Shaping the future of entertainment
Rolling 12 month performance 8% organic sales 6% Nordic Ent. 37% MTGx organic 25% total growth & 29% profit organic sales growth sales growth & shareholder return growth & 11% profit growth EBITDA profitable 2
Net sales Operating income (SEK million) (SEK million) 17,537 1,264 1,060 14,999 31% Digital 22% revenues (+68%) 2017 2016 2017 2016 Net sales from continuing operations Operating income before items affecting comparability (IAC)
Transformation is part of our DNA 2018 1987
Digital transformation & portfolio management Kongregate Baltics Engage Czech Hungary Digital InnoGames Rep. Partners Divestments Acquisitions Africa ESL ESEA Russia EV = SEK 8.6 bn EV = SEK 5.9 bn Trace & Ukraine Splay DreamHack Bulgaria* Sappa Zoomin.TV Refers to acquisitions and divestments from 2015 onwards * Bulgaria expected to close in H2 2018
Plan to split MTG into two listed companies A pure play in digital entertainment The leading entertainment provider in the Nordic region • • • Comprising esports (ESL & DreamHack), online gaming • Comprising Nordic Entertainment, MTG Studios and (InnoGames & Kongregate), digital video content (Zoomin.TV Splay Networks & Engage Digital Partners), other investments President & CEO: Anders Jensen • President & CEO: Jørgen Madsen Lindemann CFO: Gabriel Catrina • • CFO: Maria Redin Shares will be distributed to MTG shareholders and listed • • • Shares will remain listed on Nasdaq Stockholm on Nasdaq Stockholm • 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
Compelling rationale – the natural next step Greater focus & clarity • 1 Strategic Serving different target markets • Adapting faster to market dynamics • Aligned accountability & incentivisation • 2 Operational Simpler decision making • Attracting highly skilled talent • • Distinct investment cases & equity stories 3 Financial • Facilitates separate funding models & capital allocation • Enables fair valuation of both businesses
A fully integrated media powerhouse Swed eden en Norw rway Pay TV SVOD Pay TV SVOD Free TV AVOD Free TV AVOD Radio Radio Den enmar ark Finl Fi nland nd Pay TV SVOD Pay TV SVOD Free TV AVOD AVOD MTG S Studio ios (17 (17 c countries ies) Spl play Ne Networks ks
Nordic Entertainment Group in brief Net Sales EBITDA before (SEKm) Group central costs (SEKm) Leading entertainment provider with a uniquely • CAGR CAGR integrated structure +6% +8% 13,684 • Nordic Entertainment: Pay- & Free-TV + leading 1,771 12,876 pay and free streaming services 12,219 1,557 1,530 • MTG Studios: Nordic region’s leading content production company 6,867 6,272 5,831 • Splay: Nordic’s leading digital video network • Undisputed content leadership: sports, acquired content & top quality original productions from MTG Studios and Splay 5,094 4,866 4,656 • Leading digital positions through Viaplay, Viafree, Viareal, I Like Radio & Splay 1,986 1,897 1,810 -78 -159 -263 • Digital revenues increased by 31% in 2017 to account for 19% of total sales 2015 2016 2017 2015 2016 2017 Pay-TV Free-TV MTG Studios & Splay Eliminations Note: USD transaction headwind on EBIT amounted to SEK 187m, 184m and 78m for 2015, 2016 and 2017 respectively
Multiple digital growth drivers Started streams Started streams BTV subs CAG AGR CAG AGR CAG AGR +1 +18% +43% 3% +49% 9% 2016 016 2017 017 2016 016 2017 017 2016 2016 2017 017 2015 015 2015 2015 2015 015
Competitively positioned to win Pay TV Pay TV Free TV SVOD AVOD TVOD Pan-Nordic platform channels channels
An unmatched portfolio of sports rights … National Soccer Leagues 2021 2022 2024 2018 2021 2018 2021 2021 2022 2021 2024 2022 2026 2018 2019 2021 2025 2021 2022 2024 2018 2021 2018 2021 2021 2022 2021 2024 2021 2018 2021 2025 2018 2019 2018 2021 2022 2024 2018 2021 2018 2021 2021 2022 2021 2024 2022 2021 2025 2018 2019 2018 2022 2024 2018 2021 2018 2021 2021 2022 2021 2024 2022 2018 2025 2021 2018 2019
… and the best acquired content 1 st Pay window 2 nd Pay window
Over 50 original productions 22 14 18 Titles in Titles Titles in development premiered production 2016 2017 2018 2019 2020 2021 RIG 45 Rig 45
Viaplay – a unique product offering SVOD Cinema SVOD EST TVOD TVE Sports Local players Telcos & Pay TV operators Local players Local players Local players Local players
Nordic Entertainment Group – key priorities Capi apital alise o on 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 onl 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 opportu rtuni niti ties t to • dri rive c conv nverg rgenc nce
The new MTG
MTG – a pure play in digital entertainment Digital Online Other Video Esports Gaming holdings Content
New MTG – a digital Net Sales EBITDA* hyper-growth story (SEK m) (SEK m) 3,550 2,810 A pure-play global digital entertainment • company 1 370 • eSports: The world’s leading esports company with category brand leaders that are shaping the 1,206 future of the industry Online gaming: 2 proven concepts with multi- • 202 1 234 platform development & publishing capabilities 1 012 • Digital video content: Helps influencers, brands 36 193 206 & creators to succeed on digital & social 2016 2017 2017 PF platforms *EBITDA before Group central costs -170 Successful M&A record of investing in globally • attractive digital entertainment verticals with portfolio synergies eSport VC funds to provide access to future M&A • 1 1 2016 2017 2017 PF targets Online Gaming Digital Video Content excl. Splay 1) 2017 pro forma as if acquisitions had been consolidated since Jan 1
Our esports brands are shaping the industry • • 100% owned 74% owned • • Grass-roots LAN parties & festivals The world’s leading esports company • Focus on interaction & gaming and the category brand leader • • Building high engagement levels League operator, stadium events organiser and content producer
Esports – a hyper-growth industry 26% CAGR 2021 1,651 USDm 2017 7% 24% 655 USDm Sponsorships 9% Media rights 14% 16% 46% 13% Advertising 14% 36% 21% Merchandise & tickets Game publisher fees Source: NewZoo – 2018 Global Esports Market Report
From Amateur to Pro across relevant games LEGENDARY The world’s best VIEWING PRO Esports champions AMATEUR Prove your skill PARTICIPATION CASUAL Good luck and have fun All games All levels All platforms Global presence
The evolving esports ecosystem Games Developers & Publishers Players/Teams League Operators/ Distributors Audience Content Producers Brand Partners & Advertisers Product Money Content Participation
Online gaming – a huge global market Global gaming market (USD billion) More players 6% CAGR 129 101 12% More paying 69 Mobile & players 44 Browser Console 3% 36 32 25 Higher spend 24 PC 0% per player 2016 2020E Source: Newzoo; OC&C Analysis
Two proven online gaming investments • • 51% owned 100% owned • • Cross-platform games developer with six successful Proprietary publishing platform with more than 100,000 titles in mid-core strategy segment live games • • InnoGames has combined healthy top-line growth Expanding into 1st party games development with with high & stable margins several bolt-on acquisitions of smaller studios • • 2017 pro forma (as if consolidated from Jan 2017) Provides valuable network access and abilities to screen sales up 25% to SEK 1,547m with ~25% EBITDA the game developer landscape margin • 2017 pro forma (as if consolidated from Jan 2017) sales up 43% to SEK 428m with ~10% EBITDA margin
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 opportunities in new verticals • Look for strategic partnerships to drive further value creation
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