Slide 1: Results for the Year Ended 31 December 2020
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2020 18th March 2021
Slide 2: Introduction
BRIAN MATTINGLEY, CHAIR JON MENDELSOHN, CHAIR DESIGNATE ITAI PAZNER, CEO INTRODUCTION
Slide 3: Agenda
AGENDA Itai Pazner | Introduction & 2020 Highlights Yariv Dafna | Financial Review Itai Pazner | Growth Strategy Q&A 3
Slide 4: 2020 Highlights
2020 HIGHLIGHTS Record Results ◎ Record revenues, Adjusted EBITDA and Adjusted EPS ◎ Enhanced focus on customer protection & safer gambling ◎ Market share gains in key regulated markets ◎ Product-leadership strategy accelerated ◎ Rollout of Control Centre, an industry-leading safer gambling product
Slide 5: Financial Review
YARIV DAFNA, CFO | FINANCIAL REVIEW
Slide 6: 2020 Financial Highlights
2020 FINANCIAL HIGHLIGHTS Record revenues, Adjusted EBITDA and Adjusted EPS Pro forma 2020 2019 YOY ◎ 42% growth in FTDs, supporting total revenue growth of 52% B2C 814 531 53% ◎ Adjusted EBITDA up 69% to $156m (2019: $92m) Revenue B2B 35 30 19% ◎ Adjusted EBITDA margin at 18.3% (2019: 16.4%) Total
Slide 7: Record Annual Revenue
RECORD ANNUAL REVENUE Strong growth in all product verticals, driven by product-leadership strategy Revenue 2020 vs. 2019 ◎ Casino up 63% to $587m (2019: $359m), driven by a strong product suite, content launches, AI 2019 2020 and effective marketing +52% +53% 850 ◎ Sport up 36% to $122m (2019: $90m
Slide 8: Group Revenue
GROUP REVENUE Long-term double-digit growth profile, with significant acceleration in new customers in 2020 New Customers YoY% Long-term growth in deposits 8
Slide 9: Diversified Regulated Market Leader
DIVERSIFIED REGULATED MARKET LEADER Regulated markets revenue up 58%, with strong market share gains in key regulated markets Regulated Segmentation 2015 – 2020 Revenue Mix 100% 2020 (2019) 90% ROW 27% Spain Americas 36% 33% 2% (2%) 80% 8% (11%) 11% (9%) 41% 39% 41% 42% 70% Italy 73% 10% (9%) 60% 67
Slide 10: Operational Margins
OPERATIONAL MARGINS Regulated market growth with scale benefits from operating expenses Gross Margin Contribution Margin 67.2% 66.2% 40.0% 38.3% 2019 2020 2019 2020 36 Marketing Investment % of Revenue Operating Expenses % of Revenue 27.3% 27.9% 23.5% 20.0% 2019 2020 2019 2020 10
Slide 11: Adjusted EBITDA
ADJUSTED EBITDA 69% increase reflecting high returns on marketing and operational gearing US$m 2020 2019 YOY ◎ Strong revenue growth across verticals and Line of Businesses Revenue Group revenue 850 560 52% ◎ Gross profit margin slightly lower, driven by regulated markets expansion, with Cost of Sal
Slide 12: Dividend
DIVIDEND Dividend $18c comprise of $6c interim and $12c final Dividends ($c) 2015 – 2020 25.0 19.4 20.0 18.0 15.5 15.5 15.0 12.2 15.6 12.0 10.0 11.5 12.0 8.0 6.0 5.0 3.0 6.0 3.5 3.8 4.0 4.2 3.0 0.0 2015 2016 2017 2018 2019 2020 Interim Final Total 12
Slide 13: Current Trading & Outlook
CURRENT TRADING & OUTLOOK Strong underlying momentum, driven by product and marketing excellence 2020 2021 Commentary Strong year-to-date trading, driven by continued high levels of acquisition, successful new product launches, digital consumption trend and current Revenue +52% worldwide situation.
Slide 14: Growth Strategy
ITAI PAZNER, CEO | GROWTH STRATEGY
Slide 15: Strategic Priorities
STRATEGIC PRIORITIES ◎ Safer gambling ◎ Market share gains in high-growth regulated markets ◎ Product-led differentiation ◎ Data-driven investments ◎ Build position to scale up the USA ◎ Strategically attractive M&A 15
Slide 16: Safer Gambling
SAFER GAMBLING Safer. Better. Together strategy roll-out, with 8 commitments 1 2 3 4 CULTURE OF PREVENTING HARM RAISING STANDARDS RESEARCH, RESPONSIBILITY EDUCATION AND We are committed to We are committed to We are committed to TREATMENT change within our business, identifying those potentially col
Slide 17: Market Share Gains in Regulated Markets
MARKET SHARE GAINS IN REGULATED MARKETS Product-leadership and data-driven investments driving strong returns Deposits Trend 2010 – 2020 888’s B2C Market share in key regulated markets* Market Share: 3.1% 3.9% 3.7% 4.1% 7.4% 6.9% +63% 333 204 +69% +11% 86 61 67 51 UK Italy Spain 2019 2020 17 *UK B2C
Slide 18: 888's Product Principles
888’S PRODUCT PRINCIPLES SAFETY USABILITY CONTENT-RICH ENTERTAINMENT SCALABILITY All products must make Quick, simple and Enable customers to Use AI and gamification to Build once and deploy gambling safe and fun intuitive products access the content they serve the right content to broadly to drive
Slide 19: Product Leadership: 888poker
PRODUCT LEADERSHIP: 888poker Redefining the recreational poker experience ◎ SAFETY: ◎ Easy access to the Control Centre ◎ USABILITY: ◎ Next-gen, portrait-first mobile app ◎ Placing the focus on the poker table ◎ Poker8 loads at 2x the speed of the previous app ◎ CONTENT-RICH: ◎ Easy access to sports
Slide 20: Product Leadership: 888poker
PRODUCT LEADERSHIP: 888poker Driving activity and engagement with superior products Strong FTD trends since full launch Simple interface driving multi-product play 205% 185% 165% 145% 125% 105% 85% 65% 45% 25% Sep Oct Nov Dec Jan Sep Oct Nov Dec Jan Significant improvement in registration / FTD conv
Slide 21: Product Leadership: 888sport
PRODUCT LEADERSHIP: 888sport Differentiated in-house sports platform ◎ SAFETY: ◎ Easy access to the Control Centre ◎ USABILITY: ◎ Next-gen, responsive app ◎ Quick, simple betslip ◎ Loads 30% faster than the previous app ◎ CONTENT-RICH: ◎ Growing depth and breadth of markets ◎ Easy access to gaming a
Slide 22: Product Leadership: 888sport
PRODUCT LEADERSHIP: 888sport Successful in-house migration, driving superior returns Over 70% of volume migrated to in-house Simple interface driving multi-product play Sportsbook Migration Multi-Product Players 150% 80% 70% 140% 60% 130% 50% 40% 120% 30% 110% 20% 100% 10% 0% 90% Aug Sep Oct Nov Dec
Slide 23: Data-Driven Investments
DATA-DRIVEN INVESTMENTS Superior return on investment through big data and AI B2C FTDs & Effective CPA Trend Diversified, Effective Marketing Channels (2020) 200 1,600,000 MC 8 MC 7 4% 180 1,400,000 6% MC 6 MC 1 160 1,200,000 8% 27% 140 1,000,000 MC 5 120 8% 100 800,000 80 600,000 MC 4 60 13% MC 2 4
Slide 24: Platform to Scale in US
PLATFORM TO SCALE IN US Foundations laid for rapid scaling up ◎ ACCESS: ◎ Secured access in 3 additional states, Colorado, Iowa, Indiana, taking B2C footprint to 4 ◎ B2B licence awarded in Pennsylvania, taking total potential footprint to 7 states ◎ Pipeline of additional access deals ◎ PRODUCT-LEAD
Slide 25: Summary
SUMMARY ◎ Record year for 888 ◎ Product-leadership strategy delivering strong results ◎ Data-driven investments and AI driving ongoing marketing effectiveness ◎ Well positioned to scale up in US ◎ Opportunity to leverage strong balance sheet to pursue non-organic expansion ◎ Momentum has continued i
Slide 26: Appendix
888 Appendix
Slide 27: Casino B2C Revenue
CASINO B2C REVENUE Leading growth, driven by enhanced product suite, content and AI, supported by strong acquisition Casino B2C Revenue % Casino FTD’s & Deposits Growth (2020 YoY) $m 587 ````` 359 318 282 294 234 2015 2016 2017 2018 2019 2020 27
Slide 28: Poker B2C Revenue
POKER B2C REVENUE Return to growth powered by a strong reaction to Poker8 launch and effective marketing Poker B2C Revenue % Poker Deposit & FTD’s Growth (2020 YoY) $m 87 84 78 50% 63 40% 49 43 Poker Deposit Poker FTD's 2015 2016 2017 2018 2019 2020 28
Slide 29: Sport B2C Revenue
SPORT B2C REVENUE Strong track record of growth, with in-house platform scaling up Sport B2C Revenue % Sport Stakes $m Impact of Sports Cancellations in Q2 122 90 152% 80 75 127% 100% 52 65% 35 Q1 Q2 Q3 Q4 2015 2016 2017 2018 2019 2020 2020 29
Slide 30: Bingo B2C Revenue
BINGO B2C REVENUE Increases across KPI’s, benefiting from new brands acquired during 2019 Bingo B2C Revenue % Bingo Bets & Actives Days Per Player (2020 YoY) $m 44 42 42 10% 39 38 9% 32 Bingo Bets Bingo Actives Days PP 2015 2016 2017 2018 2019 2020 30
Slide 31: Cost Structure
COST STRUCTURE Gearing effect offset partly by Gaming duties alongside Regulated market share increasing Cost Structure 2016 - 2020 82.7% 81.4% 79.8% 83.6% 81.7% 11.6% 13.9% 17.0% 13.2% 17.9% 25.9% 25.0% 23.8% 23.5% 20.0% 30.5% 27.8% 27.3% 27.3% 27.9% 14.6% 14.7% 15.4% 15.7% 15.9% 2016 2017 2018 201
Slide 32: Quarterly Group Revenue
QUARTERLY GROUP REVENUE Strong quarterly progress, led by Casino and Sport Revenue Quarterly 2019-2020 US$M 2019 2020 Vertical Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Casino 85 90 90 94 109 151 152 174 Poker 13 10 9 10 13 23 12 15 Bingo 9 11 9 10 10 11 10 11 Sport 23 22 22 23 26 19 32 46 B2C 130 133 131 137 157 204