ASTRALIS GROUP ANNUAL REPORT 2020 ANNUAL REPORT 2020 CONTENT MANAGEMENT’S REVIEW FINANCIAL STATEMENTS ASTRALIS GROUP A/S Our Business 3 Statement by Management 26 Letter to Shareholders 5 Independent Auditor’s Key Financial Highlights 8 Report 27 Financial Review 9 Astralis Group A/S Our Results – Teams 11 Consolidated Financial Statements 29 Outlook 13 Parent Company Strategy 14 Financial Statements 40 The Market 16 Risk Management 20 OTHER INFORMATION Governance 21 Company Information and Contact Data 47 Board of Directors 22 Investor Relations 24 ASTRALIS GROUP 2/48 ANNUAL REPORT 2020 MANagemeNT'S REVIEW OUR BUSINESS Astralis Group is a Copenhagen-based company League of Legends team holds one of Talent Development the 10 coveted franchise spots in game In December of 2020, Astralis Group with an international focus and outlook, holding a developer Riot’s LEC league. launched a new talent program, Astralis robust track record of developing esports teams Talent, designed and built to secure a As franchise member, Astralis Group strong internal recruitment platform for and brands with consistent performance and value. partakes in revenues and profits the most talented upcoming players. generated from league TV rights, The Astralis Talent program also serves sponsorship, and related business. Across as sparring and supplement for the Astralis Group tournaments reached record viewership the board, league rights are growing company’s A-teams. Astralis Group is a market leader and a numbers online and on TV broadcasts and rapidly and in 2020, the revenue from pioneer in the growing, global esports the total esports audience grew another these rights grew by 250% compared to Astralis Talent is built to support long industry. With teams in the two biggest 12% to reach an estimated 495 million 2019. term performance and continuity of the esports titles, League of Legends and viewers around the world. A-teams, however, ultimately internal Counter-Strike, alongside the global Commercial platform recruiting and development of esports sports game leader FIFA, we hold A major contributor to the continued Our commercial platform is built on the talent is also a potential commercial franchise rights in the most premium growth in viewership numbers, fan strength of our brand and owned media, asset through reduced transfer costs and international esports leagues; LEC interest and the overall value of the enabling us to reach and engage a potential new transfer income. (League of Legends) and ESL Pro League leagues is the introduction of new, growing, young, commercially attractive, and BLAST Premier (Counter-Strike). structured formats with permanent global fan base. With four dedicated Astralis Talent franchise teams. Transparent tournament coaches, who also have the responsibility We are committed to developing top formats and a guarantee to always Unlike traditional sports, which can be of scouting, the Astralis Talent competitive, international esports present the biggest team brands in the characterized as asset-led sales, esports’ organization reports to the Director of teams and a brand with a large, engaged world is a value driver in all premium digitally native starting point has allowed Sports and works closely with the A-team global fan base to secure and expand leagues of traditional sports and we see Astralis to take an audience-led sales coaches ensuring continuity of values and our position as a preferred esports and the same development in esports. approach from day one. As our audience culture. entertainment brand for commercial continues to grow and our owned media partners, audiences, premium leagues The teams of Astralis Group and the brand footprint expands, the value of our Highly experienced Management and media. itself has long since reached a status, commercial offering scales exponentially. Management of Astralis Group consists where Astralis is expected to partake in We are not limited by geographical of the Board of Directors, an Executive Leagues and Media Rights these premier leagues. Together with 11 boundaries or affiliations and increasingly Management Group and Senior Over the past decade, the global esports other top teams and ESL, Astralis Group we are seeing our commercial partners Management. All are highly skilled, audience has been on a steady climb and is an equal owner of ESL Pro League and activate their partnership with us on a professional managers covering different, the global pandemic only accelerated a franchise member of BLAST Premier, local as well as international basis. specific parts of the overall development this development. During 2020, several both Counter-Strike. Likewise, our and day-to-day business operation. The ASTRALIS GROUP 3/48 ANNUAL REPORT 2020 MANagemeNT'S REVIEW Management in Astralis Group brings COMPANY STRUCTURE experience from top management roles in relevant areas such as Professional Astralis Group A/S was founded Astralis Group A/S Sports, Media, Finance, Communication, on 31 July 2019 and the legal group CVR NO. 40694072 Branding and Business Development. was established 14 August 2019 where Astralis Group A/S acquired The Executive Management Group and Astralis Group Management ApS and Senior Management of Astralis Group has subsidiaries. been strengthened with new additions and today consists of: Astralis Group Management ApS was founded 30 October 2018 as Astralis Group Management ApS • Anders Hørsholt, CEO RFRSH Teams ApS and renamed CVR NO. 39990970 • Jakob Lund Kristensen, co-Founder Astralis Group Management ApS on 8 (100 %) and CRO November 2019. • Jakob Hansen, CFO • Samantha Yu, CMO Astralis Esport ApS was founded 4 • Kasper Sindt, Commercial Director December 2015 as Spirit of Amiga • Kasper Hvidt, Director of Sports ApS and renamed Astralis Esport ApS • Steen Laursen, Director of 21 january 2016. Communication Astralis Origen Future Football Origen Esports ApS was founded 30 Esport ApS Esports ApS Club ApS October 2018 as NewCo Esport ApS CVR NO. 37275506 CVR NO. 40010521 CVR NO. 40900861 and renamed Origen Esports ApS 24 (100 %) (100 %) (100 %) May 2019. Future Football Club is a FIFA team officially announced by the Astralis Group on 1 October 2019. The company was founded 28 October 2019. All subsidiares are fully owned by Astralis Group A/S. ASTRALIS GROUP 4/48 ANNUAL REPORT 2020 MANagemeNT'S REVIEW LETTER TO SHAREHOLDERS Despite the challenges related to the pandemic and During 2020 Astralis built out our Commercial Platform – connecting participation in and commitment to our partners with audiences the move from live to online tournaments, the result each of these three winning leagues. 2020, pandemic or not, demonstrated for 2020 was positive for Astralis Group A/S as the Our franchise rights secure us direct the continued growth and engagement income generated from league TV rights, of esports audiences. During the year, we consequential decrease in Prize Money was fully sponsorship, and related business, as strengthened our digital offerings and well as continued guaranteed exposure to abilities for our commercial partners to offset by an increase in Sponsorships and League record-breaking league audiences. engage with our fans. Revenue. We will in 2021 and beyond continue to Our track record in delivering commercial allocate our intellectual property and value allowed us to end on a strong capital to existing and additional league note by extending and increasing our Our first full year as a publicly traded and with it, growing viewership among franchise rights, where viewership and partnership with Logitech G, our most company was marked by the effects existing as new audiences, alike. We global interest is expected to continue the significant partnership deal to date. of the COVID19 pandemic, but also by capitalized on this trend and continued to significant growth. This came on top of new partnership a strengthening of our core assets: invest into our core product and asset: the consolidation of the Astralis brand across size and breadth of our audience and the all teams, high growth and engagement long-term performance of our teams. in our fanbase, and increased viewership numbers for online channels and TV Leagues & franchises – our long term broadcasts. value driver As evidenced from traditional sports "We will in 2021 and beyond We closed 2019 welcoming a handful of (NFL, NBA, MLB), scarce league franchise new commercial partners, but already rights are historically among the best continue to allocate our intellectual early in 2020 the first signs of the performing asset classes, with large and pandemic caused a downturn in the consistent financial appreciation. For the property and capital to existing global advertising market. As with other three leagues we hold franchise rights – and additional league franchise sports and entertainment categories, LEC, BLAST Premier and Pro League – we esports were affected near-term and see short-term commercial value as well rights, where viewership and global for Astralis this meant that many new as boundless long-term equity growth anticipated partnerships were delayed potential. The former is already proving an interest is expected to continue the until the end of 2020. industry outperforming growth while the latter has been witnessed in a series of significant growth." However, as other sports shut down franchise slot secondary trades driven by entirely, esports quickly demonstrated its significant demand. Nikolaj Nyholm, Founder and Chairman resilience by moving tournaments online, ASTRALIS GROUP 5/48 ANNUAL REPORT 2020 MANagemeNT'S REVIEW agreements with brands like B&O, home four major trophies in a year marked • We introduced Astralis Talent in League Our Organization Hummel and Garmin, category-defining by two players being sent on sick leave, of Legends as a recruitment platform, Very early in the pandemic, we found it brands who for the first time ventured into expansion of the active roster, and in- sparring for the A-team, and for closer prudent to reduce and adjust our costs esports. game role changes. relationships with Nordic esports through a voluntary and temporary grassroots. gradual reduction in salaries.