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Entain plc
("Entain" or "Group")

FY23 results in line with expectations
Improving operational execution to deliver growth

Entain plc (LSE: ENT), the global sports betting and gaming group, is pleased to announce its results for the year ended 31 December 2023.

Key Highlights:

  • Total Group Net Gaming Revenue (“NGR”), including 50% share of BetMGM, up +14% (+14%cc2), +2%cc2 on a proforma3 basis
  • Reported1 Group NGR (excluding US) up +11% (+11%cc2), -2%cc2 on a proforma3 basis
  • Online NGR up +12% (+12%cc2), -3%cc2 on a proforma3 basis
    • Excluding regulatory impacts, underlying proforma3 Online NGR growth of +3%cc2
    • Record level of Online active customers, +23% YoY, +10% proforma3
  • Retail NGR up +9% (+8%cc2), proforma3 +2%cc2, reflecting the acquired shops in New Zealand and Poland, and the continued strength of the retail estate
  • BetMGM delivered a good performance through the year
    • 2023 NGR of $1.96bn, +36% year on year4,5 at the top end of expectations
    • 14%6 market share in sports betting and iGaming in the markets where BetMGM operates
    • Product and technology enhancements including Single Account Single Wallet (“SASW”)
    • Achieved positive EBITDA for H2 2023
  • Further expansion into regulated markets with leading market positions:
    • Entain CEE expansion with acquisition of STS Holdings, the leading sports betting operator in Poland, to further unlock the region’s significant growth opportunities
    • 25 year partnership with TAB NZ providing unique access to the New Zealand sports betting market
  • Enhancement of inhouse content and capabilities with acquisitions of 365Scores and Angstrom Sports
  • Deferred Prosecution Agreement (DPA) resolution to the HMRC investigation into Entain’s legacy Turkish facing business, which was sold in 2017
  • Announced revised strategic priorities; focusing on driving organic growth, expanding online margins, and increasing US market share

Financial Highlights:

  • Reported Group EBITDA7 up 1% at £1,008m
  • Group EBITDA7,8, pre TAB NZ accounting, in line with expectations at £974m, down -2% year on year:
    • Online EBITDA7,8 of £830m, in line with 2022 (Reported Online EBITDA7 up 4% at £857m)
    • Retail EBITDA7,8 of £277m, down -1% (Reported Retail EBITDA7 up 1% at £284m)
  • Group profit after tax9 before separately disclosed items was £339m
  • Group loss after tax was £879m, reflecting the DPA settlement and impairment charges primarily related to the Australia operations being impacted by point of consumption tax increases
  • Adjusted diluted EPS10  of 44.2p
  • Second Interim Dividend of £56.5m (8.9p per share) announced, bringing the total dividend for the year to £113m (17.8p per share)
  • Robust management of balance sheet with year end adjusted net debt11 of £3,291m and leverage at 3.3x (3.1x on a proforma3 basis)

Sustainability Highlights:

  • New sustainability strategy including an updated regulatory and safer gaming charter
  • Only global operator with 100% revenue from regulated or regulating markets
  • Continued recognition across ESG agenda; maintaining MSCI’s AA rating and inclusion in FTSE4Good and Dow Jones Sustainability indices, awarded responsible operator awards by EGR, SBC and Vixio

Capital Allocation Committee

In line with our announcement on 2 November 2023, the recently formed Capital Allocation Committee has commenced a review of Entain’s markets, brands and verticals. The objectives of the review are to help focus the organisation, improve competitive positions in core markets and maximise shareholder value.

Dividend

In line with the Group’s progressive dividend policy, the Board proposed a total dividend for 2023 of £113m, to be paid to shareholders in equal instalments with H1 and FY results. As such, a second interim dividend of £56.5m (8.9p per share) is expected to be paid on 26 April 2024 to shareholders on register on 15 March 2024.

Current trading and outlook

Year to date, the Group is trading in line with expectations. In Brazil we are seeing early signs of benefits from the improvements we initiated through 2023, and in the US, BetMGM’s nationwide app is now live in Nevada and we look forward to introducing Single Account Single Wallet ("SASW") functionality in the state later this year as well as delivering further product improvements.

As we look ahead for the balance of the year, we expect significant regulatory changes in two of our larger markets:

  • In the UK, we are delighted to see the long-awaited regulatory review draw closer to conclusion. We look forward to the implementation of stake caps on online slot games and a potential agreement on uniform safer gambling measures across the market. While we expect these changes to be a positive for Entain in the long run, we may see continued player disruption over the short term, and with leading brands we may see opportunities for us to invest in marketing to grow market share.
  • In the Netherlands the KSA has recently proposed tighter deposit limits from Q2 2024 which have the potential to impact 2024 EBITDA

As a result, we expect that, in aggregate, these dynamics could reduce FY24 EBITDA by approximately £40m.

We continue to deliver on our refocused strategic priorities and are making clear strides in identifying and executing product and technology developments to improve customer acquisition and retention. Project Romer remains on track, to simplify our operations, improve efficiency and deliver £70m of net run rate cost savings by 2025.

Barry Gibson, Chairman of Entain, commented:

“2023 was a period of necessary, but ultimately positive, transition for Entain. We have significantly strengthened the quality of our revenue base, enhanced our Board, and delivered a resolution to a critical, historic, regulatory issue.

We are making positive progress in our search for a new permanent CEO, and in the meantime Stella is driving the business as it continues to take appropriate actions to deliver changes to drive a better long term performance. We are also making good progress in adding to our Board strength - Ricky Sandler and Amanda Brown joined the Board in recent months and we expect to announce a further appointment shortly.

As our transformation continues the newly formed capital allocation committee has commenced a review of Entain’s markets, brands and verticals. The objectives of the review are to help focus the organization, improve competitive positions and maximize shareholder value.”

Stella David, Interim CEO of Entain, commented:

"2023 presented a number of challenges for the Group, both industry-wide and Entain-specific. I am extremely proud of how our people around the world came together to navigate the business through an eventful and at times difficult year. Against that backdrop, Entain was still able to deliver overall revenue growth of 14% including our US joint venture achieving revenue at the top end of expectations.

We have started the new financial year with a clear plan to accelerate our operational strategy, and are making pleasing progress across a range of initiatives to re-focus our market portfolio, prioritise organic growth, drive our share in the US, and expand our margins. We are entirely focused on operational excellence and outstanding execution and, as a result, are confident that we are on a pathway to delivering future growth. We remain confident that our continued focused execution will drive organic growth into 2025 and beyond.”

FY2023 Financial performance: 1 January to 31 December 2023

Group

Reported1

Year ended 31 December

2023
£m

2022
£m

Change
%

CC2
%

Net gaming revenue (NGR)

4,833.1

4,348.9

11%

11%

Revenue

4,769.6

4,296.9

11%

11%

Gross profit

2,907.0

2,714.7

7%

Underlying EBITDA7

1,007.9

993.2

1%

Underlying operating profit9

641.8

541.8

18%

Underlying profit before tax9

444.9

321.8

Profit after tax9 pre separately disclosed items

339.1

223.9

(Loss)/Profit after tax

(878.7)

32.9

Basic EPS (p)

(141.4)

6.4

Continuing adjusted diluted EPS10 (p)

44.2

60.5

Continuing adjusted diluted EPS excl US10 (p)

51.0

93.2

Dividend per share (p)

17.8

17.0

FY2023 Trading performance: 1 January to 31 December 2023

Total NGR

Sport Wagers

Sports Margin

Reported1

CC2

Proforma CC2,3

Reported1

CC2

 

Online

Sports

6%

7%

(9%)

(3%)

(2%)

+0.8pp

Gaming

17%

15%

2%

Total Online

12%

12%

(3%)

Retail

9%

8%

2%

12%

11%

+0.6pp

Total Group (ex US)

11%

11%

(2%)

 

 

 

BetMGM

35%

36%

 

 

 

 

Total Group inc 50% of BetMGM

14%

14%

2%

 

 

 

Q4 2023 Trading performance: 1 October to 31 December 2023

Total NGR

Sport Wagers

Sports Margin

Reported1

CC2

Proforma CC2,3

Reported1

CC2

 

Online

Sports

12%

15%

(12%)

1%

4%

+0.7pp
+0.1pp PF

Gaming

9%

10%

(1%)

Total Online

12%

14%

(6%)

Retail

7%

7%

(2%)

9%

9%

+1.4pp

Total Group (ex US)

10%

11%

(5%)

 

 

 

BetMGM

21%

29%

 

 

 

 

Total Group inc 50% of BetMGM

12%

14%

(1%)

 

 

 

Notes

      1. 2023 and 2022 statutory results are audited, with the tables presented relating to continuing operations and including both statutory and non-statutory measures
      2. Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2023 exchange rates
      3. Proforma references include all 2022 and 2023 acquisitions as if they had been part of the Group since 1 January 2022
      4. As reported in unaudited FY2023 results on 8 February 2024
      5. BetMGM revenues comprise of sports (Online and Retail) and iGaming revenues
      6. Market share for last three months ending November 2023 by GGR, including only US markets where BetMGM was active; internal estimates used where operator-specific results are unavailable
      7. EBITDA is earnings before interest, tax, depreciation and amortisation, share based payments and share of JV income. EBITDA is stated pre-separately disclosed items
      8. Presented as if revenue share payments of c£34m, which form part of the partnership arrangement with TAB NZ, were treated as a cost of sale rather than forming part of acquisition consideration
      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 9 in the financial statements)
      11. Adjusted net debt excludes the DPA settlement of £585.0m. Leverage also excludes any benefit from future BetMGM EBITDA or the payments due to acquire the minority interests in Entain CEE

Contact

Investor Relations - Entain plc

Media - Entain plc

Powerscourt
Rob Greening / Russ Lynch / Sam Austrums


[email protected]


[email protected]

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

Presentation and webcast

Entain will host a Full Year 2023 Results presentation and Q&A session today, Thursday 7th March at 9:30am GMT, at LSEG, 10 Paternoster Square, London, EC4M 7LS.

Analysts and investors may attend in person, having pre-registered via the In-person registration link, or alternatively join via webcast link: ENTFY23 results presentation

The presentation slides as well as a replay and transcript will be available on our website:

https://entaingroup.com/investor-relations/results-centre/

Upcoming dates:

Q1 Trading Update: 17 April 2024

Annual General Meeting: 24 April 2024

2024 Interim results: 8 August 2024

Dividend Timetable

Announcement date: 7 March 2024

Ex-Dividend date: 14 March 2024

Record date: 15 March 2024

Payment date: 26 April 2024

Inside Information

This announcement contains information that qualifies as inside information within the meaning of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 as it forms part of English law by virtue of the European Union (Withdrawal) Act 2018.  The person responsible for releasing this announcement on behalf of the Company is Simon Zinger, General Counsel.  Upon the publication of this announcement via a regulatory information service, this inside information is now considered to be in the public domain.

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, STS, SuperSport and TAB NZ; 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 30 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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