Welcome to the Fractal Gaming Group Q4 2023 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound five on their telephone keypad. Now, I will hand the conference over to the speakers, CEO Jonas Holst and CFO Karin Ingemarson. Please go ahead. Hello, everyone, and welcome to today's presentation of the Q4 report for Fractal Gaming Group. As the newly appointed CEO of Fractal, this is the first time that you meet with me in this forum. However, I've been with the company since June of 2022 as VP Global Sales, so I'm well into the operations and business. Today, we are happy to present our latest quarterly report to you, and by that, summing up 2023, the strongest year in Fractal's history, both looking at revenue and profitability. We're going to walk you through the latest development within Fractal and our industry, and we're, of course, happy to answer any questions that you have after the presentation. We will start with some highlights from the Q4 report. Sales increased 1% year-over-year, measured in both SEK and USD. The lower growth compared to previous quarters are primarily due to higher comparable numbers, starting from Q4 in 2022, and our efforts to normalize the channel inventory following the strong previous quarters of last year. With Q4 in the books, we have closed a record year for Fractal, with a revenue growth in SEK of +59%, 4% points higher product margin, and a strong bottom line profitability. We have seen good results from our strategic growth initiatives and are growing significantly more than the market in all regions. Sales out revenue in Q4 increased by 11% year-over-year, reaching the highest level since 2020. The difference in sales in and sales out growth is explained by channel stock dynamics, and we closed the year with channel inventory levels that are in line with our targets. The strong growth and increased market shares during 2023 is primarily driven by successful product launches such as North, Pop, Ridge, and Terra, that further cemented our position as the leading brand for the design-conscious gamer. Increased business with key partners such as Amazon and success with our Fractal Content Creator program are examples of sales and marketing initiatives that have favored us further during the year. EBITDA in Q4 were at the same levels as last year, at 13 million SEK, with an EBITDA margin of 8.8%, compared to 9.4% last year. Our product margin improved year-over-year to almost 41%, compared to 37% last year. Despite negative exchange rate impact and driven by COGS saving initiatives that continue to give us positive effect at the same time as shipping rates continued on a low level. We had a weaker operating cash flow in the quarter, but closed the year with a net cash position of SEK 8 billion, compared to a net debt of SEK 116 million by the end of last year. Now, moving over to market development, where we have seen some interesting trends and shifts in the market during Q4. Total PC market saw growth of 5% compared to Q3, and this is breaking a two-year negative trend. It is now expected that PC deliveries in total will increase 8% compared to 2023, and we see AI computers, for example, making up 19% of the total system sold and supporting this growth. This general growth in the PC market is a positive sign for the gaming market in particular. The computer hardware sales in Q4 was also boosted by strong games launches, such as Call of Duty: Modern Warfare and Alan Wake 2. Another indicator for market growth is the significant uptick in gaming engagement in Q4, such as viewed hours and active players on Steam. This is despite a slight annual decrease on the Twitch platform. Finally, we see strong growth in the global gaming consumer base, with 6.4% growth to now over three billion gamers worldwide. It is believed, still that many of these will need to upgrade their systems during the coming two years. And now, moving over to financials. So, Karin, please go ahead. Thank you, Jonas. The graph at the top shows the development in net sales. The last quarter of the year had, as we predicted, significantly lower growth compared to previous quarters during the year, and net sales increased by 1% to SEK 143 million. We also measure our sales in U.S. dollar, as we sell exclusively in dollars, regardless of the end market, and the organic increase in the fourth quarter was 1% to $13 million. The slowdown in net sales growth was a result of the strong sales to our sales channels during the first nine months of the year. During the fourth quarter, we worked to ensure that inventory levels were at balanced level, which will lead to net sales and sales out being more in line coming quarters. In the graph at the bottom, you can see our quarterly development in sales out that distributors and resellers report to us measured in dollars. We had a really strong sales out during the year, and in the fourth quarter, sales out increased by 11% organically, with an increase in the case category of 18% and amounted to $18 million, which was the strongest sales out number since the fourth quarter of 2020. The strong sales out is a result of successful product launches, and we have a really strong product portfolio. Case series North, Pop, Torrent, and Terra were among the best-selling products during the quarter. Sales out has been on a high level during the last five quarters, and the level is the highest in over two years, which again shows the great interest in our products. Looking at the full year, 2023 was the strongest in Fractal history, with a net sales growth of 59% to SEK 773 million, and an organic growth of 52% to $73 million. The first three quarters were particularly high, with the second quarter being at an all-time high, with a net sales of SEK 245 million. We are growing significantly more than the market and attract new customers, which is a clear proof that we have a strong and distinctive offering to our customers around the world. Moving on to the next slide and segment development. The strongest region in the quarter was Europe, with net sales of SEK 63 million, an increase of 29% compared to last year. Europe's share of total sales corresponded to 44%, which was an increase of 10 percentage points. Net sales growth in Europe was mainly driven by increased demand from end customers due to several successful product launches and a strong product portfolio, but also a pent-up demand due to Europe being weaker last year. For the full year 2023, Europe more than doubled net sales and had a growth of 113%. This can mainly be explained by strong demand at end customers and necessary stock buildup at retailers at the beginning of the year, and sales initiatives to Amazon Europe have also increased the numbers. Finally, the comparative numbers were low due to high shipping costs during the fourth quarter of 2022, resulting in more restrictive purchases at the distributors. Americas' net sales amounted to SEK 59 million, a decrease of 20%. The main reason for the decrease had to do with strong demand from key partners, as well as more campaign activities than usual in the fourth quarter last year. Americas' share of total sales corresponded to 41%, which was a decrease of 10 percentage points. However, the historical number has been around one third of total sales. Net sales in APAC and Other amounted to SEK 21 million, a growth of SEK 1 million, from 5%. Their share of total sales was 15%, which was in line with last year. If we look at our product categories, sales of cases were 91% of total net sales, same level as last year. Moving on to the next slide and product margin development. In the fourth quarter, the product result amounted to SEK 58 million, compared to SEK 52 million last year, and the product margin was 41%, which is approximately 4% points better year-over-year. The reason for the improved product margin can mainly be explained by lower shipping costs, which affected the product margin by approximately 5% points, mainly due to lower shipping prices, as well as lower share of sales to Americas. It is only freight cost to our regional inventory in Americas that affect the P&L. Sales discounts had a positive effect by 1.5 percentage points. Currency effect had a negative impact on the margin by approximately 2.5 percentage points, mainly due to high comparison figures in the fourth quarter of 2022, when the dollar strengthened against the SEK. The positive margin development during the quarter is also driven by lower purchase prices, affected by lower raw material prices and successful negotiations with our suppliers. But we have also been able to make some price increases for many of our products. Let's have a look at next slide and earnings. In the fourth quarter of 2023, EBITDA amounted to SEK 13 million, and the margin was 9%. The slowdown in sales growth led to lower EBITDA compared to previous quarter 2023, but in line with last year. The strong net sales growth during the year, combined with a higher product margin, means that for the full year 2023, we deliver an EBITDA result of SEK 137 million, the strongest in Fractal history, compared to SEK 34 million previous year. Moving on to the next slide... Operating cash flow in Q4 was SEK -56 million, and the decrease compared to previous quarters can mainly be explained by lower EBITDA and decreased accounts payable related to payments of product purchases made earlier in the year to meet the increased sales. Payment terms to factory suppliers are long and favorable. Cash flow from investing activities amounted to SEK 11 million and was related to the development of new products. For the full year of 2023, operating cash flow strengthened to SEK 132 million, positively affected by increased EBITDA and working capital. We are very satisfied with the development of the cash flow, and this is a result of hard efforts. The strong cash flow will enable us to invest in our continued growth. When closing the fourth quarter, the utilization of the bank overdraft facility was SEK three million, compared to SEK 110 million year over year. We had net cash of SEK 8 million, compared to net debt of SEK 116 million last year. Moving on to the next slide and the income statement. As previously presented, net sales in the fourth quarter amounted to SEK 143 million, a growth of 1%. The slowdown in growth can mainly be explained by a normalization of stock levels at our resellers. Total revenue amounted to SEK 147 million. Goods for resale amounted to SEK 85 million and were, in percentage of sales, positively affected by lower shipping costs. Other external expenses amounted to SEK 25 million, SEK three million higher than last year, mainly due to increased warehouse costs, explained by higher inventory levels. Personnel expenses amounted to SEK 23 million, an increase of SEK four million year-over-year, and the increase was mainly due to new hirings, which was in line with our hiring plan to be able to meet our mid- to long-term growth targets. Finance costs were lower due to a net cash position and therefore lower interest costs compared to the same period in 2022. Profit for the fourth quarter amounted to SEK 3 million, which was in line compared to last year. And with that, we have walked you through the financials, and I hand over to Jonas again. Thank you, Karin. So to summarize the quarterly report, we close a record year for Fractal following our strong product launches and effective sales and marketing initiatives. Our net sales grew 59% for the full year and 1% in the quarter, following our efforts to normalize stock after three strong sales in quarters earlier in 2023. Our product margin reached 40.8%, up 3.9 percentage points year-on-year, while EBITDA margin increased 10.7 percentage points to 17.7%. We end the quarter, and with that, the year, with a strong financial position that allows us to invest in our strategic initiatives and drive further growth in the market. Looking forward, we see that the uncertainty in the Red Sea that escalated in the end of the quarter has affected the freight costs negatively. This will have some impact on sales and freight rates during, especially the first quarter of the year. For the full year, we see good opportunities for continued growth, with a weaker first half facing high comparable numbers and a stronger second half, primarily driven by our growth initiatives that we believe will continue to strengthen our position in the market. And finally, it's worth repeating that it is our assessment that there is still a pent-up demand among gamers to upgrade their equipment with a stronger upgrade cycle in the upcoming two years. And with that, we are finished with the presentation and open up for any questions. If you wish to ask a question, please dial pound five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound six on your telephone keypad. The next question comes from Simon Granath, from ABG Sundal Collier. Please go ahead. Thank you. Hi, Jonas and Karin. Thanks for the presentation and congrats on your new position, Jonas. Initially, could you talk about the recently intensified agreement that you have with Amazon, and also, if we should see this driving materially higher volumes kicking in here in 2024? First, thank you for your well wishing, kind wishes. Yes, the initiative to work more towards Amazon is an important sales initiative for Fractal and something that has leveraged for us during 2023, especially in the European region, but something that we believe will continue to boost our business from the US, primarily in 2024. Thank you so much. I presume it's not easy to quantify and assess, but you do mention that there is still a pent-up demand for gamers to upgrade their pieces. What's behind the statement, and how should we see the replacement cycle playing out ahead? What's the latest and greatest? Thank you. Well, first of all, looking at the replacement cycle for a PC and especially for gaming equipment, it's about three years or approximately that period, which then takes us back to the previous peak season or sales season during corona times for 2020 and 2021. And we are now seeing that replacement cycle coming back, so to say, or we are in the next step for that. And there is also, during this entire period, it's been an issue, as we know, with the components that has been important for the industry, that has been lack of during this period, which is now fully available, which also drives further growth in the coming years. Very encouraging. And going into 2023, you did launch multiple new products. How's the current pipeline going into 2024? And more specifically, talking about the pipeline for PC cases. You're right. 2023 was a very strong year, or actually, I should say 2022 and 2023 has been very strong years for us. And it's also something that we will leverage fully for the full year of 2024, and we will have a full year effect in the coming year. But of course, our pipeline continues to be strong for all the categories that we are active in. And that definitely also include PC cases. So there should be expectation of, of our practical launches also during the coming year. Perfect. And could you give us an update on the timing for expanding into new categories? Should one see this starting to yield results in H2, or is it more so that we should expect more volumes coming in in 2025? The message regarding the new categories are the same as before. We are targeting an H1 launch for the new categories, but that, of course, means that the key main effect of that initiative will happen during the second half of the year, and again, the full year effect of that will then be in the year after, in 2025. But new categories to be launched during H1 is as we previously communicated. Thank you for that. And just finally, could you elaborate somewhat on the current inventory levels for your resellers? Yeah. Yeah. So as we saw, very strong growth, especially during the first half of 2023, we have also had a need to reset what kind of inventory, channel inventory levels we needed to be at, and that was a continuous work during the last year. And by the end of the year, we have worked on, sort, as we said, normalized that inventory to be on where we want to be, and by the end of the year, we closed, we say, on target. Meaning we're rather not, neither under or overstocked out in channel, in general, looking at the global market. Okay, and, are there any large differences here looking into regions? You do mention on a global basis, but I'm just curious to know if there are discrepancies between regions here in, on inventory levels. No, it's the same if we look at it in general, for the whole world. Thank you so much. That's all for me. Have a nice day. Thank you, Simon. The next question comes from Thomas Tang from MediumInvest. Please go ahead. Thank you. I have a number of questions. Let's go through them one by one. First of all, just to make sure I understand your 2024 expectations correctly. When you say you expect a positive growth for the full year and that the inventory levels are balanced, which contributed positively to your growth in 2023, that means that you expect your sales out to be even stronger than the positive growth for your overall revenue. Is that correctly understood? Yes. We're looking at the full year. So I said we're going out of 2023 with a balanced inventory level out in market, and that means that our sales in and sales out should correspond well, and we are foreseeing then also a sales out growth in 2024. Then for the first half of 2024, you mentioned the Red Sea situation affecting you negatively, and also the majority of the inventory expansion as there was, or all of it was in the first half. Do you expect sales out to be positive in the first half of 2024? Without going into too much details there, I think also the regional or the split per quarter. First of all, on the Red Sea, the Red Sea situation and how that is impacting us, one, it's primarily on a sales team point of view, reducing slightly the need or the wish, willingness to load up inventory, especially in the European region, which is, at this point, not a problem per se, and doesn't impact sales out. And then in second round, it would be versus our freight costs taken for our shipments to our regional inventory in the U.S., where we could foresee a slightly higher freight costs, and that is affecting our P&L directly. But the growth that we are foreseeing, I mean, especially looking at Q1, we are facing very high comparable numbers during 2023. Especially in the beginning of the year. But our overall outlook for the year is a positive development, both in sales in, sales out, but we see that to be stronger in the second half. And could you expand or provide a bit more color on your increased marketing initiatives? What are you doing? Are you doing anything new or doing more of what already works for you? Yes, absolutely. Very important part is to continue on the successful path and track that we are already on. We have a very strong engagement with our community, and that's something that we will leverage on and build further. But of course, during this year, we are, as we've been talking about, launching also into new product categories and presenting what Fractal, our take on the full gaming station is, going to be an important aspect for us going forward, and then continue with all the growth initiatives that we have also on marketing and communication side. All right. And then you already mentioned that the payments for products purchased earlier in 2023 is the majority of the moving parts in the working capital. Are there any other significant moving parts to your somewhat volatile working capital? No, I wouldn't say so. That's a, good understanding as you presented it. All right, and a final question from my side. Could you provide a bit more color on the negative growth in the U.S. in the fourth quarter? Yes, that relates back to the situation back in 2022, and also this inventory situation we had in the U.S. market by then, where we were driving quite aggressive sales out activities during the last quarter, as Karin previously mentioned. So the comparable number there is the main reason, which was previously driven by high promotional activity during Q4 of 2022, compared to more balanced approach in 2023. All right. Thank you. Thank you. There are no more questions at this time, so I hand the conference back to the speakers for written questions and closing comments. Okay. So we have a couple of questions here. First, Carl- Mikael from Herenco. "So tell us about new product launches." We, yeah, as now mentioned here on the previous question, we have a good pipeline for 2024 within the categories where we are active. So that is upcoming during the coming quarters. And then talking about dividend for 2023, we are focusing on securing the growth initiatives and the initiatives that we're driving ahead. So that's the key reason right now. Of course, this is a board decision rather than a decision for the management team, so I will need to forward further questions on that to them. And then to Karin, "Why finance cost was high in Q4? Yeah, and what you're saying there, Carl- Mikael, is that we don't have any loans, so why do we have SEK 2.7 million in cost? And it actually has to do with the revaluation of the amount that we have on the bank account. So it's an effect of the SEK dollar effect, more or less. So that's the answer. Then we have a question early on from Ludwig: "What makes you confident in strong sales development during 2024 and mostly H2?" As mentioned, we have strong pipeline for our product launches and the growth initiatives that we're driving for the full year, together with the market development in general. Further questions, yeah, the strong product pipeline. So question regarding new chassis, yes, it's also part of the product roadmap. Then in Q3, you said that you thought the sales out would match your sales going forward, but it deviated by 25%. Did something happen during the quarter? Not more than what we have just gone through here, I would say, on that question. Then from Max: "Regarding the expanded distribution with Amazon in the U.S., what's the rationale here, and how much do you think this will add in comparison to existing distribution?" Yeah. As I mentioned earlier, regarding Amazon, we have... It is one of our important sales initiative to grow with that platform. It's not only a sales platform of choice, it's also a communication platform for many customers. So, it is important to be there and to grow not only in Europe or U.S., but around the world, of course, in all markets where Amazon is present. Then, "Can you explain the logic behind how your exchange rate movements impact your gross margin?" Karin, maybe you want to take that? Yes. So can you explain the logic behind how FX movements impact your gross margin? Well, when we do the purchases, we do all our purchases in U.S. dollars, and we sell only in dollars. So to start there, we have a natural hedge. So what's happening is that we buy to an FX rate, and we sell to another, and there in between, we get an FX effect. So that is the effect, more or less, so why these occur. I hope that explains your question. Thank you, Karin. We have another question from Erik at SEB. The difference in net sales versus sales out is about SEK three million in 2023, and whether it's fair to assume that this gap will be closed during H1. I think, as the message before, that we are expecting sales in and sales out to be matching during the following quarters or period that we have ahead. And regarding the new products, whether we would go through existing channels, we will come back to that, I would say when we're looking at what channels and products we are launching. And yes. Final question, I'm not sure if I answered the question from Mikkel, but if so, I'll do it again. Sequential sales out did not grow as much as historically from Q3 to Q4. Could you explain that? So our growth, and first of all, 2023, 2022 Q4 was the first quarter of that very high growth that we had. So the comparable numbers changed very much from 2022 Q4. So we are sort of comparing them to a different level, and that's the main reason why the growth in Q4 is not the same as the growth in Q3, essentially. And I believe I've given color on the weaker H1 here, and especially that is due to the comparable numbers that we are facing, and that we will see strong effects during the full year from our sales and marketing and product initiatives. Regarding EBITDA margin, and that's down sequentially, and what EBITDA margin should we expect going forward? We, maybe, Karin, it's a question for you. Yes. So, the EBITDA margin, I mean, our financial target, is 20% EBITDA margin, and sales growth of ten percent. And, the EBITDA margin did not reach the 20%, but that is, of course, our target to do so. So I don't know if I can say more than that, at the moment. So, I think I leave it there. But 20% is our financial target at the moment, so that is what we're aiming for. Thank you, Karin. I believe that was all the written questions as well. There are no more questions at this time, so I hand the conference back to the speakers for closing comments. Yes. With that, we thank you for joining today's call and listening into the Q4 and report for Fractal Gaming Group and our 2023 record year. We wish you a great rest of the day. Thank you so much.