Entain PLC · LSE:ENT
Entain — Sportingbet — Merger or Acquisition (May 2011)
15 slides from Entain's merger presentation, May 2011
Slide 1: Proposed acquisition of Centrebet and placing and open offer
Proposed acquisition Proposed of Bart acquisition ofand placingand Centrebet andQ3 open offer Results Appendices Historics (last 2 years and H1 for both plus Q3 for Sampson) Plus Australian market – impact of regulation slide from Q2 pack 1
Slide 2: Disclaimer
Disclaimer These slides (the “Document") have been issued by Sportingbet plc (the “Company") and concern the proposed placing and open offer by the Company of ordinary shares in the capital of the Company (the "Transaction"), particulars of which will be set out in a prospectus which is expected to
Slide 3: Key highlights
Key highlights Proposed acquisition of Centrebet Ltd for c.A$185m (£119m) Increases exposure to: – Regulated markets – Fast growing market – Non-European market Historic EBITDA* acquisition multiple: 8x Planned to be earnings enhancing in first full year post integration (2012/13)** Create
Slide 4: Centrebet
Centrebet History One of the first online bookmakers (established in 1992; online 1996) ASX listed - market capitalisation of $141m* (£91m) Principal business A leading player in Australian online betting market 69% of total revenue for FY 2010 from Australia; 31% from Europe (principall
Slide 5: Australian retail betting market
Australian retail betting market 2009/10 $m TABs 16,065 On course 648 Phone and internet 5,904 Total betting market 22,617 Sportingbet/Centrebet 1,963 Share of phone and internet 33% Share of total betting Market 9% * Source: Australian Racing Board Fact book 2009/10 5
Slide 6: Fast growing internet market
Fast growing internet market Internet Amounts Actives Wagered IAS / Sportsbet* +20% +46% Centrebet** +23% +46% Sportingbet*** +31% +62% * 2010 compared to 2009 on a proforma basis ** July to Dec 2010 compared to the same period in the prior year *** Aug 2010 – Jan 2011 compared to the same period in
Slide 7: Transaction benefits: Australia
Transaction benefits: Australia Enhances Sportingbet’s position as one of the leading fixed odds bookmakers in the fast growing Australian market* Complementary product offering – Centrebet’s Sports focus; Sportingbet’s horse racing focus Strong synergistic benefits available from merging oper
Slide 8: Increased exposure to regulated markets
Increased exposure to regulated markets UK Australia Proforma NGR for Sportingbet August 4% 27% 2010 to January 2011 plus Centrebet July to December 2010 >30% of revenue from regulated markets >50% once Spain and Greece regulate 8
Slide 9: Transaction benefits: Group
Transaction benefits: Group Enhanced business resilience as exposure to regulated markets increased Proportion of NGR from regulated markets increases to >30% of combined business Potential to rise to over 50% following Greek and Spanish regulation (anticipated early 2012) Strengthened marke
Slide 10: Synergies
Synergies Identified synergies giving a net positive impact on PBT (after closure of Norway) of £9.4m* per annum Expected pre-tax cost synergies from: Staff IT software and hardware Removal of duplicated costs Estimated one-off cash costs of obtaining synergies of £5m To be implemented
Slide 11: Transaction summary
Transaction summary Offer Schemes of Arrangement under Australian law AUS$2 per share giving a total value of c. AUS$185m (£119m)* Offer at c.25% premium to share price on 6th May 2011 Funded (including expenses) £65m firm placing and placing and open offer and £65m convertible bond Appr
Slide 12: Q3 highlights
Q3 highlights Business is in good shape Australia amounts wagered up 14% Like for like sports NGR in Europe up 12% Emerging Markets NGR up 148% In:play up 14% and accounted for 59% of European sports revenue (2009/10: 57%) in the quarter Mobile phone actives up 44% 12
Slide 13: Income Statement
Income Statement Q3 2011 Q3 2010 YTD 2011 YTD 2010 £m £m £m £m Amounts wagered 507.3 520.8 1,576.5 1,486.3 Net revenue 54.7 55.7 162.6 156.9 Costs (42.1) (43.7) (130.4) (126.6) Operating profit* 12.6 12.0 32.2 30.3 Share option charge (0.2) (0.3) (0.7) (0.9) Amortisation (0.4) (0.5) (1.3) (1.5) List
Slide 14: Q3 Operating profit reconciliation
Q3 Operating profit reconciliation £m £m Q3 2010 operating profit* 12.0 Europe sports Volume (2.8) Margin (12.1% vs 9.6%) 7.1 4.3 Australia sports Volume 1.9 Margin (5.4% vs 7.4%) (4.2) (2.3) Betting taxes 0.8 0.8 Casino and gaming effect (0.6) Poker effect (1.2) Increase in costs* (0.4) Q
Slide 15: Summary
Summary Acquisition creates a more balanced, resilient international business: – Increases exposure to regulated markets – Diversifies business risk across economic cycles – Strengthens position in a key growth market Supports Sportingbet strategy: – Sports focused – Regulated – Top 3 local mark