Entain PLC · LSE:ENT
Entain — H1 2021 Earnings Presentation
30 slides from Entain's earnings presentation, Aug 12, 2021
Slide 1: 2021 Interim Results
2021 Interim Results 12 August 2021
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Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT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 Entain PLC (“Entain”) and comprises the written materials/
Slide 3: Agenda
Agenda OVERVIEW Jette Nygaard-Andersen FINANCIAL REVIEW Rob Wood Q&A 3
Slide 4: Overview
Overview Jette Nygaard-Andersen Chief Executive Officer
Slide 5: First half highlights
First half highlights Strong H1 performance with total Group NGR +11%cc1 Online NGR +27%cc1 with good performance in all major markets Retail performance reflects longer lockdowns; encouraging trends since re-opening BetMGM firmly established as #2 operator in the US Full year EBITDA2,3,4 expected t
Slide 6: Continued momentum as #2 operator in the US
Continued momentum as #2 operator in the US Overall estimated national market share in US sports-betting and iGaming1 22% $357m #2 operator H1 NGR nationwide1,2 +$1bn 30% Forecast Leader in iGaming2 NGR by 2022 24% $32bn Market share in states Long-term total where BetMGM is active2 addressable mark
Slide 7: Market review
Market review 31% online growth in H1 UK Extended lockdown restrictions saw online benefit from retail closures Retail returning to 90% of pre-covid volumes 11% cc1 growth in H1 with improved margins Australia Easing of lockdowns and tough Q2 prior year comparatives Actives up 24% and ac
Slide 8: Financial Review
Financial Review Rob Wood Chief Financial Officer and Deputy CEO
Slide 9: Key financial highlights
Key financial highlights Strong H1 performance with continuing double-digit Online growth Online Group BetMGM Operating Net Gaming Underlying Net Gaming Profit Revenue EBITDA Revenue (excl. US) £1.6bn £401m2,3 $357m £284m3 +27%cc1 +12% +450% +17% Adj. diluted Net Debt Debt Cost Savings EPS (excl. US
Slide 10: H1 EBITDA bridge
H1 EBITDA bridge +£42.2m YoY (+12%) • Continued momentum driving £127.3m (£78.2m) Group EBITDA growth of +12% (+14%cc) £5.8m (£12.7m) • Online EBITDA +35% (+£127m) at £496m driven by longer enforced retail closures, broader sports schedule vs 2020, continuing strong sports margins £401.1m £358.9m an
Slide 11: Cashflow and net debt (excl recent refinancing)
Cashflow and net debt (excl recent refinancing) Underlying free cashflow and financing facilities provide flexibility to support our growth strategy Key metrics As at 30 June 2021 2020 EBITDA1 £401m £359m Underlying free cashflow2 £198m £239m (before investment in BetMGM/acquisitions) Net cash gener
Slide 12: Debt refinancing
Debt refinancing Reinforced balance sheet provides flexibility to support our growth strategy Entain debt maturity £m • Replacement £590m Revolving Credit Facility – £55m larger than previous RCF to increase flexibility – Leverage covenant at 6x, now stepping down to 5.5x Q3 2023 and 5x Q3 2025 (was
Slide 13: Investment in innovation and new opportunities
Investment in innovation and new opportunities Investment in innovation to support and drive new growth opportunities • Investment of c£100m over 3 years focusing on: – Innovation – Research & Development – Product and Content • Innovation investment will be reported within a new segment New Opportu
Slide 14: Evolve cost savings programme
Evolve cost savings programme New efficiencies programme to support investment in innovation and growth opportunities Phased savings programme Cost savings programme • Sustainable cost saving initiatives 2021 £35m expected to deliver recurring annual cost-savings totalling £100m by FY23 • Re-investm
Slide 15: FY 2021 guidance
FY 2021 guidance Group Cashflow (outflows) • FY21 EBITDA expected to be in range of £850 to £900m (including • Capex c£160-170m (including innovation) plus an additional c£10m innovation costs and efficiency savings) license costs • IFRS 16 lease payments c£70m in line with EBITDA add back (+c£5m on
Slide 16: Summary
Summary A strong first half performance; good performances in all major territories Strong momentum in BetMGM as #2 operator Recently acquired businesses performing ahead of expectations Full year EBITDA1,2,3 expected to be in the range of £850m - £900m Efficiency savings programme of £100m by 2023,
Slide 17: Q&A
Q&A
Slide 18: Appendix
Appendix
Slide 19: BetMGM - summary in numbers
BetMGM - summary in numbers c$357m $1bn+ 22% Forecasted 2022 Q2 market share2 across all H1 2021 NGR1 BetMGM NGR1 active jurisdictions $32bn 20-25% 30-35% Long-term total Expected long-term Expected long-term addressable market (TAM) U.S. market share EBITDA margin (1) BetMGM revenues comprise of sp
Slide 20: Growing presence with broad based market access
Growing presence with broad based market access 13 20 Active Expected live jurisdictions jurisdictions in next 12 months 33% 24 Population with Jurisdictions with expected access in market access next 12 months1 secured or anticipated2 (1) Approximate U.S. adult population with access to OSB and / o
Slide 21: Evolve programme – estimated savings, phasing & splits
Evolve programme – estimated savings, phasing & splits Efficiencies encompass both Online and Retail benefitting EBITDA and Capex Cost Savings EBITDA Capex Total 2021 £35m - £35m 2022 £55m £15m £70m 2023 £75m £25m £100m EBITDA split Online Retail Total EBITDA Cost of Sales Opex Cost of Sales Opex 20
Slide 22: Financials: Group Income Statement
Financials: Group Income Statement Strong first half performance with continued Online momentum and Retail now fully reopened Constant • Group NGR 11% (+11% cc) Six months ended 20215 20205 Change Currency1 30 June £m £m % % • Online NGR +28% (+27% cc) Net gaming revenue 1,792.6 1,609.3 11% 11% • Re
Slide 23: Online
Online Online NGR growth of 28% (27%cc) – 22 consecutive quarters of double-digit Online growth Six months ended 20213 20203 Change CC1 • NGR +28% (+27% cc) 30 June £m £m % % • Double-digit NGR growth in all key markets excluding Germany Sports wagers 7,077.3 4,697.2 51% 48% • UK +31%, Australia +11
Slide 24: Retail
Retail Performance heavily affected by Covid-19 but encouraging early trends post reopening Six months ended 20213 20203 Change CC1 • Retail performance heavily impacted by Covid-19 shop closures and 30 June £m £m % % restrictions leading to NGR -46% (-43% LFLcc4) Sports wagers4 527.3 1,068.6 (51%)
Slide 25: Financials: Statutory Income Statement
Financials: Statutory Income Statement Reported profit after tax from continuing activities of £91m • Underlying depreciation and amortisation £110m, 2% lower Six months ended 20211 20201 Change 30 June £m £m % Underlying EBITDAR 410.5 369.1 11% • Share of JV loss £79m Rent and associated costs (9.4
Slide 26: Financials: Other separately disclosed items
Financials: Other separately disclosed items One-off cash costs of £18m largely as a result of integration and one-off legal costs Profit & Loss Cashflow • Tax litigation +£3m reflecting final position on Ladbrokes VAT claim Six months ended 2021 2020 2021 30 June £m £m £m • Still awaiting final rul
Slide 27: Financials: Cashflow
Financials: Cashflow Strong underlying free cashflow generation of £198m and leverage ratio of 2.2x Six months ended 2021 2020 • Underlying working capital outflow of £44m due to timing of payments with 30 June £m £m the full year expected to be broadly neutral Underlying EBITDA 401.1 358.9 Disconti
Slide 28: Financials: Net debt
Financials: Net debt Leverage of 2.2x despite c£380m of acquisitions with sufficient liquidity still available to support the Group’s strategy Par Issue costs/ Six months ended Value Premium Total • Net debt post IFRS £1,951m or 2.2x 30 June £m £m £m • Over £380m invested in acquisitions Bonds (500.
Slide 29: Sustainability Charter
Sustainability Charter Only operate in regulated Scientific approach Best in class corporate markets by end of 2023 Best place to to safer betting and gaming governance work 99% regulated and ARC - Leveraging Strengthened Reduce environmental regulating markets at end technology for player safety Bo
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