Evoke plc (EVOK) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the 888 Holdings plc full year results for the 12 months ended 31st of December 2020 Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. We will send you an e-mail to notify you when these are ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. And if you could give that your attention, we'll be most grateful. And I'd now like to hand over to Itai Pazner, CEO; and Yariv Dafna, CFO from 888 Holdings. Good afternoon to you, both.

Good afternoon, and thank you, and good evening, everyone, and thanks for joining us to hear about our record 2020 full year results. I'm Itai Pazner, the CEO of 888 Holdings, and I'm joined here by Yariv Dafna, our CFO. 888 is one of the leading betting and gaming companies in the world. We are listed on the London Stock Exchange since 2005. And today, we're part of the FTSE 250. At our core is our proprietary technology and our product leadership, and we are committed to safer gaming as this is critical to the future of the business. We are focused on driving growth in regulated markets by both launching into new regulated markets and growing our market share in existing ones. M&A is on our agenda, and we have a strong balance sheet and cash generation, supporting potential financial leverage to execute medium-term and large deals. I'll now hand over to Yariv to go through some of our highlights.

Next slide, please. Thanks, Itai. In Slide 3, we have some highlights for the year, which was definitely an amazing year for the company. Not only did we reach record revenue of $850 million, but we saw records across nearly all our product and various KPI, which make us feel that we are in a really good shape to see continuous growth. In this call, we will expand on the factor behind this record performance, and I will start with the financial highlights. Next slide, please. Revenue were up 52% to $850 million, with strong growth in both our B2C and B2B businesses. Adjusted EBITDA increased by 69% to $156 million, with a margin increasing to 18.3%, supported by operating efficiency more than offsetting slightly lower gross margin and contribution margin. Cash generation was very strong, with free cash flow significantly up to $146 million. This leave us with a year-end net cash position of $116 million after player balances. The dividend for the year is $0.18, with a final dividend of $0.12, represent 2/3 of our yearly dividend. Next slide, please. You can see on the right, a clear long-term track record of double-digit growth. The company is positioned well to become a leader in an attractive, large and growing market and has demonstrated the ability to continuously grow through the rapid evolution that we have seen in the industry. On the left-hand side, you can see strong growth in new customers across the product range. This growth is a key indicator of our future prospects. Next slide, please. On the left-hand side, you can see the mix of regulated and tax revenue has been increasing over the years. We have grown our business in this market, and more countries have implemented regulatory and taxation regime. One of our key goals is to build the business to be one of the leading regulated online betting and gaming businesses. We made a good progress in 2020 with 58% growth in our regulated revenue. With a few countries going into regulation, there is a potential to go to about 90% of our revenue coming from regulatory and tax revenue in 2023, in this country, I could mention Germany, Austria, Netherlands and Canada. On the right-hand side, you can see the revenue from geographic perspective, the U.K. remained the most important market with 39% of our revenue. Italy revenue were up 69% to $87 million, representing more than 10% of the group revenue for the first time. There are no other countries that contribute more than 10% of revenue, but we enjoy strong diversified growth across a wide range of regulated markets, including Romania, Sweden and Portugal, as we continue to drive market share gains with our product leadership strategy. Next slide, please. More details about the dividend. The Board proposed a final dividend of $0.12, taking the total dividend for the year to $0.18. This follow a $0.06 interim dividend, reflecting 1/3 and 2/3 split between the interim and the final. Given the strong year, high cash conversion and strong balance sheet, we are pleased to be able to return significant cash to our shareholders, while still supporting our strong growth ambition, whether organically or inorganically, as we see opportunity in the market. I will now hand over to Itai to tell you a bit more about the strategic priority and growth plan.

Thank you, Yariv. Moving on to the next slide, Safer Gaming. So in 2020, it was a year where we started a significant product enhancement in terms of our safer gaming products. We basically have 2 main products that are supporting our safer gaming agenda. One is a back-end product that's called the observer. That is basically an algorithm that was developed in-house and identifies and alerts us as an operator and players about potential harm that can be caused by their gaming activity. Once the players are alerted of this, they can either set limits or self-exclude themselves from gaming or we can do that on their behalf. In 2020, we basically launched a new strategy around safer gaming called Safer, Better, Together. With that, we have 8 commitments towards safer gaming, which you can see on the screen here. And we have launched basically a new product called the Control Centre. The Control Centre allows players, first of all, to see their gaming activity in a very transparent way, how much they've been spending, how much time they've been spending. And after they can see their gaming activity, they can also set all kinds of limits themselves, if it's, again, time limit or amount limit on a daily, on a weekly, or monthly basis. So basically, this helps players in controlling and managing their gaming with us, and we see this as an integral part of our sustainable gaming model and that we believe that, with time, this product, this gaming -- this safer gaming product that we launched will actually become a competitive advantage for us as we launch it into more and more markets, and more customers recognize that they can use this in order to keep playing with us over a long-term time and enjoy in a safe way. Moving on to the next slide. Here, you can see our market share gains in regulated markets in 2020. 2020 was a very, very strong year for the company. We grew overall our revenue, like Yariv showed, we grew overall 52% in our revenue. And these are some highlight markets. And to show that our growth is across several markets, you can see the U.K. grew by 63%, and we grew our market share by 30% in the U.K., which is one of the most competitive markets around the world. Italy grew even further, 69% in terms of revenue, and our market share grew by over 10% there. And Spain also grew by 11%. So we saw strong growth rates across all products and all markets in 2020. And I'd like to explain through our product enhancements and marketing capabilities how we made that growth level possible. So moving on to the next slide. Starting with our casino product. So you can see some trends of our revenue in Casino. This is an ongoing trend that started in 2019 and went into 2020. But in 2018, we launched our new casino product, that's called the Orbit. Orbit was basically our way to kind of modernize the casino experience. We look at some of the leading content apps, entertainment apps online, like Netflix, like Spotify. And the quality and the level of service that we offer our customers is based on that kind of quality level. So we launched Orbit in 2018, that's 3 years ago. Since, we over -- we grew our casino business over 2.5x. And you can see it started -- the growth started in 2019, where we also acquired a huge amount of new players in Casino, and that grew even further in 2020 when we went into the COVID period with a very, very strong Casino product. When we look at our Casino product, basically, we have 3 layers of product excellence that we look at in order to create what we call a superior and best-in-class product experience. The first layer is basically the usability of the product, how people can navigate between areas; find games they like easily; go into the cashier, deposit money, get money out. And overall, let's call it, the smooth navigation and experience that they see in the product is the first layer that we need to make sure exists in all of our new products. The second layer is the layer of content and rich content. So very much like Netflix, as an example, who create their own content, their own top-class video content, but also bring content from third-parties, studios, we also create our own content with our own games in our studio that's called Section 8, but we also bring through integration into third-parties, best-in-class third-party game providers. We have over 60 providers. We bring all the games that are relevant in the industry, and we offer them to our customers in a way that's easy for them to find, and actually is based on recommendation engines based on AI algorithms that we implement in our product and offer them games that are relevant to them. Again, like they're used to seeing on other apps, top games for you, recommended for you based on their history and their play and similarity to other players, or top games in your markets, so games that other people like in their market that can be relevant to them. And basically making the thousands of games that we offer on the platform available on an individual customer basis. The third level that we speak about in our Casino Orbit platform is what we call the entertainment and engagement level. So on top of the games themselves, and the mechanics of the games, we want to add additional features that create a richer and more entertaining experience. So it's various types of jackpots. We can today offer jackpots, individual jackpots to players, weekly jackpots, daily jackpots. We have all kinds of other enrichment features in our Casino product, which keep the players engaged, keeps the environment more exciting, more entertaining and evolving over time. So that's our Casino, and it's definitely been a growth engine for the group in the last 3 years. And now let's look at some of the other products that we've invested in, in the last few years. So the next product is Poker, 888 Poker, again, one of the earliest operators of poker in the world, started in 2001 in the original poker boom. Went through all the phases of online poker. It had exponential growth at the beginning, then slowed down, then growth again. And we realized a couple of years ago that poker as a category hasn't received the same level of product attention that other products got like casino and sports betting in the industry. This is not -- this wasn't an 888 issue, it was an industry-wide issue, and we decided to make a massive investment into poker and basically modernized the poker experience, make it relevant to millennials, make it a mobile-first experience. So basic things like you can play in portrait mode with one hand. You have all kinds of -- you have a very, very easy navigation using big kind of tiles and icons to show exactly what players are looking for. Again, AI recommendation engines offering the right table to the right player. We have thousands of poker tables that are available at any point of time, and you want to find the right one for you, so the right poker game, the right level of play, the right kind of players that fit you. So that's what we recommend our players. Cross-selling between our different products because we developed all of our products in-house, poker, casino, sports, we want to offer the wide range to as many as possible customers, and therefore, we make the cross-product navigation very, very seamless and easy. So players who play Poker can navigate easy into the Casino product or into the sports betting product and make a bet on sports. And again, you can see here that we put the same focus in all of our products like we do -- like we did in Casino, just with an interpretation that's relevant for the world of poker, starting with safety, usability, content rich, entertainment. We added very cool entertainment features, all kinds of throwables that players have. So when someone sitting on the poker table and not moving, not making the move, everyone is waiting for him, you can throw a virtual egg or tomato on him to get it moving. We have cool icons like you see on the screen here, which are kind of the quality and the level that people are used to from leading social and gaming apps to use. So it's just very much a modern experience, trying to bring back younger audiences, millennials back into poker because we know that poker is, in essence, a very, very popular game globally, both offline, online and social apps and casinos in home games, and we wanted to bring that kind of extra experience into the world of online poker. We launched this product in the end of last year, Poker 8, around November last year. And since then, we've seen all of the KPIs that we're looking at, like revenue per player, cross-selling into Casino, amount of poker table, amount of poker games they played. All of these KPIs, we see on an increased trend since the launch. Our overall FTDs, first time depositors, also continuously growing since the launch of this product. And we're very, very optimistic that Poker is also entering a positive growth cycle like we saw in our other products after launching new products. Moving on to the next product launch. And this is probably the most significant one in the last couple of years and really changing the essence of 888 as an online gaming operator to an online betting and gaming operator. So after almost 10 years operating in the category of sports betting and managing to grow the sports betting vertical to over $100 million a year, we decided that it's time for us to own the technology of our sports betting. We used to have a third-party sports betting platform that provided us. But as a company that believes in building the best-in-class products, which are unique to our customers, we realized that if we want to make a big step in sports betting, we have to own technology as well, technology and the product. Therefore, a couple of years ago, about 2 years ago, we bought a sports betting company that created -- that had shared very similar principles -- product principles as ours in terms of the usability and content and entertainment features. And we saw their product, we loved what we saw. We met the team. We were -- we saw that we can enrich our DNA with sports betting DNA based out of Dublin, which is one of the global hubs of sports betting, and we acquired the company. Since then, we've been busy with, first of all, enhancing the product that they have, making it ready to launch, integrating it into our leading back-end systems. And then towards the end of last year, we started rolling it out in the different markets in Europe. And that got to the kind of peak in January, where we basically relaunched our new proprietary sports betting platform in the U.K. replacing the third-party platform and migrating all of our customers into our platform, offering them, this, again, kind of unique 888 product experience that we expect from all of our products with all of these features. So again, AI offering them bets that are relevant to them, the kind of sports that are relevant to them, and bets that are popular at that point of time in their market and to other contents that are similar to them. We have a really great and easy, seamless cross-sell again between sports and into other verticals. And we have things that make it much easier to find the relevant bet for you. So a product that's called the Betfinder that helps you find the relevant bets for you. Because, again, in sports betting, you have thousands of potential bets at any point of time, and we want the experience to be seamless. We want it to be fast. We want it to be easy. And we wanted to be safe. And the access to the Control Centre that I showed you before, again, it's very, very easy. It's accessible from anywhere on the client, and players can set limits, while experience -- this leading sports betting experience. So again, this was launched earlier this year, full mode in the U.K. We are -- we have seen very encouraging KPIs since the launch of this product. So again, many of the KPIs have been positive over what we saw last year, or the previous year on the previous platform. And that reached to another highlight last week when the Cheltenham sports betting -- Horse Racing Festival was on in the U.K., and basically, we had the best opportunity to stress test this platform, see how stable it is, see how the customers like it and are betting on the horses. And we saw a significant increase in betting volume during the festival, and we saw the product working very, very smoothly, with no technical or any issues whatsoever. So we're very confident with that, that we can take now sports to the next level. We have a relatively small market share in sports. So depending on the markets, we have some markets that were 1% to 2%, some markets that were closer to 5%. But overall, we have a lot of room for growth. And now leaning on this new advanced product, which is in its initial phases, we think there's plenty of room for growth for us in making sports betting basically a leading category in 888 and becoming a real betting and gaming operator. Moving on to the next slide. So after you have all of these leading and advanced products, what we want to do is put them in front of customers in order to acquire more and more customers. 888, by DNA, is a technology and data-led company. So we do make all of our decisions based on data, analyzing data using technology. And with that, we also -- that's also how we manage our marketing budgets, which are the biggest part of our budget, or the biggest spend line in our budget. And last year, we spent over -- or invested over $240 million in marketing online. You can see on the left-hand side the amount of FTDs. FTDs is first time depositors. These are new players. CPA is a cost per acquisition. So our aim is to continuously bring more and more first-time depositors. That's the new blood into the system. That's where growth starts with new players coming in, growing the business. And our objective is to continuously reduce the CPA. And you can see the trend of the CPA. The cost per acquisition is reducing over time, while we're managing to increase the amount of players that we're bringing. We're doing this, on the right, you can see all of the marketing channels that we're using. So we basically built a marketing machine and an online marketing machine that's based on all the data that we gather and optimizes our spend between the different channels and in the individual channels. Traditionally, gaming companies use most of their budgets, either off-line on things like sponsorships or advertising on TV in the sports channels or in the newspapers and on online channels like PPC, which is Google Search or affiliate channels, and what we've been doing in the last 3 to 4 years is basically with the shift of consumers to different types to consuming media and exposure in different areas, we shifted more and more of our spend and more and more developed our expertise in the emerging channels where our consumers are spending time, so social networks, YouTube, apps, in-game apps. And you can see here the different marketing channels mix that we have and how we manage to diversify and get more exposure to players in different places. And what we don't know how to do exceptionally well is to actually measure what we call the attribution. So how the different channels impact each other and how to basically get an ideal journey in terms of our exposure in front of players until they finally convert into becoming members of 888. So that's marketing, and that's how we take all the great products that we develop and bring them in front of customers. Now moving on to the U.S.. So all the great things that I showed up till now haven't really been accessible in the U.S., although we've been active there since 2013. We do not -- did not implement the latest set of technology because of all kinds of regulatory requirements and restrictions in the markets in the last few years, and we were very busy on investing and developing all the products that you saw and the marketing machines and rolling out into more markets in Europe. And last year, we decided, is the year that we're starting to shift more and more focus into the U.S. With that, we started building a new infrastructure there that will allow us to bring all of these products into the market and to roll them out to many markets in the U.S. fairly quickly. And that new, basically, infrastructure is going to be launched shortly in a couple of months in the U.S., and we're going to roll out into more markets. In terms of strategy in the U.S., we have 2 entry -- or market entry strategies. We have 1 B2B. Okay, B2B, we have a relationship with Caesars Interactive, a B2B relationship with them around Poker and Casino. So we power WSOP Poker, which is, today, considered the leading U.S. brand in terms of online poker. We launched with them in 2 markets, in Nevada and New Jersey. And recently, we have extended the contract with them for additional 5 years. And now the market is starting to open up into more and more regulated markets in the U.S. The next ones that we're launching there are Pennsylvania and Michigan, 2 quite significant markets. And soon, we will have shared liquidity in Poker network across all the markets that we work in, in the U.S. This is now possible because of the change in the regulation there, which allows shared liquidity or cross-border Poker activity between the different states that became available a few months ago. And now we're in the process of, again, launching into more markets and combining the markets together in Poker. Liquidity is extremely important. We know the impact of sharing liquidity has on the attractiveness of Poker. We see that in Europe, where we have a shared liquidity Poker network between Spain and Portugal. In the U.S., when we combined Nevada and New Jersey, we saw a real uptake in the Poker activity. And we're now looking in the near future, again, to combine all the Poker markets in the U.S. under one shared liquidity network. So that's on the B2B. And ahead of us, there are going to be more markets that open Poker, some of the markets start with Poker and gaming from the get-go, and some of them start with sports betting and then we'll probably open up Poker later on. And with that, we think we will have a leading position with Caesars and the WSOP in terms of Poker in the U.S. Another part of our strategy, a very important part, is actually the B2C side. So launching 888 Sports and where possible, Casino and Poker in markets where we got licenses in the U.S. Up till now, we had 1 license in New Jersey. We acquired 3 more licenses at the end of last year, which are Colorado, Indiana and Iowa, and we are looking to acquire more licenses in more markets as they are opening. This year, we're going to launch overall in 2 sports betting markets, 2 poker markets. That's additional 4 markets that we will have in the U.S. And our projection is that, by 2023, we will operate between 12 to 15 different markets in the U.S. between our B2C and B2B divisions, taking again, all of these leading products, the latest poker, our new sports book, and the leading -- probably the leading online casino experience in the world to the U.S., starting to grow our share there to become a meaningful part of our revenue by 2023. Now to the last slide. So just to summarize before we jump into the Q&A. So 2020 was a record year for 888. We grew by over 50%, where our peers in the industry grew by an average of around 25%. Our product leadership strategy is delivering very, very strong results. And we know that we're at the beginning of a growth cycle and basically all of our products, Casino is continuing a very strong momentum with a leadership position in Casino. Sports is in a brand-new growth phase. And so is Poker, like I explained before. We use our data-driven investment in AI to drive ongoing marketing effectiveness of grow marketing and reduce our CPAs and get better returns. We're well positioned now to scale up in the U.S., and we're moving more and more forces, recruiting more people, launching into more markets and the U.S. will become a meaningful part of our business in the next few years. We have a very strong opportunity to leverage our balance sheet to pursue nonorganic expansion, M&A. The fact that we managed to migrate our sports -- the sports product from third-party to 888, all the great progress that we made on the product side, the strong balance sheet that we have and the cash that we have on our balance sheet makes us feel very confident about our options in terms of M&A in Europe and potentially in other areas. And finally, the momentum has continued from last year through Q4 into Q1 this year, with strong current trading that we're seeing at the moment. So with that, I'll hand over now for some Q&A.

[Operator Instructions] Ahead of actually addressing those live Q&A, perhaps I could start off some questions that were pre-submitted by investors. The first question that we received is, can you provide further details about the tax assessment on the Israel subsidiary in relation to the transfer pricing matters between 2016 and 2018? And what is the likelihood of paying additional tax and the potential amount?

Okay. So the discussion with the tax authorities with regard to the total profits that needs to be attributed to the Israeli operation, this discussion will be concluded during 2021. We don't expect additional tax expenses on top of what we already have in the books.

Perfect. The second question that we received in terms of the change in the German regulatory regime and the application for a license, can you provide details on the progress and quantify the potential impacts on profits for the new licensing and toleration regimes?

So first of all, I'll start with the potential that I think the German market has, and then Yariv can elaborate a bit on the impact of taxes and changes in regulation. So indeed, in 2020 -- in the second half of 2020 and in 2021, there are going to be structural changes in the regulations in Germany, first of all, offering sports betting under a local license there. And later this year, that will be expanded to gaming, to Casino and Poker, a more limited gaming experience, both in terms of deposit limits and bet limits that they're putting there. But yet, it will -- the market will be opening up. That means that we will be able to start advertising there, marketing our product there. We have been in the German market for over 20 years now, working through our Gibraltar license and our [ Altice ] license. And now that it's becoming opening -- opened to work under a local license, we see this as a future opportunity. Obviously, in next year, when all these restrictions are put into place, and then we'll see a dent in our numbers. But we think that, going forward, the market can be worth up to a couple of billion of dollars, which is a significant European regulated markets. We need to adapt our products and the way that we operate there to adapt ourselves to the tax requirements. But essentially, it's going to be an opening -- a reopening of a new big and regulated market, which is something that we welcome.

In terms part of the changes of the German regulation, so when we were indicating $70 million to $100 million impact on our revenue in 2021, this was included within this number. From EBITDA point of view, so we already indicated that the loss of revenue in Germany, in terms of EBITDA, is about $10 million impact.

That's brilliant. The next question, what are your ambitions in the U.S.? And what market share could we expect?

Yes. So I think I explained quite a bit about the U.S. In terms of market share that we can expect, we see that in Europe, our market share, our sweet spot of market share in the different markets is around, let's call it, between the 4% and 6%, 7%, depending on the category. Mainly in Gaming and Casino and Poker, we're more towards 6%, 7%, 8%, and sports betting much lower, 1% to 2% -- 1% to 3%. So if we look at the U.S. market, we don't see any reason why, over time, we shouldn't get to market shares that are in the markets that we operate in, in the states that we decide to operate in and we get market licenses, that we don't get to similar levels of between 3% to 5% of the market share in those markets. That will obviously take time. That will obviously require investment. But just like we managed to do it successfully in literally every market that we launched in, in Europe and in other places in the world, we don't see any reason why we won't be successful in the U.S.

That's great. We've got 3 just final pre-submitted questions, all short in nature. The first one is, what are your M&A plans?

Yes. So without going into any specifics, I mentioned before also, we feel that we have a strong position at the moment with all of the products that we now got into kind of a new growth cycle, products that we recently launched, which are leading in the different categories. We have a very strong infrastructure, which we believe we can now put significantly more volume over, and we can do that organically, like we managed to do in 2020, but we could also do it inorganically through M&A opportunities. Our main focus at the moment in terms of M&A is more towards European M&As. We have a strong balance sheet. We have cash on the balance sheet. We have no debt. We have great operations, a great marketing capability, and we think that we're very well posed to take on M&A opportunities in our core markets in Europe.

I know you did touch on, I guess, current trends, but the next question is, what are your current trading trends?

So I will refer to this in a high level. So current trading is good. We start the year with strong momentum, similar to the level we saw in Q4. We are not providing details on the overall Q1, as we are planning a trading update at early May, which will provide more details on the performance of the first quarter of the year.

That's great. And the last question that was pre-submitted ahead of today's event was what is your dividend policy?

So the dividend policy is to distribute 50% of the adjusted profit after tax every year. In most of the year, in addition to the regular dividend, that was -- this is the policy. We also had some special dividend, and this is, of course, depends on specific circumstances on a yearly basis, which the Board consider before declaring the final dividend.

That's great. Well, look, that deals with the questions that are pre-submitted. What I would ask you to do now, if it's possible, is if you could select the Q&A tab. If I could ask you to start at the top, if I could ask you to read out the question, who it's from, and perhaps give a response where it's appropriate to do so, and then I will collect here at the back when you finish and then divert investors for feedback.

Great. So first question from Simon. I think we partly answered, but I can elaborate a bit. What are the limits to scaling in the U.S. opportunity that's obviously a very competitive market you look to partner? Okay. So we think that in the U.S., indeed, it is a very competitive marketplace, but I can say that the other markets that we're competing in, like the U.K., or Spain, or Italy are not competitive. We have probably even more competitors in Europe than we have in the U.S. The advantages that we're bringing into the U.S. market is the product that we have. We think that today, with the new Casino, the new Poker product, the new Sports product, we will have a competitive advantage taking those products into the market with our, again, marketing machines and managing to achieve market share. In terms of our Poker and B2B, I spoke about that, but we do have a partnership with WSOP, a B2B partnership, and they're going to launch that. It's probably the leading brand there. Now they're going to have the leading Poker product with share of liquidity in the U.S. So I'm very confident that we'll manage to capture quite a significant part of Poker. With Poker comes also a good business of Casino that we cross-sell from Poker into Casino. So that's one way to achieve market share. The other way is B2C, which we discussed. And are we looking to partner? The answer is yes. We are looking to partner with media and brands that can help us reach that 3% to 5% market share easier and faster. We are in various discussions. We hope to advance in those discussions in the near future and to also do partnerships that will help us advance. But we believe that we can also achieve good results and market share in our current B2C and B2B mode.

Okay. Next question from Avs, what is included in trade receivable of $84.6 million? So we have a set of agreements with many payment service provider. The trade receivable balance will present mainly the amount that we are expecting to collect from this provider -- payment provider. The next question from AB. Great presentation. What do you see as the biggest risk to 888 as you move forward? Also from a competitive point of view, how quickly do you see competitor copying your offering? And do you look to protect your position?

Yes. Well, there's different risks and changes in our business. There is what we call regulatory pressure in different countries in Europe. Germany is one of them. U.K. is another one that we mentioned. And we assumed that this year, due to these risks, our revenues and our numbers are going to be slightly up over last year, while we deal with these risks. In terms of competition, I think there are, obviously, large competitors in our industry that have been created mainly through mergers and acquisitions. So those obviously have the benefit of scale. On the other hand, we have the benefit of owning our own technology, being more flexible, being able to move fast in areas that we want to move. So I think we're well positioned to deal with the risks that exist in our industry.

Another question from Nick to Itai. With your in-house development creating new offerings for clients, how do you look to cross-sell into your existing client base? And how do you target first-time depositor? Will you do this organically or through M&A?

I hope I understand the question correctly. But in general, we -- our new products that we brought into market have been well-designed to offer the full range of our products to different customers. That means it's easier to cross-sell or to navigate between the product. We're already seeing with the new products that we launch better cross-sell figures. And obviously, we're offering them the new products when we launch them, we go back to our databases, and we offer -- we tell them about the new advancements and enhancements we do into the product, and we try to reactivate all players and to offer the new products to all of our player base. And yes, the plan is to use our advanced products in M&A in order to create synergies, in order to offer our best-in-class products to other operators that might have been suffering from less -- from not as good products and performance in the last few years.

Another question from Alistair, do you -- to what degree do you estimate growth in 2020 was caused by COVID restriction and people not having access to their normal entertainment channels? I will answer this. We definitely think that there is some play to the COVID in the performance of 2020, but we don't look at that from the view of only gaming industry. Actually, we think that due to the COVID, there was a massive shift from retail businesses into online services. We, by the way, grew more than 50%, where the market was growing 25%. So definitely, a significant part of our growth was related to our product and offering. And we also enjoyed from this massive shift to online services, and we do believe that this shift is here to stay as we see in other industry. Next question from Rebecca. Caesars have made no secret that they only want William Hill U.S. business. Are 888 interested in buying their European business and the U.K., in particular?

Yes. So we also made it no secret that we would be looking at M&A opportunities in Europe. William Hill is one of those opportunities. It falls within the guidelines of the kinds of things that we would be looking at. So we will be looking at that opportunity as others that are becoming available in Europe.

Another question from Fabrice. For M&A., what is the rationale for your next acquisition? What will they bring to you that you don't already have? Some example maybe.

So we spoke about this a bit. So I think in terms of the product, we're not looking to buy any more products. Our last acquisition was a sports betting platform. We now integrated and rolled it out. We have the full set of products, so we're not looking to acquire products. We are looking to expand in specific territories. There are territories where we can -- we would like to expand our market share faster. Scandinavia is one of them. Eastern Europe is another example. But basically, we're looking, in general, to scale and to leverage the platform and the products that we have, that we have in-house and increase the volume that we're putting on them. And by that, enhancing our margins and profitability. So those are the kinds of things that we're looking. We're looking to add scale.

Another financial question from Avs, there was a $12 million increase in provision on the balance sheet. Are these likely to be one-off addition? Or should we expect more over the coming years? So this is very difficult to answer. Of course, provision, by nature, it's something that we need to measure on a year -- every year based on the risk that we need to deal with them. Provision, by nature, always have an element of one-off. So I cannot really say what will be the level of provision looking forward. On the other hand, $12 million increase is not normal increase that you should expect on a yearly basis. Another, finance income seems quite low relative to cash on the balance sheet, even with such low interest rate. Is there any particular reason for this? Unfortunately, this is the level of interest rate we see today. It's not the level that we can get more on the cash, and there is a significant movement on our cash flow. A lot of cash in and cash out, which do not make it easy to actually reinvest the cash with such a level now. We are looking also into this issue.

That's brilliant. Yariv, I think you've actually addressed every single question that's been submitted by investors. So thank you so much for taking the time to do so. I do know investor feedback is particularly important to you guys, and I will shortly redirect investors to provide that. But before I do, perhaps I could hand back to you, Itai, just for a few closing comments before I redirect investors.

Yes. So again, first of all, I want to thank all the investors for taking the time and asking the great questions. I think 888 is very well posed for future growth. I think we've elaborated how and where. So it's both on a product basis with our new Sports, Poker product and our leading Casino on a territorial basis in the U.S. and gaining more market share in our existing markets. And we're very, very well posed for M&A. So we're very positive about the outlook of the company. That's it. Thank you very much for everyone.

Itai, Yariv, thank you once again so much for your time today and for providing all investors access to your presentation as part of your investor roadshow. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback. If you accessed this meeting from a website, then the feedback page will appear. But if you accessed this meeting via the link sent to you by email, you'll simply be asked to log back in to submit your feedback, and it would be very beneficial that the company can hear your thoughts and your expectations. On behalf of Itai and Yariv and the management team at 888 Holdings plc, we'd like to thank you very much for attending today's presentation. That concludes today's session. Thank you for your time once again, and good evening to you, all.