Presentation Q3 Report November 14, 2017
StillfrontGroup in brief A developer and publisher of games, with the aim of becoming the leading group of independent studio • Approximately 1 159k monthly active users (“MAUs”) and 235k daily active users (“DAUs”) with significant Growing global base loyalty and spending (core games excl. downloadables) • of loyal consumers Global reach with consumers from over 100 countries • Major markets are US, UK, Germany, MENA and France • Eight studios in nine countries on three continents Highly skilled and diversified • ~140 highly skilled and experienced game professionals group structure • Combines small indie studios’ agility with the strength of a professional public structure • ~30% owned by active key individuals in our studios Strong ownership structure • Key industry institutions hold significant positions • Good retail spread • Strong growth: CAGR 2012 – 2016 of 53% • Operational profitability (EBITDA) of 36% in 2016 Healthy financial development • Net margin of 22% in 2016 • Diversified portfolio and strong mix of studios and games • Many million consumers have played our games with many very loyal to our brands Our Brands and our Publishing • Majority of current brands are long term free-to-play strategy games • ~90% of Q3 revenues comes from own brands and/or self-publishing • Unravel is published and owned by EA • About 47% of Q3 run rate revenues are derived from mobile usage Source: Company information 2
SelectedhighlightsQ3 report Stillfront portfolio shows strengthand stability Investments have built a strong growth momentum ✓ Last 16 months of investments have 34 consecutive built strong momentum ATH months of ATH ATH Q revenues ✓ Number of core games has increased in LTM revenues margin of SEK 45 m from 4 to 15 equalling +275% 42% ✓ Acquisition of eRepublik Labs paying off, of our revenues are QoQ 22 % ~ 90 % performing over expectations EBITDA growth own brands and 3 rd party publishing and cross platform ✓ self-published are being accelerated High growth and solid earnings War and Peace -our most successful launch so far Net revenues rolling LTM EBITDA rolling LTM ✓ Global featuring in Google Play store 150 50 120 40 ✓ Monetization metrics 3x World at War, 90 30 which had highest booked revenue in Q3 60 20 ✓ Still early, but the strongest launch in 10 30 Stillfront history 0 0 3
Business Overview Strategy Contents Financials Outlook 2017
The gaming market is exciting but contains some specific challenges Balancing reward and risk… … is key Stillfront’s reward/risk profile • The largest entertainment market globally exceeding USD 100bn and still growing by Thrilling market ~7.2% p.a. 1 Less volatility and lower risk • Dynamic with many new areas evolving • Fragmented and unstructured market • High volatility for most companies with title Uncertainties risks, tech shifts and fast moving consumers • before launches Significant CAPEX needed with little ROI- predictability Blockbuster game? • Blockbuster game? By nature high profitability in already fairly successful products Revenues • Profitable Large number of small and product-driven launched products companies that are underexploited • Some CAPEX needed also for proven titles, but with higher ROI-predictability • Stillfront works systematically by utilizing the opportunities in the market to form a sound and predictable business • Multidimensional opportunities for M&A and • Stillfront combines small indie studios’ agility with the strength of a alliances in the existing market Consolidation • professional public structure Hard to invest without detailed industry opportunities knowledge, operational experience and • Stillfront would like to participate and create value in the consolidation of the personal network gaming market in the coming 3-5 years Stillfront targets a low-risk segment of the gaming industry Source: Company information, Newzoo 5
Stillfront is currently operated through eight autonomous game studios … Professional central management Eight near-autonomous subsidiaries 4% (% share of Q3 2017 revenue) 24% 26% OFM 11% 2% 3% 9% 21% 15 core games as per Oct 31 2017 Across multiple distribution platforms Tablet Browser Mobile PC Console Source: Company information. Note: Management accounts 6
… with an increasing amount of core products and profits Continuously evolving game portfolio with strong game build-up creates stable revenue base HEALTHY LEGACY CROSS PLATFORM MOBILE APPS DOWNLOADABLES 17% 29% 43% 11% Launch in Q2 2015 Launch in 1988 & 1996 respectively Launch in Q3 2016 Provided the highest booked revenue Low cost of operations provides high Provided the highest booked revenue of all brands 9M 2017 margins of all brands in Q3 2017 Q3 run-rate sales: SEK 30.8m Q3 run-rate sales: SEK 16.4m Q3 run-rate sales: SEK 32m Q3 EBITDA margin (Bytro Labs) : 43% Q3 EBITDA margin (Simutronics) : 69% Launched Q1 2016 Q3 EBITDA margin (eRepublik) : 40% Sequel under development Q3 run-rate sales (Coldwood): SEK 19.2m Q3 EBITDA margin (Coldwood): 43% Launch in 2003 Launch in Q2 2017 Launch in Q3 2017 Low cost of operations provides high Encourages long player interaction - built Strong launch - being optimized for margins on Supremacy engine engagement and monetization Q3 run-rate sales: SEK 8m Q3 run-rate sales: SEK 4m Q3 run-rate sales: SEK 19m Q3 EBITDA margin (Dorado+Bytro) 1 : 30% Q3 EBITDA margin (OFM Studios) : 45% Q3 EBITDA margin (Simutronics) : 69% % share of group revenue in Q3 2017 Source: Company information - based on management accounts 7 1) Conflict of Nations is based on Bytro Labs Supremacy engine and therefore costs are shared over studios
Risk goes down and financials go up – our strategy kicks in Significant development at decreased risk… …through increased diversification Revenue per game Q1 2016 Revenue per game Q3 2017 Achievements in the last sixteen months: Conflict of ManagerZone DragonRealms ✓ Diversified platform mix with mobile growing fastest Nations 3% ManagerZone 3% World at War 2% 5% eRepublik.com 18% ✓ Number of studios up by 100% Supremacy 3% Admiral Call of War 1914 Age of Lords 4% 46% 19% ✓ Number of core products up by 275% 4% OFM 5% ✓ Broader geographical distribution Call of War Tank Storm 17% 6% ✓ Risk-weighted revenues and earnings increase Supremacy Coldwood 1914 30% ✓ Rolling 12 months revenues at ATH for 34 consecutive months 6% GemStone SIEGE: Titan 7% Coldwood Wars 11% 11% LTM net revenue development Quarterly net revenue development per game 50 Supremacy 1914 ManagerZone 28.5% 36.1% 32.7% 45 Quarterly Revenues in SEKm, Coldwood 140 40 Management Accounts Call of War 120 35 Conflict of Nations 100 GemStone 30 80 SEKm DragonRealms 25 60 Tank Storm 20 40 Admiral 15 World at War 20 Age of Lords 10 0 eRepublik.com Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 5 OFM 2015 2016 2017 0 SIEGE: Titan Wars 2013 2014 2015 2016 2017 GRAND TOTAL EBITDA margin for the full year 2015 & 2016 Q1-Q3 2017 (in accordance with IFRS) 8
Traffic numbers DAU Comments (’000) 274% • Continued high growth rates in Q3 68% • MAU quarterly average above 1 million for the first time • Quarterly DAU growth higher than MAU growth – 235 improved engagement with our products 140 77 72 63 • Quarterly player growth driven by SIEGE: Titan Wars launch and acquisition of Online Fussball Manager 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 MAU • Excisting portfolio of games continues to have stable (’000) player base and engagement 420% 48% • Exciting near-term plans with potential for further growth • Call of War on mobile and Steam in addition to browser • SIEGE: Titan Wars - optimizing engagement and monetization • War and Peace and Nida Harb 3 launched • Football Empire to be soft launched 1 159 • 1 unannounced new release before end of year 784 310 290 223 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 9
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