INVESTOR PRESENTATION JAN-MAR 2022 - EG7
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I N V E S T O R P R E S E N TAT I O N
JAN-MAR 2022
• An emerging gaming group with proven expertise in:
• Games-as-a-service
• Game development – live service and premium products
• Publishing – expertise in physical with growing digital pipeline
• Leader in AAA game marketing and asset development
• Solid foundation of recurring revenue and profit base
• 53% of Net Revenues and 78% of Adjusted EBITDA from Live Games
portfolio in Q1
• 10 titles in the live service portfolio (excludes Innova titles)
• Sustainable and predictable performance
• Long-life cycle products
• Diversified portfolio of assets, providing an attractive risk-reward balance
• Steady and reliable performance from
• Live games
• Service segment with diversified 3rd party clients
• Good upside with manageable risk from our balanced portfolio of
• 1st party new titles
• 3rd party new indie game publishing
• Existing live game upgrades
• Driving growth through M&A and solid organic growth
Financial Highlights from the Quarter
• Strong results above expectations
• Net Revenue of SEK 452.2 (303.6) million
• 49% y-o-y growth
• Solid organic growth of 25%, excluding Innova and Magic Online
• Adjusted EBITDA of SEK 112.6 (80.7) million, representing a 25% margin
• Third consecutive quarter of meeting or beating expectations
• Establishing a successful track record of delivering on our targets
• Outperformance led by Service segment (Fireshine and Petrol) and M&A (Magic Online)
452 113 49% 25 %
SEKm SEKm N et Re ve n u e Gro wt h Orga n ic
(Y - o - Y ) Gro wt h
N et Re ve n u e s Ad j E BIT DA (Y - o - Y )
Q1 2 0 2 2 Q1 2 0 2 2Operational Highlights from the Quarter
• Growing live games portfolio and our foundation of recurring revenues
• Live games portfolio up to 10 with Magic Online acquisition in Jan 2022
• Excluding 12 games on Innova platform
• Increasing new game pipeline with Fireshine’s growing 3rd party indie game
publishing
• Successful release of Core Keeper in Q1
• ~500,000 units sold within the first two weeks and growing
• 90% positive reviews on Steam
• 6 more 3rd party indie digital titles in the pipeline for 2022 and 2023
• Good growth opportunity for Fireshine and the overall group
• Plans in motion to fully eliminate Russia-related risks
• Divesting Innova
• Decisive action to eliminate Russia-related risks
• No material impact to the rest of the group
• Upon Innova divestiture, no more Russia-related risksR U S S I A R I S KS , I M PAC T A N D M I T I G AT I O N P L A N
Business Impact from Russia related Risks
• Innova primarily operates in Russia and the surrounding region
• Facing significant challenges with the on-going conflict
Business Impact on Innova Business Impact on EG7
• Loss of active player base • Impact is almost entirely isolated to Innova
• Currency volatility • Innova contribution to the group limited to:
• 14% of Net Revenue and 18% of Adjusted
• Cancellation of new product releases
EBITDA for LTM 31-03-2022
• Unknown length or severity of business impact
• Immaterial impact on the rest of the group
going forward
• Rest of the group performing according to plan as
demonstrated by strong Q1 results
Impact isolated and not material to the group operations, performance and its futureEquity Capital Markets Impact on EG7
Stock Price and Valuation History Relative Impact Comparison
Ukraine Q4 Earnings Innova Sale Plan 3.5x PF AEBITDA
Invasion Beat Announcement As of 24-05-2022
Outsized impact compared to the
actual business and financial
Note: PF AEBITDA is for LTM 31-03-2022 excluding Innova contributions. impactInnova Divestiture
Transaction Summary Pro Forma P&L
• Sale to Innova’s existing leadership team
MSEK Q1 2022 LTM Q1 2022
• Transaction value of EUR 32 million
Amount % Group Amount % Group
• Fully financed via a vendor loan from the
group Group Total
• Target closing summer 2022 Net Revenue 452.2 1,819.1
Adjusted EBITDA 112.6 428.7
• Subject to approvals, including
shareholders and regulatory
Innova Contribution
Net Revenue 52.6 11.6% 255.2 14.0%
Financial Impact Adjusted EBITDA 6.1 5.4% 78.0 18.2%
• Write down of SEK 1.1 billion of assets
• Non-cash as the initial transaction was Pro Forma, excl. Innova
financed through 100% stock Net Revenue 399.7 88.4% 1,564.0 86.0%
• SEK ~330 million of asset for the vendor Adjusted EBITDA 106.6 94.6% 350.6 81.8%
loan to be booked
• Due to the uncertainties in Russia, this
loan could be subject to potential re-
valuation going forwardPost Transaction Outcome
• Relatively small setback with Innova carve out
• Innova has not been core to our future plans since the management transition last fall
• In Q1, contributed only 11.6% of Net Revenue and 5.4% of Adjusted EBITDA
• No more Russia related risk and “baggage”
• No negative impact to the rest of the group
• Back to focusing on execution and growth without distractionsQ1 2022 FINANCIAL DISCUSSION
Net Revenue and Adjusted EBITDA
MSEK
1 819
QUARTERLY LTM
1 671
573
1 293
452
409
384
964
304
718
429
397
290
118
113
199
109
111
89
81
1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22
Net Revenue Adjusted EBITDA Net Revenue Adjusted EBITDANet Revenue by Segment
MSEK
QUARTERLY NET REVENUE LTM NET REVENUE
759 866
342
159 197 582
168
90 503
470 912 953
216 250 231 256 711
214 462
248
1Q21 2Q21 3Q21 4Q21 1Q22 1Q21 2Q21 3Q21 4Q21 1Q22
Game Service Game Service
QUARTERLY NET REVENUE MIX LTM NET REVENUE MIX
30% 39%
44% 43% 52% 45% 45% 48%
60% 65%
70% 61%
56% 57% 48% 55% 55% 52%
40% 35%
1Q21 2Q21 3Q21 4Q21 1Q22 1Q21 2Q21 3Q21 4Q21 1Q22
Game Service Game ServiceGame Segment – Q1 2022 Net Revenue and Adj EBITDA Mix
MSEK
1Q22 Game Segment Net Revenue Mix
16 ; 6% 1 ; 1%
26 ; 10%
Big Blue
Bubble
Daybreak
Piranha
Toadman +
AMG
212 ; 83%Service Segment – Q1 2022 Net Revenue and Adj EBITDA Mix
MSEK
1Q22 Service Segment Net Revenue Mix
54 ; 27% 53 ; 27%
Innova
Fireshine
Petrol
90 ; 46%2022 Mar. Incl:
Target and guidance 20MSEK MTGO
MSEK
YoY Growth YoY Growth LTM Net Revenue, excluding Innova MSEK 1 549
28% 25%
1 801
QUARTERLY
1 601
1 423
573
1 401
1 201
452
409
384
1 001
304
801
601
401
118
113
109
89
201
81
1
Apr May Jun Jul Aug Sep Okt Nov Dec Jan Feb Mar
1Q21 2Q21 3Q21 4Q21 1Q22
LY LTM CY LTM
Net Revenue Adjusted EBITDA
SEK 1.6-1.7 billion Net Revenue in 2022
Sustained margins
Net Revenue in April amounted to SEK 147 million reflecting normal seasonalityNet Debt to EBITDA ratio and cash
MSEK
1 000 0,8
Q1 cash flow
800 0,6
449 0,4
600 557 Cash OB 484
0,3 Operation +50
0,2
400 Investing - 38
- Financing - 48
200 Currency fluctuations +1
- 0,2
Delta Cash - 35
- - 0,4 Cash CB 449
Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022
- 200 - 0,6
Cash debt Cash at hand Net debt Full Leverage
Cash debt for remaining purchase considerations is included
in liability.
Strong balance sheetLO O K I N G A H EA D
Looking Forward
Short-term Medium-term Long-term
Value Drivers Value Drivers Value Drivers
• Innova divestiture and • Major updates to: • Diversified investments in
Russia risk elimination • Magic Online new GaaS products with
• Lord of the Rings Online
core first party IPs
• New game releases 2022
• DC Universe Online • Investing in 3rd party digital
• Block N Load 2 publishing pipeline
• Evil v Evil • New games
• Power Chord • M&A
• Fireshine’s indie title
pipeline • IGI
Re-prioritized Long-term
• ’83
• Magic Online integration • Minimal Effect
Investment Focus
and service
• Fireshine’s indie titles • Discontinue the large Marvel
• Lord of the Rings Online project investment
• M&A
boost from Amazon show • Diversify investments across
multiple smaller projects to
• M&A reduce investment
concentration riskEG7 Investment Highlights • Attractive value – 3.5x LTM PF Adjusted EBITDA (excl. Innova contribution) • Proven track record of delivering on results – 3rd consecutive quarter of meeting or beating • Unique risk-reward balance especially at current depressed valuation • Strong growth, profitability and solid balance sheet • Portfolio of world class IPs • Foundation of recurring revenue and profits – 53% of Net Revenue and 78% of Adjusted EBITDA from the Live Game portfolio • Diversified pipeline of new games (1st and 3rd party) and big content updates • No more Russia risks and noise
Q&A
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