Entain PLC · LSE:ENT
Entain — GVC Holdings — Investor Day (May 2019)
130 slides from Entain's investor day presentation, May 16, 2019
Slide 1: Capital Markets Day
Capital Markets Day 16 May 2019
Slide 2: Disclaimer
Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. This presentation has been prepared by GVC Holdings PLC (“GVC”). This presentation includes state
Slide 3: Introduction
Introduction Kenneth Alexander Chief Executive GVC Holdings PLC | Capital Markets Day | 16 May 2019 3
Slide 4: Schedule
Schedule Purpose of today: Topic Presenter Time Provide an understanding of the unique GVC Introduction Kenneth Alexander (CEO) 13:30 – 13:45 operating model Integration, Technology and Product Shay Segev (Co-COO) 13:45 – 14:05 Update on specific areas Adam Lewis (CMO – GVC Brands) of the busine
Slide 5: Overview
Overview • A global online-led business of scale – operating in over 20 countries • Operating in high growth markets within a high growth sector • Highly effective operating model – proprietary technology, cutting-edge marketing, local execution and entrepreneurial culture • Well placed for regulato
Slide 6: GVC Overview
GVC Overview A truly global operator in a high growth sector 2004 2009 2012/13 2016 2018 IPO of Acquisition of Acquisition of Acquisition of Acquisition of Ladbrokes CasinoClub Betboo Sportingbet bwin.party Coral and establishment of 50/50 JV with MGM The business now 1: Largest online-led sports-be
Slide 7: Strategic Overview
Strategic Overview TO BE THE WORLD’S LARGEST VISION SPORTS-BETTING AND GAMING BUSINESS STRATEGIC GEOGRAPHIC IMPERATIVES SCALE + DIVERSIFICATION MARKET LEADING GOALS ORGANIC GROWTH + M&A TECH + PRODUCT + BRANDS + MARKETING + PEOPLE KEY ENABLERS LOCAL EXECUTION A PASSION FOR DELIVERING SUPERIOR CUSTOM
Slide 8: Operational Structure
Operational Structure CEO Kenneth Alexander GVC Brands Ladbrokes Coral Brands US1 Adam Lewis Andy Hornby Adam Greenblatt Technology, Product, Trading and Customer Operations Shay Segev Regulation and Responsible Gambling Rob Hoskin 1 JV with MGM Resorts 8
Slide 9: Scale
Scale The largest online-led sports-betting and gaming operator in the world 2018 Full Year Total Net Revenue1 3.6 (£bn, last reported) 2.7 Retail 1.6 1.9 1.9 Retail 1.6 0.3 1.4 Retail 0.9 Online Retail 0.9 1.9 Online 0.7 0.5 0.4 1.6 Online 0.3 Online 0.7 0.7 2,3 2 2 GVC Bet 365 St ars Group PP B Wi
Slide 10: High Growth Markets in a High Growth Sector
High Growth Markets in a High Growth Sector Operating in a high growth sector and in high growth markets Global Online Gross Gaming Revenue Growth (£bn) 46.8 43.5 40.0 36.4 32.9 29.8 27.2 2014 2015 2016 2017 2018e 2019e 2020e Source: H2GC 10
Slide 11: High Growth Markets in a High Growth Sector
High Growth Markets in a High Growth Sector The sector has a very long runway for online growth Total 2018 Estimated Market Size – Gross Gaming Revenue (£bn) 89.3 Land-based and Online 64.3 GVC present online 36.8 16.5 15.2 13.9 12.6 10.1 9.3 8.3 7.7 5.0 3.6 2.4 2.0 1.9 Italy Korea Australia Germany
Slide 12: Geographic Diversification and Local Execution
Geographic Diversification and Local Execution Highly diversified global operator with a long history of operating in our territories – we know our markets “inside-out” Years operating online in main markets UK >20 years Germany >20 years Australia >7 years 36% Italy >10 years 2018 Online Austria >2
Slide 13: M&A Partnership approach
M&A Proven track record in delivering value from successful M&A Target identification • Dedicated M&A team • Global brands and presence create a rich flow of opportunities • Strategically disciplined Optimal deal structures • Highly flexible approach • Innovative deal structures • Partnership approa
Slide 14: Brands
Brands Well-established brands increase marketing efficiency and create barriers to entry 14
Slide 15: Quality of Earnings
Quality of Earnings Vast majority of online revenues are generated in fast growing, regulated and taxed markets % of GVC FY18 Online NGR in countries… …that are …where the …where GVC …if taxed, …with online either online market is growing then are penetration regulated, is growing >10% pa taxed1 at
Slide 16: Quality of Earnings: Product Diversification
Quality of Earnings: Product Diversification Revenues are well diversified by product, with football revenues spread over multiple leagues and bet type Group Online NGR Product Splits (2018) Remainder includes other Football by leagues League each <3% l World Cup 9% l Premier League 8% Gaming Sports
Slide 17: Our Approach to Responsible Gambling
Our Approach to Responsible Gambling Decisive action to improve player protection – we have a plan and are making good progress GVC call for action in the UK Increase in GVC funding for research, education Industry-wide ban on UK TV sports-betting adverts and treatment from 0.2% to 1% of UK GGR (exc
Slide 18: Key Messages
Key Messages GVC is a truly global operator, gaining market share in all major territories The GVC operating model is highly effective and is a sustainable competitive advantage; we are exceptionally well placed for future growth Continued outperformance is driven by operational excellence 18
Slide 19: Integration, Technology & Product
Integration, Technology & Product Shay Segev Co-COO GVC Holdings PLC | Capital Markets Day | 16 May 2019 19
Slide 20: Introduction
Introduction Agenda Shay Segev - Integration update Picture - Technology Co-COO - Product development Joined 13 years within Previously Previous sector roles GVC as COO the online Chief Strategy Officer include: in February 2016 gaming sector Gala Coral • Playtech - COO • Videobet - CEO 20
Slide 21: Key Messages
Key Messages Integration progressing well and driving business performance; accelerated platform migrations will unlock value Proprietary technology platform is a unique competitive advantage and growth driver Leading product range continuously enhanced and deployed across brands and territories KEY
Slide 22: Proven Integration Approach
Proven Integration Approach Track record of highly effective integrations using a proven process Integration always focused on revenue growth and efficiency improvements, not just cost synergies Delivered multiple successful integrations Significant experience in delivering technology/platform
Slide 23: Ladbrokes Coral Integration: Status Update
Ladbrokes Coral Integration: Status Update Integration progressing well without disrupting growth; accelerated £15m platform migration synergy in 2020 Ladbrokes Coral brands growth boosted by immediate improvements in product, platform and operations Focus on technology integration and preparati
Slide 24: Integration: Immediate Value Drivers
Integration: Immediate Value Drivers Major opportunity exists from sharing “best-of-both”; quick wins implemented but we have barely scratched the surface Examples of sharing to date: Trading Shared Gaming Content • GVC odds-feed into Ladbrokes Coral – increasing • Ladbrokes Coral in-house content a
Slide 25: Integration: Platform Migration
Integration: Platform Migration Smart migration approach minimises risk and ensures a smooth user experience and seamless switch over Phased approach by brands – Wallet and gaming platform migration to GVC (Gala Spins in April 2019) Smart – Introduction of price feeds from in-house GVC sports (alr
Slide 26: Technology: Sustainable Competitive Advantage
Technology: Sustainable Competitive Advantage Powerful proprietary technology means we are in control of our destiny Sustainable Competitive OMNI-CHANNEL DEVICES Advantage Growth ready – highly scalable Quick to market API SERVICES Rapid deployment of changes Multi-jurisdiction 2 WAY INTEGRA
Slide 27: Technology: Sustainable Competitive Advantage
Technology: Sustainable Competitive Advantage In-house technology enables rapid action and deployment Processing (p.a.) Case Study 1: Significant >350m sports bets Scale >10bn casino spins 2018 integration of GVC sports and gaming into Crystalbet >1bn poker hands Currently supports: 11 April 3
Slide 28: Product Development Capability
Product Development Capability Extensive product development capability ensures a strong pipeline of new product and customer UX enhancements In-house Games, Third-party Games Sports Product Bingo and Poker and Live Casino Development Customer interface and user experience Industry-leading experti
Slide 29: Recent Product Development
Recent Product Development Continual improvements to product offering and customer user experience video 29
Slide 30: Going Forward
Going Forward Deliver integration with platform migrations from H2 2019 Accelerate growth and step-up “best-of-both” sharing into 2020 Proprietary technology driving significant benefits across the Group 30
Slide 31: GVC Brands
GVC Brands Adam Lewis CMO – GVC Brands GVC Holdings PLC | Capital Markets Day | 16 May 2019 31
Slide 32: Introduction
Introduction Agenda Adam Lewis - Marketing strategy CMO – GVC - bwin Germany Brands - partypoker - Crystalbet Led the marketing Joined 26 years 18 years within turnaround GVC as CMO International marketing the online of Sportingbet (2013) and in January 2013 experience gaming sector bwin.party (2016
Slide 33: Key Messages
Key Messages Highly effective operating model driving market share gains Sophisticated marketing techniques applied across territories Deep local expertise enabling deployment of territory-specific operating models KEY ENABLERS TECH + PRODUCT + BRANDS + MARKETING + PEOPLE (Covered in this section) L
Slide 34: Brands and Scale
Brands and Scale Diverse brand portfolio across wide geographical footprint • Operates in over 20 countries • Delivers £1.0bn NGR • 51% of Group Online NGR 34
Slide 35: Performance
Performance Highly effective operating model delivering sustained outperformance +22% +20% +11% Q1 2019 NGR 3-Yr Growth +21% +62% Total NGR €m Year-on-year 2018 vs 2015 2016 2017 2018 NGR1 1 Constant currency 35
Slide 36: Marketing Strategy and Structure
Marketing Strategy and Structure Eight specific marketing strategic pillars driving increased player engagement; growth underpinned by data and analytics Analytics and Insight Brand and Customer Creative Experience Marketing strategic pillars Digital Each headed by a Marketing CRM Divisional Direc
Slide 37: Analytics and Insight
Analytics and Insight Analytics and insight are the most influential enablers of sustained player engagement and growth Optimised Acquisition Personalisation Budget optimisation through data-driven Present the most relevant content at the targeted advertising right time, for CRM, onsite and offsite
Slide 38: Analytics and Insight
Analytics and Insight Sophisticated infrastructure drives optimal customer engagement Data Layer Customer DNA Analytics Layer Intelligence Layer Application Layer Marketing Mix Return on Biddable Platforms Transactional Modelling Marketing Investment (ROMI) Web AdServing Predictive Modelling Custome
Slide 39: Analytics and Insight
Analytics and Insight Marketing analytics delivering tangible benefits in sector specific trials – wider deployment planned from H2 2019 onwards Digital • New customer first-3-months NGR +28%1 Marketing • Data Marketing Platform implementation delivered 8% improvement in CPA2 (Player Acquisition) •
Slide 40: Making Customer Experience a Key Differentiator
Making Customer Experience a Key Differentiator Consistently exceeding player expectations 2019 2020+ The customer Beyond satisfaction at the heart of Cultivate loyalty, not just satisfaction everything we do Customer Satisfaction Introduce CX metrics and focus Active listening Manage both the reali
Slide 41: Brand & Creative: 2017 Bringing bwin Back to Life
Brand & Creative: 2017 Bringing bwin Back to Life A breakthrough campaign delivering a Hollywood-style adrenaline fuelled car chase, allowing the audience to predict the outcome of the chase 250,000 YoY 78% 35% 32% predictions made increase in increase in new increase on the result unique active cus
Slide 42: World Cup: 2018 One Campaign - Global Appeal
World Cup: 2018 One Campaign - Global Appeal If you want to be the best then work with the best! Campaign delivered an epic heist of the most famous football trophy in the world, with the four protagonists each hatching their plans across four separate adverts, with the campaign crescendo at the sta
Slide 43: 2019: Leverage Our Key Assets Globally
2019: Leverage Our Key Assets Globally ‘Welcome to the BIG League’ A pan-European brand campaign leveraging bwin’s sponsorship of football giants Borussia Dortmund, Valencia, Inter Milan and Atletico Madrid, creating an emotional and aspirational connection with fans, welcoming them to bwin and to t
Slide 44: 2019: German Regional Campaign
2019: German Regional Campaign ‘This is our game’ DAS IST UNSER SPIEL “This is our game” – grassroots campaign setting bwin apart from the competition Building an emotional connection between bwin and authentic football by leveraging players and real fans including Borussia Dortmund, Koln, St Pauli,
Slide 45: Introduction
Introduction Stephan Heilmann Head of bwin Germany Joined as 15 years 11 years within Head of bwin Germany in marketing the German Online January 2016 experience gaming sector 45
Slide 46: Germany: Performance
Germany: Performance Market leading performance +23% +26% +18% Q1 2019 NGR +83% +26% Total NGR €m NGR growth Year-on-year since acquisition 2016 2017 2018 NGR1 1 Constant currency 46
Slide 47: Germany: 2018 Brand Positioning
Germany: 2018 Brand Positioning Making the bwin brand authentic and passionate Authentic Passionate Factual Humorous Artificial 47
Slide 48: Germany: Current and Future Strategy
Germany: Current and Future Strategy Making bwin the standout No.1 sportsbook in Germany 2017 2018 2019 2020…2021…2022 48
Slide 49: LATAM
LATAM LATAM double digit growth for the lasttofive ‘Welcome theyears Big League’ Strong brand Proven & highly Q1 19 Growth recognition: Considering LATAM competent sportingbet, bwin expansion options regional team +48% and partypoker 49 49
Slide 50: partypoker
partypoker Significant market share gains driven by leading live event offerings and continued UX enhancements Geographical Cash Games Ecology Expansion FastForward Prevention of Recent: Sweden animations third-party tools and Spain Short deck My game - poker Future: Italy and Real nam
Slide 51: Crystalbet: Effective M&A
Crystalbet: Effective M&A Crystalbet performance demonstrates our effective M&A model – local expertise while leveraging Group assets +41% +61% +79% +76% Total NGR GELm Q1 2018 Q2 2018 Q3 2018 Q4 2018 NGR1 +58% Q1 2019 vs Q1 2018 Existing Group BI, CRM and Crystalbet Enhanced casino New sports feeds
Slide 52: Going Forward
Going Forward Rigorous focus on analytics, driving marketing efficiency Next phase in the radical evolution of the bwin brand Continue to leverage our extensive local expertise to drive market leading performance 52
Slide 53: UK Online
UK Online Andy Hornby Co-COO GVC Holdings PLC | Capital Markets Day | 16 May 2019 53
Slide 54: Introduction
Introduction Agenda UK Online: - Market - Operating model Andy Hornby - Marketing Co-COO - Brands UK Retail: - Triennial Review update - Fit for the future Previous sector roles include: Previous roles include: GVC Co-COO 8 years within • Ladbrokes Coral Group • Alliance Boots since the 2018 acquisi
Slide 55: Key Messages
Key Messages The UK market is a well-regulated high growth market Market leading CRM and acquisition capability driving outperformance Multi-brand strategy presents further growth opportunity KEY ENABLERS TECH + PRODUCT + BRAND + MARKETING + PEOPLE (Covered in this section) LOCAL EXECUTION 55
Slide 56: UK Online Market
UK Online Market UK market is still a high growth, well-regulated market dominated by scale operators with significant barriers to entry UK Online NGR Forecast Growth High single- Total Online NGR (FY17) digit growth l bet365 13.0% 7,000 18% l TSG 12.6% 6,000 16% l PPBF 12.5% 14% l GVC 12.2% 5,000 Y
Slide 57: Driving High Growth
Driving High Growth Market leading growth in 2018 2018 Year-on-year Online NGR growth Sports-led brands Gaming-led brands 14% 11% 7% 6% 5% 3% 0% Lad/Coral Skybet 1 Competitor PPBF 2 Competitor WH 3 Competitor Galabingo Rank 4 Competitor JPJ 5 Competitor Competitor 6 -20% 1 Excludes acquisitions 57
Slide 58: Driving High Growth
Driving High Growth Outperformance continuing into 2019 Q1 2019 Year-on-year Online NGR growth Sports-led brands Gaming-led brands 15% different time period 8% Reported on a Not reported Not reported Competitor 1 Competitor 2 Competitor 5 Competitor 3 Competitor 4 Competitor 6 -1% -7% -12% 1 Exclude
Slide 59: Marketing Tools
Marketing Tools Scalable real-time marketing engine delivering unique experience to each customer Models are highly accurate Bespoke predictive models include: Organic FTDs – Adj R2 97% • pNGR: predicts 12 month player value Predictive • pVIP: predicts propensity for customer to become high value Ac
Slide 60: Marketing: Leading Real-time CRM
Marketing: Leading Real-time CRM Advanced marketing capabilities enable unique interaction with every customer Example customer interaction: Customer Profile Friday - Activation Saturday – Cross-sell and up-sell Media Offer Push • Customer A bets £100 per 15:00 Customer A sees 12:00 Customer A 16:10
Slide 61: Marketing: Real-time CRM
Marketing: Real-time CRM Advanced marketing capabilities are a competitive advantage 61
Slide 62: Marketing: Brand
Marketing: Brand Brand differentiation reinforced through new campaigns ‘Where the nation plays’ ‘Don’t bet silly, bet savvy’ 62
Slide 63: Ladbrokes.com: Improving Profitability
Ladbrokes.com: Improving Profitability The on-going turnaround of the Ladbrokes online brand in the UK presents a significant opportunity Year-on-year quarterly NGR growth rate 38% Merger completion 36% 33% 29% 23% 21% 21% 18% 13% 11% 5% 2015 2016 2017 2018 -6% -6% -5% -7% -9% Q1 Q2 Q3 Q4 Annual mar
Slide 64: Marketing Efficiency
Marketing Efficiency Rigorous CRM and acquisition marketing driving material improvements in marketing ROI Driving higher marketing ROI Impact on ROI of applying these models to Ladbrokes.com Data Orchestration Improvement Channel in ROI1 TV 1.3x + + Branded PPC Non-branded PPC 2.2x 1.1x Display 2.7
Slide 65: Coral.co.uk: Consistent Outperformance
Coral.co.uk: Consistent Outperformance Coral.co.uk has consistently outperformed the market Year-on-year quarterly NGR growth rate 84% 65% 61% 54% 40% 33% 31% 30% 29% 21% 17% 13% 13% 13% 10% 8% 2015 2016 2017 2018 Q1 Q2 Q3 Q4 Growth driven by market leading CRM and continued improvements to user jou
Slide 66: Galabingo.com: Leading Growth
Galabingo.com: Leading Growth Very high marketing ROI driving sustained growth Year-on-year quarterly NGR growth rate 41% 23% 21% 18% 17% 14% 12% 10% 10% 11% 8% 9% 6% 2% 0% 2015 2016 2017 2018 -8% Q1 Q2 Q3 Q4 2018 year-on-year Online NGR growth 66
Slide 67: Foxy Bingo: Turnaround
Foxy Bingo: Turnaround Foxy brand awareness remains very high; turnaround plan underway JOIN THE FOXY FABULOUS. • New TV campaign focusing on ‘The Foxy Fabulous’ with new brand positioning and Foxy as the lead • Key partnership with exclusive products, bespoke TV and C5 sponsorship • New brand team
Slide 68: Going Forward
Going Forward Further enhance real-time CRM capability to drive growth Leverage the benefits of operating on single Group technology platform Continued turnaround opportunity for Ladbrokes.com and Foxy Bingo 68
Slide 69: UK Retail
UK Retail Andy Hornby Co-COO GVC Holdings PLC | Capital Markets Day | 16 May 2019 69
Slide 70: Triennial Review Update
Triennial Review Update Six weeks trading since implementation of £2 stakes First six weeks vs model Key Model Assumptions expectations 1. B3 Migration - Some >£2 play will migrate to slots In-line 2. OTC Migration - Some displaced machines spend will migrate OTC Positive 3. Online Migration - Some
Slide 71: Fit for the Future: OTC / SSBTs / Machines
Fit for the Future: OTC / SSBTs / Machines Investment in machines, SSBTs, shop fabric and a new proprietary EPOS system leaves the business well positioned OTC SSBTs Machines • Market leading Best-Price- • UK terminal density-per-shop to • 6,800 Equinox machines rolled Guarantee (BPG) all-day every-
Slide 72: Fit for the Future
Fit for the Future Leading offer on the high street Highly Cash Generative Reinforcing Brand Recognition Driving Online Growth Post Triennial (2022 onwards): • Retail presence key in driving • Market leading multi-channel overall brand recognition offering is a material competitive • Cash generation
Slide 73: Key Messages
Key Messages Triennial Review impact £15m better than expected from 2020 onwards Well-placed for market share gains A right-sized UK Retail estate is a core asset – driving online growth through unique multi-channel offerings and delivering cash 73
Slide 74: Break
Break 15 minutes GVC Holdings PLC | Capital Markets Day | 16 May 2019 74
Slide 75: US
US Adam Greenblatt CEO – ROAR Digital (US JV) GVC Holdings PLC | Capital Markets Day | 16 May 2019 75
Slide 76: Introduction
Introduction Agenda Adam Greenblatt - The opportunity CEO – ROAR Digital - The JV (US JV) - Progress to date - Technology and product Previous sector roles include: • Ladbrokes Coral – Previous roles include: CEO – US JV 16 years within Director of Corporate • Rothschild - Gaming since October 2018
Slide 77: Key Messages
Key Messages The US is undoubtedly the largest sports-betting opportunity to emerge in the last 20 years Established brands, proprietary technology and market access will create a leading position in the US Clear JV roadmap exists KEY ENABLERS TECH + PRODUCT + BRANDS + MARKETING + PEOPLE (Covered in
Slide 78: The Opportunity
The Opportunity US is expected to be an online-led market worth at least $6bn GGR by 2023; Roll-out is likely to be gradual, state-by-state and retail-first in some states ME WA VT NH MA MT ND MN NY OR RI ID WI MI SD CT WY PA NJ IA DE OH MD NV NE IL IN WV VA D.C. UT KY CA CO KS MO NC TN SC OK AR AZ
Slide 79: The Opportunity: Live States
The Opportunity: Live States Currently c10% of the US population can bet on sports through retail outlets and only c4% online State Population (m) % of US population Retail betting Online betting Online casino Pennsylvania 12.8 3.9% l l l New Jersey 8.9 2.7% l l l Nevada 3.0 0.9% l l l1 Mississippi
Slide 80: The Opportunity: Regulatory Roadmap to 2021
The Opportunity: Regulatory Roadmap to 2021 Additional 11 states + DC, (c23% of population) expected to be regulated by 2021 State Population (m) % of US population Retail betting Online betting Online casino New York 19.5 6.0% l l l Illinois 12.7 3.9% l l Michigan 10.0 3.1% l l l Massachusetts 6.9
Slide 81: The JV: A Winning Combination
The JV: A Winning Combination Combination of established brands, proprietary technology and market access will create a leading position in the US Established brands Proprietary technology Online: GVC Technology Retail: GVC Stadium Technology Market access 19 states; expect to access all markets tha
Slide 82: Market Access
Market Access The JV is well-placed with current access to 19 states; expect to enter every regulating state where commercially viable ME WA VT NH MA MT ND MN NY OR ID RI WI MI SD CT PA NJ WY IA DE NE OH MD NV IL IN WV VA D.C. UT KY CA CO KS MO NC TN SC OK AR AZ NM GA MS AL TX LA AK FL Legend – lega
Slide 83: Operating Model
Operating Model NGR run-rate of over $100m across Retail, Online and B2B RETAIL ONLINE B2B Technology and product: proprietary, flexible, omni-channel sports and gaming platform SPORTS Trading: 600 traders globally, dedicated US-based team, proprietary trading models Marketing and BI: leveraging lea
Slide 84: Progress Since JV Formation
Progress Since JV Formation Putting an optimal structure in place to capitalise on the long-term opportunity • Management team now in place: CEO, CMO, CTO, CHRO • Head office established in Exchange Place Jersey City, minutes from Manhattan • Hiring progressing well – current 70 FTEs • Dedicated tec
Slide 85: Technology
Technology Powerful proprietary technology is resource backed and provides operating leverage OMNI-CHANNEL DEVICES IOT MOBILE TABLET API SERVICES US Retail 2 WAY INTEGRATION SERVICES Full US Online: H219 US Online US Online US Online US Online (light) STADIUM SPORTS CASINO POKER BINGO SPOR
Slide 86: Roadmap: Product
Roadmap: Product Full product range available to customers ahead of the new NFL season 86
Slide 87: Technology and Product Milestones
Technology and Product Milestones Launch on the GVC technology platform in H2 2019 will significantly enhance offering In-play sports-betting on New sports-betting mobile mobile and desktop and desktop front-end Online sports- Borgata Sports on betting on desktop mobile and desktop Additional GV
Slide 88: US Marketing
US Marketing Matt Prevost CMO – ROAR Digital (US JV) GVC Holdings PLC | Capital Markets Day | 16 May 2019 88
Slide 89: Introduction
Introduction Agenda Matt Prevost - Marketing strategy CMO – ROAR Digital - 2019 roadmap (US JV) Previous roles include: Previous sector roles CMO – US JV 6 years within • Cerberus include: since January 2019 the gaming sector • Avon - Chief Digital • Coral Interactive – CMO Officer • McKinsey & Co.
Slide 90: Marketing Strategy
Marketing Strategy Building the foundation for growth; ready for the start of the 2019 NFL season Leverage powerful Highest awareness of Las Vegas resort operators at c90% MGM brand Extend MGM’s investment 50+ marketing deals including MLB, NBA, NHL and MLS in sports partnerships Develop data-driven
Slide 91: Leverage Powerful MGM Brand
Leverage Powerful MGM Brand Very high awareness of the MGM brand enables higher ROI acquisition spend • Highest awareness among the Las Vegas resort operators (c90%) • 32m+ M Life Rewards members • Operates 8 of the top 12 brands in Las Vegas • 7m+ annual guests at MGM properties • Significant regio
Slide 92: Leverage Powerful MGM Brand
Leverage Powerful MGM Brand Very high awareness of the MGM brand enables higher ROI acquisition spend Video 92
Slide 93: MGM: Significant Commitment to Sports
MGM: Significant Commitment to Sports Driving awareness and loyalty through sports partnerships Billions of advertising impressions annually National Regional Las Vegas Hosted-events provide opportunities for VIP engagement as well as new player acquisition Stanley Cup Canelo vs. GGG Pac 12 The Matc
Slide 94: Building an Unmatched Omni-Channel Experience
Building an Unmatched Omni-Channel Experience Efficient player acquisition and retention Customer Journey (Las Vegas example): MGM Guest 1 MGM Guest Reservation Reservation Online sports-betting introduced pre-arrival (Awareness) 1 2 MGM Guest Arrival Incentives to trial retail and online experi
Slide 95: Marketing Roadmap: Early Focus
Marketing Roadmap: Early Focus Activity will ramp-up considerably with product and retail sportsbook development • Invest in team development; continue to leverage GVC capabilities Capability • Integrate marketing efforts with MGM marketing campaigns Development • Build-out M Life points integration
Slide 96: Going Forward
Going Forward Technology launched ahead of the NFL season, providing the full GVC product offering Full marketing deployment in H2 2019, leveraging Group expertise Further develop and capitalise on the omni-channel opportunity 96
Slide 97: Regulation and Responsible Gambling
Regulation and Responsible Gambling Rob Hoskin - Group Director of Legal and Regulation Grainne Hurst - Director of Responsible Gambling GVC Holdings PLC | Capital Markets Day | 16 May 2019 97
Slide 98: Introduction
Introduction Picture Picture Rob Hoskin Grainne Hurst Group Director of Legal Director of Responsible and Regulation Gambling Previous sector roles Group Director of Legal include: and Regulation since Director of Responsible • Ladbrokes Coral – February 2016: previously 14 years within Gambling Dir
Slide 99: Key Messages
Key Messages Regulatory agenda is broad; regulation can benefit scale operators with established brands Decisive action being taken by GVC on Responsible Gambling initiatives Positive direction of travel on German regulation 99
Slide 100: Regulation Summary
Regulation Summary Scale, diversification and multi-channel offerings are advantages in new markets and markets where regulation is increasing • Key themes: Regulating Advertising Responsible UK Germany Markets Restrictions Gambling • As a global operator we have a broad regulatory agenda (we operat
Slide 101: Regulated Markets Drive Growth
Regulated Markets Drive Growth Over 90% of Group revenues are derived from taxed or regulated markets The Group’s largest unregulated1 markets are Netherlands and Brazil, both of which are Advantages of regulated markets expected to regulate in the next 2 years Brazil Market growth • The Brazilian
Slide 102: Regulated Markets: Tax
Regulated Markets: Tax We are already well-taxed in all major regulated territories Group Key Sports Gaming Top 10 Online Countries Online 30%+ Tax Rate Tax Rate NGR Share GGR UK 36% 15% GGR 21% GGR 15% - 29.99% GGR Germany 15% 5% stakes 16% GGR 0% - 14.99% GGR Australia 9% 17%-24% GGR n/a Italy 7%
Slide 103: Advertising Restrictions
Advertising Restrictions Advertising restrictions are a growing theme UK Whistle-to-whistle live sport TV advertising ban (August 2019) • High street signage and well-established multi-channel offering are a competitive advantage • Voluntary industry collaborative initiative Australia Whistle-to-whi
Slide 104: UK – The Landscape Has Already Changed
UK – The Landscape Has Already Changed Major Responsible Gambling changes have already been implemented in our UK businesses over the last three years Step-change in customer affordability, source of funds, and responsible gambling intervention % increase from 2016 Compliance (source of funds) inter
Slide 105: Our Approach to RG – Changing for the Bettor
Our Approach to RG – Changing for the Bettor Identification of problem gambling behaviour and effective intervention Aim to be the most CHANGING trusted and enjoyable betting operator in the world FOR THE Markers of harm triggers will identify problem gambling behaviour driving BETTOR effective
Slide 106: Our Approach to Responsible Gambling
Our Approach to Responsible Gambling Decisive action being taken to improve player protection – we have a plan and are making good progress GVC call for action in the UK Increase in GVC funding for research, education Industry-wide ban on UK TV sports-betting adverts and treatment from 0.2% to 1% of
Slide 107: Germany: Overview
Germany: Overview German regulatory framework is complex, but the direction of travel is positive • German regulation is set by the 16 Lander (states) • GVC and other operators offer both online sports-betting and online gaming on the basis of • EU law • Being one of the original successful sports-b
Slide 108: Germany: Roadmap to 2021
Germany: Roadmap to 2021 The Lander vote on 21 March 2019 sets a clear pathway to regulation Key expected regulatory developments: April 2019: Schleswig-Holstein Q1 2020: Hesse initiates legislative process to Q3 2019: Hesse expected to expected to issue A continue regulated online casino provide de
Slide 109: Going Forward
Going Forward Decisive actions on Responsible Gambling Collaborative approach to working with regulators Finalising and implementing plans for a regulating Germany 109
Slide 110: Australia
Australia Jason Scott CEO - Australia GVC Holdings PLC | Capital Markets Day | 16 May 2019 110
Slide 111: Introduction
Introduction Agenda - Overview Jason Scott - Australian Market Picture - People CEO - Australia - Technology - Product - Marketing Previous sector roles CEO Australia Previously 15 years within include: since the 2017 ladbrokes.com.au the gaming sector • Tatts Group trading director • Humbleton Pty
Slide 112: Key Messages
Key Messages Australia is a core, profitable market for the Group with potential long-term regulatory upside Market-leading product innovation and marketing is driving outperformance Neds acquisition provides greater scale, dual brands, best-of-both management and improved technology KEY ENABLERS TE
Slide 113: Growing Market Share
Growing Market Share Ladbrokes.com.au NGR has grown 166% since 2015, significantly outperforming the market 2012 2013 2014 2015 2016 2017 2018 2019 Launched as Acquisition by Acquired Launched First to market Acquisition Bookmaker.com.au Ladbrokes plc Betstar exclusive Cash- with OddsBoost of Neds I
Slide 114: Australian Market
Australian Market Australian market is high growth with long-term regulatory upside 1 High Growth Online Market Recent Regulatory Developments A$bn • Credit betting ban 30 25 • TV advertising restrictions 20 15 • POCT commenced in all states 10 5 • National Consumer Protection Framework 0 implemente
Slide 115: Australia Market: Post POCT
Australia Market: Post POCT Market is competitive, but expect POCT mitigation through price • Point of Consumption tax now introduced in all major states • Average effective rate: 11.5% of GGR • Including POCT, total taxes paid to Government and horse racing is now c35% of GGR – highlights importanc
Slide 116: People: Australia Team
People: Australia Team CEO Jason Scott Chief Financial Officer Chief Marketing Officer Chief Digital Officer Lachlan Murray James Burnett Chris Ward Chief Technology Officer Chief Product Officer Trading Drew Wareham Mick Horne David Horne Chief Operations Officer Gary Shannon 116
Slide 117: Technology Platform
Technology Platform Acquisition of Neds enables refresh of the Ladbrokes.com.au technology platform The Neds platform is a scalable, modern, cloud-first architecture: • Mobile-first single codebase allows for highly efficient single execution of product delivery, ensuring rapid speed to market for n
Slide 118: Product Innovation
Product Innovation Ladbrokes.com.au and Neds have a track record of leading product innovation 118
Slide 119: Product Innovation
Product Innovation Ladbrokes.com.au and Neds have a track record of leading product innovation Ladbrokes Odds Boost Neds Toolbox • >9.5m Odds Boosts used by customers in 2018 • Personalised bucket of “value” for customers to use as they like • Available on racing, sports and multis, further variants
Slide 120: Product Innovation
Product Innovation Legends Boost is the latest example of product innovation to be released in the market Video 120
Slide 121: Marketing: Strategy
Marketing: Strategy Standout marketing has firmly established Ladbrokes as part of the Australian betting culture 121
Slide 122: Marketing: Brand
Marketing: Brand Neds acquisition provides the benefits of a dual-brand strategy Brand Snapshot Well established brand with All rounder app substance and integrity fun, fast and innovative Customer Needs New technology innovation and Trusted, reliable service novelty Customer Type Considered and loo
Slide 123: Marketing: CRM
Marketing: CRM Best-of-both CRM approaches adopted as part of Neds integration; also leveraging Group capability • Personalisation based on customer preferences • Digital marketing excellence • Highly scalable reactivation techniques • Timely reminders of previous successes • Leveraging Group capabi
Slide 124: Going Forward
Going Forward Deliver benefits of a dual-brand strategy Rigorous focus on CRM and product development Leverage benefits of the Neds technology platform and wider Group capabilities 124
Slide 125: Financials
Financials Rob Wood CFO GVC Holdings PLC | Capital Markets Day | 16 May 2019 125
Slide 126: Guidance Updates
Guidance Updates Upgrade to synergy and triennial review guidance • Acceleration of Ladbrokes Coral synergy recognition due to earlier platform migrations: • £15m additional cost synergy recognised in 2020 • No change to overall quantum of £130m • Triennial Review impact is better than expected: • £
Slide 127: Long-term Profit Growth
Long-term Profit Growth Double-digit Online NGR growth delivering sustainable long-term profit growth and cash generation • Longer-term commitment to double-digit Online NGR growth, providing platform for strong EBITDA growth • Strengthening Online EBITDA margin, rising to 30% over time • Strong cas
Slide 128: Wrap-up
Wrap-up Kenneth Alexander Chief Executive GVC Holdings PLC | Capital Markets Day | 16 May 2019 128
Slide 129: Key Messages
Key Messages GVC is a truly global operator, gaining market share in all major territories The GVC operating model is highly effective and is a sustainable competitive advantage; we are exceptionally well placed for future growth Continued outperformance is driven by operational excellence 129
Slide 130: Q&A
Q&A GVC Holdings PLC | Capital Markets Day | 16 May 2019 130