Inspired Entertainment, Inc. · NASDAQ:INSE
Inspired Entertainment — Merger or Acquisition (June 2019)
18 slides from Inspired Entertainment's merger presentation, Jun 12, 2019
Slide 1: Novomatic UK Gaming Technology Group Acquisition Presentation
Investor Presentation – Inspired Entertainment, Inc. (INSE) June 12, 2019 Novomatic UK Gaming Technology Group Acquisition Presentation
Slide 2: Safe Harbor / Non-GAAP Financial Disclosures
PAGE 2 Safe Harbor/ Non - GAAP Financial Disclosures Forward - Looking Statements This presentation contains “forward - looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private S ecurities Litigation Reform Act of 1995, including statements regarding the expected ef
Slide 3: Management Present
PAGE 3 Lorne Weil Executive Chairman Management Present Brooks Pierce President and Chief Operating Officer Stewart Baker EVP, Chief Financial Officer Daniel Silvers EVP, Chief Strategy Officer Lee Gregory Chief Commercial Officer, VLT
Slide 4: Larger Scale and Stronger Platform to Drive Growth
PAGE 4 Larger Scale and Stronger Platform to Drive Growth The Anticipated Opportunity Potential for Digital Transition to Drive Improved Economics Major Functional Synergies with Minimal Customer Overlap Increasing Diversification Across Customers and End Users Opportunity to Diversify Inspired’s UK
Slide 5: Transaction Summary
PAGE 5 (1) Based upon spot GBP/USD exchange rate of 1.269 as of June 10, 2019. (2) Based on US$12.8 million, mid - point of estimated run - rate synergies. DESCRIPTION ▪ Inspired Entertainment, Inc. to acquire Novomatic’s UK Gaming Technology Group (“NTG”) PURCHASE PRICE ▪ EUR equivalent of US$120 m
Slide 6: Pro-Forma Capitalization
PAGE 6 Pro - Forma Capitalization (1) Based on the mid - point of estimated run - rate synergies. Adjusted EBITDA is a non - GAAP financial measure. See “Non - GAAP Financial Measures” in Appendix. Inspired Entertainment Pro Forma Combined (unaudited) (unaudited) as of Mar 31, 2019 Adjustments as of
Slide 7: Overview of NTG
PAGE 7 The NTG business is similar to Inspired’s , encompassing the full B2B value chain of gaming machines, both in manufacturing and operations of machines. Overview of NTG Hardware and Content Development Systems and Services Operator ▪ Design and produce gaming hardware and content ▪ Developing
Slide 8: Complementary Customer Base
PAGE 8 NTG’s customer base is complementary to Inspired’s with very limited overlap. Complementary Customer Base NTG Customers Holiday Resorts Pubs Adult Gaming Centers A Number of Other Independent Arcades Motorway Services Inspired Customers Betting Shops Virtual Sports Interactive
Slide 9: Diversification Across Customers and End Users
PAGE 9 The proposed acquisition would diversify Inspired across customers and end users. Note: NTG B2B Customer Split defined by Revenue of Top 20 Customers extrapolated for External Revenues (excluding intra - NTG sale s). Diversification Across Customers and End Users B2B Customer Split – 2018A In
Slide 10: Opportunity to Leverage NTG Titles Across Existing Inspired SBG Customers
PAGE 10 Top Novomatic titles will be available on Inspired’s UK FOBT machines. Opportunity to Leverage NTG Titles Across Existing Inspired SBG Customers
Slide 11: Opportunity to Leverage NTG Content Across Existing Interactive Customers
PAGE 11 Opportunity to Leverage NTG Content Across Existing Interactive Customers Opportunity to capitalize on further converting NTG’s top performing game library for online deployment.
Slide 12: Potential for EBITDA Margin Improvement
PAGE 12 NTG’s margins are considerably lower than Inspired’s . Potential for EBITDA Margin Improvement 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% INSPIRED NTG Last Reported Twelve Months Ended (1) Calculated as NTG’s Pro Forma Adjusted EBITDA as a percent of Pro Forma Revenue. See “Non - GAAP Financial M
Slide 13: Conversion to Digital Has Improved Revenue and Margins at NTG
PAGE 13 Conversion to digital has improved revenue and margins at NTG historically. Note: Based on NTG Products ▪ Update games and software manually ▪ 1 game per machine ▪ Lower daily cash box ▪ Cash in cash box emptied manually Analog to Digital Conversion ▪ Update games and software remotely ▪ Acc
Slide 14: Larger Scale and Stronger Platform to Drive Growth
PAGE 14 Larger Scale and Stronger Platform to Drive Growth The Anticipated Opportunity Potential for Digital Transition to Drive Improved Economics Major Functional Synergies with Minimal Customer Overlap Increasing Diversification Across Customers and End Users Opportunity to Diversify Inspired’s U
Slide 15: Appendix
» «4 FF; INSPIRED Appendix
Slide 16: Non-GAAP Reconciliation: NTG Pro Forma Adjusted EBITDA
PAGE 16 Non - GAAP Reconciliation: NTG Pro Forma Adjusted EBITDA (1) The casino operations of Astra Games Limited are not included in the potential transaction. (2) Pass - through revenue and margin will not be generated following the closing of the proposed transaction. (3) Consists of £2.0 million
Slide 17: Non-GAAP Reconciliation: Inspired Adjusted EBITDA
PAGE 17 Non - GAAP Reconciliation: Inspired Adjusted EBITDA Note: For an explanation of the adjustments in this reconciliation, see ‘Management’s Discussion and Analysis of Financial Co ndi tion and Results of Operations — Non - GAAP Financial Measures’ in the Company’s most recent 10 - Q filed with
Slide 18: Non-GAAP Reconciliation: NTG Pro Forma Revenue
PAGE 18 Non - GAAP Reconciliation: NTG Pro Forma Revenue Note: We believe for NTG, US GAAP revenue is equivalent to IFRS revenue. NTG Pro Forma Revenue represents NTG’s IFRS - Reported R evenue post transaction, which excludes inter - NTG sales and parts of the business not included in the transacti
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