Light & Wonder, Inc. · ASX:LNW
Light & Wonder — Q1 2023 Earnings Presentation
28 slides from Light & Wonder's earnings presentation, May 9, 2023
Slide 1: First Quarter 2023 Earnings Presentation
First Quarter 2023 Earnings Presentation May 9, 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: The Leading Cross-platform Global Games Company
Delivering on Our Strategy The Leading to Drive Long-Term Value Cross-platform Global Games Company Clear Product Roadmap & Differentiated Position Positioned to win and take share Streamlined Organization Singularly focused on building great franchises & games across land-based and digital Sustaina
Slide 4: Demonstrating Significant Progress with Exceptional First Quarter Performance
Demonstrating Significant Progress with Exceptional First Quarter Performance Delivered Double-Digit Revenue Growth Across All Businesses with Continued Progress on Our Roadmap • Grew Consolidated Revenue 17% and Consolidated AEBITDA(1) 23% YoY • Gaming Revenue +18% YoY, led by 53% YoY growth in Gam
Slide 5: Expanding our Global Presence and Shareholder Base
Expanding our Global Presence and Shareholder Base Board Approved Secondary Listing on the Australian Stock Exchange (“ASX”) • ASX is a premium market with a long track record as a platform for global gaming companies • Deep and liquid pool of investors and market participants who understand the gam
Slide 6: Streamlined and Focused Investments in our R&D Engine Drives Significant Returns and Future Growth
Streamlined and Focused Investments in our R&D Engine Drives Significant Returns and Future Growth Unlocking the power of R&D investment to ® fuel our cross-platform approach • Enhanced collaboration in research • Increased game development velocity and efficiency • Faster delivery-to-market of new
Slide 7: Operational Highlights
Operational Highlights © 2023 LIGHT & WONDER 7
Slide 8: Continued Momentum in Gaming Fueled by Premium Product Portfolio
Continued Momentum in Gaming Fueled by Premium Product Portfolio IN $MILLIONS Q1 Revenue $160 $158 $155 $103 $55 $51 $46 $46 $55 $51 +3% +53% +8% NC 1Q22 1Q23 1Q22 1Q23 1Q22 1Q23 1Q22 1Q23 Game Ops Game Sales Systems Tables • 11th quarterly increase in N.A. • Increased global Game Sales • Higher ser
Slide 9: Deploying Highly Anticipated Premium Cabinets and Games Throughout 2023
Deploying Highly Anticipated Premium Cabinets and Games Throughout 2023 COSMIC Q2 H2 • Launched Monsters: Frankenstein on COSMIC™ • ULTIMATE FIRE LINK™ franchise extensions to be released on Cosmic throughout 2023 KASCADA SLANT Q2 H2 • Gaming Operations and Game Sales launch on target for late Q2 •
Slide 10: Leveraging Success in Bellwether Australia Market to Scale Global Gaming Growth
Leveraging Success in Bellwether Australia Market to Scale Global Gaming Growth DRAGON UNLEASHED™ THUNDER DRUMS™ HUFF N’ MORE PUFF™ • Dragon Unleashed now over 2,000 • Installations drove Q1 ANZ Games • Originated as a game designed for units on floors, the quickest game to Sales ship share to over
Slide 11: Proven Execution Prowess Reflected in Another Record Performance at SciPlay
Proven Execution Prowess Reflected in Another Record Performance at SciPlay Key Q1 Highlights IN $MILLIONS SciPlay Revenue SciPlay AEBITDA • Record Revenue of $186 million, up 18% YoY led by higher payer engagement, once again outperforming the social casino market & increased market share • 2nd con
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: Accelerated Land-Based and Regionalized Content Launches Leading iGaming Performance
Accelerated Land-Based and Regionalized Content Launches Leading iGaming Performance IN $MILLIONS iGaming Revenue iGaming AEBITDA Key 1Q23 Highlights • Generated a 10% increase in revenue to a record $65 million, led by continued U.S. market growth o Grew U.S. Revenue 34% YoY, driven in part by the
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) 300+ ® 60+ Operator Brands Studio Partners Operators Our Studios 4.5Bn+ Monthly Game Spins 34 Markets 4,800+ Games Live Powered Global 540 Operator Brands ™ Connecting Operators and Studios to the leading iGaming Ecosy
Slide 15: Financials
Financials © 2023 LIGHT & WONDER 15
Slide 16: Quality of Earnings Underpinned by Strong Financial Profile
Quality of Earnings 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, and businesses further strengthen margins Free Cash Flow(2) grew faste
Slide 17: Delivered Double-Digit Top-Line and Bottom-Line Growth on Strong Performance in the Quarter
Delivered Double-Digit Top-Line and Bottom-Line Growth on Strong Performance in the Quarter IN $MILLIONS Key Highlights Consolidated Consolidated • Delivered double-digit Consolidated Revenue growth of Revenue AEBITDA(1) 17%, and Consolidated AEBITDA(1) increased 23% YoY, benefiting from strong exec
Slide 18: Healthy Balance Sheet Provides Flexibility to Advance on Capital Allocation Strategy
Healthy Balance Sheet Provides Flexibility to Advance on Capital Allocation Strategy IN $BILLIONS IN $MILLIONS Net Debt Interest Key Highlights Leverage Ratio(1) Expense • Reported principal face value of debt outstanding of $3.9 billion and net debt leverage ratio(1) of 3.1x, in targeted range(1)(2
Slide 19: Consolidated Free Cash Flow – Continued Focus on Operational Efficiency
Consolidated Free Cash Flow – Continued Focus on Operational Efficiency IN $MILLIONS Key Takeaways 1Q23 1Q22 • Free Cash Flow(1) was $74 million in the quarter, a significant increase over the prior year period driven by Continuing Discontinued Consolidated Combined(3) lower interest payments couple
Slide 20: Differentiated Value Proposition Focused on Execution
Differentiated Value Proposition Focused on Execution Leading the Future Streamlined business and transformed of the Games Industry 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 Consolidated AEBITDA (representing AEBITDA from continuing operations) financial measures: Consolidated AEBITDA (representing continuing operations), AEBITDA fr
Slide 23: Non-GAAP Financial Measures (Cont’d)
Non-GAAP Financial Measures (Cont’d) AEBITDA from Discontinued Operations Free Cash Flow from Discontinued Operations AEBITDA from discontinued operations, as used herein, is a non-GAAP financial measure that is presented as a Free cash flow from discontinued operations, as used herein, represents n
Slide 24: L&W Reconciliation of Consolidated AEBITDA
L&W Reconciliation of Consolidated AEBITDA — Continuing Operations, AEBITDA from Discontinued Operations and Combined AEBITDA Note: Unaudited, U.S. Dollars in millions. (1) EBITDA from Equity Investments is a non-GAAP financial measure reconciled to Earnings (loss) from equity investments on slide 2
Slide 25: 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 Note: Unaudited, U.S. Dollars in millions. (1) Combined AEBITDA consists of Consolidated AEBITDA - continuing operations, AEBITDA from discontinued operations and EBITDA from equity investments included in cont
Slide 26: 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 Note: Unaudited, U.S. Dollars in millions. (1) Free cash flow from discontinued operations, a non-GAAP measure, is derived based on the historical records a
Slide 27: L&W Reconciliation of Earnings (Loss) from Equity Investments to EBITDA from Equity Investments
L&W Reconciliation of Earnings (Loss) from Equity Investments to EBITDA from Equity Investments Note: Unaudited, U.S. Dollars in millions. (1) Combined EBITDA from equity investments consists of EBITDA from both discontinued and continuing operations equity investments. 27
Slide 28: L&W Reconciliation to Consolidated AEBITDA Margin
L&W Reconciliation to Consolidated AEBITDA Margin Note: Unaudited, U.S. Dollars in millions. (1) Refer to the reconciliation of Consolidated AEBITDA included in the table titled "L&W Reconciliation of Consolidated AEBITDA --Continuing Operations, AEBITDA from Discontinued Operations and Combined AEB