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FUNCOM’S FOURTH QUARTER 2018 FINANCIALS

Fourth quarter 2018

* Revenues for the quarter increased by 166% to USD 8 354 thousand, versus same period last year (3 142)

* EBITDA increased by 841% to USD 4 702 thousand (499)

* EBIT increased by USD 1 879 thousand to USD 1 426 thousand (-453)

* The equity increased by 230% to USD 45 175 thousand (13 678)

* The cash position increased by 157% to USD 19 902 thousand (7 731)

* Cash flow from operating activities for the quarter increased by 41% to USD 2 960 thousand (2 097)

Full year 2018

* Revenues increased by 46% to USD 33 776 thousand compared to last year (23 162)

* EBITDA increased by 78% to USD 17 690 thousand (9 937), the highest Funcom EBITDA to date

* EBIT increased by 53% to USD 10 166 thousand (6 639), the highest Funcom EBIT to date

* Cash flow from operating activities increased by 65% to USD 17 196 thousand (10 397)

* Earnings per share (basic) were USD 0.08, NOK 0.68

Highlights

* 2018 is the most profitable year in Funcom history

* Successful Mutant Year Zero: Road to Eden launch. Established Funcom position as a reputable publisher of third party developed games

* Acquisition of 50.1% of Lisbon based ZPX. A game services and development provider to secure production capacity at competitive rates

* Promising pipeline with 5 confirmed new games in various stages of development:

o Conan Unconquered – 2Q19 release

o Rock Pocket, Funcom IP – Halloween 2019 release

o Funcom North Carolina, Heroic Signatures IP, multiplayer Co-op shooter

o Funcom Oslo, Conan single player

o Funcom Oslo, Open world multiplayer (based on the DUNE intellectual property)

* Exclusive gaming partnership established with Legendary Entertainment for the creation of a minimum of 3 games based on the DUNE Intellectual Property over the next six years, on PC and Console

Words from the CEO

“2018 is our best year to date. A year marked by the full release of Conan Exiles, by the acquisition of 50% of the IP rights for Conan and other properties for games, by the investment from Swedbank Robur to fuel our publishing strategy and by the launch of our first published game under this strategy – Mutant Year Zero: Road to Eden.

It has been a hectic year, with more activities and projects than ever before. We are happy to see the support of partners, investors and shareholders for our strategy of becoming a key player in niches and game genres that are too small for the big publisher but too difficult to reach for small independent studios. We truly believe we are well positioned to achieve this, and our multiple ongoing projects on several fronts are a natural risk mitigation mechanism that still keeps the very strong upside these various niches represent.

This is only the beginning of our journey, and we believe 2019 will be a year where exciting projects and opportunities will present themselves, the fruits of which we will see in 2020 and beyond.

We can see a glimpse of that future already, with five new confirmed games in the pipeline and a few new games being considered. Several small internal activities are planned to boost revenue on existing games through DLCs, additional platforms/stores and partnerships. We also see it in our second acquisition in one year, the Lisbon-based studio ZPX. A great way to secure production capacity while keeping costs under control.

We are happy to see that 4Q18 and the full year of 2018 ended with the successful release of Mutant Year Zero: Road to Eden. A great game that was well received, contributed significantly to the 4Q18 financials and, most importantly, to our reputation as a publisher that works hard to give a game its best chance at succeeding.

Finally, we are very excited to announce an exclusive gaming partnership with Legendary Entertainment to develop a line of video games based on the works of Frank Herbert’s DUNE. DUNE is one of the world’s best-known science fiction universes and a personal favourite of mine. To work on DUNE games is a dream come true for many of us in Funcom. We will talk more about what we will do in this fantastic universe in the future.

Funcom is stronger than ever. With an incredibly exciting pipeline of games, and by continuing to successfully execute on our strategy, it is my conviction that we will lift the company to new heights.”

Rui Casais, Chief Executive Officer

The report and presentation can be downloaded from the Company’s website: https://investors.funcom.com/financial-reports/

As previously announced a presentation will be held on the Funcom channel on Twitch, www.twitch.tv/funcom at 8:00pm CET today 26 February.

The presentation will be held in English by Rui Casais, CEO of Funcom, and Stian Drageset, CFO.

Any enquiries may be addressed to: investor@funcom.com

To receive Funcom news directly to your e-mail sign up to our e-mail service at https://investors.funcom.com/

This information is subject to the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)

Badhoevedorp, The Netherlands, 26 February 2019

Funcom N.V

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