Rank Group Plc · LSE:RNK
Rank — The Rank Group — Investor Day (May 2017)
77 slides from Rank's investor day presentation, May 24, 2017
Slide 1: The Rank Group plc Capital Markets Day
The Rank Group plc Capital Markets Day 24 May 2017
Slide 2: Agenda
Agenda • Welcome ₋ Henry Birch • Mecca retail ₋ Alan Morgan • Grosvenor retail ₋ Martin Pugh • Digital ₋ Bede Gaming, Michael Brady & Dan Smyth ₋ Rank, Adam Joseph & Darren Moffett • Close 2
Slide 3: Mecca – Alan Morgan
(‘oe Group Mecca Alan Morgan
Slide 4: Alan Morgan
Alan Morgan • Hospitality & Leisure background • Pubs, Hotels, Restaurants, Retail, David Lloyd Leisure • Part of the Exec team that demerged Spirit Pub Company from Punch Taverns, listed it, created and rolled out 3 new brands and then sold it to Greene King • Joined Rank in September 2016 • Views
Slide 5: UK Bingo Market
UK Bingo Market • The UK bingo industry consists of 358 bingo venues Operator Venues Gala Bingo 131 • 20% of total machines can be B3/B4 machines Mecca 85 Majestic 16 • Bingo licences are permitted in any part of the UK Carlton Clubs 13 Club 3000 12 • Mecca is the second largest operator (by venue)
Slide 6: Mecca Retail – The context
Mecca Retail – The context • Overall customer numbers in growth over the last 18 months • Admissions from traditional core customers are in decline (although ahead of the market) • Cash flow from core customers is robust - take per head growing well, cost control is strong, low capex cost • Limited
Slide 7: Mecca Retail – The Plan
Mecca Retail – The Plan • Stage 1 - Implement robust cost control and disciplines to improve profitability now and ensure increased revenue converts heavily to the bottom line ongoing • Stage 2 - Take the quick revenue opportunities through improved service & better upselling ongoing • Stage 3 - G
Slide 8: Cost control results so far
Cost control results so far 2013/14 2014/15 2015/16 Q1 16/17 Q2 16/17 Q3 16/17 Salaries & wages £m 44.6 43.9 45.0 12.0 11.6 11.1 % revenue 20.6% 20.3% 20.4% 22.1% 21.9% 20.3% Operating hours 3,805 3,697 3,690 917 896 850 Weekly Av’000 73 71 71 71 69 65 Promotional costs £m 19.6 21.9 19.5 4.8 5.7 3.4
Slide 9: Product innovation for SPV growth
Product innovation for SPV growth SPV 2013/14 2014/15 2015/16 Q1 16/17 Q2 16/17 Q3 16/17 Bingo £2.80 £2.61 £2.76 £3.10 £3.20 £3.37 % Var (6.9)% 6.0% 12.1% 15.8% 22.1% Interval games £7.54 £7.74 £7.77 £7.75 £8.00 £8.00 %Var 2.6% 0.4% (0.2)% 3.0% 2.9% Slots £5.78 £6.06 £6.31 £6.47 £6.68 £6.57 % Var 4.
Slide 10: Product innovation for admissions growth
Product innovation for admissions growth • Theme nights rather than discounting to drive frequency of existing customers • New events & games created to attract different audiences Examples: ₋ Students nights (Mayhem Bingo / Batty Bingo) ₋ Young professionals (Bonkers Bingo) ₋ Alternative night out
Slide 11: Bingo event promotional flyer
"TWO LINES 0 TOTAL PRIZE £ 271g GET EXCITED, for one night only we are inviting you into the mad house Mecca Bingo Cocktails & Shots B heac Beers & Burgers Doors open 9.30 till late Great Prizes & DJ £5 TICKET ENTRY (+ £1 on arrival for Bingo & Pen)
Slide 12: Slide 12
Slide 13: New concepts
New concepts 13 (2 Rank Group
Slide 14: Luda
Luda
Slide 15: Bingo
Bingo • High footfall location in a city centre or the High Street • Compact footprint, typically 2.5k - 5k sqft • Slots lounge with the latest technology and games • Time and price flexibility – a “pay as you go” bingo model rather than traditional time bound sessions • Coffee shop style F&B with p
Slide 16: Product
Product Bingo • Primary purpose of venue • Full programme of games throughout trading day with a combination of – Bingo Variant (fixed odds) games. Multiple titles available on Max and paper ticket printed on demand. Games played on video wall every 6 minutes, or on demand on EBT every 2 minutes – K
Slide 17: Product
Product F&B • Seen as vital component to break down barriers, drive footfall, dwell time and TPH. Key differentiator vs High Street gaming offer • Food offer by day part; – Breakfast – pastries, porridge, granola, bacon rolls – Lunch – sandwiches, panini’s, pasta bowls – Evening – pizza’s, chicken w
Slide 18: Luda - Walsall
Luda - Walsall QO0000 ox ROC OO 4 COFFEE ENTRANCE GROUND FLOOR 18
Slide 19: Initial capex of £800k per unit
• Initial capex of £800k per unit which is expected to reduce through learnings to £500k • Return on investment in 3-4 years • Rollout pace dependent on success and property 19
Slide 20: Mecca next generation
Mecca next generation What is it: • A multi-use leisure venue that at its core combines, a flexible venue for bingo and events, competitive F&B with a broad gaming experience and the latest technology, all day, every day Who is it for: • Gender neutral • 25-45 years core audience, 45+ & sub 25 secon
Slide 21: Summary
Summary • Making good progress against the plan in all areas • Patting our heads and rubbing our tummies... (Attract new and keep old) • Cost control now very strong • Product innovation is delivering • Venue innovation happening • Exciting times ahead 21
Slide 22: Q&A
Q&A (2 Rank Group
Slide 23: Grosvenor Casinos – Martin Pugh
Grosvenor Casinos Martin Pugh
Slide 24: Martin Pugh
Martin Pugh • Leisure and lottery background • Previously managing director for Virgin Active and Camelot • Joined Rank in January 2015 • Previously managing director of Mecca until September 2016 24
Slide 25: UK Casino Market
UK Casino Market • The UK retail casino industry consists of 146 operating Operator Operating Total licences with 27 in London and 119 in the Provinces Licences Licences • In total, there are 182 1968 Act licences and 16 2005 Act Grosvenor Casinos 65 77 Genting 40 56 licences Caesars Entertainment L
Slide 26: UK Casino Market – Average Weekly Visits
UK Casino Market • The casino market attracts over 20m visits a year with 14m in the Provincial casinos and 6m in London Annual Visits from UK Casino Estate Total Annual Visits Average Weekly Visits • Gaming handle totals £7.4bn and the sector generates 22,000 3,000 gaming revenues (excluding spends
Slide 27: Introduction to Grosvenor
Introduction to Grosvenor • Grosvenor operates 67 licences out of 56 venues – 45 in Provinces, 9 in London and 2 in Belgium • 19 casinos were acquired from Gala in May 2013 • Market share of over 37% based on number of visits • Average casino size of 21k sqft • 726 tables and 1,280 slot machines • A
Slide 28: The Grosvenor Customer
The Grosvenor Customer • 27% Female/73% Male Current Income Mix • Average age of member is 40 • Average frequency of visit 5.2 per year; up 11% YOY Card Room Games Food & Drink 8% • 65% of income comes from casino games with machine 4% revenues at 23% • Trend is for growth in machine revenues with a
Slide 29: 2016/17 In Context
2016/17 In Context A year of significant change: • Enhanced Due Diligence – continuing challenge, but progress being made • People and cost base restructuring – Project One and Refocus: • Project One: Standardisation of employment contract T&Cs • Project Refocus: £6m of savings through management de
Slide 30: Our Approach
Our Approach • Major focus on step-changing London performance (45% profits in 9 casinos) • Introduce a new, more leisure-based offering in major provincial centres • Refurbishments at Leeds and Nottingham are the first of this type with a roadmap of future schemes • Maintain transactional approach
Slide 31: Provincial Venue Development – Leeds
Provincial Venue Development Leeds: • Scheme to modernise and create a leading gaming experience at a cost of £2.7m • Offers 20 tables with 40 slots and 38 electronic gaming positions • Trading in line with expectations and competes with the 2005 Act licence casino that opened in January 31
Slide 32: Provincial Venue Development – Nottingham
Provincial Venue Development Nottingham: • Transformational refurbishment at a cost of £3.0m with a zonal approach that integrates leisure and gaming • Supports full open door offering customers a seamless experience across all areas • Nottingham has started well with significant increases across al
Slide 33: London Opportunity
London Opportunity • 27 operating casinos within three licenced boroughs (Westminster, Camden and Kensington & Chelsea) • Newham hosts London's only 2005 Act casino at Stratford • Grosvenor operates 9 casinos with 2 in Camden, 2 in K&C and 5 in Westminster. Also hold a spare licence in K&C • Grosven
Slide 34: London Opportunity
London Opportunity • Modernisation programme underway at Piccadilly and Golden Horseshoe venues • Combined capital cost of £3.2m • Piccadilly focused on exceptional gaming experience, capitalising on its close proximity to Chinatown • Scheme at the Golden Horseshoe sees a modernisation of the casino
Slide 35: Summary
Summary • 2016/17 a year of change, but business now well-positioned for top and bottom line growth • Improving underlying trends throughout the year • Leaner cost base and technology enhancements set strong platform for next phase • Provincial refurbishments outperforming targets and attracting new
Slide 36: Q&A
Q&A (2 Rank Group
Slide 37: An Introduction to Bede
AN INTRODUCTION TO BEDE Michael Dan Brady Smyth CEO Managing Director
Slide 38: Who We Are
WHO WE ARE UK BASED LICENSED EXPERIENCED ONE TEAM 1ST CHOICE Private Ltd Co. AGCC & UKGC 15+ Years Over 180 Strong 25 Brands Founders & Team Licenses & Platform Rich Pedigree Three Offices Rank Partner in Spain
Slide 39: Bede's Vision
BEDE’S VISION FIRST CHOICE GAMING PLATFORM FOR ALL REGULATED OPERATORS
Slide 40: Grow a Strong & Diverse Customer Base
Grow a Strong & Diverse Customer Base Customers & Partners are our Greatest Advocates Best Product for Licensing Globally FIRST CHOICE GAMING PLATFORM , , i} FOR ALL REGULATED OPERATORS O Attract, Engag Grow Talent Thought Leaders
Slide 41: The Future of Bede
THE FUTURE OF BEDE
Slide 42: Bede Software
BEDE SOFTWARE
Slide 43: Products: A Complete Online Game Solution
PRODUCTS A COMPLETE ONLINE GAME SOLUTION PLATFORM GAMING VERTICALS WHITE LABEL SITE Everything you’ll need to run Game content and unified bonusing Turnkey and managed service your business from a single integration solution
Slide 44: Platform as the Enabler of Differentiation and Innovation
PLATFORM AS THE ENABLER OF DIFFERENTIATION AND INNOVATION
Slide 45: Highly Scalable Transactional Wallet
PLATFORM AS THE ENABLER OF DIFFERENTIATION AND INNOVATION Highly Scalable Transactional Wallet Industry leading flexible wallet and player account accessible from any device
Slide 46: Open Platform
PLATFORM AS THE ENABLER OF DIFFERENTIATION AND INNOVATION Open Platform Extensive APIs allowing Operators full access to integrated any third party or create their own IP Highly Scalable Transactional Wallet Industry leading flexible wallet and player account accessible from any device
Slide 47: Open Platform
OPEN PLATFORM ● Extensive APIs ● SDK - multiple access points ● Enabling operator ● Best of breed services ● Supplier agnostic
Slide 48: Example: Single Account
EXAMPLE: SINGLE ACCOUNT ● Bede Omni-Wallet understands Retail ○ Single wallet for all channels ○ Trace source of funds ○ Playable at 10,000s gaming terminals ● Loyalty integration ○ Single A/C - Earn across retail and digital ○ Redeem for cash/bonus/shop ● Bede Bonus ○ Cross channel promotions are p
Slide 49: Bede Products
PLATFORM AS THE ENABLER OF DIFFERENTIATION AND INNOVATION Bede Products Industry leading out of the box tools unifying gaming experience across all providers Open Platform Extensive APIs allowing Operators full access to integrated any third party or create their own IP Highly Scalable Transactional
Slide 50: First Class Tools
FIRST CLASS TOOLS TAILOR AND TARGET YOUR OFFER TO MEET CUSTOMER NEEDS PLAYER CAMPAIGN BONUS MANAGEMENT CAMPAIGN MGR BONUS TOOL PLAYER — — MANAGEMENT Target & execute tailored Complete bonus tool — comms based on real Free spins 360 view of player time customer events Sports free bets activity Permis
Slide 51: Reporting & Business Intelligence
REPORTING & BUSINESS INTELLIGENCE BUSINESS LIVE DATA DATA APIs INTELLIGENCE ● Real time ● BI / Visualisation tool ● Low latency data - ● Snapshots on business ● Access to Data cubes automated marketing ● 25+ simple widgets ● Segmentation ● Hi latency data - Finance reporting
Slide 52: Deep Integrations - Enhanced Offering
DEEP INTEGRATIONS - ENHANCED OFFERING ● Cross-sell bonusing ● Granular, real time data ● Free Spins integration to ● Targeted front-end ● Targeting via Camp. Mgr Bede Bonus Tool ● Unique bonuses OTHERS :
Slide 53: Example: Rank - Cheltenham
EXAMPLE: RANK - CHELTENHAM HIGHLIGHTS THE ADDITIONAL VALUE THE BEDE PLATFORM CAN OFFER ● Integrated Kambi’s bonus tool which can be used Bede Campaign Mgr ● Rank have automatically triggered: ○ Sports bonuses & messaging ○ Segmented offering - e.g. if X then offer Y, if Z then offer A. ○ Chain bonus
Slide 54: Example: Evolution Data Feed
EXAMPLE: EVOLUTION DATA FEED TAKING ADDITIONAL LIVE DATA FEED TO ADD NEW BONUSING & TARGETING ● Integrated Evolution’s Data Feed API. ● Used to create Roulette Triggers - e.g. ○ Winning outcome ○ Hot / Lucky numbers ○ Favourite dealer ● Automated, real time outcomes: ○ Bespoke bonuses ○ Behavioural
Slide 55: Example: IGT Free Spins
EXAMPLE: IGT FREE SPINS INTEGRATING 3RD PARTY SERVICES & EXTENDING, TO SINGLE BACK OFFICE ● Aim to make BedeBOSS the single back office for an operator. ● Integrated IGT free spins. ● Now doing Net Ent, MGS and SG. ● Also extending our Games Integration API to enable us to offer free spins on all th
Slide 56: Best of Breed Gaming Solution for Rank
BEST OF BREED GAMING SOLUTION Differentiation Create a user experience without ENABLING platform limitation DIFFERENTIATION Bede Products AND INNOVATION Industry leading out of the box tools unifying gaming experience across all providers FOR RANK Open Platform Extensive APIs allowing Operators full
Slide 57: Thank you
FIRST CHOICE GAMING PLATFORM FOR ALL REGULATED OPERATORS Thank you
Slide 58: Digital – Adam Joseph & Darren Moffett
Digital Adam Joseph & Darren Moffett
Slide 59: Depth of Digital Expertise
Depth of Digital Expertise Who Are We? Activity delivered Gibraltar – P&L Leadership, Product Management, Operations, Digital Marketing Maidenhead – Multi-Channel, SAW, Analytics, Optimisation, (Personalisation), Data Science, CRM, Payments Sheffield – Inbound & Outbound Contact, VIP, Fraud Op
Slide 60: Digital Review
Digital Review Activity delivered Priorities Platform migration – February 2016 Microgaming Poker migration – February 2016 Kambi Sports – June 2016 NetEnt, NYX, Realistic, Eyecon – completing the suite New Live Dealer Studio – July 2016 Mecca Bonus Wallet Change – August 2016 Marketin
Slide 61: Sheffield – Customer Solutions Hub
Sheffield – Customer Solutions Hub Activity delivered August 2016 – Victoria closed – Sheffield opened Now 24/7 Chat & Social in addition to Phone & Email Recently expanded for VIP & Fraud Salesforce CX technology Outbound driven approx. £6m deposits Customer Satisfaction & First Conta
Slide 62: Transforming Marketing Technology
Transforming Marketing Technology Activity delivered Cloud hosted platform Rebuilt Digital Data Ecosystem Propensity modelling & micro-clustering driving customer interactions Migrating to Adobe Campaign to deliver automation & enable scale Optimisation efforts driven approx. £2.5m additio
Slide 63: Multi-Channel
Multi-Channel The Opportunity Key activities completed Approx. 2.8m venue members Playtech IGS installed to Grosvenor venues Grosvenor, min. 50% active online Bede wallet changes Customer demand Rank Enterprise Services (Middleware) Value of a multi-channel engaged customer Fraud Eng
Slide 64: Single Account & Wallet
Single Account & Wallet Digital The Opportunity Key activities completed Solution Overview Complexity simplified by modern tech of selected 3rd parties and RES Rank Enterprise Services (RES) • Authentication; Single Customer View; Customer Service; CRM; Fraud; Payments; Analytics RES links the c
Slide 65: KPI performance – Grosvenor
KPI performance Grosvenor Quarterly Active Spilt • Sustained GGR growth 80,000 80,000 ₋ Driven by 46% YoY increase in actives 70,000 70,000 • Strong Sportsbook launch 60,000 60,000 ₋ Over 27k customers have placed a real 50,000 50,000 money bet 40,000 40,000 Activity delivered Grosvenor GGR 30,000 3
Slide 66: KPI performance – Mecca
KPI performance Mecca Product split (actives) • ARPU growth driven by platform capabilities ₋ Site opt-in 41% ₋ Additional bonus types Slots & Games Bingo 59% • Strong Slots & Games performance ₋ 16% YoY growth in GGR ₋ 30% YoY growth in ARPU Mecca ARPU Product split (GGR) £150 £140 34% £130 Slots &
Slide 67: Slots integrations
Slots integrations • Bhotesh Maheshwari, Head of Casino – 10 years industry experience (Inspired and Betfair) ₋ Much improved quality and quantity in game delivery NetEnt NYX ₋ Mecca customer marketing on Slots has been overhauled, this has driven significant ARPU growth ₋ Exclusive titles launched
Slide 68: Bingo
Bingo • James Boord, Head of Bingo – 6 years industry experience (Gala and Sky) ₋ Investment in core product with new and innovative games exclusive to Mecca Linka-balls Cashline Fortunes Emoji Reactors ₋ Successful cross sell game launches via popular Bingo themes Emoji and Burst 68
Slide 69: Investment in Live Casino
Investment in Live Casino • Richard Walker, Head of Live Casino – 20 years industry experience, land based (Grosvenor, LCI and Gala) and supplier side (Evolution) ₋ New studio in Malta ₋ New native app on iOS and Android 69
Slide 70: Launching Sportsbook
Launching Sportsbook • Steve Munns, Head of Sport – 15 years industry experience (888 and Stan James) ₋ Rapid integration – 10 weeks from start of project to launch pre Euro 2016 ₋ Engaged with 27k customers and proving a key product for acquisition and retention ₋ Win margin solid at 6.5% since lau
Slide 71: Scaling Poker
Scaling Poker • Tom Hudson, Operations Manager – 7 years industry experience (Betfred) • Alex Martin, Commercial Manager – 8 years industry experience (PKR and Bluff) ₋ Now live with a full product offering – Mobile, Instant Play and Mac ₋ Convergence plans for key retail tournaments ₋ Investment in
Slide 72: Operational excellence
Operational excellence • Anthony Conroy, Head of Operations – 10 years industry experience (Coral and Boyles) ₋ New bonusing platform: ₋ Instant rewards – Deposit bonuses, cashbacks, sportsbook, unique vouchers ₋ Specific bonusing – individual game > all games ₋ Campaign Management: ₋ Tight integrat
Slide 73: Digital Strategy
Digital Strategy 1) Leveraging our venues & customer base 2) Launching new 5) People excellence Our Digital brands Strategy is based on 5 initiatives 4) Competitive & 3) Marketing & differentiated Operational content & products excellence 73
Slide 74: Digital Strategy
Digital Strategy Leveraging our venues & customer base Launching new brands Venue teams as affiliates First new brand Live broadcast from venue Luda Exclusive multi-channel slots Single Account & Wallet Novomatic – Reel King Potty & River Queen 74
Slide 75: Digital Strategy
Digital Strategy Marketing & Operational excellence Competitive, differentiated product Profitably expand our marketing activities Live broadcast from venue Realise benefits from recent investments New Slots, including bespoke & exclusive Bonus & wallet developments Mecca & Live Casino A
Slide 76: Q&A
Q&A (2 Rank Group
Slide 77: Thank you
Thank you 77 (2 Rank Group