Good morning everyone, welcome to this exciting day and our announcement of the acquisition of PlaySimple, a leader within the mobile word game genre. My name is Lars Torstensson, and with me today I have our Group President and CEO, Maria Redin, and Arnd Benninghoff, our EVP Gaming and Esports. We will begin by presenting the transaction and then take your questions in Q&A session. As always, 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 acquisition together with Arnd. Thank you, Lars. Thank you all for joining this call. I think we can then swiftly move on to slide four. We very much look forward to presenting you the acquisition we announced this morning, and we want to tell you why we are so excited about their business and how we see them adding value to our gaming group. Before we do so, let me take a step back and just touch upon our strategy. With our two verticals, esport and gaming, we are uniquely positioned, addressing a growing audience of 2.7 billion gamers worldwide, and with both verticals having strong underlying growth projections. Our focus lies in building shareholder value through both organic and inorganic initiatives. In esports, we hold a leading position in the market of independent esports leagues and platform operators, and we want to continue to build on back on this position. We did announce in Q1 accelerated investments, and this is on back on industry trends, learning gained during the pandemic, and upside to see the light in the tunnel with the return of physical events towards the end of this year. For us, it's important to diversify our product offering and further enhance our platform proposition. While driving organic initiatives, we also continuously seek out inorganic opportunities, equally in esports as in gaming. If you then can turn to slide five. In gaming, we want to build a strong position within the casual and mid-core mobile segment, hence driving an acquisitive agenda combined with organic growth. With it, we're very pleased to see the progress we've done in the last six to eight months. Not only do we have a much more exciting organic new games pipeline, but we've also done several strategically important acquisitions. We started with the roll-up of the InnoGames minority in early December, which was then followed by the Hutch acquisition, and thereafter the MenguCube acquisition that we now recently also closed. These transactions bring align structure for the group, which is very important, but also more so improve genre and revenue profile along with a much broader reach. We are therefore very excited also today to then present our most recent acquisition, PlaySimple. We want to go through and show you the strength of its business and how it will complement our existing companies and help us take important steps forward in order to building a gaming powerhouse. With that, I hand over to you, Arnd Benninghoff. Thank you, Maria. Hello everyone. I'm very happy to introduce you to PlaySimple, a leading fast-growing word game studio with strong analytics and an innovative edtech platform. Let me introduce you to this highly attractive growth company from India, which has been founded in 2015 by a group of ex-senior managers. The business is based in India's gaming hub, Bangalore, and fully focused on word games. With nine live games in their portfolio, they have built a great business and shown growth trajectory which is quite extraordinary. 75% of the revenues come from ad revenues. The four core titles, which are the driver of PlaySimple rapid growth, are all in the word game genre. Let me show you how this translates into a highly attractive financial profile, which has attracted us in the first place. On the left side, you can see the comparison of their fiscal year 2020 and 2021, which always ends in March. As you can see, they have shown 100% top-line growth with a highly attractive margin of 24% in 2021. On the right side, you can see the comparison of the first six months of our calendar year, first six months in 2020 and then the first six months in 2021, where they have just confirmed the growth trajectory with a 80% top-line growth. Landing now end of June around SEK 510 million-SEK 540 million in revenues and SEK 145 million-SEK 165 million in EBITDA. Expanding the EBITDA margin to 28%. If you take our offer in consideration what we're paying for this attractive asset, then look at the six-month EBITDA one way to apply this on the calendar year, then it translates into a 10.5x EBITDA multiple, which is I think a very fair, attractive multiple. On the right side, we want to illustrate the growth trajectory by showing you the quarterly growth. Here it's important to highlight that there's not really a material COVID impact. If you take the Q2 from 2020 and compare it with Q2 this year, you can see they're growing by nearly 100% top line. There's not a drop, and they haven't really benefited from COVID. It's a continuous growth. Also, it's important to call out that now being roughly eight weeks into the IDFA changes, we haven't really seen in PlaySimple business a material impact. It's quite the opposite. They managed to continue the growth top line and show very strong and stable eCPM. The continuous growth of PlaySimple is fueled by their robust operating model. It's a highly data-driven model growing the ATV, and it's based here on PlaySimple's flywheel. Let me just walk you through this flywheel. Based on their strong analytics system, where they capture more than 5 billion data points per day, they run a very sophisticated live ops system. They focus on users and are able to retain the users much longer in their games than any competitors. The game development cycle is fairly short, with 6-12 months from the first idea to full commercial launch. Their strong live ops translates into very high retention rates. Their day one is probably still a bit average since they're not that focused on polishing the games. Once the games are live and based on the data points, then they retain the users. If you take the day 30 retention rate of 12%, that is clearly above market average, which sits around 8%-10% for similar casual games. Through the strong retention, this leads to a growing ATV and higher revenues. Here I just want to steer your attention to also the strong and fast payback of their UA spend. After five months in the current cohorts, they break even. Based on a one-year ATV calculation, they are showing around 200% of ROAS, meaning EUR 1 or $1 invested yields a $2 payback. This is all driving the growth of the business on the back of expanding EBITDA margins. To give you another proof point that PlaySimple has built up quality cohorts, let me show you how nicely the cohorts are stacking. Here you see a graph showing the cohorts from January 2018 until April 2021. More than 40% of the revenues of PlaySimple are still driven by cohorts from 2018 to 2020. Another important learning and takeaway here is that the quality of cohorts are the same pre-COVID, and now being in May, April 2021. They show exactly similar revenue profile. There's no difference. Let's take a closer look at the four core growth games and their stellar retention rates. PlaySimple's approach to game development is following a franchise system. They look at their games as franchises. All the following games are also paying or buying into this concept. DTC, Daily Themed Crossword, is the biggest game, all four live games are showing a similar revenue contribution. There's not a single game dependency. DTC is around delivering roughly 35% of the revenues. Word Trip and Crossword Chained around 25%, the newest game, Word Wars, already 8% of the revenues. On the right side, you see how nicely DAUs and MAUs are growing. DAU growth year-over-year was 50%, the bottom again to highlight the strong retention. As I said, much stronger retention day 30 and 90 than their competitors. There are already four new games ready to be launched in the second half of this year. Four games in the word game and solitaire genre. A 5th game is already live. That's Tiny Crossword Explore here in the middle, which belongs to the Crossword franchise, already showing very strong retention KPIs. All games following the success formula, the triangle between genre mastery, strong analytics, and live ops. PlaySimple, with its game portfolio and their capabilities, nicely complements our Games vertical. They are adding revenue capabilities where we can leverage our advertising revenues. They are adding to our audience network female players, which is highly attractive. As you know, we like genre focus, and they focus on word and solitaire genre. When we take a look at our gaming powerhouse setup as a whole, PlaySimple will help us to accelerate the build-up of our center of excellence. On this layer, center of excellence from UA marketing to ad optimization, PlaySimple with their ad technology analytics system will champion the ad optimization and help us to build up a cross-promotion system. Let me summarize the investment highlights. It's a highly profitable growing business focusing on the word genre, a really data-driven org, a strong experience management. They've developed an in-house ad stack piece of software, which we can leverage across our group to cross-promote and become less dependent on external UA channels. The data-driven operating model is very strong and guarantees a continuous growth over the next years and help us to adapt to any market changes. [Their capability fits very well in our Games portfolio, and we are happy to activate after the M&A approval. That's why I believe it's a great acquisition for our Games portfolio and happy to join our MTG family. With that, over to Lars who will give you a few words on the financial structure and final details]. Thanks, Arnd. A few words on the financial structure of this very exciting transaction then. The upfront consideration amounts to $360 million, or around SEK 3 billion and SEK 90 million, and will be made up of 77% in cash and 23% in shares. The transaction will be mainly debt financed, combined with available cash. We are pleased that the founders of PlaySimple will take 4% of their consideration in shares, showing confidence in the bright future of the PlaySimple business. These shares will have a lock-up period of up to two years. The sellers are also entitled to a performance-based earn-out, estimated by us to amount to around SEK 150 million over the coming three and a half years. The earn-out will be fully paid in cash. We are now a much more diversified gaming business. This also means that we are ready to carry debt in this transaction following the strong support provided by our shareholders in our earlier transactions during the last six to nine months. The upfront cash consideration will be financed by using cash at hand, a secured credit facility of SEK 1 billion, and a bridge loan of the same amount. The credit facility is a 2+1-year construct, while the bridge is 12 months. We will now initiate the process of evaluating the most attractive refinancing alternative for the bridge loan facility, including, but not limited to, the bond market. The equity consideration will be paid with MTG B shares following Reserve Bank of India's approval. This is required in order for the sellers of PlaySimple to receive payment in shares. As a result, MTG is therefore enabled to issue MTG B shares upon closing. Shares will be issued once approval has been obtained. Our net debt following the closing of PlaySimple will amount to approximately SEK 1 billion, which would be equivalent to approximately 1.4x trailing 12 months consolidated adjusted EBITA on a pro forma basis. This is a leverage level that we feel very comfortable with. With that, I would like to hand over to you again, Maria. Thank you. As Lars said, we are shape and form for this acquisition and also the recent acquisition. Therefore, we want to take the opportunity to share with you our unaudited pro forma financials for the new group. We're very happy to see the strength and the growth profile that we're building. On a pro forma basis for 2020, we will report revenues of SEK 4.4 billion with a margin of 29%. If you look at Q1 2021, what is really strong are the pro forma numbers that are close to SEK 1.2 billion, and they're having a higher underlying growth rate and an 8% organic growth we reported in Q1, whilst also having a margin expansion. Looking at the breakdown of the revenues, we are enhancing our share of mobile revenues, which is now close to 70%. We diversified our revenue stream to also include paid apps, and we're increasing our share of advertising contribution. We now reach over more than 30 million monthly active users, and we're having 53 live games ranging across the racing, idol, city builder, tower defense, and now also the word game genre. With this, we're very proud when we look at our current games portfolio, and as you can see on this slide, it's becoming very balanced. All in all, we have 53 live games in different growth stages and 16 games in development. This is a slide when we look at it that gets us excited for the years to come. With that, I'm concluding my part, and I hand back to you, Lars. Thank you, Maria. That concludes the formal presentation of our PlaySimple acquisition. We are now ready to take any questions that you might have on the transaction. Operator, can you please help us with the first question? Of course. Thank you very much. Ladies and gentlemen, if you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be taken by an operator. If you wish to cancel this request, please press the hash key. Once again, it is star and one to ask a question. The first question comes from the line from Fredrik Olsson from the Handelsbanken. Your line is open. Thank you very much. Hi, Lars. Hi, Maria. I have a couple of questions on the acquisition itself. First of all, I was wondering if it is possible for you to disclose the revenue distribution by platform for PlaySimple? Thanks, Fredrik. Revenue by platform for PlaySimple. We haven't disclosed it, but are you able to support that with some indications? Yes, sure. These are all mobile web views. When you mix platform between iOS and Android as well, they're now around 60% Android and 40% iOS. All right. Thank you very much. I also see that the revenue model, I mean, advertising is the largest share. Within this segment, conversion rates tend to be quite high. I was wondering regarding in-app purchases, is there any plans to implement this or to scale the advertising expertise to the rest of the group and then vice versa, so to speak? Arnd, could you take that question, please? Yes. PlaySimple has IAP web views between 30%-25%, which is quite stable also. The ad web views are more profitable since we don't pay any app store tax on them. We definitely want to leverage their ad revenue capabilities across the group since we have ad revenues 10% roughly in Hutch, Ninja Kiwi, and also in Kongregate. In the future, we could also consider to implement ads in mid-core games, as long we can secure a great game experience. This is stable, and well-balanced, and helps us also to diversify our revenue streams across the portfolio. All right. Thank you. That was it for me. Thank you, Fredrik. Operator, could we have the next question, please? At the moment, we have no further questions. Just a reminder, it is star and one if you wish to ask a question, please. We have no further questions coming through. Okay, that is understood. In that case, I should just wait a few minutes to see if there's anyone on the call that would like to ask a question, so we don't miss that opportunity. Well, in that case, we see it as the presentation is crystal clear to the audience as well, which is very good. Thank you, operator. That concludes the conference call, and we appreciate, of course, that you take the time, and we look forward to staying in touch. Please feel free to reach out to either myself or Maria during the course of the day if you would like to follow up with any additional questions. That concludes the conference call. Thank you very much and stay safe.
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