Q4 2016 Q4 2016
Presenters GUSTAF VIKTOR HAGMAN FRITZÉN Group CEO and Co-founder Group CFO 2
Vision The greatest gaming experience Number one in mobile gaming 3
Agenda genda • Annual and Quarterly highlights • Business update • Business KPIs • Financials • Targets & Summary • Q&A 4
Full year ull year 2016 2016 Highlights 5
Full year 2016 Organic growth: Organic growth: +70 % +58.4 MEUR Adjusted EBITDA: Revenue: Adjusted EBITDA: 141.4 MEUR 21.3 MEUR 15.1 % 6
Drivers behind record strong 2016 Technology leadership “Two new product categories” Mobile focus “Product innovation” Effective marketing “Data driven and ROI approach in all marketing initiatives” Execution “Outstanding team and ability to deliver” 7
Quart Quarterly erly report eport Highlights and events 8
Revenue since start MEUR 41.2 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 - 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4
Q4 2016 Highlights Revenue: Organic growth: 41.2 MEUR +58 % +15.1 MEUR Mobile deposits: Deposits: EBITDA: 67 % 139.1 MEUR 10.0 MEUR +87 % 24.2 % margin 10
LeoVegas again number 1 in Online Gambling Quarterly COMMENTS • In the latest edition of Online Gambling Quarterly, an industry publication that focuses on strategy and financials, LeoVegas was for the second quarter in a row the company expected to be the number 1 winner in the next twelve months based on a survey of 47 individuals that are executives in the gaming industry and finance professionals that invest in the gaming space • In the same survey Mobile Betting, Mobile Casino and Live Betting were expected to be the fastest growing segments in our industry, which are the main focus areas of LeoVegas
Current Trading – Start of Q1 NGR in January 14.1 MEUR an increased of 40 % compared to January last year 12
Busine Business updat s update 13
Expansion overview Denmark Local and experienced team Promising start UK Initiatives in Q3-4 start to pay-o ff Local ambassador - Johnny Vegas Sponsorship – Leicester Tigers 14
Legal update Czechia New regulation in place since 1 Jan 2017 Applied for license During the transition period LeoVegas.com is closed for Czech customers Will negative a ff ect revenues in Q1 (was 4% of revenues in Q4) Ireland Sportsbook license granted Q1 Australia We are closely monitoring the legal landscape in Australia and how the proposed amendment to the law might a ff ect the market 15
Awards International Gaming Awards 2017 Online Casino Operator of the Year EGR Nordic Awards 2017 Casino Operator of the Year SBC Awards 2016 Marketing Campaign of the Year (LeoVegas Sport) E ff ective Mobile Marketing Awards Most E ff ective Search Campaign
LeoVegas Sport and LeoVegas Live Casino In-game deposit with Evolution Launch of sports client start & NetEnt page built in-house Broadest product o ff ering in Strong underlying development the industry New provider - Lucky Streak 17
IMP / Authentic Gaming Independent company within the LeoVegas invested one year ago now LeoVegas Group live on several operators during Q1 Authentic Gaming delivers an Focus to integrate their live casino on innovative live casino solution with more operators streaming from land-based casinos 18
A Continuous Focus on Responsible Gaming LeoVegas’ o ff ering is based on gaming as a fun and attractive form of entertainment Responsible gaming is a fundamental principle in all we do Responsible gaming training and certification for all employees Sophisticated player tools and measures for limiting deposits, time, wagering, losses etc. Information and tests for both players and relatives Self exclusion measures and forced exclusion by us when gaming related problems discovered 19
Busine Business s KPI’ KPI’s 20
Q4’16 drivers Q3’16 back-drop Q4’16 results Lower game margin 14.3 MEUR in highly RDCs 11% efficient marketing Q-Q growth Revenue 4% Q-Q growth NDCs of 74 638 in Deposits 12% Q-Q Q3’16 growth
Customer base Depositing customers, new and returning Active customers and depositing customers COMMENTS • Overall the customer base New depositing customers (NDCs) Actives customers 120 000 600 000 developed according to Returning depositing customers (RDCs) Returning depositing customers (RDCs) historical trends in Q4’16 New depositing customers (NDCs) • New depositing customers 100 000 500 000 (NDCs) increased 14% 90 922 sequentially, which is according to trend, to 85 384 85 384 • The NDCs mix in Q4’16 is 404 773 80 000 400 000 similar to Q3’16 • Returning depositing customers (RDCs) grew 60 000 300 000 sequentially according to trend with 11% to 90 922 • The number of active 40 000 customers, which includes 200 000 customers making bets only with bonus money, increased 19% sequentially 20 000 100 000 - - 22
Average spend per customer Deposits EUR per depositing customer NGR EUR per depositing customer COMMENTS • Average deposit per 900 300 depositing customer in Q4’16 was flat compared to Q3’16 • Average NGR per depositing 800 customer, however, decreased 250 by 9% driven by lower margin in casino and sports in Q4’16 700 • Both average spend metrics in H2’16 are closer to a normal 600 200 level compared to H1’16 when average spend was unusually low driven by the high 500 proportion of NDCs, which on 150 average spend less, in Deposits per depositing customer 400 combination with higher NGR per depositing customer bonus costs that arose from the NDCs, as new customers 300 100 get more bonuses, and higher bonus costs in combination with the the launch of 200 LeoVegas Sports 50 100 - - 23
Marketing and customer acquisition cost Marketing spend and NDCs indexed to Q4’15 in relation to marketing per NDCs COMMENTS • Marketing spend increased by 13% from Q4’15 to 14.9 MEUR in Q4’16 85 384 • During the same period NDCs increased by 83% • The Customer Acquisition +83% Cost (CAC), illustrated in the Marketing Indexed to Q4'15 chart as marketing in relation to NDCs, in Q4’16 decreased NDCs Indexed to Q4'15 38% compared to Q4’15 and is Marketing / NDC (CAC) at a historically low level • The quality of the NDCs in +13% 14.9 MEUR Q4’16 was about the same as in Q4’15 and Q3’16, which indicates that the marketing ROI increased substantially in -38% Q4’16 compared to Q3’15 but also compared to Q3’16 • The overall marketing mix was broadly similar in both periods 2015-Q4 2016-Q4 24
Deposits Deposits MEUR and Q-Q growth in deposits % Deposits MEUR by region COMMENTS • Q4’16 had the highest year- 90.0 160.0 30% on-year increase in deposits Deposits at 87% • On a sequential basis Growth in deposits Q-Q % 80.0 deposits increased 12%, 140.0 Nordics which is the same rate as 25% UK Q4’15 70.0 • Growth rates per regions: 120.0 Rest of Europe • Nordics 65% Rest of World • UK 45% 60.0 20% • Rest of Europe 335% 100.0 • Rest of World 235% • Deposits increased by 64.9 50.0 MEUR from Q4’15 to Q4’16 of 80.0 15% which the regions accounted 40.0 for: • Nordics 32.8 MEUR 60.0 • UK 6.6 MEUR 10% 30.0 • Rest of Europe 15.8 MEUR • Rest of World 9.8 MEUR 40.0 20.0 5% 20.0 10.0 - 0% - 25
Regional split COMMENTS Deposits 2016-Q4 NGR 2016-Q4 • The Nordics remained at Rest of decreased to 60% in Q4’16 of World Rest of 10% total deposits from 62% in World 16% Q3’16 • Rest of Europe increased its Rest of share of total deposits by 2 Europe percentage points to 15% 15% Rest of while UK and Rest of World Europe 17% remained stable at 10% Nordics Nordics United 57% 60% Kingdom United • NGR shares shifted from Q3’16 15% Kingdom to Q4’16 mainly for Rest of 10% Europe that increased to 17% and UK that decreased to 10% • The decrease in the UK was Rest of Deposits 2016-Q3 NGR 2016-Q3 on the back of low margin in World Sports and to a less extent 10% Rest of Casino World Rest of • Rest of World increased its 15% Europe proportion of NGR slightly 13% and remained at an unusually Rest of high NGR to deposits ratio Europe 14% • The deposit mix, however, is a United Nordics Nordics Kingdom 58% better gauge of the 62% 15% development of the regions United Kingdom on a more fundamental level 13% 26
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