[PPT] - Q3 Q3 2017 Presenters GUSTAF VIKTOR HAGMAN FRITZN Group CEO PowerPoint Presentation

SLIDE 1

Q3 Q3 2017

SLIDE 2

GUSTAF HAGMAN VIKTOR FRITZÉN

Group CEO and Co-founder Group CFO 2

Presenters

SLIDE 3

Leading the way into the mobile future

3

The Leo Passion

SLIDE 4 4

The growth company LeoVegas

GameTech-Mobile focus and technology leadership Effective marketing A fantastic company culture –new passion and attitudes

SLIDE 5 5

Ag Agenda

Acquisition of Royal Panda
Financial Targets
Quarterly highlights
Business update
Business KPIs
Financials
Summary
Q&A

SLIDE 6

Acqu quisition

Royal Panda

6

SLIDE 7 7

Royal Panda

Why Royal Panda? Royal Panda

Revenues: EUR 9.8 m YoY growth 61% Estimated EBITDA of EUR 3.2 m.1 UK accounted for 50% of revenue 65% of revenues generated from Mobile devices

Royal Panda in Q3’17

60 employees Head office in Malta License in UK and Malta Casino and Sportsbook In-house developed technology platform Core market: UK

1. Certain costs for the month of September are approximate figures in order to calculate estimated EBITDA.

Inline with our expansion strategy Strengthen our position in the UK Adding another premium brand to LeoVegas Group Global and scalable brand Efficient marketing and affiliate strategy Great team Cultural fit During the past two years we have searched for companies that fit in with our overall expansion strategy, which is to grow in regulated markets and markets soon-to-be regulated

SLIDE 8 8

Royal Panda

Purchase price

In order for Royal Panda to be entitled to the maximum earn-out the need to met certain milestones within 12 months At least EUR 50 m in Net Gaming Revenue (NGR) EBITDA of at least EUR 15 m At least EUR 34 m of NGR must be derived from the UK EBITDA from the UK must amount to at least EUR 5 m

Earn-out – 12 months

EUR 60 m + up to an additional EUR 60 m The total purchase consideration can thus amount to a maximum of EUR 120 m

SLIDE 9 9

Royal Panda

Financing

LeoVegas has a strong cash position that will been used for the initial purchase price In addition - debt financing of EUR 100 m Of this EUR 100 m, EUR 40 m consists of a Revolving Credit Facility (RCF) The financing has a term of three years Amortisation will commence in the second quarter of 2019 in the amount of EUR 10 m quarterly The interest rate on financing is approximately 2%

The financing arrangement ensures that LeoVegas will have the continued ability to capitalise on consolidation in the industry

SLIDE 10

Fi Financial Ta Targets

10

SLIDE 11 11

Financial targets

With the acquisition of Royal Panda, the LeoVegas Group removes the 2018 short-term financial targets since they did not include acquisitions LeoVegas has not changed its long term financial targets: Long-term organic growth above online gaming market Long-term at least 15% EBITDA margin assuming 100% regulated markets LeoVegas dividend policy is to distribute a minimum of 50% of net profit

ver time

SLIDE 12

Quart Quarterl erly re report

Highlights and events

12

SLIDE 13

Revenue since start

55.6

MEUR

10,0

20,0 30,0 40,0 50,0 60,0 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 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3

SLIDE 14

Revenue:

55.6 MEUR

+15.9 MEUR Adjusted EBITDA:

8.4 MEUR

15.1 % margin

Deposits:

193.1 MEUR

+56 %

Growth:

+40 %

Organic growth: 33%

Mobile deposits:

70 %

14

Q3 2017 Highlights

SLIDE 15 15

compared to 1-23 October last year

Current Trading – Start of Q4

14.9 MEUR 70 %

NGR 1-23 October an increased of

SLIDE 16

Bus Business up update

16

SLIDE 17 17

Aiming for listing on Nasdaq Stockholm in H1 2018

LeoVegas has since the IPO on Nasdaq First North Premier prepared for listing on Nasdaq Stockholm Proof of quality to external parties, such as investors, authorities and partners For institutional investors we will become more accessible and attractive as a company and investment LeoVegas aims to change list to Nasdaq Stockholm during H1 2018

SLIDE 18 18

LeoVentures’ role in LeoVegas Mobile Gaming Group

Maintaining LeoVegas Mobile Gaming Group´s position as innovative, entrepreneurial and with an increased focus on ventures

For LeoVegas Mobile Gaming Group to attract and maintain the best innovations and ideas To create value in existing and new ventures To maintain a strong entrepreneurial culture and momentum

IM IMP Le LeoVentures

LeoVegas co-founder Robin Ramm-Ericson taking on the role as Managing Director for LeoVentures

SLIDE 19 19

LeoVentures – investments

Entrepreneurs that come to us with innovative ideas and understanding

f early trends with a strong future in

Le Leading the way into the mobile future

Fu Future potential

Internal ideas, innovations and/or technology spin-offs Innovative companies that we come across, likes and see an

pportunity for to be scaled up and accelerated

SLIDE 20 20

Launch of www.leosafeplay.com The website makes information about gambling habits more accessible and clear for our customers We have also launched a new algorithm that proactively alerts us about customers who show tendencies toward unsound gaming This enables us to more swiftly and effectively address these customers in a more proactive way

Responsible Gaming – Leo Safe play

Leo Safe Play website Further improvements

SLIDE 21 21

LeoVegas’ strategy is to enter regulated markets and markets that are soon to be regulated Regulated revenues in Q3’17 were 25% of total

Regulated revenues

UK 12% Italy 5% Denmark 8% 75% Q3 Q3 2017 25% % of NGR GR from regulated markets

SLIDE 22 22

Australia A change to the gaming legislation in Australia was voted through parliament on August 9th LeoVegas has stopped accepting bets from customers in Australia since September 10, 2017 Australia was 5.7% of NGR in Q3’17 Australia has been closed for new customer since Dec 2016

Legal update

SLIDE 23

Bus Busine iness KPI KPI’s

23

SLIDE 24

Q2’17 back-drop Q3’17

Q3’17 drivers

RDCs 6% Q-Q growth NDCs 33% Q-Q growth Revenue 12% Q-Q growth 73 014 NDCs in Q2’17 20.8 MEUR in marketing 22.6 MEUR in marketing Deposits 15% Q-Q growth

24

SLIDE 25

20 000

40 000 60 000 80 000 100 000 120 000 New depositing customers (NDCs) Returning depositing customers (RDCs)

100 000

200 000 300 000 400 000 500 000 600 000 Actives customers Returning depositing customers (RDCs) New depositing customers (NDCs)

Returning Depositing

Customers (RDCs) growth was slightly below trend at 5%, mainly due to the lower NDC intake in H1’17

LeoVegas no longer accepts

bets from Australian customers since 10 September 2017, excluding Australia the RDC growth would have been 7%

New depositing customers

(NDCs) increased 33% sequentially

The growth in NDCs is very

broad-based with all markets seeing material increases

Active customers increased

mainly due to the increase in the depositing customer base Depositing customers, new and returning Active customers and depositing customers COMMENTS 25

Customer base

105 770 97 210 299 639

SLIDE 26

As the proportion of RDCs in

the mix has a material effect

n the average deposit per

depositing customer – it can be seen how the proportion

f RDCs correlates with

average deposit per depositing customer

In Q3’17 there was a large

increase in NDCs, which had its share of depositing customers larger, which in turn decreases the average deposit per depositing customer

Average deposit per

depositing customer stayed at historically high levels as LeoVegas customer mix has shifted towards countries with higher average spend

Average NGR per depositing

customer followed the average deposit upwards for the same reasons 26

Average spend per customer

COMMENTS Deposits EUR per depositing customer NGR EUR per depositing customer

50

100 150 200 250 300 NGR per depositing customer 0% 10% 20% 30% 40% 50% 60%

100

200 300 400 500 600 700 800 900 1 000 Deposits per depositing customer Propotion of RDCs in the depositing customer base

SLIDE 27 2017-Q2 2017-Q3 Marketing Indexed to Q2'17 NDCs Indexed to Q2'17 Marketing / NDC (CAC)

Marketing spend increased by

9% from Q2’17 to 22.6 MEUR in Q3’17, which is the highest level in LeoVegas’ history

NDCs increased by 33% in the

same period

The Customer Acquisition

Cost (CAC), illustrated in the chart as marketing in relation to NDCs, in Q3’17 decreased 18% compared to Q2’17

The growth in NDCs is very

broad-based across countries

ROI in Q3’17 has been very

strong 27

Marketing and customer acquisition cost

COMMENTS Marketing spend and NDCs indexed to Q2’17 in relation to marketing per NDCs +9%

18%

97 210 22.6 MEUR +33% 20.8 MEUR 73 014

SLIDE 28

In Q3’17 deposit grew 56%

compared to Q3’16

On a sequential basis

deposits increased 15%, which is the highest sequential growth rate since Q3 of 2016

Growth rates per regions:
Sweden 36%
Other Nordics 127%
UK 41%
Rest of Europe 113%
Rest of World -5%
Deposits increased by 69.4

MEUR from Q3’16 to Q3’17 of which the regions accounted for:

Sweden 21.3 MEUR
Other Nordics 23.2 MEUR
UK 7.8 MEUR
Rest of Europe 17.6 MEUR
Rest of World -0.6 MEUR

28

Deposits

COMMENTS Deposits MEUR and Q-Q growth in deposits % Deposits MEUR by region

10,0

20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0 Sweden Other Nordics UK Rest of Europe Rest of World 0% 5% 10% 15% 20% 25% 30%

50,0

100,0 150,0 200,0 250,0 Deposits Q-Q growth rate in deposits

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Other Nordics has increased

its share the strongest for both deposits and NGR, which is driven by strength in Denmark

Rest of World remained

stable at 10% which is consists

f decreases in Australia
ffset by increases in Canada
The UK saw its share of

deposits and NGR decrease

Sweden held its share for

both deposits and NGR which means that in absolute terms Sweden saw the largest gains

f all markets
Rest of Europe saw a minor

decrease in its share of total

Regional split

COMMENTS Sweden 41% Other Nordics 22% United Kingdom 14% Rest of Europe 17% Rest of World 6% Deposits 2017-Q3 Sweden 41% Other Nordics 20% United Kingdom 15% Rest of Europe 18% Rest of World 6% Deposits 2017-Q2 Sweden 37% Other Nordics 23% United Kingdom 12% Rest of Europe 18% Rest of World 10% NGR 2017-Q3 Sweden 37% Other Nordics 20% United Kingdom 14% Rest of Europe 19% Rest of World 10% NGR 2017-Q2

SLIDE 30 30

NGR by country and region

In addition to the

geographical regions that LeoVegas reports, some countries are sometimes reported for specific reasons

In Q3 LeoVegas has reported,

in addition to the regions, the NGR from Italy, Denmark and Australia

Italy and Denmark are

reported as they are both regulated markets

Australia is reported since it is

now closed down and no revenues will originate from Australia in any future periods COMMENTS Sweden 37% Norway & Finland 15% Denmark 8% UK 12% Italy 5% Rest of Europe 13% Australia 6% Rest of World 4% NGR split all reported countries and geographies Q3 2017

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Game margin is defined as

the winnings LeoVegas has divided by the total amount

f bets, i.e. what percentage

LeoVegas on average wins

n a bet
Hold is defined as NGR

divided by deposits

Game margin and Hold are

correlated with each other, and periods with lower margin are often associated with lower Hold

Game margin in Q3’17 was

very close to its historical average

However, hold in Q3’17

decreased further to 28.6%

The continued downward

trend for hold is mostly explained by a mix shift towards countries with lower hold on average, like Denmark

Game margin and Hold

COMMENTS Game margin % and Hold in % 25,0% 27,0% 29,0% 31,0% 33,0% 35,0% 37,0% 3,40% 3,45% 3,50% 3,55% 3,60% 3,65% 3,70% 3,75% 3,80% 3,85% 3,90% 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 Game margin % Hold %

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Deposits from mobile

devices increased mainly driven by higher mobile usage in core markets

Mobile devices accounted for

70% of deposits in the quarter

Deposits from mobile

devices grew 63% year on year, while the same for desktop grew 41% 32

Mobile share of deposits

COMMENTS Deposits through mobile devices as a % of total deposits 50% 55% 60% 65% 70% 75% 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 Mobile deposits as a % of total

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FINANCI CIALS

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In Q3’17 adjusted EBITDA was

8.4 MEUR, a margin of 15.1%

Cost of sales as a percentage
f revenue increased mainly

due to higher gaming taxes in Denmark and the UK

Personnel expenses as a

percentage of revenue decreased due to vacations taken in Q3 which decrease the reported cost

Operating expenses

(excluding costs related to acquisitions and listing) were stable in relation to revenue

Marketing decreased slightly

to 40.7% of revenue but is

verall similar to the previous

quarters in 2017 34

P&L per quarter adjusted

COMMENTS P&L MEUR adjusted* P&L ratios adjusted* *Adjusted for listing-related expenses in Q4’15, Q1’16, Q1’17-Q3’17 and expenses related to acquisitions in Q3’17 1,1 1,7 4,0

2,5

9,8 10,0 6,2 6,1 8,4 11,9 13,3 12,5 18,7 14,3 14,9 18,8 20,8 22,6 2,7 3,1 2,9 3,6 2,8 3,1 3,8 4,8 5,4 2,2 2,4 3,3 3,7 4,1 3,9 5,1 6,2 4,8 4,7 5,6 6,9 7,4 8,6 9,3 9,9 11,7 14,4

10,0
10,0

20,0 30,0 40,0 50,0 60,0 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Cost of sales Personnel costs net of capitalised development costs Operating expenses including other income Marketing expenses EBITDA 4,9% 6,7% 13,5%

7,9%

24,7% 24,2% 14,0% 12,4% 15,1% 52,6% 50,9% 42,3% 60,4% 36,1% 36,2% 42,9% 41,9% 40,7% 12,0% 11,8% 9,9% 11,7% 7,1% 7,6% 8,8% 9,7% 9,7% 9,7% 9,1% 11,0% 11,9% 10,4% 9,5% 11,7% 12,4% 8,5% 20,7% 21,6% 23,2% 23,9% 21,7% 22,5% 22,6% 23,7% 26,0%

20%

0% 20% 40% 60% 80% 100% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Cost of sales Personnel costs net of capitalised development costs Operating expenses including other income Marketing expenses EBITDA

SLIDE 35

The marketing to revenue

ratio is the key determinant

f the profit margin

development at LeoVegas

The marketing to revenue

ratio in Q3’17 was 40.7%, which is close to the average over the last six quarters

LeoVegas’ margins have

been, and can likely continue to be, volatile between quarters, but will average out at levels that are consistent with LeoVegas’ 2018 financial targets

The marketing to revenue

ratio in Q4’17 is expected to increase from Q3’17 and will likely be the highest in 2017 35

Marketing spend and margin

COMMENTS Marketing to revenue % (negative scale) and Adjusted* EBIT margin %, quarterly 13.7% EBIT margin 12.6% EBIT margin Marketing to revenue % (negative scale) and Adjusted* EBIT margin %, annually

65,0%
60,0%
55,0%
50,0%
45,0%
40,0%
35,0%
30,0%
15,0%
10,0%
5,0%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Mark rketing e expense, % , % o

f

re revenues, n , negative s scale Ad Adjusted EB EBIT m marg rgin % % Adjusted EBIT margin % Marketing expenses % of revenues

58,0%
56,0%
54,0%
52,0%
50,0%
48,0%
46,0%
44,0%
42,0%
40,0%

0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 14,0% 16,0% 2014 2015 2016 2017 YTD Mark rketing e expense, % , % o

f

re revenues, n , negative s scale Ad Adjusted EB EBIT m marg rgin % % Adjusted EBIT margin % Marketing expenses % of revenues *Adjusted for listing-related expenses in Q4’15, Q1’16, Q1’17-Q3’17 and expenses related to acquisitions in Q3’17

SLIDE 36 36

The main item on the asset

side is cash, which is two thirds of assets

Current assets are

dominated by receivables at payment service providers

On the equity and liabilities

side equity is the largest item

Payables and accruals

related to supplier invoices and is dominated by marketing

Balance sheet

Balance sheet total 98.1 MEUR COMMENTS Assets MEUR 30 September 2017 Equity and liabilities MEUR 30 September 2017 Cash and cash equivalents; 66,6 Current assets; 14, 8 Property, plant and equipment; 2,0 Intangible assets; 14, 8 Equity; 57, 4 Payables and accruals; 3 2,7 Player liability; 4, 8 Other liabilities; 3,3

SLIDE 37 59,7 7,6 0,8 5,4

0.9
0.8
4.3
0.8

66,6

10,0

20,0 30,0 40,0 50,0 60,0 70,0 80,0 Cash and cash equivalents at beginning of period EBITDA Adjustments for non-cash items Change in working capital Investments in tangible assets Investments in intangible assets Final payment for Winga acq. Effects from exchage rate movements Cash and cash equivalents at end of period Cash flow from operating activities 13.8 MEUR Cash flow from investing activities -1.7 MEUR 37

Cash flow

Cash increased by 6.9 MEUR

in the quarter

Cash flow from operating

activities increased by 13.8 MEUR due to the EBITDA result and changes in working capital

Investing cash flow of -1.7

MEUR was equally driven by investments in intangible and tangible assets

The final payment for the

acquisition of Winga was made and decreased cash by 4.3 MEUR COMMENTS Cash flow MEUR Q3 2017 Final payment for acquisition

f Winga

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Sum Summary ry

SLIDE 39

Revenue growth of 40% and an adjusted EBITDA of 8.4 MEUR a 15.1% margin Acquisition of Royal Panda €100m debt financing Improved responsible gaming tools – Leo Safe Play October 1-23 NGR of 14.9 MEUR 70% growth

39

Summary Q3 2017

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Q& Q&A

40

SLIDE 41

APPE APPEND NDIX

41

SLIDE 42 50,0 51,0 52,0 53,0 54,0 55,0 56,0 Revenue in constant currency Currency movement Reported Revenue 55.5 55.6 42

Revenue in constant currency

would have been 55.5 MEUR

The positive currency effect

from the strengthening of the euro was 107 KEUR

Constant Currency Revenue

COMMENTS MEUR +0.1

SLIDE 43 43

Regulated and soon to be regulated markets for LeoVegas

Markets where LeoVegas has a gaming license Country Tax structure 0.5% on Sports turnover and 1.5 KEUR per license 15% on GGR 20% on GGR Markets LeoVegas pays gaming taxes or VAT but without license* Country Tax structure 23% VAT on Casino 19% VAT 40% tax on GGR Soon to be regulated markets where LeoVegas has presence Country Expectation 18% on GGR expected Q1’19 29% on GGR expected Q3’19 *No local license regime is in place Sports 1% on Turnover Casino 20% and Sports 22% on GGR Italy Ireland Denmark UK Malta Ireland Germany Austria Sweden The Netherlands

SLIDE 44 Market size increase Marketing channels open up Decrease in marketing clutter Increase or decrease in competition Changing competetive position of Svenska Spel Supply chain absorbtion of tax Decrease in bonus costs 10 20 30 40 50 60 70 80 90 100 10 20 30 40 50 60 70 80 90 100 Positive / / Ne Negative I Impact Pro robability 44

Potential dynamic effects in the Swedish market after regulation

Effects when market regulates Marketing clutter Positive and negative effects assessed against probability of occurring More channels Competition Supply chain Bonus costs Market size may decrease as competitors scale back marketing to protect margins in marketing open up changes as small companies leave, but large UK operators could enter absorbs its share of the gaming tax just as in the UK market may decrease as competitors scale back to protect margins may increase Svenska Spel will change its competitive position

SLIDE 45 45

Hypothetical EBITDA impact in Sweden with 18% tax on GGR

Example of potential EBITDA impact in market with 18% tax on GGR

This is a hypothetical

example of the EBITDA for LeoVegas in the Swedish market if an 18% gaming tax

n GGR is implemented
Tax of 18% on GGR means

that bonus rounds get taxed at 18% as well, this adds ca. 3% points to the tax impact

There are several positive

factors from regulation that mitigate the negative effects

n EBITDA from the tax
An increased market size has

the potential to have a very large impact on the absolute EBITDA level even though margins will be lower

We expect that roughly half
f the tax will naturally be
ffset and half will impact

profitability – assuming that marketing investments are not scaled back

Decreases in marketing can

further improve the EBITDA margin, if that is the right choice for the business at that point COMMENTS 18 3 2 3 1 1 1 3 10 5 10 15 20 Gaming tax 18% Tax on bonuses (not included in EBITDA) Market size increase Marketing channels

pen up

Decrease in marketing clutter Decrease in bonus costs Increase or decrease in competition Supply chain absorbtion

f tax

Impact on EBITDA before changes in marketing spend Decrease in marketing Perc rcentage p point i impact o

n EB

EBITDA m A marg rgin

SLIDE 46

20

40 60 80 100 120 140 160 180 200 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 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 Deposits

10

20 30 40 50 60 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 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 NGR

20 000

40 000 60 000 80 000 100 000 120 000 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 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 NDCs

20 000

40 000 60 000 80 000 100 000 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 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 RDCs

4 MAIN KPIS QUARTERLY

NDCs 97 210 (last quarter 73 014) RDCs 105 770 (last quarter 100 020) Deposits €193.1M (last quarter €167.9M) NGR €55.2M (last quarter €49.2) 46