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INVESTOR PRESENTATIONG2E 2019
1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This presentation contains statements that constitute forward-looking statements which involve risks and uncertainties, including such risks and uncertainties detailed in the
Annual Report on Form 10-K of PlayAGS, Inc. (“AGS” or the “Company”) filed with the U.S. Securities and Exchange Commission (the “SEC”) by the Company on March 5, 2019.
These statements include descriptions regarding the intent, belief or current expectations of AGS or its officers with respect to the consolidated results of operations and
financial condition, future events and plans of AGS. These statements can be recognized by the use of words such as "expects," "plans," "will," "estimates," "projects," or words of
similar meaning. Such forward-looking statements are not guarantees of future performance and actual results may differ from those in the forward-looking statements as a
result of various factors and assumptions. These statements are subject to risks, uncertainties, changes in circumstances, assumptions and other important factors, many of
which are outside management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. You are cautioned
not to place undue reliance on these forward looking statements, which are based on the current view of the management of AGS on future events. We undertake no
obligation to publicly update or revise any forward-looking statement contained in this presentation, whether as a result of new information, future events or otherwise, except
as required by law. In light of the risks, uncertainties and assumptions, the forward-looking events discussed in this presentation might not occur, and our actual results could
differ materially from those anticipated in these forward-looking statements.
This presentation also contains references to Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA, Free Cash Flow, total net debt leverage
ratio and adjusted total net debt leverage ratio which are non-GAAP financial measures. Management believes that there are non-GAAP measures and their related
measures are commonly reported by companies and widely used by investors as indicators of a company’s operating performance. Non-GAAP financial measures should be
considered only as a supplement to, and not as a superior measure to, financial measures prepared in accordance with GAAP. Please refer to slides 62 - 65 of this presentation
for a reconciliation of certain non-GAAP financial measures included in this presentation to the most directly comparable financial measure prepared in accordance with
GAAP.
Unless otherwise noted, information included herein is presented as of the dates indicated. This presentation is not complete and the information contained herein may
change at any time without notice. Except as required by applicable law, we do not have any responsibility to update the presentation to account for such changes.
Certain information in this presentation is based upon management forecasts and reflects prevailing conditions and management’s views as of this date, all of which are
subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information
available from public sources or which was provided to us by third parties. The information contained herein is subject to change, completion or amendment and we are not
under any obligation to keep you advised of such changes. We make no representation or warranty, express or implied, with respect to the accuracy, reasonableness or
completeness of any of the information contained herein, including, but not limited to, information obtained from third parties.
The information contained herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations.
2
AGSTEAMPRESENT DAVID LOPEZ
President & CEO
KIMO AKIONACFO
JULIA BOGUSLAWSKICMO & EVP of Investor
Relations
MATT REBACKEVP
VIC GALLOGeneral Counsel,
Secretary, & Compliance Officer
ANDREW BURKESVP of Slot Products
JOHN HEMBERGERSVP of Table Products
STEVE KOPJODirector of Investor
Relations
ADAM WHITEHURSTSVP of Slot Sales
3
AGENDA
▪ Brief AGS Overview
▪ G2E Product Lineup
▪ Updated Road to
$250M AEBITDA
▪ Financial Overview
▪ Q&A
AGENDA
4
BRIEF OVERVIEW
5
AGS COMPANY OVERVIEW
Table Products: $9mm+42% Y-o-Y
$295mm Revenue+18% Y-o-Y
46% Adj. EBITDA margin
$137mm Adj. EBITDA+8% Y-o-Y
LTM 6/30/19Revenue
70% RECURRING REVENUE
EGM: $281mm+18% Y-o-Y
Interactive: $5mm-29% Y-o-Y
CanadaMexico Philippines Brazil
RampingEstablished Early Entry
LTM 6/30/19
(1)
Prospective
Note: All figures as of LTM 6/30/19. Y-o-Y growth is from LTM 6/30/18 to LTM 6/30/19
(1) Denotes AGS acquired by funds managed by Apollo, not Apollo Global Management itself
FINANCIAL SNAPSHOT SEGMENT BREAKDOWNSIGNIFICANT EGM
WHITESPACE OPPORTUNITY
CORPORATE EVOLUTION
No Gaming
6
PEOPLE & PLACES
725+EMPLOYEES
AROUND THE GLOBER&D employees
represent ~35% of total
AGS employees
7
SINCE G2E 2018
OCTOBER 2018Dex S GLI approval
JANUARY 2019FEBRUARY 2019Acquisition of Integrity
Gaming Corp.
FEBRUARY 2019Surpassed 1,000
progressive installs
JULY 2019New Reno R&D studio
JUNE 20194th annual GameON
Customer Summit
MARCH 2019First AGS real-money
online gaming title
goes live
AUGUST 2019Orion Upright
launch
JANUARY 20192nd Sydney R&D studio
8
G2E EGM PRODUCT
LINEUP
9
SLANTPORTRAIT UPRIGHT RISE 49C
28 UNIQUE TITLES
13 GAME FAMILIES
ICON ALORA
G2E EGM PRODUCT LINEUP
10
8’6”
11
▪ Premium offering to drive leases
▪ Large Top Box format
▪ Q4 2019 launch into Class II
12
8’5”
13
▪ Portrait format, hottest category
▪ For sale, lease, or participation
▪ Q3 2020 launch
14
8’6”
15
▪ G2E sneak peek demonstrates
our ability to innovate
▪ Unique visual merchandising
display, reimagines traditional
slot signage
▪ Scheduled limited launch – H2
2020
16
ORION UPRIGHT AND
ORION SLANT
Dual Screen Offerings
17
ORION SLANT
▪ 62 titles available with 30+ titles coming within the next year
▪ Footprint of more than 2,200(3)
▪ 6 new titles launched at G2E 2019
LAUNCHED Q2 2018
PERFORMANCE▪ Currently the #1 ranked Slant cabinet(1)
1.67 HA(2)
(1) Eilers-Fantini Cabinet Performance Report – September 2019(2) Eilers-Fantini Game Performance Database – August 2019(3) Footprint includes sold and leased units as of 6/30/19
1.32 HA(2) 1.13 HA(2)
PRODUCT ROADMAP
18
ORION UPRIGHT
▪ 39 titles available with 30+ titles coming within the next year
▪ Provides operators with more options to build their AGS footprint
▪ 5 new titles launched at G2E 2019
LAUNCHED Q3 2019
TOP PERFORMING GAMES
PRODUCT ROADMAP
19
ORION PORTRAIT
LAUNCHED Q1 2017
PERFORMANCE▪ Ranked as the top 3 indexing Portrait cabinet (2)
1.89 HA(3) 1.59 HA(3) 1.52 HA(3)
(1) As of 6/30/19(2) Eilers-Fantini Cabinet Performance Report – September 2019(3) Eilers-Fantini Game Performance Report (Core – Overall) – September 2019
PRODUCT ROADMAP
▪ 29 titles available with 22+ titles coming within the next year
▪ Portrait cabinets currently represent ~65% of domestic ship share
▪ More 875 Class 3 units on lease(1)
▪ 7 new titles launched at G2E 2019
20
G2E TABLE PRODUCTS
LINEUP
21
NEW PROGRESSIVE PLATFORMS
▪ Multi-level progressive – supports up to 5 independent meters
▪ Optional “must-hit” jackpot feature
▪ New Operator Wide Area Progressive functionality with single and multi-site meter
▪ Seasonal themes, and scrolling messaging at the bottom
▪ Hardware includes light-up bet sensors, double-sided display, dealer interface
touchscreen
▪ Capable of running progressives for blackjack, baccarat, poker derivatives, and
more.
▪ Next-generation Bonus Spin
▪ Supports up to 3 meters and includes the optional must hit jackpot feature
▪ Can link all table games within a casino, providing faster-incrementing and larger
progressive jackpots
▪ Three eye-catching, player-attracting wheels
▪ Community driven wheel spins that consistently deliver multiple winners at the
table
▪ Optional casino-configurable non-cash prizes
STAX PROGRESSIVE 2.0
BONUS SPIN XTREME
22
CARD SHUFFLERS
▪ Shuffle time of less than 36 seconds
▪ Fits in existing cutouts on poker tables
▪ Designed with less moving parts and rollers to reduce
service needs and cleaning intervals
▪ 166 installations in 11 states(1)
▪ Launching H2 2020
▪ Engineered for specialty single-deck table games
▪ Large touchscreen display for game selection
▪ Card recognition for enhanced game protection
▪ Fits in existing cutouts on specialty tables
SINGLE-DECK POKER SHUFFLER - Dex S
SINGLE-DECK HAND FORMING SHUFFLER - Pax S
(1) As of 9/30/19
23
TABLE AND PIT SIGNAGE
▪ Nearly 12 feet featuring
three 55-inch Samsung
monitors
▪ Designed to showcase
progressive meters on up
to three different games
▪ 29” double-sided display▪ Customizable avatar▪ Adjustable min/max limits▪ Feature-rich roulette trends▪ Looping marketing video content▪ Over 78 installations in 10 different
jurisdictions
ACOT
TABLE SIGNAGE
PIT SIGNAGE
▪ Secures and protects
chip inventory
▪ Fits existing table tray
cutouts
▪ Familiar no-peek
functionality
24
PREMIUM TABLE GAMES
25
G2E INTERACTIVE
PRODUCT LINEUP
26
INTERACTIVE - iGaming
▪ Robust, scalable Remote Gaming Server
▪ Single integration can deliver content
from wide network of game providers
▪ Recently live in New Jersey
RMG PLATFORM
27
ROADMAP TO $250M
AEBITDA
28
ROAD TO $250M AEBITDA
ROAD TO $250M AEBITDA IS AN ASPIRATIONAL GOAL SET BY THE COMPANY TO ACHIEVE $250M OF ADJUSTED EBITDA
$55-$75
$15-$20
$5-$10
$10-$15 $230-$270
$45-$70
($ in mm)
EG
M &
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Tuc
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M&
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AEB
ITD
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20
19
AEB
ITD
A
GU
IDA
NC
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$145 - $150
Int’l $10-$15
29
EGM SEGMENT
$55-$75mmContinued aggressive R&D investment & recruiting
Target 5% domestic market share
Domestic EGM Sales
Gaming operations revenue
Note: Domestic markets refer to US and Canada
($ in mm)
1
2
3
4
Increase international footprint (Mostly recurring
revenue)
Optimize international current footprint
5
6
Int’l $10-$15
30
EGM R&D INVESTMENT
▪Opened two new design studios in 2019 (Sydney #2 and Reno)
▪More than 35% of AGS employees are R&D focused
▪ Targeting to release multiple cabinets and nearly 60 titles in the upcoming year
▪All 6 studios are fully staffed and will generate commercial content in 2020
• Atlanta
• Sydney
$14.4
$21.3
$25.7
$31.7 $32.8
2015 2016 2017 2018 LTM
6/30/2019R&D Expense
R&D Expense
145 158 174218
254
2015 2016 2017 2018 LTM 6/30/2019
R&D Headcount
• Reno
• Austin
12%
13%
12%
11% 11%
R&D Expense as a % of Revenue
($ in mm)
31
1.4X
1.3X
1.1X1.0X 1.0X 1.0X
0.9X
0.9X0.8X
Pe
rfo
rma
nc
e o
ve
r zo
ne
av
era
ge
TOP 25 CORE
GAME @ 1.89 HA(2)
TOP 25 CORE
GAME @ 1.59 HA(2)
RECENT EGM PERFORMANCEGAME PERFORMANCE OVERVIEW
(1) Eilers-Fantini Game Performance Report (Core – Overall) – September 2019(2) Eilers-Fantini Game Performance Report – September 2019(3) Eilers-Fantini Game Performance Report – September 2019 (suppliers with more than 100 games)
Top Indexing Suppliers – Owned (Domestic Performance)(3)
TOP INDEXING SUPPLIER OVERALL(1)
TOP 25 CORE
GAME @ 1.52 HA(2)
32
EGM GROWTHCONTINUED AGGRESSIVE R&D INVESTING AND RECRUITING
Pricing Model Premium Lease Only Sale & Lease Sale & Lease Sale & Lease
Year Introduced 2014 2016 2017 2018
Big Red ICON Orion Portrait Orion Slant
33
EGM GROWTHEXCITING NEW PRODUCTS IN THE PIPELINE
Pricing Model Sale & Lease Premium Lease Offering Sale & Lease Premium Lease Offering
Target Introduction Q3 2019 Q4 2019 Q3 2020 H2 2020
Orion Rise Orion 49C StarwallOrion Upright
34
TARGET 5% MARKET SHARE (US AND CANADA)
Note: Market share is calculated based on the # of units on participation plus the cumulative amount of units sold to date and estimated to remain on casino floors(1) Per Eilers& Krejcik - Slot & Table Count - 2Q19(2) Other Early Entry jurisdictions include AR, AZ, CT, DE, ID, IA, IL, KS, MD, MA, MN, ND, NE, NJ, NC, OR, SD, WA, WI, WY and the Canadian provinces of British Columbia, Manitoba,
New Brunswick, Nova Scotia, Prince Edward Island, and Saskatchewan. (3) AGS is not currently licensed in U.S. states of AK, CO, KY, ME, MO, RI, VA, WV and the Canadian province of Newfoundland & Labrador. (4) Eilers-Fantini Quarterly Slot Survey
25KINCREMENTAL
SOLD UNITS
1-2KINCREMENTAL RECURRING
REVENUEUNITS
CURRENT2.9% MARKET
SHARE
0.1-0.2%MARKET SHARE
2.5%MARKET SHARE
Market Stage JurisdictionEstimated TotalUnits in State(1)
AGS Estimated Current Market Share
Established
/ Class II
Alabama 6,435 44.0%
Texas 3,751 37.9%
Oklahoma 75,100 13.7%
Ramping
Florida 23,681 11.0%
Montana 17,659 2.9%
California 74,714 2.8%
Early Entry
Indiana 19,820 1.8%
Ontario - CAN 24,777 1.6%
New Mexico 20,055 1.5%
Mississippi 28,964 1.4%
Michigan 30,961 1.1%
New York 35,274 1.0%
Louisiana 41,239 1.0%
Nevada 160,573 0.9%
Alberta - CAN 20,784 0.8%
Ohio 18,882 0.4%
Pennsylvania 24,869 0.4%
Quebec - CAN 17,013 0.0%
Other(2) 298,363 1.7%
Prospective Other(3) 56,241 0.0%
Total 999,155 2.9%
INCREMENTAL SHARE BREAKDOWN
▪ 1.9% market share 2 years ago
▪ Achieved approximately 6% ship share
in the LTM period ending Q2 (4)
35
Slant – 5%
Upright – 15%
Portrait – 65%
DOMESTIC SHIP SHARE BY CABINET TYPE
SHIP SHARE(2)
(1) Approximated recent domestic ship share
Orion Portrait
Orion 49C
Orion Slant
Orion Upright
ICON
Multiple cabinets addressing 85%
of the current market demand
36
EGM - OKLAHOMA
OVERVIEW
37
OKLAHOMA OVERVIEW
$18.00
$20.00
$22.00
Q1
'16
Q2
'16
Q3
'16
Q4
'16
Q1
'17
Q2
'17
Q3
'17
Q4
'17
Q1
'18
Q2
'18
Q3
'18
Q4
'18
Q1
'19
Q2
'19
AGS OKLAHOMA RPD(3)
Bluberi 3,418
ICON 1,931
Orion Portrait 1,112
Orion Slant 743
Integrity 2,300
Other 792
TOTAL 10,296
(1) Normalized for the revenue contribution of revenue from Rocket and Integrity
(2) 2016 Oklahoma Total Annual Casino Revenue
(3) Normalized for the impact of Integrity units.
AGS OKLAHOMA INSTALLED BASE
$100.9 $112.6$133.0 $132.8
$43.7$45.7
$54.8 $59.5
2016 2017 2018 LTM 6/30/2019
Oklahoma Gaming Operations Revenue
Non-Oklahoma Gaming Operations Revenue
$144.5
$158.3
$187.8 $192.3
AGS Gaming Operations Revenue
Oklahoma total revenue
of ~$4.4B(2)
38
OKLAHOMA UPDATE
Product Rollout
- Placed ~800 units in Q4 ’18
- Non optimal cabinet mix
- Inefficient title selection
- Focus on optimizing existing footprint
- Centralized decision making
- Strict product rollout execution
Footprint Management
- Passive management of positions
- Underutilization of analytics
- Decentralized oversight
- Reorganized and beefed up gaming operations and analytics team
- More frequent onsite visibility
Sales and Marketing
Organization
- Shift in market
- Growth outpaced leadership
- Limited marketing presence
- New Oklahoma leadership
- New SVP of Sales
- Strategic and targeted marketing campaigns
Previous State New Approach
39
OKLAHOMA UPDATE – EARLY INDICATORS
▪ Touching 1,000 – 1,200 units by the end of 2019 with 1,000 units targeted in H1 2020
• 700 theme changes to date
✓ EX: Overall, resulted in a nearly 50% yield increase
✓ EX: Initial 200 theme changes at premier property, primarily on Slant cabinets,
resulted in a 70% yield increase
• Nearly 100 units of zone changes
▪ Through increasing our resources, we have enhanced the depth and quality of data analysis
▪ Through leveraging long standing relationships, we now have detailed daily performance
reports on ~60% of our Oklahoma installed base
40
EGM DOMESTIC RECURING REVENUE GROWTHGROWING DOMESTIC RECURRING REVENUE
NEW AND EXISTING OFFERINGS TO DRIVE LEASES & RPD LIFT
▪ Great line-up of new premium form factors
▪ ~ 70k domestic premium lease games
▪ Key target US jurisdictions include CA, NV, FL, & MI
▪ Focus on improving yields through strategic optimization with existing and new cabinets
Incremental Units RPD(2)
Annual revenue ($ in mm)
Annual AEBITDA ($ in mm)(3)
100 $50 $1.8 $1.5
Incremental Premium Unit Assumptions
(1) Represents U.S. and Canada market for Premium Leased EGMs
(2) Illustrative RPD for premium leased products
(3) Incremental EGM Adjusted AEBITDA of 80%
41
EGM - INTERNATIONAL GROWTHGROW INTERNATIONAL FOOTPRINT (MOSTLY RECURRING REVENUE)
International
Mexico
Philippines
▪ Initial ALORA units currently installed and live
▪ Monitoring initial performance
▪ ~70,000 unit market size
▪ Currently represent ~10% of the Mexico EGM market
▪ ~88,000 unit market size
▪ Low cost optimization of legacy domestic units
Imm
ed
iate
Up
sid
e
▪ Argentina, Peru and Asia represent future opportunities for growth
Brazil
Fu
rth
er
Up
sid
e
▪ Pending legislation could allow up to 500,000+ video bingo machines
▪ Targeting 8,000-10,000 recurring revenue video bingo machines
42
ROAD TO $250M AEBITDA
$55-$75
$15-$20
$5-$10
$10-$15 $230-$270
$45-$70
($ in mm)
EG
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AEB
ITD
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20
19
AEB
ITD
A
GU
IDA
NC
E
$145 - $150
Int’l $10-$15
ROAD TO $250M AEBITDA IS AN ASPIRATIONAL GOAL SET BY THE COMPANY TO ACHIEVE $250M OF ADJUSTED EBITDA
43
TABLE PRODUCTS SEGMENT
$15-$20mm
Industry-leading progressive platforms drive
meaningful growth
Successful launch of shuffler business
Increased placements of high-margin premium
games and side bets
“Disruptors” in table equipment market
($ in mm)
1
2
3
4
44
▪ Progressives drive growth with multiple platforms• 775(1) placements of Super 4, Royal 9, Blackjack Match• Bonus Spin, currently 262(1) units placed
• Launching Bonus Spin Xtreme in early 2020▪ Significant upside with a goal of increasing installed base +1,000
incremental units over 3-4 year period
TABLE PRODUCTS GROWTH - PROGRESSIVESPROGRESSIVES AND SHUFFLERS – MOST SIGNIFICANT GROWTH DRIVERS
MULTIPLE PROGRESSIVES PLATFORMS DRIVE MEANINGFUL GROWTH
Estimated Market Size(2)
AGS Estimated Coverage
Blackjack Tables 13,000 7.3%
Baccarat, Craps, Roulette & Other Tables 5,000 2.4%
Incremental Units ALP
Annual revenue ($ in 000s)
Incremental Market Share(2)
100 $400 - $500 $480 - $600 0.8% - 2.0%(3)
Table Products Progressive Installed Base
Incremental Lease Assumptions
(1) As of June 2019
(2) Represents North America market
(3) Represents hypothetical market share increase of 100 incremental units for Blackjack tables and Baccarat, Craps, Roulette & Other tables, respectively.
62
627
947
1,090
2016 2017 2018 6/30/19
45
TABLE PRODUCTS GROWTH - SHUFFLERSPROGRESSIVES AND SHUFFLERS – MOST SIGNIFICANT GROWTH DRIVERS
▪ Currently have 166(1) Dex S shufflers in the field
▪ Goal to obtain 10% of the
poker table market
Estimated Market Size(2)
Poker Tables – Dex S 7,000
Premium Tables – Pax S 5,000
▪ Our new single-deck, hand-forming shuffler, Pax S – to be released in H2 2020
▪ Goal to obtain 10% of the premium table market
Incremental Units ALP
Annual revenue ($ in 000s)
Incremental Market Share(3)
100 $350 - $450 $420 - $540 1.4% - 2.0%(3)
Incremental Lease Assumptions
(1) As 0f 9/30/19
(2) Represents North America market
(3) Represents hypothetical market share increase of 100 incremental units for Premium tables and Poker tables, respectively
46
TABLE PRODUCTS GROWTH - SIDE BETS, PREMIUM GAMES & SIGNAGETABLE GAMES AND SIGNAGE PRESENT ADDITIONAL UPSIDE
▪ Have more than 2,000 side bets units in the field(1)
▪ Driven by our hit titles such as Buster Blackjack, and In Bet/Between
▪ Scheduled to release 2 games in the upcoming year
▪ Currently have more than 160 premium units in the field(1)
▪ Driven by games like Criss Cross Poker
▪ Scheduled to release 12 games in the upcoming year
Estimated Market Size(2)
AGS Estimated Coverage
Blackjack Tables 13,000 13.9%
Estimated Market Size(2)
AGS Estimated Coverage
Premium Tables 5,000 3.3%
Incremental Units ALP
Annual revenue ($ in 000s)
Incremental Market Share(3)
100 $75 - $125 $90 - $150 0.8%
Incremental Lease Assumptions
Incremental Units ALP
Annual revenue ($ in 000s)
Incremental Market Share(3)
100 $500 - $800 $600 - $960 2.0%
Incremental Lease Assumptions
SIDE BETS
PREMIUM GAMES
TABLE EQUIPMENT
▪ Diversified offerings with Table Signage, Pit Signage and new ACOT chip tray
▪ Potential to be a disruptor in this category
(1) As of June 2019
(2) Represents North America market
(3) Represents hypothetical market share increase of 100 incremental units for Blackjack tables and Premium tables, respectively
47
ROAD TO $250M AEBITDA
$55-$75
$15-$20
$5-$10
$10-$15 $230-$270
$45-$70
($ in mm)
EG
M &
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M&
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AEB
ITD
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20
19
AEB
ITD
A
GU
IDA
NC
E
$145 - $150
Int’l $10-$15
ROAD TO $250M AEBITDA IS AN ASPIRATIONAL GOAL SET BY THE COMPANY TO ACHIEVE $250M OF ADJUSTED EBITDA
48
INTERACTIVE SEGMENT
$5-$10mmReal-Money Gaming presents scalable worldwide
growth opportunities
Growth of social B2B business ($ in mm)
1
2
49
REAL-MONEY GAMING
▪ Live with 12 operators
▪ Games are offered by 19 different suppliers
▪ AGS Top Titles:
UNITED KINGDOM
ONLINE CASINO
MARKET SIZE OF~$2.5B
NEW JERSEY▪ Recently live with Rush Street Interactive
▪ AGS Top Titles:
ONLINE CASINO
MARKET SIZE OF
~$275M
▪ RMG aggregation platform enables AGS to leverage proven content for worldwide distribution in regulated markets like UK, New Jersey, Pennsylvania, Nordics, Italy, Spain, Romania, and Columbia
▪ Approximately 95% of our RMG revenue is from UK and Europe▪ AGS content library expected to more than double in 2020▪ Planning to add proprietary AGS table games
50
ROAD TO $250M AEBITDA
$55-$75
$15-$20
$5-$10
$10-$15 $230-$270
$45-$70
($ in mm)
EG
M &
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AEB
ITD
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20
19
AEB
ITD
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GU
IDA
NC
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$145 - $150
Int’l $10-$15
ROAD TO $250M AEBITDA IS AN ASPIRATIONAL GOAL SET BY THE COMPANY TO ACHIEVE $250M OF ADJUSTED EBITDA
51
TUCK-IN M&A
$10-$15mm Successful integration and growth of previous tuck-
in acquisitions
Identifying new tuck-in opportunities in current and
adjacent product categories and markets($ in mm)
1
2
52
ROAD TO $250M AEBITDA
$55-$75
$15-$20
$5-$10
$10-$15 $230-$270
$45-$70
($ in mm)
EG
M &
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AEB
ITD
A
20
19
AEB
ITD
A
GU
IDA
NC
E
$145 - $150
Int’l $10-$15
ROAD TO $250M AEBITDA IS AN ASPIRATIONAL GOAL SET BY THE COMPANY TO ACHIEVE $250M OF ADJUSTED EBITDA
53
FINANCIAL OVERVIEW
54
Q2 2019 & LTM FINANCIAL PERFORMANCE HIGHLIGHTS
Note: Adjusted EBITDA allows us to add back certain non-cash charges that are deducted in calculating net income and to deduct certain gains that are included in
calculating net income. However, these expenses and gains vary greatly, and are difficult to predict. They can represent the effect of long-term strategies as opposed to
short-term results. In addition, in the case of charges or expenses, these items can represent the reduction of cash that could be used for other corporate purposes.
Note: Please refer to appendix for Net Income to Adjusted EBITDA reconciliation
REVENUE ADJUSTED EBITDA
$36.9 $35.5
$36.6 $35.7
Q2 '18 Q2 '19
$238.1
$281.1
$6.2
$8.8
$7.5
$5.3
180
230
280
LTM 6/30/2018 LTM 6/30/2019
EGM Table Products Interactive
$69.3
$71.0
$1.8
$2.4$1.7
$1.1
Q2 2018 Q2 2019
EGM Table Products Interactive
$127.3 $138.5
$126.9$137.1
LTM 6/30/18 LTM 6/30/19
($ in mm) ($ in mm)
Tables: $0.2
Interactive: ($0.5)
Tables: $2.0
Interactive: ($3.3)
Recurring
Revenue
$206.1
Recurring
Revenue
$53.6
Tables: $0.8
Interactive: ($0.6)
Tables: $0.1
Interactive: ($0.4)
$72.8
$74.5
$295.2
$251.8
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FY 2019 OUTLOOK
($ in mm) FY 2018 2019 Guidance 2019 Growth %
Adjusted EBITDA1 $136.2 $145 - $150 6% - 10%
Capex $66.2 $65 - $69 (2%) - 4%
1) Please refer to appendix for Adjusted EBITDA reconciliation. We have not provided a reconciliation of forward looking total Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income (loss), due primarily to the variability and difficulty in making accurate forecasts and projections of the variable and individual adjustments for a reconciliation to Net income (loss), as not all of the information necessary for a quantitative reconciliation is available to us without unreasonable effort. We expect that the main components of Net income (loss) for fiscal year 2019 shall consist of operating expenses, interest expenses as well as other expenses (income) and income tax expenses, which are inherently difficult to forecast and quantify with reasonable accuracy without unreasonable efforts. The amounts associated with these items have historically and may continue to vary significantly from quarter to quarter and material changes to these items could have a significant effect on our future GAAP results.
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$32.9
$48.6
$54.6
$1.3
$1.2
$1.1
$6.5
$7.7
$10.5
2016 2017 2018 2019
Purchases of Property and Equipment Purchase of intangible assets Software development and other expendtitures
$40.7
$57.5
$66.2 $65 - $69
CONSOLIDATED CAPEX
($ in mm)
(1) (2) (3)
(1) Purchases of property plant and equipment includes growth capex relating to new EGM lease placements, optimization of the EGM installed base, maintenance capex as well as capitalized corporate expenses.
(2) Purchase of intangible assets includes cash paid for placement fee arrangements securing floor space on long-term contracts(3) Software development and other expenditures is driven primarily by capitalized R&D costs related to new product development
$12 - $13
$3 - $4
$50 - $52
Optimized
~1,500 units
Optimized ~1,600 units
Optimized ~1,850 units
Plan to optimize ~1,600 units
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$(6.2)
$(10.7)
$17.0
$20 - $25
2016 2017 2018 2019
GROWING FREE CASH FLOW
FREE CASH FLOW
Note: 2019 represents estimated free cash flow for the year ended 12/31/2019
Note: Please refer to appendix for Free Cash Flow reconciliation. We have not provided a reconciliation of forward looking Free Cash Flow to the most directly comparable GAAP financial
measure, Net cash provided by operating activities, due primarily to the variability and difficulty in making accurate forecasts and projections of the variable and individual adjustments for a
reconciliation to Net cash provided by operating activities, as not all of the information necessary for a quantitative reconciliation is available to us without unreasonable effort. We expect
that the main components of Net cash provided by operating activities for fiscal year 2019 shall consist of changes in assets and liabilities that relate to operations, which are inherently
difficult to forecast and quantify with reasonable accuracy without unreasonable efforts. The amounts associated with these items have historically and may continue to vary significantly
from quarter to quarter and material changes to these items could have a significant effect on our future GAAP results.
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FREE CASH FLOW SUPPORTS GROWTH WITH ATTRACTIVE ROI
STRONG FREE
CASH FLOW
SUPPORTS
GROWTH
WITH
ATTRACTIVE
ROI
New Placement (Premium)
New Placement (Core) Optimized Unit
Average Cost per Unit $10,000 $10,000 $10,000
Average RPD Increase(1) $50.00 $25.00 $8.00 - $10.00
Annual Revenue ( in 000’s) $18,250 $9,125 ~$3,000
Payback (Years) < 1 < 2 ~ 3
▪ Reinvestment in high ROI growth
▪ New premium lease products allow for opportunity for more attractive returns
(1) Illustrative RPD for premium and core placements and incremental lift from optimized units
Payback Example
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12/31/2018 6/30/2019 Rate Maturity
Capitalization
Cash $71 $18
$30 million existing revolver – – L+5.50% 06/06/22
First lien term loan 538 535 L+3.50% 02/15/24
Other 1 1
Total first lien debt $539 $536
Total debt $539 $536
Total net debt $468 $518
LTM Adjusted EBITDA $136 $137
Net leverage 3.4x 3.8x
Integrity LTM Adjusted EBITDA – $7
Post-Integrity LTM Adjusted EBITDA(1) $136 $144
Adjusted total net debt leverage ratio(1) 3.4x 3.6x
CAPITAL STRUCTURE OVERVIEW
(1) Includes the trailing twelve month estimated impact of significant acquisitions' Adjusted EBITDA (Integrity), adjusted for the time period for which they are included in AGS's results.
CAPITALIZATION
▪On September 4, 2019, AGS repriced its $30 million revolving credit facility by 200 basis points to LIBOR plus 350 basis points with additional 25 bps reduction upon a Moody’s upgrade
($ in mm)
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CAPITAL STRUCTURE OVERVIEW
(1) Includes the trailing twelve month estimated impact of significant acquisitions' Adjusted EBITDA (Integrity), adjusted for the time period for which they are included in AGS's results.
6.5x
6.1x
3.4x3.6x
2016 2017 2018 LTM 6/30/19
ADJUSTED NET LEVERAGE(1)
($ in mm)
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APPENDIX
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TOTAL ADJUSTED EBITDA RECONCILIATION
▪ Write downs and other include items related to loss on disposal or impairment of long lived assets, and fair value adjustments to contingent consideration
▪ Loss on extinguishment and modification of debt primarily relates to the refinancing of long-term debt, in which deferred loan costs and discounts related to old senior secured credit facilities were written off
• Other adjustments are primarily composed of professional fees incurred for projects, corporate and public filing compliance, contract cancellation fees and other transaction costs deemed to be non-operating in nature
▪ Other non-cash charges are costs related to non-cash charges and losses on the disposition of assets, non-cash charges on capitalized installation and delivery, which primarily includes the costs to acquire contracts that are expensed over the estimated life of each contract and non-cash charges related to accretion of contract rights under development agreements
▪ New jurisdiction and regulatory license costs relate primarily to one-time non-operating costs incurred to obtain new licenses and develop products for new jurisdictions
▪ Legal & litigation expenses include payments to law firms and settlements for matters that are outside the normal course of business
▪ Acquisition & integration costs include restructuring and severance and are related to costs incurred after the purchase of businesses, such as the acquisitions of Rocket and Gameiom, to integrate operations
▪ Non-cash stock compensation includes non-cash compensation expense related to grants of options, restricted stock, and other equity awards
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($ in mm)
Adj. EBITDA reconciliation Q1 Q2 Q3 Q4 2017
Net loss attributable to PlayAGS, Inc. ($12.4) ($20.1) ($4.1) ($8.5) ($45.1)
Income tax expense (benefit) 2.2 1.3 1.1 (6.5) (1.9)
Depreciation and amortization 18.5 18.2 16.9 18.1 71.6
Other (income) expense (2.8) (1.5) (0.5) 1.9 (2.9)
Interest income (0.0) (0.0) (0.0) (0.0) (0.1)
Interest expense 15.2 14.6 12.7 13.1 55.5
Write downs and other 0.2 1.9 0.5 1.8 4.5
Loss on extinguishment and modification of debt – 8.1 – 0.9 9.0
Other adjustments 0.6 0.9 0.5 0.8 2.9
Other non-cash charges 2.1 1.8 1.6 2.3 7.8
New jurisdiction and regulatory licensing costs 0.2 0.5 0.6 0.8 2.1
Legal & litigation expenses including settlement payments 0.4 0.2 0.2 (0.2) 0.5
Acquisition & integration related costs 0.6 0.2 0.1 2.0 2.9
Non-cash stock compensation – – – – –
Adjusted EBITDA $24.9 $26.1 $29.4 $26.4 $106.8
($ in mm)
Adj. EBITDA reconciliation Q1 Q2 Q3 Q4 2018
Net (loss) income attributable to PlayAGS, Inc. ($9.5) ($5.3) $4.3 ($10.3) ($20.8)
Income tax (benefit) expense (12.4) 7.0 (3.5) 0.6 (8.4)
Depreciation and amortization 19.3 19.5 19.0 19.8 77.5
Other expense (income) 9.2 0.5 0.4 0.4 10.5
Interest income (0.1) (0.0) (0.1) (0.0) (0.2)
Interest expense 10.4 8.9 9.0 9.4 37.6
Write downs and other 1.6 1.0 0.7 5.5 8.8
Loss on extinguishment and modification of debt 4.6 – – 2.0 6.6
Other adjustments 0.4 0.9 0.9 0.2 2.4
Other non-cash charges 1.6 1.6 1.7 1.7 6.6
New jurisdiction and regulatory licensing costs – – – – –
Legal & litigation expenses including settlement payments – 0.8 (0.0) 0.2 1.0
Acquisition & integration related costs 1.2 1.2 0.7 0.5 3.6
Non-cash stock compensation 8.2 0.5 0.5 1.8 10.9
Adjusted EBITDA $34.5 $36.6 $33.6 $31.5 $136.2
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TOTAL ADJUSTED EBITDA RECONCILIATION
▪ Write downs and other include items related to loss on disposal or impairment of long lived assets, and fair value adjustments to contingent consideration
▪ Loss on extinguishment and modification of debt primarily relates to the refinancing of long-term debt, in which deferred loan costs and discounts related to old senior secured credit facilities were written off
• Other adjustments are primarily composed of professional fees incurred for projects, corporate and public filing compliance, contract cancellation fees and other transaction costs deemed to be non-operating in nature
▪ Other non-cash charges are costs related to non-cash charges and losses on the disposition of assets, non-cash charges on capitalized installation and delivery, which primarily includes the costs to acquire contracts that are expensed over the estimated life of each contract and non-cash charges related to accretion of contract rights under development agreements
▪ New jurisdiction and regulatory license costs relate primarily to one-time non-operating costs incurred to obtain new licenses and develop products for new jurisdictions
▪ Legal & litigation expenses include payments to law firms and settlements for matters that are outside the normal course of business
▪ Acquisition & integration costs include restructuring and severance and are related to costs incurred after the purchase of businesses, such as the acquisitions of Rocket and Gameiom, to integrate operations
▪ Non-cash stock compensation includes non-cash compensation expense related to grants of options, restricted stock, and other equity awards
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($ in mm) LTM
Adj. EBITDA reconciliation Q3 '17 Q4 '17 Q1 '18 Q2 '18 6/30/2018
Net loss ($4.1) ($8.5) ($9.5) ($5.3) ($27.5)
Income tax expense (benefit) 1.1 (6.5) (12.4) 7.0 (10.8)
Depreciation and amortization 16.9 18.1 19.3 19.5 73.8
Other (income) expense (0.5) 1.9 9.2 0.5 11.1
Interest income (0.0) (0.0) (0.1) (0.0) (0.1)
Interest expense 12.7 13.1 10.4 8.9 45.1
Write downs and other 0.5 1.8 1.6 1.0 4.9
Loss on extinguishment and modification of debt – 0.9 4.6 – 5.5
Other adjustments 0.5 0.8 0.4 0.9 2.6
Other non-cash charges 1.6 2.3 1.6 1.6 7.1
New jurisdiction and regulatory licensing costs 0.6 0.8 – – 1.3
Legal & litigation expenses including settlement payments 0.2 (0.2) – 0.8 0.8
Acquisition & integration related costs 0.1 2.0 1.2 1.2 4.5
Non-cash stock compensation – – 8.2 0.5 8.6
Adjusted EBITDA $29.4 $26.4 $34.5 $36.6 $126.9
($ in mm) LTM
Adj. EBITDA reconciliation Q3 '18 Q4 '18 Q1 '19 Q2 '19 6/30/19
Net (loss) income $4.3 ($10.3) ($0.1) ($7.6) ($13.6)
Income tax (benefit) expense (3.5) 0.6 (5.8) (0.1) (8.8)
Depreciation and amortization 19.0 19.8 21.5 23.7 83.9
Other expense (income) 0.4 0.4 5.3 (0.0) 6.0
Interest income (0.1) (0.0) (0.0) (0.0) (0.2)
Interest expense 9.0 9.4 8.9 9.6 36.7
Write downs and other 0.7 5.5 1.0 5.0 12.2
Loss on extinguishment and modification of debt – 2.0 – – 2.0
Other adjustments 0.9 0.2 0.3 0.4 1.8
Other non-cash charges 1.7 1.7 2.0 2.2 7.7
New jurisdiction and regulatory licensing costs – – – – –
Legal & litigation expenses including settlement payments (0.0) 0.2 – 0.0 0.2
Acquisition & integration related costs 0.7 0.5 2.0 0.4 3.6
Non-cash stock compensation 0.5 1.8 1.2 2.2 5.7
Adjusted EBITDA $33.6 $31.5 $36.3 $35.7 $137.1
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FREE CASH FLOW RECONCILIATION
($ in mm)2016 2017 2018
Free Cash Flow Reconciliation
Net cash provided by operating activities 34.5$ 44.0$ 45.5$
Purchase of intangible assets (1.3) (1.2) (1.1)
Software development and other expenditures (6.5) (7.6) (10.5)
Purchases of property and equipment (32.9) (48.6) (54.6)
Payments-in-kind interest payments - 2.7 37.6 Free Cash Flow (6.2)$ (10.7)$ 16.9$
▪ Purchase of intangible assets includes cash paid for placement fee arrangements securing floor space on long-term contracts
▪ Software development and other expenditures is driven primarily by capitalized R&D costs related to new product development
▪ Purchases of property plant and equipment includes growth capex relating to new EGM lease placements, optimization of the EGM installed base, maintenance capex as well as capitalized corporate expenses.
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NET LEVERAGE RECONCILIATION
12/31/2016 12/31/2017 12/31/2018 LTM 6/30/2019
Total debt $572 $668 $539 $536
Less: Cash and cash equivalents 18 19 71 18
Net Debt $554 $649 $468 $518
LTM Adjusted EBITDA $85 $107 $136 $137
Total net debt leverage ratio 6.5x 6.1x 3.4x 3.8x
Integrity LTM Adjusted EBITDA $- $- $- $7
Post-Integrity LTM Adjusted EBITDA(1) $85 $107 $136 $144
Adjusted total net debt leverage ratio(1) 6.5x 6.1x 3.4x 3.6x
NET LEVERAGE RECONCILIATION
($ in mm)
(1) Includes the trailing twelve month estimated impact of significant acquisitions' Adjusted EBITDA (Integrity), adjusted for the time period for which they are included in AGS's results.
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