Elys Bmg Group, Inc. · OTC:ELYS
Elys Bmg — Newgioco Group — Investor Presentation (June 2019)
28 slides from Elys Bmg's investor presentation, Jun 12, 2019
Slide 1: Investor Presentation June 2019
INVESTOR PRESENTATION JUNE 2019 OTCQB: NWGI 1 OTCQB: NWGI
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of the words "could,“ "believe," "anticipate," "intend," "estimate,
Slide 3: Positioned for Core Growth and Global Expansion
POSITIONED FOR CORE GROWTH AND GLOBAL EXPANSION ▪ Leverage track record of success from highly regulated Italian gaming market ▪ U.S. Supreme Court Decision (May 2018) Opens U.S. Market for Sports Betting ▪ Targeting U.S. Tribal Gaming market Initial focus on 17 states Agreements expected to rol
Slide 4: ELYS Betting System – Online User Experience
ELYS BETTING SYSTEM – ONLINE USER EXPERIENCE OTCQB: NWGI 4
Slide 5: ELYS Betting System – Online User Experience – Skin 1
ELYS BETTING SYSTEM – ONLINE USER EXPERIENCE – SKIN 1 OTCQB: NWGI 5
Slide 6: ELYS Betting System – Online User Experience – Skin 2
ELYS BETTING SYSTEM – ONLINE USER EXPERIENCE – SKIN 2 OTCQB: NWGI 6
Slide 7: ELYS Betting System – Land Based User Experience
ELYS BETTING SYSTEM – LAND BASED USER EXPERIENCE OTCQB: NWGI 7
Slide 8: ELYS Betting System – Land Based User Experience
ELYS BETTING SYSTEM – LAND BASED USER EXPERIENCE OTCQB: NWGI 8
Slide 9: Superior Risk Management: Innovative, Proven and Efficient Betting Platform
SUPERIOR RISK MANAGEMENT: INNOVATIVE, PROVEN AND EFFICIENT BETTING PLATFORM Improving our Handle to Revenue Conversion with Proactive Risk Management Tools Newgioco Group: Revenue Conversion (Gross Gaming Revenue as % of Handle) Unique shop-client architecture (distributed model) Legacy Platform U
Slide 10: ELYS Betting System – Risk Management – Power BI
ELYS BETTING SYSTEM – RISK MANAGEMENT – POWER BI OTCQB: NWGI 10
Slide 11: Market Overview: Legalization of the U.S. Sports Betting Market
MARKET OVERVIEW: LEGALIZATION OF THE U.S. SPORTS BETTING MARKET Sports betting legislation accelerating in the U.S. 10 States enacted online gaming bills in 2017 $320M $5.7B In May 2018, the U.S. Supreme Court ruled to allow sports betting Wagered legally on the Super Bowl Wagered illegally on
Slide 12: Market Overview: Italy Is the Largest Gaming Market in the EU
MARKET OVERVIEW: ITALY IS THE LARGEST GAMING MARKET IN THE EU Well-established business operations in the largest, most highly-regulated gaming market Total Gaming Market Size Italy Market Share GGR (€ in billions, 2017) Bet365 (Hillside Italy 20.1 PLC) 18.23% All others 25.71% United Kingdom 16.4 G
Slide 13: Driving Growth of Italian Bookmaking Operations
DRIVING GROWTH OF ITALIAN BOOKMAKING OPERATIONS Established, Rapidly Growing, Profitable Business Expanding portfolio of products in existing stores and taking market share Acquisition opportunities as consolidation in Italy market expected to continue Opening new small town shops with attract
Slide 14: Our Plans for Expansion: U.S. Tribal Markets
OUR PLANS FOR EXPANSION: U.S. TRIBAL MARKETS Leveraging our proven experience and solid technology foundation to target U.S. Tribal markets WA ND Focus on $32B Tribal market (Source: AGA) MT OR MN NY WI MI ID WY SD PA $5 Billion or more OH Targeting specific U.S. state markets NE I VA IL N WV $2
Slide 15: Competitive Landscape: Acquisitive Industry
COMPETITIVE LANDSCAPE: ACQUISITIVE INDUSTRY In the U.S. market, tribal casinos have been largely ignored in recent pairing transactions... Select Pairing Transactions in the U.S. Pairings have largely been Resort Operators and Sportsbook Providers (Access Deals) Tribal Resort Operators have not
Slide 16: Virtual Generations' Established Presence
VIRTUAL GENERATIONS’ ESTABLISHED PRESENCE Limited Geographic Overlap with Newgioco, Opportunity for Global Expansion VG’s Current Operations VG’s Offerings Albania Horse Racing Greyhounds English League Colombia Dominican Republic Honduras Italy Mexico Nicaragua Nigeria Paraguay Peru Turkey American
Slide 17: Revenue Streams
REVENUE STREAMS Handle - Q1/19 Handle - 2018 19% 18% 40% 44% Longer-Term Model 38% 41% 34% Sportsbook Casino Poker 29% Sportsbook Casino Poker GGR - Q1/19 GGR - 2018 10% 8% 15% 12% 25% 19% 77% 71% Sportsbook (Italy) Casino (Italy) Poker (Italy) SaaS Sportsbook Casino Poker Sportsbook Casino Poker OT
Slide 18: Margin Profile
MARGIN PROFILE Gross Gaming Revenue (GGR) Conversion Sportsbook 12 - 18% Casino 3 - 4% Poker 3 - 4% SaaS 25-30% Longer Term targets 15-20% margins (vs 10-15% guidance in 2019) OTCQB: NWGI 18
Slide 19: Significant Operating Leverage
SIGNIFICANT OPERATING LEVERAGE Substantial operating leverage provides significant opportunity for increasing profitability Operating expenses are either largely fixed or discretionary Increase in Handle results in blended product mix with only a modest increase in headcount and operating expens
Slide 20: Financial Overview: Track Record of Strong Operating Results
FINANCIAL OVERVIEW: TRACK RECORD OF STRONG OPERATING RESULTS Capturing just 1% of the massive U.S. market could DOUBLE REVENUE and TRIPLE EBITDA Annualized Revenue Adjusted EBITDA USD in thousands USD in thousands 2X Revenue 283% 5-YEAR CAGR 2014-2018 $34,575 3X Adjusted +200% $22,865 EBITDA $8,898
Slide 21: Valuation: NWGI Is Undervalued Compared to Peers
VALUATION: NWGI IS UNDERVALUED COMPARED TO PEERS Trading at Lower EV/Sales and EV/EBITDA Ratios Compared to Peers Price Mkt Cap LTM Rev EV/Sales EV/EBITDA P/E Ticker (Local) (US$) (US$) 2017 2018 2019 2017 2018 2019 2017 2018 2019 Newgioco Group Inc NWGI-US $ 0.45 47 35 1.7 1.3 1.0 15.7 9.4 5.2 22.5
Slide 22: Superior Risk Management: Innovative, Proven and Efficient Betting Platform
SUPERIOR RISK MANAGEMENT: INNOVATIVE, PROVEN AND EFFICIENT BETTING PLATFORM Improving our Handle to Revenue Conversion with Proactive Risk Management Tools Legacy Platform Using ELYS Risk Management Platform Robust, highly flexible, scalable Sportsbook engine Stress-tested to 200K bets / minute
Slide 23: Guidance
GUIDANCE INITIAL GUIDANCE FOR 2019: Revenue growth of 25% to 35% Operating margins in the 10 to 15% range U.S. SaaS customers by the end of 2019: 50,000 active U.S. players Handle (exclusively Italy): at least US$500M OTCQB: NWGI 23
Slide 24: Balance Sheet
BALANCE SHEET As of 3/31/2019 12/31/2018 Cash and cash equivalents $5,179,403 $6,289,903 Other current assets (combined) $1,567,824 $1,261,460 Total Current Assets $6,747,227 $7,551,363 Restricted cash $1,549,431 $1,560,539 Intangible assets (Ulisse and Multigioco acquisitions) $16,468,511 $12,583,4
Slide 25: A Clean Capital Structure
A CLEAN CAPITAL STRUCTURE Capital Structure Ownership: Tightly Held by Insiders Debt Outstanding As of March 31, 2019 Bank line of credit $825,000 Management Debentures, net of discount Retail & Insiders 10% per annum, due 2020 15% 60% Convertible at $0.40 / share Callable at $0.80/ share $4,473,994
Slide 26: Investment Highlights
INVESTMENT HIGHLIGHTS Newgioco Group is a vertically-integrated leisure gaming technology company with fully-licensed online and land-based gaming operations now expanding into the bourgeoning U.S. sports betting market using its ELYS Betting Platform Proven operations in Italy provide a solid launc
Slide 27: Contacts
Newgioco Michele Ciavarella CEO m.ciavarella@newgiocogroup.com Hayden IR – Investor Relations Brett Maas 646-536-7331 Managing Partner CONTACTS brett@haydenir.com OTCQB: NWGI 27
Slide 28: Reconciliation to Adjusted EBITDA
RECONCILIATION TO ADJUSTED EBITDA Reconciliation to Adjusted EBITDA For the 3 months ended March 31, 2019 2018 Comprehensive Income (Loss) (3,161,396) 704,159 Total other expenses 1,528,790 (556,656) Foreign currency translation adjustment 56,180 64,518 Income tax provision 261,547 245,036 EBIDTA (1