Inspired Entertainment, Inc. · NASDAQ:INSE

Inspired Entertainment — Investor Presentation (August 2020)

30 slides from Inspired Entertainment's investor presentation, Aug 18, 2020

  1. Slide 1: Investor Presentation August 2020

    1 INVESTOR PRESENTATION August 2020

  2. Slide 2: Safe Harbor / Non-GAAP Financial Disclosures

    2 Safe Harbor / Non - GAAP Financial Disclosures Forward - Looking Statements This presentation includes forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 . These forward - looking statements include, but are not limited to, statements regarding

  3. Slide 3: Proven and Experienced Management Team

    3 Proven and Experienced Management Team Name Lorne Weil Brooks Pierce Daniel Silvers Stewart Baker Carys Damon Position Executive Chairman President and Chief Operating Officer Executive Vice President and Chief Strategy Officer Executive Vice President and Chief Financial Officer General Counsel a

  4. Slide 4: Highlights

    4 Highlights  Operating on an EBITDA positive basis during retail closures  Aggressive cost mitigation efforts have resulted in monthly cash net payroll expenses of less than $2 million Strong liquidity position and limited “cash burn” to sustain Inspired through COVID - 19 pandemic  Encouraging

  5. Slide 5: Key Drivers in Inspired Businesses

    5 Key Drivers in Inspired Businesses

  6. Slide 6: Recent Key Highlights

    Recent Key Highlights Gaming • Entry into Illinois VLT market with 277 cabinets sold through Q2 2020 — Inspired’s first VLT sales into North America • Inspired cabinets have consistently outperformed competitors for Illinois trial customers • Awarded first Canadian VLT allotment in August 2020 – 100

  7. Slide 7: Significant Momentum in Interactive and Virtual Sports

    7 January 2020 Launched six Virtual Sports titles including V - Play Soccer, Football, Stock Car Racing and Horse Racing via bet365.com for New Jersey - based customers Signed deal with 888 to launch online casino games across full estate March 2020 Launched V - Play Basketball on bet365.com Signifi

  8. Slide 8: Reopening Has Demonstrated Business Resilience

    8 Reopening Has Demonstrated Business Resilience Recent Business Update  Inspired has been operating on an EBITDA positive basis since April 2020 due to the COVID - 19 mitigation plan and the strength of the Virtual Sports and Interactive business — Worldwide media attention and brand awareness fro

  9. Slide 9: Gaming

    GAMING  Gaming growth shifting from large casinos to many distributed venues  Inspired is a leader in server based gaming with 32,000+ machines live and top games in key jurisdictions, including UK, Greece, Italy and North America with its recent launch in Illinois  Revenue primarily generated th

  10. Slide 10: Well Positioned for North America Route Markets

    10 Well Positioned for North America Route Markets  Inspired’s Valor™ terminal commercially entered Illinois in Q4 2019 — Over 270 Valor terminals sold since launching in Q4 2019 — Nearly every major Illinois operator trialed Valor and all resulted in follow - on orders — New Illinois legislation a

  11. Slide 11: Virtuals

    VIRTUALS  Creator and world leader — Largest portfolio, including basketball, football, horse racing and soccer — Continual stream of fast - paced action, ultra - realistic player simulations and a tremendous breadth of bet types — Cross - over product between sports betting and casino gaming  Hig

  12. Slide 12: Interactive

    INTERACTIVE  Online gaming operators use our top - performing game titles and award - winning Virtual Sports content online and on mobile devices worldwide  Expected to be a high - growth, high - margin recurring revenue business — Total Online 1 Revenues doubled in 2Q 2020 year over year on a pro

  13. Slide 13: Acquired Business

    ACQUIRED BUSINESS  The Acquired Business is a leading supplier of gaming terminals to pubs, arcades, service areas and holiday resorts in the UK  Acquisition closed in a cash transaction for $120.0 million on October 1, 2019  Combines complementary and non - overlapping businesses  Providing a s

  14. Slide 14: Enlarged Business Positioned for Long-Term Growth

    14 Betting Shops 82% Online Gaming 15% Other 2% FY19A ACQUIRED BUSINESS + ACQUISITION Installed Base Gaming: ~33,000 (1) Gaming: ~19,000 / Non - Gaming: 35,000+ (2) Gaming: 50,000+ / Non - Gaming: 35,000+ (2) End - Verticals Betting Shops 4% Pubs 32% Holiday Parks 25% Online Gaming 3% Service Statio

  15. Slide 15: Leader Across Multiple Complementary Product Verticals

    15 Leader Across Multiple Complementary Product Verticals 14,000+ UK LBO Installed Base 8,400+ UK Pubs Installed Base 7,000+ UK Holiday Parks, AGCs and MSAs Installed Base #1 SBG Game in Greece by Customer Win per Day 8,900+ Greece VLT Installed Base 110 Live Virtual Customers Strong position across

  16. Slide 16: Substantial Recurring Revenue Supported by Long-Term Participation-Based Contracts

    16 Substantial Recurring Revenue Supported by Long - Term Participation - Based Contracts SBG (2) $65MM 83% Virtual Sports $33MM 91% Inspired PF FY2019 Recurring Revenue (1) $211MM 84% Inspired Large installed base Participation - driven model Immediate revenue generation once retail venues reopen R

  17. Slide 17: Long-Standing Customer Relationships

    17 Long - Standing Customer Relationships 15+ years 7 years 9 years 7 years 15+ years 15 years 9 years 11 years 11+ years 3 years 11+ years 6 years 15+ years Representative Customers Under Contract (Length of Relationship) Strong customer retention across major blue - chip lottery, sports betting, g

  18. Slide 18: Proven Track-Record of Strong Content Development

    18 Proven Track - Record of Strong Content Development Named 2019 Virtual Sports supplier of the year at ICE 2019 and by EGR 100+ Titles Deployed per Year $10 billion+ of Wagers Generated per Year Virtual Sports Gaming / Interactive Content Valor Prismatic Prismatic Community Gaming Cabinets 275+ Va

  19. Slide 19: Multiple Levers of Growth – Momentum Outside the UK

    19 $1,252 $1,453 $1,633 $1,812 $1,927 FY17A FY18A FY19A FY21E FY22E Multiple Levers of Growth – Momentum Outside the UK Greece Commentary Greece Gaming Machines Gross Win Inspired Contracted Terminals  Regulated Greek segment has been the fastest growing gaming machines segment in Europe  Inspired

  20. Slide 20: Multiple Levers of Growth – Conversion from Analog to Digital

    20 Multiple Levers of Growth – Conversion from Analog to Digital Digital machines generally attract a higher revenue per machine due to (i) increased engagement from consumers; (ii) attracti ng a wider demographic than the traditional analog machines; and (iii) multiple games per machine • Inspired

  21. Slide 21: Market Capitalization

    21 Market Capitalization Note: All figures are unaudited. Equity market cap as of market close on 7/17/20. (1) Includes revolver drawdown of $24.7m. (2) Includes accrued interest of $6.0 million. (3) Excludes any unvested management incentive share awards. Cap Table As of August 14th, 2020 (unaudite

  22. Slide 22: Appendix

    » pv * p Cal <4, oS INSPIRED ©. Appendix

  23. Slide 23: Financial Summary by Segment

    23 unaudited US$ millions Server Based Gaming Virtual Sports Acquired Business Intergroup Eliminations Corporate Total Revenue 64.0 36.6 62.1 (1.8) - 160.9 Cost of Sales, excluding D&A (22.0) (3.4) (16.0) 1.6 - (39.8) Gross Profit 42.1 33.2 46.0 (0.2) - 121.1 Selling, general and administrative expe

  24. Slide 24: Income Statement Summary

    24 Year Ended December 31st, US$ millions LTM 6/30/20A 2019A 2018A 2017A Revenue: Service 136.9 134.9 130.6 112.6 Hardware 23.9 18.4 10.1 14.3 Total revenue 160.9 153.4 140.7 126.9 Cost of sales, excluding depreciation and amortization: Cost of service (22.5) (23.5) (23.4) (17.3) Cost of hardware (1

  25. Slide 25: Non-GAAP Reconciliation: LTM Adjusted EBITDA as of 6/30/20

    25 12M Ended US$ millions 6/30/2020 Net Loss (63.1) Items Relating to Legacy Activities Pension Charges 0.7 Items to Be Considered to Be Exceptional in Nature Costs of Company Restructure 1.0 Italian Tax Related Costs 0.4 Transaction Expenses 9.5 Impairment expense 0.7 Stock-Based Compensation Expen

  26. Slide 26: Non-GAAP Reconciliation: 2019 Adjusted EBITDA Pro Forma for Acquired Business

    26 Non - GAAP Reconciliation: 2019 Adjusted EBITDA Pro Forma for Acquired Business Note: Excludes any impact from synergies. Adjusted EBITDA includes Fourth Quarter 2019 results from Acquired Business. 12M Ended US$ millions 12/31/2019 Net Loss (37.0) Pension Charges 0.6 Items to Be Considered to Be

  27. Slide 27: Non-GAAP Reconciliation: 2019 Adjusted EBITDA Pro Forma for Acquired Business

    27 Non - GAAP Reconciliation: 2019 Adjusted EBITDA Pro Forma for Acquired Business Note: Excludes any impact from synergies. Adjusted EBITDA includes Fourth Quarter 2019 results from Acquired Business. 12M Ended US$ millions 12/31/2019 Net Loss (37.0) Pension Charges 0.6 Items to Be Considered to Be

  28. Slide 28: Non-GAAP Reconciliation: Acquired Business Pro Forma Adjusted EBITDA

    28 Non - GAAP Reconciliation: Acquired Business Pro Forma Adjusted EBITDA Note: Excludes any impact from synergies. 9M Ended US$ millions 9/30/2019 Net Income 6.0 Results of Operations not Included in Proposed Transaction Astra carve-out adjustment (6.8) Pass-through margin (0.1) Items to Be Conside

  29. Slide 29: Pro Forma Reconciliation: 2019 Revenue Pro Forma for Acquired Business

    29 Pro Forma Reconciliation: 2019 Revenue Pro Forma for Acquired Business Note: Inspired Revenue 12 months ended December 31, 2019 includes Fourth Quarter 2019 results from Acquired Business. 12M Ended US$ millions 12/31/2019 Inspired Revenue 12 months ended 12/31/19 153.4 NTG Revenue 9 months ended

  30. Slide 30: Inspired – Essential Entertainment

    = INSPIRED ESSENTIAL ENTERTAINMENT

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