Light & Wonder, Inc. · ASX:LNW
Light & Wonder — Q3 2023 Earnings Presentation
27 slides from Light & Wonder's earnings presentation, Nov 9, 2023
Slide 1: Third Quarter 2023 Earnings Presentation
Third Quarter 2023 Earnings Presentation November 9, 2023 © 2023 LIGHT & W ONDER
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: Continued Momentum across All Businesses Driving Significant Growth
Continued Momentum across All Businesses Driving Significant Growth The Leading Cross-platform Consolidated Revenue Consolidated AEBITDA(1) Adjusted NPATA(1) Global Games $1,830 $2,131 $815 Company $648 $731 $286 $278 $648 $235 $99 +13% +16% +22% +26% 3Q22 3Q23 9M22 9M23 3Q22 3Q23 9M22 9M23 3Q23 9M2
Slide 4: Achieved Milestones on Shareholder Value Enhancement Initiatives
Achieved Milestones on Shareholder Value Enhancement Initiatives Light & Wonder added to the S&P/ASX 200 Index as of October 18, 2023 • Expands exposure to a broader base of investors with varying investment mandates • Solidifies our position and profile in the Australian capital markets • Enables A
Slide 5: Capitalizing on Opportunities and Delivering on Operational Performance
Capitalizing on Opportunities and Delivering on Operational Performance Continued Double-Digit Revenue Growth Across All Businesses • Grew Consolidated Revenue 13%; Consolidated AEBITDA(1) 22% YoY • Gaming Revenue +11% YoY, led by 23% growth in Global Gaming Machine Sales • SciPlay Revenue +15% YoY,
Slide 6: Unlocking the Power of Our Global R&D Engine
Unlocking the Power of Our Global R&D Engine Game Content • Franchise extensions • Adding high-performing studios iVIEWTM Guard • Cybersecurity protection Omnichannel Proprietary Table Progressive Systems AI Player Engagement • Game launches & Jackpots Games • THREE CARD POKER • GM ATLASTM • L&W ENG
Slide 7: Operational Highlights
Operational Highlights © 2023 LIGHT & W ONDER 7
Slide 8: Strong Execution Driving Continued Growth in Gaming
Strong Execution Driving Continued Growth in Gaming Gaming IN $MILLIONS Key 3Q Gaming Highlights Revenue AEBITDA $1,354 • Gaming Revenue increased 11% YoY, led by strong Global Gaming Machine Sales growth of 23% $1,163 • Gaming Operations revenue up 3% driven by growth in $673 the North American ins
Slide 9: Delivered on Key Gaming Performance Metrics
Delivered on Key Gaming Performance Metrics Three Months Ended Sep Sep Key 3Q Gaming KPI Highlights FY22 FY23 Var% Gaming Operations KPI: U.S. and Canadian: • Gaming Operations growth was driven by YoY increase in North Installed base at period end 30,536 31,035 2% American Premium installed base, n
Slide 10: Launching New Cabinets and Progressing in Adjacent Markets
Launching New Cabinets and Progressing in Adjacent Markets New Cabinets Adjacencies LANDMARKTM Wheel HORIZONTM VLT(1) COAM(2) • Back in JUMBO cabinet • Oregon State Lottery to • Entering Georgia COAM • BLAZING 777TM & market in 1Q24 BONUS TIMESTM entering category, same pedigree place 1,175 KASCADAT
Slide 11: Continued Market Leading Performance at SciPlay
Continued SciPlay Market Leading Performance at SciPlay IN $MILLIONS Key 3Q SciPlay Highlights Revenue AEBITDA $573 • Revenue of $196 million, up 15% YoY, setting another record $489 driven by double-digit YoY growth in social casino business • AEBITDA of $61 million, up 42% YoY, benefiting from str
Slide 12: Leveraging SciPlay Engine Across Portfolio of Games
Leveraging LeveragingSciPlay SciPlayEngine EngineAcross AcrossPortfolio PortfolioofofGames Games DTC • 5th consecutive quarter of • 2nd consecutive quarter of record revenue record revenue • 1st over $100 Million • Successful cross-platform Monetization revenue quarter launch case study AdTech SciPl
Slide 13: iGaming Benefiting from Content Launches and GGR Growth
iGaming Benefiting from Content Launches and GGR Growth IN $MILLIONS Revenue AEBITDA Key 3Q iGaming Highlights $204 $178 • Held record revenue of $70 million, up 21%YoY primarily on continued momentum in the U.S market, strength of our original content launches and $3 million in certain termination
Slide 14: Expanding Original Content Roadmap & Capabilities
Expanding Original Content Roadmap & Capabilities U.S. Content Roadmap E.U. & U.K. Content Roadmap Key iGaming Highlights • Record U.S. game launch with Rich Little Piggies, over 200K players in the first 30 days(1) • Original content accounts for ~67% of GGR(1) of the top 20 games on our iGaming pl
Slide 15: Financials
Financials © 2023 LIGHT & W ONDER 15
Slide 16: Delivered Strong Revenue Growth and Margin Expansion
Delivered Strong Revenue Growth and Margin Expansion IN $MILLIONS Key 3Q & 9M Highlights Consolidated Consolidated • Achieved Consolidated Revenue growth of 13% YoY in the quarter, maintaining strong margins and cash flow generation on Revenue AEBITDA(1) strength across all businesses $2,131 • Growt
Slide 17: Reconstituted Credit Profile Provides Further Flexibility
Reconstituted Credit Profile Provides Further Flexibility Key Highlights Fixed vs Floating Debt (1) • Current debt profile at approximately 62% fixed and 38% floating mix • $700 million of Term Loan B interest rate exposure is hedged with a floating-to-fixed interest rate swap • Issued $550 million
Slide 18: Continued Focus on Free Cash Flow Generation
Continued Focus on Free Cash Flow(1)(2) Generation IN $MILLIONS Key 3Q & 9M Highlights 3Q22 3Q23 9M22 9M23 Net cash (used in) provided by Combined Consolidated Combined Consolidated 3Q23 Consolidated Free Cash Flow(1)(2): operating activities $ (351) $ 204 $ (294) $ 423 • Consolidated free cash flow
Slide 19: Leading the Future of the Games Industry
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 20: Appendix
Appendix © 2023 LIGHT & W ONDER 20
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company’s management (“Management”) uses the following non-GAAP financial measures in conjunction with perspective on performance, as the measure eliminates the effects of amortization of acquired intangible assets, GAAP financial measures: Consolidated AEBITDA (repre
Slide 22: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Free Cash Flow (representing free cash flow from continuing operations) Adjusted NPATA Free cash flow, as used herein, represents net cash provided by operating activities from continuing operations less Adjusted NPATA, as used herein, is a non-GAAP financial
Slide 23: L&W Reconciliation of Consolidated AEBITDA
L&W Reconciliation of Consolidated AEBITDA Twelve Months Three Months Ended Nine Months Ended Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 September 30, 2023 Reconciliation of Net Income Attributable to L&W to Consolidated AEBITDA Net income attributable to L&W $
Slide 24: L&W Reconciliation of Adjusted NPATA
L&W Reconciliation of Adjusted NPATA Three Months Ended Nine Months Ended September 30, 2023 September 30, 2023 Reconciliation of Net Income Attributable to L&W to Adjusted NPATA Net income attributable to L&W $ 75 $ 96 Net income attributable to noncontrolling interest 5 16 Net income from disconti
Slide 25: Reconciliation of Principal Face Value of Debt to Net Debt Leverage Ratio
L&W Reconciliation of Principal Face Value of Debt Outstanding to Net Debt Leverage Ratio As of September 30, 2023 Consolidated AEBITDA(1) $ 1,080 Total debt $ 3,877 Add: Unamortized debt discount/premium and deferred financing costs, net 46 Principal face value of debt outstanding 3,923 Less: Cash
Slide 26: Reconciliation of Operating Cash Flow 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 September 30, 2023 2022 Continuing Discontinued Consolidated Operations Operations(1) Combined(2) Net cash provided by (used in) operatin
Slide 27: L&W Reconciliation to Consolidated AEBITDA Margin
L&W Reconciliation to Consolidated AEBITDA Margin Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Consolidated AEBITDA (1) $ 286 $ 235 $ 815 $ 648 Revenue 731 648 2,131 1,830 Net income (loss) margin from continuing operations 11 % 3 % 5 % (11) % (2) Consolidated