KambiGroup plc Q1 Report 24 April 2020
Agenda 1. Kambi overview 2. Quarterly highlights 3. Financial update 4. Coronavirus impacts 5. US launches 6. Sports update 7. Q&A Q1 Report – 24 April 2020 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 Risk platform management User Odds & interfaces trading Sports betting value chain 863 A global tu Australia | Malta | Philippines | Romania | Sweden | U.K. | U.S. organisation employees Q1 Report – 24 April 2020 3 CEO Kristian Nylén & CFO David Kenyon
Kambi at a glance Leading B2B provider of premium end-to-end sports betting services Business model 20+ partners, including: − 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 Q1 Report – 24 April 2020 4 CEO Kristian Nylén & CFO David Kenyon
Q1 highlights Record performance to mid-March − Strong financial performance with 33% year-on-year revenue growth 33% − Operator turnover growth of 27% with an operator trading margin of 9.3% − Average daily turnover to 12 March up 47% year-on- year and up 7% sequentially − Took first legal bets in both Illinois Kambi revenue growth and Michigan – Kambi now live in 10 US states revenue growth Q1 Report – 24 April 2020 5 CEO Kristian Nylén & CFO David Kenyon
Financial headlines €m Q1 Revenue Q1 Operating Profit Net cash at end of Q1 30 40 8 7 38 6 25 5 36 4 34 3 20 2 32 1 15 0 30 2019 2020 Q1 Report – 24 April 2020 6 CEO Kristian Nylén & CFO David Kenyon
Operator trading analysis Kambi operators' turnover and trading margin 600 12.0% 560 550 11.0% 505 500 10.0% 450 9.0% 412 398 387 400 8.0% 369 350 334 7.0% 307 300 6.0% 281 277 273 259 254 242 239 250 5.0% 221 219 200 4.0% 150 3.0% 100 2.0% 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 Q4 2019 Q1 2020 Turnover Index Margin% Q1 Report – 24 April 2020 7 CEO Kristian Nylén & CFO David Kenyon
Kambi revenue conversion Q1 2020 vs Q1 2019 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Operator Turnover FX impact Operator margin impact Taxes/marketing Other** Kambi Revenue Growth Growth* deductibles impact * Operator turnover growth shown is based on Q1 2019 exchange rates **Other includes the impact of volume-related commission tiers and fixed revenues - - Denotes components of NGR from which Kambi's revenue share is calculated Q1 Report – 24 April 2020 8 CEO Kristian Nylén & CFO David Kenyon
Income statement €m Q1 2020 Q1 2019 Change % FY 2019 Revenue 27.9 21.0 +33% 92.3 Operating expenses 21.1 18.4 +15% 77.6 Operating result 1 6.8 2.6 +162% 14.7 Result after tax 2 4.8 2.0 +141% 10.4 1 Operating result before items affecting comparability in Q1 2020 (bad debt expense of €0.6m) 2 Result after tax includes items affecting comparability in Q1 2020 (bad debt expense of €0.6m) Q1 Report – 24 April 2020 9 CEO Kristian Nylén & CFO David Kenyon
Q1 Cash flow € ‘000 55,000 54,000 53,000 52,000 51,000 50,000 49,000 48,000 47,000 46,000 45,000 44,000 43,000 Q1 Report – 24 April 2020 10 10 CEO Kristian Nylén & CFO David Kenyon
Financial outlook Impact on sporting calendar Quarterly operating costs Major cost saving reduces revenues to 25-30% whilst current circumstances programme introduced of previous levels persist will fall by 20-25% Quarterly cash outflow of Q2 cashflow significantly Strong Balance Sheet with €7-9m until the sporting more favourable due to €46m cash puts us in a calendar resumes working capital movements good position Q1 Report – 24 April 2020 11 CEO Kristian Nylén & CFO David Kenyon
Coronavirus mid-to-long-term impacts Short-term negativity could lead to longer-term opportunity Europe Online Betting GGR − Due to postponements, sporting calendar expected to be busier than normal in coming years − Jurisdictions will expedite regulation of online sports betting due to impact on retail sector − Situation serves as a reminder of the benefits of € million outsourcing to a high-quality third-party 2008 financial crash − Sports betting industry has previously shown resilience during times of wider economic pressure 2006 2020 Q1 Report – 24 April 2020 12 CEO Kristian Nylén & CFO David Kenyon
Making history First to market in Illinois and Michigan − In Illinois, Rush Street’s Rivers Casino in Chicago, Illinois, took the first legal sports bet on 9 March − Two days later in Detroit, Michigan, Penn National’s Greektown Casino launched ahead of the competition − Kambi added Mississippi to its list of active states, with five PNG retail launches, now active in 10 states − Kambi and partners ready for further launches as soon as it is safe to do so and restrictions are lifted Illinois Michigan One of the most Population of c.10m, populous states, on-property sports expected to be key betting live with online sports betting market to follow shortly Q1 Report – 24 April 2020 13 CEO Kristian Nylén & CFO David Kenyon
Setting the pace in the US 1st in New Hampshire Took first legal wager 1st in Michigan Took first legal wager 1st in Iowa Launched on first day of market 1st in New York Took first legal wager 1st in New Jersey Took first legal online wager Colorado 1st in Illinois Readying launch with 1st in Pennsylvania partners Took first legal wager Took first legal online wager Kambi currently live Online and retail 1st in Indiana Took first legal online Retail only wager Online only Q1 Report – 24 April 2020 14 CEO Kristian Nylén & CFO David Kenyon
Sports turnover Turnover composition during final weeks of quarter Turnover focused on football and other sports Daily Indexed Turnover, selected sports, Kambi network 13-31 March 2020 140 120 Table tennis and eSports generated majority of turnover 100 Turnover Index 80 60 40 20 0 13 th 14 th 15 th 16 th 17 th 18 th 19 th 20 th 21 st 22 nd 23 rd 24 th 25 th 26 th 27 th 28 th 29 th 30 th 31 st Other Sports Football ESports Table Tennis Q1 Report – 24 April 2020 CEO Kristian Nylén & CFO David Kenyon
Leagues and tours set out resumption plans May, June and July should see return of sports Evening Standard BBC Fox News The Guardian Q1 Report – 24 April 2020 16 CEO Kristian Nylén & CFO David Kenyon
Summary Measures implemented Resumption of sports will Strong financial performance to mitigate financial impact restore momentum with 33% revenue growth while protecting long-term future displayed in past quarters Q1 Report – 24 April 2020 17 CEO Kristian Nylén & CFO David Kenyon
Q&A Q1 Report – 24 April 2020 18 CEO Kristian Nylén & CFO David Kenyon
Thank you Q1 Report – 24 April 2020 19 CEO Kristian Nylén & CFO David Kenyon
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