Asmodee Group AB (ASMDEE-B) Q3 2026 Earnings Call Transcript

Welcome to Asmodee Q3 report 2025-26. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Thomas Kogler and CFO Andrea Gasparini. Please go ahead.

Good morning and welcome to our third quarter result presentation for the fiscal year 25-26, where I am very happy to report the strongest sale and EBITDA performance in the history of Asmodee accompanied by a healthy free cash flow and a solid balance sheet. Looking at games published by partners, sales increased by 50.3% and were driven by successful TCG releases including Mega Evolution, Phantasmite Flames, the latest Pokemon trading card expansion, TCG's published by Bandai also contributed to sales growth including the continued success of One Piece and its latest set carrying on his will. The launch of Magic the Gathering, Avatar the Last Airbender this quarter was met with high player demand and this quarter also saw the successful release of the highly anticipated TCG from the League of Legends universe Riftbound with Asmodee acting as a leading distribution partner in Europe. Sales of games published by Asmodee Studios decreased by 12.7% against an exceptionally strong performance in the same quarter last year. The development reflects a combination of factors isolated to the US that Andrea will walk you through in more details. Important to note that games published by Asmodee Studios achieved overall stable performance in Europe. This quarter saw high-profile transmedia announcements. The Werewolves of Miller's hollow unscripted game show is slated to expand to more than 10 new territories through a deal with Bunny J. Furthermore, together with Netflix, we announced an all-encompassing media partnership on the Catan franchise for upcoming scripted and unscripted content. And after the quarter, we also announced a new transmedia deal with Netflix on our Ticket to Ride franchise. During the quarter, we announced a new strategic licensing agreement between Asmodee and Middle Earth Enterprise, under which Asmodee will act as the exclusive category manager for tabletop games based on the Lord of the Rings and the Hobbit franchises. We aim to expand this portfolio even further, including titles published or distributed by third party external to Asmodee. We also attended events such as the International Spiel Game Show in Essen, where Asmodee has the largest footprint, showcasing our new releases to the show's 220,000 visitors and business partners. Other notable events included Asmode partnering with the GP Explorer in France, a leading influencer, events that attracted large audiences, and our participation in Italy's leading pop culture event in Luca, the Luca Games and Comics Festival, and our presence in the UK at Alternet. We continue to execute our M&A strategy, actively sourcing new opportunities, During the quarter, we closed the acquisition of the Cthulhu Death May Die IP in games, and after the end of the quarter, we also completed the bolt-on acquisition of the Sharing of Nottingham IP that is further strengthening our portfolio of intellectual properties. Moving on to the highlights of the third quarter, where net sales reached above 520 million euros representing organic year-on-year growth of 25.6 percent this was as i said mainly driven by the european market primarily supported by the continued success of trading card gains as just described the adjusted ebda grew by 28 percent driven by the strong sales growth and the adjusted ebda margin increased by 100 basis points to 21.8 percent supported by disciplined cost control, bringing our year-to-date margin in line with prior year. The free cash flow was healthy, with a free cash conversion at 67%, and our net day on a BDA ratio came in at 1.9 times, in line with our medium-term target of below two times during the quarter we also successfully refinanced our 320 million floating rate bonds thereby lowering our interest expenses by around 5 million and euros annually and strengthening our debt profile and with these words i will now hand over to our cfo andrea gasparini Thank you, Thomas, and good morning everyone.

Let's now take a look into sales for the third quarter, where net sales reached 524 million, a year-on-year increase of 22.2%. On an organic basis sales grew by 25.6%. Structural changes relating to the divestment of twin sales interactive had an effect of minus 0.5%. And the impact of changes in exchange rates was minus 3%. Breaking down sales by publisher. Reported sales of Asmodel published games decreased by 12.7%. Games published by partners increased by 50.3%. And the other category declined by minus 8.5% impacted by the disposal of TwinSales Interactive. The strong performance in games published by partners was driven by continuous successful TCG releases, as already noted by Thomas, primarily across Pokemon, Magic the Gathering, and One Piece. As discussed during our Q2 report, there is a timing effect between Q2 and Q3 related to Pokemon Mega Evolution launch of approximately 10 to 15 million, which had a negative impact in Q2 and the corresponding positive impact in Q3. The development in games published by Asmodee is mainly coming from the US due to three factors. First of all, the U.S. market dynamics. The underlying U.S. board game market, as measured by mass market and online sellout data, remained stable during the quarter. Asmodee's sellout performance was in line with the market in Q3, following outperformance in Q1 and Q2 therefore on a year-to-date basis Asmodee continues to outperform the market quarterly fluctuation reflect the normal volatility in saline which is influenced by retail inventory levels second impact is the FX this is due to the unfavorable UX exchange rate exposure since the beginning of the year and the third reason is related to Star Wars Unlimited normalization as you remember stronger prior year comparison due to the launch of Star Wars Unlimited compared to last year now the performance is normalizing as can be expected from this type of product because we are now in the second year of this life cycle of this TCG from a category point of view. So the split of sales TCG versus board games, the board games performance was partially mitigated by good dynamics in games published by partners such as Hitsters from Jumbo Decept. Looking at the year-to-date development, net sales reached 1 billion 276 million, the year-over-year increase of 24.3%. On an organic basis, sales grew by 27% as a result of our diversified product catalog and geographical footprint underpinning another strong sales year. Adjusted EBDA grew by 28% in the third quarter, reaching 114.5 million compared to 89.3 million last year, paving the way for a year of strong profits. The increase reflects a combination of factors, higher volumes supported by solid sales momentum, disciplined cost management with personal costs increasing by only 3.5 million due to high activity, well below our top line growth, and the other operating expenses were flat year-on-year as continued investment in marketing were fully offset by lower other operating expenses. From a profitability point of view, the adjusted EBDA margin increased by 100 basis points to 21.8% supported by the stronger cost control. Note that below the EBDA line as part of the refinancing we recorded an impact of minus 5.7 million related to the write-down of implementation costs for the previous bond, with the cost for the new bond of around 5 million being capitalized. So the outcome of the year-to-date performance clearly demonstrated the scalability and efficiency of our business model, able to convert the growth into profit and to reach margin in line with last year, a solid achievement considering the unfavorable sales mix impact observed during the last three to four quarters. Moving on to cash flow, free cash flow after income tax and capitalized lease payment amounted to 76.5 million in the quarter compared to 71.8 last year. This corresponds to a free cash flow conversion of 76% versus 80% a year ago due to the build-up of strategic inventories and higher tax paid thanks to increasing profits. Looking more closely at the working capital movement, inventories decreased by 55 million in line with seasonality after our high activity period in Q3. in terms of inventory quality we have bought and still continue to hold the strategic inventory position of distributed tcgs that have turned into sales shortly after the end of the end of q3 as well as some higher than expected the position of long sellers board games that will generate sales in the short to medium term overall the inventory levels remain under strict control with inventory as a percentage of the last 12 months sales going from 17 percent down to 15.3 percent year over year. Receivables increased by 45.6 million compared to 39.6 million last year. This is mainly driven by higher sales. Despite this natural increase the ratio as a percentage of sales improves and this reflect our continued focus on cash collection. On payables which decreased by 29 million compared to an increase of 2.1 million last year. So last year payables just as a reminder were favorable impacted by items affecting comparability related to the listing process of around 20 million. Furthermore the less favorable movement compared to last year primarily reflected the strong growth in the TCG category which at current sales level leads to a different cash flow pattern than historically due to standard credit limits. The cash flow from operating activities was also impacted by higher income tax paid of 19 million versus 6.4 last year. This is driven by higher profit before tax last year which increases the tax payment in the current fiscal year. This explained the majority of the growth as well as a strong activity this year in certain jurisdictions requiring an upward adjustment of current year tax prepayment to avoid unfavorable catch-up effect during the next fiscal year capex for the quarter of 7.2 million representing 1.4 percentage of sales in line with our capex light business model. So the year-to-date free cash flow after tax and capitalized lease payment is 78 million resulting in a free cash flow conversion of 34 percent. Our call option to acquire the remaining 45 percent minority stake in exploding kittens was exercised during the quarter with the closing and cash out expected during the first half of the calendar So to conclude, the strong P&L performance delivered during the third quarter is expected to translate into further cash generation in the fourth quarter in line with the seasonality of the business. Then moving into our healthy balance sheet and capital structure. Both leverage ratios before and after M&A commitment are improving and going below two times in line with our medium target thanks to the positive development of both the adjusted EBDA and the latter reaching 322 million in q3 compared to 258 million in q2 i'm also very pleased that during the quarter we successfully refinanced 320 million floating rate bonds extending maturity from 2029 to 2031 and moving to a fixed rate the refinancing lowers our interest costs by around the 5 million per year, improves visibility on future expenses, and strengthens our debt maturity profile. In terms of credit rating, during the quarter, Fitch and S&P confirmed their double B minus rating, while Moody's upgraded to B1 with a positive outlook. In addition, we still have access to the unutilized revolving credit facility of 150 million euro. And with that, I'll hand it back to Thomas.

Thank you, Andrea. Before we open up for questions, we'd like to make some concluding remarks. As you have seen, this was a record quarter for Asmodee, with sales and EBDA at historically high levels. The solid performance, as we said, was driven by the European market, supported by strong trading card games. And the development seen in games published by Asmodee was mainly isolated to the U.S. The strong sales growth combined with the cost control drove an increase in adjusted EBDA and our margins, bringing your today margins in line with last year, solid achievement considering the unfavorable sales mix impacted observed during the last quarters. On top of that, we recorded a healthy free cash flow and we have a net debt on EBDA at 1.9 times in line with our medium-term targets below two times, with, as Andrea mentioned, an improved credit profile. Looking forward, the strong PRN performance this past quarter is expected to translate into further cash generation in Q4, in line with the seasonality of our business. We're actively sourcing new M&A opportunities. Some are delivering with the new bolt-on acquisitions of Cthulhu Death May Die and Sheriff of Nottingham, and the remaining stake in exploding kittens soon to be acquired. This past quarter demonstrates the strength of our business model and our ability to capture opportunities as they arise. Supported by strong underlying trends in TCGs, the current market environment reinforces my confidence that our diversified portfolio positions us to deliver continued growth.

With that, I will now open up the floor for questions. if you wish to ask a question please dial pound key five on your telephone keypad to enter the queue if you wish to withdraw your question please dial pound key six on your telephone keypad the next question comes from adrian elmlin from nordia please go ahead hi guys good morning a couple of questions for me please so first off can we have any further guidance here on the planned personnel investments kind of what numbers are we talking about and how much of these

sort of margin improvements that we saw here during the quarter is reflected in this you know timing effects i guess in the in the quarter of personnel so personal expense we do not provide the precise guidance on the cost basis line, just to remember. But directionally speaking, as you've seen during the current fiscal year, personal expense was mainly focused and triggered by our strong top line growth. uh these are types of uh personal costs that uh we'll keep on investing on uh to deliver sustainable growth uh in in in the future it is also true that some of those uh um personal cost increase during this year were driven by the fact that uh we upscaled some corporate functions in the context of Asmodee being a leased company, et cetera. So on this one, we will see more moderate growth going forward.

Right. So I guess that there's not a major deviation here that we should not extrapolate, I guess, the margin improvement, I guess. Right. Another question. We're also meeting some tougher comps here in trading card games, I guess, beginning of next quarter. Do you expect to continue to drive, I guess, year-over-year growth in this category? And given, I guess, the continued strong momentum in trading cards that we've seen as of recent this quarter as well, and Pokémon's 30-year anniversary coming up as well?

Well, first of all, we look at trading cards in the category overall. The category is extremely dynamic. We have some positive outlooks. Let's call it that way. We have the 30th anniversary effectively of Pokémon coming out. I think everybody saw the Super Bowl commercial, which is a statement to the power of the franchise and how it engages. So this is quite exciting for the upcoming year. You have a lot of other TCGs that have very good dynamics i mean we see continued performance on on one piece magic has shown good performance and you have the release or the recent release of riffbound so i would say that overall the category as i did mention in the in the report puts us with x with positive expectations for the future. Yes, there are a bit tougher comparables, but we see ourselves given the diversification of our portfolio and our ability to distribute all TCGs, but also have good dynamics on games to continue to deliver growth.

Okay, perfect. And moving, I guess, to the board game category, could you provide us, I guess, with a pipeline here?

Like how confident are you in your own studio's ability to return to you know growth uh when we will see some tougher you know tcg comps here so uh there are a few elements here first of all um as we did mention yes we had some uh negative developments uh on uh on the games but if you look at the sellout which is the the sales to consumers uh in the us for instance the market was uh was relatively flat and our sellout was in line with this which means that we still have positive outlooks for the future our performance was impacted especially by i would say some inventory positions that retail and retailers purchase strategies now if we look forward first of all the vast majority of our revenue is coming from existing titles that's the first thing that's important and we're constantly working on engaging consumers on those. You saw the recent announcements on Catan and Ticket to Ride with Netflix, all of this with the objective to further increase brand awareness and visibility and in the future generate additional sets. If we look at some of the products we're looking forward to in terms of new releases for next year, we have announced the new LEGO game in the Ninjago franchise being released at the same time as the Ninjago anniversary. We have Azul Kids coming out, we have DINUP, we have the future sets of Star Wars Unlimited, we have a refresh of Ticket to Ride Europe. So I would say that it will be still an active year. But what's important if you look back at the historical performance of Asmodee is that some years it's strongly driven by trading cards and in the other years usually when trading cards are less strong you have a relay that's coming from barb games okay perfect last question here if i may um regarding the tcg distribution in in the us could you give us any comments on i guess how riffbound might have performed in from your perspective in the us here versus europe you know pertaining the the you know kind of how you build your distribution in the us so in the us we are for rebound a minor distributor in opposition to the u to europe where we are the major distributor but we have all seen that i think the launch was was successful and that everybody agrees to the fact that there was not enough product to serve the entirety of the market the next So the second set just released, we will see how this product installs itself in the medium term.

Okay, perfect. Thank you very much. I'll get back into the queue.

Thanks, Adrian.

The next question comes from Simon Johnson from ABG Sundal Collier. Please go ahead.

It sounds like it's mainly coming from headwinds in the U.S. Can you talk a bit more about what has changed in the U.S. recently? if anything. Yeah, you mentioned the bigger retailers but you commented also with the online retailers and now it sounds like maybe similar problem but with the larger retailers. So a few different factors or what do you say about that?

Yeah, I think it's what you mentioned which is a few different factors. Let's remember also that the beginning of the year has been quite shaken up in everybody's supply strategies, ours, the retailers, by the various announcements on the tariffs. And I think that it has been a constantly evolving situation where I'm quite proud of how the teams reacted. Once we've said that, of course, let's not underestimate the impact of foreign exchange, which is quite material in the decrease. And secondly, what's important to look at beyond our own selling performance which is what we sell to retailers if they sell out as i did say we have since the beginning of the year over perform the market and even in the third quarter it was a quarter for the christmas period that was very much focused on lower price point products we captured very strong growth with exploding kittens and did have some headwinds on higher price point products but i would say in the grand scheme of things first of all it's fine our portfolio is diversified and secondly it's limited to the US so we should expect some some better trends in the future a bit on the

inventory problem what you said are talking about the online so on has that problem sort of get resolved and that is this then a new temporary problem or do you think that they're tied together in some way and that there's still an overarching inventory problem situation in the US that could...

Hi Simon, now if I can complement what Thomas just said I think that the selling reflect the fact that the retailers you know continue to carry inventory and they are prioritizing working through their existing stock. We are therefore aligning our shipment with the current inventory position at retail. Their inventory level remain manageable even though in some cases they are slightly above historical levels following the market trends. This is why as a result we are adjusting our sell-in where appropriate, including being more selective on shipments to certain partners, because we want to support a healthy flow of inventories within the whole value chain. So we are working closely with them, with our retail partners to ensure that the inventory level across the channel remain balanced and healthy.

Yes, they are going back to more normal levels.

What you are seeing right now in board game specific or high single digit rates?

Well, I think it's more in line with your first assumption, which is low to mid single digit. after that what we see also is that there is a bit of competition at retail level between especially on cash allocation in hobby between trading cards and board games so as we did say when you have one category that is extremely strong the other one is a has a bit of headwinds and it's for us it's okay because we look at the group holistically and all categories that's what drives the growth surely if we see a stabilization in I mean would that mean that there's in the past it's what we've seen again it's not fully mechanical but yes hey and you continue to do a few smaller bolt-ons of maybe a bit more meaningful torque more comfortable comfortable now when you have a gearing below two terms yeah i mean without being specific uh the activity in the pipeline is in accordance with our plan and the smaller acquisitions are faster ip ip acquisitions and asset deals are faster to execute so i'm satisfied thanks simon thank you the next question comes from nicholas langlet from bnp paribas please go ahead hello hello to my hello andrea so i've got question, please.

So first of all, on the US market, it was mostly stable in Q4. Are you seeing any improvement in the consumer behavior heading into the calendar Q1? And you also said that you work closely with your US team and partners to adapt to the market evolution. What are the main initiatives you are planning for the US market? Secondly, on Star Wars Unlimited, can you comment on the sellout trend during the quarter and if there are any specific initiatives to support the game over the next few months. And lastly on cash return, so you should end the year below the two-time data BDA, could you consider starting a dividend on Fuller 26 results? Thank you.

Thanks Nicolas for your questions. So first of all on what we do in in the US, We'll continue to serve the market on the products that sell well, especially the lower price point ones, so leveraging exporting kittens, which also, I would say, reinforces the appeal for us acquiring the remaining 45% of exporting kittens. In parallel, of course, on the other product lines, we are actively working on commercial deals and commercial actions to have a more positive trend let's call it that way on those they have seen very strong growth in the past years so you see ups and downs it's uh it's not unheard of um but clearly yes it's uh it's mainly sales and marketing actions from the local team to adapt and also to adapt to as we did say the purchasing strategies from from the retailer so So both working on the consumer side, but also on the retailer side. If we talk about Star Wars Unlimited, as we did say, first of all, we look at the 3CG category overall. That's the model. Right now, it's the distributed TCGs that see the strongest growth. On Unlimited specifically, same time last year, as I did mention, we had reprints of set one and set two. We had very high demand for set three. We see some more stable figures of the past three latest releases. And then, of course, one should not underestimate how the category is competitive with some big brands having been released. We did mention Riftbound. What we do is that we try to continue doing our best in supporting the game, having great sets, having great content in the sets, having strong activation and organized play. So here the idea is to continue build and give it time. Finally, on your last question, as you did note, our debt ratio on adjusted EBDA is effectively below our target of two times. So it would be reasonable to accept for the board, because it's the board's recommendation, that they would provide the recommendation in terms of excess cash allocation as part of our Q4 report.

Perfect. Thank you very much.

The next question comes from Jacob Edler from Dansky Bank. Please go ahead.

Hi, Thomas, and hi, Andrea, and thanks for taking my questions. I think most of my questions have already been answered. But just a question here on the gross margin. I obviously understand the mixed attributes in the quarter. But maybe more specifically, presumably, I mean, if we listen to Hasbro's numbers and also what you said in the report, obviously Magic and specifically Avatar was very strong in the quarter was that also one element pushing the gross margin you know down a bit further and then secondly was there any elements of more discounting um for your let's call it board games that also affected the margin this year relative to last year i think it's uh both statements are are fair so there is a uh sales mix within uh uh within within the various categories based on various commercial agreement and margin then Q3 and this

is something that could also pursue in Q4 as promotions as a normal course of business as well as some provisions, normal course of business that are booked in Q3 and Q4 based on how the activities is unfolding in the P&L.

So this is really a normal course of business for Asmodee as it's always been in the past and will continue, yes, in the future in terms of seasonality. yeah very good and just a follow-up i guess on gross margins i mean obviously there will be releases that affect the mix within distribution between you know different quarters but given the continued momentum in you know one piece and also the launch of rift bound would you say that these products are um you know contributing underlying to the to the mix here within distribution as we look ahead yes these are products that have no major impacting either positively or negatively compared to the rest of the category, let's

call it that way.

Yeah, okay, good, and just a last question on my side, you know, these deals you've signed with Netflix for Catan and here recently for Ticket to Ride, I understand that I guess the main upside is to drive, you know, engagement for the physical products, maybe there are some royalty elements in it as well, but are there any upfront components, you receiving some cash from Netflix when you've signed these deals or how should we think about it?

We do not disclose the details of the deals, but very clearly the main objective for us is not in the direct cash or direct revenue that we get from those, it's really the brand exposure and the ability for consumers to enjoy their favorite brands in various ways of entertainment thank you for answering my questions thanks jacob the next question comes from eric larson from seb please go ahead hi and good morning i just have one question which is more high level uh seeing your numbers looking at peers it's quite obvious that the tcg space

or rather hobby space in general the spend continues to do quite well so could you give any insights to what extent this is driven by no existing hobby players new players is it you know the mass market coming in more just any color there would be interesting it's a mix of all of this I think that first of all it's linked to the high quality of the products that are available are are being released on the market.

I mean, the work that is being done by the Pokemon company, by Hasbro, Wizards on Magic, by Riot and their partners on Riftbound, by us on Unlimited, by Bandai on their own TCGs, I would say that the quality of the product is extremely high. The franchises also have a very strong appeal to various audiences. That's something that's quite interesting, is that it brings new players, fans of the respective franchises in the universe. And then lastly, I think that there is pleasure from players in the collectability of those products beyond the gameplay. of course there you have also very significant part of people that that enjoy those to play but that varies from game to game so it's a mix of all of this but but the one thing that one can say is that more and more people enjoy training cars okay that's interesting thank you thanks Eric the next question comes from Martin Arnold from DNB Carnegie please go ahead guys um i have a question on if you could talk a little bit about the upcoming sets

and expansion that you plan for 2026 and and timing for it and also if you could comment anything on what you in terms of effects from events by pokemon in relation to the 30 year anniversary and clarity on the timing for these things that could impact your TG sales?

Yes. Hi, Martin. As you've seen, the Pokemon company has launched the 30th anniversary. They will detail what will happen at the upcoming Pokemon days later in the month. so i would say it's their remit to announce things not ours so i would ask you to be a bit patient and you will get some answers there but what we have seen is quite exciting and if we look at what they've done in the past it was quite quite amazing the super bowl ad was was very strong consumer response or mentions online were also very, very strong. The rest of the TCG category, everybody is lined up with their own releases. So this should unfold without any major surprises in the upcoming quarters. And finally, as I did say, we have some nice games coming up, uh either in q4 and in uh and in the upcoming quarters q4 looking forward to uh to the one we did have uh i forgot to mention that uh it's outside the quarter also some good nominations uh at the asdor uh in france uh both for toy battle and for take time um which are two recent releases um so yeah it's um it's good perspectives for the future And on your comment in the report there, Bas, that you think your position to deliver

continued growth, do you expect that your events and your growth initiatives will be enough to bring Tabletop back to growth in your next six years?

Our ambition is to bring those to growth in the long to medium future. I will not give guidance on the upcoming year, but it would be logical that it is one of our main focus of the upcoming months.

Okay, thanks. And my final question, maybe to Andrea. Could you repeat the comments that you made on the cash flow in the period after q3 about the receivables etc i'm sorry what's the question then so i think you you in in your presentation you commented on about on the cash flow um so far in in q4 uh if you recall but could you repeat what you said because i think really hear it no i think that the the the pnl uh the pnl in q3 uh uh is uh encouraging with respect to the uh to the free cash flow generation of uh uh the company currently and uh on the year to go

on the remaining uh on the remaining quarter of uh of the uh of the current fiscal year uh so So, we see the free cash flow generation again, following the normal seasonality of the business. And I have highlighted the specific factors that have impacted the current fiscal year with respect to inventories and payables that are a little bit more specific to what's going on right now. For the rest is, again, free cash flow generation as usual.

And should we see the historical patterns for the second half to be sort of similar this year? With the start of Q3, it looks similar to in the past and it's fair to assume it's similar to the historical numbers also in Q4, right? In terms of seasonality patterns.

Yes, last year Q4 free cash flow generation was really high with the distributed TCG business started to re-kick in with strong dynamics during Q4. I don't know if you remember, but we communicated about an extremely exceptionally strong Q4 free cash flow generation last year. So, just please remember that. So, then the Q3 free cash flow generation plus the year to date position ourselves to generate once again strong free cash flow in terms of conversion ratio, not as strong as last year because of this exceptional Q4 that we benefited from during the last fiscal year.

Okay, perfect. Thank you. That's all for me.

Thanks, Martin. Thanks, Martin.

The next question comes from Ricardo Ciancilla from Deutsche Bank. Please go ahead.

Hey, good morning. Thank you so much for taking my questions. Most of my questions have already been answered, but i was hoping if you could touch upon you know your capital allocation priorities given that your leverage is now modestly below your you know your uh long-term uh target level do you anticipate uh you know more aggressive m a do you anticipate you know increasing you know shareholder returns do you anticipate paying even additional more depth so any color will be any color that would be very appreciated and on the M&A side you know are there any opportunities that you or not a specific companies but any sector or any type of business that you feel

that would complement your business from an M&A perspective thank you yes thanks for the very good question so if you look at the capital allocation what we look forward to there is the the remaining 45% of exploding kittens to be required, that we mobilize some cash. Adding on top of that, as we did say, our M&A engine is nicely running up. I will not comment on specific ongoing projects, but as I did say, I'm satisfied with what we have in the workings. What we're looking for, as you asked, is in priority studios and intellectual properties, because we already have a very strong distribution reach, and then maybe to complement some distribution reach here and there, depending on the strategic advantages this would provide us in specific territories. But again, I think the priority is on IPs and creative capabilities, which is what we have been delivering up until now.

If I may follow up, is there any particular leverage level that you consider the max leverage for this portfolio in case that there is any opportunistic M&A opportunity or is there any project that could result into higher leverage just from a knowledge perspective on what would be the maximum amount of leverage that this company could handle?

So I will not provide one figure, but if you look back, we've operated for many years under private equity. You know the types of leverages that can exist under there, and it hasn't prevented us from thriving. So I think that we can afford higher levels of leverage. Of course, now being listed, we prefer to remain around the levels that we have today, but we could consider temporarily in order to finance some significant opportunities. Let's see. Again, this is elements on which we will strategize with the board once the opportunities arise.

Appreciate all the great answers. Thank you so much. Thanks a lot.

The next question comes from Rasmus Engberg from Kepler Chevrolet. Please go ahead.

Hi, good morning, Toma and Andrea. Just two questions remain on my side. Firstly, I have the feeling that what you have done in terms of M&A is not kind of your typical M&A. It's small deals. And the fact that nothing kind of larger has happened, is that there any explanations in terms of pricing or timing or the fact that you wanted to sort out exploding kittens or is it just, it takes two to tango?

As I did say, the smaller IP deals are faster to execute. It's a question of timing. Yes, we do have exploding kittens in parallel, but this was planned for quite some time. And as I did say, it's a question of timing. any more significant deals will unfold in due time.

All right, and the other thing, you talk a lot about the US which is by and large a fairly small part of your business. What does sell-in look like in Europe which has been your sort of growth engine for some time? Can you comment on that?

The selling has been stable on the game side and obviously strongly increasing on the TCG side.

Thanks.

There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Yes, we have a few written questions. We have a question from Robert on effectively the U.S. and acknowledging the tough comparables that we had seen. You were asking what caused this number last year. Last year was the release of Stars Unlimited, was very strong dynamics on our existing brands. And so in the more recent quarter, I would say it's a normalization of this and some lower selling, but again, whilst the sellout remained stable. We have a second question, which is on the long-term trends of TCGs over the next five years. Of course, there is no way of foreseeing the future. However, what we see is that overall the category is very strong, that strong IPs are either existing or have been announced to be released in TCGs. And here, very clearly, ASMODE, we are well positioned as a leading distributor in Europe. If we have a look at external market studies, they were expecting normalized or long-term growth of around mid single digit or up to mid single digit. But again, we know that the TCGs can at some years grow faster and in some years slightly recede. But the long-term trends I have a question from Eric, how competitive is the publishing landscape for new TCGs such as Riftbound and are you a relatively leading position in any other regions than Europe in terms of distribution? So I would say the TCGs find their audiences and then it comes down to how well the work is done in first working with stars and secondly in the community animation and of course the quality of the products that are released. I think Riftdown came in with a very strong IP, and we will see it's just one full set and the beginning of the second set that have been brought to market. Our position, of course, is quite unique in Europe. Elsewhere, we also start distributing TCGs in South America, in Asia, and a bit in the U.S. although it's not really material at this stage to be a distributor in the U.S. Can you share any insights on the upcoming digital Star Wars collectible card game and what's your view on this and could it potentially impact the player base within Star Wars Unlimited? I don't have specific views on that game however if we look at other TCGs when there is a digital version usually it does not harm the sale of physical products that's what we've seen with digital versions of Pokemon or other TCGs. So I do not foresee it being a bad news. And the last question from Alex, is there any plan for installing dividends? As I did mention, it's a prerogative to the board that will bring their recommendation in line with the last part of the Q4 results of a full year results to be then submitted to our AGM. That's it for us. Maybe as a final concluding remark, I would like to thank our teams because delivering such growth comes with a very, very high engagement of our teams. I'd like also to thank our partners that continuously renew their confidence in us. And finally, as I did say, the numbers speak for themselves, and this quarter is a very strong illustration of the strength of Aswode's unique model in our industry. Thank you very much, everybody. Thank you very much.