Q2 JANUARY - JUNE 2018

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1 JANUARY - JUNE

2 Continued adaption for future growth Sustainable revenue 89% : 1 April 30 June 1 Total revenue was EUR 6.97 million (4.91), a 42.0% increase. Gaming revenue increased 31.7% to EUR 5.98 million (4.54). Total active customers were 34,345 (31,119), an increase of 10.4%. Deposits totalled EUR 17.7 million (13.2), a 33.7% increase. Revenues from regulated markets were 88.7%. Mobile revenue was 50.2% of all gaming revenues. Media revenue was EUR 0.85 million (0.24). EBITDA was EUR 1.88 million (1.07), and adjusted EBITDA EUR 2.09 million (1.07) 2 EBITDA margin was 27% (22%), and adjusted EBITDA margin 30% (22%). Active customers +10% EBITDA-margin 27% Deposits +34% 6-month period 1 January to 30 June Gaming revenue increased 39.5% to EUR million (8.65). EBITDA was EUR 4.02 million (1.97); adjusted EBITDA was EUR 4.56 million (1.97). EBITDA margin was EUR 28.5% (21.1); adjusted EBITDA margin was 32.3% (21.1). Operating profit (EBIT) was EUR 2.86 million (1.54); adjusted EBIT totalled EUR 3.67 million (1.54). EBIT margin was 20.2% (16.4); adjusted EBIT margin was 26.0% (16.4). 8 TOTAL REVENUE EUR MILLION 6 7,7 7,1 7,0 4 6,5 4,9 2 0 Q3 Q4 Q1 Events during the period Robert Andersson started as CEO and group president Initiated significant transformation program Online gaming Media Other Events after the period Acquired new media business Completed certification process of platform for launch in Lithuania 1 For this report, the figures in parentheses represent amounts for the same period in the previous year. 2 Adjusted EBITDA excludes non-recurring expenses of EUR 216 thousand for remuneration to staff who became redundant due to the organisational restructuring. The restructuring is estimated to reduce staff costs by approximately EUR 570 thousand annually. 2

3 CEO Comments revenue totalled EUR 6.97 million, for an increase of 42% over the same quarter in. Growth drivers for this included our casino products, showing that markets have taken to our improved offering where we continue ongoing efforts for further improvement. Also gratifying, we had over 34,000 active customers and for the first time ever 50% of our gaming revenue came from mobile devices. Our sportsbook did not live up to our requirements and our restructuring work continues within this business area. As well, our business area Media unfortunately failed to deliver on our expectations for the quarter. On the other hand we keep delivering on profitability and together with recruitments on key position our hard work towards growth continues. When I started as CEO in April, my first task was to analyse the circumstances within the group. Based on my conclusions, I have initiated significant changes to senior management for the purpose of creating an organisation more closely oriented toward sales and marketing. With our new senior management team I will now develop a clearly defined plan for how NLAB will return to growth, while continuing to show high margins and profitability. This will require hard work before I am satisfied, but we are implementing a restructuring program which will bring results in the upcoming quarters. Our technical platform underwent the Lithuanian certification process early in the third quarter of, receiving full authority approval. This provides us with a strong stamp of quality for our significant investment in its development. We are therefore Ready to go with our important launch in the Lithuanian market. Now we are in a position to not only drive growth in Lithuania but also with branded launches in other markets. I have the greatest confidence in the technical side of our organisation, but now we must show that we are capable of capitalizing on this proprietary technology. Accomplishing a task demands you first have to identify it. This we have done, and I am firmly convinced we are on the right track for overcoming the challenges we now face. Robert Andersson CEO and Group President 3

4 Key figures in brief GROUP TOTAL Q1 Q4 Q3 Total revenue (KEUR) 6,967 7,132 7,687 6,464 4,906 Revenue growth over previous quarter (%) Revenue growth over previous year (%) Cost of services sold (% of revenues) Marketing expenses (% of revenues) Staff costs (% of revenues) Other expenses (% of revenues) EBITDA (KEUR) 1,875 2,145 2,669 2,136 1,071 EBITDA margin (%) Adjusted EBITDA (KEUR)* 2,091 2,465 2,669 2,136 1,071 Adjusted EBITDA margin (%) EBIT (KEUR) 1,307 1,548 2,065 1, EBIT margin (%) Adjusted EBIT (KEUR)* 1,800 1,868 2,065 1, Adjusted EBIT margin (%) Financial position and cash flow Investment in non-current assets (KEUR) Equity ratio (%) Return on equity % Earnings per share (EUR) Equity per share (EUR) Cash flow from ongoing operations per share (EUR) Free cash flow per share (EUR) Number of employees Number of full-time employees at year-end ONLINE GAMING Q1 Q4 Q3 Revenue (KEUR) 5,981 6,091 6,467 5,193 4,535 Growth over previous quarter (%) Growth over previous year (%) EBITDA (KEUR) 1,435 1,690 1,967 1,356 1,016 EBITDA margin (%) Adjusted EBITDA (KEUR)* 1,651 2,010 1,967 1,356 1,016 Adjusted EBITDA margin (%) Mobile revenue (%) Marketing expenses (% of gaming revenue) Total customers Total active customers 34,345 34,838 31,411 28,026 31,119 Active customers, growth per quarter (%) Active customers, annual growth (%) Deposits Deposits (KEUR) 17,663 16,290 16,719 13,769 13,213 Deposits, growth per quarter (%) Deposits, growth per year (%) Gaming margin Gaming margin (%) Gaming margin, Casino (%) Gaming margin, Betting (%) Gaming margin, Bingo (%) MEDIA Q1 Q4 Q3 Revenue (KEUR) Revenue growth over previous quarter (%) Revenue growth over previous year (%) EBITDA (KEUR) EBITDA margin (%) * Adjusted EBITDA excludes non-recurring expenses of EUR 216 thousand for remuneration to staff who became redundant due to the organisational restructuring. The restructuring is estimated to reduce staff expenses by approximately EUR 570 thousand annually. 4

5 Nordic Leisure Interim report THIS IS NORDIC LEISURE Nordic Leisure is the parent company in a group that operates within two business areas Online gaming and Media. We are nearly 190 fantastic people who work from our offices in Tallinn, Riga, Vilnius, Malta, Marbella, and Stockholm. The company holds national gaming licenses in six countries. Our goal is to be a responsible and leading business in our sector, on all the markets where we are active. Nordic Leisure shares are listed on the NASDAQ/OMX First North exchange in Stockholm. The company has approximately 5,000 shareholders. Redeye AB is Certified Advisor. 5

6 TRENDS IN ONLINE GAMING Foundation laid for growth Growth in online gaming was not in line with group targets for. This was heavily influenced by unseasonably good weather in late spring, which contributed to lower activity than expected in casino. On the plus side, we already see the effect of the cost savings we implemented, and which provide a stable foundation for our organisation. Following our cost savings efforts, our focus is now on growth. We have initiated a shift in company culture towards greater concentration on marketing and sales. Combining this with recruitment to leading positions, will enable the group to establish the best prerequisites for strong growth. Our launch of the group s online products in Lithuania has, as previously communicated, been impacted by regulatory requirements related to the company s proprietary technology platform. After further dialogue with the Lithuanian regulatory authorities during, the platform was fully approved early in Q3. We are very pleased with the possibilities, though the full market launch still relies on our assessment of the best commercial timing. Our targets for online gaming remain to establish our brands on two new markets during with primary consideration for regulated markets. We continually assess possible new markets and acquisitions. These efforts include our application for licensing in Sweden, which we also plan for Q3. NLAB currently holds gaming licenses in Estonia, Latvia, Lithuania, UK, Malta, and Curaçao. EBITDA for the business area rose by 76% Products Casino Live Casino Betting Poker Bingo 6

7 Nordic Leisure Interim report Products The group operates online gaming in various product segments - currently Casino, Betting, Poker, and Bingo. The largest segment in terms of sales is Casino games. NLAB sees significant growth opportunities in all these markets and every product segment. Our priority is to expand our customer offering through the group brands, offering higher quality content, and additional brands. 25.7% of total betting revenues derive from the group's chain of betting shops. REVENUE CASINO (MEUR) Q3 Q4 Q1 Q3 Q4 Q Revenues from mobile devices were 50.2% of total sales, where the same figure for the whole year was 44.7%. Gaming on mobile devices is a high priority for NLAB, where our view is this share will continue to increase, for which our NLAB technology solutions are being customized. Affiliation designed to drive organic traffic to the group's brands is run via Lifland Affiliates and Best Affiliate, which are our affiliate engines REVENUES BETTING (MEUR) Q3 Q4 Q1 Q3 Q4 Q REVENUES POKER & BINGO (MEUR) Q3 Q4 Q1 Q3 Q4 Q

8 TRENDS IN MEDIA Focus on growth and synergistic effects This business area was also impacted by the unusually pleasant weather in late spring, causing slower growth. However, we have seen more stable margins and the organization has restructured to take advantage of synergistic effects such as shared resources and know-how between our various operations. In this business area, Nordic Leisure operates performance-based marketing and delivery of sports results. These operations are run from: Score24 - a leading sports results provider since The customer segment includes larger media business and gaming operators. Offers pre-live odds in both xml and hosted solutions. See score24.com for more information. Comskill Media Group uses a proprietary technology platform to operate affiliation operations primarily directed towards Eastern European markets. These operations currently remain in development. They are directed to online gaming operators and consumer credit businesses, and we anticipate expanding into additional industries. See comskill.com for more information. Future Lead Generation and Kama Net, both operating in affiliation for over five years. Their primary focus is towards online gaming operators active in West European markets. The launch and continued development of several gaming sites were conducted during, which is expected to contribute to higher volumes over time. Acquisition of affiliate network After the second quarter the group acquired a smaller network focused on casino operators. Through the acquisition NLAB takes control over intangible assets such as domain names and trademarks as well as some existing employees. NLAB estimates that the acquisition will lead to synergies and improve the efficiency within the business area. The purchase price amounts to EUR 900 thousand and is to be paid half in cash and the other half with issued shares in NLAB. The sellers who will be employed in NLAB have agreed not to sell any of the shares received for a period of twenty four (24) months. The combined holdings in this business area include over 2,000 domain names, of which 800 have been launched where close to 10 can be considered Prime Brands or Potential Future Prime Brands. Nordic Leisure operates in this business area primarily using a revenue-based business model that involves revenue sharing with gaming operators to which organic traffic has been generated. EBITDA for the business area rose by 698% Products Sports results Performancebased marketing 8

9 Nordic Leisure Interim report ONLINE GAMING REVENUES CASINO MEUR 3,4 56% ONLINE GAMING REVENUES BETTING 39% MEUR 2,3 ONLINE GAMING REVENUES POKER & BINGO 8% MEUR 0,3 Online gaming Media Other 12.2% 2.0% DISTRIBUTION TOTAL REVENUES MEUR 7,0 86% ONLINE GAMING MEDIA REVENUE (MEUR) EBITDA (MEUR) EBITDA margin (%) 24% 52% 9

10 Markets Estonia Regulated gaming markets since 1994 Total gaming market approx. MEUR 120 Twelve (12) online licenses Gaming tax 5% NLAB GROUP GEOGRAPHICAL DISTRIBUTION OF GAMING REVENUE 11.4% Latvia Regulated gaming markets since 1992 Total gaming market approx. MEUR 290 Seven (7) online licenses Gaming tax 10% Lithuania Regulated gaming markets since 1995 Total gaming market approx. MEUR 250 Six (6) online licenses Gaming tax 10% 88.6% Regulated markets Rest of the world Malta Regulated gaming markets since 2004 Gaming tax varies depending on the product type Two hundred sixty-six (266) online licenses Gaming tax for betting 0.5% based on sales Gaming tax for casino, fixed fee Curaçao Regulated gaming markets since 1996 Gaming tax 0% Storbritannien Regulated gaming markets since 1960 Total gaming market approx. GBP 15 billion 1,088 gaming licenses issued Gaming tax 15% On 5 July, the Swedish government published a new Gambling Ordinance (:1475) planned to enter force as of 1 January This gambling ordinance is designed to require all operators in the Swedish gaming market to hold a license, and those that do not have a license shall be excluded. The regulation shall apply to all gaming provided in Sweden, including online gaming addressed to the Swedish market. Applications for licenses may be submitted after 1 August. The published gaming tax is set to 18%. NLAB plans to submit their application during Q3. The above information relates to and is based on official published information and NLAB assessments. 10

11 Nordic Leisure Interim report Group Performance REVENUES, DEPOSITS AND CUSTOMERS Gaming revenue increased 31.7% to EUR 5.98 million (4.54). 88.7% of total revenue is from regulated markets. DISTRIBUTION OF TOTAL REVENUES Business area Media revenue was EUR 0.85 million (0.24). Total revenue for the quarter was EUR 6.97 million (4.91), an increase of 42.0%. 12.2% 2.0% REVENUES PER BUSINESS AREA ONLINE GAMING MEUR 5,98 (4,54) Casino MEUR 3,34 (2,12) Betting MEUR 2,33 (1,88) Poker MEUR 0,28 (0,49) Bingo MEUR 0,03 (0,05) MEDIA MEUR 0,85 (0,24) 25.7% of betting revenue relates to income from the group s betting shops in Latvia and Lithuania. MEUR 6,97 TOTAL REVENUES 86% Online gaming Media Other Geographic distribution of gaming revenue shows that 88.7% is from the Baltic markets and 11.3% from the rest of the world. The Baltic markets refer to the regulated gaming markets in Estonia, Latvia, and Lithuania. Other income totalled EUR 140 thousand, primarily from rental income. The group owns an unencumbered property portfolio in Latvia which included the property where the group operative main offices are located. TOTAL REVENUE MEUR 8 6,46 7,69 7,13 6,97 6 4, Q3 Q4 Q1 Online gaming Media Other 11

12 DEPOSITS AND TOTAL CUSTOMERS Deposits totalled EUR 17.7 million (13.2) for the quarter, corresponding to a 34.1% increase over the same period the previous year. This positive trend in deposits shows that our products are highly valued, and that our customers are using them to an increasing extent. Total active customers were 34,345 (31,119), an increase of 10.4 % over the same period the previous year. Newly registered customer accounts totalled 9,609 (16,285). GAMING MARGIN The combined gaming margin in online gaming for was 4.8%. STATEMENT OF FINANCIAL POSITION AND FINANCING Group equity at the reporting period balance sheet date (30 June ) was EUR 27.3 million (18.2). As of 18 May, the AGM for NLAB adopted the proposed directed issue of not more than 1,800,000 warrants to be allocated to key individuals in the group. The issue price was SEK per share and the option premium was SEK 4.31 per option as valued using the Black & Scholes model, by accountants PwC. Subscription may not occur prior to 8 June 2021 and not later than 31 December Cash and cash equivalents totalled EUR 8.2 million (11.5), of which EUR 739 thousand (686) were customer funds. The corresponding amount of EUR 739 thousand (686) is therefore player liabilities and is recognized in Current liabilities. The net holdings in cash and cash equivalents for the group (own liquidity) therefore totalled EUR 7.5 million (10.8). The group has no borrowings from credit institutions and no interest-bearing liabilities. The equity ratio was 82.2%. Total assets as of 30 June were EUR 33.2 million (21.0). CASH FLOW AND INVESTMENT Cash flow for ongoing operations was EUR 1.3 million (0.9) for the period. Investment in non-current assets was EUR 686 thousand (339), which is primarily attributable to capitalized development costs related to the group s gaming platforms , , , , , Q3 Q4 Q1 0 Active customers Deposits, MEUR 12

13 Nordic Leisure Interim report RESULTS Gross profit for the quarter was EUR 5.14 million (3.34), an increase of 53.9%. Gross margin was 73.7% (68.2%). EBITDA was EUR 1.88 million (1.07), which corresponds to an EBITDA margin of 27% (22%). Staff costs were EUR 2.13 million (1.18). The continued reorganisation caused non-recurring expenses of EUR 216 thousand for remuneration to staff who became redundant due to the organisational restructuring. The restructuring is assessed to reduce staff costs by approximately EUR 570 thousand annually. Our assessment is we have no greater recruitment requirements for operations since the future consolidated organisation will be able to utilize the scalability of the group business model. However, the group will continue to measure the need for key personnel, primarily within marketing and sales, which explains our recent new hires, and which will continue. Marketing costs in online gaming were EUR 952 thousand (635), and were therefore 15.9 % of gaming revenues, which can be seen as a low percentage as compared to gaming companies operating in unregulated markets. This is due to the extensive legal limits to marketing imposed on gaming companies in the regulated Baltic markets. Group companies that hold national gaming licenses must comply with strict conditions under these. This limits paid marketing, and similar, and thereby restricts entry of new operators to each of these markets. Since NLAB has long maintained our presence in the Baltic markets, this becomes a significant competitive advantage. Overall, the group maintained continued strong profitability during the period, despite continued high levels of investment. Operating profit (EBIT) was EUR 1.31 million (0.86), for an EBIT margin of 22% (17%). However, an important consideration to highlight is that the group does not report under IFRS. However, the board of directors has determined to implement these standards as of Depreciation at the group level primarily relates to goodwill. Consolidated financial statements compliant with IFRS regulatory framework would have enabled reporting using the same policies as other industry companies, whereby assets from acquisitions are allocated as intangible assets for which impairment is measured, and generally no or negligible depreciation is required. This circumstance should be specially considered when comparing NLAB to other listed businesses operating in the industry but who use IFRS accounting policies. Goodwill depreciation in the group for the quarter was EUR 424 thousand. Net profit for the period was EUR 1.28 million (0.70), representing an 83% increase, and net margins were 18.3% (14.2%). Tax expenses for the group were impacted positively by changes to corporate taxes in Latvia being reduced in from 15% to 0%. 3 EBITDA, MEUR Q3 Q4 Q1 13

14 Nordic Leisure Interim report Additional information STAFF At the period-end, the group had 187 (141) employees from eleven nationalities based in offices in Tallinn, Riga, Vilnius, Malta, Marbella, and Stockholm. 89 of these employees worked within online gaming (with 50 in the technology), 87 in gaming at our LBOs, 9 worked in the media business area and 2 in the parent. PARENT The group parent, Nordic Leisure AB, invests in businesses that operate and develop services in online gaming, and performance-based marketing. All gaming operations directed to end-consumers are run in subsidiaries that hold requisite licenses for the markets in which they operate. loss for the parent was EUR -266 thousand. RELATED PARTY TRANSACTIONS No material changes occurred within the group regarding related party transactions from those described in the annual report. OUR SHARE Nordic Leisure AB is listed on the NASDAQ First North exchange. 62,610,381 shares have been issued in a single series. The company has approximately 5,000 shareholders. RISKS AND UNCERTAINTIES The primary risk and uncertainty for the group involves political risk. Legislative and regulatory changes can impact the group's current operations, and our opportunities for expansion. The group operates on regulated markets, which are assessed to be stable with low risk for less advantageous conditions or prerequisites. A portion of group marketing is done in partnership with advertising networks in affiliates. In any situation involving third-party marketing, the firm s brands may be exposed in undesired contexts, without our knowledge or ability to control. When such a violation does occur, group companies have, as a rule, contracted sanctions against their counterparty. The group s licensed companies all have the practice of maintaining membership in industry associations, and to contribute to curb unfair marketing practices, as well as to generally contribute to both responsible gaming and responsibly operated gaming activities. LEGAL DISPUTES No legal actions or arbitration procedures are currently in progress within the group which have or may be anticipated to have material financial impact on any company within the group. LICENSES AND LICENSE APPLICATIONS The group companies hold gaming licenses in Estonia, Latvia, Lithuania, UK, Malta, and on Curaçao. None of these companies have received or been subjected to notification of violations from the licensing authorities. As of 30 June, the group had not submitted any license application regarding an additional national gaming license in any jurisdiction. Group employees - Gender distribution Group employees - Age distribution 37% % 28 Women Men <30 years years >40 years 14

15 Outlook Nordic Leisure does not issue any forecasts, but here we present our targets instead: That our online gaming business area will have at least EUR 40 million in total revenue with an EBITDA margin exceeding 15%. To initiate online gaming operations in at least two new regulated markets through either acquisition or organically. To apply for an online gaming license in Sweden in Q3. That our Media business area will have at least EUR 5 million in revenue with an EBITDA margin exceeding 50%. Nordic Leisure sees very strong demand within the areas where the group operate. Moreover, the company sees a realignment within many markets where illegal, unregulated gaming is being directed toward legal, regulated gaming at licensed operators. This is brought by more and stronger action from authorities combined with greater control by providers on the use of their content, and a generally improved awareness by consumers. These trends significantly benefit Nordic Leisure operations. Nordic Leisure invests in building our technology in order to control proprietary solutions. Over time, this enables higher margins, creating value, and gives us the flexibility and freedom to create the prerequisites for timely implementation. Nordic Leisure thereby considers that proprietary technology solutions are a determinative prerequisite for ensuring high levels of long-term and sustainable profitability, which contributes to what NLAB defines as sustainable revenue. Accounting policies Group consolidated financial statements are prepared in accordance with the Swedish Annual Accounts Act and the Swedish Accounting Standards Board General Recommendations BFNAR 2012:1 Annual Accounts and Consolidated Financial Statements (K3). This interim report for the parent was prepared in compliance with Chapter 9 of the Annual Accounts Act, Interim reports. Group gaming revenue is recognized net of customer winnings, bonuses, loyalty programmes and jackpot contributions. Direct expenses for gaming activities and gaming fees are recognized separately in the income statement. Direct expenses include license fees to gaming networks, partner and related party commissions, software costs, processing fees for payments and unapproved payments. Income and operating costs are recognized in gross profit/loss, which represents the earnings generated through our customer transactions. Recognised goodwill represents the surplus value that arose in connection with business combinations and consists of synergy effects. Carrying amount is recognized as cost less accumulated depreciation and any accumulated impairments. Impairments are systematically recognized over the expected useful life. The company estimates that excess value from acquisitions has an expected useful life of 10 years. 15

16 Board of directors and CEO certification This report has not been audited by the company auditors. The board of directors and chief executive officer hereby certify that this interim report provides a fair representation of operations in the group and parent, their financial position and performance, and describes the material risks and uncertainties facing the parent and group companies. Sigtuna 1 August Niklas Braathen Chairman of the board Ludwig Pettersson Board member Staffan Dahl Board member Peter Åström Board member Christian Haupt Board member Robert Andersson CEO Nordic Leisure AB (Publ) Stora Gatan 46, Sigtuna investor@nordicleisure.se nordicleisure.se ADDITIONAL INFORMATION Robert Andersson, Chief executive officer robert.andersson@nordicleisure.se FINANCIAL CALENDAR Interim report January - September 31 October Nordic Leisure AB has been listed on the Nasdaq First North Exchange (NLAB) in Stockholm since 2006 (Ticker: NLAB) in Stockholm. The company s Certified Adviser is Redeye, phone +46 (0) 88,

17 Consolidated Income Statement KEUR Jan-Jun Jan-Jun REVENUE Gaming revenue 5,981 4,535 12,072 8,645 20,263 Other income , ,204 Total revenue 6,967 4,906 14,099 9,355 23,467 DIRECT OPERATING EXPENSES Cost of services sold (1,207) (1,122) (2,458) (2,187) (4,517) Gaming taxes (622) (440) (1,223) (840) (2,017) Total direct operating expenses (1,829) (1,562) (3,681) (3,027) (6,534) Gross profit 5,138 3,344 10,418 6,328 16,933 OPERATING COSTS Staff costs (2,131) (1,184) (4,048) (2,327) (5,710) Capitalized development costs , ,383 Marketing costs (952) (635) (1,907) (1,115) (2,690) Other income and expenses (793) (675) (1,585) (1,309) (3,178) Total direct operating expenses (3,263) (2,273) (6,399) (4,354) (10,195) EBITDA 1,875 1,071 4,019 1,974 6,739 Depreciation (568) (216) (1,164) (439) (1,481) Operating profit (EBIT) 1, ,855 1,535 5,257 Net financial results (22) (32) (80) (37) 23 Profit/loss before tax 1, ,775 1,498 5,280 Income tax (8) (128) (49) (216) (802) Profit/loss for the period 1, ,726 1,282 4,478 PROFIT ATTIBUTABLE TO: Equity holders of the parent 1, ,726 1,281 4,477 Minority Total shares at period-end 62,610,381 56,610,381 62,610,381 56,610,381 56,610,381 Earnings per share (EUR) Earnings per share (EUR) after dilution

18 Consolidated Statement of Financial Position KEUR 30 June 30 June 31 Dec. ASSETS Non-current assets Goodwill 14,823 3,578 15,371 Intangible assets 3, ,005 Property, plant and equipment 2,075 2,300 2,179 Other non-current receivables Total non-current assets 20,887 7,295 20,695 Current assets Trade receivables Prepayments and accrued income ,119 Other current receivables 2,456 1,894 1,790 Cash and cash equivalents 8,217 11,492 7,316 of which restricted funds (player funds) Total current assets 12,349 13,738 10,644 TOTAL ASSETS 33,236 21,033 31,339 EQUITY AND LIABILITIES Share capital 1,311 1,185 1,311 Non-restricted equity 26,018 16,733 23,292 Attributable to the owners of the parent 27,329 17,918 24,603 Minority interest Total equity 27,329 18,190 24,875 Non-current liabilities ,616 Total non-current liabilities ,616 Current liabilities Trade payables and other liabilities Player liabilities Other liabilities 3, ,561 Accruals and prepaid income 1, Total liabilities 5,843 2,710 4,848 TOTAL EQUITY AND LIABILITIES 33,236 21,033 31,339 18

19 Consolidated Statement of Cash Flows KEUR Jan-Jun Jan-Jun OPERATING ACTIVITIES Profit/loss after financial items 1, ,775 1,458 5,280 Tax (540) (128) (670) (216) (802) Other items not affecting cash flows Depreciation and impairments , ,481 Capital gain or loss from sale of subsidiary Other items not affecting cash flows (10) (23) Cash flows from operating activities, before changes in working capital 1, ,350 1,671 5,937 Changes in working capital Changes in current receivables (142) (1,065) Changes in current liabilities 90 (107) (514) 86 1,340 Changes in working capital (52) (24) (508) Cash flow from operating activities 1, ,842 1,775 6,212 INVESTMENT ACTIVITIES Investment in intangible assets (613) (302) (1,141) (478) (1,383) Investment in property, plant, and equipment (74) (37) (110) (41) (159) Sale of subsidiaries Acquisition of subsidiaries (72) - (632) 332 (11,081) Changes to non-current receivables - (88) - (335) (57) Cash flow from investing activities (758) (427) (1,883) (522) (12,680) FINANCING ACTIVITIES Proceeds from share issue/other share related securities ,515 Repayment of current liabilities Cash flow from financial activities ,515 Cash flow for the period ,253 (2,952) Currency translation differences for cash and cash equivale (22) - (58) (11) 18 Cash and cash equivalents at start of period 7,713 11,013 7,316 10,250 10,250 Cash and cash equivalents at period-end 8,217 11,492 8,217 11,492 7,316 19

20 Statement of changes in equity KEUR Share capital Retained earnings Majority Minority Total equity Starting balance at January 1, 1,183 15,254 16, ,955 New share issue 122 3,393 3, ,513 Adjustment of starting balance for minority interests (247) 0 Translation difference 6 (80) (74) 0 (74) Profit/loss for the period 4,479 4, ,479 Ending balance at December 31, 1,311 23,292 24, ,875 Starting balance at April 1, 1,186 16,033 17, ,490 Translation difference Profit/loss for the period Ending balance at June 30, 1,186 16,732 17, ,190 Starting balance at January 1, 1,311 23,292 24, ,875 Acquisition from minority owners (272) (272) Profit/loss for the period 2,726 2,726 2,726 Ending balance at June 30, 1,311 26,018 27,329-27,329 Starting balance at April 1, 1,311 24,742 26,052-26,052 Profit/loss for the period 1,277 1,277 1,277 Ending balance at June 30, 1,311 26,018 27,329-27,329 20

21 Income Statement Parent company KEUR Jan-Jun Jan-Jun Revenue Operating costs (258) (157) (433) (299) (595) Operating profit/loss (258) (149) (433) (283) (429) Net financial results (8) - (32) (2) (16) Profit/loss before tax (266) (149) (465) (285) (445) Income tax Profit/loss for the period (266) (149) (465) (285) (445) Statement of Financial Position - Parent KEUR 30/06/ 30/06/ 31/12/ 31/12/2016 Intangible assets Tangible non-current assets Financial non-current assets 23,346 9,658 26,733 14,808 Total non-current assets 23,370 9,720 26,761 14,849 Current receivables 61 3, Cash and cash equivalents 1,815 8,905 3,034 5,955 Total current assets 1,876 12,122 3,053 6,061 TOTAL ASSETS 25,246 21,842 29,814 20,910 Restricted equity 1,311 1,185 1,311 1,183 Non-restricted equity 14,006 11,275 14,471 11,560 Total equity 15,317 12,460 15,782 12,743 Current liabilities 9,929 9,382 14,031 8,167 Total liabilities 9,929 9,382 14,031 8,167 TOTAL EQUITY AND LIABILITIES 25,246 21,842 29,814 20,910 21

22 Terms and definitions Revenue Gaming revenue: Bets less winnings, jackpot contribution, loyalty programme and bonuses. Other income: All regular income from activities other than direct gaming operations, such as revenues from the Media business area, rental income, transaction income, and all other types of income. Sustainable revenue Revenue from regulated markets where group companies hold gaming licenses and pay local gaming tax. Regulated markets Markets with online gaming legislation and which issue licenses to operators. Mobile revenue Revenue generated from telephones and tablets. Gross profit Revenues less direct variable costs that include partner commissions, gaming taxes and gaming license fees, license fees to gaming providers, software costs, processing fees for payments and unapproved payments. Gaming margin Gross profit from gaming activities divided by gaming sales. Deposits Includes all accumulated funds deposited by customers during any single reporting period. Player liabilities Outstanding amount of customer funds at the period-end, which is reported in the statement of financial position. Registered customer accounts The total number of registered customer accounts at all our brands. Active customers The total number of customers who have wagered at any of the group brands during the reporting period, including customers who have used only a bonus offering. New registrations Customers who have registered under any of the group's brands during the period. Gross margin Gross profit/loss in relation to revenues Cost of services sold Relates to partner commissions, gaming taxes and gaming license fees, license fees to gaming providers, software costs, processing fees for payments and unapproved payments. New, active deposit customers Customers who have made their first deposit to an account and wagered during the period. Reactivated customer Previously active customers who were not active during the previous reporting period who became active during the current period. EBITDA Profit before net financial results, corporate tax, depreciation and impairments. EBITDA margin (%) EBITDA in relation to revenues. EBIT (operating profit) Profit before net financial results and corporate tax. EBIT margin (operating margin) EBIT in relation to revenues. Adjusted EBITDA EBITDA adjusted for non-recurring items. Adjusted EBITDA margin Adjusted EBITDA as percentage of total revenues. Adjusted operating margin Operating margin adjusted for non-recurring items. Adjusted operating profit/loss Operating profit/loss adjusted for non-recurring items. Net profit Profit after deducting all expenses including interest and taxes. Profit margin Net profit in relation to revenues for the period. Earnings per share Profit for the period that is attributable to the owners of the parent divided by the total number of shares at the period-end. Equity per share Equity for the period that is attributable to the owners of the parent divided by the total number of shares at the period-end. Equity ratio Equity divided by total assets. Cash and cash equivalents Holdings in bank accounts and in digital wallets. Operating cash flow after investment Operating profit including changes to depreciation and impairments, operating capital and investment in other non-current assets (net). Organic growth Growth that excludes acquisitions and currency effects. Number of employees Total number of employees during the last month of the reporting period. One-off items - non-recurring items Refers to items that are non-recurring, relating to unusual events or not linked to normal group operations. Therefore, reporting such items with other items in the income statement may make comparison to other periods difficult, which increases difficulty for outside observers to assess group profitability. 22