Q 2 - 2 0 1 9 2 0 1 9 - 0 8 - 1 4 PRESENTERS GUSTAF HAGMAN STEFAN - PowerPoint PPT Presentation

Q 2 - 2 0 1 9 2 0 1 9 - 0 8 - 1 4

PRESENTERS GUSTAF HAGMAN STEFAN NELSON G R O U P C EO G R O U P C FO 2

Q2 2019 HIGHLIGHTS R E V E N U E G R O W T H D E P O S I T I N G C U S T O M E R S +8 % 94.4 MEUR 334 961 G R O W T H 8% +7.0 MEUR +8% O R G A N I C ( E X . U K 2 6 % ) E B I T D A N D C S R E G U L A T E D S H A R E 48 % 15.1 MEUR 138 758 16.0% MARGIN +3% 3 9 % I N Q 2 2 0 1 8 3

REVENUES SINCE LAUNCH (MEUR) 100 80 40 60 70 90 20 30 50 10 0 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 4 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 2017-Q4 2018-Q1 2018-Q2 2018-Q3 2018-Q4 2019-Q1 94,4 94,4 2019-Q2

PRODUCT MIX – Q2 2019 74% 17% 9% of GGR of GGR of GGR C A S I N O C L A S S I C L I V E C A S I N O S P O R T 5

B U S I N E S S U P D A T E 6

BUSINESS UPDATE S U S T A I N A B L E G R O W T H A N D S T R O N G P R O F I T A B I L I T Y Challenging external More balanced environment geographic revenue mix Focus on product innovation Operational excellence and and customer experience synergy creation 7

MARKET COMMENTS – NORDICS Q 2 - 2 0 1 9 N O R D I C S - Sweden - revenues have developed positively every 40 % month during the quarter - Other Nordic markets deliver solid growth H I G H L I G H T S of NGR Sweden - LeoVegas is the single largest casino brand and gaining 37. 6 2% market share - Focus on customer experience, knowledge about regulated markets and strong brand position contribute to the positive development MEUR NGR Growth Y-o-Y 8

MARKET COMMENTS – REST OF EUROPE Q 2 - 2 0 1 9 R E S T O F E U R O P E - UK continues to be challenging and offsets the total growth for the region, efforts ongoing to stabilise the 47 % business - Good financial performance in other core markets outside UK H I G H L I G H T S of NGR Spain - Granted license in Spain and already live in July 43.2 1% Switzerland - LeoVegas has chosen not to apply for a license in the recently re-regulated Swiss market - Switzerland accounted for 2.2 MEUR in revenues in MEUR NGR Growth Y-o-Y the second quarter 9

MARKET COMMENTS – REST OF WORLD Q 2 - 2 0 1 9 R E S T O F W O R L D - 63% growth in Q2-2019 13 % - Rest of World now at 13% of Group NGR H I G H L I G H T S of NGR - Strong quarter for all ROW markets - Live in Brazil in July 12.2 6 3 % - Looking at new potential market entries MEUR NGR Growth Y-o-Y 1 0

BUSINESS UPDATE T E C H M A N A G E M E N T Migrated tech stack to Google Cloud Dersim Sylwan appointed as new Chief Marketing Officer (CMO) - Scaling the technical infrastructure environment without having to invest in hardware - Dersim has over 11 years of experience in the gaming industry and becomes an appreciated addition to the - Reduces maintenance costs management team - Increased speed in setting up and adapting to new markets and regulations Louise Nylén leaving as Deputy CEO. Her role will not be replaced New product features launched - Improved search functionality - Multiplay for mobile - New exclusive games 1 1

FINANCIAL TARGETS 2021 2 0 2 1 L O N G T E R M T A R G E T S Long-term organic growth that outperforms the online 600 MEUR in revenue gaming market At least 15% EBITDA margin assuming 100% regulated 100 MEUR in EBITDA markets To pay a dividend, over time, of at least 50% of The target includes organically generated growth as well as revenue from potential future acquisitions profit after tax 1 2

CURRENT TRADING – START OF Q3 Preliminary revenues July 2019 29.7 MEUR an increase of 9% compared to July last year 1 3

B U S I N E S S K P I S 1 4

CUSTOMER BASE N E W R E T U R N I N G C O M M E N T S D E P O S I T I N G D E P O S I T I N G C U S T O M E R S C U S T O M E R S • New depositing customers (NDCs) increased 3% Y-Y but decreased 20% 196 203 200 000 200 000 Q-Q from the record-high number in Q1 180 000 180 000 • Returning Depositing Customers 160 000 160 000 (RDCs) increased 12% Y-Y and 138 758 140 000 140 000 remained flat Q-Q 120 000 120 000 Total depositing customers (DC’s) • 100 000 100 000 increased 8% Y-Y but decreased 10% Q-Q 80 000 80 000 60 000 60 000 40 000 40 000 20 000 20 000 - - Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 1 5

AVERAGE SPEND PER CUSTOMER C O M M E N T S D E P O S I T S ( E U R ) P E R D E P O S I T I N G C U S T O M E R • Average deposit per depositing customer in Q2 increased 18% from 1 000 70% Q1 and remained flat on Y-Y basis 900 60% Average NGR per depositing • 800 customer increased 22% Q-Q but decreased 1% Y-Y 50% 700 600 Significant increase versus prior • 40% quarter primarily reflects a changed 500 Deposits per depositing customer RDC share of depositing customers mix in the player base with a higher 30% share of RDCs, and much lower 400 bonus costs – especially in Sweden 300 20% Long-term trend of lower share of • 200 high-value players is expected to 10% continue 100 - -% Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 1 6

GAME MARGIN AND HOLD G A M E % A N D H O L D % M A R G I N L I V E C A S I N O C O M M E N T S M A R G I N I N 3,90% 3,40% 37,0% • The game margin in Q2 saw a minor 3,85% 3,20% decrease versus Q1 to 3,69%, in line with 3,80% 35,0% 3,75% the historical average 3,00% 33,0% n % 3,70% Game margin 2,80% 3,65% d % Hold 31,0% Hold in Q2 increased to 32% from 31% in • Hol 3,60% 2,60% Q1 to above-average levels 29,0% 3,55% 2,40% Live Casino margin 3,50% Game margin, % Hold, % 27,0% 2,20% 3,45% Game margin is defined as house • 3,40% 25,0% 2,00% winnings divided by the total amount of Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 bets, i.e. what percentage the LeoVegas Group on average wins on a bet M A R G I N C A S I N O C L A S S I C M A R G I N S P O R T S B O O K 4,00% 11,00% Hold is defined as NGR divided by • 10,00% 3,90% deposits 9,00% 3,80% 8,00% 3,70% 7,00% 3,60% 6,00% 3,50% Casino Classic margin Sports book margin 5,00% 3,40% 4,00% 3,30% 3,00% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 1 7

DEPOSITS AND NGR D E P O S I T S M E U R N G R M E U R C O M M E N T S • Deposits reached a new all-time- 100 350 high, with an 8% increase versus the 92,9 prior year 90 287,8 300 NGR increased 8% versus Q2 the • 80 prior year, and 9% sequentially versus 250 70 Q1 60 The NGR and deposit trends reflect 200 • a steadily growing depositing 50 customer base versus the prior year, 150 40 with the average player value being the primary growth driver versus Q1 30 100 20 50 10 - - Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 1 8

CUSTOMER ACQUISITION COST M A R K E T I N G ( M E U R ) A N D C A C ( E U R ) C O M M E N T S 35,0 300 • Marketing spend decreased to 28.1 MEUR in Q2, reflecting lower CAC marketing investments in Sweden, 30,0 250 reduced affiliate costs and some postponed campaigns from Q2 to Q3 25,0 C) EUR 200 The Customer Acquisition Cost • CAC) Cost (CA MEUR (CAC) increased 7% Q-Q but 20,0 Marketing cost ME on Cos declined 11% Y-Y, reflecting an omer Acquisition 150 overall good marketing efficiency, a 15,0 higher share of organic traffic and Ma previous quarters marketing Custom 100 investments paying off Cu 10,0 The current assessment is that • 50 5,0 marketing costs in Q3 will be higher than in Q2, both in absolute terms and in share of revenues - - Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 1 9

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EBITDA OVER TIME E B I T D A ( A D J . ) M E U R C O M M E N T S • EBITDA in Q2 was 15.1 MEUR, 16,0 reflecting an EBITDA margin of 15,1 15,0 16.0% 14,0 Adjusted and reported EBITDA • 12,0 were the same during the period IFRS 16 accounting principle added • 10,0 9,0 9,0 0.9 MEUR to EBITDA in Q2 8,4 8,1 8,0 7,1 7,1 6,2 6,2 6,0 4,0 2,0 - Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 2 1

EBITDA BUILD UP Q2’19 VS. Q1’19 EBITDA margin: 16.0% -1,7 15,1 -0,7 4,7 -0,3 -1,3 -1,0 EBITDA margin: 8.3% 8,1 7,2 EBITDA Q1-19 Increased revenus Increased gaming tax Increased cost of sales Decreased marketing Increased operational Increased personnel costs Decreased capitalised EBITDA Q2-19 expenses development costs (incl. other income) C O M M E N T S Gaming duties increased by 1.3 MEUR compared to Q1-19 • Marketing spend decreased by 4.7 MEUR from Q1-19, reflecting lower investments in Sweden, lower affiliate costs and a few postponed marketing • campaigns from Q2 to Q3 • Personnel expenses as a percentage of revenue decreased in Q2, but increased slightly in absolute terms, reflecting a initiated shift from consultants to own tech personnel and certain temporary costs reflecting organisation optimisation efforts Slight increase in operational expenses, partly reflecting certain temporary costs and adverse FX rates • Lower capitalised development costs versus the prior period • 2 2