Slide 1: Playtech – London Stock Exchange listing
Slide 2: Introduction and agenda
• Introduction: Roger Withers, Chairman • Financial review: Ron Hoffman, VP Finance • Review of 2012 YTD and strategy: Mor Weizer, Chief Executive • Questions and answers 2
Slide 3: H1 2012 headline results
GROSS INCOME REVENUE ADJ. EBITDA • Playtech now a Premium Listed company on the LSE 86% 101% 64% • Strong cash flow • Excellent performance of acquired businesses ADJ. NET PROFIT ADJ. BASIC EPS INTERIM DPS • Strong current trading with very confident outlook for 67% 40% 7.8 € cents year end 3
Slide 4: Financial Review
FINANCIAL REVIEW
Slide 5: Combination for Success
• Gross income up 86% to €176.5m • Adjusted EBITDA up 64% to €91.2m • Adjusted basic EPS up 40% to 29.2 € cent per share • Robust balance sheet with total assets up 99% to €769.1m • Cash from operating activities (including dividends from WHO) up 79% to €80.4m • Continues to be highly cash generativ
Slide 6: Gross income, revenue, Adj. EBITDA and net profit
200 176.5 H1-11 H2-11 H1-12 180 160 148.5 153.8 140 131.2 120 100 95.0 91.2 84.5 76.3 80 69.1 62.1 60 55.8 50.7 40 Gross income Total revenue Adj. EBITDA Adj. net profit GROSS INCOME REVENUE ADJ. EBITDA ADJ. NET PROFT 86% 101% 64% 67% 6
Slide 7: Organic growth excluding acquisitions
130 116.0 H1-11 H2-11 H1-12 120 110 104.4 Excluding all acquisitions made in the 100 94.8 93.3 presented period: IGS, Ash Gaming, 87.0 Mobenga, Geniety and PTTS 90 80 76.1 70 66.8 61.9 60 55.9 57.5 50.8 51.3 50 40 Gross income Total revenue Adj. EBITDA Adj. net profit GROSS INCOME REVENUE ADJ. EBITD
Slide 8: Gross income bridge H1 11 to H1 12
200 176.5 180 16.0 44.5 160 140 116.0 120 4.0 4.6 1.8 10.8 100 94.8 80 H1 11 Gross Existing *Other New Videobet WHO LTM GI excl. Contribution Contribution H112 Gross Income licensees Business Acq. from from income acquisitions acquisitions FY11 H112 *Other New Business defined as new licensees or ne
Slide 9: Revenue breakdown
• Casino up 36% mainly from live 80 casino, mobile, and branded Revenue breakdown games, further complemented 71.5 by incremental revenues from 70 H1-11 H2-11 H1-12 the acquisition of Ash Gaming 61.7 60 • Poker down 9% in line with 52.7 52.5 market trends 50 42.2 • Bingo up 24% mainly due to 40 orga
Slide 10: Customer concentration of top licensees
Excl. Acquisitions* H1-11 H1-12 H1-11 H1-12 Top 2 licensees 27% 41% 27% 26% Top 5 licensees 48% 61% 48% 52% Top 10 licensees 64% 73% 64% 66% Top 15 licensees 72% 79% 72% 74% Licensees > €4m revenues annually 8 11 Licensees > €1.0m revenues annually 29 37 Excluding acquisitions in the presented perio
Slide 11: Adj. EBITDA / Gross income margin
Adj. EBITDA/Gross income margin Adj. EBITDA/Gross income margin Factors affecting decrease in margin: 200 70% 180 • Acquisitions and integration of 160 58.7% 60% Adj. businesses of lower margins 140 51.7% EBITDA • Impact of entrance into regulated 120 50% Gross 100 income markets including the intro
Slide 12: Adjusted operational costs
€ in millions H1/12 H1/11 Adj. Operational Costs 85.2 38.9 Revenue-driven costs 17.6 7.3 % out of revenue 11.4% 9.5% Adjusted operating expenses excluding revenue driven costs 67.6 31.7 Employee related costs 47.0 69.6% 21.6 68.3% Administration and office costs 7.1 10.5% 4.6 14.4% Travel, exhibitio
Slide 13: Cash flow and cash conversion
• Playtech continues to be highly cash generative • Cash balance as of 30 June 2012 of €139.3m € in millions H1/12 H1/11 Cash from operating activities including WHO dividend 80.4 45.0 Cash conversion rate (from Adj. EBITDA) 88% 81% Cash used in Investing activities, excluding WHO dividend 105.2 25.
Slide 14: PTTS acquisition
PTTS acquisition Initial € in 000's Additional € in 000's Initial consideration 140,000 Additional consideration 140,000 Paid in 2011 45,000 Paid in July 42,000 Net working capital adjustment 14,800 To be paid in January 2013 35,000 Outstanding b/s on initial consideration 80,200 To be paid in July
Slide 15: Skywind social gaming licence
• Exclusive licencing deal with Skywind Holdings • Cost-effective B2B entry point into social gaming • Enables entry to a wide range of both social gaming software and real money software • Setting the foundations for future growth €6 million annual fee Exclusive B2B on both social and real Social G
Slide 16: Balance sheet highlights
Cash balance Short term borrowings ST df. & cont. consideration €139.3m €38.1m €76.3m (30 June 2011: €64.3m) (30 June 2011: Nil) (30 June 2011: €20.0m) LT df. & cont. LT borrowings Total assets consideration €71.6m €37.5m €769.1m (30 June 2011: €0.7m) (30 June 2011: Nil) (30 June 2011: €386.8m) 16
Slide 17: EPS and interim dividend
EPS Interim Basic Adj. EPS • As presented to the right, adjusted net profit increased by 67% and Adj. EPS by 40% to H1/2012 29.2 € cents per share on the increased share capital following the placing in December H1/2011 2011 H1/2010 H1/2009 DPS • Pay-out of 40% in two tranches according to H1/2008 d
Slide 18: Financial review summary
• Outstanding reported results GROSS INCOME REVENUE ADJ. EBITDA ADJ. NET PROFIT 86% 101% 64% 67% • Impressive organic growth GROSS INCOME REVENUE ADJ. EBITDA ADJ. NET PROFIT 22% 23% 20% 22% • Outstanding performance of acquired businesses CASH CONVERSION TOTAL ASSETS • Strong cash flow and balance s
Slide 19: Review & Strategic Outlook
Slide 20: IMS, portal and branded games
• IMS becomes the infrastructure of gaming activity across all products including sports • Portal - bespoke offering giving licensees control of their player interface • Continuous expansion of branded games: • Britain’s Got Talent • X Factor • Life of Brian • The Holy Grail • John Wayne • The Love
Slide 21: Poker, bingo, sports and Videobet developments
• Poker – introduction of speed poker appealing to existing and new players, introduction of a new policy • Bingo – start of mobile rollout • Sports – first Playtech licensee soft launched and will be fully launched in near future • Videobet – international deployment underway 21
Slide 22: Mobile cross-product offering
• From silos of products to a complete cross-product offering • Cross-platform capability – uses the same account for mobile and PC allowing effortless switchover between the two • Instant or download games - constant flow of entertainment focused, mobile adjusted games, including progressive slots,
Slide 23: Gala licensee
• One of the UK’s largest retails and online operators • Playtech’s IMS gaming management platform including portal is being utilised across all products available to Gala players • Full player management, player retention and back-office • Full set of products are now supported including casino, po
Slide 24: EGR awards and regulated markets
• Hat-trick of prizes won at the EGR awards • Leader of regulated markets • Playtech’s prizes include • Entry into the Spanish market • Bingo network award • Slot provider award • Entry into the Danish market • Poker network award • Mobenga awarded mobile supplier of the • Entry into LATAM through C
Slide 25: Licensee launches and new signings
• More licensees launched in the first half, including Boyles Casino, Gala Casino and Gala Bingo, 188Bet (Mobenga), SISAL (Mobenga), Tom Waterhouse (Mobenga) • New licensees signed, including Caliente in Mexico as well as additional licensees that will be announced in due course • Advanced discussio
Slide 26: Joint ventures and acquisitions
Joint ventures • Joint venture signed with Gauselmann in Jan 2012 (Germany) • Joint venture signed with Peermont in Jan 2012 (South Africa) • Further joint ventures in the pipeline Acquisitions Geneity • UK based provider of e-gaming software products, focused primarily on the sportsbook and lottery
Slide 27: WHO revenue versus industry peers
• WHO SOP of €22.7m includes exceptional 300 items relating to Spanish backdated gaming taxes of €1.6m incurred in June 2012 WHO revenue versus industry peers WHO growth • Over €110m of dividends received to date 250 (excluding software royalties) • Largest operator in the UK – 15.1% online 200 mark
Slide 28: Growth strategy
• Create a business of significant scale and a full product and service capability through organic and acquisition growth • Take advantage of newly regulated markets by targeting existing leading local land based operators in soon to be regulated markets • Leverage the cross sell opportunity through
Slide 29: Key events timeline
£100m equity placing Mobenga launch Skybet Migration work Play for fun launched Mobenga launches Sky bet Launch in regulated Denmark market Mobenga launches Italian casino/ cash WHO product Launch in poker networks Casino licence Madrid region 29
Slide 30: Key events timeline continued
Entry into Spain Gala Casino Acceleration of launch payment Caliente Agreement signed Gala Bingo launch International rollout Skywind Agreement signed 30
Slide 31: Current trading and outlook
• Strong start to the traditionally quieter third quarter • Daily average revenues up over 25% versus the comparable period and up over 20% on a like-for-like basis, in line with Q2/12 • Management remains confident in the full year outcome whilst mindful of the impact of Spanish regulatory changes
Slide 32: Summary
• Outstanding reported results GROSS INCOME REVENUE ADJ. EBITDA ADJ. NET PROFIT 86% 101% 64% 67% • Impressive organic growth GROSS INCOME REVENUE ADJ. EBITDA ADJ. NET PROFIT 22% 23% 20% 22% • Outstanding performance of acquired businesses CASH CONVERSION TOTAL ASSETS • Strong cash flow and balance s