Slide 1: Interim Results for the 6 month period September 2016 – February 2017
Stride Gaming plc Interim Results for the 6 month period September 2016 – February 2017 May 2017 Eitan Boyd, CEO Ronen Kannor, CFO
Slide 2: Agenda
Agenda H1 2017 – Overview - Eitan Boyd, CEO Financial Review - Ronen Kannor, CFO Opera8onal Review - Eitan Boyd, CEO Q&A
Slide 3: H1 2017 Overview
H1 2017 Overview • Founded in 2012 and opera8ng in regulated markets only So= gaming company with 1 • Opera8ng in the bingo-led and social gaming markets proprietary so=ware • Proprietary soCware together with non proprietary plaEorms Strong Real Money Gaming • 2 RMG NGR from proprietary plaEorm up
Slide 4: Our Vision
Our Vision “To become the global market leader in the so= gaming ver8cal of the online gaming industry” Near-Term Objec8ves • Con8nue to build scale through strong organic growth and targeted acquisi8ons • Expand presence in exis8ng ver8cals both in the UK and interna8onal regulated markets • Enter
Slide 5: H1 2017 Financial Review
H1 2017 Financial Review Ronen Kannor – CFO 5
Slide 6: H1 2017 Highlights
H1 2017 Highlights In order to show the Group’s results in the most meaningful way for all stakeholders, the financial informa8on displayed below for the prior year compara8ve is shown on a pro-forma basis to compare like-for-like the results as if the acquisi8on of 8ball, Netboost Media and Tarco as
Slide 7: Income Statement
Income Statement In order to show the Group’s results in the most meaningful way for all stakeholders, the financial informa8on displayed below for the prior year compara8ve is shown on a pro-forma basis to compare like-for-like the results as if the acquisi8on of 8ball, Netboost Media and Tarco asse
Slide 8: Income Statement
Income Statement In order to show the Group’s results in the most meaningful way for all stakeholders, the financial informa8on displayed below for the prior year compara8ve is shown on a pro-forma basis to compare like-for-like the results as if the acquisi8on of 8ball, Netboost Media and Tarco asse
Slide 9: Revenue
Revenue Group NGR - up 21% to £44.0 million (Pro-forma 2016: £36.5 million and reported £21.6 million) • Real Money Gaming • NGR from proprietary plamorm up 55% to £23.8 million (2016: £15.4 million) • NGR from non proprietary plamorm up 4% to £15.4 million (2016: pro-forma: £14.9 million) • Signific
Slide 10: Cost Structure
Cost Structure • Adjusted EBITDA margins remain solid and reflec8ng 22.0% of NGR (2016: Pro-forma 22%) • Cost reduc8on: • Distribu8on costs - synergies gained as the result of the group scale by reducing processing fees game royal8e , 3rd party plaEorm fees and growth of the proprietary brands with l
Slide 11: Cash Flow
Cash Flow Stride Gaming Plc Highlights: High cash conversa8on £’000 Unaudited Unaudited Pro-Forma Net movement of acquired working H117 H116 capital (8ball/Tarco) at 31.8.2016 Cash generated from opera8ons 4,228 4,503 affected the cash from opera8ons. Cash conversion 86% 75% Intangibles and equipment
Slide 12: Balance Sheet
Balance Sheet Stride Gaming Plc Unaudited Audited Solid working capital posi8on 28-Feb-17 31-Aug-16 £'000 £'000 Non- Current assets Cash posi8on Property plant and equipment 648 662 • Strong gross cash posi8on of £19m with player Intangible assets 61,011 73,566 Other receivables 3,360 3,416 liabilit
Slide 13: Trading Key Data
Trading Key Data Founders Share Holdings Ins8tu8onal Share Holdings 3.0% 5.3% Credo Capital 6% 30.2% 24.4% Swisspartners Wealth Management AG 3% Heritage Asset Management 3% J O Hambro Capital Management 2% 37.0% Miton Asset Management Limited 2% Hargreave Hale 2% AXA Investment Managers UK 2% Free
Slide 14: H1 2017 Operational Review
H1 2017 Opera8onal Review Eitan Boyd - CEO 14
Slide 15: H1 2017 Group Level
H1 2017 Group Level • Net Gaming Revenue is up 21% to £44m • Real Money Gaming revenue is up 30% to £39.3m § Proprietary PlaEorm up 55% to £23.8m RMG Revenue § Non Proprietary PlaEorm up 4% to £15.5m • Social Gaming revenue is down 24% to £4.7m 39% 61% • Adjusted EBITDA up 20% to £9.6m • Real Money
Slide 16: Real Money Gaming
Real Money Gaming • RMG represents 89% of Group NGR Funded players • Trading in RMG has performed strongly (up 30% in H1 2017) 180,000 162,000 and this is as a result of our proprietary plaEorm, the 160,000 134,000 140,000 strength of our brands and strong ROI on marke8ng spend 120,000 100,000 • Num
Slide 17: Integration of Acquisitions
Integra8on of Acquisi8ons • Acquired 8Ball, Netboost Media and the Tarco Assets in Aug 2016 Tarco Assets LTV • Transformed the Group: 60% 50% • Market share of the UK bingo market increased from 5% to 40% above 10% in 2016 (es8mated to be c.13% in 2017) 30% 20% • Became the fourth largest online bin
Slide 18: Stride Together B2B Vertical
Stride Together B2B Ver8cal • Launch of Stride Together our B2B ver8cal (post period) • Licensing our proprietary plaEorm to gaming operators, media partners and retailers in the UK and globally • This enables us and our partners to enter the Omni channel gaming space • Allows diversifica8on of our g
Slide 19: Social Gaming
Social Gaming • SoG represents 11% of Group NGR and 9% of Group EBITDA SoG CPI (USD) • The Social Casino market is expected to reach US$4.63bn by 2020, 3 2.5 implying a 4-year CAGR of 5% 1 2 1.5 • The top-3 three companies in 2016 accounted for 42% of the total 1 social casino game market, while the
Slide 20: Social Gaming
Social Gaming H1 2017 Revenues • H1 2017 revenues decreased 24% to £4.7m (H1 2016:£6.2m) mainly due to the following: • 40% decrease in FTDs to 17k (H1 2016:29k) as a result of lower marke8ng spend and increase in CPI levels • Average daily revenue per paying user (ARPPU) down 25% to $26 (H1 2016:$3
Slide 21: Growth Strategy
Growth Strategy “To maximise shareholder value by achieving growth through organic and acquisi8ve means. We aim to deliver organic growth by enhancing our proprietary plamorms, systems and knowledge and undertake strategic acquisi8ons that will allow the company to enter new ver8cals and / or provid
Slide 22: Organic Growth Drivers
Organic Growth Drivers • Engagement Engagement Mone8sa8on • User experience; create high level of s8ckiness • Rich and engaging communica8on Marke8ng • Loyalty and compe88ons • Mone8sa8on Life8me Value Maximisa8on • Increase spend amount (LTV = Mone8sa8on*Engagement) • KPIs (avg deposits, LTV) High
Slide 23: Organic Growth Our Fundamentals
Organic Growth Our Fundamentals • Support mul8 brands • New exci8ng games • Claim code, opt-in & messaging box func8onality , compe88on engine , side jackpots, lucky numbers, variety of promo8ons Content • Innova8ve products • Data driven organisa8on • Analysis driven marke8ng & mone8sa8on ;cross se
Slide 24: Why Stride Gaming?
Why Stride Gaming? Opera8ng in a so= gaming market with in house proprietary so=ware Highly profitable with New high-quality strong organic growth revenue from the B2B ver8cal 4th largest bingo Dividend paying operator in the UK Look for further arrac8ve , complementary and revenue enhancing acquisi8
Slide 25: Contact Us
Contact Us Stride Gaming PLC Unit 450 Highgate Studios 53-79 Highgate Road London NW5 1TL Phone: 0207 284 6080 Email: IR@stridegaming.com
Slide 26: Appendices
and in the world of online bingo Appendices
Slide 27: Bingo Market Share
Bingo Market Share Stride’s UK online bingo market share has increased from 5% to 10% post acquisi8ons of 8Ball, Netboost Media and the Tarco Assets in 2016 RMG Bingo UK (2016E) Pre-Acquisi8ons(*) RMG Bingo UK (2016E) Post-Acquisi8ons(*) • UK total online gaming market set to pass £3bn by 2016 with
Slide 28: Corporate Structure
veterans and pioneers __ in the world of online bingo | 100% 100% 100% 100% 100% 100% 100% | 100% gaming
Slide 29: Our Business Model
Our Business Model • Customer acquisi8on and reten8on • Focus on genera8ng new players and retaining exis8ng players • Acrac8ng players through online & offline marke8ng techniques • Par8cularly targeted at the female demographic • Financial model: • Profitability is derived from the Life Time Value (L
Slide 30: Experienced Board
Experienced Board Eitan Boyd Darren Sims Ronen Kannor Chief Execu8ve Officer Chief Opera8ng Officer Chief Financial Officer • CEO since 2006 • Managing Director since 2009 • Joined the group in 2014 • Over 17 years’ experience in • Over 13 years’ experience in Online • Over 12 years’ experience in Finance
Slide 31: Disclaimer
Disclaimer The informa8on contained in this confiden8al document (“Presenta8on”) has been prepared by Stride Gaming PLC (the “Company”). It has not been fully verified and is subject to material upda8ng, revision and further amendment. This Presenta8on has not been approved by an authorised person in