kindred q4 2018 v12 print · 2014 q2 q3 q4 q1 2015 q2 q3 q4 q1 2016 q2 q3 q4 q1 2017 q2 q3 q4 q1...

Henrik TjärnströmCEO

Q4 201813 February 2019

© Kindred Group plc 2019

• Highlights• Financial results• Business overview• Summary

OutlineOutline

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Q4 2018 Key Report Highlights


GWR from mobile

GBP 185.8m(+11%)

Gross winnings revenue

GBP 250.1m(+5%)

EBITDA

GBP 58.5m(-21%)

Active customers

1,568,574 (+18%)

Earnings per share

GBP 0.173(-22%)

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FY 2018 Key Report Highlights


GWR from mobile

GBP 662.7m(+23%)


GBP 907.6m(+21%)

EBITDA

GBP 202.8m(+12%)

Active customers

3,114,886(+9%)

Earnings per share

GBP 0.580(+12%)

Kindred’s share of the European online market

0

5

10

15

20

25

30

35

40

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e 2019e 2020e

EURbn

Market share

Source: H2GC Dec 2018

CAGR 2011-2018 Online 12.2% | Kindred 25.6%

2.3%

5.2%


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Financial results



Strong levels of activity and all-time highin active customers resulted in all-timehigh for Gross winnings revenue”

Q4 2018

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76.5 76.1 122.4 153.2 207.877.1 80.5126.6

166.6

219.0

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

Q1

Q2

Q3

Q4

GBPm

226.7268.0

312.0354.1

544.1

751.4

907.6

Geographic growth– Key Report Highlights Q4 2018 vs Q4 2017


Nordics

Western Europe

-5%

+13%

GWR as reported in GBP

-3%

+13%

Organic GWR in constant currency

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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

GBPm +11%

Q4 2018 P&L FX impact v Q4 2017


5.4

SEK 11.63711.043 -5.4%NOK 10.86510.837 -0.3%EUR 1.1271.127 0.0%DKK 8.4138.389 -0.3%

Q4 2018Q4 2017Avg rate Movement

GBPmGross winnings revenue -2.0Cost of sales / Opex 0.3FX gain on operating items 0.6EBITDA FX impact Q4 2018 -1.1FX loss on loan repayment -0.7Other items below EBITDA 0.1Profit before tax impact Q4 2018 -1.7

AUD 1.7941.727 -3.9%

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

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EBITDA – Excl 2014 Kambi one-off item


21.3 14.4 27.6 29.4 47.314.0 19.021.1 30.5

41.5

21.7 17.4

33.146.6

55.5

18.4 26.2

38.9

73.8

58.5

2012 2013 2014 2015 2016 2017 2018

GBPm

Q1

Q2

Q3

Q4

52.563.4

75.5 77.0

120.7

180.3

202.8

A scalable business model…


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

Betting duties % of GWR (trailing 12m)

Underlying EBITDA margin % (trailing 12m)

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…showing our ability to absorb betting duties


GBPm

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

Betting duties Underlying EBITDA

2013 2014 2015 2016 2017 2018

Other Costs analysisExcl. Non-recurring items


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

GBPm2014

FY2015

FY2016

FY2017

FY2018

FY2018

Q4

Reported Other Costs 47.9 43.1 69.4 109.1 122.4 31.4

Depreciation & Amortisation -16.8 -13.0 -23.8 -42.6 -46.8 -11.5

FX loss/gain on Opex -1.8 -0.7 -0.6 -1.5 -1.2 0.6

Other Costs post D&A and FX 29.3 29.4 45.0 65.0 74.4 20.5

9%

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0.044 0.087 0.0720.1310.059

0.059 0.090

0.1120.057

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

Q3

Q4

EPS development – Excl 2014 one-off items

Q1

Q2

GBP

0.244

0.366


0.5160.580


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

2019 effects for Kindred

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

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

• Limited P&L impact, neutral on cash flow.Income Statement (approx. amounts) GBPm

Adjusted EBITDA +10.3Depreciation and amortisation -10.2Finance costs -1.2 Profit before tax -1.1

Cash Flow Statement (approx. amounts) GBPm

Operating cash flow +11.3Investing cash flow -1.2Financing cash flow -10.1Net cash impact 0.0

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• Strong cash flow generated from operations

• Working capital impacted by movements in customers balance, prepayments and marketing & tax accruals

• Additional capex for long term investments in technology and new offices


2018 Free Cash Flow

169.2

150.1

5.00.8

11.04.0

Free Cash Flow2017

Cash generatedfrom operations

Income taxes CapitalExpenditures

Items affectingcomparability

Free Cash Flow2018

GBPm

GBP 0.496 (0.551) per share/SDR equivalent to SEK 5.92

75%of FCF

• The Board has reviewed the projected cash requirements for 2019

• Proposing for this year to increase the dividend above 50 per cent of free cash flow to GBP 112.5 (125.6) m

• This is in line with the dividend policy to distribute surplus cash

• Paid out in 2 instalments in May and November 2019

Proposed cash dividend


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Business overview


0

200

400

600

800

1,000

1,200

1,400

1,600

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 Q3 Q4 Q1 Q2 Q3 Q4

Active customers


Thousands

2011 2012 2013 2014 2015 2016 2017 2018

ATHATH

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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

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

22 23 21 2130 23 26 22 28

23 20 23 2321

23 22 2622

2 2 2 22

2 2 2 2

49 51 51 5145 50 47 48 46

4 4 3 3 2 2 3 2 2

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

44 45 41 40 35 36 34 34 32

8 77 6

7 7 7 8 7

46 46 50 52 55 55 56 56 59

2 2 2 2 3 2 3 2 2

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42016 20162017 20172018 2018

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US updateUS update

Strategic partnership withMohegan Sun Pocono in Pennsylvania

Live by end of 2019

Live in

New Jersey

Early March 2019

Netherlands update

• Voting in the Senate on 19 February 2019

• Based on the proposal from July 2016

• Secondary legislation published and consulted on

• Market opening in Q3 2020 at the earliest


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• 5-year licence granted• Mandatory deposit limit• A national self-exclusion system• New marketing channels

‒ sponsorships, Google & Facebook• Only one bonus offer per customer

‒ short term impact on bonus cost now tailing off

• Good intake (+166%) and activity (+97%)• Swish payment method

Swedish market from 1 Jan 2019Swedish market from 1 Jan 2019



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Summary Q4 2018

GWR SB margin after FB EBITDA

EPS Activecustomers

GWR from mobile

+6%in constant currencies

9.4% -21%

-22% +18% +11%

Contact

Investor RelationsInga Lundberg

+44 788 799 6116

[email protected]

Calendar


25 October 2019Q3 will be published at 7.30 CET

24 April 2019Q1 will be published at 7.30 CET

24 July 2019Q2 will be published at 7.30 CET

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kindred q4 2018 v12 print · 2014 q2 q3 q4 q1 2015 q2 q3 q4 q1 2016 q2 q3 q4 q1 2017 q2 q3 q4 q1...

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