Q2 2019 24 July 2019 - Kindred Group...• Kindred Group obtains ISO/IEC 27001:2013 certification by...

Henrik TjärnströmCEO

Q2 201924 July 2019

© Kindred Group plc 2019

• Highlights• Financial results• Business overview• Summary

Outline

2

Q2 2019 Key Report Highlights


GWR from mobile

GBP 173.5m(+11%)

Gross winnings revenue

GBP 226.2m(+3%)

EBITDA

GBP 30.4m(-27%)

Active customers

1,478,437(-5%)

Earnings per share

GBP 0.055(-51%)

4

Financial results



Locally licensed revenue growth of 41 per cent year on year but tough EBITDA comparatives due to 2018 World Cup and Swedish re-regulation”

Q2 2019

6

LB T/O 95m Total T/O 295m Pre-game margin 13.1% LB margin 9.4% Combined margin 11.9%June GWR (14.1% margin) 27mJuly GWR (7.8% margin) 8m Total GWR* 35m* Excl. bonus

World Cup 2018


Gross winnings revenue


153.6 156.6

249.0319.8

426.8 450.6

76.5 76.1 122.4 153.2 207.8 224.477.1 80.5126.6

166.6

219.0 226.2

80.4 86.1

142.3

193.6

230.7

78.0 111.4

152.8

238.0

250.1

2012 2013 2014 2015 2016 2017 2018 2019

Q1

Q2

Q3

Q4

GBPm

226.7268.0

312.0354.1

544.1

751.4

907.6

8

Geographic growth– Key Report Highlights Q2 2019 vs Q2 2018


Nordics

Western Europe

-9%

+10%

GWR as reported in GBP

-7%

+10%

Organic GWR in constant currency

CES +20% +32%

9

Gross winnings revenue from mobile


020406080

100120140160180200

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2 Q3 Q4 Q12017

Q2 Q3 Q4 Q12018

Q2 Q3 Q4 Q12019

Q2

GBPm +X%+X%+11%

10

EBITDA – Excl 2014 Kambi one-off item


35.3 33.448.7

59.9

88.8

61.0

21.3 14.4 27.6 29.4 47.3 30.614.0 19.0

21.1 30.5

41.5

30.421.7 17.4

33.146.6

55.5

18.4 26.2

38.9

73.8

58.5

2012 2013 2014 2015 2016 2017 2018 2019*

GBPm

Q1

Q2

Q3

Q4

52.563.4

75.5 77.0

120.7

180.3

202.8

* 2019 figures have been impacted by the adoption of IFRS 16 “Leases” and are therefore not directly comparable to comparative years.

11

0%

5%

10%

15%

20%

25%

30%

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2 Q3 Q4 Q12017

Q2 Q3 Q4 Q12018

Q2 Q3 Q4 Q12019

Q2

A scalable business model…


Betting duties % of GWR (trailing 12m)

Underlying EBITDA margin* % (trailing 12m)

2013 2014 2015 2016 2017 2018 2019* Underlying EBITDA excl. FX loss on operating items

12

…showing our ability to absorb betting duties


GBPm

0%

10%

20%

30%

40%

50%

60%

70%

0

10

20

30

40

50

60

70

80

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

% of Re-reg revenueBetting duties Underlying EBITDA

2013 2014 2015 2016 2017 2018 2019** 2019 figures have been impacted by the adoption of IFRS 16 “Leases” and are therefore not directly comparable to prior years.

13

Other Costs analysisExcl. Non-recurring items


Share of GWR (as reported) 9% 10%8% 8%

GBPm2016

FY2017

FY2018

FY2019

Q22019

Q22019

H12019

H1

Reported Other Costs 69.4 109.1 122.4 35.3 35.2 60.4 60.2Depreciation & Amortisation -23.8 -42.6 -46.8 -11.2 -13.9 -21.6 -26.1

FX loss/gain on Opex -0.6 -1.5 -1.2 -2.4 -2.4 0.8 0.8Other Costs post D&A and FX 45.0 65.0 74.4 21.7 18.9 39.6 34.9

8%

Excl.IFRS16 Reported

9% 8%

ReportedExcl.IFRS16

14

Q2 2019 P&L FX impact v Q2 2018


5.4

SEK 12.14411.792 -3.0%NOK 11.11310.906 -1.9%EUR 1.1441.141 -0.3%DKK 8.5428.501 -0.5%

Q2 2019Q2 2018Avg rate Movement

GBPmGross winnings revenue -1.8Cost of sales / Opex 1.3FX loss on operating items -2.4EBITDA FX impact Q2 2019 -2.9FX loss on dividend payment -0.4Other items below EBITDA -Profit before tax impact Q2 2019 -3.3

AUD 1.8361.798 -2.1%

Weighted average movement in FX rates: approx. -1%

15

IFRS 16, “Leases” – new standard from 1 January 2019 replaces IAS 17


• Operating leases are impacted• A lease asset and a lease liability are

recognised. Depreciation and interest are recognised instead of a rent cost

• Minimal PBT impact in Q2 2019, in line with Q1 2019. Higher EBITDA impact from Q2 2019 (new lease in Stockholm)

• Neutral on cash flow

Q2 2019 effects for Kindred

Income Statement GBPm

Adjusted EBITDA +2.8Depreciation and amortisation -2.7Finance costs -0.4 Profit before tax -0.3

Cash Flow Statement GBPm

Operating cash flow +2.3Investing cash flow -0.4Financing cash flow -1.9Net cash impact 0.0

16

0.1030.146 0.162

0.243

0.044 0.087 0.0720.131

0.0670.059

0.059 0.090

0.112

0.0550.057

0.0910.131

0.163

0.084

0.129

0.223

0.173

0.000.050.100.150.200.250.300.350.400.450.500.550.60

2012 2013 2014 2015 2016 2017 2018 2019

Q3

Q4

EPS development – Excl 2014 one-off items

Q1

Q2

GBP

0.244

0.366


0.5160.580

0.122

17

Business overview


Sports betting gross marginCombined


0%1%2%3%4%5%6%7%8%9%

10%11%12%

Before free bets After free bets

2011 2012 2013 2014 2015 2016 2017Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR Q1 YRQ2 Q3 Q4 Q1

2018Q2 Q3 Q4 YR Q1

2019Q2

19

Product & geographic balance Gross winnings revenue over time


By product, % By geography, %

Pre-game betting

Poker

Casino &Games

Other

Live betting

Nordics

WesternEurope

CES

Other

21 2130 23 26 22 28 24 24

23 2321

23 22 2622 23 24

2 22

2 2 2 2 3 3

51 5145 50 47 48 46 48 47

3 3 2 2 3 2 2 2 2

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

41 40 35 36 34 34 32 28 30

7 67 7 7 8 7 8 8

50 52 55 55 56 56 59 62 60

2 2 3 2 3 2 2 2 2

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22017 20172018 20182019 2019

20

Unibet live in

New Jersey as from 3 June


Pennsylvaniaconditional online casino and sportsbook license awarded 10 July

21

• Unibet main sponsor from 1 July

• SEK 25m over 2 years of which 3m for RG & projects against match fixing

• Part of Unibet’s long term strategy to give back to sports and society



Offering employees a great employee experience helps attract and retain the best talent in very competitive markets

Having the best people ensures Kindred is better able to deliver a great experience for customers & achieve sustainable growth.

Kindred UK office recognisedas a Great Place to Work in UK

23

Sustainable growth

Active customers and Group ARPU

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2 Q3 Q4 Q12017

Q2 Q3 Q4 Q12018

Q2 Q3 Q4 Q12019

Q2

ARPU

2013 2014 2015 2016 2017 2018 2019


Gaming campaign in DenmarkSpil med omtanke (Play with care)


Sustainability in our business

Unibet ambassadorBrian Laudrup

25

Sustainability in our business


Unibet ambassadorMorten Langli

Gaming campaign in NorwaySpill Ansvarlig (Play responsibly)

26

• Kindred Group obtains ISO/IEC 27001:2013 certification by testing agency, eCogra

• Most recognized information security standard worldwide

• Highly regarded by our regulators and licensing bodies

• Shows our commitment to the protection and security of our customers’ data

• Will facilitate the process of applying to licenses in new territories

Now ISO 27001 certified



Sustainable Gambling Conference 2019, 8 October in Copenhagen


Summary Q2 2019

GWRSB margin

after FB EBITDA

GWR from locally-regulated markets

Activecustomers

GWR from locally-regulated markets

+3% 8.7% -27%

+41% -5% 59%

29

Contact

Investor RelationsInga Lundberg

+44 788 799 6116

[email protected]

Calendar


25 October 2019Q3 will be published at 7.30 CEST

12 February 2020Q4 will be published at 7.30 CET

31

Q2 2019 24 July 2019 - Kindred Group...• Kindred Group obtains ISO/IEC 27001:2013 certification by...

Documents

Transcript of Q2 2019 24 July 2019 - Kindred Group...• Kindred Group obtains ISO/IEC 27001:2013 certification by...