Welcome to Thunderful Group's quarter two report 2022. Throughout the call, all participants will be in listen-only mode, and afterwards there will be a question and answer session. If you wish to ask a question, please press zero one on your telephone keypad. Today, I'm pleased to present Acting CEO Anders Maiqvist and CFO Lennart Sparud. Please begin your meeting. Thank you, and good morning, and welcome to today's presentation of Thunderful Group's financial results for the second quarter. Go to slide two, please. Today's presenters are me, Anders Maiqvist, as Acting CEO, and Thunderful's new CFO, Lennart Sparud. Yesterday evening, the Board of Directors in Thunderful Group distributed a press release stating that the company has a new Acting CEO as of today. Most of you know me from before, since I was the CFO in Thunderful Group up until May this year. At the end of this presentation, I will outline a few actions and thoughts for the short-term future. With me today is also our new CFO, Lennart Sparud. Lennart's experience and CV speaks for itself, but I'm also genuinely happy and delighted to have experienced a fast and smooth handover process from myself to Lennart. Lennart has proven to be a fast learner with a high level of street smartness. Go to slide three, please. We start this presentation by looking at the key highlights in the second quarter. Go to slide four, please. Thunderful Games presents a strong quarter. In our acquired companies, we have signed new deals and have seen strong performance in both net sales and EBITDA. The acquired companies deliver EBITDA of more than SEK 34 million in this quarter. The main contributor is Robot Teddy, our business development and strategy agency. Robot Teddy has again proven their ability to find and sign game-changing titles that few others would have noticed at the time of signing. In the organic games companies, this quarter sees a negative impact of -SEK 19.9 million from ordinary planned depreciation and an extra impairment related to the game The Gunk. The Gunk was released to PC Steam in this second quarter, and the value of the one-off impairment is -SEK 10 million, and the remaining -SEK 9.9 million was planned depreciation. We are confident that the impairment is a one-off item as the game's book value now corresponds to the sales performance, and naturally the depreciation amount will be lower in the coming quarters based on our degressive model for depreciation. Finally, and as communicated in the Q1 presentation, two of our distribution companies are facing pressure on EBITDA margins in this quarter. Nordic Game Supply manages to deliver SEK 2.6 million in EBITDA, and AMO Toys has a loss of -SEK 6.9 million. Lennart will guide you through the details in the financial section, but EBITDA pressure in these two companies is mainly driven by high inventory levels that are driving increased logistics costs. We once again reiterate our guidance for the third quarter, where we will continue to face pressure on EBITDA margins in these two companies. Go to slide five, please. For the second quarter, we had an operating income growth of 11.1%, where the game segment grew by 48.8%, while the distribution segment grew only slightly by 3.2%. Adjusted EBITDA is showing a growth of 26.9%, while adjusted EBITDA has a negative growth of -25%. Main driver for the diversification between EBITDA and the EBITDA performance is the -SEK 19.9 million in combined depreciation and impairment for The Gunk, and most of this is to be seen as a one-off item in this quarter. This item also negatively impacts organic games EBITDA growth, but since games has an overall strong quarter, this means that acquired games companies have a very good performance, delivering SEK 40.5 million in net sales and SEK 34.4 million in EBITDA. As mentioned before, the main contributor is Robot Teddy, and the high EBITDA margin is explained by revenues being a mix of a smaller portion of consultancy fees and a bigger portion being revenue share from game projects where we have invested and are providing business consultancy services. For the distribution segment, the consolidated profitability is impacted by increasing logistics costs, and Lennart will provide details of the mix effects within the three companies. My takeaway, and this is an important one, is that we reiterate our guidance on EBITDA pressure in Nordic Game Supply and AMO Toys also in the third quarter this year. Go to slide six, please. Let's have a quick look at Thunderful Group and our two segments. Go to slide seven, please. Thunderful Group operates in two segments, games and distribution. While the distribution business covers the Nordics, the games business is global. We sell our games all over the world. We're now almost 450 employees. We have 14 internal games in development at this moment and 22 games from external developers in our pipeline. Across the segments, we manage a portfolio of around 100 brands, and we've kept our famous Nintendo partnership for more than 40 years. Go to slide eight, please. A financial trend overview for the two segments presents a net sales growth in both segments in this quarter, both versus the comparison quarter, but also compared to the previous quarter. For adjusted EBITDA, Games is growing both compared to the comparison quarter and compared to the previous quarter. We do see an EBITDA growth even including the impact of -SEK 19.9 million from The Gunk in this quarter. The distribution segment's EBITDA has significant negative growth, both versus the comparison quarter and the previous quarter. We guided for margin pressure in both Q2 and Q3 in our Q1 presentation. Again, this is what we see now, and we will also see it in the third quarter. Go to slide nine, please. Within Games, we do a few different things. We develop games mainly based on our own IPs in the division Thunderful Studios. We are convinced that quality is vital to earning success, and currently we engage almost 300 employees within our studios and have capitalized around SEK 173 million at the end of this quarter. Developing high-quality games takes time, and to be able to release games more frequent, we are also involved in publishing our games developed by external studios. Publishing is more hands-off than development, so we can publish more games than we can develop. As part of the publishing process, we often invest in the externally developed games that we publish. At the end of this quarter, we had around SEK 100 million in committed future investments in our pipeline of externally developed games. We also want to be involved in even more games. That's why we started Thunderful Investment to invest in game projects around the world. That ticks an important box for the game segment, and we believe there are strong synergies with development and publishing. We are now a 360-degree game company that offers development, co-development, publishing, investments, and M&A. In this quarter, Thunderful Investments through Robot Teddy has really proven the investment that investments can be a vital part in our financial performance. Go to slide 10, please. Our distribution segment consists of three companies. First, there's Bergsala that has held the license to sell all Nintendo products in the Nordics and Baltics for more than 40 years. There's AMO Toys, our toy distributor with a distribution portfolio of around 75 brands, including some of the most popular toy brands. Finally, there's Nordic Game Supply that distributes gaming accessories, gaming merchandise, and boxed video games, including products from brands like Razer and HyperX. Go to slide 11, please. We released seven titles in the second quarter and one additional game after the end of the quarter. The total net sales value for the released SKUs in this quarter was not more than SEK 4.9 million. As Thunderful Group evolves as a 360-degree gaming company, it's becoming more and more obvious that specific releases are not always the main driver behind our growth. Of individual games, I'd like to highlight Source of Madness as a positive contributor. The game left early access and was fully released to PC and console in this quarter. Go to slide 12, please. Here are 14 titles that we have in internal development, and five of them are being planned to be released before the end of this year. There's not many significant updates compared to our financial presentation for the first quarter, but we have released The Gunk on Steam and also removed it from the pipeline as there's no future releases planned for The Gunk at this stage. Go to slide 13, please. For our externally developed games in Thunderful Publishing, we now have a pipeline of 22 games. Nine of them are planned to be released before the end of this year. There are a few more updates in this pipeline release-wise. Source of Madness was a good release for us. For games not yet released, we presented some new material, for example, LEGO Bricktales and Planet of Lana, and we are seeing positive reactions from players around the world for these two games. That's it for the segments. Go to slide 14, please, and CFO Lennart Sparud will guide you through the financials. Thank you, Anders, and hello, everyone. My name is Lennart Sparud, and as Anders said, I'm the new CFO at Thunderful Group since two months roughly. My most relevant background is the position as CFO at Hexatronic Group, a company listed on NASDAQ Large Cap today for six years from where I left one and a half year ago. Move to slide 15, please. As Anders also has mentioned, the second quarter has been a strong financial quarter for the game segment, but a weak one for the distribution segment. To guide you through the details, we start with the net sales development, where we have seen a growth of almost 8% year-over-year, reaching SEK 581 million in this quarter. The game segment has a growth of 35% and the distribution segment a growth of 2%. For adjusted EBITDA, the negative growth is -SEK 10 million or -25%, reaching SEK 31 million in the second quarter. The game segment has a growth in EBITDA of SEK 4 million, and the distribution segment a negative growth of -SEK 14 million. Regarding cash flow, the cash flow from operating activity was significantly better in this quarter versus the comparison quarter, even though it was negative. We reached a negative cash flow from operating activities of -SEK 40 million compared to -SEK 63 million in the comparison quarter. Inventory build-up in the distribution segment is the main reason for the negative cash flow. Move to slide 16, please. For Thunderful Games, we have seen a growth in net sales year-over-year of 35%, reaching SEK 115 million in this quarter. Which actually is the highest net sales figure in Games in a single quarter so far. We see a negative organic growth in Games of -13% and growth from companies acquired in the last twelve months is 48%. Breaking down the negative organic growth, only Thunderful Publishing is contributing with organic growth in the second quarter. In total, the old core Thunderful game companies have a negative growth of -14%. The main reason for this is that Thunderful Development had external financing in the comparison quarter, but there is no external financing for any development project in this quarter. It's mainly Robot Teddy driving the positive net sales growth and EBITA contribution this quarter in the Games segment. As also Anders mentioned, EBITA includes depreciation and a one-off impairment of almost - SEK 20 million for The Gunk. We expect no further impairments for The Gunk as the remaining book value corresponds to the game's sales performance. Adjusted for this one-off impairment, this is one of the best quarters to date for the Games segment, and the growth is non-organic. We can move to slide 17, please. For investment in Games, we have reached total investments of SEK 61 million in the second quarter. For development CapEx, we have reached an all-time high of SEK 43 million. This is partly because we have more developers employed, almost 300 people today in the group. The main driver is that most developers are now working on games not being externally financed. In Robot Teddy, we have agreed to fund prototype development for a number of games, and we continue to evaluate titles for investment. In the balance sheet, we have also added a specific line for investments in game projects. You can move to slide 18, please. For the distribution segment, we see an overall net sales growth year-over-year of 2%. Breaking it down in the subsidiaries, we see that Bergsala is increasing with 21%, driven by higher availability of hardware compared to the comparison quarter, though affecting the gross margin negatively. In Nordic Game Supply, the net sales is decreasing with -22%, and this is due to lower demand from key customers. We also see that we will have difficulties matching the comparison quarter also in the third quarter this year. In AMO Toys, on the other hand, has a growth of 12% year-over-year. In the comparison quarter, we suffered from late deliveries of spring/summer product, but in this quarter, availability of products have been good. In terms of profitability measured in EBITA in distribution, the segment has an overall negative growth of -SEK 11 million or -59%. Even though net sales are up 21%, Bergsala of EBITA delta is only +SEK 1.1 million, and this is primarily explained by negative sales mix effect due to higher share of hardware sales, negative FX effects of -SEK 3.8 million, and also increased costs for personnel, marketing, and logistics. In Nordic Game Supply, the EBITA delta of -SEK 1.9 million is primarily explained by lower gross profit and higher costs for logistics, and the lower gross profit comes from lower net sales. Even though net sales are up 12%, AMO Toys EBITA delta is -SEK 10.9 million. This is explained by price pressure in the market, negative sales mix effects, and also increased cost for marketing and logistics of -SEK 6 million. To sum up the profitability challenges in distribution, it's important to understand that the EBITA margin pressure that we are guiding for in Q3 is affecting Nordic Game Supply and AMO Toys only. For Bergsala, it will be business as usual, and the lower EBITA margin in the second quarter is affected by sales mix and a negative FX effect of -SEK 4 million. We are working hard on reducing the inventory levels, and we continue to do that throughout the year. Operating expenses will be affected for Nordic Game Supply and AMO Toys in Q3. In our most important quarter, Q4, we are now working hard to be in a better position in terms of the number of pallets in the warehouses when Q4 starts. It's also important to understand to remember that the planned reduction of inventory levels, of course, should contribute to improved cash flows later on this year. We can move to slide 19, please. Thunderful Games segment has a negative organic growth of -13%, as mentioned before. The old core Thunderful Games companies have negative growth of -14% in the second quarter. Robot Teddy is the main driving factor to the non-organic net sales growth in this quarter. Also looking ahead, net sales development in Robot Teddy and Coatsink looks promising for the next quarter based on the ongoing deal negotiations we have today. Move to slide 20, please. For adjusted EBITA, the situation for the organic companies is similar to the negative sales development. EBITA includes depreciation and a one-off impairment of -SEK 19.9 million in total for The Gunk. We have a negative organic EBITA growth in almost all companies in the Games segment. Again, the old core Thunderful Games companies are affected by the lack of external financing which they had in the comparison quarter. Looking at the acquired gaming companies, Robot Teddy, Early Morning Studio, and Stage Clear Studios, they have a positive EBITA contribution in the quarter of almost SEK 35 million. Adjusted for the one-off impairment, this is one of the best quarters to date for the Games segment, and the group is non-organic. Okay, you can move to slide 21. As mentioned before, the cash flow from operating activities was significantly better in this quarter versus the comparison quarter, even though it's negative. The key driver behind the negative cash flow is the net effect in core working capital in the distribution segment with a negative net contribution of -SEK 54 million. By the end of the quarter, we had SEK 335 million in total available cash if we include unutilized credit facilities. During the second quarter, we have made cash earnout payments of SEK 3.5 million to the sellers of The Station. Net debt by the end of this quarter is SEK 252 million, resulting in a net debt over the last 12 months EBITDA ratio of 0.7. That was the end of the financial section. Move to slide 22, please, and Anders will take over again. Thank you, Lennart. After the end of the quarter, there's been one major event communicated to the market. Go to slide 23, please. Yesterday evening, the Board of Directors in Thunderful Group distributed a press release stating that Brjánn Sigurgeirsson leaves the role as CEO and that they have appointed me, Anders Maiqvist, as interim CEO. The board of directors have also initiated a recruitment process for a new permanent CEO. Brjánn will remain in the company in a new role within Thunderful Games, and my own background in this company group is that I have been the CFO since Thunderful Group was incorporated up until May this year. I was also CFO in the previous combined group of Bergsala and Thunderful Games, so I have been involved in these companies as CFO for almost seven years. In the press release, our Chairman, Mats Lönnqvist, states that he's grateful that Brjánn will remain in the group so we can continue to utilize his experience and network. Our Chairman is also expecting a higher focus on increased profitability and improved cash flows. I would like to take this opportunity to outline my own initial thoughts and short-term agenda based on our Chairman's statement, and I would also like to send a warm-hearted thank you to Brjánn for everything he has done so far for this company. I'm also looking forward to continuing our cooperation in Brjánn's new role within Thunderful Games. Go to slide 24, please. The immediate short-term actions to improve profitability and cash flow generation will, for Games, be focused on a few of the organic companies. By analyzing one of the slides that Lennart presented before, it's clear that the recently acquired companies are presenting high EBITDA margins with good EBITDA growth. For the organic companies, even if we ignore the impact from The Gunk being -SEK 19.9 million in this quarter, there is still a negative EBITDA development year-over-year of -SEK 10 million. It's also clear for us in management that a few of the organic companies are performing well, and my conclusion as new acting CEO is that I will set up an immediate action plan to reduce losses and improve profitability in some of the organic companies. I believe that this group of companies are the key reason why Thunderful Games have faced negative EBITDA and EBITDA margin development in the recent quarters. We've also now seen, what the new deals can do for the acquired companies, and our focus on signing new deals in all of the gaming companies will be a never-ending focus area for our leadership team in Games. Go to slide 25, please. For our distribution segment, I will immediately set up an action plan focused on improving our cash flow generation. This slide presents the group's core net working capital development since the IPO, and the darkest bar in the middle represents inventory in distribution. Even though we identified inventory buildup already four quarters ago, there's been a year, and we still haven't seen any signs of inventory reduction in the balance sheet. Reducing inventory levels in AMO Toys and Nordic Game Supply is the most important task that we have in front of us, but it should not be the most challenging task. Two months ago, mid-June, the former CEO and the board of directors in Thunderful Group asked me and another senior advisor to get involved in the distribution company's inventory reduction plan. This means that I'm personally already involved, and that the action plan for distribution will be kickstarted already this week. This is an area I will monitor and follow- up closely and frequently for the rest of this year. To summarize, my initial short-term focus as acting CEO will be on the inventory reduction plan in distribution together with the action plan in Games focused on reducing losses and improving profitability in some of the gaming companies. Finally, move to slide 26, please, and thanks everyone for listening to this session, and we are now ready to answer any questions you might have. Thank you. If you wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. No questions from the telephone line at the moment. I hand over to you speakers. All right, sure. Well, if there isn't any further questions, yeah, we have presented this presentation, and we are happy to answer any other type of questions you might have. Feel free to send them to ir@thunderfulgroup.com, or send them directly to myself, Anders, or to our CFO, Lennart. Thank you for listening in. Sorry to interrupt, speakers. We have just received two questions, if it's possible. Our first question come from Simon Jönsson of ABG. Please go ahead. Your line is now open. Hi, Anders and Lennart, and thanks for taking my questions. I'm on a bad line, so please bear with me here. First off, could you please maybe give some more color on the new deal signings here? Are they mainly in Robot Teddy? And what kind of deals are they, and what is the visibility into coming quarters? I also wonder if you have signed all the deals that you guided for in Q1 report or if we should expect more deals in Q3. Yeah. Thank you, Simon. Yes, the first part of the question is true that the majority of the deals have been signed in the acquired company, Robot Teddy. If you look at EBITDA development from the first quarter to the second quarter, we reached almost SEK 20 million in the first quarter and SEK 35 million in the second quarter. There's also this impact from The Gunk being around SEK 20 million. Adjusted for The Gunk, you can say that EBITDA is around SEK 35 million stronger in the second quarter compared to the first quarter. In the first quarter, we mentioned that we had done deals for $6.5 million, and then we were about to sign deals for the future. We were also trying to guide how much of those deals that were coming in 2022 and 2023. Basically, you can say that the majority of the deals in Robot Teddy are, as I mentioned before, they are based on a rev share plus consultancy fee, and the consultancy fee is very small, and the rev share is the majority of the revenues. This means that we now have rev share from games generating good revenues, and those games haven't been released in this specific quarter. Ultimately, one should be able to expect that those rev shares, you know, are bringing fairly the same amounts quarter by quarter if there's not any seasonal variation or something happening to the individual games where we have rev shares. All right. Thank you for that. Yep. Yep. Yeah, it did. Another question on the distribution. You ended the call presenting an action plan for improving the inventory levels. Could you maybe give us an explanation or maybe go into more detail on how you'll do that? Looking at the first half of this year, Nordic Game Supply is a company that have seen, you know, lower net sales both in Q1 and Q2 compared to the comparison quarter. It's also a company with high seasonal variation, so most of the sales on a yearly basis happen in the second half of the year. This means that we now have much lower purchase amounts for the peak season, the second half of the year. We have also already sold in quite many products that we have on stock. That's basically the more detailed plan for Nordic Game Supply. For AMO Toys, this season is about selling some of the second-half products from last year that we didn't have time to sell last year, basically because they were delayed to our warehouse, so we kind of missed the peak season just before Christmas last year. Many of those products have been pre-sold before the season starts now in August and September. We will also focus quite much on the products that we already have in stock. The purchase amounts have been decreased also for AMO Toys. Thank you. What can you say about the risks for any write-downs of the inventory for any of the NGS or AMO? I think that's too early to say. I mean, I was basically appointed in this position today. We have, you know, started looking through this since I got involved in the distribution business in mid-June. That is one part of the action plans. We will need to look into that now in August and September. All right. Thank you. A last one from me, sorry for putting you on the spot here, Anders. As the new CEO, although temporary. What can you say about the plan for capital allocation? I mean, you have a solid underlying cash flow to invest, if we adjust for the current inventory levels causing problems for distribution. How do you view investing in new game projects versus, let's say, returning capital here to investors? Yeah, I know this was a question that basically came up from quite many investors shortly after the Q1 presentation. I think where we are right now, and this is something that we discussed yesterday in the board of directors meeting. Where we are right now, I think both me, our CFO, Lennart, and also the Board of Directors would like to see that the inventory levels are going down, you know, that we really manage to follow the inventory reduction plan. Then we can, you know, then we can make a new decision after that, so to speak. Right now, liquidity hasn't been very good in these two recent quarters due to the inventory build-up. We will need to focus on reducing the inventory levels, and then we are in a new position, both in terms of, you know, if we should do M&As or not, or if we should do further game project investments or not, or if we should, yeah, follow your suggestion or question here. I think that's actually a question for the future when we have seen the inventory re-reduction actually happen. Okay. That makes sense. You know, is capital distribution something that is on the table? Yes. As I said, that was something that we discussed yesterday. Okay. Thank you. That's all for me. Thank you, Anders and Lennart. I'll get back in the queue. Thank you. Our next question come from Dennis Berggren, Carnegie. Please go ahead. Your line is now open. Perfect. Thank you very much. Good morning, Anders and Lennart. Just following up on the first question that you received, I think in Q1 you seemed quite confident in the new deal, the quantitative estimate on the new deals signed. Could you please just clarify the magnitude of the value of the new deals signed until today compared to the EUR 15 million-EUR 20 million forward figure that you provided in relation to the Q1 slide? Yeah. The line wasn't very good. I think I heard your question. In my first answer to Simon's questions before, EBITDA development compared to the first quarter and adjusted for The Gunk is around SEK 35 million. You can say that basically all of that is deal based. There were a few deals being made in the organic companies, especially Coatsink. Then the remaining and the majority of those deals have been made in Robot Teddy, the new company. I mean, if you look at it from comparing EBITDA with the previous quarter, then we've added SEK 35 million in EBITDA this quarter. You know, based on what I said with Robot Teddy and the rev share structure of those revenues not being released based, one could imagine, you know, just by doing a mathematical model that it could be three quarters times those SEK 35 million. In that case, that would mean that we have signed deals for around $10 million so far based on what we have actually, you know, presented as financials in the second quarter. Got it. Perfect. Okay. Then just a quick one on inventory. I get that you're about to implement the action plan, but what risk do these products potentially being or become outdated? For Nordic Game Supply, I think the risk is fairly limited, you know, based on where we were before and where we are now, because we now have the slow season behind us, the Q1 and the Q2 season. Basically it's now we're getting to ship products from September to December, which is our peak season. I mean, if there's a risk for write-downs or not, it's difficult to say that at this point in time. It's easier to reflect on that in December or January. I think for AMO Toys, it's. There's a few novelties and products with seasonal variation. My personal opinion would be that the risk is slightly higher in AMO Toys than in Nordic Game Supply. Okay. Thank you very much, Anders. That's all from me. Thank you. No further questions at this time. I hand over to you speakers for any closing remarks. Nothing from us. Feel free to send us questions to ir@thunderfulgroup.com. Again, thank you for listening in and wish you a nice day. Thank you.