Half year results 6 months ended 31 January 2012 Analyst presentation 29 February 2012

Half year results 6 months ended 31 January 2012

Analyst presentation

29 February 2012

• Highlights

• Financial review

• Operational review

• Regulatory update

• Summary and outlook

29/02/2012

• Australian Centrebet acquisition completed August 2011. Integration progressing well

• Acquisition of Danish online betting operators January 2012

• Disposal of Turkish business November 2011

• In the first half amounts wagered up 18.4%

• Strong growth in Australia

• EBITDA down from £25.8m to £25.2m impacted by £7.9m of new tax and disposal of Turkey

• In:play at an industry leading margin of 10.1%

• Cost reductions in response to European tax and economic conditions

3

Highlights

Sportingbet Plc – Half year results for the period ended 31 January 201229/02/2012

Financial review

29/02/2012

4

Sportingbet Plc – Half year results for the period ended 31 January 20124

H1 2012

£m

H1 2011

£m

Amounts wagered 1,266.2 1,069.2

Total revenue 110.9 107.9

Costs (93.5) (88.3)

Operating profit* 17.4 19.6

Share option charge (0.3) (0.5)

Amortisation (0.9) (0.9)

Exceptional items (24.0) -

Turkey profit from disposal 2.6 -

Net finance (cost) / income (2.0) 1.4

Tax (3.1) 1.7

Profit for the period (10.3) 17.9

Fully diluted EPS* 2.2p 3.7p

Income Statement

* Before share option charge, exceptional items and amortisation of other intangible assets

Financial review

29/02/2012

5

5

£m

£m

H1 2010/11 19.6

Turkey disposal (9.7)

Spanish and Greek taxes (7.9)

Centrebet acquisition 4.7

Centrebet synergies 2.7

Australia trading 5.1

European trading (5.3)

Cost reductions 5.6

Share of Turkey 2.6

H1 2011/12 17.4


Operating profit reconciliation

Financial review

29/02/2012

6

6

Balance sheet

* Includes client liabilities of £30.2m (2010/11 : £21.1m)

31 January 2012

£m

31 January 2011

£m

Non-current assets Goodwill 153.2 41.6

Tangible and intangible assets 53.6 54.2

Working capital Trade and other receivables 29.9 16.0

Cash and cash equivalents 63.2 54.4

Derivative asset 0.5 -

Other payables* (88.5) (51.0)

LiabilitiesInterest bearing loans and borrowings

(53.7) (11.6)

Derivative liability - (0.1)

158.2 103.5

Equity Share capital / share premium 60.8 60.5

Retained earnings 91.4 43.0

158.2 103.5


Financial review

29/02/2012

7

. 7

H1 cash flow £m £m

Gross cash as at 1 August 2011 180.2

EBITDA 25.2

Working capital (7.9)

17.3

Acquisitions / Centrebet (99.6)

Capex (10.8)

Tax (1.9)

DOJ payment (7.5)

Dividend (7.3)

Convertible loan interest (2.3)

Exceptional cost (4.9)

Net cashflow (117.0)

Gross cash as at 31 January 2012 63.2

Finance leases (2.7)

Bank loan (4.0)

Customer liabilities (30.2)

(12.2)GST claim

Net cash as at 31 January 2012 14.1Sportingbet Plc – Half year results for the period ended 31 January 2012

Underlying strategy remains unchanged

• Focus on sport

• Industry leading breadth of product offering

• Something to bet on every minute of every hour of

every day

• Achieve consistently above average margin whilst

maintaining price competitiveness

• Supported by

• Comprehensive supplemental revenue streams of poker, casino and games

• Tailored offer branded for local markets

• Goal of moving to a fully regulated offer

8

8

Operational review


29/02/2012

9


Operational review

Geographical diversification spreads regulatory and economic risk

Australia NGR up 127% due to strong growth in online / acquisition of Centrebet

Greece amounts wagered down 22% due to economic issues NGR down 41% with poker and casino particularly hard hit

Spain amounts wagered down 11% and NGR down 28%

Emerging markets NGR up 23%

Aus39.9 (17.19%)

Turkey12.1% (23.6%)

Greece8.7% (15%)

Spain9.4% (13.4)

UK3.4% (4.5%)

Germany4.4% (4.5%)

Emerging Markets

4.8% (3.9%)

Poland3.2%

(3.4%)

Group geographical breakdown (post-tax gaming revenue)

10

Highlights

Casino & games 19%

(2010: 21%)

Sports 75%

(2010: 71%)

Poker5.9%

(2010: 7.6%)

Soccer 37%

Aus horseracing 40%

Mixed sportmultiples

2.7%

Basketball2.7%

Tennis 2.9%

Horse racing0.6%

Other 14%

Sports betting continues to drive the business with sports NGR up 9%

Casino/games NGR down 8% as affected by economic conditions in key markets

Poker NGR down 34%

Group product breakdown


11


5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Q108/09

Q208/09

Q308/09

Q408/09

Q109/10

Q209/10

Q309/10

Q409/10

Q110/11

Q210/11

Q310/11

Q410/11

Q111/12

Q211/12

In:Play Pre-Match

Europe - sportsH1 2012 H1 2011 +/-

Sports actives 287,009 319,213 -10%

Average bet size £12.21 £15.11 -19%

Bets per customer 139 132 +5%

Yield per sports actives

£148 £197 -25%

Operational review

(GGR before betting taxes)

Q2 impacted by disposal of Turkey, recession and lower margin than last year

29/02/2012

29/02/2012

Operational review

Source: Gambling Data In-Play Tracker Winter 2012; Sample data captured snapshots between Sat 26 th – Fri 9th Dec 2011

Number of In:play Events vs. Avg. Markets Per Event

Sportingbet provides customers with a strong balance between the breadth of event coverage and a variety of markets to bet on in an individual event

0

5

10

15

20

25

30

35

40

45

50

55

250 300 350 400

Avg

. Mar

kets

per

Eve

nt

Number of Events

William Hill

Unibet

Sportingbet

Paddy Power

Ladbrokes

Bwin


New in:play

• First phase now live in the UK

• Other major domains live in March

• Better showcases huge variety of betting opportunities

• Greater customer personalisation improves engagement

• Not built in Flash technology, allowing enhancements to be viewed on tablets and desktop devices

• In-house development rather than third-party buy

29/02/2012 Sportingbet Plc – Half year results for the period ended 31 January 2012

New in:play

29/02/2012 Sportingbet Plc – Half year results for the period ended 31 January 2012

In:play tutorial

29/02/2012

16


Australia (Sportingbet) (pre-tax gaming revenues)H1

2012H1

2011 +/-

Internet bets 16.3m 12.8m +27%

Telephone bets 0.6m 0.8m -13

Sports actives 70,930 71,103 -

Amounts wagered on the internet up 33% at constant currency

Amounts wagered on the telephone down 10% at constant currency

Significant brand exposure in Australian market through offline marketing

Operational review

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Q4 07/08

Q1 08/09

Q2 08/09

Q3 08/09

Q4 08/09

Q1 09/10

Q2 09/10

Q3 09/10

Q4 09/10

Q1 10/11

Q2 10/11

Q3 10/11

Q4 10/11

Q1 11/12

Q2 11/12

Phone (£'m) Internet (£'m) Mobile (£'m)

29/02/2012

17


Australia (Total) (pre-tax gaming revenues)H1

2012H1

2011 +/-

Internet bets 21.7m 12.8m +70%

Telephone bets 0.8m 0.8m +7%

Sports actives 146,518 71,103 +106%

Operational review

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Q4 07/08

Q1 08/09

Q2 08/09

Q3 08/09

Q4 08/09

Q1 09/10

Q2 09/10

Q3 09/10

Q4 09/10

Q1 10/11

Q2 10/11

Q3 10/11

Q4 10/11

Q1 11/12

Q2 11/12

Phone (£'m) Internet (£'m) Mobile (£'m) Centrebet

29/02/2012

• Acquisition of Centrebet completed 31 August 2011

• Senior management team appointed and operational (Sept ‘11)

• IT Platform decided upon (Sept ‘11)

• All operations (except IT platform) fully integrated (Jan ‘12)

• Combined business in new single Sydney office (May ‘12)

• Single IT platform (May/June ‘12)

• Integration complete (July ‘12)

• Integration ahead of plan at this stage

• No material issues

18


Australia

29/02/2012

Mobile: % of turnover

29/02/2012

19

19

Sep ‘11 Jan ‘12

Sportingbet Australia 13% 20%

Centrebet 5% 13%

UK 11% 15%

Spain 9% 13%


• We welcome regulated markets

• Continuity of future revenue

• Consumer protection

• Growth in overall size of market

• Stable payment processing

• Group will apply for a licence where

• Market is economically viable

• Regulatory environment is stable

• Equitable tax system

• Severe penalties for non-compliance

For Internal purposes only. This is confidential information and is property of Sportingbet Plc. 20

Regulatory update

29/02/2012

• Greece

• Opted into tax regime

• Spain

• Applied for license

• Denmark

• Awarded license

• Italy

• Awarded license

21

Sportingbet Plc – Half year results for the period ended 31 January 2012 21

Current regulation

29/02/2012

• Long-term growth prospects of industry are good

• Demographics

• Broadband penetration

• Confidence in transacting

• Sport’s ever increasing global popularity

• Geographic expansion continuing

• Mobile route to market promising

• Move to regulation promising and beneficial in the long term

• Solid start to Q3

22


Summary and outlook

29/02/2012

Q&A

Analyst presentation

29 February 2012

24

Sportingbet Plc – Half year results for the period ended 31 January 2012 24

Appendix

29/02/2012

25

. Sportingbet Plc – Half year results for the period ended 31 January 201225

Net gaming revenue

H1 2012 H1 2011 % change

£m £m

Europe

Sports (8.7% vs 9.9%) 42.5 62.9 -32%

Casino & games 22.5 24.7 -9%

Poker 7.1 9.0 -21%

72.1 96.6 -25%

Australia

Sports (63.5% vs 5.2%) 47.8 21.1 +127%

Gaming revenues (post gaming taxes) 119.9 117.7 +2%

Customer bonus adjustment (10.5) (10.9) +4%

Net gaming revenue 109.4 106.8 +2%

29/02/2012

26

. Sportingbet Plc – Half year results for the period ended 31 January 201226

Australia KPI’s

2012 2011 +/-

Sports actives 146,518 71,103 +106%

Internet (incorporating Mobile results)

Sports bets 21.7m 12.8m +70%

Sports bets / active 116 193 -40%

Sports bet size A$37 A$26 +43%

Sports margin (post tax) % 7.6% 7.1% +7%

Telephone

Sports bets 0.8m 0.8m +7%

Sports bets / active 39 57 -32%

Sports bet size A$455 A$453 +1%

Sports margin (post tax) % 3.1% 3.2% -4%

29/02/2012

27


Europe KPI’s

H1 2011 H1 2011 +/-

Sports actives 287,009 319,213 -10%

Sports bets 40.0m 42.2m -5%

Sports bets / active 139 132 +5%

Sports bet size £12.21 £15.11 -19%

Sports margin % 8.7% 9.9% -12%

Yield per sports active £148.08 £197.25 -25%

Casino and games bets 314.4m 316.7m -1%

Casino and games bet size £2.43 £2.39 +2%

Casino margin % 2.9% 3.3% -10%

Poker – average daily rake £38.7k £48.7k -20%

29/02/2012

Financial review

29/02/2012

28

28

Costs


H1 2012

£m

% of margin H1 2011

£m

% of margin

Marketing

• reported 32.9 27.1 32.2 27.1

• customer bonuses 10.5 8.6 10.9 9.2

43.4 35.7 43.1 36.3

Payment processing costs 10.6 8.7 12.6 10.6

Product commissions 10.2 8.4 9.9 8.3

Employees 24.2 19.9 18.4 15.5

Depreciation 7.8 6.4 6.2 5.2

Other admin 7.8 6.4 9.0 7.6

104.0 85.7 99.2 83.5

Operating profit margin 17.4 14.3 19.6 16.5


Financial review

29/02/2012

29

29

£m £m

H1 2011 operating profit 19.6

Europe sports • Volume (15.5)

• Margin (10.4% vs 9.9%) 2.7 (12.8)

Australia sports • Volume 28.7

• Margin (7.7% vs 6.5%) 3.6 32.3

• Betting taxes (12.9) (12.9)

Casino and gaming effect -

Poker effect (1.9)

Increase in costs* (4.6)

H1 2012 operating profit 17.4

Operating profit reconciliation



30 . 30

Disclaimer

These slides and this presentation are provided to you for information only. These slides and this presentation do not constitute, or form part of, any invitation or offer to

any person to subscribe for, otherwise acquire, or dispose of any shares in Sportingbet Plc (the “Company”). These slides and this presentation do not constitute a

recommendation regarding the shares of the Company. Recipients of these slides and this presentation should conduct their own investigation, evaluation and analysis

of the business, data and property described therein.

Certain statements within this presentation constitute forward looking statements. Such forward looking statements are subject to risks and other factors, which may not

be in the Company’s control, which may cause the actual events, results, achievements or performance expressed or implied by such forward looking statements to

differ.

Such risks and other factors include, but are not limited to, general economic and business conditions, changes in governmental laws and regulations or practices,

currency fluctuations, competition, changes in plans and other risks. There can be no assurance that the results and events contemplated by the forward looking

statements contained in this presentation will, in fact, occur and no representation is made in this respect. These forward-looking statements represent honestly held

views of the Company only as at the date of delivery of this presentation. The Company is not under any obligation to release publicly any revisions to these forward

looking statements to reflect events, circumstances and unanticipated events occurring after the date of this presentation except as required by law or by regulatory

authority (including pursuant to the UK Listing Rules and the Disclosure Rules and Transparency Rules of the Financial Services Authority).

No statement in this presentation in intended as a profit forecast or a profit estimate and no statement in this presentation should be interpreted to mean that earnings

per share for the current or future financial years will match or exceed historical earnings per share.

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29/02/2012 Sportingbet Plc – Half year results for the period ended 31 January 2012. 31

The End

Documents

Half year results 6 months ended 31 January 2012 Analyst presentation 29 February 2012