Playtech Plc · LSE:PTEC
Playtech — FY2008 Earnings Presentation
38 slides from Playtech's earnings presentation, Mar 19, 2009
Slide 1: Annual Results Year Ending 31 December 2008
Annual Results Year Ending 31 December 2008 19 March 2009
Slide 2: Agenda
Agenda • Introduction: Roger Withers, Chairman • Operational Review: Mor Weizer, CEO • Financial Review: Shuki Barak, CFO • Current Trading and Outlook: Mor Weizer, CEO • Questions and Answers
Slide 3: Introduction – Roger Withers, Chairman
Introduction – Roger Withers, Chairman • Another record year • Strong performance across all areas and geographies of the business • Dividend per share up by 49% • Successful £112 million (€141 million) placing enabled the execution of the William Hill Online deal which has now completed • Strategy
Slide 4: Operational Review
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Slide 5: Operational Highlights
Operational Highlights Total revenues - €111.5m, 70% increase Adjusted EBITA – €73m, 74% increase Adjusted Net profit – €78.6m, 79% increase
Slide 6: Operational Highlights
Operational Highlights • Successful completion of the William Hill transaction • Playtech now providing William Hill Online (“WHO”) with Casino and Poker software • iPoker now the world’s largest poker network • 15 new licence agreements including Betsson, Vista Global Limited (Hollywood Poker), Gen
Slide 7: Operational Highlights
Operational Highlights • Migrations from competitors including Mansion Poker, Boylesports Casino and Poker, Poker Plex and Sun Poker • Entry into regulated Italian market with further progress in other regulated jurisdictions • Strong organic growth
Slide 8: Videobet Highlights
Videobet Highlights • Videobet software has been approved by the Italian regulator • Agreement to deploy at least 800 B2/B3 machines in the UK including the deployment of 160 machines in 40 Gala Coral Shops • Expanding further into the Romanian market
Slide 9: Product Highlights
Product Highlights • iPoker – the world’s largest poker network • Launch of Asian P2P games • Launch of revamped Bingo product • Launch of Flash Poker • Launch of European Live Games from Riga • Launch of upgraded Live Games product
Slide 10: Italian Poker Network
Italian Poker Network • First four new licensing agreement in Italy include: SNAI, Sisal, Eurobet Italia and Cogetech • iPoker.it launch in the last week of December 2008 • Overall market turnover in 2009 estimated at €1.8 bn • Strong growth in the last two and a half months • Fastest growing networ
Slide 11: New Content
New Content • Successful establishment of internal games development unit • Exclusive licensing agreement signed with Paramount Digital Entertainment • Exclusive licensing agreement signed with Marvel movies • Exclusive licensing agreement signed with MGM announced today
Slide 12: Acquisitions – WH Online
Acquisitions – WH Online • William Hill transaction was successfully completed on 30 December 2008 • Total cash consideration of €177.7m ($250m) for a 29% interest in WH Online • William Hill has an option to acquire Playtech’s interest exercisable after 4 and 6 years • Licence agreement for a minim
Slide 13: Full migration of Poker took place TODAY!
Full migration of Poker took place TODAY!
Slide 14: Acquisitions
Acquisitions • Asset acquisition of MixTV extending the company’s product portfolio • MixTV provides leading end-to- end technology for the delivery of mass-multi-player live gaming applications via linear broadcast television and interactive live TV shows, on analogue, digital, terrestrial, cable,
Slide 15: Acquisitions
Acquisitions • Asset acquisition of sports betting and betting exchange software from Player2Players • The acquisition means that Playtech will be offering betting as well as gaming products • Playtech will not manage sports betting risk • Cross selling opportunities
Slide 16: Where are we headed
Where are we headed • Organic growth through cross selling and continued development activities • Strong pipeline of new prospective licensees • Regulated markets • Acquisitions
Slide 17: Financial Review
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Slide 18: Financial Highlights
Financial Highlights Total revenues - €111.5m, 70% increase (2007: €65.7m) Casino Revenues - €79.4m, 68% increase (2007: €47.4m) Poker Revenues - €30m, 73% increase (2007: €17.4m) Adjusted EBITA – €73m, 74% increase (2007: €42m) Adjusted EBITA margin – 66% (2007: 64%) Adjusted Net profit – €78.6m, 7
Slide 19: Quarterly revenues by product
Quarterly revenues by product (in € millions) % +11
Slide 20: Royalties – Organic growth
Royalties — Organic growth 100% 5 New businesses 2008 90% 80% Organic 70% growth 2008 60% 50% 40% 30% 20% 10% On BOO GOOS®@ HOWOO@EOOOe® GOWe®
Slide 21: Revenues by product 2008
Revenues by product 2008 ® Casino @ Poker @ Other 27% @ 6100S OOHOCOHOHOHOOHO
Slide 22: Summary of the Income statement
FY 2008 €’000 FY 2007 €’000 Summary of Revenues 111,450 65,665 the Income Operating expenses (63,473) (40,881) statement Operating profit 47,977 24,784 Finance income (expenses), net (6,524) 2,052 Tax (762) (529) Profit for the year 40,691 26,307 Operating profit 47,977 24,784 Adjustments to EBITA 2
Slide 23: Adjusted EBITA 2008 vs. 2007
Adjusted EBITA 2008 vs. 2007 2008 €’000 2007 €’000 Operating profit 47,977 26,307 Amortization 4,234 3,362 EBITA 52,211 28,146 Decline in FV of available for sale investment (CYF & ALOG) 16,698 11,579 Loss on disposal of available for sale investment (CYF) - 415 Impairment of software on acquisition
Slide 24: Adjusted net profit 2008 vs. 2007
Adjusted net profit 2008 vs. 2007 2008 €’000 2007 €’000 Net profit 40, 691 26,307 Decline in FV of available for sale investment (CYF & ALOG) 16,698 11,579 Loss on disposal of available for sale investment (CYF) - 415 Impairment of software on acquisition (Tribeca) - 174 Amortisation of customer lis
Slide 25: Revenues, adjusted EBITA and adjusted net profit
Revenues, adjusted EBITA and adjusted net profit (in € millions)
Slide 26: Breakdown of expenses 2008 vs. 2007
Breakdown of expenses 2008 vs. 2007 * 64 % (*) excluding change in FV of available for sale investments of €16.7 million (2007: €11.6 million)
Slide 27: EPS & adjusted EPS 2008 vs. 2007
EPS & adjusted EPS 2008 vs. 2007
Slide 28: Dividend 2008 vs. 2007
Dividend 2008 vs. 2007 (in € cents) % 49 Actual cash paid on behalf of dividend up by 84%
Slide 29: Cash flow
Cash flow 2008 €’000 2007 €’000 Net profit 40,691 26,307 Depreciation, Amortization & Impairment loss 5,912 4,593 Employees Stock Options Expenses 4,125 1,676 Decline in FV and loss on disposal of available for sale investments 16,698 12,012 Net change in Assets and Liability & other adjustments 1,3
Slide 30: Investment in WH Online
Investment in WH Online • Total cash consideration of €177.7m ($250m) for a 29% interest in WH Online which can increase to 32% depending on certain conditions • The Group raised €141m in the first half of 2008 to finance the deal consideration • 2 jointly owned entities to facilitate the integratio
Slide 31: Change in functional currency
Change in functional currency • With effect from 1 July 2008, the Group has changed its functional currency from United States dollars to Euros • The financial statements of the Group and its subsidiaries are prepared in Euro, which is the currency that best reflects the economic substance of the un
Slide 32: Balance sheet
Balance sheet 2008 €’000 2007 €’000 Cash and Cash Equivalents 31,558 54,819 receivables 12,884 11,483 Investments (CYF & ALOG) 4,887 22,086 Investment in WH Online 181,072 - Intangible assets (mainly Tribeca) 43,082 38,887 Fixed Assets & other non current Assets 6,163 3,486 Total Assets 279,646 130,
Slide 33: Current Trading & Outlook
Current Trading & Outlook SPARTA Oe S ONE SLAVE FIGHTING FOR FREEDOM reve ©2008 Onsnos Bed @wW@ # VHewO@O@g@o@ se oow®@
Slide 34: Current trading vs. Q4-08
Current trading vs. Q4-08 Daily average up by 8% on overall earnings Daily average up by 2.3% on revenues excluding WHO (Q1) and former customer (Q4) Daily average up by approx. 40% on revenues and share of 64 profit of WHO (Q1) Vs. former customer (Q4) %
Slide 35: Current Trading
Current Trading • Strong pipeline of further licensees some of which significant including: • Further 8 signed MOUs • Full migration of William Hill Poker • Significant progress in regulated markets • New agreement in Spain with Casino Grand Madrid • Latest addition to the iPoker.it network – Gamene
Slide 36: Current Trading
Current Trading • Asset acquisition of P2P – sports betting and betting exchange software provider • New agreement with MGM interactive Inc includes all of MGM’s Rocky and Pink Panther motion picture brands to be used across all Playtech products • 4th ECOOP event – a pool prize of more then $4.5m g
Slide 37: Summary
Summary • Strong performance with margins maintained • Consolidated position as world’s leading supplier to our market • Casino, poker and bingo performed well • Product development key element of success • Advanced geographical reach into diversified markets • Growth of regulated markets creates op
Slide 38: Questions and Answers
Questions and Answers GO GOOG © OOHO GOGO OOSOOHO