Kambi Group plc

Good morning, everyone, and welcome to Canby's Q2 2022 report presentation. My name is Mia Nordlander. I am Senior Vice President, Investor Relations, and today I have our CEO, Christian Nyland, and CFO, David Kenyon, with me. They will present the quarter for you, and thereafter, we will have time for questions. So if you have any questions, I suggest that you either call in or that you write them in the web here on the page. So over to you, Christian. Please present the quarter for us.

Thank you, Mia. And good morning. So today I'm planning to go through the highlights first and then hand over to David to run through all the numbers. And then I come back and talk more about the Q2 in detail. So, the highlights. I would say we had a very robust financial performance against very demanding 2021 comparatives. A tough comp. I think, first of all, last year it was a European Championship and... Normally we would have expected a World Cup this year but that is moved to December so the sporting calendar is quite slow this summer. We also don't have the same kind of revenues from Netherlands since Our operators pre-regulation, nearly re-regulation in Netherlands is still not operating. Of course, we have, as I will talk about later, Kindred coming back into the market early in Q3. And the largest factor, of course, is that all numbers were still including draftings last year. So our operator turnover this year is up 16% if we exclude the DraftKings number. During the quarter, we also achieved a key milestone with the first phase completed of separating our pricing from a core platform in what we call the trading gateway, which I will talk more about later. We strengthened our partner network by extending our relationship with Bat Parks. We have a longer contract and we also signed Mohegan Gaming in Ontario. And finally, we expanded in America, our America's reach with day one launches in Canada or Ontario with four partners and then one more later on. We also have done quite a few launches in other countries, mainly in US and Mexico. With that, over to you, David.

Thanks, Christian. Good morning, everyone. So overall, this quarter, we saw a very strong financial performance. We continue to be profitable. We see underlying operator turnover growth, and we have a powerful balance sheet. As Christian mentioned, we saw 16% growth in that operator turnover, excluding DraftKings. And that's despite the impact of the Netherlands regulation and the Euro soccer tournament last Q2. So very strong numbers there. And that strong turnover, allied with a margin of 8.6%, led to revenue of 34.7 million. Costs pre-FX of 32 million were in the forecast range, and they were offset to the tune of just over 2 million on foreign exchange gains relating to the revaluation of our US dollar assets. This gave an operating profit of 4.9 million at a margin of 14.1%. And our net cash position of 74.2 million gives us five power to continue using our balance sheet to drive our strategic growth. The next slide here is the Canby turnover index. It's an aggregation of the entire Canby network's results quarter by quarter. The blue columns are an aggregation of the operator turnover index, originally set at 100 when we span off the business. And the orange line is an aggregation of the operator trading margin every quarter. This quarter, the margin was 8.6%. And when we look at the comparatives, that was pretty high this time last year at 9.3%. The operating turnover on the index is 6.56. As Christian mentioned, it's a very quiet Q2. It's typically quiet from a sporting calendar perspective for many of our key sports. But of course, this year there will be a World Cup taking place in Q4 and a condensed football calendar before and after that World Cup. So, you know, some strong months ahead. In more detail then on the operator turnover versus last year. So the turnover went from 9.11 on that index to 6.56. Firstly, there were some big headwinds we should talk about. Firstly, and by far the biggest in terms of financial impact, was the DraftKings migration, which we saw after Q2 last year. DraftKings accounted for 20-30% of our revenue Q2 last year. In the Netherlands, of course, there was no activity with Kindred here in Q2 this year, but we are delighted to see them obtain their license and launch in early July. And Euro 2020 was delayed to 2021, and the majority of the matches took place in Q2 last year. And again, we are very much looking forward to the World Cup taking place in Q4 this year. Those headwinds have been offset, though. There have been some growth factors here. We have new operators since this time last year. They include BetCity, JVH and Rawa. We've moved into new markets, including Arizona, Connecticut, Louisiana, and most recently, Ontario. And we've seen growth from some of our existing operators, both in their organic growth, but also in their geographical expansion into new markets. This then feeds into the waterfall of the Canby revenue conversion. which sets out how our operator turnover movement resulted in our revenue movement versus last year. So at constant exchange rates, operator turnover was down 32% on Q2 2021 for the reasons I've outlined. Due to the dollar being stronger than last year versus the euro, this decrease was reduced to 28%. The operator trading margin of 8.6% compares to the very high 9.3% last year. And there in the other column, you see a big positive impact on our revenues. There's quite a few drivers behind this one. Firstly, and most importantly, our customer contracts often include tiers which charge significantly less on the upper bands of activity. So the lack of DraftKings and other factors impacting the NGR results in a relatively higher effective revenue share across the network overall. Secondly, we have more live event income this quarter and other fixed revenues which are not driven by the levels of operator turnover. We also have revenues from our settlement with Mohegan Sun, which is a fixed revenue each quarter. And we have revenues from the ABOS business which we acquired at the end of last year. The net effect of all these factors is a 19% decrease in our revenue in total to £34.7 million. Lastly, I'm going to talk about the cash flow. There's a few particular points to note this quarter. Firstly, the capex is slightly higher than we usually see. We've had some fit-out costs in a couple of our offices. The tax impact you see on the right-hand side there is higher than normal. So we're due a tax refund as part of our year-end tax position, and that's expected to be received in Q3. But that magnifies the effect of the tax outflows here in Q2. And in terms of inflows, we received 2.6 million in relation to the option price on share options settled earlier in the year. The net effect to all these various cash flows is an increase in our cash position to 81.6 million. With that, I hand you back to Christian.