Everplay Group (LSE:EVPL) — Half-Year Results

0:00 Good afternoon, and thank you for taking the time to meet with us. Before we jump into the half year results, we'd like to share a more in-depth introduction to our business CEOs and what we are building. As a global brand, Team seventeen Group represents the spirit of independence.

0:24 These days, we are much more. Create amazing apps for the youngest kids kids, for the oldest adults, and all the big kids in between. There really is something for everyone in our portfolio. Here's a short introduction from our business CEOs. StoryToys. I'm Emmett O'Neill, CEO of StoryToys. Here at StoryToys, we work with internationally recognized global brands. Brands we love like Disney, Pixar, Marvel Entertainment, Penguin Random House, and The LEGO Group. We take their brands and make the highest quality apps and games for very young children. I've been working in interactive technology for over twenty five years now. I've worked in publishing, advertising, film and television.

1:14 But since joining StoryToys almost ten years ago, I focused exclusively on making children's apps. Kids these days start using devices from a very early age. Our mission is to ensure the content we create is age appropriate, educational, but above all, lots of fun. It's also really important to us that we create moments that parents and children can share together. The StoryToys team consists of creative, technical, and commercial people working together to create best in class interactive experiences. It's a mixture of art and science. Hi. I'm Theresa Foster, CCO for StoryToys. I have over sixteen years experience in mobile and six years experience as a mom. It's been a really exciting year for Storytoys.

1:59 Following the success of our other titles of the LEGO Group, we had our best launch ever with LEGO Duo Marvel. On top of that, three of our flagship apps received Editor's Choice, the highest accolade on the App Store. Our monthly recurring revenue has grown substantially in the first half of twenty two, and we reached over 250,000 subscribers through direct subscription to our apps. We've been growing rapidly, and our team has doubled in size in the last year. And now as part of the team seventeen group, StoryToys is really ready to take off. We've extended our licensing contracts with our key partners and even some new ones too. Now instead of launching one new product every one or two years, we have several new exciting titles in development. Making content for young children isn't easy, but the combination of the talent and story toys

2:47 and the experience and support team seventeen provides is allowing us to do this at scale. It's a really exciting collaboration. Hello. I'm Julia Puffer. And I'm Tim Schmitz. We are the two CEOs of ASTRA GROUP Entertainment. ASTRA GROUP stands for high quality development and publishing of sophisticated working simulation games for all platforms. With bus, construction, firefighting and police simulator, we not only established four valuable brands, but also consider us being the number one in its respective simulation segment. Our games are nonviolent, family friendly, and target a broad audience.

3:34 We believe playing together is one of the best properties of video gaming. To offer highly detailed gameplay and the most realistic experience, we collaborate with the world's leading vehicle manufacturers and internationally well known brands. In combination with vibrant game environments and an easy access into our games, we make childhood dreams come true.

4:03 I'm Michael Patterson, CEO of Team seventeen Digital. I'm fortunate to have worked in the game industry for over twenty six years now in various roles including marketing, development, business, and platform. As an avid gamer myself, I'm very proud to be working at such an exciting indie games developer and label. Our mission here at Team seventeen Digital is to help exceptional people deliver the most eclectic, diverse, and innovative games portfolio on the planet. Our games span all platforms from PC, console, to mobile across a wide range of genres for all different ages that capture the hearts and minds of our players. We come together as a team that loves gaming and are as passionate about the games that we make with our development partners as we are about our own developed titles. Team seventeen Digital is committed to fostering an inclusive vibrant culture that celebrates equality and diversity where we strive to create a sense of belonging for all.

4:57 We truly believe that if we meet the needs of our Teamsters, our development partners, and our players, we can continue to support the creation of new and exciting indie games for everyone to enjoy for many, many years to come. Next slide, please. Now to take you through some of the highlights, from the first half of the year. As you saw at the start of the year, you saw high quality acquisitions that enabled us to have a broader geographical reach and operational reach as we build a group portfolio for all ages as you saw in the VT. Alongside adding additional first party IP, such as Howl Let Loose to teen seventeen's Game Sable, which sits alongside our franchises such as Worms, The Escapist, Golf With Your Friends, and others such as Alien Breed, plus addition of ASTRGON's EVERGREEN IPs such as construction, fire, police, and bus simulator.

5:59 It's been a busy nine months, and all are integrating well from full integration of the label over now known as Team seventeen US into Team seventeen's games label,

6:09 which brings lots of group knowledge of building mobile subscription games. And he's already looking at many of our first party IPs to bring to mobile, to Astragon, which is a more soft integration where we are helping regarding mentorship, strategy, but more on Astragon later. Moving on to Team seventeen's games label for the first half of the year. We saw as guided a quieter sorry, the slide needs to go back one. Thank you. We saw as guided a quieter new release pipeline compared with H1 twenty twenty one and a heavy focus on our launch portfolio, which grew double digit percentages driven by over 20 content updates across 12 titles on multiple platforms, covering games like Hell Let Loose, Worms, Golf of Your Friends, Monster Sanctuary, Neon Abyss, My Time at Portia to name a few. All driving that excellent h one life cycle management that we do so well across our back catalog.

7:08 Astra Gon continued to build momentum in h one with Police Simulator that launched as a new IP last year and other first party IP supported by 10 additional downloadable content updates launched across all their own IP on multiple platforms. The physical distribution side of Astragon remains strong, boosted by a range of diverse titles across the portfolio including Farming Simulator which continues to experience significant adaptation in Germany as you would expect from such a high profile release from Giant. StoryToys continued to build upon the annual and monthly subscribers and saw this almost doubled to 250,000 subscribers of their apps.

7:55 They had a good h one and also launched over a 100 app updates across their portfolio. For those that don't know Storytoys apps, think of an app as the base product with in app purchases for additional content or subscription to obtain content updates. Parents can sign up for a subscription to save purchasing in app single updates for the base app. LEGO DUPLY MARVEL, which Paris has shared, has been their most successful launch today. Also saw any opportunity to talk about Marvel. I'm a big Marvel fan. So the Hulk update and Iron Man updates earlier this year. They have also extended their relationships with LEGO, a multiyear deal, multi titles, and extended their term with Disney also.

8:42 Our people, really important to us. Head count increased by 80 to 345, 52 as part of the acquisition. Attrition rates, as we shared earlier this year, is back to historic single digit levels. Each of the businesses are growing their teams and have a net increase of headcount at the end of June. We also commissioned a half year internal employee engagement survey update following the one we shared at the beginning of the year. There is improvement across every area with overall engagement now up to 84% from two thirds at the year end last year. Key points to take away. 90% of respondents said they are proud to work for Team17, previously 83%.

9:30 94% believe Team17 is a safe and supportive workforce, previously 91%. Over 90% would recommend Team17 as a great place to work, and we will be updating the ESG part of our website following the roadshow with more information.

9:51 Group synergies, a really good start in h one through three key areas. One, leadership and employee working groups for key areas of the business covering knowledge, best practice and efficiencies across sales, marketing, development and production, alongside cost saving areas across our outsourcing and group buying power that gives us more leverage. Operational and IP efficiencies, as I mentioned, of utilizing reach, Team17 US fully embedded into Team17's games label, working on first party IPs as mentioned at the start, working very collaboratively regarding future strategies and benefits in the wider group on opportunities over the coming years. I'd love to share more specifically, but this is commercially sensitive detail and we look forward to sharing more in the future.

10:42 Thirdly, however, as announced in the RNS, Astragon have signed their first third party global partnership, a very promising early access game, Railroads Online, that will be managed by AstraGon as we help build it into a franchise. AstraGon are developing a third party label to help other developers with their knowledge of sophisticated simulation games, and we look forward to sharing more on that in 2023. On that note, could we please move on to the next slide for Mark? Thank you. Thanks, Debbie. Good afternoon, everybody. Just take you through some of the highlights starting with on the revenue side. So overall, revenues grew by a third compared with the same period last year. That reflects the the enlarged group with the acquisition of StoryToys in July 2021. So that impacted the second half of last year only.

11:32 And the label, Hell Let Loose and Astragon, that were all acquired in January 2022 this year. So it's really important when you look at our revenues, you know, despite that growth, actually, you know, we are second half weighted and and more weighted in revenues and earnings than we were before, and that that actually spans across all parts of the new of the enlarged group. If you look at the organic revenues from team seventeen, we were very pleased with the results. This know, this half is comparing to a very solid half last year, which was that we showed growth against the COVID impacted half of twenty twenty, so a tough comparative. Also, I think in the marketplace out externally, we've seen downward pressure on spend excluding mobile. So we're really pleased that core business was able to match the revenues effectively from last year demonstrating double digit back catalog growth alongside just a single release in the first half, but but plenty to come in the second half, which kind of points to that h two weighting.

12:29 In terms of breakdown, revenues, 75% of the 77% of the of the group's revenues come from the games label, and you saw that predominantly from the back catalog. ASTRY GONE is around 15% with a mix of their own first party IP, which is a simulation simulation titles alongside their physical sales, which which include Farming Sim, which was a really strong first half, having launched an update.

12:56 Giants launched that update for them in the back of last year. And then StoryToys benefiting from multiple app updates, over a 100 updates to their three key licensed apps, generated roughly equivalent to about 8% of our revenues in the first half, so 4,600,000. In terms of first and third party IP and sales, first party IP has grown. This year, it's almost double what it was in in value terms, and that's benefited from us acquiring held that loose that was a third party title. And that becomes a first party title for us this year alongside Astracon's for simulation titles. So those are are helping boost the first party sales up from last year. StoryToys apps with their global license partners, they contribute to third party sales, just so it's clear.

13:47 Just moving to the next slide. So in terms of gross profit, gross margins, there's a there's a number of things, impacting them now with the combination of the three businesses. Games label and story toys are broadly delivering similar levels of gross margin. And currently, ASTRGON have a slightly lower have a lower gross margin because of that physical distribution and their strong performance that has a lower margin than than the owned owned IP. As we mentioned, that strong performance in the first half was influenced by farming simulator. In addition, we're also seeing increased investment in live titles. So for for those of you that don't know completely about our business, we will expense lots of development costs that are put into creating new updates for titles that have been launched. So after they've been launched, we continue to create new content.

14:43 You know, team seventeen produced 20 DLC content updates in the first half of the year, and we're doing more support to live titles such as Hell Let Loose, and all of those are fully expensed through the cost of sales that are having an impact on on gross margins. In terms of the admin costs, what what I've done here is we've stripped out those noncash acquisition related accounting charges that in in the p and l under a statutory measure. They're they're non cash. They relate to the acquisition related accounting adjustments. So to give a clearer comparison year on year, you can see admin costs are up 8,100,000 from down from 4.4. So actually, 3,000,000 of that relates to the enlarged group and having their other businesses on board with all of the heads, 52 heads came with them and all of the overheads.

15:38 We've also got headcount growth, as Debbie pointed out, so 28 more heads in the first half. That that's driven some of the costs through the additional heads, plus we we we did put through salary and cost of living in increases in March to be able to make sure our teams were, you know, remunerated effectively given all the pressures at the moment in the marketplace. Just moving on to adjusted EBITDA. This, again, our adjusted measures exclude those non trading acquisition and share based payment charges, and for us gives a truer picture of growth in terms of value and earnings, and that's continuing to grow and also has benefited from the acquisitions made in the year. So moving to the next slide.

16:26 Sorry, now go back. So like the final key financial slide. So in terms of net cash equivalents, the group remains highly cash generative always has been and has a very high cash conversion. It is impacted in the first half, so it's going backwards because we used cash to invest in the acquisition. So in January, we acquired both Hellot Loose and the label. We used cash as well as some shares to acquire those businesses. So overall, actually, business remains highly generative. It's got an elevated cash conversion in the first half because of actually, that's linked into the the acquisition of Ashtagon where they'd acquired all of their stock for their physical distribution and that reversed back with cash coming into the business. So stripping that out, the core business has a cash conversion of 111%, which compares to 108 prior year. So continuing to be highly cash generative and with a strong cash conversion.

17:23 If you look at the bottom line in terms of adjusted EPS, again taking out those non cash, non trading related charges, it reflects for us a measure of value growth in the business. And actually, as we know, is impacted by the second half weighting, so we'll expect to see the EPS, adjusted EPS and EPS growing in the second half. And so that overall EPS is a statutory measure. It's timing affected in terms of we issued 14,100,000

17:53 shares in the first half to support the acquisition of Alastragon. We've got all those acquisitions, the PPA as a purchase price allocation of charges, accounting charges, and then weighed up with the second half weighting. So we'll effect to see, you know, that flowing through in the second half. Our effective tax rate is at 20%. That's where we guided the market. And then, you know, our full year expectations for EPS, you know, given all the things we've talked about with H2 weighting, we'll expect the growth in that to remain on track for the second half. And that will be in line with expectations, market expectations for the full year.

18:29 So with that, I'll hand back to Debbie because she's going to talk about what's coming up in the second half. Thank you, Mark. Have a drink of water. As you can see, we have a very busy H2 ahead. And whilst we are very aware of the global cost of living issues, we'll feel confident due to the diversity of the products across the group, attractive consumer pricing, we are not in the $70 per game range, coupled with many known franchises launching from AstraGon,

18:57 globally well known brand updates for apps over at StoryToys in addition to that flow through of revenue from the subscription that we've already taken that spread over twelve months, and Team seventeen's games label, a very diverse portfolio lineup with two games already launched in the second half. And to talk about those, let me just explain. Suite Transit launched in July and Thymesia launched in August, both performing in line with management's expectations. Thymesia achieving number one global game on Steam at launch and also doing incredibly well on PlayStation, and Suite Transit achieved top five global game at launch. Suite Transit is an early access game, and we're pleased with how that started. And we're looking forward to the rest of the year. Now just to talk through the rest of the year, you can see we have five more new releases, which will bring a total of eight for the year.

19:52 Marauders is already announced. We'll be launching in October. That's our tactical first person multiplayer looter shooter set in a sci fi universe, and that will launch on PC. The Night Witch metro or Metrovania adventure game is launching in the final quarter of the year alongside Sunday Gold, point and click turn based adventure game. Equally, Bravery and Greed, a beat them up roguelike dungeon brawler for four players, and Batora, our interplanetary action RPG.

20:23 Alongside the new releases, I also want to just touch on we have two games, exiting early access on Steam. Honey Eye Joined Occult is coming out of early access. We also have Hot Co's Life launching out of early access and onto consoles as well. Alongside that, we will also be doing a number of updates to our portfolio that's performed incredibly well in the first half of the year. And you can look forward to additional support, for titles like Hell Let Loose, Falling Dark DLC launches this month on console.

20:55 Golf with your friends, the sports DLC update is this week. Overcooked All You Can Eat, World Food Day, and accessibility update is in October with new content and other planned updates across the back catalog portfolio. Team seventeen US, their planned development for mobile title release is on track and the latest update, Wimbled Golf, for what the Golf continues to have good visibility and traction on mobile. Note, when on Team seventeen US, the the mobile subscription games that we're working on, it's not in our hands to actually announce those titles. They will be announced by the platform holders, and we look forward to sharing more over the coming months with you on those titles launching this side of Christmas. Over to AstraGon.

21:41 AstraGon, will be launching Construction Simulator on the September 20 across PC and console. Bus simulator city ride, it will be the first outing for bus simulator on mobile devices. It's also launching on Switch. And police simulator patrol officers will leave early access and also launch on consoles in November. Delivery of those titles, all three of through their submission process and all there is no risk to those titles regarding launching this year.

22:17 StoryToys plans to deliver more than 10 app updates alongside multiple smaller updates across its portfolio portfolio and will continue to strengthen its subscription app offering and network of global license partners. You will see updates to LEGO DUPLY World, including this month garbage and recycling. This is about environmental awareness. We tried to show the child that recycling is sorted out in the house but leaves the home and is ultimately made into new useful things. There is also problem solving and sorting covered too.

22:54 You'll also see Doctor. Doctor. I won't take you through what each of these are. I'll give you a brief overview. You will also see from Lego Duplo Marvel a number of updates before Christmas, including fairground superheroes and Avengers holiday. Over at Disney Coloring World, you will see a number of updates each month through now till Christmas, September's being Pinocchio. And on that note, I'd like to move on to the next slide, please. Thank you. So regarding outlook, a solid start to the year. We've entered into the second half with positive title releases. We believe we have a good portfolio of titles. We're always cautious in terms of locking down title releases. We're confident in the titles that

23:40 we are sharing. Marauders will definitely ship in October. I have the release date. I can't share that with you. It will be announced via our games PR side. We have a very exciting new release schedule in h two. New releases in both Astragon and also the games label, continued additional DLC and app updates across all parts of the business as I've just shared. First, third party simulating title secured under Astragon's label as well for their new third party label. On that note, I'm gonna hand over to Mark. Yeah. Thanks, Debbie. So we believe that we we're very well positioned as an enlarged group. We we've got a a senior leadership team with some you saw on on the video, some very experienced CEOs leading the businesses with Michael Patterson brought in on team seventeen, Tim and Julia in Ashtagon, and and Emmett and Paris are in in StoryToys.

24:36 And and they are helping us to continue to to live on our growth plans. So that's we're supported by those recent acquisitions that are accretive. We we can see growth opportunities in both of those businesses. We've got a very, you know, strong underlying business, core business that you saw in the first half was able to demonstrate, you know, real growth in the back catalog. I mean, that's a really important part of of the core business. Then you can then add on a growing momentum of of new releases coming out from not just team seventeen, but you've seen Debbie talk bringing out construction sim. They brought out police update, yes, last year and and bus sim 21. So they're they're bringing new content and broadening that games portfolio, which is really important. And that's alongside the overall eight new releases being brought into team seventeen.

25:28 But all of that's building up that consistent core business with a a really strong content port of of IP portfolio. And and we've really got, you know, a very healthy pipeline of development across the group, whether that's, you know, new opportunities, you know, in story toys for other licenses, which which we'll talk about when they come to market at some point soon. Also, you know, additional, you know, simulation titles, and as Debbie talked about, the first third party simulation title secured for them to add to their own, you know, higher margin business coming in the future. And and that is alongside the, you know, very established green light product acquisition process that goes on in team seventeen that, you know, consistently gets, you know, significant numbers of of new titles being brought to to us through through third party development partners. So, you know, a very healthy pipeline.

26:23 So so I think that means for us as a group is that, you know, we're very aware as a as a as a leadership team and with the board that there are some very challenging broader macroeconomic headwinds in terms of inflation and cost of living pressures. But I think we've got a very strong business. You know, the business is being contributed across an enlarged group of biz of new acquired businesses, and that we're confident that we will continue to meet, you know, our own ambitions and and track in line with some expectations across the market. So I think, Debbie, that brings us on to the next and last slide. Thank you, Mark. Talking about pipeline, Mark just mentioned the strong development pipeline across the enlarged group. We've just shared some of what's happening in the half year for f y twenty two.

27:12 We've already announced for team seventeen's games label, seven of the titles that are launching in f y twenty three, and I'm just gonna recapping for those of you who don't know. So we've got the sequel to Blasphemous launching in f y twenty three. We announced moving out two at Gamescom recently. We'll be launching next year. We've also announced a new title called Dredge at Gamescom, which has been received incredibly well. You'll also be seeing Gord. A lot of people have been talking about Gord, is, you know, this is a team that has been created from CD Projekt and 11 from the Witcher side, and that will be launching next year. You've also got autopsy simulator that we've announced, which is getting good traction, and equally, killer frequency, which is a VR title as well.

28:05 We never share the amount of titles that we're working out long time, I can the pipeline goes all the way up to 25. I've just shared the seven that we've already announced for next year, and we have a few unannounced titles as well yet to share. That's very important to us. IP ownership and growth of owned IP, partnerships with global brands, and then large back catalog content portfolio. This is very important. Growth of own IP over the last few years, you've seen the acquisitions of Golf of Your Friends, which we bought from third party into first party. Hell Let Loose, we've also bought from third party into first party. You've seen our partnerships with GROUP Global Brands, and you'll hear more of that at the year end regarding the activity that's going off with StoryToys, but also Astragon with the licensing partners that they work with.

28:52 And enlarging that back catalog content portfolio is really important. We truly have a vision to build a portfolio of content that is for all ages, and that's very important to all of us. Our footprint, leveraging expanded teams and geographical reach, very important, capabilities and facilities supporting across the wider group. We have a number of working groups as I've shared. We still have a way to go. I think we've done a lot of work in the first nine months. I'm really excited about what we can do as a combined group over the next twelve months where we're sharing all that knowledge and experience as well. M and A, build on recent acquisitions and target right future opportunities. I just wanna share, at the beginning of the year, you saw a number of M opportunities that all happened at the early part of the year. I can tell you it was a combination of a couple of years of hard work.

29:44 And, you know, we are incredibly selective about what the kind of m and a that we look for. It's it it has to be the right fit. But also, if we're looking at IP, it's not about IP that we think is just gonna be successful for one or two two years. We're looking at IP that will be successful for much, much longer than that. You know, we're looking at ten, fifteen years and that's really important from us. You know, in the way that you see the Worms franchise is being played, you know, for over twenty five years. You know, games like Golf with Your Friends, they'll be they will be played in ten years time across multiple platforms, devices, however we do that. And that's very key to us in terms of looking at the kind of IP. I think, Astragon, you know, to give you an example, I've been I've been looking for a working simulation company to join our group for a few years. And one the things that I came across was a lot of the companies I were looking at only had one IP, and they were very specialist in one area.

30:45 And I was looking for more creativity. Astragon really appealed to me from the creativity side of them. If you look at firefighting and police patrol, those two new IPs were launched in the last couple of years and it shows the creativity alongside bus and construction that they're building. And they're evergreen. And evergreen's really important. Solid foundations, well known brands have a long life cycle, and that really appealed. So IP on m and a is very we're very careful about what kind of IPs we bring into the business. The other things that we look for, you know, we're always looking for additional development resources. If we've got a partner where they're doing work for hire for us and it makes sense to pull them in house on a project, that's fine. We're looking at those areas as well. But we will continue to be incredibly cautious about the kind of companies that do join this group, having the right fit. And in part, that's what's really benefited the first nine months of this year. I feel like I've been working with these teams for a few years, and it's to be honest, it's an absolute pleasure working with the new acquisitions as part of the wider group.

31:55 Don't expect us to be going out there and doing a huge amount of deals. We are going to be very selective on how we choose them, how they fit into our business, what how they will enhance profit, but also can they accelerate our vision and our strategy of where we want to be over the coming years. If they can accelerate and we know that we can work with them to improve margins, etcetera, we are looking at those opportunities. Regarding the outlook, the group is positioned to deliver growth and meet our strategic ambitions. As you saw in the VT, we have a very, very, very strong leadership team across the whole group, a lot of years of experience and a lot of knowledge. And, you know, we have quite you know, our ambitions are to build something quite special and quite unique. That's what drives us to do what we are doing. And on that note, I'd like to say, you know, we're coming towards the end of the presentation.

32:50 We're going to jump into the q and a, and we'll try to do as much as we can. If we can't cover all of the questions in the time, we'll take the time to go and try and update these post the presentation when we get free time at the end of the day. And I look forward to hearing more on the q and a. Debbie, Mark, that's great. And thank you very much indeed for your presentation this afternoon. If I may, I will just bring back up your cameras. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the top right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Debbie, Mark, as you can see, we have received a number of questions throughout today's presentation.

33:37 So thank you to all of those on the call for taking the time to submit their questions. And, Debbie, Mark, if I could please just hand back to you to run through that q and a tab. And where appropriate to do so, if you could please just read out the questions and give your response, and then I'll pick up from you at the end. Thank you. Thanks. So there there's a couple of questions, I think, firstly for me, Debbie, that you can then add to, and then there's there's another one for you. So the first two around linked to StoryToys. So the question's kind of around StoryToys was not profit making before. It's an ambition of ours to theirs to grow it to be number one global brand. What are the timescales to make it profitable? And where is the story to goes on that journey? Actually, story toys in '21 was profitable. I think what you'll see is it was impacted by all the acquisition costs that were on their side that affected their numbers.

34:27 But for us, it's a profitable business. It's adding to our EBITDA, and it's a growth story. They've increased their position in the global marketplace. I think they were number eight nine or eight, and they've gone up one or two places in that position in the marketplace. So for us, they are they are a profitable business. As you've seen, they launched Marvel as an extra app, additional app at the end of last year, and they've got other plans that we can't share at the moment for other license agreements. And they continue to put numerous app app updates through those licensed apps that are driving, you know, significant growth in the business. And that comes from, you know, I think as you've heard Debbie talk about, you know, subscribers doubling up to to to more than 250,000.

35:18 Mark Mark, can I just add on regarding what part of their journey they're at as well? Yeah. I don't want to duck questions. I want to be as transparent as we can be. I'd say that they are still at the early stages of their journey. I think what's going to be important, you heard Parisa talk about they were launching one title, app every one to two years and the work that we've been doing throughout this year to increase that with several launches over the next few years. Right. The other linked question is to to expand a bit on the subscription model, and I'll I'll start and then Debbie, you know, jump in, as we go through it. So, you know, for for StoryToys, their their apps, you can you can open up the app free and then it's a you can then purchase apps on an in app basis, in app purchase basis. But actually, they've also got a monthly and an annual subscription option.

36:12 And what we've seen is, you know, before we acquired them, they had one subscription model on Disney Coloring World. Actually, we've now worked with them and they've introduced a subscription option on Lego, and that that works for both of those, Lego Duplo as well as Lego Duplo and Marvel. And that's where we've seen some tremendous growth, and that's the numbers that I've talked about in terms of doubling subscription numbers. So, you know, what what it means is and and I perhaps should have mentioned it on the revenue pieces that we we only recognize, you know, those annual subscription models month by month. So, you know, what we know is that we're building up a significant value of that business in longer term sort of annualized subscription revenues that get recognized over the twelve months. Debbie, don't if you wanna add anything to the subscription model.

36:58 No. I think the one thing I would like to add is, look, we're still in the infancy on this. You know, Mark shared some of that there with you. Two of the subscriptions that are tied into two of the apps are one is just a year old, one is only ten months old. We still need to get more data, more information. Very excited and, you know, very pleased with how it's gone throughout the introduction since we acquired the business and did the work with StoryToys and their partners to allow the subscription models to run through. Hopefully, by the time we get to the year end, we'll be able share a little bit more information with you. But what I can say is it's going incredibly well so far, and we do look forward to sharing more at the end of the year in terms of how that kind of revenue split starts to break down within StoryToys.

37:48 Great. Thanks, Debbie. Next question would be it starts with congrats on your results, which is great. Thank you very much for that feedback. That's brilliant. What what are your goals for future international expansion, and where do you see management priorities, and and how will you look to deliver this? That's probably for you, Debbie, I think. Okay. Remind me when we get through it because I'll get carried away on one part of it. Look. We have you've you've met some of our leadership team. I know it's only via VT. I always smile. You know, Julia and Paris are you know, they're both in their mid thirties, I kind of think, wow. I've been working in the games industry longer than they've been around, but they are incredibly experienced with a lot of knowledge and a lot of experience right across that group. I think it's close to over two hundred years just in our leadership CEO team.

38:37 It's really interesting in terms of the way that we work together. Very important to me. It's very transparent and very collaborative at the top level, but we're carrying that through into the working groups across the rest. All of it, you know, bringing in the quality of people that we've bought in. You've seen Michael who's joined us as well from PlayStation. This is about the vision of what we're trying to build together, and we we're all very excited about where we see the industry being over the next five years. You know, there's not a lot that we can do about inflation and those cost of living issues right now, but we're all quite visionary regarding where we see the market being over the coming years. And so a huge amount of collaborative work goes off. We're all meeting person one or two times a month that happens and spend a lot of time together, but also video calls constantly as well. I'm very excited about building out that portfolio as I touched on the last page of the deck. What was the second part, Mark, about international expansion?

39:38 Yeah. Future international expansion. Yeah. I mean, look, it really comes down to the m and a piece that we spoke about. I mean, we have team seventeen US. Story Toys are in Dublin. We've got three UK locations, and we also have Dusseldorf in Germany as well with Astra Gon. We don't look at it in a way of let's go after let's do let's look for a company in x company. We look for the quality of the products and the quality of the business irrelevant of location. That drives our decisions in terms of expansion. But when you look at team seventeen's games label, they're working with lots and lots of partners all around the world, you know, and that's been part of our journey since 2014 and will continue to be so. Okay, Debbie. There's a couple of product ones. So two really.

40:29 One, are you working on Overcooked three? And could it come out in 2024? And the other one is do you when do you plan to port marauders on console? So lots of future questions. But yeah. Okay. The overcooked question, obviously, I can't announce. That would be getting a very big, telling off. You know, all I will say to you are new titles and additional platforms. You we will never talk about them on investor calls, retail calls, or anything like that until we make them public. You know? So all future game announcer we've got four or five unannounced games, you know, I think three of them coming next year. You know, I'm not gonna answer the EVERPLAY question. Sorry. I said I wouldn't a question, but I'm absolutely gonna duck that question because it's wrong of me to answer. Regarding MARAUDAS, MARAUDAS launches in October. It's gonna go into early access on Steam.

41:19 You know, I flagged this title at the beginning of the year as one of my games of the year for from Team seventeen's games label. We're very excited about working with the team on launching that into early access. Have patience early access games. You've seen what we did on hell let loose. You know, it's been incredibly successful. It was in early access for two years and then came on consoles. You know? Hopefully, we can achieve the same thing with Marauders. Okay. And two two last questions. So, are there any plans to take advantage of the Steam Deck? We already have a lot of our games on the Steam Deck. If you go and check out, I think we've got about 10 games already on Steam Deck, and we will be bringing more. I'm a fan of Steam Deck if it helps. You know? I keep I'm making my son wait till Christmas, though, for it. It needs to wait.

42:06 And I think the last one, looking at the time. So another nice bit of feedback. Great job with everything. Missus Herman is excited to play bravery and greedy with his kids. When we have a publisher working with a developer to release a game, generally speaking, what is the revenue split with team seventeen as the parent and brackets, for example, Ashtagon and Farming Sim? Now I I can start this and you can finish. Yep. We're clearly these are all commercial relationships. It's not going to be the perfect answer that you guys would really like, but we are bound not to share some of those commercial details. I think generally as a business, can look at our gross margins, and you can try and deduce it, but they'll range between a pure publishing deal, which will be at a lower level to where we do a significant amount of codevelopment work with our development partners, and that would be typically along the team seventeen side. So they'll go they'll they'll be quite a range.

43:02 But as you've seen, we do you might not be fully aware, but we do a significant amount of codevelopment work on the vast majority of our third party titles within team seventeen, which why we we were able to have such a strong business model with really, really high margins, I think, and and and deliver down to to high earnings at the bottom line. So I don't know, Debbie, you want to add anything to that. Yeah. I'd love to give you a straight answer. We can't. It's commercially sensitive information, and, you know, it wouldn't be helping us to make that more public. Yeah. So sorry about that, Helen, but thank you for the feedback. I'm looking forward to bravery and greed for you and your kids. I think that that's the end of the question. So Absolutely. Thank you, Debbie, well. Thank you very much indeed for taking the time to address all those questions that came in from investors this afternoon. And, of course, if there are any further questions that are submitted today, we'll make these available to you immediately after the presentation has ended for you to review and then add any additional responses where it's appropriate to do so. Debbie, perhaps before redirecting those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great.

44:10 Thank you very much, and I promise I'll keep it short. I'd just like to say thank you to everybody for joining us this afternoon. Yes. We have a busy h two ahead, and we've got a very exciting future pipeline to look forward to as well. Really looking forward to the year end results and being able to share a lot more information, and thank you very much for everything this afternoon. Debbie, that's great. And Mark as well, thank you once again for taking the time to update investors today. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Team seventeen Group PLC, we would like to thank you for attending today's presentation.

44:56 That now concludes today's session, so good afternoon to you all.