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2014 Interim Results and Trading Update

2014 Interim Results and Trading Update “ Delivering returns today, building for greater returns in the future ”. Contents. Overview Strategy Results and current trading Operating review and product development Investments and business development Regulatory update Challenges Summary.

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2014 Interim Results and Trading Update

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  1. 2014 Interim Results and Trading Update “Delivering returns today, building for greater returns in the future”

  2. Contents • Overview • Strategy • Results and current trading • Operating review and product development • Investments and business development • Regulatory update • Challenges • Summary

  3. Overview “Delivering first class returns today, building for an even more successful future” “Five consecutive quarters of growth” • Interim results • Clean EBITDA up 26% to €22.4 million • NGR up 44% to €105 million • Quarterly dividend of 12.5 €cents enhanced by “special” of 2.5 €cents – 96% increase over 2013 • World Cup was a complete success on all fronts: customer acquisition / sports margin/proved system capabilities and stability • Current trading, NGR at €628k per day is up 20% on Q3-2013 • Further market launches planned for 2015; strategic investment in Scandinavia already made • GVC aim is to aggressively grow; earnings, dividends and SH value through: leveraging/developing our platform; entering new markets, driving synergies on acquiring non-dilutive acquisitions GVC has never been in a stronger position than now

  4. Strategy • Continue aggressive, profitable growth and cash generation • Enhance product to make Group market leading • Localise product for new markets; Spanish Latam and some Asian markets • Continue investment in “in-play” product - expected to drive growth • Invest more on in-house mobile / tablet product – another driver of growth • Maintain dividend policy: 75% of free cashflows + specials when circumstances permit • Continue to attract people-talent

  5. Trading : last 5 quarters

  6. Financial review • Business model (slide 7) • P & L (slide 8) • Cashflow (slide 9) • Balance sheet (slide 10)

  7. Business model, based on H1-14 Betboo earnout + corp tax etc. * For investment and dividends

  8. P&L – normalised* * Excluding exceptional items

  9. Cashflow

  10. Balance sheet

  11. Operational review • Revenues and KPI’s • Product and business development • Regulatory position

  12. Group : revenue by business

  13. Group: KPIs

  14. Sportsbook: revenue

  15. Sportsbook: KPIs

  16. B2B: revenues • Counterparty contract with East Pioneer Corporation • Business performing well, • Difficult comparison to H1-2013 with volatile high-rollers • H1-2014 up 8% on H2-2013 • Stronger management recruited • Turkish Lira FX rates still weaker than 2013, but stronger than Q1-2014

  17. Latam: revenues and KPI’s

  18. Other sports markets • Strong performance across all territories • World Cup brought in growth • Excellent, incentivized management teams

  19. CasinoClub • Excellent management retains loyal customers • Product limitations through bought-in software, but very stable • Mobile launch planned Q1-2015 • Stand-alone EBITDA over €7 million for H1-2014 (50% EBITDA multiple) • Pays 50% of Group dividend

  20. Developments • Sportsbook development • In-play • Mobile • Sports platform • Gaming • Business development

  21. Product development : “in-play” • “Around 70% of sports wagers from the in-play product” • Crucial to success of GVC – our aim is to have a market leading product • Since GVC acquired Sportingbet, significant development and improvement • Plans: more live streaming, and more markets • Q1-2015, new product launch to drive further customer engagement • Maximum number of concurrent in-play markets (up over 100%) • August 2013 – 1,843 • August 2014 – 3,564 • September 2014 – already hit 4,102 • Number of Monthly In-Play Events, • H1-2013 - 65,337 • H1-2014 - 81,234

  22. Product development: mobile / tablet • Mobile GGR averages 22% of total GGR across all markets (from a low inherited base), but in some markets it is already as high as 65% • Core product, being developed with highly skilled in-house team • New mobile web tablet products for sportsbook and casino • New native iOS mobile sportsbook • New native iOS mobile casino • Upgraded native iOS tablet sportsbook • Native Android sportsbook – next year • Development team increased from 17 to 50 during 2014 and incurred circa €2 million in cost

  23. Product development : Sportsbook • New Sportsbook Bonus Engine across all platforms (web and mobile) • Expanded Basketball product range • 11,000 new streamed events annually on all platforms • New trading models for Football and Tennis – 1 game per trader, now up to 8 games per trader • Full re-design on all platforms • Cutting-edge new product launch planned for 2015

  24. Business development • Latam expansion into Spanish speaking markets via partnerships in Q4-2014 • Asia team being recruited ahead of 2015 launch • Other B2B deals in pipeline • Impressed with Betit management and their rapidly growing business and market share • Continued focus for all deals is earnings and dividend enhancing

  25. Regulatory • Germany • An Administrative Court in Wiesbaden has put a temporarily halt on Germany’s plans to award 20 federal sports betting licences following an appeal from a number of operators • United Kingdom • New licensing regime takes effect 1 October 2014. Combined remote operating licence granted already. POC is a real cost to the business, if H1-2014 was restated, the EBITDA would have been €0.75 million lower. • Bulgaria • First part of local licence application submitted • Denmark / South Africa / Philippines • Already licenced • Turkey • GVC provides full B2B service to customers of EPC • Regulatory environment unchanged with government monopoly

  26. Challenges and pressures • Regulatory • World Cup, not less than €2 million in EBITDA value absent in 2015 • POC – current impact estimated at €1.5 million • Development expenditure on mobile continues and has profit lag • New market launches take time to break-even • These pressures expected to be offset and exceeded through customers acquired during World Cup and beyond as illustrated in Q3-2014.

  27. Summary • GVC is highly profitable and diversified with excellent growth prospects • Excellent growth • Q3-14 NGR per day 20% higher than Q3-13 • Fifth consecutive quarter of growth. • Sportingbet acquisition transformational with now a market leading: • Sportsbook • Mobile product (in-house) • Trading team • Highly experienced and motivated management across the organisation • Aggressive product and new market launches planned • Highest paying dividend company in sector • Board very confident on future prospects

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