Light & Wonder, Inc. · ASX:LNW
Light & Wonder — Investor Day (May 2022)
108 slides from Light & Wonder's investor day presentation, May 17, 2022
Slide 1: 2022 Investor Day
2022Investor Day May 17, 2022
Slide 2: 2022 Investor Day Agenda
2022 Investor Day Agenda Welcome Barry Cottle & Jim Bombassei Board Chair Address Jamie Odell Strategic Overview & Opportunity Barry Cottle Gaming Matt Wilson iGaming Dylan Slaney SciPlay Josh Wilson Cross-Platform Initiatives Panel Siobhan Lane, Rich Schneider, Nathan Drane, CameronStewart, Rob Pro
Slide 3: Forward-Looking Statements
3 Forward-Looking Statements © 2022 LIGHT & WONDER | CONFIDENTIAL In this presentation, Light & Wonder, Inc. (“Light & Wonder,” “L&W” or the “Company”) makes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements descr
Slide 4: Jamie Odell, Executive Chair
Jamie OdellExecutive Chair 4 © 2022 LIGHT & WONDER | CONFIDENTIAL
Slide 5: Business & Strategy Overview
Business & Strategy OverviewBarry Cottle
Slide 6: Transformed Company. Positioned to Win.
6 Transformed Company. Positioned to Win. © 2022 LIGHT & WONDER | CONFIDENTIAL Large MarketOpportunity Unmatched Position Top Talent & Culture Compelling Investment Thesis Clear Roadmap
Slide 7: $70B TAM: Future of Games
$70B TAM Future of Games…Huge, Growing & Converging 2025 Global Total Addressable Market ("TAM") - based on internal market assessment and consideration of Eilers data.Internal analysis of regulated B2C L&W markets TAM from H2GC base.2021E figures as per Eilers & Kreijcik custom ad-hoc analysis and
Slide 8: Leading Cross-Platform Global Game Company
8 Leading Cross-Platform Global Game Company © 2022 LIGHT & WONDER | CONFIDENTIAL Only Company with Leading Positions AcrossGaming, iGaming and Social Singularly Focused on Building Great Games and Franchises Healthy Balance Sheet Positioned to Unlock Shareholder Value Positioned to Win & Drive Shar
Slide 9: Leading Positions with Unmatched Competitive Advantages
LAND-BASED GAMING iGAMING Slots Tables Systems Content Aggregation PAM SOCIAL GAMINGSocial Casino Casual PEER 1 - - - - PEER 2 - - PEER 3 - - - - PEER 4 - - - - - - - PEER 5 - - - - - PEER 6 - - - - - - Leading Positions with Unmatched Competitive Advantages 9 © 2022 LIGHT & WONDER | CONFIDENTIAL
Slide 10: Unmatched Portfolio of Evergreen Franchises
Unmatched Portfolio of Evergreen Franchises 10 The MONOPOLY name and logo, the distinctive design of the game board, the four corner squares, the MR. MONOPOLY name and character, as well as each of the distinctive elements of the board, cards, and the playing pieces are trademarks of Hasbro for its
Slide 11: Leading Aggregation Platform and Systems Business
11 Leading Aggregation Platform and Systems Business #1 #1 300+ 500k 400+ iGaming aggregator operators studio 60+ partners Land-based systems solution connected EGMs operators Global market share US market share © 2022 LIGHT & WONDER | CONFIDENTIAL
Slide 12: Clear Roadmap to Drive Long Term Value
12 Clear Roadmap to Drive Long Term Value © 2022 LIGHT & WONDER | CONFIDENTIAL 1 Creating great content and franchises across Gaming, iGaming and Social 2 Expanding in high-growth digital markets 3 Enabling a seamless player experience with leading platforms 4 De-levering and maximizing cash flow to
Slide 13: Double-Digit CAGR Growth, High Recurring & Digital Revenues
13 Double-Digit CAGR GrowthHigh Recurring & Digital Revenues 15%(1) (2)Targeted Consolidated AEBITDA CAGR by 2025 $10BTargeted Capital Creation by 2025 $1.4B(2)Targeted ConsolidatedAEBITDA by 2025 45%(2)Targeted FCF Conversion by 2025 © 2022 LIGHT & WONDER | CONFIDENTIAL Attractive Shareholder Value
Slide 14: Compelling Investment Thesis
Leading global game and platform provider Unmatched market positions and cross-platform capability Transformed balance sheet Double-digit CAGR growth, with high margins and robustcash flow generation Enhanced shareholder value Compelling Investment Thesis © 2022 LIGHT & WONDER | CONFIDENTIAL 14 Lead
Slide 15: Executive Leadership Team
Executive Leadership Team © 2022 LIGHT & WONDER | CONFIDENTIAL 15 Sustainability Diversity, Equity & Inclusion Responsible Gaming Victor Blanco Chief Technology Officer(1) Barry CottlePresident & CEO Matt WilsonCEO, Gaming Connie James CFO, Treasurer & Corporate Secretary Dylan SlaneyCEO, iGaming Jo
Slide 16: Gaming
GamingMatt Wilson
Slide 17: Positioned to Take Share and Drive Shareholder Value
17 Positioned to Take Share and Drive Shareholder Value © 2022 LIGHT & WONDER | CONFIDENTIAL A stable, resilient global marketAn established leader protected by high barriers to entryWell positioned to capture growth opportunities in the twolargest profit poolsThe right playbook to capitalize on sub
Slide 18: Leading End-to-End Solutions Provider
18 Leading End-to-End Solutions Provider © 2022 LIGHT & WONDER | CONFIDENTIAL SlotsTable Games Systems
Slide 19: Unmatched Scale and Breadth by the Numbers
~80kglobal leasedslots & tables 500k+connected system EGM’s globally Licensed in345jurisdictions 18kglobal EGM sales in 2021 >50%of average global revenue is recurring, and growing 19 © 2022 LIGHT & WONDER | CONFIDENTIAL Unmatched Scale and BreadthB Y T H E N U M B E R S ( 1 ) (1) As of and for the
Slide 20: Operating in a Stable, Resilient Industry
Operating in a Stable, Resilient Industry... Gaming Gross Revenue has demonstrated consistent growth since 2000 $30,000$0 $60,000 $90,000 $120,000 $150,000 2003 2006 2009 2012 2015 2018 2021 U.S. GROSS GAMING REVENUE(1)$ in billions (1) GGR according to H2 Gambling Capital. 20 © 2022 LIGHT & WONDER
Slide 21: With High Barriers to Entry
…with High Barriers to Entry… 21 © 2022 LIGHT & WONDER | CONFIDENTIAL L&W’s leading position protected by economic moats Highly regulated industry Significantcap-ex neededto succeed & longdevelopmentlead times Limited pool of top talent Long-term customer relationships
Slide 22: Reinforcing Established Leading Providers
77% 87% The top 4providers are maintaining market share throughthe industry’sexpansion 22 © 2022 LIGHT & WONDER | CONFIDENTIAL 90% GAMING SALES 80% PREMIUM GAMING LEASES Top 4 Other SYSTEMS TABLES …Reinforcing Established Leading Providers2021 North American Market Share(1) (1) Eilers 2021 North Ame
Slide 23: $7B 2025 TAM Opportunity
23 $7B 2025 TAM Opportunity as Global Gaming Market Fully Recovers © 2022 LIGHT & WONDER | CONFIDENTIAL $7B TOTAL ADDRESSABLE MARKET(1) (1) Based on internal market assessments and consideration of Eilers data. North America International ~80% ~20%
Slide 24: Defending Leading Positions and Capturing Growth in Slots
Defending Leading Positions and Capturing Growth Opportunity in Slots # 2 # 1 In systems and tables (1) In gaming leases and sales(1) Positioned to capturesignificant shareof the industry’slargest profit pools 24 © 2022 LIGHT & WONDER | CONFIDENTIAL $2,600 $2,400 $700 $500 Gaming Leases Gaming Sales
Slide 25: Executing a Strategy to Outpace Recovery and Capture Share
Transforming the business and capitalizing on core strengths to build onleadership position 25 Executing a Strategy to Outpace Recovery and Capture Share © 2022 LIGHT & WONDER | CONFIDENTIAL Disciplined management to support investments Investment in R&D to fuel growth Focus on talent to unleash pot
Slide 26: Transforming Gaming to Optimize the Business and Fuel Growth
26 Transforming Gaming to Optimize the Business and Fuel Growth © 2022 LIGHT & WONDER | CONFIDENTIAL We are building on our foundation to unlock the power of our platformEstablishing a Global Operating ModelExecuting on Strategic Management SystemIncreasing Investment Capacity through Right- Sized C
Slide 27: Revitalizing the Engine of Our Business
Revitalizing the Engine of Our Business 2019Inherited a R&D program that wasDecentralized and regionally structured Not building right games for right markets Not focused on largest revenue opportunities TODAYUnlocked the power of R&D investment Increased disciplined R&D spend Aligned with highest m
Slide 28: Steady Growth in Premium Install Base
Steady Growth in Premium Install Base Demonstrates Strategy is Working 28 © 2022 LIGHT & WONDER | CONFIDENTIAL Delivered all-time high of 43%of North American base in premium game leases NORTH AMERICA GAMING OPERATIONSPremium as % of North America Installed Base 2021 42% 37% 2020 36% 2019 2025 43% 1
Slide 29: Developing Next Generation Offerings for Each Market Segment
Developing Next Generation Offerings for Each Market Segment 29 © 2022 LIGHT & WONDER | CONFIDENTIAL KASCADA MURAL KASCADA DUALSCREEN LANDMARK 7000
Slide 30: Proven Leadership Team
30 © 2022 LIGHT & WONDER | CONFIDENTIAL Proven Leadership Team Siobhan LaneChief Commercial Officer Anthony FirmaniChief Operating Officer Rich SchneiderChief Product Officer Brian PierceSVP North America Sales Nathan DraneSVP Global ProductManagement Victor BlancoChief Technology Officer(1) Alex Vi
Slide 31: Global Creative Centers
31 © 2022 LIGHT & WONDER | CONFIDENTIAL Aligning our top talent with our most promising growth opportunities through Global Creative Centers Focused on Game Design Talent to Unleash Potential Michael MastropietroChicago Qin YouAustralia Ted HaseLas Vegas Roger SnowLas Vegas
Slide 32: Unmatched Portfolio of Hit Franchises
32 Unmatched Portfolio of Hit Franchises… …With More on theWay Strong proprietary evergreen franchises… The MONOPOLY name and logo, the distinctive design of the game board, the four corner squares, the MR. MONOPOLY name and character, as well as each of the distinctive elements of the board, cards
Slide 33: Significant Accomplishments to Date
Significant Accomplishments to Date 7 Consecutive quartersof growthin premium Gaming leases 43%of NA base, all timehigh Our shift in focus is maximizing results 2X (1) Ship sharein Australia 33 © 2022 LIGHT & WONDER | CONFIDENTIAL ~ 3,400 Units sold in North America in Q1 2022 Steadily growing share
Slide 34: Positioned to Take Share and Drive Shareholder Value
34 Positioned to Take Share and Drive Shareholder Value © 2022 LIGHT & WONDER | CONFIDENTIAL We operate in a stable, resilient global marketWe are an established leader protected by high barriers to entryWe are well positioned to capture growth opportunitiesin the two largest profit poolsWe have the
Slide 35: iGaming
iGamingDylan Slaney
Slide 36: The iGaming Team
We are creators who are passionate about delivering the best digital experiences to players. We change the game by buildingnew worlds of play. The iGaming Team Dylan SlaneyEVP, CEO iGaming Sue DawsonDeputy General Counsel Bob HaysChief Commercial Officer Dan O’DonoghueTransformation Katie ByersChief
Slide 37: Unique. Leading. And Positioned to Win.
37 Unique. Leading.And Positioned to Win. Leading content offering Unparalleled platform & capabilities Fast growing opportunity Differentiated position and value creation © 2022 LIGHT & WONDER | CONFIDENTIAL
Slide 38: A World of Entertainment Through One Integration
38 A World of Entertainment Through ONE INTEGRATION We connect players, studios and operators globally to deliver an unparalleled digital entertainment experience.We make it easy for operators to manage regulatory frameworks & gameplay and provide seamless player account & payment services. © 2022 L
Slide 39: Leading and Trusted iGaming Ecosystem
39 Leading and Trusted iGaming Ecosystem © 2022 LIGHT & WONDER | CONFIDENTIAL Content creation Digital PAM + Live Casino Unparalleled combination of solutions
Slide 40: Unparalleled Content in Regulated Markets
Unparalleled content in regulated markets3k+ Games 1PP Content Leveraging L&W’s evergreen franchises and digital native content 2PP Content Developed in collaboration with partner studios 3PP ContentAggregated from third party studios 40 © 2022 LIGHT & WONDER | CONFIDENTIAL (1) OGS GGR internal data
Slide 41: Leading iGaming Platform
PLAYERS OUR STUDIOS PARTNER STUDIOS (EXAMPLES) OPERATORS INTEGRATION ONE Leading iGaming Platform 60+STUDIO PARTNERS 300+OPERATOR BRANDS 41 © 2022 LIGHT & WONDER | CONFIDENTIAL
Slide 42: Positioned to Capture Meaningful Share
Positioned to Capture Meaningful Share Internal analysis of regulated B2C L&W markets TAM from H2GC base and for FY2025.L&W Internal analysis and consensus based on available public quoted sources. 42 © 2022 LIGHT & WONDER | CONFIDENTIAL $27B+ TAM FY25(1) 23%(2)CAGR 21/25 Markets covered in TAMAddit
Slide 43: The World's Fastest Growing iGaming Market
43 © 2022 LIGHT & WONDER | CONFIDENTIAL 25%Market Share 3XAvg Bet Size v UK 8B+Game Rounds $4BFY21 TAM 2XGGR/Adultv OSB 52%YTD marketgrowth The World’s Fastest Growing iGaming Market (1) (2) Internal OGS Data & market share and available industry results for Q1 2022.Selected market stats/sources – E
Slide 44: What If iGaming Followed All Mobile Sports States?
44 What If iGaming Followed All Mobile Sports States? LIVE LEGAL – NOT LIVE ACTIVE OR PRE-FILEDLEGISLATION 60% © 2022 LIGHT & WONDER | CONFIDENTIAL AGA US Sports Betting Mobile legal landscape as of May 10, 2022.Macquarie Research April 2022. (1) OSB Population Penetration by FY23(2)
Slide 45: The US GGR Size of the Prize
13% of USPopulation 25% of USpopulation $13bn Size of UK & EU today50% of USPopulation 5x75% of USPopulation $4B $7.8B $15.5B $23.2B GGR/AdultBase $120PA $116 MI $149 NJ $205US Avg $146 Current state of US iGaming US Sports estimated to be 60% of US population by FY23 $30B7.5x HIGHER GGR/ADULT 30% F
Slide 46: Strategic Growth Pillars
46 Strategic Growth Pillars © 2022 LIGHT & WONDER | CONFIDENTIAL 1 Extend leading position in first-party content 2 Win in North America 3 Accelerate the growth of OpenGaming 4 Launch live Casino – U.S. share gain
Slide 47: Extend Leading Position in First-Party Content
1 . E X T E N D L E A D I N G P O S I T I O N I N F I R S T - P A R T Y C O N T E N T 47 © 2022 LIGHT & WONDER | CONFIDENTIAL + = Unparalleled Position Games and Franchises Players Love
Slide 48: Our First Party Content Continues to Out-Perform
48 © 20 LIGHT & WONDER | CONFIDENTIAL Our First Party Content Continues to Out-Perform(1)16/20Top games on OGS in the US Market are L&W 1PP Games#1 US Top Grossing Game88 Fortunes#1 UK Game launchRainbow Riches – Rainbow Frenzy#1 US Game launchHurricane Horse Coin Combo 1 . E X T E N D L E A D I N G
Slide 49: Leading Digital Native Content
49 Leading Digital Native Content B I G G E S T E V E R L A U N C H B I G G E S T E V E R L A U N C H 1 . E X T E N D L E A D I N G P O S I T I O N I N F I R S T - P A R T Y C O N T E N T 7CONSECUTIVE MONTHSOF GROWTH RECORDQ1’22 & APR YOY © 2022 LIGHT & WONDER | CONFIDENTIAL
Slide 50: Unmatched. Scale. Product Portfolio. Relationships.
Unmatched. Scale. Product Portfolio. Relationships. 2 . W I N N I N G I N N O R T H A M E R I C A Land-based Content Digital-first Content Content Aggregation Player Account Management Live Casino PEER 1 - - - PEER 2 - PEER 3 - PEER 4 - - - 50 © 2022 LIGHT & WONDER | CONFIDENTIAL
Slide 51: Winning in North America
51 © 2022 LIGHT & WONDER | CONFIDENTIAL Unparalleled and scalable offering that makes us an invaluable partner to both content studios and operators Winning the U.S. 2 . W I N N I N G I N N O R T H A M E R I C A New Vegas studio with 100% focus on U.S. Leading land-based and digital native content M
Slide 52: 52 © 2022 LIGHT & WONDER | CONFIDENTIAL
52 © 2022 LIGHT & WONDER | CONFIDENTIAL
Slide 53: Industry-leading Data Science
53 © 2022 LIGHT & WONDER | CONFIDENTIAL Industry-leading Data Science New Player Segments INSIGHTS from ALL GAMES Strategic Asset Informing game roadmaps and decisions Unparalleled Entertainment. Unparalleled Data & Insights. 50B+ANNUAL GAME ROUNDS 3 . A C C E L E R A T E T H E G R O W T H O F O P E
Slide 54: Winning in Live Casino
Player engagement Exclusivity & flexibility L&W IP Open gaming Player convergence 54 Winning in Live Casino © 2022 LIGHT & WONDER | CONFIDENTIAL 4 . L A U N C H L I V E C A S I N O – U S S H A R E G A I N Live IN THE US IN Q4 2022 (1) (1) Targeted launch date.
Slide 55: Key Takeaways
Key Takeaways © 2022 LIGHT & WONDER | CONFIDENTIAL Unmatched ecosystem to offer players Uniquely positioned as a developer and distributor Expanding share in growing markets Accelerating investments in content and tech Operating at the heart of digital convergence 55 An unbeatable platform from whic
Slide 56: SciPlay, Josh Wilson
“Sci Josh Wilson Mealictus
Slide 57: Agenda
Agenda Who We Are Our OpportunityOur Strategy For Success Our Financial Profile 57 © 2022 SCIPLAY | CONFIDENTIAL
Slide 58: The SciPlay Team
Our team brings a deep breadth of knowledge built over an average of 25 years work experience in digital and entertainmentand an average tenure of 13 years at SciPlay Joshua J. WilsonChief Executive Officer Aaron SchurmanFounder and Chief Gamer Forrest StoweChief Technology Officer Destry DavisonMan
Slide 59: Studios Around the World
59 Studios Around the World © 2022 SCIPLAY | CONFIDENTIAL CEDAR FALLS, IOWA We draw on a wealth of global talent to create innovative games Bangalore, India Oulu, FinlandKyiv, Ukraine Austin, Texas Ankara, Turkey Tel Aviv, Israel
Slide 60: Driving Compelling Organic Growth
60 Driving Compelling Organic Growth © 2022 SCIPLAY | CONFIDENTIAL DRIVING SUBSTANTIAL GROWTH Revenue, $ in millions (1)Since 2012more than2xthe social casino market $95 $123 $169 $275 $361 $416 $466 $582 $606 $222012 (U) 2013 (U) 2014 (U) 2015 2016 2017 2018 2019 2020 2021 48%growth in ARPDAU(2)sin
Slide 61: Capturing Significant Market Opportunity
61 Capturing Significant Market Opportunity © 2022 SCIPLAY | CONFIDENTIAL $ Mobile Games SciPlay Market 100BO(1pp)ortunity CasualPuzzle games Card games Board gamesHyper-casual games Social Casino $$2386BB(1() 1) +15% YoY $8B(1)+8% YoY (1) 2021E figures as per Eilers & Krejcik custom ad-hoc analysis
Slide 62: How We Make and Run Games
62 How We Make andRun Games © 2022 SCIPLAY | CONFIDENTIAL Simple Core Gam e Meta Games Data & Economy New UserReach Live Ops/ Events
Slide 63: How We Are Growing Our Business
63 How We Are Growing Our Business © 2022 SCIPLAY | CONFIDENTIAL Scaling our current core games Adding new games to the portfolio Project X NEW GAME 2 NEW GAME 3 + NEW GAMES
Slide 64: Investing in the SciPlay Engine to Scale and Grow Games
64 Investing in the SciPlay Engine to Scale and Grow Games © 2022 SCIPLAY | CONFIDENTIAL Project All-Star
Slide 65: Project All-Star Impact
65 Project All-Star Impact © 2022 SCIPLAY | CONFIDENTIAL 1 Q 2022 REVENUE RECORDS Achieved 6th consecutive quarterly revenue record Delivered one of the highest quarterly revenues Record quarterly revenue A MRPPU( 2 ) ARPDAU(3) 6.1% PAYER CONVERSION RATE (1) 8.9% 1Q19 1Q22 +46 % $76.51 $92. 45 1Q19
Slide 66: Investing in the SciPlay Engine to Scale and Grow Games
66 Investing in the SciPlay Engine to Scale and Grow Games © 2022 SCIPLAY | CONFIDENTIAL Direct to Consumer PlatformData Science & Analytics Investment in Ad TechProject All-Star SciPlayEngine
Slide 67: Launching New Games
67 © 2022 LIGHT & WONDER | CONFIDENTIAL Similarplayer type Similargame loop Similarlive ops / meta Launching New GamesStrong synergies between Social Casino and Casual Adding 1 to 2 new games per year
Slide 68: We are Layering on New Games
68 We are Layering on New Games… © 2022 SCIPLAY | CONFIDENTIAL Bingo Showdown Revenue Launched Solitaire Pets Adventure in December 100% organically developed our first casual game leveraging their talent and game design expertise 3x Project X
Slide 69: Alictus Acquisition
69 © 2022 SCIPLAY | CONFIDENTIAL Diligent process of finding great companies Talent & Culture Products and Technology Capabilities Strong Financial Profile Broadens global player network Expands first party data Diversifies revenue streams in growing $13B(1) global mobile in-game advertising market
Slide 70: Investing in Talent
70 Investing in Talent © 2022 LIGHT & WONDER | CONFIDENTIAL Recruiting the best talent in the business & building great employer brandingBuilding a culture that embraces innovation and develops our peopleCreating opportunities for our teammates to grow & excel CKATCBEEYAUDDINSVATG, VIRUANIKFVL,AOR,T
Slide 71: Becoming the Leading Diversified Mobile Game Company
Becoming the Leading Diversified Mobile Game Company, Singularly Focused on Players Social Casino Casual Leading Diversified Portfolio Evolution powered by SciPlay engine
Slide 72: Deliver Growth by Scaling Core Business and Launching New Games
Deliver Growth by Scaling Core Business and Launching New Games I LLUSTRATIVE REVENUE GROWTH Layering in newrevenue Fueling growth in core business CORE GAMES NEW GAMES 72 © 2022 SCIPLAY | CONFIDENTIAL
Slide 73: Executing Our Strategy Results in a Strong Financial Profile
73 Executing Our StrategyResults in a Strong Financial Profile © 2022 SCIPLAY | CONFIDENTIAL Healthy margin and highly cash generative business delivers strong balance sheet REVENUE $466 $606 FY19 FY21 +30 % AEBITDA (1) $122 $186 FY19 FY21 +52 % FREE CASH FLOW (1) $82 $149 FY19 FY21 +82 % All number
Slide 74: Becoming a Diversified Mobile Game Company
74 Becoming a Diversified Mobile Game Company © 2022 SCIPLAY | CONFIDENTIAL Grow Core Business Positioned to win share and drive long-term sustainable growth Launch New Games Invest in SciPlay Engine Invest in Talent Increase Shareholder Value
Slide 75: The Power of Cross-Platform
The Power of Cross- Platform P R O P R I E T A R Y & C O N F I D E N T I A L
Slide 76: Players engage with us 30% more across both channels
76 © 2022 LIGHT & WONDER | CONFIDENTIAL “Players engage with us 30% more when they play in both channels compared to just a single channel.” British Columbia Lottery Corporation (BCLC)
Slide 77: The Power of Cross-Platform Panel
The Power of Cross- Platform Panel Siobhan LaneChief Commercial Officer | Light & Wonder Rich SchneiderChief Product Officer | Light & Wonder Nathan DraneSVP Global Product Management | Light & Wonder Cameron StewartVP Product Management | SciPlay Rob ProcterVP Game Development | Light & Wonder 77 ©
Slide 78: Financial Outlook & Capital Deployment
Financial Outlook & Capital DeploymentConnie James
Slide 79: Value Creation Framework
79 © 2022 LIGHT & WONDER | CONFIDENTIAL Value Creation Framework Enhanced Shareholder Value
Slide 80: Strong Foundation with Transformed Financial Profile
80 Strong Foundation with Transformed Financial Profile © 2022 LIGHT & WONDER | CONFIDENTIAL DIGITAL REVENUES RECURRING REVENUES( 1) ~75%2021 ~40%2021 ADJUSTED NET DEBT LEVERAGE RATIO ( 2)( 3) CONSOLIDATED AEBITDA MARGIN ( 2) Includes Gaming Operations, ongoing Gaming systems maintenance, table serv
Slide 81: Sustainable Double-Digit Growth
81 © 2022 LIGHT & WONDER | CONFIDENTIAL targeted 15% 2021 – 2025 CAGR(2) 2021 2025 $793M CONSOLIDATED AEBITDA(1) Sustainable Double-Digit GrowthGROWTH DRIVERS iGaming - $27B TAMU.S. and International proliferationParticipate in all parts of the value chainShare gains with increase in original conten
Slide 82: Sustainable Double-Digit Growth Profile: Gaming
82 © 2022 LIGHT & WONDER | CONFIDENTIAL NORTH AMERICA GAMING OPERATIONS GAME SALES Source: Internal data & Max Gaming industry estimates.Source: Eilers 4Q21 & CY21 Suppliers KPI.Source: Eilers 4Q21 Tables & Slots. 42% 37% 36% Market leader in Tables and Shufflers(3)Grow market leading positions with
Slide 83: Sustainable Double Digit Growth Profile: iGaming
83 Sustainable Double Digit Growth Profile: iGaming © 2022 LIGHT & WONDER | CONFIDENTIAL (1) Targeted growth based on internal data on OpenGaming System platform. Legalization in the U.S. and new international territories coming on boardGrowing original content to take shareLeveraging aggregation pl
Slide 84: Sustainable Double Digit Growth Profile: SciPlay
84 © 2022 LIGHT & WONDER | CONFIDENTIAL Expect SciPlay to outpace market growthInvestments to drive engagement and monetizationClosing ARPDAU(2) gap with industry peers 2021(3) 2025(4) Market Share Amounts as per Eilers & Krejcik custom ad-hoc analysis and reports.Average Revenue Per Daily Active U
Slide 85: Executing on Margin Expansion Initiatives
85 © 2022 LIGHT & WONDER | CONFIDENTIAL Cost realignmentRationalized gaming product portfolioInstituted global supply chainReduced facilities footprintLeaned into cost-efficient developmentcentersReengineered processes to drive improved cash conversion cycle Executing on Margin Expansion Initiatives
Slide 86: Highly Cash Generative Business
86 Highly Cash Generative Business © 2022 LIGHT & WONDER | CONFIDENTIAL 2021 2022 to 2025(3) 2020 FREE CASH FLOW CONVERSION( 1) $M 2019 Denotes a non-GAAP financial measure and is reconciled to the most directly comparable GAAP measure in the tables in the Appendix for 2019-2021. Free cash flow data
Slide 87: Significant Capital Creation
87 Significant Capital Creation2022 to 2025 © 2022 LIGHT & WONDER | CONFIDENTIAL ~$5.8B 45% $up to 2.3B2.5x to 3.5x targeted net debtleverage ratio(1) Lottery Sale and Pending Sports Betting Divestiture After-tax Cash Proceeds TargetedDebt Capacity (1) Additional information on the non-GAAP financia
Slide 88: Balanced and Opportunistic Capital Allocation Strategy
88 Pursuing Balanced and Opportunistic Capital Allocation Strategy to Enhance Value © 2022 LIGHT & WONDER | CONFIDENTIAL 123 Debt Reduction Returning Capital to Shareholders Through Share Repurchases Disciplined Investment in Key Growth Opportunities
Slide 89: Transformed Balance Sheet & Credit Profile
89 Transformed Balance Sheet & Credit Profile © 2022 LIGHT & WONDER | CONFIDENTIAL Denotes a non-GAAP financial measure and is reconciled to the most directly comparable GAAP measure in our Appendix.Adjusted net debt leverage ratio reflecting refinancing transactions and the Lottery business sale in
Slide 90: Returning Significant Capital Through Share Repurchase
90 Returning Significant Capital Through Share Repurchase © 2022 LIGHT & WONDER | CONFIDENTIAL Continue to be an active buyer of our shares in the market (1) The amount and share count as of May 9, 2022. $750MShare Repurchase Program $147M or 2.5MShares Purchased(1) ~2.5%of Shares Outstanding
Slide 91: Investing to Grow Organically
Investing to Grow Organically R&D CAPEX ~$1.9B Scaling original game launchesEvery dollar invested in content R&D is highly accretive PLANNED R&D & CAPEX INVESTMENTS 2022 - 2025R&D ~10% OF REVENUE Grow Premium Gaming Operations footprintModernize our systemsEnhance digital platformsScale live-dealer
Slide 92: Disciplined Approach to Investing
92 Disciplined Approach to Investing © 2022 LIGHT & WONDER | CONFIDENTIAL INORGANIC Exceeds Financial Hurdles Complements Core Capabilities Accelerates Strategic Considerations PERFORMANCE OF RECENT ACQUISITIONS Lightning Box achieved 7 consecutive record months of GGR Launching a new U.S. title eve
Slide 93: Significant Capital Allocation: Key Takeaways
93 © 2022 LIGHT & WONDER | CONFIDENTIAL Significant Capital AllocationTarget $10B createdby 2025 Key Takeaways Enviable and Durable Financial Profile $1.4B of targeted Consolidated AEBITDA by 2025(1) Radically Transformed Balance Sheet Equity Story (1) Additional information on the non-GAAP financia
Slide 94: Q&A
Q&A P R O P R I E T A R Y & C O N F I D E N T I A L
Slide 95: Compelling Investment Thesis
Leading global game and platform provider Unmatched market positions and cross-platform capability Transformed balance sheet Double-digit CAGR growth, with high margins and robustcash flow generation Enhanced shareholder value Compelling Investment Thesis © 2022 LIGHT & WONDER | CONFIDENTIAL 95 Lead
Slide 96: Appendix
Appendix P R O P R I E T A R Y & C O N F I D E N T I A L
Slide 97: Non-GAAP financial measures
97 © 2022 LIGHT & WONDER | CONFIDENTIAL Non-GAAP financial measures The Company’s management uses the following non-GAAP financial measures in conjunction with GAAP financial measures: Consolidated AEBITDA (representing continuing operations), AEBITDA from discontinued operations, Combined AEBITDA,
Slide 98: Non-GAAP financial measures (continued)
98 Non-GAAP financial measures (continued) © 2022 LIGHT & WONDER | CONFIDENTIAL Combined AEBITDACombined AEBITDA, as used herein, is a non-GAAP financial measure that combines Consolidated AEBITDA (representing our continuing operations), AEBITDA from discontinued operations and EBITDA from equity i
Slide 99: Reconciliation of Consolidated AEBITDA and Combined AEBITDA
99 L&W Reconciliation of Consolidated AEBITDA — Continuing Operations, AEBITDA from Discontinued Operations and Combined AEBITDA © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millions. Refer to the Consolidated AEBITDA - continuing operations and AEBITDA from discontinued ope
Slide 100: Reconciliation of Debt Outstanding to Net Debt Leverage Ratio
100 L&W Reconciliation of Principal Face Value of Debt Outstanding to Net Debt Leverage Ratio © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millions Refer to the reconciliation of Combined AEBITDA included on slide 99 titled "L&W Reconciliation of Consolidated AEBITDA — Conti
Slide 101: Consolidated AEBITDA Margin
101 Consolidated ABETIDA Margin © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millionsRefer to the reconciliation of Consolidated AEBITDA included in the table titled "L&W Reconciliation of Consolidated AEBITDA --Continuing Operations, AEBITDA from Discontinued Operations and
Slide 102: Reconciliation of Operating Cash Flow to Free Cash Flow
102 L&W Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow – Continuing Operations and Combined Free Cash Flow © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millions. Represents cash taxes and cash interest paid on our existing debt, which has not h
Slide 103: Reconciliation of Combined Free Cash Flow Conversion
103 L&W Reconciliation of Combined Free Cash Flow Conversion © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millions Refer to the “Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow – Continuing Operations and Combined Free Cash Flow” on slide 102.Re
Slide 104: Reconciliation of Earnings from Equity Investments to EBITDA
104 L&W Reconciliation of Earnings from Equity Investments to EBITDA from Equity Investments © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millions(1) Combined EBITDA from equity investments consists of EBITDA from both discontinued and continuing operations equity investment
Slide 105: Principal Debt Balance Supplemental Information
105 Principal Debt Balance Supplemental Information © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millions. Principal amount of outstanding debt as of March 31, 2022 represents the outstanding principal value of debt balances that conform to the presentation found in Note 11
Slide 106: Reconciliation of Adjusted Net Debt and Leverage Ratio
106 Reconciliation of Adjusted Net Debt Reflecting Refinancing Transactions and the Lottery Business Sale & Adjusted Net Debt Leverage Ratio Reflecting Refinancing Transactions and the Lottery Business Sale © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millions.Combined AEBIT
Slide 107: SciPlay: Reconciliation of Net Income to AEBITDA
107 SciPlay: Reconciliation of Net Income Attributable to SciPlay to AEBITDA © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millions(1) For 2021 period, includes $24.5 million legal settlement charge.
Slide 108: SciPlay: Reconciliation of Operating Cash Flow to Free Cash Flow
108 SciPlay: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow © 2022 LIGHT & WONDER | CONFIDENTIAL Note: Unaudited, U.S. Dollars in millionsRefer to the reconciliation of AEBITDA included on slide 107 titled “SciPlay: Reconciliation of Net Income Attributable to SciPlay