Christopher Bell Chief Executive Investor Day 4 October 2006 - PowerPoint PPT Presentation

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Christopher Bell Chief Executive Investor Day 4 October 2006

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Ladbrokes.com on a touch screen terminal. Competitiveness. Driving Gross Win ... UK Retail - Technology, product range, opportunities to bet ... – PowerPoint PPT presentation

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Title: Christopher Bell Chief Executive Investor Day 4 October 2006


1
Christopher BellChief ExecutiveInvestor Day
4 October 2006
2
Team structure
Chris Bell Chief Executive
Mike Noble Company Secretary
Rosemary Thorne Finance
Julian Arlett Investor Relations
John OReilly Remote Gaming
Bryan Taker Human Resources
Mike OKane Trading
Alan Ross Retail
David Briggs eGaming
Mike Nuttall Casinos
Alex Kovach International
Richard Ames UK Retail
Steve Maxwell IT
3
Objectives
  • Meet with senior and operational management
  • Workshops covering major strategic initiatives
  • Appreciate how we will grow and stay ahead
  • See and touch our leading edge technology

4
Betting and Gaming sector
  • Ongoing change
  • Regulation and legislation UK / Europe / USA
  • Technology
  • Product and service innovation
  • Internet a catalyst for change around the world

5
Ladbrokes core activities
  • Retail - Growth in UK from improvement of shop
    estate, technology, increased product range, and
    2005 Gambling Act
  • - Irish estate will continue to grow in size
  • eGaming - Growth through product pipeline,
    localisation of product and geographic expansion
  • Telephone - Growing core business, added value
    from High Rollers
  • International - China and Russia important
    emerging markets
  • - Italy a significant opportunity
  • - Another Italy will realise in excess of the
    3-5 year 20-40m EBIT target
  • Casino - 17 new UK casinos focus on selected
    locations

6
Agenda
  • Presentations
  • Alan Ross - MD European Retail
  • John OReilly - MD eGaming and Telephone
  • Steve Maxwell - Chief Information Officer
  • Workshops
  • Richard Ames - Retail (MD UK Retail)
  • David Briggs - eGaming (MD eGaming)
  • Mike OKane - Trading (Trading Director)
  • Alex Kovach - International (Development
    Director)
  • QA session
  • Visit to Paddington casino

7
Alan RossManaging Director, European
RetailRetail strategy
8
Team structure
Alan Ross Managing Director European Retail
International Alex Kovach Kevin Hopgood
Casinos Mike Nuttall
IT Steve Maxwell
Ireland Belgium
UK Retail Richard Ames
9
Key themes for Retail strategy
  • Drive Retail Gross Win
  • Control Cost Structures
  • Key areas of Focus
  • Customer
  • Competitiveness
  • Contribution
  • All actions are facilitated or underpinned by
    Technology

10
Retail Gross Win
11
Customer
  • Target biggest growth opportunity markets
  • 18-34 year olds
  • Local marketing
  • Modern Shops
  • New shop designs and formats
  • Evening opening
  • No Smoking Betting Shops
  • Gambling Act Opportunities
  • Product marketing / advertising

12
Competitiveness
  • Differentiated Product Proposition
  • Ladbrokes Xtra
  • Xtra Screens, Xtra Content, Xtra Choice
  • V6 EPOS
  • International Pools
  • Enhanced Betting in Play proposition - Quickslips
  • FOBTS
  • Twin screen games, Casino grade note coin
    mechanisms
  • Self Service Betting Terminals
  • Ladbrokes.com on a touch screen terminal

13
Contribution
  • Driving Gross Win
  • Increase customer loyalty
  • Increase betting opportunities
  • Controlling Costs
  • Continuing focus on company cost reduction
    programmes
  • Efficiencies in shop and field management
    processes
  • Continuing focus on individual shop contribution

14
Ireland
  • Increase size of shop estate
  • Eire
  • Northern Ireland
  • Like for like Gross Win increase in current
    estate
  • Introduction of Ladbrokes Xtra Gold Service and
    V6 EPOS
  • FOBT opportunity

15
International Retail
  • Focus on largest regional markets
  • Focus on core countries within regions
  • Products
  • Fixed odds betting
  • Existing remote products
  • Poker, casino, games
  • Sports lotteries
  • Wherever possible, enter markets with multiple
    channels
  • Retail, Internet, Franchise (Sportsbook in casino)

16
John OReillyManaging Director Ladbrokes
RemoteeGaming strategy
17
Team structure
John OReilly Managing Director Remote
Telephone Betting Hugh Carr
Finance Jo Boydell
Vernons Steve Roberts
PR / PA Ciaran OBrien
Compliance Sue Harley
International Business Dev. Alex Kovach
Ladbrokes International Jim Falconer
eGaming David Briggs
IT Steve Maxwell
18
  • Through rapid innovation (e.g. single wallet,
    best of breed banking solutions etc) an overall
    operating loss of 10m in 2000 was converted to a
    profit of 41.4m in 2005 (CAGR of 90 since 2001)
  • Operating profit of 19.8m in H1 2006

eGaming Gross Win
19
  • Ladbrokes eGaming currently operates
  • 18 currencies
  • 12 languages
  • 21 payment methods, with single wallet
  • 200 staff in UK and Gibraltar
  • Growth through product and market development
  • Online sportsbook
  • 200 casino games
  • 46 soft games
  • Poker

Registrations
20
Product development
Feb 2000 Ladbrokes.com Mar 2000 Interactive TV
Service Oct 2000 Ladbrokescasino.com Nov
2000 Ladbrokes.com betting portal July
2001 Balls! Feb 2002 Sky iTV Service May
2002 Ladbrokespoker.com May 2003 Rio Bay
Casino Nov 2003 One Account facility rolled
out Dec 2003 Ladbrokesgames.com Dec 2003 Multi
table Poker Nov 2004 Affiliate programme Jan
2005 Games Roulette Feb 2005 Live Dealer Casino
Mar 2005 ATR Video streaming Aug 2005 Ladbrokes
Financials Nov 2005 One-click Casino Jan
2006 Mahjong April 2006 Bingo May
2006 Backgammon July 2006 Deal or No Deal! Sep
2006 Pontoon bet
Coming Soon
New Sportsbook Multilingual Poker Next
generation Poker Multi-Player / P2P
Casino DiTV roulette
21
Market development
  • Far East, Scandinavia, Mediterranean countries,
    Africa (selected countries)
  • Localised products, services and AP investment
  • Pressing for free movement of services (and
    freedom of establishment) in Europe
  • Legal Update Netherlands, Germany, Norway,
    Sweden, Denmark, Italy
  • Impact of US Port Security Bill

22
Growth prospects
  • Strong management team UK and International
  • Worlds biggest (non-US) sportsbook
  • International betting in play
  • Single account across Telephone / Interactive /
    Retail
  • Advanced Casino software, rapid game development,
    localised services, affiliate and cross-sell
    programmes
  • Next generation Poker software
  • P2P and branded (licensed) Games
  • New product and channel developments

23
Steve MaxwellChief Information
OfficerLadbrokes technology core
24
Business Systems Environment
25
Business Applications Architecture
  • Insourced strategy and management
  • Insourced project management
  • Insourced technology services and operations (IS,
    Engineering, )
  • Outsourced software development (leveraging
    specialist expertise)
  • Contract with key technology suppliers qualified
    to partner with Ladbrokes

26
1st Class Technology Partners
Infrastructure
Application Software
Technical Software
Servers
Sun Dell HP
Servers
Betting
Alphameric Orbis
Sun Microsoft
EMC
IBM Oracle MS
MGS Cyberview Orbis
Gaming
Storage
Data Mgmt
Cisco BT
Cisco
Network
Network
Alphameric Various
Content
Internap BT MCI Gibtel
Bandwidth
Datacash PSPs Banks
Payments
27
Retail Betting - Russian Casino Model
EPOS Software Players place bets by calling over
their bet, and their receipt prints a bar-coded
receipt. Payout of winning bets is by scanning
the players unique bar coded receiptmulti-langua
ge, multi-channel, multi-payment methods
Screen Systems The content delivery systems
enable distribution of screen content across the
screen systems which are installed within the
gaming venue multi-.
Handheld Terminals Handheld terminals enable
cashiers to accept bets directly from players on
the gaming floor delivering sports betting
opportunities to customers on the casino floor
via the casinos promotional staff
28
International Retail Betting Model
Content Presentation
Online
Mobile
Back Office
POS
Betting Shops, Casinos, Hospitality
29
Retail Betting Model
Betting Shops with Mobile and Internet Gaming
30
Richard AmesManaging Director UK
RetailLadbrokes Retail
31
Notes
32
Notes
33
Notes
34
David BriggsManaging Director eGamingThe
Ladbrokes eGaming experience
35
Team structure
David Briggs Managing Director eGaming
Product Units
International Development
Finance, HR, Legal
Marketing Services
Systems
36
How does the structure work?
HR, Finance, Compliance
International Development
Product Business Units
Marketing Services
Systems Projects
37
Multi-product offering, but single product focus
Poker
Sportsbook
Casino
Games
38
Interactive breakout session
  • Illustration of the Ladbrokes Sportsbook, Casino,
    Poker and Games experience
  • Making technology work for the customer
  • The international dimension
  • Innovation at the core of what we do

39
Mike OKaneTrading DirectorLadbrokes trading
strategy
40
Trading Strategy
  • Key element of the business
  • Market making
  • Liability management
  • Client service principles
  • Price competition
  • Department structure reflects product and
    business profile
  • Horseracing greyhounds
  • Sports

41
Trading Structure
Mike OKane Trading Director
Horse Greyhound Product Director
Sports Product Director
Trading Development Manager
Racecourse Liability Manager
  • Liability Management H/D All Channels
  • H/D Odds Compilation
  • Bet Acceptance, Retail, Net, Phone, Eire,
    Vernons
  • Odds Compilation and Liability Management
  • Sports
  • Football
  • European
  • Market Development
  • Trading Analysis
  • Performance Reporting
  • Systems Development
  • Customer Management
  • Racecourse Representation
  • Hedging Activity

42
Trading Strategy
  • Strong product range across all channels
  • Further development of Betting In Play to cover
    all live television sport
  • European focus across all sports with continued
    expansion of sports portfolio to match
    geographical footprint of customers
  • All UK and Ireland horseracing priced every day

43
Trading Strategy
  • Liability Management
  • Systems based market management using EPOS and
    Telephone / Internet
  • Customer management process identifies
    opportunities to grow business as well as
    managing risk
  • Hedging into racecourse and exchanges
  • Visit to Trading floor

44
Alex KovachInternational Business Development
DirectorLadbrokes International strategy
45
Estimated regional market size
Total amount gambled 2005 (USBn)
Source GBGC
46
Our International growth opportunity
  • Faced with competition from illegal and online
    bookmakers, numerous international governments
    are reviewing sportsbetting as a revenue
    generator, controlled by the state or the
    licensed lottery operator
  • The opportunity for Ladbrokes to export its core
    fixed odds betting capability is often to work
    with state governments / monopoly lottery
    operators

47
International strategy Products Channels
  • Fixed odds betting
  • Existing remote products
  • Poker
  • Casino
  • Games
  • Sports lotteries
  • Exclude
  • Offline casinos
  • Slots
  • Racetracks
  • Where possible enter markets with multiple
    channels
  • Retail
  • Internet
  • Franchise (Sportsbook in Casino)

48
International strategy Geography
  • Focus on largest regional markets
  • Europe
  • Asia
  • Focus on core countries within regions
  • Ambition
  • Market share 1st / 2nd / 3rd
  • Investment
  • MA and JV opportunities
  • Build brand through marketing investment
  • Invest in building relations and a reputation
    with governments worldwide
  • Product
  • Localise
  • Exclude
  • Africa
  • South America
  • Middle East

49
European market map
11.5
Poland
Italy
Easier
Slovakia
10.5
Russia
Belgium
Spain
Nordics
Ireland
9.5
Greece
Czech
E. Europe
Hungary
Ease
of entry
8.5
Turkey
Portugal
France
7.5
Netherlands
Austria
6.5
Harder
Germany
5.5
20,000,000,000
0
5,000,000,000
10,000,000,000
15,000,000,000
Size of Market (US)
Size of bubble indicates gambling spend per
person, Source CIA website, 2006 GBGC
50
Christopher BellChief Executive
51
Ladbrokes growth strategy
  • UK Retail - Technology, product range,
    opportunities to bet
  • - UK 500 Jackpot machines, winter evening
    opening
  • - Ireland More shops, FOBTs?
  • eGaming - Product and service innovation
  • - New geographies
  • International - Vietnam / Turkey / China / Russia
    / others?
  • - Italy
  • Telephone - Steady growth in core business,
    maximise High Roller opportunity
  • Finance - Cash positive, target gearing x3.5
    3.75
  • - Share buybacks / dividend / acquisition

52
QAs
53
Notes
54
Notes
55
Notes
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