Q2 INVESTOR PRESENTATION - AUGUST 2021 - EG7

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Q2 INVESTOR PRESENTATION - AUGUST 2021 - EG7
Q2 INVESTOR PRESENTATION – AUGUST 2021
Q2 INVESTOR PRESENTATION - AUGUST 2021 - EG7
TABL E   O F   CONTENTS

1. Q2 HIGHLIGHTS

2. COMPANY OVERVIEW

3. HISTORICAL RECAP

4. EG7 TODAY

5. FUTURE GROWTH INITIATIVES
Q2 INVESTOR PRESENTATION - AUGUST 2021 - EG7
Q2    2021      RECAP

• Highest revenue and profit in the history of the company.

• Total revenue of SEK 422.5 million, a growth of 160% compared to Q2 2020.

• EBITDA of SEK 96.8 million, a growth of 360% compared to Q2 2020.

• Adjusted EBITDA of SEK 111.8 million, considering a SEK 5 million cost of M&A in the
  quarter and SEK 10 million of one-time retention bonuses.

• Piranha Games and Innova, acquisitions closed in Q1 2021 now fully integrated.

• Successfully relaunched MechWarrior 5.

 422.5                   96.8                    23%                   160%
    SEKm                   SEKm                EBITDA MARGIN          T O T A L R E V E NUE
T O T A L R E V E NUE      EBITDA                  Q2 2021                 GROWTH
      Q2 2021              Q2 2021
EG7       IN      S HO RT

EG7 is a unique eco-system within the video games industry consisting of:
                                                                                                         769
                                                                                                          SEKm
1. An IP-portfolio consisting of world-class live and premium titles:
                                                                                                          REVENUE
      o EG7 holds a diversified portfolio of live services such as EverQuest, Lord of the Rings,           H1 2021
          PlanetSide, DC Universe, Dungeons and Dragons and My Singing Monsters.
      o This Games-as-a-Service (“GaaS”) portfolio accounts for the majority of the revenues and
          profits with predictable recurring monthly revenues.
      o Majority of capex is “bolt-on” as opposed to “premium product” over 3-5 years.
      o In excess of 80% of the revenue originates from live titles as opposed to new releases.
2. Proprietary game distribution platform:
      o Traditional game distribution platform margin loss: 15-30%
      o EG7 proprietary platform margin loss: Less than 5%
                                                                                                          184
      o Own platform results in ownership of user information and controlling all consumer
           messaging and marketing.
                                                                                                          SEKm
                                                                                                           EBITDA
      o Own current and future EG7 titles to be included in proprietary platform allowing for cost
                                                                                                           H1 2021
           synergies and margin expansion.
      o In excess of 90% of the revenue originates from live titles on the platform as opposed to new
           releases.

                                                                                                         27%
3. World class service platform:
     o Marketing, publishing and distribution for both internal and external projects.
     o Petrol, the number one gaming marketing agency which is leveraged by combining ownership
          of consumer messaging with ownership of user data.                                            EBITDA MARGIN
     o The services side of the eco-system is a powerful tool in assisting EG7’s game developing
          companies and a key aspect in procuring M&A.
     o In excess of 70% of the revenue originates from repeat clients as opposed to new clients.

                                                                                                         845
                               80%                                          20%                          EMPLOYEES
                          Recurring Revenue                             Non-Recurring
HIS TO RY         &       FINANCIAL S
                                                                                                                                                         Acquired gaming
                                                                                                                                      +302%                IP and game
                                                                                                                                                             platform
Revenue per Year
                                                                                                                                             SEK 2,061.0    companies

                                                                                                                                            (Pro-forma Revenue)

Revenue Growth
   per Year
                                                                                                     Acquired service
                                                                                                        platform

                                                                                           +573%
                                                           Company went
                               Contract worth                 public
                                                                                                           SEK 512.4m
           Consulting in
                               SEK 40m with                                                              (Pro-forma Revenue)
           Development
                                  Leyou

                   +52%                  -3%                  +586%

   SEK 7.5m                SEK 11.4m             SEK 11.1m                 SEK 76.1m

   2015-08                 2016-08               2017-08                   2018-121                          2019-12                            2020-12

                                                                                1)    Changed to calendar year. 2018 figures referring to 2017/09/01-2018/12/31, i.e. 16 months.
HIS TO RICAL                     QU ARTERL Y          GRO WTH¹

                            QUARTERLY REVENUE (SEKm)                                                            QUARTERLY EBITDA (SEKm)

                                         423

                 347

                                                                           210

           164                     163

                                                         121
                                                                                                                            97
                                                                                                      87
                                                    73
                                                                      60

14   17                12     18               15                12                                                    19                   23
                                                                                        5        12         5     5                   13
                                                                                            2

          Q1                   Q2                     Q3               Q4                   Q1                    Q2             -1    Q3             -3         -5
                                                                                                                                                           -17
                                                                                                                                                           Q4

                       2018          2019           2020       2021                                        2018         2019          2020          2021

                                                                                                                                           1) Reported total revenue and EBITDA
REV EN U E   BY   S EG MEN T

      DEVELOPMENT OF SEGMENT TOTAL REVENUES (SEKm)                       DEVELOPMENT OF SEGMENT EBITDA (SEKm)

                                          422.5              120
450
                                                                                                          96.8
400                                                          100
             346.5                                                          84.7
350
                                          168.2                    2.3
                                                              80                                          29.4
300          87.9
250
                                                              60
200

150                                                           40            84.7
             258.6                        254.2                                                           67.4
100
                                                              20
 50

 0                                                            0
            Q1 2021                      Q2 2021                           Q1 2021                       Q2 2021

                      Games   Services                                               Games   Services

       STRONG QUARTER ON QUARTER GROWTH – STABLE GAME REVENUES
THE          CO MPANY           TO D AY

                                   WE CONTROL THE ENTIRE VALUE CHAIN

             DEVELOPING                                    MARKETING                            PUBLISHING                              DISTRIBUTION/
                                                                                                                                          PLATFORM

• Daybreak, owner of 7 IP's that are live and account
  for 50% of the revenue, mainly PC and Console.
  Distributed mainly through our own platform.

• Big Blue Bubble, owner of My Singing Monsters,
                                                                                                                                    • Innova, via own platform 4Game. Has 12
  mainly mobile. Distributed mainly via Appstore and
                                                         Petrol, one of the most prominent                                            live games today.
  Google Play.                                                                               Sold Out, first and third party game
                                                        video game marketing agencies in
                                                                                                  publisher and distributor
                                                                  the western world                                                 • Daybreak, via own platforms. Has 7 live
• Piranha, holds the MechWarrior license, mainly PC
                                                                                                                                      games today.
  and Console, Distributed mainly via Epic Store,
  Steam and Xbox Live.

• Toadman Studios, developer of new IP and content,
  mainly PC and Console.
O U R   GAMES

RELEASED 1999   RELEASED 2012          RELEASED 2015   RELEASED 2012

RELEASED 2007   RELEASED 2011          RELEASED 2006   RELEASED 2004
WEL L        D IV ERS IFIED         L IV E         S ERV ICE    PO RTFO L IO
                                                                                         MY SINGING
                      EVERQUEST            PLANETSIDE 2              H1Z1
                                                                                         MONSTERS

RELEASE DATE   1999                   2012                  2015                  2012                LIVE-SERVICE GAMES % OF
                                                                                                      TOTAL GROUP PRO FORMA
                                                                                                            2 0 2 0 R E V E N UE
DESCRIPTION    Fantasy MMORPG         Sci-Fi MMOFPS         Battle Royale MMO     Casual Simulation

 PLATFORM      PC                     PC, Console           PC, Console           Mobile, PC

IP OWNERSHIP   Original IP            Original IP           Original IP           Original IP
                                                                                                              50%
 METACRITIC    85                     84                    70                    91

                LORD OF THE RINGS                              DUNGEONS AND
                                      DC UNIVERSE ONLINE                               EVERQUEST 2
                     ONLINE                                   DRAGONS ONLINE

RELEASE DATE   2007                   2011                  2006                  2004                   OTHER GAMES % OF
                                                                                                      TOTAL GROUP PRO FORMA
                                                                                                           2 0 2 0 R E V E N UE
DESCRIPTION    Fantasy MMORPG         Superhero MMORPG      Fantasy MMORPG        Fantasy MMORPG

 PLATFORM      PC                     PC, Console           PC                    PC

IP OWNERSHIP   Licensed IP            Licensed IP           Licensed IP           Original IP
                                                                                                               12%

 METACRITIC    88                     75                    74                    83
PROPRIETARY GAME DISTRIBUTION PLATFORM

•   4Game is EG7’s proprietary game distribution
    platform with 12 licensed games and counting.

•   Strong own technology/platform similar to Steam.
                                                           16%
•   Holds game licenses in EU and CIS.                     4GAME % OF
                                                         TOTAL GROUP PRO
                                                           FORMA 2020
•   Revenue is only generated from live-service
                                                             R E V E N UE
    games on the platform, similar to the portfolio of
    live-service games EG7 owns.

              SELECTION OF GAMES
WORLD-CLASS SERVICES

                                                                22%
•   Creative marketing            •   First and third-party
    studio with 40+ ongoing           publisher that has
    marketing projects.               never had an
                                                               SERVICES % OF
    Previous projects - Call          unprofitable release.   TOTAL GROUP PRO
    of Duty Warzone, Far                                        FORMA 2020
    Cry 6 and Assassin’s          •   Frontier, Team17 and        REVENUE
    Creed Valhalla.                   Rebellion among
                                      other are repeat
•   Activision, Embracer,             clients of Sold Out.
    Ubisoft among other are
    repeat clients of Petrol.
O U R   O FFICES

           BIG BLUE BUBBLE
                                    ARTPLANT NORWAY
            DEVELOPER &
             PUBLISHER              GAME DEVELOPER
                                                                   TOADMAN HQ
                                                                                                   INNOVA
                                                                  GAME DEVELOPER
PIRANHA GAMES                                                                                     PUBLISHER
  DEVELOPER

 BIG BLUE BUBBLE
   DEVELOPER &                 ANTIMATTER GAMES                     INNOVA HQ               ARTPLANT RUSSIA
    PUBLISHER                   GAME DEVELOPER                       PUBLISHER              GAME DEVELOPER

     PETROL                   DAYBREAK
    MARKETING                                         SOLDOUT
                             DEVELOPER &
                              PUBLISHER             PUBLISHER &                  TOADMAN BERLIN
                                                    DISTRIBUTOR
                                                                                 GAME DEVELOPER
AL IGNED           INCENTIV ES          BETWEEN         MANAGEMENT            AND      INV ES TO RS

          DAN STEN OLSSON                                          GEORGY CHUMBURIDZE
                                        Shares: 6,912,000                                             Shares: 9,726,053
BOARD REPRESENTATION VIA ERIK NIELSEN                                FOUNDER INNOVA

           JASON EPSTEIN                                             ALEXANDER ALBEDJ
                                        Shares: 6,910,000                                              Shares: 1,277,706
              BOARD                                                      CHAIRMAN

            ROBIN FLODIN                                                JAMES CATO
                                        Shares: 2,905,255                                              Shares: 1,507,162
              CEO EG7                                              CO-FOUNDER SOLD OUT

         RASMUS DAVIDSSON                                             GARRY WILLIAMS
                                        Shares: 2,872,743                                              Shares: 1,507,162
          CO-FOUNDER EG7                                           CO-FOUNDER SOLD OUT

            ALAN HUNTER                                               RUSS BULLOCK
                                        Shares: 1,835,876                                              Shares: 404,040
         CO-FOUNDER PETROL                                             CEO PIRANHA

           BEN GRANADOS                                                   JI HAM
                                        Shares: 1,769,317                                              Shares: 926,376
         CO-FOUNDER PETROL                                            CEO DAYBREAK

           DAMIR SLOGAR                                                 OLA NILSSON
                                        Shares: 1,298,256                                              Shares: 770,000
  FOUNDER AND CEO BIG BLUE BUBBLE                                 HEAD OF STUDIO TOADMAN

                                                              TOTAL BOARD AND MANAGEMENT
                                                                      OWNERSHIP:
                                                                                                            49%

                                                                                              1)   Holdings as of June 30, 2021
FUTURE GROWTH INITIATIVES

                                                M&A PIPELINE

                             GAME EXPANSIONS
                               AND NEW TITLES

              GEOGRAPHICAL
                  PLATFORM
                 EXPANSION
OWN IP INTO
 PLATFORM
CURRENT AND FUTURE TITLES
TO BE INCLUDED IN 4GAME PLATFORM

  LIVE-SERVICES         UPCOMING
      GAMES               TITLES
GEO GRAPHICAL   PL ATFO RM   EXPANS IO N

STRONG IN EUROPE AND CIS – POTENTIAL FOR GEOGRAPHIC EXPANSION
GAME   EXPANS IO NS   AND          NEW     TITL ES

GAME EXPANSIONS                   NEW TITLES                                 FUTURE POTENTIAL

                                               Unannounced
                                                AAA-MMO

                                                               • Bolt-on investments into existing portfolio
                                                                 is a beneficial method of achieving a more
                                                                 immediate pay-off than the typical
                                                                 premium product investment.

                                                               • Investments in new IP can create
                                                                 significant value if the title is successful,
                                                                 both in terms of positive cash-flow and the
                                                                 value of the IP/brand.
M& A     S TRATEGY

We employ a selective M&A strategy due to our semi-active approach. We want to successfully integrate the companies into
                                   the group and thereby creative synergetic value.

                                                                  Add-on
                                                                acquisition X

 Acquisition targets become
  significant shareholders¹
                                                                               8.0x EV/EBITDA multiple
                                                                           9.7x EV/EBITDA multiple
                                                                    3.7x EV/EBITDA multiple
                                                              4.6x EV/EBITDA multiple
                                                         4.6x EV/EBIT multiple
                                                     4.9x EV/EBIT multiple
                                             0.3x EV/EBIT multiple
                                      0.5x EV/EBIT multiple                                          1) Entrepreneurs are usually paid in a
                                                                                                     mix of cash and shares in order to
                                                                                                     minimize negative cash flow and align
                                                                                                     incentives
K EY   INV ES TMENT      HIGHL IG HTS

                  1.   Unique world-class gaming eco-system.

                  2.   EG7 holds some of the strongest game IP’s in the world.

                  3. Proven shareholder value through acquisitions.

                  4. Diversified risk through stable cash-flow, low-risk, profitable
STRONG               services division and experienced game development
                     division.
REASONS
TO INVEST         5.   High potential through a games division with a massive
                       pipeline of strong titles.

                  6. Incentivized management and board that controls 49% of
                     the shares.

                  7.   Experienced team.
THANK   YOU
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