sazka group...2 2015 figures. 3 2016 figures. 4 as per hrvatska posta company website. 5 no. of...
TRANSCRIPT
December 2018
SAZKA GROUP
CORPORATE PRESENTATION
SAZKA Group: Europe’s largest lottery company
• Largest Pan-European lottery group
• Primary focus on lotteries with a secondary focus
on digital and sports betting
• Presence in Czech Republic, Greece, Cyprus, Austria,
Italy and Croatia with leading position in each
market supported by iconic and trusted brands
and unrivalled distribution networks
• Long-term licences provide us with significant
renewal advantages
• 100% of our gaming revenue is regulated, and
approved by numerous regulators worldwide including
the EU, Switzerland and Australia.
• Entrepreneurial ownership: KKCG (75%) and
EMMA Capital (25%)
SAZKA Group at a glance Group key operating statistics
Source: Company and H2 Gambling Capital 2018.1 Based on no. of years SAZKA Czech, OPAP, CASAG and LOTTOITALIA have offered lottery services; and SuperSport obtained its sports betting license.2 Amounts staked placed with companies in which the SAZKA Group holds an ownership interest (2017PF).3 Total headcount in companies in which SAZKA Group holds an ownership interest (Company information 2017, CASAG, 2016).4 Total addressable market of adult population.
2
Approximately
65,000POS network (2017)
~€17bn Amounts staked2
4 of 5 SAZKA Group
businesses established
+25 years ago1
100% of revenue regulated
~ 7kEmployees3 (2017)
~€7 Contributed
to society for each
€1 of profit
82 million+Potential customer base4
#1 playerin each of its core markets
Lottery focused business mix, geographically diversified
• Primary focus on lotteries (78%) with a secondary focus on digital (12%) and retail betting (8%)
• Balanced mix with no geography exposure of more than 30%
Product split Geographical split
2017 EBIT PF weighted by economic interest attributable to SAZKA Group
12%
8%
78%
2%
Retail BettingLotteries Digital Other
3
19%
18%
30%
12%
21%
Czech Republic ItalyGreece & Cypruss Austria Croatia
Leader in all key Continental European countries where lotteries are privately operated
Source: Company information, European Lottery association.Note: Croatia lottery market is state owned and operated. Albania is privately operated.
4
Geographic footprint
Private lotteries (SAZKA Group present)
State/Non-profit organizations
#1 lottery company in Greece and Cyprus• Exclusively operates the
national lottery, numerical
lottery, instant lottery, land-
based sports betting, VLTs and
horse racing
• 12,944 POS
• Management & board control
#1 numerical lottery operator in Italy• Exclusive licence for Lotto
• 33,920 POS
• Minority shareholder with strong
governance and operating rights
#1 lottery operator in the Czech Republic• On-line entertainment hub
platform (lotteries, online
gaming and sports betting)
• 11,487 POS
#1 Croatian sports-betting and online casino operator• Sports-betting licence since
2000
• 100% regulated
• 1,151 POS
• Management & board control
#1 lottery operator in Austria• Exclusive lottery licence and
operator of casinos
• Other gaming operations include
sports betting, VLT and online
gaming
• 5,131 POS
SuperSport (sports betting)
100.0%
38.0%
32.5%
67.0%
23.7%
Private lotteries (SAZKA Group not present)
Significant player at an attractive and growing lottery market
Lottery Gross Gaming Revenue
(GGR) 2017€34bn€104bn €8bn
World
2017 Lottery GGR by Region
Rest of the World68%
EU 2832%
SAZKA Group
countries1
24%
Global Lottery GGR€104bn
EU 28 Lottery GGR€34bn
Lottery GGR CAGR (2017-
22e)1.7%2.1% 3.4%
Source: H2 Gaming Capital 2018.1 Countries in which SAZKA Group operates lotteries i.e. Czech Republic, Cyprus, Greece, Italy, Austria.
5
Strong M&A and organic growth track record
6
1 Amounts staked placed with companies in which the SAZKA Group holds an ownership interest. Amounts Staked includes (on a full-year basis): 2012 (SAZKA Czech), 2013 and 2014 (SAZKA Czech & OPAP), 2015 (SAZKA Czech, OPAP & Casinos Austria Group), 2016 (SAZKA Czech, OPAP, Casinos Austria Group, LOTTOITALIA), and 2017 (SAZKA Czech, OPAP, Casinos Austria Group, LOTTOITALIA and SuperSport). SAZKA Czech figures as per average of year exchange rate as per Czech National Bank (2012 25.1 EUR/CZK, 2013 25.9 EUR/CZK, 2014 27.5 EUR/CZK, 2015 27.3, 2016 27.0). SAZKA Czech 2017 figures as per exchange rate of 25.70 EUR/CZK and SuperSport figures as per exchange rate of EUR/HRK 7.4637).
0.2
4.0 4.6
8.3
16.7
17.0
2012 2013 2014 2015 2016 2017
Privatisation of 33% stake in OPAP
Acquisition of 32.5% stake in LOTTOITALIA(JV with Lottomatica)
Acquisition of 67% stake in SuperSport
2011 2013 2015 2016 2017 2018
Acquisition ofSAZKA Czech
Acquisition of11.4% indirect stake in
Casinos Austria
Acquisition of an indirect 11.6% stake in Austrian
Lotteries
Acquisition of additional share capital of CASAG, taking total
indirect stake to 38%
Amounts staked1 growth driven both organically and by acquisitions
€ bn
84% share of
numerical lotteries
43% share in overall
lotteries market
Leading positions across markets through iconic and trusted brands
Source: Company information, H2 Gambling Capital 2018
Note: All figure as per GGR 2017 for legal market with market size as per H2 Gambling Capital data. Figures for LOTTOITALIA market share are based on amount staked
1 Jackpot market share is part of the numerical lottery market share; 2 Company calculation based on Croatian GGR for 2017 (H2GC) and SuperSport GGR for 2017; 3 SAZKA Group
estimates for year ended 2016 based on website traffic analysis and information provided by SuperSport management. 7
Market share
100% lottery market
share
71% overall gaming
market share
100% lottery, casino,
VLTs and online lottery
/ casino market share
55% share in Sports
betting2
~60% share in online
casino market3
94% numerical
lottery market share
100% Jackpot
lotteries market share1
80% instant lottery
market share
Numerical lotteries
Instant lotteries
Sports betting
VLTs & casinos
Key b
ran
ds
Source: Company information, Eurostat.1 Post office and petrol stations figures refer to total number of post offices and petrol stations in the respective countries. Not owned by SAZKA Group. For comparison reasons only.2 2015 figures. 3 2016 figures. 4 As per Hrvatska posta company website. 5 No. of Petrol Stations in Croatia in 2015 per UPEI report 2015. 6 SAZKA Czech type of POS breakdown as of 31/12/2017, OPAP type of POS breakdown as of 31/12/2017, fixed shops not including street vendors; CASAG figures as per last reported 2016; LOTTOITALIA figures as per 2016 ADM Libro Blu report. 7 Pre-selected combination of lottery tickets for sale in supermarkets (PENNY, COOP, TESCO) and in Czech Post, no terminal, cash-register embedded. 8 SuperSport operates also one Casino and two gaming arcades with slots.
8
• All products delivered via POS network or digital channels
• Asset-light business model
• Long-term relationships with 3rd party retailers
• Growing, profitable category for retailers with no/limited inventory and space allocation
• Unique exclusive franchise shops network in Greece
Key highlights
POS1
Sazka
POS
Post
office
Petrol
stations
11,487
3,868 3,906
3 OPAP
POS
Post
office
Petrol
stations
12,944
2,530
6,150
2 Lotto
italia POS
Post
office
Petrol
stations
33,920
13,048
20,750
2
Super-
sport POS
Post
office
Petrol
stations
1,151
~8001,016
CASAG
POS
Post
office
Petrol
stations
5,131
2,6701,792
3 4 5
Digital and mobile
Type ofPOS6,8
News agent independent
News agent chains
Czech Post
Petrol stations
Lottery Inside7
24%
12%
16%
14%
35%
Agencies Greece
34%
Tobacco shops
Bar / coffee shops
75% 25%
Tobacco shops
Petrol stations
Others
46% 17% 37%
Brick/mortar betting shops
SSBTs in third party bars/cafes
30% 70%63%
2%
2%
Agencies Cyprus
Play Gaming HallsInstant & Passive street vendors & third party
Unique distribution network with unparalleled customer reach
Cro
ati
aIta
lyG
reece
Au
str
iaC
zech
2018 2020 2022 2024 2026 2028 2030 2032+
1 Six out 12 casinos licenses expire in 2030.
9
Num. Lotteries
Inst. Lotteries
VLTs
Online
Horse racing
Sports betting
12
8
17
12
1812
Lotteries
Domestic casinos 121
9
7
Sports betting 7
Land & online casino games 8
4
Long-term licences with unblemished renewal history
Successful licence renewals since 1956
National gaming operator
since 1958, fully privatised
in 2013
Lottomatica (SAZKA Group’s JV partner) has held exclusive licence since 1993
Exclusive lottery licence since 1986
Sportsbook licence since 2000
GGR
€m
EBITDA
€m
5% 2%
11%
50%4%
11% 8% 15% 72%
10
Source: Annual reports, SAZKA Group.1 For LOTTOITALIA, represents Amounts Staked (and not Gross Gaming Revenue).
Since our ownership
121
206
2012 2017
% CAGR
36
61
2012 2017
2013 2017 2015 2017
51
76
2016 2017
222
306
2013 2017
134
176
2015 2017
27
47
2016 2017
1,220
1,456 1,2281,284
342
2013 2017
2013 2017
n.a.
6,333
7,481
Historical Information
1
Track record of resilient growth
SAZKA Group entrenched in societies where it operates
Source: Company information.1 Includes gaming taxes, amortisation of licence fees and corporate taxes.
11
Key highlightsImportant contributor to the local economy1
35
61
2012 2017
74%
408
611
2013 2017
+50%
2013 2017
1,5431,874
+21%
535653
2013 2017
+22%
SAZKA OPAP
LOTTOITALIA CASAG
• Important contributor to society in the
form of mandatory taxes / levies
• Contribution to good causes
• Czech Olympic Committee, OPAP
Sports Academies Program, and the
Austrian Special Federal Sports Fund
• OPAP is one of the highest taxpayers
in Greece
• SAZKA Czech and CASAG are among
the 10 largest taxpayers in Czech
Republic and Austria, respectively
• Responsible Gaming principles applied,
confirmed by Responsible Gaming
Certificates received from World Lottery
Association (WLA) and / or European
Lotteries Association (EL)
• Significant and consistent contribution to
employment - SAZKA Group directly
employs around seven thousand people
25% ownership75% ownership
Entrepreneurial owners with a long-term gaming focus
• EMMA Capital is a multinational investment group
specializing in particular on retail and consumer oriented
industries including lotteries and gaming
• EMMA Capital is the managing shareholder of the Home
Credit Group, one of the largest consumer finance
companies in the world with operations in 10 countries and
biggest consumer company in China
• Other investments alongside SAZKA Group and Home Credit
include hospitality and energy assets
• KKCG is a multinational investment group specializing in the
acquisition and development of strategic portfolios with a
particular long-term focus on gaming and entertainment
• KKCG holding is incorporated in Switzerland with more than
25 portfolio investment companies located in 10 countries
including Austria, Czech Republic, Greece, Italy, Israel,
Russia, Ukraine, USA and others
• The group's long-term investment strategies focus on
energy, chemicals, lotteries, tourism, information
technologies and real estate
12
Katarina Kohlmayer
KKCG CFO
Karel KomárekKKCG Founder and sole shareholder,
SAZKA Group Chairman
Pavel ŠarochKKCG CIO
Jiří ŠmejcFounder of EMMA Capital,
SAZKA Group Deputy Chairman
Pavel HorákEMMA Capital CIO
13
• Robert led the team
responsible for SAZKA’s
turnaround, which has
become one of the fastest
growing lottery companies
globally
• Serves as 1st Vice President
of the European Lotteries
• Previously served as CEO of
T-Mobile Slovakia and
T-Mobile Austria
• Studied Business
Administration at Prague
University of Economics
Robert ChvátalChief Executive Officer
SAZKA Group
Peter StohrChief Financial Officer
SAZKA Group
Štěpán DlouhýChief Investment Officer
SAZKA Group
• Peter has a long track record
in finance
• Joined SAZKA Group from
PPF Group and EMMA
Capital, where he was
responsible for direct
investments
• Previously served as Vice
President with Citi Private
Equity in London, Salomon
Smith Barney and Arthur
Andersen
• MBA from Columbia
Business School and London
Business School
• Štěpán leads M&A and
strategic business
development
• Led acquisition of CASAG,
LOTTOITALIA, SuperSport
and bids for Tipico and
Turkish National Lottery
• Štěpán was Investment
Director at KKCG covering
investments in the gaming
and telecom sectors
• Joined KKCG from Chayton
Capital, a London-based PE
• Masters in Finance from
Prague University of
Economics
Experienced management team committed to bringing innovation to the gaming sector
Radek VáňaGeneral CounselSAZKA Group
• Radek is responsible for the
supervision of all legal and
corporate matters within
SAZKA Group
• Joined SAZKA Group from
KAZ Minerals (formerly an
FTSE 100 constituent) where
he was Chief International
Counsel
• Previously also worked as
senior lawyer at
Allen & Overy
• Holds Master in Law from
Charles University in Prague
Tony KhatskevichChief Technology Officer
SAZKA Group
• Tony leads SAZKA Group’s
technology and innovation
strategy
• Has global experience from
Israel, US, and Estonia
• From 2012 Tony served as
Vice President for Playtech,
the world´s largest online
gaming solutions supplier
• Holds Master and Doctor
degrees in Computer
Science and Mathematics
from Tbilisi State University,
Georgia
Shift to digitalgaming
Expanding lottery product portfolio
Diversification to additional
gaming verticals
Expansion into sports
betting
Distribution network and marketing
Procurement
TechnologyOrganisation
• New online
gaming
legalisations
favourable to
onshore
operators
• Leverage
existing online
sport betting
platforms to
cross-sell to
other online
gaming verticals
• Leverage
extensive POS
network
coverage to
broaden product
offering
• Expand the
distribution
reach with
additional
terminals and
with pre-
selected
combinations of
lottery tickets
• Reduce cost
base and
increase
operational
efficiency
• Continue digital
transformation
• Efficient
corporate
governance
• Value adding
parenting role
of group
• Invest in
technological
support for
online business
growth
• Invest into CRM
for online
platforms
• One of the
largest
customers for
technology
providers with
strong
purchasing
power
• Synergies in
equipment
sourcing
working with
multiple
providers
• Grow lottery
GGR per adult
above European
average levels
• New lottery
product
portfolio
innovations
• Utilise brand
and wide
distribution
network to
expand in other
segments
• Capture greater
market share in
sports betting
• Exploit potential
of cross-selling
to other online
gaming verticals
• VLTs, gaming
machines and
Casinos
• Take advantage
of anticipated
stricter
regulations on
gaming
machines
14
Organic growth avenues
Contacts
London Office1 Connaught PlaceLondon W2 2ETUnited Kingdom
Radek NemecekIR & PR Manager +420 727 982 [email protected]
www.sazkagroup.com
Prague OfficeVinohradska 1511/230100 00 Prague 10Czech Republic