Slide 1: Interim results 2017
Interim results 2017 24 August 2017
Slide 2: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group CEO Group CEO Interim results 2017 2
Slide 3: Proven Platform for Growth
PROVEN PLATFORM FOR GROWTH S T R O N G H 1 P E R F O R M A N C E D R I V E N B Y U N D E R LY I N G G R O W T H & R E C E N T M & A Double-digit underlying growth in the Gaming division Recent acquisitions integrated and performing in line with expectations Execution of omni-channel strategy c
Slide 4: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group CEO Group CEO Interim results 2017 4
Slide 5: Results Summary
RESULTS SUMMARY STRONG REVENUE AND EBITDA GROWTH 500 H1 2016 400 421.6 H1 2017 € Millions 300 337.7 200 170.9 100 143.8 125.5 78.3 0 Total revenue Adj. EBITDA Adj. Net Profit +25% +19% +60% Interim results 2017 5
Slide 6: Results Summary at Constant Currency
RESULTS SUMMARY AT CONSTANT CURRENCY D O U B L E - D I G I T U N D E R LY I N G G R O W T H 500 H1 2016 400 437.7 H1 2017 € Millions 300 337.7 200 177.9 100 143.8 147.8 122.1 0 Total revenue Adj. EBITDA Adj. Net Profit Incl. acquisitions +30% +24% +20% Excl. acquisitions +10% +11% +11% Interim resul
Slide 7: Performance by Vertical
PERFORMANCE BY VERTICAL U N D E R LY I N G G R O W T H AT C O N S T A N T C U R R E N C Y D R I V E N B Y C A S I N O Including Acquisitions Excluding Acquisitions H1 H1 Change H1 H1 Change 2016 2017 % 2016 2017 % Casino 186.7 235.5 26% 185.9 227.1 22% Services 76.5 72.2 -6% 76.2 71.5 -6% Sport 19.0
Slide 8: Margin Analysis
MARGIN ANALYSIS I N L I N E W I T H G U I D A N C E G I V E N AT F Y 2 0 1 6 H1 2016 H1 2017 Revenue Adj. Margin Revenue Adj. Margin EBITDA EBITDA Gaming 306.5 137.9 45% 376.5 154.8 41% Reported Financials 31.3 5.9 19% 45.1 16.1 36% Group 337.7 143.8 43% 421.6 170.9 41% CC Group 337.7 143.8 43% 437.
Slide 9: Gaming Margin Analysis
GAMING MARGIN ANALYSIS “CORE” GAMING MARGIN CONTINUES TO INCREASE INCLUDING ACQUISITIONS EXCL. ACQUSITIONS H1 2016 H1 2017 51.3% 50.0% 50.7% 48.9% 49.4% 49.1% 48.3% 47.5% 47.5% 48.1% 45.0% 45.0% 44.8% 42.5% 43.0% 41.1% 40.0% Total Gaming excl. WL excl. WL / Casual Total Gaming excl. WL excl. WL / Ca
Slide 10: Cost Analysis
COST ANALYSIS EXCLUDING ACQUISITIONS €m H1 2016 H1 2017 Change Adj. operating costs 192.8 203.9 +6% Revenue-driven costs 17.9 5% 37.4 10% Adj. operational costs excl. revenue-driven costs 174.9 166.6 Employee-related costs 95.4 55% 89.9 54% -6% Cost of services 23.0 13% 24.1 15% +5% Operational mark
Slide 11: Net Profit and EPS
NET PROFIT AND EPS N E T P R O F I T A N D E P S G R O W T H B R O A D LY I N L I N E W I T H E B I T D A G R O W T H Adjusted net profit up 60% on reported basis and 20% at constant currency reported net profit impacted by exchange rate differences Growth in adjusted net profit lower than gro
Slide 12: Cashflows
CASHFLOWS S T R O N G , G R O W I N G A N D S U S TA I N A B L E C A S H F L O W S Net cash from operations up 48% at €147.3m (H1 2016: €99.5m) Cash conversion in H1 2017 of 79% (H1 2016: 78%) from adjusted EBITDA (when adjusted for jackpots, security deposits and client equity) Established an
Slide 13: Cash Flow Bridge
CASH FLOW BRIDGE 400 68 392 376 300 36 136 € Millions 48 13 200 100 0 December 2016 Ordinary dividends Acquisitions less net Capex and capitalised Exchange rate and Net cash provided by June 2017 Adjusted Adjusted gross cash* cash acquired R&D other operating activities gross cash* *Adjusted gross c
Slide 14: Balance Sheet
BALANCE SHEET SIGNIFICANT FLEXIBILITY €376m of gross cash at June 2017 (Dec 2016: €392m) €6.4 million from Plus500 dividend, received at the beginning of July 2017 €241.8m of available for sale investments (Ladbrokes, Plus500) as at June 2017 vs €230.3m at December 2016 significant increas
Slide 15: Outlook
OUTLOOK POINTS TO NOTE 2017 driven by both underlying growth and from acquisitions made in 2016 Adverse currency movements since 2016 preliminary results Lower contribution expected from Asia in H2 following very strong H1 Material loss expected from Sun Bingo contract in 2017 Confidence i
Slide 16: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group CEO Group CEO Interim results 2017 16
Slide 17: TradeTech Group Results
TRADETECH GROUP RESULTS SIGNIFICANT IMPROVEMENT IN H1 2017 Including CFH Excluding CFH €m H1 2016 H1 2017 Change H1 2017 Change Revenue 31.3 45.1 44% 32.6 4% Adj. EBITDA 5.9 16.1 173% 13.2 124% Margin 18.8% 35.6% 40.5% Interim results 2017 17
Slide 18: TradeTech Group Results: KPI Momentum
TRADETECH GROUP RESULTS KPI MOMENTUM CONTINUED B2C Markets.com H1 16 H1 17 Change Revenue ($m) 22.0 20.9 -5% Active customers (000s) 15.7 19.4 24% First time depositors (000s) 5.4 10.5 94% Actual Pro forma H1 16 including CFH B2B KPIs H1 16 H1 17 Change H1 16 H1 17 Change Revenue ($m) 10.7 28.0 162%
Slide 19: Regulatory Update
REGULATORY UPDATE S T AY I N G A H E A D Fully compliant in current regulatory environment and well positioned for future regulatory changes Enlarged staff in compliance, verification & support across B2C & B2B CySEC enhancements already in place Leverage ratio compliant Balance protection
Slide 20: Acquisition of Alpha
ACQUISITION OF ALPHA ASSETS ENHANCE TRADETECH B2B OFFERING Risk & Trading management, technology & IP Assets include: Proprietary trading and risk management technology AlphaPro Trading Platform Portfolio of international B2B clients Trading, risk, dealing and business development teams
Slide 21: The Value Chain
THE VALUE CHAIN Download Mobile Web Mobile Web Mobile Web CRM & MT4 Other Back office Dealing & Risk Management capabilities Aggregation and connectivity technology BI Liquidity & pricing B-book flow Broker’s Risk book TradeTech A-book flow Risk book “The street” Interim results 2017 21
Slide 22: Reflect the full breadth of services across B2C & B2B value chain
• Reflect the full breadth of services across B2C & B2B value chain • Brand recognition across the industry • TradeTech Group: • Markets.com – B2C and B2B trading platforms • MarketsPro – high net worth B2C brand • TradeTech Alpha – bespoke B2B trade and risk services • CFH – tier 1 liquidity servic
Slide 23: Outlook for TradeTech Group
OUTLOOK FOR TRADETECH GROUP BUILDING BLOCKS FOR FULL FINANCIAL TURNKEY SOLUTION Positioning our B2C business as a home for traders providing insight, tools and capabilities to traders product innovation Significant B2B upside to our model Maintaining sustainable organic growth across the b
Slide 24: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group Group CEO Interim results 2017 24
Slide 25: Key Drivers of Gaming Performance
KEY DRIVERS OF GAMING PERFORMANCE 2 8 % G R O W T H AT C O N S T A N T C U R R E N C Y Underlying growth of 11% driven by Casino Recent M&A integrated on plan and contributing to growth Eyecon completed during the period “Locking-in” future growth Key licensee renewals in H1 including Padd
Slide 26: Innovation Never Stops
INNOVATION NEVER STOPS SIGNIFICANT INVESTMENT INTO FUTURE BUILDING BLOCKS All Tier 1 operators are now secured for a significant period of time Integration of recent acquisitions to deepen the omni-channel offering Significant investment into existing relationships in light of increased compet
Slide 27: Progress in a Changing Landscape
PROGRESS IN A CHANGING LANDSCAPE S T R AT E G I C M I L E S T O N E S W I T H T I E R 1 L I C E N S E E S Launched Casino & Poker in Spain Strategic partner in PPB integration Launched Casino & Poker in Extension of SSBTs with PBS Bulgaria Renew with PBS Sky Italy Casino & Live Casino
Slide 28: Progress in a Changing Landscape
PROGRESS IN A CHANGING LANDSCAPE S T R AT E G I C M I L E S T O N E S W I T H T I E R 1 L I C E N S E E S eFortuna Codere First Casino games in Czech Republic Launch Casino in Spain Launch of Live Casino & Virtual Sports Italy – Sisal & Snai Ray – Finland DC & Age of the Gods games s
Slide 29: Extending the Omni-Channel Offering
EXTENDING THE OMNI -CHANNEL OFFERING I N T E G R AT I O N O F A C Q U I S I T I O N S D E E P E N S O M N I - C H A N N E L O F F E R I N G Not just games offered on mobile and web but a true Eco-System led by brands One experience, one journey, one single view across all channels and brands S
Slide 30: Extending the Omni-Channel Offering: PBS
EXTENDING THE OMNI -CHANNEL OFFERING P B S D R I V I N G P R O D U C T I N N O VAT I O N I N S P O R T S Industry first Retail Mobile App - Bet Tracker Entrenching existing UK network Paddy Power & Betfred renewals Independent renewals Expansion into LATAM & Europe OPAP in Greece Roman
Slide 31: Extending the Omni-Channel Offering: Riga Facility
EXTENDING THE OMNI -CHANNEL OFFERING N E W S T AT E - O F - T H E - A R T F A C I L I T Y I N R I G A Worlds largest Live Casino studio migration from old facility completed in H1 offering powered by IMS best-in-class Live offering central to omni-channel offering Long term renewals & new
Slide 32: Why White-Label
WHY WHITE-LABEL L E V E R A G I N G E X I S T I N G S C A L E A N D R E S O U R C E S T O G E N E R AT E C A S H White-label contracts tend to be driven by the brand holder rather than by Playtech Leverages Playtech scale and resource in addition to providing incremental software revenues Gene
Slide 33: Sun Bingo
SUN BINGO G R E E N - S H O O T S O F I M P R O V E M E N T B U T N O S I LV E R B U L L E T Migration successful from technological perspective but challenges in migrating all VIPs Changes made in Q2 to management and offering improved KPIs and performance However, full benefit of changes mad
Slide 34: Current Trading and Outlook
CURRENT TRADING AND OUTLOOK A P R O V E N P L AT F O R M F O R G R O W T H Current trading in line with our expectations Licensee pipeline focussed on large, high-quality omni-channel opportunities M&A pipeline remains healthy with active ongoing discussions Confidence in a strong performanc
Slide 35: Investor and Analyst Day 2017
INVESTOR AND ANALYST DAY 2017 I N V I T AT I O N T O R I G A November 2017 Full tour of new facility Meet the team driving Live forward Opportunity to spend time with Group management Invitations to follow Interim results 2017 35
Slide 36: Appendices
Appendices Interims results 2017
Slide 37: Cost Analysis
COST ANALYSIS INCLUDING ACQUISITIONS €m H1 2016 H1 2017 Change Adj. operating costs 193.9 250.6 +29% Revenue-driven costs 18.1 5% 53.2 13% Adj. operational costs excl. revenue-driven costs 175.8 197.4 Employee-related costs 96.0 54% 105.9 54% +10% Cost of services 23.1 13% 27.5 14% +19% Operational
Slide 38: Gaming Mobile Penetration
GAMING MOBILE PENETRATION S I G N I F I C A N T G A P B E T W E E N U K M O B I L E P E N E T R AT I O N A N D E L S E W H E R E 60 56% 54% 53% 50 44% 46% 41% 39% 38% 40 36% 33% 29% 30% 29% 30% 30 23% 20% 18% 20 15% 16% 12% 13% 11% 10 8% 4% 4% 4% 4% 0 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015
Slide 39: Gaming Mobile Penetration
GAMING MOBILE PENETRATION INCREASE FROM 27% in H1 2016 TO 32% OF SOFTWARE REVENUES IN H1 2017 PRODUCT VERTICAL H1 2016 (€M) H1 2017 (€M) GROWTH % Casino 42.8 78.9 84% Sports 14.2 9 -37% Bingo 2.3 2.8 20% Poker 0.3 0.6 88% Total 59.5 91.2 53% Interim results 2017 39
Slide 40: Gaming Customer Concentration
GAMING CUSTOMER CONCENTRATION N E W P R E S E N T AT I O N B E T T E R R E P R E S E N T S C U S T O M E R D I V E R S I F I C AT I O N Licensees 2015 2016 H1 2017 Top 5 45% 36% 39% Top 10 68% 54% 57% Top 15 77% 66% 70% Interim results 2017 40
Slide 41: Thank You
Thank You Interims results 2017