Slide 1: Interim results 2015
Interim results 2015 27 August 2015
Slide 2: Agenda
AGENDA Financial review Operational and Highlights Q&A strategic review The Financials division Alan Jackson Ron Hoffman Mor Weizer Chairman Chief Financial Officer Chief Executive Officer Interim results 2015 2
Slide 3: Delivering on our strategy
DELIVERING ON OUR STRATEGY Continued strong underlying growth in the Gaming division Creation of the Financials division through strategic M&A Strong financial performance across all key metrics Performance and momentum provides confidence in continued strong growth for the remainder of 2015
Slide 4: Strong financial performance
STRONG FINANCIAL PERFORMANCE 33% 16% 19% 8% Total revenue Adjusted EBITDA Adjusted EPS DPS up 33% up 16% up 19% up 8% Interim results 2015 4
Slide 5: Agenda
AGENDA Financial review Operational and Highlights Q&A strategic review The Financials division Alan Jackson Ron Hoffman Mor Weizer Chairman Chief Financial Officer Chief Executive Officer Interim results 2015 5
Slide 6: Results summary
RESULTS SUMMARY 300 H1 2014 286.0 H1 2015 € Millions 200 214.4 100 112.9 115.0 97.6 96.8 0 Total revenue Adj. EBITDA Adj. Net Profit +33% +16% +19% Interim results 2015 6
Slide 7: Underlying results
UNDERLYING RESULTS S T R O N G G R O W T H O N A N U N D E R LY I N G B A S I S 300 H1 2014 268.2 H1 2015 200 212.8 € Millions 100 114.3 118.6 97.4 96.9 0 Total revenue Adj. EBITDA Adj. Net Profit Excl. acqs / POC +29% +26% +40% Excl. white-label +25% +32% +46% At CC +10% +10% +9% Interim results 20
Slide 8: Revenue growth by vertical
REVENUE GROWTH BY VERTICAL A STRONG PERFOMANCE ACROSS KEY VERTICALS IN H1 +€32.7m +€12.6m +€3.8m +€9.2m +€1.7m -€1.4m 40% 159% 28% 30% 20% 21% 20% 0% -19% -20% Casino Services Sport Land-based Bingo Poker Interim results 2015 8
Slide 9: Performance of Markets Limited
PERFORMANCE OF MARKETS LIMITED A G O O D H A L F B O T H F I N A N C I A L LY A N D F O R K P I s Performance in H1 2015 Performance in May and June 2015 $m H1 ’15 H1 ’14 Chg $m 2015 2014 Chg Net revenue 48.2 30.2 60% Net revenue 11.6 12.3 -5% Actives – CFDs (000s) 36.0 26.7 34% Actives – CFDs (000s
Slide 10: Low market volatility in May and June
LOW MARKET VOLATILITY IN MAY AND JUNE M A R K E T S ’ R E V E N U E S I M PA C T E D I N F I N A L T W O M O N T H S O F H 1 28 24 20 16 12 8 Jul 14 Sep 14 Nov 14 Jan 15 Mar 15 May 15 Jul 15 Source: Chicago Board Options Exchange SPX Volatility Index Interim results 2015 10
Slide 11: Margin analysis
MARGIN ANALYSIS M A R G I N S I M PA C T E D B Y A C Q U S I T I O N S , P O C A N D W H I T E - L A B E L 2015 EBITDA margin 50% 48.6% 45% 45.5% 44.6% 45.4% 40% 42.6% 39.5% 35% At CC Excluding Adjusted 2014 adjusted acquisitions white-label EBITDA Excluding margin Excluding POC EBITDA margin + + +
Slide 12: Cost analysis
COST ANALYSIS €m H1 2015 H1 2014 Adj. operational costs 173.1 116.8 Revenue-driven costs 28.8 10% 17.1 8% Adj. operational costs excluding revenue-driven costs 144.3 99.7 Employee-related costs 84.9 59% 62.7 63% Cost of services 20.7 14% 14.4 14% Admin and office costs 13.7 10% 10.5 11% Other costs
Slide 13: Cashflows
CASHFLOWS H I G H C A S H G E N E R AT I O N A N D C A S H C O N V E R S I O N Operating cash inflows of €96.4m in H1 Further inflows from financing activities net proceeds of €313m through an equity placing to fund future acquisitions €240m of new debt facilities Net cash outflows from in
Slide 14: Balance sheet
BALANCE SHEET R E TA I N I N G S I G N I F I C A N T F I N A N C I A L F L E X I B I L I T Y Over €1bn committed on strategic M&A in the first half Total assets more than doubled to stand at c.€2bn Maximum earn-outs totalling c.€260m €240m of new facilities and net proceeds of €313m from equ
Slide 15: Agenda
AGENDA Financial review Operational and Highlights Q&A strategic review The Financials division Alan Jackson Ron Hoffman Mor Weizer Chairman Chief Financial Officer Chief Executive Officer Interim results 2015 15
Slide 16: Global financial trading
GLOBAL FINANCIAL TRADING Increased acceptance of CFDs Absence of similar investment products as an asset class Increase in global online penetration Technological advances Increased investment appetite Facilitate access to financial markets by retail customers globally / ease of access Interim resul
Slide 17: Strategic rationale
STRATEGIC RATIONALE High growth and regulated industry Leveraging our infrastructure and existing expertise similar business fundamentals, many financial trading founders are from gambling backgrounds financial trading has similar attributes, maximise revenue per user, minimise cost per acqu
Slide 18: The Financials division
THE FINANCIALS DIVISION A MARKET LEADER IN B2C MARKETS The Financials division in numbers in 2014 Total revenues of $375m Adjusted EBITDA of $198m 170,000 active customers 110,000 FTDs Significant geographical and product diversity with 7 regulatory licenses Interim results 2015 18
Slide 19: Markets Limited: a single division
MARKETS LIMITED: A SINGLE DIVISION Operating a multi-brand B2C business Significant technological advantages providing a competitive edge Centralised back-office infrastructure to support the activity across the business Combined optimised marketing strategy Benefitting from multi-licensin
Slide 20: Reporting of performance
REPORTING OF PERFORMANCE KPIs TO BE REPORTED FOR THE FINANCIALS DIVISION AS A WHOLE P&L Other KPIs Revenues Actives EBITDA FTDs Geography (Europe, Asia, ROW) Interim results 2015 20
Slide 21: A diversified business
A DIVERSIFIED BUSINESS € 8 0 0 M O F P R O - F O R M A G R O U P R E V E N U E S I N 2 0 1 4 W I T H 6 0 % R E G U L AT E D 2014 revenue by customer 2014 revenue by product 2014 revenue by geography 21% 28% 39% 37% 18% 24% 33% 27% Financial trading customers Gaming - customer 1 CFDs Casino Rest of W
Slide 22: Agenda
AGENDA Financial review Operational and Highlights Q&A strategic review The Financials division Alan Jackson Ron Hoffman Mor Weizer Chairman Chief Financial Officer Chief Executive Officer Interim results 2015 22
Slide 23: Key drivers of Gaming performance
KEY DRIVERS OF GAMING PERFORMANCE C O N T I N U I N G G R O W T H F R O M R E G U L AT E D M A R K E T S Strong growth across regions and product verticals Growth split between new business and existing licensees Regulated revenues growing faster than .com revenues contributing 80% of increm
Slide 24: Operational highlights
OPERATIONAL HIGHLIGHTS Continued progress with Playtech ONE Omni-Channel offering launched first Omni-Channel HTML5 front-end solution with Ladbrokes Omni-Channel offering continuously extended and upgraded to including additional retail components Good progress made with structured agreemen
Slide 25: Strategy in Gaming remains the same
STRATEGY IN GAMING REMAINS THE SAME F O C U S O N R E G U L AT E D M A R K E T S Supporting the organic growth of existing licensees Extending existing relationships to new products, new services and new territories Signing new licensees Structured agreements M&A Interim results 2015 25
Slide 26: A unique offering
A UNIQUE OFFERING P L AY T E C H ’ S T E C H N O L O G Y A N D E X P E R I E N C E I S U N R I VA L L E D Playtech’s IMS driven omni-channel offering is a key differentiator and unique proposition Unmatchable resource and investment dedicated to R&D Largest content portfolio in the industry
Slide 27: Continued innovation
CONTINUED INNOVATION EXTENDING OUR LEAD Mobile is yesterday’s story Industry needs to align itself with the information age Getting a lot more from the same Omni-channel is more than just integrated products… it’s a holistic approach Customer centric approach is in the “doing” not just in
Slide 28: Making businesses more intelligent
MAKING BUSINESSES MORE INTELLIGENT A N E N T I R E S U I T E O F T O O L S T O E N H A N C E O P E R AT I O N S Tools designed to increase LTV, lower churn rates and Game Churn improve the customer journey Advisor Detection Based on advanced algorithms and benchmarks against big data from custom
Slide 29: Game Advisor
MAKING BUSINESSES MORE INTELLIGENT GAME ADVISOR “To improve the customer journey and ensure that the player is being advised of the games that best fit them using a fully personalised approach based on the player’s characteristics, increasing life time vale of customers and reducing churn rates” +15
Slide 30: Churn Detection
MAKING BUSINESSES MORE INTELLIGENT CHURN DETECTION “To reduce the churn rates and increase LTV (by retaining the players). Playtech BI collects the player’s data, analyses this and based on an algorithm assigns a churn probability (between 0 and 1), after factoring multiple variables of players acti
Slide 31: Optimiser
MAKING BUSINESSES MORE INTELLIGENT OPTIMISER “Provides licensees with a tool to run real-time web personalisation & optimisation. With a short and easy integration licensees can run optimisation campaigns within minutes without the need of developers or IT.” Interim results 2015 31
Slide 32: BI reporting and benchmarking
MAKING BUSINESSES MORE INTELLIGENT BI REPORTING AND BENCHMARKING “Provides users with the ability to slice and dice data from various products. Playtech BI collects player’s data, analyses & aggregates it, and provide reporting interface to the user Users can run their own data analysis with the too
Slide 33: Smart Installer
MAKING BUSINESSES MORE INTELLIGENT S M A R T I N S TA L L E R “To provide licensees with a smart installer tool that can increase conversion and prevent churn with each smart installer customised specifically to the requirements of each licensee and brand.” The installer has the capability to run ma
Slide 34: New business pipeline
NEW BUSINESS PIPELINE P L AY T E C H I S T H E N AT U R A L C H O I C E I N R E G U L AT E D M A R K E T S Strong pipeline with significant opportunities across CEE, Latin America, Africa and elsewhere – new licensees and structured agreements Sports remains an untapped market with significant p
Slide 35: Capital allocation
CAPITAL ALLOCATION M & A R E M A I N S A K E Y PA R T O F O U R S T R AT E G Y Continued focus on M&A to augment organic growth strengthening existing positions in key areas such as sports, mobile, content extending to new product areas such as advanced marketing technologies and capabilities
Slide 36: Current trading and outlook
CURRENT TRADING AND OUTLOOK MOMENTUM FOR REMAINDER OF 2015 AND BEYOND Strong current trading in both Gaming and Financials divisions Strong pipeline in Gaming division Clear plans for Financials divisions Financial flexibility retained for further M&A to augment organic growth Interim result
Slide 37: Agenda
AGENDA Financial review Operational and Highlights Q&A strategic review The Financials division Alan Jackson Ron Hoffman Mor Weizer Chairman Chief Financial Officer Chief Executive Officer Interim results 2015 37
Slide 38: Appendices
Appendices Interims results 2015
Slide 39: Gaming mobile penetration
GAMING MOBILE PENETRATION I NCREASE F RO M 15% TO 20% O F SO F T WARE REVENUES I N H1 PRODUCT VERTICAL H1 2014 (€M) H1 2015 (€M) GROWTH % Casino 10.4 19.9 94% Sports 10.2 13.4 29% Bingo 1.1 1.7 51% Poker 0.1 0.2 234% Total 21.8 35.2 64% Interim results 2015 39
Slide 40: Regulatory split of Gaming growth
REGULATORY SPLIT OF GAMING GROWTH R E G U L AT E D M A R K E T S D R I V I N G 8 0 % O F H 1 G A M I N G G R O W T H AT C C Growth (ex acq) 26% Existing 25% Regulated 42% New business 17% Existing 16% .com 18% New business 2% Interim results 2015 40
Slide 41: Gaming customer concentration
GAMING CUSTOMER CONCENTRATION 35 30 H1 H1 34 Licensees 2014 2015 25 27 € Millions Top 5 54% 53% 20 15 18 Top 10 75% 72% 16 10 Top 15 83% 81% 5 0 Licensees > €5.0m Licensees > €2.0m annualised revenues annualised revenues Interim results 2015 41
Slide 42: Thank You
Thank You Interims results 2015