Fdj United · EURONEXT:FDJU
Fdj United — Kindred Group — Q4 2021 Earnings Presentation
32 slides from Fdj United's earnings presentation, Feb 9, 2022
Slide 1: Q4 2021 | 9 February 2022
Q4 2021 | 9 February 2022
Slide 2: Q4 2021 highlights
Q4 2021 highlights Business overview – Focus on locally regulated markets – Relax acquisition completed – Product segment update – Regional update – North America – Sustainability – Proposed ordinary dividend Strategy update Summary
Slide 3: Fourth quarter delivered solid performance despite ceasing Dutch services
Despite ceasing services to Dutch residents and low sports betting margin in the beginning of the quarter, the fourth quarter delivered solid performance GBP 244.9m GBP 185.3m GBP 27.6m GBP 7.7m 1,461,009 GBP 87.0m (-33%) (77% of GWR) (11.3% of revenue) (-103.5m) (-18%) GWR (B2C) reached All time hi
Slide 4: Revenue (GBPm)
Revenue (GBPm) 1,259.6 1,130.2 244.9 907.6 912.8 364.7 298.4 751.4 250.1 236.2 544.1 238.0 280.7 230.7 226.0 363.7 Q4 152.8 354.1 193.6 Q3 226.2 235.1 111.4 142.3 219.0 86.1 166.6 Q2 126.6 352.6 80.5 207.8 224.4 249.7 122.4 153.2 Q1 76.1 2015 2016 2017 2018 2019 2020 2021
Slide 5: Expenses as % of revenue
Expenses as % of revenue 28.5% FY FY FY 2019 2020 2021 22.8% 22.8% 16.6% 16.0% 15.8% 10.5% 9.7% 9.3% 8.1% 5.6% 5.5% 4.6% 3.5% 2.3% Cost of Sales Cost of Sales (excl. Betting duties & Affiliates) Marketing Marketing costs Salaries Employee costs Other Opex Other above EBITDA opex Capex Capex (excl. U
Slide 6: Underlying EBITDA (GBPm)
Underlying EBITDA* (GBPm) 332.1 27.6 288.2 84.8 204.9 118.2 186.5 58.2 Q4 113.7 124.3 74.9 128.0 75.8 56.7 31.1 Q3 81.5 38.2 47.8 35.7 27.5 34.6 42.3 49.9 Q2 21.0 33.8 33.3 106.0 22.9 18.5 28.6 30.0 47.7 27.9 44.3 Q1 14.5 2015 2016 2017 2018 2019 2020 2021 * From Q4 2021, the definition of underlyin
Slide 7: Currency rates and FX impact
Avg rate Q4 2020 Q4 2021 Movement AUD 1.806 1.851 -2.5% DKK 8.241 8.772 -6.4% Weighted average impact of EUR 1.107 1.179 -6.5% FX rates on GWR was a negative 5.4 NOK 11.904 11.765 1.2% impact of approx. 3% SEK 11. 364 11.946 -5.1% USD 1.321 1.349 -2.1% GBPm Revenue -10.6 Cost of sales / Opex 8.4 FX
Slide 8: Business overview
Slide 9: Strong GWR growth in locally regulated markets
Strong GWR growth in locally Stable long-term profit margins despite short-term regulated markets (GBPm) CAGR regulatory pressure and increased betting duties FY19-FY21 GBPm +17% 80% 300 1,255.2 1,130.2 70% 250 Other % of locally regulated GWR 60% 912.8 479 markets +12% 447 200 50% Betting duties 37
Slide 10: Relax acquisition completed
Continued strong growth momentum and • The acquisition completed on 1 Oct 2021 significant EBITDA improvement in 2021 • Kindred owns 93% of the total fully Revenues (EURm) Underlying EBITDA (EURm) diluted shares • Relax Q4 revenues amounted to GBP 6.5m 31% growth 67% growth out of which GBP 2.1m cam
Slide 11: Active customers and ARPU
Active customers (‘000)/ • Number of active ARPU (GBP) customers amounted 2,000 to approx. 1.46 million, an 18% decrease 1,800 compared to Q4 2020 1,600 • Expected decrease as 1,400 a result of the closure 1,200 of services to Dutch residents 1,000 800 • However, strong performance in other 600 mark
Slide 12: GWR by product segment Q4 2021
(Year-on-year) GWR by product segment Q4 2021 Sports betting Poker, 3% Other, 2% • GWR 43% behind tough comperatives, adversely impacted by lower sportsbook margin and ceasing of Dutch activity • Kindred’s proprietary racing product contributed 42% Sports betting 7% to the total sports betting GWR C
Slide 13: Rolling 30 day average daily sportsbook turnover
Rolling 30 day average daily sportsbook turnover GBPm Q1 Q2 Q3 Q4 • Sports betting turnover performed 20 in line with expectation in most markets, whilst the ceasing of 2021 Dutch activity affects comparisons 15 • Seasonal comparatives somewhat distorted due to COVID scheduling 2020 10 and US Electi
Slide 14: Sports betting margin after free bets
Sports betting margin after free bets • Exceptionally weak start but the sports betting margin normalised during November 10.7% 10.7% and December 10.0% • The sports betting margin for Q4 9.4% 9.4% 2021 was 8.5% after free bets 9.0% 9.1% (vs. 10.0% in Q4 2020) 8.7% 8.7% 8.7% • The weighted long-term
Slide 15: GWR by region Q4 2021
GWR by region Q4 2021 (Year-on-year) Other Western Europe CES 6% • GWR decreased 48%, heavily impacted by ceasing of Dutch 12% Nordics 31% activity. Excl. Netherlands, the GWR decreased by 18% • In local currency, Belgium grew by 2% while the UK and France saw a decline, mainly due to tough comps an
Slide 16: US operations Q4 2021
US operations Q4 2021, GBPm Kindred has made a conscious decision during Q4 to GWR 6.2 increase focus on bonus and marketing efficiency CoS -6.3 GBP 6.2m in GWR Q4 21, approx. -20% y-o-y in local currency Marketing -7.6 as competition continue to intensify. Last 12 months US GWR Admin expenses -
Slide 17: Our journey towards zero
Our journey towards zero • The journey towards zero per cent of revenue from harmful gambling continues and it is key % of GWR Social Low Risk Medium Risk High Risk for sustainable growth 100% • Data from Q4 2021: 90% ‒ Share of GWR from high-risk players: 4.0% 80% ‒ Improvement effect after interve
Slide 18: Proposed ordinary dividend
• Kindred’s dividend policy is based on a stable ordinary dividend complemented with share buy-backs • Total pay-out ratio of dividends and buybacks should over time equal about 75% of free cash flow • For 2021, the Board proposes an ordinary dividend of GBP 0.337 per share/SDR equivalent to approx.
Slide 19: Strategy update
© Kindred Group pl
Slide 20: Developing the Kindred Racing Platform into a full in-house sportsbook
Balanced portfolio of markets Developing the proprietary Kindred Racing Platform into a full in-house sportsbook is Secure a strong Firmly establish ✓ an integral part of delivering on our strategy performance in our core markets Kindred in the US ✓ enables us to achieve a more balanced Core strateg
Slide 21: Winners in a re-regulated reality excel in Product & CX
Customer and market needs are rapidly changing Product commoditisation is limiting our ability to offer the thrills and excitement that differentiate us from the competition We believe the winners in a highly Dependencies impacting our ability to scale effectively competitive, re-regulated reality a
Slide 22: Current product set-up
Current product set-up GWR split 2021 Poker & Other Sports Betting Inhouse Outsourced Casino & Games Casino & Kindred has around Relax is today a key supplier of Casino content 90 different 3rd party Games casino suppliers Inhouse* Kindred has a proprietary Kambi is currently Kindred’s racing produc
Slide 23: Four pillars for an in-house sportsbook solution
The 4 pillars that underpins the rationale for pursuing an in-house sportsbook solution 1 2 3 4 Scalability of re-regulated Long term Agility and control over Ability to fully differentiate profits over time security of supply roadmap & priorities We are building a sportsbook product that can differ
Slide 24: Kindred Racing Platform key operational facts
KRP - Key operational facts • The foundation is to a large extent already 2018 UK & AUS EGR in place for developing a scalable and cost- KRP was launched the largest markets Racing operator 2021 efficient sportsbook product 37m +24.5% 13 • Kindred Racing Platform (KRP) includes Bet legs processed Gr
Slide 25: Evolvement of Kindred's strategy of end-to-end product control
Evolvement of Kindred’s strategy of greater end-to-end control of its product offering and customer experience Kindred Racing Platform Q1 2018 Build world leading racing product KRP launched Relax Gaming Q4 2021 Leading B2B iGaming software supplier that develops and Relax acquired distributes onlin
Slide 26: Upfront investment and profitability improvement potential
Significant profitability Reasonable upfront investment improvement potential Kindred’s total sportsbook headcount is The in-house sportsbook provides today approx. 200 employees significant future profitability improvement potential through The headcount is expected to increase reduced costs
Slide 27: Summary
Slide 28: 2022 outlook and current trading
• 2022 will be another exciting year of sports with the Winter Olympics in progress, and the first ever winter FIFA World Cup in November • Our application for a license in the Netherlands has been submitted. Subject to the KSA license review process, Kindred looks forward to receiving its license d
Slide 29: Q4 2021 key figures
GBP 244.9m GBP 185.3m GBP 27.6m (-33%) (77% of GWR) (-77%) 4.0% GBP 7.7m 1,461,009 GBP 87.0m (-103.5m) (-18%)
Slide 30: © Kindred Group ple 2022
© Kindred Group ple 2022
Slide 31: Investor relations contacts and financial calendar
28 April 2022 Q1 2022 will be published at 7.30 CET Patrick Kortman +46 723 877 438 27 July 2022 ir@kindredgroup.com Q2 2022 will be published at 7.30 CET Linda Lyth +46 767 681 337 ir@kindredgroup.com
Slide 32: Kindred
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