TIDMENT
RNS Number : 1202S
Entain PLC
02 November 2023
For Release at 7.00am
2 November 2023
THIS ANNOUNCEMENT CONTAINS INFORMATION THAT QUALIFIES OR MAY
QUALIFY AS INSIDE INFORMATION
Entain plc
("Entain" or the "Group")
Q3 performance in line with updated expectations
Business update on accelerating our operational strategy
Entain plc (LSE: ENT), the global sports betting and gaming
group, today reports trading for the period from 1 July to 30
September 2023 ("Q3") and provides an update on accelerating the
Group's operational strategy.
Q3 Highlights
-- Total Group (including US) Net Gaming Revenue ("NGR") up +7% (+10% cc(2) )
o Group NGR (excluding US) up +7% (+9% cc(2) ), -5% proforma(2,3)
-- Online NGR up +9% (+11%cc(2) ), -6% proforma(2,3) , in line with updated expectations(4)
o Excluding known regulatory impacts(5) , Online NGR up +17%cc(2) , flat proforma(2,3)
o 2-3ppt impact from customer-friendly sports results in September
o Continued strong growth in active customers, +26% YoY (+10% proforma(2,3) )
-- Robust performance in Retail (6) with NGR up 4% (+ 4% cc(2) ), -4% proforma(2,3)
-- BetMGM continues to perform strongly with Q3 NGR of approximately $458m, up c.15% YoY
o 18%(7) market share in markets where it operates (excluding
New York) in sports betting and online gaming
o Continued iGaming strength with 26%(8) market share
o Successful start to the NFL season as Online sports-betting
customers enjoy the benefits of significant investment enhancing
the customer experience
o On track for FY2023 NGR at the upper end of $1.8-$2.0bn
guidance and to be EBITDA positive in H2 2023(9)
-- Continued leadership and progress delivered across our Sustainability Charter
Accelerate Operational Strategy
Over the last three years Entain has undergone a significant
strategic transformation, improving the quality of earnings,
strengthening operations, and aligning structures to best position
the Group to capitalise on future growth opportunities and deliver
shareholder value.
At a presentation today, management will outline key initiatives
to accelerate the Group's operational strategy, including:
-- Focused market portfolio, optimised for organic growth and ROI
o Prioritisation of high growth, high return markets, including US, Brazil CEE and New Zealand
o Drive profitable growth in core markets, including the UK,
Australia, Italy, Germany and the Baltics
o Exit smaller non-core operations
-- Return to organic growth at least in line with our markets (c.7%(10) CAGR) from 2025
-- Drive US market share to 20%-25% through investment in
product & pricing capabilities, customer acquisition and
maximising the omnichannel opportunity
-- Delivery of Project Romer to support expansion of Online
EBITDA margin to 28% by 2026(11) and 30% by 2028(11)
o Simplification of the organisation to improve operational leverage and drive cost efficiencies
o Gross cost savings of GBP100m (net cost savings GBP70m) by 2025
-- Enhanced Governance:
o Plan to appoint four new non-executive directors, including
Amanda Brown's appointment from 8 November 2023
o Creation of a capital allocation committee of non-executive directors
Guidance
-- FY2023 Group EBITDA(12) (pre TAB NZ accounting) guidance:
o Q3 performance tracked to EBITDA guidance of GBP1.00bn -
GBP1.05bn(12,13) as stated on 25 September 2023
o During October, while volumes have been in line with
expectations, continued customer friendly results(14) have seen
sports margins impact EBITDA by approximately GBP45m
o This does not impact our expectations beyond Q4 2023
-- FY2024
o Pro forma Online NGR growth expected to be low single digit,
supported by return to growth during H2 2024
o Online EBITDA margin(11,15) expected to be 24%-25%
-- Detailed guidance available at: https://entaingroup.com/investor-relations/results-centre
Jette Nygaard-Andersen, Entain's CEO, commented :
"Entain has undergone a profound transformation over the last
few years, and now has strong foundations from which to move into
its next phase of growth. We have made significant investments in
responsible gambling initiatives. While these steps have impacted
EBITDA, they are unquestionably the right thing to do to improve
our long-term prospects.
From here, we have a clear plan to focus our portfolio for
organic growth, drive our market share in the US, improve our
operational leverage, and increase our EBITDA margins. The wide
range of initiatives that are underway will cement our position as
a customer-focused industry leader, enable us to achieve our
strategic ambitions, and deliver enhanced returns for all our
stakeholders."
Q3: 1 July to 30 September 2023
------------------ --------------------------------------------------------------------
Total Sport Sports
NGR Wagers Margin
------------------------------------ -------------------- --------
Reported(1) cc(2) Proforma(2,3) Reported(1) cc(2)
------------------ ------------ ------ -------------- ------------ ------ --------
Online
Sports 1% 4% (15%) (6%) (2%) +0.5pp
Gaming 14% 15% 1%
Total Online 9% 11% (6%)
Retail (6) 4% 4% (4%) 12% 11% (0.6pp)
Total Group
(ex US) 7% 9% (5%)
BetMGM 8% 15%
Total Group
incl 50% BetMGM 7% 10%
------------------ ------------ ------ -------------- ------------ ------ --------
YTD: 1 January to 30 September 2023
------------------ --------------------------------------------------------------------
Total Sport Sports
NGR Wagers Margin
------------------------------------ -------------------- --------
Reported(1) cc(2) Proforma(2,3) Reported(1) cc(2)
------------------ ------------ ------ -------------- ------------ ------ --------
Online
Sports 4% 4% (8%) (4%) (4%) +0.8pp
Gaming 19% 17% 4%
Total Online 13% 11% (2%)
Retail (6) 9% 8% 3% 12% 11% 0.3pp
Total Group
(ex US) 11% 10% in line
BetMGM 41% 40%
Total Group
incl 50% BetMGM 15% 14%
------------------ ------------ ------ -------------- ------------ ------ --------
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 for all 2022 and 2023 acquisitions for the full period in both years
(4) As stated in trading update on 25 September 2023
(5) Adjusted for impact of known regulatory changes and RG
measures including UK affordability measures and lack of
enforcement in Germany post licensing
(6) Retail operates in UK, Italy, Belgium, Republic of Ireland,
Croatia, New Zealand and Poland
(7) Market share for last three months ending August 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
(8) Market share for last three months ending August 2023 by
GGR, including only U.S. markets where BetMGM was active; internal
estimates used where operator specific results are unavailable
(9) Based on current assumption of future live markets
(10) Regulus Partners estimates of Online market growth weighted for Entain's market portfolio
(11) Includes impact from accounting treatment of TAB NZ profit share payment arrangement
(12) 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
(13) Excludes an estimated cGBP35m benefit to EBITDA from TAB NZ
profit share payments which are deemed to form part of
consideration under IFRS 3
(14) Since 2019, Entain's online business has only seen negative
football margins for a full week on three occasions, two of which
were the last two weeks of October 2023
(15) Reflecting the a nnualisation of TAB NZ acquisition, new
taxes in Brazil (assumed from 1 July), partially offset by Project
Romer savings
Enquiries:
Investor Relations - Entain plc investors@entaingroup.com
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 media@entaingroup.com
Lisa Attenborough, Head of Corporate Communications
Jay Dossetter, Head of Corporate PR
Jodie Hitch, PR Manager
Powerscourt Tel: +44 (0) 20 7250 1446
Rob Greening/Russ Lynch/Sam Austrums entain@powersco urt-group.com
Presentation
Entain will host a presentation and Q&A session at 12.00
noon today, Thursday 2(nd) November 2023.
Participants may join via the webcast through this link Entain 2
Nov presentation or attend in person, having registered via the
link In-person registration
A replay, transcript and slides will be available on our website
:
https://entaingroup.com/investor-relations/results-centre/
Upcoming dates:
BetMGM Business Update: 4 December 2023
Entain Sustain: Week of 11 December 2023
Inside Information
This announcement contains information that qualifies or may
qualify 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. The words "believe", "expect",
"anticipate", "intend" and "plan" and similar expressions identify
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. These forward-looking statements
include all matters that are not historical facts and include,
without limitation, those statements regarding the Company's
financial position, potential business strategy, potential plans
and potential objectives. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the Company's actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous
assumptions regarding the Company's present and future business
strategies and the environment in which the Company will operate in
the future. Further, certain forward-looking statements are based
upon assumptions of future events which may not prove to be
accurate. 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 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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END
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