Evoke Plc · LSE:EVOK
Evoke — 888 Holdings — Investor Day (November 2022)
63 slides from Evoke's investor day presentation, Nov 29, 2022
Slide 1: Capital Markets Day 29 November 2022
888 CoS CAPITAL HOLDINGS MARKETS DAY 29 NOVEMBER 2022
Slide 2: Business Overview
BUSINESS OVERVIEW ITA] PAZNER, CEO
Slide 3: Agenda
AGENDA the2 Drinks and canapes from 4.30pm HOLDINGS i i Purpose of today fe Topic Presenter i i 1 P P . © Provide an outline of the | Business overview Itai Pazner (CEO) evolved strategic 1 framework for the Group ' Financial framework Yariv Dafna (CFO) following the ' combination with i Strategy fo
Slide 4: Executive Team
EXECUTIVE TEAM * Itai Pazner Chie Mark Skinner Chief P Harinder Gill Phil Walker Nir Hakarmeli Chief Risk C UK MD International MD Anna Barsby Chief Produ Guy Cohen Elena GieMES Chief if
Slide 5: Strategic Rationale Reinforced
STRATEGIC RATIONALE REINFORCED ++}) Fundamental strengths of the acquisition provide robust foundations mereinss G6 ee eeeeeerere fo) Significantly increased scale 2} ceeeeereee -O Greater revenue diversification 3} eeeeceees 0 Leading positions in core markets 888 yer rO> Large and experienced comb
Slide 6: Flutter Entain DraftKings
● ● ● ● Flutter Entain DraftKings 888 - WH Super Group Kindred William Hill 888 Betsson Rush Street PointsBet
Slide 7: Business Overview
BUSINESS OVERVIEW ++}) HOLDINGS, Online-led diversified global leader with world class brands i B26} Betting 20% *Revenuel: £720m +Revenuel: £513m *Revenue!: £611m *Revenuel: £19m Retell etail +#3 operator +#2 operator +#3 in Spain *SI Sportsbook can 27% leverage iconic +#3 sports brand; #2 +100% br
Slide 8: Addressing Our Challenges
ADDRESSING OUR CHALLENGES We understand where we are and are adapting the business accordingly Key business challenge: © Capital constraints through high leverage and cost of debt © Multiple platforms © Lower than average margins How we are addressing: © Deleveraging is absolute priority © Integrati
Slide 9: Executing on Our Vision
EXECUTING ON OUR VISION aaa Creating the platform for the next decade of growth, delivering high return "*°" on equity To delivering on our PLAN In order to realise our POTENTIAL From a developing POSITION a range of world class a world-class customer- brands across global led organisation, with mar
Slide 10: People and Culture
PEOPLE AND CULTURE 888 Gia AAM Bigger, Stronger, Better Together
Slide 11: Unified Proprietary Technology
UNIFIED PROPRIETARY TECHNOLOGY Early decision to enhance core 888 proprietary platform provides clarity on tech roadmap Detailed analysis across six core product pillars and assessment of current readiness and investment needed against key success factors Account & wallet Back office Promotions Gami
Slide 12: Leveraging Global Functions
LEVERAGING GLOBAL FUNCTIONS Global capabilities deliver scale efficiencies and enable improved customer experience William Hill has transformed its customer service function since 2020, delivering clear improvements Improved customer satisfaction by 32% Reduced the number of issues by 34% Improved s
Slide 13: Customer Service
CUSTOMER SERVICE +b}) Effective automation delivering a high quality customer experience HOLDINGS, EB wn nssseorrscerins ABAINTREE CANCELLED JX We're sorry ‘bout the event cancs i ‘automatically refund your bet of £20.00 within 2 hours Note: As part of the webcast on 29 November 2022, this slide inc
Slide 14: William Hill Customer Metrics
● ● ● ● ● William Hill 888 William Hill 888 ● ● ● Bets Player ARPU ● days 888 in-house Third party ●
Slide 15: Continued Product Delivery
CONTINUED PRODUCT DELIVERY DEPOSIT & UPGRADE WIN UP TO 500%
Slide 16: Key Messages
KEY MESSAGES t+} Clear integration plans and strategic focus; deleveraging offers strong mereinss equity upside potential; building a platform for future growth @ z @ POSITION PLAN POTENTIAL e Strategic rationale e We are focused on e Create a strong platform reinforced deleveraging through for the
Slide 17: Financial Framework
FINANCIAL FRAMEWORK YARIV DAFNA, CFO
Slide 18: Net Debt and Market Cap
● ● ● ● ● FY22 FY25 Net debt Market Cap
Slide 19: Revenue Trends FY19-LTM Q3-22
● ● ● ● ● ● FY19 FY20 FY21 LTM Q3-22 UK International ●
Slide 20: Previous and New Guidance
FY22 FY23 FY24 FY25 FY22 FY23 FY24 FY25 FY22 FY23 FY24 FY25 Previous guidance New guidance Opex Capex ● ● ● ● ●
Slide 21: Increased Synergies Target
INCREASED SYNERGIES TARGET +L} We are focused on delivering value across the cost base from the mereinss combination % of total synergies: 32% Key drivers: % of total synergies: 15% Key drivers: Product and technology e Moving to a single unified platform across all brands built on 888's proprietary
Slide 22: EBITDA Margin Bridge
LTM H1-22 EBITDA margin ● Headwinds ● & Inflation Synergies ● ● Cost efficiency ● FY25 EBITDA FY20 FY21 LTM H1-22 FY25 margin ● EBITDA Central costs Other opex Marketing Cost of sales
Slide 23: Retail Cost Trends
● ● ● Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 ● 2019 2020 2021 2022 ● ● ● Staff costs Rent & rates Utilities Content Other
Slide 24: Deleveraging Profile
DELEVERAGING PROFILE Focus on deleveraging with sufficient flexibility in debt stack to further support plans Gross debt at par value 1,799 1,799 IFRS16 liabilities! 102 102 Cash (excl. customer balances)! (186) (186) Net Debt 1716 1716 Pro forma Adjusted EBITDA? 310 426 Leverage 5.5x 4.0x Deleverag
Slide 25: EPS Growth Framework
EPS GROWTH FRAMEWORK Improving profitability and deleveraging drive strong potential EPS growth Va Revenue growth Adjusted EBITDA Margin Clear levers to drive higher +3 margins, including synergies, p optimisation of operations and brand strategy, and increased focus on key markets +1 p Focus on a s
Slide 26: FY2025 Financial Targets
FY2025 FINANCIAL TARGETS tb}? Delivering strong shareholder returns while building the platform for future = "7°" growth Refined strategic focus on a smaller number of key markets, Revenue >£2bn with clear targets to drive greater market share and build sustainable long-term market leadership positi
Slide 27: Key Messages
KEY MESSAGES aa Focus on improving profitability and deleveraging enables strong EPS mereinss growth potential © POSITION e Fragmented business with lower EBITDA margin than peers e Leverage significantly above mid-term target of 3x ro) PLAN e Realise significant synergies alongside cost efficiency
Slide 28: Strategy for Success
STRATEGY FOR SUCCESS VAUGHAN LEWIS, CHIEF STRATEGY OFFICER
Slide 29: Disciplined Capital Allocation and Streamlined Business
Disciplined capital allocation and more streamlined and profitable business to generate strong returns A clear plan to create a more efficient and effective business to realise our potential Achieving our aims by leveraging our sources of competitive advantage Building a sustainable business for the
Slide 30: Industry Trends
INDUSTRY TRENDS Market dynamics and our scale mean we are well positioned to take advantage of the longer term growth potential & Regulatory change More countries regulating and trends towards tighter regulatory restrictions in large European markets Significant industry consolidation in recent year
Slide 31: Market Focus
MARKET FOCUS aad HOLDINGS, Clear focus on fewer markets to generate superior returns on investment CORE GROWTH a « q FOO Wee Bm % of FY21 e online revenue 10% ~10% ~20% N/A Total market th size (2022)! £10.4bn £9.26n £59.8bn al Market growth all CAGR (22-26)! 3.5% 11.5% 13.7% @ wen 10-15%6+ 5-10%+ a
Slide 32: Actives and Stakes
8000 200000 6000 150000 Actives Stakes 4000 100000 2000 50000 0 0
Slide 33: Customer Age Profile
● ● ● ● ● ● ● ● ● ● ● ● 21-38 39-60 61+
Slide 34: Key Messages
KEY MESSAGES t+} Clear focus on attractive key markets, while building a scalable platform mores for the future @ z @ POSITION PLAN POTENTIAL e Leading positions in e Clear market priorities, e The platform we are attractive markets with the short term focus building means the future . . on building
Slide 35: Player Safety
PLAYER SAFETY HARINDER GILL, CHIEF RISK OFFICER
Slide 36: Critical Foundations - Player Safety
CRITICAL FOUNDATIONS - PLAYER SAFETY aaa) HOLDINGS Player safety is at the heart of what do, and an area of focus for continual improvement Grow EPS & GOAL Deleverage oo Integration Market focus KEY ee World class Customer ENABLERS leadership brands excellence Players Governance
Slide 37: Licensed Jurisdictions
Denmark 22 Licensed Jurisdictions ● Ireland UK Sweden ● 2018 ● Latvia ● 2019 ● Germany ● Canada 2020 ● Spain Romania ● 2021 ● ● USA ● SI sportsbook Portugal ● launch ● Colombia ● Italy ● ● Dec-19 ● Dec-20 ● ● Dec-21 ● ● Oct-22 ● ● 888 WH
Slide 38: Safer Gambling
SAFER GAMBLING Utilising data and technology to enhance player protection Using data and insights to drive continuous improvement Education and awareness Human: e.g. personal Safer interaction; gambling further tools monitoring Player Automated: Seite Real-time eg. marketing monitoring suppression;
Slide 39: Key Messages
KEY MESSAGES Clear focus on attractive key markets, while building a scalable platform for the future © POSITION e Significantly improved polices and processes in recent years e Separate platforms and slightly different approaches to safer gambling bx PLAN e Embed safer gambling in product and custo
Slide 40: UK&I
HOLDINGS UK&l PHIL WALKER, MANAGING DIRECTOR UK&l
Slide 41: UK Online Gaming, Betting and Retail
● Online gaming ● Online betting Retail LBOs ● 2018 2022 2026 ● ● 2020 2021 2020 2021 WH 888
Slide 42: Gross Gambling Yield vs GDP
10.0% 7.5% 5.0% 2.5% 0.0% Apr '09 - Mar '10 Apr '10 - Mar '11 Apr '11 - Mar '12 Apr '12 - Mar '13 (2.5%) (5.0%) Gross Gambling Yield UK Nominal GDP Discretionary Spending
Slide 43: Product and Content Leadership - Online
PRODUCT AND CONTENT LEADERSHIP - ONLINE Proprietary technology enables best in class customer experiences
Slide 44: World Class Brands - Online
WORLD CLASS BRANDS - ONLINE th}? HOLDINGS Suite of brands to serve different customer needs, with market leading sports and casino Brand Portfolio of distinctive brands with market leading awareness across sports and gaming ors 98% 76% 86% 86% 80% } Daten | nyjeen casino poker 888 Sports Betting Slo
Slide 45: Sportsbook and Gaming Quarterly Trends
Oct'19 Q1 Nov'19 Dec'19 Jan'20 Q2 Feb'20 Mar'20 Q3 Apr'20 May'20 Jun'20 Q4 Jul'20 Aug'20 Q1 Sep'20 Oct'20 Q2 Nov'20 Dec'20 Sportsbook Jan'21 Q3 Feb'21 Mar'21 Q4 Apr'21 May'21 Jun'21 Q1 Gaming Jul'21 Aug'21 Q2 Sep'21 Oct'21 Q3 Nov'21 Dec'21 Total Jan'22 Q4 Feb'22 Mar'22 Q1 Apr'22 May'22 Q2 Jun'22 Jul
Slide 46: Product and Content Leadership - Retail
>> PRODUCT AND CONTENT LEADERSHIP - RETAIL eae) Significant investments already made in modernising estate and machine = ""°"® capability, which supports the future potential of retail Retail gaming Self Service Betting cabinets Terminals EPOS Smart Hubs Shop of the future e Technical trials in Dec-
Slide 47: The Brand Power of Retail
THE BRAND POWER OF RETAIL ++}) Retail generates significant brand awareness and complements the UK mennes online business Nationwide retail presence has significant brand benefits e >1,350 shops provide significant advertising and media value - raising brand awareness e >6,500 colleagues complementi
Slide 48: Sign Ups and Unique Actives
● ● ● ● ● ● ● 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 Sign Ups Unique Actives
Slide 49: Key Messages
KEY MESSAGES ++}) HOLDINGS Cementing and growing our market leading position, enhanced by complementary retail © POSITION e We operate market leading brands for betting and gaming in the one of the world’s largest regulated online gambling markets e Attractive leading cash generative retail proposit
Slide 50: International
INTERNATIONAL NIR HAKARMELI, MANAGING DIRECTOR INTERNATIONAL
Slide 51: International Markets
Italy Spain Denmark Canada Sweden Germany Romania Italy Spain Denmark Canada Sweden Germany Romania 888 William Hill / Mr Green
Slide 52: Revenue and Bets per Player
● ● ● ● ● ● ● Revenue per Bets per player Rounds per player player
Slide 53: 888 Casino
● 888 Casino ● 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 2020 2021 2022
Slide 54: Key Messages
KEY MESSAGES Grow leading positions and improve efficiency through focused operation, aa HOLDINGS world class brands, and combining local knowledge with global expertise © POSITION e Fragmented business, with a range of products and brands that are competing against each other in some markets, creat
Slide 55: Summary
SUMMARY ITA] PAZNER, CEO
Slide 56: Key Messages
KEY MESSAGES aa Strong equity growth potential as we build an exciting platform for future = "°™ growth through integration, market focus, and commitment to deleveraging © POSITION e Strategic rationale reinforced e Material external changes mean we are prioritising within the business to address th
Slide 57: Q&A Presenters
Q&A PRESENTERS
Slide 58: LIX
LIX
Slide 59: 2023 Technical Guidance
2023 TECHNICAL GUIDANCE Delivering our plan of integration and market focus 2a a Group e Low single digit revenue decline e Adjusted EBITDA margin at least 20% Online e Low single digit revenue decline in the UK with impact of safer gambling measures e Marketing ratio ~24-25% e EBITDA margin at leas
Slide 60: Debt Facilities
DEBT FACILITIES Long-term debt structure with sufficient flexibility to support plans TLA (GBP) TLA (EUR) TLB (USD - hedged) TLB (USD) Fixed notes (EUR) Floating notes (EUR) William Hill 2026 bonds Undrawn RCF (multi-currency) £347m €467m £287m $168m €400m €300m £1lm £150m ‘Based on FX rates as at 1
Slide 61: Operating Model
OPERATING MODEL A clear structure to deliver local focus while benefitting from scalable group resource Business units N International y naa) HOLDINGS Geographic Business Units are responsible for commercial activities (incl. local marketing & which brands to use), with full ownership of the P&L and
Slide 62: Disclaimer
DISCLAIMER aa HOLDINGS Forward looking statements © This presentation may contain certain forward-looking statements, beliefs or opinions, with respect to the financial condition, results of operations and business of the Company. These statements, which contain the words ‘anticipate’, ‘believe’, ‘i
Slide 63: corporate.888.com
HOLDINGS corporate.888.com