Half year results 6 months ended 31 January 2012 Analyst presentation 29 February 2012
Jan 05, 2016
Half year results 6 months ended 31 January 2012
Analyst presentation
29 February 2012
• Highlights
• Financial review
• Operational review
• Regulatory update
• Summary and outlook
29/02/2012
• Australian Centrebet acquisition completed August 2011. Integration progressing well
• Acquisition of Danish online betting operators January 2012
• Disposal of Turkish business November 2011
• In the first half amounts wagered up 18.4%
• Strong growth in Australia
• EBITDA down from £25.8m to £25.2m impacted by £7.9m of new tax and disposal of Turkey
• In:play at an industry leading margin of 10.1%
• Cost reductions in response to European tax and economic conditions
3
Highlights
Sportingbet Plc – Half year results for the period ended 31 January 201229/02/2012
Financial review
29/02/2012
4
Sportingbet Plc – Half year results for the period ended 31 January 20124
H1 2012
£m
H1 2011
£m
Amounts wagered 1,266.2 1,069.2
Total revenue 110.9 107.9
Costs (93.5) (88.3)
Operating profit* 17.4 19.6
Share option charge (0.3) (0.5)
Amortisation (0.9) (0.9)
Exceptional items (24.0) -
Turkey profit from disposal 2.6 -
Net finance (cost) / income (2.0) 1.4
Tax (3.1) 1.7
Profit for the period (10.3) 17.9
Fully diluted EPS* 2.2p 3.7p
Income Statement
* Before share option charge, exceptional items and amortisation of other intangible assets
Financial review
29/02/2012
5
5
£m
£m
H1 2010/11 19.6
Turkey disposal (9.7)
Spanish and Greek taxes (7.9)
Centrebet acquisition 4.7
Centrebet synergies 2.7
Australia trading 5.1
European trading (5.3)
Cost reductions 5.6
Share of Turkey 2.6
H1 2011/12 17.4
Sportingbet Plc – Half year results for the period ended 31 January 2012
Operating profit reconciliation
Financial review
29/02/2012
6
6
Balance sheet
* Includes client liabilities of £30.2m (2010/11 : £21.1m)
31 January 2012
£m
31 January 2011
£m
Non-current assets Goodwill 153.2 41.6
Tangible and intangible assets 53.6 54.2
Working capital Trade and other receivables 29.9 16.0
Cash and cash equivalents 63.2 54.4
Derivative asset 0.5 -
Other payables* (88.5) (51.0)
LiabilitiesInterest bearing loans and borrowings
(53.7) (11.6)
Derivative liability - (0.1)
158.2 103.5
Equity Share capital / share premium 60.8 60.5
Retained earnings 91.4 43.0
158.2 103.5
Sportingbet Plc – Half year results for the period ended 31 January 2012
Financial review
29/02/2012
7
. 7
H1 cash flow £m £m
Gross cash as at 1 August 2011 180.2
EBITDA 25.2
Working capital (7.9)
17.3
Acquisitions / Centrebet (99.6)
Capex (10.8)
Tax (1.9)
DOJ payment (7.5)
Dividend (7.3)
Convertible loan interest (2.3)
Exceptional cost (4.9)
Net cashflow (117.0)
Gross cash as at 31 January 2012 63.2
Finance leases (2.7)
Bank loan (4.0)
Customer liabilities (30.2)
(12.2)GST claim
Net cash as at 31 January 2012 14.1Sportingbet Plc – Half year results for the period ended 31 January 2012
Underlying strategy remains unchanged
• Focus on sport
• Industry leading breadth of product offering
• Something to bet on every minute of every hour of
every day
• Achieve consistently above average margin whilst
maintaining price competitiveness
• Supported by
• Comprehensive supplemental revenue streams of poker, casino and games
• Tailored offer branded for local markets
• Goal of moving to a fully regulated offer
8
8
Operational review
Sportingbet Plc – Half year results for the period ended 31 January 201229/02/2012
29/02/2012
9
Sportingbet Plc – Half year results for the period ended 31 January 20129
Operational review
Geographical diversification spreads regulatory and economic risk
Australia NGR up 127% due to strong growth in online / acquisition of Centrebet
Greece amounts wagered down 22% due to economic issues NGR down 41% with poker and casino particularly hard hit
Spain amounts wagered down 11% and NGR down 28%
Emerging markets NGR up 23%
Aus39.9 (17.19%)
Turkey12.1% (23.6%)
Greece8.7% (15%)
Spain9.4% (13.4)
UK3.4% (4.5%)
Germany4.4% (4.5%)
Emerging Markets
4.8% (3.9%)
Poland3.2%
(3.4%)
Group geographical breakdown (post-tax gaming revenue)
10
Highlights
Casino & games 19%
(2010: 21%)
Sports 75%
(2010: 71%)
Poker5.9%
(2010: 7.6%)
Soccer 37%
Aus horseracing 40%
Mixed sportmultiples
2.7%
Basketball2.7%
Tennis 2.9%
Horse racing0.6%
Other 14%
Sports betting continues to drive the business with sports NGR up 9%
Casino/games NGR down 8% as affected by economic conditions in key markets
Poker NGR down 34%
Group product breakdown
Sportingbet Plc – Half year results for the period ended 31 January 201229/02/2012
11
Sportingbet Plc – Half year results for the period ended 31 January 201211
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Q108/09
Q208/09
Q308/09
Q408/09
Q109/10
Q209/10
Q309/10
Q409/10
Q110/11
Q210/11
Q310/11
Q410/11
Q111/12
Q211/12
In:Play Pre-Match
Europe - sportsH1 2012 H1 2011 +/-
Sports actives 287,009 319,213 -10%
Average bet size £12.21 £15.11 -19%
Bets per customer 139 132 +5%
Yield per sports actives
£148 £197 -25%
Operational review
(GGR before betting taxes)
Q2 impacted by disposal of Turkey, recession and lower margin than last year
29/02/2012
29/02/2012
Operational review
Source: Gambling Data In-Play Tracker Winter 2012; Sample data captured snapshots between Sat 26 th – Fri 9th Dec 2011
Number of In:play Events vs. Avg. Markets Per Event
Sportingbet provides customers with a strong balance between the breadth of event coverage and a variety of markets to bet on in an individual event
0
5
10
15
20
25
30
35
40
45
50
55
250 300 350 400
Avg
. Mar
kets
per
Eve
nt
Number of Events
William Hill
Unibet
Sportingbet
Paddy Power
Ladbrokes
Bwin
Sportingbet Plc – Half year results for the period ended 31 January 2012
New in:play
• First phase now live in the UK
• Other major domains live in March
• Better showcases huge variety of betting opportunities
• Greater customer personalisation improves engagement
• Not built in Flash technology, allowing enhancements to be viewed on tablets and desktop devices
• In-house development rather than third-party buy
29/02/2012 Sportingbet Plc – Half year results for the period ended 31 January 2012
New in:play
29/02/2012 Sportingbet Plc – Half year results for the period ended 31 January 2012
In:play tutorial
29/02/2012
16
Sportingbet Plc – Half year results for the period ended 31 January 201216
Australia (Sportingbet) (pre-tax gaming revenues)H1
2012H1
2011 +/-
Internet bets 16.3m 12.8m +27%
Telephone bets 0.6m 0.8m -13
Sports actives 70,930 71,103 -
Amounts wagered on the internet up 33% at constant currency
Amounts wagered on the telephone down 10% at constant currency
Significant brand exposure in Australian market through offline marketing
Operational review
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Q4 07/08
Q1 08/09
Q2 08/09
Q3 08/09
Q4 08/09
Q1 09/10
Q2 09/10
Q3 09/10
Q4 09/10
Q1 10/11
Q2 10/11
Q3 10/11
Q4 10/11
Q1 11/12
Q2 11/12
Phone (£'m) Internet (£'m) Mobile (£'m)
29/02/2012
17
Sportingbet Plc – Half year results for the period ended 31 January 201217
Australia (Total) (pre-tax gaming revenues)H1
2012H1
2011 +/-
Internet bets 21.7m 12.8m +70%
Telephone bets 0.8m 0.8m +7%
Sports actives 146,518 71,103 +106%
Operational review
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Q4 07/08
Q1 08/09
Q2 08/09
Q3 08/09
Q4 08/09
Q1 09/10
Q2 09/10
Q3 09/10
Q4 09/10
Q1 10/11
Q2 10/11
Q3 10/11
Q4 10/11
Q1 11/12
Q2 11/12
Phone (£'m) Internet (£'m) Mobile (£'m) Centrebet
29/02/2012
• Acquisition of Centrebet completed 31 August 2011
• Senior management team appointed and operational (Sept ‘11)
• IT Platform decided upon (Sept ‘11)
• All operations (except IT platform) fully integrated (Jan ‘12)
• Combined business in new single Sydney office (May ‘12)
• Single IT platform (May/June ‘12)
• Integration complete (July ‘12)
• Integration ahead of plan at this stage
• No material issues
18
Sportingbet Plc – Half year results for the period ended 31 January 201218
Australia
29/02/2012
Mobile: % of turnover
29/02/2012
19
19
Sep ‘11 Jan ‘12
Sportingbet Australia 13% 20%
Centrebet 5% 13%
UK 11% 15%
Spain 9% 13%
Sportingbet Plc – Half year results for the period ended 31 January 2012
• We welcome regulated markets
• Continuity of future revenue
• Consumer protection
• Growth in overall size of market
• Stable payment processing
• Group will apply for a licence where
• Market is economically viable
• Regulatory environment is stable
• Equitable tax system
• Severe penalties for non-compliance
For Internal purposes only. This is confidential information and is property of Sportingbet Plc. 20
Regulatory update
29/02/2012
• Greece
• Opted into tax regime
• Spain
• Applied for license
• Denmark
• Awarded license
• Italy
• Awarded license
21
Sportingbet Plc – Half year results for the period ended 31 January 2012 21
Current regulation
29/02/2012
• Long-term growth prospects of industry are good
• Demographics
• Broadband penetration
• Confidence in transacting
• Sport’s ever increasing global popularity
• Geographic expansion continuing
• Mobile route to market promising
• Move to regulation promising and beneficial in the long term
• Solid start to Q3
22
Sportingbet Plc – Half year results for the period ended 31 January 201222
Summary and outlook
29/02/2012
Q&A
Analyst presentation
29 February 2012
24
Sportingbet Plc – Half year results for the period ended 31 January 2012 24
Appendix
29/02/2012
25
. Sportingbet Plc – Half year results for the period ended 31 January 201225
Net gaming revenue
H1 2012 H1 2011 % change
£m £m
Europe
Sports (8.7% vs 9.9%) 42.5 62.9 -32%
Casino & games 22.5 24.7 -9%
Poker 7.1 9.0 -21%
72.1 96.6 -25%
Australia
Sports (63.5% vs 5.2%) 47.8 21.1 +127%
Gaming revenues (post gaming taxes) 119.9 117.7 +2%
Customer bonus adjustment (10.5) (10.9) +4%
Net gaming revenue 109.4 106.8 +2%
29/02/2012
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. Sportingbet Plc – Half year results for the period ended 31 January 201226
Australia KPI’s
2012 2011 +/-
Sports actives 146,518 71,103 +106%
Internet (incorporating Mobile results)
Sports bets 21.7m 12.8m +70%
Sports bets / active 116 193 -40%
Sports bet size A$37 A$26 +43%
Sports margin (post tax) % 7.6% 7.1% +7%
Telephone
Sports bets 0.8m 0.8m +7%
Sports bets / active 39 57 -32%
Sports bet size A$455 A$453 +1%
Sports margin (post tax) % 3.1% 3.2% -4%
29/02/2012
27
Sportingbet Plc – Half year results for the period ended 31 January 201227
Europe KPI’s
H1 2011 H1 2011 +/-
Sports actives 287,009 319,213 -10%
Sports bets 40.0m 42.2m -5%
Sports bets / active 139 132 +5%
Sports bet size £12.21 £15.11 -19%
Sports margin % 8.7% 9.9% -12%
Yield per sports active £148.08 £197.25 -25%
Casino and games bets 314.4m 316.7m -1%
Casino and games bet size £2.43 £2.39 +2%
Casino margin % 2.9% 3.3% -10%
Poker – average daily rake £38.7k £48.7k -20%
29/02/2012
Financial review
29/02/2012
28
28
Costs
* Before share option charge, exceptional items and amortisation of other intangible assets
H1 2012
£m
% of margin H1 2011
£m
% of margin
Marketing
• reported 32.9 27.1 32.2 27.1
• customer bonuses 10.5 8.6 10.9 9.2
43.4 35.7 43.1 36.3
Payment processing costs 10.6 8.7 12.6 10.6
Product commissions 10.2 8.4 9.9 8.3
Employees 24.2 19.9 18.4 15.5
Depreciation 7.8 6.4 6.2 5.2
Other admin 7.8 6.4 9.0 7.6
104.0 85.7 99.2 83.5
Operating profit margin 17.4 14.3 19.6 16.5
Sportingbet Plc – Half year results for the period ended 31 January 2012
Financial review
29/02/2012
29
29
£m £m
H1 2011 operating profit 19.6
Europe sports • Volume (15.5)
• Margin (10.4% vs 9.9%) 2.7 (12.8)
Australia sports • Volume 28.7
• Margin (7.7% vs 6.5%) 3.6 32.3
• Betting taxes (12.9) (12.9)
Casino and gaming effect -
Poker effect (1.9)
Increase in costs* (4.6)
H1 2012 operating profit 17.4
Operating profit reconciliation
Sportingbet Plc – Half year results for the period ended 31 January 2012
* Before share option charge, exceptional items and amortisation of other intangible assets
30 . 30
Disclaimer
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currency fluctuations, competition, changes in plans and other risks. There can be no assurance that the results and events contemplated by the forward looking
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Sportingbet Plc – Half year results for the period ended 31 January 201229/02/2012
29/02/2012 Sportingbet Plc – Half year results for the period ended 31 January 2012. 31
The End