Mr Green & Co AB Interim Report January-June 2017 Per Norman CEO & Simon Falk CFO 21 July 2017 conference call
Revenues +36.3% EBITDA margin 18.2% Customer deposits +34.4% Q217 vs Q216 2
Strong financial development Revenue, MSEK Q217 Q216 Change H117 H116 Change 287.8 211.2 36.3% 563.9 429.7 31.2% EBITDA, MSEK Q217 Q216 Change H117 H116 Change 52.4 12.0 337% 86.6 42.2 105% EBIT, MSEK Q217 Q216 Change H117 H116 Change 35.5-3.1 N.A. 55.0 13.7 302% EPS, SEK Q217 Q216 Change H117 H116 Change 0.90-0.13 N.A. 1.43 0.55 159% ALL TIME HIGH ACROSS ALL KEY FINANCIALS 3
Growth better than mid-term target I T E M T A R G E T M I D - T E R M * T A R G E T L O N G - T E R M H 1 1 7 O U T C O M E G R O W T H G r o w t h r a t e o f 2 0 % E x c e e d i n g t h e o n l i n e g a m i n g i n d u s t r y 3 1. 2 % P R O F I T A - B I L I T Y 2 0 % E B I T D A m a r g i n 1 5 % E B I T D A m a r g i n 1 5. 4 % D I V I D E N D U p t o 5 0 % o f f r e e c a s h f l o w U p t o 5 0 % o f f r e e c a s h f l o w F Y 1 6 : n o d i v i d e n d d u e t o D a n i s h a c q u i s i t i o n *) Mid-term is 2-3 years EBITDA MARGIN IMPROVED TO 18.2% IN Q217 4
Our strategy Mr Green 2.0 is paying off 40% 35% 30% 25% 20% 15% 10% 5% 0% Growth YoY 25% EBITDA margin 20% 15% 10% 5% 0% DEVELOPED IN SPRING 2016 5
Our strategic actions 2016 Q117 Q217 2017 New management teams in place New technology platform Data and BI-driven customer communication Sportsbook 1.0 New live casino Listing on Nasdaq Stockholm GRI reporting Reel Thrill Tournaments launched New subsidiary Wizard s Hat Ltd Acquisition of Dansk Underholdning Initiated operations in Latin America Enhanced digital marketing Placement of new shares Relaunch of casino site Garbo Green Gaming predictive tool ready for launch Completion of acquisition of Dansk Underholdning Increased focus on the Nordics Keno ready for launch Sportsbook 2.0 New customer loyalty program Launch Mr Green in Denmark Number games bingo, keno, lotto across all markets Continued geographic expansion organic and/or M&A driven CONTINOUS DEVELOPMENT OF DATA AND BI DRIVEN CUSTOMER COMMUNICATION TO PERSONALISE AND ENTERTAIN 6
Mr Green s new predictive Green Gaming tool Developed in-house together with Sustainable Interaction Used together with Gamtest Will identify risk behaviour on an individual level Offer self tests, breaks, self exclusion, cool down games, self help (cognitive) etc. To be launched in Q317 7
Strong cash position after new share issue New share issue of 195 MSEK before transaction costs Cash of 463.6 MSEK and debt free Will be used to finance further expansion, organically as well as through acquisitions The new share issue was directed and increased the distribution of ownership among Swedish as well as international institutional investors WELL POSITIONED TO PLAY AN ACTIVE ROLE IN THE CONSOLIDATION OF THE INDUSTRY 8
Financials
10 Record high number of customers 140 000 NUMBER OF ACTIVE CUSTOMERS 60% 1 000 CUSTOMER DEPOSITS 60% Number of active customers +25.8% from Q216 120 000 100 000 116,674 50% 40% 900 800 700 808.6 MSEK 50% 40% Customer deposits +34.4% from Q216 80 000 30% 25.8% 600 500 34.4% 30% 60 000 20% 400 40 000 10% 300 20% 20 000 0% 200 100 10% 0-10% 0 0% Active customers YoY growth, % Customer deposits, MSEK YoY growth, %
11 Strong revenue growth continues REVENUE +36.3% from Q216 350 300 250 200 150 100 50 0 50% 45% 287.8 MSEK 40% 36.3% 35% 30% 25% 20% 15% 10% 5% 0% +31.2% from H116 Positive FX impact of 3.6% in Q217 Dansk Underholdning consolidated from 26 April added 2.2% to revenue in Q217 Sportsbook, Live Casino and Reel Thrill tournaments performed well positive impact on retention July has had a strong start in line with the growth rate in Q217* Revenue, MSEK YoY growth, % * Please note that this information is not a forecast for the revenue in the third quarter, it is only an indication of how the third quarter has started
Good growth across Europe 350 300 250 200 150 REGIONAL REVENUE DEVELOPMENT, MSEK Western Europe +80.5% from Q216 Central, Eastern and Southern Europe (CESE) +30.2% from Q216 Continued good growth in Austria Nordics +10.3% from Q216 Good growth in Sweden and Finland Denmark new market 100 50 0 Central, Eastern and Southern Europe 24% GEOGRAPHICAL SPLIT Q217 Rest of world 2% Nordics 33% Nordics Western Europe Central, Eastern and Southern Europe Rest of world Western Europe 41% GAINING MARKET SHARE IN A NUMBER OF MARKETS 12
Decreased CoS and marketing ratios 120 COST OF SERVICES SOLD 40% 120 MARKETING COST 60% 100 30.3% 30% 100 50% 92.5 MSEK 80 87.3 MSEK 80 40% 60 20% 60 32.1% 30% 15.1% 40 40 20% 10% 20 20 10% 0 0% 0 0% CoS, MSEK CoS/revenue, % CoS excl betting duties/revenue, % Marketing cost, MSEK Marketing cost/revenue, % MARKETING RATIO EXPECTED TO INCREASE COMING QUARTERS DUE TO PRODUCT LAUNCHES 13
Stable development in personnel cost 40 35 PERSONNEL COST 18% 35.2 MSEK 16% 45 40 OTHER OPEX 20% 41.1 MSEK 18% 30 25 20 15 14% 12.2% 12% 10% 8% 6% 35 30 25 20 15 16% 14.3% 14% 12% 10% 8% 6% 10 4% 10 4% 5 2% 5 2% 0 0% 0 0% Personnel cost, MSEK Personnel cost/revenue, % Other cost Other cost/revenue OTHER OPEX IMPACTED BY IT COSTS RELATED TO HIGH PROJECT ACTIVITY 14
15 Strong improvement in EBITDA EBITDA 30,0% Betting duties 4.0% Betting duties 15.2% 60 52.4 MSEK EBITDA 52.4 MSEK and EBITDA margin 18.2% 25,0% 20,0% 15,0% 50 40 18.2% 30 Improved profitability mainly due to strong revenue growth and increased marketing efficiency 10,0% 5,0% 0,0% 20 10 0 Austrian self assessment a precautionary measure Negotiations were conducted at the court of first instance in Austria We do not expect the matter to be resolved in the near future EBITDA, MSEK EBITDA margin, % Note: EBITDA before non-recurring items
Summary
Key profitability drivers in Q217 OPEX EBITDA margin Taxes New taxes in existing markets Taxes from new markets Game suppliers Tax sharing Lower rates in % due to higher revenues Payment Taxed markets give access to more beneficial payment Lower rates in % due to higher volumes Marketing efficiency Improved Economy of conversion scale Cost sharing Continuous cost related to betting consciousness duties Improved retention Increased digital media use Increased organic traffic generation EBITDA margin Mid-term target 20% Illustrative CLEAR STRATEGY TO REACH 20% EBITDA TARGET 17
Much more to come Good growth momentum Accelerating with new strategic initiatives Further raising our level of ambition Launching: Mr Green in Denmark Sportsbook 2.0 New customer loyalty program Green Gaming predictive tool Number games across Europe AIMING TO BE A PLAYER IN THE INDUSTRY CONSOLIDATION 18
Q&A 19