Current situation
The stock market has been influenced by macro factors for some time now. How high is inflation? And how high can central banks go without completely undermining the economy, in addition to consumers? However, the reports temporarily shift focus to the performance of the companies. Below is a summary from the Q4 reports for the 10 largest positions in the fund.

Evolution
Evolution is the live casino giant that delivers streaming experiences to gaming operators, who in turn offer the service to individuals. Revenue increased by 36 percent to 408 MEUR and operating profit rose by 35 percent.

The company experiences high demand from around the world, with Asia and the USA standing out positively. We are particularly impressed by the company's innovative ability, and in 2023, the company plans to release over 100 new games! CEO Martin Carlesund is clear that the company continues to be hungry and strives to improve every day. During the earnings presentation, Carlesund proudly showcased the following quote:
“We create what others dream of”.

Embracer
Founder and major shareholder Lars Wingefors is the CEO of Embracer, which acquires, develops, and publishes PC, console, and mobile games globally.

Net revenue increased by 128 percent, exclusively driven by acquisitions, to 11.6 billion SEK. Adjusted EBIT increased by 78 percent, reaching 2 billion SEK. Cash flow, which the company has often been criticized for, summed up to a robust 1.7 billion SEK.

Embracer has one of the world's best and largest brand portfolios, which includes, among others, The Lord of the Rings.

Exactly how the brand portfolio will be best utilized is probably known only to Wingefors himself. However, it's clear that many players are eyeing a multitude of titles. We assess that the probability is high for further collaborations with some of the world's largest technology companies like Amazon, Microsoft, and others. For those who enjoy speculation, it's not unlikely that Lars has both an ace and a joker up his sleeve. In an interview with Albin Kjellberg in connection with the report, Wingefors openly discusses that one of the strengths of the model is their openness to a variety of deals, without chasing specific targets. He described it something like this: If you do a Zlatan and knock on a door, the price is different than if you seize an opportunity that arises. However, if they do a Zlatan and knock on our door, then we set the price.

Surgical Science
One of the healthcare sector's major global challenges is how to reduce healthcare-related injuries. Swedish company Surgical Science plays an influential role as one of the world leaders in robotic surgery and simulation. The company provides aspiring surgeons with opportunities to train for surgeries in a simulated environment realistically. In the long term, Surgical Science's software used for robotic surgery could become a standard that reshapes the landscape of operations on a global basis.

Net revenue amounted to 250 million SEK, an increase of 27 percent compared to the same period the previous year. Operating profit increased by 38 percent, driven by both performance and currency effects. These figures are particularly impressive considering that the company no longer operates in the Russian market, which was an important market for the company before the invasion.

We share Surgical's vision that every patient undergoing a medical procedure should be confident that the healthcare provider is trained and objectively certified in a simulated environment.

Kindred
An operator with a focus on sports betting, featuring the flagship brand Unibet. A leader in sustainability within the industry, being the only operator in the world to report the proportion of gambling revenue derived from high-risk customers, those with a risk of addiction problems. The goal is to reduce these revenues to zero.

Total revenues increased by 25 percent, amounting to 306 million British pounds. Underlying EBITDA increased by 42 percent, reaching 39 million pounds, driven by a strong comeback in the Dutch market.

At a glance, the figures may seem quite positive. However, the company's and analysts' high expectations for the football World Cup were not met during the quarter. The World Cup is typically played in the summer when football leagues around the world have concluded. Since this championship took place during Q4, the leagues had to pause in favor of the World Cup, and the increased activity in each championship match could not be compensated to the same extent by the paused league matches. The positive aspect is that the matches were not canceled but postponed to Q1 and Q2. Therefore, it was reassuring and important that Kindred communicated that the start of Q1 had been strong, with a growth of 36 percent.

Novo Nordisk
The Danish giant and cash flow machine Novo Nordisk, besides diabetes treatment, also tackles the growing problem of obesity, reporting robust figures as usual.

Sales increased by 26 percent to 48 billion Danish kroner, and operating profit rose by 25 percent to 17 billion DKK.

We have previously mentioned the quote "imagine if you could take a pill and become thin." It's definitely worth repeating. Novo's drug for obesity is called Wegovy, and the average patient loses about 15 percent of body weight with the medication. Demand in the USA is high, and the drug's sales grew by over 100 percent in the states, generating over 10 billion Danish kroner in revenue in 2022.

Paradox Interactive
The company is the leading global publisher of strategy games for PC and console with loyal players. Paradox has undergone a reboot with the return of CEO Fredrik Wester at the helm and is focusing even more clearly on its core business, resulting in improved performance.

Revenue for the quarter amounted to 580 million SEK, an increase of 49 percent compared to the same period the previous year. Net income totaled 194 million SEK, representing an increase of 68 percent compared to the same quarter in 2022. Ones and zeros prove their scalability! It's worth noting that the company has benefited from the weak krona as they develop games in several countries but primarily sell in US dollars.

The company is one of the big winners in digital distribution. The games Paradox develops are not for "average Joe," but rather games that typically require more engagement in terms of playing time to understand. CEO Wester argues that these games were difficult to sell in stores like Walmart because there isn't enough shelf space for games appreciated by only a few, nerdy consumers. However, globally, the player base is sufficient, and on platforms like Steam, the base is large enough for the company to generate two billion SEK in revenue in 2022!

Chemometec
The company develops instruments for cell counting and cell analysis. In addition to research companies focusing on cancer, their customers include universities and food companies. The case of the Danish company Chemometec, which we have previously emphasized, is primarily focused on recurring revenue from consumables, which grows in line with increased instrument sales.

Chemometec does not provide quarterly reports separately, but delivered a weaker half-year report than what we and the market have become accustomed to. The company has had a habit of communicating profit upgrades, so this profit warning surprised most.

During the first half of the year, the revenue increased by 15 percent, reaching 214 million Danish kroner. EBITDA increased by 25 percent to 145 million (60 percent EBITDA margin). The company's instrument sales are sluggish as research companies, their customers, are finding it harder to attract venture capital and thus finance Chemometec's instruments. However, consumables perform as expected, ticking along at a good pace and driving revenue with strong margins. Despite the profit warning and lowered revenue forecast for the year, the company maintains its profit forecast of 245–260 million Danish kroner at the EBITDA level, driven by the stability of consumables!

Take-Two
The American developer and publisher of video games with iconic franchises like Grand Theft Auto and NBA 2K. Revenue increased by 56 percent to $1.4 billion, but the company could not capitalize on the significant revenue growth contributed by the Zynga acquisition and reported a loss for the quarter.

Similar to the previous report, the company signals a tougher market in the short term. However, it expects sequential growth and record results in the coming years. Over the fiscal years 2023–2025, the company has approximately 20 "immersive core" games to roll out. These are heavyweight titles that drive significant engagement among players. Examples of immersive core games include their key sports titles like PGA TOUR2K and NBA 2K, as well as Grand Theft Auto and Red Dead Redemption. The release date for the next version of GTA remains unclear, but whenever it happens, it will be the biggest game release of all time. Hopefully, the game will surpass everything we've experienced in a virtual world before. It's a tall order to fill, but we have confidence that Take-Two will manage the task successfully.

BioGaia
The company develops, markets, and sells probiotic products. It is perhaps best known for its colic drops, which help both parents and infants manage their daily lives by relieving stomach pain for the little ones.

The net revenue increased by 48 percent, reaching 274 million SEK. Acquisitions and currency effects were driving factors, but organic sales growth contributed by 5 percent. The operating profit increased by 34 percent.

A company selling probiotic drops in pharmacies, perhaps you're thinking. And that's indeed correct. However, CEO Isabelle Ducellier notes that they are strong in the US marketplaces via Amazon, Target, and Walmart. But what we suspect might be the biggest eye-opener for you is perhaps the following quote: "China is increasing online sales through TikTok, which functions both as a social platform and marketplace." Here we have a company that fully utilizes digital sales channels.

Swedish Orphan Biovitrum (SOBI)
SOBI focuses on developing and providing access to innovative treatments that can make a difference for people living with rare diseases. Operating revenue increased by 22 percent to 6 billion SEK. Pre-tax profit increased by 24 percent, totaling 1.8 billion SEK.

The company, with a strong pipeline, has many exciting candidates in phase 3 or under registration. CEO Guido Oelkers is pleased to announce continued success in the outlook for 2023, which brings joy to both us and future patients.

Summary
It is evident that the digital economy not only withstands the challenges posed by uncertain times but also manages to grow stronger over the past year. If technology-driven growth can continue to demonstrate strength during difficult times, the potential for further growth when the clouds in the economy dissipate is particularly exciting!