Slide 1: Full year results 2019
Full year results 2019 27 February 2020
Slide 2: Agenda
AGENDA Financial review and Group overview Highlights Strategic update outlook Alan Jackson Mor Weizer Andrew Smith Mor Weizer Chairman Group CEO Chief Financial Officer Group CEO Full year results 2019 2
Slide 3: Overview: ready for the next chapter of growth & development
OVERVIEW READY FOR THE NEXT CHAPTER OF GROWTH & DEVELOPMENT ▪ 2019 continued focus on strengthening foundations of the Group ▪ Clear focus on core B2B & B2C; regulated revenues now 88% of Group ▪ Actions taken to address underperforming assets ▪ Continued strong shareholder distributions; over €1bn
Slide 4: Agenda
AGENDA Financial review and Group overview Highlights Strategic update outlook Alan Jackson Mor Weizer Andrew Smith Mor Weizer Chairman Group CEO Chief Financial Officer Group CEO Full year results 2019 4
Slide 5: Highlights
HIGHLIGHTS C O R E B 2 B A N D B 2 C G A M B L I N G D R I V I N G P L AY T E C H ▪ Continued to transform Playtech during 2019 to adapt to evolving industry ▪ Strong execution across core businesses in 2019 ▪ Core B2B gambling business performing strongly; new structured agreement, over 50 brands l
Slide 6: Agenda
AGENDA Financial review and Group overview Highlights Strategic update outlook Alan Jackson Mor Weizer Andrew Smith Mor Weizer Chairman Group CEO Chief Financial Officer Group CEO Full year results 2019 6
Slide 7: Financial highlights
FINANCIAL HIGHLIGHTS S T R O N G C O R E B 2 B A N D O U T S T A N D I N G S N A I T E C H R E S U LT S I N 2 0 1 9 Strong Core B2B Gambling Long term financing in place ▪ Core B2B Gambling revenue growth of 15% vs FY ▪ €350m 7-year bond raised - repaid convertible 2018 ▪ UK growth of 15% at CC (17%
Slide 8: Results summary
Group RESULTS SUMMARY 1,600 1,508.4 FY 2018 1,200 FY 2019 € Millions 1,225.3 800 400 345.1 383.1 265.7 133.6 0 Total revenue Adj. EBITDA Adj. Net Profit +23% +11% -50% Full year results 2019 8
Slide 9: Summary by division FY 2019
Group SUMMARY BY DIVISION FY 2019 8 8 % R E G U L AT E D R E V E N U E S FY 2019 Revenue (€m)* FY 2019 Adjusted EBITDA (€m) TradeTech, 67.9 TradeTech, 7.8 B2B, 553.9 B2C, 160.4 B2B, 214.8 B2C, 900.5 Full year results 2019 *Amounts are before intercompany eliminations 9
Slide 10: B2B gambling revenue
B2B B2B GAMBLING REVENUE Gambling STRONG CORE B2B PERFORMANCE FY 2018 (€m) FY 2019 (€m) % CC% UK 174.7 203.8 17% 15% Other regulated 143.8 168.6 17% 16% Total Regulated B2B 318.5 372.4 17% 16% Unregulated ex Asia* 66.6 69.5 4% 4% Total Core B2B 385.1 441.9 15% 14% Asia 180.9 112.0 -38% -39% Total B2
Slide 11: B2B gambling costs
B2B GAMBLING COSTS T I G H T C O S T C O N T R O L B A L A N C E D W I T H TA R G E T E D I N V E S T M E N T S FY 2019 Excl. FY 2018* FY 2019 % One Offs % (€m) (€m) (€m) R&D 73.4 80.9 10% 80.9 10% Operations 144.2 181.2 26% 152.0 5% G&A 57.8 57.4 -1% 57.4 -1% S&M 19.5 19.6 1% 19.6 1% Total B2B Gamb
Slide 12: Core B2B gambling margin
Core B2B CORE B2B GAMBLING MARGIN Gambling T I G H T C O S T C O N T R O L B A L A N C E D W I T H TA R G E T E D I N V E S T M E N T S FY 18 FY 18 FY 19 (€m) restated (€m) (€m)* Total B2B Gambling EBITDA margin 45% 48% 39% ▪ Tight cost control and targeted investment drives margin of 29% in FY 2019
Slide 13: B2C gambling performance
B2C B2C GAMBLING PERFORMANCE Gambling Revenue (€m) Adjusted EBITDA (€m) FY 2018 FY 2019 % CC% FY 2018 FY 2019 % Snaitech* 511.9 829.7 62% n/a 93.0 162.4 75% White label (incl. Sun Bingo) 52.1 51.1 -2% -3% -23.9 9.8 n/a Retail Sport B2C 14.1 19.7 40% 40% -6.1 -11.9 n/a Total B2C Gambling 578.1 900.5
Slide 14: Snaitech performance
B2C SNAITECH PERFORMANCE Gambling € 1 8 0 M M E D I U M T E R M TA R G E T M E T O N U N D E R LY I N G B A S I S FY 2019 Tax Revenue (€m) FY 2018 FY 2019 % % Adjusted Retail betting 170.9 174.1 2% 178.0 4% Gaming machines 610.4 523.7 -14% 610.3 0% Online 82.9 100.3 21% 105.5 27% Other 30.4 31.6 4%
Slide 15: Snaitech EBITDA bridge
B2C SNAITECH EBITDA BRIDGE Gambling V E R Y S T R O N G U N D E R LY I N G G R O W T H 4.0 24% growth -5.0 € Millions 162.4 131.5 Full year results 2019 15
Slide 16: TradeTech group results
TRADETECH GROUP RESULTS FY 2018 FY 2019 % B2C $45.2 $23.6 -48% Liquidity offering $27.9 $30.0 8% Execution & Risk Management $24.8 $16.4 -34% Full Turnkey offering $12.2 $6.2 -49% Net Revenue $110.1 $76.2 -31% Adjusted EBITDA $36.7 $8.9 -76% ▪ Record low volatility with assets trading in extremely t
Slide 17: Balance sheet
BALANCE SHEET E F F I C I E N T C A P I TA L S T R U C T U R E I N P L A C E ▪ Long term financing in place; leverage ratio within target range ▪ Adjusted net cash of €333m as at year end ▪ €350m 7-year bond raised in March 2019; proceeds used to repay €297m convertible in November ▪ Playtech now ha
Slide 18: Outlook
OUTLOOK G O O D U N D E R LY I N G P E R F O R M A N C E E X P E C T E D I N C O R E G A M B L I N G Core Gambling* Non-core ▪ Core B2B Gambling to perform strongly on underlying basis ▪ Asia expected to be lower than 2019 ▪ Strong Casino and Live ▪ February revenue expected to be c. €7 million due
Slide 19: Agenda
AGENDA Financial review and Group overview Highlights Strategic update outlook Alan Jackson Mor Weizer Andrew Smith Mor Weizer Chairman Group CEO Chief Financial Officer Group CEO Full year results 2019 19
Slide 20: Highlights
HIGHLIGHTS C O R E B 2 B A N D B 2 C G A M B L I N G D R I V I N G P L AY T E C H ▪ Continued to transform Playtech during 2019 to adapt to evolving industry ▪ Strong execution across core businesses in 2019 ▪ Core B2B gambling business performing strongly; new structured agreement, over 50 brands l
Slide 21: Clear group focus
CLEAR GROUP FOCUS FOCUSED ON CORE B2B AND B2C GAMBLING Core B2B Gambling B2C Gambling Asia TradeTech Full year results 2019 21
Slide 22: Transforming Playtech through our B2B offering
TRANSFORMING PLAYTECH THROUGH OUR B2B OFFERING ▪ Following thorough review of business, Playtech continues to transform ▪ Playtech has an unparalleled set of assets ▪ New COO and CTO office to oversee operations and technology ▪ Reorganised each vertical with new heads of Sports, Casino, Content, IM
Slide 23: Safer gambling
Core B2B SAFER GAMBLING L E A D E R I N S A F E R P R O D U C T S , D AT A A N A LY T I C S & E N G A G E M E N T S O L U T I O N S Collaboration ▪ Safer Gambling Commitments – BGC in UK ▪ Industry charities / regulators / academic institutions Technology ▪ Playtech Protect: one stop shop for compli
Slide 24: Scale continued to expand in 2019
SCALE CONTINUED TO EXPAND IN 2019 P L AY T E C H C O N T I N U E S T O E X T E N D I T S R E A C H I N A L L K E Y V E R T I C A L S 54% 31% 34% Growth in Live Growth in online stakes Growth in digital stakes Casino NGR * 11% 30% 22% Growth in slots Increase in FTDs Growth in retail stakes NGR * Ful
Slide 25: Strong execution on 2019 priorities
STRONG EXECUTION ON 2019 PRIORITIES D E L I V E R I N G O U R S T R AT E G Y Sign new structured Continue to increase scale and distribution ✓ agreement and Tier 1 operators ✓ Increase Snaitech market share in Italy ✓ Extend technology leadership; continue to innovate ✓ Launch SaaS offering; sign 50
Slide 26: Executing our strategy
EXECUTING OUR STRATEGY EXECUTING ACROSS ENTIRE GAMBLING MARKET B2C / JV B2B >50 brands signed in 2019 Full year results 2019 26
Slide 27: Increasing investment in US
Core B2B INCREASING INVESTMENT IN US L I V E C A S I N O FA C I L I T Y B E I N G D E V E L O P E D I N N E W J E R S E Y ▪ Increased investment to capture medium term opportunity ▪ Playtech US office opened ▪ Live Casino facility being developed in New Jersey ▪ Further license applications underway
Slide 28: Outstanding 2019 for Snaitech
Core B2C OUTSTANDING 2019 FOR SNAITECH S N A I T E C H T H E M A R K E T L E A D E R I N I T A LY #1 Market share in total online 24% Growth in underlying 50% Online Penetration 45% (betting & gaming) in H2 adjusted EBITDA 40% 2019 30% 46% 20% 31% Growth in online 10% 10% Underlying EBITDA 0% UK: It
Slide 29: Unlocking value in Snaitech
Core B2C UNLOCKING VALUE IN SNAITECH STRONG PROGRESS SINCE ACQUISITION Online market share Online stakes (€m) #1 3000 10% +67% 10% €55m #4 2000 5% 7% Land sale 1000 0% 0 2017 H2 2019 2017 2019 Full year results 2019 29
Slide 30: Potential impact of £2 online stakes
POTENTIAL IMPACT OF £2 ONLINE STAKES P L AY T E C H W I L L A D A P T T O A N Y S C E N A R I O ▪ B2B UK Casino (Slots, Table Games, Live) revenue is c. €70 million per annum ▪ Nearly 70% from Slots ▪ B2C UK Casino revenue c. €35 million per annum ▪ Virtually all is Slots; table and card games immat
Slide 31: Asia
Asia ASIA M A R K E T R E M A I N S H I G H LY C O M P E T I T I V E ▪ Competition remains intense with low barriers to entry ▪ Operators remain highly price sensitive ▪ Positive initial indications on incentivisation programme ▪ No change to regulatory backdrop ▪ February includes negative impact f
Slide 32: TradeTech
TRADETECH 2019 review ▪ Record low volatility with assets trading in extremely tight ranges during Q1 ▪ Exceptional market making movements in September-October 2019 ▪ Significant improvements in B2C following Implementation of new strategy from June 2019 ▪ CFH performed well in 2019 growing custome
Slide 33: Assets under review
ASSETS UNDER REVIEW A C T I O N B E I N G TA K E N ▪ Casual gaming ▪ Classified as discontinued operation ▪ For sale ▪ TradeTech ▪ Restructuring underway ▪ Performance being optimised with focus on restoring profitability ▪ Retail B2C Sport (HPYBET) ▪ Strategic asset in Germany ahead of regulation ▪
Slide 34: Focus for 2020
FOCUS FOR 2020 STRONG EXECUTION TO CONTINUE ▪ Drive Core B2B ▪ Additional structured agreements ▪ Sign further 50 brands ▪ Increase investment in US ▪ Snaitech to outperform in Italy ▪ Drive further developments in Safer Gambling ▪ Further action to be taken on underperforming assets ▪ Analyst day i
Slide 35: Q&A
Q&A Full year results 2019
Slide 36: Appendix
Appendix Full year results 2019
Slide 37: 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 1,600 1,499.2 FY 2018 € Millions 1,200 FY 2019 1,225.3 800 400 345.1 381.6 264.3 0 133.0 Total revenue Adj. EBITDA Adj. Net Profit Incl. acquisitions +22% +11% -50% Excl. acquisitions -6% -12% -61% Full year results 2019 37
Slide 38: Summary by division FY 2019
Group SUMMARY BY DIVISION FY 2019 FY 2018 (€m) FY 2019 (€m) Revenue Adj. Margin Revenue Adj. Margin EBITDA EBITDA B2B Gambling 566.0 252.6 45% 553.9 214.8 39% B2C Gambling 578.1 63.0 11% 900.5 160.4 18% Reported (Intercompany) (11.7) n/a n/a (13.9) n/a n/a Total Gambling 1,132.4 315.6 28% 1,440.5 37
Slide 39: B2B gambling customer concentration
B2B GAMBLING CUSTOMER CONCENTRATION Licensees FY 2018 FY 2019 Top 5 41% 34% Top 10 54% 50% Top 15 62% 58% Full year results 2019 39
Slide 40: B2B gambling performance
B2B B2B GAMBLING PERFORMANCE Gambling FY 2018 FY 2019 % CC % (€m) (€m) Casino 320.1 251.0 -22% -22% Services 84.6 91.6 8% 7% Sport 98.0 152.7 56% 54% Bingo 26.4 23.3 -11% -13% Poker 9.6 8.4 -12% -12% Other 27.3 26.9 -2% -3% Total B2B Gambling 566.0 553.9 -2% -3% Full year results 2019 40
Slide 41: B2B gambling costs
B2B B2B GAMBLING COSTS Gambling FY 2018 FY 2019 % (€m) (€m) R&D 80.3 80.9 1% Operations 151.1 181.2 20% G&A 62.1 57.4 -8% S&M 20.0 19.6 -2% Total B2B Gambling 313.5 339.1 8% B2B Gambling R&D excl. cap’ 47.1 48.0 2% Full year results 2019 * FY18 numbers are shown per FY18 results presentation (pre ad
Slide 42: B2B gambling costs: FY19 excl. IFRS 16
B2B GAMBLING COSTS: B2B Gambling FY19 EXCL. IFRS 16 FY 2018 FY 2019* % (€m) (€m) R&D 80.3 78.2 -3% Operations 151.1 174.3 15% G&A 62.1 52.7 -15% S&M 20.0 19.1 -4% Total B2B Gambling 313.5 324.3 3% B2B Gambling R&D excl. cap’ 47.1 41.5 -12% Full year results 2019 *FY19 numbers have been adjusted here
Slide 43: Net profit and EPS
Group NET PROFIT AND EPS Adjusted Excl. Acquisitions FY 2018 FY 2019 % FY 2018 FY 2019 % Adjusted EBITDA 345.1 383.1 11% 257.2 228.3 -11% - Depreciation & Amortisation -103.5 -157.6 52% -73.5 -98.1 -33% - Finance Income / (Expense) * -3.9 -49.6 1172% 15.5 -20.3 n/a - Tax -35.1 -43.9 25% -27.6 -22.3
Slide 44: Net profit bridge
Group NET PROFIT BRIDGE € Millions 133 91 Full year results 2019 44
Slide 45: Cash on balance sheet
CASH ON BALANCE SHEET Dec 2019 (€m) June 2019 Dec 2018 Gambling TTG Playtech Snai Total (€m) (€m) * ex. Snai Gross Cash 177 335 511 155 666 576 622 Client funds / (84) (210) (294) (41) (335) (272) (309) progressives * Adjusted gross cash 93 125 217 115 333 304 313 Cash needed for (50) (53) (103) (30
Slide 46: Adjusted cash bridge
Group € Millions ADJUSTED CASH BRIDGE 333 313 Full year results 2019 *Adjusted for client funds and progressives 46
Slide 47: Contingent consideration
Group CONTINGENT CONSIDERATION Contingent Consideration and Acquisition Max earnout Payment date redemption liability as at 31.12.19 ACM Group - €129.3 million Q3 2020 Playtech BGT Sports Ltd €36.9 million €95.0 million Q2 2020 HPYBET Austria GbmH - €15.0 million Q2 2021 BetBuddy €1.4 million €1.4 m
Slide 48: Thank You
Thank You Full year results 2019