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Entain plc ("Entain" or "Group")

Strong H1 Group performance Record online actives and further delivery of growth and sustainability strategy

Entain plc (LSE: ENT), the global sports-betting, gaming and interactive entertainment group, today reports Interim Results for the six-month period ended 30 June 2023 (“H1”).

Key highlights

  • Strong H1 Group performance with record Online active customers and further strategic delivery
  • Total Group (including US) Net Gaming Revenue (“NGR”) up 19% (+16%cc2)
    • Group NGR (excluding US) up 14% (+11%cc2), +3% proforma3
  • Online NGR +15% (12%cc2), +1% on a proforma3 basis
    • Excluding known regulatory impacts4, proforma3 Online NGR up +6%cc2
    • Record level of online active customers, +23% YoY, +15% proforma3, demonstrating ongoing strategic focus of broadening our customer base
  • Retail performed ahead of expectations with NGR +12% (+11% cc2), +8%cc2 proforma3 supported by market leading offering across betting and gaming terminals
  • BetMGM performing strongly
    • H1 NGR of $944m, up +55% YoY
      • Same state NGR growth of +25% from digital operations
    • Established US operator with 18%5 market share and continued iGaming leadership with 27%6 share
    • Delivered positive EBITDA in Q2
    • On track to deliver the upper end of FY23 NGR guidance of $1.8-$2.0bn
    • Reiterate expectation to be EBITDA positive in H2 20237
  • Announced four transactions
    • Entain CEE expansion into Poland with acquisition of STS Holdings to further unlock the significant growth opportunities across the CEE region
    • 25 year partnership with TAB NZ providing unique access to New Zealand sports betting market
    • Acquisitions of 365Scores and Angstrom Sports to expand content and product capabilities
  • As separately announced today, DPA negotiations have progressed sufficiently that Entain believes it is likely to be able to agree a resolution of the HMRC investigation into its legacy Turkish facing business, which was sold in 2017
    • Entain is therefore making a provision of £585 million against a potential settlement payable over a four-year period

Financial Highlights

  • Group EBITDA8 at £499m is up +6% vs prior year
  • Group underlying profit before tax from continuing operations £287.6m
  • Group loss after tax from continuing operations £502.5m
  • Proposed interim dividend of 8.9p per share, +5% year on year
  • Successful placing of 48.8m new shares raising £600m to fund the acquisition of STS Holdings and other strategic investments
  • Successful issuance of £500m of Term Loans following strong global demand enabling redemption of Ladbrokes Bonds due September 2023
  • Net Debt of £2,594m at 30 June 2023
  • FY 2023 Group EBITDA8,11 expected to be in the range of £1,000m to £1,050m12, pre accounting for TAB NZ

Sustainability Highlights

  • Only global operator with 100% of revenue from regulated or regulating markets, having accelerated exit of markets with no clear path to domestic regulation
  • Further deployment of ARCTM, continuing to protect players with c4 million interactions year to date delivering a 36% drop in customer risk rating
  • Partnership with EPIC Risk Management delivering safer gambling workshops to the NHLAA, NFLPA and MLSPA in the US
  • Funding for a two-year Gordon Moody Charity alumni programme, and Entain Foundation supported sponsorships for 50 new SportsAid athletes
  • Entain & McLaren returnship programme launched, winning Women in Gaming Diversity’s ‘Innovator’ award
  • Continued industry leadership and recognition across ESG; maintained MSCI’s AA rating and FTSE4Good index inclusion, and awarded as ‘Safer Gambling Operator of the Year’ by EGR North America and ‘Most Socially Responsible Operator’ by Which Bingo

Jette Nygaard-Andersen, CEO of Entain, commented:

“This has been another period of strong performance for Entain as we make clear strides towards delivering our strategic ambitions. In particular, we are making excellent progress in broadening our customer base and deepening our audience engagement, as evidenced by the record number of active online customers on our platform. BetMGM continues to show momentum and backed by our technology and capabilities we are excited by the improvements we are delivering for customers in the US. I’d like to thank all my Entain colleagues around the world for their hard work and dedication in delivering this performance. This clear focus on driving sustainable long term growth combined with our global operating capabilities underpins our confidence in our prospects for FY23 and beyond and delivering value for our shareholders.”

H1 Trading performance: 1 January to 30 June 2023

H1: Period 1 January to 30 June 2023

Total NGR

Sport Wagers

Sports Margin

Reported1

cc2

Proforma3 cc2

Reported1

cc2

 

Online

Sports

6%

3%

(4%)

(3%)

(5%)

1.1pp

Gaming

22%

19%

5%

Total Online

15%

12%

1%

Retail

12%

11%

8%

13%

11%

0.6pp

Total Group (ex US)

14%

11%

3%

 

 

 

BetMGM

65%

55%

 

 

 

 

Total Group incl 50% BetMGM

19%

16%

8%

 

 

 


H1 summary : 1 January to 30 June 2023

Total Group (ex US)

Reported1

 

2023

2022

Change

CC2

Six months to 30 June

£m

£m

%

%

Net gaming revenue (NGR)

2,404.3

2,117.6

14%

11%

Revenue

2,377.6

2,094.9

13%

11%

Gross profit

1,457.7

1,327.8

10%

Underlying EBITDA8

499.4

471.0

6%

Underlying operating profit9

307.4

246.5

25%

Underlying profit before tax9

287.6

152.4

89%

(Loss)/profit after tax

(502.5)

28.1

Continuing diluted EPS (p)

(83.9)

5.1

Continuing adjusted diluted EPS10 (p)

21.6

29.3

Dividend per share (p)

8.9

8.5

Dividend
In line with the Group’s progressive dividend policy, the Board has proposed an interim dividend of £56.5m (8.9p per share), a 5% increase per share year on year. The interim dividend in respect of the H1 2023 results announced today is expected to be paid in September 2023 to shareholders on register on 18 August 2023.

HMRC investigation provision
As announced on 31 May and updated today by separate announcement, Entain is in deferred prosecution agreement (DPA) negotiations with the Crown Prosecution Service (CPS) to resolve the ongoing HMRC investigation into its legacy Turkish facing business, which it sold in 2017. The DPA negotiations have now progressed to the point where Entain believes that it is likely to be able to agree a resolution of the HMRC investigation insofar as it relates to Entain and its Group.  While the full terms of a DPA are subject to judicial approval, Entain has a sufficient degree of confidence to take a provision of £585 million against a potential settlement, which would be paid over a four-year period in relation to alleged offences under Section 7 of the Bribery Act 2010.  Entain currently anticipates judicial approval will be sought during Q4 2023.

Outlook
Entain’s first half 2023 performance reflects the continued progress on our growth and sustainability strategy. As we look to the remainder of 2023, our underlying outlook expectations remain unchanged, however we remain mindful of the external environment. Following recent acquisitions and an encouraging start to H2 we expect FY 2023 Group EBITDA8 (pre accounting for TAB NZ) to be in the range of £1,000m to £1,050m12. We remain excited by the opportunities ahead, confident that our customer focus, diversification and strategic execution will deliver further progress for all stakeholders.

Notes

  1. 2023 reported numbers are unaudited and relate to continuing operations
  2. Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2023 exchange rates
  3. Proforma adjusted for SuperSport and BetCity acquisitions
  4. Adjusted for known regulatory changes impact of UK affordability measures and lack of enforcement in Germany post licensing
  5. Market share for last three months ending April 2023 by GGR including iGaming, retail and online sports betting, and only U.S. markets where BetMGM was active excluding New York; internal estimates used where operator-specific results are unavailable
  6. Market share for last three months ending April 2023 by GGR, including only U.S. markets where BetMGM was active; internal estimates used where operator specific results are unavailable
  7. Based on current assumption of future live markets
  8. EBITDA is defined as earnings before interest, tax, depreciation and amortisation, share based payments and share of JV income. EBITDA is stated pre-separately disclosed items
  9. Stated pre separately disclosed items
  10. Adjusted for the impact of separately disclosed items, foreign exchange movements on financial indebtedness and losses/gains on derivative financial instruments (see note 8 in the interim financial statements)
  11. References to profit expectations are made on a reported basis post IFRS 16 implementation
  12. Includes expected contribution from STS and Angstrom acquisitions yet to be completed, but excludes an estimated c£35m benefit to EBITDA from TAB NZ profit share payments which are deemed to form part of consideration under IFRS 3 (see CFO report for further detail)

Enquiries

Investor Relations - Entain plc
David Lloyd-Seed, Chief IR & Communications Officer
Davina Hobbs, Head of Investor Relations
Aimee Remey, VP US Investor Relations
Callum Sims, IR Manager

Media - Entain plc
Lisa Attenborough, Head of Corporate Communications
Jay Dossetter, Head of Corporate PR
Jodie Hitch, PR Manager

Powerscourt
Rory Godson/ Rob Greening / Sam Austrums

[email protected]

[email protected]

Tel: +44 (0) 20 7250 1446
[email protected]

H1 Conference Call & Webcast

The H1 2023 results presentation for analysts and investors will be held today, Thursday 10th August at 9:00am BST. Participants may join via webcast or conference call dial in, approximately 15 minutes ahead of the event.

Live webcast link: Entain 2023 Interim Results

To participate in the Q&A, please also connect via the conference call dial in details.

UK                         +44 (0) 20 4587 0498

US                          +1 855 979 6654

Access Code:         051731

The presentation slides will be accessible on our website shortly before the event. A replay and transcript will be available afterwards; https://entaingroup.com/investor-relations/results-centre/

Upcoming dates:

Q3 Trading update:           02 November 2023

Dividend Timetable

Announcement date:        10 August 2023

Ex-Dividend date 17 August 2023

Record date:                      18 August 2023

Payment date:                   22 September 2023

Forward-looking statements
This document contains certain statements that are forward-looking statements. They appear in a number of places throughout this document and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, results of our operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. These forward-looking statements include all matters that are not historical facts. By their nature, these statements involve risks and uncertainties since future events and circumstances can cause results and developments to differ materially from those anticipated. Any such forward-looking statements reflect knowledge and information available at the date of preparation of this document. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation (596/2014) as it forms part of English law by virtue of the European Union (Withdrawal) Act 2018, the Listing Rules, the Disclosure Guidance and Transparency Rules and the Prospectus Rules), the Company undertakes no obligation to update or revise any such forward-looking statements. Nothing in this document should be construed as a profit forecast. The Company and its directors accept no liability to third parties in respect of this document save as would arise under English law.

About Entain plc
Entain plc (LSE: ENT) is a FTSE100 company and is one of the world’s largest sports betting and gaming groups, operating both online and in the retail sector. The Group owns a comprehensive portfolio of established brands; Sports brands include BetCity, bwin, Coral, Crystalbet, Eurobet, Ladbrokes, Neds, Sportingbet, Sports Interaction and SuperSport; Gaming brands include Foxy Bingo, Gala, GiocoDigitale, Ninja Casino, Optibet, Partypoker and PartyCasino. The Group owns proprietary technology across all its core product verticals and in addition to its B2C operations provides services to a number of third-party customers on a B2B basis.

The Group has a 50/50 joint venture, BetMGM, a leader in sports betting and iGaming in the US. Entain provides the technology and capabilities which power BetMGM as well as exclusive games and products, specially developed at its in-house gaming studios. The Group is tax resident in the UK and is the only global operator to exclusively operate in domestically regulated or regulating markets operating in over 40 territories.

Entain is a leader in ESG, a member of FTSE4Good, the DJSI and is AA rated by MSCI. The Group has set a science-based target, committing to be carbon net zero by 2035 and through the Entain Foundation supports a variety of initiatives, focusing on safer gambling, grassroots sport, diversity in technology and community projects. For more information see the Group’s website: www.entaingroup.com.

LEI: 213800GNI3K45LQR8L28

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