Playtech Plc · LSE:PTEC
Playtech — Investor Day (September 2022)
49 slides from Playtech's investor day presentation, Sep 22, 2022
Slide 1: Investor & Analyst Day
Investor & Analyst Day London, 22 September 2022
Slide 2: Snaitech Presentation Agenda
Snaitech Presentation Agenda 2 Business Snaitech overview Financials Growth strategy perspectives Fabio Schiavolin Agostino Romano Edo Rinaudo Fabio Schiavolin CEO Retail Director CFO CEO Alessandro Graziosi Online Director
Slide 3: Snaitech today
Snaitech today 3 Kept all promises from 2018 investor meeting From Investor Presentation Nov. 2018 Promises kept: €180m+ €136m H1-22 EBITDA: €132m, LTM EBITDA: €263m vs. €180m+ set as medium-term target in Nov. 2018 2017 Medium term target SNAI brand leader both in online and in sports betting (
Slide 4: Snaitech current trading
Snaitech current trading 4 Business trend KPIs and business trend: Full recovery of Retail business performance (c. 50% of total EBITDA in H1 2022) Retail Betting license extended for 2 years (expiry June 2024, €11.5m capex per year) Gaming Machines rights extended for free until June 2023 (to
Slide 5: Snaitech Financial KPI
Snaitech Financial KPI 5 Value creation and business model transformation • LTM EBITDA € 263m, more than doubled vs 2016 (o/w +€ 100m vs 2019 pre-covid result) • EBITDA mix change: balanced breakdown by channel and by product • EBITDA mix evolution along different steps of Snaitech journey: Gaming M
Slide 6: Snaitech assets in nutshell: a gaming and entertainment leader in Italy
Snaitech assets in nutshell: a gaming and entertainment leader in Italy 6 Creating a sustainable and diversified business 11% 10,6k VLTs Proprietary People Scalable market share #1 38,6k AWPs TV and and Tech Platform racetracks Online Sports Betting Gaming Machines Entertainment Resources M&A track
Slide 7: Italian Market: online penetration accelerated by extended lockdown
Italian Market: online penetration accelerated by extended lockdown 7 Italy confirmed as the largest market in Europe vs. 2019 2022E GGR, Bln € 25,0 20,3 Italy, GGR Bln € 20,3 +2% 20,0 18,0 20,0 5,6 5,4 +3% 14,6 13,0 15,0 2,1 3,7 +74% 4,5 5,2 8,3 10,0 2,8 3,8 12,3 11,2 -8% 5,0 5,9 5,4 - Spain France
Slide 8: Snaitech pre/post lockdown performance
Snaitech pre/post lockdown performance 8 Solid after COVID and balanced across all profitable segments 6.567 6.533 H1 2019 H1 2022 3.544 2.851 Italian on tot. 54% 1.530 on tot. 44% 1.222 1.069 Market 653 738 on tot. 620 376 497 on tot. on tot. 23% on tot. 19% on tot. on tot. 16% on tot. on tot. 11%
Slide 9: Snaitech differentiating approach for a sustainable growth
Snaitech differentiating approach for a sustainable growth 9 Omni-channel and Cross-selling strategy to leverage retail presence snai casino Best-In_game sn4ifu sport games n The most comprehensive The app for fun that allows online apps range of mobile apps on the Italian market to communicate the
Slide 10: Technology, Partners and Franchisees in Snaitech strategy for growth
Technology, Partners and Franchisees in Snaitech strategy for growth 10 Balanced mix of make-or-buy strategies Distribution Channel Snaitech in-house platforms Strategic Partnerships Full Betting Platform Smart Technology® Retail Betting Real time risk Back Office: MyWEB Distribution Franchisee mana
Slide 11: Happybet integration with Snaitech
Happybet integration with Snaitech 11 International development based on betting proprietary technology Happybet acquisition in Q3-22 represents the first step of Snaitech international expansion HappyBet owns betting licenses (retail and online) in Germany and Austria and manages c. 130 betting
Slide 12: Italian regulatory framework
Italian regulatory framework 12 Gaming Tax increases introduced from 2018 on Gaming Machines Progressive Taxation (PREU) increase on Gaming Machines: Annual increases in Gaming Machine taxation introduced in 2018 - 2020 Parallel Payout reduction allowed on AWPs and VLTs to mitigate tax impact
Slide 13: Expected framework the next concession renewal
Expected framework the next concession renewal 13 €250-300m expected renewal capex Snaitech current concessions: Concession Issued rights Snaitech rights Expiry Annual fee AWPs 265K 38.6K Jun-23 None VLTs 57K 10.6K Jun-23 None 5.3K shops 770 shops Retail Betting Jun-24 €11.5m from July 2022 4K corne
Slide 14: San Siro Asset in Milan
San Siro Asset in Milan 14 A valuable real estate asset for Snaitech 1,500,000 m2 area with historical assets: • San Siro gallop horse track, Milano • Gallop training track, Milano • Montecatini trot horse track, Tuscany The Snaitech racecourses hosting important events: • Milano Summer Festival • L
Slide 15: Social responsibility
Social responsibility 15 Snaitech commitment to Social Responsibility & Good Causes Institutional Partnerships Collaboration with institutional bodies for research projects related to the territory, such as: MIP Politecnico, Municipality of Milan / Municipality of Montecatini Terme, FAI (Italian Env
Slide 16: Snaitech Presentation Agenda
Snaitech Presentation Agenda 16 Business Snaitech overview Financials Growth strategy perspectives Fabio Schiavolin Agostino Romano Edo Rinaudo Fabio Schiavolin CEO Retail Director CFO CEO Alessandro Graziosi Online Director
Slide 17: Snaitech retail network
Snaitech retail network 17 10.150 Gaming Machines PoS, 2.070 Betting PoS Snaitech retail network consistency 2022 June LTM Wagers breakdown and distribution NGR share % OF TOTAL WAGERS AWPs AWPs 17% • 9,000 PoS • 75% 3th party operated (o/w c. 1,300 betting points) 51% North 43% • 25% owned machines
Slide 18: Italian gaming machines market
Italian gaming machines market 18 Snaitech performance €/Milions Lockdown 6 m Lockdown 6 m AWP 2019 2020 2021 H1 2022 LTM Snaitech performance has been WAGERS 3.468 1.613 1.476 1.295 2.669 stable and resilient GGR 1.078 540 513 450 928 notwithstanding adverse market NET REVENUES 51,9 27,5 27,4 24,6
Slide 19: Tax increase and Payout management on gaming machines
Tax increase and Payout management on gaming machines 19 Virtuous payout and content management • Venue opening time restrictions varying • Growth of PREU taxation • Pandemic Impact: total lockdown from municipality to municipality Mar20 – Jun 20; Oct20-Jun21 • Win Tax effect • More regional restric
Slide 20: Vertical integration
Vertical integration 20 Direct AWP: strategic rationale AWP with 3rd parties (75% of Snaitech network) Owned AWP 50% 40% 10% Lockdown Lockdown 6m 6m Retailers 3° Parties Operators Snaitech AWP 2018 2019 2020 2021 LTM 22 Net revenues 13,0 15,3 8,8 9,9 18,9 €m • AWP licenses and asset acquisition #AWP
Slide 21: Retail betting market
Retail betting market 21 Snaitech performance Lockdown 6 m Lockdown 6 m BETTING 2019 2020 2021 H1 2022 LTM WAGERS 1.266.362 700.129 627.618 633.234 1.225.077 GGR 235.904 150.219 115.245 125.108 232.167 Net Revenues 95,6 64,8 47,2 52,7 96,7 #PoS 1.584 1.574 1.560 1.555 1.555 After lockdown less tha
Slide 22: Sports trading management
Sports trading management 22 Snaitech delivering better payout performance than market RETAIL 2019 2020 2021 H1 2022 82,26% 77,53% 81,23% 79,06% MARKET 81,87% 77,95% 81,20% 79,38% ONLINE 2019 2020 2021 H1 2022 87,54% 85,55% 85,39% 85,33% MARKET 90,60% 88,00% 87,89% 87,92% TOTAL 2019 2020 2021 H1 202
Slide 23: Product offering and positioning
Product offering and positioning 23 Retail gaming machines Lottomatica Others H1 ‘19 14,8% 18,4% 11,9% 12,1% 8,5% 8,0% 26,3% H1 ‘22 15,0% 18,3% 12,0% 12,0% 8,7% 8,0% 26,0% Source: Snaitech internal estimates AWP GAMING MACHINE VLT
Slide 24: Product offering and positioning
Product offering and positioning 24 Retail betting Virtual Events Lottomatica Others Sport Lottomatica H1 ‘19 18,0% 6,5% 4,8% 28,3% 13,4% 15,3% 1,8% 12,0% Others H1 ‘22 17,0% 6,1% 8,8% 22,8% 15,1% 14,9% 6,3% 8,9% Horses Racing H1 ‘19 16,7% 13,4% 8,8% 12,1% 12,8% 15,0% 9,5% 11,7% Lottomatica Others H
Slide 25: Technology and Innovation
Technology and Innovation 25 Proprietary Technology and Market Know-How Innovation Project Smart Technology® Snaigo Snaigo • Betsmart: 3,300 self service betting The new way to bet on the retail terminals currently installed in Snaitech network. Snaigo is the new way to network: bet acceptance, info
Slide 26: Retail network management
Retail network management 26 An ongoing critical activity to maximize network performances Point of sales Snaitech aims to constantly improve its network RENOVATED OPENING performances through: 211 287 Asset management: via new selected openings and bidding on competitor best PoS both for VLTS and
Slide 27: Retail strategy for growth
Retail strategy for growth 27 A sustainable revenue stream AWP & VLT GAMING MACHINE Asset management of Snaitech low performing VLTs and AWPs AQUISITIONS Get prepared to introduction of Mini VLT M&A Synergic development of new performing content with Playtech studios Focused vertical integra
Slide 28: Snaitech Presentation Agenda
Snaitech Presentation Agenda 28 Business Snaitech overview Financials Growth strategy perspectives Fabio Schiavolin Agostino Romano Edo Rinaudo Fabio Schiavolin CEO Retail Director CFO CEO Alessandro Graziosi Online Director
Slide 29: Snaitech digital (LTM 2022)
Snaitech digital (LTM 2022) 29 ~600.000 active accounts Snaitech players 2022 June LTM GGR breakdown and distribution # Products Betting Sport Active accounts 522K % of total GGR 44% LTM GGR €209m North Virtual Mobile: 84,7% 40% 56% Horse Racing Gender: Female 14% Slots 35% Market 52
Slide 30: Snaitech digital progress
Snaitech digital progress 30 Delivering leading online player Players GGR 450,000 140,000,000 400,000 L L 120,000,000 L L 350,000 O O O O 100,000,000 300,000 C C C C 250,000 80,000,000 K K K K 200,000 D D 60,000,000 D D 150,000 O O 40,000,000 O O 100,000 W W W W 20,000,000 50,000 N N N N - - H1-2019
Slide 31: Online acquisition through retail
Online acquisition through retail 31 In addition to online acquisition, Snaitech is able to leverage retail Acquisition Uniques Churn ARPU Total GGR CUSTOMERS 16,773 94,203 21% € 1,502 € 142 M 2022 from RETAIL LTM PURE ONLINE CUSTOMERS 189,116 502,787 46% € 469 € 235 M Cross-selling highlights Com
Slide 32: Product offering and positioning
Product offering and positioning 32 Online Betting H1 ‘19 12,09% 5,97% 8,53% 9,08% 1,81% 1,50% 9,57% 2,94% 15,60% 12,27% H1 ‘22 14,49% 5,06% 10,97% 13,60% 1,32% 0,84% 10,04% 1,99% 10,41% 9,92% Market share increased in every vertical: Sports + 2,1% Virtual + 7,9% Horse racing + 0% 80k stre
Slide 33: Product offering and positioning
Product offering and positioning 33 Online Games H1 ‘19 6,39% 7,81% 3,45% 16,32% 7,69% 0,97% 1,36% 6,10% 5,02% 5,51% H1 ‘22 8,37% 7,30% 5,19% 11,49% 8,43% 0,68% 1,56% 5,93% 3,78% 6,55% Market share Increased of c. 2 points 2° on Casino vertical (90% of Games’ GGR) New tailor-made marketing str
Slide 34: The next stage of growth
The next stage of growth 34 Organic growth Renewal of the digital technological infrastructure with a “data lake” approach to improve customization of offering and warranty scalability for every front end/geography Brand new AI driven website AI based tool to prevent compulsive behavior Gami
Slide 35: Italian Online: a fragmented market
Italian Online: a fragmented market 35 Inorganic growth opportunity • 79 active concessions • Snaitech 1° brand with 10,87% market share • 15 operators concentrating ~80% of the market • 60+ operators with a market share lower than 1% each, offering a potential M&A opportunity for Snaitech growth Sn
Slide 36: Snaitech Presentation Agenda
Snaitech Presentation Agenda 36 Business Snaitech overview Financials Growth strategy perspectives Fabio Schiavolin Agostino Romano Edo Rinaudo Fabio Schiavolin CEO Retail Director CFO CEO Alessandro Graziosi Online Director
Slide 37: Keywords and takeaways from business performance
Keywords and takeaways from business performance 37 From business KPI to financial KPI Takeaway from business review Financial drivers Online migration Online: stable growth sustained by digital acquisition and cross-selling Cross selling Retail: revenue and margin protection Strong brand
Slide 38: Snaitech: €132m EBITDA in H1-22 vs €52m in H1-21
Snaitech: €132m EBITDA in H1-22 vs €52m in H1-21 38 Snaitech H1 2022 H1 2021 Diff. % GGR 945 261 684 >100% €132m EBITDA vs. €52m in H1 2021 (impacted by 5.5- Gaming machines 624 50 574 >100% Retail betting 125 8 117 >100% month lockdown) Online games 90 79 11 14% Online betting 107 125 (18) -14%
Slide 39: LTM performance: quarterly EBITDA trend
LTM performance: quarterly EBITDA trend 39 Balance between Retail-Online and Betting-Gaming €m Retail Online Snaitech LTM Q3 21 Q4 21 Q1 22 Q2 22 LTM Betting Betting 23% 29% Quarterly EBITDA 51,2 79,8 69,5 62,2 262,7 Gaming machines 15,6 23,9 16,2 18,0 73,6 LTM Retail betting 8,3 20,5 16,6 13,9 59,3
Slide 40: 2016 – 2022 LTM EBITDA: impressive growth and change on mix
2016 – 2022 LTM EBITDA: impressive growth and change on mix 40 EBITDA more than doubled since 2016, Online EBITDA c.7x Online EBITDA Snaitech EBITDA, €m 262.7 Retail EBITDA +39% +9% 182.8 129,8 159.6 162.6 15% 127.1 141.1 37,5 45,7 131.9 49% 28,1 51% 19,2 135,3 85% 87,7 122,2 116,9 132,9 107,9 112,9
Slide 41: EBITDA bridge 2016 - 2019 – 2022 LTM
EBITDA bridge 2016 - 2019 – 2022 LTM 41 Drivers of marginality €m 2016 2019 LTM 22 16.4 Snaitech GGR 1.835 1.928 1.882 Retail 1.757 1.761 1.505 Online 78 167 377 102.7 +7.2 -11.7 +39.8 -18.8 262.7 ∆GGR ∆GGR ∆GGR ∆GGR 162.4 Retail: Online: 127.1 Retail: Online: -256.6 +210.4 +4.0 +88.8 €m 2016 ∆Retai
Slide 42: Online segment largely more profitable for Snaitech
Online segment largely more profitable for Snaitech 42 GGR switch from retail to online betting will raise marginality by 30% GGR %split per vertical Net Revenue increase Gaming Betting 17% 20% 12% Bonus Lockdowns and following covid restrictions on retail, accelerated Retail to Online switch 55%
Slide 43: From EBITDA to cash generation
From EBITDA to cash generation 43 Snaitech additional drivers supporting outstanding cash generation Drivers: Annual average capex since 2017: €32.0m Reduced Proprietary technology Ordinary / maintenance: € 18,1m CAPEX Franchise model in retail M&A / Bolt on acquisitions: € 7.2m Targeted M
Slide 44: Outstanding Cash Generation
Outstanding Cash Generation 44 Snaitech showing strong cash generation also under covid restrictions €m FCF 183 263 EBITDA 160 163 206 -20 (78%) 141 174 132 132 -33 -3 121 105 92 124 LTM 96 cash generation LTM Delta Capex + Tax LTM Cash 2017 2018 2019 2020 2021 H1-22 (6m) WC costs below EBITDA paid
Slide 45: Snaitech Presentation Agenda
Snaitech Presentation Agenda 45 Business Snaitech overview Financials Growth strategy perspectives Fabio Schiavolin Agostino Romano Edo Rinaudo Fabio Schiavolin CEO Retail Director CFO CEO Alessandro Graziosi Online Director
Slide 46: Snaitech pillars to support organic growth
Snaitech pillars to support organic growth 46 Organic EBITDA target €300-350m in the medium term Covid “lesson”: lockdown showed the resilience of Snaitech profitability: balance between different business components, online constant growth, lean cost structure Online traction: lockdown accelera
Slide 47: Potential headwinds on Snaitech path
Potential headwinds on Snaitech path 47 Market Consolidation: a threat and an opportunity Recent M&A activity in Italy built up new leaders in Online (Flutter) and Retail (Apollo) All main European players already present in the attractive Italian market Increasing competition level may influe
Slide 48: What strategy for Snaitech to create additional value?
What strategy for Snaitech to create additional value? 48 Strategy drivers for Snaitech: Rationale: • Strong pillars to support further “inertial” growth 1 1. Fully exploit «ordinary» and growing path • Bolt-on acquisitions in Italy • Medium term Target EBITDA: > €300m (o/w 60% Online) 1. 2 Happybet
Slide 49: Snaitech Investor and Analyst Day
Snaitech Investor and Analyst Day 49 London, 22 September 2022