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• Introduction: Roger Withers, Chairman
• Financial Review: Shuki Barak, CFO
• Review of 2010: Mor Weizer, CEO
• Current Trading: Mor Weizer, CEO
• Strategic Initiative: Acquisition: Mor Weizer, CEO
• Questions and Answers
1
• Solid performance across key financial metrics
• Gross income up 26%
• Adj EBITDA up 10%
• Adj Net profit up 4%
• Final dividend set at 9.6 € cents
• Total of 19.0 € cents for the year, up 4%
• Positioning for growth in regulated markets
2
• Strategic Partnerships
• Scientific Games
• Sportech
• Acquisitions
• Virtue Fusion
• Intelligent Gaming (Jan 11)
• PTTS Turnkey (Mar 11)
• Corporate Governance
• 2 experienced non-execs & Head of Compliance
3
• UKLA has deemed Playtech to be currently ineligible for a Premium Listing
• A key test is that a company must have audited accounts covering at least 75% of its business for the past three years
• due in part to the rapid growth of WHO, the business contributed over 25% of Playtech’s profits in 2010
• no full year accounts for William Hill Online as only formed in late 2008
• by the end of 2011, Playtech will have audited accounts for WHO for the period 2009 to 2011
• Playtech is committed to attaining a Premium Listing in early 2012
4
€111.5 €111.5
€74.7
€137.3
€114.8
€93.7
€173.1
€142.3
€103.1
50
70
90
110
130
150
170
Gross income Total revenue Adjusted EBITDA
2008 2009 2010
+26.1%
+24.0%
+10.0%
5
€111.5 €111.5
€74.7
€137.3
€114.8
€93.7
€173.1
€142.3
€103.1
50
70
90
110
130
150
170
Gross income Total revenue Adjusted EBITDA
2008 2009 2010
€93.7
€103.1
Adjusted EBITDA
2009 2010
2009
Adjusted EBITDA
Gross income
2010
Adjusted EBITDA
Gross income
2009
Adjusted EBITDA
Total Revenue
2010
Adjusted EBITDA
Total Revenue
Out of Gross Income
Out of Total Revenue
68.2%
81.6% 72.4%
59.5%
Adjusted EBITDA Margin
The Decrease in the 2010 margins is mainly due to acquisitions and the
withdrawal from France
+10.0%
6
Total Results
40
60
80
100
120
140
Total Revenue 2009
Total Revenue 2010
Adjusted EBITDA 2009
Adjusted EBITDA 2010
VFGTSPT Organic
+24%
+10% €103.1
€93.7
€142.3
€114.8
83%
4%
13%
90%
3%7%
7
Excluding GTS, VF & France
40
60
80
100
120
140
Total Revenue 2009
Total Revenue 2010
Adjusted EBITDA 2009
Adjusted EBITDA 2010
VFGTSFrancePT Organic
€98.3
€110.0
€77.5
€84.9
+11.9%
+9.6%
8
40
60
80
100
120
140
160
180
WHO Share of profit
Other
Bingo
Poker
Casino
€173.1
€137.3
€111.5
2008 2009 2010 9
40
60
80
100
120
140
160
180
2008 2009 2010
€111.5
€173.1
€137.3
Total Growth +26.1%
WH SOP +6%
Existing Licensees
+5.1%
France-5.8%
New Business & acquisitions
+20.8%
10
• The increase in diversification was enhanced with the addition of GTS and VF licensees
• As local regulated markets grow, this diversity will continue, eliminating smaller, less economic licensees
Increased diversity = Decreased risk
% of total revenues
2009 2010
Top 2 licensees 39% 33%
Top 5 licensees 57% 49%
Top 10 licensees 74% 64%
Top 15 licensees 84% 74%
Licensees > €4m revenue 7 8
Licensees > €1m revenue 22 2911
70.0 , 72%
Adjustable Operating Expenses Including Dep & Amor
Adjusted Expenses Excluding Dep & Amor
Operating Expenses 2010
27.0 , 28%
12
39.6 , 57%
7.8 , 11%
4.6 , 6%5.4 , 8%
12.6 , 18%
Employee Related Costs
Admin & Office Costs
Travelling, Exhibitions & Marketing Costs
Other Operational Costs
Revenue Driven Costs
Operating Expenses 2010 €70.0m = 100% (excl’ Dep&Amor)
13
39.6 , 56%
7.8 , 11%
4.6 , 6%5.4 , 8%
12.6 , 18%
Employee Related Costs
Admin & Office Costs
Traveling, Exhibitions & Marketing Costs
Other Operational Costs
Revenue Driven Costs
Revenue Driven Costs
2009 2010
Total Revenue 114.8 142.3
Revenue Driven Costs 4.1 12.6
% out of Revenue 3.6% 8.9%
As expected the Revenue Driven Costs increased due to
Virtue Fusion and GTS
The projection for FY 2011 is 9%- 10% out of the Revenues
14
39.6 , 69%
7.8 , 14%
4.6 , 8%5.4 , 9%
Employee Related Costs
Admin & Office Costs
Travelling, Exhibitions & Marketing Costs
Other Operational Costs
Operating Expenses 2010 €57.4m = 100% (excl’ Dep&Amor & Revenue driven costs)
15
39.6 , 69%
7.8 , 14%
4.6 , 8%5.6 , 9%
12.6 , 18%
Employee Related Costs
Admin & Office Costs
Travelling, Exhibitions & Marketing Costs
Other Operational Costs
Employee Related Costs
2009 2010Adjusted Operating Expenses w/o Revenue Driven Costs 39.5 57.4
Employee Related Costs 25.4 39.6% out of Adjusted Operating Expenses w/o Revenue Driven Costs 64.1% 68.9%
The increase in 2010 is due to VF and GTS acquisitions and employee expansion
The projection for FY 2011 is 69% to 71% out of Adjusted Operating Expenses w/o Revenue Driven Costs
16
39.6 , 69%
7.8 , 14%
4.6 , 8%5.4 , 9%
27.0 , 28%
Employee Related Costs
Admin & Office Costs
Travelling, Exhibitions & Marketing Costs
Other Operational Costs
Admin & Office Costs
2009 2010
Adjusted Operating Expenses w/o Revenue Driven Costs 39.5 57.4
Admin & Office Costs 5.7 7.8
% out of Adjusted Operating Expenses w/o Revenue Driven Costs 14.5% 13.6%
The projection for FY 2011 is 12.5% - 13.5% out of Adjusted Operating Expenses w/o Revenue Driven Costs
17
39.6 , 69%
7.8 , 14%
4.6 , 8%5.4 , 9%
27.0 , 28%
Employee Related Costs
Admin & Office Costs
Travelling, Exhibitions & Marketing Costs
Other Operational Costs
Travelling, Exhibitions & Marketing Costs
2009 2010Adjusted Operating Expenses w/o Revenue Driven Costs 39.5 57.4
Travelling, Exhibitions & Marketing Costs 4.4 4.6% out of Adjusted Operating Expenses w/o Revenue Driven Costs 11.2% 8.0%
The projection for FY 2011 is 7.5% - 8.5% out of Adjusted Operating Expenses w/o Revenue Driven Costs
18
39.6 , 69%
7.8 , 14%
4.6 , 8%5.4 , 9%
27.0 , 28%
Employee Related Costs
Admin & Office Costs
Traveling, Exhibitions & Marketing Costs
Other Operational Costs
2009 2010Adjusted Operating Expenses w/o Revenue Driven Costs 39.5 57.4
Other Operational Costs 4.0 5.4% out of Adjusted Operating Expenses w/o Revenue Driven Costs 10.0% 9.4%
The projection for FY 2011 is 9.5% - 10.5% out of Adjusted Operating Expenses w/o Revenue Driven Costs
Other Operational Costs
19
Cash used in financing activities – dividend paid in period– €45.6m
PTEC continues to be highly cash generative with very high conversation rate from adjusted EBITDA
Net cash provided from operating activities including cash received from WHO – €103.3m
Cash Used in investing activities:
• Sportech – €11.3m
• Virtue Fusion - €26.1m
(*) Full summary the balance sheet statement detailed in the appendices 20
(*) Full summary the balance sheet statement detailed in the appendix
Robust balance sheet
Cash balance of €68.5m at 31 December 2010
Main Assets & InvestmentsVF - €36.6mGTS - €20.4mTribeca - €23.9mInvestment in WH Online - €162.2mOther investments - €11.3m
Total Balance Sheet assets - €384.1m
21
• Over 70 new casino games, move to monthly roll-out
• 5 new branded titles/ 10 games• Made up 3 of 6 top slots by revenue in H2
• Keeps the portfolio fresh & players interested
• Enhanced Flash capability broadens access/ exposure on sites
• Complementary third-party content
• Cross-platform becoming additional USP
22
• Casino: open platform & third-party
• Bingo: international, branded, PT side games
• Poker: mobile apps and lobby enhancements
• Emerging: Sports betting product; Lottery games pack
• Responsible gaming tools; payment systems
• Cross-platform developments
• Mobile app launches
• Videobet: UK roll-out & new features
• Intelligent Gaming acquisition, moving onto casino floor
23
• Over 15 new licensees, 19 new products
• Major names reflect Playtech’s appeal amongst Tier 1s
• RAY, Betfair, Codere, Unibet
• Product infill strategy: Tain, bet365• Licensees >€1 m: two thirds have 2 or more
Playtech products
• Cross-platform gaining real traction:
• e.g. Buongiorno
24
• Scientific Games: • Sciplay gaining traction and profile
• Global Draw: Videobet roll-out over halfway
• Sportech: • Positioning for the US with SGR
• William Hill Online: • Strong operational performance in its 2nd year
• Cash dividend growth
• Partnerships offer flexibility and deeper penetration
25
• Dominant software provider in UK market: great shop window
• Roll-out now over 11,000 machines: over 300+ daily
• Expect to be substantially complete end Q2: 20,000 machines• Cash box constant
• Operators already looking for new features
0
2000
4000
6000
8000
10000
12000
# of Sites
# of Terminals
26
• Future opportunities• UK pub market
• Central & South America
• Europe: Nordic, Italy, Germany
Games – core expertise
Systems– core expertise
UK distributors
International manufacturers
TARGET
Videobet
• Financial metrics• Both daily fee/ revenue share models
• 2011 is breakeven year
• Full roll-out/ new markets drive margins
Market Positioning
27
signslaunchedVB roll-out over
halfwaylaunched launched
signs gaming terminals gets US approvals
for SGR
launched acquisition
28
• Like-for-like growth – over 8%
• Daily average revenues first nine weeks vs. 2010
• Excluding impact of France closure
• Excluding GTS & VF acquisitions
• Daily average vs. Q4/10: over 1.0% ahead
29
• 4 new regulated markets/regulated products• New markets: Estonia, Finland, France
• New product: Italian bingo Q2 10, casino expected H1 2011
• Playtech launched in all new segments
• Regulated market income• 46% of gross income(1)
• 40% from total revenues
• Expected to expand on the back of additional
regulated markets activity, e.g. Betfair, RAY,
Videobet UK deployment
• Lessons learned
(1) inc. estimated % from WHO
• Targeting operators in newly-regulating markets
• Partnering with well-established operators
• Proactively leveraging unique cross-platform capabilities
• Scale and breadth across all products and networks
• Strategic partnerships: global reach and leverage
• Maintaining flexibility & opportunism
31
• Asset deal, not exercise of 2006 call options • Businesses have changed since 2006, additional assets/relationships included in
regulated markets
• Capabilities and expertise focused on newly regulating markets
• Removes concerns over inherited liabilities
• Non-interest bearing deferred consideration
• Pre-packed assets into new holding company for simplicity
• Completion due end-June, integration by end-December 2011
32
• Strong and increasing demand for full turnkey solutions in regulated markets
• Positions Playtech for major opportunities in newly-regulated markets: tenders are already underway
• Turnkey solutions: e.g. Spain, Germany
• Software & certain ancillary services: US, Greece, Germany
• Licensees increasingly looking for broad range of packaged services• Looking for experienced help in highly competitive markets, with first-mover advantages
• Expands Playtech’s offering from single product through to full turnkey• Turnkey solution attractive to new entrants seeking single supplier
• Consolidates position as leading provider of gaming software and services
• Businesses have 10 years experience in B2B services based on Playtech software• Quality management team easily integrated into Playtech group
33
• 4 divisions providing range of important ancillary B2B services• Marketing
• Operations
• Payment Advisory
• Network Management
• 850+ staff, principally based in Bulgaria & Philippines
• All licensees use Playtech’s software
• Revenues: H2 2010 annualised run rate €81.4m
• EBITDA: Current run-rate €19.4m • Historic EBITDA margin of 20-23%
34
Division
(fee structure)
Revenues
€ millionServices Clients
H2 run rate
%
Marketing Services
(Revenue share)57.2 70
Affiliate management, media buying, search engine optimisation and market-leading CRM capabilities: VIP mgmt
5 licensees including Imperial, Snai, Mansion, Serbian Lottery
Operational Service
(Revenue share,Hosting – fixed price)
13.3 17Technology hosting, 24/7 multi-lingual customer and technical support, finance and fraud prevention
Over 60 clients, including WHO, Mansion, Imperial, Netplay and Onisac
Payment Advisory
(%age deposit)8.3 10 Payment advisory services
Clients, include Imperial, Partygaming, Mansion and WHO
Network Management
(Fixed fee)2.4 3
Online, interactive multiplayer poker environment , tournament & VIP mgmt
35 - all iPoker licensees,
35
• €140m minimum consideration
• Payments of €20-25m in 6 month intervals • No interest charge payable on outstanding balance:
• Implies NPV of less than €130m for initial consideration
• No PTEC financing requirement expected, out of free cash flow
• Total consideration capped at €280m, based on 7x FY2014 EBITDA• Similar tranche payment structure for any subsequent consideration
• Full consideration triggered under certain EBITDA performance conditions
• Base case projection implies final valuation likely to exceed maximum consideration
36
• Expected to be earnings enhancing immediately• C.13% plus enhancing 2012 and beyond – before adjustment(1) and synergies
• Group EBITDA margins expected to be c.50%
• No disruption to current earnings and cash flow profile
• Operational synergies identified and yet to be factored in
• Net assets of €61.6m – debt free and cash free
(1) Earnings pre amortisation of goodwill
37
2009 2010
€’000 €’000
Operating profit 56,449 45,309
Amortisation 6,406 13,674
Depreciation 2,372 3,416
EBITDA 65,227 62,399
Share of Profit of associates before amortisation of intangibles 22,534 30,792
Change in FV of available for sale investment (CYF, ALOG & SPO) 399 2,223
Professional expenses on acquisitions 360 1,802
Employee stock option expenses 5,150 5,855
Adjusted EBITDA 93,670 103,071
Adjusted EBITDA margin 82% 72%
Adjusted EBITDA margin (out of gross income) 68% 60%
38
2009 2010
€’000 €’000
Net profit 69,511 64,670
Amortisation of investment in WH Online 10,513 8,266
Change in FV of available for sale investment (CYF, ALOG & SPO) 399 2,223
Discounting of deferred consideration 418 736
Amortization on acquisitions 3,282 7,516
Employee stock option expenses 5,150 5,855
Professional expenses on acquisition 360 1,802
Exchange differences – on deferred consideration (232) 1,200
Previous year one off tax - 939
Adjusted net profit 89,401 93,207
Adjusted net profit margin 65% 54%
Adjusted net profit margin (out of gross income) 78% 66%
39
2009 2010
€’000 €’000
Net profit 69,511 64,670
Depreciation, Amortisation 8,778 17,090
Employees Stock Options Expenses 5,150 5,855
Change in FV of available for sale investments 399 2,223
Income from associate (22,534) (30,792)
Amortisation of intangibles in associate 10,513 8,266
Net change in Assets and Liability & other adjustments (1,130) 3,691
Net Cash Provided by Operating Activities 70,687 71,003
Dividend received from equity-accounted associates 18,528 32,269
Capex, intangibles & capitalised development costs (13,698) (15,080)
Acquisition of subsidiary net of cash acquired (11,310) (26,136)
Investment in held for sale investments - (11,332)
Proceeds from sale of available for sale investments - 2,665
Investment in partnership - (2,430)
Investments in joint venture - (490)
Other (969) (1,184)
Net Cash Used in Investing Activities (7,449) (21,718)
Net Cash Provided by (Used in) Financing Activities (36,096) (39,466)
Increase in Cash and Cash Equivalents 27,142 9,819
Cash and Cash Equivalents at Beginning of year 31,558 58,700
Cash and Cash Equivalents at End of year 58,700 68,519
As of As of
31 Dec 2009 31 Dec 2010
€’000 €’000
Cash and Cash Equivalents 58,700 68,519
Receivables 16,443 22,749
Investments (CYF, ALOG & Sportech) 5,513 10,932
Investment in WH and other equity associates 170,366 162,583
Intangible assets 65,459 100,384
Fixed Assets & other non current Assets 10,704 18,946
Total Assets 327,185 384,113
Deferred Revenue 18,186 15,113
Deferred consideration 13,554 15,001
Contingent consideration (VF & GTS) 6,983 16,533
Trade and other accounts payable 17,478 24,669
Progressive and other operators’ jackpot 1,068 12,847
Shareholders' Equity:
Share Capital and Funds 183,563 189,690
Available for sale reserve 1,025 -
Retained earnings 85,328 110,260
Total Liabilities and Shareholders’ Equity 327,185 384,113 41
• Depreciation
• In line with business growth, still immaterial
• Capex additional growth only on dedicated investments for regulated markets
• Amortisation
• Development costs (internally generated) – €4.7m
• Amortisation on acquisitions/investments:
• Tribeca - €3.2m
• WHO - €8.3m
• GTS - €1.4m
• Virtue Fusion - €3m
42
2009€’000
2010 €’000
Revenues 114,775 142,294
Adjusted operating expenses (excl’ Dep&Amor)
(43,639) (70,015)
Depreciation & Amortisation (5,496) (9,574)
Amortisation on acquisitions (3,282) (7,516)
Other adjustable operating expenses (5,909) (9,880)
Operating profit 56,449 45,309
Share of WHO profit 22,534 30,792
Amortisation of intangibles in WHO (10,513) (8,266)
Finance income (expenses), net 2,055 1,266
Adjustable finance and other costs (186) (1,936)
Share of loss in joint venture - (152)
Adjustable Previous year one off tax - (939)
Tax (828) (1,404)
Profit for the Period 69,511 64,670
(*) Breakdown of adjusted net profit and adjusted EBITDA items detailed in the appendix
SUMMARY OF INCOME STATEMENT:
PROFIT FOR THE YEAR
ADJUSTED PROFIT
ADJUSTED EBITDA
43
2009€’000
2010 €’000
Revenues 114,775 142,294
Adjusted operating expenses (excl’ Dep&Amor)
(43,639) (70,015)
Depreciation & Amortisation (5,496) (9,574)
Operating profit 65,640 62,705
Share of WHO profit 22,534 30,792
Finance income (expenses), net 2,055 1,266
Share of loss in joint venture - (152)
Tax (828) (1,404)
Adjusted Profit 89,401 93,207
(*) Breakdown of adjusted net profit and adjusted EBITDA items detailed in the appendix
SUMMARY OF INCOME STATEMENT:
PROFIT FOR THE YEAR
ADJUSTED PROFIT
ADJUSTED EBITDA
44
2009€’000
2010 €’000
Revenues 114,775 142,294
Adjusted operating expenses (excl’ Dep&Amor)
(43,639) (70,015)
Operating profit 71,136 72,279
Share of WHO profit 22,534 30,792
Adjusted EBITDA 93,670 103,071
(*) Breakdown of adjusted net profit and adjusted EBITDA items detailed in the appendix
SUMMARY OF INCOME STATEMENT:
PROFIT FOR THE YEAR
ADJUSTED PROFIT
ADJUSTED EBITDA
45