Q2 INVESTOR PRESENTATION - AUGUST 2021 - EG7
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Q2 INVESTOR PRESENTATION – AUGUST 2021
TABL E O F CONTENTS 1. Q2 HIGHLIGHTS 2. COMPANY OVERVIEW 3. HISTORICAL RECAP 4. EG7 TODAY 5. FUTURE GROWTH INITIATIVES
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 2021EG7 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-RecurringHIS 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 EBITDAREV 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 REVENUESTHE 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 83PROPRIETARY 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 GAMESWORLD-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 DEVELOPERAL 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, 2021FUTURE GROWTH INITIATIVES
M&A PIPELINE
GAME EXPANSIONS
AND NEW TITLES
GEOGRAPHICAL
PLATFORM
EXPANSION
OWN IP INTO
PLATFORMCURRENT AND FUTURE TITLES
TO BE INCLUDED IN 4GAME PLATFORM
LIVE-SERVICES UPCOMING
GAMES TITLESGEO 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
incentivesK 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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