Year-End Report 2018 Stillfront a market leader in online strategy - PowerPoint PPT Presentation

Year-End Report 2018

Stillfront –a market leader in online strategy games Stillfront at a glance Global presence • Market leader in the genre free to play browser and mobile strategy games, with a loyal customer base and long game life cycles Europe 51% • Well-diversified game portfolio with established blockbuster IPs and many small to mid- sized growing and profitable IPs North Am 27% • 4.8 million monthly users, MAUs, and 1.1 million daily users, DAUs Asia 17% • Main markets by revenue are US, Germany, MENA, France and UK Africa 1% • Headquarter in Stockholm with a group of eleven studios operating in Bulgaria, Germany, South Am 2.5% Oceania 1.5% Jordan, Malta, Romania, Sweden and United States with a total of 500 professionals Sales 1) Offices Game Studios Massive track record All time marketing spend 500m €200m with high ROI users to date Empire € >1bn 4.8m MAU is one of the biggest strategy games avg. # of MAUs in lifetime deposits of all time Note: 1) Excluding Playa Games. 2

Reflections on 2018 A transformingyear Strong full year growth Completion of - Adj. EBIT +44% FYoFY Goodgame Studios Acquisition of Playa Games Synergies are materializing Financing package in place Acquisition of Imperia Online Nida Harb 3 success Strong true platform Seasonality effects - softer development gaming activity in Q2 and Q3 3

Key highlights Q4 Financial highlights • Strong finish of 2018 • Proforma net revenue growth of 29% YoY • Strong profitable growth: adjusted EBIT margin of 35% • High profitability and QoQ growth in Empire Operational highlights • Strong momentum in Core products • Acquisition of Playa Games • HTML5 transformation coming to an end • Realizing synergies, 10+ inter-studio projects 4

Portfolio update Q4 Diversifiedportfolio generatinggrowthand profitability Empire brand Big brand Core Products Other 1) 1) 1) 1) 42% 19% 39% <1% In total 22 products Four products: Empire, Four } Three products: Big Farm, Mobile } } Kingdoms, Millennium, World War 3 Harvest and Skytopia Q4 Q4 Q4 } Long tail products Deposits 2) : 136 MSEK (+156% YoY) Deposits 2) : 155 MSEK (-11% YoY) } Deposits 2) : 69 MSEK (+26% YoY) } } UAC: 38 MSEK (+331% YoY) UAC: 15 MSEK (-56% YoY) UAC: 23 MSEK (-69% YoY) } } } In total more than 10 products New product mix due to Imperia } Transformation to HTLM5 finalized } } Transformation to HTML5 coming to } Low potential but still contributing Online and Shakes & Fidget (1 an end } Trampoline launch of Big Farm: month) Adjusted marketing spend Mobile Harvest Q4 2017 – tough } } No investments or live ops Largest products: Nida Harb 3 (42 Lower amount of updates comparison figures } } MSEK), Call of War (17 MSEK) and QoQ growth of 13% } Extended functionality within } } Assets can be reused Imperia Online: (14 MSEK) Very strong EBIT contribution Mobile Harvest – 45% YoY } ARPMPU growth as userbase } Call of War grows sequentially for the 9 th quarter in a row matures } Conflict of Nations grew 168% QoQ Largest single product not more than ~20% of total deposits Note: 1) As of Q4 2018. 5 Note: 2) Deposits are unadjusted revenues. % share of Group deposits in Q4 2018.

Active User Base DAU* Y-o-Y (’000) 1140 +8% 1115 1053 ’Big’ Brand 1021 Core Products 954 330 -4% 400 342 372 350 335 -27% ’Empire’ Brand 461 463 403 345 476 +90% 250 253 259 246 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 MAU** Comments Q4 2018 Y-o-Y (’000) Tough comparison figures Q4 2017: 5053 4893 Massive trampoline launch of Big Farm: Mobile Harvest 4770 • -6% Two other global launches: War & Peace and Nida Harb 3 4237 • 4098 2042 1724 1476 -28% Strong growth in Core products organically and through acquisitions • 1543 1514 1254 -38% DAU – all time high figure • 2186 2016 1354 1725 Strong growth despite low marketing spend • 2040 +105% 1231 996 983 969 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 *) Average unique daily active users over the quarter 6 **) Average unique monthly active users over the quarter ***) Numbers pertain to online games only.

Paying User Base MPU* Y-o-Y (’000) +12% 184 172 167 164 ’Big’ Brand Core Products 153 44 -13% 54 53 50 48 69 -11% Empire Brand 82 76 77 67 71 +95% 38 38 36 36 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 ARPMPU** Comments Q4 2018 (SEK) Y-o-Y Y-o-Y Y-o-Y Y-o-Y MPU figure at all time high, driven by Imperia Online and Shakes & • -1% +31% +45% +14% Fidget (1 month) 873 778 754 ARPMPU increase of 14% mainly driven by Nida Harb 3 success and 749 • 726 728 686 664 653 654 improved monetization in ’Big’ Brand 640 603 593 576 528 490 468 460 QoQ Core products ARPMPU goes down as MPU almost doubles due • 420 363 to new mix: Imperia Online and Shakes & Fidget (1 month) added QoQ growth in Empire both in MPU and ARPMPU after soft Q3 • Core Empire Big Farm Total *) Average unique monthly paying users over the quarter 7 **) Average deposits net VAT per monthly paying user over the quarter ***) Numbers pertain to online games only.

Strong growth in revenue and EBIT margin Net revenue, UAC development Comments Net revenue, MSEK • Q4 29% growth in net revenues YoY 1325 366 UAC, MSEK 1243 329 1180 UAC, % of net revenue 315 315 1113 All-time-high 35% EBIT margin, as a result of: • 1079 284 280 • High growth although normal UAC levels 262 252 • Acquired studios contributing with high margins • Lower share of mobile revenues drives higher margin 51% (57%) 117 • Scalability in our business model 361 95 341 320 85 283 76 236 64 45 41% 38 36 • Good discipline and agility in executing and 29% 29% 29% 27% 25% 20% 21% 24% 22% adjusting marketing and product plans 18% 14% 14% • Around 50% of UAC was spent in the fast growing Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 ‘Core’ product area LTM LTM LTM LTM LTM • 2018 vs 2017 full year: Adj. EBIT development • Revenue growth 23% • EBIT growth 44% Adj. EBIT, MSEK • EBIT margin at 27% for full year 2018 128 Adj. EBIT, % of net revenue 364 • The Group strongly benefits from having a diversified portfolio: 89 82 81 257 253 246 • 75 238 Natural volatility: weaker growth for some 73 70 35% products - balanced by stronger growth for other 31% 29% 28% 28% 27% products 24% • 23% 22% 22% Some strongly cash-generative products fuel 21% 20% 20 organic growth in other products 7% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 LTM LTM LTM LTM LTM 8

Income Statement Q4 2018 Comments MSEK Oct-Dec 2018 Net revenue 366 OWC 22 • Gross margin 75% Other revenues -1 • Major cost items: Total 387 Other operating expenses -162 • Payment providers, platforms fees, royalties. 104 MSEK • UAC 76 MSEK Personnel expenses -65 • Staff 65 MSEK Adjusted EBITDA 160 Capitalized Product Development 53 MSEK • Depreciation, amortization and write-downs -32 Adjusted EBIT 128 Items affecting comparability, IAC -5 MSEK • Items affecting comparability -5 Financial items subject to one-off refinancing -36 MSEK • EBIT 123 EBT excluding one-off 109 MSEK • Financial items -50 EBT 73 One-off tax item -12 MSEK • Taxes for the period -46 Net result excluding one-offs 75 MSEK • Net result for the period 26 9

Balance Sheet 2018-12-31 Comments MSEK 2018-12-31 Intangible non-current assets 2 179 Intangible assets mainly consist of: Tangible non-current assets 14 • Capitalized product development and acquired products 502 MSEK Deferred tax assets 5 Current receivables 153 • Goodwill 1 678 MSEK Cash and cash equivalents 246 Non-current liabilities mainly attributable to: Total assets 2 598 • Expected earn-outs and utilized RCF 280 MSEK Shareholders’ equity Shareholders' equity attributable to parent Deferred tax liability pertains to acquired products 102 MSEK 1 081 company’s shareholders Non-Controlling interest 15 Current liabilities including earn-outs to be settled in 2019 125 MSEK Total Shareholders’ equity 1 096 Deferred tax liabilities 102 Bond 588 Non-current liabilities 430 Current liabilities 382 Total Liabilities and Shareholders’ equity 2 598 10

Cash flow statement 2018 Cash flow from operations Comments • Cash flow from operations for 2018 amounted MSEK 2018 2017 2018 2017 to 210 MSEK (211) Oct-Dec Oct-Dec Jan-Dec Jan-Dec • Negatively impacted by cash flow from changes in working capital 50 75 210 211 Cash flow from operations • Cash flow from operations in Q4 was 50 MSEK -236 -19 -288 -67 Cash flow from investment activities (75) 281 -120 140 -120 Cash flow from financing activities • Cash flow from operations impacted by non- 95 95 -64 64 62 62 23 23 recurring financial cost related to the re- Ca Cash sh flow for the period financing package amounting to 36 MSEK 247 247 176 176 247 247 176 176 • Cash flow from investment activities amounted Cash Ca sh and cash sh equivalents s at the end of the period to -236 (-19) • Due to the acquisitions of Playa Games and Imperia Online and investments in product development 11