Slide 1: Preliminary Results for the 12 Months Ended 30 June 2018
(x? ank Group WE'RE AME The Rank Group Plc Rank Group Plc PRELIMINARY RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2018
Slide 2: Agenda
Agenda Operational Performance John O'Reilly, Chief Executive Financial Performance James Pizey, Interim Chief Financial Officer 2018/19 Priorities John O'Reilly, Chief Executive Q&A 2 PRELIMINARY RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2018 Re vant Group
Slide 3: John O'Reilly, Chief Executive
(K® Rank Group JOHN O'REILLY Chief Executive
Slide 4: Summary
Summary * Group performance in line with the Board’s revised expectations * Challenging year driven by a disappointing performance from Grosvenor’s casinos ¢ Impact of enhanced due diligence on both Grosvenor’s venues and online * Mecca’s venues performed better than expected * Digital growth, reven
Slide 5: Operational review: Grosvenor Casinos Venues
Operational review: Grosvenor Casinos Venues * Revenue down 6.1% YOY; H2 down 9.9% — Visits down 9.4%; H2 down 11.7% — Prescriptive approach to enhanced due diligence severely hit higher value customer visits and revenue — £4.9m lower contribution from top 150 customers versus 2016/17 Revenue Operat
Slide 6: Operational review: Mecca Venues
Operational review: Mecca Venues * Revenue down 2.6% YOY — Visits down 7.9% — Main stage bingo sales grew by 4.9% * New formats gaining traction Rolling six month average main stage bingo revenue (£m) 3.2 3.0 28 2.6 24 JJA'S ON DIS FMAM JJSASOND|JS FMAM J Revenue®) Operating profit“ £m 2017/18 2016/
Slide 7: Operational review: UK digital
Operational review: UK digital Gross gaming revenue up 9.9% Net gaming revenue up 6.9% First Time Depositors up 1.0% at 224k Unique actives up 7.0% at 428k Incremental Remote Gaming Duty on bonuses of £2.5m YOY Operating profit down £1.8m; down 7.9% £m 2017/18 = 2016/17 meccabingo.com 75.0 67.6 gros
Slide 8: Operational review: UK digital
Operational review: UK digital * Grosvenorcasinos.com - impacted H2 revenue — Hl up 26.9%; H2 down 6.5% — Enhanced customer due diligence — Customer contact suppression issue * Meccabingo.com - positive revenue trends — Hl up 9.1%; H2 up 12.8% — Successful ‘Meccarena’ campaign 8 PRELIMINARY RESULTS
Slide 9: Operational review: Enracha and YoBingo
Operational review: Enracha and YoBingo * Enracha venues euro revenue up 4.5% — Visits up 1.1% — Operating profit £7.5m; up 10.3% * Enracha and YoBingo digital revenues £2.2m and operating loss of £1.0m * YoBingo revenue running ahead of acquisition plan Rolling six month average revenue - Enracha v
Slide 10: James Pizey, Interim Chief Financial Officer
(x9, Rank Group JAMES PIZEY Interim Chief Financial Officer
Slide 11: Financial headlines
Financial headlines 2017/18 2016/17 % LfL revenue® £738.0m £755.2m (2.3)% Operating profit” £77.0m £83.5m (7.8)% EBITDA” £120.0m £128.8m (6.8)% Net debt® £9.3m £12.4m (25.0)% Adjusted EPS” 15.0p 16.0p (6.3)% Dividend per share 7.45p 7.30p 2.1% * Challenging year for Grosvenor venues * Continued stro
Slide 12: Revenue & operating profit
Revenue & operating profit Revenue® Operating profit “” £m 2017/18 2016/17 2017/18 2016/17 Grosvenor Casinos - venues 373.0 397.2 48.6 52.1 Mecca - venues 208.1 213.6 28.6 29.9 UK digital 122.5 111.5 20.9 22.7 Enracha SIS 32.8 6.5 6.2 Central costs = - (27.6) (27.4) Total 741.1 755.1 77.0 83.5 ¢ Gro
Slide 13: 2017/18 Operating Profit Bridge
2017/18 Operating Profit Bridge £m Reduction in Reduction in other taxes depreciation and and duties amortisation (0,3) Reduction in = labour costs 5.2 Others 77.0 (2.5) (1.6) (14.0) Addition Increase in Revenue (2.2) RGD on property . digital costs decrease Increase in g revenue customer incentives
Slide 14: Exceptional items
Exceptional items £m 2017/18 2016/17 Impairment charge (13.9) (6.7) Impairment reversal 1.8 2.5 Onerous leases (9.1) 14.7 Closure of venues (3.7) - Group restructuring (1.6) (8.8) Acquisition costs (0.4) (0.7) Total exceptionals pre tax (26.9) 1.0 Taxation 49 (1.2) Finance costs and other financial
Slide 15: Statutory profit and loss
Statutory profit and loss £m 2017/18 2016/17 Profit from operations 77.0 83.5 Net interest payable (2.8) (4.8) Profit before taxation and exceptional items 74.2 78.7 Exceptional items (27.5) 1.0 Profit before taxation 46.7 79.7 Taxation (10.8) (16.8) Profit for the year 35.9 62.9 . . . Effective tax
Slide 16: Cashflow and net debt
Cashflow and net debt £m 2017/18 2016/17 Cash inflow from operations 109.4 128.4 Net cash payments in respect of provisions and exceptional items (7.0) (12.1) Cash generated from operations 102.4 116.3 Capital expenditure (37.0) (42.7) Acquisition of YoBingo (16.5) - Net interest and tax (16.8) (17.
Slide 17: Capital investment
Capital investment £m 2017/18 2016/17 Grosvenor Casinos - venues 9.2 171 Mecca - venues 5S 9.3 UK digital 9.0 2.3 Enracha 1.0 1.2 Central 12.5 12.8 Total 37.0 42.7 Purchase of Stockton freehold 2018/19 forecast c.£45m Refurbishments completed at London’s Rialto and Golden Horseshoe casinos Grosvenor
Slide 18: Financial strength
Financial strength ° Net debt reduced 25% to £9.3m, despite acquisition and increase in dividend paid ° £90.0m of undrawn revolving credit facility at year end, £50.0m Term Loan amortisation due in 2018/19 * Continued strong cash generation, EBITDA of £120.0m 18 PRELIMINARY RESULTS FOR THE 12 MONTHS
Slide 19: John O'Reilly, Chief Executive
(K® Rank Group JOHN O'REILLY Chief Executive
Slide 20: Rank Group - key areas of focus to drive improvement
Rank Group - key areas of focus to drive improvement * Focus on customer * Data driven learnings * Performance culture * Delivery of key projects on time and to budget ° Regulatory impacts * Cost efficiencies 20 PRELIMINARY RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2018 Ke vant Group
Slide 21: Our plan of action
Our plan of action 1. Increase our focus on the customer 2. Grow our digital business 3. Drive cost efficiencies 4. Improve our organisational capability 21 PRELIMINARY RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2018 Ke vant Group
Slide 22: 1. Increase our focus on the customer
1. Increase our focus on the customer * ‘Project Experience’ driving service improvements in Grosvenor and Mecca venues * Segmented approach to Grosvenor product and service offering ¢ A forensic approach to capital investment - Soames (Manchester), St Giles (London) and Barracuda (London) * Develop
Slide 23: 2. Growing our Digital Business
2. Growing our Digital Business * Key improvements to user journeys * Increasing marketing investment * New content management system to improve real time product and service offering * Omni-channel service rollout in Grosvenor * Successful Meccarena campaign, relaunch in September 2018 * New produc
Slide 24: 2. Growing our Digital Business - YoBingo
2. Growing our Digital Business - YoBingo * Net gaming revenue up 43.8% Rolling six month average net gaming revenue (€m) * Customer numbers up 39.8% “ 1.2 ¢ Ahead of acquisition plan - 08 0.6 0.4 an 0.0 ASOND FMAM AS ON Plo (M1) Unaudited for FY 16/17 and FY 17/18 24 PRELIMINARY RESULTS FOR THE 12
Slide 25: 3. Driving Cost Efficiencies
3. Driving Cost Efficiencies * Commencing a detail review of the cost base * Cost opportunities include extracting more value from procurement; driving headcount efficiencies; increasing automation ° Simplifying the organisational structure will accelerate delivery of our plan 25 PRELIMINARY RESULTS
Slide 26: Transformation Programme
Transformation Programme * Significant underlying potential within the Group ° Transformation Programme kicking off to identify and validate the key initiatives to grow revenue and cut costs ° Key initiatives will come from within the business ° Aclear company-wide plan of action, tight governance f
Slide 27: 4. Improving Our Organisational Capability
4. Improving Our Organisational Capability - strengthening the team Jonathan Greensted Jim Marsh Chief Information Officer Chief Transformation Officer * Digital transformational * Turnaround and and restructuring restructuring specialist specialist . « McKinsey & Company, * Travelodge and multi- Ca
Slide 28: Summary and outlook
Summary and outlook * Significant opportunities to grow revenue and cut costs ° Transformation Programme launched to develop and drive a clear plan of action ¢ Strengthened capability of the leadership team * More detail on the plan and our progress at the 2018/19 interim results * Current trading -
Slide 29: Appendices
(RP eank croup APPENDICES
Slide 30: Strategy update
Strategy update 30 PRELIMINARY RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2018 (Krank Group
Slide 31: 1. Creating a compelling multi-channel offer
1. Creating a compelling multi-channel offer 2017/18 progress * Trial of Grosvenor’s single account and wallet, Grosvenor One, in Grosvenor’s Stockport casino; * Dual play launched, the live streaming of electronic roulette and baccarat at the Victoria casino to the Group’s digital channels; + Roll-
Slide 32: 2. Building digital capability and scale
2. Building digital capability and scale 2017/18 progress Acquisition of YoBingo to increase Rank’s digital presence in a high growth and regulated Spanish digital market; Enracha.es soft launched; New Live Casino app successfully launched in August 2017 and performing well; New Grosvenor and Mecca
Slide 33: 3. Developing our venues
3. Developing our venues 2017/18 progress * Opened three experimental Luda venues. Ongoing reviews of each + £2.2m of property savings realised in the year venue is underway to address under performance with a focus on following negotiations with landlords; their local market; * Condensed Mecca F&B
Slide 34: 4. Investing in our brands and marketing
4. Investing in our brands and marketing 2017/18 progress Launch of a new fully integrated ‘Meccarena’ marketing campaign, including TV advertising; New Customer Relationship Management (‘CRM’) system launched; Olly Raeburn appointed as chief marketing officer; Improvements made to the Luda proposit
Slide 35: 5. Use technology to drive efficiency and improve customer service
5. Use technology to drive efficiency and improve customer service 2017/18 progress Four electronic roulette pricing experiments were carried out across eight casinos with the aim of improving efficiency and suitability of the offer; A review of rostering software was carried out and concluded that
Slide 36: Group datasheet
Group datasheet FY H1 FY H1 FY H1 2017/18 2017/18 2016/17 2016/17 2015/16 2015/16 Revenue (£m) 7411 379.6 755.1 378.6 753.0 374.2 - YOY growth (1.9)% 0.3% 0.3% 1.2% 2.0% 3.5% Operating profit (£m) 77.0 41.7 83.5 36.6 82.4 40.4 - YOY growth (7.8)% 13.9% 1.3% (9.4)% (1.9)% (1.0)% Operating margin 10.4
Slide 37: Grosvenor Casinos Venues datasheet
Grosvenor Casinos Venues datasheet FY H1 FY H1 FY H1 2017/18 2017/18 2016/17 2016/17 2015/16 2015/16 Casino licences: London 9 9 9 9 9 9 Provinces 54 54 54 54 56 58 Belgium 1 1 2 2 2 2 Total 64 64 65 65 67 69 Non-trading licences 10 12 12 12 12 10 Revenue (£m) 373.0 197.2 397.2 202.0 408.1 2051 Oper
Slide 38: Grosvenor Casinos Venues - London datasheet
Grosvenor Casinos Venues - London datasheet FY H1 FY HI FY H1 2017/18 2017/18 2016/17 2016/17 2015/16 2015/16 Revenue (£m) 123.7 671 140.1 72.0 150.3 75.2 Operating profit (£m) 17.6 12.2 24.6 13.6 31.7 16.0 Operating margin 14.2% 18.2% 17.6% 18.9% 21.1% 21.3% Visits (000s) 1,303 679 1,398 732 1,482
Slide 39: Mecca Venues datasheet
Mecca Venues datasheet FY H1 FY HI FY H1 2017/18 2017/18 2016/17 2016/17 2015/16 2015/16 Venues 85 85 85 85 87 87 Revenue (£m) 20811 1041 213.6 108.0 221.5 109.8 Operating profit (£m) 28.6 12.7 29.9 13.3 32.9 14.3 Operating margin 13.7% 12.2% 14.0% 12.3% 14.9% 13.0% EBITDA (£m) 40.2 18.6 41.8 19.2 4
Slide 40: UK Digital datasheet
UK Digital datasheet FY H1 FY H1 FY H1 2017/18 2017/18 2016/17 2016/17 2015/16 2015/16 Revenue (£m) 122.5 60.6 1.5 52.4 96.7 471 - meccabingo.com 75.0 361 67.6 33.1 66.2 33.2 - grosevenorcasinos.com 475 24.5 43.9 19.3 30.5 13.9 Operating profit (£m) 20.9 11.4 22.7 73 13.9 8.0 Operating margin 171% 1
Slide 41: Enracha venues datasheet
Enracha venues datasheet FY H1 FY HI FY H1 2017/18 2017/18 2016/17 2016/17 2015/16 2015/16 Venues 9 9 9 9 9 9 Revenue (£m) 5S 17.5 32.8 16.2 26.7 12.2 Operating profit (£m) 75 3.6 6.7 31 3.8 15 Operating margin 21.2% 14.7% 18.9% 17.9% 13.5% 11.5% EBITDA (£m) 8.8 3.4 7.7 3.7 51 2.2 Visits (000s) 2,00