Q2 2018 Presenters GUSTAF VIKTOR HAGMAN FRITZN Group CEO and - PowerPoint PPT Presentation

Q2 2018

Presenters GUSTAF VIKTOR HAGMAN FRITZÉN Group CEO and Co-founder Group CFO 2

The Leo Passion Leading the way into the mobile future 3

The growth company LeoVegas Strategy Strong company culture Expansions strategy Expand in regulated markets and markets that are soon be regulated, new product categories and to carry out strategic and complementary acquisitions Product Strategy To be the most innovative and GameTech Effective marketing creative company in the gaming industry 4

• Quarterly report highlights Agenda • Responsible Gaming & Sustainability • Business update • Business KPIs • Financial targets • Financials • Summary • Q&A 5

Quarterly report Highlights and events 6

Revenue since launch MEUR 87.4 90 Q2’18 growth Y-Y 76% 80 Q2’18 growth excl. acquisitions Y-Y (organic 70 27% growth) 60 Q2’18 growth excl. acquisitions and closed 38% markets (Australia) Y-Y 50 4 0 30 20 10 0 4 4 12-Q 1 2 3 13-Q 1 2 3 4 -Q 1 2 4 15-Q 1 2 3 4 16-Q 1 2 3 4 17-Q 1 2 3 18-Q 1 2 12-Q 12-Q 12-Q 13-Q 13-Q -Q 3 15-Q 15-Q 16-Q 16-Q 17-Q 17-Q 17-Q 18-Q 13-Q -Q -Q 15-Q 16-Q 14 14 14 14 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

Q2 2018 Highlights Growth: Revenue: +76 % 87.4 MEUR +37.7 MEUR Organic growth: 27% Underlying organic growth 38% Mobile deposits: EBITDA: NDCs 69 % 15.0 MEUR 134 487 17.2 % margin Growth: 84% 8

Product mix and locally regulated NGR Casino Classic 77% ofGGR LiveCasino15% ofGGR Sport 8% ofGGR Locally regulated NGR: 39% 9

Responsible Gaming & Sustainablility 10

Responsible Gaming • Being data driven is key • Algorithms to detect unsound player behaviour • Building the next generations responsible gaming system based on machine learning • Sustainable business 11

Sustainability and key projects Revenue March 4.0 MEUR Key projects delivered before World Cup New Front-end platform Revenue: GDPR Revenue: Revenue: 5.6 Compliance – primarily in the UK 5.6 5.6 Long term and sustainable growth MEUR MEUR MEUR 12

Business update 13

Market comments Sweden Italy Welcoming Sweden as a regulated market – One of the largest gaming market in Europe more opportunities open up Successful migration to our proprietary Application 1 st of August 2018 technology platform Rhino Law to be implemented 1 January 2019 The coalition government in Italy has proposed a ban on all gambling advertising – very uncertain outcome UK Harder to work with affiliates because of the harsher compliance requirements from the UKGC The affiliates also need to adapt to the requirements New approval structure for affiliates has meant we’ve added more affiliates in Q3 so far Discussions with the UKGC how LeoVegas Mobile gaming Group can improve further 14

World Cup fun facts – Cash Turnover Most popular bet: +72% Full time winner Comparedto a normal footballmonth Mobile: PreMatch Margin 80% 64% 12.8% 15

Executive management Strengthening the Executive management and increased focus on LeoSafePlay and sustainability Viktor Fritzén – Senior advisor Stefan Nelson – New CFO Louise Nylén – Deputy CEO Richard Woodbridge – New COO Marcus Nylén - COO until Richard joins - after that solely focus on LeoVegas expansion Rikard Ljungman – Leave his position as CCO and focus only on responsible gaming and LeoSafePLay 16

Royal Panda and Rocket X Revenue: EBITDA Q2’18 EBITDA Q2’18 Revenue Q2’18 5.6 Revenue Q2’18 4.0 MEUR 2.4 MEUR 13.4 MEUR 10.9 MEUR 30.0 % margin 21.8 % margin MEUR 17

Current Trading – Start of Q3 NGR July 2018 26.4 MEUR an increased of 45 % compared to July last year 18

Financial targets 2020 EBITDA Revenue MEUR 600 ? 100 600 ? ? ? 217 164,8 25 141 26 16 83 37 16 2 1 20 13 0 20 14 20 15 20 16 20 17 20 18 - H 1 20 19 20 20 20 13 20 14 20 15 20 16 20 17 20 18 - H 1 20 19 20 20 19

Business KPI’s 20

Q2’18 drivers Q1’18 back-drop Q2’18 30.5 MEUR in NDCs -8% Q-Q +1% 30.2 MEUR in marketing growth Excluding RX: marketing -17% Deposits 7% Q-Q Revenue 13% Q-Q growth growth 146 063 NDCs Excluding RX: 1% Excluding RX: 4% RDCs 13% Q-Q growth Excluding RX: Acquisition of Rocket X 9% 21

Customer base COMMENTS Depositing customers, new and returning (per platform/brand) • New depositing customers 1 80 0 0 0 175 500 (NDCs) decreased 8% Q-Q R o cket X N D C s R o cket X R D C s following the all time high in Q1 2018 1 6 0 0 0 0 R o yal P an d a N D C s R o yal P an d a R D C s • The NDC base remains broad-based across Leo V eg a s N D C s Leo V eg a s R D C s geographies, although the 1 4 0 0 0 0 134 487 UK is more significant following the consolidation of Royal Panda and Rocket 1 20 0 0 0 X • Returning Depositing 1 0 0 0 0 0 Customers (RDCs) growth was 13% sequentially • RDC growth excluding the 80 0 0 0 effect of consolidation of Rocket X was 9%, which is a strong Q-Q development 60 0 0 0 4 0 0 0 0 20 0 0 0 - 22 20 1 6-Q 2 20 1 6-Q 3 20 1 6-Q 4 20 1 7-Q 1 20 1 7-Q 2 20 1 7-Q 3 20 1 7-Q 4 20 1 8-Q 1 20 1 8-Q 2

Average spend per customer Deposits EUR per depositing customer NGR EUR per depositing customer COMMENTS • Average deposit per 1 0 0 0 30 0 depositing customer in Q2’18 increased slightly from Q1’18 90 0 mainly due to a higher 60 % proportion of the customer 250 base being RDCs, as RDCs on 80 0 average have a higher spend 50 % • Average NGR per depositing 70 0 20 0 customer increased more than average deposit per 60 0 4 0 % D ep o s i t s p er d ep osi t i ng depositing customer due to custom er the consolidation of Rocket X P rop oti on of R D C s i n the 50 0 150 that have higher hold d ep osi t i ng customer b ase 30 % N G R p er d ep osi ti ng custom er 4 0 0 10 0 30 0 20 % 20 0 50 10 % 10 0 - 0 % - 4 Q1 Q2 Q3 Q4 18-Q 1 4 Q1 Q4 2 3 2 2 3 Q2 Q3 18-Q 1 2 16-Q 16-Q 16-Q 18-Q 16-Q 16-Q 16-Q 18-Q 17- 17- 17- 17- 17- 17- 17- 17- 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 23

Marketing and customer acquisition cost Marketing spend and Customer Acquisition Cost COMMENTS • Marketing spend increased by 30 0 35, 0 1% from Q1’18 to 30.5 MEUR in M arketi ng sp end ME U R Q2’18, which is the highest level in LeoVegas’ history, but C A C E U R 30.5 MEUR is driven by the consolidation 30 , 0 of Rocket X since marketing 250 at LeoVegas and Royal Panda decreased slightly Q-Q 227 • NDCs decreased by 8% in the C) EUR 25, 0 same period CAC) 20 0 • The Customer Acquisition Cost (CA Cost (CAC) saw a slight MEUR Marketing cost ME increase Q-Q but was still at 20 , 0 Customer Acquisition Co the second lowest level in six quarters 150 • Compared to the same period last year, marketing increased 15, 0 by 47% while the CAC Ma decreased by 20% 10 0 • ROI in Q2’18 was high, Cu 10 0 , continuing the trend over the last quarters 50 5, 0 - - Q 2' 1 6 Q 3' 1 6 Q 4 ' 16 Q 1' 17 Q 2' 1 7 Q 3' 1 7 Q 4 ' 17 Q 1' 18 Q 2' 1 8 24

NGR by country and region NGR split all reported countries and geographies Q2 2018 COMMENTS • Following the consolidation of Rocket X, the UK is now the largest contributor of NGR in the LeoVegas Group at 28% of total R e s t o f W o r ld 9 % • NGR from locally regulated markets was 39% of total S w e d e n 2 4 % R e s t o f E u r o p e 1 8 % It a ly N o r w a y & F in la n d 3 % 1 0 % D e n m a r k 8 % U K 2 8 % Regulated NGR 39% of total 25