Entain PLC · LSE:ENT
Entain — Sportingbet — FY2012 Earnings Presentation
25 slides from Entain's earnings presentation, Oct 3, 2012
Slide 1: Final Results Year ended 31 July 2012
Final Results Year ended 31 July 2012 3 October 2012
Slide 2: Highlights
Highlights • 80% of revenue during the year derived from regulated or taxed jurisdictions • Centrebet acquisition completed 31 August 2011 • Disposal of Turkish language website completed on 21 November 2011 • Updated European in:play product suite launched • Mobile trading strongly • Final dividend
Slide 3: Agenda
• Financial review • Regulatory update • Operational review • Summary and outlook
Slide 4: Financial review: Income Statement
Financial review Income Statement Year ended 2012 Year ended 2011 £m £m Amounts wagered 2,349.2 2,053.9 Total revenue 188.9 206.3 Costs (156.7) (168.2) Operating profit* 32.2 38.1 Share option charge (0.9) (1.2) Amortisation (9.5) (1.7) Exceptional items (71.6) (10.8) Other income 10.7 - Net finance
Slide 5: Operating profit reconciliation
Financial review Operating profit reconciliation £m £m 2011 operating profit 38.1 Europe sports • Volume (6.8) • Margin (9.9% vs 10.2%) (3.3) (10.1) Australia sports • Volume 10.6 • Margin (7.1% vs 6.1%) 9.5 20.1 Betting taxes (14.6) Casino and gaming effect (3.7) Poker effect (4.9) Decrease in cost
Slide 6: Financial review: Balance sheet
Financial review 31 July 2012 31 July 2011 Balance sheet £m £m Non-current assets Goodwill 101.7 41.8 Tangible and intangible assets 138.5 60.6 Working capital Trade and other receivables 19.8 16.3 Cash raised re Centrebet - 124.0 Cash and cash equivalents 42.4 56.2 Derivative asset 0.5 - Other paya
Slide 7: Financial review: Cash flow
Financial review Cash flow £m £m Gross cash as at 1 August 2011 180.2 EBITDA 46.1 Working capital 4.4 50.3 Acquisitions (108.6) Turkey 10.7 Capex (25.9) Tax (1.5) DOJ payment (11.6) Dividend (11.3) Interest (6.5) Proceeds from new loans 15.4 Exceptional cost (48.8) Net cashflow (188.1) Gross cash as
Slide 8: Regulatory update
Regulatory update • We welcome regulated markets • Continuity of future revenue • Consumer protection • Growth in overall size of market • Stable payment processing • Group will apply for a licence where • Market is economically viable • Regulatory environment is stable • Equitable tax system • Enfo
Slide 9: Current regulation
Current regulation • Australia, Spain, Italy, Malta, South Africa, UK • Licensed • Greece • Opted into tax regime • Germany • Applied for a license • Australia • Interactive Gaming Act review ongoing 9 Sportingbet Plc – final results year ended 31 July 2012 9
Slide 10: Operational review
Operational review Underlying strategy remains unchanged:- • Focus on sport • Industry leading breadth of product offering • Something to bet on every minute of every hour of every day • Achieve consistently above average margin whilst maintaining price competitiveness • Supported by • Comprehensive
Slide 11: Group geographical breakdown (post-tax gaming revenue)
Operational review Group geographical breakdown (post-tax gaming revenue) Turkey 22% Aus Turkey Aus 18% 7.1% 42.8% Other 23% Greece 14% Czech Rep Emerging Mkts 3.7% Spain 5% Germany 13% 5% Emerging Mkts 4.8% Germany UK 4.7% Spain Greece 4.6% 7.4% 9.4% 2012 2011 11 Sportingbet Plc – final results yea
Slide 12: Group product breakdown
Highlights Group product breakdown Sports betting continues to drive the business with sports Sports amounts wagered up 16% 76% (2011: 71%) Soccer 46% Casino/games NGR down 22% as Casino & games affected by economic conditions in 18% key markets (2011: 21%) Poker NGR down 43% Aus horse Poker racing
Slide 13: Europe
Europe • Refocusing around regulated markets • Currently regulated: Spain, UK, Denmark and Greece • 46% of European NGR is now regulated or taxed • £15m of costs removed to mitigate tax burden: 25% of fixed cost base • Trading remains difficult in the near to medium term: • Bedding in different and
Slide 14: Turkey
Turkey • Disposed to East Pioneer 21 November 2011 • Consideration a minimum of €142.5m payable over three to six years • No cap on consideration. Receive open ended 75% of revenues over that period as a kicker • Received total income of €20m in first year • Currently exceeding our expectations 14 S
Slide 15: Australia
Australia • Acquisition of Centrebet completed 31 August 2011 • Fully integrated by end of June 2012 • Pre tax synergies of A$23m achieved, compared to expected A$14.6m • Now have less people in total than Centrebet had when we acquired them • Centrebet moved from third party platform and mobile to
Slide 16: Outlook and Summary
Outlook and Summary • Over 80% of revenue now derived from regulated or taxed countries • Well positioned in key regulated markets • European economic outlook remains challenging • Solid start to new financial year in line with expectations 16 Sportingbet Plc – final results year ended 31 July 2012
Slide 17: Australia Snapshots
Australia Snapshots NGR August 2011 NGR August 2012 Total: $5.7m Sportingbet Plc – final results year ended 31 July 2012 17
Slide 18: Australia Snapshot
Australia Snapshot • Product • Leading sport and racing product • Online and mobile • Efficiency • Two brand teams • All other costs and operations pooled • Easy to add further brands (B2B) • Brand • Two brands cover all the bases • Old vs Young; serious vs recreational; big hitter vs $10 punter 18
Slide 19: Q&A
Q&A Analyst presentation 3 October 2012
Slide 20: Appendix
Appendix ‘sportingbet 20
Slide 21: Net gaming revenue
Net gaming revenue 31 July 2012 31 July 2011 % change £m £m Europe Sports (8.3% vs 10.0%) 68.1 118.9 -42% Casino & games 37.8 47.5 -20% Poker 11.3 17.7 -36% 117.2 184.1 -36% Australia Sports (5.8% vs 4.9%) 87.4 40.2 +117% Gaming revenues (post gaming taxes) 204.6 224.3 -9% Customer bonus adjustment
Slide 22: Australia KPI's
Australia KPI’s 31 July 2012 31 July 2011 +/- Sports actives 172,003 82,200 +109% Internet Sports bets 39.2m 26.4m +49% Sports bets / active 262 341 -23% Sports bet size A$34 A$26 +34% Sports margin (post tax) % 6.8% 6.8% - Telephone Sports bets 1.5m 1.4m +8% Sports bets / active 50 77 -35% Sports b
Slide 23: Europe KPI's
Europe KPI’s 31 July 2012 31 July 2011 +/- Sports actives 426,016 429,154 -0.7% Sports bets 72.8m 78.9m -7.7% Sports bets / active 171 184 -7.1% Sports bet size £11.28 £15.01 -26% Sports margin (post tax) % 8.3% 10% -17% Yield per sports active £1.60 £277 -42% Casino and games bets 587.7m 581.4m +1%
Slide 24: Disclaimer
Disclaimer These slides and this presentation are provided to you for information only. These slides and this presentation do not constitute, or form part of, any invitation or offer to any person to subscribe for, otherwise acquire, or dispose of any shares in Sportingbet Plc (the “Company”). These
Slide 25: The End
The End 25