Inspired Entertainment, Inc. · NASDAQ:INSE
Inspired Entertainment — Investor Presentation (March 2020)
23 slides from Inspired Entertainment's investor presentation, Mar 16, 2020
Slide 1: Investor Presentation March 2020
INVESTOR PRESENTATION March 2020
Slide 2: Legal Matters/Non-GAAP Financial Disclosures
Legal Matters/Non-GAAP Financial Disclosures Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our busines
Slide 3: Highlights
Highlights A leading B2B provider of gaming, virtual sports, and leisure content across retail, online and mobile – growth vehicles for regulated lottery, betting and gaming operators worldwide. Recurring, participation-based long term contracts account for a majority of revenue. Meaningful acquisit
Slide 4: Inspired's Historic Growth
Inspired’s Historic Growth Historical Adjusted EBITDA(1)(2) (millions of US$) LTM September 30 LTM December 31(3) $150.0 50.0% 40.1% 45.0% $130.0 34.4% 40.0% 33.1% 34.3% (5) 31.9% $110.0 35.0% $90.0 30.0% $70.0 25.0% $52.5 $49.0 $41.5 20.0% $37.0 $50.0 $33.2 15.0% $30.0 10.0% $10.0 5.0% ($10.0) FY15
Slide 5: Strategy Leading to Sustained Growth
Strategy Leading to Sustained Growth Operational/cost-reduction efforts to continue mitigation of the effects of the reduction in maximum B2 stakes to £2 in the UK LBO market implemented on April 1, 2019 (the “Triennial Implementation”) Generation of new Gaming, Virtuals and Interactive business to
Slide 6: Key Drivers in Inspired Businesses
Key Drivers in Inspired Businesses ACQUIRED BUSINESSES % OF Q4 2019 REVENUE (1) 36.1% 14.4% (2) 49.5% Regulated Gaming Cross-Selling Opportunities, Leverage Top-Performing Globally Shifting Share KEY BUSINESS from Fewer Casinos to Rapid Growth of Legalized Content in Rapidly Synergies and Sports Bet
Slide 7: Gaming
GAMING • Gaming growth shifting from large casinos to many distributed venues • Inspired is a leader in server based gaming with 33,000+ machines live and top games in key jurisdictions: • UK • Greece • Italy • US (recent launch in Illinois) • Management team with combined 80+ years of experience gr
Slide 8: Inspired Outperforms in Greece
Inspired Outperforms in Greece True Comparison Between Suppliers Shows Inspired’s Relative Outperformance GREECE INSPIRED MACHINES OUTPERFORMED AT LAUNCH(1) #1 Performing Game 2017 LAUNCH 5 of the TOP 10 Games Four terminal suppliers installed machines at the same time in BASED ON PERFORMANCE OPAP b
Slide 9: Well Positioned for North America Route Markets
Well Positioned for North America Route Markets Bringing Innovation to Stagnant Marketplace • Inspired’s Valor™ terminal commercially entered Illinois in Q4 2019 • Over 260 Valor terminals sold since launching in Q4 2019 • 116 in Q4 and 144 in Q1 (through March 10, 2020) • Nearly every major Illinoi
Slide 10: Virtuals
VIRTUALS • Creator and world leader in Virtual Sports • Popular in betting shops in the UK, Italy and Greece • Successful retail, online and mobile deployments • Continuing North American expansion 44,000+ retail channels 100+ websites
Slide 11: Successful Launch of Virtual Sports in Greece
Successful Launch of Virtual Sports in Greece Virtuals Added $600 Million in Additional Turnover in Greece in first year GREECE FIRST 12 MONTHS SINCE LAUNCH $600M Additional turnover >22,000 OPAP launched with one Virtuals channel in May 2017 New players >$10M Agency commissions Source: According to
Slide 12: Interactive
INTERACTIVE • Online gaming operators use our top-performing game titles and award-winning Virtual Sports content online and on mobile devices worldwide. • Expected to be a high-growth, high-margin recurring revenue business, especially with addition of Acquired Businesses. • Launched 6 North Americ
Slide 13: Novomatic Technology Group (NTG) Acquisition
Novomatic Technology Group (“NTG”) Acquisition Inspired closed the acquisition in a cash transaction for $120.0 million on October 1, 2019 • NTG is a leading supplier of gaming terminals to pubs, arcades, service areas and holiday resorts in the UK. • Acquisition combines complementary and non-overl
Slide 14: Analog to Digital Conversion
Analog to Digital Conversion Conversion to digital has improved revenue and margins historically at NTG ANALOG MACHINES DIGITAL MACHINES Multiple games per machine Manual updates Download games remotely 1 game per machine Refresh content frequently Lower daily cash box Higher daily cash box Manual c
Slide 15: Potential Revenue Opportunities
Potential Revenue Opportunities Inspired Customers NTG Customers Accelerate NTG’s Capitalize on converting Leverage top NTG titles development initiatives NTG top performing Bring virtual sports to across Inspired’s UK to transition the pub game library for online NTG’s customer base SBG customers g
Slide 16: 4Q19 Highlights
4Q19 Highlights • Legacy Business • Sequential year-over-year improvement in Gaming in UK LBOs following Triennial Implementation • Strong overall performance across Gaming, Virtuals and Interactive • Adjusted EBITDA Margin increased to 36.4% from 34.2% • Acquired Businesses • Pub segment converting
Slide 17: Market Capitalization
Market Capitalization Cap Table As of March 11th, 2020 (unaudited) Actual (US$ in millions, except per share data) 9/30/19 Cash $29.1 Senior Bank Debt(1) 273.1 Capital Lease, Pension Liability & Other Liabilities(2) 8.7 Total Debt $281.8 Net Debt (a) $252.7 Number of Shares(3) (in millions) 22.231 S
Slide 18: Appendix
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Slide 19: Financial Summary
Financial Summary Twelve Months Ended December 31, 2019 Inter Server Based Virtual Acquired unaudited Company Corporate Total Gaming Sports Entities US$ millions Eliminations Revenue 84.5 37.0 32.9 (1.0) - 153.4 Cost of Sales, excluding D&A (26.7) (3.2) (7.2) 1.0 - (36.1) Gross Profit 57.8 33.8 25.7
Slide 20: Historical Consolidated Income Statement
Historical Consolidated Income Statement Year Ended December 31st, US$ millions 2019A 2018A 2017A 2016A Revenue: Service 134.9 130.6 112.6 107.4 Hardware 18.4 10.1 14.3 8.6 Total revenue 153.4 140.7 126.9 116.0 Cost of sales, excluding depreciation and amortization: Cost of service (23.5) (23.4) (17
Slide 21: Non-GAAP Reconciliation: Adjusted EBITDA
Non-GAAP Reconciliation: Adjusted EBITDA Year Ended December 31st, US$ millions 2019A 2018A 2017A 2016A Net Loss (37.0) (21.1) (30.9) (65.4) Items Relating to Legacy Activities Pension Charges 0.6 0.5 0.6 0.6 (Credit) / Costs Relating to Former Operations - - 0.1 (0.1) Litigation Settlement - 1.4 -
Slide 22: Non-GAAP Reconciliation: Adjusted Revenue and SBG Adjusted Revenue
Non-GAAP Reconciliation: Adjusted Revenue and SBG Adjusted Revenue Non-GAAP Reconciliation: Adjusted Revenue Year Ended December 31st, US$ millions 2019A 2018A 2017A 2016A Reported Revenue per Financial Statements 153.4 140.7 126.9 116.0 Less Nil Margin Sales - (4.0) (4.8) (0.5) Less Analogue Revenu
Slide 23: Inspired Essential Entertainment
~, INSPIRED ESSENTIAL ENTERTAINMENT
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