Slide 1: Interim results 2018
Interim results 2018 23 August 2018
Slide 2: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group CEO Group CEO Interim results 2018 2
Slide 3: Strategic position in key markets
STRATEGIC POSITION IN KEY MARKETS P R O G R E S S I N R E G U L AT E D M A R K E T S D E L I V E R S C O N F I D E N C E F O R F U T U R E ▪ Snaitech acquisition delivers principal position in largest regulated gambling market in Europe ▪ Organic progress, headwinds in Asia and acquisition of Snaite
Slide 4: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group CEO Group CEO Interim results 2018 4
Slide 5: Financial highlights
FINANCIAL HIGHLIGHTS I M P R O V E D F I N A N C I A L P R O F I L E & G R O W T H I N R E G U L AT E D B U S I N E S S Strong growth in B2B Gaming outside of Asia ▪ UK B2B Gaming revenue growth of 6% ▪ B2B regulated Gaming revenue growth of 16% Evolving financial profile ▪ Regulated revenue increas
Slide 6: Group results summary
Group RESULTS SUMMARY G R O U P R E S U LT S I M PA C T E D B Y A S I A N D O W N T U R N 500 H1 2017 400 421.6 436.5 H1 2018 € Millions 300 200 170.9 100 145.0 125.5 83.3 0 Total revenue Adj. EBITDA Adj. Net Profit +4% -15% -34% Interim results 2018 6
Slide 7: Group results summary at constant currency
Group RESULTS SUMMARY AT C O N S T A N T C U R R E N C Y 500 H1 2017 400 447.6 421.6 H1 2018 € Millions 300 200 170.9 148.8 100 138.5 86.1 0 Total revenue Adj. EBITDA Adj. Net Profit Incl. acquisitions +6% -13% -38% Excl. acquisitions -12% -20% -43% Interim results 2018 7
Slide 8: Summary by division H1 2018
Group SUMMARY BY DIVISION H1 2018 INCLUDES 1 MONTH CONTRIBUTION FROM SNAITECH 300 285.8 Revenue 250 Adjusted EBITDA € Millions 200 150 100 120.3 98.4 50 -0.5 52.3 0 25.2 B2B Gaming B2C Gaming TradeTech Margin 42.1% 0.5% 48.3% Interim results 2018 8
Slide 9: Group margin analysis
Group GROUP MARGIN ANALYSIS B 2 B G A M I N G M A R G I N I M PA C T E D B Y A S I A ; S T R O N G T R A D E T E C H R E S U LT S H1 2017 H1 2018 Revenue Adj. EBITDA Margin Revenue Adj. EBITDA Margin B2B Gaming 338.5 166.6 49% 285.8 120.3 42% Reported B2C Gaming 38.0 (11.7) -31% 98.4 (0.5) 0.5% Trad
Slide 10: B2B Gaming revenue
B2B B2B GAMING REVENUE Gaming “ A B U S I N E S S O F T W O H A LV E S ” H1 2017 H1 2018 % CC% UK 83.7 86.6 3% 6% Asia 166.2 101.7 -39% -37% Other 88.5 97.5 10% 12% Total 338.5 285.8 -16% -14% Regulated 129.4 150.7 16% 19% Unregulated 209.1 135.1 -35% -34% Total 338.5 285.8 -16% -14% Interim results
Slide 11: B2B Gaming performance
B2B B2B GAMING PERFORMANCE Gaming A STRONG PERFORMANCE EX. ASIA ex. Asia H1 2017 H1 2018 % CC % CC % Casino 224.8 169.3 -25% -23% 8% Services 48.6 39.8 -18% -16% -13% Sport 36.9 46.7 27% 29% 29% Bingo 13.0 12.7 -2% 0% 0% Poker 4.7 4.7 2% 3% 4% Other 10.5 12.6 19% 21% 20% Total B2B Gaming 338.5 285.8
Slide 12: B2B Gaming costs
B2B B2B GAMING COSTS Gaming GOOD COST CONTROL Including Acquisitions Excluding Acquisitions H1 2017 H1 2018 Diff % H1 2017 H1 2018 Diff % R&D 43.7 38.0 -13% 42.6 36.5 -14% Operations 81.3 82.4 1% 81.5 80.0 -2% G&A 36.9 33.8 -8% 36.7 33.3 -9% S&M 9.9 11.3 14% 9.8 10.9 12% Total B2B Gaming 171.8 165.5
Slide 13: B2C Gaming performance
B2C B2C GAMING PERFORMANCE Gaming F I R S T T I M E C O N S O L I D AT I O N O F S N A I T E C H ; I M P R O V E M E N T I N S U N B I N G O Revenue Adjusted EBITDA H1 2017 H1 2018 % CC% H1 2017 H1 2018 % Snaitech - 61.3 - - - 11.8 - Sun Bingo 11.7 14.6 25% 28% -14.3 -10.3 28% Casual Gaming & other
Slide 14: Snaitech performance
B2C SNAITECH PERFORMANCE Gaming C O N S O L I D AT E D F R O M J U N E 2 0 1 8 Revenue Consolidated Revenue H1 2017 H1 2018 % From 5 June Retail betting 79.5 88.0 11% 11.6 Gaming machines 320.4 305.4 -5% 41.9 Online 29.0 38.1 32% 5.0 Other 8.8 12.6 43% 2.8 Total 437.7 444.1 1.5% 61.3 Adjusted EBITDA
Slide 15: Cashflows
CASHFLOWS STRONG CASH CONVERSION ▪ Net cash from operations up 51% at €222.5 (H1 2017: €147.3m) ▪ up 15% excluding Snaitech ▪ Excluding Snaitech, cash conversion in H1 2018 of 101% (H1 2017: 79%) from adjusted EBITDA (when adjusted for jackpots, security deposits and client equity) ▪ Excluding Snait
Slide 16: Cash flow bridge
CASH FLOW BRIDGE 700 50 600 100 118 500 € Millions 400 260 76 335 327 663 300 563 100 200 387 45 135 57 100 0 Adjusted Ordinary RCF Other Acquisition of Net cash Return on Acquisition of Bridge loan Snai adjusted Snai net cash Adjusted RCF Adjusted gross cash dividends repayement acquisitions* PPE,
Slide 17: Balance sheet
BALANCE SHEET SIGNIFICANT PROGRESS ▪ Playtech remains committed to an efficient balance sheet ▪ €200m RCF now fully repaid; €250m available as and when needed ▪ Sale of holding in GVC / Ladbrokes Coral ▪ Plus500 holding of €208m as at 30 June 2018 ▪ vs €116m at December 2017 ▪ significant increase i
Slide 18: Cash on balance sheet
CASH ON BALANCE SHEET C A S H AVA I L A B L E T O R E D U C E Q U A N T U M O F R E F I N A N C I N G June 18 Gaming TradeTech Playtech Snai Total ** Dec 17 June 17 exc Snai Gross Cash 322.8 306.2 629.0 207.6 836.6 584.0 536.4 Client funds / 74.2 158.8 233.0 40.2 273.2 197.1 160.8 progressives * Adj
Slide 19: Refinancing
REFINANCING EXPECTED OVER THE COMING MONTHS ▪ Longer term financing to be put in place to take-out bridge from Snaitech acquisition ▪ Total amount to be refinanced of c. €1bn ▪ Finalising ratings process ▪ Update in due course Interim results 2018 19
Slide 20: Outlook
OUTLOOK G U I D A N C E P R O V I D E D I N J U LY T R A D I N G U P D AT E R E A F F I R M E D ▪ Asia has broadly stabilised ▪ Annual run rate of c. €150m revenue ▪ c. €25m of direct costs plus share of centralised costs ▪ Sun Bingo performance continues to improve with FY result expected to be inl
Slide 21: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group CEO Group CEO Interim results 2018 21
Slide 22: TradeTech Group results
TRADETECH GROUP RESULTS STRONG H1 GROWTH Actual ($m) Proforma ($m) H1 2017 H1 2018 % H1 2017* H1 2018 % Total revenue 48.9 67.1 37% 55.0 67.1 22% Adjusted EBITDA 17.6 30.3 72% 19.5 30.3 56% Margin 36% 45% - 35% 45% - ▪ Significant growth across reported & proforma results ▪ Continued margin improvem
Slide 23: Markets.com results
MARKETS.COM RESULTS B2C KPI MOMENTUM CONTINUED B2C Markets.com H1 H1 % ▪ Increased longevity of active customers, with 32% 2017 2018 increase in existing active customers Revenue ($) 20.9 28.1 34% ▪ Strong growth trajectory of trading volumes Volume ($bn) 87.0 132.3 52% ▪ Increased revenue not influ
Slide 24: TradeTech Group B2B results
TRADETECH GROUP B2B RESULTS STRONG GROWTH MOMENTUM Actual ($) Proforma ($) H1 2017 H1 2018 % H1 2017 H1 2018 % B2B revenue ($m) 28.0 39.0 39% 34.0 39.0 15% Volume ($bn) 458.2 956.4 109% 615.4 956.4 55% Revenue per $m volume 61.1 40.8 55.3 40.8 ▪ Significant growth in B2B revenue and volume, includin
Slide 25: Regulatory landscape
REGULATORY LANDSCAPE F U L LY C O M P L I A N T A N D W E L L P O S I T I O N E D ▪ Fully licensed in UK, Cyprus, South Africa & Australia ▪ Fully compliant with ESMA’s measures to restrict the marketing, distribution and sale of CFDs to retail clients ▪ Fully supportive of regulatory improvements w
Slide 26: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group Group CEO Interim results 2018 26
Slide 27: Playtech principles
PLAYTECH PRINCIPLES OUR CONTINUED MISSION We are the leading technology company in the gambling and financial trading industries We focus on regulated markets and cash generation We utilise our distribution, scale and commitment to innovation Interim results 2018 27
Slide 28: Overview
OVERVIEW A C H A L L E N G I N G P E R I O D W I T H C L E A R O P E R AT I O N A L P R O G R E S S Improved quality of earnings in period Progress in key strategic markets ▪ Gaming regulated revenue up to 65% ▪ Latin America, Eastern & Southern Europe ▪ FY 2018 Group run rate regulated revenue 80-9
Slide 29: Asia update
ASIA UPDATE A DIFFERENT BUSINESS MODEL TO THE REST OF THE WORLD ▪ Content only market – no IMS ▪ Highly competitive & fragmented market ▪ Playtech recognised as a premium brand ▪ Led by Asian bookmakers – betting driven ▪ Price sensitive in nature ▪ Lower barriers to entry ▪ Non-exclusive market wit
Slide 30: Asia: Playtech's position
ASIA: PLAYTECH’S POSITION NO READ-ACROSS TO THE OUTSIDE OF ASIA Significant and sudden change in China Playtech S ▪ Increased competition - “Price war” ▪ Use of Playtech IP without our knowledge or consent ▪ No change to regulatory backdrop ▪ Matter now closed Majority of Asia through distributor Mo
Slide 31: Strategy
STRATEGY T H E L E A D I N G T E C H N O L O G Y C O M PA N Y I N R E G U L AT E D M A R K E T S Strategy Delivery Scale & Distribution ▪ Playtech ONE ▪ 15 licensees signed up to GPAS in H1 ▪ Extension of Playtech platform ▪ New licensees in key strategic markets ▪ Invest in leading B2C brands in ke
Slide 32: Progress in key markets
PROGRESS IN KEY MARKETS S T R AT E G I C F O O T H O L D I N F A S T G R O W I N G R E G U L AT E D M A R K E T S Europe Online Online Progress penetration CAGR 17-20 Online Online LATAM Progress UK 40% 9% penetration CAGR 17-20 Mexico 21% 8% Poland 20% 19% Columbia 25% 14% Czech Rep. 18% 15% Brazil
Slide 33: Key markets: US strategy
KEY MARKETS: US STRATEGY S T R AT E[ G I C O P T ]I O N A L I T Y Ready now ▪ New Jersey license in progress ▪ US ready retail sportsbook ▪ Scalable PBS technology Retail led strategy ▪ Industry leading SSBT & OTC capabilities ▪ Omni-channel essential to long-term opportunity ▪ Multi regulatory regi
Slide 34: Playtech BGT Sports
PLAYTECH BGT SPORTS G E O G R A P H I C A L E X PA N S I O N & I N N O VAT I O N Sport central to Playtech strategy ▪ Strategically important in key markets ▪ Entry point to online for end customers Progress in key markets ▪ OPAP: PBS sportsbook rolled out across 4,500 estate ▪ SAS: landmark online
Slide 35: Italy: Snaitech
ITALY: SNAITECH P L AY T E C H H A S P R O V E N T R A C K R E C O R D I N H I G H LY R E G U L AT E D M A R K E T S Regulation Impact Gaming machine reductions ▪ AWPs number to less than 265k ▪ Snai 15% market share gaming machines ▪ ‘Conferenza Unificata’ – sensitive areas ▪ 38,534 AWP rights end
Slide 36: Italy: Snaitech
ITALY: SNAITECH L E V E R A G I N G R E TA I L C H A N N E L T O D R I V E O N L I N E G R O W T H No. of new players FY 2017 % Snai: one of the most powerful online and retail brands ▪ 49% of new online customers came directly to Snai online Retail cross sell 19,474 20% ▪ Online customers acquired
Slide 37: Sun Bingo update
SUN BINGO UPDATE GOOD MOMENTUM IN PERFORMANCE Sun Bingo performance much improved ▪ 27% in revenue at constant currency ▪ Good performance despite traditionally slow summer period Negotiations continue to progress ▪ Potential for agreement to benefit both parties ▪ Incentivise Playtech to deliver po
Slide 38: Current trading
CURRENT TRADING A N D F U R T H E R S T R AT E G I C P R O G R E S S I N H 2 Momentum in regulated business continues into H2 ▪ Continued momentum in regulated revenue ▪ Snaitech strong performance start of H2 2018 ▪ Sun Bingo continuing to see revenue momentum ▪ GVC negotiations Interim results 201
Slide 39: Investor Day 2018
INVESTOR DAY 2018 ▪ Milan: November 2018 ▪ Presentations on Snai business ▪ Meet the highly rated Snai management team ▪ Opportunity to spend time with Group management ▪ Invitations to follow Interim results 2018 39
Slide 40: Q&A
Q&A Interim results 2018
Slide 41: Appendix
Appendix Interim results 2018
Slide 42: B2B Gaming customer concentration
B2B GAMING CUSTOMER CONCENTRATION CONSISTENT FROM H2 2017 to H1 2018 Licensees H1 2017 H2 2017 H1 2018 Top 5 43% 38% 38% Top 10 63% 57% 57% Top 15 74% 68% 68% Interim results 2018 42
Slide 43: Acquisition timetable
ACQUISITION TIMETABLE Contingent Acquisition Max earnout Payment date cons. ACM Group €5.0 m Q4 2018 €73.0m €124.1 m €5.6 m Q1 2019 €64.8 m Q1 2020 Playtech BGT Sports Ltd €31.2m €60.0 m Q2 2020 Consolidated Financial €23.4 m €62.6 m Q3 2019 Holdings Destres €2.5 m Q3 2018 €16.0 m €17.5 m €15.0 m Q2
Slide 44: Thank You
Thank You Interim results 2018