Christopher Bell
Chief Executive
Investor Day – 4 October 2006
Team structure
Chris Bell
Chief Executive
Mike
Noble
Company
Secretary
Rosemary
Thorne
Finance
Julian
Arlett
Investor
Relations
John
O’Reilly
Remote
Gaming
Bryan
Taker
Human
Resources
Mike
O’Kane
Trading
David
Briggs
eGaming
Mike
Nuttall
Casinos
Alex
Kovach
International
Richard
Ames
UK Retail
Steve
Maxwell
IT
Alan
Ross
Retail
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
Betting and Gaming sector
•
Ongoing change:
o
Regulation and legislation – UK / Europe /
USA
o
Technology
o
Product and service innovation
o
Internet a catalyst for change around the
world
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
Agenda
• Presentations
Alan Ross
John O’Reilly
Steve Maxwell
-
MD European Retail
MD eGaming and Telephone
Chief Information Officer
-
Retail (MD UK Retail)
eGaming (MD eGaming)
Trading (Trading Director)
International (Development Director)
• Workshops
Richard Ames
David Briggs
Mike O’Kane
Alex Kovach
• Q&A session
• Visit to Paddington casino
Alan Ross
Managing Director, European Retail
Retail strategy
Team structure
Alan Ross
Managing Director
European Retail
UK Retail
Richard Ames
International
Alex Kovach &
Kevin Hopgood
Casinos
Mike Nuttall
IT
Steve Maxwell
Ireland &
Belgium
Key themes for Retail strategy
• Drive Retail Gross Win
• Control Cost Structures
• Key areas of Focus
o
Customer
o
Competitiveness
o
Contribution
• All actions are facilitated or underpinned by
Technology
Retail Gross Win
700
650
600
£m
550
500
450
400
350
300
2000
2001
2002
OTC
2003
FOBTs
AWPs
2004
2005
Customer
• Target biggest growth opportunity markets
o 18-34 year olds
o Local marketing
• Modern Shops
o
o
o
New shop designs and formats
Evening opening
No Smoking Betting Shops
• Gambling Act Opportunities
o Product marketing / advertising
Competitiveness
• Differentiated Product Proposition
o Ladbrokes Xtra
• Xtra Screens, Xtra Content, Xtra Choice
o V6 EPOS
• International Pools
• Enhanced Betting in Play proposition Quickslips
o FOBTS
• Twin screen games, Casino grade note &
coin mechanisms
o Self Service Betting Terminals
• Ladbrokes.com on a touch screen terminal
Contribution
• Driving Gross Win
o
Increase customer loyalty
o
Increase betting opportunities
• Controlling Costs
o
Continuing focus on company cost reduction
programmes
o
Efficiencies in shop and field management
processes
o
Continuing focus on individual shop contribution
Ireland
• Increase size of shop estate
o Eire
o Northern Ireland
• Like for like Gross Win increase in current
estate
• Introduction of Ladbrokes Xtra Gold Service
and V6 EPOS
• FOBT opportunity
International Retail
• Focus on largest regional markets
• Focus on core countries within regions
• Products
o Fixed odds betting
o Existing remote products
• Poker, casino, games
o Sports lotteries
• Wherever possible, enter markets with multiple
channels
o Retail, Internet, Franchise (Sportsbook in
casino)
John O’Reilly
Managing Director Ladbrokes Remote
eGaming strategy
Team structure
John O’Reilly
Managing Director
Remote
Telephone
Betting
Hugh Carr
Vernons
Finance
PR / PA
Compliance
Steve Roberts
Jo Boydell
Ciaran O’Brien
Sue Harley
eGaming
David Briggs
Ladbrokes
International
International
Business Dev.
Jim Falconer
Alex Kovach
IT
Steve Maxwell
•
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
(£m)
140
120
100
80
60
40
20
0
2000
2001
2002
Sportsbook Casino
2003
Poker Games
2004
Other
2005
•
•
Ladbrokes eGaming currently operates:
•
18 currencies
•
•
12 languages
•
•
21 payment methods, with single wallet •
•
200+ staff in UK and Gibraltar
•
Online sportsbook
200+ casino games
46 ‘soft’ games
Poker
Growth through product and market development
Registrations
2,000,000
500,000
1,500,000
400,000
300,000
1,000,000
200,000
500,000
100,000
0
0
2000
2001
2002
Annual Registrations
2003
2004
2005
Cumulative Registrations
Number of Accounts
Number of Accounts
600,000
Product development
Feb 2000
Mar 2000
Oct 2000
Nov 2000
July 2001
Feb 2002
May 2002
May 2003
Nov 2003
Dec 2003
Dec 2003
Nov 2004
Jan 2005
Feb 2005
Ladbrokes.com
Interactive TV Service
Ladbrokescasino.com
Ladbrokes.com betting portal
Balls!
Sky iTV Service
Ladbrokespoker.com
Rio Bay Casino
One Account facility rolled out
Ladbrokesgames.com
Multi table Poker
Affiliate programme
Games Roulette
Live Dealer Casino
Mar 2005
Aug 2005
Nov 2005
Jan 2006
April 2006
May 2006
July 2006
Sep 2006
ATR Video streaming
Ladbrokes Financials
‘One-click’ Casino
Mahjong
Bingo
Backgammon
‘Deal or No Deal!’
Pontoon bet
Coming Soon
New Sportsbook
Multilingual Poker
Next generation Poker
Multi-Player / P2P Casino
DiTV roulette
Market development
•
•
•
•
•
Far East, Scandinavia,
Mediterranean countries, Africa
(selected countries)
Localised products, services and
A&P 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
Growth prospects
•
•
•
•
•
•
•
•
Strong management team – UK and
International
World’s 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
Steve Maxwell
Chief Information Officer
Ladbrokes’ technology core
Business Systems Environment
Les II
External
Xtra
Mobile
Content
Betting
Centres
iTV
VCC
Retail
Tracks
Events
Products
Remote
Telebet
London
Liverpool
KL
Internet
Shops
International
Vietnam
China
Integration
Italy
Russia
Retail
Retail
Retail
Spain
Remote
Retail
Retail
Remote
Casino
Remote
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
1st Class Technology Partners
Infrastructure
Technical Software
Application Software
Servers
Sun Dell HP
Servers
Sun Microsoft
Betting
Alphameric Orbis
Storage
EMC
Data Mgmt
IBM Oracle MS
Gaming
MGS Cyberview Orbis
Network
Cisco BT
Network
Cisco
Content
Alphameric Various
Bandwidth
Internap BT
MCI Gibtel
Payments
Datacash PSPs Banks
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 receipt……multilanguage, 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 casino’s promotional staff
‘International’ Retail Betting Model
Content
Presentation
Online
Mobile
Back Office
POS
Betting Shops, Casinos, Hospitality…
Retail Betting Model
Betting Shops with Mobile and Internet Gaming
Richard Ames
Managing Director UK Retail
Ladbrokes Retail
Notes
Notes
Notes
David Briggs
Managing Director eGaming
The Ladbrokes eGaming experience
Team structure
David Briggs
Managing Director
eGaming
Product
Units
Marketing
Services
International
Development
Systems
Finance,
HR, Legal…
How does the structure work?
HR, Finance, Compliance
International Development
Product
Business Units
Marketing Services
Systems & Projects
Multi-product offering, but single
product focus
Sportsbook
Casino
Poker
Games
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
Mike O’Kane
Trading Director
Ladbrokes’ trading strategy
Trading Strategy
•
•
Key element of the business:
o
Market making
o
Liability management
o
Client service principles
o
Price competition
Department structure reflects product and
business profile
o
Horseracing & greyhounds
o
Sports
Trading Structure
Mike O’Kane
Trading Director
Horse &
Greyhound
Product Director
Sports
Product
Director
• Liability Management
H/D All Channels
• Odds Compilation and
Liability Management
• H/D Odds Compilation
• Sports
• Bet Acceptance, Retail,
Net, Phone, Eire,
Vernons
• Football
• European
• Market Development
Trading
Development
Manager
• Trading Analysis
• Performance Reporting
• Systems Development
• Customer Management
Racecourse
Liability
Manager
• Racecourse
Representation
• Hedging Activity
Trading Strategy
• Strong product range across all channels:
o
Further development of Betting In Play to
cover all live television sport
o
European focus across all sports with
continued expansion of sports portfolio to
match geographical footprint of customers
o
All UK and Ireland horseracing priced every
day
Trading Strategy
• Liability Management:
o
Systems based market management using
EPOS and Telephone / Internet
o
Customer management process identifies
opportunities to grow business as well as
managing risk
o
Hedging into racecourse and exchanges
• Visit to Trading floor
Alex Kovach
International Business Development Director
Ladbrokes’ International strategy
Estimated regional market size
Total amount gambled 2005 (US$Bn)
600
500
$Bn
400
300
200
100
0
Africa
Source: GBGC
Asia &
Middle
East
Central,
South
America
Europe
North
America
Oceania
Our International growth opportunity
• Faced with competition from illegal and online bookmakers,
numerous international governments are reviewing
sportsbetting as a revenue generator, controlled by the state
or the licensed lottery operator
• The opportunity for Ladbrokes to export its core fixed odds
betting capability is often to work with state governments /
monopoly lottery operators
International strategy – Products &
Channels
•
•
•
•
•
Fixed odds betting
Existing remote products
o Poker
o Casino
o Games
Sports lotteries
Exclude:
o Offline casinos
o Slots
o Racetracks
Where possible enter markets with multiple channels
o Retail
o Internet
o Franchise (Sportsbook in Casino)
International strategy – Geography
•
•
•
Focus on largest regional markets
o Europe
o Asia
Focus on core countries within regions
o Ambition
• Market share 1st / 2nd / 3rd
o Investment
• M&A and JV opportunities
• Build brand through marketing investment
• Invest in building relations and a reputation with governments
worldwide
o Product
• Localise
Exclude:
o Africa
o South America
o Middle East
European market map
11.5
SlovakiaPoland
Easier
Italy
10.5
Russia
Belgium
Ireland
Nordics
Spain
Ease
of entry
9.5
Greece
Czech
Hungary
E. Europe
8.5
Turkey Portugal
France
7.5
Austria Netherlands
6.5
Germany
Harder
5.5
0
5,000,000,000
10,000,000,000
15,000,000,000
20,000,000,000
Size of Market (US$)
Size of bubble indicates gambling spend per person, Source: CIA website, 2006 GBGC
Christopher Bell
Chief Executive
Ladbrokes growth strategy
UK Retail
-
eGaming
International Telephone
Finance
-
Technology, product range, opportunities to
bet
UK – £500 Jackpot machines, winter evening
opening
Ireland – More shops, FOBT’s?
Product and service innovation
New geographies
Vietnam / Turkey / China / Russia / …others?
Italy
Steady growth in core business, maximise
High Roller opportunity
Cash positive, target gearing x3.5 – 3.75
Share buybacks / dividend / acquisition
Q&A’s
Notes
Notes
Notes
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Christopher Bell Chief Executive Investor Day – 4