Shaping the future of entertainment Rolling 12 month performance 8% - - PowerPoint PPT Presentation

Shaping the future of entertainment

Rolling 12 month performance

8% organic sales growth & 29% profit growth 6% Nordic Ent.

• rganic sales growth

& 11% profit growth 25% total shareholder return 37% MTGx organic sales growth & EBITDA profitable

2

Net sales

(SEK million)

Operating income

(SEK million)

14,999 17,537 2016 2017 1,060 1,264 2016 2017

Operating income before items affecting comparability (IAC) Digital revenues (+68%)

22% 31%

Net sales from continuing operations

Transformation is part of our DNA

1987 2018

Refers to acquisitions and divestments from 2015 onwards * Bulgaria expected to close in H2 2018

Acquisitions EV = SEK 5.9 bn

ESL ESEA Kongregate Zoomin.TV Engage Digital Partners Splay InnoGames DreamHack

Divestments EV = SEK 8.6 bn

Russia Africa Baltics Sappa Hungary Ukraine Czech Rep. Trace & Bulgaria*

Digital transformation & portfolio management

• A pure play in digital entertainment
• Comprising esports (ESL & DreamHack), online gaming

(InnoGames & Kongregate), digital video content (Zoomin.TV & Engage Digital Partners), other investments

• President & CEO: Jørgen Madsen Lindemann
• CFO: Maria Redin
• Shares will remain listed on Nasdaq Stockholm
• The leading entertainment provider in the Nordic region
• Comprising Nordic Entertainment, MTG Studios and

Splay Networks

• President & CEO: Anders Jensen
• CFO: Gabriel Catrina
• Shares will be distributed to MTG shareholders and listed
• n Nasdaq Stockholm

Plan to split MTG into two listed companies

• Two publicly listed companies that are shaping the future of their respective industries with leading brands
• Two businesses with improved focus and agility to capitalise on growth opportunities and drive shareholder value
• Two distinct investment cases with clear financial profiles and capital structures
• The time is right – decision taken from a position of strength. Robust financial performance, strong leadership teams and an

inspired workforce

• Distinct investment cases & equity stories
• Facilitates separate funding models & capital allocation
• Enables fair valuation of both businesses

Financial

• Greater focus & clarity
• Serving different target markets
• Adapting faster to market dynamics

Strategic

• Aligned accountability & incentivisation
• Simpler decision making
• Attracting highly skilled talent

Operational

1 2 3

Compelling rationale – the natural next step

Pay TV SVOD Free TV AVOD Radio Pay TV SVOD Free TV AVOD Pay TV SVOD Free TV AVOD Radio Pay TV SVOD AVOD

A fully integrated media powerhouse

Norw rway Den enmar ark MTG S Studio ios (17 (17 c countries ies) Fi Finl nland nd Spl play Ne Networks ks Swed eden en

• Leading entertainment provider with a uniquely

integrated structure

• Nordic Entertainment: Pay- & Free-TV + leading

pay and free streaming services

• MTG Studios: Nordic region’s leading content

production company

• Splay: Nordic’s leading digital video network
• Undisputed content leadership: sports, acquired

content & top quality original productions from MTG Studios and Splay

• Leading digital positions through Viaplay, Viafree,

Viareal, I Like Radio & Splay

• Digital revenues increased by 31% in 2017 to account

for 19% of total sales

Note: USD transaction headwind on EBIT amounted to SEK 187m, 184m and 78m for 2015, 2016 and 2017 respectively

13,684

• 263

1,986 5,094 6,867

12,876

• 159

1,897 4,866 6,272

12,219

• 78

1,810 4,656 5,831

Eliminations MTG Studios & Splay Free-TV Pay-TV

1,771 1,557 1,530

Net Sales (SEKm) EBITDA before Group central costs (SEKm)

2015 2016 2017 2015 2016 2017

CAGR +6% CAGR +8%

Nordic Entertainment Group in brief

CAG AGR +1 +18%

Multiple digital growth drivers

2015 2015 2016 2016 2017 017 2015 015 2016 016 2017 017 2015 015 2016 016 2017 017

Started streams Started streams BTV subs

CAG AGR +49% 9% CAG AGR +43% 3%

Pay TV platform Pay TV channels Free TV channels SVOD AVOD TVOD Pan-Nordic

Competitively positioned to win

An unmatched portfolio of sports rights…

National Soccer Leagues

2026 2021 2021 2022 2021 2024 2022 2021 2022 2018 2021 2018 2024 2021 2021 2021 2022 2021 2024 2021 2022 2018 2021 2018 2024 2022 2021 2021 2022 2021 2024 2021 2022 2018 2021 2018 2024 2018 2021 2021 2022 2021 2024 2022 2018 2022 2018 2021 2018 2024 2018 2018 2021 2025 2021 2021 2021 2025 2025 2025 2018 2019 2018 2018 2018 2019 2019 2019

1st Pay window 2nd Pay window

…and the best acquired content

14

Titles premiered

18

Titles in production

22

Titles in development

Over 50 original productions

2016 2017 2018 2020 2019 2021

Rig 45

RIG 45

Telcos & Pay TV

• perators

Local players Local players Local players Local players Local players

Cinema EST TVOD SVOD

SVOD Sports

TVE

Viaplay – a unique product offering

Nordic Entertainment Group – key priorities

• Capi

apital alise o

• n content an

and di d digital al l leade adership po p positions

• Cost c

t contr ntrol & c conti ntinu nue to s shift i t inv nvestm tments nts t to c cont ntent nt & o

• nl

nline ne

• Bu

Build a s str trong ng int nterna rnati tiona nal I IP, producti tion a n and nd di distribut bution h hous use

• Expan

Expand d pr produc duct offering i in e eac ach m mar arket

• Look for

r stru tructu tura ral o

• pportu

rtuni niti ties t to dri rive c conv nverg rgenc nce

The new MTG

Digital Video Content Online Gaming Other holdings Esports

MTG – a pure play in digital entertainment

193 206 1 234

1 012 1 370

2016 2017 2017 PF 1,206 2,810 Net Sales (SEK m) EBITDA* (SEK m) 3,550

• 170

36 202

2016 2017 2017 PF

1 1

New MTG – a digital hyper-growth story

• A pure-play global digital entertainment

company

• eSports: The world’s leading esports company

with category brand leaders that are shaping the future of the industry

• Online gaming: 2 proven concepts with multi-

platform development & publishing capabilities

• Digital video content: Helps influencers, brands

& creators to succeed on digital & social platforms

• Successful M&A record of investing in globally

attractive digital entertainment verticals with portfolio synergies

• VC funds to provide access to future M&A

targets

Online Gaming Digital Video Content excl. Splay eSport

*EBITDA before Group central costs

• 74% owned
• The world’s leading esports company

and the category brand leader

• League operator, stadium events
• rganiser and content producer
• 100% owned
• Grass-roots LAN parties & festivals
• Focus on interaction & gaming
• Building high engagement levels

Our esports brands are shaping the industry

Source: NewZoo – 2018 Global Esports Market Report

Game publisher fees Media rights Advertising Merchandise & tickets Sponsorships 26% CAGR

2017 655 USDm

14% 13% 21% 36% 16%

2021 1,651 USDm

24% 9% 14% 46% 7%

Esports – a hyper-growth industry

LEGENDARY

The world’s best

PRO

Esports champions

AMATEUR

Prove your skill

CASUAL

Good luck and have fun

VIEWING PARTICIPATION

All games All platforms All levels Global presence

From Amateur to Pro across relevant games

Participation Money Product Content

Games Developers & Publishers Brand Partners & Advertisers

Players/Teams League Operators/ Content Producers Audience Distributors

The evolving esports ecosystem

Global gaming market (USD billion)

25 24 32 36 44 69

2016

101

2020E

129 12% 3% 0%

Mobile & Browser Console PC

6% CAGR

Online gaming – a huge global market

Source: Newzoo; OC&C Analysis

More paying players More players Higher spend per player

• 100% owned
• Proprietary publishing platform with more than 100,000

live games

• Expanding into 1st party games development with

several bolt-on acquisitions of smaller studios

• Provides valuable network access and abilities to screen

the game developer landscape

• 2017 pro forma (as if consolidated from Jan 2017) sales

up 43% to SEK 428m with ~10% EBITDA margin

• 51% owned
• Cross-platform games developer with six successful

titles in mid-core strategy segment

• InnoGames has combined healthy top-line growth

with high & stable margins

• 2017 pro forma (as if consolidated from Jan 2017)

sales up 25% to SEK 1,547m with ~25% EBITDA margin

Two proven online gaming investments

The new MTG – key priorities

• Become Europe’s preferred partner for

digital entertainment companies around the world

• Maintain position as the world’s #1

esports company

• Further develop our positions in online

gaming

• Selective M&A to expand position in

existing verticals and exploit

• pportunities in new verticals
• Look for strategic partnerships to drive

further value creation

facebook.com/MTGAB Modern Times Group MTG AB @mtgab MTGModernTimesGroup moderntimesgroup

Find out more @mtg.com and @nentgroup.com

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