Slide 1: Introduction to Playtech
INTRODUCTION TO PLAYTECH
Slide 2: Founded 1999: Pure B2B software provider
• Founded 1999: 11 years experience in >16 year-old industry • Pure B2B software provider: content & technology platform • Over 80 ‘B2C’ licensees, broad range of backgrounds • Online sportsbooks/gaming: Titan, bet365, Betfair • Land-based: William Hill, SNAI, Casino Gran Madrid • Governmental: Serb
Slide 3: Over 1,200 staff in 6 key locations
• Over 1,200 staff in 6 key locations • 700+ software R&D team • 140+ support service team to our licensees: 24/7 • 200+ part time bingo chat moderators 3
Slide 4: Focus on B2B: revenue share model
• Focus on B2B: no conflicts/ brand marketing costs • Revenue share model: fully aligns with licensees • Comprehensive product offering, continual innovation • Deliver market-leading technology, highly scalable • Core focus on development of operator tools/content driven by licensees 4
Slide 5: Superior technology platform, cross-platform capability
• Superior technology platform, cross-platform capability • Videobet, Live, TV, open platform, integrated mobile • Industry-leading player management tools through IMS • Designed to integrate into third-party systems • Network strength: poker and bingo best-of-breed product & superior liquidity • La
Slide 6: Gross income, total revenue, adjusted EBITDA 2008-2010
€173.1 170 +26.1% 150 €142.3 €137.3 130 +24.0% €111.5 €111.5 €114.8 110 +10.0% €103.1 €93.7 90 €74.7 70 50 Gross income Total revenue Adjusted EBITDA 2008 2009 2010
Slide 7: New regulated markets and products
• 4 new regulated markets/regulated products • New markets: Estonia, Finland, France • New product: Italian bingo Q2 10, casino expected H1 2011 • Playtech launched in all new segments • Regulated market income • 46% of gross income(1) • 40% from total revenues • Expected to expand off the back of a
Slide 8: Market momentum for regulation is continuing
VB roll-out over launched launched launched signs halfway signs gaming launched acquisition terminals gets US approvals for SGR • Market momentum for regulation is continuing • Key European markets: Spain, Greece, Germany all looking at legislation • Additional markets: Denmark, Sweden, Holland, Bel
Slide 9: Targeting operators in newly-regulating markets
• Targeting operators in newly-regulating markets • Partnering with well-established operators • Proactively leveraging unique cross-platform capabilities • Scale and breadth across all products and networks • Strategic partnerships: global reach and leverage • Maintaining flexibility & opportunism
Slide 10: Expands offering from single product to full turnkey
• Expands offering from single product through to full turnkey • Turnkey attractive to new entrants seeking single supplier • Product neutral: equally valid for sports as for gaming PTTS Software Operations Marketing Risk Hosting & Payment Network Support Finance CRM Management Integration Advisory
Slide 11: Increasing demand for full turnkey solutions
• Increasing demand for full turnkey solutions in regulated markets • Positions Playtech for major opportunities in newly-regulated markets • Tenders are already underway in most markets • Licensees increasingly looking for broad range of packaged services • Need experienced help in highly competiti
Slide 12: Four divisions providing ancillary B2B services
• 4 divisions providing range of important ancillary B2B services • Marketing • Operations • Payment Advisory • Network Management • 850+ staff, principally based in Bulgaria & Philippines • All licensees use Playtech’s software • Revenues: H2 2010 annualised run rate €81.4m • EBITDA: Current run-ra
Slide 13: One of the largest affiliate networks in the industry
• One of the largest affiliate networks in the industry • 10 years experience in player acquisition & retention techniques • Product neutral: applicable to sports & all gaming products • Marketing • External: affiliate management, SEO, SEM, media buying • Internal: marketing strategy built to genera
Slide 14: Player support, hosting, finance and risk management
• Player Support • Hosting and Integration • 24/7 end user support services • Co-location hosting services for game • Multilingual support 15+ languages servers and player databases • Dedicated development/integration teams • Finance • Payment Advisory • Financial transaction monitoring • Advisory S
Slide 15: Positions Playtech for licensee wins from new market entrants
• Positions Playtech for licensee wins from major new market entrants • E.g. Germany, Spain, Greece, US • Turnkey deals deliver incremental software revenues • Software license separate to any services agreement • Potential material revenue streams at Playtech’s software margins • Revenue synergies
Slide 16: Like-for-like growth over 8%
• Like-for-like growth – over 8% • Daily average revenues first nine weeks vs. 2010 • Excluding impact of France closure • Excluding GTS & VF acquisitions • Daily average vs. Q4/10: over 1.0% ahead
Slide 17: Unrivalled product line-up and cross-platform capability
• Unrivalled product line-up and cross-platform capability • Continuing strength in licensee pipeline & revenue growth • Very well positioned for growth in regulated markets • Limited geographic concentrations in regulating markets • Turnkey solution delivers additional revenue stream • Corporate •
Slide 18: €140m minimum consideration
• €140m minimum consideration • Payments of €20-25m in 6 month intervals • No interest charge payable on outstanding balance • Implies NPV of less than €130m for initial consideration • No PTEC financing requirement expected, out of free cash flow • Total consideration capped at €280m, based on 7x F
Slide 19: Expected to be earnings enhancing immediately
• Expected to be earnings enhancing immediately • C.13% plus enhancing 2012 and beyond – before adjustment(1) and synergies • Group EBITDA margins expected to be c.50% • No disruption to current earnings and cash flow profile • Operational synergies identified and yet to be factored in • Net assets
Slide 20: Division revenues, services and clients
Division Revenues Services Clients (fee structure) € million H2 run % rate Marketing Services Affiliate management, media buying, 5 licensees including Imperial, Snai, 57.2 70 search engine optimisation and market- Mansion, Serbian Lottery (Revenue share) leading CRM capabilities: VIP mgmt Operation
Slide 21: 10 years of affiliate experience
• 10 years of affiliate experience • Access to 70,000+ affiliates • More than ten thousand active affiliates each month • Entrenched relationships with some of the world’s biggest affiliates • Global reach with more than 1m websites • Thousands of affiliates receiving ongoing commissions each month
Slide 22: Proprietary affiliate management platform
• Proprietary affiliate management platform • Flexible deal structures allowing payment and measurement according to any customer action • Advanced deal engine allowing for custom deal automation • Longstanding affiliate relationships and scale allow for more favourable deal terms with affiliates •
Slide 23: Analysing players' behaviour and loyalty programmes
• Analysing players’ behaviour according to multiple criteria – Games played, number and amount of bets placed, place of origin, personal data, source of traffic, payment methods used • Loyalty programme management and VIP scheme tailored to key players • Treated by dedicated representatives who kno
Slide 24: VIP level segmentation and promotions
• Segmentation of 7 VIP levels based on Net gaming + Net / Deposit ratio • Including bronze, silver, gold, titanium, platinum and premier • Examples of special promotions: Roulette Players Weekend: Bets race, players compete with each other, the top 10 highest bettors receive cash prizes in scale fr
Slide 25: Customised SEO strategy
• Expertise in customised SEO strategy per brand as well as third-party sites • Strong depth of keyword targeting • Leveraging affiliate relationships as well as external agencies for comprehensive approaches and localisation • Close relationship with all other acquisition channels in order to provi
Slide 26: Social marketing team and capabilities
• Experienced and dedicated social marketing team • Ability to measure effectively social marketing campaigns • Capabilities of translating high level marketing strategies into localised languages • Expertise in international and local social media platforms • Developing, launching and maintaining s