Entain Plc · LSE:ENT
Entain — FY2022 Earnings Presentation
35 slides from Entain's earnings presentation, Mar 9, 2023
Slide 1: 2022 Full Year Results
2022 Full Year Results 9 March 2023
Slide 2: Agenda
Agenda 2022 Overview Jette Nygaard-Andersen CEO Financial Review Rob Wood CFO and Deputy CEO Business & Strategic Performance Jette Nygaard-Andersen Jette Nygaard-Andersen Q&A Rob Wood 2
Slide 3: 2022 Overview
2022 Overview Profitable growth Leadership in the US +10%1 +12%1 +13% $1.44bn c48% EBITDA 2022 3YR CAGR 2022 Group NGR Online NGR Group EBITDA 2022 NGR US adult popn. positive +71% YoY coverage in H2 2023 (+15% inc. BetMGM3) (+18% inc. BetMGM3) Diversified & sustainable performance Positioned for gr
Slide 4: Financial Review
Financial Review Rob Wood Chief Financial Officer and Deputy CEO
Slide 5: Key financial highlights
Key financial highlights Group Online Group BetMGM Net Gaming Net Gaming Underlying Net Gaming Revenue Revenue EBITDA Revenue £4.3bn £3.1bn £993m2,4 $1.44bn +10%cc1,4 -2%cc1 +13% +71% Adj. diluted Net Debt 2022 Dividend Underlying EPS £2,750m £100m Free (excl. US) Cashflow 93.2p3,4 Leverage 2022 17.
Slide 6: 2022 EBITDA bridge
2022 EBITDA bridge +£111.5m YoY (+13%) Strong underlying business performance with 2022 EBITDA of £993m, +13% YoY Channel performances principally reflect Covid comparatives and regulatory headwinds, with Online EBITDA of £828m down £71m YoY and Retail of £280m up £213m YoY • Excluding absorbed regu
Slide 7: Online key metrics (excl US)
Online key metrics (excl US) 2022 Results Comments 2023 Expectations • Lapping prior year Covid comparators Low to mid single digit NGR growth -2%1 • +3%cc growth excluding UK and Netherlands regulatory changes proforma2 growth • 3 year CAGR +12%cc (Low teens total Online growth) • At top end of gui
Slide 8: Cashflow and net debt
Cashflow and net debt Strong underlying free cashflow & committed financing facilities provide flexibility to support our growth strategy As at 31 December Key metrics 2022 2021 EBITDA1 £993m £882m Underlying free cashflow2 £490m £540m (before investment in BetMGM/acquisitions) Net investment in acq
Slide 9: Capital allocation and M&A priorities
Capital allocation and M&A priorities Investment in: Value enhancing acquisitions: US leadership New market entry Organic New audiences Deepening presence M&A growth Entain Platform New audience expansion Product and content innovation Disciplined ROI approach Strong & flexible balance
Slide 10: Growth, diversification and value accretion through M&A
Growth, diversification and value accretion through M&A Delivering value upside Delivering on strategy Deepening presence Expanding presence Adjacent markets £1.7bn in existing markets into new markets and audiences £0.8bn Transaction Value Year 3 Value Chart includes: Crystalbet, Neds, Bet.pt, Enla
Slide 11: 2023 Guidance
2023 Guidance Online Cashflow • Low to mid single digit proforma NGR growth • Underlying capex c£210m plus an additional c£10m license costs (low teens total Online growth) (includes Evolve & acquisitions capex) • Online contribution margin c40% • One-offs (excluding new acquisitions): • Operating c
Slide 12: Business & Strategic Performance
Business & Strategic Performance Jette Nygaard-Andersen Chief Executive Officer
Slide 13: Compelling investment case for shareholder value
Compelling investment case for shareholder value Leveraging scale Operating Sustainable Superior advantages in a growth financial to drive growth market built in delivery superior growth Powerful combination delivering more value than its sum of parts 13
Slide 14: Growth and sustainability strategy for long term success
Growth and sustainability strategy for long term success Vision World leader in betting, gaming and interactive entertainment Purpose Bring moments of excitement into people’s lives Strategy GROWTH SUSTAINABILITY ⬢ Leadership in the U.S. ⬢ Lead on responsibility ⬢ Grow presence in our ⬢ Diversify ou
Slide 15: Operating in a growth market
Operating in a growth market Market dynamics Entain opportunity Market trends are supportive of regulated betting and gaming Significant Total Addressable Market $167bn New $20bn Opps 44 27% +12% $37bn North Potential new Online Global Online2 regulated territories penetration1 CAGR America (in 2022
Slide 16: Leveraging scale advantages and Entain Platform to drive superior growth
Leveraging scale advantages and Entain Platform to drive superior growth #1 Scale largest global sports betting and gaming platform1 Content Customer Technology Brands & Relationships Products & Data M&A Marketing Regulatory Talent Excellence Excellence Expertise Growth Innovation 16 (1) Measured by
Slide 17: Platform enables a better experience for customers
Platform enables a better experience for customers Data & Analytics driving intelligent decision making Customer experience 34% >30 6 33 leading brands continents languages 46% >180m >400TB unique customer of data profile 2020 2021 2022 Contacts per Active2 Intelligent game selection & deployment im
Slide 18: Leveraging platform to engage and broaden customer base
Leveraging platform to engage and broaden customer base Broadening engagement Innovating the offer Tailoring experiences for new and Award winning inhouse content, existing audiences: imaginative new formats: >70k >300k 50% unikrn >10,000 7/10 c74k Coral Racing Ladbrokes of Fanzone users live in two
Slide 19: Entain platform driving success in the US
Entain platform driving success in the US States launches Product development Stability & speed at scale BetMGM now live in 26 jurisdictions covering 48% of US population 1.7m +9 API requests/min >99.9% during Super Bowl Uptime in 2022 Online Record actives Sportsbooks 100% in week preceding Uptime
Slide 20: Entain platform driving success in the US
Entain platform driving success in the US Intelligent marketing Bonus optimisation Superior returns iGaming #1 #3 #2 Sports #3 #1 #2 Total investment2 $0.0bn -$1.0bn BetMGM -$2.0bn -$3.0bn -$4.0bn Comp 2 -$5.0bn -$6.0bn Comp 1 -$7.0bn Data-based approach to acquisition BetMGM on track for Leading po
Slide 21: Diversified, quality revenue growth built in
Diversified, quality revenue growth built in Diversified revenues Increasingly broad customer base Long-term engagement 2022 Online NGR3 by cohort (based on registration age), 10% as a percentage of 1st Year NGR 2% 70% 2% 27% 3% 3% 60% 4% 2022 Online 50% 5% NGR Online Actives2 6% 40% 15% 9% 30% 14%
Slide 22: Strong track record of superior growth
Strong track record of superior growth Customer focused multi-brand strategy leading to market share gains in Entain’s largest markets 2018 2022 2018 2022 2020 2022 2019 2022 20% 46% 19% 2 45% 18% 18%1 18% 44% Market share 16% 42% 14% 40% 14% 40% 13% 12% 38% 11% 10% 36% UK Online Australia Online US
Slide 23: Leading the industry on ESG
Leading the industry on ESG Customer responsibility Investment in colleagues Community commitment UK median hourly pay gap, 3.2% improvement from 5.3% in 2021 12-point RG pledge increase in interactions with 300% wellbeing campaign vs 2021 Investing in grassroots and community sports ARCTM internati
Slide 24: Summary
Summary Attractive industry dynamics create significant global growth opportunity Unique advantages of scale and platform capabilities Customer focus underpins high quality and sustainable growth Delivering profitable growth and superior financial performance Well positioned for further growth 24
Slide 25: Q&A
Q&A =ntain
Slide 26: Appendix
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Slide 27: Strategic market access
Strategic market access BetMGM is live in 26 Jurisdictions with access to c48% of the U.S. adult population n Jurisdictions Retail Online Horse iGaming Bingo Sports Sports Racing Arizona ✓ ✓ Ontario ME Colorado ✓ ✓ WA VT Illinois ✓ ✓ NH MA Indiana ✓ ✓ MT ND MN NY Iowa ✓ ✓ OR ID RI Kansas ✓ ✓ WI MI S
Slide 28: Financials: Group Income Statement
Financials: Group Income Statement Group NGR +10% cc with strong performance in Retail and positive momentum in Online impacted by lapping Covid and absorbing regulatory headwinds Year ended 20225 20215 Change CC1 Group NGR +12% (+10% cc1) 31 December £m £m % % • Online NGR -1% (-2% cc1) despite lap
Slide 29: Online (Excl US)
Online (Excl US) NGR only down -1% (-2%cc) despite lapping a Covid boosted 2021 and absorbing regulatory changes Year ended 20223 20213 Change CC1 NGR -1% (-2% cc1) reflecting strong comparators due to Covid-19 and the 31 December £m £m % % absorption of regulatory headwinds, particularly in the UK
Slide 30: Retail (Excl US)
Retail (Excl US) Retail NGR up +66%cc LFL4 driven by our market leading betting and gaming machines Year ended 20223 20213 Change CC1 Retail performed strongly with NGR +61%cc (+66% LFLcc1,4) 31 December £m £m % % • LFL4 volumes ahead of pre Covid-19 levels in our two largest markets, the UK Sports
Slide 31: Financials: Statutory Income Statement
Financials: Statutory Income Statement Strong operating profit, +12% ahead of 2021 Year ended 20221 20211 Change Share of JV loss £194m 31 December £m £m % • Higher loss YoY driven by a small increase in BetMGM losses as well as the Underlying EBITDAR 1,008.5 898.8 12% impact of FX Rent and associat
Slide 32: Financials: Other separately disclosed items
Financials: Other separately disclosed items One-off £22m cash income with receipts from the Greek Tax Assessment offset by repayment of 2021 furlough monies and M&A related cashflows Profit & Loss Cashflow Tax litigation Year ended 2022 2021 2022 • Cash inflow of £165m relating largely to Greek Tax
Slide 33: Financials: Cashflow
Financials: Cashflow Strong underlying free cashflow generation with closing net debt of £2.75bn and leverage 2.6x on a proforma basis Year ended 2022 2021 Underlying working capital outflow of £102m 31 December £m £m • Largely Largelyduedueto toan anunwind unwindofofthe theprior prioryear yearinflo
Slide 34: Financials: Net debt
Financials: Net debt Closing leverage of 2.8x (2.6x proforma) with sufficient liquidity available to support the Group’s strategy Par Issue costs/ Net debt £2,749.8m or 2.8x (2.6x proforma) Year ended Value Premium Total 31 December £m £m £m • Over £900m invested in acquisitions and BetMGM in 2022 B
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