Slide 1: Full year results 2018
Full year results 2018 21 February 2019
Slide 2: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group CEO Group CEO Full year results 2018 2
Slide 3: Overview: An improved financial profile
OVERVIEW AN IMPROVED FINANCIAL PROFILE ▪ Significant strategic progress with regulated revenue increasing to 80% of Group ▪ Core business model remains strong with 11% growth in regulated B2B Gaming revenue ▪ New licensee wins in regulated markets provide platform for further growth in strategic geo
Slide 4: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group CEO Group CEO Full year results 2018 4
Slide 5: Financial highlights
FINANCIAL HIGHLIGHTS AN IMPROVED FINANCIAL PROFILE Evolving financial profile Continued progress on balance sheet efficiency ▪ B2B regulated Gaming revenue growth of 12% at CC ▪ Sale of holdings in GVC & Plus500 ▪ UK growth of 2% at CC ▪ Non-UK regulated growth of 28% at CC ▪ €530m bond raised, firs
Slide 6: Group results summary
Group RESULTS SUMMARY R E S U LT S I N L I N E W I T H 2 0 1 8 G U I D A N C E 1,250 1240.4 FY 2017 1,000 FY 2018 € Millions 750 807.1 500 250 322.1 343.0 231.4 256.2 0 Total revenue Adj. EBITDA Adj. Net Profit +54% +7% +11% Full year results 2018 6
Slide 7: Group results summary at constant currency
Group RESULTS SUMMARY AT C O N S T A N T C U R R E N C Y 1,250 1251.7 FY 2017 1,000 FY 2018 € Millions 750 807.1 500 250 322.1 346.3 251.1 265.8 0 Total revenue Adj. EBITDA Adj. Net Profit Incl. acquisitions +55% +7% +6% Excl. acquisitions -12% -20% -7% Full year results 2018 7
Slide 8: Group margin analysis
Group GROUP MARGIN ANALYSIS B 2 B G A M I N G M A R G I N I M PA C T E D B Y A S I A ; S N A I T E C H C O N T R I B U T I O N I N B 2 C FY 2017 (€m) FY 2018 (€m) Revenue Adj. EBITDA Margin Revenue Adj. EBITDA Margin B2B Gaming 656.7 326.5 49% 566.0 252.6 45% B2C Gaming 70.3 -31.4 -41% 593.2 60.9 10
Slide 9: B2B Gaming revenue
B2B B2B GAMING REVENUE Gaming STRONG PERFORMANCE OF CORE B2B BUSINESS FY 2017 (€m) FY 2018 (€m) % CC% UK 173.5 174.7 1% 2% Other regulated 113.2 143.8 27% 28% Total Core B2B 286.7 318.5 11% 12% Asia 291.9 180.9 -38% -36% Other unregulated* 78.1 66.6 -15% -14% Total unregulated B2B Gaming 370.0 247.5
Slide 10: B2B Gaming performance
B2B B2B GAMING PERFORMANCE Gaming S O L I D P E R F O R M A N C E I N R E G U L AT E D M A R K E T S FY 2017 FY 2018 Reg Rev % CC % (€m) (€m) CC % Casino 412.8 320.1 -22% -21% 13% Services 94.4 84.6 -10% -9% 15% Sport 87.5 98.0 12% 13% 14% Bingo 26.2 26.4 1% 2% 3% Poker 9.5 9.6 1% 2% 9% Other 26.4 2
Slide 11: B2B Gaming costs
B2B B2B GAMING COSTS Gaming EFFICIENT COST MANAGEMENT Including Acquisitions (€m) Excluding Acquisitions (€m) FY 2017* FY 2018 % FY 2017 FY 2018 % R&D 87.4 80.5 -8% 85.8 78.5 -8% Operations 157.2 150.8 -4% 156.4 149.9 -4% G&A 68.0 62.1 -9% 67.4 61.5 -9% S&M 17.6 20.0 14% 17.6 20.0 14% Total B2B Gami
Slide 12: Non-Asia B2B Gaming margin
B2B NON-ASIA B2B GAMING MARGIN Gaming 30%+ MARGIN IN MEDIUM TERM FROM 16% IN 2017 FY 17 FY 18 (€m) (€m) ▪ Excluding acquisitions, B2B Gaming cost from Total B2B Gaming EBITDA margin 49% 45% operations reduced by €17 million in 2018 ▪ 2018 saw significant margin expansion in B2B B2B Gaming Asian reve
Slide 13: B2C Gaming performance
B2C B2C GAMING PERFORMANCE Gaming C O N S O L I D AT I O N O F S N A I T E C H ; S U N B I N G O C O N T I N U E S T O I M P R O V E Revenue (€m) Adjusted EBITDA (€m) FY 2017 FY 2018 % CC% FY 2017 FY 2018 % Snaitech - 511.9 - - - 93.0 - Sun Bingo 23.6 33.7 43% 44% -28.8 -20.1 30% Casual Gaming & oth
Slide 14: Snaitech performance
B2C SNAITECH PERFORMANCE Gaming A VERY STRONG PERFORMANCE; SYNERGIES ON -TRACK Revenue (€m) Consolidated Revenue FY 2017 FY 2018 % From 5 June Retail betting 166.9 170.9 2% 96.4 Gaming machines 625.9 610.4 -3% 347.4 Online 65.0 82.9 27% 49.8 Other 28.0 30.4 9% 18.3 Total 885.9 894.6 1% 511.9 Adjuste
Slide 15: Sun Bingo
B2B SUN BINGO Gaming M U LT I Y E A R E X T E N S I O N A G R E E D ▪ Revenue increased 43% in 2018 ▪ strong revenue growth was driven by the continued focus on targeted and data driven marketing ▪ material decrease in the loss from the contract compared to 2017 ▪ Amendment to contract has been agre
Slide 16: Cashflows
CASHFLOWS S T R O N G C A S H G E N E R AT I O N ▪ Net cash from operations up 26% at €387m (FY 2017: €307m) ▪ Combined inflows of €481m from GVC / Plus500 investments ▪ €447m from sale of GVC (proceeds of €254 million) and Plus500 (proceeds of €193 million) ▪ €34 million in dividends from the two s
Slide 17: Cash on balance sheet
CASH ON BALANCE SHEET REDUCED CASH ON BALANCE SHEET December 2018 (€m) June 2018 Gaming TradeTech Playtech Snai Total (€m) excl. Snai Gross Cash 171 349 520 102 622 837 Client funds / 66 204 270 39 309 273 progressives * Adjusted gross 105 145 250 63 313 563 cash Cash needed for 55 53 108 30 138 148
Slide 18: Balance sheet
BALANCE SHEET SIGNIFICANT PROGRESS ▪ More efficient balance sheet achieved - net debt/EBITDA of 1.5x at 31 December 2018 ▪ Sale of holdings in GVC and Plus500 ▪ €530m 3.75% bond raised in October 2018; Playtech’s first public debt and rating ▪ €200m RCF fully repaid; new €272m facility available – c
Slide 19: Shareholder distributions
SHAREHOLDER DISTRIBUTIONS A BALANCED APPROACH ▪ No reduction in overall cash distributed to shareholders ▪ Future shareholder distributions will be balanced between dividends and share buybacks following extensive discussions with shareholders and share register analysis ▪ Annual dividend rebased an
Slide 20: 2019 adjusted EBITDA guidance bridge
2019 ADJUSTED EBITDA GUIDANCE BRIDGE G R O U P F A C I N G M U LT I P L E H E A D W I N D S I N 2 0 1 9 Implied growth 62 incl/excl Asia +13%/+21% 375 350 € Millions 332 +5%/+9% Adjusted Snaitech Asia Run Italy UK RGD Run Rate Guidance EBITDA (Jan – Rate Taxation* & FOBTs Entering FY2018 May 2018) I
Slide 21: 2019 adjusted EBITDA guidance bridge: IFRS16
2019 ADJUSTED EBITDA GUIDANCE BRIDGE IFRS16 TO ADD C.€20M TO ADJUSTED EBITDA 62 395 €20m from IFRS 16 370 € Millions 332 Adjusted Snaitech Asia Run Italy UK RGD Run Rate Guidance EBITDA (Jan – Rate Taxation* & FOBTs Entering FY2018 May 2018) Impact 2019 Full year results 2018 *Includes impact of 201
Slide 22: 2019 adjusted EBITDA guidance bridge: IFRS16 and Sun Bingo
2019 ADJUSTED EBITDA GUIDANCE BRIDGE IFRS16 TO ADD C.€20M & SUN BINGO TO ADD C.€20M TO ADJUSTED EBITDA 415 62 €20m from Sun Bingo 390 €20m from IFRS 16 € Millions 332 Adjusted Snaitech Asia Run Italy UK RGD Run Rate Guidance EBITDA (Jan – Rate Taxation* & FOBTs Entering FY2018 May 2018) Impact 2019
Slide 23: Outlook
OUTLOOK 2019 ADJUSTED EBITDA EXPECTED IN RANGE OF €390 TO €415 MILLION ▪ Strong growth in B2B Regulated Gaming revenue ▪ Decline in B2B Unregulated Gaming revenue, assuming Asia remains stable at c.€150 million annual revenue run rate ▪ Snaitech adjusted EBITDA to return to 2017 levels despite taxat
Slide 24: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group CEO Group CEO Full year results 2018 24
Slide 25: TradeTech Group results
TRADETECH GROUP RESULTS Actual ($m) Proforma ($m) FY 2017 FY 2018 % FY 2017 FY 2018 % Net Revenue $96.0 $110.0 14% $106.3 $110.1 4% Adjusted EBITDA $30.4 $36.7 21% $32.7 $36.7 12% Margin 32% 33% 31% 33% Clean EBITDA $30.4 $38.9 28% $32.7 $38.9 19% (excl. one-off events) Margin 32% 35% 31% 35% Full y
Slide 26: Breakdown of net revenue
BREAKDOWN OF NET REVENUE Actual ($m) Proforma ($m) FY 2017 FY 2018 % FY 2017 FY 2018 % B2C $40.5 $45.2 12% $40.5 $45.2 12% Liquidity offering $23.3 $27.9 20% $23.3 $27.9 20% Execution & Risk Management $11.4 $24.8 118% $21.7 $24.8 14% Full Turnkey offering $20.8 $12.2 -41% $20.8 $12.2 -41% Net Reven
Slide 27: Breakdown of volumes & NRPM
BREAKDOWN OF VOLUMES & NRPM Actual Proforma Volumes ($Bn) FY 2017 FY 2018 % FY 2017 FY 2018 % B2C $184 $181 -2% $184 $181 -2% Liquidity, Execution & Risk Mgmt. $847 $1,711 102% $1,332 $1,711 29% Turnkey offering $235 $153 -35% $235 $153 -35% Total $1,267 $2,045 61% $1,751 $2,045 17% Net Revenue Per
Slide 28: B2C KPIs
B2C KPI S FY 2017 FY 2018 % growth Comments Revenue ($m) $40.5 $45.2 12% The main KPI impacted by ESMA's Volume ($Bn) $184 $181 -2% leverage limitation Net Revenue Per Million $220 $250 14% Mainly due to Crypto impact in Q4-17 Active customers ('000) 34.8 27.5 -21% - Existing 7.8 12.5 60% - FTDs 27.
Slide 29: TradeTech 360 solution
TRADETECH 360 SOLUTION T H E I N D U S T R Y ’ S M O S T S O P H I S T I C AT E D A N D R O B U S T T E C H N O L O G Y ▪ Next generation technology product suite ▪ Enables brokers to efficiently operate a multi-brand, PARTNER multi-license, multi-jurisdiction, multi-channel and PORTAL multi-risk mo
Slide 30: Strategic positioning
STRATEGIC POSITIONING WELL POSITIONED IN KEY B2B MARKETS ▪ Liquidity business at inflection point in industry ▪ CFH’s technology & offering is best in market ▪ Liquidity business expanding to full suite of products including equities, cryptos & options ▪ Unique expertise & knowledge at TTA: best mon
Slide 31: Agenda
AGENDA Gaming division, Highlights Financial review TradeTech Group strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer TradeTech Group Group CEO Full year results 2018 31
Slide 32: Playtech today: Foundations for growth
P L AY T E C H TOD AY F O U N D AT I O N S F O R G R O WT H Full year results 2018 32
Slide 33: Review of 2018
REVIEW OF 2018 A C H A L L E N G I N G P E R I O D W I T H C L E A R O P E R AT I O N A L P R O G R E S S Strong momentum in Core B2B Gaming Improved quality of earnings in period ▪ Regulated B2B Gaming: 11% growth ▪ Gaming regulated revenue up to 78% (49% in 2017) ▪ Casino grew 8% excluding Asia ▪
Slide 34: Regulation
REGULATION SHAPING EXISTING MARKETS & DELIVERING NEW BUSINESS Europe UK ▪ Italy taxation increases and advertising ban in 2019 ▪ RGD increase effective April 2019 ▪ Slovakia likely in 2019, Netherlands likely in 2020 ▪ Voluntary advertising ban – ‘whistle to whistle’ Latin America US ▪ Positioned fo
Slide 35: Asia
ASIA A C T I O N S TA K E N T O S TA B I L I S E O U R P O S I T I O N I N C H I N A Actions taken China - review of 2018 ▪ MD of Asia appointed ▪ Significant increase to competition ▪ Commercial and operational process now in ▪ Price sensitive in nature place with operators and distributors ▪ Lower
Slide 36: Italian opportunity
ITALIAN OPPORTUNITY G R O W T H I N O N L I N E M A R K E T S H A R E D R I V E N B Y B R A N D & R E TA I L P R E S E N C E First Time Depositors 120,000 114,000 Snai: one of the most powerful online & retail brands 95,000 100,000 80,000 73,000 ▪ Online customers +114k in 2018 despite Dignity Decre
Slide 37: Scale continued to grow in 2018
SCALE CONTINUED TO GROW IN 2018 S I G N I F I C A N T G R O W T H I N U N D E R LY I N G M E T R I C S 27% 27% 33% Growth in Live Growth in online Growth in digital stakes Casino NGR * revenue 23% 53% 60% Growth in slots Increase in number of Growth in retail stakes NGR * active online players Full
Slide 38: Playtech tomorrow: A strategy for growth
P L AY T E C H TO M O R R O W A S T R AT E G Y F O R G R O WT H Full year results 2018 38
Slide 39: Playtech life cycle
PLAYTECH LIFE CYCLE F O C U S O N R E G U L AT E D M A R K E T S A N D H I G H M A R G I N O P P O R T U N I T I E S 2020 and beyond 2017 – 2019 Growth 1999 – 2016 Transition Establish leadership Full year results 2018 39
Slide 40: A four part business
A FOUR PART BUSINESS A L I G N I N G T H E C O M PA N Y F O R T H E F U T U R E Core B2B Core B2C ▪ Largest and leading supplier ▪ Snaitech ▪ Focus on regulated markets ▪ Sun Bingo ▪ Leading presence in key markets ▪ Casual ▪ 140 licensees ▪ HPYBET in Austria and Germany ▪ UK, Italy, Spain, Portugal
Slide 41: Detailed review of business
DETAILED REVIEW OF BUSINESS F O C U S O N R E G U L AT E D M A R K E T S A N D H I G H M A R G I N O P P O R T U N I T I E S ▪ Detailed review of all aspects of Playtech including business model, pricing, costs ▪ Findings: ▪ Significant growth in recent years extending our reach ▪ Unparalleled set o
Slide 42: Gaming strategy: higher margin B2B opportunities
GAMING STRATEGY FOCUS ON HIGHER MARGIN B2B OPPORTUNITIES Supporting structural growth Increase cross-sell ▪ Organic growth of existing licensees ▪ Significant opportunity ▪ Provide new technology ▪ Still gaps to fill ▪ Commercial & RG focused services ▪ Drive incremental margin ‘Local heroes’ ‘Untap
Slide 43: Gaming strategy: selected B2C opportunities; opportunistic M&A
GAMING STRATEGY SELECTED B2C OPPORTUNITIES; OPPORTUNISTIC M&A ▪ Focus on selected B2C opportunities including strong focus on SNAI ▪ Snaitech ideally positioned to capture significant opportunity in Italy ▪ Sun Bingo & HPYBet ▪ M&A – we remain opportunistic but with a conservative and responsible ap
Slide 44: Today's key takeaways
TODAY’S KEY TAKEAWAYS ▪ 2018 a year of delivery ▪ Foundations set for long-term growth ▪ Margin optimisation underway ▪ New technology & more flexible content delivers new opportunities ▪ A clear strategy for future growth Full year results 2018 44
Slide 45: Q&A
Q&A Full year results 2018
Slide 46: Appendix
Appendix Full year results 2018
Slide 47: B2B Gaming customer concentration
B2B GAMING CUSTOMER CONCENTRATION Licensees H1 2018 H2 2018 FY 2018 Top 5 38% 35% 37% Top 10 57% 53% 54% Top 15 68% 64% 65% Full year results 2018 47
Slide 48: Net profit and EPS
Group NET PROFIT AND EPS SIGNIFICANT ITEMS BELOW EBITDA Adjusted Excl. Acquisitions FY 2017 FY 2018 % FY 2017 FY 2018 % Adjusted EBITDA 322.1 343.0 7% 320.0 253.0 -21% - Depreciation & Amortisation -62.6 -104.9 68% -61.8 -73.7 19% - Finance Income 18.9 36.4 92% 18.9 35.2 86% - Finance Cost -24.0 -40
Slide 49: Cash flow bridge
Group CASH FLOW BRIDGE € Millions Full year results 2018 *Other acquisitions less adjusted gross cash acquired 49
Slide 50: Italian opportunity: regulatory headwinds
B2C ITALIAN OPPORTUNITY Gaming R E G U L AT O R Y H E A D W I N D S ; O P P O R T U N I T Y T O L E V E R A G E R E T A I L S T R E G N T H Regulation Impact 2019 budget law ▪ Taxation increased on all forms of gambling ▪ €20-25m EBITDA impact in 2019 pre-mitigation ▪ PREU increases on AWPs & VLTs ▪
Slide 51: Contingent consideration
Group CONTINGENT CONSIDERATION Contingent Consideration and Acquisition Max earnout Payment date redemption liability as at 31.12.18 €2.4 million Q1 2019 ACM Group €73.7 million €126.7 million €71.3 million Q1 2020 Playtech BGT Sports Ltd €25.7 million €100.0 million €25.7 million Q2 2020 Consolidat
Slide 52: Thank You
Thank You Full year results 2018