Kambi Group Plc Class B · OMXSTO:KAMBI
Kambi Group Plc Class B — Investor Day (January 2023)
87 slides from Kambi Group Plc Class B's investor day presentation, January 2023
Slide 1: Kambi Capital Markets Day 2023
Kambi Capital Markets Day 2023 1
Slide 2: Welcome and introduction to Kambi
Welcome and introduction to Kambi Mia Nordlander, SVP IR 2
Slide 3: Legal Disclaimer
Legal Disclaimer This presentation is not an offer or solicitation of an offer to buy or sell securities these forward-looking statements, and any estimates and assumptions of Kambi Group plc (“Kambi”). It does not constitute a prospectus or prospectus associated with them. Certain statements contai
Slide 4: Agenda
Kambi Capital Markets Day 2023 Agenda 1. Welcome and introduction to Kambi – Mia Nordlander, SVP IR 2. View from the CEO – Kristian Nylén, CEO 3. Journey to the limitless sportsbook – Erik Lögdberg, COO Coffee break 4. Optimising commercial potential – Cecilia Wachtmeister, CCO 5. Growing the revenu
Slide 5: Key takeaways from the day
Key takeaways from the day The world’s number one sports betting supplier with a long track record of success Further market regulation and increased outsourcing will grow revenue opportunity Significantly increasing addressable market with modularised product portfolio Removing product boundaries w
Slide 6: The Kambi story
The Kambi story Our history as the leading B2B supplier Founded by CEO Kristian Nylén and board member Anders Ström in 2010 Listed on Nasdaq First North Growth since 2014 under "KAMBI“, current market cap. SEK 5.25 bn Processed the first legal online sports wager in the US in 2018 Today Kambi has 1,
Slide 7: Sports betting value chain
Sports betting value chain Kambi's position in the sports betting ecosystem Real-time B2C operators sports data End user Open platform Trading UX (Shape Esports Games) (Abios) Sports betting value chain 7 Kambi Capital Markets Day 2023
Slide 8: Kambi's sustainability strategy
Kambi’s sustainability strategy Sustainability at the heart of our business Focus areas: − Sports integrity: upholding trust in global sport − Cyber security: mitigating cyber-related risks − People, diversity and business ethics: providing an environment in which employees can excel and thrive MSCI
Slide 9: View from the CEO
View from the CEO Kristian Nylén 9
Slide 10: Continued commercial momentum
Continued commercial momentum 12 months in review 60+ Agreed partnership extension with Signed 10 partners since start of Displayed scalability and speed with Kindred and satisfied requirements 2022, including Rei do Pitaco in 60+ launches including to prepay convertible bond Brazil, Ondiss in Argen
Slide 11: Successful World Cup
Successful World Cup Led by introduction of third generation trading − Kambi enjoyed a successful World Cup, both in product quality and player engagement − Unrivalled combinability and greatest range of instant markets – the only sportsbook to offer instants on penalty shootouts − Pre-match pricing
Slide 12: Acquisition of Shape Games
Acquisition of Shape Games Adding all-important native capability to front end c.90% Percentage of US mobile users choosing app over browser Shape Games is the igaming industry’s leading developer of native front end technology Capability to be sold inside and outside of Kambi network. Shape Games r
Slide 13: The increasingly complex sportsbook
The increasingly complex sportsbook Demands on sportsbooks have increased over time 13 Kambi Capital Markets Day 2023
Slide 14: Kambi is clear B2B market leader
Kambi is clear B2B market leader #1 product with #1 brand Sportsbook capability only Leading B2B brand few B2Cs can compete with in the industry Brand recognition 92% 79% 55% 47% Tier one sportsbooks 14% 4% Kambi Comp A Comp B Aided Unaided 2022 survey conducted by Sports Betting Community and Sport
Slide 15: Key trends on market development
Key trends on market development Assumption Opportunity Select tier one operators in US are Tier ones are outsourcing various insourcing the sportsbook platform elements of their sportsbook Current trend Demand for a leading sportsbook New entrants are seeking a turnkey platform remains strong among
Slide 16: High-quality outsourced solutions to be in greater demand
High-quality outsourced solutions to be in greater demand Internal and external factors putting pressure on in-house operations External pressures Internal pressures More regulated markets and tighter existing Gap between leading sportsbooks and rest regulations getting wider and more difficult to b
Slide 17: Strategic aims and progress
Strategic aims and progress Delivering an open, independent and focused service to enhance quality and empowerment Aims Progress An open service to give partners more Trading and UX gateway up and running control over individual product parts Independent, standalone services for Separation of platfo
Slide 18: How Kambi is moving forward
How Kambi is moving forward Increase TAM Leading Algorithmic through sportsbook Trading and provision of platform will expanded UI high-quality continue to capability to open platform drive growth, push product and standalone particularly in boundaries services new markets 18 Kambi Capital Markets D
Slide 19: Journey to the limitless sportsbook
Journey to the limitless sportsbook Erik Lögdberg, COO 19
Slide 20: Scale, modularise, scale
Scale, modularise, scale 2010 2013 2020 2023 Create Scale Create Scale sports betting sports modular modules focus betting focus
Slide 21: New opportunities
New opportunities 1 2 3 Create an open Build independent Leapfrog B2C service to give services that can be competition in each customers control sold into other of the product areas over individual sportsbooks with focus and new product areas technologies 21 Kambi Capital Markets Day 2023
Slide 22: Open, independent, focused…
Open, independent, focused… Trading Bet platform UX Sportsbook 1) Provide the best 2) Seamless integration service in their to each other and to respective areas third parties 22 Kambi Capital Markets Day 2023
Slide 23: Scale, modularise, scale
Scale, modularise, scale Empowered by the full turnkey context 2010 2013 2020 2023 Create Scale Create Scale sports betting sports modular modules focus betting focus
Slide 24: Kambi bet platform
Kambi bet platform You’re never faster than your platform's ability to securely adapt 24
Slide 25: Scalability and adaptability in action
Scalability and adaptability 6 continents in action 5m active 40+ players partners 50+ Mobile Web markets Retail 25 Kambi Capital Markets Day 2023
Slide 26: Modularising the bet platform
Modularising the bet platform Unleashing differentiation possibilities everywhere Own trading Native apps Unique data New channels Trading Bet UX Shape UX Kambi Trading Gateway platform Gateway Kambi UX 3rd party trading Personalisation 26 Kambi Capital Markets Day 2023
Slide 27: Kambi Trading
Kambi Trading The boundaries to what we can trade are disappearing 27
Slide 28: Trading strategy
Trading strategy Precision in probabilities in order to entertain − Exciting offering − Always available − High limits and odds Croatia vs Brazil WC 2022 − No friction to bet Bets per minute 20% Match Extra time Penalty shoot- starts starts out starts 28 Kambi Capital Markets Day 2023
Slide 29: Bet Builder
Bet Builder Today’s battleground Q4 all sports pre-match Bet Builder accounted for 40% of bettors placed 15% GGR across the a Bet Builder Kambi network Multi Builder: 70% of Bet Builders were across multiple games on feature Kambi was first to launch 29 Kambi Capital Markets Day 2023
Slide 30: Abios: A Vehicle for Differentiation
A Abios ambi A Vehicle for Differentiation Abios is a Data-as-a-Service esports company with industry-leading data and technology. As part of Kambi, Abios helps partners take part in a new high-growth industry vertical that allows them to differentiate from their competition, All-in-one Esports Solu
Slide 31: 3rd Gen Trading
rd 3 Gen Trading From machine-assisted human trading to human-assisted machine trading Kambi Capital Markets Day 2023
Slide 32: 2nd Gen
2nd Gen Info Parameter Algo 32 Kambi Capital Markets Day 2023
Slide 33: 2nd Gen
2nd Gen Info Parameter Algo Info 33 Kambi Capital Markets Day 2023
Slide 34: 3rd generation trading
3rd generation trading Enabling the limitless sportsbook 2nd Gen Info Parameter Algo Algos 3rd Gen Info Monitor 34 Kambi Capital Markets Day 2023
Slide 35: The story of Kambi's 3rd Gen, Algorithmic Trading capability
The story of Kambi’s 3rd Gen, Algorithmic Trading capability Kambi Capital 35 Markets Day 2023
Slide 36: 85% of all Machine Learning projects fail
Our progress in this field is rare “85% of all Machine Learning projects fail” Gartner Research Kambi Capital Markets Day 2023
Slide 37: Impact of 3rd Gen Trading
Impact of 3rd Gen Trading Early signals Going forward Player props 16% of turnover and moves the market 50% We can now scale and improve Bet Builder 24% of turnover 50% trading with data, which is exponentially faster Full product published in 90 5 hours seconds 37 Kambi Capital Markets Day 2023
Slide 38: Kambi UX
Kambi UX Uniquely positioned together with Shape Games 38
Slide 39: UX opportunities
UX opportunities Multi channel and multi brand Global scale and performance Developer platform Native apps Online channels US Mobile channels US Bespoke UX Web Browser App Personalisation and other engagement Mobile 39 Kambi Capital Markets Day 2023
Slide 40: We have all the capabilities needed to scale the UX
We have all the capabilities needed to scale the UX into the future Multi channel and multi brand Global scale and performance Developer platform Native apps Bespoke UX Personalisation and other engagement 40 Kambi Capital Markets Day 2023
Slide 41: Conclusion
Conclusion The industry is facing major challenges in each area of sports betting 1. 3rd Gen Trading will be a necessity 2. Adapting the Bet Platform to new technical, product and regulatory conditions at speed 3. Creating relevant and cost efficient UX across Trading Bet platform UX channels and te
Slide 42: Break
Break 42 kambi.com
Slide 43: Optimising commercial potential
Optimising commercial potential Cecilia Wachtmeister, CCO 43
Slide 44: An expanded portfolio of market-leading products
An expanded portfolio of market-leading products Kambi #1 B2B sportsbook brand in the industry Lead the market Build on Kambi’s Enhance your with the world’s most open platform with sportsbook with trusted, revenue- a mix and match our selection of driving, full turnkey of Kambi and third- high-qual
Slide 45: Bundles include Kambi services
Bundles include Kambi services Odds feeds 3rd Gen trading Trading Bet Builder Instants Out the box front end Bespoke front end Lead the market Build on Kambi’s Enhance your Engagement tools with the world’s open platform sportsbook with UX our selection of Free-to-play most trusted, with a mix and r
Slide 46: Every operator outsources to some degree
Every operator outsources to some degree Select outsourcing 50-60% global GGR* ⎼ Owns core platform ⎼ Manages majority of services in-house Full ⎼ Outsources select products outsourcing Partial outsourcing 20-25% global GGR Select ⎼ Own trading requirement outsourcing Partial ⎼ Specific managed odds
Slide 47: Kambi sportsbook currently addresses 20-25% of market
Kambi today Kambi sportsbook Full outsourcing currently addresses 20-25% of market 47 Kambi Capital Markets Day 2023
Slide 48: Kambi's new portfolio of products addresses wider market
Kambi’s new portfolio of products addresses wider market Unlocking all market segments 48 Kambi Capital Markets Day 2023
Slide 49: Select outsourcing segment
Select outsourcing segment Addressed by Kambi Select Approx. avg. revenue derived 10-15% via outsourced products* Operator Enhance your Trading in-house SB sportsbook with platform our selection of high-quality modular services Typical - Predominantly tier-one operators with years of sports betting
Slide 50: Outsourcing among Select segment to increase over time
Outsourcing among Select segment to increase over time Product innovation Opportunity cost drives outsourcing of late launches Operator Regulatory compliance in-house SB Cost of capital increasing, adds cost and complexity platform drive to show profitability Outsourcing will increase as it is neith
Slide 51: USPs for Kambi Select
USPs for Kambi Select Shape and Abios Pioneers of 3rd Gen clear market Bespoke An award-winning leaders in trading powered by packages to meet Bet Builder product AI respective differing needs segments Enables Kambi to build relationships with operators in this segment and upsell over the long term
Slide 52: Partial outsourcing segment
Partial outsourcing segment Addressed by Kambi Flex Trading UX Esports Odds feeds Out of box front end Odds product 3rd Gen trading Bespoke front end Esports data Bet Builder Engagement tools Widgets Instants Free-to-play Integrity monitoring Non Kambi/third-party Kambi open platform Odds feeds Own
Slide 53: USPs for Kambi Flex
USPs for Kambi Flex Speed to market A more compelling Leverage the Operators can driven by Kambi’s option than buy strength of differentiate and scale and (limited) or build Kambi's core leverage their compliance (expensive) platform own USPs capability Provides true flexibility for operators to lev
Slide 54: Full outsourcing segment
Full outsourcing segment Addressed by Kambi Complete Sportsbook Platform Supplier Lead the market with the world’s most trusted, revenue-driving, full Latin American Platform Provider of the Year Sports Betting Supplier turnkey sportsbook - Multi-national gaming-focused operators - New entrants with
Slide 55: USPs for Kambi Complete
USPs for Kambi Complete Speed to Proven world market driven by Variable operator leader in B2B Full power of the Kambi’s scale costs in line with sportsbook network and compliance revenue provision capability The undisputed market-leading full turnkey sportsbook 55 Kambi Capital Markets Day 2023
Slide 56: A product fit for all strategies
A product fit for all strategies More reason to join - less reason to leave Lead the market Build on Kambi’s Enhance your with the world’s open platform sportsbook with most trusted, with a mix and our selection of revenue-driving, match of Kambi high-quality full turnkey and third-party modular spo
Slide 57: Well positioned for the future
Well positioned for the future Opens up new market segments Stronger proposition for partners and prospects Ability to upsell and cross-sell Regulated market expansion 57 Kambi Capital Markets Day 2023
Slide 58: Growing the revenue opportunity
Growing the revenue opportunity David Kenyon, CFO 58
Slide 59: Growing the revenue opportunity
Growing the revenue opportunity Group Evolving the business model to capitalise on growth opportunities B2B sportsbook market Expanding the business model will grow rapidly to maximise growth − Key new market regulations − Continue to deliver market-leading technology − Increased appetite for outsou
Slide 60: Kambi's total addressable market is increasing rapidly
Kambi’s total addressable market is increasing rapidly Group Potential regulation in key territories in the coming years California Japan Texas India Brazil Key potential market Kambi current market 60 Kambi Capital Markets Day 2023
Slide 61: Kambi's addressable market is increasing rapidly
Kambi’s addressable market is increasing rapidly Group Kambi's addressable market expected to grow from €11 billion to €50 billion GGR in 2027 Kambi vs Total Addressable Sportsbook Market €bn 50 28 27 16 22 11 2022 2027 Addressable via Turnkey Addressable via Turnkey & Open Platform Addressable via
Slide 62: Kambi in numbers
Kambi in numbers Track record of driving profitable growth Operators' turnover and trading margin 40+ partners 1100 1000 989 1056 911 12.0 % 11.0 % 900 10.0% 800 758 757 9.0 % 669 656 640 700 8.0% 560 573 50+ 600 500 369 398 387 412 505 7.0% 6.0 % 400 307 334 5.0% Regulated markets 300 221 239 219 2
Slide 63: Operators are more profitable using Kambi
Operators are more profitable using Kambi Operator Operator needs Removes major Flexible pricing Reduces fixed Increased revenue grows to spend less upfront costs, ensures cost base for profitability and faster than the on bonusing to risk of delayed operational operator competitiveness market drive
Slide 64: Growth opportunities
Growth opportunities Organic growth New markets New signings Grow faster than the market Key markets to be Business model will through best-in-class regulated within empower more new technology and speed the next five years customer signings to market 64 Kambi Capital Markets Day 2023
Slide 65: Revenue model
Revenue model Marketing & Front end Customer Engagement Service Front end Bespoke Marketing Integration Data & analytics platform development services – Fixed fee – Revenue share – Subscription – Subscription – License and – One-off or fixed fee – Recurring – Recurring subscription Revenue – Recurri
Slide 66: Growth opportunities
Growth opportunities Client portfolio Levers for growth Cross-sell to Kambi customers Continued dominance of native front end Renewed importance of a strong UI Newly regulated markets demand customer engagement tools Revenue first nine months 2022: €8.9m 66 Kambi Capital Markets Day 2023
Slide 67: Growth opportunities
Growth opportunities Levers for growth Marketing & Long-term supply of data Odds & Data Customer Trading rights has been secured Engagement Odds product ready to be Service Data Visualisations Compliance Odds & Trading launched in Q1 – Subscription – Subscription – Subscription – Revenue Revenue – R
Slide 68: Revenue model: Algorithmic Trading
Algorithmic Revenue model Trading Algo trading products Algo trading revenue model Levers for growth Next-generation products built off AI and richer data For Algo trading of major sports for Increased turnkey revenues Kambi the turnkey New revenue streams target a wider customer base Enhancing mark
Slide 69: Target revenue development to 2027
Target revenue development to 2027 Group 2027 Revenue Algo 2.0 - 3.0 x Modules, including Shape and New Abios partners New markets Existing partner 2022 Revenue growth 69 Kambi Capital Markets Day 2023
Slide 70: Optimising the cost base
Optimising the cost base Kambi
Slide 71: Kambi Group cost strategy
Kambi Group cost strategy Group Focused investments to maximise revenue and profitability growth Significant cost Underlying cost growth Scalability principle will efficiencies realised will be reduced continue to apply through modules 71 Kambi Capital Markets Day 2023
Slide 72: Principal elements of cost base
Principal elements of cost base Staff Infrastructure Other − Sales & marketing − 1,000 employees − Licences − Data centres Details − Significant decrease on − Offices − Cloud-based services − Data costs previous growth rates − Amortisation on M&A − Primarily driven by product − Primarily driven by −
Slide 73: Underlying scalability
Underlying scalability Kambi does things once, for the benefit of all operators Illustration of scalability Product development Trading and risk management Revenue Opex Technical infrastructure Regulatory compliance 73 Kambi Capital Markets Day 2023
Slide 74: Synergies and cost savings
Synergies and cost savings Algorithmic Trading Automated esports trading Frees up development capacity One front end organisation platform and innovation power Less resources required in One front end platform Single esports trading team trading Shared central functions Shared central functions Shar
Slide 75: Cost development to 2027
Cost development to 2027 Group Algorithmic trading New 2027 opex modules Synergies D&A increase General cost growth Turnkey reinvestment 2022 opex 75 Kambi Capital Markets Day 2023
Slide 76: Financial development
Financial development Kambi
Slide 77: Targets
Financial development Group 2027 Revenue 2-3x Targets EBIT €150m+ 77 Kambi Capital Markets Day 2023
Slide 78: Strong financial base
Strong financial base YQ Ye A wr 2) . ( A q i PN r 4 £ , —_ ey <a a” 4 : Kambi
Slide 79: Strong financial base underpins our model
Strong financial base underpins our model Group Strong Balance Sheet supports our financial prospects Structurally Cash Strong cash Two recent Ability to repay Repurchased cash generative conversion of balance acquisitions the convertible shares to fund 60-80% of using cash bond, no other future M&A
Slide 80: Capital allocation strategy
Capital allocation strategy Group Our sound financial base gives confidence to our partners and enables growth opportunities Reinvestment into Share repurchases M&A the business 80 Kambi Capital Markets Day 2023
Slide 81: Investment case
Investment case Kambi
Slide 82: Investment case
Investment case Group 1 2 3 4 Unique strategic Flexibility Highly Exceptional growth asset increases sales scalable potential opportunities business model 82 Kambi Capital Markets Day 2023
Slide 83: Closing remarks
Closing remarks Kristian Nylén, CEO 83
Slide 84: Drivers to 2027 targets
Drivers to 2027 targets Revenue 2-3x Utilise Extend Sign tier EBIT €150m+ Launch in a platform lead as one Rollout 3rd major flexibility no.1 operators Gen regulated to retain supplier across trading Asian key in the product market partners Americas portfolio 84 Kambi Capital Markets Day 2023
Slide 85: Key takeaways from the day
Key takeaways from the day The world’s number one sports betting supplier with a long track record of success Further market regulation and increased outsourcing will grow revenue opportunity Significantly increasing addressable market with modularised product portfolio Removing product boundaries w
Slide 86: Q&A
Q&A 86 kambi.com
Slide 87: Thank you
Thank you 87 kambi.com