Slide 1: Interim results 2016
Interim results 2016 25 August 2016
Slide 2: Agenda
AGENDA Operational and Highlights Financial review Q&A strategic review Alan Jackson Ron Hoffman Mor Weizer Chairman Chief Financial Officer Chief Executive Officer Interim results 2016 2
Slide 3: Delivering on strategic objectives
DELIVERING ON STRATEGIC OBJECTIVES SIGNIFICANT PROGRESS IN 2016 Strong growth in Gaming division with new licensees and renewals securing future growth Financials division now positioned for sustainable growth Continued implementation of M&A strategy with acquisitions of BGT and Quickspin Ba
Slide 4: Agenda
AGENDA Operational and Highlights Financial review Q&A strategic review Alan Jackson Ron Hoffman Mor Weizer Chairman Chief Financial Officer Chief Executive Officer Interim results 2016 4
Slide 5: Results summary
RESULTS SUMMARY S T R O N G R E V E N U E A N D E B I T D A G R O W T H ; N E T P R O F I T I M PA C T E D B Y F X 350 H1 2015 337.7 300 H1 2016 286.0 € Millions 250 200 150 143.8 100 112.9 115.0 50 79.5 0 Total revenue Adj. EBITDA Adj. Net Profit +18% +27% -31% Interim results 2016 5
Slide 6: Results summary at constant currency
RESULTS SUMMARY AT CONSTANT CURRENCY VERY STRONG GROWTH ACROSS ALL LINE ITEMS 400 H1 2015 355.1 H1 2016 300 € Millions 286.0 200 157.6 100 135.1 112.9 87.9 0 Total revenue Adj. EBITDA Adj. Net Profit +24% +40% +54% Excl.acqs +17% +36% +49% Interim results 2016 6
Slide 7: Revenue growth by gaming vertical
REVENUE GROWTH BY GAMING VERTICAL +€28.1m +€2.5m +€1.6m +€0.4m -€1.2m -€1.0m Casino Services Sport Land-based Bingo Poker 30% 79% 15% 3% 3% 19% 27% 8% 10% 15% 7% 0% -11% -16% -15% -5% -15% -30% Reported Constant currency Interim results 2016 7
Slide 8: Financials division
FINANCIALS DIVISION T R A N S I T I O N P E R I O D O V E R ; N O W P O S I T I O N E D F O R S U S TA I N A B L E G R O W T H Pro-forma H1 2016 vs H1 2015 Commentary €m H1 16 H1 15 Chg H1 results reflect full-impact of the business transition and improvements made due to Net revenue 31.3 43.2 -28
Slide 9: Financials division KPIs highlight shift in business model
FINANCIALS DIVISION KPIs HIGHLIGHT SHIFT IN BUSINESS MODEL CFDs - Actives CFDs – First Time Depositors ‘000s H1 16 H1 15 Chg ‘000s H1 16 H1 15 Chg B2C Direct – markets.com 15.7 17.6 -11% B2C Direct – markets.com 5.4 9.9 -45% B2C Indirect and other - 18.4 - B2C Indirect and other - 12.3 - B2B CFDs 13
Slide 10: Margin analysis
MARGIN ANALYSIS M AT E R I A L M A R G I N I M P R O V E M E N T H1 2015 H1 2016 Revenue Adj. EBITDA Margin Revenue Adj. EBITDA Margin Gaming 275.4 112.0 41% 306.4 137.9 45% Reported Markets* 10.6 0.9 8% 31.3 5.9 19% Group 286.0 112.9 39% 337.7 143.8 43% CC Group 286.0 112.9 39% 355.1 157.6 44% * H1
Slide 11: Cost analysis
COST ANALYSIS N O M AT E R I A L C H A N G E T O B R E A K D O W N O F A D J U S T E D O P E R AT I N G C O S T S €m H1 2016 H1 2015 Adj. operating costs 193.9 173.1 Revenue-driven costs 25.7 8% 25.5 9% Adj. operational costs excluding revenue-driven costs 168.2 147.6 Employee-related costs 96.0 57%
Slide 12: Net profit and EPS
NET PROFIT AND EPS B E L O W T H E L I N E I T E M S I M PA C T E D B Y F X A N D F I N A N C I N G Adjusted net profit down 31% as reported but up 54% at constant currency significant impact from exchange rate differences with €70m movement vs 2015 predominantly from cash balances held in GBP
Slide 13: 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 4% at €99.5m (H1 2015: €95.5m) Improved cash conversion of 78% (H1 2015: 69%) from adjusted EBITDA (when adjusted for jackpots, security deposits and client equity) Strength and susta
Slide 14: Balance sheet
BALANCE SHEET S T R E N G T H E N A B L E S M & A T O G E T H E R W I T H R E T U R N O F C A P I TA L Significant firepower to execute strategy €170m spent on M&A in 2016 to date cash and cash equivalents of €778m at end of H1 2016 (Dec 2015: €858m) or €640m when taking into account the acqui
Slide 15: Agenda
AGENDA Operational and Highlights Financial review Q&A strategic review Alan Jackson Ron Hoffman Mor Weizer Chairman Chief Financial Officer Chief Executive Officer Interim results 2016 15
Slide 16: Key drivers of gaming performance
KEY DRIVERS OF GAMING PERFORMANCE U N D E R LY I N G G R O W T H O F 1 8 % Casino continues to drive Gaming with a very strong performance from slot games and live casino Both existing and new business contributing to growth Regulated revenues of 39% (H1 2015: 40%) growth in regulated revenu
Slide 17: "Locking-in" future growth
“LOCKING -IN” FUTURE GROWTH NEW G AMES, PRO DUCT S, LAUNCHES, SI G NI NG S AND RENEWALS New games and products including Age of the Gods, Virtual Tennis and a Virtual Sports Football Acca Several recent signings expected to launch in the coming months including The Sun Bingo and Marca.es Impor
Slide 18: Caliente: a case study
CALIENTE: A CASE STUDY B E C O M I N G D O M I N A N T I N A N E W LY R E G U L AT E D M A R K E T One of the oldest betting brands in South America with c.100 POS’s, mainly through betting sections in land-based Casinos Playtech invested into the online business, and migrated the whole business
Slide 19: Caliente: a case study
CALIENTE: A CASE STUDY T R E N D I N G T O W A R D S B E I N G A T O P 1 0 P L AY T E C H L I C E N S E E Revenues FTDs Dec-14 Dec-15 Dec-14 Dec-15 Sep-14 Sep-15 Sep-14 Sep-15 Mar-15 Mar-16 Mar-15 Mar-16 Jun-14 Jun-15 Jun-16 Jun-14 Jun-15 Jun-16 Interim results 2016 19
Slide 20: 2016 European Championships
2016 EUROPEAN CHAMPIONSHIPS A F E W I N T E R E S T I N G S T AT I S T I C S F R O M P L AY T E C H S P O R T S Most profitable result: France vs Portugal (0-0 draw) Least profitable result: France vs Ireland (Tournament favourites come from behind) Betting £100 on every favourite: £151 loss
Slide 21: Best gaming technology
BEST GAMING TECHNOLOGY E N H A N C I N G O M N I - C H A N N E L T O D R I V E D I G I T A L I S AT I O N O F R E T A I L SSBTs are key component of the ongoing digitisation of retail We’ve only just scratched the surface for the potential of SSBTs there are almost 100,000 betting shops in Eur
Slide 22: Quickspin
QUICKSPIN HIGHEST QUALITY GAMES AND THE HIGHEST QUALITY LICENSEES Fast-growing games studio High-quality video slots - both real money gambling and social Strong pipeline of both new customers and new games Strengthens Playtech’s position as the leading content provider Provides greater pe
Slide 23: Customer concentration
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 Old presentation New presentation FY FY H1 FY FY H1 Licensees Licensees 2014 2015 2016 2014 2015 2016 Top 5 53% 53% 59% Top 5 45% 42% 39% Top 10 75% 72% 74% Top 10 68% 62%
Slide 24: Mobile penetration
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 54% 50 44% 46% 41% 39% 40 29% 30% 29% 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 H1 2016 Group Group ex UK UK In
Slide 25: Capital allocation
CAPITAL ALLOCATION I N C R E A S E D R E T U R N S W I T H N O I M PA C T O N M & A C A PA B I L I T I E S M&A pipeline remains healthy with ongoing active discussions Cognisant of need for efficient balance sheet with high cash balances consistently augmented by cash from operations 57 €c / 5
Slide 26: Current trading and outlook
CURRENT TRADING AND OUTLOOK POSITIONED FOR GROWTH Gaming division goes from strength-to-strength strong current trading BGT adds to the opportunity Improved performance in Financials division Healthy M&A pipeline Confidence in strong growth in 2016 and beyond Interim results 2016 26
Slide 27: Agenda
AGENDA Operational and Highlights Financial review Q&A strategic review Alan Jackson Ron Hoffman Mor Weizer Chairman Chief Financial Officer Chief Executive Officer Interim results 2016 27
Slide 28: Appendices
Appendices Interims results 2016
Slide 29: Gaming mobile penetration
GAMING MOBILE PENETRATION I NCREASE F RO M 20% TO 29% O F SO F T WARE REVENUES I N H1 2016 PRODUCT VERTICAL H1 2015 (€M) H1 2016 (€M) GROWTH % Casino 19.9 42.8 110% Sports 13.4 14.1 5% Bingo 1.7 2.3 34% Poker 0.2 0.3 41% Total 35.2 59.5 67% Interim results 2016 29
Slide 30: Regulatory split of gaming growth
REGULATORY SPLIT OF GAMING GROWTH S T R O N G . C O M G R O W T H D U E T O I N C R E A S E D R O YA LT Y R AT E S I N A S I A Excl’ acquisitions 11% Existing 2% Regulated 8% New business 6% Existing 12% .com 13% New business 1% Interim results 2016 30
Slide 31: Thank You
Thank You Interims results 2016