full year 2013 results · 14 €m 2012 2013 cash from operating activities 112.8 200.0 cash (used...

FULL YEAR 2013 RESULTS 20 February 2014

Agenda

• ALAN JACKSON, CHAIRMAN HIGHLIGHTS

• RON HOFFMAN, CFO FINANCIAL REVIEW

• MOR WEIZER, CEO STRATEGIC REVIEW

Q&A

2

3

• First results as Chairman

• Impressive full year financial performance • total revenue up 16%

• adj. EBITDA* up 17%

• adj. net profit* up 26%

• Sale of stake in William Hill Online for £424m

• Total shareholder distribution for 2013 c.€188.5m • special dividend in sterling of £100 million (c.34.1 pence)

• recommended final dividend of €45.2 million (15.4 € cents)

• Interim dividend of €22.8 million (7.8 € cents)

* Excluding WHO SOP 2012/2013

Highlights

4

• ALAN JACKSON, CHAIRMAN HIGHLIGHTS

• RON HOFFMAN, CFO FINANCIAL REVIEW

• MOR WEIZER, CEO STRATEGIC REVIEW

Q&A

Agenda

Results summary (both including and excluding WHO SOP)

317.5

136.2 117.8

367.2

159.4 148.3

0

50

100

150

200

250

300

350

400

Total Revenue Adj. EBITDA* Adj. Net profit*

FY12

FY13

+26% +16%

186.7 177.5 168.3 166.4

WHO SOP FY12

WHO SOP FY13

+17%

5

Underlying results summary

316.2

138.2 120.2

350.9

154.7 144.7

0

50

100

150

200

250

300

350

400

Total Revenue* Adj. EBITDA*/** Adj. Net profit*/**

FY12

FY13

+12%

+20%

+11%

EXCL. WHO & ACQ

186.7 177.5 168.3 166.4

367.2

Constant £/€ rates +13%

+14%

+17% *Results exclude acquisitions made in the last 24 months

**Results exclude 3.5 months WHO SOP for 2013 & 12 months for 2012

6

7

317.5

367.2

14.2

20.8 14.8

200

220

240

260

280

300

320

340

360

380

400

FY12 Existing New Business* Acquisitions FY13 Revenue

€ M

illio

ns

7

7% from new business

4% from existing, 7% on a LFL basis

Organic Growth

5%

*New Business defined as new licensees or new products that were launched in the past 18 months

Revenue bridge

8

2.2

10

.8

17

.8

10.6

18

.0

10

6.3

15

1.7

4.4

12

.3

14

.7

17

.1

18

.5

111

.1

18

9.2

0

20

40

60

80

100

120

140

160

180

200

€ M

illio

ns

2012 2013

• Casino up 25%

• Services up 5%

• Bingo up 3%

• Sport up 61%

• Poker down 18%

• Videobet up 14%

Like for like Services in line

Bingo up 7% on a constant currency basis

*On a pound sterling constant currency basis

Videobet up 18% on a constant currency basis

Revenue breakdown

9

151.7

189.2

21.0 8.6

3.9 3.9

100

110

120

130

140

150

160

170

180

190

200

FY12 Core Mobile LIVE Premium Content

FY13

€ M

illio

ns

FINANCIAL REVIEW

9

*Growth of each segment

+212%* +16%*

+33%*

+19%*

+14%**

+5%**

+3%** +3%**

**Proportion of overall casino growth

Casino breakdown

10

€m 2012 2013 %

Casino 4.1 12.7 212%

Sports 9.1 14.7 61%

Bingo 0.5 2.0 297%

Total 13.7 29.4 115%

Mobile growth

11

10

32

12

41

17

41

0

5

10

15

20

25

30

35

40

45

Licensees > €4.0m revenues Licensees > €1.0m revenues

FY11 FY12 FY13

11

FY12 FY13

Top 2 licensees 40% 35%

Top 5 licensees 61% 54%

Top 10 licensees 73% 69%

Top 15 licensees 79% 77%

Customer concentration

12

0

100

200

300

400

FY12 FY13

Adj. EBITDA margin excl. WHO

Adj. EBITDA

TotalRevenue

0

100

200

300

400

FY12 FY13

Adj. EBITDA margin excl. WHO and PokerStrategy

Adj. EBITDA

TotalRevenue

42.9% 43.1%

42.9% 43.4%

Adj. EBITDA margin

13

€m 2012 2013

Adj. operational costs 181.3 207.8

Revenue-driven costs 36.2 11.4% 37.9 10.3%

Adj. operating expenses exc. revenue-driven costs

145.1 169.9

Employee-related costs 99.9 68.8% 111.0 65.3%

Administration and office costs 15.5 10.7% 17.7 10.4%

Travel, exhibitions & marketing 6.8 4.7% 8.9 5.2%

Cost of services 11.7 8.1% 17.4 10.3%

Other 11.2 7.8% 14.9 8.8%

Total 100% 100%

Analysis of costs and expenses

14

€m 2012 2013

Cash from operating activities 112.8 200.0

Cash (used in)/provided by investing activities (128.9) 343.0

Payment of deferred consideration (Mobenga and PTTS) (118.0) (85.8)

PokerStrategy acquisition - (37.7)

Other (25.1) (5.4)

Acquisition of subsidiaries (net of cash acquired) (143.1) (128.9)

Net proceeds from sale of WHO stake - 492.5

Net change in available for sale investments (7.7) 13.0

Other 21.9 (33.6)

Cash used in financing activities (27.8) (136.5)

Dividends (70.4) (67.9)

Repayment of bank borrowings (33.8) (69.2)

Proceeds from bank borrowings 75.0 -

Other 1.4 0.6

Closing cash 120.9 527.4

Summary cash flow

15

Total equity

€921.0m (31 Dec 2012: €514.2m)

Total assets

€1.07bn (31 Dec 2012: €784.5m)

Cash balance

€527.4m (31 Dec 2012: €120.9m)

• Debt free at year end • No deferred consideration from January 2014 onwards • Forex gains on cash held in Sterling

Balance sheet highlights

16

• ALAN JACKSON, CHAIRMAN HIGHLIGHTS

• RON HOFFMAN, CFO FINANCIAL REVIEW

• MOR WEIZER, CEO STRATEGIC REVIEW

Q&A

Agenda

Highlights

• Completion of 29% stake in WHO

• LAD flagship deals - migration on target

• Acquisition of PokerStrategy

• Geneity gaining traction ahead of World Cup

• Accelerated rollouts of mobile solutions

• Convergence of land-based/online creating multi-channel opportunities

17

IMS

• IMS becoming industry standard infrastructure enables maximum returns on operator’s marketing budgets creates the ultimate player journey

• Advanced tools provide increased visibility through the player acquisition process

• Combination of IMS and new advanced front end capabilities allow automation and personalization

• Roll out of Game Advisor BI system

18

Casino

• Continued strong organic growth led by LIVE and mobile

• Mobile NGM technology streamlines development work and rollout of new games on all platforms

• Number of mobile game to be increased through 2014

19

Bingo

• Strong launch programme through 2013

- launched Spanish network

- new licensees – including media brands

• New branded mini games

• Mobile bingo improved

- tablet version launched at ICE

• Open platform launched

20

Sport

• Industry transitioning to new technologies

• Unique multi-channel (retail/online), cross-platform (online/mobile) fully integrated solution

• Geneity recognised as best technology

• Mobile continues to outperform

• Significant opportunities in regulated markets

21

Poker

• Acquisition of PokerStrategy

• Launch of Betclic and Betfair on iPoker

• Launch of iPoker on mobile using multi-platform support (HTML 5, Native iOS and Android)

• Mobile poker iOS app approved in France

• Launch of the most advanced tablet poker

22

Videobet

• UK market leader

• 2,800 machines added in 2013

• New jurisdictions – non-UK up to 18% of Videobet revenue

• Significant test progressing

• Convergence of retail and online

23

Mobile

• Mobile royalties (non-sport) grew 220%

• Making significant progress

- NGM delivering

• Mobile Hub creates cross-product opportunity driven by tablet applications

- single application incorporating single account & wallet

24

Industry dynamics

• New regulated markets expected within 18- 24 months

• Co-operation with regulators

• Convergence between retail and online creates multi-channel opportunity

• Operators want to offer a better player journey and experience

• Operators put more focus on CRM and player value

25

Building blocks

• As a B2B supplier we MUST have new products under development at all times

• Social Gaming

- soft launch Q4/13

- full launch expected H1/14

• Casual Gaming

- internal initiative led by industry experts

- complements social gaming

26

Building blocks

• Financial Betting

- developed by market leading professionals

- appeals to operators

- accelerating growth

• Virtual Sports

- developed internally

- cutting edge

• Videobet

27

Structured agreements

• Ladbrokes landmark agreements

• Flexible approach from outsourced turnkey through BOT model (Built, Operate, Transfer) to full JV

• Agreements always come with an extended software agreement

• Strongest pipeline ever – some in advanced stages – will lead to significant growth

• 100% regulated markets

28

Growth opportunities

• Expand licensee base

- organic growth by improving products and platforms

- new licensees/jurisdictions

• Further JVs/structured agreements – Mexico, Italy, Holland, South Africa …

• New products – social, casual, financial betting, virtual sports

• M&A

29

M&A

• Targeting regulated markets

• High cash generation/attractive multiple

• Core or highly synergistic

• Product and content are key

• Continue to seek transformational, significant opportunities as well as bolt-on acquisitions

30

Current trading

Playtech has made a strong start to 2014, with daily average revenues for the first seven weeks of 2014 up over 15% on Q1 2013 (up over 8% after excluding the acquisition of PokerStrategy) and over 4% on Q4 2013

31

32

• ALAN JACKSON, CHAIRMAN HIGHLIGHTS

• RON HOFFMAN, CFO FINANCIAL REVIEW

• MOR WEIZER, CEO STRATEGIC REVIEW

Q&A

Agenda