===== SIDA 1 ===== CCopen Annual report 2023 March 20, 2024 Better Collective A/S Sankt Annæ Plads 28, Copenhagen www.bettercollective.com CVR NO.: 27 65 29 13 Better Collective’s esport brand HLTV annually hosts its award show, paying tribute to and celebrate the CS:GO community. HLTV is the world’s largest esport community. ===== SIDA 2 ===== Annual report Page 2 Building Better Collective Since the incorporation of Better in 2004, it has charted a remarkable journey, evolving from a two -person initiative into a global group with more than 1,200 talented employees, 20 international offices, and nearly 400 million monthly visits across its portfolio. Throughout the years of rapid expansion, the group has still managed to maintain its visionary and entrepreneurial spirit. Since the incorporation of Better Collective, our stead- fast commitment has been to operate the business sus- tainably. As co-founders, we share the belief that genu- ine success is derived from creating something we can truly take pride in. Hence, we made the early decision to keep our headquarters and company registration in Co- penhagen, reflecting our dedication to giving back to the community we call home, while ensuring that taxes are appropriately paid in all the countries we operate. The formation of a hig hly experienced and diverse Board of Directors has been a core focus since the early days, even preceding our listing on Nasdaq Stockholm in 2018. We are very pleased with the dual listing in Co- penhagen, as we are a listed company on our home turf. Educational initiatives, such as our SEO and SEM acade- mies, underscore our commitment to informing both our employees and the local communities we operate within. These have now become a crucial part of our tal- ent attraction. Additionally, our emphasis on creating a secure and equitable work environment is sustained through DEI initiatives . Today, more than 45 nationali- ties are represented in Better Collective across 13 coun- tries. We exclusively collaborate with licensed sports- book partners in regulated markets, receiving recogni- tion through numerous iGaming industry awards for our unwavering commitment to compliance. Our dedication to safer gambling is ingrained in our core values and we actively support our partners by providing them with safer gambling software , a commitment extended across our own portfolio of sports media brands . Our longstanding goal is to achieve sustainable growth, en- abling high profitability while concurrently focusing on future development. Since our IPO and the initiation of our M&A strategy, we have sustained high growth with minimal dilution, seen increasing margins, and growing earnings per share. We are uniquely positioned to con- solidate the digital sports media space, and there are a lot of synergies to harvest in combining strong authoritative sports media with large viewerships and Better Collective’s core strengths of optimization, con- version, and diverse business models. W e are proud to have retained many talented colleagues and founders onboard, which is a testament to the trust and excite- ment surrounding what we are building with Better Col- lective, the leading digital sports media group. Jesper Søgaard & Christian Kirk Rasmussen Co-founders, CEO & COO Co-founders, Jesper Søgaard (CEO) & Christian Kirk Rasmussen (COO) at the opening of Better Collective’s new headquarter in Copenhagen. ===== SIDA 3 ===== Annual report Page 3 Introduction 4 A word to our shareholders 6 Financial highlights and key ratios 10 Strategy 11 Our business segments 18 Business segments review 19 Financial performance 20 Financial targets 22 Corporate governance 23 Corporate governance report 24 Risk management 34 Board of Directors 36 Executive management 40 The BETCO share and shareholders 42 Sustainability 45 Founder statement 46 Reporting framework 48 ESG strategy 50 Sustainability governance 51 Social 52 Governance 57 Environment 58 ESG metrics 59 EU Taxonomy 64 Statements 66 Statement by management 67 Independent Auditors’ Report 68 Group 72 Statement of profit and loss 73 Statement of comprehensive income 73 Balance sheet 74 Statement of changes in equity 75 Cash flow statement 76 Notes 78 Parent company 115 Statement of profit and loss 116 Statement of comprehensive income 116 Balance sheet 117 Statement of changes in equity 118 Cash flow statement 119 Notes 120 Other 136 Alternative Performance Measures and Definitions 137 April 22, 2024 AGM May 21, 2024 Interim Financial report Q1 August 21, 2024 Interim Financial report Q2 November 13, 2024 Interim Financial report Q3 Table of contents Management Review Financial Statements Financial calendar ===== SIDA 4 ===== Annual report Page 4 Annual report Page 4 Introduction ===== SIDA 5 ===== Annual report Page 5 With a vision to become the lead- ing digital sports media group, Better Collective owns and oper- ates global and national sports media. We are on a mission to ex- cite sports fans through engag- ing content and foster passion- ate communities worldwide. Our portfolio of sports media brands covers more than 30 lan- guages and attract s 400 million monthly visit s, while our com- bined offering s include every- thing from quality sports con- tent, communities , data in- sights, and apps, to video con- tent, podcasts , and innovative technology . Annual report Page 5 ===== SIDA 6 ===== Annual report Page 6 A word to our shareholders Becoming the leading digital sports media group In 2023, we continued our journey towards realizing our vision o f becoming the leading digital sports media group. In doing so we led continuous development and innovation of our business and acquired seven addi- tional business es to further our position. We also in- creased our sports audience significantly from 180 mil- lion to more than 400 million monthly visits. We initi- ated the development of our own in -house advertising technology platform , AdVantage. With this develop- ment we can c ater to the demand from advertisers wanting to reach our large audience. We have seen proof of concept and look forward to scale this during 2024. Further, t hrough the acquisitions we built out our knowledge on global display advertising, exclusive con- tent creation, social media content, while acquiring sev- eral strong sports media brands. All of which builds on top of our core competencies of maximizing the value of large audiences by utilizing our unique skills and diver- sified business models. Remarkably, all of this was done while still growing our business organically by 13% and we have seen great leverage in our operational earnings. Strong growth in recurring revenues Worth highlighting in the 2023 performance is the 50% growth in recurring revenues reaching 19 1m EUR. This not only marked 2023 as a record -breaking revenue year but also distinguished it as the highest-quality per- formance to date, attributable to the recurring revenue component. Recurring revenues consist of revenue share income, subscription revenues, and advertising revenues. Throughout 2022 and 2023, we successfully referred over 3 million new depositing customers (NDCs) on revenue-share agreements which have yet to start generating revenue. This is more NDCs than we have delivered since the foundation of the group and up until 2021 – also coupled with our ongoing transition to revenue share income in North America. Furthermore, the demand to connect with our expansive sports audi- ence has driven the development of AdVantage. Suc- cess in this endeavor holds promising prospects for rev- enue derived from advertising sales. Therefore, looking ahead we anticipate this positive trend to continue ac- celerated by our unwavering focus. Diving into our markets We are currently in the midst of a revenue transition, shifting towards recurring revenue share income in the North American market. This strategic change involves forgoing immediate revenue to establish a more sustain- able and higher-value proposition for the future, akin to a license to SaaS transition. In Q1 of 2023, we achieved our highest quarterly revenue, driven by North America, especially the launch of sports betting in Ohio. However, this launch was influenced by CPA (upfront payments), making it a one-off event in terms of revenue growth. With our focus on recurring revenue, we anticipate that future launches, like the upcoming sports betting launch in North Carolina during Q1, 2024, will have a smaller up- front impact while still attracting a substantial number of NDCs. These NDCs are likely to be a combination of revenue share and CPA, minimizing the short -term im- pact on revenues while building for the future. Despite the ongoing North American transition, we take pride in our organic business growth during 2023, with 2024 serving as another transition year before revenue share cohorts kick in during 2025. In Q1, a member of our management relocated to Rio de Janeiro, assembling a regional team, proving beneficial with two offices now established in Brazil — Rio de Janeiro and São Paulo. Stronger efforts in South Amer- ica have enhanced our capability to integrate Playmaker Capital’s South American business, "Futbol Sites," with its massive regional audience and organization in Bue- nos Aires, positioning us in a market-leading role as Bra- zilian iGaming regulation approaches. European markets demonstrated robust growth throughout the year in both owned and operated sports brands and media partnerships. We made successful ac- quisitions of national sports media of which some have already been seamlessly integrated onto our tech plat- forms, resulting in improved Google rankings and signif- icant audience growth, details of which are explored fur- ther in this report. Cementing our position in the Americas During 2023 we announced the acquisition of Playmaker Capital, which closed in February 2024 . This strategic move, with a total consideration of 176 million EUR, ce- ments our position as a market leader in South America while reinforcing our North American market presence. Playmaker Capital aligns seamlessly with our strategy, offering significant synergies that will bring the upfront 11,7x EV/EBITDA below 5x by 2026, expecting margins in line with Better Collective's publishing business. Playmaker Capital's portfolio of digital sports media brands, garnering over 200 million monthly visits and a social media following of over 180 million, positions us to elevate our media capabilities and expand our audi- ence across the Americas. Futbol Sites, Yardbarker, and The Nation Network are among the distinguished sports media brands now under our umbrella, contributing to our diverse and engaged audience. Coupled with the content and social media competences acquired through the acquisition of Playmaker HQ (though similar in name Playmaker HQ and Playmaker Capital are not ===== SIDA 7 ===== Annual report Page 7 linked), we increase our presence significantly across the Americas. We are new to podcasts, however in re- cent podcast rankings in the US we have taken several top positions within the “US Sports” -category, and this has made us more confident in our ability to expand our presence and diversify our offering. The acquisition of Playmaker Capital presents a clear path to operational efficiency, as we will unlock new monetization opportunities through performance - based marketing. We extend our sincere appreciation to the Playmaker Capital team for their outstanding contri- butions, and we welcome all employees as we are ex- cited about the collective success that lies ahead. Following the seven acquisitions during 2023, we de- cided to go to the market during Q1 of 2024 to raise 10% of the capital or more than 1 bnDKK. Our focus remains on consolidation and integration during 2024, however this has prepared us should any M&A opportunities arise. Thanking our colleagues Reflecting on the remarkable performance of the past year fills us with immense pride and gratitude. Our col- lective efforts at Better Collective have once again proven that we are a force to be reckoned with in the industry. Everything we do is with a sustainable mindset ; we are headquartered in our home market, pay our taxes ac- cordingly, solely work with licensed sportsbook partners in regulated markets, bring efforts to educate our audi- ences, have a highly professional and experienced Board of Directors, work with our partners to promote safer gambling practices, take pride in our SEO and SEM academies, focus on diversity with more than 45 nation- alities present across the group and so much more. This wholesome approach is part of our DNA and has be- come a competitive advantage for us. We extend our sincere thanks to every one of our col- leagues for your dedication, hard work, and unwavering commitment to excellence. It is your "can-do" attitude that has propelled us to new heights. Our success is a testament to the strength of our team, and we are priv- ileged to lead such an outstanding group of profession- als. Let us carry this momentum forward into the coming year, continuing to innovate, collaborate, and achieve greatness together. Annual report Page 7 Jens Bager Chair of the Board Jesper Søgaard Co-founder & CEO Annual report Page 7 Co-founder & CEO Jesper Søgaard & Chair of the Board Jens Bager ===== SIDA 8 ===== Annual report Page 8 Ohio launched online sports betting, which from a regu- latory perspective was a perfect state launch. The state of Massachusetts also regulated online sports betting. Better Collective signed its first global media partner- ship with the digital soccer platform Goal, while also signing with the well- established Polish news portal Wirtualna Polska and with Nigeria’s leading news media, PUNCH, An asset deal for a sports media in an emerging market for 4.3 mUSD was also signed. Better Collective’s esport community HLTV hosted the world’s largest esport award show, watched by more than 250.000 Counter Strike: Global Offensive fans. The Board of Directors implemented a new Long Term Incentive Plan for key employees. The total value of the 2023 LTI grant program is 2.9 mEUR (Black -Scholes value). Better Collective acquired Skycon Limited and in doing so expanded its efforts within digital display advertising. With the acquisition the financial targets for 2023 were upgraded. The UK Government published a “White Paper” as part of a Gambling Act review. Better Collective welcomed the long -awaited proposed initiatives with a stronger focus on safer gambling. Given the proactive compli- ance measures already taken, the proposed meas ures were estimated to have zero to limited financial impact on the Better Collective group. The Annual General Meeting 2023 was held electroni- cally on April 25, 2023. Playmaker HQ was acquired to expand competitiveness within social media and sports content production. The total consideration of the acquisition was 54 mUSD with an upfront payment of 15 mUSD. The Brazilian sports media platform, Torcedores.com was acquired, adding the first Brazilian sports media brand to the group with an office in Sao Paulo, Brazil. Better Collective also expanded its Swedish position to- wards the generalist sport fans by acquiring four of the strongest sports media brands in the market. Tipsbladet.dk was also acquired for 6.5 mEUR, further leveraging Better Collective’s position as a key partner for advertisers in the Danish market. Britt Boeskov and René Rechtman were elected to the Board of Directors at an EGM on 8 August. Better Col- lective also opened the doors to its new headquarters in Copenhagen. Better Collective made its second largest acquisition to date, in a transaction to acquire Playmaker Capital for a total price consideration of 176 mEUR. Playmaker Capi- tal is a leading digital sports media group that owns and operates several strong sports media brands across the Americas. In late September, Better Collective announced its in- tention to carry out a dual listing of the group’s shares on Nasdaq Copenhagen, in addition to the current listing on Nasdaq Stockholm. The first day of trading on Nasdaq Copenhagen was November 17, 2023. Q1 Watch the Q1 highlights Q3 Watch the Q3 highlights Q2 Watch the Q2 highlights Q4 Watch the Q4 highlights ===== SIDA 9 ===== Annual report Page 9 Better Collective announced the completion of the Play- maker Capital acquisition, making it the second -largest acquisition to date. Better Collective raised 10% or 1,081.9 mDKK in an accel- erated book building process to prepare for future M&A. The demand in the placing was substantial and with BLS Capital Fondsmæglerselskab A/S as an anchor taking 50% of the deal making it possible to place all shares without a discount to the market price. Better Collective announced a new major shareholder as BLS Capital Fondsmæglerselskab A/S now has 11 .7% of the voting rights. Also, Better Collective is now included in the Nasdaq Stockholm and Nasdaq Copenhagen Large Cap Index with companies that have a market cap higher than 1 bnEUR. Q1 will see the launch of sports betting in North Carolina which expectedly will be a great opportunity given the size of the state. Being CPA-based (upfront payments), last year ’s Ohio and Massachusetts launches were strong revenue drivers for Better Collective. The upcom- ing launch of North Carolina will be a mix of CPA and revenue share, meaning that the impact here and now will be smaller, but will help building for the future. This means the comparisons on a year-over-year basis will be somewhat tough. There are high expectations for Q2 and Q3 due to the European Championship. Historically, most of Better Collective’s share databases were sent in Europe, and these are expected to perform well to- gether with a high revenue share NDC intake. Copa America also takes place during Q2 and Q3, which pre- viously has not been a big event for the group. This time, Better Collective owns some of the strongest sports me- dia in the region . However, with little experience from Copa America expectations remain conservative. Lastly, Q4 is the high season for most sports and the compari- son will be normalized on a year over year basis. Annual report Page 9 2024 what to expect Events after the close of 2023 ===== SIDA 10 ===== Annual report Page 10 Financial highlights and key ratios tEUR 2023 2022 2021 2020 2019 Income statements Revenue 326,686 269,297 177,051 91,186 67,449 Recurring revenue 191,118 127,573 79,879 59,889 49,806 Revenue Growth (%) 21% 52% 94% 35% 67% Organic Revenue Growth (%) 13% 34% 29% 8% 26% Operating profit before depreciation, amortization, and special items (EBITDA before special items) 111,080 85,075 55,775 38,152 28,061 Operating profit before depreciation and amortization (EBITDA) 109,132 85,021 39,030 38,272 27,446 Depreciation 3,958 2,321 1,764 1,548 831 Operating profit before amortization and special items (EBITA before special items) 107,122 82,754 54,011 36,604 27,231 Special items, net - 1,948 - 54 - 16,746 120 - 615 Operating profit before amortization (EBITA) 105,174 82,700 37,265 36,724 26,616 Amortization and impairment 24,283 12,347 8,516 6,235 5,413 Operating profit before special items (EBIT before special items) 82,839 70,407 45,495 30,369 21,817 Operating profit (EBIT) 80,891 70,353 28,749 30,489 21,202 Result of financial items - 22,881 - 5,389 - 2,522 - 1,778 - 2,448 Profit before tax 58,010 64,964 26,227 28,712 18,755 Profit after tax 39,835 48,075 17,292 21,927 13,944 Earnings per share (in EUR) 0.74 0.88 0.34 0.47 0.32 Diluted earnings per share (in EUR) 0.70 0.85 0.33 0.45 0.31 tEUR 2023 2022 2021 2020 2019 Balance sheet Balance Sheet Total 937,862 785,229 597,379 315,065 229,601 Equity 435,273 412,917 344,848 162,542 138,317 Current assets 105,812 95,025 62,898 48,555 36,035 Current liabilities 103,493 65,068 55,452 26,312 22,088 Net interest bearing debt 221,133 177,879 95,290 51,030 - 2,918 Cashflow Cash flow from operations before special items 119,384 69,816 51,204 38,321 26,585 Cash flow from operations 114,639 68,423 45,207 37,696 25,481 Investments in tangible assets - 5,143 - 1,788 -285 - 460 - 955 Cash flow from investment activities - 106,248 - 112,632 - 219,219 - 68,090 - 49,509 Cash flow from financing activities 29,334 65,737 188,759 46,790 36,365 Financial ratios Operating profit before depreciation, amortization (EBITDA) and special items margin (%) 34% 32% 32% 42% 42% Operating profit before amortization margin (EBITDA) (%) 33% 32% 22% 42% 41% Operating profit margin (%) 25% 26% 16% 33% 31% Publishing segment - EBITDA before special items margin (%) 37% 38% 43% 48% 43% Paid media segment - EBITDA before special items margin (%) 29% 16% 8% 16% 18% Net interest bearing debt / EBITDA before special items 1.99 2.09 1.71 1.34 -0.10 Liquidity ratio 1.02 1.46 1.13 1.85 1.63 Equity to assets ratio (%) 46% 53% 58% 52% 60% Cash conversion rate before special items (%) 103% 80% 92% 99% 91% Average number of full-time employees 1,252 878 635 420 364 NDCs (thousand) 1,916 1,683 858 635 432 For definitions of terminology, please refer to the section on page 137. ===== SIDA 11 ===== Annual report Page 11 Annual report Page 11 Strategy ===== SIDA 12 ===== Annual report Page 12 Paving the way towards becoming the leading digital sports media group Better Collective is a strong global group of interna- tional and national sports media brands , and the group has experienced rapid expansion since 2018 and the IPO on Nasdaq Stockholm. Since then, t he group has suc- cessfully positioned its brands as trusted destinations for sports fans across the world, and in 2023 further ex- panded its reach to more than 400 million monthly vis- its. Developing a global network of interconnected brands with a large and loyal audience builds the foun- dation for future growth. At Better Collective we are de- termined to keep expanding and maximizing the value of our brand portfolio organically as well as non-organ- ically. Better Collective’s strategy is built on six core pil- lars: • Growing global sports audience organically and through M&A • Expanding in new and emerging markets • Maximizing the value of large audiences through a diversified business model • Partnering with leading media houses worldwide • Leveraging global benefits of scale • Continuously invest in new technologies We believe in the benefits of scale when creating a global sports media group , including scale benefits in content generation and distribution, best -in-class com- mercial agreements, audience analytics, talent attrac- tion and retention and innovation. Adding to the pillars, the group also has a few distinct focus areas. Better Collective has built a strong common technology platform centered around search engine op- timization (SEO) and conversion rate optimization (CRO), enabling the group to not only continuously grow its global audience organically , but also creat ing unparalleled value for its many global partners. Better Collective excels at maximizing the value of its large global audience and optimizing revenue generation through a diversified set of business models. Since 2018, M&A has been a core pillar of the strategy and has brought significant value and scale to the group throughout the last six years. In 2023, Better Collective completed no less than seven acquisitions , equating to a total of 34 acquisitions since 2018. With the acquisition of Playmaker Capital, Better Collec- tive significantly expanded its footprint in South Amer- ica, and now owns leading national sports media brands in all key markets in the region. M&A fits exceptionally well into the strategy as there are immediate synergies to harvest once becoming part of the Better Collective group, such as audience growth, revenue diversification, cost optimization, and much more. With the expansion into the wider digital sports media industry, a stronger emphasis is now on audience en- gagement and retention. The group will continue to in- vest, diversify, strengthen , and develop its content of- ferings across its portfolio to attract and engage a broader variety of sports fans worldwide. With the foun- dation of its large global portfolio, Better Collective is also in the midst of building and refining its own in- house AdTech platform, AdVantage. AdVantage will al- low the group to serve valuable, engaging, and contex- tual advertising campaigns across its global brand port- folio. Through its large audience and in combination with more direct, in -house, advertising campaigns, the group expects to yield significantly higher CPM rates across its brands. In conclusion, Better Collective has achieved remarkable global growth in the past years, and now reaches an au- dience of more than 400 million monthly visits. The stra- tegic pillars of organic and M&A-driven expansion, mar- ket and revenue diversification, strategic partnerships, and technological in novations have been key contribu- tors to this success. The most recent addition to the strategic flywheel is the launch of AdVantage, which will strengthen the group extensively. Steadfast execution of this strategy is what will set Bet- ter Collective even further apart from competition and enable the realization of the vision to become the lead- ing digital sports media group. ===== SIDA 13 ===== Annual report Page 13 Tech deep dives AdVantage In early 2023, Better Collective announced its ambition to develop its own in -house advertising platform and branded it AdVantage. The development of an in-house AdTech platform has been an ambition for a long time and is the natural next step in Better Collective’s journey towards becoming the leading digital sports media group. With the depreciation of third-party cookies as a tool to target ads to audiences across digital channels, compa- nies monetizing through digital marketing activities are to a significant degree becoming more reliant on zero - and first-party data from owned and operated media to serve contextual and targeted ads to their audiences. Better Collective has prepared for this transition for a long time. Since 2020, Better Collective has acquired numerous leading sports brands with loyal returning au- diences, expanding its reach from 7 million monthly vis- its in 2018 to currently more than 400 million. Given Better Collective’s niche focus on sports and strong zero- and first-party data on its owned and oper- ated sports brands, the company can provide targeted and contextual advertising to niche audiences which ad- vertisers are willing to pay a premium for. This leaves Better Collective in a unique position given there are many advertising inventory companies and many AdTech companies, but only very few that combine the two without a reliance on 3rd parties. Notably, advertis- ing sales and performance market ing aka affiliation include minimal cannibalization. The conversion of play- ers, referred to as New Depositing Customers (NDCs), through branded display advertising is limited, indicat- ing a highly synergistic and effective collaboration be- tween the two. While various third-party platforms exist, there are mul- tiple reasons cementing the need for creating an in - house platform. AdVantage will allow Better Collective to increase CPM rates by utilizing the monetization wa- terfall as depicted on the next page. Direct display. The summit of the waterfall represents the highest CPM rates, achieved through direct display advertising. Better Collective will consolidate its inven- tory real-estate into one Better Collective ad network. Direct ads are negotiated via a mutual agreement be- tween Better Collective and the advertiser. Involving ne- gotiations on various aspects, such as pricing, the num- ber of ads to be showcased, the specific display loca- tions, and the duration of the ad campaign. These agree- ments can be forged with both indi vidual advertisers and agencies acting on behalf of advertisers. The ad placement will be automated while the selling will be more manually handled. Furthermore, Better Collective has also developed Fan- Reach which enables advertisers to connect their CRM (first party data) with the group’s tech stack to run high value reactivation campaigns. CPMs are usually 8 -20 USD, according to market statistics. Programmatic Direct. Descending the waterfall, we en- counter programmatic advertising, a method enabling Better Collective to operate on a larger scale by lever- aging AdVantage to auction available ad space. Pro- grammatic ads offer greater flexibility compared to di- rect ads, allo wing advertisers to display varied ads to different readers. This type of customization is based on individual user data, encompassing behavior, prefer- ences, location, and demographic information. Such targeted precision empowers advertisers to show- case the most relevant ads to specific readers at optimal times and locations. Campaigns are agreed directly as a private marketplace deal (PMP) between Better Collec- tive and a limited group of advertisers. Campaigns are subsequently delivered via a connection between ad- vertiser platform and publisher platform. Programmatic CPMs are usually 3- 8 USD, according to market statis- tics. Supply side platform (SSP) . At the bottom of the wa- terfall is the open supply side platform (SSP) auction. This is where otherwise unfilled inventory is put to real- time-bidding (RTB) for a last chance of monetization of every session. This is where all demand -selling-plat- forms (DSP), as well as ad networks, and agencies bid What is an AdTech platform? An AdTech platform is a technology plat- form designed to streamline, automate, and optimize the advertising process. AdTech platforms use advanced technologies such as advanced data analytics and machine learning algorithms that analyze user behav- ior to enhance the efficiency and effective- ness of advertising campaigns, while provid- ing valuable and engaging advertising, tar- geting specific user needs. What is AdVantage? AdVantage is an owned and operated tech infrastructure to orchestrate Better Collec- tive’s global media network with advertising capabilities. ===== SIDA 14 ===== Annual report Page 14 and compete for the remaining inventory. CPMs are usu- ally 0-2 USD, according to market statistics. Selling everything directly is not possible, making it cru- cial to maximize the full waterfall. Presently, Better Col- lective employs third -party agencies to monetize audi- ences, primarily on its esport brands; FUTBIN and HLTV. These agencies take the advertising inventory to a DSP, aiming to optimize for the highest CPM rate. Throughout this process, the agency naturally takes a percentage of the deal and so does the DSP, also referred to as the “AdTech Tax”. The advertisers on the other side share their CPMs with agencies, SSP s and other middlemen. Considering the involvement of the various intermediar- ies, Better Collective estimates that its esport brands yield an average CPM rate significantly below 1 USD. Given the robustness of the brands and the sought-after audience they attract, there should be substantial up- side if AdVantage becomes a success. When Playmaker Capital was acquired, Better Collective also got access to their AdTech platform called Bench. This will complement what has already been built as there is significant scale available across their network. Furthermore, Playmaker Capital has also gone through the process of implementing Bench across all its brands, and the efforts within Programmatic Direct and SPP bring valuable experience and know-how to this part of the integration. Playmaker Capital can deliver cam- paigns at scale via the platform given they have over- sight of all their impressions etc. The most prominent opportunities with the successful development of AdVantage includes but are not limited to: • Utilizing the full Better Collective brand network. Scaling advertising sales to all Better Collective sport brands. • Including media partnerships . Ideally also scaling AdVantage in Media Partnerships, which would sig- nificantly increase the audience further, positioning Better Collective as the #1 monetization partner for sports media. • Waterfall monetization . Utilizing the full monetiza- tion waterfall brings in higher CPM rates. • Creating competition for inventory bidding . Op- timizing demand partners in the low end of the wa- terfall making it possible to sell more inventory and at higher CPM rates. • Optimiz ing or removing middle man. Better Col- lective has been highly acquisitive; hence the com- pany has accumulated several third-party AdTech platforms. With AdVantage , Better Collective will either optimize or rid itself of many of the middle- men, as it will use its own AdTech platform. Utilizing zero- and first-party data Under the hood of AdVantage, Better Collective has de- veloped several technologies that provide much value for advertisers. These include: FanReach operates as a customer data platform (CDP) alongside with AdVantage, as one of the main pillars of Better Collective’s AdTech , serving as a unified system that gathers and organizes data to establish a unique user ID for each visitor on Better Collective's brands. This facilitates audience segmentation for marketing and personalization. In the future, advertisers with zero- and first-party data will have the capability to integrate their CRM system with FanReach, and consequently, Ad- Vantage. This integration will allow Better Collective to identify when a user that is within the targeting audi- ence of an advertiser is visiting a BC website or mobile app, enabling the display of highly targeted and contex- tual advertising. This feature holds significant value for advertisers, resulting in a correspondingly high CPM rate. ===== SIDA 15 ===== Annual report Page 15 BetSense stands as a multifaceted advertising solution inside the BC AdTech ecosystem, alongside AdVantage. Leveraging sports data, smart facts, offers, tips, live and odds, our advertisements are customizable with compo- nents tailored to advertisers’ requirements, seamlessly fitting into the context of the surrounding content. As an example, if you are reading an article about a Man- chester United transfer, then the BetSense ad will auto- matically showcase up to date Manchester United -re- lated odds, relevant brand products, or similar. This curated suite of ad integration and style formats is focused on engaging the audience, adapting as users navigate through content for maximum exposure while grabbing attention and stimulating engagement. With live integration of inbuilt data and sports feeds, Bet- Sense ensures users receive the latest live information. As a market leader, BetSense excels in contextualizing in-content, data -rich formats activated when users hover. Additionally, the intuitive nature of BetSense, fueled by our first-party data, enables us to deliver the optimal creative based on user intent and timing. What is the status of AdVantage? During 2023, we absorbed the project investments in building our internal AdTech platform, “AdVantage”, while already having secured proof of concept. The plat- form's development was fueled by demand, as numer- ous brands sought to engage our audience. The initial AdVantage campaigns have already been executed across our portfolio of sports media brands as well as media partnerships in eight markets. As we enter 2024, our focus shifts to scaling larger cam- paigns, with a potential emphasis on the European Championships. Currently, the BetSense product is be- ing delivered via AdVantage on our owned and oper- ated sports brands as well as media partnerships. Fur- ther, this has been implemented to now run with one large tier one customer. Where do we want to go? As we prepare for the widespread launch of AdVantage, we anticipate that this strategic technological leap will not only enhance our advertising capabilities, enabling global campaign expansion and ensuring high -quality brand activations but also sustain the substantial mo- mentum gained in recent months. Looking ahead, the overarching objective with Ad- Vantage is to be the preferred partner for advertisers seeking exposure to sports audiences and engagement with sports enthusiasts. The integration of AdVantage into Better Collective reflects our commitment to re- maining at the forefront of technological innovation, en- suring unparalleled engagement and value for both our partners and audiences. This big step forward goes be- yond just using technology; it is about creating the fu- ture of digital sports media. ===== SIDA 16 ===== Annual report Page 16 The Better Collective technology platform What is a tech nology platform? A tech platform serves as a foundation for building and running software appli- cations, providing the necessary tools, infrastructure, and services for developers to create and deploy their solutions. Why is such a tool important for Better Collective? A centralized tech platform provides operational, strate- gic, and competitive advantages for a digital sports me- dia group by ensuring consistency, efficiency, scalabil- ity, and the ability to adapt in persistently evolving mar- ket conditions. Better Collective has a unique position with its cutting - edge technology platform, a robust and versatile infra- structure designed to enhance user experiences, opti- mize content delivery, centralize advertising place- ments, and ensure regulatory compliance across its global portfolio. The platform provides many capabili- ties as outlined below, which ensures significant impact. Most often when Better Collective acquires new brand s these are onboarded to the group’s technology plat- form, which optimizes the performance of the acquired brand, increases the audiences, improves rankings in search engines , creates opportunities for scale, c uts costs, all while staying compliant. L ooking into the dif- ferent segments here is an overview of what the tech platform provides: 1. Search engine optimization (SEO). The Better Col- lective technology platform places a strong empha- sis on SEO, aiming to boost the group’s brands across their digital presence. Through meticulous optimization strategies embedded in the platform and expertise developed over the past 20 years, the group achieves increased visibility in search results for strategically chosen value -driving keywords. This not only improves organic traffic but also en- sures that the audience finds relevant content seamlessly. 2. Product analytics. The platform integrates robust product analytics tools, focusing on Conversion Rate Optimization (CRO) and benchmarking Key Performance Indicators (KPIs). This data-driven ap- proach empowers Better Collective to refine its of- ferings, enhance user engagement , and strategi- cally align with market demands. 3. Technology stack. Better Collective's technology platform boasts a state-of-the-art technology stack and a comprehensive toolbox. This empowers de- velopment teams to minimize integration time, of- ten completing projects within a three -month time frame. The platform's agility is a testament to its commitment to staying at the forefront of techno- logical advancements. 4. Regulatory compliance. Ensuring compliance with local regulations is paramount in the sports media and betting industry. The Better Collective technol- ogy platform places a strong emphasis on meeting regulatory standards across all sites, markets and countries - not only foster ing legal adherence but also building trust with users in diverse global mar- kets. 5. Cloud hosting. The platform leverages cloud host- ing to provide central, secure, and optimized infra- structure for global and regional content delivery. This not only enhances performance but also en- sures that users worldwide can access Better Col- lective's content with speed and reliability. 6. Advertising platform. Better Collective is currently refining AdVantage, delivering an impressive 5 bil- lion yearly addressable impressions across the global brand network. This is achieved through Ad- vantage, Fan Reach, and BetSense, creating exten- sive opportunities for brand exposure and revenue generation. Annual report Page 16 ===== SIDA 17 ===== Annual report Page 17 7. AI automation. The technology platform incorpo- rates an AI backbone, supporting optimal multi- channel content generation, which not only en- hances efficiency but also ensures that the content is dynamic, personalized, and resonates effectively across various channels, languages, cultures, and formats. 8. Channel reach. Better Collective recognizes the im- portance of diverse channel reach. The platform en- ables multi- channel and multi -format content de- livery, spanning web, app, and social media. Such a comprehensive approach ensures that content reaches audiences wherever they are, fostering a truly immersive and engaging sporting experience. 9. Central content management. A centralized con- tent management system is one of the corner- stones of the platform, allowing Better Collective to leverage generated content across all channels , globally. In doing so workflows are streamlined while ensuring consistency and quality in the con- tent presented to the users. 10. Brand strategy fit. The platform toolbox is a key enabler for implementing Better Collective's brand strategy. By providing a diverse set of tools and ca- pabilities, the platform supports the strategic im- plementation of any brand in the group’s extensive portfolio, fostering brand consistency and reso- nance. In conclusion, Better Collective's t echnology platform underlines the group's commitment to technological ex- cellence, user -centric experiences, and global market leadership. The integration of SEO, analytics, compli- ance, cloud hosting, advertising, AI, and a versatile tech- nology stack positions the platform becomes a compre- hensive solution for navigating the complexities of the digital sports media landscape. Execution done right Better Collective hosted its first ever Capital Markets Day in late March of 2023, during which the group pre- sented a case example in its brand: Soccernews. When Soccernews was acquired, it had an audience of around 10 million monthly visits and mostly generated revenue from advertising sales. 12 months after the acquisition and the integration of Soccernews onto Better Collec- tive’s tech platform, the audience had doubled to 20 million monthly visits, and the revenue had five doubled. Since th en, the direct audience traffic has increased quite a lot, the CPM rates have increased further, while we have been building a new app which will be launched during 2024. We have also partnered with ex -profes- sional soccer p layer, Anouk Hoogendijk, to boost our video content creation, having already interview ed many players such as Jaap Stam. In 2023, Better Collective acquired the Brazilian sports media, Torcedores, to strengthen its position in the local market. Following the acquisition, Better Collective promptly integrated Torcedores onto its tech platform, leading to noticeable improvements within just a few months, including: • Enhanced site performance. The integration signif- icantly improved the performance of Torcedores' website, ensuring a smoother and more efficient user experience. • Improved search engine rankings . Better Collec- tive's tech platform implementation resulted in im- proved rankings on search engines, making Torcedores' content more discoverable and acces- sible. • +170% audience growth . The audience experi- enced a remarkable growth of 170% post imple- mentation, indicating a substantial increase in user engagement and reach. • Increased content production . The tech platform facilitated an increase in content production, allow- ing Torcedores to deliver more diverse and engag- ing content to its audience. • Uptick in future revenue generation. The improve- ments led to a significant uptick in future revenue generation, attracting numerous New Depositing Customers (NDCs) and expanding the platform's fi- nancial prospects. • Social media following surge. Following a 50% in- crease in social media (SoMe) content production, Torcedores witnessed a substantial increase in its social media following, strengthening its online community. • Reducing costs. The integration onto Better Collec- tive's tech platform resulted in a 35% reduction in Torcedores' monthly operational costs, demon- strating increased efficiency and resource optimi- zation. Overall, the successful integration onto the Tech Plat- form showcased tangible benefits, ranging from en- hanced site performance and audience growth to im- proved revenue generation and operational cost sav- ings. This use case exemplifies how Better Collective's Tech Platform can bring about positive transformations and drive success for acquired sports media entities. ===== SIDA 18 ===== Annual report Page 18 Our business segments Contributes 73% of the group’s EBITDA before special items Publishing The Publishing business includes revenue from Better Collective’s proprietary own and operated sports media platforms as well as media partnerships. The audience for this seg- ment is mostly attracted direct or through or- ganic search results North America contributes 28% of the group’s EBITDA before special items Europe & ROW The Europe & Rest of the world (ROW) business in- cludes all markets outside of North America. The European markets consist of a blend of mature leg- acy markets and markets like South America which is a strong growth market . The segment further in- cludes the esport communities HLTV and FUTBIN. Given the strong legacy in the European markets there is a lot of recurring revenue in this part of the business. Europe & RoW contributes 72% of the group’s EBITDA before special items Contributes 27% of the group’s EBITDA before special items Paid Media The Paid Media business includes revenue ef- forts in paid advertising on search platforms like Google and Bing, as well as advertising on third party sports media. Given the upfront payment to advertise on third party platforms the gross margin is lower than in the Publishing business. North America Both the US and the Canadian markets are some- what recently regulated. The first states in the US started regulating in 2018. As both markets are young, revenues largely have been generated from one-time payments (CPA). During Q3 2022, Better Collective sta rted its transition towards recuring revenues in the US. ===== SIDA 19 ===== Annual report Page 19 Business segments review Historically, Better Collective has reported on the geographical segments Europe & ROW (Rest of the World) and the US. During 2023 , this segmentation wa s altered, and the geographical business segmentation has since been between Europe & Rest of the World and North America. Better Collective operates two different business models regarding customer acquisition both with different earnings profiles distinguished between t he group’s Publishing and the Paid Media business es. Thus, r eporting includes measuring and disclosing separately for Revenue, Cost and Earnings. All historical financial figures are reported accordingly. Publishing Revenue of 220 mEUR grew 18%, of which 15 % was or- ganic. Publishing accounted for 67% of the group’s total revenue in 2023. Additionally, the cost grew to 1 40 mEUR resulting in EBITDA before special items of 81 mEUR, a growth of 13% with an EBITDA-margin of 37%. Better Collective continued to see very strong perfor- mance from this business area that on the one hand in- cludes media partnerships with authoritative news out- lets like The Daily Telegraph , the New York Post and Goal.com and on the other hand in owned and operated sports brands like Betarades, Soccernews, and many other local heroes. Paid Media Revenue was 106 mEUR which equals growth of 29% of which 13% was organic , hence growth came from own operations as well as a successful acquisition of Skycon Limited. Since acquiring the Atemi group in 2020, the group’s focus has been to heavily invest in developing the Paid Media business. The decision to move NDCs from pure CPA to revenue share contracts or hybrid rev- enue models (mix of CPA and revenue share) has re- sulted in a continued increase in revenue from revenue share income. Due to the extensive topline growth and scaling oppor- tunities the Paid Media business delivered an EBITDA before special items of 30 mEUR growing 127% (on top of growing 112% in 2022) with an EBITDA margin of 29% (versus 16% last year). Paid Media delivered 3 3% of the Group’s revenue in 2023, and 27% of EBITDA. Europe & Rest of the World Revenue was 218 mEUR in 2023 , which is a growth of 29% of which 17% was organic. The growth was mainly driven by good underlying performance in most mar- kets, while media partnerships and South America con- tinued to be the main drivers of the performance. The EBITDA ended at 80 mEUR implying a margin before special items of 3 7%. Europe & ROW delivered 6 7% of the group’s revenue and 72 % of EBITDA before special items. The Europe & ROW market is most sensitive to fluctuations in the sports win margin as this segment op- erates most of the revenue share accounts. North America Overall, the North American business delivered a solid performance with revenue of 109 mEUR implying growth of 9% of which 5% was organic. EBITDA before special items was flat at 31 mEUR and the EBITDA-mar- gin was 28 %. North America delivered 3 3% of the group’s revenue, and 28 % of EBITDA. The transition from CPA to recurring revenue share income continues to impact the short-term performance while building fu- ture sustainable revenue. Annual report Page 19 ===== SIDA 20 ===== Annual report Page 20 Financial performance Revenue growth of 21% to 327 mEUR and organic growth of 13% Revenue showed strong growth versus 2022 of 21% and amounted to 327 mEUR (2022: 269 mEUR). Revenue share accounted for 50% of the revenue with 32% com- ing from CPA, 5% from subscription sales, and 13% from other income. Cost of 216 mEUR - up from 184 mEUR The increase in costs is primarily driven by personnel costs increasing 20 mEUR corresponding to an increase of 17%. The increase is driven by an increase in average number of employees increasing from average 878 in 2022 to 1,252 in 2023. Direct costs related to media partnerships and Paid Media increased as well, however in line with overall growth in revenue. The cost base ex- cluding depreciation and amortization grew 32 mEUR, up to 216 mEUR (2022: 184 mEUR). Total direct cost relating to revenue increased by 7 mEUR to 99 mEUR (2022: 92 mEUR) with the growth coming from increased cost in Paid Media , and direct costs related to media partnerships. Beyond the cost of paid traffic, this includes hosting fees of websites, con- tent generation, and external development. Personnel cost increased 31% from 2022 to 8 9 mEUR 2023 (2022: 69 mEUR). The average number of employ- ees increased 43% to 1,252 (2022: 878). Personnel costs include costs related to warrants of 3 mEUR (2022: 2 mEUR). Other external costs increased 4 mEUR or 1 7% to 27 mEUR (2022: 23 mEUR). Depreciation and amortization amounted to 28 mEUR (2022: 15 mEUR). The increase is primarily due to amortization related to the acquisition of FUTBIN , and the acquisitions during 2023 Skycon, Playmaker HQ, Digital Sportmedia I Norden AB ( Sven- skaFans.com, Hockeysverige.se, Fotbolldirekt.se and Innebandymagazinet.se), Goalmedia Technologia E Marketing Digital (Torcedores) and Tipsbladet as well as new media partnerships. Special items Special items amounted to an expense of 2 mEUR (2022: 54 tEUR). The net expense of 2 mEUR is primarily related to M&A expenses of 10 mEUR, dual listing in Copenha- gen of 1 mEUR and restructuring of 1 mEUR as well as an income related to reversal of an earn -out of 10 mEUR. The earn-out was related to certain extraordinarily high- performance criteria that will not be met. Earnings Operational earnings (EBITDA) before special items grew 31% to 111 mEUR (2022: 85 mEUR). The EBITDA- margin before special items was 34 % (2022: 32 %). In- cluding special items, the reported EBITDA was 109 mEUR. (2022: 85 mEUR). EBIT before special items increased 19 % to 8 3 mEUR (2022: 70 mEUR). Including special items, the reported EBIT was 81 mEUR (2022: 70 mEUR). Net financial items Net financial costs amounted to 2 3 mEUR (2022: 5 mEUR) and included net interest, fees relating to bank credit lines , unrealized losses on shares and exchange rate adjustments. Interest expenses amounted to 13 mEUR and included non-payable, calculated interest ex- penses on certain balance sheet items . Out of the net interest 11 mEUR is paid. Net financial costs are impacted by an unrealized loss of 8 mEUR on Catena Media shares and financing fees of 1 mEUR whereas net exchange rate loss amounted to 1 mEUR. Income tax Better Collective has a tax presence in the places where the company is incorporated. These places count Den- mark (where the parent company is incorporated), Austria, France, Greece, Malta, Netherlands, Poland, Portugal, Romania, Serbia, Sweden, UK, Canada , Brazil, and the US. Income tax amounted to 18 mEUR (2022: 17 mEUR). The Effective Tax Rate (ETR) was 31 % (2022: 26%). Net profit Net profit after tax was 40 mEUR (2022: 48 mEUR). Earnings per share (EPS) de creased by nearly 16 % to 0.74 EUR/share versus 0.88 EUR/share 2022. Equity The equity increased to 435 mEUR as per December 31, 2023, from 413 mEUR on December 31, 2022. Besides the net profit of 40 mEUR, the equity has been impacted by the acquisition of treasury shares of 13 mEUR and share- based payments of 3 mEUR. The decrease in USD versus EUR has impacted the equity by 8 mEUR. Balance sheet Total assets amounted to 938 mEUR (2022: 785 mEUR), with an equity of 435 mEUR (2022: 413 mEUR). This cor- responds to an equity to assets ratio of 4 6% (2022: 53%). The liquidity ratio was 1. 02 resulting from current assets of 106 mEUR and current liabilities of 104 mEUR. The ratio of net interest-bearing debt to EBITDA before special items was 1.99 at the end of December. ===== SIDA 21 ===== Annual report Page 21 Investments On 14 April, Better Collective acquired Skycon for a pur- chase price of up to 51 mEUR (45 mGBP) on a cash and debt free basis. The net cash flow impact of the transac- tion was 30 mEUR considering deferred payments and acquired net assets. On July 3, 2023, Better Collective US, Inc. completed the acquisition of Playmaker HQ for up to 51 mEUR (54 mUSD) with an initial consideration of 14 mEUR (15 mUSD) on a cash and debt-free basis. On August 15, 2023, Better Collective announced the ac- quisition of four brands SvenskaFans.com, Hockeysve- rige.se, Fotbolldirekt.se and Innebandymagazinet.se from Everysport Group to further expand its position within the Swedish sports media ecosystem for a total consideration of 4 mEUR on a cash and debt-free basis. On September 4, 2023, Better Collective announced the acquisition of Torcedores.com, by acquiring Goalmedia Technologia E Marketing Digital S.A. On September 18, 2023, Better Collective announced the acquisition of Tipsbladet.dk ApS to further expand its position in Denmark for a total consideration of 7 mEUR on a cash and debt -free basis with closing 2 October 2023. During the period investments in accounts and other intangible assets amounted to 8 mEUR. Cash flow and financing Cash flow from operations before special items was 11 9 mEUR (2022: 70 mEUR) with a cash conversion of 103%. In August Better Collective extended the bank-financing by three years to October 2026 as well as executing the accordion option and thereby increasing the available facilities with 72 mEUR, leaving the group with a total financing of 319 mEUR where 247 mEUR has been uti- lized by the end of December. By the end of 2023, capi- tal reserves stood at 122 mEUR of which cash of 43 mEUR, and other current fina ncial assets of 7 mEUR in form of listed shares and unused credit facilities of 72 mEUR. The parent company Better Collective A/S, is the parent company of the group. Revenue grew by 5 2% to 99 mEUR (2022: 65 mEUR). Total costs including depreciation and amorti- zation was 9 4 mEUR (2022: 61 mEUR). Profit after tax was 39 mEUR (2022: 47 mEUR). The change in profit af- ter tax is primarily due to differences in dividend pay- ments from subsidiaries, exchange rate adjustments, fi- nancial expenses, and corporate tax. Total equity ended at 443 mEUR by December 31, 2023 (2022: 411 mEUR). The equity in the parent company was im pacted by treasury share transactions (13 mEUR), cost of warrants of 3 mEUR and HLTV merger (3 mEUR). Annual report Page 21 ===== SIDA 22 ===== Annual report Page 22 Financial targets 2023 The Board of Directors decided on targets for the finan- cial year 2023 as announced in the 2022 full year report. Following the acquisition of Skycon Limited and the rec- ord-breaking Q1, the financial targets were upgraded with 15 mEUR on revenues and 5 mEUR on EBITDA. Fol- lowing a very strong H1, the targets were raised again by 10 mEUR on both revenue and EBTIDA. • Revenue of 315-325 mEUR; Exceeded at 327 mEUR • EBITDA before special items of 105-115 mEUR; In the high end of range at 111 mEUR • Net debt to EBITDA before special items <2.0; Met 2024 The Board of Directors has decided on financial targets for the Better Collective group for the year 2024: • Revenue of 390 -420 mEUR, implying 1 9-29% growth. • EBITDA of 125-135 mEUR implying 13-22% growth. • Net/debt to EBITDA stay below 3x. 2024 implications The targets factor in an eleven -month impact from the Playmaker Capital acquisition with the deal clos ing on February 6. The acquisition is expected to ramp up over time with expected flat revenue and earnings for 2024. More factors are c ontinued investment in developing the AdTech platform, several AI -projects and scaling commercial development. Further the continued North American recurring revenue share transition to invest in future sustainable growth coupled with high expecta- tions for the men’s European Championship this sum- mer. 2023- 2027 The long -term 2023 -2027 financial targets have been updated following the acquisition of Playmaker Capital. • Revenue CAGR of +20% (unchanged) • EBITDA margin before special items of 35-40% (previously 30-40%). • Net debt to EBITDA before special items of <3 (un- changed). 2023-2027 implications The long-term targets include M&A funded by own cash flow and debt, and not capital increases. With Play- maker Capital, Better Collective utilized cash, debt, treasury shares and a small capital increase, resulting in a minimal dilution of 3%. Hence , a large part of the ac- quisition was already included in the guidance , making the group more comfortable in its ability to reach these. Given the opportunity to move revenue from advertis- ing to performance marketing and the increased profit- ability therein the margin target is upgraded, narrowing it toward the high end. Given the nature of performance marketing and the change in cash flow, the margin up- tick will happen after 12-24 months. Disclaimer This report contains certain forward-looking statements and opinions. Forward-looking statements are state- ments that do not relate to historical facts and events. Such statements or opinions pertaining to the future, for example wording like; “believes”, “deems”, “estimates”, “anticipates”, “aims’, and “forecasts” or similar expres- sions are intended to identify a statement as forward - looking. This applies to statements and opinions con- cerning the future financial returns, plans and expecta- tions with respect to the business and management of the group, future growth , profitability, general eco- nomic and regulatory environment , and other matters affecting Better Collective. Forward-looking statements are based on current estimates and assumptions made according to the best of the group’s knowledge. These statements are inherently associated with both known and unknown risks, uncertainties, and other factors that could cause the results, including the group’s cash flow, financial condition, and operations, to differ materially from the results, or fail to meet expectations expressl y or implicitly, assumed or described in those statements or to turn out to be less favorable than the results ex- pressly or implicitly assumed or described in those statements. Better Collective can give no assurance re- garding the future accuracy of the opinions set forth herein or as to the actual occurrence of any predicted developments and/or targets. Considering the risks, un- certainties and assumptions associated with forward - looking statements, it is possible that certain future events may not occur. Moreover, forward -looking estimates derived from third-party studies may prove to be inaccurate. Actual results, performance or events may differ materially from those in such statements e.g. due to changes in general economic conditions, in particular economic conditions in the markets in which the group operates, changes affecting interest rate levels, changes affecting currency exchange rates, changes in competition levels, changes in laws and regulations, and occurrence of ac- cidents or environmental dam ages and systematic de- livery failures. We undertake no obligation to update or revise any forward -looking statements, whether be- cause of new information, future events or otherwise, except to the extent required by law. ===== SIDA 23 ===== Annual report Page 23 Annual report Page 23 Corporate governance ===== SIDA 24 ===== Annual report Page 24 Corporate governance report Better Collective A/S is a Danish public lim- ited liability company and is governed by the provisions of the Danish Companies Act. The registered office and headquarter is situated in Copenhagen, Denmark. Better Collective has been listed on Nasdaq Stockholm since June 8, 2018 , and on Nasdaq Copenhagen since November 17, 2023. Corporate governance framework The purpose of corporate governance is to ensure that a company is run sustainably, responsibly, and as effi- ciently as possible. In Better Collective, good corporate governance is about earning the confidence of share- holders, business partners, and legislators by creating transparency in decision -making and business pro- cesses. A well -defined and stru ctured distribution of roles and areas of responsibilities between sharehold- ers, the Board, and the management secures efficiency at all levels. Particularly, it allows the management team to focus on business development and thereby the cre- ation of shareh older value. The B oard of D irectors serves as a highly qualified dialogue partner for the management team supporting the outlined growth strategy, securing a tight risk management setup, and optimal capital structure. The group’s corporate govern- ance is based on applicable Danish legislation and other external rules and instructions, including the Danish Companies Act, Nasdaq Stockholm’s Rulebook, Nasdaq Copenhagen Rulebook, the Swedish Securities Council’s good practices in the stock market, the Swedish Code of Corporate Governance and Better Collective’s guide- lines, which include the Articles of Association, various policies, and other guidelines. Following the dual listing on Nasdaq Stockholm and Nasdaq Copenhagen Better Collective has resolved that it will comply with the Swedish Code instead of the Dan- ish Recommendations on Corporate Governance . The main corporate laws and rules on governance relevant for shareholders in a Danish public limited liability com- pany that is listed on Nasdaq Stockholm, and complying with the Code, are largely materially similar to the cor- responding Swedish rules that would apply for a Swe- dish public limited liability company under the same cir- cumstances. Cross-listing and corporate governance Better Collective is a Danish limited liability company and accordingly follows the rules, regulations, and guidelines as described above. As a dual listed company on Nasdaq Stockholm and Nasdaq Copenhagen, Better Collective is required each year to provid e an overview of the main differences between the Swedish Code and the Danish Recommendations. Shareholder engagement Election of Chair of the annual general meeting The Code stipulates the Chair of the annual general meeting shall be appointed by the Nomination Commit- tee. In a Danish context, the Board of Directors will usu- ally appoint a C hair of the general meeting , and this is not regulated in the Recommendations. Minutes of the annual general meeting The Code recommends that a shareholder who is inde- pendent from the company and its Board of Directors is appointed to verify and sign the minutes of general meetings. Such practice does not exist in Denmark and the minutes are approved and signed by the Chair of the general meeting in accordance with Danish Company Law. Policies Pursuant to the Recommendations, listed companies are to adopt certain policies and procedures, such as poli- cies regarding communication and investor relations, a tax policy as well as contingency procedures in case of a public takeover of the company. Such recommenda- tions are not included in the Code. However, Better Col- lective has adopted an information policy which governs both internal and external communications, including in relation to investors. Procedures and tasks of the Board of Directors Participation in daily management Pursuant to the Recommendations, any participation by a member of the Board of Directors in the daily manage- ment of Better Collective must be approved by the Board and publicly disclosed. No equivalent recommen- dation is a part of the Code. However, none of the mem- bers of the B oard of D irectors currently participate in the daily management of Better Collective. Board composition and Board Committees Independence of Board members The Code distinguishes between B oard members’ inde- pendence from Better Collective and its executive man- agement and independence from the group ´s major shareholders in two separate recommendations. Inde- pendence in relation to major shareholders is not a part of the Recommendations. However, to be considered in- dependent a Board member should not be a representa- tive of or be associated with a controlling shareholder. Chair of the Board The Code stipulates that the Chair of the Board shall be elected by the general meeting. This is not the case in a Danish context. Further, the specific tasks of the C hair are more detailed in the Code. However, Danish practice is in line with the tasks and responsibilities of the Code. The Recommendations stipulate that a deputy C hair shall be elected, which is not included in the Code. ===== SIDA 25 ===== Annual report Page 25 Board Committees Both the Code and the Recommendations stipulate that a company should have an A udit Committee, a Remu- neration Committee, and a Nomination Committee. The main difference between the Code and the Recommen- dations is that pursuant to the Code, a Nomination Com- mittee is not a Board Committee but instead consists of members elected directly by the shareholders. Whereas pursuant to the Recommendations , the Nomination Committee is a Board Committee elected by and among members of the B oard of D irectors. The tasks of the Nomination Committee in a Swedish context are also more comprehensive than the tasks of the N omination Committee in a Danish context. The Company follows the Swedish practice pursuant to the Code, and accordingly the Nomination Committee consist of shareholder elected Committee members and the tasks carried out are in line with the Recommenda- tions of the Code. Management remuneration The Recommendations contain provisions relating to management remuneration criteria, B oard compensa- tion as well as incentive programs. The Code does not include equivalent recommendations as the Swedish Corporate Governance Board has issued the separate “Rules on Remuneration of the Board of Di- rectors and Executive Management and on Incentive Programs” (the “Remuneration Rules”). The Remunera- tion Rules came into force on 1 January 2021 and contain extensive provisions on remuneration to the Board of Directors, executive management, and incentive pro- grams. However, the Remuneration Rules only apply to Swedish companies whose shares are admitted to trad- ing on a Swedish-regulated market (and to some extent companies whose shares are traded on other trading platforms) and are therefore not formally applicable to Better Collective. The share and shareholders Better Collective A/S was listed on Nasdaq Stockholm on June 8, 2018. As of November 17, 2023, Better Collec- tive is dual listed on Nasdaq Copenhagen . The number of shares outstanding on December 31, 202 3, was 55,367,418. Each share entitles the holder to one vote. The number of shareholders on December 31, 2023, was 4,821 which is a n increase from the 3, 669 shareholders on December 31, 2022. The largest shareholders on December 31, 202 3, were Chr. Dam Holding and J. Søgaard Holding (the C o- founders of Better Collective) with 10,671,179 shares each and each representing 19.27% of the votes and share capital in the company. Further information on the Better Collective share and shareholders is available in the section Share and shareholders on page 4 2 as well as on the group’s website. General meeting Pursuant to the Danish Companies Act, the general meeting is the group’s superior decision-making body. The general meeting may resolve every issue for Better Collective which does not specifically fall within the scope of the exclusive powers of another corporate body. F or example, the power to appoint executive management, which falls within the scope of the Board of Directors in limited liability companies that are man- aged by a Board of Directors. At the general meeting, the shareholders exercise their voting right on key issues, such as amendments of the Better Collective’s Articles of Association, approval of the annual report, appropriation of the group’s profit or loss (including distribution of any dividends), resolu- tions to discharge the members of the B oard of D irec- tors and the executive management from liability, the appointment and removal of members of the B oard of Directors and auditors and remuneration for the B oard of Directors and auditors. Other matters transacted at the meeting may include matters that according to the Articles of A ssociation or the Danish Companies Act, must be submitted to the general meeting. Time and place The annual general meeting must be held at a date that allows sufficient time to send the Danish Business Au- thority a copy of the audited and adopted annual report within four months of the end of the financial year. In Better Collective complies with the Swedish Code of Corporate Governance with the following exceptions As stipulated in Better Collective ’s Articles of Association, the Board of Directors ap- point the meeting Chair for the AGM instead of letting the Nomination Committee pro- pose a meeting Chair. The Articles also stip- ulate that the meeting Chair approves the AGM minutes instead of letting an A GM par- ticipant that is not a member of the Board or an employee of the company approve the minutes of the meeting. The respective reports on corporate govern- ance and sustainability do not include a part of the auditor ’s report covering the specific reports, as these subjects are not individu- ally addressed in the auditor ’s report. These deviations are due to differences between Danish and Swedish laws and practices. ===== SIDA 26 ===== Annual report Page 26 addition to the annual general meeting, extraordinary general meetings may be convened and held when re- quired. According to Better Collective A rticles of Asso- ciation, general meetings must be held in Greater Co- penhagen, Gothenburg, or Stockholm. Notice According to Better Collective’s Articles of Association, general meetings must be convened by the Board of Di- rectors giving written notice no earlier than five weeks and no later than three weeks prior to the general meet- ing. Pursuant to the Danish Companies Act, notices con- vening general meetings shall be made public on the group’s corporate website. If requested, shareholders shall receive written notice of the general meetings. Extraordinary general meetings must be held upon re- quest from the Board of Directors, or the auditor elected by the general meeting. In addition, shareholders that individually or collectively hold ten percent or more of the share capital can make a written request to the Board of Directors that an extraordinary general meet- ing be held to resolve a specific matter. Such extraordi- nary general meetings must be convened within two weeks of the Board of Directors’ receipt of a request to that effect. The notice to convene a general meeting must be made in the form and substance for public limited liability companies admitted to trading on a regulated market as stipulated in the Danish Companies Act. The notice must also specify the time and place of the general meeting and contain the agenda of the business to be addressed at the general meeting. If an amendment of the group’s Articles of Association is to be resolved at a general meeting, the complete proposal must be included in the notice. For certai n material amendments, the specific wording must be set out in the notice. As regards the annual general meeting, the Company must announce the date for the meeting as well as the deadline for any shareholder proposals no later than eight weeks before the scheduled date for the annual general meeting. Right to attend general meetings A shareholder’s right to attend a general meeting and to vote on their shares is determined based on the shares held by the shareholder at the date of registration. The date of registration is one week before the general meeting is held. The holding of each individual share- holder is based on the number of shares held by that shareholder as registered in the group’s share register maintained by Euroclear Sweden as well as any notifica- tions of ownership received by Better Collective for the purpose of registration in the share register, but not yet registered. To attend the general meeting, a shareholder must, in addition to the above-mentioned, also notify Better Col- lective of attendance no later than three days prior to the date of the general meeting, as stipulated by Better Collective’s Articles of A ssociation. Shareholders may attend general meetings in person, through a proxy or by postal vote, and may be accompanied by an advisor. All attending shareholders are entitled to speak at gen- eral meetings. ===== SIDA 27 ===== Annual report Page 27 Voting rights & shareholders initiatives Each share entitles the holder to one vote. All matters addressed at the general meeting must be decided by a simple majority vote, unless otherwise stipulated by the Danish Companies Act or Better Collective’s Articles of Association. A resolution to amend the Articles of Asso- ciation requires that no less than two thirds of the votes cast as well as the share capital represented at the gen- eral meeting vote in favor of the resolution, unless a larger majority is required by the Danish Companies Act (for example resolutions to reduce shareholder rights to receive dividends or to restrict the transferability of the shares) or the group’s Articles of A ssociation. Share- holders who wish to have a specific matter brought be- fore the general meeting must submit a written request to the group’s Board of Directors no later than six weeks prior to the general meeting. If the request is received less than six weeks before the date of the general meet- ing, the Board of Directors must decide whether the re- quest has been made with enough time for the issues to be included on the agenda. General meetings in 2023 The annual general meeting 202 3 was held on April 2 5, 2023, and approved the 2022 annual report, discharged the Board and executive management, and re -elected six out of six Board members, elected a Vice Chair of the Board, and re -elected the current auditor. The share- holders further approved the proposals from the B oard of Directors to authorize the Board of Directors to in- crease the group’s share capital without pre -emption rights for the existing shareholders and to authorize the BBoard of D irectors to acquire treasury shares. The shareholders adopted the remuneration report based on an advisory vote. On August 8, 2023, an extraordinary general meeting was held during which shareholders approved the pro- posals from the Nomination Committee regarding the election of Britt Boeskov and René Rechtman as the new members of the Board of Directors. During the meeting the shareholders were informed that the Board member Klaud Holse wished to resign as a member of the Board of Directors with effect as of the extraordinary general meeting. Electronic general meetings The Board of Directors is authorized to decide that gen- eral meetings are held as a completely electronic gen- eral meeting without physical attendance or partially electronic meetings. Annual general meeting 2024 The annual general meeting 2024 will take place on April 22, 2024, at 2.00 p.m. For more information, please see the section on the annual general meeting on the Better Collective’s corporate website. Nomination Committee According to the Code, the group must have a Nomina- tion Committee, the duties of which must include the preparation and drafting of proposals regarding the election of members of the Board of Directors, the Chair of the Board of Directors, the Chair of the general meet- ing and auditors. In addition, the Nomination Committee shall propose fees for B oard Members and the auditor. The group’s Articles of Association hold instructions and rules of procedure for the N omination Committee ac- cording to which the N omination Committee is to have at least three members representing the three largest shareholders per the end of August, together with the Chair of the Board of Directors. The names of the mem- bers of the N omination Committee must be published by Better Collective no later than six months prior to the annual general meeting. On August 31, 202 3, the two largest shareholders were Chr. Dam Holding and J. Søgaard Holding which are grouped. In accordance with shareholders’ decision, the Nomination Committee was appointed and is composed by four members in total: • Søren Jørgensen, Chair, appointed by Chr. Dam Holding and J. Søgaard Holding • Martin Jonasson, appointed by Andra AP-Fonden, also representing Tredje AP-Fonden • Michael Knutsson, appointed by Knutsson Holding AB • Jens Bager, Chair of the Board of Directors, Better Collective In all, the N omination Committee represented 49.5% of the total number of shares in Better Collective, based on ownership data as per August 31, 2023. Independence of Nomination Committee The Code requires the majority of the Nomination Com- mittee’s members to be independent in relation to the group and its management and that at least one of these shall also be independent in relation to the group’s larg- est shareholder in terms of voting power. All members are independent in relation to Better Collective and the group’s management and all members except for Søren Jørgensen are independent in relation to major share- holders. Nomination Committee meeting with Board members Each year, the Nomination Committee conducts individ- ual interviews with the Board members leading up to the AGM as a supplement to the board self -evaluation re- sults. Similarly, any new Board candidates meet with the Nomination Committee. Meetings of the Nomination Committee Ahead of the AGM 2024, the Nomination Committee has held three meetings. One member was not present dur- ing the third meeting. No fees have been paid for work on the Committee. ===== SIDA 28 ===== Annual report Page 28 Board of Directors After the general meeting, the B oard of Directors is the most superior decision -making body of the group . The duties of the B oard are set forth in the Danish Compa- nies Act, the group’s Articles of A ssociation, the Code and the written rules of procedure adopted by the Board of Directors, which are revised annually. The rules of procedure regulate, inter alia, the practice of the B oard of Directors, tasks, decision -making within the group, the Board of Directors’ meeting agenda, the Chair’s du- ties, and allocation of responsibilities between the Board of Directors and the executive management. Rules of procedure for the executive management, including in- struction for financial reporting to the B oard of D irec- tors, are also adopted by the Board of Directors. The Board meets according to a predetermined annual schedule. At least five ordinary Board meetings must be held between each annual general meeting. In addition to these meetings, extraordinary meetings can be con- vened for processing matters which cannot be referred to any of the or dinary meetings. In 202 3, 10 m eetings were held. Composition of the Board The members of the B oard of Directors are elected an- nually at the annual general meeting for the period until the end of the next annual general meeting. According to the group’s Articles of A ssociation, the B oard of D i- rectors shall consist of no less than three and no more than seven Board members. Furthermore, the Code stip- ulates that no deputy members may be appointed. Cur- rently, the Board of Directors is composed of seven or- dinary Board members elected by the general meeting: Jens Bager (Chair), Todd Dunlap, Therese Hillman (Vice Chair), Britt Boeskov, René Rechtman Leif Nørgaard, and Petra von Rohr. The Board attended Nasdaq’s stock market training course prior to the listing in 2018. Todd Dunlap and Britt Boeskov received Nasdaq training after joining the B oard. For information about the B oard members see page 36. Evaluation of Board performance The Board of Directors regularly evaluates its work through a structured process. The Chair is responsible for carrying out the evaluation and presenting the re- sults to the Nomination Committee. In 2023, an external management consultancy assessed the Board’s work, including the collaboration with the executive manage- ment. The assessment was based on a questionnaire. Every other year, the questionnaire is combined with personal interviews with each board and executive man- agement member. The evaluation was presented to and discussed by the B oard and subsequently the Nomina- tion Committee. In addition, the Nomination Committee conducted individual interviews with the B oard mem- bers leading up to the AGM. The overall conclusion was that the Board’s performance and efficiency is found to be satisfactory and that the B oard has a well- balanced mix of competencies. ===== SIDA 29 ===== Annual report Page 29 Diversity The Board composition must be set with appropriate- ness to the group’s operations, phase of development, and must collectively exhibit diversity regarding gender, age, nationality, experience, professional background, and business expertise. In 2023, the Board had an equal gender distribution and met the group’s policy on addi- tional diversity criteria based on age, nationality, and educational background. Gender distribution in management, cf. §99b Better Collective has set a target for the Board of Direc- tors of 40% of the underrepresented gender. The Board is made up of three women (43%) and four men ( 57%) whereby the split exceeds the 40% in a Board consisting of seven members. This is considered an equal gender distribution by the Danish Business Authority. It is man- agement’s view that the Board composition meets our policy on additional diversity criteria based on age, na- tionality, and educational background. For the other management levels across Better Collec- tive, the gender split in 2023 was 15% women and 85% men. This is an increase from 2022 (12% women and 88% men.) In the 2023 reporting, other management levels include the executive management and their direct re- ports, whereas in the 2022 reporting the other manage- ment level was included in the top management per- centage. Although new members of the other management level joined Better Collective in 2023 the target of un- derrepresented gender was not reached. Better Collec- tive recognizes that gender distribution at the other management level is unsatisfactory. We will continue the work to increase the share of the underrepresented gender at all management levels through new initiatives to ensure that both genders are represented in recruit- ment at the interview stage and similarly that gender is considered in succession planning. The Board has set a target for the other management levels of 25% to con- sist of the underrepresented gender by 2027. Gender diversity top management In 2023 Better Collective achieved gender equality in the top management level. Therefore, no new targets have been set. In contrast, in the 2022 annual report, Better Collective disclosed that the combined percent- age of underrepresented genders in both top manage- ment and other levels of management amounted to 12%. Gender diversity other management levels Other management levels include the executive man- agement and their direct report s, (executive manage- ment and SVP/VP) which equals 13 members in total. To improve the percentage of the underrepresented gen- der in the other management level, the company has in- cluded a representative of both gender s in the recruit- ment processes and will continue to do so in order to reach the target of 25 % by 2027. . Other Managerial positions (1 and 2) 2023 2024 2025 2026 2027 Total number of members 13 Underrepresented gender in pct. 15% Target figure in pct. 25% 25% 25% 25% 25% Year for fulfilment of target figure 2027 2027 2027 2027 2027 Top managerial position (Board of Directors) 2023 2024 2025 2026 2027 Total number of members 7 Underrepresented gender in pct. 43% Target figure in pct. 40% - - - - Year for fulfilment of target figure - - - - - ===== SIDA 30 ===== Annual report Page 30 Board Committees The Board of Directors has established two committees: the Audit Committee and the Remuneration Committee. The Board of D irectors has adopted rules of procedure for both committees. Audit Committee The Audit Committee consists of Leif Nørgaard ( Chair), Therese Hillman, and Petra von Rohr. The Audit Commit- tee’s role is mainly to monitor the group’s financial po- sition, to monitor the effectiveness of the group’s inter- nal control and risk management, to be informed about the audit of the annual report and the consolidated fi- nancial statements, to monitor the quality of the exter- nal audit, to review and monitor the auditor’s impartial- ity and independence and to monitor the group’s com- pliance with law and regulations related to financial matters. The Audit Committee has an annual work plan and has held five meetings in 2023. Remuneration Committee The Remuneration Committee consists of Jens Bager (Chair), Todd Dunlap, and Britt Boeskov, who has re- placed Klaus Holse. The Remuneration Committee’s role is primarily to prepare matters regarding remuneration and other terms of employment for the executive man- agement and other key employees. The R emuneration Committee shall also monitor and evaluate ongoing and completed programs for variable remuneration to the group’s management and monitor and evaluate the im- plementation of the guidelines for remuneration to the executive management which the annual general meet- ing has adopted. The R emuneration Committee has an annual work plan and has held three meetings in 2023. Executive management According to the Danish Companies Act and Better Col- lective’s Articles of A ssociation, the Board of D irectors appoints and removes the members of the executive management. The executive management is responsible for the day-to-day management of the group. Currently, the executive management consists of Jesper Søgaard as CEO, Flemming Pedersen as CFO and Christian Kirk Rasmussen as COO. The members of the executive man- agement are presented in further detail on page 40. The duties and responsibilities of the executive manage- ment are governed by the Danish Companies Act, Better Collective’s Articles of A ssociation, the rules of proce- dures for the executive management adopted by the Board of D irectors, other instructions given by the Board as well as other applicable laws and regulations. The executive management’s duties and responsibilities include, inter alia, ensuring that the group maintains ad- equate accounting records and procedures, that the Board of D irectors’ resolutions are implemented in the daily management of the group, that the Board of Direc- tors are up to date on all matters of importance to the group and that the day -to-day management of the group is carried out. Attendance at Board and Committee meetings Name Board Meetings Audit Committee Remuneration Committee Jens Bager (Chair) ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ - ◆ ◆ ◆ Therese Hillman (Vice chair) ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ - Todd Dunlap ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ - ◆ ◆ ◆ Klaus Holse ◆ ◆ ◆ ◆ Petra von Rohr ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ - Leif Nørgaard ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ - Britt Boeskov ◆ ◆ ◆ ◆ ◆ ◆ ◆ René Rechtman ◆ ◆ ◆ ◆ ◆ Attendance Non-attendance ===== SIDA 31 ===== Annual report Page 31 Remuneration to the Board of Directors and the executive management Remuneration to the Board of Directors Fees and other remuneration to Board members elected by the general meeting are resolved at the annual gen- eral meeting. At the annual general meeting held on April 25, 2023, it was resolved that a fee of EUR 135,000 is to be paid to the C hair and 90,000 EUR to the vice chair and that fees of EUR 45 ,000 is to be paid to each of the other B oard members. Work in a Board commit- tee is remunerated with EUR 13,500 for a chair position and EUR 6,750 for a regular member In 2021 , one-third of the Board of Directors’ fixed annual remuneration was paid out in shares in the group . Following approval at the Annual General Meeting on April 25, 2023, the Board fee in 2023 was paid in cash and an amendment to the remuneration policy means that payment in shares is no longer part of the policy. For the financial year 202 3, the Board of D irectors re- ceived remuneration as set out in note 5 on page 85. For additional details, see also the remuneration report for 2023 available from bettercollective.com. Remuneration to executive management Remuneration to the executive management consists of basic salary, variable remuneration, pension benefits, share-related incentive programs and other benefits. For the financial year 202 3, the executive management received remuneration as set out in note 5 on page 85. Remuneration policy The current remuneration policy was adopted at the an- nual general meeting on April 2 5, 2023, in compliance with section 139 and 139a in the Danish Companies Act Members of Better Collective’s Board of Directors and executive management receive a fixed annual remuner- ation. In addition, members of the executive manage- ment may receive incentive- based remuneration con- sisting of share-based rights. Finally, members of the ex- ecutive management may receive incen tive-based re- muneration consisting of a cash bonus (including cash bonuses based on development in the share price), on both an ongoing, single-based, and event-based basis. Cash bonus schemes for executive management may consist of an annual bonus, which the individual member of the executive management can receive if specific tar- gets of the group and other possible personal targets for Name and position Holdings at beginning of year Bought during the year Sold during the year Holdings at end of the year Market value* tEUR Jesper Søgaard, CEO 10,671,179 0 0 10,671,179 247,275 Flemming Pedersen, CFO 311,966 0 0 311,966 7,229 Christian Kirk Rasmussen, COO 10,671,179 0 0 10,671,179 247,275 Executive management, total 21,654,324 0 0 21,654,324 501,778 Name and position Holdings at beginning of year Bought during the year Sold during the year Holdings at end of the year Market value* tEUR Jens Bager, Chair 1,001,229 0 0 1,001,229 23,201 Therese Hillman, Vice Chair 1,375 0 0 1,375 32 Todd Dunlap, member 475 0 0 475 11 Klaus Holse, member 171,059 0 0 171,059 3,964 Leif Nørgaard, member 440,656 6,644 0 447,300 10,365 Petra von Rohr, member 22,037 0 0 22,037 511 René Efraim Rechtman, member 0 11,000 0 11,000 255 Britt Ingrid Boeskov, member 0 13,027 0 13,027 302 Board of directors, total 1,636,831 30,671 0 1,667,502 38,640 Total 23,291,155 30,671 0 23,321,826 540,418 * The end-of-year market values are based on the official share prices prevailing December 31, 2023. ===== SIDA 32 ===== Annual report Page 32 the relevant year are met. The maximum cash bonus shall be equivalent to 100 percent of the fixed base sal- ary of each eligible participant of the executive manage- ment. Payment of a bonus is only relevant when condi- tions and targets have been fully or partly met (as de- termined by the B oard of Directors). If no targets are met, no bonus is paid out. Targets for the executive management shall be agreed upon by the B oard of D i- rectors and the executive management. The general meeting will decide whether to establish a long-term in- centive program (LTI program). Internal controls The Board of Directors has the overall responsibility for the internal control of the group . The main purpose of the internal control is to ensure that the Better Collec- tive’s strategies and objectives can be implemented within the business, that there are effective systems for monitoring and control of the group’s business and the risks associated with the group and its business, and to ensure that the financial reporting has been prepared in accordance with applicable laws, accounting standards and other requirements imposed on listed companies. The Board of D irector’s responsibility for the in ternal control and financial reporting is governed by the Dan- ish Financial Statements Act, the Danish Companies Act and the Code. In addition, the Board of Directors has im- plemented an internal control framework based on the COSO standard, which focuses on the five areas: control environment, risk assessment, control activities, infor- mation as well as communication and monitoring. Control environment To create and maintain a functioning control environ- ment, the Board of Directors has adopted several steer- ing documents and policies, including rules of procedure for the B oard of D irectors, the Board Committees and the executive management with instruction for financial reporting to the Board of Directors. The policies include a tax policy, treasury policy, IT policy, information pol- icy, insider policy, instruction for insider lists and a Code of Conduct. Better Collective also has a group account- ing manua l which contains principles, guidelines, and processes for accounting and financial reporting. The division of roles and responsibilities within the rules of procedure for the B oard of Directors and the execu- tive management aim to facilitate an effective manage- ment of Better Collective’s risks. The Board of Directors has also established an A udit Committee whose main task is to monitor the effectiveness of the group’s inter- nal control, internal audit, and risk management, to be informed about the audit of the annual report and con- solidated financial statements, and to review and moni- tor the auditor’s impartiality and independence. The Board evaluates the need for an internal audit function annually. In 2023, given the size of the company, it was decided that an internal audit function is not currently needed. Better Collective applies an internal “signing & ap- proval” framework to ensure a clear and formalized dis- tribution and limitation of power, and to define and gov- ern guidelines for the delegation of authority to sign on behalf of the group . The group has furthermore estab- lished an IT governance structure to ensure that all ma- jor IT projects support Better Collective’s business goals, and that existing IT systems and resources are used op- timally. The group has implemented a whistle -blower scheme providing the ability to easily and anonymously report any observations of potentially destructive, un- ethical, or illegal activities related to Better Collective. Risk assessment Risk assessment includes identifying risks pertaining to the group’s business, assets and financial reporting as well as assessing the impact and probability of those risks, to ensure that actions to reduce or eliminate risks are analyzed and implemented. Within the B oard of Di- rectors, the Audit Committee is responsible for continu- ously assessing the group’s risks. Annually, the executive management must prepare an internal risk management assessment which is reported to the Audit Committee and subsequently to the B oard of Directors. The risk management assessment shall in- clude a follow-up on previous year’s work and a review of any changes to procedures, control systems and risk- mitigating actions. With regards to financial reporting, the CFO and the fi- nance department annually prepares a report for the Audit Committee, including a review of items subject to special risks and significant accounting estimates and judgements, allowing the A udit Committee to monitor the financial reporting process. The A udit Committee also evaluates the need for an internal audit function an- nually and makes recommendations to the B oard of Di- rectors. Control activities Control activities are performed for the purpose of pre- venting, detecting, and correcting any errors and irreg- ularities, including fraud. Control activities are imple- mented in the group’s systems and procedures, includ- ing financial reporting systems and procedures. Control activities include, for example, physical and electronic preventive access controls concerning sensitive and confidential information, preventive IT based controls limiting access to systems, joint approval procedures for electronic bank transfers and detective controls. Finan- cial control activities are performed in accordance with the group accounting manual and are carried out monthly and are documented. Information and communication Internal communication to employees occurs, inter alia, through policies, instructions, and blog posts, including a Code of Conduct which serves as an overall guiding principle for employees in all communication, an ===== SIDA 33 ===== Annual report Page 33 information policy which governs internal and external information as well as an insider policy , which ensures appropriate handling of insider information that has not yet been disclosed to the public. Additionally, the group’s CEO holds the overall responsibility for the han- dling of matters regarding insider information. The group’s investor relations function is led and super- vised by the CFO and the Senior Director of Investor Re- lations. The principal tasks of the investor relations func- tion are to support matters relating to the capital market as well as to assist in preparing financial reports, general meetings, capital market presentations and other regu- lar reporting regarding investor relations activities. Monitoring Compliance and effectiveness of internal controls are continuously monitored. The executive management ensures that the Board of Directors receives continuous reports on the development of the group’s activities, in- cluding the group’s financial results and position, and in- formation about important events, such as key con- tracts. The executive management also reports on such matters at each board meeting. The Board of Directors and the Audit Committee exam- ines the annual report and the interim reports and con- ducts financial evaluations based on established busi- ness plans. The Audit Committee reviews any changes in accounting policies to determine the appropriateness of the accounting policies and financial disclosure prac- tices. Furthermore, the Audit Committee also reviews the consistency of accounting policies across the group on a yearly basis. The efficiency of the key controls is evaluated at regular intervals and reported to the Board of Directors summa- rizing the performed evaluations and accounting for any deviations that must be managed. External audit The group’s auditor is appointed by the annual general meeting for the period until the end of the next annual general meeting. The auditor audits the financial state- ments prepared by the Board of Directors and the exec- utive management. Following each financial year, the auditor shall submit an audit report to the annual gen- eral meeting. The group’s auditor reports its observa- tions from the audit and its assessment of the group’s internal control to the Board of Directors. At the annual general meeting held on April 25, 2023, EY Godkendt Revisionspartnerselskab was re -elected as the group’s auditor with Jan C. Olsen as the lead auditor. It was also resolved that the fees to the auditor should be paid in accordance with normal charging standards and approved invoice. The total fee paid to the group’s auditor for the financial year 202 3 amounted to 581 tEUR, all of which regarded the audit assignment. Annual report Page 33 ===== SIDA 34 ===== Annual report Page 34 Risk management Better Collective’s management monitors and accesses risk development in the Better Collective group, continuously . Risk analysis and evaluation Through an e nterprise risk management process, sev- eral gross risks in Better Collective are identified. Each risk is described, including current risk mitigation in place, or planned mitigating actions. The subsequent analysis of the identified risks includes an inherent risk evaluation based on two main parameters: probability of occurrence and impact on future e arnings and c ash flow. Risk control The risk evaluation is presented to the Board of Direc- tors for discussion of and any further mitigating actions required, on an annual basis. Between the annual evalu- ation, the Audit Committee oversees the ongoing risk management process. The Board evaluates risk dynam- ically to cater for this variation in risk impact. The poli- cies and guidelines in place stipulate how Better Collec- tive’s management must work with risk management. Risk mitigation Better Collective’s IT department continuously monitors its global technical infrastructure, aiming to identify and minimize risk to the com- pany’s production and performance. Through well-established procedures and solutions, Bet- ter Collective can quickly restore critical busi- ness operations. Market regulation and legal risk Changes to applicable laws and regulations could lead to an increased burden of compli- ance. Contractual risk as well as legal risk re- lated to regulatory requirements are critical. Failure to meet or implement regulatory re- quirements concerning, for instance, data pro- tection, confidentia lity agreements, IPR, and fraud constitutes a risk. Cybercrime risk As a digital software -based company with a core business based on modern information technology, Better Collective’s failure to ade- quately protect itself against IT risk represents a distinct risk. Cybercrime including unauthor- ized access to Better Collective’s network and data could endanger applications as well as the infrastructure and the technical environment stored on Better Collective’s network. Recruitment and retention risk People remain the key drivers in everything that we do at Better Collective since our busi- ness is based on specialized expertise and inno- vation. Failure to attract, develop, and retain the most skilled employees and management talent constitutes a risk to the company and our ability to scale operations. Risk mitigation iGaming regulation provides transparency to the legal framework, which in turn enhances predictability. Better Collective has established a central legal function that, together with the commercial and business development opera- tions, ensures a stage-gate approach when new contracts are made and when new regulations or compliance are being imposed. Risk mitigation Better Collective’s values and employer brand- ing serve as strong tools for recruitment of tal- ent. We monitor employee performance and engagement through bi -annual development talks and annual workplace evaluations. New in- itiatives in the People and Culture space include a DEI board and training in diversity matters. ===== SIDA 35 ===== Annual report Page 35 Risk mitigation When relevant, we involve regulatory bodies in our licensing process for newly established en- tities. We aim to implement a performance based valuation of the acquired entities and to establish local governance/management for entities of a certain size. We implement local Fi- nance, HR, and Legal organizations dedicated to the entities when relevant. Acquisition risk With our acquisition focus increasingly turned to larger companies , the overall risk profile of Better Collective has changed, and regulatory as well as financial risk has increased. Especially when entering new markets by way of M&A and in the following integration with the rest of the group . Search engine and ranking risk Algorithm updates pose a risk to organic search and ranking possibilities and may trigger opti- mization challenges. The rise of AI chatbots may impact the way media content is produced and potentially the search behavior of users. Risk mitigation Regulatory compliance is systemized by the le- gal team. We are educating ourselves on safer gambling, on advertising standards and devel- oping resources to help our users navigate the sports betting industry. Deploying Mindway AI solutions further aids the safer gambling agenda. Transitioning to becoming a media group gradually makes us less dependent on gambling-related activities . ESG risk To Better Collective, the key ESG/sustainability risks lie within the social and governance spaces and less within the environment space since we are a digital business. Concerns re- lated to problematic gambling and reputational risk from not being perceived as acting respon- sibly or within the regulatory frameworks. Risk mitigation As these matters are rapidly changing, we have set up monitoring of the industry, newsletters and experts and have systems in place to share knowledge internally. Based on the monitoring, we are continually testing different tactics and solutions. Financial risk Financial risk management objectives and policies, in- cluding market risk, foreign currency risk, interest rate risk and credit risk are described in note 20 to the con- solidated financial statements. ===== SIDA 36 ===== Annual report Page 36 Board of Directors Jens Bager Chair of the Board and of the Remuneration Committee Born, 1959 Nationality, DK Present position since 2016 Education: holds a M.Sc in Economics and Business Administration from Copenhagen Business School. Professional background: Jens Bager was the CEO of ALK-Abelló A/S for 16 years before joining Better Collective, and prior to that served as EVP of Chr. Hansen A/S. Jens Bager is an Industrial Partner at Impilo AB, the Chair of Scantox Holding ApS and Marleybones Ltd, and has served on various boards in Denmark, Sweden, and France. He has extensive experience within general management of international and listed companies. Other assignments: Member of the executive board of Apto Invest ApS, Apto Advisory ApS, Tandlægen.dk and Sym- metry Administration ApS. Previous assignments: Board Chair of Ambu A/S, Heatex AB and Poul Due Jensens Fond. CEO of ALK-Abelló A/S. Independence in relation to: – Shareholders – The company Yes Yes Therese Hillman Vice Chair and member of the Audit Committee Born, 1980 Nationality, SE Present position since 2021 Education: holds a M.Sc. in Accounting and Finance from the Stockholm School of Economics with exchange terms at the University of Virginia and the University of North Georgia. Professional background: CEO of Network of Design (NOD), a group of Scandinavian design companies. Therese Hillman was prior to her current role as CEO of NOD the Group CEO of NetEnt. In this role, she steered the company during a turnaround phase, in a time of changing regulation and market conditions, US market expansion, and a large acquisition of the fast-growing competitor Red Tiger. Other assignments: Board Chair of String Furniture AB, Nordic eTrade AB, Grythyttan Stålmöbler, Kasthall AB and Sweden Concepts AB. Board member of Byarums Bruk, Cooee Design, Wall of Art and Norling Cavalin. Previous assignments : Prior to joining NetEnt in 2017, Therese Hillman worked at Gymgrossisten.com for ten years, where she was the CEO for the last six years, and prior to that she worked in the roles as COO and CFO. Former board member of Unibet. Independence in relation to: – Shareholders – The company Yes Yes ===== SIDA 37 ===== Annual report Page 37 Britt Boeskov Board member and member of the Remuneration Committee Born, 1978 Nationality, DK Present position since 2023 Education: holds a M.Sc. in Intercultural Communication and Management from Copenhagen Business School Professional background : Britt Boeskov has held positions in global companies such as Chief Experience Officer for Kindred Group, one of the largest gambling companies in the world. Until September 2022, Britt was SVP of Group Strategy and Execution in Better Collective. Other assignments: Serves on the Boards of MAG Interactive, Mindway AI, GAMING1 and Racecourse Media Group while she is also the principal owner of her own consultancy. Previous assignments: Being with Kindred from 2005 to 2022 Britt has held various positions, including Chief Program Officer and Chief Operating Officer, during which time she led and transformed the business through fundamental in- dustry changes, in terms of regulation, user expectations and technology advances. Independence in relation to: – Shareholders – The company Yes Yes Todd Dunlap Board member and member of the Remuneration Committee Born, 1966 Nationality, USA Present position since 2020 Education: holds two Bachelor of Science degrees (aerospace engineering and business administration), with a graduate in Business and International Management from Stanford University and Thunderbird School of Global Management. Professional background: Todd Dunlap is the current CEO and Board Chair of the startup OfferUp, one of the Seattle region’s only tech startups valued at more than 1 bnUSD. Prior to this role he was the CEO of North America for Book- ing.com and as such was responsible for the overall growth of the company’s business in the United States and Canada. Prior to joining Booking.com in 2012, Todd worked 14 years at Microsoft, most recently in the role of Vice President & COO of Microsoft’s Consumer & Online Division. Other assignments: Guest lecturer and mentor at the University of Washington’s Foster School of Business, and investor in Seattle-area SaaS AI/ML, data and eCommerce startups as a founding LP of Ascend.vc. Previous assignments: Todd Dunlap has served as strategic advisor for Booking Holdings, and Vice President and Man- aging Director of the Americas Region also at Booking.com. President and general manager at Microsoft Licensing, and former Board Advisor to Better Collective. Todd Dunlap also led the Internet Business Unit at WRQ, a global software and consulting firm. Independence in relation to: – Shareholders – The company Yes Yes ===== SIDA 38 ===== Annual report Page 38 Leif Nørgaard Board member and chair of the Audit Committee Born, 1955 Nationality, DK Present position since 2014 Education: Leif Nørgaard holds a M.Sc in Economics and Business Administration from Aarhus Business School and is a state authorized public accountant. Professional background : Leif Nørgaard has held senior positions in global companies such as CFO for Chr. Hansen Group, CFO for Dako Group, CFO for Teleca Group, and has served on boards in several countries. Leif Nørgaard is a professional investor in start-up companies. He has extensive experience in finance, start-ups, and growth companies. Other assignments: Leif Nørgaard is currently the board chair of Myselfie Aps, Zerv Aps, DM Greenkeeping Danmark A/S and K/S Sunset Boulevard, Esbjerg. He is a member of the executive board of AnnoAnno ApS, Ooono A/S, Hubb Aps Sunset Boulevard, Esbjerg Komplementar ApS and Robo Invest 2020 ApS,ONG Invest Aps and SNG Invest ApS. Previous assignments: Board member of Teklatech A/S, 2XL2016 ApS, Actimo LATAM Holdco ApS, DTU Science Park A/S, Dialægt/Citatplakat Aps and Komplementarsel, and Landshut Aps. Chair of the board of K/S SDR. Fasanvej, Fred- eriksberg and MuteBox ApS, Partner of ApS Komplementarselskabet SDR. Fasanvej, Frederiksberg. Independence in relation to: – Shareholders – The company Yes Yes René Rechtman Board member and member of the Remuneration Committee Born, 1970 Nationality, DK Present position since 2023 Education: holds a M.Sc. in Politics and International Relations from the University of Copenhagen. Professional background: René Rechtman is co-founder and CEO of Moonbug Entertainment, an award-winning global entertainment company behind some of the most popular childrens’ titles including CoComelon, Blippi, Little Angel and Morphle. Other assignments: Board member of The Guardian, Blast Aps, as well as Podimo and until recently also of JP/Politikens Hus. Previous assignments: Prior to setting up Moonbug, Rechtman was Head of Non-Linear Media at The Walt Disney Com- pany, which he joined through the 2014 acquisition of Maker Studios, where he served as both investor and President. Prior to this, Rechtman held senior leadership positions at AOL, GoViral. and TradeDoubler. Independence in relation to: – Shareholders – The company Yes Yes ===== SIDA 39 ===== Annual report Page 39 Petra von Rohr Board member and member of the Audit Committee Born, 1972 Nationality, SE Present position since 2018 Education: Petra von Rohr holds a M.Sc. in Economics from Stockholm School of Economics and McGill University in Montreal, Canada. Professional background: Petra von Rohr recently stepped down as the CEO of Biocool AB and she has experience from executive management positions both from the finance industry and the communications industry. Most recently, she was Head of Group Communications at Com Hem AB. Previous experience includes working as an equity analyst in London and Stockholm. She has extensive experience from working with corporate communication and investor rela- tions. Other assignments: Board member of Webrock Ventures Previous assignments: Member of the Executive Management team of Com Hem AB, Partner of Kreab AB, Board mem- ber of LinkFire, the Global Vector Control Standard, Lauritz.com A/S, Lauritz.com Group A/S, Novare Human Capital Aktiebolag and Takkei Trainingsystems AB. Independence in relation to: – Shareholders – The company Yes Yes ===== SIDA 40 ===== Annual report Page 40 Executive management Jesper Søgaard CEO & Co-Founder Born, 1983 Nationality, DK Present position since 2004 Education: Jesper Søgaard holds a M.Sc. in Political Science from the University of Copenhagen. Professional background: Jesper Søgaard founded Better Collective together with Christian Kirk Rasmussen in 2004 and has been working with and developing the Group’s operations since its beginning. Other assignments: Member of the board of directors of Rådhusholmen A/S, MM PROPERTIES, Over Bølgen A/S, Bet- terNow WORLDWIDE ApS, and Centerholmen A/S. CEO of J. Søgaard Holding ApS, and founding member of Dreamcraft Ventures Management ApS. Member of the executive board of Better Holding 2012 A/S and J. Søgaard holding A/S. Previous assignments (past five years) : Member of the board of directors of Bumble Ventures General Partners ApS, Bumble Ventures Management ApS, Bumble Ventures Invest ApS, Ejendomsselskabet Algade 30 -32 A/S, Symmetry Invest A/S, Shiprs Danmark ApS, Scatter Web ApS, Ploomo ApS, Gedoe A/S, and VIGGA.us A/S. Member of the executive board Bumble Ventures SPV ApS. Christian Kirk Rasmussen COO & Co-Founder Born, 1983 Nationality, DK Present position since 2004 Education: Christian Kirk Rasmussen holds a Bachelor of Commerce from Copenhagen Business School. Professional background: Christian Kirk Rasmussen founded Better Collective together with Jesper Søgaard in 2004 and has been working with and developing the Group’s operations since its beginning. Other assignments: Member of the board of directors Omnigame ApS and MM Properties ApS. Member of the executive board Chr. Dam Holding ApS, and Better Holding 2012 A/S. Founding member of Dreamcraft Ventures Management ApS. Previous assignments (past five years) : Board member of Bumble Ventures General Partners ApS, Bumble Ventures Management ApS, Bumble Ventures Invest ApS and Ejendomsselskabet Algade 30 -32 A/S. Member of the executive board Yellowsunmedia ApS. Member of the executive board Bumble Ventures SPV ApS. ===== SIDA 41 ===== Annual report Page 41 Flemming Pedersen CFO Born, 1965 Nationality, DK Present position since 2018 Education: Flemming Pedersen holds a M.Sc. (cand. merc. aud.) and HD (Bachelor of Business Administration) from Copenhagen Business School. Professional background: Flemming Pedersen has more than 25 years of management experience, whereof more than 20 years in executive positions in public companies. He has served as CFO of ALK -Abelló A/S, and was CEO and president of Neurosearch A/S. He has experience in general management, finance, accounting, tax matters, risk man- agement and capital markets. In addition, he has experience from board positions in both public and private companies in Denmark as well as internationally. Other assignments: Member of the executive board of Naapster ApS. Previous assignments (past five years): Chair of the Board Mindway AI ApS Annual report Page 41 ===== SIDA 42 ===== Annual report Page 42 The BETCO share and shareholders Better Collective A/S has been listed since June 8, 2018 , and is traded on the Nasdaq Stockholm and Nasdaq Copenhagen The group’s ticker is BETCO and BETCO DKK, respectively . Share price and trading The closing price on December 31, 2023, for the BETCO share was 256.50 SEK and BETCO DKK 172,20 DKK cor- responding to a total market cap of approximately 14,201 mSEK/ 9,534 mDKK. During the period from Jan- uary 1, 2023, to December 31, 2023, a total of 13.296.909 BETCO shares and a total of 973.808 BETCO DKK shares were traded at a total value of 1,029 mSEK/154 mDKK. The average number of shares traded per trading day was approximately 52.976 (BETCO) and 33580 (BETCO DKK), corresponding to a total value of 20 mSEK/13mDKK. An average of BETCO 52,976 and BETCO DKK 175 trades were completed per trading day. The highest price paid for BETCO during the period Jan- uary 1, 2023, to December 31, 202 3 was BETCO 299.00 SEK on November 7, 2023 and BETCO DKK 180.00 on December 27,2023. T he lowest price paid for BETCO was 127.10 SEK on January 2, 202 3 and BETCO DKK 139.20 on November 17, 2023. During the period from January 1, 202 3, to December 31, 202 3, BETCO share price increased by 101.6% and BETCO DKK price in- creased by 22.2%, while the OMX Large Cap list in- creased by 16.4%. Shareholders On December 31, 202 3, most of the share capital was owned by the company’s founders and institutions pre- dominantly in Sweden, Denmark, and the rest of Europe. On December 31, 202 3, Better Collective had 4,82 1 known shareholders, corresponding to a 31% increase from January 1, 2023 . The ten largest shareholders ac- counted for 62 % of the votes and share capital. The members of Better Collective’s Board of D irectors held a total of 1,508,416 Better Collective shares. The execu- tive management held a total of 21,654,324 Better Col- lective shares. The individual holdings can be found on page 35. Share capital and capital structure On 31 December 202 3, the share capital amounted to 553,674.18 EUR, and the total number of issued shares was 55,367,418. The company has one (1) class of shares. Each share entitles the holder to one vote at the general meetings. All shares in the market hold equal voting rights and equal rights to the company’s earnings and capital. Annual report Page 42 ===== SIDA 43 ===== Annual report Page 43 Top 10 largest shareholders as of December 31, 2023 Owners Num. of shares Capital and votes Jesper Søgaard 10.671.179 19,27% Christian Kirk Rasmussen 10.671.179 19,27% Chr. Augustinus Fabrikker A/S 2.523.000 4.56% Andra AP-fonden 2.170.724 3.92% Danica Pension 1.804.353 3.26% Tredje AP-fonden 1.480.092 2.67% Teacher Retirement System of Texas 1.474.446 2.67% Better Collective A/S 1.387.580 2.51% Deka Investments 1.268.300 2.30% Knutsson Holdings AB 1.090.000 1.98% Top 10 largest shareholders 34.540.853 62.41% Other shareholders 20.826.565 37.59% Total number of shares 55.367.418 100% Source: Modular Finance AB. Data compiled from Euroclear, Morningstar, Finansinspektionen, Nasdaq Share price and trading Closing price 2023 BETCO 256.50 SEK Closing price 2023 BETCO DKK 172.20 DKK Corresponding MCAP 14,202 mSEK Total number of shares traded on Nasdaq Stockholm exchange 9,546 mDKK Total number of shares traded on Nasdaq Copenhagen exchange 13.296.864 Traded total value on Nasdaq Stockholm exchange 973.808 Traded total value on Nasdaq Copenhagen exchange 1.029.976.589 Avg. shares traded on Nasdaq Stockholm exchange per day 52.967 Avg. shares traded on Nasdaq Copenhagen exchange per day 33.579 Avg. traded total value per day Nasdaq Stockholm exchange (SEK) 12.151.556 Avg. traded total value per day Nasdaq Copenhagen exchange (DKK) 5.328.932 Total number of trades on Nasdaq Stockholm exchange 139.151 Total number of trades on Nasdaq Copenhagen exchange 5.082 Avg. trades per day on Nasdaq Stockholm exchange 554 Avg. trades per day on Nasdaq Copenhagen exchange 175 Highest price paid between 2023-01-01 to 2023-12-31: (2023-11-07) BETCO (SEK) 299 Highest price paid between 2023-01-01 to 2023-12-31: (2023-12-27) BETCO DKK (DKK) 180 Lowest price paid between 2023-01-01 to 2023-12-31 : (2023-01-02) BETCO (SEK) 126.3 Lowest price paid between 2023-01-01 to 2023-12-31 (2023-11-17) BETCO DKK (DKK) 139.2 Share price change from closing 2022-12-30 to 2023-12-29 BETCO 101.6% Share price change from closing 2022-12-30 to 2023-12-29 BETCO DKK 22.2% OMX Large Cap list (OMXSLCGI) change from closing 2022-12-30 to 2023-12-31 16.4% Shareholders: Known shareholders December 2023 4.821 Change in number of known shareholders between 2023-01-01 to 2023-12-31: (3.669 -->4821) 31% Top 10 largest shareholders % 62% Source: Modular Finance AB. Data compiled from Euroclear, Morningstar, Finansinspektionen, Nasdaq ===== SIDA 44 ===== Annual report Page 44 Dividend policy Better Collective has successfully executed an acquisi- tion strategy since 2017, completing more than 30 ac- quisitions so far. The M&A-pipeline is strong with the op- portunity to acquire large companies. Therefore, the company does not expect to pay dividends until further. The Board of D irectors will revisit the capital structure of the Group annually and evaluate whether to pay div- idends. The decision to pay dividends will be based on the company’s financial position, investment needs, li- quidity position as well as general economic and busi- ness conditions. If the Board of Directors finds it appro- priate, dividend pay-out may be partially or wholly sub- stituted by a share buy -back. Thus, the B oard has pro- posed that no dividend is paid out for the financial year of 2023. Individuals with insider position Listed companies are required to record a logbook of in- dividuals who are employed or contracted by the com- pany and have access to insider information relating to the company. These can include insiders, but also other individuals who have obtained inside i nformation. Bet- ter Collective records a logbook for each financial report or regulatory release containing information that could affect the share price. Investor relations Better Collective shall provide correct, relevant , and clear information to all its shareholders, the capital mar- ket, society, and the media, at the same time. Infor- mation that is deemed to be inside information shall be published so that it reaches the public in a quick, non - discriminatory manner. All im portant events that could influence the value of Better Collective shall be commu- nicated as soon as possible, that is in direct connection with the decision being taken, the election taking place or the event becoming known to Better Collective. The Better Collective website, www.bettercollective.com, contains relevant material for shareholders, including the current share price, press regulatory releases, and general information about the company. Better Co llec- tive maintains a quiet period of 30 days prior to the pub- lication of interim financial reports. During this period, representatives of the Group do not meet with financial media, analysts or investors. Analysts covering Better Collective ABG Sundal Collier Oscar Rönnkvist oscar.Ronnkvist@abgsc.se Cantor Fitzgerald Edward James Edward.james@cantor.com Jefferies James Wheatcroft jwheatcroft@jefferies.com Nordea Markets Sebastian Grave Peter.sebastian.grave@nordea.com Redeye Hjalmar Ahlberg hjalmar.ahlberg@redeye.se Contact Mikkel Munch-Jacobsgaard Senior Director of Investor Relations, Corporate Com- munications and Group Strategy investor@bettercollective.com ===== SIDA 45 ===== Annual report Page 45 Sustainability Report Annual report Page 45 ===== SIDA 46 ===== Annual report Page 46 Founder statement We are pleased to present Better Collec- tive’s Sustainability Report for the year 2023, which showcases our ongoing com- mitment to sustainable environmental, so- cial and governance practices . Since the inception of Better Collective, our unwavering commitment has been to deliver compelling and immer- sive sports content to our users. This commitment has helped shape our vision to become the leading digital sports media group along with our missio n to excite sports fans through engaging content and foster pas- sionate communities worldwide. Positioned as a leader at the crossroads of media, entertainment, and iGaming, we reach hundreds of millions of sports fans and enthu- siasts, bringing with it the obligation to ensure a respon- sible and sustainable offering including editorial guide- lines, proper segmentation, and safer gambling re- sources. Offering transparency Championing transparency is a cornerstone of our sus- tainable growth strategy. As we are continually growing our business and rapidly adding new entities, we dedi- cate our attention to initiatives that allow us to grow sustainably. Perhaps most importantly we want to guide sports fans towards Better Collective brands before they embark on their sports betting journey. By doing so we ensure that we can educate the user before they em- bark on a potential sports betting venture. In this jour- ney we offer transparency in what licensed partners there are and how their offers differ. Safer gambling initiatives Better Collective plays a pivotal role in channeling sports fans responsibly to licensed sportsbooks in regu- lated markets. In the online marketplace , users are met with a multitude of offers, some of which are in markets without regulations , meaning that user protection measures may not be in place and marketing practices non-compliant. Positioned strategically in the value chain, our objective is not only to educate sports fans but also to direct them towards licensed sportsbooks to safeguard their interests. As always, safer gambling is a key element in our sus- tainability efforts, and our subsidiary Mindway AI has once again been an industry lighthouse within this field. In late 2023, the National Council on Problem Gambling partnered with Mindway AI to enhanc e safer gambling initiatives. We are extremely proud of the exciting part- nership with NCPG nationwide in the US. This collabora- tion is a testament to our commitment to innovation in safer gambling and a shared vision of creating a safer future, paving the way for industry transformation and redefining what is possible. Sustainability commitment Our dedication to sustainability is not confined to our business operations but extends to supporting the broader sustainable development of our world and in- dustry. In 2019, Better Collective committed to incorpo- rate the UN Global Compact and its 10 principles into our strategy, culture, and day -to-day operations. With this report, which is also our Communication on Progress, we renew our ongoing commitment to the initiative as well as our continued support for the Sustainable Devel- opment Goals (SDGs). As a result of our commitment, we persistently strive to operate in ways that meet fundamental responsibilities in the areas of human rights, labor , environment and anti-corruption. We see our efforts and commitment as a constant work in progress which each year gets better, and we strive to supply the data to support transpar- ency of our efforts. Better together In early 2023, Better Collective joined the All- In Diver- sity Project , which is an industry -driven initiative to benchmark diversity, equity, and inclusion for the global sports media industry. We are proud to join as the first non-sportsbook founding member to provide guidance and support sharing best practices and resources. Working to further our DEI agenda during 2023, an ad- vanced and updated DEI framework was developed for the group together with new DEI targets for the ongoing year. Better Collective m arked International Women’s Day (IWD) by teaming up with the All- in Diversity pro- ject to pay tribute to women around the world. Unfortu- nately, the job market is to this day still quite gender - imbalanced and that curbs developments in businesses as well as society. The business community plays a large role in the battle to create a more inclusive society and by joining such initiatives Better Collective takes part in identifying and making businesses more diverse. Being a big international group with 45 nationalities rep- resented across 20 offices across the world, we decided to roll out unconscious bias training across the group for all employees to participate in during 202 3. We have also put in place practices in our recruitment process to minimize the gender gap within the group, and 2023 in- itiatives included awareness of possible bias in our re- cruitment processes, including training for hiring man- agers, job ad terminology, screening , and the develop- ment of a recr uitment policy stating that every job in- terview should have minimum two genders represented in the first interview. Developing talents Another year has gone by, and we cannot fail to mention our successful in-house academies. Since 2021, Better Collective has been running its academies in Niš, Serbia, which targets the local youth by encouraging them to ===== SIDA 47 ===== Annual report Page 47 enroll in one of our education programs tailored by Bet- ter Collective. Having our own, specially designed training delivered in the form of SEO - (search engine optimization), SEM - (search engine marketing), WordPress-, Full Stack-, and Quality Assurance-Academies is a key long-term play in ensuring Better Collective can continue to hire best -in- class talents, who already come equipped with the skill sets required to hit the ground running. Not only are t he academies beneficial to Better Collec- tive, but they also provide an alternative education and subsequent career opportunity for the youth in Niš. In 2023, we enrolled a total of 73 participants across 14 academies, and we are proud to share that 75% of the enrolled candidates today are part of the Better Collec- tive group. Environmental responsibility Environmental responsibility remains a core facet of our sustainability approach. Rigorous tracking of carbon emissions for fi ve consecutive years underscores our commitment to minimizing our environmental impact. While our online business inherently limits our carbon footprint, we take proactive measures to address travel- related emissions. With offices across the world, we value the opportunity to meet in person to create closer ties between teams and similarly for business contacts, not least after being cut off from meetings during the pandemic. That said, we have also fully embraced the virtual meeting facilities and we are carefully consider- ing when to fly. Throughout 2023, we have continued to update and develop our policies, systems, and pro- cesses to manage and mitigate social, governance and environmental risks. Looking ahead Our commitment to forging a more sustainable future for our group and stakeholders remains unwavering, and we look forward to setting new benchmarks in the years to come. We continue to let our mission lead us in our efforts to become an even more sustainable group with trusted products and brands, while our framework and strategy steer us to be and do better. Christian Kirk Rasmussen Co-founder & COO Jesper Søgaard Co-founder & CEO Annual report Page 47 ===== SIDA 48 ===== Annual report Page 48 Reporting framework The present report covers the financial year January 1, 202 3, to December 31, 202 3, and constitutes our statutory reporting cf. the Danish Financial Statements Act, Sections 99a and 99d and 107d as well as the EU Taxonomy regulation. Framework and commitments To give our stakeholders an overview of our perfor- mances, the report puts forth our current sustainability efforts and presents our focus areas, ambitions, achieve- ments, and goals. The report addresses any relevant so- cial, governance and environmental issues relating to Better Collective’s activities. To operationalize our sustainability strategy , we have built on our framework which we introduced in the 2020 sustainability report. In this report, we have further aligned our framework to the Environmental, Social and Governance factors (ESG) and related them to our busi- ness operations and key stake holders. We have made sure that each area contributes to the positive develop- ment of the chosen Sustainable Development Goals (SDGs) and/or respects the UNGC ten guiding princi- ples. The report also serves as our Communication on Progress as we renew our ongoing commitment to the initiative and our continued support for the SDGs. Our overall ambition is to use our leading position to influ- ence and support safer gambling and a sustainable de- velopment of society – for the benefit of our employees, shareholders, users, partners, industry, and our busi- ness. Our commitment is founded on respect for the core principles of human rights (including labor rights), the environment (including climate), and anti-corruption as reflected in the UN Guiding Principles for Business and Human Rights and the OECD Guidelines for Multina- tional Enterprises. This commitment is embedded in our strategy and business operations. The ESG key figures presented in our reporting take their departure in the ESG key figure overview as pub- lished by The Danish Finance Society / CFA Society Den- mark, FSR – Danish Auditors, and Nasdaq Copenhagen. The reported data is uploaded to Nasdaq Nordi c’s ESG Data Portal certifying Better Collective as a Nasdaq ESG Transparency partner. Continuity While we have further aligned our focus areas to the ESG framework, we have ensured continuity in report- ing. Our ESG metrics have all been continued from the previous sustainability report and for 2022 we have im- plemented new data points for increased transparency and in preparation for the upcoming Corporate Sustainability Reporting Directive to come into force from the financial year 2024. Balance Throughout the report we describe our efforts and achievements, whether they are positive or negative. We ensure this by continuing to report on the same met- rics year after year and only adding to rather than dis- continuing reporting on those metrics. ===== SIDA 49 ===== Annual report Page 49 Materiality assessment The report primarily focuses on the topics that are con- sidered the most important to our business operations. These topics have been selected and prioritized based on a double materiality assessment performed by Better Collective’s management and the sustainability board. The assessment is carried out as a mix of desk research, internal workshops, questionnaires and dialogue over time with our primary stakeholders for sustainability, and the board. We consider our stakeholders for sus- tainability to be our shareholders, our partners and sports fans, our employees, regulatory authorities, and society as a whole. The assessment includes how our ac- tivities may affect society negatively and how society may affect the company negatively. The sustainability data collection in the present report relates to Better Collective’s operations for 202 3, and further addresses our ambitions and KPIs for the future both short- and long-term. The outcome of our materi- ality assessment is listed in the tables below. Major Safer gambling Talent attraction and retention Employee development Diversity, equity and inclusion Significant Business ethics Cybersecurity Responsible marketing Anti-corruption Moderate Data/privacy protection Tax transparency Climate risk ===== SIDA 50 ===== Annual report Page 50 ESG strategy Responsibility as well as sustainability are ingrained elements of Better Collective’s business model and have been the cornerstone of our group since our incorporation in 2004. ===== SIDA 51 ===== Annual report Page 51 Sustainability governance Good and reliable governance is essential to run a business responsibly while also being able to realize our ambitious strategic goals. The governance of Better Collective’s sustainability ef- forts defines the role of the Board and its Committees as well as specifying the powers the Board delegates to our group management. We rely on clear terms of reference for the sustainability board to support and advise us as we put our strategy into action. To further the sustainability agenda, we have put in place a DEI board and a safer gambling board to address these matters across our organization, gathering expertise from relevant teams. The insights from these groups feed into the group management and Board’s decision-making. The Board of Better Collective Our Board is a diverse one in terms of gender and na- tionality. Members have expertise that includ es wide - ranging board and leadership experience as well as spe- cific skills such as understanding of sustainability, fi- nance, the iGaming industry, technology and digital. The Board has ultimate responsibility for reviewing, monitoring, and guiding the strategy of Better Collec- tive, as well as its conduct. Our Board members provide constructive challenges, strategic guidance , and spe- cialist advice, bringing their diverse experience to our discussions and decision-making. The Board has overall accountability for the manage- ment and guidance of risks and opportunities, including those associated with aspects of sustainability, such as operating a compliant business, promoting safer gam- bling, implementing socially responsible conducts, envi- ronmental responsibility, and ethical behavior. See risk management on page 35 for sustainability risks. ===== SIDA 52 ===== Annual report Page 52 Social Our people It is our long -term commitment to foster and uphold an inclusive and diverse workplace by implement ation of socially responsible conducts and elimina tion of discriminatory practices. Our business is based on specialized expertise and innovation, this is why we see people as a core element in everything that we do. We believe it is crucial to consistently cultivate an inclusive and diverse employment environment that promotes the rights of the individual. These efforts support the SDG 8 in promoting inclusive, sustainable, and productive employment for everyone at Better Collective. Onboarding and learning New employees, including those welcomed from ac- quired companies, are introduced to Better Collective and our policies through an extensive onboarding program. We conduct biannual development dialogues between manager and employee to discuss perfor- mance and further development for each individual em- ployee. Our leadership development initiative ensures the continuous professional development of our manag- ers to match the ever -changing nature of our business. In October 2023, we initiated our leadership trainin g program, delivering four modules across various local Better Collective offices. A total of 80 managers actively participated in this initiative. Notably, unlike the 2021 - 2022 program, the 2023 program was conducted in - person, facilitating more direct interaction and engage- ment. By supporting the professional and personal develop- ment of our managers, we enable them to identify and deal with challenges in their respective teams. Ulti- mately, such initiatives ensure the well- being of all em- ployees and make Better Collective an attractive and re- spected workplace. Measuring our work culture We conduct an annual workplace survey, and the 2023 results indicated a healthy and effective work environ- ment with engaged and highly motivated employees. Our engagement score of 84 % (2022 : 83%) is high though fluctuating year to year which may also reflect our continuous growth by new hires and entire teams through acquisitions. The survey returned an unsatisfac- tory number of harassment cases (10 in 2023 against 11 in 2022). As the survey is anonymous , we can only investigate the cases that are also reported to HR of which we have had none that were considered severe. During the year we implemented unconscious bias train- ing to educate all employees and encourage them to come forward if they experience harassment of any kind for the matter to be dealt with. We will strive to increase openness while working to bring down the number of cases. We recognize the risk for the well -being of the employees exposed to harassment of any kind as well as for our work environment. Health and safety We give priority to health and safety at work in compli- ance with the regulations and standards in the countries in which we operate. We run local health and safety ini- tiatives to assess health and safety risks and to generate preventive solutions. The heal th and safety committee issues guidelines, performs workplace evaluations, and maintains the fire instructions and evacuation plan. We have implemented a more flexible working schedule as working from home (WFH) has proven efficient for most of our employees, both in terms of productivity and improving the work-life balance. We follow and ad- here to the guidelines set out by the authorities where applicable. Depending on local customs, our offices pro- vide employees with internet allowance, IT equipment and office furniture. In this way, we make sure they have the best physical condition at their home office. We had 3 reported cases of workplace injuries in 2023 (2022: 0). We place strong emphasis on promoting the physical health and well-being of our employees, which we pro- moted through various initiatives during 2023, including meditations, humanitarian races, and various sports tournaments. Better Collective’s office located in Niš, Serbia, encouraged health and safety at work through an initiative to also help others by participating in an IT race “ Stafeta Srcem”. 16 employees participated in the race and raised funds which were donated to the Clinical Center for Anesthesiology. The humanitarian race was a dynamic blend of teamwork and innovation, with di- verse teams coming together to make a real difference. A reminder that when we work together creatively, we can achieve incredible things , and Better Collective’s team placed second in the race. During 2023 other initi- atives supporting the physical wellbeing of the group in- clude an IT Basketball League and a Football League. Movin’ May was a month -long campaign for the North American business created during the Mental Health Awareness month. This included a step count challenge throughout the month utilizing an app called to track steps on one’s smartphone. All participants were formed in teams; hence collaboration was greatly encouraged. From the initial fitness challenge to newly formed teams, every aspect of the campaign was designed to inspire and motivate employees to incorporate physical activity into their daily routines. ===== SIDA 53 ===== Annual report Page 53 The project was met with positive reactions resulting in a high engagement rate of 49% participation from the total number of employees. At first, the goal was set at 18,000,000 collective steps, however the teams ex- ceeded the goal by 201% and amassed rema rkable re- sults of 36,228,125 steps. Acknowledging the importance of mental health and its impact on work , Better Collective also implemented meditation classes during 2023. Meditation has turned out to be one of the most effective ways to decrease stress, improve concentration and provide calmness, which is why virtual meditation sessions were hosted during October in honor of World Mental Health Aware- ness. These sessions garnered an impressive turnout, with over 100 participants, and the sessions were led by Michael Rich, the founder of Good Work Coaching. Ses- sions provided attendees with valuable lessons on how to cultivate mindfulness, resulting in overwhelmingly positive feedback from employees. Diversity, Equity & Inclusion, cf. §107d In our operational ethos and concerning the structure of our leadership, we strive to foster equity through aware- ness of age, educational background, professional and international experience in recruitment and staff reten- tion processes, ensuring equal pay and access to train- ing opportunities, while maintaining a steadfast zero - tolerance stance against workplace harassment. As out- lined in our diversity manifesto, we are dedicated to cul- tivating a varied workforce and inclusive environment. Diversity encompasses numerous dimensions ethnicity, Better Collective is committed to providing equitable opportunities to all members of management through- out our organization, supported by robust policies and benefits aimed at promoting diversity and equality. Our Diversity, Equity, and Inclusion (DEI) Board actively engages our employees in these endeavors through em- ployee resource groups. Management affirms that these policies are upheld, as diversity and inclusion criteria have been integral in the selection processes for both the Board of Directors and other managerial positions in 2023. At Better Collective we strive to foster diverse teams and we see this as essential for driving innovation, productivity, creativity, and the ability to attract top tal- ent. Working to further our DEI agenda during 2023, an advanced and updated DEI framework was developed. With the new framework co -founder and CEO, Jesper Søgaard was announced as the new Chair of the DEI Board and new DEI targets for the ongoing year were developed. Structural changes of the DEI framework brought significant success, with enhanced collabora- tion and efficiency . With its agenda and n ew updated DEI targets, Better Collective marked International Women’s Day (IWD) by teaming up with the All -in Di- versity project to pay tribute to women around the world. Additionally, the group also rolled out uncon- scious bias training to the entire organization during 2023 and reached an impressive participation rate of 89%. In celebration of United Nations Day on October 24, Better Collective put together the Better Collective Cookbook to unite and celebrate the rich tapestry of di- versity and cultures within the entire group. Gender distribution Better Collective operates within an industry predomi- nantly led by men, encompassing both technology and sports betting. Recognizing this disparity and aiming to contribute positively to Sustainable Development Goal 5, initiatives promoting diversity and inclusion were pri- oritized in our agenda for 2023. These initiatives focused on raising awareness of potential biases in our recruit- ment processes, which included training for hiring man- agers, refining job ad language, and implementing screening measures. Despite these efforts, by the end of 2023, the proportion of underrepresented gender (women) within the Better Collective group stood at 31%, a marginal increase from the 29% recorded in 202 2. This lack of progress indi- cates a deviation from our target of achieving 35% rep- resentation by 2030. Collaboration and commitment to further the gender equality agenda In early 2023, Better Collective joined the All- In Diver- sity Project , which is an industry -driven initiative to benchmark diversity, equity, and inclusion for the global iGaming sector. We are proud to join as the first non - ===== SIDA 54 ===== Annual report Page 54 sportsbook founding member alongside the likes of En- tain, Caesars, Betsson, Flutter and Kindred, to provide guidance and support sharing best practices and re- sources. We have further shown our commitment to gender equality in signing both the Confederation of Danish In- dustry’s (DI) Gender Diversity Pledge along with the UN’s Women Empowerment Principles. The job market is to this day still quite gender- imbalanced and that curbs developments in businesses as well as society. The business community plays a large role in the battle to create a more inclusive society and by joining these ini- tiatives Better Collective takes part in identifying and making businesses more diverse. The 2023 initiatives included awareness of possible bias in our recruitment processes, including training for hir- ing managers, job ad terminology, screening , and the development of a recruitment policy stating that every job interview should have minimum two genders repre- sented in the first interview. By the end of the year Bet- ter Collective group counted 31% of the underrepre- sented gender (women) against 29% in 2022 which means we have not made pro gress towards our goal of reaching 35% by 2030. Human rights Better Collective persistently strives to be a responsible corporate citizen, which entails respecting human rights and supporting the protection as well as advancement of human rights. To solidify our commitment, we con- tinue to commit to our human rights policy. We continue to work on human rights due diligence process es to move us from commitment to action. So far, we consider our salient human rights issues to relate to our own workforce. During the current accounting period, all new employees have been trained in human rights , which helps minimize the risk of potential misconduct. No hu- man rights issues were identified during the 2023 finan- cial year. Developing talents Since 2021, Better Collective has been running its acad- emies in Niš, Serbia, which targets the local youth by en- couraging them to enroll in one of the education pro- grams tailored by Better Collective. Having our own, specially designed training delivered in the form of the SEO (search engine optimization ), SEM (search engine marketing), WordPress, fullstack, and quality assurance academies is a key long -term play in ensuring Better Collective can continue to hire best -in- class talents, who already come equipped with the skill sets required and can hit the ground running. Not only are t he academies beneficial to Better Collec- tive, but they also provide an alternative education and Eurocleasubsequently career opportunity for the youth in Niš. By educating the local youth in tech and marketing we also contribute to lowering the general unemployment rate in Serbia. It is a true win -win situa- tion being able to give back to the community while fur- thering our own competitive advantage . In 202 3, we enrolled a total of 73 participants across 14 academies. 75% of the candidates are today part of the Better Col- lective group. Annual report Page 54 ===== SIDA 55 ===== Annual report Page 55 Social Our users For our users, our long -term commitment is to promote safer gambling through edu- cation. Ultimately, the focus on safer gam- bling and being a responsible business is what grants us our social license to oper- ate. As a digital sports media group , we derive a significant part of our revenues from our user’s engagement in sports betting with our sports book partners Better Col- lective views sports betting purely as a form of enter- tainment and wants to make sure that sports fans and employees’ betting experiences remain as a form of fun and entertainment. In June 2023 , Better Collective im- plemented mandatory safer gambling training for all employees within the group. Safer gambling resources We want to ensure that our users are better suited to navigate the iGaming world by visiting a Better Collec- tive website before registering an account with a sports- book. We focus on the teaching of strategies and the presentation of insightful information and data to make our users more confident in their betting. However, we do not, and cannot, guarantee winning – and we will never claim to do so. As Better Collective is not a sportsbook, we rely on our partner sportsbooks to scan for user behavior and tak e action when a sports fan shows signs of at-risk or problem gambling behavior. We can educate sports fans, e.g ., by making sure that they know the legal gambling age, of possible adverse effects of gambling, and prevention. By taking respon- sibility in protecting end -users from potential negative health-impacts - in this case gambling addiction - and by promoting mental health and well-being through var- ious initiatives, it is our goal to aid the positive advance- ment of SDG 3. We offer safer gambling resources on our websites, as well as aa Betting Academy to educate users. To ensure that safer gambling is well coded to our business prac- tice Better Collective deployed two policies on safer gambling, one internal policy and one external policy both available on the corporate website. The policies are revised on an annual basis. Additionally, Better Collec- tive uses the Gamalyze software on its internal em- ployee platform and encourage s all employees to take the test annually. The Gamalyze self -test is also rolled out across the group’s sports me dia portfolio for exter- nal use. Collectively we are better We strongly believe that the long -term sustainability and growth of the sports betting industry is dependent on responsible operations. Evidently, this is not achieved by a single business, but rather by a collective effort across the industry. This is why Better Collective in 2019 entered into a partnership with our peers Racing Post and Oddschecker to co -found the UK based trade association, Responsible Affiliates in Gambling (RAiG). Through RAiG we promote socially responsible market- ing of gambling products and a safer gambling environ- ment for users. As a condition of membership in RAiG, each member is subject to an annual social responsibil- ity audit which is conducted by an independent third party. Again, this year we participated in the Safer Gam- bling Week, a cross-industry initiative to promote safer gambling in Europe. Similarly, we are active members of various national as- sociations, one of which is the Danish Online Gambling Association (DOGA). Through DOGA we work to initiate dialogue between all stakeholders in the gambling in- dustry to secure a responsible and safe gambling market in Denmark and other countries. We are also members of the German Association for Telecommunication and Media (DVTM) and the US National Council on Problem Gambling (NCPG). ===== SIDA 56 ===== Annual report Page 56 Creating safer user experiences with Mindway AI Better Collective’s subsidiary, Mindway AI [Mindway] specializes in supporting the iGaming industry with var- ious safer gambling tools and solutions. Mindway is an award-winning company that develops state of the art software solutions for fully automatic monitoring and profiling of gamblers and for identifying, preventing, and intervening in at -risk and problem gambling. In 2023, Mindway celebrated its five-year anniversary, and continues to play an increasingly important role in the iGaming ecosystem supporting sportsbooks on a global scale to create safer iGaming experiences. While we cannot control what sportsbooks do, we sup- port them by holding them to high standards during the customer acquisition and ongoing CRM process and by providing them with a chance to set the bar higher and take initiative in developing sustainable gaming through Mindway AI’s tools and software. As such, Mindway is extending its influence in the value chain rather than fo- cusing only on its own playing field. During the year 2023, Mindway has secured many stra- tegic partnerships allowing it to grow even further. The first partnership was entered with Australian operator Tabcorp which also marked the entry into a completely new market. Hereafter, Mindway partnered with AnonyMind, a treatment provider network in the UK, al- lowing Mindway AI to offer AnonyMind’s users a com- plete solution for dealing with problem gambling. A groundbreaking partnership was formed with the United S tates’ National Council on Problem Gamb ling (NCPG), which has incorporated Mindway’s Gamalyze solution into NCPG’s safer gambling website Responsi- blePlay.org, making Gamalyze the first ever safer gam- bling tool to go nationwide in the US. Another notewor- thy partnership of the year was entered wi th the Dutch operator BetCity.nl, which aims to enhance user protec- tion and promote safer gambling practices for Dutch sportsbooks. In 2023, Mindway was awarded no less than six industry awards for its efforts within safer gambling. These in- clude awards for innovation within safer gambling, best implementation of safer gambling tools and being the best safer gambling supplier. Early detection Mindway partners with sportsbooks and leading indus- try organizations with a clear mission to improve player protection in the industry. By combining neuroscience, AI and human expert assessment, the safer gambling software helps sportsbooks and other types of opera- tors meet and exceed player protection requirements. The award-winning AI solution GameScanner ensures a fully automated, early detection of at -risk and problem gambling, allowing sportsbooks to reach out to sports fans before unhealthy gambling habits escalate. As such, Mindway makes a real difference for millions of us- ers around the world. GameScanner is already running in nearly 61 jurisdictions in 37 countries boosting sports- books’ player protection, scanning a total of 7.7 million active players per month. Gamified self-test Gamalyze is an award -winning, gamified reinvention of the self-test, making self-testing more user-friendly, en- gaging, and actionable than typical player question- naires. Gamalyze helps players develop self -awareness of their risk profile and their decision making when they engage in gambling. Drawing insights from neuroimag- ing, Gamalyze analyzes each player’s decision while they play and generates a report with feedback on the player’s strategy and their sensitivity to rewards and losses. It also includes advice tailored to the individual. Making good use of Mindway Mindway and Better Collective share common goals for safer gambling, and while Mindway is run as an inde- pendent business, we make good use of the expertise and tools available when offering safer gambling re- sources on Better Collective platforms. Gamalyze is available to our users on key websites to- gether with insightful articles on safer gambling authored by Mindway experts. We recognize that work- ing in an environment where gambling is normalized makes our employees more exposed to gambling and therefore at a higher risk when it comes to problem gambling. Gamalyze is available to all employees , and we remind everyone at least annually to test their gambling behav- ior along with training and awareness activities. Fur- thermore, meeting colleagues across the group, Mind- way helps to create awareness on safer gambling at in- ternal events and on Better Collective’s Safer Gambling Board. ===== SIDA 57 ===== Annual report Page 57 Governance At Better Collective, w e believe that corporate sustain- ability starts with our value system and a principles- based approach to doing business. This is reflected in our business ethics where we conduct business in com- pliance with applicable laws, regulations, and standards. We are subject to a variety of national compliance reg- ulations in the countries where we operate, and to aid in developing a sustainable iGaming environment we solely operate in regulated markets or markets where sports betting is accepted by the authorities. We seek to develop editorial guidelines, which ensure balanced and compliant marketing messages and in- clude proper segmentation for our activities across dif- ferent channels using marketing technology to avoid targeting the wrong audience. Regulation of markets As sports betting becomes more widespread, more countries are amending or implementing new gambling laws and regulations to protect users and to limit black market activities. We have processes for being continu- ously updated on regulations and applying for licenses where relevant. Our in -house legal team is also dedi- cated to this area, with compliance processes for our websites. Commitment to compliance Better Collective was awarded for its efforts within com- pliance at the Vixio Global Regulatory Awards for the fifth consecutive year. We seek to educate regulators, politicians, and users on what performance marketing is, what it entails, and to ensure that relevant standards are set for our industry. We do not engage in cryptocurrenc y payments. When partnering with sportsbooks and reviewing acquisition targets, it is an integrated part of our due diligence pro- cess to pay careful attention to any signs of money laun- dering or fraud - in case of which we choose not to en- gage. Better Collective discontinued its business activities re- lated to the Russian market which was predominantly advertising activities. Anti-bribery and corruption Better Collective condemns the acts of corruption and bribery. Not only are they illegal; they also pose a threat to our trustworthiness and a risk to our partners, users, and authorities. Our policy on anti- bribery and corrup- tion is included in our Code of Conduct and imple- mented across the Better Collective group. We aim for 0 reported cases of bribery and corruption, including any behaviors that abuse entrusted power for private gain in Better Collective. Our whistleblower scheme fa- cilitates anonymous reporting , and we encourage all employees, vendors, and shareholders to speak up if they find something to be in breach of our policies. During 2023, Better Collective conducted mandatory anti-corruption training sessions for all employees, cov- ering topics such as recognizing and reporting corrupt practices, emphasizing our zero -tolerance policy. Dur- ing 2023, the group did not receive any reports about bribery, facilitation payment, or other forms of corrup- tion nor have we received any other whistleblower re- ports. Better Collective persistently works to strengthen its compliance measures by regularly reviewing and up- dating its anti-corruption policies to align with evolving laws and best practices. Code of Conduct Throughout the group we promote our Code of Conduct as a guide for all employees to the standards and values of a compliant and responsible business. The Code of Conduct also outlines that all employees are to report on gifts, meals, and entertainment (received and of- fered) to track and prevent conflicts of interest. Our efforts within governance advance overall sus- tained, inclusive, and sustainable economic growth while they also secure full and productive employment and decent work for our employees - all of which sup- port SDG 8. Data ethics report Better Collective has adopted a data ethics policy in ac- cordance with Section 99d of the Danish Financial State- ments Act. This section stands as our data ethics report for the fiscal year 2023. The data ethics policy outlines a set of data ethics principles that support ethical deci- sion-making when using data across Better Collectives activities. We employ data to provide our users with a unique and educational experience whenever they visit our websites and/or engage in our communities. To give our users the best and most relevant experi ence possi- ble, we process various categories of data including user-related data and personal data. In 2023 we estab- lished a process and governance setup to handle and evaluate data ethics reporting. ===== SIDA 58 ===== Annual report Page 58 Environment Since its inception, Better Collective has been committed to making responsible decisions across all operations – this is also the case when it comes to the group’s impact on the environment. It is our long-term commitment to implement a precau- tionary approach to environmental challenges and min- imize our carbon emissions. As we are an online busi- ness, our environmental impact is relatively small. Cli- mate changes generally pose little risk to our current and future operations as we have no physical supply chain, and as such, we can operate almost anywhere. Still, we aim to minimize our carbon footprint and we are working towards setting a reduction target. Our envi- ronmental policy is included in our sustainability policy. Key emissions factors Business travel is one of BCs principal sources of carbon emissions and has a significant impact on our ambition to lower our carbon footprint. When making travel deci- sions, the environmental and economic impacts must be taken into account and weighed against the expected benefits of meeting in person. The booking principles, including low-carbon options, are included in the Better Collective Travel Policy. Besides travel, server hosting, IT and office equipment, and food supplies make up most of our carbon intense procurement. When choosing suppliers, considerations of environmental factors must be considered . In 2022, we started including server hosting in our scope 3. Our range of websites are hosted at data centers with a con- scious approach to the environment and a significant purchase of renewable energy. Garbage with a significant negative environmental ef- fect (such as batteries, IT equipment, etc.) should be re- used when possible or disposed of according to govern- mental recommendations. Old IT equipment, to an in- creasing degree, is disposed of by a third party based on environmentally responsible practices (where available) or re -used for private purposes by employees. Food waste should be kept to a minimum. We do so by work- ing with our caterers and regulating our consumption daily. Annual report Page 58 ===== SIDA 59 ===== Annual report Page 59 Social metrics The data in the following accounts is based on information registered in and retrieved from the group’s HR software system. Better Collective’s continued growth through M&A activity means that newer offices and operations are not accounted for with the same accuracy as the more long-standing operations. Average number of full-time work force (FTE) The average number of full-time employees as stated in the annual accounts 2023. Total headcount (HC) The total headcount by the end of 2023. Gender diversity The percentage of the underrepresented gender (women) in the workforce at the end of 2023. Gender pay ratio The gender pay ratio is calculated as the median male salary divided by the median female salary (the un- derrepresented gender), per country and collated as a weighted average for the group. Salaries include pen- sion and exclude bonus, incentive programs and other benefits. The 2019 and 2020 figures have been recalcu- lated. Employee turnover Employee turnover is defined as voluntary and involun- tary leaves (headcount) divided by the number of em- ployees and converted to a percentage rate. Resigna- tions and dismissals have been specified and added in the 2023 reporting. Sickness absence The number of sick days for all HCs for the period di- vided by total HC. Action Network was left out of the calculations as it was not possible to gather information on sick days. Employee engagement and response rate Based on the average responses to five specified ques- tions in our better workplace evaluation 2023. Reported cases of harassment Based on anonymous reports in our better workplace evaluation. The nature of harassment is unknown. Reported workplace injuries The number of reported workplace injuries as reported to HR. Nationalities Number of nationalities represented in the group. Corporate income tax Total income tax for 2023. In 2023, Better Collective contributed with direct as cor- porate taxes in more than 15 countries. Corporate tax payments amounted to 15 mEUR. Better Collective be- lieves in contributing to the societies and communities it is do ing business in. One of the ways to do so is through global tax payments. In all tax matters, the group acts in a fair, compliant, and responsible way. Social Unit Target 2023 2022 2021 2020 2019 Average number of FTE FTE 1,252 878 635 420 364 Total headcount HC 1,312 949 781 476 428 Gender diversity % 35 31 29 30 30 31 Gender pay ratio Times 1 2 1 1 1 1 Employee turnover ratio % 15 18 17 21 14 - Resignations % 5 12 15 10 9 - Dismissals % 9 6 2 11 4 Sickness absence Days per HC 2 2 1 1 2 Employee engagement % 80 84 83 87 85 - Employee engagement re- sponse rate % 80 71 75 91 - - Reported cases of harassment Number 0 11 11 9 12 - Reported workplace injuries Number 0 3 0 0 0 - Nationalities Number 45 43 35 30 30 Corporate income tax mEUR 15.41 16.89 12.60 6.00 5.00 ===== SIDA 60 ===== Annual report Page 60 Governance metrics Gender diversity at the Board Percentage of the underrepresented gender ( women) on the Board of Directors elected at the Annual General Meeting. The Board has a 57% (men) and 43% (women) consisting of seven members and thereby considered an equal gender distribution by the Danish Business Au- thority. The target figure of 40% was reached in 2023. Board meeting attendance rate Percentage of Board meetings attended per Board member including Board Committee meetings (Audit Committee and Remuneration Committee respectively). Breaches of customer privacy Number of complaints for the breach of consumers' pri- vacy including complaints from official data protection authorities. Any complaints under investigation will be included once investigation is finalized. Reported cases of bribery or corruption Number of cases reported to HR, in the whistleblower scheme or otherwise. Whistleblower reports Number of whistleblower reports received in 2023. CEO pay ratio CEO pay ratio is calculated as the CEO salary including bonus, pension and warrants divided by the median em- ployee salary. Note that in 2020, the CEO waived his base salary in the second quarter in light of the COVID - 19 pandemic impact. Governance Unit Target 2023 2022 2021 2020 2019 Gender diversity, board % 40 43% 33 33 17 20 Board meeting attendance rate % >95 99 99 96 97 100 Breaches of customer privacy Number 0 0 0 0 - - Reported cases of bribery or cor- ruption Number 0 0 0 0 - - Whistleblower reports Number 0 0 0 0 0 CEO pay ratio Times 9 13 10 8 9 ===== SIDA 61 ===== Annual report Page 61 Our carbon emissions Annual report Page 61 ===== SIDA 62 ===== Annual report Page 62 Environmental metrics The GHG emissions accounting is based on the interna- tional standard; A Corporate Accounting and Reporting Standard, developed by the Greenhouse Gas Protocol Initiative (GHG Protocol). The GHG Protocol is the most widely used and recognized international standard for measuring greenhouse gas emissions on a company level, and is the basis for the ISO standard 14064-I. The input is based on consumption data from internal and external sources, which has then been converted into tons CO2 equivalents (tCO2e) using generic and/or specific emission factors. The carbon footprint appraisal is derived from a combination of our own data collection and data computation by Carbon Footprint’s analysts. CO₂ emissions scope 1 Scope 1 comprises CO₂ emissions from heating using oil and gas refrigerants to cool the crafting facilities and from the usage of company cars. CO₂ emissions scope 2 Scope 2 comprises CO₂ emissions from heating and electricity supplied by external suppliers. CO₂ emissions scope 3 Scope 3 comprises CO₂ emissions from business travel by public transportation including flights, working from home and employee commutes, as well as district heat- ing distribution and electricity transmission and distri- bution. Due to the COVID-19 pandemic, we travelled sig- nificantly less in 2020 and 2021. CO₂ emissions per average FTE CO₂ emissions per employee (tons/average FTW) is calculated on the basis of the total amount of CO₂ emis- sions (tons ) and the average number of full time em- ployees (FTE). CO₂ emissions per mEUR revenue CO₂ emissions per mEUR revenue (tons/mEUR revenue) are calculated based on the total amount of CO₂ emis- sions (tons) and the revenue in m EUR as stated in the annual accounts 2023. The overall increase in CO₂ emissions has risen com- pared to previous years due to multiple mergers and ac- quisitions, a larger number of employees, an increased number of offices globally, and a more detailed level of reporting. These factors have led to increased emissions across all scopes. Environmental Unit Target 2023 2022 2021 2020 2019 CO₂ e, scope 1 Metric tons 71.40 10.00 73.88 73.54 13.96 CO₂ e, scope 2 Metric tons 247.40 50.32 70.09 49.99 215.14 CO₂ e, scope 3 Metric tons 2,596.10 1,278.34 346.42 176.88 730.14 Total tons of CO₂e Metric tons 2,914.90 1,338.66 490.39 300.41 959.24 Tons of CO₂e per employee Times 2.33 1.52 0.77 0.72 2.92 Tons of CO₂e per mEUR turnover Times 8.92 4.97 2.77 3.30 15.76 ===== SIDA 63 ===== Annual report Page 63 Assessment by scope and source activity Flights Report from travel provider with manual additions of di- rects bookings. Home-workers Employee survey, 35% response rate. Apportioned to account for the employees which did not respond. Commuting Employee survey, 35 % response rate. Apportioned to account for the employees which did not respond. Hotel stays Report from travel provider with manual additions of di- rects bookings. Rail, taxi, bus travels and hire cars Based on cost and distance. Electricity transmissions & distribution Primarily utility bills. For the sites where electricity con- sumption information was not available, but other sites are located within the same country with a complete da- taset, this was apportioned based on employee numbers at the site with the complete dataset and used the num- ber of staff working at the site. Purchased goods and services GHG emissions associated with the Group’s purchase of goods and services, are calculated as the amount of direct cost including VAT associated with a specific type. Water (and waste water) Utility bills for all but one office (calculated based on per person consumption in nearby office). Assessment by scope and source activity (tCO2e) 2023 2022 2021 2020 2019 Scope 1 Site gas 6.50 9.43 67.50 65.68 1.84 Refrigerants 22.00 - - - - Company car travel 42.90 0.57 6.38 7.86 12.12 Scope 1 total 71.40 10.00 73.88 73.54 13.96 Scope 2 Electricity generation 173.60 50.32 66.77 49.99 215.14 Heat fuel 42.00 - - - - District heating generation 31.80 - 3.32 - - Scope 2 total 247.40 50.32 70.09 49.99 215.14 Scope 3 Flights 1,948.10 915.48 164.38 126.67 711.84 Home-workers 65.50 144.68 103.69 42.39 - Commuting 501.30 198.47 62.52 - - Rail travel 7.40 3.74 8.81 2.34 3.24 Taxi travel 20.00 5.36 1.43 1.81 1.68 Bus travel 3.10 3.64 0.08 0.01 1.01 Hotel accommodation 42.40 - - - Electricity transmission & distri- bution - 4.76 5.34 2.52 12.37 District heating distribution - - 0.17 - - Purchased goods and services 8.30 1.60 - - - Company electric vehicles (charged off-site) - 0.61 - - - Scope 3 total 2,596.10 1,278.34 346.42 176.88 730.14 Total 2,914.90 1,338.66 490.39 300.41 959.24 ===== SIDA 64 ===== Annual report Page 64 EU Taxonomy KPI for revenue Better Collective’s main activities within sports media and entertainment are excluded from the taxonomy un- der 13 .1 Creative, arts and entertainment activities. To ascertain whether Better Collective has any other eco- nomic activities which could be eligible for the taxon- omy, the group has made an analysis of the business which has not returned any other economic acti vities that are eligible under the taxonomy. Better Collective thus reports no eligible revenue for any eligible activities. KPI for CAPEX CAPEX is calculated as the 'Addition of tangible and in- tangible assets', which is generated from note 12 and 14 of the consolidated financial statements. Included in the figures is the value from leasing of office buildings (Cap- italized under IFRS16). KPI for OPEX Better Collective has made an analysis of OPEX which has not returned any economic activities that are eligi- ble under the taxonomy. Substantial contributions % Do no significant harm (Y/N) Revenue Absolute Revenue tEUR Proportion of Revenue Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosys- tems Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Minimum safeguards Taxonomy aligned Revenue Category Taxonomy aligned activities - none 0 0% Taxonomy eligible but not aligned activities - none 0 0% Taxonomy non-eligible activi- ties 326,686 100% Total 326,686 100% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a ===== SIDA 65 ===== Annual report Page 65 Substantial contributions % Do no significant harm (Y/N) CAPEX Absolute CAPEX tEUR Proportion of CAPEX Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Minimum safeguards Taxonomy aligned CAPEX Category Taxonomy aligned activities - none 0 0% Taxonomy eligible but not aligned activities 17,410 23% Taxonomy non-eligible activi- ties 57,326 77% Total 74,736 100% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Substantial contributions % Do no significant harm (Y/N) OPEX Absolute OPEX tEUR Proportion of OPEX Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Climate change mitigation Climate change adaptation Water and marine resources Circular economy Pollution Biodiversity and ecosystems Minimum safeguards Taxonomy aligned OPEX Category Taxonomy aligned activities - none 0 0% Taxonomy eligible but not aligned activities - none 0 0% Taxonomy non-eligible activi- ties 215,605 100% Total 215,605 100% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a ===== SIDA 66 ===== Annual report Page 66 Annual report Page 66 Statements ===== SIDA 67 ===== Annual report Page 67 Statement by management The Board of Directors and the Executive Board have to- day discussed and approved the annual report of Better Collective A/S for 2023. The annual report has been prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Fi- nancial Statements Act. It is our opinion that the consolidated financial state- ments and the parent company financial statements give a true and fair view of the financial position of the group and the parent company at December 31, 202 3 and of the results of the group’s and the parent com- pany’s operations and cash flows for the financial year January 1 – December 31, 2023. Further, in our opinion, the management’s review gives a fair review of the development in the group’s and the parent company’s activities and financial matters, re- sults of operations, cash flows and financial position as well as a description of material risks and uncertainties that the group and the parent company face. In our opinion, the annual report for the financial year January 1 – December 31, 2023 with the file name bet- tercollective-2023-12-31-en.zip , is prepared, in all mate- rial respects, in compliance with the ESEF Regulation. We recommend that the annual report be approved at the annual general meeting. Copenhagen, March 20, 2024 Executive Management Jesper Søgaard CEO & Co-founder Christian Kirk Rasmussen COO & Co-founder Executive Vice President Flemming Pedersen CFO Executive Vice President Board of Directors Jens Bager Chair Therese Hillman Vice Chair Britt Boeskov Todd Dunlap Petra von Rohr Leif Nørgaard René Rechtman ===== SIDA 68 ===== Annual report Page 68 Independent Auditors’ Report To the shareholders of Better Collective A/S Opinion We have audited the consolidated financial statements and the Parent Company financial statements of Better Collective A/S for the financial year January 1 – Decem- ber 31, 2023, which comprise income statement, state- ment of comprehensive income, balance sheet, state- ment of changes in equity, cash flow statement and notes, including accounting policies, for the Group and the Parent Company. The consolidated financial state- ments and the parent company financial statements are prepared in accordance with IFRS A ccounting Stand- ards as adopted by the EU and additional requirements of the Danish Financial Statements Act. In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the financial position of the Group and the Parent Company at December 31, 2023 and of the results of the Group's and the Parent Company's opera- tions and cash flows for the financial year January 1– De- cember 31, 2023 in accordance with IFRS Accounting Standards as adopted by the EU and additional require- ments of the Danish Financial Statements Act. Our opinion is consistent with our long -form audit re- port to the Audit Committee and the Board of Directors. Basis for opinion We conducted our audit in accordance with Interna- tional Standards on Auditing (ISAs) and additional re- quirements applicable in Denmark. Our responsibilities under those standards and requirements are further de- scribed in the "Auditor's responsibilities for the audit of the consolidated financial statements and the Parent Company financial statements" (hereinafter collectively referred to as "the financial statements") section of our report. We believe that the audit evidence we have ob- tained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the International Ethics Standards Board for Account- ants' International Code of Ethics for Professional Ac- countants (IESBA Code) and the additional ethical re- quirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. To the best of our knowledge, we have not provided any prohibited non-audit services as described in article 5(1) of Regulation (EU) no. 537/2014. Appointment of auditor On June 8, 2018, Better Collective A/S completed its In- itial Public Offering and was admitted to trading and of- ficial listing on Nasdaq Stockholm. Subsequent to Better Collective A/S being listed on Nasdaq Stockholm, we were initially appointed as auditor of Better Collective A/S on April 25, 2019 for the financial year 2019. We have been reappointed annually by resolution of the general meeting for a total consecutive period of 5 years up until and including the financial year 2023. Key audit matters Key audit matters are those matters that, in our profes- sional judgement, were of most significance in our audit of the financial statements for the financial year 202 3. These matters were addressed during our audit of the financial statements as a whole and in forming our opin- ion thereon. We do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter i s provided in that context. We have fulfilled our responsibilities described in the "Auditor's responsibilities for the audit of the financial statements" section, including in relation to the key au- dit matters below. Accordingly, our audit included the design and performance of procedures to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audi t proce- dures, including the procedures performed to address the matters below, provide the basis for our audit opin- ion on the financial statements. Valuation of goodwill, domains and websites Goodwill as well as domains and websites with indefinite life are not subject to amortisation, but are reviewed an- nually for impairment, or more frequently if any indica- tors of impairment are identified. Valuation of goodwill, domains and websites is signi ficant to our audit due to the carrying values as well as the management judge- ment involved in the assessment of the carrying values, assessment of indefinite life and judgements involved in impairment testing of the goodwill, domains and web- sites. Management prepares and reviews impairment tests for each of the four identified cash -generating units. Im- pairment testing is based on the estimated recoverable amounts of the assets, which for this purpose are deter- mined based on the value in use. The value in use is based on a discounted cash flow (DCF) model and is cal- culated for each cash-generating unit. Refer to note 13 in the consolidated financial statements and to note 13 in the financial statements for the Parent Company. How our audit addressed the above key audit matter Our audit procedures included: ===== SIDA 69 ===== Annual report Page 69 • Assessment of the indefinite life assumption in- cluding examination of data provided by manage- ment and other sources as well as inquiries to management and comparison with industry prac- tice for comparable companies. • Evaluation of main principles and assumptions for Management’s identification and assessment of CGUs. • Evaluation of the value-in-use model used by Man- agement, including consideration of the cash-gen- eration units defined by Management and the rea- sonableness of key assumptions and input based on our knowledge of the business and industry to- gether with available supporting evidence such as available budgets and externally observable mar- ket data related to interest rates. • Evaluation of the disclosures provided by Manage- ment in note 13 to the consolidated financial state- ments and in note 13 to the Parent Company finan- cial statements to applicable accounting standards. Revenue recognition The Group’s revenue consists of different revenue streams, that either are recognised at a point in time or over time. Further, the Group has agreements with op- erators that include variable consideration, which is rec- ognized based on expected performance f or the con- tract period. Revenue recognition and measurement of the related variable consideration for the Group was a matter of most significance in our audit due to the inherent risk in the estimates and judgements which Management makes in the normal course of business as to ti ming of revenue and measurement of variable consideration. For details on the revenue, reference is made to note 4 in the consolidated financial statements. How our audit addressed the above key audit matter Our audit procedures included: • Test on a sample basis recognised revenue and re- lated variable considerations to agreements with operators. • Data analytical procedures to test completeness, accuracy, and timing of the recognition of revenue and related variable consideration. • Test of revenue accruals, revenue deferrals and sales transactions, recognized before and after the balance sheet date to contracts and other sup- porting documentation to assess proper revenue cut-off. • Assessment whether the applied revenue recogni- tion criteria follow the Group’s accounting policies as disclosed in note 4 to the consolidated financial statements. • Evaluation of the disclosures provided by Manage- ment in note 4 to the consolidated financial state- ments to applicable accounting standards. Accounting for acquisitions The Group has in 2023 completed five business combi- nations. Management has determined the fair value of the identifiable assets and liabilities acquired. The total consideration for the five business combinations amounts to EUR 115 million. Due to the significant level of management judgement involved in the estimation of the contingent considera- tion and estimating the fair value of especially the intan- gible assets acquired, we considered the accounting for acquisitions of most significance in our audit. For details on the acquisitions, reference is made to note 22 in the consolidated financial statements. How our audit addressed the above key audit matter Our audit procedures included: • Assessment of the assumptions and methodology applied by management to calculate the fair value of intangible assets acquired as well as the contin- gent consideration. We have considered the ap- proach taken by Management, assessed key as- sumptions, and obtained evidence for the explana- tions provided, by comparing key assumptions to market data, where available, underlying account- ing records, past performance of the acquired busi- nesses and Management’s forecasts supporting the acquisitions. • Assessment of the adequacy of the disclosures in note 22 related to the acquisitions, including the fair value of acquired intangible assets, compared to applicable accounting standards. Statement on the Management’s review Management is responsible for the Management's re- view. Our opinion on the financial statements does not cover the Management's review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the Management's review and, in doing so, consider whether the Management's re- view is materially inconsistent with the financial state- ments or our knowledge obtained du ring the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the Management's review provides the information required by relevant law and regulations. ===== SIDA 70 ===== Annual report Page 70 Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accord- ance with the requirements of relevant law and regula- tions. We did not identify any material misstatement of the Management's review. Management’s responsibilities for the financial statements Management is responsible for the preparation of con- solidated financial statements and parent company fi- nancial statements that give a true and fair view in ac- cordance with IFRS Accounting Standards as adopted by the EU and additional requirements of the Danish Fi- nancial Statements Act and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is re- sponsible for assessing the Group's and the Parent Com- pany's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and us- ing the going concern basis of accounting in preparing the financial statements unless Management either in- tends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement, whether due to fraud or er- ror, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assur- ance, but is not a guarantee that an audit conducted in accordance with ISAs and additional requirements ap- plicable in Denmark will always detect a material mis- statement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit conducted in accordance with ISAs and additional requirements applicable in Denmark, we exercise professional judgement and maintain profes- sional scepticism throughout the audit. We also: • Identify and assess the risks of material misstate- ment of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve col- lusion, forgery, intentional omissions, misrepresen- tations or the override of internal control. • Obtain an understanding of internal control rele- vant to the audit in order to design audit proce- dures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and the Parent Com- pany's internal control. • Evaluate the appropriateness of accounting poli- cies used and the reasonableness of accounting es- timates and related disclosures made by Manage- ment. • Conclude on the appropriateness of Management's use of the going concern basis of accounting in pre- paring the financial statements and, based on the audit evidence obtained, whether a material uncer- tainty exists related to events or conditions that may cast significant doubt on the Group's and the Parent Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our au- ditor's report to the related disclosures in the finan- cial statements or, if such disclosures are inade- quate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and the Parent Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and contents of the financial statements, including the note disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. • Obtain sufficient appropriate audit evidence re- garding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and p erformance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, includ- ing any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to com- municate with them all relationships and other matters that may reasonably be thought to bear on our inde- pendence, and where applicable, actions taken to elimi- nate threats or safeguards applied. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated fi- nancial statements and the Parent Company financial statements of the current period and are therefore the ===== SIDA 71 ===== Annual report Page 71 key audit matters. We describe these matters in our au- ditor's report unless law or regulation precludes public disclosure about the matter. Report on compliance with the ESEF Regulation As part of our audit of the Consolidated Financial State- ments and Parent Company Financial Statements of Better Collective A/S, we performed procedures to ex- press an opinion on whether the annual report of Better Collective A/S for the financial year January 1 – Decem- ber 31, 2023 with the file name bettercollective-2023-12- 31-en.zip, is prepared, in all material respects, in compli- ance with the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which inc ludes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the Consolidated Financial State- ments including notes. Management is responsible for preparing an annual re- port that complies with the ESEF Regulation. This re- sponsibility includes: • The preparing of the annual report in XHTML for- mat; • The selection and application of appropriate iXBRL tags, including extensions to the ESEF taxonomy and the anchoring thereof to elements in the taxon- omy, for all financial information required to be tagged using judgement where necessary; • Ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements pre- sented in human readable format; and • For such internal control as Management deter- mines necessary to enable the preparation of an an- nual report that is compliant with the ESEF Regula- tion. Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material re- spects, in compliance with the ESEF Regulation based on the evidence we have obtained, and to issue a report that includes our opinion. The nature, timing and extent of procedures selected depend on the auditor’s judge- ment, including the assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. The proce- dures include: • Testing whether the annual report is prepared in XHTML format; • Obtaining an understanding of the company’s iXBRL tagging process and of internal control over the tagging process; • Evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements including notes; • Evaluating the appropriateness of the company’s use of iXBRL elements selected from the ESEF tax- onomy and the creation of extension elements where no suitable element in the ESEF taxonomy has been identified; • Evaluating the use of anchoring of extension ele- ments to elements in the ESEF taxonomy; and • Reconciling the iXBRL tagged data with the audited Consolidated Financial Statements. In our opinion, the annual report for the financial year January 1 – December 31, 202 3 with the file name bet- tercollective-2023-12-31-en.zip is prepared, in all mate- rial respects, in compliance with the ESEF Regulation. Copenhagen, March 20, 2024 EY Godkendt Revisionspartnerselskab CVR no. 30 70 02 28 Jan C. Olsen State Authorised Public Accountant MNE no. mne33717 Peter Andersen State Authorised Public Accountant MNE no. mne34313 ===== SIDA 72 ===== Annual report Page 72 Annual report Page 72 Financial Statements ===== SIDA 73 ===== Annual report Page 73 Consolidated statement of profit and loss Consolidated statement of comprehensive income Note tEUR 2023 2022 Profit for the period 39,835 48,075 Other comprehensive income Other comprehensive income that may be reclassified to profit or loss in subsequent periods: Fair value adjustment of hedges for the year - 483 0 Currency translation to presentation currency 1,318 - 905 Currency translation of non-current intercompany loans - 9,440 17,030 11 Income tax 0 - 3,747 Net other comprehensive income/loss - 8,605 12,379 Total comprehensive income/(loss) for the period, net of tax 31,230 60,454 Attributable to: Shareholders of the parent 31,230 60,454 Note tEUR 2023 2022 3, 4 Revenue 326,686 269,297 Direct costs related to revenue 99,296 92,227 5, 6 Staff costs 88,921 68,639 7 Other external expenses 27,389 23,356 Operating profit before depreciation and amortization (EBITDA) and special items 111,080 85,075 14 Depreciation 3,958 2,321 Operating profit before amortization (EBITA) and special items 107,122 82,754 12 Amortization and impairment 24,283 12,347 Operating profit (EBIT) before special items 82,839 70,407 8 Special items, net - 1,948 - 54 Operating profit 80,891 70,353 9 Financial income 5,987 4,198 10 Financial expenses 28,868 9,587 Profit before tax 58,010 64,964 11 Tax on profit for the period 18,175 16,888 Profit for the period 39,835 48,075 Earnings per share attributable to equity holders of the company Average number of shares 55,186,772 54,363,312 Average number of warrants - converted to number of shares 2,658,571 2,495,614 Earnings per share (in EUR) 0.74 0.88 Diluted earnings per share (in EUR) 0.70 0.85 ===== SIDA 74 ===== Annual report Page 74 Consolidated balance sheet Note tEUR 2023 2022 Assets Non-current assets 12, 13 Intangible assets Goodwill 255,074 183,942 Domains and websites 466,615 460,513 Accounts and other intangible assets 79,740 27,016 Total intangible assets 801,429 671,471 14 Property, plant and equipment Right of use assets 15,575 6,269 Leasehold improvements, Fixtures and fittings, other plant and equipment 6,006 2,574 Total property, plant and equipment 21,582 8,843 Other non-current assets Deposits 1,803 726 11 Deferred tax asset 7,236 9,165 Total other non-current assets 9,039 9,891 Total non-current assets 832,050 690,204 Current assets 15 Trade and other receivables 48,954 53,179 Corporation tax receivable 2,252 6,423 Prepayments 4,250 3,926 20 Other current financial assets 6,804 0 20 Cash 43,552 31,497 Total current assets 105,812 95,025 Total assets 937,862 785,229 Note tEUR 2023 2022 Equity and liabilities 16, 17 Equity Share Capital 554 551 Share Premium 274,580 272,550 Currency Translation Reserve 15,055 23,177 Hedging reserves - 483 0 Treasury Shares - 21,057 - 7,669 Retained Earnings 166,624 124,307 Total equity 435,273 412,917 Non-current Liabilities 20 Debt to credit institutions 248,657 201,708 19 Lease liabilities 13,326 4,962 11 Deferred tax liabilities 84,670 78,167 20 Other long-term financial liabilities 52,443 22,407 Total non-current liabilities 399,096 307,244 Current Liabilities Prepayments received from customers and deferred revenue 4,262 8,023 18 Trade and other payables 27,838 22,252 Corporation tax payable 6,754 5,221 20 Other financial liabilities 61,938 26,865 20 Debt to credit institutions 0 1,055 19 Lease liabilities 2,702 1,653 Total current liabilities 103,493 65,068 Total liabilities 502,589 372,312 Total Equity and liabilities 937,862 785,229 ===== SIDA 75 ===== Annual report Page 75 Consolidated statement of changes in equity tEUR Share capital Share premium Currency translation reserve Hedging reserves Treasury shares Retained earnings Total equity As of January 1, 2023 551 272,550 23,177 0 - 7,669 124,307 412,917 Result for the period 0 0 0 0 0 39,835 39,835 Fair value adjustment of hedges 0 0 0 - 483 0 0 - 483 Currency translation to presentation currency 0 0 - 8,122 0 0 0 - 8,122 Tax on other comprehensive income 0 0 0 0 0 0 0 Total other comprehensive income 0 0 - 8,122 - 483 0 0 - 8,605 Total comprehensive income for the year 0 0 - 8,122 - 483 0 39,835 31,230 Transactions with owners Capital Increase 3 2,030 0 0 0 0 2,033 Acquisition of treasury shares 0 0 0 0 - 13,375 0 - 13,375 Disposal of treasury shares 0 0 0 0 0 0 0 Share based payments 0 0 0 0 0 2,495 2,495 Transaction cost 0 0 0 0 - 13 - 12 - 26 Total transactions with owners 3 2,030 0 0 - 13,389 2,482 - 8,874 At December 31, 2023 554 274,580 15,055 - 483 - 21,057 166,624 435,273 During the period no dividend was paid. tEUR Share capital Share premium Currency translation reserve Hedging reserves Treasury shares Retained earnings Total equity As of January 1, 2022 546 267,873 10,798 0 - 8,074 73,705 344,848 Result for the period 0 0 0 0 0 48,075 48,075 Fair value adjustment of hedges 0 0 0 0 0 0 0 Currency translation to presentation currency 0 0 16,125 0 0 0 16,125 Tax on other comprehensive income 0 0 - 3,747 0 0 0 - 3,747 Total other comprehensive income 0 0 12,379 0 0 0 12,379 Total comprehensive income for the year 0 0 12,379 0 0 48,075 60,454 Transactions with owners Capital Increase 5 4,677 0 0 0 0 4,683 Acquisition of treasury shares 0 0 0 0 - 14,250 0 - 14,250 Disposal of treasury shares 0 0 0 0 14,656 842 15,498 Share based payments 0 0 0 0 0 1,713 1,713 Transaction cost 0 0 0 0 0 - 28 - 28 Total transactions with owners 5 4,677 0 0 406 2,526 7,615 At December 31, 2022 551 272,550 23,177 0 - 7,669 124,307 412,917 During the period no dividend was paid. ===== SIDA 76 ===== Annual report Page 76 Consolidated statement of cash flow Note tEUR 2023 2022 Profit before tax 58,010 64,964 Adjustment for finance items 22,882 5,389 Adjustment for special items 1,947 54 Operating Profit for the period before special items 82,839 70,407 Depreciation and amortization 28,241 14,668 Other adjustments of non-cash operating items 2,581 1,690 Cash flow from operations before changes in working capital and special items 113,661 86,765 21 Change in working capital 5,722 - 16,949 Cash flow from operations before special items 119,384 69,816 Special items, cash flow - 4,744 - 1,393 Cash flow from operations 114,639 68,423 Financial income, received 493 1,682 Financial expenses, paid - 10,712 - 5,666 Cash flow from activities before tax 104,420 64,439 Income tax paid - 15,411 - 16,239 Cash flow from operating activities 89,009 48,200 22 Acquisition of businesses - 57,282 - 14,337 Acquisition of intangible assets - 27,469 - 96,452 Acquisition of property, plant and equipment - 5,143 - 1,804 Sale of property, plant and equipment 3 16 Acquisition of other financial assets - 14,930 0 Change in other non-current assets - 1,427 - 55 Cash flow from investing activities - 106,248 - 112,632 Note tEUR 2023 2022 Repayment of borrowings - 1,486 - 215,993 Proceeds from borrowings 45,490 296,665 Lease liabilities - 2,814 - 1,274 Other non-current liabilities - 483 0 Capital increase 2,033 618 Treasury shares - 13,381 - 14,250 Transaction cost - 26 - 28 Warrant settlement, sale of warrants 0 0 Cash flow from financing activities 29,334 65,737 Cash flows for the period 12,095 1,306 Cash and cash equivalents at beginning 31,497 30,093 Foreign currency translation of cash and cash equivalents - 41 99 Cash and cash equivalents period end 43,552 31,497 Cash and cash equivalents period end Cash 43,552 31,497 Cash and cash equivalents period end 43,552 31,497 ===== SIDA 77 ===== Annual report Page 77 Cashflow statement – specifications Note tEUR 2023 2022 Acquisition of business combinations: 22 Net Cash outflow from business combinations at acquisition - 57,282 0 Business Combinations - deferred payments from current period 0 0 Deferred payments - business combinations from prior periods 0 - 14,337 Total cash flow from business combinations - 57,282 - 14,337 Acquisition of intangible assets: 13 Acquisitions through asset transactions - 50,639 - 144,522 Deferred payments related to acquisition value - 494 29,408 Deferred payments - acquisitions from prior periods - 9,745 - 121 Intangible assets with no cash flow effect 33,613 24,325 Other investments - 203 - 5,541 Total cash flow from intangible assets - 27,469 - 96,452 Note tEUR 2023 2022 Equity movements with cashflow impact - from cash flow statement: Capital increase 2,033 618 Treasury shares - 13,381 - 14,250 Transaction cost - 26 - 28 Total equity movements with cash flow impact - 11,374 - 13,661 Non-cash flow movements on equity: New shares for M&A payments 0 4,065 Treasury Shares used for payments 0 15,498 Share based payments - warrant expenses with no cash flow effect 2,495 1,713 Total equity movements with no cash flow impact 2,495 21,275 Total Transactions with owners - Consolidated statement of changes in equity - 8,879 7,615 ===== SIDA 78 ===== Annual report Page 78 1. Accounting policies 79 2. Significant accounting judgements, estimates and assumptions. 81 3. Segment information 83 4. Revenue specification 84 5. Staff and other costs 85 6. Share-based payment plans 87 7. Fees paid to auditors appointed at the annual general meeting 89 8. Special items 90 9. Finance income 91 10. Finance costs 91 11. Income tax 92 12. Intangible assets 94 13. Goodwill and intangible assets with indefinite life 96 14. Property, plant and equipment 98 15. Trade and other receivables 99 16. Issued capital and reserves 100 17. Distributions made and proposed 101 18. Trade and other payables 101 19. Leasing 102 20. Financial risk management objectives and policies 104 21. Change in working capital 108 22. Business combinations 108 23. Related party disclosures 111 24. Group information –subsidiary information 112 25. Other contingent liabilities 114 26. Events after the reporting date 114 Notes to the consolidated financial statements ===== SIDA 79 ===== Annual report Page 79 Notes 1. Accounting policies General The financial statements section of the annual report for the period January 1 – December 31, 2023 comprises both the consolidated financial statements of Better Collective A/S and its subsidiaries (the Group or the Better Collective Group) and the separate parent company financial statements (the Parent). The comparative figures cover the period January 1 – December 31, 2022. Basis for preparation The consolidated financial statements of Better Collective A/S have been prepared in accordance with IFRS Accounting Standards as adopted by the EU and additional Danish disclosure requirements for listed companies. Better Collective A/S is incorporated and domiciled in Denmark. The Board of Directors and the Executive Board have discussed and approved the annual report for Better Collective A/S on March 20, 2024. The annual report will be presented to the shareholders of Better Collective A/S for adoption at the annual general meeting on April 22, 2024. The accounting policies have been applied consistently during the financial year and for the comparative figures, except for the scope of operating segments, “Other current assets” and financial instruments. The scope of operating segments has been modified following changes in management responsibilities as from January 1, 2023. US has been renamed to North America (NA) and will now cover both USA and Canada. Canada was previously included in the operating segment “Europe and RoW”. 2022 comparative information has been restated. New financial reporting standards All new or amended standards (IFRS) and interpretations (IFRIC) as adopted by the EU and which are effective for the financial year beginning on 1 January 2023 have been adopted. The implementation of these new or amended standards and interpretations had no material impact on the financial statements. For standards implemented prospectively the comparative figures are not restated. New financial reporting standards not yet adopted. The IASB has issued several new or amended standards and interpretations with effective date after December 31, 2023. None of the standards are expected to have a significant effect for Better Collective A/S. Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates. However, this legislation does not apply to the Group as it has not had a consolidated revenue of more than EUR 750mil- lion for two out of the last four years. Due to revenue expectations, an overall assessment was made, which concluded that this will not have any material impact on the Group. Presentation currency The Group’s consolidated financial statements and parent financial statements are presented in Euro (EUR), and the parent company’s functional currency is Danish Kroner (DKK). In general, rounding will occur and cause variances in sums and percentages in the consolidated and parent company financial statements. Foreign currencies For each of the reporting entities in the Group, including subsidiaries and foreign associates, a functional currency is determined. The functional currency is the currency used in the primary financial environment in which the reporting entity operates. Transactions denominated in currencies other than the functional currency are foreign currency trans- actions. On initial recognition, foreign currency transactions are translated to the functional currency at the exchange rate on the transaction date. Foreign exchange differences arising between the rate on the transaction date and the rate on the date of settlement are recognized in profit or loss as financial income or financial expenses. At the end of a reporting period, receivables and payables and other monetary items denominated in foreign currencies are translated to the functional currency at the exchange rate on the balance sheet date. The difference between the exchange rates on the balance sheet date and on the date the receivable or payable was recognized in the latest report- ing period is recognized in profit or loss as financial income or financial expenses. In the consolidated financial statements, the statements of comprehensive income of Group entities with a functional currency other than EUR are translated at the exchange rate on the transaction date, and the balance sheet items are translated at closing rates. An average exchange rate for each month is used as the exchange rate at the transaction date in so far as this does not significantly distort the presentation of the underlying transactions. Foreign exchange differences arising on translation to the EUR presentation currency are recognized in other comprehensive income (OCI) in a separate translation reserve under equity. On disposal of a reporting entity, the component of other comprehensive income relating to that particular reporting entity is reclassified to profit or loss. The Parent company has provided non- current intercompany loans in USD in 2021 to fund acquisitions of assets and business combinations in US. Unrealized exchange rate gains/losses and related tax impact related to these loans are recognized in Other Comprehensive Income for the Group. ===== SIDA 80 ===== Annual report Page 80 Notes 1. Accounting policies (continued) Basis for consolidation The consolidated financial statements include the parent company Better Collective A/S and its subsidiaries. Subsidiaries are entities over which the Better Collective Group has control. The Group has control over an entity when the Group is exposed to or has rights to variable returns from its involvement in the entity and has the ability to affect those returns through its power over the entity. Only potential voting rights considered to be substantive at the balance sheet date are included in the control assessment. The Group re -assesses if it controls an investee if facts and circum- stances indicate that there are changes to one or more of the elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. The consolidated financial statements are prepared by combining uniform items. On consolidation, intercompany in- come and expenses, shareholdings, intercompany accounts and dividend as well as realized and unrealized profit and loss on transactions between the consolidated companies are eliminated. iXBRL reporting Better Collective A/S has filed the Annual Report for 2023 in the European Single Electronic Format (ESEF), XHTML format, that can be displayed in a standard browser. The primary statements and notes in the consolidated financial statements are tagged using extensible Business Reporting Language (iXBRL), which complies with the ESEF taxonomy included in the ESEF Regulation. Accounting policies Fair value measurement The Group uses the fair value concept in connection with certain disclosure requirements and for recognition of deriva- tive and business combinations . Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (“exit price”). The fair value is a market-based and not an entity-specific measurement. The entity uses the assumptions that the mar- ket participants would use for the pricing of the asset or liability based on the current market conditions, including risk assumptions. The entity’s purpose of holding the asset or settling the liability is thus not taken into account when the fair value is determined. The fair value measurement is based on the principal market. If a principal market does not exist, the measurement is based on the most advantageous market, i.e. the market that maximises the price of the asset or liability less transaction and transport costs. All assets and liabilities measured at fair value, or in respect of which the fair value is disclosed, are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measure- ment, see below: Level 1: Quoted priced in an active market for identical assets or liabilities Level 2: Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly Level 3: Inputs that are not based on observable market data (valuation techniques that use inputs that are not based on observable market data) Listed shares included under other current financial assets are measured at fair value (market price) at the balance sheet date. (Fair Value Level 1) Derivative financial instruments Derivative financial instruments are recognized on the trade date and are measured at fair value. Positive and negative fair values are included in other current receivables or other current payables in the statement of financial position. Positive and negative fair values are only offset if the Group has a right and an intention to settle several derivative financial instruments net (by means of settlement of differences). Fair value is determined based on generally accepted valuation methods using available observable market data. When entering into contracts for derivative financial instruments, an assessment is made of whether the instrument qualifies for hedge accounting, including whether the instrument hedges recognize d assets and liabilities. Fair value changes classified as and fulfilling the criteria for recognition as a fair value hedge are recognize d in the statement of profit or loss together with changes in the value of the specific portion of the asset or liability that has been hedged. Fair value changes in the part of the derivative financial instruments which is classified as and qualifies for recognition as a future cash flow hedge and which effectively hedges against changes in the value of the hedged item are recognized in other comprehensive income as a separate hedging reserve. When the underlying hedged item is realize d, any gain or loss on the hedging transaction is transferred from equity and recognized together with the hedged item. Fair value changes that do not meet the criteria for treatment as hedging instruments are recognize d on an ongoing basis in the statement of profit or loss under financial items. ===== SIDA 81 ===== Annual report Page 81 Notes 1. Accounting policies (continued) Business combinations (common-control) The modified uniting-of-interest method is applied to vertical mergers in which the participating entities are subject to the Parent’s control. Under this method, assets and liabilities of the participating entities are recognized at the amounts at which they are recognized in the consolidated financial statements of the parent forming part of the merger. Vertical mergers are recognized at the merger date without restatement of comparative figures. Cash flow statement The Cash Flow Statement shows the cash flows of the Group for the year, distributed on operating activities, investing activities, and financing activities for the year, changes in cash and cash equivalents, and the cash and cash equivalents at the beginning and the end of the year, respectively. The cash flow effect of acquisitions of businesses is shown separately in cash flows from investing activities. Cash flows from acquired businesses are recognized in the cash flow statement from the date of acquisition. Cash flow from operating activities Cash flows from operating activities are determined as profit for the year adjusted for noncash operating items, the change in working capital and income tax paid. Cash flow from investing activities Cash flows from investing activities comprise payments in connection with the acquisition and sale of businesses, intan- gible assets, plant and machinery and financial assets. Cash flow from financing activities Cash flows from financing activities comprise change in the size or composition of the Group’s share capital and related costs as well as borrowing, repayment of interest-bearing debt, re-payment of lease liabilities, and payment of dividends to shareholder. Notes 2. Significant accounting judgements, estimates and assumptions The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the accompanying disclosures, as well as the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates co uld result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The key accounting judgements, estimates, and assumptions, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Manage- ment based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to uncertainty about the situation in Ukraine, market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur. Climate change and sustainability risks To Better Collective, the key ESG/sustainability risks lie within the social and governance spaces and less within the environment space. While minimizing emissions is an embedded part of the Group's targets, management does not consider climate change to have a material impact on the accounting estimates and judgements prepared by manage- ment in relation to the 2023 consolidated and parent company financial statements. In preparing the consolidated financial statements for 2023, management has also considered the impact of social and governance to the extent possible. As always, safer gambling is a key element in our sustainability efforts, as the focus on safer gambling and being a responsible business is what grants us our social license to operate. As sports betting becomes more widespread, more countries are amending or implementing new gambling laws and regulations. We have processes for being continuously updated on regulation, and accounting estimates (e.g. estimate of fair value and value in use) are based on information available to management. At 31 December 2023, it is assessed that social and govern- ance risks have not had a material impact on accounting estimates. ===== SIDA 82 ===== Annual report Page 82 Notes 2. Significant accounting judgements, estimates and assumptions (continued) Business combinations The Group is required to allocate the acquisition cost of entities and activities through business combinations on the basis of the fair value of the acquired assets and assumed liabilities. The Group uses external and internal valuations to determine the fair value. The valuations include management estimates and assumptions as to future cash flow projec- tions from the acquired business and selection of models to compute the fair value of the acquired components and their depreciation period. Estimates made by Management influence the amounts of the acquired assets and assumed liabilities and the depreciation and amortization of acquired assets in profit or loss. Reference is made to note 22 of the consolidated financial statements. Goodwill, intangible assets with indefinite useful life and impairment Goodwill and domain names and websites are expected to have an indefinite useful life and are therefore not subject to amortization. Management believes that as long as content is being updated continuously and based on existing tech- nology there is no foreseeable limit to the period on which the assets can generate revenues and cash flow from the underlying business activities of the sportsbooks . Consequently, Management has assessed indefinite life of domain names and websites similar to its peers in the i ndustry. Management reviews this assessment annually to determine whether the indefinite life continues to be supportable. Management reviews goodwill and domain names and websites for impairment at least once a year. This requires Man- agement to make an estimate of the projected future cash flows from the continuing use of the cash-generating unit to which the assets are allocated and also to choose a suitable discount rate for those cash flows. Management has assessed that the cash generating units identified in 202 1 (Paid Media (Paid Media Europe & ROW) ), HLTV, US, Europe & ROW ) continue, and that the asset and business acquisitions of Skycon is included in Paid Media, Playmaker HQ is included in US and Sporty Solutionz Private Limited(India), Digital Sport media I Norden AB, Torcedores.com and Tipsbladet ApS are included in Rest of Better Collective, respectively. Performance and cash flows from domain names and websites owned by the individual cash generating units are allocated and forms the basis for impairment . Reference is made to note 13 of the consolidated financial statements. If the events and circumstances do not continue to support a useful life assessment and the projected future cash flows from the intangible assets is less than the assets’ carrying value, an impairment loss will be recognized . In addition, Management will change the indefinite useful life assessment from indefinite to finite and this change will be accounted for prospectively as a change in accounting estimate. Revenue from agreements with variable components The Group has agreements with customers that include variable revenue, e.g. agreements where the CPA and hybrid deals value depends on the achievement of NDC targets . CPA revenue under these contracts is recognized with the number of NDCs delivered and the estimated CPA value based on expected performance for the contract period. Special items Significant expenses and income, which Better Collective considers not part of ordinary business operations , are pre- sented in the Income statement in a separate line item labelled ‘Special items’ in order to distinguish these items from other income statement items, and provide a more transparent and comparable view of Better Collective’s ongoing performance. Types of expenses and income included in special items include cost related to dual listing, M&A, adjust- ments to Earn -out payments, cost related to re structuring, income from divestiture of non- strategic assets and cost related to the Action Network Management Incentive Program. Reference is made to note 8 of the consolidated financial statements and note 6 of the parent company financial statements. Deferred tax Management applies significant estimates when recognizing and measuring deferred tax assets. Deferred tax assets, including the tax base of tax loss carryforwards, are recognized if it is assessed that there will be sufficient future taxable income against which the temporary differences and unutilised tax losses can be utilised. This assessment is based on budgets and business plans for the following years, including planned business initiatives. Deferred tax assets are tested annually and are only recogniz ed if it is probable that future taxable profit will allow the deferred tax asset to be recovered. Contingent consideration Contingent consideration resulting from business combinations is valued at fair value at the acquisition date as part of the business combination. When the contingent consideration meets the definition of a financial liability, it is subse- quently remeasured to fair value at each reporting date. The determination of the fair value is based on discounted cash flows. The key assumptions take into consideration the probability of meeting the performance target (see Note 22 (Group) for details). ===== SIDA 83 ===== Annual report Page 83 Notes 3. Segment information Better Collective reports on the geographical segments North America (NA) and Europe & Rest of World (ROW), meas- uring and disclosing separately for Revenue, Cost and Earnings. The group also reports on the segments Publishing and Paid Media. Publishing and Paid Media The Publishing business segment includes revenue from Better Collective’s proprietary online platforms and media part- nerships where the online traffic is coming either directly or through organic search results, whereas Paid Media gener- ates revenue through paid ad -traffic to our website s, thereby running on a significantly lower earnings margin. The segment reporting includes these two segments. The performance for the Publishing and Paid Media Segments is pre- sented in the below table: Publishing Paid Media Group tEUR 2023** 2022 2023 2022 2023** 2022 Revenue Share 120,776 83,750 41,049 17,868 161,825 101,618 CPA 40,590 55,398 63,371 63,757 103,960 119,155 Subscription 17,959 17,042 0 0 17,959 17,042 Other revenue 41,004 30,867 1,937 615 42,941 31,482 Revenue 220,328 187,057 106,358 82,241 326,686 269,297 Cost 139,685 115,376 75,920 68,846 215,605 184,222 Operating profit before depreciation, amortization and special items 80,642 71,681 30,438 13,394 111,080 85,075 EBITDA-Margin before special items 37% 38% 29% 16% 34% 32% Special items, net - 1,948 - 54 0 0 - 1,948 - 54 Operating profit before depreciation and amortization 78,695 71,627 30,438 13,394 109,132 85,021 EBITDA-Margin 36% 38% 29% 16% 33% 32% Depreciation 3,909 2,306 49 15 3,958 2,321 Operating profit before amortization 74,785 69,321 30,389 13,379 105,174 82,700 EBITA-Margin 34% 37% 29% 16% 32% 31% Europe & ROW / North America Better Collective has reported on the geographical segments North America and Europe & RoW (Rest of World), meas- uring and disclosing separately for Revenue, Cost and Earnings. The scope of operating segments has been modified following changes in management responsibilities as from January 1, 2023. US has been renamed to North America (NA) and will now cover both USA and Canada. Canada was previously included in the operating segment “Europe and RoW”. 2022 comparative information has been restated. The performance of the segments is monitored at the level of operating profit before amortiz ation and special items, hence assets and liabilities for individual segments are not presented. The performance for North America and Europe & ROW segments is presented in the below table: Europe & RoW North America Group tEUR 2023 2022* 2023** 2022* 2023** 2022 Revenue Share 136,211 90,874 25,614 10,745 161,825 101,618 CPA 49,173 54,061 54,788 65,094 103,960 119,155 Subscription 2,461 1,539 15,499 16,464 17,959 17,042 Other revenue 30,241 22,802 12,700 7,719 42,941 31,482 Revenue 218,085 169,275 108,600 100,022 326,686 269,297 Cost 137,902 115,620 77,703 68,602 215,605 184,222 Operating profit before depreciation, amortization and special items 80,183 53,656 30,897 31,420 111,080 85,075 EBITDA-Margin before special items 37% 32% 28% 31% 34% 32% Special items, net - 1,060 - 1,360 - 888 1,306 - 1,948 - 54 Operating profit before depreciation and amortization 79,123 52,296 30,009 32,725 109,132 85,021 EBITDA-Margin 36% 31% 28% 33% 33% 32% Depreciation 2,947 1,671 1,011 650 3,958 2,321 Operating profit before amortization 76,176 50,625 28,998 32,075 105,174 82,700 EBITA-Margin 35% 30% 27% 32% 32% 31% *2022 figures have been restated for the transfer of Canada and renaming USA to North America (NA) (3,6 mEUR) and for Revenue Share and CPA because of the reclassification of upfront payments related to hybrid revenue share contracts impacting 5.9 mEUR. **Reclassification has been made on 1,851 tEUR in 2023 figures for North America since publishing Q4 report. The effected lines are revenue share and Other. Recurring revenue has been adjusted accordingly. ===== SIDA 84 ===== Annual report Page 84 Notes 4. Revenue specification In accordance with IFRS 15 disclosure requirements, total revenue is split on Revenue Share, Cost per Acquisition (CPA), Subscription Revenue, Banner revenue/CPM (Cost per million impressions) and Other, as follows: The Group has earned 92.5 mEUR (2022: 65.5 mEur) in revenues from one major customer, which represents 28 % of the Group’s revenue (2022:24%). The revenue is related to all operating segments. tEUR 2023** 2022* Revenue type Revenue Share 161,825 101,618 CPA 103,960 119,155 Subscription 17,959 17,042 Other revenue 42,941 31,482 Total revenue 326,686 269,297 %-split Revenue Share 50 38 CPA 32 44 Subscription 5 6 Other revenue 13 12 Total 100 100 tEUR 2023** 2022* Revenue category Recurring revenue (Revenue share, Subscription, CPM) 191,118 127,573 CPA, Fixed Fees 135,385 140,436 Other 183 1,288 Total revenue 326,686 269,297 %-split Recurring revenue 58 48 CPA, Fixed Fees 42 52 Other 0 0 Total 100 100 Accounting policies Revenue The Group’s revenue consists of four different revenue streams, that either are recognized at a point in time or over time. Further, the Group has agreements with sportsbooks that include variable consideration, which is recognized based on expected performance for the contract period. Revenue share: In a revenue share model the Group receives a share of the revenues that a sportsbook has generated from a player betting or gambling on their platform, the player initially having been referred from one of the Group’s websites. Revenue is recogni zed at a point in time equal to the month that it is earned by the respective sportsbook. Hybrid revenue: Revenue recognized under the hybrid revenue model consists of upfront revenue share (one - time upfront fee for each new referred player) and revenue share for the amount that aggregate revenue share exceeds the aggregate upfront revenue share. Upfront reven ue share is recognized at a point in time equal to the month in which the player referral is made. Revenue share is recognized once the aggregate revenue share exceeds the upfront revenue share and is recognized at a point in time equal to the month that it is earned by the respective sportsbook. Cost per acquisition (CPA): For CPA deals, the sportsbook pays a one-time upfront fee for each referred player who deposits money on their platform. Cost per acquisition consists of a pre -agreed rate with the sportsbook . Revenue is recognized at a point in time equal to the month in which the deposits are made. Subscription Revenue: Subscription revenue is subscription fees received by players who subscribe to services provided by the Group’s websites, primarily in the US market. Subscription revenue is recogni zed over time as the services under the subscription is delivered. Other Revenue: Other revenue primarily includes revenue from sales of banners and other marketing fees from customers related to the Group’s websites and is recognized when the service is delivered. Banner revenue can both be CPM (Cost per million impressions) or based on direct fixed fee agreements with customers. *2022 figures have been restated for the transfer of Canada and renaming USA to North America (NA) (3,6 mEUR) and for Revenue Share and CPA because of the reclassification of upfront payments related to hybrid revenue share contracts impacting 5.9 mEUR. **Reclassification has been made on 1,851 tEUR in 2023 figures for North America since publishing Q4 report. The effected lines are revenue share and Other. Recurring revenue has been adjusted accordingly. ===== SIDA 85 ===== Annual report Page 85 Notes 5. Staff and other costs tEUR 2023 2022 Wages and salaries 72,447 55,656 Pensions, defined contribution 3,894 3,168 Other social security costs 4,641 3,333 Share-based payments 2,510 1,935 Other staff costs 5,429 4,548 Total staff cost 88,921 68,639 Average number of full-time employees 1,252 878 Remuneration to Executive Management Wages and salaries 1,592 1,512 Pensions, defined contribution 169 132 Other social security costs 6 0 Share-based payments 618 97 Total 2,385 1,741 Remuneration to Board of Directors Wages and salaries 480 317 Share-based payments 0 0 Total 480 317 Accounting policies Direct cost related to revenue Direct cost related to revenue contains cost of running the websites and includes, content pro- duction, domain name registration, domain hosting, and external development cost. Staff cost Staff cost include wages and salaries, including compensated absence and pension to the Com- pany’s employees, as well as other social security contributions, etc. The item is net of refunds from public authorities. Costs related to long term employee benefits, e.g. share-based payments, are recognized in the period to which they relate. Other external expenses Other external expenses include the year’s expenses relating to the Company’s core activities, including expenses relating to sale, advertising, administration, premises, bad debts, etc. ===== SIDA 86 ===== Annual report Page 86 Notes 5. Staff and other costs (continued) Board & Committee Fees tEUR Jens Bager Klaus Holse Leif Nørgaard Petra von Rohr Therese Hillman Todd Dunlap Rene Rechtman Britt Boeskov Total 2023 149 30 59 52 97 52 19 22 480 2022 104 37 44 37 59 37 0 0 317 Remuneration to Executive Management Jesper Søgaard Christian Kirk Rasmussen Flemming Pedersen Total 2023 Wages and salaries 516 516 560 1.592 Pensions, defined contribution 45 45 79 169 Other social security costs 1 1 4 6 Share-based payments 177 177 264 618 Total 739 739 907 2.385 2022 Wages and salaries 497 497 518 1.512 Pensions, defined contribution 34 34 64 132 Other social security costs 0 0 0 0 Share-based payments 19 19 59 97 Total 550 550 641 1.741 ===== SIDA 87 ===== Annual report Page 87 Notes 6. Share-based payment plans 2019 program: During the year 2023 the company did not grant any warrants under this program. During the year 2023, employees have exercised warrants corresponding to 191,081 shares issued. 2020 program: During the year 2023 the company did not grant any warrants under this program. During the year 2023, employees have exercised warrants corresponding to 26,668 shares issued. 2021 Warrant programs: On September 10th, 2021, 422,500 new warrants were granted to certain key employees, all with the right to subscribe for one ordinary share and are classified as equity-settled share-based payment transactions*. The vesting periods range from 2022-2024 and the exercise periods range from 2024 to 2026. Expenses for the first two vesting periods have been recognized based on the realized retention (75%) and performance factors (100%). On October 1st, 2021, 473,563 PSUs and 201,238 share options were issued for a management incentive program related to Action Network, with the right to subscribe for one ordinary share and are classified as equity -settled share-based payment transactions*. The vesting periods range from 2022-2024 and the exercise periods range from 2022 to 2026. Expenses for the first vesting period have been recognized based on the realized retention (75%) and performance factors (100%) and for the final two remaining vesting period expenses are recognized based on expected retention (75%) and performance factors (0%) During the year 2023, employees have exercised Performance Stock Units corresponding to 0 shares issued. * The Board of Directors keeps the right to change the classification of the share-based programs, to a cash-settled. 2022 LTI program: On January 27, 2022 a new LTI program consisting of Performance Stock Units and stock options was announced. Under the program 24,564 options and 7 3,894 PSUs were granted to certain key employees . Whereas the options have the right to subscribe for one ordinary share , the PSUs have a performance-based element that can increase to two shares for one PSU – both are classified as equity -settled share-based payment transactions*. The vesting period runs from 2022-2025 and the exercise period runs from 2025 to 2027. * The Board of Directors keeps the right to change the classification of the share-based programs, to a cash-settled. Management Incentive Program: On March 1, 2022, a new tranche was established for the Management Incentive Program for Action Network. Under the program 94,529 PSUs and 44,458 options were granted with the right to subscribe for one ordinary share and , are classified as equity-settled share-based payment transactions*. During the year 2023, employees have exercised Performance Stock Units corresponding to 34,531 shares issued. * The Board of Directors keeps the right to change the classification of the share-based programs, to a cash-settled. 2023 LTI program: On January 3, 2023, a new LTI program consisting of Performance Stock Units and stock options was announced. Under the program 240,927 options and 137,819 PSUs were granted to certain key employees. Whereas the options have the right to subscribe for one ordinary share, the PSUs have a performance -based element that can increase to two shares for one PSU – both are classified as equity -settled share-based payment transactions*. The vesting period runs from 2023-2026 and the exercise period runs from 2026 to 2028. * The Board of Directors keeps the right to change the classification of the share-based programs, to a cash-settled. 2023 CXO program: On April 25th, 2023, a new CXO program consisting of stock options was approved by the board of directors. Under the program 300,000 options were granted to the chief executive management. Each option granted gives the participants the right to subscribe for one ordinary share subject to a performance -based element . Transactions under the CXO program are classified as equity -settled share-based payment transactions*. The vesting period runs from 202 3-2026 and the exercise period runs from 2026 to 2028. * The Board of Directors keeps a right to change classification of the share-based programs, to a cash-settled. ===== SIDA 88 ===== Annual report Page 88 Notes 6. Share-based payment plans (continued) Warrant programs impact in the consolidated financial statements: The total share- based compensation expense recogni zed for the full year 202 3 is 2,509 tEUR (2022: 2,871 tEUR), The cost of the MIP Action program is included as special items and amounts to 0 EUR in 2023 (2022 : 936 tEUR). The weighted average remaining contractual life of warrants to key employees outstanding as of December 31, 202 3, and 2022 was 2.38 and 2.63 years respectively. The weighted exercise prices for outstanding instruments as of December 31, 2023 and 2022 were 14.51 EUR and 13.85 EUR. Board of Directors Executive Management Key personnel Total warrants / options, numbers Exercise price, weighted average EUR Total Performance Stock Units Grant price, weighted average EUR Total Units Share options outstanding at January 1, 2023 25,000 600,000 1,293,949 1,918,949 13 441,154 18 2,360,103 Granted 0 300,000 240,932 540,932 12 137,819 12 678,751 Forfeited/expired 0 0 194,509 194,509 17 345,855 17 540,364 Exercised 0 0 217,749 217,749 9 34,531 14 252,280 Transferred 0 0 0 0 0 0 0 0 Share options outstanding at December 31, 2023 25,000 900,000 1,122,623 2,047,623 15 198,587 14 2,246,210 Of this exercisable at the end of the period 25,000 600,000 425,181 1,050,181 10 0 n/a 1,050,181 Share options outstanding at January 1, 2022 25,000 724,644 1,459,305 2,208,949 11 422,175 19 2,631,124 Granted 0 0 69,022 69,022 15 168,423 16 237,445 Forfeited/expired 0 0 43,241 43,241 14 46,651 18 89,892 Exercised 0 124,644 191,137 315,781 2 102,793 19 418,574 Transferred 0 0 0 0 0 0 0 0 Share options outstanding at December 31, 2022 25,000 600,000 1,293,949 1,918,949 13 441,154 18 2,360,103 Of this exercisable at the end of the period 0 300,000 120,333 420,333 9 0 n/a 420,333 ===== SIDA 89 ===== Annual report Page 89 Notes 6. Share-based payment plans (continued) 7. Fees paid to auditors appointed at the annual general meeting Non-audit services provided by EY amounted to 76 tEUR in 2023, relating to advisory services in relation to assurance and advisory in relation to ESG, various tax advisory services, due diligence services and other advisory services. Non - audit services provided by EY did not exceed 70% of the audit fees in accordance with EU audit legislation. 2023 2022 2021 2020 2019 Dividend yield (%) 0% 0% 0% 0% 0% Expected volatility (%) 50% 50% 50% 45-50% 35% Risk free interest rate (%) 1,75% 0% 0% 0% 0% Expected life of warrants (years) 4-5 4-5 4.4-5 5 5 Share price (EUR) 11.78 - 19.42 14.42 - 17.60 18,34 12.21 7.89 Exercise price (EUR) 11.78 - 19.42 14.42 - 17.60 19.44 13.76 8.68 Fair Value at grant date (EUR) 5.35 - 8.91 5.50-7.50 7.19 4.73 2.17 tEUR 2023 2022 Fee related to statutory audit 433 318 Fees for tax advisory services 0 0 Assurance engagements 72 25 Other assistance 76 0 Total audit fees 581 343 Accounting policies Share-based payments Key employees (including the Executive Management of the Group) receive remuneration in the form of share -based payments, whereby they render services as consideration for equity instruments (equity-settled transactions). The cost is recognized in staff costs, together with a corresponding increase in equity (other capital reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recogni zed for equity -settled transactions at each reporting date until the vesting date, reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. No expense is recognized for awards that do not ultimately vest because non -market performance and/or service conditions have not been met. The dilutive effect of outstanding warrants is reflected as additional share dilution in the computation of diluted earn- ings per share. When warrants are exercised, the Company issues new shares. The proceeds received are credited to share capital for the par value of the shares and share premium for the remainder. ===== SIDA 90 ===== Annual report Page 90 Notes 8. Special items Special items consist of recurring and non-recurring items that management does not consider to be part of the group’s ordinary operating activities, i.e. acquisition costs, adjustment of earn-out payments related to acquisitions, and restruc- turing costs are presented in the Income statement in a separate line item labelled ‘Special items. The impact of special items is specified as follows: Note tEUR 2023 2022 Operating profit 80,891 70,353 Special Items related to: Special items related to dual listing - 1,129 0 Special items related to M&A - 10,224 - 1,263 Variable payments regarding acquisitions - cost 0 - 192 Variable payments regarding acquisitions - income 9,924 2,467 Special items related to Restructuring - 519 - 130 Special items related to Management Incentive Program 0 - 936 Special items, total - 1,948 - 54 Operating profit (EBIT) before special items 82,839 70,407 Amortization and impairment 24,283 12,347 Operating profit before amortization and special items (EBITA before special items) 107,122 82,754 Depreciation 3,958 2,321 Operating profit before depreciation, amortization, and special items (EBITDA before special items) 111,080 85,075 Accounting policies Special items Significant expenses and income, which Better Collective considers not part of ordinary business operations, are presented in the Income statement in a separate line item labelled ‘Special items’ in order to distinguish these items from other income statement items and provide a more transparent and comparable view of Bet- ter Collective’s ongoing performance. Types of expenses and income included in special items include cost related to dual listing, M&A, adjustments to Earn -out payments, cost related to res tructuring, income from divestiture of non-strategic assets, dual listing and cost related to the Action Network Management Incentive Program. ===== SIDA 91 ===== Annual report Page 91 Notes 9. Finance income 10. Finance costs tEUR 2023 2022 Exchange losses 4,432 4,543 Interest expenses 12,146 3,839 Interest - right of use assets (Leasing) 425 150 Fair value adjustment 8,126 0 Other financial costs 3,739 1,055 Total finance costs 28,868 9,587 tEUR 2023 2022 Exchange gains 3,090 4,170 Interest income 251 5 Other financial income 2,647 23 Total finance income 5,987 4,198 Accounting policies Financial income and expenses Financial income and expenses are recognized in the income statements at the amount that concerns the fi- nancial year. Net financials include interest income and expenses, interest expenses calculated according to IFRS16, foreign exchange adjustments, fees related to credit facilities, gains and losses on the disposal of se- curities, as well as allowances and surcharges under the advance-payment-of-tax scheme, etc. ===== SIDA 92 ===== Annual report Page 92 Notes 11. Income tax Total tax for the year is specified as follows: tEUR 2023 2022 Tax for the period 18,175 16,888 Tax on other comprehensive income 0 3,747 Total 18,175 20,635 Income tax on profit for the year is specified as follows: tEUR 2023 2022 Deferred tax 3,641 6,785 Current tax 16,400 10,153 Adjustment from prior years - 1,867 - 49 Total 18,175 16,888 Tax on the profit for the year can be explained as follows: tEUR 2023 2022 Specification for the period: Calculated 22% tax of the result before tax 12,762 14,292 Adjustment of the tax rates in foreign subsidiaries relative to the 22% 1,955 1,563 Tax effect of: Special items 868 - 83 Special items - taxable items - 233 - 243 Other non-taxable income - 410 - 150 Other non-deductible costs 3,461 1,558 Unrecognized tax losses carried forward 2,010 0 Tax deductable - 371 0 Adjustment of tax relating to prior periods -1,867 -49 Total 18,175 16,888 Effective tax rate 31.3% 26.0% tEUR 2023 2022 Deferred tax liabilities Deferred tax January 1 69,002 60,050 Additions from business acquisitions 6,120 0 Adjustments of deferred tax in profit and loss 3,641 6,785 Exchange rate difference - 1,329 2,166 Deferred tax December 31 77,434 69,002 Deferred tax is recognized in the balance sheet as: Deferred tax asset 7,236 9,165 Deferred tax liability 84,670 78,167 Deferred tax December 31 77,434 69,002 Deferred tax is related to: Intangible assets 90,130 78,235 Property, plant and equipment 322 - 68 Liabilities 1,040 0 Other - 4,196 0 Tax losses carried forward - 9,862 - 9,165 Deferred tax December 31 77,434 69,002 The group has total tax asset of 2,010t EUR related to tax losses carried forward, which are not recognized in the finan- cial statement due to the uncertainty of utilizing the tax asset. Of not recognized tax losses carry forwards 2,010t EUR, may be carried forward for up to 3 years. ===== SIDA 93 ===== Annual report Page 93 Notes 11. Income tax (continued) Accounting policies The tax expense for the year, which comprises current tax and changes in deferred tax, is recognized in the income statement as regards the portion that relates to the profit/loss for the year, and directly in equity as regard s the portion that relates to entries directly in equity. Tax expense relating to amounts recognized in other comprehensive income is recognized in other comprehensive income. Tax is provided on the basis of the tax rules and tax rates applicable in the individual countries where Better Collective has a tax presence. Current and deferred tax Current tax liabilities and current tax receivables are recognized in the balance sheet as tax computed on the year’s taxable income adjusted for tax on the previous year’s taxable income and tax paid on account. Deferred tax is measured using the balance sheet liability method on all temporary differences between the carrying amount an d the tax value of assets and liabilities. Deferred tax liabilities as well as deferred tax assets are recognized . However, deferred tax is not recognized on temporary differences relating to goodwill which is not deductible for tax purposes and on office premises and other items where temporary differences, apart from business combinations, arise at the date of acquisition without affecting either profit/loss for the year or taxable income. Deferred tax assets, including the tax value of tax loss carry forwards, are recognized under other non-current assets at the expected value of their utilization; either as a set-off against tax on future income or as a set-off against deferred tax liabilities in the same legal tax entity and jurisdiction. Deferred tax is measured according to the tax rules and at the tax rates applicable in the respective countries at the balanc e sheet date when the deferred tax is expected to crystallize as current tax. Joint taxation of the parent Company and Danish subsidiaries The Parent Company is subject to the Danish rules on compulsory joint taxation of the Group’s Danish subsidiaries. Subsidiari es are included in the joint taxation arrangement from the date when they are included in the consolidated financial statements and up to the date when they are excluded from the consolidation. The Parent Company acts as administration company for the joint taxation arrangement and consequently settles all corporate i ncome tax payments with the tax authorities. On payment of joint taxation contributions, the Danish corporation tax charge is allocated between the jointly taxed entities in proportion to their taxable income. Entities with tax losses receive joint taxation contributions from entities that have been able to use the tax losses to reduce their own taxable income. Joint taxation contributions payable and receivable are recognized in the balance sheet as corporation tax receivable or corporation tax payable. ===== SIDA 94 ===== Annual report Page 94 Notes 12. Intangible assets tEUR Goodwill Domains and websites Accounts and other intangible assets* Total Cost or valuation As of January 1, 2023 183,942 460,513 63,705 708,159 Additions 0 3,412 53,914 57,326 Acquisitions through business combinations 75,335 10,842 29,579 115,756 Disposals 0 0 - 6,531 - 6,531 Currency Translation - 4,203 - 8,151 - 602 - 12,956 At December 31, 2023 255,074 466,615 140,065 861,754 Amortization and impairment As of January 1, 2023 0 0 36,688 36,688 Amortization for the period 0 0 24,283 24,283 Currency translation 0 0 - 646 - 646 At December 31, 2023 0 0 60,325 60,325 Net book value at December 31, 2023 255,074 466,615 79,740 801,429 *Accounts and other intangible assets consist of accounts (30,474 tEUR), Media Partnerships (48,769 tEUR) and software and others (497 tEUR). tEUR Goodwill Domains and websites Accounts and other intangible assets* Total Cost or valuation As of January 1, 2022 178,182 329,276 36,827 544,285 Additions 0 118,185 26,337 144,522 Acquisitions through business combinations 0 0 0 0 Disposals 0 0 0 0 Currency Translation 5,760 13,051 540 19,351 At December 31, 2022 183,942 460,513 63,705 708,159 Amortization and impairment As of January 1, 2022 0 0 24,374 24,374 Amortization for the period 0 0 12,348 12,348 Currency translation 0 0 - 33 - 33 At December 31, 2022 0 0 36,688 36,688 Net book value at December 31, 2022 183,942 460,513 27,016 671,471 *Accounts and other intangible assets consist of accounts (10,659 tEUR), Media Partnerships (15,794 tEUR) and software and others (563 tEUR). ===== SIDA 95 ===== Annual report Page 95 Notes 12. Intangible assets (continued) Accounting policies Goodwill and intangible assets Goodwill Goodwill is initially recognized at cost. Subsequently, goodwill is measured at cost less accumulated impairment losses. Goodwill is not amortized and impairment losses on goodwill are not reversed. The carrying amount of goodwill is allocated to the Group’s cash -generating units at the date of acquisition. Impairment is performed once a year as of December 31 or more frequently if events or changes in circumstances indicate that there is an impairmen t. An impairment loss is recognized if the recoverable amount of the cash-generating unit to which goodwill has been allocated is less than the carrying amount of the cash -generating unit. Identification of cash-generating units is based on the management structure and internal financial controls. Intangible assets Separately acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets acquired in a business combination or asset acquisitions are measured at fair value at the acquisition date. Expenditures relating to internally generated intangible assets are recognized in profit or loss when incurred. Intangible assets with a finite useful life are amortized over their useful life and reviewed for impairment whenever there is an indication that the asset may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least at each year end. Agreements related to media partnerships are measured at fair value of the fixed payments related to the agreement at the starting date. The value is amortized over the lifetime of the agreement Intangible assets with indefinite useful lives (domains and websites) are not amortized, but are tested for impairment annually, either individually or at the cash- generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized. Costs related to maintenance of intangible assets, are not capitalized on the balance sheet but recognized in profit and loss in the financial year they are incurred. Amortization The item comprises amortization of intangible asset, as well as any impairment losses recognized for these assets during the period. The basis of amortization, which is calculated as cost less any residual value, is amortized on a straight-line basis over the expected useful life. The expected useful lives of long-lived assets are as follows: Goodwill Indefinite Domains and websites Indefinite Accounts 3 years Media Partnerships 1-10 years Software 3 years ===== SIDA 96 ===== Annual report Page 96 Notes 13. Goodwill and intangible assets with indefinite life The Group added intangible assets in 2023 from asset transactions of Sporty Solutionz Private Limited (India) and ac- quisitions from business combinations of Skycon Limited, Playmaker HQ, Digital Sport media I Norden AB, Torcedores.com and Tipsbladet ApS, as described in note 22. For 2022, they arose from asset transactions of FUTBIN and Canada Sports Betting. Goodwill and domain names and websites arising on business combinations are not subject to amortization, but are reviewed annually for impairment, or more frequently if there are any indicators of impairment that are noted during the year. Cash-generating units Goodwill from a business combination is allocated to cash-generating units in which synergies are expected to be gen- erated from the acquisition. A cash -generating unit represents the smallest identifiable group of assets that together have cash inflows that are largely independent of the cash inflows from other assets. In 2023 Better Collective continues to have four cash generating units with the asset and business acquisitions of Skycon included in Paid Media, Playmaker HQ included in US and Sporty Solutionz Private Limited (India), Digital Sport media I Norden AB, Torcedores.com and Tipsbladet ApS are included in Rest of Better Collective, respectively. Performance and cash flows from domain names and websites owned by the individual cash generating units are allocated and form the basis for impairment. Carrying amount of goodwill and Domains and Websites for the CGUs: Recoverable amount When testing for impairment, the Group estimates a recoverable amount for goodwill and for domain names and web- sites. The recoverable amount is the higher of the asset or cash-generating unit’s fair value less costs of disposal and its value in use. The recoverable amount is normally determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. The recoverable amount of domains and websites has been determined on the level of the cash-generating units, as explained above. Impairment test: For all CGUs US, HLTV, Paid Media and the rest of Better Collective, the Group has performed an impairment test on goodwill and domain names and websites as of December 31, 2023, on a value-in-use basis. Key estimates in the impair- ment test are growth in revenue, gross profits, discount rate and growth expectations in the terminal period. These are based on current and future development in the four CGUs and on historical data, including expected long-term market growths. Data is based on both internal and external data sources. Management has based the value in use by estimating the present value of future cash flows from a three-year forecast approved by the Board of Directors corresponding to the Group’s long- term forecast for 2024-2026. The forecast indi- cates an average annual gross profit growth of 23% during the forecast period, predicated on market development assumptions and communicated long-term target. Beyond the approved forecast, EBITDA growth, cash conversion and tax-rates have been projected with a time horizon of 7 years until 2033. From 2027 onward, the average gross profit growth rate is estimated to decline. In 2027, the average growth rate is projected to be 15% and the decline continues, reaching 3% by 2033, stabilizing thereafter at a theoretical steady state level in the terminal period. Based on expected 2033 EBITDA and cash flow , management has applied a terminal value rate of 2%. The cash flows assume a discount factor of 12% (pre-tax discount rate 15%) based on the Group’s weighted average cost of capital (WACC) in all years 2024-2033, with individual tax rates per country (22-25%). As at December 31, 2022 and December 31, 2023 the Board of Directors have evaluated goodwill, domains and websites for impairment. The results of the impairment tests for goodwill and domains and websites showed that the recoverable amount exceeded the carrying value and that there was no impairment loss to be recognized . The Board of Directors have approved the inputs to the impairment testing and are satisfied that the judgements made are appropriate. 2023 tEUR US HLTV Paid Media Rest of BC Total Goodwill 126.399 17.812 73.771 37.092 255.074 Domains and Websites 213.764 20.551 0 232.300 466.615 2022 tEUR US HLTV Paid Media Rest of BC Total Goodwill 97.708 17.777 41.178 27.279 183.942 Domains and Websites 221.462 20.551 0 218.500 460.513 ===== SIDA 97 ===== Annual report Page 97 Notes 13. Goodwill and intangible assets with indefinite life (continued) Sensitivity test The sensitivity of the impairment results has been as- sessed to test the impact of changes in cash flows and discount rate. The test concludes that even negative changes will not result in impairment of any of the cash- generating units (CGUs). The sensitivity test shows the lowest possible grow th rate must be 0% or the highest possible discount rate must be 30 % before any of the CGUs becomes impaired, which are unlikely to occur. Other domains and websites: Further to the CGUs, acquired domains and websites with indefinite life have been individually evaluated for indicators of impairment. The evaluation is based on ac- tual traffic on the websites, as well as actual and ex- pected revenue and NDCs generated by t he accounts with sportsbooks that are linked to the websites. In 2023 there has been no indicators for impairment. Accounting policies Business combinations and goodwill Business combinations are accounted for using the acquisition method. The acquisition date is the date when Better Collective A/S effectively obtains control over the acquired business. Any costs directly attributable to the acquisition are expensed as incurred. If a put and call option exist, the put and call option is taken into consideration when assessing the ownership of the business . If a put and call option exist , the put and call option is taken into consideration when assessing the ownership of the business. The acquired businesses’ identifiable assets, liabilities and contingent liabilities are measured at fair value at the acquis ition date. Identifiable intangible assets are recognized if they are separable or arise from a contractual right. Deferred tax related to the revaluations is recognized. The consideration paid for a business consists of the fair value of the agreed consideration in the form of the assets transferred, equity instruments issued, and liabilities assumed at the date of acquisition. If part of the consideration is contingent on future events, such consideration is recognized at fair value. Subsequent changes in the fair value of contingent consideration are recognized in the income statement as special items. A positive excess (goodwill) of the consideration transferred (includi ng any previously held equity interests and any non-controlling interests in the acquired business) over the fair value of the identifiable net assets acquired is recorded as go odwill. If uncertainties regarding identification or measurement of acquired assets, liabilities or contingent liabilities or determi nation of the consideration transferred exist at the acquisition date, initial recognition will be based on provisional values. Any adjustments in the provisional values, including goodwill, are adjusted retrospectively, until 12 months after the acquisition date, and comparative figures are restated. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, from the acquisition date, goodwill acquired in a business combination is allocated to each of the Group’s cash -generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquired business combination are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed in these circumstances is measured based on the relative fair values of the disposed operation and the portion of the cash generating unit retained. Impairment The carrying amounts of goodwill, intangible assets, property, plant and equipment and investments in subsidiaries is assesse d for impairment on an annual basis. Impairment tests are conducted on assets or groups of assets when there is evidence of impairment. Furthermore, goodwill and intangible assets with indefinite useful lives are tes ted on an annual basis as at December 31. The carrying amount of impaired assets is reduced to the higher of the net selling price and the value in use (recoverable amount). The recoverable amount is the higher of the net selling price of an asset and its value in use. Reference is made to the sect ion “Impairment test” for actual assumptions. The value in use is calculated as the present value of the expected net cash flows from the use of the asset or the group of assets and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful life. Impairment losses are recognized in the income statement under depreciation and amortization . Previously recognized impairment losses are reversed when the reason for recognition no longer exists. Impairment losses on goodwill are not reversed. ===== SIDA 98 ===== Annual report Page 98 Notes 14. Property, plant and equipment tEUR Right of use assets Fixtures and fit- tings, other plant and equipment Total Cost or valuation At January 1, 2023 9,777 4,995 14,772 Additions 12,368 5,042 17,410 Acquisitions through business combinations 0 0 0 Disposals - 2,536 - 70 - 2,606 Currency Translation - 72 - 29 - 100 At December 31, 2023 19,537 9,939 29,476 Depreciation and impairment At January 1, 2023 3,508 2,421 5,929 Depreciation for the period 2,671 1,287 3,958 Depreciation on disposed assets - 2,200 220 - 1,980 Currency translation - 17 5 - 12 At December 31, 2023 3,962 3,933 7,894 Net book value at December 31, 2023 15,575 6,006 21,582 tEUR Right of use assets Fixtures and fit- tings, other plant and equipment Total Cost or valuation At January 1, 2022 5,328 3,216 8,544 Additions 5,240 1,805 7,045 Acquisitions through business combinations 0 0 0 Disposals - 811 - 50 - 861 Currency Translation 20 25 45 At December 31, 2022 9,777 4,995 14,772 Depreciation and impairment At January 1, 2022 2,620 1,558 4,179 Depreciation for the period 1,443 878 2,321 Depreciation on disposed assets - 605 - 64 - 669 Currency translation 49 49 99 At December 31, 2022 3,508 2,421 5,929 Net book value at December 31, 2022 6,269 2,574 8,843 ===== SIDA 99 ===== Annual report Page 99 Notes 14. Property, plant and equipment (continued) Notes 15. Trade and other receivables tEUR 2023 2022 Trade receivables 42,086 35,824 Accrued revenue 4,723 12,197 Other receivables 2,144 5,158 Total receivables 48,954 53,179 Accounting policies Receivables Receivables are measured at amortized cost, which usually corresponds to nominal value. Write-downs on trade receivables are based on the simplified expected credit loss model. Credit loss allowances on individual receivables are provided for when objective indications of credit losses occur such as customer bankruptcy and uncertainty about t he customers’ ability and/or willingness to pay, etc. In addition to this, al- lowances for expected credit losses are made on the remaining trade receivables based on a simplified ap- proach. Reference is made to note 20 of the consolidated financial statements regarding credit risk. Prepayments Prepayments recognized under “Assets” comprise prepaid expenses regarding subsequent financial reporting years. Cash Cash consist of cash and cash equivalents in financial institutions. Accounting policies Property, plant and equipment Property, plant and equipment Property, plant and equipment are measured at cost less accumulated deprecia- tion and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. Gains and losses from the disposal of property, plant and equipment are recognized in the income statement as depreciation. Gains or losses are calculated as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Depreciation The item comprises depreciation of property, plant , and equipment, and right of use assets, as well as any im- pairment losses recognized for these assets during the period. The basis of depreciation, which is calculated as cost less any residual value, is amortized on a straight-line ba- sis over the expected useful life. The expected useful lives of long-lived assets are as follows: Right of use assets and leasehold improvements Up to 7 years Fixtures and fittings, other plant and equipment 3- 5 years Where individual components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items, which are depreciated separately. The basis of depreciation is calculated con- sidering the residual value at the end of the expected useful life and less any impairment. The depreciation pe- riod and residual value are determined at the time of acquisition and are reassessed every year. Where the re- sidual value exceeds the carrying amount of the asset, no further depreciation charges are recognized. ===== SIDA 100 ===== Annual report Page 100 Notes 16. Issued capital and reserves tEUR 2023 2022 2021 2020 2019 Share capital: Opening balance 551.5 546.3 469.0 464.3 404.9 Capital increase 2.2 5.2 77.2 4.8 59.4 Total 553.7 551.5 546.3 469.0 464.3 The share capital consists of 55,367,418 shares of nominal EUR 0.01 each. Share buy-back-2023 Throughout 2023 the company purchased 784 ,952 Better Collective A/S shares at an average price of 1 7.1 EUR. After the completion of the 2023 share buy-back programs Better Collective A/S had 1,387,580 treasury shares. Share buy-back-2022 Throughout 2022 the company purchased 949,870 Better Collective A/S shares at an average price of 13.3 EUR. 879,824 treasury shares were used as final payment of contingent liabilities related to the 2019 acquisition of Rotogrind- ers, settlement of tranche 1 of the Action Network Management Incentive Program, and final settlement of the variable payment related to the acquisition of HLTV. Share buy-back-2021 In March 2021 the company purchased 3,532 shares at an average price of 16.5 EUR to cover board fees payable in shares. 241 treasury shares were used in April 2021 as part of variable payment together with newly issued shares. In December 2021 a share buy-back program of up to 10 mEUR was announced. As of December 31, 2021, 445,575 shares had been purchased and were held at an average price of 18.1 EUR. The purpose of the buyback program was to cover future payments relating to completed acquisitions and to cover established Incentive Plans. Accounting policies Equity Treasury shares Treasury shares are own equity instruments that are re -acquired. They are recognized at cost as a deduction from equity in the reserve for treasury shares. The difference between par value and the acquisition price and consideration (net of directly attributable transaction costs) and dividends on treasury shares are recognized directly in equity in retained earnings. Share premium Share premium can be used for dividend. Currency translation reserve Foreign exchange differences arising on translation of Group entities and parent company to the EUR presen- tation currency are recognized in other comprehensive income (OCI) in a separate currency translation re- serve under equity. On disposal of a reporting entity, the component of other comprehensive income relating to that reporting entity is reclassified to profit or loss. ===== SIDA 101 ===== Annual report Page 101 Notes 17. Distributions made and proposed 18. Trade and other payables tEUR 2023 2022 Trade payables 10,936 10,484 Other payables 16,902 11,768 Total payables 27,838 22,252 tEUR 2023 2022 Declared and paid during the year on ordinary shares 0 0 Proposed dividend on ordinary shares 0 0 Accounting policies Proposed dividends Dividends proposed for the year are recognized as a liability when the distribution is authorized by the share- holders at the annual general meeting (declaration date). Dividends expected to be distributed for the financial year will be presented as a separate line item under “Equity”. Proposed dividends on ordinary shares are subject to approval at the Annual General Meeting. Accounting policies Prepayments consist of payments received from customers relating to income in subsequent periods. Prepay- ments are mainly classified as current, as the related revenue is recognized within one year. Trade payables are obligations to pay for goods or services acquired in the normal course of business. Trade payables are initially reported at fair value and, subsequently, at amortized cost using the effective interest method. Other payables comprise amounts owed to staff, including wages, salaries and holiday pay; amounts owed to the public authorities, including taxes payable, VAT, excise duties, interest expenses etc. Other financial liabilities comprise amounts payable to sellers as a result of business combinations and asset acquisitions. ===== SIDA 102 ===== Annual report Page 102 Notes 19. Leasing Right-of-use assets tEUR Buildings Cars Total Balance at January 1, 2023 6,236 33 6,269 Additions 12,368 0 12,368 Disposals - 2,485 - 50 - 2,536 Modifications 73 0 73 Exchange rate adjustment - 135 0 - 135 Depreciation - 2,660 - 3 - 2,663 Depreciation on disposed assets 2,180 20 2,200 Balance at December 31, 2023 15,575 0 15,576 Balance at January 1, 2022 2,707 - 0 2,707 Additions 5,190 50 5,240 Disposals - 811 0 - 811 Modifications 0 0 0 Exchange rate adjustment - 19 0 - 19 Depreciation - 1,436 - 17 - 1,453 Depreciation on disposed assets 605 0 605 Balance at December 31, 2022 6,236 33 6,269 Lease liabilities tEUR 2023 2022 Maturity analysis - contractual undiscounted cash flows Less than one year 1,714 1,685 One to five years 15,262 3,467 More than five years 702 2,169 Total undiscounted cash flows 17,678 7,321 Total lease liabilities 16,028 6,614 Current 2,702 1,653 Non-current 13,326 4,962 The total cash outflow for leases during 2023 was 2,814 tEUR (2022: 1,424 tEUR). Amounts recognized in the consolidated income statement tEUR 2023 2022 Interest on lease liabilities 425 150 Expenses relating to short- term lease 457 295 Expenses relating to lease of low value assets 82 0 ===== SIDA 103 ===== Annual report Page 103 Notes 19. Leasing (continued) Accounting policies The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the ri ght to control the use of an identified asset for a period of time in exchange for consideration. Group as a lessee The Group applies a single recognition and measurement approach for all leases, except for short -term leases and leases of low-value assets. The Group recognizes lease liabilities to make lease payments and right-of-use assets represent the right to use the underlying assets. Right-of-use assets The Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right -of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement o f lease liabilities (due to indexation of lease payments or extension of leases). The cost of right -of-use assets includes the amount of lease liabilities recognize d, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term. Lease liabilities At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments includ e fixed payments (including in substance fixed payments) less any lease incentives receivable. In calculating the present value of lease payments, the Group uses its incremental borrowing rate of 4%, at the lease commenc ement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to extend the term of lease. Short-term leases and leases of low-value assets The Group applies the short -term lease recognition exemption to its short -term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a p urchase option). It also applies the lease of low-value assets recognition exemption to leases. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. ===== SIDA 104 ===== Annual report Page 104 Notes 20. Financial risk management objectives and policies The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency exchange risk and interest rate risk), credit risk, and liquidity risk. The Group has established principles for overall risk management, which seek to minimize potential adverse effects on the Group’s performance. Market Risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. For the Group, market risk comprises foreign currency risk and interest rate risk. Foreign currency risk Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s international operating activities. The Group’s revenues are mainly denominated in DKK, EUR, USD, and GBP, with limited revenues in SEK and PLN. The revenue in individual currencies is determined by the underlying betting currency at the sportsbook level as well as the exchange rates used by the sportsbook when calculating the revenue share. The currency fluctuations impact these processes and is the inherent risk. Across the Group, expenses have a general pattern which is in line with the revenue in the individual currencies. The expenses mainly origin in DKK, EUR, GBP, and USD, with limited spending in SEK, RON , PLN and BRL. The DKK exchange rate is fixed to the EUR. For GBP and USD, the expenses are linked to and follow the revenue in the entities operating in UK and US, respectively. The major currency exposure in Better Collective arises from the conversion of the USD and GBP denominated entities to the reporting currency, as well as the long -term loan provided from the parent company to Better Collective US Inc to finance the US acquisitions . The 202 3 impact of the fluctuating USD was 4.7 mEUR on a n EBITDA level, vs. 202 2 exchange rate, whereas the impact on the USD loan in the parent company was -9.4 mEUR. The exchange rate adjust- ments and corresponding tax impact on these loans are included in Other Comprehensive Income for the group if any. The Board of Directors has in general decided not to hedge currency exchange risk given the underlying inherent risk and the capital structure, however The Board of Directors has in 2023 decided to hedge currency exchange risk related to the acquisition of Playmaker Capital and the consideration to be transferred consisting of 55 mCAD and 29 mUSD. Excluding the 2022 impact from the fluctuating USD, the historic exposure to currency fluctuations has not had a mate- rial impact on the Group’s financial condition or results of operations . Management deems that a sensitivity analysis showing how profit or pre -tax equity would have been impacted by changes in these foreign exchange rates is not deemed necessary. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from club financing with floating interest signed in October 2022 and in august 2023 extended by 3 years to October 2026. The interest rate risk arising from deposits held are short -term and non-material. With ~248.7 mEUR drawn on the facility as of December 2023, an increase in the interest of 1 %-point will drive an additional 2 mEUR in finance costs. However, management expects to reduce the credit facility in the short to medium term, as the Group is generating positive cash flows, and therefore exposure to interest rate risk is considered minimal. The Group regularly monitors its interest rate risk and considers it to be insignificant, therefore an interest rate sensitivity analysis is not deemed necessary. Credit risk The Group’s credit risks mainly relate to receivables. The risks are monito red on an ongoing basis and customers are individually assessed for credit limits and exposure. Based on this the exposure is in general considered insignificant. As per December 31, 2023, the Group’s impairment for expected loss is included in the trade receivables (ref note 15). ===== SIDA 105 ===== Annual report Page 105 Notes 20. Financial risk management objectives and policies (continued) Expected credit loss on receivables from trade receivables as of December 31, 2023: tEUR Expected Loss Rate Gross Receivable Expected loss Net receivable 2023 Not Due 0.5% 28,997 134 28,863 Less than 30 days 0.2% 8,786 22 8,764 Between 31 and 60 days 0.7% 2,936 20 2,916 Between 61 and 90 days 2.5% 1,704 43 1,661 More than 91 days 18.4% 5,644 1,039 4,605 Total 2.6% 48,067 1,258 46,809 Limited losses were recognized during 2023 and the weighted credit loss has slightly increased compared to 2022. Expected credit loss on receivables from trade receivables as of December 31, 2022: Liquidity risk The Group is exposed to liquidity risk in relation to meeting future obligations associated with its financial liabilities, which mainly include trade payables, other payables, earn-outs and deferred M&A payments, and the credit facility. The group ensures adequate liquidity through the management of cash flow forecasts and close monitoring of cash inflows and outflows. tEUR Expected Loss Rate Gross Receivable Expected loss Net receivable 2022 Not Due 0.4% 32,452 136 32,316 Less than 30 days 0.7% 9,563 71 9,493 Between 31 and 60 days 0.5% 4,537 24 4,513 Between 61 and 90 days 2.3% 369 8 361 More than 91 days 26.4% 1,821 481 1,340 Total 1.5% 48,742 721 48,021 ===== SIDA 106 ===== Annual report Page 106 Notes 20. Financial risk management objectives and policies (cont’d) The following table summarizes the maturities of the Group’s financial obligations. tEUR Carrying amount Fair Value Total < 1 year 2 – 5 years > 5 years 2022 Non-derivative financial instruments: Financial liabilities measured at fair value through profit and loss Earn-out consideration 30,058 30,058 30,425 15,425 15,000 0 Other financial liabilities measured at fair value 17,269 17,269 17,622 9,610 8,012 0 Financial liabilities measured at amortized costs Lease liabilities 6,614 6,614 7,321 1,685 3,467 2,169 Trade and other payables 22,252 22,252 22,252 22,252 0 0 Deferred payment on acquisitions 1,944 1,944 1,949 1,858 90 0 Debt to credit institutions 201,708 201,708 215,021 6,656 208,364 0 Derivative financial instruments: Financial liabilities measured at fair value Derivates used as hedging instrument 0 0 0 0 0 0 Total financial instruments 279,846 279,846 294,589 57,487 234,933 2,169 Assets: Trade and other receivables 53,179 53,179 53,179 53,179 0 0 Other current financial assets 0 0 0 0 0 0 Cash 31,497 31,497 31,497 31,497 0 0 Total financial assets 84,677 84,677 84,677 84,677 0 0 tEUR Carrying amount Fair Value Total < 1 year 2 – 5 years > 5 years 2023 Non-derivative financial instruments: Financial liabilities measured at fair value through profit and loss Earn-out consideration 60,491 60,491 60,491 35,985 24,506 0 Other financial liabilities measured at fair value 51,367 51,367 51,367 24,382 26,985 0 Financial liabilities measured at amortized costs Lease liabilities 16,028 16,028 17,678 1,714 15,262 702 Trade and other payables 27,838 27,838 27,838 27,838 0 0 Deferred payment on acquisitions 2,524 2,524 2,524 1,571 952 0 Debt to credit institutions 248,657 248,657 287,829 13,825 274,003 0 Derivative financial instruments: Financial liabilities measured at fair value Derivates used as hedging instrument - 483 - 483 - 483 - 483 0 0 Total financial instruments 406,421 406,421 447,242 104,832 341,708 702 Assets: Trade and other receivables 48,954 48,954 48,954 48,954 0 0 Other current financial assets 6,804 6,804 6,804 6,804 0 0 Cash 43,552 43,552 43,552 43,552 0 0 Total financial assets 99,310 99,310 99,310 99,310 0 0 ===== SIDA 107 ===== Annual report Page 107 Notes 20. Financial risk management objectives and policies (cont’d) Fair value of Earn-out consideration, contingent consideration, and other financial liabilities All liabilities measured at fair value, or in respect of which the fair value is disclosed, are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement, see be- low: Level 1: Quoted priced in an active market for identical assets or liabilities Level 2: Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly Level 3: Inputs that are not based on observable market data (valuation techniques that use inputs that are not based on observable market data) The fair value of Earn -Out consideration, and o ther financial liabilities is measured based on weighted probabilities of assessed possible payments discounted to present value (level 3). Derivates are measured at fair value based on gener- ally accepted valuation methods using available observable market data (level 2). Fair value of short term liabilities and financial assets In all material aspects the financial liabilities are current/short termed. Non-current loans and overdraft facility are sub- ject to a variable interest rate. Thus, the fair value of the liabilities is considered equal to the booked value. Listed shares included under other current financial assets are measured at fair value (market price) at the balance sheet date. (Fair Value Level 1) Capital Management For the purpose of the Group’s capital management, capital includes issued capital, share premium, and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to maximize shareholder value and to maintain an optimal capital structure. The Group manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, issue new shares or return capital to shareholders. Credit facilities As per December 31, 2023, Better Collective has drawn 248.7 mEUR (2022: 201.7) out of the total committed club facility of 319 mEUR established with Nordea, Nykredit, and Citibank. In August Better Collective extended the club -financing from October 2022 with Nordea, Nykredit and Citibank by 3 years to October 2026 as well as executing the accordion option increasing available facilities with 72 mEUR, leaving the group with a total financing of 319 mEUR where afore- mentioned 248.7 mEUR has been utilized. Net debt includes current and non-current debt to financial institutions and other financial liabilities, less cash and cash equivalents. Change in liabilities arising from financing activity tEUR 2021 Cash flows Net Non cash flow changes 2022 Cash flows Net Non cash flow changes 2023 Non-current financing liabilities 121,025 80,672 11 201,708 44,004 2,945 248,657 Leasing and other non-current liabilities 1,521 0 3,441 4,962 - 483 8,847 13,326 Current financing liabilities 0 0 0 0 0 0 0 Leasing current liabilities 1,347 - 1,274 1,579 1,653 - 2,814 3,863 2,702 Total liabilities from financing activities 123,893 79,398 5,031 208,322 40,708 15,655 264,685 Accounting policies Cash Cash comprise cash at bank and on hand. Liabilities The Group’s liabilities include prepayments from customers, trade payables and overdraft facility. Liabilities are classified as current if they fall due for payment within one year or earlier. If this condition is not met, they are classified as non-current liabilities. Earn-out amounts are measured at fair value through profit and loss. Debt to credit institutions are at initial recognition measured at fair value less transaction cost and subse- quently measured at amortized cost. Other financial liabilities comprise amounts payable to sellers as a result of business combinations and asset acquisitions as well as media partnerships. ===== SIDA 108 ===== Annual report Page 108 Notes 21. Change in working capital tEUR 2023 2022 Change in receivables 4,224 - 23,020 Prepaid expenses - 325 - 1,690 Prepayment from customers - 3,762 4,530 Change in trades payable, other debt 5,585 3,231 Change in working capital, total 5,722 - 16,949 22. Business combinations Acquisition of Skycon Limited On April 14, 2023 Better Collective completed the acquisition of Skycon Limited (Skycon) for a total consideration up to 51 mEUR (45 mGBP) with an initial consideration of 28.3 mEUR (25 mGBP) on a cash and debt -free basis. Skycon is a global display advertising company and perfectly complements Better Collective’s Paid Media division. The acquisition is a strategic move for Better Collective with significant synergistic opportunities. The transferred consideration was in cash and a earn out payable in cash. A goodwill of 32,239 tEUR emerged from the acquisition of Skycon as an effect of the difference between the transferred consideration and the fair value of acquired net assets. Goodwill is connected to the future growth expectations given the strong platform and significant synergistic opportunities. The earn outs are based on certain financial performance targets in the 12 months post-closing period. The goodwill is not tax deductible. Transaction costs related to the acquisition of Skycon amounts to 381 tEUR in 2023. Transaction costs are accounted for in the income statements under “special items”. The acquisition was completed on April 14, 2023. If the transaction had been completed on January 1, 2023 the group’s revenue YTD would have amounted to 332 mEUR and result after tax would have amounted to 43 mEUR. tEUR Purchase amount 56,029 Cash and cash equivalents 3,647 Earn out 22,614 Cash outflow 29,767 Acquired net assets at the time of acquisition tEUR Accounts and other intangible assets 24,227 Accrued Income 2,372 Trade receivables 45 Cash 3,647 Deferred Tax Liability - 6,502 Identified net assets 23,790 Goodwill 32,239 Total consideration 56,029 ===== SIDA 109 ===== Annual report Page 109 Notes 22. Business combinations (continued) Acquisition of Playmaker HQ On July 3, after the end of Q2, 2023 Better Collective US, Inc. completed the acquisition of Playmaker HQ for up to 51 mEUR (54 mUSD) with an initial consideration of 14.1 mEUR (15 mUSD) on a cash and debt- free basis. Playmaker HQ is a leading sports and entertainment media platform headquartered in South Florida, US. The sports media group special- izes in providing original entertainment and sports content with exclusive athlete collaborations and creator talent mainly targeting the US market. tEUR Purchase amount 38,864 Cash and cash equivalents 0 Earn out 23,968 Cash outflow 14,896 The transferred consideration was in cash and a earn out payable in cash. Acquired net assets at the time of acquisition tEUR Accounts and other intangible assets 5,352 Accounts receivable 320 Trade payables - 94 Total net assets 5,578 Goodwill 33,286 Total consideration 38,864 The acquisition of Playmaker HQ was included in the balance sheet for the condensed consolidated interim report ended September 30, 2023 based on a provisional assessment. The opening balance was amended per December 31, 2023 and a revised PPA is therefore included in this report. The revised PPA includes an adjustment on goodwill of 5,850 tEUR. Goodwill is connected to the future growth expectations given the strong platform and significant synergistic opportu- nities. In order to reach the full earn-out pay ment, Playmaker HQ will have to generate >75 mUSD in accumulating rev- enues and >25 mUSD in accumulating operational earnings (EBITDA) during the first three years post acquisition . The goodwill is tax deductible. Transaction costs related to the acquisition of Playmaker HQ amounts to 347 tEUR in 2023. Transaction costs are ac- counted for in the income statements under “special items”. The acquisition was completed on July 3, 2023. If the trans- action had been completed on January 1, 2023 the group’s revenue YTD would have amounted to 330 mEUR and result after tax would have amounted to 39 mEUR. Other acquisitions 2023 On August 15, 2023 Better Collective announced the acquisition of four brands SvenskaFans.com, Hockeysverige.se, Fotbolldirekt.se and Innebandymagazinet.se by acquiring Digital Sportmedia i Norden AB from Everysport Group to further expand its position within the Swedish sports media ecosystem for a total consideration of 3.7 mEUR on a cash and debt-free basis. On September 4, 2023 Better Collective announced the acquisition of the platform Torcedores.com, by acquiring Goalmedia Technologia E Marketing Digital S.A. The acquisition strengthens Better Collectives position in the South American region through the ac quisition of leading national Brazilian sports media platform Torcedores.com. Adding the first Brazilian sports media brand to the group, Better Collective will leverage its best- in-class digital expertise in one of the world’s fastest growing markets. A goodwill of 6,614 tEUR emerged from the acquisitions as an effect of the difference between the transferred consid- eration and the fair value of acquired net assets. The goodwill is not tax deductible. Transaction costs related to the acquisition of Digital Sport Media i Norden AB and Torcedores amounts to 484 tEUR in 2023. Transaction costs are accounted for in the income statements under “special items”. The acquisitions were com- pleted on August 15, 2023 and September 4, 2023. If the transactions had been completed on January 1, 2023 the group’s revenue YTD would have amounted to 328 mEUR and result after tax would have amounted to 39 mEUR. The purchase price allocation is provisional due to uncertainties regarding measurement of acquired intangible assets. Acquired net assets at the time of acquisition tEUR Domains 6,650 Contingent liabilities - 1,902 Deferred tax liabilities - 1,308 Net assets (other) - 1,099 Total net assets 2,341 Goodwill 6,614 Total consideration 8,955 ===== SIDA 110 ===== Annual report Page 110 Notes 22. Business combinations (continued) Acquisition of Tipsbladet.dk On September 18, 2023 Better Collective announced the acquisition of Tipsbladet.dk ApS to further expand its position in Denmark for a total consideration of 6.5 mEUR on a cash and debt-free basis with closing 2 October 2023. tEUR Purchase amount 7,432 Cash and cash equivalents 0 Earn Out 1,500 Cash outflow 5,932 The transferred consideration was in cash and a earn out payable in cash. A goodwill of 3,196 tEUR emerged from the acquisition of Tipsbladet as an effect of the difference between the trans- ferred consideration and the fair value of acquired net assets. Goodwill is connected to the future growth expectations given the strong platform and significant synergistic opportunities. The earn outs are based on certain performance targets in the 12 months post-closing period. The goodwill is not tax deductible. Transaction costs related to the acquisition of Tipsbladet amounts to 42 tEUR in 2023. Transaction costs are accounted for in the income statements under “special items”. The acquisition was completed on October 2, 2023. If the transaction had been completed on January 1, 2023 the group’s revenue would have amounted to 328 mEUR and result after tax would have amounted to 39 mEUR. The purchase price allocation is provisional due to uncertainties regarding measure- ment of acquired intangible assets. Earn-out considerations Earn-out considerations are related acquisitions and is at the acquisition date recognised at a fair value. The fair value of the earn -out considerations are measured based on weighted probabilities of assessed possible pay- ments discounted to present value. Management expects that the conditions will be met. The difference between fair value and future payments of the earn -out considerations and other financial liabilities will be recognised in the profit and loss. Acquisition after the balance sheet date Acquisition of Playmaker Capital On November 6, 2023 Better Collective announced the acquisition of Playmaker Capital for a total price consideration of 176 mEUR. The consideration comprises 35 % cash and a cap of 65 % shares in Better Collective A/S. The consideration is financed partly by own cash and utilization of available facilities of 72 mEUR as well as a share consideration. The share consideration payable to Playmaker Capital shareholders, a total of 3,143,009 Better Collective shares, has been provided by Better Collective delivering 1,387,580 existing shares held as treasury shares and by issuing 1,755,429 new shares. Playmaker Capital is a leading digital sports media group that owns and operates several strong sports media brands across the Americas. The acquisition has been closed on 6 February 2024, and Playmaker Capital will be consolidated into Better Collective Group from the closing date. As per the date of publication of the annual report it has not been possible to obtain sufficient financial data to fulfill reporting requirements according to IFRS3. Therefore, the opening balance, the acquired net assets at the time of the acquisition and goodwill are not included in these financial statements. Acquired net assets at the time of acquisition tEUR Domains 4,192 Deferred tax liabilities - 917 Cash - 587 Net assets (other) 1,548 Total net assets 4,236 Goodwill 3,196 Total consideration 7,432 ===== SIDA 111 ===== Annual report Page 111 23. Related party disclosures The Group has registered the following shareholders with 5% or more equity interest: • J Søgaard Holding ApS, 19.27 %,Sankt Annæ plads 26-28, 1250 Copenhagen, Denmark • Chr. Dam Holding ApS, 19.27 %, Sankt Annæ plads 26-28, 1250 Copenhagen, Denmark Christian Kirk Rasmussen and Jesper Søgaard each hold 19.27% of the shares in Better Collective A/S, through respec- tive holding companies. The remaining shares are held by other shareholders. Leading employees The Group’s related parties with significant influence include the Group’s Board of Directors, Executive Management and Key Employees in the parent company and close family members of these persons. Related parties also include companies in which this circle of persons has significant interests. Management remuneration and warrant programs are disclosed in note 5 and 6. Transactions with related parties have been as follows: tEUR 2023 2022 Capital increase - gross 0 0 Sale of warrants 0 0 Warrants settled, net of tax 0 0 Warrants Board member (included in board remuneration) 0 0 ===== SIDA 112 ===== Annual report Page 112 Notes 24. Group information –subsidiary information The consolidated financial statements of the Group as of December 31, 2023 include the following subsidiaries: Name * Ownership Country City Currency Capital local currency Better Collective D.o.o. 100% Serbia Niš tRSD 620 Better Collective SAS 100% France Paris tEUR 100 Hebiva Beteiligungen GmbH 100% Austria Vienna tEUR 40 Better Collective GmbH** 100% Austria Vienna tEUR 19 Bola Webinformation GmbH 100% Austria Vienna tEUR 35 Better Collective Greece P.C. 100% Greece Thessaloniki tEUR 10 Kapa Media Services Ltd. 100% Malta Naxxar EUR 240 Better Collective Sweden AB 100% Sweden Stockholm tSEK 50 Digital Sportmedia i Norden AB 100% Sweden Stockholm tSEK 25 Better Collective Poland SP Z o o 100% Poland Krakow tPLN 5 Moar Performance Ltd *** 100% United Kingdom London GBP 1 Better Collective Romania SRL 100% Romania Bucharest tRON 50 Better Collective USA Inc*** 100% USA New York tUSD 2,239 Skycon Ltd 100% United Kingdom London tGBP 1 Atemi Ltd 100% Malta St Julians tGBP 1 Better Collective UK Services Ltd (Former: Your Media Ltd) 100% United Kingdom Tunbridge Wells GBP 2 Mindway ApS 90% Denmark Aarhus tDKK 65 Better Collective Netherlands B.V. 100% Netherlands Amsterdam EUR 1 Better Collective Portugal, Unipessoal Lda 100% Portugal Lisbon EUR 1 Better Collective Canada Inc 100% Canada Vancouver tUSD 0 Austin Holding Co 100% Toronto Canada tUSD 0 Better Collective Brasil Ltda 100% Brasil Rio de Janeiro tBRL 625 Goalmedia Tecnologia E Marketing Digital S.A. 100% Brasil São Paulo tBRL 10,122 Tipsbladet ApS 100% Denmark Copenhagen tDKK 80 Better Collective Operational Services India Private Limited 100% India Mumbai tINR 100 * HLTV ApS has been merged with the parent company as the continuing company and has thus been removed from the list. ** Better Collective GmbH is 100% owned by Hebiva Beteilgungen GmbH. *** Subsidiaries are 100% owned by Moar Performance Ltd **** Action Network has been merged with Better Collective USA Inc. as the continuing company as of 31.12.2023 ===== SIDA 113 ===== Annual report Page 113 Notes 24. Group information –subsidiary information (continued) The consolidated financial statements of the Group as of December 31, 2022 include the following subsidiaries: Name Ownership Country City Currency Local currency Better Collective GmbH* 100% Austria Vienna tEUR 36 Hebiva Beteiligungen GmbH 100% Austria Vienna tEUR 40 Better Collective SAS 100% France Paris tEUR 100 Better Collective D.o.o. 100% Serbia Niš tRSD 620 Bola Webinformation GmbH 100% Austria Vienna tEUR 35 Better Collective Greece P.C. 100% Greece Thessaloniki tEUR 10 Kapa Media Services Ltd. 100% Malta Naxxar EUR 1,200 Better Collective Sweden AB 100% Sweden Stockholm tSEK 50 Better Colllective UK Ltd 100% United Kingdom Stoke on Trent tGBP 1 Better Collective Poland SP Z o o 100% Poland Krakow tPLN 5 MOAR Performance Ltd 100% United Kingdom London tGBP 1 Better Collective Romania SRL 100% Romania Bucharest tRON 50 Better Collective USA Inc 100% USA New York tUSD 1 Better Collective Tennessee LLC** 100% USA Tennessee tUSD 2,239 Atemi Ltd 100% Malta St Julians tGBP 1 Hot Media Corp**** 100% British Virgin Islands Tortola tGBP 0 Force Media Inc**** 100% British Virgin Islands Tortola tGBP 0 Pedia Publications Ltd**** 100% Guernsey St. Peter Port tGBP 67 5 Star Traffic Ltd**** 100% British Virgin Islands Tortola tGBP 0 FTD LABS Ltd**** 100% Guernsey St. Peter Port tGBP 0 Better Collect UK Services Ltd (Former: Your Media Ltd)**** 100% United Kingdom Tunbridge Wells tGBP 0 HLTV ApS 100% Denmark Aarhus tDKK 50 Mindway ApS 100% Denmark Aarhus tDKK 65 Action Network Inc.*** 100% USA New York tUSD 0 Better Collective Netherlands B.V. 100% Netherlands Amsterdam tEUR 1 Better Collective Portugal, Unipessoal Lda 100% Portugal Lisbon tEUR 0 Better Collective Brasil LTDA 100% Brasil Rio de Janeiro tBRL 10 * Better Collective GmbH is 100% owned by Hebiva Beteiligungen GmbH. ** Better Collective Tennessee LLC was merged in to Better Collective US Inc. On July 1st, 2022 ***Action Network Inc. are 100% owned by Better Collective USA Inc. **** Subsidiaries are 100% owned by Atemi Ltd. ===== SIDA 114 ===== Annual report Page 114 Notes 25. Other contingent liabilities Other contingent liabilities There are no other contingent liabilities in 2023. 26. Events after the reporting date The transaction of Playmaker Capital closed on February 6, 2024, following which Playmaker Capital has been consoli- dated into the Better Collective group. Better Collective raised 10% or 1,081.9 mDKK in an accelerated book building process to prepare for future M&A. The demand in the placing was substantial and with BLS Capital Fondsmæglerselskab A/S as an anchor taking 50% of the deal making it possible to place all shares without a discount to the market price. Better Collective announced a new major shareholder as BLS Capital Fondsmæglerselskab A/S now has 11.7% of the voting rights. Also, Better Collective is now included in the Nasdaq Stockholm and Nasdaq Copenhagen Large Cap Index with compa- nies that have a market cap higher than 1 bnEUR. ===== SIDA 115 ===== Annual report Page 115 Statement of profit and loss 116 Statement of comprehensive income 116 Balance sheet 117 Statement of changes in equity 118 Cash flow statement 119 Annual report Page 115 Parent Company Financial Statements ===== SIDA 116 ===== Annual report Page 116 Statement of profit and loss Note tEUR 2023 2022 2 Revenue 98,513 65,282 Other operating income 12,516 14,797 Direct costs related to revenue 23,071 14,292 3, 4 Staff costs 40,796 25,061 12 Depreciation 1,438 540 5 Other external expenses 18,632 17,248 Operating profit before amortization (EBITA) and special items 27,091 22,939 10 Amortization 9,908 3,875 Operating profit (EBIT) before special items 17,182 19,064 6 Special items, net 312 - 1,168 Operating profit 17,494 17,896 7 Financial income 70,010 72,388 8 Financial expenses 45,054 35,057 Profit before tax 42,450 55,227 9 Tax on profit for the period 3,181 8,279 Profit for the period 39,269 46,949 Statement of comprehensive income Note tEUR 2023 2022 Profit for the period 39,269 46,949 Other comprehensive income Other comprehensive income that may be reclassified to profit or loss in subsequent periods: Fair value adjustment of hedges for the year - 483 0 Currency translation to presentation currency - 910 22 Currency translation of non-current intercompany loans 0 0 9 Income tax 0 0 Net other comprehensive income/loss - 1,393 22 Total comprehensive income/(loss) for the period, net of tax 37,877 46,970 ===== SIDA 117 ===== Annual report Page 117 Balance sheet Note tEUR 2023 2022 Assets Non-current assets 10, 11 Intangible assets Goodwill 17,812 0 Domains and websites 167,831 144,374 Accounts and other intangible assets 50,418 13,287 Total intangible assets 236,061 157,661 12 Property, plant and equipment Right of use assets 7,469 334 Fixtures and fittings, other plant and equipment 2,494 410 Total property, plant and equipment 9,962 744 Financial assets 13 Investments in subsidiaries 234,330 190,448 14 Receivables from subsidiaries 282,016 273,515 Deposits 940 174 Total financial assets 517,285 464,137 Total non-current assets 763,308 622,542 Current assets 16 Trade and other receivables 15,735 17,163 19 Receivables from subsidiaries 13,153 30,229 Tax receivable 1,479 5,913 Prepayments 2,453 2,519 Other current financial assets 6,804 0 19 Cash 17,825 8,705 Total current assets 57,450 64,529 Total assets 820,758 687,071 Note tEUR 2023 2022 Equity and liabilities 15 Equity Share Capital 554 551 Share Premium 274,580 272,550 Currency Translation Reserve - 336 574 Hedging reserves - 483 0 Treasury shares - 21,057 - 7,669 Retained Earnings 189,953 145,047 Total equity 443,211 411,054 Non-current Liabilities 19 Debt to credit institutions 248,657 201,708 18 Lease liabilities 6,024 16 9 Deferred tax liabilities 13,832 6,141 19 Other non-current financial liabilities 25,261 19,543 Total non-current liabilities 293,774 227,408 Current Liabilities Prepayments received from customers and deferred revenue 312 1,583 17 Trade and other payables 11,495 5,719 19 Payables to subsidiaries 11,993 20,822 Tax payable 196 30 19 Other current financial liabilities 58,295 19,045 Debt to credit institutions 0 1,055 18 Lease liabilities 1,483 356 Total current liabilities 83,773 48,609 Total liabilities 377,547 276,017 Total equity and liabilities 820,758 687,071 ===== SIDA 118 ===== Annual report Page 118 Statement of changes in equity tEUR Share capital Share premium Currency translation reserve Hedging reserves Treasury shares Retained earnings Total equity As of January 1, 2023 551 272,550 574 0 - 7,669 145,047 411,054 Result for the period 0 0 0 0 0 39,269 39,269 Fair value adjustment of hedges 0 0 0 - 483 0 0 - 483 Currency translation to presentation currency 0 0 - 910 0 0 0 - 910 Tax on other comprehensive income 0 0 0 0 0 0 0 Total other comprehensive income 0 0 - 910 - 483 0 0 - 1,393 Total comprehensive income for the year 0 0 - 910 - 483 0 39,269 37,877 Transactions with owners Capital Increase 3 2,030 0 0 0 3,154 5,187 Acquisition of treasury shares 0 0 0 0 - 13,375 0 - 13,375 Disposal of treasury shares 0 0 0 0 0 0 0 Share based payments 0 0 0 0 0 2,495 2,495 Transaction cost 0 0 0 0 - 13 - 12 - 26 Total transactions with owners 3 2,030 0 0 - 13,389 5,636 - 5,720 At December 31, 2023 554 274,580 - 336 - 483 - 21,057 189,953 443,211 During the period no dividend was paid. tEUR Share capital Share premium Currency translation reserve Hedging reserves Treasury shares Retained earnings Total equity As of January 1, 2022 546 267,873 552 0 - 8,074 94,223 355,121 Result for the period 0 0 0 0 0 46,949 46,949 Fair value adjustment of hedges 0 0 0 0 0 0 0 Currency translation to presentation currency 0 0 22 0 0 0 22 Tax on other comprehensive income 0 0 0 0 0 0 0 Total other comprehensive income 0 0 22 0 0 0 22 Total comprehensive income for the year 0 0 22 0 0 46,949 46,970 Transactions with owners Capital Increase 5 4,677 0 0 0 0 4,683 Acquisition of treasury shares 0 0 0 0 - 14,250 0 - 14,250 Disposal of treasury shares 0 0 0 0 14,656 842 15,498 Share based payments 0 0 0 0 0 3,061 3,061 Transaction cost 0 0 0 0 0 - 28 - 28 Total transactions with owners 5 4,677 0 0 406 3,875 8,963 At December 31, 2022 551 272,550 574 0 - 7,669 145,047 411,054 During the period no dividend was paid. ===== SIDA 119 ===== Annual report Page 119 Statement of cash flows parent Note tEUR 2023 2022 Profit before tax 42,450 55,227 Adjustment for finance items - 24,956 - 37,331 Adjustment for special items - 312 1,168 Operating Profit for the period before special items 17,182 19,064 Depreciation and amortization 11,346 4,415 Other adjustments of non-cash operating items 1,380 2,139 Cash flow from operations before changes in working capital and special items 29,908 25,619 20 Change in working capital 14,246 2,253 Cash flow from operations before special items 44,154 27,871 Special items, cash flow - 4,744 - 1,227 Cash flow from operations 39,410 26,644 Dividend received 51,698 20,088 Other Financial income, received 2,471 2,566 Financial expenses, paid - 10,712 - 5,296 Cash flow from ordinary activities before tax 82,867 44,002 Income tax paid 4,398 - 11,011 Cash flow from operating activities 87,265 32,992 10 Acquisition of businesses - 54,203 - 5,252 10 Acquisition of intangible asset - 24,928 - 92,636 12 Acquisition of property, plant and equipment - 2,527 - 322 12 Sale of property, plant and equipment 0 0 Non-current loans to subsidiaries - 13,000 - 200 Acquisition of other financial assets - 14,930 0 Change in other non-current assets - 766 - 4 Cash flow from investing activities - 110,354 - 98,415 Note tEUR 2023 2022 19 Repayment of borrowings - 1,055 - 215,993 19 Proceeds from borrowings 45,490 296,665 Lease liabilities - 1,273 - 336 Other non-current liabilities 460 0 Capital increase 2,033 618 Treasury Shares - 13,375 - 14,250 Transaction cost - 26 - 28 Cash flow from financing activities 32,254 66,675 Cash flows for the period 9,165 1,252 Cash and cash equivalents at beginning 8,705 7,452 Foreign currency translation of cash and cash equivalents - 45 1 Cash and cash equivalents period end 17,825 8,705 Cash and cash equivalents period end Cash 17,825 8,705 Cash and cash equivalents period end 17,825 8,705 ===== SIDA 120 ===== Annual report Page 120 1. Accounting policies 121 2. Revenue specification 121 3. Staff costs 122 4. Share-based payments 122 5. Fees paid to auditors appointed at the annual general meeting 122 6. Special items 123 7. Finance income 123 8. Finance costs 123 9. Income tax 124 10. Intangible assets 125 11. Intangible assets with indefinite life 126 12. Property, plant and equipment 127 13. Investments in subsidiaries 128 14. Non-current financial assets 129 15. Issued capital and reserves 130 16. Trade and other receivables 130 17. Trade and other payables 130 18. Leasing 130 19. Financial risk management objectives and policies 131 20. Change in working capital 135 21. Other contingent liabilities 135 22. Related party disclosures 135 Notes to the parent financial statement ===== SIDA 121 ===== Annual report Page 121 Notes 1. Accounting policies Reference is made to notes to the consolidated financial statements. For the treatment of subsidiaries reference is made to note 7. 2. Revenue specification In accordance with IFRS 15 disclosure requirements, total revenue is split on Revenue Share, Cost per Acquisition (CPA), Subscription Revenue and Other, as follows: tEUR 2023 2022 Revenue category Recurring revenue (Revenue share, Subscription, CPM) 78,907 57,264 CPA, Fixed Fees 19,329 8,018 Other 276 0 Total revenue 98,513 65,282 %-split Recurring revenue 80 88 CPA, Fixed Fees 20 12 Other 0 0 Total 100 100 tEUR 2023 2022 Revenue type Revenue Share 66,709 48,152 CPA 737 2,490 Subscription 1,014 572 Other 30,051 14,068 Total revenue 98,513 65,282 %-split Revenue Share 68 74 CPA 1 4 Subscription 1 1 Other 30 21 Total 100 100 The parent company has earned 46.0 mEUR in revenues from one major customer, which represents 47% of the parent company’s revenue (2022: 57%). The revenue is related to all operating segments. Accounting policies Reference is made to note 4 of the consolidation financial statement. Other operating income: Other operating income in the Parent Company consists of management fees for subsidiaries and rent income from subsidiaries and external. Other operating income is recognized at the time of delivery of the services. ===== SIDA 122 ===== Annual report Page 122 Notes 3. Staff costs tEUR 2023 2022 Wages and salaries 17,620 13,924 Pensions, defined contribution 1,265 1,116 Other social security costs 242 163 Share-based payments 1,380 1,935 Other staff costs 92 235 Intercompany personnel costs 20,197 7,688 Total staff cost 40,796 25,061 Average number of full-time employees 160 134 *Average number of full-time employees does not include recharged personal cost. For remuneration of Key employees , Executive Management and the Board of Directors, reference is made to the disclosures in note 5 of the consolidated financial statements. 4. Share-based payments Better Collective A/S has issued share options to key employees and members of the Executive Board of the Com- pany. Refer to note 6 to the consolidated financial statements for a list of current incentive share option schemes and a description of the assumptions used for the valuation of the share options granted in 2023. Total costs recognized in 2023 amounted 1,380 tEUR (2022: 1,935 tEUR) The volume-weighted average share price for options exercised in the financial year was 20.7 EUR per share at the date of exercise. Notes 5. Fees paid to auditors appointed at the annual general meeting Non-audit services provided by EY amounted 76 tEUR in 2023, relating to advisory services in relation to assurance and advisory in relation to ESG, various tax advisory services, due diligence services and other advisory services. Non- audit services provided by EY did not exceed 70% of the audit fees in accordance with EU audit legislation. tEUR 2023 2022 Fee related to statutory audit 360 265 Fees for tax advisory services 0 0 Assurance engagements 72 25 Other assistance 76 0 Total audit fees 508 290 ===== SIDA 123 ===== Annual report Page 123 Notes 6. Special items Significant income and expenses, which Better Collective consider not part of ordinary business are presented in the Income statement in a separate line item labelled ‘Special items’. The impact of special items is specified as follows: tEUR 2023 2022 Operating profit 17,494 17,896 Special Items related to: Special items related to dual listing - 1,129 0 Special items related to M&A - 8,484 - 1,227 Variable payments regarding acquisitions - cost 0 59 Variable payments regarding acquisitions - income 9,924 0 Special items, total 312 - 1,168 Operating profit (EBIT) before special items 17,182 19,064 Amortization and impairment 9,908 3,875 Operating profit before amortization and special items (EBITA before special items) 27,091 22,939 Depreciation 1,438 540 Operating profit before depreciation, amortization, and special items (EBITDA before special items) 28,529 23,479 Notes 7. Finance income tEUR 2023 2022 Exchange gains 10,000 46,394 Interest Income 61 0 Interest income, group entities 5,841 5,905 Dividend income 51,698 20,088 Other financial income 2,410 0 Total finance income 70,010 72,388 8. Finance costs tEUR 2023 2022 Exchange losses 20,804 30,131 Interest expenses 12,041 3,712 Interest - right of use assets (Leasing) 159 21 Interest expenses, group entities 374 254 Fair value adjustment 8,126 0 Other financial costs 3,550 939 Total finance costs 45,054 35,057 ===== SIDA 124 ===== Annual report Page 124 Notes 9. Income tax Total tax for the year is specified as follows: Income tax of profit from the year is specified as follows: tEUR 2023 2022 Deferred tax 2,993 4,154 Current tax 205 4,181 Adjustment from prior years - 17 - 56 Total 3,181 8,279 Tax on the profit for the year can be explained as follows: tEUR 2023 2022 Specification for the period: Calculated 22% tax of the result before tax 9,339 12,150 Tax effect of: Non-taxable income - 11,785 - 4,419 Non-deductible costs 3,634 604 Unrecognized tax losses carried forward 2,010 0 Adjustment from prior years - 17 - 56 Total 3,181 8,279 Effective tax rate 7.5% 15.0% tEUR 2023 2022 Deferred tax liabilities Deferred tax liabilities January 1* 10,672 1,996 Adjustments of deferred tax in profit and loss 2,993 4,154 Exchange rate adjustment 167 - 9 Deferred tax liabilities December 31 13,832 6,141 Deferred tax is recognized in the balance sheet as: Deferred tax asset 0 0 Deferred tax liability 13,832 6,141 Deferred tax liabilities December 31 13,832 6,141 Deferred tax is related to: Intangible assets 14,536 6,209 Property, plant and equipment - 2 - 68 Liabilities 2,056 0 Tax loss carry forward - 2,758 0 Deferred tax liabilities December 31 13,832 6,141 *Deferred tax liability at January 1 2023 was adjusted by 4,5 tEUR due to the HLTV merger in 2023. tEUR 2023 2022 Tax for the period 3,181 8,279 Tax on other comprehensive income 0 0 Total 3,181 8,279 ===== SIDA 125 ===== Annual report Page 125 Notes 10. Intangible assets tEUR Goodwill** Domains and websites*** Accounts and other intangible assets* Total Cost or valuation As of January 1, 2023 17,812 164,966 25,086 207,863 Additions 0 3,183 52,022 55,205 Disposals 0 0 - 4,302 - 4,302 Currency Translation 0 - 318 - 52 - 369 At December 31, 2023 17,812 167,831 72,754 258,397 Amortization and impairment As of January 1, 2023 0 0 11,798 11,798 Amortization for the period 0 0 10,558 10,558 Amortization on disposed assets 0 0 - 650 - 650 Currency translation 0 0 630 630 At December 31, 2023 0 0 22,336 22,336 Net book value at December 31, 2023 17,812 167,831 50,418 236,061 *Accounts and other intangible assets consist of accounts amounted to (3,927 tEUR), Media Partnerships (45,994 tEUR) and software and others amounted to 497 tEUR. **Goodwill cost at the January 1, 2023 was adjusted with 17,812 tEUR due to HLTV merger in 2023 *** Domains and websites l cost at the January 1, 2023 was adjusted with 20,592 tEUR due to HLTV merger in 2023 tEUR Goodwill Domains and websites Accounts and other intangible assets* Total Cost or valuation As of January 1, 2022 0 26,189 11,179 37,368 Additions 0 118,185 13,907 132,092 Disposals 0 0 0 0 Currency Translation 0 - 1 0 - 1 At December 31, 2022 0 144,374 25,086 169,460 Amortization and impairment As of January 1, 2022 0 0 7,922 7,922 Amortization for the period 0 0 3,875 3,875 Amortization on disposed assets 0 0 0 0 Currency translation 0 0 2 2 At December 31, 2022 0 0 11,798 11,798 Net book value at December 31, 2022 0 144,374 13,287 157,662 *Accounts and other intangible assets consist of accounts (5,550 tEUR), Media Partnerships (7,174 tEUR), and software and others (563 tEUR). ===== SIDA 126 ===== Annual report Page 126 Notes 11. Intangible assets with indefinite life Intangible assets consist of goodwill and domains and websites. The parent company’s domains and websites arise from asset acquisitions. Goodwill arises from the merger of HLTV in 2023. Goodwill, domains, and websites are not subject to amortization, but are reviewed annually for impairment, or more frequently if there are any indicators of impairment noted during the year. Cash-generating units A cash-generating unit represents the smallest identifiable group of assets that together have cash inflows that are largely independent of the cash inflows from other assets. Previously, management concluded that the Parent Com- pany comprised a single cash-generating unit. However, following the merger between Better Collective and HLTV in 2023, management has determined that HLTV constitutes an independent CGU. As a result, the Management has de- cided to include a separate CGU for HLTV. Performance and cash flows from goodwill, domains and websites owned by the individual cash generating units are allocated and form the basis for impairment. Carrying amount of goodwill and Domains and Websites for the CGUs : Recoverable amount When testing for impairment, the Group estimates a recoverable amount for goodwill and for domain names and web- sites. The recoverable amount is the higher of the asset or cash-generating unit’s fair value less costs of disposal and its value in use. The recoverable amount is normally determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. The recoverable number of domains and websites has been determined on the level of the cash-generating units, as explained above. Impairment test: For all CGUs US, HLTV, Paid Media and the rest of Better Collective, the Group has performed an impairment test on goodwill and domain names and websites as of December 31, 2023, on a value-in-use basis. Key estimates in the impair- ment test are growth in revenue, gross profits, discount rate and growth expectations in the terminal period. These are based on current and future development in the four CGUs and on historical data, including expected long-term market growths. Data is based on both internal and external data sources. Management has based the value in use by estimating the present value of future cash flows from a three-year forecast approved by the Board of Directors corresponding to the Group’s long- term forecast for 2024-2026. The forecast indi- cates an average annual gross profit growth of 23% during the forecast period, predicated on market development assumptions and communicated long-term target. Beyond the approved forecast, EBITDA growth, cash conversion and tax-rates have been projected with a time horizon of 7 years until 2033. From 2027 onward, the average gross profit growth rate is estimated to decline. In 2027, the average growth rate is projected to be 15% and the decline continues, reaching 3% by 2033, stabilizing thereafter at a theoretical steady state level in the terminal period. Based on expected 2033 EBITDA and cash flow, management has applied a terminal value rate of 2%. The cash flows assume a discount factor of 12% (pre- tax discount rate 15%) based on the Group’s weighted average cost of capital (WACC) in all years 2024-2033, with individual tax rates per country (22-25%). As at December 31, 2022 and December 31, 2023 the Board of Directors have evaluated goodwill, domains and web - sites for impairment. The results of the impairment tests for goodwill and domains and websites showed that the re - coverable amount exceeded the carrying value and that there was no impairment loss to be recognized. The Board of Directors have approved the inputs to the impairment testing and are satisfied that the judgements made are appropri- ate. 2023 tEUR HLTV Rest of BC Total Goodwill 17,812 0 17,812 Domains and Websites 20,551 147,280 167,831 2022 tEUR HLTV Rest of BC Total Goodwill 0 0 0 Domains and Websites 0 144,374 144,374 ===== SIDA 127 ===== Annual report Page 127 Notes 12. Property, plant and equipment tEUR Right of use assets Fixtures and fittings, other plant and equipment Total Cost or valuation At January 1, 2023 1,553 1,292 2,845 Additions 8,299 2,527 10,826 Disposals - 1,585 0 - 1,585 Currency Translation 156 - 3 153 At December 31, 2023 8,422 3,817 12,239 Depreciation and impairment At January 1, 2023 1,219 882 2,101 Depreciation for the period 1,040 398 1,438 Depreciation on disposed assets - 1,387 0 - 1,387 Currency translation 82 43 125 At December 31, 2023 954 1,323 2,277 Net book value at December 31, 2023 7,469 2,494 9,962 tEUR Right of use assets Fixtures and fittings, other plant and equipment Total Cost or valuation At January 1, 2022 1,502 970 2,472 Additions 50 322 373 Disposals 0 0 0 Currency Translation 0 0 0 At December 31, 2022 1,553 1,292 2,845 Depreciation and impairment At January 1, 2022 901 660 1,561 Depreciation for the period 318 222 540 Depreciation on disposed assets 0 0 0 Currency translation 0 0 0 At December 31, 2022 1,219 882 2,101 Net book value at December 31, 2022 334 410 744 ===== SIDA 128 ===== Annual report Page 128 Notes 13. Investments in subsidiaries Name* Domicile Interest % Equity tEUR Profit/loss tEUR Equity tEUR Profit/loss tEUR Subsidiaries Better Collective D.o.o. Serbia 100% 1,637 615 1,017 92 Better Collective SAS France 100% 13,007 15,381 14,116 12,868 Hebiva Beteiligungen GmbH Austria 100% 1,140 1,058 1,530 1,458 Better Collective GmbH** Austria 100% 1,108 1,066 35 1,466 Bola Webinformation GmbH Austria 100% 6,226 6,182 6,742 6,707 Better Collective Greece P.C. Greece 100% 2,289 923 1,344 292 Kapa Media Services Ltd. Malta 100% 70 63 387 57 Better Collective Sweden AB Sweden 100% 3,102 2,079 3,198 2,069 Digital Sportmedia i Norden AB Sweden 100% 181 113 Better Collective Poland SP Z o o Poland 100% 708 231 413 158 Moar Performance Ltd United Kingdom 100% 7,082 8,218 2,261 2,151 Better Collective Romania SRL Romania 100% 104 26 78 - 11 Better Collective USA Inc*** USA 100% 8,843 6,408 - 18,642 - 5,888 Skycon Ltd United Kingdom 100% 772 7,092 0 0 Atemi Ltd Malta 100% 932 279 73 2,513 Better Collective UK Services Ltd (Former: Your Media Ltd)**** United Kingdom 100% 879 462 196 354 Mindway ApS Denmark 90% - 1,375 - 357 - 1,021 - 90 Better Collective Netherlands B.V. Netherlands 100% - 42 44 - 97 - 136 Better Collective Portugal, Unipessoal Lda Portugal 100% 141 105 36 36 Better Collective Canada Inc Canada 100% 115 48 57 53 Austin Holding Co Canada 100% - 23 0 - 23 - 23 Better Collective Brasil Ltda Brazil 100% 503 399 - 4 - 4 Goalmedia Tecnologia E Marketing Digital S.A. Brazil 100% - 855 - 381 0 0 Tipsbladet ApS Denmark 100% 933 - 138 0 0 Better Collective Operational Services India Private Limited India 100% - 1,317 - 1,353 0 0 * HLTV ApS has been merged with the parent company as the continuing company and has thus been removed from the list. ** Better Collective GmbH is 100% owned by Hebiva Beteilgungen GmbH. *** Subsidiaries are 100% owned by Moar Performance Ltd **** Action Network has been merged with Better Collective USA Inc. as the continuing company as of 31.12.2023 ===== SIDA 129 ===== Annual report Page 129 Notes 13. Investments in subsidiaries (continued) tEUR 2023 2022 Subsidiaries Cost at January 1** 156,715 189,318 Additions* 78,034 1,130 Exchange rate to reporting currency - 419 0 Cost at December 31 234,330 190,448 Value adjustment at January 1 0 0 Impairment 0 0 Reversal of impairment 0 0 Value adjustment at December 31 0 0 Carrying amount at December 31 234,330 190,448 Reference is made to note 22 of the consolidated financial statements for acquisition of businesses. Investments in subsidiaries have been assessed for impairment in 2023 and 2022 and did not lead to any impairment in neither 2023 nor 2022. Reference is made to note 13 of the consolidated financial statement. 14. Non-current financial assets tEUR Receivables from Subsidiar- ies Other non-current financial assets Total Cost at January 1, 2023 273,515 0 273,515 Additions 18,024 0 18,024 Disposals 0 0 0 Exchange rate adjustment - 9,523 0 - 9,523 Cost at December 31, 2023 282,016 0 282,016 Value adjustment at 1 January, 2023 0 0 0 Impairment 0 0 0 Value adjustment at 31 December, 2023 0 0 0 Carrying amount at 31 December, 2023 282,016 0 282,016 Cost at January 1, 2022 245,349 0 245,349 Additions 200 0 200 Disposals 0 0 0 Exchange rate adjustment 27,966 0 27,966 Cost at December 31, 2022 273,515 0 273,515 Value adjustment at 1 January, 2022 0 0 0 Impairment 0 0 0 Value adjustment at 31 December, 2022 0 0 0 Carrying amount at 31 December, 2022 273,515 0 273,515 Accounting policies Investments in subsidiaries Investments in subsidiaries and other investments are measured at cost. If the cost exceeds the recoverable amount, the carrying amount is reduced to such lower value. ===== SIDA 130 ===== Annual report Page 130 Notes 15. Issued capital and reserves Reference is made to the disclosures in note 16 of the consolidated financial statements. 16. Trade and other receivables tEUR 2023 2022 Trade receivables 12,571 10,266 Accrued revenue 2,267 6,827 Other receivables 898 71 Total receivables 15,735 17,163 17. Trade and other payables tEUR 2023 2022 Trade Payables 3,966 593 Other payables 7,529 5,125 Total payables 11,495 5,719 18. Leasing Right-of-use assets tEUR Buildings Cars Total Balance at January 1, 2023 301 33 334 Additions 8,299 0 8,299 Disposals - 1,534 - 50 - 1,585 Modifications 34 0 34 Exchange rate adjustment 39 0 39 Depreciation - 1,037 - 3 - 1,040 Depreciation on disposed assets 1,367 20 1,387 Balance at December 31, 2023 7,469 0 7,469 Balance at January 1, 2022 601 0 601 Additions 0 50 50 Disposals 0 0 0 Modifications 0 0 0 Exchange rate adjustment 0 0 0 Depreciation - 300 - 17 - 317 Depreciation on disposed assets 0 0 0 Balance at December 31, 2022 301 33 334 Lease liabilities tEUR 2023 2022 Maturity analysis - contractual undiscounted cash flows Less than one year 1,758 363 One to five years 6,428 16 More than five years 0 0 Total undiscounted cash flows 8,186 379 Total lease liabilities 7,507 372 Current 1,483 356 Non-current 6,024 16 The total cash outflow for leases in 2023 was 1.276 tEUR (2022: 336 tEUR). ===== SIDA 131 ===== Annual report Page 131 Notes 18. Leasing (continued) Amounts recognized in the consolidated income statement tEUR 2023 2022 Interest on lease liabilities 159 21 Expenses relating to short- term lease 0 0 Expenses relating to lease of low value assets 43 0 19. Financial risk management objectives and policies The parent company’s activities expose it to a variety of financial risks: market risk (including foreign currency ex- change risk and interest rate risk), credit risk, and liquidity risk. The parent company has established principles for overall risk management, which seek to minimize potential adverse effects on the parent company’s performance. Market Risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. For the parent company, market risk comprises foreign currency risk and interest rate risk. Foreign currency risk Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The parent company´s exposure to the risk of changes in foreign exchange rates relates primarily to the parent company’s international operating activities. The parent company’s revenues are mainly de- nominated in DKK and EUR, with limited revenues in GBP, USD, and PLN. The majority of the parent company’s ex- penses are employee costs, which are denominated in the Group entities’ functional currency, DKK together with ex- penses. Expenses have a pattern there is in line with the revenue. The expenses are mainly in DKK, EUR and limited GBP, USD, and PLN. The DKK rate is fixed to the EUR. Since revenues in other foreign currencies than DKK and EUR (GBP, USD, and PLN) are limited and expenses in GBP, USD, and PLN reduces the exposure, the parent company is not overly exposed to foreign currency risk for the ongoing operations. The parent company has provided long-term intercompany loans in USD to Better Collective US, Inc. to fund the acqui- sitions in the US. The unrealized exchange rate gains/losses are recorded in the profit and loss in the parent company. A strengthening of the USD vs. EUR of 10% will have a positive impact on the parent company of 28 mEUR, whereas a weakening of the USD vs. EUR of 10% will have a negative impact of 28 mEUR on the parent company. Beyond the impact due to loans mentioned above, the historic exposure to currency fluctuations has not had a mate- rial impact on the parent company’s financial condition or results of operations. Accordingly, Management deems that a further sensitivity analysis showing how profit or pre-tax equity would have been impacted by changes in these for- eign exchange rates is not necessary. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The parent company’s exposure to interest rate risk arises mainly from club financing signed in October 2022 and in august 2023 extended by 3 years to October 2026. Interest rate risk arising from depos- its held are short-term and non-material. With ~246.8 mEUR drawn on the facility as of December 2023, an increase in the interest of 1 %-point will drive additional 2 mEUR in finance costs. However, management expects to re-pay the credit facility in the short to medium term, as the parent company is generating positive cash flows, and therefore ex- posure to interest rate risk is considered minimal. The parent company regularly monitors its interest rate risk and considers it to be insignificant, therefore an interest rate sensitivity analysis is not deemed necessary. Credit risk As per January 1, 2018 the parent company implemented IFRS 9 using the simplified expected credit loss model. The model implies that the expected loss over the lifetime of the asset is recognized in the profit and loss immediately and is monitored on an ongoing basis until realization. The parent company has very limited overdue trade receivables and historically there has been minimal losses on trade receivables and the subsidiaries have a high liquidity ratio. The in- puts to the expected credit loss model reflects this. As per December 31, 2023 the parent company’s impairment for expected loss is included in the trade receivables (ref note 15). ===== SIDA 132 ===== Annual report Page 132 Notes 19. Financial risk management objectives and policies (cont’d) Expected credit loss on receivables from trade and subsidiaries can be specified as follows: tEUR Expected Loss Rate Gross Receivable Expected loss Net receivable 2023 Not Due 0.0% 9,326 1 9,325 Less than 30 days 0.3% 3,770 9 3,761 Between 31 and 60 days 0.7% 478 3 475 Between 61 and 90 days 2.5% 268 7 261 More than 91 days 25.0% 1,753 438 1,315 Total 2.9% 15,596 458 15,137 Receivables from subsidiaries 0% 295,169 0 295,169 Limited losses were recognized during 2023 and the weighted credit loss has slightly increased compared to 2022. tEUR Expected Loss Rate Gross Receivable Expected loss Net receivable 2022 Not Due 0.0% 10,875 0 10,875 Less than 30 days 0.2% 4,067 10 4,057 Between 31 and 60 days 0.7% 1,593 11 1,582 Between 61 and 90 days 2.5% 105 3 103 More than 91 days 25.0% 1,036 259 777 Total 1.6% 17,676 283 17,393 Receivables from subsidiaries 0% 303,744 0 303,744 Liquidity risk The parent company is exposed to liquidity risk in relation to meeting future obligations associated with its financial liabilities, which mainly include trade payables, other payables and the credit facility. The parent company ensures ad- equate liquidity through the management of cash flow forecasts and close monitoring of cash inflows and outflows. ===== SIDA 133 ===== Annual report Page 133 Notes 19. Financial risk management objectives and policies (cont’d) The following table summarizes the maturities of the parent company’s financial obligations. Contractual cash flows: Carrying amount Fair Value Total < 1 year 2 – 5 years > 5 years 2023 Non-derivative financial instruments: Financial liabilities measured at fair value through profit and loss Earn-out consideration 34,184 34,184 34,184 33,951 233 0 Other financial liabilities measured at fair value 46,848 46,848 46,848 22,772 24,076 0 Financial liabilities measured at amortized costs Lease liabilities 7,507 7,507 8,186 1,758 6,428 0 Trade and other payables 11,495 11,495 11,495 11,495 0 0 Deferred payment on acquisitions 2,524 2,524 2,524 1,571 952 0 Payables to subsidiaries 4,055 4,055 4,055 4,055 0 0 Loans from subsidiaries 7,937 7,937 8,096 8,096 0 0 Debt to credit institutions 248,657 248,657 287,829 13,825 274,003 0 Derivative financial instruments: Financial liabilities measured at fair value Derivatives used as hedging instrument - 483 - 483 - 483 - 483 0 0 Total financial instruments 362,725 362,725 402,734 97,041 305,693 0 Assets: Non-current financial assets, subsidiaries 282,016 282,016 304,577 5,640 298,937 0 Trade and other receivables 15,735 15,735 15,735 15,735 0 0 Receivable from subsidiaries 13,153 13,153 13,153 13,153 0 0 Other current financial assets 6,804 6,804 6,804 6,804 0 0 Cash 17,825 17,825 17,825 17,825 0 0 Total financial assets 335,533 335,533 358,094 59,157 298,937 0 Contractual cash flows: Carrying amount Fair Value Total < 1 year 2 – 5 years > 5 years 2022 Non-derivative financial instruments: Financial liabilities measured at fair value through profit and loss Earn-out consideration 30,058 30,058 30,425 15,425 15,000 0 Other financial liabilities measured at fair value 8,438 8,675 3,643 5,032 0 Financial liabilities measured at amortized costs Lease liabilities 372 372 379 363 16 0 Trade and other payables 5,719 5,719 5,719 5,719 0 0 Deferred payment on acquisitions 91 91 95 5 90 0 Payables to subsidiaries 3,053 3,053 3,053 3,053 0 0 Loans from subsidiaries 17,769 17,769 18,124 18,124 0 0 Debt to credit institutions 201,708 201,708 215,021 6,656 208,364 0 Derivative financial instruments: Financial liabilities measured at fair value Derivatives used as hedging instrument 0 0 0 0 0 0 Total financial instruments 267,208 258,770 281,492 52,989 228,503 0 Assets: Non-current financial assets, subsidiaries 273,515 273,515 300,866 5,470 295,396 0 Trade and other receivables 17,163 17,163 17,163 17,163 0 0 Receivable from subsidiaries 30,229 30,229 30,229 30,229 0 0 Other current financial assets 0 0 0 0 0 0 Cash 8,705 8,705 8,705 8,705 0 0 Total financial assets 329,612 329,612 356,963 61,567 295,396 0 ===== SIDA 134 ===== Annual report Page 134 Notes 19. Financial risk management objectives and policies (continued) Fair value of Earn-out consideration, contingent consideration, and other financial liabilities All liabilities measured at fair value, or in respect of which the fair value is disclosed, are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement, see be- low: Level 1: Quoted priced in an active market for identical assets or liabilities Level 2: Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly Level 3: Inputs that are not based on observable market data (valuation techniques that use inputs that are not based on observable market data) The fair value of Earn -Out consideration, and other financial liabilities is measured based on weighted probabilities of assessed possible payments discounted to present value (level 3). Derivates are measured at fair value based on gen - erally accepted valuation methods using available observable market data (level 2). Fair value of short term liabilities and financial assets In all material aspects the financial liabilities are current/short termed. Non-current loans and overdraft facility are sub- ject to a variable interest rate. Thus, the fair value of the liabilities is considered equal to the booked value. Listed shares included under other current financial assets are measured at fair value (market price) at the balance sheet date. (Fair Value Level 1) Capital Management For the purpose of the parent company’s capital management, capital includes issued capital, share premium, and all other equity reserves attributable to the equity holders of the parent. The primary objective of the parent company’s capital management is to maximize shareholder value and to maintain an optimal capital structure. The parent com- pany manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the parent company may adjust the dividend payment to shareholders, issue new shares or return capital to shareholders. Credit facilities As per December 31, 2023, Better Collective has drawn 248.7 mEUR (2022: 201.7) out of the total committed club facility of 319 mEUR established with Nordea, Nykredit, and Citibank. In August Better Collective extended the club -financing from October 2022 with Nordea, Nykredit and Citibank by 3 years to October 2026 as well as executing the accordion option increasing available facilities with 72 mEUR, leaving the group with a total financing of 319 mEUR where afore- mentioned 248.7 mEUR has been utilized. Net debt includes current and non- current debt to financial institutions and other financial liabilities, less cash and cash equivalents. Change in liabilities arising from financing activity tEUR 2021 Cash flows Net Non cash flow changes 2022 Cash flows Net Non cash flow changes 2023 Non-current financing liabilities 121,025 79,617 1,066 201,708 44,435 2,514 248,657 Leasing and other non-current liabilities 330 0 - 314 16 461 5,547 6,024 Current financing liabilities Payables to subsidiaries 9,273 11,549 0 20,822 - 8,829 0 11,993 Debt to credit institutions 0 1,055 0 1,055 0 - 1,055 0 Leasing current liabilities 328 - 336 364 356 - 1,273 2,400 1,483 Total liabilities from financing activities 130,955 91,885 1,116 223,956 34,794 9,406 268,156 ===== SIDA 135 ===== Annual report Page 135 Notes 20. Change in working capital tEUR 2023 2022 Change in receivables 1,428 - 9,901 Changes in Intercompany balances 8,247 10,086 Prepaid expenses 66 - 1,188 Prepayment - from Customers - 1,271 1,583 Change in trades payable, other debt 5,776 1,673 Change in working capital, total 14,246 2,253 21. Other contingent liabilities Other contingent liabilities The Parent Company is jointly taxed with the Danish subsidiaries, Tipsbladet ApS and Mindway AI ApS. HLTV Aps was merged into Better Collective A/S as of 01.01.2023 and is no longer under joint taxation. As administration company, the Company has unlimited joint and several liability, together with the subsidiaries, for payment of Danish corporation taxes and withholding taxes on dividends, interest and royalties within the joint taxation group. Any subsequent cor- rections of income subject to joint taxation and withholding taxes, etc., may entail that the entities’ liability will in- crease. 22. Related party disclosures In addition to the disclosures in note 23 of the consolidated financial statements, the parent company’s related parties include subsidiaries, cf. note 24 to the consolidated financial statements and note 5 to the parent company’s financial statements. Transactions with related parties have been as follows: tEUR 2023 2022 Income Statement Other Operating income 12,516 13,701 Intercompany revenue - 7,849 - 9,175 Purchases 4,149 7,093 Interest expense 374 254 Interest income 5,841 5,905 Dividend income 51,698 20,088 Balance Sheet Long-term financial assets 282,016 273,515 Receivables from subsidiaries 13,153 30,229 Short term loans and payables to subsidiaries 11,993 20,822 Management remuneration and share option programs are disclosed in note 5 and note 6 to the consolidated financial statements. There have not been other transactions with the Board of Directors, the Executive Directors, major shareholders or other related parties during the year. ===== SIDA 136 ===== Annual report Page 136 Alternative Performance Measures and Definitions 137 Annual report Page 136 Other ===== SIDA 137 ===== Annual report Page 137 The group uses and communicate certain Alternative Performance Measures (“APM”), which are not defined under IFRS. Such are not to replace performance measures defined and under IFRS. The APM’s may not be indicative of the group’s historical operating results, nor are such m easures meant to be predictive of the group’s future results. The group be- lieves however that the APMs are useful supplemental indicators that may be used to assist in evaluating a company’s future operating performance, and its ability to service its debt . Accordingly, the APMs are disclosed to permit a more complete and comprehensive analysis of the group’s operating performance, consistently with how the group’s business performance is evaluated by the Management. The group believes that the presentation of these APMs enhances an investor’s understanding of the group’s operating performance and the group’s ability to service its debt. Accordingly, the group discloses the APM’s to permit a more complete and comprehensive analysis of its operating performan ce relative to other companies and across periods, and of the group’s ability to service its debt. However, these APM’s may be calculated differently by other companies and may not be comparable with APM’s with similarly titled measures used by other compa nies. The group’s APMs are not measurements of financial performance under IFRS and should not be considered as alternatives to other indicators of the Company’s operating performance, cash flows or any other measures of performance derived in accordance w ith IFRS. The group’s APM’s have important limitations as analytical tools, and they should not be considered in isolation or as substitutes for analysis of the group’s results of operations as reported under IFRS. Our currently applied APM’s are summarized and described below. Alternative Performance Measures Alternative Performance Measure Description SCOPE Earnings per share (EPS) Net Profit for the period / (Average number of shares - Average number of treasury shares held by the company) The group reports this APM for users to monitor de- velopment in the net profit per share. Diluted earnings per share Net profit for the period / (Average number of shares + Average number of outstanding warrants - Average number of treasury shares held by the company) The group reports this APM for users to monitor de- velopment in the net profit per share, assuming full dilution from active warrant programs. Operating profit before amortization (EBITA) Operating profit plus amortizations Better Collective reports this APM to allow monitor- ing and evaluation of the Group’s operational profit- ability. Alternative Performance Measure Description SCOPE Operating profit before amortizations margin (%) Operating profit before amortizations / reve- nue This APM supports the assessment and monitoring of the Group’s performance and profitability EBITDA before special items EBITDA adjusted for special items This APM supports the assessment and monitoring of the Group’s performance as well as profitability excluding special items that do no stem from ongo- ing operations, providing a more comparable meas- ure over time. Operating profit before amortizations and special items margin (%) Operating profit before amortizations and special items / revenue This APM supports the assessment and monitoring of the Group’s performance as well as profitability excluding special items that do no stem from ongo- ing operations, providing a more comparable meas- ure over time. Special items Items that are considered not part of ongoing business Items that are not part of ongoing business, e.g. cost related to M&A and restructuring, adjustments of earn-out payments. Net Debt / EBITDA before special items* (Interest bearing debt, minus cash and cash equivalents) / EBITDA before special items on rolling twelve months basis This ratio is used to describe the horizon for pay back of the interest-bearing debt and measures the leverage of the funding. Liquidity ratio Current Assets / Current Liabilities Measures the ability of the group to pay its current liabilities using current assets. Equity to assets ratio Equity / Total Assets Reported to show how much of the assets in the company is funded by equity Cash conversion rate before special items (Cash flow from operations before special items + Cash from CAPEX) / EBITDA before special items This APM is reported to illustrate the Group’s ability to convert profits to cash NDC New depositing customers A key figure to reflect the Group’s ability to fuel long-term revenue and organic growth Alternative Performance Measures and Definitions ===== SIDA 138 ===== Annual report Page 138 Alternative Performance Measure Description SCOPE Organic Growth Revenue growth as compared to the same pe- riod previous year. Organic growth from ac- quired companies or assets are calculated from the date of acquisition measured against the historical baseline performance. Reported to measure the ability to generate growth from existing business Recurring revenue Recurring revenue is a combined set of reve- nues that is defined as recurring as manage- ment considers that the sources of these rev- enue streams will continuously generate reve- nue over a variable period of time and size e.g. if players continue to bet with sportsbooks with which BC has revenue share agreements, customers continue current subscriptions or if BC on a current basis receive revenues from customers having current marketing agree- ments in respect of banners, etc. on the group’s websites. Accordingly, it includes Revenue share income, CPM /Advertising and subscription revenues. The group reports this APM to distinguish between what management consider as recurring revenue streams and what management consider as non-re- curring revenue streams, e.g. revenues reflecting one-time settlements with sportsbooks. *Net debt definition has been changed from Q3, 2023 so it is excluding earn-outs. Comparatives have been changed accordingly. Definitions Term Description PPC Pay-Per-Click SEO Search Engine Optimization Sports win margin Sports net player winnings (sportsbooks) / sports wagering Sports wagering The value of bets placed by the players Recurring revenue Recurring revenue is a combined set of revenues that is defined as recurring. It includes revenue share income, CPM/Advertising and subscription revenues Board The Board of Directors of the company Executive management Executives that are registered with the Danish Company register Company Better Collective A/S, a company registered under the laws of Denmark ===== SIDA 139 ===== Annual report Page 139 Better Collective A/S Sankt Annæ Plads 26-28 1250 Copenhagen K Denmark CVR no 27 65 29 13 +45 29 91 99 65 info@bettercollective.com bettercollective.com