Presentation Year-End Report February 25, 2016 Selectedhighlights - PowerPoint PPT Presentation

Presentation Year-End Report February 25, 2016

Selectedhighlights Year-End Report Successful IPO Call of War Proving Strong Momentum Quarterly Sales SEKm Share price SEK 40m annualized 10,1 sales in Q4 2015 ... Raised +68% SEK 75m Dec 8 th –31 st ...with estimated peak yet to be reached... Oversubscribed 4 Owner Structure several times ...and life-cycle to be Strengthen 0,4 years-long with strong Well renowned and long-term recurring profits as a result. Q2 Q3 Q4 Accelerated Growth with High Margins Unravel Launched February 9, 2016 UnderlyingEBITDA margin Net Revenue (SEKm) 20+ awards at E3 and winner of best Strategy Game 2015 at gamescom 3 other 57 +96% 23% +15pp 29 Winner Best Strategy Game 8% Further positive media and user reviews following the Launch 2014 2015 2014 2015 2

Business Overview Strategy Contents Use of proceeds Outlook 2016 Financials

Group structure Professional group management 1% 10% Share of group sales 4 near- 2015 autonomous 29% subsidiaries 60% 7 games Across multiple platforms Browser Console PC Browser Mobile Browser Tablet PC 4

Attractive and diversified games portfolio Launch in: 2009 Q3 2014 Q2 2015 Q1 2016 27% of group revenue 1% of group revenue 29% of group revenue (Coldwood) 31% of group revenue } Still growing since launch in 2009 } Most successful launch to date } Winner of 20+ awards at E3 and gamescom Decent launch but marketing spend } shifted to Call of War with superior marketing fROI Long tail games Q2 2015 Q3 2001 Q2 2003 1% of group revenue 1% of group revenue 10% of group revenue } 14-year life-cycle – still stable revenues New action management game } launched on new engine Released on Steam in Nov 2015 } 5

Portfolio Revenue Mix Significant 10 Quarterly Revenues in SEKm improvements 9 in portfolio 8 mix 2015 7 6 5 4 3 2 1 0 2009 2010 2011 2012 2013 2014 2015 Supremacy 1914 Call of War ManagerZone Contracting 6

Winner of 20+ awards at E3 and gamescom Winner Best Strategy Game

Still growing since launch in 2009 8

Supremacy 1914 –Sales development Sales rolling 4Q SEKm Strong growth Strongest 20 first 54 months rolling 4Qs sales to 15 date = now Launched 10 6+ years ago (June 2009) 5 0 2009 2010 2011 2012 2013 2014 2015 Total cumulative sales since inception is SEKm73.2 9

Stillfront’s most successful launch to date (2015) 10

Call of War –WW2 Strategy Game SEK 40.4m annualized sales SEK 10.1m Quarterly Sales SEKm 10,1 Already 51% of Stillfront Call of War accounted for 51% of group revenues in Q4 2015 Revenues yet to peak 4 Strong growth every quarter so far Designed for long life-cycle 0,4 Call of War is an immersive long-stay strategy game with the potential to sustain a high revenue over a long life-cycle Q2 Q3 Q4 SEK ~2m in initial development costs recouped in terms of sales after first four months. The cumulative sales amounts to SEK 14.5m 11

Business Overview Strategy Contents Use of proceeds Outlook 2016 Financials

Business strategy – 3 pillars 1 2 3 P P ortfolio of games IP↑ Sales L Sales L ong life cycle games Profits Profits E E ngines for scalability X Organic + M&A Organic M&A X (cross) platform Improve risk/reward Grow to higher profitability More IP ownership in Coldwood 13

P L E X Portfolio strategy (compared to a single-large-bet strategy) Revenue grows steadily Risk is reduced Revenues With a portfolio of games Total group risk Time Game 1 Game 2 Game 3 Game 4 Game 5 ••• “Ongoing” upside potential Inter-game synergies Game 20 Blockbuster Blockbuster game? game? • Given the high margin on games, also Revenues modestly successful products are profitable which limits the downside of the strategy • Cross promotion • Code recycling • Easier to kill less profitable “pet projects” with a portfolio of games 14

P L E X Long life-cycle games for recurring revenues …enabling Targeting games and players Recurring revenue long life-cycle games with attractive attributes… Long gaming periods Still growing since launch in 2009 Each gaming round often lasts How many paying weeks or months rather than hours Supremacy 1914 players or days came back in 2014? 14-year life-cycle – still ongoing 65% High gamer devotion 40% 38% 37% 32% Social, interactive 2009 2010 2011 2012 2013 and challenging games High-quality games 23% of paying players With high game depth stay for 60 months 15

P L E X Game engines for scalability and risk reduction Within samegame category A game …a software framework to → → engine is… efficiently produce multiple games Across different platforms Scalability and risk-reduction benefits Reduces development costs Reduces time-to-market Reduces risk Development costs Time-to-market 24 €950k Risk months Lowered risk with proven Game 1 game engine 9 €365k months 7 months “SUP” “SUP” Game 2 One-off €200k War Game War Game invest- Engine Engine ment Game 3 Game 2 Game 3 Engine & Game 1 Game 2 Game 3 Engine & Game 1 16

P L E X Cross-platform: No platform bets –focus on creating excellent content War Puzzle-platform Sports mgmt Action mgmt 4 game engines game engine game engine game engine game engine (Bytro) (Coldwood) (Power Challenge) (Dorado) 7 games Acrossmultiple platforms Browser Console PC Browser Mobile Browser Tablet PC Focus on creating Engine–platform Knowhow over all excellent content scalability platforms …not taking platform bets Stillfront’s game engines can already Cherry-pick platform(s) make games over several platforms most suited for each game 17

Higher profitability by capitalizing on scalable business model with growth strategy + = Scalable Growth Increased business model strategy profitability Low marginal cost for New engines producing and distributing digital Sales content Profits …almost exclusively New games payment provider costs Scalable development Organic M&A Increased marketing with game engines Development costs decrease significantly with each game produced on an existing Organic & M&A engine 18 18

IP↑ Gradually increasing Intellectual Property (IP) ownership in Coldwood Contracting fee IP ownership (royalties) T oday Way forward Develop games for stable Increase IP ownership contracting fee with gradually – initially by building a considerable royalty parallel team participation Attractive risk/reward strategy Attractive risk/reward strategy as Stillfront grows given Stillfront’scurrent size Stillfront’sclear aim is to gradually increase its IP ownership in Coldwood’sgames as it grows and can absorb a higher risk level. This strategy has been proven successful by peers. 19 19

Business Overview Strategy Contents Use of proceeds Outlook 2016 Financials

CurrentPosition Scalable Derisked Derisked and scalable Low marginal cost on producing and distributing digital Portfolio strategy reduces risk and stabilizes revenue growth… content business model… …while capturing inter-game synergies Scalable development with game engines Proven Promisingnear-term Coldwood position pipeline Well-renowned studio with good Strong current financials …now momentum, receiving great response on Unravel Increasing MAU with high retention Call of War recently released well-positioned… Traction with new and long-lived New Dorado game engine and game Solid track record – collaboration cash cow games with both Sony and EA ManagerZone engine improvements and new monetizing features Organic growth Acquisitionstrategy IP at Coldwood …for accelerating New engines Target smaller gaming companies – Increased IP ownership gradually – growth strategy add value by guiding creativity initially by building a new title with a New games through professional structure parallel team Increased marketing 21