Mor Weizer exclusive: "Playtech is determined to maintain its position"


ow would you summarise Playtech’s results for 2016? What is your reaction to them?

The main take away from these results is that we have successfully executed against our strategy. We have delivered strong operational and financial performance, as well as in M&A.

The key messages are the operational delivery, the new customers that we have signed up - we extended contracts with nine of Playtech’s top ten customers - and we also improved the quality of our product. In terms of financial delivery we see further significant growth in both revenue and profit. We have increased regulated revenues and delivered record cash generation.

Then you have M&A – we have been very acquisitive throughout 2016, completing a number of important acquisitions, some of which we believe over time will be transformational for the company.

Last but not least is shareholder returns. We moved earlier this year to progressive ordinary dividends, and we distributed €150m in special dividends and bought back some stock at the level of €50m.

Altogether I think the strong performance of Playtech and our strategy to extend our reach with new customers and supporting organic growth with our existing ones has led to significant growth, that we expect to continue in 2017 and beyond.

Your casino offering is referenced as going from “strength to strength”. Why do you think the division has done so well in 2016?

I think that it is a combination of the quality of our customers, the quality of our product and the importance of the platform. The key strength of operators offering casino games through the Playtech platform is the platform’s capabilities and ability to monitor through one set of tools, Playtech’s IMS.

Playtech is very diverse, operating in many jurisdictions. Retail businesses going online afford us an opportunity to deploy our omnichannel solution.

While it is worth remembering that our casino figures are contributed to by other areas of the business, including bingo and poker, we have every reason to believe that casino will continue to go from strength to strength.

What factors account for the growth of Playtech’s land-based division?

It is a combination of successful initiatives in our retail division and extending our partnerships with existing FOBT or VLT customers, as well as the acquisitions of BGT and ECM. Going forward, retail will be broken down and accounted for under the specific vertical of operations, meaning BGT will come under sports and ECM under bingo, but still we believe that we will see a lot of growth coming from these companies and subsidiaries within the group.

Playtech has made a number of acquisitions through 2016. Can we expect more activity from Playtech on that front this year?

As we have indicated, M&A is an integral and inherent part of our overall strategy, so the answer is yes.

What is your take on the performance of your financials division, which finds itself at an “inflection point?”

We see encouraging KPI’s, as indicated in the results. We had to go through a major change within the business in order to fully comply with the higher regulatory standards that now exist, but we welcome regulation. We believe that this is the right thing for the industry, and accordingly, while we had to change and this obviously had an impact on our business from a financial perspective we see that as an opportunity for Playtech.

What are the main opportunities for Playtech in 2017 with regards to organic growth?

We still see a lot of growth coming from our existing customers, and we are certainly taking note of important markets being regulated, both throughout Europe and elsewhere. When you combine the size and quality of Playtech’s existing customers with the fact that more markets are being regulated, Playtech is the natural choice for operators in newly regulated markets given our proven track record in every commercially viable regulated market. Playtech is uniquely positioned given our omnichannel capabilities. I don’t think there are any other companies that are able to provide what Playtech provides today, and all of this will support further growth going forward.

Could you expand on your aims for the business in 2017 and beyond?

From a product and operational perspective, it is to continue focusing on the quality of our product. We just launched major releases for some of our products, including live casino and our casino platform, and in sport as well. Sport will receive a great deal of focus in 2017 – we believe there is a window of opportunity for us there.

There is no other company like Playtech in the space today, that can offer a true omnichannel solution, which we believe is a necessity for a lot of the operators in regulated markets, looking for ways to grow their business. With the ability to digitise retail and launch an online gaming arm alongside it, our experience shows that this has the potential to lead to significant growth.

We will also expect to establish ourselves in newly regulated markets with local partners, and in some of those, enter into structured agreements that expose Playtech to additional parts of the value chain beyond just software, extending into other areas of the business including marketing and CRM.

You mentioned the company’s live casino offering, with Playtech having just opened the world’s largest live casino studio in Riga. Was this surge in demand anticipated, and what makes live casino such an important part of the business?

It is an important part of our business and we believe that going forward live casino will go from strength to strength. This is evidenced by the number of customers we have here, and the fact that unlike before, improving technology and the quality of modern mobile networks lend themselves to a far better experience for customers, and eventually we believe that those games that are offered through our live casino product will be the most dominant of the entire games portfolio of Playtech. I don’t see any reason why people would transact and play using graphical engines when they can experience the real thing, and have very good video streaming and chat. It brings the experience one step closer to reality. Playtech is determined to maintain its leading position and further establish itself in the live casino vertical.

Are there any regulatory changes that you are expecting or hoping to see in the coming year?

I will say that this is heading in the right direction and a lot of very important markets are being regulated – examples including Portugal, the Netherlands, Poland, Colombia, and Brazil has indicated that it will consider regulating. This is obviously a huge opportunity for Playtech. Regulation is part of our DNA, making us far more diversified when compared to other companies.

Obviously in some other markets regulation is being looked at, including in the UK, but our exposure to that is limited and as with PoC, we do expect to continue growing our relationships. As I indicated earlier, we welcome regulation because we believe that it is the right thing for the industry.

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