INVESTING AND INNOVATING. William Hill Online Analyst and Investor Day 14 June 2012

Transcription

1 INVESTING AND INNOVATING William Hill Online Analyst and Investor Day 14 June

2 OVERVIEW OF WILLIAM HILL ONLINE Henry Birch Chief Executive Officer 2

3 AGENDA 8.00 am Presentations Overview Marketing Mobile Q&A Henry Birch, CEO Kristof Fahy, Chief Marketing Officer, William Hill Group Schraga Mor, MD, Online Marketing Services Group Andy Lee, Interim Head of Mobile am Site visit Sportsbook and Trading Matthew Warner, Sportsbook Operations Director Gaming Colin Cole Johnson, Gaming Director Innovation Stuart Weston, Head of Product Development Site management Jon McCutcheon, Creative Director pm Lunch 1.15 pm Coach departs for airport for 14:40 EZY8904 flight 3

4 HOW WE VE CHANGED William Hill Interactive (2008) William Hill Online (2011) Employees c380 c1,000 Locations UK, Gibraltar Gibraltar, Israel, Bulgaria, Manila, UK, Italy, Spain Revenues Software Average monthly unique actives 90% UK 32% Sportsbook, 26% Casino, 26% Games, Bingo and Skill, 14% Poker In-house Sportsbook, Cryptologic gaming 75% UK 35% Sportsbook, 25% Casino, 33% Games, Bingo, and Skill, 7% Poker In-house, OpenBet, Playtech, Evolution, etc. 160, ,300 (+113%) Marketing 16.7m 85.8m (+413%) Revenue 125.1m 321.3m (+157%) EBITA 49.2m 106.8m (+117%) 4 Source: company data data reflect William Hill Interactive only, not pro forma for William Hill Online

5 OUR OPERATIONS UK IS/BS Developers and project delivery Marketing Trading support Italy/Spain/Austria Local marketing Manila Service UK customers and chat hosts Risk and fraud analysis Age verification Gibraltar Senior management Sportsbook content (UK and international) Trading Product development Bingo/Vegas/Games/Skill CRM Web designers English speaking customer services and Telephone Development, architecture BI/website analysis Bulgaria Service international customers European language customer services Customer services support for standalone casinos Tel Aviv Online marketing Affiliate management PPC/SEO Media buying Casino/Poker Back end systems and gaming infrastructure Data Analysis 5

6 OUR MANAGEMENT TEAM Operations Finance Marketing Customer services HR Betting Gaming Brand/marketing Trading IS 6

7 KEY RELATIONSHIPS Mobenga, In-house Game Probability In-house + various Account Inspired + various + OpenBet Playtech OpenBet Evolution Virtue Fusion In-house + various 7

8 OUR KEY MARKET - UK Between 2009 and 2011, UK gross gaming yield (GGY) grew 12% 1 Significant market share gains UK market GGY projected to grow 12% % 120% 80% 40% 0% 17% 150% 61% 9% 8% 76% 85% 16% 12% Sportsbook Casino Poker Bingo Total UK GGY UK growth rates WHO UK NR 92% William Hill Online estimated UK market share by 2011 net revenue 2 Sportsbook 16.5% Casino 21% Poker 8% Bingo 7% UK total 15% 8 1. GGY = gross gaming yield or gross win (net revenue plus fair value adjustments) Total = GGY for Sportsbook, Casino, Poker and Bingo Source: H2 Gambling Capital, Feb 2012 and company data 2. GamblingData, UK Data Report, June 2012

9 UK ONLINE GAMBLING CUSTOMERS All categories Regular Online Gambler Gambled via mobile in last 12 months Betting Regular Online Bettor % 62% 54% % 35% 38% % 3% 9% Male 79% 79% 92% Female 21% 21% 8% ABC1 61% 72% 65% C2DE 39% 28% 35% UK online gambling population (m) Financial, Other 0.32 games/skill, 0.48 Bingo, 0.78 Casino, 0.74 Poker, 0.67 Betting, Source: Kantar Online Gambling Market Study (U&A) Mar 2012.

10 (size in 000s) UK ONLINE BETTING POPULATION World Cup as customer recruitment tool % increase in online gamblers March 2009 to March % increase in regular online gamblers March 2009 to March Mar '09 Oct '09 Mar'10 Oct'10 Mar'11 Oct'11 Mar'12 Regulars Occasionals Total 10 Source: Kantar Online Gambling Market Study (Market Sizing).

11 DRIVERS OF OUR GROWTH Net revenue New accounts % 92% 86% 80% % 40% 20% 33% % -20% -10% % -60% -37% Sportsbook Poker Casino Bingo and Skill 11 Source: company data data reflect the pro forma numbers for William Hill Online.

12 SPORTSBOOK-LED MODEL Sportsbook stakes (2011) Core expertise and competitive advantage Differentiation through production innovations, marketing investment and stand-out pricing Brand- and price-led marketing focused on Sportsbook Key customer acquisition tool Mass market model 4% 2% 12% 8% 9% 8% 12% 31% 10% 28% 39% 37% Football Horseracing Tennis Cricket Basketball Other Gross win by customers average weekly stakes (2011) < <> <> <> <> 5000 > Source: company data

13 SPORTSBOOK DRIVERS Active accounts +92% ,000 active accounts and 400,000 new accounts in 2011 Substantial expansion in markets Pre-match stakes +89% In-play stakes +274% +288% growth in football stakes since stakes growth in key sports 80% 75% 64% 66% 60% 54% 40% 20% 0% Football Tennis Cricket Basketball +141% growth in racing stakes since Source: company data

14 GAMING DRIVERS Diverse and differentiated offering Product Bonuses Range of categories 395 games offered Range of platforms and game suppliers Proprietary Vegas platform Standalone brands 14

15 LIVE CASINO 15

16 MOBILE AND SOCIAL STRATEGY Key growth opportunity Access to new customers Product development and differentiation Community innovations Tapping into social gaming tools and engagement functionality Regular gamblers using mobile 30% 27% 26% 25% 20% 15% 11% 10% 10% 5% 2% 3% 0% March 2010 March 2012 Gambled via a mobile device in the last year Gamble via a mobile device monthly Only gamble via a mobile device 16 Source: Kantar Online Gambling Market Study (Market Sizing)

17 INTERNATIONAL GROWTH 100% 80% 60% 40% 20% Products by geography (2011) 14% 8% 4% 14% 63% 86% 92% 96% 86% 37% 4% Online 2011 net revenues by regulatory risk 1 9% 11% UK and Italy Lower risk Higher risk 0% 76% Minor markets UK Non-UK Growth in spite of closing to second largest market Selective approach to new markets Assessed in relation to the Board s current view as to the relative attractiveness of the current or proposed regulatory framework in each market. Minor markets are markets representing less than 1.5% of net revenue in each market.

18 INNOVATION AND INVESTMENT Product 5-10 in-play models Live Casino, VIP CRM Channel Mobile betting and gaming Social / community International Italy product expansion Spain launch 18

19 MARKETING Kristof Fahy Chief Marketing Officer, William Hill 19

20 A REAL SUM OF THE PARTS... William Hill is a unique business and a unique model Odds, product, service, weather...even perception of luck will drive turnover and punter behaviour While Marketing is a key contributor to the business, it s a team effort with strong relationships across Operations and Trading 20

21 CHANGING OUR MARKETING APPROACH 1. Act like the leader we are We were over reliant on our high street presence. 2. Get into the game We needed to catch-up within a highly competitive marketplace with unique advertising restrictions. 3. Be in the heart of the action Right place, right message and strong price led offers. 4. Moving our mindset from channel, product, customer to customer, product, channel 21

22 AS WE INVEST, WE GROW... 22

23 NEW ACCOUNTS CONTINUE TO GROW 2010 World Cup 23

24 ATL MEDIA MIX Q1 TV PRESS RADIO OOH TV PRESS RADIO OOH TV Press Radio OOH 24

25 BUILDING OUR PRESENCE IN MOBILE Premium networks and in-app advertising Ad networks SMS and push notifications Operator portals Optimised sites and apps which allow us to target specific events, sports and schedules. Run of network, targeting 18+, male, sports and gambling audience. SMS still one of best converting channels. Push notification will become increasing important. Operator portals have high levels of traffic to which most older handsets will automatically direct. 25

26 GRAND NATIONAL ,554 downloads of our mobile app on Saturday and 6,915 downloads on Sunday Hit over 1,000 bets per minute on Mobile on Saturday #1 Free Sports App over the weekend, #4 of all Free Apps on Saturday 26

27 VEGAS, CASINO AND BINGO Vegas and Casino Test campaigns Looking at timing, media mix and offers Bingo Monthly promotions Enhancing Bingo proposition and marketing approach 27

28 A GROWING SPONSORSHIP PORTFOLIO Grand Slam of Darts Over 50 hours of live coverage on Sky Sports UK Snooker Championship Over 40 hours of live coverage across the BBC Racing Strong sponsorships including King George. Unique Mark Your Card advertorial introduced at Cheltenham Scottish Cup Extensive coverage across Sky and BBC. PR opportunities at every round 28

29 THE IMPORTANCE OF FOOTBALL Unique partnership with the FA Official England Supporter and FA Cup Betting Partner 3 Lions the first game to use England assets and to be launched in Retail, Online and Mobile, exclusive to William Hill Strong branding at all England home games and FA Cup Semi and Finals Sponsorship of ITV s coverage of the FA Cup 29

30 30

31 PR / SOCIAL MEDIA 31

32 PR / SOCIAL MEDIA 32

33 OUR SHOP WINDOWS 2 x LOA s are equivalent to a 1 x 6 sheet ad panel. Our extensive retail network means that we have roughly 4,640 outdoor poster sites. The cost to an advertiser to buy this level of media would be 39,780 per day 33 Source: Posterscope, 17 April 2012

34 THE BRAND ABROAD Qualitative research in Spain, Italy, Austria showed: Britain is known for betting they bet on everything 75 years in the business delivers trust and expertise Britishness is an advantage when used in the right way William Hill was distinctive and had cut through modern classic 34

35 GETTING SMARTER MI detailing YTD, current month and yoy position YoY change in key metrics Trend on KPIs over time, e.g., new actives (total and % of total) Spend vs efficiency KPIs (cost per unique active) Unique actives vs spend Title efficiencies what s working best Channel efficiencies what s working best Propositions and product appeal 35

36 WHAT S NEXT? Continue to deliver relevant and salient marketing programmes and communications Continue to think and act multi-channel Continue to maximise our sponsorship portfolio Ensuring PR, social and mobile are key to what we do every day Increasing our intelligence around media and effect to maximise our investment and return 36

37 ONLINE MARKETING Schraga Mor Managing Director Online Marketing Services Group - Tel Aviv 37

38 MARKETING SERVICES GROUP Marketing units CRM and conversion Casino Poker Payments, risk, fraud 38

39 ONLINE MARKETING Affiliates PPC Media SEO 39

40 AFFILIATE MARKETING In 2011, affiliates acquired 205,000 new accounts Over 6,000 registered affiliates From one-man operations with minimal earnings to large companies with hundreds of employees and earnings of over $100k per month Affiliates are responsible for 25% of total new accounts Why do affiliates choose us and not the competition? 40

41 PAY PER CLICK Q In PPC we buy ads shown in search engine results pages 18 million keywords 105,000 ads 5,500 campaigns 115 accounts Four countries 30% of our new accounts 41

42 PAY PER CLICK 18% 16% 14% 16% 14% 13% 13% #1 in search click share of UK betting searches Growing interest in brand queries in the UK 12% 10% 8% 10% 9% 9% 9% 8% 6% 5% 4% 2% 0% William Hill Ladbrokes Paddy Power Bet365 Betfair Bodog Boylesports StanJames Victor Chandler Betclick 42 Source: Stickyeyes: Online Gambling and Betting, UK, July-December2011

43 PAY PER CLICK 43

44 MEDIA ACTIVITIES We buy media in all our major markets Over 150 campaigns at any time 1,400 traffic sources 40+ large portals More than 60 media networks 1,000,000,000 impressions/month Facebook three countries (UK, Italy, Austria), five products 10% of new accounts 44

45 SEARCH ENGINE OPTIMISATION We promote our sites in search engine results pages using SEO We produce content in 22 languages We promote all company sites and networks We get traffic from ~300k keywords and over 40 resources 10% of new accounts 45

46 WHY TEL AVIV? Multinationals with development centres in Tel Aviv 46

47 MOBILE Andrew Lee Interim Head of Mobile 47

48 AGENDA Mobile targets Current trends Customer profile Mobile offering The future 48

49 OUR MOBILE TARGETS Mobile as 40% of Sportsbook turnover 19% Mobile turnover as a proportion of Sportsbook turnover in Q Sportsbook mobile weekly turnover of 15m a week 7.4m Average weekly mobile Sportsbook turnover in Q

50 2012 PERFORMANCE Sports stakes boosted by Launch of native App in Apple Store in Feb 2012 (288,000 downloads New ipad (16 Mar) Fast recent growth in Gaming driven by Rapid increase in number of games/slots Roulette/Blackjack tiles on sports lobby Launch of Bingo in Mar 2012 Average weekly mobile Sportsbook turnover, P12/2011 P3/2012 P12 P1 P2 P3 Sports Sports Web Sports Native 50 Source: company data

51 % Growth YOY % Growth YOY MOBILE DRIVING INCREMENTAL GROWTH TOTAL INTERNET 1 TURNOVER, 2012 TOTAL MOBILE TURNOVER 14.0 % 500.0% 12.0 % 400.0% 10.0 % 8.0 % 300.0% 6.0 % 200.0% 4.0 % 2.0 % 100.0% % Week Week 1 Internet only excluding Mobile 51 Source: company data

52 INDUSTRY DATA Global users (2011) Penetration rate YoY growth Internet 1 Mobile 3G 2 2.3bn 1.1bn 32% 16% 8% 37% 3G subscribers 2 (m) USA 208 Japan 122 China 57 Korea 45 Italy 44 Global mobile traffic is now 10% of all internet traffic from just 1% in December 2009 UK Brazil India Germany Spain Sources: KPCB, StatCounter Global Stats , 2 Q4 2011

53 MOBILE INDUSTRY TRENDS CAGR 30% European mobile GGY, bn E 2012E 2013E 2014E 2015E 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% % of mobile phone users who engage in betting via handsets UK W Europe C/E Europe 20% 15% 10% 5% 0% Mobile percentage of online, Europe 2 17% 16% 14% 13% 10% 9% 8% 9% E 2012E 2013E 2014E 2015E 53 Sources: 1. Juniper Mobile Gambling Report, H2GC

54 MOBILE INDUSTRY TRENDS Global mobile gambling gross win by product Betting Exchange, $028m, 2% 2011 Casino, $116m, 10% Lottery, $198m, 17% Betting Exchange, $100m, 3% 2015 Casino, $620m, 18% Sports Betting, $1,829m, 53% Lottery, $901m, 26% Sports Betting, $842m, 71% 54 Source: Juniper Mobile Gambling Report,

55 CUSTOMER OVERVIEW The mobile market is still relatively immature Mobile increases flexibility but is still popular in the home 90% 80% 74% 83% In the last month, 8% 70% 60% More than a year ago, 31% 2-3 months ago, 22% 50% 40% 30% 43% 43% 46% 45% 38% 38% 38% 33% 30% 31% 27% 23% 7-12 months ago, 23% 4-6 months ago, 16% 20% 10% 0% Used a mobile to bet. Via a mobile phone/smartphone Via a tablet 55 Source: Kantar, Mar 2012, regular mobile bettors

56 PROMOTING POPULAR BETS 56 Source: Kantar, Mar 2012, regular mobile bettors

57 ONLINE AND MOBILE CUSTOMERS Online customers are (largely) male, white collar workers, mobile is currently attracting a younger customer 100% 90% 80% 70% 60% 50% 12% 9% 39% 38% 2% 40% 92% 65% of sports betting customers are male of sports betting customers are ABC1 40% 30% 20% 49% 54% 57% 74% of mobile betting customers are ABC1 10% 0% Regular online gambler Regular online bettor Regular mobile bettor the average number of sports betting accounts actively used 57 Source: Kantar Online Study (Mar 2011)

58 AND OUR MOBILE BUSINESS THUS FAR 35% 50% >30% 39% of Sportsbook stakes are placed by customers who use internet and mobile of our mobile customers are already staking 83% or more of their stakes on mobile of our mobile customers use mobile only of mobile betting turnover is in-play 58 Source: company data

59 X-CHANNEL CUSTOMERS SPEND MORE Bets per active Gross win per active Internet & Mobile Internet & Mobile Mobile Solus Mobile Solus Internet Solus Internet Solus Internet Solus Mobile Solus Internet & Mobile Internet Solus Mobile Solus Internet & Mobile Stakes per active Average bet stake Internet & Mobile Internet & Mobile Mobile Solus Mobile Solus Internet Solus Internet Solus Internet Solus Mobile Solus Internet & Mobile Internet Solus Mobile Solus Internet & Mobile 59 Source: company data, P1-3

60 THE CURRENT PORTFOLIO Web Sportsbook Casino Bingo Games William Hill Casino Club Eurogrand Native apps Sportsbook Shake-a-Bet Day Trader ipad Racing Post Racing UK 60

61 WHICH OS...? ios is the leader 42% European handset penetration and 60% of WHO mobile traffic but Android is growing fast Mobile penetration in Europe 2 50 Penetration trends in Europe 2 7% 40 ios 12% 8% 42% ios Android Symbian Android 31% Blackberry OS Other 10 Symbian Blackberry OS Other 0 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan Sources: 1. Company data 2. StatCounter

62 62 Sources: KPCB

63 63 Source: KPCB

64 OR WILL IT BE WEB? Native Apps vs HTML vs 64

65 THE FUTURE We know our customers..in future we want to give them Love betting Want speed Have opinions Immersive content Intuitive navigation Social experience Hate bad X-sell Demand relevance Want simplicity Relevant X-sell Personalisation Localisation Mobile Challenges..Opportunities to differentiate Screen size Cost of apps Marketing Convenience / push Apps strategy Payments / age verification / security Native vs HTML5 Multi-touch / gestures / off-canvass Camera / location / accelerometer Crashing Speed of site Social Ubiquity 65