kambi group plc quarterly report... · ceo kristian nylén & cfo david kenyon −due to...

KambiGroup plc

Q1 Report24 April 2020

Agenda

2Q1 Report – 24 April 2020 CEO Kristian Nylén & CFO David Kenyon

1. Kambi overview

2. Quarterly highlights

3. Financial update

4. Coronavirus impacts

5. US launches

6. Sports update

7. Q&A

Kambi at a glanceLeading B2B provider of premium end-to-end sports betting services

Q1 Report – 24 April 2020 CEO Kristian Nylén & CFO David Kenyon3

Australia | Malta | Philippines | Romania | Sweden | U.K. | U.S.A global organisation

tu863employees

Odds & trading

Risk management

Technical platform

User interfaces

Real-time sports data

B2C Operators End User

Sports betting value chain

Kambi at a glance

− Kambi mainly operates on a revenue sharemodel, thus Kambi’s growth is dependent on its operators’ success

− The foundation of the strategy is based on scalability and the majority of its cost base is fixed

− Continuous investment into proprietary technology to maintain its market leadership

− Highest level of corporate probity and integrity

Leading B2B provider of premium end-to-end sports betting services

20+ partners, including:Business model

Q1 Report – 24 April 2020 CEO Kristian Nylén & CFO David Kenyon4

revenue growth

− Strong financial performance with 33%year-on-year revenue growth

− Operator turnover growth of 27% with an operator trading margin of 9.3%

− Average daily turnover to 12 March up 47% year-on-year and up 7% sequentially

− Took first legal bets in both Illinoisand Michigan – Kambi now live in 10 US states

Q1 highlightsRecord performance to mid-March


33%Kambi revenue growth

Financial headlines€m


15

20

25

30

Q1 Revenue

2020 2019

30

32

34

36

38

40

Net cash at end of Q1

0

1

2

3

4

5

6

7

8

Q1 Operating Profit

Operator trading analysisKambi operators' turnover and trading margin


221239

219242

281 277254 259

273

307334

369398 387

412

560

505

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

100

150

200

250

300

350

400

450

500

550

600

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Turnover Index Margin%

Kambi revenue conversionQ1 2020 vs Q1 2019


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

Operator TurnoverGrowth*

FX impact Operator margin impact Taxes/marketingdeductibles impact

Other** Kambi Revenue Growth

* Operator turnover growth shown is based on Q1 2019 exchange rates**Other includes the impact of volume-related commission tiers and fixed revenues - - Denotes components of NGR from which Kambi's revenue share is calculated

Income statement


€m Q1 2020 Q1 2019 Change % FY 2019

Revenue 27.9 21.0 +33% 92.3

Operating expenses 21.1 18.4 +15% 77.6

Operating result1 6.8 2.6 +162% 14.7

Result after tax2 4.8 2.0 +141% 10.4

1 Operating result before items affecting comparability in Q1 2020 (bad debt expense of €0.6m)2 Result after tax includes items affecting comparability in Q1 2020 (bad debt expense of €0.6m)

10

€ ‘000Q1 Cash flow

43,000

44,000

45,000

46,000

47,000

48,000

49,000

50,000

51,000

52,000

53,000

54,000

55,000


Financial outlook


Impact on sporting calendar reduces revenues to 25-30%

of previous levelsMajor cost saving

programme introduced

Quarterly operating costs whilst current circumstances

persist will fall by 20-25%

Quarterly cash outflow of€7-9m until the sporting

calendar resumes

Strong Balance Sheet with €46m cash puts us in a

good position

Q2 cashflow significantly more favourable due to

working capital movements

Coronavirus mid-to-long-term impacts Short-term negativity could lead to longer-term opportunity


− Due to postponements, sporting calendar expected to be busier than normal in coming years

− Jurisdictions will expedite regulation of online sports betting due to impact on retail sector

− Situation serves as a reminder of the benefits of outsourcing to a high-quality third-party

− Sports betting industry has previously shown resilience during times of wider economic pressure

€ m

illio

n

Europe Online Betting GGR

2006 2020

2008 financial crash

Making historyFirst to market in Illinois and Michigan


− In Illinois, Rush Street’s Rivers Casino in Chicago, Illinois, took the first legal sports bet on 9 March

− Two days later in Detroit, Michigan, Penn National’s Greektown Casino launched ahead of the competition

− Kambi added Mississippi to its list of active states, with five PNG retail launches, now active in 10 states

− Kambi and partners ready for further launches as soon as it is safe to do so and restrictions are lifted

Illinois One of the most populous states,

expected to be key sports betting market

Michigan Population of c.10m,on-property sports

betting live with online to follow shortly

Setting the pace in the US


1st in New HampshireTook first

legal wager

1st in New York Took first

legal wager

1st in New Jersey Took first legal online wager

1st in Pennsylvania Took first legal online wager

1st in IndianaTook first legal online

wager

1st in Iowa Launched on first day

of market

1st in MichiganTook first

legal wager

1st in IllinoisTook first legal wager

ColoradoReadying launch with

partners

Kambi currently liveOnline and retail

Retail only

Online only

0

20

40

60

80

100

120

140

Turn

over

Inde

x

Daily Indexed Turnover, selected sports, Kambi network 13-31 March 2020

Other Sports Football ESports Table Tennis

Sports turnoverTurnover composition during final weeks of quarter

Q1 Report – 24 April 2020 CEO Kristian Nylén & CFO David Kenyon

13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st

Turnover focused on football and other

sports

Table tennis and eSports generated majority

of turnover

Leagues and tours set out resumption plans May, June and July should see return of sports


The GuardianFox News

BBCEvening Standard

Summary


Measures implementedto mitigate financial impact

while protecting long-term future

Strong financial performance with 33% revenue growth

Resumption of sports will restore momentum

displayed in past quarters

Q&A


Thank you


kambi group plc quarterly report... · ceo kristian nylén & cfo david kenyon −due to...

Documents