The multinational sports betting and gaming group 2014 Interim Results and Trading Update...

The multinational sports betting and gaming group

2014 Interim Resultsand Trading Update

“Delivering returns today, building for greater returns in the future”

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Contents

• Overview

• Strategy

• Results and current trading

• Operating review and product development

• Investments and business development

• Regulatory update

• Challenges

• Summary

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Overview“Delivering first class returns today, building for an even more successful future”

“Five consecutive quarters of growth”

• Interim results– Clean EBITDA up 26% to €22.4 million– NGR up 44% to €105 million– Quarterly dividend of 12.5 €cents enhanced by “special” of 2.5 €cents – 96% increase over 2013

•World Cup was a complete success on all fronts: customer acquisition / sports margin/proved system capabilities and stability

• Current trading, NGR at €628k per day is up 20% on Q3-2013

• Further market launches planned for 2015; strategic investment in Scandinavia already made

•GVC aim is to aggressively grow; earnings, dividends and SH value through: leveraging/developing our platform; entering new markets, driving synergies on acquiring non-dilutive acquisitions

GVC has never been in a stronger position than now

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Strategy

• Continue aggressive, profitable growth and cash generation

• Enhance product to make Group market leading

• Localise product for new markets; Spanish Latam and some Asian markets

• Continue investment in “in-play” product - expected to drive growth

• Invest more on in-house mobile / tablet product – another driver of growth

• Maintain dividend policy: 75% of free cashflows + specials when circumstances permit

• Continue to attract people-talent

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Trading : last 5 quarters

Per dayQ3-2013

€'000

Per dayQ4-2013

€'000

Per dayQ1-2014

€'000

Per dayQ2-2014

€'000

Per dayQ3-2014

€'000Y on Y %

change

Sports wagers 3,335 3,926 3,765 3,907 3,894 17%

Sports margin 9.9% 8.4% 10.0% 9.8% 10.4%

NGR 523 529 559 602 628 20%

NGR per quarter 48.1 48.6 50.3 54.8 50.2€mil l ions

By Q3-2014 By Q3-2013 Change

Cumulative dividend declared 55 €cents 28 €cents 96%

80 days elapsed, 12 days to go

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Financial review

• Business model (slide 7)

• P & L (slide 8)

• Cashflow (slide 9)

• Balance sheet (slide 10)

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Business model, based on H1-14

Betboo earnout + corp tax etc.

* For investment and dividends

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P&L – normalised*

H1-2014 H1-2013 H2-2013

In € millions

Proforma revenue 105.1 85.3 96.8NGR 105.1 73.2 96.8Contribution 56.7 45.6 57.0Contribution margin 53.9% 53.5% 58.8%Expenditure (34.3) (27.8) (36.5)Clean EBITDA 22.4 17.8 20.5Clean EBITDA margin 21.3% 20.9% 20.1%Net fi nancial income/(expense) (0.9) (0.1) (1.0)D&A (1.8) (1.8) (2.0)Share option charges (0.1) (0.2) (0.5)Profi t before tax 19.6 15.7 17.0Tax (0.4) (0.3) (0.4)Profi t after tax 19.2 15.4 16.6

* Excluding exceptional items

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Cashflow

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Balance sheet

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Operational review

• Revenues and KPI’s

• Product and business development

• Regulatory position

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Group : revenue by business

Current trading InterimsQ3-2014 Q3-2013 % change H1-2014 H1-2013 % change

In €000's per daySports wagers 3,894 3,335 17% 3,836 2,771 38%Sports margin % 10.4% 9.9% 9.9% 10.3%Sports NGR 325 267 22% 287 242 19%Gaming NGR 223 179 25% 209 145 44%

Total sportsbook NGR 548 446 23% 496 387 28%

CasinoClub NGR (slide 19) 80 77 4% 84 85 -1%

GROUP NGR 628 523 20% 580 472 23%

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Group: KPIs

Q3-2014 Q3-2013 % change H1-2014 H1-2013 % change

Like-for-l ike days in period 80 days 80 days 181 days 181 days

No. of Unique actives in period 236,425 193,270 22% 368,533 348,998 6%

No. of New funded players in period 55,276 42,790 30% 147,403 106,291 39%

Value of deposits per day (€000s) 1,578 1,291 22% 1,500 1,287 17%

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Sportsbook: revenue

Q3-2014 Q3-2013 % change H1-2014 H1-2013 % change

In €000's per day

B2B (s l ide 16) 173 155 12% 159 207 -23%

Latam (s l ide 17) 73 65 12% 56 54 4%

Other Markets (s l ide 18) 302 226 34% 281 126 123%

Sportsbook sub-total 548 446 23% 496 387 28%

GGR - In-play 235 223 6% 233 189 23%

GGR - Mobi le 147 42 253% 109 29 276%

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Sportsbook: KPIs

Q3-2014* Q3-2013** % change H1-2014 H1-2013 % change

Unique actives 221,664 181,180 22% 350,695 330,387 6%

New funded players 51,407 41,178 25% 143,414 100,871 42%

Deposits per day (€000's) 1,365.6 1,044.4 31% 1297.0 1074.9 21%

In-play GGR % 59% 68% 61% 66%

Mobi le GGR % 22% 8% 18% 6%

* to 18 Sept 2014

** Q3-2013 adjusted for fi rst 80 days

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B2B: revenues

• Counterparty contract with East Pioneer Corporation

• Business performing well, • Difficult comparison to H1-2013 with volatile high-rollers• H1-2014 up 8% on H2-2013• Stronger management recruited

• Turkish Lira FX rates still weaker than 2013, but stronger than Q1-2014

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Latam: revenues and KPI’s

Q3-2014* Q3-2013 % change H1-2014 H1-2013 % change

In €000's per day

Sports wagers 601 444 35% 482 326 48%

Sports margin % 10.70% 9.60% 10.3% 10.1%

Sports NGR 53 35 51% 39 28 39%

Gaming NGR 20 30 -33% 17 26 -35%

Total NGR 73 65 12% 56 54 4%

Unique actives 41,339 35,689 16% 60,302 54,395 11%

New funded players 10,845 6,974 56% 21,171 7,655 177%

Current trading Interims

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Other sports markets

• Strong performance across all territories

• World Cup brought in growth

• Excellent, incentivized management teams

Q3-2014 Q3-2013 % change H1-2014 H1-2013 % change

In €000's per day

Sports wagers 2,159 1,833 18% 2,268 1,055 115%

Sports margin % 9.6% 8.4% 8.7% 7.7%

Sports NGR 166 124 34% 141 69 104%

Gaming NGR 136 102 33% 140 57 146%

Total sportsbook NGR 302 226 34% 281 126 123%

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CasinoClub

• Excellent management retains loyal customers

• Product limitations through bought-in software, but very stable

• Mobile launch planned Q1-2015

• Stand-alone EBITDA over €7 million for H1-2014 (50% EBITDA multiple)

• Pays 50% of Group dividend

Q3-2014 Q3-2013 % change H1-2014 H1-2013 % change

In €000's per day

GROUP NGR 80 77 4% 84 85 -1%

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Developments

• Sportsbook development• In-play• Mobile• Sports platform• Gaming

• Business development

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Product development : “in-play”

“Around 70% of sports wagers from the in-play product”

• Crucial to success of GVC – our aim is to have a market leading product• Since GVC acquired Sportingbet, significant development and improvement• Plans: more live streaming, and more markets• Q1-2015, new product launch to drive further customer engagement

Maximum number of concurrent in-play markets (up over 100%)• August 2013 – 1,843• August 2014 – 3,564• September 2014 – already hit 4,102

Number of Monthly In-Play Events,• H1-2013 - 65,337• H1-2014 - 81,234

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Product development: mobile / tablet

Mobile GGR averages 22% of total GGR across all markets (from a low inherited base), but in some markets it is already as high as 65%

• Core product, being developed with highly skilled in-house team• New mobile web tablet products for sportsbook and casino• New native iOS mobile sportsbook• New native iOS mobile casino• Upgraded native iOS tablet sportsbook• Native Android sportsbook – next year

• Development team increased from 17 to 50 during 2014 and incurred circa €2 million in cost

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Product development : Sportsbook

• New Sportsbook Bonus Engine across all platforms (web and mobile)

• Expanded Basketball product range

• 11,000 new streamed events annually on all platforms

• New trading models for Football and Tennis – 1 game per trader, now up to 8 games per trader

• Full re-design on all platforms

• Cutting-edge new product launch planned for 2015

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Business development

• Latam expansion into Spanish speaking markets via partnerships in Q4-2014

• Asia team being recruited ahead of 2015 launch

• Other B2B deals in pipeline

• Impressed with Betit management and their rapidly growing business and market share

• Continued focus for all deals is earnings and dividend enhancing

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Regulatory

GermanyAn Administrative Court in Wiesbaden has put a temporarily halt on Germany’s plans to award 20 federal sports betting licences following an appeal from a number of operators

United KingdomNew licensing regime takes effect 1 October 2014. Combined remote operating licence granted already. POC is a real cost to the business, if H1-2014 was restated, the EBITDA would have been €0.75 million lower. BulgariaFirst part of local licence application submitted

Denmark / South Africa / PhilippinesAlready licenced

TurkeyGVC provides full B2B service to customers of EPCRegulatory environment unchanged with government monopoly

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Challenges and pressures

• Regulatory

• World Cup, not less than €2 million in EBITDA value absent in 2015

• POC – current impact estimated at €1.5 million

• Development expenditure on mobile continues and has profit lag

• New market launches take time to break-even

These pressures expected to be offset and exceeded through customers acquired during World Cup and beyond as illustrated in Q3-2014.

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Summary

• GVC is highly profitable and diversified with excellent growth prospects

• Excellent growth• Q3-14 NGR per day 20% higher than Q3-13• Fifth consecutive quarter of growth.

• Sportingbet acquisition transformational with now a market leading:• Sportsbook• Mobile product (in-house) • Trading team

• Highly experienced and motivated management across the organisation

• Aggressive product and new market launches planned

• Highest paying dividend company in sector

• Board very confident on future prospects