with the Embracer Group, a game like that would just get elevated. I think we'd have a platform to speak from that people would actually just know the game exists. So I'm looking forward to future ZNRPGs not being hidden gems and hopefully being more known. I think we'll do a lot better. It's just that's why I'm excited. Lars, it was a pleasure to meet you in Sweden. Thank you very much. I just think that we talked a lot about we talked about a lot of things, but we have a common ground, a common philosophy. I got that from Matt and Andre as well. And that is working with good people and treating them well. And I think our future is very bright together. So it's an honor to join the group. Pleasure having you. Thank you very much for joining, and I love to get down to Budapest sooner rather than later to see you and really glad to have our first foot in Hungary. Gentlemen, we need to move on, but thank you for joining this morning. Matt and Andre, please stay online, and we have a few more friends joining. Okay. Hello. Do we have David here? Julian? Hey, yes. And I brought Julian, too. Hello. Hello. And very welcome to Sweden and Embracer Group. Thank you. Thank you. We're excited to be a part of it. I'm super excited to have you on board. Matt, Andre, please feel free. Yes, we're here. I hope you don't have the echo the notepad's have, but it sounds like we might be for just an echo. Julian, is that? I think the echo might have been Julian. Yes. Okay. Yes. I want to talk more quietly, I think. In this way, I won't get the echo from my own room. I'm I'll say a few quick words about Snapshot. I have Andre next to me who is basically by and large responsible for convincing you guys of the wisdom of joining the group. And so I'll let him do more of the talking, but I just wanted to say that I'm super excited to have you on board. It's amazing to have a group of legendary designers working now within the group to help us to elevate our game. And Snapshot has certainly proven in its relatively, I guess, you could say, brief existence that there's a lot there's a lot of runway ahead of us. So I'm super excited that you're on board. And I'm not sure if I'm assuming you heard the previous conversation about Zen. We're obviously excited about Zen as well where he mentioned that Pinball was older than we are. I don't think that applies to me or maybe a few other people on this call. And so I think we have lots of great hair. I think Judy, for my partner, no hair. That's been around a while. That speaks to our experience. And I'm just, I think that experience is a large part of why we're talking today with you guys. So anyway, welcome to the, I would say to the family and, why don't you just give us a little bit of on yourselves and your excitement to join the group? Yes. Thanks very much, Matt. Can you hear me now? I've got my headphones on. Yes. We can hear you, Julian. Yes. All right. Who wants to go first, Julian, you or me? Yes, I'll go first then because I'm sure you're filling up the details that I completely forget about. Yes, so yes, it's great to be part of Embracer Group. Me and David set up Snapshot Games at the end of 2013, but I have actually been working in the computer games industry since 1984, a very long time, most well known, of course, as the designer and creator of the original X COM series. And with Snapshot Games in a way, we're returning to some of those origins that I was working on back in the 90s. Phoenix Point, which we've just which we released last year on Epic, is very much a recreation, reimagining of the XCOM style game set in with a much more up to date presentation and some fantastic quality production from the team. And we're shortly to launch on Steam on December 3. So I said it we as I said before, we set up the company back in 2013. We started bootstrapping the company with a Kickstarter campaign, first for KAOS Reborn and then for Phoenix Point, which we raised money on the Fig platform in 2017. And the studio has now grown to 60. We're based in Sofia, the studio. David's based in L. A. He can a bit more about what he's doing. But the studio here in Sofia is comprised of veterans from other studios here, including Ubisoft, who I worked for, for nearly 6 years as a producer. And we've done a lot in the past 4 years, 4 or 5 years. And we're very pleased to go to the progress to the next level. We're leveling up as far as I'm concerned. Over to you, David. Thanks, Julian. It's all well said. Yes, in some ways, this started a long time ago because I was growing, but I'm based in California now. I grew up in, as you can probably hear, where both Julian and I are English. And I think Julian's first game was a game called Chaos, which is the predecessor, I guess, to Chaos Reborn that we rebooted a few years back. Yes. I think I got that on the front cover of a magazine on a tape. Your Sinclair, yes. Your Sinclair, there you go. And, yes, it was the sort of the beginning of a love affair with Julien's games. And so we just sort of ended up working together a little bit later. I reached out to him when I heard he was going back into independent development. And yes, that was 7 years ago. So I'm really excited. I'm very proud of this moment, honestly. We have such a fantastic team, and it's I think a lot of we announced just a couple of hours ago to our team and so many of the questions were people are really excited to be part of a larger organization to be able to collaborate hopefully across studios. And I think we're just really excited about potential of you know, we know we make really great great great quality games, but, we we joined forces with with with some like minded people. And, I think the potential is really, really, really great. So I couldn't be more excited about this. I would say Phoenix Point is really just the beginning for you guys, and that's the journey that's in process. And so with more platforms to be released and then the the issues or concerns that you always get on an initial release, on an initial game. So it's kind of like with us in World War Z where we have potentially, I shouldn't announce a new title, but we have potentially sequel to World War Z, which could fix some of those issues and make the game even more appealing. And so I'm super excited that you guys are on board. Once again, it's another place, Sofia, Bulgaria, for Lars to go after Vancouver and Budapest. So as long as we can keep finding really cool places for Lars to go, we're going to keep acquiring studios. And so I'm super excited about it. Glad to be here to meet you. I've never been there, so You're welcome, Lars. Looking forward to it. You are very welcome to the Embracer family and looking forward to catch up soon. Thanks very much, Lars. Appreciate it. Thanks, Lars. Okay. Thank you for joining this morning. Matt and Andre, please stay online. We have some more friends joining here. I see Martin. Hello, guys. Can you hear me? Yes. Hello. Hello, gentlemen. Hey, what's up? Very welcome to Sweden and the embrasure family. I signed your contracts, I think, 5 o'clock in the morning here. Yes, yes, yes. So I recognize your name? I was 2 it was our 2 a. M. Or 3 a. M. Or something like that. So, it was a very busy few months and also a few days lately for us. But we are super happy to be joining the family. Yes. Very welcome. So Matt, Andre, please, I leave it over to you to make the intro and then yes, go on. We can do it. So in a nutshell, Nimble Giant is a fantastic, highly experienced team of game veterans based out of Buenos Aires, which is once again another cool location that we can travel to at some point if we're ever allowed to travel again. These guys have worked with a whole host of really talented teams. They've done games for war gaming. They've built some of their own product that they've released on Steam that's been successful. And most importantly, they just have I wouldn't consider it to be a monopoly in Argentina, but they are the leading developer in Argentina. They are a magnet for talent in Argentina. And our plans with regards to Nimble Giant are to continue to work with them not only on assisting Sabre on some of its projects that we have in the pipeline that we think that they would be perfect for, but also to encourage them, which we will, to continue to iterate and create their own IP where they have a unique talent. They have great design chops. They have great technical chops. And they're overall just a fantastic studio. And one of these studios and these are the studios that we like at Sabre and the studios that we're looking for. We like to find teams that clearly have the capability of elevating their game and creating AAA experiences, but that haven't necessarily had the resources to do it because of the constant chase of cash flow that independent developers are always involved in. And so we think in this case, Nimble Giant is an absolutely incredible addition to the team and an addition that can very quickly contribute and to help us not only to build some of our own internal IP into product that we can get to market quickly and of a very high quality, but also to do it at a price point which is not going to break the bank in terms of development. So they obviously have high development efficiencies in terms of costs and we marry that with great quality and good management and you end up with an excellent acquisition for us. So Martin and the other thing I'll say about Martin is Martin is a very shrewd business guy, and I really am glad this is something Lars had once said to me. I'm glad that Martin is going to be on my side moving forward. So Martin, I'll let you talk about that a little bit. Hey, thanks, Matt, about the intro. I think I want to buy the company back from what was that you said. So I don't know if that's even possible, but you're pitching the company better than I do. Yes, so basically, you said it all. I mean, we started in 2002. We did our first game actually there that's called Champions of Regnum with our own proprietary technology, both front end and back end. The game is still live today. We did then 2013 around that year. We started the development of Master of Orion with Wargaming. And we always kept reinvesting all the money and trying to keep pushing the bar forward, like doing better stuff all the time. And we started actually after shipping Master of Ryoma in 2016, we started to empower all the middle management of the studio with training programs to be able to scale the company even more. Like Matt was saying, we're already one of the largest studios in Argentina and also in Latin America, right, almost 80 people. And our plans, of course, training Embracer that we are super excited is to keep growing in the region and being able to tackle not only our own IP and our own ideas, but also some really cool and exciting projects that some of them we cannot talk about unfortunately because there's no possibility for us to disclose that and some others that will come in the near future. But we are super excited about the next challenge and the next chapter of this story. Super happy to be here guys with you. I'm super impressed of a lot of products we have built. And I think looking 5 10 years ahead, I think even though you make amazing games right now, I think you will be able to create some truly amazing games that could really bring a lot of players. And I think you will be perfect within Sabre and also within the wider Embracer family. So and again, I've never been to South America, so I love to take 1st step into Argentina. Yes, of course. You're welcome to come here. And just to add it, it's like yes, we had a few options. And we also saw that Embracer and Sabre was the perfect fit for us to keep our growth path and achieve our goals. So we are super excited about this. And also, hopefully, this will be over soon. I mean, this pandemic will be over soon, and we will be able to welcome you here in Buenos Aires. Very welcome to the family and welcome as also shareholders in the Embryso family. I'd love to catch up more with you in the future, but I think we need to move on. Yes, sure. Thank you. Thank you, Matt and Andre, you stay online. And we have few more gentlemen joining. Do we have Turin? Hello. Hello, Jens. Welcome. Welcome to Sweden and Embracer family. Thank you very much. Thank you very much. Lloyd, want me to I'm going to hand it over to Andre because I always do all the talking. And so I'm going actually turn the camera and let him talk now and let him do this intro. Well, I'm very excited to welcome Valerio and the 34 big things in the family. This team comes from another very exciting place. Who doesn't like Italy, Northern Italy, who is great and I guess game development is great as well. I've been talking to 34 big things for a few months and we've been impressed with the variety of types of games which these guys were able to put together, working with a very small team and very limited resources, but nonetheless, they've been around for a while and the creative games which resonated with the users. And they also showed us some of the concepts and ideas which got us super excited about what we can do together. So welcome Valerio and his team to the family, Sabre family, Embraiser family. We're looking forward to working with these guys for a very long amount of time and helping them grow the team and reach new heights, Aleria. Well, thanks a lot, Andre. Thanks a lot, Matt. Especially for the opportunity to be here with the rest of the staff from Embraer Group, you know, to talk about us and why we are so excited about joining the family. I mean, as you said, our origin story is, like, very similar to many startups out there. Probably with the main difference being that, you know, up to the north of Italy, it's just to call to to open a company in a garage and, you know, we had to do that in the living room of our apartment. That's how we started. Thanks a lot for the opportunity. Yeah. So if I can, I would like to start saying that, you know, our first release of Adapt in 2016, that's our first success? That's basically, the baseline, the foundation that that allowed us to move their eyes on our strategic planning much farther than before. And, you know, that's that's also when we started considering our games more like with a franchise approach instead of a more classical, you know, 1 shot, version of our games. And, you know, that's also, I believe, that there's some kind of, synergy that we felt from the very first call where we, with you guys, with Sabre. And I would say there are many similarities about the pillars of our companies, how we think any game studio out there should operate and how we make games. For instance, we don't want to be reminded only as David our studio. I mean, that's not where our ambition is. That's where our ambition starts and, you know, this is exactly what we want to do. We love building games. We don't love building 1 game. And as far as I understood, that's something we share with Sabre. Thank you very much. I'm really glad to have you on board and also to welcome you as a shareholder in embracer. And I'm looking forward to see you in the future. We already have a presence in Italy, even though not in Turin, but I think we will have plenty of opportunities when this pandemic is over. I would love to have you guys already, of course. So thank you very much for joining, and thank you for joining this call. We need to move on here in the morning. So shout to Italy, and hello to Serbia. Yes, hello. Good morning. Hello. Hello. There's a good party going on here, so we decided to crash in. Welcome. These virtual parties are the best. So Mad Head, Lars, do you want to pass it over to us? Yes. Well, first of all, I would like to welcome you to the family and to Sweden here. I've been hearing a lot about you the past month, and I know you have been working with other friends in the embracer family since quite some time already. So you have proven your capacity of being the one of the leading developers in the region. And well, I'm just, again, using the phrase super excited to have you on board. And I'll leave it over to you guys. Let me just say, I promise that's not my dog. But whoever's dog it is, just give them a treat, we'll be good. I just wanted to welcome you guys as well. And I wanted to basically state one thing. We kind of have a pattern here as you've seen with the acquisitions that are joining the Sabre branch of the Embracer family. We are looking for entrepreneurs that are highly motivated, that have built incredible teams, that have the skill set and the ability not only to assist us potentially with some of the projects that we're working on, but more importantly, to iterate and develop products on their own. And Mad Hat is certainly no exception to this. I remember the first time we had Tim Willis review some products that Mad Hat had put together on very short notice and he was blown away by the quality of the work that they were capable of doing and that really is what spurred these discussions which have led us to where we are today. The guy sitting to my right who's the silent good looking type, this is he's super excited about this acquisition in particular and not meant as a slight to the other teams because we're excited about all of them obviously. But I think there's a lot of similarities between Sabre and MatHem. And we already have your next decade planned out. So I don't know, maybe we should have warned you with that before the acquisition, but we're super excited that you're on board and we can't wait to see what comes next. And Andrey, maybe you want to say, I'll look forward. I'm super, super excited to have you guys on this call. And it's been an interesting journey for the last few months as we're trying to put together this deal structure. But it all started with exactly what Matsat, meaning we're super impressed with what you guys were able to achieve in terms of things which you can put together in terms of ideas which you have in terms of your abilities to do a lot with basically having very limited resources. And we're excited to be working together with you for a very long time. And there are a lot of great ideas, which some of them discussed already, which we'll, I guess, put to come to our ideas in the real games. So gentlemen, why don't you just tell us about a bit about yourself and Mad Hat? Is there another one? We started off almost a decade ago as just, you know, 5 guys wanting to make games. And, you know, the road has been very interesting adventure, like building something from very, very small and in a very limited space that we had and the resources up to the company, which is self sustainable, managing to create games from the very concept to bringing to the market. And at the same time, rebuilding the team of 130 people. It has been definitely a very hardworking, but very rewarding experience as well. We started working mostly in casual games and have produced over 50 of them with Quickfish Games. And over the course of time, we also experimented with with mobile games, but also stepped 1 foot into the core games. And, you know, I think that was a very big pivotal moment for us when we started working with Wargaming and Pagan Online or Pagan Absent Gods. And I think the moment when we stepped into the Gamescom and saw, like, one of the biggest booths out there with hundreds of people waiting in lines, we knew that that's it. We wanted to do for the rest of our lives. And ever since then, I think we just converged more and more towards core games. And this is actually how we cross bet with Sabre, with Andre and Matt. And we immediately recognized each other's ambitions and that our strategic goals are pretty, pretty well aligned. And that this partnership could actually help us skip ahead a couple of steps. It's our path to being a core developer and most importantly, like building our capacities and capabilities more into the even AAA, AAA part of the arena. Thank you. You're having a quite size of the team, and I learned it's on 4 locations in Serbia, yeah? Yeah, yeah, yeah. Well, you should come visit them. No one actually who came to us was the same after he left. So everyone does selfies. So there's a bunch of interesting things, but you need to come and see it as soon as this thing actually gets wrapped up in a way, like disease and then travel ban, etcetera. I guess I need to make that promise to visit Vanguard. I've never been there and Novozad either. So but we have Matt smiling here. I want you to Europe as well. So you just need to jump on the bandwagon and come with us. So we will be expecting you. Really excited to have you on board, and you are very welcome as a shareholder as well in embracer and looking forward for the upcoming years with you. So unfortunately, we are running a bit tight on time here. So I need to say thank you very much for joining this call and joining the group. And Pleasure. Thank you. Thank you, Jens. And then we say goodbye to Serbia and welcome New York. I didn't realize I can control the slides. I'm asking somebody to do it, but I can do it myself. Look at that. Hey, there. Hey. Hey. Good morning. Now we can see you. You see me okay? Yes. Okay. Very welcome to the Embrace family. Thanks a lot. This is exciting. Yes, thanks. I just wanted say thanks to Matt and Andrea Sabre, and thanks to you, Lars and everybody at Embracer Group. Super excited. I've been hearing so much about you and SandBox, what you have been doing for Sabre, amazing stuff in PR. So I leave it over to you and Matt to just basically explain why you joined and Matt, why you think because in a way, it's a bit why acquiring a PR even though they are leading, I think it's relevant for everyone to understand. Sure. I'll jump in there. So Corey and I have a long standing working relationship. I would say, to a large degree, Andre and I attribute a good amount of our success and what brought us into the Embracer family to the advice and guidance that we've received from Corey and his team over the years and building our products such as World War Z and NBA Playgrounds and even advising on products where he wasn't necessarily central, but subsequent UK products and even some of the snow runner and mud runner products as well where he assisted. Corey's group is fantastic. I think they're one of the best in the world of what they do, which is PR and influencer marketing. Corey, in particular, has relationships with every developer on the planet and is always sober and realistic in his assessment, which I think will prove invaluable to us as we continue to move forward in acquisition. So I think in particular with Cory, it's more than simply not to understate the importance of PR and influencer marketing, but it's even bigger than that in terms of Cory. But also SandBox is an asset that we feel, and this is one of the things that I think is very important as part of as a relatively still new part of the Embracer Group is to be able to when I can find resources that I think could be an asset to the entire group, I'm going to try to get those resources on board. And I can already I'm already starting to see the synergies that are coming from having Quarry in the group, even though, well, I don't know. Technically, I don't even know the status yet, but we're pretty much there. So, you know, I think that as we acquire more studios and as we acquire and develop more projects, we're going to need to have a dedicated team to get those products out into the marketplace and to help us evaluate the best way to do that. And there's really nobody better, at least on our side of the pond to do that than Corey and his team. And so, and I'm also happy to be good friends with good friends of Corey. And we've had plenty of good times together, which will, I'm sure, only continue. And it's yet another location in New York where now Lars has more than one reason to go to. So, Corey, why don't you just jump in and talk a little bit about yourself and your team. And I know we're always time limited here, so we'll make it quick. I'll be quick. Yeah. Thanks a lot, Matt. This is super exciting and it's just thrilling to kind of further relationship with you. And Andrea, thanks again to Lars and everybody. I mean, SandBox, yeah, all we do is promote games, primarily PR and influencer work, earned media. In other words, although WE DO A LOT OF PAID INFLUENCER COLLABORATIONS AND SOME MARKETING CONSULTING PROJECTS AS Well, WE'RE 13 people, mostly around the New York City area. We have an office in New York, a couple of people scattered around with somebody in Vancouver, somebody in Seattle, somebody in Florida. There's 3 partners here, myself, Rob Fleischer and Sean Norton. And Rob and I founded Sandbox. We worked together at rockstar games in the early 2000. So, yeah, as Matt said, we have a long history working on Sabre's game. We're proud to have a small role you know, and their success. You know, we definitely wouldn't be here without Sabre. So we're excited to work even more closely with them and they're growing publishing team. Over the years we've actually done work for other embracer Group companies, including, you know, THQ Nordic and others. You know, we've done work even with, you know, we just were talking about Snapshot and did some work with them last year at Phoenix Point. So we're kind of all over the place. So yes, we'll remain a standalone company and I want to continue to contribute to Sabre's growth and but also be a resource for all the companies across Sabre while servicing our clients and our partners to embrace your group as well. So yeah, maybe we'll have the resources to do some other things we've had in mind, tech wise, maybe more global. But yeah, we're excited about the whole thing. We think it's a great fit and we just couldn't thank you enough. That sandbox. Very much, Corey. I think it's just important or it's important to point out, you will be continue being an independent entity, and you will still be working with independent clients. Obviously, you have a very long list of industry clients. So even though you will continue working with the group companies and perhaps even more in the future, I'm sure you will continue working with external clients as well. Absolutely. So I just want to point that out. So thank you very much for joining. Looking forward to meet you in the future. And so we say goodbye New York and welcome Vienna. Matt, Andre, thank you very much for joining this morning. Thanks for having us. I guess I'm happy I get to see Clemens really quickly before I go. I like there we go. All right. So all right, guys, have a good we're going to go to sleep. See, talk to you later. Thank you. Clemens and Andrew, I can see Stefan there for a while, but Stefan, you need to just hold on for a few more minutes. So, Andre Clemens, please welcome to Karlstad, Sweden and Andrew and Purple Land, very welcome to the Embraes Group. I'm thrilled to finally have you on board. You kind of been working with us for a very long time already. I know your colleague, Harald, very well, but I don't know you that well, but so please, I leave it over to you guys, Clemens, to just explain and Andre more about Purple Lamp. Can't hear you. I guess you can hear us, but Yes. Now we No, it works. Okay, great. Okay. So before I hand over to Andrew, maybe let me say 2 things. I will not misuse this platform again for as an advertisement platform for hirings. But let me send my congratulations to Andre and to Matt. I mean, those guys are M and A monsters. It's impressing. And I'm happy that they are within the Embracer Group because there would be crazy competitors out there for additional acquisitions going forward. And I would like also to send a thank you to the other sellers of Purple Lamp, Harald, Michael and Martin. It was very fair negotiations and it was a smooth transactions. I really enjoyed working with you on this deal guys. Thank you very much. I know you are watching. And now I would like to hand over to Andrew. The camera is yours. Thank you for the introduction, Clemens, and thank you for the welcome, Lars. I know we're a bit pressed for time, so I'll try to keep this short. So brief history of Purple Lamp. We grew out of a company here in Vienna called Sproeng, which in its day was the largest in the city. After another 15 years of operation, unfortunately, it closed down. But from that, Harold and I founded Purple Lamp. At that time, we had a core of 21 developers and 5 active projects, one of which was the Guild 3. So the derivative since day 1 of Purple Dance Foundation, we've been working together with THG Nordic. So since then, we've increased the studio in size by about 80%, up to now 38 people. And we have 3 projects in active development. All of them are with THQ Nordic. One is still the Guild 3 and we're continuing to build upon that. The other 2 are not yet announced, but they're very cool projects and very excited to be able to talk about them sometime in the future. As a studio, we have a real specialty in multiplatform development, which we had to show most recently with SpongeBob Bower for Bikini Bottom Rehydrated, which was a simultaneous launch on Xbox, PlayStation and Nintendo Switch, as well as PC. And that was 4 months into the pandemic. So we were all on home office at that point. And it was a challenge, but I never had any doubts of the team to be able to pull that off. It's a really incredible crew. So I'd like to mention briefly that we've had a relationship with THD Nordic since the foundation. Having our publisher literally 500 meters down the street from us means that when you have these inevitable communication issues, which come up from time to time, you can wait for lunch and figure it out. And it's a really different feeling working that closely with your publisher. We've always prioritized working with DHQ during the history of the company as well. So although we've been independent and we've been doing other projects on the side because we needed to, whenever there was that opportunity to collaborate with THQ Nordic, we would always do that whenever possible. We always had to look down that pipeline of future things. And in that time, we never below 94% of development being paid on the project. So we've been able to actually stay relatively fully staffed for the time we've been around. And by joining the TH Nordic family and the larger Embracer family as a whole, it's going to allow us now to focus all of our attention on the games themselves and know more of the business sort of distractions, which take up so much of your time as an independent studio. So we're really very happy and very excited to be working even more closely together and seeing where the future takes us. Thank you for giving us spongebob. That definitely helps our first and also the second quarter. It's been an amazing game and it's a steady seller. It feels like you're already a family member, and you are, but now you are within the family. And obviously, as you state, I think it will be more beneficial for the whole company you're running. And I'm thrilled to see what you are coming up with next. And also very welcome as shareholders of embracer. Thank you. And very welcome to SpongeBob. It's very much our pleasure to get to work on that. So thank you for joining, Andrew and Clemens, this morning from Vienna. So we say goodbye to Vienna, and welcome Klush. Hello. Stefan? Yes. Finally, you are on air. Thank you. Thank you. Hello, everyone. It's really exciting day for me and it's a great journey for the entire team here. I'm really, really glad, Stefan, that we have a bit of special background, the both of us, that we met like 9 years ago when I remember going down to Vienna and then acquired after a few months together with Clemens that we just met, acquired the assets of JUWOOD. And then your business basically was part of that group. And then let's give it a shot. And then really been building that business on very distance. Amazingly, I've been super impressed. And now we've been really providing really good services, not only for THQ and other group members, but for the wider industry in Europe. And the rationale behind having you joining is you were kind of the only company in gaming that I had outside Embracer. Previously, I've been adding game outlet Europe and Gaia to the group, and then I felt what to do with this because I don't know if I have more time to talk to you, but it feels like it. But before you just tell a bit about for me, it's important to just state that you will be directly under the parent company game outlet. You will not be part of the verticals. You will be more of a support function company in a way, but very independent. And obviously, you will be continue working with all the fantastic clients already have. So I think this is just a solution to in a way and I'm the shareholder of Embraer. And then so it's not really a big change in a way. But in a way it is, because now you are within the Embraiser family. So very welcome. And why don't you just tell a bit about and you, but especially the wider Quantic Labs? Thank you, Lars, for the kind words indeed. It was a long journey. And thank you also for the invitation to speak. And I'm happy to see that since we have first met, like you said, 9 years ago, almost then in Vienna, Both companies actually have Crohn, and we are on this stage today. Me, I am virtually on the stage, but you are physical there. So I was, my love with games started at the early age and, but at the age of 60, 17, I realized all my games that I've done by myself were just not good enough. So I gave up later. I actually started to work in the gaming industry around 18, almost 19 years ago in Austria, at Jobood, like you mentioned. And, based on my experience at that time with the quality assurance provided by various service provider at that time, I decided it's a need for kind of a different company. And, I tried to build a new company oriented to quality, not only quality assurance, and make things better. So 2006, I moved to Romania, Cluj Napoca, it's called the city, which is actually the historical capital of Transylvania. So, when I met, when I'm meeting with people and telling them, okay, we are from Romania, especially from Transylvania, everybody smiles. Actually, Cluj Napoca is a kind of Silicon Valley of Romania, so it's a very important IT hub for the Eastern Europe. So it was some kind, easier for me to start there. And starting, it was about starting actually with around 12 people the 1st day. And right now, after almost 15 years, we have 3 offices, almost 400 people from 20 countries. And we have a portfolio of projects of several AAA titles, our winning games, game of the years games, a lot of very well known products, where you will find our name in the credits. Actually, your strategy partner with the industry is the living motto for us, working with developers and publishers of all sizes and from all continents, from, we have from Russia to Australia. We have from, Japan to Canada and so on. Our clients are from all over the world. Actually, we have contributed to several of the most successful games published by embracer companies like THQ, Greetings to Purple Lamp, we have worked with them, great developers, as well as other top 10 worldwide publishers. So I'm happy that we could use our experience and knowledge in our contribution to these games. The results of our work are visibly in the quality of the games, the feedback of the players, and of course also the financial positive impact. But the most important aspect is for us, when we see the feedback of the players and there's positive, they like the games that we have worked. Sometimes we see the positive feedback from the community on things that we have helped to improve in the game. So it's a direct feedback for us. Actually, the services we offer range from classic quality assurance stands for all platforms, PC until to mobile, all consoles, also the next gen, to localization and customer support and a very important new part of our services, the so called user experience test analysis. This is a very, very new and exciting part of the business that we have started some time ago and we have a very, very good feedback from the market right now. An important message that I have is that, like you said, from QuantiCloud Business will be as usual. We are international, we are a top service provider for the entire gaming industry. It's not about Embracer Group, Embracer Companies, but all other companies all over the world. We offer services not only in the gaming industry but also outside. Because thinking outside the box, which is soft knitted in the gaming industry where you need to break the game to destroy it, works very well for other industries as well, like business software, hardware or other software products. So part of the business is not about games, it's also about other software. Stefan, sorry for interrupting you, Stefan. Do you hear me? Yes. I think Quantic Labs, when you're describing this that you're improving the quality and you provide many services that are perfectly aligned with obviously the strategy of overall embrace that quality comes first. And I think you're having a lot of services that we really need within to improve our quality of the output. Obviously, not only for Embraced Titles, but also for the rest of the industry. And because of confidentiality, it's important that you remain very independent. So Stefan, we are running very tight on time this morning. I well, every time I meet you, I enjoy meeting you and hearing about the business, and I'm looking forward to do that soon again. But I need to say thank you very much for joining this morning from Romania. Thank you, thank you, thank you. I also thank you, but as I wanted to thank you to my team because people are some of the people are already 15 years in the team here. So this is everyone. Yes. You have an amazing team and they you have improved the quality a lot of all your business areas and accounting and everything. So it's been a very interesting 9 years together, Stefan. Absolutely. I enjoyed working with you, and I'm looking forward in our Saksa collaboration also for the future. Thank you, Stefan. Thank you. Thank you. And we would like to welcome Anton. Sorry, I keep you waiting. No worries. Sebastian? Yes. Hello. Greetings from Stockholm. Hello, Lars. Hello, Sebastian. Hello, to the world. How are you? Very welcome as to the 100% owned now family member of Coffee Stain and Embraiser and welcome as shareholder. Thank you very much. It's great. Anton, why don't you just tell us a bit about why and how and why does this matter on the long term? Absolutely. So, Kovsei North and us, we've had quite a long history. We started working with them back in 2013. And I think it's very fun because we are coming from very similar backgrounds. When we started Coffee Steyn, we were 9 co founders coming from university and, Sebastian and his co founders are exactly the same. They were also 9 founders. And they actually came to us down in Khovdi in 2013 and pitched their first title, A Story About My Uncle. And we saw a lot of synergies already at that point. And we, it was actually the kind of the start for us to publish games. That was the first game that we decided to publish, which we didn't develop ourselves from Kofenstein. So that game was launched in 2014, a bit after Goat Simulator. And it maybe got a little bit overshadowed in that time period, but it's over time, it's become one of our most best reviewed games, actually. So it's a really nice game. And since that we've been working with Coffee Stain North. They were named Go North Games back then. And they helped us out with a lot of cool stuff on the Goat Simulator franchise, building the Goat Sea expansion and the waste of space and doing other things. And they've been a very integral part of our business. And in 2018, we acquired 60 percent of the company as part of a deal that was made, like, when they started on a new project that they've been working on for a long time now. And then when we got acquired 2 years ago, it was, I guess, a little bit of a surprise maybe for some of the coffee stain north people. And I think, like, we could probably have done a deal already at that time, but it was a bit troublesome and it was about finding the right timing for things. And I think that we have finally reached that point and we have finally made a deal and they have become full part of Kofstein, which I'm very happy about. So, yeah, we're super excited about this, obviously. And I'll leave it over to Sebastian to talk a little bit more about himself and his team. Yeah, yeah. Thank you, Anton. So, as he said, we've been under the coffee stain wing for as long as we've been a company basically. We were really eager to get into the industry, so we, the 9 founders, actually started the company while still in school studying video games. So before we were finished with the education, we had already released our first game through Kapustein. And as it turned out, they needed more help with the Goat Simulator when that blew up. And we were like just as eager to help them with that, and we had a really like fun time working on the franchise for a lot of years. And then in 2017, we finally pitched our next game to Compustein, and we can't unfortunately not like say anything about that today. But it's a pretty ambitious game. I think they said it was like the best pitch they ever had for what it's worth. I guess I can say that. And since then, in the middle of 2017, we've been slowly building a really great team to work on this title together, and we're really excited to be able to share more about it next year. We are as excited as well. Otherwise, you wouldn't be able to negotiate so good. So I think hopefully, the overall team and I'm happy, and I hope you are happy as well. And now we're having a very long term incentive together up to 8 years, and I think we are aligned. And yes. Yes, we're very much looking forward to the coming 6 years as well. Great. So thank you very much, Sebastian and Anton. We need to move on here in this morning. We have 2 companies to go here. And so thank you for your time. Yes. Thank you. So thank you, Stockholm. And I'd like to welcome Sally, Nottingham. Yes. Good morning. Thank you, Lars. Fantastic morning. I can't help to feel I'm falling in the boats for the Eurovision Song Contest here. But anyway, super delighted to welcome Silent Games from Newcastle to Empire Games family. We started talking to Sally and Joseph some time ago, and we immediately felt that this is a team that we want to be part of and want to support. We have great confidence in what they can achieve going forward and we want to be part of that journey. So Silent Games founded by Sally Blake and Joseph Rogers, 2 experienced game developers with a history of Ubisoft, Massive and Roadmaster and more. But together with the staff, I think that what's important for us at Danske are that they really embodies the kind of people that we want to work with, we want to support. They have great ideas. They are highly innovative. They are awarded game developers, but most of all they are fueled with passion and engagement, which really excites us. So very happy and honored, Sally, that you're allowing us to be part of your journey. And Sally, of course, yours will have them tell us a little bit on why you choose to join us and what you set out to do and where you're headed. Yes. So obviously, we've had a number of conversations with you guys at Amplifyr now, and we felt that you just really understood our vision for our IP. So obviously, that's the number one important thing. But also we talked a lot about studio culture as well and how we wanted to grow the studio in terms of taking care of our staff and making sure that they're looked after and also their careers are developing well as well. So those discussions were really important to us as well. And another thing that was important to us as well was finding a partner that we can work with for the long term as well. So we weren't just looking for somebody to do one game with and then move on. We really wanted to find somebody who we felt we could fit with over a number of years. And I know that was part of Amplify's strategy as well. So that just felt like a really good match. And obviously, talking to you about your values as Amplifier, there were so many matches with what we wanted to do with Silent Games there. So yeah, it was it just seemed like a really good match for that. Thank you. Could you tell us about a bit about you and the team's background? Yeah. So I've been in the game industry for about 10 years now. I used to work at Ubisoft for a long time, so, my experience is in AAA. Our other co founder, Joseph, has similar experience as well. We both work together at Ubisoft. So, yeah, our games are in more the AA bracket rather than the kind of indie bracket, so we're taking a lot of learnings that we've had from our past experiences. And, yeah, I've just been playing games since I was very young as well, so incredibly passionate about the type of games that we're making. We're going to be making RPG games, which is something that both Joseph and I are huge fans of. So yes, we're really excited about how we're going to develop RPG games now. Salve, I'm really excited to have you joining and team joining. Perona have been pitching you well to me. And I'm glad to have you also as a shareholder for a very long and to have aligned interest with your ambition to build a sizable team in Newcastle. Yes. And Newcastle is a really great development hub as well. Like, I know that it's this is one of Amplify's first acquisitions in the UK, which has just a really, really strong game development scene. And both Joseph and I have been really active in the community. We have some great partnership, the local universities as well. There's local businesses that have motion capture studios and stuff that we're really, you know, we have really solid connections to. So really excited about growing. We've had loads of, you know, people congratulating us on the news and it's just clear that people are really happy for us and are looking forward to seeing what we do next. So yes, yes, it's been really great. Thank you, Sally, and thank you, Perrona. So we say goodbye to Newcastle and Stockholm. And welcome the last but not foremost final team and company to the group, Flying Wild Hog and Michael Herr and Clemens. How do you feel? Are you tired? Yes. As I'm getting used to these type of deals after 5 studio acquisitions since I joined you. So I now know what it means, yes? But it's hard to top all the excitement that we have already heard over the last hour. But for us, it's a very special moment. It's personally for me, it's the biggest deal I've ever done. And it's probably also the fastest deal that we have managed to do. And why this is great? Since our beginning with Deep Silver, we have always been in the space of over the top action games. And finally, here is a studio, which is all about fast paced over the top action. And so I think that relationship is just, I think, just made for us. And I'm super proud that we are now not only teaming up with this great team, but also having a strong foothold into the Polish market. We have been working in Poland with Studios since 2000 and 3 when we started working with Pavel at Techland. And since then, we have done a lot of business with lots of great Polish studios. And now with the Hawks, I must say, here we are entering into a new phase. We really want to be part of the Polish games industry. And Mikael, I think you're going to be the key to that, yes? So over to you. Mikael, very welcome to Karlstad, Sweden. I still enjoyed the moment we had a few weeks ago while you were in Karlstad with your management team actually. I'm super excited to be here today with you. It's been a very intense few weeks. But why don't you tell us about yourself and the hogs? You're on mute. Michael, you're on mute. Could you hear me? We're talking too much this morning, Rick. They're cutting the lines. Could you turn your mic on? Try once more. Clemens, why don't you just tell us a bit more about the hopes from your side until Michael gets unmuted. Sure. The Flying WampHornk is a studio at 3 locations in Poland with the main headquarters in Warsaw, but also significant studios in Krakow and Zezdorf. And they are currently working with 3 other publishers. And I should say, the obvious question, what is does that mean to their relationships with other publishers? And my answer is absolutely, we will continue with our relationships and the Hawks will be available as a studio also for other business partnerships. However, we also love to see them working on some Deep Silver and Koch Media IPs going forward as we grow the studio, yeah? Michael, are you on now? Hello. Hello. Can you hear me? Yes. I'm really sorry. It's like year of this online situation and still we have technical problems. So first of all, thank you very much for very warm welcome. It's super exciting time for the Hawks. Thank you very much, Clemens, for all the hard work regarding the transaction. It was super intense for everybody and we appreciate the effort. So I would like to tell you something about the Hawks. 1 of my 3 kids, actually I have 2 wonderful sons and flying White Hawk and flying White Hawk is the Al. I founded the company like more than a decade ago in Poland. To give you some context, Poland is like one of the most important places on the game development map in the world. We have like more than like 10,000 developers in Poland, like 400 studios and we are growing and growing. And HOKES are located in center of Poland in Kapital City in Warsaw. And we have also 2 other studios in major port cities in Karakor and Zhevsky. Our mission in the Hawx from the beginning, it was not only to make like a video games, but also to create like a happy place to work. This was always our dream. And we believe like that only in like happy place, happy people can be creative. And it's important for us to actually keep reputation of this happy and best place to work in Poland. And honestly, I think we are succeeding. We have like more than 260 employees. We are one of the biggest game development companies in Poland. We keep quite high retention rates. We are growing every year. On average, we are adding like 25% of new employees each year. So it works basically. But we still want to be like super effective team. So we hire mostly senior developers like twothree of our people have more than like 5 years of experience in the industry and we are super proud that we have such experience and talented team. Also to be effective, we are trying to increase synergies between studios. So all the studios in Poland uses the same technology, which is our engine. This great team is led by also experienced managers team. We have like more than century of combined experience. Before joining the Hogs, we worked in top studios like City Projects where people can fly. Myself, I started almost 12 years ago in city project. So it was an interesting period for my life to start our mine own company. Mikael, why did you decide to join embracer family? And why do you think what's the opportunity here? And where do you see Hogs in the future? And where do you see where you fit in with Koch Media and Embraiser? So this 11 years, so we've been on this route to become like a world class AAA action games developer and this is our goal and we feel that we found we feel like a perfect partner to support this dream. So I believe that Embrace and Coach Media, you will not only fuel our further growth but also you'll help us to establish like the even more strong position on worldwide markets and attract even more developers to join the Hawks. And Couch Media obviously a super renowned publisher. I expect they will support us with like their business experience. We have access to like really wide high people. So, that would give us like the opportunity to explore a lot of new directions and create more and more ambitious projects. And I really loved your idea, Lars, to create this federation of independent developers. So I feel that joining this alliance will give us like this option to share the experience with other studios too. Within the COG, we are going to be like independent studio. So we hope that together we can build like even brighter future for the HOKS, for that group obviously. For sure. You will I'm really looking forward to see you grow the hogs over the coming years and build more new or based on established IPs product. And I think the real, let's call it, synergies or business will be seen like in 5 or many years ahead, yes? And I think organically, I'm sure we want to add a lot of very senior and talented people within you. But perhaps, I know you are connected to more or less most people in Poland in the industry. So perhaps you can create some new opportunities within either M and A or publishing. Who knows? So I don't know. We are running a bit over time here, Michael, so we kind of need to finish this off. But you are very welcome to the family and also very welcome as shareholder with a long term incentive in embracer. And say hello to the your full team from me. I'm looking forward to meet them sooner rather than later. And thank you, Clemens and your team for making this happen. You've been working around the clock to get this done. Thank you. Right. Then we have a final presentation. And I know, Oskar, you have a lot of questions within you. But I just want to give you a very brief summary of all the M and A activities this morning. And because I think it's important for the shareholders and the market to understand the acquisitions. So obviously, we were excited to add more than 1200 talents to the group and 13 companies this morning. Looking at the KPIs, we are increasing, obviously, the number of internal studios from 46 studios to 58 studios. And we are increasing the number of development projects in the pipeline to 154 projects. And in total, we are engaging as of this morning now more than 4,300 developers across the world. And here is where the companies are being managed and the synergies on a daily basis are created within the verticals. And I would like to point out that even though we made 13 acquisitions this morning, we did not add a new vertical. And that's how we've been growing by the embracer operating model. So I'm really glad to see that the model we are implementing across to organically and inorganically expand embracer Group works, and more people would like to join. This morning, we invested bits of money and shares into these companies. So the aggregated day 1 purchase price for all the acquisitions amount to approximately SEK 2,000,000,000 this morning on a cash and debt free basis and SEK 1,700,000,000 of that in cash and SEK 1,300,000,000 in newly issued shares. The majority of the SEK 1,700,000,000 as you saw in the press release came from the transaction of acquiring the Hogs, you just met, because that owner, which is a very nice guy from the industry, are exiting that business as of today. And then we have created very long term incentives and earn outs for the entrepreneurs and the managements that are joining that are up to 10 years, 3, 5, 7, 10 years. And it's based on financial KPIs achieving whether it's EBIT or operational metrics that certain games should be released or people should stay on board. And that could be up to EUR 1,800,000,000 over coming totaling over the coming 10 years, EUR 900,000,000 in cash and EUR 900,000,000 in shares. Worth pointing out that this obviously ambitions to achieve this earn outs are notable, especially in the end of the period. Just looking at the company as thinking they should aggregate it, achieve 200,000,000 dollars in EBIT over 10 years in order to achieve their part of this earn out. So the maximum consideration could amount up to 3,800,000,000 And then in order for Oskar and the market analysts to understand what we did this morning, we decided to do aggregated forecast of estimated net sales. And for the period of the next financial year starting 1st April 2021 until March 2022, we currently estimate the acquired companies to generate between €850,000,000 in net sales with operational EBIT to €300,000,000 to €400,000,000 added. And then we will have further savings on capitalized game development of €50,000,000 to €100,000,000 So combined, we're making a profit for the group of 350 to 500. We expect this number to grow the years thereafter and especially looking perhaps more 3 to 5 years and obviously 10 years. But when a lot of new products they will be developing or products they are in early stage of developing will be released. And from a strategic standpoint, let us show you the picture and the strength of our Embraces operating model that enables a considerable growth, but also enable us to make 13 acquisitions this morning, even though it was a lot of hard work. And over the past 24 hours, we I reckon we engaged about 250 people on buy and sell side across the world to make this happen. So working on a global basis with and Baker McKenzie and several other advisers, as long as with management teams and the embracer teams and consultants. And just on the buy side, we were more than 150 people. So from the business we IPO ed 4 years 2 days ago, we have grown that a bit. But I have a very long term vision to build this into something substantial. But I would like to give you 4 years stop picture. I don't know the right wording for that. And here, you can see where how we are building and adding under the verticals companies. And again, the capital structure, we do have SEK 8,500,000,000 available liquid funds after paying the considerations as of this morning. And we got further 40,000,000 shares under mandate as of this Monday, and then we paid a bit of that this morning. But most of this remains as a mandate for the board in order to use for acquisitions. And M and A outlook, we are active. We are active within the verticals, and we are active for the parent company. And we're having lots of people engaging in this. And I'm my ambition is definitely to add more verticals into embracer and to continue building this. So thank you very much for listening, and sorry for taking a bit more time than you probably expected, but I couldn't announce that time window in the press release because I'm sure a few shareholders would ask me why you need 2.5 hour. So leave over to you, Oskar. Thank you very much, Lars. I'm super excited to start a super short Q and A here, I think. But I mean, just starting with the Q2 report, which we have to discuss despite the acquisitions here. But I mean, very strong back catalog sales of SEK 1,000,000,000 and I mean a notable performance, I would say, for coffee stain, for THQ Nordic. What are the main drivers for THQ Nordic, which has really grown, I mean, very impressively, I would say, over the past couple of years, actually? I think they have been releasing greater games. And games like Spongebob, for example, did bring in notable back catalog revenues into the quarter. But they've been pointing out titles like obviously, again, Wreckfest and many, many other titles. They're having a quite notable catalog of products now that are continuing to perform. And hopefully, they will be adding more. Yes. And I mean, in the past couple of quarters, I've been quite impressed by the reviews. I'll say the releases, the new releases in this quarter, slightly more mixed reviews, but still perhaps the in house developed titles really strong. What's your sort of sense for the releases? Are you happy with the overall reception? Yes. Well, I'm happy with the overall increase in quality output. Obviously, sometimes, you need to manage communication and expectations sometimes as well. And making an old game remastered, you know, sometimes, you know, it could be difficult. And obviously, making a remake is a big difference for making a remaster, for example. But we still have games coming out that we started before we did the IPO. We had Equinox coming out early this quarter. It has its fan base, but it's been in development for a very long time. And so there is a mixture of titles. Yes. And turning towards the outlook, which I think many people are wondering about a bit. I mean, you're guiding down a bit the financial development, sort of the finalized development for this year from SEK 1,200,000,000 to SEK 1,400,000,000 to now or just over SEK 1,000,000,000 basically. What is driving this and what is driving it primarily in Q3, which seems to be the weakest quarter this fiscal year in terms of new releases? Yes. I think, obviously, we don't it's very hard to plan your releases, and I love to be or we will love to be in the fortunate position to pick your release dates and but I think that is something for the future that you have more titles completed, ready to release. So this quarter, we had didn't have enough titles ready that I'm sure were planned perhaps 2, 3 years ago to be released. Now they might be moved to next quarter or next year, for example. Delays in the industry are every day basically. So we had I wouldn't say a lot moving. We had a few moving. And obviously, when you look at these numbers, if you just move a few titles just a few weeks or a month, that could have big impact in that number. If you're a long term owner, it doesn't really because you've had the cash flow, whether it's 1 month or 3 months or whatever it is later. Again, quality comes first. And then normally, you have a bit of delays every year, but you're also having a number of pickups you do as a publisher normally. And that becomes obviously the plate and the mixture. I think it's hard to give you a lot of more color than that. I don't think we had any significant delays really. But the thing is we have so many, we have a lot of titles under in pipeline. Yes, great. And Biomutant, I always have to ask about recurring item here. But I mean, it's down from 11,000 bugs to 1,000 bugs. How many bugs can you live with? And is my interpretation correct that you still expect it in Q4 according to your outlook guidance? Well, what I said, Oskar, THQ Nordic have a notable title mutant, and I think we could leave it there. Well, how many bugs you can have? Again, quality comes first. Would such a game be bug free on day 1? I don't know. I'm not the right man to answer that question. When I see other open world games, there is quite a few bugs. But again, you need to look at the product. I think the KPI bug is not you can have a major bug and a very small bug, so. Great. And I mean turning towards acquisition, which has been quite intense this quarter, as we've seen over the past 2 hours. So I won't go into details, obviously, on all of those. But if you perhaps could summarize the sort of different themes in the strategy, and I see a couple, for example, expanding development capacity in Eastern Europe and also the strong growth potentially in mobile. But how will you sort of summarize the acquisitions, if you can? For me, it's about people, adding great people to the group that knows what they're doing and that are long term, whether they are a developer or an entrepreneur. This time, we had a lot of developers. Perhaps we obviously, as you know, there is different talents in the industry. So over time, that will be a mixture. But one of the scary sources in the industry are great, great developers. That is a scary source with the experience of really building next level products or having the experience of building, as you saw early in the call, these mobile games, iterating them and building them over many years. That is something you need to learn the hard way with some really skilled people learning. And that's you know, I think the whole mobile thing is kind of very exciting in a way, and this I'm 12 weeks into that now. So I'm learning, and I'm really happy to have these fantastic people that teach me to how to manage in this. And I have to ask about, I mean, the Hogs, which is perhaps the most notable acquisition according to me, a renowned Polish studio and company. And I mean, it seems like the plans over the long term is from going a bit from working with external partners to actually perhaps developing their own IPs over time and investing more, taking it to the next step. And I guess that can be said for a few other acquisitions as well potentially. Yes. I think perhaps not so much Hogs, but partly Hogs and especially historically the Hogs, but also other students you met today, they've been struggling to get the cash flow over time to fund their business. And it's not that easy, because it's to make big gains cost a lot of money. So and you need to find the right partners. And it's not easy. So our ambition is obviously to put them long term and to give them a focusing on games development, focusing on them building what they want to build and with the best IPs and resources. I think that will make a huge difference for them. I think we are open minded of working, and I wouldn't tell they should run their business and Clemens are running the business. I know they want to continue working with at least few external business partners. But obviously, the opportunity to work with in house IPs or build new IPs is also great. So I think that is obviously, it would be an ongoing dialogue with business partners, them and Clemens and Koch. They've been building together with other people, Devolver, Shutterboy, for example, an amazing game. I wouldn't comment on that, but obviously, they've been working long time with a few business partners, which I respect personally a lot. So let's see. You know. And 2 final questions, I think we might have the time for. I won't have time to ask all the questions from the web. But one question is regarding the impact of COVID-nineteen. Can you sort of give an update on how that dynamic is progressing now in Q2 and Q3? Are things normalizing? Or is there still increased demand? You mean from the demand side? Well, we didn't give an update date on that. We gave that on the AGM that what we saw in the Q2 was a higher engagement, but much lower than the Q1. I guess that is in a similar way in a higher engagement currently. I can't give you a number on that. And now we're having an ex generation of consoles that we've moved overall KPIs in the industry. So I think our business are primarily driven by executing great new games, whether it's a pandemic or not. Great. And actually, I just heard we have some people on the line as well for a few quick questions. So it's going to be a long one. Please go ahead on the telephone line. Thank you. Our first question comes from the line of Tim Singhaler of Citi. Please go ahead. Your line is now open. Thanks for the presentation. Very thorough. I have two questions. One was just on the latter point really. Assuming there is a benefit from COVID in terms of engagement and back catalog sales, To what extent do you at Embracer Central actually ask the operating units to slow down launches? Because it seems like that would be a sensible thing to do. So I'm just interested in how in the weeds you are at sort of in greater sense. Are you asking them to delay in order to smooth revenue? That was the first question. And then the second question, I think you showed it on the presentation, but I couldn't see it as it flipped past. Quantic, of all the M and A deals, Quantic, it seems like the biggest departure with testing. You mentioned it was going to be independent. I was just wondering where it's going to sit financially. And I mean, which operating segment we're in? It will not sit under operating. We have a bit of how should I phrase this? We put it under a parent company. It's a company that are super well managed on their own, and we already have the financials systems more or less in place to integrate them. They will be super independent from the rest of the verticals. But I don't want I personally really enjoy Stefan and the team. I appreciate their businesses. I didn't want to just sell it on to, I don't know. It's part of the family. So then I brought them into the family. First question, COVID. I didn't fully hear you, but I think it was about development. I commented that well, I asked we asked a number of major studios we had across the group regarding if there is delays for them in terms of development. And they've been telling us well, they haven't really seen that delays or production, obviously but obviously, they're telling me that it's a difficult situation, pandemic, but they haven't actually seen a delay caused by the pandemic. There could be other delays, but you always have delays as a games developer. It's hard to get full science on this, but at least we try to give you some science on that. So or science, but feedback. So I hope that answers your question. Yes. I was going to say, do you ever throttle launches, I. E. Do you tell people tell your operating entities to slow down or Slow down? Yes. No. Now they continue operating their business in the speed they would like to and could manage. Obviously, from the corporate perspective, there is the integration of companies and the financial integration, the governance integration and ESG integration, and we need to cope up with that. And but so far so good, and we're building out we're building that capacity, but we're using a lot of external resources within the big four companies as well in order to manage this on a global basis. It's part of the embracer operating model to strengthen the governance and financial and controlling within the verticals. So they should basically replicate more or less what we have on the parent company level. Otherwise, our operating model wouldn't work. So they should have everything from group accounting down to integration and many other functions. Obviously, today, we are supporting smaller verticals with a lot of this, and we're building it up with DECA and Sabre. I don't know if that is answering slowing down or if that was the question, but I don't think we're rushing. I think I just think we are I wouldn't say this is every day, but I expect us to continue in a similar pace. Very clear. Thank you. Just to give some more color on that, obviously, if a vertical say, it's enough, we are we need to focus on fine. You don't need to do acquisitions. I'm not forcing anyone to do any acquisitions, but they are running. Okay. Let's see if we have one more question from the phone. Thank you. Our next question comes from the line of Alex Duvall of Goldman Sachs. Please go ahead. Your line is now open. Yes. Hi, everyone and me. Thanks for the question and congrats on the strong results. A couple of quick questions. First of all, you strengthened your position in free to play. I wondered if you could talk a bit about what you see as attractive attributes to that market. And secondly, also saw that clearly gross margins were nice in the quarter and not quarter on quarter. Could you talk about the drivers of gross margins and the extent to which those can continue to improve in the coming periods? I think it's hard to talk about gross margin coming periods. But I think in general, we've been seeing improved gross margins driven by various factors. Obviously, one factor being we have been acquiring companies with very high margins such as Sabre, Coffee Stain growing their business. That is obviously driving our margins up. We're getting more titles like service like titles. That is also driving the margins. We're getting more catalog. Already amortized titles are still performing quite well for us. That's it's adds to the margin. I think this quarter, we had a fairly good margin across the board. Also think the Partner Publishing segment also had a fair margin driven by Film, for example. So there is every quarter, there is a different mix. Regarding free to play, I think we are very early in building this. Free to play is the biggest market. And just looking at mobile, it's enormous. And it's ads driven, it's runners, it's free to play, it's and then there's the free to play PC console. So I first of all, we will operate under the embracer model, try to find this true long term creators, companies that truly enjoy working with other great people with the right long term vision of creating the next games and to having good work life balance and job security and these things that really matters for our employees. I think that will matters. And what I see when there is a very competitive environment in M and A and in mobile, I think we're having a competitive advantage a bit also in mobile. I've been turning a lot of companies away because of price and companies have been owned by venture capitalists that want to maximize the cash day 1, and we've been walking away quite a few times the past weeks months. But there is also companies like Kenshi here, for example, that truly would like to join and decided with even though having tons of other options on the table, joint, embracer and what they could create within DeCA. And I think what they're creating within DeCA, I think, can should answer on, and I'm sure if you'll come back to that in the coming year and quarters. But people are quite excited, and I'm super excited. Great. And with that, I think it's time to round this off. Thank you for all the questions from the phone. And thank you, Lars, and I'll leave it over to you to round it up. Okay. Thank you, Oscar, and you for listening in, everyone. Sorry for taking 3 hours of your time, but I promise now is done, and looking forward to see you next quarter. Thank you.

• Quarterly report
• Slides