Yggdrasil Gaming Q4 2017 Update

Q4 highlights

• Revenues for the period increased by 61% to MSEK 51.2 (Q4 2016: 31.8)
• EBITDA for the period increased to MSEK 21.5 (13.2), yielding a margin of 42%
• EBIT for the period increased to MSEK 17.5 (9.3), yielding a margin of 34%
• Number of player transactions (rounds) increased by 87% to 1,184 million
• Mobile gaming is now 59% of total gross game win
• Six new licence agreements were signed, including Pinnacle, Tabcorp, Rank Group and Snaitech
• Announced plans to enter the Danish market through deals with Jackpotjoy Group, Danske Spil/Bwin.dk and LeoVegas
• Two new games were released: Pumpkin Smash and Reptoids
• Announced plans to enter a new product vertical, bingo
• Launched EUR 500,000 Christmas Calendar campaign for operators
• Two jackpots dropped – EUR 3.48m for Joker Millions and EUR 1.12m for Empire Fortune

2017 Full Year Highlights

• Revenues increased by 95% to MSEK 169.1 (2016: 86.9)
• EBITDA improved significantly and amounted to MSEK 71.5 (2016: MSEK 40.1), yielding a margin of 42%
• EBIT amounted to MSEK 58.8 (2016: MSEK 27.4), yielding a margin of 35%
• Released 11 new network games and one operator exclusive game
• Signed 40 licence agreements
• Announced entry into the Italian market
• Won Slot Provider of the Year at the 2017 EGR B2B Awards and Innovator Supplier of the Year at the 2017 International Gaming Awards
• Revamped technical platform iSENSE2.0+
• Launched a new game mechanic, Fusion Realms, with the game Jungle Books
• Launched new business development initiative – Yggdrasil Dragons

Notable events after the quarter

• Named Innovator Supplier of the Year at the International Gaming Awards 2018
• Launched new game, Ozwin’s Jackpots
• Jackpot of EUR 1.9m fell on Joker Millions
• Signed two new operators, including Bet25.dk
• Announced plans to enter into the Spanish market through a deal with GVC
• Announced plan to launch table games product
• Exhibited at Europe’s largest B2B igaming event in London, ICE Totally Gaming, where the third instalment in the successful “Vikings” series was announced

Comment from Fredrik Elmqvist, CEO of Yggdrasil:

“Looking back at 2017, it has been yet another landmark year for Yggdrasil. Revenue for the year grew to MSEK 169.1, while full year operating profit was up 35 percent to MSEK 58.8. These fantastic results were only possible because of the team we have assembled, and the support of our customers.

The fourth quarter saw us launch our biggest ever marketing campaign, a Christmas Calendar with a prize pool of EUR 500,000. The campaign featured different tournaments, cash races and missions that all utilised our award-winning BOOST™ in-game promotional tools. The campaign meant Yggdrasil processed the highest number of rounds in its history, and we delivered this without any issues because of the dedication of our team.

The fourth quarter was also a busy one from the perspective of new customers, whether that be signing operators or integrating and pushing existing ones live. During Q4 we saw an increase in customers in Italy, and the signing of new and existing customers for another new regulated market for Yggdrasil, Denmark. Our first customers went live in Denmark in February, and we will do a full launch in the country in Q2.

We also used the quarter to expand our product offering beyond slots. In December, we announced news that we would enter the bingo vertical with an innovative new product that will bring a fresh dimension to the sector. Our bingo product is developed from a mobile-first perspective and includes a number of industry-first features. We continue to lead the way on mobile, and during the fourth quarter mobile game win was up to 59 percent.

There have been more slots releases as well, with Reptoids and Pumpkin Smash both going live, while we also released a previously exclusive game, Orient Express, to all customers.

This level of activity has required a further expansion to the team. We welcomed 26 new people to the Yggdrasil family during Q4, taking our team up to 191 people. This process continues, and with that in mind I am delighted to welcome our first HR director, Johan Hedlund, who brings with him vast experience from the likes of IKEA. He will bring valuable knowledge about leadership and HR to Yggdrasil. We now have a complete senior management team passionate to steer company towards further victories.

It has been a remarkable 12 months, but I am even more excited about the possibilities and opportunities that lay ahead in 2018. We have a world-class team, an industry-leading product set and the best customers in the business, and we will be building upon this throughout the year and beyond.”

/ Fredrik Elmqvist

www.yggdrasilgaming.com