Thank you operator. Good afternoon everyone, and welcome to MTG's interim report presentation for the fourth quarter and full year 2020. I am Lars Torstensson. I'm CFO at MTG. With me today I have our Group President and CEO, Maria Redin. We will begin presenting the quarter and then take your questions in a short Q&A session. Please keep in mind that only dialing participants can ask questions. With that said, I'm now handing over to you, Maria, to take us through the quarter. Thank you, Lars, and welcome to everyone joining our conference call today. Before addressing the quarterly results for our fourth quarter and the full year 2020, I'd like to turn to our team members in the Group. In mid-February last year, the new virus in South Asia rose to become a significant factor for societies all around the world. Companies as a part of those. We were, as most companies, certainly rocked when the pandemic hit, and I'm certainly very proud of how quickly we managed to regain our footing thanks to the impressive and hard work from the whole Group working as one team, and how we ambitiously stayed on the course and delivered on our operations and our strategy for the rest of the year. It has truly been a dynamic year and a challenging one, but we're coming out of this stronger than we were one year ago. With that said, I would like to take you through our presentation, so you can turn page. If we start to look at the highlights from the quarter, on a group level, we continue to show good operational performance and high profitability as we report our final figures for the full year and Q4 2020. It has been a challenging but a transformative year for the company, and we're very happy to be able to conclude the year with a record high profit for the full year. On the esports side, due to postponements for the quarters earlier in the year, the fourth quarter was intense with six multi-property events delivered by ESL Gaming, which together with good cost control resulted in a positive adjusted EBITDA. The gaming vertical delivered a robust quarter, rounding off a record year, and we made several strategic initiatives to both diversify and strengthening the portfolio. The forming of a new gaming investment holding company, an ownership increase in InnoGames, and the acquisition of Hutch, and our most recent acquisition to the group. As we now progress into 2021, our strategy lies firm, and we are well-positioned to continue to deliver on our buy and build strategy. If we then move into the esports part, as we said already in Q3, we consciously chose to postpone a number of marquee property events to our fourth quarter in order to mitigate the risk and give the best chance for our marquee properties to host studio events with the teams present. The quarter was indeed busy with a total of six marquee property events, which was delivered successfully as online productions. Among these were the ESL Pro League in October, IEM Beijing in November, and the DreamHack Masters Winter in December. Following our intense event schedule and the heavy weighting then of our events to the Q4, our organic net sales of owned and operated properties remained stable year-over-year, though with two more multi-properties compared to last year and two less open. The esports services net sale decreased in the quarter by 42% due to less esports initiatives amongst the publishers, a direct result from the ongoing pandemic. For us, the focus in ESS remains, and it is to establish more strategic publisher relationships, and we have executed some important events on behalf of publishers such as Epic Games and Psyonix to highlight a few in the quarter. To also bring up some of the strong performance in the quarter, ESL Pro League stood out with a very strong engagement from our fans, resulting in several viewership records. Amongst other, the competition set a new all-time peak of more than half a million concurrent viewers, and the number of watched hours rose to 89 million across both seasons, which is an increase of 129% compared to 2019. We're very happy to see the sustained strong support of the fans despite the pandemic circumstances and online broadcast. DreamHack Sports Games rounded off the year with the execution of the Superliga finals. We're also excited to see the continued interest from traditional sports leagues to complement the leagues with esports counterparts. Just yesterday, we announced the four-year esports cooperation between DreamHack Sports Games and the NHL, and earlier today we entered into an agreement to produce the Swedish eAllsvenskan Football League. Travel and aviation restrictions in place to fight the coronavirus pandemic has meant the competition between teams based in the U.S., Europe, and Asia has been on halt for the vast majority of 2020. We're therefore very happy to be able to, in the Q4, reintroduce cross-Atlantic and multi-continent esports, although still in an online format, but it drives engagement. We also continue to see mobile esports as a key growth area. In the quarter year, ESL Gaming expanded very successful mobile open esports formats to also cover the Middle Eastern and African region. The extended ESL Mobile Open 2020 concluded with a year-on-year growth of 24% compared to 2019, with well over 1.5 million players battling it out on titles such as Asphalt 9, Auto Chess, PUBG Mobile, and Clash of Clans. During the quarter, we've also seen a very strong growth in active players and play time for our B2C tournaments platform, ESL Play, as well as our Minecraft client, Bedrock. The ESL Play growth has primarily been driven by the PlayStation integration and the amateur tournaments in titles such as FIFA 21 and NBA 2K21, which were both released during the fall. Looking forward on the operation of our esports quarter going into 2021, visibility do remain decreased due to the pandemic circumstances that continue to have an impact despite promising developments on the rollout of vaccines. We've taken the decision for 2021 to host the majority of ESL and DreamHack tournaments as in-person competitions, but from a controlled studio environment. ESL Gaming has announced a busy first schedule for 2021 with digital and studio production, while uncertainty remains due to this pandemic circumstances, we are scheduled to host several live audience events again in the second half of the year, which we look forward to. We do expect this momentum to continue to impact our esports operations in cooperation with established and new commercial partners. We're very focused on driving growth for 2021. While we continue to look forward to being able to host live events again, we're proud of how ESL Gaming has adapted to the new circumstances and continue to do so. As we speak, ESL Gaming is hosting the IEM Katowice as an all online digital format in both CS:GO, StarCraft II, and with Warcraft III competitions, which held now and runs until early March. Moving on to the gaming vertical. Our gaming vertical showed good progress in the quarter with strong performance from InnoGames, driven by Forge of Empires. We saw the commercial launch of Teenage Mutant Ninja Turtles by Kongregate, and equally important, our new games pipeline to be launched in 2021 progressed according to plan. InnoGames performance in the quarter showed solid underlying growth, primarily driven by Forge of Empires on the back of several well-executed in-game events and campaigns around the holiday season. In the quarter, browser overtook the lead driving growth over mobile for InnoGames. We see this as a temporary consequence from the pandemic impact, mirroring the changed behavior in light of recommendations to work from home across many markets. That we're able to retain players despite changes in behaviors across platforms showed that InnoGames titles are great, both on mobile and played on browser. Kongregate showed stable progress in the quarter, during which new title Teenage Mutant Ninja Turtles was launched. Underlying net sales were decreased, however, due to the discontinuation of two third-party publishing titles late in 2019. As for our gaming KPIs, ARPDAU showed a year-over-year growth of 11%, driven by continued high engagement among our fans, and thanks to already mentioned good in-game campaigns by InnoGames. The sequential decline in ARPDAU was more related to the number and the size of events held in Q4 versus Q3. The DAU and MAU decreased compared to the same period last year due to Kongregate, that was adverse impacted by the removal of two third-party games. This effect was partially offset by the launch of first-party titles. InnoGames, on the other hand, had decreased DAU, supported by continued strong user acquisition momentum. As we touched upon in the previous quarter, we're excited about our new gaming vertical's pipeline for 2021. As of today, we have up to three new InnoGames titles planned for launch in different stages during 2021, with the first is being soft launched as we speak. Further, Kongregate and Hutch are respectively preparing launches of a new IP playing out in the popular SpongeBob SquarePants universe, and a new exciting mobile racing title named Puzzle Heist, respectively. Following the acquisition of Hutch in December, we initiated the onboarding. We expect to see the consolidated figures to be included in MTG's financial reporting starting January 2021 and onwards. Moving on, the quarter saw us executing a number of strategically important initiatives. On December 7th, we announced that by utilizing our options in InnoGames, we increased our ownership by 17%, up to 68%, further developing our relationship with the company. As a part of the transaction, we also formed a new jointly owned holding company with InnoGames founders for current and future gaming investments. The cooperation between MTG and InnoGames has created considerable value for both parties over the years, and sets a good example on how we want to partner with founders of stellar gaming and esports companies. We join the vision for long-term perspective. Following the formation of the gaming group, we acquired Hutch Games. To finance the acquisition of Hutch, we also announced a rights issue, inviting all our shareholders to support our continuous M&A agenda. Looking forward, I can conclude that going into 2021, we have a more diversified portfolio of games and a very strong new games pipeline which is progressing according to plan with several titles across different genres scheduled for soft and commercial launch later in the year. InnoGames and Kongregate, with a range of established and proven IPs and titles ranging from city-building and the idle category, is now complemented by Hutch portfolio with titles in the earlier growth trajectories. Through the acquisition integration of Hutch, we do not only add strong titles and IPs, but also considerably diversify our gaming portfolio with the addition of the mobile racing as a genre. We begin 2021 with a number of soft launches backed by increased marketing. These new games are expected to start positively impacting our gaming vertical in the second half of 2021 and more so in 2022 on back of successful launches. With that said, I hand over to you, Lars, to walk us through the financials. Thanks, Maria. As you have concluded already, overall a good year from an operation perspective despite the ongoing pandemic. As we have touched upon before, our verticals have experienced different realities. While gaming vertical has been operating from an elevated level, our esports vertical has been adapting to a situation where offline events no longer is possible. Independently of specific circumstances, both verticals have delivered above our own expectations in Q4 and full year 2020. With that said, let me go through the P&L in some detail. The esports vertical had an intensive event schedule, driving a sequential recovery in the quarter. Compared to the same period last year, the underlying net sales was down by 13%, negatively impacted by mainly offline events moving online due to the pandemic. The gaming vertical grew underlying net sales by 4%, driven by InnoGames and a continued high engagement among the gamers and successful in-game events throughout the quarter. Worth noting is that the amount of in-game events for InnoGames was slightly lower in Q4 compared to Q3. That is a result of seasonal phasing. This, in turn, had a temporary adverse sequential impact on ARPDAU in the quarter. Adjusted EBITDA grew by 130% year-over-year, with an improved performance in both verticals, combined with lower central costs. This was partly thanks to higher sales and more normalized marketing levels in the gaming vertical, and partly due to the esports vertical's adjusted EBITA improved significantly versus last year, thanks to more events held and more efficient operations on the back of online studio formats. In the wake of the ongoing pandemic, we continue to deliver on our savings target with more than SEK 240 million in lowered cost in the quarter, primarily through additional COGS savings related to online events rather than offline events for our tournaments. The improvement in adjusted EBITA is not only about COGS savings, it's also about the amount of marquee properties held in a specific quarter. To be more nuanced, it should be noted that the intensity of the event schedule will also impact the performance of an individual quarter due to the fixed cost of the vertical. The second half of 2020 is a good example of that, and the difference between a light event schedule quarter, see Q3, and an intensive scheduled quarter, see Q4, and what that means for operational leverage in the esports vertical. With that said, the EBITA adjustments in the quarter amounted to SEK 33 million to be compared to SEK -207 million last year. Some of you might have noticed that the cost for long-term incentive plan/management incentive program was reversed in the quarter. This was the result of an end-of-year adjustment following the conclusion of the full-year result in gaming vertical in general, and InnoGames in particular. Also, M&A cost was impacted by the acquisition of Hutch, included a stamp duty on the transaction. Depreciation and amortization in the fourth quarter amounted to minus SEK 68 million and included amortization of PPA of SEK 24 million. Amortization of PPA was lower compared to last year, mainly related to the Kongregate acquisition, which is almost fully written down. Excluding PPA, depreciation and amortization decreased by SEK 9 million, mainly as an effect of larger write-down in the gaming vertical in fourth quarter 2019, resulting in a lower base. Net financial items amounted to SEK 51 million, mainly gains from financial assets, revaluation of the VC fund, and unrealized exchange gains. Worth noting once again is that revaluation of the VC fund happens in conjunction with new financial rounds being completed, or if existing shareholders sell to new shareholders, indicating a higher or lower valuation. Finally, the group tax was minus SEK 77 million, predominantly reflecting the increased result in the gaming vertical and InnoGames. Let's move on to the cash flow statement. On the back of the strong financial performance of the group, we report an improved net cash flow from operations of SEK 54 million, driven by InnoGames, also thanks to improved operational performance in the esports vertical on the back of the mentioned intensive event schedule. The relatively large delta in working capital between Q4 2020 and 2019 was mainly due to a large tax payment related to InnoGames in fourth quarter 2019. Additionally, InnoGames received an early payment by one of the distribution platform owners, having a positive impact on working capital in the quarter. In the quarter, we closed the Hutch transaction that was financed through a combination of bridge facility amounting to SEK 1.8 billion cash and shares. Even though not part of the quarter, the takeout of the bridge was conducted through a rights issue that I will come back to on the next slide. Additionally, we invested SEK 17 million in the VC fund and the CapEx amounted to SEK 42 million in the quarter, mainly related to the gaming vertical, but also small investments into our B2C offering in the esports vertical. As a result, the net change in cash and cash equivalents from for continuing operations amounted to minus SEK 390 million. That led to the group having a net cash position of SEK 1.2 billion as of Q4 2020. Gaming continues to be the cash flow contributing entity. Let's move on briefly to summarize the concluded rights issue. As part of financing the Hutch transaction and increase ownership in InnoGames, MTG conducted a rights issue as a takeout in the first quarter of 2021. Following EGM publication of prospectus, trading update, and the mandatory investor interaction as part of the process, we could conclude a successful and significantly oversubscribed rights issue providing MTG with proceeds of more than SEK 2.5 million, before deduction of transaction cost. As a result, we repaid on the 17th of February the bridge facility of SEK 1.8 billion. We are, of course, very pleased to have received such strong support from our shareholders in both the rights issue and for our strategy. That concludes my financial review. Any questions you might have, I will be happy to answer as part of the Q&A. Back to you, Maria, to conclude. Thank you, Lars. To summarize on the fourth quarter, despite the very challenging year that has been 2020, with the uncertainty and the volatility created by the pandemic, I'm pleased to be able to say that we are stronger as a group today than going into the year. We delivered solid operational performance and high profitability, and we have a strong position to continue to deliver on the back of our strategy, developing what we have and remaining on the outlook for the relevant and attractive M&A targets for 2021. Despite the ongoing rollout of vaccines bringing hope of normalization for societies and industries, we expect that the pandemic will continue to impact our esports business also in 2021. The pandemic circumstances continue to mean low visibility and increased uncertainty. With that said, we do look forward to introducing studio events in the first half of the year, and hopefully also host live audience events in the second half of the year in 2021 once more. In the meantime, we've proven that our esports vertical can produce and distribute world-class digital-only events, and create attractive audience and content for our fans and our commercial partners. The forming of our new gaming co and the addition of Hutch also means our gaming vertical stands stronger, more diverse, and with a broader range of IPs and titles spanning more genres and growth stages. With the rights issue we concluded, we are also enabled, through the support of our shareholders, to continue to deliver on our strategy and maintain the high focus on M&A activities from 2020. With that, we're closing 2020, and I thank you very much, and hand over to you, Lars. Thank you, Maria. That concludes the formal presentation of our fourth quarter and full year report. We are now ready to take any questions that you might have on the report or the conference call presentation. Operator, if you can help us to gather the first question, please. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Tom Singlehurst of Citigroup. Please go ahead. Your line is open. Hey, Maria. Hey, Lars. Thank you for taking the question. Tom Singlehurst here from Citigroup. A couple, if it's okay. Maybe just starting with broad outlook and the shape of the year. I'm conscious you haven't committed to any firm targets in terms of growth or profitability, but I suppose just building on your comments about gaming, you mentioned you anticipate the contribution from launches in the second half and running into 2022. Obviously, on the esports side, you're also talking about physical events coming back in the second half. Should we anticipate the first half as still seeing revenue pressure across the whole group? If you can maybe comment on the aggregate outlook, if you can, and the phasing of growth 1H, 2H. That was the first question. Maybe if you start there and I'll kick in with a follow-up, if that's okay. Thanks, Tom, for the question. As you concluded yourself, we don't provide any formal guidance. I will hand over to Maria to elaborate on your question. Please, Maria, if you could answer Tom's question. Yeah. Hi, Tom, thank you for your question. I think what we have said and what we don't want to do is provide guidance. Of course, what we want to do, and when we look at the full year 2021, our focus is drive growth. We want to drive growth both organic and inorganic, and that's the strategy we set forth. If you look at on the organic side, we're very excited with the game launches that we have coming up. Five on the gaming side, three in Inno, one in Hutch, and one in Kongregate. That will, to your point, drive marketing investments. We are starting with the first soft launch as we speak, and then they will gradually roll out now predominantly in the first half. That also means, of course, that the revenue buildup of these new titles will come in the second half of the year and predominate into 2022. Then it is important to remember, we said that also in last year Q2, that of course, we did see on the gaming side significant increased activity levels, and that was predominantly coming from new registration back on the increased marketing activities that we can do, given the high ROAS levels that we enjoyed during Q2, and also reactivation for old customers, and that's something you should bear into mind when you look at the gaming quarters and the seasonality effects. For the esports, visibility is unfortunately low. We would have hoped that the vaccine rollout would have gone faster, but we are where we are. On the good note, I think that with ESL and DreamHack, we've managed to entertain our fans and the community in a very strong way in online formats. We believe that we can reintroduce studio formats now in the first half of the year, and then hopefully progressing into live audience events in the second half of the year. One thing to bear in mind as well is that when you look at the year-over-year comps for Q1, last year, we actually managed to execute most of our events. It was actually about this time last year when we had to execute the Katowice event without an audience. That is something to bear in mind. Our focus remains very clear on driving growth for the full year 2021, both organic and then to add further acquisitions ideas. Perfect. A couple of follow-ups, one on esports and one on gaming. On esports, the question is around digital and hybrid. Actually, the fourth quarter owned and operated performance. That stable year-on-year is absolutely fantastic if we think about the pandemic. I suppose the question is, when things do get back to normal, is there more of a demand for studio-based events and sort of digital-only formats, or is there a sort of hybrid model that net will end up being additive? That's the question on the esports side. Then on the gaming side, obviously you talked about the organic launch, but it feels like M&A is going to be an ongoing part of the story. The question is, you've got obviously the sort of combined holding company in gaming, which is great. I'm just interested on whether the InnoGames minorities have a blocking stake when it comes to doing more deals, and from a mechanical perspective, how deal flow works with, as I say, the InnoGames minority in place. Thank you. As I understand the question, when it comes to esports also, if the online format is going to survive a return to normality, meaning that there would be a hybrid between online and offline events also when things are hopefully back to normal. The second one was around gaming and the dynamics in the gaming holding company between us and our partners in the InnoGames minorities and how we discuss deal and deal flows. These are two questions for you, Maria. Yeah. Thank you. Let's start on the esports side. I sincerely hope that the online and the studio formats will continue also in the world that normalizes. I think that we have learned a lot this last year, and we also shown both to ourselves and to the market that we can actually entertain in a really good and relevant way through these formats. At the same time, there is both for the fans and for the players, but also for the brand partners, it's also important to go back to the physical events within stadium arenas. I think that in the combination, we can do a whole lot more compared to what we've done before. That brings back a little bit to the point when I said that we stand stronger today. I think that we learned a lot how we can improve our operating model, how we can scale it better. I think also to add to that, which I think is extremely interesting to see, and that has actually accelerated also during the last sort of 12 months, is to see the growth of interest behind mobile esports, which I think is super interesting and what we can do more there, and also on the B2C side. I believe there are many great opportunities to bring with us learnings, and be better going forward. That's what we focus on. To touch a little, because you also touched upon the Q4 as well, and that we actually had a profitable quarter, which is great, but also remember that the weighting of events was very much skewed to Q4, given that we had six marquee events and it is predominantly on back on the marquee events that we monetize, and hence also the proportion amount of revenues was also skewed in the same way to Q4. That of course helped drive our gross margin and also the EBITDA level for esports. Moving on to your question on the gaming side, I don't want to go into details with a specific agreement with InnoGames, but I think how I generally look at it, we have a strategy on the gaming vertical and what kind of companies we would like to buy. We are completely aligned with our board and our minority owners in the gaming vertical on what that is. Should it so be that seasoned gaming executives don't find companies being good, then they probably are not good. I think that we are having a very constructive discussion with EHM on that respect, and I see no reason why that should not continue. We are very focused on driving our M&A agenda and to look at potential targets both within esports and gaming. Just for clarity there, Tom, EHM is the company that the minorities are represented by. If you follow the abbreviations. Perfect. Thank you. Thank you, Tom. Operator, could we have the next question, please? Of course. Your next question comes from the line of Erik Lindholm-Röjestål of Nordea. Please go ahead. Your line is open. Yes. Hi, Maria. Hello. A couple of questions here from me. Starting off, can you talk a bit about what you are seeing here at the start of Q1 perhaps for gaming? Some companies have witnessed a kind of challenging user acquisition environment in Q4 that improved in Q1. Is this something you have seen as well upfront there? Hi, Erik. Good question. It's always, mark, this is an important factor of the gaming industry. I don't know how much we can share there, Maria, when it comes to how Q1 has been compared to Q4. Please. Are you referencing on the UA and our ability to spend on the UA side, Erik? Yes. Exactly. For us, I think it also becomes a bit company specific because you're addressing a little bit of different targets, but if you look at the perspective of totality, I think that they are so in line with our expectations when it comes to how much we want to spend on UA and the sort of return we're seeing on back of that UA level. There's nothing that I want to flag specifically on there. All right, great. Looking at this discontinuation of the third-party publishing contract in gaming, which I guess is Hyper Hippo, is it possible to give an estimate of how big the headwind was here in Q4 from this discontinuation? Yeah. No, it has been said now for a few quarters to be honest, but that has been phased out now to it's almost entirely, and to be honest, it has impacted the top line Kongregate, but it had very little impact on the bottom-line performance. We have not gone out and said any specifics. Most importantly is that you see a good underlying trend in the company. The transformation has gone through, and we are on the right trajectory focusing on our first-party games, and we're now looking forward on building the Teenage Mutant Ninja Turtles games that we put to market in Q4, and then we are bringing the game on back of the SpongeBob universe into the market in the first half of the year. That's what we're focusing now going forward on. All right. The final one from me here. Can you talk a bit about the outlook for esports services here in 2021? I noticed that you expanded the Blizzard contract to Hearthstone and signed some more contracts in DreamHack Sports Games, for example. The esports services and how that is going to develop going into 2021, Maria? I think that we're extremely excited about all those three deals that we have now announced, and I think even though our main focus lies in own and operate because that we can drive a scalable operation, these strategic partnership on the ESL side is something we really want to continue to drive, and I'm hoping that we can bring more partners on board and together develop esports and build great esports stories around them. I'm hoping that we'll continue to do this, and it lies within our focus. I think we're onto a very good start. Especially, I would say, and highlight the NHL and the EA sponsor, which we announced yesterday and today, because that also marks a new beginning that you have the traditional sports franchises moving into esports. I believe and I hope that that is something we continue to see more of. It's hot off the press, of course, if you didn't notice it yesterday, we did then secure a 4-year agreement with the NHL. As Maria is saying, it's also a very strong brand that can help propel the whole sport games franchise as well for DreamHack. Did you have any more questions? No, that was it for me. Thank you so much. Thank you, Erik. Thank you. Appreciate it. Thank you. One second. I'm sorry, sir. No further question at this time, but once again, it is star and one to ask a question. We do not have any further questions, sir. That is very much all right, as we did have a trading update a month ago or so. Thank you, operator, and for everyone joining today. That concludes the conference call for MTG's fourth quarter and full year 2020 interim report. We appreciate you taking the time today to join the call, and we look forward to staying in touch until we release the next quarterly report, which will be the first quarter 2021 on April the 29th. Thank you very much. Take care and stay healthy.
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