Entain PLC · LSE:ENT
Entain — GVC Holdings — FY2017 Earnings Presentation
27 slides from Entain's earnings presentation, Mar 9, 2018
Slide 1: 2017 Full Year Results
2017 Full Year Results 9 March 2018 A growing 1 global player
Slide 2: Disclaimer
Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. This presentation has been prepared by GVC Holdings PLC (“GVC”). This presentation includes state
Slide 3: Kenneth Alexander, Chief Executive
Kenneth Alexander Chief Executive 3
Slide 4: Contents
Contents Introduction • Key highlights • Income statements • Exceptional items • Cashflow Financial review • Balance sheet extracts • Debt • Guidance • Sports Brands • Games Brands Divisional review • Current trading & regulatory update • Ladbrokes Coral Acquisition update • Conclusion Summary • Q&A
Slide 5: 2017 Key highlights
2017 Key highlights • Group NGR +17% to €925.6m (pro forma1 2016: €794.3m ); +17% in constant currency +13% to €1,008m including discontinued (pro forma 2016: €894.6m ) • Clean EBITDA2 +40% to €239.5m (pro forma 2016: €170.5m) +33% to €274.2m including discontinued (pro forma 2016: €205.7m) • Clean
Slide 6: Paul Miles, Chief Financial Officer
Paul Miles Chief Financial Officer 6
Slide 7: Pro forma abridged income statement
Pro forma abridged income statement In €m 2017 2016* Change • NGR from continuing operations 17% higher NGR 925.6 794.3 17% NGR (inc discnt’d) 1,008.0 894.6 13% • Top 10 territories all grew NGR; Top 9 Revenue 896.1 772.9 16% NGR growth all >10% Contribution 454.4 420.1 8% • Contribution margin lowe
Slide 8: Income statement – statutory
Income statement – statutory Year ended 31 December 2017 2016 • Strong top line growth from continuing €m €m operations NGR 925.6 743.1 NGR (including discontinued) 1,008.0 843.4 • Share based payments: • LTIP, MIP share options and share bonus Revenue 896.1 723.0 awards • Significant decrease from
Slide 9: Exceptional items
Exceptional items Year ended 31 December 2017 2016 • Significant reduction in exceptional €m €m items M & A costs (7.7) (51.5) Premium listing application costs 0.0 (4.4) • Integration completed Reorganisation costs (23.9) (14.4) Contract termination costs 0.0 (11.7) Accelerated depreciation 0.0 (12
Slide 10: Cashflow – statutory
Cashflow – statutory Year ended 31 December 2017 2016 • Net working capital outflow of €16.0m €m €m mainly due to disposal of Kalixa Clean EBITDA (inc discontinued) 274.2 193.5 • Capital expenditure: Capitalised software development (26.0) (19.0) • €38.4m mainly represented Property, plant and equip
Slide 11: Balance sheet
Balance sheet As at 31 December 2017 2016 €m €m • Reduction in intangibles reflects Goodwill 1,094.3 1,090.3 amortisation of bwin.party acquisition Other intangible assets 437.3 519.1 • Cash balances lower due to refinancing Other non-current assets 22.6 28.3 and dividend payments Total non-current
Slide 12: Debt
Debt As at 31 December 2017 2016 • Group debt facilities consist of: €m €m • Euribor +2.75% €300m six year term loan Loans due <1 year (0.0) (386.5) • €70m revolving credit facility Loans due > 1 year (300.0) (0.0) • Net debt as at 31 December 2017 Gross debt (300.0) (386.5) was €108.6m, representin
Slide 13: Guidance
Guidance • Capital expenditure - Fixed assets €10-15m - Intangibles €20-25m • Depreciation €12-15m • Amortisation - Internally generated assets c. €18-20m - Related to bwin acquisition €120m (for 1 year, €102m 2019-21) • bwin.party synergies Fully secured Restructuring costs €10m • Share based payme
Slide 14: Kenneth Alexander, Chief Executive
Kenneth Alexander Chief Executive 14
Slide 15: Sports Brands: Financial overview
Sports Brands: Financial overview 2016 • Sports margin 10.8% vs 9.4% prior year 2017 (pro forma#) Year ended 31 December €m €m Change • Sustainable sports margin target raised Sports wagers 3,785.6 3,724.3 2% to 10.5% Sports margin 10.8% 9.4% • Wagers +2% despite; Sports NGR 331.2 277.9 19% • Impact
Slide 16: Sports Brands: Progress & outlook
Sports Brands: Progress & outlook 180 Sports Brands Performance 14% Delivered 160 NGR Rebased to 100 12% 140 • Launch of bwin’s Black and Yellow campaign 10% 120 100 8% • VIP programme improvements 80 6% • Merged pre-match and live books 60 4% 40 • Improved coupon management 20 2% 0 0% • New profili
Slide 17: Games Brands: Financial overview
Games Brands: Financial overview 2016 • Investment driving top line growth 2017 (pro forma#) Year ended 31 December €m €m Change • NGR +12% Sports wagers 69.8 65.2 7% • Contribution reflects; Sports margin 8.3% 7.7% • Kalixa disposal Sports NGR 4.7 4.3 9% • Investment in partypoker Gaming/other NGR
Slide 18: Games Brands: Progress and outlook
Games Brands: Progress and outlook Y-on-Y partypoker growth Delivered 60% 52% • 600+ games added (third party plus premium in-house 50% developed titles) 42% 42% 40% • Relaunch of PartyCasino site • New CRM engagement tools 30% 25% • Poker product overhauled – lobby, tables, mobile and loyalty 20% p
Slide 19: Current trading and regulatory update
Current trading and regulatory update • Daily NGR1 + 16% (+ 18% constant currency) • Latin America migrated – completing all significant migrations • Crystalbet acquisition • UK regulatory backdrop continues to evolve • Germany- no material new developments • Increasing number of lander calling for
Slide 20: Ladbrokes Coral Group acquisition update
Ladbrokes Coral Group acquisition update Process • GVC and Ladbrokes Coral Group shareholders approved transaction on 8 March • Completion expected 28 March (subject to regulatory approval) Enlarged Group • One of the world’s largest listed sportsbetting and gaming companies • Highly regulated with
Slide 21: Conclusion
Conclusion • Financial performance and completed technical migration demonstrate GVC’s ability to successfully integrate large scale business while delivering growth • Ladbrokes Coral acquisition proceeding on track and set to transform the business in 2018 • Growth opportunities for the Enlarged Gr
Slide 22: Q&A
Q&A 22
Slide 23: Appendices
Appendices 23
Slide 24: Pro forma continuing quarterly KPIs
Pro forma continuing quarterly KPIs In €000s Q1-2016 Q2-2016 Q3-2016 Q4-2016 Q1-2017 Q2-2017 Q3-2017 Q4-2017 Sports Brands Sports wagers 10,694 10,192 9,442 10,381 10,996 10,324 9,917 10,262 Sports margin % 8.1% 9.8% 10.4% 9.4% 9.1% 9.9% 11.0% 13.1% Sports NGR 703 799 807 728 782 827 877 1,140 Gamin
Slide 25: Overview – GVC today
Overview – GVC today • €3.9bn sports wagering €0.9bn NGR • €239.5m Clean EBITDA Financial* • €178.7m Adjusted PBT • €108.6m net debt as at 31 Dec 2017 • Shares in issue as at 1 Mar 2018: 303,784,807 • >3,000 FTEs and contractors Corporate • 14 offices across four continents • Licenced in 18 jurisdic
Slide 26: Glossary of terms and definitions
Glossary of terms and definitions Acquisition The purchase of bwin.party digital entertainment plc by the Company B2B Business-to-business B2C Business-to-consumer bwin.party bwin.party digital entertainment plc Clean EBITDA Earnings before interest, taxation, depreciation, amortisation, impairment
Slide 27: Glossary of terms and definitions (cont)
Glossary of terms and definitions (cont) KPIs Key Performance Indicators Net debt Cash and cash equivalents (including amounts recorded as assets in disposal groups classified as held for sale), less customer liabilities less interest bearing loans and borrowings. Net Gaming Revenue (“NGR”) Revenue