Slide 1: Full year results 2016
Full year results 2016 23 February 2017
Slide 2: Agenda
AGENDA Gaming division, Highlights Financial review Financials division strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer Financials Division CEO Group CEO Full year results 2016 2
Slide 3: Executing on Strategy
EXECUTING ON STRATEGY S T R O N G F I N A N C I A L P E R F O R M A N C E , S T R AT E G I C M & A A N D C A P I T A L R E T U R N E D Continued strong growth in the Gaming division with important renewals Gaming M&A delivered in 2016 including BGT, Quickspin and ECM; Eyecon in 2017 Encouragin
Slide 4: Agenda
AGENDA Gaming division, Highlights Financial review Financials division strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer Financials Division CEO Group CEO Full year results 2016 4
Slide 5: Results Summary
RESULTS SUMMARY S T R O N G R E V E N U E A N D E B I T D A G R O W T H ; N E T P R O F I T I M PA C T E D B Y F X 750 708.6 2015 2016 600 630.1 € Millions 450 300 302.2 251.9 150 205.9 206.2 0 Total revenue Adj. EBITDA Adj. Net Profit* +12% +20% Flat *Adj. Net Profit does not include £75m from Ladb
Slide 6: Results Summary at Constant Currency
RESULTS SUMMARY AT CONSTANT CURRENCY VERY STRONG PERFORMANCE 750 754.2 2015 2016 600 630.1 € Millions 450 300 331.6 278.3 251.9 150 195.3 0 Total revenue Adj. EBITDA Adj. Net Profit Incl. acquisitions +20% +32% +42% Excl. acquisitions +13% +28% +48% Full year results 2016 6
Slide 7: New Presentation of Verticals in 2017
NEW PRESENTATION OF VERTICALS IN 2017 Old presentation New presentation Change 2015 2016 CC % 2015 2016 CC% 2016 €m Casino 308.7 354.6 23% 328.8 374.1 22% 19.5 Services 155.6 151.6 4% 155.6 151.6 4% - Sport 32.2 30.9 2% 34.5 58.4 82% 27.5 Land-based 29.8 57.1 108% -57.1 Bingo 20.5 17.8 -1% 20.5 19.8
Slide 8: Margin Analysis
MARGIN ANALYSIS M AT E R I A L M A R G I N I M P R O V E M E N T 2015 2016 Revenue Adj. EBITDA Margin Revenue Adj. EBITDA Margin Gaming 570.1 236.0 41% 643.0 286.9 45% Reported Financials* 60.0 15.9 26% 65.6 15.4 23% Group 630.1 251.9 40% 708.6 302.2 43% CC Group 630.1 251.9 40% 754.2 331.6 44% * 20
Slide 9: Cost Analysis
COST ANALYSIS STRONG COST CONTROL €m 2015 2016 Adj. operating costs 378.2 406.3 Revenue-driven costs 36.0 6% 52.0 7% Adj. operational costs excluding revenue-driven costs 342.2 354.3 Employee-related costs 181.7 53% 190.0 53% Cost of services 48.3 14% 51.1 14% Operational marketing costs 45.8 13% 41
Slide 10: Net Profit and EPS
NET PROFIT AND EPS B E L O W T H E L I N E I T E M S I M PA C T E D B Y F X A N D F I N A N C I N G Adjusted net profit flat as reported but up 42% at constant currency growth in reported EBITDA offset by impact from exchange rate differences consideration from Ladbrokes merger not included in
Slide 11: Cashflows
CASHFLOWS S T R O N G , G R O W I N G A N D S U S TA I N A B L E C A S H F L O W S Net cash from operations up 25% at €251.4m (2015: €200.8m) Improved cash conversion of 94% (2015: 80%) from adjusted EBITDA (when adjusted for jackpots, security deposits and client equity) Strength and sustaina
Slide 12: Balance Sheet
BALANCE SHEET SIGNIFICANT FLEXIBILITY €392m of gross cash at the end of 2016 (Dec 2015: €751m) when further adjusted for jackpots, security deposits and client funds gross cash of €545m at the end of 2016 (Dec 2015: €858m) €469m when adjusted for CFH client accounts In addition, €230.3m of a
Slide 13: Cash Flow Bridge
CASH FLOW BRIDGE 750 150 600 751 50 € Millions 96 450 217 300 285 87 392 150 45 0 2015 Adjusted Specical dividend Share buyback Ordinary Acquisitions less Capex and Exchange rate Net cash provided 2016 Adjusted gross cash* dividends net cash acquired capitalised R&D movements by operating gross cash
Slide 14: Agenda
AGENDA Gaming division, Highlights Financial review Financials division strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer Financials Division CEO Group CEO Full year results 2016 14
Slide 15: Financials Division
FINANCIALS DIVISION SIGNIFICANT IMPROVEMENT IN THE SECOND HALF OF 2016 Actual 2016 vs 2015 (incl. CFH) Commentary €m 2015 2016 Chg Full year results reflect the business transition and improvements made to the business in H1 Revenue 60.0 65.6 9% 2016 Adj. EBITDA 15.9 15.4 -5% Margin 27% 23% H2 2
Slide 16: Financials Division: Encouraging KPIs in H2
FINANCIALS DIVISION ENCOURAGING KPIs IN H2 CFDs - Actives CFDs – First Time Depositors ‘000s H1 16 H2 16 Chg ‘000s H1 16 H2 16 Chg B2C – markets.com 15.7 16.7 7% B2C – markets.com 5.4 8.6 58% B2B 13.0 14.7 12% B2B 7.7 9.6 24% Total 28.7 31.4 10% Total 13.1 18.1 37% Full year results 2016 16
Slide 17: CFH Acquisition
CFH ACQUISITION TECHNOLOGY & LIQUIDITY Full year results 2016 17
Slide 18: CFH Acquisition: Technology & Liquidity
CFH ACQUISITION TECHNOLOGY & LIQUIDITY € Optimised $ price and execution offering Local Retail Client Local Retail broker Tier 1 Banks/ Prime Brokers and LPs Full year results 2016 18
Slide 19: CFH Acquisition: Significant Growth Opportunity
CFH ACQUISITION SIGNIFICANT GROWTH OPPORTUNITY • One of the top interbank STP venues in the world, considered one of the most reputable providers of technology and clearing in the industry • Over 250 monthly active customers in more than 80 countries, servicing thousands of retail end customers worl
Slide 20: Regulatory Landscape
REGULATORY LANDSCAPE L E V E L L I N G P L AY I N G F I E L D • Recent regulatory changes introduced by CySEC, followed by a consultation paper introduced by the FCA in response to the ESMA Q&A paper in Q4 last year • Two main changes introduced by CySEC reflecting the change in atmosphere and regul
Slide 21: Marketing Markets.com
MARKETING MARKETS.COM FOCUS ON QUALITY AND DIFFERENTIATION Full year results 2016 21
Slide 22: Value to Traders
VALUE TO TRADERS F O C U S O N R E L E VA N T C O N T E N T Full year results 2016 22
Slide 23: Outlook for the Financials Division
OUTLOOK FOR THE FINANCIALS DIVISION WELL POSITIONED FOR GROWTH IN BOTH B2B AND B2C New regulations introduced represent an opportunity for our B2C business to capture more of the market share Foundations established to capture future growth for our B2C business customer acquisition through aut
Slide 24: Agenda
AGENDA Gaming division, Highlights Financial review Financials division strategy and outlook Alan Jackson Andrew Smith Ron Hoffman Mor Weizer Chairman Chief Financial Officer Financials Division CEO Group CEO Full year results 2016 24
Slide 25: Executing on Strategy
EXECUTING ON STRATEGY S T R O N G O P E R AT I O N A L & F I N A N C I A L P E R F O R M A N C E , M & A A N D R E T U R N S Operational delivery M&A Customer wins Contract renewals New content and features Financial delivery Shareholder returns Growth in revenue and profit Progressive ord
Slide 26: Key Drivers of Gaming Performance
KEY DRIVERS OF GAMING PERFORMANCE U N D E R LY I N G G R O W T H O F 1 8 % Casino continues to drive Gaming with strong H2 Sports performance following acquisition of BGT Both existing and new business contributing to growth Regulated Gaming revenues of 42% in 2016 (2015: 41%) H2 regulated r
Slide 27: Gaming Mobile Penetration
GAMING MOBILE PENETRATION I NCREASE F RO M 21% TO 33% O F SO F T WARE REVENUES I N 2016 PRODUCT VERTICAL 2015 (€M) 2016 (€M) GROWTH % Casino 48.3 111.2 130% Sports 26.5 25.2 -5% Bingo 4.1 5.3 28% Poker 0.4 0.8 89% Total 79.4 142.5 80% Full year results 2016 27
Slide 28: Locking-in Future Growth
“LOCKING -IN” FUTURE GROWTH LAUNCHES, SI G NI NG S AND RENEWALS Significant renewals William Hill Group, Paddy Power Betfair, Betfred and Rank all renewed in 2017 9 out of top 10 licensees now on long-term contracts Launched 10 new licensees including Win2day, Maxbet, Sun Bingo, Pokerstars a
Slide 29: Locking-in Future Growth: New and Improved Products
“LOCKING -IN” FUTURE GROWTH NEW AND IMPROVED PRODUCTS AND CONTENT Improvements to Live Casino new studios in Latvia (the world’s largest next generation live casino) and Romania augmented reality to enhance player experience Other new and improved products “anonymous cash-out” functionalit
Slide 30: OPAP
OPAP A L A N D M A R K A G R E E M E N T F O R S S B Ts A N D O T C Significant milestone for Playtech BGT Sports Approximately 5,000 shops SSBTs and OTC Fully managed service including 25,000 in-play markets Potential for expansion of relationship Full year results 2016 30
Slide 31: An Excellent Year for M&A
AN EXCELLENT YEAR FOR M&A €240M SPENT ON ACQUISITIONS IN 2016 Full year results 2016 31
Slide 32: Eyecon
EYECON F U R T H E R S T R E N G T H E N I N G P L AY T E C H ’ S P O S I T I O N I N B I N G O Specialist software supplier with Bingo and softer slots focus Distribution through internally- developed RGS Access to entire 888 bingo network customers Strengthens position as leading content p
Slide 33: Outlook by Vertical
OUTLOOK BY VERTICAL GAMING Casino Bingo New regulated markets expected Acquisition channel for Casino Omni-channel is inevitably the future of the ECM and Eyecon strengthen offering industry Live Casino remains a key focus Poker Strong growth in Asia expected to continue Remains an imp
Slide 34: Outlook by Vertical: Playtech BGT Sports
OUTLOOK BY VERTICAL G A M I N G - P L AY T E C H B G T S P O R T S Launched Playtech BGT Sports (PBS) in November Combining BGT, Geneity, Mobenga, Unilogic Strengthened management led by Dr. Armin Sageder Fully integrated best-in-class sports technology solution Seamless betting experience
Slide 35: Current Trading and Outlook
CURRENT TRADING AND OUTLOOK POSITIONED FOR GROWTH Strong current trading in Gaming division Financials division trading in line with expectations with encouraging KPIs M&A pipeline remains healthy with active ongoing discussions Strong performance expected in 2017 driven by both organic grow
Slide 36: Appendices
Appendices Interims results 2016
Slide 37: Gaming Mobile Penetration
GAMING MOBILE PENETRATION S I G N I F I C A N T G A P B E T W E E N U K M O B I L E P E N E T R AT I O N A N D E L S E W H E R E 60 54% 53% 50 44% 46% 41% 39% 40 36% 29% 30% 29% 30% 30 23% 20% 18% 20 15% 16% 12% 13% 11% 10 8% 4% 4% 4% 4% 0 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2
Slide 38: Regulatory Split of Gaming Growth
REGULATORY SPLIT OF GAMING GROWTH S T R O N G . C O M G R O W T H D U E T O I N C R E A S E D R O YA LT Y R AT E S I N A S I A Excl’ acquisitions 6% Existing -6% Regulated 1% New business 7% Existing 8% .com 9% New business 1% Full year results 2016 38
Slide 39: Gaming Customer Concentration
GAMING CUSTOMER CONCENTRATION N E W P R E S E N T AT I O N B E T T E R R E P R E S E N T S C U S T O M E R D I V E R S I F I C AT I O N Old presentation New presentation Licensees 2014 2015 2016 Licensees 2014 2015 2016 Top 5 53% 53% 55% Top 5 45% 42% 36% Top 10 75% 72% 73% Top 10 68% 62% 54% Top 15
Slide 40: Thank You
Thank You Interims results 2016