Stillfront Group AB (publ) (SF) Earnings Call Transcript & Summary

Hello and welcome to Stillfront press conference. [Operator Instructions] Today, I'm pleased to present Jörgen Larsson, CEO; and Andreas Uddman, CFO. Please begin your meeting.

Thank you very much, and good afternoon. Extraordinary times and extraordinary development calls for extraordinary measures, so we have decided to provide you with a current trading update. And of course, those extraordinary times as related to COVID-19. We would like to elaborate and describe and also quantify what we have seen so far. And as you have read in our press release, we see continued very strong results and good momentum. And as we also communicated, we already, from late March this year, we saw the accelerated gaming activity. And also, in general, as we all can read about and see and potentially experience ourselves, you basically consume more digital entertainment globally, which has been very clear and very beneficial for us. So we have been in a good spot. What is the key message in what we would like -- that we would like to convey today is that we -- also in April and May, we saw a very strong momentum going forward. And that was across our whole portfolio and all our 3 product areas. And it's in 2 dimensions. One is that existing users have been more active and spending more time and spending more money and enjoying our games on one hand. On the other hand, we have also seen that we have had a very strong influx of new players into our games. And of course, that is beneficial. But I would like to elaborate on the new players and our marketing related to that because we have spent at the last -- at the highest level so far in our history in marketing in absolute terms, that is, but -- whereas it has returned exceptionally well. And usually, we don't use that kind of words. But in this case, I think that's the only word to use, exceptional. That means that we have very -- in a very short time, we have been able to enjoy the top line growth from this accelerated marketing which leads to that in relative terms that we usually also present in conjunction with our quarterly reports, namely how much marketing we have in relation to our net revenues. That is not extreme in any case, it's more a relative -- it's more normal than it is extreme in any sense. But in absolute numbers, it's definitely our highest spending so far. And of course, it's financially very beneficial to be able to have high spending in absolute numbers as well as then enjoying the effects quite immediately or with very short return on marketing. So that is 1 part to our message. Another thing which we see is very important to understand Stillfront and how we -- how our current businesses is performing and the characteristics and not to lead the dynamics is that we had an hypothesis when we saw this starting in March and early April, that there is no reason to expect that the users that come in, the cohorts that we have been able to bring in during this last 8, 10 weeks or something, that they should act differently in terms of retention characteristics compared to our existing players that came in 1 year ago or 3 years ago or a quarter ago or something like that. Now we start to collect data. It's early, but we start to get in data for every day that passes along on these cohorts. Now we get them confirmation. Again, it's early, but now we start to collect data suggesting that this hypothesis that they will stay in our games for a long time, just as any cohort that is come in, that is also -- it is confirming that view and that hypothesis. And that is, of course, very important, whereas the marketing as such, with lower CPIs and higher return and lifetime value, that is something that we see is flattening out and is normalized. But that shouldn't be mixed up with the cohorts that actually have come into our games where we expect them to be in our games enjoying our entertainment for quite some time. The normalization, I also would like to emphasize, means that we are going back to CPIs, which are more normal pre-COVID levels. We're still having high activity, so LTV values are strong, but it's basically normalizing. But we -- it's important to understand how Stillfront works. And we have always focused on how to have high standards when it comes to the profitability on our marketing. So we keep that, we have been able to achieve that, but it's not on the extreme levels that we saw in -- from the last 10 day of March into April and into May. As always, we don't give forecasts. So -- and also, I would just like to touch upon that. Even though we see an abiding effect from the cohorts that comes in, June is usually one of the most -- the month that we have with the lowest visibility. And the reason is that the ordinary seasonality effect that we have in June, both from vacation periods that start to some extent, and it's weather dependent and things like that, especially in Europe and to some extent, in the U.S. but also Ramadan in the Middle East or in all Arabic or Muslim parts of the world, ends in late May, usually. So we have that seasonality pattern. We expect that, that seasonality pattern will be the case this period just as any period. There are some discussions if you read open fora on that. It could be higher, it could be lower, but our expectation, it will follow more or less the usual pattern, which is than -- lower than -- usually lower than April and May. So the numbers that we have communicated are 3. It's bookings, it's net revenue and our adjusted EBIT for the first 2 months of the second quarter, that is until the 31st of May. So the bookings amounted to a total for these 2 months of SEK 851 million. Whereas our net revenues amounted to 833 -- SEK 833 million. And our adjusted EBIT amounted to SEK 310 million, which represents a EBIT -- adjusted EBIT margin of 37%. And also here, you can see that we have been able to increase our marketing without lowering our margins. On the contrary, we have been able to increase them. One comment also on the unusual big difference between bookings and net revenue. That is typical for months where we grow -- where we enjoy high-growth since the payments often increase faster than the usage, so that's the normal dynamics. Whereas over a year, normally that is -- that has evened out. So that is important to note as we walk through the numbers. So finally, before opening up for questions. So we also -- of course, we are very pleased with the development that we've seen. We are also pleased with the fact that we can see that the early data points that we can -- that we now have been able to collect for some weeks, looking at the corona cohorts or COVID-19 cohorts, suggest that this has the same pattern as any cohort. That's, of course, encouraging looking forward. We're also very happy to see that our latest acquisitions, Storm8 and Candywriter, has had a good start, fueled partly by the COVID-19 effects, but also through that we have started a good collaboration between other studios. So we are looking forward to hopefully be able to work with successful M&A in our agenda looking forward as that is a key element in our strategy. And finally, our financial results for Q2 will be published on August 12. So we're looking forward to that opportunity. So with that, I would like to open up for questions, and both me and Andreas, our CFO, are available to answer these questions.

[Operator Instructions] And our first question is from Lars-Ola Hellstrom from Pareto Securities.

I have a couple of questions. First of all, you say April and May, higher activity and higher spending among existing users. If we take some older games on a like-for-like basis, would you say that the ARPU levels are at the highest ever? Or how should we've seen it? And have you also increased the number of content drops for the games, utilizing the situation that people are working from home, et cetera?

So I think that it's not a dramatical change because the types of games we have, it's not possible to pay indefinite amount of money in a certain period. So that is not the largest effect. What is, however, a large effect for us is that the way that our user base is behaving, that we both have the ones that actually played in Q1. They continue to play and they consume our games but it's not a dramatical different pattern. But then we have use -- we have a large user base that are playing in periods. They play for 3 months. They don't play for 3 months because they have a lot to do at work or going on, not vacation this year, but traveling or whatever. So we have a large base of dormant, but still from time to time, active players. This category has come into the games again. And thereby, we increased the revenues from the existing user base, even though they were dormant potentially in Q1 or Q4, whenever it could have been. So it's more that we have from our existing user base, more paying users than we usually have rather than it's a dramatical change in spending per user. So I hope that answers your question. The second part of the question was whether we have had more content drops and similar. We have been very active, and I'm very pleased to see that our organizational model with a high degree of decentralization out to the studio, 14th studio we have, is really a strategy which I'm happy that we have been able to execute on. Because what that drives is the proximity to the market and the consumers, so that we much more -- much faster, basically, can adopt the way we operate. Both our marketing, we were very, very fast on -- see that there is a shift in the market, let's use this and ramp up marketing. We're extremely fast at that. And if we would have had the central marketing or myself or Andreas should take all the decisions, that wouldn't have been nearby as strong. And that also ties into the similar effect when it comes to live ops and content drops. Then of course, content drops -- content production has a lead time but live ops is much more than just content drops, it's events and things that happens in the game. So I think on the live ops side, we have also benefited from swiftly and being agile in translating the change in behavior in the market to adopt to that and to capitalize on that.

And also in June, maybe you can give some flavor on the first 10 days. Has the high engagement ratio continue into the first 1.5 weeks of June? And the second part of the question also, we know that the marketing price has come up or normalized again. But is it still possible to scale the games in a good way with, so to say, more normalized ROI on the marketing campaign? So it's still a good opportunity to scale the games.

I think that, as you know, we don't give forecasts. So we decided explicitly not give forecast for the reason that I mentioned in my introduction. So we will not say how the first 10, 11 days has elapsed. But -- so I mean, the visibility is lower for the reasons that I mentioned. I mean even if we didn't have any COVID-19, usually June is the hardest month to forecast internally. So that's why we say that the visibility is low, so we would not like to mislead anyone. So we expect that it's a similar seasonality pattern that we've seen other years. That's what we expect. Some -- as I said, some people expect that would be a higher seasonality and some others say -- suggest that it will be lower due to the COVID-19 effect. And who knows how long the COVID-19 effects will last. At least not myself. So it's very easy to -- it's hard to judge how June will come out. And since we are very fast, it's actually also -- it's good for the business, but it's hard for the forecasting since we change very rapidly. So if it becomes easier to -- more profitable to market again the last 14 days, usually, it's not, then we can use that. And that short-term for the -- for June would be not beneficial for margins. If, on the other hand, if it slows down, it's beneficial for margins. So it's very dynamic, and that's why we don't comment on June specifically. If it's possible to scale our games, of course, it's possible to scale our games, again, with the caveat of -- or the comment, rather, that this is usually coming into the seasonality pattern, not only talking about June also in Q3, which we -- as long as this company has existed, we had a slower Q3 than Q2. So we expect that similar pattern. But there is absolutely nothing suggesting that we would not be able to continue with our very profit-oriented marketing targets of recouping marketing spend within 180 days. And even though it would not be under exceptional levels of the churn of marketing as we have had the last 3 months, it will -- we have no reason not to expect that, that will continue.

But if I rephrase the question a bit, have you so far in June seen any kind of seasonality effect?

I think it wasn't that the same question. So I don't have anything more to add to that. I mean it's -- we expect the usual seasonality pattern. So that's what we say.

And the final for me here. I listened about when you spoke about the Ramadan. Has it been the normalized pattern? Or has it been even more reinforced due to COVID-19?

What we expect and what we see is that seasonality for Ramadan is similar to what it has been. Now we haven't been so many years in -- with the volumes that we have currently through the success of Babil Games, which we're very happy about, by the way, of course. But we expect and see that it follows a pattern which is not extreme in any case, neither up nor down. So that's also why we emphasize that we expect a normal seasonality pattern this year.

And a final, final for me here. Now when you have gained a lot of new users in Q3, will you go into sort of, say, a more refinement phase of the new users you have gained or -- so maybe you will spend less on marketing that you maybe initially planned for just a few months ago?

No. We don't spend or spend less or more depending on how much we spent the month or the quarter prior to that. We target to -- I mean, basically, you can say the following. We would like to spend as much as possible with a very hard discipline to recoup the marketing spend within 180 days. And I think we have been quite successful in that for long time, many regions in the world and all the products in our portfolio. So that is what we will continue to do, but we know that it's harder to do marketing at scale in Q3 usually due to the seasonality. So we expect a similar now, but it's not because we have spent more in absolute terms, which is important, not in relative terms in Q2.

And our next question is from Hjalmar Ahlberg from Kepler Cheuvreux.

Maybe a question on the geographies. Have you seen any different behavior here? Or is it similar in all markets? If any, any comment on that?

I would say it's quite similar between different geographies. So then, of course, when -- as the pandemic was spread, of course, we all know that it came in a certain order, so to speak. So -- but I think it's -- it is surprisingly simultaneous, so to speak. But then again, if we would have higher volumes in Asia than we have, we have in the Middle East, but they are -- that pattern was more like in Europe than in Far East. So I think that -- it's very low. It doesn't change with geography so much.

Okay. And how about -- I mean, I know you said that this has been quite similar in all your different segments. But can you say anything on any games that has done particularly well? Or is there anything particular out there that could be interesting to highlight?

What I can emphasize is that we have grouped our 36 -- current 36 active games in the 3 product categories that we have for a -- really for several reasons, one being that they have different dynamics. They have common denominators, which is core of our strategy, they should provide an entertainment that could entertain users for a long time, so there's longevity. And also that we have games that we also can make interesting for the consumers for a long time. Having said that, still with the longevity, it's a different pattern in strategy on one hand and mash up on the other hand. Strategy is typically slower ramping up, typically monetizing on a higher level from a smaller number of users over a longer time, compared to mash up, which is on the other part of the scale. Even though we have strong longevity metrics for being cash -- cash on the mash up games, it differs just by its dynamic. So it's basically ramping up faster, early KPIs are much, much stronger. It is longevity, but not as strong longevity as strategy games. And then simulation, RPG and action are in between that. So again, we see similar pattern now as pre-COVID-19. And that goes for all of them, but there are differences between the 3 different product areas. The same as previously we see now. If that makes sense.

Yes. Okay. And regarding your marketing, I mean, you said you have been able to use, of course, a bit of lower marketing cost to increase marketing spend a bit. Have you done any change in, I mean, what kind of channels or what type of campaigns you do? And if that changed this quarter, it's something that will change going forward or any trends there?

No. It changes every day, and that's part of our strategy. So we have a tremendous -- many skilled people out in our studios that really are -- I mean, they are really professional in their craft. So it's part of that craft is to constantly A/B test different channels, the same channel with different graphics for marketing with different language or way to present our games, et cetera, et cetera. So we run many, many campaigns as we speak literally. And they will be changed by dawn tomorrow. So it's a very high pace of changing. So I think that's one of the key recipes for us being successful -- have been successful. So it's basically no change because of COVID-19.

[Operator Instructions] Our next question is from [ Oki ] Erixon from Carnegie.

I think [ Oki ] is me. Oscar Erixon here. A few questions from me. I'm sorry if I repeat any question here. But can you shed some light on how much CPIs were down at sort of the trough level in March and April and how close to a normalization it is now in June, would you say?

So it's quite hard actually to say because it differs significantly the CPIs, depending on product, depending on market, depending on channel. But we're not so focused on the CPIs, the absolute number of the CPIs. The whole thing is the relationship between the CPI and the LTV, what kind of value we can bring out from each user that we acquire. So that is what is in focus for us. Having said that, so I don't have a single number to present on the CPI levels or how they have changed. So -- but again, it's not the key thing. But we have -- the relationship between that has been -- as we have -- we seldom use the word exceptional, but they have been exceptional return on -- that marketing. So that is the key thing. Looking now, I think that we are on the CPI side of that equation, we are -- it differs again between different products, different marketing and what kind of campaigns we run. But it's normalized so it's getting to pre-COVID-19 levels. But the LTV curves are still strong so we see good opportunities for marketing. But then as we have said, we have always lowered marketing as we entered into seasonality because, for obvious reasons, we're turning in 180 days. If you have 80 days that is affected by vacations or a lower season, of course, that has an impact on that equation. But taking and separating seasonality from the structural change that we have, I would say that CPI is back to normal, more or less, differs, of course, but LTVs still strong, but on lower levels or lower spending levels.

Got it. Very helpful. And my next question might sound a bit complicated. But given a higher revenue level now heading into Q3 and assuming normalized CPIs, do you think you will be able to spend as much on marketing in percent of sales? Or will that be harder with this new revenue level? I hope that question makes sense.

It makes perfect sense. So it's not a dynamic as we see, that just because we have a higher volume, it's harder to spend. And the reason for that is, even though we think we are a beautiful company, we are still quite small in the global market. So we -- not yet we have 30% of the global market, but rather 0.3%. So we don't impact the global prices that much. So I think that, that is not a limiting factor. What is the decisive factor? It is basically more about the seasonality again. And if you look back, our spending has, I think, all 10 years we have been in action, been lower in Q3. But of course, I will be super happy if we can spend more, not compromising a second with our 180-day return on marketing. So -- but I expect it's lower.

Great. And quickly from your comments that -- I mean, the strong performance is very broad-based, both in terms of geography and studios. I wanted to ask about Candywriter, specifically, and I think you mentioned it had a strong start now. And it would be great if you could share some further details on that because, obviously, Candywriter is partly dependent on ad revenues. It looks -- when looking at closing data, it looks like a bit of a weaker performance in April and May compared to other games in the portfolio.

Yes. So you're absolutely right that BitLife, which is the main product for Candywriter, has -- it's a single product with the highest proportion of ad revenues. So when the ad market is weaker, namely lower CPIs, which benefits our marketing for all students, including Candywriter themselves, it's lower revenues per unit, so to speak, on their side. So they are -- have also besides that they benefit from being able to market their own game, they get even lower revenues. But so when now the CPIs are going back to normal, that's good for their ad revenues. But you're right, that has impacted their revenues. They have made -- Kevin and Nadir and team has made a great job in increasing and be very active on live ops and increasing in-app purchases in a very impressive way, I think. But of course, since they were -- and the majority of revenues came from ad revenues, they are affected by that. But that's also the point why we have emphasized so much that we would like to increase the total -- of our total revenues, how much that comes from ad revenues because it's an in-built hedge. So we diversify our total portfolio in yet another dimension, not only the 36 games in different geographies of the 3 different categories, et cetera, but also exactly what I described. Whereas if we come into a period with higher CPIs, the ad revenues will be more worth and they will increase, whereas our marketing will be slightly suffering from that and vice versa. So it's a -- for us, it's strategically important to increase our ad revenues. And to be bluntly honest, I'm a bit disappointed on what we have achieved so far. So I think we can do much better than we have. So I hope and think that we can increase that the next coming year, how much ad revenues we have, to achieve this hedge and other beneficial effects from that.

And our next question is from Erik Lindholm-Rojestal from Nordea.

Yes. So starting off with a bit of a longer-term question. Thinking of the lasting effects of COVID-19, do you expect there to perhaps be a shift in how gaming is perceived more as a form of social medium rather than just entertainment?

I think that many of our users today or yesterday already saw gaming as a -- so that as means for both competing, socializing and just entertainment. That has been the case since backgammon 4,500 years ago. It's the basic human drivers for consuming games. I think they are the same. We have, as I think you're well aware of, we have -- a typical player is 25 to 45. So it's not so much use playing our games because they are slow paced and things like that. And that dynamic is very important because that's also what explains or makes it very likely that it's not just a bump going up because people are spending time at home. Are -- when they start to come into our games, the dynamics of our games is that you play Empire for years. It's not fun to play Empire 3 weeks or something, try to play it 12 hours. There are people doing that, but that's not the usual pattern. So I think that for us, it's not so much a general difference in perception of gaming. But I think that -- having said that, I think still there is obviously more people consuming games. And I think over time, unregarding how much it has been accelerated, more and more people and for sure the ones that are 35 to 45 today, this is an absolutely natural pillar in their consumption of entertainment and social-related online services. It's gaming. So you have music, you have streamed video or film and movies and gaming. So I think that might have been given a push, but it's not a dramatical difference. That is my view, but it accelerates potentially a bit.

Okay. And looking at April and May, is it possible to quantify approximately how much of the growth in daily active users comes from higher activity versus -- from existing players versus growth in new players?

No. But since we've had so much -- it's possible, yes, but we have to come back to that in the Q2 report, I think. Otherwise, we will both have a very long conversation now, which is nice, but maybe not correct. But also that it comes into out of topic things, I think, that we should discuss. But of course, we have enjoyed an exceptional marketing, and that drives a significant portion of our growth. That is obvious. So -- but again, we think that we -- since we see the data points that I mentioned in the introduction, we really believe that this is a step-up for our business that will last for, hopefully, a very long time, and now we can continue with our ordinary marketing, but that is what I can say.

All right. Great. And just a broader question. So seeing that recently acquired peak for what seems to be somewhat higher multiples than you usually acquire at, have you seen any signs of a multiple expansion for unlisted mobile gaming companies?

Not so far. I mean, we have done 2 acquisitions this year on multiples, which are in line with what we have done in previous years. I don't know the specifics of that transaction, maybe it was an auction, I don't know. But we hope and think that it's possible to find attractive, well-ran companies. It's important to understand when we also pay with different stock, it's not a far -- and also have earn-outs. It's not a far-fetched calculation to expect that our stock potentially could increase and they could reach their targets with joint efforts through synergies with a high likeliness. And at the end, we might have paid top dollar anyway even though we don't do it on a high multiple upon upfront, basically. So I think that is part of that explanation.

All right. Great. And how do you view your ability to carry out M&A deals here? Can you onboard even more studios right now? Or do you feel you have to wait a bit before carrying on after Storm8 and Candywriter?

We have a model where we don't integrate new studios more than, of course, financial reporting and governance and what it means to be part of a publicly listed company and stuff like that. But we're not operationally doing huge changes because we come into companies that are well-functioning, have high profitability. And we have, in all cases, also defined an agenda of what we should achieve jointly going forward, all pre-transaction. So that means that we offload, that is what is usually a blocking factor, namely that you have to integrate, then it takes a lot of management time to bring on a new studio. That is not really the case. So from my perspective, it's not so much that. It's just that we should keep on be diligent in our processes, working with long processes deliberately so that we can get to learn the companies and define these agendas. So I think that we have a capacity to do more. Then, of course, it's as always, depending on size of company, we need to have the right financing at the right time and at the right cost and things like that. But I think that we have been able to provide ourselves with a good flexibility. Maybe Andreas, you could fill in a bit on that point.

Yes. I mean we -- as part of the Storm8 transaction, we did set up our balance sheet with new capacity that enabled us to do the Storm8 transaction, but also subsequent to that, doing the Candywriter transaction without doing any financing deals in conjunction with that. But of course, we always evaluate our -- the tactics on our financing and always look ahead of time. So we have a good capacity and that's probably what I would like to summarize.

Related to that also is -- we have been -- as you have seen in our reports, we have been able to enjoy a strong cash flow, which is also relevant in this -- in conjunction with this question, I think.

And our next question is from Ken Rumph from Jefferies.

I had a couple of questions. One, regarding the recent period. Do you identify any changes in the kind of pattern of play by time, whether -- people traditionally played at the weekend or in the morning while traveling or something like that? You see the idea, I guess. Was there a kind of change in the patterns of play day-by-day or during the day? The second question I was going to ask relates a little bit to the M&A topic that we just were discussing. Do you feel either that kind of travel restrictions and so on or just uncertainty has made sort of any processes that you were looking at sort of slowdown? And secondly, on M&A, I guess, most of the -- most mobile video games companies have benefited to some degree in recent times, if they're well run, which is the kind of companies you want to buy, does that make them kind of pause in terms of thinking about transactions? Or do you think ultimately no significant difference?

Thank you. So when it comes to user behavior and user patterns, so we don't see that much change. I mean there has been an increase in activity, but it's not -- that is not a key driver for us because our games has the characteristics, it's basically not meaningful to play an indefinite amount of hours, like if you have an action game or a sports action game or whatever it could be, then you can easily spend 5, 10 hours and continue playing in games and matches and stuff like that. Our games is not that way. They are slow paced. So on average, then of course, there are differences between different games. But on average, we have slow-paced strategy games that it's not possible or meaningful to increase that very much. So -- and also, we have a lot on the mobile so -- or cross platform. So basically, you have your device with you both being in quarantine or being at home as well as when you start to move. That's also why we -- as societies are opening up slowly, we see that the data points are very similar. If we would have had a big portion of our games in front of the console, one might think that then that will be more affected if you're not basically not at home or in front of that console and such. So not that much difference in user pattern. When it comes to M&A, we -- as said, we have, for the last 5, 6 years or something like that, constantly been in talks with approximately 10 companies. Where, typically, well, 3, 4 of them has been reasonable far progressed, so that -- we usually say that, so it's possible to do a transaction within 6 months. That is still the case. So we benefit now from -- and also, we did the transaction in -- during this period, as you know, with Candywriter. So we have, in our pipeline, companies that we know well and that we have met with and things like that. So that is not a hinder for us to conduct M&A work, so to speak. But of course, we are not adding completely new companies in this -- potentially in the same way as usual because that requires traveling. So the bottom line of that is, it will impact our pipeline if this continues for another, I don't know, 6, 9 months or whatever, which we all hope it will not. And on the question that are they less interested in making transaction because their business is operationally developing nicely, I don't think so. We don't see from our dialogues that are ongoing that it will be a less interest because they know -- we all know what that depends on and what the dynamics is. The reason for a company to do a deal with Stillfront and join Stillfront is a much more longer-term objective of taking that separate studio to a completely new level. So we -- a company that thinks about 1 or 2 quarters are very unlikely fitting into our culture. We talk about the next coming 5 years. So I think that, that is why we don't see anyone directly pausing this. Then it could be, of course, for someone that has not yet considered to look at their strategic options. That could be the case, which I don't know about, but the ones that we have established contact with, no difference.

Okay. Understood. A final question, if I may. We've all experienced, or many people, I should say, who are able to have experienced kind of the ability to work from home, which perhaps hadn't before, did you see -- and I guess it's delegated to the studios, but do you see a change in the possible pattern of working either with more people working from home or with kind of more distributed working and effectively being able to access a global talent pool, not just the people who live in your city?

That's a good question. I think that -- it's a couple of different angles to that. But I think if we take away, there are some -- and it has been for our studios, a bit operational for efforts that has to be made into some extent, but we are a truly digital company. So most people have a workstation both at home and they're equipped basically to work remotely. But there are a couple of things that is harder to do remotely, and that is -- I usually say everything that requires a couple of people standing by a white board. That is more difficult to do with reasoning and being creative and things like that. And some parts and some steps in larger software development processes is a bit harder. However, programming -- I'm an old software engineer. Programming could be -- we see higher productivity. But in general, large projects of software development could be slightly lower productivity. So what we've done is that we look quite carefully on different disciplines how productivity has played out. And in general, we see from minus 10% to plus 20% or something like that, and we save travel time. So I'm absolutely convinced that once we're out of the other negative aspects and into a more normalized situation in every aspect, I'm absolutely convinced that this leads to something very positively, namely that it's more flexible and accepted to have different solution which fits individuals and have the second effect that you touched upon, that we can address a wider pool. But again, some elements are best face-to-face and meet -- people meeting each other could never be replaced, physical meetings, face-to-face meetings. But in general, I think it will come out something which is a better working environment for all our people.

[Operator Instructions] Our next question is from Edward James from Berenberg Bank.

Just one quick question, really. Just on Storm8 and Candywriter, when you made the acquisitions, clearly, you outlined a number of potential synergies. But for the said, we need to get under the bonnets of these companies, so to speak, before we talk about them too much more. Now that you've had time to integrate these companies slightly, how are we -- how are you going on about these synergies and how far along that journey are you, particularly with things like localizing Candywriter and the like? And just to give us sort of slight update on that would be great.

Thank you. So I think that it's following our plans that we -- again, that we make up pre transactions. So I think that we are progressing. Some of these synergies are you need to meet and elaborate on. So obviously, those might be or are a bit slower progressing. But the key thing, and what is, I would say, almost always #1 is to increase marketing, increase distribution and reach for all the products. And that has obviously been a huge boost to that area since the marketing has been more profitable and on higher volumes than ever. So I think marketing and distribution-related synergies has come into play faster than we expected. But other synergies are equal following our plans and some of them, since we haven't been able to meet, are a bit slower.

Okay. That's very helpful. And have you begun to outline the time lines to try and take advantage of the very good performance in all 3 of the underlying sort of big games then use companies to drive those games further into Europe? Or that's still something that needs to take time, do the analysis, do the development?

No, I think that, again, that marketing and distribution is not affected by this at all, rather on the positive side because we -- it's easier to -- has been more profitable, significantly more profitable to market in general, and that opens up for the good execution of these synergies. Localization is not either requiring so much fiscal. It's just you have some natural lead time there. So when it comes to the obvious low-hanging fruit of localizing BitLife, that is following our plan, but our plan was not that, that should be done in a few weeks. Typically, that is a 6 to 9 or something like that month thing. So it's following our plan there.

And as there are no further questions, I will hand you right back to the speakers.

So thank you all for dialing in this afternoon, almost evening. So I hope we have an opportunity to come back on Q2 and present the whole quarter and fill in some blanks. But hopefully, this has been useful for you to understand our company and where we stand and how we trade currently. Thank you all.