Hello everyone, welcome to the very first business review webcast of Remedy Entertainment. My name is Lauri Haavisto, and I'm the Investor Relations Manager here at Remedy. Today, I'm joined by our CEO, Tero Virtala, and CFO, Terhi Kauppi. They will give you an overview of the first quarter, and also at the end of the presentation, answer your questions from the audience. You can type in your questions already during the presentation by using the Q&A tool in the Zoom interface. More detailed instructions for the questions will follow at the beginning of the Q&A session. Now, without further ado, please welcome Mr. Tero Virtala. All right. Good morning also on my behalf, and welcome everyone. Let's jump straight into our first quarter. Summary, the main points, our revenues for the first three months was EUR 8.1 million, a slight increase from the comparison period. Operating profit EUR 0.9 million, being approximately 10% of our revenue. The significant events that happened was that Control Ultimate Edition released on the new generation of consoles, PlayStation 5, Xbox Series X and S, in a very high-quality form, and we are really happy with these launches. A bit more on those later. Then also we successfully raised EUR 41.5 million with the directed offering. Overall, when we look at our development during the first three-month time, of course, the big thing is that we have been building Remedy to be a long-term growth company, and for that, we have been strengthening and developing many fronts. Our game development projects continue to progress as planned, but what we have been doing behind these game projects all the time is to strengthen our production and development capabilities. We already in our Capital Markets Day in December said that during 2020, we already worked on five main games, 15 different projects out of these five main games to deliver games to 10 different platforms. At the end of 2020, we had 274 Remedy talents. We were already using during 2020 over 370 external talents to help us with our game development projects. During the first three-month period, we have been increasing our headcount, so recruiting more people. We have been very happy that despite of the COVID situation, our recruitment and ability to attract world-class talent has continued. We have kept on developing further our production capabilities, the underlying Northlight technology, our team working capabilities, and overall ways of working. We have also been developing new ways to attract and recruit good talent, and this will serve us longer term into the future. In addition, the games we are working now, they are the same games that we have been working previously, Control with 505 Games, CrossFire games with Smilegate, two unannounced projects with Epic Games, our free-to-play game Vanguard. During this three-month period, we have also started a new project. An additional project that is in line with our multi-project strategy that we have been following for a long time. We don't yet have anything new additional to tell on this new project. On the other games, Control was launched in August 2019. It's already over one and a half years. We are happy to say, as we have said earlier, that Control keeps on selling strong. We are really happy with that. The only number that we have so far revealed was the over 2 million units that the game had sold by the end of 2020. The sales have continued on a good level. We are happy with that. An important part of our Control expansion has been to take the game to new platforms and new services. An example of these new platforms, as was mentioned, was the Control Ultimate Edition taken to PlayStation 5 and Xbox Series X and S. We are happy with these launches. The Metacritic score that tells in a way the aggregate opinion of the game reviewers on the quality of the game is really strong. Now when we look at the next-generation platforms, they are in the very early phases of their life cycle. Control clearly is one of the high-quality games out there. Many of the technology advances, like the ray tracing, clearly represents a benchmark for any games. Overall, we can say that Control is really well set for the future, also in the next generation of consoles. An additional thing, we have been taking Control to new subscription and streaming services, and we are reaching quite big audiences from there. That's, of course, then also building up the brand awareness for Control. That's also going to serve our advances with Control in long-term. On CrossFire, we have said it already earlier that there are two CrossFire games with which we have been working on, and both of these games are now planned to launch in 2021. There is CrossFire HD, which is a collaboration with Smilegate and Tencent, and that game is now planning launching first in the Chinese market this year and includes Remedy's single-player campaign. The other game is CrossfireX, a collaboration between Smilegate and Microsoft, game that is launching this year in Xbox One, Xbox Series X and S, and also includes Remedy's single-player operation. Overall, we can definitely say that this is a significant year for CrossFire, and we are a key part of that partnership and will support these launches. In relation to our projects with Epic, nothing more to share there. In a way, the AAA game that we have in development, that's soon moving into full production mode. The second smaller scale project, which we have already said is in full production, continues to progress well in that full production mode. I won't now repeat the business terms. In a way, those have been public already for a long time. It's a good deal. It's a very balanced relationship that we have with Epic Publishing, and the collaboration proceeds well. In relation to Vanguard, our free-to-play game, cooperative multiplayer service-focused game, we are step by step developing it further. The good thing is that the development now progresses, I would say at a very good pace. The internal play testing that's important for this type of iterative service-based game, that has already been ongoing for a while, and we continue it as one key part of the ongoing iterative development, and we are now starting the next phase of closed external game plays with external players. A short look at the global gaming market. Of course, nothing major has changed in three months time. It's just good to remind that, yes, it is a global market for Remedy Entertainment. It's a giant market that keeps on growing fast across all the platforms, across all the geographies. Our focus, it's been the same for a long time. That's one of the backbones of our strategy, and where we know that as a company, we can excel big screen games for gamers, consoles, PCs, core gamers. PlayStation 4, Xbox One, the new generation, PlayStation 5, Xbox Series X and S, Nintendo Switch has grown to be a significant one. PC, cloud subscription services are complementing that in an important way. To have a bit deeper look at the gaming console market, the previous generation, PlayStation 4, over 100 million install base, Xbox One approximately 50 million, Nintendo Switch which has grown to already over 80 million, a really strong generation. PlayStation 5, Xbox Series X and S, they have just recently been launched and are now starting to pick up, and all the signs are showing that this is going to be a really strong generation of consoles. What we are at the same time seeing that supply for these new consoles, it's still limited, so that's limiting the early phase growth. It's also very good for the consumers that this new generation is backwards compatible, so the gamers with their portfolio of games in PlayStation 4 and Xbox One can play these games also in the new generation. In a sense, that's also making a situation where gamers are not in a hurry to change their consoles. At the moment, when this is a long-term game, clearly for the console manufacturers, there are still at this point, very few new generation exclusive games. Those platform sellers that will come at some point and will then boost also the next generation. Overall, we can say that the long-term outlook for this new generation of consoles is really good, but the growth will take time, and for that, the previous generation is most likely staying relevant for a longer time as well. When we look at the PC market, especially the Western PC market, it has the two strong marketplaces that are both growing. Valve with Steam, which has been the dominant player, a really important platform for all the PC developers traditionally, has 120 million active monthly users, and in addition to the active monthly user base, also the games sold have been growing year by year. Epic Games Store, the newcomer, really impressive entry into the market. 2020 had over 50 million active monthly users already. The number of games has been growing. It's almost 500, so it's been more selected portfolio of games, as we can see from Epic strategy, which applies quite well to many new platforms, many new services, in a way, high-quality games are one key component of the user acquisition for these new platforms and services. As an example, Epic was offering over 100 weekly free games, and this type of opportunities are good for the gamers, and they are new opportunities also for the IP holders and game developers like us. An additional thing, which is at the same time changing but also growing the gaming market, is the evolution and development of subscription and streaming services. There are many of those. We can't yet say which model, which service is going to be the dominant one. When we look at the console gaming market, on the Xbox side, you have Xbox network, Xbox Game Pass, Project xCloud, Sony with PlayStation has their services. They are all, in a way, parts of the offerings. They provide different type of packages for the consumers. It's good that there is variety, but it's also telling that these services, what they will be in the long term, they are still in some sort of a development phase. What's clear is that these subscription services, streaming services, they are coming, and they are going to be an important part of our industry as well. Most likely not the only way, but one part which is changing and developing our industry further. In addition to these, we have services from Nintendo, Google Stadia, Amazon Luna, NVIDIA GeForce, and many other services that are at the moment in the piloting or in development phase. These are going to offer opportunities for the content holders and developers as well. Another viewpoint is that the underlying market is growing. There is growing consumer demand for high-quality content. There are new services that will need good quality content, also for the strategic purposes of building their user bases to differentiate from the competition. In a sense, they don't only need the content, but also the developers behind these contents. There are fewer and fewer available studios like us. When we look at the overall market, there are approximately 150 high-quality AAA capable studios in the world. We have seen that even though the market has been growing rapidly for the past 5- 10 years' time, building new AAA studios is slow. It normally requires 100 people, typically 100 people representing 15 different disciplines, working well as a team, having experience, mastering the underlying technologies. Even for the big publishers, building this type of new studios has been really slow. The amount, despite of the market growing, hasn't changed much during the past three years' time. Most of these studios are already owned by publishers and platform holders. At the moment, out of these 150 AAA studios, about 35 are independent studios like Remedy. When we look at the underlying market, that the demand for games is growing, demand for good developers is growing, it's a really good position to be at the moment. We can definitely say that as Remedy, the way that we have always been, that we have the unique capabilities to create immersive worlds, interesting stories, high-quality action gameplay that clearly interest the gamers. At the same time, we have now been able to transform the company into a multi-project model where we can develop this type of high-quality games, many of them in parallel. We can definitely say that we have a very strong basis to build on. Now looking at the market which is growing, market which has strong demand, both from the consumer side, but also from the B2B side, so from platform holders, game publishers, service providers, and the amount of developers available to collaborate with them that would be independent, that's quite limited, about 35 at the moment. We definitely can say that the market has developed favorably from our point of view. Because of that, as we have said earlier, at Remedy, we are aiming for these bigger opportunities. What it means for us is that, we outlined this in the Capital Markets Day presentation in December. We are aiming for much bigger objectives. The aim is that by the end of 2025, we have created several successful games and at least one major hit game, a game that can reach the global top-selling charts and stay there. With these games, we will own and have created at least three expanding game brands, and all of these brands have a potential to produce these major hit games. We also will have capabilities to select the right commercial model that fits for each game. The model that's best for value generation for that game, and which also then creates excellent value for Remedy. It will mean that for some of our future games, we will continue working with really high quality and right publishing partners. With some of our future games, we will go towards self-financing and self-publishing. People continue to be at the core of Remedy, and we aim to be the most attractive employer in Europe for the gaming industry professionals. At the same time, as we have said, we are building a long-term growth company that's balanced, where in a way, we take into account our people, our games, and also our business to have really this long-term profitable growth company that always also manages its risks well. In order to support the execution of this next phase of our growth, we did a share issue in February 2021, raised an additional EUR 41.5 million. This does give us the possibility to, first of all, expand many of the capabilities that we will need for the future Remedy on the production side, technology side, in relation to new games, in relation to new people, partners that we will need, commercial capabilities that we need to build as well, but also to self-finance and self-publish some of our future games. At the moment, we have already started this next phase and are already in the middle of this next phase that we have started. As we have been saying, we see that as a company, we are a category-defining creative super developer, ability to create world-class brands, out of these brands to make distinctive benchmark-setting games. We are a professional multi-project developer, so basically can create in parallel number of these high-quality games, which is quite distinctive in comparison to most of the other independent developers out there. We will have the ability to self-publish some of our games, and at the same time partner with some world-class publishers as well. That's in a way the short business review from my part. Now I'll hand over to our CFO, Terhi Kauppi. Thank you, Tero. Good morning for everyone. The financials. Let's start with the key figures. There seems to be slight delay now for me when changing slide. Yes, now it's working. We had a slight 3% increase in revenue. Our sales mix remained the same against the comparison period, so there was a slight increase both from the royalties and the development fees. Our operating cash flow was strong, EUR 4 million and EUR 4.4 million more than in previous years, quarter one. Timing of incoming payments was more favorable for us this year. As a result of the share offering of EUR 41.5 million and strong operating cash flow, our net cash position increased year on year by EUR 48.4 million, reaching the level of over EUR 62 million. Our EBIT was 10.5% of revenue versus 13.7% previous year. Decreasing a bit. Yes, there's a delay. Sorry about that. We have gotten to profitable growth track. We have been growing our revenue steadily, and we have been about reaching the 10 times more revenue level in 10 years with sustained profitability. 2020 was a record year for us, and now the first quarter 2021 revenue pillar is about the same size as in 2020. Our aim is to change or at least to even out the historical profitability pattern linked to game launches by taking advantage of the multi-project operations. We have been able to increase our headcount despite the pandemic situation from 266- 281 persons year-on-year, so by 6%. That surely affects personnel expenses level. The largest difference in cost base came from a technical change of bonus accrual method. We accrue full year bonuses quarterly based on time elapsed, this affected our EBIT by EUR half a million negatively compared to the old method. If we would have continued with the old model, our EBIT would have increased by 26%. We also continued to expand our utilization of external development, we still invest in future, and that shows in increased CapEx, increased by 36%. The majority of our CapEx is product development capitalization. As a reminder, it's essential for video game developer, and also like Tero mentioned, to ensure on portfolio level smart partnering structures. For self-publishing, there is no need to share the revenue with the publisher, but the risk is higher. On the other side is subcontracting, which involves lower risk, but the return is also limited. It's still good business. In between these two models, there is this own IP partner publishing model, where we currently have projects with 505 Games and Epic. In those, the IP is owned by Remedy, and we share the investment and returns with the publisher. Partnering terms affect our growth and profitability in a significant manner for years to come. In this illustration, you can see as I'm clicking through how different game and partnering models build up growth and EBIT. This describes one realistic future scenario for us, and with a big hit game, this picture is even prettier. We do have a lot of future potential, especially now when we have an excellent cash position to finance the growth. Thank you very much. Now back to Tero. All right. Thank you. Just to conclude the presentation part. After this small delay. Yes. The outlook hasn't changed. We continue according to our long-term plans, and the aim is to launch at least one game or game expansion annually. We are expecting that CrossfireX and CrossFire HD will be released by Smilegate, Tencent, and Microsoft during 2021. Overall, at Remedy, we are expecting 2021 to be a good year, our revenue and EBIT to grow. It's still good to say that this has now been the first three-month period, and we are expecting that the majority of the 2021 growth will happen in the second half of this year. That's it from the presentation part, and next I see that we have some questions. Thank you, Tero and Terhi. Some instructions for the questions. The speakers will now take questions from the investors, analysts, and media representatives. If you have joined the session from the Zoom web interface, you can type in your questions by using the Q&A tool, or you can request a speaking turn by clicking the Raise Hand button in the Zoom controls. If you have dialed in and have a question, please dial asterisk nine to request a speaking turn. Now let's take a deep dive into the questions. The first one is, what was the main driver for the strong operative cash flow considering that EBITDA was slightly down? I can take this. In short, the reason for the more positive operative cash flow compared to the last year was the timing of the payments overall. There is a big variance, especially from quarter-to-quarter in when do we actually then receive the payments. There is also a smaller effect due to the fact that, as I mentioned, we booked more bonuses to our costs than in a previous period, which affected then the EBIT. We did not pay the bonuses in a different way. We just are accruing them in a kind of, let's say, more precise accounting method. Thank you, Terhi. The next question, can you open the employee split between different game projects? We cannot open it up in detail, but it's now clear what we have said also that the projects with Epic, the bigger one is soon proceeding into the production phase. The smaller one is already in full production phase, the headcount on those projects altogether is high. We have continued the collaboration with our partner, Smilegate. When we look at the first three-month time, of course, when the focus has been especially on the upcoming launches, we haven't needed the full production personnel in those projects. In a way, there have been people, but it's not in comparison to the Epic projects. Control has been on the phase where there hasn't been major new development into the game. It's rather been supporting the launches in the new platforms. With Control, we can also use more external development. As we now have said, most of the people that have been working on Control have now already moved on. When we look at the other ones, Vanguard has been progressing steadily, but it's been a bit over 25 people during this first three months time that we have said already earlier. Then we have the one new game project which has been mentioned that has now been started. As that is very early phase, it's still, I would say, a small headcount that we have in that. Okay, the next question. How much were the costs of the direct share issue? The costs will be disclosed in our first half year report. With these business previews, we are not disclosing that detail level of finances. Okay, what platforms are there still left for Control to expand on? I can't say exactly what those are because, of course, we want to utilize those as marketing beats with our partners once they will be announced. As I said in my presentation, the market is changing and growing all the time, and there are selected, especially streaming and subscription services that have been developing. Overall, when we look into the future, we believe that these type of services will provide expansion opportunities. If I, in a way, go bit deeper, they are of course long-term investments in a sense that at first the user base will be most likely fairly limited. They do provide certain sales opportunities still, but one of the things also is that case by case, we are evaluating the business cases. Control, for example, is a high-quality game. Many of these service providers are not only eyeing Control for the sake that how much could it sell, but they do need high-quality content in order to attract users. For them, potential early phase big value is on the marketing value, is on the user acquisition. That then for us provides an opportunity for different type of licensing deals, business-to-business deals, which of course are kind of welcomed, but it's a different model than would be normally thought. The other thing is that there are also services that might provide, in a way, limited time free offers. Those, of course, then normally will include certain licensing and one-time fees. They might include also longer term, in a way, business-to-business revenue possibilities. There is also the additional part that with bigger user bases, the awareness on Control keeps on growing, the virality among gamers keeps on strengthening, and this virality when your friends are playing and talking positively also indirectly then supports the sales of the game also in other platforms. Okay, a question for Terhi. In what quarter were the bonuses paid earlier? That is, what quarter should see a positive effect from the changed payment timing? Yes. Well, the payments have not changed. We have been paying the bonuses of either once or twice a year, and that's then visible in the cash flow and not in the EBIT. This change is related to accruing the costs and then affecting the EBIT. With this new method, they are more evenly out split throughout the year, so throughout the quarters. In previous method, they were more pushed against those periods when we were also gaining the profits. That is, in a nutshell, the change. Okay. What is the typical model for free-to-play? Should it be EBIT breakeven in year one? Well, the market is changing. There are different type of channels. Partly, this also always depends on the platform where one is going. There isn't, in a way, black and white answer that what's the typical launch model and when should the game be breakeven? Overall, the business cases for long-term services and free-to-play games like Vanguard, they have a much longer lifespan that we are thinking about. Normally for AAA games or products, the expectation is that the breakevens would happen faster. There is, in a sense, typically in free-to-play games, a longer time period. Another thing that makes it bit hard to say exactly when is a breakeven expected, because for many free-to-play games, it's even difficult to say that when is the actual launch happening. Typically, these games go to a closed beta phase, open beta phase, then to potential early access phase, then they stay there for a long time. The monetization mechanics are not always included in the very early phases, but they can be. Overall, the games also start being available for the public in different phases, and the monetization systems are activated in different phases. Having said that, the good thing is that typically when a game launches, when this type of service-based game launches, in a way, of course, if it's not yet opened to a big audience, also some of the live operation costs in the early phases are not yet that high, so that needs to be put into equation. Then, of course, if everything is good and game is really attractive, often with these multiplayer service-based games, the user base may start to build quite fast. When we look this from our point of view, we know that we have something unique in the making. It's now showing good progress. We are really happy with the progress. It's still early phase, so as I said, in a way, we have been steadily growing the team. It's bit over 25 people. We are progressing, but we are not yet in the production phase with Vanguard. We have said it earlier that we still consider it to be in the early phase. When we continue with this progress, of course, we know that the game can have good potential. In that sense, in our internal business cases, we know that a successful game should, in a way, be profitable rather sooner than later. In that sense, yes, we need to put in bit more time than we normally put for our AAA games, but the time cannot be too long. A question regarding the release schedule. Are the 2021 releases you referred to including both CrossFire projects, or should we expect any other releases, for example, the smaller Epic project? We have only communicated so far that the CrossFire projects are planned to launch. Overall, when the time is right for the other games and when the potential launches will come, those will be agreed with our partners. Hopefully, once we one day inform those, it's going to be a big marketing splash. In a sense, even though I know that it would be a very valuable and interesting information also for investors, we are still operating in a very noisy and crowded marketplace where consumers have so many alternatives where they can put their time and money. Typically, when we start announcing something new, that marks the start of a bigger marketing campaign, which is planned to lead into the launch. Once we start it, we need to be able to keep the momentum up. That is one of the reasons why all this type of interesting pieces of information also for the gamers are saved for the start of the marketing campaign. When will those happen? In a way, I hope that you will notice those in the media once it happens. Okay, the final question. Do you see Vanguard as a project where Remedy potentially has the needed capabilities to publish the title without a partner? We have said it in our strategy that one of the intentions in our new strategy, and which we also strengthened with the capital raise, is to move towards self-financing and self-publishing. We have also said that it's not going to be a black and white change, that we would change with all of our projects from the current model to this model with all the games. With selected ones of our games, we will continue working with world-class partners. With some others, we will go towards self-financing and self-publishing. Of course, internally, we have a certain idea what these games could be. At the same time, the idea is not to only go towards self-publishing and self-financing. The idea is to find the optimum ways how we can maximize, how we can create excellent games, keep the motivation of our people, and create the maximum long-term value for the company. That then requires that we consider game by game that what is the right model for that game for the long-term value creation. Then we need to consider that what type of business deals would there be available, what type of game are we talking about, what type of competencies are missing, who are the partner candidates, what could they bring into the table? That's also then one part which we are all the time having, that we have excellent relationships to all the kind of relevant potential partner candidates. Even though we wouldn't have a game to present to them, we are keeping a constant connection with these parties, understanding what might be the strategic priorities for them, having doors open to discuss on our upcoming games, to understand what would be the partnership options, and then not just compare these options, but compare these options with the potential to self-publish some of our games. This is a long-term play for us in a way. We are building a long-term profitable growth company. We are not in a hurry to decide which is exactly the game that we should self-fund and self-publish. We now know that we have the possibilities to do that basically with any game that we have, but we are all the time evaluating the options and seeing what is the right game, what is the right model for the value creation for that game. In that sense, in a way, Vanguard is one potential candidate, but we also know that there are going to be good partnership options for Vanguard. In that sense, in a way, I would say, as I said earlier, that we are in a really good position that we can choose what we will do, and we are not in a hurry. We will then later inform what the decisions are when we have done all the evaluations also for Vanguard. Thank you, and thank you for watching this webcast. Thank you, Tero and Terhi, for presenting and answering the questions. I hope you all have a very lovely springtime and summer. Thank you.