Kambi Group plc Q3 Report 25 October 2019, Stockholm Q3 Report – 25 October 2019 1 CEO Kristian Nylén & CFO David Kenyon
Agenda 1. Kambi overview & highlights 5. New product launch 2. Financial update 6. Events after Q3 3. Commercial agreements 7. Kambi initiative 4. Customer launches 8. Q&A Q3 Report – 25 October 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 834 A global tu Australia | Malta | Philippines | Romania | Sweden | U.K. | U.S. organisation employees Q3 Report – 25 October 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 Q3 Report – 25 October 2019 4 CEO Kristian Nylén & CFO David Kenyon
Highlights − Solid financial performance with 12% YOY 50% revenue growth − Operator turnover growth of 23%, operator trading margin of 8.5% − Signed two new customers, Penn National Gaming and JACK Entertainment − Completed multiple customer launches, of US population in states where including seven casinos in the US Penn National Gaming is present − Took the first legal sports bet in New York and launched on first day of regulation in Iowa and Indiana Q3 Report – 25 October 2019 5 CEO Kristian Nylén & CFO David Kenyon
Financial headlines Q3 Revenue (€m) YTD Revenue (€m) Q3 Operating Profit (€m) YTD Operating Profit (€m) 10 25 5 70 8 4 60 20 50 6 3 40 4 2 15 30 2 1 20 10 0 10 0 2018 2019 Q3 Report – 25 October 2019 6 CEO Kristian Nylén & CFO David Kenyon
Operator trading analysis Kambi operators' turnover and trading margin 450 11.0% 412 398 400 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 Q3 2019 Turnover Index Margin% Q3 Report – 25 October 2019 7 CEO Kristian Nylén & CFO David Kenyon
Kambi revenue conversion Q3 2019 vs Q3 2018 25% 20% 15% 10% 5% 0% Operator Turnover Growth * FX impact Operator margin impact Taxes/marketing deductibles Other ** Kambi Revenue Growth impact * Operator turnover growth shown is based on Q3 2018 exchange rates **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 Q3 Report – 25 October 2019 8 CEO Kristian Nylén & CFO David Kenyon
Income statement €m Q3 2019 Q3 2018 Change % Q3 YTD 2019 Q3 YTD 2018 Change % FY 2018 23.0 20.5 +12% 65.6 54.5 +20% 76.2 Revenue 19.6 16.3 +20% 57.0 46.0 +24% 63.5 Operating expenses 3.4 4.2 -18% 8.6 8.5 +0% 12.7 Operating result 2.3 3.3 -31% 5.8 6.5 -10% 9.8 Result after tax Q3 Report – 25 October 2019 9 CEO Kristian Nylén & CFO David Kenyon
Q3 Cash flow € ‘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 Q3 Report – 25 October 2019 10 CEO Kristian Nylén & CFO David Kenyon
Kambi signs Penn National Gaming Largest regional gaming operator in North America − Penn National Gaming operates 41 gaming properties across 19 US states, equal to half of the US population − Already live with Kambi’s on-property sportsbook in five casinos across Iowa, Indiana and Pennsylvania − Will leverage Kambi’s empowerment capability to launch a bespoke online product in 2020 − Ambitious management team with clear aim of being a market leader in the US Regulated states Online Retail Population (m) Pennsylvania Y Y 12.8 Currently Illinois Y Y 12.7 unregulated: New Jersey Y Y 9.0 Colorado, Florida, Indiana Y Y 6.7 Kansas, Louisiana, Iowa Y Y 3.1 Maine, Massachusetts, Michigan, Missouri, Mississippi 3.0 New Mexico, Ohio and Nevada Y Y 3.0 Texas West Virginia Y Y 1.8 52.1 Q3 Report – 25 October 2019 11 CEO Kristian Nylén & CFO David Kenyon
Kambi signs JACK Entertainment One of the leading gaming brands in Ohio − Jack Entertainment operates the JACK Cleveland Casino and JACK Thistledown Racino, both in Ohio − Has an established online presence in Ohio, the seventh most populous state in the US − Will launch on-property and online sportsbooks upon the passing of enabling legislation − Partnership could be extended into further US jurisdictions should commercially attractive opportunities arise Q3 Report – 25 October 2019 12 CEO Kristian Nylén & CFO David Kenyon
Kambi extends deals with DraftKings and NagaWorld Renewed contracts in both the US and Cambodia − New agreement significantly increased the − NagaWorld will continue to use Kambi to power number of states covered by the agreement to its two flagship properties in Cambodia nine − The operator will take a more comprehensive live − Since signing, Kambi has launched with package as it looks to continue its YOY growth DraftKings in New York, Pennsylvania, Indiana, Iowa and West Virginia Q3 Report – 25 October 2019 13 CEO Kristian Nylén & CFO David Kenyon
Customer launches in Q3 Kambi continues to lead in online and retail delivery 1 st in NY 1 st in IA & IN Took the first legal Launched on day Unibet made US In total, bet in New York State one of regulated debut online in New Kambi launched when launching with market opening Jersey and later customers into six Rush Street at Rivers in both Iowa launched retail in US states across Casino & Resort and Indiana Pennsylvania online and retail Q3 Report – 25 October 2019 14 CEO Kristian Nylén & CFO David Kenyon
Building out Bet Builder capability Multi Builder next evolution of accumulator betting − Bet builders and in-event combinations have quickly become hygiene factors for top tier sportsbooks, particularly in Europe − In Q3, Kambi launched Multi Builder, enabling players to combine Bet Builders, in-event combos and selections from other events − This provides players with unparalleled flexibility from a B2B perspective and is unmatched by all B2Cs, bar one − Kambi’s continuous focus on product shows why outsourcing the sportsbook to a premium provider is the right solution for tier one operators 50% 500,000+ within three weeks of launch, more than half a million Multi half of all in-event combinations Builder bets were placed in were Multi Builders Q3 following its August launch Q3 Report – 25 October 2019 15 CEO Kristian Nylén & CFO David Kenyon
Events after Q3 Further launches and award win Operational excellence Momentum continues Took first legal online Launched with Penn recognised when with seven US launches bets in Indiana with National Gaming in named Digital Supplier successfully completed Rush Street and two properties in of the year at Global so far in Q4 DraftKings Pennsylvania Gaming Awards Q3 Report – 25 October 2019 16 CEO Kristian Nylén & CFO David Kenyon
Kambi initiatives Regulation and compliance increasingly a competitive advantage − Kambi’s long-term focus on regulated markets leaves it well positioned to succeed in a regulated global market − Kambi is proactive in developing strong relationships with regulators, sharing best practice at an early stage − When combined with its scalable technology, Kambi’s partners can launch at speed, often first to market − Kambi’s approach to regulation and compliance has given its partners a competitive advantage, as seen in US Q3 Report – 25 October 2019 17 CEO Kristian Nylén & CFO David Kenyon
Summary Solid financial Global Gaming performance with Signed two major customers, Award recognising momentum building giving Kambi significant Kambi’s continued throughout the market access in the US global excellence quarter Q3 Report – 25 October 2019 18 CEO Kristian Nylén & CFO David Kenyon
Q&A Q3 Report – 25 October 2019 19 CEO Kristian Nylén & CFO David Kenyon
Thank you Q3 Report – 25 October 2019 20 CEO Kristian Nylén & CFO David Kenyon
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