Elys Bmg Group, Inc. · OTC:ELYS
Elys Bmg — Newgioco Group — Investor Presentation (March 2019)
23 slides from Elys Bmg's investor presentation, Mar 18, 2019
Slide 1: Investor Presentation March 2019
INVESTOR PRESENTATION MARCH 2019 OTCQB: NWGI 1 OTCQB: NWGI
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of the words "could,“ "believe," "anticipate," "intend," "estimate,
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Newgioco Group is a vertically-integrated leisure gaming technology company with fully-licensed online and land-based gaming operations now expanding into the bourgeoning U.S. sports betting market using its ELYS Betting Platform Proven operations in Italy provide a solid launc
Slide 4: Positioned for Core Growth and Global Expansion
POSITIONED FOR CORE GROWTH AND GLOBAL EXPANSION ▪ Leverage track record of success from highly regulated Italian gaming market ▪ U.S. Supreme Court Decision (May 2018) Opens U.S. Market for Sports Betting ▪ Targeting U.S. Tribal Gaming market Initial focus on 17 states Agreements expected to rol
Slide 5: Market Overview: Italy Is the Largest Gaming Market in the EU
MARKET OVERVIEW: ITALY IS THE LARGEST GAMING MARKET IN THE EU Well-established business operations in the largest, most highly-regulated gaming market Total Gaming Market Size Italy Market Share GGR (€ in billions, 2017) Bet365 (Hillside Italy 20.1 PLC) 18.23% All others 25.71% United Kingdom 16.4 G
Slide 6: Driving Growth of Italian Bookmaking Operations
DRIVING GROWTH OF ITALIAN BOOKMAKING OPERATIONS Established, Rapidly Growing, Profitable Business Expanding portfolio of products in existing stores and taking market share Acquisition opportunities as consolidation in Italy market expected to continue Opening new small town shops with attract
Slide 7: Market Overview: Legalization of the U.S. Sports Betting Market
MARKET OVERVIEW: LEGALIZATION OF THE U.S. SPORTS BETTING MARKET Smartphone apps currently transact ~70% of Nevada sports betting… not physical locations … representing a $4.9B market $320M $5.7B Sports betting legislation accelerating in the U.S. 10 States enacted online gaming bills in 2017 W
Slide 8: Our Plans for Expansion: U.S. Tribal Markets
OUR PLANS FOR EXPANSION: U.S. TRIBAL MARKETS Leveraging our proven experience and solid technology foundation to target U.S. Tribal markets WA ND Focus on $32B Tribal market (Source: AGA) MT OR MN NY WI MI ID WY SD PA $5 Billion or more OH Targeting specific U.S. state markets NE I VA IL N WV $2
Slide 9: Competitive Landscape: Acquisitive Industry
COMPETITIVE LANDSCAPE: ACQUISITIVE INDUSTRY In the U.S. market, tribal casinos have been largely ignored in recent pairing transactions... Select Pairing Transactions in the U.S. Pairings have largely been Resort Operators and Sportsbook Providers (Access Deals) Tribal Resort Operators have not
Slide 10: Virtual Generations' Established Presence
VIRTUAL GENERATIONS’ ESTABLISHED PRESENCE Limited Geographic Overlap with Newgioco, Opportunity for Global Expansion VG’s Current Operations VG’s Offerings Albania Horse Racing Greyhounds English League Colombia Dominican Republic Honduras Italy Mexico Nicaragua Nigeria Paraguay Peru Turkey American
Slide 11: Revenue Streams
REVENUE STREAMS Handle - 2018 Handle - Q4/17 Long-Term Model Sportsbook Casino Poker Sportsbook Casino Poker Gross Gaming Revenue - 2018 GGR - Q4/17 Sportsbook (Italy) Casino (Italy) Poker (Italy) SaaS Sportsbook Casino Poker Sportsbook Casino Poker OTCQB: NWGI 11
Slide 12: Margin Profile
MARGIN PROFILE Gross Gaming Revenue (GGR) Conversion Sportsbook 12 - 18% Casino 3 - 4% Poker 3 - 4% SaaS 25-30% Longer Term targets 15-20% margins (vs 10-15% guidance in 2019) OTCQB: NWGI 12
Slide 13: Significant Operating Leverage
SIGNIFICANT OPERATING LEVERAGE Substantial operating leverage provides significant opportunity for increasing profitability Operating expenses are either largely fixed or discretionary Increase in Handle results in blended product mix with only a modest increase in headcount and operating expens
Slide 14: Financial Overview: Track Record of Strong Operating Results
FINANCIAL OVERVIEW: TRACK RECORD OF STRONG OPERATING RESULTS Capturing just 1% of the massive U.S. market could DOUBLE REVENUE and TRIPLE EBITDA Annualized Revenue Adjusted EBITDA USD in thousands USD in thousands 2X Revenue 283% 5-YEAR CAGR 2014-2018 $34,575 3X Adjusted +200% $22,865 EBITDA $8,898
Slide 15: Valuation: NWGI Is Undervalued Compared to Peers
VALUATION: NWGI IS UNDERVALUED COMPARED TO PEERS Trading at Lower EV/Sales and EV/EBITDA Ratios Compared to Peers GLOBAL GAMING COMPARABLES Price Mkt Cap LTM Rev EV/Sales EV/EBITDA P/E Ticker (Local) (US$) (US$) 2017 2018 2019 2017 2018 2019 2017 2018 2019 Newgioco Group Inc NWGI-US $ 0.35 37 35 1.3
Slide 16: Superior Risk Management
SUPERIOR RISK MANAGEMENT: INNOVATIVE, PROVEN AND EFFICIENT BETTING PLATFORM Improving our Handle to Revenue Conversion with Proactive Risk Management Tools Newgioco Group: Revenue Conversion (Gross Gaming Revenue as % of Handle) Robust, highly flexible, scalable Sportsbook engine Legacy Platform U
Slide 17: Guidance
GUIDANCE INITIAL GUIDANCE FOR 2019: Revenue growth of 25% to 35% Operating margins in the 10 to 15% range U.S. SaaS customers by the end of 2019: 50,000 active U.S. players Handle (exclusively Italy): at least US$500M OTCQB: NWGI 17
Slide 18: Balance Sheet
BALANCE SHEET As of 12/31/2018 12/31/2017 Cash and cash equivalents $6,289,903 $6,469,858 Other current assets (combined) $1,261,460 $1,380,555 Total Current Assets $7,551,363 $7,850,413 Restricted cash $1,560,539 $587,905 Intangible assets (Ulisse and Multigioco acquisitions) $12,583,457 $3,245,748
Slide 19: A Clean Capital Structure
A CLEAN CAPITAL STRUCTURE Capital Structure Ownership: Tightly Held by Insiders Debt Outstanding As of December 31, 2018 Bank line of credit $750,000 Management Debentures, net of discount Retail & Insiders 10% per annum, due 2020 15% 60% Convertible at $0.40 / share Callable at $0.80/ share $3,942,
Slide 20: Experienced Executive Leadership: Strong Board of Directors
EXPERIENCED EXECUTIVE LEADERSHIP: STRONG BOARD OF DIRECTORS Michele (Mike) Ciavarella CEO & Director Capital Markets Professional with Experience in Europe & Asia Elizabeth MacLean CFO A finance team leader with over 20 years of experience in the U.S. and U.K. and former Global Lead for Financial Sy
Slide 21: Investment Highlights
INVESTMENT HIGHLIGHTS Newgioco Group is a vertically-integrated leisure gaming technology company with fully-licensed online and land-based gaming operations now expanding into the bourgeoning U.S. sports betting market using its ELYS Betting Platform Proven operations in Italy provide a solid launc
Slide 22: Contacts
Newgioco Ralph Garcea 416-304-9125 VP, Corporate and Business Development r.garcea@newgiocogroup.com Hayden IR – Investor Relations Brett Maas 646-536-7331 CONTACTS Managing Partner brett@haydenir.com OTCQB: NWGI 22
Slide 23: Reconciliation to Adjusted EBITDA
RECONCILIATION TO ADJUSTED EBITDA Reconciliation to Adjusted EBITDA For the year ended December 31, 2018 2017 Comprehensive Income (Loss) (3,877,319) 1,532,190 Total other expenses 2,370,881 256,356 Foreign currency translation adjustment 831,011 (166,304) Income tax provision 1,102,701 972,924 EBID