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INVESTOR PRESENTATION JULY 2020 A MODERN ESPORTS COMPANY

A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

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Page 1: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

INVESTOR PRESENTATION JULY 2020

A MODERN ESPORTS COMPANY

Page 2: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

IMPORTANT NOTICE

The information contained in these slides and the presentation made to you verbally has been prepared by Gfinity plc (Company) solely for your information. The information in these slides and the presentation made to you verbally is confidential and may not be redistributed or passed in whole or in part to any other person or published in whole or in part in any form, for any reason or purpose, and is subject to updating, completion, revision, further verification and amendment without notice.These slides and this presentation have not been approved by the United Kingdom Listing Authority as a prospectus under the Prospectus Rules (made under part VI of the Financial Services and Markets Act 2000 (FSMA 2000)) or by the London Stock Exchange. These slides and this presentation do not constitute or form part of any prospectus, invitation or offer for sale or solicitation or any offer to buy or subscribe for, underwrite, otherwise acquire, or dispose of any securities nor will they or any part of them form the basis of, or be relied on in connection with, or act as any inducement to enter into, any contract or commitment. Recipients of these slides who are considering acquiring the Company’s securities are reminded that in relation to any such purchase or subscription no reliance may be placed for any purpose on the information or opinions contained in these slides or the presentation or on their completeness, accuracy or fairness. These slides are presented purely for information purposes. No undertaking, representation, warranty or other assurance, express or implied, is made or given by or on behalf of the Company or any of its directors, officers, employees, agents or advisers, or any other person, as to the accuracy or completeness of the information or opinions contained in these slides or the presentation. Accordingly, no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions, misstatements, negligence or otherwise for any other communication, written or otherwise, but except that nothing in this paragraph will exclude liability for any undertaking, representation, warranty or other assurance made fraudulently.The information in these slides is subject to updating, revision and amendment. In particular this document anticipates events that have not occurred and in respect of which there are currently no commitments for them to so occur.The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and persons into whose possession this document comes should inform themselves about and observe any such restrictions. By accepting this presentation you represent and warrant that you are eligible to receive this information under local applicable lawsThese slides are for distribution in or from the UK only to persons authorised or exempted within the meaning of those expressions under FSMA 2000 or any order made under it or to those persons to whom these slides may be lawfully distributed pursuant to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (Financial Promotion Order) as amended, including Investment Professionals as defined in article 19(5) and high net worth entities as defined in article 49(2) of the Financial Promotion Order. Persons who do not fall within any of these definitions should not rely on nor take any action upon these slides but should return them immediately to the Company.Neither these slides nor any copy of them may be taken or transmitted into the United States of America or its territories or possessions (United States), or distributed, directly or indirectly, in the United States, or to any U.S. Person as defined in Regulation S under the Securities Act 1933 as amended, including U.S. resident corporations, or other entities organised under the laws of the United States or any state of the United States, or non-U.S. branches or agencies of such corporations or entities. Neither these slides nor any copy of them may be taken or transmitted into or distributed in Canada, Australia, Japan, South Africa or the Republic of Ireland, or any other jurisdiction which prohibits such taking in, transmission or distribution, except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States or other national securities laws.These slides and this presentation contain certain forward looking statements that involve risks and uncertainties. All statements other than statements of historical facts contained in this document, including statements regarding the Company’s future financial position, business strategy and plans, business model and approach and objectives of management for future operations, are forward-looking statements. Generally, the forward-looking statements in this document use words like “anticipate”, “believe”, “could”, “estimate”, “expect”, “future”, “intend”, “may”, “opportunity”, “plan”, “potential”, “project”, “seek”, “will” and similar terms. The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward looking statements in these slides and this presentation are based on the beliefs and assumptions of the Company’s directors and information only as of the date of this document, and the forward looking events discussed in this document might not occur. Therefore, investors should not place any reliance on any forward looking statements. The Directors undertake no obligation to publicly update any forward looking statements, whether as a result of new information, future earnings, or otherwise.By accepting receipt of this document, you agree to be bound by the limitations and restrictions set out above.

GFINITY ESPORTS 01

Page 3: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

WE BELIEVE IN THE POWER OF GAMING

TO ENTERTAIN AND INSPIRE A NEW

GENERATION

GFINITY ESPORTS 02

Page 4: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

1. Gfinity Digital Media Group

2. Joint Ventures/Partnerships

3. Building communities for others utilising owned Tech IP

INVESTMENT SUMMARY

• A market leader in large and fast-growing sector

• Business model evolved to reflect rapidly developing and COVID 19 impacted market

• Clear plan for growth and monetization - owned; co-owned; and fee plus

• Sharpened strategic focus in 3 areas where we have traction and competitive advantage, each with strong revenue levers:

• Underpinned by continued focus on consumer insights

• Targeting move into profitability in Q1 2021

INVESTM

ENT SU

MM

ARY

GFINITY ESPORTS 03

Page 5: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

GFIN

ITY

• Wholly owned, gamer centric websites

• 10 million users

• 641% growth in 12 months

• Optimised for ad serving. Q3/Q4 2020 - bumper period for the industry due to launch of new games consoles

• Continue to grow existing sites

• Innovate - 3 new language sites added

• New gamer hobby sites

• New advertising and video service delivery partners

• CPM – programmatic static and video ads

• CPA – affiliate sales; e-commerce

• Brand partnerships – site takeovers

• Ideas that capture the imagination

• Partners that value and benefit from our expertise

- creative; production; game operations; community building; commercial

• True partnership – shared investment, paid for services, shared risk, shared commercials

• Abu Dhabi Motorsport Management – 5 year partnership

• Global Racing Series – First product, V10 R League

• New innovative formats, designed for broadcast

• Top racing teams; global distribution; commercial partnerships

• Fee for services

• Shared commercial rights, 50-50

• Content rights; sponsorship; advertising; Ancillary revenues (in-game purchases)

• Commercially viable programmes for publishers, sports rights holders, brands and media organisations

• Utilise company owned tech IP

• Design esports programmes and competitions

- virtual and on-line

- reason to care content

• Community building - written and video content

• Formula 1 esports – multi-year agreement

• ePremier league – on-line and offline events

• BT Sport – world class production

• Activision Blizzard – UK’s only Call of Duty World League event

• Tech IP - Tournament platform; Race Control; forums and chat

• Service fee

• License fee

• Limited commercial rights – sponsorship commission

WHAT WE DO

DIGITAL MEDIA GROUP (OWN) JV/PARTNERSHIPS (CO-OWN) BUILD COMMUNITIES FOR OTHERS (SERVICE/LICENSE BASED)

DEVELOP

DELIVERY

MONETISATION

GFINITY ESPORTS 04

Page 6: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

STRATEGY IN ACTION – DIGITAL MOTORSPORT

• eRacing content across Gfinityesports.com and Realsport101.com• Opportunity to create dedicated site for eRacing enthusiasts• Driving commercial value

DIGITAL MEDIA GROUP

JOINTLY OWNED PROPERTIES

BUILDING DIGITAL AUDIENCE

• Launch of Global Racing Series in partnership with ADMM• First product - V10 R League - to be broadcast in September 2020• Top teams and drivers• Global distribution• Significant sponsorship opportunities• Gfinity paid for production costs• 50/50 ownership of commercial rights

• Multi-year partnership with F1 for its Esports Series

• Virtual GP series delivered audience of >30 million during COVID 19 lockdown

• Services expanded to include behind the scenes content series and limited commercial rights

• Extension of partnership to include Formula 2 racing

DIG

ITAL M

OTO

RSPORT

GFINITY ESPORTS 05

Page 7: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

GFINITY DIGITAL MEDIA

Large and rapidly growing community of gamers, coming direct to a network of Gfinity owned platforms for news and content. Monetised via programmatic advertising, affiliate deals, e-commerce and brand partnerships.

JUNE 2019 JUNE 2020 THE ‘FUTURE’

Unique visitors - 1.3m

Pages viewed – 3.6m

Reach via social platforms – 5.1m

2 websites:

- Gfinityesports.com

- RealSport101.com

• English language only

• Low level CPM revenue

Unique visitors – 10m

Pages viewed – 32m

Reach via social platforms – 21.7m

3 websites:

- Gfinityesports.com

- RealSport101.com

- Stealthoptional.com

• Partnerships with Venatus (add serving); Trackonomics (e-commerce); Connatix (video platofrm)

• Launch of Gfinity+ to deepen engagement

• 4 languages: English, Spanish, Portuguese, Arabic

• Significantly increased CPMs

• Video ad partner and Affiliate deal networks integrated.

• Low level Brand partnerships

Unique visitors – 50m

Pages viewed – 200m

Reach via social platforms – 50m

Network of gamer sites

• Multiple languages

• Full monetization via CPM, CPA and brand partnerships.

• Over £2m expected in FY21

• Deeper engagement, through Gfinity+: rewards, chat and gameplay. Driving more time on site, creating more advertising opportunities

GFIN

ITY DIG

ITAL GFINITY ESPORTS 06

Page 8: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

KEY DEVELOPMENTS IN SECTOR

Young consumers have said no to passive entertainment, traditional television. And a big yes to interactive entertainment, which is gaming. Gaming is now fully mainstream and it is massive

*Newzoo 2020 Global Games Market Report

**Newzoo 2019 Global Esports Market Report (2020 projections).

• Gaming activity significantly increased during lockdown period• Move away from major in person events to online activity and virtually produced content• Entering into peak period for gaming related spend with new console launches and related release of new titles• Significant growth in traffic to gamer centric/hobbyist websites

2.7bn Global gamers

$159bn Global gaming

market*

9.3% YoY growth

518m Global esports

audience

$1.3bn Global esports

market**

22% YoY growth

GFINITY ESPORTS 07

Page 9: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

GFINITY SINCE MARCH 2020

- Virtual Grand Prix series created and launched at less than 1 month’s notice

• Major restructuring of business, targeting overhead cost reduction of >60%

• Multi-year deal with Formula 1

• 5 year partnership with Abu Dhabi Motorsports Management

• Growth of 641% across FY20 in monthly users on owned Digital Media Platforms

- Signature of deals with regular advertising partner, video advertising partner and affiliate network partner to drive revenue

- Launch of Gfinity+ to deepen engagement and drive data capture

• Production of first content series with BT Sport

GFIN

ITY 2020

• £2.25m raised through placing in April 2020

GFINITY ESPORTS 08

Page 10: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

FINANCIAL OVERVIEW

• Targeted reduction in overhead costs from £8.5m p.a. down to c. £3m p.a.

- Reduced exec overhead- Significant reduction in headcount- Reduction in fixed infrastructure costs

• Significant increase in gross profit in H1 FY20, driven by higher margin revenue from Digital Media platforms, online programme delivery, content creation and strategic consultancy.

• COVID 19 had an impact on timing of live esports events and on consumer brands willingness to commission live events and activiation. Impacted FY20 H2 revenue. Softness expected to continue in these areas into FY21 H1 *Opex figures shown represent adjusted Operating expenditure, prior to

deduction of depreciation, amortization and share option charge

£4.6m

£8.7m

£9.6m

£8.5m

>60% reduction

FY1 7 FY1 8 FY 19 January 2020 run rate

FY 21 Medium term

Adjusted Opex*

Targeting move into profitability on month on month basis in Q1 of 2021

• COVID 19 lockdown had a positive impact on the growth of the Gfinity community. Significant increase in traffic. Gfinity Digital Media group launched, sites optimised for serving ads and e-commerce and leading advertising partners signed. £2 million of revenue projected for FY21 (£250,000 in FY20)

• Company well positioned to grow existing relationships, sign new joint venture partnerships and speed up the growth of the Gfinity Digital Media group

GFINITY ESPORTS 09

Page 11: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

CORPORATE OVERVIEW

SHARES

Significant Shareholders:

- Charles Street Int’l Holdings

- John Story

- Nigel Wray

- Canaccord Genuity

24.0%

5.4%

4.8%

4.5%

FURTHER FINANCIAL AND CORPORATE INFORMATION

GFINITY PLC:

https://www.gfinityplc.com/investors/overview

- Total ordinary shares in issue:

- Warrants outstanding:

- Employee options:

- Fully diluted shares in issue:

741.7m

187.9m

69.9m

999.5m

CORPO

RATE OVERVIEW

GFINITY ESPORTS 10

Page 12: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

IN SUMMARYIN

SUM

MA

RY

1. Gfinity Digital Media Group

2. Joint Ventures/Partnerships

3. Building communities for others utilising owned Tech IP

• A market leader in large and fast-growing sector

• Business model evolved to reflect rapidly developing and COVID 19 impacted market

• Clear plan for growth and monetization - owned; co-owned; and fee plus

• Sharpened strategic focus in 3 areas where we have traction and competitive advantage, each with strong revenue levers:

• Underpinned by continued focus on consumer insights

• Targeting move into profitability in Q1 2021

GFINITY ESPORTS 11

Page 13: A MODERN ESPORTS COMPANY...The Company’s actual results could differ materially from those anticipated in the forward looking statements as a result of many factors. The forward

THANK YOU

JOHN CLARKEChief Executive [email protected]

JON HALLChief Finance and Operating Officer [email protected]