Earnings Call: Q1 2019

May 8, 2019

Thank you very much, and welcome to our Q1 presentation. We start at Slide number 2, which is a brief overview of our company as we stand, our group. And just for those of you who are not that updated on our company, very brief, we are a group of a global group of gaming studios throughout the world. We have in total 11 studios in operating in a number of different countries displayed on this slide. And we have approximately 5,900,000 users that play our games every month and we will go deeper into those data. Important to recognize is that we focus on a particular part of the gaming business, and that is our main focus online strategy games. We have loyal users, and we have games that last for a long time. What could be noted on this first slide is also that we on the upper right corner, we have the geographical distribution of our revenues, and we can see that Europe is up to 53% from 51%. And we have 17% in Asia, and North America represents 27% of our revenue. So a bit increase in Europe compared to Q4. If we go to next slide, Slide number 3. It's the highlights for the Q3, and we think we had a very strong start to the year with a revenue growth of 33% in revenues and also that represents or underlies with 40% growth in deposits. We will go deeper into that, of course. We combine that with a solid profitability with an EBIT margin of 27%. We have increased the marketing spend during the quarter. We increased it up to SEK 108,000,000, which represents 26% of our in relation to our net revenue. So that is some SEK 32,000,000 higher than in Q4. Going to the operational side of that, it ties into that we really are pleased with the high profitability of those marketing campaigns and the marketing spend. And that is one of the key things that we will elaborate during this call. Further, we can see that we have very strong momentum in our product area core product, especially that Nida Hartzwee reaches completely new levels, and we are obviously very happy with that. Also, the new members in the group, the Imperion Line and Shakes and Fidgets are contributing with very high margin. And also with our new launches, Striker Nations and Siege World War III, they are developing well and according to our plans. If we go to next slide, Slide number 4. We should go a bit deeper into our portfolio. And we have which is a very important thing for us, we think we have further improved the good balance in our portfolio. And with that, I mean primarily the balance between more mature products and products that are quite new to the portfolio, of course, driven from the fact that we have 2 launches that have been successful in Q1, but also when it comes to larger products and more new products. And also, as you can see now, we have core products that have overtaken Empire as the largest product area with 4% to 3% of the revenues and Empire 2nd largest with 38% and the big brand at 19%. And this is not this is driven by combined with the fact that all three product areas are growing also this quarter as it did in Q4. So we are pleased with the balance very pleased with the balance in portfolio and also that all product areas are growing. If we go into the Empire brand, which consists of 4 different products, We had deposits in Q1 of SEK 161,000,000, which is on year on year, 10% lower than last year. But also important in that aspect is to see that we have a much lower U. S. Fee. We have half of the U. S. Fee that we had last year Q1. It amounts to SEK 17,000,000, which is approximately 10% in relation to the net revenues or sorry, the HOTELS. Very important is that we even though we are spending not more than 10% in UAC, we do see a sequential growth for the 2nd quarter in a row. So this is 3.5% growth from Q4, which is a very strong quarter, to Q1, which is on the compounded level, represents 15% on an annual basis. So we are very happy with that. And that combination is shows the strength in the product category that we will come back to later as well. Moving over to BIG brand, which consists of 3 products, had deposits of SEK 79,000,000, which is a 17% year on year growth with a UAC of SEK 37,000,000, which is a growth of 4% compared to last year. And we can show a sequential growth of 14% compared to Q4, which is on a compounded annual growth rate, represents a compounded annual growth rate of 70%. So it's a good pace from Q4 into Q1. And the main reason why we can achieve that is also that we can see that as Big Farm Mobile Harvest is maturing, the engagement increases and the monetization increases as well. That is what we hope for and what we have worked hard for. And we also, therefore, are pleased that we can see that those results are in place. Moving over to core products, which is in total now our 24 products. We had deposits of SEK183,000,000, which represents a 172% growth year on year, which is obviously very pleasing to see. We have a UAC on of SEK 53,000,000, which is a significant increase, which is natural since we have enjoyed good return on that marketing. And as you can see then, the UAC the total UAC that we have spent during the quarter, approximately half of that spending is within the core area. Looking at the largest product for the quarter, Nideh Hard is up to SEK 60,000,000, which is a sequential growth from Q4 of 33%, which is very, very strong, and we're still happy with that being a product that has been out for 1.5 year approximately. That is very pleasing to see that we take it to a new level. 2nd largest is Shakes and Fidgets with SEK 28,000,000 and Kolobor is 3rd largest with SEK 17,000,000. The key strength, as mentioned or touched upon, is the return on marketing during Q1. And we are very pleased to conclude that we had a recouped marketing spend and that is net money back recouped within 90 days. And that, I think, is a very, very strong number. And that is basically what explains that we can achieve a deposit growth of 17% from Q4 to Q1. That is not possible without very successful marketing. Then we have the long tail product in Others. I don't comment that any further. But in total, we think our portfolio is in better shape than ever basically. Turning to Slide 5, to look into our user data. We can see that we have overall time high, both in daily active as well as monthly active. And we can see that it's the strongest growth is within core products, very strong growth, both from, of course, from the consolidation of Buyer Games, the full quarter, but also from the fact that we have good traction in the launches of Dragon Nations and Switch World War III. We can also see that we have a decline in some of the products on a yearly basis. But also, you can see on Empire that the even though it's a much lower number on the year on year number of monthly active, it is a 7% sequential growth in monthly active. And also, as mentioned previously, the monetization is stronger in Empire, which makes it possible to grow even though the total user base is going down, which is a natural pattern as we have not done that much user acquisition on those areas. So it follows basically the expected pattern. Turning to Slide 6. Looking at the monetization side or the paying user base and what we can what we have what kind of results we have there. You can see that looking at both monthly paying users and the average revenue per monthly paying users are also on all time high. So all 4 key user data metrics are on all time high, which is, of course, pleasing. And we have a very strong monthly paying user growth in core products coming both from, again, consolidation of Playa and the new launch product. But we can also see that when it comes to the number of paying users, also the big brand has grown by 16% quarter over quarter, even though it's a lower number compared to where it was launched 1 year ago, but still it's a sequential growth, which we are happy with. And looking at the monthly paying user, it's you can note that it's flat compared to Q3 over Q4. So it's a stable core that proves that it's a stable core of users playing Empire. And also, you can see on the revenue side that we are reaching a new record level when it comes to the spending in Empire, which then explains that we have growth for the 2nd sequential quarter on Empire. So we're up at SEK 801 per on average per month. And we have a slight slightly lower average levered income of the paying users on big pharma or big brands. That is due to that we have a, in fact, a different pattern, and we have increased the number of paying users as well. And you can see that on core, we are increasing significantly from Q4. And the reason why it goes down from Q3 to Q4 is, of course, that we added the 2 new products, Shake and Fidget and the Imperial Online, which has lower numbers. So that is Slide 6. Moving over to Slide 7, which is an important slide because it captures and I will elaborate a bit more about the numbers here, but it captured very much what is we think in the company, the strong parts in this report. But if you look at the on the right upper side, you can see that we have the growth mentioned previously of 33% in revenues, but also it's important to see that the SEK 418,000,000 is then a growth of 14% from Q4, and that is the growth rate the compounded growth rate that will represent the compounded growth rate of 70%. So we are very happy with that. And also, it's important to note that the deposits in total were SEK 431,000,000 in Q1 'nineteen. Looking at the rolling 12 months, I think that captures the stability and the predictability that we have in our business and that we work very hard to maintain and improve. Constantly. You can see that the rolling 12 month top line is growing steadily at a stable pace and even increasing pace actually. So it drove the rolling 12 months by approximately 8% from Q4 to Q1, and that represents a compounded rate of 35%. So I think it goes definitely in the right direction. Looking at the EBIT development, you can see that the EBIT development is growing on the rolling 12 months in the rolling 12 months graph on the lower right side among the graph. It's up to SEK402,000,000, which is 10% higher than Q4. So that's a compounded growth rate of nearly 60%. So EBIT is growing faster than our top line. And having a high top line growth, that is, of course, pleasing and shows the scalability in our business model. Also notable is that we, during the quarter, had 55% mobile share of revenues, up from 51%. So that is usually well, that is hurting a bit our margins. But still, we delivered 20 on a rolling 12 month 28% sorry, 40 quarter 27%. Last comment on this slide is that we again, on the rolling 12 month EBIT, you can see how we are step by step improving our EBIT margin. So from 22%, 20% and then 21%, 27%, 28% on the road in 12 months. And as you might have recalled on previous calls, we have a long term objective financial target of reaching 30%. So I think that we have a very good trend on reaching those levels. All right. So we move over to Slide number 8, and I let Stan continue from there. All right. Good morning, everyone, and welcome to the call. Turning to Slide 8, I'm going to elaborate a little bit on the income statement. As you can see, we have revenues of SEK 4.18 1,000,000 in the Q1 2019, which is a 33% increase as compared to the Q1 2018. It's a 14% increase as compared to the Q4 'eighteen. So we're super happy with that, obviously. This has here again has Nanthem. This is driven by strong growth in several products, especially in the midahave product family and also in the recently acquired studios of Imperial Online and Playa Games. We have capitalized product development items of SEK 38,000,000, totaling our growth revenues to SEK 458,000,000. As Jurgen mentioned also, we have a 55% share of mobile revenues, which costs us a little bit more than browser based products and distribution costs. Nevertheless, we managed to keep gross margin at 75%. And the cost of sales is besides the distribution costs and that from fees, it's also royalties in the case of Bahin. Otherwise, we all the intellectual property and stone, Haydn and Royal, which is in a stone development. Another huge cost item is obviously the UAC of SEK108 1,000,000 in the quarter to be compared with SEK76 1,000,000 in the 4th quarter. So the share of UAC as compared to net revenues has increased from 21% in the Q4 to 26% in the Q3. This corresponds to an EBIT margin of 8%. So the EBIT margin in the Q1 was 27% and 35% in the 4th quarter. So there's a difference in 8 percentage units there, which is closely related to the increased cost in U. S. Moving on, we had EBITDA of SEK 154,000,000, which is a 50% increase. This has been marginally affected by the implementation of IFRS 16, which means that we increased the EBITDA a little bit. The effect of IFRS 16 is approximately SEK 4,000,000 for the quarter. And the effect on EBIT is less than SEK1 1,000,000, a couple of SEK100 1,000,000, so but there's no big impact on the EBIT numbers. Moving on to Slide 9, the balance sheet. Obviously, since we acquire we have a statue of acquiring the girls. We have some goodwill and the goodwill now amounts to SEK1.7 billion. And we have that divided into 3 different goodwill items. We're still from as it was before the acquisition of Goodgame Studios amounts to SEK1.1 billion. And Imperia and die gains the other SEK 600,000,000. Also, we have capitalized the product development expenses and the products and rights and other intellectual property that has been acquired in conjunction with the acquisition of the Certiose in our portfolio amounting to EUR545,000,000. We have on the test side, we obviously have the bond with a nominal amount of SEK 600,000,000, which is recorded in the SEK 597,000,000 since we have some present value that's placed on that. And we have also the liabilities related to the earn out components from our acquisition deals. As I'm sure you're familiar with in the acquisitions we make, we normally have quite a substantial earnout component, which is based on the financial performance at low EBIT multiples and which are to be paid in a combination of cash and equity. Moving on to Slide 10, cash flow statement. We're quite satisfied with the cash flow even though it's been negatively impacted from changes in Walshi capital during the Q1. Obviously, there is an increased need for working capital as we grow, especially in the mobile segment, since there's a slower conversion from sales to cash when we do our sales with the Apple App Store and the Google Play, whereas in the browser world, our funds are more or less available within a few days. So that does need some more work in capital. There's also an effect of that Apple does not comply to the normal calendar. So capital applies a pattern of 5, 4, 4 weeks per quarter, which does not always match the actual calendar quarters. So specifically for the Q1, for some of our sales, we only received 2 settlements from that, whereas it obviously should be 3. And over the full year, we have obviously 12 settlements. But for this specific quarter, that has seen a negative impact on working capital capital. So Jurgen, I'd like to turn over to you and have the future. Thank you, Sven. Yes, we have a high ambition with our group, and I think that we have started off well, but our aim and probably much further away to build the leading group of independent game developers and publishers. So we are making hard efforts to become a significantly larger company over the next coming years, both through organic development and through value adding acquisitions. So we have a strong pipeline for that. So that is what we aim for. And I think we do this report and the previous ones. We have taken significant steps, and I would like to highlight a couple of those steps that are important and have been important, but we will be even more important to reach our vision. One is that we focus a lot on leveraging on our scale and on the model that we the organization model we have with a high degree of decentralization. And that is very, very important for several reasons. One being that we, through this way of organizing the group, market and adjust the marketing campaigns for every region, every of our 31 products or 29 online products in a very rapid manner. And that is what explaining how we can recoup marketing spend in the core example of less than 90 days, which is an extremely strong number in our view. We are also very agile in product development. So what we do is that we every single day, we have adjustments in marketing and product sales throughout the group, which proves my point there that we can adapt rapidly. For instance, on the product side, if we see that we need with new feature updates to existing products, we really can gain improved monetization, then we can replan from taking resources from new products and put them on feature development for existing ones or vice versa. So it's a really agile way we have our operating group, which is one of the explanations why we can access so fast and be stable and follow the market changes in a good way. Further, we have built and put a lot of effort into this quarter, just the previous quarter, into M and A. We have a stronger pipeline than we've ever had before, both in terms of quantity and also the size of the companies are a bit in general larger. So I'm never in a hurry. We keep our model of making M and A, which means that we follow a number of companies for quite some time. We scan very high amount of companies. The ones that we follow and find interesting, we are in talks with and discussions to see that we really can add value if they would be a part of the group. I think that model for M and A it is lowering risk with M and A, but also finding the right companies at the right moment. So we're continuing that those efforts as we go along. Further, the third part I would like to emphasize is synergies. One thing that, to be honest, has exceeded my own expectations is the number of projects and how fast we can find collaboration projects between the different studios. Currently, we run approximately 15 different collaboration projects between our studios And several on the marketing side, the Goodgame Center of Excellence for Marketing and Distribution has really delivered. And you can see that as they are performing the marketing for Nidehard, it's really, really an amazing job that they are doing together with the Bavel team, of course. But also on the tech side, cross platform, HTML5 and a lot of other areas. So we are really drawing some hard synergies out of that. And of course, the top of all priorities at all time, I would say, is to further expand our portfolio in the right balance with the right profitability and the right high quality product with loyal users and with long life cycle products that enables us to continue to grow with high profitability and still combining with stability and predictability. Thank you very much for that. And I think we'll now move over to the Q and A session. Thank Okay. And our first question comes from the line of Pradrak Svynovich from Odea. If we start by talking about the earn outs, you recorded an earn out of a couple of million. Which acquisition is that tied to? And does that mean that the acquired units have performed the organic unit, so to speak? Yes. There are notes unrelated to the following sales, Pavel, I think, clearly online and Playa Games. And just the earnout amounts that we record on the books are based on our best estimate of the financial performance of the studios in the times to come. I don't know if that answers your question. No, that's fine. Could you say what the level of organic growth is and maybe split it even further with FX as well, if possible? We don't present and separate organic and nonorganic growth for the simple reason that we very easily come into reporting each product. And that is what we try to avoid because that will be a very hard to grasp format, I think, with steadily increasing number of products. Having said that, we can what we can say is that we are in the 20s again in organic growth and have been so for all the 5 quarters that we have now since the merger with Glukem Studios. So we're continuing with a much higher organic growth rate compared to our financial targets of which is 10%. So I'm very pleased to see that we, on the rolling 12 months then, can have a 20% plus organic growth, which is more than double than our target. And we are steadily going up in EBIT, which is the other financial target of 30%, but we are at 28%. So I think that we are quite close to reaching our long term financial targets. Super. And what about foreign exchange? Do you have any number for us on that one, how much that contributes to growth? No, we have not. And one of the reasons is that it's a very complex thing because it's not as easy as looking at the each of the subsidiary and their currency in relation to the second currency or currency level because what really matters is how our end users, how they are distributed. We collect revenues from 250 countries every single month. And all those currencies that they represent is obviously moving in a quite interesting pattern. So it's a quite massive piece of information to try to describe that in a good way. Having said that, we can also say or repeat what we have said previously is that on EBIT level, because we have costs also in mainly in euros, in fact, but also in U. S. Dollars. So on a high level, we our message is that we don't have on the EBIT large FX effect. Then of course, on top line, it could be effects that are moving according to that complex pattern I mentioned. Okay. And on the user acquisition costs, so the level comes down in relation to sales, also grows year over year below what you perform in terms of sales. So I'm just wondering if the development here at all kind of looks like as it's going to be less costly for you, so to speak, to acquire users. I mean, has anything happened with more traffic prices in the market? And if yes, why is that the case? I think that it fluctuates naturally from 1 quarter to another quarter. So we have been between just over like in Q4, it was 21%. Now it's 26%. And we have been in those ranges, I think, more or less every quarter, and I think that's representative. The key question is, however, what kind of growth did we achieve with that spending? And because obviously, if we recoup the spending in 90 days like we did in this quarter less than 90 days, and we are always targeting to have net money back shorter than 180 days, and we are well within that target. Then, of course, higher spending is suffering margins for that single quarter, but it's building top line for years to come and we get in users that are very loyal. So it's you have to put the growth in relation to how much you spend, of course. But we think we are quite EBIT oriented as communicated many times. And I think that it's a good balance to grow more than double than our target. We are very close anyway to reach the financial target of 30% EBIT margin. And that could only be the case if we are very good at standing marketing or conduct marketing and return that stand in a very short time. Super. And on the margin, how much does in pier online and shakes and fridges contribute to the margin improvement? Is there any way to quantify that? So it is quite a big increase year over year. Again, we choose not to communicate individual products for the reason that then we have 31 columns in your Excel sheet, Berndag. I don't think you would like that. But anyway, so that's why we don't go out with that specific number. But in Q4, it was a part of the communication because it was the when we made the PPA and it was the Q1 in. So what you can see then is that they have and also the history we presented as we made the acquisition, and they have been solidly performing on approximately 50% EBIT margin for quite some time. So we think that there is no reason to expect that we would not be able to be on that levels now and going forward. Super. And then to what extent can one expect recurring sales? It's not like for a traditional PC gaming company where you buy a license and then you need to monetize it further by bigger updates. The other question is really what is the revenue retention and the degree of recurring revenue, for example, from Q4 into Q1? Are you able to see that and mention anything on that? We are an extremely data driven company. So we have more than 0.5 a €1,000,000,000 registered users through the years of these products. So the amount of data we have and also to use that data to understand how the pattern and how our user behaves, that is one of the key assets and the key capabilities of Steel Front in general. But we don't present all that data. Again, it will be a massive piece of work for you to compile that. But we so we have a very good view on how much is recurring revenue in the sense that how much comes from the existing users. But it's we don't present that per product or per the total either because it's a quite complex piece of communication because some users play for 3, 4 months and then they don't play for a couple of months and they come back and play for 6 months again. So what is down the recurrent revenue? So it's you have to be very diligent about the definition. But I must say that we what is one of the absolute key strength of Siltron and the portfolio we have, is the loyal user base we have. So it will always be the majority of our users also were paying users last quarter. All right. And finally, if you can maybe just give some flavor on the performance of new launches, Stray of Nations, Color of War. And then are you happy with the performance there? Yes. The new launches, it's not Call of War, it's Strike of Nations and Stage World War III. We are pleased and we think it's they're performing well and according to our plans and we have high expectations. But as you can explicitly see, Strike of Nations did not reach over 17,000,000. It's not one of the 3 largest during this quarter, but one should also remember that it was launched during January. So it hasn't a full quarter yet in the book, so to speak. But we are they are contributing significantly. As our products usually are long life cycle products, we are expecting that to recognize in particular, but also Siege World War III will be part of our core portfolio for quite some time. So we are very happy with those launches. Super. Many thanks. Thank you. Thank you. And our next question comes from line of Oskar Eriksen from Carnegie. Please go ahead. Your line is now open. Thank you. Good morning, guys. A couple of questions from me. First of all, a big pharma question. See quite a nice trend and also how you use acquisition spending now 2 quarters in a row. Are you seeing an improved metrics in general for big pharm? And also, does this have anything to do with the HTML5 transition? Thank you. Hi, Oscar. Yes, it's well spotted. It has definitely, we see effects from the fact that we are increasing the updates and the updates the feature updates in our product and that those products sorry, those updates are appreciated amongst the users. We are also pleased that we can increase the number of paying users during the quarter. Then, of course, as we have conducted, as you pointed out, the high user acquisition, we only do that when we see that we get the money back in, again, net 180 days. But then, of course, the average spending, mechanically, so speak, becomes low for the single quarter. But all in all, we are very happy with the development of Big Pharma and Harvest, and we are optimistic about that it will continue both in increased monetization and engagement level, which is, of course, what builds loyalty over time. Great. Thank you. And on a similar note, do you expect something in line with that for Empire, which also has now a transition into Asia.5? Or is that do you see that more as a mature game that should be on these very low, let's say, use user acquisition levels? And also, an add on question there. Have you released more confidence already in Q1 now that your more resources would have come now gradually during the year? We have, during Q1, increased the pace of the feature updates in Empire. And we definitely see that it's a product that there is no reason why it couldn't continue to grow, just as it has done now for 2 quarters in a row. So we think it's a solid product with a very loyal user base. The question whether we should spend 10%, 12% or 15% or something else in marketing is completely data driven. And there is no reason at all to say that it's not possible to market. So of course, we are we don't treat Empire in a different way compared to other products. It's just data driven how much user acquisition we spend on each product. But you are it's an important of course, an important thing that we can conclude that a loyal user base really appreciates the new content that we had offered. Otherwise, we will not be able to get up the average spending to over SEK 800 in the quarter. Great. And my next question is for Sten, I think. A question on other operating costs. If we exclude user acquisition costs, as you noted, infestation was very high compared to Q4, driven partly by higher mobile share of revenues. But I'm a bit surprised by how high it was. I mean, there's a positive IFRS 16 effect. And also, your gross margins seem to be on a similar level to Q4. You could elaborate on that a little bit, please. Well, as you recall, we had a recalculation of operating mix expenses in Q4, so that might skew the picture a little bit. Otherwise, the operating expenses, they do include also the platform piece and royalties. So that is pretty much the level of expenses we have. There's no I mean, as you can see, the increase in UAC is considerable. Yes. Okay. And also to your financial targets, thinking about marketing levels, your succession costs, you have a target of 30% EBIT margins. What do you see this year? Do you expect to go for 30% this year? I know it's a long term target, but given the high margin acquisitions and the margins who stayed now in Q4 and also partly in Q1, do you think that's reasonable to reach in 2019? I think there's 2 parts of answering that question. I think that it clearly shows that we are I mean, now we have in 4 quarters in a row increased the rolling 12 months EBIT up to 28%, which is not far from 30%. So yes, it's reachable, definitely. Again, we reached we have 28% growth in 12 months EBIT combined with the growth rate, which is more than double than our financial target. So we could if that would be the top priority number 1 is to prove that we can combine 10% growth with 30% EBIT, which is our financial target that could easily and very could have been reached easily in Q1. That you could that math is easy to do. The other part of answering that question is, do we prioritize that? And we don't prioritize that prior to a higher growth, which is obviously what we have done also all these quarters, the last 5%, 4% since the merger where we have this higher growth. So we do prioritize that with a bit lower EBIT margin, and I expect that we will continue that path during '19. And then it comes down to how much marketing can be conducted with the EBIT oriented return on marketing spend requirements that we have. And that is, again, that we should reach over all products, all regions, all time periods, not every single, but all of them as a whole. We should reach net money back in 180 days. And we are far stronger than that in Q1. So that is the other part of answering that question. But if the Board would say to me, the team here and say and then everyone to fulfill that the combination of 10 percent growth and 10% EBIT, we would have done that in Q1 and I think also last year as well. But that is second priority compared to reaching a higher growth at this point. Got it. Very clear. Thank you. May I have a few more questions, but I'll leave it for now. Thank you. Our next question comes from the line of Lars Ulla Hellstrom from Perrigo Securities. Really strong growth. I will also focus on the user acquisition. Fantastic results. And if we start with Steel Front Core, do you see that you have the same opportunities in Q2 as you had in Q1? Or will we go in more to a refinement phase for the 2 new products that you launched in the beginning of the year? We don't give forecast, you know that. But and we are data driven, so I can just be completely transparent. We don't guess. We look at the numbers and see how much we can adjust and up or down our marketing as we go along. And as I mentioned and elaborated on previously, that is one of our core strengths in the group and the way that we operate with the decentralization that we are very good at capturing the data and immediately act upon that. So it depends on the data, I would say, very much. There are some structural components usually or sometimes, I should say. The weather is very good. We remember that from last year already from June throughout in Europe, which had some effect on us. So seasonality could change that pattern, but it mustn't and it hasn't. If we look back most of the Q2s, but that is one factor to put into. If your question is, do we go are we expecting a refinement sales for the new products already after a few months. That is usually not the case. Usually, the refinement sales is later than after the 4 months. It's usually after 6 months or 9 months or something like that. So we are not I don't expect that we will see a retirement phase as such. But then of course, marketing has to be profitable. But I don't expect that. But have ROIs on user acquisition costs been as high in April as it was in Q1 within Siltron Core? That we cannot answer. We are reporting Q1 here, not Q2. And on Goodgame, so Oskar touched up on that. Would it be fair to assume that on user acquisition cost that similar trends will remain as it's mature games now? So if you're not releasing new products, similar user acquisition costs will remain? In which area then? Goodgame. Goodgame are 2 different product areas and they also have some other products. So we don't view it for studio. We view how we should allocate marketing spend over the 29 online products and new products as well, of course. So I cannot really answer whether we should see the same pattern at World Games Studios. World Games Studios are actually conducting most of the marketing in the group since they are performing the marketing for neither heart nor strike of nations. So if you mean by that good game, I don't know. But if you mean the product area of Empire and Big Farm, again, it's data driven. And like I touched upon previously, for the existing Empire products, of course, it's less likely that they will have the same spending as we have seen in core products because core products are basically higher and have been higher for quite some time in return on marketing spend, and then we allocate the capital there and the knowledge and experience from the Goodyear marketing team. But then I also would like to emphasize that we have good growth both in Empire with low spending, but also with higher spending in big pharmobile harvest. So we are actually growing all 4 areas. So that's not the yes, so it's more elaborating on that answer rather than giving a shortfall. Yes. You're saying always that data is the one that decides. But given that you had so extremely high ROI in the Steel Front Core, Have you been holding back on the U. S. C. For the big Empire Brands on a relatively basis, even though they might have achieved the 180 days payback since you it was even, even better within Steel Front Core? So you're so to say you allocated the money to Steel Front Core instead? Yes. You can say that. Then it's much more complex than that since we have we're running hundreds of campaigns in parallel. So in general, that is correct. So obviously, we can spend, I mean, SEK 17,000,000, SEK 18,000,000 in the SEK 15,000,000 and SEK 20,000,000 of Empires, for instance, with 3%, 4%, 5% return on marketing measured over 180 days. But if we have a couple of 100 percent in core, it's, of course, there we should allocate the vast amount of marketing, but also very good return on Big Farm Mobile Harvest. So that's the way we reason about that. And for the full year on user acquisition cost, do you think it would be fair to assume it would be in the range, let's say, 21% to 26 percent, so slightly below 25% for the full year? Again Very data dependent, yes. If data dependent is good, you're learning fast, most of that, we appreciate that. So I mean, yes, so it's impossible to answer that question. But in general, I think that the years that we have been delivering and presenting results, you can see that the levels are moving between 20% up to 27%, I think, where it's our peak or something like that. So but the good news for every shareholder and in Telefonica is that we spend with recouping the money within 180 days. But it does shift over time. Yes. And I think that's happened is there is no reason to think that we should completely deviate from that pattern, that I should add. Perfect. On game releases, you have released 2 new games. How many games can we expect to be launched in 2019? This year, we don't communicate a number that we should expect. And the reason is we did that, I think you recall, a couple of years ago, 2 years ago. And the reason is that we don't want to do that because one thing that becomes more and more clear that, that is one of our strengths again is that we should really adopt where we put our development resources between existing ones and new ones. And I think that we have improved our capability of being really fast in replanning our products in our product pipeline in a way that we were not able to do, well, 1.5, 2 years ago. And that means that we, as mentioned earlier, we do plan and move resources between future updates on existing products versus releasing new products. And it goes both ways. And it's, again, ROI focus. So for instance, more clearly, we measure return on investment on new feature sets or new larger updates, so we can see whether it pays off or not. And if we get good traction, we increase investment product wise. And then, of course, that could take resources from new products. So I think it's a string that we should allow us to leverage from. And if we will communicate that we shall, whatever happens, release 10 new products or whatever number, that flexibility would be will suffer from that. One product that has been saying coming soon ever since you bought player games is Clash of Empires. Will that product be released in 2019? Or is it also dependent? Ever since. You mean FlyEye that we acquired in November. Yes, yes. So you live fast, if that's a long time ago. So anyway, we expect that, that product will reach the market quite soon. But again, if it's better that we update the Shakes and Sigit with new features that we sell money for the shareholders quicker than we expect to do on finalizing cash flow empires, we do that. But having said that once more, we expect that, that product will be out this year. Okay. And a question for Stian here before I back down. On the earn out, SEK 129,000,000 expected to be paid in 2019. Historically, there has been a fifty-fifty split between shares and cash. Now you're right in the report that above 70% will be in cash and the remaining part in shares. Has there been any renegotiation of the earn outs how to be settled? And what earn outs does the SEK 129,000,000 relate to? €129,000,000 relates to Brazil, Imperia and the Flare Games And the Republic, sorry, too many studios, too many acquisitions. And yes, you're right. Normally, we have a fifty-fifty split that we see versus shares. In this case, particularly in 2019, there is one exception. Okay, perfect. Thank you, ladies and gentlemen. And it looks like there are no more questions registered at this time. So I'll hand the call back to you, speakers, for your closing comments. Yes. Thank you very much for all you calling in and asking relevant questions. And we are very pleased with this quarter, and we are looking forward to an exciting 2019 for Stifel Group. So I hope to present to you again in 1 quarter's time. Thank you all. This now concludes our conference call. Thank you all for attending. You may now