Q Interim Report. Jan Sep 2017 CEO Anders Holmgren & CFO Christine Rankin 9 Nov 2017

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1 Cherry AB (STO: CHER-B.ST) Q3 217 Interim Report Jan Sep 217 CEO Anders Holmgren & CFO Christine Rankin 9 Nov 217

2 Now listed on Nasdaq Stockholm, Mid Cap segment Dynamic player in the Swedish gambling cluster CHERRY AB (publ) Ticker symbol: CHER-B ISIN code: SE Sector: Travel & Leisure Number of shares Class A shares: 4,988, Class B shares: 98,826,55 Total no. of shares: 13,814,55 Own shares: Voting & ownership restrictions: None Current market cap: SEK 5,191 million (8 November 217)

3 Cherry in brief The industry s most complete gaming company Founded in 1963 Complete value chain 5 business areas 6 companies Nordic and European focus 7licences Y-O-Y growth +165% organic and acquired Leading gaming operator Top 5 in Northern Europe Market Cap Nasdaq Mid Cap 5.2 billion SEK

4 Unique platform for value creation Investments cover entire value chain for gaming Online Gaming ComeOn Online Marketing Game Lounge Game Development Yggdrasil Gaming & Highlight Games Gaming Technology Xcaliber Restaurant Casino Cherry Spelglädje

5 Q3 217: Highlights Continued high growth in our online offering ComeOn to return to expected growth and earnings potential Merger of ComeOn in the finale stage. Recruitment of MD ongoing, will join seasoned management team Final acquisition analysis for ComeOn. Revaluation of fair value of shares, goodwill reduced by SEK 51M Strong revenue growth in Online Marketing and Game Development Yggdrasil had a strong third quarter, launched Jungle Book, its biggest and most ambitious game to date. After the period, Yggdrasil signed agreement in to enter the Danish market and made its titles available on Pinnacle Game Lounge grows rapidly, yet still good potential for profitable expansion XCaliber - Strategic business entry for gaming technology signed on additional external customers Cherry Spelglädje Stable performance in declining market

6 A quarter characterized by focus on results Good revenue growth in all business areas EBITDA result 2% Mkr Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Intäkter Revenue EBITDA-marginal %

7 A quarter characterized by integration Stable sequential growth Revenue per business area, SEK M 6 EBITDA per business area, SEK M Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Online Gaming Game Dev Rest Casino Online Mrktg Gaming Tech Online Gaming Game Dev Rest Casino Online Mrktg Gaming Tech

8 Continued strong revenue growth Diversified platform creates value SEK M Cherry Group SEK M Online Gaming SEK M Online Marketing SEK M Game Development % Q3 216 Q % Q3 216 Q % Q3 216 Q % Q3 216 Q3 217 SEK M EBITDA % SEK M EBITDA % SEK M EBITDA % SEK M EBITDA % Q3 216 Q Q3 216 Q Q3 216 Q Q3 216 Q

9 Game Lounge to expand into loans Acquires Finland s leading portal Establishing a new business segment Acquired Lainat.fi Finland s leading portal for loan seekers Expanding its proprietary platform and unique capabilities in online marketing Focus will remain on the gaming/casino affiliates, while continuing to study the potential of other market segments

10 Highlight Games to launch SOCCERBET Roll out in Europe expected in H1 218 Highlight has continued its construction phase on the development of the football game SOCCERBET with beta testing across online sites Game went live into retail in Africa with AfricaBet beginning of November into shops in Zambia and Zimbabwe Highlight Games is looking to expand its library of rights in line with expansion into other sports. Other league football and ice hockey being immediate targets

11 Outlook Published in November The Online Gaming business area is expected to grow more quickly than the online gaming market. H2 Gambling Capital estimates that the European online gaming market Growth will driven grow by by an average of 6 Diversified percent per year over the Strong period track Online gaming is subject to tough competition and investments regulations, in which may change operations quickly in the various record European of successfully acquiring will grow in countries. Cherry's estimate is that the markets for game developers in online casino and entrepreneurial covering for performance-based entire marketing line with the online market at large. companies chain from and developing The legal situation for online gaming is continuously changing in different geographical technology markets. to Pressure innovative is still being assets exerted on countries in the EU to adapt national legislation applicable to EU law, with free consumer movement of products and services. Several countries have given notice that they are working on new legislation that will be compatible with EU requirements, and the regulatory trend in the European market is clear. 4. In December 216, in connection with Cherry calling the option to acquire the remaining 51 percent of the shares in ComeOn Malta Ltd, the Group provided a forecast. The Cherry Group, together with acquired ComeOn, was estimated to generate Leading Nordic Number of M&A Listing on total revenue for the full year 217 of between SEK 2,6M and 2,7, with an EBITDA of SEK 55M to SEK 6M. and European candidates show Nasdaq The rapid merging of the online gaming operations to ComeOn has resulted in intensive integration work and thus player with platform high residual Stockholm affected growth. Given that the merger has not yet reached a full positive effect on the Group s revenue and earnings, Cherry adjusts its forecast for the full year 217. The for continued Company now expects potential the Group to generate total revenue of approximately SEK 2,2M in 217 and EBITDA is expansion expected to amount to around SEK 4M. (Previously SEK 2,2M and SEK 48M), respectively.)

12 Financial targets Continued migration to online gaming Sales growth Cherry s target is to grow more quickly than the European gaming market over an economic cycle. In addition to this, Cherry intends to grow through acquisitions Growth driven by Diversified Strong track Margin investments in operations Capital structure record of successfully acquiring entrepreneurial covering entire Cherry s target is to companies chain from Cherry s capital and structure developing increase the adjusted EBITDA should allow for a high degree technology to innovative assets of financial flexibility and consumer margin over time and in the medium term to achieve an adjusted EBITDA margin of between and 18 percent. 5. Leading Nordic Number of M&A and European candidates show player Dividend with platform for continued potential policy high residual Cherry s target is to distribute 5 percent, or more, of net profit as dividend. expansion Account should, however, be taken of the company s financial position, cash flow, opportunities for acquisitions and future prospects. provide scope for acquisitions. The company s target is for the equity ratio to be at least 3 percent. 6. Listing on Nasdaq Stockholm

13 Investment case Positive outlook for continued growth and value creation 1. Growth driven by investments in entrepreneurial companies 2. Diversified operations covering entire value chain from technology to consumer 3. Strong track record of successfully acquiring and developing innovative assets 4. Leading Nordic and European player with platform for continued expansion 5. Number of M&A candidates show high residual potential 6. Listed on Nasdaq Stockholm

14 Thank you for listening Questions? Disclaimer: This presentation has been prepared by Cherry AB solely for use at this presentation and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. Some statements herein are forward-looking and the actual outcome could be materially different. In addition to the factors explicitly commented upon, the actual outcome could be materially and adversely affected by other factors such as the effect of economic conditions, exchange-rate and interest rate movements, political risks, the impact of competing products and their pricing, product development, commercialization and technological difficulties, supply disturbances, and major customer credit losses. The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of Cherry, or any of its principal shareholders or subsidiary undertakings or any of such person s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. 217 Cherry AB (publ) Financial calendar Interim report Q February Annual Report week c/ 16 Apr Annual General Meeting 9 May 218 Interim report Q May 218 Interim report Q August 218