Investor Presentation Avanza Banks Brsdag, 25 November 2015 - - PowerPoint PPT Presentation

Investor Presentation

Avanza Banks Börsdag, 25 November 2015

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Important information

BY REVIEWING THIS INFORMATION, YOU ARE AGREEING TO ABIDE BY THE TERMS OF THIS

• DISCLAIMER. THE INFORMATION IS BEING MADE AVAILABLE TO EACH RECIPIENT SOLELY FOR ITS

INFORMATION AND MAY BE SUBJECT TO AMENDMENT. This presentation and the information contained herein do not constitute an offer to sell or the solicitation of an offer to buy any security, commodity or instrument or related derivative, nor do they constitute an offer or commitment to lend, syndicate or arrange a financing, underwrite or purchase

• r act as an agent or advisor or in any other capacity with respect to any transaction, or commit

capital, or to participate in any trading strategies, and do not constitute legal, regulatory, accounting

• r tax advice to the recipient. We recommend that the recipient seeks independent third party legal,

regulatory, accounting and tax advice regarding the contents of this presentation. This presentation does not constitute and should not be considered as any form of financial opinion or recommendation by the Manager or any of its affiliates. This presentation is not a research report and was not prepared by the research departments of Pareto Securities AB (the “Manager”) or any of its affiliates. Any offering of securities will only be made by means of an information memorandum. Investors should not invest in any securities of Stillfront Group AB (publ) (the “Company”) except on the basis of information contained in the information memorandum. This presentation has been prepared solely for informational purposes. You should not rely upon it or use it to form the definitive basis for any decision, contract, commitment or action whatsoever, with respect to any proposed transaction or otherwise. This presentation was prepared and the analyses contained in it are based on certain assumptions made by and information obtained from the Company, its directors, officers, employees, agents, affiliates and/or from other sources. The use of such assumptions and information does not imply that the Manager has independently verified or necessarily agree with any of such assumptions or information, and the Manager has assumed and relied upon the accuracy and completeness of such assumptions and information for the purposes of this presentation. Neither the Company, the Manager nor any of their respective affiliates, or their respective officers, employees or agents, make any representation or warranty, express or implied, in relation to the accuracy or completeness of the information contained in this presentation or any oral information provided in connection herewith, or any data it generates and accept no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information. The Company, the Manager and their respective affiliates and their respective officers, employees and agents expressly disclaim any and all liability which may be based on this presentation and any errors therein or omissions therefrom. Neither the Company, the Manager nor any of their respective affiliates, or their respective officers, employees or agents, makes any representation or warranty, express or implied, that any transaction has been or may be effected on the terms or in the manner stated in this presentation, or as to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any. Statements in this presentation, including those regarding the possible or assumed future or other performance of the Company or its industry or other trend projections, constitute forward-looking

• statements. By their nature, forward-looking statements involve known and unknown risks,

uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will or may occur in the future whether or not outside the control of the Company. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements. Accordingly, no assurance is given that such forward-looking statements will prove to be correct. You should not place undue reliance on forward- looking statements. They speak only as at the date of this presentation and neither the Company nor the Manager undertakes any obligation to update these forward looking statements. Past performance does not guarantee or predict future performance. Moreover, the Company, the Manager and their respective affiliates and their respective officers, employees and agents do not undertake any obligation to review, update or confirm expectations or estimates or to release any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this presentation. This presentation and any materials distributed in connection with this presentation are not directed to,

• r intended for distribution to or use by, any person or entity that is a citizen or resident or located in

any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such

• jurisdiction. This presentation does not constitute an offer to sell, or a solicitation of an offer to

purchase, any securities in the United States. The securities described herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be

• ffered or sold in or into the United States, except pursuant to an exemption from, or in a transaction

not subject to, the registration requirements of the Securities Act. Within the European Economic Area, this presentation is being made, and is directed only, to persons who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive 2003/EC and amendments thereto, including Directive 2010/73/EU, as implemented in member states of the European Economic Area (“Qualified Investors”). This presentation does not constitute a prospectus within the meaning of the Swedish Financial Instruments Trading Act (Sw. lagen (1991:980) om handel med finansiella instrument) and do not constitute an offer to acquire securities. This presentation is for information purposes only and does not constitute an offering document or an

• ffer of securities to the public in the United Kingdom to which section 85 of the Financial Services and

Markets Act 2000 of the United Kingdom (as amended by the Financial Services Act 2012 of the United Kingdom) applies. It is not intended to provide the basis for any evaluation of any securities and should not be considered as a recommendation that any person should subscribe for or purchase any

• securities. In the United Kingdom, this presentation is being made, and is directed only, to persons who

are both: (a) Qualified Investors, and either (b) persons falling within the definition of Investment Professionals (contained in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”)) or other persons to whom it may lawfully be communicated in accordance with the Order or (c) high net worth bodies corporate, unincorporated associations and partnerships and the trustees of high value trusts, as described in Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). Any investment or investment activity to which this presentation relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

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Summary of risk factors

RISKS RELATED TO THE GROUP AND ITS BUSINESS

• Stillfront Group must develop new games and enhance existing games so that the

players will continue to play Stillfront Group's games and make purchases of virtual items within the games.

• Stillfront Group has a relatively short history and has as of yet not on a continuous basis

made substantial revenues

• A limited number of games currently generate a majority of the Group's revenue
• Adverse or negative perceptions and publicity surrounding the gaming industry could

lead to increased gaming regulation and lack of trust and adoption of online payment systems and other transactions systems, respectively, could adversely affect the Group’s business, financial condition and results of operations

• If the Company fails to properly manage growth, the business could suffer
• The Group’s business may be adversely affected by competition from other online

gaming developers and console developers

• The Group must be innovative and adapt to technological advances and consumer

preferences and demands

• The Group is dependent on certain key individuals and employees and the loss of such

persons, or difficulties in attracting new employees, may negatively impact the Group’s business and ability to implement current and future strategies

• The Group has made and may make acquisitions that prove unsuccessful or strain or

divert the Group’s resources

• The Group may be unable to protect its intellectual property rights and could be at risk of

infringing third party intellectual property rights

• Stillfront Group uses open source software in its games that may subject the Group's

software code to general release or require the Group to re-engineer such code, which may cause harm to the business.

• The Group and its customers are vulnerable to hacking, viruses, malicious acts and other

cybercrime

• The Stillfront Group is subject to laws and regulations in several different jurisdictions

and changes to, or failure to comply with, applicable laws and regulations may negatively affect the Group's business

• The Group’s business is dependent on the security, integrity and operational

performance of the systems, products and services that it offers

• The Group’s failure to successfully maintain and enhance its brands could have a material

and adverse effect on the Group’s business, financial condition and results of operations

• Disputes and the risk of litigation
• Changes to taxation or the interpretation or application of tax laws could have an

adverse effect on the Group’s business, financial condition and results of operations

• Currency fluctuation risks
• Any financial objectives included in this presentation/Information Memorandum may

differ materially from the Group’s actual results and investors should not place undue reliance on them

RISKS RELATED TO THE SHARES AND THE OFFERING

• Nasdaq First North is not a regulated market, may be subject to disruptions and carries a

higher degree of risk than an investment in a company listed on a regulated market

• There may not be an active and liquid market for the shares and the price of the shares

may be volatile

• Certain shareholders may continue to exercise considerable influence over the Company

and its operations, and the interests of these shareholders may conflict with those of

• ther shareholders
• Future offerings of debt or equity securities by the Company may adversely affect the

market price of the shares and lead to substantial dilution of existing shareholders

• Future sales of shares after the Offering may affect the market price of the shares
• The Company’s ability to pay dividends in the future may be constrained and depends on

several factors

• Certain non-Swedish shareholders may be unable to exercise their preferential rights

Any offering of securities will only be made by means of an information memorandum. Investors should not invest in any securities of the Company except on the basis of information contained in the information

• memorandum. A possible investment in the Company is associated with a number of risks. Investors should therefore carefully analyse the risk factors as well as all other information in the information memorandum

prior to deciding whether to make an investment in the Company or not. In the event that any of the risks described in the information memorandum materialise, the Group's business, financial condition, and results of

• perations could be materially adversely affected. In such circumstances, the trading price of the shares could decline and investors could lose part or all of their investment in the shares. In addition, the risks described

in the information memorandum are not the only risks to which the Group is subject. Stillfront may be unaware of certain risks or believe certain risks to be immaterial that later prove to be material. There can be no guarantees or assurances that the objectives of the Company can be reached and that a possible investment in the Shares in turn will generate a positive return for the investor. Below is a summary of certain risks that the Group and the Company’s shares are subject to.

Indie game developer and publisher Founded in 2012 through the merger of a number

• f smaller gaming companies

Headquartered in Sweden with subsidiaries in Sweden, Germany, UK and Malta Vision – Become one of Europe’s leading indie game creators and publishers

Management

Jörgen Larsson Sten Wranne

CFO of Stillfront 25+ years in the industry including as CFO in private and public companies CEO and founder of Stillfront Serial Entrepreneur for 20 years within Gaming, IT and Software Industry, including ESN which was sold to EA in 2012

23 37 YTD Sep-14 YTD Sep-15 10% 23% YTD Sep-14 YTD Sep-15 34% 27% 27% 9% 3%

CAGR 8%

2013–2017e

35 years

Age of average gamer

5

$100bn

2017e

3 other

Most successful launch to date (launched in 2015) Still growing since launch in 2009 14-year life-cycle – still ongoing Coldwood sales mainly relating to Unravel

Attractive market Unravel awards Strong current financials Well-diversified games portfolio

Selected highlights

20+ awards at E3 and winner of best Strategy Game 2015 at gamescom

Winner

Best Strategy Game

Underlying EBITDA margin(1) Sales Sep-15 Net Revenue (SEKm)

13pp 63%

Contents

Business Sales and marketing Strategy Use of proceeds Markets Management and owners Financials Transaction structure Q&A Investment highlights

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Group structure…

Professional group management 4 near- autonomous subsidiaries 7 games Across multiple platforms

Console PC Browser

Share of group sales Sep 2015

Browser Mobile Browser Tablet PC

27% 9% 2% 62%

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Attractive and diversified games portfolio

Launch in: 2009

 Still growing since launch in 2009

Q3 2014

 Decent launch but marketing spend shifted to Call of War with superior marketing fROI

Q3 2015

 Most successful launch to date

H1 2016

 Winner of 20+ awards at E3 and gamescom

27% of group revenue (Coldwood) 34% of group revenue 27% of group revenue 1% of group revenue 2% of group revenue 9% of group revenue

 New action management game launched on new engine  Released on Steam in Nov 2015  14-year life-cycle – still ongoing

1% of group revenue

Long tail games

Q3 2001 Q2 2003 Q2 2015

Winner of 20+ awards at E3 and gamescom

Winner

Unique partnership with industry giant 10

Unravel success is a game changer for Coldwood…

• EA publishes games for a mere few independent studios

annually and in 2015 Coldwood was chosen

• State-of-the-art global marketing and distribution machine
• Assumes risk → Bears all marketing and development costs
• Takes IP ownership

H1 2016

Launch of Unravel

TIME Revenues

Development period Post launch Development payments Ideation

Unravel revenue model (hypothetical for illustrative purposes, not to scale)

EA’s state-of-the-art marketing machine promotes Unravel Contracting fees (from EA for development)

Royalties (X% per sold game)

Coldwood obtains contracting fees from EA during

• development. Coldwood revenues in 2015 is targeted to

come in at SEK 15m, mainly relating to Unravel Unravel concept born and nurtured at Coldwood Coldwood obtains royalties per sold game. Not disclosable (legal reasons) but target 2016 revenue is SEK 25–35m with EBITDA margin 40–50% – including royalties and contracting fees from developing other game(s)

Contracting fees for next game(s)

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…from already strong track record – SEK 0.6–1bn(1) from prior games

Part of Sony’s ”Essential Collection” Part of Sony’s ”Essential Collection” and sold ”Gold” with 600k+ copies One of the world’s best selling ski games

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Still growing since launch in 2009

5 10 15 20 2009 2010 2011 2012 2013 2014 2015 Sales since inception (rolling 12m, SEKm)

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Supremacy 1914 – Sales development

Strong growth first 54 months Launched 6+ years ago (June 2009) Strongest rolling 12m sales to date = now

(12m ending Sep-15)

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Stillfront’s most successful launch to date (2015)

0.1 0.3 0.9 1.4 May-15 Jun-15 Jul-15 Aug-15 Sep-15

15

SEK 22m annualized

(2) sales

Call of War – WW2 Strategy Game

SEK 1.8m

(1)

Already 34% of Stillfront Revenues yet to peak Designed for long life-cycle

Call of War accounted for 34% of group revenues in Sep 2015 Strong growth every month so far Call of War is an immersive long-stay strategy game with the potential to sustain a high revenue over a long life-cycle

SEK ~2m in development costs recouped in terms of sales after first four months with SEK 4.5m cumulative sales

Call of War sales per month (SEKm)

Contents

Business Sales and marketing Strategy Use of proceeds Markets Management and owners Financials Transaction structure Q&A Investment highlights

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…and high USER RETENTION Capitalize on player base with IN-GAME PURCHASES

High user retention with long-life-cycle games

Long gaming period

High-quality games High gamer devotion

Network effects further attract players Responsive marketing and free to play attract players Strong player base

Strategically placed in-game purchase

• ptions

Revenue model

Cross promotion

(enabled by multi-game portfolio)

further attract players Attract players with FREE TO PLAY

…swift boost in marketing spend

• n Call of War…

Case in point = Call of War launch …further fueling Call

• f War (and group)

sales

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Daily monitoring of marketing fROI

(1) allows for responsive marketing

– drives group ROI and sales

Daily monitoring of marketing fROI If HIGH marketing fROI… If LOW marketing fROI… …increase marketing …decrease marketing

Drives group ROI and sales

High marketing fROI

• n

Call of War…

Marketing fROI 34–63%

0.1 0.3 0.9 1.4 1.7 May Jun Jul Aug Sep Call of War sales (SEKm)

0% +36% +48% +130%+113% +172%

Apr May Jun Jul Aug Sep Marketing spend increase compared to April CoW launch 0.1 0.3 0.9 1.4 1.8 May Jun Jul Aug Sep Call of War sales (SEKm)

Contents

Business Sales and marketing Strategy Use of proceeds Markets Management and owners Financials and transaction structure Q&A Investment highlights

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P L E X

Portfolio of games Long life cycle games Engines for scalability X (cross) platform

More IP ownership in Coldwood

IP↑ 1 2 3

Grow to higher profitability Improve risk/reward

Sales Profits

Organic + M&A Organic M&A Sales Profits

Business strategy – 3 pillars

Use of proceeds for accelerating business strategy implementation

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New games and marketing spending

Indicatively, 2–4 new games on Bytro’s SUP engine, 1–2 new games on ManagerZone engine and 1–2 new games on Dorado engine. Marketing of new games and increased marketing of existing games. Investments dependent on attractiveness of marketing fROI and performance of launched games.

1–3 acquisitions

Cash component of 1–3 acquisitions with sales of SEK 5–15m each over the next few years. Contingent on speed of finding perfect-fit targets with willing sellers at attractive price.

Increased IP ownership in Coldwood

Gradually increase IP ownership in Coldwood. Initially by building a parallel team to allow for developing two titles in parallel. Timing dependent on speed of recruitment of top talent and scope of first parallel title.

Acquiring remaining 49% of Bytro Labs

The cash-component for the remaining 49% of Bytro Labs to be acquired during 2016. Already-set contract with earnout so final price will depend on Bytro’s sales and EBITDA in 2015. The contract also includes an equity component of SEK 8–12m where Stillfront’s share is valued at SEK 28/share

General corporate purposes

General corporate purposes including SEK 8–9m estimated transaction costs and SEK 3.3m repayment of shareholder loan to Acacia

Flexible use of proceeds strategy as investment opportunities ahead may depend on, among other things, attractiveness of marketing fROI, speed of recruitment of top talent and finding perfect-fit acquisition targets

Use of proceeds IPO rationale

In addition to accelerating its growth strategy through the use of proceeds, additional IPO rationale is: Diversify and strengthen

• wnership structure

Nasdaq-listed equity should: – help attract and retain top talent – Raise brand awareness – Quality stamp of approval benefiting i.a. trading conditions – Facilitate selective acquisition strategy (more valuable equity currency)

SEK 15–35m SEK 15–35m SEK 10–20m SEK 12m(1) SEK 10–15m SEK 75m

Contents

Business Sales and marketing Strategy Use of proceeds Markets Management and owners Financials Transaction structure Q&A Investment highlights

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• Lat. Am.

$3bn

• N. Am.

$22bn EMEA $19bn

APAC $37bn

Global games market is huge

Stillfront’s revenue is derived from over one hundred countries on all continents

Contents

Business Sales and marketing Strategy Use of proceeds Markets Management and owners Financials Transaction structure Q&A Investment highlights

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12 month lock-up(2) 200+ years industry experience 31% equity participation(1)

Key people: Extensive experience and well-incentivized

Name Position Industry Experience Equity Participation(1) Lock-up

Jörgen Larsson

CEO & Director 20 6%

Sten Wranne

CFO 25 3%

Christopher Holmberg

CEO 16 2%

Jakob Marklund

Lead Programmer / CTO 17 2%

Leif Holm

Senior developer 20 1%

Håkan Dalsfelt

Senior developer 16 1%

Martin Sahlin

Creative director 10 (n/a, but cash bonus)

Dick Adolfsson

Senior developer 14 1%

Felix Faber

MD Operations and Publishing 7 4%

Tobias Kringe

MD Product 7 4%

Christopher Lörken

MD Technology 7 4%

Patrick Armstrong

CEO 12 1%

Andreas Spante

CTO 8 0.1%

Andreas Sjöstrand

Senior developer 17 0.02%

Nick Porsche

MD Malta / Game Director 14 0.0%

Simon Dotschuweit

MD / Tech Director 10 0.1%

Own 10% each of subsidiary Dorado

220 31%

              

N/A

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Attractive ownership structure and experienced board

Represented by: Per Skyttvall, board chairman Stockholm-based active investor in innovative, fast growing and scalable Swedish companies Represented by: Max Bautin, board member IQ Capital is a UK based specialist investor providing early growth capital to innovative, fast-growing TMT companies

Active specialist owners own 25% Top shareholders Experienced board

Specialist investors and key people jointly own 55%

Acacia Board member. Extensive industry experience includes CEO at Zenterio, Dreampark and CEO & Country Manager of Ericsson in Slovenia. Per Skyttvall Acacia (chairman) Managing partner and co-founder of IQ Capital. Extensive relevant experience includes CFO of a subsidiary of Millicom between 1997 and 1999. Max Bautin IQ Capital SVP Studios at King Digital Entertainment between 2012 and 2015. Extensive experience in TMT sector as Head of Expansion in Europe at eBay for 3 years. Fredrik Åhlberg Independent

CEO and founder of Stillfront. 20+ years in the industry including extensive industry network and business building track record. Jörgen Larsson CEO Stillfront CFO at Viaplay. Extensive experience within digital media and online business as CFO, investment manager and business lawyer. Alexander Bricca Independent Shareholder Pre-IPO

• wnership

(fully diluted) Specialist investor Key- people Acacia Asset management AB 14%  FKL Holding UG (Bytro founders) 14%  IQ Capital Fund I L.P 10%  Silverbeam AB 9% Fyrmax Ltd. (25% CFO owned) 8% (1) IdeCap AB (100% CEO owned) 6%  Strömberg Förvaltnings AB 3% JRBM Fastighets & Invest AB 3% JB TWO INTERNATIONAL LIMITED 3%

• C. Holmberg (Coldwood)

2%  Jakob Marklund (Coldwood) 2%  Other key people 5%  Other 21%

Total 100% 25% 31%

Contents

Business Sales and marketing Strategy Use of proceeds Markets Management and owners Financials Transaction structure Q&A Investment highlights

17% 10% 8% 23% 9%

• 6%
• 28%

7% 2012 2013 2014 YTD Sep-15 Underlying EBITDA margin⁽¹⁾ Reported EBITDA margin⁽¹⁾ 15pp 17 21 29 23 37 2012 2013 2014 YTD Sep-14 YTD Sep-15 63%

Audited Audited Audited Reviewed CAGR 31%

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Strong current financials

Net revenue (SEKm) EBITDA margins

• 63% organic net revenue growth in YTD Sep-15

compared to YTD Sep-14, mainly derived from: – Strong growth in Coldwood – Successful launch of Call of War

• 31% CAGR from 2012 to 2014 attributable to both
• rganic and acquisition growth
• 15 percentage point increase in Underlying

EBITDA margin in YTD Sep-15…

• …mainly attributable to the strong sales growth…
• …as sales growth positively affects Underlying

EBITDA margin due to low marginal costs

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Financial & operational targets

Targets are based on a successful completion of the contemplated transaction

Target mid-term Underlying EBITDA margin: 25–30% Target net revenue by 2020: >SEK 300m 2016: 2-4 Target game releases: 2017–2018: 4-6 per year 2019–2020: 5-7 per year

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Transaction summary

Listing venue

• Nasdaq First North Stockholm (subject to approval)

Offering size and valuation

• SEK 75m primary offering
• SEK 4m maximum secondary offering
• SEK 123m pre-money equity valuation, fully diluted (60,791 warrants outstanding)

Offering structure

• Institutional Offering in Sweden and internationally (subscription of more than 25,000 shares)
• Retail Offering in which the aggregate sum the investors will pay will not exceed the equivalent of €2.5m

(minimum subscription 500 shares, maximum 25,000 shares)

Indicative time table

• Application period for the Institutional Offering:

25 November–3 December 2015 at 12:00 CET

• Application period for the Retail Offering:

25 November–2 December 2015 at 17:00 CET

• Announcement of the outcome of the Offering:

4 December 2015

• First day of trading on Nasdaq First North:

8 December 2015

• Settlement date:

8 December 2015

Sole manager and bookrunner Pre-commitments

• The Cornerstone Investors have agreed to acquire shares corresponding to:

− Swedbank Robur Fonder: 9% of Stillfront’s shares following completion of the Offering − The Niclas Eriksson family: SEK 13m − The Lundström family: SEK 7.5m

• The Principal Owner, Acacia Asset Management, has agreed to subscribe for shares equivalent to 10% of the

Offering, corresponding to SEK 7.5m if the Offering is fully subscribed

• Pareto Securities acts as Sole Manager and Bookrunner

Lock-up

• 12-month lock-up of key people (30% non-diluted ownership)
• 6-month lock-up of main shareholders (50% non-diluted ownership)
• 3-months lock-up of non-main shareholders (10% non-diluted ownership)

Q&A

Jörgen Larsson, CEO Phone: +46 70 321 18 00 jorgen@stillfront.com Sten Wranne, CFO Phone: +46 70 585 12 58 sten@stillfront.com

Stillfront Group’s vision is to become one of Europe’s leading indie game creators and publishers

Contents

Business Sales and marketing Strategy Use of proceeds Markets Management and owners Financials Transaction structure Q&A Investment highlights

33

Investment case summary (1/2)

Attractive market

• $100bn – Global games market is estimated to reach $100bn in 2017

and is one of the largest entertainment industries in the world

• 8% CAGR – At a CAGR of 8% 2013–2017e the global games market is

growing from high levels

• 35 years old – Age of average gamer

Well-diversified games portfolio

• Unravel: Winner of 20+ awards at E3 and gamescom. Contracting

fees for Stillfront during development with royalties on each sold

• copy. Release date H1 2016.
• Supremacy 1914: Launched >6 years ago with strong growth its first

54 months and its best rolling 12 months ending in Sep-15.

• Call of War: Stillfront’s most successful launch to date with SEK 22m
• f annualized sales in Sep-15 (34% of group sales) – only five months

after launch. Call of War is yet to peak and management anticipates a long life cycle as for sister-game Supremacy 1914.

• ManagerZone: 14-year life-cycle – still ongoing

Key people: Experienced and incentivized

• 200+ years of joint industry experience
• 31% joint ownership in Stillfront

Effective marketing

• Daily monitoring of marketing fROI allows for responsive marketing

which in turn drives group ROI and sales

• Case in point: 34–63% marketing fROI on Call of War campaigns

prompted a swift increase in Bytro’s marketing spend which in turn further fueled Call of War sales

Strong current financials

• 63% organic net revenue growth in YTD Sep-15
• 23% Underlying EBITDA margin in YTD Sep-15, up 15 pp from 2014

Attractive ownership structure and experienced board

• 55% of Stillfront owned by either key people (31%) or specialist

investors (25%)

• Extensive and complementary industry experience within the board of

directors

34

Scalable

Low marginal cost on producing and distributing digital content Scalable development with game engines

Derisked and scalable business model… …now well-positioned… …for accelerating growth strategy

Derisked

Portfolio strategy reduces risk and stabilizes revenue growth… …while capturing inter-game synergies

Proven

Strong current financials Increasing MAU with high retention Traction with new and long-lived cash cow games

Promising near-term pipeline

Call of War recently released New Dorado game engine and game ManagerZone engine improvements and new monetizing features

Organic growth

New engines New games Increased marketing

Coldwood position

Well-renowned studio with good momentum, receiving great response in pre-marketing of Unravel Solid track record – collaboration with both Sony and EA

Acquisition strategy

Target smaller gaming companies – add value by guiding creativity through professional structure

IP at Coldwood

Increased IP ownership gradually – initially by building a new title with a parallel team

Investment case summary (2/2)