Kambi Group plc Q2 Report 24 July 2019, Stockholm Q2 Report – 24 July 2019 CEO Kristian Nylén & CFO David Kenyon
Agenda 1. Kambi overview & highlights 6. Market trends 2. Financial update 7. Kambi initiatives 3. Customer signing 8. Summary 4. Customer launches 9. Q&A 5. Events after Q2 Q2 Report – 24 July 2019 2 CEO Kristian Nylén & CFO David Kenyon
Kambi at a glance Leading B2B provider of premium end-to-end sports betting services Real-time B2C Operators End User sports data Technical Odds & platform trading Risk User management interfaces Sports betting value chain 777 A global tu Australia | Malta | Philippines | Romania | Sweden | U.K. | U.S. organisation employees Q2 Report – 24 July 2019 3 CEO Kristian Nylén & CFO David Kenyon
Kambi at a glance Leading B2B provider of premium sports betting services Business model 20+ Operators − Kambi mainly operates on a revenue share model, thus Kambi’s growth is dependent on its operators’ success − The foundation of the strategy is based on scalability and the majority of its cost base is fixed − Continuous investment into proprietary technology to maintain its market leadership − Highest level of corporate probity and integrity Q2 Report – 24 July 2019 4 CEO Kristian Nylén & CFO David Kenyon
Highlights 23% − Solid financial performance with 23% YOY revenue growth − Operator turnover growth of 26%, operator trading margin of 8.2% − Signed a new customer, BetWarrior − Took the first legal online sports bet in Pennsylvania with Rush Street Interactive (RSI) Revenue growth − Took the first legal bet in New York state with RSI at Rivers Casino & Resort Sportsbook Q2 Report – 24 July 2019 5 CEO Kristian Nylén & CFO David Kenyon
Financial headlines H1 Operating Profit (€m) Q2 Revenue (€m) H1 Revenue (€m) Q2 Operating Profit (€m) 22 48 3 6 18 32 2 4 14 16 1 2 10 0 0 0 2018 2019 Q2 Report – 24 July 2019 6 CEO Kristian Nylén & CFO David Kenyon
Operator trading analysis Kambi operators' turnover and trading margin 450 11.0% 398 400 10.0% 387 369 350 9.0% 334 307 300 8.0% 281 277 273 259 254 242 250 7.0% 239 221 219 200 6.0% 150 5.0% 100 4.0% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Turnover Index Margin% Q2 Report – 24 July 2019 7 CEO Kristian Nylén & CFO David Kenyon
Kambi revenue conversion Q2 2019 vs Q2 2018 35% 30% 25% 20% 15% 10% 5% 0% Operator Turnover Growth FX impact Operator margin impact Taxes/marketing Other* Kambi Revenue Growth deductibles impact *Other includes the impact of contract renewals, volume-related commission tiers and fixed revenues - - Denotes components of NGR from which Kambi's revenue share is calculated Q2 Report – 24 July 2019 8 CEO Kristian Nylén & CFO David Kenyon
Income statement €m Q2 2019 Q2 2018 Change % H1 2019 H1 2018 Change % FY 2018 Revenue 21.6 17.6 23% 42.6 34.0 25% 76.2 Operating expenses 19.1 15.2 26% 37.5 29.6 27% 63.5 Operating result 2.5 2.4 4% 5.1 4.4 17% 12.7 Result after tax 1.6 1.7 -5% 3.6 3.2 11% 9.8 Q2 Report – 24 July 2019 9 CEO Kristian Nylén & CFO David Kenyon
Q2 Cash flow € ‘000 47,000 46,000 45,000 44,000 43,000 42,000 41,000 40,000 39,000 38,000 Opening cash Operating profit Working capital Amortisation/Depn Development costs Tangible assets Other Closing cash Q2 Report – 24 July 2019 10 CEO Kristian Nylén & CFO David Kenyon
Kambi signs BetWarrior A Latin American focussed online operator − BetWarrior is a new operator founded by two former PokerStars directors − They will leverage Kambi’s empowerment functionality to create differentiated experiences − Planning to debut a Kambi-powered sportsbook by the end of 2019 Q2 Report – 24 July 2019 11 CEO Kristian Nylén & CFO David Kenyon
Customer launches in Q2 Kambi processes first legal online wager in Pennsylvania − Rush Street Interactive (RSI) was first online in Pennsylvania with its PlaySugarHouse sportsbook − Kambi also launched RSI brand BetRivers and Greenwood Gaming-owned Parx Casino − Kambi currently powers the first three sportsbooks live in the state, highlighting our speed-to-market − Kambi also supported the launch of a William Hill- branded sportsbook in Sweden Q2 Report – 24 July 2019 12 CEO Kristian Nylén & CFO David Kenyon
Events after Q2 Rush Street Interactive take first wager in New York State − Last week, Kambi processed the first legal wager in the state of New York in partnership with RSI − The sportsbook at Rivers Casino & Resort Schenectady includes 14 kiosks and four OTCs − The historic launch underlines Kambi’s ability to quickly gain licensure and launch partners − Kambi strengthened its partnership with Rank Group with a long-term extension. It will launch its Enracha brand online later this year Q2 Report – 24 July 2019 13 CEO Kristian Nylén & CFO David Kenyon
Regulation update Progress in Latin America and the U.S. − In Q2, Illinois, Iowa, Indiana and Tennessee have had sports betting bills pass into law − Iowa and Indiana are both aiming to have sports betting up and running by Q3 − Tennessee regulation is online only, meaning operators do not need to be tethered to retail establishment − Buenos Aires City, Argentina, passed sports betting regulation. A minimum of three licences will be issued − Buenos Aires province together with Buenos Aires City accounts for 40% of Argentinean population Q2 Report – 24 July 2019 14 CEO Kristian Nylén & CFO David Kenyon
Kambi initiatives American football product improvements − American football is the most popular sport in US, 15.8m therefore a premium sports betting product is essential 37% − Kambi’s US network showed 90% of active players viewers/week placed at least one bet on NFL of US adults say American − Half of new sign-ups placed their first bet on an Football is their favorite NFL 2018 average - sport to watch – basketball American football game last season 5% increase YoY is next with 11% − Kambi is building greater flexibility into technology platform to improve UX $500m+ − Improvements to trading model will improve in-play markets and reduce market suspensions wagered on football in N.J. last season Sources: https://news.gallup.com/poll/224864/football-americans-favorite-sport-watch.aspx Q2 Report – 24 July 2019 https://www.si.com/nfl/2019/01/02/nfl-television-ratings-viewership-rise-five-percent-2018 15 CEO Kristian Nylén & CFO David Kenyon https://www.thewrap.com/2019-nfl-draft-sets-nielsen-ratings-records/ https://www.nj.gov/lps/ge/docs/Financials/PressRel2018/December2018.pdf
Summary 23% Our market leading Kambi continues first- Solid financial Sportsbook continues mover momentum performance with to provide speed-to- in the US with 23% YOY revenue market and financial Pennsylvania & growth success for our New York launches operators Q2 Report – 24 July 2019 16 CEO Kristian Nylén & CFO David Kenyon
Q&A Q2 Report – 24 July 2019 17 CEO Kristian Nylén & CFO David Kenyon
Thank you Q2 Report – 24 July 2019 CEO Kristian Nylén & CFO David Kenyon
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