Playtech Plc · LSE:PTEC

Playtech — Investor Day (November 2016)

55 slides from Playtech's investor day presentation, November 2016

  1. Slide 1: Technology driving the customer journey

    Technology driving the customer journey Investor & Analyst Event Tel Aviv, November 2016

  2. Slide 2: Today's Agenda

    TODAY’S AGENDA 2.00 pm to 2.30 pm Mor Weizer Technology driving the customer journey 2.30 pm to 3.00 pm Google Industry trends 3.00 pm to 3.30 pm Armin Sageder BGT and Sport: a clear strategy 3.30 pm to 3.45 pm BREAK 3.45 pm to 4.15 pm Shimon Akad Innovation 4.15 pm to 4.45 pm Ian Ince Understanding

  3. Slide 3: Today's Key Takeaways

    TODAY’S KEY TAKEAWAYS  The quality and breadth of Playtech’s technology driven offering is unrivalled  We have a clear strategy for Sport, with a fully integrated offering from retail to online to mobile, with a single back-end  Our scale allows us to invest an unmatchable amount into R&D, furthe

  4. Slide 4: A Reminder of the Key Pillars of Our Strategy

    A REMINDER OF THE KEY PILLARS OF OUR STRATEGY 1 1. Support organic growth 4 4. Increasing product, service and distribution capabilities 2 2. Cross-sell products and services 5 Improve quality of earnings 3 3. Attract new licensees 6 Acquisitions remain key Investor & Analyst Day 2016 4

  5. Slide 5: Technology Driving the Customer Journey

    TECHNOLOGY DRIVING THE CUSTOMER JOURNEY Non-land based Customer acquisition Mobile Tablet Land-based and retention Web TV Tills Brand SSBT Retail presence FOBT On-line marketing Bingo handhelds - Affiliates / SEO - Google / Facebook Algorithm based CRM Investor & Analyst Day 2016 5

  6. Slide 6: Platform and Infrastructure

    PLATFORM AND INFRASTRUCTURE ARCHITECTURE IS CRITICAL Investor & Analyst Day 2016 6

  7. Slide 7: Platform and Infrastructure: Playtech's Offering

    PLATFORM AND INFRASTRUCTURE P L AY T E C H ’ S O F F E R I N G WALLET PERSONALISATION CONTENT CRM & LOYALTY USER ONE wallet, & COMMUNICATION Play any product, all Automated data-driven, EXPERIENCE ONE view, Bespoke player channels, locations real-time, BI marketing Seamless, responsive, ONE platform

  8. Slide 8: Platform and Infrastructure: The Alternatives

    PLATFORM AND INFRASTRUCTURE T H E A LT E R N AT I V E S In-house build Investor & Analyst Day 2016 8

  9. Slide 9: Verticals and Content

    VERTICALS AND CONTENT P L AY T E C H ’ S O F F E R I N G Investor & Analyst Day 2016 9

  10. Slide 10: Verticals and Content: Playtech's Offering

    VERTICALS AND CONTENT P L AY T E C H ’ S O F F E R I N G  True omni-channel games  Market leading content  600+ games  50+ new games each year  60+ branded  localised content  Progressive jackpots  20,000 won every month  €156m paid out in 2015  Largest “tappable” Poker and Bingo liquidity

  11. Slide 11: Verticals and Content: The Alternatives

    VERTICALS AND CONTENT T H E A LT E R N AT I V E S Casino Sports Poker Bingo Investor & Analyst Day 2016 11

  12. Slide 12: B2B to B2C… and Everything Inbetween

    B2B TO B2C… AND EVERYTHING INBETWEEN THE POWER OF SERVICES B2B B2C Asia Investor & Analyst Day 2016 12

  13. Slide 13: Today's Key Takeaways

    TODAY’S KEY TAKEAWAYS  The quality and breadth of Playtech’s technology driven offering is unrivalled  We have a clear strategy for Sport, with a fully integrated offering from retail to online to mobile, with a single back-end  Our scale allows us to invest an unmatchable amount into R&D, furthe

  14. Slide 14: BGT and Sport: A clear strategy

    BGT and Sport A clear strategy Dr. Armin Sageder Playtech BGT Sports Group

  15. Slide 15: Winning isn't everything, it's the only thing

    “WINNING ISN‘T EVERYTHING, IT‘S THE ONLY THING“ Vince Lombardi Investor & Analyst Day 2016 15

  16. Slide 16: An Integrated Offering

    AN INTEGRATED OFFERING Investor & Analyst Day 2016 16

  17. Slide 17: BGT's Standalone Business Model

    BGT’S STANDALONE BUSINESS MODEL Investor & Analyst Day 2016 17

  18. Slide 18: "100" Value Chain Analysis

    “100” VALUE CHAIN ANALYSIS Sales Channel Backoffice Tools IT Operation Feeds / Data / Frontends Sportsbook (Bonus, CMS, HW Stability; payment Landbased Backend CRM, Trading, Financing Scalabilty interfaces (Public) Retail Mgt., etc.) Digital (private) 100% of possible Core competence Complexity Marg

  19. Slide 19: BGT Competitors

    BGT COMPETITORS And some smaller suppliers for digital sportsbooks:  BetConstruct  SBTech  Kambi Investor & Analyst Day 2016 19

  20. Slide 20: BGT Betting KPIs

    BGT BETTING KPIS TURNOVER AND HOLD ON LH AXIS, NODES ON RH AXIS 180,000 Sum of betting turnover 25,000 160,000 Sum of hold 22,500 140,000 Sum of all active nodes landbased 20,000 Active nodes 120,000 EUR (000s) 17,500 100,000 15,000 80,000 12,500 10,000 60,000 7,500 40,000 5,000 20,000 2,500 0 0 Sep

  21. Slide 21: Massive Opportunities Ahead!

    MASSIVE OPPORTUNITIES AHEAD! €4.5BN OF “HOLD” PER ANNUM  There are many large and successful operators which have huge land-based businesses  Opportunities exist across Europe with significant “Hold“  Greece: > €400m  Italy: > €600m  Spain and LATAM: > €800m  Russia: > €500m  UK / Ireland: >

  22. Slide 22: Our Strategy for Sports

    OUR STRATEGY FOR SPORTS A C L E A R S T R AT E G Y F O R G R O W T H  Focus on core comptences and high margin areas  One Playtech-BGT Sports Platform  Invest into backoffice GUIs / bonus engines  Keep strategic front-ends in-house  Ensure exclusive content / data strategy  Outsource integrati

  23. Slide 23: Remain an Unbranched Platform

    REMAIN AN UNBRANCHED PLATFORM Frontend Development Services line Backend Modulare software Kunden spezifische architecture Operator mögliche Anpassung …leads to… Product innovation / time Specific costs for client / innovation 1 100 (number of clients) Investor & Analyst Day 2016 23

  24. Slide 24: Strategic Pillars

    STRATEGIC PILLARS P E R F O R M A N C E , H O N E S T Y A N D PA S S I O N  Bundle resources in BGT / Geneity / Mobenga / Betologic  Take the Omni-channel projects from brick to click (not vice versa)  Big markets are the focus - we are THE global powerhouse when it comes to sports betting techno

  25. Slide 25: An Integrated Offering

    AN INTEGRATED OFFERING Investor & Analyst Day 2016 25

  26. Slide 26: Never standing still

    Never standing still Shimon Akad, COO

  27. Slide 27: A Proud History of Innovation (1999-2011)

    A PROUD HISTORY OF INNOVATION 1999 2003 2006 2009 2011 DEDICATED SITES PT PRIVATE CLOUD RING FENCING SINGLE BALANCE WALLET OAS MULTI-BALANCE WALLET FUND TRANSFER EXTERNAL WALLETS MULTI SESSION GAMING SERVERSIDE SINGLE SESSION GAMING FRAUD SERVICE CRYPTO SERVICE & PCI COMPLAINCE CERTIFICATES MANAGEME

  28. Slide 28: A Proud History of Innovation (2013 onwards)

    A PROUD HISTORY OF INNOVATION 2013 2015 2016 ONWARDS MEGASITES CLOUD DISTRIBUTED CLOUD QUICKLINK CASINO QUICKLINK SPORTS QUICKLINK SPORTS FREE SPINS POKER PREWAGER BONUS CROSS PRODUCE BONUSES CAMPIGN MANAGER EXTERNAL WALLET ADAPTERS UK REGULATION CROSS PRODUCT LOYALTY SPORT OPTIMIZED GAMING CENTRAL

  29. Slide 29: The Gaming Experience

    THE GAMING EXPERIENCE T U R N I N G M AT H S I N T O A R T  Gaming is about entertainment, its about user experience combined with pure mathematical models  Common slots have a return-to-player (“RTP”) of between 80% to 96%  This will vary depending on the audience and market  A game RTP is bein

  30. Slide 30: Introducing Corosin

    INTRODUCING COROSIN A N E N G I N E T O M A R R Y T H E I M A G I N AT I O N  There are multiple of studios world wide which are continuously looking to create slots but not necessarily the slot engine/ platform it self  There is a gap in the market for platform on which games can be produced  Co

  31. Slide 31: Sports as an Acquisition Channel

    SPORTS AS AN ACQUISITION CHANNEL MAXIMISING RETURNS FROM TRAFFIC  Reducing number of clicks from Sports to Casino  Introduced table games to Sports desktop – c.20% of traffic  Introduced table games on mobile Sports – c.50% of traffic 13 Jun 16 27 Jun 16 03 Oct 16 17 Oct 16 31 Oct 16 02 May 16 16

  32. Slide 32: The Evolution of Mobile Gaming

    THE EVOLUTION OF MOBILE GAMING A M O B I L E F I R S T C O M PA N Y  The gaming industry was slow moving to mobile  The move in then happened fast for betting  Mobenga was a major part of this  Transition to mobile is part of a longer process where games were written in C++, and then in Flash an

  33. Slide 33: Bet365's New Native Mobile Casino App

    BET365’S NEW NATIVE MOBILE CASINO APP A H I G H LY S U C C E S F U L L A U N C H  Complementary to HTML5 products  Research suggests that 89% (vs. c.11% browser) of time on mobile is spent in-app  Significant increase in number of sessions due to speed of loading  Native works better when connec

  34. Slide 34: Playtech's New Architecture

    PLAYTECH ’S NEW ARCHITECTURE T A K I N G O U R P R O D U C T S I N T O T H E D AT A A G E Investor & Analyst Day 2016 34

  35. Slide 35: Real-Time Analytics

    REAL-TIME ANALYTICS IMPROVING ROI PER CUSTOMER  The new architecture is there to support real time data so that we can excel with personalization and improved ROI per customer  Reacting in real-time to retain the customer  A multi trigger campaign manager takes to the next level Investor & Analys

  36. Slide 36: Stability and Scalability

    STABILITY AND SCALABILITY O V E R 7 0 0 M I L L I O N G A M E S P E R D AY R E A C H E D I N O C T O B E R 700,000,000 600,000,000 500,000,000 400,000,000 300,000,000 200,000,000 100,000,000 - 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average of Overall Investor & Analyst Day 2016 36

  37. Slide 37: Understanding regulation

    Understanding regulation Ian Ince Head of Regulatory Affairs and Compliance

  38. Slide 38: Playtech's Compliance Function

    PLAYTECH ’S COMPLIANCE FUNCTION A N E S TA B L I S H E D A N D C R I T I C A L T E A M  Compliance - application, reporting, monitoring existing licenses and regulations  Regulatory Affairs – lobby/advise governments and regulators on good practice. Liaise with existing gambling regulators and tho

  39. Slide 39: Online Casino Regulation in the EEA

    ONLINE CASINO REGULATION IN THE EEA 12% SWEDEN FINLAND Multi-licensing regime NORWAY ESTONIA 5% 20% LATVIA 10% Restricted and/or unregulated DENMARK LITHUANIA 15% 10% IRELAND Legislation in process UNITED KINGDOM NETH. POLAND 11% GERMANY BEL. 27% CZ Turnover LUX. SLOV. 16% FRANCE AUSTRIA HUNGARY SWI

  40. Slide 40: Future Gambling Regulation: Europe

    FUTURE GAMBLING REGULATION: EUROPE H E A D I N G T O W A R D S A F U L LY R E G U L AT E D M A R K E T  Czech Republic – beginning of 2017  Netherlands – estimated Q2 2017  Switzerland - potential for 2017  Poland - estimated for 2017  Germany – in the hands of the States, no Federal bill likel

  41. Slide 41: Future Regulation: Asia

    FUTURE REGULATION: ASIA N O E X P E C T AT I O N O F C H A N G E China  Risk-based Approach  No expectation of the current risk profile changing Philippines  New PAGCOR licences are available  Changes in local domestic activity – still an important income source for the government  Playtech pro

  42. Slide 42: Future Regulation: India

    FUTURE REGULATION: INDIA SIGNIFICANT POTENTIAL  Nagaland open to skill games (Poker/Rummy)  Sikkim  State model, no federal legislation expected  Slow burn  Working with the British Council of India Investor & Analyst Day 2016 42

  43. Slide 43: Future Regulation: LATAM

    FUTURE REGULATION: LATAM NOISE AND MOVEMENT  Colombia (effectively open)  Brazil (potential for 2017)  Chile  Peru  Mexico (new regulation stalled) Investor & Analyst Day 2016 43

  44. Slide 44: Future Regulation: United States

    FUTURE REGULATION: UNITED STATES N O T C U R R E N T LY E C O N O M I C A L LY V I A B L E  No presence  New Jersey / Nevada/Delaware - no commercial argument to obtain licence  Complicated due to different lobbying activities in different direction and added factor of Tribal issues to overcome 

  45. Slide 45: Future Regulation: Africa

    FUTURE REGULATION: AFRICA E A R LY D AY S  Currently supporting licensees in  Nigeria  Kenya  South Africa  Ghana  Low regulatory risk, higher AML/ABC risk  High levels of due diligence and local legal opinions Investor & Analyst Day 2016 45

  46. Slide 46: Business development

    Business development Mor Weizer CEO

  47. Slide 47: Business Development Activities

    BUSINESS DEVELOPMENT ACTIVITIES M U LT I P L E G R O W T H O P P O R T U N I T I E S  Targeting regulated and soon to be regulated jurisdictions  Structured agreements in regulated markets  Expanding Playtech product portfolio  Branded content  M&A Investor & Analyst Day 2016 47

  48. Slide 48: What Happens When a Market Regulates?

    WHAT HAPPENS WHEN A MARKET REGULATES? PA R T N E R I N G W I T H “ W I N N E R S ” I S K E Y F O R P L AY T E C H  Sports and poker first to be regulated  Local brands dominate the local market  UK: William Hill, LadbrokesCoral, PPB  Italy: Sisal, SNAI, Lottomatica  Newcomers such as media comp

  49. Slide 49: Structured Agreements

    STRUCTURED AGREEMENTS G R E AT E R E X P O S U R E T O T H E VA L U E C H A I N  Regulated or soon to be regulated jurisdictions Current  A deal that includes software and services would extend Playtech’s reach further into the value chain - resulting in different combinations of royalties, servic

  50. Slide 50: Branded and Local Content

    BRANDED AND LOCAL CONTENT THE LARGEST BRANDED GAME PORTFOLIO IN THE INDUSTRY  Including all of the largest studios  Branded games are among the top performing games of Playtech  Focus on having access to local content in certain countries to support local operators Investor & Analyst Day 2016 50

  51. Slide 51: A Proud History of M&A

    51 A PROUD HISTORY OF M&A OVER £1BN OF ACQUISITIONS IN 10 YEARS 2006 2010 2011 2012 2013 2014 2015 2016 Tribeca Virtue Fusion IGS Geneity Poker Strategy Psiclone YoYo Games Quickspin Poker platform Bingo network/tech. Intelligent Gaming Sports betting Poker affiliate ~£1.8m Casual Games studio £31.1

  52. Slide 52: M&A: Strategic Thinking

    M&A S T R AT E G I C T H I N K I N G  Structured agreements (Caliente, Marca, Maxbet)  Omni-channel focus (BGT, ECM)  Competitors (Tribeca tables, Virtue Fusion, GTS)  Services and marketing (PTTS, Pokerstrategy)  Content companies (through full acquisitions and minority stakes) Ash gaming, Qui

  53. Slide 53: Mobenga Case Study

    MOBENGA CASE STUDY A S T R AT E G I C A L LY A N D F I N A C I A L LY I M P O R T A N T T R A N S A C T I O N  Purchased to infill gap in the market and need for mobile offering  Paid c.€24m – a multiple of 7x EBITDA  Generated cash of c.€50m to date  Current ROI of over 100% - and growing  Ong

  54. Slide 54: Our M&A Focus

    OUR M&A FOCUS ANY TRANSACTION MUST MEET STRICT CRITERIA  Several overlapping areas of focus including  Content  Omni-channel  Sport  Marketing capabilities  Acquisitions in Financials division  Strict financial metrics including  ROI > WACC  EPS accretive  High cash generation Investor & A

  55. Slide 55: Today's Key Takeaways

    TODAY’S KEY TAKEAWAYS  The quality and breadth of Playtech’s technology driven offering is unrivalled  We have a clear strategy for Sport, with a fully integrated offering from retail to online to mobile, with a single back-end  Our scale allows us to invest an unmatchable amount into R&D, furthe

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