Entain Plc · LSE:ENT
Entain — GVC Holdings — H1 2019 Earnings Presentation
31 slides from Entain's earnings presentation, Aug 15, 2019
Slide 1: 2019 Interim Results
2019 Interim Results 15 August 2019
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Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT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: Contents
Contents Introduction Kenneth Alexander Financial Review Rob Wood Operational Update Kenneth Alexander Summary Kenneth Alexander GVC Holdings PLC | 2019 Interim Results | 15 August 2019 3
Slide 4: Overview
Overview • Continued strong operational and financial performance • Market share gains in all major Online territories • Group underlying proforma EBITDA1 (pre IFRS 16) 7% behind, but 11% ahead after adjusting for the Triennial Review and incremental taxes • Full year EBITDA expectations now within
Slide 5: Rob Wood, Chief Financial Officer
Rob Wood Chief Financial Officer GVC Holdings PLC | 2019 Interim Results | 15 August 2019 5
Slide 6: Financials: Group P&L
Financials: Group P&L Strong financial performance Reported1 Proforma2 • Group proforma NGR +5% Pre Pre • Online NGR +17% IFRS16 IFRS16 • UK Retail NGR -12% SIX MONTHS 2019 2019 2018 Change 2019 2019 2018 Change CC3 ENDED 30 JUNE £m £m £m % £m £m £m % • European Retail NGR +7% % • Group proforma und
Slide 7: Financials: Proforma Underlying EBITDA Bridge
Financials: Proforma Underlying EBITDA Bridge Strong growth in Online and European Retail despite prior year World Cup; UK Retail ahead of expectations • Total EBITDA growth2 excluding regulatory adjustments and TR impact is +11% • Online EBITDA growth2 excluding regulatory adjustments is +22% UK RG
Slide 8: Online
Online Continued very strong growth in Online Proforma1 NGR +17% (+18% cc) • UK NGR +13% Pre IFRS16 • Germany NGR +23% cc SIX MONTHS ENDED 2019 2019 2018 Change CC2 • Australia NGR +48% cc (+28% adj Neds proforma) 30 JUNE £m £m £m % % • Italy NGR +15% cc Sports wagers 5,542.7 5,542.7 4,905.6 13% 14%
Slide 9: UK Retail
UK Retail UK Retail transitioning well to the post Triennial Review world; ahead of expectations Proforma1 Triennial Review • B2 stakes cut to £2 was implemented 1 April 2019 Pre IFRS16 • Trending ahead of expectations with further £10m SIX MONTHS ENDED 2019 2019 2018 Change EBITDA upgrade 30 JUNE £
Slide 10: European Retail
European Retail Strong growth in Italy and Belgium Proforma1 OTC wagers +11% • Eurobet Italy football wagers +11% Pre IFRS16 • Benefit of prior year shop acquisitions in Ladbrokes SIX MONTHS ENDED 2019 2019 2018 Change CC2 Belgium (22 shops acquired H1 2018) 30 JUNE £m £m £m % % OTC margin 17.3% (-0
Slide 11: Financials: Statutory P&L
Financials: Statutory P&L Reported1 Proforma2 Group proforma underlying EBITDAR -7% Group proforma underlying EBITDA +5% SIX MONTHS ENDED 2019 2018 Change 2019 2018 Change 30 JUNE £m £m % £m £m % (pre IFRS 16 -7%) Group proforma Op. profit -6% Underlying EBITDAR 376.8 265.8 42% 376.8 406.4 (7%) (pre
Slide 12: Financials: Other Separately Disclosed Items
Financials: Other Separately Disclosed Items Reported P&L1 Cashflow Corporate transaction costs £2.5m • Primarily costs associated with the US licencing process SIX MONTHS ENDED 2019 2018 2019 30 JUNE £m £m £m Integration costs £20.0m • Costs related to the integration of GVC and Corporate transacti
Slide 13: Financials: Cashflow
Financials: Cashflow Continued strong operational cashflow generation; free cashflow of £176m in H1 Reported1 Underlying working capital £15.4m outflow • Driven by timing of staff bonus payments SIX MONTHS ENDED 2019 2018 30 JUNE £m £m Capex / Investment in JVs £77.6m outflow • No contributions to U
Slide 14: Financials: Net Debt
Financials: Net Debt Debt stack is flexible. Full year guidance improved to 2.9x: expect to de-lever by at least 0.5x per annum Debt stack • Next material refinancing not due until 2023 Issue Par costs/ Total Value Premium • Implementing minor restructuring to weight AS AT 30 JUNE 2019 £m £m £m debt
Slide 15: FY19 Guidance
FY19 Guidance Guidance reiterated; material new items are positive Reiterated previous guidance from FY18 results (5 March 2019) and CMD (16 May 2019): New updated guidance in orange 2019 Online Cashflow • Online NGR double-digit growth • Capex c£155m • Online contribution margin c40% (after betting
Slide 16: FY20+ Guidance
FY20+ Guidance Reiterated previous guidance from FY18 results (5 March 2019) and CMD (16 May 2019): New updated guidance in orange 2020+ Triennial Impact Synergies • Per CMD: additional £15m EBITDA benefit FY20 Per CMD: onwards • Acceleration of £15m additional cost synergy • Additional £10m EBITDA
Slide 17: Kenneth Alexander, Chief Executive
Kenneth Alexander Chief Executive GVC Holdings PLC | 2019 Interim Results | 15 August 2019 17
Slide 18: H1 Overview
H1 Overview Effective online operating model delivering sustained outperformance TECH + PRODUCT + BRANDS + MARKETING + PEOPLE KEY ENABLERS LOCAL EXECUTION H1 Online NGR Growth in constant currency1 28% 2 23% 15% 16% 13% Australia partypoker Germany UK Italy (1) Growth on a constant currency basis is
Slide 19: UK Online Growth
UK Online Growth Market leading growth in H1 2019 H1 2019 Year-on-year Online NGR growth Sports-led brands Gaming-led brands 16% 15% Not reported Not reported 1% 1% Competitor 3 Competitor 5 Competitor 1 Competitor 2 Competitor 4 Competitor 6 -3% -6% 19
Slide 20: Operational Update: Online Highlights
Operational Update: Online Highlights Operational outperformance • Market share gains: Group is now the number 2 online operator1 UK • Ladbrokes benefitting from leading real-time CRM • Foxy Bingo continued strong growth post platform migration • Successful ‘This is our Game’ bwin campaign Germany •
Slide 21: Operational Update: Product Development
Operational Update: Product Development Continued strong pipeline of new product In-house Games, Third-party Games Product Bingo and Poker and Live Casino Sports Development Customer interface and user experience Product development capability Industry-leading expertise across all domains Global
Slide 22: Operational Update: UK Retail
Operational Update: UK Retail UK Retail ahead of expectations Triennial Review Driving Online Growth and Cash Generation • Initial trends post TR implementation continue to be • Market leading multi-channel offering is a material better than expected – further £10m EBITDA competitive advantage – sig
Slide 23: Operational Update: US
Operational Update: US On track for full US launch in September Completed since CMD In-play sports-betting on New sports-betting mobile mobile and desktop and desktop front-end Online sports- Borgata Sports on betting on desktop mobile and desktop Full GVC w/c GVC marketing and online spor
Slide 24: Integration Update
Integration Update UK platform migration commencing H2 unlocking further ‘best-of-both’ benefits • Key integration initiatives progressing well • Preparation for UK Digital brands platform migrations, starting H2 2019 • Games content integration between GVC and Ladbrokes Coral brands • Procurement s
Slide 25: Regulatory Update
Regulatory Update Scale, geographic diversification, established brands and multi-channel offerings position the Group well in the global regulatory landscape Netherlands Austria • On course to • Tax charges subject to regulate by 2021 litigation. Expected resolution • Group expects to in 2020 recei
Slide 26: Safer Gambling and ESG
Safer Gambling and ESG Our ambition is to be the world’s safest and most trusted gambling operator Responsible Employer Responsible Communities and Markets • Second year of three-year Diversity and Inclusion plan • New three-year partnership with Children with Cancer • Rolled out women-in-leadership
Slide 27: Safer Gambling and ESG
Safer Gambling and ESG Decisive action being taken to improve player protection – working collaboratively with the industry and regulators Safer Gambling • Implementation and expansion of ‘Changing for the Bettor’ strategy • Industry collaboration – ‘Big five’ operator pledge to ten-fold increase in
Slide 28: Summary
Summary • Highly effective online operating model delivering sustained outperformance: • Proprietary technology • Leading product offering • Well-established brands • Cutting edge marketing • Local market expertise • US launch on track for September with full marketing deployment • Responsible Gambl
Slide 29: Q&A
Q&A GVC Holdings PLC | 2019 Interim Results | 15 August 2019 29
Slide 30: Appendix
Appendix GVC Holdings PLC | 2019 Interim Results | 15 August 2019 30
Slide 31: IFRS 16 – H1 Impact
IFRS 16 – H1 Impact GROUP SIX MONTHS ENDED Pre IFRS 16 IFRS 16 adj Post IFRS 16 30 JUNE 2019 £m £m £m Underlying EBITDAR 376.8 - 376.8 Rent and associated costs (53.4) 43.4 (10.0) Underlying EBITDA 323.4 43.4 366.8 Underlying depreciation & amortisation (74.9) (25.0) (99.9) Operating profit 241.9 18