Playtech : 2021 Half year results report

Playtech plc

("Playtech", or the "Company", or the "Group")

Results for the six months ended 30 June 2021

Strong online performance

Significant progress on strategic priorities

Playtech (LSE: PTEC) today announces its results for the six months ended 30 June 2021, together with a trading update for July and August 2021.

Financial summary1

Numbers in the table below are from continuing operations (excluding Finalto and Casual & Social Gaming)

	H1 2021	H1 2020	Change	Change
			(reported)	(const.
				currency)4
Revenue	€457.4m	€476.7m	-4%	-4%
Adjusted EBITDA2	€124.1m	€109.5m	13%	14%
Adjusted post-tax profit3	€54.6m	€3.5m	1460%	1029%
Reported post-tax profit/(loss)3	€401.9m	-€22.1m	n/a	n/a
Adjusted diluted EPS	17.4 €c	1.1 €c	1482%	1005%
Reported diluted EPS	128.0 €c	-7.4 €c	n/a	n/a

Summary

• H1 results in line with expectations at the start of the year with online strength offsetting the impact of the longer than expected retail closures in Italy
• Very strong performance from B2B online, particularly Caliente, as well as Snaitech's online business
• Americas now the Group's biggest growth driver with revenue growth of 106% at constant currency vs. H1 2020
• Valuation of the Group's options embedded in Latin America agreements (Caliente, Wplay and others) results in significant unrealised gain of €299.9 million:
  o fair value adjustment has material impact on reported post-tax profit and reported diluted EPS in H1
  o option valuations highlight progress being made and value creation in the region
• Continued progress on US strategy; launched with Parx in Michigan; new strategic partnerships with Scientific Games and Novomatic; additional licence applications underway
• Brian Mattingley joined as Chairman on 1 June 2021; Linda Marston-Weston appointed Non-Executive Director with effect from 1 October 2021; Ian Penrose to be Senior Independent Director
• H1 performance, together with the momentum within the business, underpins the Board's confidence of the
  Company's prospects for the remainder of 2021 and beyond

Divisional highlights

B2B Gambling

• Very strong online performance more than offset the impact of lockdowns and drove B2B revenue growth of 16% to €267.2 million (H1 2020: €229.7 million)
• Continued expansion in the US and Latin America; revenue from the Americas increased to €46.4 million (H1 2020: €22.9 million); growth of 106% at constant currency
• Launched with Parx Casino in Michigan; new partnerships with Scientific Games and Novomatic alongside continued progress with bet365 and BetMGM in New Jersey

• Caliente in Mexico saw significant growth alongside a growing contribution from Wplay in Colombia, with new launches in Costa Rica and Panama to build on presence in Latin America
• Material gains of €299.9 million in the fair value of Playtech's derivative financial assets driven by the options relating to Caliente and Wplay and others in Latin America
• New strategic agreement signed with Holland Casino in Europe
• Continued diversification of B2B business with over 50 further brands added to SaaS offering in H1; 128% revenue growth versus H1 2020; now over 250 new brands added since launch in 2019
• Very strong growth in Live Casino; significant operational momentum with new signings and product launches

B2C Gambling

• Snaitech Adjusted EBITDA was €51.6 million (H1 2020: €47.1 million) despite retail closures across the majority of H1; leading retail and online sports betting brand in Italy in H1
• Snaitech's online business saw excellent revenue growth of 95% to €123.4 million and Adjusted EBITDA growth of 118% to €72.6 million
• In July 2021, Snaitech agreed the sale of surplus land for €20 million; €1 million was received on signing with the remainder expected to be received in instalments in 2022 following certain regulatory approvals
• White label (including Sun Bingo) saw 59% growth in Adjusted EBITDA to €5.4 million (H1 2020: €3.4 million)

Finalto

• The Group remains in discussions with Gopher regarding potential sale of Finalto; Finalto has been presented in these results as a discontinued operation

Current trading and outlook

• Strong start to H2 in July and August
• B2B and B2C online businesses expected to continue to deliver strong performances
• The macroeconomic outlook remains uncertain given the ongoing pandemic with the possibility of further unexpected lockdowns in the future
• Given the strong H1 performance and the momentum within the business into H2 combined with the easing of lockdown restrictions, the Board is confident of the Company's prospects for the remainder of 2021 and beyond
• Continuing commitment to returning capital to shareholders whilst balancing the needs of the business and taking a prudent approach to capital structure and leverage

Mor Weizer, CEO, commented:

"I am delighted by our strong strategic and operational progress to date in 2021, despite the ongoing challenges posed by the pandemic. These results demonstrate the quality of our technology and products, the significant progress made against our strategic priorities, and wider momentum across Playtech's operations.

"Significant progress in the US saw Playtech launch for the first time in Michigan, the first step in our long-termmulti-state partnership with Parx Casino, and regulatory approvals progressed in key strategic states. Structured agreements continue to deliver in Latin America, with strong growth in H1 in Mexico and Colombia and launches in Panama and Costa Rica. In Europe, we signed a major new software and services agreement with Holland Casino and saw continued growth across a number of existing licensees.

"Snaitech continued to outperform in Italy, cementing its position as the number one retail and online sports betting brand in Italy. The pandemic has structurally grown the higher margin online business and we expect this growth to continue.

"Looking forward, given the strong H1 performance, the momentum in the business and the easing of lockdown restrictions, we are confident of Playtech's prospects for the remainder of 2021 and beyond.

"We have established a new Sustainability and Public Policy Board Committee to consolidate our position as a

leader in safer gambling products and strengthen governance around sustainability. Sustainable Success is embedded in our core strategy."

- Ends -

For further information contact:

Playtech plc

Mor Weizer, Chief Executive Officer Andrew Smith, Chief Financial Officer c/o Headland

Chris McGinnis, Director of Investor Relations and Strategic Analysis James Newman, Director of Corporate Affairs

Headland (PR adviser to Playtech)

Lucy Legh, Stephen Malthouse, Jack Gault

[phone]

[phone]

[phone]

1H1 2020 numbers are restated to reflect the discontinued Finalto business for the purposes of comparison. Totals in tables throughout this statement may not exactly equal the components of the total due to rounding.

2Adjusted numbers relate to certain non-cash and one-off items. The Board of Directors believes that the adjusted results represent more closely the consistent trading performance of the business. A full reconciliation between the actual and adjusted results is provided in Note 9 of the interim financial statements.

3Adjusted Profit refers to post-tax Profit from continuing operations attributable to the owners of the Company after the relevant adjustments as detailed above. Reported Profit refers to post-tax Profit from continuing operations attributable to the owners of the Company before adjustments.

4Constant currency numbers exclude the exchange rate impact on the results by using previous period relevant exchange rate and exclude the total cost/income of exchange rate differences recognised in the period.

Conference call and presentation

A presentation will be held today at 9.00 am via a live audio webcast accessible using this link:

https://www.investis-live.com/playtech/613f74e26fca31130036c85b/ypww

Analysts and investors can also dial into the call using the following details:

United Kingdom: 0800 640 6441

USA: 1 855 9796 654

USA (Local): 1 646 664 1960

All other locations: [phone]

Access code: 917384

There will also be a replay available after the live conference call at:

UK: 020 3936 3001

USA (Local): 1 845 709 8569

All other locations: [phone]

Access Code: 205967

The presentation slides will be available today from 8.30 am at: http://www.investors.playtech.com/results- centre/presentations/2021.aspx

Forward looking statements

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". By their nature, forward-looking statements involve risk and uncertainty since they relate to future events and circumstances. Actual results may, and often do, differ materially from any forward-looking statements.

Any forward-looking statements in this announcement reflect Playtech's view with respect to future events as at the date of this announcement. Save as required by law or by the Listing Rules of the UK Listing Authority, Playtech undertakes no obligation to publicly revise any forward-looking statements in this announcement following any change in its expectations or to reflect events or circumstances after the date of this announcement.

About Playtech

Founded in 1999 and premium listed on the Main Market of the London Stock Exchange, Playtech is a technology leader in the gambling and financial trading industries with over 7,000 employees across 24 countries.

Playtech is the gambling industry's leading technology company delivering business intelligence driven gambling software, services, content and platform technology across the industry's most popular product verticals, including, casino, live casino, sports betting, virtual sports, bingo and poker. It is the pioneer of omni- channel gambling technology through its integrated platform technology, Playtech ONE. Playtech ONE delivers data driven marketing expertise, single wallet functionality, CRM and responsible gambling solutions across one single platform across product verticals and across retail and online.

Playtech partners with and invests in the leading brands in regulated and newly regulated markets to deliver its data driven gambling technology across the retail and online value chain. Playtech provides its technology on a B2B basis to the industry's leading retail and online operators, land-based casino groups and government sponsored entities such as lotteries. Playtech directly owns and operates Snaitech, the leading sports betting and gaming company in online and retail in Italy.

Playtech also owns Finalto, a technology leader in the CFD and financial trading industry that operates both on a B2B and B2C basis. Finalto has been classified as a discontinued operation since 31 December 2020 and remained so as at 30 June 2021.

Chief Executive Officer's Review

Overview

Playtech made excellent progress on its strategic priorities in the first half of the year, leaving the Group well- positioned to capture the exciting market opportunity ahead.

Playtech continued to accelerate its US presence. The US is a highly strategic market for Playtech and creates a significant long-term opportunity across its full product suite. Since launching in New Jersey with bet365 and BetMGM in 2020, Playtech announced strategic agreements with the Greenwood companies in H1 2021 to license its products in four US states and has already launched the Play Gun Lake App with Parx Casino in Michigan. During the period, Playtech signed strategic partnerships with Scientific Games and Novomatic Americas. Playtech has started the licensing process in additional US states and will continue to increase its investment in the US market, to take advantage of a strong pipeline of opportunities with potential new customers and existing customers from other markets.

Playtech continued to strengthen its market leadership in Latin America. In Mexico, Caliente continued to grow impressively and in Colombia, Wplay outperformed expectations. The Group launched in Costa Rica and Panama in H1. Playtech also signed a strategic agreement in Brazil ahead of expected regulation. The Company is progressing on plans to develop a new Live Casino facility in Peru as it continues to expand its addressable market across Latin America. During H1, the Group recognised a significant unrealised gain in relation to fair value of the Group's options in Latin America. The gain relates to holdings in Caliente, Wplay and others and highlights the value of the Group's strategic agreements in Latin America.

In order to continue growing and diversifying its B2B Gambling division, the Group continued to add customers, including attracting new customers in both regulated and soon to be regulated markets, progressing discussions on new strategic agreements and joint ventures, as well as adding over 50 new brands to its SaaS offering. Playtech has now added over 250 new brands since launching the SaaS offering back in 2019.

While impacted by retail closures for most of the first half, Snaitech continued to outperform in online with revenue growth of 95% compared to H1 2020, which helped it to achieve the number one market share position by brand in the Italian sports betting market (retail and online combined measured by GGR) in H1 2021.

As the leading technology company in the gambling industry, Playtech recognises that licensees look to the Group to deliver innovation that changes the way players experience gambling entertainment. Following its launch in 2020, Playtech continued to execute its Sustainable Success strategy in H1 2021, the highlights of which are detailed below and include the establishment of a Sustainability and Public Policy Committee to provide Board-level oversight on key non-financial strategy, commitments, targets, and reporting matters.

The Group's simplification strategy is also progressing. The last remaining Casual Gaming assets were disposed of in early 2021 and the sale process of the Finalto business is ongoing. Once this process is completed, Playtech will be a simpler business, focused on the attractive markets of B2B Gambling and B2C Gambling.

B2B Gambling

Core B2B Gambling

Regulated markets

The strategic focus of Playtech's B2B Gambling business continues to be on opportunities in regulated or soon to be regulated markets, with a focus on high-growth markets such as the US, Latin America and certain parts of Europe.