Evoke Plc · LSE:EVOK
Evoke — 888 Holdings — H1 2023 Earnings Presentation
35 slides from Evoke's earnings presentation, Aug 15, 2023
Slide 1: H1 2023 Results Presentation
888 H1 2023 RESULTS DRE S ENTATION 15 AUGUST 2023 HOLDINGS
Slide 2: Agenda
AGENDA aa HOLDINGS, Topic Presenter Overview Lord Mendelsohn (Executive Chair) Financial review Yariv Dafna (CFO) Strategic update Vaughan Lewis (Chief Strategy Officer) Summary Lord Mendelsohn (Executive Chair) Q&A
Slide 3: Overview
1 DINGS OVERVIEW LORD MENDELSORMN, EXECUTIVE CHAIR
Slide 4: Board Priorities
BOARD PRIORITIES Our priorities are unchanged from earlier in the year, and we have delivered strong progress against all of them TEAM Appointment of strong executive directors while supporting wider management team in delivering plans in place ~~ @& e Highly experienced CEO appointed to maximise ou
Slide 5: Executing the Plan
EXECUTING THE PLAN Creating a platform for sustainable value creation, with focus turning to ere} HOLDINGS further operational efficiency to drive growth Evolving our position through bold M&A plan Reported revenue (em)! >£2bn £1,788m Retail = Offshore £1,239m Locally regulated/taxed Executing clear
Slide 6: Delivering on Our Potential
DELIVERING ON OUR POTENTIAL te}? In H1 2023 we have already delivered clear progress against our 2023 “ren focus areas of integration, execution and deleveraging % I Integration Execution Deleveraging £66m Synergy benefit in H1-23' +9% Adjusted EBITDA growth -£68m Net Debt reduction £150m Full targe
Slide 7: Financial Review
FINANCIAL REVIEW YARIV DAFNA, CFO
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS aa} Revenue down but EBITDA up as we deliver synergies and execute onour =" market focus plans, improving profitability and driving deleveraging Reported e Reported numbers reflect inclusion of William lem sts—~—<—ststséiRST-23,HT-22, YoY% H1-23 HI-22 YoY% Hill for the full H1-2
Slide 9: Reported to Pro Forma Results Bridge
rea REPORTED TO PRO FORMA RESULTS BRIDGE aad Reported results reflect William Hill acquisition. Pro forma results highlight = "°"™ improving profitability and mix shift of revenue to more sustainable base Reported to pro forma! Revenue bridge (£m) Reported to pro forma! Adjusted EBITDA bridge (£m) 1
Slide 10: H1 2023 Financial Results - Pro Forma
H1 2023 FINANCIAL RESULTS - PRO FORMA tee ; ; ; HOLDINGS Regulatory changes, market focus, and marketing approach resulting in revenue -7%, but strong synergy delivery drives Adjusted EBITDA +9% e UK Online: changing mix of the business towards lower- UK&l 615.3 634.4 spending customers, and the sho
Slide 11: Financial Focus Areas
FINANCIAL FOCUS AREAS We have clear plans to improve financial performance through realising “ren synergies, improving EBITDA margin and prioritising deleveraging SYNERGIES e HI 2023 synergies of £66m (£54m opex, £12m capex), predominantly across operations and marketing e New operating model implem
Slide 12: Cash Flow
CASH FLOW th}? £11m increase in cash, with strong underlying free cash flow conversion and "°°" non-core asset sales offsetting anticipated one-off costs H1 2023 movement in net debt (£m) 1,727.7 roe 2.0 6.6 333 1.2 (40.6) = 1,660.2 — (56.1 ns St (155.6) £76m underlying — free cash flow generation N
Slide 13: Group and Segmental Outlook
GROUP SEGMENTAL OUTLOOK Unchanged revenue and Adjusted EBITDA outlook, with strong synergy delivery and marketing timing benefitting H2 Key guidance item from FY results H1 performance ae y) rers HOLDINGS Updated outlook for H2 / FY23 Unchanged but more likely to be mid-single digit © Keio mmitel Si
Slide 14: Strategic Update
STRATEGIC UPDATE VAUGHAN LEWIS, CHIEF STRATEGY OFFICER
Slide 15: Strategic Framework
STRATEGIC FRAMEWORK saat Clear strategic focus areas as we build the platform for future success “ren Disciplined capital allocation and more streamlined and profitable business to generate strong returns Market A clear plan to create a more efficient and Integration focus effective business to real
Slide 16: UK Online
UK ONLINE tee Reshaping and improving the business mix provides sustainable, and more "°°" profitable, base to drive growth and market share over time in the UK Higher player volumes Lower spending customers Higher profitability UK Monthly average actives (000s) Revenue mix by spend band Cost per ac
Slide 17: Market Focus
MARKET FOCUS Strong performance in Italy and Spain offset by challenges in dotcom markets driven by compliance changes H1 2022 to H1 2023 revenue bridge £943m £16m £19m £om a sm «NN £8BZM -£56m 12022 UKretail UK Online Core Growth Optimise Optimise. H1-2023 regulated dotcom. e Core markets of Italy
Slide 18: Competitive Advantages
COMPETITIVE ADVANTAGES New operating model is driving improved efficiency, while also continuing yy) rors HOLDINGS to deliver on our product leadership, brand and customer excellence plans PRODUCT e Launched SI Casino in Michigan in Feb 2023 and rapidly scaled to 1% market share. Soon to launch bran
Slide 19: Summary
1 DINGS SUMMARY LORD MENDELSORMN, EXECUTIVE CHAIR
Slide 20: Summary
SUMMARY th}? Executing on clear plans to realise our potential “eu 2023 delivering on our PLAN In order to realise our 2022 POSITION POTENTIAL Transformation of a world-class customer- business to create a led organisation, with large scale business, r ‘ r high growth potential with leading position
Slide 21: Q&A
=0. DINGS Q&A PRESENTERS
Slide 22: Appendix
HOLDINGS LIX
Slide 23: 2023 Technical Guidance
2023 TECHNICAL GUIDANCE aaa Delivering our plan of integration and market focus “ren Group Cashflow e Low to mid single digit revenue decline e Capex of ~£70m, benefitting from early synergies e Adjusted EBITDA margin at least 20% e One-offs: e Cost to achieve synergies ~£60m e Other exceptional ite
Slide 24: Debt Structure
DEBT STRUCTURE the? Long-term debt structure that is hedged against FX and interest rate risk = "°"® Effective exposure Maturity profile’ Interest rates £501m £11m 2023 2024 2025 2026 2027 2028 MTLA(E) =TLB($) Fixed notes (€) =Floatingnotes (€) ™ WH Bonds (£) = Fixed = Floating =GBP =EUR USD e Effec
Slide 25: Debt Facilities
DEBT FACILITIES aa] Long-term debt structure with sufficient flexibility to support plans “ene William Hill bonds £11m £11m Fixed coupon 4.75% 475% 2026 TLB (USD) $407m GBP £323m 10.36% 10.36% 2028 Fixed notes (EUR) €582m EUR & GBP £501m 8.39% 8.39% 2027 Floating notes (EUR) €450m EUR & GBP. £388m,
Slide 26: H1 2023 Financial Results - Reported
H1 2023 FINANCIAL RESULTS - REPORTED tee On a reported basis we saw significant changes across most metrics,due = "°°" to the inclusion of William Hill results, which completed on 1 July 2022 the addition of William Hill, which was excluded entirely REVENUE 881.6 S821 from the prior year period give
Slide 27: Exceptional Items and Adjustments
EXCEPTIONAL ITEMS AND ADJUSTMENTS t}}) HOLDINGS Gibraltar related to Middle East compliance failings Retroactive duties and associated charges - -2.2 £22m of integration and transformation costs, mainly Regulatory provisions 3.0 - professional advisors and staff redundancy payments Integration and t
Slide 28: Group Total Unaudited Pro Forma
Group total ● Unaudited pro forma H1 H1 % £m 2023 2022 Change ● Average monthly actives (000s) 1,760 1,647 +7% Sportsbook stakes 2,815.3 3,181.0 -11% Sportsbook net revenue margin 12.4% 10.7% 1.8ppt Betting revenue 349.7 339.2 +3% ● Gaming revenue 531.9 604.1 -12% Total revenue 881.6 943.3 -7% ● Cos
Slide 29: UK&I Online and Retail
UK&I Online Retail Unaudited pro forma H1 H1 % H1 H1 % ● £m 2023 2022 Change 2023 2022 Change Average monthly actives (000s) 1,223 1,114 +10% ● Sportsbook stakes 1,384.9 1,632.4 -15% 846.0 841.7 +1% Sportsbook net revenue margin 9.8% 8.6% 1.3ppt 19.3% 18.0% 1.2ppt Betting revenue 136.2 139.7 -2% 163
Slide 30: International
International ● Unaudited pro forma H1 H1 % £m 2023 2022 Change ● Average monthly actives (000s) 536 533 +1% Sportsbook stakes 584.4 706.9 -17% ● Sportsbook net revenue margin 8.6% 6.7% 1.9ppt Betting revenue 50.4 47.6 +6% Gaming revenue 215.9 261.3 -17% Total revenue 266.3 308.9 -14% ● Cost of sale
Slide 31: UK&I Online Revenue Evolution
UK&l ONLINE REVENUE EVOLUTION Safer gambling and marketing changes as we improve the mix of the business to a more sustainable recreational base £255m £146m £109m Qi 2021 £252m Q2 2021 £201m £128m £73m Q3 2021 UK Online quarterly revenue £190m £183m £188m £174m €127m £116m £109m £64m £72m £66m Q4 20
Slide 32: UK Retail Revenue Evolution
ry > UK RETAIL REVENUE EVOLUTION aad Continued strong performance across a well optimised estate, with slightly "°°" fewer shops still delivering revenue growth in both betting and gaming £140m =£140m £133m £134m £131 £121m e124m —£125m_—£129m £124m m £58m £58m £57m =) £87m rt £54m fm £57m fd £54m £
Slide 33: International Online Revenue Evolution
INTERNATIONAL ONLINE REVENUE EVOLUTION Large step down in H1-23 driven by compliance changes and slower than expected recovery in the Middle East International quarterly revenue £186m £172m £159m £154m £157m £152m £151m £154m £140m £126m y £133m 131 £132 £127 £131m m £129) £128 m m m £114m £102m £39
Slide 34: Disclaimer
DISCLAIMER tee HOLDINGS Forward looking statements © This presentation may contain certain forwarc-looking statements, beliefs or opinions, with respect to the financial condition, results of operations and business of the Company. These statements, which contain the words ‘anticipate’, ‘believe’, ‘
Slide 35: corporate.888.com
HOLDINGS corporate.888.com