Henrik Tjärnström
CEO
Q1 2014
29 April 2014
© Unibet Group plc 2014
e
Possibility to ask questions
via email
[email protected]
Key Report Highlights
Financial results
Business overview
Kambi spin off
Summary
© Unibet Group plc 2014
3
Q1 2014
– Key Report Highlights
GWR +14%
GWR excl FX +21%
Profit fr Operations +33%
SB margin combined 8.8%
29% of GWR from
re-regulated markets
31% of GWR from Mobile
© Unibet Group plc 2014
Continuing Strong Organic Growth!
Q1 2014 vs Q1 2013
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7
Continuing Strong Organic Growth!
Local currencies Q1 2014 vs Q1 2013
6.9 5.2
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
© Unibet Group plc 2014
Gross winnings revenue
Q1
Q2
Q3
Q4
138.3 147.5 154.4 197.2 234.7 59.3 51.1 45.3 54.1 43.8 GBPm 56.1 65.2 56.9 9 123.4 81.5 71.8 43.6 24.8 67.6 37.5 41.8 36.1 31.3 21.6 16.8Q1 2014 P&L FX impact v Q1 2013
SEK
10.699
9.982
+7.2%
NOK
10.081
8.732
+15.4%
EUR
1.208
1.175
+2.8%
DKK
9.014
8.763
+2.9%
Q1 14
Q1 13
Avg rate
Avg rate
Movement
GBPm
GWR decreased by approx.
-4.0
CoS / Opex decreased by approx.
+2.1
FX loss on operating items
-0.2
FX on borrowings
-PBT FX impact
-2.1
AUD
1.846
1.494
+23.5%
All currencies moved
in same direction v
Q1 2013
GWR & Cost impact is a pure translation effect – realised FX loss in Q1 was only GBP 0.1 m
Share of GWR
Reported Other Costs 36,879 38,831 49,580 53,512 13,959
Depreciation &
Amortisation -9,547 -9,198 -17,353 -18,916 -4,765
One-off Items – – 999 -1,148 –
FX gain/(loss) on Opex -1,244 -2,339 -985 -608 -243
Other Costs post D&A
and FX 26,088 26,690 32,241 32,840 8,951
GBP '000
Other Costs analysis
Excl. M&A costs
FY 2010 FY 2013
18%
© Unibet Group plc 2014 FY 201117%
FY 2012 1116% 14% 13%
2014 Q1 2009 2010 2011 2012 2013 2014EBITDA
GBPm 41.9 43.8 48.0 52.5 11.8 15.3 12.0 17.1 63.4 14.1 8.6 20.2 16.8Q1
Q2
Q3
Q4
21.3 13.1 12.9 13.42009 2010 2011 2012 2013 2014
Earnings per share development
1.132 0.957 1.154 1.270 GBP 0.238 0.378 0.292 0.526 0.387 0.203 0.120 © Unibet Group plc 2014 13 1.434 0.422
Q1
Q2
Q3
Q4
0.544 0.357 0.339 0.357Geographic & product balance
Gross winnings revenue over time
By product, %
By geography, %
Pre-game betting Poker Casino & Games Other Live betting Nordics Western Europe CES Other 2012 2013 31 25 21 29 24 20 22 24 26 15 16 17 15 19 21 20 19 21 8 7 7 6 6 5 4 4 3 43 49 51 46 48 50 50 48 45 3 3 4 3 3 4 4 5 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 53 53 55 53 54 53 55 51 48 11 9 8 9 8 11 10 9 9 32 34 31 31 33 32 30 36 39 4 4 6 7 5 4 5 4 4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 © Unibet Group plc 2014 15 2014 2014 0 50 100 150 200 250 300 350 400 450 500 550 600 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Active customers
2004 2005 2006 2007 2008 2009 2010 2011 Thousands 2012 2013 552,388 2014ARPU Development
© Unibet Group plc 2014 17 0 20 40 60 80 100 120 140GBP Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2011 2012 2013 201490 day ARPU
Sportsbetting gross margin
Combined
Before free bets After free bets
0 5 6 8 9 % 10 2 3 4 1 Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR 2007 2008 2009 2010 2011 Q1 7 2012Q2 Q3 Q4 YR Q12013Q2 Q3Q4 YR2014Q1
Q1 Digital marketing
© Unibet Group plc 2014
19
SEM over
of the new depositing players
fans
engagement
Social media
KAMBI SPIN OFF
Proposal for Unibet AGM Graham Stretch
CFO Unibet Group plc
Introduction to Kambi Kristian Nylén
CEO Kambi Sports Solutions
THE OPPORTUNITY
Kambi was formed to exploit the demand for a premium class
sports betting service targeting Tier 1 operators and National lotteries. The demand is being driven by:
The cost/benefits a managed service can bring utilising scale advantages Increased consumer demand for complex and labour intensive In-Play betting Local re-regulations across Europe creating a new demand for B2B services
A WORK CARRIED OUT SINCE 2010
The decision to develop Kambi as an independent B2B business was taken in 2010
A continuous separation process has been carried out since. Kambi’s business has grown steadily over the years and currently employs 330 people
A MARKET WORTH 40 BILLION EURO
Global sports betting gross win by geography (EURbn)
H2 Gambling Capital January 2014 – Global sports betting gross win 1,4% 44,1% 36,6% 1,8% 9,8% 6,4% Africa Asia Europe Latin America North America Oceania
MARKET OVERVIEW (CONT.)
European online sports betting gross win development (EURbn)
0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
03 04 05 06 07 08 09 10 11 12 13E 14E 15E 16E 17E 18E
GAMING MANAGEMENT SYSTEM
Integration layer (adapt & expansion API)
eCOMMERCE MANAGEMENT
Payment solutions, CRM, Loyalty, Responsible Gaming, Bonus etc
SPORTS BETTING
POKER
CASINO BINGO LOTTERY
KAMBI’S VALUE PROPOSITION
The main objectives are to provide Kambi’s customers with:
End user experience that enables the operator to maximize the turnover from their end users
Risk management that optimizes the margins for operators utilizing the advantages of the data within the network A future proof solution, as Kambi deploys new features every two weeks
User Experience
Width & Depth in Offering Quality in offering Risk Management
& Customer Intel Agile product development
KAMBI CREATING MARKET SHARE
Kambi is creating new markets as existing operators looking for outsourced solutions and new operators enter due to national re-regulation
Kambi’s service offering is market-leading, in terms of range, quality and time to market
Kambi is well positioned servicing multiple distribution channels A spin-off will create opportunities for organic growth and a broader customer portfolio
KAMBI IN Q1 2014
Kambi delivered all-time highs in Revenue and EBITDA in Q1 2014 Kambi’s Revenue for the quarter was EUR 7.7 million
(Q4 2013: EUR 6.2 million)
Kambi’s EBITDA for the quarter was EUR 1.4 million (Q4 2013: EUR 0.3 million)
Kambi was cash flow break even in Q1 2014
Kambi’s business is naturally linked to the main seasons for sports and results will vary with the sports betting margins achieved by Kambi’s customers
KAMBI SPIN OFF
Proposal for Unibet AGM Graham Stretch
CFO Unibet Group plc
Introduction to Kambi Kristian Nylén
CEO Kambi Sports Solutions
PROPOSAL TO AGM 20 MAY 2014
Unibet proposes to distribute all shares owned by Unibet in Kambi to Unibet’s shareholders – 1 Kambi share for each Unibet share/SDR held at record date
Proposal is designed as a dividend to meet the criteria of Lex Asea – no immediate tax cost
Value of dividend GBP 2.00255 per share (approx. SEK 22) in addition to already proposed cash dividend of GBP 1.10 per share (approx. SEK 12)
SECURING KAMBI’S FUTURE
Unibet is ensuring that Kambi will have a strong balance sheet at separation, with at least GBP 15 million in cash as a result of pre-separation financing
Five year commercial contract with Unibet provides security to Kambi – and also security of supply of top quality Sportsbook for Unibet
Commercial contract and financing structure contain change of control protections both to Unibet & Kambi
Unibet without Kambi
Although Kambi has made great
progress, it makes relatively small
contribution to Group EBITDA and
has a small negative cash flow
Separation will remove significant
opex/capex to give better visibility
of Unibet’s operating efficiency
Unibet restated financials to be
published after AGM approval
© Unibet Group plc 2014
35
Unibet without Kambi
On a proforma basis, Unibet would
have recorded EBITDA of GBP 20.2
million for the first quarter of 2014
after excluding Kambi’s result.
As a result of D&A and finance costs,
Unibet’s reported EBIT, PBT, PAT and
EPS for the first quarter would all have
been slightly improved by excluding
Kambi’s result
Q2 2014
– Kambi effect on Unibet
Kambi results will be included with
Unibet up to the date of separation
Unibet will record a one-off
non-cash gain on disposal of Kambi,
offset by Unibet’s transaction costs
© Unibet Group plc 2014 37
Summary
Continued strong organic growth
ATH in active customers, EBITDA, PAT
Profit from Operations +33%
Proposed dividend:
– Cash GBP 1.10
Leading the Re-regulation Agenda
Some operators are finally starting to
talk about re-regulation
But Unibet has been transforming this
business since 2010
Reality of re-regulation means taking
local licenses, paying tax and being part
of the solution
We look forward to constructive
engagement with politicians and other
stakeholders at Almedalen in June
© Unibet Group plc 2014