Embracer Group AB (publ) (EMBJ) Earnings Call Transcript & Summary

Hello, and welcome to Embracer's Annual General Meeting 2025 here in Karlstad Värmland. My name is Erik Larsson. I'm an equity research analyst at SEB, and I'm very happy to be back here again this year as moderator for the event. As for the agenda, I will hand the word over to Kicki Wallje-Lund, Chair of the Board here in just a second, which will be followed by some presentations and market updates. Finally, we will have a Q&A session before wrapping up the AGM. So if you're listening in online and you have questions, you can post them already now on the streaming page. With that said, I leave the floor over to you, Kicki.

Thank you, Erik. Well, dear shareholders, it's a pleasure to welcome you all to this year's Annual General Meeting in Embracer Group AB. And it is, of course, a special pleasure to be here in Karlstad. Again, it's actually the seventh year in a row now that we are meeting at this location, a tradition, we are very proud of, of course. It's great to see so many of you here today. Also, everyone attending via online. This past financial year has been transformational for Embracer Group. We made hard strategic decisions that are now starting to reshape the future of the company. At the start of the financial year, I'm sure you all remember, it was back in April 2024, we announced our plan to transform the group, splitting it into three distinct stand-alone listed companies. We firmly believe that giving each business the independence to act, to grow and be judged on its own achievements, unlocks a much stronger equity story for investors and shareholders, but also enables management to remain focused on execution, ultimately building more resilient companies. Since then, I'm proud to say we have made real and important progress. We have delivered on our plan. We have successfully completed the Asmodee spin-off. We have -- our balance sheet is stronger than ever. Net debt is gone, and we have been improving cash flow through disciplined capital allocation. We have sharpened our focus on our core areas where the great -- with the great long-term potential. With the ambition giving you, our shareholders a much clearer view of each business. And investors can now see Asmodee for example, for what it is, a global leader in the table top industry with its own performance, unique position and future potential. And later this year, we will, of course, see the same with -- the same will be true for Coffee Stain group as is built on very strong IPs, engaged communities and innovative talent with proven record of growth. But beyond structure and finance, this year, we made it a priority to rebuild confidence with you, our shareholders and the broader stakeholder community. We know that trust takes time. In the past year, we have taken several steps forward through strong execution, but the last quarter reminded us of the challenges ahead. Our commitment is clear. It is to restore confidence, prove our credibility and deliver results by focusing on areas where we hold our core strength. And at the same time, we recognize both our challenges and our opportunities to improve. That is why our priority is simple, to concentrate on the areas where we hold real lasting advantages. That means we are investing more in our core assets, the parts of the business that constantly deliver value, while we are stepping back from activities that do not support sustainable growth. And by reallocating resources from underperforming areas, we are strengthening those that deliver stronger lasting returns. And our priority is clear to build a stronger and a more profitable company by focusing on our lasting advantages. At the same time, we are also improving our processes to boost predictability, reliability and quality. And together, these actions lay the foundation for sustainable growth and long-term returns. As you have heard many times before, from 2011 to 2021, our industry enjoyed a decade of extraordinary growth. But today, the sector faces a new reality or more normalized growth, I would say, bringing challenges we must confront head-on like development costs are still far too high. New IP struggle to break through the noise and competition has intensified significantly. But that said, gaming has a bright future. In fact, gaming is stronger than ever, growing and reaching billions worldwide. And with $184 billion in sales last year, it is the largest entertainment industry by far. And for those that are ready to innovate the opportunities are without limit. And nowhere is the more -- is this more evident than in gaming. And speaking of opportunities without limits. We are already seeing them taking place in real time. There is a new wave of innovation and not sure if it is driven by AI. AI will certainly play a role in shaping the future of gaming. On its own, the impact may be limited at first, but when combined with tools and technologies, it has the potential to change or even transform the way games are created, priced and experienced. And the world around us is moving fast. Companies that are bold and thoughtful in adapting new technologies will shape the next era of our industry. And of course, it goes without saying, our responsibility is clear. We should be among them. And as we embrace these opportunities we will do so responsibly making sure our use of AI is both ethical and compliant. Over the past year, the Board has worked closely with the leadership team, not only on what matters today, but also about shaping tomorrow. How we unlock the company's full potential and deliver games that live up to forecasts and exceed expectations. In doing so, we are building a company that is not only more profitable, but also better prepared for the future. So to wrap up, this has been a decisive year, a transformational year. We have made bold moves and significantly strengthened our financial position. But there is still more to do, and we will take continued discipline -- that will take continued discipline and focus. As we open today's meeting, I'm optimistic, not because our challenges are behind us, but because we have taken the hard steps needed to face them head on. We are a different company today than we were just a year ago. We're leaner, sharper, more focused and above all, much better prepared to build long-term value in a disciplined and sustainable way. So on behalf of the Board, I want to say to our leadership team, thank you. And in that context, I would, of course, like to turn to Lars, who has stepped down as our CEO after 9 years. To thank Lars for his leadership, which I also will come back to later. And to all our employees, you are absolutely the heart of this company. And finally, to you, our shareholders, thank you for the patience in standing with us on this journey. Your support gives us the confidence to move forward. And together, we are building a company that will grow stronger for years to come. And with that, I formally open today's Annual General Meeting of Embracer and invite us to proceed with today's agenda. Thank you. Sorry. Okay. The Board of Directors propose that the meeting is to be held in English for all participants here today and those that are attending via the webcast. Can be, therefore, agreed to hold the meeting in English. Good. Thank you. We will also hold a public Q&A session during the presentation of the business activities later, and that will only be opened during the presentation of the business. And the next item on the agenda is actually to appoint who will act as the chair at today's Annual General Meeting. And the Nomination Committee has proposed that I'm elected as Chair of the meeting. Are there any other proposals? No. Can we elect me?

Yes.

Thank you. There are several unregistered shareholders and guests at the premises here and also participating in remotely. Can we invite them to attend the meeting? Good. I would also like to point out that in addition to companies representatives and the auditor, only shareholders who are here in person, by proxy or cast their vote in advance and are entering into the share register as of the record date, their representatives and assistant who have registered for the meeting had the right to speak, vote and give proposals at the meeting. Long [indiscernible], Ian, thank you. During the Q&A, we will allow everyone present at the meeting to be able to ask questions. Can we agree on that? Good. Thank you. Now I have -- I will ask Ian actually to -- that you know very well from all the previous years to keep the minutes from this meeting. I also would like to inform you about two representatives from the Board is here today. And we have actually Jacob Jonmyren here. We have Cecilia Qvist, we have Lars Wingefors, Yasmina Brihi and the Bernt Ingman and Brian Ward. And we also have Phil Rogers here, that's our new CEO, is present and of course, Müge, our CFO. And the company's auditor from PwC is also present through our main responsible auditor, Magnus Svensson Henryson, as you will meet later. And from the Nomination Committee, we have the Chair, Per Fredriksson. He's present here today and also with Anna Henricsson, representing Handelsbanken and the Nomination Committee. Now we have come to #3 on the agenda, and that is preparation and approval of the voting list, that I will now hand over to you, Ian.

Thank you, Kicki. Today at the meeting, we have ticked off everyone that has notified the company about the participation at the meeting, either to be here in person or casting their votes in advance. So to summarize it up, the voting list sums up to 136,875,688 shares that are present here today. And we have a corresponding number of votes of 215,265,994 votes. That corresponds to 60.83% of the capital in the company and 70.32% of the votes in the company.

Good, thank you. Can we approve the prepared voting list? Thank you. We have now come to Item #4 on the agenda, and that is -- that we will appoint 1 or 2 persons to verify the minutes. Do we have any suggestions? Well, then I propose that [ Karl Granat], there you are representing the shareholder Alecta. Can we agree on that we only have one person to verify the minutes? Okay. Then I would like to ask you, Karl, if you are willing to accept to certify the minutes and also if you will be available later to sign. Good. Can we approve to just have one person to certify the minutes. Yes, good. And can we then resolve to appoint Karl together with me to certify today's minutes in accordance with the proposal.

Yes.

Good. Thank you very much. Now we have #5 on the agenda, and that is the question whether the meeting has been duly convened. So again, I would like to ask you, Ian, to describe how it's been done.

Thank you. We'll do. So noticed an Annual General Meeting in Embracer must be done no earlier than 6 weeks before the meeting and no later than 4 weeks before the meeting. Notice must be made in the Swedish Official Gazette. And in an ad in Svenska Dagbladet must be published at the same time. And at the same time, the notice must be published on the company's website. All of this or parts of it, the notice was published on the website on the 18th of August and in the Swedish Official Gazette on the 21st of August and ad in Svenska Dagbladet was also published in that newspaper on the 21st of August. Therefore, the prequisites for duly convened meeting are at hand.

Good. Thank you very much. Does the meeting consider then that the meeting has been duly convened.

Yes.

Good. Thank you. Now we are at the item #6 on the agenda, with approval of the same. Proposal for the agenda have been announced in the notice and distributed to participants at the meeting here today. Can we resolve to determine the proposed agenda. Good. I find that the agenda has been approved. We will now hold a presentation of the operations within the group. So I would like to ask Phil and Müge to take the stage and start the presentation.

Great. Thank you, Kicki. It is great to be here. It's both an honor and a deep responsibility to lead Embracer seem to be fellowship entertainment into our next chapter. I'm excited to be here, especially it's my 49th day as the Group CEO. And today, I will spend more time talking about the future. But of course, First, we should cover the past year. Now I'm going to make a quick review of events before handing over to Müge for an in-depth view of our financial performance. So for the full year, we reached sales -- net sales of SEK 22 billion, adjusted EBIT of SEK 3.3 billion and a free cash flow of SEK 1.4 billion. Our actions to reduce OpEx and CapEx help to significantly improve cash flow generation year-over-year. As you've already heard through Kicki's opening remarks, we've also made significant progress in transforming the group. The divestment of Easybrain, the spin-off of Asmodee have been successfully completed, improving our financial position and sharpening our focus. We remain dedicated to further optimizing and building a more resilient business as we now approach the next spin-off of Coffee Stain later this year. Now as you would have seen through our annual report, sustainability is and will remain a key responsibility. Our long-term achievements rely on many responsible practices and creating value for many business ethics, our workforce and our player community are prioritized focus areas, each receiving dedicated resource and attention. Again, as you will have seen in the annual report, over the past year, we have, among many things, succeeded in reducing Scope 1 and 2 emissions by 19%. And looking internally, despite changes, we've improved our employee engagement and satisfaction year-over-year. Now these achievements demonstrate to me, I believe our ability to adapt and drive positive change, laying a strong foundation for sustainable growth as we navigate the next chapter and next phase of our journey. And with that, I'll hand over to Müge.

Thanks, Phil. Good afternoon, everyone. It's a pleasure to be here. Let's have a look at the financial performance. All figures exclude Asmodee but are impacted by diverse divestments that took place in the reported period. So net sales of SEK 22.4 billion were minus 18% year-on-year. During this transformative period on an organic basis, net sales were minus 9%, with PC console, 13% down, in Entertainment Services, 7% down. Mobile was largely stable. In PC console, Kingdom Come: Deliverance II was the biggest release of the year while last year, we had the releases of Dead Island 2 and Remnant 2. The adjusted EBIT margin was 3 points lower than last year on a reported basis. and 6 points lower on a like-for-like, excluding the effects of divestments. EBIT margin was impacted by a larger proportion of physical distribution revenues in entertainment services. Investment in user acquisition cost in mobile and less revenues from new releases in PC console. We continue to focus strongly on cost control and cash generation that I will talk later. Let's move on to balance sheet. The transformation with spin-off and divestments resulted in a significantly stronger balance sheet. Looking at the operational balance sheet on the left side, you can see we have total assets of SEK 8.8 billion. They primarily relate to the investment of our games pipeline, which totaled SEK 7.9 billion. All of this SEK 6.1 billion represents cash invested in ongoing game development projects, which when those games are released, are expected to drive future cash flow and profits. The remaining assets relate to net tangible assets and lease liabilities as well as other intangibles. Looking at the financial balance sheet on the right side, the largest part related to the goodwill and IP arising from past acquisitions. The spin-off of Asmodee and proceeds from the divestment of Easybrain, Saber, Gearbox, facilitated significant debt reduction, resulting in a net cash position of SEK 5.4 billion at year-end. And as we've announced today and pending the authorization from this meeting, we plan to return a portion of this cash to shareholders via a share buyback program up to SEK 500 million for a period running from tomorrow until December 2. The provisions, additional considerations and deferred tax related primarily to acquisitions related provisions for conditional amounts to be settled in cash or shares dependent on the criteria being met. Moving on to cash flow. As mentioned, we have already taken significant steps in the transformation of the group. One of the most tangible progress made to date is the cash generation. We generated SEK 1.4 billion of free cash flow after working capital in '24, '25 compared to an outflow of SEK 800 million in '23, '24. The net proceeds from divestments of SEK 16.6 billion, a lot for a paydown of external debt, which resulted in the SEK 12.7 billion outflow related to financing activities that we see here. And as a result, we moved from a net debt position of SEK 16.4 billion at March '24 to a net cash position of SEK 5.4 billion at the end of March '25. This slide further illustrates the significant transformation we have undertaken in recent years. As you can see, compared to two years ago, we have a leaner, more focused organization. The head count almost halved since '22 '23, and we have fewer studios working on a more streamlined pipeline of projects. We have made progress. And despite the progress we have made there is more to do. After successfully executed the spin-off of Asmodee back in February, we are working towards the final step in our transformation to three independent listed companies with the spin-off of Coffee Stain Group and the establishment of fellowship entertainment. The spin-off process is progressing well and is on track for a listing before the end of 2025. In addition, we are shaping the future of fellowship entertainment, Phil will provide more details on our future priorities in a couple of minutes in this regard. But before handing back to Phil, I'll take a moment for the Coffee Stain Group. As I mentioned, we are on track with the listing process. And you may have seen recently that we now have a strong board in place, complementing the experienced executive management led by Co-Founder Anton of Coffee Stain. Coffee Stain Group has a proven track record of creating long-lasting game experiences that grow over time, by small passionate teams and driving communities. You can see some of these wonderful IPs listed here alongside the studios and publishers, all of whom are based in Scandinavia. With long-term opportunities in growing existing franchises in introducing new IPs and partnering with the best independent like-minded talents, we believe that they have a bright feature as an independent listed company. And Anton and his team will provide more insight. They will have the opportunity to give more details during the Capital Markets event that will be held before the spin-off. Further details will be provided. With that said, I'll hand back now to you, Phil.

Thanks, Müge. So now we begin to look forward a little bit. And I have to say that working in an industry with so many possibilities is an exciting place to be as we thread the needle between art and science between creativity and data. And with that, it's a great pleasure to welcome Chris Stanton-Jones from Catapult back again to our AGM. Chris has been a long-standing insights leader in the video games market and returns today to provide a market overview for our meeting. So with that, welcome, Chris.

Thank you, Phil. Thank you. I certainly hope that I can help with some data -- some market data as well as looking forward. Good afternoon everyone. Two main things to look at today. Firstly, the games market, its size and performance both now and in the near-term future and secondly, some key market trends that are shaping the industry. So let's dive straight into the first slide. Okay. The graph here shows global games content measured in billions of dollars, both pass values and the future predictions. Two things that really stand out here. Firstly, there is growth. This is good news. The market trend line shows low, but steady growth, very consistent each year, too, with the one exception of the pandemic bump. And this growth is set to continue 2% plus 3% year-on-year, expected this year and over the longer term, a plus 5% CAGR across the 9 years in the chart. And secondly, the market numbers are high, really high. In fact, it's set to be the record ever high for the industry in 2025, even overtaking the COVID peak here in 2021. So this is a really big news indeed. And what are the influencing factors? Well, firstly, it's a very buoyant console market. Switch 2 is one of the most successful console launches ever. It's also expected to have broader appeal than previous additions, and this is evidenced by the many more third-party games available than previously. PS5 is in its peak software years. Its active user base is at its highest. And we can see that software sales are growing year-on-year, too. but there's more to come. There's still a really large number of PS4 and Xbox One users that are still to upgrade to newer consoles. How do we know this? Well, we can see this in the fact that there's high volume of old gen games still being purchased. So GTA VI, this will be a massive event for the games industry next year, a massive event for the worldwide entertainment industry. In fact, not just for the publisher, but it's going to help push the whole market along, and significantly, and this is quite important, it's not available on previous gen consoles. So it will really accelerate the console upgrading process. That we just mentioned. Why is that good news? Well, the good news is the fact that new gen console users spend more per person according to data from Sony. So what about the economic backdrop? Well, it's still very difficult trading conditions. As everyone knows, on the publisher side, there's higher cost development, mostly interest rates, inflation. On the consumer side, we see a spending squeeze. But the games market has traditionally been more resilient to this, but it is likely that the squeeze will affect some sectors and demographics more than others. Older core users seem to be more resilient, but evidence from the U.S. recently suggest that it possibly is having an impact with the younger age groups. Industry restructuring continues, but evidence from reported news suggests that the worst could be over. Why is that? Well, the data that we see suggests that this year, both the number of layoffs and the number of companies laying off staff is well below last year's levels. Okay. So next slide. So we've seen that the games market value is high, but how is that in perspective to other entertainment sectors. Well, I think he gave you a little bit of a clue before it turns out very good because games is the single largest entertainment sector. This has to be repeated. It's hard to believe, isn't it? It's larger even than the TV sector and over 6x that of the Box Office market. It's -- you could say that it's now truly mainstream. 3.6 billion players globally. It's growing as well, 4% growth this year keeps growing. In fact, it's now almost 2/3 of the world's online population, and this is a big number indeed. It's fairly balanced too between the genders, between male and female users. It's only slightly favoring males. So everyone plays pretty much. So the drawback is it's a natural big growing mainstream market. It's going to bring in many companies, many new games. So as a result, I think Kicki mentioned this, there is hyper competition for both spend and playtime, not only between games themselves, but also with other entertainment and social media. In terms of competition between games, just as an example, there were over 19,000 new games on Steam on PC last year. So discovery is obviously a key challenge for developers. In terms of competition between time, well study show that the average hours spent on other entertainment and other Social media is growing quickly to year-on-year, particularly with the younger age groups. So games have to work really hard to stand out. So with this competition, we're in a low-growth area with rising costs. It's not surprising that derisking as the industry term is now an industry trend. And there are different things that we see here. First of all, there's an increase in number of remasters and remakes. But these titles are also some of the biggest games right now. I mean they're driven by consumer demand. Nostalgia is hugely popular. Many of these IPs are timeless. In fact, we see this in the movie industry as well, the same thing happening. But this helps the publisher because these titles are more cost effective to make both make and market, okay? So with this focus on cost, there's an increase in AI usage to drive both cost and time efficiency. But the positive here is it's really helping to provide more developers' time for creativity, and that's crucial. Now there is a publisher trend away from live service models. These are really high risk as it's proving very hard to tear players away from their favorite games. They're very loyal. But coincidentally, on the demand side, there's also a big growing popularity and share of single-player games. So we're seeing more development focus and more consumer shift here from multiplayer games, multiplayer live service games to single-player games. Okay. Just the last chart here. Let's have a quick dive into three -- the share of the three different game sectors. We see that mobile on the left there, makes up over half of the global games market. It's growing steadily 3% this year, really because of a fast-growing user base, especially in China and Japan. The PC and console market makes up the other half on the right. The largest portion coming from the West, i.e., North America and Europe. PC, very steady market growth, very consistent over the years, plus 3% this year. It's really benefited from many new users coming in post-COVID represents great value for money and availability of promotions, and these promotions run all year around. And this is, of course, is very relevant in a spending squeeze. Plus it's also helped by the fact that many console games, most console games in fact, are also available for PC users. But really, console is the start format. This is a strong market growth of 6% expected this year. In fact, it's the highest growth of the three sectors. This is largely thanks to Switch 2, which I mentioned previously. Higher games retail prices generally and also a good strong release late this year. So that's all for now. I hope this has helped provide a quick snapshot of the games market. I'll now hand you back to Phil.

Thank you, Chris. So now I want to share some thoughts on how we see things today, but as we sort of implied sort of as well as our challenges and the opportunities ahead. First of all, we have built a stronger foundation for our forward journey. We've transformed our balance sheet, and we have an incredible core of IPs and teams to build around. CapEx is down from an annualized run rate of close to SEK 8 billion two years ago to around SEK 3 billion of Q1 this year. We've gone from net debt of SEK 16 billion to net cash of SEK 5 billion through divestments, the spin-off of Asmodee and again, our lowered OpEx and CapEx. We've also made great progress on our greenlighting model, which is implemented widely with a dedicated cross studio team analyzing and supporting projects, helping us take smarter decisions. This has supported our CapEx reduction, and we're confident that it will be a key to unlocking better returns in the future as we build focus on our core IP. That said, we're aware of the challenges, and we have a clear plan ahead for the near, medium and long term. This year, we are focused on successfully listing Coffee Stain as well as executing on our FY '25/'26 pipeline and upside potential to our forecast. This includes taking action on underperforming businesses to free up capital to deploy with better returns elsewhere. It likely involves both divestments of nonstrategic assets as well as organic OpEx and CapEx reduction. Now these near-term actions to be executed this year will then lay more on the foundation for what's coming next. At the same time, we continue to systematically rewire and refocus fellowship entertainment to create one powerhouse unit for those years. Accelerating our efforts will allow us to maximize the potential of our medium-term pipeline, including the 9 AAA titles across the next two financial years. We believe this is going to help us achieve an inflection point in our earnings and cash flow profiles. Now about the rewiring and the refocus, this will include ever smarter, have a deeper collaboration, increased streamlining, setting up shared services and using AI as a power multiplier. Now that may sound like corporate speak, power multiplier. But I think it's important to note in this audience that these are the words that we're hearing from studios from studio heads and heads of production. And it's on AI that I'd now like to talk a little bit more about. In an industry defined right now by escalating development costs and limitless player expectations, the question is no longer if a company will adopt a technology like AI, but how it leads with it, how we take Embracer forward across fellowship. Our answer is a smart implementation of generative AI in ethical and sustainable ways. We really do view AI as a strategic catalyst. It's the most powerful technology or toll of our generation for driving efficiency, amplifying creativity and ultimately delivering the high-quality memorable games our players demand, more effectively, more predictably and more profitably, I believe, than before. Now our philosophy is simple and direct. Our teams own the creative and final product and AI as a force multiplier to empower our people to get there faster and enable more innovation. Now this isn't a theoretical future. It's happening now, and the results are quite compelling. Many of our studios have been experimenting with AI in the past couple of years and are now starting to really leverage it to eliminate bottlenecks and empower our development teams. We're beginning to see measurable increases in productivity. Some examples, if we think about AI animation, recent advancements from NVIDIA and Motorica are producing in-game results indistinguishable from traditional motion capture, combining great actors with human hand authoring and these animation tools reduces dependencies and production time for gameplay and cinematic animation. We're seeing a 7-day [ mocap ] shoot cut in half, engineering assistance, programmers leverage modern tools as real-time code assistance, analyzing output, helping fix and track down crushes or build errors, all of which optimizes engineering time to create versus repair time, again, accelerating development. Imagine nightly builds repaired before the team is even awake. On asset creation, if we think about 2D to 3D conversion, newest tools can take a concept [ LTS2 ] rendering into a game ready 3D model reducing time from days to hours, actually, if not minutes. Now of course, there is still the tuning that's required for the asset, tuning by human hand. But again, this empowers artists to focus on that 30% that makes the creative difference versus the 70% on getting the basic sculpt to create it. I think of it, it's like supercharging our teams giving them more time and power to add their unique authorship. Now on the design side, let's think about AI voice. Our narrative teams can now hear temporary voices in game in minutes, a process that used to take days. This allows for rapid iteration and better early-stage creative decisions. Now these are just examples. We could talk about AI production, data analysis in areas like QA. But the overall point is, these are important incremental changes. We've seen great acceleration turning days, weeks of preparation creation time into minutes, hours. It represents a fundamental shift in our operational efficiency. But really, we're on step 1. I think of it as becoming experts at using AI to empower our people, it's like electrical power tools, you might use at home, reducing repetitive tasks and that 70% lift to make room for step 2. And step 2 is innovation. Right now and our industry creators have never mattered more and we have great creators in our business. And by having people powered up, thanks to AI tools, creators get more time back to push boundaries to find the fun. Now we're keenly aware that this new world of opportunity comes with challenges. We see the headlines and we hear the concern from players and developers alike. But we believe the greatest risk is not in using AI, but using it without a strong ethical framework. Players aren't longing for generic solar site quests or synthetic AI voices. Developers want creative freedom to innovate and experiment and reduce the duration times so they can make more content. Artists, actors, writers need protection from plaguism. Intellectual properties need to be nurtured and respected. This is why our principal, our core principle is empower never replace. For us, ethics and good business are one and the same. They really do go hand-in-hand. And our position is clear. Human authorship is final. Our developers will always have the final creative control and authorship. After all, AI is a copilot. It is not the pilot. Transparency is mandatory. We're committed to being transparent with players about how, where we use AI in our debt process. And partnership is the goal. We will seek creator approved partnerships to secure the talent that brings our world to life. Now to enforce this, our company is implementing strict governance with controls, audit logs, workflow approvals for generative AI. This isn't just a policy. It's a promise to our creators and our players. Generative AI is not about cutting corners. It's about elevating our craft. To conclude by strategically integrating AI, we're not just building better games. We're building a more agile and more innovative and ultimately, a more valuable company. I believe a company where creativity is amplified, not automated. Securing our position as a leader in the next generation of entertainment. And that takes us really to the longer term. A truly IP-first company, centered around our best creators, studios and franchises in a structure enabling focus and operational discipline. This involves centering around our core IP and core studios, many of you see here and planning for the long term. It means building business around IP such as Lord of the Rings, Tomb Raider, Kingdom Come: Deliverance, Metro, Remnant and 1 or 2 handfuls of other core IPs. Now to achieve this fully will take time. But as I've said, we'll continue to lay the foundation this year and next. Just reflecting on this presentation today on Kicki's opening remarks too, we will work tirelessly for our current shareholders and prospective shareholders so you reach the same level of confidence in our strategy as we have. To achieve that, we know that delivering visible improvements and results will, in the end, be all that matters. This is a pivotal moment. We are going to sharpen our focus and execution, and we aim to lead with distinctive IP delivered with clarity and discipline and realize our full potential. And that brings us to the close of this part of the presentation, but I would like to take the chance to thank our teams all around the world for their diligence and commitment. It really is a wonderful team to now lead and thank you to Lars, and thank you for being in the room today, again in Sunny Karlstad and for everyone joining online. We will now transition to the Q&A. But first, here's a real awesome fun stuff we wanted to share. [Presentation]

All right. Let's get to the Q&A. I think I'll start with a few questions on my own. Then I'm going to ask the physical audience here if there's any questions, and I am pretty sure we have a microphone somewhere, and then we'll take the webcast's. But I thought I would start with you, Phil. Very interesting presentation here, especially on AI, but I had another question first actually. So from what I understand, you've had a very central role in forming what is to become Fellowship Entertainment. And we have seen some changes in terms of the composition of Coffee Stain and fellowship versus the first announcement. So I just wanted to hear what sort of feedback have you gotten from employees, partners, investors over the last few months?

Well, I think really positive feedback. I think the decision, the bold decision to work the group this way, really is about finding those true very focused equity story. So I think the refinement around Coffee Stain was perfectly well received from industry and shareholders and internally, too. And also, for Fellowship. When we look at many of the IPs that we're so excited about and the games that we can tell, they really do come from the parts now of the business that we're working with. So I think it was, yes, very -- felt a very natural and right adjustment there. So feedback has been positive. Now of course, with Fellowship, we know we've got a lot of good challenges ahead, but the fundamental thesis around building around these core IPs with the backdrop of those gaming market, we believe, is a very strong one.

Anything to add, Lars, Müge?

No. I think, obviously, the announced breakup in April last year was -- the intention was to create very focused companies and I think that's for sure with Asmodee and Coffee Stain. I think Fellowship now people could understand more, but I think there is a bit of homework and both in terms of communication and realigning the group, as Phil said on stage. So I'm actually very excited about the future.

Okay. Good. And then I had a question for you, Müge. It's been a very transformative journey, you could say, over the last few years here, not only one spin-off, but approaching the second here. So really, my question was, how do you manage this as an organization? And I must imagine there's quite a lot of resources that unlocks post this transition.

Yes, that's a great question. The fact that Embracer Group is a listed company for many, many years has brought a lot of processes, and we have streamlined part of the job. And the spin-off of Asmodee was a great testament in terms of collaboration between headquarters and operator group, but also the complementarity in terms of skill set, what Embracer brought to Asmodee while Asmodee could focus on the deliverables at that level. So we are very happy that, that existing process skill set is something we are able to replicate with Coffee Stain in the meantime as we shape Fellowship, which also needs some structuring. So it's something that we are proud of, I would say.

And Phil, you're not really new to the management team, but in your role. So I just wanted to hear how is the new collaboration here between CEO and CFO. How do you complement the challenges.

Well, no pressure on that question, but it's -- no, it's great. I mean it feels very organic. I mean we've been working together since 2023, 2022. So it felt very sort of hand in glove coming together and working forward. So it's a small and tight team.

With the [ Solar Air ]...

Yes.

From London, Paris to Karlstad.

Yes. Is this the Trilogy.

Yes. I'm pretty sure locals there enjoy the [ Solar ] as well. So I thought I'd ask the physical audience here if there's any questions. Raise your hand. I don't think I see any hands at least. Here we have one. Do we have a mic? Yes, we do.

It's David from EQ Asset Management. Question is on the Lord of the Rings IP. If we think 5 to 7 years into the future, could you elaborate a little bit on the vision when Fellowship has succeeded on it. What will it look like? What is the IP for this company?

Small question.

Look, I'm really probably the wrong person to be answering that in some respect, of course, I will, because I think it's a tremendous time frame and proposition of content that we 5 to 7 years from now we'll have for gamers, but consumers across all media, we've talked in the past about partnerships, how this IP, this beloved IP and how it plays through linear, through physical and physical gaming, tabletop gaming, and then we talk about the interactive. I think we have the ability to create worlds and stories, some told, some well-known, some not well known that should be capturing players all around the world and never releasing them in that sense, the grip that this IP has is it's one of the most valuable and amazing IPs in the world. I was listening to the Trump visit to England yesterday. Trump was talking about Middle-earth and talking. So it's incredible what this IP means and not just to gamers, but people all around the world. So I think when you look forward, our ability to create world, stories, characters, Quests -- it will be staggering. So I think it's a really fantastic time. And that's what we're very focused on delivering. And across our studios as well -- studios want to work with amazing intellectual property within Fellowship. And this is an IP that we just see limitless possibilities.

I didn't know Trump was in [indiscernible].

He is now. Maybe you'll read this.

All right. Any other question from the physical audience? I don't think so. We have quite a lot of questions on the webcast here, so I'll take a couple. First one to you, Lars. Are you still committed to fill your 25 years promise to Embracer and the gaming industry?

Well, 100%. I imagine I've now done 9 years of that 25, so 16 to go. So no, I'm super committed. I worked through a cycle of entering into other industries, and I love entrepreneurship in general and other things than gaming. But when you grew up with something, which is very close to my heart, reading books, playing board games, playing Nintendo and Commodore 64 when you were young, I can't imagine leave that industry. So -- and I'm happy to share it with all of you shareholders.

Good answer. We have another question here from Jacob Edler at Danske Bank. Happy to see you on the call here. Interesting news today regarding the buybacks of SEK 500 million. Could you provide some insight into your approach to long-term shareholder capital return. Is this buyback intended as a one-off? Or could it signal a more long-term approach of buybacks and/or dividends?

Yes. Should I start to give it a try.

Yes.

No. But I think in general, all excess capital should be returned to shareholders. That's the starting point. Now I believe -- I can talk a bit more freely now as a Board member. That's freedom you have not being the CEO. Obviously, I see a great value for shareholders to the best investment we can do with capital is to buy back our own share price or our own share, especially on these levels. So I think this morning's decision and communication if that is decided quite soon here, it's a no-brainer. Technically, it ends so we could do a spin out of 1:1, the same as Asmodee to all shareholders ahead of the listing. Then would we do a new program? Or would we return capital or value to shareholders post that, I think I'm very positive on that. Obviously, the Board need to make that decision and looking at our positions and alternatives post the first program. But hopefully -- and I'm sure it will bring a lot of value.

Okay. I'll try to squeeze in two more questions here before we're out of time. So we had a question on IPs here and discuss that. But how do you view leveraging IPs across more channels, thinking about Middle-earth with a Lord of the Rings and Crystal Dynamics with Tomb Raider, two good examples of companies with a very long experience of making a lot of partnerships. So could you use that, call it, knowledge, better elsewhere in the group, say, for a Kingdom Come Metro.

Yes, without a doubt. And this is one of the real advantages as we get this sort of tighter formation, and we talk about this IP powerhouse and the collaboration. And these -- when we walk and visit and talk and plan, these are the synergies, if you like, that we'll bring to bear, I think it puts us in a great position as a company. I think creatives enjoy that ability to see how other plans are curated and executed against. And some of the partnerships we can strike with the IPs that we are guardians of, right, that we work with the partnerships, can be vast. I mean, the scale of companies that we can partner with. So I think it's an exciting time.

Interesting that you mentioned collaboration and powerhouse, because before-hand my questions here, I had written down from Q1 that you used -- you described Fellowship using the words powerhouse units, collaboration, shared services. We saw it here at the presentation. I read it as more consolidation, and we've discussed that, but I wanted to double-click on one specific item. So what do you think about centralization within Publishing?

Yes. I mean let's firstly talk to the powerhouse. What we're not talking about there is one homogenous studio of multiple thousand people. We -- the textures, the personalities of the different studios are really important that we preserve. But on the other hand, in a world which is boundless in terms of possibilities are also complex in terms of the problems we've got to solve. We can't be solving the same problem in each and every location. There is that spirit to collaborate. It's not a top-down initiative. It's very much something that teams themselves want to win with, right? No team wants to -- they want to put themselves in the best position to win. So I think it really -- that collaboration feels organic, but of course, we want to do more with it now as we sharpen our focus. I think on the publishing side, for sure, I would perhaps use the word consolidation and how do we strengthen as we get our new release cadence, and we really get into that rhythm. Publishing to me is about finding and acquiring those gamers. The skills have changed 10 years ago, 20 years ago. They're very different today. So I think, again, how we combine our forces and strengths on that is a really exciting opportunity for us to bring to bear.

Okay. I have one final question before we're out of time. You have mentioned divestments still being on the table, identifying some noncore assets. So I just wanted to hear how those discussions are going. And especially now today where you're in a net cash position a few years ago, net debt. Is that a big difference?

Well, efficiency improvement is something that's been a part of our day-to-day business, I shall say. So continuous cost control, continuous cash optimization. So we do know that we are sitting on a net cash, yes, but we've also said we are identifying the balance sheet needs of Coffee Stain Group in connection with Fellowship Group. So those needs will show us also if there is an excess and then the decision to return to shareholders and all the optionalities in connection to that as part of efficiencies and so on, of course, divestments is an area that we're also exploring to ensure that we remain a group where there is relevance with the strategic traction with the financial targets and so on. So it's not left out.

Okay. We're out of time. I don't think I can take more of the time here. So thank you very much on to the next part of the AGM.

Great.

Thank you, Erik.

Thank you.

Thank you very much. We have then come to the item #8 on the agenda, presentation of accounting documents. The annual report for the financial year '24, '25 has been published on the company's website since the 19th of June and has also been available at the company's offices and available here today. So may I then ask our main responsible auditor. Magnus to present the auditor's report.

Thank you, Kicki. Dear shareholders. My name is Magnus Svensson Henryson, and I'm the auditor in charge representing PwC. Our audit was performed throughout the financial year, and we have had extensive communication with the directors and management on business operation and the financial reporting and the audited -- the audit that we have performed. We reported our work to the auditor Sustainability Committee and the full Board of Directors several times during the year. And our view is that the collaboration with the directors and with management has worked very well. Our audit has covered all the major entities in the group, and our global team consists of a central team based in Stockholm, supported by local teams in various territories. We also have included in our team, a group of experts on various topics, depending on what we -- what qualities and information we need. Our view is that Embracer has very robust processes for the financial reporting supported by a very strong finance team. We also believe that the business performance has been presented transparently in the financial reporting that we have audited. The audit report sets out areas that we believe are the most significant in our audit. And I think I should mention a few words on each of these. The first area is around revenue recognition. Embracer's diverse nature of business generate revenue streams that has very varied characteristics depending on the type of product or service being sold. We have tested that the reporting of revenues is consistent with Embracer's accounting principles. And we have evaluated systems and controls in place for monitoring the revenue recognition. And we have tested a lot of transaction as well, of course. We assessed that revenues are reported or have been reported correctly according to the accounting principle of Embracer and that those principles comply with IFRS. The second area is around goodwill and business acquisitions. Embracer has, throughout the years, acquired many businesses, and that has led to the recognition of goodwill and other intangible assets. These amounts to significant -- this represents significant amounts on the balance sheet. Goodwill assets have indefinite useful life and our held at cost without amortization. Instead, the carrying amounts are tested annually for impairment. We have tested those impairment tests as they include estimates of future cash flows and other inputs that are inherently subjective. We have also tested the calculations themselves. Our view is that the goodwill and other intangible assets on the balance sheet have been measured correctly in accordance with the accounting principles of Embracer and that those are consistent with IFRS. The third area is the separation and distribution of Asmodee. Embracer has distributed the shares in Asmodee to you, the shareholders. And in conjunction with the separation, there have been some significant transaction to achieve a sustainable funding of Asmodee and of Embracer. A project of this size and complexity has required a lot of management attention and board attention. And it has also included a lot of various accounting matters. Our conclusion is that the distribution of Asmodee shares and the related transaction have been presented in accordance with IFRS. I have now come to our conclusions from our audit. In our audit report, you will find them and the auditor's report is included in the annual report. Our conclusions is that we recommend the Annual General Meeting to adopt the income statements and the balance sheets for the parent company and for the group, that the profit be appropriated in accordance with the proposal set out in the statutory administration report and that the Director and the Managing Director be discharged from liability for the financial year.

Thank you very much, Magnus. Do we have anyone that having any questions for Magnus. No. Okay. I then find that the annual report and the consolidated accounts as well as the auditor's reports have been presented. Thank you, Magnus. As we heard, the auditor endorses that the Annual General Meeting approves the presented income statement and balance sheet as well as the consolidated income statement and consolidated balance sheet. Can the Annual General Meeting approve the presented income statement and balance sheet.

Yes.

Thank you very much. The Board of Directors' proposal regarding the allocation of the company's results is included in the annual report and has also been included in the notice of the meeting, which has also been endorsed by the auditor. The Board proposed that no dividend shall be paid for the financial year '24, '25. The Board proposed that the funds available to the Annual General Meeting of approximately SEK 27.7 billion shall be carried forward. Do we have any questions regarding that? Okay. As we heard, the auditor supports also that the Annual General Meeting results to allocate the company's profits in accordance with the Board's proposal. Can the Annual General Meeting result that the approved results is allocated in accordance with the Board's proposal.

Yes.

Thank you. We have previously heard that the auditor support discharge from liability. I would like to inform the Annual General Meeting that the Board members and the CEO may not participate in the resolutions concerning each of themselves. Can the Annual General Meeting then in accordance with the auditor's endorsement approve discharge from liability to the directors of the Board and the Managing Director for the past financial year.

Yes.

Thank you. And considering the votes provided in advance, we can also note that the resolution is passed with sufficient majority. And we also note that the directors of the Board and the CEO did not participate in the resolution as far as they were concerned. Then we have now come to the determination of the number of Board directors and auditors' fees to the Board of Directors and the auditors and the election of the Board of Directors and auditor. And this proposal has been available since the 18th of August, also on the company's website in the note -- this to the meeting and also available here today. So I would now like to ask Per, the Chair of the Nomination Committee to present the proposals for all these items, and then we will later vote on all of them together, if that's okay.

Thank you, Kicki. Well, first, as usual, something about the Nomination Committee. As you might know, it will -- it consists of the representative of the five largest registered shareholders at the end of November each year. And in this respect, the end of the Annual General Meeting in 2025, it has been me, appointed by Lars Wingefors [indiscernible]; Ola Åhman appointed by Savvy Gaming Group; Anna Henricsson, appointed by Handelsbanken Fonder; Henrik Olsson appointed by Canada Pension Plan; and Magnus Tell appointed by Alecta. I have been chairing the committee and Kicki Wallje-Lund has been adjunct to the committee. Head of the AGM, the Nomination Committee has held 7 recorded meetings and has had regular context in between. For its work, the Nomination Committee has reviewed and considered the internal evaluation of the work that has been conducted by the Board of Directors and the Chairman's statement regarding the Board's work. The Nomination Committee has also reviewed the company's strategies and interviewed the company's auditor as well as all individual members. And the proposal has been -- are, of course, described in the notice. And in respect of the Annual General Meeting 2025, the Nomination Committee has unanimously resolved to submit the following proposals. And this is then Item 10, 11 and 12. Proposal for the determination of a number of directors and auditors. We propose that the Board shall consist of 7 directors without Deputy Directors, that the registered audit company is appointed as auditor until the end of next Annual General Meeting. And Item 11, that's proposal for the determination of fees for the Board of Directors and auditors and other remuneration. I will not go through all the figures, because they are also described in the notice to the AGM. However, I would like to underline the fact that the Nomination Committee encourages the Director of the Board to hold shares in the company. And the recent statement linked to our proposal, it sounds like this. In the process of setting and proposing the Board fees, the Nomination Committee has conducted a thorough benchmark of board remuneration levels based on Swedish and international peers and has also sounded present board candidates in this effort. With respect to the temporary, current and anticipated extra workload of the Board associated with the transformation of the company into stand-alone publicly listed entities, the Nomination Committee consider it's reasonable to propose the transformation fee on top of the ordinary remuneration up until the completion of the companies. You might remember that we introduced a transformation fee last year for the Board, but still restructuring and still in transition. So that's why we propose that it remains. Remuneration for the auditor shall be paid in accordance with approved invoices. Lastly, Item 12, proposal for election of the Board of Directors and auditors. The Nomination proposes -- the Nomination Committee proposes that Kicki Wallje-Lund, Lars Wingefors, Jacob Jonmyren, Yasmina Brihi, Cecilia Qvist, Bernt Ingman and Brian Ward shall be reelected. And that Lars Wingefors is elected as Chair of the Board. And in addition, a recommendation that the Board elects a deputy share of the Board. While the recent statement in relation to this, in preparing its proposal for the Board, the Nomination Committee has focused on maintaining its composition and competencies, paying particular attention to the transformation of the company into stand-alone publicly listed entities. Furthermore, taking into account the Board's ability to supporting the company's strategic position and development, international operation, governance and financial controls. Nomination Committee has applied rule 4.1 of the Swedish Code of Corporate Governance as a diversity policy entailing that the Board of Directors shall with regards to the company's business phase of development and other relevant circumstances, have an appropriate composition of Board members elected by the general meeting that collectively display diversity and breadth in respect of skills, experience and background and to strive for equal gender distribution, 43% of the proposed Board members are women In addition, the Nomination Committee has assessed the independence of the Board members, the Nomination Committee proposal regarding the composition of the Board meets the requirements of independent as stipulated in the code. In preparing its proposal, the Nomination Committee has considered that the majority of the proposed Directors are to be regarded as independent in relation to the company and the executive management and that at least two of the Board members who are independent of the company and the executive management shall also be independent in relation to the company's major shareholders. Furthermore, no more than one elected member of the Board may be a member of the executive management of the company or a subsidiary in accordance with rule 4.3 of the Code. Furthermore, the Nomination Committee proposes in accordance with the Audit and Sustainability Committee's recommendation, reelection of the registered audit company earnings PricewaterhouseCoopers as auditors in the company for the period until end of next Annual General Meeting. PwC has informed that authorized public accountant, Magnus Svensson Henryson shall remain the main responsible auditor. Well, that concludes everything, and I'd like to thank the members of the Nomination Committee once again, and personally enjoyed working together with you for the benefit of all shareholders.

Thank you very much, Per. You're speaking very fast. I think you are some kind of record this year.

Last year was faster, I think, actually.

Okay. Do we have any questions regarding the proposal to Per?

My name is [indiscernible] and I am from [indiscernible]. Just -- we believe it's very important that the Board owns shares, as you mentioned, before. But you are proposing one of the directors here for reelection that does not own shares. Is there any particular reason of not owning shares in Embracer.

No, no. I mean we -- as a Nomination Committee, of course, we cannot request, but we can encourage the Board, of course, to own shares. And as far as we have control, I mean, I think everybody had owned shares. If that's -- if not the case, they represent someone that really owns a lot of shares. Yes, exactly. So it's one of the major shareholders that has a representative that you might -- so indirectly, it's definitely an ownership.

Any more questions from anyone? Okay. Thank you, Per.

Thank you.

Now that we've heard proposal for the items 10 to 12, I will ask the meeting to prove all these items together. Can the meeting resolve in accordance with the proposals?

Yes.

Good. Thank you very much. I, therefore, find that the directors, directors and the auditors and fees to each of -- each and one of them have been approved in accordance with the proposals presented. Lars Wingefors will also be acting as Executive Chair of the Board as decided by the Board. In addition, the Board of Directors will follow this meeting formally point me as the Deputy Chair, I've been told. And apart from that, I also would like to inform the meeting who our Audit and Sustainability Committee and Remuneration Committee will be composed. The audit and the sustainability commitment will be Jacob Jonmyren will be the Chair of the committee. Myself and Bernt will be members of the committee. And the Remuneration Committee, Yasmina is the Chair of the committee and Cecilia and Jacob are members of the committee. I would say we have a very engaged and active Board to say the least. And I guess what you -- our shareholders would like to hear is that they are always very well prepared and fully committed. Now -- and on that note, I would like to take the opportunity -- to take a moment to highlight a very special milestone for Embracer. And that is, of course, that Lars has left as our CEO, and he now steps into his new role as the Chair of the Board. After 9 years, Lars, working with you, it is absolutely my distinct honor of handing over the responsibility to you. But of course, at the same time, I also would like to recognize your time as the CEO. Nine years is a very long time, and it has absolutely been an extraordinary journey to say the least. While we are very fortunate that you stay with us as a Chairman, this is the right moment, I think, to say thank you for your leadership and the results you have delivered. First of all, let me say this, the company we see today, it's culture, it's people, it's purpose and its potential truly has been shaped by your leadership, Lars. But it has not always been easy. We have faced our share of challenges with different degrees of complexity, slow and quick, smooth and bumpy, high and lows, but always led by your ability to find a way forward, especially in uncertain times, and it has been a few of these. And just as important, bearing in mind your stubbornness, because you are a bit stubborn, as has been your ability to change quickly when reality and the conditions for success have changed. One example, in less than 18 months, all of Embracer's net debt was eliminated. In February this year, Asmodee was distributed to our shareholders and we are now on the way to creating a third listed company built from Embracer when Coffee Stain goes public later this year. And the transformation work continues. And all this is even without the turbulent times we have had all been living in for a few years, and that is an extraordinary achievement. You have transformed this company, building what was right then and leading us to what is right now. Another thing to reflect on. Lars as our major shareholder, who also been our CEO and now becoming our executive shareholder -- Chairman of the company. You have always been I would say like this, there's never been a situation when Lars has not acted in the best interest of all shareholders, always with the company's long-term future in mind. But to wrap up Lars, there is one thing that we have all learned from you. And that is without a doubt that Värmland is the very center of the world. And why we smile at that, I think it reflects what you always taught us to stay grounded to know where we come from and to lead with conviction, which is something that has inspired us all. Something else that has inspired us all. And I really mean everyone in this room and everyone is, of course, your ability to color things, color to life. We have all experienced that through the years. And I have an example I would really like to share with all of you, and maybe you remember this, Lars. Coloring, do you recognize this, Lars is always talking about coloring. And this is an example, actually from a quarterly presentation and is back in November last year, you were on stage in the Q&A session together with Martin Anel from D&B. And it started like this. How do you feel about your near-term guidance Martin is asking you? And you're saying, we don't do guidance. But you do really on the segments, Martin is saying, look at Lars' face. Coloring. Coloring, Martin says, yes, coloring. Okay, coloring. But we are 1.5 months into the quarter, and you have guidance on Q3. Now look at Lars. No, we are not guiding. We are coloring, talking about stubbornness. Okay. And on that note, Lars, please join me here, so we can welcome you as our new Chairman of the Board.

Kicki, thank you.

And we are all keen to hear what you have to say about the future as the new Chairman of the Board.

Well I'm not the man of many words, perhaps a bit of color.

Exactly.

Fantastic picture of [indiscernible]. I've been dancing there a few times, actually bought a Cadillac there. No. But I want to say, kicki to start now is not like you're leaving each other entirely...

It will just be more than time, I think.

We are warming up for the future. We'll still have to thank you so much for being the Chair for all these years since the first meeting at [ Nobis ] 2016, it's been a crazy journey. Not crazy is not perhaps the right word, but colorful journey. And you have done such a good work being a Chair. And I'm so glad that you actually continued that work as a wise Chair with a touch of Chairman for myself.

Thank you, Lars. But we were very keen to listen to what you think about the future as the new Chair.

Yes. But I have to say that. But no -- but to start, as I said on stage before, I'm really glad to -- I'm looking at that picture. I didn't buy a Cadillac, I bought an Impala, sorry. That one was bought in America. Now to speak more freely as a shareholder, I think that's a privilege. I would enjoy to talk more about to create shareholder value, valuations and so on. That and actually to lead the company forward throughout the Board and work with the management team, Phil and Müge hold them accountable for every quarterly performance. No, but I'm really looking forward to it. And I feel we need to be honest in this room. Many of you have been with us since the beginning. And it's been a journey. And when I stood here 2021, the whole world was crying out for games. The money came from -- yes, a lot of money came to gaming industry, including Embracer and they were all investing, we couldn't invest enough. Now the war came, inflation came, the reality for gamers came that, okay, actually had to work. I don't need -- I can't spend all my day playing games. So obviously, the market has changed a lot. And now we really need to phase adapt to that change. And obviously, we have done that over the past years. But one of the largest issues has been the inflation in games development in the cost of making games, which has created -- in a more mature market that is not growing as it did during pandemic and earlier. That has created a lower ROI and a weaker cash flow. And I'm -- and I know we are addressing that. The management team are addressing that, and it's very high on the agenda at the Board. And we are not done with all that work, but we have a plan A, B and C. And I was glad to stand here today as well. We already talked about the share buyback. I think it's a small sign to shareholders that we start returning capital. Obviously, the dividend of Asmodee was a big dividend back to shareholders. This morning's share buyback is a bit smaller. Hopefully not the last one. But the next one post this would be the dividend of Coffee Stain Group to shareholders. I need to watch my mouth here and [indiscernible] look nervous. But to cut it short, I'm long-term committed to our people, to our franchises, companies, and I'm committed to you shareholders to create more value. So thank you all, shareholders, members, team members, partners, fans. So yes.

And when you have been 9 years as the CEO, you also get some flowers, but we'll leave them there, I think -- but that is -- so you're not [indiscernible] sit here.

Flowers for you as well there.

Okay. Thank you very much, Lars.

Thank you. Thank you.

Okay, then we continue with the remaining part of the meeting and we are now at 18:13. The Board of Directors has, after a recommendation from the Remuneration Committee proposed that the Annual Meeting approves the remuneration report as has been announced in the notice of the meeting and also been on the website prior to the meeting. And in this context, I would also like to point out that the auditor statement regarding guidelines for remuneration for senior executives are available here today and has also been available on the company's website since the 27th of August. In addition, the current guidelines are kept unchanged and will be adjusted no later than at the annual general meeting next year. Are there any questions regarding the report. No. Can the Annual General Meeting resolve in accordance with the proposal?

Yes.

Good. Thank you. The Board of Directors has proposed that the Annual General Meeting shall resolve on authorization for Board of Directors to issue B shares, convertibles and/or warrants. And this proposal has also been included in the notice and been on the company's website prior to the meeting. I can note -- it can be noted also that the authorization may comprise a maximum of 10% of the total number of shares in the company per day when the authorization is first used. How many is that by today, Ian? Are you sleeping? Sorry...

You want me to say it or do you want to say it.

Yes, you have sat here that I should ask you.

Good stuff. So 22,511,970 shares, that is.

Okay. Are there any questions regarding the proposal? Now can the annual meeting then resolve in accordance with the proposal?

Yes.

Thank you. Considering the votes provided in advanced we can note that the resolution is passed with sufficient majority of 2/3 of the votes cast and present at the bidding. The Board of Directors has also proposed that the Annual General Meeting shall resolve on authorization for the Board of Directors to repurchase own B shares. And this proposal has also been in the notice and been on the website prior to the meeting. It can be noted that the authorization may be made up to a maximum number of B shares that the company is holding of own shares correspondence to no more than 1/10 of all shares in the company. Do we have any questions regarding the proposal? Can the Annual General Meeting resolve it in accordance with the proposal?

Yes.

Thank you. Considering the votes provided in advance, we can note that the resolution is passed with sufficient majority of 2/3 of the votes cast and present at the meeting. Number 16, the Board of Directors has also proposed at the Annual General Meeting shall resolve on authorization for the Board of Directors to transfer own shares. And this has also been announced as the previous items. Are there any questions regarding the proposal? Can the Annual General Meeting resolve in accordance with the proposal?

Yes.

Thank you. And considering the votes provided in advance, we can also note here that the resolution is passed with sufficient majority of 2/3 of the vote cast and present at the meeting. Wow, that was the last one. #17, closing of the meeting. Well, dear shareholders, with this meeting, we can now put 2024 behind us. And I would like to thank you all for participating in our meeting here today. And we hope to see you next year again in Sola i Karlstad. And thus, we have no other questions that has been reported. I hereby declare the meeting closed. Thank you so much.