Q&A: Mor Weizer on offloading non-core assets and expansion into Latam

Playtech CEO Mor Weizer remains optimistic despite his company reporting a 22% year-on-year drop in H1 revenue to €564m (£513m).

B2B revenue fell 12% while B2C operations plummeted by 41%, but Weizer insists Playtech has successfully navigated the choppy waters of Covid-19.

Below, Weizer discusses the supplier’s US and Latam expansion plans, as well as a potential sale of non-core assets including TradeTech– even after revenue soared 123% in the financial trading offshoot.

Mor Weizer, chief executive officer of Playtech

EGR Intel: Why wasn’t Playtech buoyed by the strong online gaming performance we have seen at most gambling companies during Q2 and H1?

Mor Weizer (MW): I think this is not true and I think that fortunately for Playtech we have a multi-product offering to provide solutions across retail and online.

From a B2B perspective, the online part of the business was doing extremely well and outperformed many in the market.

From a B2C perspective, our exposure to Snaitech meant that when Italy was severely impacted by the pandemic, retail was closed. We couldn’t, in light of the relative size of online, overcompensate for the loss of retail.

If you think about online, we did extremely well during the pandemic and we can now enjoy the investment we put in before, and during, the pandemic going forward.

EGR Intel: What does the expansion into Latam involve? How has your position in that market changed since H2 of 2019?

MW: We are in the process of establishing ourselves in Guatemala and Costa Rica where we partnered with the sole and exclusive licence holder in each country. We are also extending beyond that into other territories in Latin America.

I believe Latin America will become one of the fastest growing markets in the world. I believe it is an immediate, incremental opportunity for us and we have invested and will continue to invest a lot of time and effort into Latin America.

EGR Intel: Playtech finances were boosted by strong performance in its TradeTech segment during the coronavirus. Why is the business looking to sell a stand-out performer?

MW: I don’t feel under any pressure to sell the business. Obviously, it performed strongly during the pandemic and during the first nine months of the year.

The reason we are in discussions with a number of parties is driven by the fact that parties engage with us, rather than us engaging with others.

A number of parties, some of which are familiar with the space, came to the conclusion that following its performance, TradeTech is an exciting business and they saw the fact we have referred to it as a non-core asset.

We believe it is our duty as the board that we should consider and have such discussions with interested parties. I wouldn’t jump to any conclusions; it may be the case that the offers are not high enough or we may want to keep this business in light of its growth potential.

EGR Intel: Additionally, there is an ongoing review of certain assets. Which assets would these be in addition to TradeTech and what are the plans for them?

MW: There are a number of assets that we have been looking at along with TradeTech. One of these is Happy Bet. It is a B2C franchisee-based model similar to Snaitech in Italy but operates in Germany and Austria.

We came to the conclusion that in the light of the changing dynamics of the German market and the changing regulatory environment, this is actually a strategic asset for us to hold. We believe that it will become very attractive for a number of operators in light of the new regulations in Germany.

However, given the fact that it was underperforming, we made certain changes internally. The Snaitech management team will be taking the lead on this business going forward.

Another is the casual gaming division which has two elements within it, one B2B and one B2C. The B2C requires a lot of marketing investment and accordingly was loss making, while the B2B was profitable.

During the pandemic we managed to sell the loss-making B2C element of the business to a US company called Tilting Point. At this point in time we are left with the B2B part of the business that is still profitable, but the intention is to sell this part of the business so we can focus on the core business of Playtech being B2B and B2C gambling.

EGR Intel: Finally, what are your hopes and expectations for H2 2020?

MW: One thing we put a lot of effort into is the US so what I would like to achieve is to complete the casino facility project we have in New Jersey, as well as signing up more licensees in the state. We have also applied to a number of additional states so my expectation is that we can sign up more customers in the US.

I also expect to make more progress in Latin America. We will launch later this year in Costa Rica and Guatemala, as well as push forward in Colombia. We may also potentially deliver another structured agreement in Latin America before the year ends.

Beyond that, we will continue to support our existing licensees across Europe and sign up more brands to our SaaS platform. Our plan was to partner with 50 new brands in 2020, which we achieved in the first six months of the year, so we have increased the target to 75.

We have a lot to do, and a lot to achieve.