company presentation - intralot.com · april 2018 | public | slide 2 of 40 disclaimer by reading or...

CompanyPresentation

April 2018

April 2018 | Public | Slide 2 of 40

DisclaimerBy reading or attending the presentation that follows, you agree to be bound by the following limitations.This presentation has been prepared by INTRALOT S.A. and its subsidiaries (the “Company” or “We”) solely for informational purposes and does not constitute, and should not be construed as, an offer to sell or issue securities or otherwise constitute an invitation or inducement to any person to purchase, underwrite, subscribe to or otherwise acquire securities in the Company. This presentation is intended to provide a general overview of the Company and its business and does not purport to deal with all aspects and details regarding the Company.For the purposes of this disclaimer, the presentation that follows shall mean and include the slides that follow, the oral presentation of the slides by the Company or any person on its behalf, any question-and-answer session that follows the oral presentation, hard copies of this document and any materials distributed in connection with the presentation. By attending the meeting at which the presentation is made, dialling into the teleconference during which the presentation is made or reading the presentation, you will be deemed to have agreed to all of the restrictions that apply with regard to the presentation and acknowledged that you understand the legal regulatory sanctions attached to the misuse, disclosure or improper circulation of the presentation.The Company has included non-IFRS financial measures in this presentation. These measurements may not be comparable to those of other companies. Reference to these non-IFRS financial measures should be considered in addition to IFRS financial measures, but should not be considered a substitute for results that are presented in accordance with IFRS.The information contained in this presentation has not been subject to any independent audit or review. A significant portion of the information contained in this presentation, including all market data and trend information, is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be accurate. Our internal estimates have not been verified by an external expert, and we cannot guarantee that a third party using different methods to assemble, analyse or compute market information and data would obtain or generate the same results. We have not verified the accuracy of such information, data or predictions contained in this presentation that were taken or derived from industry publications, public documents of our competitors or other external sources. Further, our competitors may define our and their markets differently than we do. In addition, past performance of the Company is not indicative of future performance. The future performance of the Company will depend on numerous factors, which are subject to uncertainty, including factors which may be unknown on the date hereof.Each attendee or recipient acknowledges that neither it nor the Company intends that the Company act or be responsible as a fiduciary to such attendee or recipient, its management, stockholders, creditors or any other person. By accepting and providing this document, each attendee or recipient and the Company, respectively, expressly disclaims any fiduciary relationship and agrees that each attendee or recipient is responsible for making its own independent judgment with respect to the Company and any other matters regarding this document.Certain statements contained in this presentation that are not statements of historical fact, including, without limitation, any statements preceded by, followed by or including the words “targets,” “believes,” “expects,” “aims,” “intends,” “may,” “anticipates,” “would,” “could” or similar expressions or the negative thereof, constitute forward-looking statements, notwithstanding that such statements are not specifically identified. Examples of forward-looking statements include, but are not limited to: (i) statements about future financial and operating results; (ii) statements of strategic objectives, business prospects, future financial condition, budgets, projected levels of production, projected costs and projected levels of revenues and profits of the Company or its management or boards of directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and outside of the control of the Company. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. We have based these assumptions on information currently available to us, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do not know what impact any such differences may have on our business, if there are such differences, our future results of operations and financial condition, could be materially adversely affected. You should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which such statements are made. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

1. Company Overview

2. Investment Highlights

3. Financial Summary4. Appendix

AGENDA

CompanyOverview


INTRALOT’s Global Presence at a Glance1

21,600 Retailer terminals

28,100 VLT Systems

11,600 Horizon Monitors

200 Self-Service Terminals

3,400 Retailer Terminals


600 Self-Service Terminals

U.S.A.Europe

72,500 Retailer terminals


Oceania

Asia

AfricaSouth

America



300,000

INTRALOT Solutions

WORLDWIDE

52

Jurisdictions

29

Countries

90

Contracts

c. 5,100

Employees2

1.1 bn

FY17 Revenues

INTRALOT is a leading supplier of integrated gaming and transaction systems, innovative game content, sports betting,

and interactive gaming services to state Lotteries worldwide

1 Company information, as of 12/31/20172 Of which c. 3,100 in subsidiaries and c. 2,000 in associates


14,600 VLT Systems

7,400 Self-service Terminals


FY17 Revenue Breakdown

27%

Americas

RoW

21%

Europe 52%

Retailer: Integrated point of sale solutions

incorporating multimedia and touchscreen

functionality for instant lottery and online

gaming products

VLT Systems: Video Lottery Terminal

monitoring systems that allow monitoring

patrons’ betting activity

Self-service: Interactive self-service gaming

solutions that deliver real time content and

gaming products across multiple categories

Horizon Monitors: Intelligent multimedia

content management system and delivery

system. Digital content and signage delivery

to shops, screens and retail terminals


INTRALOT provides customized software and hardware services to state and state-licensed lottery and gaming organizations worldwide

INTRALOT — A Global Gaming Technology and Service Company

1 GGR is defined as total revenue net of payout of winnings

Typical contract structure

Multi-year with renewal options

Fixed percentage of wagers


Multi-year with renewal options

Fixed percentage of wagers


Open-ended market licence

Revenues generated through wagers

Provision of hardware, software and telecom

solutions to state or state-licensed operators

Installation, maintenance and support

Day to day operations management

Includes marketing, POS optimisation, risk

management

Operation and control over every aspect of the

gaming offering

Licensed Operations Management Contracts Technology

%FY

17

EB

ITD

A

36%27%37%

40%

%FY

17

GG

R1

20%40%

OUR THREE PILLARS


Broad and Well-Diversified Suite of Products

1 GGR is defined as total revenue net of payout of winnings

34 jurisdictions

400+ games

in 70,000 POS

12 jurisdictions

One of the largest

sportbooks

globally

More than 20

jurisdictions

Support and

maintenance of

central IT system

and terminals

4 jurisdictions

40,000+ VLTs

7 jurisdictions

Pari-mutuel and

Fixed-odds

betting on horse,

greyhound and

virtual racing

31.6% 55.0% 8.1% 2.9% 2.4%

%FY

17

Reven

ue

Lottery GamesIT Products

and ServicesVLTs / AWPs RacingSports Betting

36.0% 41.6% 15.5% 5.5% 1.4%

%FY

17

GG

R1

More than 30% of our Sports Betting

GGR stems from the Interactive

Market


INTRALOT Certifications and MembershipsState-of-the-Art management systems, continual improvement and recurrent industry recognitionfor excellence have allowed INTRALOT to establish its credibility and build trust with all key stakeholders

The Company maintains the highest security

certification

INTRALOT is the first international vendor in the

gaming sector that has been certified according

to the WLA Security Control Standard in 2008

Moreover, the Company has been certified with the

ISO 27001 for its (ISMS) Information Security

Management System and maintains the ISO 20000,

ISO 9001 and ISO 14001 certifications, on IT service

management, quality management and

environmental management respectively.

In mid-March, INTRALOT Group proudly announced

that it is one of the first companies in the gaming

industry globally to be certified under the ISO 37001

standard for anti-bribery management systems

1st Vendor to Achieve WLA SCS

Certification

1st Vendor to Achieve ISO 20000

Certification

21 operations certified as per both

WLA (SCS) and ISO 27001 security

certifications.

Leading member in all major Lottery and Gaming Associations globally:

Platinum

Contributor

Premium

Partner

MemberGold

MemberGold

Sponsor

Star

Contributor

As member of the UN Global Compact, INTRALOT is a

global corporate citizen committed to sustainable

development, and is an active proponent of the

principles of responsible gaming, possessing the WLA

Responsible Gaming Framework Certificate

Reliable

Responsible

RESPONSIBLE & RELIABLE PARTNER HIGHLIGHTS

Top

Sponsor

InvestmentHighlights


Key Investment Highlights

Defensible Market Position with Significant Barriers to Entry

History of Innovation and Robust Development

Diversified and Highly Visible Recurring Revenues Secured by Long-term Contracts

Track Record of Successful Extensions Across Contract Portfolio

Shift to Asset-Light Model and Stronger Cash Flow Generation

Attractive and Stable Industry with Sustainable Growth

Experienced Management Team Delivering Results

1

2

3

4

5

6

7


(Global GGR / CAGR, €bn / %) (Global GGR / CAGR, €bn / %)

Global Gaming Exhibit Growth Through the Cycle

1 Includes Casino, Gaming Machines and Bingo/ Other Gaming

Source: Η2GC Published January 2018

Global Market per Product Split

By Product

Global Market per Channel Split

By Geography

€382bn2017E Global GGR

Attractive and Stable Industry with Sustainable Growth2017E Gross Gaming Win

7%

92%93%

10%

90%92%

10%

90%

8%8%13%

’12A

346

’15A

359 367364

’13A

356

’14A

+2.3%+2.0%

’22F

427

87%

13%11%

87%

11%

88%89%

12% 12%

89% 88%

382

’21F’18F’16A

401392 410

’20F

419

’19F’17E’16A

367

’15A

58%

27%

14%

28%

14%

58%

382359

+2.0%

’22F

16%

+2.3%

427

27%

15%15%

58%

’17E

392

’18F

27%27%

’19F

401

58%

’20F

15%

410

58% 57%

27%

419

’21F

58%

15%

27%

346

12%

62%

26%

62%

’12A

12%27%

14%

59%

364

’13A

13%

356

26%

’14A

27%

61%

2.3%

Oceania, 5.0%

30.3%N America

Lat Am & the Caribbean 26.4%

Africa, 1.0%

Europe

Asia / ME35.0%

34.0%

Gaming Machines

21.2%

Casino14.3%

Betting

3.3%

27.2%

Bingo/Other Gaming

Lotteries

BettingLotteries All Other1 Land-basedInteractive

CAGR 17E-22F

Interactive: 6.8% (including mobile with CAGR of 13.2%)

Land-based: 1.7%

Europe expected to lead interactive penetration with 27.4% in 2022 versus a global average of 13.2%

1a


Regulatory and Industry Trends – Overview

Offers a personalized player

experience

Leading partner for organizations that

want to compete in a regulated

interactive competitive environment

Robust, efficient and versatile gaming

platform that converges land-based and

interactive channels

Omni-Channel Approach

Offers extensive business support for

optimal customer experience

Intralot’s PositionKey Sector Trends

Global regulation changes, driven by country and state budget deficits and

increased demands for social welfare spending fuel:

Liberalizations of gaming markets, mainly Internet and mobile markets

Privatizations of state owned lotteries

Crackdowns on illegal gaming

New business models focus on growing consumer demand for entertainment

Personalized game offering and content

Customer analytics

An ‘All-in-one’ gaming platform delivering a unified customer experience

Convergence of land based and interactive channels

Mobile is now the primary access point to online retail for most consumers

Major international competitors shift focus to VLT market and achieving

synergies

Regulation Initiatives

End-to-End Player Experience

Technology Convergence

Distribution Channels

Competition

1b


Leading Market Position in 3 out of 63

countries with Licensed Operations

Diversified portfolio with 90 contracts and

licenses, with presence across 52 jurisdictions in

29 countries

c.€24 bn wagers handled in FY17

5,100 people employed worldwide1

Scale and Market Leadership…

Source: INTRALOT1 Of which c. 3,100 in subsidiaries and c. 2,000 in associates2 INTRALOT, 2013 -2016 (Sample of 28 opportunities)3 The currently suspended license in Cyprus is not included in the total count

Cancelled/ Pending

Processes that did not

result to an award yet or

have been cancelled

Probability of

Successful Contract

Acquisition for any

Given Bidding

Process (excluding

pending/cancelled

processes)

42%

Defensible Market Position with Significant Barriers to Entry

…Creates Significant Incumbent Advantages

50%

14%

36%

Renewed

90%

Not Renewed

10%

Technology & Management Contracts Won Globally2

% of U.S. Contracts Renewed or Extended (Since 2008)

2

Lost

Processes that were awarded

to another bidder

Won

Processes that we submitted

the winning offer


History of Innovation and Development

Supported by On-going Development and Strategic Partnerships

169 Gaming Technology Patents12 Consecutive years on EU’s Industrial

R&D Investment Scoreboard

Management of registeredplayers at all channels

Automated Management

Personalized offers

Analysis of players attributes and behavior

Increase of lifetime value

Management of retailers for best player experience at the retail shop

Reward and motivation programs

Management of resources and automation of the supply chain

Bespoke trading andsportsbook solutionsManaged applicationsupport service

Highly scalable platform

Modularity of platformenables customer flexibility

Advanced, modular platform designed to drive INTRALOT forward

Future proof architecture

Omni-channel approach for mobile, retail and online

3rd party application ready

Superior technology platform uniquely positions INTRALOT to capture opportunities in newly regulated geographies,

new products and Omni-channel offerings

Lotos10 Terminal Solutions

History of Innovation and Robust Development

c.300,000 retail lottery solution deployed globally

Full range of retail and self-service solutions

Advanced terminals incorporating touchscreen, tablet and digital camera technologies

3

Over €45m spent on R&D since 20141

1 Includes 2014, 2015 and 2016 figures on a continuing operations basis


Well diversified portfolio with balanced presence in developed (through new sales

channels) and developing markets (high GDP growth)

Majority of revenues, cash resources and debt obligations outside Greece, thereby

mitigating individual sovereign risk

Average sovereign rating of operations in the high BBB/Baa to low A area

Contracted Recurring Revenue (Without Extension Options)

FY17 EBITDA by Geography1

7 licensed operations in 62 countries with leading market position

in the majority of them

Unique operational model in countries allowing INTRALOT to micro tailor

products for distribution

Competition (where applicable) is local—no global competitor in licensed

operations markets

76% of revenues secured through multi-year contracts or

renewable licenses until 2022

Average contract duration of our US operations of 7.1 years

Taking into consideration the extension options of our contracts,

revenue visibility increases to 79% (until 2022)

100%94%

85% 82% 81%76%

2017A 2018E 2019E 2020E 2021E 2022E

Well Diversified Long-Term Contracts Provide Stability and Visibility4

3%

Other

New Zealand 2%

Netherlands

4%

United States

6%

3%

Malta

9%

Bulgaria15%

Morocco

Turkey

8%Azerbaijan

Australia

20%

11%

19%

Argentina1 Countries with negative EBITDA have been excluded from the chart2 The currently suspended license in Cyprus is not included in the total count


2018

2018/2019

2021

2022

2022

2024

2025

2026

2027

% of FY17

GP1,2

Morocco

Turkey (Inteltek)

New Zealand

Malta

Argentina (13 Contracts)

Azerbaijan

Greece (Hellenic Lotteries)

US (13 Contracts)4

Bulgaria

Open

Market

License

Major Contract Expiry (Without Renewal Options)

Contract type

12%

6%

6%

9%

11%

1%

19%

1%

Management

Contracts

Management

Contracts

Technology

Technology

Technology

Licensed

Operations

Licensed

Operations

Licensed

Operations

Key Recent Developments 42% win rate in international tenders (2013-2016)

Successfully entered and gained market share on the US market

Strong Track Record of Contract Renewals and Wins

2017

Successful launch of our 10-year contract with the State Lottery

organization in Chile

3-year extension with OPAP, specifically in the numerical lotteries

games (OPAP renewal option for an additional 2 years)

1-year extension with MDJS (Morocco) up to December 2019

Ohio extended through 2027

Arkansas extended through 2026

Vermont extended through 2020

10-year contract with Idaho, renewed to 2027

2018

Wyoming extended through 2024

INTRALOT signed a contract to become the Illinois Lottery provider for

a 10-year term

1 Excluding countries with negative EBITDA/IFRS Gross Profit, respectively2 Management estimation incorporating direct expenses and apportionment of indirect expenses related to the project/country3 Contract with SGLN currently expires on December 20184 Intralot SC contract has expired in March 2018

Track Record of Success Across Portfolio of Long-Term Contracts5

% of FY17

EBITDA1,2

Licensed

Operations

3%

Greece (OPAP) Technology

15%

11%

6%

4%

9%

9%

2%

8%

1%

8%

14%

4 U.S.LotteryExtensions


25 29 24 23 22

4242

38 36 35

71

2015PF 2017PF

57

2016PF

62 60

2015A

67

2014A

11.4%

7.3%9.8%7.3%

12.4%

€ 75

€ 65

€ 55

€ 45

€ 35

€ 25

€ 15

€ 5

(€ 5)

Two Pillar Approach to Asset-Light Model

New Platform Technology Local Market Partnerships

Proprietary modular LOTOS platform allows scalable micro tailored solutions

without significant customization of core systems

Efficient design that is adaptable to in-house or 3rd party modules

Track record of successful joint ventures and partnerships across the world

Partnering with well placed and capitalized local partners syndicates financial

and operating risk while generating synergies and efficiencies

Particular focus on leveraging partners in emerging markets

FY 2017A Total Cost Breakdown Less Capital Intensive Business Model

(Net of Winnings Payout)

1 Excludes Capex and GGR attributable to discontinued

operations in Italy, Peru, Jamaica, Russia, and Slovakia2 Excludes €11.7m of payments for AMELCO betting platform

6

9.0%

7.0%

5. %

3.0%

1.0%

1,2-

%Capex / GGR

%Maintenance Capex

Discretionary Capex

1

Game Tax & Fees14%

Agent Commissions

15%Direct CoS6%

Other Variable21%

HR Costs26%

Other Fixed18%

1


Country INTRALOT stake Contract type Product Key Local PartnerValue INTRALOT

Brings to the JVs

FY17 EBITDA

Contribution

Inteltek 45.00% Management contract Sports Betting Turkcell WLA/System/RM 14%

Eurofootball Group49.00% + option for

additional 2.00%Licensed operation Sports Betting Eurosadruzie Ltd. WLA/System 13%

Azerinteltek 22.95% Licensed operation Sports Betting Turkcell WLA/System/RM 12%

Tecno Accion Group 50.01%

12 facilities management (IT)

contracts with state lottery operators

& 1 licensed operation

Lottery / Sports Betting HAPSA and Casino Club WLA 10%

Bilyoner 50.01% Management contract Sports Betting Local Businessman WLA 9%

Eurobet Group49.00% + option for

additional 2.00%Licensed operation Lottery Games Eurobet partner Ltd. WLA 4%

Total 62%

Strong & Established Partnerships

Attractive point of entry in a given market, with limited capital expenditure requirements compared to full-scale M&A

Opportunity to establish strategic partnerships with local players which offer substantial market knowledge, well-established sales network and recognized brand names

Ability to invest in companies in which local partners see upside and are therefore willing to retain a controlling stake in

Key Partnerships

6b


Approximately 62M in population coverage (~19%)

26% market share (Lottery contracts in 10 states + DC)4

Average US contract maturity: 7.1 years

Headcount at YE 2017 of approximately 530

A

L

MLO S

N

WV VAMD DE

NC

SC

GA

NM

CA

TX

AR

WY

UTNV

OK

NE

CO

OR

MO

TN

KSIN

KY

IA

MI

IL

ID WI

OH

NY

AZ

PA

VE NH

DC

INTRALOT

CT

RI

Balkans2 Latin America RoW Rest of Europe EU2 North America Oceania

Experienced Management Team Delivering Results

SD

MTWA NDMN

ME

WELL ESTABLISHED PLAYER IN THE IT TO LOTTERIES US MARKET3

EBITDA EVOLUTION BY GEOGRAPHICAL AREA1

Management has achieved

Revenue and EBITDA growth

despite changes in gaming

regulatory landscape

Contribution to EBITDA from

areas with higher credit rating

has gradually increased from

28% to 42% in the last 6

years, in line with our strategy

INTRALOT is one of the global leaders in technology for the gaming industry, with leading positions in many

countries

1 Company Information, presented on a total operations basis (includes continued and discontinued operations)2 EU excludes countries that have been classified as “Balkans”. “Balkans” defined as Greece, Turkey, Bulgaria, Croatia, Romania, Serbia, and Cyprus3 Map depicts the Online IT lottery market landscape only (i.e. does not reflect instants or any other contracts)4 Intralot also offers VLT monitoring services in GA and OH as well as Cooperative Services (CSP) in Ohio; Intralot SC contract has expired in March 2018

48%30%

21%

12%

2%

16%

1%18%

10%

9%

21%

1%11%

€154 €172

2011A 2017A

28%42%

7

€m

INTRALOT Inc. (US)

Established Dec 2001

A

L

MLO S

N

WV VAMD DE

NC

SC

GA

NM

CA

TX

AR

WY

UTNV

OK

NE

CO

OR

MO

TN

KSIN

KY

IA

MI

IL

ID WI

OH

NY

AZ

PA

VE NH

DC

INTRALOT

CT

RI

SD

MTWA ND MN

ME

FL

ALMS

NC

SC

GA

NM

CA VA

TXLA

AR

WY

UTNV

OK

NE

CO

OR

MOWV

TN

KSKY

IA

SD

MI

INIL

ID

MTWA ND

WI

MN

ME

OH

NY

AZ

NJMD

PA

DE

VE

NH

DC INTRALOT

CT

RI

INTRALOT IGT SGI NORTHSTAR NJ NO LOTTERY

Financial Summary


Consolidated Income Statements for FY17 and 4Q17

(in € million) FY17 FY16 % Change 4Q17 4Q16 % Change

Revenues (Turnover) 1,104.2 991.5 11.4% 309.5 278.7 11.1%

Technology, Management & Rest Contracts 354.9 336.6 5.4% 106.7 88.4 20.7%

Licensed Operations (Payout related) 749.3 654.9 14.4% 202.8 190.3 6.6%

Payout (%) 70.1% 70.9% -0.8pps 68.8% 71.7% -2.9pps

GGR 579.2 527.2 9.9% 169.9 142.3 19.4%

nGGR 458.4 417.8 9.7% 137.2 111.4 23.2%

Gross Profit 241.9 203.8 18.7% 78.5 58.0 35.3%

Gross Profit Margin (%) 21.9% 20.6% +1.3pps 25.4% 20.8% +4.6pps

EBITDA 171.5 162.5 5.5% 48.4 48.4 -

EBITDA Margin (% Sales) 15.5% 16.4% -0.9pps 15.6% 17.4% -1.8pps

EBITDA Margin (% GGR) 29.6% 30.8% -1.2pps 28.5% 34.0% -5.5pps

EBT 10.3 -7.6 - -14.7 -17.5 -16.0%

EBT Margin (% Sales) 0.9% -0.8% +1.7pps -4.7% -6.3% +1.6pps

NIATMI from Continuing Operations -58.6 -74.2 -21.0% -35.9 -39.0 -7.9%

NIATMI from Total Operations -53.4 0.9 - -21.4 -0.9 -


Financial Performance per Business Activity Segment

Consolidated Financial Statements for the 12 Months

Ended December 31th, 2017

Consolidated Financial Statements for the 12 Months

Ended December 31th, 2016

in €m B2B/ B2G B2C

Supporting

Functions &

Centers of

Excellence

Total B2B/ B2G B2C

Supporting

Functions &

Centers of

Excellence

Total

Revenues 346.1 754.6 3.5 1,104.2 326.6 662.9 2.1 991.5

Services / Merchandise 346.1 5.3 3.5 354.9 326.6 7.7 2.1 336.4

Wagers - 749.3 - 749.3 - 654.9 - 654.9

Net Drop - - - - - 0.2 - 0.2

GGR 346.1 229.5 3.5 579.2 326.6 198.6 2.1 527.2

GGR (% Revenue) 100.0% 30.4% 100.0% 52.5% 100.0% 30.0% 100.0% 53.2%

EBITDA 143.52 62.6 (34.7) 171.5 139.82 59.5 (36.8) 162.5

EBITDA (% GGR) 41.5% 27.3% 29.6% 42.8% 30.0% 30.8%

Net CAPEX (Paid)1 22.0 1.6 44.5 68.0 25.8 -0.2 31.8 57.3

1 Excluding contribution from discontinued operations in Italy, Peru, Jamaica, Slovakia, and Russia2 Include apportionment of indirect expenses related to Intralot SA projects; €11.3m in 2016 and €12.4m in 2017


Financial Summary

EBITDA

Adjusted for the effects of discontinued operations in Italy, Peru, Jamaica,

Slovakia, and Russia

Revenues / GGR

EBITDA

Gross EBITDA Margin1

Net EBITDA Margin2

1 Defined as EBITDA/Revenues2 Defined as EBITDA/GGR

(€m)

(€m)

171163149177175

19.0% 18.3%

29.7%

9.3% 16.8%

2014A

9.5%

2015A 2015Adj.

29.6%

15.5%

2016Adj.

30.8%

2017A

16.4%

+5.5%

Revenues

GGR

1,104992

889

1,9151,853

579527503

966923

2014A 2015A 2015Adj. 2016Adj. 2017A

+11.4%

+9.9%


2014A 2015A 2016A 2017A1

Financial Summary (Cont.)Operating Cash Flow and Capex

FY17 Cash Flow Available for Debt Service2

(€m)

1 Excludes €11.7m of payments for AMELCO betting platform2 Excluding contribution from discontinued operations in Italy, Peru, Jamaica, Slovakia, and Russia

Discretionary Capex

Maintenance Capex

Cash flow available for

debt service and

investments

(€m)

Operating CF

25

42

67

153

29

42

71

114

27

39

65

168

22

41

154

63

83

1171

34

22

34

Dividends Cash Flow Available

for Debt Service

Change in Working CapitalEBITDA Income Tax Maintenance Capital

Expenditures

-8.4%


High Yield Bonds

€250.0m Bond Loan 6.75% – September 2021

€500.0m Bond Loan 5.25% – September 2024

Term Loans

€15.0m Term Loan – Nomura, up to December 2022

$8.0m Term Loan – BAML, April 2022

RCF

$20.0m RCF – BAML, 1 year

RCFs (not drawn)

€40.0m RCF – Piraeus, up to December 2022

€40.0m RCF – Eurobank, up to December 2022

Rating Agencies Rating Outlook 2018 Review Status

B Negative Completed

B+ Stable Pending

B1 Negative Pending

Capital Structure

500

250

20242022 202520232019 202120202018

Current Debt Maturity Profile

Drawn amount (€m)

Bond

Existing Main Facilities Breakdown

Following the successful bond refinancing in September last year,

INTRALOT has successfully extended its debt maturity profile

INTRALOT has no material debt maturity upcoming over the next

two years

511495478

381403

2.1x 2.2x

2013A

3.2x

2014A 2017A

2.8x

2015A 2016A

3.0x

NET DEBT1 AND NET DEBT / EBITDA2

€m, #

Net Debt

Net Debt/EBITDA

Rating Agencies

1 Net debt calculated as Long-term debt plus Short-term debt and current portion of long-term debt plus

Financial Leases less Cash and cash equivalents2 Calculated as Net debt divided by LTM EBITDA


Financial Policy

Maximum leverage tolerated Contain net leverage at current levels post US expansion investment

Cash, liquidity and debt

management

Maintain strong liquidity at all times

Cash balance of €238.0m as of December 31 2017

Currently, €95.0m of undrawn committed credit facilities

Cash in Greek banking system limited to less than 10.0% of total deposits1

CAPEX

New strategy expected to result in lower level of CapEx from 2019 onwards, maintenance CapEx in line

with historical levels Majority of CapEx to be deployed towards extending and securing new U.S. contracts

– Increasing contribution from the more stable and higher margin operations

Acquisition strategy No material acquisitions contemplated in the medium term

Dividend policy No dividend expected until target leverage is achieved

Currency and risk

management

Surplus cash converted from local currencies into EUR or USD (> 50% of deposits); 70% of total Group

Cash is held in “hard” currency (i.e. EUR or USD)

FX risk mitigated via Forwards

1 More than 50% located in UK & European Union Banks


Alternative Selected Financial Metrics

FY17 Pro-Forma Cash Flow – Shareholders of the Parent View

€m

64.8

39.715.7

19.8

39.5

44.6 34.9 23.9

85.3

1.5

Cash & Cash

Equivalents,

2017

+28.0

Net Loan

& Leases

Movement

Refinancing

Fees &

Expenses

Disposals/

M&A/

Investments

Growth &

Contract

Renewals

CAPEX

Cash

Available for

Investments

WC, FX &

All Other

Net InterestEBITDA Dividends

& Fees from

Partnerships

Cash & Cash

Equivalents,

2016

77.6

105.6

157.3

Tax Maintenance

CAPEX

1 Calculated as

Proportionate EBITDA of fully

consolidated entities including EBITDA from equity

investments in Italy, Peru, Greece and Taiwan2 Turkey (Inteltek & Bilyoner), Bulgaria (Eurofootball Group & Eurobet Group), Azerbaijan, Argentina & Jamaica

(in € million) FY17 FY16 % Change

Proportionate Revenues 683.6 613.2 11.5%

Proportionate GGR 407.1 372.8 9.2%

Proportionate EBITDA 107.4 104.4 2.9%

Adjusted EBITDA1 131.1 125.5 4.5%

Proportionate Gross Debt 747.5 657.5 -

Proportionate Cash & Cash Equivalents 190.0 111.1 -

(in € million) FY17 FY16

Group Cash & Cash Equivalents, of which in 238.0 164.4

Partnerships2 80.7 86.8

All other Entities 157.3 77.6


Historical

Values

FY16 177.6 76.2 43.0 14.2 -4.2 -23.0 -63.8 220.0 -34.3 4.4 -22.2 -90.3 77.6

FY15 259.2 57.5 57.6 -18.0 -3.0 -19.4 -62.6 271.3 -39.0 -5.6 -49.1 177.6

64.8

39.715.7

19.8

39.5

44.6 34.9 23.9

85.3

1.5

Net Loan

& Leases

Movement

+28.0

Refinancing

Fees &

Expenses

Cash & Cash

Equivalents,

2017

157.3

Growth &

Contract

Renewals

CAPEX

77.6

Disposals/

M&A/

Investments

EBITDA Maintenance

CAPEX

105.6

Cash

Available for

Investments

Net InterestCash & Cash

Equivalents,

2016

Dividends

& Fees from

Partnerships

WC, FX &

All Other

Tax

Pro-Forma CF Evolution – Shareholders of the Parent View

2015 – 2017 Pro-Forma Cash Flow1 – Shareholders of the Parent View

€m

1 Includes cash flows from discontinued operations

APPENDIX


Recent Strategic Transactions Further Progress Company Strategy

Company’s Asset-light strategy evidenced by recent strategic transactions. New local market partnerships will

maintain INTRALOT’s global reach while reducing capital intensity and leveraging local expertise and networks

Italy/Gamenet Peru/Nexus Group Bulgaria/Eurobet

Jamaica/Zodiac

International

Investments Ltd

Malta/Bit8 Slovakia/Olbena SRO

Transaction/

TypeMerger Sale Acquisition Sale Acquisition Sale

Buyer/Seller Gamenet/INTRALOT Nexus Group/INTRALOT INTRALOT/EurobetZodiac International

Investments Ltd/INTRALOTINTRALOT/Bit8 Olbena SRO/INTRALOT

ConsiderationContribution of 100% wholly

owned Italian subsidiariesCash proceeds of US$68.7m1 Total consideration of

€19.5mCash proceeds of US$40.0m

Consideration paid of c.€12.8m

in totalCash proceeds of €1.7m

Original

Ownership100% 100% 0% 24.97% 35% 51%

Post-

Transaction

Ownership

20% in combined entity

(Successfully IPO’ed in December

2017)

20% 49% + 2% option 0% 100% 0%

Rationale

Obtain 20% share in a

larger/stronger entity

Attractive valuation

Dividend proceeds

Reduced capex

Revenue/ Cost synergies

Valued at €56.4m2 in MSE

Leverage Nexus Group’s

retail distribution

INTRALOT continues to be

INTRALOT Peru’s tech

provider

Increase local expertise

Reduced capex

EBITDA contribution of

c.€6.3m in FY17

Synergies with Bulgarian

Eurofootball operations

Purchase price 12 times the

annual net profit after tax

attributable to INTRALOT’s

equity holders

Net Debt reduction

Investments in new

products and projects

facilitation

Bit8 products are a major

pillar of our Digital

Transformation strategy

and a strategic asset in our

product portfolio for which

we needed to secure

development control

Synergies & economies of

scale

Disengage from non-

profitable/ small markets

Purchase price corresponds

to a valuation of 12 times

the LTM EBITDA

1 The consolidation price for the disposal of Intralot De Peru S.A.C amounted to €64.7m,

corresponding to an exchange rate of $1.063 per €12 Gamenet Market Capitalization as at 4/20/2018, x Intralot’s participation (i.e. 20%)


Revenue by Country

Americas

(€m) FY17 Revenue % Total

Argentina 93 8%

Brazil 33 3%

Chile 7 1%

United States 97 9%

Total 230 21%

Europe


Bulgaria 313 28%

Croatia 2 0%

Cyprus 17 2%

Germany 3 0%

Greece 47 4%

Ireland 3 0%

Malta 93 8%

Netherlands 16 2%

Poland 82 8%

Russia 3 0%

Total 579 52%

Rest of the World


Australia 21 2%

Azerbaijan 153 14%

Morocco 23 2%

New Zealand 5 1%

South Korea 1 0%

Turkey 92 8%

Total 295 27%


Revenue Evolution per Pillar

22.2

32.5

20.2

11.6

5.3-1.5

Poland

15.4

Azerbaijan

754.6-0.1

4.9

FY16

-4.8

Other

-1.5-1.8

37.4

662.5

Argentina

7.1

FY17

33.8

Bulgaria

4Q17

9M17

1.6

3.4

115.7

0.3

FY16 Russia

-1.1

Turkey

-3.1

0.6 117.1

FY17Morocco

2.2

-1.13.4

5.9

2.8

5.1

0.9

3.8

10.1

1.8

Argentina United

States

-0.1

FY17

6.1

Chile

7.2

-3.6

2.8

-0.9

Greece

6.9

FY16 Australia

0.1

213.3

-13.7

232.5

Other

4Q17

9M17

Revenues per Pillar, FY17

€m, %

Licensed Operations Pillar, FY17

€m

Game Management Pillar, FY17

€m, %

Technology Contracts Pillar, FY17

€m

4Q17

9M17

232.5

754.6117.1

21%

68%

11%

Technology

Game

Management

Licensed

Operations

FY17

Revenues per

Contract Type

(€m, %)


Key Revenue and EBITDA Contributors

Turkey

FY17 Largest

EBITDA

Contributors (in €m, %)

United States

Bulgaria

Azerbaijan

Argentina

Australia

MaltaOther

Turkey

United States

Bulgaria

Azerbaijan

Argentina

Australia

Malta

Other

FY17 Largest

Revenue

Contributors(in €m, %)

92.0

97.6

312.8

153.3

92.7

21.6

92.8

241.4

8.3%

8.8%

28.3%

13.9%

8.4%

2.0%

8.4%

21.9%

39.2

36.9

29.1

20.4

17.7

15.8

11.3

1.1 22.8%

21.5%

17.0%

11.9%

10.3%

9.2%

6.6%

0.7%


Contribution from Partnerships

1 Management Contract2 Licensed Operation3 12 Facilities Management (IT) Contracts with State Lottery and 1 Licensed Operation

Partnership Stake FY17 EBITDA Contribution FY16 EBITDA Contribution

Inteltek1 45.00% 14% 18%

Bilyoner1 50.01% 9% 8%

Eurofootball Group249.00% + option for additional

2.00%13% 13%

Eurobet Group 249.00% + option for additional

2.00%4% 2%

Azerinteltek2 22.95% 12% 9%

Tecno Accion Group3 50.01% 10% 10%

Total Partnership Contribution 62% 60%

Intralot’s Portion of EBITDA 63% 64%


in €m 2014A 2015A 2016A1 20171

EBITDA 175.4 177.2 162.5 171.5

Change in Working Capital (0.5) (41.9) 5.9 1.1

Income Tax Paid (29.0) (28.2) (20.9) (33.9)

Maintenance Capex (25.1) (29.3) (23.4) (21.8)

License Renewals - - - -

Dividends Paid (23.7) (67.7) (38.0) (34.0)

Cash Flow Available for Debt Service Before Discretionary

Capex97.1 10.1 86.1 82.9

Financial Performance – Available Cash Flow

Cash flow available

for debt service

and investments

1 Excludes the contribution from discontinued operations in Italy, Peru, Russia, Jamaica, and Slovakia


Financial Performance – P&L Statementin €m 2013A 2014A 2015A 2015A1 2016A1 2015A2 2016A2 2017A2

Revenue 1,539.4 1,853.1 1,914.9 1,235.5 1,323.6 888.8 991.5 1,104.2

Cost of sales -1,271.5 -1,582.9 -1,653.3 -1,001.7 -1,090.5 -691.1 -787.7 -862.3

Gross profit 267.9 270.2 261.6 233.7 233.1 197.7 203.8 241.9

Other operating income 17.4 18.6 24.9 23.2 33.1 22.3 32.5 17.2

Selling expenses -40.2 -60.3 -66.4 -56.5 -56.3 -50.6 -51.9 -61.0

Administrative expenses -120.8 -119.9 -125.0 -89.8 -87.4 -73.8 -73.8 -76.3

Research and development expenses -7.0 -7.2 -6.1 -6.1 -4.7 -6.0 -4.6 -6.2

Other operating expenses -14.0 -13.3 -10.0 -5.2 -9.9 -4.1 -9.5 -7.0

EBIT 103.3 88.1 79.0 99.3 107.9 85.5 96.5 108.6

% margin 7% 5% 4% 8% 8% 10% 10% 10%

EBITDA 194.8 175.4 177.2 164.9 175.8 149.4 162.5 171.5

% margin 13% 9% 9% 13% 13% 17% 16% 16%

Income/(expenses) from participations and investments 12.4 0.0 -0.2 -0.2 -17.5 -0.2 -17.5 -24.1

Gain/(loss) from assets disposal, impairment and write-off -3.0 -1.5 -2.0 -0.7 -8.5 0.6 -9.2 -2.0

Interest and similar charges -55.4 -70.8 -68.6 -67.8 -87.5 -67.4 -87.2 -70.0

Interest and related income 10.4 12.5 18.0 17.9 11.8 17.3 11.3 7.1

Exchange differences -11.1 10.6 3.6 3.5 3.1 3.5 3.1 -5.9

Profit/(loss) from equity method consolidation -3.0 -2.3 -4.1 -4.1 -4.5 -4.1 -4.6 -3.4

Operating profit/loss before tax from continuing

operations53.6 36.6 25.7 47.9 4.8 35.2 -7.6 10.3

Taxes -32.2 -44.2 -46.4 -45.1 -32.6 -41.7 -28.9 -28.3

Net profit/loss from continuing operations 21.4 -7.6 -20.7 2.8 -27.8 -6.5 -36.5 -18.0

Net profit/loss from discontinued operations 0.0 0.0 0.0 -23.5 72.6 -14.2 81.3 12.0

Net profit/loss (continuing & discontinued operations) 21.4 -7.6 -20.7 -20.7 44.8 -20.7 44.8 -6.0

Other comprehensive income/(expense) after tax -33.9 5.6 -7.1 -7.1 -8.7 -7.1 -8.7 -27.4

Total income after tax -12.6 -2.0 -27.8 -27.8 36.1 -27.8 36.1 -33.4

1 Excluding discontinued operations in Italy, Peru, and Russia2 Excluding discontinued operations in Italy, Peru, Russia, Jamaica, Slovakia, and Russia


Financial Performance – Balance Sheetin €m 2013A 2014A 2015A 2016A 2017A

Assets

Non-current assets

Tangible fixed assets 199.4 182.8 166.4 127.0 102.8

Investment property 0.0 0.0 5.8 6.0 0.0

Intangible assets 353.4 348.9 328.8 329.6 324.5

Investment in subsidiaries and associates 25.8 32.6 40.9 180.8 135.8

Other financial assets 43.5 36.9 26.1 21.9 21.5

Deferred tax assets 14.7 9.0 9.1 6.8 4.8

Other long-term receivables 77.5 60.6 70.2 22.4 16.5

Total Non-Current Assets 714.3 670.8 647.3 694.5 605.9

Current assets

Inventories 48.3 52.0 42.6 32.3 31.5

Trade and other short-term receivables 221.3 215.1 202.7 170.0 145.6

Other financial assets 3.6 0.3 0.0 0.0 0.9

Cash and cash equivalents 143.3 416.9 276.6 164.4 238.0

Total Current Assets 416.5 684.3 521.9 366.7 416.0

Total assets 1,130.8 1,355.1 1,169.3 1,061.1 1,021.9

Equity and liabilities

Share capital 47.7 47.7 47.7 47.7 47.7

Treasury shares 0.0 -0.5 -0.5 -1.7 -2.1

Other reserves 63.8 59.8 62.2 56.0 56.7

Foreign currency translation -61.0 -57.1 -59.4 -61.2 -76.8

Retained earnings 215.8 167.6 79.6 86.7 32.3

Minority interest 77.4 100.0 77.8 68.9 32.0

Total equity 343.7 317.5 207.4 196.5 89.8

Non-current liabilities

Long-term debt 350.3 557.4 716.1 643.9 728.0

Staff retirement indemnities 6.9 7.1 6.9 5.4 5.4

Other long-term provisions 13.7 6.1 6.6 10.9 8.0

Deferred tax liabilities 8.1 14.7 16.1 16.0 15.1

Other long-term liabilities 12.1 14.2 19.1 17.3 1.1

Finance lease obligation 19.2 8.6 2.0 0.7 1.4

Total Non-Current Liabilities 410.3 608.1 766.8 694.2 759.0

Current liabilities

Trade and other short-term liabilities 181.4 175.4 135.3 128.1 136.8

Short-term debt and current portion of long-term debt 176.9 232.3 36.2 14.7 19.3

Current income taxes payable 11.3 13.6 15.0 17.6 11.1

Short-term provision 7.2 8.2 8.6 10.0 5.9

Total Current Liabilities 376.8 429.5 195.1 170.4 173.1

Total equity and liabilities 1,130.8 1,355.1 1,169.3 1,061.1 1,021.9


Financial Performance – Cash Flow Statementin €m 2013A 2014A 2015A 2016A 2017A

EBITDA 194.8 175.4 164.9 162.5 171.5

Interest and similar expenses -55.4 -70.8 -67.8 -87.2 -70.0

Interest and related income 10.4 12.5 17.9 11.3 7.1

Exchange differences -11.1 10.6 3.5 3.1 -5.9

Profit/(loss) equity method consolidation -3.0 -2.3 -4.1 -4.6 -3.4

Gain/(loss) from assets disposal, impairment and write-off -3.0 -1.5 -0.7 -9.2 -2.0

Income/(expenses) from participations and investments 12.4 0.0 -0.2 -17.5 -24.1

Depreciation and amortization -91.5 -87.3 -65.6 -66.0 -62.9

Net profit before taxation from continuing operations 53.6 36.6 47.9 -7.6 10.3

Net profit before taxation from discontinued operations – – -22.2 96.8 15.1

Net profit before taxation from total operations 53.6 36.6 25.7 89.2 25.4

Depreciation and amortization 91.5 87.3 98.2 86.9 64.5

Provisions 14.6 10.8 9.6 25.5 5.7

Results from investing activities -2.6 -10.5 -0.2 -88.9 29.4

Interest and similar expenses 55.4 70.8 68.6 88.8 70.5

Interest and related income -10.4 -12.5 -18.0 -12.0 -7.6

Decrease/(increase) of Inventories -3.9 -5.2 1.2 2.8 -5.1

Decrease/(increase) of Receivable Accounts -67.3 14.9 -19.2 -9.2 -13.7

(Decrease)/increase of Payable Accounts (except Banks) 43.7 -10.2 -23.9 11.2 21.0

Income tax paid -35.5 -29.0 -28.2 -26.2 -36.1

Net Cash from Operating Activities 139.1 153.0 113.8 168.1 154.0

(Purchases)/Sales of subsidiaries, associates, joint ventures and other investments -22.9 7.5 -5.3 4.5 18.3

Purchases of tangible and intangible assets -58.2 -67.3 -70.8 -65.4 -74.3

Proceeds from sales of tangible and intangible assets 0.4 0.3 2.1 2.6 0.5

Interest received 8.6 13.6 12.3 7.7 6.8

Dividends received 2.6 1.0 1.9 1.0 2.4

Net Cash from Investing Activities -69.5 -44.9 -59.8 -49.6 -46.3

Subsidiary's capital return 0.0 0.0 0.0 -3.3 0.0

Purchase of treasury shares 0.0 -0.4 0.0 -1.2 -0.4

Cash inflows from loans 492.4 521.2 61.4 303.8 587.3

Repayment of loans -472.3 -255.5 -58.8 -388.4 -509.5

Bond buy backs – -6.3 -40.9 -3.7 0.0

Repayment of leasing obligations -6.9 -12.2 -11.5 -6.8 -3.2

Interest and similar expenses paid -37.8 -66.1 -64.8 -83.5 -51.8

Dividends paid -16.6 -23.7 -67.7 -42.2 -38.6

Net Cash from Financing Activities -41.2 157.0 -182.3 -225.3 -16.2

Net increase/(decrease) in cash and cash equivalents for the period 28.4 265.1 -128.3 -106.8 91.5


EBITDA Reconciliation1

1

1 2015 results do not include discontinued operations in Italy, Peru, and Russia, while 2016 and 2017 results do not

include discontinued operations in Italy, Peru, Russia, Jamaica, and Slovakia

2

(€m) 2014 2015 2016 2017

Operating profit / (loss) before tax €36.6 €47.9 €-7.6 €10.3

Profit / (loss) equity method consolidation 2.3 4.1 4.6 3.4

Exchange differences (10.6) (3.5) (3.0) 5.9

Net interest expense 58.3 49.9 75.9 62.9

Income / (expenses) from participations and investments 0.0 0.2 17.5 24.1

Gain / (loss) from assets disposal, impairment and write-off 1.5 0.7 9.2 2.0

EBIT €88.1 €99.3 €96.6 €108.6

Depreciation & Amortization 87.3 65.6 65.9 62.9

EBITDA €175.4 €164.9 €162.5 €171.5

September 2017 | Confidential | Final | Page 41 of 40

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