European Entertainment Group AB (publ) releases its Q2 2026 report

Quarter 2 Report 2026

Key Data Summary of the second Quarter and the full year 2026

1) Adjusted EBITDA excludes non-recurring expenses.

2) Comparative adjusted EBITDA has been revised to reflect additional pro forma adjustments identified during the period. Comparative net leverage has therefore also been updated.

The related reconciliations and definitions for the above key data summary are provided on pages 28 to 30 of this report.

Significant events during the quarter

• The Group successfully completed the in-housing of the final part of its Online Gaming operations previously operating on a third-party platform, relating to the ComeOn! Netherlands business. The migration is expected to improve product flexibility, strengthen the customer value proposition and increase operational efficiency. The transition is also expected to generate annualised cost savings exceeding EUR 1 million through reduced platform fees previously payable to Bragg.
• The Swedish Gambling Authority (Spelinspektionen) initiated a supervisory review involving several licensed operators in the Swedish market, including certain brands operated by the Group. The Group is cooperating fully with the relevant authorities and continues to maintain a strong focus on responsible gambling and regulatory compliance. At this stage, management is unable to reliably assess any potential financial or operational impact, if any.
• Highlight Games' platform received official certification in Italy, a significant milestone that enables the phased migration of all operators onto the Group's own platform over the coming 6 to 8 months, beginning with the first LALIGA-branded channel launching in Eurobet retail in July. SNAI is expected to follow by the end of 2027 in connection with its technology merger with SISAL (Flutter Group). Based on the Group's latest forecast, the Italian platform transition is expected to contribute overEUR 2.0 million of incremental EBITDA by 2028.

Significant events after the end of the quarter

• No significant event to report after the end of the quarter.

CEO comments

This was a mixed quarter. Operating Revenues was EUR 89.2 (91.0) million and Adjusted EBITDA EUR 22.3 (26.7) million at a 25% margin. Parts of the Group are performing strongly and accelerating; others require continued attention. Excluding Online Marketing, Operating Revenues and Adjusted EBITDA grew by EUR 5.6 million and EUR 2.4 million YoY respectively. We understand what is driving performance in each business, and we are acting on it.

Online Gaming delivered its strongest quarter to date. Revenue grew 5% to EUR 68.6 (65.5) million, and 13% on a like-for-like basis excluding the exited German operations and including the Netherlands. Adjusted EBITDA rose 19% to EUR 17.8 (15.0) million at a 25.9% margin, with revenue up 11% sequentially. Deposits reached EUR 231.1 (229.3) million and active customers grew 9% to 384,945, an all-time high. The FIFA World Cup was a defining moment for our sportsbook, with all key metrics at record levels and 21,030 new depositing customers, ahead of both plan and Euro 2024. Sportsbook was 17% of first-half revenue and we remain on track to double the vertical by 2029. We completed the in-housing of our final third-party platform operations, and all brands now run on our own platform for casino and sportsbook. ComeOn! Netherlands grew 22% sequentially following migration, generating annualised savings above EUR 1 million, with the Netherlands up 81% year-on-year in the quarter — evidence our platform and operating model deliver scale and margin even in a high-tax jurisdiction.

Our ongoing market portfolio review has cost reported revenue in the short term, principally through the German exit, and we regard that as the right trade: we concentrate capital where we can build durable positions. 77% of Group revenue and 82% within B2C is now locally regulated, rising above 90% on award of our Finnish licence ahead of the July 2027 opening.

Our Game Development businesses are at different points in their cycles, and both progressed during the quarter. Highlight Games delivered a record quarter, with revenue up 8% to EUR 6.0 million and Adjusted EBITDA up 17% to EUR 3.3 million at a 55% margin, and Italian certification paves the way to in-house content provision worth approximately EUR 2.0 million of annualised EBITDA by 2028. Yggdrasil is in transition, with June its first positive EBITDA month of the year, and Game-in-a-Box has moved into commercial execution — first studio partner signed, two more in final stages — operating at scale from the fourth quarter. Together the segment now has both current earnings and a credible growth path.

Online Marketing is where the work is. Revenue declined 57% to EUR 5.6 (13.0) million as ranking volatility and SEO and DMCA-related disruption weighed on traffic. We are not explaining this away. We know the cause, and we know the sequence in which it repairs: traffic recovers first, new depositing customers follow, and fixed fees follow those, because partners reprice placements only once delivered volumes prove consistent. Reported revenue therefore improves later than underlying performance. Traffic and rankings began recovering during the quarter, June delivered month-on-month growth of 8% in revenue and 32% in Adjusted EBITDA, and the completed restructuring has left a lower cost base that kept the segment Adjusted EBITDA positive throughout. Alongside technical remediation, we are shifting the model from static search-dependent sites toward community, membership and owned player relationships, supported by our AI Content Studio.

We end the quarter owning more of our technology, earning more in regulated markets, carrying a lower cost base and holding clear opportunities in Finland, sportsbook, Italy and studio licensing.

Operating Activities of the Group during the quarter

The Group continues executing a strategy centred on operational control, proprietary technology, expansion within regulated markets and long-term margin enhancement. The focus remains on sustainable growth, resilient cash generation and operational efficiency across all business segments.

A key strategic priority across the Group is the in-housing of critical technology and operational capabilities, particularly within sportsbook, content production and platform operations. This reduces reliance on third-party suppliers, strengthens product differentiation and improves margin control.

The Group is also continuing to expand its multi-brand and cross-sell strategy supported by localised market propositions designed to improve customer segmentation, retention and marketing efficiency.

Within content and affiliate operations, focus remains on scalable technology platforms, diversified monetisation models and AI-driven operating efficiencies intended to improve resilience and reduce structural dependency on legacy acquisition methods.

The Group continues prioritising future regulated market opportunities, with Finland representing one of the most strategically important long-term growth drivers ahead of the expected market opening in July 2027.

Collectively, these initiatives support:

• greater proprietary technology ownership,
• structural margin improvement,
• regulated market expansion,
• operational resilience,
• and long-term value creation.

Product and Technology Development

Product and technology capabilities remain central to the Group’s strategy and long-term competitive positioning.

The Group continues investing in proprietary platforms, in-house content development and data-driven operational capabilities designed to support scalability, margin improvement and product differentiation across regulated markets.

Within Game Development, Yggdrasil continued progressing the rollout of its proprietary Game-in-a-Box (“GIAB”) platform. GIAB is designed to accelerate game development cycles, materially reduce production costs and create additional scalable licensing opportunities for external studios.

Eight gameshave already launched successfully on GIAB with stable technical performance, and one of the titles launched is already ranking among the business’s strongest-performing releases.

The Group’s technology infrastructure includes:

• proprietary gaming and sportsbook platforms,
• real-time player analytics capabilities,
• in-house trading operations,
• and scalable content distribution systems.

The modular architecture enables efficient rollout of new products, brands and regulated market launches while supporting high transaction volumes and operational stability.

Management continues prioritising:

• customer-centric product development,
• scalable infrastructure,
• operational efficiency,
• security and compliance,
• and increased proprietary ownership across critical technology functions.

Second Quarter Review

Group operating segments

The Group operates through three complementary segments:

• Gaming (B2C) – Online casino and sportsbook operations under the ComeOn Group
• Game Development (B2B) – Proprietary casino and virtual sports content via Yggdrasil and Highlight Games
• Online Marketing (B2B) – SEO-driven affiliate marketing platform through Game Lounge

This diversified model provides multiple revenue streams, geographic spread across Europe, and operational resilience supported by proprietary technology and data capabilities.

Online Gaming

The Online Gaming segment remains the Group’s core earnings contributor, operating 18 brands across six European markets and Ontario with a strong focus on regulated jurisdictions.

The segment continued benefiting from:

• proprietary technology infrastructure,
• in-house sportsbook capabilities,
• strong cross-selling,
• and data-driven customer acquisition and retention tools.

The Group continues increasing its exposure to regulated markets, improving revenue quality, predictability and long-term sustainability.

The Group also successfully submitted its Finnish licence application in March-26 ahead of the expected market re-regulation effective 1 July 2027. Finland online gaming market represents a highly attractive long-term growth opportunity given the Group’s more than 15-year operating history, strong local brands and established customer relationships in the market.

Revenue of the Online Gaming segment during the quarter amounted to EUR 68.6 (65.5) million, an increase of 5% compared to the corresponding quarter in 2025 (+13% excluding the discontinued German market and including the Netherlands business).

Online Gaming Metrics

Online Gaming: Quarterly Revenue by Region (EURm)

Customer Activity

The player base remains highly recurring in nature, with the majority of deposits generated by returning customers.

Customer deposits during the quarter amounted to EUR 231.1 (229.3) million, an increase of 1%, while active customers increased by 9% to 384,945 (354,225).

Customer Deposit by Quarter (in EURm)

Active Customer by Quarter (in thousands)

Online Marketing

The Online Marketing segment continued to face operational headwinds during Q2 2026, as ranking volatility and continued SEO disruption weighed on traffic and conversion performance across parts of the portfolio. Performance nevertheless stabilised through the quarter, with June delivering month-on-month growth of 8% in revenue and 32% in Adjusted EBITDA — the first meaningful sequential improvement since the disruption began.

Fixed fees remained the most directly affected revenue line, as SEO and DMCA-related disruption constrained traffic visibility. Organic recurring revenue proved more resilient, supported by the recovery at Meneer Casino, which delivered its strongest monthly result since October 2025.

Management continued executing a broad strategic transformation programme focused on:

• cost optimisation,
• AI-driven automation,
• CRM database growth,
• performance marketing expansion,
• and traffic diversification initiatives.

The restructuring programme was completed during the quarter and the resulting reduction in the fixed cost base is now visible in the results, with personnel costs materially below both budget and prior year. This allowed the segment to remain Adjusted EBITDA positive throughout the quarter despite the revenue shortfall.

The AI Content Studio progressed from development into internal rollout, with the platform used to publish its first live market content during the period, and security and compliance validation underway ahead of wider adoption. The Svea 2.0 CRM initiative advanced into user-facing functionality, with member profiles and tournaments moving into internal testing, alongside a refreshed brand identity and the appointment of a Head of Nordics to strengthen commercial leadership in the Group's largest market. Performance Marketing delivered a positive gross contribution in June across four live campaigns, with the UK campaign generating the strongest return.

Management believes the strategic shift toward CRM ownership, AI-driven content production and diversified acquisition channels will improve long-term resilience and reduce dependency on organic search traffic.

Revenue of the Online Marketing segment during the quarter were EUR 5.6 (13.0) million, a decrease of 57% compared to the same quarter in 2025.

Online Marketing Metrics

Online Marketing: Quarterly Revenue by Region (EURm)

Game development

Performance within the Game Development segment during the quarter was characterised by two contrasting dynamics:

Highlight Games continued to deliver a strong performance, with Q2 revenue of EUR 6.0 million representing an increase of 8% compared to the same quarter in 2025. Q2 Adjusted EBITDA of EUR 3.3 million was also up 17% compared to the same quarter in 2025, corresponding to a margin of 55%, supported by a record performance in Italy where the business continue to take market share. Highlight Games' platform was officially certified in Italy during the quarter — a significant milestone — with the first LALIGA-branded channel launching in July and all operators transitioning onto the Group's platform over the next 6 to 8 months. The Group's latest forecast indicates the Italian platform switchover will add over EUR 2.0 million to EBITDA in 2028

Yggdrasil. Q2 reflected the transitional phase of the segment's platform strategy. Net revenue was broadly stable sequentially, and the quarter marked an inflection point, with June delivering the segment's first positive EBITDA month of the year.

The central strategic priority is Game-in-a-Box (GiaB), the Group's studio-enablement platform. GIAB moved from development into commercial execution during the quarter and is expected to be operating at scale from Q4 2026. The commercial pipeline is now converting: the first new studio partner contract was signed in Q2, two further partners are in final contract stages, and new onboarding tooling has entered testing ahead of wider rollout. Management's target is five active Masters partners, each delivering approximately one game per month, supporting a step-up in release cadence from Q4-26.

For the Group, GiaB is a shift toward a more scalable, capital-light model: faster launch cycles, lower production costs per title, higher long-term margins, and a new external licensing revenue stream that does not require proportionate investment to grow.

Revenue of the Game Development segment during the quarter were EUR 12.6 (14.6) million, a decrease of 14% compared to the same quarter in 2025.

Game Development Metrics

Game Development: Quarterly Revenue by Region (mEUR)

Financial Development

Group Revenue

Quarter two total operating revenue amounted to EUR 89.2 (91.0) million, a decrease of 2%. During Q2 2026, EUR 86.0 (91.0) million of revenue originated from the gaming operations while the remaining EUR 3.2 (0.0) million pertained mainly to recharges of costs to associate companies Tulipa Ent Limited and Godwits Limited both licensed and operating in the Netherlands.

Total revenue from gaming operations (excluding other operating revenue) decreased by 6% and was EUR 86.0 (91.0) million, corresponding to 96% (100%) of the total Group revenue.Inter-segment revenue amounted to EUR 0.8 (2.1) million during the quarter. The two tables below show gaming revenue including inter-segment revenue.

Revenue including inter-segment revenue by Segment

Revenue including inter-segment revenue by Geographical Location

Other operating revenue

Other operating revenue comprises income arising from transactions between the Group and its associate companies, recognised in line with the Group’s accounting policies and relevant IFRS requirements.

These revenues typically relate to services provided, the use of proprietary technology, or other operational arrangements undertaken with associates in the ordinary course of business. All such transactions are carried out on an arm’s‑length basis. In accordance with IFRS, these amounts are not eliminated on consolidation to the extent that they involve associate companies rather than subsidiaries.

Other operating revenue amounted to EUR 3.2 (0.0) million, an increase of 100% composed of recharges of costs associated to associate companies.

Expenses

Cost of sales amounted to EUR 27.2 million (27.2) in the quarter, representing 31% of total revenue.

Gross profit amounted to EUR 62.0 million (63.8), corresponding to a gross margin of 70% (70%).

Total operating expenses were EUR 53.6 million (52.2), reflecting continued investment in growth initiatives and operational capabilities.

Marketing expenses totalled EUR 18.1 million (15.5), representing 20% (17%) of revenue, reflecting investment initiatives in Ontario, Denmark and launch of sixth brand in Sweden within the online gaming segment.

Personnel expenses amounted to EUR 15.6 million (16.9), a decrease of 8%, mainly driven by restructuring within the Online marketing segment. The average number of full-time employees during the quarter was 667 (719).

Other external expenses amounted to EUR 10.5 million (10.0), representing an increase of 5%, mainly driven by higher professional and operational support costs.

Capitalised development costs amounted to EUR 3.2 million (3.1), reflecting continued investment in product and technology development.

Other operating expenses amounted to EUR 0.2 million (0.2), remaining broadly unchanged compared to the same quarter in 2025.

Depreciation, amortisation and impairment amounted to EUR 9.2 million (9.6), representing a decrease of 4%.

Expenses as a percentage of total revenue

Operating Profit and Net Profit

Operating profit amounted to EUR 11.6 (14.7) million, a decrease of 21%.

Net financial expenses were at EUR 29.0 (32.2) million and primarily consist interest expenses, leasing interest expense and currency exchange differences.

Loss for the period was at EUR 12.6 (16.9) million, a decrease of 25%, mainly reflecting lower net financial expenses and a higher tax credit compared to the same quarter in 2025.

Financial Position

Cash and cash equivalents amounted to EUR 38.0 (45.1) million at the end of the period. Customer balances and reserves for accumulated jackpots amounted to EUR 15.6 (14.6) million. Regulatory requirements in gaming oblige the Group to reserve funds to meet customer balances and accumulated jackpot obligations. The Group reported EUR 15.6 (17.7) million in current receivables from payment service providers for unsettled customer deposits. The net debt of the Group amounted to EUR 562.6 (550.9) million at the end of the period.

Cash Flow

Cash flow from operating activities during the second quarter amounted to EUR 13.3 (19.8) million. This includes negative effect from changes in working capital of EUR 4.7 (positive effect of 1.4). Cash outflow from investing activities was EUR 4.4 (4.3) million, mainly consisting of acquisitions of intangible assets. Cash outflow from financing activities amounted to EUR 14.3 (3.5) million, mainly driven by interest payment and leases.

External Financing

At the end of the period the Group had external financing amounting to EUR 585.0 million (nominal), which consists of a bond. The bond matures on 29th September 2030. The bond bears interest at a floating rate determined as the 3‑month EURIBOR plus a fixed margin of 7.25%. Based on the prevailing 3‑month EURIBOR applicable for the period from 20 April 2026 to 20 July 2026 at approximately 2.238%, the resulting interest rate amounts to 9.488%, which is consistent with the current coupon for this bond as reported by market sources for this issue. Prevailing rates change based on the movements in the underlying EURIBOR benchmark.

The carrying amount of the bond recognised in the financial statements is measured at amortised cost, which reflects the deduction and subsequent amortisation of directly attributable transaction costs.

Equity

The Group’s equity was EUR -99.5 (-60.9) million as at the end of the period.

The movement in the translation reserve reflects the impact of the subsidiaries' functional currencies against the Group's presentation currency. This adjustment offsets unrealised exchange movements recognised in the Statement of Profit or Loss and Other Comprehensive Income on foreign currency assets and liabilities upon translation into the Group's presentation currency.

Risks

The Group’s operations are exposed to certain risks that could have an impact on the earnings or financial positions. The most significant risks are financial risks and market risks; these are described in more detail in the latest annual report.

Regulatory Update

European Entertainment Group (“EEG”) operates in a highly regulated industry, with gambling activities subject to national licensing regimes and ongoing regulatory oversight across multiple jurisdictions.

There is no unified EU-wide regulatory framework for online gaming; instead, each country governs its own licensing, taxation and compliance requirements. As a result, the Group must comply with diverse and evolving regulatory standards relating to:

• Licensing and operational authorisations
• Gaming taxes and point-of-consumption taxation
• Responsible gaming and player protection
• Anti-money laundering (AML) requirements
• Marketing and advertising restrictions

Geographic Licensing Footprint

The Group maintains a comprehensive global licensing portfolio covering both B2C and B2B activities.

This licensing structure allows the Group to distribute gaming content and operate consumer-facing businesses across regulated jurisdictions.

Revenue from Regulated Markets

The Group has materially increased its exposure to locally regulated markets in recent years.

As of the latest period:

• 77% of Group revenue is generated from locally regulated markets.
• The proportion rises further when including Finland and Norway. Finland has enacted new legislation to transition to a local licensing framework, with licence applications accepted starting from March 2026. In Norway, there is increased pressure to follow suit and transition toward an open licensing framework.

The strategic focus on regulated markets enhances:

• Revenue visibility and predictability
• Regulatory stability
• Long-term licence sustainability
• Reduced legal and enforcement risk

For the B2C segment (ComeOn Group), the share of locally regulated revenues is even higher at 80% (82% including Netherlands), reflecting a deliberate de-risking strategy.

Regulatory Developments & Market Trends

Across Europe, there is a continued structural shift toward national licensing regimes. Key recent and upcoming developments include:

Sweden

The Group successfully secured renewed five-year Swedish licences, valid until October 2030, together with one additional licence supporting the launch of a sixth brand in the market (April-26), further advancing our multi-brand strategy.

Effective April 2026, Sweden introduced restrictions prohibiting gambling transactions financed through certain credit arrangements. Based on the Group’s current payment mix and customer behaviour, management expects the operational and financial impact to be minimal (less than 0.3% of card payments in Sweden).

Netherlands

The increase in gaming tax in the Netherlands became effective from January 2026 and is expected to negatively impact margins in the short term. Management continues implementing optimisation initiatives intended to mitigate the impact over time.

Finland

Finland’s transition from a monopoly structure toward a regulated licensing framework effective 1 July 2027 represents one of the Group’s most significant long-term growth opportunities.

During March-26, the Group successfully submitted its Finnish licence application. EEG has operated in the Finnish market for more than 15 years through well-established local brands and believes its existing market position, customer base and operational experience provide a strong foundation for future regulated growth.

Management expects the Finnish market over time to become comparable in size and profitability to the Group’s current Swedish Online Gaming operations.

Denmark

Proposed regulatory changes focus primarily on advertising restrictions and enhanced consumer protection measures. Based on the Group’s current operating model, management does not expect a material financial impact.

Ontario

Ontario plans to introduce a centralised self-exclusion system during 2026. Based on similar frameworks in other regulated markets, management expects limited operational impact.

Italy

The new Italian licensing framework is expected to accelerate market consolidation and strengthen barriers to entry. The Group’s exposure remains primarily within Game Development and Online Marketing.

UK

The UK increased Taxation in remote gaming from April 2026 onwards. EEG currently has no exposure to the UK within Online Gaming and only limited exposure within Game Development and Online Marketing.

Other information

Parent Company

The parent company, European Entertainment Group AB (publ), operates as a strategic holding company that provides overall direction, governance, and support to its portfolio businesses.

Revenue in the Parent Company for quarter amounted to SEK 1.2 (0.9) million and the net loss was of SEK 303.0 (350.3) million.

The parent company’s cash and cash equivalents amounted to SEK 1.1 (0.6) million at the end of the period.

Employees

As at the end of the period, EEG had 701 (719) employees of which 687 (702) are in full-time positions. The average number of full-time equivalents for the quarter was 667 (719).

Stockholm, August 28, 2026

Itai Frieberger
CEO

This interim report has not been subject to review by the Company’s auditor.

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement of Cash Flows

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Changes in Equity (continued)

Condensed Consolidated Statement of Changes in Equity (continued)

Condensed Parent Company Income Statement and Other Comprehensive Income

Condensed Parent Company Balance Sheet

Revenue by Product

The table above shows the Group’s consolidated revenue divided based on the type of product. Online gaming and Game Development segments are engaged in both casino and sportsbook whilst the Online Marketing segment is exclusively engaged in casino activities.

Notes to Financial Statements

Note 1. Accounting Principles

European Entertainment Group AB (publ) prepares its financial statements in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union. The Group’s interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The accounting policies applied are consistent with those used in the 2025 annual report, except for the change in accounting policy described below.

Note 2. New standards and interpretations not yet adopted by the Group

IFRS 18 Presentation and Disclosure in Financial Statements is applicable for financial years beginning on or after 1 January 2027 and has been adopted by the EU. IFRS 18 will replace IAS 1 Presentation of Financial Statements and introduce new requirements aimed at enhancing comparability in financial performance reporting across similar companies and providing users with more relevant information and transparency. IFRS 18 introduces, among other things, new structural requirements for the statement of profit or loss and new disclosure requirements for certain performance measures. Although IFRS 18 will not affect the recognition or measurement of items in the financial statements, its impact on presentation and disclosures is expected to be significant, particularly in relation to the income statement and management‑defined performance measures. Management is currently assessing the exact implications of applying the new standard to the Group’s consolidated financial statements.

Note 3. Borrowings

On 30th September 2025, the Company issued a listed bond amounting to EUR 585.0 million under the framework of EUR 800 million. The bond matures on 29th September 2030 and bears interest at a floating rate equal to three‑month EURIBOR plus a fixed margin of 7.25%. The applicable interest rate varies in line with movements in the underlying EURIBOR benchmark.

The carrying amount of the corporate bond, which are accounted for as financial liabilities at amortised costs have no significant difference towards the fair value.

Note 4. Related Party Transactions

No significant related‑party transactions took place during the period that affected EEG’s financial position or performance. The nature and extent of transactions with related parties are consistent with those disclosed in the 2025 annual report.

Note 5. Seasonality

The EEG’s group operations are subject to seasonal fluctuations driven primarily by end‑user activity patterns. Historical data consistently shows a pronounced increase in user traffic during the first quarter of each year, a trend that aligns with a rise in the number of active customers and higher levels of customer deposits. These seasonal effects contribute to stronger operational performance toward year‑end, reflecting heightened engagement and transaction volumes during this period.

Consolidated Key Ratios

The company reports certain financial metrics in the interim report that are not defined under IFRS. These alternative measures are included because the company believes they offer valuable additional insight for both investors and management when assessing the company’s financial performance and overall position. However, since companies may calculate these metrics differently, they may not be directly comparable with those used by other organizations. Therefore, they should not be considered replacements for IFRS-defined measures. Unless otherwise indicated, the tables below contain metrics that are not defined according to IFRS. Definitions and explanations can also be found on the final page of the report.

Reconciliation of selected key ratios not defined in accordance with IFRS

Reconciliation of selected key ratios not defined in accordance with IFRS (continued)

1) In the comparative period and year interest expense leasing liability was within interest expense (external)

Reconciliation of selected key ratios not defined in accordance with IFRS (continued)