9m2017 financial results - intralot › files › intralot_financial...substitute for results that...

November 2017| Public | Final | of 19

9M2017 Financial Results

November 27th, 2017


Disclaimer By reading or attending the presentation that follows, you agree to be bound by the following limitations:

This presentation has been prepared by INTRALOT S.A. and its subsidiaries (the “Company” or “We”) solely for informational purposes and does not constitute, and should not be construed as, an offer to

sell or issue securities or otherwise constitute an invitation or inducement to any person to purchase, underwrite, subscribe to or otherwise acquire securities in the Company. This presentation is intended

to provide a general overview of the Company and its business and does not purport to deal with all aspects and details regarding the Company. For the purposes of this disclaimer, the presentation that

follows shall mean and include the slides that follow, the oral presentation of the slides by the Company or any person on its behalf, any question-and-answer session that follows the oral presentation,

hard copies of this document and any materials distributed in connection with the presentation. By attending the meeting at which the presentation is made, dialling into the teleconference during which

the presentation is made or reading the presentation, you will be deemed to have agreed to all of the restrictions that apply with regard to the presentation and acknowledged that you understand the

legal regulatory sanctions attached to the misuse, disclosure or improper circulation of the presentation. The Company has included non-IFRS financial measures in this presentation. These measurements

may not be comparable to those of other companies. Reference to these non-IFRS financial measures should be considered in addition to IFRS financial measures, but should not be considered a

substitute for results that are presented in accordance with IFRS. The information contained in this presentation has not been subject to any independent audit or review. A significant portion of the

information contained in this presentation, including all market data and trend information, is based on estimates or expectations of the Company, and there can be no assurance that these estimates or

expectations are or will prove to be accurate. Our internal estimates have not been verified by an external expert, and we cannot guarantee that a third party using different methods to assemble, analyse

or compute market information and data would obtain or generate the same results. We have not verified the accuracy of such information, data or predictions contained in this presentation that were

taken or derived from industry publications, public documents of our competitors or other external sources. Further, our competitors may define our and their markets differently than we do. In addition,

past performance of the Company is not indicative of future performance. The future performance of the Company will depend on numerous factors, which are subject to uncertainty, including factors

which may be unknown on the date hereof. Each attendee or recipient acknowledges that neither it nor the Company intends that the Company act or be responsible as a fiduciary to such attendee or

recipient, its management, stockholders, creditors or any other person. By accepting and providing this document, each attendee or recipient and the Company, respectively, expressly disclaims any

fiduciary relationship and agrees that each attendee or recipient is responsible for making its own independent judgment with respect to the Company and any other matters regarding this document.

Certain statements contained in this presentation that are not statements of historical fact, including, without limitation, any statements preceded by, followed by or including the words “targets,”

“believes,” “expects,” “aims,” “intends,” “may,” “anticipates,” “would,” “could” or similar expressions or the negative thereof, constitute forward-looking statements, notwithstanding that such statements are

not specifically identified. Examples of forward looking statements include, but are not limited to: (i) statements about future financial and operating results; (ii) statements of strategic objectives, business

prospects, future financial condition, budgets, projected levels of production, projected costs and projected levels of revenues and profits of the Company or its management or boards of directors; (iii)

statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are not guarantees of future performance and involve certain

risks, uncertainties and assumptions which are difficult to predict and outside of the control of the Company. Therefore, actual outcomes and results may differ materially from what is expressed or

forecasted in such forward-looking statements. We have based these assumptions on information currently available to us, if any one or more of these assumptions turn out to be incorrect, actual market

results may differ from those predicted. While we do not know what impact any such differences may have on our business, if there are such differences, our future results of operations and financial

condition, could be materially adversely affected. You should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which such

statements are made. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement to reflect events or circumstances after

the date on which such statement is made, or to reflect the occurrence of unanticipated events.


ANTONIOS KERASTARIS, GROUP CEO

GEORGIOS KOLIASTASIS, GROUP CFO

NIKOLAOS PAVLAKIS, GROUP TAX & ACCOUNTING DIRECTOR

ANDREAS CHRYSOS, GROUP BUDGETING, CONTROLLING & FINANCE DIRECTOR

MICHAIL TSAGKALAKIS, CAPITAL MARKETS DIRECTOR

Presentation Participants

For more information:

Chrysostomos Sfatos, Group Director Corporate Affairs: [email protected] Investor Relations Department:

www.intralot.com

Phone: +30-210 6156000

Fax: +30-210 6106800

Email: [email protected]


423.3 (38.9%)

Europe

453.4 (41.8%)

Americas

209.1 (19.3%)

RoW

9M17 Revenue per Geographical

Region

€1,085.8m

Wagers1 Handled & Revenues

6,018 (+7.1%)

North America

3,947 (+5.4%)

South America

Asia

2,128 (-12.3%)

East Europe

810 (+36.6%)

West Europe

Africa

219 (+14.3%)

4,629 (-2.0%)

€17.8bn Wagers

Handled in

9M17

Video Lottery

Terminals

Lottery Games

4.0%

Racing 10.1%

IT Products

& Services

43.1%

40.1%

Sports

Betting

2.7%

9M17 Revenue per Game Type

€1,085.8m

1 Wagers handled from continuing operations


Licensed Operations - Revenue Evolution

Revenue Evolution Drivers:

• Jamaica improved sales performance in its Numerical Games portfolio and the

introduction of horse racing following the acquisition of the Caymanas Track

• Bulgaria improved top line performance mainly due to the consolidation of Eurobet

after 1H16

• Azerbaijan strong performance

• Poland capitalized on top line growth following the recent regulatory changes

in € million

160.3

715.0

82.2

17%

75%

8%

Technology

9M16

Revenues per

Contract Type

(€m, %)

Licensed

Operations

Game

Management

33.4

26.8

11.2

14.4

5.7

11.0

2.528.3

1.4

9M17

841.6

Other Bulgaria

20.2

22.2

Jamaica

3.9

Poland Azerbaijan

32.5

-8.1

715.0

47.8

9M16

164.7

841.6

79.5

15%

78%

7%

Technology

Game

Management

Licensed

Operations

9M17

Revenues per

Contract Type

(€m, %)

3Q17

1H17


Game Management Contracts - Revenue Evolution


• Softer sales in Turkey and Russia

• Turkey managed to improve its YTD performance compared to 1H17 as a result of

positive results during 3Q17

• Morocco investment yielding positive results

in € million

1.1

1.2

9M16

-3.1

Morocco Russia 9M17

-1.1

-1.0

Turkey

-4.3

82.2

1.5 79.5

0.4

-0.1

160.3

715.0

82.2

17%

75%

8%

Technology

9M16

Revenues per

Contract Type

(€m, %)

Licensed

Operations

Game

Management

164.7

841.6

79.5

15%

78%

7%

Technology

Game

Management

Licensed

Operations

9M17

Revenues per

Contract Type

(€m, %)

3Q17

1H17


Technological Contracts - Revenue Evolution


• Chilean contract uptake

• US revenue contraction due the effect of Powerball (significantly higher than the 3Q17

Powerball effect) and the equipment sale in Ohio in 1Q16

• Sale of software license right in Australia

• Improved performance in Argentina

• Uptake of Peruvian contract (Greece)

in € million

5.1

1.8

2.5

3.11.7

1.5

2.0

1.9

United

States

6.0

-13.7

Chile 9M16

160.3

5.1

0.9

0.3

164.7

Greece

-1.0

2.8

9M17 Australia

0.9

Other Argentina

3.3

-15.4

160.3

715.0

82.2

17%

75%

8%

Technology

9M16

Revenues per

Contract Type

(€m, %)

Licensed

Operations

Game

Management

164.7

841.6

79.5

15%

78%

7%

Technology

Game

Management

Licensed

Operations

9M17

Revenues per

Contract Type

(€m, %)

3Q17

1H17


Consolidated Financial Statements for 9M17 and 3Q17

(in € million) 9M17 9M16 % Change 3Q17 3Q16 % Change LTM

Revenues (Turnover) 1,085.8 957.5 13.4% 352.7 320.6 10.0% 1,451.9

Gross Profit 190.8 168.3 13.4% 63.8 49.1 29.9% 255.6

Gross Profit Margin (%) 17.6% 17.6% -0.0pps 18.1% 15.3% +2.8pps 17.6%

EBITDA 137.3 124.3 10.5% 45.1 35.3 27.8% 188.9

EBITDA Margin (%) 12.6% 13.0% -0.4pps 12.8% 11.0% +1.8pps 13.0%

EBT 37.6 19.0 97.9% 10.9 -1.3 - 23.4

EBT Margin (%) 3.5% 2.0% +1.5pps 3.1% -0.4% +3.5pps 1.6%

NIATMI from Continued Operations -20.1 -33.3 39.6% -6.4 -18.1 64.6% -58.5

NIATMI from Total Operations -32.0 1.8 - -6.2 -17.6 64.8% -32.9

“Financial Results for the 9M2017 demonstrate steady progress in all three strategic goals set by the company, namely gains in

Operational Performance, the implementation of M&A strategies to improve the profitability of our offering mix while facilitating

investments in new products and projects, and Financial Profile Restructuring to secure long-term visibility. INTRALOT’s market

potential has been manifestly recognized by the success of a 3x-oversubscribed €500m bond offering with 7 year maturity period

in September 2017. This issue allowed INTRALOT to fully repay its syndicated loans to the Greek banking sector while the diverse

mix of investors includes the majority of the highest caliber international investment houses and generates additional confidence

and credibility for INTRALOT’s prospects.”

Antonios Kerastaris, Group CEO


497534

495478

381403

2017 9M

2.6x

2016 9M

2.9x

2016A

2.8x

2015A

2.9x

2014A

2.2x

2013A

2.1x

120121

168

114

153139

5945

63696758

2016 9M 2016A 2013A 2017 9M 2014A 2015A

137124

189176165

177175195

2015A

13.3% 13.0%

2016A

13.0%

LTM 2014A

9.3%

13.3%

2015A

12.7%

9.5%

2013A

12.6%

2016 9M 2017 9M

+7.3%

+10.5% 1,086957

1,4521,324

1,235

1,9151,853

1,539

2015A 2016A LTM 2016 9M 2013A 2014A 2015A

13.4%

2017 9M

9.7%

REVENUES

OPERATING CASH FLOW AND NET CAPEX

€m

EBITDA AND EBITDA MARGIN

NET DEBT2 AND NET DEBT / EBITDA3

€m, %

1 FY15,FY16 & 9M16 results do not include

discontinued operations in Italy, Peru and Russia 2 Net debt calculated as Long-term debt plus Short-term debt and current portion

of long-term debt plus Financial Leases less Cash and cash equivalents 3 Calculated as Net debt divided by LTM EBITDA 4 9M16 Net Debt & LTM excludes the contribution of Italy and Peru

€m €m

1 1 1 1

4

Overview Of Key Financial Metrics

1

EBITDA

Operating CF Net CAPEX Net Debt Net Debt/EBITDA

EBITDA Margin

Net Debt

Net Debt/EBITDA

1

On a pro-forma basis, i.e., excluding the operating cash-flow

contribution of our discontinued operations in Italy and Peru

in the nine months of 2016 (€10.1m), there is an improvement

of 8.6% in Cash inflows from operating activities


GGR & Net EBITDA Margin

(in € million) 9M17 9M16 % Change 3Q17 3Q16 % Change

Revenues 1,085.8 957.5 13.4% 352.7 320.6 10.0%

Technology, Management & Rest

Contracts 306.5 301.0 1.8% 99.4 91.4 8.8%

Licensed Operations (Payout related) 779.3 656.5 18.7% 253.2 229.2 10.5%

Payout (%) 69.9% 69.7% +0.2pps 69.1% 70.0% -0.9pps

GGR 541.1 499.9 8.2% 177.7 160.2 10.9%

GGR (% Revenue) 49.8% 52.2% -2.4pps 50.4% 50.0% +0.4pps

nGGR 414.0 386.2 7.2% 136.8 122.2 11.9%

nGGR (% GGR) 76.5% 77.3% -0.8pps 77.0% 76.3% +0.7pps

EBITDA 137.3 124.3 10.5% 45.1 35.3 27.8%

EBITDA (% GGR) 25.4% 24.9% +0.5pps 25.4% 22.0% +3.4pps


11.7

8.114.0

13.910.2

497.0494.9

Net Debt, 9M17 All Other 2017 Refinancing

(IFRS Treatment)

Release of Collaterals Eurobet PP Instalments AMELCO Net Debt, 2016

Net Debt Movement

in € million


Key Revenue and EBITDA Contributors

61.6 66.1

228.5

109.9

287.6

69.5

17.4

69.3

175.9

5.7%

6.1%

21.0%

10.1%

26.5%

6.4%

1.6%

6.4%

16.2%

United States

Bulgaria

Azerbaijan

Jamaica

Argentina

Australia

Malta

Other

Turkey

9M17 Largest

Revenue

Contributors (in €m, %)

25.6

23.9

21.3 14.3

14.1

13.6

13.0

8.7

2.8

18.7%

17.4%

15.5% 10.4%

10.3%

9.9%

9.5%

6.3%

2.0% Turkey

9M17 Largest

EBITDA

Contributors (in €m, %)

United States

Bulgaria Azerbaijan

Jamaica

Argentina

Australia

Malta Other


Contribution from Partnerships

Country Stake 9M17 EBITDA Contribution 9M16 EBITDA Contribution

Turkey (Inteltek)1 45.00% 12% 17%

Turkey (Bilyoner) 1 50.01% 7% 6%

Bulgaria (Eurofootball Group) 2 49.00% + option for additional

2.00% 12% 14%

Bulgaria (Eurobet Group) 2 49.00% + option for additional

2.00% 4% 1%

Azerbaijan2 22.95% 10% 8%

Jamaica2 24.97% 10% 8%

Argentina3 50.01% 10% 9%

Total Partnership Contribution 65% 63%

Intralot’s Portion of EBITDA 59% 61%

1 Management Contract 2 Licensed Operation 3 12 Facilities Management (IT) Contracts with State Lottery and 1 Licensed Operation


Recent Company Developments

2017

Refinancing

• Intralot successfully priced a 7-year, €500.0m senior notes with a yield of 5.25%

• More than 170 international institutional investors participated in the offering, which was three times

oversubscribed, with tenders exceeding €1.5b.

• The proceeds have been used to fully redeem Intralot’s previously issued 6.00% senior notes due in 2021 and

repay the outstanding syndicated facilities

Strategy

Developments

• Intralot de-invested in its Jamaican operations. The transaction totaled $40.0m, approximately 12 times the

annual net profit after tax attributable to Intralot’s equity holders

• Gamenet’s filling for an IPO has been approved; the process is still ongoing

• Intralot agreed to acquire Bit8, a gaming company based in Malta in which Intralot had first invested in 2015

APPENDIX SUMMARY OF

FINANCIAL STATEMENTS


9M17 – Group Income Statement

(in € million) 9M17 9M16 % Change

Revenues 1,085.8 957.5 13.4%

Gross Profit 190.8 168.3 13.4%

Other Operating Income 13.0 14.3 -9.1%

Opex -117.8 -108.8 8.3%

EBITDA 137.3 124.3 10.5%

Margin 12.6% 13.0% -0.4pps

EBIT 86.0 73.8 16.5%

Interest Expense (Net) -39.2 -46.9 16.4%

Exchange Differences -5.9 -1.5 -

Other -3.3 -6.4 -

EBT 37.6 19.0 97.9%

NIATMI -32.0 1.8 -

NIATMI Continuing -20.1 -33.3 39.6%

NIATMI Discontinuing -11.9 35.1 -


9M17 – Group Statement Of Financial Position

(in € million) 9M17 FY16

Tangible Assets 118.0 133.0

Intangible Assets 330.0 329.6

Other Non-current Assets 217.1 231.9

Inventories 34.4 32.2

Trade Receivables 75.0 84.8

Other Current Assets 558.6 249.6

Total Assets 1,333.1 1,061.1

Share Capital 47.7 47.7

Other Equity Elements 37.5 79.9

Non-controlling Interests 57.6 68.9

Total Shareholders Equity 142.8 196.5

Long-term Debt 976.0 644.6

Provisions/ Other Long Term Liabilities 29.8 49.6

Short-term Debt 10.9 14.7

Other Short-term Liabilities 173.6 155.7

Total Liabilities 1,190.3 864.6

Total Equity And Liabilities 1,333.1 1,061.1


9M17 – Group Cash Flow (in € million) 9M17 9M16

EBT From Continuing Operations 37.6 18.9

EBT From Discontinuing Operations -11.9 36.6

Plus/Less Adjustments 113.0 82.1

Decrease/(Increase) Of Inventories -3.8 1.6

Decrease/(Increase) Of Receivable Accounts 0.7 -3.3

(Decrease)/Increase Of Payable Accounts 9.7 4.6

Income Tax Paid -24.8 -19.4

Net Cash From Operating Activities 120.5 121.1

Net Capex -59.4 -44.6

(Purchases) / Sales Of Subsidiaries & Other Investments 6.2 -32.7

Interest Received 4.0 5.9

Dividends Received 2.0 1.0

Net Cash From Investing Activities -47.2 -70.4

Subsidiary Share Capital Return 0.0 -3.4

Repurchase of Own Shares 0.0 -0.5

Cash Inflows From Loans 571.8 287.8

Repayment Of Loans -234.2 -107.1

Bond Buybacks 0.0 -3.7

Repayment Of Leasing Obligations -2.2 -6.3

Interest And Similar Charges Paid -37.8 -53.4

Dividends Paid -34.0 -37.5

Net Cash from Financing Activities 263.6 75.9

Net Increase / (Decrease) In Cash For The Period 336.9 126.6

Exchange Differences -11.3 -4.9

Cash At The Beginning Of The Period 164.4 276.6

Cash At The End Of The Period From Total Operations 490.0 398.3

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