Quarterly report April - June 2019 Everysport Media Group AB (publ.)

Continued growth in North America

This is an translated version of the Swedish original, in case of deviations is the Swedish version considered to be the one to apply.

This information is such information that Everysport Media Group AB (publ.) Is required to publish in accordance with the EU Market Abuse Regulation. The information was provided, through the agency of the above contact person,
for publication on July 18th, 2019.

Summary of the second quarter 2019

Net sales: 23,0 mkr (25,2 mkr)

EBITDA: 2,0 mkr (2,6 mkr)

Profit after tax: -1,3 mkr (-0,6 mkr)

Earning per share: -0,01 kr (-0,01 kr)

Cashflow form operating activities: 1,5 mkr (0,9 mkr)

Summary of the first six months 2019

Net sales: 46,7 mkr (45,2 mkr)

EBITDA: 3,8 mkr (4,0 mkr)

Profit after tax: -2,8 mkr (-2,6 mkr)

Earning per share: -0,02 kr (-0,02 kr)

Cashflow form operating activities: 2,2 mkr (5,3 mkr)

CEO, Hannes Andersson, comments:

The first half of the year was eventful for ESMG, with focus on development of new products and services. Some have already been launched, such as our new solutions for video content, and some are just about to reach the market.

During the summer months, we look forward to a number of new product launches. Through our media platform Everysport Media Platform (EMP) new versions of Hockeysverige and Fotbolldirekt will be launched, SvenskaFans is re-launched by a new native app and a number of new functions on Eliteprospects will become available.

A central part of our strategy for creating future value is our business in North America. There, growth is still strong and in the second quarter our largest site Eliteprospects reached another record, when 1.2 million unique visitors visited the site during a week. We have recruited staff within both sales and editorial production to our office in the US, and the workforce is expected to grow further during the fall.

In Sweden, we have seen a change in advertising revenues from iGaming companies. Here, the volume has decreased somewhat, but has been replaced by revenue from content production and other relationship-building marketing. It is a market development we believe will continue during the fall. But as demand for high quality content increases, ESMG continues to be a key partner for licensed iGaming operators in the Swedish market.

Net sales during the first half of the year amounted to SEK 46.7 million (SEK 45.2 million) and with an EBITDA result of SEK 3.8 million (SEK 4.0 million), the company again delivers two strong quarters with growth in products with good margin.

During the second quarter, we have seen that investments previously made are starting to pay off. This has led to an EBITDA result that is close to the 2018 level for the quarter, despite the fact that revenues during Q2 2018 were positively affected by the World Cup for men and a large amount of advertising from iGaming companies. In the second quarter of 2019, we also saw non-recurring costs of SEK 0.3 million, which had a negative impact on earnings.

Although we are facing an ad market in transition in Sweden, we are positive when looking ahead to the second half of 2019, when customer revenues and revenues from both new product areas and markets are growing steadily.

Forward-looking statement

We will continue to invest in existing and new products and strengthen our positions both in Sweden and internationally. Investments will increase the group’s mass of costs in the short run and it can take a few quarters until revenues match the costs associated with these investments. That being said, our assessment is that the group on a full-year basis in 2019 will increase sales compared to 2018 and achieve an EBITDA result higher than 2018 on a full year basis.

Significant events during and after the end of the period

The Annual General Meeting was held on 15 May. In accordance with the Nomination Committee's proposal, existing members of the Board Michael Hansen, Johan Ejermark, Göran of Klercker, Paul Fischbein, Carl Gyllfors and Charlotte Gustafsson were re-elected. Paul Fischbein was re-elected as Chairman of the Board.

Net Sales, earnings and financial position during the period

Net Sales

Net sales for the second quarter amounted to SEK 23.0 million (SEK 25.2 million). A decrease of 8.4% compared with the same quarter last year.

During the second quarter, we saw continued growth in new products with a good margin. However, we also saw a change in the advertising market where advertising volume from gaming operators has declined somewhat during the second quarter. Demand for advertising products against the sports public the same quarter last years was also strongly affected by the World Cup for men.

EBITDA and EBIT

EBITDA for the second quarter amounted to SEK 2,0 million (SEK 2,6 million).

Despite the decrease in sales of traditional ad products, largely linked to the World Cup for men, growth in new products and markets weighed up the drop in EBITDA which almost reaches the same level as in the same quarter last year. The strategic focus on new products and markets has led to an increase in personnel and others costs, which are investments that are strategically important from a longer value-creating perspective. The variable operating costs have decreased as a result of a number of external sales commission based contracts have being concluded, which in the same quarter last year generated high variable commission costs..

EBIT for the second quarter amounted to SEK 2019 million to SEK -1.2 million (SEK -0,5 million). The EBIT result during Q2 2019 is affected by depreciation of goodwill and development projects of SEK -3.2 million (SEK -3.1 million).

Amortization of goodwill and development projects will continue as long as the company applies the K3 regulations and there are goodwill and balanced development projects. Depreciation is not affecting cash flow.

Capitalized work on own account during the quarter amounts to SEK 0.9 million (SEK 0.5 million)

Financial position

At the end of the period, Everysport Media Group AB (publ.) has equity of SEK 13,6 million (SEK 18.0 million) and an equity ratio of 29% (30%)

Cash and cash equivalents at the end of the period were SEK 3,7 million (4.3).

Share and shareholders

As of the date on 30th of June, 2019, 113,562,412 shares were issued. All shares have equal rights to the company's profit and assets.

Decision has, through the extraordinary general meeting of 2018-01-16, been adopted to adopt an incentive program for the Board of Directors and an incentive program for the CEO and other senior executives and certain employees of Everysport Media Group (publ.). The incentive programs entail an issue of a maximum of 6,754,847 warrants. Each warrant entitles the holder to convert for one new share in the company at a price of SEK 0.57 per share. The exercise of the warrants shall be possible during the period from January 13, 2020 to June 13, 2020.

The total number of shares at full future dilution amounts to 120,317,259.

At the end of the second quarter, Everysport Media Group AB (publ.) had 877 shareholders.

Employees

The average number of full time equivalents during the period was 63.

Accounting principles

The consolidated accounts for Everysport Media Group AB have been drawn up in accordance with the K3 regulatory framework.

Audit

This report has not been reviewed by auditors.

Further reporting dates

The quarterly report for the period July - September 2019 will be published on the 24th of October 2019. The quarterly reports for Everysport Media group are published on the company’s website www.esmg.se


Stockholm 2019-07-18

Hannes Andersson

CEO

For further information, please contact:

Hannes Andersson

CEO

Phone: +467 07 36 56 25

E-mail: hannes.andersson@esmg.se



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