Capital Market PresentationSegments of operations, results for 2018 and Q4 2018.

April 2019

investors@somoto.net

e-mail

www.somoto.com

website

Safe HarborStatement

2

The presentation contains data, including results, estimates, forecasts, including forecastsregarding the Company’s income and revenue and the Company’s plans in respect of theactivity thereof and of the activity of the Company’s subsidiaries, which constitute forward-looking statements, as such term is defined in the Securities Law, 5728-1968, whosematerialization is uncertain and may not be solely or partly within the Company’s control.There is no certainty that the information and/or estimates and/or forecasts and/or planswill materialize, in whole or in part, and they may be different from those presented in thepresentation, inter alia, due to the effect of external factors which are beyond theCompany’s control, such as: changes in the competitive and business environment as wellas the materialization of any of the risk factors affecting the Company. In addition, thepresentation may contain data based on external sources which were not independentlyexamined by the Company and therefore, the Company is not responsible for the accuracythereof.

About Somoto Group

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Global software company specializes in online marketing.

Engaged in application distribution, video & mobile advertising.

Advanced Profiling Technology. As part of the Innovation Activities, Developing a new EduTech APP and an Audio related product.

Diverse technologies enabling high profit margin in its areas of activity, including among others, algotrading technology for purchasing inventories.

Revenues in 2018 of $54.3 million, decrease of 16% compared to 2017. Revenues in Q4 2018 of $14.8 million, increase of 3.5% compared to Q3 2018, and increase of 3.4% compared to Q4 2017.

An organic growth strategy based on technology and innovation as well as unorganic growth through mergers and acquisitions.

The Company presents growth in its EBITDA Margins over Revenues during 2018, on a quarterly basis, in Q4 2018 EBITDA margin of 28.4%.

EBITDA in 2018 of $13.4 million, increase of 10.2% compared to 2017. Revenues in Q4 2018 of $4.2 million, increase of 7.7% compared to Q3 2018, and increase of 110% compared to Q4 2017.

Market Cap

Appx. $44m

Quick Facts

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Employees 75 (Appx. 43% developers)

Listed on TASE 8/2013

Management

Strong and experienced Management

DiversificationDifferent areas of activity

M&A Strategy

4 acquisitions in the fields of: distribution of applications, video and mobile

EBITDA CAGR2013-2018 CAGR of 32%

Significant positive cash balances

Appx. $17.2m as of December 2018; Appx. $12.7m net cash.

Dividend

Dividend payments in 2018 of NIS 33.7m, with a dividend yield of 23.05%. In addition, a first dividend payment in 2019 of NIS12m, with a dividend yield of 7.1%.

Entrepreneurs and Management

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Yaron Fishman | Product Innovation

Product Manager and Innovation Center• VP Technology at Genieo- (sold to Somoto for appx. $34m)• VP Product Development- Delver (Sears Israel)• Senior Product Manager- Babylon• Senior Product Manager- Kasamba

Assaf Itshayek | CEO & CFO

Accountant, MBA from Tel Aviv University• CFO of Blue Snap sold for $115m• CFO of Digital Power Corp (DPW)• Controller at Metalink (MTLK)• Senior Audit Manager at Deloitte

Eyal Yaakov | User Acquisition Co-Founder

Founder of SITE ON SPOT (specialist advertising network) • 12 billion annual exposures• Optimization, management of advertising growth of leading Web sites• More than 15 years of experience in developing Internet systems• Graduate of the ZEL Computing program at IDC Herzliya• Major in Computer Science

Ben Garrun | Mergers and acquisitions and Co-Founder

Founder of SweetPacks Free Entertainment Software• Sales of $ 35m; $ 7m profit• 200 million installations, 500,000+ daily installs• Alexa rank of 230, among top global websites• Return of 126x; sale value and dividends worth $54m+• MBA from Tel Aviv University

Eido Safrai | R&D

B.A Computer Science, Bar Ilan University• VP R&D- Mystate Mobile• R&D Manager- Tabtale (Games industry)• R&D Manager- CEVA (semiconductor)

Ron Jawroski | MEME VIDEO

BSc. Computer science Ben Gurion University, Executive MBA Tel Aviv University• CEO- TIM media • COO- Meme Video• Head of Video – Adstract

M&A and Unorganic Growth through M&A

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Mergers & Acquisitions

TabatooLtd.

May2014

GenieoInnovation

Ltd.

Sep.2014

Terser Tude Ltd.

Jan.2016

Meme Video Ltd.

Sep.2016

Growth through M&A

Acquisition structures and terms so far

Cash based and shares based transactions, and additional payments based on goal achievements

Growth StrategyVideo Advertising and Mobile

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Video Advertising

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Entering the video advertising market -gaining profits from a growing sector

Online video advertising market in USA is expected to reach appx. $22bn in 2021

Online video advertising market worldwide is expected to reach appx. $427bn in 2022

Volume of mobile video advertising expected to grow 5x between 2015 and 2020 in the US alone

CAGR of 40%; expected to reach appx. $6.5bn in the US

Video Activity in the Somoto Group

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Various activities including Mobile, PC, in-App CTV, Audio

Relationships with Advertisers and Publishers. Skilled man power and knowledge in the video advertising field.

Highly experienced with Technology, digital media and algorithm trading. Algorithmic system that optimize Bids for digital impressions.

Appx. 30 employees.Develops innovative technological tools in the digital video field.

Purchases media inventory and matches advertisers with the target audience needs.

Use of advanced technologies, including Big Data, Player, Waterfall, Bidder, Ad Server.

Tens of millions of video advertisements per day. Primary activities in the US, Canada, Australia, Britain, Germany and South America.

10 Data based on research data and from Statistica Inc. and Gartner and AppAnnie.

106 Billion DollarsMobile market income in 2018

Over 100Advertisers and distribution partners

Monetization and distribution platform

For websites and mobile applications

Mobile AdvertisingMobile Market - Mobile Application Distribution

205 BillionApplication installations in 2018

The Group’s TechnologyAppx. 43% technology related employees

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Video Technology

Alert system and decision support

Use of multiple ad servers (Vidible, LKQD, SpotX, Optimatic)

Unique algorithm determining the viability of purchasing inventory and matching the advertisement to the inventory

Mobile Technology

Automated production of advertising campaigns

Self service systems for partners

BI capabilities

Mobile adserver algorithm

Installation & Monetization

Dynamic HTML-based

File less than 150 KB

A cloud-based CDN

Optimization algorithm

End-user analytics in real time

BI & Media Purchase

Big data technology

Advanced data mining capabilities

Real-time offer management engine

API interface for online advertising exchange

Patents & Artificial Intelligence Technology

AI based micro behavioral targeting technology

Creating a deep user profile automatically

Three registered patents

Full end-user privacy

A wide range of potential applications

Financial Data

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Results for 2018, 2017 and Q4 2018

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Revenue, EBITDA & Financial Strength

Revenues in 2018 of appx. $54.3m, decrease of 16% compared to 2017. Revenues in Q4 2018 of appx. $14.8m, increase of 3.5% compared to Q3 2018, and increase of 3.4%compared to Q4 2017.

EBITDA in 2018 of appx. $13.4 million, increase of 10.2% compared to 2017. Revenues in Q4 2018 of appx. $4.2 million,increase of 7.7% compared to Q3 2018, and increase of 110%compared to Q4 2017.

Cash balance in December 2018 of appx. $17.2m; net cash of appx. $12.7m.

Dividend payments in 2018 of NIS 33.7m, with a dividend yield of 23.05%. In addition, a first dividend payment in 2019 of NIS12m, with a dividend yield of 7.1%.

Cash flow from operations in 2018 of$13.6m, a decrease of 4.9% compared to 2017. Cash flow from operations in Q4 2018 of $3.9m, an increase of 68.17% compared to Q4 2017.

Total equity – December 2018 of $31.3m.

Revenues in 2017 of $64.7m, representing an increase of 26% compared to 2016.

EBITDA in 2017 of $12.2m.

Cash balances in 2017 of $17.1m, net cash of $12.2m.

Cash flow from operations in 2017 of $14.2m, increase of 370% Compared to 2016.

Consolidated Profit and Loss Statement Yearly and Quarterly

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Year ended December 31

USD thousand

20172018Q1/2018Q2/2018Q3/2018Q4/2018

64,72654,33511,78713,40914,32514,814Revenue

41,66224,7985,5226,2196,7636,294Cost of sales (inc. amortization)

4,4764,4641,1051,1121,1191,128R&D expenses

8,38512,0343,3303,2872,4372,980S&M expenses

4,0354,2881,0021,0571,271958G&A expenses

1,5641,564Other expenses

58,55847,14810,95911,67511,59012,924Total Expenses

6,1687,1878281,7342,7351,890Operating profit

3,5165,2974621,3141,6941,827Net profit

12,19913,4462,1953,1013,9344,216EBITDA

As a % of sales

9.5%13.2%7.0%13%19.1%12.8%Operating profit

18.8%24.7%18.6%23.1%27.5%28.5%EBITDA

Balance Sheet Statements

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20172018

Current assets:

15,15016,374Cash and cash equivalents

212-Short-term deposit

58175Restricted cash and deposit

-500Cash in trust in connection with wholly owned subsidiary acquisition

15,06911,912Receivables and other account receivables

31,01228,861

Non-current assets:

1,336785Restricted cash and deposits

25,42219,163Intangible assets and goodwill

229244Fixed assets

668375Deferred taxes

27,65520,567

58,66749,428Total assets

20172018

Current liabilities:

2,075-Liabilities in connection with wholly owned subsidiary acquisition

3,4161,500Bank loans

6967Liabilities to the OCS in Israel

12,50212,352Other current liabilities

18,06213,919

Non-current liabilities:

1,4062,969Bank loans

1,018-Liabilities in connection with wholly owned subsidiary acquisition

2,1151,288Deferred taxes

22,60118,176Total liabilities

Equity attributable to shareholders

36,06631,252Total equity

58,66749,428Total liabilities and equity

Consolidated company ’s results on a quarterly basis, 2018 :

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14.8

4.2

14.3

3.9

13.4

3.1

11.8

2.2

RevenuesEBITDA

Q4 2018

Q3 2018

Q2 2018

Q1 2018

Somoto Consolidated Q1 18, Q2 18, Q3 18, Q4 18- in M$

Consolidated company ’s results on a yearly basis:

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Somoto Consolidated 2016, 2017, 2018- in M$

54.3

13.4

64.7

12.2

51.2

16.4

RevenuesEBITDA

2018

2017

2016

Company’s Results in App. Distribution segment, quarterly basis:

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Somoto - App. Distribution Quarterly- in M$

8.7

4.1

8.1

3.6

8.3

3

7.9

2.9

5.8

2.1

RevenuesEBITDA

Q4 2018

Q3 2018

Q2 2018

Q1 2018

Q4 2017

2018, Vision and Summary

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Summary of Strategy and Growth Drivers

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A global software company, specializing in online marketing.

Engages in application distribution, video and mobile marketing and monetization.

EBITDA in 2018 of $13.4 million, increase of 10.2% compared to 2017. Revenues in Q4 2018 of $4.2 million, increase of 7.7% compared to Q3 2018, and increase of 110% compared to Q4 2017.

Cash balance in December 2018 of appx. $17.2m; net cash of appx. $12.7m.

Preserving and increasing profitable activitiesand decreasing activities with low profit rate.

Experienced management with a proven track record to grow in a dynamic market.

Dividend payments in 2018 of NIS 33.7m, with a dividend yield of 23.05%. In addition, a first dividend payment in 2019 of NIS12m, with a dividend yield of 7.1%.

Growth engine in video market, expected to grow to appx. $427bn in 2022.

Growth engine in mobile market, expected to grow to appx. $106bn in 2018.

Successful acquisitions of four companies with the intent of acquiring additional growth companies.

Traded in the Tel Aviv Stock Exchange, Market cap of appx. $44m.

Advanced Profiling Technology. As part of the Innovation Activities, Developing a new EduTech APP and an Audio related product.

Thank You

investors@somoto.net

e-mail

www.somoto.com

website