SLIDE 1
Q2 2018
GUSTAF HAGMAN VIKTOR FRITZÉN
Group CEO and Co-founder Group CFO 2Presenters
Q2 2018 Presenters GUSTAF VIKTOR HAGMAN FRITZN Group CEO and - - PowerPoint PPT Presentation
Q2 2018 Presenters GUSTAF VIKTOR HAGMAN FRITZN Group CEO and - - PowerPoint PPT Presentation
Q2 2018 Presenters GUSTAF VIKTOR HAGMAN FRITZN Group CEO and Co-founder Group CFO 2 The Leo Passion Leading the way into the mobile future 3 The growth company LeoVegas Strategy Strong company culture Expansions strategy Expand
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SLIDE 3
Leading the way into the mobile future
3The Leo Passion
SLIDE 4 4
The growth company LeoVegas
GameTech Effective marketing Strong company culture
Strategy
Expansions strategy Expand in regulated markets and markets that are soon be regulated, new product categories and to carry out strategic and complementary acquisitions Product Strategy To be the most innovative and creative company in the gaming industry SLIDE 5 5
Agenda
- Quarterly report highlights
- Responsible Gaming & Sustainability
- Business update
- Business KPIs
- Financial targets
- Financials
- Summary
- Q&A
SLIDE 6
Quarterly report
Highlights and events
6 SLIDE 7 10 20 30 4 50 60 70 80 90 20 12-Q 1 20 12-Q 2 20 12-Q 3 20 12-Q 4 20 13-Q 1 20 13-Q 2 20 13-Q 3 20 13-Q 4 20 14
- Q
- Q
- Q
- Q
Revenue since launch
87.4 MEUR 76% Q2’18 growth Y-Y 27% Q2’18 growth excl. acquisitions Y-Y (organic growth) 38% Q2’18 growth excl. acquisitions and closed markets (Australia) Y-Y SLIDE 8
Revenue:
87.4 MEUR
+37.7 MEUR EBITDA:
15.0 MEUR
17.2 % margin
NDCs
134 487
Growth: 84%
Growth:
+76 %
Organic growth: 27% Underlying organic growth 38%
Mobile deposits:
69 %
8Q2 2018 Highlights
SLIDE 9 9
Product mix and locally regulated NGR
Sport 8% ofGGR LiveCasino15% ofGGR
Casino Classic 77% ofGGR
Locally regulated NGR: 39%
SLIDE 10
Responsible Gaming & Sustainablility
10 SLIDE 11 11
- Being data driven is key
- Algorithms to detect unsound player behaviour
- Building the next generations responsible gaming system
based on machine learning
- Sustainable business
Responsible Gaming
SLIDE 12 12
Sustainability and key projects
Revenue:
5.6 MEUR
Revenue:
5.6 MEUR
Revenue March
4.0 MEUR
Revenue:
5.6 MEUR
New Front-end platform Key projects delivered before World Cup GDPR Compliance – primarily in the UK Long term and sustainable growth SLIDE 13
Business update
13 SLIDE 14 14
Market comments
Sweden Welcoming Sweden as a regulated market – more opportunities open up Application 1st of August 2018 Law to be implemented 1 January 2019 One of the largest gaming market in Europe Successful migration to our proprietary technology platform Rhino The coalition government in Italy has proposed a ban on all gambling advertising – very uncertain- utcome
SLIDE 15
Most popular bet:
Full time winner
PreMatch
64%
Margin
12.8%
+72%
Comparedto a normal footballmonth
Mobile:
80%
15World Cup fun facts – Cash Turnover
SLIDE 16 16
Executive management Strengthening the Executive management and increased focus on LeoSafePlay and sustainability
Viktor Fritzén – Senior advisor Stefan Nelson – New CFO Louise Nylén – Deputy CEO Richard Woodbridge – New COO Marcus Nylén - COO until Richard joins - after that solely focus on LeoVegas expansion Rikard Ljungman – Leave his position as CCO and focus only- n responsible gaming and LeoSafePLay
SLIDE 17 17
Royal Panda and Rocket X
Revenue Q2’18
13.4 MEUR
Revenue:
5.6 MEUR
EBITDA Q2’18
4.0 MEUR
30.0 % margin Revenue Q2’18
10.9 MEUR
EBITDA Q2’18
2.4 MEUR
21.8 % margin
SLIDE 18 18
compared to July last year Current Trading – Start of Q3
26.4 MEUR 45 %
NGR July 2018 an increased of
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Financial targets 2020
Revenue MEUR EBITDA 16 37 83 141 217 164,8 600 20 13 20 14 20 15 20 16 20 17 20 18 - H 1 20 19 20 20 ? 600 2 1 16 26 25 20 13 20 14 20 15 20 16 20 17 20 18 - H 1 20 19 20 20 ? ? ? 100 SLIDE 20
Business KPI’s
20 SLIDE 21
Q1’18 back-drop Q2’18
Q2’18 drivers
RDCs 13% Q-Q growth NDCs -8% Q-Q growth Revenue 13% Q-Q growth 146 063 NDCs 30.2 MEUR in marketing 30.5 MEUR in marketing Deposits 7% Q-Q growth
21 Excluding RX: 9% +1%Acquisition of Rocket X
Excluding RX: 4% Excluding RX:- 17%
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- New depositing customers
- The NDC base remains
- f Royal Panda and Rocket
- Returning Depositing
- RDC growth excluding the
Customer base
- 20
- cket
- yal
- cket
- yal
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- Average deposit per
- Average NGR per depositing
Average spend per customer
COMMENTS Deposits EUR per depositing customer NGR EUR per depositing customer- 50
- si
- 10
- s
- si t
- ti
- n of
- si t
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- 5,
- 50
- Marketing spend increased by
- f Rocket X since marketing
- NDCs decreased by 8% in the
- The Customer Acquisition
- Compared to the same period
- ROI in Q2’18 was high,
Marketing and customer acquisition cost
COMMENTS Marketing spend and Customer Acquisition Cost 227 30.5 MEUR SLIDE 25 S w e d e n 2 4 % N o r w a y & F in la n d 1 0 % D e n m a r k 8 % U K 2 8 % It a ly 3 % R e s t o f E u r o p e 1 8 % R e s t o f W o r ld 9 %
25
NGR by country and region
- Following the consolidation of
- f total
- NGR from locally regulated
SLIDE 26 26
- Game margin is defined as
- Hold is defined as NGR
- Game margin and Hold are
- Game margin in Q2’18 saw a
- Hold in Q2’18 increased to
- nly increased marginally
Game margin and Hold
COMMENTS Game margin % and Hold in % Margin Casino Classic Margin per platform Margin Live Casino Margin Sports book 3, 0 0 % 3, 20 % 3, 4 0 % 3, 6 0 % 3, 80 % 4 , 0 % 4 , 20 % 4 , 4 % 4 , 60 % 4 , 80 % 20 16-Q 2 20 16-Q 3 20 16-Q 4 20 17- Q1 20 17- Q2 20 17- Q3 20 17- Q4 20 18-Q 1 20 18-Q 2 LeoV eg as m arg i n R- yal
- cket
- rts
- ok m
- l d
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FINANCIALS
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- Adjusted EPS reached an all
- Adjusted EPS was EUR 0.13 or
- Adjusted earnings per share
- ne-time provisions and gains
- In Q2’18 only non-cash items
Record EPS
COMMENTS Adjusted* EPS EUR *Adjusted for listing-related expenses in Q1’17-Q1’18, expenses related to acquisitions in Q3’17-Q1’18, UK fine and gain on sale of asset in Q1’18 and item s relating to acquisitions including am- rtizations and discounting effects that are both non-cash, for details see page 21 in the quarterly report
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- In Q2’18 EBITDA was 15.0
- Cost of sales as a percentage
- f revenue decreased slightly
- Personnel expenses as a
- Adjusted* operating expenses
- Marketing in relation to
P&L per quarter adjusted
COMMENTS P&L MEUR adjusted* P&L ratios adjusted* *Adjusted for listing-related expenses in Q4’15, Q1’16, Q1’17-Q1’18, expenses related to acquisitions in Q3’17-Q1’18, provision for fine in the UK and gain on sale of asset- 2,5
- 10
- 10
- st
- f s
- f
- p
- ther
- 7,9%
- 20
- st
- f s
- f
- p
- ther
SLIDE 30 9,1 4,0 2,4
- 0,5
- 2,
- yal
- cket
- The LeoVegas platform/brand
- Royal Panda was 15.3% of
- n the back of a 30.0%
- Rocket X contributed with
EBITDA per business unit
COMMENTS EBITDA Q2 2018 MEUR *Adjusted for listing-related expenses in Q4’15, Q1’16, Q1’17-Q1’18, expenses related to acquisitions in Q3’17-Q1’18, provision for fine in the UK and gain on sale of asset 14.4% margin 30.0% margin 21.8% margin SLIDE 31
- 65,
- 60
- 55,
- 50
- 4
- 4
- 35,
- 30
- 1
- 1
- 5,
- f
- 58,
- 56,
- 54
- 52,
- 50
- 4
- 4
- 4
- 4
- 4
- f
- The marketing to revenue
- The marketing to revenue
- LeoVegas’ margins have
- The marketing to revenue
- LeoVegas will act
- pportunistically with
Marketing spend and margin
COMMENTS Marketing to revenue % (negative scale) and Adjusted* EBITDA margin %, quarterly 17.2% adjusted EBITDA m argin 12.9% adjusted EBITDA m argin Marketing to revenue % (negative scale) and Adjusted* EBITDA margin %, annually *Adjusted for listing-related expenses in Q4’15, Q1’16, Q1’17-Q1’18, expenses related to acquisitions in Q3’17-Q1’18, provision for fine in the UK and gain on sale of asset SLIDE 32 15,0
- 1.1
- 4.6
- 0.5
- 1.6
- 0.5
- 2,
- r t i
- n f
- r
- n s
- f
- Adjusted measures are
- Net income was 6.6 MEUR,
- In the adjusted measure the
- Adjusted Net Income was 12.9
From Adjusted EBITDA to Net Income
COMMENTS Q2’18 P&L from EBITDA to Net income, MEUR 6.2 MEUR in non-cash item s related to acquisitions affecting com parability that are excluded in adjusted profit m easures Adjusted Net Incom e 12.9 SLIDE 33 33
- The balance sheet at the end
- f Q2’18 is overall very
- Following the acquisition of
- The balance sheet total is
- On the asset side the main
- On the equity and liabilities
- ut related liabilities
- Overall working capital
Balance sheet
COMMENTS Assets MEUR 30 June 2018 Equity and liabilities MEUR 30 June 2018 Assets MEUR 31 March 2018 Equity and liabilities MEUR 31 March 2018 Balance sheet total 267 M EU R Cash and cash equivalents; 44,4 Current assets; 31, 5 Deferred tax assets; 1,5 Property, plant and equipm ent; 3,7 Intangible assets; 12, 4 Intangible assets related to acquisitions ; 72,0 Goodwill; 1 01,8 Equity; 6 4,8 Payables and accruals; 50,3 Player liability; 1 0,7 Other liabilities; 17,7 Bank loan; 84,8 Earn-out related liabilities; 39,2 Cash and cash equivalents; 49,4 Current assets; 30, Deferred tax assets; 1,5 Property, plant and equipm ent; 3,9 Intangible assets; 11,6 Intangible assets related to acquisitions ; 69,3 Goodwill; 1 01,8 Equity; 63, 5 Payables and accruals; 4 8,7 Player liability; 11, 7 Other liabilities; 8,1 Bank loan; 94,8 Earn-out related liabilities; 40,8 Balance sheet total 268 M EU R SLIDE 34 44,4 15,0 0,2 0,7 10,0
- 0.5
- 1.8
- 10.1
- 11.7
- 0.3
- f
- rki
- n of
- n of
- n of
- m
- p t
- g
- f
- perating
Cash flow
- Cash increased by 5.0 MEUR
- Cash flow from operating
- The increase in loan
- ffset by the deferred
- f Royal Panda
- The dividend paid during the
- Cash at the end of the
- t
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Summary
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Revenue growth of 76% and an EBITDA of 15.0 MEUR a 17.2% margin Organic underlying growth at 38% Acquisitions develop according to plan with strong margins Key projects and sustainability Italian business migrated to Rhino July NGR of 26.4 MEUR 45% growth Trending towards our financial targets
36Summary
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Q&A
37 SLIDE 38
APPENDIX
38 SLIDE 39 39
Regulated and soon to be regulated markets for LeoVegas
Markets where LeoVegas has a gaming license Country T ax structure 0.5% on Sports turnover and 1.5 KEUR per license 15% on GGR 20% on GGR Markets LeoVegas pays gaming taxes or VAT but without license* Country T ax structure 23% VAT on Casino 19% VAT on Casino, 5% on sports turnover 40% tax on GGR Soon to be regulated markets where LeoVegas has presence Country Expectation 18% on GGR Q1’19 29% on GGR expected 2020 *No local license regim e is in place Sports 1% on Turnover Det går inte att visa bilden. Casino 20% and Sports 22% on GGR Italy Ireland Denmark UK Malta Ireland Germany Austria Sweden The Netherlands SLIDE 40 Market size increase Marketing channels open up Decrease in marketing clutter Increase or decrease in competition Changing competetive position of Svenska Spel Supply chain absorbtion of tax Decrease in bonus costs 10 20 30 4 50 60 70 80 90 10 10 20 30 4 50 60 70 80 90 10 Po Positive / Nega gative Impa pact Pr Proba babi bility 40
Potential dynamic effects in the Swedish market after regulation
Effects when market regulates Marketing clutter Positive and negative effects assessed against probability of occurring More channels Competition Supply chain Bonus costs Market size may decrease as competitors scale back marketing to protect margins in marketing open up changes as small companies leave, but large UK operators could enter absorbs its share of the gaming tax just as in the UK market may decrease as competitors scale back to protect margins may increase Svenska Spel will change its competitive position SLIDE 41 41
Hypothetical EBITDA impact in Sweden with 18% tax on GGR
Example of potential EBITDA impact in market with 18% tax on GGR- This is a hypothetical
- n GGR is implemented
- Tax of 18% on GGR means
- There are several positive
- n EBITDA from the tax
- An increased market size has
- We expect that roughly half
- f the tax will naturally be
- ffset and half will impact
- Decreases in marketing can
- nuses
- p en
- nus
- n
- f t
- n
SLIDE 42
- Deposits from mobile
- Deposits from mobile
Mobile share of deposits
COMMENTS Deposits through mobile devices as a % of total deposits 50 % 55% 60 % 65% 70 % 75% 20 16-Q 2 20 16-Q 3 20 16-Q 4 20 17- Q 1 20 17- Q 2 20 17- Q 3 20 17- Q 4 20 18-Q 1 20 18-Q 1 M- b
- si t
- f t
- tal
SLIDE 43
- The LeoVegas brand was
NGR and Deposits per platform
COMMENTS Deposits per platform Q2 2018 MEUR NGR per platform Q2 2018 MEUR LeoVegas 80% Royal Panda 11% Rocket X 9% LeoVegas 72% Royal Panda 15% Rocket X 13% SLIDE 44 44
GGR per product type
- Sports book was 8% of GGR
- f 1 percentage point and
- Live Casino was 15% of GGR,
- Casino Classic was 77% of
- The reason the split by
SLIDE 45
- In Q2’18 deposits grew 59%
- On a sequential basis
- Growth rates per regions:
- Sweden 19%
- Other Nordics 57%
- UK 175%
- Rest of Europe 62%
- Rest of World 29%
- Deposits increased by 98.3
- Sweden 12.9 MEUR
- Other Nordics 19.4 MEUR
- UK 44.8 MEUR
- Rest of Europe 18.3 MEUR
- Rest of World 3.0 MEUR
Deposits
COMMENTS Deposits MEUR and Q-Q growth in deposits % Deposits MEUR by region % 5% 10 % 15% 20 % 25% 30 %- 50
- cket
- yal
- si t
- si t
- Q
- si
- 10
- f
- p
- f
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4 MAIN KPIS QUARTERLY
NDCs 134 487 (last quarter 146 063) RDCs 175 500 (last quarter 155 951) Deposits €266.3M (last quarter €247.5M) NGR €86.8M (last quarter €76.0) 46- 50
- Q1
- Q2
- Q3
- Q4
- si t
- 10
- Q1
- Q2
- Q3
- Q4
- 20
- Q1
- Q2
- Q3
- Q4
- 20
- Q1
- Q2
- Q3
- Q4