Update on current trading and operational strategy

Entain PLC

25 September 2023

 

7.00am 25 September 2023

Entain plc

("Entain" or the "Group")

Update on current trading and FY23 Online NGR guidance

Reiteration of FY2023 EBITDA guidance of £1.00bn-£1.05bn

Actions to accelerate operational strategy and performance

Entain plc (LSE: ENT), the global sports-betting, gaming and interactive entertainment group, is today providing an update on current trading and FY 2023 guidance, as well as plans to update shareholders on the progress of ongoing actions to accelerate operational performance and drive shareholder value.

Current trading

Post the summer, Online Net Gaming Revenue (NGR) has been mixed across the Group, but in aggregate, softer than anticipated.  Q3 Online NGR growth is now expected to be up high single-digit percent, and down high single digit percent on a proforma basis.  Key drivers include:

·    Adverse sporting results impacting sports margins during September

·    Group wide implementation of industry leading safer gambling measures and ongoing regulatory headwinds persisting longer than expected, particularly in the UK

·    Slower growth than expected in Australia and Italy

·    Good underlying Online growth (ex-regulatory impacts) as evidenced by further strong proforma growth in active customers across the quarter

·    Strong performance from recent acquisitions, particularly SuperSport in Croatia

·    Robust performance across Retail

·    BetMGM in the US continuing to perform well: on track to deliver positive EBITDA in the second half of 2023; FY2023 NGR at the upper end of $1.8-$2.0bn guidance; and the successful rollout of Single Account Single Wallet, as well as online sportsbook enhancements supporting strong start to the NFL season

We now expect Group Online NGR for FY2023 to be up low double-digit percent with proforma NGR down low single digit percent.  We reiterate our expectations for FY2023 EBITDA to be in the range of £1.00bn-£1.05bn supported by robust operational controls.

Actions to accelerate operational strategy and performance

Over the last three years Entain has undergone a significant strategic transformation, improving the quality of earnings and aligning operations to ensure the Group is positioned as strongly as possible to deliver long term shareholder value.

Alongside the Q3 trading update on 2 November 2023, management will share more detail on how these actions are being implemented to accelerate performance and delivery, including:

·    A comprehensive market review focusing on long-term sustainable organic growth

·    The simplification of Group structures and operations to improve operational leverage and reduce costs

·    A plan for the migration of acquired businesses on to the Group's industry leading technology platform

·    Optimising our capital allocation priorities

·    Progress on delivery of the Group's Online EBITDA margin target of 30%

Jette Nygaard-Andersen, CEO of Entain, commented:

"We continue to see good underlying growth in our online business and are reiterating our EBITDA guidance for the year despite softer than expected revenue growth in Q3 and the ongoing roll-out of industry-leading safer gambling measures.  We continue to attract more customers than ever before to enjoy our products and services. BetMGM remains on track to deliver positive EBITDA in H2 and a full year NGR performance at the top end of our expectations, and we are particularly excited about the product improvements that we are rolling out over the NFL season.

We have made significant changes to the Group over the last three years.  Our focus now is on accelerating the actions we are taking to drive sustainable organic growth, expand our margins, capitalise on the US opportunity and deliver long-term returns for our shareholders.  We remain confident in our ability to deliver on the vast opportunities ahead of us, and look forward to sharing more detail about the changes that we are making alongside our Q3 trading update in November."

Notes

(1)      Period relates to 1 July to 22 September 2023

(2)      Estimates of growth are based on a constant currency basis calculated by translating 2023 and 2022 performances at 2023 exchange rates

Enquiries:

Investor Relations - Entain plc David Lloyd-Seed, Chief IR & Communications Officer Davina Hobbs, Head of Investor Relations Aimee Remey, VP US Investor Relations Callum Sims, IR Manager	[e-mail]
Media - Entain plc Lisa Attenborough, Head of Corporate Communications Jay Dossetter, Head of Corporate PR Jodie Hitch, PR Manager	[e-mail]
Powerscourt Rob Greening/Russ Lynch/Sam Austrums	Tel: [phone] [e-mail]

Forward-looking statements

This document contains certain statements that are forward-looking statements. They appear in a number of places throughout this document and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, results of our operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. These forward-looking statements include all matters that are not historical facts. By their nature, these statements involve risks and uncertainties since future events and circumstances can cause results and developments to differ materially from those anticipated. Any such forward-looking statements reflect knowledge and information available at the date of preparation of this document. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation (596/2014) as it forms part of English law by virtue of the European Union (Withdrawal) Act 2018, the Listing Rules, the Disclosure Guidance and Transparency Rules and the Prospectus Rules), the Company undertakes no obligation to update or revise any such forward-looking statements. Nothing in this document should be construed as a profit forecast. The Company and its directors accept no liability to third parties in respect of this document save as would arise under English law.

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 and SuperSport; Gaming brands include Foxy Bingo, Gala, GiocoDigitale, Ninja Casino, Optibet, Partypoker and PartyCasino. 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 40 territories.

Entain is a leader in ESG, a member of FTSE4Good, the DJSI and is AA rated by MSCI. The Group has set a science-based target, committing to be carbon net zero by 2035 and through the Entain Foundation supports a variety of initiatives, focusing on safer gambling, grassroots sport, diversity in technology and community projects. For more information see the Group's website: www.entaingroup.com.

LEI: 213800GNI3K45LQR8L28

 

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