Betsson Ab Class B · OMXSTO:BETS_B
Betsson Ab Class B — Q4 2010 Earnings Presentation
46 slides from Betsson Ab Class B's earnings presentation, February 2011
Slide 1: Presentation Full Year 2010
Presentation Full Year 2010 Pontus Lindwall CEO
Slide 2: Betsson agenda
Betsson • Introduction • Financial Presentation • Product and Geographical Split • Key Performance Indicators - Sportsbook margin - Customer deposits • Legal • B2B • Events after Q4 • Q&A
Slide 3: Introduction
Betsson Introduction t "4 betsson gx
Slide 4: Betsson
Betsson • 45 years of accumulated competence • 282 employees • Listed on Nasdaq OMX Nordic, Mid Cap (BETS) • Market Cap of approximately € 500 000 000 • Betsson competes with national monopolies but also with peers, such as Unibet, Ladbrokes, Expekt, Bwin and similar
Slide 5: Betsson website sportsbook and casino
Open account! Username / Email Passi SPORTSBOOK SCRATCH CASINO LIVE CASINO ™== POKER BINGO GAMES START Chase your thri at Betsson! Ree Rook: Casino, Poker an \ SULEYMAN B. ju! a) /]\ Ge Sa > SPORTSBOOK a t Turkey - South Korea Wed 2 Live Being Raise your ) t won £9 in Safari bingo. Enjoy-the excitem
Slide 6: Casino game screen
a BALANCE (kr) TOTAL BET GAME NUMBER =f oe ——=—"EGANESNIENU™ OE OMT
Slide 7: CasinoEuro
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Slide 8: SverigeAutomaten.com
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Slide 9: Finnish casino site
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Slide 10: Cherry Casino: Promote our brands
if @® Cherry Casino Promote our brands!
Slide 11: High Growth and Profitability
High Growth and Profitability Revenue Growth EBIT-margin 2007 121% 29.3% 2008 60% 26.7% 2009 25% 24.4% 2010 23% 23.7% • High growth in combination with strong margins • Manage to ”invest during operation”, constantly investing in IT-infrastructure and partnerships while managing operations
Slide 12: Financial Presentation Q4 2010
Betsson Financial Presentation Q4 2010
Slide 13: Q4 Highlights
Q4 Highlights • Revenues increased by 26% to SEK 484.3 M (382.9) • Operating income increased by 37% to SEK 127.7 M (93.5) • Operating margin 26.4% (24.4) • Customer deposits increased by 21% Numbers in gray = Q4 2009
Slide 14: Q4 Highlights
Q4 Highlights • Operating income was negatively impacted by a net cost of SEK 2.8 (3.0) million referring to the currency translation of balance sheet items • The net effect from capitalizations and amortizations of capitalized development costs amounted to a cost of SEK 1.5 (revenue 6.1) million Nu
Slide 15: Q4 Highlights
Q4 Highlights • Gross Turnover in Sportsbook amounted to 1 894.1 M (755.3), an increase of 151% • Gross Turnover in Live betting amounted to SEK 1 144.0 M (231.9), an increase of 393% • Earnings per Share SEK 3.19 (2.29) • Cash by end of period SEK 497.1 M (529.1) Numbers in gray = Q4 2009
Slide 16: Q4 Highlights
Q4 Highlights • The quarter’s customer deposits were in excess of one billion SEK, the Group’s highest level of deposits to date for an individual quarter • Active customers increased by 4% to 300 500 (288 742) Numbers in gray = Q4 2009
Slide 17: Full year report
Full year report • Revenues increased by 23% to SEK 1 603.2 M (1 299.7) • Operating income increased to SEK 380.6 M (316.9) • Operating margin 23.7% (24.4) • Earnings per Share SEK 9.32 (7.73) Numbers in gray = Full year report 2009
Slide 18: Betsson – Shareholder value
Betsson — Shareholder value - According to dividend policy, 75 percent of profits shall be distributed to shareholders » This is equivalent to a transfer to shareholders amounting to 7.00(5.75) kronor per share - Automatic redemption process (more favourable than dividends) » The strong performance
Slide 19: Sportsbook
Sportsbook • Strategically important product • Launched in 2006, it contributes to 33% of Gross Profit with continued growth • One of the broadest product offerings on the market • New live client launched • Growing faster than industry average – 151% growth in Turnover, 393% in live betting – Stron
Slide 20: Sportsbook live betting screen
Newcastle Jets FC - North Queensland Fury 1-0 isthalf 34min Tennis Robin Haase - Pablo Cuevas 0-0 istSet Football istanbul Buyuksehir - Karsiyaka Tuesday 11:30 Konya Sekerspor - Trabzonspor ‘Tanzania - Uganda Tuesday 12:45 Konyaspor - Willem Tiburg Tuesday 13:00 MFK Kodice - Fotbal Trinec Tuesday 13
Slide 21: Revenues
M SEK Revenues 600 500 484.3 400 300 200 100 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2008 2009 2010
Slide 22: Product and geographical split
Betsson Product and geographical split
Slide 23: Gross Profit per Product
Gross Profit per Product M SEK 450 400 Growth (%) 350 300 Other + 69 (Y) +46 (Q) 250 Poker - 15 (Y) 9 (Q) 200 Sportsbook + 56 (Y) 150 + 43 (Q) 100 Casino + 16 (Y) + 24 (Q) 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010
Slide 24: Gross Profit per Product
Gross Profit per Product Casino Sportsbook Poker Other Q4 2010
Slide 25: Gross Profit per Geographical Area
Gross Profit per Geographical Area M SEK 450 400 350 Growth (%) 300 Rest of World + 100 (Y) -10 (Q) 250 EU, outside Nordic +7 (Y) 200 +37 (Q) + 89 (Y) 150 Other Europe + 54 (Q) 100 -9 (Y) Nordic Countries +8 (Q) 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010
Slide 26: Gross Profit per Geographical Area
Gross Profit per Geographical Area Nordic Countries Other Europe EU, outside Nordic region Rest of the world Q4 2010
Slide 27: Key Performance Indicators
Key Performance Indicators SB Margins Deposits
Slide 28: Growth Indicators
Growth Indicators Growth Q4 2010 Y/Y Q/Q Active Customers 4% 18% Registered Customers 49% 11% Revenues 26% 26% Customer Deposits 21% 21% Gross Turnover SB 151% 56% • The measure “Active Customers” shall be seen in a longer perspective
Slide 29: Active Customers
Active Customers 350 300 500 300 250 200 150 100 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 2009 2010 • +4% compared to Q4 2009 • +18% compared to Q3 2010
Slide 30: Registered customers
Registered customers 3 500 3 158 200 3 000 2 500 2 000 1 500 1 000 500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 2009 2010 • + 49% compared to Q4 2009 • + 11% compared to Q3 2010
Slide 31: Sportsbook Margins
Sportsbook Margins 2010 2009 2010 2010 2009 Q4 Q4 Q3 FY FY Gross Turnover SB 1894.1 755.3 1215.7 5355.7 2571.5 Gross Margin SB¹ 6.8% 10.9% 7.4% 6.9% 8.0% Gross Profit 128.2 82.0 89.5 367.7 206.6 1) Margin after direct and allocated costs
Slide 32: Live Betting Increases – Fueling Betting Turnover
Live Betting Increases – Fueling Betting Turnover Q4 2010 Q4 2009 Pre-match betting Live betting Share of Gross Turnover in Sportsbook
Slide 33: Legal
Betsson Legal t "4 betsson gx
Slide 34: Legal
Legal NAFTA Open minded Protectionistic (Time) Neglect Forbid Regulate Harmonize Not sustainable • Regulate more games More sustainable • Less protectionistic/global understanding • Sustainable tax levels • ECJ vs monopolistic arguments
Slide 35: Legal
i T T Legal Finland's gambling reforms, which came into effect on October 1 2010, it seeks to clampdown on gambling operators, which are licensed elsewhere than in Finland, by tightening the law on gambling adverts and make it a criminal offence to run the advertising of foreign gaming companies Pay
Slide 36: Legal
i Legal Continued discussions about legalising internet gaming both on federal and state level News flow from the Italian gaming authority (AAMS) last week suggests that the main operators will be able to offer online casino and poker cash games ECJ has said in several Opinions issued 8/9-10 that Ge
Slide 37: B2B
Betsson B2B betsson BUSINESS SOLUTIONS @ t "4 betsson x WHAT'S YOUR THRILL?
Slide 38: Betsson's B2B-Strategy – For Distant Markets
Betsson's B2B-Strategy – For Distant Markets
Slide 39: Strong pipeline for further development
Strong pipeline for further development
Slide 40: B2B expansion – Turkey
B2B expansion — Turkey Betsson Business Solutions has signed an agreement with Realm Entertainment of providing a complete gaming portal and the technical operation of it The gaming portal includes Sportsbook, Poker, Casino etc, and is translated into Greek, English, Dutch, Turkish, German and Spani
Slide 41: B2B expansion – Italy
B2B expansion -— Italy Betsson has signed an agreement aimed at entering into a Joint Venture together with G.Matica Srl in Italy G.Matica holds an online gaming license on the Italian market and operates online today through its site Gbet.it Italy is the largest online gaming market in Europe, with
Slide 42: B2B expansion – India
B2B expansion — India - betgson +s TOCKHOLM DECEMBER 2 RELEASE BETSSON A : Betsson has established a software development company in India which will develop software both for Betsson’s current markets in Europe as well as for new ventures in Asia Press release Betsson AB [Publ] BETSSON ESTABLISHES
Slide 43: B2B expansion – China
B2B expansion Betsson has established a business relationship with a local company in China which has set up a joint venture in the sports lottery related industry together with a Chinese state owned company Betsson has invested in Asia for more than three years since we believe that the Asian marke
Slide 44: Events after Q4
Betsson Events after Q4 t "4 betsson gx
Slide 45: Events after the fourth quarter
Events after the fourth quarter • The activity level of the various gaming solutions has been high during January with ATH in Gross Turnover in Odds and deposits • In January, the players have been successful and pay out levels in Odds have been higher than normal • There have been no other key even
Slide 46: What's your thrill?
What's your thrill? - betsson' 9x