REG - Entain PLC - Q3 Trading Update

EntainAnnouncement

17/10/2024 07:00

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RNS Number : 5071I  Entain PLC  17 October 2024

17 October 2024

 

Entain plc

("Entain" or the "Group")

 

Further strategic and operational progress; Q3 performance ahead of
expectations

FY24 Group EBITDA now expected to be towards the top end of guidance

 

Entain plc (LSE: ENT), the global sports betting and gaming group, today
reports trading for the period from 1 July to 30 September 2024 ("Q3"), as
well as providing an update on strategic progress and expectations for FY24.

·     Total Group Net Gaming Revenue ("NGR"): including 50% share of
BetMGM(1), up +8%, +10%cc(2), and +7%cc(2) on a proforma(3) basis

·    Improving Online NGR growth continues: Q3 Online NGR (excluding US)
ahead of expectations, up +10%, +12%cc(2), and +9%cc(2) on proforma(3) basis

o  UK&I returned to YoY growth sooner than expected

o  All key markets delivered growth in Q3

·      Encouraging start to H2 for BetMGM: Q3 NGR c.+18%cc(2) YoY and
seeing market share stabilisation

·     FY24 guidance upgraded: stronger than expected Q3 performance and
increased confidence for the balance of the year

o  Expect mid single-digit proforma(3) constant currency growth in Online NGR
(from low single digit(4))

o  Group EBITDA(5) now expected to be towards the top of the
£1,040m-£1,090m guidance range

 

Gavin Isaacs, CEO of Entain, commented:

"My first few weeks as CEO of Entain have reaffirmed my view that this is a
very good business operating in a highly attractive global industry. Entain
has great brands, an enviably diverse global portfolio and is bursting with
talent, ambition and opportunities. Entain is already on a path of strategic
and operational improvement, with the strong Q3 performance demonstrating the
progress achieved so far. We are at the beginning of the journey and I'm
looking forward to accelerating our progress, leading the business in our next
growth chapter and capturing the many exciting opportunities ahead."

 

Q3 trading highlights:

Group Q3 performance ahead of expectations, as operational execution continues
to deliver improving organic revenue growth.

·      Total Group NGR excluding 50% share of BetMGM(1) up +8%cc(2), and
+6%cc(2) on a proforma(3) basis

·    On a proforma(3) basis, Online NGR (exc. US) was up +9%cc(2) driven
by volume growth and a YoY sports margin tailwind, whilst Retail NGR was down
-1%cc(2)

·      UK & Ireland NGR up +2%cc(2) (Online +6%cc(2), Retail
-2%cc(2))

o  UK&I Online positive YoY growth reflects the lapping of prior year
regulatory implementation as well as product, offering and customer journey
enhancements

·      International(6) NGR up +9%cc(2) on a proforma(3) basis (Online
+10%cc(2), Retail flat cc(2))

o  Brazil (+48%cc(2)) continued to outperform expectations

·     Entain CEE(7) NGR up +11%cc(2) (Online +13%cc(2), Retail +2%cc(2))
on a proforma(3) basis, with SuperSport in Croatia continuing to perform
particularly strongly

·    BetMGM(1) Q3 NGR demonstrates continuing acceleration, up
c.+18%cc(2) versus prior year, reflecting our improved product and increased
investment in player acquisition

o  Market share stabilisation (15%(8,9)) with iGaming (22%) and Online Sports
Betting (8%)

o  BetMGM's enhanced sports betting experience including Entain's Angstrom
capabilities across MLB, NBA, NFL & NCAAF driving increased parlay bet mix
& Gross Gaming Revenue (GGR) hold

o  Record iGaming revenues in Q3 with FTD's up +70% and strong online sports
to gaming cross-sell in NFL season to date

o  Encouraging trends from single account single wallet integration in Nevada
with strong FTD growth and player engagement continuing upon return to home
state(10)

 

Strategic progress highlights:
Continued delivery against our strategic priorities of organic revenue growth,
margin expansion and winning in the U.S, with operational focus on must-win
markets, product enhancements and organisational efficiency.

·    Gavin Isaacs joined Entain as Chief Executive Officer on 2 September
2024, and Stella David succeeded Barry Gibson as Chair on 30 September 2024

·    The Board's Capital Allocation Committee completed its review of
strategic alternatives for Crystalbet, concluding not to pursue a sale.
Crystalbet is Georgia's leading sports betting and gaming brand with strong
growth and cash generation. Third party interest did not exceed its value to
Entain as an attractive part of our global portfolio

·   Progress continues on our core product and technology roadmap:
improving brilliant basics across our platforms, scaling our localisation
capabilities and accelerating product delivery velocity in key markets to
provide what matters most to our customers

o  BetMGM's sports betting experience now includes enhanced parlay and player
prop offerings, powered by Angstrom's differentiated market pricing
capabilities, as well as new streamlined live betting and bet slip features

o  BetMGM became the first sports betting app to offer Nevada bettors
seamless, nationwide connectivity through a single, digital wallet, unlocking
BetMGM's unique omnichannel opportunity

 

Outlook:

As a result of a stronger than expected Q3 performance and increased
confidence for the balance of the year, FY24 Online proforma(3) NGR growth is
now expected to be mid single-digit positive(4), on a constant currency(2)
basis. As such, FY24 Group EBITDA is expected to be towards the top end of our
£1,040m - £1,090m guidance range.

 

Q3 2024 Trading performance:

                       Q3 2024: 1 July to 30 September 2024
                       Total                                         Gaming  Sports  Sports        Sports

                       NGR                                           NGR     NGR     Wagers        Margin
                       Reported(11)  CC(2)  Proforma CC(2,3)         Proforma CC(2,3)

 UK & Ireland          +2%           +2%    +2%                      +3%     (1%)    0%     +0.1pp
    Online UK&I    +6%           +6%    +6%                      +8%     0%      0%     +0.4pp
    Retail UK&I    (2%)          (2%)   (2%)                     (2%)    (2%)    0%     (0.1pp)

 International(6)      +6%           +9%    +9%                      +9%     +8%     +3%    +0.1pp
    Online Int'l       +7%           +10%   +10%                     +9%     +10%    +3%    +0.3pp
    Retail Int'l       (1%)          0%     0%                       +7%     (1%)    +6%    (1.2pp)

 CEE(7)                +53%          +54%   +11%                     +19%    +8%     +10%   +0.2pp
    Online CEE         +55%          +56%   +13%                     +21%    +9%     +10%   +0.4pp
    Retail CEE         +43%          +43%   +2%                      +0%     +2%     +8%    (1.0pp)

 Group (ex US)         +7%           +8%    +6%                      +6%     +5%     +3%    +0.2pp
    Online             +10%          +12%   +9%                      +9%     +8%     +3%    +0.4pp
    Retail             (0%)          0%     (1%)                     (2%)    (1%)    +2%    (0.5pp)
 BetMGM(1)             +17%          +18%   +18%
 Total Group inc.      +8%           +10%   +7%

 50% of BetMGM(1)

 

 

Q3 YTD 2024 Trading performance:

                       Q3 YTD 2024: 1 January to 30 September 2024
                       Total                                         Gaming  Sports  Sports        Sports

                       NGR                                           NGR     NGR     Wagers        Margin
                       Reported(11)  CC(2)  Proforma CC(2,3)         Proforma CC(2,3)

 UK & Ireland          (4%)          (4%)   (4%)                     (3%)    (4%)    (7%)   +0.6pp
    Online UK&I    (4%)          (4%)   (4%)                     (3%)    (5%)    (12%)  +0.7pp
    Retail UK&I    (4%)          (4%)   (4%)                     (4%)    (3%)    (2%)   0.0pp

 International(6)      +7%           +10%   +4%                      +6%     +3%     +1%    (0.2pp)
    Online Int'l       +7%           +10%   +6%                      +5%     +4%     +1%    (0.1pp)
    Retail Int'l       +3%           +6%    (3%)                     +10%    (4%)    +3%    (1.3pp)

 CEE(7)                +96%          +100%  +12%                     +23%    +8%     +11%   (0.2pp)
    Online CEE         +99%          +103%  +13%                     +25%    +9%     +12%   +0.1pp
    Retail CEE         +82%          +86%   +6%                      +7%     +6%     +7%    (0.4pp)

 Group (ex US)         +6%           +8%    +1%                      +1%     +1%     0%     +0.1pp
    Online             +9%           +12%   +4%                      +3%     +4%     0%     +0.2pp
    Retail             0%            +1%    (3%)                     (3%)    (3%)    0%     (0.4pp)
 BetMGM(1)             +7%           +10%   +10%
 Total Group inc.      +7%           +8%    +2%

 50% of BetMGM(1)

 

Notes

(1)   BetMGM revenues comprise of Sports (Online and Retail) and iGaming
revenues

(2)   Growth on a constant currency basis is calculated by translating both
current and prior year performance at the 2024 exchange rates

(3)   Proforma references include all 2023 acquisitions as if they had been
part of the Group since 1 January 2023

(4)  Guidance at Interim Results (8 August 2024) upgraded to FY24 Online NGR
proforma constant currency growth of low single-digit positive, from
previously low single-digit negative as provided at Full Year 2023 Results (7
March 2024)

(5)  EBITDA is defined as earnings before interest, tax, depreciation and
amortisation, share based payments and share of JV income. EBITDA is stated
pre-separately disclosed items

(6)  International segment comprises of all other countries outside the UK
& Ireland, Entain CEE and US reporting segments, including Australia,
Italy, Brazil, Netherlands, Georgia, New Zealand and Germany

(7)   Entain Central and Eastern Europe segment (Entain CEE) comprises of
Croatia and Poland

(8)  Combined market share for North America by GGR for last three months
ending August 2024 (includes US markets where BetMGM was active and an
estimation for Ontario); internal estimates used where operator-specific
results are unavailable

(9)  Increase from 13% reported in H1 results (8 August 2024) reflects
seasonality, with a higher iGaming weighting during the quieter sports
calendar months

(10) References states where BetMGM operates licenced Online Sports Betting
and/or iGaming

(11) 2024 results are unaudited, with the tables presented relating to
continuing operations and including both statutory and non-statutory measures

 

 

Q3 Conference Call & Audio Webcast

An analyst call will be held today, Thursday 17 October 2024 at 9:00am BST.
Participants may join via webcast or by conference call dial in, approximately
10 minutes before the start of the call.

Live webcast link: Entain Group 2024 Q3 Trading Update
(https://kvgo.com/IJLO/Entain_Q3_Trading_Update_)

To participate in the Q&A, please use dial ins below and register via the
following link: Register for Q&A
(https://www.netroadshow.com/events/login?show=0719e14f&confId=71602)

                UK
                         +44 20 3936 2999

                US
                          +1 646 787 9445

                Global Dial-In Numbers
(https://www.netroadshow.com/events/global-numbers?confId=71602)

                Access Code:        537826

A replay and transcript will be available on our website: Results Centre -
Entain Group (https://www.entaingroup.com/investor-relations/results-centre)

Enquiries:

 Investor Relations - Entain plc        investors@entaingroup.com (mailto:investors@entaingroup.com)
 Media - Entain plc                     media@entaingroup.com (mailto:media@entaingroup.com)
 Sodali & Co                            Tel: +44 (0) 20 7250 1446

 Rob Greening/Russ Lynch/Sam Austrums   entain@sodali.com (mailto:entain@sodali.com)

 

About Entain plc

Entain plc (LSE: ENT) is a FTSE100 company and is one of the world's largest
sports betting and gaming groups, operating both online and in the retail
sector. The Group owns a comprehensive portfolio of established brands; Sports
brands include BetCity, bwin, Coral, Crystalbet, Eurobet, Ladbrokes, Neds,
Sportingbet, Sports Interaction, STS and SuperSport; Gaming brands include
Foxy Bingo, Gala, GiocoDigitale, Ninja Casino, Optibet, Partypoker and
PartyCasino. The group operates the TAB NZ brand as part of a long-term
strategic partnership with TAB New Zealand. The Group owns proprietary
technology across all its core product verticals and in addition to its B2C
operations provides services to a number of third-party customers on a B2B
basis.

The Group has a 50/50 joint venture, BetMGM, a leader in sports betting and
iGaming in the US. Entain provides the technology and capabilities which power
BetMGM as well as exclusive games and products, specially developed at its
in-house gaming studios. The Group is tax resident in the UK and is the only
global operator to exclusively operate in domestically regulated or regulating
markets operating in over 30 territories.

Entain is a leader in ESG, a member of FTSE4Good, the DJSI and is AA rated by
MSCI. For more information see the Group's website: www.entaingroup.com
(http://www.entaingroup.com/) .

 

 

Important notices

Certain statements in this announcement are forward-looking statements which
are made in good faith, including with respect to Entain's current
expectations, intentions and projections regarding its future performance,
strategic initiatives, anticipated events or trends and other matters that are
not historical facts and which are, by their nature, inherently predictive,
speculative and involve risks and uncertainty because they relate to events
and depend on circumstances that may or may not occur in the future. All
statements that address expectations or projections about the future,
including statements about operating performance, strategic initiatives,
objectives, market position, industry trends, general economic conditions,
expected expenditures, expected cost savings and financial results are
forward‐looking statements. Any statements contained in this announcement
that are not statements of historical fact are, or may be deemed to be,
forward‐looking statements. These forward-looking statements, which may use
words such as "aim", "anticipate", "believe", "could", "intend", "estimate",
"expect", "may", "plan", "project", "will" or words or terms of similar
meaning or the negative thereof, are not guarantees of future performance and
are subject to known and unknown risks and uncertainties. There are a number
of factors including, but not limited to, commercial, operational, economic
and financial factors, that could cause actual results, financial condition,
performance or achievements to differ materially from those expressed or
implied by these forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond Entain's ability to control or
estimate precisely, such as changes in taxation or fiscal policy, future
market conditions, currency fluctuations, the behaviour of other market
participants, the actions of governments or governmental regulators, or other
risk factors, such as changes in the political, social and regulatory
framework in which Entain operates or in economic or technological trends or
conditions, including inflation, recession and consumer confidence, on a
global, regional or national basis. Given those risks and uncertainties,
readers are cautioned not to place undue reliance on forward-looking
statements. Forward-looking statements speak only as of the date of this
announcement. Entain and its affiliates, and any of its or their respective
directors, officers, partners, employees, advisers or agents (collectively,
"Representatives") expressly disclaim any obligation or undertaking to update
or revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise unless required to do so by applicable
law or regulation.

In particular, no statement in this announcement is intended to be a profit
forecast or profit estimate and no statement of a financial metric (including
estimates of EBITDA, profit before tax, free cash flow or net debt) should be
interpreted to mean that any financial metric for the current or future
financial years would necessarily match or exceed the historical published
position of Entain and its subsidiaries. Certain statements in this
announcement may contain estimates. The estimates set out in this announcement
have been prepared based on numerous assumptions and forecasts, some of which
are outside of Entain's influence and/or control, and is therefore inherently
uncertain and there can be no guarantee or assurance that it will be correct.
The estimates have not been audited, reviewed, verified or subject to any
procedures by Entain's auditors. Undue reliance should not be placed on them
and there can be no guarantee or assurance that they will be correct.

This announcement is being issued by and is the sole responsibility of Entain.
No representation or warranty, express or implied, is or will be made as to,
or in relation to, and no responsibility or liability is or will be accepted
by or on behalf of, Entain (apart from the responsibilities or liabilities
that may be imposed by the Financial Services and Markets Act 2000, as amended
or the regulatory regime established thereunder) or by its affiliates or any
of its Representatives as to, or in relation to, the accuracy, adequacy,
fairness or completeness of this announcement or any other written or oral
information made available to or publicly available to any interested party or
its advisers or any other statement made or purported to be made by or on
behalf of Entain or any of its affiliates or any of its Representatives in
connection with Entain and any responsibility and liability whether arising in
tort, contract or otherwise therefore is expressly disclaimed.

LEI: 213800GNI3K45LQR8L28

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