Pointsbet Holdings Ltd. · ASX:PBH
Pointsbet — H1 FY2020 Earnings Presentation
45 slides from Pointsbet's earnings presentation, Feb 26, 2020
Slide 1: H1 FY20 Results presentation
PointsBet H1 FY20 Results presentation February 2020
Slide 2: Important notice and disclaimer
Important notice and disclaimer This document and any oral presentation accompanying it has been prepared in good faith, however, no express or implied representation or warranty is given as to the accuracy or completeness of the information in this document, in any accompanying presentation or in a
Slide 3: Agenda
Agenda ▪ Group Highlights ▪ H1 FY20 Results & Commentary ▪ US Opportunity ▪ Tech Strategy ▪ US Media ▪ Conclusion
Slide 4: Strong Growth Across Key Metrics
Strong Growth Across Key Metrics A$533m ACTIVE 102k TURNOVER A$210m CLIENTS(1) 46k 154% H1 FY19 H1 FY20 123% H1 FY19 H1 FY20 A$47m REGISTERED 185k GROSS WIN A$22m CLIENTS 63k 117% H1 FY19 H1 FY20 194% H1 FY19 H1 FY20 A$30m US STATE 12 NET WIN ACCESS(2) A$13m 2 124% H1 FY19 H1 FY20 10 new States H1 F
Slide 5: PointsBet's Transformational 12 Months
PointsBet’s Transformational 12 Months PointsBet US access(1) as at 31 January 2019 PointsBet US access(1) as at 31 January 2020 $1.9bn(2) Washington Vermont Maine $5.2bn(2) Vermont Maine Washington PB US PB US New New New New access Montana North Dakota Minnesota York Hampshire access Montana North
Slide 6: Well Positioned for Future Growth
Well Positioned for Future Growth ✓ Strong Net Revenue growth with first positive ✓ Opened new US head office in net revenue half in the US Denver, Colorado ✓ Record volumes achieved to finish the year, ✓ Successfully raised $122m to support US with over 4m bets over October-December market access a
Slide 7: Continued Momentum Growing Client Base
Continued Momentum Growing Client Base Active Clients • PointsBet recorded a 123% increase in Active Clients in the 12 months ending 31 December 2019 + 123% 102,155 yoy Active 21,141 • As at 31 December 2019 PointsBet had 102,155 Clients Active Clients, meaning they have placed a bet in 80,008 US th
Slide 8: Agenda
Agenda ▪ Group Highlights ▪ H1 FY20 Results & Commentary ▪ US Opportunity ▪ Tech Strategy ▪ US Media ▪ Conclusion
Slide 9: Continued Growth in Australia
Continued Growth in Australia PointsBet Australia – Turnover (A$m) PointsBet Australia – PCP performance (A$m) Key metrics H1 FY19 H1 FY20 Increase + 67% Turnover 209.6 349.2 + 67% pcp Gross Win 21.8 38.1 + 75% 349.2 Gross Win Margin 10.4% 10.9% + 0.5pp 280.5 Net Win 13.3 27.2 + 105% 209.6 Net Win M
Slide 10: Building Momentum in US
Building Momentum in US PointsBet US – Turnover (A$m) PointsBet United States performance (A$m) Key metrics H1 FY20 + 139% 183.9 Turnover 183.9 Gross Win 9.2 Gross Win Margin 5.0% 77.0 Net Win 2.6 Net Win Margin 1.4% Net Revenue 2.6 - - 0.1 H1 H2 H1 H2 H1 • PointsBet is one of only a few operators t
Slide 11: Breakdown of Key US KPI's
Breakdown of Key US KPI’s PointsBet United States – H1 FY20 KPIs (A$m) New Jersey Iowa Key metrics High US Total Digital Staking Total Retail Digital Total Clients Turnover 154.6 24.8 179.4 3.5 0.9 4.4 183.9 Gross Win 10.8 (1.8) 9.0 0.2 (0.0) 0.2 9.2 Gross Win Margin 7.0% (7.2%) 5.0% 5.6% (0.4%) 4.4
Slide 12: Group Results – Normalised
Group Results – Normalised Normalised Sales and marketing expense (A$m) All amounts in A$m H1 FY19 H1 FY20 20.6 Net revenue 12.1 27.4 17.3 Cost of sales (5.2) (15.1) 7.6 Gross profit 6.9 12.3 Other income(1) 0.4 0.1 1H19 2H19 1H20 Sales and marketing expense (7.6) (20.6) Employee benefits expense (4
Slide 13: Group Results – Normalised cont'd
Group Results – Normalised cont'd Normalised • Marketing - expenses have increased in-line with the Group’s investment in building the PointsBet brand, All amounts in A$m H1 FY19 H1 FY20 particularly in New Jersey. Initiatives include Net revenue 12.1 27.4 advertising and digital campaigns with bran
Slide 14: Group Results – Summary
Group Results – Summary A$m H1 FY19 H1 FY20 Growth (%) Statutory Revenue 12.1 27.4 127% Results Australia Trading USA (1.7) (1.3) (3.4) (21.9) Normalised results Technology (3.0) (2.1) Corporate (0.6) (1.0) EBITDA (6.6) (28.4) nmf Loss for the half (7.3) (29.3) nmf Basic Earnings per Share (cps) (14
Slide 15: Balance Sheet - Statutory
Balance Sheet - Statutory All amounts in A$m As at 30 Jun-19 As at 31 Dec-19 • At 31 December 2019 the Group had Net Assets of $185 Cash and cash equivalents 75.9 157.5 million Trade and other receivables 0.5 0.3 Other current assets 0.8 2.0 • Intangible Assets - investment in licenses and market To
Slide 16: Cash Flow - Statutory
Cash Flow - Statutory Statutory • At 31 December 2019 the group had a cash All amounts in A$m H1 FY19 H1 FY20 balance of $157.5 million, including $9.6 million of Net cash outflow from operating activities (6.7) (23.0) client cash Receipts from customers (inclusive of GST) 13.0 29.8 Payments to supp
Slide 17: Agenda
Agenda ▪ Group Highlights ▪ H1 FY20 Results & Commentary ▪ US Opportunity ▪ Tech Strategy ▪ US Media ▪ Conclusion
Slide 18: Half-year results presentation │ February 2020
18 │ Half-year results presentation │ February 2020
Slide 19: Half-year results presentation │ February 2020
19 │ Half-year results presentation │ February 2020
Slide 20: Excellence in Execution in US – Stay Sharp
Excellence in Execution in US STAY SHARP 20 │ Half-year results presentation │ February 2020
Slide 21: Leading Super Bowl Coverage
Leading Super Bowl Coverage PointsBet took 67% more bets on the NFL Super Bowl (February 2020) in New Jersey and Iowa than on the AFL Grand Final (September 2019) in Australia… 21 │ Half-year results presentation │ February 2020
Slide 22: US Sports Betting Opportunity
US Sports Betting Opportunity PointsBet US Access(1): PointsBet US access – Estimated market size in CY23(2)(3): Estimated total revenue in US$ millions New York 1,350 Vermont Maine Washington New New Illinois 784 Montana North Dakota Hampshire Minnesota York Massachusetts Oregon Ohio 599 Wisconsin
Slide 23: PointsBet's US Market Access
PointsBet’s US Market Access Online PointsBet Access Est. FY23 Online tax Population j Wagering Online Retail In-person market size Comments rate (m)(2) Legislated sportsbook sportsbook sign-up (US$m)(3) New Jersey P - No 14.25% 8.9 555 PointsBet brand launched in January 2019 PointsBet launched ret
Slide 24: New Jersey a Fast Growing Sports Wagering Market
New Jersey a Fast Growing Sports Wagering Market NJ Handle since market(1) open: US$6.4bn State-wide monthly sports betting handle(1) (US$m) NFL Season(2) NJ Gross revenue since market(1) open: US$447m NBA NFL Season(3) season NJ July – December handle(1) growth: +111% pcp start NBA season • PointsB
Slide 25: US iGaming Opportunity
US iGaming Opportunity • In addition to its sports wagering offerings, New Jersey monthly revenue (US$m) PointsBet can also provide iGaming (online casino) products through its access partners, Penn 49 49 45 National Gaming, Double Eagle Casino and LVD in 39 40 41 States where iGaming is permitted b
Slide 26: Premium Physical Locations
Premium Physical Locations World Class Retail Sportsbook Catfish Bend Casino 26 │ Half-year results presentation │ February 2020
Slide 27: Upcoming State Launches
Upcoming State Launches PointsBet market research(1) found that approximately 1 in 10 men aged 21+ in Indiana and Illinois have heard of PointsBet… even prior to our launch “Which of the following sports betting services have you heard of? (Those that answered ‘PointsBet’)” – PointsBet market resear
Slide 28: The Indiana Opportunity
The Indiana Opportunity Current ‘State of Play’ • Chance to establish operations as one of the BetRivers BetAmerica earliest operators in the State – currently only four operators, three with meaningful market share(1) US$123m FanDuel Online Handle Draftkings • 17th largest US State by population, w
Slide 29: Ready for Illinois In-person Launch Period
Ready for Illinois In-person Launch Period Major cities Casino (10) Arlington Park Arlington Park • Illinois has legislated an in- ▪ c. 41km / 26mi from Downtown Chicago Hawthorne Race Course Fairmount Park person sign-up period for the Sports facility first 18-months of sports wagering operations G
Slide 30: Agenda
Agenda ▪ Group Highlights ▪ H1 FY20 Results & Commentary ▪ US Opportunity ▪ Tech Strategy ▪ US Media ▪ Conclusion
Slide 31: In-house Technology Platform
In-house Technology Platform Owning and controlling your technology stack is US Technology Challenges PointsBet Solutions unquestionably a superior position for a scaled business, for the following reasons: Diverse regulations across US States: ✓ Common app across US States 1) Responsible gambling w
Slide 32: PointsBet's Technology Platform Capability
PointsBet’s Technology Platform Capability PointsBet Providing all necessary Models & algorithms P end-to-end capability… Bet engine P Automated resulting capability P Pre-match fixed odds sports, in-play fixed odds sports, Front End Tech Back End Tech PointsBetting and fixed-odds racing P Player Ac
Slide 33: Agenda
Agenda ▪ Group Highlights ▪ H1 FY20 Results & Commentary ▪ US Opportunity ▪ Tech Strategy ▪ US Media ▪ Conclusion
Slide 34: US Media Landscape
US Media Landscape Traditional National cable Regional sports Tech giants Direct to Branded single Broadcast TV consumer service Disclaimer: All logos and trademarks in this slide are property of their respective owners. All company, product and service names are for identification purposes only. Us
Slide 35: Media Touchpoints To Drive Objectives
Media Touchpoints To Drive Objectives 35 │ Half-year results presentation │ February 2020
Slide 36: Premium Press With Both Local and National Publications
Premium Press With Both Local and National Publications Building Trust and Credibility NBC 5 Chicago ESPN Chicago Chicago Tribune Half-year results presentation │ February 2020 36
Slide 37: Premium Press With Both Local and National Publications
Premium Press With Both Local and National Publications Building Trust and Credibility Bloomberg Sports Illustrated ESPN The Athletic 37 │ Half-year results presentation │ February 2020
Slide 38: Premium Promotions
Premium Promotions Premium Offers With Value That Bettors Actually Care About 38 │ Half-year results presentation │ February 2020
Slide 39: Agenda
Agenda ▪ Group Highlights ▪ H1 FY20 Results & Commentary ▪ US Opportunity ▪ Tech Strategy ▪ US Media ▪ Conclusion
Slide 40: What's Next
What’s Next 1. Continue revenue growth 2. Expand US State market access 3. Deliver on US media strategy 4. Roll out new US States 5. Develop iGaming products 40 │ Half-year results presentation │ February 2020
Slide 41: Experienced Board & Management
Experienced Board & Management Brett Paton Nick Fahey Johnny Aitken Andrew Fahey Eric Foote Non-executive Executive Director, CEO, US Chief Marketing Chief Commercial Chairman Chief Commercial Officer Officer (Co-Founder) Officer, US (Co-Founder) Sam Swanell Becky Harris Manjit Singh Tom Rundle Seth
Slide 42: Appendix
Appendix —_ i _ & POINTSBET
Slide 43: Statutory P&L
Statutory P&L Statutory All amounts in A$m H1 FY19 H1 FY20 Net revenue 12.1 27.4 Cost of sales (5.2) (15.1) Gross profit 6.9 12.3 Other income / (other expense) 0.4 0.1 Sales and marketing expense (7.6) (20.6) Employee benefits expense (5.3) (15.4) Product and technology expense (0.5) (2.5) Administ
Slide 44: Reconciliation to Statutory P&L
Reconciliation to Statutory P&L H1 FY20 H1 FY20 Abnormals H1 FY20 All amounts in A$m Normalised Statutory All amounts in A$m Net revenue 27.4 27.4 Net foreign exchange (losses) (1.2) Cost of sales (15.1) (15.1) Share option expense (1.4) Gross profit 12.3 12.3 Impact of AASB 16 (0.3) Other income 0.
Slide 45: Glossary
Glossary Term Definition A$ an Australian dollar Active Client a Registered Client who has placed a bet in the relevant 12 month period FTE Full time equivalent is calculated as the dollar amount received from Clients who placed losing bets less the dollar amount paid to Clients who placed Gross Win