Slide 1: Interim Results
INTERIM RESULTS 28 August 2014
Slide 2: Agenda
AGENDA HIGHLIGHTS • ALAN JACKSON, CHAIRMAN FINANCIAL REVIEW • RON HOFFMAN, CFO STRATEGIC REVIEW • MOR WEIZER, CEO Q&A 2
Slide 3: Highlights
HIGHLIGHTS • Excellent financial performance for the first half • total revenue up 21% to €214.4m • adj. EBITDA up 28% to €97.6m • adj. Profit up 45% to €96.8m • adj. EPS up 45% to 33.3 € cents per share • Payment of £100m special dividend in H1 • Interim dividend of 8.9 € cents per share 3
Slide 4: Agenda
AGENDA FINANCIAL REVIEW • ALAN JACKSON, CHAIRMAN HIGHLIGHTS • RON HOFFMAN, CFO STRATEGIC REVIEW • MOR WEIZER, CEO Q&A 4
Slide 5: Results Summary
RESULTS SUMMARY 250 H113 H114 200 214.4 176.8 150 100 97.6 96.8 76.2 50 66.8 0 Total Revenue Adj. EBITDA Adj. Profit +21% +28% +45% 5
Slide 6: Underlying Results Summary
UNDERLYING RESULTS SUMMARY 250 H113 H114 200 200.7 176.8 150 100 91.1 90.9 76.2 50 66.8 0 Total Revenue* Adj. EBITDA* Adj. Profit* +14% +20% +36% *Results exclude acquisitions made in the last 18 months 6
Slide 7: Revenue Bridge
REVENUE BRIDGE220 210 13.6 214.4 200 10.1 7.7% 190 13.8 5.7% € Millions 180 176.8 7.8% 170 Underlying 160 Growth 14% 150 140 H113 Organic New Business* Acquisitions H114 *New Business defined as new licensees or new products launched in the past 18 months 7
Slide 8: Revenue Breakdown
REVENUE BREAKDOWN 116.2 120 • Casino up 29% H114 up 3% on H213 90.3 100 • Services up 19% 80 61.3 • Sport up 35% € Millions 51.6 60 • Bingo down 9% 40 • Poker down 8% 12.3 • Land-based up 2% 20 9.3 9.1 8.4 8.0 7.4 5.8 5.7 3.0 2.8 0 Poker and bingo line items exclude casino side games contribution, w
Slide 9: Casino Breakdown
FINANCIAL REVIEW CASINO BREAKDOWN 120 2.6 0.4 116.2 115 4.9 +3%* 17.9 +18%* 110 +94%* 105 +1%** € Millions 100 +3%** 95 90.3 90 +6%** +31%* 85 +20%** 80 H113 Core Mobile LIVE Premium H114 content *Growth of each segment **Constituent part of casino growth 9
Slide 10: Mobile Growth
MOBILE GROWTH €m H113 H114 % Sports 7.9 10.4 31% Casino 5.3 10.2 94% Bingo 0.8 1.1 30% Poker - 0.1 - Total 14.0 21.8 56% 10
Slide 11: Customer Concentration
CUSTOMER CONCENTRATION 30 H113 H114 Top 2 licensees 40% 29% 25 27 Top 5 licensees 59% 54% 25 Top 10 licensees 71% 75% 20 Top 15 licensees 78% 83% 15 16 10 11 5 0 Licensees > €5.0m revenues annualised Licensees > €2.0m revenues annualised H113 H114 11
Slide 12: Adj. EBITDA Margin
ADJ. EBITDA MARGIN 42.9% 43.4% 250 200 214.4 150 176.8 EBITDA Revenue 100 97.6 50 76.2 0 H113 H114 • EBITDA Margin 43.1%, up 240bps • Increase due to €/Sterling (60bps), capitalisation (80bps), reduced revenue driven costs (30bps), one off items (40pbs) and acquisitions (30bps) 12
Slide 13: Analysis of Costs and Expenses
ANALYSIS OF COSTS AND EXPENSES €m H113 H114 Adj. operational costs 100.7 116.8 Revenue-driven costs 19.1 10.8% 17.1 8.0% Adj. operating expenses exc. 81.6 99.7 revenue-driven costs Employee-related costs 49.7 61.0% 62.7 62.8% Cost of services 11.5 14.1% 14.4 14.4% Administration and office costs 8.4
Slide 14: Summary Cash Flow
SUMMARY CASH FLOW €m H113 H114 Cash from operating activities 89.3 98.6 Net proceeds from sale of WHO stake 492.5 - Acquisition of subsidiaries (net of cash acquired) (37.7) (29.8) Proceeds from available for sale investments 18.2 - Other 10.5 (30.9) Cash provided by investing activities/(used in) 4
Slide 15: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS • Cash balance €366.0m • Total Assets €903.2m • Total Equity €780.9m (3 • 013: €576.2m) • Debt free at year end • De minimis deferred consideration • Forex gains on cash held in Sterling 15
Slide 16: Agenda
AGENDA FINANCIAL REVIEW • ALAN JACKSON, CHAIRMAN STRATEGIC REVIEW • RON HOFFMAN, CFO HIGHLIGHTS • MOR WEIZER, CEO Q&A 16
Slide 17: Strategic Highlights
Strategic Highlights • Successful execution of strategy • Full launch of Ladbrokes • Significant contract wins in Q2 • Sales momentum continued into Q3 • Expanding relationships with licensees • Major progress in services division • Roll-out of BI Innovation Package 17
Slide 18: Innovation and improved IMS
Innovation and improved IMS • Player acquisition and retention tools • Player value predictive models • Notification tools outside of inbox • Data-driven marketing tools • UI optimiser • In-game tracking • Reduced attrition 18
Slide 19: Casino
Casino • Strong growth • Mobile casino gaining momentum • Live continuing to grow • Strong licensee pipeline • Further development of mobile • Increased number of games released 19
Slide 20: Sport
Sport • Further launches • Many more opportunities in regulated markets • Integration of 3rd party content • Unique multi-channel, cross-platform integrated solution • Robust performance • Enhanced by partnership agreement 20
Slide 21: Bingo
Bingo • Increased cross-sell activity • Driven by tablet, mobile, slots and open platform • Mirror Group launched (“white label”) • Economic player acquisition tool 21
Slide 22: Poker
Poker • Innovation • Network ecology improved in consultation with licensees • Roll-out of the most advanced tablet poker product • Independent network more important than ever 22
Slide 23: Land-based
Land-based • Rolled out converged unique multi- channel offering to 1,700+ Coral shops • Full visibility of players across channels • Tailored experience for each player • Automated limits setting across all channels • Major trial continues 23
Slide 24: Mobile
Mobile • Mobile penetration accelerated through H1 • Total mobile growth of 56% • Casino almost as large as sports • Significant competitive advantage • Mobile poker launched 24
Slide 25: Services
Services • Ladbrokes making good progress following April migration to IMS and casino • New turnkey licensees in three important regulated markets • Robust pipeline with a strong focus on regulating markets • PokerStrategy progress 25
Slide 26: Progress in regulating markets
Progress in regulating markets • Agreement signed with Holland Casino • Trinity Mirror: white label • Significant operators: SkyBet, RAY • Structured agreements • Strong pipeline of regulated deals • UKGC license application submitted 26
Slide 27: New structured deals
New structured deals • Trinity Mirror o large multimedia UK Publisher o new ‘white label’ model • Caliente o largest land-based gambling group in Mexico o operations in 11 other countries in South America o long term agreement for software and services • Major Italian media brand o owns extensive It
Slide 28: Capital Allocation
Capital Allocation • Continue to seek strategic opportunities as well as bolt-on acquisitions • Acquisition criteria unchanged • Maintain competitive edge through continual investment • In-house development • Board keeping capital structure under review 28
Slide 29: Q&A
Q&A 29