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

Welcome to EG7's interim report of quarter 1. Today, I'm going to say a few words about the quarter, and then look into what we see the future of the year looking like. We're going to have a little bit look at the financial development of the quarter and some comments there. And then something that many shareholders has been asking us to talk more about, the game pipeline. During the first quarter of 2020, EG7, as a group, had almost 1,000% increase of revenue if you compare it to the first quarter of last year. Not only that, but we also have 20 projects in development, both for publishing side and our internal development that we're super excited about. And Petrol has over 40 projects in the pipeline for marketing, which the last one was Assassin's Creed Valhalla and Call of Duty: Warzone. Something that's really important, I think, to talk about is COVID-19 that has affected the world and we have tried our best here at the company to do what we can to lower the spread just here, locally, in Sweden by making sure that as long as possible to keep our employees at home to protect families and to protect our employees. Some effects that we've seen in the business is that we've pushed some of our revenue from Q2 to Q3 as we've chosen to shuffle some of our launches. And that means that we now have 6 game titles launching from Sold Out in Q3. One of them, they're very much anticipated, No Straight Roads. But that's not the only thing that's happened in the quarter. We've also raised SEK 119 million, gotten a new big major shareholder in the Stena Olsson family and a new Board member in Erik Nielsen, who represents the Stena Olsson family, very renowned investor, and we are very happy to have him on board to make the group even better. This also puts us in an even stronger position into the future to invest in titles and to invest in our M&A efforts. And this is something that we're super excited about. And that is what we've been spending this quarter really, merging all of these companies into the group, improving our operations, improving our strategy for the year and also build out our M&A team. And this means that our M&A team now has already gathered up a bunch of different companies that look very interesting that we're talking to that we are hoping to get to deal with in the coming year. And for me, as a biggest shareholder in this company and owner, to all of you owners out there, I'm super excited about this year, and I hope you are too. So key takeaways from the financial statement is that the first quarter of last year, we had SEK 14.8 million in revenue. And this year's first quarter, we had SEK 155.5 million in revenue, so that is a 949% increase of revenue. And we also had a SEK 12.2 million EBITDA. We had a negative EBIT and this is due to depreciation. And this is because of our accounting practices, and we are -- have the intention in the future to change our accounting practices, which will affect this number quite dramatically. We also have increased from 81 staff to 191 staff, which is quite a big increase over the year. And this means that we are put in a better position for the future. Let's have a look at the game pipeline. One of the most exciting projects of Q3 is No Straight Roads, which has won many prizes and an epic award. We also see Westmark Manor, which is internally developed by some of the developers of Toadman which is also a very exciting smaller project. And then we have Descenders, Radical Rabbit Stew, which are published by Sold Out. And we have Disjunction, Gestalt and KeyWe coming out in Q3. So as you can see, there's a lot of exciting things coming Q3 from our launches, which we think will be very good for shareholders and a great quarter. And then on EvilvEvil, which I know many shareholders want to know more about, we have decided to not go out with any more information about the launch onto Q4. The reason for this, and this also applies to the reasoning behind some of our other titles like '83 and I.G.I. having quite wide launch dates. We have learned from the past, as we've told shareholders, that we do not want to make the mistake again of launching titles that come out in bad timings and therefore, ruining all the potential in the game. So we're very careful now with sifting the release dates to the best possible one. Even if a game is finished or not, we would choose the best timing for the best results for us and shareholders. And therefore, we will remain silent about exactly when it launches until the moment we are sure. And therefore, we can also see '83, Project I.G.I. is going to be 2021 to 2022 to have a big window of opportunity to launch. We also have Minimal Affect that will come out in 2021. That is a new game we just announced that formerly called Project Anubis, and then we have another unannounced project, Project Hathor, in the works that we're aiming to launch in 2021 and 2022. Block'n'Load 2 is an IP that we know that many gamers are very much looking forward to seeing and that one, we also see 2021 and 2022. And then we have 4 undisclosed projects from Sold Out that we haven't announced yet. I want to thank all shareholders for joining us on this journey. We feel, and I feel here at EG7, both very grateful and thankful but also that the journey has just begun. Thank you very much.