© All Rights Reserved - Confidential

Marco Chantre Head of Procurement at SISAL Group

SISAL

Vision

• “To make people’s lives easier and more enjoyable”

Mission

• “To offer the best range in gaming, entertainment and services, responsibly and sustainably over time”

Values

• We play as a team

• We respect and care for our clients

• We believe in people and in their diversity

• We are responsible and excellent

• We innovate to grow

Who we are

• State concessionaire for Lotteries, Betting, AWPs and Online Gaming.

• Leading Italian Retail Company with a profitable online business.

• Leading Payments and Services operator, authorized from the Bank of Italy

to operate as Payment Institute.

• One of the largest distribution network, with 45,000+ points of sale and the

innovative retail gaming concepts Wincity, Smartpoint and Matchpoint.

• A leading technological Company, with state of the art platforms and

systems.

A leading Italian Retail Gaming and Payments & Services Company

Our Key Figures - 2014

13,9 bn EUR Turnover

821 m EUR Revenues

+ 2,000 Employees

45,000+ Points of Sale

~ 13million Customers **

~ 220 thousand Active On-line players

188,8 m EUR Ebitda Adjusted*

*EBITDA adjusted for non-recurring income and expenses and provisions for

disputes with regulators

** Data processed by management based on studies commissioned by the Group

A fully-fledged portfolio of innovative products

Lotteries

Betting

Electronic

Gaming

Machines

Online Gaming

Payments &

Services

GNTN concessionaire since 2009, distributing top of mind SuperEnalotto brand and

popular Win for Life, SiVinceTutto , Eurojackpot and VinciCasa games

Around 4.500 rights to operate sport and horse betting through “Matchpoint” branded

points of sales.

• Around 39,000 AWP network.

• More than 5,500 VLTs network.

• Complete on-line portfolio with Lottery and Betting products and online–only games

such as Poker Cash, Bingo, Casino and Quick Games.

• Around 220 thousand customers playing on www.sisal.it

• 87 partners and more than 490 payment services including: mobile and prepaid

cards top-ups, digital TV subscription, utility bills and tax payments.

Our Business Lines

Three formats complement each other perfectly, reflecting the different

needs of consumers

The ultimate entertainment venues

Sisal Wincity offers a wide range of gaming options – including

VLT’s, AWP and betting – but also a variety of events, an upscale

restaurant and a modern lounge bar.

Highly evolved betting agencies

Sisal Matchpoint offers consumers the full range of Sisal

gaming options, including real and virtual sports and horse

race betting.

Sisal’s network of innovative and branded POS

Sisal Smartpoint is a new Sisal branded retail network made up

of the best commercial offer of the Group, providing a new

consumer experience driven by technology and the most

professional retailers. Affiliated

Branded

+ 4,000 Branded POS

Unbranded

+ 40K Generic POS

Figures for year 2014

The Sisal Retail Model

Our spend, for retail, for production, for innovative

platforms, for ICT, for supply chain, for Marketing…

22,5 Mln€

0

Retail Rental fee Utilities Security Estate maintenance Cleaning Food Restructuring, rebranding Sales people

Manufacturing, Supply Chain, Technical Assistance, CC

Rolls and cards Technical Assistance Transportation Repair parts Call center / HD Storage/factory costs

Media & Promotion Media Trade Mkting CPA, SEO Events Sponsorship Market researchs

ICT / TLC / TV Telecomunications HW SW/HW Mantainance Licence SW IT Consulting Sisal TV

Personnel Costs (no salary)

Long Term Rental Ticket lunch Fuel Business Travel Printers Stationery Other

HW: slot, VLT, playing platforms

Procurement’s sponsorship & mission

• Procurement function within the Strategy Division…a Business Function

• Sisal Procurement mission:

Governance

Processes – for compliance & efficiencies

Team work with internal stakeholders

Impact on economics and on efficiencies

Business and innovation supporter…not a staff function

Transparency & equal opportunities

Central procurement was created 3 years ago in Sisal

…today it is 100% a corporate function…during the set up we’ve worked

on…

Centralization of procurement activities

Procurement role and segregation of duties

Planning and control

Organization & processes

Creation and integration of tools & SW

Standardization

Saving and efficiencies

• Procurement activity marketing vs. BU/Functions

• Supplier qualification and rating

• Procurement for business

• Procurement competence enhancement in the organization

• Dematerialization of procurement processes

• Preferred supplier & market specialization

…and we’ve invested energies in…

Spend analisys & governance

Processes & Procurement tools

Organization & competencies

Procurement basics for Sisal….

Spend analisys & governance

• Spend ananlisy derives by a strong study on our expenses, data, contracts…and mainly a deep dive through many interviews to internal stakeholders

• Procurement objectives and negotiation approach agreed between Procurement and Internal clientes

• By refining, year after year, the analisys and the know how, every year we face more challenging expenses, with a corporate vision…the basic it to demonstrate the value generated through our method and our PROC organization

• The competencies necessary for Procurement, not just technical, more:

Teamworker – team leader

Business partner

Listening & Communication

Curios & dinamichal

Analisys

Sinthesys

Practical & solution/results oriented

Organization & competencies

Organization & competencies Daily work is based on «projects»

• Controller

• Business

• IT

• Legal

• Procurement

• …

Shared Project document

Procurement studies business

Training on the job

Each project has a PROC senior

and a junior

The advantage of having already experienced esourcing «effectiveness»

– We’ve brough esourcing in day by day processes

– We’ve demonstratetd that through the esourcing portal we can talk in any

cases, with defined rules, with the suppliers

– We perform about 80 – 100 online tenders per year

– We’ve defined when to involve Procurement and when to perform an

online tender, through «spend trashhold»…doesn’t matter the spend

object

– Through RFP we obtain mostly the best quality/economic result…even in

single source markets, through a competitive bidding scenario

Processes & Procurement tools

• Some hints in order to succeed: • Knowledge and planning

• Early involvement

• Procurmeent active participation to business committee

• Business update with key internal clients

• Controller involvement

• Today in Sisal all internal clients: • are familiar with «technical and economichal» evaluations

• are used to finalize consistent and detailed technical specifications and forecasts…even for more advanced procurement expenses

• Talk commonly in terms of technical and economical scoring…and area aware about the strict timing that is related to an online tender

• The transparency vs. the supplier market

Processes & Procurement tools

Supplier Management & risk management

• How to obtain and update supplier info’s?

• How to reduce supplier risks, with what effort and

costs?

• How to use supplier management tools for scouting?

Does it work?

Procurement objectives for 2015 - 2016

Full demand management…complete role segregation

Group sinergies

Full Governance of procurement costs

Market sector analysis

Supplier audit & financial assessment

Value chain optimization

Cost effectiveness

• Procurement is management and governance…you

need a lot of energies and lucidity

• Is up to you if to be a «first aid» or a manager

• All the people involved in the organization should

collaborate with roles, approaches

professional…supported by tools

….if your a lacking a tec specification or a supplier

market view…no matter…you might rebuilt them

Conclusion

Thank you for your attention

A voce

• Qualche battuta finale, se c’è tempo: Le impressioni da

venditore di soluzioni vs. quando sei in azienda

– I falsi miti e le cose importanti del procurement

– Quanto vale l’eprocurement rispetto al tutto; è importante

per i junior buyer come strumento operativo

– La spend vs. la difficoltà di budgeting. Se i budget non

sono fatti bene, se la gente non classifica…per quale

finalità la spend?

– Quanto è importante conoscere la spesa, comprendendo a

fondo i contratti, i temi, le potenziali sinergie…oltre il tool

Strong branded retail network with increasing directly operated formats

(3/4)

(a) Betting shops and corners as of Dec-13 pro forma for the full roll-out of 101 new betting rights awarded in 2013 and the acquisition of Merkur Win betting business (75 shops and 29 betting rights) (b) Includes Smartpoint in test. Additional 6 being tested within Matchpoint corners Source: Company information

• «Eat Drink and Play» concept.

Full Sisal Gaming and Services

product suite

• Hosts live music and events

• About 1,000 sqm. Locations in key

cities

• Betting shops and corners

• Focused on sport and horse betting

• Betting shop format of 250 sqm

• Selected among the

top performing PoS

• Offer the NTNG portfolio,

AWP and Payments & Services

23

1 • Retail gaming strategy revolving around break-through distribution formats