Nordea Small/Mid Cap Seminar · VISION “Driving the digital casino market through better gaming...
Transcript of Nordea Small/Mid Cap Seminar · VISION “Driving the digital casino market through better gaming...
Nordea Small/Mid Cap SeminarAugust 16, 2018
Achievements
NetEnt selected achievementsVISION
“Driving the digital casino market through better
gaming solutions”
2011
MobileGames
Italyregulatedentry
Denmarkregulatedentry
20122013-14
Live Casinolaunched
Several UKcustomerssigned
2015
License inUK & Spain
EnteringNew Jersey& Spain
2016
EnteringRomania, Bulgaria & Portugal
WLAMember
2017
Live CasinoMobile Offering
ProgrammaticMarketing Service
Many years of solid performance
153 180262
397519 582
29,1% 28,5%
30,7%
35,0%35,9% 35,6%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
-
100
200
300
400
500
600
700
2012 2013 2014 2015 2016 2017
SEKmEBIT AND EBIT MARGIN %
EBIT
CAGR 2012-17:
31%
Current State
GEOGRAPHIC DIVERSIFICATION
14%
20%
15%
42%
9%
GAMEWIN, Q2 2017
Sweden Other Nordic UK Other European Rest of world
Distribution Network
14%
17%
15%
46%
9%
GAMEWIN, Q2 2018
Sweden Other Nordic UK Other European Rest of world
REVENUES FROM
Locally Regulated Markets
36%64%
Locally regulated Non-locally regulated
• 36 (32)% of revenue from locally regulated markets
• UK and Italy key markets in Europe• Swedish regulation starts 1/1/2019• North America
• Applying for license in Pennsylvania• Target go-live in British Columbia in Q3
GAMEWIN SPLIT Q2 2018
DIVERSIFIED CUSTOMER BASE
Around 200 customers
21%
27%
17%
17%
17%
FY 2017 GAMEWIN SPLIT BY CUSTOMERS
Customer 1-3 Customer 4-10 Customer 11-20 Customer 21-40 Other customers
• Revenues +5.9% YoY in SEK in Q2-18
• Revenues -0.8% YoY in EUR
• Operating margin of 34.0 (35.6)%
Revenue and Operating ProfitBY QUARTER
347 354
399 393413 405
425 430 437
0
50
100
150
200
250
300
350
400
450
500
Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q218
SEKm
Revenues Operating profit
• L12M revenues of 1,697 SEKm in Q2-18
• L12M EBIT of 591 SEKm
• L12M EBIT margin of 34.8%
Revenue and Operating ProfitLAST ROLLING 12 MONTHS
1 2941 367
1 444 1 4931 559 1 610 1 636 1 673 1 697
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18
SEKm
Revenues Operating profit
114
244
338390
423
0
60
120
180
240
300
360
420
480
2013 2014 2015 2016 2017
SEKm
CASH FLOW AFTER INVESTMENTS, LAST 5 YEARS
Free Cash flow and Balance sheet• L12M FCF of 548 SEKm (30/06/18)• Net cash position of 195 SEKm
at 30/06/18• 2017 cash return yield of
6.3 percent at current share price
2.2%
1.9%
1.6%
3.2%
6.3%
% %Cash distribution divided by share price at year-end
Cash distribution divided by share price on 10th August 2018
Action taken to cut overhead costsCOST STRUCTURE
• Actions being taken to cut overhead costs
• Sub-letting of office floorin Stockholm
• Reduce number ofconsultants
• Savings will enablegrowth-driving initiatives
• D&A will increase in 2018 vs 2017
SEKm
Cost vs Revenue GrowthBY QUARTER
0%
5%
10%
15%
20%
25%
30%
35%
40%
Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q218
YoY change
Revenues Costs Costs (excluding D&A)
Strategy
OPERATORSHARE
TIME TOMARKET
PREMIUM QUALITY & INNOVATION
OPERATIONAL EXCELLENCE
REGULATEDMARKETS
NEW CUSTOMERS
PRODUCTDEVELOPMENT
LIVECASINO
AMERICASiGAMING
MEDIA BUYINGSERVICES
SOCIALCASINOASIA
The Future
Market Overview
Source: H2 Gambling Capital
OFFLINE TO ONLINE
GLOBALMARKET
ONLINECASINO MOBILE
5% Onlinecasino
€10.5bnGamewin
+7.3% CAGR to €15bn 2022
+13.3% CAGR 2017-2022
Key for GrowthMOBILE GAMING
-
5
10
15
20
25
30
35
2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022e 2023E
GLOBAL MOBILE GAMBLING MARKET GAMEWIN – ALL VERTICALS (€BN)
Source: H2 Gambling Capital
CAGR 2017-2022E:
13.3%
A sustainable businessSUSTAINABILITY AT NETENT
Responsible Gaming
Anti Corruption & AML
Corporate Citizenship
Diversity and EqualityEnvironment
Sustainable Regulation
Investment Case Summary
STRUCTURALMARKET GROWTH
STRONGMARKETPOSITION
in Europe
SCALABLEBUSINESS
MODEL
STRONGCASH FLOW
FINANCIAL TARGETS