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
Highlights
• 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
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
3
Financial review
Income Statement
H1 2012
£m
H1 2011
£m
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)
(24.0)
-
Turkey profit from disposal
2.6
-
Net finance (cost) / income
(2.0)
1.4
Tax
(3.1)
1.7
(10.3)
17.9
2.2p
3.7p
Amounts wagered
Exceptional items
Profit for the period
Fully diluted EPS*
* Before share option charge, exceptional items and amortisation of other intangible assets
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
4
4
Financial review
Operating profit reconciliation
£m
H1 2010/11
£m
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
5
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
5
Financial review
Balance sheet
Non-current assets
Working capital
Liabilities
31 January 2012
£m
31 January 2011
£m
153.2
41.6
Tangible and intangible assets
53.6
54.2
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)
Interest bearing loans and
borrowings
(53.7)
(11.6)
-
(0.1)
158.2
103.5
Share capital / share premium
60.8
60.5
Retained earnings
91.4
43.0
158.2
103.5
Goodwill
Derivative liability
Equity
6
* Includes client liabilities of £30.2m (2010/11 : £21.1m)
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
6
Financial review
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
29/02/2012
Sportingbet Plc – Half year results for the period
. ended 31 January 2012
14.1
7
7
Operational review
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
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
8
Operational review
Group geographical breakdown (post-tax gaming revenue)
Geographical diversification spreads
regulatory and economic risk
Turkey
12.1% (23.6%)
Aus
39.9 (17.19%)
Greece amounts wagered down
22% due to economic issues
NGR down 41% with poker and
casino particularly hard hit
Poland
3.2% (3.4%)
Emerging Markets
4.8% (3.9%)
Germany
4.4% (4.5%)
Australia NGR up 127% due to strong
growth in online / acquisition of
Centrebet
UK
3.4% (4.5%)
Spain
9.4% (13.4)
Greece
8.7% (15%)
Spain amounts wagered down 11%
and NGR down 28%
Emerging markets NGR up 23%
9
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
9
Highlights
Group product breakdown
Sports
75%
(2010: 71%)
Sports betting continues to
drive the business with sports
NGR up 9%
Soccer
37%
Casino/games NGR down 8% as
affected by economic conditions in
key markets
Casino & games
19%
(2010: 21%)
Poker NGR down 34%
Poker
5.9%
(2010: 7.6%)
Aus horse
racing
40%
Other
14%
Tennis Mixed sport
multiples
2.9%
2.7%
Horse racing
0.6%
Basketball
2.7%
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
10
Operational review
Europe - sports
(GGR before betting taxes)
40.0
35.0
Sports actives
Average bet size
30.0
Bets per customer
25.0
Yield per sports
actives
H1 2012
H1 2011
+/-
287,009
319,213
-10%
£12.21
£15.11
-19%
139
132
+5%
£148
£197
-25%
20.0
Q2 impacted by disposal of Turkey,
recession and lower margin than last year
15.0
10.0
5.0
Q1
Q2
Q3
Q4
Q1
08/09 08/09 08/09 08/09 09/10
Q2
09/10
Q3
09/10
In:Play
29/02/2012
Q4
09/10
Q1
10/11
Q2
10/11
Q3
10/11
Q4
10/11
Q1
11/12
Q2
11/12
Pre-Match
Sportingbet Plc – Half year results for the period ended 31 January 2012
11
11
Operational review
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
55
William Hill
50
45
Avg. Markets per Event
40
35
30
Ladbrokes
Sportingbet
25
Bwin
Paddy Power
20
15
10
Unibet
5
0
250
300
350
Number of Events
Source: Gambling Data In-Play Tracker Winter 2012; Sample data captured snapshots between Sat 26th – Fri 9th Dec 2011
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
400
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
Operational review
Australia (Sportingbet) (pre-tax gaming revenues)
H1
2012
H1
2011
+/-
16.3m
12.8m
+27%
0.6m
0.8m
-13
70,930
71,103
-
20.0
Internet bets
18.0
Telephone bets
Sports actives
16.0
14.0
Amounts wagered on the internet up
33% at constant currency
12.0
10.0
Amounts wagered on the telephone
down 10% at constant currency
8.0
6.0
Significant brand exposure in Australian
market through offline marketing
4.0
2.0
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
07/08 08/09 08/09 08/09 08/09 09/10 09/10 09/10 09/10 10/11 10/11 10/11 10/11 11/12 11/12
Phone (£'m)
Internet (£'m)
Mobile (£'m)
16
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
16
Operational review
Australia (Total) (pre-tax gaming revenues)
H1
2012
H1
2011
+/-
21.7m
12.8m
+70%
0.8m
0.8m
+7%
146,518
71,103
+106%
35.0
Internet bets
Telephone bets
30.0
Sports actives
25.0
20.0
15.0
10.0
5.0
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
07/08 08/09 08/09 08/09 08/09 09/10 09/10 09/10 09/10 10/11 10/11 10/11 10/11 11/12 11/12
Phone (£'m)
Internet (£'m)
Mobile (£'m)
Centrebet
17
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
17
Australia
•
•
•
•
•
•
•
•
•
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
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Sportingbet Plc – Half year results for the period ended 31 January 2012
18
Mobile: % of turnover
Sportingbet Australia
Sep ‘11
Jan ‘12
13%
20%
5%
13%
11%
15%
9%
13%
Centrebet
UK
Spain
19
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
19
Regulatory update
• We welcome regulated markets
• Continuity of future revenue
• Consumer protection
• Growth in overall size of market
• Stable payment processing
•
29/02/2012
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
Current regulation
• Greece
• Opted into tax regime
•
Spain
• Applied for license
• Denmark
• Awarded license
• Italy
• Awarded license
21
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
21
Summary and outlook
• 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
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
22
Q&A
Analyst presentation
29 February 2012
Appendix
24
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
24
Net gaming revenue
H1 2012
H1 2011
% change
£m
£m
Sports (8.7% vs 9.9%)
42.5
62.9
-32%
Casino & games
22.5
24.7
-9%
7.1
9.0
-21%
72.1
96.6
-25%
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%
Europe
Poker
Australia
Sports (63.5% vs 5.2%)
25
29/02/2012
Sportingbet Plc – Half year results for
. the period ended 31 January 2012
25
Australia KPI’s
2012
2011
+/-
146,518
71,103
+106%
21.7m
12.8m
+70%
116
193
-40%
Sports bet size
A$37
A$26
+43%
Sports margin (post tax) %
7.6%
7.1%
+7%
0.8m
0.8m
+7%
39
57
-32%
A$455
A$453
+1%
3.1%
3.2%
-4%
Sports actives
Internet (incorporating Mobile results)
Sports bets
Sports bets / active
Telephone
Sports bets
Sports bets / active
Sports bet size
Sports margin (post tax) %
26
29/02/2012
Sportingbet Plc – Half year results for
. the period ended 31 January 2012
26
Europe KPI’s
H1 2011
H1 2011
+/-
287,009
319,213
-10%
40.0m
42.2m
-5%
139
132
+5%
£12.21
£15.11
-19%
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%
£38.7k
£48.7k
-20%
Sports actives
Sports bets
Sports bets / active
Sports bet size
Sports margin %
Poker – average daily rake
27
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
27
Financial review
Costs
H1 2012
£m
% of margin
H1 2011
£m
% of margin
• 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
17.4
14.3
19.6
16.5
Marketing
Operating profit margin
* Before share option charge, exceptional items and amortisation of other intangible assets
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
28
28
Financial review
Operating profit reconciliation
£m
H1 2011 operating profit
Europe sports
19.6
• Volume
• Margin (10.4% vs 9.9%)
Australia sports
£m
• Volume
• Margin (7.7% vs 6.5%)
• Betting taxes
Casino and gaming effect
(15.5)
2.7
(12.8)
28.7
3.6
32.3
(12.9)
(12.9)
-
Poker effect
(1.9)
Increase in costs*
(4.6)
H1 2012 operating profit
17.4
* Before share option charge, exceptional items and amortisation of other intangible assets
29
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012
29
Disclaimer
These slides and this presentation are provided to you for information only. These slides and this presentation do not constitute, or form part of, any invitation or offer to
any person to subscribe for, otherwise acquire, or dispose of any shares in Sportingbet Plc (the “Company”). These slides and this presentation do not constitute a
recommendation regarding the shares of the Company. Recipients of these slides and this presentation should conduct their own investigation, evaluation and analysis
of the business, data and property described therein.
Certain statements within this presentation constitute forward looking statements. Such forward looking statements are subject to risks and other factors, which may not
be in the Company’s control, which may cause the actual events, results, achievements or performance expressed or implied by such forward looking statements to
differ.
Such risks and other factors include, but are not limited to, general economic and business conditions, changes in governmental laws and regulations or practices,
currency fluctuations, competition, changes in plans and other risks. There can be no assurance that the results and events contemplated by the forward looking
statements contained in this presentation will, in fact, occur and no representation is made in this respect. These forward-looking statements represent honestly held
views of the Company only as at the date of delivery of this presentation. The Company is not under any obligation to release publicly any revisions to these forward
looking statements to reflect events, circumstances and unanticipated events occurring after the date of this presentation except as required by law or by regulatory
authority (including pursuant to the UK Listing Rules and the Disclosure Rules and Transparency Rules of the Financial Services Authority).
No statement in this presentation in intended as a profit forecast or a profit estimate and no statement in this presentation should be interpreted to mean that earnings
per share for the current or future financial years will match or exceed historical earnings per share.
The distribution of this presentation or any information contained in it may be restricted by the laws of certain jurisdictions. Persons into whose possession this
presentation comes should inform themselves about and observe any such restrictions. Failure to do so may constitute a violation of the laws of any such jurisdiction.
By accepting these slides and/or attending this presentation, you agree to be bound by the provisions and the limitations set out above.
All financial information and KPIs in this presentation are unaudited.
30
29/02/2012
.
Sportingbet Plc – Half year results for the period ended 31 January 2012
30
The End
29/02/2012
Sportingbet Plc – Half year results for the period ended 31 January 2012.
31