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December 2019 Presentation DISCLAIMER This presentation was prepared by DONTNOD (the "Company") for the sole purpose of being used at The distribution of this document in other countries may be subject to legal restrictions, and any investor presentations. By receiving this presentation and attending this meeting, you acknowledge persons who may come into possession of it must inform themselves of the existence of any such yourself to be acquainted with the following restrictions. restrictions and comply therewith. This presentation does not constitute or form part of any offer or invitation to sell or to subscribe This presentation was prepared by and is the sole liability of the Company. The information shown shares. Neither this document nor any part of this document constitutes the basis of any contract or hereafter has not been independently verified by the Company, its advisers or any other person, and it commitment and must not be used in support of such a contract or commitment. may be subject to possibly significant updating, additions and revisions. Any decision to purchase or subscribe shares under any future offer may only be made on the basis of No representation or warranty, whether express or implied, is given as to the accuracy, truth and information contained in a prospectus approved by the Autorité des Marchés Financiers (French fairness, exhaustiveness or relevance of the information contained in this document. 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These aims and development lines are not historic data and must not be interpreted as guaranteeing Neither this presentation nor a copy hereof, or any information it contains, may be conveyed, disclosed that the facts and data given will occur, that the assumptions will be verified or that the objectives will or distributed, whether directly or indirectly, in the United States, Canada, Japan or Australia, or to any be achieved. resident of those countries. By their nature, these aims may fail to materialize, and the declarations or information shown in the Non-observance of any or all of these restrictions may constitute a breach of statutory restrictions presentation may prove erroneous, while the Company, its advisers and their representatives shall not governing the offering of financial instruments in the United States, Canada, Japan or Australia. be under any duty to update, subject to applicable regulations. 2 SPEAKERS Oskar GUILBERT Abrial DA COSTA Benoît GISBERT-MORA Chairman and CEO Business Development CFO Director Founder - 2008 3 CREATOR of original intellectual property With a leading position on narrative games (Life is Strange franchise) In partnership with industry leaders such as Microsoft, Square Enix, EPIC Games, Bandai Namco, Capcom, Focus Home Interactive, … Developing PC and consoles video games (budgets of €10 to 20m) Combining 2 revenue sources: secured publisher fees and royalties ensuring a return on the commercial success of games NEW : Contracting directly with distributors (EPIC Games Store) more profitable and secured agreements 4 A DYNAMIC MARKET GLOBAL VIDEO GAME MARKET 2021 forecast ($bn)1 164.6 152.1 178 138.7 BILLION USD 121.7 2019 +10% 2017 2018 2019 2020 1Source : Newzoo, 2019 Global Games Market Report 5 MORE THAN 40% OF THE MARKET COVERED REPARTITION OF LIFE IS STRANGE PLAYERS 35+ y.o Racing Other 10% 6% Action Strategy 22% 4% 25-35 y.o 30% BY AGE 60% Fighting 18-24 y.o 6% GENRE BREACKDOWN Role-playing Sports OF VIDEO GAME SALES 11% 12% BY GENRE IN 2017 5.3+ million gamers1 First person shooter (FPS) Adventure 26% 9% 40% By Female genre 60% Source: The NPD Group/ Retail Tracking Service/Digital Male Games Tracking Service 1 As of March 2018 6 THE INTERNATIONAL REACH OF GAMING 9% 31% 39% EASTERN EUROPE NORTH EU AMERICA 16% ASIA-PACIFIC Breakdown of 1% Vampyr sales by MIDDLE EAST AFRICA volume in 2018* 2% LATIN AMERICA * Company source: breakdown of Vampyr’s gamers on STEAM 7 A KEY POSITIONING IN THE VALUE CHAIN Development CD Projekt SA, Remedy Entertainment Oy, 11 bits Studios, Paradox studios Entertainment, Avalanche Studios, etc. Contracting directly with distributors Creation of original intellectual property (EPIC Games Store) more profitable and secured agreements Square Enix, Bandai Namco, Publishers Focus Home Interactive, etc. PUBLISHING Epic Games Store, Steam, Distributors Playstation Store, Xbox Live, Appe Appstore, Google DISTRIBUTION Playstore, etc. Apple, Google, Microsoft, Platforms Nintendo, Sony, Samsung TV, Orange Box, etc. 8 A PROVEN TRACK-RECORD AND A STRONG PIPELINE COPRODUCTION COPRODUCTION PUBLISHING PC COPRODUCTION Project Project Project 7 9 10 2013 2018 2018 2018/19 2020 2015 2020 + One Shot Episodic One Shot Prequel Episodic Episodic 1.2+ million 3+ million 1+ million Millions Sales volume sales 1 paying gamers2 sales of free trending downloads LiS 1 Excluding downloads on PS+ or/and Game Pass 2 As of June 2017 9 A VIRTUOUS CYCLE Create FRANCHISES DONTNOD, LIFE is STRANGE, VAMPYR Strong presence on Natural drivers of ONLINE STORES SALES Back catalog Each release boosts sales development of prior episodes and the series Products ACCESSIBILITY Games mechanics and price (from €5/episode) 10 STRATEGY MORE GAMES DEVELOPED MORE VALUE HARNESSED MORE EACH GAME RECURRING SALES 11 1 2019 HIGHLIGHTS TWIN MIRROR: STRATEGIC PARTNERSHIP WITH EPIC GAMES 1 2 3 CONSERVING MINIMUM REVENUE SHARE INTELLECTUAL GUARANTEE TO FINANCE PROPERTY DEVELOPMENT 88% FOR DONTNOD DONTNOD, A STRONG CAPACITY TO TAKE ADVANTAGE OF NEW MARKET TRENDS 13 & announced their first-ever collaboration for the development of an original episodic game: TELL ME WHY OUT SUMMER 2020 Xbox One, Windows 10 PC et Steam® 14 LIFE IS STRANGE 2 HIGHLY ACCLAIMED IN THE PRESS EPISODE 1 EPISODE 2 OUT 27Septth September 27th 2018 18 OUTJanuary 24th January24th 2019 19 OUT 9th May 19 OUT 22th August 19 OUT 3rd December 19 81 79 78 82 84 Metacritic Metacritic Metacritic Metacritic Metacritic “A road trip that's worth looking forward to" - Destructoid "Crafted brillantly" **** - Daily Express “Absolutely Stellar" - Trusted Reviews “Emotionally intense" - Eurogamer "Each episode of Life Is Strange 2 is a delight" - Kotaku 1 Metacritic at 12.08.2019 "Why Life Is Strange 2 is a new Masterpiece of video game" - Les Inrocks 15 A NEW COLLABORATION FOR A NEW GAME IN CO-PRODUCTION 16 2 H1 2019 RESULTS A MIXED BUSINESS MODEL DONTNOD SECURED ROYALTIES CLASSIC PUBLISHER’s PUBLISHING FEES + CIJV1 OVERLAPPING PUBLISHER MARGIN (Milestones, marketing ...) CO-PRODUCTION Co-production DONTNOD share DONTNOD royalties DONTNOD royalties PUBLISHER MILESTONES + CIJV1 PUBLISHER MARGIN Controlled investments Mutual overlapping Intellectual co-property SELF-PUBLISHING DONTNOD investments DONTNOD ROYALTIES MINIMUM GARANTEED + CIJV1 Controlled investments Intellectual property 1Video games tax credit Royalties received by DONTNOD Co-production DONTNOD share Publisher milestones received by DONTNOD Publisher’s revenues 18 STRONG INCREASE OF REVENUE REVENUE + 66.8% 7.8 In €m 4.7 H1 2018 H1 2019 ROYALTIES + 58.0% MILESTONES + 68.7% ● LIFE is STRANGE 2 ● VAMPYR ● TWIN MIRROR 1.3 6.5 ● LIFE is STRANGE ● TELL ME WHY 0.8 3.9 ● REMEMBER ME In €m In €m ● NEW CO-PROD WITH FOCUS H1 2018 H1 2019 H1 2018 S1 2019 19 STRONG IMPROVEMENT IN PROFIT MARGINS Financial results- French GAAP – €’000 S1 20181 S1 2019 Revenue 4,683 7,810 + 66.8 % - Of which royalties 815 1,288 + 58 %, commercial success of Vampyr Capitalized production 410 1,214 Ramp-up of games in production: Twin Mirror and the Other products 420 107 new co-prod with Focus Total operating income 5,513 9,131 Total operating expenses (excl. depreciation and provisions) (7,625) (9,371) CIJV: video game tax credit 1,952 2,563 2 Operating EBITDA (159) 2,323 EBITDA margin of 29.7% vs 26.2% at 31.12.2018 Depreciation and amortization (447) (1,270) Amortization of the intangible asset Vampyr since H2 2018 Operating EBIT (606) 1,053 Financial income / (expenses) (126) (67) Non-recurring