Kambi Group plc Q1 Report 2017 26 April 2017 Outline for today
1 Kambi overview and highlights
2 Financial update
3 New customer signing
4 Regulation update
5 Retail update
6 Summary
7 Q&A
2 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Kambi overview
TOP PERFORMING OPERATORS TURNKEY SPORTS BETTING SERVICE
571 EMPLOYEESEMPLOYEES STOCKHOLM LONDON BUCHAREST MALTA
MANILA
SYDNEY
3 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Highlights and key events
− Strong turnover growth from our operators − Continued solid cash flow generation − Quarter significantly affected by player-friendly results +27% − One new customer agreement: Greentube Operator Turnover growth − Kambi awarded the ISO 27001:2013 certification
4 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Financial headlines
Revenue (€m) Operating Profit (€m) Net cash (€m) 16 2.5 24
23.5 2 14 23
1.5 22.5 12 1 22
21.5 10 0.5 21
8 0 20.5
Q1 2017 Q1 2016
5 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Operator trading analysis Operator turnover & trading margin
300 10.0% 281 − The graph shows Kambi’s operators’ 275 quarterly betting turnover and trading 250 242 9.0% 239 margin 225 221 219 203 − Operator turnover increased by 27% 200 8.0% compared to Q1 2016 175 163 160 147 150 7.0% − Player-friendly results accentuated by
124 125 119 accumulators led to a lower than 109 100 100 90 6.0% average trading margin 79 72 75 75 − Operator margin before marketing
50 5.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 deductibles was 6.2% 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017
Turnover Index Trading margin % before marketing deductibles Trading margin % after marketing deductibles
6 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Operator trading analysis Accumulators
‒ The chart shows the effect of player friendly sporting results during the last two quarters
‒ Accumulators have a higher and more
Q1/16 volatile margin than single bets Q1/17 ‒ The trading margin for single bets is higher for Q1 2017 than in Q1 2016, while the trading margin for accumulators has almost halved
Singles Accumulators
7 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Growth in operator turnover and Kambi revenue Q1 2017 vs Q1 2016
35%
30%
25%
20%
15%
10%
5%
0% FX impact Operator Turnover Growth Operator margin impact Taxes/marketing Other* Kambi Revenue Growth deductibles impact
*Other includes the impact of volume-related commission tiers and fixed revenues
8 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Income statement
€m Q1 2017 Q1 2016
Revenue 14.2 13.3
Operating expenses -12.9 -11.3
Operating profit 1.4 2.0
Finance costs / Tax -0.3 -0.2
Profit after tax 1.1 1.8
9 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Agreement signed with Greentube
‒ Agreement signed with operator Greentube, a subsidiary of Novomatic
‒ Kambi to provide sports betting services to complement Greentube’s online casino brands in regulated markets such as Spain, Italy, Germany and Romania
‒ We expect Greentube to launch into its first markets during the summer
10 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Regulation update
‒ Sweden is planning to regulate the online gambling market in 2019
‒ The Swedish market is one of the most important jurisdictions for Kambi
‒ The suggested tax rate of 18% will impact revenues both for Kambi and its operators
‒ For Kambi, this can lead to opportunities to sign new operators such as the state owned operators as well as new entrants to the market
Licenses: Alderney, Malta, Romania, Spain, UK Certifications: Denmark, Estonia, Italy Bringing the online pace to the retail space Retail Advancements
‒ A major retail gap was closed with a new User Interface for the self service terminals ‒ The depth, speed and quality of the online product, with optimised interaction and content presentation for the retail space. ‒ Built on the same empowerment platform that all Kambi operators have access to ‒ Showcases Kambi’s Scalable Differentiation model to deliver the most relevant User Experience
12 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Summary
Player-friendly New customer outcomes impacted Strong growth in signing - Greentube the trading margin our operators’ turnover, up 27%
13 Q1 Report 2017 – CEO Kristian Nylén & CFO David Kenyon 26/4/2017 Thank you Q&A