Light & Wonder, Inc. · ASX:LNW
Light & Wonder — Q2 2023 Earnings Presentation
26 slides from Light & Wonder's earnings presentation, Aug 8, 2023
Slide 1: Second Quarter 2023 Earnings Presentation
Second Quarter 2023 Earnings Presentation August 8, 2023 © 2023 LIGHT & WONDER
Slide 2: Forward-Looking Statements
SECTION TITLE, 10PT Forward-Looking Statements In this presentation, Light & Wonder, Inc. (“Light & Wonder,” “L&W” or the “Company”) makes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectat
Slide 3: Executing on Our Strategy to Drive Sustainable Growth
Executing on Our Strategy to Drive Sustainable Growth The Leading Cross-platform Clear Product Roadmap & Differentiated Position Global Games Streamlined Organization Company Healthy Balance Sheet & Strong Cashflow Disciplined Capital Allocation Strategy 9 4 2 Consecutive Consecutive Consecutive Qua
Slide 4: Achieved Significant Milestones on Key Initiatives
Achieved Significant Milestones on Key Initiatives • Signed definitive agreement to acquire remaining 17% interest in • Successfully listed and began SciPlay for $22.95 cash per share • Launched inaugural CSR report trading on the Australian • Enables seamless collaboration Securities Exchange (ASX)
Slide 5: Continuing Momentum with Exceptional Second Quarter Performance
Continuing Momentum with Exceptional Second Quarter Performance Delivered Double-Digit Revenue Growth Across All Businesses with Continued Progress on Our Roadmap • Grew Consolidated Revenue 20%; Consolidated AEBITDA(1) 33% YoY • Gaming Revenue +21% YoY, led by 41% YoY growth in Global Game Sales •
Slide 6: Operational Highlights
Operational Highlights © 2023 LIGHT & WONDER 6
Slide 7: Strong Global Game Sales Growth Driving Gaming Performance
Strong Global Game Sales Growth Driving Gaming Performance IN $MILLIONS Key 2Q Gaming Highlights Revenue AEBITDA • Gaming revenue increased 21% YoY led by 41% increase in Game $890 Sales • Gaming Operations Revenue Per Day grew 4% YoY to $47.54, $745 well above 2019 levels $471 • Systems and Tables
Slide 8: Continued Momentum in Gaming Led by Growth across all Business Lines
Continued Momentum in Gaming Led by Growth across all Business Lines IN $MILLIONS Q2 Revenue $167 $173 $163 $123 $72 $60 $55 $59 $51 $44 +2% +41% +20% +34% 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 Game Ops Game Sales Systems Tables • 12th quarterly increase in N.A. • Increased Global Game Sales • Hig
Slide 9: Deploying Premium Cabinets with Evergreen Franchises & Games to Fuel Sustainable Growth
Deploying Premium Cabinets with Evergreen Franchises & Games to Fuel Sustainable Growth COSMIC KASCADA SLANT & KASCADA DUAL SCREEN • Fastest scaling cabinet in recent history within first 2 • Kascada Dual Screen #1 Dual Screen Cabinet on most recent Eilers charts months of launch • Leveraging succes
Slide 10: Proven Execution Prowess Reflected in Another Record Performance at SciPlay
Proven Execution Prowess Reflected in Another Record Performance at SciPlay Key 2Q SciPlay Highlights IN $MILLIONS • Record Revenue of $190 million, up 19% YoY, breaking another record by Revenue AEBITDA achieving the highest quarterly revenue ever • AEBITDA of $59 million up 44%, benefiting from in
Slide 11: Gaining a Competitive Lead in Social Casino with Six Consecutive Quarters of Over Performance
Gaining a Competitive Lead in Social Casino with Six Consecutive Quarters of Over Performance(1) Market-Leading Franchises Achieving Record Revenue Top 3 Fastest Growing Social Casino Games in the U.S.(1) Quick Hit® Slots – The Fastest Jackpot Party® Social Casino – Gold Fish Casino® Slots – Growin
Slide 12: Continued Investments in SciPlay Engine Driving Performance of Evergreen Game Portfolio
Continued Investments in SciPlay Engine Driving Performance of Evergreen Game Portfolio DTC (Direct to Consumer) • Driving Increased Monetization New o Industry-leading Live Ops and robust product Games roadmaps are powering our opportunity to scale ARPDAU(1) and close the gap with industry peers •
Slide 13: Scaling Content Aggregation and Original Content Performance Driving iGaming Performance
Scaling Content Aggregation and Original Content Performance Driving iGaming Performance IN $MILLIONS Revenue AEBITDA Key 2Q iGaming Highlights • Record revenue of $70 million, up 17% YoY o U.S. Revenue growth of 32% YoY, driven by the strength in $134 land-based original content launches and scalin
Slide 14: Experienced iGaming Leader with Best-in-Class Content Aggregation Platform OGS
Experienced iGaming Leader with Best-in-Class Content Aggregation Platform OGS(1) OPERATORS OUR STUDIOS • Proprietary Content Leveraging L&W’s evergreen franchises and digital native content 4.5B+ Monthly Game Spins PARTNER STUDIOS • Partnership-Developed Content 35 Markets Developed in collaboratio
Slide 15: Robust Land-based and Digital Native Game Launches Driving Sustainable Growth
Robust Land-based and Digital Native Game Launches Driving Sustainable Growth U.S. Content Roadmap E.U. & U.K. Content Roadmap Key Highlights • Top game launches in the quarter include 88 Fortunes Jackpot Festival and Cash Falls Outback Fortune • Original content fueled over 70% of the GGR(1) of the
Slide 16: Financials
Financials © 2023 LIGHT & WONDER 16
Slide 17: Quality of Earnings in First Half of 2023 Underpinned by Strong Financial Profile
Quality of Earnings in First Half of 2023 Underpinned by Strong Financial Profile Significant recurring revenue(1) Focused teams driving Consolidated AEBITDA(2) grew faster streams & scaling digital operational excellence to than Consolidated Revenue YoY, businesses further strengthen margins alongs
Slide 18: Achieved Strong Double-Digit Top-Line & Bottom-Line Growth Through First Half of 2023
Achieved Strong Double-Digit Top-Line & Bottom-Line Growth Through First Half of 2023 IN $MILLIONS Key 2Q and 1H23 Highlights Consolidated Consolidated • Consolidated Q2 Revenue growth of 20% YoY, led by continued momentum in global Gaming Machine sales and strong performance in Revenue AEBITDA(1) S
Slide 19: Strong Free Cash Flow Generation in 2023
Strong Free Cash Flow (1)(2) Generation in 2023 IN $MILLIONS Key Takeaways 2Q23 2Q22 1H23 1H22 Net cash provided by (used in) Consolidated Combined Consolidated Combined operating activities $ 34 $ (37) 219 $ 57 2Q23 Consolidated Free Cash Flow(1)(2) : Capital expenditures (59) (62) (112) (130) • Pr
Slide 20: Leading the Future of the Games Industry Differentiated Value Proposition
Differentiated Value Proposition Leading the Future Focused on Execution of the Games Industry Streamlined business and transformed balance sheet Leading global games and platform provider with all the major pieces in place to drive shareholder value Unmatched market positions and cross-platform cap
Slide 21: Appendix
Appendix © 2023 LIGHT & WONDER 21
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company’s management (“Management”) uses the following non-GAAP financial measures in conjunction with GAAP divestitures and ongoing separation activities and related activities); (iv) cost savings initiatives; (v) major litigation; and (vi) financial measures: Consol
Slide 23: L&W Reconciliation of Consolidated AEBITDA
L&W Reconciliation of Consolidated AEBITDA Twelve Months Three Months Ended Six Months Ended Ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 June 30, 2023 Reconciliation of Net (Loss) Income Attributable to L&W to Consolidated AEBITDA Net (loss) income attributable to L&W $ (1) $ 3,291
Slide 24: L&W Reconciliation of Principal Face Value of Debt Outstanding to Net Debt Leverage Ratio
L&W Reconciliation of Principal Face Value of Debt Outstanding to Net Debt Leverage Ratio As of June 30, 2023 Consolidated AEBITDA(1) $ 1,029 Total debt $ 3,886 Add: Unamortized debt discount/premium and deferred financing costs, net 43 Less: Debt not requiring cash repayment and other (1) Principal
Slide 25: L&W Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
L&W Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow — Continuing Operations and Combined Free Cash Flow Three Months Ended June 30, 2023 2022 Continuing Discontinued Consolidated Operations Operations (1) Combined(2) Net cash provided by (used in) operating ac
Slide 26: L&W Reconciliation to Consolidated AEBITDA Margin
L&W Reconciliation to Consolidated AEBITDA Margin Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (1) Consolidated AEBITDA $ 281 $ 212 $ 529 $ 414 Revenue 731 610 1,400 1,183 Net income (loss) margin from continuing operations 1 % (25) % 2 % (18) % (2) Consolidated AEBITDA