Enad Global 7 AB (publ) (EG7) Earnings Call Transcript & Summary

Welcome to today's presentation of EG7. And the things that we're going to discuss today is the forming of the group, what it means, why we're doing this and what does it consist of? In this group, we have Toadman Interactive, who has delivered great consultancy services in the video game space for many years; Petrol, a global leader in marketing and video games with some of the great titles delivered like Call of Duty, Destiny and Overwatch and Dark Souls; Sold Out who has with their great distribution and publishing services, service many known titles like Worms or Jurassic World; and then Antimatter Games, whose titles has been award-winning and done really well within their known space of gaming of historical accurate shooters, with the latest game being Rising Storm: Vietnam. We are truly global group here at EG7. And this is the reason why we wanted to do this announcement today to clarify who we are today, what we stand for, how our group looks and what we are about to do? We believe that video games are truly global, and that this is super important to our message and to what we stand for as a group. So we think that we cannot only be a gaming business in one country to be a global group and to truly service the global industry of games. We have to be global, and we have to exist all over the world. As of today, our group has together delivered over 50 titles successfully to the market, and we have 20 titles in the pipeline as of now. This is, of course, some great growth behind this company and some great change. After -- just 2 years ago, we were 22 people and had a revenue of SEK 11 million. A year to today with the first 3 quarters of 2019, we delivered SEK 357 million of revenue. But this is not only a story about growth in revenue, it's also a story about growth in talent that we have gotten to the group and more people willing to join us and now also building a full service platform in video games. And that's what we've been focusing on. And this has gone quite fast, and it's taken a lot of energy from the entire team, has been working really hard. And I'm extremely proud to be part of this journey and to be part of the team that has been able to deliver this to where we are today. If you think of it, EG7 at a glance, it's a business that does publishing, marketing and development of video games. We are developing something from a concept to a finished product that can be delivered into consumers' hands through our ecosystem. And this was the goal and what we were building towards. We've added great different companies that have proven track records of the past and put them together to be able to deliver something even better. And this has been the goal, and that's where we are today. We have created our base. We've created our starting block. And now we're super excited for 2020, where we're now going to show where all of these pieces are fitting together to create this great value-add. As of today, and I think that this is important mostly to our former investors, who's been with the company, the business is very different today than it was 2 years ago. And I think that this chart shows it very well. Today, most of the revenue exists within our publishing division, then our marketing division and then our consultancies. But this is also partly intentional as we have not been trying to grow our consultancies lately and instead focusing more on own IP, which we see as the big revenue driver of the future for the company and the group. In this chart, you can also see some of the things that we do with the different group companies. And let's have a short look at it. We can look at Toadman, which is a consultancy studio, which also develops some own IP. Within -- that sits within our development branch. That's also where we have Antimatter, which has a great track record of -- just the last 2 games they worked on did 1 million units each. And then the last one, doing 81 Metacritic and winning many awards for the Rising Storm: Vietnam. That's our development side of the business. Then we have our marketing arm, which is one of the best marketing firms in the world when it comes to video games. And this is quite clear if you look at something like Call of Duty, Destiny, Elden Ring or even the Nintendo games that go through Petrol. People come to Petrol because they are the best in the world at what they do. And they've been doing this for 17 years, delivered over 1,500 titles to market. And then we have Sold Out, has shown some explosive growth within their business, but this is also because Gary and James, founder of the business, were still very engaged with the business and with us, have been in the business for 30 years and been working on so many titles. And this shows through their great business and how they've been able to build Sold Out with 18 people to such a massive company, delivering games such as Worms to the physical markets or Zombie Army or Jurassic World. Let's have a little look at the 10 games that are coming in 2020. This is, of course, one of those exciting points for me because here's where we're going to start showing that ability to deliver some added value. So we have these businesses that are already delivering revenue and profit to the group. But here, we have the upside potential. Not only do we have a bunch of titles that are coming out from the well-known established partners of Sold Out, but we also have some new games that are fully published from a digital and old platform solely by Sold Out with a much bigger revenue upside. One of those games are No Straight Roads, which I'm personally very excited about. But there's also others coming, and some of them are still not announced yet. And I think it's very important to see that it also comes with more things in the future already that is locked down. And of course, it's going to come more again through the publishing arm of Sold Out, but just from Antimatter and Toadman Interactive, we have more titles coming up, with the still secret, Project Anubis, which we are going to talk about more soon. '83 and I.G.I., 2 great titles that Antimatter Games in the U.K. is working on a studio that truly show that they really know what they're doing as they delivered the last game at 81 Metacritic and SEK 1 million of sales. And that was only on the PC. And now we're going with '83 and I.G.I. to 3 different platforms. And we're also doing them -- with I.G.I., we have an IP that's shown that there's a lot of interest as we launched trailer for I.G.I., the new game. We received 1 million views within 2 weeks organically, which shows that there's still a great excitement around IP. And then also, last but not least, we have Block'n'Load 2, which is a title that the first game had 4 million downloads and many of them fully organically after the launch of the game. And we see that there's a big excitement out there, and we wanted to create a better base and a better platform and launch a new game, and that's something we're really excited about. But then we also have, of course, EvilvEvil, which I'm going to talk a little bit about in a second, but we announced just recently here at Toadman and something we've been working on for a while. [Presentation]

EvilvEvil is a vampire co-op online game with a narrative that changes depending on player input. I won't say much more than that right now as we are going to go out both to consumers and to press with more details at UDC this year. But what's important to the shareholders is that not only is this something that I think gamers will be very familiar with from what we've developed in the past or worked on in the past, but we're also bringing some really exciting and new features into this. And also, we own 100% of this game now, and it's our fully owned self-developed IP. So this is something we're very excited about and looking forward to show more and talk more about. So this is the important part and sort of the rebranding effort of the group, where we're seeing here at EG7, we're now something different to what we was in the past. And why is that? Well, because it is true. We have had this massive growth, adding all of these great companies. And we need to talk about what the company is today. And today, the company is a company that distributes markets, publishes and develops video games. From service side, we deliver great services to the industry from consultancy services to distribution services, to publishing services, marketing services, that has also the goal to now be that platform for any game that is already in the group or for people who wants to come with their company and join our way of doing things. And that's where we are today. So why should you invest in EG7? Today, EG7 has a very experienced team in the management that we've added through 2019. We have a full service company that are creating revenue streams in a very diversified way through many different sources of the gaming industry, which has shown in the past for many years that we've been able to grow organically year-over-year with all of these businesses. But also, we have discrete game portfolio, which has super exciting upside to the games if they do well in the coming years. But that's not something we're relying on in the group. We're relying on the fact that we're able to generate revenue through the group companies. And that also creates a much lower downside to any investor looking to invest in the group. I think that these are some great reasons, but you have to decide for yourself. But I want to say for all of you, who has been part of this journey, thank you very much for trusting us. We take that responsibility extremely serious and, for all of you who will be coming investors or joining into Toadman, welcome aboard.