First Quarter 2021 Earnings Presentation - May 10, 2021 - Investor Relations
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First Quarter 2021 Earnings Presentation May 10, 2021
Driving Strong Results and Evolving SciPlay for the Future
Delivered Strong Growth in Revenue and AEBITDA(1)
• Increased revenue by 28% and AEBITDA(1) by 32%
• Grew sequentially, building on strong gains achieved in 2020
• Achieved above market growth(2)
Continued Momentum in Core Social Casino Business
• Broad based strength across the portfolio
• Delivered sequential growth in ARPDAU(3) and AMRPPU(4)
• Achieved payer conversion of 8.1%, 5th consecutive quarterly record
• Soft launched fully redesigned Quick Hit in April
Evolution of SciPlay with expansion into $20B+(5) casual game
genre
• Soft launched Solitaire Pets™ Adventure on April 19th
• Project X, the planned delivery of new casual game, is on-track
• Expanding game pipeline and diversifying revenues, enhancing long-
term growth and shareholder value
(1) Denotes a non-GAAP financial measure and is reconciled to the most directly comparable GAAP measure in the tables in the appendix, (2) Versus social casino market estimates published by Eilers
©2021 SciPlay Corporation. All Rights Reserved | 2
& Krejcik, (3) Average Revenue Per Daily Active User, (4) Average Monthly Revenue Per Paying User, (5) Estimate based on Eilers & Krejcik report EKG Taxonomy: Updated for 2021 and internal
company information.
Strong Quarterly Results Build on 2020 Gains
$ in millions
Revenue AEBITDA(1)
Key highlights
$151 $151 $46 $46
•
$147 $45 Grew revenue double-digits
fueled by strengthening social
$118 casino portfolio
$35
• Achieved strong AEBITDA(1)
growth while investing in
+28% +3% +32% +2% expanding game pipeline
• Delivered sequential growth in
both revenue and AEBITDA(1)
building off strong performance
in 2020
1Q20 1Q21 4Q20 1Q21 1Q20 1Q21 4Q20 1Q21
Sequential Sequential
Y/Y Growth Growth Y/Y Growth Growth
(1) Denotes a non-GAAP financial measure and is reconciled to the most directly comparable GAAP measure in the tables in the appendix. ©2021 SciPlay Corporation. All Rights Reserved | 3
Enhanced Monetization Through Payer Focus & Live
Ops Strategy
Payer Conversion
Rate (%) AMRPPU (1) ARPDAU (2)
Key highlights
$0.67 $0.67
$92.80 $92.80 • Continued to enhance
8.1% 8.1% $91.40 $0.63 monetization across all key
7.8% metrics through payer focus and
live-ops strategy
$83.58 • Achieved payer conversion of
6.3% $0.49 8.1%, 5th consecutive quarterly
record
29% 4% 11% 2% 37% 6% • Delivered sequential growth,
building off a strong 4Q
1Q20 1Q21 4Q20 1Q21 1Q20 1Q21 4Q20 1Q21 1Q20 1Q21 4Q20 1Q21
Sequential Sequential Sequential
Y/Y Growth Y/Y Growth Y/Y Growth
Growth Growth Growth
(1) Average Monthly Revenue Per Paying User, (2) Average Revenue Per Daily Active User. ©2021 SciPlay Corporation. All Rights Reserved | 4
Evolution of SciPlay
Expand game pipeline and
Project X, diversify revenues, organically
M&A and through targeted M&A
Expand Launching Solitaire Pets
into Adventure, expanding into
Casual $20B+(1) casual game genre
Core strengths operationalized,
SciPlay
enabling portability to multiple
Engine
games and genres
Organic Built core strengths in data,
Social product management, user
Casino acquisition and live ops
Games
(1) Estimate based on Eilers & Krejcik report EKG Taxonomy: Updated for 2021 and internal company information.
©2021 SciPlay Corporation. All Rights Reserved | 5
Case Study: Quick Hit ®
Support Fast-Paced Growth Through
Retention and Play
• Fully redesigned to:
• Capture the thrill and authenticity of
live casino
• Introduce immersive, integrated meta-
game for improved engagement loops
• Improved stability to game
performance
• Additional opportunities to implement our
advanced Live Ops strategy
• Task list to extend sessions and
increase spins
• Daily bonus to drive frequency of play
• Collectibles with multi-day events
©2021 SciPlay Corporation. All Rights Reserved | 6
Expanding In $20 Billion+(1) Casual Gaming Genre
Key Highlights
• Proven track record in Social Casino
provides confidence in casual game genre
• Solitaire Pets AdventureTM soft launched on
April 19th
• Promising initial KPIs
• Project X, development of new casual game
to be launched in 2H22, is on track
(1) Estimate based on Eilers & Krejcik report EKG Taxonomy: Updated for 2021 and internal company information. ©2021 SciPlay Corporation. All Rights Reserved | 7
Proven Engine Transitions Well to Casual Games
Live-Ops/Monetization
Driving increased player
engagement and monetization
through strategically keeping the
game fresh
Performance Marketing
Optimizing UA spend through data-
driven decision making
Product Management
Increasing a player’s value through
creating features that build on a simple
core mechanic in evergreen games
Data Analytics
Data driven decision making fuels
acquisition, monetization & retention
©2021 SciPlay Corporation. All Rights Reserved | 8
Financial Highlights
Continued Strong Execution Driving Double Digit Growth
$ in millions
Revenue AEBITDA(1)
Key highlights
$151 $151 $46 $46
$147 $45
•
$118 Increased revenue 28% Y/Y;
$35 strong flow through to
AEBITDA(1)
+28% +3% +32% +2% • Grew faster than the market(2)
while maintaining momentum off
a strong 4Q
• Achieved AEBITDA margin(1) of
30.4%, while investing to grow
the pipeline
1Q20 1Q21 4Q20 1Q21 1Q20 1Q21 4Q20 1Q21
Sequential Sequential
Y/Y Growth Growth Y/Y Growth Growth
(1) Denotes a non-GAAP financial measure and is reconciled to the most directly comparable GAAP measure in the tables in the appendix, (2) Versus social casino ©2021 SciPlay Corporation. All Rights Reserved | 10
market estimates published by Eilers & Krejcik.(1)
Free Cash Flow
$ in millions
Three months ended March 31,
2021 2020 B/(W)
(1)
AEBITDA $45.9 $34.8 31.9%
Key highlights
Cash Taxes (3.8) - nm
Capital Expenditures (2.1) (1.2) (75.0)% • Generated free cash flow(1) of $15.6M
in the quarter, a conversion(1) rate of
Distributions to Parent and affiliates, net (0.3) - nm 34.0%
Changes in Working Capital (28.0) (7.9) (254.4)% • Free cash flow(1) benefited from growth
in AEBITDA(1), but was offset by
Other 3.9 (3.4) nm changes in working capital
(1) • The timing of payments from platform
Free Cash Flow $ 15.6 $ 22.3 (30.0)%
providers was the primary driver of
FCF Conversion
(1), (2)
34.0% 64.1% (301) bps changes in working capital
nm = not meaningful
(1) Denotes a non-GAAP financial measure and is reconciled to the most directly comparable GAAP measure in the tables in the appendix, (2) FCF conversion is calculated as free
©2021 SciPlay Corporation. All Rights Reserved | 11
cash flow as a percentage of AEBITDA. Refer to slide 15 for reconciliation of free cash flow to net cash provided by operating activities and slide 14 for reconciliation of AEBITDA to net
income attributable to SciPlay.Appendix
Non-GAAP Financial Measures
The Company’s management uses the following non-GAAP financial measures in conjunction with GAAP financial measures: AEBITDA, AEBITDA margin, free cash flow and free
cash flow conversion (each, as described more fully below). These non-GAAP financial measures are presented as supplemental disclosures. They should not be considered in
isolation of, as a substitute for, or superior to, the financial information prepared in accordance with GAAP, and should be read in conjunction with the Company’s financial
statements filed with the SEC. The non-GAAP financial measures used by the Company may differ from similarly titled measures presented by other companies.
Adjusted EBITDA, or AEBITDA, as used herein, is a non-GAAP financial measure that is presented as supplemental disclosure and is reconciled to net income attributable to
SciPlay as the most directly comparable GAAP measure as set forth in the above table. We define AEBITDA to include net income attributable to SciPlay before: (1) net income
attributable to noncontrolling interest; (2) interest expense; (3) income tax expense; (4) depreciation and amortization; (5) restructuring and other, which includes charges or
expenses attributable to: (a) employee severance; (b) management changes; (c) restructuring and integration; (d) M&A and other, which includes: (i) M&A transaction costs;
(ii) purchase accounting adjustments; (iii) unusual items (including certain legal settlements) and (iv) other non-cash items; (e) contingent acquisition consideration and
(f) cost-savings initiatives; (6) stock-based compensation; (7) loss (gain) on debt financing transactions; and (8) other expense (income) including foreign currency (gains) and
losses. We also use AEBITDA margin, a non-GAAP measure, which we calculate as AEBITDA as a percentage of revenue.
Our management uses AEBITDA and AEBITDA margin to, among other things: (i) monitor and evaluate the performance of our business operations; (ii) facilitate our
management’s internal comparisons of our historical operating performance and (iii) analyze and evaluate financial and strategic planning decisions regarding future
operating investments and operating budgets. In addition, our management uses AEBITDA and AEBITDA margin to facilitate management’s external comparisons of our results
to the historical operating performance of other companies that may have different capital structures and debt levels. Our management believes that AEBITDA and AEBITDA
margin are useful as they provide investors with information regarding our financial condition and operating performance that is an integral part of our management’s
reporting and planning processes. In particular, our management believes that AEBITDA is helpful because this non-GAAP financial measure eliminates the effects of
restructuring, transaction, integration or other items that management believes have less bearing on our ongoing underlying operating performance. Management believes
AEBITDA margin is useful as it provides investors with information regarding the underlying operating performance and margin generated by our business operations.
Free cash flow, as used herein, represents net cash provided by operating activities less Capital Expenditures, Payments on License Obligation and Distributions to Scientific
Games and Affiliates, Net. Free cash flow is a non-GAAP financial measure that is presented as a supplemental disclosure for illustrative purposes only and is reconciled to net
cash provided by operating activities, the most directly comparable GAAP measure, in a schedule herein.
Free cash flow conversion, as used herein, represents the ratio by which AEBITDA (as defined on this page) is converted into Free Cash Flow (as defined above). Free cash flow
conversion is a non-GAAP financial measure that is presented as a supplemental disclosure for illustrative purposes only and is reconciled to net cash flow conversion, the most
directly comparable GAAP measure, in a schedule herein.
Management believes that free cash flow and free cash flow conversion provide useful information regarding the Company’s liquidity and its ability to service debt and fund
investments. Management also believes that free cash flow and free cash flow conversion are useful for investors because they provide them with an important perspective on
the cash available for debt repayment and other strategic measures, after making necessary capital investments in property and equipment and necessary license payments
to support the Company’s ongoing business operations.
©2021 SciPlay Corporation. All Rights Reserved | 13GAAP to Non-GAAP Reconciliation
Three months ended
Twelve months ended December 31,
March 31, December 31, March 31, December 31,
($ in millions) 2021 2020 2020 2019 2020 2019 2018 2017
Net income attributable to SciPlay $5.3 $4.4 $4.4 $4.4 $20.9 $32.4 $39.0 $23.1
Net income attributable to noncontrolling interest 32.6 26.6 26.7 24.2 125.1 61.1 - -
Net income 37.9 31.0 31.1 28.6 146.0 93.5 39.0 23.1
Contingent acquisition consideration - - - - - - 27.5 -
Restructuring and other 0.3 0.3 0.5 0.3 2.0 2.7 1.0 0.3
Depreciation and amortization 3.4 2.8 2.0 1.8 9.7 7.0 15.1 17.0
Income tax expense 2.1 2.5 1.6 1.5 8.4 8.7 10.4 22.1
Stock-based compensation 1.8 6.9 0.1 0.8 22.0 8.9 4.0 4.3
Other expense (income), net 0.4 1.5 (0.5) (0.9) 0.6 1.5 (3.0) 2.6
AEBITDA $45.9 $45.0 $34.8 $32.1 $188.7 $122.3 $94.0 $69.4
% AEBITDA margin 30.4% 30.6% 29.4% 28.4% 32.4% 26.3% 22.6% 19.2%
Net income $37.9 $31.0 $31.1 $28.6 $146.0 $93.5 $39.0 $23.1
% Net income margin 25.1% 21.1% 26.3% 25.3% 25.1% 20.1% 9.4% 6.4%
Revenue $151.1 $147.1 $118.3 $112.9 $582.2 $465.8 $416.2 $361.4
©2021 SciPlay Corporation. All Rights Reserved | 14GAAP to Non-GAAP Reconciliation
Three months ended
March 31,
($ in millions) 2021 2020
Net cash provided by operating activities $19.6 $23.5
Less : Capital expenditure (2.1) (1.2)
Less : Payments on license obligation (1.6) -
Less : Distributions to Scientific Games and affiliates, net (0.3) -
Free Cash Flow $15.6 $22.3
AEBITDA $45.9 $34.8
FCF Conversion 34.0% 64.1%
©2021 SciPlay Corporation. All Rights Reserved | 15GAAP to Non-GAAP Reconciliation
Three months ended
March 31,
($ in millions) 2021 2020
Free Cash Flow(1) $15.6 $22.3
AEBITDA(2) $45.9 $34.8
(3)
Free Cash Flow Conversion 34.0% 64.1%
(1) Refer to slide 15 for reconciliation of free cash flows to net cash provided by operating activities, (2) refer to slide 14 for reconciliation of AEBITDA to net income. (3) Free Cash Flow ©2021 SciPlay Corporation. All Rights Reserved | 16
conversion, as used herein, represents the ratio by which consolidated AEBITDA is converted into Free Cash FlowForward-Looking Statements; Additional Notes
Throughout this presentation, we make “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe
future expectations, plans, results or strategies and can often be identified by the use of terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect,”
“anticipate,” “target,” “should,” “could,” “potential,” “opportunity,” “goal,” or similar terminology. These statements contained in this presentation are based upon management’s
current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking
statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors,
including, among other things: the impact of the COVID-19 pandemic and any resulting social, political, economic and financial complications; our ability to attract and retain players;
expectations of growth in total consumer spending on social gaming, including social casino gaming; our reliance on third-party platforms; our ability to continue to launch and
enhance games that attract and retain a significant number of paying players; our reliance on a small percentage of our players for nearly all of our revenue; our ability to adapt to,
and offer games that keep pace with, changing technology and evolving industry standards; competition; our dependence on the optional purchases of coins, chips and cards to
supplement the availability of periodically offered free coins, chips and cards; restrictions and covenants in debt agreements, including those that could result in acceleration of the
maturity of our indebtedness; the discontinuation or replacement of LIBOR, which may adversely affect interest rates; fluctuations in our results due to seasonality and other factors;
dependence on skilled employees with creative and technical backgrounds; our ability to use the intellectual property rights of our parent, Scientific Games Corporation, and other
third parties, including the third-party intellectual property rights licensed to Scientific Games Corporation, under our intellectual property license agreement with our parent; protection
of our proprietary information and intellectual property, inability to license third-party intellectual property and the intellectual property rights of others; security and integrity of our
games and systems; security breaches, cyber-attacks or other privacy or data security incidents, challenges or disruptions; reliance on or failures in information technology and other
systems; the impact of legal and regulatory restrictions on our business, including significant opposition in some jurisdictions to interactive social gaming, including social casino gaming,
and how such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern interactive social gaming or social casino gaming specifically,
and how this could result in a prohibition on interactive social gaming or social casino gaming altogether, restrict our ability to advertise our games, or substantially increase our costs to
comply with these regulations; laws and government regulations, both foreign and domestic, including those relating to our parent, Scientific Games Corporation, and to data privacy
and security, including with respect to the collection, storage, use, transmission, sharing and protection of personal information and other consumer data, and those laws and
regulations that affect companies conducting business on the internet, including ours; the continuing evolution of the scope of data privacy and security regulations, and our belief that
the adoption of increasingly restrictive regulations in this area is likely within the U.S. and other jurisdictions; risks related to foreign operations, including the complexity of foreign laws,
regulations and markets; the uncertainty of enforcement of remedies in foreign jurisdictions; the effect of currency exchange rate fluctuations; the impact of foreign labor laws and
disputes; the ability to attract and retain key personnel in foreign jurisdictions; the economic, tax and regulatory policies of local governments; compliance with applicable anti-money
laundering, anti-bribery and anti-corruption laws; influence of certain stockholders, including decisions that may conflict with the interests of other stockholders; our ability to achieve
some or all of the anticipated benefits of being a standalone public company; our dependence on distributions from SciPlay Parent Company, LLC to pay our taxes and expenses,
including substantial payments we will be required to make under the Tax Receivable Agreement; failure to establish and maintain adequate internal control over financial reporting;
stock price volatility; litigation and other liabilities relating to our business, including litigation and liabilities relating to consumer protection, gambling-related matters, employee matters,
alleged service and system malfunctions, alleged intellectual property infringement and claims relating to our contracts, licenses and strategic investments; our ability to complete
acquisitions and integrate businesses successfully; our ability to pursue and execute new business initiatives; natural events and health crises that disrupt our operations or those of our
providers or suppliers; changes in tax laws or tax rulings, or the examination of our tax positions; our dependence on certain key providers; and U.S. and international economic and
industry conditions.
Additional information regarding risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated in forward-looking statements is
included from time to time in our filings with the SEC, including under “Risk Factors” in Part II, Item 1A of our forthcoming Quarterly Report on Form 10-Q for the quarter ended March 31,
2021 and Part I, Item 1A “Risk Factors” in our 2020 Annual Report on Form 10-K filed with the SEC on March 1, 2021. Forward-looking statements speak only as of the date they are made
and, except for our ongoing obligations under the U.S. federal securities laws, we undertake no and expressly disclaim any obligation to publicly update any forward-looking statements
whether as a result of new information, future events or otherwise.
©2021 SciPlay Corporation. All Rights Reserved | 17Forward-Looking Statements; Additional Notes
This presentation may contain references to industry market data and certain industry forecasts. Industry market data and industry forecasts are obtained from publicly
available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be
reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not independently
verified by us and we do not make any representation as to the accuracy of that information. In general, we believe there is less publicly available information concerning
international social gaming industries than the same industries in the U.S. Some data is also based on our good faith estimates, which are derived from our review of internal
surveys or data, as well as the independent sources referenced above. Assumptions and estimates of our and our industry's future performance are necessarily subject to a
high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” in Part II, Item 1A of our forthcoming Quarterly Report on Form 10-Q
for the quarter ended March 31, 2021 and "Risk Factors" in Part I, Item 1A of our 2020 Annual Report on Form 10-K. These and other factors could cause future performance to
differ materially from our assumptions and estimates.
©2021 SciPlay Corporation. All Rights Reserved | 18Legal
The MONOPOLY name and logo, the distinctive design of the game board, the four corner squares, the MR. MONOPOLY name and character, as well as each of the
distinctive elements of the board, cards, and the playing pieces are trademarks of Hasbro for its property trading game and game equipment and are used with
permission. © 2021 Hasbro. All Rights Reserved. Licensed by Hasbro.
The content under license from Scientific Games, including the look and feel of some individual games and their components and displays are trade dress of Scientific
Games Corp, and its Subsidiaries. Certain titles and content TM and © 2021 Scientific Games Corp and its Subsidiaries. All Rights Reserved.
The overall appearance, look and feel and components of our social casino games, as well as non-licensed intellectual property, including some individual games and
their components and displays that appear within the core social casino games are trade dress of SciPlay Corporation. Certain titles and content TM and © 2021 SciPlay
Corporation. All Rights Reserved.
©2021 SciPlay Corporation. All Rights Reserved | 19You can also read
