Q4 2017 Q4 2017
Presenters GUSTAF VIKTOR HAGMAN FRITZÉN Group CEO and Co-founder Group CFO 2
The Leo Passion Leading the way into the mobile future 3
The growth company LeoVegas Strategy A fantastic company culture Expansions strategy Expand in regulated markets and markets that are soon be regulated and to carry out strategic and complementary acquisitions Product Strategy To be the most innovative and GameTech Effective marketing creative company in the gaming industry 4
• Acquisition of IPS (Rocket X) Agenda genda • Quarterly report highlights • Business update • Business KPIs • Financials • Financial Targets • Summary • Q&A 5
Acquisition cquisition IPS and associated assets – “Rocket X"” 6
Rocket X During the past two years we have searched for companies that fit in with our overall expansion strategy, which is to grow in regulated markets and markets soon-to-be regulated Rocket X Rocket X in Q4’17 Why Rocket X Strengthen our position in 85 employees Revenues: GBP 11.7 m the UK O ffi ce in Newcastle YoY growth 49% Local multibrand strategy Assets will be transferred Adjusted EBITDA of EUR to complement the global 3.8 m. 1 unto LeoVegas licenses brands LeoVegas and Royal Casino and Bingo UK accounted for 96% of Panda revenue Bede Platform E ffi cient marketing strategy 73% of revenues generated independent from a ffi liates from Mobile devices Great team Cultural fit Inline with our expansion strategy 1 EBITDA is adjusted for a platform agreement in which EBITDA for Q4 2017 has been recalculated as if the agreement that LeoVegas has for the platform from the closing date of the acquisition applied for the entire Q4 2017. IPS has conducted limited white label business that has contributed to sales for 2017, but which has had a neutral e ff ect on EBITDA. This business is not included in the transaction. Some minor cost items in the 7 month of December have been estimated
Rocket X Purchase price and completion Financing GBP 65m (EUR 73.5m at exchange rate 1.13 GBP/ Will utilize excess cash at hand and the remainder will be drawn from the debt facility EUR) LeoVegas secured in Q4 No earn-out The transaction is subject to certain closing conditions, and is scheduled to close late in the first quarter of 2018 8
Setting the stage for German expansion Licenses New ambassadors Agreement to acquire all of the shares in the Maltese company World of Sportsbetting Ltd, Purchase price of 2.6 MEUR Sports betting and casino licenses in the state of Schleswig-Holstein An approved application for a sports betting license in Hesse, under the Interstate Treaty on Gambling In line with LeoVegas expansion strategy, focus on regulated markets What does this mean? With the application for a sports betting license in Strong profiles in the Sports community Hesse – able to to freely market the sports betting Lothar Matthäus – Football legend o ff ering throughout Germany Stefan Kretzschmar is a former handball star Additional opportunities within marketing and improved and more attractive payment solutions This will strengthen LeoVegas position and continued Able to apply the licenses in Schleswig-Holstein for high growth in Germany 9 Royal Panda
Full year ull year 2017 2017 Highlights 10
Full year 2017 Team: Growth: +201 Employees +53 % Total: 566 Adjusted EBITDA: Revenue: Adjusted EBITDA: 217 MEUR 27.9 MEUR 12.9 % 11
Awards in 2017 and beginning of 2018 12
Quart Quarterly erly report eport Highlights and events 13
Revenue since launch MEUR 67.8 70.0 65% 65% Q4’17 growth Y-Y 60.0 Q4’17 growth excl. acquisitions Y-Y (organic 48% 48% growth) 50.0 Q4’17 growth excl. acquisitions and closed 82% 82% 40.0 markets (Australia, Czechia, Slovakia) Y-Y 30.0 20.0 10.0 -
Q4 2017 Highlights Revenue: Growth: 67.8 MEUR +65 % +26.6 MEUR Organic growth: 48% Mobile deposits: NDCs Adjusted EBITDA: 69 % 7.1 MEUR 128 409 10.5 % margin All time high in value generated 15
Current Trading – Start of Q1 NGR January 2018 24.8 MEUR an increased of 76 % compared to January last year 72 % excluding acquisitions and closed markets 16
Busine Business updat s update 17
Listed on Nasdaq Stockholm, Main market Listing changed to Nasdaq Stockholm on February 5 Unicorn status: Valuation of one billion USD Proposed dividend of SEK 1.20 (1.00) per share, amounting to approximately SEK 120 million (EUR 12.2 million) 18
Business update Expansion in Canada - free to play site - LeoVegas.net At LeoVegas.net casino games are o ff ered to try and play for free Swedish hockey legend Mats Sundin to serve as an ambassador Credible and popular profile, which provides great opportunities from a marketing perspective Executive management Caroline Palm – Chief Human Resources o ffi cer (CHRO) – new role Jarl Modén - permanent Chief Product O ffi cer (CPO) Both part of executive management 19
Product innovations Apple Pay launched in UK, more markets to come, only available in regulated markets Using state-of-the-art technology, launching facial recognition for log-ins and approval of payments using Apple Pay Improved live streaming o ff ering in the Nordic markets with 10,000 live broadcast sport events LeoVegas has worked intensively and closely with a number of game developers – to come up with innovative and exclusive games – “LeoVegas Originals” Authentic Gaming Exciting news with an agreement with Foxwoods Casino, USA's largest casino venue. For the first time, it is possible for European players to play Live Casino, online streaming directly from a casino in the United States 20
Royal Panda Royal Panda contributed with 5.6 Revenue Nov-Dec: January 2018 NGR MEUR in Q4 which is a lower figure compared to Royal Pandas 5.6 MEUR 3.8 MEUR Q3 revenue This is because Royal Panda is only included for two months in Q4 and that Royal Panda closed a number of markets for similar reasons as LeoVegas closed Czech Republic and Australia Revenue: Revenue: This is according to plan and adjusted for these markets, Royal Like for like growth in Q4’17: Q4’17 % of Group revenue: 5.6 5.6 Panda grew 57 percent in Q4 8.3% 57 % Royal Panda has had a strong 15.4% January 2018 % of Group revenue: opening to 2018 with 3.8 MEUR MEUR MEUR of NGR in January 21
Regulated revenues LeoVegas’ strategy is to enter regulated markets and markets that are soon to be regulated Regulated revenues in Q4’17 were 29% of total Q4 2017 29% of NGR from regulated markets UK 17% Italy 3% Denmark 9% 71% 22
Busine Business s KPI’ KPI’s 23
Q4’17 drivers Q3’17 back-drop Q4’17 Royal Panda added 10% pnts 29.5 MEUR in NDCs 32% Q-Q +30% 22.6 MEUR in marketing growth marketing Royal Panda 2.3 MEUR Deposits 16% Q-Q Revenue 22% Q-Q 97 210 NDCs in Q3’17 growth growth Royal Panda added 7% pnts Royal Panda added 10% pnts RDCs 18% Acquisition of Royal Q-Q growth Panda Royal Panda added 9% pnts 24
Customer base Depositing customers, new and returning COMMENTS 140 000 • New depositing customers (NDCs) increased 32% 128 409 New depositing customers (NDCs) Returning depositing customers (RDCs) 124 890 sequentially • NDCs grew 22% sequentially 120 000 excluding the acquisition of +32% Royal Panda • The growth in NDCs is very +18% broad-based with nearly all 100 000 markets seeing material increases • Returning Depositing 80 000 Customers (RDCs) growth was 18% sequentially • RDC growth excluding Royal 60 000 Panda was 9% • RDC growth excluding Royal Panda and Australia (which was shut down on 40 000 September 10) was 15% sequentially • The strong RDC growth figure is mainly driven by the 20 000 strong NDC development in Q3’17 - 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 2017-Q4 25
Average spend per customer Deposits EUR per depositing customer NGR EUR per depositing customer COMMENTS • As the proportion of RDCs in 1 000 300 the mix has a material e ff ect on the average deposit per depositing customer – it can 900 60% be seen how the proportion 250 of RDCs correlates with 800 average deposit per depositing customer 50% • In Q4’17 there was a large 700 200 increase in NDCs, which means its proportion of the 600 40% depositing customer base was larger, which in turn 500 150 decreased the average deposit per depositing Deposits per depositing 30% NGR per depositing customer customer customer 400 Propotion of RDCs in the depositing customer base 100 • Average deposit per 300 20% depositing customer decreased with the 200 proportion of RDCs, as the 50 average deposit per RDC was 10% stable from Q3’17 100 • Average NGR per depositing - 0% - customer decreased slightly less as hold increased slightly 26
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