Henrik Tjärnström CEO Q4 2018 13 February 2019 1 Outline Highlights Financial results Business overview Summary 2
3 Q4 2018 Key Report Highlights Gross winnings revenue GWR from mobile EBITDA Earnings per share Active customers GBP 250.1m (+5%) GBP 185.8m (+11%) GBP 58.5m (-21%) GBP 0.173 (-22%) 1,568,574 (+18%) 4
FY 2018 Key Report Highlights Gross winnings revenue GWR from mobile EBITDA Earnings per share Active customers GBP 907.6m (+21%) GBP 662.7m (+23%) GBP 202.8m (+12%) GBP 0.580 (+12%) 3,114,886 (+9%) 5 Kindred s share of the European online market EURbn 40 35 30 25 20 15 10 5 0 Market share 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e 2019e 2020e Source: H2GC Dec 2018 2.3% CAGR 2011-2018 Online 12.2% Kindred 25.6% 5.2% 6
Financial results 7 Q4 2018 Strong levels of activity and all-time high in active customers resulted in all-time high for Gross winnings revenue 8
Gross winnings revenue GBPm 907.6 751.4 250.1 238.0 544.1 230.7 152.8 354.1 193.6 312.0 268.0 111.4 142.3 219.0 226.7 78.0 166.6 80.4 86.1 126.6 77.1 80.5 207.8 76.5 76.1 122.4 153.2 2012 2013 2014 2015 2016 2017 2018 Q4 Q3 Q2 Q1 9 Geographic growth Key Report Highlights Q4 2018 vs Q4 2017 GWR as reported in GBP Organic GWR in constant currency Nordics -5% -3% Western Europe +13% +13% 10
Gross winnings revenue from mobile GBPm +11% 200 180 160 140 120 100 80 60 40 20 0 Q1 2013 Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 11 Q4 2018 P&L FX impact v Q4 2017 Avg rate Q4 2017 Q4 2018 Movement SEK 11.043 11.637-5.4% NOK 10.837 10.865-0.3% EUR 1.127 5.4 1.127 0.0% DKK 8.389 8.413-0.3% AUD 1.727 1.794-3.9% Weighted average movement in FX rates: approx. -1% GBPm Gross winnings revenue -2.0 Cost of sales / Opex 0.3 FX gain on operating items 0.6 EBITDA FX impact Q4 2018-1.1 FX loss on loan repayment -0.7 Other items below EBITDA 0.1 Profit before tax impact Q4 2018-1.7 12
EBITDA Excl 2014 Kambi one-off item GBPm 180.3 202.8 58.5 73.8 120.7 55.5 38.9 75.5 77.0 46.6 63.4 41.5 52.5 18.4 26.2 33.1 21.7 17.4 30.5 21.1 14.0 19.0 47.3 21.3 27.6 29.4 14.4 2012 2013 2014 2015 2016 2017 2018 Q4 Q3 Q2 Q1 13 A scalable business model 30% 25% Underlying EBITDA margin % (trailing 12m) 20% 15% 10% 5% 0% Betting duties % of GWR (trailing 12m) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017 2018 14
showing our ability to absorb betting duties GBPm 80 70 60 50 40 30 20 10 Betting duties Underlying EBITDA 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017 2018 15 Other Costs analysis Excl. Non-recurring items GBPm 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2018 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 Share of GWR (as reported) 9% 8% 8% 9% 8% 8% 16
EPS development Excl 2014 one-off items GBP 0.60 0.55 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 0.580 0.516 0.173 0.366 0.223 0.163 0.129 0.244 0.084 0.091 0.131 0.112 0.057 0.059 0.090 0.059 0.131 0.087 0.044 0.072 2012 2013 2014 2015 2016 2017 2018 Q4 Q3 Q2 Q1 17 IFRS 16, Leases new standard from 1 January 2019 replaces IAS 17 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. 2019 effects for Kindred Income Statement (approx. amounts) GBPm Adjusted EBITDA +10.3 Depreciation and amortisation -10.2 Finance costs -1.2 Profit before tax -1.1 Cash Flow Statement (approx. amounts) GBPm Operating cash flow +11.3 Investing cash flow -1.2 Financing cash flow -10.1 Net cash impact 0.0 18
2018 Free Cash Flow GBPm Strong cash flow generated from operations 169.2 0.8 5.0 Working capital impacted by movements in customers balance, prepayments and marketing & tax accruals 11.0 150.1 4.0 Additional capex for long term investments in technology and new offices Free Cash Flow Cash generated 2017 from operations 19 Proposed cash dividend 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 GBP 0.496 (0.551) per share/sdr equivalent to SEK 5.92 20 75% of FCF Income taxes Capital Expenditures Items affecting Free Cash Flow comparability 2018
Business overview 21 Active customers Thousands 1,600 ATHATH 1,400 1,200 1,000 800 600 400 200 0 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 2011 2012 2013 2014 2015 2016 2017 2018 22
Sports betting gross margin Combined 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Before free bets After free bets 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 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR Q1 Q2 Q3 Q4 YR 2011 2012 2013 2014 2015 2016 2017 2018 23 Product & geographic balance Gross winnings revenue over time By product, % By geography, % Other 4 4 3 3 2 2 3 2 2 Other 2 2 2 2 3 2 3 2 2 Casino & Games 49 51 51 51 45 50 47 48 46 Western Europe 46 46 50 52 55 55 56 56 59 Poker Live betting 2 2 2 2 23 20 23 23 2 21 2 2 2 2 23 22 26 22 CES 8 7 7 6 7 7 7 8 7 Pre-game betting 22 23 21 21 30 23 26 22 28 Nordics 44 45 41 40 35 36 34 34 32 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2018 2016 2017 2018 24
US update Live in Strategic partnership with Mohegan Sun Pocono in Pennsylvania New Jersey Early March 2019 Live by end of 2019 25 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 26
Swedish market from 1 Jan 2019 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 27 28
Summary Q4 2018 GWR +6% in constant currencies SB margin after FB EBITDA 9.4% -21% EPS Active customers GWR from mobile -22% +18% +11% 29 Contact Investor Relations Inga Lundberg +44 788 799 6116 ir@kindredgroup.com Calendar 24 April 2019 Q1 will be published at 7.30 CET 24 July 2019 Q2 will be published at 7.30 CET 25 October 2019 Q3 will be published at 7.30 CET 30
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