Entain PLC · LSE:ENT
Entain — Ladbrokes — FY2008 Earnings Presentation
17 slides from Entain's earnings presentation, Feb 19, 2009
Slide 1: Sir Ian Robinson, Chairman; Brian Wallace, Group Finance Director
Sir Ian Robinson Chairman 19 February 2009 1 Brian Wallace Group Finance Director 19 February 2009 2
Slide 2: Summary of performance; Debt summary
Summary of performance 2008 2007(1) Variance Year ended 31 December £m £m B(W)% Continuing operations Operating profit(2) excluding High Rollers 243.8 241.7 0.9 High Rollers 80.1 179.0 (55.3) Operating profit(2) 323.9 420.7 (23.0) Net finance costs(2) (65.2) (67.7) 3.7 Profit before tax(2) 258.7 353
Slide 3: Summary of performance; Betting and Gaming (exc High Rollers)
Summary of performance 2008 2007(1) Variance Year ended 31 December £m £m B(W)% Continuing operations Operating profit(2) excluding High Rollers 243.8 241.7 0.9 High Rollers 80.1 179.0 (55.3) Operating profit(2) 323.9 420.7 (23.0) Net finance costs(2) (65.2) (67.7) 3.7 Profit before tax(2) 258.7 353
Slide 4: UK Retail – Results and KPIs
UK Retail – Results 2008 2007 Variance Year ended 31 December £m £m B(W)% OTC gross win 487.8 490.9 (0.6) Machines gross win 286.1 248.4 15.2 Total gross win 773.9 739.3 4.7 Adjustments to gross win (1) (50.8) (37.5) Net revenue 723.1 701.8 3.0 Associate income 3.7 4.0 Gross profits tax (71.6) (72.1
Slide 5: Ireland; eGaming – Net revenue
Ireland Year ended 31 December 2008 2007 Variance £m £m B(W)% Gross win 91.5 61.8 48.1 Fair value adjustments (0.9) (0.4) Net revenue 90.6 61.4 Duty / Gross profits tax (7.4) (4.4) Other costs (58.8) (36.9) (59.3) Operating profit 24.4 20.1 21.4 Like for like gross win growth (6.6)% 5.4% Shop number
Slide 6: eGaming – Results and KPIs
eGaming – Results 2008 %age of 2007 %age of Variance Year ended 31 December £m £m net revenue B(W)% net revenue Gross win 190.1 156.5 21.5 Fair value adjustments (1) (17.9) (13.0) Net revenue 172.2 143.5 20.0 Gross profits tax (9.4) 5.4 (7.9) 5.5 Levy and licences (3.0) 1.7 (2.7) 1.9 Staff costs (19
Slide 7: Telephone Betting – Results and KPIs
Telephone Betting – Results (exc High Rollers) 2008 %age of 2007 %age of Variance Year ended 31 December £m £m B(W)% net revenue net revenue Gross win 27.8 30.5 (8.9) Fair value adjustments (0.5) (0.3) Net revenue 27.3 30.2 (9.6) Gross profits tax (4.0) (4.5) 11.1 Levy (1.7) (1.7) Staff costs (9.4)
Slide 8: Analysis of 2008 Capex; Cash Flow
Analysis of 2008 Capex 2008 2007 Year ended 31 December £m £m Capex UK Retail 33.1 49.2 Ireland 11.7 7.9 Italy 14.0 4.9 eGaming and Telephone Betting 5.1 5.8 Other 4.6 3.2 68.5 71.0 Statutory and licence acquisitions Eastwoods 118.1 - Sponsio - 37.8 Casino - 10.7 Other (2008 - Italy: £15.3m, Ireland
Slide 9: Christopher Bell – UK Retail
Christopher Bell Chief Executive 19 February 2009 17 UK Retail • 2,091 shops – Good condition – Scaling back capex to £25 million • 8,044 machines in 2008 – 15.2% GW growth • OddsOn! – Launched June 2008 – 564,000 cards issued – 200,000 used each week – £8.6m of free bets and bonuses – Understanding
Slide 10: UK Retail; Ireland
UK Retail • Improving product offering – Co-ordination of Turf TV/SIS broadcast – Ladbrokes.com content on all 6,673 tills • Shop estate management – 68 shops refurbished • Plan 2009 – 50 shops to refurbish – 53 relocated & extended – 20 relocate & extend – 19 new licences – 25 new licences – 61 sho
Slide 11: Italy & Spain; Other International Development
Italy & Spain • 86 shops • Sportium brand – JV with Cirsa • 51 corners • Madrid licence granted April 2008 • Roll-out took longer than • 45 outlets trading intended – Cirsa or 3rd party locations • Fast growing re-regulated market • Focus 2009: double no. of outlets • Large supply increase • Further
Slide 12: eGaming – delivering the strategy; 2009 initiatives
eGaming – delivering the strategy • As expected Nordic initiatives – EBIT 2008 £55m – 20% NGR growth – 21% new customer sign-ups TV advertising Live streaming 23 eGaming – 2009 initiatives • Poker: – Joined microgaming network last week • Sportsbook: – Polish language/currency site Dec 08 – 6 additi
Slide 13: Telephone Betting; Regulation
Telephone Betting • £80.1m of High Rollers EBIT : – Positive for cash & debt • Core business declining – Competitive landscape – Offshore enjoy favourable tax, levy and regulatory environment 25 Regulation • UK – Careful balance between protecting vulnerable, preventing crime and generating taxes –
Slide 14: UK & Irish horse race abandonments
27 UK & Irish horse race abandonments 140 120 Cumulative abandonments 100 in UK & Ireland 80 60 40 20 0 May Mar Apr Aug Oct Nov Dec Feb* Jan Jun Sep Jul 2006 2007 2008 2009 * 2009 data up until 15th Feb 2009 28
Slide 15: Differentiating Ladbrokes; Q&A
Differentiating Ladbrokes • Consistent approach to leverage • Focussed upon organic growth • Most experienced management team • Diversified business internationally • High Rollers cash profit • Strong cash generation, debt & tax position 29 Q&A 30
Slide 16: Appendix – eGaming KPIs
Appendix 31 eGaming – KPIs Year ended 31 December 2008 2007 Variance Sportsbook % B(W) Gross win margin 7.8% 7.2% Unique active players (000s) 485 421 15.2 Average monthly active player days (000s) 753 648 16.2 Yield per unique active player (£) (1) 127 124 2.4 Casino Unique active players (000s) 17
Slide 17: Other European Retail; UK Retail – Adjustments to gross win
Other European Retail Year ended 31 December Gross Win Operating Profit 2008 2007 Variance 2008 2007 Variance £m £m B(W)% £m £m B(W)% Ireland 91.5 61.8 48.1 24.4 20.1 21.4 Belgium 39.7 34.8 14.1 3.1 3.2 (3.1) Italy 20.9 6.5 221.5 (6.9) (1.6) (331.3) Total 152.1 103.1 47.5 20.6 21.7 (5.1) 33 UK Retai