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Brightstar Lottery Plc Trading Under The Legal Name To Begin At The Market Open On July 21, 2025 — International Game Technology — Investor Presentation (September 2015)
46 slides from Brightstar Lottery Plc Trading Under The Legal Name To Begin At The Market Open On July 21, 2025's investor presentation, Sep 9, 2015
Slide 1: The Global Leader in Gaming
The Global Leader in Gaming September 2015
Slide 2: Agenda
2 Agenda Strategy & Market Context 1 Organizational Structure & Operating Segments 2 Financial Review 3 Outlook 4 Appendix 5
Slide 3: Comparability of results
4 All figures in this presentation are prepared under U.S. GAAP, unless noted otherwise. As a result of the combination of GTECH S.p.A. (“GTECH”) and International Game Technology (“legacy IGT”) that was completed on April 7, 2015, a number of items affect the comparability of reported results. Repo
Slide 4: Strategy & Market Context
Strategy & Market Context
Slide 5: Born from the recent merger of the world's leading lottery and gaming machine companies
6 Born from the recent merger of the world’s leading lottery and gaming machine companies Deliver end-to-end gaming solutions with cutting edge technology and innovative content Strong competitive positions across growing global market segments Lottery Gaming machines Interactive Balanced business w
Slide 6: Compelling product offering
7 Compelling product offering Lottery Comprehensive lottery solutions Operation and management Instant ticket printing iGaming Full-fledged iGaming platform, including poker, bingo, casino games and sports betting Integrated CRM solution Video Lotteries Video lottery terminals (VLT): manufacturing a
Slide 7: Steady, global gaming market growth
8 Steady, global gaming market growth (1) Gross Gaming Yield (GGY), consumer spending on gaming (amounts wagered less payout). Includes land-based + total interactive (onshore and offshore), and excludes Social Gaming. Source: GBGC 10 August 2015 354 390 395 399 409 412 429 442 457 2010-14 2014-18 C
Slide 8: Global lottery market trends
9 Global lottery market trends Global Lottery GGY by Region ($B) 2010-14 2014-18 CAGR +6% +9% +2% +4% +16% +8% +3% +3% 99 112 115 119 128 136 146 153 160 CAGR: +7% CAGR: +6% (1) Gross Gaming Yield (GGY), consumer spending on gaming (amounts wagered less payout). Includes land-based + total interacti
Slide 9: Global gaming machine market trends
10 Global gaming machine market trends Global Casino Market GGY(¹) 2010-2018 ($B) 2010-14 2014-18 CAGR +4% +6% +1% +3% +16% +0% +2% +2% 110 129 135 143 142 136 141 146 152 CAGR: +6% CAGR: +2% Global Machine Market GGY(¹) 2010-2018 ($B) 2010-14 2014-18 CAGR +1% +1% +3% -1% -9% -2% -1% +4% 90 93 90 83
Slide 10: Growth through regulation-driven product expansion
11 Growth through regulation-driven product expansion +17% CAGR 04-09 +9% CAGR 09-14 Scratch & Win concession S&W concession confirmed AWP licenses VLT licenses Additional VLT licenses Interactive licenses Sports betting & horseracing Additional sports betting licenses Key Regulatory Concessions / L
Slide 11: Italian lottery market
12 Italian lottery market Italian Lottery - Wagers (in €B) World’s largest and most developed lottery market Important source of government revenues Stable, resilient characteristics Diversified product offering supported by consistent innovation Broad distribution Source: AAMS 5.2 6.8 6.2 6.3 6.6 9
Slide 12: Strategy aligned with key market trends
13 Strategy aligned with key market trends Industry-leading technology Distinctive market strategy Content is paramount Multi-channel offering to meet player demand
Slide 13: Multi-channel offering to meet player demand
14 Multi-channel offering to meet player demand Content portability across multiple product segments and channels
Slide 14: Content is paramount
AN Content is paramount HANGOVER y es aia
Slide 15: Industry-leading technology
16 Industry-leading technology Enable all platforms to share content, player data, channels, payment tools Payment Services (owned & third parties) Verification Services Regulatory Control Systems Third parties: content, customer base, game engines Retailers Players Internet Point of Sale Venue Mobi
Slide 16: Distinctive market strategy
17 Distinctive market strategy A market approach designed to take full advantage of governments’ growing need for revenue and desire to regulate gaming activity Strong government and customer relationships, reinforced through local market presence Compelling offering across full gaming continuum, bu
Slide 17: Organizational Structure & Operating Segments
Organizational Structure & Operating Segments
Slide 18: Organizational structure and operating hubs
19 Organizational structure and operating hubs CEO Marco Sala London North America Lottery Michael Chambrello Providence Italy Fabio Cairoli Rome Human Resources & Corp. Comms Bob Vincent Providence International Walter Bugno London CFO Alberto Fornaro London, Providence Government Relations Don Swe
Slide 19: Balanced, resilient business model
20 Balanced, resilient business model $5.86 B $2.56 B Revenue by Business Segment Full Year 2014 H1’15 Operating Income by Business Segment(1) $0.61 B H1’15 $0.77 B H1’14 Note: All financial information is presented on a pro forma basis (1) Operating income before unallocated corporate expenses Nort
Slide 20: Balanced, resilient business model
21 Balanced, resilient business model Revenue by Product Category Recurring Revenue Mix $5.86 B $2.56 B Full Year 2014 H1’15 Full Year 2014 H1’15 Note: All financial information is presented on a pro forma basis Recurring: Lottery 35% Recurring: Gaming 48% Product Sales 17% Recurring: Lottery 39% Re
Slide 21: North America Gaming & Interactive
22 North America Gaming & Interactive Premier content library Leading casino presence Machines Casino management systems Social gaming pioneer (DoubleDown) #1 grossing app on Facebook Significant opportunity to reinvigorate land-based business Focused R&D investment Disciplined game and cabinet deve
Slide 22: North America Lottery
23 North America Lottery Market leader in the U.S. 79% market share in wagers(1) 38 out of 45 state lotteries served in the U.S.(2) Long-standing, deep relationships with largest lottery operators (NY, CA, and TX) Consistent same-store revenue growth Opportunity to expand instant ticket business Gro
Slide 23: International
24 International Revenue by Product Category(1) 2014 $1.04 B H1’15 $0.45 B Segment Profitability(1) ($M) Same-Store Revenue Growth Highest market growth potential across all gaming segments Substantial local market expertise Long-standing partners of leading European and Latin American lotteries Ser
Slide 24: Italy
25 Italy Dominant B2C player across entire regulated gaming spectrum 93% lottery market share based on wagers (1) #1 in VLT and AWP market with 26% and 18% share, respectively (2) Leading interactive gaming position with 15% market share (2) Strong track record of innovation in context of mature mar
Slide 25: Financial Review
Financial Review
Slide 26: Q2'15 financial highlights (pro forma)
27 Revenue Adjusted Operating Income Q2’15 financial highlights (pro forma) Adjusted EBITDA Diluted EPS $ M except EPS As adjusted results remove impact of purchase price amortization, restructuring expense and transaction expense (see appendix for details)
Slide 27: Q2'15 revenue & operating income
28 Q2’15 revenue & operating income $ M Pro Forma Revenue Pro Forma Adjusted Operating Income Strong lottery and gaming product sales Lower service revenue due to contraction in installed base and higher taxes in Italy Expected decline in intellectual property revenue Favorable comparison with Illin
Slide 28: H1'15 cash flow statement
29 H1’15 cash flow statement $ M Approximately $150 million in one-time, transaction-related items Large Illinois receivable paid in July Excludes $57 million in free cash flow from legacy IGT in the first calendar quarter of 2015 H1’15 Free Cash Flow Impacts Cash Flow H1'15 Net Cash Flows from Oper
Slide 29: Outlook
Outlook
Slide 30: Achievable synergies driving value
31 Achievable synergies driving value Industrial Efficiencies c.$85 million c. 6% Overlapping Corporate Activities c.$125 million c. 15% Optimize R&D Spend c.$20 million c. 7% Natural Revenue Enhancements Italy sales c.$50 million Cross selling Mobile exploitation Total c.$280 million Cost Revenue %
Slide 31: 2015 financial outlook
CapEx of $450-$500 million in 2015 Incremental €350 million in capital required if successful in renewing Italian Lotto concession 32 2015 financial outlook Focus on integration and achieving cost synergies, establishing strong foundation for intermediate and long-term growth 2015 pro forma adjusted
Slide 32: Culture of disciplined financial management
33 Culture of disciplined financial management Established $0.20 quarterly cash dividend Approximately $160 million annual use of cash Dividend Payments Cash flow from operations will be dedicated to: Renewal of existing contracts, including Lotto in Italy Debt repayment Dividend payments New growth
Slide 33: Key areas of focus and opportunity
34 Key areas of focus and opportunity Secure renewal of Italian Lotto Same-store revenue growth initiatives Pursue private manager agreements Grow instant ticket business Global evolution of VLTs iLottery expansion Reposition North American operations for long-term growth and market share gains Impr
Slide 34: Investment highlights
35 Investment highlights Scaled to lead the industry in all gaming market segments End-to-end lottery and gaming solutions across the value chain Cutting-edge content and technology driven by culture of innovation Resilient business model with balanced geographical and product portfolio Disciplined
Slide 35: Appendix
Appendix
Slide 36: Consolidated pro forma KPIs
37 Consolidated pro forma KPIs Global Installed Base Global Units Sold Note: Q2’15 information reflects units shipped. Prior periods reflect the combined reporting methodologies of the legacy companies: units recognized for legacy IGT and units shipped for GTECH.
Slide 37: Pro forma KPIs – Consolidated
38 Pro forma KPIs – Consolidated 2014 Actual Q1 Q2 Q3 Q4 Total Q1 Q2 GAMING Installed base (end of period) Casino 44,198 41,437 39,102 37,537 37,537 35,760 35,332 VLT - Government Sponsored (ex-Italy) 16,825 16,733 16,637 16,524 16,524 16,526 16,515 VLT - Italy Supplier (B2B) 8,136 8,202 8,378 8,392
Slide 38: Pro forma KPIs – North America
39 Pro forma KPIs – North America 2014 Actual Q1 Q2 Q3 Q4 Total Q1 Q2 GAMING Installed base (end of period) Casino 30,026 29,190 28,554 27,727 27,727 25,882 25,516 VLT - Government Sponsored 16,575 16,483 16,387 16,274 16,274 16,276 16,265 Installed base 46,601 45,673 44,941 44,001 44,001 42,158 41,
Slide 39: Pro forma KPIs - International
40 Pro forma KPIs - International 2014 Actual Q1 Q2 Q3 Q4 Total Q1 Q2 GAMING Installed base (end of period) Casino 14,172 12,247 10,548 9,810 9,810 9,878 9,816 VLT - Government Sponsored 250 250 250 250 250 250 250 Installed base 14,422 12,497 10,798 10,060 10,060 10,128 10,066 Year-over-Year growth
Slide 40: Pro forma KPIs - Italy
41 Pro forma KPIs - Italy € M except yield & machines 2014 Actual Q1 Q2 Q3 Q4 Total Q1 Q2 GAMING Installed base (end of period) VLT - Italy Supplier (B2B) 8,136 8,202 8,378 8,392 8,392 8,529 8,465 Year-over-Year growth 4.8% 3.2% Sequential quarter growth 0.8% 2.1% 0.2% 1.6% -0.8% Additional Italian
Slide 41: Q2'15 reconciliation of adjusted EBITDA
42 Q2’15 reconciliation of adjusted EBITDA $ M % Q2'15 Q2'14 Change Operating Income 116 171 -32% Depreciation 93 76 Amortization 119 37 Transaction Expense, Net 32 3 Service Revenue Amortization 27 33 Non-Cash Purchase Accounting (excluding D&A) 19 - Restructuring Expense 16 4 Stock Compensation 5
Slide 42: Q2'15 reconciliation of non-GAAP measures
43 Q2’15 reconciliation of non-GAAP measures $ M * Excludes impact of purchase price amortization * Operating Income Net Inc. Q2'15 Q2'14 Change Q2'15 As Reported 116 171 (55) (117) Pre-Tax Adjustments: Purchase Accounting 111 20 91 118 Transaction Expense, Net 32 3 29 32 Restructuring Expense 16 4
Slide 43: Debt structure as of June 30, 2015
Fixed/Variable 44 Current Debt Maturities Profile Gross Debt Breakdown USD/EUR Debt Portfolio Notes: (1) Facility A - USD Borrowings (2) Facility A & B - EUR Borrowings Average maturity of debt is 5.7 years, assuming that Hybrid is called on March 31, 2016 Debt structure as of June 30, 2015 Instrume
Slide 44: Italian market resilience
45 Italian market resilience Source: ISTAT report (March 2015). (1) Before €30 million AWP litigation settlement. Despite economic recession, Italian business has increased profitability for each of the last 3 years Personal Consumption (%) GTECH Italy (1) (1.2%) (1.8%) 1.3% 0.1% (3.8%) (2.7%) 0.3%
Slide 45: Lotto & 10eLotto wagers
46 Lotto & 10eLotto wagers Lotto wagers had been declining until 2010; the trend changed with the introduction of 10eLOTTO 10eLOTTO launch (in €B) Numero Oro LAUNCH 7.3 6.6 6.2 5.9 5.7 5.2 6.8 6.2 6.3 6.6 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LOTTO 10&LOTTO
Slide 46: Scratch & win innovation
47 Scratch & win innovation Managed by the Italian State Managed by Lottomatica/GTECH Mgnt AAMS Mgnt AAMS Mgnt AAMS Mgnt AAMS Mgnt AAMS (Wagers in €M) 573 1,454 2,074 1,164 774 465 403 174 242 226 486 1,492 3,879 7,817 9,104 9,295 9,258 10,074 9,706 9,560 9,388 1994 1995 1996 1997 1998 1999 2000 200
International Game Technology — Investor Presentation (September 2015) on 6ix