Playtech Plc · LSE:PTEC
Playtech — Debt Investor Presentation (October 2018)
40 slides from Playtech's debt investor presentation, October 2018
Slide 1: Playtech plc Investor presentation
Playtech plc Investor presentation October 2018
Slide 2: Disclaimer
D ISC LA IMER NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR TO ANY PERSON OR ADDRESS IN THE U.S. IMPORTANT: You must read the following before continuing. The following applies to the presentation materials contained in this document, and you are therefore advised to read this carefully before reading,
Slide 3: Today's presenting team
TOD AY'S PR ESEN TIN G TEA M Mor Weizer Andrew Smith Chief Executive Officer Chief Financial Officer Mor was appointed as Andrew was appointed as Chief Executive Officer in Chief Financial Officer in May 2007 January 2017 PLAYTECH 2018 3
Slide 4: Agenda
A GEN D A Historical financial Transaction overview Playtech overview Key credit highlights summary PLAYTECH 2018 4
Slide 5: Introduction
IN TR OD U C TION Playtech plc ("Playtech", "the "Group") is a leading technology company in the gambling and financial trading industries, with a focus on regulated and regulating markets It operates via two divisions: the Gambling Division and the Financials Division (operating under the "Trad
Slide 6: Transaction structure
TR A N SA CTION STR U C TUR E Sources (€m) Uses (€m) New notes 530 Bridge repayment 412 Cash from balance sheet 428 Repayment of Snaitech notes 513 Estimated accrued interest, ticking fees and redemption cost 25 Estimated fees and expenses 8 Total sources 958 Total uses 958 Capitalisation (€m) June-
Slide 7: Simplified group structure
SIMPLIFIED GR OU P STR U C TU RE • €530m Senior Secured Playtech PLC Notes due 2023 (the “Issuer”) • €250m Revolving Credit Facility Playtech Software Technology Trading TradeTech Holding Limited IoM Limited Limited Playtech Services Subsidiaries Subsidiaries (Cyprus) Limited Pluto Holdings (Italia)
Slide 8: Summary indicative terms
SU MMA RY IN D IC ATIVE TER MS Terms Senior Secured Fixed Rate Notes Issuer: Playtech plc Total amount: €530 million Currency: EUR Purpose: Refinancing of existing indebtedness, payment of related transaction fees and expenses Ranking: Senior secured Security: Share pledge of the Guarantors and Snai
Slide 9: Agenda
A GEN D A Historical financial Transaction overview Playtech overview Key credit highlights summary PLAYTECH 2018 9
Slide 10: Playtech overview
PLAYTEC H OVERVIEW GROUP • Founded in 1999 • ~€1.8bn market cap • ~5,800 employees in 17 countries • €1,657m LTM June-18 Combined Revenues • €439m LTM June-18 Combined Adj. EBITDA Playtech is a leading technology company in the gambling and financial trading industries % of LTM Combined Revenue / %
Slide 11: B2B overview
B 2B OVERVIEW B2B Gambling U N R I VA L L E D G A M B L I N G S O L U T I O N S Overview B2B Revenue by vertical (LTM June-18) Design, development and distribution of software, content, platform technology and services to the online and land-based gambling industry Operates on a revenue share ba
Slide 12: Global presence
GLOB A L PR ESEN CE B2B Gambling Customer presence Playtech presence United Kingdom Poland Selected own licensed jurisdictions: Alderney Belgium Czech Gibraltar Republic Great Britain Portugal Kahnawake Mexico Italy Columbia Malta Greece Romania Spain Italy Spain PLAYTECH 2018 12
Slide 13: Proprietary technology and platform
PR OPR IETA RY TEC H N OLOGY A N D PLATFORM B2B Gambling T H E O N LY I N T E G R AT E D O M N I - C H A N N E L O F F E R I N G I N G A M B L I N G ONLINE RETAIL (Native apps, desktop, tablet, mobile) (SSBTs, IGC, ECM, VideoBet & OTC) SPORTS CASINO LIVE BINGO POKER VIRTUALS LOTTERY IMS PLATFORM Bus
Slide 14: Broad product offering
B R OA D PR OD U C T OFFER IN G B2B Gambling CASINO PLAYTECH LIVE PLAYTECH BGT SPORTS VIRTUAL SPORTS Largest portfolio of best- Award-winning back-end Unique player segmentation State-of-the-art graphics performing content platform and personalisation tools and motion capture tech BINGO POKER RETAIL
Slide 15: Competition
COMPETITION B2B Gambling T H E A LT E R N AT I V E S Platform and infrastructure In-house build Casino Sports Poker Bingo Verticals and content PLAYTECH 2018 15
Slide 16: B2C overview
B 2C OVERVIEW B2C Gambling SNAITECH, SUN BINGO AND CASUAL GAMING PRODUCT OFFERING Overview B2C Revenue by vertical (Combined LTM June-18) Joint ventures or white label agreements with other operators or through direct B2C operations in select markets 4% 2%3% Three segments: Snaitech, Sun Bingo (
Slide 17: Focus on Snaitech
FOC U S ON SN A ITEC H B2C Gambling A H I G H Q U A L I T Y, M A R K E T L E A D I N G B R A N D The leading sports brand in Italy, with 20.3% market share in the Italian retail betting sector1 Heritage dates back to 1906 Second largest gaming machines network in Italy Scale and position S
Slide 18: Focus on Snaitech
FOC U S ON SN A ITEC H B2C Gambling Core business Ancillary businesses Online: 270,000+ active players Payment Services proprietary platform across sports and casino in 2017 Sat TV broadcasting Betting: 1,600+ betting PoS, primarily Large landowner: 1.65+ mln sqm (including 3% of franchise
Slide 19: TradeTech overview
TR A D ETECH OVERVIEW TradeTech H I G H LY S C A L A B L E F I N A N C I A L T R A D I N G S O L U T I O N S Overview B2B and B2C products in the CFD and financial trading segments ("TradeTech") The B2B offering provides retail brokers a proprietary trading platform, CRM, risk management, back-o
Slide 20: Strategy focused on sustainable growth
20 STR ATEGY FOC U SSED ON SU STA IN A B LE GROWTH Group • Strong focus on growing regulated revenue and quality of earnings Expand scale with a focus on regulated and regulating • Enter new markets via the B2B or B2C channel and secure foothold markets • Leverage comprehensive and innovative techno
Slide 21: Agenda
A GEN D A Historical financial Transaction overview Playtech overview Key credit highlights summary PLAYTECH 2018 21
Slide 22: Summary credit highlights
22 SU MMA RY C R ED IT H IGH LIGH TS 1. Consistent growth of key operating markets, which is expected to continue in the future 2. Scalable proprietary technology 3. Successful track record of innovation 4. Global and diversified technology company 5. Proficiency in regulated markets and well placed
Slide 23: Consistent growth of key operating markets
1 C ON S IS T E N T GR OWT H OF K E Y OP E R AT IN G MA R K ETS S T R O N G G R O W T H D R I V E N B Y P O S I T I V E F U N D A M E N TA L S A N D F AV O U R A B L E R E G U L AT O R Y L A N D S C A P E Online gambling market Key market drivers (€bn) 1 Evolving regulatory regimes providing new opp
Slide 24: Consistent growth of key operating markets
1 C ON S IS T E N T GR OWT H OF K E Y OP E R AT IN G MA R K ETS S T R AT E G I C F O O T H O L D I N F A S T G R O W I N G R E G U L AT E D M A R K E T S Europe Online Online Example Online Online penetration1 CAGR 17-20 LATAM Example penetration1 CAGR 17-20 UK 40% 9% Mexico 21% 8% Poland 20% 19% Co
Slide 25: Scalable proprietary technology
2 SC A LA B LE PR OPR IETA RY TEC HNOLOGY Platform based on centralised technology Highly scalable in terms of product development and distribution Minimal marginal cost to onboard new clients Playtech ONE technology, single CRM across all verticals Big data powered Information Management Syst
Slide 26: Successful track record of innovation
3 SU C C ESSFU L TR A CK R EC OR D OF INNOVATION Significant R&D spend possible due to scale and implicit At the forefront of industry innovation sharing across large licensee base (€m) 2011: Playtech launches industry's first seamless wallet solution 2014: Playtech launches omni-channel offering %
Slide 27: Global and diversified technology company
4 GLOB A L A N D D IVER SIFIED TEC H N OLOGY COMPANY C O M P L I M E N TA R Y B 2 B A N D B 2 C A C T I V I T I E S Revenue by division Adjusted EBITDA by division LTM June-18 Combined Revenue (€m) LTM June-18 Combined EBITDA (€m) 6% 8% 29% 36% €1,657m €439m 58% 63% B2C Gambling B2B Gambling B2C Gam
Slide 28: Global and diversified technology company
4 GLOB A L A N D D IVER SIFIED TEC H N OLOGY COMPANY DIVERSE CUSTOMER BASE ACROSS ALL MAJOR PRODUCTS AND NUMEROUS GEOGRAPHIES Revenue by vertical Geographical exposure LTM June-18 Combined Revenue (€m) LTM June-18 Combined Revenue (€m) LTM June-18 Combined EBITDA (€m) Financials Playtech Division 65
Slide 29: Regulatory proficiency
5 R EGU LATORY PR OFIC IEN C Y S T R O N G ' K N O W - H O W ' W I T H D E D I C AT E D I N T E R N A L T E A M S Focus on regulated markets Anticipate key regulatory changes & In-house regulation and compliance (LTM June-18 Combined Revenue) maintain strong ties with regulators team Operations in
Slide 30: Strong track record of profits and cash generation
6 STRONG TRACK RECORD OF PROFITS AND C A S H G E N E R AT I O N Adjusted EBITDA (€m) CAGR Margin 40% 43% 40% 36% 26% FY15-17 Combined: 439 13% • High and stable cash 252 302 322 296 conversion of c. 70% of Adj. EBITDA3 1 2015A 2016A 2017A LTM June 18 Operating Free Cash Flow2 • Stable working capita
Slide 31: Highly experienced management team
7 H IGH LY EXPER IEN C ED MA NA GEMENT TEA M Mor Weizer Andrew Smith Shimon Akad Fabio Schiavolin Ron Hoffman Group CEO Group CFO Group COO Snaitech CEO TradeTech CEO Armin Sageder Uri Levy Ian Ince Alex Latner James Newman Playtech BGT Head of Business Head of General Counsel Head of Investor Sport
Slide 32: Agenda
A GEN D A Historical financial Transaction overview Playtech overview Key credit highlights summary PLAYTECH 2018 32
Slide 33: Playtech summary results
P L AY T E C H S U MMA RY R E S U LT S Revenue Adjusted EBITDA (€m) (€m) FY2018E 807 822 Combined 709 Margin 40% 43% 40% 36% Adj 630 EBITDA guidance: €380- 420m1 302 322 296 252 5 2015A 2016A 2017A LTM June 18 2015A 2016A 2017A LTM June 18 5 Capital expenditures2 Operating Free Cash Flow3 (€m) (€m)
Slide 34: Revenue and EBITDA by division
R EVEN U E A ND EB ITD A B Y D IVISION B2B GAMBLING IS THE LARGEST CONTRIBUTOR TO HISTORICAL EBITDA GROWTH Revenue Adjusted EBITDA (€m) (€m) LTM CAGR LTM CAGR 2015A 2016A 2017A 2015A 2016A 2017A June-20181 2015-2017 June-20181 2015-2017 B2B Gambling 527 588 652 599 11% 241 293 322 275 16% 46% 50% 49
Slide 35: Cost of operations
C OST OF OPER ATION S Adjusted cost of operations (€m) LTM 2015A 2016A 2017A June 20181 R&D2 84 82 81 75 Operations 141 147 167 168 G&A 50 55 65 62 S&M 12 12 18 19 B2B Gambling 286 296 330 324 B2C Gambling 48 60 97 146 TradeTech 44 50 58 56 Total 378 406 485 526 % Revenue 60% 57% 60% 64% Notes: 1. L
Slide 36: Snaitech summary results
S N A IT E C H S U MMA RY R E S U LT S Revenues Adjusted EBITDA (€m) (€m) 898 890 896 Margin 14% 13% 15% 17% 632 1541 119 133 91 150 2015A 2016A 2017A LTM June 18 2015A 2016A 2017A LTM June 18 Capital expenditures2 Operating Free Cash Flow3 (€m) (€m) Conversion4 81% 82% 84% 80% 97 111 120 22 22 30 7
Slide 37: Financial outlook
FINANCIAL OUTLOOK Adjusted EBITDA Commentary (€m) • Weakness in Asia expected to impact the full year 2018 out turn 439 380-420 • The business excluding Asia is performing well c. 60 320-360 • Average B2B revenue excluding Asia grew 6% in the first 52 days of Q3 2018 compared 296 284 Snaitech to 201
Slide 38: Thank You
38 Thank You PLAYTECH 2018 38
Slide 39: Appendix
Appendix PLAYTECH 2018 39
Slide 40: Cash bridge
40 C A SH B R ID GE (€ million) 937 194 594 (100) (273) 273 545 (58) (69) 69 202 (428) Gross Cash Client funds / Capital Available cash Net proceeds Repayment of Cash used to Cash from Available cash Capital Client funds / Gross Cash June-2018 progressives adequacy and cash for from Plus500 RCF rede