Playtech Plc · LSE:PTEC
Playtech — H1 2009 Earnings Presentation
32 slides from Playtech's earnings presentation, Sep 3, 2009
Slide 1: Interim Results Six months ending June 2009
Interim Results Six months ending June 2009 3 September 2009
Slide 2: Introduction – Roger Withers, Chairman
Introduction – Roger Withers, Chairman Core business performing strongly Solid financial performance in challenging markets Good progress in organic and non organic growth Continued progress in WHO integration Results demonstrate strength of the diversified PTEC business model and strategy Trading i
Slide 3: Financial highlights – Shuki Barak, CFO
Financial highlights – Shuki Barak, CFO Gross Income- €66.9m, 30% increase (H1 2008: €51.6m) Total revenues - €56.7m, 10% increase (H1 2008: €51.6m) Casino Revenues - €37.6m, 2% increase (H1 2008: €36.8m) Poker Revenues - €17.3m, 24% increase (H1 2008: €13.9m) Income from associate - €10.3m, (H1 200
Slide 4: Financial highlights – Shuki Barak, CFO
Financial highlights – Shuki Barak, CFO Adjusted EBITDA – €45.3m, 33% increase (H1 2008: €34m) Adjusted EBITDA margin – 80% (H1 2008: 66%) Adjusted Net profit – €43m, 19% increase (H1 2008: €36.2m) Adjusted Net profit margin – 76% (H1 2008: 70%) Adjusted EPS– €18 cents per share (H1 2008: €16.7 cent
Slide 5: Gross income, adjusted EBITDA and adjusted net profit (€ millions)
Gross income, adjusted EBITDA and adjusted net profit (€ millions) 70.0 66.9 65.0 59.9 60.0 55.0 51.6 50.0 45.3 45.0 42.4 43.0 40.7 40.0 36.2 35.0 34.0 30.0 25.0 20.0 Gross income Adjusted EBITDA Adjusted net profit H1-08 H2-08 H1-09
Slide 6: Change in Accounting Presentation
Change in Accounting Presentation Following recent accounting guidance on IFRS3 revised, PTEC is now recording 100% of its licence fees received from WHO in the top line. Provides better clarity Income from associate being shown separately in the income statement. Gross Income remains un-changed Old
Slide 7: Change in Accounting Presentation
Change in Accounting Presentation Following recent accounting guidance on IFRS3 revised, PT is now recording 100% of its licence fees received from WHO in the top line. Provides better clarity Income from associate being shown separately in the income statement. Gross Income remains un-changed Old A
Slide 8: Change in Accounting Presentation
Change in Accounting Presentation Following recent accounting guidance on IFRS3 revised, PT is now recording 100% of its licence fees received from WHO in the top line. Provides better clarity Income from associate being shown separately in the income statement. Gross Income remains un-changed Old A
Slide 9: Gross Income by Product
Gross Income by Product (€ millions) H1-09 vs. H1-08: Excluding 80.0 WHO/former €66.9 customer, growth 70.0 of 16.7% €59.9 60.0 €51.6 50.0 WHO Share of profit €37.8 40.0 Other 30.0 €27.9 Poker Casino 20.0 10.0 - H1-07 H2-07 H1-08 H2-08 H1-09
Slide 10: WHO Transaction
WHO Transaction William Playtech Hill Purchased 29% 71% WH on line Assets business WHO
Slide 11: WHO Transaction
WHO Transaction Purchased Assets include the assets of PTEC’s former licensee Casino and poker operations of WHO enjoys a preferred royalty rate PTEC got in return: Enlarged combined casino and poker operations Share of profit
Slide 12: WH-PTEC Reconciliation
WH-PTEC Reconciliation Online segment operating profit £ 21.0 (as reported in note 2 to the consolidated financial statements of William Hill PLC) Amortisation of intangibles recorded in WH PLC £ 2.8 Exceptional operating expenses recorded in WH PLC £ 7.6 EBIT of William Hill Online £ 31.4 Tax -£ 2.
Slide 13: Distribution costs breakdown
Distribution costs breakdown (excluding ESOP charges) 25.0 €20.3 20.0 0.8 €17.8 1.1 1.0 1.4 €15.7 0.8 Travelling 1.7 1.0 15.0 1.7 1.9 Exhibitions & marketing activities 1.2 1.6 1.2 0.3 Resellers & game patents 1.3 3.2 3.8 Office costs 10.0 1.6 Other operational costs 2.7 Depreciation & Amortization
Slide 14: Cash flow
Cash flow PTEC continues to be highly cash generative Average debtor days unchanged at 30 days Cash from operation including cash received from WHO – €37.4m Conversion from adjusted EBITDA – 83% Cash used in financing activities including final dividend paid on behalf 2008 – €15.9m
Slide 15: Balance sheet
Balance sheet Robust balance sheet with no debt Cash balance of €48.7m Investment in WH Online: Total investment as of 30 June 2009 - €175.6m Deferred consideration of €13.6m, to be paid in December 2010
Slide 16: Our strategy – Mor Weizer, CEO
Our strategy – Mor Weizer, CEO Revenue growth in licensees New licensees New products/content New regulated markets William Hill Online Bolt-on acquisitions
Slide 17: Our strategy
Our strategy Revenue growth in licensees New licensees New products/content New regulated markets
Slide 18: Revenue growth in licencees
Revenue growth in licencees Core business performing strongly Solid portfolio of major players in the online gaming industry Diversified portfolio of licensees, products and markets Best of breed products allow our operators to outperform other operators in the market New well established licensees
Slide 19: Organic growth H1-09 vs. H1-08
Organic growth H1-09 vs. H1-08 Total revenues +9.8% Total revenues excluding WHO/former customer +16.7% Existing New licensees licensees +4.2% +12.5%
Slide 20: New licencees
New licencees Major licensees gained during the first half New agreement with Olympic Entertainment Group, leading gaming operator in eastern and central Europe - signed following the H1 period end Number of additional MOUs signed, primarily in regulated markets Strong pipeline of prospective licens
Slide 21: New products
New products iPoker – still the world’s largest poker network Launch of increased number of games including the launch of the first branded slot to become the most popular slot game in the games portfolio Launch of revamped Bingo product – the second phase with a new version expected Extended offeri
Slide 22: New Regulated Markets
New Regulated Markets Regulatory changes in various markets redefining the online gaming industry UK – Betfair and Netplay Italy – 3rd largest poker network Serbia – Serbian Lottery Spain – Casino Gran Madrid France – Chilipoker Estonia – Olympic Strong pipeline of new licensees with MOUs secured in
Slide 23: Italy – Case study
Italy – Case study Five licensees in Italy include: SNAI, SISAL, Eurobet, Cogetech and Gamenet Latest addition announced in H1 and launched mid-August: Gamenet Further strong pipeline of new prospective licensees Now 3rd largest network with over 15%* market share Annualised overall market turnover
Slide 24: Our strategy: William Hill Online
Our strategy William Hill Online
Slide 25: William Hill Online
William Hill Online Transaction completed on 30th December 2008 Complex integration due to different physical locations and challenging markets conditions Key parts of the integration are now completed Progress now satisfactory, with good player acquisition – increase of more than 30% Confident that
Slide 26: Our strategy: Bolt-on acquisitions
Our strategy Bolt-on acquisitions
Slide 27: Acquisitions: Strategy
Acquisitions: Strategy Software providers of similar products Migration of existing licensee base to the Playtech platforms Cross selling of different products to migrated licensees Software providers of complimentary products Cross selling of new products to existing licensees Attracting new licens
Slide 28: Outlook
Outlook Revenues excluding WHO in July and August increased by 1.4% over the comparable months in 2008 New licensee – Gamenet - launched in Italy New licensees including Betfair, Netplay and the Serbian lottery expected to launch towards the end of the year – expecting significant contribution in 20
Slide 29: Questions and Answers
Questions and Answers @@ GOGO SOOHO GEGHOGOSOOWHO
Slide 30: Appendix
Appendix @@ GOGO SOOHO GEGHOGOSOOWHO
Slide 31: Income statement Summary
H1 2009 €’000 H1 2008 €’000 Revenues 56,654 51,588 Operating expenses (29,093) (30,801) Income Operating profit 27,561 20,787 statement Finance income, net 226 3,246 Summary Share of profit of associates 10,286 - Amortization of investment in WHO (5,257) - Tax (429) (481) Profit for the period 32,38
Slide 32: Revenues by product H1 2009
Revenues by product H1 2009 3% Casino 30% Poker 66% Other