Q4 2016

GUSTAF HAGMAN

VIKTOR FRITZÉN

Group CEO and Co-founder

Group CFO

2

Presenters

The greatest gaming experience

Number one in mobile gaming

3

Vision

4

Agenda

•  Annual and Quarterly highlights •  Business update •  Business KPIs •  Financials •  Targets & Summary •  Q&A

Full year 2016

Highlights

5

Organic growth:

+58.4MEUR

Adjusted EBITDA:

15.1 %

Organic growth:

+70 %

6

Full year 2016

Adjusted EBITDA:

21.3 MEUR

Revenue:

141.4 MEUR

7

Drivers behind record strong 2016

Mobile focus “Product innovation”

Technology leadership “Two new product categories”

Effective marketing “Data driven and ROI approach in all marketing initiatives”

Execution “Outstanding team and ability to deliver”

Quarterly report

Highlights and events

8

Revenue since start

41.2

MEUR

-

 5.0

 10.0

 15.0

 20.0

 25.0

 30.0

 35.0

 40.0

2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4

Revenue:

41.2 MEUR +15.1 MEUR

EBITDA:

10.0 MEUR 24.2 % margin

Deposits:

139.1 MEUR +87 %

Organic growth:

+58 %

Mobile deposits:

67 %

10

Q4 2016 Highlights

LeoVegas again number 1 in Online Gambling Quarterly

•  In the latest edition of Online Gambling Quarterly, an industry publication that focuses on strategy and financials, LeoVegas was for the second quarter in a row the company expected to be the number 1 winner in the next twelve months based on a survey of 47 individuals that are executives in the gaming industry and finance professionals that invest in the gaming space

•  In the same survey Mobile Betting, Mobile Casino and Live Betting were expected to be the fastest growing segments in our industry, which are the main focus areas of LeoVegas

COMMENTS

12

compared to January last year

Current Trading – Start of Q1

14.1 MEUR

40 %

NGR in January

an increased of

Business update

13

14

Denmark   Local and experienced team

  Promising start

UK

  Initiatives in Q3-4 start to pay-off

  Local ambassador - Johnny Vegas

  Sponsorship – Leicester Tigers

Expansion overview

15

Czechia   New regulation in place since 1 Jan 2017

  Applied for license

  During the transition period LeoVegas.com is closed for Czech customers

  Will negative affect revenues in Q1 (was 4% of revenues in Q4)

Ireland

  Sportsbook license granted Q1

Australia

  We are closely monitoring the legal landscape in Australia and how the proposed amendment to the law might affect the market

Legal update

Awards

International Gaming Awards 2017

  Online Casino Operator of the Year

EGR Nordic Awards 2017

  Casino Operator of the Year

SBC Awards 2016

  Marketing Campaign of the Year (LeoVegas Sport)

Effective Mobile Marketing Awards

  Most Effective Search Campaign

17

  In-game deposit with Evolution & NetEnt

  Broadest product offering in the industry

  New provider - Lucky Streak

LeoVegas Sport and LeoVegas Live Casino

  Launch of sports client start page built in-house

  Strong underlying development

18

  Independent company within the LeoVegas Group

  Authentic Gaming delivers an innovative live casino solution with streaming from land-based casinos

IMP / Authentic Gaming

  LeoVegas invested one year ago now live on several operators during Q1

  Focus to integrate their live casino on more operators

19

  LeoVegas’ offering is based on gaming as a fun and attractive form of entertainment

  Responsible gaming is a fundamental principle in all we do

A Continuous Focus on Responsible Gaming

  Responsible gaming training and certification for all

employees

  Sophisticated player tools and measures for limiting

deposits, time, wagering, losses etc.

  Information and tests for both

players and relatives

  Self exclusion measures and

forced exclusion by us when

gaming related problems

discovered

Business KPI’s

20

Q3’16 back-drop Q4’16 results

Q4’16 drivers

14.3 MEUR in highly efficient marketing

NDCs of 74 638 in Q3’16

RDCs 11% Q-Q growth

Deposits 12% Q-Q growth

Revenue 4% Q-Q growth

Lower game margin

-

20 000

40 000

60 000

80 000

100 000

120 000 New depositing customers (NDCs)

Returning depositing customers (RDCs)

•  Overall the customer base developed according to historical trends in Q4’16

•  New depositing customers (NDCs) increased 14% sequentially, which is according to trend, to 85 384

•  The NDCs mix in Q4’16 is similar to Q3’16

•  Returning depositing customers (RDCs) grew sequentially according to trend with 11% to 90 922

•  The number of active

customers, which includes customers making bets only with bonus money, increased 19% sequentially

Depositing customers, new and returning Active customers and depositing customers COMMENTS

22

Customer base

90 922

85 384 404 773

-

100 000

200 000

300 000

400 000

500 000

600 000 Actives customers Returning depositing customers (RDCs) New depositing customers (NDCs)

•  Average deposit per depositing customer in Q4’16 was flat compared to Q3’16

•  Average NGR per depositing customer, however, decreased by 9% driven by lower margin in casino and sports in Q4’16

•  Both average spend metrics in H2’16 are closer to a normal level compared to H1’16 when average spend was unusually low driven by the high proportion of NDCs, which on average spend less, in combination with higher bonus costs that arose from the NDCs, as new customers get more bonuses, and higher bonus costs in combination with the the launch of LeoVegas Sports

23

Average spend per customer

COMMENTS Deposits EUR per depositing customer NGR EUR per depositing customer

-

 100

 200

 300

 400

 500

 600

 700

 800

 900

Deposits per depositing customer

-

 50

 100

 150

 200

 250

 300

NGR per depositing customer

•  Marketing spend increased by 13% from Q4’15 to 14.9 MEUR in Q4’16

•  During the same period NDCs increased by 83%

•  The Customer Acquisition Cost (CAC), illustrated in the chart as marketing in relation to NDCs, in Q4’16 decreased 38% compared to Q4’15 and is at a historically low level

•  The quality of the NDCs in Q4’16 was about the same as in Q4’15 and Q3’16, which indicates that the marketing ROI increased substantially in Q4’16 compared to Q3’15 but also compared to Q3’16

•  The overall marketing mix was broadly similar in both periods

24

Marketing and customer acquisition cost

COMMENTS Marketing spend and NDCs indexed to Q4’15 in relation to marketing per NDCs

+13%

+83%

85 384

14.9 MEUR

2015-Q4 2016-Q4

Marketing Indexed to Q4'15

NDCs Indexed to Q4'15

Marketing / NDC (CAC)

-38%

•  Q4’16 had the highest year-on-year increase in deposits at 87%

•  On a sequential basis deposits increased 12%, which is the same rate as Q4’15

•  Growth rates per regions: •  Nordics 65% •  UK 45% •  Rest of Europe 335% •  Rest of World 235%

•  Deposits increased by 64.9 MEUR from Q4’15 to Q4’16 of which the regions accounted for:

•  Nordics 32.8 MEUR •  UK 6.6 MEUR •  Rest of Europe 15.8 MEUR •  Rest of World 9.8 MEUR

25

Deposits

COMMENTS Deposits MEUR and Q-Q growth in deposits % Deposits MEUR by region

-

 10.0

 20.0

 30.0

 40.0

 50.0

 60.0

 70.0

 80.0

 90.0

Nordics

UK

Rest of Europe

Rest of World

0%

5%

10%

15%

20%

25%

30%

-

 20.0

 40.0

 60.0

 80.0

 100.0

 120.0

 140.0

 160.0 Deposits

Growth in deposits Q-Q %

26

•  The Nordics remained at decreased to 60% in Q4’16 of total deposits from 62% in Q3’16

•  Rest of Europe increased its share of total deposits by 2 percentage points to 15% while UK and Rest of World remained stable at 10%

•  NGR shares shifted from Q3’16 to Q4’16 mainly for Rest of Europe that increased to 17% and UK that decreased to 10%

•  The decrease in the UK was on the back of low margin in Sports and to a less extent Casino

•  Rest of World increased its proportion of NGR slightly and remained at an unusually high NGR to deposits ratio

•  The deposit mix, however, is a better gauge of the development of the regions on a more fundamental level

Regional split

COMMENTS

Nordics 60% United

Kingdom 15%

Rest of Europe

15%

Rest of World 10%

Deposits 2016-Q4

Nordics 62%

United Kingdom

15%

Rest of Europe

13%

Rest of World 10%

Deposits 2016-Q3

Nordics 57%

United Kingdom

10%

Rest of Europe

17%

Rest of World 16%

NGR 2016-Q4

Nordics 58%

United Kingdom

13%

Rest of Europe

14%

Rest of World

15%

NGR 2016-Q3

27

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

•  Hold is defined as NGR divided by deposits

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

•  Q4’16 had the lowest Game margin and Hold to date, driven by low margins in Live Casino, Sports and Casino Classic

•  The low Game margin was in part responsible for the low Hold, which translates into revenue

•  The low Game margin was in part due to many medium to large size wins in the quarter

Game margin and Hold

COMMENTS

25.0%

27.0%

29.0%

31.0%

33.0%

35.0%

37.0%

3.40%

3.45%

3.50%

3.55%

3.60%

3.65%

3.70%

3.75%

3.80%

3.85%

3.90%

2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4

Ho

ld

Gam

e m

arg

in

Game margin %

Hold %

Game margin % and Hold in %

•  Deposits from mobile devices continued to grow its share of total deposits in the second quarter of 2016

•  Mobile devices accounted for 67% of deposits in the quarter

•  Deposits from mobile devices grew 112% year on year, while the same for desktop grew 52%

28

Mobile share of deposits

COMMENTS

50%

52%

54%

56%

58%

60%

62%

64%

66%

68%

2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4

Mobile deposits as a % of total

Deposits through mobile devices as a % of total deposits

29

FINANCIALS

•  In Q4’16 EBITDA was 10.0 MEUR, a 24.2% margin

•  Overall the P&L in Q4’16 is very similar to Q3’16

•  Marketing in H2’16 has been lower than in H1’16 in lieu of a launch campaign for Sports in combination with a lot of focus on optimization and a retake in the UK market

•  Cost of sales increased slightly compared to Q3’16 on the back of higher gaming taxes

•  Personnel and operating expenses remained fairly stable throughout H2’16

•  Marketing in Q1’17 expected to be significantly higher than Q4’16

30

P&L per quarter adjusted

COMMENTS P&L MEUR adjusted* P&L ratios adjusted*

*Adjusted for IPO-related expenses in Q4’15 and Q1’16

 0.2 - 0.5  1.1  1.7  4.0

- 2.5

 9.8  10.0  9.1  10.8  11.9

 13.3  12.5

 18.7

 14.3  14.9

 1.4  1.8

 2.7

 3.1  2.9

 3.6

 2.8  3.1

 1.4

 1.8

 2.2

 2.4  3.3

 3.7

 4.1  3.9

 3.8

 4.5

 4.7

 5.6

 6.9

 7.4

 8.6  9.3

- 5.0

-

 5.0

 10.0

 15.0

 20.0

 25.0

 30.0

 35.0

 40.0

 45.0

Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Cost of sales Personnel costs net of capitalised development costs Operating expenses including other income Marketing expenses EBITDA

1.0% -2.6% 4.9% 6.7%

13.5%

-7.9%

24.7% 24.2%

57.4% 58.6% 52.6% 50.9%

42.3%

60.4%

36.1% 36.2%

8.8% 9.9%

12.0% 11.8% 9.9%

11.7%

7.1% 7.6%

8.8% 9.6% 9.7% 9.1%

11.0% 11.9%

10.4% 9.5%

24.0% 24.5%

20.7% 21.6% 23.2%

23.9%

21.7% 22.5%

-20%

0%

20%

40%

60%

80%

100%

Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Cost of sales Personnel costs net of capitalised development costs Operating expenses including other income Marketing expenses EBITDA

•  The marketing to revenue ratio is the key determinant of the profit margin development at LeoVegas

•  The marketing to revenue ratio in Q3’16 and Q4’16 of 36% is the lowest level in any quarter to date, which is down from the highest level to date of 60% in Q2’16

•  LeoVegas’ margins have been, and can likely continue to be, volatile between quarters, but will average out at levels that are consistent with LeoVegas’ 2018 financial targets

•  Q1’17 marketing spend will be larger than Q4’16 both in value-terms and as a percentage of revenue

31

Marketing spend and margin

COMMENTS Marketing to revenue % (negative scale) and Adjusted* EBIT margin %, quarterly

*Adjusted for IPO-related expenses in Q4’15 and Q1’16

23.1% EBIT margin

14.1% EBIT margin

Marketing to revenue % (negative scale) and Adjusted* EBIT margin %, annually

-65.0%

-60.0%

-55.0%

-50.0%

-45.0%

-40.0%

-35.0%

-30.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Mar

keti

ng e

xpen

se, %

of

reve

nues

, neg

ativ

e sc

ale

Ad

just

ed E

BIT

mar

gin

%

Adjusted EBIT margin %

Marketing expenses % of revenues

-58.0%

-56.0%

-54.0%

-52.0%

-50.0%

-48.0%

-46.0%

-44.0%

-42.0%

-40.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

2014 2015 2016

Mar

keti

ng e

xpen

se, %

of

reve

nues

, neg

ativ

e sc

ale

Ad

just

ed E

BIT

mar

gin

%

Adjusted EBIT margin %

Marketing expenses % of revenues

32

•  The main item on the asset side is cash, which increased its proportion of the balance sheet in Q4’16 on the back of high cash flow generation

•  Current assets are dominated by receivables at payment service providers

•  Intangible assets consist of capitalized development costs

•  On the equity and liabilities side equity is the largest item

•  Working capital saw a significant move in Q4’16 compared to Q3’16, which was expected and has been observed each year end previously

Balance sheet

Balance sheet total 77.9 MEUR

COMMENTS Assets MEUR 31 December 2016 Equity and liabilities MEUR 31 December 2016

Cash and cash

equivalents,  60.2

Current assets,  9.1

Property, plant and

equipment,  1.2

Intangible assets,  

5.9

Equity,  50.8

Payables and

accruals,  20.4

Other current

liabilities,  5.1

Other liabilities,  

0.9

 48.1

 10.0

 -0.2  3.1

 -0.3  -0.7  0.2

 60.2

-

 10.0

 20.0

 30.0

 40.0

 50.0

 60.0

 70.0

Cash and cash equivalents at beginning of

period

EBITDA Adjustments for non-cash items

Change in working capital

Investments in tangible assets

Investments in intangible assets

Effects from exchage rate movements

Cash and cash equivalents at end of period

Cash flow from operating activities 12.9 MEUR

Cash flow from investing activities -1.0 MEUR

33

Cash flow

•  Cash increased by 11.9 MEUR in the quarter

•  Cash flow from operating activities increased predominantly from the EBITDA result and was boosted by movements in working capital

•  Investing cash flow mainly consisted of capitalized development costs and servers

COMMENTS Cash flow MEUR Q4 2016

Total increase in cash 11.9 MEUR

34

Targets & Summary

  LeoVegas targets to reach EUR 300 million in revenue by 2018   Long-term organic growth above online gaming market

  LeoVegas targets to reach an EBITDA margin of approximately 15% in 2018   Long-term at least 15% EBITDA margin assuming 100% regulated markets

  LeoVegas dividend policy is to distribute a minimum of 50% of net profit over time

35

Financial targets

36

Financial targets 2018

16 37

83

141

300

2013 2014 2015 2016 2017 2018

?

?

Revenue MEUR EBITDA margin %

Revenue on track towards 2018 target EBITDA margin 2016 already at 2018 target

-2%

6%

2%

15% 15%

2013 2014 2015 2016 2017 2018

Organic growth of 58% and EBITDA of 10.0 MEUR a 24% margin

  LeoVegas considered most likely to succeed among industry executives January NGR 14.1 MEUR 40% growth

37

Summary Q4 2016

Q&A

38

APPENDIX

39

40

Regulated and soon to be regulated markets for LeoVegas

Markets where LeoVegas has a gaming license

Country Tax structure

0.5% on Sports turnover and 1.5

KEUR per license

15% on GGR

20% on GGR

Markets LeoVegas pays gaming taxes or VAT but without license*

Country Tax structure

23% VAT

19% VAT

40% on GGR

Soon to be regulated markets where LeoVegas has presence

Country Expectation

Expected Q3’18

Expected 2018

Applied for license

*No local license regime is in place

Sports XX% on GGR

Gaming taxes

Less competition

Local monopoly

Decreased bonus costs

Decreased marketing clutter

Market increases in size

More marketing channels

Tax pushed onto supply chain

0 10 20 30 40 50 60 70 80 90 100

Po

siti

ve /

Neg

ativ

e eff

ect

Probability

41

Local gaming regulations have pros and cons

Positive effects when market regulates

Negative effects when markets regulate

Marketing clutter

Positive and negative effects assessed against probability of occurring

More channels

Less competition

Supply chain

Bonus costs

Market size

may decrease as competitors scale back marketing to protect margins

in marketing open up

as smaller competitors may leave

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

may decrease as competitors scale back to protect margins

may increase

Gaming taxes will decrease profitability

Local monopoly may enter into casino market (e.g. Danske Spil)

42

20

1

3

1

1

3

1

10

10

0

2

4

6

8

10

12

14

16

18

20

Gaming tax Increased market size

Marketing clutter

decrease

More marketing channels

Changes in competition

Supply chain

absorb share of tax

Bonus costs Offsetting factors total

Impact on EBITDA

Per

cent

age

po

int

imp

act

on

EB

ITD

A m

arg

in

EBITDA impact in country where 20% tax is implemented

Example of potential EBITDA impact in market with 20% tax on revenue

•  This is a hypothetical example of the EBITDA impact when a country regulates its gaming market based on analysis of other markets that have regulated

•  An increased market size has the potential to have a very large impact on the absolute EBITDA level even though margins will be lower and has therefor been shaded in this example

•  We expect that roughly half of the tax will naturally be offset and half will impact profitability – assuming that marketing investments are not scaled back

•  If marketing investments were scaled back this would further mitigate the impact of the tax on margin, but would then decrease the growth potential

COMMENTS

 35.0

 36.0

 37.0

 38.0

 39.0

 40.0

 41.0

 42.0

Revenue in constant currency

Currency movement Reported Revenue

41.3 41.2

43

•  Revenue in constant currency would have been 41.3 MEUR

•  Negative currency effect from strengthening euro was 142 KEUR

Constant Currency Revenue

COMMENTS MEUR

-0.1

€0

€20

€40

€60

€80

€100

€120

€140

€160

Deposited amount per quarter €M

0 €

5 €

10 €

15 €

20 €

25 €

30 €

35 €

40 €

45 €

NGR €M

- 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000

100 000

RDCs

-

20 000

40 000

60 000

80 000

100 000

120 000

NDCs

44

4 MAIN KPIS QUARTERLY NDCs 85 384 (last quarter 74 638) RDCs 90 922 (last quarter 81 751)

Deposits €139.1M (last quarter €123.7M) NGR €40.6M (last quarter €39.6)

45

Technology leadership

Mobile First

Expansion Opportunities

Execution

Data driven

Drivers behind LeoVegas’ success