Playtech (PTECH) H1, 23 conf call of 9/7/23
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FANTINI’S GAMING REPORT
More Important Than Your Morning Coffee
September 7, 2023
Conference Call Summary
Company – PTEC – 1H, 2023
Ashley Diem – Publisher and Executive Editor
Nick Fortuna – Editor
Wolveridge Langan – Writer
FIRST-HALF HIGHLIGHTS:
Adjusted diluted earnings per share: 27.5 eurocents vs. 30.2 eurocents
Diluted earnings per share: 1 eurocent vs. 22.9 eurocents
Revenue: €859.6 million vs. €792.3 million
Adjusted EBITDA: €219.9 million vs. €199.9 million
By segment:
B2C: €532.1 million vs. €487.3 million
B2B: €334.5 million vs. €312 million
Diluted shares: 311.3 million vs. 312.2 million
Balance sheet: Net debt: €248.2 million vs. €275.2 million
AHEAD OF EXPECTATIONS
Playtech is on track to slightly exceed full-year EBITDA expectations following a 10 percent increase year over year in adjusted EBITDA for the first half to €220 million, CEO Mor Weizer said.
Additionally, Weizer reaffirmed medium-term EBITDA targets of €200 to €250 million for the B2B segment and €300 to €350 million for the B2C segment.
PTEC will put a greater focus on free-cash-flow generation, which improved across all segments in the first half, said CFO Chris McGinnis.
The company is confident in its ability to execute on growth opportunities in both B2B and B2C segments, McGinnis said.
PTEC’s diverse exposure to newly regulated markets will drive growth as online markets continue to expand, Weizer said.
• B2B. Revenue increased 7 percent, and adjusted EBITDA grew 5 percent year over year, McGinnis said.
All regions within regulated markets posted revenue growth on a constant-currency basis, McGinnis said.
McGinnis attributed a 2 percent decrease in revenue for the UK to regulatory uncertainty following white-paper recommendations, which is reflected in the market.
The agreements signed with Hard Rock Digital and galera.bet contributed to strong performance in the Americas, which gives PTEC confidence in the medium term, Weizer said.
Weizer expects Wplay in Colombia to continue increasing its contribution to the segment.
The company will keep investing in its Live division to drive revenue growth, which increased 24 percent in the first half, Weizer said.
PTEC expects to launch a third Live studio US location in Pennsylvania and a second studio in Lima, Peru, this year.
Weizer added that PTEC’s software-as-a-service segment is on track to hit its medium-term revenue target of €60 million to €80 million following revenue growth of more than 50 percent.
• B2C. Revenue grew 9 percent, with adjusted EBITDA increasing 14 percent, driven by strong performance from Snaitech, McGinnis said.
Snaitech will continue to leverage its Italian retail presence to drive online growth, Weizer said, with a revamped website expected to launch this year.
HAPPYBET saw a 4 percent decrease in first-half revenue, which masks the underlying improvement PTEC has seen in the business, McGinnis said.
PTEC closed multiple unprofitable retail HAPPYBET shops in Germany, which has increased revenue per shop by more than 10 percent despite decreases in gross retail revenue, McGinnis said.
The company is focused on optimizing HAPPYBET’s retail footprint and growing its online segment, Weizer said.
Increased marketing spend in Sun Bingo and other B2C at the end of last year contributed to 8 percent revenue growth for the first half, McGinnis said.
• Balance sheet. Adjusted operating cash flow and free cash flow both increased more than 5 percent, which will provide flexibility to fund both organic and inorganic growth opportunities, McGinnis said.
The proceeds from the €300 million bond issued in June were used to repay the remaining €200 million bond due in October and the investments into Hard Rock Digital, McGinnis said.
Net-debt-to-EBITDA is at 0.6 times, which provides flexibility to act on potential M&A opportunities, McGinnis said. PTEC has a net-debt-to-EBITDA target range of 1 to 2 times.
McGinnis expects capital expenditures for the full year to be between €150 million and €160 million.
PTEC has two senior secured notes currently outstanding: €350 million at a rate of 4.25 percent due in March 2026 and €300 million at 5.875 percent due in 2028.
Call replay: https://www.investis-live.com/playtech/64e31fc09b8a600d00eba947/melgkr.
Financial report: http://www.investors.playtech.com/~/media/Files/P/Playtech-IR/results-reports-webcasts/2023/2023-half-year-results-report.pdf.
Presentation: http://www.investors.playtech.com/results-centre/presentations/2023.aspx.
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Copyright : Fantini’s Gaming Report and Fantini Research are divisions of Eilers & Krejcik Gaming, LLC. All rights reserved. Our reports and content are protected by copyright and we reserve all rights except for as granted in this paragraph, and subject to the conditions stated below. We grant each subscriber and secondary recipient the right to receive, read, and utilize the reports and report contents for their individual use only. Your Subscriber Rights and Conditions give subscribers and secondary recipients the right to receive, read, and utilize the copyrighted reports and report contents for their individual use only. This right of individual use does not authorize providing whole or partial copies to others (even in your company) in any way, such as forwarding, posting, printing, file sharing, scanning, making photocopies, circulating, selling, publishing or otherwise. The right does not authorize any use by a person before he or she becomes a subscriber or secondary recipient. Any other right must be granted in writing by Eilers & Krejcik Gaming, LLC. You agree to inform paid subscribers and recipients of the conditions on their use, and you authorize us, in our discretion, to employ tracking services to check their compliance. Unauthorized copying or distribution violates copyright law and may carry serious consequences.
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For additional information, call +1 302 730 3793. Subscriptions can be ordered by phone, online at http://www.FantiniResearch.com.
T080823/ds
STAFF/CONTACT US:
Ashley Diem, publisher and executive editor. This email address is being protected from spambots. You need JavaScript enabled to view it.
Nick Fortuna, editor. This email address is being protected from spambots. You need JavaScript enabled to view it.
Dee Wild-Shyver, associate editor and VP of Fantini’s Gaming Show. This email address is being protected from spambots. You need JavaScript enabled to view it.
David Dittman, writer. This email address is being protected from spambots. You need JavaScript enabled to view it.
Wolveridge Langan, writer. This email address is being protected from spambots. You need JavaScript enabled to view it.
Cindy Konowitz, business manager. This email address is being protected from spambots. You need JavaScript enabled to view it.
Stephanie Creech, marketing manager. This email address is being protected from spambots. You need JavaScript enabled to view it.
Frank Fantini, publisher emeritus and consultant. This email address is being protected from spambots. You need JavaScript enabled to view it.
Subscription inquiries: This email address is being protected from spambots. You need JavaScript enabled to view it.
Analyst notes: This email address is being protected from spambots. You need JavaScript enabled to view it.
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Phone: +1 302 730 3793
More Important Than Your Morning Coffee
September 7, 2023
Conference Call Summary
Company – PTEC – 1H, 2023
Ashley Diem – Publisher and Executive Editor
Nick Fortuna – Editor
Wolveridge Langan – Writer
FIRST-HALF HIGHLIGHTS:
Adjusted diluted earnings per share: 27.5 eurocents vs. 30.2 eurocents
Diluted earnings per share: 1 eurocent vs. 22.9 eurocents
Revenue: €859.6 million vs. €792.3 million
Adjusted EBITDA: €219.9 million vs. €199.9 million
By segment:
B2C: €532.1 million vs. €487.3 million
B2B: €334.5 million vs. €312 million
Diluted shares: 311.3 million vs. 312.2 million
Balance sheet: Net debt: €248.2 million vs. €275.2 million
AHEAD OF EXPECTATIONS
Playtech is on track to slightly exceed full-year EBITDA expectations following a 10 percent increase year over year in adjusted EBITDA for the first half to €220 million, CEO Mor Weizer said.
Additionally, Weizer reaffirmed medium-term EBITDA targets of €200 to €250 million for the B2B segment and €300 to €350 million for the B2C segment.
PTEC will put a greater focus on free-cash-flow generation, which improved across all segments in the first half, said CFO Chris McGinnis.
The company is confident in its ability to execute on growth opportunities in both B2B and B2C segments, McGinnis said.
PTEC’s diverse exposure to newly regulated markets will drive growth as online markets continue to expand, Weizer said.
• B2B. Revenue increased 7 percent, and adjusted EBITDA grew 5 percent year over year, McGinnis said.
All regions within regulated markets posted revenue growth on a constant-currency basis, McGinnis said.
McGinnis attributed a 2 percent decrease in revenue for the UK to regulatory uncertainty following white-paper recommendations, which is reflected in the market.
The agreements signed with Hard Rock Digital and galera.bet contributed to strong performance in the Americas, which gives PTEC confidence in the medium term, Weizer said.
Weizer expects Wplay in Colombia to continue increasing its contribution to the segment.
The company will keep investing in its Live division to drive revenue growth, which increased 24 percent in the first half, Weizer said.
PTEC expects to launch a third Live studio US location in Pennsylvania and a second studio in Lima, Peru, this year.
Weizer added that PTEC’s software-as-a-service segment is on track to hit its medium-term revenue target of €60 million to €80 million following revenue growth of more than 50 percent.
• B2C. Revenue grew 9 percent, with adjusted EBITDA increasing 14 percent, driven by strong performance from Snaitech, McGinnis said.
Snaitech will continue to leverage its Italian retail presence to drive online growth, Weizer said, with a revamped website expected to launch this year.
HAPPYBET saw a 4 percent decrease in first-half revenue, which masks the underlying improvement PTEC has seen in the business, McGinnis said.
PTEC closed multiple unprofitable retail HAPPYBET shops in Germany, which has increased revenue per shop by more than 10 percent despite decreases in gross retail revenue, McGinnis said.
The company is focused on optimizing HAPPYBET’s retail footprint and growing its online segment, Weizer said.
Increased marketing spend in Sun Bingo and other B2C at the end of last year contributed to 8 percent revenue growth for the first half, McGinnis said.
• Balance sheet. Adjusted operating cash flow and free cash flow both increased more than 5 percent, which will provide flexibility to fund both organic and inorganic growth opportunities, McGinnis said.
The proceeds from the €300 million bond issued in June were used to repay the remaining €200 million bond due in October and the investments into Hard Rock Digital, McGinnis said.
Net-debt-to-EBITDA is at 0.6 times, which provides flexibility to act on potential M&A opportunities, McGinnis said. PTEC has a net-debt-to-EBITDA target range of 1 to 2 times.
McGinnis expects capital expenditures for the full year to be between €150 million and €160 million.
PTEC has two senior secured notes currently outstanding: €350 million at a rate of 4.25 percent due in March 2026 and €300 million at 5.875 percent due in 2028.
Call replay: https://www.investis-live.com/playtech/64e31fc09b8a600d00eba947/melgkr.
Financial report: http://www.investors.playtech.com/~/media/Files/P/Playtech-IR/results-reports-webcasts/2023/2023-half-year-results-report.pdf.
Presentation: http://www.investors.playtech.com/results-centre/presentations/2023.aspx.
SUBSCRIBER RIGHTS AND CONDITIONS:
Copyright : Fantini’s Gaming Report and Fantini Research are divisions of Eilers & Krejcik Gaming, LLC. All rights reserved. Our reports and content are protected by copyright and we reserve all rights except for as granted in this paragraph, and subject to the conditions stated below. We grant each subscriber and secondary recipient the right to receive, read, and utilize the reports and report contents for their individual use only. Your Subscriber Rights and Conditions give subscribers and secondary recipients the right to receive, read, and utilize the copyrighted reports and report contents for their individual use only. This right of individual use does not authorize providing whole or partial copies to others (even in your company) in any way, such as forwarding, posting, printing, file sharing, scanning, making photocopies, circulating, selling, publishing or otherwise. The right does not authorize any use by a person before he or she becomes a subscriber or secondary recipient. Any other right must be granted in writing by Eilers & Krejcik Gaming, LLC. You agree to inform paid subscribers and recipients of the conditions on their use, and you authorize us, in our discretion, to employ tracking services to check their compliance. Unauthorized copying or distribution violates copyright law and may carry serious consequences.
SUBSCRIPTIONS:
Subscriptions are available for $7,449 for the Elite Service Suite, $3,499 for Premium Service, $2,199 for Executive Level, and $1,199 for Basic. We also offer a Concierge package that includes individualized consulting services for $16,499. Subscriptions are limited to one primary subscriber who may, with permission, add a secondary recipient at the same company and URL at no additional charge, with Eilers & Krejcik Gaming, LLC first giving you written permission to do so. Affordable multi-user licenses are available and can be customized for any number of designated recipients. See Subscriber Rights and Conditions above.
For additional information, call +1 302 730 3793. Subscriptions can be ordered by phone, online at http://www.FantiniResearch.com.
T080823/ds
STAFF/CONTACT US:
Ashley Diem, publisher and executive editor. This email address is being protected from spambots. You need JavaScript enabled to view it.
Nick Fortuna, editor. This email address is being protected from spambots. You need JavaScript enabled to view it.
Dee Wild-Shyver, associate editor and VP of Fantini’s Gaming Show. This email address is being protected from spambots. You need JavaScript enabled to view it.
David Dittman, writer. This email address is being protected from spambots. You need JavaScript enabled to view it.
Wolveridge Langan, writer. This email address is being protected from spambots. You need JavaScript enabled to view it.
Cindy Konowitz, business manager. This email address is being protected from spambots. You need JavaScript enabled to view it.
Stephanie Creech, marketing manager. This email address is being protected from spambots. You need JavaScript enabled to view it.
Frank Fantini, publisher emeritus and consultant. This email address is being protected from spambots. You need JavaScript enabled to view it.
Subscription inquiries: This email address is being protected from spambots. You need JavaScript enabled to view it.
Analyst notes: This email address is being protected from spambots. You need JavaScript enabled to view it.
News releases: This email address is being protected from spambots. You need JavaScript enabled to view it.
Websites: www.FantiniResearch.com and www.FantinisGamingShow.com
LinkedIn: www.linkedin.com/company/Fantini-Research
Twitter: https://twitter.com/FantiniResearch
PPR Twitter: https://twitter.com/Fantini_PPR
Eilers & Krejcik Gaming, LLC
Fantini Research and Fantini’s Gaming Report
5 Corporate Park, Suite 110
Irvine, California, USA 92606
Phone: +1 302 730 3793