Ainsworth Game Technology Limited · ASX:AGI
Ainsworth Game Technology — Investor Presentation (February 2018)
37 slides from Ainsworth Game Technology's investor presentation, Feb 27, 2018
Slide 1: H1FY18 Results Announcement
H1FY18 Results Announcement Ainsworth Game Technology Limited www.agtslots.com.au
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This presentation has been prepared by Ainsworth Game Technology Limited ACN 068 516 665 (AGT) in good faith.No express or implied warranty is given as to the accuracy or completeness of the information in this document or the accompanying presentation. All statutory repr
Slide 3: Continued execution of a clear strategy: Grow international revenues and higher quality earnings
Continued execution of a clear strategy: Grow international revenues and higher quality earnings 3
Slide 4: Agenda
1. Results Highlights 2. Consolidated Results 3. Segment Results - Americas 4. Segment Results - Australia 5. Segment Results - Rest of the World 6. Gaming Products 7. Regulatory Update 8. Online 9. Outlook 4 4
Slide 5: Key Highlights
Key Highlights H1FY18 Results in line with expectations: • Total sales revenue of $120.3m, decrease of 2% on pcp • Profit before tax (excluding currency impacts) is $16.2m, 7% increase on pcp • EPS down to 2.4 cents (PCP : 6.4 cents) Continued growth in international businesses: • International reve
Slide 6: Agenda
1. Results Highlights 2. Consolidated Results 3. Segment Results - Americas 4. Segment Results - Australia 5. Segment Results - Rest of the World 6. Gaming Products 7. Regulatory Update 8. Online 9. Novomatic Update 10. Outlook 6
Slide 7: Profit & Loss Summary
Profit & Loss Summary • Profit before tax (excluding currency 6 months to 6 months to A$m Change (%) impacts) is $16.2m, 7% increase on 31-Dec-2017 31-Dec-2016 pcp Domestic revenue 37.1 41.0 (10%) • Included in results is a gain on sale of International revenue 83.2 81.7 2% land of $2.5m pre tax pro
Slide 8: Results Adjusted for Currency Loss / (Gain)
Results Adjusted for Currency Loss / (Gain) 6 months to 6 months to Change A$m 31-Dec-2017 31-Dec-2016 (%) PBT 11.8 20.0 (41%) Currency loss / (gain) (before tax) 4.4 (4.8) (192%) Adjusted PBT 16.2 15.2 7% NPAT 9.7 20.6 (53%) (1) Currency loss / (gain) (after tax) 3.9 (4.3) (191%) Adjusted NPAT 13.6
Slide 9: Reconciliation – Profit before Tax to EBITDA
Reconciliation – Profit before Tax to EBITDA 6 months to 6 months to Change A$m 31-Dec-2017 31-Dec-2016 % Reconciliation: Profit before tax 11.8 20.0 (41%) Net interest (1.0) (1.4) (29%) Depreciation and amortisation 13.8 13.3 4% Reported EBITDA 24.6 31.9 (23%) Foreign currency loss / (gain) 4.4 (4.
Slide 10: Operating Costs
Operating Costs 6 months to 6 months to Change 31-Dec-2017 31-Dec-2016 % Sales, service and marketing ('SSM') 29.6 27.3 8% R&D 16.5 18.4 (10%) Administration 9.8 12.7 (23%) Total Operating costs 55.9 58.4 (4%) 4% decrease in total operating costs due to disciplined cost controls • Increase in SSM ex
Slide 11: Staff Headcount
Staff Headcount Australia and Rest of the World # Staff H1 FY18 H1 FY17 Sales 37 38 Service 79 79 Production 44 45 Administration 41 44 R&D 130 135 Total Staff Numbers - Australia & Rest 331 341 of the World Americas # Staff H1 FY18 H1 FY17 Sales 30 32 Service 44 46 Production 78 56 Administration 4
Slide 12: Net Profit Bridge
Net Profit Bridge (1) No tax effect on $3.1m currency loss in H1FY18 (H1FY17: $3.2m currency gain) Calculation of currency (loss) / gain after tax: H1FY18: ($3.1m + ($1.2m x 0.7) = $3.9m loss), H1FY17 ($3.2m + ($1.6m x 0.7) = $4.3m gain) • $5.5m decrease in machine sales due to reduction in machine
Slide 13: Ainsworth at a Glance
Ainsworth at a Glance Revenue Breakdown by Geography 7% mw Australia 30% ™ North America @ Latin America m Rest of the World 32% Revenue Breakdown by Product Type 3% m Product Sales 1m Participation/Rental = Other 2,853 Americas Game Operations - Installed Base EBITDA Breakdown 5% 2,997 m North Amer
Slide 14: Balance Sheet
Balance Sheet • Strong balance sheet to self fund A$m x31-Dec-2017 30-Jun-17 growth strategies Cash 28.7 21.1 • A$90m multi-option facility Receivables 120.4 128.6 arrangement extended to 1 March Other Current Assets 92.2 87.3 2019 Total Current Assets 241.3 237.0 • Receivables totalled to $158.2m N
Slide 15: Balance Sheet Ratios
Balance Sheet Ratios Financial covenants ratios CY18 Interest cover ratio - (EBITDA/Interest Expense) 45.48 Gearing Ratio - (Debt)/(Debt + Equity) 16.25% Leverage Ratio - (Debt/EBITDA) 1.08 Debt ratios 31/12/2017 30/06/2017 Debt ratio (Total Liabilities/Total Assets) 24.81% 25.84% Debt to Equity rat
Slide 16: Cashflow Statement
Cashflow Statement 6 months to 6 months to • Net cash from operating activities A$m 31-Dec-2017 31-Dec-2016 Change is $6.9m, consistent with PCP • Increase in net cash from Net cash from operating activities 6.9 7.0 (0.1) financing activities due to no Interest received 1.7 1.9 (0.2) dividend paid i
Slide 17: Agenda
1. Results Highlights 2. Consolidated Results 3. Segment Results - Americas 4. Segment Results - Australia 5. Segment Results - Rest of the World 6. Gaming Products 7. Regulatory Update 8. Online 9. Outlook 17
Slide 18: Segment Results – North America
Segment Results – North America North America – consolidating market North America position: 6 months to 6 months to A$m Change (%) • Slight growth in Revenue and 31-Dec-2017 31-Dec-2016 Segment Profit Revenue 38.3 37.2 3% Segment Profit 14.7 14.3 3% • Included in Segment Profit is $2.5m gain from s
Slide 19: FY 2018 Roadmap (Class II) Game Titles
FY 2018 Roadmap (Class II) Game Titles NEXT 12 TOTAL IN 12 NOW MONTHS MONTHS 86 54 140 8 26 34 30 54 84 8 26 34
Slide 20: Continued Development of Top Performing Brands in North America
Continued Development of Top Performing Brands in North America Top Performing Brands • All brands listed are performing at an average index of 1.0x to 2.6x of house average 20
Slide 21: Segment Results – Latin America
Segment Results – Latin America Latin America – continued strong position in the market: • Strong growth in units +26% driven by Latin America increased sales from Argentina and A$m 6 months to 6 months to Change (%) Colombia 31-Dec-2017 31-Dec-2016 Revenue 36.6 33.1 11% • Decrease in segment profit
Slide 22: Latin America Market Share
Latin America Market Share 22
Slide 23: Continued Development of Top Performing Brands in Latin America
Continued Development of Top Performing Brands in Latin America Top Performing Brands • All brands listed are performing at an average index of 1.5x to 3.1x and above of house average 23
Slide 24: Agenda
1. Results Highlights 2. Consolidated Results 3. Segment Results - Americas 4. Segment Results - Australia 5. Segment Results - Rest of the World 6. Gaming Products 7. Regulatory Update 8. Online 9. Outlook 24
Slide 25: Segment Results - Australia
Segment Results - Australia 6 months to 6 months to • Evident signs of market recovery: A$m 31-Dec-2017 31-Dec-2016 Change (%) H1FY18 domestic revenue Revenue 37.1 41.0 (10%) increased by $4.0m (+12%) on Segment Profit 10.2 12.5 (18%) H2FY17. QLD revenues +46% Segment Profit (%) 28% 30% (2%) • Despi
Slide 26: Agenda
1. Results Highlights 2. Consolidated Results 3. Segment Results - Americas 4. Segment Results - Australia 5. Segment Results - Rest of the World 6. Gaming Products 7. Regulatory Update 8. Online 9. Outlook 26
Slide 27: Segment Results – Rest of the World
Segment Results – Rest of the World • Revenue drop due to lower Asia and A$m 6 months to 6 months to Change (%) 31-Dec-2017 31-Dec-2016 Europe sales compared to PCP Revenue 8.3 11.4 (27%) • Online contributed $2.8m in Segment Profit 5.2 6.2 (16%) revenue, +133% on PCP Segment Profit (%) 63% 54% 9% U
Slide 28: Agenda
1. Results Highlights 2. Consolidated Results 3. Segment Results - Americas 4. Segment Results - Australia 5. Segment Results - Rest of the World 6. Gaming Products 7. Regulatory Update 8. Online 9. Outlook 28
Slide 29: Gaming Products – H1FY18 Key Highlights
Gaming Products – H1FY18 Key Highlights • Delivered a diverse range of new approved games to key markets • Launched the new EVO cabinet • Rolled out new game development environment, which will accelerate AGT’s ability to improve time to market for new games as well as increase diversity of games 29
Slide 30: Server Based Gaming Products – H1 Highlights
Server Based Gaming Products – H1 Highlights • Received regulatory approval in Washington State for Electronic Scratch Ticket System • Development of historical horse racing system and games completed, subject to approvals, this will support the Churchill Downs partnership • Launched the innovative
Slide 31: Global Gaming Products for H2
Global Gaming Products for H2 Continue executing on our global game strategy to: • Release a broad range of new innovative Class III proprietary titles across the EVO and A640 cabinets • Continue development of new licensed games across Class II and Class III • Continue to release new innovative pro
Slide 32: Agenda
1. Results Highlights 2. Consolidated Results 3. Segment Results - Americas 4. Segment Results - Australia 5. Segment Results - Rest of the World 6. Gaming Products 7. Regulatory Update 8. Online 9. Outlook 32
Slide 33: Regulatory Update
Regulatory Update Continuing strategy to deliver new jurisdictions based on detailed market assessment of commercial opportunities From 1 July 2017 to current, the AGT group has secured new tribal gaming licenses in the North American key commercial markets – California, Colorado, North Dakota and W
Slide 34: Agenda
1. Results Highlights 2. Consolidated Results 3. Segment Results - Americas 4. Segment Results - Australia 5. Segment Results - Rest of the World 6. Gaming Products 7. Regulatory Update 8. Online 9. Outlook 34
Slide 35: Online and Social
Online and Social Our strategy is to build further scale in regulated real money gaming markets and expansion of Ainsworth’s social casino content with land based casino operators by leveraging our innovative RGS technology and proven slot game brands. Online revenue was $2.8m in this half, an incre
Slide 36: Agenda
1. Results Highlights 2. Consolidated Results 3. Segment Results - Americas 4. Segment Results - Australia 5. Segment Results - Rest of the World 6. Gaming Products 7. Regulatory Update 8. Online 9. Outlook 36
Slide 37: Outlook
Outlook • Continued execution of the two key strategies : Grow international revenue and drive higher quality earnings - Strong pipeline of contracted orders in North America for H2, e.g. CDI 600 units, subject to regulatory approval - New jurisdictions (e.g. Washington) in North America creating ne
Ainsworth Game Technology — Investor Presentation (February 2018) on 6ix