REG - Flutter Entertainmnt - Q4 2023 Trading Update

Flutter EntertainmentAnnouncement

18/01/2024 07:00

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RNS Number : 0725A  Flutter Entertainment PLC  18 January 2024

18 January 2024

Q4 2023 Trading Update

Consolidating US sports leadership position. Group ex-US in-line with Q3
guidance

                  Quarter ended 31 December              Fiscal year ended 31 December
  Unaudited £m    2023     2022     YoY%     YoY% CC(1)  2023      2022      YoY%      YoY% CC(1)

 AMPs(2) ('000s)  13,588   12,114   +12%                 12,325    10,245    +20%

 Sports revenue   1,655    1,527    +8%      +13%        5,771     4,788     +21%      +23%
 Gaming revenue   1,016    887      +15%     +19%        3,743     2,906     +29%      +29%
 Total revenue    2,671    2,414    +11%     +15%        9,514     7,693     +24%      +25%

All commentary presented within this trading update is on an IFRS accounting
basis. Flutter expects to present full year 2023 audited results in accordance
with US GAAP on 26 March 2024 and will issue reconciliations of historic
results between IFRS and US GAAP in advance of this date.

•     Group: Execution of Flutter strategy underpinned strong growth in
AMPs (+12%) and revenue (+15%)

·    US: Strong momentum delivered AMPs +33%, sportsbook stakes +53% and
gaming revenue +49%

-    FanDuel remained #1 US sportsbook with 43% Q4 gross revenue market
share, (51% net revenue share) with industry leading pricing and risk
management capabilities delivering significant expected gross revenue margin
growth

-    FanDuel Casino, #2 iGaming brand with continued market share gains to
26% in Q4, +5ppt year-on-year

-    Q4 revenue growth (+26%) reflected this underlying strength, partially
offset by a sportsbook net revenue margin decline year-on-year of 150bps to
7.0% driven by:

§ A 220bps expansion in sportsbook expected gross revenue margin year-on-year
to 13.5%, offset by;

§ An adverse sports results swing year-on-year of 320bps due to very customer
friendly sports results in the quarter (Q4 2023: -240bps adverse, Q4 2022:
+80bps positive) and;

§ An increase of 50bps in promotional spend year-on-year to 4.2%, in line
with year-to-date spend levels, which continue to drive strong returns

-    Relative to expectations, Q4 gross revenue was impacted by customer
friendly sports results of $343m which were primarily mitigated by expected
gross revenue margin being better than anticipated. This resulted in Q4 US net
revenue of £1,139m/$1,417m which is £147m/$225m below previous guidance
provided at Q3, with an approximate 35% flow through to Adjusted EBITDA.

•     Group ex-US: strong Q4 momentum, leading to FY 2023 performance in
line with guidance provided at Q3:

-    UK & Ireland (revenue +19%): Delivering continued market share
gains through product improvements

-    Australia (revenue -2%): Reflecting guided racing trends in line with
expectations

-    International (revenue +4%): Driven by Consolidate and Invest markets
which grew 7%

•     US listing and Flutter reporting:

-    Subject to the effectiveness of its Form 20-F Registration Statement
with the U.S. Securities and Exchange Commission, the effective date of our
NYSE listing is on track for 29 January 2024.

-    On 26 March the Group will report full year 2023 numbers in US GAAP
and US dollars and will provide 2024 guidance.

•     MaxBet: Transaction completed on 9 January 2024 adding a local
hero brand in Serbia, a fast growing regulated market, to the Flutter
portfolio.

 

Peter Jackson, Chief Executive, commented:

"The Group traded well in Q4 underpinned by our leading local brands supported
by global Flutter Edge advantages. In the US, FanDuel consolidated its sports
leadership position during the peak quarter for sporting activity, while
FanDuel Casino went from strength to strength. While sports results were very
customer friendly, particularly on the NFL in November, the underlying
momentum in the business remains very strong heading into 2024. Outside of the
US, the quarter traded in line with expectations, with continued strong
momentum in the UK&I supported by recent product enhancements and
International growth driven by our "Consolidate and Invest" markets.

Subject to the effectiveness of our Form 20-F registration statement with the
US Securities and Exchange Commission, we are very excited that the addition
of a US Flutter listing is now just days away. This is a pivotal moment for
the Group as we make Flutter more accessible to US based investors and gain
access to deeper capital markets.

I am looking forward to 2024 and further building on the momentum within the
Group to continue delivering growth."

 

Divisional summary

Fiscal quarter ended 31 December

 Unaudited revenue          Total                        Sports  Gaming      Average monthly players(2)

 £m
                            2023   2022   YoY %  YoY %   YoY %   YoY %       2023 (000s)     YoY %

                                                 CC(1)   CC      CC
 US                         1,139  955    +19%   +26%    +21%    +49%        4,032           +33%

 UK & Ireland               647    543    +19%   +19%    +18%    +21%        3,888           -2%
 - UK & Ireland Online      572    472    +21%   +21%    +21%    +22%        3,888           -2%
 - UK & Ireland Retail      75     71     +6%    +6%     +5%     +9%
 Australia                  304    332    -9%    -2%     -2%                 1,189           -7%
 International              582    583    0%     +4%     +1%     +5%         4,479           +17%
 Group ex-US                1,532  1,459  +5%    +8%     +6%     +11%        9,556           +5%
 Group                      2,671  2,414  +11%   +15%    +13%    +19%        13,588          +12%

Fiscal year ended 31 December

 Unaudited revenue          Total                        Sports  Gaming      Average monthly players(2)

 £m
                            2023   2022   YoY %  YoY %   YoY %   YoY %       2023 (000s)     YoY %

                                                 CC(1)   CC      CC
 US                         3,603  2,604  +38%   +41%    +39%    +47%        3,209           +38%

 UK & Ireland               2,455  2,144  +15%   +14%    +12%    +17%        3,911           +5%
 - UK & Ireland Online      2,155  1,871  +15%   +15%    +12%    +18%        3,911           +5%
 - UK & Ireland Retail      300    272    +10%   +10%    +10%    +8%
 Australia                  1,167  1,263  -8%    -3%     -3%                 1,111           +2%
 International              2,289  1,683  +36%   +36%    +60%    +29%        4,094           +31%
 Group ex-US                5,911  5,089  +16%   +17%    +12%    +24%        9,116           +15%
 Group                      9,514  7,693  +24%   +25%    +23%    +29%        12,325          +20%

(1) Constant currency ("cc") growth is calculated by retranslating the
non-sterling denominated components of Q4 2022 at Q4 2023 exchange rates.
Growth rates in the commentary are in local or constant currency.

(2) Average Monthly Players represent the average number of players who have
placed and/or wagered a stake and/or contributed to rake or tournament fees
during the month in the reporting period.

(3) Online sportsbook and gaming market share is the gross gaming revenue
("GGR"), unless otherwise stated, market share of our sportsbook and gaming
brands for Q4 2023 in the states in which FanDuel was live (excluding
Tennessee as they no longer report this data), based on published gaming
regulator reports in those states as of 16 January 2024.

 Analyst briefing:

 The Group will host a questions and answers call for institutional investors
 and analysts this morning at 9:00am (GMT). To dial into the conference call,
 participants need to register here
 (https://event.loopup.com/SelfRegistration/registration.aspx?booking=0qsbdSqx25eeHoALCsV3sYCmeLcT93DDW3DZtoMUxVk=&b=2389e96d-457b-46a8-bebb-fec356d5b031)
 where they will be provided with the dial in details to access the call.
 Contacts:

 Investor Relations:
 Paul Tymms, Investor Relations             + 44 75 5715 5768
 Ciara O'Mullane, Investor Relations        + 353 87 947 7862
 Liam Kealy, Investor Relations             + 353 87 665 2014

 Press:
 Kate Delahunty, Corporate Communications   + 44 78 1077 0165
 Lindsay Dunford, Corporate Communications  + 44 79 3197 2959
 Rob Allen, Corporate Communications        + 44 75 5444 1363
 Billy Murphy, Drury Communications         + 353 1 260 5000
 James Murgatroyd, FGS Global               + 44 20 7251 3801

 

About Flutter Entertainment plc:

We are a global betting and gaming group with an ambition to drive positive
and sustainable change in our industry. Through our world class brands we
excite and entertain customers, while leading the way in responsible play. Our
strength is the Flutter Edge, optimising the advantages of our global scale to
drive business performance and positive impact for our customers, colleagues
and communities.

We report as four divisions:

•       US: includes FanDuel, TVG and PokerStars brands, offering
regulated real money and free-to-play sports betting, online gaming, daily
fantasy sports and online racing wagering products to customers across various
states in the US and Canada.

•       UK & Ireland: includes the Sky Betting and Gaming, Paddy
Power, Betfair and tombola brands offering a diverse range of sportsbook,
exchange and gaming services across the UK and Ireland, along with Paddy Power
betting shops.

•       Australia: the Sportsbet brand offers online sport betting.

•       International: includes Sisal, PokerStars, Adjarabet, Betfair
and Junglee brands operating in multiple jurisdictions around the world
offering a diverse range of sportsbook, exchange and gaming services.

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