Kambi Group plc

Good morning, everyone, and welcome to Canby's Q4 presentation. My name is Mattias Fridtjof. I am SVP Sustainability and Investor Relations. I'm here today with our CEO, Werner Becher, and CFO, David Kenyon. We will start with the presentation and then we will have time for your questions. If you wish to ask a question, please press pound key five on your telephone or you can write them to me in the chat. So the agenda for today, we will start with some highlights with Werner, and then David will speak about the financials and the outlook for next year. Then Werner will come back and speak about some commercial and strategic updates, as well as the summary. Following that, we will have time for the Q&A. With that, I hand over to Werner.

Thank you, Mattias, and good morning. In recent months, we have been continuing to build strong foundations for the future. We delivered a robust financial performance in Q4 in the face of various headwinds. Revenue of 44.5 million euros was supported by another quarter of strong operator trading margin. So today we increase our expected long-term trading margin. It was great to see the Brazilian market go live at the start of the year, and we are live, with a number of partners, including recent signings, Stake and KTO. Early in Q4, we signed an OZFIT Plus deal with HardRock Digital in the US, along with Ray do Pitaco in Brazil. And finally, just a couple of days ago, we entered an innovation agreement with Ontario Lottery and Gaming Corporation and FTJ Group, which pending some conditions, will see us take over the long-term contract from FTJ Group, presenting an exciting opportunity for us. Meanwhile, we continue to address our cost base by realizing further synergies and implementing efficiency measures in all areas of our business. 2024 was certainly an eventful year at Camby, during which we were able to lay the foundations for future success, which I'd like to summarize on this slide. There has been some change within leadership, At the AGM, Anders Ström was confirmed as chair, while Christian Nielen took up a seat on the board, having early indicated he would step down from his position as CEO. As the two co-founders of Camby and with huge knowledge of the industry, it's great to have their continued involvement in the business. We were also grateful to have industry veteran Benji Czerniak join the board. His experience in the sports betting space over many years has been invaluable. And of course, I succeeded Christian late July, and I too made a few appointments as I looked to build a team capable to taking Camby to the next level. In September, we unveiled our new product portfolio, an important step on Camby's journey to becoming the home of premium sports betting solutions. The Turnkey Sportsbook is our flagship product and one which gives all our modeler solutions a clear edge over the competition. The new models are already opening doors to operators that had been close to us as a pure turnkey supplier. While they will also play a strategic role in helping us retain relationships with operators who decide to move away from the turnkey, RayDubitaco being a recent example of it. As ever, we made some key new turnkey sportsbook signings with the likes of KTO and Stake in Brazil, along with US Tribe Shock Tarnation. We signed some important partnership extensions, as those with Rush Street Interactive and Pan Entertainment. In recent days, we also announced an extension with Bad City, part of Entain Group. And we signed various partnerships across our product portfolio, including those with Hardrock Digital, Radio Pitaco, Kindred and Svenskaspel. Of course, we've seen some movement in the opposite direction with Leo Vegas in the summer, informing us that they are set to transition off our turnkey over the next couple of years. But the foundations we are laying, the diverse customer base we are building, will further reduce the reliance we have had on a small number of large partners. And finally, we focused even more on building out our unique AI capability at Camby. AI is not a buzzword for us. We are currently using AI to manage our largest sport, soccer, and over the next few quarters, we'll extend this step-by-step to additional sports. As a result, improving our product while also reducing costs. As I'll explain a little later, AI is transforming the way we price, trade, and risk manage markets, particularly those that are more complex and almost impossible for humans to run effectively, such as bed builders and player props. AI today already drives approximately 30% of our operator, GGR. And that's only going to increase over the next quarters. From an operational perspective, we are also increasingly embracing how AI can improve how we perform our day-to-day tasks, enabling us to be even more efficient and productive. Handing over to you.

Thank you, Werner. Good morning, everyone. Revenue for Q4 was 44.5 million, up from 44.3 million in Q4 last year. For the full year, revenue was 176.4 million, up from 173.3 million last year. With our OPEX in line with our guidance, this led to earnings before interest tax and amortization on acquisitions, which I'll call EBITAC from now on, of 7.1 million and 25.3 million for the full year, in line with 2023. Our EPS was 0.515 euros, up from 0.488, benefiting from the buybacks we carried out during the year. And our net cash position at the year end was 61.3 million euros, with our balance sheet remaining in a very healthy position. Here is the operator turnover index for the turnkey sportsbook, and it aggregates the performance of all the operators we work with. On a turnover, the turnover level was 7.78 on the index. This was up 13% from Q3, benefiting from the usual seasonality of the sporting calendar with a full quarter of NFL, NBA and college basketball. The growth was mitigated from Q3 to some degree by Q3 having the final stages of the Euros and the Copa America and also introduction of tighter regulatory conditions in the Netherlands from October. The operator trading margin across the network was 10.1%. Although there were player-friendly results in American football, they were favorable for us soccer results. And we also saw an increased use of higher margin products, for example, bet builders. Our cash at the start of the quarter was 60.5 million. We repurchased shares during the quarter to a value of 3.3 million. But nevertheless, driven by our operating profits, cash increased to 61.3 million by the end of the quarter. We announced a new buyback program for up to 12 million euros in November, which will run through to the AGM in May. This was in line with the capital allocation policy to return capital to our shareholders. And by the time of the AGM, we will have returned an accumulated 38 million since we first started the buyback programs. Here I'll present the outlook for 2025. Firstly, you'll see that we're presenting for the first time an EBITAC metric as our outlook. This metric represents the underlying profits of the business. And I think it's more relevant right now for the business, given the volatility in some of the revenue factors which I'll come to in terms of new signings, new products, operator migrations, the changing regulatory landscape, and new gaming and other taxes. Having this EBITDAQ metric allows us to manage our cost base to help achieve the numbers I'll set out here. EBITDAQ is calculated by excluding amortization on the acquired intangibles, which is a non-cash acquisition related expense. And this adds back around 5.2 million to our EBIT. So firstly, the factors affecting our revenue this year. In terms of organic growth, first thing to mention is the impact of the increased operator trading margin we expect, which it will grow from just under 10% to our new expected level in the range of 9.5% to 11%. Secondly, we see general network growth in the operator turnover across the network, which contributes to this organic growth pile in the waterfall here. And lastly, there was a full year effect of the 2024 launches, including Svenska Spel and LiveScore, which both went live mid 2024. In terms of the 2025 launches, there are various elements. Firstly, Brazil, where we see revenues starting from both KTO and Stake. Then there's the Odd Speed Plus product, where we also start in Q1 with revenues from Hard Rock and Rey de Pataco. There are other smaller launches also included in this pile here. And finally, OLG, which we announced this week, which assumes a second half of the year go-live. We also mentioned we'll actually see a non-recurring cost of two to three million in relation to this launch, which is needed for product and front-end development and some retail integration, and which will show as an item affecting comparability as it's a pure one-off. In terms of transition fees, we've talked about these in the past, but particularly Penn National Gaming, where we received seven months of fees in 2024, and Napoleon Gaming, where we received a full year of fees. Both of these are non-recurring headwinds. In terms of operator migrations, as Verna mentioned, we're expecting impacts from both Kindred and LeoVegas. Here in 2025, the bigger impact is from Kindred, where we've already seen the exit of the dot-com and US markets. And we expect potentially certain more migrations in the second half of the year, although the timing is at this stage uncertain. In terms of Leo Vegas, we see a small impact in 2025, and there are some other small customer churn factors also accounted for here. This particular headwind can be expected to grow in 2026 as the Kindred contract comes to an end at the end of that year, and the Leo migration could accelerate in 2026. Gaming tax and other includes a variety of factors also. Firstly, Colombia, where there was a recently introduced 19% VAT on deposits. The impact that this will have on player behavior and the market all in all is uncertain, but we estimate a 3 to 5 million impact on our revenues in 2025. There have also been other gaming tax increases which will affect us, notably in Sweden, the Netherlands and Illinois, with also expected tax raises in Ohio and Indiana. And this pile also includes the previously mentioned impact of commission rate changes upon renewal of certain key partners. Moving now to the costs. Firstly, there were some inflationary pressures on our cost base. We expect a 2 million increase in the data costs as we grow our client network. Each client comes with some fixed costs in the data, thus driving that increase. We also expect an increase in our infrastructure costs, particularly in terms of network cloud costs to service the level of operators, data and territories in our forecasts, including Brazil and OLG. But that said, as Verna mentioned, we've undergone a quite major cost-saving initiative to realize synergies and efficiencies across the business. 65 roles have already left the business, and we've made savings in a wide range of areas. We'll continue to seek more efficiencies, but this program enables us to anticipate a cost decrease despite the inflationary factors I mentioned. And we expect total expenses to fall from 156.3 million to the range of 150 to 155 million. So all in all, there are a number of revenue headwinds, some of which are temporary. But we have strong commercial momentum across the product portfolio. And with the cost saving initiative, we're taking an active step to maximize our efficiency. On this basis, we estimate EBITAC for 2025 in the range of 20 to 25 million. And with that, I'll pass you back to Werner.