Slide 1: H1 2020 results
H1 2020 results 17 September 2020
Slide 2: Agenda
Agenda 2 Group highlights Financial review Strategic priorities and outlook Mor Weizer Andrew Smith Mor Weizer Chief Executive Officer Chief Financial Officer Chief Executive Officer H1 2020 results
Slide 3: Playtech response to COVID-19
Playtech response to COVID-19 3 Decisive action taken early • Priority was to limit the effects of the pandemic on staff, partners and overall business • Business continuity plan enacted in early stages of the pandemic • Outstanding response from our people • Support provided to local communities •
Slide 4: Highlights
Highlights 4 Resilient H1 performance; continued operational execution • Resilient H1 driven by online and TradeTech together with early and decisive actions taken in response to COVID-19 • Significant US momentum: New Jersey license received and launched with bet365; further license applications un
Slide 5: Executing 2020 priorities
Executing 2020 priorities 5 Delivering our strategy 2020 priorities Progress 1. Increase US investment Launched with bet365 in New Jersey; Live facility under development; further applications underway 2. Sign new structured agreements New structured agreements in Guatemala and Costa Rica 3. Sign 50
Slide 6: Agenda
Agenda 6 Group highlights Financial review Strategic priorities and outlook Mor Weizer Andrew Smith Mor Weizer Chief Executive Officer Chief Financial Officer Chief Executive Officer H1 2020 results
Slide 7: Financial highlights
Financial highlights 7 Robust start to 2020; resilient despite COVID-19 Strong start to 2020 pre-COVID-19 Cash preservation measures • Strong January and February • Early decisions taken to preserve cash across the business • Q1 EBITDA of €117m • All areas of cash preservation examined Resilient H1
Slide 8: COVID-19 Response
COVID-19 Response 8 Decisive action taken early to navigate pandemic Cash preservation Liquidity • Shareholder distributions suspended; €65m preserved • Navigated pandemic with positive free cash flow • Salary reductions across the Company • RCF drawn down as precaution only (incl. 20% for Board and
Slide 9: Group EBITDA by month
Group EBITDA by month 9 Robust start to 2020 before COVID-19; recovery underway Gambling TradeTech Recovery in July and August 50 • Very strong July: • Pent up demand • Concentration of football matches € Millions • Strong TradeTech • Solid August: • Lower than July • Retail caution 0 January Februa
Slide 10: Results summary
Results summary 10 Group results impacted by pandemic Total revenue (€m) Adj. EBITDA (€m) Adj. Net Profit (€m) €564.0 €162.3 €44.3 750 250 200 727.8 600 -23% 200 -16% 150 564.0 192.9 450 150 162.3 100 300 100 78.4 -44% 50 150 50 44.3 0 0 0 H1 2019 H1 2020 H1 2019 H1 2020 H1 2019 H1 2020 H1 2020 resu
Slide 11: B2B Gambling
B2B Gambling 11 Strong Core B2B performance outside UK Online only & excluding Sports € millions H1 2019* H1 2020 % CC% H1 2019 H1 2020 % CC% UK 94.8 66.1 -30% -30% 52.0 51.9 0% 1% Other regulated 74.2 80.5 8% 11% 37.4 57.7 54% 60% Total Regulated B2B revenue 169.0 146.6 -13% -12% 89.4 109.6 23% 25%
Slide 12: B2C Gambling performance
B2C Gambling performance 12 B2C impacted by retail closures and sports cancellations Revenue Adjusted EBITDA € millions H1 2019* H1 2020 % CC% H1 2019* H1 2020 % Snaitech 395.8 215.5 -46% -46% 74.7 47.1 -37% White label (incl. Sun Bingo) 24.3 29.5 21% 22% 3.4 3.4 0% Retail Sport B2C 9.9 8.5 -14% -13
Slide 13: Snaitech performance
Snaitech performance 13 Resilient H1 driven by online strength and variable cost franchise model € millions H1 2019 H1 2020 % Retail betting 85.9 48.1 -44% Gaming machines 249.0 92.3 -63% Online 46.4 63.4 37% Other 14.5 11.7 -19% Total revenue 395.8 215.5 -46% Adjusted EBITDA 74.7 47.1 -37% Margin 1
Slide 14: TradeTech Group Results
TradeTech Group Results 14 Exceptional H1 2020 USD millions H1 2019 H1 2020 % B2C $9.9 $22.8 130% Liquidity offering $14.5 $15.5 7% Execution & Risk Management $17.5 $50.8 190% Full Turnkey offering $2.2 $7.1 223% Net Revenue $44.1 $96.2 118% Adjusted EBITDA $9.2 $58.4 535% • Outstanding H1 performa
Slide 15: Balance sheet
Balance sheet 15 Strong balance sheet and liquidity • Long-term financing in place; leverage within range • RCF drawn down as precautionary measure • Covenants renegotiated for December 2020 and June 2021 tests; comfortably within limits • Playtech has 5-year (€530m) and 7-year (€350m) bonds (Octobe
Slide 16: Cash on balance sheet
Cash on balance sheet 16 Cash position strengthened despite pandemic June 2020 December 2019 Total Total excl. excl. € millions Gambling Snaitech TTG Total RCF RCF Total RCF RCF Gross Cash 378 240 405 1,023 (307) 716 672 (64) 608 Client funds / progressives* (86) (39) (242) (367) — (367) (338) — (33
Slide 17: Outlook
Outlook 17 Equipped to emerge strongly from the COVID-19 period • Strong trading and cash generation in July and August, albeit with stronger July • Online expected to continue to perform strongly • Cautious about the outlook for retail • TradeTech first half performance not expected to be repeated
Slide 18: Agenda
Agenda 18 Group highlights Financial review Strategic priorities and outlook Mor Weizer Andrew Smith Mor Weizer Chief Executive Officer Chief Financial Officer Chief Executive Officer H1 2020 results
Slide 19: Impact of COVID-19 on Playtech
Impact of COVID-19 on Playtech 19 New opportunities created; accelerating existing plans Impact of COVID-19 • COVID-19 has accelerated shift to online and increased demands of digital functionality • Increased demand for our technology; safer game design and monitoring tools • Opportunities to ratio
Slide 20: US market opportunity
US market opportunity 20 Market opportunity continuing to grow $24.4bn • 22 states now offer or have approved Sports Betting • Sports Betting estimated $19 billion market by 2023 by 2023 • iGaming legislation lags; gaining momentum Sports ~$19.0bn iGaming ~$5.4bn • iGaming estimated $5.4 billion mar
Slide 21: US product & technology offering
US product & technology offering 21 Industry-leading technology; flexible and open architecture Industry-leading IMS platform Live Casino Playtech Open Platform / APIs Slots Turnkey Sportsbook Poker Bet engine Omni-channel offering Trading services and risk Native iOS Casino app Bespoke risk and lia
Slide 22: US momentum
US momentum 22 US strategy is building momentum Approach Current Status Market Entry • State by state approach • First licence obtained in New Jersey • Licensing process underway in several states • Accelerating investment • Local presence • Target c.10 states by end of 2022 Technology & • IMS platf
Slide 23: Latin America
Latin America 23 Building on market leading position in the region • Strategy in region focused on structured agreements • Caliente now a top 3 licensee • Wplay roll-out progressing as planned with first milestones achieved • New structured agreements in Guatemala & Costa Rica • Medium term opportun
Slide 24: Resilient H1 for Snaitech
Resilient H1 for Snaitech 24 The market leader in Italy #1 41% Resilient H1; recovery in July and August Sports betting Growth in online • Retail closures and lack of sporting events market share in H1 stakes significantly impacted results from March to June • Business remained breakeven throughout
Slide 25: The opportunity for Snaitech
The opportunity for Snaitech 25 Largest market in Europe; ideally positioned Significant long-term opportunity Online Penetration* • Largest gambling market in Europe 50% 45% • Low online penetration 40% • Ideally positioned to capture opportunity with brand 30% strength and leading online offering
Slide 26: Asia
Asia 26 Increased flexibility • H1 2020 impacted by government restrictions in response to COVID-19 • Also impacted by restrictions introduced on payment processing • Changes to operating model and distribution network in region • Additional distributor added • Increased flexibility in region going
Slide 27: Safer gambling & sustainability
Safer gambling & sustainability 27 Sustainable success strategy; pioneering consumer protection Sustainable Success Five-year sustainable & responsible business strategy Investing £5m into initiatives that encourage safer gambling behaviours Power Promote Partner H1 2020 results
Slide 28: Asset review
Asset review 28 Action being taken TradeTech • Remains non-core; source of capital to the Group in H1 given strong performance • Released €10m of previously tied-up cash • Playtech is in discussions with a number of parties in relation to possible sale Retail B2C Sport (HPYBET) • Strategic asset in
Slide 29: 2020 priorities
2020 priorities 29 Delivering our strategy 2020 priorities H2 Focus 1. Increase US investment Further license applications, go-lives, deals signed 2. Sign new structured agreements Progress existing relationships and pipeline of structured agreements 3. Sign 50 new brands Sign >75 new brands in 2020
Slide 30: Medium-term outlook
Medium-term outlook 30 Well positioned for future growth • Playtech to emerge strongly from COVID-19 disrupted period • Positioned to take advantage of emerging opportunities • Leading technology • Strong balance sheet • Comprehensive product offering; ideally placed to capture significant US market
Slide 31: Q&A
Q&A
Slide 32: Appendix
Appendix
Slide 33: Results summary
Results summary 33 Group - at constant currency Total revenue (€m) Adj. EBITDA (€m) Adj. Net Profit (€m) €565.5 €164.6 €49.7 750 250 200 727.8 600 -22%* 200 192.9 -15%* 150 565.5 450 150 164.6 100 300 100 77.2 -36%* 50 150 50 49.7 0 0 0 H1 2019 H1 2020 H1 2019 H1 2020 H1 2019 H1 2020 * Including and
Slide 34: Summary by division H1 2020
Summary by division H1 2020 34 Group H1 2019 (€m)* H1 2020 (€m) Revenue Adj. EBITDA Margin Revenue Adj. EBITDA Margin B2B Gambling 265.5 110.2 42% 229.7 63.2 28% B2C Gambling 430.0 74.5 17% 253.5 46.3 18% Reported (Intercompany) (6.8) n/a n/a (6.5) n/a n/a Total Gambling 688.7 184.7 27% 476.7 109.5
Slide 35: B2B Gambling customer concentration
B2B Gambling customer concentration 35 Licensees H1 2019 H1 2020 Top 5 39% 38% Top 10 56% 52% Top 15 66% 62% H1 2020 results
Slide 36: B2B Gambling costs
B2B Gambling costs 36 Cost reduction during H1 in response to COVID-19 € millions H1 2019 H2 2019 H1 2020 H1 v H1 (%) H1 v H2 (%) R&D 37.4 43.5 39.2 5% -10% Operations 78.5 102.7 85.4 9% -17% G&A 29.7 27.7 32.4 9% 17% S&M 9.7 9.9 9.5 -2% -4% Total B2B Gambling costs 155.3 183.8 166.5 7% -9% H1 2020
Slide 37: Net profit and EPS
Net profit and EPS 37 Group Adjusted Excl. Acquisitions H1 2019* H1 2020 % H1 2019* H1 2020 % Adjusted EBITDA 192.9 162.3 -16% 194.8 164.3 -16% - Depreciation & Amortisation (78.4) (79.2) 1% (78.1) (78.8) 1% - Net finance costs (20.4) (31.4) 54% (20.1) (31.2) 55% - Tax (16.4) (8.2) -50% (16.1) (8.5)
Slide 38: Adjusted cash bridge
Adjusted cash bridge 38 Free cash flow positive; liquidity improved 657 411 € Millions Adjusted Net cash from Snaitech Acquisitions & CapEx and Share Interest, FX & Adjusted RCF drawn Adjusted gross cash* operations** land sale contingent Cap Dev buy-back lease liability gross cash* down gross cash*
Slide 39: Contingent consideration
Contingent consideration 39 Group Contingent consideration Payment date Maximum payable earnout and redemption liability (based on maximum Acquisition (per terms of acquisition) (as at 30.06.2020) payable earnout) Playtech BGT Sports Ltd n/a – Earnout assessment €20.8 million €8.3 million Q3 2020 pe
Slide 40: Thank you
Thank you