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RESULTS FOR THE SIX MONTHS ENDED
30 JUNE 2016
2
AGENDA
Itai Frieberger | Our H1 2016
Aviad Kobrine | Financial Review
Itai Frieberger | Operational Review & Summary
Q&A
3
Exceptional growth in casino and sport
Regulated markets represent a majority of revenues and growing faster than .com
Euro 2016 was the first 888sport main event – performed very well
Business is well diversified across major gaming verticals, markets and platforms
H1 2016 marks seven half years of LFL growth
OUR H1 2016
AVIAD KOBRINE, CFO | FINANCIAL REVIEW
4
5
2016 H1 HIGHLIGHTS
Revenue H1 2016, up 19%
B2C Revenue up 21%
Casino and Sport leads growth:
Casino Revenue up 31%
Sport Revenue up 63%
Five consecutive quarters of revenue growth with record performances in Q1 and Q2 2016
Revenue from regulated markets – fastest growing segment, up 29%
Regulated markets represent 63% of group Revenue, in-line with strategy
Adjusted EBITDA1
up 8% to $44m (H1 2015: $41m), up 16% at constant currency2
Newly introduced gaming duties
Profit after tax up 40% to $22m (H1 2015: $15.7m)
Basic EPS1
at 6.1c (H1 2015: 4.4c), up 39%
Interim Dividend of 3.8c per share (H1 2015: 3.5c)
1 As defined in H1 2016 interim report.
2 See footnote 2 to the financial summary of H1 2016 interim report.
6
PROFIT AND LOSS ACCOUNT 1
1 Totals in this presentation may not sum due to rounding. 2 Excluding depreciation of $3.9 million (H1 2015: $4.5 million) and amortisation of $5.8 million (H1 2015: $4.9 million). 3 Excludes retroactive duties and associated charges of $2.7m (H1 2015: $3.5m)4 Excluding share benefit charges of $3.2 million (H1 2015: $2.4 million) 5 As defined in H1 2016 Interim report
$m H1 2016 H1 2015 % Change
Revenue 262.0 220.0 19%
Operating expenses2 67.5 60.8
Gaming duties3 30.2 21.8
Research and development expenses 15.8 16.4
Selling and marketing expenses 90.3 67.1
Administrative expenses4
14.1 13.0
Adjusted EBITDA3,4
44.1 40.9 8%
Depreciation and Amortisation 9.7 9.4
Share benefit charges, finance and other 3.9 1.0
Exceptional acquisition costs & retroactive gaming duty 2.7 10.5
Profit Before Tax 27.8 20.0 39%
Taxation 5.8 4.3
Profit After Tax 22.0 15.7 40%
Basic EPS5
6.1 ¢ 4.4 ¢ 39%
100
120
140
160
180
200
220
240
260
280
H1 09 H1 10 H1 11 H1 12 H1 13 H1 14 H1 15 H1 16
118
130
154
186
200
225 220
262
GROUP REVENUE
7
Revenue H1 2009 – H1 2016 ($m)
Revenue up 19% to $262m (H1 2015: $220m), driven by Casino, Sport and regulated markets
Impressive 14% half yearly CAGR since H1 2009
Like for like* growth at 22%, adjusting for lower Sterling**
$m
*Life-for-like: Adjusting H1 2016 figures to H1 2015 average exchange rates per month
**Sterling dropped as of mid-February when referendum was announced in UK, intensified further as of June 23rd when the decision to exit the EU was set
GROUP REVENUE
8
Quarterly Revenue Q1, Q2 ($m)
Outstanding quarterly increases despite adverse currency headwind
Q1 ($m) Q2 ($m)
45
55
65
75
85
95
105
115
125
135
Q210 Q211 Q212 Q213 Q214 Q215 Q216
61
79
92
97
111 112
132
45
55
65
75
85
95
105
115
125
135
Q110 Q111 Q112 Q113 Q114 Q115 Q116
69 75
94
103 114
108
130
49% 51%44% 45%
42% 40% 37%
51% 49%56% 55% 58% 60% 63%
15%
25%
35%
45%
55%
65%
75%
85%
95%
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016
Non-Regulated Regulated
Regulated markets* represents 63% of Revenue, consistently increasing over time per our strategy to
expand in regulated markets
UK and Europe (excl. UK) represent 87% of Revenue
UK up 18% and Europe (excl. UK) up 32%
GEOGRAPHICAL SEGMENTATION
9
Geographic Segmentation H1 2013 - H1 2016
H1 2015
H1 2016
$m
* UK, Spain, Italy, USA (non Social), Denmark, Romania and Ireland Sport
47%37%
11% 5%
UK Europe
(ex UK)
Americas ROW
46%41%
9% 4%
UK Europe
(ex UK)
Americas ROW
80
100
120
140
160
180
200
220
240
H1 09 H1 10 H1 11 H1 12 H1 13 H1 14 H1 15 H1 16
89 106
125
159
171
191
190
230
Revenue B2C H1 2009 – H1 2016 ($m)
Revenue up 21% to $230m (H1 2015: $190m)
Strong performance led yet again by Casino and Sport
Regulated markets continue strong growth
14.5% half yearly CAGR since H1 2009
REVENUE B2C
10
$m
40
60
80
100
120
140
H1 09 H1 10 H1 11 H1 12 H1 13 H1 14 H1 15 H1 16
56 59
69
83
94
108 105
137
Revenue Casino B2C H1 2009 – H1 2016 ($m)
Casino up 31% to $137m (H1 2015: $105m)
Growth is driven by enhanced offering, multi platform and outstanding CRM
Further contributors to the success included 777 brand launch, continued momentum of Slots in Spain and
additional new volume in Denmark
REVENUE CASINO B2C
11
$m
Revenue Sport B2C H1 2009 – H1 2016 ($m)
Stellar Sport progress, already 10% of Group Revenue, up 63% to $25m (H1 2015: $15m)
Revenue increase is a result of our strategic focus and marketing investment
New customer recruitment up 82%
REVENUE SPORT B2C
12
$m
0
5
10
15
20
25
H1 09 H1 10 H1 11 H1 12 H1 13 H1 14 H1 15 H1 16
2 3 3 3 4
8
15
25
Revenue Poker B2C H1 2016 vs. H1 2015 ($m)
No. 2 position in global poker rankings*, outperformed market in relative liquidity
Increased focus on Poker schedule optimisations, cross-selling to other products and exciting big tournaments
Poker Revenue down only 6% to $42m (H1 2015: $45m) despite challenging market and adverse currency
movement
REVENUE POKER B2C
13
* Source Pokerscout.com July 2016
0
5
10
15
20
25
30
35
40
45
50
H1 15 H1 16
45
42
Revenue Bingo B2C H1 2016 vs. H1 2015 ($m)
Revenue up 2% to $23m (H1 2015: $23m)
Optimisation efforts and further instant games content supported Bingo progress
Adjusting for currency we see Bingo turnaround continues with H1 2016 9% higher than parallel period
REVENUE BINGO B2C
14
$m
10
12
14
16
18
20
22
24
H1 15 H1 16
22.6
23.1
1.5
FX24.6
Increased marketing supports revenue growth, with 22% new player increase, and 19% Revenue increase
Marketing increase is driven mostly by Sport strategic investment and Casino growth
Investment is expected to drive further volume throughout the rest of the year
MARKETING COST
15
Marketing Cost H1 2016 vs. H1 2015
Marketing Costs Marketing Costs % of Revenue
$m %
-
10
20
30
40
50
60
70
80
90
100
H1 2015 H1 2016
67
90
0.0%
10.0%
20.0%
30.0%
40.0%
H1 2015 H1 2016
30.5%
34.4%
0%
20%
40%
60%
80%
H1 2015 H1 2016
27.6% 25.7%
7.4% 6.0%
30.5% 34.4%
5.9% 5.4%
9.9% 11.5%Gaming duties
Admin. Expenses
S&M expenses
R&D
Operating expenses
COST STRUCTURE
16
Cost as a % of Total Revenue H1 2016 vs. H1 2015 *
* Excluding share benefit charges, depreciation and amortisation, retroactive gaming duties and exceptional M&A costs
83.2%
Cost ratio to Revenue at 83% (H1 2015: 81%)
Lower operational cost
Increased ratio only in growth generating components (Marketing and Gaming duties)
81.4%
ADJUSTED EBITDA AND MARGIN Adjusted EBITDA up 8% to $44m (H1 2015: $41m)
Newly introduced gaming duties adverse impact
Adjusted EBITDA up 16% at constant currency*, with margin at constant FX 17.6%
Adjusted EBITDA H1 2016 vs. H1 2015
Adjusted EBITDA Adjusted EBITDA margin$m %
17
25
30
35
40
45
H1 2015 H1 2016
41
44
3
0%
5%
10%
15%
20%
25%
H1 2015 H1 2016
18.6% 16.8%
* See footnote 2 to the financial summary of H1 2016 interim report.
.
.
47
17.6%
High dividend payout ratio continues
3.8c per share interim divided
52% increase compared to H1 2012
DIVIDEND
18
DIVIDEND PER SHARE ($c) H1 2012 – H1 2016
$c
2.5
3.0
3.53.5
3.820%
40%40%
52%
0%
10%
20%
30%
40%
50%
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
4.0
H112 H113 H114 H115 H116
Dividend per Share % change over H1 12
BALANCE SHEET
19
$m 30-Jun-16 30-Jun-15
Non-current assets
Goodwill and other Intangible assets 159.3 159.1
Property, plant and equipment 8.9 13.7
Other non-current assets 2.0 2.2
Investments 1.5 1.7
171.7 176.7
Current assets
Cash and cash equivalents 143.0 141.6
Trade and other receivables 38.2 37.2
Total Assets 352.9 355.5
Equity
Share capital and share premium 6.3 4.9
Retained earnings and reserves 139.2 155.4
Total equity attributable to equity holders 145.5 160.3
Liabilities
Current liabilities
Trade and other payables 126.8 116.6
Customer deposits 78.6 76.6
Non-current liabilities
Deffered tax liabilities2.0 2.0
Total equity and liabilities 352.9 355.5
20
CASH FLOW STATEMENT
$m Period Ended 30 June H1 2016 H1 2015
Cash flows from operating activities
Profit before income tax 27.8 20.0
Share benefit charges 3.2 2.4
Depreciation and amortisation 9.7 9.4
Change in current assets and liabilities (17.6) 5.7
Other non cash adjustments (0.3) (2.7)
Cash generated from operations 22.8 34.8
Income tax paid (7.3) (4.1)
Net cash generated from operating activities 15.5 30.7
Purchase of property, plant and equipment (1.6) (2.8)
Internally generated intangible assets (5.9) (4.7)
Acquisition of intangible assets (1.9) (2.0)
Investment 0.3 (1.3)
Net cash used in Investing Activities (9.1) (10.8)
Issue of shares 0.9 0.4
Dividends paid (43.0) (41.0)
Net decrease in cash and cash equivalents (35.7) (20.7)
Cash and cash equivalents - beginning of period 178.6 163.1
Effects of currency translation 0.1 (0.8)
Cash and cash equivalents - end of period 143.0 141.6
ITAI FRIEBERGER, CEO | OPERATIONAL REVIEW
21
$267MH1 2016*
22
B2C | NEW DEPOSITORS
CASINO | BET
TOTAL | GROUP REVENUE
$200MH1 2013
CASINO | ACTIVES
SPORT | BETS
145%FEB 2016
100%JAN 2015
117%AUG 2015
137%DEC 2015
191%JUN 2016
100%JAN 2015
124%AUG 2015
131%NOV 2015
138%JUN 2016
SPAIN | DEPOSIT
$225MH1 2014
$225MH1 2015*
100%JUL 2015
125%OCT 2015
148%APR 2016
100%JAN 2015
139%DEC 2015
145%FEB 2016
163%JUN 2016
* Revenue before deduction of VAT
ITALY | NEW DEPOSITORS
100%JAN 2015
107%DEC 2015
182%FEB 2016
259%JUN 2016
113%AUG 2015
128%NOV 2015
136%JUN 2016
100%JAN 2015
THE ONLINE BUSINESS CYCLE
23
ACQUISITION Constant traffic optimisation continues, only profitable acquisition channels pursued
First Time Depositors H1 2014 – H1 2016
24
* H1 14 as base
.
.
40%
60%
80%
100%
120%
140%
H1 14 H1 15 H1 16
100%
122%
148%
50%
70%
90%
110%
130%
150%
170%
190%
210%
230%
250%
1 2 3 4 5 6 7 8 9 1011
12 1 2 3 4 5 6 7 8 9 1011
12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 910 11 12
1 2 3 4 5 6 7 8 910 11 12
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2010 2011 2012 2013 2014 2015 2016
Based on Jan 2010
FX effect
FUELING FUTURE GROWTH
B2C DEPOSIT TREND
* FX takes Jan 2015 – June 2016 Deposits at the average 2014 rates
25
ACTIVES Increased activity supports growth and retention efforts
Actives H1 2014 - H1 2016
26
* H1 14 as base
.
.
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%
H1 14 H1 15 H1 16
100%
111%
121%
100
120
140
160
180
200
220
240
260
280
H1 09 H1 10 H1 11 H1 12 H1 13 H1 14 H1 15 H1 16
118
130
154
186
200
225 220
262
REVENUE TREND
27
Revenue H1 2009 – H1 2016 ($m)
$m
CASINO
28
CASINO CONTENT
29
52%
59%
48%
41%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
H1 2015 H1 2016
In-house 3rd party
In House developed content continue to dominate our VS arena
Unique internally developed content continues to dominate our growing Casino platform
Offered alongside well known content, thus enabling a unique and rich experience that is constantly updated
Data presented is per Gross Profit ratios
UK Mobile Share B2C H2 2012 – H1 2016
MOBILE SHARE
30
UK Mobile Revenue Share UK Mobile Deposit Share
0%
10%
20%
30%
40%
50%
H2'12 H1'13 H2'13 H1'14 H2'14 H1'15 H2'15 H1'16
5%11%
19%
29%
37%
43%
50%
56%
0%
10%
20%
30%
40%
50%
H2'12 H1'13 H2'13 H1'14 H2'14 H1'15 H2'15 H1'16
4%
11%
20%
33%
40%
44%
50%
55%
POKER REINVENTED
31
POKER
32
33
UK
ROMANIA
DENMARK
IRELAND
SPAIN
GIBRALTAR
ITALY
REGULATED MARKETS
888.ES GGR TREND (Euro Based)
34
Launch of 888.es Spain Sport Launch Spain Slots Launch
0%
50%
100%
150%
200%
250%
300%
350%
400%
1 2 3 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2012 2013 2014 2015 2016
Bets
Poker Bet EUR Casino Bet EUR Sport Bet EUR
Revenue growth fueled by increased offerings and content
888.It BET TREND (Euro Based)
35
0%
50%
100%
150%
200%
250%
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2014 2015 2016Casino Bet EUR Sport Bet EUR
Sport launch driving additional volume
Italy Mobile Launch
Italy Sport Launch
SPORT
36
SPORT BETS
Sport bets continue to rise
37
Based on average daily Bets
50%
150%
250%
350%
450%
550%
650%
750%
850%
950%
1050%
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2012 2013 2014 2015 2016
EURO 2016
38
Euro 2016 football event drives uplift
Bets Margin Revenue Football Bets perEvent
23%
55%
91%100.2%
FTDs 24%
Actives 21%
INNOVATION
39
Bingo Bet Trend GBP 2012 – 2016
BINGO PLATFORM
40
1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6
2012 2013 2014 2015 2016
CASINO FLEX
41
-
2
4
6
8
10
12
14
16
18
20
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2014 2015 2016
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Daily Deposits (GBP)
# of brands
41
42
Positive trends across a healthy business
Organic growth remains our #1 priority
Continued investment in platform and content is paying off (again)
Existing regulation adaptations alongside new regulated markets
M&A represents incremental value opportunity
Strong current trading, remain confident of meeting expectations
SUMMARY
Q&A
43
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