Playtech Plc · LSE:PTEC
Playtech — Investor Day (March 2023)
58 slides from Playtech's investor day presentation, Mar 23, 2023
Slide 1: B2B Investor Day
B2B investor day 23 March 2023 Sensitivity: Internal
Slide 2: B2B Investor Day
2 B2B Investor Day Sensitivity: Internal
Slide 3: Agenda
2023 B2B investor day 3 Agenda 10:30–10:50 11:45–12:10 Hard Rock Digital – partnering with Playtech Rafi Ashkenazi, Executive MD, Executive Chair of HRD Capturing the US and Canada opportunity Jonathan Doubilet MD, Playtech USA 10:50–10:55 Marcus Yoder, CCO, Playtech USA Introduction Mor Weizer, Pla
Slide 4: B2B success underpinned by Playtech's industry-leading expertise
B2B success underpinned by Playtech’s industry-leading expertise 4 Well-positioned to drive revenue growth and expand margins in the medium-term • B2B has been transformed into a higher-quality business; diversified across geographies and products • We have multiple business models that enable Playt
Slide 5: Setting medium term B2B targets
Setting medium term B2B targets Chris McGinnis, CFO Sensitivity: Internal
Slide 6: B2B medium term Adjusted EBITDA target bridge
B2B medium term Adjusted EBITDA target bridge 6 Multiple growth levers to achieve medium term EBITDA target of €200 – 250 million -40 90 -50 Headwinds 200 Stricter regulation / Growth market dynamics Other investment Live US + Canada LatAm SaaS… …amongst others Cost efficiencies 2022 B2B Medium term
Slide 7: Positioning B2B for growth
Positioning B2B for growth Shimon Akad, COO Sensitivity: Internal
Slide 8: Positioning our B2B business for growth
Positioning our B2B business for growth 8 Higher quality, increasingly diversified, more collaborative with a focus on growth • B2B business is higher quality, increasingly diversified, more collaborative than 5 years ago • B2B division is more resilient in the face of a more uncertain macroeconomic
Slide 9: The B2B business has changed
The B2B business has changed 9 A more diverse business, both regionally, by product and by customer B2B REVENUES BY REGION REVENUE BY PRODUCT NUMBER OF LICENSEES WHO Americas RoW Services Live GENERATED €4M – 10M IN REVENUE 4% 4% Platform Other content Asia Poker 2017 10 Europe ex-UK 44% Bingo 22% S
Slide 10: The B2B business has changed
The B2B business has changed 10 A higher quality business: shift to regulated markets; new business models 2017 2022 B2B REGULATED V UNREGULATED REVENUES B2B REGULATED V UNREGULATED REVENUES Unregulated Regulated 27% 44% Unregulated 56% Regulated 73% REVENUE BY BUSINESS MODEL REVENUE BY BUSINESS MOD
Slide 11: The B2B business has changed
The B2B business has changed 11 A more collaborative business – a more open ecosystem with multiple 3 rd parties 2017 2022 €22m €43m Revenue generated from platform Revenue generated from platform c.30 >100 Number of 3rd party suppliers Number of 3rd party suppliers 2023 B2B Investor Day Sensitivity
Slide 12: The path to a transformed B2B business
The path to a transformed B2B business 12 How we became an increasingly diversified, higher quality, collaborative B2B business Increasingly diversified Higher quality More collaborative • Less reliance on Asia and UK • Increased proportion of revenue Opened up content + platform from markets that a
Slide 13: Where we are going?
Where we are going? 13 In midst of a super cycle, we are the partner of choice for newly regulating markets Regulation is the key driver of growth for the gambling industry. Those countries that become newly regulated tend to see strong growth early on. However, growth typically slows down after a c
Slide 14: Where we are going?
Where we are going? 14 Why we are the go to technology partner for newly regulating markets Broadest product offering • One-stop-shop for operators inexperienced in online Strong Live offering • Access to high quality offering for fastest growing product vertical • Make the most out of the opportuni
Slide 15: Where we are going?
Where we are going? 15 Diversification of business model to capture value and increase addressable market Strategic agreements Platform SaaS • Targeted at operators inexperienced in • We have become a more collaborative • SaaS allows Playtech to serve operators online business over past 5 years as w
Slide 16: Where we are going?
Where we are going? 16 Next presentations will go outline our most exciting growth opportunities Live US + Canada LatAm Continuing to capitalise How we capture this Replicating our success on a growing market huge opportunity in other markets 2023 B2B Investor Day Sensitivity: Internal
Slide 17: B2B Investor Day
B2B INVESTOR DAY 23 March 2023 Edo Haitin, CEO, Playtech Live Sensitivity: Internal
Slide 18: Well-positioned to take advantage of growth in Live
Well-positioned to take advantage of growth in Live ▪ Live Casino represents an incredibly attractive opportunity, with industry analysts predicting the market to grow to $18 billion by 2025* ▪ Playtech is in a strong position to take advantage of this opportunity, by investing in: ▪ Building out st
Slide 19: Live market set to expand rapidly
Live market set to expand rapidly ▪ Live market size estimated to reach GGR of $18 billion by 2025* with CAGR of 28% ▪ Playtech is focused on increasing its market share by: ▪ Targeting expansion in further US states through new and existing Live studios ▪ Offering creative and bespoke solutions for
Slide 20: Innovation in consumer entertainment
Innovation in consumer entertainment Consumer trends: ▪ Audiences are increasingly spending time watching streams, as well as betting ▪ Growing popularity of experience-led games that establish communities of players interacting with each other and the host ▪ Witnessing a shift from traditional RNG
Slide 21: Expanding existing sites and new studios under construction
Expanding existing sites and new studios under construction >300 tables and >20 languages NEW JERSEY SPAIN ROMANIA Extension underway MICHIGAN SWITZERLAND LATVIA Extension underway PENNSYLVANIA NETHERLANDS Extension underway UNITED KINGDOM PERU BELGIUM London studio underway 2nd studio location bein
Slide 22: Considerable growth set to continue in years to come
Considerable growth set to continue in years to come Live Players, YoY Live Tables, YoY FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 17 M 303 Revenues 47 M 62 M 90 M 114 M 143 M 255 EBITDA 11 M 23 M 36 M 43 M 54 M 203 Margin 23% 37% 40% 38% 38% 9M 170 Wagering 22 B 27 B 37 B 55 B 65 B 131 Players 2M 3M 5
Slide 23: Playtech's competitive advantage in Live
Playtech’s competitive advantage in Live ▪ We use our insights, gained from consumer research and other sources, to build an understanding of what customers want, so that we can develop and launch suitable products ▪ Set up to cater to the anticipated spike in demand for Live as consumer attitudes t
Slide 24: Market leader across multiple regulated markets in Europe…
Market leader across multiple regulated markets in Europe… ▪ We are seeing continued success and healthy market share gains in regulated markets where we have a presence ▪ Achieved by working with leading operators in those markets and leveraging our competitive advantages and expertise ▪ Impressive
Slide 25: The US market represents huge upside
The US market represents huge upside ▪ North America represents an incremental $5.5 billion of the global Live market’s expansion from $8.5 billion to $18 billion ▪ We have laid the foundations for success in US, with the required infrastructure, headcount, as well as being primed for further expans
Slide 26: Leading the exciting LatAm market
Leading the exciting LatAm market ▪ LatAm represents another significant source of growth in the years ahead ▪ Existing market knowledge – derived from strategic agreements – positions us well to take advantage of the growing appetite for new verticals, such as Live ▪ Last year opened a new facility
Slide 27: Our content-led innovation sets us apart
Our content-led innovation sets us apart ▪ Constant investment in product innovation through utilising proprietary and third-party IP: ▪ Augmented Reality games ▪ First ever Live Game game with Virtual Sports elements under casino license ▪ Fire Blaze suite of games: Roulettes, Blackjack and Keno ▪
Slide 28: Leader in innovation entertainment
Leader in innovation entertainment Market leadership is achieved through high-end technology utilisation, localisation, innovation and variety of available products. To cement this position, we provide: ▪ Bespoke games for Tier 1 licensees ▪ Localise generic network variants : ▪ Mega Fire Blaze Roul
Slide 29: Bespoke developments to drive engagement
Bespoke developments to drive engagement ▪ Emphasis on offering bespoke developments for major licensees to help differentiate themselves from the competition ▪ Hard coded footprint of our games surfacing on site ▪ Option to adapt network games or to create completely new concepts tailored to the cl
Slide 30: Case study: Mega Fire Blaze success story
Case study: Mega Fire Blaze success story ▪ Mega Fire Blaze Roulette, a Playtech Live Casino hit, has evolved with multiple language variants to extend its success globally ▪ Fire Blaze Roulette is now considered the quality standard for dedicated roulette offers across the industry ▪ Mega Fire Blaz
Slide 31: Opening up skill-based gaming with Live Trivia
Opening up skill-based gaming with Live Trivia ▪ The only free to play Live skill game in the industry ▪ Multiple types of Live Trivia offered across all jurisdictions ▪ Fully customisable products, which can be streamed either from Playtech or client premises ▪ USP for the US market ▪ Recent World
Slide 32: Quickspin Live another source of growth
Quickspin Live another source of growth ▪ Playtech Live’s RNG arm, with a focus on premium Live games ▪ 3 Live games already planned for the next 12 months, with the Big Bad Wolf Live Slots first to launch ▪ Distribution through existing and new direct integrations, as well as strategic placement in
Slide 33: Thank You!
Thank You! B2B Investor Day, 23 March 2023 Sensitivity: Internal
Slide 34: Capturing the US and Canada opportunity
Capturing the US and Canada opportunity Jonathan Doubilet Marcus Yoder Sensitivity: Internal
Slide 35: Playtech USA: well-placed to capture the growth opportunity
Playtech USA: well-placed to capture the growth opportunity 35 • Presence established: Multiple US offices, infrastructure (Live studios), marketing and PR activity • Focus on what we know: iCasino at center of strategy and will spearhead growth • iGaming TAM of $12.8bn by 2027 up from $5.3bn in 202
Slide 36: Foundations in place for future success
Foundations in place for future success 36 • Grown headcount to over 130: • Studio staff in Michigan and New Jersey, while Pennsylvania under construction and awaiting certification • Mixture of existing Playtech colleagues and Michigan Live Studio local experts Southfield, MI NYC HQ 59 Staff New Yo
Slide 37: Growing our reputation as the partner of choice
Growing our reputation as the partner of choice 37 • Increasing visibility at awards and conferences: Presence at G2E, iGamingNext NYC, IAGA and SBC Americas • Engaging with leading media outlets: CNBC, WSJ and GGB, among others • Shaping policy and regulatory discussions through work with: AGA, AGE
Slide 38: Access to nearly two-thirds of the current iGaming market
Access to nearly two-thirds of the current iGaming market 38 • US iGaming and Sports betting market worth $6.6bn Available US iGaming & Sports GGR GGR in 2022¹, excluding in-house sports betting of 20223 $6.2bn Est. online poker revenue • Ontario adds an additional c. $1.8bn² $0.06B 1% • Playtech ha
Slide 39: US market expected to more than double from FY22 to FY27
US market expected to more than double from FY22 to FY27 39 • FY 2027 expectations: US GGR ($ billion) • iGaming in 12 states, 30 generating $12.8bn GGR (NY alone 25 expected to generate $2.8bn)¹ 20 • Sports betting in 47 states, 15 generating $14.1bn GGR online 10 • Key states to come are NY, IN, C
Slide 40: US & Canada licensing status: current & projected
US & Canada licensing status: current & projected 40 Legal Snapshot Ontario States Addtl. Total in Product Live by ’27 ‘27 Online Connecticut 6 3-6 9-12 Casino New Jersey Online 26 10 36 Maryland Sports Retail 33 13 46 Sports • Indiana & NY expected to legalize Online Casino in 2024 • 48 states expe
Slide 41: Significant progress in US & Canada since launch
Significant progress in US & Canada since launch 41 • Launched IMS Platform, RNG Casino content, Live Dealer and Sports Betting in 6 jurisdictions (including Ontario) with over a dozen brands Live & Active Licensees • Q1 2023 US launches included: • PokerStars in Michigan • SI Casino (888) in Michig
Slide 42: Market-leading content already delivering successful results
Market-leading content already delivering successful results 42 • When analysing slot wallet-share of US and Canada platform customers, 4 of the top 10 games are from Playtech • Playtech games out performing established and land-based classics: • US-focused Eilers & Kreijcik’s “February Top 25 Onlin
Slide 43: Online casino: highlights
Online casino: highlights 43 • Growing Playtech’s operator share of wallet • 100+ Playtech Games live by mid-2023 • Fireblaze games among top game providers • Bringing branded / licensed games to the US: o Rocky o The Walking Dead o Gold Rush • Capability to deliver bespoke games for our operators 2
Slide 44: Power suites: Coming to America!
Power suites: Coming to America! 44 2023 B2B Investor Day Sensitivity: Internal
Slide 45: Branded games: Coming to America!
Branded games: Coming to America! 45 2023 B2B Investor Day Sensitivity: Internal
Slide 46: Live dealer / live casino: preparing for growth
Live dealer / live casino: preparing for growth 46 • Completed Live Studios: • New Jersey • Michigan • Pennsylvania (2023) • Huge growth potential • Focused on: • Growing operator partnerships • Growth of casual players with gameshows, trivia • Capability to deliver bespoke Live games Operates Local
Slide 47: IMS/PAM is a major competitive advantage
IMS/PAM is a major competitive advantage 47 • PAM replacement cycles underway • Leveraging experience of GAN to Playtech migration for Parx • IMS Customer Engagement Center is market- leading • Customer Journeys raise lifetime value of a player • BetBuddy is the most advanced platform for responsibl
Slide 48: Strong relationships with tribal casino operators
Strong relationships with tribal casino operators 48 Tribal gaming continues to grow Indian Gaming GGR 2000 – 2021 ($ billion) 45 Tribes are shifting how they operate 40 35 • Rincon Tribe moving to all Class 2 games 30 • Class 2 revenue in Oklahoma is on par and passing Class 3 25 20 15 Playtech wor
Slide 49: Playtech USA: well-placed to capture the growth opportunity
Playtech USA: well-placed to capture the growth opportunity 49 Secured iCasino Infrastructure and Live market Land and expand established access 2023 B2B Investor Day Sensitivity: Internal
Slide 50: LatAm – replicating our success
LatAm – replicating our success Mor Weizer, CEO Sensitivity: Internal
Slide 51: LatAm – first mover advantage in an underpenetrated, attractive region
LatAm – first mover advantage in an underpenetrated, attractive region 51 LatAm: attractive demographics and regulatory trends Country Population GDP $m Brazil 213,000,000 1,600,000 Mexico 129,000,000 1,300,000 Colombia 51,000,000 314,000 Argentina 45,000,000 492,000 Peru 33,000,000 223,000 Chile 19
Slide 52: What is a structured agreement?
What is a structured agreement? 52 Utilising Playtech’s expertise in online to rapidly gain market share End customers Partner with “local Value accrued to heroes” with strong Playtech retail brand but lack online expertise Standard B2B Brand royalty income Allows operators to for technology + Licen
Slide 53: What is the revenue and profit profile of structured agreements?
What is the revenue and profit profile of structured agreements? LatAm: structured agreements at different stages of their life cycle; room for growth PROFIT • At the start of the agreement, the venture is usually loss making as funds are used for establishing an online presence such as marketing. •
Slide 54: Structured agreements to date
Structured agreements to date 54 Successful track record of material cash generation >€900m >€550m >€350m and counting… and counting… and counting… 2023 B2B Investor Day Sensitivity: Internal
Slide 55: Leveraging our early mover advantage in LatAm
Leveraging our early mover advantage in LatAm 55 We are most excited about Galerabet in Brazil and Wplay in Colombia • Strategic agreement with Caliente • Brazil is 6th most populous country in • Wplay a leading brand in Colombia has been a big success the world… • Strong growth trajectory in Colomb
Slide 56: Concluding remarks
Concluding remarks Mor Weizer, CEO Sensitivity: Internal
Slide 57: B2B success underpinned by Playtech's industry-leading expertise
B2B success underpinned by Playtech’s industry-leading expertise 57 Well-positioned to drive revenue growth and expand margins in the medium-term • B2B has been transformed into a higher-quality business; diversified across geographies and products • We have multiple business models that enable Play
Slide 58: Q&A
Q&A Sensitivity: Internal