Playtech Plc · LSE:PTEC
Playtech — FY2007 Earnings Presentation
29 slides from Playtech's earnings presentation, Mar 4, 2008
Slide 1: Annual Results Year Ending 31 December 2007
Annual Results Year Ending 31 December 2007 4 March, 2008
Slide 2: Agenda
Agenda Introduction: Roger Withers, Chairman Operating Review: Mor Weizer, CEO Financial Review: Guy Emodi, CFO Current trading & outlook: Mor Weizer, CEO Questions & Answers 2
Slide 3: Introduction: Roger Withers, Chairman
Introduction: Roger Withers, Chairman Strong performance across all business areas Main challenge to recover from loss of US revenues was fully achieved Preparing the company for future growth in various markets through fast yet controlled growth of resources Growth driven by two key factors: Our pr
Slide 4: Operating Review: Mor Weizer, CEO
Operating Review: Mor Weizer, CEO 4
Slide 5: Revenues 2007 vs. 2006 (US$M)
Revenues 2007 vs. 2006 (US$M) 120.0 100.0 80.0 34.5 60.0 US 103.6 Non US 40.0 55.6 20.0 - Year 2006 Year 2007 5
Slide 6: Key Performance Indicators
Key Performance Indicators Total revenues - $103.6M, 86% increase (2006 Non US: $55.6M) Casino Revenues - $74.7M, 58% increase (2006 Non US: $47.3M) Poker Revenues - $27.4M, 269% increase (2006 Non US: $7.4M) 6
Slide 7: Operational Highlights
Operational Highlights Successful completion of the migration and integration of Tribeca poker network to the iPoker network Leading the licensees’ efforts to penetrate European markets post US legislation Playtech’s iPoker network - the world’s largest online poker network* 15 new licensees added (
Slide 8: Operational Highlights
Operational Highlights Significant progress in various regulated markets Further investment in development and management resources bringing the total number of Playtech employees to approximately 650 Completion of the establishment of the Bulgarian subsidiary Integration of more than 100 former Tri
Slide 9: Commitment to Market Leading Products
Commitment to Market Leading Products Conversion of majority of downloadable casino games to flash technology Introduction of Bingo flash technology in addition to downloadable version Revamp of the Live Gaming system Continued development of Asian P2P games (estimated release – Q1 2008) Continued d
Slide 10: Videobet Development
Videobet Development First to introduce server supported switchable technology Market leaders for server-based gaming & cross- selling opportunities Joint venture with Unicum (machines release in 2008) 10
Slide 11: Financial Review: Guy Emodi, CFO
Financial Review: Guy Emodi, CFO 11
Slide 12: Financial Highlights
Financial Highlights Total revenues - $103.6M, 86% increase (2006 Non US: $55.6M) Casino Revenues - $74.7M, 58% increase (2006 Non US: $47.3M) Poker Revenues - $27.4M, 269% increase (2006 Non US: $7.4M) 12
Slide 13: Financial Highlights
Financial Highlights Successful recovery after withdrawal from US market, resulting in adjusted net profit before tax* up by 3% to $70M (2006: $68M) Adjusted EPS* - 32¢ US (2006: 32 cents US) Proposed final dividend of 9.9¢ per share – $21.5M Total dividend for 2007 of 16.0¢ per share – $34.6M (2006
Slide 14: Revenues by Products 2007
Revenues by Products 2007 Casino 72% Poker 27% Other 1% 14
Slide 15: Quarterly Revenues by Product (US$M)
Quarterly Revenues by Product (US$M) 35.0 32.7 30.0 26.9 24.2 25.0 19.8 20.0 16.3 14.9 13.8 15.0 10.7 10.0 5.0 - Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Casino Poker Other 15
Slide 16: Royalties by Month (US$M)
Royalties by Month (US$M) 13.00 12.00 11.00 10.00 9.00 8.00 7.00 6.00 US 5.00 4.00 Non US 3.00 2.00 1.00 - 16
Slide 17: Geographic Diversification in 2007
Geographic Diversification* in 2007 Europe 71% ROW 8% Asia Pacific 21% *Player revenue generated 17
Slide 18: Operational Expenses 2007 vs. 2006
Operational Expenses 2007 vs. 2006 (Excluding exceptional non cash items) 45.0 38.4 40.0 35.0 Administrative expenses 7.4 2.7 30.0 25.6 Development cost 25.0 6.3 12.9 20.0 1.5 Sales & Marketing expenses 15.0 8.8 10.0 Operating expenses 15.5 9.1 5.0 - Year 2006 Year 2007 18
Slide 19: Profit & Loss – YE 31 December 2007
Profit & Loss – YE 31 December 2007 2007 2006 US$000 US$000 Revenues 103,604 90,078 Operating expenses -64,501 -32,856 Operating profit before the following exceptional items 66,250 65,097 Charges from founders cash contributions to employees (6,566) Loss of disposal available for sale invest’ (Foun
Slide 20: Investment in Foundation
Investment in Foundation Foundation Group Ltd (Hong Kong) listed in HKSE Ticker: 1182.HK 10 year software licence agreement Purchased shares & convertible notes for $10.25M Market value as of 31.12.07 = $18.9M Economic gain as of 31.12.07 = $8.65M Accounting treatment: When floated, financial gains
Slide 21: Investment in AsianLogic (ALOG)
Investment in AsianLogic (ALOG) AsianLogic listed on AIM. Ticker: ALOG.L 5 year software licence agreement Purchased shares: $5.0M Market value as of 31.12.07 = $15.9M Economic gain as of 31.12.07 = $10.9M Accounting treatment: When floated, financial gains of $10.6M recorded as deferred revenues an
Slide 22: Acquisition of Non US Assets of Tribeca
Acquisition of Non US Assets of Tribeca November 2006, Group signed an asset purchase agreement with Tribeca Tables Europe Ltd for consideration of $59.75M Customer list - amortised over 8 years 2007 - $4.2M (10 months) 2008 & after - $5.0M (12 months) Software valued at $0.275M – charged as impairm
Slide 23: Balance Sheet
Balance Sheet Current Assets December 2007 December 2006 $’000 $’000 Cash and Cash Equivalents 86,491 101,403 Investments (Foundation & ALOG) 34,846 - receivables 18,118 7,537 Total Current Assets 139,455 108,940 Intangible assets (mainly Tribeca) 61,355 4,355 Fixed Assets & other non current Assets
Slide 24: Cash Flow
Cash Flow Dec 2007 $’000 Dec 2006 $’000 Net profit 41,507 60,414 Depreciation and Amortisation 6,971 1,272 Founders’ Cash Contribution to Employees - 6,566 Employees Stock Options Expenses 2,645 703 Impairment loss of software acquired 275 - Decline in FV of available for sale investments & loss on
Slide 25: Current trading & Outlook: Mor Weizer, CEO
Current trading & Outlook: Mor Weizer, CEO 26
Slide 26: Current trading & Outlook
Current trading & Outlook Significant total revenue growth in January with 14.4% over Q4-07 average Six new licensees so far in 2008 Further penetration into Asia and Europe Focus on regulated markets Migrations from competitors Cross selling to online operators Strong pipeline of potential licensee
Slide 27: Current trading & Outlook
Current trading & Outlook Commitment to strong product road map: Launch of new Asian P2P games – End of Q1/08 Flash Poker – Q2/08 Large number of slots, card and table games Additional Asian P2P games Mahjong – Q4/08 Software adjustments to comply with regulatory requirements 28
Slide 28: Summary
Summary Strong 2007 performance with margins supported Consolidated position as world’s leading supplier to our market Casino, poker, bingo and Videobet performed well Product development key element of success Advanced geographical reach into diversified markets Growth of regulated markets creates
Slide 29: Questions & Answers
© playtech Questions & Answers