Playtech Plc · LSE:PTEC
Playtech — Investor Day (November 2018)
98 slides from Playtech's investor day presentation, November 2018
Slide 1: Leading the way in regulated markets
Leading the way in regulated markets Investor & Analyst Day Milan, November 2018
Slide 2: Today's Agenda
TODAY’S AGENDA 12.45 pm - 1.00 pm Mor Weizer Introduction 1.00 pm - 2.30 pm Snaitech team Snaitech 2.30 pm - 3.00 pm Refreshment & email break 3.00 pm - 3.30 pm Armin Sageder Playtech BGT Sports 3.30 pm - 4.00 pm Ian Ince Regulatory landscape 4.00 pm - 4.30 pm Simo Dragicevic Responsible gambling 4.
Slide 3: Introduction
Introduction Mor Weizer, CEO
Slide 4: Today's Key Takeaways
TODAY’S KEY TAKEAWAYS L E A D I N G T H E W AY I N R E G U L AT E D M A R K E T S ▪ Strategy to focus on distribution, innovation & data capabilities delivering advantage in target markets of Europe, LATAM & US ▪ Snaitech delivers online & retail distribution in largest European market ▪ Unrivalled
Slide 5: Snaitech
ma bes London RE Stock Exchange LISTED PREMIUM Snaitech Snaitech team
Slide 6: Snaitech Presentation Agenda
SNAITECH PRESENTATION AGENDA Positioning Business perspectives Regulatory framework Financials Fabio Schiavolin Agostino Romano Michele Sessa Edo Rinaudo Snaitech CEO Gaming Machines Director Regulatory Affairs Snaitech CFO Alessandro Graziosi Director Retail Betting and Operations Director Alessand
Slide 7: Rationale of Playtech-Snaitech Deal
RATIONALE OF PLAYTECH -SNAITECH DEAL C R E AT E D I N N O VAT I V E B 2 B 2 C P L AY E R T O L E A D I T A L I A N M A R K E T Rationale Integration & Synergies ▪ The deal created a vertically integrated player, ▪ Playtech will drive Snaitech growth with its leveraging the B2B leadership of Playtech
Slide 8: Corporate History
CORPORATE HISTORY C R E AT I N G A N I N N O VAT I V E T E C H N O L O G Y F I R S T C O M PA N Y 1998 – 2014 2015 – 2017 June 2018 Snai and Cogetech: Snaitech: Playtech and Snaitech: different stories, complementary players The transformation A new era for Italy ▪ More than 100 years of experience:
Slide 9: Snaitech's Management Team
SNAITECH’S MANAGEMENT TEAM Combined management team from Snai and Cogetech merger ▪ Snaitech Management team is made of 12 Senior Managers with complimentary skills, developed in ages of experience in the Regulated market, with female execs occupying 30% of the team ▪ The recent integration between
Slide 10: Executing the Opportunity
EXECUTING THE OPPORTUNITY P R O V E N T R A C K R E C O R D O F M A N A G E M E N T P O S T C O G E T E C H I N T E G R AT I O N EBITDA constant progression €20.5m synergy achieved from Cogetech integration 200 €20.5m 154.7 150 136.2 Redundancy 127.1 2.5 3.5 114.4 2 program €m 100 8.0 50 Efficiency
Slide 11: Turnaround Experience in Retail
TURNAROUND EXPERIENCE IN RETAIL S U C C E S S F U L T R A C K R E C O R D I N D R I V I N G P R O F I TA B I L I T Y I N R E TA I L ▪ In 2010 Snaitech (Cogetech) acquired the Italian retail network of Ladbrokes, represented by 82 betting shops and 50 corners, showing negative EBITDA of -€7m ▪ Succes
Slide 12: Snaitech Today
SNAITECH TODAY T H E L E A D I N G G A M B L I N G C O M PA N Y I N T H E I T A L I A N M A R K E T SNAITECH’s Corporate Structure 2017 Financials ▪ €10.5 billion wagers ▪ €890 million revenues 100% (through Pluto Italia SpA) ▪ €136 million EBITDA (+8 mln € vs 2016) 100% 100% Organization & Tech 100
Slide 13: Italian Gambling Market
ITALIAN GAMBLING MARKET A H I G H LY AT T R A C T I V E M A R K E T Italian Gaming Market, Turnover €bn Italy largest gaming market by GGR, 2017 €bn CAGR Bet per adult, € 19,9 1.3% 20,5 Lotteries 19,0 388 303 191 196 224 19,1 and others 26,8 21,1 23.5% Snaitech Online 14,2 16,7 present in 17 20.1 th
Slide 14: Snaitech Competitive Landscape
SNAITECH COMPETITIVE LANDSCAPE LEADER IN ALL VERTICALS Gaming Machines market share (% of total GGR) Retail Betting market share (% of total GGR) Online market share (% of total GGR) 20,0% 25,0% 12,0% 17,7% 10,7% 18,0% 20,3% 10,0% 16,0% 14,6% 20,0% 8,4% 14,0% 8,0% 7,7% 7,7% 12,7% 8,0% 11,5% 7,1% 12,
Slide 15: Snaitech Retail Network
SNAITECH RETAIL NETWORK T H E L A R G E S T G A M I N G R E T A I L E R I N I T A LY Snaitech retail network consistency Wagers breakdown and distribution Retail Betting 1.962 1.906 % of total wagers € million ▪ +700 betting shops (o/w 10 directly managed) 474 ▪ +900 betting corners AWP VLT BETTING
Slide 16: Snaitech Strategic Pillars
SNAITECH STRATEGIC PILLARS T O D E L I V E R S U S TA I N A B L E G R O W T H 1 Brand Equity 2 Technology & Innovation 3 Sports Trading Management 4 Strategic partnerships 5 Real estate assets 6 Social Responsibility Investor & Analyst Day 2018 16
Slide 17: Snaitech Brand Equity
1 SNAITECH BRAND EQUITY T W O T H I R D S O F I T A L I A N S : “ T H E B E T T I N G S P E C I A L I S T, S A F E A N D R E L I A B L E ” “SNAI is the first brand in terms of Brand-Awareness and Recognition” (source: Research on Brand Equity by KPMG | Eumetra 2018) 20% Brand Awareness: 8 of 10 play
Slide 18: Technology & Innovation
2 TECHNOLOGY & INNOVATION P R O P R I E TA R Y T E C H N O L O G Y & M A R K E T K N O W H O W ▪ Integration with PBS platform under Snaitech new Betting Technology way to develop a complementary and synergic solution for Playtech Group ▪ Smart Technology®: large variety of betting terminals, enhanc
Slide 19: Snaitech Sports Trading Management
3 SNAITECH SPORTS TRADING MANAGEMENT S N A I T E C H D E L I V E R I N G B E T T E R PAY O U T P E R F O R M A N C E T H A N M A R K E T 100,0% Monthly Sports Payout 95,0% 90,0% 85,0% 80,0% 75,0% Snaitech Market 70,0% Jan Feb Mar Apr 17 May Jun Jul 17 Aug Sep Oct 17 Nov Dec Jan Feb Mar Apr May Jun 1
Slide 20: Strategic Partnerships
4 S T R AT E G I C PA R T N E R S H I P S PA R T N E R S H I P S & P R O P R I E TA R Y T E C H D E L I V E R B E S T I N C L A S S C A PA B I L I T I E S Snaitech in-house platforms Strategic Partnerships Full Betting Platform Smart Technology® Retail Betting Real time risk Back Office: MyWEB manag
Slide 21: Real Estate Assets
5 REAL ESTATE ASSETS S A N S I R O M I L A N & M O N T E C AT I N I A R E A S ▪ San Siro gallop horse track, Milano (1920) La Maura Trot track ▪ La Maura trot horse track, Milano (2015) Trot training track ▪ Sesana trot horse track, Montecatini (1916) La Maurina ▪ 1,650,000 m2 area with historical a
Slide 22: Social Responsibility
6 SOCIAL RESPONSIBILITY COMMITMENT TO SOCIAL RESPONSIBILITY & GOOD CAUSES ▪ Snaitech 2017 Non-Financial Reporting is GRI G4 compliant and assured by independent auditor (PWC) ▪ We are also committed to the UN Global Compact initiative with specific focuses on labour, internal communication, environm
Slide 23: Snaitech Presentation Agenda
SNAITECH PRESENTATION AGENDA Positioning Business perspectives Regulatory Framework Financials Fabio Schiavolin Agostino Romano Michele Sessa Edo Rinaudo Snaitech CEO Gaming Machines Director Regulatory Affairs Snaitech CFO Alessandro Graziosi Director Retail Betting and Operations Director Alessand
Slide 24: AWP Market Overview
AWP MARKET OVERVIEW I T A L I A N G A M I N G M A C H I N E VA L U E C H A I N Introduction ◼ 2004 Gross Wagers € 25.4 bn € 3.7 bln Snaitech Concession Costs ◼ € 100 per AWP Second operator # Rights ◼ 265,000 (limited by AAMS) Payout on Gross Wagers 70,2% with 14.6% market share Gross Wagers 2017 (€
Slide 25: VLT Market Overview
VLT MARKET OVERVIEW I TA L I A N G A M I N G M A C H I N E VA L U E C H A I N Introduction ◼ Mid 2010 Gross Wagers € 23.5 bn € 3,4 bn Snaitech Concession Costs ◼ € 15,000 per VLT Second # Rights ◼ 56,500 (limited by AAMS) Payout on Gross Wagers 87.8% operator with 14.6% market Gross Wagers 2017 (€ b
Slide 26: Snaitech Offering in VLT Platforms
SNAITECH OFFERING IN VLT PLATFORMS P L AY T E C H P L AT F O R M P R O G R E S S I V E R O L L - O U T T O B O O S T T H E G R O W T H ▪ Playtech as alternative to Novomatic machines ▪ Today Snaitech is the only operator with 4 profitable & international platforms ▪ Changing mix in our venues (+ Vid
Slide 27: The Innova Project for VLTs
THE INNOVA PROJECT FOR VLTS D R I V I N G I N N O VAT I O N I N T H E G A M I N G M A C H I N E B U S I N E S S VLT Bet-per-day evolution Snaitech launched the INNOVA project for three main following Innova Project reasons: ▪ maximise & diversify retail revenues by managing the full product portfoli
Slide 28: Reduction in Gaming Machines
REDUCTION IN GAMING MACHINES L O W I M PA C T F R O M 3 5 % A W P C U T Law n. 96 of 21 June 2017 provided guidance on the reduction by 35% of AWPs to be applied proportionally to each concessionaire within 30 Before 35% reduction no cap was April 2018. Total number of AWPs is now set to 265,000 (39
Slide 29: Vertical Integration
VERTICAL INTEGRATION S T R AT E G I C R AT I O N A L E ▪ Snaitech acts as operator for c. 5,000 owned AWPs capturing a larger share of the gaming machines value chain ▪ Medium size operator business model (>500 gaming machines managed) is highly profitable (30% EBITDA Margin) Acquisitions: Multiple
Slide 30: Strategy for Growth
STRATEGY FOR GROWTH A S U S TA I N A B L E R E V E N U E S T R E A M ▪ From Snaitech AWP platform to Playtech proprietary platform for new regulation AWPs ▪ TOP Performing Playtech game content for Mini VLT ▪ Exploiting Playtech platform capacity VLTs ▪ Supporting Playtech open platform with third p
Slide 31: Snaitech Presentation Agenda
SNAITECH PRESENTATION AGENDA Positioning Business perspectives Regulatory Framework Financials Edo Rinaudo Fabio Schiavolin Agostino Romano Michele Sessa Snaitech CFO Snaitech CEO Gaming Machines Director Regulatory Affairs Alessandro Graziosi Director Retail Betting and Operations Director Alessand
Slide 32: Retail Betting
RETAIL BETTING I T A L I A N M A R K E T O V E R V I E W & VA L U E C H A I N Introduction ◼ 1998 Gross Wagers € 6.3 bn Concession Costs ◼ €18,000 for corner - €32,000 for shop # Rights ◼ 4,200 sport corners 5,300 betting shop Payout on Gross Wagers 82% Gross Wagers 2017 ◼ €6.3bn GGR 2017 ◼ €1.2bn B
Slide 33: Product Offering & Positioning: Retail Sports Betting
PRODUCT OFFERING & POSITIONING R E TA I L S P O R T S B E T T I N G GGR 2017 17.7% 14.1% 13.4% 11.7% 10.8% 9.4% 8.7% Largest market offering ▪ 360° portfolio for all sport event ▪ 45,000 Pre-match events per month ▪ 25,000 In-Play events per month ▪ Up to 100 unique Markets Highest # of Bets in the
Slide 34: Product Offering & Positioning: Virtual Events
PRODUC T OFFERING & POSITIONIN G V I RT UAL E V E N T S GGR 2017 28.7% 18.5% 14.0% 13.1% 6.9% 4.1% 4 channel-operator ▪ Large number of sports events available Dedicated self-service devices ▪ Up to 50% of tickets issued Product assortment ▪ Second platform certified by the Regulator and ready for l
Slide 35: Product Offering & Positioning: Horse Racing
PRODUCT OFFERING & POSITIONING H O R S E RAC I N G GGR 2017 38.1% 19.3% 11.1% 6.1% 1.5% Historical DNA & niche product ▪ 1° slip in 1994 ▪ Exclusive broadcaster ▪ Proprietary race track ▪ Loyal players ▪ Productive POS highly concentrated Revamping attractiveness ▪ Regulator in the process of openin
Slide 36: New Approach to Customers
NEW APPROACH TO CUSTOMERS C O M P L E M E N TA R Y R E TA I L S P O R T S T E C H N O L O G Y REJUVENATION PROJECT: ▪ Shift players attitudes from fully-assisted bets to ▪ Started in 2017: self-creating bets ▪ Fully replace old counters (7,000 Betsi) ▪ Increase the number of self-service up to 1,300
Slide 37: Innova Project
INNOVA PROJECT RIGHT THINGS IN THE RIGHT PLACE ▪ Commenced September 17 with the aim to refurbish approx. 90 POS ▪ Delivering improvement in Gaming Machines & Virtual Events ▪ Changing POS layout to leverage the full potential of product verticals (HR, Sports, Virtual Events) ▪ Maximise in-store pre
Slide 38: Retail Integration
RETAIL INTEGRATION C R E AT I N G A N I N D U S T R Y L E A D I N G R E T A I L O F F E R I N G + ▪ Strong leading positions of both companies respectively into B2B and B2C arena ▪ Playtech global footprint may bring best practices to the Italian market ▪ Playtech solutions and products diversificat
Slide 39: Snaitech Presentation Agenda
SNAITECH PRESENTATION AGENDA Positioning Business perspectives Regulatory Framework Financials Fabio Schiavolin Agostino Romano Michele Sessa Edo Rinaudo Snaitech CEO Gaming Machines Director Regulatory Affairs Snaitech CFO Alessandro Graziosi Director Retail Betting and Operations Director Alessand
Slide 40: Digital Market Overview
DIGITAL MARKET OVERVIEW O N L I N E B E T T I N G & G A M I N G VA L U E C H A I N Introduction ◼ 2002 Gross Wagers € 26.8 bn Major Competitors ◼ Bet365, Stars, Planetwin365, Sisal, Eurobet # Operators* ◼ 76 (including small local operators) Payout on Gross Wagers 95.1% Market GGR 2017 ◼ €1.376 bn F
Slide 41: Snaitech Digital Progress
SNAITECH DIGITAL PROGRESS C O M B I N AT I O N O F S N A I & C O G E T E C H D E L I V E R E D L E A D I N G O N L I N E P L AY E R GGR 62 M GGR 103 M MOBILE MOBILE 20.0% +50.0% UNIQUES UNIQUES 2015 154,760 +270,000 2017 FTDs 52,000 FTDs +95,000 Channel weight on total CM: 12% Channel weight on tota
Slide 42: SNAI.it Key Milestones
SNAI.IT KEY MILESTONES TRACK RECORD OF SUCCESS Instant roulette App SNAI Slot New App New Casino page & (becoming key driver in (first time ever multi- SNAI Sport New Casino content cross-sell) provider) New portal Daily Spin New Gaming Apps: SNAI.it (becoming a key driver Bingo, Sette e mezzo, loya
Slide 43: Online Wide Offering Portfolio
ONLINE WIDE OFFERING PORTFOLIO From Home of betting to Home of Entertainment ▪ Best-in-class in-play offer in the market, with +25,000 games covered per month SPORTS ▪ Widest pre-match offer with 100 unique market types, including Kombi Bets ▪ Best-in-class Streaming Portfolio with +2,500 games cove
Slide 44: Online Acquisition Through Retail
ONLINE ACQUISITION THROUGH RETAIL I N A D D I T I O N T O O N L I N E A C Q U I S I T I O N S N A I I S A B L E T O L E V E R A G E R E TA I L Acquisition Uniques Churn ARPU Total GGR CUSTOMERS 19,466 72,738 25% € 764.57 € 55.614 M from RETAIL 2017 KPI PURE ONLINE 76,000 197,570 42% € 241.70 € 47.75
Slide 45: Omni-Channel: Fuel for Growth
OMNI-CHANNEL: FUEL FOR GROWTH A D V E R T I S I N G B A N W I L L E M P O W E R R E TA I L L E A D E R S H I P & B R A N D L E G A C Y CAPTIVE NETWORK: 1,600 betting shops & corners PROSPECT NETWORK: LIVE 400 gaming halls +11,700 AWP POS NEXT RETAIL ACQUISITION KPIs INNOVATIVE NETWORK: 9,800 Paymat
Slide 46: The Next Stage of Growth
THE NEXT STAGE OF GROWTH P L AY T E C H E N A B L I N G C O N S I S T E N T G R O W T H What How GAMIFICATION A new gamified environment for desktop and mobile offer ENHANCED USER EXPERIENCE Leveraging International experience to improve customer journey CONTENT Building new exclusive content and a
Slide 47: Snaitech Presentation Agenda
SNAITECH PRESENTATION AGENDA Positioning Business perspectives Regulatory Framework Financials Fabio Schiavolin Agostino Romano Michele Sessa Edo Rinaudo Snaitech CEO Gaming Machines Director Regulatory Affairs Snaitech CFO Alessandro Graziosi Director Retail Betting and Operations Director Alessand
Slide 48: Two-Layers Regulatory Governance
TWO-LAYERS REGULATORY GOVERNANCE “DIGNITY DECREE” REFORM ON GAMING TO HARMONIZE POWERS Concession rules (AWP reduction, ban advertising, technical Government, issues, certification,…. ) National ADM (Regulator) TAXATION Reform on Gaming to Concessions harmonise two sets of regulation Regions, Operat
Slide 49: Comprehensive Reform on Gaming
COMPREHENSIVE REFORM ON GAMING Concession rules Government, (AWP reduction, Reform on gaming: ADM ban advertising, technical issues, certification.. ) ▪ In August 2018, in the so called “Dignity Decree” disposals, the Central Government has planned a comprehensive reform on gaming to be completed wi
Slide 50: Effective Risk Management for Taxation Increase
EFFECTIVE RISK MANAGEMENT FOR TAXATION INCREASE Concession rules (AWP reduction, ▪ Gaming, fuel and tobacco are often subject to ban advertising, technical issues, certification,..) additional tax measures to fund national budget deficit Government, ▪ Gaming machines tax (PREU) produces ca. €6 bn on
Slide 51: Next Betting Tender Scenario
NEXT BETTING TENDER SCENARIO Concession rules (AWP reduction, ban advertising, technical Betting Tender: issues, certification,..) ▪ Current rights expired in June 2016 and postponed TAXATION year after year (now scheduled in 2019 Budget Law) ▪ Extension of betting rights in 2018 totaled €10m for Go
Slide 52: Other Concession Tenders Timetable
OTHER CONCESSION TENDERS TIMETABLE Concession rules Gaming Machines and Online (AWP reduction, ban advertising, technical ▪ No binary risk of renewal for Snaitech concessions issues, certification,..) Segment Expiry Concession Snaitech rights TAXATION AWPs Mar-22 Multi-providing ca. 39K (April 18) G
Slide 53: Snaitech Presentation Agenda
SNAITECH PRESENTATION AGENDA Positioning Business perspectives Regulatory Framework Financials Edo Rinaudo Fabio Schiavolin Agostino Romano Michele Sessa Snaitech CFO Snaitech CEO Gaming Machines Director Regulatory Affairs Alessandro Graziosi Director Retail Betting and Operations Director Alessand
Slide 54: Key Takeaway from Snaitech Financials
KEY TAKEAWAY FROM SNAITECH FINANCIALS Key Financial Strengths Drivers ▪ Margin constantly improving over last 3 years Growing EBITDA ▪ Stable growth in online segment ▪ Betting Network performance increasing ▪ Payout management as competitive advantage “Balanced” margin ▪ Balanced margin across diff
Slide 55: Snaitech Key Trends as of June 2018
SNAITECH KEY TRENDS AS OF 30 JUNE 2018 C O N S TA N T P R O G R E S S O F E B I T D A Financial KPIs show Snaitech solid growth in marginality: LTM EBITDA, Delta YoY ▪ LTM EBITDA up to €154,7m 154.7 145.9 136.2 ▪ €15.4m Net Result in H1-18 vs. €2m in 1H-17 118.0 116.1 116.4 ▪ €110m net cash generati
Slide 56: Sound Progression Since 2015
SOUND PROGRESSION SINCE 2015 A F T E R C O G E T E C H I N T E G R AT I O N €million Pro-forma EBITDA Margin 2015 2016 2017 LTM June 2018 EBITDA 45.0% Wagers 10,198 10,534 10,479 10,581 200,0 36.7% 154,7 150,0 127,1 136,2 Revenues 968.6 892.4 885.9 893.2 114,4 100,0 Net Revenues 312.2 326.2 324.6 34
Slide 57: H1 2018 Revenues & Cost Analysis
H1 2018 REVENUES & COST ANALYSIS “TRUE” MARGIN PROFILE REFLECTS HIGH QUALITY B2B2C MODEL IFRS Margin H1-18 Pass-through costs Restated Margin H1-18 €m €m Revenues 444.1 Net Revenues 169.8 Retailer fees -274.3 Cost of Sales -303.0 Provider fees -28.7 Provider & Conc. fees -28.7 Contribution Margin 14
Slide 58: H1 2018: Value Chain Breakdown
H1 2018: VALUE CHAIN BREAKDOWN MARGIN DRIVEN BY A BALANCED MIX OF DIFFERENT BUSINESSES Snaitech H1 2018, €m AWP VLT Ret. Betting Online Total Concessions Wagers 1.807,3 1.736,3 599,3 928,7 5.071,5 Payout (1.268,8) (1.522,9) (481,6) (868,2) (4.141,5) GGR 538,5 213,3 117,7 60,4 930,0 Taxes (343,4) (10
Slide 59: EBITDA Bridge 1H 2017 – 1H 2018
EBITDA BRIDGE 1H 2017 – 1H 2018 STRONG INCREASE IN EBITDA IN H1 2018: +€18.5M €m +7.0 -1.2 € million 74.0 74 +12.5 SNAITECH Group H1 18 H1 17 % +18.5 +4.5 organic 55.5 +0.2 +2.5 payout Wagers 5.323 5.222 1,9% +2.6 organic +4.3 organic -2.4 taxation +8.2 payout Revenues 444 437 1,7% Net Revenues 170
Slide 60: LTM Cash Flow as of June 2018
LTM CASH FLOW AS OF 30 JUNE 2018 € 11 0 . 6 M F R E E C A S H F L O W G E N E R AT I O N I N L A S T 1 2 M O N T H S ▪ €110.6m cash generation over last 12 months 154.4 154. (72% EBITDA) 4 ▪ €33.7m Capex: €9.9m for betting rights renewal, €110.6m €6m for vertical integration -33.7 -3.5 -5.1 -1.9 ▪ D
Slide 61: Strategic Drivers
STRATEGIC DRIVERS PAT H T O F U T U R E G R O W T H SNAITECH DRIVERS GROUP DRIVERS ▪ Development of Online business to strengthen cross-selling ▪ Wider integration Playtech – Snaitech, shall allow the Group: on retail channel & introduce new products & services by o to seize future opportunities in
Slide 62: Strong Medium Term EBITDA Growth
STRONG MEDIUM TERM EBITDA GROWTH GROWTH DRIVERS EXPECTED TO OUTWEIGH HEADWINDS €180m+ €136m Drivers: Headwinds: ▪ Online growth ▪ Taxation ▪ Playtech ▪ Restrictive local integration rules ▪ Vertical integration ▪ Videobet VLTs roll- out ▪ AWP remote introduction 2017 Medium term target Investor & An
Slide 63: Break
Break Refreshments served upstairs
Slide 64: Playtech BGT Sports
Playtech BGT Sports Dr Armin Sageder, CEO PBS
Slide 65: PBS Integration Update
PBS INTEGRATION UPDATE I N T E G R AT I O N C O M P L E T E & D E L I V E R I N G M O R E O P P O R T U N I T I E S ▪ One consolidated platform - best components ▪ Boost new business in Digital ▪ Harmonised & efficient development process ▪ Up-sell Digital Sportsbook ▪ Best practice analytics ▪ Migr
Slide 66: PBS Stakes, GGR & Margin
PBS STAKES, GGR & MARGIN C O N S I S T E N T LY O U T P E R F O R M I N G C O M P E T I T O R S C A S H B O X E S ▪ Retail Stakes & GGR growth driven by OPAP, UK Bookies & Codere (Spain) Sports YoY Retail Digital ▪ Digital Stakes & GGR growth: Caliente (Mexico), Stoiximan (Greece) & Spanish Stakes g
Slide 67: OPAP Greece: A Landmark WLA Project
OPAP GREECE A LANDMARK WLA PROJECT LAUNCH OF PBS TRADING SOLUTION LICENSE AGREEMENT PRE-MATCH GO-LIVE ON HEADS OF TERMS SIGNED SIGNED & SSBT ROLLOUT TILLS IN-PLAY GO-LIVE ON TILLS 13,500 BEPS Aug-17 Sep-17 Aug-18 Sep-18 Dec-16 Feb-17 Feb-18 Jul-17 Nov-17 Dec-17 Jul-18 May-17 Oct-17 May-18 Oct-18 Apr
Slide 68: UK Update
UK UPDATE S T I L L G R O W I N G & E V O LV I N G ▪ UK still growing through additional terminals in shops vs. rollouts as SSBTs become the betting channel of choice in shops. 8% YoY growth rate for the UK and Ireland (number of bet entry points). 17% growth in Stakes ▪ Further growth expected thro
Slide 69: PBS USPs
PBS USPs A STRONG MARKET POSITION ▪ Unrivalled Market Position in Land-based: Market Leader in the UK, Spain and Greece ▪ More than €800m Stakes per Month – Retail and Digital combined ▪ Over 120 partners in 30+ different countries across 4 continents ▪ Retail solutions for all regulated environment
Slide 70: Key Achievements 2018 - Retail
KEY ACHIEVEMENTS 2018 - RETAIL R O A D M A P F O R C O N T I N U E D I N N O VAT I O N I N R E T A I L E X P E R I E N C E ▪ MatchAcca: Enables customers to combine multiple markets within the same event to create an accumulator bet with one specific price. Encourages higher margin betting ▪ Matchda
Slide 71: Key Achievements 2018
KEY ACHIEVEMENTS 2018 F R O N T E N D D I F F E R E N T AT I O N Investor & Analyst Day 2018 71
Slide 72: Sales Strategy & Target Markets
SALES STRATEGY & TARGET MARKETS Expand into Emerging Markets (regulated markets only) Strengthen position in key regulated markets and utilise growth potential ▪LATAM ▪Africa ▪ UK & Ireland ▪Asia ▪ Spain North America ▪ Greece & Southern Europe ▪United States ▪ Austria (esp. B2C) ▪Canada ▪ Mexico RF
Slide 73: US Strategy
US STRATEGY S U P E R I O R P R O D U C T & S T R AT E G I C F L E X I B I L I T Y ▪ Parallel rollout in select phase 1 states pending NJ transaction waiver (to be issued soon), already engaging phase 2 states and forming strategic alliances ▪ Customers will range from individual opportunities to st
Slide 74: Retail: Stakes, GGR, Bet Entry Points & Monthly Actives
RETAIL S T A K E S , G G R , L A N D B A S E D B E T E N T R Y P O I N T S & M O N T H LY A C T I V E S 400 € 80,000 Millions Jun-18, 72,918 350 € 70,000 300 € 60,000 Stakes and GGR [€] 250 € Oct-18, 46,388 50,000 Active Nodes [n] 200 € 40,000 150 € 30,000 100 € 20,000 50 € 10,000 0€ 0 Jan-12 Jan-10
Slide 75: Key Achievements 2018 - Digital
KEY ACHIEVEMENTS 2018 - DIGITAL P R O D U C T I N N O VAT I O N & I N C R E A S E D D I S T R I B U T I O N ▪ US Market Readiness: Americanization of the Online Sportsbook to cater for a new market ▪ American Style Odds (+120, -190) ▪ American style event presentation (home @ away) ▪ Introduction of
Slide 76: 2018 Operator Launches - Digital
2018 OPERATOR LAUNCHES - DIGITAL CONTINUED GROWTH IN DISTRIBUTION Investor & Analyst Day 2018 76
Slide 77: Digital: Stakes, GGR & Active Users
DIGITAL S TA K E S , G G R , & A C T I V E U S E R S 500 € 700,000 Millions 450 € Jun-18, 576,377 600,000 400 € 350 € 500,000 Stakes and GGR [€] Active Nodes [n] 300 € 400,000 250 € 300,000 200 € 150 € 200,000 100 € 100,000 50 € 0€ 0 Sep-16 Sep-17 Sep-18 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Mar
Slide 78: PBS Digital: Stakes, GGR & GGR Margin
PBS DIGITAL 500 € S TA K E S , G G R , & G G R M A R G I N 12.0% Millions 450 € 10.0% 400 € 350 € 8.0% Stakes and GGR [€] 300 € GGR Margin% 250 € 6.0% 200 € 4.0% 150 € 100 € 2.0% 50 € 0€ 0.0% Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb
Slide 79: Regulation & Compliance
Regulation & Compliance Ian Ince, Head of Regulatory Affairs
Slide 80: UK: Increased Compliance & Regulation
UK I N C R E A S E D C O M P L I A N C E & R E G U L AT I O N ▪ More than £21m in 2018 fines to date ▪ FOBT - October 2019 ▪ 21% POC ▪ Source of funds at registration, affordability, onboarding – April 2019 ▪ Voluntary Advertising Ban ▪ Online stakes and prizes – not in 2019 but maybe 2020 Investor
Slide 81: Rest of Europe
REST OF EUROPE T R E N D T O W A R D S I N C R E A S E D R E G U L AT I O N ▪ Sweden – Q1 2019 ▪ Switzerland – Q1 2019 ▪ Netherlands – Still pending ▪ France – potential for change but politically slow ▪ Italy - advertising ban Investor & Analyst Day 2018 81
Slide 82: Asia
ASIA S TA B L E Philippines: ▪ Fully certified ▪ Taxed and recognised ▪ Not a ‘Monopoly’ China: ▪ No significant changes ▪ Regulation still someway off Malaysia: ▪ No change Investor & Analyst Day 2018 82
Slide 83: LATAM
LATAM P O S I T I V E M O M E N T U M I N V E R Y AT T R A C T I V E M A R K E T S Brasil: ▪ New President - nothing before Q3 2019 ▪ Lotteries discussed in Congress & Sports included Chile: ▪ Retail strong, online potential 2021 Peru: ▪ Good regulations ▪ Waiting for online Bill in Congress Q3/4 20
Slide 84: USA
USA R E G U L AT I O N I S A M A R AT H O N N O T A S P R I N T ▪ New Jersey ▪ Mississippi ▪ Pennsylvania ▪ New York Investor & Analyst Day 2018 84
Slide 85: Responsible gambling
Responsible gambling Simo Dragicevic, BetBuddy CEO
Slide 86: Regulatory Environment
REGULATORY ENVIRONMENT C O N T I N U E D R E G U L AT O R Y F O C U S O N C O N S U M E R P R O T E C T I O N I N 2 0 1 8 Investor & Analyst Day 2018 86
Slide 87: Competitive Environment
COMPETITIVE ENVIRONMENT I N D U S T R Y T R Y I N G T O A D A P T & E V O LV E T O N E W M A R K E T D Y N A M I C S Investor & Analyst Day 2018 87
Slide 88: What is BetBuddy?
WHAT IS BETBUDDY? DELIVERING PROACTIVE HARM PREVENTION ▪ Applied Artificial Intelligence (AI) to understand consumer risk ▪ BI product integrated within the Playtech ONE platform ▪ Drives highly personalised and brand-positive customer interactions ▪ Helps operators to meet increasing regulatory req
Slide 89: Playtech's Unique Advantage
PLAYTECH’S UNIQUE ADVANTAGE S O LV I N G A C O M P L E X A N D I N C R E A S I N G LY C R I T C A L I N D U S T R Y C H A L L E N G E ▪ Differentiator to B2B competitors: enabling licensees to navigate regulatory headwind & adapt their business models ▪ Customisable models enable targeting of player
Slide 90: Playtech Engagement Centre
PLAYTECH ENGAGEMENT CENTRE U S I N G D AT A T O D E L I V E R R E L E VA N T & S M A R T E R I N T E R A C T I O N S Investor & Analyst Day 2018 90
Slide 91: Data-Driven Engagement
DATA-DRIVEN ENGAGMENT U S I N G D AT A T O D E L I V E R R E L E VA N T & S M A R T E R I N T E R A C T I O N S BetBuddy / IMS Engagement Platform Portal Balanced Leisure Time Campaign (High Risk Players) BetBuddy Responsible Gambling Playtech ONE 24/10/2018 Assess effect on dwell time Investor & An
Slide 92: Data-Driven Engagement
DATA-DRIVEN ENGAGMENT P E R S O N A L I S I N G R E S P O N S I B L E G A M B L I N G T O E N H A N C E B R A N D A N D L O YA LT Y Moving from general RG awareness To highly personalised and Made possible by explainable AI that campaigns targeted interactions is integrated with engagement tools Inv
Slide 93: Focus for 2019
FOCUS FOR 2019 C O N T I N U E D I N V E S T M E N T I N D AT A - D R I V E N C A PA B I L I T I E S & R & D ▪ Deployments with Playtech and licensee B2C brands ▪ Deeper Playtech ONE integrations ▪ Slots classification to increase operator, player, and regulator education ▪ Continued R&D in AI e.g.,
Slide 94: Wrap-up
ma bes London RE Stock Exchange LISTED PREMIUM Wrap-up Mor Weizer, CE
Slide 95: Short Term Deliverables
SHORT TERM DELIVERABLES ADDRESSING THE FOCUS POINTS OF THE MARKET ▪ Capital allocation – balancing ▪ Sun Bingo - path towards value demands ▪ Asia - stabilisation ▪ Snaitech - educate & deliver ▪ GVC - deliver clarity on long term ▪ US opportunity - demonstrate clear relationship strategy & progress
Slide 96: Capital Allocation
CAPITAL ALLOCATION B A L A N C E S H E E T S T R E N G T H & H I G H C A S H G E N E R AT I O N P R O V I D E O P T I O N A L I T Y ▪ 2018 has seen Playtech deliver far greater balance sheet efficiency ▪ sale of holdings in both GVC and Plus500 ▪ successful refinancing of Snaitech acquisition with €
Slide 97: Today's Key Takeaways
TODAY’S KEY TAKEAWAYS L E A D I N G T H E W AY I N R E G U L AT E D M A R K E T S ▪ Strategy to focus on distribution, innovation & data capabilities delivering advantage in target markets of Europe, LATAM & US ▪ Snaitech delivers online & retail distribution in largest European market ▪ Unrivalled
Slide 98: Q&A
Q&A Investor & analyst day 2018