Q4-2018

Group CEO Group CFO

2

Leading the way into the

mobile future

3

4

GameTech Effective marketing

Strong company cultureStrategy

Expand in regulated markets and markets

that are soon be regulated and to carry out

strategic and complementary acquisitions

To be the most innovative and creative

company within our core verticals and

also explore new product categories and

features in the gaming industry

5

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

5

10

15

20

25

30

35

40

45

50

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E

EUR

bn

Mobile share of online, (%)

Poker Betting Casino

Online Gaming market

6

Agenda• Full Year 2018

• Quarterly report highlights

• Business update

• Business KPIs

• Financials

• Summary

• Q&A

2019The year of the casino

Growth with solid profitability7

EBITDA:

41.6 MEUR61% growth!

A challenging year- Compliance focus- Strategic long term

projects delivered

Revenue:

327.8 MEUR 51% growth!

Strong position to excel in

2019

516

37

83

141

217

0

50

100

150

200

250

300

350

2012 2013 2014 2015 2016 2017 2018

51%2018 - Growth Y-Y

Quarterlyreport

Highlights and events9

Revenue:

84.5 MEUR +16.7 MEUR

EBITDA:

8.1 MEUR9.6 % margin

Depositing customers

327 156Growth: 29% and ATH

Growth:

+25 %Organic growth: 7%

(Ex. UK: 14%)

Mobile deposits:

72 %10

84.5

0

10

20

30

40

50

60

70

80

90

12

Sport 9% of GGR

LiveCasino 14% of GGR

Casino Classic 77% of GGR

Locally regulated NGR: 33%

Business update

13

14

Number one casino brand*

Improved product and increased marketing

efforts with Dolph Lundgren

Strong Q4 with 18% sequential growth

*Mantab Global brand surveys

Record-high customer activity, with 28% Y-Y

growth of the Swedish depositing customer

base

Short-term revenue impact related to

certain dynamics driven by the regulation

For example higher amount of bonuses in

the first two weeks and modifications in the

gaming experience

Launched Swish – January 2

15

Finland and Denmark had strong quarters

Canada delivered a steady growth

UK market – huge long term potential

Need more time until the UK is completely turned

around – develops in the right direction

UKGC follow up on all operators = will level the

playing field

The UK brands managed brands under Rocket

X umbrella encountered certain technical

issues that impacted the site performance

during parts of the period. These problems

have now largely been solved

Strong performance in all KPI:s

Growth of over 200%

16

Decision has been made to conduct a strategic evaluation of the portfolio companies

The Group’s Pixel.bet brand was granted a licence for online casino and sports betting in Sweden

COO – Richard Woodbridge joined in January,

based in Malta

CCLO – Avshalom Lazar, joins in April

New role implemented – CPTO – Mattias

Wedar recruited for the role. Mattias has solid

experience in product development and great

industry knowledge.

LeoVegas enter 2019 with a strong

management team

17

compared to January last year

28.7 MEUR

16%

Revenues January 2019

an increase of

18

Over time, distribute at least 50% of net profitRevenue EBITDA

organic growth above online gaming market

at least EBITDA margin (assuming

100% regulated markets)

Dividend 2018: 1.20 SEK proposed to the AGM to be

distributed in two equal payments

Business KPI’s

19

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

RocketX RDCs

Royal Panda RDCs

LeoVegas RDCs

20

145 409 181 747

• New ATH in DC’s in Q4 at 327 156 which is up 29% Y-Y and 3% sequentially, reflecting a healthy underlying customer trend within the group

• New depositing customers (NDCs) increased 13% Y-Y and 3% Q-Q

• Returning Depositing Customers (RDCs) increased 46% Y-Y and 2% Q-Q

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

RocketX NDCs

Royal Panda NDCs

LeoVegas NDCs

• Average deposit per depositing customer in Q4’18 increased 6% from Q3’18 but decreased 5% Y-Y

• Average NGR per depositing customer increased 3% Q-Q and decreased 7% Y-Y

• The Y-Y decline in player value reflects the compliance efforts made in our largest markets, and a mix shift in our customer base

21

-%

10%

20%

30%

40%

50%

60%

-

100

200

300

400

500

600

700

800

900

1,000

Deposits per depositing customer

Proportion of RDCs in the depositingcustomer base

-

50

100

150

200

250

300

NGR per depositing customer

22

• Game margin is defined as house winnings divided by the total amount of bets, i.e. what percentage the LeoVegas Group on average wins on a bet

• Hold is defined as NGR divided by deposits

• Game margin and Hold are correlated with each other, and periods with lower margins are often associated with lower Hold

• Game margin in Q4’18 saw a small decline versus Q3 to levels slightly below the historical average, reflecting low margin levels in the Live Casino segment

• Hold in Q4’18 decreased to 30% from 31% in Q3

3.70% 3.66% 3.71% 3.66%3.71% 3.70%

3.89%

3.74% 3.72%

3.20%

3.40%

3.60%

3.80%

4.00%

Casino Classic margin

2.42%2.61%

3.21% 3.11%2.89%

2.77%2.91%

2.54% 2.51%

2.00%2.20%2.40%2.60%2.80%3.00%3.20%3.40%

Live Casino margin

1.56%

6.83% 6.76%

9.54% 9.51%

6.79%7.75% 8.05% 8.22%

-%2.00%4.00%6.00%8.00%

10.00%12.00%

Sports book margin2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00% LeoVegas margin

Royal Panda margin

Rocket X margin

25%

27%

29%

31%

33%

35%

37%

3.40%

3.45%

3.50%

3.55%

3.60%

3.65%

3.70%

3.75%

3.80%

3.85%

3.90%

Ho

ld %

Ga

me

mar

gin

%

Game margin, %

Hold, %

• Deposits for LeoVegas Group reached a new all-time-high, with a 23% increase in Q4’18 versus the prior year and 9% sequentially from Q3

• NGR increased 21% in Q4’18 versus the prior year and 5% sequentially versus Q3

• October was the weakest month in Q4 and December was the strongest month

• The deposit and NGR growth in Q4 is primarily an effect of a solid increase of our depositing customer base, which has more than offset the Y-Y decline in player value

23

276.6 MEUR

-

10

20

30

40

50

60

70

80

90

100

NGR

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

Deposits82.0 MEUR

• Marketing spend increased by 14% from Q3’18 to 32.0 MEUR in Q4’18, which is partly related to increased investments in Sweden ahead of regulation and a higher NDC intake overall

• The Customer Acquisition Cost (CAC) increased 10% Q-Q, but decreased 4% Y-Y

• The sequential uptick in CAC is partly related to a higher share of Casino NDCs compared to the prior quarter

24

32.0

220

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

-

50

100

150

200

250

300

2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 2017-Q4 2018-Q1 2018-Q2 2018-Q3 2018-Q4

Mar

keti

ng

cost

MEU

R

Cu

sto

me

r A

cqu

isit

ion

Co

st (

CA

C)

EUR

Marketing spendMEUR

25

FINANCIALS

• In Q4’18 EBITDA was 8.1 MEUR, with a margin of 9.6%

• Cost of sales as a percentage of revenue increased slightly due to somewhat higher payment costs as well as a one-time reallocation of Royal Panda costs

• Marketing in relation to revenue increased to 37.9%, an increase from Q3, driven by increased investments in Sweden ahead of regulation

• Personnel expenses as a percentage of revenue increased in Q4, reflecting investments in compliance-related staff, a initiated shift from consultants to own tech personnel and LeoVentures

• Other operating expenses also increased, which was partly driven by certain specific non-recurring costs of 0.9 MEUR

26

24.2%

14.0%12.4%

15.1%

10.5% 11.6%

17.2%

11.4%9.6%

36.2%

42.9%41.9%

40.7%43.4% 39.0%

34.9%

35.6% 37.9%

7.6%8.8%

9.7%9.7%

9.4%11.5% 10.6%

12.8% 9.4%

9.5% 11.7% 12.4% 8.5% 9.8% 9.8% 10.1%12.1%

13.6%

22.5% 22.6% 23.7% 26.0% 26.9% 28.0% 27.2% 28.1% 29.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Cost of salesPersonnel costs net of capitalised development costsOperating expenses including other incomeMarketing expensesEBITDA

10.06.2 6.1 8.4 7.1 9.0

15.09.0 8.1

14.918.8 20.8

22.629.5

30.2

30.5

28.0 32.03.1 3.8

4.8

5.4

6.48.9

9.3

10.0

11.6

3.9 5.16.2

4.8

6.6

7.6

8.8

9.5

7.9

9.39.9

11.7

14.4

18.2

21.7

23.8

22.1

24.7

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Cost of salesPersonnel costs net of capitalised development costsOperating expenses including other incomeMarketing expensesEBITDA

8.1

1.4

6.7

4.1

2.60.5

20.2

0.1

22.1

-

5.0

10.0

15.0

20.0

25.0

• Adjusted measures are presented in order to provide a more fundamental picture of the performance of the Group

• Net income was 22.1 MEUR, which includes several items affecting comparability and some significant large non-cash items

• In the adjusted measure the non-cash items relating to amortisations for acquisitions that are removed total 4.1 MEUR in the period

• An additional consideration has been revalued according to IFRS 3, resulting in a 21.0 MEUR (undiscounted) positive non-cash impact in the period

• Adjusted Net Income was 6.1 MEUR in Q4 18

27

16 MEUR in total non-cash items related to acquisitions and a revaluation of the Royal Panda

earn-out that are excluded in adjusted profit measures

Adjusted Net Income 6.1

47.6

2.6

4.7

0.6

4.70.3

3.1- - 0.03 0.01

56.7

Cash beginningof period

EBIT Adjustmentsfor non-cash

items

Change inworking capital

Loan financing Acquisition ofPP&E

Acquisition ofintangible

assets

Acquisition ofsubsidiaries

Dividendpayment

Share issuefrom warrants

program

Currencyeffects

Cash end ofperiod

Cash flow MEURCash flow from operating activities

7.9 MEUR

28

• Cash increased by 9.2 MEUR in the quarter

• Cash flow from operating activities before changes in working capital increased by 7.3 MEUR driven mainly by the underlying EBITDA result

• Changes in working resulted in cash inflow of 0.6m for the period. Working capital fluctuates between periods, but over time tends to support operating cash flow

• Cash at the end of the quarter was 56.7 MEUR

29

Summary

30

Q&A

31

APPENDIX

32

33

• Being data driven is key – proactive actions

• Algorithms to detect unsound player behaviour

• Building the next generations responsible gaming

system based on machine learning

• Sustainable business

• Deposits from mobile devices reached a new ATH level in Q4 18 at 72%

• For the LeoVegas platform mobile devices accounted for 73% of deposits

34

67.0%67.4%

66.6%

69.7%69.0%

69.3%

68.5%

71.2%

72.2%

50%

55%

60%

65%

70%

75%

2016-Q4 2017-Q1 2017-Q2 2017-Q3 2017-Q4 2018-Q1 2018-Q2 2018-Q3 2018-Q4

Mobile share

35

• Casino Classic was 77% of GGR in Q4 18, which is a slight decrease from Q3 at 78%

• Live Casino was 14% of GGR, up from 13% in Q2

• Sportsbook was 9% of GGR in Q4 18,

• The reason the split by product type is shown as GGR (Gross Gaming Revenue) instead of NGR (Net Gaming Revenue) is due to that bonuses in casino cannot be separated between Classic and Live

GGR Casino Classic77%

GGR Live Casino14%

GGR Sports book9%

36

Country Tax structure

0.5% on Sports turnover and 1.5 KEUR per license

15% on GGR

20% on GGR

Country Tax structure

23% VAT on Casino

19% VAT on Casino, 5% on sports

turnover

40% tax on GGR

Country Expectation

18% on GGR Q1’19

29% on GGR expected 2020

*No local license regime is in place

Sports 1% on Turnover

Casino 25% and Sports 22% on GGR

Italy

Ireland

Denmark

UK

Malta Ireland

Germany

Austria

Sweden

The Netherlands

Market size increase

Marketing channels open upDecrease in marketing

clutter

Increase or decrease in competition

Changing competetive position of Svenska

Spel

Supply chain absorbtion of tax

Decrease in bonus costs

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

Po

siti

ve /

Ne

gati

ve Im

pac

t

Probability 37

Marketing clutter

More channels

Competition

Supply chain

Bonus costs

Market size

may decrease as competitors scale back marketing to protect margins

in marketing open up

changes as small companies leave, but large UK operators could enter, incumbents launch casino

absorbs its share of the gaming tax just as in the UK market

will decrease due to legislation and as competitors scale back to protect margins

may increase

Svenska Spel / ATG will change its competitive position

38

-

50.0

100.0

150.0

200.0

250.0

300.0

20

12-Q

1

20

12-Q

2

20

12-Q

3

20

12-Q

4

20

13-Q

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2

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3

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3

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4

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3

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2

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3

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20

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1

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2

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18-Q

3

20

18-Q

4

Deposits

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

20

12-Q

1

20

12-Q

2

20

12-Q

3

20

12-Q

4

20

13-Q

1

20

13-Q

2

20

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3

20

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20

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3

20

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20

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2

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3

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20

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2

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3

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20

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3

20

18-Q

4

NGR

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

20

12-Q

1

20

12-Q

2

20

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3

20

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4

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1

20

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2

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3

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3

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2

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3

20

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2

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3

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4

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2

20

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3

20

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4

20

18-Q

1

20

18-Q

2

20

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3

20

18-Q

4

NDCs

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

20

12-Q

1

20

12-Q

2

20

12-Q

3

20

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4

20

13-Q

1

20

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2

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3

20

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3

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20

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3

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2

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3

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3

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4

RDCs