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NEWS 22 August 2019

Exclusive: Playtech CEO defends net profit drop and updates on US plans

By Nathan Joyes

Gambling Insider caught up with Playtech CEO Mor Weizer following the announcement of the supplier's H1 results. Revenue increased 69% to €736.1m ($817.4m) in H1 2019, in part explained by the success of its Snaitech acquisition.

How pleased are you with the 69% revenue increase and how do you see this in comparison with your competitors?

Of course, I am very pleased. I think we outperformed a lot of our competitors, definitely the B2B providers, I believe, which has been great for Playtech.

What accounts for Playtech’s 85% fall in reported net profit?

It is important to indicate that this is purely due to an accounting one-off during the period and it is not reflective of the overall performance, including increasing the appreciation and taxing relating to the acquisition of Snaitech. If you look at the operating side of the business, you will see we have had a good first half with adjusted EBITDA up 31% and it is important to say we are one of only a few companies that grew their EBITDA in H1, given the headwinds from the UK and other markets.

All in all, while net profit is less, due to accounting purposes, I think the adjusted EBITDA is what we should focus on and what our shareholders usually focus on, which is as stated, up 31%.

You’ve reported an 11% year-on-year growth in regulated markets outside of the UK. Why has this been able to improve?

We are very active and diversified. Most of the operators using many other B2B competitors of Playtech are very much focused on a very limited number of countries. Playtech is a very different company. It is a company which is always proud of its geographical diversity and we are presenting a total of 18 countries shortly where online gaming is under penetration, in which Playtech has market access deals in 16 of them. We have signed up with a Dutch monopoly at the beginning of the year, we have signed up with a Swiss casino and we have extended our reach in Mexico and Colombia, to name just a few. We are very much heading in the right direction and will focus on extending our reach further.

You acquired Sun Bingo in 2018, which has seen revenue growth of 20%. Can you explain the success there?

As part of the negotiations with News UK, we structured and organised the business to grow, to make it a more lean and mean organisation. We contributed some of our best employees that were involved with the success of William Hill Online and now they are the people behind this particular operation. We saw a positive increase as a result, in what is a highly competitive and stable market which for us, which is very encouraging.

The last time you spoke to Gambling Insider, Playtech remained a little uncertain about its progress into the US. What can you tell Gambling Insider about the developments you have made in H1?

We are continuing to make progress in what is a newly regulated market. We have completed our testing in New Jersey, which is the second phase of three for us, and we have now started the application process in Mississippi.

Our office in New York is also now up and running. Taking a step back however, the US opportunity presents only one important part of our pipeline of future growth prospects, and there are many others further along the line in terms of development which will continue to provide significant opportunities for us, including Latin America.

The US is slowly growing and over the coming quarter, we will act decisively and we will look to further establish ourselves over there.

What are Playtech’s ambitions for H2 2019?

For me, it is to continue to focus on gambling core B2C, continue to grow our B2B segment by executing against the plan and delivering the best technology that exists across the industry. Another goal is to roll out GVC to other countries and sign up more customers and we will also look to acquire more brands in the second half of the year, even more so in terms of a number of licenses. Overall in 2019, we will sign 20 brands altogether, continue to grow Snaitech and we will provide additional quarterly disclosure, starting in Q3.

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