Light & Wonder, Inc. · ASX:LNW
Light & Wonder — Q4 2023 Earnings Presentation
29 slides from Light & Wonder's earnings presentation, Feb 27, 2024
Slide 1: Fourth Quarter 2023 Earnings Presentation
Fourth Quarter 2023 Earnings Presentation February 27, 2024
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: Delivered on Our Initiatives & Commitments
Delivered on Our Initiatives & Commitments Gaming FY 2023 - Financial Performance Returned to Shareholders Consolidated Consolidated Consolidated Share Buyback in 2023 Revenue AEBITDA(1) AEBITDA Margin(1) $2.9B $1.1B 39% $170M or 2.4M shares +16% YoY +22% YoY +300 BPS YoY Adjusted NPATA(1) Free Cash
Slide 4: The Leading Cross-platform Global Games Company
Continued Momentum throughout The Leading 2023 across All Businesses Cross-platform Consolidated Revenue Consolidated AEBITDA(1) Adjusted NPATA(1) Global Games $2,512 $2,902 $1,118 $913 Company $388 $770 $302 $682 $265 $109 +13% +16% +14% +22% 4Q22 4Q23 2022 2023 4Q22 4Q23 2022 2023 4Q23 2023 11 6 5
Slide 5: Achieved Double-Digit Growth on Exceptional Performance in the Quarter
Achieved Double-Digit Growth on Exceptional Performance in the Quarter Achieved Double-Digit Revenue Growth Across Gaming, SciPlay and iGaming • Grew Consolidated Revenue 13%; Consolidated AEBITDA(1) 14% YoY • Gaming Revenue +13% YoY, led by 31% growth in Global Gaming Machine Sales • SciPlay Revenu
Slide 6: 2023 Achievements & Awards
2023 Achievements & Awards Gaming International Gaming Awards • Multi-Channel Provider/Supplier Global Gaming Awards London • Retail Supplier of the Year Eilers & Krejcik 5th Annual EKG Slot Awards • Top New Mechanical Reel Core Game: BLAZING 777 TRIPLE DOUBLE JACKPOT WILDTM • Top Performing New Pre
Slide 7: Advancing on Strategic Initiatives to Fuel Further Growth
Advancing on Strategic Initiatives to Fuel Further Growth Gaming Execute on our growth pillars with differentiated product strategy and cross-platform initiatives Invest in our people, platforms and technology to drive sustainable future growth Optimize business operations and processes focusing on
Slide 8: Operational Highlights
Operational Highlights © 2024 LIGHT & WONDER 8
Slide 9: Capitalized on Existing Opportunities in Gaming Markets
Capitalized on Existing Opportunities in Gaming Markets Gaming IN $MILLIONS Key 4Q Gaming Highlights Revenue AEBITDA $1,850 • Gaming Revenue increased 13% YoY, primarily driven by Global Gaming Machine Sales growth of 31% $1,601 • Gaming Operations revenue up 7% led by increase in North $918 America
Slide 10: Results Supported by Performance in Key Metrics
Results Supported by Performance in Key Metrics Key 4Q Gaming KPI Highlights 4Q23 4Q22 Var% 2023 2022 Var% Gaming Operations KPI: U.S. and Canadian: • Gaming Operations growth was primarily driven by an increase Installed base at period end 31,220 30,630 ▲ 2% 31,220 30,630 ▲ 2% of 7% YoY in North Am
Slide 11: Executing on Product Roadmap Driving Further Growth in Gaming
Executing on Product Roadmap Driving Further Growth in Gaming Strategic Investments across Global Product Segments • Capitalizing on continued hardware momentum with expected HORIZONTM (DANCING DRUMS ULTIMATETM & UFL DOUBLE EXPLOSIONTM franchises) and L7T(1) (88 FORTUNESTM & HUFF N’ PUFFTM franchise
Slide 12: Extending Industry Leading Performance at SciPlay
Extending SciPlay Industry Leading Performance at SciPlay IN $MILLIONS Key 4Q SciPlay Highlights Revenue AEBITDA $777 • Revenue of $204 million, up 12% YoY, setting another record $671 driven by double-digit YoY growth in social casino business • AEBITDA of $69 million, up 17% YoY, benefiting from s
Slide 13: Expanding SciPlay Monetization Capabilities Across Portfolio
Expanding LeveragingCapabilities Across SciPlay Engine SciPlay Across Portfolio Portfolio of Games DTC Executing on Industry Leading Success Drivers • Quarterly record revenues for JACKPOT PARTYTM CASINO, QUICK HITTM SLOTS, GOLD FISHTM CASINO and 88 FORTUNESTM SLOTS Monetization AdTech SciPlay o Dri
Slide 14: iGaming Growth Supported by Content Launches & GGR Expansion
iGaming iGamingGrowth Supported by Content Launches & GGR Expansion IN $MILLIONS Key 4Q iGaming Highlights Revenue AEBITDA • Maintained record revenue of $70 million, up 13%YoY primarily $275 on continued momentum in the U.S. and international markets $240 • U.S. OGS(1) GGR(2) was up 23% driven larg
Slide 15: Enhanced Portfolio with Engaging Features and Content
Enhanced Portfolio with Engaging Features and Content More Leading Content Continued Focus on Content as Business Scales • First-party content accounts for over two-thirds of the total GGR(1) of the Top 20 games on OGS(2) across the US o Record GGR game launches with PIROTS 2TM and More Games ULTIMA
Slide 16: Financials
Financials © 2024 LIGHT & WONDER 16
Slide 17: Achieved Revenue Growth Supported by Strong Margins
Achieved Revenue Growth Supported by Strong Margins IN $MILLIONS Key 4Q & 2023 Highlights Consolidated Consolidated • Delivered Consolidated Revenue growth of 13% YoY in the quarter, maintaining strong margins across all businesses Revenue AEBITDA(1) $2,902 • Growth in Gaming primarily led by Global
Slide 18: Executing on Capital Allocation Strategies within Context of a Healthy Balance Sheet
Executing on Capital Allocation Strategies within Context of a Healthy Balance Sheet IN $MILLIONS Key Highlights Net Debt Interest • Ended the year with a principal face value of debt outstanding of $3.9 Leverage Ratio(1) Expense billion and net debt leverage ratio(1) of 3.1x, in targeted range(1)(2
Slide 19: Generated Strong Consolidated Free Cash Flow in 2023
Generated Strong Consolidated Free Cash Flow(1)(2) in 2023 IN $MILLIONS Key 4Q & 2023 Highlights 4Q22 4Q23 2022 2023 4Q23 Consolidated Free Cash Flow(1)(2): Net cash (used in) provided by Combined Consolidated Combined Consolidated operating activities $ (87) $ 167 $ (381) $ 590 • Consolidated free
Slide 20: Differentiated Value Proposition Focused on Execution
Differentiated Value Proposition Focused on Execution Streamlined business and transformed It’s all about THE GAMES 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 capabilities Focus
Slide 21: Appendix
Appendix © 2024 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 Management believes are less indicative of the ongoing underlying performance of continuing operations and are GAAP financial measures: Consolidated AEBITDA (represe
Slide 23: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) and reconciling Net debt leverage ratio. AEBITDA from discontinued operations is reconciled to Net EBITDA from Equity Investments income from discontinued operations, net of tax and includes the following adjustments: (1) Restructuring and other, which include
Slide 24: L&W Reconciliation of Consolidated AEBITDA, AEBITDA from Discontinued Operations and Combined AEBITDA
L&W Reconciliation of Consolidated AEBITDA, 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 from equity investments on slide 29. © 2024 LIGHT & WONDER 24
Slide 25: L&W Reconciliation of Adjusted NPATA
L&W Reconciliation of Adjusted NPATA Note: Unaudited, U.S. Dollars in millions. (1) Includes $7 million in impairment charges for the year ended December 31, 2023. © 2024 LIGHT & WONDER 25 (2) Includes an adjustment to remove $14 million in tax benefits related to the Divestitures.
Slide 26: 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, AEBITDA from discontinued operations and EBITDA from equity investments included in continuing operations. Refer
Slide 27: 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 28: L&W Reconciliation of Consolidated AEBITDA Margin
L&W Reconciliation of 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, AEBITDA from Discontinued Operations and Combined AEBITDA” for the periods pre
Slide 29: L&W Reconciliation of Earnings from Equity Investments to EBITDA from Equity Investments
L&W Reconciliation of Earnings 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. © 2024 LIGHT & WONDER 29